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): July 10, 1997
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 offices)
Registrant telephone number, including area code: (510) 283-8910
Item 2. Acquisition or Disposition of Assets
On July 10, 1997, the Company purchased Orillia Office Park, a
334,255 square foot, five-building office complex in Renton,
Washington, from David and Sandra Sabey. The acquisition of
$32,500,000 was financed with borrowings from the Company's credit
facility with Bank of America.
Item 7. Financial Statement and Exhibits:
(A) Financial Statements
Required financial information disclosures with respect to
the acquisition of Orillia Office Park will be filed by
amendment to this Form 8-K within sixty (60) days of the
date of this report.
(B) Pro forma Financial Information
Required pro forma financial information disclosures with
respect to the acquisition of Orillia Office Park will be
filed by amendment to this Form 8-K within sixty (60) days
of the date of this report.
(C) Exhibit and Exhibit Index
10.16 Purchase and Sale Agreement dated as of June 9,
1997, by and between Bedford Property Investors,
Inc., as Buyer, and David and Sandra Sabey, as
Sellers for Orillia Office Park.
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: /s/ Peter B. Bedford
Peter B. Bedford
Chief Executive Officer and
Chief Financial Officer
Date: July 23, 1997
EXHIBIT 2.1
AGREEMENT OF PURCHASE AND SALE
1. SALIENT TERMS
1.1 Date. June 9, 1997
1.2 General Location. Boeing Orillia Office Park
5 Building Office Complex
(approx. 334,255 square feet of
rentable floor area) located at
the corner of Lind Avenue and
S.W. 39th Street, Renton,
Washington.
1.3 Parties. Buyer:
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
270 Lafayette Circle
Lafayette, CA 94549
Facsimile No.: (510) 283-5697
Seller:
DAVID SABEY and SANDRA SABEY
101 Elliot Avenue West, Suite 330
Seattle, WA 98119-4220
Facsimile No. (206) 282-9951
1.4 Purchase Price. $32,500,000.00 Cash
1.5 Deposit. (a) Form: Cash
(b) Initial Amount: $200,000
1.6 Escrow Holder. First American Title Guaranty
1850 Mt. Diablo Blvd., Suite 300
Walnut Creek, CA 94596
1.7 Scheduled Closing Date. Two (2) days after Contingency
Period expiration. Estimated
Closing Date is July 10, 1997
1.8 Contingency Period. The period from the Effective
Date to the Contingency Period
expiration date of July 8, 1997
1.9 Intentionally Omitted.
1.10 Trade Style or Name. Boeing Orillia Office Park
2. DEFINITIONS
"Agreement." This Agreement of Purchase and Sale.
"Closing" or "Close of Escrow." Recordation of the Deed and
disbursing of funds from the Escrow in consequence thereof, other than
any holdbacks pursuant to this Agreement.
"Closing Date." The date upon which the Close of Escrow occurs.
"Code." The Internal Revenue Code of 1954 as amended.
"Contingency Period." The period of time specified in Section 1.8,
subject to extension as provided in Section 9.1(c).
"Deed." The Bargain and Sale Deed conveying title to the Realty
as provided in Section 7.5(a).
"Deposit." The amount described in Section 1.5 as may be increased
from time to time in accordance with the provisions of Section 6.3.
"Disapproved Exceptions." The exceptions to title described in the
Preliminary Report to which Buyer objects by written notice to Seller
within the Review Period.
"Environmental Laws." (See "Hazardous Materials" below.)
"Escrow." That certain escrow to be opened with the Escrow Holder
in respect of this Agreement and the Closing thereof.
"Escrow Holder." The company described in Section 1.6.
"Hazardous Materials." Any wastes, materials or substances
(whether in the form of liquids, solids or gases, and whether or not air-
borne), which are or are deemed to be pollutants or contaminants, or
which are or are deemed to be hazardous, toxic, ignitable, reactive,
corrosive, dangerous, harmful or injurious, or which present a risk, to
public health or to the environment, or which are regulated by or under
the authority of any applicable local, state or federal laws, judgments,
ordinances, orders, rules, regulations, codes or other governmental
restrictions, guidelines or requirements, any amendments or successor(s)
thereto, replacements thereof or publications promulgated pursuant
thereto (collectively "Environmental Laws").
"Improvements." All buildings, fixtures (including without
limitation mechanical, heating, ventilation and air conditioning systems)
and other improvements now located upon the Realty described in Exhibit
A.
"Intangible Property." All signs, logos, trade names or styles
relating to the trade name specified in Section 1.10, if any, owned by
Seller as of the Closing Date.
"Leases." All Leases with Tenants in effect as at date hereof or
which are executed subsequent to date hereof in accordance with the
provisions of Section 10.1 which are to be assigned to Buyer upon
Closing.
"Personal Property." All furniture, Personal Property, machinery,
apparatus and equipment owned by Seller and located upon the Realty,
including that property listed in the inventory attached hereto as
Exhibit B and incorporated herein by reference.
"Preliminary Report." A report of the status of title issued by
Escrow Holder's title insurance divisions describing the state of title
to the Property.
"Property." The Realty, the Improvements, all appurtenances
thereto, the Personal Property, the Leases and the Service Contracts.
"Purchase Price." The amount stated in Section 1.4.
"Realty." All that certain real property generally described in
Section 1.2 and more particularly described in Exhibit A attached hereto
and made a part hereof by reference together with the Improvements now
located thereupon and all mineral rights, easements, hereditaments and
appurtenances pertaining thereto.
"Review Period." The period during which Buyer shall complete its
review of the Preliminary Report together with copies of all instruments
giving rise to the exceptions contained therein, which Review Period
shall expire on June 24, 1997.
"Service Contracts." All contracts to be assumed by Buyer which
may be necessary to operate the Property including without limitation
utility contracts, water and sewer contracts, maintenance contracts,
management contracts, certificates of occupancy, permits, soils reports
and any other contracts or documents of any nature relating to the
Property which are to be assigned by Buyer at the closing.
"Situs State." The state in which the Property is located.
"Tenants." All the Tenants under the Leases.
3. PARTIES
On the date specified in Section 1.1 hereof, the parties specified
in Section 1.3 hereof have entered into this Agreement.
4. PROPERTY
Subject to all of the terms, conditions and provisions of this
Agreement, and for the consideration herein set forth, Seller hereby
agrees to sell and Buyer hereby agrees to buy the following:
(a) the Realty;
(b) the Personal Property;
(c) all Leases, Service Contracts, Lease deposits and
whatever rights of any kind and nature relating to the Property which are
owned or possessed by Seller and which may be necessary to operate the
Property.
5. PURCHASE PRICE
The Purchase Price shall be paid in cash on the Closing Date at
which time the Property shall be delivered to Buyer as hereinafter
described.
6. DEPOSIT
6.1 On Execution. Upon the opening of Escrow by Buyer, Buyer
shall place the Deposit with the Escrow Holder. The Deposit shall be
placed in an interest bearing account at the direction of Buyer. All
interest earned on such account shall belong to and be remitted to Buyer.
6.2 Early Release to Buyer. Seller agrees that until the
expiration of the Contingency Period as hereinafter defined, the Escrow
Holder is directed and authorized to take instruction solely from Buyer
regarding the release of the Deposit, and Seller does hereby so instruct
the Escrow Holder. In the event of an early release of the Deposit to
Buyer upon the request of Buyer, this Agreement shall terminate. The
Escrow Holder shall release the Deposit to Buyer, or apply the Deposit
to the Purchase Price, at the option of Buyer, upon Close of Escrow.
6.3 Intentionally Omitted.
6.4 Deposit as Liquidated Damages. IN EVENT THE SALE OF THE
PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF A
DEFAULT UNDER THIS AGREEMENT, SOLELY ON THE PART OF BUYER, THE DEPOSIT
(INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL BE PAID
TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE
THAT SELLER'S ACTUAL DAMAGES IN EVENT OF A DEFAULT BY BUYER WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY
INITIALING BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT, PLUS
INTEREST, HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES AS SELLER'S EXCLUSIVE REMEDY
AGAINST BUYER IN THE EVENT OF A DEFAULT ON THE PART OF BUYER, PROVIDED
BUYER, UPON THE WRITTEN REQUEST OF SELLER, PROMPTLY PROVIDES WRITTEN
NOTICE THAT BUYER HAS NO CLAIMS AGAINST THE PROPERTY OR THE SELLER
ARISING OUT OF THIS PURCHASE AND SALE AGREEMENT OR THIS TRANSACTION.
BUYER: /s/Bob Pester SELLER: /s/David Sabey
7. ESCROW
7.1 Opening of Escrow. Within two (2) business days after the
execution of this Agreement by both parties, a signed copy of this
Agreement shall be deposited by Buyer with the Escrow Holder in order to
open the Escrow. References herein to the opening of Escrow shall mean
the date that a copy of this Agreement is deposited with Escrow Holder.
By such deposit, Escrow Holder is hereby authorized and instructed to act
in accordance with the provisions of this Agreement, which Agreement
together with Escrow Holder's standard general provisions, shall
constitute Escrow Holder's Escrow instructions. Seller and Buyer shall
each deposit such other instruments and funds as are necessary to close
the Escrow and complete the sale and purchase of the Property in
accordance with the terms hereof.
7.2 Closing Date. The Escrow is scheduled to close at the offices
of the Escrow Holder, as specified in Section 1.7 after satisfaction of
all conditions set forth in this Agreement unless extended by the mutual
written agreement of both parties. Time is specifically a matter of
essence with respect to the Closing Date, which may not be extended
except by mutual consent of the parties. If Escrow shall fail to close
because of failure of Buyer to comply with its obligations hereunder, the
costs incurred through the Escrow to the date the Escrow is terminated,
including the cost of the Preliminary Report, shall be paid by Buyer.
If the Escrow shall fail to close because of failure of Seller to comply
with its obligations hereunder, such costs, without limitation of Buyer's
remedies, shall be paid by Seller. If the Escrow should fail to close
for any other reason, the cost of terminating the Escrow shall be divided
between the parties.
7.3 Execution of Additional Instructions. The obligations of each
party which are herein agreed to be undertaken by each party in the
Escrow shall be and are hereby made agreements of such party in and under
this Agreement independent of the Escrow. If any requirements relating
to the duties or obligations of Escrow Holder hereunder are not
acceptable to Escrow Holder, or if Escrow Holder requires additional
instructions, the parties agree to make such deletions, substitutions and
additions to these Escrow instructions relating to such duties or
obligations of Escrow Holder or clarification of these instructions as
counsel for Seller and for Buyer shall mutually approve, and which do not
substantially change this Agreement or its intent. Seller and Buyer
agree to perform, observe and fulfill the requirements of this Agreement
notwithstanding said deletions, substitutions or additions to said Escrow
instructions.
7.4 Closing Costs. Subject to the provisions of Section 7.2
above, the expenses of the Escrow and Closing shall be paid pursuant to
Section 7.9.
7.5 Documents to be Delivered by Seller. At the Closing Seller
shall deposit into Escrow, for delivery to Buyer at the Close of Escrow,
the following documents:
(a) The Deed fully executed, in recordable form, sufficient
to convey marketable and insurable fee simple title to the Realty as
previously approved by Buyer, in form reasonably satisfactory to Buyer.
(b) The assignment of leases described in Subsection (n)
below and the security deposits related thereto in the form of Exhibit
C.
(c) The Tenant estoppel certificates described in
Section 10.2.
(d) Notices to Tenants under the Leases, in the form of
Exhibit E attached hereto, duly executed by Seller.
(e) The assignment of contracts described in Sections 7.7(c)
and 11.2 (to the extent agreed to be assumed by Buyer).
(f) The assignment of warranties described in Section 11.3.
(g) The bill of sale for all Personal Property in the form
attached hereto as Exhibit F.
(h) A Certificate from the Secretary of State of the Situs
State indicating that, as of a recent date there are no filings against
Seller in the office of the Secretary of State under the Situs State
Uniform Commercial Code which are a lien on any of the Personal Property.
(i) A rent roll, current as of the Closing Date, containing
the information updating Exhibit D.
(j) An assignment to Buyer of all permits, licenses and
certificates of occupancy held by Seller relating to the Property or
required from governmental authority as a condition to operation or
occupation of the Property or any part thereof, together with the
originals or true copies thereof.
(k) An assignment to Buyer of Seller's right, title and
interest in the trade name described in Section 1.10 and all logos,
signs, trademarks, telephone listing and number and similar items.
(l) Such funds necessary to comply with Seller's obligations
hereunder regarding prorations and assignment of Tenant security
deposits.
(m) All Tenant correspondence, keys, books, records (or
copies thereof) and other items in Seller's possession or control used
in connection with the day-to-day operation of the Property.
(n) The original executed copy of each Lease (including any
amendments), or, if the original executed copy of any Lease cannot be
located, a copy of such Lease certified as true and correct by Seller.
Such Leases may be delivered to Buyer at the Property and need not be
physically present at the Closing.
(o) The affidavit or the qualifying statement described in
Section 9.4
(p) The certificate specified in section 12.1(a)(xii).
All assignments and other documents hereinabove described shall be
in a form reasonably satisfactory to Buyer's and Seller's counsel.
7.6 Buyer. At the Closing Buyer shall deposit into Escrow the
Purchase Price, as adjusted in accordance with Sections 6.2 and 7.7.
7.7 Closing and Prorations.
(a) Subject to the terms of this Section 7.7, all revenues
and all expenses of the Property shall be prorated and apportioned as of
12:01 a.m. on the Closing Date, so that Seller shall bear all expenses
with respect to the Property and shall have the benefit of all income
with respect to the Property through and including midnight of the day
preceding the Closing Date. Any revenue or expense amount which cannot
be ascertained with certainty as of the Closing Date shall be prorated
on the basis of the parties' reasonable estimates of such amount (other
than reimbursements for operating expenses not billed currently to
Tenants) and shall be the subject of a final proration thirty (30) days
after the Closing Date or as soon thereafter as the precise amounts can
be ascertained. A statement setting forth such agreed prorations shall
be delivered to Escrow Holder. Escrow Holder shall not be required to
calculate any prorations.
(b) Prepaid rents under the Leases shall be credited to
Buyer. Credits for free rents, concessions, lease takeovers and similar
matters, and any out-of-pocket payments required to be paid under the
Leases by the landlord thereunder, including, without limitation, tenant
improvement and refurbishment allowances or costs (including those for
cabling), in either case not previously paid or satisfied prior to the
Closing Date, shall be chargeable to Seller by way of a credit to Buyer
against the Purchase Price. Any obligations of Seller, as landlord under
the Leases, for broker's commissions, whether or not currently due or
payable (including, without limitation, commissions payment of which is
contingent upon renewals and/or the exercise of options or acceptance of
space), shall be chargeable to Seller by way of a credit to Buyer against
the Purchase Price, or, at Seller's election, paid by Seller through
Escrow.
(c) Expenses to be prorated shall include taxes (including
personal property taxes on the Personal Property and the current annual
installment of any special assessments against the Realty), water rates
and sewer rents, if any, payments under any Service Contracts (provided
that any delinquent payments owing to Seller shall be treated in the same
manner as delinquent rents), gas, electricity and other utility charges,
any unfixed meter charges, if any (apportioned on the basis of the last
meter reading), license and permit fees and other expenses customarily
prorated. If possible, in lieu of prorating, utilities and other
expenses shall be contracted for in the name of Buyer as of the Closing
Date.
(d) Final proration of operating expenses which are
reimbursable by any present Tenant of the Property or any portion thereof
shall not be prorated hereunder (except to the extent that Seller is due
a credit for having already paid such expense). Buyer shall send
customary statements for reimbursement of operating expenses and taxes
to Tenants under the Leases after consulting with Seller with respect to
appropriate amounts due therefor and shall remit to Seller, upon receipt,
Seller's prorated share thereof, by allocating to Seller the product of
the apportionable item for the entire billing period multiplied by a
fraction, the numerator of which is the number of days within the
specified billing period which occur before the Closing Date and the
denominator of which is the number of days in the specified billing
period.
7.8 Payment of Adjustments to Proration. Either party owing the
other party a sum of money based on adjustments made to prorations after
the Closing Date shall promptly pay that sum to the other party, together
with interest thereon at the rate of the lesser of (i) the maximum
interest rate permitted by law in the Situs State or (ii) thirteen and
one-half percent (13.5%) per annum, to the date of payment if payment is
not made within ten (10) days after mutual agreement of the amount due.
7.9 Costs and Expenses. Buyer shall receive a credit against the
cash required to fund the Purchase Price for the total sum of any
security deposits paid to Seller by Tenants under any Leases. Seller
shall pay the costs, if any, due for the existing survey of the Realty,
the premium for the Title Policy allocable to the CLTA standard coverage
and the cost of any documentary or other transfer taxes applicable to the
sale, including sales and excise taxes. Buyer shall pay the ALTA
extended coverage portion of the premium for the Owner's Title Policy and
any special endorsements requested by Buyer. Sales tax, if any, on the
Personal Property and/or the Intangible Property shall be paid by Buyer.
Buyer and Seller shall share equally all other costs and charges of the
Escrow for the sale, including recording fees.
7.10 Roof Repair. Seller has advised Buyer that certain roof
repairs to the building on the Property are required and that the time
period for the completion of the roof repairs will extend beyond the
Closing Date. Prior to the expiration of the Contingency Period, Seller
shall obtain a bid from a licensed roofing contractor for the roof repair
work. The bid, including the roofing contractor, the scope of the roof
repair work and the form of the final contract shall be subject to
Buyer's reasonable approval. The approved contract for the roof repair
work shall be executed by Seller prior to close of Escrow provided that
the rights, warranties and guarantees benefiting Seller under the
contract shall be assignable and shall be assigned to Buyer upon close
of Escrow. The full amount of the contract price shall be deposited by
Seller to Escrow and shall be released to the roofing contractor in
progress payments in accordance with the final contract. The work will
be done by a contractor with a good reputation, with whom Seller is
familiar and Seller warrants to Buyer that the work will be completed and
that no liens will be filed by the contractor, or any other suppliers,
subcontractors, or employees of the contractor, if the progress payments
are made as provided herein.
8. TITLE CONDITION OF THE PROPERTY
8.1 Preliminary Report. As soon as reasonably possible after the
opening of Escrow, Escrow Holder shall deliver to Buyer a Preliminary
Report together with copies of all instruments giving rise to the
exceptions contained in the Preliminary Report. Buyer shall have the
right to object to any exceptions contained in the Preliminary Report
within the Review Period. Should Buyer fail to make any objections by
notice to Seller within the Review Period, the Preliminary Report shall
be deemed approved. In the event Buyer objects to any exceptions
contained in the Preliminary Report, Seller shall have until the Closing
Date to attempt, using diligent, good faith efforts, to clear all
Disapproved Exceptions. Upon receipt of notice of Buyer's Disapproved
Exceptions, Seller shall, as to Disapproved Exceptions other than
recorded liens, undertake to use its best efforts to remove such items
or advise Buyer that it shall not be able to remove such items. Seller
shall obtain and deliver to Escrow Holder a demand for payment from any
lien holder of record whose lien is to be discharged at the Close of
Escrow, and after approval of such demand by Seller, Escrow Holder shall
pay such demand at the Close of Escrow. In the event Seller cannot
remove from title any Disapproved Exception by the Close of Escrow, Buyer
shall have the right to elect one of the following alternatives:
(a) to waive such Disapproved Exceptions and close the
Escrow, or
(b) terminate this Agreement, in which event the Deposit
shall be released to Buyer, or
(c) with respect to any Disapproved Exception(s) which are
monetary liens or which appear of record after the date of this
Agreement, undertake to remove such Disapproved Exception(s) at its own
initiative, in which event this Escrow shall be extended for the time
necessary to complete such removal, but in no event by more than an
additional fifteen (15) days. The cost of such removal shall be paid by
Seller through Escrow.
8.2 Title Insurance. At the Close of Escrow and as a condition
thereto, the title insurer shall issue an ALTA Owners Extended Form (B-
1970) Policy of Title Insurance to Buyer containing such endorsements as
Buyer's counsel may reasonably require, with liability in the amount of
the Purchase Price, showing title to the Realty vested in Buyer, subject
only to the exceptions approved by Buyer pursuant to Section 8.1 above
and to the non-delinquent real property taxes and special assessments
referred to in Section 7.7 above. Indemnification of the title insurer
by Seller or any other party, in order to induce the title insurer to
insure any otherwise Disapproved Exception, or to obtain any endorsement
required by Buyer, shall not be allowed except with the prior written
consent of Buyer after full disclosure to Buyer of the nature and
substance of the indemnity in the matter to be indemnified against.
8.3 Reinsurance. At the request of Buyer and at Buyer's sole cost
and expense, the title insurer shall obtain reinsurance agreements from
such companies as Buyer may direct, which reinsurance agreements shall
be in ALTA Facultative Reinsurance Agreement Form (revised 1961), and
shall include direct access agreements, in such amounts and in such form
as shall otherwise be satisfactory to Buyer.
9. CONDITIONS TO BUYER'S OBLIGATION
9.1 Contingency Period.
(a) As a condition to Buyer's obligation to purchase
hereunder, Buyer shall be entitled to examine the Property, documents,
and other information specified in Section 9.2, along with such other
economic, governmental, development and marketing feasibility, and
physical studies and analyses as Buyer may require, which examination,
analyses and studies shall be completed within the time specified in
Section 1.8. Seller shall cooperate with Buyer and will assist in
obtaining and providing information and access to the Property requested
by Buyer.
(b) Seller shall make diligent, good faith efforts to
provide such information, documents, data, and access no later than five
(5) days from date of execution hereof. The conditions of this Article
9 are for the benefit of Buyer, any or all of which may be waived by
Buyer in writing, at Buyer's sole option.
9.2 Seller's Obligation. Seller has provided to Buyer copies of
items (a), (b), (c), (d) and (e) with respect to the Property and Seller
shall provide Buyer with items (f) and (g):
(a) Level I Environmental reports;
(b) Copies of an ALTA boundary survey of the Property, which
survey is no older than two (2) years as at the date of execution hereof,
and any "as built" mechanical, electrical and structural plans and
specifications, and soils report currently in Seller's possession or
control.
(c) Copies of all Leases affecting the Property, including
a specification of any Landlord obligations arising from the Leases which
may not be described therein, such as, by example, commissions due or
which may become due, construction obligations and the like.
(d) A geotechnical engineering report.
(e) The construction plans and drawings Seller currently has
in its possession or control.
(f) Access to the Property by Buyer, its agents or
representatives to inspect the physical condition of every portion
thereof, including, without limitation, soils reports, geology,
archaeology, Hazardous Materials, asbestos, endangered species,
availability, capacity and costs of utilities.
(g) Any other information pertaining to the Property, which
Seller currently has in its possession or control reasonably requested
by Buyer.
9.3 Notice. During the Contingency Period, Buyer shall notify
Seller in writing as it approves the items described in Section 9.2 (a) -
(e). If Buyer approves all of the above items described in Section 9.2,
which Buyer may do or refuse to do in its sole subjective judgment, it
shall so notify Seller prior to the expiration of the Contingency Period.
If Buyer does not notify Seller that it has approved the above items,
this Agreement shall become null and void upon the expiration of the
Contingency Period, the Deposit shall be returned to Buyer forthwith,
this Agreement shall become null and void and there shall be no further
obligation on the part of either party.
9.4 Foreign Person.
As a condition to the closing of this transaction, Seller
shall deliver to Buyer on the Closing Date (or such earlier date as may
be required pursuant to regulations promulgated by the Secretary of the
Treasury under Section 1445 of the Code) an affidavit of Seller, or an
authorized officer of Seller, sworn under penalty of perjury setting
forth Seller's United States tax identification number and stating that
Seller is not a foreign person, and is an United States Person as defined
in the Code.
(b) It is understood and agreed that in lieu of furnishing
such nonforeign affidavit Seller may furnish to Buyer a qualifying
statement issued by the United States Treasury, at such time and in such
manner and subject to such terms and conditions as may be proscribed by
regulations and promulgated under Code Section 1445. Such qualifying
statement shall be in form and content satisfactory to Buyer's counsel
and shall provide adequate assurance that Seller has met its obligations
with respect to the taxation of foreign persons and entities under the
Code.
(c) If by the Closing Date Seller shall not have furnished
to Buyer either the affidavit specified in paragraph (a) or the
qualifying statement described in paragraph (b) hereof with respect to
this transaction, or such statement is false, Buyer may at its option
either: (i) adjourn the Closing until such time as Seller has complied
with the conditions set forth herein, and such adjournment shall not
place Buyer in default of its obligations hereunder; or, alternatively,
(ii) Buyer may withhold from the Purchase Price payable to Seller at
Close of Escrow and remit to the Internal Revenue Service, a sum equal
to ten percent (10%) of the gross selling price of the Property in
accordance with the withholding obligations imposed upon Buyer pursuant
to Code Section 1445. Such withholding shall not place Buyer in default
under this Agreement, and Seller shall not be entitled to claim that such
withholding shall excuse Seller's performance under the Agreement.
9.5 Intentionally Omitted.
9.6 Waiver. In the event of a breach by Seller of any of its
covenants, representations, warranties or other agreements set forth in
this Agreement, Buyer may elect (i) nevertheless to proceed with the
purchase of the Property, reserving all of its other rights and remedies
available to it under this Agreement or otherwise at law or in equity
including, without limitation, the right to collect damages for such
breach from Seller and the right to indemnification as provided in
Section 14, or (ii) to terminate this Agreement by written notice to
Seller delivered prior to Closing, and upon such termination Buyer shall
be relieved of all further obligations hereunder.
9.7 Approval of Board of Directors. This Agreement is subject to
approval of the Board of Directors of Buyer on or before June 18, 1997.
Buyer shall provide written notice to Seller of satisfaction of this
condition on or before June 18, 1997.
10. TENANT LEASES
10.1 Existing Tenants. All or portions of the Property have
been leased by Seller to various Tenants. Attached hereto as Exhibit D
and incorporated herein by reference is a list of such Tenants, which
list includes the termination date of each Lease, the rent payable
thereunder, any renewal options, and the security deposit, if any, posted
by each Tenant, as of the date of this Agreement. From and after the
date of execution of this Agreement until the Close of Escrow, Seller
agrees that it 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 amend, terminate or accept the surrender of any existing
tenancies or approve any subleases without the prior consent of Buyer.
Further, Seller shall maintain the Property in condition at least as good
as at the time of Buyer's inspection as provided hereunder, and shall not
without first obtaining the written consent of Buyer enter into any
contracts or agreements, or permit any Tenants to enter into any
contracts or agreements pertaining to the Property which require the
consent of Seller unless those contracts can be terminated without
penalty on thirty (30) days' notice. Through Close of Escrow, Seller
shall maintain in full force and effect "All Risk" property insurance in
the amount of at least ninety per cent (90%) of replacement value of the
Property covering the Property without deduction for physical
depreciation, but excluding foundations and footings.
10.2 Estoppel Certificates. Seller shall use its best
efforts to obtain and furnish to Buyer as soon as reasonably possible
and, in any event, no later than the day before the Closing Date,
estoppel certificates from each of the Tenants on Exhibit D, such
estoppel certificates to be substantially in the form attached hereto as
Exhibit G. Such certificates shall verify the information provided by
Seller on Exhibit D 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. In the event that Seller is unable
to obtain an estoppel certificate from any Tenant listed in Exhibit D,
then at the Closing Buyer may, at its option, accept Seller's certificate
for each Lease for which an estoppel certificate is not obtained,
containing a representation that such Lease is in full force and effect,
that there are no modifications or amendments to such Lease except as
delivered to Buyer, that Tenant is not in default thereunder (or stating
such default as may exist) that Seller, as landlord, is not in default
thereunder, and stating the commencement and expiration dates of such
Lease.
10.3 Delinquent Tenants. Nondelinquent rents shall be
prorated up to the Closing Date through the Escrow, based upon schedules
to be given to Escrow Holder by Seller and approved by Buyer. Rents
delinquent at the Closing Date but collected later, shall be prorated to
the Closing Date when collected. Rents collected after the Closing Date
from Tenants whose rental was delinquent at Closing shall be deemed to
apply first to the current rental due at the time of payment and second
to rentals which were delinquent at closing. Rents collected by Buyer
after the Closing Date to which Seller is entitled, shall be promptly
paid to Seller. For a period of ninety (90) days after the Closing Date,
Buyer shall use reasonable efforts to collect all rents which are
delinquent at the Closing Date with no obligation to commence litigation
to collect such rents. Commencing as of ninety-one (91) days after the
Closing Date, Seller may take all steps it deems appropriate, including
litigation, to collect all rents delinquent at the Closing Date which are
still uncollected.
11. MISCELLANEOUS DATA TO BE PROVIDED BY SELLER
11.1 Survey. Seller has delivered to Buyer a current ALTA
survey of the Realty ("Existing Survey"). Buyer shall have the right to
cause to be prepared a survey of the Realty by a licensed land surveyor
in form and substance sufficient to enable the title insurer to issue an
ALTA policy as described in Section 8.2 hereof ("New Survey"). All costs
of the Existing Survey shall be borne by Seller. All costs of any New
Survey or an update of the Existing Survey shall be borne by Buyer.
11.2 Construction Contracts. Within five (5) days of
execution hereof Seller shall provide Buyer with a schedule which sets
forth all obligations for tenant improvement work in progress or
committed to be done in the Improvements as of the date of this
Agreement. Said schedule does not include obligations for routine
maintenance work or periodic remodeling work which may be set forth in
any of the Tenant Leases. Seller shall be responsible for the completion
of any payment for construction as set forth therein. From and after the
date hereof, Seller shall not enter into any new contracts or agreements
for such work without the prior consent of Buyer.
11.3 Assignment of Warranties. At the Closing Seller will
assign to Buyer all warranties which it may have from vendors,
contractors or servicing agents with respect to the physical condition
of the Property.
12. WARRANTIES AND REPRESENTATIONS
12.1 Warranties and Representations by Seller.
(a) Seller hereby makes the following representations,
covenants and warranties and acknowledges that the execution of this
Agreement by Buyer has been made and the acquisition by Buyer of the
Property will have been made in material reliance by Buyer on such
covenants, representations and warranties.
(i) Litigation. To the best knowledge and belief of
Seller, there is presently no claim, litigation, proceeding or
governmental investigation pending or threatened against or relating to
the Property or the transactions contemplated hereby. Seller shall give
Buyer immediate notice of any such claim, litigation, proceeding or
investigation which becomes known to it prior to the Closing Date.
(ii) Compliance with Laws. To the best knowledge and
belief of Seller, no 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, operation or occupancy of the Property
has been given to Seller by any governmental agency having jurisdiction
or by any other person entitled to enforce the same; to the best
knowledge and belief of Seller, the Property conforms to all applicable
ordinances and other laws, orders, ordinances, permits, rules,
regulations and requirements, and to all covenants, conditions and
restrictions affecting or relating to the use, operation or occupancy of
the Property.
(iii) Environmental.
(A) To the best knowledge and belief of Seller,
as of the date of this Agreement and the date of Close of Escrow, Seller
and the Property are not and will not be in violation of any federal,
state or local law, ordinance or regulation relating to industrial
hygiene, soil, water, or environmental conditions on, under or about the
Property including, but not limited to, the Environmental Laws.
(B) To the best knowledge and belief of Seller,
during the period that Seller has owned the Property there has been no
use, presence, disposal, storage, generation, release, or threatened
release (as those terms are used in the Environmental Laws, and
hereinafter collectively referred to as "Use") of Hazardous Materials on,
from or under the Property, except as previously disclosed by Seller to
Buyer in writing.
(C) Seller has no knowledge of any Use of
Hazardous Materials, on, from or under the Property which may have
occurred prior to Seller taking title to the Property, except as
previously disclosed by Seller to Buyer in writing.
(D) During the period that Seller has owned the
Property, there has been no enforcement action or litigation brought or
threatened against Seller or, to the best knowledge and belief of Seller,
the Property, nor any settlements reached by or with any party or parties
alleging the Use of any Hazardous Materials on, from or under the
Property, except as previously disclosed by Seller to Buyer in writing.
(iv) Foreign Person. Seller is not a foreign person and
is a "United States Person" as such term is defined in Section
7701(a)(30) of the Code.
(v) Permits. To the best knowledge and belief of
Seller, Seller has obtained all licenses, permits, easements and rights
of way required from all governmental authorities having jurisdiction
over the Property or from private parties for the use of the Property and
to insure vehicular and pedestrian ingress and egress to the Property.
(vi) Public Improvements. To the best knowledge and
belief of Seller, there are presently no intended public improvements
which will result in any charge being levied or assessed against the
Property or in the creation of any lien upon the Property. Seller shall
promptly notify Buyer of any changes affecting this representation, of
which it becomes aware prior to the Closing Date.
(vii) Condemnation. To the best knowledge and
belief of Seller, there is presently no pending or contemplated
condemnation of the Property or any part thereof. Seller shall promptly
notify Buyer of any changes affecting this representation of which it
becomes aware prior to the Closing Date.
(viii) Utilities. To the best knowledge and belief
of Seller, all utilities necessary to service the Property will be
available to the Property at the Closing Date without the consent of any
other person, firm or corporation and without expense (other than normal
and usual security deposits or bonds) to Buyer.
(ix) Access. To the best knowledge and belief of
Seller, there are no facts or conditions which will result in the
termination of the present access from the Property to any utility
services or to existing highways and roads.
(x) Default. To the best knowledge and belief of
Seller, 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 partner of Seller is required for this Agreement or the
performance of Seller's obligations hereunder.
(xi) Defects. To the best knowledge and belief of
Seller, at the Closing Date, there will be no latent, hidden or
structural defects in the Improvements, nor will any defects or
conditions of the Property or the soil exist which will impair the use
of such Property, nor are there presently, nor will there be in the
future, any encroachments onto the Property or by the Improvements onto
any adjoining Property.
(xii) Subsequent Changes in Conditions. If Seller
becomes aware of any fact or circumstances which would change a
representation or warranty, then Seller will immediately give notice of
such changed fact or circumstance to Buyer, but shall not relieve Seller
of its liabilities or obligations with respect thereto. Seller shall
issue a certificate at the Closing Date stating that all of the
representations and warranties contained in this Section are true and
correct as of said date, except as to facts, if any, concerning which
Buyer was notified in writing.
(xiii) Contracts. At Closing there shall be no
outstanding contracts made by Seller for any improvements to the Property
which have not been fully paid for by Seller.
(xiv) Authority of Seller. Seller has the
authority to own and convey the Property, this Agreement and all
documents executed by Seller which are to be delivered to Buyer at the
Closing are or at the time of Closing will be duly authorized, executed
and delivered by Seller and do not and at the time of Closing will not
violate any provisions of any agreement or judicial order to which Seller
is a party or to which Seller or the Property is subject.
(xv) Brokerage Commissions. Except as set forth in
Exhibit D, there are no commissions, finder's fees or other compensation
owing or which may become owing to any broker or any other person or
entity with respect to any Lease or occupancy agreement including,
without limitation, any such compensation with respect to any future
renewals, extensions or expansions thereof.
(xvi) Labor Contracts. Seller is not party to, or
otherwise bound by, any collective bargaining agreement or multi-employer
pension fund covering employees who service the Property.
(xvii) Labor Disputes. There is no current labor
dispute with any maintenance or other personnel or employees of Seller
or any contracts with respect to the Property which could adversely
affect the use, operation or value of the Property.
(xviii) Property Tax Assessment. Notwithstanding any
other provision of this Agreement to the contrary, if Buyer shall become
liable after the Closing for payment of any property taxes assessed
against the Property for any period of time prior to the Closing Date,
Seller shall immediately pay to Buyer on demand an amount equal to such
tax assessment in accordance with Section 7.8.
(b) Status At and After Closing. All representations and
warranties contained in Subsection (a) of this Section or made in writing
by Seller in connection with the transaction herein provided for shall
be true and correct on the date hereof, and on the Closing Date except
to the extent Buyer has been notified in writing to the contrary after
the date hereof and prior to the Closing Date, and liability for
misrepresentation or breach of warranty or covenant shall survive the
execution and delivery of this Agreement and the Closing. It is agreed
that Buyer's damages resulting from misrepresentation or breach of
warranty or covenant by Seller shall include all loss, damage, liability
or expense, including court costs and reasonable attorney's fees,
reasonably incurred or sustained by Buyer in connection therewith.
(c) Buyer's Rights. Upon notification of any fact which
would change any of the representations or warranties contained herein
or would otherwise constitute a breach thereof, Buyer shall have the
option of (i) waiving the breach of warranty or change, reserving all of
its rights and remedies in respect thereof available at law, or in
equity, or under the terms hereof, (ii) agreeing with Seller to adjust
the terms hereof to compensate Buyer for such change, or (iii) to
terminate this Agreement. If such fact is different because of a
misrepresentation of Seller, then the options of the preceding sentence
shall be in addition to any other remedy available to Buyer at law or in
equity.
As used in this Agreement, the words "to the best knowledge and
belief of Seller" includes the current actual knowledge of Seller.
(d) Buyer and Seller expressly acknowledge and agree that
the representations and warranties of Seller contained in this Agreement
shall survive the Close of Escrow, but any and all liability of Seller
for breach of any such representation or warranty (other than
representations and warranties contained in the Deed, Bill of Sale,
Assignment of Leases and any Assignment of Warranties) shall terminate
and such representations and warranties shall thereafter be null and void
if Buyer or Buyer's Affiliate (as defined in Section 15.8) does not
deliver a written claim of breach, specifying such representation or
warranty which has allegedly been breached on or prior to the date which
is one (1) year after the Close of Escrow.
12.2 Representations of Authority. Each signatory party
hereby represents to the other that this Agreement has been duly executed
by duly authorized officers or general partners of such party and
constitutes a valid, binding and enforceable obligation of such party.
13. DAMAGE, DESTRUCTION AND CONDEMNATION
13.1 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 (i.e.,
"material" shall mean a repair, reconstruction or replacement cost
reasonably estimated to be in excess of ten thousand dollars [$10,000]),
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 material (as defined in
Section 13.1(a)) 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 Closing Date.
13.2 Condemnation. In the event that, prior to the Close of
Escrow, a governmental entity shall commence any action of eminent domain
to take any portion of the Property, Buyer shall have the option either
to (i) elect not to acquire the Property, in which case this Agreement
shall be terminated, or (ii) complete the acquisition of the Property,
in which case Buyer shall be entitled to the proceeds of such taking.
14. INDEMNITY
Seller hereby agrees to indemnify and hold Buyer harmless from and
against any and all loss, claims, damages, penalties, liabilities, costs,
or allegations of any of the foregoing, including all out-of-pocket
litigation costs and the actual fees and expenses of counsel,
investigation and appeal which may arise in connection with any
misrepresentation made by Seller in connection with any certificate or
other instrument furnished or to be furnished by Seller or at its request
hereunder, any breach of Seller's warranties and representations, the
failure of Seller to fulfill any of its covenants or agreements under
this Agreement, or for any cause arising with respect to the Property
prior to the Closing Date, including but not limited to all foreseeable
and unforeseeable consequential damages. The term "Buyer" as contained
herein shall include Buyer, its directors, officers, employees, partners,
joint venturers and agents, and any successors to Buyer's interest in the
chain of title to the Property, its directors, officers, employees,
partners, joint venturers and agents.
15. MISCELLANEOUS
15.1 Attorneys' Fees. In the event of any action between
Buyer and Seller seeking enforcement of any of the terms and conditions
of this Agreement, or in connection with the Property, the prevailing
party in such action shall be awarded, in addition to damages, injunctive
or other relief, its reasonable costs and expenses, including but not
limited to taxable costs and reasonable attorneys' fees.
15.2 Notices. All notices under this Agreement shall be
deemed delivered upon personal delivery to Buyer or Seller, as the case
may be, or five (5) business days after deposit in the United States
mail, registered or certified, postage fully prepaid and addressed to the
respective parties, effective, in the case of mailing, as at the date
deposited in the mail, or on receipt if by reputable courier service
which provides written evidence of delivery, to the addresses stated in
the first paragraph of this Agreement, or such other address as the
parties may from time to time designate in writing. A copy of any notice
to Seller shall be sent to:
Stanley E. Erickson, Esq.
Erickson & Barkshire, P.S.
10801 Main Street, Suite 206
Bellevue, WA 98004
Facsimile No. (425) 455-6076
A copy of any notice to Buyer shall be sent to:
Martin I. Zankel, Esq.
Bartko, Zankel, Tarrant & Miller
900 Front Street, Suite 300
San Francisco, CA 94111
Facsimile No. (415) 956-1152
As a matter of convenience, however, communications between Buyer and
Seller shall, to the extent feasible, be conducted orally, by telephone
or in person, between counsel or other authorized agents of the parties,
with such communications to be confirmed and made effective in writing
as set forth above.
15.3 Entire Agreement. This Agreement and the items
incorporated herein contain all of the agreements of the parties hereto
with respect to the matters contained herein; and no prior agreement or
understanding pertaining to any such matter shall be effective for any
purpose. No provisions of this Agreement may be amended or modified in
any manner whatsoever except by an agreement in writing signed by duly
authorized officers or general partners of each of the parties hereto,
except that any modifications which relate to the adjustment of time
limitations (except the Closing Date) or the form of documents may be
made by legal counsel to the parties.
15.4 Successors. The terms, covenants and conditions of this
Agreement shall be binding upon and shall inure to the benefit of the
heirs, executors, administrators and assigns of the respective parties
hereto.
15.5 Assignment. Neither Buyer nor Seller may assign its
rights hereunder without the prior written consent of the other.
Notwithstanding the foregoing, Buyer may assign its rights hereunder to
a party controlling, controlled by or under common control with Buyer
("Buyer's Affiliate") so long as Buyer covenants to remain responsible
for the full performance hereof through Close of Escrow.
15.6 Choice of Laws. This Agreement shall be governed by the
laws of the State of Washington and any question arising hereunder shall
be construed or determined according to such law.
15.7 Headings. Headings at the beginning of each numbered
section of this Agreement are solely for the convenience of the parties
and are not a part of this Agreement.
15.8 Survival. Seller's obligations pursuant to the
Agreement, and with particular reference, but not limited in any way to
the indemnity set forth in Section 14 shall survive the Close of Escrow
and shall be in addition to any other obligations or liabilities Seller
may have to Buyer at common law or otherwise, and shall survive the
transfer of title to the Property by Buyer. Seller expressly agrees that
the representations and warranties and the indemnity stated herein to
Buyer and the benefits hereunder may not be assigned except to a Buyer's
Affiliate(s), which acquires an interest in the chain of title to the
Property, which Buyer's Affiliate(s) may proceed directly against Seller
to recover pursuant to this Section; provided Seller shall be given
written notice of any such assignment by Buyer or Buyer's Affiliate.
15.9 Counterparts. This Agreement may be signed by the
parties in different counterparts and the signature pages combined to
create a document binding on all parties.
15.10 Brokers and Finders. In connection with the transaction
contemplated by this Agreement, Seller has agreed to pay a brokerage
commission to Cushman & Wakefield of Washington Inc. In the event of a
claim for broker's fee, finder's fee, commission or other similar
compensation in connection herewith other than as set forth above, Buyer,
if such claim is based upon any agreement alleged to have been made by
Buyer, hereby agrees to indemnify and hold Seller harmless against any
and all liability, loss, cost, damage or expense (including reasonable
attorneys' fees and costs) which Seller may sustain or incur by reason
of such claim, and Seller, if such claim is based upon any agreement
alleged to have been made by Seller, hereby agrees to indemnify and hold
Buyer harmless against any and all liability, loss, cost, damage or
expense (including reasonable attorneys' fees and costs) which Buyer may
sustain or incur by reason of such claim. The provisions of this Section
shall survive the Closing.
15.11 No Offer. The submittal or execution of this Agreement,
or a draft thereof, by either party shall not constitute an offer, nor
shall either party be bound to any of the terms hereof until both parties
have executed this document and an original signature copy of such
executed document has been received by each party.
16. EXHIBITS
The following Exhibits are attached hereto and made a part hereof
by reference:
Exhibit A - Legal Description of Realty
Exhibit B - Description of Personal Property
Exhibit C - Assignment of Leases
Exhibit D - Tenant List
Exhibit E - Notices to Tenants
Exhibit F - Bill of Sale
Exhibit G - Estoppel Certificate
IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement
as of the date first above written.
BUYER: SELLER:
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
/s/David Sabey
By: /s/Bob Pester DAVID SABEY
By: /s/Sandra Sabey by David Sabey
SANDRA SABEY By David Sabey, Her
Attorney In Fact
