UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) October 27, 1997
ARDEN REALTY, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-12193 95-4578533
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
9100 Wilshire Boulevard, East Tower, Suite 700 90212
Beverly Hills, California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 271-8600
Item 2. Acquisition or Disposition of Assets
On October 27, 1997, Arden Realty, Inc. (collectively with
its subsidiaries, the "Company") completed a series of
transactions to purchase three suburban office properties
and a six office property portfolio totaling 461,372
rentable square feet. All the properties were purchased
from unaffiliated entities.
Northpoint in Los Angeles, California contains 104,235
rentable square feet. The purchase price for the property
was approximately $21,900,000, which was based on arm's-
length negotiations. The property is presently 94.2%
occupied, at average rents of $32.08 per square foot. The
property was purchased from Howard Hughes Properties Limited
Partnership, a Delaware limited partnership.
145 South Fairfax in Los Angeles, California contains 54,429
rentable square feet. The purchase price of the property
was approximately $7,400,000, which was based on arm's-
length negotiations. The property is presently 97.9%
occupied, at average rents of $18.60 per square foot. The
property was purchased from Fairfax Centre, LLC, a
California limited liability company, Elliot Gottfurcht, a
single man, and Indoprop, LLC, a California limited
liability company.
Bernardo Regency in Rancho Bernardo, California contains
47,916 rentable square feet. The purchase price for the
property was approximately $6,550,000, which was based on
arm's-length negotiations. The property is presently 95.3%
occupied, at average rents of $15.53 per square foot. The
property was purchased from PDG Rancho Bernardo, Ltd., a
California limited partnership.
The six office property portfolio in Thousand Oaks,
California (the "Thousand Oaks Portfolio") contains 254,792
rentable square feet. The purchase price for the Thousand
Oaks Portfolio was approximately $35,100,000, which was
based on arm's-length negotiations. The Thousand Oaks
Portfolio is presently 89.9% occupied, at average rents of
$17.11 per square foot. The Thousand Oaks Portfolio was
purchased from Moshe Silagi and Andrea Silagi, Co-Trustees
of the Silagi Family Trust, Conejo Business Park, LLC, a
California limited liability company, Marin Corporate
Center, LLC, a California limited liability company,
Evergereen Plaza LLC, a California limited partnership,
Hillside Corporate Center, LLC, a California limited
liability company and Westlake Gardens, LLC, a California
limited liability company.
To finance these acquisitions the Company used approximately
$2,550,000 of working capital, borrowed $56,200,000 on its
line of credit from a group of banks led by Wells Fargo Bank
(the "Credit Facility"), assumed a mortgage note payable
secured by 145 South Fairfax of approximately $4,100,000,
and assumed three mortgage notes payable, secured by three of
the properties in the Thousand Oaks Portfolio, with an
aggregate balance of approximately $8,100,000.
Inclusive of these purchases, the Company's portfolio
consists of 67 suburban office properties comprising
9,187,797 rentable square feet and 16 apartment units.
Item 7. Financial Statements and Exhibits
(a) Financial statements of properties acquired.
It is impracticable to provide the required financial
statements at the time of the filing of this report. The
required financial statements for the acquired properties
will be filed as an amendment to this Form within 60 days.
(b) Pro forma financial information.
It is impracticable to provide the required pro forma
financial information at the time of the filing of this
report. The required pro forma financial information will
be filed as an amendment to this Form within 60 days.
(c) Exhibits.
10.53 Agreement for Purchase and Sale of Real Property
by and between Howard Hughes Properties, Limited
Partnership, a Delaware limited partnership, and Arden
Realty Limited Partnership, a Maryland limited
partnership.
10.54 Agreement of Purchase and Sale and Joint Escrow
Instructions by and between Fairfax Centre, LLC, a
California limited liability company, and Arden Realty
Limited Partnership, a Maryland limited partnership.
10.55 First Amendment to Agreement of Purchase and Sale
and Joint Escrow Instruction by and between Fairfax
Centre, LLC, a California limited liability company,
145 South Fairfax, LLC, a California limited liability
company, Elliot Gottfurcht, a single man, and Indoprop,
LLC, a California limited liability company.
10.56 Agreement of Purchase and Sale and Joint Escrow
Instructions by and between PDG Rancho Bernardo, Ltd.,
a California limited partnership and Arden Realty
Limited Partnership, a Maryland limited partnership.
10.57 Agreement of Purchase and Sale and Joint Escrow
Instruction by and between Moshe Silagi and Andrea Silagi,
Co-Trustees of the Silagi Family Trust, Conejo Business
Park, LLC, a California limited liability company, Marin
Corporate Center LLC, a California limited liability
company, and Evergreen Plaza LLC, a California limited
partnership and Arden Realty Limited Partnership, a Maryland
limited partnership.
10.58 First Amendment to Agreement of Purchase and Sale
and Joint Escrow Instruction by and between Moshe
Silagi and Andrea Silagi, Co-Trustees of the Silagi
Family Trust, Conejo Business Park, LLC, a California
limited liability company, Marin Corporate Center, LLC,
a California limited liability company, Evergereen
Plaza LLC, a California limited partnership, Hillside
Corporate Center, LLC, a California limited liability
company and Westlake Gardens, LLC, a California limited
liability company and Arden Realty Limited Partnership,
a Maryland limited partnership.
Signatures
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.
ARDEN REALTY, INC.
Date: November 11, 1997 By: /s/ Diana M. Laing
Diana M. Laing
Chief Financial Officer
AGREEMENT
FOR
THE PURCHASE AND SALE
OF
PROPERTY
between
HOWARD HUGHES PROPERTIES,
LIMITED PARTNERSHIP
and
ARDEN REALTY LIMITED PARTNERSHIP
September 12, 1997
TABLE OF CONTENTS
PAGE #
ARTICLE ONE -1-
PURCHASE AND SALE OF PROPERTY -1-
1.1 Sale of Property -1-
1.2 Definition of Property -1-
1.3 Exclusions -2-
ARTICLE TWO -2-
PURCHASE PRICE -2-
2.1 Purchase Price -2-
2.2 Earnest Money Deposit -2-
2.3 Cash Balance Due -3-
2.4 Investment of Deposit -3-
ARTICLE THREE -3-
ESCROW -3-
3.1 Escrow Instructions -3-
3.2 Definition of "Close of Escrow" -3-
3.3 Operation of Property -3-
3.4 Declaration of Special Land
Use Restrictions -4-
3.5 Auditing -4-
ARTICLE FOUR -5-
CONDITION OF TITLE -5-
4.1 Permitted Exceptions -5-
(a) Preliminary Title Report -5-
(b) Other Matters -5-
(c) Survey Matters -5-
(d) Taxes -5-
4.2 Title Insurance Policy -5-
ARTICLE FIVE -6-
CONDITIONS PRECEDENT TO CLOSE OF ESCROW -6-
5.1 HHP's Conditions -6-
(a) Funds -6-
(b) Default -6-
(c) Assumption of Liability -6-
5.2 Buyer's Conditions -6-
(a) Contingency Period -6-
(b) Title Review Period -7-
(c) HHP Default -8-
(d) Assignment Documents -8-
(e) Survey Review Period -9-
(f) Estoppel Certificates -9-
(g) Casualty or Condemnation -10-
(h) Disclosure of Contracts -10-
ARTICLE SIX -11-
CLOSE OF ESCROW -11-
6.1 Date of Close -11-
6.2 Escrow Cancellation -11-
(a) HHP Default -11-
(b) Buyer Default -11-
6.3 Items to be Delivered into Escrow -12-
(a) By HHP -12-
(b) By Buyer -12-
6.4 Escrow Holder's Instructions -12-
(a) Date Documents -12-
(b) Declaration of Value -12-
(c) Record -13-
(d) Deliver Funds -13-
(e) Deliver Title Policy -13-
(f) Information Return -13-
(g) Assignment and Assumption Documents -13-
6.5 Post-Closing Matters -13-
(a) To HHP -13-
(b) To Buyer -13-
ARTICLE SEVEN -14-
COSTS AND PRORATIONS -14-
7.1 Prorations -14-
7.2 Costs to be Paid by HHP -14-
7.3 Costs to be Paid by Buyer -15-
7.4 "Buyer's Closing Expenses" Defined -15-
ARTICLE EIGHT -15-
BUYER'S REPRESENTATIONS AND WAIVERS -15-
8.1 Authority; Qualification -15-
8.2 Condition of Property; Inspection -15-
ARTICLE NINE -17-
HHP'S REPRESENTATIONS -17-
9.1 Authority -17-
9.2 Contracts -17-
9.3 Rent Roll -17-
9.4 Operating Statements -17-
9.5 Material Adverse Information -17-
9.6 Expiration Period of Representations
and Warranties -17-
9.7 HHP's Actual Knowledge -18-
9.8 Waiver -18-
9.9 No Other Representations or Warranties -18-
ARTICLE TEN -18-
ENTRY BY BUYER ONTO THE PROPERTY -18-
ARTICLE ELEVEN -19-
DEFAULT AND REMEDIES -19-
11.1 Buyer's Events of Default -19-
(a) Delivery of Funds -19-
(b) Bankruptcy -19-
(c) Acts or Omissions -19-
(d) Representations and Warranties -19-
11.2 HHP's Events of Default -20-
(b) Bankruptcy -20-
(c) Acts or Omissions -20-
(d) Representations and Warranties -20-
11.3 HHP's Remedies -20-
(a) LIQUIDATED DAMAGES -20-
(b) Post Closing -21-
11.4 Buyer's Remedies -21-
(a) Specific Performance -21-
(b) Terminate -21-
ARTICLE TWELVE -21-
RISK OF LOSS -21-
ARTICLE THIRTEEN -22-
BROKERAGE COMMISSIONS -22-
ARTICLE FOURTEEN -22-
MISCELLANEOUS -22-
14.1 Notices -22-
14.2 Time of the Essence -23-
14.3 Interpretation; Governing Law -23-
14.4 Attorneys' Fees -23-
14.5 Further Assurances; Survival -23-
14.6 Entire Agreement; Amendments -23-
14.7 No Waiver -24-
14.8 No Assignment -24-
14.9 Binding Effect -24-
14.10 Headings; Exhibits; Cross References -24-
14.11 Severability -24-
14.12 Performance of Acts on Business Days -24-
14.13 Backup Withholding -24-
14.14 No Third Party Beneficiaries -25-
14.15 Effective Date -25-
14.16 HHP's 1031 Exchange -25-
14.17 Facsimile Signatures -25-
AGREEMENT FOR PURCHASE AND
SALE OF REAL PROPERTY
THIS AGREEMENT (the "Agreement"), dated for
identification purposes only as of the 12th day of September
1997, is made by and between HOWARD HUGHES PROPERTIES, LIMITED
PARTNERSHIP, a Delaware limited partnership ("HHP"), and ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Buyer").
A G R E E M E N T :
A. HHP owns that certain seven-story office building
containing approximately one hundred four thousand two hundred
thirty-five (104,235) rentable square feet located at 6601 Center
Drive West, Los Angeles, California (the "Office Building")
together with a parking garage with approximately two hundred
sixty-five (265) parking spaces.
B. Buyer and HHP heretofore have entered into
negotiations pursuant to which Buyer offered to purchase and
acquire from HHP, and HHP has agreed to sell to Buyer, upon the
terms and subject to the conditions set forth herein, the
Property (as hereinafter defined).
NOW, THEREFORE, in consideration of the mutual
covenants and agreements set forth herein and other valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, HHP and Buyer agree as follows:
ARTICLE ONE
PURCHASE AND SALE OF PROPERTY
1.1 Sale of Property. Upon the terms and subject to the
conditions hereinafter set forth, HHP shall sell, assign, convey
and transfer to Buyer, and Buyer shall purchase and acquire from
HHP, all right, title and interest of HHP in and to the Property
(as defined in Section 1.2 hereof).
1.2 Definition of Property. As used in this Agreement, the
term "Property" shall include all of the real personal and
intangible property described in subsections (a)
through (f) hereof:
(a) The land on which the Office Building is located,
and all appurtenant rights thereto, which land (the "Office
Land"), is more particularly described on Exhibit "A" hereto;
(b) All buildings, structures, parking areas and other
improvements located on the Office Land (the "Office Improvements");
(c) All personal property owned by HHP located at and
used in connection with the operation and management of the
Office Building which is listed on Exhibit "B" attached hereto
and incorporated herein by reference ("Personal Property");
(d) All leases to tenants leasing space in the Office
Building (the "Tenant Leases") identified on Exhibit "C" attached
hereto and incorporated herein by reference which shall be
assigned from HHP to Buyer at the Close of Escrow;
(e) To the extent assignable, those certain Service
Contracts (as defined in Section 5.2(h)) that are approved by
Buyer pursuant to Section 5.2(h) which shall be assigned from HHP
to Buyer at the Close of Escrow; and
(f) All other right, title and interest of Seller
constituting part and parcel of the Property, including,
easements, licenses, permits, air rights, certificates of
occupancy, warranties, rights-of-way, signs, telephone listings
and numbers, the use of the name "Northpoint Building," as well
as the use of any tradename, logo or trademark that is associated
with the name "Northpoint Building," sewer agreements, water line
agreements, utility agreements, water rights and oil, gas and
mineral rights (collectively, the "Intangibles") to the extent
assignable or transferable.
1.3 Exclusions. Notwithstanding any provision of Section
1.2 hereof to the contrary, the Property shall not include:
(a) Any non-transferable licenses; and
(b) Any personal property located on the Office Land
and owned by any entity other than HHP.
ARTICLE TWO
PURCHASE PRICE
2.1 Purchase Price. The purchase price ("Purchase Price")
for the Property shall be Twenty-One Million Eight Hundred
Thousand and 00/100 Dollars ($21,800,000.00).
2.2 Earnest Money Deposit. On the Effective Date of this
Agreement, Buyer shall deposit the sum of Three Hundred Fifty
Thousand and 00/100 Dollars ($350,000.00) as an earnest money
deposit (the "Deposit") with Escrow Holder (as hereinafter
defined), which Deposit shall be applied toward the Purchase
Price at Close of Escrow, except as otherwise provided herein.
The Deposit shall be in the form of a cashier's check made
payable to Escrow Holder.
2.3 Cash Balance Due. Upon Close of Escrow (as defined in
this Agreement below), Buyer shall pay into Escrow in cash an
amount (the "Cash Balance Due") equal to (i) the Purchase Price
less the Deposit (together with all interest earned thereon) plus
(ii) Buyer's Closing Expenses as defined in Section 7.4 plus or
minus (iii) the Buyer's prorations pursuant to Section 7.1.
2.4 Investment of Deposit. Buyer shall have the right to
instruct Escrow Holder to invest the Deposit in the following
investments ("Approved Investments"): (i) United States Treasury
obligations, (ii) United States Treasury-backed repurchase
agreements issued by a major money center banking institution
reasonably acceptable to Seller, (iii) Certificates of Deposit or
Money Market Accounts of institutions whose deposits are insured
by the FDIC or (iv) such other manner as may be reasonably agreed
to by Seller and Purchaser. The Deposit shall be disposed of by
Escrow Agent only as provided in this Agreement. In the absence
of such written instructions, Escrow Holder shall invest the
Deposit in one or more interest bearing trust accounts with
local, federally insured banking institutions; provided, Buyer
executes and delivers to Escrow Holder an Internal Revenue
Service Form W-9.
ARTICLE THREE
ESCROW
3.1 Escrow Instructions. The purchase and sale of the
Property shall be consummated through an escrow (the "Escrow") to
be established at Stewart Title of California ("Escrow Holder").
The Escrow shall be opened within three (3) business days
following the Effective Date (as hereinafter defined) by delivery
to Escrow Holder of a fully executed copy of this Agreement which
shall constitute Escrow Holder's instructions. HHP and Buyer
agree to execute and deliver to Escrow Holder such additional and
supplemental instructions as Escrow Holder may require in order
to clarify Escrow Holder's duties under this Agreement; provided,
however, that in the event of any conflict or inconsistency
between this Agreement and any instructions delivered to Escrow
Holder the terms of this Agreement shall govern the duties of
Escrow Holder and the rights and obligations of HHP and Buyer.
3.2 Definition of "Close of Escrow". For purposes of this
Agreement, the term "Close of Escrow" shall mean the time when
Escrow Holder shall have recorded all of the instruments to be
recorded as set forth in Section 6.4 below.
3.3 Operation of Property. Except as may be first approved
by Buyer (whose approval shall not be unreasonably withheld or
delayed), or as may be otherwise contemplated by this Agreement,
Seller shall not following the Effective Date: (i) amend,
supplement or otherwise change in any material respect the terms
and conditions of the Service Contracts and Tenant Leases; (ii)
enter into any contract or commitment, or incur any liability,
with respect to the Property (except contracts and commitments
entered into, and current liabilities incurred, in the ordinary
course of business with third parties); or (iii) cause a monetary
encumbrance to be recorded upon the Property. Notwithstanding
anything to the contrary in the preceding sentence, Buyer agrees
to reimburse HHP, at the Close of Escrow, for eighty percent
(80%) of those tenant improvement costs, and commissions,
incurred by HHP under that Lease, dated July, 1993, between
Jannotta Bray and HHP which was assigned to Right Management
Consultants in March of 1995 and amended by that First Amendment,
dated July 7, 1997. Additionally, if HHP enters into any leases
for space in the Office Building after the Effective Date but
prior to the Close of Escrow, which leases are approved by Buyer,
which approval shall not be unreasonably withheld or delayed, and
incurs any costs to construct tenant improvements in the Office
Building or pay commissions to brokers or others in connection
with such leases, Buyer, if Buyer purchases the Property, agrees
to reimburse, at the Close of Escrow, HHP for all costs
("Improvement/Commission Costs") incurred, as of the Close of
Escrow, by HHP relating to the construction of the tenant
improvements and payment of commissions. To the extent the
construction of the tenant improvements are not complete by the
Close of Escrow or the payment of the commissions are not yet
due, Buyer agrees to assume all obligations for the payment of
those tenant improvements to be constructed after the Close of
Escrow and any commissions due after the Close of Escrow.
3.4 Declaration of Special Land Use Restrictions. As a
material inducement to HHP to sell the Property to Buyer, Buyer
has agreed, at the Close of Escrow, to execute and cause to be
recorded upon the Office Land that certain Special Land Use
Restrictions attached hereto as Exhibit "D" ("Special Land Use
Restrictions") which, among other things, require that the
existing Office Building upon the Office Land shall not be
expanded to increase the square footage of the Office Building
and restrict any future new construction of any additional
buildings upon the Office Land without HHP"s prior approval.
3.5 Auditing. At Buyer's request at any time from and
after the date hereof until the date that is one (1) year after
the Close of Escrow, HHP shall, at Buyer"s expense, provide to
Buyer's designated independent auditor reasonable access to the
books and records of the Property, regarding the period for which
Buyer is required to have audited financial statements prepared
with respect to the Property as may be required by the Securities
and Exchange Commission, but only to the extent that such books,
records and related information are in HHP's possession or
control and relate to the period during which HHP held title to
the Property. Further, HHP agrees to provide such auditor a
representation letter regarding the books and records of the
Property, in substantially the form of Exhibit "J" attached
hereto, in connection with the normal course of auditing the
Property in accordance with generally accepted auditing standards
(but shall not thereby be deemed to have made any representation
or warranty to Buyer or to any other third party).
ARTICLE FOUR
CONDITION OF TITLE
4.1 Permitted Exceptions. HHP shall convey to Buyer fee
simple title to the Office Land subject only to the following
exceptions (the "Permitted Exceptions"):
(a) Preliminary Title Report. The exceptions which
are disclosed by the Report described
(b) Other Matters. All other covenants,
conditions, restrictions, reservations, rights,
rights-of-way, easements, dedications, offers of
dedication and other matters of record.
(c) Survey Matters. All matters which are
disclosed by the ALTA Survey of the Property.
(d) Taxes. A lien to secure payment of
general and special real property taxes and
assessments not delinquent, and any supplemental tax
liens imposed as a result of this transaction.
(e) Parking Garage. The rights of the
owner of the building commonly known as 6701 Center
Drive West ("6701 Building") to use the parking
garage of the Office Building as more fully set forth
in Section 3.2 of that certain Construction,
Operations and Reciprocal Easement Agreement For
Parking Structure and Entertainment Complex, dated
April 29, 1997, between HHP and The Prudential
Insurance Company of America, which is reflected in
the Report.
4.2 Title Insurance Policy. At Close of Escrow and
as a
condition thereto, Escrow Holder shall issue to Buyer
an ALTA Owner's Policy of title insurance (the "Title
Policy") of Stewart Title Guaranty Company (the
"Title Company") as to the Property, with a limit of
liability in the amount of the Purchase Price subject
only to the Permitted Exceptions. HHP shall be
responsible for making the necessary arrangements to
prepare an ALTA Survey ("ALTA Survey") for the
issuance of the Title Policy. HHP shall be
responsible for the payment of all the costs relating
to the ALTA Survey.
ARTICLE FIVE
CONDITIONS PRECEDENT TO CLOSE OF ESCROW
5.1 HHP's Conditions. Each of the following
shall constitute a condition precedent to the
obligations of HHP to close the Escrow and may be
waived only by a written wavier executed by HHP and
delivered to Escrow Holder:
(a) Funds. Buyer shall have deposited
with Escrow Holder immediately available funds in the
amount of the Cash Balance Due described in Section
2.3 above at least one (1) business day prior to the
date set for Close of Escrow.
(b) Default. Buyer shall not have
committed a Buyer Event of Default (as defined
below).
(c) Assumption of Liability. Buyer shall have
deposited with Escrow Holder the assignment and
assumption documents ("Assignment and Assumption
Documents") attached hereto as Exhibit "I," which is
incorporated herein by reference, duly executed by
Buyer in counterpart.
5.2 Buyer's Conditions. Each of the following
shall constitute a condition precedent to the
obligations of Buyer to close the Escrow and may be
waived only by a written waiver executed by Buyer and
delivered to Escrow Holder:
(a) Contingency Period. Buyer shall have
the right, at any time up to and including 5:00 P.M.
Pacific Daylight Savings Time on the thirtieth (30th)
day after the Effective Date (the "Contingency
Date"), to satisfy itself as to the Property and its
condition, suitability, and feasibility for Buyer's
intended use thereof, including, without limitation,
the future marketability of the Office Improvements
to potential tenants, the condition of the Property,
the zoning for the Property and the availability of
all permits, licenses, variances and the like
necessary for Buyer's intended use of the Property.
Upon Buyer"s request, HHP shall provide Buyer with
access to all documents and materials relative to the
Property which are in the possession and control of
HHP including, without limitation, copies of the
Service Contracts and Tenant Leases and Buyer shall
have the right to conduct market feasibility or other
studies Buyer deems appropriate concerning the
Property. During the Contingency Period, Buyer may
terminate this Agreement for any reason in Buyer's
sold and governed by the laws of the State of
California.
14.4 Attorneys' Fees. In the event of any litigation
between the parties regarding this Agreement or the Property, the
prevailing party shall be entitled to the payment by the losing
party of its reasonable attorneys' fees, court costs and
litigation expenses, as determined by the court.
14.5 Further Assurances; Survival. Each party will,
whenever and as often as it shall be requested to do so by the
other party, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, any and all such further
conveyances, assignments, approvals, consents and any and all
other documents and do any and all other acts as may be necessary
to carry out the intent and purpose of this Agreement. All
covenants and obligations contained in this Agreement which imply
or require performance after Close of Escrow and all
representations and warranties of the parties contained in this
Agreement shall survive the Close of Escrow.
14.6 Entire Agreement; Amendments. This Agreement, together
with the other written agreements referred to herein, is intended
by the parties to be the final expression of their agreement with
respect to the subject matter hereof, and is intended as the
complete and exclusive statement of the terms of the agreement
between the parties. As such, this Agreement supersedes any and
all prior understandings between the parties, whether oral or
written. Any amendments to this Agreement shall be in writing and
shall be signed by both parties hereto. This Agreement may be
executed in counterparts, and when taken together, shall
constitute a binding agreement.
14.7 No Waiver. A waiver by either party hereto of a breach
of any of the covenants or agreements hereof to be performed by
the other party shall not be construed as a waiver of any
succeeding breach of the same or other covenants, agreements,
restrictions or conditions hereof.
14.8 No Assignment. Neither Buyer nor HHP shall assign any
of its rights or delegate any of its obligations hereunder without
the prior written consent of the other party hereto, which may be
withheld in such party's sole and absolute discretion.
14.9 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective heirs, representatives, successors and permitted
assigns.
14.10 Headings; Exhibits; Cross References. The headings and
captions used in this Agreement are for convenience and ease of
reference only and shall not be used to construe, interpret,
expand or limit the terms of this Agreement. All exhibits attached
to this Agreement and the Recitals at the front of this Agreement
are incorporated herein by the references thereto contained
herein. All references in this Agreement to Articles, Sections and
Exhibits shall be to Articles, Sections and Exhibits of or to this
Agreement, unless otherwise specified.
14.11 Severability. In the event that any phrase, clause,
sentence, paragraph, section, article or other portion of this
Agreement shall become illegal, null or void, or against public
policy, for any reason, or shall be held by any court of competent
jurisdiction to be illegal, null or void, or against public
policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in force and effect to the full
extent permitted by law.
14.12 Performance of Acts on Business Days. Unless
specifically stated to the contrary, all references to days herein
shall be deemed to refer to calendar days. In the event that the
final date for payment of any amount or performance of any act
hereunder falls on a Saturday, Sunday or holiday, such payment may
be made or act performed on the next succeeding business day.
14.13 Backup Withholding. If any regulations proposed or
promulgated by the Internal Revenue Service subject the
transactions contemplated hereunder to backup withholding (which
would require Buyer to withhold a portion of the Purchase Price
from HHP), then HHP may, at its option, provide Buyer and/or
Escrow Holder with the necessary declaration in order to exempt
such transactions from backup withholding.
14.14 No Third Party Beneficiaries. This Agreement is
intended for the exclusive benefit of HHP and Buyer and their
respective permitted assigns and is not intended and shall not be
construed as conferring any benefit on any third party or the
general public.
14.15 Effective Date. "Effective Date" shall mean the date on
which this Agreement is executed by the last of the parties to
execute this Agreement as set forth opposite their respective
signatures below and an original of the Agreement delivered to
Escrow Holder.
14.16 HHP's 1031 Exchange. HHP may, at its option exercisable
within its discretion, arrange for tax-deferred exchanges of the
Property within the meaning of Section 1031 of the Internal
Revenue Code, and Buyer agrees in such event to cooperate with HHP
in order to effectuate such an exchange or exchanges concurrently
with Buyer's acquisition of the Property, or any portion thereof.
Buyer also agrees to cooperate with HHP in effecting a delayed or
non-simultaneous tax-deferred exchange. In this connection, Buyer
hereby agrees to permit HHP to assign its rights, duties and
obligations to sell the Property to a qualified intermediary
("Accommodator") in order to facilitate HHP's transfer of the
Property in a manner that may qualify as a non-simultaneous tax-
deferred exchange under Section 1031 of the Internal Revenue Code.
Notwithstanding the foregoing, the Property may be conveyed
directly from HHP to Buyer by deed as authorized by Section 1031
of the Internal Revenue Code. The foregoing assignment by HHP to
Accommodator shall not limit, modify, alter or impair in any way
the obligations of HHP under this Agreement, except that the
Accommodator shall have the right to receive Buyer's payment of
the Purchase Price for the Property. HHP shall not be released
from any covenant, duty or obligation agreed to by HHP under this
Agreement as a result of
the assignment to Accommodator of HHP's rights, duties and
obligations to sell the Property. HHP will be solely responsible
for all additional escrow fees, title insurance fees, and
documentary transfer taxes in order to facilitate the transaction
contemplated under this Section 14.16.
14.17 Facsimile Signatures. Buyer and HHP each (i) has
agreed to permit the use, from time to time and where appropriate,
of telecopied signatures in order to expedite the transaction
contemplated by this Agreement, (ii) intends to be bound by its
respective telecopied signature, (iii) is aware that the other
party will rely on the telecopied signature, and (iv) acknowledges
such reliance and waives any defenses to the enforcement of the
documents and notices effecting the transaction contemplated by
this Agreement based on the fact that a signature or notice was
sent by telecopy.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date set forth beneath their respective
signatures below.
HHP: BUYER:
HOWARD HUGHES PROPERTIES, ARDEN REALTY LIMITED PARTNERSHIP,
LIMITED PARTNERSHIP, a a Maryland limited partnership
Delaware limited partnership
By its general partner:
By its sole general partner: ARDEN REALTY, INC., a
THE HOWARD HUGHES CORPORATION, Maryland corporation
a Delaware corporation
By:/s/ Victor J. Coleman By:/s/
Michael C. Niarchos
Print Name: Victor J. Coleman
Print Name: Michael C. Niarchos
Print Title: President and COO
Print Title: General Counsel and
Senior Vice President
Executed at _______________, Executed at _______________,
___________, this ______ day of ___________, this _______
day of
_______________, 19___. ________________, 19___.
STEWART TITLE OF CALIFORNIA hereby acknowledges receipt of
the foregoing escrow instructions and agrees to act as Escrow
Holder in accordance with the terms and conditions thereof.
STEWART TITLE OF CALIFORNIA
By:___________________________
Title:________________________
Date:_________________________
AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
between
FAIRFAX CENTRE, LLC,
a California limited liability company
as Seller
and
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
as Buyer
TABLE OF CONTENTS
Page
1. DEFINITIONS 1
1.1 "Amendment to License Agreement and
Assignment, Assumption and Consent" 1
1.2 "Amresco" 1
1.3 "Appurtenances" 1
1.4 "Assignment, Assumption and Consent
Agreement" 2
1.5 "Assignment and Assumption of Leases" 2
1.6 "Assignment of Intangible Property and
Escrow Fund" 2
1.7 "Bill of Sale" 2
1.8 "Broker" 2
1.9 "Business Days" 2
1.10 "Closing" 2
1.11 "Closing Date" 2
1.12 "Code" 2
1.13 "Deed" 3
1.14 "Deposit" 3
1.15 Intentionally omitted 3
1.16 "Escrow Fund" 3
1.17 "Escrow Fund Balance" 3
1.18 "Escrow Holder" 3
1.19 "Fixtures" 3
1.20 "Governmental Regulations" 3
1.21 "Hazardous Materials" 3
1.22 "Intangible Property" 4
1.23 "Land" 4
1.24 "Leases" 4
1.25 "Lender" 4
1.26 "Lender's Legal Fees Reimbursement" 4
1.27 "License Agreement" 4
1.28 "Licenses and Permits" 4
1.29 "Loan" 4
1.30 "Loan Approval Date" 4
1.31 "Loan Assumption Fee" 5
1.32 "Loan Documents" 5
1.33 "Loan Servicing Fee" 5
1.34 "Notice To Tenants" 5
1.35 "Personal Property" 5
1.36 "Property" 5
1.37 "Purchase Price 5
1.38 "Real Property" 5
1.39 "Records and Plans" 5
1.40 "Replacement Escrow Fund" 5
1.41 "Rollover Escrow Fund" 5
1.42 "Schedule of Tenant Improvement
Allowances and Rent Credits" 6
1.43 "Service Contracts" 6
1.44 "Tax and Insurance Escrow Fund" 6
1.45 "Tenant Estoppels" 6
1.46 "Title Company" 6
1.47 "Title Policy" 6
1.48 "Transferor's Certificate" 6
1.49 "Warranties" 6
2. ESCROW; DEPOSIT 7
2.1 Escrow Instructions 7
2.2 Deposits 7
3. AGREEMENT TO SELL; PURCHASE PRICE 7
3.1 Deposits 7
3.2 Balance of Purchase Price; Escrow Fund
Balance 7
4. DELIVERIES AT CLOSING; CLOSING PROCEDURES 8
4.1 By Seller 8
4.2 By Buyer 9
4.3 By Buyer and Seller 9
4.4 Closing Procedures 9
5. REPRESENTATIONS AND WARRANTIES 11
5.1 Seller's Representations and Warranties. 11
5.2 Buyer's Representations and Warranties. 13
6. SELLER'S OBLIGATIONS 14
6.1 Further Liens and Encumbrances 14
6.2 Lease; Other Contracts; Interim
Activities 14
6.3 Property Management and Operation 14
6.4 Cooperation with Representatives 14
6.5 No Removal of Personal Property 15
6.6 Obtaining Estoppels and Consents 15
6.7 Assignment and Assumption of Loan 15
6.8 Service Contracts 15
6.9 Post-Closing Financial Records 15
6.10 Audit Rights 15
6.11 Management and Listing Agreements 16
8. CONDITIONS PRECEDENT/CONCURRENT TO CLOSING; CLOSING
DATE 16
8.1 Buyer's Conditions 16
8.1.1 Representations, Warranties
and Covenants of Seller 16
8.1.2 Seller's Deliveries 16
8.1.3 No Material Changes 16
8.1.4 Delivery of Pre-Closing
Documents and Agreements 16
8.1.5 Title Insurance 17
8.1.7 Loan Approval 17
8.1.8 CBS' Right to Purchase 17
8.2 Seller's Conditions 17
8.2.1 Representations and Warranties of Buyer 17
8.2.2 Buyer's Deliveries 17
9. Intentionally omitted 17
10. PRORATIONS 17
10.1 Current Rent 17
10.2 Rent Arrears 18
10.3 Tenant Improvement Allowances and Rent Credits 18
10.4 Security Deposits 18
10.5 Other Prorations 18
10.6 Preliminary Closing Adjustment 18
10.7 Post-Closing Reconciliation 18
10.8 Survival 18
11. COSTS AND EXPENSES 19
11.1 Seller 19
11.2 Buyer 19
11.3 Other Closing Costs 19
11.4 Delivery of Possession 19
12. CONDEMNATION AND DESTRUCTION 19
12.1 Eminent Domain or Taking 19
12.2 Damage or Destruction 20
13. REMEDIES 20
13.1 Buyer's Remedies 20
13.2 Seller's Remedies 22
14. 1031 EXCHANGE 22
15. BROKERAGE COMMISSIONS 23
16. NOTICES 23
17. ASSIGNMENT 24
17.1 Assignment by Buyer 24
17.2 Buyer Assignee's Rights and Obligations 24
18. MISCELLANEOUS 24
18.1 Survival 24
18.2 Parties in Interest 24
18.3 Section Headings 25
18.4 No Oral Modifications 25
18.5 Full Integration 25
18.6 Binding Effect 25
18.7 Seller's Advice of Counsel 25
18.8 Attorneys' Fees 25
18.9 Governing Law 25
18.10 Confidentiality 25
18.11 Captions 26
18.12 Severability 26
18.13 Time of the Essence 26
18.14 Non-Waiver 26
18.15 Facsimile 26
18.16 Further Assurances 26
18.17 Joint and Several Liability. 26
18.18 Counterparts 26
18.19 Seller's Indemnities 27
18.20 Reimbursement of Costs to Buyer 27
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS ("Agreement") dated as of the 29th day of August,
1997 is by and between Fairfax Centre, LLC, a California limited
liability company ("Seller"), and Arden Realty Limited
Partnership, a Maryland limited partnership ("Buyer").
Capitalized terms used in the Recitals below, not otherwise
defined therein, shall have the meanings ascribed to them in
Section 1 of this Agreement.
R E C I T A L S
WHEREAS, this Agreement is made and entered into with
reference to the following facts:
WHEREAS, Buyer desires to purchase, and Seller desires
to sell, the Property on the terms and conditions set forth in
this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer
and Seller agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
1.1 "Amendment to License Agreement and
Assignment, Assumption and Consent" means the Amendment to
License Agreement and Assignment, Assumption and Consent in the
form of, and upon the terms and conditions contained in Exhibit
"N".
1.2 "Amresco" means Amresco Services L.P.
1.3 "Appurtenances" means all rights, privileges
and easements appurtenant to the Land, including, without
limitation, all minerals, oil, gas and other hydrocarbon sub
stances in, on and under the Land, as well as all development
rights, air rights, water, water rights and water stock relating
to the Land and any other easements appurtenant to the Land.
1.4 "Assignment, Assumption and Consent
Agreement" means a written assignment, assumption and consent
agreement made by Lender, Seller and Buyer, and a beneficiary
statement made by Lender, both in form and content acceptable to
Buyer in its sole and nonreviewable discretion, wherein Lender
consents to the assignment to and assumption of the Loan by
Buyer, and represents to Buyer that Seller is not in default
under any of the terms or provisions of the Loan Documents beyond
the expiration of any notice and cure period provided for
therein.
1.5 "Assignment and Assumption of Leases" means
the Assignment and Assumption of Leases, to be duly executed and
delivered by Seller and Buyer in accordance with Section 4.1 of
this Agreement, assigning to Buyer all of Seller's right, title
and interest in and to the Leases. The Assignment and Assumption
of Leases shall be in the form of, and upon the terms contained
in, Exhibit "C".
1.6 "Assignment of Intangible Property and Escrow
Fund" means the Assignment of Intangible Property and Escrow
Fund, to be duly executed and delivered by Seller in accordance
with Sections 4.1 and 4.2 of this Agreement, assigning to Buyer
all of Seller's right, title and interest, if any, in and to the
Intangible Property and Escrow Fund. The Assignment of
Intangible Property and Escrow Fund shall be in the form of, and
upon the terms contained in, Exhibit "B".
1.7 "Bill of Sale" means the Bill of Sale, to be
duly executed and delivered by Seller in accordance with
Section 4.1 of this Agreement, conveying to Buyer all of the
Personal Property. The Bill of Sale shall be in the form of, and
upon the terms contained in, Exhibit "D".
1.8 "Broker" means First Property Realty
Corporation.
1.9 "Business Days" means all days except
Saturdays, Sundays and holidays in which a majority of the banks
in the City of Los Angeles are closed for business.
1.10 "Closing" means the consummation of the
conveyances of the Property, the Leases and the other
transactions contemplated under this Agreement, all of which
shall occur on or before the Closing Date.
1.11 "Closing Date" means the date which is five
(5) Business Days after the Loan Approval Date, unless otherwise
mutually agreed to in writing by Buyer and Seller or extended
pursuant to the terms of this Agreement.
1.12 "Code" means the United States Internal
Revenue Code of 1986, as amended.
1.13 "Deed" means the Grant Deed, to be duly
executed, acknowledged and delivered in recordable form by Seller
in accordance with Section 4.1 of this Agreement, conveying to
Buyer good and marketable fee simple title to the Real Property.
The Deed shall be in the form of, and upon the terms contained
in, Exhibit "E".
1.14 "Deposit" means the sum of One Hundred
Thousand Dollars ($100,000.00) to be delivered to Escrow Holder
within one (1) Business Day after the mutual execution of this
Agreement by Buyer and Seller and delivery of the same to Escrow
Holder in accordance with Section 3.1 of this Agreement.
1.15 Intentionally omitted.
1.16 "Escrow Fund" shall collectively mean
the Rollover Escrow Fund, Replacement Escrow Fund and Tax and
Insurance Escrow Fund.
1.17 "Escrow Fund Balance" means the cash
balance on hand in the Rollover Escrow Fund, Replacement Escrow
Fund and Tax and Insurance Escrow Fund as of the Closing Date.
1.18 "Escrow Holder" means Commerce Escrow
Company, 1545 Wilshire Boulevard, Suite 600, Los Angeles,
California 90017, Attention: Mark Minsky.
1.19 "Fixtures" means all fixtures placed on,
attached to, or located at and used in connection with the
operation of, the Land and which are owned by Seller.
1.20 "Governmental Regulations" means any local,
state, and federal laws, ordinances, rules, requirements,
resolutions, policy statements and regulations (including, with
out limitation, those relating to land use, subdivision, zoning,
environmental, labor relations, notification of sale to employer,
Hazardous Materials, occupational health and safety, water,
earthquake hazard reduction and building and fire codes) bearing
on the construction, development, alteration, rehabilitation,
maintenance, use, operation, or sale of the Property.
1.21 "Hazardous Materials" means any hazardous or
toxic substance, material or waste which is or becomes regulated
by any local governmental authority, any agency of the State of
California or any agency of the United States Government. The
term "Hazardous Materials" includes, without limitation, any
material or substance which (a) contains petroleum or any
petroleum by-products, (b) contains asbestos, (c) contains urea
formaldehyde foam insulation, (d) is designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. ' 1317), (e) is defined as a "hazardous
waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. ' 6901 (42 U.S.C.
' 6903), or (f) is defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ' 9601 (42 U.S.C.
' 9601). Each reference to a statute or law in this definition
shall be deemed to include any amendments thereto which are
enacted from time to time.
1.22 "Intangible Property" means all of Seller's
right, title and interest in and to any and all intangible
personal property now and through the Closing Date owned by
Seller and used in connection with the ownership, construction,
development, use and/or operation of the Real Property and/or
Personal Property, including, without limitation, all tradenames
of the Real Property, any and all claims and causes of action,
the Service Contracts (to the extent approved in writing by
Buyer), the Licenses and Permits, the Intellectual Property and
the Records and Plans and the Warranties.
1.23 "Land" means the real property located at 145
South Fairfax Avenue, Los Angeles, California, as legally
described in Exhibit "A".
1.24 "Leases" means the existing leases relating
to the Real Property, which Leases are listed on Exhibit "F".
1.25 "Lender" means Nomura Asset Capital
Corporation, a Delaware corporation, or its successor in
interest.
1.26 "Lender's Legal Fees Reimbursement"
means the sum of up to Four Thousand Two Hundred and no/100
Dollars ($4,200.00) payable by Buyer to reimburse Lender for its
legal fees and costs associated with the assignment and
assumption of the Loan, and which shall be delivered to Amresco
(made payable to the law firm of Alston & Bird), through Escrow
Holder, subject to the terms and conditions provided herein.
1.27 "License Agreement" means that certain
Parking License Agreement made as of November 6, 1996 by and
between Elliot Gottfurcht and Indoprop, Inc., as licensor, and
Barnaby's Hollywood LLC, as licensee.
1.28 "Licenses and Permits" means all of Seller's
right, title, interests, privileges, benefits and remedies in, to
and under all authorizations, approvals, permits, certificates of
occupancy, licenses, agreements, variances, tentative maps, final
maps, plans and specifications and land use entitlements held by
Seller and/or relating to the construction, reconstruction,
occupancy, operation or use of any part of the Real Property or
Personal Property (e.g., all building permits and certificates
and occupancy).
1.29 "Loan" means that certain loan made by
Lender to Seller in the original principal amount of
$4,125,000.00.
1.30 "Loan Approval Date" means the date on
which Lender shall have unconditionally consented to the
assignment and assumption of the Loan to Buyer and shall have
executed and delivered to Escrow Holder the Assignment,
Assumption and Consent Agreement.
1.31 "Loan Assumption Fee" means the sum of
Forty One Thousand One Hundred Twenty and no/100 Dollars
($41,120.00) to be paid to Lender, through Escrow Holder, subject
to the terms and conditions provided herein.
1.32 "Loan Documents" shall mean all loan
documents executed by Seller in connection with the Loan, or
otherwise evidencing or relating to the Loan, a complete schedule
of which is listed on Exhibit "O".
1.33 "Loan Servicing Fee" means the sum of
Three Thousand and no/100 Dollars ($3,000.00) to be paid to
Amresco, through Escrow Holder, subject to the terms and
conditions provided herein.
1.34 "Notice To Tenants" means the notice from
Seller to the tenants under the Leases whereby such tenants are
notified that the Property has been transferred by Seller to
Buyer and instructing the tenants to pay any and all rents and
other sums payable under the Leases from and after the Closing
directly to Buyer or as otherwise directed by Buyer, in the form
of Exhibit "G".
1.35 "Personal Property" means all personal
property of Seller located on or in or used in connection with
the Real Property.
1.36 "Property" means the Real Property, the
Personal Property and the Intangible Property.
1.37 "Purchase Price" means the sum of Seven
Million Three Hundred Thousand and no/100 Dollars
($7,300,000.00).
1.38 "Real Property" means the Land, the
improvements situated on the Land, the Fixtures and the Appurten
ances.
1.39 "Records and Plans" means (a) all books and
records maintained in connection with the ownership, development,
construction, maintenance or operation of the Property, (b) all
preliminary, final and "as-built" plans and specifications
respecting the Real Property, and (c) all structural reviews,
architectural drawings, and engineering, soil, seismic, geologic
and architectural reports, studies and certificates and other
documents pertaining to the Real Property (including those which
include comments by any building or safety engineer, inspector or
other person who regularly makes such inspections) which are
within the possession of, under the control of, or reasonably
available to (without cost or expense) Seller.
1.40 "Replacement Escrow Fund" shall have the
meaning ascribed to such term in the Deed of Trust.
1.41 "Rollover Escrow Fund" shall have the
meaning ascribed to such term in that certain Deed of Trust,
Assignment of Leases and Rents and Security Agreement dated as of
December 19, 1996 between Lender, as beneficiary, and Seller, as
trustor (the "Deed of Trust").
1.42 "Schedule of Tenant Improvement
Allowances and Rent Credits" means the schedule of unpaid tenant
improvement allowances and rent credits under Leases entered into
prior to the date of this Agreement, which Schedule is attached
hereto as Exhibit "L".
1.43 "Service Contracts" means any and all
management agreements, service contracts, art contracts,
landscaping contracts, equipment leases, maintenance agreements
and all other contracts for the provision of labor, services,
materials or supplies to or for the benefit of the Real Property,
together with all supplements, amendments and modifications
thereto, which are set forth on Exhibit "H" attached to this
Agreement.
1.44 "Tax and Insurance Escrow Fund" shall
have the meaning ascribed to such term in the Deed of Trust.
1.45 "Tenant Estoppels" means the written
statements in the form of, and upon the terms contained in,
Exhibit "I", in favor of Buyer from the tenants which are parties
to the Leases, dated not earlier than thirty (30) days prior to
the Closing Date.
1.46 "Title Company" means Commonwealth Land Title
Insurance Company, 801 North Brand Boulevard, 12th Floor,
Glendale, California 91203.
1.47 "Title Policy" means an ALTA owner's title
policy (Form B-1970) issued by the Title Company for the benefit
of Buyer, which Title Policy shall have a liability limit in the
amount of the Purchase Price, shall include those endorsements
reasonably requested by Buyer and shall show only those matters
which constitute Permitted Exceptions (defined below).
1.48 "Transferor's Certificate" means the
certificate, to be duly executed by Seller under penalty of
perjury and delivered by Seller in accordance with Section 4.1 of
this Agreement, certifying that Seller is not a "foreign person"
in accordance with the provisions of Section 1445 of the Code and
any similar provisions of applicable state law. The Transferor's
Certificate shall be in the form of, and upon the terms contained
in, Exhibit "J".
1.49 "Warranties" means all third party warranties
and guarantees, if any, relating to the Property which are set
forth on Exhibit "M".
2. ESCROW; DEPOSIT.
2.1 Escrow Instructions. The purchase and sale
of the Property shall be consummated through an escrow at Escrow
Holder. As soon as reasonably practicable following the mutual
execution of this Agreement, but in no event later than three (3)
days after the date of this Agreement, the parties shall deliver
to Escrow Holder a fully executed counterpart of this Agreement,
which shall constitute its escrow instructions. The parties
shall execute such additional escrow instructions, not
inconsistent with this Agreement, as Escrow Holder shall deem
reasonably necessary for its protection. In the event of any
conflict between this Agreement and any additional escrow
instructions, the terms of this Agreement shall govern.
2.2 Deposits. Within one (1) Business Day after
the execution of this Agreement by Buyer and Seller and delivery
of the same to Escrow Holder, Buyer shall deliver the Lender's
Legal Fees Reimbursement and the Loan Servicing Fee to Escrow
Holder to hold in trust. Escrow Holder shall deliver the Loan
Servicing Fee and Lender's Legal Fees Reimbursement to Amresco in
immediately available funds. Notwithstanding the foregoing, if
Lender's actual, documented legal fees and costs expended in good
faith in connection with the proposed assumption of the Loan are
less than $4,200, then Buyer shall receive a credit at Closing
against the Purchase Price for the difference between $4,200 and
Lender's actual, documented legal fees and costs.
3. AGREEMENT TO SELL; PURCHASE PRICE. Seller agrees
to sell to Buyer, and Buyer agrees to purchase from Seller, the
Property in accordance with the terms, and subject to the
conditions, of this Agreement. The Purchase Price for the
Property will be paid as follows:
3.1 Deposits. Within one (1) Business Day after
the execution of this Agreement by Buyer and Seller and delivery
of the same to Escrow Holder, in addition to the sums deposited
pursuant to Section 2.2 above, Buyer will deliver the Deposit and
$23,560 of the Loan Assumption Fee ("Loan Assumption Fee
Deposit"), to Escrow Holder to hold in trust. Escrow Holder
shall promptly deliver the Loan Assumption Fee Deposit to
Amresco. Escrow Holder will invest the Deposit in an interest
bearing account with a responsible federally-insured
institutional lender approved by Buyer and Seller, and interest
will be for the account of Buyer except as otherwise provided in
this Agreement and will be credited against the Purchase Price at
Closing. In the event any of the conditions set forth in
Section 8.1 are not satisfied, (i) the Deposit shall be fully
refundable to Buyer, and (ii) the Loan Assumption Fee Deposit
shall be paid directly from Seller to Buyer. Except as set forth
in Section 13.2 below, the Loan Assumption Fee, or any such
portion thereof deposited by Buyer with Escrow Holder, shall be
fully refundable to Buyer unless and until the Closing occurs as
provided herein.
3.2 Balance of Purchase Price; Escrow Fund
Balance. The entire balance of the Purchase Price, the balance
of the Loan Assumption Fee and an amount equal to the Escrow Fund
Balance (after taking into account the adjustments described in
Sections 10 and 11), shall be paid to Seller, with immediately
available funds, through Escrow Holder, at Closing.
4. DELIVERIES AT CLOSING; CLOSING PROCEDURES. The
Closing will take place on the Closing Date.
4.1 By Seller. At least one (1) Business Day
prior to the Closing, Seller shall deliver or cause to be
delivered to Escrow Holder (unless otherwise indicated) the
following items, duly executed and, where appropriate,
acknowledged by Seller:
4.1.1 The Deed.
4.1.2 The Bill of Sale.
4.1.3 Three (3) counterparts of the
Assignment, Assumption and Consent Agreement.
4.1.4 Two (2) counterparts of the Assignment
of Intangible Property and Escrow Fund.
4.1.5 Two (2) counterparts of the Assignment
and Assumption of Leases.
4.1.6 The Notices to Tenants.
4.1.7 The Transferor's Certificate.
4.1.8 The Tenant Estoppels (to be delivered
directly to Buyer).
4.1.9 An original of the License Agreement
(if available) and two (2) counterpart originals of the Amendment
to License Agreement and Assignment, Assumption and Consent.
4.1.10 Evidence reasonably satisfactory
to Buyer of the termination of any property management agreement
and brokerage listing agreement for the Property as provided in
Section 6.11 hereof.
4.1.11 All such further confirmations,
satisfactions, releases, approvals, consents and any and all such
further instruments as may be reasonably necessary, appropriate,
expedient or proper in the reasonable opinion of Title Company in
order to issue the Title Policy.
4.2 By Buyer. At the Closing, Buyer will deliver
or cause to be delivered to Escrow Holder or the Seller the
following items, duly executed and, where appropriate,
acknowledged by Buyer:
4.2.1 The net balance of the Purchase Price,
to be paid in accordance with Sections 3.2 of this Agreement,
after deducting both the Deposit plus any interest accrued
thereon, and after taking into account the adjustments and cost
allocations in accordance with Sections 10 and 11.
4.2.2 Good funds in an amount equal to
the Escrow Fund Balance but after taking into account the
adjustments in accordance with Section 10.
4.2.3 Two (2) counterparts of the
Assignment of Intangible Property and Escrow Fund and the
Assignment and Assumption of Leases and three (3) counterparts of
the Assignment, Assumption and Consent Agreement.
4.2.4 Two (2) counterpart originals of the
Amendment to License Agreement and Assignment, Assumption and
Consent.
4.2.5 The balance of the Loan
Assumption Fee.
4.3 By Buyer and Seller. Buyer and Seller will
each deposit such other instruments consistent with this Agree
ment as are reasonably required to effectuate the transactions
contemplated under this Agreement.
4.4 Closing Procedures. Provided that Escrow
Holder has received the documents and funds described in Sections
4.1 and 4.2 above and has not received notice from any party
hereto either that an agreement of another party hereunder has
not been performed, that a condition set forth herein has not
been satisfied or waived or that this Agreement has terminated
(by its terms or by an election duly made hereunder), and further
provided that the issuance of, or an unconditional commitment to
issue, the Title Policy has been obtained, Escrow Holder is
authorized and instructed at 8:00 a.m. on the Closing Date to:
4.4.1 Record the Deed and the Assignment,
Assumption and Consent Agreement with the County Recorder of Los
Angeles County, California.
4.4.2 Cause the Title Policy to be
issued by the Title Company to Buyer.
4.4.3 Deliver to Buyer: the Assignment,
Assumption and Consent Agreement, the Assignment and Assumption
of Leases, the Assignment of Intangible Property and Escrow Fund,
the Bill of Sale, the Amendment to License Agreement and
Assignment, Assumption and Consent, the Transferor's Certificate,
all documents and items required to be delivered by Seller
pursuant to Sections 4.1 and 8.1.4 or any other provision of this
Agreement, not otherwise previously delivered directly to Buyer,
all other items deposited by Seller with Escrow Holder pertaining
to the Property, and any funds deposited by Buyer in excess of
the amount to be paid by Buyer under the terms of this Agreement.
4.4.4 Deliver to Seller: the Purchase Price
and Escrow Fund Balance, after taking into account the
adjustments and cost allocations in accordance with Sections
4.4.7, 10 and 11, and the Assignment, Assumption and Consent
Agreement, the Assignment and Assumption of Leases, the
Assignment of Intangible Property and Escrow Fund, the Amendment
to License Agreement and Assignment, Assumption and Consent, and
any other document deposited by Buyer with Escrow Holder for
delivery to Seller at the Closing.
4.4.5 Deliver to Lender: the Loan
Assumption Fee and the original of the Assignment, Assumption and
Consent Agreement.
4.4.6 Notices to Tenants. Mail the Notices
to Tenants to the tenants under the Leases by certified mail,
return receipt requested.
4.4.7 Holdback Account. Maintain an
amount equal to $50,000 in escrow, from which $1,000 shall be
disbursed (pursuant to instructions to be given to Escrow Holder
by Buyer) to Buyer on the first day of each month following the
Start Date (defined below). On the first day of each month
during the period commencing on the Closing Date and ending on
the day immediately preceding the Start Date, $1,000 shall be
disbursed by Escrow Holder to Seller. Such disbursements shall
be made without further instructions from either party hereunder,
unless Buyer has notified Escrow Holder in writing that the
License Agreement, as amended, has been mutually terminated and
is of no further force and effect. Such disbursements shall
cease to be made upon the earlier of the date no funds remain in
such holdback account or the term of the License Agreement has
expired. In the event the License Agreement has been mutually
terminated or its term has expired, any funds remaining in the
escrow account shall be disbursed to Seller (except to the extent
of any unpaid amounts due thereunder to licensor, which shall be
paid to licensor). The term "Start Date" shall mean the date set
forth in a written notice from the licensee to the licensor under
the License Agreement upon which licensee intends to commence its
use of the Spaces (as defined in the License Agreement) in
accordance with the terms thereof (provided that such written
notice must be received by the licensor no less than 15 days
prior to the commencement date set forth in such notice).
Notwithstanding anything to the contrary, for the period
following the date licensee notifies licensor in writing it no
longer intends to use any of the Spaces (and no use is actually
made of the Spaces) until the date which is 15 days following the
date that the Licensee's Successor-In-Interest (as defined
herein) notifies the licensor in writing that it intends to re-
commence the use of the Spaces, $1,000 shall be disbursed to
Seller on the 1st day of each month. For purposes of this
Agreement, the term "Licensee's Successor-In-Interest" shall mean
licensee's lenders and any entity which acquires licensee's
business. Licensee (as opposed to any Licensee's Successor-in-
Interest) shall in no event have the right to re-commence the use
of the Spaces following its delivery to licensor of a notice
cancelling its use of the Spaces. Licensee shall notify
Licensee's Successor-in-Interest that Licensee's Successor-in-
Interest shall have no right to use any of the Spaces in
accordance with the terms of the License Agreement until it has
delivered to licensor at least 15 days prior written notice of
its intention to use the Spaces.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Seller's Representations and Warranties.
Seller makes the following representations and warranties to
Buyer, upon which warranties and representations Buyer has relied
and will continue to rely, all of which are true as of the date
of this Agreement and will be true and correct as of the Closing:
5.1.1 Seller is duly organized, validly
existing and in good standing under the laws of the State of
California. The execution, delivery and performance of this
Agreement and the other documents contemplated by this Agreement
by Seller, and the performance by Seller of the obligations under
this Agreement and the other documents contemplated in this
Agreement (i) are within the power of Seller; (ii) have been duly
authorized by all requisite company action; and (iii) will not
violate any provision of law, any order of any court or agency of
government, the opening agreement or other organizational
documents of Seller or its members, or any indenture, agreement
or any other instrument to which Seller is a party. This
Agreement and each of the other documents described in this
Agreement when executed and delivered to Buyer, will constitute
legal, valid and binding obligations enforceable against Seller
in accordance with the terms of such documents.
5.1.2 Seller has full legal power and
authority to enter into and perform this Agreement in accordance
with its terms. Subject to obtaining the Lender's consent to the
assumption of the Loan by Buyer, the execution, delivery and
performance of this Agreement and all documents in connection
therewith are not in contravention of or in conflict with any
deed of trust, agreement or undertaking to which Seller is a
party or by which Seller or any of its property, including the
Property, may be bound or affected following the Closing. The
execution and delivery of this Agreement and the performance by
Seller of its obligations hereunder require no further action or
approval in order to constitute this Agreement as a binding and
enforceable obligation of Seller, and all such actions have been
duly taken by Seller;
5.1.3 Seller is the owner of the
Personal Property and has good title thereto, free and clear of
all liens, claims and security interests whatsoever except for
any lien thereon in favor of Lender.
5.1.4 Except as previously disclosed to
Buyer or to the extent of Buyer's actual knowledge, Seller has no
actual knowledge of any:
a. Governmental notification from any
governmental authority notifying Seller of any (a) violation of
any city, County, State, Federal, building, zoning, fire, health
code, regulation, ordinance or covenant, filed or issued against
the Property; or (b) impending or threatened special assessments
on the Property;
b. Existing, proposed or contemplated plan
to modify or realign any existing street or highway or any
existing, proposed or contemplated eminent domain proceeding that
would result in the taking of all or any part of the Property;
c. Litigation or legal proceeding pending
or threatened in writing against Seller or the Property that
could reasonably be expected to materially and adversely affect
Seller's or Buyer's ability to perform their respective
obligations hereunder, or Buyer's use of the Property for its
existing purposes;
d. Except as set forth on Exhibit "P"
attached hereto, storage or disposal on the Property of any
material amounts of toxic or hazardous waste, material or
substance, and Seller has received no notice from any
governmental authority requiring the removal of any toxic or
hazardous waste, material or substance from the Property.
e. Leases, Service Contracts, Warranties
or Loan Documents other than those disclosed on Exhibits "F",
"H", "M" and "O" attached hereto.
5.1.5 Except in connection with leases
entered into with Bet Tzedek and Lee & Associates, there are no
unpaid tenant improvement allowances or rent credits under any
leases or lease amendments entered into prior to the date of this
Agreement. The unpaid tenant improvement allowances and/or rent
credits under the Bet Tzedek and Lee & Associates leases are set
forth in the Schedule of Tenant Improvement Allowances and Rent
Credits. Seller agrees to update the Schedule of Tenant
Improvement Allowances and Rent Credits as of the Closing. There
are no brokerage commissions payable in connection with any
leases or lease amendments entered into prior to the date of this
Agreement.
5.1.6 "AS-IS" Sale. Except as set
forth in this Agreement and the conveyance documents, Buyer
acknowledges that Seller makes no representation or warranty,
either express, implied or statutory, with respect to the
Property, its present condition or its fitness or suitability for
any particular purpose or the Records and Plans. In this
respect, Buyer confirms that Buyer is an experienced real estate
purchaser and investor who is familiar with the acquisition and
ownership of real property of the same type as the Property and
that Buyer is acquiring the Property "AS IS, WHERE IS," in its
present state and condition and is "WITH ALL FAULTS" and subject
only to Seller's representations and warranties contained herein.
Subject only to Seller's representations and warranties contained
herein, Buyer is relying solely upon its investigation of the
present condition of the Property and all governmental laws and
ordinances which might affect use and development of the
Property. The agreements expressed in this Section 5.1.6 shall
survive the Closing Date.
5.1.7 Disclaimer. EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT AND SUBJECT ONLY TO SELLER'S
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS SECTION 5.1
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EITHER
EXPRESS OR IMPLIED OR STATUTORY, RELATING TO THE PROPERTY OR ANY
PORTION THEREOF OR THE CONDITION OF THE PROPERTY OR RELATING TO
THE TITLE DOCUMENTS, THE PROPERTY MATERIALS OR ANY OTHER MATTER,
ALL SUCH REPRESENTATIONS AND WARRANTIES BEING HEREBY EXPRESSLY
DISCLAIMED. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
AND EXCEPT AS SET FORTH IN THIS AGREEMENT SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO: (a) environmental
matters relating to the Property or any portion thereof;
(b) geological or seismic conditions, including, without
limitation, subsidence, subsurface conditions, water table,
underground water reservoirs, and limitations regarding the
withdrawal of water therefrom, and faulting; (c) whether or not
and the extent to which the Property or any portion thereof is
affected by any stream (surface or underground), body of water,
flood prone area, flood plain, floodway, or special flood hazard;
(d) drainage; (e) soil conditions; (f) zoning to which the
Property or any portion thereof may be subject; (g) the
availability of any utilities to the Property or any portion
thereof including, without limitation, water, sewage, gas and
electric; (h) usages of adjoining property; (i) access to the
Property or any portion thereof; (j) the value, compliance with
specifications, size, location, age, use, merchantability,
design, quality, description, durability, operation or condition
of the Property or any portion thereof, or suitability of the
Property or any portion thereof for Buyer's purposes, or fitness
for any use or purpose whatsoever.
5.2 Buyer's Representations and Warranties.
Buyer makes the following representation and warranty to Seller
upon which warranty and representation Seller has relied and will
continue to rely, and which is true as of the date of this
Agreement and will be true and correct as of the Closing:
5.2.1 Buyer is duly organized, validly
existing and in good standing under the laws of the State of
Maryland and is duly qualified to do business in the State of
California. The execution and delivery of this Agreement and the
other documents contemplated this Agreement by Buyer, and the
performance by Buyer of the obligations under this Agreement and
the other documents contemplated in this Agreement (i) are within
the power of Buyer; (ii) have been duly authorized by all
requisite partnership action and corporate action on the part of
all of its constituent corporate partners; and (iii) will not
violate any provision of law, any order of any court or agency of
government, the charter documents of Buyer or its general
partners, or any indenture, agreement or any other instrument to
which Buyer is a party. This Agreement and each of the other
documents described in this Agreement when executed and delivered
to Buyer, will constitute legal, valid and binding obligations
enforceable against Buyer in accordance with the terms of such
documents.
5.2.2 Buyer has full legal power and
authority to enter into and perform this Agreement in accordance
with its terms. The execution, delivery and performance of this
Agreement and all documents in connection therewith are not in
contravention of or in conflict with any deed of trust, agreement
or undertaking to which Buyer is a party or by which Buyer or any
of its property, including the Property, may be bound or affected
following the Closing. The execution and delivery of this
Agreement and the performance by Buyer of its obligations
hereunder require no further action or approval in order to
constitute this Agreement as a binding and enforceable obligation
of Buyer, and all such actions have been duly taken by Buyer.
6. SELLER'S OBLIGATIONS. Seller hereby covenants to
Buyer, upon which covenants Buyer has relied and will continue to
rely, that for the period from the date of this Agreement through
and including the Closing Date:
6.1 Further Liens and Encumbrances. Seller will
not subject the Property to any additional liens, encumbrances,
covenants, conditions, easements, rights of way or similar
matters after the date of this Agreement. Seller will not
hereafter modify, extend, renew, replace or otherwise change any
of the terms, covenants or conditions of any of such documents,
or enter into any new agreements affecting the Property without
the prior written consent of Buyer, which consent may be withheld
in Buyer's sole and absolute discretion.
6.2 Lease; Other Contracts; Interim Activities.
Except as otherwise provided herein, Seller will not hereafter
terminate, modify, extend, renew, replace or otherwise change any
of the Leases or existing contracts or enter into new leases or
contracts affecting the Property except with the prior written
consent of Buyer, which consent may be withheld in Buyer's sole
and absolute discretion. Seller shall not apply for or otherwise
deal with any governmental authority regarding the development,
entitlement or subdivision of the Real Property without the prior
written consent of Buyer, which may be withheld in Buyer's sole
and absolute discretion.
6.3 Property Management and Operation. Seller
shall maintain the operation of the Property in a good and
business-like manner. Seller shall provide all services and
operate, manage and maintain the Property (including mechanical
equipment of every kind used in the operation thereof) in such a
manner that the Property shall be in the same condition on the
Closing Date as on the date of this Agreement, ordinary wear and
tear excepted. Without limiting the foregoing, Seller shall
perform all of its obligations under the Leases and the Service
Contracts.
6.4 Cooperation with Representatives. Seller
shall cooperate with Buyer and its accountants, counsel and/or
other representatives in providing information and materials
pertaining to the operation and marketing of the Property,
including access to the Property. Without limiting the
generality of the foregoing, from and after the execution and
delivery of this Agreement, Seller shall allow a representative
or representatives of Buyer access to the Property for the
purpose of (a) monitoring the operation of the Property,
(b) meeting with and interviewing tenants of the Property, which
tenants shall be made available for such interviewing process,
and (c) performing such investigations and analyses of the
Property as Buyer may reasonably require.
6.5 No Removal of Personal Property. Seller will
not remove any of the Personal Property unless the Personal
Property so removed is simultaneously replaced with substantially
similar Personal Property of similar quality or utilities.
6.6 Obtaining Estoppels and Consents. Seller
shall use its best efforts to obtain all written consents from
third parties, including Lender, required or reasonably requested
by Buyer or its accountants, counsel or other representatives in
connection with this Agreement, including, without limitation,
the Tenant Estoppels. Seller hereby acknowledges and agrees that
the obtaining of the Tenant Estoppels from tenants occupying not
less than an aggregate of eighty-five percent (85%) of the gross
leasable area of the Real Property, is a condition precedent to
Buyer's obligations under this Agreement.
6.7 Assignment and Assumption of Loan. Seller
shall use its best efforts to obtain Lender's consent to the
assignment and assumption of the Loan by Buyer, upon the terms
and conditions provided herein. Buyer agrees to reasonably
cooperate, at no additional cost to Buyer beyond that set forth
in this Agreement, with any requests for information made by
Lender in connection with its review of the requested assumption
of the Loan by Buyer.
6.8 Service Contracts. Seller shall deliver
notices of termination to any vendors under the Service Contracts
which have been designated in writing by Buyer to be terminated
("Disapproved Service Contract List"). Seller shall, within two
(2) days following Buyer's delivery of the Disapproved Service
Contract List, deliver termination notices to each of the vendors
with respect to the Service Contracts so designated by Buyer in
the Disapproved Service Contract List. Seller shall be solely
responsible for all costs and expenses associated with the
termination of any of the Service Contracts set forth by Buyer in
the Disapproved Service Contract List, and shall indemnify,
defend, and hold Buyer harmless from and against Seller.
6.9 Post-Closing Financial Records. As soon as
reasonably practicable following the Closing Date, Seller shall
deliver to Buyer the following: (a) a final income statement
through the Closing Date, (b) a final cumulative general ledger
through the Closing Date, and (c) a final aged delinquency
listing, including all security deposits received by Seller.
6.10 Audit Rights. At Buyer's request at
any time from and after the date hereof until the date that is
one (1) year after the Closing Date, Seller shall, at Buyer's
expense, provide to Buyer's designated independent auditor access
to the books and records of the Property, regarding the period
for which Buyer is required to have audited financial statements
prepared with respect to the Property as may be required by the
Securities and Exchange Commission, to the extent that such
books, records and related information are in Seller's possession
or control and relate to the period during which Seller held
title to the Property. Further, Seller agrees to provide to such
auditor a representation letter regarding the books and records
of the Property, in substantially the form of Exhibit "K"
attached hereto, in connection with the normal course of auditing
the Property in accordance with generally accepted auditing
standards.
6.11 Management and Listing Agreements.
Seller agrees to terminate, at Seller's sole cost and expense,
any property management agreement and brokerage leasing
agreement effective as of the Closing Date. Seller shall be
solely responsible for all costs and expenses associated with the
termination of any property management agreement and brokerage
leasing agreement, and shall indemnify, defend and hold Buyer
harmless from and against same.
70 Intentionally Omitted.
80 CONDITIONS PRECEDENT/CONCURRENT TO CLOSING;
CLOSING DATE.
8.1 Buyer's Conditions. Buyer shall not be
required to close the transaction provided for under this
Agreement, unless and until Buyer deems that each and every one
of the following conditions has been fulfilled:
8.1.1 Representations, Warranties and
Covenants of Seller. Seller shall have duly and timely performed
each and every covenant to be performed by Seller under this
Agreement and the representations and warranties set forth in
this Agreement shall be true and correct as of the Closing in all
respects.
8.1.2 Seller's Deliveries. Seller shall have
duly and timely delivered to Escrow Holder or Buyer, as
applicable, all of the items described in Section 4.1 of this
Agreement, except that with respect to the Tenant Estoppels,
Seller shall have delivered to Buyer Tenant Estoppels from
tenants occupying not less than an aggregate of eighty-five
percent (85%) of the gross leasable area of the Real Property.
8.1.3 No Material Changes. At the Closing,
there will be no material adverse changes in the physical or
financial condition of or title to the Property which were
discovered by Buyer after the date of this Agreement.
8.1.4 Delivery of Pre-Closing Documents and
Agreements. Seller shall have delivered to Buyer on or before
the Closing Date the following (to the extent in Seller's
possession, control or otherwise reasonably available [at no cost
or expense] to Seller):
8.1.4.1 Originals of all Leases;
8.1.4.2 Originals of all Records and
Plans;
8.1.4.3 Originals of all Licenses
and Permits; and
8.1.4.4 Originals of all Warranties.
8.1.5 Title Insurance. The Title Company
will have issued or have unconditionally and irrevocably
committed to issue the Title Policy to Buyer.
8.1.6 Intentionally omitted.
8.1.7 Loan Approval. Lender and all
rating agencies shall have unconditionally consented to the
assignment and assumption of the Loan to Buyer on terms
reasonably acceptable to Buyer, and shall have executed and
delivered to Escrow Holder, the Assignment, Assumption and
Consent Agreement; provided, however, in the event that Lender
elects not to unconditionally consent to the assignment and
assumption of the Loan to Buyer by October 30, 1997, then Buyer
shall have the right to terminate this Agreement upon written
notice thereof to Seller and Escrow Holder, in which event the
Deposit, and any interest accrued thereon, and the Loan
Assumption Fee Deposit shall be returned to Buyer without further
instructions from Seller, and all of the rights and obligations
of the parties existing hereunder shall terminate and be of no
further force or effect except any rights and obligations which
are expressly stated to survive the termination of the Agreement.
8.1.8 CBS' Right to Purchase. Buyer
shall have received evidence reasonably satisfactory to Buyer
that CBS shall have elected in writing not to purchase the
Property or otherwise waived its right to purchase the Property
pursuant to its lease for Suite 300 of the Property.
8.2 Seller's Conditions. Seller shall not be
required to close the transaction provided for under this
Agreement, unless and until Seller deems that each and every one
of the following conditions has been fulfilled:
8.2.1 Representations and Warranties of
Buyer. The representations and warranties set forth in this
Agreement made by Buyer shall be true and correct as of the
Closing in all respects.
8.2.2 Buyer's Deliveries. Buyer shall
have duly and timely delivered to Escrow Holder all of the items
described in Section 4.2 of this Agreement.
90 Intentionally omitted.
100 PRORATIONS. The following are to be prorated as
of the Closing Date, as follows:
10.1 Current Rent. Current rents under the Leases
shall be prorated as of the Closing Date, regardless of whether
such rents have been paid to Seller.
10.2 Rent Arrears. With respect to any rent
arrears arising under the Leases, Buyer shall pay to Seller any
rents actually collected that are applicable to the period
preceding the Closing Date, less reasonable collection charges;
provided, however, that it is hereby understood and agreed that
all rents collected by Buyer shall be applied first to unpaid
rents accruing after the Closing Date, and then, only after all
such past due rents have been collected, to unpaid rents accruing
prior to the Closing Date.
10.3 Tenant Improvement Allowances and Rent
Credits. Buyer shall receive a credit against the Purchase Price
at Closing for all unpaid tenant improvement allowances and rent
credits under the leases entered into with Bet Tzedek and Lee &
Associates.
10.4 Security Deposits. The security deposits
paid by the tenants pursuant to the Leases, and any interest
required to be paid thereon, shall be fully credited to Buyer at
Closing.
10.5 Other Prorations. Liability for all real
property taxes, common area maintenance, Property operation
expenses, and other recurring costs which are not otherwise paid
directly by tenants shall be prorated as of the Closing Date;
provided, however, Buyer shall not be responsible for any costs
or expenses pertaining to Service Contracts or items of expense
which Buyer has not approved in writing. Seller shall remain
liable for any supplemental taxes attributable to any period
prior to the Closing. If any such supplemental taxes shall be
billed to Buyer or levied against the Property after the Closing,
then Seller agrees to pay its prorated share thereof to Buyer
within thirty (30) days of demand therefor by Buyer. Any such
sums not paid when due may be advanced by Buyer, and such amounts
shall bear interest from the date of advance by Buyer until paid
by Seller at the maximum contract rate permitted by law.
10.6 Preliminary Closing Adjustment. Seller and
Buyer shall jointly prepare a preliminary closing adjustment
computation on the basis of the Leases and other sources, and
shall deliver such computation to the Escrow Holder prior to
Closing.
10.7 Post-Closing Reconciliation. All items
described in this Section 10 that are capable of being prorated
as of the Closing Date, shall be prorated as of the Closing Date.
All other items shall be reconciled within one hundred eighty
(180) days after the Closing Date to the extent that such items
may be reconciled within such one hundred eighty (180) day
period, or, to the extent such items may not be reconciled within
such one hundred eighty (180) day period, when such items may
first be reconciled after Closing.
10.8 Survival. The provisions of this Section 10
shall survive Closing.
110 COSTS AND EXPENSES. The closing costs shall be
allocated as follows:
11.1 Seller. Seller shall pay all premiums for
the CLTA portion of the Title Policy, all state and county
transfer taxes, all sales taxes, any other tax or assessment
imposed as a result of the transactions contemplated under this
Agreement, Seller's share of prorations, and any document
recording charges and notary fees, including, without limitation,
any recording fees and notary charges with respect to the Deed.
11.2 Buyer. Buyer shall be responsible for
its share of prorations and all premiums for the Title Policy and
any endorsements requested by Buyer in excess of the cost of the
CLTA portion of the Title Policy without any endorsements.
11.3 Other Closing Costs. Buyer and Seller shall
each pay one-half (1/2) of all escrow fees. Except for an amount
up to the Lender's Legal Fees Reimbursement which is payable by
Buyer, each party will pay their own legal and professional fees
and fees of other consultants incurred by Buyer and Seller,
respectively.
11.4 Delivery of Possession. Simultaneously with
the Closing, Seller shall deliver possession and enjoyment of the
Property to Buyer and Buyer shall thereupon have the immediate
right to possess, develop, use, sell, encumber and/or transfer
the Property, or any part thereof for its own account to the
total exclusion of Seller.
120 CONDEMNATION AND DESTRUCTION:
12.1 Eminent Domain or Taking. If proceedings
under a power of eminent domain relating to the Property or any
part thereof are commenced prior to the Closing Date, Seller
shall promptly inform Buyer in writing.
12.1.1 If such proceedings involve the
taking of title to all or any Material (defined below) interest
in the Property, Buyer may elect to terminate this Agreement by
notice in writing sent within thirty (30) days of Seller's
written notice to Buyer, in which case the Deposit and that
portion of the Loan Assumption Fee deposited with Escrow Holder,
and any interest thereon, shall be returned to Buyer without any
further instructions from Seller, and neither party shall have
any further obligation to or rights against the other except any
rights or obligations of either party which are expressly stated
to survive termination of this Agreement.
12.1.2 If the proceedings do not involve
the taking of title to all or a Material interest in the Property
or if Buyer does not elect to terminate this Agreement, this
transaction will be consummated as described in this Agreement
and any award or settlement payable with respect to such
proceeding will be paid or assigned to Buyer upon the Closing.
12.1.3 For purposes of Sections 12.1 and
12.2, "Material" shall mean a taking which Buyer reasonably
determines materially and adversely affects the value or
operations of the Property.
12.2 Damage or Destruction. Except as provided in
this paragraph, prior to the Close of Escrow the entire risk of
loss of damage by earthquake, flood, hurricane, landslide, fire
or other casualty is borne and assumed by Seller. If, prior to
the Closing Date, any part of the Property is damaged or
destroyed by earthquake, flood, landslide, fire or other
casualty, Seller will promptly inform Buyer of such fact in
writing and advise Buyer as to the extent of the damage.
12.2.1 If such damage or destruction is
Material, Buyer and Seller each has the option to terminate this
Agreement upon written notice to the other party given not later
than thirty (30) days after receipt of Seller's written notice to
Buyer advising of such damage or destruction.
12.2.2 If this Agreement is so
terminated, the Deposit and any interest thereon, shall be
returned to Buyer without any further instructions from Seller,
Seller shall immediately pay to Buyer an amount equal to the Loan
Assumption Fee Deposit, and neither party shall have any further
obligation to or rights against the other except any rights or
obligations of either party which are expressly stated to survive
termination of this Agreement.
12.2.3 If Buyer does not timely exercise
this option to terminate this Agreement, or if the casualty is
not Material, Seller will assign to Buyer all of Seller's right,
title and interest in and to any and all insurance proceeds under
Seller's insurance policies relating to such damage or
destruction, and shall reduce the Purchase Price by the amount of
the deductible and any other amount not covered by insurance
under such policies (including reasonably anticipated post-
Closing rental loss, except to the extent covered by insurance,
through to completion of such repair and restoration resulting
from such casualty), and this transaction will close pursuant to
the terms of this Agreement.
12.2.4 Survival. The provisions of this
Section 12 shall survive the Closing.
130 REMEDIES:
13.1 Buyer's Remedies. IN THE EVENT THAT SELLER
SHALL FAIL TO CONSUMMATE THIS AGREEMENT FOR ANY REASON, EXCEPT
BUYER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY BUYER OR
SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS HEREOF,
BUYER SHALL HAVE THE FOLLOWING REMEDIES, WHICH SHALL BE BUYER'S
SOLE AND EXCLUSIVE REMEDIES BASED UPON A DEFAULT BY SELLER. SUCH
REMEDIES SHALL NOT BE CUMULATIVE, MEANING BUYER MAY EXERCISE ONE
(1) BUT NOT BOTH OF SUCH REMEDIES. BUYER SHALL DELIVER TO SELLER
AND ESCROW HOLDER NOTICE OF ITS ELECTION OF REMEDIES WITHIN TWO
(2) DAYS AFTER SELLER'S DEFAULT. THE SOLE REMEDIES AVAILABLE TO
BUYER ARE AS FOLLOWS:
(i) BUYER MAY TERMINATE THIS AGREEMENT, IN
WHICH CASE ESCROW HOLDER SHALL IMMEDIATELY RETURN THE DEPOSIT,
TOGETHER WITH ANY INTEREST EARNED THEREON, TO BUYER, UPON
EXECUTION OF CANCELLATION INSTRUCTIONS BY BUYER. SELLER SHALL
PAY ANY ESCROW CANCELLATION CHARGES AND SHALL IMMEDIATELY PAY TO
BUYER UPON BUYER'S DEMAND THEREFOR AN AMOUNT EQUAL TO THE SUM OF
THAT PORTION OF THE LOAN ASSUMPTION FEE DEPOSIT, SELLER'S LEGAL
FEES REIMBURSEMENT PLUS THE LOAN SERVICING FEE. IN ADDITION,
BUYER SHALL HAVE THE RIGHT TO PURSUE AN ACTION AGAINST SELLER FOR
ALL ACTUAL OUT-OF-POCKET (BUT NOT CONSEQUENTIAL OR LOST PROFITS)
DAMAGES SUFFERED BY BUYER; OR
(ii) BUYER MAY BRING AN ACTION FOR SPECIFIC
PERFORMANCE AGAINST SELLER WITH RESPECT TO THIS AGREEMENT BUT
ONLY UNDER THE FOLLOWING CONDITIONS AND CIRCUMSTANCES:
(a) BUYER SHALL HAVE FULLY PERFORMED
ALL OBLIGATIONS OF BUYER UNDER THIS AGREEMENT, EXCEPT THAT WITH
RESPECT TO DEPOSITING THE BALANCE OF THE PURCHASE PRICE AND THE
BALANCE OF THE LOAN ASSUMPTION FEE, BUYER SHALL HAVE EVIDENCED TO
SELLER'S REASONABLE SATISFACTION THAT BUYER IS READY, WILLING AND
ABLE TO TIMELY DEPOSIT SAID FUNDS IN ESCROW;
(b) THE ACTION SHALL BE COMMENCED,
AND SERVICE OF PROCESS UPON SELLER MADE, NOT LATER THAN FORTY-
FIVE (45) DAYS AFTER SELLER'S DEFAULT; AND
(c) ALL OF THE ISSUES IN SUCH ACTION,
WHETHER OF FACT OR LAW, SHALL BE HEARD BY A REFERENCE PROCEEDING
PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION 638,
ET. SEQ. WITHIN TEN (10) DAYS FOLLOWING THE COMMENCEMENT OF ANY
SUCH ACTION, THE PARTIES SHALL MAKE APPLICATION TO THE COURT IN
WHICH THE ACTION IS PENDING FOR THE APPOINTMENT OF A RETIRED
SUPERIOR COURT JUDGE OR COURT OF APPEAL JUSTICE FROM THE THEN
CURRENT LIST OF RETIRED JUDGES AVAILABLE TO SERVE AS REFEREES IN
THE COUNTY IN WHICH SUCH ACTION IS COMMENCED TO SERVE AS THE
REFEREE. THE REFEREE CHOSEN SHALL BE DEEMED QUALIFIED ONLY IF HE
IS WILLING TO AGREE TO HEAR THE SUBJECT ACTION WITHIN TWENTY (20)
DAYS FOLLOWING THE DATE OF APPLICATION TO THE COURT, TO HEAR THE
SUBJECT ACTION ON CONSECUTIVE DAYS AND TO RENDER A DECISION
WITHIN A FURTHER FIFTEEN (15) DAY PERIOD. THE PARTIES SHALL
ADVANCE, IN EQUAL SHARES, THE FEES AND EXPENSES OF THE REFEREE
SELECTED PURSUANT TO THIS PROVISION, BUT THE LOSING PARTY IN ANY
SUCH ACTION SHALL REIMBURSE THE PREVAILING PARTY FOR ANY AND ALL
FEES AND EXPENSES PREVIOUSLY ADVANCED BY SUCH PREVAILING PARTY
FOR THE REFEREE.
13.2 Seller's Remedies. IF BUYER SHOULD FAIL TO
CONSUMMATE THIS AGREEMENT AS A RESULT OF BUYER'S DEFAULT UNDER
THE TERMS OF THIS AGREEMENT, THEN SELLER, AS ITS SOLE AND
EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT BY NOTIFYING BUYER
THEREOF AND RECEIVE OR RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES AGREE THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF
BUYER'S DEFAULT ON ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH
DAMAGES IS DIFFICULT OR IMPOSSIBLE TO DETERMINE, THE PARTIES
AGREE THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF
SELLER'S LOSS IN THE EVENT OF BUYER'S DEFAULT. THUS, SELLER
SHALL ACCEPT AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES BUT NOT
AS A PENALTY. SELLER HEREBY ACKNOWLEDGES AND AGREES SUCH
LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE
REMEDY AND SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 3389 AND ANY OTHER APPLICABLE EXISTING OR
FUTURE LAW PERMITTING A CONTRACT TO BE ENFORCED EVEN THOUGH
DAMAGES ARE LIQUIDATED FOR ITS BREACH. NOTWITHSTANDING THE
FOREGOING, FOR PURPOSES OF THIS SECTION 13.2 ONLY, THE "DEPOSIT"
SHALL ALSO INCLUDE THE LOAN ASSUMPTION FEE DEPOSIT, LOAN
SERVICING FEE AND LENDER'S FEE REIMBURSEMENT (ALTHOUGH SELLER
ACKNOWLEDGES THAT TO THE EXTENT LENDER, AMRESCO OR LENDER'S
COUNSEL IS ENTITLED TO ANY SUCH AMOUNTS UNDER THE TERMS OF THIS
AGREEMENT OR OTHERWISE, SUCH AMOUNTS SHALL BE PAID TO SUCH
APPLICABLE PARTIES AND SELLER SHALL HAVE NO RIGHT OR INTEREST IN
ANY SUCH AMOUNTS).
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THE FOREGOING PROVISION AND BY THEIR
INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
Seller: /s/ EG Buyer: /s/ RSZ
14. 1031 EXCHANGE. Seller may structure the sale of
the Real Property as a like-kind exchange under Internal Revenue
Code Section 1031 at Seller's sole cost and expense. Buyer shall
reasonably cooperate therein (which cooperation may include the
execution by Buyer of such additional documents and transactions
as may be requested by Seller), provided that no delay in the
Closing shall result therefrom and Buyer shall incur no costs,
expenses or liabilities in connection with Seller's exchange. If
Seller uses a qualified intermediary to effectuate the exchange,
any assignment of the rights or obligations of Seller hereunder
shall not relieve, release or absolve Seller of its obligations
to Buyer.
15. BROKERAGE COMMISSIONS. Each party hereby
represents and warrants to the other that except for brokerage
commission due to Broker under a separate agreement between
Seller and Broker, the payment of which commissions shall be the
sole responsibility of Seller, neither party has incurred any
obligation to any third party for the payment of any real estate
commission, finder's fee or other like sum in connection with the
sale of the Property to Buyer, and each party hereby agrees to
indemnify and hold the other party harmless from and against any
and all claims, demands, causes of action and costs, including
attorneys' fees and costs, made, brought or sought against or
from the other arising out of any agreement for the payment of a
real estate commission, finder's fee or other like sum entered
into between either party and a third party in connection with
the sale of the Property to Buyer.
16. NOTICES. All notices, requests, demands or
documents which are required or permitted to be given or served
hereunder shall be in writing and (a) delivered personally,
(b) delivered by a national overnight courier (i.e., FedEx), or
(c) transmitted by facsimile, addressed as follows:
To Seller at: Elliott Gottfurcht
1249 N. Whetherly
Los Angeles, California 90069
Facsimile: (310) 278-7787
with a copy to:
Ervin, Cohen & Jessup
9401 Wilshire Boulevard, 9th Floor
Beverly Hills, California 90212
Attn: Lee Silver, Esq.
Facsimile: (310) 859-2325
To Buyer at: Arden Realty Limited Partnership
9100 Wilshire Blvd., Suite 700 E
Beverly Hills, California 90212
Attn: Mr. Victor Coleman
Andrew Sobel, Esq.
Facsimile: (310) 274-6218
with a copy to:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, Tenth Floor
Los Angeles, California 90067
Attn: Scott M. Kalt, Esq.
Mark S. Weinstock, Esq.
Facsimile: (310) 203-0567
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either
personal, courier, or facsimile delivery. The addresses for
purposes of this paragraph may be changed by giving written
notice of such change in the manner provided herein for giving
notices. Unless and until such written notice is delivered, the
latest information stated by written notice, or provided herein
if no written notice of change has been delivered, shall be
deemed to continue in effect for all purposes hereunder.
17. ASSIGNMENT.
17.1 Assignment by Buyer. Buyer may assign
its rights and obligations under this Agreement to any
corporation, partnership, trust, limited liability company, or
other entity in which Buyer or any affiliate of Buyer is a
general partner, managing member, or otherwise controls. Except
as set forth above, Buyer may not, voluntarily or by operation of
law, assign or otherwise transfer any of its rights or
obligations under this Agreement.
17.2 Buyer Assignee's Rights and
Obligations. In the event of any such assignment by Buyer, the
assignee shall be and become (i) the grantee of the Deed, (ii)
the insured owner under the Title Policy, (iii) the assignee of
any other items of consideration Seller is to assign to Buyer
under this Agreement and (iv) the person or entity having the
right or obligation to (a) deliver statements, (b) deliver
documents, (c) give approvals, (d) waive conditions or (e) make
demands, all as may be permitted or required by this Agreement
and not then already accomplished by Buyer or another assignee.
18. MISCELLANEOUS:
18.1 Survival. The representations and
warranties contained in this Agreement shall survive for a period
of twelve (12) months following the Closing Date.
18.2 Parties in Interest. As and when used
herein, the terms, "Seller" and "Buyer" mean and include, and
this Agreement their respective successor and assigns and shall
be binding upon and inure to the benefit of, the above-named
Seller and Buyer and their respective successors and permitted
assigns.
18.3 Section Headings. The headings of sections
are inserted only for convenience and shall in no way define,
describe or limit the scope or intent of any provision of this
Agreement.
18.4 No Oral Modifications. This Agreement may
not be amended or modified except in writing executed by all
parties hereto.
18.5 Full Integration. Buyer and Seller each
acknowledge that there are no other agreements or representa
tions, either oral or written, express or implied, that are not
embodied in this Agreement, and this Agreement, the Exhibits
attached to this Agreement, and the Transfer Documents, represent
a complete integration of all the prior and contemporaneous
agreements and understandings and documents.
18.6 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and
their respective successors and assigns, and no other party shall
be a beneficiary hereunder.
18.7 Seller's Advice of Counsel. Seller
acknowledges that (a) Buyer has not made any representation as to
the Federal or State tax implications relating to the
transactions contemplated herein, (b) Seller has thoroughly read
and reviewed the terms and provisions of this Agreement and the
Exhibits attached hereto and is familiar with the terms of this
Agreement, (c) the terms and provisions contained in this
Agreement are clearly understood by Seller and have been fully
and unconditionally consented to by it, (d) Seller has had full
benefit and advice of counsel of its own selection, in regard to
understanding the terms, meaning and effect of this Agreement,
(e) the execution of this Agreement and of the other documents
executed pursuant to this Agreement is done freely, voluntarily,
with full knowledge, and without duress, (f) in executing this
Agreement, Seller is relying on no other representations, either
written or oral, express or implied, made to it by any other
party to this Agreement, and the consideration received by it
under this Agreement has been actual and adequate.
18.8 Attorneys' Fees. If an action is commenced
by a party hereto resulting from a dispute with respect to the
transactions contemplated herein, the prevailing party shall be
entitled to recover its attorneys' fees and costs from the other
party in such action. As used herein, the term "attorneys' fees"
means attorneys' fees whether or not litigation ensues and if
litigation ensues whether incurred at trial, on appeal, on
discretionary review or otherwise.
18.9 Governing Law. This Agreement will be
governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of California.
18.10 Confidentiality. Unless otherwise
agreed to in writing by Seller and Buyer, each party will use
reasonable efforts to keep confidential the terms of this
Agreement, the possible sale of the Property, and all documents,
financial statements, reports or other information provided to,
or generated by the other party relating to the Property, and
will use reasonable efforts to not disclose any such information
to any person other than (a) those employed by Seller or Buyer;
(b) those who are actively and directly participating in the
evaluation of the Property and the negotiation and execution of
this Agreement or financing of the purchase of the Property; and
(c) governmental, administrative, regulatory or judicial authori
ties in the investigation of the compliance of the Property with
applicable legal requirements; and (d) third parties as required
under applicable law. The provisions of this paragraph will
survive the termination of this Agreement other than by Closing.
18.11 Captions. The captions contained in
this Agreement are for convenience only and are not intended to
limit or define the scope or effect of any provision of this
Agreement.
18.12 Severability. The invalidity,
illegality or unenforceability of any provision of this Agreement
shall not affect the enforceability of any other provision of
this Agreement, all of which shall remain in full force and
effect.
18.13 Time of the Essence. Time is of the
essence of this Agreement and of the obligations required
hereunder.
18.14 Non-Waiver. No delay or failure by any
party to exercise any right hereunder, and no partial or single
exercise of any such right, shall constitute a waiver of that or
any other right, unless otherwise expressly provided herein.
18.15 Facsimile. The parties hereto and
their respective successors and assigns are hereby authorized to
rely upon the signatures of each person and entity on this
Agreement which are delivered by facsimile as constituting a duly
authorized, irrevocable, actual, current delivery of this
Agreement with original ink signatures of each person and entity.
18.16 Further Assurances. Buyer and Seller
agree to execute all documents and instruments reasonably
required in order to consummate the purchase and sale
contemplated in this Agreement and carry out the terms and
provisions hereof.
18.17 Joint and Several Liability. The
obligations of Seller under this Agreement and the other
documents executed pursuant to this Agreement shall be joint and
several.
18.18 Counterparts. This Agreement may be
executed in any number of counterparts and each such counterpart
shall be deemed to be an original, but all of which, when taken
together, shall constitute one Agreement.
18.19 Seller's Indemnities. Seller's
indemnities set forth in Sections 6.8 and 6.11 hereof shall
survive the Closing and the execution and delivery of the Deed.
18.20 Reimbursement of Costs to Buyer. In
the event CBS exercises its "First Right to Purchase" under the
terms of its lease at the Property, Seller shall reimburse Buyer
for all costs incurred by Buyer in connection with (i) the
negotiation and preparation of this Agreement, and (ii) Buyer's
due diligence investigation and analysis of the Property. Such
costs shall include, without limitation, attorneys' fees,
consultants' fees, inspection fees and costs of any studies or
reports prepared on behalf of Buyer. Seller shall reimburse
Buyer for any such costs within five (5) business days after
Seller's receipt of a demand therefor (which demand shall include
invoices reflecting the costs for which reimbursement is sought).
[SIGNATURES BEGIN ON FOLLOWING PAGE]
Buyer and Seller have executed this Agreement as of the
date written above.
"SELLER"
FAIRFAX CENTRE, LLC,
a California limited liability company
By: /s/ Elliot Gottfrucht
Elliot Gottfurcht
Its: Co-Manager
By: Indoprop, LLC, a California
limited liability company
Its: Co-Manager
By: /s/ Tony Sugiono
Tony Sugiono
Its: Manager
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation
Its: general partner
By: /s/ Richard S. Ziman
Richard S. Ziman
Its: CEO
FIRST AMENDMENT TO AGREEMENT OF PURCHASE
AND SALE AND JOINT ESCROW INSTRUCTIONS
This First Amendment to Agreement of Purchase and Sale
and Joint Escrow Instructions (AFirst Amendment@) is entered into
by and among Fairfax Centre, LLC, a California limited liability
company (AFairfax Centre@), 145 South Fairfax, LLC, a California
limited liability company (ABuyer@), Elliot Gottfurcht, a single
man (AGottfurcht@) and Indoprop, LLC, a California limited
liability company (AIndoprop@) with reference to the following
facts:
A. Fairfax Centre and Arden Realty Limited
Partnership, a Maryland limited partnership (AArden@) entered
into that certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of August 29, 1997 (AAgreement@) pursuant
to which Buyer agreed to purchase from Fairfax Centre certain
land improvements, fixtures and appurtenances situated thereon
(collectively, the AReal Property@). Pursuant to that certain
Assignment Agreement dated October 20, 1997, Arden assigned its
interest in the Agreement to Buyer. All definitions not further
defined herein shall have the meaning as set forth in the
Agreement.
B. Fairfax Centre is a California limited liability
company, the sole members of which are Gottfurcht and Indoprop
who each hold equal 50% interests.
C. On February 1, 1996, Gottfurcht and Indoprop
acquired the Real Property as tenants-in-common, each as to an
undivided 50% interest.
D. Nomura Asset Capital Corporation, as a condition
to the $4,125,000 loan made on December 19, 1996, which presently
encumbers the Real Property, required Gottfurcht and Indoprop to
transfer legal title to the Real Property to Fairfax Centre.
E. Fairfax Centre now desires to transfer legal title
to the Real Property to Gottfurcht and Indoprop, each to a 50%
tenancy-in-common interest, and Buyer and Fairfax Centre desire
to amend the Agreement to reflect that Gottfurcht and Indoprop
will transfer all of their right, title and interest in and to
the Real Property to Buyer in satisfaction of Fairfax Centre=s
obligations under the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Consent to Transfer. Buyer hereby acknowledges
the transfer of the Real Property to Gottfurcht and Indoprop,
each as to an undivided 50% tenancy-in-common interest and
consents to the transfer by Gottfurcht and Indoprop of their
interests in the Real Property to Buyer in satisfaction of
Fairfax Centre=s obligations under the Agreement.
Notwithstanding the transfer of the tenants-in-common interests
in the Real Property to Gottfurcht and Indoprop, Buyer agrees
that Gottfurcht=s and Indoprop=s sole responsibility under the
Agreement shall be to deliver the Deed as described in the
Agreement, that it will look solely to Fairfax Centre with regard
to all other obligations under the Agreement and that Gottfurcht
and Indoprop will have no personal liability thereunder.
2. Other Conveyance Documents. Gottfurcht and
Indoprop, concurrently with the conveyance of the Real Property
to Buyer, will also convey, without the necessity of further
documentation, all of their respective right, title and interest
in and to the Intangible Property, the Escrow Fund, the Leases
and Personal Property.
3. Counterparts. This First Amendment may be
executed in one or more counterparts, each of which shall be
deemed an original and all of which, when taken together, shall
constitute one and the same instrument.
4. Full force and Effect. In all other respects, the
Agreement remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this
First Amendment as of October ___, 1997.
145 SOUTH FAIRFAX, LLC, a California
limited liability company
By: ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership,
Managing Member
By: ARDEN REALTY, INC., a Maryland
corporation,its general partner
By: /s/ Victor J. Coleman
Victor Coleman,
President and Chief Operating Officer
FAIRFAX CENTRE,LLC, a California limited liability
company
By: /s/ Elliot Gottfurcht
ELLIOT GOTTFURCHT, its Co-Manager
By: INDOPROP, LLC, a California limited liability
company, its Co-Manager
By: /s/ Tony Sugiono
Tony Sugiono, its Manager
[Signatures Continued on Next Page]
[Signatures Continued from Previous Page]
/s/ Elliot Gottfurcht
ELLIOT GOTTFURCHT
INDOPROP, LLC, a California
limited liability company
By: /s/ Tony Sugiono
Tony Sugiono, its Manager
AGREEMENT OF PURCHASE AND SALE
AND
JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS (this "Agreement") is made and entered into as of
this 10th day of October, 1997, by and between PDG RANCHO
BERNARDO, LTD., a California limited partnership ("Seller"), and
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Buyer"), with reference to the following facts:
A. Seller is the owner of the Property (as hereinafter
defined).
B. Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, the Property (as hereinafter defined),
on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the
mutual covenants and agreements herein set forth, and other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
ARTICLE 1
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and
conditions set forth herein, the following:
1.1 Land. That certain land (the "Land") located at
11545 West Bernardo Court, in the City of San Diego, State of
California commonly known as Bernardo Regency Centre and more
particularly described on Exhibit A hereto;
1.2 Appurtenances. All rights, privileges and
easements appurtenant to the Land including, without limitation,
all minerals, oil, gas and other hydrocarbon substances on and
under the Land, as well as all development rights and air rights
relating to the Land, and all water, water rights and water stock
relating to the Land, and any and all easements, rights-of-way or
appurtenances used in connection with the beneficial use and
enjoyment of the Land (all of which are sometimes collectively
referred to as the "Appurtenances");
1.3 Improvements. All improvements and fixtures
located upon the Land, including, without limitation, an
approximately 47,916 net rentable square foot three (3) story
office building, and all other structures presently located on
the Land, all fixtures, apparatus, equipment, and appliances used
in connection with the operation or occupancy thereof (all of
which are collectively referred to as the "Improvements");
1.4 Leases. All interest of Seller, as landlord, in
and to the leases of space in the Improvements described on
Exhibit B hereto (collectively, the "Leases");
1.5 Personal Property. All personal property of
Seller, if any, located on or in or used in connection with the
operation, maintenance or management of the Land and/or the
Improvements (collectively, the "Personal Property");
1.6 Service Contracts. Those service contracts and
other agreements, lease rights, warranties, guarantees,
agreements, utility contracts and other rights relating to the
ownership, use and operation of all or any part of the Property,
elected to be assumed by Buyer pursuant to Section hereof
(collectively, the "Service Contracts"); and
1.7 Intangible Property. All right, title and
interest of Seller in and to any and all intangible property
owned by Seller and used in the ownership, use and/or operation
of the Land or the Improvements, including, without limitation,
the right to use any trade name now used in connection with the
Land or the Improvements, the books and records relating to the
Property, including computer discs, tapes and other data bases or
software, inventory records, building management records, payroll
records and all other books and records and all other books and
records relating to the operation and management of the Real
Property (collectively, the "Intangible Property").
The Land, the Appurtenances, the Improvements and the Leases
are sometimes referred to herein collectively as the "Real
Property." The Real Property, Personal Property, Service
Contracts and the Intangible Property are sometimes referred to
herein collectively as the "Property."
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The total purchase price for the
Property shall be the sum of Six Million Five Hundred Thousand
and No/100 Dollars ($6,500,000.00) (the "Purchase Price").
2.2 Payment of Purchase Price. The Purchase Price shall
be paid as follows:
(a) Deposit. Concurrently upon the execution of this
Agreement, Buyer shall deliver to Chicago Title Insurance Company
("Escrow Holder"), 925 "B" Street, San Diego, California the sum
of One Hundred Thousand and No/100 Dollars ($100,000.00) (the
"Deposit"). In the event the sale of the Property is
consummated, the Deposit shall be credited towards the Purchase
Price.
(b) Balance of Purchase Price. The Purchase Price,
less the sum of the Deposit (the "Purchase Price Balance") shall
be deposited with Escrow Holder by Buyer in immediately available
funds not later than the Closing Date (as hereinafter defined).
In the event the sale of the Property is consummated, such
amounts to be paid as set forth herein shall be credited towards
the Purchase Price. In the event the sale of the Property is not
consummated because of the failure of any condition or the
default by Seller, all such amounts, together with interest
thereon, shall be returned immediately to Buyer.
2.3 Investment of Deposit; Liquidated Damages
2.3.1 Investment of Deposit. The Deposit shall
be placed in an interest-bearing account or other investment with
a financial institution reasonably acceptable to Buyer, with all
interest accruing to the benefit of Buyer. Upon the expiration
of the Contingency Period, the Deposit shall become non-
refundable, subject to Buyer's rights under Section 5.4 hereof,
and subject to Seller's compliance with the terms hereof. The
Deposit shall be disposed of by Escrow Holder only as provided in
this Agreement.
2.3.2 Liquidated Damages. IN THE EVENT THAT,
FOLLOWING THE EXPIRATION OF THE CONTINGENCY PERIOD, THE
TRANSACTIONS CONTEMPLATED HEREBY ARE NOT CONSUMMATED DUE TO A
DEFAULT SOLELY ON THE PART OF BUYER, THE AMOUNT OF THE DEPOSIT
SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES AS
SELLER'S SOLE AND EXCLUSIVE REMEDY. THE PARTIES ACKNOWLEDGE THAT
SELLER'S ACTUAL DAMAGES IN THE EVENT THE TRANSACTIONS
CONTEMPLATED HEREBY ARE NOT CONSUMMATED FOLLOWING THE EXPIRATION
OF THE CONTINGENCY PERIOD DUE TO A DEFAULT SOLELY ON THE PART OF
BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES
ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF
SELLER'S DAMAGES.
Seller: /s/ WPT Buyer: /s/ VJC
ARTICLE 3
ESCROW
3.1 Deposit with Escrow Holder and Escrow Instructions.
Within two (2) business days following the execution of this
Agreement by the parties hereto, the parties hereto shall deposit
a fully executed original of this Agreement with Escrow Holder,
and this Agreement shall serve as the instructions to Escrow
Holder for consummation of the transactions contemplated hereby.
Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable
Escrow Holder to comply with the terms of this Agreement;
provided, however, that in the event of any conflict between the
terms and provisions of this Agreement and the terms and
provisions of any supplementary escrow instructions, the terms
and provisions of this Agreement shall control.
3.2 Confirmation of the Opening of Escrow. Upon
receipt of a fully executed copy of this Agreement, Escrow Holder
shall immediately execute this Agreement to evidence Escrow
Holder's agreement to act in compliance with the terms and
provisions hereof. Escrow Holder shall immediately notify Buyer
in Seller in writing of the date on which escrow was established
with Escrow Holder (the "Opening of Escrow"), which date shall
thereafter be the Opening of Escrow date for purposes of this
Agreement.
ARTICLE 4
TITLE TO PROPERTY
4.1 Real Property. At the Closing, Seller shall
convey to Buyer marketable and insurable fee simple title to the
Real Property by duly executed and acknowledged grant deed in the
form of Exhibit C hereto (the "Grant Deed"). Evidence of
delivery of marketable and insurable fee simple title to the Real
Property shall be the issuance by Chicago Title Insurance Company
(the "Title Company") of an ALTA Owner's Policy of Title
Insurance (extended coverage) (form B, rev. 10-17-70) (the "Title
Policy") in the amount of the Purchase Price, insuring fee simple
title to the Real Property in Buyer, free and clear of monetary
liens and subject only to the Permitted Exceptions (as
hereinafter defined) and including the Endorsements (as
hereinafter defined).
4.2 Leases. At the Closing, Seller shall transfer all
of its right, title and interest in and to the Leases by an
Assignment of Leases in the form of Exhibit D hereto (the
"Assignment of Leases"), free and clear of any liens,
encumbrances or interests of third parties.
4.3 Personal Property. At the Closing, Seller shall
transfer title to the Personal Property, if any, by a bill of
sale in the form of Exhibit E hereto (the "Bill of Sale"), free
and clear of any liens, encumbrances or interests of third
parties.
4.4 Service Contracts. At the Closing, Seller shall
transfer all of its right, title and interest in and to the
Service Contracts, if any, by an Assignment of Service Contracts,
Warranties and Guarantees in the form of Exhibit F hereto (the
"Assignment of Service Contracts"), free and clear of any liens,
encumbrances or interest of third parties.
4.5 Intangible Property. At the Closing, Seller shall
transfer all of its right, title and interest in and to all
Intangible Property, if any, by an Assignment of Intangible
Property in the form of Exhibit G hereto (the "Assignment of
Intangible Property"), free and clear of any liens, encumbrances
or interests of third parties.
ARTICLE 5
BUYER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to Buyer's
obligation to purchase the Property:
5.1 Review and Approval of Title. Seller has
delivered to Buyer all of the following:
5.1.1 a current extended coverage preliminary
title report (the "Preliminary Title Report") with respect to the
Property issued by the Title Company, accompanied by copies of
all documents referenced in such report;
5.1.2 an ALTA survey of the Real Property
prepared by a licensed surveyor reasonably acceptable to Buyer
(the "Survey"). The Survey shall be in sufficient detail to
provide the basis for an ALTA owner's policy of title insurance
without boundary, encroachment or survey exceptions, and shall
show the location of all easements and improvements, and any and
all other pertinent information with respect to the Real
Property; and
5.1.3 copies of all existing and proposed
easements, covenants, restrictions, agreements or other documents
which affect the Real Property, including, without limitation,
any and all documents relating to any variance, conditional use
permits or land-use restrictions relating to or affecting the
Real Property, or if no such documents exist, a certification of
Seller to that effect.
Title to the Property shall be subject only to such exceptions in
the Preliminary Title Report as Buyer shall approve, in Buyer's
sole and absolute discretion (collectively, the "Permitted
Exceptions"). Buyer shall have until October 16, 1997, (the
"Contingency Period"), in which to notify Seller, in writing, as
to those items which are Permitted Exceptions, those matters
which Buyer disapproves, and which endorsements Buyer will be
requiring (collectively, the "Endorsements"). Buyer's failure to
provide such written notice to Seller shall constitute approval
of all matters shown in the Preliminary Title Report and Survey.
If Buyer disapproves of any matter disclosed in the Preliminary
Title Report or Survey as herein provided, Seller shall have ten
(10) business days after Seller receives written notice of such
disapproval to elect to cure any such matter by delivering
written notice of such election to Buyer. Seller's failure to
give such notice to Buyer within the ten (10) day period set
forth herein shall constitute Seller's election not to cure the
matters disapproved by Buyer. If Seller elects not to cure any
such matter, Buyer may either, at Buyer's sole election, (i)
proceed with the purchase of the Property, in which event Buyer
shall be deemed to have approved such matters which were
previously disapproved, or (ii) terminate this Agreement, in
which event this Agreement shall terminate, the Deposit, together
with any interest earned thereon, shall be returned to Buyer, and
the parties hereto shall be relieved of all further rights and
obligations hereunder.
5.2 Delivery of Reports and Documents. Seller has
delivered to Buyer, copies of any and all of the following
documents in Seller's possession or control:
(a) a rent roll of the Property for the current month;
(b) evidence that the Property complies with the
Subdivision Map Act;
(c) copies of the Leases, and all licenses, service
contracts (including parking, elevator, HVAC and landscaping
maintenance contracts), management contracts, brokerage
agreements, permits, variances, insurance policies, maps,
certificates of occupancy, building permits and other
documentation and evidence that the construction, present use,
occupancy and operation of the Property is authorized by and is
in compliance with all governmental regulations;
(d) warranties and instruction books (e.g., for
vertical transportation, HVAC and other building systems);
operating statements for calendar years 1995 and 1996, and 1997
monthly statements to date;
(e) all available plans, structural drawings,
architectural and "as built" drawings, including, but not limited
to, mechanical, electrical, air conditioning, landscape and
sprinkler drawings and specifications regarding the improvements,
and any soils, structural, geological, environmental, hazardous
materials and asbestos studies or reports relating to subsurface
conditions, grading plans, topographical maps and similar data
respecting the Property;
(f) copies of property tax bills for the last two (2)
years and copies of the most recently available utility bills and
similar records respecting the Property;
(g) a list of all personal property owned by or leased
by Seller and used in connection with the ownership or operation
of the Property;
(h) a certificate of Seller certifying to Seller's
best knowledge that there is no legal or administrative action,
proceeding, claim, arbitration or suit pending before any court,
agency or official, nor any such claim or action threatened in
writing, relating to the Seller, the Property or with respect to
the validity of any statutes, ordinances, regulations or
restrictions or any permits or approvals thereunder relating to
the Property, nor any outstanding contingent liabilities
affecting the Property; and
(i) any and all other reports, plans or studies
relating to the Property
(collectively, the "Reports and Documents"). The Reports and
Documents are listed on that certain letter dated September 16,
1997, attached hereto as Exhibit L, and Buyer acknowledges
receipt of copies of the Reports and Documents listed thereon.
Buyer shall have until the expiration of the Contingency Period
in which to review the Reports and Documents heretofore delivered
and approve or disapprove any of the foregoing, in Buyer's sole
and absolute discretion. In the event Buyer disapproves any of
the Reports and Documents, Buyer shall deliver Seller written
notice of Buyer's disapproval prior to the expiration of the
Contingency Period, in which event this Agreement shall
terminate, the Deposit, together with any interest thereon, shall
be returned to Buyer, and the parties hereto shall be relieved of
all further rights and obligations hereunder. In the event Buyer
fails to deliver said written notice to Seller prior to the
expiration of the Contingency Period, Buyer shall be deemed to
have disapproved the Reports and Documents. Buyer agrees to
return the Reports and Documents to Seller in the event for any
reason this Agreement is terminated and the transactions
contemplated herein are not consummated.
5.3 Buyer's Independent Review. Buyer shall have the
right, during the Contingency Period, to conduct such further
inspections and/or tests of the Property as Buyer deems necessary
and/or desirable, to enable Buyer to satisfy itself as to all
matters relating to the Property, including, without limitation,
a Phase 1 environmental assessment of the Property, asbestos-
containing-materials studies, Americans with Disabilities Act
compliance studies, soils testing, engineering studies, zoning
and intended use reviews, the physical, structural, mechanical
condition of the Property, seismic studies, and other surveys and
studies of the Property (collectively, "Buyer's Inspections and
Reports"). Buyer's right to conduct Buyer's Inspections and
Reports shall be subject to and conducted in accordance with
Buyer's right of access to the Property as set forth in Section
hereof. In the event that, based upon Buyer's independent review
of the Property, Buyer determines, in Buyer's sole and absolute
discretion, that Buyer is unwilling to proceed with the purchase
of the Property, Buyer may elect to terminate the Agreement by so
notifying Seller in writing of Buyer's election prior to the
expiration of the Contingency Period, and this Agreement shall
terminate, the Deposit, together with any interest earned
thereon, shall be returned to Buyer, and the parties hereto shall
be relieved of all further rights and obligations hereunder. In
the event Buyer fails to deliver said written notice to Seller
prior to the expiration of the Contingency Period, Buyer shall be
deemed to have disapproved Buyer's Inspections and Reports.
5.4 Estoppel Certificates. Buyer shall receive, no
later than October 31, 1997, an estoppel certificate from (i)
each tenant occupying not less than 2,500 net rentable square
feet, and (ii) a sufficient number of other tenants at the
Property such that estoppel certificates shall have been received
pursuant to clauses (i) and (ii) hereof with respect to not less
than eighty-five percent (85%) of the aggregate net rentable
square feet of the Property covered by Leases in effect on the
Closing Date, in the form of Exhibit H hereto and in substance
satisfactory to Buyer, in Buyer's sole and absolute discretion
(collectively, the "Estoppel Certificates"). Buyer shall have
until November 7, 1997 in which to review and approve or
disapprove the Estoppel Certificates. Buyer's failure to
disapprove the Estoppel Certificates shall be deemed Buyer's
approval of the Estoppel Certificates. Upon Buyer's approval of
the Estoppel Certificates, the Closing shall proceed in
accordance with Article 7 hereof. In the event Buyer disapproves
of any Estoppel Certificates, Buyer shall notify Seller of the
basis for such disapproval. Seller shall then have five (5) days
following receipt of Buyer's disapproval to cure the matters
disapproved by Buyer to Buyer's satisfaction. In the event
Seller so cures the matters disapproved by Buyer, theClosing
shall proceed in accordance with Article 7 hereof. If Seller
elects not to cure, or is unable to cure the matters disapproved
by Buyer, then Buyer shall have five (5) days in which to elect
to waive the condition in question and proceed with the
transactions contemplated hereby, or in the alternative, to
terminate this Agreement, in which event this Agreement shall
Terminate, the Deposit, together with any interest earned
thereon, shall be returned to Buyer, and the parties hereto shall
be relieved of all further rights and obligations hereunder.
5.5 Representations and Warranties of Seller. All of
Seller's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct when
made and shall be true and correct as of the Closing Date.
5.6 Covenants of Seller. Seller shall have complied
with all of Seller's covenants and agreements contained in or
made pursuant to this Agreement.
5.7 Delivery of Documents. Seller shall have
delivered into Escrow the documents and instruments described in
Section hereof and shall have delivered to Buyer the documents
and instruments described in Section hereof.
5.8 Condition of Property. The condition of the
Property shall not have materially changed from the date of this
Agreement to the Closing Date, ordinary wear and tear excepted.
5.9 Conditions for the Benefit of Buyer. The
foregoing conditions are for the sole benefit of Buyer. If any
of the foregoing conditions described in this Article 5 is not
satisfied for any reason whatsoever, Buyer shall have the right
at its sole election either to waive such condition and proceed
with the transactions contemplated hereby, or, in the
alternative, to terminate this Agreement, in which event Buyer
shall be entitled to a return of the Deposit, together with all
interest earned thereon, and Seller and Buyer shall be released
from further obligation or liability hereunder (except for those
obligations and liabilities which, pursuant to the terms of this
Agreement, survive such termination).
ARTICLE 6
SELLER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to
Seller's obligation to sell the Property:
6.1 Representations and Warranties of Buyer. All of
Buyer's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct when
made and shall be true and correct as of the Closing Date.
6.2 Covenants of Buyer. Buyer shall have complied
with all of Buyer's covenants and agreements contained in or made
pursuant to this Agreement.
6.3 Delivery of Documents and Funds. Buyer shall have
delivered into Escrow the documents, instruments and funds
described in Section hereof.
6.4 Conditions for the Benefit of Seller. The
foregoing conditions are for the sole benefit of Seller. If any
of the foregoing conditions described in this Article 6 is not
satisfied for any reason whatsoever, Seller shall have the right
at its sole election either to waive such condition and proceed
with the transactions contemplated hereby, or, in the
alternative, to terminate this Agreement, and (in the event Buyer
is in default hereunder by reason of such failure of condition)
retain the Deposit as liquidated damages pursuant to Section
2.3.2 hereof.
ARTICLE 7
CLOSING
7.1 Closing. The closing hereunder (the "Closing") shall
mean the recording of the Grant Deed conveying title to the
Property from Seller to Buyer and shall be held and delivery of
all items to be made at the Closing shall be made at the offices
of Escrow Holder five (5) days following the later of the
expiration of the Contingency Period or Buyer's approval or
deemed approval of the Estoppel Certificates pursuant to Section
5.4 hereof (the "Closing Date"), or such other date prior thereto
and/or at such other location as Buyer and Seller may mutually
agree in writing. In the event the Closing Date does not fall on
a Business Day (as hereinafter defined), the Closing Date shall
be moved to the next succeeding Business Day. Such date may not
otherwise be modified without the written approval of both Seller
and Buyer. In the event the Closing does not occur on or before
the Closing Date, Escrow Holder shall, unless it is notified by
both parties to the contrary within five (5) days after the
Closing Date, return to the depositor thereof items which may
have been deposited hereunder. Any such return shall not,
however, relieve either party hereto of any liability it may have
for its wrongful failure to close.
7.2 Deliveries by Seller to Escrow Holder. Not later
than one (1) business day prior to the Closing Date, Seller shall
deposit with Escrow Holder the following:
7.2.1 The Grant Deed duly executed and
acknowledged by Seller, in recordable form, and ready for
recordation on the Closing Date;
7.2.2 An Affidavit of Non-Foreign Status in the
form of Exhibit I hereto, duly executed by Seller pursuant to
Section 1445 of the Internal Revenue Code of 1986, as amended;
7.2.3 California Form 590-RE, duly executed by
Seller;
7.2.4 The Bill of Sale;
7.2.5 The Assignment of Leases;
7.2.6 The Assignment of Service Contracts; and
7.2.7 Any and all other documents, instruments,
data, records, correspondence or agreements called for hereunder
which have not been previously delivered.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
7.3 Deliveries by Seller Outside of Escrow. On or
before the Closing Date, Seller shall deliver or cause to be
delivered to Buyer the following:
7.3.1 To the extent they are then in
Seller's possession, and have not heretofore been delivered to
Buyer, the original and as-built plans and specifications for all
Improvements on the Property;
7.3.2 To the extent in Seller's possession,
all unexpired warranties and guarantees which Seller has received
in connection with any work or services performed with respect
to, or equipment installed in, the improvements on the Property;
7.3.3 All keys in Seller's possession
(properly tagged for identification) for all improvements on the
Property;
7.3.4 The originals of all Leases and
Estoppel Certificates (if not previously delivered), all
correspondence to or from any tenants, relating to the Leases and
all guarantees, certificates of deposit or other security
associated therewith;
7.3.5 The originals of all Service Contracts
which are being assumed by Buyer and will remain in effect after
the Closing and all correspondence and existing records prepared
by Seller in its normal course of operations specifically for the
Property (and which are not otherwise confidential) relating to,
and necessary for, the on-going operations and maintenance of the
Property (which materials may be either delivered at Closing or
left at the management office at the Property);
7.3.6 An inventory list of all Seller's personal
property, if any, on the Property; and
7.3.7 Copies of all insurance policies containing
coverage applicable to the Property, including all additional
insured endorsements in which Seller is named as an additional
insured on an insurance policy concerning the Property. For
purposes of this agreement, policies of insurance include, but
are not limited to, policies of commercial general liability,
fire, earthquake, flood, hazard, bodily injury, lost rents,
theft, condemnation, casualty loss and any umbrella policies
concerning the Property;.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
7.4 Deliveries by Buyer. Not later than the Closing
Date, Buyer shall deposit with Escrow Holder the following:
7.4.1 The Purchase Price Balance, for
disbursement to Seller in accordance with the terms and
provisions hereof, to be held by Escrow Holder pursuant to joint
closing instructions reasonably acceptable to Buyer and Seller;
and
7.4.2 Any other documents, instruments, data,
records, correspondence or agreements called for hereunder which
have not previously been delivered.
Seller may waive compliance on Buyer's part under any of the
foregoing items by an instrument in writing.
7.5 Other Instruments. In addition to the documents and
instruments to be delivered as herein provided, each of the
parties hereto shall, from time to time at the request of the
other party, execute and deliver to the other party such other
instruments of transfer, conveyance and assignment and shall take
such other action as may be reasonably required to effectively
carry out the terms of this Agreement.
7.6 Prorations. All revenues, income, receivables,
costs, expenses and payables of the Property shall be apportioned
equitably between the parties as of Closing on the basis of the
actual number of days in a particular month, and with respect to
the items enumerated below where a particular manner of
apportionment is provided, then apportionment of such item shall
be made in such manner. The obligation to make apportionments
shall survive Closing. Without limitation, the following items
shall be so apportioned:
(i) Monthly rents and percentage rent and
"passthroughs" of real estate taxes and operating expenses due
from occupancy tenants under Leases, as and when collected. If
at Closing there are any past due rents or charges owed by
occupancy tenants, they shall not be prorated until received;
Buyer shall include such delinquencies in its normal billing and
shall pursue the collection thereof in good faith after the
Closing Date (but Buyer shall not be required to litigate or
declare a default in any Lease). To the extent Buyer receives
amounts on account of Leases on or after the Closing Date, such
payments shall be applied first toward then current rent owed to
Buyer in connection with the applicable Lease for which such
payments are received, and any excess monies received shall be
applied toward the payment of any delinquent rents, with Seller's
share thereof being promptly delivered to Seller. Buyer may not
waive any delinquent rents nor modify a Lease so as to reduce or
otherwise affect amounts owed thereunder for any period in which
Seller is entitled to receive its share of charges or amounts
without first obtaining Seller's written consent. Seller hereby
reserves the right to pursue any remedy against any tenant owing
delinquent rents and any other amounts to Seller. Buyer shall
reasonably cooperate with Seller in any collection efforts
hereunder (but shall not be required to litigate or declare a
default in any Lease). With respect to delinquent rents and any
other amounts or other rights of any kind respecting tenants who
are no longer tenants of the Property as of the Closing Date,
Seller shall retain all rights relating thereto;
(ii) Real estate and personal property taxes and any
special assessments, taking into consideration discounts for the
earliest permitted payment, based upon the latest previous tax
levies. Such items shall be reapportioned between Seller and
Buyer if current tax rates differ from the latest previous tax
rates as soon as the same are known. Seller agrees that to the
extent any additional taxes, assessments or levies are imposed,
assessed or levied against the Property, or any portion thereof,
subsequent to Closing, relating to the period prior to the
Closing, Seller shall promptly pay to Buyer an amount equal to
such additional assessments or levies. Similarly, if tax refunds
become payable for periods during Seller's ownership of the
Property, such amounts (subject to adjustments for the potential
claims of occupancy tenants that paid tax increases by way of
rent escalations to Seller) shall be promptly paid over to
Seller. In the event that any assessments on the Property are
payable in installments, then the installment for the current
period shall be prorated (with Buyer assuming the obligation to
pay any installment due after the Closing Date). In no event
shall Seller be charged with or be responsible for any increase
in the taxes on the Property resulting from the sale of the
Property or from any improvements made or lease entered into on
or after the Closing Date;
(iii) Transferable annual permits, licenses, and/or
inspection fees, if any, on the basis of the duration of the
same;
(iv) Security deposits in Seller's possession, plus
accrued interest, if any, payable thereon to tenants, and any
other deposits and prepaid rent, shall be credited (or assigned)
to Buyer;
(v) Utility charges levied against Seller or the
Property, and Buyer shall transfer all such utility services to
its name and account immediately upon Closing;
(vi) Service Contracts on the basis of the charge or
premium for the period involved;
(vii) All forms of rent concessions, including free
rent, reduced rent and other concessions or obligations under all
Leases for any period following the Closing shall be credited to
Buyer against the Purchase Price at Closing; and
(viii) All other operation expenses incurred in the
management and operation of the Property.
No insurance policies shall be assigned hereunder, and
accordingly there shall be no proration of insurance premiums.
7.7 Costs and Expenses. Buyer and Seller shall each
pay one-half (1/2) of Escrow Holder's escrow fee. Seller shall
pay all documentary transfer taxes, transfer or conveyance taxes
imposed by the City and/or County in which the Property is
located. Seller shall pay any and all delinquent real property
taxes or assessments, and the cost of recording the Grant Deed.
Seller shall pay the cost of the Title Policy, including the
Endorsements with liability in the amount of the Purchase Price.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this
Agreement, Seller hereby represents and warrants to and agrees
with Buyer as follows:
7.1 Condition of Property. Except as disclosed to
Buyer by Seller in writing, to the best of Seller's knowledge,
without inquiry, there are now, and at the Closing Date there
will be, no material physical or mechanical defects of the
Property, including, without limitation, the plumbing, heating,
air conditioning, ventilating, life safety and electrical
systems, and all such items are in good operating condition and
repair.
8.2 Use and Operation. To the best of Seller's
knowledge, without inquiry, the use and operation of the Property
now are, and at the time of Closing will be, in full compliance
with applicable building codes, environmental, zoning and land
use laws, and other applicable local, state and federal laws,
ordinances, regulations and requirements.
8.3 Reports, Contracts and Other Documents. To the
best of Seller's knowledge, without inquiry, the survey,
mechanical and structural plans and specifications, soil reports,
certificates of occupancy, warranties, and all other books and
records relating to or affecting the Property and all other
contracts or documents delivered to Buyer pursuant to this
Agreement or in connection with the execution hereof, including,
without limitation, the Reports and Documents, are and at the
time of Closing will be true and correct copies, and all such
contracts and other documents relating to or affecting the
Property have been delivered to Buyer pursuant to this Agreement.
8.4 Condemnation; Land-Use Regulation. To the best of
Seller's knowledge, there are no condemnation, environmental,
zoning or other land-use regulation proceedings, either
instituted or planned to be instituted, which could detrimentally
affect the use or operation of the Property for its intended
purpose or the value of the Property, nor has Seller received
notice of any special assessment proceedings affecting the
Property.
8.5 Leases. Except as set forth on Exhibit B, Seller
has not executed or otherwise entered into any written or
unwritten leases, tenancies, occupancy agreements, or other
agreements with respect to the Property or affecting possession
thereof or any portion thereof or any rights thereto and there
are no such agreements entered into or executed by any third
party. There is no default on the part of Seller, as lessor, or,
except as described on Schedule hereto, on the part of any
lessee, and there exists no condition that with the passage of
time or the giving of notice or both would constitute such a
default. No event or transaction contemplated by this Agreement
will conflict with, violate any provision of, or constitute a
default under (with or without the giving of notice and/or the
lapse of time) any of the Leases. Except as disclosed on
Schedule , there is no conflict between the rights of tenants to
space in the Improvements, nor is any conflict between the terms
of this Agreement and any Lease, whether by original leasing,
options to extend, expand or renew, rights of first refusal, or
otherwise.
8.6 Service Contracts, Mechanic's Liens and Other
Agreements. Other than those which are cancelable on thirty (30)
day's notice, Seller has not entered into any service agreements
or contracts or other agreements, oral or written (other than as
set forth in this Agreement) relating to the Property which will
be in force on the Closing Date, except as disclosed on Schedule
hereto, and Seller has not received any notice of any material
default thereunder that remains uncured. Seller shall provide
Buyer with true, correct and complete copies of all agreements
listed on Schedule pursuant to Section hereof.
8.7 Brokerage Commissions. To the best knowledge of
Seller, without inquiry, 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 tenant
lease or occupancy agreement including, without limitation, any
such compensation with respect to any future renewals, extensions
or expansions thereof.
8.8 Labor Disputes. To the best knowledge of Seller,
without inquiry, 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.
8.9 Absence of Other Agreements Affecting the
Property. To the best knowledge of Seller, without inquiry,
there are no easements, encumbrances or other agreements
affecting the Property except as may be shown in the Preliminary
Title Report and Survey.
8.10 Default in Respect of Appurtenances. To the best
of Seller's knowledge, without inquiry, there is no default under
or in respect of any of the Appurtenances on the part of any
party thereto and no condition exists that with the passage of
time or giving of notice or both would constitute such a default.
8.11 Litigation. There is no litigation pending or, to
Seller's knowledge threatened, against Seller that arises out of
the ownership or operation of the Property or that might
detrimentally affect the use or operation of the Property for its
intended purpose or the value of the Property or is likely to
materially and adversely affect the ability of Seller to perform
its obligations under this Agreement.
8.12 Utilities. To the best of Seller's knowledge,
without inquiry, all water, sewer, gas, electric, telephone, and
drainage facilities and all other utilities required by law or by
the normal use and operation of the Property are, and at the time
of Closing will be, connected and operating pursuant to valid
permits, and are and at the time of Closing will be adequate to
service the Property and to permit full compliance with all
requirements of law and normal usage of the Property by the
tenants thereof and their licensees and invitees.
8.13 Use Permits and Other Approvals. To the best of
Seller's knowledge, without inquiry, Seller has obtained all
licenses, permits and approvals required from all governmental
authorities having jurisdiction over the Property or from private
parties for the normal use and operation of the Property.
8.14 Authority of Seller. This Agreement and all
documents executed by Seller which are to be delivered to Buyer
at or prior to the Closing are or at the time of Closing will be
duly authorized, executed, and delivered by Seller, are or at the
time of Closing will be legal, valid, and binding obligations of
Seller enforceable in accordance with their terms, and are and
at the time of Closing will be sufficient to convey title (if
they purport to do so).
8.15 No Conflict. To the best of Seller's knowledge,
without inquiry, the execution and delivery of this Agreement,
the consummation of the transactions herein contemplated, and
compliance with the terms of this Agreement shall not conflict
with or result in a breach of any of the terms of provisions of,
or constitute a default under, any instrument or agreement to
which Seller is a party or, to Seller's knowledge, by which any
of the Property is or may be bound, or any applicable regulation
of any governmental agency, or any judgment, order or decree of
any court having jurisdiction over Seller or, to Seller's
knowledge, the Property.
8.16 Use and Operation of Property. Seller knows of no
facts nor has Seller failed to disclose to Buyer any fact which
would prevent Buyer from using, leasing and operating the
Property after Closing in the normal manner in which similar
properties in the area are used, operated and leased or in the
manner in which the Property has been used, leased and operated
prior to the Closing Date.
8.17 Other Contracts to Convey Property. Seller has
not legally committed nor obligated itself in any manner
whatsoever to sell the Property to any party other than Buyer.
8.18 Hazardous Substances and Environmental Matters.
Neither Seller, nor to the best knowledge of Seller, any other
person or entity, has ever used, generated, manufactured,
produced, stored, released, discharged or disposed of on, under
or about the Property, or transported to or form the Property any
Hazardous Substance (as hereinafter defined) or allowed any other
person or entity to do so. To the best knowledge of Seller,
without inquiry, no proceeding or inquiry by any governmental
authority with respect to the presence of any Hazardous Substance
on the Property or the migration thereof from or to other
property is pending or threatened, nor have any claims been made
or threatened by any third party against Seller or the Property
relating to any loss or injury resulting form any Hazardous
Substance. In addition, there is no occurrence or condition on
any real property adjoining or in the vicinity of the Property
that could cause the Property or any part thereof to be subject
to any restrictions on the ownership, occupancy, transferability
or use of the Property under any Environmental Law (as
hereinafter defined). The term "Environmental Law" shall
include, without limitation, any federal, state or local law,
statute, ordinance or regulation pertaining to health, industrial
hygiene or the environment (collectively referred to as
"Environmental Laws"), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA") as amended, 42 U.S.C. Sections 9601 et
seq., and the Resource Conservation and Recovery Act of 1976
("RCRA") as amended, 42 U.S.C. Sections 9601 et seq. The term
"Hazardous Substance" shall include, without limitation, (i)
those substances included within the definitions "hazardous
substances," "hazardous materials," "toxic substances," or "solid
waste" in CERCLA, RCRA and the Hazardous Materials Transportation
Act, 49 U.S.C. Sections 1801 et seq., as amended, and in the
regulations promulgated pursuant to said laws; (ii) those
substances defined as "hazardous wastes" in Section 25117 of the
California Health & California Health & Safety Code, or as
"hazardous substances" in Section 25316 of the California Health
& Safety Code, and in the regulations promulgated pursuant to
said laws; (iii) those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any
successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto); and (iv) such other substances, materials,
and wastes which are or become regulated under applicable local,
state or federal law, or which are classified as hazardous or
toxic under local, state or federal law, rules or regulations.
8.19 Transactions with Affiliates. Except as disclosed
on Schedule hereto, there are no agreements between Seller and
any Affiliate (as hereinafter defined) of Seller respecting the
Property, including the use, operation and maintenance thereof.
Without limiting the foregoing, there are no Leases, Service
Contracts, or brokerage agreements between Seller and any
Affiliate of Seller respecting the Property or any portion
thereof except as disclosed on Schedule . As used herein
"Affiliate" shall mean and refer to any entity which controls, is
controlled by, or is under common control with Seller.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to Seller to enter into this
Agreement, Buyer hereby represents and warrants to and agrees
with Seller as follows:
9.1 Authority of Buyer. This Agreement and all documents
executed by Buyer which are to be delivered to Seller at or prior
to the Closing are or at the time of Closing will be duly
authorized, executed, and delivered by Buyer, are or at the time
of Closing will be legal, valid, and binding obligations of Buyer
enforceable in accordance with their terms.
9.2 Litigation. There is no litigation pending or, to
Buyer's knowledge threatened, against Buyer that is likely to
materially and adversely affect the ability of Buyer to perform
its obligations under this Agreement.
9.3 No Conflict. The execution and delivery of this
Agreement, the consummation of the transactions herein
contemplated, and compliance with the terms of this Agreement
shall not conflict with or result in a breach of any of the terms
of provisions of, or constitute a default under, any instrument
or agreement to which Buyer is a party or any applicable
regulation of any governmental agency, or any judgment, order or
decree of any court having jurisdiction over Buyer.
ARTICLE 10
COVENANTS OF SELLER
Seller agrees and covenants with Buyer, from the date hereof
through the Closing Date, as follows:
10.1 Maintenance and Operation of the Property. Seller
shall maintain the Property in good order, condition and repair,
reasonable wear and tear excepted, and shall make all repairs,
maintenance and replacements as is necessary to so maintain the
Property as it is currently operated.
10.2 No Leases or Other Contracts. Seller shall not enter
into, modify or terminate any leases, service contracts or other
similar agreements with respect to the Property, or take any
other actions affecting the Property (other than in the ordinary
course of ownership) without the prior written consent of Buyer,
which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Buyer will have the right to
market the Property for lease.
10.3 No Other Encumbrances. Seller shall not enter into
any agreements respecting the sale of the Property or any portion
thereof, and shall not enter into any agreements which encumber
or subject to lien the Property or any portion thereof.
10.4 Insurance. Seller shall keep its existing policies
of insurance in full force and effect.
10.5 Disclosure of Changes. If Seller discovers any
information or facts which would materially or adversely change
the representations and warranties of Seller contained in this
Agreement, Seller shall promptly give notice to Buyer of such
information or facts.
ARTICLE 11
DAMAGE OR DESTRUCTION; CONDEMNATION
In the event that, after the date hereof but prior to the
Closing Date, either any portion of the Property is taken
pursuant to eminent domain proceedings or any of the improvements
on the Property are damaged or destroyed by any casualty, Seller
shall have no obligation to repair or replace any such damage or
destruction. Seller shall, upon consummation of the transaction
herein provided, assign to Buyer all claims of Seller respecting
any condemnation or casualty insurance coverage, as applicable,
and all condemnation proceeds or proceeds from any such casualty
insurance received by Seller on account of any casualty (the
damage from which shall not have been repaired by Seller prior to
the Closing Date) as applicable, and Seller shall give Buyer a
credit equal to the deductible portion of Seller's insurance
policy attributable to the Property. In the event (i) the
condemnation award shall equal or exceed One Hundred Thousand and
No/100 Dollars ($100,000.00) or otherwise materially and
adversely affect the Property, as reasonably determined by Buyer,
or (ii) the cost of repair of damage to the Property on account
of a casualty, shall equal or exceed One Hundred Thousand and
No/100 Dollars ($100,000.00) or otherwise materially and
adversely interfere with the operations of the Property, as
reasonably determined by Buyer, Buyer may, at its option,
terminate this Agreement by notice to Seller, given on or before
the Closing Date, in which event this Agreement shall terminate,
the Deposit, together with all interest earned thereon, shall be
returned to Buyer, and each party shall be relieved of all
further obligations hereunder.
ARTICLE 12
DELIVERY OF POSSESSION AND ENTRY ON PROPERTY
12.1 Delivery of Possession. Possession of the Property
shall be delivered to Buyer on the Closing Date.
12.2 Entry on Property. From the date hereof until the
Closing, Seller shall afford Buyer reasonable access to the
Property during normal business hours for the purpose of
conducting Buyer's Inspections. Buyer agrees to keep the
Property free and clear of any mechanic's liens or other liens in
connection with Buyer's Inspections and Reports, and Buyer agrees
to indemnify, defend and hold Seller harmless from and against
any and all liability, loss, cost, damage and/or expense,
including, without limitation, reasonable attorneys' fees and
costs, resulting directly from Buyer's entry onto the Property.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Seller. Seller hereby agrees,
for a period of one (1) year following the Closing Date, to
indemnify Buyer and hold Buyer harmless from and against any and
all claims, demands and losses, including, without limitation,
reasonable attorneys' fees and costs suffered by Buyer as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or
breach of covenant made by Seller in this Agreement or any
document, certificate, or exhibit given by Seller or delivered by
Seller to Buyer pursuant to or in connection with this Agreement;
and
(b) Any and all obligations, liabilities, claims,
liens or encumbrances, whether direct, contingent or
consequential and no matter how arising, and in any way related
to the Property and arising or accruing on or before the Closing
Date, or in any way related to or arising from any act, conduct,
omission, contract or commitment of Seller (or any of its agents
or employees) at any time or times on or before the Closing Date.
13.2 Indemnification by Buyer. Buyer hereby agrees,
for a period of one (1) year following the Closing Date, to
indemnify Seller and hold Seller harmless from and against any
and all claims, demands liabilities, liens, costs, expenses,
penalties, damages and losses, including, without limitation,
reasonable attorneys' fees and costs suffered by Seller as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or
breach of covenant made by Buyer in this Agreement or any
document, certificate, or exhibit given by Buyer or delivered by
Buyer to Seller pursuant to or in connection with this Agreement;
and
(b) Any and all obligations, liabilities, claims,
liens or encumbrances, whether direct, contingent or
consequential and no matter how arising, and in any way related
to the Property and arising or accruing after the Closing Date,
or in any way related to or arising from any act, conduct,
omission, contract or commitment of Buyer (or any of its agents
or employees) at any time or times after the Closing Date.
13.3 Warranty and Indemnity Regarding Estoppels. If
Seller has failed to deliver to Buyer any estoppel certificates
required to be delivered pursuant to Section hereof on or before
the Closing Date and Buyer nevertheless elects to close the
transaction, Seller shall indemnify Buyer with respect to any
claim made by any tenant or other party which is based upon facts
not consistent with the representations and warranties of Seller
herein or set forth on the respective unmodified form of estoppel
certificate to have been provided by such tenant.
The provisions of this Article shall survive the execution
and delivery of this Agreement, the delivery of the Grant Deed
and transfer of title.
ARTICLE 14
MISCELLANEOUS
14.1 Notices. Any notice or other communication
required or permitted to be given under this Agreement shall be
in writing and sent by commercial courier service, United States
mail, registered or certified mail, postage prepaid, return
receipt requested, and addressed as follows:
If to Buyer: Arden Realty Limited Partnership
9100 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212
Attn: Brigitta B. Troy, Director of
Acquisitions
with a copy to: Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars
Suite 1800
Los Angeles, California 90067
Attn: Peter M. Weil, Esq.
Fax No. (310) 556-2920
If to Seller: PDG Rancho Bernardo, Ltd.
1770 Gillespie Way, Suite 1770
El Cajon, California 92020
Attn: Skip Tschantz
with a copy to: Teel, Palmer & Roeper
600 "B" Street, Suite 2100
San Diego, California 92101
Attn: Jerry D. Palmer, Esq.
If to Escrow Holder: Chicago Title Insurance Company
________________________________
________________________________
________________________________
Attn: _________________________
If to the Title Company: Chicago Title Insurance Company
________________________________
________________________________
________________________________
Attn: __________________________
or such other address as either party may from time to time
specify in writing to the other in the manner aforesaid. If
personally delivered, such notices or other communications shall
be deemed delivered upon delivery. If sent by commercial courier
service, United States mail, registered or certified mail,
postage prepaid, return receipt requested, such notices or other
communications shall be deemed delivered upon delivery or refusal
to accept delivery as indicated on the return receipt.
14.2 Brokers and Finders. In connection with the
transactions contemplated by this Agreement (a) Seller hereby
represents and warrants to Buyer that Seller has not, and shall
not, incur any obligation to any third party for the payment of
any broker's fee, finder's fee, commission or other similar
compensation, other than to CB Commercial Real Estate Group,
Inc. and (b) Buyer hereby represents and warrants to Seller that
Buyer has not, and shall not, incur any obligation to any third
party for the payment of any broker's fee, finder's fee,
commission or other similar compensation. In the event of a claim
for broker's fee, finder's fee, commission or other similar
compensation in connection herewith, Buyer, if such claims is
based upon any agreement alleged to have been made by Buyer,
hereby agrees to indemnify and hold Seller harmless from and
against any and all liability, loss, cost, damage and/or expense
(including, without limitation, reasonable attorneys' fees and
expenses) which Seller may sustain or incur by reason of such
claim, and Seller, if such claims is based upon any agreement
alleged to have been made by Seller, hereby agrees to indemnify
and hold Buyer harmless from and against any and all liability,
loss, cost, damage and/or expense (including, without limitation,
reasonable attorneys' fees and expenses) which Buyer may sustain
or incur by reason of such claim. The provisions of this Section
shall survive the Closing.
14.3 Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereof and
their respective successors, heirs, administrators and assigns;
provided, however, that Buyer shall provide Seller with notice of
any assignment of its rights or obligations under this Agreement,
and such assignee of Buyer shall assume the obligations of Buyer
under this Agreement in writing.
14.4 Amendments. This Agreement may be amended or
modified only by a written instrument executed by the parties
hereto.
14.5 Continuation and Survival of Representations and
Warranties. All representations and warranties by the respective
parties contained herein or made in writing pursuant to this
Agreement are intended to be and shall remain true and correct as
of the time of Closing, shall be deemed to be material, and shall
survive the execution and delivery of this Agreement, and the
execution and delivery of the Grant Deed and the transfer of
title to the Property for a period of one (1) year following the
Closing Date.
14.6 Interpretation. Whenever used herein, the term
"including" shall be deemed to be followed by the words "without
limitation." Words used in the singular number shall include
the plural, and vice-versa, and any gender shall be deemed to
include each other gender.
14.7 Captions. The captions and headings of the
Articles and Sections of this Agreement are for convenience of
reference only, and shall not be deemed to define or limit the
provisions hereof.
14.8 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the
State of California, without regard to conflicts of law
principles.
14.9 Merger of Prior Agreements. This Agreement,
including the exhibits and schedules hereto, constitutes the
entire agreement between the parties with respect to the purchase
and sale of the Property and supersedes all prior agreements and
understandings between the parties hereto relating to the subject
matter hereof.
14.10 Attorneys' Fees. In the event either Buyer or Seller
brings any suit or other proceeding with respect to the subject
matter or enforcement of this Agreement, the prevailing party (as
determined by the court, agency or other authority before which
such suit or proceeding is commenced) shall, in addition to such
other relief as may be awarded, be entitled to recover reasonable
attorneys' fees, expenses and costs of investigation as actually
incurred (including, without limitation, attorneys' fees,
expenses and costs of investigation incurred in appellate
proceedings, costs incurred in establishing the right to
indemnification, or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13
of the Bankruptcy Code, 11 United States Code Sections 101 et
seq., or any successor statutes).
14.11 Time of the Essence. Time is of the essence of this
Agreement.
14.12 Election of Remedies. Except as otherwise
specifically provided herein to the contrary in Section hereof,
no right or remedy conferred upon either party in this Agreement
is intended to be exclusive of any other right or remedy
contained herein or now or hereafter available to either part at
law or in equity, and every such right and remedy shall be
cumulative and shall be in addition be every other right or
remedy contained in this Agreement or now or hereafter available
to either party at law or in equity.
14.13 Authority. The parties signing below represent and
warrant that they have the requisite authority to bind the
entities on whose behalf they are signing.
14.14 Exhibits. The exhibits and schedules attached hereto
are hereby incorporated by reference herein.
14.15 Severability. The invalidity or unenforceability of
any one or more of the provisions of this Agreement shall not
affect the validity or enforceability of any of the other
provisions of this Agreement.
14.16 Further Assurances. The parties hereto agree to
execute, acknowledge and deliver any and all additional papers,
documents and other assurances and shall perform any and all acts
and things reasonably necessary in connection with the
performance of the obligations hereunder and to carry out the
intent of the parties hereto.
14.17 Effect of Waiver. A waiver by either party hereto
shall not affect either party's right to enforce the provisions
contained herein, nor shall nay extension or waiver be held to be
an extension of time or waiver of any prior or subsequent breach
of the same or any other obligation under this Agreement.
14.18 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
14.19 No Third Parties Benefitted. This Agreement is made
and entered into solely for the benefit of Seller and Buyer,
their successors and assigns, and no other person or entity shall
have any rights hereunder.
14.20 Specific Performance. The parties understand and
agree that the Property is unique and for that reason, among
others, Buyer will be irreparably damaged in the event that this
Agreement is not specifically enforced. Accordingly, in the
event of any breach or default in or of this Agreement or any of
the warranties, terms or provisions hereof by Seller, Buyer shall
have, in addition to a claim for damages for such breach or
default, and in addition and without prejudice to any right or
remedy available at law or in equity, the right to demand and
have specific performance of this Agreement.
14.21 Memorandum of Agreement. Concurrently with the
execution of this Agreement, Seller shall execute, acknowledge
and deliver to Buyer a Memorandum of Agreement in the form of
Exhibit J hereto, which Buyer may record in the appropriate
records of the County in which the Property is situated.
14.22 Business Day. As used herein, Business Day shall
mean and refer to any day in which banking institutions are open
for business and the County Recorder's Office of San Diego
County, California is accepting documents for recordation in
their real estate records.
14.23 Furnishing of Audit Letter. Seller agrees to
furnish, from time to time upon the request of Buyer, an Audit
Letter substantially in the form of Exhibit K hereto, to Buyer's
accountants.
14.24 Arbitration. ANY CONTROVERSY OR CLAIM ARISING
UNDER OR RELATING TO THE TERMS OF THIS AGREEMENT OR ANY OF THE
EXHIBITS ATTACHED TO IT, AND ANY PROCEEDINGS TO ENFORCE THIS
AGREEMENT OR RIGHTS UNDER THIS AGREEMENT AND ITS EXHIBITS OTHER
THAN THE "EXCLUDED MATTERS" (AS HEREINAFTER DEFINED) SHALL BE
SETTLED BY ARBITRATION IN THE CITY OF SAN DIEGO IN ACCORDANCE
WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. THE ARBITRATOR(S) SHALL HAVE THE RIGHT TO DETERMINE
THE SCOPE OF THEIR JURISDICTION AND GRANT EQUITABLE RELIEF,
INCLUDING, WITHOUT LIMITATION, THE RIGHT TO ORDER THE EXPUNGEMENT
OF ANY LIS PENDENS WHICH THE ARBITRATOR(S) DEEM IMPROPER. THE
PREVAILING PARTY SHALL BE ENTITLED TO REASONABLE ATTORNEYS' FEES
AND OTHER REASONABLE COSTS INCURRED IN CONNECTION WITH THE
ARBITRATION OR ANY OTHER LITIGATION PLUS INTEREST ON THE AMOUNT
OF ANY AWARD. JUDGMENT UPON THE AWARD RENDERED BY THE
ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF. THIS PARAGRAPH MUST BE INITIALED BELOW IN ORDER FOR
THIS PARAGRAPH OF THE AGREEMENT TO BE BINDING.
NOTICE: BY INITIALLING IN THE SPACE BELOW, YOU
ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE
MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW, AND YOU ARE GIVING UP ANY RIGHTS YOU
MIGHT POSSESS TO HAVE THE DISPUTE LITIGATION IN A COURT
OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW, YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND
APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN
THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING
AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
/s/ WPT /s/ VJC
Seller's Initials Buyer's Initials
As used herein, "Excluded Matters" means any controversy,
claim or proceeding with respect to or otherwise related to a
breach or default of any representation or warranty contained in
this Agreement (which matters shall not be subject to the
arbitration provisions contained herein).
[Signature Page to Follow]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Seller: PDG Rancho Bernardo, Ltd.,
a California limited partnership
By: Pacific Diversified Group, LLC
a California limited liability company
Its: General Partner
By: /s/ William P. Tschantz
William P. Tschantz
Its: Manager
Buyer: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC.,
a Maryland corporation
Its: General Partner
By:/s/ Victor J. Coleman
Its: President and COO
AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
between
MOSHE SILAGI AND ANDREA SILAGI, Co-Trustees of the Silagi Family Trust,
CONEJO BUSINESS PARK, LLC, a California limited liability company,
MARIN CORPORATE CENTER LLC, a California limited liability company, and
EVERGREEN PLAZA LLC, a California limited partnership
as Seller
and
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
as Buyer
TABLE OF CONTENTS
Page
1. DEFINITIONS 1
1.1 "Appurtenances 1
1.2 "Assignments of Intangible Property 1
1.3 "Assignments of Leases 2
1.4 "Bills of Sale 2
1.5 "Closing 2
1.6 "Closing Date 2
1.7 "Code 2
1.8 "Deeds 2
1.9 "Deposit 2
1.10 "Due Diligence Period 2
1.11 "Escrow Holder 2
1.12 "Fixtures 2
1.13 "Governmental Regulations 3
1.14 "Hazardous Materials 3
1.15 "Intangible Property" 3
1.17 "Land 3
1.18 "Leases 4
1.19 "Licenses and Permits 4
1.20 "Notices To Tenants 4
1.21 "Personal Property 4
1.22 "Property" or "Properties" 4
1.23 "Purchase Price 4
1.24 "Real Property 4
1.25 "Records and Plans 4
1.26 "Service Contracts 5
1.27 "Tenant Estoppels 5
1.28 "Title Company 5
1.29 "Title Policy 5
1.30 "Transferor's Certificate 5
1.31 "Warranties 5
1.32 "Thousand Oaks Tanning Plaza" 5
1.33 "Rancho Plaza" 5
1.34 "Pennsfield Plaza" 5
1.35 "Conejo Business Park" 6
1.36 "Marin Corporate Center" 6
1.37 "Evergreen Plaza" 6
2. ESCROW 6
3. AGREEMENT TO SELL; PURCHASE PRICE 6
3.1 Deposit 6
3.2 Balance of Purchase Price 6
3.3 Adjustment of Purchase Price 7
4. DELIVERIES AT CLOSING; CLOSING PROCEDURES 7
4.1 By Seller 7
4.2 By Buyer 8
4.3 By Buyer and Seller 8
4.4 Closing Procedures 8
5. REPRESENTATIONS AND WARRANTIES 9
5.1 Seller's Representations and Warranties. 9
5.1.1 Organization 9
5.1.2 Non-foreign Person 9
5.1.3 Personal Property Owner 10
5.1.4 No Prior Transfers - Property 10
5.1.5 Agreements 10
5.1.6 No Litigation 10
5.1.7 Notice of Violations 10
5.1.8 Hazardous Materials 10
5.1.9 Use Permits and Other
Approvals 11
5.1.10 Compliance with Agreements 11
5.1.11 Financial Position 11
5.1.12 Agreements 11
5.1.13 Insolvency 11
5.1.14 Governmental Actions 11
5.1.15 Brokers 11
5.1.16 Leases 11
5.1.17 Exhibits; Schedules 12
5.1.18 Continuing Representation 12
5.2 Buyer's Representations and Warranties. 12
5.2.1 Organization 12
6. SELLER'S OBLIGATIONS 12
6.1 Further Liens and Encumbrances 12
6.2 Leases; Other Contracts; Interim
Activities 13
6.3 Property Management and Operation 13
6.4 Compliance with Laws 13
6.5 Actions Pending 13
6.6 Insurance Policies 13
6.7 Leasing Commissions 13
6.8 Cooperation with Representatives 14
6.9 No Removal of Personal Property 14
6.10 Obtaining Estoppels and Consents 14
6.15 Change in Condition 15
7. TITLE TO REAL PROPERTY 15
8. CONDITIONS PRECEDENT/CONCURRENT TO CLOSING; CLOSING
DATE 15
8.1 Buyer's Conditions 15
8.1.1 Representations, Warranties
and Covenants of Seller 15
8.1.2 Seller's Deliveries 15
8.1.3 No Material Changes 15
8.1.4 Delivery of Pre-Closing
Documents and Agreements 16
8.1.5 Title Insurance 16
8.1.6 Due Diligence Approval 17
8.1.7 Miscellaneous Information and
Documentation 17
8.1.8 Exhibits and Schedules 17
8.1.9 Estoppel Certificates 17
8.1.10 Loan Assumption 17
9. DUE DILIGENCE PERIOD 17
9.1 Matters To Be Reviewed 17
9.1.1 Title 17
9.1.2 Inspections and Studies 18
9.1.3 Indemnity 20
9.2 Notice of Objections 20
9.3 Election Not to Purchase One or More
Properties 20
10. PRORATIONS 21
10.1 Current Rent 21
10.2 Percentage Rent 21
10.3 Rent Arrears 21
10.4 Security Deposits 21
10.5 Other Tenant Charges 21
10.6 Utility Charges 21
10.7 Other Prorations 21
10.8 Free Rent 22
10.9 Preliminary Closing Adjustment 22
10.10 Post-Closing Reconciliation 22
10.11 Survival 22
11. COSTS AND EXPENSES 22
11.1 Seller 22
11.2 Other Closing Costs 22
11.3 Delivery of Possession 22
12. GENERAL INDEMNIFICATION. 23
13. CONDEMNATION AND DESTRUCTION 23
13.1 Eminent Domain or Taking 23
13.2 Damage or Destruction 24
14. REMEDIES 25
14.1 Buyer's Remedies 25
14.2 Seller's Remedies 26
15. LOAN ASSUMPTION 27
15.1 Loan Assumption Contingency 27
15.2 Defined Terms 27
16. MARKETING 27
17. BROKERAGE COMMISSIONS 27
18. NOTICE 28
19. MISCELLANEOUS 29
19.1 Survival 29
19.2 No Assumption by Buyer or Buyers 29
19.3 Parties in Interest 29
19.4 Section Headings 29
19.5 No Oral Modifications 29
19.6 Full Integration 29
19.7 Binding Effect 30
19.8 Seller's Advice of Counsel 30
19.9 Attorneys' Fees 30
19.10 Governing Law 30
19.11 Confidentiality 30
19.12 Captions 31
19.13 Severability 31
19.14 Time of the Essence 31
19.15 Non-Waiver 31
19.16 Assignment 31
19.17 Facsimile 31
19.18 Further Assurances 31
19.19 Counterparts 31
19.20 WAIVER OF JURY TRIAL 31
19.21 Arbitration 32
20. AS-IS 32
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS ("Agreement") dated as of the 1st day of August,
1997 is by and between Moshe Silagi and Andrea Silagi, Co-
Trustees of the Silagi Family Trust (the "Trust"), Conejo
Business Park, LLC, a California limited liability company
("Conejo LLC"), Marin Corporate Center LLC, a California limited
liability company ("Marin LLC"), and Evergreen Plaza LLC, a
California limited partnership ("Evergreen LLC") (collectively,
"Seller"), and Arden Realty Limited Partnership, a Maryland
limited partnership ("Buyer"). Capitalized terms used in the
Recitals below, not otherwise defined therein, shall have the
meanings ascribed to them in Section 1 of this Agreement.
R E C I T A L S
WHEREAS, this Agreement is made and entered into with
reference to the following facts:
WHEREAS, Seller is the owner of the Property (defined
below).
WHEREAS, Buyer desires to purchase, and Seller desires
to sell, the Property on the terms and conditions set forth in
this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer
and Seller agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
1.1 "Appurtenances" means all Seller's interest
in all rights, privileges and easements appurtenant to the Land,
including, without limitation, all minerals, oil, gas and other
hydrocarbon substances in, on and under the Land, as well as all
development rights, air rights, water, water rights and water
stock relating to the Land and any other easements appurtenant to
the Land.
1.2 "Assignments of Intangible Property" means
the Assignments of Intangible Property and Service Contracts, to
be duly executed and delivered by Seller in accordance with
Section 4.1 of this Agreement, assigning to Buyer all of Seller's
right, title and interest in and to the Intangible Property and
Service Contracts. The Assignments of Intangible Property shall
each be in the form of, and upon the terms contained in,
Exhibit "B".
1.3 "Assignments of Leases" means the Assignments
of Leases, to be duly executed and delivered by Seller in
accordance with Section 4.1 of this Agreement, assigning to Buyer
all of Seller's right, title and interest in and to the Leases.
The Assignments of Leases shall each be in the form of, and upon
the terms contained in, Exhibit "C".
1.4 "Bills of Sale" means the Bills of Sale, to
be duly executed and delivered by Seller in accordance with
Section 4.1 of this Agreement, conveying to Buyer all of the
Personal Property. The Bills of Sale shall each be in the form
of, and upon the terms contained in, Exhibit "D".
1.5 "Closing" means the consummation of the
conveyances of the Property, the Leases and the other
transactions contemplated under this Agreement, all of which
shall occur on or before the Closing Date.
1.6 "Closing Date" means the later of (i) the
first business day which is three (3) days following the end of
the Due Diligence Period, or (ii) the first business day which is
two (2) days following the date the condition set forth in
Section 15 is fully satisfied, unless otherwise mutually agreed
to in writing by Buyer and Seller or extended pursuant to the
terms of this Agreement.
1.7 "Code" means the United States Internal
Revenue Code of 1986, as amended.
1.8 "Deeds" means the Grant Deeds, to be duly
executed, acknowledged and delivered in recordable form by Seller
in accordance with Section 4.1 of this Agreement, conveying to
Buyer good and marketable fee simple title to the Real Property.
The Deeds shall each be in the form of, and upon the terms
contained in, Exhibit "E".
1.9 "Deposit" means the sum of Two Hundred
Thousand Dollars ($200,000.00) to be delivered within one (1)
business day after the mutual execution of this Agreement by
Buyer and Seller and delivery of the same to Escrow Holder in
accordance with Section 3.1 of this Agreement.
1.10 "Due Diligence Period" means the period
commencing on the date this Agreement is executed and delivered
by both Buyer and Seller and ending at 6:00 p.m. (California
time) on the first business day which is thirty (30) days after
the date that this Agreement has been mutually executed and
delivered by both parties.
1.11 "Escrow Holder" means Chicago Title Insurance
Company, 700 S. Flower St., Suite 920, Los Angeles, California,
Attention: Mr. Frank Jansen.
1.12 "Fixtures" means all fixtures placed on,
attached to, or located at and used in connection with the
operation of, the Land.
1.13 "Governmental Regulations" means any local,
state, and federal laws, ordinances, rules, requirements,
resolutions, policy statements and regulations (including, with
out limitation, those relating to land use, subdivision, zoning,
environmental, labor relations, notification of sale to employer,
Hazardous Materials, occupational health and safety, water,
earthquake hazard reduction and building and fire codes) bearing
on the construction, development, alteration, rehabilitation,
maintenance, use, operation, or sale of the Property.
1.14 "Hazardous Materials" means any hazardous or
toxic substance, material or waste which is or becomes regulated
by any local governmental authority, any agency of the State of
California or any agency of the United States Government. The
term "Hazardous Materials" includes, without limitation, any
material or substance which (a) contains petroleum or any
petroleum by-products, (b) contains asbestos, (c) contains urea
formaldehyde foam insulation, (d) is designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. ' 1317), (e) is defined as a "hazardous
waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. ' 6901 (42 U.S.C.
' 6903), or (f) is defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. ' 9601 (42 U.S.C.
' 9601). Each reference to a statute or law in this definition
shall be deemed to include any amendments thereto which are
enacted from time to time.
1.15 "Intangible Property" means all of Seller's
right, title and interest in and to any and all intangible
personal property now and through the Closing Date owned by
Seller and/or used in connection with the ownership,
construction, development, use and/or operation of the Real
Property and/or Personal Property, including, without limitation,
the Service Contracts (to the extent approved in writing by
Buyer), the Licenses and Permits, the Intellectual Property and
the Records and Plans and the Warranties.
1.16 "Intellectual Property" means any and all
intellectual property owned by Seller or licensed to Seller and
used in connection with the ownership, use and/or operation of
the Real Property and/or Personal Property, including, without
limitation, trade names, logos, derivations, slogans and other
marks owned or used by or licensed to Seller and associated with
the Real Property and/or Personal Property.
1.17 "Land" collectively means the real property
located at (i) 1655 E. Thousand Oaks Boulevard, Thousand Oaks,
California (commonly known as Thousand Oaks Tanning Plaza), (ii)
60 and 100 Rancho Road, Thousand Oaks, California (commonly known
as Rancho Plaza); (iii) 516 N. Pennsfield Place, Thousand Oaks,
California (commonly known as Pennsfield Plaza); (iv) 101, 123
and 145 Hodencamp Boulevard, Thousand Oaks, California (commonly
known as Conejo Business Park); (v) 501 and 509 Marin Street,
Thousand Oaks, California (commonly known as Marin Corporate
Center); and (vi) 3653-3723 E. Thousand Oaks Boulevard, Thousand
Oaks, California (commonly known as Evergreen Plaza), as each
component of the Land is respectively described in Exhibits "A-
1," "A-2," "A-3," "A-4," "A-5" and "A-6."
1.18 "Leases" means all existing leases, rental
and occupancy agreements and lease commitments relating to the
Real Property, including those Leases which are listed on
Exhibits "F-1," "F-2," "F-3," "F-4," "F-5" and "F-6,"
respectively, together with any and all leases which are entered
into after the date of this Agreement in accordance with
Section 6.2 of this Agreement.
1.19 "Licenses and Permits" means all of Seller's
right, title, interests, privileges, benefits and remedies in, to
and under all authorizations, approvals, permits, certificates of
occupancy, licenses, agreements, variances, tentative maps, final
maps, plans and specifications and land use entitlements held by
Seller and/or relating to the construction, reconstruction,
occupancy, operation or use of any part of the Real Property or
Personal Property.
1.20 "Notices To Tenants" means notices from
Seller to all tenants who are parties to any of the Leases
whereby such tenants are notified that the Property has been
transferred by Seller to Buyer and instructing them to pay any
and all rents and other sums payable under the Leases from and
after the Closing directly to Buyer or as otherwise directed by
Buyer, in the form of Exhibit "G".
1.21 "Personal Property" means all personal
property of Seller located on or in or used in connection with
the Real Property, including those items set forth on Exhibits "H-
1," "H-2," "H-3," "H-4," "H-5" and "H-6," respectively.
1.22 "Property" or "Properties" collectively means
the Real Property, the Personal Property and the Intangible
Property.
1.23 "Purchase Price" means the sum of Thirty-Five
Million Five Hundred Fifty-Six Thousand Three Hundred Eighty
Seven Dollars ($35,556,387), subject to the terms of Section 3.3
below.
1.24 "Real Property" means the Land, the
improvements situated on the Land, the Fixtures and the Appurten
ances.
1.25 "Records and Plans" means (a) all books and
records maintained in connection with the ownership, development,
construction, maintenance or operation of the Property, (b) all
preliminary, final and "as-built" plans and specifications
respecting the Real Property, and (c) all structural reviews,
architectural drawings, topographical maps and engineering, soil,
seismic, environmental, asbestos, geologic and architectural
reports, studies and certificates and other documents pertaining
to the Real Property (including those which include comments by
any building or safety engineer, inspector or other person who
regularly makes such inspections) which are within the possession
of, under the control of, or reasonably available to, Seller.
1.26 "Service Contracts" means the maintenance
contracts, equipment leases, warranties, guarantees, management
contracts and bonds, and any other similar obligations,
commitments or arrangements, together with all supplements,
amendments and modifications thereto, relating to the
construction, development, marketing, operation, maintenance or
enjoyment of the Property, which are set forth on Exhibits "I-1",
"I-2," "I-3," "I-4", "I-5", and "I-6" respectively, attached to
this Agreement.
1.27 "Tenant Estoppels" means written statements
in the form of, and upon the terms contained in, Exhibit "J", in
favor of Buyer from each of the tenants who are parties to any of
the Leases, dated not earlier than fifteen (15) days prior to the
Closing Date.
1.28 "Title Company" means Chicago Title Company.
1.29 "Title Policy" means an ALTA owner's title
policy (Form B-1970) issued by the Title Company for the benefit
of Buyer, which Title Policy shall have a liability limit in the
amount of the Purchase Price, shall include those endorsements
requested by Buyer and shall show only those matters which
constitute Permitted Exceptions (defined below).
1.30 "Transferor's Certificate" means the
certificate, to be duly executed by Seller under penalty of
perjury and delivered by Seller in accordance with Section 4.1 of
this Agreement, certifying that Seller is not a "foreign person"
in accordance with the provisions of Section 1445 of the Code and
any similar provisions of applicable state law. The Transferor's
Certificate shall be in the form of, and upon the terms contained
in, Exhibit "K".
1.31 "Warranties" means all third party warranties
and guarantees relating to the Property, including any
instruction books (e.g., for vertical transportation, HVAC and
other building systems).
1.32 "Thousand Oaks Tanning Plaza" means the
Real Property, Personal Property and Intangible Property related
solely to the real property located at 1655 E. Thousand Oaks
Blvd., Thousand Oaks, California.
1.33 "Rancho Plaza" means the Real Property,
Personal Property and Intangible Property related solely to the
real property located at 60 and 100 Rancho Road, Thousand Oaks,
California.
1.34 "Pennsfield Plaza" means the Real
Property, Personal Property and Intangible Property related
solely to the real property located at 516 N. Pennsfield Place,
Thousand Oaks, California.
1.35 "Conejo Business Park" means the Real
Property, Personal Property and Intangible Property related
solely to the real property located at 101, 123 and 145 Hodencamp
Boulevard, Thousand Oaks, California.
1.36 "Marin Corporate Center" means the Real
Property, Personal Property and Intangible Property related
solely to the real property located at 501 and 509 Main Street,
Thousand Oaks, California.
1.37 "Evergreen Plaza" means the Real
Property, Personal Property and Intangible Property related
solely to the real property located at 3653-3723 E. Thousand Oaks
Boulevard, Thousand Oaks, California.
2. ESCROW. The purchase and sale of the Property
shall be consummated through an escrow at Escrow Holder. As soon
as reasonably practicable following the mutual execution of this
Agreement, but in no event later than three (3) days after the
date of this Agreement, the parties shall deliver to Escrow
Holder a fully executed counterpart of this Agreement, which
shall constitute its escrow instructions. The parties shall
execute such additional escrow instructions, not inconsistent
with this Agreement, as Escrow Holder shall deem reasonably
necessary for its protection. In the event of any conflict
between this Agreement and any additional escrow instructions,
the terms of this Agreement shall govern.
3. AGREEMENT TO SELL; PURCHASE PRICE. Seller agrees
to sell to Buyer, and Buyer agrees to purchase from Seller, the
Property in accordance with the terms, and subject to the
conditions, of this Agreement. The Purchase Price for the
Property will be paid as follows:
3.1 Deposit. Within one (1) business day after
the execution of this Agreement by Buyer and Seller and delivery
of the same to Escrow Holder, Buyer will deliver the Deposit to
Escrow Holder to hold in trust. Escrow Holder will invest the
Deposit in an interest bearing account with a responsible
federally-insured institutional lender approved by Buyer, and
interest will be for the account of Buyer except as otherwise
provided in this Agreement and will be credited against the
Purchase Price at Closing.
3.2 Balance of Purchase Price. The entire
balance of the Purchase Price less, if Buyer assumes the Existing
Loans (defined in Section 15 below), the outstanding principal
balance plus any accrued interest and other amounts due and owing
under the Existing Loans as of the Closing Date (after also
taking into account the adjustments described in Sections 10 and
11), shall be paid to Seller, through Escrow Holder, at Closing.
3.3 Allocation of Purchase Price. The Purchase
Price is allocated between the Properties as follows:
(a) Thousand Oaks Tanning Plaza: $1,926,055
(b) Rancho Plaza: $3,000,000
(c) Pennsfield Plaza: $3,114,355
(d) Conejo Business Park: $9,289,677
(e) Marin Corporate Center: $7,156,300
(f) Evergreen Plaza: $11,070,000
3.4 Loan Assumption Credit. If Buyer assumes
the Existing Loans, the Purchase Price shall be reduced by an
amount equal to $656,382 to reflect Buyer's obligation to pay any
loan assumption fees and comply with the terms of the Existing
Loans after the Closing Date. The aforementioned loan
assumption credit shall be allocated between the following
properties in accordance with the following breakdown:
Conejo Business Park - $384,771.13 (58.62%); and
Marin Corporate Center - $271,610.87 (41.38%).
4. DELIVERIES AT CLOSING; CLOSING PROCEDURES. The
Closing will take place on the Closing Date. Buyer may elect to
close escrow on an earlier date by giving written notice to
Seller and Escrow Holder of its intent to close escrow earlier at
least five (5) days in advance of such earlier date, but such
notice shall not be binding upon Buyer, and if Buyer is not in a
position to close on the earlier date, Buyer shall have until the
Closing Date to close.
4.1 By Seller. At least two (2) business days
prior to the Closing, Seller shall deliver or cause to be
delivered to Escrow Holder (unless otherwise indicated) the
following items, duly executed and, where appropriate,
acknowledged by Seller:
4.1.1 The Deeds.
4.1.2 The Bills of Sale.
4.1.3 The Assignments of Intangible Property.
4.1.4 The Assignments of Leases.
4.1.5 The Notices to Tenants.
4.1.6 The Transferor's Certificate.
4.1.7 The Tenant Estoppels (to be delivered
directly to Buyer).
4.1.8 Such resolutions, authorizations,
certificates of good standing and/or other corporate and
partnership documents relating to Seller as are reasonably
required by Buyer in connection with the transactions
contemplated under this Agreement.
4.1.9 All such further conveyances, assign
ments, confirmations, satisfactions, releases, instruments,
affidavits, approvals, consents and any and all such further
instruments and documents as may be reasonably necessary,
appropriate, expedient or proper in the reasonable opinion of
(i) Buyer in order to effectuate and complete any and all convey
ances, transfers, sales and assignments provided in this
Agreement, or (ii) Title Company in order to issue the Title
Policy.
4.2 By Buyer. At the Closing, Buyer will deliver
or cause to be delivered to Escrow Holder or the Seller the
following items, duly executed and, where appropriate,
acknowledged by Buyer:
4.2.1 The net balance of the Purchase Price,
to be paid in accordance with Sections 3.2 of this Agreement,
after deducting the Deposit plus any interest accrued thereon,
and after taking into account the adjustments and cost
allocations in accordance with Sections 10 and 11.
4.2.2 Counterparts of the Assignments
of Intangible Property and the Assignments of Leases.
4.2.3 Such corporate resolutions, certifi
cates of good standing and/or other corporate and partnership
documents relating to Buyer as are reasonably required by Seller
in connection with the transactions contemplated under this
Agreement.
4.3 By Buyer and Seller. Buyer and Seller will
each deposit such other instruments consistent with this Agree
ment as are reasonably required to effectuate the transactions
contemplated under this Agreement.
4.4 Closing Procedures. Provided that Escrow
Holder has received the documents and funds described in
Sections 4.1 and 4.2 above and has not received notice from any
party hereto either that an agreement of another party hereunder
has not been performed, that a condition set forth herein has not
been satisfied or waived or that this Agreement has terminated
(by its terms or by an election duly made hereunder), and further
provided that the issuance of, or an unconditional commitment to
issue, the Title Policy has been obtained, Escrow Holder is
authorized and instructed at 8:00 a.m. on the Closing Date to:
4.4.1 Record the Deeds with the County
Recorder of Los Angeles County, California.
4.4.2 Cause the Title Policy to be
issued by the Title Company.
4.4.3 Deliver to Buyer: the Assignments of
Leases, the Assignments of Intangible Property, the Bills of
Sale, the Transferor's Certificate, all documents and items
required to be delivered by Seller pursuant to Sections 4.1
and 8.1.4 or any other provision of this Agreement, not otherwise
previously delivered directly to Buyer, all other items deposited
by Seller with Escrow Holder pertaining to the Property, and any
funds deposited by Buyer in excess of the amount to be paid by
Buyer under the terms of this Agreement.
4.4.4 Deliver to Seller: the Purchase Price
after taking into account the adjustments and cost allocations in
accordance with Sections 10 and 11, and the Assignments of Leases
and Assignments of Intangible Property executed in counterpart by
Buyer, and any other document deposited by Buyer with Escrow
Holder for delivery to Seller at the Closing.
4.4.5 Mail the Notices to Tenants to each of
the tenants under the Leases by certified mail, return receipt
requested.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Seller's Representations and Warranties.
Seller makes the following representations and warranties to
Buyer, upon which warranties and representations Buyer has relied
and will continue to rely, all of which are true as of the date
of this Agreement and will be true and correct as of the Closing:
5.1.1 Organization. Each of the constituent
entities comprising Seller is duly organized, validly existing
and in good standing under the laws of the State of California
and is duly qualified to do business in the State of California.
The execution and delivery of this Agreement and the other
documents contemplated this Agreement by Seller, and the
performance by Seller of the obligations under this Agreement and
the other documents contemplated in this Agreement (i) are within
the power of Seller; (ii) have been duly authorized by all
requisite corporate action; and (iii) will not violate any
provision of law, any order of any court or agency of government,
the charter documents of Seller, or any indenture, agreement or
any other instrument to which Seller is a party. This Agreement
and each of the other documents described in this Agreement when
executed and delivered to Buyer, will constitute legal, valid and
binding obligations enforceable against Seller in accordance with
the terms of such documents.
5.1.2 Non-foreign Person. Seller is not a
"foreign person" as that term is defined in Section 1445(f) of
the Code and the applicable provisions of the applicable state,
if any, and the regulations issued thereunder, as amended, or any
successor thereto.
5.1.3 Personal Property Owner. Seller is the
sole owner of all personal property situated on the Real Property
(other than personal property owned by tenants under the Leases)
free of any adverse claim of any kind whatsoever, except for the
liens or security interests expressly approved by Buyer in its
sole discretion.
5.1.4 No Prior Transfers - Property. Seller
has not transferred, by sale, assignment or otherwise, to any
person, partnership, corporation or other entity, all or any
portion of any right, title or interest which it may have in and
to the Property or the Leases.
5.1.5 Agreements.
5.1.5.1 There are no contracts for
deed, land contracts or any oral or written agreements or other
executory agreements whatsoever for the assignment or transfer of
any portion(s) of the Property in effect or in existence with
respect to the Property, except those previously disclosed to
Buyer.
5.1.5.2 There are no oral or written
agreements or executory agreements whatsoever for the use and
occupancy of the Real Property other than the Leases and there
are no tenants or occupants of the Real Property except pursuant
to the Leases.
5.1.5.3 There are no management,
service, maintenance, advance booking, employment or brokerage
agreements, obligations, commitments or arrangements, written or
oral, with respect to the Real Property, except for the Service
Contracts.
5.1.6 No Litigation. There (a) is no actual
or, to the best of Seller's knowledge, threatened suit, action or
legal, administrative, arbitration or other proceeding or
governmental investigation involving or affecting the Property or
the Leases, and (b) are no judgments, decrees, or orders against
Seller, except as previously disclosed to Buyer.
5.1.7 Notice of Violations. To the best of
Seller's knowledge, Seller has (a) not received notice of any
outstanding violations, past or present, of any Governmental
Regulations, and (b) no knowledge of any condition which con
stitutes such a violation.
5.1.8 Hazardous Materials. To the best of
Seller's actual knowledge, neither Seller nor any third
parties have disposed of, generated, handled, manufactured,
stored, used, transported or discharged of any Hazardous
Materials in or about the Real Property nor are there (a) any
violations under or actions taken with respect to violations
under any Governmental Regulations, or (b) any underground
storage tanks located on or under the Land.
5.1.9 Use Permits and Other Approvals. To
the best of Seller's knowledge, the Licenses and Permits and
easements and rights of way, including proof of dedication, are
all in full force and effect.
5.1.10 Compliance with Agreements.
To the best of Seller's knowledge, no default exists under any
covenant, restriction or agreement related to or affecting the
Property or the Leases, except as previously disclosed to Buyer.
5.1.11 Financial Position. The
financial statements and all financial data heretofore delivered
to Buyer relating to Seller or the Property, including, without
limitation, the Rent Roll (defined in Section 9.1.2.3 below) and
all operating statements, are true, correct and complete in all
material respects as of the date thereof. No material adverse
change has occurred in such financial position subsequent to the
date such statements are delivered to Buyer.
5.1.12 Agreements. The Licenses and
Permits, Records and Plans, Service Contracts, Warranties, and
all other (i) books and records relating to or affecting the
Property, and (ii) contracts or documents delivered to Buyer
pursuant to this Agreement or in connection with the execution
hereof, are true, correct and complete. The Records and Plans
and Licenses and Permits have been fully paid for and are not
subject to any liens, encumbrances or claims of any kind.
5.1.13 Insolvency. There are no
attachments, execution proceedings, assignments for the benefit
of creditors, insolvency, bankruptcy, reorganization or other
proceedings pending or threatened against Seller, nor are any
such proceedings contemplated by Seller.
5.1.14 Governmental Actions. To the
best of Seller's knowledge, there are no plans, studies or
efforts by any governmental authorities or agencies or by any
other persons or entities that in any way could affect the use of
the Property or any portion thereof.
5.1.15 Brokers. Except as set forth
on Exhibit "L" attached hereto, there are no brokers' commissions
or finder's fees currently due and payable in connection with the
Leases, any extension of the Leases, or any expansion of any
existing premises being leased pursuant to the Leases.
5.1.16 Leases. Except as otherwise
set forth on Exhibit "M" attached hereto, (i) there are no
uncured monetary defaults (with or without the giving of notice
or the passage of time) and, to the best of Seller's knowledge,
no uncured non-monetary defaults (with or without the giving of
notice or the passage of time), or outstanding notices of default
or termination under the Leases; (ii) Seller, as landlord, has
received no written notice from any tenant that Seller is in
default or not complying with Seller's obligations, as landlord,
under any Lease; (iii) there are no rights of first refusal or
other rights granted to tenants respecting the purchase of the
Property; and (iv) there is no free rent or other economic
concessions granted to tenants under the Leases.
5.1.17 Exhibits; Schedules. All
exhibits and schedules to this Agreement are true, correct and
complete as of the date of this Agreement and shall be true,
correct and complete as of the Closing Date.
5.1.18 Continuing Representation. No
representation, warranty or statement of Seller in this Agreement
or in any document, certificate, schedule or other matter
furnished or to be furnished to Buyer pursuant thereto or in
connection with the transactions contemplated in this Agreement
contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make
the statements or facts contained therein not misleading.
Notwithstanding anything to the contrary contained
herein, as to each Property, the foregoing representations and
warranties shall be deemed to be respectively given by that
entity comprising Seller which owns the respective Property. By
way of example only and not by way of limitation, the
representation in Section 5.1.8 shall be deemed to be separately
given by (i) Conejo LLC with respect to Conejo Business Park,
(ii) Marin LLC with respect to Marin Corporate Center, (iii)
Evergreen LLC with respect to Evergreen Plaza, and (iv) the Trust
with respect to each of Thousand Oaks Tanning Plaza, Rancho Plaza
and Pennsfield Plaza. Furthermore, all references to "Seller's
knowledge" shall mean and refer to the actual knowledge of Moshe
Silagi, who is actively involved in the operation and management
of the Properties. Seller acknowledges that Mr. Silagi is the
Seller representative most likely to have specific knowledge of
the matters which are the subject of the representations
contained in this Section 5.1.
5.2 Buyer's Representations and Warranties.
Buyer makes the following representations and warranties to
Seller upon which warranties and representations Seller has
relied and will continue to rely, all of which are true as of the
date of this Agreement and will be true and correct as of the
Closing:
5.2.1 Organization. Buyer is duly organized,
validly existing and in good standing under the laws of the State
of Maryland and is duly qualified to do business in the State of
California. The execution and delivery of this Agreement and the
other documents contemplated this Agreement by Buyer, and the
performance by Buyer of the obligations under this Agreement and
the other documents contemplated in this Agreement (i) are within
the power of Buyer; (ii) have been duly authorized by all
requisite partnership action and corporate action on the part of
all of its constituent corporate partners; and (iii) will not
violate any provision of law, any order of any court or agency of
government, the charter documents of Buyer or its general
partners, or any indenture, agreement or any other instrument to
which Buyer is a party. This Agreement and each of the other
documents described in this Agreement when executed and delivered
to Buyer, will constitute legal, valid and binding obligations
enforceable against Buyer in accordance with the terms of such
documents.
6. SELLER'S OBLIGATIONS. Seller hereby covenants to
Buyer, upon which covenants Buyer has relied and will continue to
rely, that for the period from the date of this Agreement through
and including the Closing Date:
6.1 Further Liens and Encumbrances. Seller will
not subject the Property to any additional liens, encumbrances,
covenants, conditions, easements, rights of way or similar
matters after the date of this Agreement. Seller will not
hereafter modify, extend, renew, replace or otherwise change any
of the terms, covenants or conditions of any of such documents,
or enter into any new agreements affecting the Property without
the prior written consent of Buyer, which consent may be withheld
in Buyer's sole and absolute discretion.
6.2 Leases; Other Contracts; Interim Activities.
Seller will not hereafter terminate, modify, extend, renew,
replace or otherwise change any of the Leases or existing
contracts or enter into new leases or contracts affecting the
Property except with the prior written consent of Buyer, which
consent (a) will not be unreasonably withheld (with respect to
any such action prior to the expiration of the Due Diligence
Period), and (b) may be withheld in Buyer's sole and absolute
discretion (with respect to any such action after the expiration
of the Due Diligence Period). From and after the expiration of
the Due Diligence Period, Seller shall not apply for or otherwise
deal with any governmental authority regarding the development,
entitlement or subdivision of the Real Property without the prior
written consent of Buyer, which may be withheld in Buyer's sole
and absolute discretion. With respect to any proposed action
hereunder by Seller prior to the expiration of the Due Diligence
Period, Buyer's consent shall be deemed given if Buyer fails to
either approve or disapprove any proposed action by Seller prior
to 6:00 p.m. California time on the day which is one (1) business
day following the day Buyer receives a written request for
approval from Seller.
6.3 Property Management and Operation. Seller
shall maintain the operation of the Property in a good and
business-like manner. Seller shall provide all services and
operate, manage and maintain the Property (including mechanical
equipment of every kind used in the operation thereof) in such a
manner that the Property shall be in the same condition on the
Closing Date as on the date of this Agreement, ordinary wear and
tear excepted. Without limiting the foregoing, Seller shall
perform all of its obligations under the Leases and the Service
Contracts.
6.4 Compliance with Laws. Seller shall comply
with all Governmental Regulations.
6.5 Actions Pending. Seller shall notify Buyer
promptly of any lawsuits, condemnation proceedings, rezoning, or
other governmental order or action or any threat thereof known to
Seller which might affect the Property or any interest of Buyer
whatsoever.
6.6 Insurance Policies. Seller shall
(a) maintain in full force and effect all existing insurance
policies through and including the Closing Date and (b) use its
best efforts to arrange for Buyer to be named as an additional
insured or contract vendee, as applicable, on such policies from
and after the date this Agreement is executed and delivered by
Buyer and Seller.
6.7 Leasing Commissions. Prior to or on the
Closing Date, Seller shall, at its sole cost and expense, pay in
full all outstanding brokerage and leasing commissions, finders
fees or like sums pertaining to any and all Leases (other than
any new leases or lease amendments that Buyer has approved in
accordance with the terms of this Agreement).
6.8 Cooperation with Representatives. Seller
shall cooperate with Buyer and its accountants, counsel and/or
other representatives in providing information and materials
pertaining to the operation and marketing of the Property,
including access to the Property. Without limiting the
generality of the foregoing, from and after the execution and
delivery of this Agreement, Seller shall allow a representative
or representatives of Buyer access to the Property for the
purpose of (a) monitoring the operation of the Property,
(b) meeting with and interviewing tenants of the Property, which
tenants shall be made available for such interviewing process,
and (c) performing such investigations and analyses of the
Property as Buyer may reasonably require.
6.9 No Removal of Personal Property. Seller will
not remove any of the Personal Property unless the Personal
Property so removed is simultaneously replaced with substantially
similar Personal Property of similar quality or utilities.
6.10 Obtaining Estoppels and Consents. Seller
shall use its best efforts to obtain all written consents from
third parties required or reasonably requested by Buyer or its
accountants, counsel or other representatives in connection with
this Agreement, including, without limitation, the Tenant
Estoppels.
6.11 Service Contracts. Seller shall deliver
notices of termination to any vendors under the Service Contracts
which have been designated in writing by Buyer to be terminated
("Disapproved Service Contract List") provided that the
Disapproved Service Contract List is delivered by Buyer to Seller
on or before the expiration of the Due Diligence Period, and
provided further that any such termination shall be conditioned
upon and effective only as of the Closing. Seller shall, within
two (2) days following the later of the expiration of the Due
Diligence Period or Buyer's delivery of the Disapproved Service
Contract List, deliver termination notices to each of the vendors
with respect to the Service Contracts so designated by Buyer in
the Disapproved Service Contract List. Seller shall be solely
responsible for all costs and expenses associated with the
termination of any of the Service Contracts set forth by Buyer in
the Disapproved Service Contract List.
6.12 Post-Closing Financial Records. As
soon as reasonably practicable following the Closing Date, Seller
shall deliver to Buyer the following information with respect to
the Property: (a) a final income statement through the Closing
Date, (b) a final cumulative general ledger through the Closing
Date, and (c) a final aged delinquency listing, including all
security deposits received by Seller.
6.13 Audit Rights. At Buyer's request at
any time from and after the date hereof until the date that is
one (1) year after the Closing Date, Seller shall, at Buyer's
expense, provide to Buyer's designated independent auditor access
to the books and records of the Property, regarding the period
for which Buyer is required to have audited financial statements
prepared with respect to the Property as may be required by the
Securities and Exchange Commission, to the extent that such
books, records and related information are in Seller's possession
or control and relate to the period during which Seller held
title to the Property. Further, Seller agrees to provide to such
auditor a representation letter regarding the books and records
of the Property, in substantially the form of Exhibit "N"
attached hereto, in connection with the normal course of auditing
the Property in accordance with generally accepted auditing
standards.
6.14 Management and Listing Agreements.
Seller agrees to terminate, at Seller's sole cost and expense,
all property management agreements and brokerage leasing
agreements effective as of the Closing Date.
6.15 Change in Condition. Seller shall promptly
notify Buyer of any change in any material condition with respect
to the Property or any event or circumstance which makes any
representation or warranty of Seller under this Agreement
materially untrue or misleading, or any covenant of Buyer or
Seller under this Agreement incapable of being performed, it
being understood that Seller's obligation to provide notice to
Buyer shall in no way relieve Seller of any liability for a
breach by Seller of any of its representations, warranties or
covenants under this Agreement.
7. TITLE TO REAL PROPERTY. At Closing, title to the
Real Property will be conveyed to Buyer by Seller by the Deeds,
subject only to the following matters ("Permitted Exceptions"):
7.1 matters of title respecting the Real Property
approved or deemed approved by Buyer in accordance with this
Agreement; and
7.2 matters affecting the condition of title to
the Real Property created by or with the written consent of
Buyer.
8. CONDITIONS PRECEDENT/CONCURRENT TO CLOSING;
CLOSING DATE.
8.1 Buyer's Conditions. Buyer shall not be
required to close the transaction provided for under this
Agreement, unless and until Buyer deems that each and every one
of the following conditions has been fulfilled:
8.1.1 Representations, Warranties and
Covenants of Seller. Seller shall have duly and timely performed
each and every covenant to be performed by Seller under this
Agreement and the representations and warranties set forth in
this Agreement shall be true and correct as of the Closing in all
respects.
8.1.2 Seller's Deliveries. Seller shall have
duly and timely delivered to Buyer all of the items described in
Section 4.1 of this Agreement.
8.1.3 No Material Changes. At the Closing,
there will be no material adverse changes in the physical or
financial condition of the Property which were discovered by
Buyer after the Due Diligence Period.
8.1.4 Delivery of Pre-Closing Documents and
Agreements. Seller shall have delivered to Buyer on or before
the Closing Date the following:
8.1.4.1 Originals of all Leases and an
updated Rent Roll current as
of Closing;
8.1.4.2 Originals of all Records and
Plans;
8.1.4.3 Originals of all Licenses and
Permits;
8.1.4.4 Originals of all Service
Contracts;
8.1.4.5 Originals of all Warranties;
8.1.4.6 Final Certificates of
Occupancy respecting all
premises at the Property, to
the extent the same are in
Seller's possession or
control;
8.1.4.7 Copies of any and all other
written contracts, agreements
or documents and any other
matters affecting the
Property, and such other
documents and information as
Buyer may reasonably request;
and
8.1.4.8 Estoppel certificates or
consents in form and substance
as Buyer may require in its
sole and absolute discretion
relating to any Service
Contracts which are to remain
in effect after the Closing
Date.
8.1.4.9 All current real estate and
personal property tax bills
for the Property.
8.1.4.10Keys to all doors on any
structures and improvements
situated on the Land, and keys
to all Personal Property
located on the Real Property,
which keys shall be properly
tagged for identification.
8.1.5 Title Insurance. The Title Company
will have issued or have unconditionally and irrevocably
committed to issue the Title Policy to Buyer.
8.1.6 Due Diligence Approval. Buyer shall
have approved (or be deemed to have approved) all matters to be
reviewed in accordance with Section 9 of this Agreement.
8.1.7 Miscellaneous Information and
Documentation. Seller shall have delivered to Buyer all of the
information and documentation required by this Agreement and
Seller shall have satisfied and complied with all of its
covenants and agreements contained herein.
8.1.8 Exhibits and Schedules. On the Closing
Date, Seller shall have updated each of the Exhibits and
Schedules attached hereto, so that, the same are true and
accurate as of the Closing Date, and Buyer, as applicable, shall
have approved any changes therein at its sole and absolute
discretion.
8.1.9 Estoppel Certificates. Seller
shall have delivered to Buyer Tenant Estoppels executed by
tenants occupying (i) at least 85% of the total square feet of
leased space of the Property and (ii) rentable square footage in
excess of 3,500 square feet. Seller shall make a reasonable good
faith attempt to obtain such Tenant Estoppels from every tenant
of the Property.
8.1.10 Loan Assumption. The Existing
Lender (as defined in Section 15 below) shall have approved of
the assumption of the Existing Loans by Buyer or Buyer's assignee
hereunder, and the terms of and the documents effectuating such
assignment, assumption and consent shall be acceptable, in form
and substance, to Buyer, in its sole discretion, all in
accordance with the terms of Section 15.
9. DUE DILIGENCE PERIOD:
9.1 Matters To Be Reviewed. Buyer's obligation
to close the purchase of the Properties and to pay the Purchase
Price shall be subject to and conditioned upon Buyer's complete
satisfaction with all of the following items, each of which Buyer
shall have the right to review and approve or disapprove in
Buyer's sole and absolute discretion during the Due Diligence
Period:
9.1.1 Title. Buyer will have until 6:00 p.m.
(California time) on the expiration of the Due Diligence Period
to examine and approve all matters of title and to notify Seller
in writing of any defects in title, as determined by Seller in
its sole and absolute discretion. Seller shall, at its sole cost
and expense, within three (3) days following the date this
Agreement is executed and delivered by Buyer and Seller, deliver
to Buyer (i) a current preliminary title report issued by the
Title Company and relating to the Real Property, together with
all underlying documents relating thereto, and (ii) evidence that
the Property complies with the Subdivision Map Act of California.
If Buyer fails to notify Seller in writing of any objections to
title prior to the expiration of the Due Diligence Period, title
to the Property shall be conclusively deemed to be approved by
Buyer. If Buyer timely notifies Seller in writing of specific
objections to title prior to the expiration of the Due Diligence
Period, Seller will have three (3) business days after receipt of
Buyer's notification of any objection in which to advise Buyer
that:
9.1.1.1 Seller will remove any
objectionable exceptions on or before the Closing Date; or
9.1.1.2 Seller will not cause the
exceptions to be removed.
If Seller advises Buyer that it will not
cause the exceptions to be removed, Buyer will have five (5) days
from its receipt of Seller's notice to elect to:
(i) proceed with the purchase and
acquire the Property subject to such exceptions, but conditioned
upon Seller fulfilling each and every one of its other
obligations hereunder and all of the other conditions precedent
in favor of Buyer having been duly and timely satisfied; or
(ii) terminate this Agreement by
written notice to Seller, in which case all rights and
obligations of the parties existing hereunder shall terminate and
be of no further force or effect, except any rights and
obligations which are expressly stated to survive the termination
of this Agreement. If this Agreement is terminated, the Deposit,
and any interest thereon, will be immediately returned to Buyer
without further instructions from Seller.
If Buyer does not give Seller written notice
of its election within said five (5) day period, Buyer will be
conclusively deemed to have approved title to the Property.
If Seller commits to remove any objection to
title and fails to do so by the Closing Date, Seller will be in
material default under this Agreement and Buyer may, at Buyer's
election, terminate this Agreement and pursue its remedies as set
forth in Section 14 of this Agreement.
9.1.2 Inspections and Studies. Buyer will
have until 6:00 p.m. (California time) on the expiration of the
Due Diligence Period to conduct (as applicable) and review and
approve any and all inspections, investigations, tests, studies
(including feasibility studies and other economic models) and
appraisals as Buyer may have elected to make or obtain with
respect to the Property and/or the operation and financial
condition of the Property, including, without limitation,
calculations of floor areas, financial analyses of the books and
records, environmental inspections and studies, structural and
mechanical investigations, appraisals, and analyses of the
Property's compliance with Governmental Regulations. Buyer and
Buyer's representatives, agents and designees will have the right
to enter the Property at all reasonable times, upon reasonable
oral notice to Seller to perform all such investigations of the
Property and to conduct interviews with (i) tenants of the
Property, (ii) property management personnel of Seller, and (iii)
such other parties as Buyer may deem appropriate in its sole
discretion (provided that no such interview shall occur unless
Buyer has notified Seller of its interest in conducting any such
interview and provided Seller or a Seller representative with an
opportunity to be present for any such interview). Seller will
cooperate with Buyer and its representatives in that regard.
Seller shall deliver to Buyer at Seller's sole cost and expense,
within five (5) days (unless indicated otherwise below) following
the date this Agreement is executed and delivered by Buyer and
Seller, all information in Seller's possession or control which
is reasonably related to the Property, plus the following items:
9.1.2.1 To the extent in Seller's
possession, an ALTA "as-built" survey of the Real Property
prepared by a licensed surveyor;
9.1.2.2 Any and all Leases and all
modifications or amendments and guaranties relating thereto; all
tenant correspondence and all current financial statements of
tenants to the extent the same are in Seller's possession or
control; the Existing Loan and all documents evidencing, relating
to and/or securing the Existing Loan; all contracts (including
the Service Contracts), agreements and management agreements
(including, without limitation, parking, elevator, HVAC and
landscaping maintenance contracts); all "operating statements"
for the years during which Seller owned the respective
Property(ies); a balance sheet dated no earlier than December 31,
1996; an income statement for the last two (2) calendar years and
a year-to-date income statement for the calendar year 1997, each
such statement to be certified by Seller as being true, correct
and complete reports prepared by Seller in the ordinary course of
business; all "Base Year" information applicable to the Leases; a
cumulative general ledger for year-to-date 1997, reports
(including, to the extent in Seller's possession, all
environmental reports, soils reports, surveys and plans and
specifications affecting or relating to the Property, and all
modifications or amendments thereto); to the extent in Seller's
possession, all Records and Plans, Warranties, Licenses and
Permits and governmental approvals obtained or held by Seller and
relating to the development, construction, operation, use or
occupancy of any of the Property.
9.1.2.3 A current rent roll (to be
updated as of the expiration of the Due Diligence Period and as
of the Closing), prepared and certified by Seller as being true,
correct and complete on a form reasonably acceptable to Buyer
(the "Rent Roll").
9.1.2.4 Reports of insurance carriers
insuring the Property during the period of Seller's ownership of
the Property and each portion thereof respecting the claims
history of the Property; insurance policies or certificates of
Seller and tenants respecting the Property; to the extent in
Seller's possession, all correspondence, reports, and notices
pertaining to the existence of toxic or Hazardous Materials
and/or waste at the Property; all permits, reports, certificates
and notices pertaining to the existence, removal and/or
decommission of any and all storage tanks located on, at or
underneath the Property; to the extent in Seller's possession,
all certificates of occupancy; to the extent in Seller's
possession, all maps; to the extent in Seller's possession, all
brokerage and commission agreements; all agreements entered by
Seller and Seller's affiliates affecting the Property and/or
income and cash flow to be received from the Property that will
survive the Closing; tax bills and assessments for the current
year and the two (2) year period immediately preceding the
current year; copies of the most recently available utility bills
and similar records respecting the Property; any and all
information in Seller's possession respecting the
creditworthiness of the tenants under the Leases at the Property;
to the extent in Seller's possession, all written reports
respecting incidents of theft, burglary or crimes attempted or
committed at, on or to the Property or other such incidents which
are the subject of litigation; and such other information
reasonably requested by Buyer of Seller in writing during the Due
Diligence Period.
9.1.3 Indemnity. Buyer agrees to indemnify
and hold Seller harmless from any and all injuries, losses,
liens, claims, judgments, obligations, liabilities, costs,
expenses or damages (including reasonable attorneys' fees and
court costs) sustained by Seller to the extent same results from
or arises out of any inspections by Buyer or any of its
representatives pursuant to Section 9.1.2 above.
9.2 Notice of Objections.
9.2.1 If Buyer fails to notify Seller in
writing of any objections to the items set forth in Section 9.1.2
on or before the expiration of the Due Diligence Period, Buyer
shall be conclusively deemed to have approved such items.
9.2.2 If Buyer notifies Seller in writing of
any objections to the condition of one or more of the Properties
or any other matters relating to one or more of the Properties
and/or operation or financial condition of one or more of the
Properties as set forth in Section 9.1.2 on or before the
expiration of the Due Diligence Period, the parties will have
five (5) business days to agree upon a resolution of the
objection(s). If the parties cannot agree within the five (5)
business day period, then Buyer may terminate this Agreement by
delivering written notice to Seller (which notice must be given
within three (3) business days after the expiration of the five
(5) business day period), in which event all rights and
obligations of the parties existing hereunder shall terminate and
be of no further force or effect, except any rights and
obligations which are expressly stated to survive the termination
of this Agreement. If this Agreement is terminated, the Deposit
and any interest accrued thereon will be returned to Buyer.
10. PRORATIONS. The following are to be prorated as
of the Closing Date, as follows:
10.1 Current Rent. Current rent under the Leases
shall be prorated as of the Closing Date, regardless of whether
such rent has been paid to Seller.
10.2 Percentage Rent. Percentage rent under the
Leases, if any, shall be prorated to Buyer and Seller on the
basis of the applicable tenant's gross sales for each month of
Buyer's and Seller's respective ownership of the Property.
10.3 Rent Arrears. With respect to any rent
arrears arising under the Leases, Buyer shall pay to Seller any
rent actually collected that is applicable to the period
preceding the Closing Date, less reasonable collection charges;
provided, however, that it is hereby understood and agreed that
all rent collected by Buyer shall be applied first to unpaid rent
accruing after the Closing Date, and then, only after all such
past due rent has been collected, to unpaid rent accruing prior
to the Closing Date.
10.4 Security Deposits. Security deposits paid by
tenants pursuant to the Leases, and any interest required to be
paid thereon, shall be fully credited to Buyer at Closing.
10.5 Other Tenant Charges. If, pursuant to the
Leases, the tenants are entitled to payments by the landlord
(other than a return of security deposits) in excess of the
amounts credited to Buyer at Closing for the Lease year in which
the Closing Date falls, Seller shall be responsible for a portion
of such payment as determined on the basis of a fraction, the
denominator of which shall be twelve (12) and the numerator of
which shall be the number of months (or part thereof) in such
Lease year prior to the Closing Date. Prorations for any partial
months shall be calculated on a daily basis. Buyer shall be
responsible for the remainder.
10.6 Utility Charges. Seller shall cause the
utility and water meters to be read on the Closing Date, and
shall be responsible for the cost of all utilities and water used
prior to that time, except to the extent such utility charges are
billed to and paid by tenants directly.
10.7 Other Prorations. Liability for all real
property taxes, common area maintenance, Property operation
expenses, and other recurring costs shall be prorated as of the
Closing Date; provided, however, Buyer shall not be responsible
for any costs or expenses pertaining to Service Contracts or
other items of expense which Buyer has not approved in writing.
Seller shall remain liable for any supplemental taxes
attributable to any period prior to the Closing. If any such
supplemental taxes shall be billed to Buyer or levied against the
Property after the Closing, then Seller agrees to pay its
prorated share thereof to Buyer within thirty (30) days of demand
therefor by Buyer. Any such sums not paid when due may be
advanced by Buyer, and such amounts shall bear interest from the
date of advance by Buyer until paid by Seller at the maximum
contract rate permitted by law.
10.8 Free Rent. Buyer shall be credited
with the amount of any unexpired free rent, rental credit or
other economic concession in favor of any of the tenants under
any of the Leases as of the Closing Date.
10.9 Preliminary Closing Adjustment. Seller and
Buyer shall jointly prepare a preliminary closing adjustment
computation on the basis of the Leases and other sources, and
shall deliver such computation to the Escrow Holder prior to
Closing.
10.10 Post-Closing Reconciliation. All
items described in this Section 10 that are capable of being
prorated as of the Closing Date, shall be prorated as of the
Closing Date. All other items shall be reconciled within one
hundred eighty (180) days after the Closing Date to the extent
that such items may be reconciled within such one hundred eighty
(180) day period, or, to the extent such items may not be
reconciled within such one hundred eighty (180) day period, when
such items may first be reconciled after Closing.
10.11 Survival. The provisions of this
Section 10 shall survive Closing.
11. COSTS AND EXPENSES. The closing costs shall be
allocated as follows:
11.1 Seller. Seller shall pay all premiums for
the base portion of the Title Policy (e.g., CLTA), Seller's share
of prorations, all state and county transfer taxes, all sales
taxes, any other tax or assessment imposed as a result of the
transactions contemplated under this Agreement, and any document
recording charges and notary fees, including, without limitation,
any recording fees and notary charges with respect to the Deeds.
11.2 Other Closing Costs. Buyer and Seller will
share equally all escrow fees and each will pay their own legal
and professional fees and fees of other consultants incurred by
Buyer and Seller, respectively. Buyer shall be responsible for
the cost to update any existing surveys or obtain any new
surveys. Buyer shall be responsible for any additional title
insurance requested by Buyer, including all endorsements and the
additional cost to obtain an ALTA policy of title insurance, its
share of prorations and all other closing costs and expenses will
be allocated between Buyer and Seller in accordance with the
customary practice in the county in which the Property is
located.
11.3 Delivery of Possession. Simultaneously with
the Closing, Seller shall deliver possession and enjoyment of the
Property to Buyer and Buyer shall thereupon have the immediate
right to possess, develop, use, sell, encumber and/or transfer
the Property, or any part thereof for its own account to the
total exclusion of Seller.
12. GENERAL INDEMNIFICATION.
12.1 Seller Indemnification. Seller will
defend, indemnify and hold the Buyer, its officers, directors,
agents, shareholders, representatives, employees, attorneys,
affiliates, beneficiaries, subsidiaries, successors and assigns
(collectively, the "Buyer Indemnitees") harmless from and
against:
12.1.1 Any and all claims, demands,
liabilities, liens, costs, expenses, penalties, damages and
losses (including, but not limited to, attorneys' fees and costs)
of every kind and nature incurred or accrued prior to the Closing
Date with respect to the Property, whether arising from acts or
omissions of Seller, its agents or employees or otherwise;
12.1.2 Any and all liabilities and
obligations arising from any breach of the warranties,
representations, covenants and agreements of Seller or its agents
contained in this Agreement or in any agreements between Seller
and any third parties relating to the Property or the Leases; and
12.1.3 Any and all liabilities and
obligations arising after the Closing Date as a result of
Seller's failure to pay all taxes, assessments, fees and other
government charges levied upon Seller's assets and income or
otherwise relating or attributable to the Property or the
operations conducted thereon and due as of the Closing Date.
12.2 Buyer Indemnification. Buyer will
defend, indemnify and hold the Seller, its officers, directors,
agents, shareholders, representatives, employees, attorneys,
affiliates, beneficiaries, subsidiaries, successors and assigns
(collectively, the "Seller Indemnitees") harmless from and
against:
12.2.1 Any and all claims, demands,
liabilities, liens, costs, expenses, penalties, damages and
losses (including, but not limited to) attorneys' fees and costs)
of every kind and nature incurred or accrued after the Closing
Date with respect to the Property, whether arising from acts or
omissions of Buyer, its agents or employees or otherwise; and
12.2.2 Any and all liabilities and
obligations arising from any breach of the warranties or
representations of Buyer contained in this Agreement.
The foregoing indemnifications shall survive the
Closing.
13. CONDEMNATION AND DESTRUCTION:
13.1 Eminent Domain or Taking. If proceedings
under a power of eminent domain relating to the Property or any
part thereof are commenced prior to the Closing Date, Seller
shall promptly inform Buyer in writing.
13.1.1 If such proceedings involve
the taking of title to all or any Material (defined below)
interest in the Property, Buyer may elect to terminate this
Agreement by notice in writing sent within thirty (30) days of
Seller's written notice to Buyer, in which case the Deposit, and
any interest thereon, will be returned to Buyer and neither party
shall have any further obligation to or rights against the other
except any rights or obligations of either party which are
expressly stated to survive termination of this Agreement.
13.1.2 If the proceedings do not
involve the taking of title to all or a Material interest in the
Property or if Buyer does not elect to terminate this Agreement,
this transaction will be consummated as described in this
Agreement and any award or settlement payable with respect to
such proceeding will be paid or assigned to Buyer upon the
Closing.
13.1.3 For purposes of this Section
13.1, "Material" shall mean a taking which Buyer reasonably
determines materially and adversely affects the value or
operations of the Property.
13.2 Damage or Destruction. Except as provided in
this paragraph, prior to the Close of Escrow the entire risk of
loss of damage by earthquake, flood, hurricane, landslide, fire
or other casualty is borne and assumed by Seller. If, prior to
the Closing Date, any part of the Property is damaged or
destroyed by earthquake, flood, landslide, fire or other
casualty, Seller will promptly inform Buyer of such fact in
writing and advise Buyer as to the extent of the damage.
13.2.1 If such damage or destruction
is Material (as defined below), Buyer has the option to terminate
this Agreement upon written notice to the Seller given not later
than thirty (30) days after receipt of Seller's written notice to
Buyer advising of such damage or destruction.
13.2.2 If this Agreement is so
terminated, Buyer will be entitled to the return of the Deposit
together with any interest thereon.
13.2.3 If Buyer does not timely
exercise this option to terminate this Agreement, or if the
casualty is not Material, Seller will assign to Buyer all of
Seller's right, title and interest in and to any and all
insurance proceeds under Seller's insurance policies relating to
such damage or destruction, and shall reduce the Purchase Price
by the amount of the deductible and any other amount less than
$100,000 which is not covered by insurance under such policies
(including reasonably anticipated post-Closing rental loss,
except to the extent covered by insurance, through to completion
of such repair and restoration resulting from such casualty), and
this transaction will close pursuant to the terms of this
Agreement. If the cost to repair any uninsured casualty exceeds
$100,000, Seller's consent must be obtained before the Purchase
Price is reduced under this Section 13.2.3 by the amount of such
repair cost. If Seller does not so consent to such a reduction
in the Purchase Price, Buyer shall have the right to purchase the
Property without any such reduction or terminate this Agreement.
13.2.4 For purposes of this Section
13.2, "Material" is deemed to be any damage or destruction to the
Property where the cost of repair or replacement is estimated to
be more than 10% of the Purchase Price (determined on an
aggregate basis and on a per property basis based upon the
purchase price allocation set forth in Section 3.3 above).
13.2.5 Survival. The provisions of
this Section 13 shall survive the Closing.
14. REMEDIES:
14.1 Buyer's Remedies. IN THE EVENT THAT SELLER
SHALL FAIL TO CONSUMMATE THIS AGREEMENT FOR ANY REASON, EXCEPT
BUYER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY BUYER OR
SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS HEREOF,
BUYER SHALL HAVE THE FOLLOWING REMEDIES, WHICH SHALL BE BUYER'S
SOLE AND EXCLUSIVE REMEDIES BASED UPON A DEFAULT BY SELLER. SUCH
REMEDIES SHALL NOT BE CUMULATIVE, MEANING BUYER MAY EXERCISE ONE
(1) BUT NOT BOTH OF SUCH REMEDIES. BUYER SHALL DELIVER TO SELLER
AND ESCROW HOLDER NOTICE OF ITS ELECTION OF REMEDIES WITHIN TWO
(2) DAYS AFTER SELLER'S DEFAULT. THE SOLE REMEDIES AVAILABLE TO
BUYER ARE AS FOLLOWS:
(i) BUYER MAY TERMINATE THIS AGREEMENT, IN
WHICH CASE SELLER SHALL IMMEDIATELY RETURN THE DEPOSIT, TOGETHER
WITH ANY INTEREST EARNED THEREON, TO BUYER, UPON EXECUTION OF
CANCELLATION INSTRUCTIONS BY BUYER, AND SELLER SHALL PAY ANY
ESCROW CANCELLATION CHARGES. IN ADDITION, SUBJECT TO THE TERMS
OF SECTION 18.20 BELOW, BUYER SHALL HAVE THE RIGHT TO PURSUE AN
ACTION AGAINST SELLER FOR ALL ACTUAL OUT-OF-POCKET (BUT NOT
CONSEQUENTIAL) DAMAGES SUFFERED BY BUYER; OR
(ii) BUYER MAY BRING AN ACTION FOR SPECIFIC
PERFORMANCE AGAINST SELLER WITH RESPECT TO THIS AGREEMENT BUT
ONLY UNDER THE FOLLOWING CONDITIONS AND CIRCUMSTANCES:
(a) BUYER SHALL HAVE FULLY
PERFORMED ALL OBLIGATIONS OF BUYER UNDER THIS AGREEMENT, EXCEPT
THAT WITH RESPECT TO DEPOSITING THE BALANCE OF THE PURCHASE
PRICE, BUYER SHALL HAVE EVIDENCED TO SELLER'S REASONABLE
SATISFACTION THAT BUYER IS READY, WILLING AND ABLE TO TIMELY
DEPOSIT SAID FUNDS IN ESCROW;
(b) THE ACTION SHALL BE COMMENCED,
AND SERVICE OF PROCESS UPON SELLER MADE, NOT LATER THAN FORTY-
FIVE (45) DAYS AFTER SELLER'S DEFAULT; AND
(c) ALL OF THE ISSUES IN SUCH
ACTION, WHETHER OF FACT OR LAW, SHALL BE HEARD BY A REFERENCE
PROCEEDING PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE,
SECTION 638, ET. SEQ. WITHIN TEN (10) DAYS FOLLOWING THE
COMMENCEMENT OF ANY SUCH ACTION, THE PARTIES SHALL MAKE
APPLICATION TO THE COURT IN WHICH THE ACTION IS PENDING FOR THE
APPOINTMENT OF A RETIRED SUPERIOR COURT JUDGE OR COURT OF APPEAL
JUSTICE FROM THE THEN CURRENT LIST OF RETIRED JUDGES AVAILABLE TO
SERVE AS REFEREES IN THE COUNTY IN WHICH SUCH ACTION IS COMMENCED
TO SERVE AS THE REFEREE. THE REFEREE CHOSEN SHALL BE DEEMED
QUALIFIED ONLY IF HE IS WILLING TO AGREE TO HEAR THE SUBJECT
ACTION WITHIN TWENTY (20) DAYS FOLLOWING THE DATE OF APPLICATION
TO THE COURT, TO HEAR THE SUBJECT ACTION ON CONSECUTIVE DAYS AND
TO RENDER A DECISION WITHIN A FURTHER FIFTEEN (15) DAY PERIOD.
THE PARTIES SHALL ADVANCE, IN EQUAL SHARES, THE FEES AND EXPENSES
OF THE REFEREE SELECTED PURSUANT TO THIS PROVISION, BUT THE
LOSING PARTY IN ANY SUCH ACTION SHALL REIMBURSE THE PREVAILING
PARTY FOR ANY AND ALL FEES AND EXPENSES PREVIOUSLY ADVANCED BY
SUCH PREVAILING PARTY FOR THE REFEREE.
14.2 Seller's Remedies. IF BUYER SHOULD FAIL TO
CONSUMMATE THIS AGREEMENT AS A RESULT OF BUYER'S DEFAULT UNDER
THE TERMS OF THIS AGREEMENT, THEN SELLER, AS ITS SOLE AND
EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT BY NOTIFYING BUYER
THEREOF AND RECEIVE OR RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
THE PARTIES AGREE THAT SELLER WILL SUFFER DAMAGES IN THE EVENT OF
BUYER'S DEFAULT ON ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH
DAMAGES IS DIFFICULT OR IMPOSSIBLE TO DETERMINE, THE PARTIES
AGREE THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF
SELLER'S LOSS IN THE EVENT OF BUYER'S DEFAULT. THUS, SELLER
SHALL ACCEPT AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES BUT NOT
AS A PENALTY. SELLER HEREBY ACKNOWLEDGES AND AGREES SUCH
LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE
REMEDY AND SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA
CIVIL CODE SECTION 3389 AND ANY OTHER APPLICABLE EXISTING OR
FUTURE LAW PERMITTING A CONTRACT TO BE ENFORCED EVEN THOUGH
DAMAGES ARE LIQUIDATED FOR ITS BREACH.
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THE FOREGOING PROVISION AND BY THEIR
INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.
Seller:/s/ MS Buyer: /s/VJC
150 LOAN ASSUMPTION.
15.1 Loan Assumption Contingency. Buyer's
obligation to close the purchase of one or more of the Properties
in accordance with the terms of this Agreement is expressly
subject to and conditioned upon (i) the consent by the Existing
Lender to the assignment to and assumption by Buyer (or Buyer's
assignee hereunder) of those obligations of Seller under the
Existing Loans accruing from and after the Closing Date; and
(ii) Buyer's approval, in its sole and absolute discretion, of
the Existing Loans and of the terms and conditions governing and
the documents effectuating such assignment, assumption and
consent (including, without limitation, a beneficiary statement
from the Existing Lender acceptable to Buyer). Notwithstanding
anything to the contrary contained in this Agreement, if the
conditions set forth in subparagraphs (i) and (ii) above have not
been fully satisfied on or before October 1, 1997, Buyer shall
have the right to terminate this Agreement as to [one or more of]
the Properties by written notice to Seller, in which case all
rights and obligations of the parties existing hereunder shall
terminate as to such Property(ies) and be of no further force or
effect, except any rights and obligations which are expressly
stated to survive the termination of this Agreement. If this
Agreement is terminated as to all of the Properties, the Deposit
and any interest thereon will be immediately returned to Buyer
without further instructions from Seller.
15.2 Defined Terms. The term "Existing
Lender" shall mean Union Central Life Insurance Co. The term
"Existing Loans" shall mean and refer to those certain loans made
by the Existing Lender with outstanding principal balances as of
the date of this Agreement in the amounts of $1,456,208.00,
$3,317,012.00 and $3,368,985.00 (respectively secured by two (2)
first lien deeds of trust on Conejo Business Park and a first
lien deed of trust on Marin Corporate Center), and all documents
and instruments evidencing, relating to and/or securing said
loans.
15.3 Representation regarding Existing
Loans. Seller hereby represents and warrants that (i) a
breakdown of the Existing Loans is attached hereto as Exhibit
"O", (ii) a complete schedule of all of the documents evidencing,
relating to and/or securing the Existing Loans is attached hereto
as Exhibit "O", and (iii) there are no other documents
evidencing, relating to and/or securing the Existing Loans except
as set forth on Exhibit "O".
16. MARKETING. Subject to the terms of Section 6.2
above, Seller shall not, without Buyer's prior written approval,
enter into, amend or terminate any of the Leases or contracts
affecting the Property or take any other actions affecting the
Property (other than in the ordinary course of ownership) from
the date of this Agreement through the earlier of (a) the
Closing, or (b) the termination of this Agreement as to the
Property. Notwithstanding the foregoing, Buyer will have the
right to market the Property for lease during this period.
17. BROKERAGE COMMISSIONS. Each party hereby
represents and warrants to the other that it has not incurred any
obligation to any third party for the payment of any real estate
commission, finder's fee or other like sum in connection with the
sale of the Property to Buyer, except for a commission which
Seller agrees to pay to Told Partners, Inc. and Marcus &
Millichap in accordance with the terms of a separate agreement
between Seller and said brokers, and each party hereby agrees to
indemnify and hold the other party harmless from and against any
and all claims, demands, causes of action and costs, including
attorneys' fees and costs, made, brought or sought against or
from the other arising out of any agreement for the payment of a
real estate commission, finder's fee or other like sum entered
into between either party and a third party in connection with
the sale of the Property to Buyer.
18. NOTICE. All notices, requests, demands or
documents which are required or permitted to be given or served
hereunder shall be in writing and (a) delivered personally,
(b) delivered by a national overnight courier (i.e., FedEx), or
(c) transmitted by facsimile, addressed as follows:
To Seller at: Silagi Development & Management
101 Hodencamp Blvd., Suite 200
Thousand Oaks, California 91360
Attn: Mr. Moshe Silagi
Facsimile: (805) 494-1226
with a copy to:
Polston, Schwartz, Hamilton & Fenster
9440 Santa Monica Blvd., Suite 405
Beverly Hills, California 90210
Attn: Stephen M. Fenster, Esq.
Facsimile:
To Buyer at: Arden Realty Limited Partnership
9100 Wilshire Blvd., Suite 700 E
Beverly Hills, California 90212
Attn: Mr. Victor Coleman
Ms. Brigitta Troy
Facsimile: (310) 274-6218
with a copy to:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, Tenth Floor
Los Angeles, California 90067
Attn: Scott M. Kalt, Esq.
Facsimile: (310) 203-0567
Notice shall be deemed to have been delivered only upon actual
delivery to the intended addressee in the case of either
personal, courier, or facsimile delivery. The addresses for
purposes of this paragraph may be changed by giving written
notice of such change in the manner provided herein for giving
notices. Unless and until such written notice is delivered, the
latest information stated by written notice, or provided herein
if no written notice of change has been delivered, shall be
deemed to continue in effect for all purposes hereunder.
19. MISCELLANEOUS:
19.1 Survival. The recitals set forth at the
beginning of this Agreement are deemed incorporated herein, and
the parties to this Agreement warrant and represent that they do
not omit to state any material fact necessary to make the
statements or Exhibits, as the case may be, materially
misleading. The representations and warranties contained in this
Agreement shall survive for a period of twelve (12) months
following the Closing Date. The covenants, acknowledgments,
agreements, certifications and indemnities contained in this
Agreement and the Exhibits, or in any of the documents or
agreements executed and/or delivered and/or exchanged pursuant to
the terms of this Agreement shall survive the Closing Date, and
shall not be deemed to have merged or terminated upon the Closing
Date.
19.2 No Assumption by Buyer or Buyers. By
accepting the Deeds, the Bills of Sale, the Assignments of Leases
and the Assignments of Intangible Property, Buyer does not intend
to assume any obligations of Seller in connection with the
Property or otherwise, except as expressly provided to the
contrary in such documents. For purposes of any successor
liability, Buyer shall not be deemed to be the business successor
of Seller, and is not continuing the business of Seller. Buyer
shall not be liable for any debts, contracts, obligations or
liabilities of Seller from and after the date hereof, unless
Buyer specifically agrees to be liable therefor pursuant to a
separate written agreement with the appropriate party.
19.3 Parties in Interest. As and when used
herein, the terms, "Seller" and "Buyer" mean and include, and
this Agreement their respective successor and assigns and shall
be binding upon and inure to the benefit of, the above-named
Seller and Buyer and their respective successors and permitted
assigns.
19.4 Section Headings. The headings of sections
are inserted only for convenience and shall in no way define,
describe or limit the scope or intent of any provision of this
Agreement.
19.5 No Oral Modifications. This Agreement may
not be amended or modified except in writing executed by all
parties hereto.
19.6 Full Integration. Buyer and Seller each
acknowledge that there are no other agreements or representa
tions, either oral or written, express or implied, that are not
embodied in this Agreement, and this Agreement, the Exhibits
attached to this Agreement, and the transfer documents, represent
a complete integration of all the prior and contemporaneous
agreements and understandings and documents.
19.7 Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties hereto, and
their respective successors and assigns, and no other party shall
be a beneficiary hereunder.
19.8 Seller's Advice of Counsel. Seller
acknowledges that (a) Buyer has not made any representation as to
the Federal or State tax implications relating to the
transactions contemplated herein, (b) Seller has thoroughly read
and reviewed the terms and provisions of this Agreement and the
Exhibits attached hereto and is familiar with the terms of this
Agreement, (c) the terms and provisions contained in this
Agreement are clearly understood by Seller and have been fully
and unconditionally consented to by it, (d) Seller has had full
benefit and advice of counsel of its own selection, in regard to
understanding the terms, meaning and effect of this Agreement,
(e) the execution of this Agreement and of the other documents
executed pursuant to this Agreement is done freely, voluntarily,
with full knowledge, and without duress, (f) in executing this
Agreement, Seller is relying on no other representations, either
written or oral, express or implied, made to it by any other
party to this Agreement, and the consideration received by it
under this Agreement has been actual and adequate.
19.9 Attorneys' Fees. If an action is commenced
by a party hereto resulting from a dispute with respect to the
transactions contemplated herein, the prevailing party shall be
entitled to recover its attorneys' fees and costs from the other
party in such action. As used herein, the term "attorneys' fees"
means attorneys' fees whether or not litigation ensues and if
litigation ensues whether incurred at trial, on appeal, on
discretionary review or otherwise.
19.10 Governing Law. This Agreement will be
governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of California, with venue
in the city and County of Los Angeles, California. Each of the
parties hereto acknowledge and agree that the laws of the State
of California and the selection of venue in the city and County
of Los Angeles were freely chosen by Buyer and Seller.
19.11 Confidentiality. Unless otherwise
agreed to in writing by Seller and Buyer, each party will use
reasonable efforts to keep confidential the terms of this
Agreement, the possible sale of the Property, and all documents,
financial statements, reports or other information provided to,
or generated by the other party relating to the Property, and
will use reasonable efforts to not disclose any such information
to any person other than (a) all of the constituent entities
comprising Seller (and all of the members of such constituent
entities) and all of the employees of such constituent entities
(and all of the members of each such constituent entity) as well
as the employees of Buyer; (b) those who are actively and
directly participating in the evaluation of the Property and the
negotiation and execution of this Agreement or financing of the
purchase of the Property; and (c) governmental, administrative,
regulatory or judicial authorities in the investigation of the
compliance of the Property with applicable legal requirements;
and (d) third parties as required under applicable law. The
provisions of this paragraph will survive the termination of this
Agreement other than by Closing.
19.12 Captions. The captions contained in
this Agreement are for convenience only and are not intended to
limit or define the scope or effect of any provision of this
Agreement.
19.13 Severability. The invalidity,
illegality or unenforceability of any provision of this Agreement
shall not affect the enforceability of any other provision of
this Agreement, all of which shall remain in full force and
effect.
19.14 Time of the Essence. Time is of the
essence of this Agreement and of the obligations required
hereunder.
19.15 Non-Waiver. No delay or failure by any
party to exercise any right hereunder, and no partial or single
exercise of any such right, shall constitute a waiver of that or
any other right, unless otherwise expressly provided herein.
19.16 Assignment. Notwithstanding anything
to the contrary contained in this Agreement, Buyer shall have the
right to designate a buyer to take title to the Property and such
Buyer shall succeed to all of the rights and remedies of Buyer
and shall be treated as if such party were the original Buyer
under this Agreement, including, but not limited to, the specific
performance of this Agreement, at which time Buyer shall be
automatically released from any further liability hereunder.
19.17 Facsimile. The parties hereto and
their respective successors and assigns are hereby authorized to
rely upon the signatures of each person and entity on this
Agreement which are delivered by facsimile as constituting a duly
authorized, irrevocable, actual, current delivery of this
Agreement with original ink signatures of each person and entity.
19.18 Further Assurances. Buyer and Seller
agree to execute all documents and instruments reasonably
required in order to consummate the purchase and sale
contemplated in this Agreement.
19.19 Counterparts. This Agreement may be
executed in any number of counterparts and each such counterpart
shall be deemed to be an original, but all of which, when taken
together, shall constitute one Agreement.
19.20 WAIVER OF JURY TRIAL. EACH PARTY
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION SEEKING
SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS AGREEMENT, FOR
DAMAGES FOR ANY BREACH UNDER THIS AGREEMENT, OR OTHERWISE FOR
ENFORCEMENT OF ANY RIGHT OR REMEDY HEREUNDER.
19.21 Arbitration. Except as otherwise
provided in Section 14.1 above, any controversy or claim arising
out of or relating to this Agreement or breach thereof shall be
resolved by arbitration before a retired judge of the Superior
Court of the State of California for the County of Los Angeles
(the "Los Angeles Superior Court") in the following manner:
(a) The arbitration shall begin by one
party serving a complaint and a demand for arbitration upon other
parties. The party serving the demand shall include with the
demand a list of five retired judges of Los Angeles Superior
Court from the then available list of retired judges willing to
act as private judges. The responding party shall then have ten
days to select the arbitrator from the list of five. If the
selected arbitrator is unavailable, the responding party may
choose another name; with the process repeated until the list of
five is exhausted. If none of the five judges is available, the
responding party may select a judge from the list of available
retired judges.
(b) The arbitration shall take place in Los
Angeles, California at a time and place selected by the
arbitrator.
(c) The parties to the arbitration may have
all rights and powers afforded to a civil litigant in Los Angeles
Superior Court, including the ability to conduct full discovery.
The arbitrator shall be governed by the rules of civil procedure
for actions filed in California Superior Courts as set forth in
California Code of Civil Procedure ("CCP"). The arbitrator may
deviate from the rules by stipulation of the parties.
(d) The parties shall evenly divide the
cost of the arbitrator's fees. The arbitrator shall have the
power, as part of any award, to include these fees as an element
of recovery.
(e) Should the arbitrator at any time prior
to the commencement of the arbitration hearing become
incapacitated or otherwise unable to fulfill his or her duties,
the parties agree to seek a mutually agreeable replacement.
(f) The procedure for implementing or
challenging the arbitrator's decision shall be that set forth in
CCP Section 1285, et seq., relating to the confirmation,
correction, or vacation of arbitration awards. Except as set
forth by that procedure, the arbitrator's award shall be
considered final, and not subject to appeal or collateral attack.
20. AS-IS. Except as specifically set forth in this
Paragraph and the representations set forth in Paragraph 5 above,
the sale of the Property hereunder is and will be made on an "as
is" basis, without representations and warranties of any kind or
nature, express, implied or otherwise, including but not limited
to, any representation or warranty concerning title to any of the
Properties, the physical condition of any of the Properties
(including, but not limited to, the condition of the soil or the
improvements) , the environmental condition of the Properties
(including, but not limited to, the presence or absence of
hazardous substances on or respecting any of the Properties) ,
the compliance of any of the Properties with applicable laws and
regulations (including, but not limited to, zoning and building
codes or the status of development or use rights respecting any
of the Properties), the financial condition of the Properties or
any other representation or warranty respecting any income,
expenses, charges, liens or encumbrances, rights or claims on,
affecting or pertaining to any of the Properties or any party
thereof. Buyer acknowledges that Buyer will examine, review and
inspect all matters which in Buyer's judgment bear upon the
Properties and its value and suitability for Buyer's purposes,
and Seller shall cooperate with Buyer in making such information
available to Buyer for such examination. Except as to matters
specifically set forth in this Paragraph and the representations
set forth in Paragraph 5 above, Buyer will acquire the Properties
solely on the basis of its own physical and financial
examinations, reviews and inspections and the title insurance
protection afforded by the Title Policy.
21. 1031 Exchange. Buyer agrees to cooperate with
Seller in completing an exchange qualifying for non-recognition
under Internal Revenue Code Section 1031 and the applicable
provisions of the California Revenue and Taxation Code, as may be
amended from time to time. Seller and Buyer agree, however, that
the consummation of the transactions contemplated by this
Agreement are not predicated or conditioned upon completion of
such an exchange. If Seller elects to complete and exchange,
Buyer, shall execute all escrow instructions, documents,
agreements, or instruments reasonably requested by the Seller to
complete the exchange. Buyer shall incur no additional
liabilities, expenses or costs as a result of or connected with
the exchange. Seller agrees to indemnify, defend and hold Buyer
harmless from any liability, damages or costs (including, but not
limited to, reasonable attorneys' fees and costs) that may arise
from Buyer's participation in the exchange. Seller's liability
to Buyer for Buyer's attorneys fees for reviewing the applicable
documents with regard to Buyer's participation in the exchange
shall not exceed $500.00 per exchange.
Buyer and Seller have executed this Agreement as of the
date written above.
"Seller"
/s/ Moshe Silagi
MOSHE SILAGI, Co-Trustee of the
Silagi Family Trust
/s/ Andrea Silagi
ANDREA SILAGI, Co-Trustee of the
Silagi Family Trust
CONEJO BUSINESS PARK, LLC, a
California limited liability company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
MARIN CORPORATE CENTER, LLC, a
California limited liability
company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title:General Member
EVERGREEN PLAZA, LLC, a California
limited liability company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC., a Maryland
corporation, its general
partner
By: /s/ Victor J. Coleman
Victor J. Coleman
Its: President and COO
FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS ("Amendment") dated as of this 24th
day of October, 1997 is made by and between Moshe Silagi and
Andrea Silagi, Co-Trustees of the Silagi Family Trust (the
"Trust"), Conejo Business Park, LLC, a California limited
liability company ("Conejo LLC"), Marin Corporate Center LLC, a
California limited liability company ("Marin LLC"), Evergreen
Plaza LLC, a California limited partnership ("Evergreen LLC")
(collectively, "Original Seller"), Hillside Corporate Center,
LLC, a California limited liability company and Westlake Gardens,
LLC, a California limited liability company (together,
"Additional Seller"), and Arden Realty Limited Partnership, a
Maryland limited partnership ("Buyer"). Original Seller and
Additional Seller shall collectively be referred to herein as
"Seller".
R E C I T A L S
WHEREAS, Original Seller and Buyer are parties to that
certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of August 1, 1997 (the "Agreement");
WHEREAS, Original Seller is the owner of the Property;
WHEREAS, Additional Seller is the owner of the
Additional Property (defined below);
WHEREAS, Buyer desires to purchase, and Additional
Seller desires sell, the Additional Property on the terms and
conditions set forth in the Agreement, as amended by this
Amendment; and
WHEREAS, Seller and Buyer desire, among other things,
to amend the Agreement to add Additional Seller as a party
thereto and to provide for the purchase and sale of the
Additional Property upon and subject to all the terms and
conditions set forth below.
A M E N D M E N T
NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller
and Buyer hereby amend the Agreement upon and subject to the
following terms, provisions and conditions. Capitalized terms
used in the Amendment and not otherwise defined shall have the
meanings ascribed to such terms as set forth in the Agreement.
PROVIDED FURTHER, that except to the extent otherwise
provided below, the terms and provisions of the Agreement and the
rights and obligations of Original Seller and Buyer thereunder
shall apply with equal force and effect to the Additional
Property, Additional Seller and to Buyer's purchase of the
Additional Property, with conforming changes being deemed
incorporated into the Agreement where necessary to provide
appropriate contextual references. By way of illustration, the
Escrow Holder's deliveries to Buyer in Section 4.4.3 of the
Agreement upon the Hillside Closing (defined below) shall be the
Assignment of Leases, the Assignment of Intangible Property, the
Bill of Sale, the Transferor's Certificate and all other items
required to be delivered by Seller pursuant to Sections 4.1 and
8.1.4, but only to the extent such items or documents pertain to
Hillside Corporate Center. Similarly, on the Hillside Closing
Date, the Escrow Holder shall only record the Deed for the
applicable Additional Real Property comprising Hillside Corporate
Center in the appropriate county.
1. PARAGRAPH 1: DEFINITIONS. The following
definitions are hereby added to or replace the corresponding
Definitions in Section 1 of the Agreement:
1.1 "Additional Land" collectively
means the real property located at
(i) 555 St. Charles Drive, Thousand Oaks,
California (commonly known as Hillside
Corporate Center) and (ii) 2525 and
2555 Townsgate, Westlake Village, California
(collectively and commonly known as Westlake
Gardens), as each component of the Additional
Land is respectively described in
Exhibits "A-7" and "A-8".
1.2 "Additional Leases" shall mean all
existing leases, rental and occupancy
agreements and lease commitments relating to
the Additional Real Property, including those
Additional Leases which are listed on
Exhibits "F-7" and "F-8", respectively,
together with any and all leases which are
entered into after the date of this Amendment
in accordance with Buyer's written approval
as set forth in Section 5.2 of this
Amendment.
1.3 "Additional Personal Property"
means all the personal property of Seller
located on or in or used in connection with
the Additional Real Property, including those
items set forth on Exhibits "H-7" and "H-8",
respectively.
1.4 "Additional Property" or
"Additional Properties" collectively means
the Additional Real Property, the Additional
Personal Property and the Intangible Property
with respect to the Additional Real Property
and/or Additional Personal Property.
1.5 "Construction Closing Conditions
Period" means the period commencing on the
date this Amendment is executed and delivered
by both Buyer and Seller and ending at
6:00 p.m. (California time) on the first
business day which is five (5) business days
after the Conditions to Construction
Completion as set forth on Schedule "1"
attached hereto have been fully completed to
the satisfaction of Buyer with respect to
construction of Hillside Corporate Center,
Phase I (as defined in Section 1.37) of
Westlake Gardens and Phase II (as defined in
Section 1.37) of Westlake Gardens,
respectively.
1.6 "Additional Real Property" means
the Additional Land, the improvements
situated or to be constructed on the
Additional Land, the Fixtures and the
Appurtenances with respect to the Additional
Land.
1.7 "Amendment" means that certain First
Amendment to Agreement of Purchase and Sale and Joint
Escrow Instructions dated October 24, 1997 by and
between Seller, Additional Seller (as defined in the
Amendment) and Buyer.
1.8 "Approved Plans" shall mean the
Plans, and all amendments, modifications and
supplements to the Plans as and when approved
in writing by Buyer.
1.9 "Appurtenances" means all Seller's
interest in all rights, privileges and
easements appurtenant to the Land and
Additional Land, including, without
limitation, all minerals, oil, gas and other
hydrocarbon substances in, on and under the
Land and Additional Land, as well as all
development rights, air rights, water, water
rights and water stock relating to the Land
and Additional Land and any other easements
appurtenant to the Land and Additional Land.
1.10 "Assignments of Leases" means the
Assignments of Leases, to be duly executed
and delivered by Seller in accordance with
Section 4.1 of this Agreement, assigning to
Buyer all of Seller's right, title and
interest in and to the Leases and Additional
Leases. The Assignments of Leases shall each
be in the form of, and upon the terms con
tained in, Exhibit "C".
1.11 "Bills of Sale" means the Bills of
Sale, to be duly executed and delivered by
Seller in accordance with Section 4.1 of this
Agreement, conveying to Buyer all of the
Personal Property and Additional Personal
Property. The Bills of Sale shall each be in
the form of, and upon the terms contained in,
Exhibit "D".
1.12 "Deeds" means the Grant Deeds, to
be duly executed, acknowledged and delivered
in recordable form by Seller in accordance
with Section 4.1 of this Agreement, conveying
to Buyer good and marketable fee simple title
to the Real Property and Additional Real
Property, as applicable. The Deeds shall
each be in the form of, and upon the terms
contained in, Exhibit "E" except that the
Deed with respect to the transfer of Phases I
and II of Westlake Gardens shall contain the
following language:
"The transfer of the Property to
the Grantee pursuant to this Grant
Deed is subject to the terms and
conditions of that certain
Declaration of Covenants,
Conditions and Restrictions
executed by Westlake Gardens LLC,
as declarant, and recorded on
May 7, 1997, in the Official
Records of Ventura County,
California, as Instrument No. 97-
057284."
1.13 "Fixtures" means all fixtures
placed on, attached to, or located at and
used in connection with the operation of, the
Land and the Additional Land.
1.14 "Governmental Regulations" means
any local, state, and federal laws,
ordinances, rules, requirements, codes,
building codes, resolutions, policy
statements and regulations (including, with
out limitation, those relating to land use,
subdivision, zoning, environmental, labor
relations, notification of sale to employer,
Hazardous Materials, occupational health and
safety, water, earthquake hazard reduction
and building and fire codes) bearing on the
construction, development, alteration,
rehabilitation, maintenance, use, operation,
or sale of the Property and the Additional
Property.
1.15 "Hillside Closing" means the
consummation of the conveyances of the
Additional Property, Additional Leases and
any other transactions contemplated under
this Agreement, but only with respect to
Hillside Corporate Center, all of which shall
occur on or before the Hillside Closing Date.
1.16 "Hillside Closing Date" shall
mean five (5) business days after the
expiration of the Construction Closing
Conditions Period for Hillside Corporate
Center.
1.17 "Hillside Corporate Center"
means the Additional Real Property,
Additional Personal Property and Intangible
Property related solely to the real property
located at 555 St. Charles Drive, Thousand
Oaks, California.
1.18 "Hillside Purchase Price"
means an amount equal to $8,852,400.00.
1.19 "Hillside Title Policy" means
an ALTA owner's title policy (Form B-1970)
issued by the Title Company for the benefit
of Buyer, which Hillside Title Policy shall
(a) insure Buyer's fee title to the
Additional Real Property at Hillside
Corporate Center, (b) have a liability limit
in the amount of the Hillside Purchase Price,
(c) include those endorsements requested by
Buyer, and (d) show only those matters which
constitute Permitted Exceptions.
1.20 "Intangible Property" means all of
Seller's right, title and interest in and to
any and all intangible personal property now
and through the Closing Date, Hillside
Closing Date or Westlake Closing Date, as
applicable, owned by Seller and/or used in
connection with the ownership, construction,
development, use and/or operation of the Real
Property, Additional Real Property, Personal
Property and/or Additional Personal Property,
including, without limitation, the Service
Contracts (to the extent approved in writing
by Buyer), the Licenses and Permits, the
Intellectual Property and the Records and
Plans and the Warranties.
1.21 "Intellectual Property" means any
and all intellectual property owned by Seller
or licensed to Seller and used in connection
with the ownership, use and/or operation of
the Real Property, Additional Real Property,
Personal Property and/or Additional Personal
Property, including, without limitation,
trade names, logos, derivations, slogans and
other marks owned or used by or licensed to
Seller and associated with the Real Property,
Additional Real Property, Personal Property
and/or Additional Personal Property.
1.22 "Licenses and Permits" means all of
Seller's right, title, interests, privileges,
benefits and remedies in, to and under all
authorizations, approvals, permits,
certificates of occupancy, licenses,
agreements, variances, tentative maps, final
maps, plans and specifications and land use
entitlements held by Seller and/or relating
to the construction, reconstruction,
occupancy, operation or use of any part of
the Real Property, Additional Real Property,
Personal Property, or Additional Personal
Property.
1.23 "Intentionally Omitted."
1.24 "Notices To Tenants" means notices
from Seller to all tenants who are parties to
any of the Leases or Additional Leases
whereby such tenants are notified that the
Property or applicable Additional Property
has been transferred by Seller to Buyer and
instructing them to pay any and all rents and
other sums payable under the Leases or
Additional Leases from and after the Closing,
Hillside Closing or Westlake Closing, as
applicable, directly to Buyer or as otherwise
directed by Buyer, in the form of
Exhibit "G".
1.25 "Plans" shall mean full and
detailed architectural, construction,
landscaping, mechanical and engineering plans
and specifications covering the work to be
performed in connection with the Hillside
Project and the Westlake Project (as each
term is defined in Section 8 below). For
purposes of this definition, the term "Plans"
shall not include plans and specifications
solely relating to specific tenant
improvement work to be performed within a
particular premises at either the Hillside
Project or Westlake Project.
1.26 "Pre-Approved Lease Form"
means Buyer's standard form of lease
agreement.
1.27 "Project Documents" shall mean all
contractors' (including contractors' and
subcontractors), architects', engineers', consultants,
landscaping and other similar contracts entered into by
Seller, or any one of them, with respect to the Project
(as defined in Section 8 of this Amendment).
1.28 "Property" or "Properties"
collectively means the Real Property, the
Personal Property and, with respect to the
Real Property and/or Personal Property only,
the Intangible Property.
1.29 "Purchase Price" means the sum
of Thirty Five Million Three Hundred Seventy
One Thousand Three Hundred Eighty-Seven
Dollars ($35,371,387).
1.30 "Real Property" means the Land, the
improvements situated on the Land, the
Fixtures and the Appurtenances with respect
to the Land.
1.31 "Records and Plans" means (a) all
books and records maintained in connection
with the ownership, development,
construction, maintenance or operation of the
Property and Additional Property, (b) all
preliminary, final and "as-built" plans and
specifications respecting the Real Property
and Additional Real Property, and (c) all
structural reviews, architectural drawings,
topographical maps and engineering, soil,
seismic, environmental, asbestos, geologic
and architectural reports, studies and
certificates and other documents pertaining
to the Real Property and Additional Real
Property (including those which include
comments by any building or safety engineer,
inspector or other person who regularly makes
such inspections) which are within the
possession of, under the control of, or
reasonably available to, Seller.
1.32 "Service Contracts" means the
maintenance contracts, equipment leases,
warranties, guarantees, management contracts
and bonds, and any other similar obligations,
commitments or arrangements, together with
all supplements, amendments and modifications
thereto, relating to the construction,
development, marketing, operation,
maintenance or enjoyment of the Property
and/or Additional Property, which are set
forth on Exhibits "I-1", "I-2," "I-3," "I-4",
"I-5" and "I-6" attached to the Agreement and
Exhibits "I-7" and "I-8", respectively,
attached to this Amendment.
1.33 "Tenant Estoppels" means written
statements in the form of, and upon the terms
contained in, Exhibit "J", in favor of Buyer
from each of the tenants who are parties to
any of the Leases and/or Additional Leases,
dated not earlier than fifteen (15) days
prior to the Closing Date, Hillside Closing
Date or applicable Westlake Closing Date, as
applicable.
1.34 "Warranties" means all third party
warranties and guarantees relating to the
Property and/or Additional Property,
including any instruction books (e.g., for
vertical transportation, HVAC and other
building systems).
1.35 "Westlake Closing" means the
consummation of the conveyances of the
Additional Property, Additional Leases and
any other transactions contemplated under
this Agreement, but only with respect to each
of Phase I and Phase II of Westlake Gardens,
all of which shall occur on or before the
Westlake Closing Date for the applicable
phase.
1.36 "Westlake Closing Date" shall
mean five (5) business days after the
expiration of the Construction Closing
Conditions Period for each of Phases I and II
of Westlake Gardens (i.e., there will be
separate closing dates for each of Phases I
and II of Westlake Gardens).
1.37 "Westlake Gardens" means the
Additional Real Property, Additional Personal
Property and Intangible Property related
solely to the real property located at
2525 Townsgate ("Phase I") and 2555 Townsgate
("Phase II"), Westlake Village, California.
1.38 "Westlake Purchase Price"
means collectively an amount equal to
$14,647,600 ($7,323,800 of which is allocated
to Phase I of Westlake Gardens and $7,323,800
of which is allocated to Phase II of Westlake
Gardens).
1.39 "Westlake Title Policies"
means two (2) separate ALTA owner's title
policies (Form B-1970) issued by the Title
Company for the benefit of Buyer, which
Westlake Title Policies shall (a) insure
Buyer's title to the Additional Real Property
for Phase I and Phase II of Westlake Gardens,
(b) have liability limits in the amount of
the Westlake Purchase Price (separately
allocated for Phase I and Phase II of
Westlake Gardens, as applicable), (c) include
those endorsements requested by Buyer, and
(d) show only those matters which constitute
Permitted Exceptions.
2. PARAGRAPH 3: AGREEMENT TO SELL; PURCHASE PRICE.
2.1 The Hillside Purchase Price and the
applicable Westlake Purchase Price shall be paid to Seller (after
taking into account the adjustments described in Sections 10 and
11 of the Agreement) through Escrow Holder, at the Hillside
Closing and the applicable Westlake Closing, respectively.
2.2 Section 3.3(f). The figure set forth in
Section 3.3(f) should be deleted and replaced with $10,885,000."
3. PARAGRAPH 4: DELIVERIES AT CLOSING; CLOSING
PROCEDURES. The Hillside Closing and the Westlake Closing shall
take place on the Hillside Closing Date and the applicable
Westlake Closing Date, respectively.
3.1 Section 4.1. The introduction paragraph in
Section 4.1 of the Agreement is hereby deleted and replaced with
the following: "4.1 By Seller. At least two (2) business days
prior to the Closing, the Hillside Closing, or the applicable
Westlake Closing, as applicable, Original Seller or the
applicable Additional Seller, shall deliver or cause to be
delivered to Escrow Holder (unless otherwise indicated) the
following items with respect to the Properties or Additional
Properties, as applicable, duly executed and, where appropriate,
acknowledged by Seller or the applicable Additional Seller:"
3.2 Sections 4.1.9, 4.4, 4.4.2 and 11.1. The
words "Hillside Title Policy or Westlake Title Policies, as
applicable" are inserted after the words "Title Policy" in
Sections 4.1.9, 4.4, 4.4.2 and 11.1 of the Agreement.
3.3 Section 4.2. Paragraph 4.2.1 of the
Agreement is amended to provide that at the Hillside Closing and
applicable Westlake Closing, as applicable, Buyer shall deliver
the items in Section 4.2.2 and 4.2.3, and also the Hillside
Purchase Price or applicable Westlake Purchase Price, as
applicable, after taking into account the adjustments and costs
allocations in accordance with Sections 10 and 11 of the
Agreement, as amended by this Amendment.
3.4 Section 4.4.4. Paragraph 4.4.4 of the
Agreement is amended to provide that at the Hillside Closing Date
and applicable Westlake Closing Date, as applicable, Escrow
Holder shall deliver to Seller the Hillside Purchase Price or
applicable Westlake Purchase Price, as applicable, after taking
into account the adjustments and cost allocations in accordance
with Sections 10 and 11 of the Agreement, as amended hereby.
4. PARAGRAPH 5: REPRESENTATIONS AND WARRANTIES.
4.1 All of Seller's representations and
warranties made under Section 5.1 of the Agreement are hereby
reaffirmed and made with respect to the Additional Properties and
the Additional Leases, as the context so requires, all of which
are true as of the date of this Amendment and which shall be true
and correct as of the Closing, the Hillside Closing or the
applicable Westlake Closing, as applicable.
4.2 All of Buyer's representations and warranties
made under Section 5.2 are hereby reaffirmed and are true as of
the date of this Amendment and shall be true and correct as of
the Closing, the Hillside Closing or applicable Westlake Closing,
as applicable.
4.3 Exhibits "L" and "M" attached to the
Agreement are replaced by Exhibits "L" and "M", respectively,
attached to this Amendment.
5. PARAGRAPH 6: SELLER'S OBLIGATIONS REGARDING
ADDITIONAL PROPERTIES. Seller hereby covenants to Buyer, upon
which covenants Buyer has relied and will continue to rely, that
for the period from the date of this Amendment through and
including the Hillside Closing Date or the applicable Westlake
Closing Date, as applicable.
5.1 Further Liens and Encumbrances. Additional
Seller will not subject the Additional Properties to any
additional liens, encumbrances, covenants, conditions, easements,
rights of way or similar matters after the date of this
Amendment, provided that, subject to the terms of the Agreement,
as amended hereby, Additional Seller has the right to encumber
Phase II of Westlake in connection with construction financing to
be obtained by Additional Seller for the development of Phase II
of Westlake Gardens. Seller will not hereafter modify, extend,
renew, replace or otherwise change any of the terms, covenants or
conditions of any of such documents, or enter into any new
agreements affecting the Additional Properties without the prior
written consent of Buyer, which consent may be withheld in
Buyer's sole and absolute discretion.
5.2 Leases; Other Contracts; Interim Activities.
Additional Seller agrees to (i) cooperate with Buyer in
connection with Additional Seller's leasing efforts at the
Additional Properties, and (ii) use its commercially reasonable
efforts to enter into new leases as soon as reasonably
practicable with respect to the Additional Properties, subject to
the terms of this Section 5.2. Buyer shall have the right to
propose new lease transactions to Additional Seller from and
after the date hereof and Additional Seller agrees to (x)
reasonably consider said proposed transactions, and (y) cooperate
with Buyer in connection with Buyer's leasing efforts at the
Additional Properties. Seller will not hereafter terminate,
modify, extend, renew, replace or otherwise change any of the
Additional Leases or enter into new leases or contracts affecting
the Additional Properties after the date of this Amendment (each,
a "new lease"), except with the prior written consent of Buyer,
which consent (a) will not be unreasonably withheld (with respect
to any such action prior to the expiration of the Additional
Property Inspection Period [defined in Section 9.1.2 below]),
provided, however, that Buyer's withholding of consent shall be
deemed reasonable if any new lease is (I) not written on a Pre-
Approved Lease Form or contains terms and conditions materially
different from those contained in the Pre-Approved Lease Form,
(II) with a tenant who is not creditworthy or financially capable
of performing its obligations under such new lease, as reasonably
determined by Buyer, or (III) with a tenant previously occupying
space at one of the Properties and there is available space at
such Property which meets such tenants needs (provided that this
subparagraph (III) shall not apply with respect to LATCO, an
existing tenant at Pennsfield Plaza), and (b) may be withheld in
Buyer's sole and absolute discretion (with respect to any such
action after the expiration of the applicable Additional Property
Inspection Period). So long as Buyer has previously been
provided with the material terms of any proposed new lease
(pursuant to a lease proposal or letter of intent), and detailed
financial statements and credit references reasonably acceptable
to Buyer, Buyer agrees that its consent shall be deemed given to
any proposed new lease if Buyer fails to deliver its approval or
disapproval of any proposed new lease to Seller on or before the
date which is three (3) business days following Buyer's receipt
of (i) a written request for approval, and (ii) the proposed form
of agreement for such new lease (together with any correspondence
or other information in Additional Seller's possession regarding
such proposed tenancy). Seller shall not apply for or otherwise
deal with any governmental authority regarding the development,
entitlement or subdivision of the applicable Additional Real
Property without the prior written consent of Buyer, which may be
withheld in Buyer's sole and absolute discretion, provided that
Additional Seller shall have the right to apply for all necessary
permits for the development of Phase II of Westlake Gardens so
long as Buyer has previously been made aware of said application
and said application is consistent with Buyer's understanding of
the type, size and character of the development of Phase II of
Westlake Gardens. Notwithstanding the foregoing, Additional
Seller has no obligation to incur tenant improvement expenses in
connection with any new leases.
5.3 Service Contracts. Seller shall not enter
into any Service Contracts with respect to the Additional
Properties without Buyer's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed
(provided that no such consent shall be required with respect to
any Service Contracts which Seller agrees to terminate prior to
the applicable Closing Date).
5.4 Compliance with Laws. Seller shall comply
with all Governmental Regulations with respect to the Additional
Properties.
5.5 Actions Pending. Seller shall notify Buyer
promptly of any lawsuits, condemnation proceedings, rezoning, or
other governmental order or action or any threat thereof known to
Seller which might affect the Additional Properties or any
interest of Buyer whatsoever.
5.6 Intentionally Omitted.
5.7 Cooperation with Representatives. Seller
shall cooperate with Buyer and its accountants, counsel and/or
other representatives in providing information and materials
pertaining to the operation and marketing of the Additional
Properties, including access to the Additional Properties.
Without limiting the generality of the foregoing, from and after
the execution and delivery of this Amendment, Seller shall allow
a representative or representatives of Buyer access to the
Additional Properties for the purpose of (a) monitoring the
construction and operation of the Additional Properties and all
improvements thereon, including attending any and all
construction meetings, (b) meeting with and interviewing tenants
or prospective tenants of the Additional Properties, which
tenants shall be made available for such interviewing process,
and (c) performing such investigations and analyses of the
Additional Properties as Buyer may reasonably require.
5.8 No Removal of Personal Property. Seller will
not remove any of the Additional Personal Property unless the
Additional Personal Property so removed is simultaneously
replaced with substantially similar Additional Personal Property
of similar quality or utilities.
5.9 Obtaining Estoppels and Consents. Seller
shall use its best efforts to obtain all written consents from
third parties required or reasonably requested by Buyer or its
accountants, counsel or other representatives in connection with
this Agreement, including, without limitation, the Tenant
Estoppels.
5.10 Service Contracts. Seller shall deliver
notices of termination to any vendors under the Service Contracts
with respect to the Additional Properties which have been
designated in writing by Buyer to be terminated ("Disapproved
Service Contract List") provided that the Disapproved Service
Contract List is delivered by Buyer to Seller on or before the
date which is thirty (30) days prior to the expiration of the
Construction Closing Conditions Period, and provided further that
any such termination shall be conditioned upon and effective only
as of the Hillside Closing or the applicable Westlake Closing, as
applicable. Seller shall, within two (2) days following Buyer's
delivery of the Disapproved Service Contract List, deliver
termination notices to each of the vendors with respect to the
Service Contracts so designated by Buyer in the Disapproved
Service Contract List. Seller shall be solely responsible for
all costs and expenses associated with the termination of any of
the Service Contracts set forth by Buyer in the Disapproved
Service Contract List.
5.11 Audit Rights. At Buyer's request at any
time from and after the date hereof until the date that is one
(1) year after the Hillside Closing Date or applicable Westlake
Closing Date, as applicable, Seller shall, at Buyer's expense,
provide to Buyer's designated independent auditor access to the
books and records of the applicable Additional Property,
regarding the period for which Buyer is required to have audited
financial statements prepared with respect to the applicable
Additional Property as may be required by the Securities and
Exchange Commission, to the extent that such books, records and
related information are in Seller's possession or control and
relate to the period during which Seller held title to the
applicable Additional Property. Further, Seller agrees to
provide to such auditor a representation letter regarding the
books and records of the Additional Property, in substantially
the form of Exhibit "N" attached to the Agreement, in connection
with the normal course of auditing the applicable Additional
Property in accordance with generally accepted auditing
standards.
5.12 Management and Listing Agreements.
Seller agrees to terminate, at Seller's sole cost and expense,
all property management agreements and brokerage leasing
agreements for the Additional Properties effective as of the
Hillside Closing Date or applicable Westlake Closing Date, as
applicable.
5.13 Change in Condition. Seller shall promptly
notify Buyer of any change in any material condition with respect
to the Additional Properties or any event or circumstance which
makes any representation or warranty of Seller under this
Amendment or the Agreement materially untrue or misleading, or
any covenant of Buyer or Seller under this Amendment or the
Agreement incapable of being performed, it being understood that
Seller's obligation to provide notice to Buyer shall in no way
relieve Seller of any liability for a breach by Seller of any of
its representations, warranties or covenants under this Amendment
or the Agreement.
5.14 Loan Fees. As of the Hillside Closing
Date or applicable Westlake Closing Date, as applicable, Seller
is responsible for the payment of any prepayment or other fees
due and owing in connection with or related to the payoff of any
loans or other financing encumbering the respective Additional
Property.
5.15 Non-Disturbance Agreement. Additional
Seller will use its best efforts to obtain from any lenders
encumbering the respective Additional Properties a non-
disturbance agreement reasonably satisfactory to Buyer pursuant
to which, in the event any such lender acquires title to an
Additional Property, such lender agrees to remain bound by the
terms of the Agreement, as amended hereby, as it relates to the
Additional Property(ies) securing the loan(s) made by such lender
to the same extent as if such lender had entered into the
Agreement, as amended, with Buyer.
6. PARAGRAPH 7: TITLE TO REAL PROPERTY. The matters
pertaining to title to the Real Property in Section 7 of the
Agreement shall apply to the matters pertaining to title to each
Additional Property, it being the intent of the parties that
Buyer shall obtain separate title insurance policies for the
Hillside Corporate Center, Phase I of Westlake Gardens and Phase
II of Westlake Gardens in the forms of the Hillside Title Policy
and Westlake Title Policies.
7. PARAGRAPH 8: CONDITIONS PRECEDENT/CONCURRENT TO
CLOSING; CLOSING DATE.
7.1 Section 1. Except as modified or amended
below, all "Buyer's Conditions" set forth in Section 8.1 of the
Agreement shall apply to the closings of the Additional
Properties, and all defined terms in Section 8.1 are hereby
modified or qualified to the extent necessary to carry out the
foregoing intention with respect to the closings of each
Additional Property (i.e., all references in the Agreement to the
"Due Diligence Period" shall instead refer to the "Additional
Property Inspection Period"). In addition, the performance by
Additional Seller of all of its obligations under Section 8 below
shall constitute an additional condition to Buyer's obligations
under the Agreement, as amended.
7.2 Section 8.1.4. The following subparagraphs
are hereby added to the Agreement as new Subsections 8.1.4.11 and
8.1.4.12:
"8.1.4.11 Originals of all Project
Documents.
8.1.4.12 A non-disturbance agreement
from each of the lenders on the respective
Additional Properties in accordance with the
terms of Section 5.15 of the Amendment."
8. CONSTRUCTION OF IMPROVEMENTS ON ADDITIONAL
PROPERTIES. As of the date of this Amendment, Seller has
commenced with the grading necessary for the construction of a
2-story office building at Hillside Corporate Center which shall
contain approximately 60,000 gross square feet and related
facilities (the "Hillside Project") and has commenced with the
construction of one of two separate 3-story office buildings at
Westlake Gardens which shall contain an aggregate of
approximately 99,278 gross square feet and related facilities
(the "Westlake Project"). The Hillside Project and the Westlake
Project shall collectively be referred to herein as the
"Project". Seller covenants and agrees to construct the
applicable Project in accordance with the Approved Plans, subject
to such modifications, alterations or changes that do not
materially affect the value, condition, appearance, aesthetics or
desirability of the applicable Project.
8.1 Seller's Deliveries. In connection with the
construction of the Project, Seller agrees to deliver all of the
following to Buyer for Buyer's review and approval with five (5)
days after the execution of this Amendment by Seller and Buyer:
8.1.1 A detailed construction schedule
for the construction of the Project including any and all tenant
improvements to be completed by Seller on or before the Hillside
Closing Date or applicable Westlake Closing Date, as applicable,
which schedule shall contain the major components of the work
required for the Project, and the time required for each
component of the work, including the scheduled or actual
commencement date of construction of the Project with respect to
each Additional Property, milestone dates and the estimated date
of completion of construction of the Project for each Additional
Property ("Construction Schedule");
8.1.2 An itemized statement of all
estimated construction costs of the Project, including, without
limitation, (i) the total cost to construct all of the
improvements, complete all of the work and obtain or cause to be
obtained all governmental approvals in connection with the
Project therewith, and (ii) the amounts that will be payable by
Seller for (A) contractor, architect, engineering, surveyor,
legal and financial fees associated with the construction of the
Project, (B) permit fees, and (C) all other costs and expenses of
every type whatsoever (whether hard costs or soft costs) in
constructing the Project and completing all work associated with
providing a tenantable Project to Buyer ("Project Budget");
8.1.3 All Plans, Project Documents, the
names and addresses of all contractors (and said contractor's
subcontractors), architects, engineers, consultants and
materialmen engaged or to be engaged by Seller for the
construction of the Project and copies (certified by Additional
Seller to be true and correct) of all Project Documents in effect
as of the date of this Amendment.
8.2 Construction of Improvements; Buyer's
Approval Rights. Additional Seller covenants and agrees to
perform all work in connection with the Project with due
diligence, in a workmanlike manner, and in compliance with the
Approved Plans and all Governmental Regulations. In addition,
all work done in connection with the Project shall be done
according to the standards and upon the terms and conditions set
forth below, except to the extent otherwise provided in the
Approved Plans:
8.2.1 Additional Seller shall proceed
with its work on the Project expeditiously, continuously and
efficiently, and shall use its best efforts to (i) complete the
same, and (ii) obtain certificates of occupancy (or their
equivalent) therefor as soon as possible. Additional Seller
agrees to hold daily construction meetings at the applicable
Additional Property(ies), and to allow Buyer to have a
representative present for all such meetings.
8.2.2 Additional Seller shall have no
authority to materially deviate from the Approved Plans in the
performance and construction of the Project, except as authorized
by Buyer in writing. For the purposes of the foregoing, a
material deviation shall be any deviation from the Approved Plans
which materially affects the value, condition, appearance,
aesthetics or desirability of the Project. Additional Seller
shall furnish to Buyer "as-built" drawings for all work in
connection with the Project within sixty (60) days after
completion and issuance of a certificate of occupancy for each
Project.
8.2.3 In the event that Additional Seller
is not proceeding with the work or other items in connection with
the Project in material compliance with the Approved Plans or
within the time frames set forth in the Construction Schedule,
then, Buyer may give notice thereof to Additional Seller
specifying the disapproved variation from the Approved Plans or
the items which have not been timely performed under the
Construction Schedule ("Noncompliance Notice"). If the variation
is not corrected or the work identified in the Noncompliance
Notice is not completed in accordance with the Approved Plans
within forty-five (45) days after Buyer's delivery of the
Noncompliance Notice (or if the variation or the work identified
in the Noncompliance Notice is not reasonably susceptible of
being cured or corrected, as applicable, within such 45 day
period, and Seller has commenced to cure or correct the same
within such 45 day period and is proceeding toward the completion
of such cure or correction with all due diligence and speed, then
the cure period shall be extended for a reasonable period of
time [not to exceed 90 days following Buyer's delivery of the
Noncompliance Notice]), Buyer shall have the right, but not the
obligation, and without limiting any other right or remedies of
Buyer under this Amendment or the Agreement to either terminate
the Agreement (and this Amendment) with respect to the Project
for which the Noncompliance Notice is given or bring an action
for damages or specific performance against Seller, each in
accordance with and pursuant to Sections 14.1(i) and 14.1(ii) of
the Agreement.
8.2.4 Additional Seller shall provide
Buyer with copies of Additional Seller's draw requests for each
Additional Property within five (5) days following Additional
Seller's delivery of such draw request to the applicable lender.
8.3 Buyer's Approval. Additional Seller shall
submit to Buyer, for Buyer's prior written approval, which shall
not be unreasonably withheld, conditioned or delayed, (i) all
change orders, changes, deviations, amendments or modifications
to the Project Budget, Construction Schedule, Approved Plans and
Project Documents which are material to the Project or which
would otherwise affect the value, condition, appearance,
aesthetics or desirability of the Project, (collectively, the
"Material Change Orders"), (ii) any new Project Documents entered
into after the date of this Amendment, (iii) any and all
contracts, documents or agreements which would burden or encumber
the Additional Properties after the Hillside Closing Date or
applicable Westlake Closing Date, respectively, and (iv) all
finish work with respect to the common areas and other portions
of the applicable Additional Property(ies). The Approved Plans
shall also be revised, and the work shall be changed, all
Seller's sole cost and expense, to incorporate any work required
in the applicable Project by any local governmental field
inspector. Notwithstanding the foregoing, if Buyer has not
notified Additional Seller of Buyer's approval or disapproval of
any Material Change Orders within three (3) business days
following Buyer's receipt of a written request for approval from
Additional Seller, Buyer's approval shall be deemed given.
8.4 Correction of Material Defects. As of the
applicable Closing Date, Additional Seller shall assign to Buyer
all subcontractors', suppliers' and manufacturers' warranties and
guaranties.
8.5 Construction at Phase II of Westlake Gardens.
Additional Seller agrees to commence construction of Phase II of
Westlake Gardens (2555 Townsgate) on a date mutually agreed upon
by and between Buyer and Additional Seller. If Buyer and
Additional Seller are unable to agree upon a date for the
commencement of construction of Phase II of Westlake Gardens,
Additional Seller agrees to commence said construction on the
date selected by Buyer, provided that (i) Buyer notifies
Additional Seller of such date at least sixty (60) days prior to
the selected date, and (ii) in no event shall the date selected
by Buyer be later than the date which is eighteen (18) months
following the closing of the sale of Phase I of Westlake Gardens
to Buyer (the "Deadline Date"). If Buyer and Additional Seller
fail to agree upon a date for the commencement of construction of
Phase II of Westlake Gardens and Buyer's selected date is later
than the Deadline Date, then Buyer and Additional Seller shall
each have the right to terminate the Agreement, as amended
hereby, as it relates only to Phase II of Westlake Gardens and
upon any such termination neither party shall have any further
obligations or liabilities under the Agreement, as amended, with
respect thereto.
9. Additional Property Due Diligence. The following
shall apply to the Additional Property Inspection Period with
respect to the Additional Properties.
9.1 Matters To Be Reviewed. Buyer's obligation
to close the purchase of the Additional Properties and to pay the
Hillside Purchase Price and/or applicable Westlake Purchase
Price, as applicable, shall be subject to and conditioned upon
(i) Buyer's approval of any new leases, and (ii) Buyer's complete
satisfaction with the construction of the applicable Project in
accordance with Paragraph 8 of this Amendment and all of the
following items, each of which Buyer shall have the right to
review and approve or disapprove in Buyer's sole and absolute
discretion.
9.1.1 Title. Buyer will have until 6:00
p.m. (California time) on the later of (i) the date which is
fifteen (15) days following the mutual execution and delivery of
this Amendment, and (ii) the date which is thirty (30) days
following Buyers' receipt of a current preliminary title report
issued by the Title Company relating to the Additional Properties
(and an ALTA survey and all underlying documents relating
thereto) (the "Additional Property Title Review Period") to
examine and approve all matters of title and to notify Seller in
writing of any defects in title, as determined by Seller in its
sole and absolute discretion. If Buyer fails to notify Seller in
writing of any objections to title prior to the expiration of the
Additional Property Title Review Period, title to the applicable
Additional Property shall be conclusively deemed to be approved
by Buyer. If Buyer timely notifies Seller in writing of specific
objections to title prior to the expiration of the Additional
Property Title Review Period, Seller will have two (2) days after
receipt of Buyer's notification of any objection in which to
advise Buyer that:
(a) Seller will remove any objection
able exceptions on or before the Hillside Closing Date or
applicable Westlake Closing Date, as applicable; or
(b) Seller will not cause the
exceptions to be removed.
If Seller advises Buyer that it will not
cause the exceptions to be removed, Buyer will have three (3)
days from its receipt of Seller's notice to elect to:
(i) proceed with the purchase and
acquire the applicable Additional Property subject to such
exceptions, but conditioned upon Seller fulfilling each and every
one of its other obligations hereunder and all of the other
conditions precedent in favor of Buyer having been duly and
timely satisfied; or
(ii) terminate the Agreement (with
respect to the applicable Additional Property only) by written
notice to Seller, in which case all rights and obligations of the
parties with respect thereto shall terminate and be of no further
force or effect, except any rights and obligations which are
expressly stated to survive the termination of the Agreement.
If Buyer does not give Seller written notice
of its election within said three (3) day period, Buyer will be
conclusively deemed to have approved title to the applicable
Additional Property.
If Seller commits to remove any objection to
title and fails to do so by the Hillside Closing Date or
applicable Westlake Closing Date, as applicable, Seller will be
in material default under this Agreement and Buyer may, at
Buyer's election, terminate this Agreement and pursue its reme
dies as set forth in Section 14 of the Agreement.
Notwithstanding anything to the contrary in this
Section 9.1.1, if a new or supplemental title exception or matter
is discovered or identified after the end of the Additional
Property Title Review Period, as it relates to Buyer's review and
approval of such new or supplemental matter, the Additional
Property Title Review Period shall be extended for a period of
five (5) business days following the date of Buyer's receipt of
the new or supplemental title exception or matter and all
underlying documents relating thereto.
9.1.2 Inspections and Studies. Buyer
will have until 6:00 p.m. (California time) on the date which is
the later of (i) fifteen (15) days following the mutual execution
and delivery of this Amendment, and (ii) thirty (30) days
following Buyer's receipt of the Due Diligence Materials (defined
below) (the "Additional Property Inspection Period") to conduct
(as applicable) and review and approve any and all inspections,
investigations, tests, studies (including feasibility studies and
other economic models) and appraisals as Buyer may have elected
to make or obtain with respect to the applicable Additional
Property and/or the operation and financial condition of the
applicable Additional Property, including, without limitation,
calculations of floor areas, financial analysis of the books and
records, environmental inspections and studies, structural and
mechanical investigations, appraisals, and analyses of the
applicable Additional Property's compliance with Governmental
Regulations. Buyer and Buyer's representatives, agents and
designees will have the right to enter the Additional Properties
at all reasonable times, upon reasonable oral notice to Seller to
perform all such investigations of the Additional Properties and
to conduct interviews with (x) tenants of the Additional
Properties, (y) construction management personnel of Seller, and
(z) such other parties as Buyer may deem appropriate in its sole
discretion (provided that no such interview shall occur unless
Buyer has notified Seller of its interest in conducting any such
interview and provided Seller or a Seller representative with an
opportunity to be present for any such interview). Seller will
cooperate with Buyer and its representatives in that regard.
Seller shall deliver to Buyer at Seller's sole cost and expense,
within five (5) days (unless indicated otherwise below) following
the date this Amendment is executed and delivered by Buyer and
Seller, all information in Seller's possession or control which
is reasonably related to the Additional Properties, plus the
following items (collectively, the "Due Diligence Materials"):
(a) To the extent in Seller's
possession, an ALTA "as-built" survey of the Additional Real
Properties prepared by a licensed surveyor;
(b) Any and all Additional Leases and
all modifications or amendments and guaranties relating thereto;
all tenant correspondence and all current financial statements of
tenants to the extent the same are in Seller's possession or
control; all loan documents evidencing, relating to and/or
securing the loans made by Preferred Bank and China Trust Bank
and any other loans secured by one or more of the Additional
Properties; all contracts (including the Service Contracts),
agreements and management agreements (including, without
limitation, parking, elevator, HVAC and landscaping maintenance
contracts); all "operating statements" for the years during which
Seller owned the respective Additional Property(ies); a balance
sheet dated no earlier than December 31, 1996; a year-to-date
income statement for the calendar year 1997, each such statement
to be certified by Seller as being true, correct and complete
reports prepared by Seller in the ordinary course of business;
all "Base Year" information applicable to the Additional Leases;
a cumulative general ledger for year-to-date 1997, reports
(including, to the extent in Seller's possession, all
environmental reports, soils reports, surveys and plans and
specifications affecting or relating to the Additional
Properties, and all modifications or amendments thereto); to the
extent in Seller's possession, all Records and Plans, Warranties,
Licenses and Permits and governmental approvals obtained or held
by Seller and relating to the development, construction,
operation, use or occupancy of any of the Additional Properties.
(c) A current rent roll (to be updated
as of the expiration of the Additional Property Inspection Period
and as of the Hillside Closing and applicable Westlake Closing,
as applicable), prepared and certified by Seller as being true,
correct and complete on a form reasonably acceptable to Buyer
(the "Rent Roll").
(d) Reports of insurance carriers
insuring the Additional Properties during the period of Seller's
ownership of the Additional Properties and each portion thereof
respecting the claims history of the Additional Properties;
insurance policies or certificates of Seller and tenants
respecting the Additional Properties; to the extent in Seller's
possession, all correspondence, reports, and notices pertaining
to the existence of toxic or Hazardous Materials and/or waste at
the Additional Properties; all permits, reports, certificates and
notices pertaining to the existence, removal and/or decommission
of any and all storage tanks located on, at or underneath the
Additional Properties; to the extent in Seller's possession, all
certificates of occupancy; to the extent in Seller's possession,
all maps; to the extent in Seller's possession, all brokerage and
commission agreements; all agreements entered by Seller and
Seller's affiliates affecting the Additional Properties and/or
income and cash flow to be received from the Additional
Properties that will survive the Hillside Closing or applicable
Westlake Closing, as applicable; tax bills and assessments for
the current year and the two (2) year period immediately
preceding the current year; copies of the most recently available
utility bills and similar records respecting the Additional
Properties; any and all information in Seller's possession
respecting the creditworthiness of the tenants under the
Additional Leases at the Additional Properties; to the extent in
Seller's possession, all written reports respecting incidents of
theft, burglary or crimes attempted or committed at, on or to the
Additional Properties or other such incidents which are the
subject of litigation; and such other information reasonably
requested by Buyer of Seller in writing during the Additional
Property Inspection Period.
9.1.3 Indemnity. Buyer agrees to
indemnify and hold Seller harmless from any and all injuries,
losses, liens, claims, judgments, obligations, liabilities,
costs, expenses or damages (including reasonable attorneys' fees
and court costs) sustained by Seller to the extent same results
from or arises out of any inspections by Buyer or any of its
representatives pursuant to Section 9.1.2 above.
9.2 Notice of Objections.
9.2.1 If Buyer fails to notify Seller in
writing of any objections to the items set forth in Section 9.1.2
on or before the expiration of the Additional Property Inspection
Period with respect to the applicable Additional Property, Buyer
shall be conclusively deemed to have approved such items.
9.2.2 If Buyer notifies Seller in writing
of any objections to the condition of one or both of the
Additional Properties or any other matters relating to one or
both of the Additional Properties and/or the operation or
financial condition of one or both of the Additional Properties
as set forth in Section 9.1.2 on or before the expiration of the
Additional Property Inspection Period, the parties will have
three (3) business days to agree upon a resolution of the
objection(s). If the parties cannot agree within the three (3)
business day period, then Buyer may terminate the Agreement (with
respect to the applicable Additional Property only) by delivering
written notice to Additional Seller (which notice must be given
within two (2) business days after the expiration of the three
(3) business day period), in which event all rights and
obligations of the parties existing under the Agreement (with
respect to the applicable Additional Property only) shall
terminate and be of no further force or effect, except any rights
and obligations which are expressly stated to survive the
termination of this Agreement. The Hillside Closing Date and/or
applicable Westlake Closing Date shall be appropriately extended
by the time periods set forth herein for the parties to take the
actions described above.
10 PARAGRAPH 10; PRORATIONS. Except as set forth
below, the prorations set forth in Section 10 of the Agreement
shall apply to the closings of the Additional Properties, except
that defined terms used therein shall be modified to the extent
necessary to carry out the foregoing intention with respect to
the closings of each of the Additional Properties.
11. Miscellaneous.
11.1 No Further Modification. Except as
expressly amended hereby, the Agreement shall remain unchanged
and continue in full force and effect.
11.2 Counterparts. This Amendment may be
executed in any number of counterparts, each of which shall be
deemed an original, but all of which, when taken together, shall
constitute one and the same instrument.
11.3 Memorandum of Amendment. Concurrently
with the mutual execution and delivery of this Amendment, Seller
and Buyer shall execute (with notary attestation) and deliver to
each other a Memorandum of Amendment in the form attached hereto
as Exhibit "P". Buyer shall have the right to record the
Memorandum of Amendment in the Official Records of the
county(ies) in which Hillside Corporate Center and Westlake
Gardens are located.
IN WITNESS WHEREOF, Seller and Buyer have executed this
Amendment as of the date first set forth above.
"SELLER"
/s/ Moshe Silagi
MOSHE SILAGI, Co-Trustee of the
Silagi Family Trust
/s/ Andrea Silagi
ANDREA SILAGI, Co-Trustee of the
Silagi Family Trust
CONEJO BUSINESS PARK, LLC, a
California limited liability
company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
MARIN CORPORATE CENTER, LLC, a
California limited liability
company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
EVERGREEN PLAZA, LLC, a California
limited liability company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
HILLSIDE CORPORATE CENTER, LLC, a
California limited liability
company
By:/s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
[Signatures continued from Page 21]
WESTLAKE GARDENS, LLC, a California
limited liability company
By: /s/ Moshe Silagi
Name: Moshe Silagi
Title: General Member
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC., a Maryland
corporation, its general partner
By:/s/ Victor J. Coleman
Victor J. Coleman
Its: President and COO
