SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 10, 1994
BEDFORD PROPERTY INVESTORS, INC.
(Exact name of Registrant as specified in its charter)
Maryland 1-12222 68-0306514
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
270 Lafayette Circle, Lafayette, California 94549
(Address of principal executive officer)
Registrant telephone number, including area code: (510) 283-8910
<PAGE>
Item 2. Acquisition or Disposition of Assets
On August 10, 1994, Bedford Property Investors, Inc. (the
Company ) completed the acquisition of Milpitas Town Center, a two-
building, 102,620 square foot industrial complex located in Milpitas,
California. Included in the purchase price is a 3.1 acre parcel of
land (zoned for future development) immediately east of the buildings.
The complex was acquired from Prudential Insurance Company of America
for $6,320,000. The seller received $5,720,000 in cash and a twelve-
month letter of credit of $600,000. The Company used funds from its
line of credit with Bank of America to purchase the complex.
Item 7. Financial Statement and Exhibits:
(A) Financial Statements
Required financial information disclosures with respect to
the acquisition of Milpitas Town Center will be filed by
amendment to this form 8-K within sixty (60) days of this
notice.
(B) Proforma Financial Information
Required proforma financial information disclosures with
respect to the acquisition of Milpitas Town Center will be
filed by amendment to this form 8-K within sixty (60) days
of this notice.
(C) Exhibits and Exhibits Index
10 Purchase Contract for Milpitas Town Center
99 Press Release regarding the acquisition in Milpitas,
California.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned, hereunto duly authorized.
BEDFORD PROPERTY INVESTORS, INC.
By:
Jay Spangenberg
Chief Financial Officer
Date: August 24, 1994
<PAGE>
CONTACT: FOR IMMEDIATE RELEASE:
Peter B. Bedford August 12, 1994
Chairman of the Board and
Chief Executive Officer
Jay Spangenberg
Chief Financial Officer
Telephone: (510) 283-8910
BEDFORD PROPERTY INVESTORS
ANNOUNCES ACQUISITION OF MILPITAS TOWN CENTER, MILPITAS, CALIFORNIA
LAFAYETTE, CA - Bedford Property Investors Chairman and Chief
Executive Officer, Peter B. Bedford announced the acquisition of two
multi-tenant industrial buildings totaling approximately 102,620
square feet in the Milpitas Town Center in Milpitas, California.
Milpitas is located 45 miles southeast of San Francisco and borders
the Silicon Valley.
The purchase closed on August 10, 1994 for $6,320,185 or $61.88 per
rentable building square foot which includes a deferred cash funding
of $600,000 due and payable in August 1995. Included in the purchase
price is a 3.1 acre parcel of land (zoned for future development)
immediately east of the buildings. The buildings are 100% leased to
four local Silicon Valley tenants. The purchase was financed using the
Company's revolving line of credit with the Bank of America. Bank of
America recently increased the line of credit commitment from $20
million to $23 million.
The Milpitas Town Center was developed in 1983 by the Prudential
Insurance Company of America. The Center is comprised of two, single-
story industrial concrete tilt-up buildings situated around a central
landscaped courtyard. The property freeway access is less than two
miles from Interstate 680 and Interstate 880, two major transportation
arteries connecting Milpitas with San Francisco and the East Bay area.
"This acquisition is important to BPI for a number of reasons"
explained Peter Bedford. "One, the buildings are in excellent
condition in an exceptionally well planned business park. Two, there
is zero lease-up risk, and three, Bedford Property Investors is buying
into a constrained market with decreasing availability due to no new
construction, and in a specific sub-market where we believe that
future competitive entries will be negligible."
With the acquisition of Milpitas Town Center, the Company's current
portfolio is comprised of seven industrial properties and five
suburban office properties with an aggregate of approximately 1.1
million rentable square feet, approximately 86% leased.
Bedford Property Investors is a self-administered equity real estate
investment trust (REIT) with investments in suburban office buildings
and industrial properties concentrated in the western United States.
It is traded on the New York and Pacific Stock Exchanges under the
symbol "BED".<PAGE>
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated this 15th day of June 1994, is made
between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Seller") and
BEDFORD PROPERTY INVESTORS, INC, a Maryland corporation ("Buyer"), who
for valuable consideration received agree as follows:
1. Purchase and Sale of Property. Seller agrees to sell and Buyer
agrees to purchase on the terms hereafter stated all of Seller's
right, title and interest in the following described property
(collectively, the "Property"):
A. Real Property. All of the land situated in Milpitas,
California commonly known as 554 & 556 Gibraltar Drive and
the adjacent unimproved parcel as more particularly
described in Exhibit A attached hereto, together with the
buildings, other improvements, fixtures and other items of
real property located on such land (the "Real Property");
B. Personal Property. All furniture, machinery, equipment and
other tangible personal property identified in Exhibit B
attached hereto (the "Personal Property");
C. Service Contracts and Intangible Property. All of
Seller's rights and interests in the service and equipment
contracts (the "Service Contracts") with respect to the
Real Property which are accepted by Buyer during the Due
Diligence Period any and all governmental licenses, permits
and approvals held by Seller and relating exclusively to
the occupancy or use of the Real Property, any and all
existing warranties held by Seller and given by third
parties with respect to the Real Property or Personal
Property, and all signs, logo and trade names, if any,
related exclusively to the use or operation of the Property
(collectively, the "Intangible Property"); and
D. Leases. All of Seller's interest as lessor in all leases
(the "Leases") of any portion of the Real Property and all
tenant and other deposits related to the Leases.
2. Purchase Price. Subject to the closing adjustments and
prorations hereafter described, Buyer shall pay to Seller as the
purchase price for the Property the sum of Six Million Three
Hundred Twenty Thousand One Hundred Eighty Five
Dollars ($6,320,185.00) (the "Purchase Price"), in the
following manner:
A. Earnest Money. Buyer and Seller acknowledge that cash in
the amount of One Hundred Thousand Dollars ($100,000.00)
(the Deposit") has previously been deposited by Buyer with
First American Title Insurance Company (the "Escrow
Holder"). Escrow Holder has placed the Deposit in an
interest bearing account, with interest to accrue for the
account of Buyer. Upon the Close of Escrow, the Deposit,
together with any interest accrued thereon, shall be
applied against the Purchase Price. Seller agrees that
until the expiration of the Due Diligence Period described
below, the Escrow Holder shall take instructions solely
from the Buyer regarding the release of the Deposit, and
Seller does hereby so instruct Escrow Holder. "Close of
Escrow" shall mean completion of this transaction by the
Escrow Holder recording the grant deed and disbursing the
funds, which completion shall occur on the Closing Date, as
defined below. Should Escrow fail to close for any reason
other than a default by Buyer in the performance of its
obligations hereunder, the entire Deposit, together with
the Additional Payment, if made, shall be returned to
Buyer, together with all interest earned thereon.
B. Cash at Closing. On or before 3:00 p.m. Pacific Standard
Time on the day before the Closing Date, Buyer shall
deposit with Escrow Holder by federal wire transfer or
cashier's check the further sum of Five Million Six Hundred
Twenty Thousand One Hundred Eighty Five Dollars
($5,620,185.00), plus or minus closing adjustments and
prorations.
C. Letter of Credit. Buyer shall deposit the original Letter
of Credit (as defined in Paragraph 2.D hereof) in the
amount of Six Hundred Thousand Dollars ($600,000) and in
the form approved by Seller pursuant to Paragraph 2.D
hereof, into Escrow pursuant to the terms of Paragraph 3.B
hereof.
D. Special Provisions Regarding the Letter of Credit. The
Letter of Credit referred to in Paragraph 2.C, above (the
"Letter of Credit"), shall be unconditional and irrevocable
for the duration of the term of the Letter of Credit
(provided, however, that the Letter of Credit may provide
that it may be revoked by the issuer thereof if the Close
of Escrow does not occur within fifteen (15) days of the
Closing Date, including any extensions thereof pursuant to
Section 2.E below), and shall be issued by Bank of America
or another financial institution of comparable assets and
net worth reasonably satisfactory to Seller (the "Issuer").
The Letter of Credit shall provide that it may be presented
for payment in the San Francisco Office of the Issuer, or
such other location as may be satisfactory to Seller,
during regular banking hours. The term of the Letter of
Credit shall expire no earlier than thirteen (13) months
after the Closing Date. Buyer shall provide Seller with
the form in which the Letter of Credit is proposed to be
issued at least fifteen (15) days prior to the Closing
Date, for review by Seller for compliance with the above
requirements. Seller may draw on the Letter of Credit at
any time prior to the expiry date thereof, beginning on the
earlier of (a) twelve (12) months after the Closing Date,
(b) the date of any bankruptcy filing, receivership or
other insolvency proceeding is initiated against Buyer or
(c) such earlier date as Seller may have a reasonable good
faith belief that Buyer has repudiated its obligation to
reimburse the Issuer under the Letter of Credit. This
Paragraph 2.D shall survive the Closing.
E. Additional Payment. If the Closing shall not occur by the
Closing Date, Buyer shall have the option to extend the
Closing Date to a date to occur on or before August 31,
1994 by depositing with Escrow Holder, on or before 5:00
p.m., PDT on August 1, 1994 an additional payment in the
amount of Fifty Thousand Dollars ($50,000.00) ("the
Additional Payment"). The Additional Payment shall
immediately become non-refundable upon deposit with Escrow
Holder, except that it shall be refunded to Buyer if the
Close of Escrow does not occur for any reason other than a
default by Buyer.
3. Close of Escrow. Escrow No. 508367 (the "Escrow") for the
purchase and sale contemplated by this Agreement has been opened
with Escrow Holder. Buyer and Seller agree that Escrow shall
be closed and the purchase and sale shall be consummated ("Close
of Escrow") on a date mutually acceptable to Buyer and Seller
(the "Closing Date") but not later than August 1, 1994, in the
following manner:
A. Seller's Deliveries into Escrow. Prior to the Closing
Date, Seller shall deliver to Escrow Holder the following
(all documents shall be duly executed by Seller and shall
be acknowledged where required):
i A Grant Deed to the Real Property in the form of
Exhibit C attached hereto (the "Deed");
ii A Bill of Sale with respect to the Personal Property
in the form of Exhibit D attached hereto (the "Bill of
Sale");
iii A duplicate original of an Assignment of Leases in the
form of Exhibit E attached hereto (the "Assignment of
Leases");
iv A duplicate original of an Assignment of Intangible
Property in the form of Exhibit F attached hereto (the
"Assignment of Intangible Property");
v The originals of the tenant estoppel certificates
referred to in Paragraph 5.A hereof.
vi A certificate from Seller certifying that Seller is
not a "foreign person" within the meaning of Section
1445(f)(3) of the Internal Revenue Code;
vii the certificate specified in Paragraph 7.B below,
regarding status of Seller's representations and
warranties as of Close of Escrow;
viii Seller's written instructions to close Escrow in
accordance with the terms of this Agreement (the
"Seller's Instructions"); and
ix Any funds necessary to comply with Seller's
obligations on the prorations and credits relating to
the Property under Paragraph 8 hereof.
B. Buyer's Deliveries into Escrow. Prior to the Closing Date,
Buyer shall deliver to Escrow Holder the following:
i The Purchase Price plus or minus closing adjustments
and prorations;
ii The original Letter of Credit, in the form approved by
Seller pursuant to Paragraph 2.D;
iii Duplicate originals, duly executed by Buyer, of the
Assignment of Leases and Assignment of Intangible
Property and any certificate required under Paragraph
5.B hereof with respect to matters related to ERISA;
and
iv Buyer's written instructions to close Escrow in
accordance with the terms of this Agreement (the
"Buyer's Instructions").
C. Escrow Holder's Duties. On the Closing Date, Escrow Holder
shall close escrow by:
i Recording all documents as may be necessary to clear
title in accordance with the requirements of this
Agreement, the Buyer's Instructions and the Seller's
Instructions;
ii Recording the Deed and the Assignment of Leases, in
that order, and instructing the Santa Clara County
Recorder not to affix the amount of any documentary or
transfer taxes to the Deed but to attach a separate
statement to the Deed after recording;
iii Paying all closing costs and making all prorations in
accordance with the terms of this Agreement and a
statement of adjustments and prorations prepared by
Buyer and Seller and delivered to Escrow Holder prior
to the Closing Date;
iv Delivering to Buyer the Title Policy (as hereinafter
defined), Escrow Holder's certified closing statement,
and an original of each of the documents described in
Paragraphs 3.A(i) through 3.A (vii); and
v Delivering to Seller the cash portion of the Purchase
Price plus or minus closing adjustments and
prorations, the original Letter of Credit, Escrow
Holder's certified closing statement, conformed copies
of the Deed, and an original of each of the documents
described in Paragraph 3.B(iii).
D. Deliveries Outside Escrow. Upon the occurrence of Close of
Escrow, Seller shall deliver (or shall have previously
delivered) to Buyer the following items:
i Keys to all buildings located on the Real Property;
and
ii Ink-signed originals of the Leases (including any
memoranda or certificates regarding the commencement
and/or termination dates thereunder), to the extent in
the possession of Seller, and if such originals are
not available, certified copies of such Leases.
In addition, within forty-eight (48) hours after the Close
of Escrow, Seller shall make its original files related
exclusively to the Property available for pick-up by Buyer,
at Buyer's sole cost, at Seller's Pleasanton office or at
the Property.
4. Buyer's Inspections and Seller's Disclaimer.
A. Seller's Due Diligence Deliveries. Seller has delivered or
shall deliver to Buyer, or shall make available to Buyer in
its files at it offices in Pleasanton or at the Real
Property, within five (5) days of the date of this
Agreement the following documents, but only to the extent
such documents may be contained in Seller's files or in the
possession of Seller:
i a copy of each of the Leases in effect or to be in
effect as of the Closing Date:
ii a copy of the preliminary title report issued by
Escrow Holder under Order No. 508367, dated as of
April 15, 1994 (the "Title Report"), together with a
copy of each of the documents noted as exceptions in
the Title Report;
iii copies of the Service Contracts in effect or to be in
effect as of the Closing Date;
iv copies of all insurance policies of the tenants,
tenant payment records and all warranties and other
contracts or documents of significance to the
Property;
v copies of any tenant financial statements;
vi building permits, certificates of occupancy and all
other governmental licenses and permits for the
Improvements, provided, in addition to the foregoing,
Seller will reasonably cooperate with Buyer by
providing all letters of authorization or other
approvals necessary to authorize Buyer to inspect the
files of the City of Milpitas that may contain
information relating to such building permits,
certificates or other licenses or permits related to
the Property;
vii the form of certificate referred to in Paragraph
5.B(ii) hereof; and
viii any other written information pertaining to the
Property.
Buyer shall have until 5:00 pm on a date which is thirty
(30) days from the date of this Agreement (the "Due
Diligence Period"), to examine all matters related to the
Property and the Improvements pursuant to this Paragraph 4.
B. Lease Review. During the Due Diligence Period, Buyer shall
review the Leases and, on or before the expiration of the
Due Diligence Period, shall notify Seller of any objections
Buyer may have to the terms and conditions of such Leases.
C. Title Review. During the Due Diligence Period, Buyer shall
review the Title Report and the underlying exceptions and
in addition, shall order any survey of the Property Buyer
may deem appropriate (a "Survey"), provided the Survey
shall be conducted at Buyer's sole cost and expense. On or
before the expiration of the Due Diligence Period, Buyer
shall notify Seller of any objections Buyer may have to the
status of the Property's title, including, without
limitation, any matters revealed by the Survey (each a
"Title Objection"). If Buyer shall elect not to terminate
the contract pursuant to Paragraph 10, matters approved by
Buyer and shown in the Title Report and Survey, shall
constitute "Approved Exceptions." Notwithstanding the
foregoing, the parties acknowledge that Buyer has objected
to the Option to Purchase listed as item 11 of the Title
Report (the "Option") and that in no event shall the Option
constitute an Approved Exception. Seller shall attempt to
satisfy any Title Objections (including the aforementioned
objection to the Option) prior to the Closing Date, but
Seller shall not be required to institute any litigation or
incur any cost to do so. If, at least ten (10) days prior
to the Closing Date, Seller notifies Buyer that Seller will
not satisfy any or all of the Title Objections, then,
within seven (7) days of such notice from Seller Buyer
shall notify Seller either that Buyer (i) waives the Title
Objections and accepts such title as Seller is willing to
convey, or (ii) terminates this Agreement in accordance
with Paragraph 10. The Approved Exceptions and any Title
Objections which Buyer approves in writing shall be
referred to hereinafter as the "Permitted Exceptions".
C.1 Financial Inspection. During the Due Diligence Period,
Buyer will be given access to all of Seller's files
containing financial information pertaining to the
Property, for the purposes of preparing such audited
financial statements relating to the Property as Buyer may
wish to prepare. If Buyer is unable to prepare audited
financial statements satisfactory to it by the end of the
Due Diligence Period, it may terminate this Agreement
pursuant to Paragraph 10 hereof.
D. Other Due Diligence. During the Due Diligence Period,
Buyer shall be permitted to make complete physical,
environmental, legal and other inspections of the Property,
Seller's files pertaining to the Property and of Seller's
due diligence materials described in Paragraph 4.A and to
conduct such other studies as Buyer, in its sole judgment,
deems suitable. Buyer or a representative of Buyer shall
have access to the Property and to Seller's files relating
to the Property, subject to the rights of tenants under the
Leases, during normal business hours if (i) Buyer notifies
Seller 24 hours in advance of the time Buyer desires access
to the Property or Seller's files, and (ii) Buyer is
accompanied by a representative of Seller during any visit
to the Property. Buyer shall reasonably cooperate with
Seller to schedule and conduct any environmental testing of
the Property that may be done by Buyer. Buyer hereby
agrees to indemnify Seller against and hold Seller harmless
from any and all costs, expenses, losses, charges and
claims arising out of Buyer's (or any representative of
Buyer's) activities on the Real Property. Buyer hereby
agrees that the waiver, deemed waiver or satisfaction of
the condition set forth in Paragraph 5.A(iii) shall
constitute an acknowledgment that Seller has given Buyer
every opportunity to consider, inspect and review to its
satisfaction the physical, environmental, legal and
economic condition of the Property.
E. Seller's Disclaimer. Seller disclaims the making of any
representations or warranties, express or implied,
regarding the Property or matters affecting the Property,
including, without limitation, the physical condition of
the Property, title to or the boundaries of the Real
Property, pest control matters, soil condition, hazardous
waste, toxic substance or other environmental matters,
compliance with building, health, safety, land use and
zoning laws, regulations and orders, structural and other
engineering characteristics, traffic patterns and all other
information pertaining to the Property, except as expressly
provided in Paragraph 7.B hereof, subject to the
limitations contained in Paragraph 7.D hereof. Buyer
acknowledges that it is aware that certain hazardous
substances have been identified in the groundwater
underlying the Property and that certain Property Documents
indicate that hazardous materials have been released in the
vicinity of the Real Property by among others, Jones
Chemicals, Inc. ("Jones Chemicals"), Great Western Chemical
Company ("Great Western") and North American Transformer
("NAT") and that hazardous materials are present in the
groundwater underlying the Real Property. Buyer, moreover,
acknowledges (i) that Buyer is a sophisticated investor,
knowledgeable and experienced in the financial and business
risks attendant to an investment in real property and
capable of evaluating the merits and risks of entering into
this Agreement and purchasing the Property, (ii) that Buyer
has entered into this Agreement with the intention of
making and relying upon its own (or its experts')
investigation of the physical, environmental, economic and
legal condition of the Property, including, without
limitation, the mechanical, electrical, HVAC and other
systems, the Leases and other documents relating to the
Property, the compliance of the Property with laws and
governmental regulations, any legal rights or remedies
Buyer may have in connection with any hazardous materials
present on or near the Real Property, whether known or
unknown and the operation of the Property and (iii) that
Buyer is not relying upon any representations and
warranties made by Seller or anyone acting or claiming to
act on Seller's behalf concerning the Property, except and
only to the extent provided in Paragraph 7.D hereof. Buyer
further acknowledges that it has not received from Seller
any accounting, tax, legal, architectural, engineering,
property management or other advice with respect to this
transaction and is relying upon the advice of its own
accounting, tax, legal, architectural, engineering,
property management and other advisors. Buyer shall
purchase the Property in its "as is" condition on the
Closing Date and assumes the risk that adverse physical,
environmental, economic or legal conditions may not have
been revealed by its investigations. Seller shall have no
liability for any subsequently discovered defects, whether
latent or patent, except with respect to any claims arising
out of Seller's intentional fraud or its breach of any of
its covenants under this Agreement.
Buyer agrees that, from and after the Closing Date, except
with respect to any claims arising out of Seller's
intentional fraud or its breach of any of its covenants
under this Agreement, and only to the extent provided in
Paragraph 7.D hereof, Buyer, for itself and its agents,
affiliates, successors and assigns, shall release and
forever discharges Seller, its agents, affiliates,
successors and assignees from, and waives any right to
proceed against Seller for, any and all rights, claims and
demands at law or in equity relating to the physical,
environmental, economic or legal condition of the Property,
including, without limitation, any claims for contribution
or reimbursement pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended, or any other or similar state or federal
environmental statute, rule or decision. Without limiting
the foregoing, Buyer hereby specifically waives, in
connection with the matters released above, the provisions
of California Civil Code Section 1542 which provide:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
Buyer hereby acknowledges that Buyer has carefully reviewed
this subsection and discussed its impact with legal
counsel, and that the provisions of this subsection are a
material part of this Agreement.
Buyer R.P.
5. Conditions Precedent.
A. Buyer's Conditions. Buyer's obligation to purchase the
Property shall be subject to and contingent upon the
satisfaction or written or deemed waiver of the following
conditions precedent:
i Buyer's review and approval, within the Due Diligence
Period, of the terms and conditions of the Leases and
those documents delivered to Buyer or made available
for inspection by Buyer under Paragraph 4.A hereof;
ii Buyer's review and approval, within the Due Diligence
Period, of all title matters relating to the Real
Property;
iii Buyer's investigation and approval, within the Due
Diligence Period, of all physical, environmental,
legal and any other matters relating to the Property,
as Buyer may, in Buyer's sole discretion, elect to
investigate;
iv The willingness of Escrow Holder to issue, upon the
sole condition of the payment of its regularly
scheduled premium, an CLTA Owner's policy of title
insurance, or if requested by Buyer and subject to
Paragraph 8.A hereof, an ALTA Owner's policy of title
insurance, with such endorsements and reinsurance or
coinsurance as Buyer may reasonably require
(collectively, the "Title Policy"), insuring Buyer in
the amount of the Purchase Price that fee simple title
to the Real Property is vested of record in Buyer on
the Closing Date, subject only to the standard printed
conditions and exceptions of the Title Policy and the
Permitted Exceptions;
v Buyer's receipt, on or before the Closing Date, of
tenant estoppel certificates in substantially the form
of Exhibit G attached hereto, from each and all of the
tenants of the Property (the "Tenant Estoppels").
For the purposes of this Paragraph 5.A(v), neither
(i) the qualification by a tenant of any statement as
being to the best of its knowledge, nor (ii) the
disclosure of any fact, claim or information by any
tenant in its completed Tenant Estoppel so long as
such fact, claim or information has been previously
disclosed to Buyer in written information contained
in Seller's files, shall be deemed a substantial
variation from the required form of Tenant Estoppel;
vi Seller's performance of each and every covenant
required to be performed by Seller hereunder and the
truth and correctness of each of Seller's
representations and warranties set forth herein; and
vii The unconditional approval, before the expiration of
the Due Diligence Period, of the transaction
contemplated in this Agreement by Buyer's corporate
officers and, if required, the Board of Directors of
Buyer, each in their sole discretion.
B. Seller's Conditions. Seller's obligation to sell the
Property shall be subject to and contingent upon the
satisfaction or waiver of the following conditions
precedent:
i The unconditional approval of the transaction
contemplated in this Agreement, by both Seller's
corporate officers and by the Finance Committee of
Seller's Board of Directors, each in their sole
discretion (collectively "Corporate Approval"). If
the appropriate corporate officers do not approve the
transaction, then no review will be made by the
Finance Committee. Seller shall provide Buyer with
written confirmation of its Corporate Approval within
ten (10) days after the date of this Agreement. In
the event Seller fails to provide written evidence of
its Corporate Approval within such ten-day period,
Buyer may terminate this Agreement pursuant to
Paragraph 10;
ii The delivery to Seller on the Closing Date of a
certificate in the form and substance reasonably
satisfactory to satisfy Seller that the transaction
contemplated in this Agreement does not constitute a
non-exempt prohibited transaction under ERISA,
provided Buyer shall have until the expiration of the
Due Diligence Period to approve or disapprove of such
certificate. Buyer's failure to disapprove the
certificate within the time set forth herein shall be
deemed to be approval of the certificate. If Buyer
disapproves of the certificate, Buyer shall have the
option, at the end of the relevant period specified
herein to terminate this Agreement pursuant to
Paragraph 10 ; and
iii Buyer's performance of each and every covenant
required to be performed by Buyer hereunder, and the
truth and correctness of each of Buyer's
representations and warranties, as set forth in
Paragraph 7.C;
C. Waiver or Failure of Conditions Precedent. At any time or
times on or before the date specified for the satisfaction
of the condition, Buyer or Seller may elect to waive the
benefit of any of their respective conditions set forth in
Paragraph 5.A or Paragraph 5.B above, as applicable.
Buyer's failure to notify Seller in writing of the failure
of any condition set forth in Paragraphs 5.A on or before
the date specified for satisfaction shall be deemed to
constitute a waiver of such condition. In any event,
Buyer's consent to the Close of Escrow shall waive the
benefit of any remaining unfulfilled conditions set forth
in Paragraph 5.A. In the event any of the conditions set
forth in Paragraphs 5.A or 5.B above are neither waived nor
fulfilled, Buyer or Seller (as appropriate) may terminate
this Agreement in accordance with the provisions of
Paragraph 10.
6. Estoppel Certificates. Seller shall use reasonable efforts to
obtain and furnish to Buyer as soon as reasonably possible, but
not later than Close of Escrow, Estoppel Certificates from each
of the tenants identified on Exhibit H, such Estoppel
Certificates to be in the form of Exhibit G, attached hereto.
Such certificates shall verify the information provided by
Seller in Exhibit H with respect to each lease. Upon the Close
of Escrow, Buyer shall notify each tenant, in writing, of its
acquisition of the Property. Said notice shall set forth
Buyer's address for payment of rent and the giving of notices,
and shall also recite that the tenant's security deposit, if
any, has been delivered to Buyer. Seller shall, if requested by
Buyer, join in the execution of such notice at Close of Escrow,
as a condition to closing, provided such notice shall be
satisfactory to Seller. As a condition to Buyer's obligation to
purchase hereunder, Seller must obtain and furnish effective
Estoppel Certificates from all tenants within the time period
specified in Paragraph 5.A hereof.
7. Covenants, Representations and Warranties.
A Seller's Covenants. Seller hereby covenants and agrees as
follows:
i During the period from the date of this Agreement
through the Closing Date (the "Contract Period"),
Seller shall not make any material alterations to the
Real Property, except as required by this contract,
nor modify or terminate any of the Leases or any of
the Service Contracts, licenses, permits, legal
classification, or other governmental approvals or any
warranties pertaining to the Property, nor enter into
any new lease or agreement pertaining to the Property
(except as required by law or governmental order or in
the event of an emergency) without Buyer's consent.
Seller will continue to perform all of its obligations
as Landlord under all such leases and that it will not
enter into any new leases or accept the surrender of
any existing tenancies or approve any subleases for
which Seller's approval is required without the prior
consent of Buyer;
ii During the Contract Period, Seller shall not
voluntarily cause to be recorded any encumbrance,
lien, deed of trust, easement or the like against the
title to the Property without the prior written
consent of Buyer; and
iii During the Contract Period, Seller will operate and
maintain the Property in a manner consistent with
Seller's past practices relative to the Property.
Seller shall maintain the Property in a condition at
least as good as on the date of this Agreement, and
shall not without first obtaining the written consent
of Buyer enter into any contracts or agreements, or,
to the extent any approval of Seller may be required
under any relevant Lease, permit any tenants to enter
into any contracts or agreements, pertaining to the
Property which require the consent of the Seller
unless those contracts can be terminated without
penalty on thirty (30) days' notice.
B. Seller's Representations and Warranties. Seller hereby
represents and warrants to Buyer that to its "actual
knowledge" (as defined herein), the following
representations and warranties are true as of the date
hereof. To the best of Seller's "actual knowledge" (which
for the purposes of this Paragraph 7.B shall mean only the
actual knowledge of Earle Conklin, Robert Hutchison and
Cindy Lynds, who are the individuals currently employed by
Seller who have had direct responsibility for the
operation, management and disposition of the Property
within the past year), and without duty of inquiry of third
parties or any independent investigation (other than a
review of the Property Files and discussions with Donna
Benbenek, the current property manager's representative).
i Corporate Approvals. If the condition to Seller's
obligations described in Paragraph 5.B(i) is
satisfied, Seller will have full power and authority
to enter into and carry out the terms and provisions
of this Agreement and to execute and deliver all
documents which are contemplated by this Agreement,
and all actions of Seller necessary to confer such
authority upon the persons executing this Agreement
and such other documents will have been taken.
ii Existing Tenants. Attached hereto, marked Exhibit H,
and incorporated herein by reference, is a list of all
tenants of the Property, which list includes the date
of each lease and any amendments and the security
deposit, if any, held by Seller as of the date of this
Agreement.
iii Outstanding Contracts/Commissions. At Closing there
shall be no outstanding contracts made by the Seller
for any improvements to the Property which have not
been fully paid for by Seller and there shall not be
any unpaid commissions of any kind arising from any
lease or other transaction affecting the Property
which have not been paid by Seller.
iv Litigation. There is presently no written claim,
litigation, proceeding or governmental investigation
pending or threatened in writing against or relating
to the Property or the transactions contemplated
hereby, except with respect to the hazardous materials
known to be present on or about the Real Property.
v Agreements Regarding Environmental Matters.
Prudential has not entered into any written agreements
with or filed a lawsuit against Jones Chemicals, Great
Western Chemical Company or NAT regarding the
hazardous materials referred to in Section 4.E hereof,
except as disclosed in the files of Seller and in the
files of the agency having jurisdiction over the
cleanup of such substances.
vi Compliance With Laws. No written notice of violation
of any applicable zoning regulation or ordinance or
other law, order, ordinance, permit, rule, regulation
or requirement or any covenants, conditions or
restrictions affecting or relating to the use or
occupancy of the Property has been given to Seller by
any governmental agency having jurisdiction over the
Real Property or by any other person entitled to
enforce the same, except with respect to the hazardous
materials known to be present on or about the Real
Property.
vii Foreign Person. Seller is not a foreign person and is
a "United States Person" as such term is defined in
the Internal Revenue Code.
viii Public Improvements. Seller has received no written
notice of any intended public improvements which
result in any charge being levied or assessed against
the Property or in the creation of any lien upon the
Property that is not reflected as a Permitted
Exception.
ix Condemnation. There is presently no pending or
contemplated condemnation of the Property or any part
thereof of which Seller has received written notice.
x Employees. A schedule of all employees of Seller
employed exclusively in connection with the Real
Property, including salary, payroll information,
benefits and duration of employment is attached hereto
as Exhibit I.
xi Default. The closing of the various transactions
contemplated by this Agreement will not constitute or
result in any default or event that with a notice or
lapse of time, or both, would be a default, breach or
violation of any lease, mortgage, deed of trust,
covenant or other agreement, instrument or arrangement
by which Seller or the Property are bound, or any
event which would permit any party to accelerate the
maturity of any indebtedness or other obligation. No
consent or joinder by any party other than Seller is
required for this Agreement or the performance of
Seller's obligations hereunder.
xii Subsequent Changes and Conditions. Should Seller
become aware of any fact or circumstance which would
change its ability to perform any of its covenants, or
the materially affect the truthfulness of any
representation or warranty made herein, Seller will
promptly give written notice of such change, fact or
circumstance to Buyer. Seller shall issue a
certificate at the Closing Date stating that all of
the representations and warranties contained in this
Agreement are true and correct as of said date except
as to facts, if any, concerning which Buyer was
notified.
xiii Truth of Representations and Warranties. All
representations and warranties contained in this
Paragraph 7.B shall be true and correct on the date
hereof, and on the Closing Date except to the extent
Buyer has been notified to the contrary after the date
hereof and prior to the Closing Date.
xiv Buyer's Rights. Upon notification at any time prior
to the Closing Date of any fact which would materially
change any of the representations or warranties
contained herein, Buyer shall have the option of
waiving the breach of warranty that would be caused by
such change, or terminating this Agreement pursuant to
Paragraph 10.
C. Buyer's Representations and Warranties. Buyer hereby
represents and warrants to Seller as follows:
i Corporate Status. Buyer is a corporation, duly formed
and organized, validly existing and in good standing
under the laws of the state of its incorporation; and
ii Authority. Buyer has, and as of the Closing Date
shall have, full power and authority to enter into and
carry out the terms and provisions of this Agreement
and to execute and deliver all documents which are
contemplated by this Agreement, and all actions of
Buyer necessary to confer such authority upon the
persons executing this Agreement and such other
documents have been or will be taken.
D. Limitation of Liability. If the Close of Escrow occurs,
the foregoing representations and warranties shall survive
the Close of Escrow, provided, however, that Seller's and
Buyer's liability with respect to the inaccuracy of any
representation or the breach of any warranty specified in
Paragraph 7 (each such inaccuracy or breach being referred
to as a "Misrepresentation", or collectively as the
"Misrepresentations", and any out of pocket actual loss,
cost, damage or expense occasioned thereby being referred
to as "Damages") shall be subject to each of the following
limitations:
i The breaching party shall have no liability for
Damages with respect to any negligent
Misrepresentation unless an action shall have been
commenced therefor within twenty-four (24) months
after the Closing Date, provided this Section 7.D is
not intended to limit Buyer's ability to assert any
claim for intentional fraud otherwise permitted
pursuant to Paragraph 4.E; and
ii The breaching party shall be liable for any item of
Damages only to the extent that the non-breaching
party had no actual knowledge of the Misrepresentation
prior to the Close of Escrow. For the purposes of
this Paragraph 7.D, Seller's "actual knowledge" shall
be defined as set forth in Paragraph 7.B, and Buyer's
"actual knowledge" shall be deemed to cover any matter
contained in this Agreement, the due diligence
materials delivered or made available to Buyer or in
the tenant estoppel certificates delivered to Buyer.
8. Closing Adjustments and Prorations. The adjustments and
prorations set forth below shall be made at the Close of Escrow.
A. Closing Costs. Seller shall pay (i) any county
documentary or transfer taxes and one-half of any city
documentary transfer tax due on the transfer of the
Property from Seller to Buyer, (ii) the escrow fee charged
by Escrow Holder, (iii) all recording costs, and (iv) the
premium for the CLTA portion of the Title Policy. Buyer
shall pay one half of any city documentary transfer tax,
the premium for the ALTA portion of the Title Policy any
special endorsements requested by Buyer and its own
attorneys' fees. All other closing costs customarily
incurred in connection with a transaction of this type are
not specifically provided in this Agreement shall be
allocated as customary in Santa Clara County.
B. Lease Rentals. All accrued rent (including all accrued
operating expense and tax escalations and recoveries),
charges, and revenues of any kind under the Leases shall be
prorated as of the Closing Date based on the actual number
of days in the month of closing. Seller shall receive all
such revenue attributable to the period through and
including the Closing Date. Buyer shall receive all such
revenue attributable to the period after the Closing Date.
If either Buyer or Seller receives any revenues
attributable to the period during which it is not the owner
of the Property, said party shall promptly forward such
amounts to the other party (if such revenues are only
partially attributable to the period during which said
party is not the owner of the Property, the amount paid to
the other party shall be based upon proration as of the
Closing Date as set forth above). Buyer shall use its best
efforts to collect and assist Seller in collecting any
revenue which is owed to Seller as of the Closing Date or
which comes due thereafter, but shall in no event be
required to institute or pursue litigation to collect such
amounts. Buyer shall not be liable for payment of any
commissions arising from the receipt of any revenues by
Seller that are attributable to the period of Seller's
ownership. Rents collected by Buyer after the Closing Date
from tenants whose obligations are delinquent as of the
Closing Date shall be applied by Buyer first to the payment
of any current obligations of such Tenant to Buyer, then to
any obligations of such tenant to Seller that predates the
Closing.
C. Security Deposits. Buyer shall be credited with the amount
of any tenant security deposits or any other tenant
deposits currently held by Seller in connection with the
Leases.
D Real Estate Taxes. All real and personal property taxes,
installments of bonds and special taxes and assessments
attributable to the Property (and not paid directly by
tenants) shall be prorated as of the Closing Date based on
a 365-day year and the assessed value of the Property in
effect immediately prior to the Close of Escrow. Seller
shall pay all such real estate taxes, bonds and assessments
attributable to periods through and including the Closing
Date. Buyer shall assume and pay for all such taxes and
assessments attributable to the period after the Closing
Date.
E. Insurance. Seller shall not assign to Buyer any insurance
policies in connection with the Property.
F. Utilities. Buyer shall arrange with all utility services
and companies serving the Property on behalf of Seller to
have accounts started in Buyer's name beginning at 12:01
a.m. on the Closing Date. Seller shall not assign to Buyer
any deposits Seller has with any utility services or
companies. Buyer and Seller shall cooperate to have the
utility services and companies make utility readings as of
the Closing Date. If readings can be made, utility charges
shall not be prorated. If readings cannot be made, utility
charges shall be prorated as of the Closing Date based on
estimates from the latest bills available. In either
event, Seller shall pay, through and including the Closing
Date, all utility charges attributable to the Property
which are not payable directly by tenants.
G. Service Contract Charges. Charges under the Service
Contracts shall be prorated as of the Closing Date based on
the actual number of days in the month in which Close of
Escrow occurs. Seller shall pay all such charges
attributable to the period through and including the
Closing Date.
H. [Intentionally Deleted]
I Calculations for Closing. Seller and Buyer shall provide
Escrow Holder with a preliminary calculation of prorations
no later than five (5) days prior to the Closing Date and a
final calculation two (2) days prior to the Closing Date.
The final calculation shall be signed by each party and may
be relied upon by Escrow Holder in completing the closing
adjustments and prorations. In the event incomplete
information is available, or estimates have been utilized
to calculate prorations as of the Closing Date, any
prorations relating thereto shall be further adjusted and
completed outside of escrow within sixty (60) days after
the Closing Date or as and when complete information
becomes available to Buyer and Seller.
9. DAMAGE, DESTRUCTION AND CONDEMNATION.
Risk of Physical Loss.
A. Substantial Loss. Risk of physical loss to the
Improvements shall be borne by Seller prior to the Closing
Date and by Buyer thereafter. In the event that any
Improvements shall be damaged by fire, flood, earthquake or
other casualty in a material degree (that is, to the extent
that ten percent (10%) or more of the total floor space of
the Improvements are rendered unusable as of the Closing
Date), Buyer may, at its option: (i) elect not to acquire
the Property, in which case this Agreement shall be
terminated; or (ii) elect to proceed to close the purchase
of the Property, in which case Seller shall assign to Buyer
all insurance proceeds relating to such damage as well as
the right to negotiate the adjustment with the insurer.
Seller shall promptly thereupon provide Buyer with copies
of its insurance coverage so that Buyer may use such
information in making its election hereunder.
B. Minor Loss. If less than ten percent (10%) damage occurs to
any of the Improvements, then at Buyer's option, Seller
shall (i) assign to Buyer at the closing all insurance
proceeds relating to such damage, or (ii) restore and
repair such damage prior to the Closing Date, provided if
Buyer shall require Seller to repair the damage prior to
the Closing Date, and the damage exceeds $10,000 or will
take more than five (5) days to complete, Seller may elect
to terminate this Agreement pursuant to Paragraph 10.
10. Termination. If Buyer does not deliver a written notice to
Seller and Escrow Holder approving of all of the matters related
to the Property that are the subject of Buyer's investigation
and approval under Paragraph 4 and the satisfaction of Buyer's
corporate approval condition under Paragraph 5 hereof, this
Agreement shall automatically terminate as of the day after the
expiration of the Due Diligence Period. If either party desires
to exercise any express right provided in this contract to
terminate this Agreement, such party shall give written notice
of such termination and the reason therefor to the other party.
Effective as of the date of any such notice, or the date of any
automatic termination due to the failure of the Buyer to accept
all matters related to the Property, each party shall be
released from its obligations hereunder and all monies and
documents deposited into Escrow shall be returned to the party
which deposited them, all documents delivered by Seller to Buyer
relating to the Property shall be returned.
If Escrow shall fail to close because of the failure of either
party to comply with its obligations hereunder, all costs
incurred through the escrow to the date the escrow is terminated
shall be paid by the party in breach of this Agreement. If
Escrow shall fail to close for any other reason, Escrow costs
shall be divided equally between the parties.
11. LIQUIDATED DAMAGES. IN THE EVENT OF DEFAULT BY BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, SELLER SHALL HAVE THE
RIGHT TO TERMINATE THIS AGREEMENT FORTHWITH AND WITHOUT FURTHER
OBLIGATIONS TO BUYER AND TO OBTAIN IMMEDIATE DISBURSEMENT OF AND
TO RETAIN THE EARNEST MONEY DEPOSIT THEN HELD BY ESCROW HOLDER.
SUCH RETENTION OF THE EARNEST MONEY DEPOSIT IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL
CODE SECTIONS 3769 OR 3275, BUT INSTEAD, IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS
1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. THE PARTIES
ACKNOWLEDGE THAT THE ACTUAL DAMAGES WHICH WOULD RESULT TO SELLER
AS A RESULT OF SUCH FAILURE WOULD BE EXTREMELY DIFFICULT TO
ESTABLISH. IN ADDITION, BUYER DESIRES TO HAVE A LIMITATION PUT
UPON ITS POTENTIAL LIABILITY TO SELLER IN THE EVENT THAT THIS
TRANSACTION SHALL FAIL TO CLOSE. BY PLACING THEIR RESPECTIVE
INITIALS IN THE SPACES HEREINAFTER PROVIDED, THE PARTIES
ACKNOWLEDGE THAT UPON A DEFAULT BY BUYER UNDER THE TERMS OF THIS
AGREEMENT SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE
AMOUNT OF THE EARNEST MONEY DEPOSIT.
BUYER ( R.P. ) AND SELLER ( C.L. ) AGREE
Miscellaneous.
A. Leasing Commissions. Seller shall indemnify and hold Buyer
harmless from any leasing commissions payable in connection
with the current terms of the Leases (specifically
excluding therefrom any commission for option periods,
renewal periods, extension periods or waivers of
termination rights) Buyer shall indemnify and hold Seller
harmless from and against any other leasing commissions
relating to the Property.
B. Brokerage Commissions. Upon Close of Escrow, a real estate
sales commission shall be paid by Seller to J.R. Parrish,
Inc.- Colliers International and to Grubb & Ellis
("Brokers") in accordance with Seller's listing Agreement
with the Brokers. Except for this commission, each party
to this Agreement warrants to the other that no person or
entity can properly claim a right to a real estate
commission, finder's fee or other real estate brokerage-
type compensation (collectively, "Real Estate
Compensation") based upon the acts of that party with
respect to the transaction contemplated by this Agreement.
Each party hereby agrees to indemnify and defend the other
against and hold the other harmless from and against any
and all loss, damage, liability or expense, including costs
and reasonable attorneys' fees, resulting from any claims
for Real Estate Compensation by any person or entity based
upon such acts.
C. Time of the Essence. Time is of the essence of every
provision of this Agreement.
D. Notices. Whenever Escrow Holder or any party hereto shall
desire to give or serve upon the other any notice, demand,
request or other communication, each such notice, demand,
request or other communication shall be in writing and
shall be given or served upon the other party by personal
service or by certified, registered or Express United
States Mail, or Federal Express or other commercial
courier, postage prepaid, addressed as follows: August 16,
1995
TO BUYER:
Bedford Property Investors
3658 Mount Diablo Boulevard
Suite 210
Lafayette, California 94549
Attention: Bob Pester
COPY TO :
Zankel & McGrane
One Embarcadero Center
Suite 1200
San Francisco, California 94111
Attention: Martin I. Zankel, Esq.
TO SELLER:
The Prudential Insurance Company of America
4309 Hacienda Drive Suite 500
Pleasanton, California 94111
Attention: Earle Conklin
COPY TO SELLER:
The Prudential Insurance Company of America
Four Embarcadero Center, Suite 2700
San Francisco, California 94111
Attention: Regional Counsel
Any such notice, demand, request or other communication
shall be deemed to have been received upon the earlier of
personal delivery thereof or two (2) business days after
having been mailed as provided above, as the case may be.
E Attorneys' Fees. If Buyer or Seller is required to employ
counsel to enforce any of the terms of this Agreement or
for damages by reason of any alleged breach of this
Agreement or for damages by reason of any alleged breach of
this Agreement or for a declaration of rights hereunder,
the prevailing party shall be entitled to recover its
reasonable attorneys' fees and court costs incurred.
F. Assignments and Successors. This Agreement shall not be
assigned by either party without the prior written consent
of the other party, which consent shall be given or
withheld in such party's sole and uncontrolled discretion.
Subject to the foregoing, this Agreement shall be binding
upon the heirs, executors, administrators, successors and
assigns of Seller and Buyer.
G. Captions. Paragraph titles or captions contained herein
are inserted as a matter of convenience and for reference,
and in no way define, limit, extend or describe the scope
of this Agreement.
H. Exhibits. All exhibits attached hereto shall be
incorporated herein by reference as if set out herein in
full.
I. Binding Effect. Regardless of which party prepared or
communicated this Agreement, this Agreement shall be of
binding effect between Buyer and Seller only upon its
execution by an authorized representative of each such
party.
J. Construction. The parties acknowledge that each party and
its counsel have reviewed and revised this Agreement and
that the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this
Agreement or any amendment or exhibits hereto.
K. Counterparts. This Agreement may be executed in several
counterparts each of which shall be an original, but all of
such counterparts shall constitute one such Agreement.
L. Not Recordable. This Agreement shall not be recorded and
shall not be a lien against the Property.
M. Further Assurances. Buyer and Seller shall make, execute,
and deliver such documents and undertake such other and
further acts as may be reasonably necessary to carry out
the intent of the parties hereto.
N. Merger. The delivery of the Deed and any other documents
and instruments by Seller and the acceptance and
recordation thereof by Buyer shall effect a merger, and be
deemed the full performance and discharge of every
obligation on the part of Buyer and Seller to be performed
hereunder.
O. Governing Laws. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of
California.
P. ENTIRE AGREEMENT. THIS AGREEMENT EMBODIES THE ENTIRE
AGREEMENT BETWEEN THE BUYER AND SELLER IN CONNECTION WITH
THIS TRANSACTION AND THERE ARE NO ORAL OR PAROL AGREEMENTS,
REPRESENTATIONS OR WARRANTIES EXISTING BETWEEN THE BUYER
AND SELLER RELATING TO THIS TRANSACTION WHICH ARE NOT
EXPRESSLY SET FORTH HEREIN AND COVERED HEREBY. THIS
AGREEMENT CANNOT BE MODIFIED EXCEPT IN WRITING SIGNED BY
ALL PARTIES.
Q. Confidentiality. At all times prior to the Closing Date,
and if the Closing does not occur for any reason, at all
times after the date of this Agreement, Buyer and its
Broker shall keep the results of Buyer's investigations of
the Property confidential, except (i) disclosures to
Buyer's advisors and investors in connection with the
consummation of the transactions contemplated hereby (ii)
disclosures required by law, in the reasonable judgment of
Buyer and its advisors, or any court process or (iii)
disclosures expressly authorized in writing by Seller.
R. Tax-Deferred Exchange. Seller, at its option, may
consummate this transaction as part of a simultaneous or
delayed tax-deferred exchange pursuant to Section 1031 of
the Internal Revenue Code of 1986, as amended (an
"Exchange"). In such event, and upon written notification
from Seller, Buyer agrees to cooperate reasonably in
consummating with Seller the sale transaction as part of an
Exchange; provided, however, that (1) the completion of
such Exchange shall not delay the Closing Date (or the
Subsequent Closing Date, if applicable), (2) in no event
shall Buyer be required to take title to any real property
(other than Buyer's obligation to take title to the
Property, pursuant to the terms of this Agreement), (3)
Seller shall bear and pay all additional transaction costs
attributable to the Exchange, including, but not limited
to, reasonable attorneys' fees actually incurred by Buyer,
additional transfer fees and recording or escrow charges,
and (4) Seller shall indemnify, defend and hold Buyer
harmless from and against any and all loss, damage,
liability or expense (including, but not limited to,
reasonable attorneys' fees) incurred as a result of the
participation by Buyer in such Exchange.
IN WITNESS WHEREOF, the Buyer has executed this Agreement on the
date shown below its signature and Seller has accepted on the date
shown below its signature.
SELLER:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: Cindy Lynds
Its: Vice President
Date of
Execution: June 15, 1994
BUYER:
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By: Robert E. Pester
Its: Vice President
Date of
Execution: June 15, 1994
LIST OF EXHIBITS
EXHIBIT A Legal Description of Property
EXHIBIT B List of Personal Property
EXHIBIT C Form of Grant Deed
EXHIBIT D Form of Bill of Sale
EXHIBIT E Form of Assignment of Leases
EXHIBIT F Form of Assignment of Intangible Property
EXHIBIT G Form of Estoppel
EXHIBIT H List of Tenants
EXHIBIT I Schedule of Employees<PAGE>
EXHIBIT A
Legal Description of the Property
REAL PROPERTY in the City of Milpitas, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel A as shown on the Parcel Map filed for record in the Office of
the County Recorder of Santa Clara County, California on August 30,
1983 in Book 517 of Maps, pages 1 and 2.
Excepting and reserving therefrom all minerals, oil, gas and other
hydrocarbon substance below a depth of 500 feet measured vertically
from the contour of the surface of said real property; provided,
however, Grantor, its successors and assigns, shall not have the right
for any purpose whatsoever to enter upon, into or through the surface
of said real property or any part thereof between said surface and 500
feet below said surface, as reserved by Stanford Realty and
Development Company. a California corporation in the Deed recorded
September 30, 1981 in Book G366 of Official Records, page 82.
PARCEL TWO:
Parcel E, as shown on the Parcel Map filed for record in the Office of
the County Recorder of Santa Clara County, California on May, 1985 in
Book 542 of Maps, pages 50 and 51.
Excepting and reserving therefrom all minerals, oil gas and other
hydrocarbon substances below a depth of 500 feet measured vertically
from the contour of the surface of said real property; provided,
however, Grantor, its successors and assigns, shall not have the right
for any purpose whatsoever to enter upon, into or through the surface
of said real property or any part thereof between said surface and 500
feet below said surface, as reserved by Stanford Realty and
Development Company, a California corporation in the Deed recorded
September 30, 1981 in Book G366 of Official Records, page 82.
APN: 086-42-009 and 021
ARB: 86-30-x4
<PAGE>
EXHIBIT B
List of Personal Property
NONE<PAGE>
EXHIBIT C
Form of Grant Deed
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
__________________________
__________________________
__________________________
__________________________________________________________________
Mail tax statements to:
__________________________
__________________________
CORPORATION GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New
Jersey corporation, hereby grants to BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation, all of that certain real property located in
the County of Santa Clara, State of California, described on Exhibit A
attached hereto and by this reference made a part hereof (the
"Property").
Dated: _____________, 1994 THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA, a New Jersey corporation
By:_________________________________
By:_________________________________
<PAGE>
EXHIBIT D
BILL OF SALE
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which
are hereby expressly acknowledged, THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation ("Seller"), hereby assigns,
transfers and conveys to BEDFORD PROPERTY INVESTORS, INC. ("Buyer"),
all of Seller's right, title and interest in and to all of the
Personal Property, as that term is defined in that certain Purchase
and Sale Agreement between Seller and Buyer dated April ____, 1994,
including, without limitation, the personal property, machinery and
equipment described in Appendix I attached hereto.
Seller represents and warrants that Seller has full legal title
to the Personal Property and that all the Personal Property is free
and clear of any and all security agreements, financing statements or
other liens and encumbrances whatsoever, except as disclosed to Buyer
in writing.
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of
________, 1994.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: _________________________________
Its:____________________________<PAGE>
APPENDIX I TO EXHIBIT D
[FINAL L IST OF PERSONAL PROPERTY
TO BE IN SERTED AT CLOSING DATE]
<PAGE>
EXHIBIT E
FORM OF ASSIGNMENT OF LEASES
ASSIGNME NT AND ASSUMPTION OF
LESSOR'S INTEREST IN LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (the "Assignment") is
made this ___ day of ________, 1994, by the PRUDENTIAL INSURANCE
COMPANY OF AMERICA, a New Jersey corporation ("Assignor") and BEDFORD
PROPERTY INVESTORS, INC., a Maryland corporation ("Assignee").
RECITALS:
A. Assignor entered into those certain written leases, as
lessor, described on Exhibit "A" to this Assignment (collectively, the
"Leases"), for premises on land located in Milpitas, Santa Clara
County, California, commonly known as 554 and 556 Gibraltar Drive (the
"Leased Premises").
B. In connection with conveyance of the Leased Premises by
Assignor to Assignee, the parties desire that Assignor's interest in
and to the Leases and the Leased Premises be conveyed to Assignee.
FOR VALUABLE CONSIDERATION, the receipt and adequacy of which is
hereby acknowledged, it is agreed as follows:
1. Assignment. Assignor conveys and assigns to Assignee,
subject to the provisions of the Leases, all of Assignor's right,
title and interest in and to the Leases.
2. Assumption. Assignee assumes and agrees to be bound by all
of Assignor's liabilities and obligations pursuant to the Leases and
agrees to perform and observe all the lessor's covenants and
conditions contained in the Leases.
3. Appointment. Assignor hereby irrevocably appoints
Assignee, its successors and assigns, as the attorney and agent of
Assignor, in Assignor's name and stead, to enforce the provisions of
the Leases.
4. Binding Effect. This Assignment shall inure to the benefit
of and shall be binding upon the parties hereto and their respective
successors and assigns.
5. Attorney's Fees. If Assignor or Assignee is required to
employ counsel to enforce any of the terms of this Agreement or for
damages by reason of any alleged breach of this Agreement or for a
declaration of rights hereunder, the prevailing party shall be
entitled to recover its reasonable attorneys' fees and court costs
incurred therein.
"Assignor"
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
a New Jersey corporation
By:
By:
"Assignee"
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By:
By:
<PAGE>
EXHIBIT F
FORM OF ASSIGNMENT OF INTANGIBLE PROPERTY
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which
are hereby expressly acknowledged, THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, a New Jersey corporation, ("Assignor"), hereby assigns,
transfers and conveys to BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation ("Assignee"), all of Assignor's right, title and interest
in and to the Intangible Property, as that term is defined in that
certain Purchase and Sale Agreement dated ________, 1994, entered into
by and between Assignor, as seller, and Assignee, as buyer, concerning
real property known as 554 and 556 Gibralter Drive, Milpitas, Santa
Clara County, California, including but not limited to those items
identified in Appendix 1, attached hereto.
Assignor represents, warrants and covenants to and with
Assignee, to the best of Assignor's actual knowledge, as follows:
1. With respect to all of the Intangible Property, Assignor is
the sole owner thereof, and its ownership interest therein is not
encumbered, pledged, assigned, transferred or hypothecated in any
manner whatsoever, nor subject to the interest of any third person or
anyone else.
2. This Assignment shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and
assigns.
3. If Assignor or Assignee is required to employ counsel to
enforce any of the terms of this Agreement or for damages by reason of
any alleged breach of this Agreement or for a declaration of rights
hereunder, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and court costs incurred therein.
ASSIGNOR
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
a New Jersey corporation
By:
By:
ASSIGNEE
BEDFORD PROPERTY INVESTORS, INC.
a Maryland corporation
By:
By:
EXHIBIT G
FORM OF TENANT ESTOPPEL CERTIFICATE
TO: Bank of American National Trust
and Savings Association ("Bank")
Commercial Real Estate Services Division #8940
50 California Street, 11th Floor
San Francisco, CA 94111
Attn: P. Wong
Re: Lease Dated: *
Current Landlord: *
Current Tenant: *
Square Feet: *
Floor(s): *
Located at: *
**** ("Tenant") hereby certifies that as of _______, 1994:
1. Tenant is the present owner and holder of the tenant's interest
under the lease described above, as it may be amended to date (the
"Lease") with Bedford Property Investors, Inc., a Maryland corporation
as Landlord (who is called "Borrower" for purposes of this
Certificate). The original landlord under the Lease was ________, a
(general partnership, corporation, etc.) and the original tenant under
the Lease was ___________. The Lease covers the premises commonly
known as (use address as noted above for "Located at:") (the
"Premises") in the building (the "Building") at the address set forth
above.
2. (a) The attached Exhibit A accurately identifies the Lease and
all modifications, amendments, supplements, side letters, addenda and
riders of and to it.
(b) The Lease provides that in addition to the Premises, Tenant
has the right to use or rent _____ unassigned parking spaces near the
Building or in the garage portion of the Building during the term of
the Lease.
(c) The term of the Lease commenced on __________ and will
expire on __________, including any presently exercised option or
renewal term. Tenant has no option or right to renew, extend or
cancel the Lease, or to lease additional space in the Premises or
Building, or to use any parking other than that specified in Section
2(b) above.
(d) Tenant has no option or preferential right to purchase all
or any part of the Premises (or the land of which the Premises are a
part.) Tenant has no right or interest with respect to the Premises
or the Building other than as Tenant under the Lease.
(e) The annual minimum rent currently payable under the Lease
is $ _______ and such rent has been paid through ________, 199___.
(f) (IF APPLICABLE) Additional rent is payable under the Lease
(i) operating, maintenance or repair expenses, (ii) property taxes,
(iii) consumer price index cost of living adjustments, or (iv)
percentage of gross sales adjustments (i.e. adjustments made based on
underpayments of percentage rent). Such additional rent has been paid
in accordance with Borrower's rendered bills through _______, 19___.
The base year amounts for additional rental items are as follows: (1)
operating maintenance or repair expenses $_____, (2) property taxes
$______, and (3) consumer price index (please indicate base year CPI
level).
(g) Tenant has made no agreement with Borrower or any agent,
representative or employee of Borrower concerning free rent, partial
rent, rebate of rental payments or any other similar rent concession
except as expressly set forth in Paragraph ____ of the Addendum to
Lease as described herein in Exhibit A.
(h) Borrower currently holds a security deposit in the amount
of $_______ which is to be applied by Borrower or returned to Tenant
in accordance with Paragraph ____ of the Lease. Tenant acknowledges
and agrees that Bank shall have no responsibility or liability for any
security deposit, except to the extent that any security deposit shall
have been actually received by Bank.
3. (a) The Lease constitutes the entire agreement between Tenant
and Borrower with respect to the Premises, has not been modified,
changed, altered or amended an is in full force and effect in the form
described in Exhibit A. There are no other agreements, written or
oral, which affect Tenant's occupancy of the Premises.
(b) All insurance required of Tenant under the Lease has been
provided by Tenant and all premiums have been paid.
(c) To the best knowledge of Tenant, no party is in default
under the Lease. To the best knowledge of Tenant, no event has
occurred which, with the giving of notice or passage of time or both,
would constitute such a default.
(d) The interest of Tenant in the Lease has not been assigned
or encumbered. Tenant is not entitled to any credit against any rent
or other charge or rent concession under the Lease except as set forth
in the Lease. No rental payments have been made more than one month
in advance.
4. All contributions required to be paid by Borrower to date for
improvements to the Premises have been paid in full and all of
Borrower's obligations with respect to tenant improvements have been
fully performed. Tenant has accepted the Premises, subject to no
conditions other than those set forth in the Lease.
5. Neither Tenant nor any guarantor or Tenant's obligations under
the Lease is the subject of any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships.
6. (a) As used here, "Hazardous Substance" means any substance,
material or waste (including petroleum and petroleum products) which
is designated, classified or regulated as being "toxic" or "hazardous"
or a "pollutant" or which is similarly designated, classified or
regulated, under any federal, state or local law, regulation or
ordinance.
(b) Tenant represents and warrants that it has not used,
generated, released, discharged, stored or disposed of any Hazardous
Substances on, under or about the Building or the land on which the
Building is located (IF APPLICABLE), other than Hazardous Substances
used in the ordinary and commercially reasonable course of Tenant's
business in compliance with all applicable laws, (IF APPLICABLE)
except for such commercially reasonable use by Tenant. Tenant has no
actual knowledge that any Hazardous Substance is present, or has been
used, generated, released, discharged, stored or disposed of by any
party, on, under, in or about such Building or land.
7. Tenant hereby acknowledges that Borrower has encumbered the
property containing the Premises with a Deed of Trust in favor of
Bank. Tenant acknowledges that right of Borrower, Bank and any and
all of Borrower's present and future lenders to rely upon the
statements and representations of Tenant contained in this Certificate
and further acknowledges that any loan secured by any such Deed of
Trust or further deeds of trust will be made and entered into in
material reliance on this Certificate.
8. Tenant hereby agrees to furnish Bank with such other further
estoppels as Bank my reasonably request.
TENANT: ****
By:
Name:
Title:
EXHIBIT H
List of Tenants
Tenant Date of Lease Security Deposit
Semivac 8/3/92 $13,500.00
JM Company 12/19/86, as $10,395.00
amended by a First
Amendment dated 1/31/92,
and as further amended by
a Second Amendment dated 6/9/94
Lifescan 9/1/92 None
Solectron 5/30/93 $18,504.00<PAGE>
EXHIBIT I
List of Employees
NONE
<PAGE>
FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT, dated this
________ day of July 1994, is made between THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA ("Seller") and BEDFORD PROPERTY INVESTORS, INC, a
Maryland corporation ("Buyer"), with respect to the following facts
and circumstances:
A. Buyer and Seller entered into that certain Purchase and Sale
Agreement dated June 15, 1994 (the "Agreement") which provides for the
sale of certain real property situated in Milpitas, California
commonly known as 554 & 556 Gibraltar Drive and an adjacent unimproved
parcel to Buyer.
B. Buyer and Seller wish to amend the Agreement as provided herein.
NOW, THEREFORE, in consideration of the mutual covenants and
promises set forth herein, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms used herein and not
defined herein will have the meanings ascribed to these terms in the
Agreement. From and after the date hereof, the term "Agreement," as
used in the Agreement shall mean the Agreement, as amended by this
Amendment.
2. Letter of Credit. Paragraph 2.D of the Agreement shall be
amended to provide that Seller may draw on the Letter of Credit at any
time prior to the expiry date thereof, beginning on the earlier of (a)
eleven (11) months after the Closing Date, (b) the date of any
bankruptcy filing, receivership or other insolvency proceeding is
initiated against Buyer or (c) such earlier date as Seller may have a
reasonable good faith belief that Buyer has repudiated its obligation
to reimburse the Issuer under the Letter of Credit.
3. Additional Payment. Paragraph 2.E of the Agreement is
hereby amended to provide that no Additional Payment shall be
required, notwithstanding the extension of the Closing Date provided
in this Amendment.
4. Close of Escrow. Paragraph 3 of the Agreement is modified
to provide that the Closing Date shall occur no later than August 15,
1994.
5. No Other Amendment. Buyer and Seller agree that except as
amended by this Amendment, all of the terms and conditions of the
Agreement shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the Buyer and Seller have executed this
Amendment on the date indicated above.
SELLER:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA,
a New Jersey corporation
By: Earl M. Conklin
Its: Vice President
BUYER:
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By: Robert E. Pester
Its: Vice President
