SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) May 29, 1998
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Paine Webber Qualified Plan Property Fund Four, LP
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(Exact name of registrant as specified in its charter)
Delaware 0-15036 04-2841746
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(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
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(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
ITEM 2 - Disposition of Assets
Martin Sunnyvale Research and Development Center, Sunnyvale, California
Disposition Date - May 29, 1998
On May 29, 1998, Paine Webber Qualified Plan Property Fund Four, LP (the
"Partnership") sold its wholly-owned investment property, the Martin Sunnyvale
Research and Development Center, located in Sunnyvale, California, to an
unrelated third party for $5,125,000. After closing costs, expense prorations
and adjustments, the Partnership realized net proceeds of approximately
$4,938,000. As a result of the sale of the Martin Sunnyvale Research and
Development Center, a Special Distribution will be made on June 15, 1998 to unit
holders of record as of May 29, 1998. The Special Distribution will include the
net proceeds from the sale of the Martin Sunnyvale Research and Development
Center in the amount of $109 per original $1,000 investment, or $5.45 per
original $50 unit.
As previously reported, during fiscal 1997 the Partnership had contracted
with a national real estate firm with a strong background in selling R&D
buildings in the Silicon Valley area to market the Martin Sunnyvale property for
sale. As a result of these marketing efforts, the Partnership received several
offers from qualified third-party buyers to acquire the property. After
reviewing the offers, the Partnership accepted an offer from one of these
potential buyers and negotiated and executed a purchase and sale agreement
during the first quarter of fiscal 1998. The sale remained subject to the
satisfactory completion of the buyer's due diligence which was scheduled to be
completed in December 1997. At the conclusion of the buyer's due diligence
period, the offer to purchase the property was withdrawn. In early 1998, the
Partnership and its marketing agent decided to refocus attention on a select
group of potential investors that had expressed previous interest in acquiring
the property. These potential buyers were contacted which resulted in the
receipt of two written offers. Subsequently, one of these offers was selected
and negotiations on a purchase and sale agreement were successfully completed. A
purchase and sale agreement was executed by the Partnership and the eventual
buyer on March 11, 1998. The Partnership granted the eventual buyer several
extensions of the due diligence period in return for certain non-refundable
deposits prior to the final closing of the transaction on May 29, 1998.
Subsequent to the sale of the Martin Sunnyvale property, the Partnership's
only remaining real estate asset is the wholly-owned Bell Forge Square Shopping
Center. As discussed further in the Partnership's most recent quarterly report
on Form 10-Q, this property is in the process of being actively marketed with a
goal of completing a sale and a liquidation of the Partnership prior to the end
of calendar 1998. There are no assurances, however, that the sale of the
remaining asset and the liquidation of the Partnership will be completed within
this time frame.
ITEM 7 - Financial Statements and Exhibits
Financial Statements: None
(b) Exhibits:
(1) Joint Escrow Instructions and Purchase and Sale Agreement dated as
of March 11, 1998.
(2) First Amendment to Joint Escrow Instructions and Purchase and Sale
Agreement dated April 9, 1998.
(3) Second Amendment to Joint Escrow Instruction and Purchase and Sale
Agreement dated April 15, 1998.
(4) Third Amendment to Joint Escrow Instructions and Purchase and Sale
Agreement dated April 16, 1998.
(5) Fourth Amendment to Joint Escrow Instructions and Purchase and Sale
Agreement dated May 5, 1998.
(6) Letter Agreement dated April 16, 1998.
(7) Assignment of Claims.
(8) Assignment of Tenant Leases and Assumption Agreement.
(9) Assignment of Contracts and Assumption Agreement.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAINE WEBBER QUALIFIED PLAN
PROPERTY FUND FOUR, LP
(Registrant)
By: /s/ Walter V. Arnold
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Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: June 9, 1998
<PAGE>
JOINT ESCROW INSTRUCTIONS
AND
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
PAINEWEBBER QUALIFIED PLAN PROPERTY FUND FOUR, L.P. ("SELLER")
AND
LIMAR REALTY CORP #36 ("BUYER")
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS 1
ARTICLE 2 PURCHASE AND SALE 1
ARTICLE 3 ESCROW INSTRUCTIONS;PURCHASE PRICE; DEPOSIT;
ADJUSTMENTS 2
ARTICLE 4 PRECLOSING OPERATION 5
ARTICLE 5 ACCESS, INSPECTION, DILIGENCE 6
ARTICLE 6 TITLE, SURVEY, CONDITIONS, REPRESENTATIONS AND
ASSIGNMENT OF CLAIMS 10
ARTICLE 7 CLOSE OF ESCROW 13
ARTICLE 8 CASUALTY AND CONDEMNATION 15
ARTICLE 9 BROKERAGE COMMISSIONS 16
ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES 16
ARTICLE 11 MISCELLANEOUS 17
ARTICLE 12 IRS FORM 1099-S DESIGNATION 21
SCHEDULE A Description of the Real Property
SCHEDULE B Description of Personal Property and Intangible Property
SCHEDULE C Rent Roll
SCHEDULE D Form of Tenant Estoppel Certificate
SCHEDULE E Form of Substitution Letter
SCHEDULE F 1099 Designation Agreement
SCHEDULE G Pending, Threatened or Anticipated Litigation
SCHEDULE H Violations of Codes, Regulations and Laws
<PAGE>
Purchase and Sale Agreement
This Joint Escrow Instructions and Purchase and Sale Agreement (this
"Agreement") is entered into as of the 11th day of March, 1998 by and between
Seller and Buyer, upon the following terms and conditions:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
BUYER: LIMAR REALTY CORP #36, a California corporation
SELLER: PAINEWEBBER QUALIFIED PLAN PROPERTY FUND FOUR, L.P.,
a Delaware limited partnership
PROPERTY: The Real Property constituting 680 West Maude Avenue,
Sunnyvale, California
REAL PROPERTY: The land and the buildings, structures, improvements,
fixtures, operating permits, rights of way,
easements, entitlements, privileges and appurtenances
thereto, equipment, appliances and machines (except
the tenant's property) (collectively, the
"Improvements") now located thereon and the rights
appurtenant thereto, all as more particularly
described in Schedule A attached hereto
PERSONAL PROPERTY:The personal and intangible property, if any,
described in Schedule B attached hereto
PURCHASE PRICE: $5,200,000
ESCROW HOLDER AND
TITLE COMPANY: Chicago Title Company
ARTICLE 2
PURCHASE AND SALE
2.1 In consideration of the undertakings and mutual covenants of the
parties set forth in this Agreement, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the Seller hereby agrees to sell and convey the Property to the
Buyer or its nominee and the Buyer hereby agrees to buy and pay the Purchase
Price for the Property on the terms and conditions contained herein.
ARTICLE ESCROW INSTRUCTIONS;
PURCHASE PRICE; DEPOSIT; ADJUSTMENTS
3.1 The Purchase Price shall be as specified in Article 1 above and shall
be paid on the Escrow Closing Date (as hereinafter defined) by wire transfer of
immediately available federal funds, subject to adjustment to reflect
application of the Escrowed Amount and such other adjustments herein contained.
3.2 Within two (2) business days after the execution of this Agreement
upon the "Opening of Escrow" (as hereinafter defined), the Buyer shall deposit
with the Escrow Holder the sum of One Hundred Thousand Dollars ($100,000) to be
held in an interest bearing account (together with any earned interest the
"Escrowed Amount") to secure the Buyer's obligations under this Agreement.
3.3 Within two (2) business days following the execution of this
Agreement, the parties shall open escrow with Escrow Holder (the "Opening of
Escrow"). This Agreement, when deposited with Escrow Holder, shall constitute
Escrow Holder's escrow instructions. The parties shall execute such further
instructions as Escrow Holder may require in order to clarify its duties and
responsibilities. The escrow instructions shall not modify or amend the
provisions of the Purchase and Sale Agreement unless otherwise expressly set
forth therein. Buyer and Seller shall each pay one-half of the escrow fees,
unless one party defaults, in which case, the defaulting party shall pay all of
the escrow fees.
3.4 All real estate taxes, assessments, special taxes, special assessments
and any other tax or assessment attributable to the Property through the Escrow
Closing Date shall be prorated and adjusted as of the Escrow Closing Date unless
such items are paid directly by tenants to the applicable taxing authority, in
which case no adjustment or proration shall be made for the items paid directly
by the tenants. If the tax statements for the fiscal year during which the
Escrow Closing Date occurs are not finally determined, then the tax figures for
the immediately prior fiscal year shall be used for the purposes of prorating
taxes on the Escrow Closing Date, with a further adjustment to be made after the
Escrow Closing Date as soon as the tax figures are finalized. Any tax refunds or
proceeds (including interest thereon) on account of a favorable determination
resulting from a challenge, protest, appeal or similar proceeding relating to
taxes and assessments relating to the Property (i) for all tax periods occurring
prior to the applicable tax period in which the Close of Escrow occurs shall be
retained by and paid exclusively to Seller and (ii) for the applicable tax
period in which the Close of Escrow occurs shall be prorated as of the Escrow
Closing Date after reimbursement to Seller and Buyer, as applicable, for all
fees, costs and expenses (including reasonable attorneys' and consultants' fees)
incurred by Seller or Buyer, as applicable, in connection with such proceedings
such that Seller shall retain and be paid that portion of such tax refunds or
proceeds as is applicable to the portion of the applicable tax period prior to
the Escrow Closing Date and Buyer shall retain and be paid that portion of such
tax refunds or proceeds as is applicable to the portion of the applicable tax
period from and after the Escrow Closing Date. Neither Seller nor Buyer shall
settle any tax protests or proceedings in which taxes for the tax period for
which the other party is responsible are being adjudicated without the consent
of such party, which consent shall not be unreasonably withheld, conditioned or
delayed. Buyer and Seller shall cooperate in pursuit of any such proceedings and
in responding to reasonable requests of the other for information concerning the
status of and otherwise relating to such proceedings; provided, however, that
neither party shall be obligated to incur any out-of-pocket fees, costs or
expenses in responding to the requests of the other. In no event shall any such
proceeding be commenced by Seller following the Escrow Closing Date without
Buyer's prior written consent; provided, however, that Seller shall be entitled
to continue its existing proceeding.
3.5 Prepaid or past due amounts under any Contracts (as hereinafter
defined) which are assigned to Buyer at Close of Escrow shall be prorated and
adjusted as of the Escrow Closing Date.
3.6 The Seller shall cause all meters for electricity, gas, water, sewer
or other utility usage at the Property to be read on the Escrow Closing Date,
and the Seller shall pay all charges for such utilities which have accrued on or
prior to the Escrow Closing Date; provided, however, that if and to the extent
such charges are paid directly by tenants, no such reading or payment shall be
required. If the utility companies are unable or refuse to read meters for which
payment by the Seller is required, all charges for such utilities to the extent
unpaid shall be prorated and adjusted as of the Escrow Closing Date based on the
most recent bills therefor. The Seller shall provide notice to the Buyer within
five (5) days of the Escrow Closing Date setting forth (i) whether utility
meters will be read as of the Escrow Closing Date and (ii) a copy of the most
recent bill for any utility charges which are to be prorated and adjusted as of
the Escrow Closing Date. If the meters cannot be read as of the Escrow Closing
Date and, therefore, the most recent bill is used to prorate and adjust as of
the Escrow Closing Date, then to the extent that the amount of such prior bill
proves to be more or less than the actual charges for the period in question, a
further adjustment shall be made after the Escrow Closing Date as soon as the
actual charges for such utilities are available.
3.7 Collected rents for the then current period; security deposits which
have not been previously applied by Seller, to the extent in Seller's
possession; prepaid rentals; collected or prepaid common area maintenance
charges; collected or prepaid promotional charges; collected or prepaid service
charges; collected or prepaid tax charges, and all other collected or prepaid
incidental expenses and charges paid by tenants shall be apportioned and full
value shall be adjusted as of the Escrow Closing Date, and the net amount
thereof, if in favor of Seller, shall be credited to Seller at Closing of
Escrow, or if in favor of Buyer, shall be credited to Buyer at Close of Escrow.
From and after Close of Escrow all security deposits credited to Buyer shall
thereafter be transferred to Buyer and Buyer shall assume and be solely
responsible for the payments of security deposits (to the extent which Buyer was
credited therefor at Close of Escrow) to tenants in accordance with the Leases
and applicable law. Seller shall be entitled to retain and/or receive a credit
for any utility deposits and any deposits for third parties under any of the
Contracts (as hereinafter defined).
3.7.1 All rentals and other tenant charges payable in arrears and
uncollected and all other uncollected rents (including, but not limited
to, percentage rents, common area maintenance charges and real estate tax
charge annual adjustments thereto) for the current and prior rental
periods, less the reasonable expenses of collection thereof, shall be
apportioned (if and when collected by either party); provided, however,
that Buyer shall proceed in a commercially reasonable manner consistent
with Buyer's customary practice for tenants owing past due rent to it to
collect such uncollected rents from existing tenants listed on the rent
roll; provided that Buyer shall not be obligated to commence suit against
any Tenant and Buyer shall first apply rents subsequently received to rent
due and owing for rental periods accruing after the Escrow Closing Date.
Buyer shall not settle or release (i) Tenants from any obligations for
such uncollected rents or (ii) rights under any claims listed in Section
3.7.2 below, in each case, without Seller's prior written approval. Buyer
shall provide Seller with written evidence of its collection efforts, such
evidence shall include, but not be limited to providing copies of letters
and invoices to tenants, copies of reports regarding follow-up efforts and
cash receipts and aged delinquency reports. Buyer shall provide such
written evidence of its collection efforts within fifteen (15) days of
demand therefor provided that Seller may request such evidence no more
than on a quarterly basis. Seller shall agree not to commence suit against
tenants listed on the rent roll for obligations owed to it unless Buyer
fails to fulfill its obligations under this Section 3.7.1.
3.7.2 Subject to Section 6.6 below, Seller shall retain all rights
to all refunds, receivables, past due rent and claims, including, but not
limited to, termination fees or damages from all former tenants or
occupants of the Property which are not listed on the Rent Roll, causes of
action and rights of reimbursement from third parties, bonds, accounts
receivable and any other claims for payments Seller may have to the extent
arising or relating to the period prior to the Close of Escrow.
3.7.3 In the event, on the Escrow Closing Date, the precise figures
necessary for any of the foregoing adjustments are not capable of
determination, then, at Buyer's option, those adjustments shall be made
either (i) on the basis of good faith estimates of Seller and Buyer using
currently available information, and final adjustments shall be made
promptly after precise figures are determined or available or (ii) when
all information for all final adjustments are determined or available.
3.8 At the Close of Escrow, the Seller shall pay the amount due for (a)
any state or county transfer tax (or any tax substituted therefor, i.e. the
documentary transfer tax) imposed in connection with the consummation of the
transaction contemplated hereby (the "Transfer Tax"); (b) recording charges to
record any documents to clear title; (c) all title insurance charges to provide
Buyer with a Title Commitment as hereinafter defined; (d) Seller's attorneys'
fees; and (e) all leasing commissions due or to become due pursuant to any lease
of any part of the Property or any renewal or extension right thereof in
existence on the date hereof whether or not exercised.
3.9 At the Close of Escrow, the Buyer shall pay for (a) any local tax or
mortgage tax other than the Transfer Tax; (b) recording charges to record the
grant deed; (c) survey charges; (d) any and all title insurance premiums and
charges including but not limited to charges for any extended coverage or title
endorsements; and (e) Buyer's attorney's fees and all costs related to the
Buyer's due diligence.
3.10 The provisions of this Article 3 shall survive the Close of Escrow.
ARTICLE 3
PRECLOSING OPERATION
A Rent Roll certified by Seller (the "Rent Roll") containing a list
of all current occupants of the Property is attached hereto as Schedule C. The
leases listed on the Rent Roll, together with leases entered into pursuant to
this Article 4 are collectively referred to herein as the "Leases."
Seller shall not, after the date hereof; (i) enter into any new
Leases or materially amend or terminate any existing Leases, (ii) enter into or
modify any service contracts, operating agreements, or easement agreements,
(iii) alter the zoning classification of the Property (iv) materially alter any
Improvements, or (v) terminate any operating permits without the written consent
of Buyer in any such instance, which consent shall not be unreasonably withheld
or delayed. If Buyer does not notify Seller in writing of its consent within
five (5) days after written notice thereof from Seller, Buyer shall be deemed to
have denied its consent to such requested action. Buyer shall specify its
reasons for denying consent upon request of Seller.
At all times prior to Close of Escrow, Seller shall continue (a) to
conduct business with respect to the Property in the same manner in which said
business has been heretofore conducted and (b) to insure the Property
substantially as currently insured.
Seller shall within five (5) days after the execution of this
Agreement provide copies to Buyer of all service, supply, equipment rental,
management and leasing contracts (collectively, the "Contracts") affecting the
Property which Seller has in its possession and shall promptly instruct the
third party property manager to make all such Contracts available to Buyer for
its review. Buyer shall, by written notice to Seller, on or before the
expiration of the Inspection Period identify any Contracts which it elects to
have assigned to it and therefore will assume. Buyer shall be deemed to have
elected not to assume any Contracts which are not identified as to be assigned
and assumed. Seller shall terminate any Contracts at Close of Escrow which are
not identified by Buyer as specified in this Section as to be assigned and
assumed at Close of Escrow.
Seller shall use diligent efforts to obtain tenant estoppel
certificates for each Tenant of the building on the Property on or before five
(5) days prior to the expiration of the Inspection Period. The tenant estoppel
certificates shall be in the form attached hereto as Schedule D. Seller's
failure to provide tenant estoppel certificates shall not constitute a default
under this Agreement. If Seller fails to provide the tenant estoppel
certificates within the time period set forth, Buyer's sole remedy will be to
elect not to proceed with the transaction by giving written notice before the
expiration of the Inspection Period. Upon such notice the Escrowed Amount shall
be returned to Buyer and this Agreement shall be terminated without further
recourse (except to the extent such recourse arises in connection with a
provision of this Agreement which is intended to survive termination). If no
written notice is received by Seller by the expiration of the Inspection Period,
the Escrowed Amount shall be non-refundable for any reason and shall be
liquidated damages as set forth in Section 10.2.
ARTICLE 4
ACCESS, INSPECTION, DILIGENCE
Buyer may, during the "Inspection Period" as hereafter defined,
inspect the Property, at Buyer's sole cost and expense, including without
limitation, the physical and environmental condition of the Property, the
operations and financial condition of the Property, environmental remediation
insurance (if any), and the transferability of any relevant environmental
permits, indemnifications, or covenants. Buyer may not conduct destructive or
invasive testing, drilling or boring. Buyer's inspection rights shall include
access, upon Seller's written consent, which shall not be unreasonably withheld,
and in each case Buyer must be accompanied by a representative of Seller, to all
of Seller's personnel, agents, engineers, brokers, property managers, tenants,
vendors, consultants and contractors familiar with the Property. Such
representatives will be made reasonably available with at least 24 hours advance
written notice by the Buyer.
Seller shall make available to Buyer for Buyer's review and
inspection, and in each case to the extent the materials are in the Seller's
possession or control, copies of all leases, contracts, agreements, data,
information, reports (including environmental, structural, engineering and soils
reports), title surveys, plans and specifications, certificates of occupancy,
operating statements for the month of the date hereof and the last three
year-ends, itemized capital expenditures over the past thirty-six months,
licenses, permits, applications, authorizations, approvals, parking covenants
and easements, insurance policies and claims history, guaranties, warranties,
governmental agency orders, certificates of insurance, past, pending and
potential insurance and other third party claims (both by and against Seller)
and litigation document relating to the Property and its operation. In addition,
Seller shall provide all relevant information regarding its liability for the
environmental contaminants, including, but not withstanding, all correspondence
between the Regional Water Quality Control Board and the Seller, as well as all
correspondence by Eaton Corporation and Signetics Corporation regarding the
environmental liabilities, indemnifications, or covenants by the two
aforementioned corporations. Buyer may make copies of the above at Buyer's sole
cost and expense. Seller shall cause the property manager to provide Buyer with
a complete and accurate rent roll for the Property which shall include the
following information, as of the last full month preceding this Agreement: the
names of all tenants and their corresponding suite number, the term of all
leases, rental amounts including prepaid rents, delinquent rents, extension
options, security and other deposits, rent concessions, and tenant improvement
allowances, if any.
Seller makes no representation or warranty whatsoever regarding the
existence or availability of the foregoing and Seller shall not be obligated to
create or obtain any of the foregoing which are not in existence and available
to Seller. Buyer acknowledges and agrees that, except as otherwise provided in
this Agreement, any and all information, documents, surveys, studies and reports
provided to Buyer are provided for informational purposes only and do not
constitute representations or warranties of Seller of any kind.
The Buyer shall have the right to promptly commence and actively pursue its
due diligence on the Property as provided for in Sections 5.1 and 5.2 above.
Buyer shall complete its due diligence no later than thirty (30) days from the
date of this Agreement (the "Inspection Period"). In the event that Buyer's due
diligence shall reveal any matters which are not acceptable to Buyer in Buyer's
sole and absolute discretion for any reason or for no reason, Buyer may elect,
by written notice to Seller, received by Seller on or before expiration of the
Inspection Period, not to proceed with this purchase, in which event this
Agreement shall terminate, the Escrowed Amount shall be returned to the Buyer
and this Agreement shall be null and void without recourse to either party
hereto (except to the extent such recourse arises in connection with a provision
of this Agreement which is intended to survive termination). In the event Buyer
does not terminate this Agreement on or before the expiration of the Inspection
Period, the Escrowed Amount shall become nonrefundable for any reason and shall
be liquidated damages as set forth in Section 10.2.
Buyer acknowledges that it will have had an opportunity to conduct
diligence on the Property and will acquire the Property in its current condition
based on its diligence. Buyer further acknowledges that neither Seller nor its
employees, agents or representatives have made any representation or warranty as
to the condition of the Property or the presence or absence of any hazardous
materials on, in, under or within the Property or a portion thereof which
survive Close of Escrow hereunder except as expressly provided in this
Agreement. Seller has disclosed, and Buyer acknowledges disclosure of, Seller's
knowledge regarding the release of hazardous substances on the Property that is
subject to California Regional Water Quality Control Board Site Clean Up
Requirements Order No. 95-210 dated October 18, 1995 (the "Order"). THE BUYER
ACKNOWLEDGES AND AGREES THAT THE PROPERTY IS TO BE CONVEYED BY THE SELLER TO THE
BUYER "AS IS," "WITH ALL FAULTS," AND SUBSTANTIALLY IN ITS CURRENT CONDITION.
THE BUYER FURTHER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY CONTAINED IN
THIS AGREEMENT, NEITHER THE SELLER NOR ANY AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER (OR PURPORTED AGENT, EMPLOYEE OR OTHER
REPRESENTATIVE OF THE SELLER) HAS MADE ANY GUARANTEE, REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED (AND THE SELLER SHALL NOT HAVE ANY LIABILITY
WHATSOEVER) AS TO THE VALUE, USES, HABITABILITY, CONDITION, DESIGN, OPERATION,
FINANCIAL CONDITION OR PROSPECTS, OR FITNESS FOR PURPOSE OR USE OF THE PROPERTY
(OR ANY PART THEREOF) OR THE PROPERTY INFORMATION NOT PREPARED BY SELLER, OR ANY
OTHER GUARANTEE, REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PORTION OF THE PROPERTY (OR ANY PART THEREOF) OR THE PROPERTY
INFORMATION NOT PREPARED BY SELLER EXCEPT AS EXPRESSLY SET FORTH HEREIN.
FURTHER, THE SELLER SHALL HAVE NO LIABILITY FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT AS TO THE PROPERTY OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF,
TO COMPLY WITH ANY APPLICABLE LAWS AND REGULATIONS. IN PARTICULAR, THE BUYER
ACKNOWLEDGES AND AGREES THAT THE "PROPERTY INFORMATION" PROVIDED UNDER THIS
AGREEMENT WHICH WAS NOT PREPARED BY SELLER (AND ANY OTHER INFORMATION THE BUYER
MAY HAVE OBTAINED REGARDING IN ANY WAY ANY OF THE PROPERTY, INCLUDING WITHOUT
LIMITATION, ITS OPERATIONS OR ITS FINANCIAL HISTORY OR PROSPECTS FROM THE SELLER
OR ITS AGENTS, EMPLOYEES OR OTHER REPRESENTATIVES BUT NOT INCLUDING INFORMATION
PREPARED BY SELLER) IS DELIVERED TO THE BUYER AS A COURTESY, WITHOUT
REPRESENTATION OR WARRANTY AS TO ITS ACCURACY OR COMPLETENESS (EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT), AND NOT AS AN INDUCEMENT TO ACQUIRE THE
PROPERTY; THAT NOTHING CONTAINED IN SUCH DELIVERIES SHALL CONSTITUTE OR BE
DEEMED TO BE A GUARANTEE, REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IN ANY
REGARD AS TO ANY OF THE PROPERTY (EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT); AND THAT THE BUYER IS RELYING ONLY UPON THE PROVISIONS OF THIS
AGREEMENT AND ITS OWN INDEPENDENT ASSESSMENT OF THE PROPERTY AND ITS PROSPECTS
IN DETERMINING WHETHER TO ACQUIRE THE PROPERTY EXCEPT THAT BUYER SHALL BE
ENTITLED TO RELY ON THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN
THIS AGREEMENT. The provisions of this paragraph shall survive Close of Escrow.
Buyer shall provide Seller with a copy of the Buyer's financial
statements over the past three years before the expiration of the Inspection
Period. Seller shall have the right to terminate the Purchase and Sale Agreement
before the expiration of the Inspection Period if the Seller is not satisfied.
The provision of such information shall not be deemed to be an acknowledgment on
the part of either such entity to undertake or be liable for any obligation
under this Agreement.
If this Agreement is terminated for any reason whatsoever, Buyer
shall promptly deliver to Seller all documents, plans, surveys, contracts,
Leases and the like delivered to Buyer or Buyer's agents, representatives or
designees by Seller or Seller's agents, representatives or employees pursuant to
this Agreement. In addition, Buyer shall promptly deliver to Seller copies of
all materials obtained from third parties in connection with Buyer's diligence
if Seller is willing to reimburse Buyer for bona fide third-party out-of-pocket
costs and expenses actually incurred in the preparation of such materials. The
return of the Escrowed Amount to Buyer under this Agreement shall be contingent
upon Buyer's fulfillment of the obligations under this Section 5.5. Buyer's
obligations under this Section 5.5 shall be deemed fulfilled if Buyer returns
all documents, plans, surveys, contracts, Leases, materials and the like as
provided in this Section 5.5 and provides a certificate certifying that all such
materials have been returned.
Each party hereto agrees to maintain in confidence, and not to
discuss with or to disclose to any person or entity who is not a party to this
Agreement, any material term of this Agreement or any aspect of the transactions
contemplated hereby, except as provided in this Section. Seller may publicly
disclose the existence of this Agreement provided that the identity of Buyer and
the Purchase Price is not disclosed. Buyer shall not disclose to anyone other
than its partners and financiers any information disclosed by Seller to Buyer
which is not generally known by the public regarding Seller's operations and/or
the Property. Each party hereto may discuss with and disclose to its
accountants, attorneys, existing or prospective lenders, investment bankers,
underwriters, rating agencies, partners, consultants and other advisors to the
extent such parties reasonably need to know such information and are bound by a
confidentiality obligation identical in all material respects to the one created
by this Section. Additionally, each party may discuss and disclose such matters
to the extent necessary to comply with any requirements of the SEC or in order
to comply with any law or interpretation thereof or court order. This provision
shall survive termination of this Agreement but shall terminate upon Close of
Escrow. Buyer and Seller do not contemplate issuing a press release until after
the expiration of the Inspection Period and Title Response Period. Any press
release to be made regarding any matter which is the subject of the
confidentiality obligation created in this Section shall be subject to the
reasonable approval of Buyer and the Seller, respectively both as to timing and
content.
If any inspection or test conducted by or on behalf of Buyer
disturbs any of the Property, Buyer will restore the Property to substantially
the same condition as existed prior to any such inspection or test. Buyer shall
keep the Property free and clear of any liens and will indemnify, defend, and
hold Seller harmless from all losses, costs and damages including reasonable
attorneys' fees incurred by Seller as a result of such entry or investigation by
or on behalf of Buyer other than loss, cost or damage which is discovered (and
not caused) by such investigation as a result of pre-existing conditions. This
indemnity obligation of Buyer shall survive the termination of this Agreement
for any reason. Buyer shall obtain, or arrange for its inspecting consultant to
obtain, and keep in force, a policy of comprehensive general liability insurance
(including coverage for bodily injury and property damage) on an occurrence
basis with a combined single limit of $1,000,000, naming Seller as an additional
insured. Buyer shall deliver evidence of such insurance to Seller prior to the
conduct of Buyer's investigations under Section 5.1.
Seller's obligation to sell the Property shall be contingent upon,
(i) the execution of a joint letter, substantially in the form of Schedule E
requesting (a) that the Regional Water Quality Control Board substitute Buyer
for Seller as a "secondarily liable party" or so-called "secondary discharger"
on the Order (the "Substitution") upon the Close of Escrow, (b) that the
Regional Water Quality Control Board staff prepare an amendment to the Order
providing for the Substitution and allow the Buyer and Seller to review and
approve the amendment before the Escrow Closing Date, and (c) that the
Substitution not be effective until Close of Escrow, (the "Substitution Letter")
and (ii) the submission of the executed Substitution Letter, along with any
other documents, applications or fees required, to the Regional Water Quality
Control Board on the first business day following the expiration of the
Inspection Period. Seller and Buyer agree to appear before the Regional Water
Quality Control Board in connection with the Substitution Letter if required to
do so. Buyer will execute any license or access agreements with Eaton
Corporation and Signetics Corporation, if required by the Regional Water Quality
Control Board in order to effectuate the Substitution. Buyer and Seller will
cooperate fully and use their best efforts to effectuate the Substitution. The
obligations under this Section shall survive the Close of Escrow.
ARTICLE 5
TITLE, SURVEY, CONDITIONS, REPRESENTATIONS AND ASSIGNMENT OF CLAIMS
Within five (5) days of the execution of this Agreement, Seller
shall provide Buyer with copies of the most recent survey of the Real Property
in Seller's possession, if any. Promptly following the execution of this
Agreement, Buyer shall obtain, at Seller's sole cost and expense, a commitment
for an ALTA Owner's Policy of Title Insurance (the "Title Commitment"). Promptly
following the execution of this Agreement, Buyer shall obtain, at Buyer's sole
cost and expense, an ALTA as-built survey of the Real Property (the "Survey").
If (i) any matter disclosed on the Survey or (ii) matters listed as
exceptions in the Title Commitment are not each satisfactory to Buyer, it shall,
on or before the expiration of the Inspection Period, provide Seller with
written notice of such objections (the "Objection Notice") and if Seller is
unable or unwilling to cure such objections within five (5) days after the date
the Objection Notice is received (the "Title Response Period"), Buyer's sole
remedy shall be to terminate this Agreement by giving written notice to Seller
on or before the expiration of the Title Response Period, in which event this
Agreement will terminate, the Escrowed Amount shall be returned to Buyer and
this Agreement shall be null and void without recourse to either party hereto
(except to the extent such recourse arises in connection with a provision of
this Agreement which is intended to survive termination). Buyer may not object
to any exceptions for tenant's rights. Seller shall not be obligated to cure any
objections except Seller shall be obligated to cure, obtain title coverage over
or bond over all objections constituting mortgages, other voluntary encumbrances
securing the repayment of money or other monetary liens, on or before the Escrow
Closing Date, provided, however, that nothing herein shall obligate Seller to
cure, obtain title coverage over or bond over monetary liens (other than
mortgages or voluntary encumbrances securing the repayment of money) in any
amount in excess of $10,000. To enable Seller to convey, Seller may, at the
Close of Escrow use the Purchase Price or any portion thereof to clear title;
provided, that all instruments to clear title are either recorded simultaneously
with the delivery of the deed or arrangements satisfactory to the Escrow Holder
have been made for the delivery of such instruments.
On the Escrow Closing Date, the Seller shall convey by good and
sufficient grant deed to the Buyer or to the Buyer's nominee, good and clear
record and marketable fee simple title to all of the Real Property and the
Improvements free and clear of all liens, encumbrances, conditions, easements,
assessments, restrictions and other conditions, except for the following:
(a) The lien, if any, for real estate taxes not yet due and
payable;
(b) All matters listed on the Title Commitment and Survey which (i) have
not been objected to and (ii) Seller is not obligated to cure and/or Seller has
not agreed to cure, pursuant to Section 6.1 above;
(c) All Leases disclosed to Buyer in writing prior to the expiration of
the Inspection Period;
(d) All zoning, building and other laws applicable to the Property; and
(e) All matters which arise after the effective date of the Title
Commitment which are agreed upon or consented to by Buyer in writing.
At the Close of Escrow, the Seller shall assign without recourse the
Leases, Contracts which are not to be terminated and warranties, if any, to
Buyer and Buyer shall assume Seller's obligations thereunder from and after the
date of Close of Escrow and Seller shall convey the Personal Property to the
Buyer by quitclaim bill of sale.
Representations and Warranties
The Seller hereby represents and warrants to the Buyer as of
the date of this Agreement as follows:
(a) The Seller is a limited partnership validly existing under the laws of
the State of Delaware and qualified to do business in the State of California
with all necessary legal power to enter into and perform its obligations
hereunder and under any document or instrument required hereunder to be executed
and delivered on behalf of the Seller.
(b) This agreement has been duly authorized by all necessary partnership
action on the part of the Seller and has been duly executed and delivered on
behalf of the Seller by a duly authorized general partner of the Seller. This
Agreement has been duly executed and delivered by Seller, and (assuming valid
execution and delivery by Buyer) is a legal, valid and binding obligation of
Seller enforceable against it in accordance with its terms.
(c) All information pertaining to the Property prepared by Seller and
delivered to Buyer is true and correct in all material respects.
(d) Seller is not a foreign person and is a "United States Person" as
defined in Section 7701(a)(30) of the Internal Revenue code of 1986, as amended.
(e) Except as set forth on Schedule G attached hereto, there are no
pending lawsuits of any nature affecting or relating to the Property and to
Seller's actual knowledge, there is no threatened or anticipated litigation
affecting or relating to the Property or Seller in any way, including, without
limitation, Seller's title to or use of the Property or any part thereof or
Seller's ability to perform its obligations under this Agreement.
(f) To Seller's actual knowledge, the Rent Roll attached to this Agreement
as Schedule C is a complete and accurate list of all of the leases and rental
agreements presently in effect with respect to the Property. To Seller's actual
knowledge, except for the rights of the tenants listed on Schedule C, or
disclosed on the Title Commitment, no person has any right of possession, use or
occupancy of the Property or any part of it.
(g) Except as set forth on Schedule H attached hereto, Seller has not
received written notification from any governmental authority or agency that
there exists any existing violation of law, statute, code, ordinance, rule or
regulation applicable to the Property.
(h) There are no condemnation proceedings, eminent domain proceedings or
similar actions or proceedings now pending against the Property and to Seller's
actual knowledge, no such proceedings or actions have been threatened against
the Property.
(i) There are no attachments, executions, assignments for the benefit of
creditors, receiverships, conservatorships or voluntary or involuntary
proceedings in bankruptcy or pursuant to any other debtor relief laws filed by
Seller or to Seller's actual knowledge, pending or threatened against Seller or
the Property.
Each representation and warranty contained in this Section 6.4.1 is
subject to being updated by Seller in writing on or before the expiration of the
Inspection Period or the Title Response Period if such period extends beyond the
Inspection Period and the update concerns title or survey matters, and shall be
deemed to have been amended as provided in this Agreement and by the information
contained in Seller deliveries of Due Diligence materials under Sections 5.1 and
5.2 and such other information delivered to Buyer in writing under the terms of
the Agreement or otherwise obtained by Buyer prior to the expiration of the
Inspection Period or the Title Response Period, if such period extends beyond
the expiration of the Inspection Period and the information concerns title or
survey matters. Each of the representations and warranties contained in Section
6.4.1 is hereby qualified to Seller's actual knowledge without further inquiry
except as provided below. For purposes of Section 6.4.1 actual knowledge of
Seller shall mean the actual awareness of Rock D'Errico (who has been the
officer of the general partner of Seller with primary asset management
responsibility for the Property). Such individual shall have no obligation to
make any further inquiry of any persons, but such actual knowledge obtained from
any other source shall be deemed to be actual knowledge for purposes of this
Section 6.4.1.
The Buyer hereby represents and warrants to the Seller as of the date of
this Agreement as follows:
(a) The Buyer is a corporation organized, existing and in good standing
under the laws of the State of California and has the requisite power and
authority to enter into and perform the terms of this Agreement.
(b) The execution and delivery of this Agreement and the consummation of
the transaction contemplated hereby has been duly authorized by all necessary
parties and no other proceedings on the part of Buyer are necessary in order to
permit it to consummate the transaction contemplated hereby. This Agreement has
been duly executed and delivered by Buyer and (assuming valid execution and
delivery by Seller) is a legal, valid and binding obligation of Buyer
enforceable against it in accordance with its terms.
(c) The financial statements provided pursuant to Section 5.4 are true and
complete in all material respects.
The representations and warranties of Seller contained in Section
6.4.1 shall survive Close of Escrow until the earlier of (i) the dissolution of
the Seller during the normal course of business, or (ii) six (6) months.
The obligations of the Buyer and Seller to consummate the
transaction contemplated by this Agreement are subject to the representations
and warranties made by the other party to this Agreement being true and correct
in all material respects on and as of the Escrow Closing Date with the same
force and effect as though such representations and warranties had been made as
of the Escrow Closing Date.
On the Escrow Closing Date, Seller shall assign without warranty to
Buyer any rights Seller has against prior Property owners, adjoining property
owners, governmental agencies, and any and all third parties regarding
environmental conditions at, or related to, the Property ("Seller Claims").
Neither Buyer nor any assignee of Buyer may assign Seller Claims to future
owners of the Property or any other third party without Seller's consent, which
consent shall be granted if the indemnity under this Section will retain the
same net worth or greater upon the assignment.
Buyer shall indemnify, release and hold harmless the Seller, its officers,
directors, partners, employees and agents from and against any and all claims,
demands (including without limitation any clean-up order, monitoring order,
testing order, remediation order or other orders of any kind, including the
Order), actions, administrative proceedings, costs, liabilities, judgements,
damages, fines, encumbrances, liens, penalties, liabilities and expenses of
whatever kind in nature incurred at any time which arise out or relate to
environmental contamination on the Property. Buyer hereby releases the Seller
from any claims which arise out of or relate to environmental contamination on
the Property. Buyer hereby expressly waives the benefits and protections of
Section 1542 of the Civil Code of the State of California as to unknown claims.
Buyer's breach of such the obligations under this Section will be fully
actionable by Seller at law or in equity. The obligations under this Section
shall survive the Close of Escrow.
ARTICLE 6
CLOSE OF ESCROW
The consummation of the purchase and sale contemplated in this
Agreement (the "Close of Escrow") shall occur in the offices of the Escrow Agent
at 10:00 am twenty (20) days after the expiration of the Inspection Period, (the
"Escrow Closing Date"), unless such day is not a day on which the County
Recorder's Office in the county where the Property is located is open for
business, in which case, the Close of Escrow shall take place on the next day on
which such registry is open. It is agreed that time is of the essence in this
Agreement. The Escrow Closing Date may be changed by mutual written agreement of
Buyer and Seller.
On or before the Escrow Closing Date the Seller shall deliver or
cause to be delivered each of the following items to the Escrow Holder:
(a) A duly executed and acknowledged grant deed as provided for in Section
6.2 conveying the Real Property and the Improvements to the Buyer;
(b) Two duly executed quitclaim bills of sale conveying the Personal
Property to the Buyer (the "Bill of Sale");
(c) Two duly executed assignment and assumption of leases without recourse
(the "Assignment of Leases");
(d) Two duly executed assignment and assumption of contracts, licenses,
guaranties, warranties, and intangible property without recourse (the
"Assignment of Contracts");
(e) Two duly executed assignment of claims without warranty (the
"Assignment of Claims").
(f) Certificate or certificates of non-foreign status from the Seller
reasonably acceptable in form and substance;
(g) Two counterpart originals of the closing statement setting forth the
Purchase Price, the closing adjustments and the application of the Purchase
Price as adjusted (the "Closing Statement");
(h) Customary affidavits sufficient for the Title Company to delete any
exceptions for mechanic's or materialmen's liens from the Buyer's title policy
and such other affidavits relating to such title policy as the Title Company may
reasonably request;
(i) a rent roll certified by Seller as of the Escrow Closing Date;
(j) all original Leases, service contracts, property management files and
Tenant correspondence in each case, if in Seller's possession;
(k) keys to all locks which manager has in its possession;
(l) notice letters from Seller to tenants of the sale of the Property and
assignment of the Leases, including notice of transfer of security deposit,
transfer of claims made with regard to the security deposit, and transferee's
name and address; and
(m) Such other instruments as the Escrow Agent may reasonably request to
effectuate the transaction contemplated by this Agreement.
On or before the Escrow Closing Date the Buyer shall deliver or
cause to be delivered at its expense each of the following to the Escrow Holder:
(a) The Purchase Price for the Property, as such Purchase Price may have
been further adjusted pursuant to the provisions of this Agreement and credited
for any portion of the Escrowed Amount paid to the Seller, in the manner
provided for in Article 3;
(b) Two duly executed Assignment of Leases;
(c) Two duly executed Assignment of Contracts;
(d) Two duly executed Assignment of Claims;
(e) Such other instruments as the Escrow Agent may reasonably request to
effectuate the transaction contemplated by this Agreement; and
(f) Two counterpart originals of the Closing Statement.
7.4 Upon the Close of Escrow, Escrow Holder shall promptly undertake the
following in the manner indicated:
(a) Cause the grant deed to be recorded in the Official Records of Santa
Clara County.
(b) Disburse all funds deposited with Escrow Holder by Buyer towards
payment of the Purchase Price as provided for in the Closing Statement.
(c) Deliver title insurance policy to Buyer.
(d) Deliver one executed Bill of Sale, Assignment of Leases, Assignment of
Contracts, Assignment of Claims and Closing Statement to each of Buyer and
Seller.
(e) Deliver the certificate or certificates of non-foreign status from the
Seller, the original tenant estoppel certificates as delivered by Seller, all
Leases and Tenant correspondence as delivered by Seller, keys to all locks which
manager has in its possession, and the notice letters from Seller to tenants.
(f) Deliver to both Buyer and Seller copies of all other documents
delivered by either party or recorded pursuant to this Agreement.
ARTICLE 7
CASUALTY AND CONDEMNATION
If the Improvements are materially damaged or destroyed by fire or
any other casualty such that the cost of repair exceeds $250,000 and are not
substantially restored to the condition immediately prior to such casualty
before the Escrow Closing Date, the Buyer shall have the following elections:
(a) to purchase the Property in its then condition and pay the Purchase
Price, in which event the Seller shall pay over or assign to the Buyer as the
case may be, on the Escrow Closing Date, all amounts recovered or recoverable by
the Seller on account of any insurance as a result of such casualty plus the
amount of any applicable deductible, less any amounts reasonably expended by the
Seller for partial restoration; or
(b) to terminate this Agreement by giving notice of termination to the
Seller on or before that date which is thirty (30) days after the occurrence of
the fire or other casualty or on the Escrow Closing Date, whichever occurs
first, in which event the Escrow Holder shall return the Escrowed Amount to the
Buyer, this Agreement shall terminate and neither the Seller nor the Buyer shall
have any recourse against the other (except to the extent such recourse arises
in connection with a provision of this Agreement which is intended to survive
termination).
If any portion of or interest in the Property shall be taken or is
in the process of being taken by exercise of the power of eminent domain or if
any governmental authority notifies the Seller prior to the Escrow Closing Date
of its intent to take or acquire any portion of or interest in the Property
(each an "Eminent Domain Taking"), the Seller shall give notice promptly to the
Buyer of such event and the Buyer shall have the option to terminate this
Agreement by providing notice to the Seller to such effect on or before the date
which is ten (10) days from the Seller's notice to the Buyer of such Eminent
Domain Taking or on the Escrow Closing Date, whichever occurs first, in which
event the Escrow Holder shall return the Escrowed Amount to the Buyer, this
Agreement shall terminate, and neither the Seller nor the Buyer shall have any
recourse against the other. If the Buyer does not timely notify the Seller of
its election to terminate this Agreement, the Buyer shall purchase the Property
and pay the Purchase Price, and the Seller shall pay over or assign to the Buyer
on delivery of the deed all awards recovered or recoverable by the Seller on
account of such Eminent Domain Taking, less any amounts reasonably expended by
the Seller in obtaining such award.
ARTICLE 8
BROKERAGE COMMISSIONS
The Buyer represents and warrants to the Seller that the Buyer has not
dealt with, and is not obligated to pay, any fees or commissions to any broker
in connection with the transaction contemplated by this Agreement. Seller
represents and warrants to Buyer that Seller has not used or employed any broker
or brokers in connection with the negotiation, execution or consummation of this
transaction, other than Scott Mathisen and Doug Yoder of CB Commercial
("Seller's Agent"), and no finder's fee is payable in connection with this
transaction. Buyer and Seller each hereby agree to indemnify, defend and hold
the other harmless from and against any and all loss, costs, claims and expenses
(including reasonable attorney's fees) which arise as a result of breach of the
foregoing representation and warranty. The indemnification contained in this
Article 9 shall survive Close of Escrow hereunder or termination hereof, as the
case may be. All commissions, if any, to the brokers named herein shall be paid
by the Seller but shall be payable only if the transactions contemplated herein
are consummated.
ARTICLE 9
DEFAULT, TERMINATION AND REMEDIES
In the event that Seller shall have failed in any material respect
adverse to the Buyer on the Escrow Closing Date to have performed or has
otherwise breached any of the covenants and agreements contained in this
Agreement which are to be performed by the Seller on or before the Escrow
Closing Date, the Buyer shall have the following remedies, (i) the right to take
any and all legal actions necessary to compel the Seller's specific performance
hereunder (it being acknowledged that damages at law would be an inadequate
remedy), and to consummate the transaction contemplated by this Agreement in
accordance with the provisions of this Agreement (such conveyance shall be
deemed to satisfy and waive any other remedy) or (ii) the right to terminate
this Agreement and receive the Escrowed Amount whereupon this Agreement shall
terminate without further recourse.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT, IF BUYER HAS NOT TERMINATED THIS AGREEMENT ON OR BEFORE THE
EXPIRATION OF THE INSPECTION PERIOD OR THE EXPIRATION OF THE TITLE RESPONSE
PERIOD, AND IF THE SALE OF THE PROPERTY TO BUYER IS NOT CONSUMMATED DUE TO
BUYER'S DEFAULT UNDER THE AGREEMENT, SELLER SHALL BE ENTITLED TO RETAIN THE
ESCROWED AMOUNT AS SELLER'S LIQUIDATED DAMAGES AS ITS SOLE REMEDY. THE PARTIES
AGREE THAT IT WOULD BE IMPRACTICABLE AND EXTREMELY DIFFICULT TO ASCERTAIN THE
ACTUAL DAMAGES SUFFERED BY SELLER AS A RESULT OF BUYER'S DEFAULT UNDER THIS
AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS
AGREEMENT, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENTS A
REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH
BUYER'S DEFAULT AFTER THE EXPIRATION OF THE INSPECTION PERIOD, THE EXTENDED
INSPECTION PERIOD, OR THE TITLE RESPONSE PERIOD, AS THE CASE MAY BE, PROVIDED,
HOWEVER, THAT THIS PROVISION SHALL NOT WAIVE OR AFFECT SELLER'S RIGHTS AND
BUYER'S OBLIGATIONS UNDER SECTIONS 5.7 AND 6.6 AND ARTICLE 9 OF THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTION 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER
PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676, AND 1677.
SELLER'S INITIALS /S/ RMD BUYER'S INITIALS __________________
As material consideration to each party's agreement to the
liquidated damages provisions stated in Section 10.2, each party hereby agrees
to waive any and all rights whatsoever to contest the validity of the liquidated
damage provisions for any reason whatsoever, including, but not limited to, that
such provision was unreasonable under circumstances existing at the time this
Agreement was made.
ARTICLE 11
MISCELLANEOUS
The Buyer may only assign or transfer its rights under this
Agreement to an entity owned, or controlled by Buyer or its members or which
owns or controls Buyer. The covenants and agreements contained in this Agreement
shall extend to and be obligatory upon the permitted successors and assigns of
the respective parties to this Agreement.
Except as otherwise specifically provided herein, any notice
required or permitted to be delivered under this Agreement shall be in writing
and shall be deemed given if (i) delivered by hand during regular business
hours, (ii) telecopied during regular business hours with an original sent by
regular mail, (iii) sent by United States Postal Service, registered or
certified mail, postage prepaid, return receipt requested, or (iv) sent by a
reputable overnight express mail service that provides tracing and proof of
receipt or refusal of items mailed, addressed to the Seller or the Buyer, as the
case may be, at the address or addresses set forth below or such other addresses
as the parties may designate in a notice similarly sent. Any notice given by a
party to Escrow Holder shall be simultaneously given to the other party. Any
notice given by a party to the other party relating to its entitlement to the
Escrowed Amount shall be simultaneously given to the Escrow Holder.
(1) If to Buyer:
Limar Realty Corp #36
1730 S. El Camino Real
San Mateo, California 94402-3061
Attn: Theodore H. Kruttschnitt
Fax No.: (650) 525-9345
with a copy to:
Kay & Merkle
KO The Embarcadero, Penthouse
San Francisco, CA 94105
Attn: Walter F. Merkle, Esq.
Fax No. (415) 512-9277
(2) If to Seller:
PaineWebber Qualified Plan Property Fund Four, L.P.
c/o PaineWebber Properties Incorporated
265 Franklin Street - 16th Floor
Boston, MA 02110
Attn: Rock D'Errico
Fax No.: (617) 478-4725
with a copy to:
Goodwin, Procter and Hoar LLP
Exchange Place
Boston, Massachusetts 02109
Attn: Andrew C. Sucoff, Esq.
Fax No.: (617) 227-8591
(3) If to the Escrow Holder:
Chicago Title Company
388 Market Street #1300
San Francisco, CA 94111
Attn: Nicole Carr
Fax No.: (415) 956-2175
Words of any gender used in this Agreement shall be held and
construed to include any other gender, and words of a singular number shall be
held to include the plural and vice versa, unless the context requires
otherwise.
The captions used in connection with the Articles of this Agreement
are for convenience only and shall not be deemed to extend, limit or otherwise
define or construe the meaning of the language of this Agreement.
Nothing in this Agreement, express or implied, is intended to confer
upon any person, other than the parties hereto and their respective successors
and assigns, any rights or remedies under or by reason of this Agreement.
This Agreement may be amended only by a written instrument executed
by the Seller and the Buyer (or Buyer's assignee or transferee).
This Agreement embodies the entire agreement between the Seller and
the Buyer with respect to the transaction contemplated in this Agreement, and
there have been and are no covenants, representations, warranties or
restrictions between the Seller and the Buyer with regard thereto other than
those set forth or provided for in this Agreement. Any prior agreements are
hereby terminated and superseded by this Agreement.
This Agreement shall be construed under and in accordance with the
laws of the State of California.
This Agreement may be executed in two (2) or more counterparts, each
of which shall be an original but such counterparts together shall constitute
one and the same instrument notwithstanding that both the Buyer and Seller are
not signatory to the same counterpart.
The Escrow Holder has executed this Agreement only for the purpose
of agreeing to perform the duties assigned to it under this Agreement. The
Escrow Holder shall deposit the Escrowed Amount in an interest bearing account.
From the Opening of Escrow the Escrow Holder shall, upon receiving a copy of a
notice given by a party in accordance with this Agreement claiming entitlement
to all or a portion of the Escrowed Amount, give a notice to the other party
that such claim of entitlement has been made. The Escrow Holder shall not cause
or permit any portion of the Escrowed Amount to be disbursed until the
expiration of five (5) days of giving such notice whereupon, if the party to
whom such notice was given has not given the Escrow Holder notice of its
objection to a disbursement in accordance with the claim of entitlement, the
Escrow Holder shall cause a disbursement of the Escrowed Amount as requested. If
such party timely objects, however, the Escrow Holder shall retain the Escrowed
Amount and not disburse any portion of the same unless directed by the mutual
written direction of the parties. The Escrow Holder shall at all times disburse
the Escrowed Amount as required in a mutual written direction of the parties.
This Agreement shall terminate upon any such request from Buyer pursuant to
Sections 4.5, 5.3 and 6.1 and Article 8 above.
In the event of any disagreement between the parties, the Escrow
Holder shall retain all deposits pending instructions mutually agreed to by the
Seller and Buyer. In the event there is no mutual agreement by Seller and Buyer
for disbursements, the Escrow Holder shall hold said deposits pending a court
order to disburse. The Escrow Holder may conclusively rely on the authenticity,
validity and effectiveness of any writing delivered to it, and Escrow Holder
shall not be obligated to make any investigation or determination, except as
provided in the case of disputes as to the truth and accuracy of any information
contained therein. Buyer and Seller agree to defend, indemnify and hold Escrow
Holder harmless from any liabilities, suits, claims, or expenses arising from or
out of or in connection with Escrow Holder's acts or failure to act hereunder,
unless caused or created as a result of Escrow Holder's gross negligence or
willful misconduct, and Escrow Holder shall be entitled to reimbursement by
Buyer and/or Seller for all reasonable costs and expenses incurred in the
performance of its duties hereunder including, without limitation, all
out-of-pocket expenses and reasonable attorneys fees of counsel retained by
Escrow Holder. Any such costs and expenses not paid by the parties after billing
and supporting documentation by Escrow Holder may be paid by Escrow Holder out
of the Escrowed Amount. If there is a settlement by Buyer and Seller prior to a
court order, the Buyer and Seller will share equally in the expenses incurred by
the Escrow Holder. Otherwise, the non-prevailing party shall assume full
responsibility for the Escrow Holder's expenses. Escrow Holder is not required
to advance or expend or risk its own funds or otherwise incur personal liability
in performance of its duties hereunder and it may require advancement of funds
by the parties.
Time is expressly declared to be of the essence of this Agreement.
The obligations of Seller hereunder shall be binding only on the
Property and neither the Buyer nor anyone claiming by, through or under the
Buyer shall be entitled to obtain any judgment extending liability beyond the
Property or creating personal liability on the part of the officers, directors,
shareholders, partners or agents of Seller or any of their successors. The
obligations of Buyer hereunder shall be binding only on the assets of Buyer and
neither the Seller nor anyone claiming by, through or under the Seller shall be
entitled to obtain any judgment creating personal liability on the part of the
partners, officers, shareholders, or agents of Buyer or any of their successors
or any affiliated entities. This Section is not intended to limit recovery for
breach of Section 6.6.
In order that Seller may liquidate after the Close of Escrow without
having to maintain reserves as a result of any continuing obligations hereunder
and notwithstanding any provision in this Agreement to the contrary, except for
the obligations under Section 6.6 which survive the Close of Escrow, all
obligations of the Seller under this Agreement which survive the Close of
Escrow, including, without limitation, tax adjustments pursuant to Section 3.4,
utility adjustments pursuant to Section 3.6, rent and lease expense adjustments
pursuant to Section 3.7.3, Seller's representations and warranties pursuant to
Section 6.4.1 and Section 5.3, Seller's obligation to assign Seller's Claims
pursuant Section 6.6 and Seller's representation and warranty and
indemnification pursuant to Article 9 shall only survive until the earlier of
(i) the dissolution of the Seller during the normal course of business, or (ii)
six (6) months.
ARTICLE 12
IRS FORM 1099-S DESIGNATION
In order to comply with information reporting requirements of
Section 6045(e) of the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations thereunder, the parties agree (1) to execute an IRS Form
1099-S Designation Agreement in the form attached hereto as Schedule F at or
prior to the Close of Escrow to designate the Escrow Holder (the "Designee") as
the party who shall be responsible for reporting the contemplated sale of the
Property to the Internal Revenue Service (the "IRS") on IRS Form 1099-S; (2) to
provide the Designee with the information necessary to complete Form 1099-S; (3)
that the Designee shall not be liable for the actions taken under this
Agreement, or for the consequences of those actions, except as they may be the
result of gross negligence or willful misconduct on the part of the Designee;
and (4) that the Designee shall be indemnified by the parties for any costs or
expenses incurred as a result of the actions taken hereunder, except as they may
be the result of gross negligence or willful misconduct on the part of the
Designee. The Designee shall provide all parties to this transaction with copies
of the IRS Forms 1099-S filed with the IRS and with any other documents used to
complete IRS Form 1099-S.
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
BUYER:
LIMAR REALTY CORP #36
By: /s/ T. H. Kruttschnitt
------------------------
Name: T. H. Kruttschnitt
Title: President
SELLER:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified Properties,
Inc., Managing General Partner
By: /s/ Rock M. D'Errico
---------------------
Rock M. D'Errico
Vice President
ESCROW HOLDER:
CHICAGO TITLE COMPANY
By: /s/ Nicole T. Cash
--------------------
Name: Nicole T. Cash
Title: Escrow Officer
<PAGE>
FIRST AMENDMENT TO JOINT ESCROW INSTRUCTIONS
AND PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO JOINT ESCROW INSTRUCTIONS AND PURCHASE AND SALE
AGREEMENT ("First Amendment") is made and entered into as of the 9th day of
April, 1998, by and between Paine Webber Qualified Plan Property Fund Four, LP.,
a Delaware corporation ("Seller") and Limar Realty Corp. #36, a California
corporation ("Buyer").
RECITALS
This First Amendment is made with respect to the following facts:
A. Seller and Buyer entered into that certain Joint Escrow Instructions and
Purchase and Sale Agreement dated March 11, 1998 ("Purchase Agreement").
B. Seller and buyer desire to amend and modify the Purchase Agreement in
accordance with the provisions of this First Amendment.
COVENANTS
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Buyer agree as follows:
1. Inspection Period. With references to Section 5.3 of the Purchase
Agreement, and notwithstanding the provisions of such Section to the
contrary, the Inspection Period shall be extended through April 15, 1998.
2. Counterparts. This First Amendment may be executed in counterparts,
each of which will constitute an original. This First Amendment shall only
be effective if a counterpart is signed by both Seller and Buyer.
3. Facsimile Signatures Seller and Buyer each (a) has agreed to permit the
use, from time to time where appropriate, of telecopied signatures in
order to expedite the transaction contemplated by this First Amendment,
(b) intends to be bound by its respective telecopied signatures, (c) is
aware that the other will rely on the telecopied signature, and (d)
acknowledges such reliance and waives any defenses to the enforcement of
this First amendment and the documents effecting the transaction
contemplated by this First Amendment based on the fact that a signature
was sent by telecopy only.
4. Miscellaneous. Any inconsistency between the provisions of this First
Amendment and the provisions of the Purchase Agreement shall be governed
by the provisions of this First Amendment. Except as otherwise
specifically defined in this First Amendment, all defined terms as used in
this First Amendment shall have the same meaning as ascribed to such terms
in the Purchase Agreement. Except as specifically modified by the
provisions of this First Amendment, the Purchase Agreement shall remain in
full force and effect.
<PAGE>
IN WITNESS WHEREOF, Seller and Buyer have executed this First Amendment as
of the date first above written.
SELLER: BUYER:
PAINEWEBBER QUALIFIED PLAN LIMAR REALTY CORP. #36
PROPERTY FUND FOUR, LP a California corporation
a Delaware corporation
By: /s/ Rock M. D'Errico By: /s/ Theodore H. Kruttschnitt
-------------------- -----------------------------
Rock M. D'Errico Theodore H. Kruttschnitt
Its: Vice President Its: President
<PAGE>
SECOND AMENDMENT TO JOINT ESCROW INSTRUCTIONS
AND PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO JOINT ESCROW INSTRUCTIONS AND PURCHASE AND SALE
AGREEMENT ("Second Amendment") is made and entered into as of the 15th day of
April, 1998, by and between Paine Webber Qualified Plan Property Fund Four, LP.,
a Delaware corporation ("Seller") and Limar Realty Corp. #36, a California
corporation ("Buyer").
RECITALS
This Second Amendment is made with respect to the following facts:
A. Seller and Buyer entered into that certain Joint Escrow Instructions and
Purchase and Sale Agreement dated March 11, 1998, which was amended by the
First Amendment, dated April 9, 1998 ("Purchase Agreement").
B. Seller and buyer desire to amend and modify the Purchase Agreement in
accordance with the provisions of this Second Amendment.
COVENANTS
NOW THEREFORE, in consideration of the mutual covenants contained herein,
Seller and Buyer agree as follows:
1. Inspection Period. With references to Section 5.3 of the Purchase
Agreement, and notwithstanding the provisions of such Section to the
contrary, the Inspection Period shall be extended through April 16, 1998
5:00 PM PDT
2. Termination Letter Dated 4/15/98. The parties hereto agree that the
Termination Notice, dated 4/15/98 sent by Buyer's attorney (Kay & Merkel)
to Seller, is hereby revoked.
3. Counterparts. This Second Amendment may be executed in counterparts,
each of which will constitute an original. This Second Amendment shall
only be effective if a counterpart is signed by both Seller and Buyer.
4. Facsimile Signatures Seller and Buyer each (a) has agreed to permit the
use, from time to time where appropriate, of telecopied signatures in
order to expedite the transaction contemplated by this First Amendment,
(b) intends to be bound by its respective telecopied signatures, (c) is
aware that the other will rely on the telecopied signature, and (d)
acknowledges such reliance and waives any defenses to the enforcement of
this First amendment and the documents effecting the transaction
contemplated by this Second Amendment based on the fact that a signature
was sent by telecopy only.
5. Miscellaneous. Any inconsistency between the provisions of this Second
Amendment and the provisions of the Purchase Agreement shall be governed
by the provisions of this Second Amendment. Except as otherwise
specifically defined in this First Amendment, all defined terms as used in
this Second Amendment shall have the same meaning as ascribed to such
terms in the Purchase Agreement. Except as specifically modified by the
provisions of this Second Amendment, the Purchase Agreement shall remain
in full force and effect.
<PAGE>
IN WITNESS WHEREOF, Seller and Buyer have executed this Second Amendment as
of the date first above written.
SELLER: BUYER:
PAINEWEBBER QUALIFIED PLAN LIMAR REALTY CORP. #36
PROPERTY FUND FOUR, LP a California corporation
a Delaware corporation
By: /s/ Rock M. D'Errico By: /s/ Theodore H. Kruttschnitt
-------------------- ----------------------------
Rock M. D'Errico Theodore H. Kruttschnitt
Its: Vice President Its: President
<PAGE>
LIMAR REALTY GROUP [LETTERHEAD]
April 16, 1998
VIA FACSILILE
617/478-4725
Mr. Rock M. D'Errico
Vice President
PaineWebber Properties Incorporated
265 Franklin Street, 16th Floor
Boston, MA 02110
RE: 680 West Maude Avenue
Sunnyvale, California
Dear Rock:
Please be advised that Buyer has elected to approve the Property
referenced above in connection with our Due Diligence and in connection with our
Inspection Period, which is described in Article 5 of the Joint Escrow
Instructions and Purchase and Sale Agreement between PaineWebber Qualified Plan
Property Fund Four, L.P. (as Seller) and Limar Realty Corp. #36 (as Buyer) dated
March 11, 1998. This election is expressly conditioned on the agreement which
was reached between us this afternoon that at Closing, Buyer will receive a
Price Credit in the amount of Ten Thousand Dollars ($10,000.00) relating to
certain due diligence issues and that the Purchase Price shall be Five Million
One Hundred Twenty Five Thousand Dollars ($5,125,000.00).
Sincerely,
/s/ Bing Heckman
- ----------------
H.L. (Bing) Heckman
Vice President/Acquisitions
Enclosures
cc: Andrew c. Sucoff, Esq. (via facsimile)
Walter F. Merkel, Esq. (via facsimile)
AGREED & ACCEPTED
PAINEWEBBER QUALFIED PLAN
PROPERTY UFND FOUR, L.P.
a Delaware corporation
BY: /s/ Rock M. D'Errico
--------------------
NAME: Rock M. D'Errico
TITLE: Vice President
DATE: April 16, 1998
<PAGE>
THIRD AMENDMENT TO JOINT ESCROW INSTRUCTIONS
AND PURCHASE AND SALE AGREEMENT
This Third Amendment to Joint Escrow Instructions and Purchase and Sale
Agreement is made and entered into as of the 5th day of May, 1998, by and
between PaineWebber Qualified Plan Property Fund Four, L.P., a Delaware
corporation ("Seller") and Limar Realty Corp #36, a California corporation
("Buyer") and Buyer's nominee, Limar Realty Corp #27, ("Buyer's Nominee") (the
"Third Amendment").
RECITALS
Whereas, Buyer and Seller entered into that certain Joint Escrow
Instructions and Purchase and Sale Agreement dated as of March 11, 1998, between
Buyer, Seller and Chicago Title Company, as amended by the First Amendment to
Joint Escrow Instructions and Purchase and Sale Agreement dated April 9, 1998,
the Second Amendment to Joint Escrow Instructions to Purchase and Sale Agreement
dated April 15, 1998 and a certain Letter Agreement dated April 16, 1998
(collectively, "Purchase Agreement").
Whereas, Buyer, Seller and Buyer's Nominee desire to extend the Escrow
Closing Date under the Purchase Agreement until May 20, 1998.
COVENANTS
Now therefore, for good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the Buyer, Seller and Buyer's
Nominee agree as follows:
1. With reference to Section 7.1 of the Joint Escrow Instructions and
Purchase and Sale Agreement dated as of March 11, 1998, the "Escrow Closing
Date" shall be May 20, 1998.
2. Simultaneously with the execution of this Third Amendment, Buyer's
Nominee shall deposit with the Escrow Agent $250,000 (the "Additional Deposit")
to be held by Escrow Holder together with the $100,000 plus interest held by
Escrow Holder in an interest bearing account (the Additional Deposit plus the
$100,000 together with all interest earned thereon shall be the "Escrowed
Amount"). Notwithstanding anything in the Purchase Agreement to the contrary,
the Escrowed Amount shall only be refundable pursuant to Article 8 and Section
10.1 of the Joint Escrow Instructions and Purchase and Sale Agreement dated as
of March 11, 1998.
3. Buyer hereby assigns all the rights and obligations of Buyer's
covenants and agreements contained in the Purchase Agreement to Buyer's Nominee.
Buyer's Nominee hereby assumes all the rights and obligations of Buyer's
covenants and agreements contained in the Purchase Agreement.
4. Section 11.1 of the Joint Escrow Instructions and Purchase and Sale
Agreement dated as of March 11, 1998 is deleted in its entirety. The rights and
obligations under the Purchase Agreement may not be further assigned or
transferred.
5. Buyer and Buyer's Nominee waive all objections to the Amendment of Site
Cleanup Requirements (Order No. 95-210) prepared by George Lincoln of the
Regional Water Quality Control Board, except insofar as the objections relate to
the identity of the property owner being Limar Realty Corp #27 instead of Limar
Realty Corp #36.
6. This Third Amendment may be executed in counterparts, each of which
will constitute an original. This Third Amendment shall only be effective if a
counterpart is signed by Seller, Buyer and Buyer's Nominee and delivered to
Seller by 10:00 am Pacific time May 6, 1998.
7. Seller, Buyer and Buyer's Nominee each (a) has agreed to permit the
use, from time to time where appropriate, of telecopied signatures in order to
expedite the transaction contemplated by this Third Amendment, (b) intends to be
bound by its respective telecopied signatures, (c) is aware that the other will
rely on the telecopied signature, and (d) acknowledges such reliance and waives
any defenses to the enforcement of this Third Amendment and the documents
affecting the transaction contemplated by this Third Amendment based on the fact
that a signature was sent by telecopy only.
8. Any inconsistency between the provisions of this Third Amendment and
the Purchase Agreement shall be governed by the provisions of this Third
Amendment. Except as otherwise specifically defined in this Third Amendment, all
capitalized terms as used in this Third Amendment shall have the same meaning as
ascribed to such terms in the Purchase Agreement. Except as specifically
modified by the provisions of this Third Amendment, the Purchase Agreement shall
remain in full force and effect and is hereby ratified by the parties to this
Third Amendment.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
BUYER:
LIMAR REALTY CORP #36
By: /s/ Theodore H. Kruttschnitt
----------------------------
Name: Theodore H. Kruttschnitt
Title: President
SELLER:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified
Properties, Inc.,
Managing General Partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico
Vice President
BUYER'S NOMINEE:
LIMAR REALTY CORP #27
By: /s/ Theodore H. Kruttschnitt
----------------------------
Name: Theodore H. Kruttschnitt
Title: President
<PAGE>
FOURTH AMENDMENT TO JOINT ESCROW INSTRUCTIONS
AND PURCHASE AND SALE AGREEMENT
This Fourth Amendment to Joint Escrow Instructions and Purchase and Sale
Agreement is made and entered into as of the 19th day of May, 1998, by and
between PaineWebber Qualified Plan Property Fund Four, L.P., a Delaware
corporation ("Seller"), Limar Realty Corp #36, a California corporation
("Buyer") and Chicago Title Company ("Escrow Holder") (the "Fourth Amendment").
RECITALS
Whereas, Buyer's predecessor in interest, Limar Realty Corp. #36, and
Seller entered into that certain Joint Escrow Instructions and Purchase and Sale
Agreement dated as of March 11, 1998, between Buyer, Seller and Chicago Title
Company, as amended by the First Amendment to Joint Escrow Instructions and
Purchase and Sale Agreement dated April 9, 1998, the Second Amendment to Joint
Escrow Instructions to Purchase and Sale Agreement dated April 15, 1998 and a
certain Letter Agreement dated April 16, 1998 and the Third Amendment to Joint
Escrow Instructions and Purchase and Sale Agreement dated as of May 5, 1998 (the
"Third Amendment" and as assigned by Limar Realty Corp. #36 to Buyer pursuant to
the Third Amendment (collectively, "Purchase Agreement").
Whereas, Buyer and Seller desire to extend the Escrow Closing Date under
the Purchase Agreement until May 29, 1998.
COVENANTS
Now therefore, for good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the Seller and Buyer agree as
follows:
1. With reference to Section 7.1 of the Joint Escrow Instructions and
Purchase and Sale Agreement dated as of March 11, 1998, the "Escrow Closing
Date" shall be May 29, 1998.
2. Within one business day of the execution of this Fourth Amendment,
Buyer shall deposit with the Escrow Agent $150,000 (the "Second Additional
Deposit") to be held by Escrow Holder together with the $350,000 plus interest
held by Escrow Holder in an interest bearing account (the Second Additional
Deposit plus the $350,000 together with all interest earned thereon shall be the
"Escrowed Amount"). Notwithstanding anything in the Purchase Agreement to the
contrary, the Escrowed Amount shall only be refundable pursuant to Article 8 and
Section 10.1 of the Joint Escrow Instructions and Purchase and Sale Agreement
dated as of March 11, 1998.
3. Notwithstanding anything in the Purchase Agreement to the contrary,
Buyer hereby covenants and agrees to wire transfer the Purchase Price to the
Escrow Holder no later than 10:00 am Pacific time on the Escrow Closing Date.
4. This Fourth Amendment may be executed in counterparts, each of which
will constitute an original. This Fourth Amendment shall only be effective if a
counterpart is signed by Seller and Buyer and delivered to Seller by 9?30 am
Pacific time May 20, 1998.
5. Seller and Buyer each (a) has agreed to permit the use, from time to
time where appropriate, of telecopied signatures in order to expedite the
transaction contemplated by this Third Amendment, (b) intends to be bound by its
respective telecopied signatures, (c) is aware that the other will rely on the
telecopied signature, and (d) acknowledges such reliance and waives any defenses
to the enforcement of this Fourth Amendment and the documents affecting the
transaction contemplated by this Fourth Amendment based on the fact that a
signature was sent by telecopy only.
6. Any inconsistency between the provisions of this Fourth Amendment and
the Purchase Agreement shall be governed by the provisions of this Fourth
Amendment. Except as otherwise specifically defined in this Fourth Amendment,
all capitalized terms as used in this Third Amendment shall have the same
meaning as ascribed to such terms in the Purchase Agreement. Except as
specifically modified by the provisions of this Fourth Amendment, the Purchase
Agreement shall remain in full force and effect and is hereby ratified by the
parties to this Fourth Amendment.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this instrument as of the
day and year first set forth above.
BUYER:
LIMAR REALTY CORP #27
By: /s/ T. H. Kruttschnitt
-----------------------
Name: T. H. Kruttschnitt
Title: President
SELLER:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified
Properties, Inc.,
Managing General Partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico
Vice President
ESCROW HOLDER:
CHICAGO TITLE COMPANY
By: /s/ Nicole T. Cash
------------------
Name: Nicole T. Cash
Title: Escrow Officer
<PAGE>
ASSIGNMENT OF CLAIMS
This Assignment of Claims (this "Assignment") is made as of May 29, 1998
by and from PaineWebber Qualified Plan Property Fund Four, L.P., a Delaware
limited partnership, having an address c/o PaineWebber Properties, 265 Franklin
Street, Boston, MA 02110 ("Assignor"), to and for the benefit of Limar Realty
Corp #27, a California corporation, having an address at 1730 S. El Camino Real,
San Mateo, California ("Assignee").
RECITALS
A. Pursuant to that certain Joint Escrow Instructions and Purchase and
Sale Agreement dated March 11, 1998, by and between Assignor, Assignee and
Chicago Title Company, as amended by a certain First Amendment to Joint Escrow
Instructions and Purchase and Sale Agreement dated April 9, 1998, a certain
Second Amendment to Joint Escrow Instructions to Purchase and Sale Agreement
dated April 15, 1998 and a certain Letter Agreement dated April 16, 1998 (as so
amended, the "Agreement"), which Agreement provides for the sale by Assignor and
purchase by Assignee of certain improved real property at 680 W. Maude Avenue,
Sunnyvale, California, as more fully described in the Agreement (the
"Property"). Capitalized terms used in this Assignment and not otherwise defined
herein shall have the meanings ascribed to them in the Agreement.
B. Assignor may have certain rights and claims against prior Property
owners, adjoining property owners, governmental agencies, and other third
parties regarding environmental conditions of the Property (collectively, the
"Potentially Liable Parties").
C. In order to induce Assignee to purchase the Property notwithstanding
the environmental conditions, Assignor has agreed to assign its various rights
and claims against the Potentially Liable Parties and Assignor and Assignee have
otherwise agreed with respect to such rights and claims as set forth in this
Assignment.
NOW, THEREFORE, in consideration of the covenants and mutual promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:
1. Assignor hereby assigns to Assignee any and all rights, causes of
action, suits and claims (collectively the "Claims") it has and may have against
the Potentially Liable Parties related in any way to the environmental
conditions at, or related to, the Property.
2. Assignee and any assignee of Assignee may not assign the Claims to
future owners of the Property or any other third party without Assignor's prior
written consent, which consent shall not be unreasonably withheld if the
indemnity provided below will retain the same net worth, or greater, upon the
assignment as the net worth of the indemnity upon the date hereof, including the
value of the Property and the Claims, as evidenced by financial statement or
such other information reasonably acceptable to Assignor.
3. Assignee shall indemnify, release and hold harmless the Assignor, its
officers, directors, partners, employees and agents from and against any and all
claims, demands (including without any limitation any clean-up order, monitoring
order, testing order, remediation order or other orders of any kind, including
the California Regional Water Quality Control Board Site Clean Up Requirements
Order No. 95-210 dated October 18, 1995), actions, administrative proceedings,
costs, liabilities, judgments, damages, fines, encumbrances, liens, penalties,
liabilities and expenses of whatever kind or nature incurred at any time which
arise out of or relate to environmental conditions on the Property. Assignee
hereby releases the Assignor from any claims which arise out of or relate to
environmental conditions on the Property. Assignee hereby expressly waives the
benefits and protections of Section 1542 of the Civil Code of the State of
California as to unknown claims.
4. All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. The obligations pursuant to this Assignment
shall survive the delivery of the Grant Deed for the Property by Assignor to
Assignee.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties duly executed this Assignment as an
instrument under seal as of the date first above written.
ASSIGNOR:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified Properties,
Inc., Managing General
Partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico
Vice President
Commonwealth of Massachusetts
SS
County of Suffolk
On May ___, 1998 before me ________________________________________ personally
appeared Rock M. D'Errico, Vice President of Fourth Qualified Properties, Inc.,
Managing General Partner of PaineWebber Qualified Plan Property Fund Four, L.P.
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity and that
such execution was his free act and deed in such capacity and that by his
signature on the instrument the entity upon behalf of which he acted executed
the instrument.
WITNESS my hand and official seal.
Signature ______________________________ (seal)
My commission expires:
<PAGE>
IN WITNESS WHEREOF, the parties duly executed this Assignment as an
instrument under seal as of the date first above written.
ASSIGNEE:
LIMAR REALTY CORP #27
By: /s/ Theodore H. Kruttschnitt
----------------------------
Name: Theodore H. Kruttschnitt
Title: President
State of _____________________
SS
County of ______________
On May ___, 1998 before me ________________________________________ personally
appeared _______________________ of Limar Realty Corp #27, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity and that such execution
was his/her free act and deed in such capacity and that by his/her signature on
the instrument the entity upon behalf of which he/she acted executed the
instrument.
WITNESS my hand and official seal.
Signature ______________________________ (seal)
My commission expires:
<PAGE>
ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT (the
"Assignment") is executed and delivered on this 29th day of May, 1998, by and
between PaineWebber Qualified Plan Property Fund Four, L.P., a Delaware limited
partnership ("Assignor") and Limar Realty Corp #27, a California corporation
("Assignee").
WITNESSETH:
Assignor has heretofore entered into certain tenant leases with tenants
covering space in the buildings located on those certain tracts of land situated
in 680 West Maude Avenue, Sunnyvale, California (the "Property"), as more
particularly described on Exhibit "A" attached hereto and made a part hereof.
Pursuant to that certain Joint Escrow Instructions and Purchase and Sale
Agreement dated as of March 11, 1998, between Assignor, Assignee and Chicago
Title Company, as amended by the First Amendment to Joint Escrow Instructions
and Purchase and Sale Agreement dated April 9, 1998, the Second Amendment to
Joint Escrow Instructions to Purchase and Sale Agreement dated April 15, 1998
and a certain Letter Agreement dated April 16, 1998 (collectively, "Purchase
Agreement") Assignee desires to acquire from Assignor, and Assignor desires to
sell and assign to Assignee, the Lessor's interest in all leases of the Property
without recourse.
NOW, THEREFORE, for and in consideration of the premises and the
agreements and covenants herein set forth, together with the sum of Ten Dollars
($10.00) and other good and valuable consideration this day paid and delivered
by Assignee to Assignor, the receipt and sufficiency of which by Assignor are
hereby confessed and acknowledged, Assignor does hereby ASSIGN, TRANSFER, SET
OVER, and DELIVER unto Assignee, without recourse, all of the leases listed on
Exhibit B attached hereto (the "Leases"), and all of the rights, benefits, and
privileges of the lessor thereunder (all such properties, rights, and interests,
subject as aforesaid, being hereinafter collectively called the "Assigned
Leases"), including the security deposits under the Leases as set forth in
Schedule 1 attached hereto.
Such assignment of the Assigned Leases by Assignor to Assignee is made on
the following terms and conditions:
A. By its acceptance of the Assigned Leases, Assignee assumes and agrees to
perform all of the terms, covenants, and conditions of the Assigned Leases on
the part of the lessor therein required to be performed from and after the date
hereof, including, but not limited to, the obligation to repay in accordance
with the terms of the Assigned Leases to the lessees thereunder any security and
prepaid rental deposits to the extent paid or credited to Assignee and agrees to
indemnify, defend, save, and hold harmless Assignor from and against any and all
loss, expense, liability, claims, or causes of action including without
limitation reasonable attorney's fees and court costs, existing in favor of or
asserted by the lessees under the Assigned Leases arising out of or relating to
Assignee's failure to perform any of the assumed obligations of the lessor under
the Assigned Leases after the date hereof.
A. Assignor covenants and agrees to indemnify, defend, save and hold harmless
Assignee from and against any and all loss, expense, liability, claims or causes
of action including without limitation reasonable attorney's fees and court
costs, existing in favor of or asserted by the lessees under the Assigned Leases
arising out of or relating to Assignor's failure to perform any of the
obligations of the lessor under the Assigned Leases prior to the date hereof.
The foregoing sentence shall be without recourse to the Assignor as provided for
in the Purchase Agreement.
A. The Assignee hereby acknowledges the receipt of all security deposits under
the Leases as set forth in Schedule 1 attached hereto.
A. This Assignment shall be governed by the law of the State of California and
all of the covenants, terms, and conditions set forth herein shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. The obligations pursuant to this Assignment shall
survive the delivery of the Grant Deed for the Property by Assignor to Assignee.
A. This Assignment may be executed in two (2) or more counterparts, each of
which shall be an original but such counterparts together shall constitute one
and the same instrument notwithstanding that both the Assignor and Assignee are
not signatory to the same counterpart.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, Assignee and Assignor have executed this Assignment.
ASSIGNOR:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified Properties,
Inc., Managing General
Partner
By: /s/ Rock M. D'Errico
--------------------
Rock M. D'Errico
Vice President
Commonwealth of Massachusetts
SS
County of Suffolk
On May ___, 1998 before me ________________________________________ personally
appeared Rock M. D'Errico, Vice President of Fourth Qualified Properties, Inc.,
Managing General Partner of PaineWebber Qualified Plan Property Fund Four, L.P.
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized capacity and that
such execution was his free act and deed in such capacity and that by his
signature on the instrument the entity upon behalf of which he acted executed
the instrument.
WITNESS my hand and official seal.
Signature ______________________________ (seal)
My commission expires:
<PAGE>
IN WITNESS WHEREOF, Assignee and Assignor have executed this Assignment.
ASSIGNEE:
LIMAR REALTY CORP #27
By: Theodore H. Kruttschnitt
------------------------
Name: Theodore H. Kruttschnitt
Title: President
State of _____________________
SS
County of ______________
On May ___, 1998 before me ________________________________________ personally
appeared _______________________ of Limar Realty Corp #27, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity and that such execution
was his/her free act and deed in such capacity and that by his/her signature on
the instrument the entity upon behalf of which he/she acted executed the
instrument.
WITNESS my hand and official seal.
Signature ______________________________ (seal)
My commission expires:
<PAGE>
EXHIBIT A
Real Property situated in the City of Sunnyvale, County of Santa Clara, State of
California, described as follows:
Parcel One as shown on the Parcel Map recorded May 16, 1985 in Book 543 of
maps, at Page 20, Santa Clara County Records.
<PAGE>
EXHIBIT B
1. Biocompatibles Cardiovascular Inc. Industrial Space Lease dated
July 19, 1996.
2. Starwoods Networks Inc. Industrial Space Lease dated October 16, 1996 as
amended by the Letter Agreement dated February 19, 1997, providing that
Foundry Networks, Inc. is the Tenant.
3. RAE Systems Inc. Industrial Space Lease dated March 14, 1994 as amended by
Amendment No. 1 to Lease dated July 17, 1996.
<PAGE>
Schedule 1
Security Deposits
1. Biocompatibles Cardiovascular Inc. $12,087.32
2. Foundry Networks Inc. $22,230.00
3. RAE Systems Inc. $7,800.00
<PAGE>
ASSIGNMENT OF CONTRACTS
AND ASSUMPTION AGREEMENT
This ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT (this "Agreement")
is made and entered into this 29th day of May, 1998, by and between PAINEWEBBER
QUALIFIED PLAN PROPERTY FUND FOUR, L.P., a Delaware limited partnership
("Assignor"), and LIMAR REALTY CORP #27, a California corporation ("Assignee").
WITNESSETH:
A. Assignor, for good and valuable consideration and pursuant to that certain
Joint Escrow Instructions and Purchase and Sale Agreement dated as of March 11,
1998, between Assignor, Assignee and Chicago Title Company, as amended by the
First Amendment to Joint Escrow Instructions and Purchase and Sale Agreement
dated April 9, 1998, the Second Amendment to Joint Escrow Instructions to
Purchase and Sale Agreement dated April 15, 1998 and a certain Letter Agreement
dated April 16, 1998 (collectively, "Purchase Agreement") regarding the sale of
certain property known as 680 W. Maude Avenue, Sunnyvale, California (the
"Property"), the receipt and sufficiency of which is hereby acknowledged, does
hereby sell, transfer, assign, convey, sign over and deliver to Assignee,
without recourse, all right, title and interest of the Assignor in, to and under
all of the contracts listed on Exhibit A attached hereto, and made a part hereof
and all amendments, extensions and renewals thereof (the "Contracts").
Assignee hereby accepts the foregoing assignment by Assignor and assumes
all obligations of Assignor under the Contracts which accrue after the date
hereof. Assignor shall remain responsible for and shall pay and perform all
obligations of Assignor under the Contracts accruing prior to the date hereof.
The foregoing sentence shall be without recourse to the Assignor as provided in
the Purchase Agreement.
A. Assignee shall indemnify, defend and hold Assignor harmless and free and
clear against, and reimburse Assignor for, any damage, loss, cost, expense
(including reasonable attorneys' fees), claim, liability, obligation or debt
resulting from, arising out of or in any way related to (i) any obligations or
liabilities of Assignor under the Contracts which accrue after the date hereof;
and (ii) performance to be made by the Assignor under the Contracts which
performance was to be made by Assignor after the date hereof.
A. Assignor shall indemnify, defend and hold Assignee harmless and free and
clear against, and reimburse Assignee for, any damage, loss, cost, expense
(including reasonable attorneys' fees) claim, liability, obligation or debt
resulting from, arising out of or in any way related to (i) any obligations or
liabilities of Assignor under the Contracts which accrued prior to the date
hereof; and (ii) performance to be made by Assignor under the Contracts, which
performance was to be made by Assignor prior to the date hereof. The foregoing
sentence shall be without recourse to the Assignor as provided under the
Purchase Agreement.
A. This Agreement shall be governed by and construed in accordance with the laws
of the State of California. The obligations pursuant to this Agreement shall
survive the Close of Escrow (as defined in the Purchase Agreement).
A. This Agreement may be executed in two (2) or more counterparts, each of which
shall be an original but such counterparts together shall constitute one and the
same instrument notwithstanding that both the Assignor and Assignee are not
signatory to the same counterpart.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed as of the date first
above written.
ASSIGNOR:
PAINEWEBBER QUALIFIED PLAN PROPERTY
FUND FOUR, L.P.
By: Fourth Qualified
Properties, Inc.,
Managing General Partner
By: /s/ Rock M. D'Errico
---------------------
Rock M. D'Errico
Vice President
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed as of the date first
above written.
ASSIGNEE: LIMAR REALTY CORP #27
By: /s/ Theodore H. Kruttschnitt
----------------------------
Name: Theodore H. Kruttschnitt
Title: President
<PAGE>
EXHIBIT A
Contracts to be assigned
1. Land Services (for monthly landscaping)
2. W.D. Pillay (for monthly sweeping)
3. License Agreement by and between PaineWebber Qualified Plan Property Fund
Four, L.P., Philips Semiconductors Inc. and Eaton Corporation dated March
___, 1996, without representation or warranty
