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) November 20, 1998
-----------------
PaineWebber Equity Partners One Limited Partnership
---------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 0-14857 04-2866287
- --------------------------------------------------------------------------------
(State or other jurisdiction) (Commission (IRS Employer
of incorporation File Number) Identification No.)
265 Franklin Street, Boston, Massachusetts 02110
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 439-8118
(Former name or address, if changed since last report)
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
ITEM 2 - Disposition of Assets
Sunol Center Office Buildings, Pleasanton, California
Disposition Date - November 20, 1998
On November 20, 1998, Sunol Center Associates, a joint venture in which
Paine Webber Equity Partners One Limited Partnership ("the Partnership") has an
interest, sold the property known as the Sunol Center Office Buildings, located
in Pleasanton, California, to an unrelated third party for $15.75 million. The
Partnership received net proceeds of approximately $15,532,000 from the sale of
Sunol Center after deducting closing costs of approximately $161,000 and net
closing proration adjustments of approximately $57,000. As a result of the sale,
the Partnership will make a special distribution of $15,520,000, or $155.20 per
original $1,000 investment, on December 4, 1998. With the sale of Sunol Center,
the sales of the Chandler's Reach Apartments and Monterra Apartments on October
2, 1998, and the resulting reduction in distributable cash flow to be received
by the Partnership, the payment of a regular quarterly distribution will be
discontinued beginning with the quarter ending March 31, 1999. A final regular
quarterly distribution of $5.00 per original $1,000 investment, which is
equivalent to a 2% annualized rate of return on an original $1,000 investment
will be made on February 15, 1999 for the quarter ending December 31, 1998.
During the quarter ended June 30, 1998, the Partnership began exploring
potential opportunities to sell Sunol Center. As part of these efforts, the
Partnership initiated discussions with real estate firms with a strong
background in selling properties like Sunol Center. The Partnership subsequently
selected a national firm that is a leading seller of this type of property.
Preliminary sales materials were prepared and initial marketing efforts were
undertaken. A marketing package was then finalized and comprehensive sale
efforts began in June 1998. As a result of those efforts, several offers were
received. After completing an evaluation of these offers and the relative
strength of the prospective purchasers, the Partnership selected an offer. A
purchase and sale agreement was negotiated with an unrelated third-party
prospective buyer on September 21, 1998 and a non-refundable deposit of $750,000
was made on October 21, 1998. This prospective buyer completed its due diligence
work in early November and closed on the transaction on November 20, 1998, as
described above.
ITEM 7 - Financial Statements and Exhibits
(a) Financial Statements: None
(b) Exhibits:
(1)Joint Escrow Instructions and Purchase and Sale Agreement by and between
Sunol Center Associates and CFSC Capital Corp, LIV, dated September 21,
1998.
(2)Letter Agreement Regarding Extension of Inspection Periods by and
between CFSC Capital Corp. LIV, PaineWebber Mortgage Partners Five, LP,
Hacienda Park Associates and Sunol Center Associates, dated October 9,
1998.
(3)Letter Agreement Regarding Further Extension of Inspection Periods by
and between CFSC Capital Corp. LIV, PaineWebber Mortgage Partners Five,
LP, Hacienda Park Associates and Sunol Center Associates, dated October
14, 1998.
(4)Letter Agreement Regarding Further Extension of Inspection Period by
and between CFSC Capital Corp. LIV, and Sunol Center Associates, dated
October 21, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
(5)Letter Agreement Regarding Further Extension of Closing Date by and
between CFSC Capital Corp. LIV and Sunol Center Associates, dated
November 17, 1998.
(6)Assignment and Assumption Agreement by and between CFSC Capital Corp. LIV
and Crosstown Ventures I LLC, dated November 20, 1998.
(7)Grant Deed by Sunol Center Associates to Crosstown Ventures I, LLC, dated
November 20, 1998.
(8)Bill of Sale by and from Sunol Center Associates to Crosstown Ventures I,
LLC, dated November 20, 1998.
(9)Assignment of Contracts and Assumption Agreement by and between Sunol
Center Associates and Crosstown Ventures I, LLC, dated November 20, 1998.
(10)Assignment of Tenant Leases and Assumption Agreement by and between
Sunol Center Associates and Crosstown Ventures I, LLC, dated November
20,1998.
(11)Estimated Escrow Settlement Statement for the account of Sunol Center
Associates, dated November 20, 1998.
<PAGE>
FORM 8-K
CURRENT REPORT
PAINEWEBBER EQUITY PARTNERS ONE LIMITED PARTNERSHIP
SIGNATURE
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.
PAINEWEBBER EQUITY PARTNERS
ONE LIMITED PARTNERSHIP
(Registrant)
By: First Equity Partners, Inc.
By: /s/ Walter V. Arnold
--------------------
Walter V. Arnold
Senior Vice President and
Chief Financial Officer
Date: December 4, 1998
<PAGE>
JOINT ESCROW INSTRUCTIONS
AND
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
SUNOL CENTER ASSOCIATES (SELLER)
AND
CFSC CAPITAL CORP. LIV (BUYER)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.....................................................1
ARTICLE 2 PURCHASE AND SALE...............................................2
ARTICLE 3 ESCROW INSTRUCTIONS; PURCHASE PRICE; DEPOSIT;
ADJUSTMENTS..............................................2
ARTICLE 4 PRECLOSING OPERATION............................................6
ARTICLE 5 ACCESS, INSPECTION, DILIGENCE...................................7
ARTICLE 6 TITLE, SURVEY, CONDITIONS, REPRESENTATIONS
AND ASSIGNMENT OF CLAIMS................................12
ARTICLE 7 CONDITIONS PRECEDENT AND CLOSE OF ESCROW.......................15
ARTICLE 8 CASUALTY AND CONDEMNATION......................................18
ARTICLE 9 BROKERAGE COMMISSIONS..........................................19
ARTICLE 10 DEFAULT, TERMINATION AND REMEDIES..............................20
ARTICLE 11 MISCELLANEOUS..................................................21
ARTICLE 12 IRS FORM 1099-S DESIGNATION....................................25
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 Bill of Sale
SCHEDULE F Form of Assignment of Lease
SCHEDULE G Form of Assignment of Contracts
SCHEDULE H 1099 Designation Agreement
<PAGE>
Purchase and Sale Agreement
This Joint Escrow Instructions and Purchase and Sale Agreement (this
Agreement) is entered into as of the 21st day of September, 1998 by and between
Seller and Buyer, upon the following terms and conditions:
WHEREAS, Seller desires to sell and Buyer desires to purchase, the
Property (hereinafter defined) on the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual undertakings, covenants and
agreements contained herein, and other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1
DEFINITIONS
References in this Agreement to the following terms shall have the
following meanings:
BUYER: CFSC CAPITAL CORP. LIV, a Delaware corporation, or its
- ----- assignee pursuant to Section 11.1
SELLER: Sunol Center Associates, a California general
- ------ partnership
PROPERTY: The Real Property and Personal Property
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REAL PROPERTY: The land described in Schedule A attached hereto and
- ------------- the buildings, structures, improvements and fixtures
now located thereon (except the Tenants property)
(collectively, the Improvements) operating permits,
rights of way, easements, entitlements, privileges and
appurtenances thereto and the rights appurtenant
thereto
PERSONAL PROPERTY: The personal and intangible property, if any,
- ----------------- described in Schedule B attached hereto
PURCHASE PRICE: $16,500,000.00
- --------------
ESCROW HOLDER AND
TITLE COMPANY: First American Title Guaranty Company
- -------------
ARTICLE 2
PURCHASE AND SALE
2.1 The Seller hereby agrees to sell and convey the Property to the Buyer
and the Buyer hereby agrees to buy the Property and pay the Purchase Price on
the terms and conditions contained herein.
2.2 Reference is made to the Joint Escrow Instructions and Purchase and
Sale Agreement by and between the Buyer and PaineWebber Mortgage Partners Five,
L.P. dated as of the date hereof and the two Joint Escrow Instructions and
Purchase and Sale Agreements by and between the Buyer and Hacienda Park
Associates dated as of the date hereof (one regarding Gibraltar Center, one
regarding Saratoga Center) (collectively the Purchase and Sale Agreements each a
Purchase and Sale Agreement). Buyer and Seller agree that if either of the
Purchase and Sale Agreements is terminated for any reason whatsoever, this
Agreement shall automatically be terminated without any further action by either
party and without further recourse to either party (except to the extent such
recourse arises in connection with a provision of this Agreement which is
intended to survive termination). A default by the buyer under any of the
Purchase and Sale Agreements shall be considered a default of the Buyer under
this Agreement. A default by the seller under any of the Purchase and Sale
Agreements shall be considered a default of the Seller under this Agreement.
ARTICLE 3 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 Two Hundred Fifty Thousand Dollars and NO/100
($250,000.00) in immediately available funds to be held in an interest bearing
account (together with any earned interest the Escrowed Amount) to secure the
Buyers obligations under this Agreement. Upon the expiration of the Inspection
Period (as hereinafter defined) the Buyer shall deposit with the Escrow Holder
the sum of Seven Hundred Fifty Thousand Dollars and NO/100 ($750,000.00) in
immediately available funds to be held in an interest bearing account (the
Additional Deposit). All references in this Agreement to the Escrowed Amount
shall be considered to include the Additional Deposit and any interest earned
thereon after the Additional Deposit is deposited with the Escrow Holder.
Promptly following the execution hereof the Buyer shall deliver a completed and
executed W-9 form to the Escrow Holder.
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 Holders 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 this Agreement unless otherwise expressly set forth therein.
Buyer shall pay all escrow fees, if any.
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. In no event shall Seller be charged with or be responsible for
any increase in the taxes on the Property resulting from the sale of the
Property or from any improvements made or leases entered into on or after the
Closing Date. 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) (the Tax Recovery) on account of a
favorable determination resulting from a challenge, protest, appeal or similar
proceeding relating to taxes and assessments relating to the Property (a Tax
Proceeding) (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 Buyers prior
written consent; provided, however, that Seller shall be entitled to continue
its existing proceeding. Seller agrees that in the event Seller is awarded a Tax
Recovery, Seller shall pay out of that Tax Recovery any amounts due to Tenants
pursuant to provisions in the Tenants Lease providing that landlord must
distribute a portion of such Tax Recovery to the Tenant. The obligation in the
prior sentence shall survive the Close of Escrow until the Tax Proceeding is
completed and the Tax Recovery disbursed to Seller and distributed to all
Tenants as set forth in the prior sentence. In the event Seller will dissolve
before the Tax Proceeding is completed or the Tax Recovery disbursed to Seller,
Seller shall, before dissolution, assign all of Sellers rights in the Tax
Proceedings to Buyer as collateral to secure Sellers performance of the
obligation to pay amounts owing to Tenants set forth in this Section 3.4.
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; 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 deemed 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 Buyers 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 Sellers 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 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 Buyers 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) Sellers attorneys fees; and (d) 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 costs associated with obtaining
a preliminary Title Report, a title commitment and all title insurance premiums
and charges including but not limited to charges for any extended coverage or
title endorsements; (e) any and all escrow fees; and (f) Buyers attorneys fees
and all costs related to the Buyers due diligence.
3.10 All other closing costs shall be paid by Seller or Buyer in
accordance with the custom in the jurisdiction where the Property is located.
3.11 The provisions of this Article 3 shall survive the Close of Escrow.
ARTICLE 4
PRECLOSING OPERATION
4.1 A list of all current occupants of the Property is attached hereto as
Schedule C (the Rent Roll). 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.
4.2 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,
conditioned or delayed. If Buyer does not notify Seller of its denial in writing
within five (5) days after written notice thereof from Seller, Buyer shall be
deemed to have granted its consent to such requested action. Buyer shall specify
its reasons for denying consent in the denial.
4.3 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.
4.4 Seller shall make available for Buyers inspection and review at the
office of Sellers property manager all service, supply, equipment rental,
management and leasing contracts (collectively, the Contracts) affecting the
Property which Seller has in its possession. Buyer may make copies of the above
at Buyers sole cost and expense. Buyer shall, by written notice to Seller, on or
before the expiration of the Inspection Period identify any Contracts which it
will request to be terminated as of the Close of Escrow (provided such Contracts
are terminable) (the Terminated Contracts). Seller shall terminate the
Terminated Contracts at Close of Escrow at Buyers sole cost and expense and all
other Contracts shall be assigned to and assumed by Buyer at Close of Escrow.
4.5 Seller shall use commercially reasonably efforts to obtain executed
tenant estoppel certificates for each tenant of the building on the Property
(each a Tenant) on or before the expiration of the Inspection Period. The tenant
estoppel certificates shall contain the information required under the
applicable Leases, be in the form required under the applicable Leases or if no
information is listed or form required, be substantially in the form attached
hereto as Schedule D (the Tenant Estoppel Certificates). Sellers 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, Buyers sole remedy will be to elect not to proceed
with the transaction by giving written notice on or 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. In the event Seller has not obtained an executed Tenant Estoppel
Certificate from any particular Tenant, Seller may, at Sellers option,
substitute a representation and warranty from the Seller with respect to such
Tenant covering the lease matters covered in the Tenant Estoppel Certificate
(Sellers Substitute Estoppel). Buyer shall accept Sellers Substitute Estoppel as
if it were the Tenant Estoppel Certificate. If Seller later obtains the executed
Tenant Estoppel Certificate from the Tenant, Seller may substitute the Tenant
Estoppel Certificate for Sellers Substitute Estoppel. In no event shall any
Seller representation or warranty pursuant to this Section 4.5 survive the Close
of Escrow past the earlier of (i) the date of dissolution of Seller or (ii) the
date six months after the Close of Escrow.
ARTICLE 5
ACCESS, INSPECTION, DILIGENCE
5.1 During the Inspection Period (hereinafter defined), Seller agrees that
Buyer and its authorized agents or representatives shall be entitled to enter
upon the Real Property, accompanied by a representative of Seller, during normal
business hours upon advance written notice to Seller and make such reasonable,
nondestructive investigations, studies and tests including, without limitation,
surveys and engineering studies as Buyer deems necessary or advisable, provided,
however, that Buyer shall not be permitted to conduct physical testing without
Sellers prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Sellers prior written consent for physical inspections
or testing may be conditioned upon receipt of a detailed description of the
proposed physical inspection or testing, a list of contractors who will be
performing the physical inspection or testing, evidence of insurance
satisfactory to Seller as provided below, and such other information as Seller
reasonably requires in connection with such proposed inspection or testing.
5.1.1 Buyer agrees that in conducting any inspections,
investigations or tests of the Property, Buyer and its agents and
representatives shall (i) not unreasonably interfere with the operation
and maintenance of the Property, (ii) not unreasonably disturb the Tenants
or unreasonably interfere with their use of the Property pursuant to their
respective Leases, (iii) not damage any part of the Property or any
personal property owned or held by any Tenant or third party, (iv) not
injure or otherwise cause bodily harm to Seller, the property manager, or
their respective guests, agents, invitees, contractors and employees or
any tenant or their guests or invitees, (v) maintain insurance as provided
below; (vi) promptly pay when due the costs of all tests, investigations
and examinations done with regard to the Property; (vii) not permit any
liens to attach to the Real Property by reason of the exercise of Buyers
rights hereunder, (viii) fully restore the Property to the condition in
which the same was found before any such inspection or tests were
undertaken; and (ix) not reveal or disclose any information obtained
during the due diligence period concerning the Property anyone outside
Buyers organization, except in accordance with the confidentiality
standards set forth in Section 5.7 herein.
5.2 Seller shall make available to Buyer for Buyers review and inspection,
at the office of Sellers property manager, and in each case to the extent the
materials are in the Sellers possession or control, copies of all Leases,
Contracts, agreements, environmental reports, structural reports, engineering
reports, soils reports, surveys, plans and specifications, certificates of
occupancy, and litigation documentation, if any, relating to the Property and
its operation. Buyer may make copies of the above at Buyers sole cost and
expense. Seller shall cause the property manager to provide Buyer with a 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, security and other deposits, rent concessions,
and tenant improvement allowances payable after the date hereof under the
Leases, if any.
5.2.1 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.
5.2.2 As additional consideration for the transaction contemplated
herein, Buyer shall promptly deliver to Seller copies of any and all
reports, tests or studies involving structural or geologic conditions,
environmental, hazardous waste or hazardous substances contamination of
the Property and all other materials obtained in connection with Buyers
diligence, which reports, tests and studies shall be addressed to both
Buyer and Seller at no cost to Seller, provided, however, that Buyer shall
have no obligation to cause any such tests or studies to be performed on
the Property. If such reports, tests or studies indicate the existence or
reasonable potential existence of any environmental, hazardous waste or
hazardous substance contamination of any portion of the Property, Seller
may terminate this Agreement by giving written notice to Buyer within ten
(10) business days after Buyer provides Seller with copies of such
reports, tests or studies. Upon such termination, the Escrowed Amount
shall be promptly returned to Buyer and neither Buyer nor Seller shall
have any further obligation or liability to the other hereunder, except
those obligations arising under provisions of this Agreement which are
expressly intended to survive termination.
5.3 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 twenty-one (21) days
from the date of this Agreement (the Inspection Period). In the event that
Buyers due diligence shall reveal any matters which are not acceptable to Buyer
in Buyers 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 or the Title Response Period, as the case may be, the Escrowed
Amount shall become nonrefundable for any reason and shall be liquidated damages
as set forth in Section 10.2. BUYER ACKNOWLEDGES THAT, PURSUANT TO THE TERMS OF
THIS AGREEMENT, BUYER SHALL BE AFFORDED A FULL OPPORTUNITY TO INSPECT THE
PROPERTY, OBSERVE ITS PHYSICAL CHARACTERISTICS AND EXISTING CONDITIONS AND
CONDUCT SUCH INVESTIGATIONS AND STUDIES ON AND OF SAID PROPERTY AS IT DEEMS
NECESSARY AND THAT, UNLESS BUYER TERMINATES THIS AGREEMENT PURSUANT TO THIS
SECTION 5.3 BUYER SHALL BE DEEMED TO HAVE WAIVED ON THE EXPIRATION OF THE
INSPECTION PERIOD ANY AND ALL OBJECTIONS TO OR COMPLAINTS REGARDING (INCLUDING,
BUT NOT LIMITED TO, FEDERAL, STATE OR COMMON LAW BASED ACTIONS AND ANY PRIVATE
RIGHT OF ACTION UNDER STATE AND FEDERAL LAW TO WHICH THE PROPERTY IS OR MAY BE
SUBJECT, INCLUDING BUT NOT LIMITED TO, CERCLA AND RCRA) PHYSICAL CHARACTERISTICS
AND EXISTING CONDITIONS, INCLUDING, WITHOUT LIMITATION, STRUCTURAL AND GEOLOGIC
CONDITIONS, SUBSURFACE SOIL AND WATER CONDITIONS AND SOLID AND HAZARDOUS WASTE
AND HAZARDOUS SUBSTANCES ON, UNDER, ADJACENT TO OR OTHERWISE AFFECTING THE
PROPERTY. BUYER FURTHER HEREBY ASSUMES THE RISK OF CHANGES IN APPLICABLE LAWS
AND REGULATIONS RELATING TO PAST, PRESENT AND FUTURE ENVIRONMENTAL CONDITIONS ON
THE PROPERTY AND THE RISK THAT ADVERSE PHYSICAL CHARACTERISTICS AND CONDITIONS,
INCLUDING, WITHOUT LIMITATION, THE PRESENCE OF HAZARDOUS SUBSTANCES OR OTHER
CONTAMINANTS, MAY NOT HAVE BEEN REVEALED BY ITS INVESTIGATION.
5.4 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 which survive Close of Escrow hereunder. 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 ANY OTHER GUARANTEE, REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PORTION OF THE PROPERTY (OR
ANY PART THEREOF). 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 (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, 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; 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.
5.5 SELLER AND ITS PROPERTY MANAGER ARE HEREBY RELEASED FROM ALL
RESPONSIBILITY AND LIABILITY REGARDING THE VALUATION, SALABILITY OR UTILITY OF
THE PROPERTY, OR ITS SUITABILITY FOR ANY PURPOSE WHATSOEVER. BUYER ACKNOWLEDGES
THAT ANY INFORMATION OF ANY TYPE WHICH BUYER HAS RECEIVED OR MAY RECEIVE FROM
SELLER, ITS PROPERTY MANAGER OR THEIR RESPECTIVE AGENTS, INCLUDING, WITHOUT
LIMITATION, ANY ENVIRONMENTAL REPORTS AND SURVEYS, IS FURNISHED ON THE EXPRESS
CONDITION THAT BUYER SHALL MAKE AN INDEPENDENT VERIFICATION OF THE ACCURACY OF
SUCH INFORMATION, ALL SUCH INFORMATION BEING FURNISHED WITHOUT ANY WARRANTY
WHATSOEVER. THE PROVISIONS OF THIS SECTION 5.5 SHALL SURVIVE CLOSE OF ESCROW.
5.6 If this Agreement is terminated for any reason whatsoever, Buyer shall
promptly deliver to Seller all documents, plans, surveys, Contracts, Leases,
agreements, materials and the like delivered to Buyer or Buyers agents,
representatives or designees by Seller or Sellers agents, representatives or
employees pursuant to this Agreement. The return of the Escrowed Amount to Buyer
under this Agreement shall be contingent upon Buyers fulfillment of the
obligations under this Section 5.6. Buyers obligations under this Section 5.6
shall be deemed fulfilled if Buyer returns all documents, plans, surveys,
Contracts, Leases, agreements, materials and the like as provided in this
Section 5.6 and provides a certificate certifying that all such materials have
been returned.
5.7 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 Sellers 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 Securities and
Exchange Commission 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. 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.
5.8 If any inspection or test 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 Buyers investigations under
Section 5.1.
ARTICLE 6
TITLE, SURVEY, CONDITIONS, REPRESENTATIONS
AND ASSIGNMENT OF CLAIMS
6.1 Promptly following the execution of this Agreement, Seller shall
provide Buyer, at Buyers sole cost and expense, with an ALTA as-built survey of
the Real Property. Promptly following the execution of this Agreement, Seller
shall provide Buyer with, at Buyers sole cost and expense, a preliminary Title
Report (the Title Report).
If (i) any matter disclosed on the Survey or (ii) matters listed as
exceptions in the Title Report 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), Buyers 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 Tenants rights. Seller shall not be obligated to cure any
objections. 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.
6.2 On the Escrow Closing Date, the Seller shall convey by good and
sufficient grant deed to the Buyer or to the Buyers 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 Report and Survey which (i) have
not been objected to or (ii) have been objected to but 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 date of the Title Report which
are agreed upon or consented to by Buyer in writing.
6.3 At the Close of Escrow, the Seller shall assign without recourse the
Leases, the Contracts which are not to be terminated and the warranties, if any,
to Buyer and Buyer shall assume Sellers obligations thereunder from and after
the date of Close of Escrow. Seller shall convey the Personal Property to the
Buyer by quitclaim bill of sale.
6.4 Representations and Warranties
6.4.1 The Seller hereby represents and warrants to the Buyer as of
the date of this Agreement as follows:
(a) The Seller is a general partnership validly existing under the
laws of 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 action
on the part 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) 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.
6.4.2 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 Delaware 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.
6.4.3 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.
6.5 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.
ARTICLE 7
CONDITIONS PRECEDENT AND CLOSE OF ESCROW
7.1 In addition to any other conditions precedent in favor of Buyer as may
be set forth elsewhere in this Agreement, Buyers obligations under this
Agreement are expressly subject to the timely fulfillment of the conditions set
forth in this Section 7.1 on or before the Escrow Closing Date, or such earlier
date as is set forth below. Each condition may be waived in whole or in part
only by written notice of such waiver from Buyer to Seller.
7.1.1 Seller performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Seller prior to or at the Close of Escrow; and
7.1.2 The other sellers under the Purchase and Sale Agreements
performing and complying in all material respects with all of the terms of
the respective Purchase and Sale Agreement to be performed and complied
with by such seller prior to the Close of Escrow under such Purchase and
Sale Agreement.
Notwithstanding the foregoing, if the conditions set forth in this Section
7.1 or any other condition of Close of Escrow (other than an obligation of Buyer
under Section 7.2 below) shall not have been fulfilled on or before the Escrow
Closing Date, Seller shall have the right (in its sole discretion), exercisable
by written notice to Buyer at or before the Close of Escrow, to extend the
Escrow Closing Date for a period of up to forty-five (45) days to provide
additional time for the fulfillment of such conditions not to extend past
December 15, 1998. If Buyers conditions as set forth in this Section 7.1 have
not been met as of the Escrow Closing Date (as the same may be extended as
aforesaid) then Buyer shall have the right to terminate this Agreement by
written notice to Seller, and upon receipt of such notice Seller shall direct
the Escrow Holder to return the Escrowed Amount to Buyer and this Agreement
shall thereupon terminate and be of no further force or effect.
7.2 In addition to any other conditions precedent in favor of Seller as
may be set forth elsewhere in this Agreement, Sellers obligations under this
Agreement are expressly subject to the timely fulfillment of the conditions set
forth in this Section 7.2 on or before the Escrow Closing Date, or such earlier
date as is set forth below. Each condition may be waived in whole or part only
by written notice of such waiver from Seller to Buyer.
7.2.1 Buyer performing and complying in all material respects with
all of the terms of this Agreement to be performed and complied with by
Buyer prior to or at the Close of Escrow, including, without limitation,
payment by the Buyer of the Purchase Price (as adjusted as otherwise
provided herein); and
7.2.2 The other buyers under the Purchase and Sale Agreements
performing and complying in all material respects with all of the terms of
the respective Purchase and Sale Agreement to be performed by such buyer
prior to the Close of Escrow under such Purchase and Sale Agreement; and
7.2.3 On the Escrow Closing Date, all of the representations of
Buyer set forth in this Agreement shall continue to be true, accurate and
complete.
7.3 The consummation of the purchase and sale contemplated in this
Agreement (the Close of Escrow) shall occur in the offices of the Escrow Holder
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 Alameda County
Recorders Office 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
extended or the place of the Close of Escrow may be changed by mutual written
agreement of Buyer and Seller.
7.4 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 to the Buyer;
(b) Two duly executed quitclaim bills of sale conveying the Personal
Property to the Buyer in the form of SCHEDULE E attached hereto and
incorporated herein (the Bill of Sale);
(c) Two duly executed assignment and assumption of Leases without
recourse in the form of SCHEDULE F attached hereto and incorporated herein
(the Assignment of Leases);
(d) Two duly executed assignment and assumption of Contracts and
warranties, if any, without recourse in the form of SCHEDULE G attached
hereto and incorporated herein (the Assignment of Contracts);
(e) A certificate of non-foreign status from the Seller for both
federal and California tax law purposes reasonably acceptable to Buyer and
Title Company in form and substance;
(f) Three counterpart originals of the 1099 Designation Agreement in
the form of SCHEDULE H attached hereto and incorporated herein (the 1099
Designation Agreement);
(g) Two counterpart originals of the closing statement (may be
facsimiles) 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 mechanics or materialmens' liens from the Buyers title
policy and such other affidavits relating to such title policy as the
Title Company may reasonably request;
(i) An updated Rent Roll certified by Seller or the property manager
as true and correct as of the Escrow Closing Date;
(j) Original executed Tenant Estoppel Certificates;
(k) All original Leases, Contracts, property management files and
Tenant correspondence, in each case if in Sellers possession;
(l) Keys to all locks which the property manager has in its
possession;
(m) Notice letters from Seller to Tenants of the sale of the
Property, the assignment of the Leases, the notice of transfer of security
deposit, the transfer of claims made with regard to the security deposit
and the transferees name and address;
(n) Such evidence or documents as may reasonably be required by the
Escrow Holder or Buyer evidencing the status and capacity of Seller and
the Authority of the person or persons who are executing the various
documents on behalf of Seller in connection with the sale of the Property;
and
(o) Such other instruments as the Escrow Holder may reasonably
request to effectuate the transaction contemplated by this Agreement;
7.5 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) Such evidence or documents as may reasonably be required by the
Escrow Holder or Seller evidencing the status and capacity of Buyer and the
Authority of the person or persons who are executing the various documents on
behalf of Buyer in connection with the purchase of the Property;
(e) Such other instruments as the Escrow Holder may reasonably
request to effectuate the transaction contemplated by this Agreement;
(f) Three counterpart originals of the 1099 Designation Agreement;
and
(g) Two counterpart originals of the Closing Statement.
7.6 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
Alameda 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 a title insurance policy to Buyer.
(d) Deliver one original executed Bill of Sale, Assignment of
Leases, Assignment of Contracts, 1099 Designation Agreement (after
executing the same) and Closing Statement to each of Buyer and Seller.
(e) Deliver the certificate of non-foreign status from the Seller,
the Tenant Estoppel Certificates, the Leases, the Tenant correspondence,
the keys, and the notice letters to the Buyer.
(f) Deliver to both Buyer and Seller copies of all other documents
delivered by either party or recorded pursuant to this Agreement.
ARTICLE 8
CASUALTY AND CONDEMNATION
8.1 If the Improvements are materially damaged or destroyed by fire or any
other casualty 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).
8.2 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 Sellers 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 9
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 CB Richard Ellis Inc. (Seller's Agent), and no finders
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 attorneys 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. Seller agrees to pay all
commissions due to Sellers Agent or to any other party retained by Seller,
except as this Agreement explicitly provides otherwise, in connection with the
transaction contemplated by this Agreement but only if the transaction
contemplated herein is consummated.
ARTICLE 10
DEFAULT, TERMINATION AND REMEDIES
10.1 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 Sellers 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.
10.2 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 BUYERS DEFAULT UNDER THE
AGREEMENT, OR IF EITHER OF THE TRANSACTIONS OR BOTH THE TRANSACTIONS
CONTEMPLATED UNDER THE PURCHASE AND SALE AGREEMENTS ARE NOT CONSUMMATED DUE TO
BUYERS DEFAULT, SELLER SHALL BE ENTITLED TO RETAIN THE ESCROWED AMOUNT AS
SELLERS 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 BUYERS 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 BUYERS DEFAULT AFTER
THE EXPIRATION OF THE INSPECTION PERIOD, OR THE TITLE RESPONSE PERIOD, AS THE
CASE MAY BE, PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT WAIVE OR AFFECT
SELLERS RIGHTS AND BUYERS OBLIGATIONS UNDER SECTION 5.8 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 ___________ BUYER'S INITIALS __________________
10.2.1 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
11.1 Buyer may not assign or transfer its rights under this Agreement
without Sellers prior written consent, which may be withheld in Sellers sole
discretion. Any attempted assignment without the prior written consent of Seller
shall be void and deemed a default of Buyer hereunder. Any permitted assignment
shall not relieve the assigning party from any liability under this Agreement.
Notwithstanding the foregoing, upon fifteen (15) days prior written notice, CFSC
CAPITAL CORP. LIV may assign its interest in this Agreement to (i) a
corporation, partnership, or limited liability company in which CFSC CAPITAL
CORP. LIV or CFSC CAPITAL CORP. LIV's principals maintain a controlling
interest, (ii) an intermediary in connection with Cargill Inc.'s Section 1031
Exchange, or (iii) Cargill Inc. or any entity owned or controlled by Cargill
Inc. (a Cargill Affiliate), or (iv) any entity owned or controlled by Cargill
Inc. and Ellis Partners Inc. or by a Cargill Affiliate and Ellis Partners Inc.
11.2 Buyer and Seller acknowledge that either party may desire to
structure the sale and/or purchase of the Property as an exchange for like-kind
property pursuant to Section 1031 of the Internal Revenue Code of 1986, as
amended, in order to defer recognition of income from the disposition of the
Property or other properties. Buyer and Seller agree to reasonably cooperate
with each other to accomplish such exchange(s) and agree that any and all costs
associated with said exchange(s) shall be borne solely by the exchanging party
and shall in no way be attributable to the non-exchanging party. In no event
shall the non-exchanging party be required to take title to the exchanged
property(ies) to effectuate the tax deferred exchange contemplated in this
Section 11.2. In no event shall cooperation in an exchange require either party
to delay the Close of Escrow provided for in this Agreement.
11.3 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 (i) when delivered by hand during regular business hours, (ii)
when received if sent by telecopy during regular business hours with an original
sent by regular mail, (iii) three (3) days after being sent by United States
Postal Service, registered or certified mail, postage prepaid, return receipt
requested, or (iv) on the next business day when 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.
<PAGE>
(1) If to Buyer:
CFSC CAPITAL CORP. LIV
6000 Clearwater Drive
Minnetonka, MN 55343
Attn: Timothy S. Clark
Fax No.: (612) 984-3905
with a copy to:
Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94194
Attn: Harold A. Ellis, Jr.
Fax No.: (415) 391-4711
and
Freed & Heinemann LLP
One Jackson Place
633 Battery Street, Suite 620
San Francisco, CA 9411
Attn: Peter Heinemann, Esq.
Fax No.: (415) 988-0999
(2) If to Seller:
Sunol Center Associates
c/o PaineWebber Properties Incorporated
265 Franklin Street - 15th Floor
Boston, MA 02110
Attn: Richard Coomber
Fax No.: (617) 345-8752
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:
First American Title Guaranty Company
345 California Street, Suite 1650
San Francisco, CA 94104
Attn: Beatrice Cherene
Fax No.: (415) 398-5446
11.4 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.
11.5 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.
11.6 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.
11.7 This Agreement may be amended only by a written instrument executed
by the Seller and the Buyer.
11.8 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.
11.9 This Agreement shall be construed under and in accordance with the
laws of the State of California.
11.10 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.
11.11 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, 6.1 and 7.1 and Article 8 above.
11.12 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 Holders acts or failure to act hereunder,
unless caused or created as a result of Escrow Holders 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 Holders 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.
11.13 Time is expressly declared to be of the essence of this Agreement.
11.14 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.
11.15 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, 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, Sellers Substitute Estoppel pursuant to Section 4.5,
Sellers representations and warranties pursuant to Section 6.4.1 and Sellers
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.
11.16 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
ARTICLE 12
IRS FORM 1099-S DESIGNATION
12.1 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 H 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.
[The remainder of this 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:
CFSC CAPITAL CORP. LIV, a Delaware
corporation
By: /s/ Timothy S. Clark
---------------------
Name: Timothy S. Clark
Title: Vice President
SELLER:
SUNOL CENTER ASSOCIATES, a California
general partnership
By: PaineWebber Equity Partners One
Limited Partnership, its joint
venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
October 9, 1998
VIA FACSIMILE
Mr. Harold Ellis, Jr.
Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94101
Mr. Timothy Clark
Cargill Inc.
6000 Clearwater Drive
Minnetonka, MN 55343-9497
Peter Heinemann, Esq.
Freed & Heinemann LLP
One Jackson Place
633 Battery Street, Suite 620
San Francisco, CA 94111
RE: Hacienda Office Portfolio, Sunnyvale, California
Gentlemen:
Reference is made to the Joint Escrow Instructions and Purchase and Sale
Agreement by and between CFSC CAPITAL CORP. LIV (the Buyer) and PaineWebber
Mortgage Partners Five, L.P., the Joint Escrow Instructions and Purchase and
Sale Agreement by and between Buyer and Hacienda Park Associates (regarding
Gibraltar Center), the Joint Escrow Instructions and Purchase and Sale Agreement
by and between Buyer and Hacienda Park Associates (regarding Saratoga Center),
and the Joint Escrow Instructions and Purchase and Sale Agreement by and between
Buyer and Sunol Center Associates (PaineWebber Mortgage Partners Five, L.P.,
Hacienda Park Associates and Sunol Center Associates shall be collectively known
herein as the Sellers) all dated as of September 21, 1998 (collectively the
Purchase Agreements). All capitalized terms not defined herein shall have the
meaning ascribed to them in the Purchase Agreements. At the request of the
Buyer, the Sellers hereby agree to extend the Inspection Periods under each of
the Purchase Agreements until 5:00 pm eastern time Wednesday, October 14, 1998.
All other terms and provisions of the Purchase Agreements are hereby
ratified and confirmed.
Please sign this letter on the counterpart signature line provided below
and fax a copy of the signed letter to the attention of Rita M. Schwantes at
(617) 227-8591 by no later than 5:00 pm eastern time Friday, October 9, 1998 and
forward an original signed letter to Rita M. Schwantes at Goodwin, Procter &
Hoar LLP, Exchange Place, Boston, MA 02109 by overnight mail to arrive no later
than Monday, October 12, 1998. If a signed copy of this letter is not received
by facsimile by 5:00 pm eastern time on Friday, October 9, 1998 and an original
signed letter is not received by Monday, October 12, 1998, this letter shall be
automatically rendered void and without any force or effect and the Sellers'
offer to extend the Inspection Periods shall be automatically revoked.
<PAGE>
SELLERS:
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.,
a Delaware limited partnership
By: Fifth Mortgage Partners, Inc., its
general partner
By: /s/ Richard S. Coomber
------------------
Name: Richard S. Coomber
Title: Vice President
HACIENDA PARK ASSOCIATES, a
California general partnership
By: PaineWebber Equity Partners Two
Limited Partnership, its joint
venturer
By: Second Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: Second Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
SUNOL CENTER ASSOCIATES, a
California general partnership
By: PaineWebber Equity Partners One
Limited Partnership, its joint
venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED TO:
BUYER:
CFSC CAPITAL CORP. LIV, a Delaware corporation
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
cc: Mr. Richard Coomber
Mr. Mark Dunne
Mr. Peter Sullivan
Andrew C. Sucoff, Esq.
<PAGE>
October 14, 1998
VIA FACSIMILE
Mr. Harold Ellis, Jr.
Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94101
Mr. Timothy Clark
Cargill Inc.
6000 Clearwater Drive
Minnetonka, MN 55343-9497
Peter Heinemann, Esq.
Freed & Heinemann LLP
One Jackson Place
633 Battery Street, Suite 620
San Francisco, CA 94111
RE: Hacienda Office Portfolio, Sunnyvale, California
Gentlemen:
Reference is made to the Joint Escrow Instructions and Purchase and Sale
Agreement by and between CFSC CAPITAL CORP. LIV (the Buyer) and PaineWebber
Mortgage Partners Five, L.P., the Joint Escrow Instructions and Purchase and
Sale Agreement by and between Buyer and Hacienda Park Associates (regarding
Gibraltar Center), the Joint Escrow Instructions and Purchase and Sale Agreement
by and between Buyer and Hacienda Park Associates (regarding Saratoga Center),
and the Joint Escrow Instructions and Purchase and Sale Agreement by and between
Buyer and Sunol Center Associates (PaineWebber Mortgage Partners Five, L.P.,
Hacienda Park Associates and Sunol Center Associates shall be collectively known
herein as the Sellers) all dated as of September 21, 1998 as affected by that
certain Letter Agreement dated October 9, 1998 (collectively the Purchase
Agreements). All capitalized terms not defined herein shall have the meaning
ascribed to them in the Purchase Agreements. At the request of the Buyer, the
Sellers hereby agree to extend the Inspection Periods under each of the Purchase
Agreements until 5:00 pm eastern time Monday, October 19, 1998.
All other terms and provisions of the Purchase Agreements are hereby
ratified and confirmed.
Please sign this letter on the counterpart signature line provided below
and fax a copy of the signed letter to the attention of Rita M. Schwantes at
(617) 227-8591 by no later than 5:00 pm eastern time Wednesday, October 14, 1998
and forward an original signed letter to Rita M. Schwantes at Goodwin, Procter &
Hoar LLP, Exchange Place, Boston, MA 02109 by overnight mail to arrive no later
than Thursday, October 15, 1998. If a signed copy of this letter is not received
by facsimile by 5:00 pm eastern time on Wednesday, October 14, 1998 and an
original signed letter is not received by Thursday, October 15, 1998, this
letter shall be automatically rendered void and without any force or effect and
the Sellers' offer to extend the Inspection Periods shall be automatically
revoked.
<PAGE>
SELLERS:
PAINEWEBBER MORTGAGE PARTNERS FIVE, L.P.,
a Delaware limited partnership
By: Fifth Mortgage Partners, Inc., its
general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
HACIENDA PARK ASSOCIATES, a
California general partnership
By: PaineWebber Equity Partners Two
Limited Partnership, its joint
venturer
By: Second Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: Second Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
SUNOL CENTER ASSOCIATES, a
California general partnership
By: PaineWebber Equity Partners One
Limited Partnership, its joint
venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED TO:
BUYER:
CFSC CAPITAL CORP. LIV, a Delaware corporation
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
<PAGE>
October 21, 1998
VIA FACSIMILE
Mr. Harold Ellis, Jr.
Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94101
Mr. Timothy Clark
Cargill Inc.
6000 Clearwater Drive
Minnetonka, MN 55343-9497
Peter Heinemann, Esq.
Freed & Heinemann LLP
One Jackson Place
633 Battery Street, Suite 620
San Francisco, CA 94111
RE: Sunol Center, Pleasanton, California
Gentlemen:
Reference is made to the Joint Escrow Instructions and Purchase and Sale
Agreement by and between CFSC CAPITAL CORP. LIV (the Buyer) and Sunol Center
Associates (the Seller) dated as of September 21, 1998 as affected by that
certain Letter Agreement dated October 9, 1998 and that certain Letter Agreement
dated October 14, 1998 (collectively the Purchase Agreement) and as terminated
by notice from Buyer dated October 19, 1998 (the Termination Notice). All
capitalized terms not defined herein shall have the meaning ascribed to them in
the Purchase Agreement. Buyer and Seller hereby agree to reinstate the Purchase
Agreement as if the Termination Notice had never been delivered. Buyer and
Seller agree that the Inspection Period is deemed to have expired on October 19,
1998. Buyer acknowledges that Buyer does not object to, and waives all rights,
if any, to object to any matter listed on the Title Report and Survey. Buyer and
Seller agree that the Escrow Closing Date as defined in the Purchase Agreement
is hereby amended to be thirty (30) days after the expiration of the Inspection
Period, including the date of expiration of the Inspection Period, which date is
November 17, 1998. Buyer and Seller agree that the Purchase Price as defined in
the Purchase Agreement is hereby amended to be $15,750,000.00.
Contemporaneously with the execution hereof Buyer is depositing with the
Title Company $750,000.00, as set forth in Section 3.2 of the Purchase
Agreement.
All other terms and provisions of the Purchase Agreement are hereby
ratified and confirmed.
This agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one and the same agreement.
Please sign this letter on the counterpart signature line provided below
and fax a copy of the signed letter to the attention of Rita M. Schwantes at
(617) 227-8591 by no later than 5:00 pm eastern time Wednesday, October 21, 1998
and forward an original signed letter to Rita M. Schwantes at Goodwin, Procter &
Hoar LLP, Exchange Place, Boston, MA 02109 by overnight mail to arrive no later
than Thursday, October 22, 1998. If a signed copy of this letter is not received
by facsimile by 5:00 pm eastern time on Wednesday, October 21, 1998, an original
signed letter is not received by Thursday, October 22, 1998 and the deposit
referred to above is not deposited with the Title Company by 5:00 pm eastern
time Wednesday, October 21, 1998, this letter shall be automatically rendered
void and without any force or effect and the Seller's offer to reinstate the
Purchase Agreement, on the terms herein or otherwise, shall be automatically
revoked. This agreement is contingent upon the execution of the reinstatement
agreements for the other Purchase and Sale Agreements.
[The remainder of this page intentionally left blank]
<PAGE>
SELLER:
SUNOL CENTER ASSOCIATES, a California
general partnership
By: PaineWebber Equity Partners One
Limited Partnership, its joint
venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED TO:
BUYER:
CFSC CAPITAL CORP. LIV, a Delaware corporation
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
<PAGE>
November 17, 1998
VIA FACSIMILE
Mr. Harold Ellis, Jr.
Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94101
Mr. Timothy Clark
Cargill Inc.
6000 Clearwater Drive
Minnetonka, MN 55343-9497
Peter Heinemann, Esq.
Freed & Heinemann LLP
One Jackson Place
633 Battery Street, Suite 620
San Francisco, CA 94111
RE: Sunol Center, Pleasanton, California
Gentlemen:
Reference is made to the Joint Escrow Instructions and Purchase and Sale
Agreement by and between CFSC CAPITAL CORP. LIV (the Buyer) and Sunol Center
Associates (the Seller) dated as of September 21, 1998 as affected by that
certain Letter Agreement dated October 9, 1998 and that certain Letter Agreement
dated October 14, 1998 and that certain Letter Agreement dated October 21, 1998
(collectively the Purchase Agreement). All capitalized terms not defined herein
shall have the meaning ascribed to them in the Purchase Agreement. At the
request of Buyer, Buyer and Seller agree that the Purchase Agreement is hereby
amended to provide that the Close of Escrow shall occur in the offices of the
Escrow Holder at 10:00 a.m. Friday, November 20, 1998 (the Escrow Closing Date).
All other terms and provisions of the Purchase Agreement are hereby
ratified and confirmed.
This agreement may be executed in counterparts, each of which shall be an
original, but all of which shall constitute one and the same agreement.
Please sign this letter on the counterpart signature line provided
below and fax a copy of the signed letter to the attention of Rita M. Schwantes
at (617) 227-8591 by no later than 5:00 pm eastern time Tuesday, November 17,
1998 and forward an original signed letter to Rita M. Schwantes at Goodwin,
Procter & Hoar LLP, Exchange Place, Boston, MA 02109 by overnight mail to arrive
no later than Wednesday, November 18, 1998. If a signed copy of this letter is
not received by facsimile by 5:00 pm eastern time on Tuesday, November 17, 1998,
an original signed letter is not received by Wednesday, November 18, 1998, this
letter shall be automatically rendered void and without any force or effect and
the Seller's offer to change the Escrow Closing Date shall be automatically
revoked. This agreement is contingent upon the execution of the letter
agreements extending the Escrow Closing Date for the other Purchase and Sale
Agreements.
[The remainder of this page intentionally left blank]
<PAGE>
SELLER:
SUNOL CENTER ASSOCIATES, a California
general partnership
By: PaineWebber Equity Partners One
Limited Partnership, its joint
venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its
joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
ACKNOWLEDGED AND AGREED TO:
BUYER:
CFSC CAPITAL CORP. LIV, a Delaware corporation
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
<PAGE>
ASSIGNMENT AND ASSUMPTION AGREEMENT
CFSC Capital Corp. LIV/Crosstown Ventures I, LLC
Sunol Center
Pleasanton, California
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Assignment"), entered into as
of November 20, 1998, by and between CFSC CAPITAL CORP. LIV, a Delaware
corporation ("Assignor"), and CROSSTOWN VENTURES I, LLC, a Delaware limited
liability company ("Assignee"), is made with respect to the following facts:
RECITAL:
A. Assignor is party to that certain Joint Escrow Instructions and
Purchase and Sale Agreement by and between Sunol Center Associates, a California
general partnership, as seller ("Seller") and Assignor, as buyer ("Buyer"),
dated as of September 21, 1998, as amended by those certain Letter Agreements
dated October 9, 1998, October 14, 1998, and October 21, 1998, with respect to
the sale and purchase of certain real estate commonly known as Sunol Center and
located at 5669, 56781, 5673 and 5675 Gibraltar Drive, City of Pleasanton,
Alameda County, California, as more particularly described therein (as amended,
the "Agreement").
B. As contemplated by the Agreement, Assignor has elected to assign
all of its right, title, interest and obligations under the Agreement to
Assignee. Assignee is a limited liability company in which Buyer's principals
maintain a controlling interest, in compliance with Section 11.1(I) of the
Agreement, and is an entity owned or controlled by Cargill, Inc. pursuant to
Section 11.1 clause (iv) of the Agreement.
NOW, THEREFORE, for and in consideration of the Recitals, which are
intended to be a part of this Assignment, and for other good and valuable
consideration, the receipt and sufficiently of which is hereby acknowledged by
the parties hereto, the parties hereto hereby agree as follows:
AGREEMENT
1. Effective upon the execution and delivery of this Assignment,
Assignor hereby assigns to Assignee all of its right, title, interest and
obligations under the Agreement. Upon close of the escrow contemplated by the
Agreement and assumption by Assignee, Assignor shall have no further rights,
title, interests, obligations, duties or continuing liability under the
Agreement.
2. Assignee hereby assumes all of the duties and obligations of
Assignor under or otherwise pertaining to the Agreement.
3. This Assignment may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall be one and
the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement as of the
date first written above.
ASSIGNOR: ASSIGNEE:
CFSC CAPITAL CORP. LIV, CROSSTOWN VENTURES I, LLC,
a Delaware corporation a Delaware limited liability company
By: CFSC Capital Corp. LIV,
By: /s/ Timothy S. Clark a Delaware Corporation,
-------------------- its Manager
Name: Timothy S. Clark
Title: Vice President
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
RECEIPT ACKNOWLEDGED AS OF
DATE OF THE AGREEMENT:
SUNOL CENTER ASSOCIATES,
a California general partnership
By: PaineWebber Equity Partners One Limited
Partnership, its joint venturer
By: First Equity Partners, Inc.,
its managing general partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
WHEN RECORDED MAIL THIS DEED TO:
Crosstown Ventures I, LLC
c/o CFSC Capital Corp. LIV
6000 Clearwater Drive
Minnetonka, MN 55343
Attn: Jon Lammers, Esq.
MAIL TAX STATEMENTS TO:
Crosstown Ventures I, LLC
c/o Ellis Partners, Inc.
433 California Street, Suite 610
San Francisco, CA 94104
Attn: Melinda Ellis Evers
TITLE ORDER NO.
ESCROW NO.
- ------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDERS USE
GRANT DEED
THE UNDERSIGNED GRANTOR DECLARES
DOCUMENTARY TRANSFER TAX is not of public record and is shown on a separate
sheet attached to this deed
AND
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
Sunol Center Associates, a California general partnership (Grantor)
hereby GRANTS to
Crosstown Ventures I, LLC, a Delaware limited liability company (Grantee)
the following described real property in the City of Pleasanton, County of
Alameda, State of California:
See Exhibit A attached hereto and incorporated herein by this reference (the
Real Property). The conveyance hereunder is made subject to any and all matters
of record or apparent from an inspection or survey of the Real Property as of
the date hereof, including, without limitation, the Rider to Grantor's Deed (as
defined hereinafter). For Grantor's title see Grant Deed dated August 15, 1986
recorded August 15, 1986 as Instrument No. 86-199248 with the Alameda County
Official Records (Grantor's Deed).
Assessor's Parcel Number:
Date: November 20, 1998
<PAGE>
SUNOL CENTER ASSOCIATES,
a California general partnership
By: PaineWebber Equity Partners One Limited
Partnership, its partner
By: First Equity Partners, Inc.,
its managing partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc., its partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
Bill of Sale
FOR VALUABLE CONSIDERATION, Sunol Center Associates, a California general
partnership (Seller), hereby sells and conveys on this 20th day of November,
1998, to Crosstown Ventures I, LLC, a Delaware limited liability company
(Buyer), the following personal property located as described on Exhibit A
attached hereto:
As set forth on Exhibit B attached hereto,
subject to personal property taxes not yet due and payable.
This Bill of Sale shall bind and benefit Buyer and its successors and
assigns.
IN WITNESS WHEREOF, the undersigned has duly executed this Bill of Sale.
SELLER: SUNOL CENTER ASSOCIATES,
a California general partnership
By: PaineWebber Equity Partners One Limited
Partnership, its joint venturer
By: First Equity Partners, Inc.,
its managing partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc.,
its joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT
This ASSIGNMENT OF CONTRACTS AND ASSUMPTION AGREEMENT (this "Agreement")
is made and entered into this 20th day of November, 1998, by and between Sunol
Center Associates, a California general partnership ("Assignor"), and Crosstown
Ventures I, LLC, a Delaware limited liability company ("Assignee").
WITNESSETH:
1. Assignor, pursuant to that certain Joint Escrow Instructions and
Purchase and Sale Agreement dated as of September 21, 1998, as amended by those
certain Letter Agreements dated October 9, 1998, October 14, 1998 and October
21, 1998, and assigned pursuant to that certain Assignment and Assumption
Agreement of even date herewith, between Assignor, Assignee and First American
Title Company (collectively, the Purchase Agreement) regarding the sale of
certain property known as Sunol Center and located in Alameda County,
Pleasanton, California (the "Property"), and for good and valuable consideration
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.
2. 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; and (ii) performance to be made by
the Assignor under the Contracts. Assignee shall not have recourse to 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; and (ii) performance to be made by the Assignor under the Contracts.
3. 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).
4. 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.
IN WITNESS WHEREOF this Agreement has been executed as of the date first
above written.
ASSIGNOR: SUNOL CENTER ASSOCIATES,
a California general partnership
By: PaineWebber Equity Partners One Limited
Partnership, its joint venturer
By: First Equity Partners, Inc.,
its managing partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
By: First Equity Partners, Inc.,
its joint venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard S. Coomber
Title: Vice President
<PAGE>
IN WITNESS WHEREOF this Agreement has been executed as of the date first above
written.
ASSIGNEE: CROSSTOWN VENTURES I, LLC,
a Delaware limited liability company
By: CFSC Capital Corp. LIV, a Delaware
corporation, its Manager
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
<PAGE>
ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT OF TENANT LEASES AND ASSUMPTION AGREEMENT (the Assignment)
is executed and delivered on this 20th day of November, 1998, by and between
Sunol Center Associates, a California general partnership (Assignor) and
Crosstown Ventures I, LLC, a Delaware limited liability company (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 Alameda County, commonly known as Sunol Center and located in Pleasanton,
California (the Property), as more particularly described on Exhibit "A"
attached hereto and made a part hereof.
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:
1. 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, 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 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 obligations of the lessor
under the Assigned Leases. Assignee shall not have any recourse against Assignor
for 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.
2. The Assignee hereby acknowledges the receipt of all security deposits
under the Leases as set forth in Schedule 1 attached hereto.
3. 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 deed for the Property by Assignor to Assignee.
4. 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 as of
the date first written above.
ASSIGNOR: SUNOL CENTER ASSOCIATES,
a California general partnership
By: PaineWebber Equity Partners One Limited
Partnership, its joint venturer
By: First Equity Partners, Inc.,
its managing partner
By: /s/ Richard S. Coomber
----------------------
Name: Richard Coomber
Title: Vice President
By: First Equity Partners, Inc., its joint
venturer
By: /s/ Richard S. Coomber
----------------------
Name: Richard Coomber
Title: Vice President
IN WITNESS WHEREOF, Assignee and Assignor have executed this Assignment as
of the date first written above.
ASSIGNEE: CROSSTOWN VENTURES I, LLC,
a Delaware limited liability company
By: CFSC Capital Corp. LIV, a Delaware
corporation, its Manager
By: /s/ Timothy S. Clark
--------------------
Name: Timothy S. Clark
Title: Vice President
<PAGE>
ESTIMATED ESCROW SETTLEMENT STATEMENT FOR THE ACCOUNT OF SUNOL CENTER
ASSOCIATES, IN CONNECTION WITH THE SALE OF THE REAL PROPERTY COMMONLY KNOWS AS
"SUNOL CENTER" HACIENDA BUSINESS PARK, IN THE CITY OF PLEASANTON, COUNTY OF
ALAMEDA, STATE OF CALIFORNIA.
ESCROW NUMBER: SP28409
ESTIMATED ESCROW SETTLEMENT DATE: 20 NOVEMBER 98
DEBIT: CREDIT:
------ -------
SALES PRICE: $15,750,000.00
SECURITY DEPOSITS: $60,000.00
REIMBURSE SELLER FOR SURVEY:
($31,000.00) 7,750.00
PRORATE "EXPENSES" FROM 20 NOV 98
TO COE: 5,237.68
PRORATE RENTS FROM 20 NOV 98 TO
01 DEC 98: 47,953.95
PRORATA TAXES FROM COE TO 1-1-99:
APN 941-2763-023: 16,946.12
APN 941-2763-024: 20,414.72
PAY: C/B RICHARD ELLIS: COMMISSION 143,238.00
PAY: FIRST AMERICAN TITLE:
TRANSFER TAX: 17,325.00
PAY: SUNOL CENTER ASSOCIATES: 15,531,831.57
-------------- --------------
TOTAL: $15,800,348.52 $15,800,348.52
============== ==============
SUNOL CENTER ASSOCIATES
BY: /s/ Richard S. Coomber
----------------------
