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Sample Commercial Escrow Instructions
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Comprehensive Instructions
Escrow No: 12345 Date: October 1, 1998 Officer: Robinson & Heath Fax Number: 282-5201 ESCROW INSTRUCTIONS These Escrow Instructions ("Instructions") are made and entered into as of October 1, 1998, by and between ABC Partnership, a California limited partnership ("Seller") and Jack Riley ("Buyer"). RECITALS A. Seller and Buyer entered into a Purchase and Sale Agreement and Joint Escrow Instructions dated September 24, 1998 (the "Agreement"). The Agreement relates to the sale of certain real property and improvements thereon commonly known as 700 W. Broadway, San Diego, CA. 92101 Broadway Office Center (the "Property"). B. Seller and Buyer now wish to: establish an escrow with Chicago Title Company to implement certain terms contained in the Agreement; reduce their understandings to writing as to the modification of certain terms and conditions of the Agreement; and provide written escrow instructions to Chicago Title ("Escrow Holder"). Now, Therefore the parties agree as follows: AGREEMENTS 1. Notice of Licensing Agency. As required by California State law, the parties are hereby notified that CHICAGO TITLE COMPANY is licensed by the California Department of Insurance. 2. Agreement as Escrow Instructions. The parties have deposited an executed copy of the Agreement into this escrow and hereby instruct Escrow Holder that the terms and provisions of the Agreement are fully incorporated herein. Escrow Holder accepts the Agreement, provided that it is understood and agreed that all responsibilities and duties of Escrow Holder are set forth in these Instructions and Escrow Holder shall have no concern or liability with other provisions of the Agreement, which may not be set forth herein. These Instructions do not cancel or supersede any terms of the Agreement which are not set forth herein, or in any amendment to these Instructions. 3. Opening and Closing of Escrow: The "Opening of Escrow" is October 1, 1998. The "Close of Escrow" shall be on or before October 30, 1998. 4. Terms: Buyer shall purchase the Property from Seller pursuant to the following terms:
4.1. Cash: Buyer has deposited the sum $ 50,000.00 into this escrow and upon satisfaction of due diligence items, as further described herein, Buyer will deposit the further sum of $50,000.00 into escrow. Prior to the close of escrow, but at least one business day prior to such closing, Buyer will deposit the balance of $650,000.00 in the form of either a Cashier’s Check or a Federal Wire Transfer. 4.2. New Loan: Buyer will cause Escrow Holder to receive the sum of $1,750,000.00 from the proceeds of a new loan, to be obtained by Buyer, in favor of a lender to be determined ("Lender"). Said loan shall be secured by a First Trust Deed against the Property. Escrow Holder is to comply with the instructions received from lender and Buyer’s signatures on the Lender’s final loan documents will be Buyer’s full approval of all terms and conditions contained therein. 5. Title Insurance: Each party will hand you any funds and/or instruments required from them to enable you to comply with these instructions, and to enable you to procure assurance of title in the form of a CLTA Owner’s Policy of Title Insurance with liability equal to the Purchase Price. Said CLTA Policy to be at Seller’s expense, however any Lender’s ALTA Policy of Title Insurance, which may be required by a new lender, shall be at Buyer’s expense. Buyer has the option to pay the additional cost to upgrade the Owner’s Policy to an ALTA, provided Buyer will also pay the cost of a survey as required by the title company. Said title insurance is to be issued by Chicago Title Company ("Title Company") in its usual form covering the Property, the full legal description of which shall be as set forth in the Preliminary Report of Title to be issued by the Title Company.. The Title Insurance Policies shall be subject to the following: Insured/Vesting: Jack Riley or assignee Buyer will advise exact vesting instructions Free of Encumbrances EXCEPT: (a) Current County of San Diego real property taxes, which are not now due or payable, including bonds or assessments that may be included with said taxes. (b) The lien of supplemental taxes, if any, assessed pursuant to the provisions of Chapter 498, Statutes of l983 of the State of California. (c) Easements, right of ways, conditions, restrictions and reservations of record, including so-called zoning ordinances, and also including mineral exceptions without the right of surface entry. (d) The lien of and Trust Deed(s) which are described in these escrow instructions. 6. Documents to be Deposited: In addition to other documents, which may be required by Escrow Holder to comply with these instructions, the parties will deposit the following documents into escrow prior to close: 6.1. Grant Deed: Seller will deposit a Grant Deed, in favor of Buyer, which shall be recorded at the close of this escrow.. 6.2. Rent Roll: Seller will provide Escrow Holder with a complete and accurate tenant rent roll for the subject property which shall include all rents and/or lease payments, any security deposits or advance rents and any common area maintenance fees or expenses that are paid by tenants. A copy of the rent roll shall be provided to Buyer for approval. Escrow Holder shall use this rent roll as the basis for the prorations between the parties at the close of escrow, with all deposits or advance rents being credited to Buyer. Only actual collected rents will be prorated and prorates will be based on the actual number of the days in the month of closing. 6.3. Tax Affidavit: Seller will deposit affidavits that, for purposes of taxation and tax withholding, Seller is a United States Taxpayer and a California Resident. Upon close of escrow Buyer will be provided copies of such Tax Affidavits. 6.4. 1099 RE Reporting Form: As required by Internal Revenue Regulations, Seller shall execute and provide information to Escrow Holder to enable Escrow Holder to properly report this sale to the Internal Revenue Service. 6.5. Entity Documents: If the Seller or the Buyer is a corporation, a partnership, a trust or a limited liability company, that party shall provide Escrow Holder with copies of required documents, relative to such entity and closing shall be subject to the Title Company’s approval of said documents. 6.6. Assignment of Leases: Seller will deposit an assignment of any tenant leases and/or rental agreements ("Lease Assignment"), in favor of Buyer as assignee. Prior to close Buyer will execute a counterpart copy of the Lease Assignment. At close of escrow the original executed Lease Assignment shall be delivered to Buyer and Seller shall be provided with a copy. The Lease Assignment shall be in the form of Exhibit D of the Agreement. 6.7. Bill of Sale: Seller will deposit a bill of sale ("Bill of Sale") with an inventory attached for all personal property included in this sale. Prior to the close of escrow Buyer is to approve a copy of the Bill of Sale. At close of escrow the original executed Bill of Sale shall be delivered to Buyer and Seller shall be provided with a copy. The Bill of Sale shall be in the form of Exhibit G of the Agreement. 6.8. Assignment of Contracts: Seller will deposit an assignment of any service contracts or intangibles ("Contracts Assignment"), in favor of Buyer as assignee. Prior to close Buyer will approve and execute a counterpart copy of the Contracts Assignment. At close of escrow the original executed Contract Assignment shall be delivered to Buyer and Seller shall be provided with a copy. The Contracts Assignment shall be in the form of Exhibit E of the Agreement. 6.9. Certificate of Representations and Warranties: Seller will deposit an a Certificate of Representations and Warranties ("Seller’s Certificate"). At close of escrow the original executed Seller’s Certificate shall be delivered to Buyer and Seller shall be provided with a copy. The Seller’s Certificate shall be in the form of Exhibit F of the Agreement. 6.10. Tenant Notice Letters: Seller will deposit tenant notice letters ("Tenant Notices"). At close of escrow the original executed Tenant Notices shall be delivered to Buyer and Seller shall be provided with a copy. The Tenant Notices shall be in the form of Exhibit H of the Agreement. 7. Additional Terms and Provisions: 7.1. Buyer’s Due Diligence and Additional Deposit: As provided in Section 3 of the Agreement, Buyer shall have until on or before 5:00 P.M. on October 18, 1998, to deposit a written notice of approval of all due diligence items ("Approval Notice") and an additional deposit of $50,000.00 ("Additional Deposit"), into escrow. The Additional Deposit must be in the form of a Cashier’s Check for a Federal Wire Transfer. A) Immediately upon receipt of the Approval Notice and the Additional Deposit, Escrow Holder is to immediately, without the requirement for any further instructions RELEASE the Additional Deposit of $50,000.00 and the original deposit of $50,000.00, for a total of $100,000.00, TO THE SELLER. B) If Escrow Holder has NOT received the Approval Notice or the Additional Deposit by 5:00 PM on October 18, 1998, Escrow Holder is to AUTOMATICALLY, without the requirement for any further instructions, CANCEL this escrow and return the initial deposit of $50,000.00 to the Buyer. C) Buyer and Seller have specifically instructed Escrow Holder to comply with the above provisions. Buyer and Seller indemnify and hold Escrow Holder harmless for any liability, of any kind or nature, for the release of the Buyer’s funds or the cancellation of the escrow, as provided above. BUYER INITIAL _____ SELLER INITIAL _____ 7.2 Seller's Exchange Provision: It is the intention of Seller herein to effect an exchange pursuant to Section l03l of the Internal Revenue Code of l986. To effect such exchange Seller reserves the right to assign their position herein to another party, who shall act as the qualified intermediary for said exchange. Buyer agrees to cooperate fully in Seller's exchange provided that Buyer is to be at no additional expense or liability for Seller’s exchange and Seller's exchange is not to delay the close of this transaction. 8. Prorates and Costs: Escrow Holder is to allocate closing costs and to calculate prorates based on the following: 8.1. Prorates: All prorates shall be as of the date of Close of Escrow, based on a 365 DAY YEAR. Real property tax prorates shall be based on the latest information available. All prorates relating to tenant items shall be prorated per the Rent Roll to be deposited by Seller, previously described herein. Unless Escrow Holder is notified to the contrary, Buyer will obtain new fire and liability insurance coverage. If Buyer assumes any existing loans, now against the property, Escrow Holder will prorate any interest or impounds relative to such loan. 8.2. Closing Costs: Seller shall pay the premium for the CLTA Owner’s Title Insurance Policy, any Documentary Transfer Tax, one-half of the escrow fee, and costs related to any existing liens against the Property, required to be paid to place title in the condition called for herein. Buyer shall pay any title insurance fees in connection with the new loan or upgrading the CLTA policy to an ALTA policy, recording fees and one-half of the escrow fee. Any other fees or costs shall be paid in the manner customary in Southern California real property closings. 9. General Provisions. By signature hereon the parties hereby approve Escrow Holder’s General Provisions, a copy of which is attached hereto as Exhibit "A". 10. Fax Signatures. In the event Buyer or Seller utilize "facsimile" transmitted signed documents, Buyer and Seller hereby agree to accept and instruct Escrow Holder to rely upon such documents as if they bore original signatures. Buyer and Seller hereby acknowledge and agree to provide to Escrow Holder, within 72 hours of transmission, such documents bearing the original signatures. Buyer and Seller further acknowledge and agree that documents necessary for recording with non-original (facsimile) signatures will not be accepted for recording by the County Recorder, thus delaying the close of escrow. 11. Counterparts. These Instructions may be executed in any number of identical counterparts, and each counterpart hereof shall be deemed to be an original instrument, but all counterparts hereof taken together shall constitute but a single instrument. 12. Attorney Closing Instructions If either party is represented by an attorney, the party authorizes Escrow Holder to accept instructions from their attorney as if said instruction had come directly from the party. IN WITNESS WHEREOF, these Instructions have been executed by the parties effective as of the date indicated above.
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