SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 12 or 15 (d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event report)
October 28, 1994
PACIFIC GATEWAY PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 1-8692
04-2816560
(State or other jurisdiction of (Commission (IRS
Employer Identification
incorporation or organization) File No.) No.)
ONE RINCON CENTER, 101 SPEAR STREET, SUITE 215, SAN
FRANCISCO, CA 94105
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including are code
(415)543-8600
Not Applicable
(Former name or former address and former fiscal year,
if changed since last report)
Not Applicable
(Former name or former address, if changed since last
report)
<PAGE>
Item 2. Disposition of Asset.
On October 19, 1994, the Registrant's 29.489%
partnership interest in Golden Gateway Center, a
California limited partnership (the "Partnership"),
was redeemed by the Partnership for $21 million
pursuant to a Redemption Agreement dated September 30,
1994. The Redemption Agreement is subject to the
terms and conditions in that certain Agreement dated
August 30, 1994 between the Registrant, as Seller, and
the Partnership, as amended by that certain First
Amendment to Agreement, dated September 27, 1994 (as
amended, the "Purchase Agreement").
The proceeds from the redemption will be used to
repay $18.5 million in debt to the Registrant's
primary lender, approximately $2.3 million in
anticipated Federal and state income taxes, and
expenses related to the transaction. The Registrant
will record a gain of approximately $39 million for
financial reporting purposes in connection with this
redemption.
The foregoing is only a summary of certain
principal terms and conditions of the Redemption and
Purchase Agreements. A copy of the Redemption and
Purchase Agreements is filed as an Exhibit to this
Current Report on Form 8-K and incorporated herein by
this reference. The foregoing description is subject
in all respects to the terms and conditions of such
Exhibits.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
1.1 Press Release Dated September 6, 1994
1.2 Press Release Dated October 24, 1994
1.3 Redemption Agreement dated September 30,
1994, between the Registrant and Golden
Gateway Center, a
California limited
partnership.
1.4 Purchase Agreement dated as of August
30, 1994, between the Registrant and Golden
Gateway Center, a
California limited
partnership.
1.5 First Amendment to Agreement dated
September 27, 1994, between the Registrant and
Golden Gateway
Center, a
California limited
partnership.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant
has duly caused this Report to be signed on its
behalf by the undersigned thereunto duly
authorized.
Dated: October 28, 1994
PACIFIC GATEWAY
PROPERTIES, INC.
(Registrant)
Roger D. Snell
Roger D. Snell
President and Chief
Executive Officer
Raymond V. Marino
Raymond V. Marino
Vice President and
Controller
(Principal
Financial and Accounting Officer)
<PAGE>
1.1
NEWS RELEASE
FOR RELEASE: SEPTEMBER 6, 1994
PACIFIC GATEWAY PROPERTIES TO RECEIVE $21 MILLION FOR
PARTNERSHIP
INTEREST REDEMPTION
SAN FRANCISCO, CALIFORNIA.....Pacific Gateway Properties
(PGP) (AMEX PGP) announced today that it has entered
into an agreement with Golden Gateway Center, a
California Limited Partnership (GGC), whereby GGC will
redeem PGP's 29.49% partnership interest in GGC for $21
million.
"The redemption of this partnership interest has
important strategic ramifications for Pacific Gateway
Properties," said Roger Snell, President and Chief
Executive Officer. "The net proceeds will be primarily
used to retire debt which will significantly improve
PGP's balance sheet and liquidity. Furthermore, this
transaction will utilize nearly all of the Company's net
operating loss carryover. The timing of this
transaction is important because other dispositions
could potentially have made it more difficult for the
Company to dispose its interests in GGC at a later date
if the net operating loss carryover had been applied to
other gains. This redemption is an important step in
further strengthening the Company's financial position."
Pacific Gateway Properties' strategic investment focus
is on West Coast properties with a particular emphasis
on the San Francisco Bay Area. PGP owns approximately
1.6 million square feet of projects in the Bay area
including Rincon Center, Walnut Creek Executive Park,
and the South Bay Office Tower. PGP also owns
properties in Arizona, Florida and Massachusetts.
FOR MORE INFORMATION CONTACT: Roger Snell, President
and CEO or
Raymond
Marino, Vice President
<PAGE>
1.2
NEWS RELEASE
FOR RELEASE OCTOBER 24, 1994
PACIFIC GATEWAY PROPERTIES COMPLETES PARTNERSHIP
REDEMPTION FOR
$21 MILLION
SAN FRANCISCO, CALIFORNIA...........Pacific Gateway
Properties (PGP) (AMEX-PGP) announced today that it
completed its redemption of its partnership interest in
Golden Gateway Center for $21 million.
"This transaction is strategically important to PGP,"
said Roger Snell, President and Chief Executive Officer.
"As announced earlier, net proceeds will primarily be
utilized to retire debt. This transaction will
significantly improve PGP's balance sheet and
liquidity."
Pacific Gateway Properties strategic investment focus is
in the Western United States. PGP's current portfolio
consists of projects in the San Francisco Bay Area,
Arizona, Florida and Massachusetts.
FOR MORE INFORMATION CONTACT:Roger Snell, President and
CEO or
Raymond Marino, Vice
President
<PAGE>
1.3
REDEMPTION AGREEMENT
For valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, PACIFIC
GATEWAY PROPERTIES, INC., a New York corporation
("Redeemed Party"), and GOLDEN GATEWAY CENTER, a
California limited partnership (the "Partnership"),
hereby agree as follows:
1. The Partnership hereby redeems all of
Redeemed Party's legal and beneficial right, title and
interest, in and to Golden Gateway Center, a
California limited partnership (the "Partnership"), as
established under the Articles of Limited Partnership
as Amended as of May 6, 1964, as said Articles were
amended by agreement of all of the Partners by
Amendment No. 1, dated as of September 8, 1964, by
Amendment No. 2, dated as of January 1, 1965, by
Amendment No. 3, dated as of June 30, 1965, by
Amendment No. 4, dated as of December 30, 1974, and by
Amendment No. 5, dated as of July 10, 1987, and
Estoppels and Consents executed by each of the then-
partners of the Partnership (and certain to-be-
admitted partners of the Partnership) during December
1991 and January 1992 (the "Partnership Agreement"),
which interest consists of a 29.489% partnership
interest in the Partnership (the "Partnership
Interest"), and Redeemed Party does hereby consent to
such redemption and hereby grants, assigns, transfers,
sets over and conveys to the Partnership the
Partnership Interest. The redemption hereunder shall
include, without limitation, all of Redeemed Party's
right, title and interest arising out of the
Partnership Interest of, in and to the Partnership's
assets and the right to receive distributions of
money, profits and other assets from the Partnership.
As of the date hereof, the Partnership shall possess
all legal and beneficial right, title and interest in
and to the Partnership Interest.
2. Redeemed Party represents and warrants
to the Partnership that as of the date hereof the
Partnership Interest is free and clear of any and all
liens, clouds, encumbrances or other rights of third
parties.
3. The Partnership hereby releases
Redeemed Party from, and hereby agrees to indemnify,
defend and hold Redeemed Party harmless against, any
and all Released Obligations, as such term is defined
in that certain Agreement dated as of August 30, 1994,
between Redeemed Party, as Seller, and the
Partnership, as amended by that certain First
Amendment to Agreement, dated September 27, 1994 (as
amended, the "Purchase Agreement").
<PAGE>
4. This Redemption Agreement shall be
binding on and shall inure to the benefit of and be
enforceable by the parties and their respective
successors, assigns, transferees, heirs, legatees,
designees, legal representatives, executors and
administrators.
5. The provisions of Sections 10.2, 10.4,
10.6, 10.7, 10.8, 10.10, 10.11 and 10.14 of the
Purchase Agreement shall be incorporated herein as if
set forth in their entirety, except that references in
said sections to the Purchase Agreement (where
applicable) shall be deemed to be to this Redemption
Agreement.
6. In the event of any inconsistency
between the Purchase Agreement and this Redemption
Agreement, the Purchase Agreement shall control. The
parties hereto acknowledge that the Purchase Agreement
contains certain indemnity provisions (including,
without limitation, relating to the Unreleased
Obligations, as such term is defined in the Purchase
Agreement), and that the redemption of the Partnership
Interest hereunder is subject to such provisions.
7. This Redemption Agreement may be
executed in any number of counterparts, each of which,
when executed and delivered, shall be deemed an
original, but such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused
this instrument to be executed as of September 30,
1994.
PACIFIC GATEWAY
PROPERTIES, INC., a New
York corporation
By: Roger D. Snell
Its: President and CEO
GOLDEN GATEWAY CENTER, a
California limited
partnership
By: Oakhill Gateway
Partners, L.P., a
California limited
partnership, its
Managing General
Partner
By: Oak Hill
Investments,
Inc., a
California
corporation,
its General
Partner
By: Timothy Foo
Its: President
<PAGE>
AGREEMENT
This Agreement is made as of the 30th day of
August, 1994, by and between PACIFIC GATEWAY
PROPERTIES, INC., a New York corporation ("Seller"),
and GOLDEN GATEWAY CENTER, a California limited
partnership (the "Partnership").
R E C I T A L S:
A. Seller is a general partner holding a
29.489% interest (the "PGP Partnership Interest") in
the Partnership, formed and governed pursuant to
Articles of Limited Partnership of Golden Gateway
Center Amended as of May 6, 1964, as said Articles
were amended by agreement of all of the partners by
Amendment No. 1 dated as of September 8, 1964, by
Amendment No. 2, dated as of January 1, 1965, by
Amendment No. 3, dated as of June 30, 1965, by
Amendment No. 4, dated as of December 30, 1974, and by
Amendment No. 5, dated as of July 10, 1987, and
Estoppels and Consents executed by each of the then-
partners of the Partnership (and certain to-be-
admitted partners of the Partnership) during December
1991 and January 1992 (the "Partnership Agreement").
B. The primary asset of the Partnership is
Golden Gateway Center, a mixed use residential, office
and retail development including certain parking and
recreational facilities and a park, all located in the
City and County of San Francisco, California and more
particularly described on Exhibit A attached hereto
(the "Property").
C. The Partnership desires to purchase and
redeem from Seller, and Seller desires to sell to the
Partnership, the PGP Partnership Interest, on the
terms and conditions set forth herein.
D. Prior to the Partnership's acquisition
of the PGP Partnership Interest, Seller desires to
convert the PGP Partnership Interest from a general
partnership interest into a limited partnership
interest. If Seller fails to convert the PGP
Partnership Interest into a limited partnership
interest prior to Closing (as defined below), the
Partnership intends to convert the PGP Partnership
Interest from a general partnership interest into a
limited partnership interest concurrent with the
Closing and the redemption of the PGP Partnership
Interest.
E. Upon the Closing, the Partnership shall
have redeemed all of Seller's interest in the
Partnership and Seller shall withdraw as a partner of
the Partnership.
NOW, THEREFORE, in consideration of the
foregoing and of the covenants and agreements of the
parties provided below, the parties hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE
Section 1.1. Purchase and Sale of PGP
Partnership Interest. On the terms and conditions set
forth herein, Seller shall sell to the Partnership,
and the Partnership shall purchase and redeem from
Seller, the PGP Partnership Interest. The Partnership
shall have no rights to enforce this Agreement to
acquire less than the entire PGP Partnership Interest,
and Seller shall have no right to enforce this
Agreement to require the Partnership to acquire less
than the entire PGP Partnership Interest.
Section 1.2. Purchase Price.
Section 1.2.1. The purchase price
(the "Purchase Price") for the PGP Partnership
Interest shall be Twenty-One Million Dollars
($21,000,000.00), subject to adjustment as provided in
Section 1.2.2 below.
Section 1.2.2. The Partnership shall
be entitled at Closing to a credit against the
Purchase Price in an amount equal to any distributions
made to Seller during the period commencing on the
date first written above and ending on the Closing
Date (as defined herein), which distributions result
from a return of capital to the Partnership resulting
from the refinancing of the existing debt on the
Property or the incurring of new debt secured by the
Property. The parties hereto acknowledge that the
Partnership may incur certain new indebtedness
concurrent with the Closing pursuant to Section 2.3.3
and that the Purchase Price shall be reduced by any
amounts that are distributed to Seller as a result of
the incurrence of such indebtedness.
Section 1.3. Manner of Payment. The
Purchase Price (less the Deposit, as hereinafter
defined, and any interest thereon) shall be paid by
the Partnership at the Closing in cash or other
immediately available funds, as provided in
Section 4.1.
Section 1.4. Deposit. Within two (2)
business days after the latter of the Partnership and
Seller executes this Agreement, the Partnership shall
deliver to Commonwealth Land Title Company or such
other escrow agent designated by the Partnership (and
reasonably acceptable to Seller) ("Escrow Agent") the
sum of Five Hundred Thousand Dollars ($500,000.00)
(the "Extension Option Amount"). At the Closing, the
Deposit (together with any interest earned thereon)
shall be delivered by Escrow Agent to Seller and
applied against the Purchase Price.
ARTICLE II
CONDITIONS PRECEDENT
Section 2.1. Waivers and Prior Consents.
The parties acknowledge and agree that the sale of the
PGP Partnership Interest as contemplated herein is
contingent upon obtaining the prior written consent of
the partners in the Partnership (other than Seller)
and certain third parties listed in this Section 2.1
who hold a security interest or other right in the PGP
Partnership Interest and/or the Property or the
partnership interest of certain other partners in the
Partnership (collectively the "Prior Consents" and
individually a "Prior Consent"). If any Prior Consent
required pursuant to documents evidencing such
security interests or other right in the PGP
Partnership Interest, the Property and/or such other
partnership interests is not obtained on or before the
Closing Date, the Partnership and Seller shall be
released from their obligations to purchase and sell
the PGP Partnership Interest as further provided in
Section 4.1. The Remaining General Partners (as
defined below) shall attempt to obtain the Prior
Consents described in Sections 2.1.1, 2.1.2, 2.1.3(A)
and 2.1.3(B), provided that the failure to obtain any
such Prior Consent shall not be deemed a Default of
the Partnership hereunder, provided that the Remaining
General Partners shall act diligently and in good
faith, using all reasonable efforts, to obtain all of
such required Prior Consents prior to the Closing
Date. The Partnership shall deliver written notice of
obtaining each such Prior Consent to Seller promptly
upon the Partnership's receipt of same. Seller shall
attempt to obtain the Prior Consent described in
Sections 2.1.3(C) and 2.1.4, provided that the failure
to obtain such Prior Consent shall not be deemed a
Default of Seller hereunder, provided that Seller
shall act diligently and in good faith, using all
reasonable efforts, to obtain such required Prior
Consent prior to the Closing Date. Seller shall
deliver written notice of obtaining such Prior Consent
to the Partnership promptly upon Seller's receipt of
same.
Section 2.1.1. Waiver of First Right
of Refusal. All partners of the Partnership other
than Seller must waive in writing a first right of
refusal granted pursuant to Article 15 of the
Partnership Agreement to purchase the PGP Partnership
Interest. Such waiver shall be included in the
consent provided for in Section 2.2 hereof (the
"Consent").
Section 2.1.2. Partner Consents.
Pursuant to Articles 10 and 15 of the Partnership
Agreement, all partners of the Partnership must
consent in writing to the redemption of the PGP
Partnership Interest by the Partnership, the
conversion of the PGP Partnership Interest from a
general partnership interest into a limited
partnership interest, and to the additional security
interests to be granted by the Remaining General
Partners to CREI (as defined below) in connection with
the obtaining of the Prior Consent described in
Section 2.1.3(B). Such consents shall be included in
the Consent. A list of the partners of the
Partnership is attached hereto as Exhibit C.
Section 2.1.3. Lenders' Consents.
(a) The written
consent of John Hancock Mutual Life Insurance Company
("Hancock") to (i) the sale of the PGP Partnership
Interest must be provided without Hancock requiring
any adverse modification in the existing deed of trust
on the Property held by Hancock or any of the loan
documents secured thereby, and (ii) the financing
provided pursuant to Section 2.3.3 below must be
provided without Hancock requiring any adverse
modification in the existing deed of trust on the
Property held by Hancock or any of the loan documents
secured thereby.
(b) The written
consent of Citicorp Real Estate Incorporated ("CREI")
to the financing provided pursuant to Section 2.3.3
below must be obtained under the terms of that certain
Loan Agreement dated as of January 31, 1992, between
CREI, as Lender, and Oakhill Gateway Partners, L.P., C
M Golden Gate, Inc., and Prime Property Fund II, L.P.,
each a general partner in the Partnership, as
Borrowers (collectively, the "Remaining General
Partners"). The parties hereto acknowledge that the
Remaining General Partners obtaining of such consent
will be dependent upon CREI and the Remaining General
Partners agreeing to mutually acceptable modifications
to the terms of such Loan Agreement and the loan
documents described therein, which modifications such
entities may approve or disapprove in their sole and
absolute discretion, and nothing contained in this
Agreement shall require the Remaining General Partners
or any other person or entity to make such
modifications other than on terms and conditions
acceptable to such person or entity in its sole and
absolute discretion.
(c) In addition to
the loans described above, CREI has made certain loans
and extensions of credit to Seller which are secured
by the PGP Partnership Interest. Pursuant to the loan
agreements between CREI and Seller, and on terms and
conditions acceptable to Seller in its sole and
absolute discretion, CREI must consent in writing to
the sale contemplated herein and agree to release the
PGP Partnership Interest which is held by CREI as
security for such loans.
Section 2.1.4. Seller's Board of
Directors Consent. On or before 12:00 p.m. (p.s.t.)
on September 10, 1994, the Board of Directors of
Pacific Gateway Properties, Inc. shall have approved
the sale of the PGP Partnership Interest to the
Partnership pursuant to the terms of this Agreement.
Seller shall not be obligated to sell the PGP
Partnership Interest unless and until its Board of
Directors has provided such approval. Seller's Board
of Directors shall have the complete discretion to
approve or disapprove the transactions described
herein. Prior to 12:00 p.m. (p.s.t.) on September 10,
1994, Seller shall notify the Partnership as to
whether or not such approval has been given.
Section 2.2. Partner Estoppel and Consent.
The parties acknowledge that the sale of the PGP
Partnership Interest as contemplated herein is
contingent upon each of the partners of the
Partnership executing the Consent, which Consent shall
be in form reasonably approved by the parties hereto
and which Consent shall include such matters as the
lenders referred to in Sections 2.1.3 and 2.3.3 may
require. The Remaining General Partners shall use all
reasonable efforts to obtain the signature of all such
partners of the Partnership to such Consents on or
before the Closing Date, but the failure of the
Partnership to obtain any such signatures shall in no
event be deemed a Default of the Partnership under
this Agreement, provided that such reasonable efforts
are used. Seller agrees to cooperate with the
Partnership and provide any information to the
partners which may reasonably be requested to
facilitate such partners' execution of the Consents.
Nothing in this paragraph shall require either Seller
or any other partner in the Partnership to provide
compensation, concessions or other considerations to
the partners as a condition of obtaining their
signature to the Consent.
Section 2.3. Additional Conditions. The
Partnership and Seller acknowledge and agree that:
(i) the Partnership's obligation to purchase the PGP
Partnership Interest is conditioned upon the
satisfaction of the matters set forth in this
Section 2.3 below (except to the extent that
Section 2.3.4 applies to the Partnership's
representations and warranties), and (ii) Seller's
obligation to sell the PGP Partnership Interest is
conditioned upon the satisfaction of the matters set
forth in Sections 2.3.4 (except to the extent that
Section 2.3.4 applies to Seller's representations and
warranties) and 2.3.6.
Section 2.3.1. Title Insurance.
Unless waived by the Partnership, Commonwealth Land
Title Company or such other title company selected by
the Partnership shall be irrevocably committed as of
the Closing Date to issue to the Partnership an ALTA
Owner's Policy or Policies of Title Insurance (Form B,
rev. 10/17/70), in the amount of the Purchase Price,
insuring the Partnership and/or its constituent
partners that fee simple title to the Property is
vested in the Partnership, subject only to those
exceptions acceptable to the Partnership, and which
shall contain such special indorsements as the
Partnership may reasonably require, including, but not
limited to, a non-imputation indorsement for the
benefit of the Partnership and its constituent
partners (collectively, the "Title Policy").
Section 2.3.2. PGP Partnership
Interest Free From Liens. Unless waived by the
Partnership, the PGP Partnership Interest, and all
rights appurtenant thereto, shall be transferred and
redeemed by the Partnership at Closing pursuant to
Exhibit D hereof, free and clear from all liens,
security interests or encumbrances of any nature,
except any created by the Partnership; it being
understood that this Section 2.3.2 shall not apply to
any liens, encumbrances or security interests on the
Property (as opposed to the PGP Partnership Interest).
Section 2.3.3. Financing Contingency.
Unless waived by the Partnership, prior to or
concurrent with the Closing, (i) the Partnership shall
have obtained one or more commitments (collectively,
the "New Financing Commitment") from one or more
lenders (which lenders may be institutional lenders
and/or non-institutional lenders) to lend to the
Partnership an amount deemed sufficient in the
Partnership's sole discretion to enable the
Partnership to purchase and redeem the PGP Partnership
Interest and obtain the Prior Consent referred to in
Sections 2.1.3(B), (ii) the New Financing Commitment
shall have closed in accordance with its terms, and
(iii) the lender(s) under the New Financing Commitment
shall have delivered to the Partnership the funds
described in the New Financing Commitment. The
parties hereto acknowledge that the terms and
conditions of the New Financing Commitment, including,
without limitation, the loan amount, interest rate,
maturity date and amortization schedule, shall be as
the Partnership may approve in its sole and absolute
discretion. The parties hereto further acknowledge
that the closing of the New Financing Commitment
(including the funding of the loan(s)) will be
dependent upon the Partnership and such lender(s)
negotiating mutually acceptable forms of loan
documents, which forms the Partnership may approve or
disapprove in its sole and absolute discretion, and
nothing contained in this Agreement shall require the
Partnership to close the funding of the loan(s)
described in the New Financing Commitment other than
on terms and conditions acceptable to the Partnership
and such lender(s) in their sole and absolute
discretion. The parties hereto acknowledge that as of
the date hereof the Partnership contemplates financing
the purchase and redemption of the PGP Partnership
Interest generally in accordance with those certain
term sheets attached hereto as Exhibit B (the "Term
Sheets"), provided that the foregoing shall not
obligate the Partnership to close those transactions
described in the Term Sheets.
Section 2.3.4. Representations and
Warranties as of Closing. Each representation and
warranty made by the Partnership and Seller under
Sections 6.1 and 6.2, respectively, shall have been
true and correct when made and as of the Closing Date.
Section 2.3.5. No Material Change in
Condition. The physical condition of the Property
shall be substantially the same on the Closing Date as
on the date of the Partnership's execution of this
Agreement, reasonable wear and tear and loss by
casualty excepted (subject to Section 10.2 hereof),
and there shall be no material adverse change in the
financial condition of the Property or the Partnership
between the date of the Partnership's execution of
this Agreement and the Closing Date.
Section 2.3.6. Releases. The
Remaining General Partners shall have executed and
delivered to Seller a general release substantially in
the form of Exhibit E attached hereto (the "Release of
Seller") and a certification substantially in the form
of Exhibit F attached hereto (the "Certificate"), and
Seller shall have executed and delivered to the
Remaining General Partners a general release
substantially in the form of Exhibit G attached hereto
(the "Release of the Remaining General Partners and
the Partnership").
ARTICLE III
PARTNERSHIP ACCOUNTS AND OBLIGATIONS
Section 3.1. Redemption and Release by the
Partnership. As of the Closing Date and pursuant to
Section 5.1 hereof, the Partnership hereby agrees to
redeem the PGP Partnership and release Seller from,
and to indemnify, defend and hold Seller harmless
against, all obligations, liabilities, claims, causes
of action and/or damages respecting or relating to the
Property or the Partnership which (i) arise out of or
accrue from any action, omission, event or transaction
occurring on or after the Closing Date, (ii) have
arisen or accrued prior to the Closing Date, but only
to the extent such obligations, liabilities, claims,
causes of action and/or damages (a) arise from
obligations or liabilities incurred by the Partnership
in the ordinary course of business or (b) arise from
existing contractual obligations, including, without
limitation, obligations under loans to or financings
of the Partnership, obligations under leases and
service contracts, and obligations to Partnership and
Property employees, and (iii) are undertaken by the
Partnership pursuant to that certain First Amended and
Restated Agreement Regarding Capital Improvement Work,
dated as of January 30, 1992 (the "CIW Agreement")
(collectively, the "Released Obligations"). Except
with respect to those portions of the Released
Obligations described in clauses (ii) and (iii) above,
Seller shall not be released from, and the Partnership
shall not indemnify, defend or hold Seller harmless
from, any other obligation, liability, claim and/or
cause of action relating to the Property or the
Partnership which has arisen out of or accrued from
any action, omission, event or transaction occurring
prior to the Closing Date (collectively, the
"Unreleased Obligations"). Without limiting the
foregoing, the Partnership specifically shall not
release Seller from any liability or obligation which
has arisen or accrued prior to the Closing Date
(whether known or unknown) and which relates to or
arises from the presence of any Hazardous Material (as
defined below) (including, without limitation,
asbestos) at, on, in, under or about the Property
prior to the Closing Date or the removal of any
Hazardous Material (including, without limitation,
asbestos) from or about the Property prior to the
Closing Date. However, the Seller's surviving
obligations with respect to Hazardous Materials shall
not extend to any work covered by the CIW Agreement.
For the purposes of this Agreement, "Hazardous
Material" shall mean any substance, chemical, waste or
other material which is listed, defined or otherwise
identified as "hazardous" or "toxic" under any
federal, state, local or administrative agency
ordinance or law, as well as any formaldehyde, urea,
polychlorinated biphenyls, petroleum, petroleum
product or by-product, crude oil, natural gas, natural
gas liquids, liquefied natural gas, or synthetic gas
usable for fuel or mixture thereof, radon, asbestos,
and "source," "special nuclear" and "by-product"
material as defined in the Atomic Energy Act of 1985,
42 U.S.C. section 3011 et seq. The parties hereto
acknowledge and agree that the intent of this
Section 3.1 is that at Closing the Partnership shall
release Seller from all obligations, liabilities,
claims, causes of action and/or damages respecting the
Property or the Partnership and that would otherwise
be allocable to the PGP Partnership Interest other
than with respect to (a) Hazardous Materials (to the
extent provided above) or (b) extraordinary, unknown
liabilities relating to events occurring in whole or
in part prior to the Closing Date and involving an
amount in controversy in excess of $10,000 in the
singular and $50,000 in the aggregate, and that this
Section 3.1 (and the Redemption Agreement referred to
in Section 5.1 below) shall be construed consistently
with this intent. Liabilities covered by clause (b)
above shall include, by way of illustration only,
class action litigation alleging rental overcharges or
discrimination in housing or employment. The
provisions of this Section 3.1 shall survive the
Closing.
Section 3.2. Proration of Income or Loss.
All income, loss, depreciation and credits accruing or
attributable to the PGP Partnership Interest for tax
and accounting purposes for the calendar year 1994
shall be allocated between Seller and the Partnership
as of the 12:01 a.m. on the Closing Date, based upon
the relative number of days in the 1994 calendar year
before and after the Closing.
Section 3.3. Distributions. Seller shall
be entitled to retain all cash distributions of the
Partnership actually made to Seller prior to Closing.
The partners in the Partnership shall be deemed to own
the PGP Partnership Interest as of Closing and shall
be entitled to receive all cash distributions of the
Partnership made with respect to the PGP Partnership
Interest on or after Closing in proportion to their
respective percentage interests in the Partnership as
such exist immediately prior to the Closing; provided,
however, that Seller shall be paid at Closing an
amount equal to (A) the product of (i) $1,238,538 (the
product of $4,200,000 multiplied by 0.29489)
multiplied by (ii) a fraction, the numerator of which
is the number of days in the period commencing on (and
including) January 1, 1994 and ending on (but
excluding) the Closing Date, and the denominator of
which is three hundred sixty-five (365), minus (B) the
amount of all distributions paid to Seller for the
calendar year 1994 (other than pursuant to
Section 1.2.2 above).
Section 3.4. No Responsibility. The
parties hereto acknowledge and agree that Seller shall
have no responsibility for the payment of (by way of
indemnity or otherwise) any transfer taxes assessed
against the Property as a result of this transaction,
whether this transaction is considered alone or in
combination with any prior transfer or transfers of
interests in the Partnership.
ARTICLE IV
CLOSING
Section 4.1. Closing Conference. The
purchase and sale of the PGP Partnership Interest
provided herein shall be consummated through a closing
conference which shall be held on or before
September 30, 1994 (the "Closing Date,") at the
offices of Morrison & Foerster, 345 California Street,
San Francisco, California. Closing of the purchase
and sale of the PGP Partnership Interest shall be
deemed to have occurred when the conditions set forth
in Article II have been satisfied or waived, the
documents described in Article V and all other
documents reasonably required by the parties have been
duly executed and delivered and the full amount of the
Purchase Price has been delivered to Seller in cash or
other immediately available funds (collectively, the
"Closing"). In the event that the Closing has not
occurred on or before September 30, 1994, this
Agreement shall automatically terminate, neither party
shall have any further obligation hereunder (except as
otherwise expressly set forth herein), the Deposit
shall be returned to the Partnership (unless the
Closing does not occur as the sole result of a Default
of the Partnership hereunder), and Seller may dispose
of the PGP Partnership Interest in any manner it deems
acceptable (subject to any applicable restrictions set
forth in the Partnership Agreement).
Section 4.2. Closing Costs.
Section 4.2.1. Seller's Costs.
Seller shall pay (i) one half of all charges of Escrow
Agent (if any), (ii) all sales or transfer taxes, if
any, imposed on the transfer of the PGP Partnership
Interest (provided that Seller shall have no liability
for any transfer taxes assessed against the Property
as opposed to the Partnership Interest), and
(iii) Seller's legal fees and expenses and the costs
of any opinions, instruments, documents and papers
required to be delivered by Seller hereunder,
including, without limitation, the costs of all
performance by Seller of its obligations hereunder.
Section 4.2.2. The Partnership's
Closing Costs. The Partnership shall pay (i) one half
of all charges of Escrow Agent (if any), (ii) the
Title Policy premium, and (iii) the Partnership's
legal fees and expenses and the costs of all opinions,
instruments, documents and papers required to be
delivered by the Partnership hereunder, including,
without limitation, the costs of all performance by
the Partnership of its obligations hereunder.
ARTICLE V
ADDITIONAL AGREEMENTS TO BE EXECUTED
The following documents shall be executed
by the parties and delivered at the Closing (unless
waived by mutual written agreement of the parties).
Section 5.1. Redemption Agreement. The
Partnership and Seller shall execute a Redemption
Agreement in the form set forth on Exhibit D hereto.
Section 5.2. Closing Certificates. Seller
shall execute a closing certificate and the
Partnership shall execute a closing certificate, which
documents shall certify that Seller's and the
Partnership's respective representations and
warranties contained in Section 6 below were true and
correct when made and are true and correct as of the
Closing Date.
Section 5.3. Amendment to Certificate of
Limited Partnership. All general partners of the
Partnership (or such lesser number as is required by
the Partnership's certificate of limited partnership)
shall sign an amendment to the Partnership's
certificate of limited partnership (Form LP-2), file
the same with the Secretary of State of California,
and record the same in the official records of the
City and County of San Francisco, reflecting, to the
extent necessary, the withdrawal of Seller from the
Partnership.
Section 5.4. Tax Withholding.
Section 5.4.1. Federal Withholding.
Seller shall deliver to the Partnership either (a) an
affidavit pursuant to Section 1445(b)(2) of the United
States Internal Revenue Code (the "Federal Code"), and
on which the Partnership is entitled to rely, that
Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Federal Code, (b) a
withholding certificate issued by the Internal Revenue
Service (the "IRS"), pursuant to Section 1445(a)(4) of
the Federal Code and the regulations promulgated
thereunder, which excuses the Partnership from any
withholding obligation under Section 1445 of the
Federal Code or (c) if Seller fails to deliver the
affidavit described in (a) above or the withholding
certificate described in (b) above, a certificate,
affidavit or other evidence sufficient to establish
that the Partnership is not otherwise required to
deduct and withhold a portion of the Purchase Price
pursuant to the provisions of Section 1445 of the
Federal Code, together with any regulations now or
hereafter promulgated thereunder (collectively
referred to as the "Federal Withholding Provisions"),
in connection with the transactions contemplated
herein.
If Seller fails to deliver such an
affidavit, withholding certificate, certificate or
other evidence, the Partnership shall not be excused
from its obligation to consummate the transactions
contemplated herein, but rather may deduct and
withhold from the Purchase Price an amount equal to
ten percent (10%) of the "amount realized on the
disposition" of any "United States real property
interest" in connection with the transactions
contemplated herein, all as defined and required by
the Federal Withholding Provisions. Any amount so
withheld shall be deemed to have been paid by the
Partnership as a part of the Purchase Price. Should
Seller deliver a withholding certificate issued by the
IRS pursuant to the Federal Withholding Provisions
which permits the Partnership to withhold an amount
less than 10% of the amount realized on the
disposition, the Partnership may withhold such lesser
amount, and the amount so withheld shall be deemed to
have been paid by the Partnership as part of the
Purchase Price.
Section 5.4.2. State Withholding.
Seller shall deliver to the Partnership either (a) a
properly executed California Form 590 certifying that
Seller has a permanent place of business in California
or is qualified to do business in California or (b) a
certificate or other evidence sufficient to establish
that, as contemplated by Sections 18805 and 26131 of
the California Revenue and Taxation Code (the "State
Code"), together with any regulations now or hereafter
promulgated thereunder (collectively, the "State
Withholding Provisions"), (i) Seller is a bank acting
as trustee other than a trustee of a deed of trust, or
(ii) Seller is a partnership, or (c) evidence that the
California Franchise Tax Board has authorized a
partial or total reduction in the amount required to
be withheld from the Purchase Price.
If Seller fails to deliver such Form 590,
certificate or other evidence, the Partnership shall
not be excused from its obligation to consummate the
transactions contemplated herein, but rather may
deduct and withhold from the Purchase Price an amount
equal to three and one-third percent (3-1/3%) of the
"sales price of the California real property conveyed"
in connection with the transactions contemplated
herein, as defined and required by the State
Withholding Provisions. Any amount so withheld shall
be deemed to have been paid by the Partnership as a
part of the Purchase Price. Should Seller deliver
evidence to the Partnership that the California
Franchise Tax Board has authorized a partial or total
reduction in the amount required to be withheld from
the Purchase Price pursuant to the State Withholding
Provisions, the Partnership may withhold only the
amount required by the Franchise Tax Board to be
withheld, if any, and any amount so withheld shall be
deemed to have been paid by the Partnership as part of
the Purchase Price.
The Partnership acknowledges and agrees
that its has received written notice of the
withholding requirements set forth in the State
Withholding Provisions.
Section 5.5. Estoppel and Consent. Each of
the partners of the Partnership (including Seller)
shall execute the Consent.
Section 5.6. Releases. Seller and the
Remaining General Partners shall execute the Release
of Seller and the Release of the Remaining General
Partners and the Partnership, as applicable.
Section 5.7. Certificate. The Remaining
General Partners shall execute the Certificate.
Section 5.8. Further Assurances. The
Partnership and Seller hereby agree to cooperate with
the other after the date hereof and without further
consideration to execute, deliver, record and publish
as may be necessary or appropriate any certificates,
instruments or documents of sale, assignment, or
transfer of the PGP Partnership Interest from Seller
to the Partnership and to take such other action as
may be reasonably necessary to effectively sell and
transfer or vest in the Partnership or put the
Partnership in possession of the PGP Partnership
Interest as of Closing, and the parties shall each do
or perform such further acts and things and execute
and deliver such further certificates, instruments and
other documents as may be reasonably necessary and
proper to implement the intent of the parties as
expressed in this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties
of The Partnership. The Partnership hereby represents
and warrants to Seller as follows:
Section 6.1.1. Power and Authority.
The Partnership is a limited partnership duly
organized and validly existing and in good standing
under the laws of the State of California and is
qualified to do business in the State of California.
This Agreement and all other agreements, instruments
and documents herein provided or required to be
executed or to be caused to be executed by the
Partnership are (or, in the case of documents to be
executed or effective on or before Closing, will be)
duly authorized, executed and delivered by and are
binding upon the same. The Partnership has the
capacity and authority to enter into this Agreement
and all other agreements contemplated herein and to
consummate the transaction as herein provided, and,
other than the necessity of satisfying certain of the
conditions described in Article II above, nothing
prohibits or restricts the ability of the Partnership
to close the transaction contemplated hereunder and
carry out the terms hereof. Neither this Agreement
nor any other agreement, document or instrument
executed or to be executed in connection with the
transaction contemplated herein shall breach,
invalidate, cancel, make inoperative or interfere
with, or result in the acceleration or maturity of,
any contract, agreement, lease, easement, right or
interest affecting or relating to the Partnership or
the Partnership's interest in the Partnership upon
Closing.
Section 6.1.2. No Dissolution or
Other Proceedings. No action at law or in equity and
no investigation or proceeding is now pending or
threatened that may result in the liquidation,
dissolution, or disincorporation of the Partnership or
result in the declaration of any of the rights,
powers, franchises or privileges of the Partnership to
be null and void or otherwise not in full force and
effect.
Section 6.1.3. No Restrictions On
Transaction. Except as described in Article II
hereof, the Partnership is not subject to any charter,
provision, bylaw, indenture, mortgage, lien, lease,
agreement, instrument, law, rule, regulation, order,
judgment or decree or any other restriction that would
interfere with the consummation of the transaction
provided in or contemplated by this Agreement. This
Agreement has been duly authorized and represents a
legal, valid and binding obligation of the
Partnership, enforceable against the Partnership in
accordance with its terms.
Section 6.1.4. Litigation. The
Partnership is not party to any pending, and does not
have any notice or knowledge of any threatened,
action, suit, proceeding or investigation at law, in
equity or otherwise, in, before or by any court or any
governmental board, commission, agency, department or
officer, in which an adverse determination would have
any material adverse effect upon the transaction
provided for herein or contemplated hereby.
Section 6.1.5. The Partnership's
Inspection. The Closing shall evidence that the
Partnership and its agents, consultants and
contractors have had an opportunity to conduct such
examinations and inspections of the Partnership and
the Property as they have deemed or may deem necessary
or desirable. At Closing, the Partnership will be
purchasing the PGP Partnership Interest in reliance on
its own examination and inspection of the Partnership
and the Property; provided, however, the Partnership
may rely on Seller's representations and warranties
contained in this Agreement. Except as set forth in
this Agreement, Seller has not and is not making any
representations or warranties respecting the
Partnership or the Property.
Section 6.2. Representations and Warranties
of Seller. Seller hereby represents and warrants to
the Partnership as follows:
Section 6.2.1. PGP Partnership
Interest. Seller holds the PGP Partnership Interest
and will have the authority to sell the PGP
Partnership Interest, as of Closing, free and clear of
any liens, claims, charges, encumbrances, or purchase
options of any kind or character.
Section 6.2.2. Power and Authority.
Seller is a corporation duly organized and validly
existing and in good standing under the laws of the
State of New York and is in good standing under the
laws of the State of California. This Agreement and
all other agreements, instruments and documents herein
provided or required to be executed or to be caused to
be executed by Seller are (or, in the case of
documents to be executed or effective on or before
Closing, will be) duly authorized, executed and
delivered by and are binding upon the same. Seller
has the capacity and authority to enter into this
Agreement and all other agreements contemplated herein
and to consummate the transaction as herein provided,
and, other than the necessity of satisfying certain of
the conditions described in Article II above, nothing
prohibits or restricts the ability of Seller to close
the transaction contemplated hereunder and carry out
the terms hereof. Neither this Agreement nor, as of
Closing, any other agreement, document or instrument
executed or to be executed by Seller in connection
with the transaction contemplated herein shall breach,
invalidate, cancel, make inoperative or interfere
with, or result in the acceleration or maturity of,
any contract, agreement, lease, easement, right or
interest affecting or relating to Seller or the PGP
Partnership Interest.
Section 6.2.3. No Dissolution Or
Other Proceedings. No action at law or in equity and
no investigation or proceeding is now pending or
threatened that may result in the liquidation,
dissolution, or disincorporation of Seller or result
in the declaration of any of the rights, powers,
franchises or privileges of Seller to be null and void
or otherwise not in full force and effect.
Section 6.2.4. No Restrictions On
Transaction. Except as described in Article II
hereof, Seller is not subject to any charter,
provision, by-law, indenture, mortgage, lien, lease,
agreement, instrument, law, rule, regulation, order,
judgment or decree or any other restriction that would
interfere with the consummation of the transaction
provided in or contemplated by this Agreement. This
Agreement has been duly authorized and represents a
legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its
terms.
Section 6.2.5. Litigation. Seller is
not a party to any pending, and does not have any
notice or knowledge of any threatened, action, suit,
proceeding or investigation, at law, in equity or
otherwise, in, before or by any court or any
governmental board, commission, agency, department or
officer, in which an adverse determination would have
any material adverse effect on the transactions
provided for herein or contemplated hereby.
Section 6.2.6. No Other
Representations and Warranties. The representations
and warranties in this Section 6.2 are the sole
representations and warranties of Seller in respect to
the transaction contemplated by this Agreement.
Without limiting the generality of the foregoing,
Seller expressly makes no representation or warranty
other than those set forth herein concerning the
condition of the Partnership or the Property.
ARTICLE VII
DEFAULT
Section 7.1. Seller's Default. Seller
shall be deemed to be in default hereunder upon the
occurrence of any one or more of the following events
(each a "Default of Seller"): (i) any of Seller's
representations or warranties set forth herein is
materially untrue when made or becomes materially
untrue at any time on or before the Closing Date, and
same cannot be cured to the Partnership's satisfaction
prior to Closing; and (ii) Seller fails to meet,
comply with, or perform any covenant, agreement or
obligation on its part required within the time limits
and in the manner provided in this Agreement. In the
event of a Default of Seller hereunder, the
Partnership shall be entitled to seek any appropriate
remedy available at law or in equity.
Section 7.2. The Partnership's Default;
Disposition of Deposit.
Section 7.2.1. The Partnership's
Default. The Partnership shall be deemed to be in
default hereunder and in breach of this Agreement upon
the occurrence of any one or more of the following
events (each a "Default of the Partnership"): (i) any
of the Partnership's representations or warranties set
forth herein is materially untrue when made or becomes
materially untrue at any time on or before the Closing
Date, and same cannot be cured to Seller's
satisfaction prior to Closing; and (ii) the
Partnership fails to meet, comply with, or perform any
covenant, agreement or obligation on its part required
within the time limits and in the manner provided in
this Agreement.
Section 7.2.2. Disposition of
Deposit. In the event that the sale of the Property
is not consummated because of the failure of any
condition or any other reason except as the sole
result of a Default of the Partnership hereunder, the
Deposit plus interest accrued thereon shall
immediately be returned to the Partnership. If said
sale is not consummated solely because of a Default of
the Partnership hereunder, the Deposit but not the
interest accrued thereon shall be paid to and retained
by Seller as liquidated damages. The parties have
agreed that Seller's actual damages, in the event of a
default by the Partnership, would be extremely
difficult or impracticable to determine. THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES
ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE
OF SELLER'S DAMAGES AND AS SELLER'S EXCLUSIVE REMEDY
AGAINST THE PARTNERSHIP, AT LAW OR IN EQUITY, IN THE
EVENT OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
THE PARTNERSHIP THAT RESULTS IN THE SALE OF THE
PROPERTY NOT BEING CONSUMMATED.
INITIALS: Seller RDS The Partnership TF
ARTICLE VIII
INDEMNIFICATION
Section 8.1. By Seller. Seller hereby
agrees to indemnify, defend and hold the Partnership
harmless against any and all loss, obligations,
liabilities, claims, causes of action and/or damages
(i) that may arise as a result of any Default of
Seller, or (ii) that may arise or accrue out of any
Unreleased Obligations that are allocable to the PGP
Partnership Interest; provided, however, the foregoing
shall not require Seller to indemnify, defend or hold
the Partnership harmless from any claims against or
losses of the Partnership or the Property which are
covered by insurance carried by or benefitting the
Partnership or the Property. The provisions of this
paragraph shall survive the Closing.
Section 8.2. By The Partnership. In
addition to the indemnification set forth in
Section 3.1 and elsewhere in this Agreement, the
Partnership hereby agrees to indemnify, defend and
hold Seller harmless against any and all loss,
obligations, liabilities, claims, causes of action
and/or damages that may arise as a result of any
Default of the Partnership; provided, however, the
foregoing shall not require the Partnership to
indemnify, defend or hold Seller harmless from any
claims against or losses of the Partnership or the
Property which are covered by insurance carried by or
benefitting the Partnership or the Property to the
extent that proceeds of such insurance are actually
paid to Seller. The provisions of this paragraph
shall survive the Closing.
Section 8.3. Control of Defenses. Promptly
upon learning of any grounds that may reasonably and
foreseeably lead to a claim (a "Potential Claim") by
any party hereto (the "Indemnified Party") against the
other party hereto (the "Indemnifying Party") pursuant
to this Article VIII or any other provision of this
Agreement (including, without limitation,
Section 3.1), the Indemnified Party shall promptly
notify the Indemnifying Party of such grounds in
writing. Provided that the Indemnifying Party can
provide evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party has the
financial ability to satisfy the Potential Claim, the
Indemnifying Party shall have the right, but not the
obligation, to defend, contest, and control the
defense of any such Potential Claim, including
choosing counsel and controlling any settlement of the
Potential Claim. If, at any time prior to the
conclusion of such defense or contest, there are
reasonable grounds to believe that the Indemnifying
Party does not have the financial ability to satisfy
the Potential Claim, the Indemnified Party shall have
the right to assume control of such defense or
contest, including replacing counsel and controlling
any settlement. If the Indemnifying Party reasonably
demonstrates the financial ability to satisfy the
Potential Claim but requests the Indemnified Party to
control the defense or contest, the Indemnified Party
shall contest any Potential Claim in good faith and
shall forebear from compromising or settling any
Potential Claim without the prior written consent of
the Indemnifying Party, which consent shall not be
unreasonably withheld, delayed or conditioned.
ARTICLE IX
BROKER COMMISSIONS AND FEES
Section 9.1. Brokerage Commissions. Each
party represents and warrants to the other that it has
not had any contacts or dealings regarding the PGP
Partnership Interest, or any communication in
connection with the subject matter of this
transaction, through any real estate broker or other
person who can claim a right to a commission or
finder's fee in connection with the sale contemplated
herein. In the event that any broker or finder
perfects a claim for a commission or finder's fee
based upon any such contact, dealings or
communication, the party through whom the broker or
finder makes his claim shall be responsible for said
commission or fee and all costs and expenses
(including reasonable attorneys' fees and
disbursements) incurred by the other party in
defending against the same, and shall indemnify and
hold harmless the other party from and against any
cost, expense, claim, demand, damage, liability, loss
or expense (including reasonable attorneys' fees and
disbursements) in connection with the same. The
provisions of this paragraph shall survive the Closing
or any termination of this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1. Risk of Loss. As between the
Partnership and Seller, all risk of loss or damage
resulting from casualty to or condemnation of the
Property between the execution hereof and the Closing
Date shall remain with Seller. In the event of any
loss or damage to the Property, or the preparation for
or commencement of condemnation proceedings against
the Property, the Partnership may elect either to take
the PGP Partnership Interest together with the
proceeds of any insurance or condemnation award
allocable to such PGP Partnership Interest, or to
terminate this Agreement. If the Partnership elects
to terminate this Agreement pursuant to Section 10.1,
the Deposit shall be returned to the Partnership and
all parties shall be relieved of any further liability
hereunder (except as otherwise expressly set forth
herein).
Section 10.2. Survival. Subject to
Section 6.2.6 hereof, all covenants and agreements of
the Partnership and Seller made in this Agreement
shall survive the Closing.
Section Agreement contains the entire agreement of the parties
and supersedes any and all prior negotiations,
correspondence, undertakings and agreements among the
parties regarding the subject matter hereof.
Section 10.4. Time of the Essence. Time is
of the essence of this Agreement.
Section 10.5. Captions. Article and section
headings herein shall not be used in construing this
Agreement and are provided for reference only.
Section 10.6. Attorneys Fees. In any
controversy, claim, or dispute arising out of this
Agreement or the failure of any party to perform any
of its obligations hereunder, the prevailing party
shall be entitled to recover, in addition to any other
relief, all reasonable costs and expenses incurred in
enforcing its rights hereunder or recovering any
damages to which it may be entitled at law or in
equity, including, without limitation, reasonable
attorneys' fees and costs of suit. Costs of suit
shall include, without limitation, reasonable costs
associated with arbitration, mediation, bankruptcy,
administrative or judicial proceedings, and all
appeals therefrom.
Section 10.7. No Waiver. No waiver by a
party of any breach or default of this Agreement or of
any warranty or representation hereunder by the other
party shall be deemed to be a waiver of any other
breach or default by such other party (whether
preceding or succeeding and whether or not of the same
or similar nature), and no acceptance of payment or
performance by a party after any breach by the other
party shall be deemed to be a wavier of any breach of
this Agreement or of any representation or warranty
hereunder by such other party, whether or not the
first party knows of such breach at the time it
accepts such payment or performance. No failure or
delay by a party to exercise any right it may have by
reason of the default of the other party shall operate
as a waiver of default or modification of this
Agreement or shall prevent the exercise of any right
by the first party while the other party continues to
be in default.
Section 10.8. Governing Law. This Agreement
shall be construed and enforced in accordance with the
laws of the state of California.
Section 10.9. Press Releases and Publicity.
Any press release issued with respect to the
transactions contemplated hereby shall be subject to
the prior review of the Partnership and Seller, which
review shall not be unreasonably delayed, withheld or
conditioned; provided that either party hereto shall
have the right to withhold its consent in its sole and
absolute discretion to any publicly released
information that concerns matters other than (i) the
names of the entities that are the purchaser and
seller hereunder, (ii) the interest in the Partnership
transferred hereunder, (iii) the Closing Date and
(iv) the Purchase Price. In addition, the parties
shall forbear, and shall endeavor to instruct their
respective agents and representatives (including
bankers, and attorneys involved in this transaction)
to forebear, from publicizing or unnecessarily
disclosing any information regarding, or any terms of,
this transaction, whether before or after the Closing,
including, without limitation, through the preparation
and distribution of "tombstones."
Section 10.10. Successors and Assigns.
Neither the Partnership nor Seller may assign or
transfer its rights or obligations under this
Agreement, except as specifically provided herein,
without the prior written consent of the other. This
Agreement shall be binding on and shall inure to the
benefit of and be enforceable by the parties and their
respective successors, assigns, transferees, heirs,
legatees, designees, legal representatives, executors
and administrators.
Section 10.11. Notices. Any notice which a
party is required or may desire to give the other
shall be in writing and shall be sent by personal
delivery or by mail, either (i) by United States
registered or certified mail, return receipt
requested, postage prepaid, or (ii) by Federal Express
or similar generally recognized overnight carrier
regularly providing proof of delivery, addressed as
follows (subject to the right of a party to designate
a different address for itself by notice similarly
given):
To Seller: Pacific Gateway Properties,
Inc.
101 Spear Street, Suite 215
San Francisco, California
94105
Attention: Roger D. Snell
With Copy To: Bronson, Bronson & McKinnon
505 Montgomery Street
San Francisco, California
94111-2514
Attention: William P.
O'Connell, Esq.
To The Partnership: Golden Gateway Center
c/o Oakhill Gateway Partners,
L.P.
601 Montgomery Street, Suite
1010
San Francisco, California
94111
Attention: Timothy W. Foo
With Copy To: Morrison & Foerster
345 California Street
San Francisco, California
94104-2675
Attention: David S. Fries,
Esq.
Any notice given by mail shall be deemed to have been
given as of the date of delivery or attempted delivery
(whether accepted or refused) established by U.S. Post
Office return receipt or the overnight carrier's proof
of delivery or attempted delivery, as the case may be.
Any notice given by personal delivery shall be deemed
given upon receipt of the same by the party being
notified.
Section 10.12. Confidentiality. Seller
covenants and agrees that following the Closing Seller
and its agents, employees and contractors shall each
maintain as confidential and shall each not disclose
to any third party any information concerning or
relating to the Property or the Partnership, except
(i) pursuant to a valid court order, (ii) as required
by law, or (iii) to Seller's auditors, but only to the
extent necessary for such auditors to prepare Seller's
financial statements. Seller shall notify the
Partnership at least three (3) business days prior to
Seller's (or Seller's agents, employees or
contractors) making any disclosure which such person
believes is required under either clause (i) or
clause (ii) above. The provisions of this paragraph
shall survive the Closing.
Section 10.13. Exhibits. All exhibits,
schedules or lists attached to this Agreement and
referred to herein shall be deemed to be a part of
this Agreement and shall be incorporated herein by
their reference.
Section 10.14. Counterparts. This Agreement
may be executed in identical counterparts. Each such
counterpart shall be deemed an original and all
counterparts shall collectively constitute one
agreement.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date and year first
above written.
PACIFIC GATEWAY
PROPERTIES, INC.,
a New York corporation
By: Roger D. Snell
Its: President and CEO
GOLDEN GATEWAY CENTER,
a California limited
partnership
By: Oakhill Gateway
Partners, L.P.,
a California limited
partnership,
its Managing General
Partner
By: Oak Hill
Investments,
Inc.,
a California
corporation
its General
Partner
By: Timothy Foo
Its: President
<PAGE>
EXHIBIT LIST
Exhibit A: Intentionally omitted
Exhibit B: Intentionally omitted
Exhibit C: Intentionally omitted
Exhibit D: Included as a seperate exhibit to
Form 8K
Exhibit E: Form of Release of Seller
Exhibit F: Form of Certificate
Exhibit G: Form of Release of Remaining General
Partners and the Partnership<PAGE>
EXHIBIT E
FORM OF RELEASE OF SELLER
ACKNOWLEDGEMENT AND RELEASE
Each of the undersigned, OAKHILL GATEWAY
PARTNERS, L.P., a California limited partnership,
PRIME PROPERTY FUND II, L.P., a California limited
partnership, and C M GOLDEN GATE, INC., a California
corporation, (collectively, the "ExCom Partners"),
hereby covenants and agrees as follows:
1. Each of the undersigned is a general
partner in the Partnership (as defined below).
2. Each of the undersigned acknowledges
that Pacific Gateway Properties, Inc., a New York
corporation (formerly known as Perini Investment
Properties, Inc.) ("Seller"), is the "Seller" under
that certain Agreement dated as of August 30, 1994,
between Seller and the Partnership, as amended by that
certain First Amendment to Agreement, dated
September 27, 1994 (as amended, the "Purchase
Agreement"), pursuant to which Seller has agreed to
sell to the Partnership all of Seller's partnership
interest (the "Partnership Interest") in Golden
Gateway Center, a California limited partnership (the
"Partnership"), which Partnership Interest consists of
a 29.489% interest in the Partnership. Unless
otherwise defined herein, capitalized terms used
herein shall have the same meanings as set forth in
the Purchase Agreement.
3. Each of the undersigned acknowledges
that substantially concurrent herewith, each of the
undersigned is executing and delivering to Seller a
certificate dated as of even date herewith containing
certain representations and warranties made by the
ExCom Partners about the Property and the Partnership,
upon which certificate the undersigned acknowledge
that Seller is entitled to rely.
4. Except for the Unreleased Claims (as
defined below) and the Unreleased Obligations (as
defined in the Purchase Agreement), each of the
undersigned hereby releases and forever discharges
Seller and each of its respective affiliates,
successors and assigns and each of them, and each
employee, agent, contractor, subcontractor,
representative, officer, director, stockholder, and
constituent partner of each of the foregoing
(collectively, the "Released Parties"), from any and
all claims, damages, malfeasance, actions, causes of
action, suits, judgments, demands, liabilities,
obligations, costs, expenses, or losses of any type
(including attorneys' fees, costs and expenses),
whether known or unknown, fixed or contingent, arising
out of, resulting from, or in connection with the
Property or the Partnership, including, without
limitation, any claims that Seller has breached any
fiduciary duty owed to the ExCom Partners, any claims
for adjustment of the purchase price under the 1991
Agreement (as defined below), any claims arising under
any security agreements between Seller and the ExCom
Partners, and any claims or obligations arising under
and from that certain First Amended and Restated
Agreement Regarding Capital Improvement Work dated as
of January 31, 1992, among the ExCom Partners, Seller
and certain other persons. As used herein, the term
"Unreleased Claims" shall mean (i) those claims,
liabilities and obligations that are specifically
excluded from the claims, liabilities and obligations
assumed by the ExCom Partners pursuant to Section 3.1
of that certain Agreement dated as of December 30,
1991, between Seller and certain other entities, as
"Seller," and the ExCom Partners' predecessors-in-
interest, as "Buyers," regarding the sale of a 46.99%
interest in the Partnership (the "1991 Agreement"),
which unassumed claims, liabilities and obligations
are specified in clauses (i), (ii) and (iii) of
Section 3.1 of the 1991 Agreement (on page 27) and
restated in Paragraph 3 of that certain Assignment of
Partnership Interest and Assumption Related Thereto
dated as of December 31, 1991, by and among such
parties, (ii) any claims, liabilities or obligations
arising out of any intentional misrepresentation of a
representation or warranty made by Seller in the 1991
Agreement, and (iii) those claims, liabilities and
obligations that are specifically excluded from the
claims, liabilities and obligations assumed by the
ExCom Partners pursuant to Section 4.1 of that certain
Put and Call Agreement dated as of December 31, 1991,
between Seller, as "Seller," and the ExCom Partners'
predecessors-in-interest, as "Buyers," regarding the
granting of certain put and call options affecting a
3.00% interest in the Partnership, as amended (the
"Put and Call Agreement"), which unassumed claims,
liabilities and obligations are specified in
clauses (i) and (iii) of Section 4.1 of the Put and
Call Agreement (on pages 7 and 8) and restated in
Paragraph 3 of that certain Assignment of Partnership
Interest and Assumption Related Thereto dated as of
February 25, 1993, by and among Seller and the ExCom
Partners.
5. Concurrent with the execution of this
Acknowledgement and Release, the ExCom Partners each
agree to execute in favor of Seller documents or
instruments terminating all financing statements and
any other filings made to evidence or perfect security
interests granted by Seller to the ExCom Partners.
6. Each of the undersigned hereby
acknowledges that it is familiar with Section 1542 of
the California Civil Code, which provides as follows:
A general release does not
extend to claims which the
creditor does not know or
suspect to exist in his favor
at the time of executing the
release, which if known by him
must have materially affected
his settlement with the
debtor.
Nevertheless, each of the ExCom Partners acknowledges
that this release has been agreed upon in light of
this situation and expressly waives any and all rights
which it may have under Section 1542 of the California
Civil Code, or any other state or federal statute or
common law principle of similar effect with respect to
the matters released in Paragraph 4 above.
OGP: TF PPFII: DJ CMGG: HG
7. Each of the undersigned acknowledges
that its execution and delivery of this
Acknowledgement and Release is a condition to Seller's
obligation to sell the Partnership Interest and that
Seller is materially relying on this Acknowledgement
and Release in selling the Partnership Interest.
IN WITNESS WHEREOF, each of the undersigned
has executed this Acknowledgement and Release as of
the 30th day of September, 1994.
OAKHILL GATEWAY
PARTNERS, L.P.,
a California limited
partnership
By: Oak Hill
Investments, Inc.,
a California
corporation,
its general partner
By: Timothy Foo
Its: President
PRIME PROPERTY FUND-II,
L.P.,
a California limited
partnership
By: GGC Acquisition,
Inc.,
a California
corporation,
its general partner
By: Daniel James
Its: Secretary
C M GOLDEN GATE, INC.,
a California corporation
By: Henry Gaw
Its: President
<PAGE>
EXHIBIT F
FORM OF CERTIFICATE
CERTIFICATE
Each of the undersigned, OAKHILL GATEWAY
PARTNERS, L.P., a California limited partnership,
PRIME PROPERTY FUND II, L.P., a California limited
partnership, and C M GOLDEN GATE, INC., a California
corporation, hereby severally (and not jointly)
certifies, represents and warrants to PACIFIC GATEWAY
PROPERTIES, INC., a New York corporation ("PGP"), as
follows:
1. The undersigned has not received any
bona fide third party offers to purchase the Property
(as defined below) which remain in effect as of the
date hereof and is not engaged in any negotiations for
the sale, transfer or similar conveyance of all or any
significant portion of the Property (excluding
residential and commercial lease transactions) or any
legal or equitable interest therein (other than such
interests that are insubstantial in value, e.g.,
easements). As used herein, the term "Property" shall
mean that certain mixed-use residential, office and
retail development, including certain parking and
recreational facilities and a park, located in the
City and County of San Francisco, California and
commonly known as Golden Gateway Center, and the term
"Partnership" shall mean Golden Gateway Center, a
California limited partnership.
2. The undersigned does not presently
intend to market the Property for sale within the
forthcoming twelve (12) month period.
3. The undersigned does not presently
intend to undertake a refinancing of all or
substantially all of the debt encumbering the Property
within the forthcoming twelve (12) month period or to
further encumber the Property with debt in excess of
$5,000,000, other than any debt that is (i) incurred
substantially concurrent with the giving of this
Certificate, (ii) generally described in the term
sheets attached as "Exhibit B" to that certain
Agreement dated as of August 30, 1994, as amended by
that certain First Amendment to Agreement dated
September 27, 1994, between PGP and the Partnership
regarding the Partnership's redemption of all of PGP's
interest in the Partnership (as amended, the "Purchase
Agreement") or (iii) disclosed to PGP prior to the
date hereof.
4. The undersigned does not presently
intend to develop a residential, commercial or
entertainment complex on that portion of the Property
commonly known as "Lot 201" within the forthcoming
twelve (12) month period and is not currently engaged
in any negotiations (i) with Western Athletic Club
("WAC") to modify the terms of the lease between the
Partnership and WAC (the "WAC Lease") that would
result in any substantial increase in the rental
payments to the Partnership thereunder, (ii) to accept
a voluntary termination of the WAC Lease and relet the
premises demised thereunder to another party, or
(iii) with any other person regarding a transaction on
Lot 201 that would significantly increase the value of
the Partnership's assets. The Partnership is,
however, presently engaged in certain discussions with
WAC regarding certain modifications to the WAC Lease,
including modifications that would require WAC, at its
expense, to construct a new swimming pool.
5. The undersigned does not possess any
actual knowledge of any material inaccuracy in the
Partnership's fiscal year 1992 or 1993 audited
financial statements or the Partnership's unaudited
monthly income statements for 1994.
6. The undersigned does not presently
intend to subdivide, initiate a condominium
conversion, create a community interest development,
or create any similar plan, parcelization, or mode of
ownership which might materially affect the value or
marketability of all or any substantial part of the
Property within the forthcoming twelve (12) month
period.
7. Each of the undersigned understands,
acknowledges, and agrees that PGP is partially induced
to enter into the Purchase Agreement and to close the
sale provided for therein by the representations and
warranties made herein, and that PGP is relying on
these representations and warranties.
IN WITNESS WHEREOF, each of the undersigned
has executed this Certificate as of the 30th day of
Septmeber, 1994.
OAKHILL GATEWAY
PARTNERS, L.P.,
a California limited
partnership
By: Oak Hill
Investments, Inc.,
a California
corporation,
its general partner
By: Timothy Foo
Its: President
PRIME PROPERTY FUND-II,
L.P.,
a California limited
partnership
By: GGC Acquisition,
Inc.,
a California
corporation,
its general partner
By: Daniel James
Its: Secretary
C M GOLDEN GATE, INC.,
a California corporation
By: Henry Gaw
Its: President
<PAGE>
EXHIBIT G
FORM OF RELEASE OF REMAINING GENERAL PARTNERS
AND THE PARTNERSHIP
ACKNOWLEDGEMENT AND RELEASE
The undersigned, PACIFIC GATEWAY PROPERTIES,
INC., a New York corporation ("Seller"), hereby
covenants and agrees as follows:
1. Seller is the "Seller" under that
certain Agreement dated as of August 30, 1994, as
amended by that certain First Amendment to Agreement
dated as of September 27, 1994 (as amended, the
"Purchase Agreement") between Seller and Golden
Gateway Center, a California limited partnership (the
"Partnership"), pursuant to which Seller has agreed to
sell to the Partnership all of Seller's partnership
interest (the "Partnership Interest") in the
Partnership, which Partnership Interest consists of a
29.489% interest in the Partnership. Unless otherwise
defined herein, capitalized terms used herein shall
have the same meanings as set forth in the Purchase
Agreement.
2. Seller acknowledges that Oakhill
Gateway Partners, L.P., a California limited
partnership, Prime Property Fund II, L.P., a
California limited partnership, and C M Golden Gate,
Inc., a California corporation (collectively, the
"ExCom Partners"), are each general partners in the
Partnership, and, upon the withdrawal of Seller from
the Partnership, the ExCom Partners will be the only
general partners in the Partnership.
3. Seller acknowledges that the ExCom
Partners have afforded Seller and its agents,
consultants and contractors with an opportunity to
examine (and, if desired, audit) the books and records
of the Partnership and to examine all other matters
relating to the Partnership and the Property that are
or that could be relevant to determining the value of
the Partnership Interest. Seller further acknowledges
and agrees that the Closing shall evidence that Seller
and its agents, consultants and contractors have had
an opportunity to conduct such examinations and
inspections of the Partnership and the Property as
they have deemed or may deem necessary or desirable to
establish the Purchase Price for the Partnership
Interest. Seller further acknowledges that, except as
set forth in that certain Certificate dated as of even
date herewith and executed by the ExCom Partners (the
"ExCom Certificate"), Seller is not relying on any
statements or information provided to Seller by the
ExCom Partners, that Seller has established and agreed
to the amount of the Purchase Price based solely on
Seller's assessment of the fair market value of the
Partnership Interest, and that none of the ExCom
Partners has or owes Seller any fiduciary duties with
respect to the sale of the Partnership Interest to the
Partnership (including with respect to the value of
the Partnership Interest). Except for (i) any
misrepresentations set forth in the ExCom Certificate
(which representations Seller acknowledges have been
made on a several basis by the ExCom Partners);
(ii) any Released Obligations; and (iii) any
obligations expressly assumed by the ExCom Partners'
predecessors-in-interest in that certain Agreement
dated as of December 30, 1991 between Seller, the
ExCom Partners' predecessors-in-interest and certain
other parties regarding the sale of a 46.99% interest
in the Partnership (the "1991 Agreement") and in that
certain Put and Call Agreement dated as of
December 31, 1991 between Seller and the ExCom
Partners' predecessors-in-interest regarding the
granting of certain put and call options affecting a
3.00% interest in the Partnership, Seller hereby
releases and forever discharges the Partnership and
each of the ExCom Partners and each of their
respective affiliates, successors and assigns and each
of them, and each employee, agent, contractor,
subcontractor, representative, officer, director,
stockholder, and constituent partner of any of the
foregoing (collectively, the "Released Parties"), from
any and all claims, damages, malfeasance, actions,
causes of action, suits, judgments, demands,
liabilities, obligations, costs, expenses, or losses
of any type (including attorneys' fees, costs and
expenses), whether known or unknown, fixed or
contingent, arising out of, resulting from, or in
connection with the Property or the Partnership or the
redemption of the Partnership Interest by the
Partnership, including, without limitation, any claims
by Seller that the ExCom Partners have breached any
fiduciary duty owed to Seller. Seller's release
contained in this Paragraph 3 does not prohibit or in
any way limit Seller's right, and such right is hereby
reserved, (i) to pursue any claim or action,
including, but not limited to, any claim or action for
contribution or indemnity, against the ExCom Partners,
or any of them, for any damages, judgments,
liabilities, obligations, costs, expenses or losses of
any kind (including attorneys' fees, costs and
expenses) incurred by Seller as a result of any action
or claim relating to the Partnership or the Property
made against Seller by a third party, or (ii) to seek
joinder of the ExCom Partners as a defendant or
defendants in any claims, actions, suits or demands
relating to the Partnership or the Property made
against Seller by any third party.
4. Seller acknowledges that since the
closing of the transactions described in the 1991
Agreement the ExCom Partners, as the members of the
"Executive Committee" of the Partnership, have been
vested with the power and authority to carry out the
day-to-day business of the Partnership and to make and
carry out major decisions of the Partnership.
Accordingly, Seller's release in Paragraph 3 above
shall not prohibit or in any way limit Seller's right
to make a direct claim against the ExCom Partners, or
any of them, for costs, expenses, liabilities,
obligations or losses of any type incurred by Seller
to third parties, arising out of or accruing from any
acts of the ExCom Partners or any of them prior to the
date hereof, which claim Seller would otherwise have
had the right to assert against any of the ExCom
Partners had Seller not withdrawn from the Partnership
(as such might be limited under the terms of the
Agreement of Limited Partnership of the Partnership,
as amended to the date hereof).
5. Concurrent with the execution of this
Acknowledgment and Release, Seller agrees to execute
in favor of the ExCom Partners documents or
instruments terminating all financing statements and
any other filings made to evidence or perfect security
interests granted by the ExCom Partners to Seller.
6. The undersigned hereby acknowledges
that it is familiar with Section 1542 of the
California Civil Code, which provides as follows:
A general release does
not extend to claims
which the creditor does
not know or suspect to
exist in his favor at
the time of executing
the release, which if
known by him must have
materially affected his
settlement with the
debtor.
Nevertheless, Seller acknowledges that this release
has been agreed upon in light of this situation and
expressly waives any and all rights which it may have
under Section 1542 of the California Civil Code, or
any other state or federal statute or common law
principle of similar effect with respect to the
matters released in Paragraph 3 above.
SELLER: RDS
7. Seller acknowledges that Seller's
execution and delivery of this Acknowledgement and
Release is a condition to the Partnership's obligation
to purchase the Partnership Interest, that the
Partnership is materially relying on this
Acknowledgement and Release in purchasing the
Partnership Interest and that the ExCom Partners are
materially relying on this Acknowledgement and Release
in executing and delivering certain certificates and
releases in favor of Seller.
IN WITNESS WHEREOF, the undersigned has
executed this Acknowledgement and Release as of the
30th day of September, 1994.
PACIFIC GATEWAY
PROPERTIES, INC.,
a New York corporation
By: Roger D. Snell
Its: President & CEO
<PAGE>
FIRST AMENDMENT TO AGREEMENT
This First Amendment to Agreement ("First
Amendment") is made as of the 27th day of September,
1994, by and between PACIFIC GATEWAY PROPERTIES, INC.,
a New York corporation ("Seller"), and GOLDEN GATEWAY
CENTER, a California limited partnership (the
"Partnership").
WHEREAS, Seller and the Partnership entered
into that certain Agreement (the "Agreement") dated as
of August 30, 1994, pursuant to which the Partnership
agreed to redeem all of Seller's partnership interest
in the Partnership.
WHEREAS, Seller and the Partnership desire to
execute this First Amendment to extend the Closing
Date and to set forth the parties' agreement with
respect to certain other matters set forth herein.
NOW, THEREFORE, in consideration of the
mutual covenants and conditions herein set forth and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller
and the Partnership hereby agree as follows:
1. Defined Terms. All capitalized terms
contained herein shall, unless otherwise indicated,
have the same meanings as set forth in the Agreement.
2. Closing Date. Section 4.1 of the
Agreement is hereby deleted in its entirety, and the
following provision Section 4.1 is hereby inserted in
lieu thereof.
Section 4.1. Closing
Conference. The
purchase and sale of the
PGP Partnership Interest
provided herein shall be
consummated through a
closing conference which
shall be held on or
before October 18, 1994
(the "Closing Date,") at
the offices of
Morrison & Foerster,
345 California Street,
San Francisco,
California. Closing of
the purchase and sale of
the PGP Partnership
Interest shall be deemed
to have occurred when
the conditions set forth
in Article II have been
satisfied or waived, the
documents described in
Article V and all other
documents reasonably
required by the parties
have been duly executed
and delivered and the
full amount of the
Purchase Price has been
delivered to Seller in
cash or other
immediately available
funds (collectively, the
"Closing"). In the
event that the Closing
has not occurred on or
before October 18, 1994,
this Agreement shall
automatically terminate,
neither party shall have
any further obligation
hereunder (except as
otherwise expressly set
forth herein), the
Deposit shall be
returned to the
Partnership (unless the
Closing does not occur
as the sole result of a
Default of the
Partnership hereunder),
and Seller may dispose
of the PGP Partnership
Interest in any manner
it deems acceptable
(subject to any
applicable restrictions
set forth in the
Partnership Agreement).
3. Deposit of Closing Documents and
Partnership Note. Notwithstanding the extension of
the Closing Date as provided in Paragraph 2 of this
First Amendment, the parties hereto shall deposit (or
cause to be deposited) with Escrow Agent on or before
September 30, 1994 executed originals of the documents
described in Article V of the Agreement and the
Partnership shall deposit with Escrow Agent on or
before September 30, 1994 an executed original of a
promissory note (the "Partnership Note") in the form
of Exhibit A attached hereto. The Partnership Note
shall become due and payable on the Closing Date, if,
but only if, all conditions to Closing set forth in
the Agreement have been satisfied. Interest shall
accrue on the Partnership Note at a rate of 7.50% per
annum from September 30, 1994 until paid, which
interest shall become due and payable on the Closing
Date.
4. Proration of Income or Loss;
Distributions. Notwithstanding anything to the
contrary set forth in Sections 3.1, 3.2, 3.3 or any
other provision of the Agreement, and subject to the
Closing occurring on or before the Closing Date,
(i) all income, loss, depreciation and credits
accruing or attributable to the PGP Partnership
Interest for tax and accounting purposes for the
calendar year 1994 shall be allocated between Seller
and the Partnership as of the 12:01 a.m. on
September 30, 1994, based upon the relative number of
days in the 1994 calendar year before and after such
date, (ii) the Partnership shall be deemed to have
redeemed the PGP Partnership Interest as of
September 30, 1994, and (iii) Seller shall be paid at
Closing an amount equal to One Hundred Three Thousand
Two Hundred Eleven and 50/100 Dollars ($103,211.50).
5. Agreement In Effect. Except as
expressly provided above, all terms and conditions of
the Agreement remain in full force and effect. In the
event of any direct conflict between the Agreement and
this First Amendment, the terms and conditions of this
First Amendment shall be controlling.
6. Counterparts. This First Amendment may
be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed an
original, but such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have
executed this Agreement as of the date and year first
above written.
PACIFIC GATEWAY
PROPERTIES, INC.,
a New York corporation
By: Roger D. Snell
Its: President & CEO
GOLDEN GATEWAY CENTER,
a California limited
partnership
By: Oakhill Gateway
Partners, L.P.,
a California limited
partnership,
its Managing General
Partner
By: Oak Hill
Investments,
Inc.,
a California
corporation
its General
Partner
By: Timothy Foo
Its: President
<PAGE>
EXHIBIT A
FORM OF PARTNERSHIP NOTE
PROMISSORY NOTE
(Balance of Purchase Price)
$20,500,000.00 San Francisco, California
September 30, 1994
FOR VALUE RECEIVED AND ACKNOWLEDGED, the
undersigned, GOLDEN GATEWAY CENTER, a California
limited partnership ("Maker"), hereby promises to pay
to PACIFIC GATEWAY PROPERTIES, INC., a New York
corporation ("Holder"), or order, the principal sum of
Twenty Million Five Hundred Thousand Dollars
($20,500,000.00), with interest accruing on the unpaid
principal balance at 7.50% per annum from the date
hereof until paid. All principal and accrued interest
under this Note shall be due and payable in full on
the Closing Date (as defined in that certain
Agreement dated as of August 30, 1994, between Maker
and Holder regarding Maker's redemption of all of
Holder's partnership interest in Maker (as such may
have been or may be hereafter amended, the
"Agreement")).
If any part of the principal or interest of
this Note is not paid when due, it shall thereafter
bear interest at the lesser of the rate of 18 percent
per annum or the highest rate legally permissible from
and after the date of delinquency until paid.
1. Principal and interest shall be payable
at such place as Holder may designate in writing.
2. Principal and interest shall be payable
in lawful money of the United States of America which
shall be legal tender in payment of all debts and
dues, public and private, at the time of payment, and
shall be paid in immediately available cash funds.
Maker waives presentment, demand for payment, notice
of non-payment, protest, notice of protest, and any
and all other notices or demands in connection with
the delivery, acceptance, performance, default, or
enforcement of this Note.
3. If action be instituted in connection
with this Note (including, without limitation, any
proceedings for collection hereof in any bankruptcy or
similar matter or case), Maker promises to pay Holder
all fees and costs in connection with such action,
including, without limitation, reasonable attorneys'
fees incurred in good faith.
4. This Note shall inure to the benefit of
Holder's successors and assigns. This Note shall in
all respect be governed by and construed under the
laws of the State of California applicable to
agreements made and entirely performed therein by
California residents.
5. This Note arises out of and is subject
to the terms and conditions of the Agreement.
MAKER:
GOLDEN GATEWAY CENTER,
a California limited
partnership
By: Oakhill Gateway
Partners, L.P.,
a California
limited
partnership its
Managing
General Partner
By: Oak Hill
Investments,
Inc., a
California
corporation its
General Partner
By: Timothy Foo
Its: President
