<PAGE> 1
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) JANUARY 7, 1998
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
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 30, 1998, Arden Realty, Inc. (collectively with its subsidiaries, the
"Company") completed a series of transactions to purchase six suburban office
properties (the "Acquired Properties") totaling 1,014,614 rentable square feet.
All the properties were purchased from unaffiliated entities.
9201 Sunset in West Hollywood, California contains 158,585 rentable
square feet. The purchase price for the property was approximately $28,800,000
which was based on arm's-length negotiations. The property is presently 63.8%
occupied at average rents of $31.64 per square foot. The property was purchased
from Beverly Hills Medical Office Partners L.P., a Delaware limited partnership.
Activity Business Center in San Diego, California contains 167,045 rentable
square feet. The purchase price for the property was approximately $14,900,000
which was based on arm's-length negotiations. The property is presently 97.7%
occupied at average rents of $10.36 per square foot. The property was purchased
from Activity Business Associates, LLC, a California limited liability company.
Sunset Pointe Plaza in Newhall, California contains 58,105 rentable square feet.
The purchase price for the property was approximately $8,475,000 which was based
on arm's-length negotiations. The property is presently 95.7% occupied at
average rents of $21.06 per square foot. The property was purchased from SP
Associates, Ltd., a California limited partnership.
9100 Wilshire in Beverly Hills, California contains 326,227 rentable square
feet. The purchase price for the property was approximately $65,100,000 which
was based on arm's-length negotiations. The property is presently 84.9% occupied
at average rents of $19.10 per square foot. The property was purchased from
Matterhorn USA, Inc., a Delaware corporation.
Westlake Gardens in Westlake Village, California contains 49,639 rentable square
feet. The purchase price for the property was approximately $7,300,000 which was
based on arm's-length negotiations. The property is presently 22.1% occupied at
average rents of $23.85 per square foot. The property 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, Evergreen Plaza LLC, a
California limited partnership, Hillside Corporate Center, LLC, a California
limited liability company, Westlake Gardens, LLC, a California limited liability
company.
1100 Glendon in Westwood, California contains 282,013 rentable square feet. The
purchase price for the property was approximately $28,900,000 which was based on
arm's-length negotiations. The property is presently 42.5% occupied at average
rents of $24.81 per square foot. The property was purchased from Westwood
Center, a California limited partnership.
To finance these acquisitions the Company used approximately $8,781,000 of
working capital, borrowed $61,024,000 on its line of credit from a group of
banks led by Wells Fargo Bank, borrowed $60,000,000 from an affiliate of Lehman
Brothers and assumed two mortgage loans payable of approximately $8,244,000 and
$15,426,000 secured by Activity Business Center and 1100 Glendon, respectively.
The $60,000,000 mortgage note payable is secured by three other of the Company's
properties.
<PAGE> 3
Inclusive of these acquisitions, the Company's portfolio consists of
77 suburban office properties comprising 11,182,376 rentable square feet and
16 apartment units.
ITEM 5. OTHER EVENTS
On January 12, 1998, the Company filed a Form S-3 Registration Statement (the
"Registration Statement") with the Securities Exchange Commission to offer in
one or more series, shares of its $.01 par value common stock with an aggregate
public offering price of up to $1,000,000,000. The Registration Statement was
declared effective on January 21, 1998 and on February 2, 1998, the Company
filed a supplement to this Registration Statement, offering 17,000,000 shares of
its common stock (the "Offering").
The Company has entered into a contract to acquire a portfolio of 50 primarily
office and R&D/industrial properties (the "LBA Portfolio"), aggregating
approximately 5.2 million rentable square feet for a purchase price of
approximately $614.5 million, which was based on arm's-length negotiations. In
connection with the acquisition of the LBA Portfolio, the Company will also
issue warrants to purchase 2.5 million shares of the Company's common stock, at
a price of $29.59 per share, subject to adjustment. The LBA Portfolio consists
of 34 office properties containing approximately 3.6 million rentable square
feet, 15 R&D/industrial properties containing approximately 1.5 million rentable
square feet, and one retail property containing 144,225 rentable square feet,
all located in Southern California. The Company intends to fund this acquisition
in part with the proceeds from the Offering.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF PROPERTIES ACQUIRED.
ACQUIRED PROPERTIES
9201 SUNSET
Page
----
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-1
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-2
Notes to Statement of Revenue and Certain Expenses F-3
ACTIVITY BUSINESS CENTER
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-5
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-6
Notes to Statement of Revenue and Certain Expenses F-7
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C>
9100 WILSHIRE
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-9
Statement of Revenue and Certain Expenses for the Year
Ended December 31, 1996 F-10
Notes to Statement of Revenue and Certain Expenses F-11
1100 GLENDON
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-13
Statement of Revenue and Certain Expenses for the Year
Ended December 31, 1996 F-14
Notes to Statement of Revenue and Certain Expenses F-15
LBA PORTFOLIO
1996 LBA OWNED PORTFOLIO
Combined Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-17
Combined Statement of Revenues and Certain Expenses
for the Year Ended December 31, 1996 F-18
Notes to Combined Statement of Revenue and Certain Expenses F-19
1996 CIGNA ACQUIRED PROPERTIES
Combined Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-21
Combined Statement of Revenue and Certain Expenses
for the Year Ended December 31, 1996 F-22
Notes to Combined Statement of Revenue and Certain Expenses F-23
1997 METLIFE ACQUIRED PROPERTIES
Combined Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-25
Combined Statement of Revenue and Certain Expenses
for the Year Ended December 31, 1996 F-26
Notes to Combined Statement of Revenue and Certain Expenses F-27
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
ONTARIO AIRPORT COMMERCE CENTER AND HUNTER BUSINESS PARK
Combined Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-29
Combined Statement of Revenue and Certain Expenses
for the Year Ended December 31, 1996 F-30
Notes to Combined Statement of Revenue and Certain Expenses F-31
SORRENTO VALLEY SCIENCE PARK
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-33
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-34
Notes to Statement of Revenue and Certain Expenses F-35
HDS PLAZA
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-37
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-38
Notes to Statement of Revenue and Certain Expenses F-39
FOUNTAIN VALLEY PLAZA
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-41
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-42
Notes to Statement of Revenue and Certain Expenses F-43
HAVENGATE CENTER
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-45
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-46
Notes to Statement of Revenue and Certain Expenses F-47
VON KARMAN CORPORATE CENTER
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-49
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-50
Notes to Statement of Revenue and Certain Expenses F-51
CENTRELAKE PLAZA
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-53
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-54
Notes to Statement of Revenue and Certain Expenses F-55
150 EAST COLORADO
Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-57
Statement of Revenue and Certain Expenses for the Year Ended
December 31, 1996 F-58
Notes to Statement of Revenue and Certain Expenses F-59
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
SDK PROPERTIES
Combined Statement of Revenue and Certain Expenses:
Report of Independent Auditors F-61
Combined Statement of Revenue and Certain Expenses
for the Year Ended December 31, 1996 F-62
Notes to Combined Statement of Revenue and Certain Expenses F-63
</TABLE>
(b) PRO FORMA FINANCIAL INFORMATION.
<TABLE>
<CAPTION>
Page
----
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997 (Unaudited) F-66
Pro Forma Condensed Consolidated Statements of Operations
for the nine months ended September 30, 1997 (Unaudited) F-67
Pro Forma Condensed Consolidated Statement of Operations
for the year ended December 31, 1996 (Unaudited) F-68
Notes to the Pro Forma Condensed Consolidated Financial Statements
(Unaudited) F-69
</TABLE>
Exhibits
<PAGE> 7
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of 9201 Sunset for the year ended December 31, 1996. This statement of revenue
and certain expenses is the responsibility of the management of 9201 Sunset. Our
responsibility is to express an opinion on the statement of revenue and certain
expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of 9201 Sunset for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Los Angeles, California
January 21, 1998
F-1
<PAGE> 8
9201 SUNSET
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental........................................................ $3,357
Tenant reimbursements......................................... 20
Parking, net of expenses...................................... 661
Other......................................................... 5
------
Total revenue................................................ 4,043
------
Certain Expenses:
Property operating and maintenance............................ 769
Real estate taxes............................................. 351
Insurance..................................................... 212
------
Total certain expenses....................................... 1,332
------
Excess of revenue over certain expenses.................... $2,711
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-2
<PAGE> 9
9201 SUNSET
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of 9201 Sunset, an office building located in West Hollywood,
California with approximately 158,585 of rentable square feet (the "Property")
which was acquired for $28,800,000 on December 31, 1997 by Arden Realty, Inc.
(the "Company"), from a nonaffiliated third party.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations for
the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
F-3
<PAGE> 10
9201 SUNSET
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997................................................ $ 2,735
1998................................................ 2,576
1999................................................ 1,935
2000................................................ 1,408
2001................................................ 1,026
Thereafter.......................................... 1,001
-------
$10,681
=======
</TABLE>
Office space in the Property is generally leased to tenants under lease terms
which provide for the tenants to pay increases in operating expenses in excess
of specified amounts. The above future minimum lease payments do not include
such payments for tenant reimbursements of operating expenses.
F-4
<PAGE> 11
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses of
Activity Business Center for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of management of Activity
Business Center. Our responsibility is to express an opinion on the statement of
revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of Activity Business Center for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Los Angeles, California
October 27, 1997
F-5
<PAGE> 12
ACTIVITY BUSINESS CENTER
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental......................................................... $1,489
Tenant reimbursements.......................................... 59
------
Total revenue................................................. 1,548
------
Certain Expenses:
Property operating and maintenance............................. 119
Real estate taxes.............................................. 110
Insurance...................................................... 24
------
Total certain expenses........................................ 253
------
Excess of revenue over certain expenses..................... $1,295
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-6
<PAGE> 13
ACTIVITY BUSINESS CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of Activity Business Center, an office building located in San Diego,
California with approximately 167,045 of rentable square feet (the "Property")
which was acquired for $14,900,000 on January 5, 1998 by Arden Realty, Inc. (the
"Company"), from a nonaffiliated third party.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations for
the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
F-7
<PAGE> 14
ACTIVITY BUSINESS CENTER
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997 ..................................................... $1,512
1998 ..................................................... 1,614
1999 ..................................................... 1,422
2000 ..................................................... 1,137
2001 ..................................................... 672
Thereafter ............................................... 730
------
$7,087
======
</TABLE>
Office space in the Property is generally leased to tenants under lease
terms which provide for the tenants to pay increases in operating expenses in
excess of specified amounts. The above future minimum lease payments do not
include such payments for tenant reimbursements of operating expenses.
At December 31, 1996, two of the Property's tenants accounted for
approximately 42% of the Property's aggregate annualized base rent.
F-8
<PAGE> 15
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of 9100 Wilshire for the year ended December 31, 1996. This statement of revenue
and certain expenses is the responsibility of management of 9100 Wilshire. Our
responsibility is to express an opinion on the statement of revenue and certain
expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of 9100 Wilshire for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Los Angeles, California
January 21, 1998
F-9
<PAGE> 16
9100 WILSHIRE
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental ........................................................... $4,690
Tenant reimbursements ............................................ 112
Parking, net of expenses ......................................... 813
------
Total revenue ................................................... 5,615
------
Certain Expenses:
Property operating and maintenance ............................... 1,747
Real estate taxes ................................................ 487
Insurance ........................................................ 432
------
Total certain expenses .......................................... 2,666
------
Excess of revenue over certain expenses ....................... $2,949
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-10
<PAGE> 17
9100 WILSHIRE
NOTES TO STATEMENT OF REVEUE AND CERTAIN EXPENSES
For the Year Ended December 31 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of 9100 Wilshire, an office building located in Beverly Hills,
California with approximately 326,227 rentable square feet (the "Property")
which was acquired by Arden Realty, Inc. (the "Company"), on January 21, 1998
from a nonaffiliated third party for $65,100,000.
Basis of Presentation
The accompanying statement has been prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations for
the period presented as certain expenses that may not be comparable to the
expenses expected to be incurred by the Company in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
F-11
<PAGE> 18
9100 WILSHIRE
NOTES TO STATEMENT OF REVEUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing
operating leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997................................................. $ 3,894
1998................................................. 4,608
1999................................................. 4,240
2000................................................. 3,492
2001................................................. 2,848
Thereafter........................................... 11,574
-------
$30,656
=======
</TABLE>
Office space in the Property is generally leased to tenants under lease
terms which provide for the tenants to pay increases in operating expenses in
excess of specified amounts. The above future minimum lease payments do not
include such payments for tenant reimbursements of operating expenses. At
December 31, 1996, two of the Property's tenants accounted for approximately 28%
of the Property's aggregate annualized base rent.
3. Rental Revenue
As a tenant in the Property, the Company paid $156,000 in rental
payments for the year ended December 31, 1996.
F-12
<PAGE> 19
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain
expenses of 1100 Glendon for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the owners of 1100
Glendon. Our responsibility is to express an opinion on the statement of revenue
and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission. Certain expenses (described in Note 1) that would not
be comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of 1100 Glendon for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Los Angeles, California
May 30, 1997
F-13
<PAGE> 20
1100 GLENDON
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental ......................................................... $3,421
Gain on lease termination ...................................... 308
Parking, net of expenses ....................................... 342
Other .......................................................... 42
------
Total revenue ................................................. 4,113
------
Certain Expenses:
Property operating and maintenance.............................. 1,279
Real estate taxes............................................... 169
Insurance....................................................... 160
------
Total certain expenses......................................... 1,608
------
Excess of revenue over certain expenses...................... $2,505
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-14
<PAGE> 21
1100 GLENDON
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1997
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses include the
operations of 1100 Glendon, an office building located in Westwood, California
with approximately 282,013 of rentable square feet (the "Property") which was
acquired by Arden Realty, Inc. (the "Company"), on January 30, 1998 from a
nonaffiliated third party for $28,900,000.
Basis of Presentation
The accompanying statement has been prepared to comply with rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual
operations for the period presented as certain expenses that may not be
comparable to the expenses expected to be incurred by the Company in the future
operations of the Property have been excluded. Excluded expenses consist of
interest, depreciation and amortization and property general and administrative
costs not directly comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of
the related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-15
<PAGE> 22
1100 GLENDON
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1997
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing
operating leases as of December 31, 1996, are as follows (in thousands):
<TABLE>
<S> <C>
1997 ........................................... $1,853
1998 ........................................... 909
1999 ........................................... 499
2000 ........................................... 294
2001 ........................................... 192
Thereafter ..................................... 286
------
$4,033
======
</TABLE>
Office space in the Property is generally leased to tenants under lease
terms which provide for the tenants to pay increases in operating expenses in
excess of specified amounts. The above future minimum lease payments do not
include such payments for tenant reimbursements of operating expenses.
F-16
<PAGE> 23
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the 1996 LBA Owned Portfolio for the year ended December 31, 1996.
This combined statement of revenue and certain expenses is the responsibility of
the management of the 1996 LBA Owned Portfolio. Our responsibility is to express
an opinion on the combined statement of revenue and certain expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. Certain expenses (described in Note 1) that
would not be comparable to those resulting from the proposed future operations
of the properties are excluded and the statement is not intended to be a
complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the revenue and certain expenses, as
defined above, of the 1996 LBA Owned Portfolio for the year ended December 31,
1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
September 10, 1997
F-17
<PAGE> 24
1996 LBA OWNED PORTFOLIO
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental........................................................... $ 9,952
Tenant reimbursements............................................ 1,092
Parking, net of expenses......................................... 186
Other............................................................ 478
--------
Total revenue................................................ 11,708
--------
Certain Expenses:
Property operating and maintenance............................... 3,552
Real estate taxes................................................ 959
Insurance........................................................ 523
--------
Total certain expenses....................................... 5,034
--------
Excess of revenue over certain expenses.................... $ 6,674
========
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-18
<PAGE> 25
1996 LBA OWNED PORTFOLIO
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying combined statement of revenue and certain expenses includes
the combined operations of certain commercial real estate properties located in
Southern California (the "Properties"), that were acquired in 1995 and 1996 by a
group of affiliated owners (the "LBA Owners"). The Properties are part of the
pending acquisition of the LBA Portfolio by Arden Realty, Inc. ("Arden"). The
Properties are as follows:
<TABLE>
<CAPTION>
Southern Approximate
California Rentable
Property Name Property Type Location Square Footage
------------- ------------- ------------------- --------------
<S> <C> <C> <C>
5602 Bolsa..................... Industrial/R&D... Huntington Beach............ 27,731
5672 Bolsa..................... Industrial/R&D... Huntington Beach............ 11,968
5632 Bolsa..................... Industrial/R&D... Huntington Beach............ 21,568
Huntington Beach Plaza I & II.. Industrial/R&D... Huntington Beach............ 52,186
10251 Vista Sorrento........... Office........... San Diego................... 69,386
Tower Plaza I.................. Office........... Temecula.................... 72,350
Tower Plaza II................. Office........... Temecula.................... 19,301
Tower Plaza III................ Office........... Temecula.................... 12,483
Highlands I.................... Office........... Temecula.................... 26,856
Highlands II................... Office........... Temecula.................... 41,210
600 Corporate Pointe........... Office........... Culver City................. 273,339
5161 Lankershim................ Office........... Los Angeles................. 178,317
Tower Plaza Retail............. Retail........... Temecula.................... 144,225
-------
950,920
=======
</TABLE>
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission. The accompanying
statement was prepared on a combined basis because the Properties will be
acquired from a related group of sellers and the sellers owned each of the
Properties for substantially all of 1996. There are no interproperty accounts to
be eliminated.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Properties have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs not
directly comparable to the future operations of the Properties.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
F-19
<PAGE> 26
1996 LBA OWNED PORTFOLIO
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997......................................... $10,795
1998......................................... 9,442
1999......................................... 7,664
2000......................................... 7,082
2001......................................... 6,444
Thereafter................................... 16,196
-------
$57,623
=======
</TABLE>
The Properties are generally leased to tenants under terms which provide for
the tenants to pay for increases in operating expenses in excess of specified
amounts. The above future minimum lease payments do not include such payments
for tenant reimbursements of operating expenses.
F-20
<PAGE> 27
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the 1996 CIGNA Acquired Properties for the year ended December 31,
1996. This combined statement of revenue and certain expenses is the
responsibility of the management of the 1996 CIGNA Acquired Properties. Our
responsibility is to express an opinion on the combined statement of revenue and
certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statements of revenue and
certain expenses are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statement. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. Certain expenses (described in Note 1) that
would not be comparable to those resulting from the proposed future operations
of the properties are excluded and the statement is not intended to be a
complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
present fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of the 1996 CIGNA Acquired Properties for the year
ended December 31, 1996, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-21
<PAGE> 28
1996 CIGNA ACQUIRED PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental........................................................... $11,181
Tenant reimbursements............................................ 289
Parking, net of expenses......................................... 1
Other............................................................ 36
-------
Total revenue................................................ 11,507
-------
Certain Expenses:
Property operating and maintenance............................... 3,359
Real estate taxes................................................ 836
Insurance........................................................ 545
-------
Total certain expenses....................................... 4,740
-------
Excess of revenue over certain expenses.................. $ 6,767
=======
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-22
<PAGE> 29
1996 CIGNA ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying combined statement of revenue and certain expenses includes
the combined operations of eight office properties located in Southern
California (the "Properties") that were acquired in 1996 by a group of
affiliated owners (the "LBA Owners"). The Properties are part of the pending
acquisition of the LBA Portfolio by Arden Realty, Inc. ("Arden"). The Properties
are as follows:
<TABLE>
<CAPTION>
Southern Approximate
California Rentable
Property Name Location Square Footage
------------- -------- --------------
<S> <C> <C>
1501 Hughes Way.................. Long Beach......... 77,060
3901 Via Oro..................... Long Beach......... 53,195
Camarillo Business Center........ Camarillo......... 154,216
1503 South Coast................. Costa Mesa......... 60,605
625 The City..................... Orange............ 139,806
Orange Financial Center.......... Orange............ 305,439
3300 Irvine Avenue............... Newport Beach...... 74,224
Yorba Linda Business Park........ Yorba Linda....... 167,142
---------
1,031,687
=========
</TABLE>
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission. The accompanying
statement was prepared on a combined basis because the Properties were acquired
from a related group of sellers which are also affiliates of the owners of the
LBA Portfolio. The Properties include the revenue and expense for both the
period prior to the acquisition by the owners of the LBA Portfolio and the
period subsequent to the acquisition date through December 31, 1996. There are
no interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the periods presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Properties have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs not
directly comparable to the future operations of the Properties.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
F-23
<PAGE> 30
1996 CIGNA ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997............................................ $19,708
1998............................................ 16,321
1999............................................ 10,821
2000............................................ 8,045
2001............................................ 4,742
Thereafter...................................... 6,175
-------
$65,812
=======
</TABLE>
The Properties are generally leased to tenants under lease terms which
provide for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-24
<PAGE> 31
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the 1997 MetLife Acquired Properties for the year ended December 31,
1996. This combined statement of revenue and certain expenses is the
responsibility of the management of the 1997 MetLife Acquired Properties. Our
responsibility is to express an opinion on the combined statement of revenue and
certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statement of revenue and certain
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. Certain expenses (described in Note 1) that
would not be comparable to those resulting from the proposed future operations
of the properties are excluded and the statement is not intended to be a
complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses present
fairly, in all material respects, the combined revenue and certain expenses, as
defined above, of the 1997 MetLife Acquired Properties for the year ended
December 31, 1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-25
<PAGE> 32
1997 METLIFE ACQUIRED PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental........................................................... $5,138
Tenant reimbursements............................................ 1,345
Other............................................................ 19
------
Total revenue................................................ 6,502
------
Certain Expenses:
Property operating and maintenance............................... 938
Real estate taxes................................................ 365
Insurance........................................................ 164
------
Total certain expenses....................................... 1,467
------
Excess of revenue over certain expenses.................. $5,035
======
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-26
<PAGE> 33
1997 METLIFE ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying combined statement of revenue and certain expenses includes
the combined operations of three commercial real estate properties located in
Southern California (the "Properties") that were acquired in 1997 by a group of
affiliated owners (the "LBA Owners"). The Properties are part of the pending
acquisition of the LBA Portfolio by Arden Realty, Inc. ("Arden"). The Properties
are as follows:
<TABLE>
<CAPTION>
Approximate
Southern Rentable
California Square
Property Name Property Type Location Footage
------------- ------------- -------- -------
<S> <C> <C> <C>
Savi Tech Center .................... Industrial/R&D... Yorba Linda .. 341,446
Skypark Office Plaza ................ Office .......... San Diego .... 202,164
Governor Park Plaza ................. Office .......... San Diego .... 104,065
-------
647,675
=======
</TABLE>
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission. The accompanying
statement was prepared on a combined basis because the Properties were acquired
from a related group of sellers which are also affiliates of the owners of the
LBA Portfolio. There are no interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Properties have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs not
directly comparable to the future operations of the Properties.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-27
<PAGE> 34
1997 METLIFE ACQUIRED PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997............................................... $ 5,005
1998............................................... 4,807
1999............................................... 3,516
2000............................................... 2,647
2001............................................... 2,597
Thereafter......................................... 7,102
-------
$25,674
=======
</TABLE>
The Properties are generally leased to tenants under lease terms which
provide for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-28
<PAGE> 35
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the Ontario Airport Commerce Center and the Hunter Business Park for
the year ended December 31, 1996. This combined statement of revenue and certain
expenses is the responsibility of the management of the Ontario Airport Commerce
Center and Hunter Business Park. Our responsibility is to express an opinion on
the combined statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statements of revenue and
certain expenses are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statement. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. Certain expenses (described in Note 1) that
would not be comparable to those resulting from the proposed future operations
of the properties are excluded and the statement is not intended to be a
complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
present fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of the Ontario Airport Commerce Center and Hunter
Business Park for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-29
<PAGE> 36
ONTARIO AIRPORT COMMERCE CENTER AND HUNTER BUSINESS PARK
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental........................................................... $1,707
Tenant reimbursements............................................ 6
Other............................................................ 25
------
Total revenue................................................ 1,738
------
Certain Expenses:
Property operating and maintenance............................... 279
Real estate taxes................................................ 129
Insurance........................................................ 22
------
Total certain expenses....................................... 430
------
Excess of revenue over certain expenses.................... $1,308
======
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-30
<PAGE> 37
ONTARIO AIRPORT COMMERCE CENTER AND HUNTER BUSINESS PARK
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying combined statement of revenue and certain expenses includes
the combined operations of two office properties located in Southern California
(the "Properties") that were acquired in 1997 by a group of affiliated owners
(the "LBA Owners"). Both of the properties were acquired from a single seller.
The Properties are part of the pending acquisition of the LBA Portfolio by Arden
Realty, Inc. ("Arden").
Information on Ontario Airport Commerce Center and Hunter Business Park is
as follows:
<TABLE>
<CAPTION>
Southern Approximate
California Rentable
Property Name Location Square Footage
- ------------- -------- --------------
<S> <C> <C>
Ontario Airport Commerce Center................ Ontario ..... 213,127
Hunter Business Park .......................... Ontario ..... 106,782
-------
319,909
=======
</TABLE>
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission. The accompanying
statement was prepared on a combined basis because the Properties were acquired
from a single seller. There are no interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Properties have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs not
directly comparable to the future operations of the Properties.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-31
<PAGE> 38
ONTARIO AIRPORT COMMERCE CENTER AND HUNTER BUSINESS PARK
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997............................................... $1,133
1998............................................... 730
1999............................................... 540
2000............................................... 388
2001............................................... 184
Thereafter......................................... 181
------
$3,156
======
</TABLE>
The Properties are generally leased to tenants under lease terms which
provide for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-32
<PAGE> 39
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of Sorrento Valley Science Park for the year ended December 31, 1996. This
statement of revenue and certain expenses is the responsibility of the
management of Sorrento Valley Science Park. Our responsibility is to express an
opinion on the statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of Sorrento Valley Science Park for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-33
<PAGE> 40
SORRENTO VALLEY SCIENCE PARK
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental............................................................ $1,567
Tenant reimbursements............................................. 16
Other............................................................. 3
------
Total revenue................................................. 1,586
------
Certain Expenses
Property operating and maintenance................................ 261
Real estate taxes................................................. 132
Insurance......................................................... 15
------
Total certain expenses........................................ 408
------
Excess of revenue over certain expenses................... $1,178
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-34
<PAGE> 41
SORRENTO VALLEY SCIENCE PARK
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of Sorrento Valley Science Park, an office building located in San
Diego, California with approximately 181,207 of rentable square feet (the
"Property") that was acquired on February 20, 1997 by a group of affiliated
owners (the "LBA Owners"). The Property is part of the pending acquisition of
the LBA Portfolio by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-35
<PAGE> 42
SORRENTO VALLEY SCIENCE PARK
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997.................................................... $1,626
1998.................................................... 1,687
1999.................................................... 1,689
2000.................................................... 1,664
2001.................................................... 683
Thereafter.............................................. 446
------
$7,795
======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-36
<PAGE> 43
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of HDS Plaza for the year ended December 31, 1996. This statement of revenue and
certain expenses is the responsibility of the management of HDS Plaza. Our
responsibility is to express an opinion on the statement of revenue and certain
expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of HDS Plaza for the year ended December 31, 1996, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-37
<PAGE> 44
HDS PLAZA
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental.......................................................... $1,410
Tenant reimbursements........................................... 50
Other........................................................... 4
------
Total revenue............................................... 1,464
------
Certain Expenses:
Property operating and maintenance.............................. 449
Real estate taxes............................................... 80
Insurance....................................................... 23
------
Total certain expenses...................................... 552
------
Excess of revenue over certain expenses................. $ 912
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-38
<PAGE> 45
HDS PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of HDS Plaza, an office building located in San Bernardino,
California with approximately 104,178 of rentable square feet (the "Property")
that was acquired on June 11, 1997 by a group of affiliated owners (the "LBA
Owners"). The Property is part of the pending acquisition of the LBA Portfolio
by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-39
<PAGE> 46
HDS PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997................................................. $1,218
1998................................................. 1,180
1999................................................. 919
2000................................................. 865
2001................................................. 891
Thereafter........................................... 2,837
------
$7,910
======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-40
<PAGE> 47
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of Fountain Valley Plaza for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the management of Fountain
Valley Plaza. Our responsibility is to express an opinion on the statement of
revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of Fountain Valley Plaza for the year ended December 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-41
<PAGE> 48
FOUNTAIN VALLEY PLAZA
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental......................................................... $1,429
Other.......................................................... 36
------
Total revenue.............................................. 1,465
------
Certain Expenses:
Property operating and maintenance............................. 488
Real estate taxes.............................................. 84
Insurance...................................................... 41
------
Total certain expenses..................................... 613
------
Excess of revenue over certain expenses................ $ 852
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-42
<PAGE> 49
FOUNTAIN VALLEY PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of Fountain Valley Plaza, an office building located in Fountain
Valley, California with approximately 107,252 of rentable square feet (the
"Property") which was acquired on May 28, 1997 by a group of affiliated owners
(the "LBA Owners"). The Property is part of the pending acquisition of the
LBA Portfolio by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement is prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-43
<PAGE> 50
FOUNTAIN VALLEY PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997.............................................. $1,408
1998.............................................. 1,359
1999.............................................. 1,359
2000.............................................. 976
2001.............................................. 915
Thereafter........................................ 1,966
------
$7,983
======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-44
<PAGE> 51
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of Havengate Center for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the management of
Havengate Center. Our responsibility is to express an opinion on the statement
of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of Havengate Center for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-45
<PAGE> 52
HAVENGATE CENTER
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental....................................................... $1,070
Tenant reimbursements........................................ 4
Other........................................................ 2
------
Total revenue............................................ 1,076
------
Certain Expenses:
Property operating and maintenance........................... 238
Real estate taxes............................................ 46
Insurance.................................................... 44
------
Total certain expenses................................... 328
------
Excess of revenue over certain expenses.............. $ 748
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-46
<PAGE> 53
HAVENGATE CENTER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of Havengate Center, an office building located in Rancho Cucamonga,
California with approximately 80,557 of rentable square feet (the "Property")
that was acquired on August 28, 1997 by a group of affiliated owners (the "LBA
Owners"). The Property is part of the pending acquisition of the LBA Portfolio
by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-47
<PAGE> 54
HAVENGATE CENTER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997.............................................. $ 699
1998.............................................. 874
1999.............................................. 646
2000.............................................. 226
2001.............................................. 191
Thereafter........................................ 933
------
$3,569
======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-48
<PAGE> 55
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of Von Karman Corporate Center for the year ended December 31, 1996. This
statement of revenue and certain expenses is the responsibility of the
management of Von Karman Corporate Center. Our responsibility is to express an
opinion on the statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of the Von Karman Corporate Center for the year ended December 31, 1996,
in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-49
<PAGE> 56
VON KARMAN CORPORATE CENTER
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental................................................... $4,364
Tenant reimbursements.................................... 345
Other.................................................... 33
------
Total revenue........................................ 4,742
------
Certain Expenses:
Property operating and maintenance....................... 1,443
Real estate taxes........................................ 294
Insurance................................................ 113
------
Total certain expenses............................... 1,850
------
Excess of revenue over certain expenses............ $2,892
======
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-50
<PAGE> 57
VON KARMAN CORPORATE CENTER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of Von Karman Corporate Center, an office building located in Irvine,
California with approximately 451,477 of rentable square feet (the "Property")
that was acquired on September 10, 1997 by a group of affiliated owners (the
"LBA Owners"). The Property is part of the pending acquisition of the LBA
Portfolio by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-51
<PAGE> 58
VON KARMAN CORPORATE CENTER
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997............................................... $ 4,559
1998............................................... 4,238
1999............................................... 3,710
2000............................................... 3,009
2001............................................... 1,679
Thereafter......................................... 1,845
-------
$19,040
=======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-52
<PAGE> 59
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of Centrelake Plaza for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the management of
Centrelake Plaza. Our responsibility is to express an opinion on the statement
of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of Centrelake Plaza for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-53
<PAGE> 60
CENTRELAKE PLAZA
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental................................................... $1,530
Tenant reimbursements.................................... 111
Other.................................................... 19
-----
Total revenue........................................ 1,660
-----
Certain Expenses:
Property operating and maintenance....................... 365
Real estate taxes........................................ 125
Insurance................................................ 25
-----
Total certain expenses............................... 515
-----
Excess of revenue over certain expenses.......... $1,145
=====
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-54
<PAGE> 61
CENTRELAKE PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of Centrelake Plaza, an office building located in Ontario,
California with approximately 110,763 of rentable square feet (the Property)
that was acquired on July 31, 1997 by a group of affiliated owners (the "LBA
Owners"). The Property is part of the pending acquisition of the LBA Portfolio
by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-55
<PAGE> 62
CENTRELAKE PLAZA
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997..................................................... $1,061
1998..................................................... 912
1999..................................................... 760
2000..................................................... 497
2001..................................................... 214
Thereafter............................................... 517
------
$3,961
======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-56
<PAGE> 63
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying statement of revenue and certain expenses
of 150 East Colorado for the year ended December 31, 1996. This statement of
revenue and certain expenses is the responsibility of the management of 150 East
Colorado. Our responsibility is to express an opinion on the statement of
revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of revenue and certain expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The accompanying statement of revenue and certain expenses was prepared for
the purpose of complying with the rules and regulations of the Securities and
Exchange Commission. Certain expenses (described in Note 1) that would not be
comparable to those resulting from the proposed future operations of the
property are excluded and the statement is not intended to be a complete
presentation of the revenue and expenses of the property.
In our opinion, the statement of revenue and certain expenses presents
fairly, in all material respects, the revenue and certain expenses, as defined
above, of 150 East Colorado for the year ended December 31, 1996, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
August 25, 1997
F-57
<PAGE> 64
150 EAST COLORADO
STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental.................................................... $798
Tenant reimbursements..................................... 4
Parking, net of expenses.................................. 4
Other..................................................... 1
----
Total revenue......................................... 807
----
Certain Expenses:
Property operating and maintenance........................ 223
Real estate taxes......................................... 81
Insurance................................................. 11
----
Total certain expenses................................ 315
----
Excess of revenue over certain expenses........... $492
====
</TABLE>
See accompanying notes to statement of revenue and certain expenses.
F-58
<PAGE> 65
150 EAST COLORADO
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying statement of revenue and certain expenses reflects the
operations of 150 East Colorado, an office building located in Pasadena,
California with approximately 61,168 of rentable square feet (the "Property")
which was acquired on July 29, 1997 by a group of affiliated owners (the "LBA
Owners"). The Property is part of the pending acquisition of the LBA
Portfolio by Arden Realty, Inc. ("Arden").
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Property have been excluded. Excluded expenses consist of interest, depreciation
and amortization and property general and administrative costs not directly
comparable to the future operations of the Property.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-59
<PAGE> 66
150 EAST COLORADO
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997.............................................. $ 586
1998.............................................. 592
1999.............................................. 585
2000.............................................. 520
2001.............................................. 417
Thereafter........................................ 626
------
$3,326
=======
</TABLE>
The Property is generally leased to tenants under lease terms which provide
for the tenants to pay for increases in operating expenses in excess of
specified amounts. The above future minimum lease payments do not include such
payments for tenant reimbursements of operating expenses.
F-60
<PAGE> 67
REPORT OF INDEPENDENT AUDITORS
Board of Directors and Stockholders
Arden Realty, Inc.
We have audited the accompanying combined statement of revenue and certain
expenses of the SDK Properties for the year ended December 31, 1996. This
combined statement of revenue and certain expenses is the responsibility of the
management of the SDK Properties. Our responsibility is to express an opinion on
the combined statement of revenue and certain expenses based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined statements of revenue and
certain expenses is free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statement. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
The accompanying combined statement of revenue and certain expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission. Certain expenses (described in Note 1) that
would not be comparable to those resulting from the proposed future operations
of the properties are excluded and the statement is not intended to be a
complete presentation of the revenue and expenses of the properties.
In our opinion, the combined statement of revenue and certain expenses
presents fairly, in all material respects, the combined revenue and certain
expenses, as defined above, of the SDK Properties for the year ended December
31, 1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Newport Beach, California
November 23, 1997
F-61
<PAGE> 68
SDK PROPERTIES
COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
(In thousands)
<TABLE>
<S> <C>
Revenue:
Rental .................................................. $3,385
Tenant reimbursements ................................... 329
Other ................................................... 1
------
Total revenue ....................................... 3,715
------
Certain Expenses:
Property operating and maintenance ...................... 19
Real estate taxes ....................................... 240
Insurance ............................................... 169
------
Total certain expenses .............................. 428
------
Excess of revenue over certain expenses .......... $3,287
======
</TABLE>
See accompanying notes to combined statement of revenue and certain expenses.
F-62
<PAGE> 69
SDK PROPERTIES
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
For the Year Ended December 31, 1996
1. Organization and Summary of Significant Accounting Policies
Organization
The accompanying combined statement of revenue and certain expenses includes
the combined operations of three commercial real estate properties located in
Southern California (the "Properties") that were acquired on November 17, 1997
by a group of affiliated owners (the "LBA Owners"). All of the properties
were acquired from a single seller. The Properties are part of the pending
acquisition of the LBA Portfolio by Arden Realty, Inc. ("Arden").
The Properties are as follows:
<TABLE>
<CAPTION>
Southern Approximate
California Rentable
Property Name Location Square Footage
- ------------- -------- --------------
<S> <C> <C>
Panorama Corporate Center....... Kearny Mesa................. 133,245
Balboa Corporate Center......... Kearny Mesa................. 69,890
Ruffin Corporate Center......... Kearny Mesa................. 45,059
-------
248,194
=======
</TABLE>
Basis of Presentation
The accompanying statement was prepared to comply with the rules and
regulations of the Securities and Exchange Commission. The accompanying
statement was prepared on a combined basis because the Properties were acquired
from a single seller by the owners of the LBA Portfolio. There are no
interproperty accounts to be eliminated.
The accompanying statement is not representative of the actual operations
for the period presented, as certain expenses that may not be comparable to the
expenses expected to be incurred by Arden in the future operations of the
Properties have been excluded. Excluded expenses consist of interest,
depreciation and amortization and property general and administrative costs not
directly comparable to the future operations of the Properties.
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the terms of the
related leases.
Use of Estimates
The preparation of financial statements, in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
F-63
<PAGE> 70
SDK PROPERTIES
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES (Continued)
For the Year Ended December 31, 1996
2. Future Minimum Lease Payments
The future minimum lease payments to be received under existing operating
leases as of December 31, 1996 are as follows (in thousands):
<TABLE>
<S> <C>
1997........................................ $ 3,176
1998........................................ 3,308
1999........................................ 3,443
2000........................................ 3,528
2001........................................ 3,588
Thereafter.................................. 15,612
-------
$32,655
=======
</TABLE>
The Properties are generally leased to tenants under triple net lease terms
which requires the tenants to pay for all operating expenses directly or through
reimbursements. The above future minimum lease payments do not include specified
payments for tenant reimbursements of operating expenses.
At December 31, 1996, the Properties were 100% leased to two tenants.
F-64
<PAGE> 71
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following unaudited pro forma condensed consolidated balance sheet as
of September 30, 1997 is presented as if the following transactions had been
consummated on September 30, 1997: (i) the acquisition of properties acquired
subsequent to September 30, 1997 and prior to December 30, 1997 (the "Fourth
Quarter 1997 Acquired Properties") (ii) the acquisition of the Acquired
Properties and the LBA Portfolio; (iii) the closing of a 12-month, $375 million
bridge loan facility (the "Bridge Facility"); and (iv) the completion of the
Company's public offering of common stock (the "Offering") had been consummated
on September 30, 1997.
The following unaudited pro forma condensed consolidated statements of
operations for the nine months ended September 30, 1997 and for the year ended
December 31,1996 are presented as if: (i) the consummation of the initial public
offering (the "IPO") and related formation transactions in connection with the
IPO, the prior offering of 13,750,000 shares of Common Stock (the "Prior
Offering"), and the Offering; (ii) the acquisition of properties acquired during
1996 (the "1996 Acquisitions"); (iii) the acquisition of properties acquired
between January 1, 1997 and December 30, 1997 (the "1997 Acquisitions"); (iv)
the acquisition of the Acquired Properties and the LBA Portfolio; and (v) the
closing of the Bridge Facility.
The pro forma condensed consolidated financial statements assume
(i) no exercise of the underwriters option to acquire an additional 2,550,000
shares of common stock in the Offering, (ii) that the sellers of the LBA
Portfolio do not exercise their right to receive up to $35 million of the
purchase price in the form of OP Units and (iii) no refinancing of the
Bridge Facility, which the Company expects will be refinanced within 12 months.
The pro forma condensed consolidated financial statements are not
necessarily indicative of what the actual financial position or results of
operations would have been had the Company completed the transactions described
above, nor do they purport to represent the future financial position of the
Company.
F-65
<PAGE> 72
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
PROFORMA ADJUSTMENTS
--------------------------------------------------------------------------
FOURTH QUARTER
1997 ARDEN REALTY,
ARDEN ACQUIRED ACQUIRED OFFERING BRIDGE LBA INC.
REALTY, INC. PROPERTIES(A) PROPERTIES(B) (C) FACILITY(D) PORTFOLIO(E) OTHER(F) PRO FORMA
------------ ------------- ------------- -------- ----------- ------------ -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Commercial office
properties - net $925,539 $245,775 $154,213 $620,075 $1,945,602
Cash and cash equivalents 6,945 (4,702) (8,781) $459,775 $375,000 (596,000) $(230,237) 2,000
Restricted cash 4,000 -- -- -- -- -- -- 4,000
Rents and other receivables 3,932 4,000 -- -- -- -- -- 7,932
Mortgage notes receivable 14,392 -- -- -- -- -- -- 14,392
- net
Deferred rent 8,033 -- -- -- -- -- -- 8,033
Prepaid financing and
leasing costs - net 10,996 -- -- -- -- -- -- 10,996
Prepaid expenses and
other assets 4,264 (650) -- -- -- -- -- 3,614
-------- -------- -------- -------- -------- ------- --------- ----------
Total assets $978,101 $244,423 $145,432 $459,775 $375,000 $24,075 $(230,237) $1,996,569
======== ======== ======== ======== ======== ======= ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage loans payable $180,000 57,200 83,670 -- 375,000 -- -- $695,870
Unsecured lines of credit 45,900 135,000 61,024 -- -- 20,000 (230,237) 31,687
Accounts payable and
accrued expenses 17,013 -- -- -- -- -- -- 17,013
Security deposits 5,986 -- -- -- -- -- -- 5,986
Dividends payable 14,177 -- -- -- -- -- -- 14,177
-------- -------- -------- -------- -------- ------- --------- ----------
Total liabilities 263,076 192,200 144,694 -- 375,000 20,000 (230,237) 764,733
-------- -------- -------- -------- -------- ------- --------- ----------
Minority interest 47,178 52,223 738 -- -- -- -- 100,139
Stockholders' equity:
Common stock 354 -- -- 170 -- -- -- 524
Additional paid-in capital 667,493 -- -- 459,605 -- 4,075 -- 1,131,173
Retained earnings -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- ------- --------- ----------
Total stockholders' equity 667,847 -- -- 459,775 -- 4,075 -- 1,131,697
-------- -------- -------- -------- -------- ------- --------- ----------
Total liabilities and
stockholders' equity $978,101 $244,423 $145,432 $459,775 $375,000 $24,075 $(230,237) $1,996,569
======== ======== ======== ======== ======== ======= ========= ==========
</TABLE>
F-66
<PAGE> 73
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma Adjustments
----------------------------------------------
Pre-Acquisition Acquired
Period Properties
Arden for the 1997 and LBA Other Arden Realty,
Realty, Inc. Acquisitions(H) Portfolio(I) Adjustments Inc. Pro Forma
------------ --------------- ------------ ----------- --------------
<S> <C> <C> <C> <C> <C>
REVENUE
Rental $ 80,740 $40,756 $52,000 $ 1,518(J) $ 175,014
Tenant reimbursements 3,593 2,269 2,930 -- 8,792
Parking, net of expenses 5,267 1,681 1,585 -- 8,533
Other 1,451 300 461 -- 2,212
-------- ------- ------- --------- ---------
91,051 45,006 56,976 1,518 194,551
Other income 563 -- -- 1,685(K) 2,248
-------- ------- ------- --------- ---------
Total revenue 91,614 45,006 56,976 3,203 196,799
-------- ------- ------- --------- ---------
EXPENSES
Property expenses 29,175 14,403 20,528 2,676(L) 66,782
REIT general and
administrative 2,828 -- -- 922(M) 3,750
Interest 13,723 -- -- 16,361(N) 30,084
Loss on valuation of
derivative 3,111 -- -- -- 3,111
Depreciation and
amortization 13,261 -- -- 21,073(O) 34,334
-------- ------- ------- --------- ---------
Total expenses 62,098 14,403 20,528 41,032 138,061
-------- ------- ------- --------- ---------
Income before
minority interest 29,516 30,603 36,448 (37,829) 58,738
Minority interest (3,105) (1,744)(Q) -- (714)(P) (5,563)
-------- ------- ------- --------- ---------
Net income $ 26,411 $28,859 $36,448 $ (38,543) $ 53,175
======== ======= ======= ========= =========
Weighted average common shares
outstanding 25,440 52,443
======== =========
Net income per
common share $1.04 $1.01
======== =========
Supplemental net income
per share reflecting the
pro forma effects solely of
the Offering and the
acquisition of the LBA
Portfolio(S) $1.01
=========
</TABLE>
See accompanying notes
F-67
<PAGE> 74
ARDEN REALTY, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
PRO FORMA ADJUSTMENTS
-----------------------------------------------------------------------------------
EQUITY IN
ARDEN ARDEN NET LOSS OF
REALTY, INC. PREDECESSORS NONCOMBINED
CONSOLIDATED COMBINED ENTITIES PRE-ACQUISITION ACQUIRED
OCT. 9, 1996 JAN. 1, 1996 JAN. 1, 1996 PERIOD FOR PROPERTIES ARDEN
TO TO TO THE 1996 1997 AND LBA OTHER REALTY, INC.
DEC. 31, 1996 OCT. 8, 1996 OCT. 8, 1996 ACQUISITIONS(G) ACQUISITIONS(H) PORTFOLIO(I) ADJUSTMENTS PRO FORMA
------------- ------------ ------------ -------------------------------------------------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUE
Rental $ 17,041 $ 32,287 $ 12,828 $23,095 $72,422 $60,492 $ 4,837(J) $ 223,002
Tenant
reimbursements 803 2,031 243 733 3,400 4,343 -- 11,553
Parking, net of
expenses 1,215 3,692 846 1,161 2,961 2,026 -- 11,901
Other 375 1,125 357 606 562 662 -- 3,687
-------- -------- -------- ------- ------- ------- --------- ---------
19,434 39,135 14,274 25,595 79,345 67,523 4,837 250,143
Other income 138 1,330 -- -- -- -- 1,002(K) 2,470
-------- -------- -------- ------- ------- ------- --------- ---------
Total revenue 19,572 40,465 14,274 25,595 79,345 67,523 5,839 252,613
-------- -------- -------- ------- ------- ------- --------- ---------
EXPENSES
Property expenses 6,005 14,224 6,053 11,449 26,569 24,581 3,961(L) 92,842
General and
administrative 753 1,758 -- -- -- -- 2,489(M) 5,000
Interest 1,280 24,521 7,356 -- -- -- 7,676(N) 40,833
Depreciation and
amortization 3,108 5,264 2,705 -- -- -- 33,615(O) 44,692
-------- -------- -------- ------- ------- ------- --------- ---------
Total expenses 11,146 45,767 16,114 11,449 26,569 24,581 47,741 183,367
-------- -------- -------- ------- ------- ------- --------- ---------
Equity in net (loss)
of noncombined
entities -- (336) 336 -- -- -- -- --
-------- -------- -------- ------- ------- ------- --------- ---------
Income (loss) before
minority interest
and extraordinary
items 8,426 (5,638) (1,504) 14,146 52,776 42,942 (41,902) 69,246
-------- -------- -------- ------- ------- ------- --------- ---------
Minority interest (993) 721 (721) -- (2,299)(Q) -- (3,492)(P) (6,784)
-------- -------- -------- ------- ------- ------- --------- ---------
Income (loss) before
extraordinary items 7,433 (4,917) (2,225) 14,146 50,477 42,942 (45,394) 62,462
Extraordinary (loss)
gain on early
extinguishment
of debt, net
of minority
interests share (13,105) 1,877 -- -- -- -- 11,228(R) --
-------- -------- -------- ------- ------- ------- --------- ---------
Net (loss) income $ (5,672) $ (3,040) $ (2,225) $14,146 $50,477 $42,942 $ (34,166) $ 62,462
======== ======== ======== ======= ======= ======= ========= =========
Weighted average
common shares
outstanding 21,680 52,430
======== =========
Net (loss) income per
common share $(0.26) $1.19
======== =========
Supplemental net
loss per share
reflecting the
pro forma effects
solely of the
Offering and the
acquisition of the
LBA Portfolio(S) $ (.07)
=========
</TABLE>
See accompanying notes.
F-68
<PAGE> 75
ARDEN REALTY, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
The adjustments to the Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997 are as follows:
A. Acquisition of the Fourth Quarter 1997 Acquired Properties with $5,352,000 of
cash and deposits, a $4,000,000 receivable, proceeds of $57,200,000 from
mortgage loans payable and $135,000,000 from the unsecured lines of credit, and
the issuance of 822,400 operating partnership units with an approximate value of
$24,723,000. The Company purchased a 75% interest in World Savings Center and
has an option to purchase the remaining 25% interest beginning on March 15,
1998.
Purchase price and actual and estimated additional closing costs of the
Fourth Quarter 1997 Acquired Properties are as follows:
<TABLE>
<CAPTION>
Fourth Quarter 1997 Acquired Properties Purchase Price
- --------------------------------------- --------------
<S> <C>
Northpoint $ 21,900,000
145 South Fairfax 7,400,000
Bernardo Regency 6,550,000
Thousand Oaks Portfolio 35,100,000
City Centre 33,300,000
Wilshire Pacific Plaza 15,500,000
Glendale Corporate Center 15,325,000
World Savings Center* 83,200,000
------------
Total** $218,275,000
============
</TABLE>
* Represents the Company's 75% interest plus additional acquisition costs.
** Including the consolidated 25% minority interest in the World Savings
Center, additions to Commercial Office Properties-net totaled $245,775,000
B. Acquisition of the Acquired Properties with $8,781,000 of cash, proceeds of
$83,670,000 from mortgage loans payable and $61,024,000 from the unsecured lines
of credit.
F-69
<PAGE> 76
Purchase price and actual and estimated additional closing costs of the
Acquired Properties are as follows:
<TABLE>
<CAPTION>
Acquired Properties Purchase Price
- ------------------- --------------
<S> <C>
9201 Sunset $ 28,800,000
Activity Business Center 14,900,000
Sunset Pointe Plaza 8,475,000
9100 Wilshire 65,100,000
Westlake Gardens 7,300,000
1100 Glendon* 28,900,000
------------
Total** $153,475,000
============
</TABLE>
* Represents the Company's 97.5% interest plus additional closing costs.
** Including the consolidated 2.5% minority interest in 1100 Glendon,
additions to Commercial Office Properties - net totaled $154,213,000.
C. Sale of 17,000,000 shares of common stock at $28.50 per share in the
Offering.
<TABLE>
<S> <C>
Gross proceeds from Offering $484,500,000
Costs associated with the Offering (24,725,000)
------------
$459,775,000
============
Par value of common stock $ 170,000
Additional paid in capital from
proceeds from sale of common stock 459,605,000
------------
$459,775,000
============
</TABLE>
D. Closing of a $375,000,000 Bridge Facility in connection with acquisition of
the LBA Portfolio.
E. Acquisition of the LBA Portfolio for approximately $616.0 million, including
estimated closing costs of 1.5 million, with proceeds from the Offering and
Bridge Facility. In connection with the acquisition of the LBA Portfolio,
the Company will issue warrants to purchase 2.5 million shares of the
Company's common stock with a value of approximately $4.1 million.
F. Partial repayment of the unsecured lines of credit with proceeds from the
Offering.
2. ADJUSTMENTS TO THE PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The pro forma adjustments reflected in the Pro Forma Condensed Consolidated
Statements of Operations for the nine months ended September 30, 1997 and the
year ended December 31, 1996 are set forth below:
F-70
<PAGE> 77
ARDEN REALTY, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(in thousands)
G. Represents the pre-acquisition period for the 17 properties acquired in
1996.
1996 ACQUISITIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
12501
400 Imperial 100 East 10351 Grand
Corporate 5832 9665 Bank West Imperial 303 Santa 2730 Avenue
Pointe Bolsa Wilshire Tower Broadway Highway Glenoaks Monica Wilshire Plaza
------ ----- -------- ----- -------- ------- -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $390 $80 $548 $1,351 $1,554 $1,387 $1,980 $1,134 $ 960 $ --
Tenant reimbursements 103 -- 19 29 107 40 48 11 -- --
Parking, net of expenses 28 10 58 124 88 66 129 99 43 --
Other 23 -- 32 15 74 4 138 7 12 --
---- --- ---- ------ ------ ------ ------ ------ ------ ----
Total revenues 544 90 657 1,519 1,823 1,497 2,295 1,251 1,015 --
Property expenses 123 8 203 574 581 578 956 551 451 --
---- --- ---- ------ ------ ------ ------ ------ ------ ----
Excess of revenue over
certain expenses $421 $82 $454 $ 945 $1,242 $ 919 $1,339 $ 700 $ 564 $ --
==== === ==== ====== ====== ====== ====== ====== ====== ====
</TABLE>
<TABLE>
<CAPTION>
Burbank
Executive
Plaza and Los
California Angeles 5200 Sumitomo 10350
Federal Center Corporate West Bank Santa
Building Promenade Center Century Building Monica Total
-------- --------- ------ ------- -------- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $2,156 $2,097 $5,882 $ 1,021 $1,926 $629 $23,095
Tenant reimbursements -- 51 128 115 79 3 733
Parking, net of expenses 164 -- -- 40 254 58 1,161
Other -- -- 288 2 9 2 606
------ ------ ------ ------- ------ ---- -------
Total revenues 2,320 2,148 6,298 1,178 2,268 692 25,595
Property expenses 976 982 2,881 1,188 1,070 327 11,449
------ ------ ------ ------- ------ ---- -------
Excess of revenue over
certain expenses $1,344 $1,166 $3,417 $ (10) $1,198 $365 $14,146
====== ====== ====== ======= ====== ==== =======
</TABLE>
F-71
<PAGE> 78
H. Represents the actual pre-acquisition result for the 1997 Acquisitions:
The 1997 Acquisitions
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Whittier
Financial
Clarendon
10780 Crest, and Noble South
535 Santa California 6800 Professional Bay 8383 Parkway
Brand Monica Twin Centre Owensmouth Center Centre Wilshire Center
----- ------- ----------- ---------- ------------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 707 $ 1,455 $ 5,580 $ 532 $ 794 $ 2,691 $ 6,628 $ 911
Tenant reimbursements 74 57 225 26 5 143 -- 92
Parking, net of expenses 90 136 228 -- 51 -- 832 --
Other -- 2 15 5 -- 26 31 --
----- ------- ------- ---- ----- ------- ------- -----
Total revenues 871 1,650 6,048 563 850 2,860 7,491 1,003
Property expenses 459 417 1,757 485 347 1,270 2,867 276
----- ------- ------- ---- ----- ------- ------- -----
Excess of revenue
over certain expenses $ 412 $ 1,233 $ 4,291 $ 78 $ 503 $ 1,590 $ 4,624 $ 727
===== ======= ======= ==== ===== ======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
1000
Town Center
Centerpointe and
La Palma Mariner Court
------------ -------------
<S> <C> <C>
Revenue
Rental $ 9,222 $ 3,798
Tenant reimbursements 797 93
Parking, net of expenses 9 --
Other 38 --
------- -------
Total revenues 10,066 3,891
Property expenses 2,834 1,350
------- -------
Excess of revenue
over certain expenses $ 7,232 $ 2,541
======= =======
</TABLE>
<TABLE>
<CAPTION>
Harbor Carlsberg South Bay
Pacific Crown 299 Corporate 1821 Corporate 120 Technology
Gateway II Cabot Euclid Center Dyer Center Spalding Center
---------- ----- ------ --------- ---- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 3,355 $ 3,002 $ -- $ 776 $ 593 $ 1,679 $ 693 $ 985
Tenant reimbursements 87 71 -- -- 133 30 55 25
Parking, net of expenses -- -- -- -- -- 61 46 --
Other 144 41 -- 5 -- 19 8 1
------- ------- ---- ----- ----- ------- ----- -----
Total revenues 3,586 3,114 -- 781 726 1,789 802 1,011
Property expenses 1,205 897 -- 246 92 713 429 371
------- ------- ---- ----- ----- ------- ----- -----
Excess of revenue
over certain expenses $ 2,381 $ 2,217 $ -- $ 535 $ 634 $ 1,076 $ 373 $ 640
======= ======= ==== ===== ===== ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
1370 Foremost
Valley Renaissance Professional 145 South Bernardo
Vista Court Center Northpoint Fairfax Regency
------ ----------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 1,333 $ 1,422 $ 856 $ 2,809 $ 1,012 $ 666
Tenant reimbursements 116 46 12 229 45 12
Parking, net of expenses -- -- 5 172 51 --
Other -- -- -- -- -- --
----- ------- ----- ------- ----- -----
Total revenues 1,449 1,468 873 3,210 1,108 678
Property expenses 537 296 144 1,073 400 191
----- ------- ----- ------- ----- -----
Excess of revenue
over certain expenses $ 912 $ 1,172 $ 729 $ 2,137 $ 708 $ 487
===== ======= ===== ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
Glendale
Corporate
Thousand Center and World
Oaks City Wilshire Savings
Portfolio(1) Centre Pacific Plaza Center Total
------------ ------ ------------- ------ -----
<S> <C> <C> <C> <C> <C>
Revenue
Rental $ 3,165 $ 3,366 $ 2,895 $ 11,497 $ 72,422
Tenant reimbursements -- 409 134 484 3,400
Parking, net of expenses -- -- 302 978 2,961
Other 4 160 63 -- 562
------- ------- ------- ------- --------
Total revenues 3,169 3,935 3,394 12,959 79,345
Property expenses 720 1,578 1,504 4,111 26,569
------- ------- ------- ------- --------
Excess of revenue
over certain expenses $ 2,449 $ 2,357 $ 1,890 $ 8,848 $ 52,776
======= ======= ======= ======= ========
</TABLE>
(1) One of the six properties in the portfolio is included only as of July 18,
1996.
F-72
<PAGE> 79
Pre-Acquisition Period of the 1997 Acquisitions
For the Nine Months Ended September 30, 1997
<TABLE>
<CAPTION>
Whittier
Financial
Clarendon
10780 Crest, and Noble South
535 Santa California 6800 Professional Bay 8383 Parkway
Brand Monica Twin Centre Owensmouth Center Centre Wilshire Center
----- ------ ----------- ---------- ------ ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 147 $ 402 $ 1,265 $ 153 $ 266 $ 764 $ 2,459 $ 410
Tenant reimbursements 3 4 51 1 1 32 -- 22
Parking, net of expenses 14 38 58 -- -- -- 344 --
Other rental operations -- -- 3 -- -- 3 32 --
---- ----- ----- ---- ----- ----- ------- -----
Total revenues 164 444 1,377 154 267 799 2,835 432
Property expenses 98 120 395 121 129 304 1,127 88
---- ----- ----- ---- ----- ----- ------- -----
Excess of revenue over
certain expenses $ 66 $ 324 $ 982 $ 33 $ 138 $ 495 $ 1,708 $ 344
==== ===== ===== ==== ===== ===== ======= =====
</TABLE>
<TABLE>
<CAPTION>
1000
Town Center
Centerpointe and
La Palma Mariner Court
-------- -------------
<S> <C> <C>
Revenue
Rental $ 3,712 $ 2,196
Tenant reimbursements 356 59
Parking, net of expenses 4 5
Other rental operations 69 2
------- -------
Total revenues 4,141 2,262
Property expenses 1,020 759
------- -------
Excess of revenue
over certain expenses $ 3,121 $ 1,503
======= =======
</TABLE>
<TABLE>
<CAPTION> South
Harbor Carlsberg Bay
Pacific Crown 299 Corporate 1821 Corporate 120 Technology
Gateway II Cabot Euclid Center Dyer Center Spalding Center
---------- ------- ------ --------- ----- --------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 1,973 $ 1,871 $ -- $ 419 $ 371 $ 958 $ 435 $ 784
Tenant reimbursements 117 58 -- -- 77 28 26 22
Parking, net of expenses -- -- -- -- -- 32 29 --
Other 10 5 -- -- -- 10 7 1
------- ------- ---- ----- ----- ----- ----- -----
Total revenues 2,100 1,934 -- 419 448 1,028 497 807
Property expenses 692 507 -- 153 59 322 209 219
------- ------- ---- ----- ----- ----- ----- -----
Excess of revenue
over certain expenses $ 1,408 $ 1,427 $ -- $ 266 $ 389 $ 706 $ 288 $ 588
======= ======= ==== ===== ===== ===== ===== =====
</TABLE>
<TABLE>
<CAPTION>
1370 Foremost
Valley Renaissance Professional 145 South Bernardo
Vista Court Center Northpoint Fairfax Regency
------ ----------- ------------ ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Rental $ 736 $ 644 $ 761 $ 2,301 $ 748 $ 518
Tenant reimbursements 308 26 5 235 58 6
Parking, net of expenses -- -- -- 159 35 --
Other 2 1 3 1 1 --
----- ----- ----- ------- ----- -----
Total revenues 1,046 671 769 2,696 842 524
Property expenses 359 261 143 833 302 159
----- ----- ----- ------- ----- -----
Excess of revenue
over certain expenses $ 687 $ 410 $ 626 $ 1,863 $ 540 $ 365
===== ===== ===== ======= ===== =====
</TABLE>
<TABLE>
<CAPTION>
Glendale
Corporate
Thousand Center and World
Oaks City Wilshire Savings
Portfolio Centre Pacific Plaza Center Total
--------- -------- ------------- ------ --------
<S> <C> <C> <C> <C> <C>
Revenue
Rental $ 3,221 $ 2,709 $ 1,813 $ 8,720 $ 40,756
Tenant reimbursements -- 272 160 342 2,269
Parking, net of expenses -- -- 211 752 1,681
Other 5 144 1 -- 300
------- ------- ------- ------- --------
Total revenues 3,226 3,125 2,185 9,814 45,006
Property expenses 692 1,110 894 3,328 14,403
------- ------- ------- ------- --------
Excess of revenue
over certain expenses $ 2,534 $ 2,015 $ 1,291 $ 6,486 $ 30,603
======= ======= ======= ======= ========
</TABLE>
F-73
<PAGE> 80
ARDEN REALTY, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(in thousands)
I. Represents the actual results for the Acquired Properties and LBA
Portfolio.
Acquired Properties and LBA Portfolio
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Activity Sunset
9201 Business Pointe 9100 Westlake 1100 LBA
Sunset Center Plaza Wilshire Gardens Glendon Portfolio Total
------- -------- ------ -------- -------- ------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $3,357 $1,489 $870 $4,690 -- $3,421 $46,665 $60,492
Tenant reimbursements 20 59 6 112 -- 308 3,838 4,343
Parking, net of expenses 661 -- -- 813 -- 342 210 2,026
Other 5 -- 7 -- -- 42 608 662
------ ------ ---- ------ -- ------ ------- -------
Total revenues 4,043 1,548 883 5,615 -- 4,113 51,321 67,523
Property expenses 1,332 253 324 2,666 -- 1,608 18,398 24,581
------ ------ ---- ------ -- ------ ------- -------
Excess of revenue over
certain expenses $2,711 $1,295 $559 $2,949 -- $2,505 $32,923 $42,942
====== ====== ==== ====== == ====== ======= =======
</TABLE>
Acquired Properties and LBA Portfolio
For the Nine Months Ended September 30, 1997
<TABLE>
<CAPTION>
Activity Sunset
9201 Business Pointe 9100 Westlake 1100 LBA
Sunset Center Plaza Wilshire Gardens Glendon Portfolio Total
------ -------- ------ -------- -------- ------- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue
Rental $2,790 $1,205 $796 $3,846 -- $2,835 $40,528 $52,000
Tenant reimbursements 27 48 4 64 -- -- 2,787 2,930
Parking, net of expenses 554 -- -- 744 -- -- 287 1,585
Other 12 6 4 13 -- 16 410 461
------ ------ ---- ------ -- ------ ------- -------
Total revenues 3,383 1,259 804 4,667 -- 2,851 44,012 56,976
Property expenses 1,142 196 253 1,822 -- 1,278 15,837 20,528
------ ------ ---- ------ -- ------ ------- -------
Excess of revenue over
certain expenses $2,241 $1,063 $551 $2,845 -- $1,573 $28,175 $36,448
====== ====== ==== ====== == ====== ======= =======
</TABLE>
F-74
<PAGE> 81
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------ -----------------
<S> <C> <C>
J. Decrease in rental revenue:
Increase in rental revenue to adjust the 1996
Acquisitions and the 1997
Acquisitions to straightline rental revenue
calculated as though the properties were
purchased at January 1, 1996 1,073 2,792
Increase in rental revenue to adjust the
Acquired Properties and LBA Portfolio to
straightline rental revenue calculated
as though the properties were acquired at
January 1, 1996. 445 2,045
------ ------
Net increase in rental revenue $1,518 $4,837
====== ======
K. Increase in other income:
Decrease in other income to eliminate
nonrecurring construction fees
which would not have been realized by the
Company and certain management fees that
will not be earned. -- (1,253)
Increase in other income relating to interest
income from the mortgage notes receivable. 1,123 1,506
Increase in other income relating to the
amortization of the discount on
the mortgage notes receivable. 344 459
Increase in interest income related to
the note receivable from Forest City 218 290
------ ------
Net increase in other income 1,685 1,002
====== ======
L. Increase in property general and administrative expenses
Increase in property general and administrative
expenses related to additional property payroll
costs relating to the 1997 Acquisitions for
the nine months ended September 30, 1997 and the
1996 Acquisitions, and 1997 Acquisitions for
the year ended December 31, 1996. 1,027 1,762
Increase in property general and administrative
expenses related to additional property payroll
costs relating to Acquired Properties and the
LBA Portfolio for the nine months ended
September 30, 1997 and year ended
December 31, 1996. 1,649 2,199
------ ------
Net increase in property general and
administrative expenses. $2,676 $3,961
====== ======
</TABLE>
F-75
<PAGE> 82
M. Increase in general and administrative expenses related to expected level of
operations as a public real estate investment trust and the incremental
increase relating to the management of additional properties.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------ -----------------
<S> <C> <C>
N. Increase in interest expense:
Decrease in interest expense due to
repayment of mortgage loans and
lines of credit $(13,723) $(33,157)
Increase in interest expense related
to the line of credit with an interest
rate of LIBOR plus 1.45% 1,687 2,250
Increase in interest expense related
to increases in secured mortgage
loans and the closing of the Bridge
Facility with fixed and variable
interest rates ranging from 7% to 9.21% 27,947 37,330
Increase in amortization of finance
costs related to the line of credit
and mortgage loans payable 450 1,253
-------- --------
Net increase in interest expense $ 16,361 $ 7,676
======== ========
O. Increase in depreciation expense:
Increase in depreciation expense to reflect
a full nine months of depreciation for the
1997 Acquisitions for the nine months ended
September 30, 1997 and a full year of depreciation
for the 1996 Acquisitions and 1997 Acquisitions
for the year ended December 31, 1996, utilizing a
40 year useful life for buildings and a 10 year
useful life for improvements $ 8,542 $ 16,778
Increase in depreciation expense to reflect a full
nine months of depreciation for the Acquired
Properties and LBA Portfolio for the nine months
ended September 30, 1997 and year ended December 31,
1996 utilizing a 40 year useful life for buildings
and a 10 year useful life for improvements. 12,531 16,707
Increase in depreciation due to the fair value
of consideration paid in excess of book
value of interests in properties acquired from
nonaffiliates in connection with the completion
of the IPO -- 130
-------- --------
Net increase in depreciation expense $ 21,073 $ 33,615
======== ========
</TABLE>
P. To reflect adjustment for minority interest of 6.7% for the nine
months ended September 30, 1997 and year ended December 31, 1996,
in the Operating Partnership.
Q. To reflect Forest City's 25% interest in World Savings Center.
R. To eliminate net extraordinary loss related to early extinguishment of debt.
S. Additional pro forma net income per share information is included below.
The following table sets forth the pro forma effects of solely the Offering
and the purchase of the LBA Portfolio (in thousands, except per share data):
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------ -----------------
<S> <C> <C>
Historical net income $26,411 $(5,672)
Arden Predecessors combined net loss -- (3,040)
Pro forma net income of the LBA Portfolio, net
of interest expense from the Bridge Facility 7,821 6,051
-------- --------
34,232 (2,661)
======== ========
Common Stock outstanding, on a historical basis 25,440 21,680
Common Stock issued in the Offering to
purchase the LBA Portfolio 8,911 8,911
-------- --------
34,351 30,591
======== ========
Net income (loss) per share reflecting the proforma
effects of the Offering and purchase of the
LBA Portfolio 1.00 (.09)
======== ========
</TABLE>
F-76
<PAGE> 83
(C) EXHIBITS.
10.1 Purchase and Sale Agreement and Joint Escrow Instructions by and
between Beverly Hills Medical Office Partners L.P., a Delaware limited
partnership, and Arden Realty Limited Partnership, a Maryland limited
partnership.
10.2 Agreement of Purchase and Sale and Joint Escrow Instructions by and
between Activity Business Associates, LLC. , a California limited
liability company, and Arden Realty Limited Partnership, a Maryland
limited partnership.
10.3 First Amendment to Agreement of Purchase and Sale and Joint Escrow
Instructions by and between Activity Business Associates, LLC., a
California limited liability company, and Arden Realty Limited
Partnership, a Maryland limited partnership.
10.4 Second Amendment to Agreement of Purchase and Sale and Joint Escrow
Instructions by and between Activity Business Associates, LLC., a
California limited liability company, and Arden Realty Limited
Partnership, a Maryland limited partnership.
10.5 Assumption Agreement by and among LaSalle National Bank, as Trustee
for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-WF1, Activity Business Associates, LLC, A
California limited liability company, Activity Business Center, L.P., a
Delaware limited partnership, William G. Bloodgood, David P. Mileski,
Russell A. Ries, and Arden Realty Limited Partnership, a Maryland
limited partnership.
10.6 Guaranty by Arden Realty Limited Partnership, a Maryland limited
partnership in favor of LaSalle National Bank, as trustee for Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-through Certificates,
Series 1996-WF1.
10.7 Hazardous Material Indemnity Agreement by Arden Realty Limited
Partnership, a Maryland limited partnership, to LaSalle National Bank,
as trustee for Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1996-WF1.
10.8 Agreement of Purchase and Sale and Joint Escrow Instructions by and
between SP Associates, Ltd., a California limited partnership and Arden
Realty Limited Partnership, a Maryland limited partnership.
10.9 Purchase and Sale Agreement and Joint Escrow Instructions by and between
Matterhorn U.S.A, Inc., a Delaware corporation, and Arden Realty
Limited Partnership, a Maryland limited partnership.
10.10 First Amendment to Agreement of Purchase and Sale and Joint Escrow
Instructions 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, Evergreen Plaza LLC, a California limited
partnership, Hillside Corporate Center, LLC, a California limited
liability company, Westlake Gardens, LLC, a California limited liability
company, and Arden Realty Limited Partnership, a Maryland limited
partnership.
10.11 Agreement to Contribute Capital and Escrow Instructions by and between
Westwood Center, a California limited partnership, and Arden Realty
Limited Partnership, a Maryland limited partnership.
10.12 Addendum to Agreement to Contribute Capital and Escrow Instructions by
and between Westwood Center, a California limited partnership, and
Arden Realty Limited Partnership, a Maryland limited partnership.
10.13 Second Addendum Agreement to Contribute Capital and Escrow Instructions
by and between Westwood Center, a California limited partnership, and
Arden Realty Limited Partnership, a Maryland limited partnership.
10.14 Third Addendum Agreement to Contribute Capital and Escrow Instructions
by and between Westwood Center, a California limited partnership, and
Arden Realty Limited Partnership, a Maryland limited partnership.
23.1 Consent of Independent Auditors.
<PAGE> 84
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: February 2, 1998 By: /s/ DIANA M. LAING
----------------------------
Diana M. Laing
Chief Financial Officer
<PAGE> 1
EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
DATED AS OF NOVEMBER 26, 1997
BETWEEN
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
AS SELLER
AND
ARDEN REALTY LIMITED PARTNERSHIP
A MARYLAND LIMITED PARTNERSHIP
AS BUYER
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I EFFECTIVE DATE.....................................................2
ARTICLE II DEFINITIONS........................................................2
ARTICLE III PROPERTY SUBJECT TO AGREEMENT......................................6
ARTICLE IV PURCHASE PRICE, PAYMENT OF PURCHASE
PRICE AND LIQUIDATED DAMAGES.......................................8
4.1 Purchase Price............................................8
4.2 Payment of Purchase Price; Deposit........................8
4.3 All or Nothing Sale; Statement of Purchase Price..........8
4.4 Investment of Deposit.....................................8
4.5 Liquidated Damages........................................9
ARTICLE V "AS IS, WHERE IS" SALE............................................10
5.1 "AS IS, WHERE IS" Sale...................................10
5.2 Inspection...............................................12
ARTICLE VI TITLE TO PROPERTY; APPROVALS......................................14
6.1 Title....................................................14
6.2 Approval of Title........................................14
6.3 Personal Property, Leases, Contracts, Permits, and
Miscellaneous Property Assets............................16
6.4 Approval of Documents....................................16
6.5 Vote of Seller's Limited Partners........................16
ARTICLE VII BUYER'S CONDITIONS PRECEDENT TO CLOSING...........................17
7.1 Buyer's Conditions Precedent.............................17
7.2 Satisfaction of Conditions...............................18
7.3 Waiver of Conditions.....................................18
ARTICLE VIII SELLER'S CONDITIONS PRECEDENT TO CLOSING .........................18
8.1 Seller's Conditions Precedent ...........................18
8.2 Satisfaction of Conditions...............................19
8.3 Waiver of Conditions.....................................19
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IX ESCROW AND CLOSING................................................19
9.1 Deposit With Escrow Holder and Escrow Instructions ......19
9.2 Closing..................................................19
9.3 Deliveries by Seller.....................................20
9.4 Deliveries by Buyer......................................21
9.5 Additional Deliveries by Buyer, Seller, and Others ......21
9.6 Prorations and Apportionments............................22
9.7 Costs and Expenses.......................................23
9.8 Insurance................................................24
9.9 Close of Escrow..........................................24
9.10 Notification; Closing Statements.........................25
9.11 Post-Closing Deliveries by Escrow Holder.................25
ARTICLE X REPRESENTATIONS, WARRANTIES, AND COVENANTS........................25
10.1 Buyer's Representations and Warranties...................25
10.2 Seller's Representations and Warranties..................26
10.3 Continuation and Survival of Representations and
Warranties; Limitations on Liability Therefor............28
ARTICLE XI POSSESSION........................................................28
ARTICLE XII OPERATION OF THE PROPERTY.........................................29
ARTICLE XIII LOSS BY CASUALTY; CONDEMNATION ...................................29
13.1 Damage or Destruction....................................29
13.2 Condemnation.............................................30
ARTICLE XIV MISCELLANEOUS.....................................................30
14.1 Notices..................................................30
14.2 Brokers and Finders......................................32
14.3 Assignment...............................................32
14.4 Successors and Assigns...................................33
14.5 Amendments...............................................33
14.6 Interpretation...........................................33
14.7 Governing Law............................................33
14.8 Entire Agreement.........................................33
14.9 Attorneys' Fees and Costs................................33
14.10 Time of the Essence .....................................33
14.11 Confidentiality .........................................34
14.12 No Waiver ...............................................34
14.13 Further Acts ............................................34
14.14 Exhibits ................................................35
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
14.15 Counterparts ............................................35
14.16 No Intent to Benefit Third Parties ......................35
14.17 Performance Due on Day Other Than Business Day ..........35
14.18 Expenses of Purchase and Sale ...........................35
14.19 Severability ............................................35
14.20 No Recording ............................................35
14.21 Quitclaim ...............................................35
14.22 Termination of Agreement ................................36
14.23 Waiver of Known Defaults ................................37
14.24 Access to Records After Closing .........................37
Exhibit A - LEGAL DESCRIPTION.......................................................A-1
Exhibit B - FORM OF GRANT DEED......................................................B-1
Exhibit C - FORM OF BILL OF SALE....................................................C-1
Exhibit D - FORM OF GENERAL ASSIGNMENT AND
ASSUMPTION AGREEMENT....................................................D-1
Exhibit E - FORM OF NON-FOREIGN AFFIDAVIT...........................................E-1
Exhibit F - FORM OF NOTICES TO SUBTENANTS
EQUIPMENT LESSORS, AND VENDORS..........................................F-1
SCHEDULE 10.2(c) - LEASE AND CONTRACT DEFAULTS......................................G-1
</TABLE>
iii
<PAGE> 5
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this
"AGREEMENT") is made as of November 26, 1997, between BEVERLY HILLS MEDICAL
OFFICE PARTNERS, L.P., a Delaware limited partnership ("SELLER"), and ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("BUYER"), for the
purpose of setting forth the agreement of the parties and of instructing
COMMERCE ESCROW COMPANY, a California corporation ("ESCROW HOLDER") with respect
to the transactions contemplated by this Agreement.
R E C I T A L S
A. Seller is the owner of certain land located at 9201 West Sunset
Boulevard, West Hollywood and Los Angeles, California, and more particularly
described in Exhibit A attached hereto and incorporated herein by reference (the
"LAND"), upon which is located certain improvements commonly known as the
"Beverly Sunset Medical Building," consisting of a ten floor multi-tenant
medical office tower with retail space on the lobby level and a landscaped
entrance plaza (collectively, the "MEDICAL BUILDING"), and an attached
subterranean and surface parking structure (the "PARKING STRUCTURE").
B. Seller is the owner of certain items of personal property located at
and used in the operation of the Medical Building, including, but not limited to
furniture, furnishings, equipment, inventory, merchandise, and supplies.
C. The Medical Building is managed by Voit Management Company, L.P.
("MANAGER"), pursuant to that certain Management Agreement dated November 1,
1992 (the "MANAGEMENT AGREEMENT"), between Manager and Seller. The Parking
Structure is leased and operated by AMPCO Auto Parks, Inc., a California
corporation doing business as AMPCO Parking ("PARKING OPERATOR") pursuant to
that certain Parking Garage Lease dated as of February 1, 1986, as amended by
Amendment No. 1 to Parking Garage Lease dated as of October 1, 1989
(collectively, the "PARKING AGREEMENT"), between Parking Operator and Seller.
D. Buyer desires to purchase the Property (as hereinafter defined) from
Seller, and Seller desires to sell the Property to Buyer, on the terms and
conditions set forth herein.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:
<PAGE> 6
ARTICLE I
EFFECTIVE DATE
This Agreement shall be effective (the "EFFECTIVE DATE") when a fully
executed copy of this Agreement (or a fully executed copy in counterparts) is
deposited with Escrow Holder. Escrow Holder is hereby instructed to immediately
notify in writing each party to this Agreement of the Effective Date.
ARTICLE II
DEFINITIONS
The following terms and references shall have the meanings indicated
below:
(1) "AGREEMENT" shall have the meaning ascribed thereto in the
introductory paragraph of this Agreement.
(2) "BALANCE" shall have the meaning ascribed thereto in
Section 4.2(b) of this Agreement.
(3) "BILL OF SALE" shall have the meaning ascribed thereto in
Article III of this Agreement.
(4) "BROKER" shall have the meaning ascribed thereto in
Section 14.2(a) of this Agreement.
(5) "BUYER" shall have the meaning ascribed thereto in the
introductory paragraph of this Agreement.
(6) "CLOSING" means the consummation of the transactions
contemplated by this Agreement.
(7) "CLOSING DATE" means the date the Deed is recorded.
(8) "CLOSING STATEMENTS" shall have the meaning ascribed
thereto in Section 9.9(a) of this Agreement.
(9) "CONDEMNATION NOTICE" shall have the meaning ascribed
thereto in Section 13.2 of this Agreement.
(10) "CONTRACTS" shall have the meaning ascribed thereto in
Article III of this Agreement.
2
<PAGE> 7
(11) "CUTOFF TIME" shall have the meaning ascribed thereto in
Section 9.6 of this Agreement.
(12) "DEED" shall have the meaning ascribed thereto in Article
III of this Agreement.
(13) "DEPOSIT" shall have the meaning ascribed thereto in
Section 4.2(a) of this Agreement.
(14) "DOCUMENTS" shall have the meaning ascribed thereto in
Section 6.4 of this Agreement.
(15) "EFFECTIVE DATE" shall have the meaning ascribed thereto
in Article I of this Agreement.
(16) "ENVIRONMENTAL ASSESSMENTS" shall mean, collectively,
that certain Phase I Environmental Site Assessment dated as of September 10,
1997, Project Number 3890, prepared by CET Environmental Services, Inc.; and
that certain Asbestos Management Program dated as of May 14, 1993, prepared by
The Earth Technology Corporation, as updated by that certain Operations &
Maintenance - (Review) dated as of March 31, 1997, prepared by American
Environmental Specialists, Co.
(17) "ESCROW" shall have the meaning ascribed thereto in
Section 9.1 of this Agreement.
(18) "ESCROW HOLDER" shall have the meaning ascribed thereto
in the introductory paragraph of this Agreement.
(19) "FF&E" means furniture, fixtures, equipment, machinery,
appliances, fittings, and other removable articles of personal property of every
kind and nature that are owned by Seller, located at the Land, and used in the
operation of the Medical Building or the Parking Structure.
(20) "FF&E AND CAPITAL RESERVES" means all funds, reserves,
escrows, and accounts for the replacement and repair of FF&E and the funding of
capital improvements to the Property, including, without limitation, the
"Capital Expenditure Account," described in Section 7.5 of the Management
Agreement. FF&E and Capital Reserves are not being transferred by Seller to
Buyer.
(21) "GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT" shall have
the meaning ascribed thereto in Article III of this Agreement.
3
<PAGE> 8
(22) "HOLIDAY" shall have the meaning ascribed thereto in
Section 14.17 of this Agreement.
(23) "MEDICAL BUILDING" shall have the meaning ascribed
thereto in Recital A of this Agreement.
(24) "IMPROVEMENTS" shall have the meaning ascribed thereto in
Article III of this Agreement.
(25) "INFORMATION" shall have the meaning ascribed thereto in
Section 5.1(b) of this Agreement.
(26) "KNOWN DEFAULT" shall have the meaning ascribed thereto
in Section 14.23 of this Agreement.
(27) "LAND" shall have the meaning ascribed thereto in Recital
A of this Agreement.
(28) "LEASES" shall have the meaning ascribed thereto in
Article III of this Agreement.
(29) "LIMITED PARTNER DISAPPROVAL" shall have the meaning set
forth in Section 7.1(a) hereof.
(30) "LIMITED PARTNERS" means, collectively, the limited
partners and unit holders of Seller.
(31) "MANAGEMENT AGREEMENT" shall have the meaning ascribed
thereto in Recital C of this Agreement.
(32) "MANAGER" shall have the meaning ascribed thereto in
Recital C of this Agreement.
(33) "MISCELLANEOUS PROPERTY ASSETS" shall have the meaning
ascribed thereto in Article III of this Agreement.
(34) "NOTICE OF REQUIRED PARTNERSHIP VOTE" shall have the
meaning ascribed thereto in Section 6.5 of this Agreement.
(35) "OWNER'S TITLE POLICY" shall have the meaning ascribed
thereto in Section 6.1 of this Agreement.
4
<PAGE> 9
(36) "PARKING AGREEMENT" shall have the meaning ascribed
thereto in Recital C of this Agreement.
(37) "PARKING OPERATOR" shall have the meaning ascribed
thereto in Recital C of this Agreement.
(38) "PARTNERSHIP VOTE MEETING" shall have the meaning
ascribed thereto in Section 6.5 of this Agreement.
(39) "PERMITS" shall have the meaning ascribed thereto in
Article III of this Agreement.
(40) "PERMITTED EXCEPTIONS" shall have the meaning ascribed
thereto in Section 6.1 of this Agreement.
(41) "PERSONAL PROPERTY" shall have the meaning ascribed
thereto in Article III of this Agreement.
(42) "PROPERTY" shall have the meaning ascribed thereto in
Article III of this Agreement.
(43) "PRORATIONS" shall have the meaning ascribed thereto in
Section 9.6 of this Agreement.
(44) "PROTECTED MARKS" shall mean all trademarks, service
marks, trade names, logos, designs, and all goodwill appurtenant thereto, owned
by Manager, Parking Operator, or any direct or indirect parent, subsidiary or
affiliate of each, or which may be owned by tenants under Leases or by third
parties under Contracts.
(45) "PTR" shall have the meaning ascribed thereto in Section
6.2(a) of this Agreement.
(46) "PURCHASE PRICE" shall have the meaning ascribed thereto
in Section 4.1 of this Agreement.
(47) "REAL PROPERTY" shall have the meaning ascribed thereto
in Article III of this Agreement.
(48) "SELLER" shall have the meaning ascribed thereto in the
introductory paragraph of this Agreement.
(49) "SELLER HAS NOT RECEIVED" shall have the meaning ascribed
thereto in Section 10.2(o) of this Agreement.
5
<PAGE> 10
(50) "SELLER'S KNOWLEDGE" shall have the meaning ascribed
thereto in Section 10.2(n) of this Agreement.
(51) "SELLER'S NON-FOREIGN AFFIDAVIT" shall have the meaning
ascribed thereto in Section 9.3(d) of this Agreement.
(52) "SELLER'S PARTNERSHIP AGREEMENT" shall mean that certain
Amended and Restated Agreement of Limited Partnership of Shearson Beverly Hills
Medical Partners, L.P., dated 1987.
(53) "SURVEY" shall have the meaning ascribed thereto in
Section 6.2(a) of this Agreement.
(54) "TITLE COMPANY" shall have the meaning ascribed thereto
in Section 6.1 of this Agreement.
(55) "TRANSFER" shall have the meaning ascribed thereto in
Section 14.3 of this Agreement.
ARTICLE III
PROPERTY SUBJECT TO AGREEMENT
Seller hereby agrees to sell to Buyer, and Buyer hereby agrees to
purchase from Seller, subject to the terms and conditions set forth herein, all
of Seller's right, title, and interest in and to the following (collectively,
the "PROPERTY"):
(a) LAND - the Land is described in Exhibit A. The Land shall
be conveyed from Seller to Buyer pursuant to a Grant Deed (the "DEED")
substantially in the form of Exhibit B attached hereto and incorporated herein
by reference.
(b) IMPROVEMENTS - the Medical Building, Parking Structure,
and other buildings, structures, and improvements, located on the Land
(collectively, the "IMPROVEMENTS," and together with the Land, the "REAL
PROPERTY"). The Improvements shall be conveyed from Seller to Buyer pursuant to
the Deed.
(c) PERSONAL PROPERTY - that certain personal property owned
by Seller, located at the Land, and used for the operation, maintenance, and
management of the Medical Building or the Parking Structure as of the Closing
Date, including, without limitation, the FF&E, and the items listed on Schedule
I to Exhibit C attached hereto and incorporated herein by reference
(collectively, the "PERSONAL PROPERTY"). Notwithstanding anything to the
contrary contained in this Agreement, the Personal Property shall not include:
personal property leased by Seller under the contracts described in Schedule II
to Exhibit C; personal property owned by Manager or Parking Operator; personal
property owned by invitees of the
6
<PAGE> 11
tenants at the Medical Building or Parking Structure; personal property owned by
any tenant under any Lease; and personal property owned by any suppliers,
vendors, or contractors serving the Medical Building, the Parking Structure, or
any tenant thereat. The Personal Property shall be conveyed from Seller to Buyer
pursuant to a Bill of Sale (the "BILL OF SALE") substantially in the form of
Exhibit C.
(d) LEASES - those certain leases, space leases, licenses,
occupancy agreements, concessions, or other such arrangements for the use of
space within the Medical Building or Parking Structure in effect on the Closing
Date, other than arrangements for the transient use of parking spaces at the
Parking Structure, as set forth on Schedule I to Exhibit D attached hereto and
incorporated herein by reference (collectively, the "LEASES"). Seller's interest
in the Leases shall be conveyed from Seller to Buyer pursuant to a General
Assignment and Assumption Agreement (the "GENERAL ASSIGNMENT AND ASSUMPTION
AGREEMENT") substantially in the form of Exhibit D.
(e) CONTRACTS - those certain contracts and agreements
relating to the improvement, maintenance, repair, or operation of the Medical
Building or the Parking Structure in effect on the Closing Date, if any, entered
into by Seller or its predecessors in interest (or by Manager as the agent of
Seller or in the name of the Medical Building or the Parking Structure), as set
forth on Schedule I to Exhibit D (collectively, the "CONTRACTS"). Seller's
interest in the Contracts shall be conveyed from Seller to Buyer pursuant to the
General Assignment and Assumption Agreement.
(f) PERMITS - those certain licenses and permits obtained by
Seller or its predecessors in interest (or by Manager as the agent of Seller or
in the name of the Medical Building or the Parking Structure), if any, used in
or relating to the ownership, occupancy, or operation of the Property or any
part thereof in effect on the Closing Date, as set forth on Schedule I to
Exhibit D, other than those which, under applicable law or under provisions
applicable to any particular license or permit in question, are non-transferable
(collectively, the "PERMITS"). Seller's interest in the Permits shall be
conveyed from Seller to Buyer pursuant to the General Assignment and Assumption
Agreement.
(g) MISCELLANEOUS PROPERTY ASSETS - those certain contract
rights, trademarks, service marks, trade names, logos, copyrights, and rights
under guaranties or warranties relating to goods, merchandise, or services at or
relating to the Medical Building or Parking Structure, including, without
limitation, the assets set forth on Schedule I to Exhibit D, together with any
indemnities benefitting Seller or the Property and relating to the Property, to
the extent such items are transferable (collectively, the "MISCELLANEOUS
PROPERTY ASSETS"), but the Miscellaneous Property Assets shall not include (and
there shall be expressly excluded) the Leases, the Contracts, the Permits, and
the Protected Marks. Seller's interest in the Miscellaneous Property Assets
shall be conveyed from Seller to Buyer pursuant to the General Assignment and
Assumption Agreement.
7
<PAGE> 12
ARTICLE IV
PURCHASE PRICE, PAYMENT OF
PURCHASE PRICE AND LIQUIDATED DAMAGES
4.1 PURCHASE PRICE. Subject to the terms, conditions, and provisions
contained in this Agreement, Buyer agrees to pay, and Seller agrees to accept,
as consideration for conveyance of the Property to Buyer, the sum of Twenty
Eight Million Seven Hundred Fifty Thousand Dollars ($28,750,000.00) (the
"PURCHASE PRICE").
4.2 PAYMENT OF PURCHASE PRICE; DEPOSIT. The Purchase Price shall be
paid by Buyer as follows:
(a) Seven Hundred Fifty Thousand Dollars ($750,000.00) (the
"DEPOSIT") shall be placed into Escrow by wire transfer of immediately available
funds to Escrow Holder within one (1) business day following the Effective Date.
Escrow Holder shall immediately notify Seller by facsimile in accordance with
Section 14.1 hereof of Escrow Holder's receipt of the Deposit. The Deposit shall
become non-refundable (except as expressly provided to the contrary in this
Agreement) at 3:00 P.M. Los Angeles time on November 26, 1997, unless Buyer
shall have terminated this Agreement in accordance with Section 5.2(e) prior to
such time. Escrow Holder shall not release the Deposit except in strict
accordance with the terms and conditions of this Agreement, or in strict
accordance with further written instructions signed by both Seller and Buyer.
(b) The balance of the Purchase Price, subject to adjustments as
provided in Sections 9.6 and 9.7 hereof and taking into account all interest
earned on the Deposit (the "BALANCE"), shall be placed into Escrow by wire
transfer of immediately available funds to Escrow Holder at least one (1)
business day before the scheduled Closing. If the purchase of the Property by
Buyer hereunder is consummated, then the Deposit and all interest accrued
thereon shall constitute a part of and be applied against the Purchase Price. If
the purchase of the Property by Buyer hereunder is not consummated, then the
Deposit and all interest accrued thereon shall either be returned to Buyer or be
paid to Seller in accordance with the provisions hereinafter set forth.
4.3 ALL OR NOTHING SALE; STATEMENT OF PURCHASE PRICE. The sale of the
Property shall be on an all or nothing basis, the sale of each item of Property
to be conditioned upon the simultaneous sale of all other items of Property on a
concurrent basis, and Buyer shall have no right to purchase, and Seller shall
have no right to cause Buyer to purchase, less than all of the Property as an
entirety in accordance with the provisions of this Agreement. Both Buyer and
Seller agree that in all public filings and reports, including, without
limitation, any documentary or other transfer tax declarations and any federal,
state, or local income, sales, or use tax returns or declarations, the Property
shall be valued as herein provided.
4.4 INVESTMENT OF DEPOSIT. Immediately upon receipt of the Deposit and
without
8
<PAGE> 13
further instruction, Escrow Holder shall invest the Deposit in money market
accounts, certificates of deposit, United States government obligations, or in
collateralized interest bearing accounts, as shall be directed in writing by
Buyer, subject to Seller's reasonable approval. Subject to the provisions of
Section 4.5 below, all interest on the Deposit shall accrue for the benefit of
Buyer until the Closing. Seller shall not be responsible for nor bear the risk
of loss of the Deposit, and shall not be responsible for the rate of return
thereon.
4.5 LIQUIDATED DAMAGES. IF THE SALE OF THE PROPERTY AS CONTEMPLATED
HEREUNDER IS NOT CONSUMMATED BECAUSE THIS AGREEMENT IS TERMINATED BY SELLER
UNDER SECTION 14.22(c) HEREOF, AND SELLER HAS OTHERWISE SATISFIED ALL MATERIAL
CONDITIONS REQUIRED TO BE SATISFIED BY SELLER ON OR BEFORE THE DATE OF SUCH
TERMINATION, ESCROW HOLDER SHALL PAY TO SELLER THE DEPOSIT (INCLUDING ALL
INTEREST EARNED FROM THE INVESTMENT THEREOF) AND SELLER SHALL RETAIN SUCH AMOUNT
AS LIQUIDATED DAMAGES. THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN
THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES EXPRESSLY
AGREE AND ACKNOWLEDGE THAT THE DEPOSIT (PLUS INTEREST) HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES IF
THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF
A DEFAULT UNDER THIS AGREEMENT ON THE PART OF BUYER. THE PARTIES FURTHER
ACKNOWLEDGE THAT SUCH LIQUIDATED DAMAGES HAVE BEEN AGREED UPON AS SELLER'S
EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THAT THE SALE OF THE PROPERTY AS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED BECAUSE OF A DEFAULT HEREUNDER ON THE
PART OF BUYER, PROVIDED THAT: (A) THE FOREGOING SHALL NOT LIMIT SELLER'S RIGHTS
OR REMEDIES WITH RESPECT TO (1) THE OBLIGATIONS OF BUYER UNDER SECTIONS 5.2,
14.2(b), 14.9,AND 14.11 HEREOF AND (2) THOSE RIGHTS AND OBLIGATIONS THAT, BY
THEIR TERMS, SURVIVE THE TERMINATION OF THIS AGREEMENT; AND (B) BUYER SHALL ALSO
BE RESPONSIBLE FOR THE PAYMENT OF ALL TITLE COMPANY AND ESCROW CANCELLATION
CHARGES.
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NOTHING CONTAINED IN THIS SECTION 4.5 SHALL BE DEEMED TO LIMIT ANY OF
THE INDEMNITIES OF BUYER OR SELLER CONTAINED ELSEWHERE IN THIS AGREEMENT. IN THE
EVENT THAT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER IS CONSUMMATED,
THIS SECTION 4.5 SHALL BE OF NO FURTHER FORCE OR EFFECT.
"SELLER"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: /s/ Jeffrey C. Carter
--------------------------------
Print Name: Jeffrey C. Carter
Print Title: President
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By: /s/ Richard S. Ziman
------------------------------------
Print Name: Richard S. Ziman
Print Title: Chairman and CEO
ARTICLE V
"AS IS, WHERE IS" SALE
5.1 "AS IS, WHERE IS" SALE. Buyer acknowledges that Seller owns and
leases the Property but has not and does not directly operate or manage the
Property. As an essential inducement to Seller to sell the Property to Buyer on
the favorable terms and conditions set forth in this Agreement, Buyer
acknowledges, understands, and agrees as follows:
(a) (i) Buyer is (or is controlled by) a sophisticated purchaser
who is familiar with this type of property; (ii) except as expressly set forth
herein, neither Seller nor
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any of its agents, brokers, officers, directors, partners, shareholders, or
employees has made or will make any representations or warranties of any kind
whatsoever, whether oral or written, express or implied, with respect to the
Property, including, without limitation, with respect to the economic value of
the Property, adequacy of utilities serving the Property, the fitness or
suitability of the Property for Buyer's intended uses or the present use of the
Property, or the physical condition, occupation, or management of the Property,
its compliance with applicable statutes, laws, codes, ordinances, regulations,
or requirements relating to occupancy, leasing, zoning, subdivision, removal of
architectural, physical, or communications barriers, planning, building, fire,
safety, health or environmental matters (including, without limitation, the
presence or absence of asbestos or toxic or hazardous substances or materials),
compliance with covenants, conditions, and restrictions (whether or not of
record), other local, municipal, regional, state, or federal requirements, or
other statutes, laws, codes, ordinances, regulations, or requirements; and (iii)
except as expressly provided herein, Buyer will be purchasing the Property in
its "AS IS, WHERE IS" condition and "WITH ALL FAULTS," and except as expressly
provided herein or in the Documents, Seller expressly disclaims and negates, as
to the Personal Property and all of the other Property: (A) any implied or
express warranty of merchantability; (B) any implied or express warranty of
fitness for a particular purpose; and (C) any implied warranty with respect to
the condition of the Property, the past or projected financial condition of the
Property (including, without limitation, the income or expenses thereof), or the
uses permitted on, the development requirements for, or any other matter or
thing relating to all or any portion of the Property. Pursuant to Section 5.2
hereof, Buyer has been or will be afforded the opportunity to make any and all
inspections of the Property and such related matters as Buyer may reasonably
desire, subject to the rights of the tenants and other current occupants of the
Property.
(b) In addition, but without limiting the generality of subsection
(a) above, except as expressly represented or warranted in Section 10.2 below or
otherwise provided herein: (i) all documents, reports, studies, and other
information or materials delivered or disclosed to Buyer by Seller, including,
without limitation, the Environmental Assessments (collectively, the
"INFORMATION"), are being provided to Buyer for informational purposes only and
only as an accommodation to Buyer; (ii) unless expressly stated otherwise, all
of the Information relates to the period from and after Seller's acquisition of
title to the Property, and except for environmental information that Seller has
in its possession, Seller need not provide any documents, reports, studies, or
other information or materials regarding any aspect of Seller's relationship
with Seller's predecessor(s)-in-title; (iii) Seller has not made, is not making,
and will not make any representation, warranty, or promise of any kind, express
or implied, concerning the accuracy or completeness of all or any part of the
Information; and (iv) any inaccuracy, incompleteness, or deficiency in any part
of the Information shall be solely the risk and responsibility of Buyer, shall
not be chargeable in any respect to Seller, and shall not form the basis of any
claims by Buyer against any person or entity that prepared, authored, compiled,
or created any part of the Information, such claims being expressly waived and
relinquished by Buyer. If Buyer chooses, in Buyer's sole and absolute
discretion, not to procure a new phase I environmental assessment of the
Property with Buyer's own
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consultant, then Seller shall provide reasonable assistance (so long as such
assistance shall be at no cost to Seller) to Buyer in obtaining a reliance
letter from CET Environmental Services, Inc.,the firm which prepared the
September 10, 1997, Phase I Environmental Site Assessment, entitling Buyer to
rely thereon as if the same had been addressed to Buyer.
(c) Buyer hereby absolutely and unconditionally waives and releases
Seller, to the fullest extent permitted under law, from and of any and all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, costs, and expenses with respect to all obliga tions for or
pertaining to the existence of asbestos, hazardous materials, or environmental
con tamination or conditions at, in, on, under, or from the Property arising
under or based upon any federal, state, local, or foreign laws or regulations,
or based upon common law or otherwise, whether now or hereafter in effect,
including, without limitation, all those provisions of law that exclude or may
exclude unknown or unsuspected claims from general release, provided, however,
that this waiver and release shall not release Seller from any liability for
fraud. EXCEPT FOR ANY LIABILITY OF SELLER FOR FRAUD, THIS WAIVER AND RELEASE BY
BUYER INCLUDES BUYER'S WAIVER AND RELEASE OF ANY CLAIMS UNDER SECTION 1542 OF
THE CALIFORNIA CIVIL CODE, WHICH PROVIDES, "A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR", THE PROVISIONS OF WHICH BUYER HEREBY
SPECIFICALLY ACKNOWLEDGES, AFTER CONSULTATION WITH LEGAL COUNSEL AND WITH FULL
KNOWLEDGE OF THE CONSEQUENCES OF ITS ACTIONS.
/s/ RSZ
------------------
Buyer's initials
(d) To the extent required to be operative, the disclaimers or
warranties contained herein are "conspicuous" disclaimers for purposes of any
applicable law, rule, regulation, or order, and the delivery of the
Environmental Assessment to Buyer constitutes appropriate written disclosure and
notice of hazardous substances at the Property to the extent required by Section
25359.7 et seq. of the California Health and Safety Code.
5.2 INSPECTION.
(a) Buyer and its representatives shall have the right until 3:00
p.m. Los Angeles time on November 26, 1997, to enter upon and inspect the
Property and to conduct soils, engineering, and any other tests or studies as
Buyer may reasonably desire, but only upon reasonable advance notice to Seller,
only during times reasonably chosen by Seller to minimize disruptions to the
Medical Building and the Parking Structure, and only if accompanied by a
representative of Seller (if so desired by Seller). Such entry, inspections,
tests, and studies shall not damage the Property in any respect. Buyer shall
keep the Property
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free and clear of any mechanic's or materialmen's liens arising out of any
entry, inspection, test, or study conducted by Buyer or its representatives, and
Buyer shall promptly restore the Property to its previous condition before any
such entries were made or inspections, studies, or tests were performed by Buyer
or its representatives.
(b) All entries by Buyer onto the Property shall be subject to and
conducted in accordance with all applicable laws, so as to avoid any
interference with the operations and occupancy of the Property, and to avoid any
disturbance of the tenants under the Leases or any of the guests or other
occupants of the Property.
(c) If Buyer or its representatives undertake any borings or other
disturbances of the soil, the soil shall be re-compacted to its condition
immediately before any such borings or other disturbances were undertaken, and
if reasonably requested by Seller, Buyer shall obtain, at Buyer's own expense, a
certificate from a licensed soils engineer that certifies that the soil has been
re-compacted to such condition. Buyer shall obtain Seller's consent prior to
undertaking any boring or other physical intrusion into the soil or Improvements
(d) Notwithstanding any general liability or other insurance that
may be maintained by Buyer, Buyer shall indemnify and defend Seller, Manager,
and Parking Operator and hold Seller, Manager, and Parking Operator harmless
(using counsel reasonably satisfactory to Seller) from any and all loss, cost,
liability, claim, damage, or expense (including, without limitation, reasonable
attorneys' fees and costs) that Seller, Manager, or Parking Operator may
proximately sustain or incur by reason of or in connection with any entry,
inspections, studies, or tests performed by Buyer or its representatives;
provided, however, that if Buyer's or its representatives entry, inspection,
study, or test results in the discovery of a defect in the Property, neither
Buyer nor its representatives shall be responsible for any damages suffered by
Seller, Manager, or Parking Operator as a result of such discovery, including,
without limitation, any impact on the marketability or value of the Property, so
long as Buyer and its representatives comply with all the terms and conditions
of Section 14.11 below. The indemnity obligations of Buyer under this Section
5.2(d) shall survive any termination of this Agreement, or the delivery of the
Deed and the transfer of title to the Property. If this Agreement is terminated
for any reason other than pursuant to Section 14.22(b) hereof, Buyer shall, upon
request, promptly deliver to Seller all originals and copies of any inspections,
studies, tests, surveys, or other reports made for or provided to Buyer by third
parties with respect to the Property, other than any economic studies, financial
analyses, or capital improvement and rehabilitation studies or programs relating
to the Property, and Buyer shall make no further distributions or disclosures of
any such inspections, studies, tests, surveys, and other reports, unless Buyer
is compelled to make such disclosure by a court of competent jurisdiction or
pursuant to a requirement of law.
(e) Buyer shall notify Seller and Escrow Holder in writing prior to
3:00 p.m. Los Angeles time on November 26, 1997, if Buyer, in Buyer's sole and
absolute
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discretion, disapproves of the results if its inspection of the Property. If
Buyer timely disapproves, this Agreement shall terminate and the rights and
obligations of Buyer and Seller shall be as specified in Section 14.22(a). If
Buyer fails to notify Seller and Escrow Holder in writing within the required
time period that Buyer disapproves of its inspection of the Property, Buyer
shall be deemed to have unconditionally approved all such matters.
ARTICLE VI
TITLE TO PROPERTY; APPROVALS
6.1 TITLE. At the Closing, Seller shall convey the Real Property to
Buyer by execution and delivery of the Deed. The issuance by Stewart Title
Guaranty Company (the "TITLE COMPANY") of an American Land Title Association
Owner's Policy of Title Insurance in the amount of the Purchase Price and in
conformity with the requirements of this Agreement (the "OWNER'S TITLE POLICY")
shall be conclusive evidence of Seller's delivery of appropriate title
acceptable to Buyer. Buyer acknowledges and agrees that Buyer shall have no
recourse against Seller or Seller's partners, representatives, or affiliates for
any defect in the title actually acquired by Buyer, and that Seller and Seller's
partners, representatives, and affiliates shall have no liability to Buyer based
upon any defect in the title actually acquired by Buyer. The Owner's Title
Policy shall be issued by the Title Company subject only to property taxes and
assessments not yet delinquent, and such other exceptions to title as may be
approved by Buyer pursuant to Section 6.2 hereof (collectively, the "PERMITTED
EXCEPTIONS"). The provisions of this Section 6.1 limiting Buyer's rights,
remedies, and recourse against Seller for a defect in title relating to the Real
Property shall survive the Closing.
6.2 APPROVAL OF TITLE.
(a) Buyer has received and reviewed: (i) that certain preliminary
title report dated as of September 2, 1997, at 7:30 a.m., and that certain
Supplemental Report thereto dated October 20, 1997, both concerning the Real
Property and issued by the Title Company under order number 040034243, and
copies of all documents referred to in either as encumbering the Real Property
(collectively, the "PTR"); and (ii) that certain ALTA/ACSM Land Title Survey of
the Real Property prepared by Psomas and Associates as project number 1BEV1901,
and signed and certified as of October 13, 1997 (the "SURVEY"). Buyer has
approved the condition of title to (and the Survey of) the Real Property, and
shall not object thereto except for: (x) matters first arising after the date of
the PTR; and (y) those title exceptions in Schedule B of the PTR numbered 1, 6,
7, 8, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 26, 27, and 28. With respect to
the aforementioned title exceptions, exception 1 shall be prorated through
Escrow at Closing, Seller shall cause exceptions 15, 16, 20, 21, 22, 23, and 24
to be omitted from the Owner's Title Policy as title exceptions, and Buyer
agrees exceptions 6, 7, 8, 17, 18, 19, and 26 will be updated at Closing with
title exceptions specifying the specific tenants and other occupants of the
Property.
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(b) Within seven (7) calendar days after Buyer learning of any
additional title or survey exception affecting the Real Property not noted in
the PTR or the Survey, Buyer shall notify Seller and Escrow Holder in writing if
any such matter is not acceptable to Buyer; provided, however, that Buyer may
not refuse to accept: (i) any covenant, condition, restriction, right, right of
way, or easement of record, or encroachment that does not materially and
adversely affect the continued use of the Property for the purpose for which the
Property is being used as of the Effective Date; (ii) any lien for real property
taxes and assessments not yet delinquent; (iii) applicable zoning and use
regulations of any applicable governmental authority to the extent the Property
is in conformity or compliance therewith as of the Effective Date; (iv) rights
of tenants under Leases, as tenants only, without any option to purchase or
right of first refusal for all or any portion of the Real Property; (v)
possessory interests in the Property of less than thirty (30) days' duration
arising in the ordinary course of the operation of the Medical Building or the
Parking Structure; and (vi) any mechanic's or other liens arising out of Buyer's
entry upon the Real Property. If Buyer fails to notify Seller and Escrow Holder
in writing within the required time period that Buyer disapproves of any such
additional exceptions to title, Buyer shall be deemed to have unconditionally
approved such additional exceptions to title. If Buyer timely objects to any
such additional exception(s) to title, Seller shall have seven (7) calendar days
after Seller's receipt of Buyer's written objection(s) to notify Buyer and
Escrow Holder in writing that:
(i) Seller intends to use its commercially reasonable efforts
to attempt to either (A) cause any disapproved exception(s) to be removed from
title by the Closing, or (B) obtain an endorsement reasonably acceptable to
Buyer. The procurement by Seller of a commitment for the issuance of the Owner's
Title Policy, with endorsement(s) thereto reasonably acceptable to Buyer
insuring Buyer against any title exception that was disapproved pursuant to this
Section 6.2, shall be conclusively deemed a cure by Seller of such disapproved
exception(s). Notwithstanding the foregoing, however, Seller shall not be
obligated to cause, or pay for, the removal of any disapproved exception(s) to
title; or
(ii) Seller elects not to attempt to cause any such disapproved
exception(s) to be removed from title. If Seller fails to notify Buyer and
Escrow Holder in writing of Seller's election within the required time period,
Seller shall be conclusively deemed to have elected not to cause Buyer's
disapproved exception(s) to be removed from title.
(c) If Seller gives Buyer and Escrow Holder written notice under
subsection (b)(ii) above or is deemed to have done so, Buyer shall have until
five (5) calendar days after its receipt of such notice to notify Seller and
Escrow Holder that: (i) Buyer revokes its disapproval of such exception(s) and
will proceed with the purchase of the Property without any reduction in the
Purchase Price and will take title to the Property subject to such exception(s);
or (ii) Buyer will terminate this Agreement in accordance with Section 14.22(a).
If Buyer fails to notify Seller and Escrow Holder in writing of Buyer's election
within the required time period, Buyer shall be conclusively deemed to have
revoked its disapproval of
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such exception(s) and to have elected to proceed with the purchase of the
Property and the acquisition of title to the Property subject to such
exception(s).
(d) Prior to the Closing, Seller shall not take any action or
commit or suffer any acts which would give rise to a material and detrimental
variance from the current legal description of the Real Property, or cause the
creation of any detrimental exception or encumbrance against or respecting the
Real Property, without in each case the prior written consent of Buyer, which
consent may be withheld in Buyer's sole and absolute discretion.
6.3 PERSONAL PROPERTY, LEASES, CONTRACTS, PERMITS, AND MISCELLANEOUS
PROPERTY ASSETS. At the Closing, Seller shall transfer to Buyer and Buyer shall
assume all of Seller's interest in the Personal Property and in the Leases
(including, without limitation, the Parking Agreement), the Contracts
(excluding, however, the Management Agreement, which shall be cancelled by
Seller prior to or at the Closing), the Permits, and the Miscellaneous Property
Assets by execution and delivery of the Bill of Sale and the General Assignment
and Assumption Agreement respectively. Seller and Buyer specifically waive
compliance, if any is required, with California Uniform Commercial Code,
Sections 6101, et seq., commonly referred to as the Uniform Commercial Code -
Bulk Transfers, and any similar provisions under the laws of the State of
California in effect from time to time.
6.4 APPROVAL OF DOCUMENTS. Buyer and Seller each hereby acknowledges
that the transfer documents attached hereto as exhibits (the "DOCUMENTS"), as
revised to conform to the specific terms of this Agreement (as amended from time
to time), will be used at Closing. Buyer and Seller each hereby approve the form
of all the Documents, subject to completion of any uncompleted information to be
set forth therein in accordance with the terms of this Agreement, and further
subject to the reasonable review and approval of the Title Company, and to any
other reasonable changes required to comply with federal, state, or local law.
6.5 VOTE OF SELLER'S LIMITED PARTNERS. If prior to the Closing the
Limited Partners of Seller have caused a meeting of the Partnership to be called
in accordance with Seller's Partnership Agreement, to vote to approve or
disapprove the transactions contemplated herein, or to vote to approve or
disapprove a different transaction relating to the Property (each, a
"PARTNERSHIP VOTE MEETING"), then: (i) Seller shall promptly thereafter provide
written notice of the requirement for such meeting (the "NOTICE OF REQUIRED
PARTNERSHIP VOTE") to Buyer and to Escrow Holder, together with the date set
therefor; (ii) the Closing Date provided for in Section 9.2(a) below shall be
extended to the seventh (7th) calendar day following Seller's delivery of the
result of the Partnership Vote Meeting to Buyer and to Escrow Holder; (iii)
Seller shall provide Buyer and Escrow Holder with written notice of the result
of the Partnership Vote Meeting promptly after such result becomes available;
and (iv) unless the Partnership Vote Meeting is held and written notice of the
approval by the Limited Partners of the transactions contemplated by this
Agreement is provided to Buyer and Escrow Holder by no later than February 1,
1998, either party may terminate this Agreement by
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written notice to the other party and to Escrow Holder. Seller shall be
responsible for all costs associated with conducting any Partnership Vote
Meeting, and upon the occurrence of any Limited Partner Disapproval (but not
upon any termination of this Agreement pursuant to Section 9.2(a)), Seller shall
promptly reimburse Buyer for the reasonable disbursements made by Buyer to
unaffiliated third-parties in connection with Buyer's negotiation of this
Agreement and due diligence investigation of the Property; provided, however,
that such reimbursement will be made only upon Buyer's presentation to Seller of
reasonably detailed invoices evidencing such disbursements; and further provided
that in no event shall Seller be obligated to reimburse Buyer for more than
$75,000.00 of such disbursements. Except as expressly provided in the preceding
sentence, Seller shall have no liability to Buyer for the occurrence of any
Limited Partner Disapproval.
ARTICLE VII
BUYER'S CONDITIONS PRECEDENT TO CLOSING
7.1 BUYER'S CONDITIONS PRECEDENT. The following conditions are
conditions precedent to Buyer's obligation to purchase the Property:
(a) LIMITED PARTNER DISAPPROVAL. The Limited Partners of Seller
shall not have exercised any right which they may have under Seller's
Partnership Agreement to disapprove any of the transactions contemplated by this
Agreement, or to approve a different transaction relating to the Property
inconsistent with any of the transactions contemplated herein (any such action
being referred to herein as a "LIMITED PARTNER DISAPPROVAL"). This Agreement
shall automatically terminate upon any Limited Partner Disapproval, and
thereupon, the rights and obligations of the parties hereto shall be those
described in Section 14.22(a) below.
(b) OWNER'S TITLE POLICY. The Title Company shall be irrevocably
committed to issue to Buyer the Owner's Title Policy, subject only to the
Permitted Exceptions.
(c) SELLER'S ORGANIZATIONAL DOCUMENTS. Seller shall have delivered
the following to Buyer: (i) for Seller, certified copies of Seller's Partnership
Agreement, a Certificate of Limited Partnership, all amendments or modifications
thereto, and a current certificate of good standing; and (ii) for Seller's
general partner, certified copies of its articles of incorporation and all
amendments or modifications thereto, appropriate resolutions and incumbency
certificates, and a current certificate of good standing.
(d) COMPLIANCE BY SELLER. Seller shall have complied in all
respects with each and every material covenant and condition of this Agreement
to be kept or complied with by Seller.
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(e) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller contained in Section 10.2 and elsewhere in this Agreement
shall be true and correct in all material respects when made, and shall be true
and correct in all material respects on the Closing Date, and Buyer shall have
received a certificate to that effect by a duly authorized officer of the
general partner of Seller (the liability thereunder being solely that of Seller
and not the personal liability of the officer executing the same).
(f) ESTOPPEL CERTIFICATES. Buyer shall receive, prior to the
Closing, an estoppel certificate from: (i) each tenant at the Real Property
occupying more than 4,000 net rentable square feet; and (ii) a sufficient number
of other tenants at the Real Property such that estoppel certificates shall have
been received with respect to not less than seventy percent (70%) of the
aggregate net rentable square feet at the Real Property for which Leases are in
effect on the Closing Date. Each estoppel certificate shall be in form and
substance reasonably acceptable to Buyer (such estoppel to be acceptable to
Buyer if it comports with the provisions of the respective Lease as they relate
to the delivery of estoppels by the tenant thereunder).
7.2 SATISFACTION OF CONDITIONS. Seller hereby agrees to use
commercially reasonable efforts to cause each of the conditions precedent to the
obligations of Buyer hereunder to be fully satisfied, performed, and discharged
on and as of the Closing Date.
7.3 WAIVER OF CONDITIONS. If any condition set forth in this Article
VII is not fulfilled, Buyer may, in its sole and absolute discretion, elect to
waive such condition by providing written notice of such election to Seller and
to Escrow Holder. Such waiver shall not constitute a waiver of any other
condition.
ARTICLE VIII
SELLER'S CONDITIONS PRECEDENT TO CLOSING
8.1 SELLER'S CONDITIONS PRECEDENT. The following conditions are
conditions precedent to Seller's obligation to sell the Property:
(a) LIMITED PARTNER DISAPPROVAL. No Limited Partner Disapproval
shall have occurred. This Agreement shall automatically terminate upon any
Limited Partner Disapproval, and thereupon, the rights and obligations of the
parties hereto shall be those described in Section 14.22(a) below.
(b) BUYER'S ORGANIZATIONAL DOCUMENTS. Buyer shall have delivered
the following to Seller: (i) for Buyer, certified copies of Buyer's partnership
agreement, a Certificate of Limited Partnership, all amendments or modifications
thereto, and a current certificate of good standing; and (ii) for Buyer's
general partner, certified copies of its articles of incorporation and all
amendments or modifications thereto, appropriate resolutions and incumbency
certificates, and a current certificate of good standing.
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(c) COMPLIANCE BY BUYER. Buyer shall have complied in all respects
with each and every material covenant and condition of this Agreement to be kept
or complied with by Buyer.
(d) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer contained in Section 10.1 and elsewhere in this Agreement
shall be true and correct in all material respects when made, and shall be true
and correct in all material respects on the Closing Date, and Seller shall have
received a certificate to that effect by a duly authorized officer of Buyer (the
liability thereunder being solely that of Buyer and not the personal liability
of the officer executing the same).
8.2 SATISFACTION OF CONDITIONS. Buyer hereby agrees to use commercially
reasonable efforts to cause each of the conditions precedent to the obligations
of Seller to be fully satisfied, performed, and discharged on and as of the
Closing Date. Seller and Buyer agree that with respect to Section 8.1 (a) above,
Buyer's agreement to use commercially reasonable efforts to cause such condition
precedent to be satisfied, performed, and discharged shall be deemed an
agreement by Buyer only to reasonably cooperate with Seller, at no cost to
Buyer, in connection with matters relating to a Partnership Vote Meeting.
8.3 WAIVER OF CONDITIONS. If any condition set forth in this Article
VIII is not fulfilled, Seller may, in its sole and absolute discretion, elect to
waive such condition by providing written notice of such election to Buyer and
to Escrow Holder. Such waiver shall not constitute a waiver of any other
condition.
ARTICLE IX
ESCROW AND CLOSING
9.1 DEPOSIT WITH ESCROW HOLDER AND ESCROW INSTRUCTIONS. Escrow
hereunder (the "ESCROW") shall be established with Escrow Holder at 1545
Wilshire Boulevard, Suite 600, Los Angeles, California 90017, Attention: Mr.
Mark Minsky. Upon execution of this Agreement, the parties shall deposit an
executed copy of this Agreement with Escrow Holder. This Agreement shall serve
as the instructions to Escrow Holder to consummate the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as are consistent with this Agreement and as
may be appropriate to enable Escrow Holder to comply with the terms of this
Agreement. If there is any conflict between the provisions of this Agreement and
any additional or supplementary escrow instructions, however, the terms of this
Agreement shall control.
9.2 CLOSING.
(a) Except as may be provided otherwise herein, the Closing Date
shall occur on or before the tenth (10th) calendar day following the
satisfaction or waiver of all the conditions precedent to Closing contained in
Articles VII and VIII above, but in no event later
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than February 1, 1998, unless the parties hereto agree in writing, each in its
sole and absolute discretion, to change the scheduled Closing Date.
Notwithstanding the foregoing, the parties hereto agree to use their diligent
efforts to attempt to cause the Closing Date to occur on or before December 31,
1997. If the Closing has not occurred on or before February 1, 1998, or has not
been extended in accordance with this Section 9.2(a), then either party may by
written notice to the other terminate this Agreement, and thereupon the rights
and obligations of Buyer and Seller shall be as specified in underlying Section
14.22(a).
(b) If either party has complied with the material terms and
conditions of this Agreement on or before the scheduled Closing Date but the
Closing does not occur because of a default hereunder by the other party, the
defaulting party shall be deemed to be in material default of this Agreement and
the non-defaulting party may terminate this Agreement in accordance with Section
14.22 below.
9.3 DELIVERIES BY SELLER.
(1) No less than three (3) business days prior to the Closing, Seller
shall deposit with Escrow Holder the following:
(a) One (1) original of the Deed, duly executed and acknowledged by
Seller;
(b) Four (4) originals of the Bill of Sale, duly executed by
Seller;
(c) Four (4) original counterparts of the General Assignment and
Assumption Agreement, duly executed by Seller;
(d) Two (2) original non-foreign affidavits satisfying the
requirements of Section 1445 of the United States Internal Revenue Code of 1986,
as amended, and the requirements of Section 18805 of the California Revenue and
Taxation Code, as amended, substantially in the form of Exhibit E attached
hereto and incorporated herein by reference (the "SELLER'S NON-FOREIGN
AFFIDAVIT"), duly executed by Seller;
(e) Original copies, executed by or on behalf of Seller, of any
required real estate transfer tax declarations, or any similar documentation
required to evidence the payment of any tax imposed by any state, county, or
municipality on the transaction contemplated hereby; and
(f) Such additional articles of incorporation, agreements or
certificates of partnership, resolutions, authorizations, bylaws,
certifications, or other corporate, partnership, or trust documents or
agreements relating to Seller and Seller's partners as Buyer or Escrow Holder
shall reasonably require in connection with this transaction.
(2) At least one (1) business day before the Closing, Seller shall
deposit with Escrow Holder the following:
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(a) Any other cash, documents, or instruments called for hereunder
or reasonably requested by Buyer and consistent herewith to be paid, executed,
or delivered by Seller that have not previously been delivered by Seller to
Escrow Holder.
9.4 DELIVERIES BY BUYER.
(1) No later than three (3) business days prior to the Closing, Buyer
shall deposit with Escrow Holder the following:
(a) Four (4) original counterparts of the General Assignment and
Assumption Agreement, duly executed by Buyer;
(b) Such additional articles of incorporation, agreements or
certificates of partnership, resolutions, authorizations, bylaws,
certifications, or other corporate, partnership, or trust documents or
agreements relating to Buyer as Seller or Escrow Holder shall reasonably require
in connection with this transaction; and
(c) Original copies, executed by or on behalf of Buyer, of any
required real estate transfer tax declarations, or any similar documentation
required to evidence the payment of any tax imposed by any state, county, or
municipality on the transaction contemplated hereby.
(2) At least one (1) business day before the Closing, Buyer shall
deposit with Escrow Holder the following:
(a) Good and immediately available funds sufficient to pay the
Balance, Buyer's portion of the closing costs, and any other amounts payable by
Buyer in order to permit Escrow Holder to close the Escrow which, if deposited
by Buyer prior to the Closing Date, shall be invested for Buyer's benefit at
Buyer's reasonable discretion; and
(b) Any other cash, documents, or instruments called for hereunder
or reasonably requested by Seller and consistent herewith to be paid, executed,
or delivered by Buyer or that are required for Closing hereunder that have not
been previously delivered by Buyer to Escrow Holder.
9.5 ADDITIONAL DELIVERIES BY BUYER, SELLER, AND OTHERS. Promptly after
the Closing and outside of Escrow, (1) Buyer and Seller shall arrange to deliver
to the tenants under all Leases, and to the vendors and equipment lessors under
all Contracts, fully executed notices of the sale of the Property, substantially
in the form of Exhibit F attached hereto and incorporated herein by reference;
and (2) Seller shall deliver to Buyer to the extent they are then in Seller's
possession, and have not heretofore been delivered to Buyer, the following: (a)
the original and any as-built plans and specifications for the Medical Building
and Parking Structure; (b) all unexpired warranties and guarantees which Seller
has received in connection with any work performed with respect to the Medical
Building and Parking Structure; (c) the original of all Leases, Contracts,
Permits and Estoppels Certificates; and, (d) all keys (properly tagged for
identification) for all improvements on the Property.
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9.6 PRORATIONS AND APPORTIONMENTS. Except as otherwise provided in this
Section 9.6 or elsewhere in this Agreement, all revenues from the Property and
all expenses of the Property shall be prorated and apportioned (the
"PRORATIONS") as of 11:59 p.m. on the day before the Closing Date (the "CUTOFF
TIME"), and Seller shall be charged and credited for such Prorations up to the
Cutoff Time and Buyer shall be charged and credited for all of the same after
the Cutoff Time. Prior to Closing, Buyer and Seller shall review and approve the
Prorations. Except as otherwise specifically provided below, if the actual
amounts to be prorated and apportioned are not then known, or if any additional
revenues may be received or expenses incurred after the date the Prorations are
made, the Prorations shall be made on the basis of the best evidence then
available. In particular:
(a) All revenues actually collected and all expenses, as the case
may be, under all Leases and Contracts (including, without limitation, the
Parking Agreement) shall be prorated as of the Cutoff Time based on actual
receipts received and actual days elapsed, and Seller shall not be credited with
any revenues which are delinquent as of the Closing. Any and all delinquent
rental and other revenues collected by Buyer from any tenant under any Lease
after the Closing shall be applied first to current rent then due from such
tenant, then to any delinquency due from such tenant accruing subsequent to
Closing, and thereafter Buyer shall promptly remit to Seller any balance thereof
until all delinquencies due from such tenant accruing prior to Closing have been
paid in full. For six months after the Closing, Buyer shall use commercially
reasonable efforts to collect such delinquent rents and other revenues on behalf
of Seller; provided, however, that Buyer shall not be required to commence
litigation against any party to collect such delinquent amounts.
(b) All real property taxes and assessments, personal property
taxes, occupancy taxes, and business taxes shall be prorated as of the Cutoff
Time, based on a 365-day year.
(c) No provision has been made for the proration of utility charges
(including, without limitation, telephone, gas, water, and electricity) as all
such services shall be terminated for billing purposes as of the Closing Date
and Buyer shall, prior to the Closing Date, make application for the
continuation of such services in its name. It is further anticipated that in
connection with all such services, the meters will be read as nearly as possible
to the Cutoff Time, and that Seller shall be responsible for paying the bills
for such services during Seller's ownership of the Property up to the Cutoff
Time, and that Buyer shall be responsible for the payment of all such utility
accounts thereafter. If any such utility accounts are not in fact handled in
this manner, they shall be prorated at Closing based upon the best available
information and settled within ninety (90) days as described in Section 9.6 (h)
below. Seller shall not assign or transfer any utility deposits to Buyer, and
all such deposits shall remain the property of Seller after the Closing, and
Seller shall be entitled to seek a refund thereof from the respective utilities.
Buyer agrees to timely provide its own deposits to any utility requiring the
same.
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(d) All cash and balances on deposit with banking institutions
relating to the Property, and the FF&E and Capital Reserves, are and shall
remain the property of Seller and are not included in the sale of the Property
contemplated hereby.
(e) Seller shall be responsible for all city business and other
taxes due (together with interest and penalties thereon, if any) relating to the
period of time prior to the Cutoff Time, and Buyer shall be responsible for the
same for the period of time after the Cutoff Time.
(f) Intentionally Omitted.
(g) Buyer shall be entitled to a credit against the Purchase Price
in the aggregate amount of any security or other deposits under the Leases (to
the extent unapplied and unrefunded as of the date hereof and substantially as
described in Schedule I attached to Exhibit D) that are not actually transferred
to and received by Buyer at the Closing, or actually refunded to any tenant for
any Lease which expires or terminates after the date hereof and prior to the
Closing Date.
(h) At the Closing, Buyer shall deposit into Escrow, in good and
immediately available funds, any additional amount required to cover Prorations
and other charges to Buyer which have been determined prior to close of Escrow
in accordance with this Agreement. Seller and Buyer shall settle any Prorations
made at close of Escrow which were uncertain or which proved to be in error, or
which were disputed at close of Escrow in accordance with Section 9.6 (i) below,
within ninety (90) calendar days after the Closing Date, and notwithstanding
anything to the contrary contained herein, Seller and Buyer hereby agree that
thereafter, no further Proration adjustments shall be made. In the event that
either party hereto receives amounts that are due to the other under the terms
of this Section 9.6, such amounts shall be paid to the party entitled thereto
within thirty (30) calendar days of receipt by the other of such amount, which
payment shall be accompanied by a calculation thereof together with such
documentation as may be reasonably necessary to support such calculation.
(i) If Seller and Buyer are unable, after negotiating in good
faith, to agree upon any particular Proration item, or the amount thereof, by
the Closing Date, then so long as the aggregate of all such disputed Proration
items does not exceed $200,000.00, the Closing shall nevertheless occur, and
proration adjustments shall be made, on a tentative basis as reasonably proposed
by Buyer, with any differences between the amounts proposed by Buyer and the
amounts proposed by Seller deposited by Buyer in an escrow with the Title
Company under the Title Company's form of strict joint order escrow. Promptly
after Closing, Buyer and Seller shall meet and attempt in good faith to resolve
any differences between them with regard to any item of Proration in dispute.
(j) The provisions of this Section 9.6 shall, except to the extent
expressly provided otherwise, survive the Closing for a period of ninety (90)
calendar days.
9.7 COSTS AND EXPENSES. Seller shall pay: (a) all of the premium for
the CLTA coverage under the Owner's Title Policy; (b) one-half (1/2) the cost of
the Survey; (c) all
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charges to remove any title exceptions that are not Permitted Exceptions and
that Seller has elected to remove, including recording fees for the same; (d)
all costs directly related to any Partnership Vote Meeting that may be called in
accordance with the terms of this Agreement; (e) all charges for filing and
recording the Documents; (f) the commission of Broker; and (g) one-half (1/2)
the county and city documentary and other transfer taxes applicable to the
transfer of the Property to Buyer. Buyer shall pay: (i) the difference between
the cost of the CLTA coverage under the Owner's Title Policy and the cost of the
Owner's Title Policy as an ALTA (extended) title policy, the cost of all
endorsements to the Owner's Title Policy (except any endorsements obtained
pursuant to Section 6.2(b)(i)(B) which shall be Seller's responsibility), and
the cost of any lender's title policy and all endorsements thereto; (ii)
one-half (1/2) the cost of the Survey; and (iii) one-half (1/2) the county and
city documentary and other transfer taxes applicable to the transfer of the
Property to Buyer. Except as otherwise expressly herein provided, each party
hereto agrees to bear and pay for its own account the fees and disbursements of
its own counsel, accountants, appraisers, engineers, and other advisors in
connection with the negotiation and preparation of this Agreement and the close
of Escrow.
9.8 INSURANCE. Buyer acknowledges that Seller will cause policies of
insurance maintained by Seller to be terminated with respect to the Property as
of the Closing Date. Buyer shall be responsible for obtaining its own insurance
as of the Closing Date and thereafter.
9.9 CLOSE OF ESCROW. Provided that: (i) Escrow Holder has received the
documents and funds described in Sections 9.3, 9.4, 9.5, 9.6, and 9.7 hereof;
(ii) Escrow Holder has not received prior written notice from either party to
the effect that an agreement of either party made hereunder has not been
performed or to the effect that any condition set forth herein has not been
satisfied or waived; (iii) Buyer has not terminated this Agreement as permitted
herein; (iv) Seller has not terminated this Agreement as permitted herein; and
(v) the Title Company has issued or is unconditionally prepared and committed to
issue to Buyer the Owner's Title Policy, Escrow Holder is authorized and
instructed at 8:00 a.m., Los Angeles time, on the scheduled Closing Date to:
(a) retain for Escrow Holder's own account funds sufficient to
reimburse Escrow Holder for its out-of-pocket costs paid to unrelated third
parties, disburse to Title Company the fees and expenses incurred in connection
with the issuance of the Owner's Title Policy, and disburse to any other persons
or entities entitled thereto the amount of any other closing costs, all in
accordance with Buyer's and Seller's settlement statements prepared by Escrow
Holder and pre-approved by the parties hereto in writing (the "CLOSING
STATEMENTS");
(b) record or file in the appropriate office any documents or
instruments necessary to remove any exceptions to title which are not Permitted
Exceptions;
(c) request that the amount of any documentary transfer tax due be
shown on separate papers and be affixed to the Deed by the County Recorder only
after the permanent record is made;
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(d) cause the Deed to be recorded in the County Recorder's Office
of Los Angeles County, California, and deliver two (2) conformed copies thereof
to each of Buyer and Seller;
(e) deliver the Purchase Price to Seller in the manner specified by
Seller in separate written instructions to Escrow Holder, as adjusted by
Seller's and Buyer's share of Prorations and costs and expenses described in
Section 9.7 above;
(f) deliver to Buyer two (2) fully executed originals or original
counterparts of each of the Bill of Sale, the General Assignment and Assumption
Agreement, and the Seller's Non-Foreign Affidavit; and deliver to Seller two (2)
fully executed original counterparts of the General Assignment and Assumption
Agreement;
(g) return any remaining funds to Buyer after all payments pursuant
to the terms of this Agreement; and
(h) cause the Title Company to issue the Owner's Title Policy to
Buyer.
9.10 NOTIFICATION; CLOSING STATEMENTS. If Escrow Holder cannot comply
with the instructions herein (or as may be provided later), Escrow Holder is not
authorized to cause the recording or delivery of any documents or funds, and
Escrow Holder shall notify the parties of such fact in writing and without
delay. If such inability continues for a period of twenty (20) business days
(unless either Seller or Buyer is then in default hereunder, in which event the
provisions of Sections 9.2(b), and either 14.22(b) or 14.22(c) shall apply, and
the Deposit and any interest earned thereon shall be disbursed in accordance
with such sections), either Seller or Buyer may, upon written notice to the
other party and to Escrow Holder, demand the return of its deposits, and Escrow
Holder shall return said deposits to the respective depositor, and the rights
and obligations of the parties shall thereafter be governed by Section14.22(a).
9.11 POST-CLOSING DELIVERIES BY ESCROW HOLDER. Immediately after the
Closing, Escrow Holder shall deliver to Buyer and Seller, respectively, at their
addresses listed in Section 14.1 hereof, a true, correct, and complete copy of
the Seller's and Buyer's Closing Statements, in the form customarily prepared by
Escrow Holder, as well as all other instruments and documents to be delivered to
Buyer and Seller.
ARTICLE X
REPRESENTATIONS, WARRANTIES, AND COVENANTS
10.1 BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants to Seller as follows:
(a) Buyer is a limited partnership, duly created, validly existing,
and in good standing under the laws of the State of Maryland with full right,
power, and authority to
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take title to the Property, and to enter into and otherwise perform and comply
with all the terms and conditions of this Agreement.
(b) This Agreement and all documents executed by Buyer that are to
be delivered pursuant to this Agreement are, and at the time of Closing will be,
duly authorized, executed, and delivered by Buyer; and this Agreement and all
documents executed by Buyer that are to be delivered to pursuant to this
Agreement are, and at the Closing will be, legal, valid, and binding obligations
of Buyer, enforceable in accordance with their terms (except as enforcement may
be limited by bankruptcy, insolvency or similar laws) and do not, and at the
time of Closing will not, violate any provisions of any agreement or judicial
order to which Buyer is a party or to which Buyer is subject.
(c) Except as may be expressly provided otherwise in this Agreement
or in the documents or instruments being executed and delivered in connection
with this Agreement, no representations of any kind (whether oral or written,
express or implied) have been made by the Seller to Buyer, and Buyer hereby
represents and warrants to Seller that Buyer is investing in the Property solely
in reliance on Buyer's own investigations and evaluation thereof and the
representations and warranties of Seller set forth herein, and not in reliance
on anything else.
10.2 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer as follows:
(a) Seller is a Delaware limited partnership duly created, validly
existing, and in good standing under the laws of the State of Delaware, and,
subject to the rights of Seller's Limited Partners as set forth in Section 7.05
of Seller's Partnership Agreement, including, without limitation, the right to
vote to disapprove the transactions contemplated by this Agreement in accordance
with a Partnership Vote Meeting, Seller has the full right, power, and authority
to own and convey the Property and to enter into and otherwise perform and
comply with all the terms and conditions of this Agreement. Subject to such
rights of Seller's Limited Partners, the general partner of Seller has the full
right, power, and authority to bind Seller with respect to this Agreement and
the transactions contemplated hereby.
(b) Subject to the rights of Seller's Limited Partners as set forth
in Section 7.05 of Seller's Limited Partnership Agreement, including, without
limitation, the right to vote to disapprove the transactions contemplated by
this Agreement in accordance with a Partnership Vote Meeting, this Agreement and
all documents executed by Seller that are to be delivered pursuant to this
Agreement are, and at the time of Closing will be, duly authorized, executed,
and delivered by Seller, and this Agreement and all documents executed by Seller
that are to be delivered pursuant to this Agreement are, and at the time of
Closing will be, legal, valid, and binding obligations of Seller, enforceable in
accordance with their terms (except as enforcement may be limited by bankruptcy,
insolvency or similar laws) and do not,
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and at the time of Closing will not, violate any provisions of any agreement or
judicial order to which Seller is a party or to which Seller or the Property is
subject.
(c) Schedule I attached to Exhibit D to this Agreement is in all
material respects a true and complete list of all of the Leases and Contracts
currently in effect at the Real Property. To Seller's knowledge, no default has
occurred and is continuing under the Leases or the Contracts except as disclosed
in Schedule 10.2(c) attached hereto and incorporated herein by reference.
(d) Seller has not received written notice of any violation of any
law, ordinance, order or requirement of any governmental authority, agency, or
officer having jurisdiction against or affecting the Property, or with respect
to the operation thereof for its currently intended purpose, which have not
previously been complied with.
(e) To Seller's knowledge, there are no actions, investigations,
suits, or proceedings pending or threatened with respect to the Property, or the
ownership or operation thereof, or any part thereof (other than those reasonably
believed by Seller to be covered by insurance), nor any judgments, orders,
awards, or decrees currently in effect against Seller with respect to the
ownership or operation of any part of the Property, which have not been fully
discharged prior to the date hereof.
(f) To Seller's knowledge, there is no construction at the Real
Property that would give rise to a mechanic's lien.
(g) To Seller's knowledge, the Personal Property is not subject to
any encumbrances, conditional sales contracts, or other liens.
(h) Seller has not received written notice of any threatened
condemnation, expropriation, eminent domain or similar proceeding affecting all
or any part of the Real Property.
(i) Seller does not have any employees at the Medical Building or
at the Parking Structure.
(j) Seller has not committed or obligated itself to sell the
Property to any party other than Buyer.
(k) As of the Closing, there will be no contracts relating to the
Property between Seller and any entity which controls, is controlled by, or is
under common control with Seller.
(l) To Seller's knowledge, Seller has provided all environmental
information it has in its possession to Buyer.
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(m) John Ng and Timothy Needham are the two officers of the general
partner of Seller who are most familiar with, and have primary responsibility
for, Seller's ownership and operation of the Property
(n) As used herein, the term "Seller's knowledge" shall mean the
actual knowledge of John Ng or Timothy Needham, officers of the general partner
of Seller.
(o) As used herein, the term "Seller has not received" shall
mean neither John Ng nor Timothy Needham, officers of the general partner of
Seller, has personally received such item, and neither John Ng nor Timothy
Needham has actual knowledge of any partner of Seller receiving such item.
10.3 CONTINUATION AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
LIMITATIONS ON LIABILITY THEREFOR. All representations and warranties made by
the respective parties and contained in this Agreement are intended to 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, the
delivery of the Deed, and transfer of title to the Property, for a period of six
(6) months, and shall not be deemed to have been waived at the Closing, or
merged into any of the documents of conveyance or transfer to be delivered by
Seller at the Closing; provided, however, no person, firm, or entity shall have
any liability or obligation with respect to any representation or warranty
herein contained unless on or prior to a date which is not later than six (6)
months following the Closing Date the party seeking to assert liability under
any such representation or warranty shall have notified the other party hereto
in writing setting forth specifically the representation or warranty allegedly
breached, and a description of the alleged breach in reasonable detail. All
liability or obligation of either party hereto under any representation or
warranty shall lapse and be of no further force or effect with respect to any
matters not contained in a written notice delivered as contemplated above on or
prior to six (6) months following the Closing. Notwithstanding the foregoing,
Buyer acknowledges and agrees that: (a) Seller shall have no liability
whatsoever with respect to any representation or warranty as to which Buyer has
any actual knowledge prior to Closing that such representation or warranty made
by Seller pursuant to this Agreement or the other Documents was incorrect,
false, or misleading in any way, and (b) neither party shall have any right to
pursue remedies against the other for an untrue representation or the breach of
a warranty unless and until the actual cumulative damages of the claiming party
as a result of such incorrectness, falsity, or breach are in excess of
$100,000.00 (the aforesaid amount being a threshold for enforcement and not a
deductible from liability).
ARTICLE XI
POSSESSION
Possession of the Property shall be delivered to Buyer immediately
following the Closing, subject only to the Permitted Exceptions.
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ARTICLE XII
OPERATION OF THE PROPERTY
Regarding the operation, maintenance, and repair of the Property
between the Effective Date and the Closing Date (or earlier termination of this
Agreement): (a) Seller shall operate the Property in the ordinary course of
business, but Seller shall not be required to make any capital improvements to
the Property; (b) Seller agrees that it will not enter into any new lease or
contract with respect to any portion of the Property, or terminate or amend any
Lease or Contract except (i) with the prior written consent of Buyer (not to be
unreasonably withheld or delayed) or (ii) to the extent same is in the ordinary
course of business and is terminable upon thirty (30) calendar days notice
without penalty; (c) Seller shall not take any action, or suffer any action to
be taken in its name or on its behalf, the effect of which would cause any of
the representations or warranties of Seller herein contained to be untrue or
incorrect in any material respect on and as of the Closing Date, or which would
have the effect of causing Seller to be unable to satisfy or perform any of the
material conditions precedent to the obligations of Buyer hereunder; provided,
however, that this provision shall not apply to any Partnership Vote Meeting or
any matters arising therefrom; (d) Seller shall at all times (i) promptly
deliver to Buyer copies of any written notices received by Seller from any
person, firm, corporation, or governmental agency alleging any default on the
part of Seller under any contract or agreement relating to the Property, or any
part thereof, or any violation of any applicable law or ordinance with respect
thereto which, if the facts alleged therein were true, would constitute a breach
of any representation or warranty of Seller herein contained or adversely affect
the ability of Seller to satisfy any condition precedent to the obligations of
Buyer hereunder, and (ii) promptly advise Buyer in writing of any material
change in Seller's representations and warranties made in Section 10.2 above;
(e) Seller will not consent to, authorize, or approve any change in zoning or
similar land use classification for the Land or any part thereof; and (f) Seller
shall use commercially reasonable efforts to keep its existing policies of
insurance, or substantially equivalent policies of insurance, in full force and
effect.
ARTICLE XIII
LOSS BY CASUALTY; CONDEMNATION
13.1 DAMAGE OR DESTRUCTION. Prior to the Closing Date, the entire risk
of loss or damage to the Property by earthquake, flood, landslide, fire,
hurricane, tornado, or other casualty shall be borne by Seller. If prior to the
Closing any part of the Property is damaged by earthquake, flood, landslide,
fire, hurricane, tornado or other casualty, Seller shall promptly notify Buyer
of such fact. In the event that the estimated cost to repair any such damage
exceeds, in the aggregate, $750,000.00, Buyer shall have the right to terminate
this Agreement upon written notice to Seller within ten (10) business days of
receipt of Seller's notice of the damage, in which event this Agreement shall
terminate. In the event that Buyer elects not to timely terminate this Agreement
as a result of any such damage, or the estimated cost of repair (as reasonably
determined by Seller) does not exceed, in the aggregate, $750,000.00, Seller
shall, at the Closing, assign and turn over, and Buyer shall be entitled to
receive and keep, all insurance proceeds payable to Seller with respect to such
damage, Buyer
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shall receive a credit against the Purchase Price in the amount of any
applicable insurance deductible, and the parties shall proceed to Closing
pursuant to the terms hereof without further modification of the terms of this
Agreement.
13.2 CONDEMNATION. If prior to the Closing Date all or any portion of
the Property is taken by a condemnation or eminent domain (or is the subject of
a pending or contemplated taking which has not been consummated), Seller shall
promptly notify Buyer of such fact (the "CONDEMNATION NOTICE"). If in the
reasonable opinion of Buyer the taking materially interferes or would materially
interfere with the economic operation or use of the Property as it is operated
on the Effective Date, then Buyer may elect to terminate this Agreement by
written notice to such effect given to Seller within ten (10) business days
after receipt by Buyer of the Condemnation Notice, in which event this Agreement
shall terminate. If, under such circumstances, Buyer does not so elect to timely
terminate this Agreement, then the Closing shall take place as herein provided
without any abatement of the Purchase Price, and at the Closing Seller shall
assign and turn over to the Buyer, and Buyer shall be entitled to receive and
keep, all of Seller's right, title, and interest in and to any condemnation
award which may be payable to Seller on account of such condemnation. If, prior
to the Closing Date, one or more portions of the Real Property shall be taken
(or are threatened to be taken) by exercise of right of condemnation or eminent
domain in a manner which does not, in the reasonable opinion of Buyer,
materially interfere with the economic operation or use of the Property, then
neither party shall have any right to terminate its obligations hereunder by
reason thereof, but at the Closing Seller shall turn over and assign to Buyer
all of Seller's right, title, and interest in and to any condemnation awards
which may be payable to Seller on account of such condemnation. For purposes
hereof, the term "taking" shall include any temporary as well as permanent
taking.
ARTICLE XIV
MISCELLANEOUS
14.1 NOTICES. Any communication, notice, or demand of any kind
whatsoever that either party may be required or may desire to give to or serve
upon the other shall be in writing, addressed to the parties at the addresses
set forth below, and delivered by personal service, by Federal Express or other
overnight delivery service, by facsimile transmission, or by registered or
certified mail, postage prepaid, return receipt requested:
If to Seller: Beverly Hills Medical Office Partners, L.P.
c/o Medical Office Properties, Inc..
3 World Financial Center, 29th Floor
New York, New York 10285-2900
Attention: Mr. Jeffrey C. Carter
Facsimile Number: (212) 528-9696
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With a copy to: Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Rand S. April, Esq.
Facsimile Number: (213) 687-5600
If to Buyer: Arden Realty, Inc.
9100 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212
Attention: Ms. Brigitta B. Troy,
Director of Acquisitions
Facsimile: (310) 274-6218
With a copy to: Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Attention: Peter M. Weil, Esq.
Facsimile: (310) 556-2920
If to Escrow Holder Commerce Escrow Company
1545 Wilshire Boulevard, Suite 600
Los Angeles, California 90017
Attention: Mr. Mark Minsky
Facsimile: (213) 484-0417
If to Title Company Stewart Title Guaranty Company
c/o Stewart Title of California, Inc.
505 North Brand Boulevard, Suite 1200
Glendale, California 91203
Attention: Mr. Larry McGuire and
Ms. Denise Anthony
Facsimile: (818) 241-9173
Any such notice shall be deemed delivered if sent as follows: (a) if
personally delivered, on the date of delivery to the address of the person to
receive such notice as evidenced by a signed receipt; (b) if sent by Federal
Express or other overnight courier service, on the date of delivery to the
address of the person to receive such notice as evidenced by a signed receipt;
(c) if sent by facsimile transmission, on the date transmitted to the person to
receive such notice if sent by 5:00 p.m., Eastern time, and on the next business
day if sent after 5:00 p.m., Eastern time; or (d) if mailed, on the date of
delivery to the address of the person to receive such notice as evidenced by a
signed receipt. Any notice sent by facsimile transmission must be confirmed by
personally delivering, sending by courier, or mailing a
31
<PAGE> 36
copy of the notice sent by facsimile transmission. Any party may change its
address for notice by written notice given to the other at least ten (10)
calendar days before the effective date of such change in the manner provided in
this Section 14.1.
14.2 BROKERS AND FINDERS.
(a) If and only if the sale contemplated herein actually closes (as
evidenced by the recordation of the Deed), Seller has agreed to pay a brokerage
commission to Ramsey- Shilling Commercial Real Estate Services, Inc., or its
designee ("BROKER") pursuant to a separate agreement with Broker. Seller shall
not pay any brokerage commission or finder's fee to any broker or finder
retained by Buyer, and Buyer shall be solely responsible for any such commission
or fee.
(b) In the event of any claim for broker's fees, finder's fees,
commissions, or other similar compensation in connection herewith: (i) Buyer, if
such claim is based upon any agreement alleged to have been made by Buyer, shall
indemnify Seller against, defend, and hold Seller harmless (using counsel
reasonably satisfactory to Seller) from any and all loss, cost, liability,
claim, damage, and expense (including, without limitation, reasonable attorneys'
fees and costs) that Seller sustains or incurs by reason of such claim; and (ii)
Seller, if such claim is based upon any agreement alleged to have been made by
Seller (including any agreement with Broker), shall indemnify Buyer against,
defend, and hold Buyer harmless (using counsel reasonably satisfactory to Buyer)
from any and all loss, cost, liability, claim, damage, and expense (including,
without limitation, reasonable attorneys' fees and costs) that Buyer sustains or
incurs by reason of such claim. The provisions of this Section 14.2(b) shall
survive the termination of this Agreement or the Closing.
14.3 ASSIGNMENT. Neither all nor any portion of Buyer's interest under
this Agreement may be sold, assigned, encumbered, conveyed, or otherwise
transferred, whether directly or indirectly, voluntarily or involuntarily, or by
operation of law or otherwise (including, without limitation, by a transfer of
any general partnership interest in Buyer) (collectively, a "TRANSFER"), without
the prior written consent of Seller, which consent may be granted or denied in
Seller's sole and absolute discretion. Any attempted Transfer without Seller's
consent shall be null and void. Buyer's request for Seller's consent to any
Transfer shall set forth in writing the details of the proposed Transfer,
including, without limitation, the name, ownership, and financial condition of
the prospective transferee and the financial details of the proposed Transfer.
In addition, Buyer shall provide Seller with copies of all Transfer
documentation, certified by Buyer to be true, correct, and complete, and with
all other information which Seller may reasonably request. No transfer by Buyer
or by Seller, whether with or without the other party's consent, shall operate
to release the transferring party or alter the transferring party's primary
liability to perform its obligations under this Agreement.
32
<PAGE> 37
14.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
administrators and permitted successors and assigns.
14.5 AMENDMENTS. This Agreement may be amended or modified only by a
written instrument executed by both parties.
14.6 INTERPRETATION. Words used in the singular shall include the
plural, and vice-versa, and any gender shall be deemed to include the other. 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. Further, each party hereby acknowledges that such party and
its counsel, after negotiation and consultation, have reviewed and revised this
Agreement. As such, the terms of this Agreement shall be fairly construed and
the rule of construction, to the effect that any ambiguities herein should be
resolved against the drafting party, shall not be employed in the interpretation
of this Agreement or any amendments, modifications, or exhibits hereto or
thereto.
14.7 GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of California, without
regard to its principles of conflicts of law.
14.8 ENTIRE AGREEMENT. This Agreement, including the exhibits attached
hereto, constitutes the entire agreement between Buyer and Seller pertaining to
the subject matter hereof and supersedes all prior agreements, understandings,
letters of intent, negotiations, and discussions of the parties, whether oral or
written, and there are no warranties, representations, or other agreements,
express or implied, made to either party by the other party in connection with
the subject matter hereof except as specifically set forth herein or in the
documents delivered pursuant hereto or in connection herewith.
14.9 ATTORNEYS' FEES AND COSTS. If either Buyer or Seller brings any
suit or other proceeding with respect to the subject matter or the enforcement
of this Agreement or any of the Documents, the prevailing party (as determined
by the court, agency, or other authority before which such suit or proceeding is
commenced), in addition to such other relief as may be awarded, shall be
entitled to recover reasonable attorneys' fees and costs, and costs of
investigation actually incurred. The foregoing includes, without limitation,
reasonable attorneys' fees and costs, 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 Section 101 et seq., or any successor statutes. The
provisions of this Section 14.9 shall survive the Closing or any termination of
this Agreement.
14.10 TIME OF THE ESSENCE. Time is of the essence with respect to all
matters contemplated by this Agreement.
33
<PAGE> 38
14.11 CONFIDENTIALITY. All information, surveys, reports, tests, and
studies relating to the Property obtained by Buyer before or after the Effective
Date, either by the observations and examinations of its agents and
representatives or by Seller's disclosure, shall remain confidential. Prior to
the Closing, Buyer and Seller agree that, to the extent reasonably practical,
they shall keep the contents of this Agreement confidential and that no
publicity or press release to the general public or otherwise with respect to
this transaction shall be made by either party without the prior written consent
of the other party, which consent may be denied in the sole and absolute
discretion of either party; provided, however, that Buyer and Seller shall be
entitled to make any disclosures that either determines, in its reasonable
discretion, are necessary or desirable, to comply with requirements of the
Securities and Exchange Commission or any other governmental entity, or to be
disclosed or made available to the Limited Partners of Seller. Notwithstanding
the foregoing, nothing herein contained shall be deemed to limit or impair in
any way Seller's or Buyer's right or ability to disclose the details of the
herein contemplated transaction to their respective counsel, consultants,
advisors or accountants, provided that each such person is informed of the
confidentiality requirements hereof and agrees to abide by the same, or to such
persons as they deem necessary in order to enable either of them to comply with
any requirements of law or any court order. Moreover, nothing herein contained
shall limit or impair in any way Buyer's right or ability to disclose the
details of the herein contemplated transaction to persons or entities who in
good faith are considering providing debt or equity financing to Buyer for
purposes of this transaction, or to governmental agencies in connection with the
application by Buyer for any required license or permit, or for transfer of any
Permit from Seller and Buyer. Finally, Seller acknowledges that Buyer may
release an announcement concerning its purchase of the Property at the Closing,
and Buyer agrees that in connection with any press release by Buyer, including,
without limitation, the press release by Buyer at the Closing, Buyer will
provide an advance copy to Seller for Seller's review and approval, such review
and approval to be completed within two (2) business days of receipt thereof.
Unless the press release names Seller or any of Seller's affiliates, or contains
a misstatement of fact, (in either of which cases Seller's suggested revisions
to the press release shall be made), Buyer need not make Seller's suggested
revisions to such press release. The confidentiality provisions of this Section
14.11 shall survive the Closing.
14.12 NO WAIVER. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
14.13 FURTHER ACTS. Each party, at the request of the other, shall
execute, acknowledge (if appropriate), and deliver such additional documents,
and do such other additional acts, whether before, at, or after Closing, as may
be reasonably required in order to accomplish the intent and purposes of this
Agreement.
34
<PAGE> 39
14.14 EXHIBITS. Exhibits A through F inclusive, and Schedule 10.2(c),
are attached hereto and incorporated herein by reference.
14.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, but all
of which when taken together shall constitute one and the same instrument, with
the same effect as if all of the parties to this Agreement had executed the same
counterpart.
14.16 NO INTENT TO BENEFIT THIRD PARTIES. Seller and Buyer do not
intend by any provision of this Agreement to confer any right, remedy, or
benefit upon any third party, and no third party shall be entitled to enforce,
or otherwise shall acquire any right, remedy, or benefit by reason of, any
provision of this Agreement.
14.17 PERFORMANCE DUE ON DAY OTHER THAN BUSINESS DAY. If the time
period for the performance of any act called for under this Agreement expires on
a Saturday, Sunday, or any other day on which banking institutions in the State
of California or in the State of New York are authorized or obligated by law or
executive order to close (a "HOLIDAY"), the act in question may be performed on
the next succeeding day that is not a Saturday, Sunday, or Holiday.
14.18 EXPENSES OF PURCHASE AND SALE. Except as otherwise provided in
this Agreement, Seller and Buyer shall each bear its own direct and indirect
expenses incurred in connection with the negotiation and preparation of this
Agreement and the consummation and performance of the transactions contemplated
hereby.
14.19 SEVERABILITY. Any provision or part of this Agreement which is
invalid or unenforceable in any situation in any jurisdiction shall, as to such
situation and such jurisdiction, be ineffective only to the extent of such
invalidity and shall not affect the enforceability of the remaining provisions
hereof or the validity or enforceability of any such provision in any other
situation or in any other jurisdiction, unless such invalidity materially
changes the transaction set forth herein, in which event the Deposit shall be
returned to Buyer and this Agreement shall terminate.
14.20 NO RECORDING. Buyer shall not record this Agreement or any notice
thereof. If such recording shall occur, Seller shall have, in addition to all
other remedies for breach provided by law, the right to terminate this Agreement
by written notice to Buyer.
14.21 QUITCLAIM. In the event of the termination of this Agreement for
any reason, Buyer shall deliver to Seller a quitclaim deed and such other
written instruments as Seller may reasonably require, executed and acknowledged
in recordable form, transferring to Seller any and all rights of Buyer in the
Property or any part thereof or interest therein; provided, however, that Seller
shall prepare any such instruments and shall pay all charges, taxes and fees
associated with recording the same.
35
<PAGE> 40
14.22 TERMINATION OF AGREEMENT.
(a) If this Agreement is terminated pursuant to Sections 5.2(e),
6.2(c), 7.1(a), 8.1(a), 13.1, 13.2, or 14.19 hereof, or by reason of the failure
of any material condition precedent to Seller's or Buyer's obligations to occur
(other than the failure of any material condition precedent resulting from the
material uncured breach by Seller or Buyer of any of the provisions hereof,
which are addressed separately by Sections 14.22(b) and (c) below), the Deposit
(together with all interest earned on such Deposit) shall be returned to Buyer
and Escrow Holder shall return all other cash, documents, instruments, and other
items theretofore deposited into Escrow to the depositor party, without any
further instruction to Escrow Holder from either Seller or Buyer. Thereafter,
this Agreement shall be null and void and of no further force or effect and
neither party shall have any further rights or obligations hereunder, except as
provided in Sections 5.2 (a), 5.2(c), 5.2(d), 14.2(b), 14.9, and 14.11 hereof,
and other than those rights and obligations that, by their terms, survive the
termination of this Agreement. In the event of such termination, the costs of
the Title Company and Escrow Holder shall be borne equally by Buyer and Seller,
and each party shall bear its own costs (including attorneys' and accountants'
fees and costs) incurred hereunder.
(b) This Agreement may be terminated by Buyer as a result of a
material breach by Seller of any of the provisions hereof that remains uncured
for more than fifteen (15) calendar days after Buyer provides written notice to
Seller of such breach (provided, however, that if such breach cannot reasonably
be cured within said fifteen (15) calendar day period, and Seller commences to
cure such breach within said fifteen (15) calendar day period and thereafter
diligently prosecutes the same, Seller shall be entitled to sixty (60) calendar
days to complete such cure). In the event of any such termination by Buyer, the
Deposit (together with all interest earned on such Deposit) shall be delivered
to Buyer by Escrow Holder and Escrow Holder shall return all other cash,
documents, instruments, and other items theretofore deposited into Escrow to the
depositor party, without any further instruction to Escrow Holder from either
Seller or Buyer. Thereafter, this Agreement shall be null and void and of no
further force or effect and neither party shall have any further rights or
obligations hereunder, except: (i) as provided in Sections 5.2 (a), 5.2(c),
5.2(d), 14.2(b), 14.9, and 14.11 hereof, and in this Section 14.22(b); (ii)
those other rights and obligations that by their terms survive the termination
of this Agreement; and (iii) Buyer shall have the right to either (but not both)
(x) seek specific performance of this Agreement, or (y) require Seller to
promptly reimburse Buyer for the reasonable disbursements made by Buyer to
unaffiliated third-parties in connection with Buyer's negotiation of this
Agreement and due diligence investigation of the Property; provided, however,
that such reimbursement shall be made only upon Buyer's presentation to Seller
of reasonably detailed invoices evidencing such disbursements; and further
provided that in no event shall Seller be obligated to reimburse Buyer for more
than $75,000.00 of such disbursements. Upon any termination of this Agreement
pursuant to this Section 14.22 (b), the costs of the Title Company and Escrow
Holder shall be borne by Seller.
36
<PAGE> 41
(c) This Agreement may be terminated by Seller as a result of the
material breach by Buyer of any of the provisions hereof remaining uncured for
more than fifteen (15) calendar days after Seller provides written notice to
Buyer of such breach (provided, however, that if such breach cannot reasonably
be cured within said fifteen (15) calendar day period, and Buyer commences to
cure such breach within said fifteen (15) calendar day period and thereafter
diligently prosecutes the same, Buyer shall be entitled to sixty (60) calendar
days within which to complete such cure). In the event of any such termination
by Seller, the Deposit (together with all interest earned on such Deposit) shall
be delivered to Seller by Escrow Holder in accordance with Section 4.5 hereof.
Thereafter, this Agreement shall be null and void and of no further force or
effect and neither party shall have any further rights or obligations hereunder,
except: (i) as provided in Sections 5.2(a), 5.2(c), 5.2(d), 14.2(b), 14.9, and
14.11 hereof, and in this Section 14.22(c); and (ii) those other rights and
obligations that by their terms survive the termination of this Agreement. Upon
any termination of this Agreement pursuant to this Section 14.22(c), the costs
of the Title Company and Escrow Holder shall be borne by Buyer.
14.23 WAIVER OF KNOWN DEFAULTS. Notwithstanding anything to the
contrary contained in this Agreement, if either party hereto has actual
knowledge of the default of the other party (a "KNOWN DEFAULT"), but nonetheless
elects to consummate the transactions contemplated hereby and proceeds to
Closing, then the rights and remedies of the non-defaulting party shall be
waived with respect to any such Known Default upon the Closing and the
defaulting party shall have no liability with respect thereto; provided,
however, that if the non-defaulting party elects not to consummate the
transactions contemplated hereby and not to proceed to Closing, the
non-defaulting party shall retain all of its rights and remedies hereunder.
14.24 ACCESS TO RECORDS AFTER CLOSING. Seller agrees to preserve until
three (3) years after the Closing Date all records pertaining to the operation
of the Property in its hands which are not transferred to Buyer. At or prior to
Closing, Seller shall cause Manager to deliver to Buyer at the Medical Building
all records relating to the operation of the Property in Manager's possession.
Buyer agrees to preserve at the Medical Building or its business office all
records pertaining to the operation of the Property transferred by Seller, and
all other records relating to the operation of the Property prior to the
Closing, until three (3) years after the Closing Date. Where there is a
legitimate purpose not injurious to the other party (including, without
limitation, to complete the final settlement of Prorations provided for in
Section 9.6(h)), or if there is a tax inquiry or audit, other governmental
inquiry, inquiry relating to the preparation of an audit letter by an accounting
firm, or litigation or prospective litigation to which Seller or Buyer is or may
become a party making necessary Seller's access to such records of Buyer or
making necessary Buyer's access to such records of Seller, each party, as the
case may be, will allow representatives of the other party access to such
records during regular business hours at such party's place of business for the
sole purpose of obtaining information for use as aforesaid.
37
<PAGE> 42
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above.
"SELLER"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: /s/ Jeffrey C. Carter
-------------------------------
Print Name: Jeffrey C. Carter
Print Title: President
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
-------------------------------------
Print Name:
Print Title:
ACCEPTED AND AGREED TO
on this 1 day of December, 1997:
"ESCROW HOLDER"
COMMERCE ESCROW COMPANY,
a California corporation
By: /s/ L Chi
----------------------------
Print Name: L. Chi
Print Title: Escrow Officer
38
<PAGE> 43
EXHIBIT A
LEGAL DESCRIPTION
All that certain real property, a portion of which is situated in the City of
West Hollywood and a portion of which is situated in the City of Los Angeles,
and all of which is situated in the County of Los Angeles, State of California,
described as follows:
A-1
<PAGE> 44
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOTS I AND 2, TRACT NO. 41894, PARTLY IN THE CITY OF LOS ANGELES AND PARTLY IN
THE CITY OF WEST HOLLYWOOD, AS PER MAP FILED IN BOOK 1010, PAGES 80 AND 81 OF
MAPS, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF SUNSET BOULEVARD, 90 FEET
WIDE, WITH THE CENTERLINE OF CORY AVENUE, 50 FEET WIDE, AS BOTH STREETS ARE
SHOWN ON SAID MAP OF TRACT NO. 41894, THENCE ALONG SAID CENTERLINE OF SUNSET
BOULEVARD, NORTH 89 DEGREES 43' 41" WEST 144.62 FEET; THENCE LEAVING SAID
CENTERLINE, NORTH 0 DEGREES 33' 45" EAST 44.99 FEET TO A POINT IN THE NORTHERLY
LINE OF SAID SUNSET BOULEVARD, SAID POINT BEING ALSO THE SOUTH EASTERLY CORNER
OF SAID LOT 1 AND THE POINT OF BEGINNING; THENCE ALONG THE EASTERLY LINE OF SAID
LOT, NORTH 0 DEGREES 33' 45" EAST 105.01 FEET; THENCE SOUTH 89 DEGREES 43' 41"
EAST 4.00 FEET; THENCE CONTINUING ALONG SAID EASTERLY LINE AND THE EASTERLY LINE
OF SAID LOT 2, NORTH 0 DEGREES 33' 45" EAST 120.82 FEET TO THE NORTHEASTERLY
CORNER OF SAID LOT 2; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 2, SOUTH 89
DEGREES 56' 16" WEST 29.94 FEET; THENCE NORTH 48 DEGREES 24' 39" WEST 59.22
FEET; THENCE NORTH 69 DEGREES 40' 04" WEST 9.97 FEET TO A POINT IN A NON-TANGENT
CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 74.02 FEET (A RADIAL LINE OF SAID
CURVE TO SAID POINT BEARS SOUTH 69 DEGREES 36' 24" EAST) ; THENCE SOUTHWESTERLY
ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 59 DEGREES 53' 49" A DISTANCE OF
77.38 FEET; THENCE TANGENT TO SAID CURVE, SOUTH 80 DEGREES 17' 25" WEST 97.42
FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF
173.59 FEET; THENCE WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22
DEGREES 08' 29" A DISTANCE OF 67.08 FEET; THENCE TANGENT TO SAID CURVE, NORTH 77
DEGREES 34' 06" WEST 31.48 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE
SOUTHEASTERLY, HAVING A RADIUS OF 22.00 FEET; THENCE SOUTHWESTERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 108 DEGREES 09' 50" A DISTANCE OF 41.53 FEET TO
THE WESTERLY LINE OF SAID LOT 2; THENCE TANGENT TO SAID CURVE, SOUTH 5 DEGREES
43' 56" EAST 73.02 FEET TO A POINT IN A NON-TANGENT CURVE CONCAVE WESTERLY
HAVING A RADIUS OF 111.66 FEET (A RADIAL LINE OF SAID CURVE TO SAID POINT BEARS
NORTH 84 DEGREES 58' 41" 'EAST) , SAID POINT BEING ALSO THE NORTHWESTERLY CORNER
OF SAID LOT 1; THENCE SOUTHERLY ALONG SAID WESTERLY LINE AND SAID NON-TANGENT
CURVE THROUGH A CENTRAL ANGLE OF 5 DEGREES l7' 52" A DISTANCE OF 10.32 FEET;
THENCE TANGENT TO SAID CURVE SOUTH 0 DEGREES 16' 33" WEST 110.00 FEET
<PAGE> 45
TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
10.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 90
DEGREES 00' 14" A DISTANCE OF 15.71 FEET TO THE SOUTHERLY LINE OF SAID LOT 1,
THENCE ALONG SAID SOUTHERLY LINE TANGENT TO SAID CURVE, SOUTH 89 DEGREES 43' 41"
EAST 143.08 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A
RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE
OF 8 DEGREES 39' 50" A DISTANCE OF 99.38 FEET TO THE BEGINNING OF A REVERSE
CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 8 DEGREES 18' 55" A DISTANCE OF 95.38 FEET
TO THE POINT OF BEGINNING.
<PAGE> 46
EXHIBIT B
FORM OF GRANT DEED
[See Following Pages]
B-1
<PAGE> 47
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, California 90067-5010
Attention: Peter M. Weil, Esq.
- ------------------------------------------------------------------------------
(Space Above Line For Recorder's Use Only)
GRANT DEED
The undersigned Grantor declares that documentary transfer tax
is not shown pursuant to Section 11932 of the California Revenue and Taxation
Code, as amended.
FOR VALUE RECEIVED, BEVERLY HILLS MEDICAL OFFICE PARTNERS,
L.P., a Delaware limited partnership, formerly known as Shearson Beverly Hills
Medical Office Partners, L.P., a Delaware limited partnership, grants to ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("GRANTEE"), all of
its right, title, and interest in and to the land situated in the Cities of West
Hollywood and Los Angeles, County of Los Angeles, State of California, and more
particularly described in Exhibit A attached hereto and incorporated herein by
reference (the "LAND"), and the buildings, structures, improvements, fixtures,
and appurtenances located thereon (collectively, the "IMPROVEMENTS").
THE LAND AND THE IMPROVEMENTS ARE CONVEYED TO GRANTEE
SUBJECT TO: (a) all liens, encumbrances, easements, covenants, conditions,
restrictions, and other matters of record; (b) all matters that would be
revealed or disclosed in an accurate survey or by a physical inspection of the
Land and the Improvements; (c) interests of the parties listed on Schedule I
attached hereto and incorporated herein by reference that are in possession of
the Land or the Improvements; and (d) all liens not yet delinquent for taxes for
real property, and all non-delinquent general or special assessments against the
Land or the Improvements.
B-2
<PAGE> 48
IN WITNESS WHEREOF, the undersigned has executed this Grant
Deed as of [_____], 1997.
"SELLER"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: ______________________________
Print Name:_______________________
Print Title:_______________________
B-3
<PAGE> 49
STATE OF __________ )
: ss.
COUNTY OF _________ )
On the ____ day of __________, 199_, before me, __________
_____________________________________________, personally appeared
_____________________________________________________________________
[ ] personally known to me or [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________
(SEAL)
B-4
<PAGE> 50
EXHIBIT A TO GRANT DEED
LEGAL DESCRIPTION
All that certain real property, a portion of which is situated in the City of
West Hollywood and a portion of which is situated in the City of Los Angeles,
and all of which is situated in the County of Los Angeles, State of California,
described as follows:
B-5
<PAGE> 51
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOTS 1 AND 2, TRACT NO. 41894, PARTLY IN THE CITY OF LOS ANGELES AND PARTLY IN
THE CITY OF WEST HOLLYWOOD, AS PER MAP FILED IN BOOK 1010, PAGES 80 AND 81 OF
MAPS, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF SUNSET BOULEVARD, 90 FEET
WIDE, WITH THE CENTERLINE OF CORY AVENUE, 50 FEET WIDE, AS BOTH STREETS ARE
SHOWN ON SAID MAP OF TRACT NO. 41894, THENCE ALONG SAID CENTERLINE OF SUNSET
BOULEVARD, NORTH 89 DEGREES 43' 41" WEST 144.62 FEET; THENCE LEAVING SAID
CENTERLINE, NORTH 0 DEGREES 33' 45" EAST 44.99 FEET TO A POINT IN THE NORTHERLY
LINE OF SAID SUNSET BOULEVARD, SAID POINT BEING ALSO THE SOUTHEASTERLY CORNER OF
SAID LOT 1 AND THE POINT OF BEGINNING; THENCE ALONG THE EASTERLY LINE OF SAID
LOT, NORTH 0 DEGREES 33' 45" EAST 105.01 FEET; THENCE SOUTH 89 DEGREES 43' 41"
EAST 4.00 FEET; THENCE CONTINUING ALONG SAID EASTERLY LINE AND THE EASTERLY LINE
OF SAID LOT 2, NORTH 0 DEGREES 33' 45" EAST 120.82 FEET TO THE NORTHEASTERLY
CORNER OF SAID LOT 2; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 2, SOUTH 89
DEGREES 56' 16" WEST 29.94 FEET; THENCE NORTH 48 DEGREES 24' 39" WEST 59.22
FEET; THENCE NORTH 69 DEGREES 40' 04" WEST 9.97 FEET TO A POINT IN A NON-TANGENT
CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 74.02 FEET (A RADIAL LINE OF SAID
CURVE TO SAID POINT BEARS SOUTH 69 DEGREES 36' 24" EAST); THENCE SOUTHWESTERLY
ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 59 DEGREES 53' 49" A DISTANCE OF
77.38 FEET; THENCE TANGENT TO SAID CURVE, SOUTH 80 DEGREES 17' 25" WEST 97.42
FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF
173.59 FEET; THENCE WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22
DEGREES 08' 29" A DISTANCE OF 67.08 FEET; THENCE TANGENT TO SAID CURVE, NORTH 77
DEGREES 34' 06" WEST 31.48 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE
SOUTHEASTERLY, HAVING A RADIUS OF 22.00 FEET; THENCE SOUTHWESTERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 108 DEGREES 09' 50" A DISTANCE OF 41.53 FEET TO
THE WESTERLY LINE OF SAID LOT 2; THENCE TANGENT TO SAID CURVE, SOUTH 5 DEGREES
43' 56" EAST 73.02 FEET TO A POINT IN A NON-TANGENT CURVE CONCAVE WESTERLY
HAVING A RADIUS OF 111.66 FEET (A RADIAL LINE OF SAID CURVE TO SAID POINT BEARS
NORTH 84 DEGREES 58' 41" EAST), SAID POINT BEING ALSO THE NORTHWESTERLY CORNER
OF SAID LOT 1; THENCE SOUTHERLY ALONG SAID WESTERLY LINE AND SAID NON-TANGENT
CURVE THROUGH A CENTRAL ANGLE OF 5 DEGREES 17' 52" A DISTANCE OF 10.32 FEET;
THENCE TANGENT TO SAID CURVE SOUTH 0 DEGREES 16" 33" WEST 110.00 FEET
<PAGE> 52
TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
10.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 90
DEGREES 00' 14" A DISTANCE OF 15.71 FEET TO THE SOUTHERLY LINE OF SAID LOT 1,
THENCE ALONG SAID SOUTHERLY LINE TANGENT TO SAID CURVE, SOUTH 89 DEGREES 43' 41"
EAST 143.08 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A
RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE
OF 8 DEGREES 39' 50" A DISTANCE OF 99.38 FEET TO THE BEGINNING OF A REVERSE
CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 8 DEGREES 18' 55" A DISTANCE OF 95.38 FEET
TO THE POINT OF BEGINNING.
<PAGE> 53
SCHEDULE I TO GRANT DEED
PARTIES IN POSSESSION
B-6
<PAGE> 54
RENT ROLL
Date: 11/20/97 Page: 1
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Exhibit Number Occupant Name Feet Begin Deposit
- -------------- ----------------------------- ------ -------- --------
<S> <C> <C> <C> <C>
0680- 100 -- Vacant -- 1,227 0.00
0680- 101 Hamburger Hamlet 2,030 0.00
0680- 102 -- Vacant -- 1,978 0.00
0680- 103 Horton & Converse 858 0.00
0680- 104 -- Vacant -- 638 0.00
0680- 105 -- Vacant -- 872 0.00
0680- 106 -- Vacant -- 3,400 0.00
0680- 107 -- Vacant -- 3,022 0.00
0680- 108 -- Vacant -- 232 0.00
0680- 110 Hamid Hekmat Ravan, M.D. 2,358 09/01/87 3,010.00
0680- 111 -- Vacant -- 603 0.00
0680- 112 -- Vacant -- 265 0.00
0680- 200 Smith & Sack, D.D.S.'s 2,433 04/25/95 3,463.27
0680- 201 -- Vacant -- 1,401 0.00
0680- 202 Richard Ellenbogen, M.D. 3,404 03/01/92 2,493.00
0680- 204 -- Vacant -- 574 0.00
0680- 205 Richard Ellenbogan, M.D. 409 03/01/97 0.00
0680- 207 Office of the Building 1,171 0.00
0680- 208 Cesar J. Segovia, D.D.S. 1,052 09/01/91 2,690.25
0680- 209 -- Vacant -- 509 0.00
0680- 212 Unger & Schneider, M.D.'s 3,036 02/01/97 2,100.00
0680- 214 Chobanian & Mihranian, M.D.'s 2,945 07/01/97 8,179.73
0680- 215 Custodian Room 300 0.00
0680- 217 Pump Room 122 0.00
0680- 301 -- Vacant -- 609 0.00
0680- 303 Ronald D. Atanay, D.D.S. 1,143 12/18/95 2,457.45
0680- 305 Sanford S. Kornblum, M.D. 4,623 03/01/88 3,400.00
0680- 306 -- Vacant -- 1,899 0.00
0680- 308 Steven Greco, D.D.S. 1,348 09/01/88 3,514.88
0680- 310 Terry V. Eagan, M.D. 459 03/01/95 1,101.60
</TABLE>
To be updated at Closing
<PAGE> 55
RENT ROLL
Page: 2
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
- ----------- ------------- ----- -------- --------
<S> <C> <C> <C> <C>
0680- 312 -- Vacant -- 2,254 0.00
0680- 315 John Ivey, D.D.S. 1,049 05/01/97 3,241.35
0680- 317 -- Vacant -- 1,615 0.00
0680- 401 Sarah P. Korda, M.D. Inc. 1,229 04/01/89 3,225.60
0680- 404 David L. Matlock, M.D. 605 06/20/96 1,452.00
0680- 405 David L. Matlock, M.D. 4,106 03/20/95 9,649.10
0680- 406 David L. Matlock, M.D. 2,032 12/15/96 4,876.80
0680- 408 Brenda G. Bass, M.D. 1,516 01/01/96 2,760.00
0680- 414 -- Vacant -- 2,956 0.00
0680- 415 Joel J. Piehl, D.D.S., Inc. 1,166 11/01/91 4,151.22
0680- 418 -- Vacant -- 1,502 0.00
0680- 500 -- Vacant -- 880 0.00
0680- 501 Eva Dloomy, D.D.S. 889 08/15/90 2,822.66
0680- 502 Barry J. Skaggs, D.D.S. 1,342 01/01/91 7,315.00
0680- 505 Lichtenstein Hernia Institute 1,852 06/01/90 5,421.53
0680- 506 -- Vacant -- 1,003 0.00
0680- 508 -- Vacant -- 704 0.00
0680- 510 Henry Davidian, M.D. 2,449 07/26/93 6,608.25
0680- 511 -- Vacant -- 425 0.00
0680- 512 -- Vacant -- 2,252 0.00
0680- 514 -- Vacant -- 634 0.00
0680- 515 -- Vacant -- 544 0.00
0680- 516 Arthur Kahn, M.D. 1,523 09/01/88 0.00
0680- 518 -- Vacant -- 615 0.00
0680- 601 Virginia Van Osdel, D.D.S. 1,466 07/01/87 3,466.75
0680- 602 -- Vacant -- 1,439 0.00
0680- 605 Sid Danesh, M.D. 1,922 0.00
0680- 606 David M. Wolf, M.D. 538 02/01/91 1,328.86
0680- 609 -- Vacant -- 2,824 0.00
0680- 611 Geoffrey Keyes, M.D. 1,923 03/01/89 5,582.40
</TABLE>
<PAGE> 56
RENT ROLL Page: 3
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
=========== ============================ ====== ===== ========
<S> <C> <C> <C> <C>
0680- 615 Sandy Silas 792 05/15/97 1,500.00
0680- 616 David C. Hansen, M.D 3,206 01/01/93 10,179.70
0680- 618 Anthony Mobasser, D.M.D., D.D.S. 1,004 09/01/85 2,388.75
0680- 701 -- Vacant -- 1,450 0.00
0680- 703 -- Vacant -- 521 0.00
0680- 705 Health Source Management Group 2,862 04/01/94 8,279.67
0680- 708 Greig & Carter, M.D.'s 2,073 08/01/93 592.45
0680- 710 Alfred Weinstock, D.D.S. 1,308 11/01/90 3,614.75
0680- 711 -- Vacant -- 1,239 0.00
0680- 713 -- Vacant -- 494 0.00
0680- 714 -- Vacant -- 798 0.00
0680- 715 Neil Stewart McLeod, D.D.S. 1,051 09/01/96 3,276.00
0680- 716 Marcel Bouchard, D.M.D. 781 09/01/97 1,913.45
0680- 718 -- Vacant -- 837 0.00
0680- 801 -- Vacant -- 819 0.00
0680- 802 John W. Gerace, D.D.S. 934 10/01/94 2,615.20
0860- 805 Randy S. Harris, M.D., Inc. 2,982 10/05/92 7,604.08
0680- 806 -- Vacant -- 446 0.00
0680- 808 Violet Boodaghians, M.D. 1,163 08/01/91 3,603.60
0680- 809 William J. Binder, M .D. 2,466 04/01/92 13,192.22
0680- 811 -- Vacant -- 717 0.00
0680- 812 -- Vacant -- 1,040 0.00
0680- 814 Peter Fodor, M.D. 1,878 03/01/97 1,064.70
0680- 815 Joel Reims, D.D.S. 1,149 09/01/89 2,371.00
0680- 818 Isaac Hakim, D.M.D. 1,519 03/11/91 1,680.33
0680- 901 Eric Fugier, D.D.S., M.S. 1,653 01/01/97 0.00
0680- 902 Philip Ruben, D.D.S. 460 09/15/97 0.00
0680- 903 Philip Ruben, D.D.S. 799 06/01/88 0.00
0680- 905 -- Vacant -- 1,844 0.00
0680- 906 Carl E. Hayes, M.D. 1,372 05/01/96 3,327.10
</TABLE>
<PAGE> 57
RENT ROLL Page: 4
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
- ---------- ------------- ----- -------- --------
<S> <C> <C> <C> <C>
0680 908 Hirbod/Rami Etessami, D.S.S. 1,094 0.00
0680 909 Hirbod/Rami Etessami, D.D.S. 678 01/01/96 5,022.00
0680 910 Raja Srour, M.D. 2,071 05/01/95 5,801.25
0680 912 Duane C. McKay, D.D.S. 2,448 04/07/94 6,316.00
0680 914 Mark A. Helm, D.D.S. 1,055 11/01/90 3,196.22
0680 915 Victor J. Diamond, D.D.S., Inc. 672 08/01/89 377.00
0680 917 Carmel Pradel, M.D. 962 03/01/88 1,577.67
0680 GF1 Wells Fargo Bank 6,749 09/01/81 0.00
0680 GF2 Horton & Converse 1,297 01/01/82 0.00
0680 GF3 Wilson and Shaunette, O.D.'s 1,298 06/15/96 2,466.20
0680 GF4 Hamburger Hamlet of Sunset 8,321 01/01/85 4,500.00
0680 200A Smith & Sack, D.D.S.'s 0 08/16/96 0.00
0680 204A Richard Ellenbogen, M.D. 287 03/01/92 0.00
0680 215A Building Engineer Room 125 0.00
0680 705A Health Source Management Group 605 02/01/95 0.00
0680 712A -- Vacant -- 550 0.00
0680 712B Ned Cowan, M.D. 542 10/01/96 1,287.00
0680 GARAGE Ampco Auto Parks 0 10/01/86 0.00
------- -----------
Building Total: 158,585 $192,038.04
------- -----------
Property total: 158,585 $192,038.04
======= ===========
</TABLE>
<PAGE> 58
EXHIBIT C
FORM OF BILL OF SALE
[See Following Pages]
C-1
<PAGE> 59
BILL OF SALE
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
hereby acknowledged, BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P., a Delaware
limited partnership ("SELLER"), does hereby sell and transfer to ARDEN REALTY
LIMITED PARTNERSHIP, a Maryland limited partnership ("BUYER"), all of Seller's
right, title, and interest in and to the personal property, inventory,
furniture, fixtures, and equipment (collectively, the "PERSONAL PROPERTY") owned
by Seller, located at, and used for the operation, maintenance, or management of
the "MEDICAL BUILDING AND PARKING STRUCTURE" (as hereafter defined), including,
without limitation, the personal property described on Schedule I attached
hereto, but expressly excluding, without limitation, any and all personal
property leased by Seller under the contracts described on Schedule II attached
hereto, and any and all personal property owned or leased by Voit Management
Company, L.P., AMPCO Auto Parks, Inc., invitees of the tenants at the Medical
Building and Parking Structure, tenants under Leases at the Medical Building and
Parking Structure, and suppliers, contractors, and vendors serving the Medical
Building and Parking Structure. The "MEDICAL BUILDING AND PARKING STRUCTURE"
shall mean and refer to that certain property commonly known as the "Beverly
Sunset Medical Building," together with the parking structure associated
therewith, located at 9201 West Sunset Boulevard, West Hollywood and Los
Angeles, California.
Seller represents and warrants to Buyer that, to the best knowledge of
John Ng and Timothy Needham, officers of the general partner of Seller, the
Personal Property is not subject to any encumbrances, conditional sales
contracts or other liens. Seller has not made and does not make any
representations or warranties of any kind whatsoever, oral or written, express
or implied, with respect to the condition any of the Personal Property or any
related matters (including, without limitation, any representation or warranty
of merchantability or fitness for a particular purpose) and the Personal
Property is sold to Buyer in its present "AS IS, WHERE IS" condition.
By its acceptance of this Bill of Sale and the Personal Property, Buyer
hereby acknowledges receipt of the Personal Property, and further acknowledges
that Buyer is receiving such Personal Property in its present "AS IS, WHERE IS"
condition without recourse or representation or warranty of any kind whatsoever
as to the condition thereof or any related matters (including, without
limitation, any representation or warranty of merchantability or fitness for a
particular purpose).
This Bill of Sale shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors,
and assigns.
This Bill of Sale shall be governed by and construed and enforced in
accordance with the laws of the State of California, without regard to its
principles of conflicts of law.
C-2
<PAGE> 60
IN WITNESS WHEREOF, Seller has executed this Bill of Sale as of
[___________________], 1997.
"SELLER"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: _______________________________
Print Name: _______________________
Print Title:_______________________
C-3
<PAGE> 61
SCHEDULE I TO BILL OF SALE
DESCRIPTION OF CERTAIN PERSONAL PROPERTY
C-4
<PAGE> 62
BEVERLY SUNSET MEDICAL BUILDING
Office Inventory
as of November 20, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
ITEM NUMBER
- ---------------------------------------------------------------------
<S> <C>
Alphamate, Motorola - Paging Console 1
- ---------------------------------------------------------------------
Binder, Electric 1
- ---------------------------------------------------------------------
Blueprint Rack 1
- ---------------------------------------------------------------------
Bookshelf 1
- ---------------------------------------------------------------------
Chair, Highback 2
- ---------------------------------------------------------------------
Chair, Lowback 13
- ---------------------------------------------------------------------
Chair, Swivel 3
- ---------------------------------------------------------------------
Chair, Straightback 2
- ---------------------------------------------------------------------
Coffee Maker 2
- ---------------------------------------------------------------------
Computer, 386 (Management Office - PM) 1
- ---------------------------------------------------------------------
Computer, 486 (Engineering - EMS) 1
- ---------------------------------------------------------------------
Computer, Pentium 120 (Management Office - PA) 1
- ---------------------------------------------------------------------
Conference Table 2
- ---------------------------------------------------------------------
Credenza 2
- ---------------------------------------------------------------------
Desk, Office 6
- ---------------------------------------------------------------------
End Table 3
- ---------------------------------------------------------------------
Fax Machine 1
- ---------------------------------------------------------------------
File Cabinet, 2 Drawer 4
- ---------------------------------------------------------------------
File Cabinet, 4 Drawer 4
- ---------------------------------------------------------------------
Label Printer, P-Touch 1
- ---------------------------------------------------------------------
Lamp 1
- ---------------------------------------------------------------------
Microwave (GE) 1
- ---------------------------------------------------------------------
Misc. Marketing Supplies N/A
- ---------------------------------------------------------------------
Misc. Office Supplies N/A
- ---------------------------------------------------------------------
Paintings 10
- ---------------------------------------------------------------------
Printer Cart 1
- ---------------------------------------------------------------------
Printer, HP Laserjet III 1
- ---------------------------------------------------------------------
Projection Screen 1
- ---------------------------------------------------------------------
Radio, 2-Way w/Chargers 8
- ---------------------------------------------------------------------
Refrigerator, Small 2
- ---------------------------------------------------------------------
Safe, Small 1
- ---------------------------------------------------------------------
Telephone Multiline (AT&T BIS-22D System) 7
- ---------------------------------------------------------------------
TV, small 1
- ---------------------------------------------------------------------
Typewriter, Electric (IBM Wheelwriter II, Series 10) 1
- ---------------------------------------------------------------------
</TABLE>
General Notes:
(1) Inventory includes Property Management Office (Suite 207),
Conference Room (Suite 204) and Engineering Office (Suite 216).
(2) The Management Office includes a Konica 2020 copier. It was leased from
7/93-7/97. It is now being rented on a month-to-month basis. The equipment can
be turned in for a new copier with written 30 day notice.
(3) The computer currently used by the Property Manager is owned by Voit
Management Company. It will be removed from the property when the ownership
change occurs. The computer listed above will be put back into operation when
the ownership change occurs.
To be updated at Closing
<PAGE> 63
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
I. HVAC RELATED TOOLS
A. Refrigerant Recycling Unit
Make: CPS Products
Model: R0036
Accessories: 2 250# refrigerant cylinders
1 50# refrigerant cylinder
B. Vacuum Pump
Make: JB Industries
Model: IQD48C17D380A P
C. Oil Pump
Make: Berns
D. Refrigerant Leak Detector (Halogen)
Make: TIF
Model: 5650A
E. Refrigerant Leak Detector
Make: Johnson Controls
Model: RLD-H10G
F. Infrared Temperature Probe
Make: Fluke
Model: 80PK-1R
G. Air Balometer
Make: Alnor
Model: 634-513-044
Serial: BR10111
H. 24 Hour Dial Temperature Recorder
Make: Dickson
Model: SC4-100-B-24
Serial: 282375
I. Receiver Controller Calibrator
Make: MCC Powers
Model: 019301
J. Tachometer
Make: Monarch
Page 1
To be updated at Closing
<PAGE> 64
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
K. Refrigerant Tester
Make: Turbo Torch
Model: P250-580
Serial: GA49458
II. PLUMING TOOLS
A. Mapgas Torch
Make: Turbo Torch
Model: STK-R
B. Power Snake
Make: Marco
Model: Powerpak 60
Serial: A23226
C. Chain Pipe Cutter
Make: Wheeler
D. 1/8"-2" Pipe Cutter
Make: Rothenberger
Model: 7.0045
E. 1 7/8"-4 1/2" Pipecutter
Make: Rigid
Model: 154
F. 2 1/2"-4" Pipecutter (four wheel)
Make: Rigid
Model: N44-S
G. Main Water Key
H. 18" Aluminum Pipe Wrench
Make: Rigid
I. PVC Cutter
III. POWER TOOLS - GENERAL
A. 7" Bench Grinder
Make: Dayton
Model: 4Z908B
Page 2
<PAGE> 65
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
B. Power Planer
Make: Makita
Model: 1900B
Serial: 1594153E
C. Electric 16 GA, Shear
Make: Milwaukee
Model: 6805
Serial: 709-13760
D. 3/8" Electric Drill (Keyless Chuck)
Make: Milwaukee
Model: 0224-1
Serial: 0574225331
E. Belt Sander
Make: Ryobi
Model: BE321
Serial: 024254 8939
F. 7 1/4" Circular Saw
Make: Black & Decker
Model: 7392
G.Sawzall Reciprocating Saw
Make: Milwaukee
Model: 6511
Serial: 4601150336
H. 1/2" Drill (Keyless Chuck)
Make: Milwaukee
Model: 0239-1
Serial: 756B7494230183
I. 3/8" Angle Drill
Make: Makita
Model: DA3000R
Serial: 201505E
J. Shop Vacuum Wet/Dry, 2 1/2 HP
Make: Shop Vac
Model: 464A
Page 3
<PAGE> 66
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
IV. TOOLS - SPECIALTY
A. Key Cutting Machine
Make: Speedex
Model: 916MC
Serial: 3473
B. Pressure Washer
Make: Chore Washer
Serial: 200970
C. Gravity Feed Sand Blaster
Make: ALC
Model:
Serial: F-90
D. Soldering Iron
Make: Weller
Model: 8200
E. Megohmeter
Make: TIF
Model: IT990
F. Powder Actuated Nail Gun
Make: Hilti
Model: DX36M
Serial: 05/239431/92
G. Airless Paint Sprayer
Make: Krebs
Model: 100
H. Lock Out Kit and Case
I. Hepa Vacuum
Make: Hako Minuteman
Model: C83985-01
Serial: 81901472
Page 4
<PAGE> 67
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
V. ELECTRICAL TOOLS (Electric)
A. Conduit Bending Handle
Make: Ideal
Accessories 1/2" Bending Head
3/4" Bending Head
B. 100' Fish Tape and Leader (Two)
C. 1/2" Greenlee Punch
D. 3/4" Greenlee Punch
VI. GENERAL HAND TOOLS
A. Rechargeable 1/4" Drill
Make: Milwaukee
B. 5/8" Capacity Bolt Center
Make: Hit
C. Assorted Sheet Metal Tools
1. Right handed aviation snips
2. Left handed aviation snips
3. Hn-1 nibbler
4. HC-5 crimpers
5. Seaming tool
6. KD cutting shears
D. Rechargeable Screwdriver
Make: Skil
Model: 2210
E. 13 Piece Long Hex Key Set (Allen Wrenches)
Make:
Model:
Serial:
F. 12 Piece Socket Set 5/6"-7/8"
Make: Master Mechanic
G. 3/8" Bolt Cutters
Make: Hit
H. 5 lb. Sledge Hammer
Page 5
<PAGE> 68
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
I. 24" Framing Square
J. 48" Straight Edge
K. 25' Drop Lights (Two)
L. 100' Orange Extension Cords (Two)
M. 25' Orange Extension Cord
N. 100' Blue Extension Cord
O. 50' Pneumatic Hoses (Two)
P. Pneumatic Tire Accessory
Q. 3 Jaw 7 1/2 Ton Puller
R. 24" Level
S. Paint Edging Tool
T. Box of Miscellaneous Drill Bits
U. Drill Index
V. Paint Trays (Two)
W. Paint Roller Handles (Three)
X. Dry Wall Mud Box
Y. Peltor Hearing Protection (Three)
Z. Rubber Aprons (Two)
AA. 18" Rubber Gloves (Two Sets)
BB. Full Face Mask
CC. Goggles (Two)
DD. Grease Gun
EE. Caulking Guns (Two)
Page 6
<PAGE> 69
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
FF. 50' Black Garden Hose
GG. 75' Green Garden Hose
HH. Hudson 2.75 Gallon Hand Sprayer
II. 6' Fiberglass Ladder
JJ. 8' Fiberglass Ladder
KK. Fiberglass Extension Ladder
LL. Poprivit Gun
MM. 8' Rigging Strap
NN. Window Washers Harness
OO. Suction Cup
PP. One Ton Come Along
QQ. 8' Rigging Strap (Nylon)
RR. 4' Rigging Strap (Nylon)
SS. 3/4" Dewalt Hole Saw
TT. 1/2" Dewalt Hole Saw
UU. Mandrell for Hole Saw
VII. GENERAL TOOLS
A. 6" Bench Vise
B. Portable Air Tank
Make: Midwest Products
C. 3/8" Truck Rope
Page 7
<PAGE> 70
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
D. Battery Charger
Make: Panasonic
Model: BQ-8C
Accessories: 3 AAA Batteries
4 AA Batteries
VIII. JANITORIAL TOOLS
A. Gas Powered Blower
Make: Weedeater
Model: GBI-22
B. Loping Shears (Garden Shears)
IX. BUILDING MATERIALS LISTING
A. Lighting Stock
1. 1-10 Cases F40CW RS-55 Fluorescent 4' Tubes
2. 0-1 Case Each:
120ER40 Indoor Flood Light
100BR40 Indoor Flood Light
75ER40 Indoor Flood Light
75R30 Indoor Flood Light
50R20 Indoor Flood Light
Jan-Mar R-40 compact Fluorescent Retrofit Kits
Prolight Fluorescent Exit Sign Retrofit Kits
18W Fluorescent Compacts
13W Fluorescent Compacts
9W Fluorescent Compacts
8W Fluorescent Compacts
150W, 100W, 90W, 60W, 20W Incandescent Bulbs
Various Mini-lamps
Various Mercury Vapor Lamps
Various Exit Lights
Various Lighting Ballasts
Various Lighting Fluorescent Starters
Miscellaneous Specialty Tenant Lights
2', 3', 4' Fluorescent Tubes
4' T-8 Fluorescent Tubes
Miscellaneous Lighting Covers, Lenses, Fixtures
Page 8
<PAGE> 71
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
B. Electrical
1. Miscellaneous Electrical Stock:
Miscellaneous Switches
Miscellaneous Outlets
Miscellaneous Metal and Plastic Covers
Miscellaneous 1/2" & 3/4" Conduit types, Flex, EMT, etc.
Miscellaneous Conduit Bodies
Miscellaneous Conduit Fittings
Miscellaneous Rolls of #14, #12, #10, #8 Wire, Solid and
Stranded
Miscellaneous Connectors, Tape, Wire Nuts, etc.
C. Plumbing
1. Miscellaneous Plumbing Stock:
Miscellaneous Galvanized Pipe and Fittings 1/2" - 1-1/2"
Miscellaneous Copper Pipe and Fittings 1/4"-3"
Miscellaneous Valves 1/2"-2"
Miscellaneous Brass Fittings and Mini-valves
All Parts for Toilets: Kohler, American Standard, and Sloan
All Parts for Sloan Urinals
Parts for Pressure Flush Assemblies
Miscellaneous Seats & Washers, Rebuild Kits, Handles, etc for
Kohler, American
Standard, Delta, Moen, Chicago and Miscellaneous Sinks
Miscellaneous Drain Lines, P-Traps, Down Spouts, etc.
Miscellaneous No-hub Pipe, Caps and Fittings
Miscellaneous Drinking Fountain Parts and Bubblers
Miscellaneous Sink, Toilet Valves and Connecting Flex
Miscellaneous Gaskets, Washers, Caulkings, Epoxies, etc.
D. Ceiling Tiles
1. Cases of Tiles for All tenant Areas
Armstrong 755 B (Most Common)
2. Cases of Tile for Common Hallways and Elevator Lobbies
3. Used Tile or Tenant Areas and Hallways
4. 4' and 2' T-Bar Sections for All Ceiling Systems used in Building
Page 9
<PAGE> 72
BEVERLY SUNSET MEDICAL BUILDING
Building Tool & Materials Inventory
as of November 20, 1997
E. Air Conditioning
1. Miscellaneous Air Conditioning Stock:
Miscellaneous Duct Work 4" - 18": Rigid, End Fles, and Flex
Miscellaneous Air Registers & Duct Fittings, Start Collars,
90 Degrees, etc.
Miscellaneous Air Filters
Miscellaneous Parts for VAV Boxes, Controllers, Pistons,
Linkages, etc.
Miscellaneous Sensors for Energy Management System
Miscellaneous Control Parts, Static Sensors, Receivor
Controllers, etc.
Miscellaneous Pneumatic Parts, Tubing, Fittings, Etc.
Miscellaneous Pneumatic Thermostats
F. Door Hardware
1. Miscellaneous New and Used Door Hardware, Lever Latches, Catches,
Strikes, etc.
2. Miscellaneous Hinges
3. Miscellaneous Door Closures (Used)
G. Miscellaneous Materials
1. Miscellaneous Cleaners, Glues, Epoxies, Caulking, Mastics, etc.
2. Miscellaneous Nuts, Bolts, Fasteners, Screws, Washers, Clips,
Anchors, etc.
3. Miscellaneous Tapes, Adhesives, etc.
4. Miscellaneous Restroom Parts, Toilet Seat Covers, Holders, Soap
Dispensers, Roller Holder, etc.
5. Miscellaneous Dry Wall, Plywood, Masonite Board, etc.
6. Miscellaneous Lubricants, Oils, Greases, etc.
Page 10
<PAGE> 73
SCHEDULE II TO BILL OF SALE
DESCRIPTION OF EXCLUDED PERSONAL PROPERTY
All personal property leased by Seller under the following contracts:
C-5
<PAGE> 74
BEVERLY SUNSET MEDICAL BUILDING
Contract Summary
as of November 20, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SERVICE VENDOR DATED AMENDED DESCRIPTION
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Copier
Image IV 06/28/93 N/A Copier Rental - Konica 2020
(818) 841-1083
Drop Box Federal Express 04/15/92 N/A Drop Box - East side of Building
(800) 238-5355
</TABLE>
To be updated at Closing
<PAGE> 75
EXHIBIT D
FORM OF GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
[See Following Pages]
D-1
<PAGE> 76
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
This GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT")
is made as of [ _____], 1997, by BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P., a
Delaware limited partnership ("ASSIGNOR"), in favor of ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("ASSIGNEE"), with reference to the
following facts:
A Assignor is the owner of that certain land located at 9201 West
Sunset Boulevard in the Cities of West Hollywood and Los Angeles, County of Los
Angeles, State of California, and more particularly described in Exhibit A
attached hereto and incorporated herein by reference, and the owner of certain
buildings, structures, and other improvements commonly known as the "Beverly
Sunset Medical Building" (collectively, the "REAL PROPERTY"). The Real Property
is being conveyed to Assignee pursuant to a certain Grant Deed ( the "GRANT
DEED") executed by Assignor in favor of Assignee.
B. Assignor, as the owner of the Real Property, is the sole owner of
the following items: (i) those certain leases, licenses, and occupancy
agreements listed on Schedule I attached hereto and incorporated herein by
reference, and any security deposits obtained in connection therewith
(collectively, the "LEASES"); (ii) those certain agreements and contracts listed
on Schedule I, and any security deposits obtained or given in connection
therewith (collectively, the "CONTRACTS"); (iii) those certain licenses,
franchises, and permits listed on Schedule I (collectively, the "PERMITS"); and
(iv) those certain contract rights, trademarks, service marks, trade names,
logos, indemnities, and rights under guaranties or warranties relating to goods,
merchandise, or services at or relating to the Real Property listed on Schedule
I (collectively, the "MISCELLANEOUS PROPERTY ASSETS" and, collectively with the
Leases, the Contracts, and the Permits, the "ASSIGNED ASSETS").
NOW, THEREFORE, in consideration of the foregoing facts:
1. Assignor hereby assigns and transfers to Assignee all of
Assignor's right, title, and interest in and to the Assigned Assets, except
utility deposits which shall remain the property of Assignor. Except for
Assignor's ownership interest in the Assigned Assets, this Assignment is made
without recourse or representation or warranty whatsoever. By executing this
Assignment, Assignee acknowledges and agrees that Assignee and Assignee's
representatives have been afforded the opportunity to make and have made such
inspections of the Assigned Assets and matters related thereto as they have
deemed necessary or desirable. Assignee acknowledges that Assignor has not made
and does not make any representations or warranties of any kind whatsoever, oral
or written, express or implied, with respect to any of the Assigned Assets or
any related matters, except as and to the extent set forth herein or in that
certain Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
November 21, 1997, by and between Assignee and Assignor.
D-2
<PAGE> 77
2. Assignee hereby agrees to and accepts such assignment and,
in addition, expressly assumes and agrees to keep, perform, and fulfill all of
the terms, covenants, obligations, and conditions required to be kept,
performed, and fulfilled by Assignor under, or with respect to, the Assigned
Assets from and after the CLOSING DATE (as hereinafter defined). Assignee
further agrees to indemnify, defend, and hold Assignor harmless from and against
any and all loss, cost, liability, claim, damage, and expense (including,
without limitation, reasonable attorneys' fees and costs) directly or indirectly
related to any breach or default by Assignee in connection with the Assigned
Assets, or Assignee's obligations hereunder, accruing from and after the Closing
Date. Assignor agrees to indemnify, defend, and hold Assignee harmless from and
against any and all loss, cost, liability, claim, damage, and expense
(including, without limitation, reasonable attorneys' fees and costs) directly
or indirectly related to any breach or default by Assignor in connection with
the Assigned Assets prior to the Closing Date. "CLOSING DATE" shall mean and
refer to the date the Grant Deed is recorded.
3. The provisions of this Assignment shall be binding upon and
inure to the benefit of Assignor and Assignee, their successors in interest, and
assigns.
4. This Assignment may be executed in as many counterparts as
may be deemed necessary and convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all of which such counterparts shall constitute one and the same
instrument.
5. This Assignment and the legal relations of the parties
hereto shall be governed by and construed and enforced in accordance with the
laws of the State of California, without regard to its principles of conflicts
of law.
6. In the event of any litigation between Assignor and
Assignee arising out of the obligations of Assignor or Assignee under this
Assignment or concerning the meaning or interpretation of any provision
contained herein, the losing party shall pay the prevailing party's costs and
expenses of such litigation (including any appeals), including, without
limitation, reasonable attorneys' fees and costs. The prevailing party shall be
determined based upon an assessment of which party's major arguments or
positions taken in the proceedings could fairly be said to have prevailed over
the other party's major arguments or positions on major disputed issues in the
court's decision.
D-3
<PAGE> 78
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
as of the date first set forth above.
"ASSIGNOR"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: _______________________________
Print Name: _______________________
Print Title:_______________________
"ASSIGNEE"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By: _______________________________
Print Name: _______________________
Print Title:_______________________
D-4
<PAGE> 79
EXHIBIT A TO GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
LEGAL DESCRIPTION
All that certain real property, a portion of which is situated in the City of
West Hollywood and a portion of which is situated in the City of Los Angeles,
and all of which is situated in the County of Los Angeles, State of California,
described as follows:
D-5
<PAGE> 80
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
LOTS I AND 2, TRACT NO. 41894, PARTLY IN THE CITY OF LOS ANGELES AND PARTLY IN
THE CITY OF WEST HOLLYWOOD, AS PER MAP FILED IN BOOK 1010, PAGES 80 AND 81 OF
MAPS, RECORDS OF SAID COUNTY, MORE PARTICULARLY DESCRIBED AS A WHOLE AS FOLLOWS:
COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF SUNSET BOULEVARD, 90 FEET
WIDE, WITH THE CENTERLINE OF CORY AVENUE, 50 FEET WIDE, AS BOTH STREETS ARE
SHOWN ON SAID MAP OF TRACT NO. 41894, THENCE ALONG SAID CENTERLINE OF SUNSET
BOULEVARD, NORTH 89 DEGREES 43' 41" WEST 144.62 FEET; THENCE LEAVING SAID
CENTERLINE, NORTH 0 DEGREES 33' 45" EAST 44.99 FEET TO A POINT IN THE NORTHERLY
LINE OF SAID SUNSET BOULEVARD, SAID POINT BEING ALSO THE SOUTHEASTERLY CORNER OF
SAID LOT 1 AND THE POINT OF BEGINNING; THENCE ALONG THE EASTERLY LINE OF SAID
LOT, NORTH 0 DEGREES 33' 45" EAST 105.01 FEET; THENCE SOUTH 89 DEGREES 43' 41"
EAST 4.00 FEET; THENCE CONTINUING ALONG SAID EASTERLY LINE AND THE EASTERLY LINE
OF SAID LOT 2, NORTH 0 DEGREES 33' 45" EAST 120.82 FEET TO THE NORTHEASTERLY
CORNER OF SAID LOT 2; THENCE ALONG THE NORTHERLY LINE OF SAID LOT 2, SOUTH 89
DEGREES 56' 16" WEST 29.94 FEET; THENCE NORTH 48 DEGREES 24' 39" WEST 59.22
FEET; THENCE NORTH 69 DEGREES 40' 04" WEST 9.97 FEET TO A POINT IN A NON-TANGENT
CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 74.02 FEET (A RADIAL LINE OF SAID
CURVE TO SAID POINT BEARS SOUTH 69 DEGREES 36' 24" EAST); THENCE SOUTHWESTERLY
ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 59 DEGREES 53' 49" A DISTANCE OF
77.38 FEET; THENCE TANGENT TO SAID CURVE, SOUTH 80 DEGREES 17' 25" WEST 97.42
FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A RADIUS OF
173.59 FEET; THENCE WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22
DEGREES 08' 29" A DISTANCE OF 67.08 FEET; THENCE TANGENT TO SAID CURVE, NORTH 77
DEGREES 34' 06" WEST 31.48 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE
SOUTHEASTERLY, HAVING A RADIUS OF 22.00 FEET; THENCE SOUTHWESTERLY ALONG SAID
CURVE THROUGH A CENTRAL ANGLE OF 108 DEGREES 09' 50" A DISTANCE OF 41.53 FEET TO
THE WESTERLY LINE OF SAID LOT 2; THENCE TANGENT TO SAID CURVE, SOUTH 5 DEGREES
43' 56" EAST 73.02 FEET TO A POINT IN A NON-TANGENT CURVE CONCAVE WESTERLY
HAVING A RADIUS OF 111.66 FEET (A RADIAL LINE OF SAID CURVE TO SAID POINT BEARS
NORTH 84 DEGREES 58' 41" EAST) , SAID POINT BEING ALSO THE NORTHERLY CORNER OF
SAID LOT 1; THENCE SOUTHERLY ALONG SAID WESTERLY LINE AND SAID NON-TANGENT CURVE
THROUGH A CENTRAL ANGLE OF 5 DEGREES 17' 52" A DISTANCE OF 10.32 FEET; THENCE
TANGENT T0 SAID CURVE SOUTH 0 DEGREES 16' 33" WEST 110.00 FEET
<PAGE> 81
TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF
10.00 FEET; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 90
DEGREES 00' 14" A DISTANCE OF 15. 71 FEET TO THE SOUTHERLY LINE OF SAID LOT 1,
THENCE ALONG SAID SOUTHERLY LINE TANGENT TO SAID CURVE, SOUTH 89 DEGREES 43' 41"
EAST 143.08 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY HAVING A
RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE
OF 8 DEGREES 39' 50" A DISTANCE OF 99.38 FEET TO THE BEGINNING OF A REVERSE
CURVE CONCAVE SOUTHERLY HAVING A RADIUS OF 657.20 FEET; THENCE EASTERLY ALONG
SAID CURVE THROUGH A CENTRAL ANGLE OF 8 DEGREES 18' 55" A DISTANCE OF 95.38 FEET
TO THE POINT OF BEGINNING.
<PAGE> 82
SCHEDULE I TO GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
1. LEASES (AND ANY RELATED SECURITY DEPOSITS):
D-6
<PAGE> 83
RENT ROLL
Date: 11/20/97 Page: 1
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Exhibit Number Occupant Name Feet Begin Deposit
- -------------- ----------------------------- ------ -------- --------
<S> <C> <C> <C> <C>
0680- 100 -- Vacant -- 1,227 0.00
0680- 101 Hamburger Hamlet 2,030 0.00
0680- 102 -- Vacant -- 1,978 0.00
0680- 103 Horton & Converse 858 0.00
0680- 104 -- Vacant -- 638 0.00
0680- 105 -- Vacant -- 872 0.00
0680- 106 -- Vacant -- 3,400 0.00
0680- 107 -- Vacant -- 3,022 0.00
0680- 108 -- Vacant -- 232 0.00
0680- 110 Hamid Hekmat Ravan, M.D. 2,358 09/01/87 3,010.00
0680- 111 -- Vacant -- 603 0.00
0680- 112 -- Vacant -- 265 0.00
0680- 200 Smith & Sack, D.D.S.'s 2,433 04/25/95 3,463.27
0680- 201 -- Vacant -- 1,401 0.00
0680- 202 Richard Ellenbogen, M.D. 3,404 03/01/92 2,493.00
0680- 204 -- Vacant -- 574 0.00
0680- 205 Richard Ellenbogan, M.D. 409 03/01/97 0.00
0680- 207 Office of the Building 1,171 0.00
0680- 208 Cesar J. Segovia, D.D.S. 1,052 09/01/91 2,690.25
0680- 209 -- Vacant -- 509 0.00
0680- 212 Unger & Schneider, M.D.'s 3,036 02/01/97 2,100.00
0680- 214 Chobanian & Mihranian, M.D.'s 2,945 07/01/97 8,179.73
0680- 215 Custodian Room 300 0.00
0680- 217 Pump Room 122 0.00
0680- 301 -- Vacant -- 609 0.00
0680- 303 Ronald D. Atanay, D.D.S. 1,143 12/18/95 2,457.45
0680- 305 Sanford S. Kornblum, M.D. 4,623 03/01/88 3,400.00
0680- 306 -- Vacant -- 1,899 0.00
0680- 308 Steven Greco, D.D.S. 1,348 09/01/88 3,514.88
0680- 310 Terry V. Eagan, M.D. 459 03/01/95 1,101.60
</TABLE>
To be updated at Closing
<PAGE> 84
RENT ROLL
Page: 2
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
- ----------- ------------- ----- -------- --------
<S> <C> <C> <C> <C>
0680- 312 -- Vacant -- 2,254 0.00
0680- 315 John Ivey, D.D.S. 1,049 05/01/97 3,241.35
0680- 317 -- Vacant -- 1,615 0.00
0680- 401 Sarah P. Korda, M.D. Inc. 1,229 04/01/89 3,225.60
0680- 404 David L. Matlock, M.D. 605 06/20/96 1,452.00
0680- 405 David L. Matlock, M.D. 4,106 03/20/95 9,649.10
0680- 406 David L. Matlock, M.D. 2,032 12/15/96 4,876.80
0680- 408 Brenda G. Bass, M.D. 1,516 01/01/96 2,760.00
0680- 414 -- Vacant -- 2,956 0.00
0680- 415 Joel J. Piehl, D.D.S., Inc. 1,166 11/01/91 4,151.22
0680- 418 -- Vacant -- 1,502 0.00
0680- 500 -- Vacant -- 880 0.00
0680- 501 Eva Dloomy, D.D.S. 889 08/15/90 2,822.66
0680- 502 Barry J. Skaggs, D.D.S. 1,342 01/01/91 7,315.00
0680- 505 Lichtenstein Hernia Institute 1,852 06/01/90 5,421.53
0680- 506 -- Vacant -- 1,003 0.00
0680- 508 -- Vacant -- 704 0.00
0680- 510 Henry Davidian, M.D. 2,449 07/26/93 6,608.25
0680- 511 -- Vacant -- 425 0.00
0680- 512 -- Vacant -- 2,252 0.00
0680- 514 -- Vacant -- 634 0.00
0680- 515 -- Vacant -- 544 0.00
0680- 516 Arthur Kahn, M.D. 1,523 09/01/88 0.00
0680- 518 -- Vacant -- 615 0.00
0680- 601 Virginia Van Osdel, D.D.S. 1,466 07/01/87 3,466.75
0680- 602 -- Vacant -- 1,439 0.00
0680- 605 Sid Danesh, M.D. 1,922 0.00
0680- 606 David M. Wolf, M.D. 538 02/01/91 1,328.86
0680- 609 -- Vacant -- 2,824 0.00
0680- 611 Geoffrey Keyes, M.D. 1,923 03/01/89 5,582.40
</TABLE>
<PAGE> 85
RENT ROLL Page: 3
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
=========== ============================ ====== ===== ========
<S> <C> <C> <C> <C>
0680- 615 Sandy Silas 792 05/15/97 1,500.00
0680- 616 David C. Hansen, M.D 3,206 01/01/93 10,179.70
0680- 618 Anthony Mobasser, D.M.D., D.D.S. 1,004 09/01/85 2,388.75
0680- 701 -- Vacant -- 1,450 0.00
0680- 703 -- Vacant -- 521 0.00
0680- 705 Health Source Management Group 2,862 04/01/94 8,279.67
0680- 708 Greig & Carter, M.D.'s 2,073 08/01/93 592.45
0680- 710 Alfred Weinstock, D.D.S. 1,308 11/01/90 3,614.75
0680- 711 -- Vacant -- 1,239 0.00
0680- 713 -- Vacant -- 494 0.00
0680- 714 -- Vacant -- 798 0.00
0680- 715 Neil Stewart McLeod, D.D.S. 1,051 09/01/96 3,276.00
0680- 716 Marcel Bouchard, D.M.D. 781 09/01/97 1,913.45
0680- 718 -- Vacant -- 837 0.00
0680- 801 -- Vacant -- 819 0.00
0680- 802 John W. Gerace, D.D.S. 934 10/01/94 2,615.20
0860- 805 Randy S. Harris, M.D., Inc. 2,982 10/05/92 7,604.08
0680- 806 -- Vacant -- 446 0.00
0680- 808 Violet Boodaghians, M.D. 1,163 08/01/91 3,603.60
0680- 809 William J. Binder, M .D. 2,466 04/01/92 13,192.22
0680- 811 -- Vacant -- 717 0.00
0680- 812 -- Vacant -- 1,040 0.00
0680- 814 Peter Fodor, M.D. 1,878 03/01/97 1,064.70
0680- 815 Joel Reims, D.D.S. 1,149 09/01/89 2,371.00
0680- 818 Isaac Hakim, D.M.D. 1,519 03/11/91 1,680.33
0680- 901 Eric Fugier, D.D.S., M.S. 1,653 01/01/97 0.00
0680- 902 Philip Ruben, D.D.S. 460 09/15/97 0.00
0680- 903 Philip Ruben, D.D.S. 799 06/01/88 0.00
0680- 905 -- Vacant -- 1,844 0.00
0680- 906 Carl E. Hayes, M.D. 1,372 05/01/96 3,327.10
</TABLE>
<PAGE> 86
RENT ROLL Page: 4
Date: 11/20/97
Owner Name: Beverly Sunset Medical Bldg.
Property Name: 9201 W. Sunset Blvd.
Property Number: 0680
<TABLE>
<CAPTION>
Square Lease Security
Unit Number Occupant Name Feet Begin Deposit
- ---------- ------------- ----- -------- --------
<S> <C> <C> <C> <C>
0680 908 Hirbod/Rami Etessami, D.S.S. 1,094 0.00
0680 909 Hirbod/Rami Etessami, D.D.S. 678 01/01/96 5,022.00
0680 910 Raja Srour, M.D. 2,071 05/01/95 5,801.25
0680 912 Duane C. McKay, D.D.S. 2,448 04/07/94 6,316.00
0680 914 Mark A. Helm, D.D.S. 1,055 11/01/90 3,196.22
0680 915 Victor J. Diamond, D.D.S. 672 08/01/89 377.00
0680 917 Carmel Pradel, M.D. 962 03/01/88 1,577.67
0680 GF1 Wells Fargo Bank 6,749 09/01/81 0.00
0680 GF2 Horton & Converse 1,297 01/01/82 0.00
0680 GF3 Wilson and Shaunette, D.D.'s 1,298 06/15/96 2,466.20
0680 GF4 Hamburger Hamlet of Sunset 8,321 01/01/85 4,500.00
0680 200A Smith & Sack, D.D.S.'s 0 08/16/96 0.00
0680 204A Richard Ellenbogen, M.D. 287 03/01/92 0.00
0680 215A Building Engineer Room 125 0.00
0680 705A Health Source Management Group 605 02/01/95 0.00
0680 712A -- Vacant -- 550 0.00
0680 712B Ned Cowan, M.D. 542 10/01/96 1,287.00
0680 GARAGE Ampco Auto Park 0 10/01/86 0.00
------- -----------
Building Total: 158,585 $192,038.04
------- -----------
Property total: 158,585 $192,038.04
======= ===========
</TABLE>
<PAGE> 87
2. CONTRACTS (AND ANY RELATED SECURITY DEPOSITS):
D-7
<PAGE> 88
BUILDING SUNSET MEDICAL BUILDING
Contract Summary
as of November 20, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
SERVICE VENDOR DATED AMENDED DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ACM Latch-On Insulation, Inc. 09/14/95 N/A ACM removal (full abatement and
(714)671-3870 spot abatement)
- -----------------------------------------------------------------------------------------------------------------------------------
ACM Rem-Tech 09/14/95 N/A ACM removal (full abatement and
(818)680-3077 spot abatement
- -----------------------------------------------------------------------------------------------------------------------------------
Copier Image IV 07/18/97 N/A Service & Supply
(818)841-1083
--------------------------------------------------------------------------------------------------------
Image IV 06/28/93 N/A Copier Rental--Konica 2020
(818)841-1083
- -----------------------------------------------------------------------------------------------------------------------------------
Courier United Couriers 10/26/92 N/A P/U & Delivery (BSMB to Voit
(818)845-8883 Corp. and back)
5X/Week (M-F)
- -----------------------------------------------------------------------------------------------------------------------------------
Drop Box Federal Express 04/15/92 N/A Drop box -- East side of Building
(800)238-5355
- -----------------------------------------------------------------------------------------------------------------------------------
Elevator General/Dover (formerly 08/13/83 N/A "Regular Maintenance"
Viking Elevator) 1X/week
-------------------------------------------------------------------------
(213)384-2911 10/15/92 N/A "Regular Maintenance"
1X/week
- -----------------------------------------------------------------------------------------------------------------------------------
Emergency Power Systems 02/15/94 N/A Minor and Major Service on
Generator/Fire Pump (213)685-5630 emergency generator and fire pump
2X/year
- -----------------------------------------------------------------------------------------------------------------------------------
Engineering ABM Engineering 09/01/96 N/A 40 hr./week (M-F), as well as
(213)234-2001 overtime when necessitated
- -----------------------------------------------------------------------------------------------------------------------------------
Engineering Services Donald F. Dickerson & 08/16/96 N/A Engineering Services (Plumbing &
Associates Electrical) for Medical and Dental
Tenant Improvements as needed
- -----------------------------------------------------------------------------------------------------------------------------------
Environmental Americal Environmental 01/31/96 N/A ACM/Environmental Consulting as
Consulting Services (AES) needed
(714)379-3333
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
To be updated at Closing
<PAGE> 89
BEVERLY SUNSET MEDICAL BUILDING
Contract Summary
as of November 20, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
SERVICE VENDOR DATED AMENDED DESCRIPTION
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fire/Life Safety TeleFire 08/20/96 N/A Monitoring system & quarterly
System Monitor (213) 666-6000 inspection
24 hr/day
- ------------------------------------------------------------------------------------------------
HIVAC Water WEST 11/01/95 N/A HIVAC water treatment (hot
Treatment (714) 761-5191 and chilled loops)
1X/month
- ------------------------------------------------------------------------------------------------
Interior Plants Plant Republic 04/21/95 N/A Elevator Lobbies and
(310) 823-7256 Management Office
1X/week
- ------------------------------------------------------------------------------------------------
Janitorial ISS 03/16/95 N/A Day Porter
(213) 730-5500 40 hr/week (M-F)
-------------------------------
Cleaning Service
5X/week (S-Th)
- ------------------------------------------------------------------------------------------------
Landscape Van Herrick's 04/18/95 N/A Exterior maintenance
(310) 719-1008 1X/week
-------------------------------
Color program
1X/quarter
-------------------------------
Tree trimming - as needed
- ------------------------------------------------------------------------------------------------
Marble Solomon Marble 04/18/95 N/A Exterior Maintenance & Interior
- ------------------------------------------------------------------------------------------------
(818) 834-1450 Lobby
1X/week
-------------------------------
Interior lobby walls
2X/year
-------------------------------
Exterior planters
4X/year
- ------------------------------------------------------------------------------------------------
Pest American City 02/02/93 N/A Common & parking areas
Pest Control 2X/month
(310) 542-8622
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Security ACSS Security 04/21/95 N/A 1 guard
(213) 384-2911 24 hr/day
- ------------------------------------------------------------------------------------------------
Sprinklers Scott Campbell Co. 07/19/94 N/A Building wide fire sprinkler
(213) 852-5103 installation
- ------------------------------------------------------------------------------------------------
Telephone Main Pacific Bell 09/14/94 N/A Main Vault and intrabuilding
Vault & Cable (800) 655-4555 Network Cable
1X/year
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 90
BEVERLY SUNSET MEDICAL BUILDING
Contract Summary
as of November 20, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
SERVICE VENDOR DATED AMENDED DESCRIPTION
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trash West Hollywood Recycling 04/21/95 N/A Trash removal, recycling pick-up
Services (818) 333-2442
(Also Zakaroff Recycling)
Trash - 5X/week
paper - on call
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 91
3. PERMITS:
D-8
<PAGE> 92
BEVERLY SUNSET MEDICAL BUILDING
Building Permit Listing
as of November 20, 1997
<TABLE>
<CAPTION>
<S><C><C><C>
- ----------------------------------------------------------------------------------------------------------
Number of
Name Expires Permits Comments
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Permit to Operate Air Pressure Tank 5/7/2002 2 Building air compressors for HVAC,
and tenant dental equipment
- ----------------------------------------------------------------------------------------------------------
Permit to Operate an Elevator 3/11/1998 4 Building Elevators 1-4.(1)(2)
- ----------------------------------------------------------------------------------------------------------
Permit to Operate 3/16/1998 1 Building Fire Pump
- ----------------------------------------------------------------------------------------------------------
Permit to Operate 3/16/1998 1 Building Emergency Generator
- ----------------------------------------------------------------------------------------------------------
</TABLE>
General Notes:
(1) There is a manlift in the parking garage that has not been operable for many
years. Since it is inoperable, it does not require a permit.
(2) Hamburger Hamlet has a hydrolic elevator and it is maintained for them by
Amtech Reliable Elevator. Hamburger Hamlet has the permit and it is
forthcoming to the management office.
To be updated at Closing
<PAGE> 93
4. MISCELLANEOUS PROPERTY ASSETS:
D-9
<PAGE> 94
BEVERLY SUNSET MEDICAL BUILDING
Miscellaneous Property Asset Listing
(Warrantees and Guarantees)
as of November 20, 1997
Name of Vendor Comments
Mesa Energy Systems, Inc. Chiller #2, Compressor #2
Mesa Energy Systems, Inc. Chiller #1, Compressor #2
Mesa Energy Systems, Inc. Chiller #3, Compressor #2
Mesa Energy Systems, Inc. Chiller #3, Compressor #1
To be updated at Closing
<PAGE> 95
EXHIBIT E
FORM OF NON-FOREIGN AFFIDAVIT
[See Following Page]
E-1
<PAGE> 96
NON-FOREIGN AFFIDAVIT OF
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.
A DELAWARE LIMITED PARTNERSHIP
Section 1445 of the Internal Revenue Code of 1986, as amended
(the "IRC"), provides that a transferee of a U.S. real property interest must
withhold tax if the transferor is a foreign person. Pursuant to California
Franchise Tax Board Notice 91-1 dated March 12, 1991, a transferee of a
California real property interest need not withhold tax under Section 18662 of
the California Revenue and Taxation Code, as amended, if the transferor is a
partnership. To inform the transferee that withholding of tax is not required
upon the disposition of a U.S. and California real property interest by BEVERLY
HILLS MEDICAL OFFICE PARTNERS, L.P., a Delaware limited partnership
("TRANSFEROR"), the undersigned Transferor hereby certifies as follows:
1. Transferor is not a foreign person, foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined in the IRC and the regulations promulgated thereunder);
2. Transferor's U.S. taxpayer I.D. number is 95-4098476;
3. Transferor is a limited partnership duly formed and validly
existing under the laws of the State of Delaware; and
4. Transferor's office address is 3 World Financial Center,
29th Floor, New York, New York 10285.
Transferor understands that this certification may be
disclosed to the Internal Revenue Service and/or the California Franchise Tax
Board, and that any false statement contained herein could be punished by fine,
imprisonment, or both.
E-2
<PAGE> 97
Under penalties of perjury, Transferor declares that it has
examined the foregoing certification and it is true, correct, and complete.
"TRANSFEROR"
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Beverly Hills Medical Office
Partners, L.P.
a Delaware corporation
Its: General Partner
By: ______________________________
Print Name: _______________________
Print Title: _____________________
E-3
<PAGE> 98
EXHIBIT F
FORM OF NOTICES TO TENANTS, EQUIPMENT LESSORS, AND VENDORS
[See Following Pages]
F-1
<PAGE> 99
NOTICE TO TENANT
_____________, 1997
[Tenant]
Beverly Sunset Medical Building
9201 West Sunset Boulevard, Suite [____]
West Hollywood/Los Angeles, California [_______]
Dear [Tenant]:
We are pleased to announce that the Beverly Sunset Medical
Building was sold today by Beverly Hills Medical Office Partners, L.P., a
Delaware limited partnership, to Arden Realty Limited Partnership, a Maryland
limited partnership.
The new owner has assumed the prior owner's rights and
obligations as landlord under your lease or occupancy agreement. This means that
the new owner holds the $_____________ security deposit you made and has assumed
responsibility to you for the return of the deposit pursuant to your lease and
the laws of the State of California, and that all rental or other payments
should be made payable to [__________]. All notices and communications from you
to the new owner are to be directed to [______________] at [address].
Sincerely,
SELLER:
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: ______________________________
Print Name: ______________________
Print Title: _____________________
F-2
<PAGE> 100
BUYER:
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By: _________________________________
Print Name: _________________________
Print Title: ________________________
F-3
<PAGE> 101
NOTICE TO VENDOR OR EQUIPMENT LESSOR
_____________, 1997
_________________________________
_________________________________
_________________________________
Dear [Vendor or Equipment Lessor]:
We are pleased to announce that the Beverly Sunset Medical
Building was sold today by Beverly Hills Medical Office Partners, L.P., a
Delaware limited partnership, to Arden Realty Limited Partnership, a Maryland
limited partnership.
The new owner has assumed the prior owner's rights and
obligations under your [service contract or equipment lease]. All notices and
communications from you to the new owner should [continue to] be directed to
[_______________________] at [address].
Sincerely,
SELLER:
BEVERLY HILLS MEDICAL OFFICE PARTNERS, L.P.,
a Delaware limited partnership
By: Medical Office Properties, Inc.,
a Delaware corporation
Its: General Partner
By: ______________________________
Print Name: [__________________]
Print Title: [__________________]
F-4
<PAGE> 102
BUYER:
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By: ___________________________________
Print Name: ___________________________
Print Title:___________________________
F-5
<PAGE> 103
SCHEDULE 10.2 (C)
1. Unit Numbers: 809, 811, and 812
Tenants: Drs. Binder and Bassilios
Dispute relating to First Amendment to Medical Office Lease dated
December 1996, specifically regarding the build-out of tenant improvements and
tenant's acceptance of the expansion premises.
G-1
<PAGE> 1
EXHIBIT 10.2
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 ___ day of September,
1997, by and between Activity Business Associates, LLC, a California limited
liability company ("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 in the City of
San Diego, State of California commonly known as Activity Business Park, 9235,
9245 and 9265 Activity Road and 9520 and 9530 Padgett Street and more
particularly described on Exhibit A hereto;
1.2 Appurtenances. All rights, privileges and easements
appurtenant to the Land to the extent owned by Seller, if any, 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");
<PAGE> 2
1.3 Improvements. All improvements and fixtures located upon
the Land, including, without limitation, five buildings containing in the
aggregate approximately 161,351 net rentable square feet, 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 in effect on the Closing Date (as
hereinafter defined) and approved by Buyer pursuant to this Agreement
(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 5.2 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."
2
<PAGE> 3
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The total purchase price for the Property shall
be the sum of Fourteen Million Six Hundred Thousand Dollars ($14,600,000) (the
"Purchase Price").
2.2 Payment of Purchase Price. The Purchase Price shall be paid as
follows:
(a) Initial Deposit. Upon the Opening of Escrow (as
hereinafter defined) Buyer shall deliver to First American Title Insurance
Company of Los Angeles ("Escrow Holder"), 520 N. Central Avenue, Glendale,
California 91203, Attn: Tricia Pewthers, the sum of One Hundred Thousand
Dollars ($100,000) (the "Initial Deposit"). In the event the sale of the
Property is consummated, the Initial Deposit shall be credited towards the
Purchase Price.
(b) Additional Deposit. On November 7, 1997, Buyer shall
deliver to Escrow Holder the sum of One Hundred Fifty Thousand Dollars
($150,000) (the "Additional Deposit"). The Initial Deposit and the Additional
Deposit are sometimes hereinafter referred to collectively as the "Deposit."
In the event the sale of the Property is consummated, the Deposit shall be
credited towards the Purchase Price.
(c) Assumption of Existing Loan. A portion of the
Purchase Price shall be payable by Buyer assuming the obligations of Seller
under that certain loan presently encumbering the Property (the "Existing
Loan"), such portion of the Purchase Price so payable being an amount equal to
the outstanding principal balance of the Existing Loan as of the Closing Date
(such amount being herein called the "Existing Loan Amount"). The Existing
Loan Amount as of the Closing Date is estimated to be approximately Eight
Million Two Hundred Seventy Thousand Dollars ($8,270,000).
(d) Balance of Purchase Price. The Purchase Price, less
the sum of the Deposit and the amount assumed by Buyer under the Existing Loan
(the "Purchase Price Balance"), estimated to be approximately Six Million
Eighty Thousand Dollars ($6,080,000), 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,
the Purchase Price Balance 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.
3
<PAGE> 4
2.3 Investment of Deposit; Liquidated Damages
2.3.1 Investment of Deposit. The Deposit shall be placed
in an interest-bearing account with a financial institution reasonably
acceptable to Buyer, or in another investment instrument designated by Buyer,
with all interest accruing to the benefit of Buyer. 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 AND 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/ WB Buyer: /s/ VJC
------------- -------------
2.4 Exchange of Property for Units. Seller has informed Buyer
that Seller may be interested in receiving partnership units in Buyer ("Units")
in lieu of a portion of the Purchase Price. In the event Seller desires to
receive Units, Seller shall so inform Buyer in writing of such election,
including the portion of the Purchase Price Seller would like to receive in
Units, prior to the expiration of the Contingency Period (as hereinafter
defined). Buyer and Seller agree to negotiate in good faith to enter into the
appropriate documentation ("Investor Documents") necessary to effect such an
exchange. The Investor Documents shall be on terms acceptable to Buyer in its
sole discretion, and shall include, among other things, investor
representations made on behalf of Seller and disclaimers with respect to the
Units. In the event Buyer and Seller cannot mutually agree on the Investor
Documents, Buyer's failure to deliver Units in lieu of a portion of the
Purchase Price shall not be deemed a default under this Agreement and shall not
impede or delay the Closing.
4
<PAGE> 5
ARTICLE 3
ESCROW
3.1 Deposit with Escrow Holder and Escrow Instructions. Within
three (3) 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
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 fee simple title to the Real Property shall be the issuance by First
American Title Title Insurance Company (the "Title Company") of an ALTA Owner's
Policy of Title Insurance (extended coverage) (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, other than the Existing
Loan.
5
<PAGE> 6
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, other than the Existing Loan.
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, other than the Existing Loan.
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, other than the Existing Loan.
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. Not later than ten (10) days
following the date first above written, Seller shall deliver to Buyer all of
the following:
5.1.1 at Seller's sole cost and expense, 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 at Seller's sole cost and expense, an ALTA survey of
the Real Property prepared by a licensed surveyor reasonably acceptable to
Buyer (the "Survey"). The Survey shall be certified to Buyer and the Title
Company and 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. The Survey
shall also indicate and certify as to the total acreage of the Real Property
and any encroachments of improvements onto easements or onto adjacent
properties or certify as to their absence and shall indicate the
6
<PAGE> 7
presence of improvements on property adjoining the Real Property if located
within five (5) feet of the boundaries of the Real Property; and
5.1.3 at Seller's sole cost and expense, copies of all
existing and proposed easements, covenants, restrictions, or similar agreements
which affect the state of title to 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"). It is understood that
the Permitted Exceptions shall include the documents evidencing the Existing
Loan, in the event Buyer approves the Existing Loan in accordance with Section
5.2 hereof. Buyer shall have from the date hereof until November 7, 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
disapproval 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. Within ten (10) days
following the date hereof, Seller shall deliver 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;
7
<PAGE> 8
(c) copies of the Leases, and all licenses, service contracts
(including parking, elevator, HVAC and landscaping maintenance contracts),
management contracts, and brokerage agreements which relate to the Property,
and, to the extent in Seller's possession, copies of all current permits,
variances, insurance policies, maps, certificates of occupancy, building
permits and other documentation and evidence that the 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);
(e) operating statements for calendar years 1995 and 1996, and
1997 monthly statements through the most recently completed month;
(f) all available plans, structural drawings, architectural
and "as built" drawings in Seller's possession, 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;
(g) copies of property tax bills for the last two (2) years
and copies of the most recently available utility bills respecting the
Property;
(h) a list of all personal property owned by or leased by
Seller and used in connection with the ownership or operation of the Property;
(i) a certificate of Seller certifying to Seller's 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 or the Property;
(j) copies of all documents evidencing or relating to the
Existing Loan; and
(k) any and all other reports, plans or studies relating to
the Property (collectively, the "Reports and Documents"). 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
8
<PAGE> 9
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, an environmental assessment of the Property, including any further
testing recommended by such initial assessments, 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 12.2 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, prior to the
Closing, 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"). In the event
that Buyer disapproves of any Estoppel Certificate 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, or, if delivered subsequent to the
expiration of the Contingency Period, within five (5) business days following
receipt of such estoppel certificate, in
9
<PAGE> 10
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 Lender Estoppel Certificate. Buyer shall receive, prior to
the expiration of the Contingency Period, an estoppel certificate from the
lender under the Existing Loan in the form of Exhibit I hereto and in substance
satisfactory to Buyer, in Buyer's sole and absolute discretion (the "Lender
Estoppel Certificate"). In the event that Buyer disapproves the Lender
Estoppel Certificate, 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, 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.
5.6 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.
5.7 Covenants of Seller. Seller shall have complied with all of
Seller's covenants and agreements contained in or made pursuant to this
Agreement.
5.8 Delivery of Documents. Seller shall have delivered into Escrow
the documents and instruments described in Section 7.2 hereof and shall have
delivered to Buyer the documents and instruments described in Section 7.3
hereof.
5.9 Condition of Property. The condition of the Property shall
not have changed from the date of this Agreement to the Closing Date, ordinary
wear and tear excepted.
5.10 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 4 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).
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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 7.4
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 5 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, 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 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 on January 6, 1998 (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
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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 J 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;
7.2.7 All documents necessary to effect the assignment of
the Existing Loan; and
7.2.8 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
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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, Estoppel Certificates
and the Lender Estoppel Certificate (if not previously delivered), all
correspondence in Seller's possession 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
on the Property; and
7.3.7 Copies of all insurance policies obtained or
maintained by Seller and containing coverage applicable to 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, and/or, to the extent
Seller has elected to receive Units in accordance with Section 2.4 of this
Agreement, the certificates representing the Units 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;
7.4.2 All documents necessary to effect the assignment and
assumption of the Existing Loan; and
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7.4.3 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;
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(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, the Seller or the Buyer at
any time subsequent to Closing but with reference to any period prior thereto
during Seller's ownership thereof, 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, 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,
rent which is reduced by a sum certain or a percentage amount for a defined
period of time, and other similar monetary concessions or obligations under all
Leases for the period following the Closing (collectively, "Free Rent") shall
be credited to Buyer against the Purchase Price at Closing (excluding therefrom
any Free Rent which was disclosed by Seller and agreed to be assumed by Buyer
during the Contingency Period); and
(viii) All other operation expenses incurred in the
management and operation of the Property.
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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. Buyer shall pay all costs of assuming the
Existing Loan up to a maximum of one percent (1%) of the Existing Loan Amount;
any costs in excess of one percent (1%) of the Existing Loan Amount shall be
paid by Seller.
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:
8.1 Condition of Property. To the best of Seller's knowledge,
without any duty to investigate, 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 and in compliance with all applicable governmental laws,
ordinances, regulations and requirements.
8.2 Use and Operation. To the best of Seller's knowledge, without
any duty to investigate, the use and operation of the Property now are, and at
the time of Closing will be, in substantial 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. 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, to the extent such
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document was prepared by Seller, contain no material inaccuracies or
misstatements of fact, and all such contracts and other documents relating to
or affecting the Property have been or will be 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 8.5 hereto, on the part of any lessee, and, to the best knowledge of
Seller, 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 8.5, 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 Existing Loan. True and correct copies of the Existing Loan
Documents have been delivered or otherwise made available to Buyer. Seller has
not given or received any written notice of a material default under the
Existing Loan Documents that remains uncured.
8.7 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 8.7
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 8.7 pursuant to
Section 5.2 hereof. There will be no contractors, subcontractors,
sub-subcontractors, materialmen or any persons or entities who will be entitled
to a
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mechanic's lien against the Property at Closing. There is no obligation of
Seller under the terms of any contract, lease or other instrument relating to
or affecting the Property; other than the obligations contained in the
contracts, leases and other documents disclosed to Buyer pursuant to this
Agreement. There will be as of the Closing Date no obligation of Buyer under
the terms of any contract, lease or other instrument affecting the Property
other than the obligations contained in the contracts, leases and other
documents which Buyer has elected to assume pursuant to this Agreement.
8.8 Brokerage Commissions. 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.
8.9 Labor Disputes. There is no current labor dispute with any
maintenance or other personnel or employees of Seller or any contracts with
respect to the Property which could adversely affect the use, operation or
value of the Property.
8.10 Absence of Other Agreements Affecting the Property. To the
best knowledge of Seller, there are no easements, encumbrances or other
agreements which create a lien against the Property except as may be shown in
the Preliminary Title report.
8.11 Default in Respect of Appurtenances. To the best knowledge of
Seller, without any duty to investigate, 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.
8.12 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.
8.13 Utilities. All water, sewer, gas, electric, telephone, and
drainage facilities and all other utilities required by law or by the current
use and operation of the Property are, and at the time of Closing will be,
connected and operating pursuant to valid permits, and are adequate to service
the Property as it is currently used 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.
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8.14 Use Permits and Other Approvals. To the best of Seller's
knowledge, without any duty to investigate, Seller has obtained all licenses,
permits, approvals, easements and rights of way, including proof of dedication,
required from all governmental authorities having jurisdiction over the
Property or from private parties for the normal use and operation of the
Property and to ensure free and unimpeded vehicular and pedestrian ingress to
and egress from the Property as required to permit the normal intended usage of
the Property by the tenants thereof, their invitees and customers.
8.15 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).
8.16 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 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.
8.17 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.
8.18 Other Contracts to Convey Property. Seller has not committed
nor obligated itself in any manner whatsoever to sell the Property to any party
other than Buyer.
8.19 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. No proceeding or inquiry by any governmental
authority with respect to the presence of any
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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. Except as may be disclosed in
any environmental reports delivered by Seller to Buyer pursuant to this
Agreement, 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.
8.20 Transactions with Affiliates. Except as disclosed on Schedule
8.20 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 8.20. 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
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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.
10.2 No Leases or Other Contracts. Seller shall not enter into or
modify any leases, service contracts or other similar agreements with respect
to the Property without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed. Buyer agrees to respond to Seller's request
for approval within two (2) business days following request therefore.
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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 Dollars ($100,000) 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 Dollars ($100,000) 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
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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 for the purpose of
conducting Buyer's Inspections. Buyer agrees to coordinate all such visits to
the Property with a representative of Seller, and to conduct all such visits in
a commercially reasonable manner which minimizes any unnecessary disruption to
tenants. 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 indemnifies and holds Seller harmless from and against any and all
liability, loss, cost, damage and/or expense, including, without limitation,
attorneys' fees and costs, resulting directly from Buyer's entry onto the
Property.
12.3 Buyer's Obligation to Maintain Insurance. Prior to any entry
onto the Property pursuant to this Agreement by Buyer or any person or entity
acting on behalf of Buyer, Buyer shall provide Seller with a certificate of
insurance confirming the effectiveness of a policy of liability insurance in
favor of Buyer, which names Seller as additional insureds, with a combined
single limit coverage in an amount of not less than One Million Dollars
($1,000,000) per occurrence and which is not amendable or cancelable on less
than thirty (30) days prior written notice.
12.4 Marketing of Property. From November 1, 1997 until the
Closing Date, Buyer shall have the right, but not the obligation, to market
the Property for lease. Seller agrees to cooperate with Buyer in Buyer's
marketing efforts.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Seller. Seller hereby agrees 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
23
<PAGE> 24
(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 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
24
<PAGE> 25
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, Esq.
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.
If to Seller: c/o William Bloodgood
4766 Park Granada
Suite 104
Calabasas, California 91302
with a copy to: Irell & Manella
1800 Avenue of the Stars
Suite 900
Los Angeles, California 90067
Attn: Louis A. Huskins, Esq.
If to Escrow Holder: First American Title Co. of LA
-------------------------------------
520 N. Central Avenue
-------------------------------------
Glendale, CA 91203
-------------------------------------
Attn: Tricia Pewthers
-------------------------------------
If to the Title Company: First American Title Co. of LA
-------------------------------------
520 N. Central Avenue
-------------------------------------
Glendale, CA 91203
-------------------------------------
-------------------------------------
Attn: Tricia Pewthers
-------------------------------------
25
<PAGE> 26
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, 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 other than to CB Commercial. 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. Buyer may assign its rights or
obligations under this Agreement upon notice to Seller, and Buyer shall be
relieved of any further obligations hereunder provided that such assignee
assumes the obligations of the Buyer hereunder 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 Deed
26
<PAGE> 27
and the transfer of title to the Property for a period of two (2) years
following the Closing.
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 laws of the State of California.
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
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.
27
<PAGE> 28
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 any 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
28
<PAGE> 29
of Agreement in the form of Exhibit k 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 Los Angeles 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 L hereto, to Buyer's accountants.
14.24 Tax Deferred Exchange. Seller may desire to dispose of the
Property through a tax deferred exchange which qualifies for non- recognition
of gain under Section 1031 of the Internal Revenue Code. Buyer shall cooperate
with Seller in attempting to effectuate such exchange, including, but not
limited to, the execution of such documentation as may be reasonably necessary
to effect such exchange, provided that (i) Buyer shall not incur any additional
liability in connection with an exchange for the benefit of Seller, (ii) Buyer
shall not be obligated to take title to any real property (other than the
Property), (iii) the date of Closing shall not be extended as a result of the
exchange, without Buyer's prior written consent, and (iv) any additional costs
and charges attributable to the exchange, including, but not limited to,
attorneys' fees, brokers' commissions and other transaction related expenses
shall be paid for by Seller. Buyer and Seller further agree that Seller may
substitute an intermediary ("Intermediary") to act in place of Seller as the
seller of the Property. The Intermediary shall be designated in writing by
Seller. Upon identification of Intermediary, Intermediary shall be substituted
for Seller as the seller of the Property. Buyer agrees that performance by
Intermediary will be treated as performance by Seller. Seller shall
unconditionally guarantee the full and timely performance by Intermediary of
each and every one of the representations, warranties, covenants, indemnities,
obligations and undertakings, and, in the event of breach, Buyer may proceed
directly against Seller on this guarantee without the need to join Intermediary
as a party to any action against Seller. Seller unconditionally waives any
defense that it might have as guarantor that it would not have if it had made
or undertaken these representations, warranties, covenants, indemnities,
obligations and undertakings directly. In the event of the breach of any
representations, warranties, covenants, obligations and undertakings by Seller
or Intermediary or in the event of any claim upon any indemnity of Seller or
Intermediary (whether the representation, warranty, covenant, indemnity,
obligation or undertaking is express or implied), Buyer's exclusive recourse
shall be against the Seller and Buyer shall have no recourse of any type
against the Intermediary arising from this transaction.
29
<PAGE> 30
14.25 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 SHALL BE SETTLED BY ARBITRATION IN THE CITY OF LOS ANGELES, 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/ WB /s/ VJC
-------------------------- --------------------------
Seller's Initials Buyer's Initials
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
30
<PAGE> 31
Seller: Activity Business Associates, LLC,
a California limited liability company
By:
---------------------------------
William G. Bloodgood
Its: Vice President
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
------------------------------
31
<PAGE> 32
Seller: Activity Business Associates, LLC,
a California limited liability company
By: /s/ William G. Bloodgood
---------------------------------
William G. Bloodgood
Its: Vice President
Buyer: Arden Realty Limited Partnership,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
---------------------------------
Its:
------------------------------
32
<PAGE> 33
LIST OF EXHIBITS
Exhibit A: Description of the Land
Exhibit B: Leases
Exhibit C: Grant Deed
Exhibit D: Assignment of Leases
Exhibit E: Bill of Sale
Exhibit F: Assignment of Service Contracts
Exhibit G: Assignment of Intangible Property
Exhibit H: Form of Estoppel Certificate
Exhibit I: Form of Lender Estoppel Certificate
Exhibit J: Affidavit of Non-Foreign Status
Exhibit K: Memorandum of Agreement
Exhibit L: Form of Audit Letter
<PAGE> 34
LIST OF SCHEDULES
Schedule 8.5: Lease Disclosures
Schedule 8.7: Service Contract Disclosures
Schedule 8.20: Disclosures Regarding Affiliates
<PAGE> 35
SCHEDULE 8.5
------------
LEASE DISCLOSURES
Pursuant to paragraph 8.5, page 17, of this agreement, Seller hereby certifies
that no conditions exist that requires disclosure in schedule 8.5, other than
the following:
a) Seller currently in under lease with Capstone Pharmacy, (tenant). A copy
of the lease is in Buyers possession. Terms of the lease call for Seller
(lessor) to carpet units 110, 209, 210. Tenant has been too busy to have
the new carpeting installed, but retains the right to require Seller
(lessor) to install new carpeting at his request.
Schedule 8.5 Lease Disclosures
<PAGE> 36
SCHEDULE 8.7
------------
SERVICE CONTRACT DISCLOSURES
Pursuant to paragraph 8.7, page 17 of this agreement, there exists no service
contracts or other agreements on the property which are not cancelable on 30
days notice. There are no entities of any kind entitled to lien the property.
Seller has no obligation under any contract, lease, or other instrument other
than that specified in the contract, lease, or other instrument given to Buyer
and outlined in that letter dated October 7, 1997 from Russ Ries to Brigitta B.
Troy. All of the above statements shall be true as of closing.
Schedule 8.7 Service Contract Disclosure 10.16.97
<PAGE> 37
SCHEDULE 8.20
-------------
TRANSACTIONS WITH AFFILIATES
Pursuant to paragraph 8.20, page 20 of this agreement, there are no transactions
with affiliates other than the following:
a) A project management agreement with Marus Enterprises, owned by Russell
Ries, the managing member of the Seller. Said agreement is to be
terminated upon the closing of this transaction.
b) There exists a lease between Seller and Marus Enterprises on 939 sq. ft.,
unit 215, building 3. Buyer is in possession of said lease. Said lease
shall terminate upon closing and tenant shall vacate the unit on or before
2-1-98. Tenant shall pay Buyer $710.94 per month from closing to vacating
the unit.
Schedule 8.20 Trans. w/Affiliates 10.16.97
<PAGE> 38
Activity Business Park
Rent Abatement
<TABLE>
<CAPTION>
Rent
Tenant Date Abatement
<S> <C> <C> <C>
Staff Builders Aug-98 $ 1,675.00
Sep-98 1,675.00
SmithKline Beecham Feb-98 11,984.09 represents free rent on original
Jul-98 12,276.39 lease executed 1991 -- Tenant
Feb-99 12,583.30 receives no free rent on expansion
Jul-99 12,890.21 space taken in 1994.
Wells Fargo Alarm Feb-98 1,523.13
Mar-98 1,523.13
----------
$56,130.25
1998 $30,656.74
1999 25,473,51
----------
$56,130.25
</TABLE>
The above represents the total Rent abatement on activity Business Park. No free
rent has been given on project since 1995 as market conditions have been in
Landlord's favor.
<PAGE> 39
EXHIBIT A
DESCRIPTION OF PROPERTY
The Property is situated in the County of San Diego, State of California and is
described as follows:
PARCEL 1 OF PARCEL MAP NO. 13528, CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY.
A.P.N.: 341-220-38-00
EXHIBIT A
<PAGE> 40
Leases
EXHIBIT B
<PAGE> 41
Activity Business Park
Rent Roll
October 1997
<TABLE>
<CAPTION> SIZE LEASE LEASE CURRENT
BLDG UNIT TENANT SQ. FT. START END RENT COMMENTS
<S> <C> <C> <C> <C> <C> <C> <C>
1 101 IMAGE Hospitality Consultants 1,920 03/01/91 02/29/00 1,454.00
1 104 Computer Processing Unlimited 9,600 06/01/90 01/31/02 8,202.00 occupy suites 102, 103, 104, 105, 106
1 107 Micro Precision Calibration 1,920 09/01/97 08/31/99 1,497.60
1 108 Vivid Graphics 1,920 01/01/93 05/31/98 1,572.00
1 109 USA Today 1,920 05/01/93 04/30/03 1,559.00
1 110 Hi Tech Electronics 1,920 04/01/94 03/31/99 1,398.00
1 111 Ying-Kay Deli 650 07/01/89 04/30/99 549.00
1 112 Carden Printing, Inc. 3,240 11/01/89 02/28/01 2,763.00
2 101 Natel Engineering Company, Inc. 1,440 05/01/92 02/28/99 1,152.00
2 102 A Catered Affair 1,440 01/01/96 08/31/00 1,048.00
2 103 Force Electronics, Inc. 1,536 06/01/93 05/31/98 1,212.50
2 104 Jadestone Financial Corp. 1,536 05/01/91 05/14/99 1,198.00
2 105 Marilyn Goebel Escrow 2,896 07/01/90 09/30/99 2,409.68 See Note 1
2 106 Ericson & Associates 2,784 01/06/95 01/31/98 1,948.80 occupy suites 106, 107 / See Note 2
2 109 A Catered Affair 2,720 01/01/91 08/31/00 2,177.00 occupy suites 108, 109
2 110 San Diego Auto Credit, Inc. 1,536 05/01/91 04/30/99 1,152.00
2 111 The Trendex Group 1,536 03/01/95 02/28/98 1,075.20
2 112 Phanatech 2,880 09/01/95 08/31/00 2,037.76 occupy suites 112, 113
3 101 Harvey King, Inc. 3,000 04/01/92 03/31/02 2,460.00
3 102 Daniel A. Cota 1,011 04/01/97 03/31/00 788.58
3 103 Arch Communications 1,932 01/01/96 12/31/02 1,522.25
3 104 1st Choice Home Healthcare 3,498 08/01/93 12/31/98 3,189.00 occupy suites 104, 105
3 106 Warehouse Office Supply 1,680 11/01/89 12/31/97 1,204.00
3 107 Respironics Colorado, Inc. 1,983 11/01/92 10/31/97 1,624.00 See Note 3
3 108 Phanatech 1,983 06/01/96 05/30/00 1,444.00
3 110 Phanatech 4,035 07/01/97 08/31/00 2,905.00 occupy suites 109, 110
3 208 Construction Notice Services 9,546 07/01/90 06/30/99 7,148.00
3 210 Executive Assist Integration 2,040 05/15/96 11/30/98 1,499.40
3 211 Construction Collection Srvcs 1,254 03/01/95 02/28/98 987.53
3 212 American Home Health 1,194 03/01/95 02/28/98 896.00
3 213 Pacific Rim Personnel Services 1,154 09/01/93 03/31/98 832.03
3 214 NSAS Cargo International 920 10/01/94 12/31/97 670.16
3 215 NARUS Enterprises 939 01/01/95 12/31/98 710.94
3 216 Scanivalve Corp 939 09/01/95 08/31/99 704.25
3 217 Executive Assist Integration 902 12/01/94 11/30/98 662.97
3 218 Executive Assist Integration 696 07/15/96 11/30/98 511.56
4 101 SmithKline Beecham 25,559 02/15/91 02/14/01 29,323.61 occupy ste 101-106 & Bldg 5 ste 106
4 108 Mesa Photo 9,730 03/01/90 02/28/00 10,679.00 occupy suites 107 - 108
4 109 Vextra Design Inc. 4,102 03/01/97 07/31/00 2,707.00
4 110 Wells Fargo Alarm Service 4,102 12/01/88 01/31/99 3,046.26
5 101 American Pathology Resources 15,944 03/01/96 01/31/03 14,123.00
5 105 Vacnet 3,870 0.00
5 107 Emerald Digital Diagnostics 3,870 03/01/97 02/28/03 3,251.00
5 110 Capstone Pharmacy Services 12,074 02/01/91 02/28/04 11,326.00
Total Rent 138,621.08
Total C.A.N. 5,521.68
TOTAL Leased 157,481 97.60% 144,142.76
TOTAL Vacant 3,870 2.40%
TOTAL 161,351
</TABLE>
<PAGE> 42
Activity Business Park
Notes to Rent Roll
October 1997
1. Marilyn Goebel Escrow: In addition to the monthly Base Rent, the tenant is
repaying $21,500 of deferred rent at the rate of $537.50 per month. As of
September 30, 1997 the balance is $12,362.50.
2. Ericson & Associates: During August 1997, the tenant requested a buyout of
the remaining portion of their lease which expired on January 1, 1998. The
tenant's monthly Base Rent was $1,948.80 ($0.70/sqft). The revenue received
from the buyout is being accounted for as prepaid rent. Subsequent to the
buyout agreement, the suite was re-leased for five years to Mikron
Instruments, Inc. with a starting monthly Base Rent of $2,366.40
($0.85/sqft) commencing on December 1, 1997.
3. Respironics Colorado, Inc.: The tenant has expressed the desire to extend
the lease for two years. They have been presented with a lease addendum to
extend the lease with a starting base rent of $1,562.00 ($0.79/sqft).
<PAGE> 43
Exhibit C
<PAGE> 44
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL THIS DEED
AND TAX STATEMENTS TO:
Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars
18th Floor
Los Angeles, CA 90067
Attn: Peter M. Weil, Esq.
- ------------------------------------------
GRANT DEED
A.P.N._____________
The undersigned grantor(s) declare(s):
Documentary transfer tax is SEE SEPARATE DECLARATION.
() computed on full value of property conveyed, or
() computed on full value less value of liens and encumbrances remaining
at time of sale.
() Unincorporated area: ( ) City of_____________________, and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
ACTIVITY BUSINESS ASSOCIATES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY,
hereby GRANT(S) to
ARDEN REALTY LIMITED PARTNERSHIP, A MARYLAND LIMITED PARTNERSHIP,
the following described real property in the City of San Diego, County of San
Diego, State of California:
AS PER LEGAL DESCRIPTION ATTACHED HERETO, MADE A PART HEREOF AND
ATTACHED HERETO AS EXHIBIT A.
Signature of Grantor
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
----------------------------------
William G. Bloodgood
Its: Vice President
<PAGE> 45
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
------------------------------------------
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS is made this day of
____, ___________, 1997, by and between ACTIVITY BUSINESS ASSOCIATES, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY, ("Assignor"), and ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Assignee") with reference to the
following facts:
C. Assignor, as Lessor, and each of the lessees named in Exhibit "A"
attached hereto, have entered into a lease for the space indicated on said
Exhibit "A" comprising a portion of the improvements constructed upon that
certain parcels of real property situated in the City of San Diego, State of
California (the "Property"), more particularly described in Exhibit "B" attached
hereto (all of said leases referred to in Exhibit "A" as amended to the date
hereof being hereinafter collectively referred to as the "Leases").
B. Assignor has received rent security deposits and rents prepaid more
than one (1) month in advance from lessees under some of the Leases, in the
total amount of $ in cash referred to in Exhibit "A" attached hereto and made a
part hereof (collectively the "Security Deposits").
C. Assignor now desires to assign and transfer to Assignee all of
Assignor's interest as lessor in the Leases and the Security Deposits, subject
to the rentals, terms, covenants, obligations, easements and restrictions set
forth therein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee, and its successor
and assigns, all of Assignor's interest as Lessor in and to the Leases and the
Security Deposits, subject to said rentals, terms, covenants, obligations,
easements and restrictions therein provided.
2. Assignee hereby (a) accepts the assignment of the Leases and the
Security Deposits, shall be entitled to all rights and benefits accruing to the
lessor thereunder, and (b) agrees to assume and be bound by the terms of the
Leases subject to the terms and provisions of each of the Leases, from and after
the date hereof, and (c) agrees to defend and indemnify Assignor to the extent
of Assignee's interest in the Property from all obligations of landlord under
the Leases or obligations as landlord which accrue from and after the date
hereof.
Exhibit D
<PAGE> 46
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of July _____, 1997, between
Seller and Arden Realty Limited Partnership and the covenants, agreements and
limitations contained therein are incorporated herein by reference as if herein
set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
of Leases and Security Deposits as of the day and year first above written.
"Assignor":
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
William G. Bloodgood
Its: Vice President
"Assignee':
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
-----------------------------------
Its:
----------------------------------
<PAGE> 47
BILL OF SALE
ACTIVITY BUSINESS ASSOCIATES, LLC, A CALIFORNIA LIMITED LIABILITY
COMPANY, ("SELLER"), for good and valuable consideration heretofore paid by
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Buyer"), the
receipt and sufficiency of which are hereby acknowledged, hereby sells,
transfers, grants, bargains, conveys, assigns, and delivers to Purchaser, its
successors and assigns free and clear of all liens and encumbrances: All
fixtures, fittings, appliances, apparatus, equipment, machinery, chattels and
personal property, to the extent owned by Seller, and listed in Exhibit "A"
attached hereto, including all building maintenance supplies and heating,
ventilating and air conditioning, electrical, mechanical and plumbing equipment
and facilities which are used in connection with the operation or maintenance of
the improvements erected upon the land described in Exhibit "B" attached hereto.
This instrument is given pursuant to that certain Agreement of Purchase
and Sale and Escrow Instructions dated as of July _, 1997, between Seller and
Buyer and the covenants, agreements and limitations contained therein are
incorporated herein by reference as if herein set out in full.
IN WITNESS WHEREOF, Seller has executed this instrument this ___ day of
______________.
"SELLER"
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
William G. Bloodgood
Its: Vice President
Exhibit E
<PAGE> 48
ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES
AND GUARANTEES
THIS ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES AND GUARANTEES is made
this ____ day of __________, by and between ACTIVITY BUSINESS ASSOCIATES, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY ("Assignor"), and ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Assignee"), with reference to the
following facts:
A. Assignor is the owner of the benefits of, subject to the burdens
contained in, those certain service agreements currently in effect in connection
with the business of Assignor related to the Property being purchased by
Assignee concurrently herewith, all of which service contracts and agreements
(the "Service Agreements") are annexed hereto as a part of, or are described in,
Exhibit "A" attached hereto and made a part hereof.
B. Assignor has heretofore used or acquired (or may have acquired)
certain intangible rights in connection with the Property and/or the
Improvements including but not limited to various trade names, logos, easements,
licenses, permits, air rights, certificates of occupancy, warranties, rights of
way, signs, sewer agreements, water line agreements, utility agreements, water
rights and oil, gas and mineral rights and other intangible property
(collectively the "Intangibles").
C. Assignor is the owner, or entitled to the benefit, of the warranties
and guaranties, exprees and implied, covering the fixtures and equipment located
on the Property ("Warranties and Guaranties").
D. Assignor now desires to assign and transfer to Assignee all of its
right, title and interest in the Service Agreements, Intangibles and the
Warranties and Guaranties subject to all of the payments, terms, covenants,
obligations, agreements and reductions therein set forth.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee and its successors
and assigns, all Assignor's right, title and interest in the Service Agreements,
Intangibles and the Warranties and Guaranties subject to said payments, terms,
covenants, obligations, agreements and restrictions.
2. Assignee hereby (a) accepts the assignment of the Guaranties, shall
be entitled to all rights and benefits accruing to the Assignor thereunder, (b)
agrees to assume and be bound by the terms thereof from and after the date
hereof, and (c) agrees to defend and indemnify Assignor to the extent of
Assignee's
Exhibit F
<PAGE> 49
interest in the Property from all obligations of Assignor under the Service
Contracts, Intangibles and the Warranties and Guaranties or from any which
accrue from and after the date hereof.
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of September ___, 1997,
between Seller and Arden Realty Limited Partnership and the covenants,
agreements and limitations contained therein are incorporated herein by
reference as if herein set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
of Service Contracts, Warranties and Guarantees as of the day and year first
hereinabove written.
"Assignor':
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
William G. Bloodgood
Its: Vice President
"Assignee":
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
----------------------------
Its:
---------------------------
<PAGE> 50
ASSIGNMENT OF INTANGIBLE PROPERTY
THIS ASSIGNMENT OF INTANGIBLE PROPERTY (this "Assignment") is made as
of ________, 199_ by Activity Business Associates, LLC, a California limited
liability company ("Assignor"), to Arden Realty Limited Partnership, a Maryland
limited partnership ("Assignee") pursuant to the provisions of that certain
Agreement of Purchase and Sale dated as of September __, 1997, (the "Purchase
Agreement"), by and between Assignor and Assignee.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, subject to the terms and provisions of the
Purchase Agreement, Assignor hereby sells, transfers, conveys and assigns to
Assignee the Intangible Property, as such term is defined in the Purchase
Agreement, including those items set forth on Schedule A attached hereto and
made a part hereof.
IN WITNESS WHEREOF, this Assignment has been executed by Assignor on
the date set forth above.
"ASSIGNOR"
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
William G. Bloodgood
Its: Vice President
Exhibit G
<PAGE> 51
TENANT ESTOPPEL CERTIFICATE
Arden Realty Limited Partnership
9100 Wilshire Boulevard
Suite 700
Beverly Hills, California 90212
Attn: Ms. Brig Troy
Re: Tenant Lease for ________________
_______________, California
Suite _________
Ladies and Gentlemen:
We understand that you are the proposed purchaser of an ______________
building complex located at ____________________, California (the "Property")
in which the undersigned is a tenant. We further understand that in connection
with your purchase of the Property it is necessary that you understand the
precise nature of our tenancy and in order to so do, we hereby warrant and
represent to you that with respect to our lease, as amended (the "Lease") and
more particularly described in Schedule "A" attached hereto (the "Schedule")
the following is true and correct:
1. The Lease constitutes the entire agreement between the
undersigned and the landlord thereunder with respect to the subject matter
thereof and the Lease has not been modified, amended or supplemented in any way
except by the amendments or other agreements described in the Schedule.
2. The summary of the basic terms of the Lease contained in the
Schedule is true and correct.
3. Except as provided in the Schedule, the undersigned has not
assigned, transferred or hypothecated the Lease or any interest therein or
entered into a sublease for any portion of the premises covered by the Lease
and no person or firm other than the undersigned or its employees is in
possession of such premises or any portion thereof.
4. The undersigned is not in default (or with the giving of
notice or the passage of time or both will not be in default) under the Lease
and the undersigned has no claim against, off-set, credit, defense,
counterclaim or deductions against the landlord thereunder, or any rent or
other sums due or payable under the Lease, and the landlord thereunder is not
in default (or with the giving of notice or the passage of time or both will
not be in default) under the Lease.
Exhibit H
<PAGE> 52
5. The undersigned has no option, right of first refusal or
otherwise to purchase the Property or any portion thereof or any interest
therein and the only interest of the undersigned in the Property is that of a
tenant pursuant to the terms of the Lease.
6. The undersigned does not engage in the generation, storage or
disposal of "Hazardous Materials" on the Property and to the best of the
undersigned's knowledge, there are no Hazardous Materials located in, on, under
or in the vicinity of the Premises demised by the Lease except for normal
office supplies. The undersigned agrees not to use, store, or permit the use,
storage or release of any Hazardous Materials on, under or about the Premises
or the Property other than what is permitted by applicable law, codes,
regulations or restrictions and used by the undersigned in accordance with
applicable laws and in amounts as dictated by the normal conduct of the
undersigned's business. The term "Hazardous Material" means any toxic or
hazardous substance, material or wastes which if or becomes regulated by any
local government, the State of California, the United States government or any
agency or division thereof.
7. The undersigned is not the subject of any bankruptcy,
insolvency, debtor's relief, reorganization, receivership or other similar
proceedings.
8. The person executing this Certificate hereby warrants and
represents that he or she has the power and authority to execute and deliver
this Certificate on behalf of the tenant named herein.
9. The undersigned as tenant hereby ratifies and confirms the
Lease and the tenancy created thereby and upon consummation of sale and notice
thereof, agrees to accept you or your assignees and your lenders as the
landlord thereunder.
10. The undersigned agrees to notify your lenders at the address
designated by such lenders of any default on the part of Landlord under the
Lease, and further agrees that notwithstanding any provisions of the Lease, no
notice, cancellation or termination thereof shall be effective unless Lender
shall have received such notice and have failed to cure or commence to cure
such default within a reasonable time following receipt of such notice and the
expiration of any cure period applicable thereto.
<PAGE> 53
We understand that the current owner, ____________________, you and/or
any other purchaser(s) and their respective lenders will, if you proceed with
the purchase of the Property, rely on this Certificate.
Very truly yours,
___________________________________
Name of Tenant
___________________________________
Signature
___________________________________
Date
<PAGE> 54
SCHEDULE"A"
-----------
Summary of Lease Terms
----------------------
(1) Name of Tenant:_______________________________________________________
(2) Lease Date:___________________________________________________________
(3) Amendment Dates, Separate Agreements, if any:_________________________
(4) Suite No.:_________; Estimated Square Footage:________________________
(5) Lease Start Date:____________; Lease End:_____________________________
(6) Remaining Option(s) to Extend:________________________________________
(7) Option(s) for Additional Space:_______________________________________
(8) Monthly Base Rent: $_____________;
Escalations/CAM Charge: $_____________;
Total Monthly Rent: $_____________;
(9) Tenant's Percentage Share of Increased Operating Costs: _____________%
(10) Security Deposit: $_______________; Prepaid Rent:_____________________
(11) Assignees/Subtenants:_________________________________________________
(12) Parking Spaces:_______________________________________________________
(13) Lease Guarantor(s):___________________________________________________
(14) Uncured Defaults by Landlord: None____________________________________
(15) Exclusive Uses:_______________________________________________________
(16) Free or Reduced Rent Months remaining after____/01/__:________________
(17) Tenant Improvements or other allowances due Tenant: $_________________
<PAGE> 55
(18) Comments, if any:_____________________________________________________
______________________________________________________________________
______________________________________________________________________
_____________________________
Name of Tenant
By:__________________________
Date:________________________
<PAGE> 56
AFFIDAVIT OF NON-FOREIGN STATUS
To inform Arden Realty Limited Partnership, a Maryland limited
partnership ("Transferee"), that withholding of tax under Section 1445 of the
Internal Revenue Code of 1986, as amended ("Code") will not be required upon the
transfer of certain real property to the Transferee by Activity Business
Associates, LLC, a California limited liability company ("Transferor"), the
undersigned hereby certifies the following on behalf of Transferor:
1 . The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and the
Income Tax Regulations promulgated thereunder).
2. The Transferor's employer identification number/social security
number is__________________________.
3. The Transferor's office/personal residence address is
__________________________.
The Transferor understands that this Affidavit may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
The Transferor understands that the Transferee is relying on this
Affidavit in determining whether withholding is required upon said transfer.
Under penalty of perjury I declare that I have examined this Affidavit
and it is true, correct and complete, and I further declare that I have
authority to sign this document on behalf of the Transferor.
Date:_____________________, 199__
TRANSFEROR:
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:___________________________________
William G. Bloodgood
Its: Vice President
Exhibit J
<PAGE> 57
RECORDING REQUESTED BY )
AND WHEN RECORDED RETURN TO: )
Christensen, Miller, Fink, Jacobs, )
Glaser, Weil & Shapiro, LLP )
2121 Avenue of the Stars )
18th Floor )
Los Angeles, California 90067 )
Attn: Peter M. Weil, Esq. )
__________ Space Above This Line For Recorder's Use ___________
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (this "Memorandum") is made and entered
into as of this __ day of September, 1997, by and between Activity Business
Associates, LLC, a California limited liability company ("Seller"), and Arden
Realty Limited Partnership, a Maryland limited partnership ("Buyer"), with
reference to the following facts.
A. Seller is the owner of that certain real property (the "Property")
more particularly described in Exhibit A, which is attached hereto and
incorporated by reference herein.
B. Buyer desires to purchase from Seller and Seller desires to sell to
Buyer the Property on the terms set forth in that certain Agreement of Purchase
and Sale and Joint Escrow Instructions (the "Purchase Agreement") of even date
herewith, by and between Seller and Buyer.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual
agreements herein set forth, and other valuable consideration, receipt of which
is hereby acknowledged, Owner and Optionee agree as follows:
1. Seller hereby agrees to sell, and Buyer agrees to purchase the
Property in accordance with the terms and conditions set forth in the Purchase
Agreement.
2. The Purchase Agreement is incorporated by reference herein, and, in
the event of any conflicts or inconsistencies between the terms and provisions
of this Memorandum and the terms and provisions of the Purchase Agreement, the
terms and provisions of the Option Agreement shall control, it being understood
and agreed by
Exhibit K
<PAGE> 58
Owner and Optionee that the sole purpose of this Memorandum of Option is to
provide notice of the Option Agreement and that this Memorandum of Option shall
not alter, modify, restrict, limit or otherwise affect any of the terms and
provisions of the Option Agreement or any of the rights or obligations created
therein.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as
of the date first above written.
Seller: ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:___________________________________
William G. Bloodgood
Its: Vice President
Buyer: Arden Realty Limited Partnership,
a Maryland limited partnership
By:___________________________________
Its:_______________________________
<PAGE> 59
AUDIT LETTER
Ernst & Young, LLP
2049 Century Park East
Suite 1700
Los Angeles, California 90067
Attention: Peter Zofrea
Dear Sir:
We are writing at your request to confirm our understanding that your
audit of the statement of operating income for the year ended
_________________, 1996, was made for the purpose of expressing an opinion as
to whether the statement of operating income presents fairly, in all material
respects, the results of operations of [Name of Project] in conformity with
generally accepted accounting principles. These representations are made
exclusively to [Auditor] and not to the buyer of the Project or to any third
party. In connection with your ______________________, 199_ audit we confirm,
to the best of our knowledge and belief, with respect to our daily operations
and without independent investigation or inquiry, the following representations
made during your audit:
A. We have made available to you all financial records and
related data concerning this Project, which are in our possession.
B. We are not aware of any:
1. Irregularities involving any member of management or
employees that could have a materially adverse effect on the statement of
operating income.
2. Notices of violations of laws or regulations, the
effect of which should be considered for disclosure in the financial statements
or as a basis for recording a loss contingency.
3. Material liabilities, gain or loss contingencies or
other transactions (including oral and written guarantees) that are required to
be but have not been accrued or disclosed.
4. Material events that have occurred subsequent to
___________________, 199_ that would require material adjustment to the
statement of operating income.
Exhibit L
<PAGE> 60
Ernst & Young, LLP
______________ ___, 199_
Page 22
C. The Company has complied with all material aspects of
contractual agreements relating to the Project (e.g., management contracts)
that would have a material effect on the statement of operating income in the
event of noncompliance.
D. All significant payments to affiliated companies of the
undersigned have been property recorded or disclosed in the financial
statements.
By:________________________
<PAGE> 61
EXHIBIT A
DESCRIPTION OF PROPERTY
The Property is situated in the County of San Diego, State of California and is
described as follows:
PARCEL 1 OF PARCEL MAP NO. 13528, CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY.
A.P.N.: 341-220-38-00
EXHIBIT A
<PAGE> 1
EXHIBIT 10.3
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(this "First Amendment") is made and entered into as of this 15th
day of October, 1997, by and between Activity Business Associates, LLC, a
California limited liability company ("Seller"), and Arden Realty Limited
Partnership, a Maryland limited partnership ("Buyer"), with reference to the
following facts and circumstances:
A. Seller and Buyer have heretofore entered into that certain Agreement
of Purchase and Sale and Joint Escrow Instructions dated as of October 8, 1997
(the "Purchase Agreement").
B. Seller and Buyer desire to modify the Purchase Agreement as
hereinafter provided.
C. All capitalized terms not otherwise defined herein shall have the
meaning afforded such term in the Purchase Agreement.
NOW, THEREFORE, IN CONSIDERATION of the foregoing, and other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. That portion of Section 7.1, which reads as follows:
"January 6, 1998"
is hereby deleted in its entirety and the following is hereby substituted in
lieu thereof:
"November 20, 1997."
2. No other Amendments. Except as expressly set forth in this First
Amendment, the Purchase Agreement shall remain unmodified and in full force and
effect.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment as of the date first above written.
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 & COO
--------------------------------
SELLER: Activity Business Associates, LLC,
a California limited liability company
By: /s/ William G. Bloodgood
----------------------------------
William G. Bloodgood
Its: Vice President
2
<PAGE> 1
EXHIBIT 10.4
SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
This SECOND AMENDMENT TO AGREEMENT OR PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS (this "Second Amendment") is made and entered into as of this 19th
day of November, 1997, by and between Activity Business Associates, LLC, a
California limited liability company ("Seller") and Arden Realty Limited
Partnership, a Maryland limited partnership ("Buyer"), with reference to the
following facts and circumstances:
A. Seller and Buyer have heretofore entered into that certain Agreement
of Purchase and Sale and Joint Escrow Instructions dated as of October 8, 1997
(the "Purchase Agreement").
B. Seller and Buyer have heretofore amended the Purchase Agreement by
entering into that certain First Amendment to Agreement or Purchase and Sale and
Joint Escrow Instructions dated as of October 15, 1997 ("First Amendment"). The
Purchase Agreement as amended by the First Amendment is hereinafter referred to
as the "Amended Purchase Agreement".
C. All capitalized terms not otherwise defined herein shall have the
meaning afforded such term in the Amended Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. UNITS. Seller has informed Buyer that Seller will not be exercising
any rights under Section 2.4 of the Amended Purchase Agreement to receive Units.
2. CONTINGENCY PERIOD. The Contingency Period referenced in Article 5 of
the Amended Purchase Agreement has ended and Buyer has approved of (i) title as
set forth in Buyer's approval letter dated October, 1997, (ii) all other matters
pertaining to the Property and (iii) the documents evidencing the Existing Loan
and the assumption thereof. Buyer is willing to cause the formation of a newly
formed, single purpose entity (the "New Borrower") whose only business
operations will involve the ownership of the Property, which new entity will
assume the Existing Loan. Buyer is further willing to guaranty the Existing Loan
and provide an environmental indemnity on behalf of the new, single purpose
entity in the form of the existing guaranty and environmental indemnity
documents. Nevertheless, it shall remain a condition of the Closing that said
lender under the Existing
<PAGE> 2
Loan approve and consent to the assumption of the Existing Loan pursuant to
assumption documents reasonably acceptable to Buyer, and without imposing
additional obligations upon any party related to Buyer other than Buyer or the
New Borrower, and without imposing obligations upon Buyer or New Borrower which
are beyond those obligations set forth in documents evidencing the Existing
Loan.
3. CLOSING. Section 7.1 of the Amended Purchase Agreement is amended to
provide that the Closing Date shall be Tuesday, January 6, 1998, and not earlier
or later.
4. NO OTHER AMENDMENTS. Except as expressly set forth in this Second
Amendment, the Amended Purchase Agreement shall remain unmodified and in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
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
-----------------
SELLER: Activity Business Associates,
LLC, a California limited
liability company
By:
--------------------------------
William G. Bloodgood,
its Vice President
-2-
<PAGE> 3
Loan approve and consent to the assumption of the Existing Loan pursuant to
assumption documents reasonably acceptable to Buyer, and without imposing
additional obligations upon any party related to Buyer other than Buyer or the
New Borrower, and without imposing obligations upon Buyer or New Borrower which
are beyond those obligations set forth in documents evidencing the Existing
Loan.
3. CLOSING. Section 7.1 of the Amended Purchase Agreement is amended to
provide that the Closing Date shall be Tuesday, January 6, 1998, and not earlier
or later.
4. NO OTHER AMENDMENTS. Except as expressly set forth in this Second
Amendment, the Amended Purchase Agreement shall remain unmodified and in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first above written.
BUYER: Arden Realty Limited Partnership
a Maryland limited partnership
By: Arden Realty, Inc.
a Maryland corporation
Its: General Partner
By:
--------------------------
Its:
SELLER: Activity Business Associates,
LLC, a California limited
liability company
By: /s/ William G. Bloodgood
--------------------------------
William G. Bloodgood,
its Vice President
-2-
<PAGE> 1
EXHIBIT 10.5
REFERENCE: Document No. 1996-0219444
THE ORIGINAL OF THIS DOCUMENT
WAS RECORDED ON JAN 07, 1998
DOCUMENT NUMBER 1998-0007393
GREGORY J. SMITH, COUNTY RECORDER
SAN DIEGO COUNTY RECORDER'S OFFICE
TIME :3:19 PM
This instrument prepared by
and when recorded return to:
John F. Woodham, Esq.
Long Aldridge & Norman LLP
One Peachtree Center, Suite 5300
303 Peachtree Street
Atlanta, Georgia 30308
- --------------------------------------------------------------------------------
(Space Above for Recorder's Use Only)
ASSUMPTION AGREEMENT
LOAN NO. 30-0540284
This ASSUMPTION AGREEMENT (this "Agreement") is made as of this 6th day
of January, 1998, by and among LASALLE NATIONAL BANK, AS TRUSTEE for Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1996-WF1 ("Lender"), ACTIVITY BUSINESS ASSOCIATES, LLC, a California limited
liability company ("Borrower"), ACTIVITY BUSINESS CENTER, L.P., a Delaware
limited partnership ("Purchaser"), WILLIAM G. BLOODGOOD ("WGB"), DAVID P.
MILESKI ("DPM"), RUSSELL A. RIES ("RAR"; and WGB, DPM and RAR are herein
referred to collectively as "Guarantor") and ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("New Guarantor").
W I T N E S S E T H :
WHEREAS, on or about April 30, 1996, Wells Fargo Bank, National
Association ("Original Lender") made a loan (the "Loan") to Borrower in the
original principal amount of Eight Million Four Hundred Thousand and No/100
Dollars ($8,400,000.00); and
WHEREAS, Borrower executed and delivered to Original Lender that certain
Promissory Note Secured by Deed of Trust (the "Note") dated April 30, 1996,
payable to the order of Original Lender in the amount of and evidencing the
Loan; and
WHEREAS, Borrower executed and delivered for the benefit of Original
Lender that certain Deed of Trust and Assignment of Rents and Leases and
Security Agreement (and Fixture Filing) (the "Deed of Trust") dated as of even
date with the Note, recorded in the Official Records of the San Diego County
Recorder's Office, San Diego, California as Document No. 1996-0219444, covering
the real property described in Exhibit A attached hereto and incorporated herein
for all purposes, together with all improvements, appurtenances, other
properties (whether real or personal), rights and interests described in and
encumbered by the Deed of Trust (collectively, the "Property"), to secure the
payment of the Note and performance by Borrower of the other obligations set
forth in the Loan Documents (as herein defined); and
WHEREAS, Borrower caused each Guarantor to execute and deliver to
Original Lender (i) a certain Guaranty (each individually a "Guaranty," and
collectively the "Guaranties"), and (ii) a certain Hazardous
<PAGE> 2
Materials Indemnity Agreement (Unsecured) (each individually an "Environmental
Indemnity", and collectively the "Environmental Indemnities"), each such
Guaranty and Environmental Indemnity dated of even date with the Note; and
WHEREAS, on or about October 30, 1996, Original Lender transferred and
assigned to Lender the Loan and all of Original Lender's right, title and
interest in, to and under the Note, the Deed of Trust, the Guaranties, the
Environmental Indemnities and all other documents executed by Borrower or third
parties pertaining to, evidencing or securing the Loan (collectively, the "Loan
Documents"); and
WHEREAS, Lender has been asked to consent to the transfer of the
Property to Purchaser and the assumption by Purchaser of the obligations of
Borrower under the Loan and the Loan Documents; and
WHEREAS, Lender has agreed to consent to the transfer of the Property
and the assumption of the Loan, on and subject to the terms and conditions set
forth in this Agreement and in those certain other documents described on
Exhibit "B" attached hereto and made a part hereof (this Agreement and such
other documents being referred to herein collectively as the "Assumption
Documents");
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby covenant and agree as follows:
1. Assumption of Obligations. Purchaser agrees to ASSUME AND DOES HEREBY
ASSUME and covenant and agree to timely perform all of the payment and
performance obligations of Borrower set forth in the Note, the Deed of Trust and
the other Loan Documents in accordance with their respective terms and
conditions, including without limitation, the obligation of payment of all sums
due under the Note. Purchaser further agrees to abide by and be bound by all of
the terms of the Loan Documents, all as though each of the Loan Documents had
been made, executed and delivered by Purchaser.
2. Consent to Transfer. Lender hereby consents to (i) the transfer of
the Property to Purchaser, subject to the Loan and the Loan Documents and
without release of any collateral for the Loan, and (ii) the assumption by
Purchaser of all of the obligations of Borrower under the Loan Documents, all on
and subject to the terms and conditions set forth in this Agreement and the
other Assumption Documents. Lender's consent to the transfer of the Property to
Purchaser and the assumption of the Loan by Purchaser is not intended to be and
shall not be construed as a consent to any subsequent transfer or conveyance or
assumption which requires Lender's consent pursuant to the terms of the Note or
any of the other Loan Documents.
3. Acknowledgments, Warranties and Representations of Borrower Parties.
As a material inducement to Lender to enter into this Agreement, to consent to
the sale, conveyance and transfer of the Property, and to consent to the
assumption of the Loan, Borrower, Guarantor, Purchaser and New Guarantor
(collectively, the "Borrower Parties") hereby acknowledge, represent, warrant
and agree to and with Lender, as follows:
(a) Indebtedness. That, as of the date of this Agreement: (a) the
unpaid principal balance of the Note is $8,243,943.48; (b) the interest rate
presently in effect under the Note is 8.85% per annum; (c) interest has accrued
and remains unpaid under the Note for the month of December, 1997
2
<PAGE> 3
through the date of this Agreement; and (d) the next monthly payment of interest
under the Note becomes due on February 1, 1997. Lender acknowledges that the
foregoing information regarding the unpaid principal amount of the Note, the
interest rate presently in effect under the Note and the date of the next
monthly payment of interest under the Note is correct.
(b) Loan Documents. That the Loan Documents, as they have heretofore
existed and as assumed by Purchaser hereunder, constitute valid and legally
binding obligations of Borrower and Purchaser and, from and after the date of
this Agreement, are enforceable against the Borrower Parties and against the
Property in accordance with their terms.
(c) Transfer of Property. That contemporaneously with the execution
and delivery of this Agreement, Borrower has sold, conveyed and transferred to
Purchaser all of Borrower's right, title and interest in and to the Property,
pursuant to the "Transfer Documents" listed on Exhibit "C" attached hereto and
incorporated herein (the "Transfer Documents"). The Borrower Parties, jointly
and severally, warrant and represent to Lender that, except for the Transfer
Documents, none of the Borrower Parties has entered into, executed or delivered,
and none of them will enter into, execute or deliver, any contracts, agreements
or other documents or instruments with any of the other Borrower Parties (or
with any affiliates of the other Borrower Parties) regarding the sale,
conveyance or transfer of the Property to Purchaser, or otherwise regarding any
interest of either Borrower or Purchaser in the Property. The Borrower Parties
further acknowledge and agree that Lender's consent to the assumption of the
Loan by Purchaser hereunder shall constitute the one-time consent of Lender to
an assignment and assumption of the Loan and the Loan Documents as described in
Section 8 of the Note.
(d) Further Assurances. That each of the Borrower Parties shall
execute and deliver to Lender such agreements, instruments, documents, financing
statements and other writings as may be requested from time to time by Lender to
perfect or maintain the perfection of Lender's security interest in and to the
Property, and to consummate the transactions contemplated by or in this
Agreement and the Loan Documents.
(f) Periodic Impounds. That Lender has heretofore required Borrower
to make monthly payments to Lender for a tax impound (the "Tax Impound") and an
insurance impound (the "Insurance Impound") in accordance with the terms of the
Note, and that as of the date of this Agreement, the Tax Impound has a balance
of $27,983.01, and the Insurance Impound has a balance of $18,682.68. Lender
acknowledges that Borrower has transferred and conveyed all of Borrower's right,
title and interest in the Tax Impound and the Insurance Impound to Purchaser,
and Purchaser affirms Purchaser's obligation hereafter to make monthly payments
to Lender to fund the Tax Impound and the Insurance Impound in amounts
determined from time to time by Lender in accordance with the terms of the Note
and the other Loan Documents. Lender further acknowledges that the foregoing
information regarding the respective balances of the Tax Impound and the
Insurance Impound is correct.
4. Acknowledgments, Warranties and Representations of Borrower. As a
material inducement to Lender to enter into this Agreement, to consent to the
sale, conveyance and transfer of the Property, and to consent to the assumption
of the Loan, Borrower hereby acknowledges, represents, warrants and agrees to
and with Lender, as follows:
(a) Rent Roll. That the Rent Roll delivered by Borrower to Purchaser
and Lender contemporaneously herewith, which has been initialed by
representatives of Borrower, Purchaser and Lender as of the date of this
Agreement, is a true, complete and accurate summary of all tenant leases
affecting the
3
<PAGE> 4
Property as of the date of this Agreement.
(b) Title to Property and Legal Proceedings. That there are no
pending or threatened suits, judgments, arbitration proceedings, administrative
claims, executions or other legal or equitable actions or proceedings against
Borrower or the Property, or any pending or threatened condemnation proceedings
or annexation proceedings affecting the Property, or any agreements to convey
any portion of the Property, or any rights thereto to any person or entity not
disclosed in this Agreement, including, without limitation, any government or
governmental agency.
(c) Compliance with Laws. That Borrower has not received any written
notice from any governmental entity claiming that Borrower or the Property is
not presently in compliance with any laws, ordinances, rules and regulations
bearing upon the use and operation of the Property, including specifically, but
without limitation, any such notice relating to zoning laws or building codes or
regulations.
5. No Impairment of Lien. Nothing set forth herein shall affect the
priority or extent of the lien of any of the Loan Documents nor release or
change the liability of any party who may now be or after the date of this
Agreement, become liable, primarily or secondarily, under the Loan Documents.
The Note, the Deed of Trust and the other Loan Documents shall remain in full
force and effect and this Agreement shall have no effect on the priority or
validity of the liens set forth in the Deed of Trust or the other Loan
Documents, which are incorporated herein by reference.
6. Purchaser Obligations. From and after the date of this Agreement, any
documents, actions or responsibility which are required to be undertaken by
Borrower shall be deemed to be a responsibility of Purchaser. For example, but
without limitation, Purchaser is now required to provide financial statements
and information with respect to itself in lieu of the provision of financial
information by Borrower as to Borrower. Additionally, circumstances in the Loan
Documents which would or could create a "Default" (as defined in the Deed of
Trust) and which are relative to the nature or condition of Borrower shall now
be deemed effective as to the nature or condition of Purchaser (e.g.,
dissolution or bankruptcy of Purchaser shall now constitute a default rather
than dissolution or bankruptcy of Borrower).
7. Acknowledgments, Warranties and Representations of Purchaser. As an
inducement to Lender to enter into this Agreement and to consent to the
conveyance of the Property to Purchaser and the assumption of the Loan by
Purchaser, Purchaser hereby acknowledges, represents, warrants and agrees to and
with Lender as follows:
(a) Bankruptcy. That, in the event Purchaser or the Property, or any
portion thereof, shall be or become the subject of any bankruptcy
proceeding or the property of any bankruptcy estate, Lender shall be
entitled to obtain upon ex parte application therefor, and without
further notice or action of any kind or nature whatsoever, (i) an order
from the Bankruptcy Court prohibiting the use of Lender's "cash
collateral" as such term is defined in Section 363 of the United States
Bankruptcy Code, Title 11, U.S.C.A. (the "Bankruptcy Code") in
connection with the Loan, and (ii) an order from the Bankruptcy Court
granting immediate relief from the automatic stay pursuant to Section
362 of the Bankruptcy Code so as to permit Lender to exercise all of its
rights and remedies pursuant to this Agreement and the other Assumption
Documents, the Loan Documents, and at law and in equity. Purchaser
further covenants not to directly or indirectly oppose or otherwise
defend against Lender's effort to obtain relief from the stay and
covenants and agrees that Lender shall be entitled to the lifting of the
stay without the necessity of an evidentiary hearing and without the
4
<PAGE> 5
necessity or requirement that Lender establish or prove the value of the
Property, the lack of adequate protection of Lender's interest in the
Property, the lack of any reasonable prospect of reorganization with
respect either to Purchaser or the Property, or Purchaser's lack of
equity in the Property.
(b) No Obligation of Lender. That (i) Lender has made no
representation or statement of any kind to Purchaser concerning the
Property, the Loan or the Loan Documents (except as specifically set
forth in Subparagraphs 3(a), 3(e) and 3(f) hereof concerning,
respectively, the unpaid principal balance of the Note, the interest
rate presently in effect under the Note, the date of the next monthly
payment of interest under the Note and the current balance of the
Initial Impound, the Tax Impound and the Insurance Impound); (ii)
Purchaser has heretofore obtained all information desired by Purchaser
concerning the Property, the Loan and the Loan Documents; (iii)
Purchaser draws no inference from Lender's silence concerning the
Property, the Loan and the Loan Documents; and (iv) Lender has no duty
or obligation whatsoever to provide information or advice to Purchaser
concerning the Property, the Loan or the Loan Documents.
8. No Waiver of Remedies. Nothing contained in this Agreement shall
prejudice, act as, or be deemed to be a waiver of any right or remedy available
to Lender by reason of the occurrence or existence of any fact, circumstance or
event constituting a default under the Note or the other Loan Documents.
9. Ratification and Reaffirmation. By their execution hereof, Borrower
and Guarantor ratify and confirm that the assumption by Purchaser of all of
Borrower's obligations set forth in the Note, the Deed of Trust and the other
Loan Documents shall not relieve Borrower or Guarantor of any personal liability
under any of the Loan Documents for any acts or events occurring or obligations
arising prior to or simultaneously with the date hereof. Borrower hereby
reaffirms, affirms and confirms the truth and accuracy of all representations
and warranties set forth in the Loan Documents as if made on the date hereof.
Borrower and Guarantor further expressly acknowledge and agree that nothing
contained in this Agreement or the other Assumption Documents (including
specifically but without limitation Purchaser's assumption of the obligations of
Borrower under the Loan Documents) shall release Borrower or Guarantor from
Borrower's and Guarantor's obligations, duties, liabilities, covenants and
undertakings in and under the Loan Documents. Specifically, but without
limitation of the foregoing, Guarantor hereby reaffirms Guarantor's obligations,
duties, liabilities, covenants and undertakings in and under the Guaranties and
the Environmental Indemnities.
10. Release of Lender. The Borrower Parties, jointly and severally, for
themselves and their respective successors and assigns, do hereby remise,
release, acquit, waive, satisfy and forever discharge Lender and any and all of
Lender's predecessors in interest (including, without limitation, Original
Lender), affiliates and subsidiaries, and all of their past, present and future
officers, directors, contractors, employees, agents, servicers (including, but
not limited to, Wells Fargo Bank, National Association and Lennar Partners,
Inc.), attorneys, representatives, participants, successors and assigns
(collectively, the "Lender Parties") from any and all manner of debts,
accountings, bonds, warranties, representations, covenants, promises, contracts,
controversies, agreements, liabilities, obligations, expenses, damages,
judgments, executions, objections, defenses, setoffs, actions, claims, demands
and causes of action of any nature whatsoever, whether at law or in equity,
whether known or unknown, either now accrued or hereafter maturing, which any of
the Borrower Parties now has or hereafter can, shall or may have by reason of
any matter, cause or thing, from the beginning of the world to and including the
date of this Agreement, arising out of or relating to the Loan, the Loan
Documents or the indebtedness evidenced and secured thereby, the Property or the
development, financing and operation thereof; and the Borrower Parties, for
themselves and their respective successors and assigns, hereby covenant and
agree never to institute or cause to be instituted or continue prosecution of
any
5
<PAGE> 6
suit or other form of action or proceeding of any kind or nature whatsoever
against any of the Lender Parties by reason of or in connection with any of the
foregoing matters, claims or causes of action.
11. Notices. Any notices or other communications required or permitted
under this Agreement or the Loan Documents shall be provided in accordance with
the requirements therefor as set forth in the Loan Documents; provided, however,
from and after the date hereof the addresses of Lender; Purchaser and New
Guarantor shall, subject to change as provided in the Loan Documents, be as
follows:
Lender: LaSalle National Bank, as Trustee (MSMI 1996-WF1)
135 S. LaSalle Street
Suite 1740
Chicago, Illinois 60674
Loan No. 30-0540284
With a copy to: Long Aldridge & Norman LLP
303 Peachtree Street
SunTrust Plaza
Suite 5300
Atlanta, Georgia 30308
Attn: John F. Woodham, Esq.
FAX: (404) 527-4198
Purchaser: c/o Arden Realty, Inc.
9100 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212
Attn: Briggita B. Troy, Esq.
New Guarantor: c/o Arden Realty, Inc.
9100 Wilshire Boulevard, Suite 700
Beverly Hills, California 90212
Attn: Briggita B. Troy, Esq.
12. Costs and Expenses; Assumption Fee. Contemporaneously with the
execution and delivery hereof, Purchaser and Borrower shall pay, or cause to be
paid, all costs and expenses incident to the preparation, execution and
recordation of this Agreement and the consummation of the transaction
contemplated hereby, including, but not limited to, reasonable fees and expenses
of legal counsel to Lender. In addition, contemporaneously with the execution
and delivery hereof, Purchaser and Borrower shall pay to Lender an assumption
fee pursuant to Section 8 of the Note, which fee shall not be applied against
any indebtedness or other amounts outstanding under the Loan Documents.
13. Additional Documentation. From time to time, the Borrower Parties
shall execute or procure and deliver to Lender such other and further documents
and instruments evidencing, securing or pertaining to the Loan or the Loan
Documents as shall be reasonably requested by Lender so as to evidence or effect
the terms and provisions hereof. Upon Lender's request, Purchaser shall cause to
be delivered to Lender an opinion of counsel, satisfactory to Lender as to form,
substance and rendering attorney, opining to (i) the validity and enforceability
of this Agreement and the other Assumption Documents and the terms and
6
<PAGE> 7
provisions hereof and thereof, and any other agreement executed in connection
with the transaction contemplated hereby; (ii) the authority of Purchaser, and
any constituents of Purchaser, to execute, deliver and perform its or their
respective obligations under the Loan Documents, as hereby modified; and
(iii) such other matters as reasonably requested by Lender.
14. References in Loan Documents. Borrower and Lender acknowledge,
covenant and agree that this Agreement and the other Assumption Documents shall
constitute additional Loan Documents, and that any and all references in any of
the Loan Documents to the Loan, the amount constituting the Loan, the Loan
Documents, any other defined terms, or to any of the other Loan Documents shall
be deemed, from and after the date hereof, to the extent necessary, to include
this Agreement and the other Assumption Documents. A default or event of default
under this Agreement or any of the other Assumption Documents shall constitute a
"Default" under the Note, the Deed of Trust and each of the other Loan
Documents.
15. GOVERNING LAW. THE TERMS AND PROVISIONS HEREOF SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN.
16. Time. Time is of the essence in the performance of the covenants
contained herein and in the Loan Documents.
17. Binding Agreement. This Agreement shall be binding upon the
successors and assigns of the parties hereto; provided, however, the provisions
of this Paragraph 17 shall not be deemed or construed to (i) permit, sanction,
authorize or condone the assignment of all or any part of the Property or any of
Purchaser's rights, titles or interests in and to the Property, except as
expressly authorized in the Loan Documents; or (ii) confer any right, title,
benefit, cause of action or remedy upon any person or entity not a party hereto,
which such party would not or did not otherwise possess.
18. Headings. The section headings hereof are inserted for convenience
of reference only and shall in no way alter, amend, define or be used in the
construction or interpretation of the text of such section.
19. Construction. Whenever the context hereof so requires, reference to
the singular shall include the plural and likewise, the plural shall include the
singular; words denoting gender shall be construed to mean the masculine,
feminine or neuter, as appropriate; and specific enumeration shall not exclude
the general, but shall be construed as cumulative of the general recitation.
20. Severability. If any clause or provision of this Agreement is or
should ever be held to be illegal, invalid or unenforceable under any present or
future law applicable to the terms hereof, then and in that event, it is the
intention of the parties hereto that the remainder of this Agreement shall not
be affected thereby, and that in lieu of each such clause or provision of this
Agreement that is illegal, invalid or unenforceable, such clause or provision
shall be judicially construed and interpreted to be as similar in substance and
content to such illegal, invalid or unenforceable clause or provision, as the
context thereof would reasonably suggest, so as to thereafter be legal, valid
and enforceable.
21. Counterparts. To facilitate execution, this Agreement may be
executed in as many counterparts as may be convenient or required. It shall not
be necessary that the signature and acknowledgment of, or on behalf of, each
party, or that the signature and acknowledgment of all persons required to bind
any party, appear on each counterpart. All counterparts shall collectively
constitute a single
7
<PAGE> 8
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than a single counterpart containing the respective
signatures and acknowledgment of, or on behalf of, each of the parties hereto.
Any signature and acknowledgment page to any counterpart may be detached from
such counterpart without impairing the legal effect of the signatures and
acknowledgments thereon and thereafter attached to another counterpart identical
thereto except having attached to it additional signature and acknowledgment
pages.
22. ENTIRE AGREEMENT. THIS AGREEMENT (TOGETHER WITH THE OTHER ASSUMPTION
DOCUMENTS) AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND THERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED OR
VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OF THE PARTIES HERETO OR THERETO. THERE ARE NO ORAL AGREEMENTS AMONG
THE PARTIES HERETO OR THERETO. THE PROVISIONS OF THIS AGREEMENT (AND THE OTHER
ASSUMPTION DOCUMENTS) AND THE OTHER LOAN DOCUMENTS MAY BE AMENDED OR WAIVED ONLY
BY AN INSTRUMENT IN WRITING SIGNED BY THE RESPECTIVE PARTIES TO SUCH DOCUMENTS.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
8
<PAGE> 9
EXECUTED to be effective as of the date first above written.
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By: /s/ Ronald E. Schrager
---------------------------------
Name: Ronald E. Schrager
Title: Vice President
(CORPORATE SEAL)
BORROWER:
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
---------------------------------- (SEAL)
Russell A. Ries, President
PURCHASER:
ACTIVITY BUSINESS CENTER, L.P., a Delaware
limited partnership, as General Partner
By: Arden Realty Finance II, Inc., a Maryland
corporation
By:
-------------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
9
<PAGE> 10
ALL-PURPOSE ACKNOWLEDGMENT
STATE OF FLORIDA )
COUNTY OF DADE )
On 1/6/98 Before me,
------ -------------------------------------------------------
Date Name and Title of Officer (i.e. Your Name, Notary Public)
personally appeared Ronald E. Schrager, Vice President of Lennar Partners, Inc.,
which company is executing the within instrument as Special Servicer of LASALLE
NATIONAL BANK, AS TRUSTEE for Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1996-WF1, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her authorized capacity, and that by his/her signature on the
instrument the person, or the entities upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
/s/ KATHLEEN ANN BRYANT
- -------------------------
Signature of Notary
OFFICIAL NOTARY SEAL
KATHLEEN ANN BRYANT
COMMISSION NUMBER
CC378485
MY COMMISSION EXP.
JUNE 5, 1998
[SEAL]
<PAGE> 11
EXECUTED to be effective as of the date first above written.
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By:
---------------------------------
Name:
Title:
(CORPORATE SEAL)
BORROWER:
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By: /s/ Russell A. Reis (SEAL)
---------------------------------------
Russell A. Ries, President
PURCHASER:
ACTIVITY BUSINESS CENTER, L.P., a Delaware
limited partnership, as General Partner
By: Arden Realty Finance II, Inc., a Maryland
corporation
By:
-------------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
9
<PAGE> 12
ALL-PURPOSE ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On January 2, 1998 Before me, Clare A. Griffith, Notary Public
--------------- --------------------------------------------
Date Name and Title of Officer
(i.e. Your Name, Notary Public)
personally appeared, Russell A. Ries, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ CLARE A. GRIFFITH
- --------------------------
Signature of Notary
CLARE A GRIFFITH
COMM. #1026194
NOTARY PUBLIC-CALIFORNIA
SAN DIEGO COUNTY
MY COMMISSION EXPIRES
MAY 13, 1998
[SEAL]
<PAGE> 13
GUARANTOR:
(SEAL)
--------------------------------------
William G. Bloodgood
(SEAL)
--------------------------------------
David P. Mileski
/s/ Russell A. Ries (SEAL)
---------------------------------------
Russell A. Ries
NEW GUARANTOR:
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By:
---------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
<PAGE> 14
ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
On January 2, 1998 Before me, Clare A. Griffith, Notary Public
--------------- --------------------------------------------
Date Name and Title of Officer
(i.e. Your Name, Notary Public)
personally appeared Russell A. Ries, President of ACTIVITY BUSINESS ASSOCIATES,
LLC, a California limited liability company, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same in his authorized capacity, and that by his signature on the instrument the
person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ CLARE A. GRIFFITH
- -------------------------
Signature of Notary
CLARE A GRIFFITH
COMM. #1026194
NOTARY PUBLIC-CALIFORNIA
SAN DIEGO COUNTY
MY COMMISSION EXPIRES
MAY 13, 1998
[SEAL]
<PAGE> 15
EXECUTED to be effective as of the date first above written.
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By:
---------------------------------
Name:
Title:
(CORPORATE SEAL)
BORROWER:
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By: (SEAL)
---------------------------------------
Russell A. Ries, President
PURCHASER:
ACTIVITY BUSINESS CENTER, L.P., a Delaware
limited partnership, as General Partner
By: Arden Realty Finance II, Inc., a Maryland
corporation
By: /s/ Diana M. Laing
-------------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
9
<PAGE> 16
GUARANTOR:
(SEAL)
--------------------------------------
William G. Bloodgood
(SEAL)
--------------------------------------
David P. Mileski
(SEAL)
---------------------------------------
Russell A. Ries
NEW GUARANTOR:
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By: /s/ Diana M. Laing
---------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
10
<PAGE> 17
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
County of Los Angeles
On December 30, 1997 before me, Kirsten Damgaard
Date Name and Title of Officer
(e.g., "Jane Doe, Notary Public")
personally appeared Diana M. Laing
Name(s) of Signer(s)
[X] personally known to me -- OR -- [ ] proved to me on the basis of
satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same
[STATE SEAL] in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Kirsten Damgaard
--------------------------
Signature of Notary Public
- --------------------------------OPTIONAL---------------------------------------
Though the information below is not required by law, it may prove valuable to
persons relying on the document and could prevent fraudulent removal and
reattachment of this form to another document.
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Document: Assumption Agreement
Document Date: ------------------------------- Number of Pages: ---------------
Signer(s) Other Than Named Above: ---------------------------------------------
CAPACITY(IES) CLAIMED BY SIGNER(S)
Signer's Name: Diana M. Laing Singer's Name: ------------------------
[ ] Individual [ ] Individual
[ ] Corporate Officer [ ] Corporate Officer
Title(s): --------------------- Title(s): -----------------------
[ ] Partner -- [ ] Limited [ ] General [ ] Partner -- [ ] Limited [ ] General
[ ] Attorney-in-Fact [ ] Attorney-in-Fact
[ ] Trustee [ ] Trustee
[ ] Guardian or Conservator [ ] Guardian or Conservator
[X] Other: Purchaser & New Guarantor [ ] Other: ----------------------------
Signer is Representing: RIGHT Signer is Representing: RIGHT
THUMBPRINT THUMBPRINT
- ------------------------- OF SIGNER ------------------------- OF SIGNER
Top of thumb Top of thumb
- ------------------------- here ------------------------- here
<PAGE> 18
GUARANTOR:
/s/ William G. Bloodgood (SEAL)
--------------------------------------
William G. Bloodgood
/s/ David P. Mileski (SEAL)
--------------------------------------
David P. Mileski
(SEAL)
---------------------------------------
Russell A. Ries
NEW GUARANTOR:
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By:
---------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
10
<PAGE> 19
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of California
---------------
County of Riverside
--------------
On 1/2/98 before me, R. H. Jones, Notary Public,
---------------- -----------------------------
Date
personally appeared William G. Bloodgood
---------------------
Name(s) of Signer(s)
Notary Seal [] Personally known to me - OR - [X] proved
R. H. JONES to me on the basis of satisfactory evidence
Commission # 1162435 to be the person(s) whose name(s) is/are
Notary Public - California subscribed to the within instrument and
Riverside County acknowledged to me that he/she/they executed
My Comm. Expires Nov. 22, 2001 the same in his/her/their authorized
capacity(ies) and, that by his/her/their
signature(s) on the instrument the person(s),
or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
R. H. Jones
------------------------------------------
Signature of Notary Public
- -------------------------------------OPTIONAL-----------------------------------
Though the information below is not required by law, it may prove valuable to
persons relying on the document and could prevent fraudulent removal and
reattachment of this form to another document.
DESCRIPTION of ATTACHED DOCUMENT
Title or Type of document: _____________________________________________________
Document Date: _________________________________ Number of Pages: ___________
Signer(s) Other Than Named Above: _____________________________________________
CAPACITY(ies) CLAIMED by Signer(s)
Signer's Name: _____________________ Signer's Name: _______________________
[] Individual [] Individual
[] Corporate Officer [] Corporate Officer
Title(s): _____________________ Title(s): _____________________
[] Partner - [] Limited - [] General [] Partner - [] Limited - [] General
[] Attorney-in-Fact [] Attorney-in-Fact
[] Trustee [] Trustee
[] Guardian or Conservator [] Guardian or Conservator
[] Other: _______________________ [] Other: _______________________
Signer is Representing: Signer is Representing:
____________________________________ ____________________________________
____________________________________ ____________________________________
Box for Box for
Right Thumbprint Right Thumbprint
of SIGNER of SIGNER
Top of Thumb Top of Thumb
<PAGE> 20
GUARANTOR:
(SEAL)
--------------------------------------
William G. Bloodgood
/s/ David P. Mileski (SEAL)
--------------------------------------
David P. Mileski
(SEAL)
---------------------------------------
Russell A. Ries
NEW GUARANTOR:
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By:
---------------------------------
Name: Diana M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
10
<PAGE> 21
ALL-PURPOSE ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES )
On Jan. 5, 1998 Before me, Jo Lynn M. Osborne, Notary Public
------------ ------------------------------------------------
Date Name and Title of Officer (i.e. Your Name, Notary Public)
personally appeared, David P. Mileski, personally known to me (or proved to me
on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ JO LYNN M. OSBORNE
- ------------------------------
Signature of Notary
JO LYNN M. OSBORNE
COMM. # 1059673
NOTARY PUBLIC - CALIFORNIA
LOS ANGELES COUNTY
MY COMMISSION EXPIRES JUNE 3, 1999
[SEAL]
<PAGE> 22
Exhibit List
Exhibit A - Property Description
Exhibit B - List of Assumption Documents
Exhibit C - List of Transfer Documents
<PAGE> 23
Loan No. 30-0540284
EXHIBIT A
(DESCRIPTION OF PROPERTY)
Exhibit A to Assumption Agreement executed by and among LASALLE NATIONAL BANK,
AS TRUSTEE for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-WF1, ACTIVITY BUSINESS ASSOCIATES, LLC, a California
limited liability company, ACTIVITY BUSINESS CENTER, L.P., a Delaware limited
partnership, WILLIAM G. BLOODGOOD, DAVID P. MILESKI, RUSSELL A. RIES, and ARDEN
REALTY LIMITED PARTNERSHIP.
Description of Property
PARCEL I OF PARCEL MAP NO. 13528, CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY AS
FILE NO. 84-403928 OF OFFICIAL RECORDS.
A.P.N.: 341-220-38-00
<PAGE> 24
EXHIBIT B
LIST OF ASSUMPTION DOCUMENTS
1. This Assumption Agreement
2. Assignment and Subordination of Management Agreement
3. Reaffirmation of Guaranty and Consent of Guarantor by William G.
Bloodgood
4. Reaffirmation of Guaranty and Consent of Guarantor by Russell A. Ries
5. Reaffirmation of Guaranty and Consent of Guarantor by David P. Mileski
6. Reaffirmation of Hazardous Materials Indemnity Agreement and Consent of
Indemnitor by William G. Bloodgood
7. Reaffirmation of Hazardous Materials Indemnity Agreement and Consent of
Indemnitor by Russell A. Ries
8. Reaffirmation of Hazardous Materials Indemnity Agreement and Consent of
Indemnitor by David P. Mileski
9. Guaranty from Arden Realty Limited Partnership
10. Hazardous Materials Indemnity Agreement from Arden Realty Limited
Partnership
11. Certificate of Purchaser Parties
<PAGE> 25
EXHIBIT C
LIST OF TRANSFER DOCUMENTS
1. Agreement of Purchase and Sale and Joint Escrow Instructions dated October
___, 1997, by and between Borrower and Purchaser
2. First Amendment to Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of October 15, 1997, by and between Borrower and
Purchaser
3. Second Amendment of Agreement of Purchase and Sale and Joint Escrow
Instructions dated as of November 19, 1997, by and between Borrower and
Purchaser
4. Grant Deed
5. Assignment of Leases and Security Deposits
6. Bill of Sale
7. Assignment of Service Contracts, Warranties and Guarantees
8. Assignment of Intangible Property
<PAGE> 1
EXHIBIT 10.6
Loan No. 30-0540284
GUARANTY
THIS GUARANTY (this "Guaranty") is made as of January ___, 1998, by ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Guarantor") in
favor of LASALLE NATIONAL BANK, AS TRUSTEE for Morgan Stanley Capital I Inc.,
Commercial Mortgage Pass-Through Certificates, Series 1996-WF1 ("Lender").
RECITALS
A. Wells Fargo Bank, National Association ("Wells Fargo") has heretofore
made a loan to Activity Business Associates, LLC, a California limited liability
company ("ABA") in the principal sum of EIGHT MILLION FOUR HUNDRED THOUSAND AND
NO/100 DOLLARS ($8,400,000.00) (the "Loan").
B. The Loan is evidenced by that certain Promissory Note Secured by Deed
of Trust dated April 30, 1996 (the "Note"), made by ABA to the order of Wells
Fargo in the principal amount of the Loan and is secured by, among other things,
that certain Deed of Trust and Absolute Assignment of Rents and Leases and
Security Agreement (and Fixture Filing) dated as of April 30, 1996, made by ABA
for the benefit of Wells Fargo (the "Deed of Trust"; and the Note, the Deed of
Trust and any and all other documents and instruments executed in connection
with the making of the Loan are herein referred to collectively as the "Original
Loan Documents") on the real property and improvements described in the Deed of
Trust (which real property and improvements are collectively referred to herein
as the "Property").
C. On or about October 30, 1996, Wells Fargo transferred and assigned to
Lender all of Wells Fargo's right, title and interest in, to and under the Loan
and the Original Loan Documents, and Lender is now the owner and holder of the
Loan and the Original Loan Documents.
D. ABA and ACTIVITY BUSINESS CENTER, L.P., a Delaware limited partnership
("Borrower") have requested Lender to consent to (i) a transfer, conveyance and
sale of the Property from ABA to Borrower, and (ii) an assumption by Borrower of
the Loan and the obligations of ABA under the Original Loan Documents.
E. Contemporaneously with the execution and delivery of this Guaranty,
Lender, ABA, Borrower, Guarantor and certain other parties have entered into
that certain Assumption Agreement of even date herewith (the "Assumption
Agreement"), pursuant to which, among other things, (i) Borrower has agreed to
assume and has assumed and has covenanted and agreed to timely perform all of
the payment and performance obligations of ABA set forth in the Note, the Deed
of Trust and the other Original Loan Documents, and (ii) Lender has consented to
Borrower's acquisition of the Property and assumption of the Loan, all on and
subject to the terms and conditions set forth in the Assumption Agreement and
the other "Assumption Documents" (as defined in the Assumption Agreement; this
Guaranty constituting one of the
<PAGE> 2
Assumption Documents; and the Original Loan Documents, the Assumption Agreement
and the other Assumption Documents are referred to herein collectively as the
"Loan Documents").
NOW THEREFORE, to induce Lender to enter into the Assumption Agreement and
to consent to the conveyance of the Property to Borrower and the assumption of
the Loan by Borrower, and in consideration thereof, Guarantor unconditionally
guarantees and agrees as follows:
1. Guaranty. Guarantor hereby unconditionally, absolutely, and
irrevocably guarantees and promises to pay to Lender or order, on demand, in
lawful money of the United States of America, in immediately available funds,
all sums for which Borrower is now or hereafter liable to Lender as a direct or
indirect result of : (a) Borrower's obligations and liabilities under any master
lease, guaranty or indemnity; (b) actual fraud or material misrepresentation;
(c) failure to deliver any insurance or condemnation proceeds or awards received
by Borrower to Lender or to otherwise apply such sums as required under the
terms of the Loan Documents or any other instrument now or hereafter securing
the Note; (d) failure to pay property or other taxes, assessments or charges
which may create liens on any portion of the Property; (e) failure to apply any
rents, royalties, accounts, revenues, income, issues, profits and other benefits
from the Property which are collected or received by Borrower during the period
of any Default (as defined in the Deed of Trust) or after acceleration of the
indebtedness and other sums owing under the Loan Documents to the payment of
either (i) such indebtedness or other sums or (ii) the normal and necessary
operating expenses of the Property; (f) security deposits which are received by
Borrower from tenants of the Property and which are not delivered to Lender
following the foreclosure or other transfer of the Property to Lender or
otherwise applied as required under the terms of the Loan Documents or any other
instrument now or hereafter securing the Loan; (g) the commission by Borrower of
material physical waste of the Property (including the actual authorization by
Borrower of the commission by others of such material physical waste of the
Property), including, without limitation, failure to maintain the Property in a
satisfactory manner as measured by the conduct of professional managers of
similar properties in similar locations; (h) all loss, damage, cost and expense
(including attorneys' fees and expenses) incurred by Lender as a result of or
relating to any material modification, or any termination or cancellation,
without Lender's prior written consent, of any of the leases or other occupancy
agreements in effect at or concerning the Property and assigned to Lender under
the Loan Documents; (i) all loss, damage, cost and expense (including attorneys'
fees and expenses) incurred by Lender as a result of the removal or disposal by
Borrower or its representatives or agents, in violation of the Loan Documents,
of any collateral for the Loan on, at, or affixed to the Property; (j) all loss,
damage, cost and expense (including attorneys' fees and expenses) incurred by
Lender as a result of an uninsured casualty or from a casualty or liability that
is not insured in the amount and to the extent required under the Loan
Documents; or (k) any breach by Borrower of any covenant in the Note or in the
Deed of Trust regarding "Hazardous Materials" (as defined in the Deed of Trust)
or any representation or warranty of Borrower regarding "Hazardous Materials"
proving to have been untrue when made.
2. Remedies. If Guarantor fails to promptly perform its obligations
under this Guaranty, Lender may from time to time, and without first requiring
performance by Borrower or exhausting any or all security for the Loan, bring
any action at law or in equity or both to compel Guarantor to perform its
obligations hereunder, and to collect in any such action compensation for all
loss, cost, damage, injury and expense sustained or incurred by Lender as a
direct or indirect consequence of the failure of Guarantor to perform its
obligations together with interest thereon at the rate of interest applicable to
the principal balance of the Note.
<PAGE> 3
3. Rights of Lender. Guarantor authorizes Lender, without giving
notice to Guarantor or obtaining Guarantor's consent and without affecting the
liability of Guarantor, from time to time to: (a) renew or extend all or any
portion of Borrower's obligations under the Note or any of the other Loan
Documents; (b) declare all sums owing to Lender under the Note and the other
Loan Documents due and payable upon the occurrence of a Default (as defined in
the Deed of Trust) under the Loan Documents; (c) make non-material changes in
the dates specified for payments of any sums payable in periodic installments
under the Note or any of the other Loan Documents; (d) otherwise modify, amend,
supplement or replace from time to time the terms of any of the Loan Documents,
except for (i) increases in the principal amount of the Note or changes in the
terms and conditions by which interest rates, fees or charges are calculated
under the Note and the other Loan Documents (Guarantor acknowledges that if the
Note or other Loan Documents so provide, said interest rates, fees and charges
may vary from time to time) or (ii) advancement of the maturity date of the Note
where no Default (as defined in the Deed of Trust) has occurred under the Loan
Documents; (e) take and hold security for the performance of Borrower's
obligations under the Note or the other Loan Documents and exchange, enforce,
waive and release any such security; (f) apply such security and direct the
order or manner of sale thereof as Lender in its discretion may determine; (g)
release, substitute or add any one or more endorsers of the Note or guarantors
of Borrower's obligations under the Note or the other Loan Documents; (h) apply
payments received by Lender from Borrower to any obligations of Borrower to
Lender, in such order as Lender shall determine in its sole discretion, whether
or not any such obligations are covered by this Guaranty; and (i) assign this
Guaranty in whole or in part.
4. Guarantor's Waivers. Guarantor waives: (a) any defense based upon
any legal disability or other defense of Borrower, any other guarantor or other
person, or by reason of the cessation or limitation of the liability of Borrower
from any cause other than full payment of all sums payable under the Note or any
of the other Loan Documents; (b) any defense based upon any lack of authority of
the officers, directors, partners or agents acting or purporting to act on
behalf of Borrower or any principal of Borrower or any defect in the formation
of Borrower or any principal of Borrower; (c) any defense based upon the
application by Borrower of the proceeds of the Loan for purposes other than the
purposes represented by Borrower to Lender or intended or understood by Lender
or Guarantor; (d) any defense of Guarantor based upon Lender's election of any
remedy against Guarantor or Borrower or both, including, without limitation, the
defense to enforcement of this Guaranty (the so-called "Gradsky" defense based
upon Union Bank v. Gradsky, Cal. App. 2d 40 (1968) or subsequent cases) which,
absent this waiver, Guarantor would have by virtue of an election by Lender to
conduct a non-judicial foreclosure sale of the Property, it being understood by
Guarantor that any such non-judicial foreclosure sale will destroy, by operation
of California Code of Civil Procedure section 580d, all rights of any party to a
deficiency judgment against Borrower, and, as a consequence, will destroy all
rights which Guarantor would otherwise have (including, without limitation, the
right of subrogation, the right of reimbursement, and the right of contribution)
to proceed against Borrower; (e) any defense based upon Lender's failure to
disclose to Guarantor any information concerning Borrower's financial condition
or any other circumstances bearing on Borrower's ability to pay all sums payable
under the Note or any of the other Loan Documents; (f) any defense based upon
any statute or rule of law which provides that the obligation of a surety must
be neither larger in amount nor in any other respects more burdensome than that
of a principal; (g) any defense based upon Lender's election, in any proceeding
instituted under the Federal Bankruptcy Code, of the application of Section
1111(b)(2) of the Federal Bankruptcy Code or any successor statute; (h) any
defense based upon any borrowing or any grant of a security interest under
Section 364 of the Federal Bankruptcy Code; (i) any right or subrogation, any
right to enforce any remedy which Lender may have against Borrower and any right
to participate in, or benefit from, any security for the Note or the other Loan
Documents now or hereafter held by Lender; (j) presentment, demand, protest and
notice of any kind; and (k) the benefit of any statute of limitations affecting
the liability
3
<PAGE> 4
of Guarantor hereunder or the enforcement hereof. Guarantor agrees that the
payment of all sums payable under the Note or any of the other Loan Documents or
any part thereof or other act which tolls any statute of limitations applicable
to the Note or the other Loan Documents shall similarly operate to toll the
statute of limitations applicable to Guarantor's liability hereunder. Without
limiting the generality of the foregoing or any other provision hereof,
Guarantor expressly waives to the extent permitted by law any and all rights and
defenses which might otherwise be available to Guarantor under California Civil
Code Sections 2787 to 2855 inclusive and California Code of Civil Procedure
Sections 580a, 580b, 580d and 726, or any of such sections.
5. Guarantor's Waiver Pursuant to California Civil Code Section
2856. In addition to all other waivers agreed to and made by Guarantor as set
forth in this Guaranty, and pursuant to the provisions of California Civil Code
Section 2856, Guarantor waives all rights and defenses arising out of an
election of remedies by Lender, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed Guarantor's rights of subrogation and reimbursement against
Borrower by the operation of Section 580d of the Code of civil Procedure of
otherwise.
6. Guarantor's Warranties. Guarantor warrants and acknowledges that:
(a) Lender would not consent to Borrower's acquisition of the Property and
assumption of the Loan but for this Guaranty; (b) there are no conditions
precedent to the effectiveness of this Guaranty; (c) Guarantor has established
adequate means of obtaining from sources other than Lender, on a continuing
basis, financial and other information pertaining to Borrower's financial
condition, the Property and Borrower's activities relating thereto and the
status of Borrower's performance of obligations under the Loan Documents, and
Guarantor agrees to keep adequately informed from such means of any facts,
events or circumstances which might in any way affect Guarantor's risks
hereunder and Lender has made no representation to Guarantor as to any such
matters; (d) the most recent financial statements of Guarantor previously
delivered to Lender are true and correct in all respects, have been prepared in
accordance with generally accepted accounting principles consistently applied
(or other principles acceptable to Lender) and fairly present the financial
condition of Guarantor since the respective dates thereof; (e) Guarantor has not
and will not, without the prior consent of Lender, sell, lease, assign encumber,
hypothecate, transfer or otherwise dispose of all or substantially all of
Guarantor's assets, or any interest therein, other than in the ordinary course
of Guarantor's business; and (f) Guarantor shall, not later than ninety (90)
days after the end of each calendar year, provide Lender with year-end financial
statements of such Guarantor, such statements to be prepared in a form and in
accordance with accounting principles acceptable to Lender.
7. Subordination, Guarantor subordinates all present and future
indebtedness owing by Borrower to Guarantor to the obligations at any time owing
by Borrower to Lender under the Note and the other Loan Documents. Guarantor
assigns all such indebtedness to Lender as security for this Guaranty, the Note
and the other Loan Documents. Guarantor agrees to make no claim for such
indebtedness until all obligations of Borrower under the Note and the other Loan
Documents have been fully discharged. Guarantor further agrees not to assign all
or any part of such indebtedness unless Lender is given prior notice and such
assignment is expressly made subject to the terms of this Guaranty. If Lender so
requests, (a) all instruments evidencing such indebtedness shall be duly
endorsed and delivered to Lender, (b) all security for such indebtedness shall
be duly assigned and delivered to Lender, (c) such indebtedness shall be
enforced, collected and held by Guarantor as trustee for Lender and shall be
paid over to Lender on account of the Loan but without reducing or affecting in
any manner the liability of Guarantor under the other provisions of this
Guaranty, and (d) Guarantor shall execute, file and record such documents and
instruments and take such other action as deems necessary or appropriate to
perfect, preserve and enforce Lender's rights in and to such
4
<PAGE> 5
indebtedness and any security therefor. If Guarantor fails to take any such
action, Lender, as attorney-in-fact for Guarantor, is hereby authorized to do so
in the name of Guarantor. The foregoing power of attorney is coupled with an
interest and cannot be revoked.
8. Bankruptcy of Borrower. In any bankruptcy or other proceeding in
which the filing of claims is required by law, Guarantor shall file all claims
which Guarantor may have against Borrower relating to any indebtedness of
Borrower to Guarantor and shall assign to Lender all rights of Guarantor
thereunder. If Guarantor does not file any such claim, Lender, as
attorney-in-fact for Guarantor, is hereby authorized to do so in the name of
Guarantor or, in Lender's discretion, to assign the claim to a nominee and to
cause proof of claim to be filed in the name of Lender's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. Lender or
its nominee shall have the right, in its reasonable discretion, to accept or
reject any plan proposed in such proceeding and to take any other action which a
party filing a claim is entitled to do. In all such cases, whether in
administration, bankruptcy or otherwise, the person or persons authorized to pay
such claim shall pay to Lender the amount payable on such claim and, to the full
extent necessary for that purpose, Guarantor hereby assigns to Lender all of
Guarantor's rights to any such payments or distributions; provided, however,
Guarantor's obligations hereunder shall not be satisfied except to the extent
that Lender receives cash by reason of any such payment or distribution. If
Lender receives anything hereunder other than cash, the same shall be held as
collateral for amounts due under this Guaranty. If all or any portion of the
obligations guarantied hereunder are paid or performed, the obligations of
Guarantor hereunder shall continue and shall remain in full force and effect in
the event that all or any part of such payment or performance is avoided or
recovered directly or indirectly from Lender as a preference, fraudulent
transfer or otherwise under the Bankruptcy Code or other similar laws,
irrespective of (a) any notice of revocation given by Guarantor prior to such
avoidance or recovery, and (b) full payment and performance of all of the
indebtedness and obligations evidenced and secured by the Loan Documents.
9. Disclosure of Information; Participations. Guarantor agrees that
Lender may elect, at any time, to sell, assign, participate or securitize all or
any portion of Lender's rights and obligations under the Loan Documents, and
that any such sale, assignment, participation or securitization may be to one or
more financial institutions or other entities, to private investors, and/or into
the public securities market-place, at Lender's sole discretion. Guarantor
further agrees that Lender may disseminate to any such actual or potential
purchaser(s), assignee(s) or participants(s) all documents and information
(including, without limitation, all financial information) which has been or is
hereafter provided to or known to Lender with respect to: (a) the Property and
its operation; (b) any party connected with the Loan (including, without
limitation, Guarantor, Borrower, any partner of Borrower, any constituent
partner of Borrower, any guarantor and any nonborrower trustor); and/or (c) any
lending relationship other than the Loan which Lender may have with any party
connected with the Loan. In the event of any such sale, assignment,
participation or securitization, Lender and parties to the same shall share in
the rights and obligations of Lender set forth in the Loan Documents as and to
the extent they shall agree among themselves. In connection with any such sale,
assignment, participation, or securitization, Guarantor further agrees that this
Guaranty shall be sufficient evidence of the obligations of Guarantor to each
purchaser, assignee, or participant, and upon request by Lender, Guarantor
shall, within fifteen (15) days after request by Lender, (x) deliver to Lender
and any other party designated by Lender an estoppel certificate verifying for
the benefit of Lender and any other party designated by Lender the status and
the terms and provisions of this Guaranty in form and substance acceptable to
lender, and (y) enter into such amendments or modifications to this Guaranty as
may be reasonably required in order to facilitate any such sale, assignment,
participation or securitization. The indemnity obligations of Guarantor under
this Guaranty shall also apply with respect to any purchaser, assignee or
participant.
5
<PAGE> 6
10. Additional, Independent and Unsecured Obligations. This is a
guaranty of payment and not of collection and the obligations of Guarantor
hereunder shall be in addition to and shall not limit or in any way affect the
obligations of Guarantor under any other existing or future guaranties unless
said other guarantees are expressly modified or revoked in writing. This
Guaranty is independent of the obligations of Borrower under the Note, the Deed
of Trust and the other Loan Documents. Guarantor agrees that nothing contained
in this Guaranty shall prevent Lender from suing to collect on the Note or from
exercising concurrently or successively any rights available to it at law and/or
in equity or under any of the Loan Documents, and that the exercise of any of
the aforesaid rights shall not constitute a legal or equitable discharge of
Guarantor. Guarantor hereby authorizes and empowers Lender to exercise, in its
sole discretion, any rights and remedies, or any combination thereof, which may
then be available, since it is the intent and purpose of Guarantor that the
obligations hereunder shall be absolute, independent and unconditional under any
and all circumstances. Lender may bring a separate action to enforce the
provisions hereof against Guarantor without taking action against Borrower or
any other party or joining Borrower or any other party as a party to such
action. Except as otherwise provided in this Guaranty, this Guaranty is not
secured and shall not be deemed to be secured by any security instrument unless
such security instrument expressly recites that it secures this Guaranty.
11. Attorneys' Fees; Endorsement. If any attorney is engaged by
Lender to enforce or defend any provision of this Guaranty, or any of the other
Loan Documents, or as a consequence of any Default (as defined in the Deed of
Trust) under the Loan Documents, with or without the filing of any legal action
or proceeding, Guarantor shall pay to Lender, immediately upon demand all
attorneys' fees and costs incurred by Lender in connection therewith, together
with interest thereon from the date of such demand until paid at the rate of
interest applicable to the principal balance of the Note as specified therein.
12. Rules of Construction. The word "Borrower" as used herein shall
include both the named Borrower and any other person at any time assuming or
otherwise becoming primarily liable for all or any part of the obligations of
the named Borrower under the Note and the other Loan Documents. The term
"person" as used herein shall include any individual, company, trust or other
legal entity of any kind whatsoever. If this Guaranty is executed by more than
one person, the term "Guarantor" shall include all such persons. When the
context and construction so require, all words used in the singular herein shall
be deemed to have been used in the plural and vice versa. All headings appearing
in this Guaranty are for convenience only and shall be disregarded in construing
this Guaranty.
13. Credit Reports. Each legal entity and individual obligated on
this Guaranty hereby authorized Lender to order and obtain, from a credit
reporting agency of Lender's choice, a third party credit report on such legal
entity and individual.
14. Governing Law. This Guaranty shall be governed by, and construed
in accordance with, the laws of the State of California, except to the extent
preempted by Federal laws. Guarantor and all persons and entities in any manner
obligated to Lender under this Guaranty consent to the jurisdiction of any
Federal or State Court within the State of California having proper venue and
also consent to service of process by any means authorized by California or
Federal law.
15. Miscellaneous. The provisions of this Guaranty will bind and
benefit the heirs, executors, administrators, legal representatives, nominees,
successors and assigns of Guarantor and Lender. The liability of all persons and
entities who are in any manner obligated hereunder shall be joint and several.
6
<PAGE> 7
If any provision of this Guaranty shall be determined by a court of competent
jurisdiction to be invalid, illegal or unenforceable, that portion shall be
deemed severed from this Guaranty and the remaining parts shall remain in full
force as though the invalid, illegal or unenforceable portion had never been
part of this Guaranty.
16. Additional Provisions. Such additional terms, covenants and
conditions as may be set forth on any exhibit executed by Guarantor and attached
hereto which recites that it is an exhibit to this Guaranty are incorporated
herein by this reference.
17. Enforceability. Guarantor hereby acknowledges that: (a) the
obligations undertaken by Guarantor in this Guaranty are complex in nature, and
(b) numerous possible defenses to the enforceability of these obligations may
presently exist and/or may arise hereafter, and (c) as part of Lender's
consideration for entering into this transaction, Lender has specifically
bargained for the waiver and relinquishment by Guarantor of all such defenses,
and (d) Guarantor has had the opportunity to seek and receive legal advice from
skilled legal counsel in the area of financial transactions of the type
contemplated herein. Given all of the above, Guarantor does hereby represent and
confirm to Lender that Guarantor is fully informed regarding, and that Guarantor
does thoroughly understand: (i) the nature of such possible defenses, and (ii)
the circumstances under which such defenses may arise, and (iii) the benefits
which such defenses might confer upon Guarantor, and (iv) the legal consequences
to Guarantor of waiving such defenses. Guarantor acknowledges that Guarantor
makes this Guaranty with the intent that this Guaranty and all of the informed
waivers herein shall each and all be fully enforceable by Lender, and that
Lender is induced to enter into this transaction in material reliance upon the
presumed full enforceability thereof.
18. WAIVER OF JURY TRIAL. LENDER AND GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OR CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF LENDER OR GUARANTOR. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO CONSENT TO BORROWER'S
ACQUISITION OF THE PROPERTY AND ASSUMPTION OF THE LOAN.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
7
<PAGE> 8
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date
appearing on the first page of this Guaranty.
GUARANTOR:
ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By: /s/ Diana M. Laing
--------------------------------
Name: Diane M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
8
<PAGE> 1
EXHIBIT 10.7
Loan No. 30-0540284
HAZARDOUS MATERIALS INDEMNITY AGREEMENT
(Unsecured)
THIS HAZARDOUS MATERIALS INDEMNITY AGREEMENT (this "Indemnity") is given
on January 7, 1998 by ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited
partnership ("Indemnitor") to LASALLE NATIONAL BANK, AS TRUSTEE for Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1996-WF1 ("Lender"), on the basis of the following facts and understandings:
RECITALS
A. Wells Fargo Bank, National Association ("Wells Fargo") has heretofore
made a loan to Activity Business Associates, LLC, a California limited liability
company ("ABA") in the principal sum of EIGHT MILLION FOUR HUNDRED THOUSAND AND
NO/100 DOLLARS ($8,400,000.00) (the "Loan").
B. The Loan is evidenced by that certain Promissory Note Secured by Deed
of Trust dated April 30, 1996 (the "Note"), made by ABA to the order of Wells
Fargo in the principal amount of the Loan and is secured by, among other things,
that certain Deed of Trust and Absolute Assignment of Rents and Leases and
Security Agreement (and Fixture Filing) dated as of April 30, 1996, made by ABA
for the benefit of Wells Fargo (the "Deed of Trust"; and the Note, the Deed of
Trust and any and all other documents and instruments executed in connection
with the making of the Loan are herein referred to collectively as the "Original
Loan Documents") and encumbering the real property described in Exhibit A
attached hereto and incorporated herein by this reference (the "Property").
C. On or about October 30, 1996, Wells Fargo transferred and assigned to
Lender all of Wells Fargo's right, title and interest in, to and under the Loan
and the Original Loan Documents, and Lender is now the owner and holder of the
Loan and the Original Loan Documents.
D. ABA and ACTIVITY BUSINESS CENTER, L.P., a Delaware limited partnership
("Borrower") have requested Lender to consent to (i) a transfer, conveyance and
sale of the Property from ABA to Borrower, and (ii) an assumption by Borrower of
the Loan and the obligations of ABA under the Original Loan Documents.
E. Indemnitor is a limited partner of Borrower, and has a direct financial
interest in the Property and will benefit from Lender consenting to Borrower's
acquisition of the Property and assumption of the Loan and the obligations of
ABA under the Original Loan Documents.
F. Lender is willing to consent to Borrower's acquisition of the Property
and assumption of the Loan and the obligations of ABA under the Original Loan
Documents only on the condition, among others, that Indemnitor defend, indemnify
and hold harmless Lender from and against any and all claims, loss,
<PAGE> 2
damage, cost, expense or liability arising out of the presence of "Hazardous
Materials" (as defined below) on the Property.
G. Contemporaneously with the execution and delivery of this Indemnity,
Lender, ABA, Borrower, Indemnitor and certain other parties have entered into
that certain Assumption Agreement of even date herewith (the "Assumption
Agreement"), pursuant to which, among other things, (i) Borrower has agreed to
assume and has assumed and has covenanted and agreed to timely perform all of
the payment and performance obligations of ABA set forth in the Note, the Deed
of Trust and the other Original Loan Documents, and (ii) Lender has consented to
Borrower's acquisition of the Property and assumption of the Loan, all on and
subject to the terms and conditions set forth in the Assumption Agreement and
the other "Assumption Documents" (as defined in the Assumption Agreement; this
Indemnity constituting one of the Assumption Documents; and the Original Loan
Documents, the Assumption Agreement and the other Assumption Documents are
referred to herein collectively as the "Loan Documents").
H. Since the presence of "Hazardous Materials" on the Property may reduce
the value of the Property to an extent that is unforeseeable and indeterminable
and may, in fact, cause the value of the Property to be substantially less than
the claims against Lender or the liabilities associated with ownership of such
Property, Lender also is willing to consent to Borrower's acquisition of the
Property and assumption of the Loan and the obligations of ABA under the Loan
Documents only on the condition that Indemnitor's indemnity with respect to
hazardous materials be and remain an unsecured personal obligation of
Indemnitor.
I. Notwithstanding that this Indemnity is collectively included in the
term "Loan Documents" as used herein, this Indemnity is not one of the "Loan
Documents" as defined in the Note and therefore is not secured by any of the
documents and instruments securing the Note.
NOW, THEREFORE, in consideration of Lender contemporaneously herewith
consenting to Borrower's acquisition of the Property and assumption of the
obligations of ABA under the Original Loan Documents, and for other good,
valuable and adequate consideration, receipt of which is hereby acknowledged,
Indemnitor agrees as follows:
1. Indemnity. Indemnitor shall defend, indemnify and hold harmless Lender,
any corporation controlled by Lender, and each of their respective directors,
officers, employees, agents, successors and assigns (including, without
limitation, any participants in the Loan) from and against any claim, loss,
damage, cost, expense or liability directly or indirectly arising out of (i) the
use, generation, manufacture, storage, treatment, release, threatened release,
discharge, disposal, transportation or presence of any oil, flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
hazardous wastes, toxic or contaminated substances or similar materials
(collectively "Hazardous Materials"), including, without limitation, any
substances which are "hazardous substances", "hazardous wastes", "hazardous
materials" or "toxic substances" under any present or future state or federal
law, ordinance or regulation, which are found in, on, under or about the
Property; or (ii) the breach of any covenant (or representation and warranty) of
Indemnitor under this Agreement. Such indemnity shall include, without
limitation:
(a) the costs, whether foreseeable or unforeseeable, of any repair,
cleanup or detoxification of the Property which is required by any
governmental entity or is otherwise necessary to render the Property
in compliance with all laws and regulations pertaining to Hazardous
Materials;
-2-
<PAGE> 3
(b) all other direct or indirect consequential damages (including,
without limitation, any third party tort claim or governmental
claims, fines or penalties against Lender, any corporation
controlled by Lender, or any of their respective directors,
officers, employees, agents, successors or assigns); and
(c) all court costs and attorney's fees paid or incurred by Lender, any
corporation controlled by Lender, or any of their respective
directors, officers, employees, agents successors or assigns.
3. Term. The term of the indemnity provided for herein will commence on
the date hereof and continue until such time as no legal action can be
successfully brought against Lender due to applicable statutes of limitation.
Without in any way limiting the above, it is expressly understood that
Indemnitor's duty to indemnify Lender shall survive: (a) any judicial or
non-judicial foreclosure under the Deed of Trust, transfer of the Property in
lieu thereof, or transfer of the Property subject to the Deed of Trust and the
other Loan Documents; (b) the release and reconveyance or cancellation of the
Deed of Trust; and (c) the satisfaction of all of Borrower's obligations under
the Loan Documents.
4. Independent and Unsecured Obligational. Indemnitor acknowledges that,
notwithstanding any other provision of this Indemnity or any of the Loan
Documents to the contrary (including, without limitation, any non-recourse
provision under the Loan Documents) the obligations of Indemnitor under this
Indemnity are unlimited personal obligations of Indemnitor which are not secured
by the Deed of Trust or any other security instrument. In this regard, Lender's
appraisal of the value of the Property is such that Lender is not willing to
accept the consequences, under California's "One Form of Action" Rule (i.e.,
Section 726 of the Code of Civil Procedure), and "Anti-Deficiency Rules" (i.e.,
Sections 580(a), 580(b) and 580(d) of the Code of Civil Procedure), of inclusion
of this Indemnity among the obligations secured by the Deed of Trust. Indemnitor
acknowledges that Lender is unwilling to accept such consequences and that
Lender would not consent to Borrower's acquisition of the Property and
assumption of the Loan and the obligations of ABA under the Original Loan
Documents but for the personal unsecured liability undertaken by Indemnitor.
5. Settlements; Claims; Judgments. Without the prior written consent of
Indemnitor, Lender may settle or compromise any claim with respect to Hazardous
Materials made against Lender and Lender may employ an attorney of Lender's own
selection to defend Lender. Indemnitor shall pay upon demand all of the costs
and expenses of such defense. In addition, and notwithstanding any other
provision of this Agreement, Borrower shall not, without the prior written
consent of Lender: (a) settle or compromise any action, suit, proceeding, or
claim in which Lender is named as a party or consent to the entry of any
judgment in such a matter that does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to Lender of a written release of
Lender (in form, scope and substance satisfactory to Lender in its sole
discretion) from all liability in respect of such action, suit, or proceeding;
or (b) settle or compromise any action, suit, proceeding, or claim in which
Lender is named as a party in any manner that may materially and adversely
affect Lender as determined by Lender in its sole discretion.
6. Interest. Indemnitor shall pay Lender, on demand, interest, at the rate
of one percent (1%) per annum (based on a 360-day year and charged on the basis
of actual days elapsed) in excess of the "Prime Rate" in effect from time to
time, on any costs or expenses incurred by Lender in the enforcement of this
Indemnity or on any sums Lender is obligated to pay in respect to the matters
with respect to which this Indemnity is given, from the date of Lender's demand.
As used herein, the term "Prime Rate" means the
-3-
<PAGE> 4
Prime Rate in effect from time to time as published in the Money Rates section
of the Wall Street Journal. Any change in the rate of interest on such expenses,
costs or sums due to a change in the Prime Rate shall be effective on the date
each such change in the Prime Rate is published in the Wall Street Journal.
7. Rights not Exclusive. The rights of Lender under this Indemnity shall
be in addition to any other rights and remedies of Lender against Indemnitor
under any other document or instrument now or hereafter executed by Indemnitor,
or at law or in equity (including, without limitation, any right of
reimbursement or contribution pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., as heretofore or hereafter amended from time to time).
8. Rights of Lender. Indemnitor authorizes Lender, without giving notice
to Indemnitor or obtaining Indemnitor's consent and without affecting the
liability of Indemnitor, from time to time to: (a) renew or extend all or any
portion of Borrower's obligations under the Note or any of the other Loan
Documents; (b) declare all sums owing to Lender under the Note and the other
Loan Documents due and payable upon the occurrence of a Default under the Loan
Documents; (c) make nonmaterial changes in the dates specified for payments of
any item payable in periodic installments under the Note or any of the other
Loan Documents; (d) otherwise modify the terms of any of the Loan Documents,
except for (i) increases in the principal amount of the Note or changes in the
manner by which interest rates, fees or charges are calculated under the Note
and the other Loan Documents (Indemnitor acknowledges that if the Note or other
Loan Documents so provide, said interest rates, fees and charges may vary from
time to time) or (ii) advancement of the maturity date of the Note where no
Default has occurred under the Loan Documents; (e) take and hold security for
the performance of Borrower's obligations under the Note or the other Loan
Documents and exchange, enforce, waive and release any such security; (f) apply
such security and direct the order or manner of sale thereof as Lender in its
discretion may determine; (g) release, substitute or add any one or more
endorsers of the Note or guarantors of Borrower's obligations under the Note or
the other Loan Documents; (h) apply payments received by Lender from Borrower to
any obligations of Borrower to Lender, in such order as Lender shall determine
in its sole discretion, whether or not any such obligations are covered by this
Indemnity; and (i) assign this Indemnity in whole or in part.
9. Indemnitor's Waivers. Indemnitor waives: (a) any defense based upon any
legal disability to enter into the Loan or other defense of Borrower; (b) any
defense based on any lack of authority of the officers, directors, partners or
agents acting or purporting to act on behalf of Indemnitor or any principal of
Indemnitor, or any defect in the formation of Indemnitor or any principal of
Indemnitor; (c) any defense based upon the application of the proceeds of the
Loan by Borrower for purposes other than the purposes represented by Borrower to
Lender or intended or understood by Lender or Indemnitor; (d) any defense based
upon Lender's election of any remedy against Borrower or Indemnitor or both; (e)
any defense based upon Lender's failure to disclose to Indemnitor any
information concerning Borrower's financial condition or any other circumstances
bearing on Borrower's ability to perform its obligations under the Note or any
of the Loan Documents; (f) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in any other respects more burdensome than that of a principal; (g) any
defense based upon Lender's election, in any proceeding instituted under the
Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code or any successor statute; (h) any defense based upon any
borrowing or any grant of a security interest under Section 364 of the Federal
Bankruptcy Code; (i) any right of subrogation, any right to enforce any remedy
which Lender may have against Borrower and any right to participate in, or
benefit from, any security for the Note or the other Loan Documents now or
hereafter held by Lender; (j) presentment, demand, protest and notice of any
kind; and (k) the benefit of any statute of limitations affecting the liability
of Indemnitor hereunder or the enforcement
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<PAGE> 5
hereof. Indemnitor agrees that payment or performance of any act which tolls any
statute of limitations applicable to the Loan Documents shall similarly operate
to toll the statute of limitations applicable to Indemnitor's liability
hereunder. Without limiting the generality of the foregoing or any other
provision hereof, Indemnitor expressly waives any and all benefits which might
otherwise be available to Indemnitor under California Civil Code Sections 2809,
2810, 2819, 2839, 2845, 2849, 2850, 2899 and 3433 and California Code of Civil
Procedure Sections 580a, 580d and 726, or any of such sections. In addition,
Indemnitor understands that Indemnitor's duties, obligations and liabilities
under this Indemnity are not limited in any way by any information (whether
obtained from Borrower, from Indemnitor, or from Lender's own investigations)
which Lender may have concerning the Property and the presence of any Hazardous
Materials on the Property.
10. Disclosure of Information. If Lender elects to sell participations in
the Loan, including this Indemnity, Lender may forward to each participant and
prospective participant all documents and information relating to this Indemnity
or to Indemnitor, whether furnished by Borrower or Indemnitor or otherwise.
11. Attorney's Fees. If either Indemnitor or Lender engages an attorney or
institutes an action in order to enforce any of the provisions of this
Indemnity, the prevailing party shall be entitled to reasonable attorney's fees
and court costs which may be incurred in connection therewith.
12. Entire Agreement. This Indemnity contains the entire understanding
between the parties relating to the transactions contemplated hereby and all
statements, oral or written, are merged herein. No modification, waiver,
amendment, discharge or change of this Indemnity shall be valid unless the same
is in writing and signed by the party against which the enforcement of such
modification, waiver or amendment, discharge or change is or may be sought.
13. Successors and Assigns. All terms of this Indemnity shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective legal representatives, successors and assigns.
14. Governing Law. This Indemnity shall be governed by, and construed in
accordance with, the laws of the State of California, except to the extent
preempted by Federal laws.
15. Miscellaneous. The liability of all persons and entities who are in
any manner obligated hereunder to Lender as an Indemnitor shall be joint and
several. If any provision of this Indemnity shall be determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable, that portion
shall be deemed severed from this Indemnity and the remaining parts shall remain
in fall force as though the invalid, illegal or unenforceable portion had never
been part of this Indemnity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 6
IN WITNESS WHEREOF, this Indemnity has been executed as of the date first
set forth above.
INDEMNITOR:
ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By: /s/ Diana M. Laing
--------------------------------
Name: Diane M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By:
--------------------------------
Name: Ronald E. Schroger
Title: Vice President
(CORPORATE SEAL)
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<PAGE> 7
IN WITNESS WHEREOF, this Indemnity has been executed as of the date first
set forth above.
INDEMNITOR:
ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: Arden Realty, Inc., a Maryland
corporation, as General Partner
By:
--------------------------------
Name: Diane M. Laing
Title: Chief Financial Officer
(CORPORATE SEAL)
LENDER:
LASALLE NATIONAL BANK, AS TRUSTEE for
Morgan Stanley Capital I Inc., Commercial
Mortgage Pass-Through Certificates,
Series 1996-WF1
By: Lennar Partners, Inc.,
As Special Servicer
By: /s/ Ronald E. Schroger
--------------------------------
Name: Ronald E. Schroger
Title: Vice President
(CORPORATE SEAL)
-6-
<PAGE> 8
Loan No. 30-0540284
EXHIBIT A
(DESCRIPTION OF PROPERTY)
Exhibit A to Hazardous Materials Indemnity Agreement (Unsecured) executed by
ARDEN REALTY LIMITED PARTNERSHIP, "Indemnitor" to LASALLE NATIONAL BANK, AS
TRUSTEE for Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1996-WF1, "Lender".
Description of Property
PARCEL I OF PARCEL MAP NO. 13528, CITY OF SAN DIEGO, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY.
A.P.N.: 341-220-38-00
Page 1 of 1 Page(s)
<PAGE> 1
EXHIBIT 10.8
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 20th day of October,
1997, by and between SP ASSOCIATES, 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") containing approximately
3.14 acres of land area, located in the City of Newhall, State of California
commonly known as Sunset Pointe Plaza, 25129 The Old Road, Newhall, California
and more particularly described on Exhibit A hereto;
1.2 Appurtenances. All rights, privileges and easements
appurtenant to the Land, to the extent owned by Seller, if any, 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 58,105 square foot
three-story office building, and all other structures and surface parking
presently located on the Land, all fixtures, apparatus,
<PAGE> 2
equipment, and appliances used in connection with the operation or occupancy
thereof to the extent owed by Seller, if any (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 as 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, 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 Eight Million, Three Hundred Thousand Dollars ($8,300,000) (the
"Purchase Price").
2.2 Payment of Purchase Price. The Purchase Price shall be paid as
follows:
(a) Deposit. Upon the Opening of Escrow (as hereinafter
defined), Buyer shall deliver to Chicago Title Insurance Company ("Escrow
Holder"), 245 South Los Robles Avenue, Suite 105, Pasadena, California 91101
the sum of One Hundred Fifty Thousand Dollars ($150,000) (the "Deposit"). In
the event the sale of the Property is consummated, the sum of (i) the Deposit,
(ii) all interest accrued thereon, while such Deposit is held in Escrow, and
(iii) an amount equal to interest accruing on the Deposit at a rate of eight
percent (8%) per
2
<PAGE> 3
annum from the date the Deposit is released to Seller to the Closing Date (the
"Implied Interest Amount"), shall be credited towards the Purchase Price. In
the event that Buyer does not terminate this transaction at or prior to the
end of the Contingency Period (as hereinafter defined) the Deposit shall be
released to Seller subject to the provisions of this Agreement. If the
Deposit is released to Seller, Buyer shall receive as a credit against the
Purchase Price, an amount equal to the Implied Interest Amount. In the event
the transactions contemplated hereby are not consummated for reasons other than
a default solely on the part of Buyer, the Deposit, together with all interest
earned thereon, and, if previously released to Seller, including interest at a
rate of eight percent (8%) per annum from the date released to Seller to the
date returned to Buyer, shall be returned, upon Buyer's request, immediately to
Buyer.
(c) 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 acceptable to Buyer, with all
interest accruing to the benefit of Buyer. 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, TOGETHER WITH ALL INTEREST EARNED THEREON, SHALL BE RETAINED BY SELLER
AS LIQUIDATED DAMAGES AND 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/ MK /s/ GSC Buyer: /s/ VJC
----------------- -----------------
3
<PAGE> 4
ARTICLE 3
ESCROW
3.1 Deposit with Escrow Holder and Escrow Instructions. Within three
(3) 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 greement 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
and 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
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 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) (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,
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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. Concurrently with the execution
and delivery of this Agreement, Seller shall deliver to Buyer all of the
following:
5.1.1 at Seller's sole cost and expense, 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; and
5.1.2 at Seller's sole cost and expense, 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 that are within Seller's possession or recoverable from the Title
Company as recorded documents 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
thirty (30) days following the Opening of Escrow (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 disapproval of all
matters shown in the Preliminary Title Report
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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. Within ten (10) days after
the execution and delivery of this Agreement, Seller shall deliver to Buyer,
copies of any and all of the following documents in Seller's possession:
(a) a rent roll of the Property for the current month;
(b) intentionally omitted;
(c) copies of the Leases, and all licenses, service contracts
(including parking, elevator, HVAC and landscaping maintenance contracts),
management contracts, brokerage agreements and (to the extent they are in
Seller's possession) copies of all permits, variances, insurance policies,
maps, certificates of occupancy, building permits;
(d) warranties and instruction books (e.g., for vertical
transportation, HVAC and other building systems); operating statements for
calendar years 1995, 1996 and 1997 monthly statements through the most recently
completed month;
(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 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 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 or the Property; and
(i) any and all other reports, plans or studies relating to
the Property that Buyer shall specifically request.
(collectively, the "Reports and Documents"). 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
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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, prior to the
expiration of the contingency period, an estoppel certificate from (i) each
tenant occupying not less than 2500 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 (i.e. 49,389 square feet), in the form of
Exhibit H hereto and in substance satisfactory to Buyer, in Buyer's sole and
absolute discretion (collectively, the "Estoppel Certificates"). In the event
that Buyer disapproves of any Estoppel Certificate 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, 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.
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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 7.2 hereof and shall
have delivered to Buyer the documents and instruments described in Section 7.3
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 7.4
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
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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 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 on January 6, 1998 (the "Closing
Date"), or such other date prior thereto and/or at such other laoction 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.
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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 To the extent they are within Seller's possession,
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 on
the Property; and
7.3.7 Copies of all insurance policies obtained or maintained
by Seller and 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 one business day prior to
the Closing Date, Buyer shall deposit with Escrow Holder the following:
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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
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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, the Seller or the Buyer at any time subsequent to Closing
but with reference to any period prior thereto during Seller's ownership
thereof, 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, 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;
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 that portion of the premium for the Title Policy attributable to the
issuance of a CLTA standard coverage title policy and Buyer shall pay the
balance of the premium for the Title Policy, and the cost of the Endorsements,
if any.
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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:
8.1 Condition of Property. To the best of Seller's knowledge,
without any duty to investigate, 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 and in compliance with all applicable governmental laws,
ordinances, regulations and requirements.
8.2 Use and Operation. To the best of Seller's knowledge, without
any duty to investigate, 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. 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, to the extent such document was
prepared by Seller, and contain no material inaccuracies or misstatements of
fact, and all such contracts and other documents relating to or affecting the
Property have been or will be 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 8.5 hereto, on the part of any lessee, and, to the best of Seller's
knowledge, without any duty to investigate, 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
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without the giving of notice and/or the lapse of time) any of the Leases.
Except as disclosed on Schedule 8.5, 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 8.6
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 8.6 pursuant to Section
5.2 hereof. There will be no contractors, subcontractors, sub-subcontractors,
materialmen or any persons or entities who will be entitled to a mechanic's lien
against the Property. There is no obligation of Seller under the terms of any
contract, lease or other instrument relating to or affecting the Property to
assume any obligation thereof other than the obligations contained in the
contracts, leases and other documents required to be disclosed to Buyer pursuant
to this Agreement. There will be as of the Closing Date no obligation of Buyer
under the terms of any contract, lease or other instrument affecting the
Property other than the obligations contained in the contracts, leases and other
documents which Buyer assumes pursuant to this Agreement.
8.7 Brokerage Commissions. 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. 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. There are
no easements, encumbrances or other agreements affecting the Property except as
may be shown in the Preliminary Title report.
8.10 Default in Respect of Appurtenances. 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. To the best knowledge of Seller, without any duty
to investigate, 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
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materially and adversely affect the ability of Seller to perform its
obligations under this Agreement.
8.12 Utilities. All water, sewer, gas, electric, telephone, and
drainage facilities and all other utilities required by law or by the current
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 as it is currently used, 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 any duty to investigate, Seller has obtained all licenses,
permits, approvals, easements and rights of way, including proof of dedication,
required from all governmental authorities having jurisdiction over the
Property or from private parties for the normal use and operation of the
Property and to ensure free and unimpeded vehicular and pedestrian ingress to
and egress from the Property as required to permit the normal intended usage of
the Property by the tenants thereof, their invitees and customers.
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. 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 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
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transported to or form the Property any Hazardous Substance (as hereinafter
defined) or allowed any other person or entity to do so. 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. Except as may be disclosed in
any environmental reports delivered by Seller to Buyer pursuant to this
Agreement, 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
8.19 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 8.19. As used herein "Affiliate" shall mean and refer to
any entity which controls, is controlled by, or is under common control with
Seller.
The foregone representations and warranties of Seller shall survive
the Closing for a period of two (2) years following the Closing.
16
<PAGE> 17
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.
10.2 No Leases or Other Contracts. Seller shall not enter into or
modify any leases, service contracts or other similar agreements with respect
to the Property without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed. Buyer agrees to respond to Seller's request
for approval within two (2) business days following request therefore.
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.
17
<PAGE> 18
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 Dollars ($100,000) 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 Dollars ($100,000) 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 Buyer's Obligation to Maintain Insurance . Prior to any entry
onto the Property pursuant to this Agreement by Buyer or any person or entity
acting on behalf of Buyer, Buyer shall provide Seller with a certificate of
insurance confirming the effectiveness of a policy of liability insurance in
favor of Buyer, which names Seller as additional insureds, with a combined
single limit coverage in an amount of not less than One Million Dollars
($1,000,000) per occurrence and which is not amendable or cancelable on less
than thirty (30) days prior written notice.
18
<PAGE> 19
12.3 Entry on Property. From the date hereof until the Closing,
Seller shall afford Buyer reasonable access to the Property for the purpose of
conducting Buyer's Inspections. Buyer agrees to coordinate all such visits to
the Property with a representative of Seller, and to conduct all such visits in
a commercially reasonable manner which minimizes any unnecessary disruption to
tenants. 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 indemnifies and holds Seller harmless from and shall defend on Seller's
behalf and against any and all liability, loss, cost, damage and/or expense,
including, without limitation, attorneys' fees and costs, resulting directly
from Buyer's or Buyer's agents' entry onto the Property. Should the
transaction contemplated herein fail to close for any reason, Buyer shall, at
Buyer's expense, repair any damage resulting directly from Buyer's or Buyer's
agents' entry onto the Property.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Seller. Seller hereby agrees 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 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
19
<PAGE> 20
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 5.4 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 13 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 East
Beverly Hills, California 90212
Attn: Brigitta B. Troy, Esq.
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.
If to Seller: SP Associates Ltd. c/o Three Springs
Corporation
16633 Ventura Boulevard, Suite 1300
Encino, California 91436
Attn: Michael Keston
with a copy to: Irell & Manella
1800 Avenue of the Stars, Suite 900
Los Angeles, California 90067
Attn: Louis A. Huskins, Esq.
20
<PAGE> 21
If to Escrow Holder: Chicago Title Insurance Company
245 South Los Robles Avenue, Suite 105
Pasadena, California 91101
Attn: Caroline Hoff
If to the Title Company: Chicago Title Insurance Company
245 South Los Robles Avenue, Suite 105
Pasadena, California 91101
Attn: Caroline Hoff
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, 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 other than to Bruce S. Kaufer (Landmark Commercial Group). 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 for a period of two (2) years following 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
may not assign its rights or obligations under this Agreement without the prior
written consent of Seller, which consent shall not be unreasonably withheld or
delayed. In addition, Buyer may assign its rights in this Agreement to an
entity which controls, is controlled by, or is under common control with,
Buyer.
14.4 Amendments. This Agreement may be amended or modified only by
a written instrument executed by the parties hereto.
21
<PAGE> 22
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 Deed and the transfer of title to the
Property for a period of two (2) years following the Closing.
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 laws of the State of California.
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
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.
22
<PAGE> 23
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 [INTENTIONALLY OMITTED]
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 Los Angeles County, California is accepting
documents for recordation in their real estate records.
23
<PAGE> 24
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 Tax Deferred Exchange. Buyer and Seller acknowledge that
either party may wish to structure this transaction as a tax deferred exchange
of like-kind property within the meaning of Section 1031 of the Code. Each
party agrees to reasonably cooperate with the other party to effect such an
exchange; provided, however, that (i) the cooperating party shall not be
required to acquire or take title to any exchange property, (ii) the
cooperating party shall not be required to incur any expense or liability
whatsoever in connection with the exchange, including, without limitation, any
obligation for the payment of any escrow, title, brokerage or other costs
including attorneys' fees incurred with respect to the exchange, (iii) no
substitution of the effectuating party shall release said party from any of its
obligations, warranties or representations set forth in this Agreement or from
liability for any prior or subsequent default under this Agreement by the
effectuating party, its successors, or assigns, which obligations shall
continue as the obligations of a principal and not of a surety or guarantor,
(iv) the effectuating party shall give the cooperating party at least five (5)
business days prior notice of the proposed changes required to effect such
exchange and the identity of any party to be substituted in the escrow, (v) the
effectuating party shall be responsible for preparing all additional
agreements, documents and escrow instructions (collectively, the "Exchange
Documents") required by the exchange, at its sole cost and expense, (vi) the
effectuating party shall be responsible for making all determinations as to the
legal sufficiency, tax considerations and other considerations relating to the
proposed exchange, the Exchange Documents and the transactions contemplated
thereby, and the cooperating party shall in no event be responsible for, or in
any way be deemed to warrant or represent any tax or other consequences of the
exchange transaction, (vii) the effectuating party shall indemnify, defend and
hold the cooperating party harmless from and against any and all adverse tax
consequences and administrative or judicial Internal Revenue Service
proceedings arising by reason of the cooperating party's performance of the
acts required hereby, and (viii) the election to effect such an exchange shall
not delay the Closing of the transaction as defined herein.
14.25 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 SHALL BE SETTLED BY ARBITRATION IN THE CITY OF LOS ANGELES, 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
24
<PAGE> 25
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 INITIALING 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
INITIALING 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/ MK /s/ GSC /s/ VJC
----------------------- -----------------------
Seller's Initials Buyer's Initials
[SIGNATURE PAGE FOLLOWS]
25
<PAGE> 26
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Seller: SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By: /s/ Gregory St. Clair
----------------------------------
Its: Vice President
By: Larwin Company, a California
corporation
Its General Partner
By: /s/ Michael Keston
---------------------------------
Its: CEO
-------------------------------
Buyer:Arden Realty Limited Partnership,
a Maryland corporation
Its General Partner
By: /s/ Victor J. Coleman
-------------------------------
Its: President and COO
-------------------------------
26
<PAGE> 27
LIST OF EXHIBITS
Exhibit A: Description of the Land
Exhibit B: Leases
Exhibit C: Grant Deed
Exhibit D: Assignment of Leases
Exhibit E: Bill of Sale
Exhibit F: Assignment of Service Contracts
Exhibit G: Assignment of Intangible Property
Exhibit H: Form of Estoppel Certificate
Exhibit I: Affidavit of Non-Foreign Status
Exhibit J: INTENTIONALLY OMITTED
Exhibit K: Form of Audit Letter
<PAGE> 28
LIST OF SCHEDULES
Schedule 7.5: Lease Disclosures
Schedule 7.6: Service Contract Disclosures
Schedule 7.19: Disclosures Regarding Affiliates
<PAGE> 29
EXHIBIT A
LEGAL DESCRIPTION
PARCEL NO. 5 OF PARCEL MAP NO. 18001, IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP FILED IN BOOK 198, PAGES 79 THROUGH 85 INCLUSIVE OF
PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM A PORTION OF SAID LAND AN UNDIVIDED 2 1/2 PERCENT INTEREST OF
ALL OIL, GAS, NATURAL GASOLINE AND OTHER HYDROCARBON SUBSTANCES, INCLUDING
HELIUM AND CARBON-DIOXIDE, IN AND UNDER SAID LAND, AS GRANTED TO E. C. PYLE, IN
THE DEED RECORDED FEBRUARY 26, 1940, IN BOOK 17290, PAGE 227, OF OFFICIAL
RECORDS, BUT WITHOUT THE RIGHT OF SURFACE ENTRY TO A DEPTH OF 500 FEET BELOW THE
SURFACE OF SAID LAND BY A QUITCLAIM DEED RECORDED MARCH 25, 1981 AS INSTRUMENT
NO. 81-300512, OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM A PORTION OF SAID LAND AN UNDIVIDED ONE-HALF OF ALL OIL,
GAS AND OTHER HYDROCARBON AND MINERAL SUBSTANCES IN, UNDER OR THAT MAY BE
PRODUCED, SAVED, SOLD OR REMOVED FROM THE HEREINABOVE DESCRIBED LAND OR ANY PART
THEREOF OR THAT MAY BE PRODUCED OR REMOVED BY MEANS OF A WELL OR WELL BORE
PENETRATING OR TRAVERSING THE SAID LAND OR ANY PART THEREOF, TOGETHER WITH THE
RIGHT TO EXTRACT SAID OIL, GAS AND OTHER HYDROCARBON AND MINERAL SUBSTANCES AND
TOGETHER WITH ALL PROCEEDS, RENTS, ROYALTIES, BONUSES AND OTHER CONSIDERATIONS
ALLOCABLE TO, OR WHICH MAY ACCRUE OR BE PAYABLE WITH RESPECT TO THE SAID RIGHTS,
TITLE, INTEREST AND ESTATE IN AND TO SAID OIL, GAS AND OTHER HYDROCARBON AND
MINERAL SUBSTANCES, EXCEPTED BY AND RETAINED IN GRANTORS HEREUNDER, WHETHER
UNDER OR PURSUANT TO ANY LEASE FOR THE DEVELOPMENT AND PRODUCTION OF OIL OR GAS,
COMMUNITY OIL AND GAS LEASE, ANY POOLING OR UNITIZING ARRANGEMENT OR AGREEMENT,
OPERATING AGREEMENT, AGREEMENT PERMITTING PROSPECTING FOR AND PRODUCTION OF OIL
OR GAS OR OTHERWISE; PROVIDED, HOWEVER, THAT GRANTORS DO HEREBY WAIVE AND
RELINQUISH ANY AND ALL RIGHTS TO USE AND OCCUPY THE SURFACE OR SUBSURFACE TO A
DEPTH OF 500 FEET BELOW THE SURFACE OF THE SAID LAND, FOR ANY PURPOSE
WHATSOEVER, THE RIGHTS, INTEREST AND ESTATE HEREIN EXCEPTED BY AND RETAINED IN
GRANTORS ARE OVER IN ADDITION TO THAT CERTAIN GROSS ROYALTY OF 2 PERCENT AND
RIGHTS WITH RESPECT THERETO EXCEPTED AND RESERVED BY GRANTOR UNDER THAT CERTAIN
GRANT DEED DATED DECEMBER 15, 1954 FROM ROSS W. STONE, A MARRIED MAN AS HIS SOLE
AND SEPARATE PROPERTY AND EDNA M. STONE, HIS WIFE, TO FRANK S. LOMBARDI AND
MARIE LOMBARDI, HUSBAND AND WIFE, AS JOINT TENANTS, RECORDED IN BOOK 46467, PAGE
214, OFFICIAL RECORDS OF LOS ANGELES COUNTY, CALIFORNIA, AS EXCEPTED AND
RESERVED BY FRANK S. LOMBARDI AND MARIE A. LOMBARDI, IN DEED RECORDED OCTOBER 4,
1963 AS INSTRUMENT NO. 2005, IN BOOK D2206, PAGE 799, OFFICIAL RECORDS.
Preliminary Title Report and Underlying documents delivered to Brigitta Troy,
Senior Vice President, Arden ReaLty during the site visit with Seller
on Tuesday, October 14
<PAGE> 30
EXHIBIT B
SCHEDULE OF LEASES
<TABLE>
<CAPTION>
Suite Tenant SF
----- ------ --
<S> <C> <C> <C>
1 100 Centex Homes 5,755
2 101 Craford & Craford 847
3 104 Schering Plough 1,624
4 105 Investor's Title Company 1,604
5 110 North American Mortgage Inc 2,300
6 112 Henry Mayo Newhall Hospital 3,776
7 200 Consumer Credit Counsel 954
8 201 Manpower 1,140
9 202 Carr-Brodie/Coon 823
10 203 National Pacific Mortgage 700
11 207 Paradise & Associates 1,273
12 208 Universal Health Employment 1,494
13 210 Taxatron 1,679
14 215 Pacific Mortgage 820
15 220 Eckert Parker Insurance 1,932
16 212 First Community Financial 2,829
17 222 Greystone Homes 5,783
18 300 Rosemont 1,650
19 302 Franklin Equity Leasing 916
20 303 CPR Technologies 1,592
21 304 Chicago Title Company 2,060
22 307 Alan Gross 925
23 310 Del Guyer 2,244
24 312 Dodge-Chrysler Dealers 2,115
25 316 Primerica/Rolls 2,413
26 322 Huntway Partners 5,385
Lease Out for Signature - Draft Delivered to Buyer
27 114 Henry Mayo Newhall Hospital 989
</TABLE>
Lease copies delivered to Brigitta Troy, Arden Realty
during the site visit with Seller on Tuesday, October 14
<PAGE> 31
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL THIS DEED
AND TAX STATEMENTS TO:
Christensen, Miller, Fink, Jacobs,
Glaser, Weil & Shapiro, LLP
2121 Avenue of the Stars, 18th Floor
Los Angeles, CA 90067
Attn: Peter M. Weil, Esq.
- --------------------------------------------------------------------------------
GRANT DEED
A.P.N.________
The undersigned grantor(s) declare(s):
Documentary transfer tax is SEE SEPARATE DECLARATION.
( ) computed on full value of property conveyed, or
( ) computed on full value less value of liens and encumbrances remaining at
time of sale.
( ) Unincorporated area: ( ) City of_________________, and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
SP ASSOCIATES, LTD., A CALIFORNIA LIMITED PARTNERSHIP, hereby GRANT(S) to
ARDEN REALTY LIMITED PARTNERSHIP, A MARYLAND LIMITED PARTNERSHIP,
the following described real property in the City of Newhall, County of Los \
Angeles, State of California:
AS PER LEGAL DESCRIPTION ATTACHED HERETO, MADE A PART HEREOF AND
ATTACHED HERETO AS EXHIBIT A.
Signature of Grantor
SP ASSOCIATES, LTD.,
a California limited partnership
By: Three SPRINGS Corporation
Its GENERAL Partner
By:_______________________________
Its:______________________________
Exhibit C
<PAGE> 32
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS is made this day of
__, ____________, 1998, by and between SP ASSOCIATES, LTD., A CALIFORNIA
LIMITED PARTNERSHIP, ("Assignor"), and ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Assignee") with reference to the following
facts:
C. Assignor, as Lessor, and each of the lessees named in Exhibit
"A" attached hereto, have entered into a lease for the space indicated on said
Exhibit "A" comprising a portion of the improvements constructed upon that
certain parcels of real property situated in the City of Newhall, State of
California (the "Property"), more particularly described in Exhibit "B"
attached hereto (all of said leases referred to in Exhibit "A" as amended to
the date hereof being hereinafter collectively referred to as the "Leases").
B. Assignor has received rent security deposits and rents prepaid
more than one (1) month in advance from lessees under some of the Leases, in
the total amount of $__________ in cash referred to in Exhibit "A" attached
hereto and made a part hereof (collectively the "Security Deposits").
C. Assignor now desires to assign and transfer to Assignee all of
Assignor's interest as lessor in the Leases and the Security Deposits, subject
to the rentals, terms, covenants, obligations, easements and restrictions set
forth therein.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee, and its
successor and assigns, all of Assignor's interest as Lessor in and to the
Leases and the Security Deposits, subject to said rentals, terms, covenants,
obligations, easements and restrictions therein provided.
2. Assignee hereby (a) accepts the assignment of the Leases and
the Security Deposits, shall be entitled to all rights and benefits accruing to
the lessor thereunder, and (b) agrees to assume and be bound by the terms of
the Leases subject to the terms and provisions of each of the Leases, from and
after the date hereof, and (c) agrees to defend and indemnify Assignor to the
extent of Assignee's interest in the Property from all obligations of landlord
under the Leases or obligations as landlord which accrue from and after the
date hereof.
Exhibit D
<PAGE> 33
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of October 20, 1997, between
Seller and Arden Realty Limited Partnership and the covenants, agreements and
limitations contained therein are incorporated herein by reference as if herein
set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment of Leases and Security Deposits as of the day and year first above
written.
"Assignor":
SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By:________________________
Its:_______________________
By: Larwin Company, a California corporation
Its General Partner
By:________________________
Its:_______________________
"Assignee":
ARDEN REALTY LIMITED PARTNERSHIP,
Its: Vice President
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:________________________
Its:_______________________
<PAGE> 34
BILL OF SALE
SP ASSOCIATES, LTD., A CALIFORNIA LIMITED, ("SELLER"), for good and
valuable consideration heretofore paid by ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Buyer"), the receipt and sufficiency of which
are hereby acknowledged, hereby sells, transfers, grants, bargains, conveys,
assigns, and delivers to Purchaser, its successors and assigns free and clear
of all liens and encumbrances: All fixtures, fittings, appliances, apparatus,
equipment, machinery, chattels and personal property, to the extent owned by
Seller, and listed in Exhibit "A" attached hereto, including all building
maintenance supplies and heating, ventilating and air conditioning, electrical,
mechanical and plumbing equipment and facilities which are used in connection
with the operation or maintenance of the improvements erected upon the land
described in Exhibit "B" attached hereto.
This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of October 17, 1997, between
Seller and Buyer and the covenants, agreements and limitations contained
therein are incorporated herein by reference as if herein set out in full.
IN WITNESS WHEREOF, Seller has executed this instrument
this ___ day of January, 1998.
"SELLER"
SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By:________________________
Its:_______________________
By: The Larwin Company, a California corporation
Its General Partner
By:________________________
Its:_______________________
Exhibit E
<PAGE> 35
ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES
AND GUARANTEES
THIS ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES AND GUARANTEES is
made this ____ day of ____________, by and between SP ASSOCIATES, LTD., A
CALIFORNIA LIMITED LIABILITY COMPANY ("Assignor"), and ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Assignee"), with reference to the
following facts:
A. Assignor is the owner of the benefits of, subject to the
burdens contained in, those certain service agreements currently in effect in
connection with the business of Assignor related to the Property being
purchased by Assignee concurrently herewith, all of which service contracts and
agreements (the "Service Agreements") are annexed hereto as a part of, or are
described in, Exhibit "A" attached hereto and made a part hereof.
B. Assignor has heretofore used or acquired (or may have
acquired) certain intangible rights in connection with the Property and/or the
Improvements including but not limited to various trade names, logos,
easements, licenses, permits, air rights, certificates of occupancy,
warranties, rights of way, signs, sewer agreements, water line agreements,
utility agreements, water rights and oil, gas and mineral rights and other
intangible property (collectively the "Intangibles").
C. Assignor is the owner, or entitled to the benefit, of the
warranties and guaranties, express and implied, covering the fixtures and
equipment located on the Property ("Warranties and Guaranties").
D. Assignor now desires to assign and transfer to Assignee all of
its right, title and interest in the Service Agreements, Intangibles and the
Warranties and Guaranties subject to all of the payments, terms, covenants,
obligations, agreements and restrictions therein set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee and its
successors and assigns, all Assignor's right, title and interest in the Service
Agreements, Intangibles and the Warranties and Guaranties subject to said
payments, terms, covenants, obligations, agreements and restrictions.
2. Assignee hereby (a) accepts the assignment of the
Guaranties, shall be entitled to all rights and benefits accruing to the
Assignor thereunder, (b) agrees to assume and be bound by the terms thereof
from and after the date hereof, and (c) agrees to defend and indemnify Assignor
to the extent of Assignee's
Exhibit F
<PAGE> 36
interest in the Property from all obligations of Assignor under the Service
Contracts, Intangibles and the Warranties and Guaranties or from any which
accrue from and after the date hereof.
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of October 20, 1997, between
Seller and Arden Realty Limited Partnership and the covenants, agreements and
limitations contained therein are incorporated herein by reference as if herein
set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment of Service Contracts, Warranties and Guarantees as of the day and
year first hereinabove written.
"Assignor":
SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By:________________________
Its:_______________________
By: Larwin Company, a California corporation
Its General Partner
By:________________________
Its:_______________________
"Assignee":
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:________________________
Its:_______________________
<PAGE> 37
ASSIGNMENT OF INTANGIBLE PROPERTY
THIS ASSIGNMENT OF INTANGIBLE PROPERTY (this "Assignment") is made as
of ___________ __, 1998 by SP Associates, Ltd., a California limited liability
company ("Assignor"), to Arden Realty Limited Partnership, a Maryland limited
partnership ("Assignee") pursuant to the provisions of that certain Agreement
of Purchase and Sale dated as of October 20, 1997, (the "Purchase Agreement"),
by and between Assignor and Assignee.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, subject to the terms and provisions of the
Purchase Agreement, Assignor hereby sells, transfers, conveys and assigns to
Assignee the Intangible Property, as such term is defined in the Purchase
Agreement, including those items set forth on Schedule A attached hereto and
made a part hereof.
IN WITNESS WHEREOF, this Assignment has been executed by Assignor on
the date set forth above.
"Assignor":
SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By:________________________
Its:_______________________
By: Larwin Company, a California corporation
Its General Partner
By:________________________
Its:_______________________
"Assignee":
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Exhibit G
<PAGE> 38
TENANT ESTOPPEL CERTIFICATE
Arden Realty Limited Partnership
9100 Wilshire Boulevard
Suite 700
Beverly Hills, California 90212
Attn: Ms. Brig Troy
Re: Tenant Lease for ________________
_______________, California
Suite _________
Ladies and Gentlemen:
We understand that you are the proposed purchaser of an ______________
building complex located at ____________________, California (the "Property")
in which the undersigned is a tenant. We further understand that in connection
with your purchase of the Property it is necessary that you understand the
precise nature of our tenancy and in order to so do, we hereby warrant and
represent to you that with respect to our lease, as amended (the "Lease") and
more particularly described in Schedule "A" attached hereto (the "Schedule")
the following is true and correct:
1. The Lease constitutes the entire agreement between the
undersigned and the landlord thereunder with respect to the subject matter
thereof and the Lease has not been modified, amended or supplemented in any way
except by the amendments or other agreements described in the Schedule.
2. The summary of the basic terms of the Lease contained in the
Schedule is true and correct.
3. Except as provided in the Schedule, the undersigned has not
assigned, transferred or hypothecated the Lease or any interest therein or
entered into a sublease for any portion of the premises covered by the Lease
and no person or firm other than the undersigned or its employees is in
possession of such premises or any portion thereof.
4. The undersigned is not in default (or with the giving of
notice or the passage of time or both will not be in default) under the Lease
and the undersigned has no claim against, off-set, credit, defense,
counterclaim or deductions against the landlord thereunder, or any rent or
other sums due or payable under the Lease, and the landlord thereunder is not
in default (or with the giving of notice or the passage of time or both will
not be in default) under the Lease.
Exhibit H
<PAGE> 39
5. The undersigned has no option, right of first refusal or
otherwise to purchase the Property or any portion thereof or any interest
therein and the only interest of the undersigned in the Property is that of a
tenant pursuant to the terms of the Lease.
6. The undersigned does not engage in the generation, storage or
disposal of "Hazardous Materials" on the Property and to the best of the
undersigned's knowledge, there are no Hazardous Materials located in, on, under
or in the vicinity of the Premises demised by the Lease except for normal
office supplies. The undersigned agrees not to use, store, or permit the use,
storage or release of any Hazardous Materials on, under or about the Premises
or the Property other than what is permitted by applicable law, codes,
regulations or restrictions and used by the undersigned in accordance with
applicable laws and in amounts as dictated by the normal conduct of the
undersigned's business. The term "Hazardous Material" means any toxic or
hazardous substance, material or wastes which if or becomes regulated by any
local government, the State of California, the United States government or any
agency or division thereof.
7. The undersigned is not the subject of any bankruptcy,
insolvency, debtor's relief, reorganization, receivership or other similar
proceedings.
8. The person executing this Certificate hereby warrants and
represents that he or she has the power and authority to execute and deliver
this Certificate on behalf of the tenant named herein.
9. The undersigned as tenant hereby ratifies and confirms the
Lease and the tenancy created thereby and upon consummation of sale and notice
thereof, agrees to accept you or your assignees and your lenders as the
landlord thereunder.
10. The undersigned agrees to notify your lenders at the address
designated by such lenders of any default on the part of Landlord under the
Lease, and further agrees that notwithstanding any provisions of the Lease, no
notice, cancellation or termination thereof shall be effective unless Lender
shall have received such notice and have failed to cure or commence to cure
such default within a reasonable time following receipt of such notice and the
expiration of any cure period applicable thereto.
<PAGE> 40
We understand that the current owner, ____________________, you and/or
any other purchaser(s) and their respective lenders will, if you proceed with
the purchase of the Property, rely on this Certificate.
Very truly yours,
___________________________________
Name of Tenant
___________________________________
Signature
___________________________________
Date
<PAGE> 41
AFFIDAVIT OF NON-FOREIGN STATUS
To inform Arden Realty Limited Partnership, a Maryland limited
partnership ("Transferee"), that withholding of tax under Section 1445 of the
Internal Revenue Code of 1986, as amended ("Code") will not be required upon
the transfer of certain real property to the Transferee by SP Associates, Ltd.,
a California limited partnership("Transferor"), the undersigned hereby
certifies the following on behalf of Transferor:
1. The Transferor is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Code and the Income Tax Regulations promulgated thereunder).
2. The Transferor's employer identification number/social
security number is ___________________________.
3. The Transferor's office/personal residence address is
__________________________________________________________.
The Transferor understands that this Affidavit may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
The Transferor understands that the Transferee is relying on this
Affidavit in determining whether withholding is required upon said transfer.
Under penalty of perjury I declare that I have examined this Affidavit
and it is true, correct and complete, and I further declare that I have
authority to sign this document on behalf of the Transferor.
Date:_______________________________, 199__
TRANSFEROR:
SP Associates, Ltd.,
a California Limited Partnership
By: Three Springs Corporation
Its General Partner
By:________________________
Its:_______________________
<PAGE> 42
By: Larwin Company, a California corporation
Its General Partner
By:________________________
Its:_______________________
Exhibit I
<PAGE> 43
AUDIT LETTER
Ernst & Young, LLP
2049 Century Park East
Suite 1700
Los Angeles, California 90067
Attention: Peter Zofrea
Dear Sir:
We are writing at your request to confirm our understanding that your
audit of the statement of operating income for the year ended
_________________, 1996, was made for the purpose of expressing an opinion as
to whether the statement of operating income presents fairly, in all material
respects, the results of operations of [Name of Project] in conformity with
generally accepted accounting principles. These representations are made
exclusively to [Auditor] and not to the buyer of the Project or to any third
party. In connection with your ______________________, 199_ audit we confirm,
to the best of our knowledge and belief, with respect to our daily operations
and without independent investigation or inquiry, the following representations
made during your audit:
A. We have made available to you all financial records and
related data concerning this Project, which are in our possession.
B. We are not aware of any:
1. Irregularities involving any member of management or
employees that could have a materially adverse effect on the statement of
operating income.
2. Notices of violations of laws or regulations, the
effect of which should be considered for disclosure in the financial statements
or as a basis for recording a loss contingency.
3. Material liabilities, gain or loss contingencies or
other transactions (including oral and written guarantees) that are required to
be but have not been accrued or disclosed.
4. Material events that have occurred subsequent to
___________________, 199_ that would require material adjustment to the
statement of operating income.
Exhibit K
<PAGE> 44
C. The Company has complied with all material aspects of
contractual agreements relating to the Project (e.g., management contracts)
that would have a material effect on the statement of operating income in the
event of noncompliance.
D. All significant payments to affiliated companies of the
undersigned have been property recorded or disclosed in the financial
statements.
By:________________________
<PAGE> 45
SCHEDULE "A"
Summary of Lease Terms
(1) Name of Tenant:_______________________________________________________
(2) Lease Date:___________________________________________________________
(3) Amendment Dates, Separate Agreements, if any:_________________________
(4) Suite No.:____________; Estimated Square Footage:_____________________
(5) Lease Start Date:______________; Lease End:___________________________
(6) Remaining Option(s) to Extend:________________________________________
(7) Option(s) for Additional Space:_______________________________________
(8) Monthly Base Rent: $_______________;
Escalations/CAM Charge: $_______________;
Total Monthly Rent: $_______________;
(9) Tenant's Percentage Share of Increased Operating Costs:______________%
(10) Security Deposit: $_____________; Prepaid Rent:_______________________
(11) Assignees/Subtenants:_________________________________________________
(12) Parking Spaces:_______________________________________________________
(13) Lease Guarantor(s):___________________________________________________
(14) Uncured Defaults by Landlord: None____________________________________
(15) Exclusive Uses:_______________________________________________________
(16) Free or Reduced Rent Months remaining after __/01/__:_________________
(17) Tenant Improvements or other allowances due Tenant $:_________________
<PAGE> 46
(18) Comments, if any:_____________________________________________________
______________________________________________________________________
______________________________________________________________________
________________________
Name of Tenant
By:_____________________
Date:___________________
<PAGE> 47
SCHEDULE 7.5
------------
LEASE DISCLOSURES
-----------------
None of the Tenant leases contain any restrictions on the sale of the property.
The following lease agreements contain cancellation provisions in favor of the
Lessee
Ste. 101 1 time right at month 18 with 4 months written notice
Craford & Craford and payment of 3 months rent upon notice
Ste. 104 1 time right at month 36 with no less than 180 days
Schering Plough written notice and payment of $14,000
The following lease agreements contain expansion rights in favor of the Lessee
Ste. 110 Right of first refusal, adjacent suite 114
North American
Mortgage
Ste. 201 Right of first refusal, adjacent suites
Manpower
Ste. 208 Right of first refusal, adjacent suite, expiring 11/97
Universal Health
Employment
There are no other lease disclosure matters.
<PAGE> 48
SCHEDULE 7.6
------------
SERVICE CONTRACT DISCLOSURE
---------------------------
All service contracts are administered by Seller's agent and have been disclosed
in the Vendor List entitled Exhibit A.
<PAGE> 49
PROPERTY #650EQ
25129 THE OLD ROAD
STEVENSON RANCH, CA 91321
VENDOR LIST
Revised 10/09/97 cb
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SERVICE TYPE COMPANY NAME & BEGIN/END ANNUAL TERM CONTACT NAME DETAILS OF
ADDRESS CONTRACT CANCELLATION & PHONE NO. SERVICE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Architecture Architecture & Interior Design Tel: 818-712-0295
19751 Enadia Way
Winnetka, Ca 91306
- ----------------------------------------------------------------------------------------------------------------------------------
Backflow Testing Clarke Backflow Bernie Clarke
P.O. Box 220114 805-294-0901
Newhall, CA 91322
- ----------------------------------------------------------------------------------------------------------------------------------
Carpet Cleaning Peerless Building Maintenance Tim Tuttle - owner
12995 Arroyo Jean
San Fernando, Ca 818-834-0297
91340 800-640-1332
818-837-1957 fax Pig. cleaning
- ----------------------------------------------------------------------------------------------------------------------------------
Directory Sign Berloc Signs Teri Tenant Signage
Shipping Address: 818-503-9823 and directories
7040 Greenbush Ave. 818-503-0934 Fax
N. Hollywood, CA 91605 800-638-8668
Mailing Address
P.O. Box 9337
N. Hollywood, CA 91609
- ----------------------------------------------------------------------------------------------------------------------------------
Electrician Shamma Electric Bill Shamma
11255 Ruffner Ave. 818-363-9595
Granada Hills, Ca 91344 818-802-7727 Mobile
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Elevator Maint. Dover Elevator 7/1/97 to 11/1/01 90 days written 909-594-5747 24 hrs. service
20510 Earlgate Street notice. 909-595-6847 Fax customer #7334400
Walnut, Ca 91789 Agreement not Monthly service and
fully executed repairs.
$407.60 per month
Emergency phone
goes directly to Dover
- ------------------------------------------------------------------------------------------------------------------------------------
Fire Alarm Maint. Tele-Fire of Calif. Inc. 11/30/89-M-to-M 30 days before the Viola Maint. & Monitoring
& Monitor 3035 N. Coolidge Avenue next inspection 213-666-6000 Acct. # 180
Los Angeles, Ca 90039 period.
- ------------------------------------------------------------------------------------------------------------------------------------
Fire Panel Phone 805-253-0967
805-253-0196
- ------------------------------------------------------------------------------------------------------------------------------------
Fire Sprinkler Conejo Fire Protection Inc. Jerry
System/Repairs 2225 1st St. #104 805-583-1777
Simi Valley, Ca 93065
- ------------------------------------------------------------------------------------------------------------------------------------
Fire Mike Green Fire Protection 213-870-5700
Extinguishers P.O. Box 34756
Los Angeles, Ca 90034
- ------------------------------------------------------------------------------------------------------------------------------------
Flags Flags & Banners 818-348-9880
22104 Ventura Blvd.
Woodland Hills, Ca 91364
- ------------------------------------------------------------------------------------------------------------------------------------
Glass Chaparral Glass & Screen Jim
38917 20th St. E., #105A 805-274-9004
Palmdale, Ca 93550
- ------------------------------------------------------------------------------------------------------------------------------------
HVAC Mission Air Roger Monthly Contract and
6706 Bovey Ave. 800-417-1124 service/repairs needed
Reseda, Ca 91335 818-757-0231
- ------------------------------------------------------------------------------------------------------------------------------------
Janitorial Peerless Building Maintenance 3/29/94-M-to-M 30 days written Tim Tuttle - owner Monthly Contract
10537 Glenoaks Blvd., Unit C notice Jean nightly service
Pacoima, CA 91331 818-834-0297 Sunday to Thursdays
800-640-1332 $2,956 per month
818-834-9478 fax Mano-P-542-8575
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 51
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Landscaping L&W Landscape 6/1/96 M-to-M 30 days written notice. Gary Ripling Monthly Contract
Exterior 4421 Adam Road 805-527-5120
Simi Valley, CA 93063
- ---------------------------------------------------------------------------------------------------------------------------------
Landscaping Mrs. Greenjeans 2/1/90 M-to-M 30 days written notice. Mary $100 per month
Interior 26414 Pheasant Ct. 805-296-4035
Valencia, CA 91355
- ---------------------------------------------------------------------------------------------------------------------------------
Lighting Amtech Lighting 2/1/97 to 2/1/98 60 days written notice. Vivian Sandoval Monthly contract
1627 Chico Avenue 818-442-0886 exterior lights
South El Monte, CA 91733 818-448-4192 fax
- ---------------------------------------------------------------------------------------------------------------------------------
Locksmith Clarks Locksmith Services Rick Clark General Locksmith
P.O. Box 2396 805-252-2996 Has master key
Santa Clarita, CA 91350
- ---------------------------------------------------------------------------------------------------------------------------------
Pest Control Chemco Pest Control 6/4/97 to 6/4/98 60 days written notice. 818-984-2803 Acct. #20276
5683 Whitnall Highway 805-251-7378 Service on 3rd Fri.
N. Hollywood, CA 91601 Ron - Technician of month
818-412-0257 pager Route #14
Amber (Serv.) $131.30 per month
Larry (Tech.)
- ---------------------------------------------------------------------------------------------------------------------------------
Plumbing Heys Plumbing Jim Heys or Dale
24730 Ave. Tibbits, #120 805-296-3240
Valencia, CA 91355 805-294-9394 Fax
818-362-4570 Alt.
- ---------------------------------------------------------------------------------------------------------------------------------
Reg 4 Testing JCW Fire Systems 818-842-3860
984 Riverside Drive, #10 818-562-1359 Fax
Burbank, CA 91506
- ---------------------------------------------------------------------------------------------------------------------------------
Roofing GES Roofing Bobby Russo or Contract for semi-
801 South Flower Street Gary Stewart annual maintenance
Burbank, CA 91502 818-843-0544 and free leak calls
818-843-7132 Fax and repairs.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 52
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Rubbish Valencia Disposal 1/10/97 to 1/10/98 30 days written notice. Ray Woods or Mon,Wed,Fri.-
P.O. Box 1163 Linda pickups
Agoura Hills, CA 91376- 805-254-1547 (Two 3 yd bins)
1163 $319 per month
Recycle - Mon. &
Thu.
- ---------------------------------------------------------------------------------------------------------------------------------
Security Golden West K-9 3/5/97 to 8/5/98 30 days written notice. Tim Leonard - Rep 4 patrols per 12
12502 Van Nuys Blvd., Pager 818-902-8223 hour period seven
Suite 215 Lou Page - Manager days a week
Pacoima, CA 91331 805-294-8160 $462.00 per month.
805-294-8188 fax
818-897-5965 24
hour #
- ---------------------------------------------------------------------------------------------------------------------------------
Sweeping Nobil's Power Sweeper Frank Nobil Monthly sweeping
24833 Peachland Avenue 805-255-6462 $72.00 per month
Newhall, CA 91321
- ---------------------------------------------------------------------------------------------------------------------------------
Window Wash The New Porter 4/11/97 - M-to-M Cancel at anytime. 800-558-1575 Semi-Annual
1126 E. 17th Street 714-558-1572 Fax cleaning
Santa Ana, CA 92701
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 53
SCHEDULE 7.19
-------------
DISCLOSURES REGARDING AFFILIATES
--------------------------------
Seller has no Affiliate Disclosures.
<PAGE> 54
SCHEDULE 8.5
------------
NONE
<PAGE> 55
SCHEDULE 8.6
NONE
<PAGE> 56
SCHEDULE 8.19
NONE
<PAGE> 1
EXHIBIT 10.9
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of December 22, 1997, by and between
MATTERHORN USA, INC., a Delaware corporation ("Seller"), and ARDEN REALTY
LIMITED PARTNERSHIP, a Maryland limited partnership ("Purchaser").
In consideration of the mutual covenants and representations herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1.
PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, Seller hereby
agrees to sell and convey to Purchaser, and Purchaser hereby agrees to purchase
from Seller, all of Seller's assignable and transferable right, title and
interest in and to the following described property (herein collectively called
the "Property"):
(a) Land. That certain tract of land (the "Land") located in
the City of Beverly Hills, Los Angeles County, California, being
more particularly described on Exhibit A attached hereto.
(b) Easements. All easements, if any, benefiting the Land or
the Improvements (as hereinafter defined).
(c) Rights and Appurtenances. All rights and appurtenances
pertaining to the Land, including any right, title and interest of
Seller in and to adjacent streets, alleys or rights-of-way.
(d) Improvements. All improvements and related amenities (the
"Improvements") in and on the Land.
(e) Leases. All leases (the "Leases") of space in the
Improvements shown on the Rent Roll attached as Exhibit J hereto
(the "Rent Roll") or entered into after the date of this Agreement
with the approval of Purchaser and all tenant security deposits held
by Seller on the Closing Date (as hereinafter defined).
(f) Tangible Personal Property. All appliances, fixtures,
equipment, machinery, furniture, carpet, drapes and other personal
property, if any, owned by Seller and located on or about the Land
and the Improvements (the "Tangible Personal Property").
(g) Contracts. To the extent assignable without the consent
of third parties, the Contracts (as hereinafter defined).
<PAGE> 2
(h) Intangible Property. To the extent assignable, at no cost
or expense to Seller and without the consent of third parties, all
intangible property (the "Intangible Property"), if any, owned by
Seller and pertaining to the Land, the Improvements or the Tangible
Personal Property including, without limitation, transferable
utility contracts, transferable telephone exchange numbers, plans
and specifications, engineering plans and studies, floor plans and
landscape plans.
2.
PURCHASE PRICE
The purchase price (the "Purchase Price") for the Property shall be
SIXTY-FIVE MILLION AND NO/100 DOLLARS ($65,000,000) and shall be paid in cash by
Purchaser to Seller at the Closing (as hereinafter defined) by wire transfer in
accordance with wire transfer instructions to be provided by Seller.
3.
EARNEST MONEY
Seller hereby acknowledges receipt from Purchaser of a cashier's
check in the amount of ONE MILLION DOLLARS ($1,000,000) payable to Title Company
(as hereinafter defined). Purchaser shall deliver into escrow with Title Company
within one (1) business day after the date a fully executed copy of this
Agreement, together with the cashier's check, is delivered to Title Company by
Seller, by wire transfer in accordance with wire transfer instructions provided
by Title Company, the amount of NINE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($950,000) (which amount wired, and the amount of such cashier's check, together
with all interest accrued thereon, if any, is herein called the "Earnest Money")
to be invested by Title Company in an interest-bearing account as Purchaser and
Seller shall direct. Seller shall have the option of terminating this Agreement
if the full amount of Earnest Money is not delivered to Title Company as
prescribed in this Section 3. Purchaser agrees to promptly deliver or cause
Title Company to deliver to Seller written acknowledgment by Title Company that
the executed copy of this Agreement and the Earnest Money have been received by
and are being held by Title Company pursuant to the terms of this Agreement. If
the sale of the Property is consummated under this Agreement, the Earnest Money
shall be applied to the payment of the Purchase Price at Closing. If Purchaser
timely terminates this Agreement in accordance with any right to terminate
granted to Purchaser by the terms of this Agreement, the Earnest Money, less any
cancellation fees and costs of Title Company, shall be promptly returned to
Purchaser, and no party hereto shall have any further obligations under this
Agreement, except for such obligations which by their terms expressly survive
the termination of this Agreement (the "Surviving Obligations"). Purchaser
agrees to deliver to Seller copies of all Reports (as hereinafter defined) at
the time the notice to terminate this Agreement is given. The obligation to
deliver the Reports shall survive the termination of this Agreement.
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4.
DOCUMENTS; REPRESENTATIONS
4.1 Documents. Purchaser hereby acknowledges that Seller has made
various documents including, without limitation, the following documents
available for review by Purchaser and that Purchaser has reviewed and approved
same:
(a) Title Commitment. A preliminary title report or title
commitment for an owner's policy of title insurance (the "Title
Commitment") with respect to the Property, issued by Title Company,
and legible copies of any restrictive covenants, easements and other
items listed as title exceptions therein.
(b) Survey. A current as-built survey of the Property (the
"Survey") showing the location of all of the Improvements, prepared
by a licensed surveyor.
(c) Engineering Reports. Engineering and/or architectural
reports relating to the structure and building systems of the
Improvements.
(d) Earthquake Guide. A copy of the Commercial Property
Owner's Guide to Earthquake Safety (as described in California
Business and Professions Code Section 10147), receipt of which copy
is hereby acknowledged by Purchaser.
(e) Contracts. Copies of all contracts pertaining to the
Property, and not cancelable on thirty (30) days' notice without
penalty or premium (the "Contracts") including, but not limited to,
management contracts, service contracts, equipment leases and
maintenance contracts, to the extent in the possession of Seller.
(f) Rent Roll. A rent roll describing all Leases of space in
the Improvements as of the last month Seller has received such
information from the property manager of the Property; provided,
however, that, except as may hereafter be expressly provided, at no
time shall Seller be deemed to have made any representation or
warranty with respect to the accuracy, validity or correctness of
the information contained in such rent roll.
(g) Leases. Copies of the Leases shown on the Rent Roll.
(h) Phase I and Phase II. A Phase I environmental inspection
report and a Phase II environmental inspection report relating to
the Property.
(i) ACM Notice. A notice from Seller to Purchaser,
substantially in the form attached hereto as Exhibit C (the "ACM
Notice").
4.2 Inspection. Purchaser has inspected and tested (a) the Property,
(b) all financial records pertaining to the operation of the Property, and (c)
photocopies of all Leases and Contracts in the possession of Seller. Any further
right of inspection or testing by Purchaser shall be subject to the prior
written consent of Seller, which may be withheld in Seller's sole
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discretion; provided, however, that Purchaser's obligations under this Agreement
shall not be subject to its approval of or satisfaction with such inspection or
testing or the results thereof, and Seller shall have no obligation to take any
steps, bring any action or proceeding, or incur any effort or expense whatsoever
to eliminate, modify or cure any objection Purchaser may have under this
Agreement. In any event, Seller and its representatives, agents and/or
contractors shall have the right to be present during any such inspection or
testing. Any and all information heretofore or hereafter provided by Seller to
Purchaser or obtained by Purchaser relating to the Property including, without
limitation, any environmental assessment or audit (collectively, the "Reports")
shall be treated as confidential information by Purchaser, and Purchaser shall
instruct all of its employees, agents, representatives and contractors as to the
confidentiality of all such information. Purchaser shall restore the Property to
its condition existing immediately prior to Purchaser's inspection or testing
thereof, and Purchaser shall be liable for all damage or injury to any person or
property resulting from, relating to or arising out of any such inspection or
testing, whether occasioned by the acts of Purchaser or any of its employees,
agents, representatives or contractors. Purchaser shall protect, indemnify,
defend and hold the Property, Seller and GE Capital Realty Group, Inc. and their
respective officers, directors, shareholders, participants, affiliates,
employees, representatives, invitees, agents and contractors free and harmless
from and against any and all claims, damages, liens, stop notices, liabilities,
losses, costs and expenses, including reasonable attorneys' fees and court costs
(collectively, "Liabilities"), resulting from Purchaser's inspection and testing
of the Property including, without limitation, repairing any and all damages to
any portion of the Property, arising out of or related (directly or indirectly)
to Purchaser's conducting of such inspections, tests and studies, even if such
Liabilities are caused by the concurrent negligence of Seller. Purchaser shall
keep the Property free and clear of any mechanics' liens or materialmen's liens
related to Purchaser's right of inspection and the activities contemplated by
this Section 4.2. This indemnification by Purchaser shall survive the Closing or
the termination of this Agreement, as applicable.
4.3 Purchaser's Representations and Warranties. Purchaser represents
and warrants to Seller that (a) Purchaser is an entity of the type indicated in
the opening paragraph hereof, is duly organized and in good standing under the
laws of the state of its formation, is qualified to do business in the State of
California, and has the power to enter into this Agreement and to execute and
deliver this Agreement and to perform all duties and obligations imposed upon it
hereunder, and Purchaser has obtained all necessary authorizations required in
connection with the execution, delivery and performance contemplated by this
Agreement and has obtained the consent of all entities and parties necessary to
bind Purchaser to this Agreement; and (b) neither the execution nor the delivery
of this Agreement, nor the consummation of the purchase and sale contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement conflict with or shall result in the breach of any of the terms,
conditions or provisions of any agreement or instrument to which Purchaser, or
any partner or related entity or affiliate of Purchaser, is a party or by which
Purchaser, or any partner or related entity or affiliate of Purchaser, or any of
Purchaser's assets, is bound; and (c) neither Purchaser nor any partner, related
entity or affiliate of Purchaser is in any way affiliated with MIF Gen-Par L.P.,
MIF Sponsor, Inc., JE Robert Company, Goldman Sachs & Co., GE Capital Realty
Group, Inc., General Electric Capital Corporation, General Electric Realty
Advisors, Inc., General Electric Company or any affiliate of General Electric
Company; and (d) that, with respect to each source of funds to be used by it to
purchase the Property (respectively, the "Source"), at least one of the
following statements shall be accurate as of the Closing Date: (i) the Source
does
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not include the assets of (A) an "employee benefit plan" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to Title I of ERISA, or (B) a "plan" as defined in
Section 4975(a) of the Internal Revenue Code of 1986, as amended ("Code"), or
(ii) the Source includes the assets of (A) an "employee benefit plan" as defined
in Section 3(3) of ERISA or (B) a "plan" as defined in Section 4975(a) of the
Code (each of which has been identified to the Seller in writing pursuant to
this Section 4.3 at least ten (10) business days prior to the Closing Date), but
the use of such Source to purchase the Property shall not result in a nonexempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code;
and (e) Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks relating to its
purchase of the Property and making an informed purchase and investment decision
in connection therewith; and (f) Purchaser has made such examination, review and
investigation of the facts and circumstances necessary to evaluate the Property
as it has deemed necessary or appropriate to form a basis for its evaluation of
a purchase of the Property; and (g) Purchaser acknowledges that Purchaser has
the financial wherewithal to purchase and own the Property. The Purchaser's
representations and warranties set forth in this Section 4.3 shall survive the
Closing and delivery of the Deed (as hereinafter defined) or termination of this
Agreement. Purchaser's representations and warranties contained herein must be
true and correct through the Closing Date, and Purchaser's failure to notify
Seller in writing prior to the Closing Date of any inaccuracies shall be a
default by Purchaser under this Agreement.
4.4 Seller's Representations and Warranties. Seller makes the
following representations and warranties to Purchaser, upon which warranties and
representations Purchaser has relied and shall continue to rely:
(a) Seller has the full right, power and authority, without
the joinder of any other person or entity, to enter into, execute
and deliver this Agreement, and to perform all duties and
obligations imposed on Seller under this Agreement;
(b) Neither the execution nor the delivery of this Agreement,
nor the consummation of the purchase and sale contemplated hereby,
nor the fulfillment of or compliance with the terms and conditions
of this Agreement conflict with or shall result in the breach of any
of the terms, conditions or provisions of any agreement or
instrument to which Seller is a party or by which Seller or any
asset of Seller is bound;
(c) Based solely on the current actual knowledge of Mark
Williams of G.E. Capital Realty Group, the asset manager of the
Property, and Catherine Atkins of Tooley & Company, the property
manager of the Property, without investigation or inquiry by, or
personal liability on the part of, such individuals or such
employers.
(1) There are no leases or other agreements for the
use or occupancy of the Improvements or the Land, including
but not limited to storage agreements, telecommunications
license agreements and parking agreements, which shall affect
or be obligations of Purchaser or the Property or any portion
thereof following the Closing, except the agreements shown
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on the Rent Roll with the tenants shown thereon
(individually, a "Tenant") or hereafter entered into with the
approval of Purchaser. The Rent Roll is true, correct,
accurate and complete in all material respects. The Leases
executed by Seller have been duly authorized and executed by
Seller as the landlord thereunder. Neither Seller's interest
in the Leases nor any of the rentals or other sums due or to
become due under the Leases shall, as of the Closing, be
assigned to any third party. True and correct copies of the
Leases and all amendments, guaranties and other documents
relating thereto, as shown on the Rent Roll, have been
delivered or made available to Purchaser. The past due rent
with respect to the Leases is listed in the schedule attached
as Exhibit I hereto.
(2) Except as set forth on Exhibits H-1, H-2 and H-3,
there are no broker's commissions or finder's fees payable in
connection with the Leases or any extension of the Leases,
increases in rent under the Leases, or expansion of any
existing premises being leased pursuant to the Leases.
(3) Except as set forth on Exhibits H-1, H-2 and H-3,
there are no outstanding obligations of Seller to make any
tenant improvements to any premises under any of the Leases
or to pay any tenant improvement allowance to any tenant
thereunder.
(4) There are no service contracts, art contracts,
leasing listing agreements, landscaping contracts, equipment
leases, maintenance agreements, management agreements, open
purchase orders and other contracts for the provision of
labor, services, materials or supplies to or for the benefit
of the Property which are not cancelable on thirty (30) days'
notice without penalty or premium, other than the contracts
shown on the Schedule of Contracts attached as Exhibit K
hereto or hereafter entered into with the approval of
Purchaser, which approval shall not be unreasonably withheld
or delayed. No parties to said contracts are in material
default thereunder. True and correct copies of said contracts
have been delivered or made available to Purchaser.
(5) There is no pending or threatened litigation
against Seller relating to the Property or any portion
thereof, other than that certain lawsuit filed by Casandra
Boston against Seller, Purchaser and other defendants based
on a claim that Ms. Boston was injured by an elevator
door(s), which lawsuit is being defended by the liability
insurance carrier for the Improvements.
(6) Seller has not been notified in writing by any
governmental authority that the Property is in violation of
or is being investigated respecting the violation of any
federal, state or local law, ordinance or regulation,
including but not limited to those relating to industrial
hygiene or to the environmental conditions on, under or about
the Property, including but not limited to soil and
groundwater condition.
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Notwithstanding any contrary provision in this Agreement, Seller's
representations, warranties and covenants (including, without limitation, any
indemnification obligation of Seller) in this Agreement and in any estoppel
certificate executed and delivered by Seller shall survive the Closing for a
period of only six (6) months, and Seller's liability for any and all breaches
thereof shall not exceed ONE MILLION AND NO/100 DOLLARS ($1,000,000) in the
aggregate.
4.5 Defective Condition Extension; Termination. The obligations of
Seller hereunder are subject to and contingent upon the following. In the event
that subsequent to the execution of this Agreement, Seller obtains knowledge of
either (i) the presence of a material amount of any Hazardous Materials (as
hereinafter defined) or the material violation or potential violation of any
Environmental Requirements (as hereinafter defined) or (ii) any material
structural or other defect in the Improvements, whether or not in violation of
any applicable law, ordinance, code, regulation or decree of any governmental
authority having jurisdiction over the Property, which Seller, in its sole
judgment, determines could constitute a potential liability to Seller after the
Closing or should be remedied prior to the sale of the Property, Seller shall
have the right, in its sole discretion, upon written notice to Purchaser on or
before the scheduled Closing Date, (i) to extend the Closing Date for the period
of time necessary to complete such remediation at Seller's sole cost and
expense, or (ii) to terminate this Agreement upon written notice to Purchaser,
in which event the Earnest Money shall be refunded to Purchaser and neither
party shall have any further right or obligation hereunder other than the
Surviving Obligations. The terms of this Section 4.5 are solely for the benefit
of Seller, and Purchaser shall have no additional right or remedy hereunder as a
result of the exercise by Seller of its rights under this Section.
5.
NO REPRESENTATIONS OR WARRANTIES BY SELLER;
ACCEPTANCE OF PROPERTY; RELEASE OF SELLER
5.1 Disclaimer. PURCHASER ACKNOWLEDGES AND AGREES THAT EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO (A) THE VALUE, NATURE, QUALITY OR CONDITION OF THE
PROPERTY INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (B) ANY
INCOME TO BE DERIVED FROM THE PROPERTY; (C) THE SUITABILITY OF THE PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER OR ANY TENANT MAY CONDUCT
THEREON; (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY
LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY
OR BODY; (E) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY (PURCHASER AFFIRMING THAT
PURCHASER HAS NOT RELIED ON SELLER'S SKILL OR JUDGMENT TO SELECT OF FURNISH THE
PROPERTY FOR ANY PARTICULAR PURPOSE, AND THAT SELLER MAKES NO WARRANTY THAT THE
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PROPERTY IS FIT FOR ANY PARTICULAR PURPOSE); (F) THE MANNER OR QUALITY OF THE
CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (G) THE
MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (H)
COMPLIANCE WITH ANY ENVIRONMENTAL REQUIREMENTS, ENVIRONMENTAL REQUIREMENTS,
ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS
OR OTHER REQUIREMENTS INCLUDING THE EXISTENCE IN, ON, UNDER OR IN THE VICINITY
OF THE PROPERTY OF HAZARDOUS MATERIALS; (I) ZONING TO WHICH THE PROPERTY OR ANY
PORTION THEREOF MAY BE SUBJECT; (J) THE AVAILABILITY OF ANY UTILITIES TO THE
PROPERTY OR ANY PORTION THEREOF INCLUDING, WITHOUT LIMITATION, WATER, SEWAGE,
GAS AND ELECTRICITY; (K) USAGES OF ANY ADJOINING PROPERTY; (L) ACCESS TO THE
PROPERTY OR ANY PORTION THEREOF; (M) THE VALUE, COMPLIANCE WITH PLANS AND
SPECIFICATIONS, SIZE, LOCATION, AGE, USE, DESIGN, QUALITY, DESCRIPTION,
DURABILITY, STRUCTURAL INTEGRITY, OPERATION, TITLE TO OR PHYSICAL OR FINANCIAL
CONDITION OF THE PROPERTY OR ANY PORTION THEREOF, OR ANY INCOME, EXPENSES,
CHARGES, LIENS, ENCUMBRANCES, RIGHTS OR CLAIMS ON OR AFFECTING OR PERTAINING TO
THE PROPERTY OR ANY PART THEREOF; (N) THE CONDITION OR USE OF THE PROPERTY OR
COMPLIANCE OF THE PROPERTY WITH ANY OR ALL PAST, PRESENT OR FUTURE FEDERAL,
STATE OR LOCAL ORDINANCES, RULES, REGULATIONS OR LAWS, BUILDING, FIRE OR ZONING
ORDINANCES, CODES OR OTHER SIMILAR LAWS; (O) THE EXISTENCE OR NON-EXISTENCE OF
UNDERGROUND STORAGE TANKS; (P) ANY OTHER MATTER AFFECTING THE STABILITY OR
INTEGRITY OF THE LAND OR IMPROVEMENTS; (Q) THE POTENTIAL FOR FURTHER DEVELOPMENT
OF THE PROPERTY; (R) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
ENTITLEMENTS AFFECTING THE PROPERTY; OR (S) ANY OTHER MATTER WITH RESPECT TO THE
PROPERTY. ADDITIONALLY, NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO
MAKE, AND BY EXECUTION HEREOF PURCHASER ACKNOWLEDGES THAT NO PERSON HAS MADE,
ANY REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR PROMISE
REGARDING THE PROPERTY OR THE TRANSACTION CONTEMPLATED HEREIN; AND NO SUCH
REPRESENTATION, AGREEMENT, STATEMENT, WARRANTY, GUARANTY OR PROMISE, IF ANY,
MADE BY ANY PERSON ACTING ON BEHALF OF SELLER SHALL BE VALID OR BINDING UPON
SELLER UNLESS EXPRESSLY SET FORTH HEREIN. PURCHASER FURTHER ACKNOWLEDGES AND
AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT ALL ASPECTS OF THE
PROPERTY INCLUDING, WITHOUT LIMITATION, ALL PHYSICAL AND FINANCIAL ASPECTS OF
THE PROPERTY, PURCHASER IS, EXCEPT FOR THE WARRANTIES, REPRESENTATIONS AND
COVENANTS OF SELLER EXPRESSLY PROVIDED IN THIS AGREEMENT, RELYING SOLELY ON ITS
OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE
PROVIDED BY SELLER (INCLUDING, IF APPLICABLE, WITHOUT LIMITATION, THE ACM
NOTICE) AND AGREES TO ACCEPT THE PROPERTY AT THE CLOSING AND, EXCEPT AS MAY
HEREAFTER BE EXPRESSLY PROVIDED, WAIVE ALL OBJECTIONS OR CLAIMS AGAINST SELLER
(INCLUDING, BUT NOT LIMITED TO, ANY RIGHT OR CLAIM OF CONTRIBUTION) ARISING FROM
OR RELATED TO THE PROPERTY OR TO ANY
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HAZARDOUS MATERIALS ON THE PROPERTY. PURCHASER FURTHER ACKNOWLEDGES AND AGREES
THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY WAS
OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT
INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS
AS TO THE ACCURACY, TRUTHFULNESS OR COMPLETENESS OF SUCH INFORMATION. SELLER
SHALL NOT BE LIABLE FOR ANY NEGLIGENT MISREPRESENTATION OR ANY FAILURE TO
INVESTIGATE THE PROPERTY NOR SHALL SELLER BE LIABLE OR BOUND IN ANY MANNER BY
ANY VERBAL OR WRITTEN STATEMENT, REPRESENTATION OR INFORMATION PERTAINING TO THE
PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY SELLER OR ANY REAL ESTATE
BROKER, CONTRACTOR, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF
THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS-IS, WHERE-IS" CONDITION
AND BASIS WITH ALL FAULTS. IT IS UNDERSTOOD AND AGREED THAT THE PROPERTY IS SOLD
BY SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING AND THAT THE
PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATION TO REFLECT THAT ALL OF THE
PROPERTY IS SOLD BY SELLER AND PURCHASED BY PURCHASER SUBJECT TO THE FOREGOING.
PURCHASER HEREBY AGREES TO INDEMNIFY, PROTECT, DEFEND, SAVE AND HOLD HARMLESS
SELLER FROM AND AGAINST ANY AND ALL DEBTS, DUTIES, OBLIGATIONS, LIABILITIES,
SUITS, CLAIMS, DEMANDS, CAUSES OF ACTION, DAMAGES, LOSSES, FEES AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND EXPENSES AND COURT COSTS) IN
ANY WAY RELATING TO, OR IN CONNECTION WITH OR ARISING OUT OF, PURCHASER'S
INSPECTION, ACQUISITION, OWNERSHIP, LEASING, USE, OPERATION, MAINTENANCE AND
MANAGEMENT OF THE PROPERTY. THE PROVISIONS OF THIS SECTION 5 SHALL SURVIVE THE
CLOSING OR ANY TERMINATION HEREOF.
5.2 Hazardous Materials. "Hazardous Materials" shall mean any
substance which is or contains any "hazardous substance" as now or hereafter
defined in Section 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et
seq.) ("CERCLA") or any regulations promulgated under CERCLA; any "hazardous
waste" as now or hereafter defined in the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 et seq.) ("RCRA") or regulations promulgated under RCRA;
any substance regulated by the Toxic Substances Control Act (15 U.S.C. Section
2601 et seq.); gasoline, diesel fuel or other petroleum hydrocarbons; asbestos
and asbestos-containing materials, in any form, whether friable or non-friable;
polychlorinated biphenyls; radon gas; and any additional substances or materials
which are now or hereafter classified or considered to be hazardous or toxic
under Environmental Requirements or common law, or any other applicable laws
relating to the Property. Hazardous Materials shall include, without limitation,
any substance, the presence of which on the Property (A) requires reporting,
investigation or remediation under Environmental Requirements; (B) causes or
threatens to cause a nuisance on the Property or adjacent property or poses or
threatens to pose a hazard to the health or safety of persons on the Property or
adjacent property; or (C) which, if it emanated or migrated from the Property,
could constitute a trespass.
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5.3 Environmental Requirements. "Environmental Requirements" shall
mean all laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders and decrees, now or hereafter enacted, promulgated or amended,
of the United States, the states, the counties, the cities or any other
political subdivisions in which the Property is located, and any other political
subdivision, agency or instrumentality exercising jurisdiction over the owner of
the Property, the Property or the use of the Property, relating to pollution,
the protection or regulation of human health, natural resources or the
environment or the emission, discharge, release or threatened release of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or waste or Hazardous Materials into the environment (including, without
limitation, ambient air, surface water, ground water or land or soil).
5.4 PURCHASER'S WAIVER AND RELEASE. AS PART OF PURCHASER'S AGREEMENT
TO PURCHASE AND ACCEPT THE PROPERTY "AS-IS, WHERE-IS", AND NOT AS A LIMITATION
ON SUCH AGREEMENT, PURCHASER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
AND ALL ACTUAL OR POTENTIAL RIGHTS PURCHASER MIGHT HAVE REGARDING ANY FORM OF
WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND OR TYPE, RELATING TO THE PROPERTY OR
ANY OF THE MATTERS REFERRED TO IN SECTION 5.1 ABOVE (SUCH WARRANTY AND MATTERS
ARE HEREINAFTER REFERRED TO AS THE "PROPERTY CONDITION"). SUCH WAIVER IS
ABSOLUTE, COMPLETE, TOTAL AND UNLIMITED IN ANY WAY. SUCH WAIVER INCLUDES, BUT IS
NOT LIMITED TO, A WAIVER OF EXPRESS WARRANTIES, IMPLIED WARRANTIES, WARRANTIES
OF FITNESS FOR A PARTICULAR USE, WARRANTIES OF MERCHANTABILITY, WARRANTIES OF
HABITABILITY, STRICT LIABILITY RIGHTS, AND CLAIMS, LIABILITIES, DEMANDS OR
CAUSES OF ACTION OF EVERY KIND AND TYPE, WHETHER STATUTORY, CONTRACTUAL OR UNDER
TORT PRINCIPLES, AT LAW OR IN EQUITY INCLUDING, BUT NOT LIMITED TO, CLAIMS
REGARDING DEFECTS WHICH MIGHT HAVE BEEN DISCOVERABLE, CLAIMS REGARDING DEFECTS
WHICH WERE NOT OR ARE NOT DISCOVERABLE, PRODUCT LIABILITY CLAIMS, PRODUCT
LIABILITY TYPE CLAIMS, ALL OTHER EXTANT OR LATER CREATED OR CONCEIVED OF STRICT
LIABILITY OR STRICT LIABILITY TYPE CLAIMS AND RIGHTS, AND ANY CLAIMS UNDER
CERCLA OR OTHER ENVIRONMENTAL REQUIREMENTS. NOTWITHSTANDING THE FOREGOING,
SELLER SHALL ASSIGN TO PURCHASER ALL OF ITS RIGHT, TITLE AND INTEREST IN AND TO
ALL EXISTING ASSIGNABLE MANUFACTURERS' WARRANTIES AFFECTING PERSONAL PROPERTY
INSTALLED IN OR ON THE PROPERTY, IF ANY, BUT SELLER SHALL HAVE NO INDEPENDENT
DUTIES WITH REGARD TO SAME. EFFECTIVE UPON THE CLOSING DATE, AND TO THE FULLEST
EXTENT PERMITTED BY LAW, PURCHASER HEREBY RELEASES, DISCHARGES AND FOREVER
ACQUITS SELLER AND EVERY ENTITY AFFILIATED WITH SELLER, ITS PARTNERS, ASSET
MANAGERS, SUBASSET MANAGERS, PROPERTY MANAGERS AND ALL OF THEIR OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, ATTORNEYS, PARTNERS AND INDEPENDENT
CONTRACTORS AND THE SUCCESSOR OF EACH AND EVERY ONE OF THEM FROM ALL DEMANDS,
CLAIMS, LIABILITIES, OBLIGATIONS, COSTS AND EXPENSES WHICH PURCHASER MAY SUFFER
OR INCUR RELATING TO THE PROPERTY CONDITION OR ANY OTHER ASPECT OF THE PROPERTY,
EXCEPT FOR CLAIMS BASED UPON ANY BREACH OF THE WARRANTIES, REPRESENTATIONS
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AND COVENANTS OF SELLER EXPRESSLY PROVIDED IN THIS AGREEMENT (INCLUDING BUT NOT
LIMITED TO ANY INDEMNIFICATION OBLIGATION OF SELLER EXPRESSLY PROVIDED IN THIS
AGREEMENT) AND ANY STATUTORY RIGHTS OF CONTRIBUTION WITH RESPECT TO THE
ENVIRONMENTAL CONDITION OF THE PROPERTY. AS PART OF THE PROVISIONS OF THIS
SECTION 5.4, BUT NOT AS A LIMITATION THEREON, PURCHASER HEREBY AGREES,
REPRESENTS AND WARRANTS THAT THE MATTERS RELEASED HEREIN ARE NOT LIMITED TO
MATTERS WHICH ARE KNOWN OR DISCLOSED, AND PURCHASER HEREBY WAIVES ANY AND ALL
RIGHTS AND BENEFITS WHICH IT NOW HAS, OR IN THE FUTURE MAY HAVE CONFERRED UPON
IT, BY VIRTUE OF THE PROVISIONS OF FEDERAL, STATE OR LOCAL LAW, RULES OR
REGULATIONS INCLUDING, WITHOUT LIMITATION, SECTION 1542 OF THE CIVIL CODE OF THE
STATE OF CALIFORNIA, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
IN THIS CONNECTION AND TO THE EXTENT PERMITTED BY LAW, PURCHASER HEREBY AGREES,
REPRESENTS AND WARRANTS THAT PURCHASER REALIZES AND ACKNOWLEDGES THAT FACTUAL
MATTERS NOW UNKNOWN TO IT MAY HAVE GIVEN OR MAY HEREAFTER GIVE RISE TO CAUSES OF
ACTION, CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND
EXPENSES WHICH ARE PRESENTLY UNKNOWN, UNANTICIPATED AND UNSUSPECTED, AND
PURCHASER FURTHER AGREES, REPRESENTS AND WARRANTS THAT THE WAIVERS AND RELEASES
HEREIN HAVE BEEN NEGOTIATED AND AGREED UPON IN LIGHT OF THAT REALIZATION AND
THAT PURCHASER NEVERTHELESS HEREBY INTENDS TO RELEASE, DISCHARGE AND ACQUIT
SELLER AND THE OTHERS REFERRED TO ABOVE FROM ANY SUCH UNKNOWN CAUSES OF ACTION,
CLAIMS, DEMANDS, DEBTS, CONTROVERSIES, DAMAGES, COSTS, LOSSES AND EXPENSES WHICH
MIGHT IN ANY WAY BE INCLUDED IN THE WAIVERS AND MATTERS RELEASED AS SET FORTH IN
THIS SECTION 5.4. THE PROVISIONS OF THIS SECTION 5.4 ARE MATERIAL AND INCLUDED
AS A MATERIAL PORTION OF THE CONSIDERATION GIVEN TO SELLER BY PURCHASER IN
EXCHANGE FOR SELLER'S PERFORMANCE HEREUNDER. THE PROVISIONS OF THIS SECTION 5.4
SHALL SURVIVE THE CLOSING OF THE TRANSACTION CONTEMPLATED HEREUNDER OR THE
TERMINATION OF THIS AGREEMENT.
SELLER HAS GIVEN PURCHASER MATERIAL CONCESSIONS REGARDING THIS
TRANSACTION IN EXCHANGE FOR PURCHASER AGREEING TO THE PROVISIONS OF THIS SECTION
5.4. SELLER AND PURCHASER HAVE EACH INITIALED THIS SECTION 5.4 TO FURTHER
INDICATE THEIR AWARENESS AND ACCEPTANCE OF EACH AND EVERY PROVISION HEREOF.
/s/ VJC /s/ KRT
- --------------------- ------------------------
Purchaser's Initials Seller's Initials
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6.
CLOSING
6.1 Closing. Commonwealth Land Title Insurance Company ("Title
Company"), with offices located at 655 Third Avenue, New York, New York 10017,
Attention: William Deatly, shall cause the escrow to close (the "Closing") on
January 21, 1998 or such other date as to which the parties mutually agree in
writing (the "Closing Date").
6.2 Possession. Possession of the Property shall be delivered to
Purchaser at the Closing, subject to the Permitted Encumbrances (as hereinafter
defined). The term "Permitted Encumbrances" as used herein means: (i) any
easement, right of way, encroachment, conflict, discrepancy, overlapping of
improvements, protrusion, lien, encumbrance, restriction, condition, covenant,
exception or other matter with respect to the Property that is reflected or
addressed on the Survey or the Title Commitment; (ii) the rights and interests
of parties claiming under the Leases; (iii) non-delinquent real estate taxes and
assessments; and (iv) the standard printed exceptions set forth in the Owner's
Policy (as hereinafter defined).
6.3 Proration. All rents, other amounts payable by the tenants under
the Leases, income, utilities and all other operating expenses with respect to
the Property for the month in which the Closing occurs, and real estate and
personal property taxes and other assessments with respect to the Property for
the year in which the Closing occurs, shall be prorated with Seller receiving
the benefits and burdens of ownership until the Closing Date.
(a) If the Closing shall occur before rents and all other
amounts payable by the tenants under the Leases and all other income
from the Property have actually been paid for the month in which the
Closing occurs, the apportionment of such rents and other amounts
and other income shall be upon the basis of such rents, other
amounts and other income actually received by Seller. Subsequent to
the Closing, if any such rents and other income are actually
received by Purchaser, all such amounts shall first be applied to
post-closing rents due to Purchaser which are past due and the
balance shall be immediately paid by Purchaser to Seller. Purchaser
shall make a good faith effort and attempt to collect any such rents
and other amounts and other income not apportioned at the Closing
for the benefit of Seller; provided, however, that Purchaser shall
not be required to expend any funds or institute any litigation in
its collection efforts. Nothing in this paragraph shall restrict
Seller's right to collect delinquent rents directly from a tenant by
any legal means. The tenant security deposits held by Seller under
the Leases as of the Closing Date shall be credited against the
funds due from Purchaser at the Closing.
(b) All real estate taxes and assessments with respect to the
Property for the tax year in which the Closing Date shall occur
shall be prorated between Seller and Purchaser in the manner
described above in this Section 6.3, based on the latest tax bill
available as of the Closing. Subsequent to the Closing, the parties
hereto shall prorate as of the Closing (a) any taxes or assessments
imposed by supplemental bill not available as of the Closing and
levied by reason of any event occurring prior to the Closing, and
(b) any refund of taxes or assessments granted after the Closing.
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(c) If the Closing shall occur before the actual amount of
utilities and all other operating expenses with respect to the
Property for the month in which the Closing occurs are determined,
the apportionment of such utilities and other operating expenses
shall be upon the basis of an estimate by Seller of such utilities
and other operating expenses for such month. Subsequent to the
Closing, when the actual amount of such utilities and other
operating expenses with respect to the Property for the month in
which the Closing occurs are determined, the parties agree to adjust
the proration of such utilities and other operating expenses and, if
necessary, to refund or repay such sums as shall be necessary to
effect such adjustment.
(d) Additional rent for operating costs and taxes
("Escalations") owed by tenants shall be prorated as and when
collected. If, after Closing, Purchaser shall receive any
Escalations which are attributable in whole or in part to any period
prior to Closing and which are due Seller under the Lease in
question, Purchaser shall within thirty (30) day after receipt remit
such amount to Seller. All collections of such Escalations shall be
apportioned between Purchaser and Seller based upon the allocation
thereof equally over the period for which they are attributable. If,
after the Closing, based upon its estimated payments on account of
Escalations, any Tenant is or shall be entitled to be reimbursed for
the excess of such estimated payments over the Tenant's actual share
of Escalations, Seller shall, within thirty (30) days after demand,
remit such amount to Purchaser.
Purchaser shall indemnify, protect, defend and hold Seller harmless from and
against any and all claims by and liabilities to any third persons for payment
of any security deposits or fees for which Purchaser obtains a credit or which
Purchaser receives directly from Seller. The agreements of Seller and Purchaser
set forth in this Section 6.3 shall survive the Closing.
6.4 Closing Costs. Except as otherwise expressly provided herein,
Seller shall pay, on the Closing Date, one-half (1/2) of any escrow fees and
related charges of Title Company, and Purchaser shall pay, on the Closing Date,
all title insurance premiums and recording costs and one-half (1/2) of any
escrow fees and related charges of Title Company. In addition, Purchaser shall
pay, on the Closing Date, all documentary, conveyance, mortgage, transfer and
intangible taxes payable in connection with the Deed and the delivery of the
other documents provided or contemplated by this Agreement. Except as otherwise
provided herein, each party shall pay its own attorneys' fees.
6.5 Seller's Obligations at the Closing. At the Closing, Seller
shall deliver to Purchaser or the Title Company, as applicable, the following:
(a) Evidence of Authority. Such organizational and
authorizing documents of Seller as shall be reasonably required by
Title Company to evidence Seller's authority to consummate the
transactions contemplated by this Agreement.
(b) Deed. A Grant Deed (the "Deed") duly executed and
acknowledged by Seller, conveying all of Seller's right, title and
interest in and to the Land and the Improvements to Purchaser in the
form attached to this Agreement as Exhibit D.
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<PAGE> 14
(c) Bill of Sale. A Bill of Sale, Assignment and Assumption
Agreement in the form attached to this Agreement as Exhibit E (the
"Bill of Sale").
(d) Foreign Person. A certificate (the "Certification") of
Seller respecting the "non-foreign" status of Seller in the form set
forth in Exhibit F attached hereto or such other form as may be
required by Title Company.
(e) Escrow Documents. Other documents that may reasonably be
required by Title Company to close the escrow in accordance with the
terms of this Agreement, provided such documents do not impose upon
Seller any additional liability or obligation.
(f) Tenant Estoppel Certificates. The tenant estoppel
certificates required under Section 6.7(b)(2) of this Agreement.
(g) Rent Roll. An updated rent roll, which shall be true,
correct, accurate and complete in all material respects as of the
Closing Date, based solely on the then current actual knowledge of
Mark Williams of G.E. Capital Realty Group and Catherine Atkins of
Tooley & Company, without investigation or inquiry by, or personal
liability on the part of, such individuals or such employers.
(h) Owner's Affidavit and Mechanic's Lien Indemnity. Any
Owner's Affidavit required by Title Company, and if it shall be
necessary for Purchaser to obtain mechanic's lien coverage in the
Owner's Policy, any mechanic's lien indemnity in favor of Title
Company and required by Title Company with respect to work in
progress and recently completed work on the Property.
(i) Leases, Etc. The originals (or best available copies, if
no originals are available) of the Leases (including all documents
shown on the Rent Roll), the Contracts, the Property records, the
plans, specifications and drawings for the Improvements, operating
manuals for equipment, the licenses and permits for the Property,
construction warranties and guaranties and any and all other
documents and instruments in Seller's possession or control relating
to the Property, all of which may be delivered by Seller leaving the
same in the Property management office.
6.6 Purchaser's Obligations at the Closing. Not later than one (1)
business day prior to the Closing Date, Purchaser shall deposit the following
items into escrow with Title Company, each of which shall be duly executed and
acknowledged by Purchaser where appropriate:
(a) Purchase Price. The Purchase Price by wire transfer of
immediately available funds.
(b) Lease Expenses. Immediately available funds in an amount
equal to the reasonable direct costs and expenses incurred and paid
by Seller under any lease (or amendment) of space in the
Improvements, entered into after Purchaser's
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<PAGE> 15
execution hereof with the approval of Purchaser. Said costs and
expenses shall be limited to reasonable direct costs and expenses
incurred and paid by Seller for tenant improvements, broker's
commissions (and finder's fees), and any necessary base building or
other capital improvements with respect to such new leases.
Notwithstanding any contrary provision in this Agreement, Purchaser
shall pay through the escrow in immediately available funds all
costs reflected in the schedules attached as Exhibits H-1, H-2 and
H-3 hereto, to the extent that the transactions contemplated therein
are consummated on the terms set forth therein (or such other terms
as may be reasonably acceptable to Purchaser) and such costs are
advanced by Seller prior to the Closing; any such costs not so
advanced by Seller shall be paid directly by Purchaser after the
Closing.
(c) Evidence of Authority. Such organizational and
authorizing documents of Purchaser as shall be reasonably required
by Seller and/or Title Company authorizing Purchaser's acquisition
of the Property pursuant to this Agreement and the execution of this
Agreement and any documents to be executed by Purchaser at the
Closing.
(d) Taxpayer I.D. Certification. A Taxpayer I.D.
Certification in the form attached to this Agreement as Exhibit G.
(e) Bill of Sale. The Assumption attached to the Bill of
Sale.
(f) ACM Notice. The ACM Notice duly executed by Purchaser.
(g) Other Escrow Funds and Documents. All other funds and
documents as may reasonably be required by Title Company to close
the escrow in accordance with this Agreement.
6.7 Conditions to Closing.
(a) Seller's Conditions. In addition to the conditions
provided in other provisions of this Agreement, Seller's obligations
to perform its undertakings provided in this Agreement (including
its obligation to sell the Property) are conditioned on the
following:
(1) Performance by Purchaser. The due performance by
Purchaser of each and every undertaking and agreement to be
performed by it hereunder (including the delivery to Seller
of the items specified to be delivered by Purchaser in
Section 6.6 hereof) and the material truth of each
representation and warranty made by Purchaser in this
Agreement at the time as of which the same is made and as of
the Closing Date as if made on and as of the Closing Date.
(2) No Bankruptcy or Dissolution. That at no time on
or before the Closing Date shall any of the following have
occurred with respect to Purchaser or any of the general
partners of Purchaser if Purchaser is a
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<PAGE> 16
partnership: (i) the commencement of a case under Title 11 of
the U.S. Code, as now constituted or hereafter amended, or
under any other applicable federal or state bankruptcy law or
other similar law; (ii) the appointment of a trustee or
receiver of any property interest; (iii) an assignment for
the benefit of creditors; (iv) an attachment, execution or
other judicial seizure of a substantial property interest;
(v) the taking of, failure to take, or submission to any
action indicating an inability to meet its financial
obligations as they accrue; or (vi) a dissolution or
liquidation, death or incapacity.
(b) Purchaser's Conditions. Purchaser's obligations to
perform its undertakings provided in this Agreement (including its
obligation to buy the Property) are conditioned on the following:
(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
in all material respects.
(2) Tenant Estoppel Certificates. Purchaser shall have
received from Seller (a) estoppel certificates duly executed
by the Tenants in the form of Exhibit B-1 attached hereto and
completed in a manner reasonably satisfactory to Purchaser
and consistent in all material respects with the information
contained in the Rent Roll from all Tenants leasing five
thousand (5,000) rentable square feet or more of the
Improvements (excluding Purchaser) and from Tenants leasing
in the aggregate (with Purchaser) at least seventy percent
(70%) of the total leased square footage of the Improvements,
or (b) to the extent that such estoppel certificates are not
so received from such Tenants, estoppel certificates duly
executed by Seller with respect to such Tenants' Leases in
the form of Exhibit B-2 attached hereto and completed in a
manner reasonably satisfactory to Purchaser and consistent in
all material respects with the information contained in the
Rent Roll. Within ninety (90) days after the Closing Date,
Seller may substitute an estoppel certificate under clause
(a) above for any estoppel certificate under clause (b)
above, in which event Purchaser shall return the latter and
the latter shall be deemed to be of no force or effect.
Seller shall request estoppel certificates from all Tenants
of space in the Improvements.
(3) Owner's Policy. The Title Company shall have
issued the Owner's Policy or evidence reasonably satisfactory
to Purchaser that the Owner's Policy shall be issued promptly
after the Closing.
6.8 Owner's Policy. Purchaser shall be entitled to Title Company's
issuance (subject to the payment of the premium therefor) of an ALTA extended
coverage policy of title insurance (10-17-92) (the "Owner's Policy"), naming
Purchaser as insured, in the amount of the Purchase Price, insuring that the
Purchaser owns fee simple title to the Property, subject only to the Permitted
Encumbrances, together with such direct access reinsurance agreements in
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<PAGE> 17
amounts, form and with such reinsurers as Purchaser may reasonably require and
the Title Company shall approve (Purchaser shall have responsibility for
completing such reinsurance arrangements with the Title Company at least five
(5) business days prior to the Closing Date).
6.9 Documents to be Executed by Seller and Purchaser. At the
Closing, Seller and Purchaser shall also execute and deliver signed statements
or notices to all tenants of the Property notifying such tenants that the
Property has been transferred to Purchaser and that Purchaser is responsible for
security deposits (specifying the amounts of such deposits).
6.10 Delivery of Documents and Funds at Closing. Provided that any
and all conditions to closing set forth in this Agreement have been satisfied
or, as to any condition not satisfied, waived or deemed waived, or satisfied by
the party intended to be benefitted thereby, on the Closing Date Title Company
shall conduct the Closing by recording or distributing the following documents
and funds in the following manner:
(a) Record Documents. Record the Deed in the Official Records
of the County in which the Land is located;
(b) Purchaser's Documents. Deliver to Purchaser: (a) the
original Owner's Policy; (b) the original Certification; (c) an
original counterpart of the Bill of Sale executed by Seller; and (d)
any other documents received by the Title Company by, from or on
behalf of Seller for delivery to Purchaser upon the Closing;
(c) Seller's Documents. Deliver to Seller: (a) an original
counterpart of the Bill of Sale executed by Purchaser; (b) an
original Taxpayer's I.D. Certificate signed by Purchaser; and (c) a
copy of every other document;
(d) Purchase Price. Deliver to Seller the Purchase Price and
such other funds, if any, as may be due to Seller under this
Agreement, less the amount of all items chargeable to Seller under
Section 6.4 of this Agreement; and
(e) Owner's Policy. Deliver to Purchaser the Owner's Policy
or evidence reasonably satisfactory to Purchaser that the Owner's
Policy shall be issued promptly after the Closing.
7.
RISK OF LOSS
7.1 Condemnation. If, prior to the Closing, action is initiated to
take any material portion of the Property by eminent domain proceedings or by
deed in lieu thereof, Purchaser may terminate this Agreement by notice thereof
to Seller and Title Company prior to the Closing. If such portion so taken is
not material, or if Purchaser does not elect to so terminate this Agreement, the
Closing shall be consummated and all of Seller's assignable right, title and
interest in and to the award of the condemning authority shall be assigned to
Purchaser at the Closing and there shall be no reduction in the Purchase Price.
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7.2 Casualty. If, prior to the Closing, any material portion of the
Property is damaged or destroyed due to any casualty or other cause without
fault of Purchaser, Purchaser may terminate this Agreement by notice thereof to
Seller and Title Company prior to the Closing. If such portion so damaged or
destroyed is not material, or if Purchaser does not elect to so terminate this
Agreement, the Closing shall be consummated and all of Seller's right, title and
interest in and to the proceeds of any insurance covering such damage (less an
amount equal to any expenses and costs incurred by Seller to repair or restore
the Property and any portion of such proceeds paid or to be paid on account of
the loss of rents or other income from the Property for the period prior to and
including the Closing Date, all of which shall be payable to Seller), to the
extent the amount of such insurance proceeds does not exceed the Purchase Price,
shall be assigned to Purchaser at the Closing and there shall be no reduction in
the Purchase Price, except for the amount of any deductible on Seller's
insurance policy and, unless Seller is able to assign the rights to rental loss
proceeds under its policy to Purchaser for the period after the Closing Date,
the estimated amount of rental loss due to the damage and destruction for the
period after the Closing Date. Seller shall in no event be obligated to repair
or restore the Property in the event that any portion thereof is destroyed. For
purposes of this Section 7.2, damage or destruction shall be deemed to be
material if the cost of repair or restoration exceeds THREE MILLION AND NO/100
DOLLARS ($3,000,000).
8.
INDEMNIFICATION
8.1 Indemnity.
(a) In addition to the other indemnification obligations of
Purchaser under this Agreement, Purchaser shall indemnify, protect
and defend Seller against and hold Seller harmless from (i) any
"Claim" (as hereinafter defined) which arises or accrues on or after
the Closing Date in connection with the Property (including, without
limitation, any Claims related to any Property Condition), and (ii)
any Claim in any way arising from Purchaser's inspections or
examinations of the Property prior to the Closing Date.
(b) Seller shall indemnify, protect and defend Purchaser
against and hold Purchaser harmless from any Claim for physical
damage to tangible property or injury to or death of any persons
(but excluding consequential damages to the extent not covered by
Seller's insurance) which arises or accrues before the Closing Date
in connection with any of the Leases or the Contracts.
8.2 Generally. The indemnifying party, whether Seller or Purchaser,
is referred to as the "Indemnitor," and the indemnified party, whether Seller or
Purchaser, is referred to as the "Indemnitee." The indemnification obligations
under this Agreement shall be subject to the following provisions:
(a) The Indemnitee shall notify the Indemnitor of any such
Claim against the Indemnitee within forty-five (45) days after it
has notice of such Claim, but failure to notify the Indemnitor shall
in no case prejudice the rights of the Indemnitee under this
Agreement unless the Indemnitor shall be prejudiced by such
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failure and then only to the extent of such prejudice. Should
the Indemnitor fail to discharge or undertake to defend the
Indemnitee against such liability (with counsel approved by the
Indemnitee), within ten (10) days after the Indemnitee gives the
Indemnitor written notice of the same, then the Indemnitee may
settle such Claim, and the Indemnitor's liability to the Indemnitee
shall be conclusively established by such settlement, the amount of
such liability to include both the settlement consideration and the
reasonable costs and expenses, including attorneys' fees, incurred
by the Indemnitee in effecting such settlement.
(b) The indemnification obligations under this Agreement
shall cover the costs and expenses of the Indemnitee, including
reasonable attorneys' fees and costs, related to any actions, suits
or judgments incident to any of the matters covered by such
indemnities.
(c) The indemnification obligations under this Agreement
shall also extend to any present or future advisor, trustee,
director, officer, partner, employee, beneficiary, shareholder,
participant, agent or contractor of or in the Indemnitee or any
entity now or hereafter having a direct or indirect ownership
interest in the Indemnitee.
(d) The indemnification obligations under this Agreement
shall survive the closing of the transaction contemplated hereunder
or the termination of this Agreement.
8.3 Definition. "Claim" means any claim (including any claim for
damage to property or injury to or death of any persons) made by a third party
against Seller or Purchaser and any reasonable costs and expenses incurred by
the indemnified party in defending against such claim and any loss or liability
resulting from such claim.
9.
DEFAULT
9.1 Breach by Seller. In the event that Seller shall default in any
of its obligations hereunder to be performed at or prior to the Closing, for any
reason other than Purchaser's default or a termination of this Agreement by
Purchaser or Seller pursuant to a right to do so under the provisions hereof,
Purchaser, as its sole and exclusive remedy, may seek specific performance with
respect to this Agreement. Furthermore, in no event shall Purchaser be entitled
to, and Purchaser hereby waives, any right to recover damages relating to such
default by Seller.
9.2 Breach by Purchaser. IF PURCHASER FAILS TO COMPLY WITH SECTION 6
OF THIS AGREEMENT, SELLER MAY TERMINATE THIS AGREEMENT AND THEREUPON SELLER
SHALL BE ENTITLED TO THE EARNEST MONEY AS LIQUIDATED DAMAGES (AND NOT AS A
PENALTY) AND AS SELLER'S SOLE REMEDY AND RELIEF HEREUNDER (EXCEPT FOR THE
SURVIVING OBLIGATIONS). IN SUCH EVENT, TITLE COMPANY, IF IT HAS NOT PREVIOUSLY
DONE SO, SHALL IMMEDIATELY DELIVER THE EARNEST MONEY TO SELLER AS LIQUIDATED
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DAMAGES UNDER AND IN CONNECTION WITH THIS AGREEMENT WITHOUT THE NECESSITY OF
GIVING NOTICE TO PURCHASER, AND NOTWITHSTANDING CONFLICTING INSTRUCTIONS FROM
PURCHASER OR CONTRARY INSTRUCTIONS CONTAINED IN TITLE COMPANY'S GENERAL
PROVISIONS. SELLER AND PURCHASER HAVE MADE THIS PROVISION FOR LIQUIDATED DAMAGES
BECAUSE IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN AND
CALCULATE ON THE DATE HEREOF THE AMOUNT OF ACTUAL DAMAGES SUSTAINED BY SELLER
FOR THE BREACH BY PURCHASER UNDER THIS AGREEMENT AND THE FAILURE OF THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF
COMPENSATION SELLER SHOULD RECEIVE AS A RESULT OF PURCHASER'S BREACH OR DEFAULT,
AND SELLER AND PURCHASER AGREE THAT THESE SUMS REPRESENT REASONABLE COMPENSATION
TO SELLER FOR SUCH BREACH. NOTWITHSTANDING ANY CONTRARY PROVISION IN THIS
AGREEMENT, (A) IN THE EVENT OF ANY OTHER DEFAULT BY PURCHASER UNDER THIS
AGREEMENT, SELLER SHALL HAVE ANY AND ALL RIGHTS AND REMEDIES AVAILABLE UNDER
THIS AGREEMENT OR AT LAW OR IN EQUITY BY REASON OF SUCH DEFAULT, AND (B) THE
PROVISIONS OF THIS SECTION 9.2 SHALL NOT LIMIT OR AFFECT ANY OF PURCHASER'S
INDEMNITIES AS PROVIDED IN OTHER SECTIONS OF THIS AGREEMENT.
/s/ VJC /s/ KRT
- ---------------------- ------------------------
Purchaser's Initials Seller's Initials
10.
FUTURE OPERATIONS; OTHER OBLIGATIONS
10.1 Future Operations. From the Effective Date (as hereinafter
defined) until the Closing or earlier termination of this Agreement, Seller
shall (i) keep and maintain the Property in substantially its condition as of
the date of this Agreement, casualty and reasonable wear and tear excepted, (ii)
continue to operate the Property in substantially the same manner as it was
operated by Seller prior to the Effective Date, (iii) continue to perform its
obligations under the Leases and Contracts in accordance with their terms, and
(iv) not subject the Property to any additional liens or encumbrances without
Purchaser's approval. Until the Closing or earlier termination of this
Agreement, Seller shall not, without the prior written consent of Purchaser,
modify, enter into or renew any Contract which would bind a successor owner of
the Property. Until the Closing or earlier termination of this Agreement, Seller
shall not lease any space in the Improvements or amend or terminate any existing
Lease, except on terms and conditions and with tenants approved by Purchaser.
Purchaser hereby approves the terms and conditions of, and the tenants under,
the leases (and amendments) described in the schedules attached as Exhibits H-2
and H-3 hereto. No future approval of such leases, amendments or terminations
shall be unreasonably withheld or delayed notwithstanding any contrary provision
in this Agreement. All costs and expenses incurred and paid by Seller under any
such approved lease entered into after Purchaser's execution hereof shall be
paid by Purchaser in accordance with Section 6.6(b) hereof.
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10.2 REIT Requirements. Seller shall reasonably cooperate with
Purchaser in furnishing to Purchaser such information relating to the Property
not previously furnished thereto (and making such information available for
audit) as may be required for Purchaser to comply with any applicable legal
requirements for real estate investment trusts; provided, however, that Seller
shall bear no cost in furnishing such information or liability with respect to
such information.
11.
MISCELLANEOUS
11.1 Notices. All notices, demands and requests which may be given
or which are required to be given by either party to the other, and any exercise
of a right of termination provided by this Agreement, shall be in writing and
shall be deemed effective either: (a) on the date personally delivered to the
address below, as evidenced by written receipt therefor, whether or not actually
received by the person to whom addressed; (b) on the third (3rd) business day
after being sent, by certified or registered mail, return receipt requested,
addressed to the intended recipient at the address specified below; or (c) on
the first (1st) business day after being deposited into the custody of a
nationally recognized overnight delivery service such as FedEx, addressed to
such party at the address specified below. For purposes of this Section 11.1,
the addresses of the parties for all notices are as follows (unless changed by
similar notice in writing given by the particular person whose address is to be
changed):
If to Seller: Matterhorn USA, Inc.
9665 Wilshire Boulevard, Suite 200
Beverly Hills, California 90212
Attention: K. Robert Turner and
Jonathan P. Roth
Tel: (310) 247-2700
Fax: (310) 247-8067
with a copy to: Loeb & Loeb LLP
1000 Wilshire Boulevard, Suite 1800
Los Angeles, California 90017
Attention: James D. Friedman, Esq.
Tel: (213) 688-3484
Fax: (213) 688-3460
If to Purchaser: Arden Realty Limited Partnership
9100 Wilshire Blvd., Suite 700 E
Beverly Hills, California 90212
Attn: Mr. Victor Coleman
Andrew Sobel, Esq.
Tel: (310) 271-8600
Fax: (310) 274-6218
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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. and
Jeffrey E. Steiner, Esq.
Tel: (310) 203-8080
Fax: (310) 203-0567
If to Title
Company: Commonwealth Land Title Insurance Company
655 Third Avenue
New York, New York 10017
Attention: William Deatly
Tel: (212) 949-0100, Ext. 211
Fax: (212) 856-9308
11.2 Real Estate Commissions. Seller shall pay to First Property
Realty Corporation (hereinafter called "Agent" whether one or more) upon the
Closing of the transaction contemplated hereby, and not otherwise, a cash
commission in the amount agreed on in a separate listing agreement between
Seller and Agent. Said commission shall in no event be payable unless and until
the transaction contemplated hereby is closed in accordance with the terms of
this Agreement; if such transaction is not closed for any reason including,
without limitation, termination of this Agreement pursuant to the terms hereof,
then such commission shall be deemed not to have been earned and shall not be
due or payable. Except as set forth above with respect to Agent, neither Seller
nor Purchaser has authorized any broker or finder to act on Purchaser's behalf
in connection with the sale and purchase hereunder and neither Seller nor
Purchaser has dealt with any broker or finder purporting to act on behalf of any
other party. Purchaser agrees to indemnify, hold harmless and defend Seller from
and against any and all claims, losses, damages, costs or expenses of any kind
or character arising out of or resulting from any agreement, arrangement or
understanding alleged to have been made by Purchaser or on Purchaser's behalf
with any broker or finder in connection with this Agreement or the transaction
contemplated hereby. Seller agrees to indemnify, hold harmless and defend
Purchaser from and against any and all claims, losses, damages, costs or
expenses of any kind or character arising out of or resulting from any
agreement, arrangement or understanding alleged to have been made by Seller or
on Seller's behalf with any broker or finder in connection with this Agreement
or the transaction contemplated hereby. Notwithstanding anything to the contrary
contained herein, this Section 11.2 shall survive the Closing or any earlier
termination of this Agreement.
11.3 Entire Agreement. This Agreement embodies the entire agreement
between the parties relative to the subject matter hereof, and there are no oral
or written agreements between the parties, nor any representations made by
either party relative to the subject matter hereof, which are not expressly set
forth herein.
11.4 Amendment. This Agreement may be amended only by a written
instrument executed by the party or parties to be bound thereby.
22
<PAGE> 23
11.5 Headings. The captions and headings used in this Agreement are
for convenience only and do not in any way limit, amplify or otherwise modify
the provisions of this Agreement.
11.6 Time of Essence. Time is of the essence of this Agreement;
provided, however, that if the final date of any period which is set out in any
provision of this Agreement falls on a Saturday, Sunday or legal holiday under
the laws of the United States or the State of California, then, in such event,
the time of such period shall be extended to the next day which is not a
Saturday, Sunday or legal holiday.
11.7 Governing Law. This Agreement shall be governed by the laws of
the State of California and the laws of the United States pertaining to
transactions in such State.
11.8 Successors and Assigns; Assignment. This Agreement shall bind
and inure to the benefit of Seller and Purchaser and their respective heirs,
executors, administrators, personal and legal representatives, successors and
permitted assigns. Purchaser shall not assign Purchaser's rights under this
Agreement without the prior written consent of Seller, which consent may be
withheld in Seller's sole discretion. In the event Seller consents to such
assignment, Purchaser and such assignee shall execute and deliver an assignment
of purchase and sale agreement in a form acceptable to Seller. Any subsequent
assignment may be made only with the prior written consent of Seller, which
consent may be withheld in Seller's sole discretion. No assignment of
Purchaser's rights hereunder shall relieve Purchaser of its liabilities under
this Agreement. This Agreement is solely for the benefit of Seller and
Purchaser; notwithstanding any contrary provision in this Agreement, there shall
be no third party beneficiaries hereof. Any assignment of this Agreement in
violation of the foregoing provisions shall be null and void.
11.9 Invalid Provision. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this Agreement.
11.10 Attorneys' Fees. The parties hereto agree that they shall pay
directly any and all legal costs which they have incurred on their own behalf in
the preparation of all deeds and other agreements pertaining to this transaction
and that such legal costs shall not be part of the closing costs. In the event
it becomes necessary for either party hereto to file suit to enforce this
Agreement or any provision contained herein, the party prevailing in such suit
shall be entitled to recover reasonable attorneys' fees and costs incurred in
such suit.
11.11 Multiple Counterparts. This Agreement may be executed in a
number of identical counterparts which, taken together, shall constitute
collectively one (1) agreement; in making proof of this Agreement, it shall not
be necessary to produce or account for more than one such counterpart with each
party's signature.
23
<PAGE> 24
11.12 Effective Date. As used herein the term "Effective Date" shall
mean the first date Title Company is in receipt of both this Agreement executed
by Purchaser and Seller (whether in counterparts or not) and the Earnest Money.
11.13 Exhibits. The exhibits referred to in this Agreement are
incorporated herein by this reference.
11.14 No Recordation. Seller and Purchaser hereby acknowledge that
neither this Agreement nor any memorandum or affidavit hereof shall be recorded
in the Official Records of Los Angeles County, California, or any other county.
Should Purchaser ever record or attempt to record this Agreement, or a
memorandum or affidavit hereof, or any other similar document, then,
notwithstanding anything herein to the contrary, such recordation or attempt at
recordation shall constitute a default by Purchaser hereunder, and, in addition
to the other remedies provided for herein, Seller shall have the express right
to terminate this Agreement.
11.15 Merger Provision. Except as may otherwise be expressly
provided herein, any and all rights of action of Purchaser for any breach by
Seller of any representation, warranty or covenant contained in this Agreement
shall merge with the Deed and other instruments executed at Closing, shall
terminate at Closing, and shall not survive Closing.
11.16 Jury Waiver. PURCHASER AND SELLER DO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THEIR RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF OR UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING OR SELLER AT
CLOSING, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN
ANY MANNER TO THIS AGREEMENT OR THE PROPERTY (INCLUDING, WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THIS AGREEMENT AND ANY CLAIMS OR DEFENSES ASSERTING
THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE).
THIS WAIVER IS A MATERIAL INDUCEMENT FOR SELLER TO ENTER INTO AND ACCEPT THIS
AGREEMENT AND THE DOCUMENTS DELIVERED BY PURCHASER AT CLOSING AND SHALL SURVIVE
THE CLOSING OF TERMINATION OF THIS AGREEMENT.
11.17 [intentionally omitted]
11.18 Confidentiality. Without limitation upon Section 4.2 hereof,
each party shall keep confidential and shall not disclose the terms of this
Agreement including, without limitation, the Purchase Price and all other
financial terms, without the written consent of the other party, except (a) to
its directors, officers, partners, employees, legal counsel, accountants,
engineers, architects, financial advisors and similar professionals and
consultants, lenders, prospective lenders, investors and prospective investors
to the extent it reasonably deems it necessary or appropriate in connection with
the transaction contemplated hereunder (and each party shall inform each of the
foregoing of such party's obligations under this paragraph and shall secure the
agreement thereof to be bound by the terms hereof) or (b) as otherwise required
by law or regulation, including but not limited to securities laws and
regulations.
24
<PAGE> 25
11.19 Jurisdiction and Venue. Each party hereby consents to the
jurisdiction of any state or federal court located within Los Angeles County,
California, waives personal service of any and all process upon it, consents to
service of process by registered mail directed to it at the address stated in
Section 11.1 hereof, and acknowledges that service so made shall be deemed to be
completed upon actual delivery (whether accepted or refused) thereof. In
addition, each party consents and agrees that venue of any action instituted
under this Agreement shall be proper in Los Angeles County, California, and
hereby waives any objection to venue.
11.20 Further Assurances. Each party hereto shall, upon request by
the other party, execute and deliver such documentation and take such other
action as may be reasonably necessary to effectuate the intent hereof or to
implement the provisions hereof.
11.21 No Waiver. Except as otherwise expressly provided herein, no
waiver by a party of any breach of this Agreement or of any warranty or
representation hereunder by the other party shall be deemed to be a waiver of
any other breach by such other party (whether preceding or succeeding and
whether or not of the same or similar nature), and no acceptance of payment or
performance by a party after any breach by the other party shall be deemed to be
a waiver of any breach of this Agreement or of any representation or warranty
hereunder by such other party, whether or not the first party knows of such
breach at the time it accepts such payment or performance. No failure or delay
by a party to exercise any right it may have by reason of the default of the
other party shall operate as a waiver of default or modification of this
Agreement or shall prevent the exercise of any right by the first party while
the other party continues to be so in default.
11.22 Consents and Approvals. Except as otherwise expressly provided
herein, any approval or consent provided to be given by a party hereunder may be
given or withheld in the sole discretion of such party.
11.23 Joint and Several Liability. In the event that Purchaser is
comprised of two or more entities and/or individuals, or any combination
thereof, such entities and/or individuals shall have joint and several liability
for the performance of all of Purchaser's obligations
25
<PAGE> 26
hereunder including, without limitation, the indemnification obligations of
Purchaser set forth herein. The provisions of this Section 11.23 shall survive
the closing or termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
Date of Execution PURCHASER:
by Purchaser:
ARDEN REALTY LIMITED PARTNERSHIP,
12/22/97 a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
its general partner
By /s/ Victor J. Coleman
--------------------------
Name: Victor J. Coleman
Title: President and COO
Date of Execution SELLER:
by Seller:
MATTERHORN USA, INC.,
12/23/97 a Delaware Corporation
By /s/ K. R. Turner
---------------------------
Name: K. Robert Turner
Title: Secretary & Vice President
26
<PAGE> 27
The undersigned hereby acknowledges receipt of the Earnest Money and a copy of
this Agreement and agrees to comply with the provisions of this Agreement.
Date of Execution by COMMONWEALTH LAND TITLE
Title Company: INSURANCE COMPANY
By /s/ [SIG]
----------------------------------
12/24/97 Its Authorized Officer
27
<PAGE> 28
LEGAL DESCRIPTION
PARCEL 1:
LOTS 809, 810 AND 811 OF TRACT NO. 6380, IN THE CITY OF BEVERLY HILLS, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 69 PAGES 11
THROUGH 20 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
PARCEL 2:
LOTS 814, 815, 816, 817 AND 818 OF TRACT NO. 6380, IN THE CITY OF BEVERLY HILLS,
COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 69 PAGES
11 THROUGH 20 INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID
COUNTY.
PARCEL 3:
LOT 3, OF TRACT NO. 11938, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 217 PAGE 23 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 4:
LOTS 812 AND 813 OF TRACT NO. 6380, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 69 PAGES 11 THROUGH 20
INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 5:
LOTS 807 AND 808 OF TRACT NO. 6380, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 69 PAGES 11 THROUGH 20
INCLUSIVE OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXHIBIT A
Page 1 of 1
<PAGE> 29
ESTOPPEL CERTIFICATE OF TENANT
Matterhorn USA, Inc.
9665 Wilshire Boulevard, Suite 200
Beverly Hills, California 90212
Attention: K. Robert Turner and
Jonathan P. Roth
Re: Lease
Gentlemen:
The undersigned, as the lessee ("Lessee") under that certain Office
Lease Agreement dated _________________ (the "Lease"), with you, as the lessor
("Lessor"), relating to certain premises designated as Suite ______ (the
"Premises"), located at __________________________________________, Beverly
Hills, California, hereby certifies that, as of the date hereof and subject to
only those exceptions, if any, noted below:
1. A true and correct copy of the Lease is attached as Exhibit A
hereto. There have been no amendments, modifications, extensions, assignments or
subleases of or relating to the Lease. The Lease is in full force and effect.
2. The term of the Lease commenced on _________________ and is
scheduled to expire on _________________ (subject to any extension option
contained therein). Possession of the Premises has been delivered by Lessor to
Lessee, and Lessee has accepted and does occupy the Premises.
3. Rent (including additional rent for operating costs and taxes)
of $_________ per month has been paid through the calendar month set forth above
Lessee's signature below. No more than one (1) month's rent has been paid in
advance; a security deposit in the amount set forth in the Lease has been paid;
no other amounts have been paid in advance to Lessor or deposited therewith by
Lessee.
4. To the best of Lessee's knowledge, (a) no defense or offset to
the enforcement of the Lease by Lessor exists, (b) Lessor is not in default
under the Lease and has not committed any breach thereunder, nor has any event
occurred which, with the passage of time or the giving of notice, or both, would
constitute a default or breach thereunder by Lessor, and (c) there are no
outstanding obligations of Lessor to make any tenant improvements to the
Premises or to pay any tenant improvement allowance under the Lease.
5. Lessee does not have any (a) option or preferential right to
purchase all or any part of the Premises or the building of which the Premises
are a part, or (b) right, title or interest with the respect to the Premises
other than as Lessee under the Lease.
EXHIBIT B-1
Page 1 of 2
<PAGE> 30
6. Each individual executing and delivering this document on
behalf of Lessee hereby represents and warrants that such individual has the
power and is duly authorized to do so.
Lessee hereby acknowledges that Lessor and prospective purchasers
and lenders are relying hereon and warrants, represents and declares that each
of the foregoing certifications is true, correct and complete, subject to only
the following exceptions, if any:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Dated: _________________.
_______________________________________,
a_______________________________________
By______________________________________
Name:_________________________________
Title:________________________________
By______________________________________
Name:_________________________________
Title:________________________________
EXHIBIT B-1
Page 2 of 2
<PAGE> 31
ESTOPPEL CERTIFICATE OF SELLER
Arden Realty Limited Partnership
9100 Wilshire Blvd., Suite 700 E
Beverly Hills, California 90212
Attention: Mr. Victor Coleman
Andrew Sobel, Esq.
Re: Lease
Gentlemen:
With respect to that certain Office Lease Agreement dated
_________________ (the "Lease"), between the undersigned, as the lessor
("Lessor"), and ____________________, as the lessee ("Lessee"), relating to
certain premises designated as Suite ______ (the "Premises"), located at
__________________________________________, Beverly Hills, California, Lessor
hereby certifies that, as of the date hereof and subject to only those
exceptions, if any, noted below:
1. There have been no amendments, modifications, extensions,
assignments or subleases of or relating to the Lease. The Lease is in full force
and effect.
2. The term of the Lease commenced on _________________ and is
scheduled to expire on _________________ (subject to any extension option
contained therein). Possession of the Premises has been delivered by Lessor to
Lessee, and Lessee has accepted and does occupy the Premises.
3. No more than one (1) month's rent has been paid in advance; a
security deposit in the amount set forth in the Lease has been paid; no other
amounts have been paid in advance to Lessor or deposited therewith by Lessee.
4. No defense or offset to the enforcement of the Lease by Lessor
exists. Lessor is not in default under the Lease and has not committed any
breach thereunder, nor has any event occurred which, with the passage of time or
the giving of notice, or both, would constitute a default or breach thereunder
by Lessor. There are no outstanding obligations of Lessor to make any tenant
improvements to the Premises or to pay any tenant improvement allowance under
the Lease.
5. Lessee does not have any (a) option or preferential right to
purchase all or any part of the Premises or the building of which the Premises
are a part, or (b) right, title or interest with the respect to the Premises
other than as Lessee under the Lease.
6. Each individual executing and delivering this document on
behalf of Lessor hereby represents and warrants that such individual has the
power and is duly authorized to do so.
EXHIBIT B-2
Page 1 of 2
<PAGE> 32
Lessor hereby acknowledges that you are relying hereon and warrants,
represents and declares that each of the foregoing certifications is true,
correct and complete, subject to only the following exceptions, if any:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Notwithstanding any contrary provision in this document, the
foregoing provisions of this document are based solely on the current actual
knowledge of Mark Williams of G.E. Capital Realty Group, the asset manager of
the property of which the Premises are a part, and Catherine Atkins of Tooley &
Company, the property manager of such property, without investigation or inquiry
by, or personal liability on the part of, such individuals or such employers.
Dated: _________________.
MATTERHORN USA, INC.,
a Delaware Corporation
By: GE Capital Realty Group, Inc.,
a Texas corporation,
its duly authorized agent
By___________________________________
Name:______________________________
Title:_____________________________
EXHIBIT B-2
Page 2 of 2
<PAGE> 33
ACM NOTICE
To: Prospective Purchaser
Re: Transmittal of Information Regarding
Asbestos-Containing Material and
Presumed Asbestos-Containing Material
Gentlemen:
As you may know, the Occupational Safety and Health Administration
has enacted regulations (the "OSHA Regulations") which require building owners
to provide notice of the presence and location of asbestos-containing material
("ACM") and presumed ACM ("PACM") along with any relevant information to
employers of employees who work in the owner's building.(1) In addition,
building owners must keep records of all information required to be maintained
by the regulations and transmit them to subsequent owners.(2)
In accordance with the OSHA Regulations, specifically, 29 C.F.R.
Section 1910.1001(j)(2)(ii), we are providing to you herewith copies of
information in our possession regarding the ACM and any PACM located at the
improved real property in Beverly Hills, California, owned by the undersigned
including, without limitation, copies of any applicable asbestos sampling
reports in our possession (such information and reports being referred to herein
collectively as the "Reports").
The undersigned makes no representations, warranties, promises,
covenants, agreements or guarantees of any kind or character whatsoever, express
or implied, oral or written, past, present or future, of, as to, concerning or
with respect to the information and documentation transmitted herewith
including, without limitation, the accuracy or completeness of the Reports or
the Reports' compliance with, or the effect of, the OSHA Regulations.
- --------
(1) 59 Fed. Reg. 40964, 41061 (Aug. 10, 1994), codified at 29 C.F.R.
Section 1910.1001(j).
(2) Id.
EXHIBIT C
Page 1 of 2
<PAGE> 34
We request that you acknowledge receipt of these materials by
signing below.
Dated: ________________________.
MATTERHORN USA, INC.,
a Delaware Corporation
By: GE Capital Realty Group, Inc.,
a Texas corporation,
its duly authorized agent
By________________________________
Name:___________________________
Title:__________________________
RECEIPT ACKNOWLEDGED:
__________________________________,
a__________________________________
By_________________________________
Name:____________________________
Title:___________________________
By_________________________________
Name:____________________________
EXHIBIT C
Page 2 of 2
<PAGE> 35
GRANT DEED
RECORDING REQUESTED BY
COMMONWEALTH LAND TITLE
INSURANCE COMPANY
WHEN RECORDED MAIL, AND
MAIL TAX STATEMENTS, TO:
__________________________
__________________________
__________________________
__________________________
-----------------SPACE ABOVE THIS LINE FOR RECORDER'S USE----------------
GRANT DEED
Documentary transfer tax is not for public
record (R&T 11932). A.P.N. 4331-023-059
4331-023-060
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
MATTERHORN USA, INC., a Delaware corporation ("Grantor"), hereby grants to
_______________________________________, a __________________________________
("Grantee"), all of Grantor's right, title and interest in and to the real
property located in the County of Los Angeles, State of California, and more
particularly described in Exhibit A attached hereto and made a part hereof,
subject to a lien for real property taxes and to all covenants, conditions,
easements, encumbrances and all other matters of record.
Dated: ________________________.
MATTERHORN USA, INC.,
a Delaware Corporation
By: GE Capital Realty Group, Inc.,
a Texas corporation,
its duly authorized agent
By_________________________________
Name:____________________________
Title:___________________________
EXHIBIT D
Page 1 of 2
<PAGE> 36
STATE OF TEXAS )
) ss.
COUNTY OF DALLAS )
On __________________, before me, the undersigned, a Notary Public in and
for said State, personally appeared _______________________________, known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
------------------------------
Notary Public in and for
the State of Texas
EXHIBIT D
Page 2 of 2
<PAGE> 37
BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
FOR VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, MATTERHORN USA, INC., a Delaware corporation ("Assignor"),
hereby sells, transfers, assigns and conveys to _________________________, a
_________________________ ("Assignee"), the following:
1. All right, title and interest of Assignor in and to all
appliances, fixtures, equipment, machinery, furniture, carpet, drapes and other
tangible personal property (collectively, "Personal Property") located on and
used solely in connection with the management, maintenance or operation of that
certain improved real property legally described in Exhibit A attached hereto
and made a part hereof (the "Real Property"), but excluding tangible personal
property owned or leased from third parties by tenants of the Real Property
under the Leases (as hereinafter defined) or not otherwise owned by Assignor.
2. All right, title and interest of Assignor as lessor in and to the
leases (the "Leases") relating to the leasing of space in the Real Property
described in Exhibit B attached hereto and made a part hereof and all of the
rights, interests, benefits, obligations and privileges of the lessor
thereunder.
3. To the extent assignable at no cost or expense to Assignor and
without the consent of third parties, all right, title and interest of Assignor
in and to all intangible property ("Intangible Property") owned by Assignor and
pertaining solely to the Real Property or the Personal Property or any business
or businesses conducted thereon including, but not limited to, leases (other
than the Leases), service agreements and other contracts (other than the
Contracts, as hereinafter defined), building and trade names, business licenses,
warranties, utility contracts, rent lists, advertising materials, telephone
exchange numbers, plans and specifications, governmental approvals and
development rights.
4. To the extent assignable without the consent of third parties and
in the possession of Assignor, all right, title and interest of Assignor in and
to the contracts pertaining to the subject property, not cancelable on thirty
(30) days' notice without penalty or premium, and listed in Exhibit C attached
hereto and made a part hereof (the "Contracts"), including, but not limited to,
the service contracts, equipment leases and maintenance contracts so listed.
This Bill of Sale, Assignment and Assumption Agreement is given
pursuant to that certain Purchase and Sale Agreement and Joint Escrow
Instructions dated December 22, 1997 (the "Purchase Agreement"), by and between
Assignor and Assignee, providing for, among other things, the conveyance of the
Personal Property, the Real Property, the Leases, the Intangible Property and
the Contracts.
The covenants, agreements, representations, warranties, indemnities,
limitations and disclaimers provided in the Purchase Agreement with respect to
the property conveyed hereunder (including, without limitation, the limitations
of Assignor's liability provided in the Purchase Agreement) are hereby
incorporated herein by this reference as if herein set out in full and shall
EXHIBIT E
Page 1 of 3
<PAGE> 38
inure to the benefit of and shall be binding upon Assignee and Assignor and
their respective successors and assigns.
This Bill of Sale, Assignment and Assumption Agreement is made
subject to all covenants, conditions, matters, liens and encumbrances affecting
the subject property.
This Bill of Sale, Assignment and Assumption Agreement may be
executed in one or more identical counterparts, each of which such counterparts
shall be deemed an original for all purposes and all such counterparts shall
collectively constitute one such Bill of Sale, Assignment and Assumption
Agreement.
Dated: ________________________.
"ASSIGNOR"
MATTERHORN USA, INC.,
a Delaware Corporation
By: GE Capital Realty Group, Inc.,
a Texas corporation,
its duly authorized agent
By_____________________________________
Name:________________________________
Title:_______________________________
ASSUMPTION
As of the date above set forth, Assignee hereby accepts and agrees
to the foregoing Bill of Sale, Assignment and Assumption Agreement and hereby
assumes and agrees to discharge, in accordance with the terms thereof, all of
the burdens and obligations of Assignor relating to the Personal Property, the
Leases, the Intangible Property and the Contracts arising or accruing on or
after the effective date of the foregoing Bill of Sale, Assignment and
Assumption Agreement, subject to any provisions in the Leases which limit the
liability of the
EXHIBIT E
Page 2 of 3
<PAGE> 39
lessor thereunder. All capitalized terms used in the foregoing provisions of
this Assumption shall be as defined in the foregoing Bill of Sale, Assignment
and Assumption Agreement.
"ASSIGNEE"
_______________________________________,
a_______________________________________
By______________________________________
Name:_________________________________
Title:________________________________
By______________________________________
Name:_________________________________
Title:________________________________
EXHIBIT E
Page 3 of 3
<PAGE> 40
CERTIFICATION OF NON-FOREIGN STATUS
A. Federal FIRPTA Certificate.
Section 1445 of the Internal Revenue Code provides that a transferee
of a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform , a ("Transferee"), that withholding of tax is not
required upon the disposition (whether by foreclosure, deed-in-lieu of
foreclosure, or otherwise) of a U.S. real property interest by Matterhorn USA,
Inc., a Delaware corporation ("Transferor"), Transferor hereby certifies the
following to Transferee:
1. Transferor is not a foreign person (as defined in the
Internal Revenue Code).
2. Transferor's U.S. employer identification number is__________
3. Transferor's office address is:
Matterhorn USA, Inc.
9665 Wilshire Boulevard, Suite 200
Beverly Hills, California 90212
Attention: K. Robert Turner and
Jonathan P. Roth
4. Transferor understands that this certification may be disclosed
to the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
5. Transferor understands that Transferee is relying on this
certification in determining whether withholding is required upon such transfer.
B. California Resident/Non-Resident Affidavit.
Transferor hereby certifies that it is a California resident with a
permanent place of business located at 9665 Wilshire Boulevard, Suite 200,
Beverly Hills, California 90212, and that Transferor is not subject to
withholding of a portion of the sales price pursuant to the California Revenue
and Taxation Code.
Transferor understands that this certificate may be disclosed to the
Franchise Tax Board of California by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
EXHIBIT F
Page 1 of 2
<PAGE> 41
Under penalty of perjury, the undersigned declares that he/she has
examined this certification and to the best of his/her knowledge and belief it
is true, correct and complete, and he/she further declares that he/she has the
authority to sign this document on behalf of Transferor.
Dated: ________________________.
"TRANSFEROR"
MATTERHORN USA, INC.,
a Delaware Corporation
By: GE Capital Realty Group, Inc.,
a Texas corporation,
its duly authorized agent
By__________________________________
Name:_____________________________
Title:____________________________
EXHIBIT F
Page 2 of 2
<PAGE> 42
TAXPAYER I.D. CERTIFICATE
With respect to that certain Purchase and Sale Agreement and Joint
Escrow Instructions dated December 22, 1997 (the "Purchase Agreement"), by and
between Matterhorn USA, Inc. ("Seller") and the undersigned ("Purchaser"), and
in connection with certain Internal Revenue Service reporting requirements
imposed upon Seller, Purchaser hereby certifies that listed below are
Purchaser's address and taxpayer I.D. number, true and correct as of the Closing
Date (as defined in the Purchase Agreement):
Address: _______________________
_______________________
_______________________
_______________________
Taxpayer I.D. No.: _______________________
Purchaser hereby consents to Seller's release of the above
information in connection with any reporting requirements imposed upon Seller by
any governmental authority.
Dated: ________________________.
_______________________________________,
a_______________________________________
By______________________________________
Name:_________________________________
Title:________________________________
By______________________________________
Name:_________________________________
Title:________________________________
EXHIBIT G
Page 1 of 1
<PAGE> 43
EXHIBIT H-1
9100 WILSHIRE BOULEVARD
SIGNED LEASE COSTS WHICH ARE PURCHASER'S RESPONSIBILITY
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TENANT/SUITE SIZE TERM LAST PROPOSAL TI's COMMISSIONS COMMENTS/STATUS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Baker, Winokur 12,436(r) 7 yrs. Mos. 1-24 $1.85 $134,000 for the $31,896.55 balance due -Original lease fully
& Ryder 11,592(u) Mos. 25-60 $2.00 original premises CB Commercial and executed on 9/11/97.
600W Mos. 61-84 $2.15 which is the esti- $23,922.42 balance due -First Amendment for an
mated amount re- First Property upon additional 921 sq. ft.
maining after the tenant move-in for fully executed on 12/8/97.
December draw. original premises; -Under construction.
Mos. 1-4 @ $5,103.07 due CB Com- -Occupancy projected 2/4/98.
50% abatement $27(u) or $22,410 mercial for total
for the expansion commission on expan-
premises. sion space and
$3,188.97 due First
Property for total com-
mission on expansion
space.
- ------------------------------------------------------------------------------------------------------------------------------------
MNP Personnel 1,827(r) 5 yrs. Mos. 1-60 $1.95 $31.75(u) or $4,275.18 due Beltier -Leases executed by tenant
665E 1,548(u) $49,149. Tenant has Commercial for lease on 11/25/97.
right to amortize execution; $2,671.99 -Under construction.
additional TI's at due First Property for -Rent commencement
10%. lease execution. scheduled 2/7/97.
$4,275.18 due Beltier
Commercial upon move-
in; $2,671.99 due
First Property upon
move-in.
- ------------------------------------------------------------------------------------------------------------------------------------
Law Offices of 3,028(r) 5 yrs. Mos. 1-60 $1.95 $20(u) or $51,240. $7,078.60 due Studley -Leases executed by tenant
Norman Dolin 2,562(u) 50% of tenant cov- for lease execution; 11/14/9. Tenant temporarily
601E erage to be amor- $4,424.07 due First occupying suite 340W until
tized at 10%. Property for lease exe- completion of 601E.
cution; $7,078.50 due -Tenant finalizing prelim-
Studley upon move-in; inary space plan.
$4,424.06 due First
Property upon move-in.
- ------------------------------------------------------------------------------------------------------------------------------------
Freshman, Marantz, 16,476(r) $35,983.58 due CB Com- -Commission due in event
Orlanski, Cooper mercial; $21,526.43 tenant waives right to
& Klein due First Property cancel as of 8/1/2001.
800E
- ------------------------------------------------------------------------------------------------------------------------------------
Bosley Medical 32,696(r) $90,000 (estimated) -Landlord is responsible to
Institute install a monument sign
East Tower fronting Wilshire Boule-
Penthouse vard. Tenant is responsible
for 1/3 of cost.
- ------------------------------------------------------------------------------------------------------------------------------------
Writers Guild 10,834(r) $73,390 refurbishment
151R allowance due 1/13/04;
$158,175 refurbishment
allowance due if ten-
ant exercises option
commencing 2/1/12
- ------------------------------------------------------------------------------------------------------------------------------------
Kolodny & Anteau 13,834(r) a commission of 4% yrs.
900W 1-5 and 2% yrs. 6-10
is due Les Small & Co.
for expansion space
leased by tenant so
long as Les Small and
Co. is the sole and
exclusive broker rep-
resenting tenant.
- ------------------------------------------------------------------------------------------------------------------------------------
Current Estimated Current Estimated Total:
Total: $101,010.49
$390,189 (excluding contingent
(excluding contingent costs)
costs)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 44
EXHIBIT H-2
9100 WILSHIRE BOULEVARD
PROPOSAL NEGOTIATIONS/PENDING NEGOTIATIONS AND COSTS WHICH PURCHASER APPROVES
Page 1
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TENANT/SUITE SIZE TERM LAST PROPOSAL TI's COMMISSIONS COMMENTS/STATUS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Zadeh 2,199(r) 10 yrs. Mos. 1-30 $2.10 $50(u) or $94,850; $9,288.80 due Landmark - Execution copies of lease
448W 1,897(u) Mos. 31-60 $2.30 5% supervision fee Commercial upon lease agreement about to be
Mos. 61-90 $2.50 to landlord. execution; $5,792.99 submitted to tenant.
Mos. 91-120 $2.75 due First Property upon
lease execution;
$9,268.79 due Landmark
Commercial upon move-in;
$5,792.99 due First
Property upon move-in.
- ------------------------------------------------------------------------------------------------------------------------------------
MCG Architects, 11,853(r) 5 yrs. Mos. 1-60 $2.05 $43.50(u) or $29,158.38 due Wolf - Received tenant's initial
Inc. 11,093(u) $482,545.50; Commercial upon lease lease comments on
500W 4% supervision execution; $18,223.99 12/11/97.
fee to landlord. due First Property - Working drawing complete
upon lease execution; with plan check approval.
$29,158.38 due Wolf - Contractor to commence
Commercial upon move-in, construction immediately
$18,223.99 due First upon lease execution.
Property upon move-in.
- ------------------------------------------------------------------------------------------------------------------------------------
George Littos 4,579(r) 5 yrs. Estimated at $25 4% for years 1-5 to - Space plan meeting
Productions 3,879(u) (u), pending Beilter Commercial 12/16/97.
660E construction bid 2.5% for years 1-5 to
First Property
- ------------------------------------------------------------------------------------------------------------------------------------
Healthsource 7,000- 10 yrs. Mos. 1-30 $2.10 $50(u) 4% for yrs 1-5; - Letter of intent
c/o David Frisch, 8,000 Mos. 31-60 $2.30 2% for yrs. 6-10 signed; reviewing
M.D. Mos. 61-90 $2.50 payable to First tenant's financials.
450W Mos. 91-120 $2.70 Property - Requires termination
of American Custom
Coachworks lease to
make deal.
- ------------------------------------------------------------------------------------------------------------------------------------
Steve Sabba 1,609(r) 10 yrs. Mos. 1-60 $2.10 20(u) 4% for years 1-5; 2% for - Counter proposal
630E 1,363(r) Mos. 61-120 $2.40 years 6-10 to Carey Wong; submitted 12/15/97.
2.5% for years 1-5; 1.25%
for years 6-10 to
First Property
- ------------------------------------------------------------------------------------------------------------------------------------
Liapas Corporation 1,625(r) 3 yrs. Mos. 1-36 $2.10 $5(u) 6.5% for years 1-5 - Letter of intent
517E 1,285(u) to First Property submitted 12/12/97.
- Awaiting tenant's
financials.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 45
EXHIBIT H-2
9100 WILSHIRE BOULEVARD
PROPOSAL NEGOTIATIONS/PENDING NEGOTIATIONS AND COSTS WHICH PURCHASER APPROVES
PAGE 2
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
TENANT/SUITE SIZE TERM LAST PROPOSAL TI's COMMISSIONS COMMENTS/STATUS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kelly's Fudge 2,000(r) 5 yrs. Mos. 1-60 $2.10 build-to-suit 4% for years 1-5 - Counter submitted 12/17/97.
517E estimated at $10(u) to Grubb & Ellis
2.5% for years 1-5
to First Property
- -----------------------------------------------------------------------------------------------------------------------------------
Caster/Richlin 7,000 10 yrs. Mos. 1-30 $2.10 $50(u) 4% for years 1-5; 2% - Agreement to business terms
Eye Center Mos. 31-60 $2.30 for years 6-10 to 12/8/97; requires relocation
350E Mos. 61-90 $2.50 Equis; 2.5% for years of investors title to other
Mos. 91-120 $2.70 1-5; 1.25% for years premises and requires termi-
6-10 to First nation of American Custom
5 yrs. Mos. 1-30 $2.10 $35(u) Property Coachworks lease to make a
Mos. 31-60 $2.40 deal.
- Approved personal financial
statements.
- Tenant revising space plan
12/11/97 through John Green.
- -----------------------------------------------------------------------------------------------------------------------------------
Michael Barker 1,609(r) 5 yrs. Mos. 1-60 $2.10 $20(u) 4% due Metrospace; - Letter of intent received
630E 1,363(u) 2.5% due First 12/10/97.
Property - Space plan approved 12/11/97;
awaiting construction
estimate and tenant's
financials.
- -----------------------------------------------------------------------------------------------------------------------------------
Haran Papma 5,000(r) 6 yrs. Mos. 1-30 $2.05 $41(u) 4% yrs. 1-5; - Letter of intent signed
Nathan, MD Mos. 31-60 $2.15 2% yrs. 6-7 due Wolf 11/24/97.
Insyght Mos. 61-72 $2.30 Commercial; 2.5% yrs. - Reviewing tenants financials.
Interactive 1-5; 1.25% yrs. 6-7 - Must relocate this proposed
450W due First Property tenant to other space in
building in order to complete
Healthsource deal.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 46
EXHIBIT H-3
9100 WILSHIRE BOULEVARD
EXISTING TENANT NEGOTIATIONS AND COSTS WHICH PURCHASER APPROVES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
TENANT/SUITE SIZE TERM LAST PROPOSAL TI's COMMISSIONS COMMENTS/STATUS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Magic Johnson Enterprises 11,900(r) 5 yrs. Mos. 1-60 $2.15 $35(u) 2% commission due - No commitment by tenant
450W Extend current Tooley & Company at this time.
lease to be
coterminous at
$2.25.
- -----------------------------------------------------------------------------------------------------------------------------------
Investor's Title 1,901(r) 3 yrs. Mos. 1-36 $2.00 "as-is" 2% commission due - Lease addendum being
345E Tooley & Company prepared.
- -----------------------------------------------------------------------------------------------------------------------------------
Cantor & Company 1,799(r) 2% commission due - Studley is tenant broker;
445E Tooley & Company has not been recognized.
- -----------------------------------------------------------------------------------------------------------------------------------
Dr. Gerald Mills 2,228(r) 2% commission due - Tenant would like to
330W Tooley & Company downsize.
- -----------------------------------------------------------------------------------------------------------------------------------
Richard Fraade 2,590(r) Mos. 1-36 $2.05 "as-is" 2% commission due - No agreement yet.
530E Tooley & Company
- -----------------------------------------------------------------------------------------------------------------------------------
Isaac Regov 1,607 3 yrs. $2,429.78 due - Amendment signed 12/8/97.
Tooley & Company
- -----------------------------------------------------------------------------------------------------------------------------------
Fung Lum Restaurant 2% commission due
Tooley & Company
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 47
EXHIBIT I
9100 WILSHIRE BOULEVARD
AGED RECEIVABLE REPORT AS OF DECEMBER 15, 1997
AMOUNTS DUE SELLER UPON COLLECTION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
TENANT TOTAL CURRENT 30-60 DAYS 60-90 DAYS 90+ DAYS COMMENTS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Elliot Rosewell, J.E. $ 393.12 $ 393.12 Should be written off, old storage.
- ---------------------------------------------------------------------------------------------------------------------------------
Am. Comm.
For Shaare Zedek -48.51 -48.51
- ---------------------------------------------------------------------------------------------------------------------------------
Bella Kalink 2,476.88 1,238.44 1,238.44 Gary Laff wants to take over as
subtenant and will pay balance.
- ---------------------------------------------------------------------------------------------------------------------------------
Bosley Medical Center 3,403.60 1,331.52 73.00 1,999.08
- ---------------------------------------------------------------------------------------------------------------------------------
Dr. Isaac Regev -559.22 -279.61 -279.61
- ---------------------------------------------------------------------------------------------------------------------------------
Freshman Marantz 183.00 183.00
- ---------------------------------------------------------------------------------------------------------------------------------
Golden & Goldberg 2,794.80 116.45 116.45 116.45 2,445.45 Tenant has questioned operating
expenses, should resolve soon.
- ---------------------------------------------------------------------------------------------------------------------------------
Jaman, Khan & Assoc. 5,340.88 5,340.88 Tenant to pay 12/17.
- ---------------------------------------------------------------------------------------------------------------------------------
K & C Group, Inc. 54,888.79 13,689.01 13,689.01 13,374.71 14,136.06 Fung Lum wants to negotiate
a Lease and will pay balance due.
- ---------------------------------------------------------------------------------------------------------------------------------
Klein Mandelblatt 903.23 903.25 Tenant disputing gross receipts tax.
- ---------------------------------------------------------------------------------------------------------------------------------
Ms Max -41.60 -41.60
- ---------------------------------------------------------------------------------------------------------------------------------
MSB Management Corp. 18,446.29 3,668.48 3,668.48 3,668.48 7,440.85 Tenant served Notice to pay or quit
12/11, will vacate year end.
- ---------------------------------------------------------------------------------------------------------------------------------
Schneider, Goldberg
& Yuen 1,850.00 1,850.00
- ---------------------------------------------------------------------------------------------------------------------------------
Southern California
Savings -13,074.20 -1,004.54 -2,131.58 -7,806.50 Overpayment of operating expenses-
refund due.
- ---------------------------------------------------------------------------------------------------------------------------------
Stephen J. Buchaman 38,511.74 38,511.74 Tenant declared bankruptcy, W/O.
Paid $7,173.24.
- ---------------------------------------------------------------------------------------------------------------------------------
Steve Lerman 405.00 410.00 -5.00
- ---------------------------------------------------------------------------------------------------------------------------------
Successful Marketing
Group 20,502.47 3,013.96 3,013.96 3,018.96 11,455.59 Tenant evicted, do not expect
payment.
- ---------------------------------------------------------------------------------------------------------------------------------
Writer's Guild of
America 27,122.76 4,520.46 4,520.46 4,520.46 13,561.38 Tenant disputing commencement date
of expansion due to City's parking
requirements.
- ---------------------------------------------------------------------------------------------------------------------------------
Totals $163,498.75 $33,853.15 $23,855.10 $24,566.56 $81,223.94
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 48
EXHIBIT J - 24 pages
TN00R0-2.0 Rent Roll - December, 1997 Page: 1
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
2011 CORPORATION G.H. DEVELOPMENT 1,203 $0.00 $0.00 1997
1046 01-01-97 $2,165.40 $1.80 $0.00
W0362 36 Months $0.00 $0.00 $0.00
12-31-99 $50.89 $0.04 ------
---------- ------ $0.00
$2,216.29 $1.84
A. T. TRADE, INC. 4,222 $3,905.35 $0.93 1997
1042 02-01-97 $3,905.35 $0.93 $0.00
E0715 60 Months $0.00 $0.00 $0.00
01-31-02 $183.55 $0.04 ------
---------- ------ $0.00
$7,994.25 $1.89
AEROFLOT 1,160 $1,910.00 $1.65 1994
3002 05-06-94 $0.00 $0.00 $7.87
W0175 61 Months $29.97 $0.03 $0.00
05-31-99 $45.59 $0.04 ------
---------- ------ $7.87
$1,985.56 $1.71
AM. COMM. FOR SHAARE ZEDEK
MS. CHERYL FREIDMAN 1,896 $3,223.20 $1.70 1995
1004 12-20-95 $0.00 $0.00 $7.88
E0300 60 Months $47.40 $0.03 $0.00
12-14-00 $76.86 $0.04 ------
---------- ------ $7.88
$3,347.46 $1.77
AMERICAN CUSTOM COACHWORKS 3,433 $6,481.08 $1.89 1990
1008 01-01-94 $0.00 $0.00 $3.22
E0333 M x M $199.78 $0.06 $1.45
$157.00 $0.05 ------
---------- ------ $4.67
$6,837.86 $1.99
AMERICAN MARKET EXCHANGE CORP 1,980 $1,881.00 $0.95 1997
1057 10-29-97 $1,881.00 $0.95 $0.00
E0505 24 Months $0.00 $0.00 $0.00
10-31-99 $88.41 $0.04 ------
---------- ------ $0.00
$3,850.41 $1.94
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
2011 CORPORATION G.H. DEVELOPMENT 01-01-97 2 Months Rent Abatement $1,082.70
1046 03-01-97 $0.90 $1,082.70
W0362 07-01-97 $1.80 $2,165.40
A. T. TRADE, INC. 08-01-97 $1.85 $7,810.70
1042
E0715
AEROFLOT
3002
W0175
AM. COMM. FOR SHAARE ZEDEK
MS. CHERYL FREIDMAN
1004
E0300
AMERICAN CUSTOM COACHWORKS
1008
E0333
AMERICAN MARKET EXCHANGE CORP 11-29-97 $1.90 $3,762.00
1057
E0505
</TABLE>
<PAGE> 49
TN00R0-2.0 Rent Roll - December, 1997 Page: 2
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== =================== =========== =========
<S> <C> <C> <C> <C> <C> <C>
AMPERSAND FILMS/A&A, LLC DBA 1,907 $ 3,527.95 $1.85 1997
EVOLVE ENTERTAINMENT 12-30-96 $ 0.00 $0.00 $ 0.00
1045 30 Months $ 0.00 $0.00 $ 0.00
E0540 06-30-99 $ 82.91 $0.04 ------
----------- ----- $ 0.00
$ 3,610.86 $1.89
ANCHOR CLINIC, INC. DRS. BICK & 2,838 $ 2,823.81 $0.99 1996
ZIGHELBOIM 11-01-96 $ 2,991.73 $1.05 $10.03
1038 61 Months $ 0.00 $0.00 $ 0.00
E0605 11-30-01 $ 136.67 $0.05 ------
---------- ----- $10.03
$ 5,952.21 $2.10
ARDEN REALTY, LIMITED PARTNER 7,194 $12,949.20 $1.80 1995
1029 07-01-95 $ 0.00 $0.00 $ 7.88
E0700 60 Months $ 179.85 $0.03 $ 0.00
06-30-00 $ 308.53 $0.04 ------
---------- ----- $ 7.88
$13,437.58 $1.87
VACANT SPACE
12,436 $24,872.00 $2.00
W0600 $ 0.00 $0.00 $ 0.00
$ 0.00 $0.00 $ 0.00
$ 0.00 $0.00 ------
---------- ----- $ 0.00
$24,872.00 $2.00
BELLA KALINK 605 $ 1,210.00 $2.00 1996
1002 06-01-96 $ 0.00 $0.00 $10.03
E0210 24 Months $ 0.00 $0.00 $ 0.00
05-31-98 $ 28.44 $0.05 ------
---------- ----- $10.03
$ 1,238.44 $2.05
BOSLEY MEDICAL CENTER 9,859 $18,732.10 $1.90 1995
1016 12-02-95 $ 492.95 $0.05 $ 7.16
E0900 121 Months $ 221.83 $0.02 $ 0.00
12-30-05 $ 457.00 $0.05 ------
---------- ----- $ 7.16
$19,903.88 $2.02
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
AMPERSAND FILMSS/A&A, LLC DBA
EVOLVE ENTERTAINMENT
1045
E0540
ANCHOR CLINIC, INC. DRS. BICK & 07-01-97 $1.99 $5,647.62
ZIGHELBOIM 11-01-97 $2.05 $5,815.54
1038 11-01-98 $2.11 $5,990.55
E0700 11-01-99 $2.17 $6,170.29
ARDEN REALTY, LIMITED PARTNER
1029
E0700
VACANT SPACE
W0600
BELLA KALINK
1002
E0210
BOSLEY MEDICAL CENTER 12-01-97 $1.95 $19,225.05
1016 12-01-00 $2.25 $22,182.75
E0900
</TABLE>
<PAGE> 50
TN00R0-2.0 Rent Roll - December, 1997 Page: 3
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== =================== =========== =========
<S> <C> <C> <C> <C> <C> <C>
BOSLEY MEDICAL CENTER 6,303 $11,975.70 $1.90 1995
1016 11-01-96 $0.00 $0.00 $7.16
E0950 110 Months $ 141.82 $0.02 $0.00
12-31-99 $ 284.76 $0.05 -----
---------- ----- $7.16
$12,402.28 $1.97
BOSLEY MEDICAL CENTER 0 $ 3,177.48 $0.00 N/A
1016 12-02-95 $ 1,300.00- $0.00 $0.00
E0ZZZ TI REIMB/JANIT 121 Months $ 0.00 $0.00 $0.00
12-30-05 $ 0.00 $0.00 -----
---------- ----- $0.00
$ 1,877.48 $0.00
BOSLEY MEDICAL CENTER 16,160 $30,704.00 $1.90 1995
1016 12-02-95 $ 808.00 $0.05 $7.16
E1000 121 Months $ 363.60 $0.02 $0.00
12-30-05 $ 749.08 $0.05 -----
---------- ----- $7.16
$32,624.68 $2.02
BOSLEY MEDICAL CENTER
1016 260 $ 260.00 $1.00 N/A
ST001 STORAGE 12-02-95 $ 0.00 $0.00 $0.00
121 Months $ 0.00 $0.00 $0.00
12-30-05 $ 6.11 $0.02 -----
---------- ----- $0.00
$ 266.11 $1.02
BOSLEY MEDICAL CENTER 114 $ 142.50 $1.25 N/A
1016 12-01-96 $ 0.00 $0.00 $0.00
ST013 STORAGE 109 Months $ 0.00 $0.00 $0.00
12-30-05 $ 3.35 $0.03 -----
---------- ----- $0.00
$ 145.85 $1.28
CANTOR AND COMPANY 1,799 $ 3,921.82 $2.18 1993
1031 02-15-93 $ 0.00 $0.00 $8.03
E0445 60 Months $ 0.00 $0.00 $1.81
02-14-98 $ 92.16 $0.05 -----
---------- ----- $9.84
$4,013.98 $2.23
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
BOSLEY MEDICAL CENTER
1016
E0950
BOSLEY MEDICAL CENTER 12-02-95 $0.00 $1,877.48
1016
E0ZZZ TI TEIMB/JANIT
BOSLEY MEDICAL CENTER 12-01-97 $1.95 $31,512.00
1016 12-01-00 $2.25 $36,360.00
E1000
BOSLEY MEDICAL CENTER
1016
ST001 STORAGE
BOSLEY MEDICAL CENTER
1016
ST013 STORAGE
CANTOR AND COMPANY
1031
E0445
</TABLE>
<PAGE> 51
TN00R0-2.0 Rent Roll - December, 1997 Page: 4
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
CARGILE & COMPANY REALTORS 798 $1,329.40 $1.67 1997
1041 10-28-96 $ 0.00 $0.00 $0.00
E0407 61 Months $ 0.00 $0.00 $0.00
11-30-01 $ 31.24 $0.04 -----
--------- ----- $0.00
$1,360.64 $1.71
CENTEK CAPITAL GROUP 1,809 $3,165.75 $1.75 1997
1051 02-28-97 $ 0.00 $0.00 $0.00
E0275 36 Months $ 0.00 $0.00 $0.00
02-28-00 $ 74.40 $0.04 -----
--------- ----- $0.00
$3,240.15 $1.79
DAN KLORES ASSOCIATES, INC. 1,557 $2,880.45 $1.85 1997
1044 01-15-97 $ 0.00 $0.00 $0.00
E0503 24 Months $ 0.00 $0.00 $0.00
12-31-98 $ 67.69 $0.04 -----
--------- ----- $0.00
$2,948.14 $1.89
DR. CHARLES SADLER 3,058 $5,810.20 $1.90 1997
1047 03-15-97 $ 0.00 $0.00 $0.00
E0245 121 Months $ 0.00 $0.00 $0.00
03-31-07 $ 136.54 $0.04 -----
--------- ----- $0.00
$5,946.74 $1.94
DR. CYNTHIA CHABAY 2,005 $4,310.75 $2.15 1992
3013 11-01-92 $ 200.00 $0.10 $6.95
W0850 84 Months $ 0.00 $0.00 $2.88
10-31-99 $ 106.01 $0.05 -----
--------- ----- $9.83
$4,617.26 $2.30
DR. ELLIOT BLINDERMAN 1,448 $2,678.80 $1.85 N/A
1007 03-01-95 $ 0.00 $0.00 $0.00
E0312 M x M $ 0.00 $0.00 $0.00
$ 62.95 $0.04 -----
--------- ----- $0.00
$2,741.75 $1.89
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
CARGILE & COMPANY REALTORS 10-28-96 1 Months Rent Abatement $1,329.40
1041
E0407
CENTEK CAPITAL GROUP
1051
E0275
DAN KLORES ASSOCIATES, INC. 01-15-98 $1.90 $2,958.30
1044
E0503
DR. CHARLES SADLER
1047
E0245
DR. CYNTHIA CHABAY 11-01-96 $2.20 $4,411.00
3013 11-01-97 $2.25 $4,511.25
W0850 11-01-98 $2.30 $4,611.50
DR. ELLIOT BLINDERMAN
1007
E0312
</TABLE>
<PAGE> 52
TN00R0-2.0 Rent Roll - December, 1997 Page: 5
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
DR. GERALD MELLS 2,228 $4,690.77 $2.11 1993
3006 04-12-93 $ 0.00 $0.00 $8.03
W0330 61 Months $ 0.00 $0.00 $1.81
04-30-98 $ 0.00 $0.00 -----
--------- ------ $9.84
$4,690.77 $2.11
DR. ISAAC REGEV 1,607 $3,374.70 $2.10 1997
3012 10-15-92 $ 0.00 $0.00 $0.00
W0844 97 Months $ 0.00 $0.00 $0.00
10-31-00 $ 79.31 $0.05 -----
--------- ----- $0.00
$3,454.01 $2.15
DR. MARIE SZCZURAK 1,015 $1,806.70 $1.78 1995
1006 10-23-95 $ 0.00 $0.00 $7.88
E0310 60 Months $ 25.38 $0.03 $0.00
10-31-00 $ 43.05 $0.04 -----
--------- ----- $7.88
$1,875.13 $1.85
DR. RAFIK SARKISSIAN 1,778 $2,603.70 $1.46 1995
1018 06-01-92 $ 0.00 $0.00 $7.88
E0431 74 Months $ 44.45 $0.03 $0.00
07-31-98 $ 62.23 $0.03 -----
--------- ----- $7.88
$2,710.38 $1.52
DR. STEPHEN B. FIERSTEIN 2,713 $4,476.45 $1.65
1056 12-01-97 $ 0.00 $0.00 $0.00
R0145 120 Months $ 0.00 $0.00 $0.00
11-30-07 $ 105.20 $0.04 -----
--------- ----- $0.00
$4,581.65 $1.69
DR. STEPHEN P. SCHALL 1,887 $4,245.75 $2.25 1994
3014 08-22-94 $ 0.00 $0.00 $7.87
W0852 60 Months $ 48.75 $0.03 $0.00
08-31-99 $ 100.92 $0.05 -----
--------- ----- $7.87
$4,395.42 $2.33
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
DR. STEPHEN B. FIERSTEIN 06-01-00 $1.75 $4,747.75
1056 12-01-02 $1.85 $5,019.05
R0145 06-01-04 $1.95 $5,290.35
</TABLE>
<PAGE> 53
TN00R0-2.0 Rent Roll - December, 1997 Page: 6
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
DR. WILLIAM TANNER 1,518 $ 4,322.48 $2.85 1989
3009 04-01-89 $ 0.00 $0.00 $2.26
W0363 120 Months $ 106.76 $0.07 $0.90
3-31-99 $ 104.09 $0.07 ------
---------- ------ $3.16
$ 4,533.33 $2.99
DRS. DEWHIRTS & BROWNSON 2,488 $ 5,871,80 $2.36 1993
1005 02-22-93 $ 0.00 $0.00 $8.03
E0301 120 Months $ 0.00 $0.00 $1.82
02-21-03 $ 0.00 $0.00 ------
---------- ------ $9.85
$ 5,871.80 $2.36
ENGINEERING STORAGE AREA 32 $ 0.00 $0.00 N/A
1030 01-01-96 $ 0.00 $0.00 $0.00
ES1BL STORAGE M X M $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 0.00 $0.00
FIDELITY NATIONAL TITLE
1050 2,190 $ 1,916.25 $0.88 1997
W0890 04-12-97 $ 1,916.25 $0.88 $0.00
61 Months $ 0.00 $0.00 $0.00
05-11-02 $ 90.06 $0.04 ------
---------- ------ $0.00
$ 3,922.56 $1.79
FINEMAN, NITZBERG & WEST 520 $ 371.14 $0.71 N/A
AKA FINEMAN WEST & COMP 07-29-94 $ 0.00 $0.00 $0.00
3003 60 Months $ 0.00 $0.00 $0.00
ST006 STORAGE 07-31-99 $ 8.72 $0.02 ------
---------- ------ $0.00
$ 379.86 $0.73
FINEMAN, NITZBERG & WEST 9,520 $16,660.00 $1.75 1994
AKA FINEMAN WEST & COMP 07-29-94 $ 0.00 $0.00 $7.87
3003 60 Months $ 245.93 $0.03 $0.00
W0240 07-31-99 $ $397.29 $0.04 ------
---------- ------ $7.87
$17,303.22 $1.82
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
DR. WILLIAM TANNER
3009
W0363
DRS. DEWHIRTS & BROWNSON 02-22-98 $2.50 $6,220.00
1005 02-22-99 $2.60 $6,468.80
E0301 02-22-00 $2.70 $6,717.60
02-22-01 $2.80 $6,966.40
ENGINEERING STORAGE AREA
1030
ES1BL STORAGE
FIDELITY NATIONAL TITLE 05-12-97 $1.75 $3,832.50
1050 10-12-99 $1.93 $4,226.70
W0890
FINEMAN, NITZBERG & WEST
AKA FINEMAN WEST & COMP
30033
ST006 STORAGE
FINEMAN, NITZBERG & WEST
AKA FINEMAN WEST & COMP
3003
W0240
</TABLE>
<PAGE> 54
TN00R0-2.0 Rent Roll - December, 1997 Page: 7
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
FIRST FEDERAL CREDIT CORP 0 $ 3,167.20 $0.00 1995
1020 03-01-96 $ 0.00 $0.00 $0.00
E0501 60 Months $ 42.80 $0.00 $0.00
02-28-01 $ 75.44 $0.00 -----
---------- ----- $0.00
$ 3,285.44 $0.00
FIRST FIDELITY CAPITAL 2,000 $ 1,850.00 $0.93 1997
1053 08-01-97 $ 1,850.00 $0.93 $0.00
W0437 63 Months $ 0.00 $0.00 $0.00
10-31-02 $ 86.95 $0.04 -----
---------- ----- $0.00
$ 3,786.95 $1.89
FRESHMAN MARANTZ 16,476 $26,691.12 $1.62 1996
1015 08-01-96 $ 0.00 $0.00 $9.33
E0800 120 Months $ 0.00 $0.00 $0.00
07-31-06 $ 627.24 $0.04 -----
---------- ----- $9.33
$27,318.36 $1.66
FRESHMAN MARANTZ 120 $ 150.00 $1.25 N/A
1015 07-01-97 $ 0.00 $0.00 $0.00
ST008 STORAGE 109 Months $ 0.00 $0.00 $0.00
07-31-06 $ 3.53 $0.03 -----
---------- ----- $0.00
$ 153.53 $1.28
FRESHMAN MARANTZ 416 $ 478.40 $1.15 N/A
1015 08-01-96 $ 0.00 $0.00 $0.00
ST002 STORAGE 120 Months $ 0.00 $0.00 $0.00
07-31-06 $ 11.24 $0.03 -----
---------- ----- $0.00
$ 489.64 $1.18
GERNSBACHER & MCGARRIGLE 2,675 $ 4,815.00 $1.80 1995
1035 07-01-95 $ 0.00 $0.00 $7.88
E0710 60 Months $ 66.88 $0.03 $0.00
06-30-00 $ 114.72 $0.04 -----
---------- ----- $7.88
$ 4,996.60 $1.87
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
FIRST FEDERAL CREDIT CORP
1020
E0501
FIRST FIDELITY CAPITAL 11-01-97 $1.85 $3,700.00
1053
W0437
FRESHMAN MARANTZ
1015
E0800
FRESHMAN MARANTZ
1015
ST008 STORAGE
FRESHMAN MARANTZ
1015
ST002 STORAGE
GERNSBACHER & MCGARRIGLE
1035
E0710
</TABLE>
<PAGE> 55
TN00R0-2.0 Rent Roll - December, 1997 Page: 8
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
GERNSBACHER & MCGARRIGLE 102 $ 127.50 $1.25 N/A
1035 11-01-96 $ 0.00 $0.00 $0.00
ST018 STORAGE 44 Months $ 0.00 $0.00 $0.00
06-30-00 $ 3.00 $0.03 -----
---------- ----- $0.00
$ 130.50 $1.28
GOLDEN & GOLDBERG 4,658 $ 7,918.60 $1.70 1995
1019 01-15-95 $ 0.00 $0.00 $7.88
E0455 66 Months $ 0.00 $0.00 $0.00
07-15-00 $ 0.00 $0.00 -----
---------- ----- $7.88
$ 7,918.60 $1.70
GOLDEN & GOLDBERG 0 $ 97.50 $0.00 N/A
1019 02-01-96 $ 0.00 $0.00 $0.00
EZZZZ TI REIMBURSEMENT 53 Months $ 0.00 $0.00 $0.00
07-15-00 $ 0.00 $0.00 -----
---------- ----- $0.00
$ 97.50 $0.00
GOLDEN & GOLDBERG 384 $ 384.00 $1.00 N/A
1019 01-15-95 $ 0.00 $0.00 $0.00
ST7&9 STORAGE 66 Months $ 0.00 $0.00 $0.00
07-15-00 $ 0.00 $0.00 -----
---------- ----- $0.00
$ 384.00 $1.00
GRANT & TANI, INC 241 $ 241.00 $1.00 N/A
3016 04-01-93 $ 0.00 $0.00 $0.00
ST012 STORAGE 84 Months $ 0.00 $0.00 $0.00
03-31-00 $ 5.66 $0.02 -----
--------- ----- $0.00
$ 246.66 $1.02
GRANT & TANI, INC 6,190 $11,761.00 $1.90 1995
3016 04-01-93 $ 0.00 $0.00 $7.88
W1000 84 Months $ 154.75 $0.03 $0.00
03-31-00 $ 280.02 $0.05 -----
---------- ----- $7.88
$12,195.77 $1.97
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
GERNSBACHER & MCGARRIGLE
1035
ST018 STORAGE
GOLDEN & GOLDBERG
1019
E0455
GOLDEN & GOLDBERG
1019
EZZZZ TI REIMBURSEMENT
GOLDEN & GOLDBERG
1019
ST7&9 STORAGE
GRANT & TANI, INC
3016
ST012 STORAGE
GRANT & TANI, INC
3016
W1000
</TABLE>
<PAGE> 56
TN00R0-2.0 Rent Roll - December, 1997 Page: 9
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
GRANT & TANI, INC. 1,867 $ 1,773.65 $0.95 1996
3016 02-01-97 $ 1,204.60 $0.65 $ 0.00
W1050 38 Months $ 0.00 $0.00 $ 0.00
03-31-00 $ 69.99 $0.04 ------
---------- ----- $ 0.00
$ 3,048.24 $1.63
INVESTORS TITLE COMPANY 1,901 $ 3,802.00 $2.00 1992
1009 02-07-92 $ 0.00 $0.00 $ 6.95
E0345 61 Months $ 0.00 $0.00 $ 2.88
21-31-97 $ 89.35 $0.05 ------
---------- ----- $ 9.83
$ 3,891.35 $2.05
JAMAN, KAHN & ASSOC. 2,729 $ 5,103.23 $1.87 1996
1037 06-15-96 $ 0.00 $0.00 $10.03
E0208 60 Months $ 0.00 $0.00 $ 0.00
06-30-01 $ 119.93 $0.04 ------
---------- ----- $10.03
$ 5,223.16 $1.91
JAMAN, KAHN & ASSOC. 92 $ 115.00 $1.37 N/A
1037 01-01-97 $ 0.00 $0.00 $ 0.00
ST010 STORAGE 54 Months $ 0.00 $0.00 $ 0.00
06-30-01 $ 2.70 $0.03 ------
---------- ----- $ 0.88
$ 117.70 $1.28
JOHN WRIGHT PUBLISHING, INC. 1,798 $ 1,889.55 $1.05 1997
1055 08-01-97 $ 1,889.55 $1.05 $ 0.00
W0350 36 Months $0.00 $0.00 $ 0.00
07-31-00 $ $88.81 $0.05 ------
---------- ----- $ 0.00
$ 3,867.91 $2.15
K & C GROUP, INC. 6,395 $10,848.10 $1.70 NNN
2001 02-05-88 $ 784.20 $0.12 $ 0.00
R0151 126 Months $ 1,564.41 $0.24 $ 0.00
08-03-98 $ 310.12 $0.05 ------
---------- ----- $ 0.00
$13,506.83 $2.11
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
GRANT & TANI, INC. 06-01-97 $1.60 $2,978.25
3016 02-01-98 $1.90 $3,547.30
W1050
INVESTORS TITLE COMPANY
1009
E0345
JAMAN, KAHN & ASSOC. 06-15-96 1 Months Rent Abatement $4,164.73
1037
E0208
JAMAN, KAHN & ASSOC.
1037
ST010 STORAGE
JOHN WRIGHT PUBLISHING, INC. 09-01-97 $2.10 $3,779.10
1055
W0350
K & C GROUP, INC. 12-01-96 $1.82 $11,632.30
2001
R0151
</TABLE>
<PAGE> 57
TN00R0-2.0 Rent Roll - December, 1997 Page: 10
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
K&C GROUP, INC. 178 $ 178.00 $1.00 N/A
2001 02-05-88 $ 0.00 $0.00 $ 0.00
ST011 STORAGE 126 Months $ 0.00 $0.00 $ 0.00
08-03-98 $ 4.18 $0.02 ------
---------- ----- $ 0.00
$ 182.18 $1.02
KLEIN, MANDELBLATT & CO 2,298 $ 4,182.36 $1.82 1996
3004 08-25-96 $ 0.00 $0.00 $10.03
W0250 60 Months $ 0.00 $0.00 $ 0.00
08-30-01 $ 0.00 $0.00 ------
---------- ----- $10.03
$ 4,182.36 $1.82
KOLODNY & ANTEAU 2,021 $ 1,818.90 $0.90 1997
1049 04-21-97 $ 1,818.90 $0.90 $ 0.00
W0840 120 Months $ 0.00 $0.00 $ 0.00
04-30-07 $ 85.49 $0.04 ------
---------- ----- $ 0.00
$ 3,723.29 $1.84
KOLODNY & ANTEAU
1049 11,813 $10,631.70 $0.90 1997
W0900 04-21-97 $10,631.70 $0.90 $ 0.00
120 Months $ 0.00 $0.00 $ 0.00
04-30-07 $ 499.69 $0.04 ------
---------- ----- $ 0.00
$21,763.09 $1.84
LPG USA, INC. 1,865 $ 1,773.75 $0.95 1997
1043 05-09-97 $ 0.00 $0.00 $ 0.00
E0502 SUITE 501E 61 Months $ 0.00 $0.00 $ 0.00
05-31-02 $ 41.68 $0.02 ------
---------- ----- $ 0.00
$ 1,815.43 $0.97
MAAZDA TRAVEL 1,633 $ 3,674.25 $2.25 1993
1013 07-01-93 $ 0.00 $0.00 $ 8.03
E0423 60 Months $ 0.00 $0.00 $ 1.81
06-30-98 $ 86.34 $0.05 ------
---------- ----- $ 9.84
$ 3,760.59 $2.30
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
K&C GROUP, INC.
2001
ST011 STORAGE
KLEIN, MANDELBLATT & CO 10-01-96 2 Months Rent Abatement $ 2,091.18
3004
W0250
KOLODNY & ANTEAU 10-21-97 $1.80 $ 3,637.80
1049 10-21-99 $2.00 $ 4,042.00
W0840
KOLODNY & ANTEAU 10-21-97 $1.80 $21,263.40
1049 10-21-99 $2.00 $23,626.00
W0900
LPG USA, INC. 09-09-98 $1.36 $ 2,537.45
1043 10-09-98 $1.85 $ 3,452.25
E0502 SUITE 501E
MAAZDA TRAVEL
1013
E0423
E0333
</TABLE>
<PAGE> 58
TN00R0-2.0 Rent Roll - December, 1997 Page: 11
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
MAGIC JOHNSON ENTERPRISES 3,057 $5,808.30 $1.90 1994
3017 12-01-94 $ 0.00 $0.00 $ 7.87
W1060 56 Months $ 78.97 $0.03 $ 0.00
07-31-99 $ 138.35 $0.05 ------
--------- ----- $ 7.87
$6,025.62 $1.97
MARKETING MIX, INC 2,562 $4,739.70 $1.85 1997
1052 03-08-97 $ 0.00 $0.00 $ 0.00
E0404 64 Months $ 0.00 $0.00 $ 0.00
06-30-02 $ 111.38 $0.04 ------
--------- ----- $ 0.00
$4,851.08 $1.89
MARTIN MANAGEMENT 2,805 $4,375.80 $1.56 1996
1010 12-01-95 $ 392.70 $0.14 $10.03
E0401 61 Months $ 0.00 $0.00 $ 0.00
12-30-00 $ 112.06 $0.04 ------
--------- ----- $10.03
$4,880.56 $1.74
MCDERMOTT, BOROCZI & SMITHYMAN 1,187 $2,017.90 $1.70 1997
1048 05-01-97 $ 0.00 $0.00 $ 0.00
W0360 61 Months $ 0.00 $0.00 $ 0.00
06-14-02 $ 47.42 $0.04 ------
--------- ----- $ 0.00
$2,065.32 $1.74
VACANT SPACE 1,827 $3,654.00 $2.00
E0665 $ 0.00 $0.00 $ 0.00
$ 0.00 $0.00 $ 0.00
$ 0.00 $0.00 ------
--------- ------ $ 0.00
$3,654.00 $2.00
MS MAX 826 $1,599.00 $1.94 1995
1023 07-20-95 $ 0.00 $0.00 $ 7.88
E0515 36 Months $ 20.65 $0.03 $ 0.00
07-20-98 $ 38.06 $0.05 ------
--------- ----- $ 7.88
$1,657.71 $2.01
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
MAGIC JOHNSON ENTERPRISES
3017
W1060
MARKETING MIX, INC 03-08-97 3 Months Rent Abatement $4,739.70
1052
E0404
MARTIN MANAGEMENT 12-01-96 $1.70 $4,768.50
1010 06-01-98 $1.96 $5,497.80
E0401
MCDERMOTT, BOROCZI & SMITHYMAN 05-01-97 1 Months Rent Abatement $2,017.90
1048 06-01-97 1 Months Rent Abatement $1,008.95
W0360 12-15-99 $1.85 $2,195.95
VACANT SPACE
E0665
MS MAX
1023
E0515
</TABLE>
<PAGE> 59
TN00R0-2.0 Rent Roll - December, 1997 Page: 12
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
MSB MANAGEMENT CORP 1,770 $3,363.00 $1.90 1995
1022 10-30-95 $ 177.00 $0.10 $7.88
E0509 30 Months $ 44.25 $0.03 $0.00
04-30-98 $ 84.23 $0.05 -----
--------- ----- $7.88
$3,668.48 $2.07
NEIL KAYE 1,867 $2,243.51 $1.20 1995
3001 12-05-95 $1,288.23 $0.69 $7.16
W0101 DELI, GR-11, 1,047 SF 85 Months $ 23.56 $0.01 $0.00
12-31-02 $ 83.55 $0.04 -----
--------- ----- $7.16
$3,638,85 $1.95
NEIL KAYE 0 $ 0.00 $0.00 1995
3001 12-05-95 $ 0.00 $0.00 $7.16
W0102 SUNDRY, GR-15, 820 SF 85 Months $ 18.45 $0.00 $0.00
12-31-02 $ 0.43 $0.00 -----
--------- ----- $7.16
$ 18.88 $0.00
VACANT SPACE 3,343 $6,686.00 $2.00
$ 0.00 $0.00 $0.00
E0601 $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
--------- ----- $0.00
$6,686.00 $2.00
OFFICE OF THE BUILDING 1,471 $ 0.00 $0.00 N/A
1036 12-20-96 $ 0.00 $0.00 $0.00
E0535 M x M $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
--------- ----- $0.00
$ 0.00 $0.00
RICHARD FRAADE/GARY WOLFE 2,590 $4,532.50 $1.75 1996
RICHARD FRAADE 07-01-94 $ 0.00 $0.00 $9.33
1032 48 Months $ 0.00 $0.00 $0.00
E0530 06-30-98 $ 106.51 $0.04 -----
--------- ----- $9.33
$4,639.01 $1.79
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
MSB MANAGEMENT CORP 05-01-97 $2.00 $3,540.00
1022
E0509
NEIL KAYE 12-01-96 $1.89 $3,531.74
3001 12-01-98 $1.55 $2,893.85
W0101 DELI, GR-11, 1,047 SF 12-01-99 $1.95 $3,640.65
NEIL KAYE
3001
W0102 SUNDRY, GR-15, 820 SF
VACANT SPACE
E0601
OFFICE OF THE BUILDING
1036
E0535
RICHARD FRAADE/GARY WOLFE
RICHARD FRAADE
1032
E0530
</TABLE>
<PAGE> 60
TN00R0-2.0 Rent Roll - December, 1997 Page: 13
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ==========
<S> <C> <C> <C> <C> <C> <C>
RICHARD FRAADE/
GARY WOLFE RICHARD FRAADE 96 $ 96.00 $1.00 N/A
1032 07-01-94 $ 0.00 $0.00 $0.00
ST016 STORAGE 48 Months $ 0.00 $0.00 $0.00
06-30-98 $ 2.26 $0.02 -----
---------- ----- $0.00
$ 98.26 $1.02
SCHNEIDER, GOLDBERG & YUEN
C/O ANU KHANDELWAL 236 $ 295.00 $1.25 N/A
3019 07-01-95 $ 0.00 $0.00 $0.00
ST014 STORAGE 63 Months $ 0.00 $0.00 $0.00
09-30-00 $ 0.00 $0.00 ------
---------- ----- $0.00
$ 295.00 $1.25
SCHNEIDER, GOLDEBERG & YUEN
C/O ANU KHANDELWAL 11,852 $20,148.40 $1.70 1995
3019 07-01-95 $ 0.00 $0.00 $7.88
W0700 63 Months $ 296.30 $0.02 $0.00
09-30-00 $ 0.00 $0.00 -----
---------- ----- $7.88
$20,444.70 $1.73
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR 16,252 $ 8,856,16 $0.54 N/A
1000 04-01-70 $ 0.00 $0.00 $0.00
E0100 360 Months $ 4,300.27 $0.26 $0.91
03-31-00 $ 309.18 $0.02 -----
---------- ----- $0.91
$13,465.61 $0.83
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR 0 $ 2,859.13 $0.00 N/A
1000 04-01-70 $ 114.37 $0.00 $0.00
ESIGN SIGNAGE 360 Months $ 0.00 $0.00 $0.00
03-31-00 $ 69.88 $0.00 -----
---------- ----- $0.00
$ 3,043.38 $0.00
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR 461 $ 0.00 $0.00 N/A
1000 04-01-70 $ 0.00 $0.00 $0.00
RST15 STORAGE 360 Months $ 0.00 $0.00 $0.00
03-31-00 $ 0.00 $0.00 -----
---------- ----- $0.00
$ 0.00 $0.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
RICHARD FRAADE/
GARY WOLFE RICHARD FRAADE
1032
ST016 STORAGE
SCHNEIDER, GOLDBERG & YUEN
C/O ANU KHANDELWAL
3019
ST014 STORAGE
SCHNEIDER, GOLDEBERG & YUEN
C/O ANU KHANDELWAL
3019
W0700
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR
1000
E0100
SOUTHERN CALIFORNIA SAVINGS 01-01-97 P 0.00% 0.00% 0.00% $0.00 $2,973.50
MS. DIANE DEEB - COR 01-01-98 P 0.00% 0.00% 0.00% $0.00 $3,092.42
1000 01-01-99 P 0.00% 0.00% 0.00% $0.00 $3,216.12
ESIGN SIGNAGE 01-01-00 P 0.00% 0.00% 0.00% $0.00 $3,344.76
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR
1000
RST15 STORAGE
</TABLE>
<PAGE> 61
TN00R0-2.0 Rent Roll - December, 1997 Page: 14
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ==========
<S> <C> <C> <C> <C> <C> <C>
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - COR 749 $ 1,299.28 $1.73 N/A
1000 04-01-70 $ 26.29 $0.04 $ 0.00
ST3-5 STORAGE 360 Months $ 0.00 $0.00 $ 0.00
03-31-00 $ 31.15 $0.04 ------
---------- ----- $ 0.00
$ 1,356.72 $1.81
STEVE LERMAN 3,594 $ 7,008.54 $1.95 1996
1001 12-01-95 $ 0.00 $0.00 $10.03
E0201 60 Months $ 0.00 $0.00 $ 0.00
11-30-00 $ 164.70 $0.05 ------
---------- ----- $10.03
$ 7,173.24 $2.00
SUCCESSFUL MARKETING GROUP 1,168 $ 1,472.38 $0.91 1996
1040 08-08-96 $ 1,472.38 $0.91 $10.03
E0517 25 Months $ 0.00 $0.00 $ 0.00
08-31-98 $ 69.20 $0.04 ------
---------- ----- $10.03
$ 3,013.96 $1.86
THE MANAGEMENT GROUP DBA
THE MANDEL COMPANY 2,270 $ 4,086.00 $1.80 1995
1014 05-01-95 $ 0.00 $0.00 $ 7.88
E0725 84 Months $ 56.75 $0.03 $ 0.00
04-30-02 $ 97.35 $0.04 ------
---------- ----- $ 7.88
$ 4,240.10 $1.87
THE MANAGEMENT GROUP DBA 1,400 $ 2,45O.00 $1.75 1997
THE MANDEL COMPANY 05-01-97 $ 0.00 $0.00 $ 0.00
1014 60 Months $ 0.00 $0.00 $ 0.00
E0726 MANDEL EXPANSION 04-30-02 $ 57.58 $0.04 ------
---------- ----- $ 0.00
$ 2,507.58 $1.79
UNIVERSAL TRADE AND TOURISM, I 442 $ 882.00 $2.00 1997
1054 05-01-97 $ 0.00 $0.00 $ 0.00
W0361 12 Months $ 0.00 $0.00 $ 0.00
04-30-98 $ 20.73 $0.05 ------
---------- ----- $ 0.00
$ 902.73 $2.04
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
SOUTHERN CALIFORNIA SAVINGS 01-01-97 P 100.00% 0.0% 0.0% $1.77 $1,325.57
MS. DIANE DEEB - COR
1000
ST3-5 STORAGE
STEVE LERMAN
1001
E0201
SUCCESSFUL MARKETING GROUP 03-08-97 $0.97 $1,562.59
1040 04-08-97 $1.82 $2,944.76
E0517
THE MANAGEMENT GROUP DBA
THE MANDEL COMPANY
1014
E0725
THE MANAGEMENT GROUP DBA
THE MANDEL COMPANY
1014
E0726 MANDEL EXPANSION
UNIVERSAL TRADE AND TOURISM, I
1054
W0361
</TABLE>
<PAGE> 62
TN00R0-2.0 Rent Roll - December, 1997 Page: 15
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ==========
<S> <C> <C> <C> <C> <C> <C>
WARREN ZIDE DBA: HAM & EGGS 1,517 $ 2,654.75 $1.75 1996
1039 08-01-96 $ 0.00 $0.00 $10.03
E0615 36 Months $ 0.00 $0.00 $ 0.00
07-31-99 $ 62.39 $0.04 ------
---------- ----- $10.03
$ 2,717.14 $1.79
WEST COAST GROUND SERVICES 1,750 $ 3,182.50 $1.82 1994
1028 05-01-96 $ 0.00 $0.00 $ 7.87
E0616 37 Months $ 45.21 $0.03 $ 0.00
05-31-99 $ 75.85 $0.04 ------
---------- ----- $ 7.87
$ 3,303.56 $1.89
WEST COAST GROUND SERVICES 993 $ 1,737.75 $1.75 1994
3015 05-06-94 $ 0.00 $0.00 $ 7.87
W0880 61 Months $ 25.65 $0.03 $ 0.00
05-31-99 $ 41.44 $0.04 ------
---------- ----- $ 7.87
$ 1,804.84 $1.82
WILSHIRE PR & ADVERTISING 1,314 $ 2,825.10 $2.15 1992
1003 02-01-93 $ 0.00 $0.00 $ 6.95
E0225 60 Months $ 0.00 $0.00 $ 2.88
01-31-98 $ 66.39 $0.05 ------
---------- ----- $ 9.83
$ 2,891.49 $2.20
WRITER'S GUILD OF AMERICA 7,339 $10,396.92 $1.42 1997
2000 11-01-91 $ 48.92- $0.01- $ 0.00
R0135 243 Months $ 0.00 $0.00 $ 0.00
01-31-12 $ 0.00 $0.00 ------
---------- ----- $ 9.83
$10,348.00 $1.41
WRITER'S GUILD OF AMERICA 3,206 $ 4,520.46 $1.41 1997
2000 07-01-97 $ 0.00 $0.00 $ 0.00
R0143 RETAIL VACANT 175 Months $ 0.00 $0.00 $ 0.00
01-31-12 $ 0.00 $0.00 ------
---------- ----- $ 0.00
$ 4,520.46 $1.41
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
WARREN ZIDE DBA: HAM & EGGS 08-01-96 4 Months Rent Abatement $1,327.37
1039
E0615
WEST COAST GROUND SERVICES
1028
E0616
WEST COAST GROUND SERVICES
3015
W0880
WILSHIRE PR & ADVERTISING
1003
E0225
WRITER'S GUILD OF AMERICA 11-01-96 $1.75 $12,843.25
2000 02-01-97 $1.41 $10,348.00
R0135 02-01-02 $1.62 $11,889.18
02-01-07 $1.84 $13,503.76
WRITER'S GUILD OF AMERICA
2000 07-01-02 $1.62 $ 5,193.72
R0143 RETAIL VACANT 07-01-07 $1.84 $ 5,899.04
</TABLE>
<PAGE> 63
TN00R0-2.0 Rent Roll - December, 1997 Page: 16
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 247 $ 494.00 $2.00
$ 0.00 $0.00 $0.00
E0255 MAIL ROOM $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 494.00 $2.00
VACANT SPACE 4,739 $ 9,478.00 $2.00
$ 0.00 $0.00 $0.00
E0265 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 9,478.00 $2.00
VACANT SPACE 1,637 $ 3,274,00 $2.00
$ 0.00 $0.00 $0.00
E0270 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 3,274.00 $2.00
VACANT SPACE 1,532 $ 3,064.00 $2.00
$ 0.00 $0.00 $0.00
E0305 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 3,064.00 $2.00
VACANT SPACE 5,820 $11,640.00 $2.00
$ 0.00 $0.00 $0.00
E0350 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$11,640.00 $2.00
VACANT SPACE 748 $ 1,496.00 $2.00
$ 0.00 $0.00 $0.00
E0408 $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 1,496.00 $2.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
E0255 MAIL ROOM
VACANT SPACE
E0265 VACANT
VACANT SPACE
E0270 VACANT
VACANT SPACE
E0305 VACANT
VACANT SPACE
E0350 VACANT
VACANT SPACE
E0408
</TABLE>
<PAGE> 64
TN00R0-2.0 Rent Roll - December, 1997 Page: 17
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 1,497 $2,994.00 $2.00
$ 0.00 $0.00 $0.00
E0435 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$2,994.00 $2.00
VACANT SPACE 1,285 $2,570.00 $2.00
$ 0.00 $0.00 $0.00
E0450 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$2,570.00 $2.00
VACANT SPACE 4,279 $8,558.00 $2.00
$ 0.00 $0.00 $0.00
E0520 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$8,558.00 $2.00
VACANT SPACE 1,609 $3,218.00 $2.00
$ 0.00 $0.00 $0.00
E0630 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$3,218.00 $2.00
VACANT SPACE 1,036 $2,072.00 $2.00
$ 0.00 $0.00 $0.00
E0655 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$2,072.00 $2.00
VACANT SPACE 4,579 $9,158.00 $2.00
$ 0.00 $0.00 $0.00
E0660 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$9,158.00 $2.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
E0435 VACANT
VACANT SPACE
E0450 VACANT
VACANT SPACE
E0520 VACANT
VACANT SPACE
E0630 VACANT
VACANT SPACE
E0655 VACANT
VACANT SPACE
E0660 VACANT
</TABLE>
<PAGE> 65
TN00R0-2.0 Rent Roll - December, 1997 Page: 18
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 1,087 $2,174.00 $2.00
$ 0.00 $0.00 $0.00
E0675 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$2,174.00 $2.00
VACANT SPACE 77 $ 0.00 $0.00
$ 0.00 $0.00 $0.00
E0730 ROOF ACCESS ROOM $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 0.00 $0.00
VACANT SPACE 1,421 $2,842.00 $2.00
$ 0.00 $0.00 $0.00
E0735 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $7.87
$2,842.00 $2.00
VACANT SPACE -2,598 $5,196.00- $2.00
$ 0.00 $0.00 $0.00
EZ999 EAST TOWER MEASUREMENT VARIANCE $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$5,196.00- $2.00
VACANT SPACE 163 $ 285.25 $1.75
$ 0.00 $0.00 $0.00
R0000 RETAIL/STORAGE $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 285.00 $2.00
VACANT SPACE -290 $ 0.00 $0.00
$ 0.00 $0.00 $0.00
RZ999 RETAIL MEASUREMENT VARIANCE $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 0.00 $0.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
E0675 VACANT
VACANT SPACE
E0730 ROOF ACCESS ROOM
VACANT SPACE
E0735 VACANT
VACANT SPACE
EZ999 EAST TOWER MEASUREMENT VARIANCE
VACANT SPACE
R0000 RETAIL/STORAGE
VACANT SPACE
RZ999 RETAIL MEASUREMENT VARIANCE
</TABLE>
<PAGE> 66
TN00R0-2.0 Rent Roll - December, 1997 Page: 19
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 777 $ 971.25 $1.25
$ 0.00 $0.00 $0.00
ST017 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$ 971.25 $1.25
VACANT SPACE 284 $ 0.00 $0.00
$ 0.00 $0.00 $0.00
ST0P2 ENGINEERS SHOP $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$ 0.00 $0.00
VACANT SPACE -342 $ 0.00 $0.00
$ 0.00 $0.00 $0.00
SZ999 STORAGE MEASUREMENT VARIANCE $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$ 0.00 $0.00
VACANT SPACE 7,623 $14,864.85 $1.95
$ 0.00 $0.00 $0.00
W0100 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$14,864.85 $1.95
VACANT SPACE 176 $ 352.00 $2.00
$ 0.00 $0.00 $0.00
W0301 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$ 352.00 $2.00
VACANT SPACE 3,727 $ 7,454.00 $2.00
$ 0.00 $0.00 $0.00
W0340 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
---------- ----- $0.00
$ 7,454.00 $2.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
ST017 VACANT
VACANT SPACE
ST0P2 ENGINEERS SHOP
VACANT SPACE
SZ999 STORAGE MEASUREMENT VARIANCE
VACANT SPACE
W0100 VACANT
VACANT SPACE
W0301 VACANT
VACANT SPACE
W0340 VACANT
</TABLE>
<PAGE> 67
TN00R0-2.0 Rent Roll - December, 1997 Page: 20
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 673 $ 1,346.00 $2.00
$ 0.00 $0.00 $0.00
W0435 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 1,346.00 $2.00
VACANT SPACE 3,326 $ 6,652.00 $2.00
$ 0.00 $0.00 $0.00
W0440 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 6,652.00 $2.00
VACANT SPACE 3,512 $ 7,024.00 $2.00
$ 0.00 $0.00 $0.00
W0448 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 7,024.00 $2.00
VACANT SPACE 2,927 $ 5,854.00 $2.00
$ 0.00 $0.00 $0.00
W0457 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 5,854.00 $2.00
VACANT SPACE 13,311 $26,622.00 $2.00
$ 0.00 $0.00 $0.00
W0500 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$26,622.00 $2.00
VACANT SPACE 1,005 $ 2,010.00 $2.00
$ 0.00 $0.00 $0.00
W0895 VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 ------
---------- ------ $0.00
$ 2,010.00 $2.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
W0435 VACANT
VACANT SPACE
W0440 VACANT
VACANT SPACE
W0448 VACANT
VACANT SPACE
W0457 VACANT
VACANT SPACE
W0500 VACANT
VACANT SPACE
W0895 VACANT
</TABLE>
<PAGE> 68
TN00R0-2.0 Rent Roll - December, 1997 Page: 21
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
VACANT SPACE 934 $ 0.00 $0.00
$ 0.00 $0.00 $0.00
WBL03 BUILDING STORAGE $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
--------- ----- $0.00
$ 0.00 $0.00
VACANT SPACE 4,231 $8,250.45 $1.95
$ 0.00 $0.00 $0.00
WML01 WEST MEZZANINE VACANT $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
--------- ----- $0.00
$8,250.45 $1.95
VACANT SPACE -3,535 $7,070.00- $2.00
$ 0.00 $0.00 $0.00
WZ999 WEST TOWER MEASUREMENT VARIANC $ 0.00 $0.00 $0.00
$ 0.00 $0.00 -----
--------- ----- $0.00
$7,070.00- $2.00
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
VACANT SPACE
WBL03 BUILDING STORAGE
VACANT SPACE
WML01 WEST MEZZANINE VACANT
VACANT SPACE
WZ999 WEST TOWER MEASUREMENT VARIANC
</TABLE>
<PAGE> 69
TN00R0-2.0 Rent Roll - December, 1997 Page: 22
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
Time: 09:14 AM
Building SF - 325,283
<TABLE>
<CAPTION>
Base Rent
Escalation Rental
Expense Recovery Abatement Base/Stop
Tenant Name Commence Beverly Hills Tax Starts Oper. Exp.
Tenant Number Term Total Rental Rate # of Months Prop. Tax
Suite Rentable SF Expiration Mo. Dollars $/SF Mo. Amount Total
============= =========== ========== ======================== =========== ======
<S> <C> <C> <C> <C> <C> <C>
* TOTAL OCCUPIED 240,180 $384,262.17
$ 34,662.18
$ 8,394.42
$ 8,617.18
-----------
$435,935.95
* TOTAL VACANT 85,103 $167,663.80
*** GRAND TOTAL 325,283 $551,925.97
$ 34,662.18
$ 8,394.42
$ 8,617.18
-----------
$603,599.75
NUMBER OF TENANTS 66
</TABLE>
<TABLE>
<CAPTION>
Tenant Name ----------- Consumer Price Index / Stepped Rent -----------
Tenant Number Index - Rates - - Stepped Amount -
Suite Adj. Date Type % Flr Cap $/SF $'s
============= ========= ==== ===== === === ==== =========
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 70
TN02RO Rent Roll: Tenant Summary Page: 23
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
December, 1997 Time: 09:15 AM
<TABLE>
<CAPTION>
Tenant Rentable SF Monthly Rent
====== =========== ============
<S> <C> <C>
2011 CORPORATION G.H. DEVELOPMENT 1,203 2,216.29
A. T. TRADE, INC. 4,222 7,994.25
AEROFLOT 1,160 1,985.56
AM. COMM. FOR SHAARE ZEDEK MS. CHERYL FREIDMAN 1,896 3,347.46
AMERICAN CUSTOM COACHWORKS 3,433 6,837.86
AMERICAN MARKET EXCHANGE CORP 1,980 3,850.41
AMPERSAND FILMS/A&A, LLC DBA EVOLVE ENTERTAINMENT 1,907 3,610.86
ANCHOR CLINIC, INC. DRS. BICK & ZIGHELBOIM 2,838 5,952.21
ARDEN REALTY, LIMITED PARTNER 7,194 13,437.58
BAKER WINOKUR RYDER 12,436 0.00
BELLA KALINK 605 1,238.44
BOSLEY MEDICAL CENTER 32,696 67,220.28
CANTOR AND COMPANY 1,799 4,013.98
CARGILE & COMPANY REALTORS 798 1,360.64
CENTEK CAPITAL GROUP 1,809 3,240.15
DAN KLORES ASSOCIATES, INC. 1,557 2,948.14
DR. CHARLES SADLER 3,058 5,946.74
DR. CYNTHIA CHABAY 2,005 4,617.26
DR. ELLIOT BLINDERMAN 1,448 2,741.75
DR. GERALD MELLS 2,228 4,690.77
DR. ISAAC REGEV 1,607 3,454.01
DR. MARIE SZCZURAK 1,015 1,875.13
DR. RAFIK SARKISSIAN 1,778 2,710.38
DR. STEPHEN B. FIERSTIEN 4,600 8,977.07
DR. WILLIAM TANNER 1,518 4,533.33
DRS. DEWHIRTS & BROWNSON 2,488 5,871.80
ENGINEERING STORAGE AREA 32 0.00
FIDELITY NATIONAL TITLE 2,190 3,922.56
FINEMAN, NITZBERG & WEST AKA FINEMAN
WEST & COMPANY LLP 10,040 17,683.08
FIRST FEDERAL CREDIT CORP 0 3,285.44
FIRST FIDELITY CAPITAL 2,000 3,786.95
FRESHMAN MARANTZ 17,012 27,961.53
GERNSBACHER & MCGARRIGLE 2,777 5,127.10
GOLDEN & GOLDBERG 5,042 8,400.10
GRANT & TANI, INC 8,298 15,490.67
INVESTORS TITLE COMPANY 1,901 3,891.35
JAMAN, KAHN & ASSOC. 2,821 5,340.86
JOHN WRIGHT PUBLISHING, INC. 1,798 3,867.91
K & C GROUP, INC 6,573 13,689.01
KLEIN, MANDELBLATT & CO 2,298 4,182.36
KOLODNY & ANTEAU 13,834 25,486.38
LPG USA, INC. 1,865 1,815.43
MAAZDA TRAVEL 1,633 3,760.59
</TABLE>
<PAGE> 71
TN02RO Rent Roll: Tenant Summary Page: 24
46 - 9100 WILSHIRE BUILDING Date: 12-22-97
December, 1997 Time: 09:15 AM
<TABLE>
<CAPTION>
Tenant Rentable SF Monthly Rent
====== =========== ============
<S> <C> <C>
MAGIC JOHNSON ENTERPRISES 3,057 6,025.62
MARKETING MIX, INC 2,562 4,851.08
MARTIN MANAGEMENT 2,805 4,880.56
MCDERMOTT, BOROCZI & SMITHYMAN 1,187 2,065.32
MNP CORPORATE STAFFING, INC. 1,827 0.00
MS MAX 826 1,657.71
MSB MANAGEMENT CORP 1,770 3,668.48
NEIL KAYE 1,867 3,657.73
NORMAN M. DOLIN 3,343 0.00
OFFICE OF THE BUILDING 1,471 0.00
RICHARD FRAADE/GARY WOLFE RICHARD FRAADE 2,686 4,737.27
SCHNEIDER, GOLDBERG & YUEN C/O ANU KHANDELWAL 12,088 20,739.70
SOUTHERN CALIFORNIA SAVINGS
MS. DIANE DEEB - CORPORATE 17,462 17,865.71
STEVE LERMAN 3,594 7,173.24
SUCCESSFUL MARKETING GROUP 1,618 3,013.96
THE MANAGEMENT GROUP DBA THE MANDEL COMPANY 3,670 6,747.68
UNIVERSAL TRADE AND TOURISM, I 442 902.73
WARREN ZIDE DBA: HAM & EGGS 1,517 2,717.14
WEST COAST GROUND SERVICES 2,743 5,108.40
WILSHIRE PR & ADVERTISING 1,314 2,891.49
WRITER'S GUILD OF AMERICA 10,545 14,868.46
VACANT SPACE 67,497 0.00
TGOARG/month-end$ 199712 325,283 435,935.95
</TABLE>
<PAGE> 72
SCHEDULE OF CONTRACTS
[NONE]
EXHIBIT K
Page 1 of 1
<PAGE> 1
EXHIBIT 10.10
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.
<PAGE> 2
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.
-2-
<PAGE> 3
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 contained 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
-3-
<PAGE> 4
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,
without 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.
-4-
<PAGE> 5
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.
-5-
<PAGE> 6
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.
-6-
<PAGE> 7
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,
-7-
<PAGE> 8
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.
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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.
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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
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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.
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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.
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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:
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"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
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(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.
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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.
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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 objectionable
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.
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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 remedies
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
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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,
-19-
<PAGE> 20
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
-20-
<PAGE> 21
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.
[this space left intentionally blank]
-21-
<PAGE> 22
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
-------------------------------------
-22-
<PAGE> 23
[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
By:
-----------------------------------
Its:
----------------------------------
-23-
<PAGE> 24
SCHEDULE "1"
CONDITIONS TO CONSTRUCTION COMPLETION
The Hillside Project and the Westlake Project, as applicable, shall
be deemed completed when all of the following conditions have been satisfied:
1. The construction of all improvements have been completed in
accordance with the Approved Plans for the applicable Additional Property;
2. The Additional Seller has (i) delivered to Buyer a copy of the
certification required to be delivered by Buyer to its lender(s) under the loan
documents evidencing the loan(s) on the Additional Properties (which
certification shall concurrently be certified in favor of Buyer), and (ii)
warranted to Buyer that the improvements have been constructed in accordance
with all Governmental Regulations, and all other covenants, codes and
restrictions, public as well as private, and in accordance with the Approved
Plans (and any modifications, alterations or changes thereto which do not
materially affect the value, condition, appearance, aesthetics or desirability
of the applicable Project);
3. Buyer has been furnished with certified copies of all
certificates of approval, acceptance or compliance from all of the city, county
and state departments or authorities having jurisdiction over the applicable
Project;
4. All grading, landscaping, hardscaping, adequate sewer, water,
gas, electrical and other utility facilities, necessary public streets,
sidewalks, parking facilities, draining and curbing in the site area and other
related improvements, both on and offsite, public and private, have been
completed;
5. A valid Notice of Completion for the applicable building or
buildings shall have been timely recorded as provided by law.
6. The statutory deadline for timely recording of any claim of lien
for labor, services or materials performed or furnished in connection with the
applicable Project shall have expired or, at Buyer's election, the Title Company
is unconditionally prepared to issue the Hillside Title Policy or Westlake Title
Policy, as applicable, free of any exceptions for mechanics liens.
7. Additional Seller shall have obtained and delivered to Buyer
copies of all necessary final occupancy permits and final certificates of
occupancy for the applicable Project (except for any tenant improvement work
which has not been completed as of the applicable Closing Date).
8. All mechanical, electrical, HVAC and fire/life/safety systems for
the applicable Project shall be in good working order and condition.
<PAGE> 25
EXHIBIT A-7
Legal Description -- Hillside Corporate Center
Lot 4, Tract No. 1630-2, in the City of Thousand Oaks, County of Ventura, State
of California, according to the map thereof recorded in Book 46 Page 37 of
Miscellaneous Records (Maps) in the office of the County Recorder of said
County.
EXCEPT an undivided one-half interest in all oil, gas, hydrocarbon substances
and other minerals of all kinds whether like or unlike hydrocarbons below a
depth of 500 feet of the surface of the real property without, however, the
right to enter upon the surface of such property, as reserved in a deed from
Janss Development Co., a partnership, recorded December 28, 1971, as Document
No. 80094, in Book 3901 Page 363 Official Records.
<PAGE> 26
EXHIBIT A-8
Legal Description -- Westlake Gardens
Parcels A and B of Parcel Map LD No. 663, in the City of Thousand Oaks, County
of Ventura, State of California, as per map filed in Book 56, Pages 52 and 53 of
Parcel Maps, in the office of the County Recorder of said County.
EXCEPT all oil, gas and other hydrocarbon substances lying within and under that
portion of said land lying below a depth of 500 feet measured vertically, from
the surface of said land, without, however, any right to enter upon the surface
of said land nor into that portion of the subsurface thereof, lying above a
depth of 500 feet, measured vertically from said surface, per deed recorded
October 28, 1966, in Book 3061, Page 136 of Official Records.
<PAGE> 27
EXHIBIT F-7
Additional Leases for Hillside Corporate Center
[to be attached]
<PAGE> 28
HILLSIDE CORPORATE CENTER LLC
List of Leases
# TENANT
200 Ladco
<PAGE> 29
EXHIBIT F-8
Additional Leases for Westlake Gardens
Phase I (2525 Townsgate):
[to be attached]
Phase II (2555 Townsgate):
[to be attached]
<PAGE> 30
WESTLAKE GARDENS LLC
List of Leases
2525 TOWNSGATE RD.
# TENANT
110 EBV Electronics
300 Kingswood Assoc.
<PAGE> 31
EXHIBIT H-7
Personal Property for Hillside Corporate Center
[to be attached]
<PAGE> 32
EXHIBIT H-8
Personal Property for Westlake Gardens
Phase I (2525 Townsgate):
[to be attached]
Phase II (2555 Townsgate):
[to be attached]
<PAGE> 33
EXHIBIT I-7
Service Contracts for Hillside Corporate Center
[to be attached]
<PAGE> 34
EXHIBIT I-8
Service Contracts for Westlake Gardens
Phase I (2525 Townsgate):
[to be attached]
Phase II (2555 Townsgate):
[to be attached]
<PAGE> 35
EXHIBIT L
Outstanding Brokerage Commissions
[NONE]
<PAGE> 36
EXHIBIT M
Lease Matters
[NONE]
<PAGE> 37
EXHIBIT P
Memorandum of Amendment
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Jeffer, Mangels, Butler & Marmaro LLP
2121 Avenue of the Stars, 10th Floor
Los Angeles, California 90067
Attn: Scott M. Kalt, Esq.
- --------------------------------------------------------------------------------
MEMORANDUM OF AMENDMENT
This Memorandum of Amendment is dated for identification purposes
only ______________, 1997, and is made and entered into by and among 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, Evergreen Plaza LLC, a
California limited partnership (collectively, "Original Seller"), Hillside
Corporate Center, LLC, a California limited liability company ("Hillside") and
Westlake Gardens, LLC, a California limited liability company ("Westlake
Gardens"), and Arden Realty Limited Partnership, a Maryland limited partnership
("Buyer"). Original Seller, Hillside and Westlake Gardens shall collectively be
referred to herein as "Seller."
R E C I T A L S
WHEREAS, pursuant to that certain First Amendment to Agreement of
Purchase and Sale and Joint Escrow Instructions dated October 24 , 1997 ("First
Amendment"), made by and between Seller and Buyer, Seller agreed to sell, and
Buyer agreed to purchase, those certain properties listed on Exhibit 1 attached
hereto (the "Properties") upon and subject to all of the terms, covenants and
conditions contained in the First Amendment, including, without limitation,
Seller's covenant to construct certain improvements on the Properties. The First
Amendment amends that certain Agreement of Purchase and Sale and Joint Escrow
Instructions dated August 1, 1997, made by and between Original Seller and
Buyer.
WHEREAS, Buyer and Seller desire to execute and record this
Memorandum of Amendment for the purpose of providing record notice of the
existence and terms of the Amendment.
<PAGE> 38
MEMORANDUM OF AMENDMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and of
the mutual covenants and agreements set forth in the Amendment, Buyer and Seller
hereby declare as set forth below:
1. Pursuant to the Amendment, Seller covenants and agrees to
construct the Project in accordance with the Approved Plans, upon and subject to
all of the terms, covenants and conditions set forth in Section 8 of the
Amendment. The performance by Hillside and Westlake Gardens of all of their
obligations under Section 8 of the Amendment is a condition to Buyer's
obligation to purchase the Properties under the Agreement, as amended by the
Amendment.
2. Capitalized terms used herein and otherwise defined shall have
the meanings ascribed to such terms as set forth in the Amendment.
IN WITNESS WHEREOF, Seller and Buyer have duly executed this
Memorandum of Amendment on the dates set forth in the notary acknowledgments
attached hereto.
"SELLER"
--------------------------------------------
MOSHE SILAGI, Co-Trustee of the Silagi
Family Trust
--------------------------------------------
ANDREA SILAGI, Co-Trustee of the Silagi
Family Trust
CONEJO BUSINESS PARK, LLC, a California
limited liability company
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
MARIN CORPORATE CENTER, LLC, a California
limited liability company
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
<PAGE> 39
EVERGREEN PLAZA, LLC, a California
limited liability company
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
HILLSIDE CORPORATE CENTER, LLC, a
California limited liability company
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
WESTLAKE GARDENS, LLC, a California
limited liability company
By:
-------------------------------------
Name:
-------------------------------------
Title:
-------------------------------------
"BUYER"
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC., a Maryland
corporation, its general partner
By:
-----------------------------------
Victor J. Coleman
Its: President and COO
By:
-----------------------------------
Its:
-----------------------------------
<PAGE> 40
STATE OF CALIFORNIA )
)
COUNTY OF _____________ )
On _______________ before me, _______________________, personally
appeared ___________________________________________,
[ ] personally known to me [ ] proved to me on the basis of
satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
______________________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER:
[ ] Individual(s) [ ] Attorney-In-Fact
[ ] Partner(s) [ ] Subscribing Witness
[ ] Trustee(s) [ ] Guardian/Conservator
[ ] Corporate ____________________ [ ] Other:__________________________
Officer(s)____________________ ______________________________________
Title(s) ______________________________________
SIGNER IS REPRESENTING:
Name of Person(s) or Entity(ies):_______________________________________________
________________________________________________________________________________
<PAGE> 1
EXHIBIT 10.11
AGREEMENT TO CONTRIBUTE
AND ESCROW INSTRUCTIONS
Between
WESTWOOD CENTER,
A CALIFORNIA LIMITED PARTNERSHIP
PARTNERSHIP
and
ARDEN REALTY LIMITED PARTNERSHIP
A MARYLAND LIMITED PARTNERSHIP
CONTRIBUTOR
Covering
1100 GLENDON AVENUE
WESTWOOD, CALIFORNIA
SEPTEMBER 26, 1997
<PAGE> 2
AGREEMENT TO CONTRIBUTE CAPITAL
AND ESCROW INSTRUCTIONS
THIS AGREEMENT TO CONTRIBUTE CAPITAL AND ESCROW INSTRUCTIONS ("Agreement")
is made and entered into this 26th day of September, 1997 by and between
WESTWOOD CENTER, a California limited partnership ("Partnership"), and ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Contributor"), with
reference to the following facts:
A. Partnership is the fee owner of that certain parcel of real property
(the "Real Property"), and the improvements thereon, for informational purposes
only, are a Twenty-Two (22)-story office building containing approximately
271,082 net rentable square feet exclusive of ground floor retail space, other
facilities, fixtures, paving and surfacing thereon or associated therewith, with
structured automobile parking with a total of approximately 586 striped parking
spaces (collectively, the "Improvements"). The Real Property and Improvements
are located at 1100 Glendon Avenue, Los Angeles, California 90024, and is
legally described in Exhibit "A" attached hereto and forming a part hereof.
B. The Partnership was created by that certain Certificate and Articles of
Limited Partnership of Wilshire Westwood Office Center dated June 8, 1965 as
amended by eleven (11) separate amendments more particularly described in
Exhibit "B" attached hereto and forming a part hereof.
C. Partnership is interested in raising capital for the rehabilitation and
renovation of the Improvements and to retire certain secured and unsecured
indebtedness of the Partnership and Contributor is interested in contributing
capital and thereby obtaining a substantial interest in the Partnership, all on
the terms, covenants and conditions hereinafter set forth.
NOW, THEREFORE, with reference to the foregoing recitals and in reliance
thereon and in consideration of the contribution amount hereinbelow set forth,
and the other terms, covenants and conditions set forth below, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed by Partnership and
Contributor as follows:
1. PARTNERSHIP INTEREST. Subject to all of the terms and conditions of
this Agreement and for the amount of capital to be contributed as set forth, on
Closing (as hereinafter defined), Partnership shall admit Contributor, or cause
Contributor to be admitted, as a General Partner of Partnership, and Contributor
shall contribute to Partnership
1.
<PAGE> 3
as capital the cash sum as set forth in Paragraph 2 below, and thereby acquire a
ninety-seven and one-half percent (97.5%) interest in the profits, losses,
capital and distributions of and to the Partnership ("Partnership Interest").
Concurrently with the admission of Contributor as a general partner of the
Partnership, Contributor and the other partners of the Partnership shall enter
into an Amended and Restated Agreement of Limited Partnership a copy of which is
attached hereto marked Exhibit "C" and incorporated herein by this reference.
The Partnership owns and at the Closing will own all of the following:
(a) The Real Property and the Improvements, together with all
easements, hereditaments and appurtenances thereto and the tenancies and
occupancies;
(b) All of the personal property (the "Personal Property") located
at, attached or appurtenant to, or used in connection with the operation or
maintenance of the Real Property and/or the Improvements and owned by the
Partnership (the "Inventory") other than any property owned by the tenants or by
independent contractors performing services at the Real Property and other than
the furniture used by A.S. Glikbarg, and Ed N. Harrison and the software
property management program used by the Partnership (after all data with respect
to the Property has been copied). The parties acknowledge and agree that any
artifacts, mineral specimens and collectibles in the offices of A.S. Glikbarg,
Ed. N. Harrison and Heidi Glikbarg or elsewhere in the building and the
furniture utilized by Heidi Glikbarg are not assets of the Partnership.
(c) The lessor's interest in all leases to tenants leasing space in
the Improvements (the "Tenant Leases") that are set forth on Exhibit "D".
The Partnership also has the benefit of the following:
(d) Those certain service and other agreements more particularly
described in Exhibit "E" attached hereto and made a part hereof; and
(e) All other right, title and interest of Partnership constituting
part and parcel of the Property (as hereinafter defined), including, but not
limited to, trade names, logos, easements, licenses, permits, air rights,
certificates of occupancy, warranties, rights-of-way, signs, trademarks,
telephone listings and numbers, sewer agreements, water line agreements, utility
agreements, water rights and oil, gas and mineral rights (collectively, the
"Intangibles") to the extent assignable or transferable.
2.
<PAGE> 4
Reference herein to the "Property" shall include all of the Real Property,
Improvements, Personal Property, Tenant Leases and the Intangibles described in
subparagraphs (a) through (e) above.
2. AMOUNT OF CONTRIBUTION. The amount of the capital contribution (the
"Capital Contribution") to be contributed by Contributor to Partnership for the
Partnership Interest is the amount of Twenty-Eight Million Seven Hundred
Sixty-Two Thousand Five Hundred and No/100 Dollars ($28,762,500.00), payable as
follows:
(a) Upon the opening of Escrow (as hereinafter set forth)
Contributor shall deliver to Escrow Agent (as hereinafter defined) cash in the
sum of Five Hundred Thousand Dollars ($500,000.00) ("Deposit") which shall be
held by Escrow Agent as security for the full performance by Contributor of its
obligations hereunder and on account of the Capital Contribution payable at
Closing, subject to the following terms and conditions:
(i) If Closing occurs, then the Deposit shall be transferred
to the Partnership and shall be applied to the Capital Contribution;
(ii) If Closing does not occur and if Partnership shall be
entitled to liquidated damages as provided in Paragraph 10(b) hereof,
Partnership shall be entitled to the Deposit; and
(iii) If the Closing does not occur and Contributor shall be
entitled to the return of the Deposit as provided in this Agreement, the same
shall be returned to Contributor.
(b) Contributor shall pay to Partnership through Escrow Agent at
Closing in immediately available funds an amount equal to the balance of the
Capital Contribution, plus (or minus) the net amount of all costs, expenses,
adjustments and prorations to be credited (or debited) to Contributor pursuant
to this Agreement; provided, however, Contributor shall reduce the cash portion
of the Capital Contribution by the unpaid principal balance and all accrued but
unpaid interest on the Closing Date (as hereinafter defined) on that certain
Partnership indebtedness evidenced by that certain promissory note dated June 5,
1985 in the original principal amount of $16,000,000 in favor of The Prudential
Insurance Company of America, Loan Number 2190495, ("Note") and secured by a
Deed of Trust covering the Property ("Deed of Trust"), hereinafter collectively
referred to as the "Prudential Loan," and by agreeing to replace the Prudential
Loan with other secured indebtedness in the principal amount of not less than
$13,000,000 ("Refinanced Debt") at such time as such
3.
<PAGE> 5
Prudential Loan matures or is accelerated so that at closing and as provided in
the Amended and Restated Agreement of Limited Partnership, the Partnership would
have secured debt of not less than the amount of the Refinanced Debt with the
requirement by such lender that Ed N. Harrison and A. S. Glikbarg (collectively,
"Guarantors") give concurrent "bottom dollar" guaranties with respect to the
refinanced debt in the amount of $10,700,000 and $2,300,000, respectively. Such
"bottom dollar" guaranties must provide that (i) the lender must first foreclose
on the Property and reduce the amount of the guaranties by the amount of the
proceeds from such foreclosure sale before exercising its rights against
Guarantors; (ii) Guarantors will have no personal liability to the extent of any
reduction in value of the Property due to an earthquake; and (iii) each "bottom
dollar" guaranty shall terminate as to each such Guarantor, thirty (30) days
after the death of that particular Guarantor or his spouse.
(c) The Deposit shall be at all times invested by Escrow Agent 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 Partnership,
(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 Partnership and Contributor. The Deposit shall be disposed of by
Escrow Agent only as provided in this Agreement.
(d) All payments required to be made under this Agreement shall be
made in U.S. funds.
3. ESCROW.
(a) OPENING OF ESCROW. As soon as commercially reasonable after
their full and complete execution and delivery of this Agreement ("Effective
Date") and in any event not later than three (3) business days thereafter,
Partnership and Contributor shall open an escrow (the "Escrow") with Commerce
Escrow Company, Attention: Mark Minsky ("Escrow Agent"), through which the
Capital Contribution to the Partnership shall be consummated. A fully executed
copy of this Agreement shall be deposited with Escrow Agent, duly executed by
Partnership, Contributor and Escrow Agent, to serve as Escrow instructions to
Escrow Agent, and Escrow Agent shall be and is hereby authorized and instructed
to deliver pursuant to the terms of this Agreement the documents and monies to
be deposited into the Escrow. Escrow Agent may attach to this Agreement Escrow
Agent's standard form escrow agreement, to the extent that the same is
consistent with the terms hereof, and are reasonably approved by Partnership and
Contributor. Escrow Agent shall immediately, upon receipt of such duly executed
copy of this Agreement, notify Partnership
4.
<PAGE> 6
and Contributor of the opening of Escrow. Should either party fail to open
Escrow in accordance with the provisions of this Paragraph 3(a), such failure
shall constitute a material breach of this Agreement.
(b) CLOSING OF ESCROW. Escrow shall close not later than December
10, 1997, but no more than ten (10) business days following the expiration of
the Approval Period, provided the Contributor's Conditions Precedent to Closing
as set forth in Paragraph 8 hereof have been satisfied and the Partnership's
conditions to Closing set forth in Paragraph 9 have been satisfied. The term
"Closing" as used herein shall be deemed to be the date upon which the
respective Conditions Precedent to Contributor's Obligation to Close Escrow (set
forth in Paragraph 8 below) and the Conditions Precedent to Partnership's
Obligation to Close Escrow (set forth in Paragraph 9 below) have been satisfied
(or have been waived in writing), the Amended and Restated Agreement of Limited
Partnership ("Restated Partnership Agreement" herein) hereinafter referred to is
executed and an Amended Certificate of Limited Partnership is filed for record
in the office of the Secretary of State of the State of California and the
Capital Contribution required to be made pursuant to this Agreement is held by
Escrow Agent for disbursement to Partnership. If the Closing as provided herein
does not occur, this Agreement and the Escrow shall be cancelled and terminated
and thereafter neither party shall have any further obligation or liability to
the other party, except as expressly set forth in this Agreement.
4. TITLE MATTERS.
(a) TITLE REPORT.
(i) Partnership has ordered and delivered to Contributor a
CLTA Preliminary Title Report covering the Real Property and the Improvements,
which may state that it is subject to any matter that would be disclosed by a
survey (the "Preliminary Title Report"), issued by First American Title Company
of Los Angeles ("Title Agent"), together with true and legible copies of all
documents evidencing matters of record shown as exceptions to title thereon.
Contributor has caused an ALTA Survey of the Real Property and Improvements
("Survey") to be made at Contributor's sole cost and expense (and upon the
Effective Date shall deliver a copy of the Survey to Partnership). Contributor
shall have the right to reasonably object to any exceptions contained in the
Preliminary Title Report or Survey by giving notice to Partnership before the
expiration of the Approval Period. Notwithstanding any of the foregoing,
Partnership shall at Closing (but shall not be obligated prior thereto) remove
of record all tax and mechanic's liens (except only for the liens of the taxes
and assessments not yet due or payable), at its
5.
<PAGE> 7
sole cost and expense. Unless Contributor gives written notice prior to the
expiration of the Approval Period that it disapproves any such exceptions to
title matters, stating the exceptions so disapproved, Contributor shall be
deemed to have approved said exceptions. Contributor's approval of the
Preliminary Title Report shall include survey matters; provided, however, such
approval shall not include any supplementary title reports issued by Title
Company after the expiration of the Approval Period. Contributor shall have
three (3) business days following receipt of same in which to disapprove any
such supplementary report. If for any reason, on or before the Closing Date
Partnership does not cause such exceptions to title or survey matters which
Contributor timely disapproves (to the extent Contributor is permitted hereunder
to so disapprove) to be removed at no cost or expense to Contributor
(Partnership having the right but not the obligation to do so), the obligation
of Partnership to admit Contributor, and Contributor to make its Capital
Contribution to, the Partnership as herein provided shall terminate (and
Partnership and Contributor shall have no further obligations in connection
herewith). Contributor shall have the option to waive the condition precedent
set forth in this paragraph 4(a) by notice to Partnership. In the event of such
waiver, such condition shall be deemed satisfied. All matters set forth on the
Preliminary Title Report, the Survey which are not timely objected to by
Contributor shall be permitted exceptions to title and shall additionally
include (i) any title or survey matters objected to by Contributor, which
objections are subsequently waived in writing by Contributor, and (ii) any title
or survey matters objected to by Contributor in accordance with the terms and
provisions of this Agreement, which objections are cured to Contributor's
satisfaction, (iii) real estate taxes and assessments not yet due and payable;
and (iv) the printed exceptions which appear in the standard form ALTA owner's
policy of title insurance (with extended coverage).
(ii) If at the date of Closing there are any liens or
encumbrances (other than the Prudential Loan) that the Partnership is obligated
to pay and discharge, Escrow Agent may use any portion of the Capital
Contribution to satisfy the same (if the same are not bonded-over or otherwise
satisfied by title endorsement), provided Partnership shall simultaneously
either deliver to Escrow Agent at Closing title instruments in recordable form
sufficient to satisfy such liens and encumbrances of record, together with the
cost of recording or filing said instruments.
(b) TITLE POLICY. The Title Policy shall be First American Title
COMPANY's ALTA Owner's policy with liability in the amount of Twenty-Nine
Million Five Hundred and No/100 Dollars ($29,500,000.00), showing fee title to
the Real Property and the Improvements as vested in the Partnership,
6.
<PAGE> 8
subject only to the permitted exceptions specified in Paragraph 4(a) above.
5. DELIVERY OF INFORMATION.
(a) The Partnership has delivered or has caused to be delivered or
made available to Contributor at the Property to the extent they are in
Partnership's possession or under its control, the following:
(i) Complete copies of all of the Tenant Leases and all
amendments thereto, a schedule of which is attached hereto as Exhibit "D".
(ii) To the extent in Partnership's possession or control,
evidence that the Real Property complies with the Subdivision Map Act of
California, the Property has all of the necessary valid Certificates of
Occupancy and otherwise complies with all construction and operational laws,
codes, ordinances, regulations and conditional use permits.
(iii) The loss history of the Property pertaining to any
property damage or personal injury suffered for which an insurance claim of more
than Fifty Thousand Dollars ($50,000) was submitted by Partnership at any time
after January 1, 1995 to the extent available to Partnership;
(iv) To the extent in Partnership's possession or control, a
set of all "as built" plans, specifications and structural drawings (including,
but not limited to, mechanical, electrical, air conditioning, landscaping and
sprinkler drawings), third-party soil, geological, seismic, environmental and
hazardous materials and asbestos studies or reports, relating to the
Improvements or the subsurface conditions, grading plans, water table or other
matters bearing upon condition of the Property;
(v) All electricity and property tax bills for the period
beginning January 1, 1995 to the extent available to Partnership;
(vi) Statements of income and expense for the Property for
the calendar year 1995, 1996 and current year to date to the extent available to
Partnership;
(vii) All warranties and operating manuals that Partnership
may have from vendors, contractors or servicing agents with respect to the
physical condition of the Improvements, the Property or any portion thereof or
the equipment located therein;
(viii) Complete copies of all service, offsite parking rights
upon and other contracts pertaining to the
7.
<PAGE> 9
Property (including, but not limited to, HVAC, elevator, landscape, management,
leasing brokerage and parking) in respect to which Partnership is obligated (the
"Service Contracts");
(ix) A list of all personal property (including supplies)
owned or leased by Partnership and used in connection with the operation,
maintenance and repair of the Property, but excluding any property owned by the
Tenants or by independent contractors performing services at the Real Property
and excluding furniture utilized by Ed N. Harrison and A.S. Glikbarg in their
offices or elsewhere in the Improvements which shall be distributed to them
prior to the Closing. The parties acknowledge and agree that any artifacts,
mineral specimens or collectibles in such offices or elsewhere in the building
and the furniture utilized by Heidi Glikbarg are not assets of the Partnership.
(b) Contributor shall have from the date hereof until 5:00 P.M. on
the date that is forty (40) business days following the Effective Date, but in
any event not later than December 1, 1997 (the "Approval Period") in which to
approve or disapprove all matters and things that are subject to Contributor's
rights of review, inspection and approval hereunder. Contributor's failure
either to approve or disapprove said information before the expiration of the
Approval Period as aforesaid shall be deemed its approval thereof. If
Contributor disapproves any of said information, Contributor shall notify
Partnership in writing thereof within the time period specified above, whereupon
this Agreement shall terminate except as to Paragraph 6. However,
notwithstanding the foregoing, if Contributor disapproves any Service Contract,
this Agreement shall not terminate and Partnership shall lawfully terminate such
Service Contract not later than thirty (30) days after the Closing, if the same
can be so terminated and provided Contributor shall pay all cancellation or
termination penalties, fees or costs in connection therewith.
(c) At Contributor's request at any time from and after the date
hereof until the date that is one (1) year after the Closing Date, the existing
general partners of the Partnership shall, at Contributor's expense, cause to be
provided to Contributor's designated independent auditor reasonable access to
the books and records of the Partnership and Property, regarding the period for
which Contributor 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 Partnership's possession or control and relate to the period
during which Partnership held title to the Property.
8.
<PAGE> 10
6. INSPECTIONS AND APPROVAL BY CONTRIBUTOR.
(a) From and after the date hereof, Contributor and its agents,
employees and contractors shall be afforded full access to the Property during
normal business hours and upon twenty-four (24) hours prior notice for the
purpose of making such investigations as Contributor deems prudent with respect
to the physical condition of the Property, including, but not limited to,
engineering tests, subject to the rights of tenants in possession. Partnership
shall reasonably cooperate to assist Contributor in completing such inspection.
However, Contributor agrees not to contact any of Partnership's tenants without
Partnership's prior consent and to hold Partnership harmless from and against
any loss, cost, damage, claim or expense suffered by Partnership or the Property
or third parties and caused by Contributor's said investigations (the foregoing
obligation surviving any termination of this Agreement). In no event shall
Contributor make any intrusive physical testing (environmental, structural or
otherwise) at the Property (such as soil borings or the like) without
Partnership's prior consent. Contributor is allowed, however, to commence and
undertake the seismic testing and inspection of the movement beam welds and
related asbestos containment as soon as possible after the Effective Date. In
this connection Contributor agrees to utilize the services of CTL Environmental
to monitor asbestos levels if the latter's bid for such services is comparable
to Contributor's other bids for such work. Contributor shall promptly restore
the Property to its condition immediately prior to such investigations. In
addition, Contributor agrees not to unreasonably interfere with the use and
enjoyment of the Property by Partnership, its agents, representatives, employees
or any tenants or other occupants or visitors. Partnership shall have the right,
at its option, to cause a representative of Partnership to be present at all
inspections, reviews and examinations conducted hereunder. Contributor shall
deliver a certificate of insurance to the Partnership demonstrating at least
$3,000,000 of liability coverage in effect. Contributor shall indemnify and hold
the Partnership and its partners harmless from all losses, costs, expenses and
obligations and mechanic's liens in connection with such inspections and testing
and any damages or injury in connection therewith by Contributor or its
employees, agents or independent contractors. This indemnity shall survive any
termination of this Agreement. At the request of Partnership, Contributor shall
promptly deliver to Partnership true, accurate and complete copies of any
written reports relating to the Property prepared for or on behalf of
Contributor by any third party and, in the event of termination hereunder, shall
return all documents and other materials furnished to or on behalf of
Contributor by Partnership hereunder. Contributor shall keep all information or
data received or discovered in connection with any of the inspections, reviews
or
9.
<PAGE> 11
examinations strictly confidential; provided, however, that Contributor shall
be entitled to disclose such information to Contributor's attorneys,
consultants, accountants and prospective debt and equity financing sources who
reasonably need to be informed in connection with Contributor's determinations
hereunder.
(b) From and after the date hereof until Closing, Contributor and its
agents shall be afforded full opportunity by Partnership during normal business
hours and upon twenty-four (24) hours prior notice to examine all operating
books and records that relate to the Property (including all specifications and
as-built drawings to the extent they are in Partnership's possession), all
building permits, certificates of occupancy, soil reports, engineers' reports
and studies, and similar information relating to the Property or its management,
operation, maintenance or use, and all warranties and operating manuals that
Partnership may have from vendors, contractors or servicing agents with respect
to the physical condition of the Property or any portion thereof or the
equipment located thereon.
(c) Contributor shall have until the expiration of Approval Period
in which to approve or disapprove the matters referred to in subparagraphs (a)
and (b) above. Furthermore, Contributor shall have until the expiration of the
Approval Period in which to approve or disapprove of a market and leasing survey
of the Property and the surrounding leasing market (including its own economic
analysis of the feasibility of the Property for Contributor's particular use
thereof). Contributor's disapproval shall be in writing and shall be delivered
to Partnership prior to the expiration of the Approval Period. Failure to
deliver such written disapproval shall be deemed Contributor's approval of said
matters.
7. OPERATION OF PROPERTY PENDING CLOSING.
(a) TENANT LEASES. Partnership has leased portions of the Property to
various occupancy tenants. From and after the date of execution of this
Agreement and until the Closing Date Partnership shall not enter into any new
leases or amend or extend, terminate or accept the surrender of any existing
tenancies or approve any subleases without the prior written consent of
Contributor (which consent shall not be unreasonably delayed or withheld);
provided, however, Partnership shall have the power and authority to enter into
leases with terms of one (1) year or less (except to affiliates of the partners
of the Partnership) which provide for rent which qualifies as "rents from real
property" under IRC Section 856(d) and which require no significant tenant
improvement allowance in excess of painting, papering and carpet cleaning from
Partnership without Contributor's prior consent. In requesting such consent,
Partnership shall inform Contributor in writing of
10.
<PAGE> 12
the amount, if any, proposed to be required to pay for, or any allowance
proposed to be given for, tenant improvement work, any leasing commissions and
fees, in connection with such lease and any rent concessions. Also included in
the request for consent, shall be Partnership's proposed draft of the lease or
amendment agreement. The failure of Contributor to respond within three (3)
business days after written request for any such approval shall be deemed to
constitute approval. Partnership shall not collect in advance any rent or other
sum due under any of the Tenant Leases, except for collection of current rents
no more than one month in advance.
(b) INSURANCE POLICIES. Partnership shall use its best efforts to
keep all of the insurance policies covering the Property (or substantially
equivalent coverage) in full force and effect between the date of this Agreement
and Closing (the "Insurance Policies").
(c) SERVICE CONTRACTS. Partnership shall have the right to renew or
replace Service Contracts that expire prior to Closing or to enter into new
Service Contracts for emergency purposes if deemed reasonably necessary by
Partnership for any term provided that such Service Contracts are terminable by
Partnership or its successors in interest upon not more than thirty (30) days'
notice to the service provider.
(d) PROPERTY MANAGEMENT. Partnership shall maintain the Property in
the same manner as prior hereto pursuant to its normal course of business (such
maintenance obligations not including extraordinary capital expenditures or
expenditures not incurred in such normal course of business), subject to
reasonable wear and tear and further subject to destruction by casualty or other
events beyond the reasonable control of Partnership.
(e) RELEASE. On or prior to the Closing, the Partnership shall
execute and deliver to the existing General Partners a general release in the
form of Exhibit "L":
(f) ESTABLISHMENT OF RESERVES. The Partnership shall have the right
to establish a reserve account of Two Hundred Thousand Dollars ($200,000) for
the payment of expenses relating to claims, including the claims set forth on
Exhibit "I", as well as for the discharge and/or payment of any such claims, or
claims arising out of or in connection with any matters or events which have
occurred or facts which came into existence prior to the Closing Date. The
establishment of such reserve shall not constitute nor should it be construed to
be an admission of any liability whatsoever by the Partnership and/or the
General Partners, it being the purpose of said reserve solely to protect against
contingencies. Furthermore, such reserve is being established at the request of
the existing general partners of the Partnership
11.
<PAGE> 13
and the establishment of such reserve shall not constitute nor shall it be
construed to be an acknowledgement or agreement by Contributor as to the
adequacy of such reserve. The establishment of such reserve shall in no way
limit the obligations of the Partnership, the existing general partners and A.S.
Glikbarg and Ed N. Harrison, as applicable, under Sections 8(c), 13(a)(v) and
15(g) hereof.
8. CONDITIONS PRECEDENT TO CONTRIBUTOR'S OBLIGATION TO CLOSE ESCROW. The
obligation of Contributor to consummate the transactions contemplated hereby is
subject to the following conditions, inserted for Contributor's sole benefit and
that may be waived by Contributor only in writing at its sole option. A failure
of a condition precedent shall not constitute a default by the Partnership or
any of its partners, other than an intentional default under either clause (a)
or clause (d) below. Said conditions are as follows:
(a) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Partnership contained in Paragraph 13 of this
Agreement shall be true on the date of Closing in all material respects as
though such representations and warranties were made on and as of such date.
(b) DELIVERY OF TENANT ESTOPPELS. Partnership shall have delivered
to Contributor estoppel letters (the "Tenant Estoppels") from tenants
representing 85% of the leased area and from all tenants leasing more than 3,500
square feet in the Improvements in substantially the form of Exhibit "G"
attached hereto and forming a part hereof, consistent in all material respects
with the information to be provided by Partnership hereunder and certifying
inter alia to the effect that there are no defaults by landlord under the lease
known to tenant thereunder; that such lease is unmodified except as may be set
forth therein and in full force and effect; that there are no defenses or
offsets against the landlord known to tenant thereunder; and that rental is
current and has not been paid more than one month in advance. In the event the
requisite estoppels are not timely provided by the requisite tenants, the
General Partners may give estoppels to Contributor and will severally (5/6ths by
Ed N. Harrison and 1/6th by A.S. Glikbarg) warrant the accuracy thereof for a
period of one year following the Closing; and the foregoing shall satisfy this
condition.
(c) PARKING RIGHTS AGREEMENT. The Partnership shall have entered
into a binding and enforceable parking rights agreement ("Parking Rights
Agreement") with Harrison Properties ("Harrison Properties") (which currently
owns the improved real properties commonly known as 1127 through 1151 Glendon
Avenue, Los Angeles, California) memorializing, but limiting the parking rights
of Harrison Properties and its
12.
<PAGE> 14
successors in interest, and their tenants and their successors and agents,
employees and patrons in the Property substantially in accordance with the draft
Parking Rights Agreement attached hereto as Exhibit "M" and incorporated herein
by this reference.
(d) PARKING OPERATOR AGREEMENT. The Partnership shall have caused
its present parking garage operator to assign or transfer its rights to operate
the parking garage to an independent third party acceptable to Contributor's tax
counsel as to real estate investment trust tax matters.
(e) CLOSING CERTIFICATES FROM PARTNERSHIP AND GENERAL PARTNERS.
Partnership and the existing general partners thereof shall have delivered a
Closing Certificate to Contributor certifying to Contributor that, as of the
Closing Date, there are no unsecured liabilities of the Partnership, absolute or
contingent, which are in excess of $25,000 in the aggregate and which (1) have
not been disclosed to Contributor during the Approval Period and (2) have not
been adequately provided for out of the Partnership's existing capital
resources, accounts receivable, insurance coverage and the Capital Contribution
of Contributor; provided that the existing General Partners shall be severally
liable for said Closing Certificate as follows: A.S. Glikbarg shall be liable as
to one-sixth and Ed N. Harrison shall be liable as to five-sixths.
(f) COMPLIANCE WITH THIS AGREEMENT. Partnership shall have performed
and complied with in all material respects all agreements and conditions
required by this Agreement to be performed or complied with by it on or prior to
Closing.
(g) TITLE POLICY. Title Company shall be ready, willing and able to
issue the Title Policy required by Paragraph 4(b).
(h) CHANGE IN CONDITION. Subject to the provisions of Paragraphs
15(a) and 15(b) hereof, there shall exist no damage, destruction or condemnation
of the Property in excess of the threshold amounts, respectively, provided in
such Paragraphs prior to Closing,
(i) All required parties shall have signed the Amended and Restated
Partnership Agreement.
9. CONDITIONS PRECEDENT TO PARTNERSHIP'S OBLIGATION TO CLOSE ESCROW. The
obligation of Partnership to consummate the transactions contemplated hereby is
subject to the following conditions, inserted for Partnership's sole benefit and
that may be waived solely by Partnership only in writing at its sole option.
Said conditions are as follows:
13.
<PAGE> 15
(a) APPROVAL OF LIMITED PARTNERS. The partners of the Partnership
and Unsecured Noteholders (as hereinafter defined in Section 13(a)(iv)(e)) shall
have unanimously approved the transactions contemplated by this Agreement prior
to the expiration of the Approval Period. Failure to obtain approval of the
Partners and the Unsecured Noteholders (other than A.S. Glikbarg and Ed N.
Harrison) shall not be a default under this Agreement.
(b) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The
representations and warranties of Contributor contained in this Agreement, or in
any certificate or document signed by Contributor pursuant to the provisions
hereof, shall be true on and as of Closing in all material respects as though
such representations and warranties were made on and as of such date.
(c) DELIVERY OF CAPITAL CONTRIBUTION AND DOCUMENTS. Contributor
shall have delivered all funds and documents to Escrow Holder required by it
hereunder to enable it to close the Escrow.
(d) COMPLIANCE WITH THIS AGREEMENT. Contributor shall have performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by it on or prior to Closing.
(e) EXECUTION OF PARTNERSHIP AGREEMENT. All required parties shall
have signed the Amended and Restated Partnership Agreement.
10. REMEDY OF CONTRIBUTOR AND PARTNERSHIP UPON DEFAULT.
(a) REMEDIES OF CONTRIBUTOR. In the event that Partnership defaults
and fails to keep and perform each and every obligation, covenant and agreement
herein by Partnership to be kept or performed, then Contributor may, except as
otherwise provided in this Agreement, pursue such rights it may have against
Partnership and the Property either at law or in equity.
(b) REMEDY OF PARTNERSHIP. THE PARTIES HERETO, BEFORE ENTERING INTO
THIS TRANSACTION, HAVE BEEN CONCERNED WITH THE FACT THAT SUBSTANTIAL DAMAGES
WILL BE SUFFERED BY PARTNERSHIP IF CONTRIBUTOR SHOULD WRONGFULLY FAIL TO MAKE
THE CAPITAL CONTRIBUTION TO THE PARTNERSHIP. WITH THE FLUCTUATION IN VALUE OF
REAL PROPERTY, THE CURRENT AND HIGHLY UNPREDICTABLE STATE OF THE ECONOMY, THE
FLUCTUATING MONEY MARKET FOR REAL ESTATE LOANS OF ALL TYPES, AND OTHER FACTORS
THAT DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY, IT IS REALIZED
BY THE PARTIES THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE, IF NOT
IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY PRIOR TO SIGNING THIS
14.
<PAGE> 16
AGREEMENT THE AMOUNT OF DAMAGES THAT WOULD BE SUFFERED BY PARTNERSHIP IN THE
EVENT OF CONTRIBUTOR'S WRONGFUL FAILURE TO MAKE THE CAPITAL CONTRIBUTION TO THE
PARTNERSHIP. THE PARTIES, HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES PARTNERSHIP WOULD SUFFER IN THE EVENT
OF CONTRIBUTOR'S WRONGFUL FAILURE TO CONTRIBUTE THE CAPITAL TO THE PARTNERSHIP
AS REQUIRED IN THIS AGREEMENT, HEREBY AGREE THAT THE REASONABLE ESTIMATE OF SAID
DAMAGES IS AN AMOUNT EQUAL TO THE DEPOSIT; AND IN THE EVENT OF CONTRIBUTOR'S
WRONGFUL FAILURE TO CONTRIBUTE THE CAPITAL TO THE PARTNERSHIP AS REQUIRED IN
THIS AGREEMENT, PARTNERSHIP SHALL BE ENTITLED TO RECEIVE AND RETAIN THE DEPOSIT
AS FULL LIQUIDATED DAMAGES, AND THAT PAYMENT OR TENDER TO PARTNERSHIP BY
CONTRIBUTOR OF SUCH AMOUNT SHALL, EXCEPT AS SET FORTH IN PARAGRAPHS 6 AND 16(F),
TERMINATE ALL OF PARTNERSHIP'S RIGHTS AND REMEDIES AT LAW OR IN EQUITY AGAINST
CONTRIBUTOR WITH RESPECT TO SUCH FAILURE TO PERFORM.
/s/ ASG ENH /s/ VJC
--------------- ---------------
PARTNERSHIP'S CONTRIBUTOR'S
INITIALS INITIALS
11. CLOSING PROCEDURE.
(a) At least one business day prior to the date of Closing,
Contributor shall have delivered to Escrow Agent counterpart executed originals
of the following documents and the following sums of money required to be
delivered by Contributor hereunder:
(i) The Capital Contribution in the manner set
forth in Paragraph 2(a);
(ii) Such funds as may be necessary to comply with
Contributor's obligations hereunder regarding prorations, costs and expenses;
(iii) Signed counterparts of the Restated Partnership
Agreement and an Amended Certificate of Limited Partnership; and
(iv) Signed counterparts of a Liability Agreement between
A.S. Glikbarg, Ed N. Harrison and Contributor in the form of Exhibit "H"
attached hereto and made a part hereof.
(b) At least one business day prior to the date of Closing,
Partnership and its Pre-Closing Partners shall have delivered or caused to be
delivered to Escrow Agent the following:
15.
<PAGE> 17
(i) Such funds and agreements regarding conversion of
accrued interest to capital of the Partnership as may be necessary to comply
with such Pre-Closing Partners' obligations hereunder regarding their capital
accounts;
(ii) Signed counterparts of the Restated Partnership
Agreement and an Amended Certificate of Limited Partnership;
(iii) Signed counterparts of a Liability Agreement between
A.S. Glikbarg, Ed N. Harrison and Contributor in the form of Exhibit "H"
attached hereto and made a part hereof;
(iv) To the extent they are in Partnership's possession, a
complete set of all plans, specifications and as-built drawings, and all
building permits, certificates of occupancy, third-party soil reports, and
environmental reports and studies relating to the Improvements; and
(v) To the extent in the Partnership's possession, all
warranties and operating manuals that Partnership may have from vendors,
contractors or servicing agents with respect to the physical condition of the
Property or any portion thereof or the equipment located thereon.
(c) Upon delivery of the foregoing sums and documents, Escrow Agent
shall (i) cause the Amended Certificate of Limited Partnership to be filed for
record in the Official Records of the Secretary of State of the State of
California, (ii) cause the Title Company to issue immediately the Title Policy,
and (iii) disburse the Capital Contribution for the benefit of the Partnership
in accordance with Paragraph 13(a)(iv) below.
12. COSTS AND PRORATIONS.
(a) PRORATIONS. All revenues, income, receivables, costs, expenses
and payables of the Property shall be apportioned equitably between the
Partnership prior to admission of the Contributor and the Partnership as amended
with the admission of the Contributor 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 (but not free rent or concessions) and
percentage rent and "passthroughs" of real estate taxes and operating expenses
due from occupancy tenants under Tenant Leases, as and when collected. If at
Closing
16.
<PAGE> 18
there are any past due rents or charges owed by occupancy tenants, they shall
not be prorated until received. To the extent Partnership receives amounts on
account of Tenant Leases on or after the Closing Date, such payments shall be
applied first toward then current rent owed to the Partnership for the period
after the Closing in connection with the applicable Tenant Lease for which such
payments are received, and any excess monies received shall be applied toward
the payment of any delinquent rents and applied among the prior partners as
determined by A. S. Glikbarg and Ed N. Harrison. Contributor may not cause the
Partnership to waive any delinquent rents nor modify a Tenant Lease so as to
reduce or otherwise affect amounts owed thereunder for any period in which
Partnership is entitled to receive its share of charges or amounts without first
obtaining the written consent of the former general partners of the Partnership;
(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 outside of and following the Close of Escrow between Partnership
prior to the admission of the Contributor and the Partnership as amended with
the admission of the Contributor if current tax rates differ from the latest
previous tax rates as soon as the same are known. Partnership agrees that to the
extent any additional taxes, assessments or levies are imposed, assessed or
levied against the Property, or any portion thereof, at any time subsequent to
Closing but with reference to any period prior thereto, the Pre-Closing Partners
(as hereinafter defined) shall promptly pay such additional assessments or
levies from their own resources. No additional taxes shall be payable by the
Pre-Closing Partners pursuant to this paragraph 12(a)(ii) to the extent that
such additional taxes arise because of the transactions contemplated in this
Agreement. Similarly, if tax refunds become payable for periods prior to the
Closing, such amounts (subject to adjustments for the potential claims of
occupancy tenants that paid tax increases by way of rent escalations to
Partnership) shall be promptly paid over to the Pre-Closing Partners. In the
event that any assessments on the Property are payable in installments, then the
installment for the current period shall be prorated (with Contributor assuming
the obligation to pay any installment due after the Closing Date). For the
purpose of this Agreement the term "Pre-Closing Partners" shall refer to all of
the partners of Partnership immediately prior to the Closing contemplated by
this Agreement;
(iii) Security Deposits, plus accrued interest, if any,
payable thereon to tenants, and any other deposits and prepaid rent, shall be
credited (or assigned) to the Partnership, as amended with the admission of the
Contributor;
17.
<PAGE> 19
(iv) Utility charges levied against Partnership or the
Property;
(v) Service Contracts on the basis of the charge or premium
for the period involved;
(vi) Tenant improvements costs and leasing commissions for
leases signed after the Effective Date if approved by Contributor in accordance
with Paragraphs 7(a) and 7(b); and
(vii) All other operating 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.
(b) EXPENSES OF CLOSING. The expenses of Closing shall be paid in
the following manner:
(i) Partnership prior to the admission of Contributor shall
pay:
(1) The cost of securing the CLTA standard coverage
portion of the Title Policy that is attributable to the required ALTA
Owner's coverage; and
(2) One-half of Escrow Agent's Escrow Fee;
(ii) The Partnership, as amended with the admission of the
Contributor shall pay:
(1) The cost of the Preliminary Title Report and the cost
of any Escrow or Title cancellation charges in the event that the
transaction fails to close through no fault of the Partnership and, if
Closing does occur, that portion of the cost of the Title Policy that is
not to be paid by Partnership pursuant to Subsection (b)(i)(1) above and
the cost of the ALTA Survey;
(2) The cost of filing the Amended Certificate of Limited
Partnership;
(3) One half of Escrow Agent's Escrow fee; and
(4) The cost and expense of conducting the seismic
investigation of the welds of the moment beams and the related asbestos
containment; provided, however, if Contributor timely objects during the
Approval Period to the physical condition of the Improvements based upon
such investigation and this Agreement is terminated solely on account
thereof, Partnership agrees to
18.
<PAGE> 20
reimburse Contributor for one-half of such costs and expenses.
All other Closing fees and expenses, including, but not limited to, the parties'
legal expenses, accounting and consulting fees, and other incidental expenses in
connection with this transaction shall be borne by the Partnership or by
Contributor, as applicable, who incurred the same.
13. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PARTNERSHIP.
(a) Partnership hereby makes the following representations,
warranties and covenants, each of which is deemed to be material and each of
which is stated by Partnership to be true and correct on the date hereof and on
the Closing Date and each of which shall be guaranteed severally by A.S.
Glikbarg as to one-sixth (1/6th) and Ed N. Harrison as to five-sixths (5/6ths)
(said several liability of A.S. Glikbarg as to 1/6th and Ed N. Harrison as to
5/6ths being their respective liability under said guaranty and their respective
liability as General Partners of the Partnership) and shall survive the Closing
for a period of one (1) year except for the representations in subparagraph
(vii) below, which shall survive until the expiration of the applicable statute
of limitations:
(i) Partnership has no knowledge of any:
(1) materially incorrect income or expense
figures in any financial statements prepared by or for Partnership and
delivered to Contributor regarding the Property;
(2) claim, litigation or administrative
action, arbitration, proceeding pending before any court, agency or official,
nor any such claim or action threatened in writing, relating to the Partnership
or the Property or with respect to the validity of any statutes, ordinances,
regulations or restrictions or any permits, certificates or approvals thereunder
relating to the construction of any Improvements on the Property or the
operation thereof except as disclosed in Exhibit "I" attached hereto;
(3) outstanding contingent (and undisclosed)
liabilities affecting the Property or the Partnership (excluding matters
attributable to the physical condition of the Property or as disclosed in
Exhibit "I" attached hereto); and
(4) written notice of violations of City, County,
State, Federal, building, zoning, fire or health
19.
<PAGE> 21
codes, regulations or ordinances, served or issued against the Property except
as disclosed in Exhibit "I" attached hereto.
(ii) The Tenant Leases, Service Contracts, the Rent Roll of
the Property and the list of Offsite Parking Rights attached as Exhibit "K"
hereto submitted to Contributor by Partnership for approval pursuant to
Paragraph 5 above, or otherwise, shall be true, correct and complete in all
material respects as of the date of submission thereof, and as thereafter
supplemented by supplements or additions, approved in writing by Contributor, on
or before Closing. Notwithstanding anything to the contrary contained herein,
Partnership shall have no obligation or liability to Contributor with respect to
any of the foregoing lease matters which shall be confirmed as correct in any
tenant estoppel certificate delivered to Contributor as provided in this
Agreement;
(iii) The operating financial information prepared by
Partnership and delivered to Contributor with respect to the Property,
consisting of Statements of Operations for the calendar year ended December 31,
1995, December 31, 1996 and for the current calendar year are true and correct
in all material respects;
(iv) The Capital Contribution shall be utilized by the
Partnership, as follows:
(a) To retire the Partnership's secured indebtedness to
the A.S. Glikbarg Foundation (approximately $193,550);
(b) To retire the Partnership's secured indebtedness to
Belmont Memorial Park Corporation of California (assigned to and owned by A.S.
Glikbarg and Fred Appleford, approximately $298,005 and $99,335, respectively);
(c) To retire the Partnership's secured indebtedness to
the Johnston Family Trust (approximately $1,787,473);
(d) To fund the Partnership's share of all costs, fees,
charges and expenses attributable to the Partnership in connection with the
consummation of the transactions contemplated by this Agreement; and
(e) To fund, pay or establish reserves for all of the
Partnership's unsecured indebtedness or other expenses and liabilities including
that portion owed to Ed N. Harrison, Elisa Wiley Harrison, A.S. Glikbarg Defined
Benefit Pension Trust, Johnny Ruth Harrison and Christine Oien (collectively,
the "Unsecured Noteholders"), as designated by the current general partners of
the Partnership.
20.
<PAGE> 22
(v) There are no unsecured liabilities of the Partnership,
absolute or contingent (excluding those relating to the physical condition of
the Property), which have not been disclosed to Contributor and which as of the
Closing will have not been adequately provided for out of the existing capital,
receivables and reserves of the Partnership or from the Capital Contribution;
(vi) As used in this Agreement, "to Partnership's knowledge"
or other similar knowledge limitations as to Partnership shall mean the actual
knowledge, without any duty to investigate, of A.S. Glikbarg, Heidi Glikbarg and
Ed N. Harrison; and
(vii) The Partnership (a) has filed all tax returns and
reports required to be filed by it and all such returns and reports are accurate
in all material respects; (b) except as set forth on Exhibit J attached hereto,
has paid all taxes required to be paid by it; (c) is a domestic entity which has
at all times had at least two partners; (d) has not filed Form 8832, or
otherwise elected pursuant to Treasury Regulation 301.7701-3(c), to be treated
as an association taxable as a corporation; (e) has, with respect to all periods
prior to January 1, 1997, claimed to be classified as a partnership and not as
an association taxable as a corporation and has had reasonable basis to claim
such classification; (f) except as set forth on Exhibit J, has not received
notice, and no partner of the Partnership has received notice, that the
classification of the Partnership was or would be under examination, or that the
Partnership is deficient in the payment of taxes, and the Partnership and such
partners have no knowledge of any facts or circumstances which present a
material risk of any challenge of the Partnership's classification as a
partnership for tax purposes; and (g) has been treated as a partnership (and not
as an association, publicly traded partnership or other entity taxable as a
corporation) for federal and California income tax purposes at all times during
its existence.
(b) Notwithstanding anything contained in Paragraphs 5(a) or 13(a)
to the contrary, Partnership is neither responsible nor liable for any
representation or warranty, either expressed or implied, guaranty, promise or
other information pertaining to the Property or the Improvements made or
furnished to Contributor by any broker representing or purporting to represent
Partnership.
14. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR. Contributor hereby
makes the following representations and warranties, each of which is deemed to
be material and each of which is stated by Contributor to be true and correct on
the date hereof:
21.
<PAGE> 23
(a) Contributor has full legal power and authority to enter into and
perform this Agreement in accordance with its terms. This Agreement constitutes
the valid and binding obligation of Contributor, enforceable in accordance with
its terms, except as such enforcement may be affected by bankruptcy, insolvency
and other laws affecting the rights of creditors generally. The execution,
delivery and performance of this Agreement and all documents in connection
therewith are not in contravention of or in conflict with any agreement or
undertaking to which Contributor is a party or by which Contributor may be bound
or affected; and
(b) The execution and delivery of this Agreement and the payment and
performance by Contributor of its payments and obligations hereunder require no
further action or approval in order to constitute this Agreement as a binding
and enforceable obligation of Contributor, and all such actions have been duly
taken by Contributor.
(c) As of the expiration of the Approval Period and as of the
Closing Date (i) Contributor will have received and reviewed all materials
provided to Contributor by Partnership pursuant to Sections 4 and 5 above
(collectively, the "Due Diligence Materials"), (ii) Contributor will have
inspected the Property, (iii) Contributor will have made such investigation of
the information contained in the Due Diligence Materials as it deems
appropriate, and (iv) Contributor is satisfied based upon its examination of the
Due Diligence Materials and its investigation of all other aspects of the
Property which Contributor deems material to its contribution, including,
without limitation, the condition of title to the Property, the zoning of the
Property, the condition and physical aspects of all structures located on the
Real Property (including the Improvements) and the presence or absence of
Hazardous Substances on the Property. Except as specifically set forth in
Paragraph 13, (i) the Partnership and its current partners have made no
warranties, representations or promises concerning the Property and (ii) the
Contributor is becoming a general partner of the Partnership and is making its
Contribution on as "AS IS, WHERE IS, WITH ALL FAULTS" basis.
15. GENERAL COVENANTS AND AGREEMENTS OF CONTRIBUTOR AND PARTNERSHIP.
(a) DAMAGE TO OR DESTRUCTION OF PROPERTY PRIOR TO CLOSING; RISK OF
LOSS. If prior to Closing, the Property shall sustain damage caused by fire or
other casualty that is insured and that would cost Two Hundred Fifty Thousand
Dollars ($250,000) or more to repair or if any uninsured loss or casualty occurs
that would cost One Hundred Fifty Thousand Dollars ($150,000) or more to repair,
either Partnership or Contributor may respectively elect to terminate this
Agreement
22.
<PAGE> 24
by written notice to the other within fifteen days after notice of such event,
or at Closing, whichever is earlier. If neither Partnership nor Contributor so
elects to terminate its obligations under this Agreement, or if the loss or
casualty would cost less than Two Hundred Fifty Thousand Dollars ($250,000) with
respect to an insured casualty and One Hundred Fifty Thousand Dollars ($150,000
with respect to an uninsured casualty to repair, the Closing shall take place as
provided herein and Contributor shall inure to the Partnership's rights to
insurance proceeds with respect to any unrepaired damage (including any rental
loss proceeds for periods after the Closing), loss or casualty in question.
Partnership shall retain all interest in and to the insurance proceeds that may
be payable to Partnership on account of repaired and completed damage, but
Partnership shall have no obligation of repair or replacement.
(b) CONDEMNATION OF PROPERTY PRIOR TO CLOSING. In the event that the
Property or any part thereof becomes the subject of a condemnation proceeding
other than of a minor immaterial nature prior to Closing, Partnership agrees to
immediately advise Contributor thereof. In the event of such condemnation,
Contributor shall have the option to (1) have the Closing take place in
accordance with the terms and conditions of this Agreement and negotiate with
the said condemning authority for the condemnation award and receive the
benefits thereof without affecting the Capital Contribution, or (2) terminate
this Agreement and declare its obligations thereunder null and void and of no
further effect, in which event all sums theretofore paid to Partnership or to
Escrow Agent hereunder shall be returned to Contributor as set forth herein.
Notice of the exercise of such option hereunder shall be in writing, delivered
to Partnership at the address set forth in Paragraph 16(g) of this Agreement (or
such other address as Partnership may have theretofore designated in writing) at
least two days prior to Closing.
(c) BROKERS' COMMISSIONS. Partnership warrants that Partnership did
not negotiate with respect to the purchase of the Property through any broker,
agent, finder, affiliate or other third party other than the Seeley Company
(David Norcott) ("Broker") or incur any liability, contingent or otherwise, for
brokerage or finder's fees or agent's commissions or other like payments in
connection with this Agreement, or the transactions contemplated hereby.
Partnership agrees to pay at Closing to Broker the commission due it in
connection with the within transaction and Partnership hereby agrees to
indemnify Contributor against and hold Contributor harmless from any and all
claims, demands, causes of action or damages resulting from any breach of this
warranty. Contributor hereby warrants that Contributor did not negotiate through
any broker, agent, finder, affiliate or other third party other than Broker or
incur any liability,
23.
<PAGE> 25
contingent or otherwise, for any such brokerage or finder's fees, agent's
commissions or other like payments, in connection with this Agreement, and
hereby agrees to indemnify Partnership and its partners against and hold
Partnership and its partners harmless from any and all claims, demands, causes
of action or damages resulting from any breach of this warranty. This provision
shall survive Closing.
(d) FURTHER ASSURANCES PRIOR TO CLOSING. Partnership and Contributor
shall, prior to Closing, execute any and all documents and perform any and all
acts reasonably necessary, incidental or appropriate to effect the contribution
to the Partnership and the Restated Partnership Agreement contemplated in this
Agreement.
(e) TIME OF ESSENCE. Time shall be of the essence with respect to
the obligations of the parties hereunder.
(f) WAIVERS, AMENDMENTS AND MODIFICATIONS OF PROVISIONS. Waivers,
amendments or modifications of any term or condition of this Agreement must be
in writing signed by the party against whom such waiver is sought to be
enforced. No waiver by any party of any breach hereunder shall be deemed a
waiver of any other or subsequent breach.
(g) INDEMNIFICATION.
(i) Third Party Claims. Partnership and its existing general
partners severally, shall protect, defend and indemnify Contributor against and
hold Contributor harmless from any and all loss, cost, damage, claim, liability
or expense, including court costs and reasonable attorneys' fees (collectively,
"Damages"), for third party claims against the Partnership including former
employees, governmental claims for taxes and unsatisfied liabilities arising out
of or in connection with any matters or events which have occurred or facts
which came into existence prior to the Closing Date (including any personal
injury or property damage or claim of personal injury or property damage of any
kind whatsoever, including death, to property or persons, including employees of
Partnership prior to the Closing Date) or which would have come into existence
with notice or the passage of time or both, prior to the Closing Date unless
caused by Contributor, except to the extent covered by insurance proceeds on
policies maintained by the Partnership. This covenant shall survive Closing. Any
liability of the existing General Partners under this indemnity shall be several
and A.S. Glikbarg shall be liable as to one-sixth and Ed N. Harrison shall be
liable as to five-sixths.
(ii) Defense of Claims. If and to the extent the existing
General Partners (collectively, the "General Partner Indemnitors" and each
individually a "General Partner
24.
<PAGE> 26
Indemnitor") are liable for any claim for Damages (a "Claim") pursuant to this
Section 15(g), Contributor shall give written notice to each General Partner
Indemnitor as soon as practicable after Contributor becomes aware of any fact,
condition or event which may give rise to Damages for which indemnification may
be sought under this Section 15(g). If any lawsuit or enforcement action is
filed against the Partnership, written notice thereof shall be given to each
General Partner Indemnitor as promptly as practicable (and in any event within
fifteen (15) calendar days after the service of the citation or summons). The
General Partner Indemnitors shall be entitled, if they so elect, (A) to take
control of the defense and investigation of such lawsuit or action, (B) to
employ and engage attorneys of their own choice to handle and defend the same,
at the General Partner Indemnitors' cost, risk and expense, and (C) to
compromise or settle such Claim in their sole discretion. The General Partner
Indemnitors shall not be liable for any settlement of any lawsuit or action
affected without their written consent. The provisions of this paragraph
15(g)(ii) shall not apply to tax matters, which shall be governed by paragraph
15(j) and the Partnership Agreement.
(iii) Cooperation. Contributor shall cooperate in all
reasonable aspects with the General Partner Indemnitors and their attorneys in
the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any
notifications to insurers.
(h) USE OF RESERVES FOR PARTNERSHIP LIABILITIES. At the Closing,
cash in the amount of any Partnership reserves for liabilities that were
established prior to the Closing (including without limitation the reserve
account established pursuant to Section 7(f) hereof) shall be placed in a
separate trust account (the "Reserve Trust Account") of which the then acting
trustee of the Glikbarg Trust and the ten-acting trustee of the Harrison Trust
("Trustees") shall be the sole signatories. Trustees shall have the sole right
to control the use of the funds in the Reserve Trust Account, including without
limitation the use of such funds for the payment of expenses relating to such
liabilities and to the discharge of any such liabilities. In addition, if a
specific liability (including without limitation any of the claims listed on
Exhibit I) is ultimately discharged for less than the entire amount reserved for
such liability, then Trustees shall have the sole right to control the
disposition of funds in the Reserve Trust Account equal to the unused amount
reserved for such liability, which disposition shall be made consistent with the
obligations among the Pre-Closing Partners. In the event the funds in the
Reserve Trust Account are insufficient to discharge all of the Obligations of
the
25.
<PAGE> 27
Partnership, the existing general partners and A.S. Glikbarg and Ed N. Harrison
under Sections 8(e), 13(a)(v) and 15(g) hereof, the Partnership, the existing
general partners and A.S. Glikbarg and Ed N. Harrison, as applicable, shall
remain liable under said Sections 8(e), 13(a)(v) and 15(g) to the extent so
provided therein.
(i) OFFICES. The parties agree that A.S. Glikbarg, Ed N. Harrison
and Heidi Glikbarg shall be permitted to continue to occupy their current
offices at the Property and to use their currently used storage facilities at
the Property for a period of ninety (90) days after the Closing on a rent-free
basis.
(j) 1997 INCOME TAX RETURNS. At least (30) days prior to the due
date for such returns, including any extensions, Contributor shall deliver to
A.S. Glikbarg and Ed N. Harrison drafts of the Partnership's 1997 federal and
California income tax returns (collectively, the "1997 Tax Returns") for their
review and comment. Contributor agrees to reasonably consider and to reasonably
take into account the views expressed by Glikbarg and Harrison.
(k) 1997 ASBESTOS REPORTS. At least thirty (30) days prior to the
due date for such reports, Contributor shall deliver to A.S. Glikbarg and Ed N.
Harrison drafts of any and all asbestos reports that the Partnership is required
to file with any governmental agency with respect to all or any portion of 1997,
including without limitation Verification Questionnaire, FEE Summary Sheet and
Manifest FEE Calculation Sheet (State of California, California EPA), State of
California Board of Equalization Hazardous Waste Generator Fee and Waste
Reporting Surcharge Fee Return, for their review and comment. Contributor agrees
to reasonably consider and to reasonably take into account the views expressed
by Glikbarg and Harrison.
16. MISCELLANEOUS PROVISIONS.
(a) SUCCESSORS AND ASSIGNS. Subject to the provisions hereof, the
terms and provisions hereof shall be binding upon and inure to the benefit of
the successors and assigns of the parties hereto.
(b) MEANING OF TERMS. When necessary herein, all terms used in the
singular shall apply to the plural and vice versa; and all terms used in the
masculine shall apply to the neuter and feminine genders.
(c) ENTIRE AGREEMENT. This Agreement and all exhibits hereto and all
agreements executed pursuant hereto and the Restated Partnership Agreement is
the entire agreement between the parties hereto with respect to the subject
matter
26.
<PAGE> 28
hereof and supersedes all prior agreements between the parties hereto with
respect thereto. No claim of waiver, modification, consent or acquiescence with
respect to any of the provisions of this Agreement shall be made against either
party, except on the basis of a written instrument executed by or on behalf of
such party.
(d) GOVERNING LAW. This Agreement is to be governed by and construed
in accordance with the internal laws of the State of California.
(e) PARAGRAPH HEADINGS. The headings of the several paragraphs of
this Agreement are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the construction of any
term or provision hereof.
(f) ATTORNEYS' FEES. If either Partnership or Contributor shall
obtain legal counsel and bring an action or proceeding against the other by
reason of an alleged breach of any covenant, provision or condition hereof, or
otherwise arising out of this Agreement, the unsuccessful party shall pay to the
prevailing party reasonable attorneys' fees, which shall be payable whether or
not any proceeding is prosecuted to judgment or award. The term "prevailing
party" shall include a party (i) who brings an action or proceeding against the
other by reason of the other's breach or default and obtains substantially the
relief sought by judgment or award or (ii) who successfully defends an action or
proceeding brought by the other party and against whom no material damages or
specific performance are awarded.
(g) NOTICES. All notices, requests and other communications
hereunder shall be in writing and shall be personally delivered or, in the
alternative, deposited with (1) the United States Postal Service, Certified Mail
with Return Receipt Requested, with postage prepaid or (2) Federal Express or
other overnight air freight forwarder for delivery the next business day or (3)
by facsimile transmission during normal business hours on regular business days
to the following addresses:
Partnership: Westwood Center
1100 Glendon Avenue
Suite 1400
Los Angeles, CA 90024
Attn: A. S. Glikbarg
FAX (310) 208-5804
27.
<PAGE> 29
With a copy to: Sanders, Barnet, Goldman,
Simons & Mosk
1901 Avenue of the Stars
Suite 850
Los Angeles, CA 90067
Attn: Kenneth Goldman, Esq.
FAX (310) 553-2435
Contributor: Arden Realty, Inc.
9100 Wilshire Boulevard
Suite 700 East
Beverly Hills, CA 90212
Attn: Mr. Richard S. Ziman
FAX (310) 246-2941
With a copy to: Troy & Gould
1801 Century Park East
16th Floor
Los Angeles, CA 90067
Attn: Kenneth R. Blumer, Esq.
FAX (310) 201-4746
Escrow Agent: Commerce Escrow Company
1585 Wilshire Boulevard
Suite 600
Los Angeles, CA 90017
Attn: Mark Minsky
FAX (213) 484-0417
If to A.S. Glikbarg: A.S. Glikbarg, Trustee u/d/t
dated September 6, 1987
establishing the A.S. Glikbarg
Family Trust
375 Fordyce Road
Los Angeles, CA 90049
FAX (310) 476-9691
With a copy to: Hal Coskey, Esq.
Coskey & Baldridge
1801 Century Park East
Suite 1600
Los Angeles, CA 90067
FAX (310) 277-9704
If to Ed N. Harrison: Ed N. Harrison, Trustee of the
Ed N. Harrison Separate Property
Trust u/d/t dated August 18, 1987
c/o Edward Landry, Esq.
Musick, Peeler & Garrett
One Wilshire Boulevard, #2000
Los Angeles, CA 90017-3321
FAX (213) 624-1376
28.
<PAGE> 30
All notices, requests and other communications may be sent by legal counsel for
the party and shall be effective (1) upon delivery, (2) on the date of
acknowledgment or other evidence of actual receipt or (3) two (2) business days
following deposit with the U.S. Postal Service, with postage prepared and
properly addressed.
(h) SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
(i) FURTHER ASSURANCES ON OR AFTER CLOSING. Each party hereto agrees
to do all acts and things and to make, execute and deliver such written
instruments as shall be reasonably necessary to carry out the terms and
provisions of this Agreement. This covenant of further assurances shall survive
Closing.
(j) OTHER PARTIES. Nothing in this Agreement shall be construed as
giving any person, firm, corporation or other entity, other than the parties
hereto, their successors and permitted assigns, any right, remedy or claim under
or with respect to this Agreement or any provision hereof.
(k) CONFIDENTIALITY. Partnership and Contributor agree that it is in
both of their best interests to keep this Agreement and all information
concerning the Property confidential until Closing. Prior to Closing,
Partnership and Contributor each agrees that except to the extent required by
The Securities Act of 1933, The Securities and Exchange Act of 1934, and the
rules and regulations promulgated thereunder, the rules of the New York Stock
Exchange or any underwriting agreement to which Contributor is a party, neither
shall take any action nor conduct itself in any fashion that would disclose to
third parties unrelated to Contributor, its acquisition or intended ownership
and operation of the Property, any aspect of the contemplated transaction. After
Closing, neither party shall make any public announcement of the transaction
that has not been approved in advance and in writing by the other party, such
approval not to be unreasonably delayed or withheld.
(l) CONDITION OF PROPERTY. Contributor acknowledges that it will
inspect and examine the Property and, except as expressly provided in this
Agreement, will rely solely on its own investigation of the Property and not on
any information provided or to be provided by or on behalf of Partnership.
Except as otherwise expressly provided in this Agreement, the Contributor is
making its Contribution to the Partnership and is becoming a general partner in
the
29.
<PAGE> 31
Partnership on an "AS IS" "WHERE IS" and "WITH ALL FAULTS" basis. Contributor
acknowledges that in consideration of entering into this Agreement, that, except
as expressly provided in this Agreement, Partnership makes no warranty or
representation, with respect to the Property, or any portion thereof, express or
implied, or arising by operation of law, including, but not limited to, any
warranty of condition (physical, environmental or otherwise), title (other than
the limited warranties of title contained in the grant deed), habitability or
fitness for a particular purpose or otherwise.
(m) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.
(n) FACSIMILE SIGNATURES. Contributor and Partnership 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.
30.
<PAGE> 32
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first hereinabove written.
PARTNERSHIP: WESTWOOD CENTER
a California limited partnership,
By: /s/ A. S. Glickbarg
----------------------------------------------
Name: A. S. Glikbarg, Trustee of
the A. S. Glikbarg Family
Trust
Title: General Partner
By: /s/ Ed N. Harrison
----------------------------------------------
Name: Ed N. Harrison, Trustee of
the Ed N. Harrison Separate
Property Trust
Title: General Partner
Dated:
---------------------------------------------
CONTRIBUTOR: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Victor J. Coleman
---------------------------------------
Name: Victor J. Coleman
Title: President
Dated:
---------------------------------------------
GUARANTORS SEVERALLY
AS TO PARAGRAPHS
8(b), 8(e), 13(a)
AND 15(g): /s/ A. S. Glickbarg
--------------------------------------------------
A.S. Glikbarg
/s/ Ed N. Harrison
--------------------------------------------------
Ed N. Harrison
Dated:
---------------------------------------------
31.
<PAGE> 33
The undersigned hereby executes this Agreement to evidence its agreement
to act as Escrow Holder in accordance with the terms of this Agreement.
AGREED AND ACCEPTED:
Escrow Agent:
COMMERCE ESCROW COMPANY
By: /s/ Mark Minsky
----------------------
Name: Mark Minsky
Title: Vice President
32.
<PAGE> 34
LIST OF EXHIBITS
A. Legal Description
B. List of Partnership and Amendments
C. Amended and Restated Partnership Agreement
D. Tenant Leases ("Rent Roll")
E. Service Contracts
F. Intentionally Deleted
G. Tenant Estoppel Form
H. Liability Agreement
I. List of Actions, Citations and Claims Pending Against
Partnership
J. Open Tax Matters
K. Offsite Parking Rights
L. General Release
M. Parking Rights Agreement
33.
<PAGE> 35
EXHIBIT A
LEGAL DESCRIPTION
THE REAL PROPERTY REFERRED TO HEREIN IS SITUATED IN THE CITY OF LOS
ANGELES, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED
AS FOLLOWS:
Parcel 1
Lot 1 of Tract No. 24124 as per map recorded in Book 634, Page 50 of
Maps, in the office of the County Recorder of said County.
Parcel 2
Lots 6, 7, 8, 10 and 11 in Block 15 of Tract No. 9768 as per map recorded in
Book 147, Pages 70 to 73 inclusive of Maps, in the office of the County Recorder
of said County.
<PAGE> 36
EXHIBIT B
LIST OF PARTNERSHIP AND AMENDMENTS
1. Certificate and Articles of Limited Partnership of Wilshire Westwood
Office Center dated June 8, 1965 and recorded in Los Angeles County on June 8,
1965.
2. First Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a California limited partnership dated December 1, 1966 and
recorded in Los Angeles County on January 4, 1967.
3. Second Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated January 1, 1972 and recorded in
Los Angeles County on December 8, 1972.
4. Second Amendment [sic] to Certificate and Articles of Limited
Partnership of Westwood Center, a limited partnership, dated April 3, 1972.
5. Third Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated September 1, 1974.
6. Fourth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated January 1, 1975.
7. Fifth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated April 1, 1978 and recorded in Los
Angeles County on August 11, 1978.
8. Sixth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated March 21, 1984.
9. Seventh Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated July 15, 1985.
10. Eighth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated November 2, 1987.
11. Ninth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated May 15, 1988.
12. Tenth Amendment to Certificate and Articles of Limited Partnership of
Westwood Center, a limited partnership, dated January 1, 1994.
<PAGE> 37
EXHIBIT C
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
<PAGE> 38
________________________________
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WESTWOOD CENTER,
A CALIFORNIA LIMITED PARTNERSHIP
________________________________
___________, 1997
<PAGE> 39
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINED TERMS............................................................. 3
Section 1.1 Definitions............................................................... 3
ARTICLE 2 ORGANIZATIONAL MATTERS.................................................... 17
Section 2.1 Organization.............................................................. 17
Section 2.2 Name...................................................................... 17
Section 2.3 Resident Agent; Principal Office.......................................... 17
Section 2.4 Power of Attorney......................................................... 17
Section 2.5 Term...................................................................... 19
Section 2.6 Number of Partners........................................................ 19
ARTICLE 3 PURPOSE................................................................... 19
Section 3.1 Purpose and Business...................................................... 19
Section 3.2 Powers.................................................................... 19
Section 3.3 Partnership Only for Purposes Specified................................... 20
Section 3.4 Representations and Warranties by the Parties............................. 20
ARTICLE 4 CAPITAL CONTRIBUTIONS..................................................... 22
Section 4.1 Capital Contribution of the Partners...................................... 22
Section 4.2 Loans by Third Parties.................................................... 22
Section 4.3 Additional Funding and Capital Contributions.............................. 23
ARTICLE 5 DISTRIBUTIONS............................................................. 26
Section 5.1 Requirement and Characterization of
Distributions............................................................. 26
Section 5.2 Distributions in Kind..................................................... 26
Section 5.3 Distributions Upon Liquidation............................................ 26
Section 5.4 Distribution to Reflect Issuance of Additional
Partnership Interests..................................................... 26
ARTICLE 6 ALLOCATIONS............................................................... 27
Section 6.1 Timing and Amount of Allocations of Net Income
and Net Loss.............................................................. 27
Section 6.2 General Allocations....................................................... 27
Section 6.3 Additional Allocation Provisions.......................................... 27
Section 6.4 Tax Allocations........................................................... 30
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS..................................... 30
Section 7.1 Management................................................................ 30
Section 7.2 Certificate of Limited Partnership........................................ 34
Section 7.3 Restrictions on General Partner's Authority............................... 34
Section 7.4 Reimbursement of the General Partner...................................... 38
Section 7.5 Outside Activities of the General Partner................................. 38
Section 7.6 Contracts with Affiliates................................................. 38
Section 7.7 indemnification........................................................... 39
Section 7.8 Liability of the General Partner.......................................... 41
Section 7.9 Other Matters Concerning the General Partner.............................. 42
</TABLE>
(i)
<PAGE> 40
<TABLE>
<S> <C> <C>
Section 7.10 Title to Partnership Assets............................................... 42
Section 7.11 Reliance by Third Parties................................................. 43
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................................ 43
Section 8.1 Limitation of Liability................................................... 43
Section 8.2 Management of Business.................................................... 43
Section 8.3 Outside Activities of Limited Partners.................................... 44
Section 8.4 Return of Capital......................................................... 44
Section 8.5 Rights of Limited Partners Relating to the
Partnership............................................................... 44
Section 8.6 Exchange Rights........................................................... 45
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS.................................... 47
Section 9.1 Records and Accounting.................................................... 47
Section 9.2 Fiscal Year............................................................... 47
Section 9.3 Reports................................................................... 48
ARTICLE 10 TAX MATTERS............................................................... 48
Section 10.1 Preparation of Tax Returns................................................ 48
Section 10.2 Tax Elections............................................................. 48
Section 10.3 Tax Matters Partner....................................................... 49
Section 10.4 Withholding............................................................... 50
ARTICLE 11 TRANSFERS AND WITHDRAWALS................................................. 51
Section 11.1 Transfer.................................................................. 51
Section 11.2 Transfer of General Partner's Partnership
Interest.................................................................. 52
Section 11.3 Limited Partners' Rights to Transfer...................................... 53
Section 11.4 Substituted Limited Partners.............................................. 55
Section 11.5 Assignees................................................................. 55
Section 11.6 General Provisions........................................................ 56
ARTICLE 12 ADMISSION OF PARTNERS..................................................... 58
Section 12.1 Admission of Successor General Partner.................................... 58
Section 12.2 Admission of Additional Limited Partners.................................. 58
Section 12.3 Amendment of Agreement and Certificate of
Limited Partnership............................................................... 59
ARTICLE 13 DISSOLUTION AND LIQUIDATION............................................... 60
Section 13.1 Dissolution............................................................... 60
Section 13.2 Winding Up................................................................ 60
Section 13.3 Compliance with Timing Requirements of
Regulations............................................................... 61
Section 13.4 Deemed Distribution and Recontribution.................................... 62
Section 13.5 Rights of Limited Partners................................................ 62
Section 13.6 Notice of Dissolution..................................................... 63
Section 13.7 Cancellation of Certificate of Limited
Partnership............................................................... 63
Section 13.8 Reasonable Time for Winding-Up............................................ 63
Section 13.9 Waiver of Partition....................................................... 63
</TABLE>
(ii)
<PAGE> 41
<TABLE>
<S> <C> <C>
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS.............................. 63
Section 14.1 Amendments................................................................ 63
Section 14.2 Action by the Partners.................................................... 64
ARTICLE 15 GENERAL PROVISIONS........................................................ 65
Section 15.1 Addresses and Notice...................................................... 65
Section 15.2 Titles and Captions....................................................... 65
Section 15.3 Pronouns and Plurals...................................................... 65
Section 15.4 Further Action............................................................ 65
Section 15.5 Binding Effect............................................................ 65
Section 15.6 Creditors................................................................. 65
Section 15.7 Waiver.................................................................... 65
Section 15.8 Counterparts.............................................................. 66
Section 15.9 Applicable Law............................................................ 66
Section 15.10 Invalidly of Provisions................................................... 66
Section 15.11 Entire Agreement.......................................................... 66
Section 15.12 No Rights as Partners of the General Partners............................. 66
</TABLE>
(iii)
<PAGE> 42
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WESTWOOD CENTER
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
("Agreement"), dated as of________________,1997, is entered into by and among
Arden Realty Limited Partnership, a Maryland limited partnership ("Arden") , as
the General Partner and the Persons whose names are set forth on Exhibit A
attached hereto, as the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.
RECITALS
A. The Partnership was formed on June 8, 1965 and an original
Certificate and Articles of Limited Partnership was entered into among the
Limited Partners or their predecessors in interest and 1100 Glendon,
Incorporated, a California Corporation, as the General Partner, and was recorded
on June 8, 1965 as Instrument No. 3639 in Book M1884 at page 325 in the Office
of the County Recorder of Los Angeles County.
B. The Certificate and Articles of Limited Partnership have been
amended previously on eleven (11) separate occasions, as follows: (1) First
Amendment dated December 1, 1966 and recorded on January 4, 1967 as Instrument
No. 1532 in Book M2431 at page 432; (2) Second Amendment dated as January 1,
1972 and recorded on December 8, 1972 as Instrument No. 4718 in Book M4226 at
page 976; (3) Second (sic) Amendment dated April 3, 1972; (4) Third Amendment
dated September 1, 1974; (5) Fourth Amendment dated January 1, 1975, (6) Fifth
Amendment dated April 1, 1978; (7) Sixth Amendment dated March 21, 1984; (8)
Seventh Amendment dated July 16, 1985; (9) Eighth Amendment dated November 2,
1987; (10) Ninth Amendment dated May 15, 1988; and (11) Tenth Amendment dated
January 1, 1994.
C. Pursuant to an Agreement to Contribute (the "Contribution
Agreement") between Arden and the Partnership dated September 26, 1997, Arden
and the Partnership have agreed, subject to certain terms and conditions which
have now all been satisfied, that as of the Effective Date (i) Arden would
contribute substantial cash to the capital of the Partnership, (2) Arden would
be admitted as a General Partner of the Partnership and receive a ninety-seven
and one-half percent (97.5%.) interest in all of the profits, losses,
distributions and capital of the Partnership, (3) the existing General Partners
would become Limited Partners and (4) all Limited Partners' Percentage Interests
would be readjusted in proportion to the two and one-half percent (2.5%)
interest owned by all of the Limited Partners.
D. Arden's interest in becoming the General Partner of the Partnership
and making its initial Capital Contribution to the
1.
<PAGE> 43
Partnership is for the purpose of acquiring control of the Partnership's
Property to initiate the planning, designing and implementation of a total and
complete renovation, retrofit, rehabilitation and remodelling of the Property
in one or more phases through additional Capital Contributions and loans by it
(which may equal or exceed the present capitalization of the Partnership)
without the approval or consent of the Limited Partners.
E. By virtue of their respective execution of this Agreement Arden and
the Limited Partners hereby consent to and approve the foregoing recitals and
consent to and approve the further amendment and restatement of the Certificate
and Articles of Limited Partnership, as follows:
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Admission of Arden. On the Effective Date, Arden is hereby admitted
as the General Partner of the Partnership and concurrently therewith is making
the cash Capital Contribution to the Partnership set forth in Section 4.1.
2. Conversion to Limited Partners. On the Effective Date, A.S.
GLIKBARG, Trustee of the A.S. Glikbarg Family Trust under Declaration of Trust
dated September 16, 1987 ("Glikbarg Trust") and ED N. HARRISON, Trustee of the
Ed N. Harrison Separate Property Trust under Declaration of Trust dated August
18, 1987 ("Harrison Trust") shall resign as the General Partners of the
Partnership and their Partnership Interests are thereby converted to that of
Limited Partners.
3. Readlustment of Percentage Interests. On the Effective Date,
pursuant to the Capital Contributions set forth in Section 4.1 hereof, the
Percentage Interests of the Partners shall be readjusted as set forth on Exhibit
A attached hereto and made a part hereof.
4. Renovation Plan. On the Effective Date Arden shall be free to
implement, fund and execute a plan for the total and complete renovation,
retrofit, rehabilitation and remodeling of the improvements on the Property in
as many stages and in such amounts and pursuant to such design and motif as
Arden shall decide in its sole and unfettered discretion.
5. Indemnification. But for the representations, warranties and other
assurances of the Partnership and the Indemnitors to Arden concerning the
Partnership, its liabilities (absolute and contingent) , tax status (past and
present) and all other historical matters concerning the Partnership (except the
structural condition of the Property) that could adversely effect Arden, Arden
would not have entered into this Agreement nor the Contribution Agreement of
2.
<PAGE> 44
which this Agreement is a part. Arden, nevertheless, continues to be concerned
about its admission as the General Partner of the Partnership for matters or
events which have occurred or facts which came into existence during the
Indemnitors (and their Affiliates) control of the Partnership and which if there
had been a sale of the Property to Arden would have been cut-off as to it. In
order to induce Arden to proceed with its Capital Contribution to this
Partnership and its admission as the General Partner, the Partnership and the
Indemnitors, severally, hereby agree to protect, defend and indemnify Arden
(together with reasonable attorneys fees and costs from counsel of its own
choosing) from and against any and all tort claims, taxes and liabilities
including all damages, liabilities, costs and expenses reasonably incurred or
suffered by Arden which relate to matters or events which have occurred or facts
which came into existence prior to the Effective Date and which, if there had
been a sale of the Property to Arden, would not have otherwise subjected Arden
to the potential of liability or damages, except to the extent covered by
insurance presently maintained by the Partnership. The several liability of A.S.
Glikbarg and Glikbarg Trust and Ed N. Harrison and Harrison Trust shall be A.S.
Glikbarg and Glikbarg Trust as to one-sixth and Ed N. Harrison and Harrison
Trust as to five-sixths and shall be their respective liability as Indemnitors
and their respective liability as general partners of the Partnership.
ARTICLE 1
DEFINED TERMS
Section 1.1 Definitions. The following definitions shall be for all
purposes, unless otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.
"Act" means the California Revised Uniform Limited Partnership Act, as
it may be amended from time to time, and any successor to such statute.
"Additional Funds" shall have the meaning set forth in Section 4.3.A.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 12.2 hereof and who is shown as such on
the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) decrease such deficit by any amounts which such Partner is
obligated to restore pursuant to this Agreement or is deemed
to be obligated to restore pursuant to Regulations
3.
<PAGE> 45
Section 1. 704-1 (b) (2) (ii) (c) or the penultimate
sentence of each of Regulations Sections 1. 704-2 (i) (5) and
1. 704 2(g)(1); and
(ii) increase such deficit by the items described in Regulations
Section 1. 704-1 (b) (2) (ii) (d) (4) , (5) and (6) .
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Regulations Section 1.704-1 (b) (2)
(ii) (d) and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Agreed Value" means in the case of any Contributed Property as of the
time of its contribution to the Partnership, the fair market value of such
property or other consideration as determined by the General Partner, reduced by
any liabilities either assumed by the Partnership upon such contribution or to
which such property is subject when contributed; and in the case of any property
distributed to a Partner by the Partnership, the fair market value of such
property as determined by the General Partner at the time such property is
distributed, reduced by any liabilities either assumed by such Partner upon such
distribution or to which such property is subject at the time of the
distribution as determined under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
"Appraisal" means with respect to the Property an opinion as to fair
market value thereof prepared by an independent third party M.A.I. appraiser
experienced in the valuation of similar properties in West Los Angeles as
reasonably selected by the General Partner in good faith and reasonably approved
by a Majority in Interest of the Limited Partners. If a Majority in Interest of
the Limited Partners fail to approve the appraiser selected by the General
Partner such Majority in Interest shall select their own appraiser meeting the
above-described requirements within fifteen (15) business days following receipt
of notice of the General Partner's selection. If a Majority in Interest of the
Limited Partners fail to timely select and notify the General Partner of their
selection within such 15 day period, the General Partner's appraiser shall be
the appraiser for the purpose of the Appraisal. If a Majority in Interest of the
Limited Partners timely select an appraiser, that appraiser and the General
Partner's appraiser shall promptly meet to select a third appraiser meeting the
above described requirements who alone shall perform the Appraisal.
"Assignee" means a Person to whom any Partnership Interest has been
transferred in a manner permitted under this Agreement, but
4.
<PAGE> 46
who has not become a Substituted Limited Partner, and who has the rights set
forth in Section 11.5.
"Available Cash" means, with respect to any period for which such
calculation is being made,
(i) the sum of
(a) the Partnership's Net Income or Net Loss (as the case may be)
for such period,
(b) Depreciation and all other noncash charges deducted in
determining Net Income or Net Loss for such period,
(c) the amount of any reduction during such period in reserves of
the Partnership referred to in clause (ii) (f) below (including, without
limitation, reductions resulting because the General Partner determines such
amounts are no longer necessary),
(d) the excess of the net proceeds from the sale, exchange,
disposition, or refinancing of Partnership property for such period over the
gain (or loss, as the case may be) recognized from any such sale, exchange,
disposition, or refinancing during such period (excluding Terminating Capital
Transactions),
(e) all other cash received by the Partnership for such period that
was not included in determining Net Income or Net Loss for such period, and
(f) any expense deductible in determining Net Income or Net Loss
for such period that was not paid by the Partnership during such period.
(ii) less the sum of:
(a) all principal debt payments made during such period by the
Partnership,
(b) capital expenditures made by the Partnership during such
period,
(c) investments made during such period in any entity (including
loans made thereto) to the extent that such investments are not otherwise
described in clauses (ii)(a) or (b), and to the extent such investments cannot
be readily liquidated,
(d) all other expenditures and payments made during such period not
deducted in determining Net Income or Net Loss for such period,
(e) any amount included in determining Net Income or Net Loss for
such period that was not received by the Partnership during such period,
5.
<PAGE> 47
(f) the amount of any increase in reserves established during such
period which the General Partner determines are necessary or appropriate in its
sole and absolute discretion, and
(g) the amount of any working capital accounts and other cash or
similar balances established during such period which the General Partner
determines to be necessary or appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any
cash received or reductions in reserves, or take into account any disbursements
made or reserves, established, after commencement of the dissolution and
liquidation of the Partnership.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to be closed.
".Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following provisions:
(a) To each Partner's Capital Account there shall be added such
Partner's Capital Contributions, such Partner's share of Net Income and any
items in the nature of income or gain which are specially allocated pursuant to
Section 6.3 hereof, and the amount of any Partnership liabilities assumed by
such Partner or which are secured by any property distributed to such Partner.
(b) From each Partner's Capital Account there shall be subtracted
the amount of cash and the Gross Asset Value of any property distributed to such
Partner pursuant to any provision of this Agreement, such Partner's distributive
share of Net Losses and any items in the nature of expenses or losses which are
specially allocated pursuant to Section 6.3 hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or which are secured by
any property contributed by such Partner to the Partnership.
(c) In the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement (which does not result in a
termination of the Partnership for federal income tax purposes), the transferee
shall succeed to the Capital Account of the transferor to the extent it relates
to the transferred interest.
(d) In determining the amount of any liability for purposes of
subsections (a) and (b) hereof, there shall be taken into account Code section
752(c) and any other applicable provisions of the Code and Regulations.
(e) The foregoing provisions and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are
6.
<PAGE> 48
intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and shall
be interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or the Limited Partners) are computed in order
to comply with such Regulations, the General Partner may make such modification,
provided that it is not likely to have a material effect on the amounts
distributable to any Person pursuant to Article 13 of the Agreement upon the
dissolution of the Partnership, or upon the allocation (for purposes of tax
basis) of the liabilities of the Partnership to the Partners. The General
Partner also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations section 1.704-1(b)
(2) (iv) (q) , and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the amount
of money and the initial Gross Asset Value of any property (other than money)
contributed to the Partnership by such Partner.
"Cash Amount" means, with respect to any Tendered Units, an amount of
cash determined pursuant to Section 8.6.C.
"Certificate" means the Certificate of Limited Partnership relating to
the Partnership filed in the office of the California Secretary of State, as
amended from time to time in accordance with the terms hereof and the Act.
"Charter" means the Articles of Incorporation of the Company filed with
the Maryland State Department of Assessments and Taxation on May 1, 1996, as
amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor statute thereto, as interpreted by the applicable
regulations thereunder. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision-of future law.
"Company" means Arden Realty, Inc., a Maryland corporation, a REIT
whose shares of capital stock are currently traded on the New York Stock
Exchange and the general partner of the General Partner and any successor in
interest whether by sale, transfer, merger, consolidation, reorganization or
other similar event.
7.
<PAGE> 49
"Consent" means the consent to, approval of, or vote on a proposed
action by a Partner given in accordance with this Agreement.
"Consent of the Limited Partners" means the Consent of a Majority In
Interest of the Limited Partners, which Consent shall be obtained prior to the
taking of any action for which it is required by this Agreement and which may be
given or withheld by a Majority in Interest of the Limited Partners, unless
otherwise expressly provided herein, in their sole and absolute discretion.
"Consent of the Partners" means the Consent of Partners holding
Percentage Interests that are greater than 66 2/3% of the aggregate Percentage
Interests of all Partners, which Consent shall be obtained prior to the taking
of any action for which it is required by this Agreement and may be given or
withheld by such Partners, in their sole and absolute discretion.
"Constructively Own" means ownership under the constructive ownership
rules described in Exhibit C.
"Debt" means, as to any Person, as of any date of determination, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect to reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
which, in accordance with generally accepted accounting principles, should be
capitalized.
"Depreciation" means, for each fiscal year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that if
the Gross Asset Value of an asset differs from its adjusted basis for federal
income tax purposes at the beginning of such year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization or other cost
recovery deduction for such year or other period bears to such beginning
adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner.
"Effective Date" means the date this Amended and Restated Agreement has
been fully executed and delivered.
8.
<PAGE> 50
"Exchange" shall have the meaning set forth in Section 8.6.A.
"Fair Market Value" means, with respect to any shares of capital stock
of the Company, the average of the daily market price for the ten (10)
consecutive trading days immediately preceding the date of the Notice of
Exchange. The market price for each such trading day shall be: (i) if such
shares are listed or admitted to trading on any securities exchange or the
Nasdaq National Market, the closing price, regular way, on such day, or if no
such sale takes place on such day, the average of the closing bid and asked
prices on such day, (ii) if such shares are not listed or admitted to trading on
any securities exchange or the Nasdaq National Market, the last reported sale
price on such day or, if no sale takes place on such day, the average of the
closing bid and asked prices on such day, as reported by a reliable quotation
source designated by a mutually acceptable investment banker, or (iii) if such
shares are not listed or admitted to trading on any securities exchange or the
Nasdaq National Market and no such last reported sale price or closing bid and
asked prices are available, the average of the reported high bid and low asked
prices on such day, as reported by a reliable quotation source designated by a
mutually acceptable investment banker, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than 10 days prior to the date in
question) for which prices have been so reported; provided that, if there are no
bid and asked prices reported during the 10 days prior to the date in question,
the Fair Market Value of such shares shall be determined by the General Partner
acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
"Funding Notice" shall have the meaning set forth in Section 4.3.B.
"General Partner" means Arden or its successors as general partner of
the Partnership.
"General Partner Interest" means a Partnership Interest held by the
General Partner.
"General Partner Loan" shall have the meaning set forth in Section
4.3.C.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the General Partner.
9.
<PAGE> 51
(b) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as determined by
the General Partner using such reasonable method of valuation as it may adopt,
as of the times listed below:
(1) the acquisition of an additional interest in the
Partnership by a new or existing Partner in exchange for more than a de minimis
Capital Contribution, if the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(2) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration for an
interest in the Partnership if the General Partner reasonably determines that
such adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;
(3) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); and
(4) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply with Regulations
Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner, or if
the distributee and the General Partner cannot agree on such a determination, by
Appraisal.
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to
the extent that the General Partner reasonably determines that an adjustment
pursuant to subparagraph (b) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph (d).
(e) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subparagraph (a), (b) or (d) , such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Net Income and Net Losses.
10.
<PAGE> 52
"Guarantors" means A.S. Glikbarg, as Trustee of the A.S. Glikbarg
Family Trust, and Ed N. Harrison, as Trustee of the Ed N. Harrison Separate
Property Trust.
"Holder" means either the Partner or Assignee owning a Partnership
Interest.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"Immediate Family" means, with respect to any natural Person, such
natural Person's estate or heirs or current spouse, parents, parents-in-law,
children, siblings and grandchildren and any trust or estate, all of the
beneficiaries of which consist of such Person or such Person's spouse, parents,
parents-in-law, children, siblings or grandchildren.
"Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him or her incompetent to manage his or her Person or
his or her estate; (ii) as to any corporation which is a Partner, the filing of
a certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership; or (iv) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner's
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within 120 days after the
commencement thereof, (g) the appointment without the Partner's consent or
acquiescence of a trustee, receiver of liquidator has not been vacated or stayed
within 90 days of such appointment, or (h) an appointment referred to in clause
(g) is not vacated within 90 days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of his or her status as (A) a Partner or (B) a director
11.
<PAGE> 53
or officer of the Partnership or the General Partner, and (ii) such other
Persons (including Affiliates of the General Partner or the Partnership) as the
General Partner may designate from time to time, in its sole and absolute
discretion.
"Indemnitor" means A.S. Glikbarg, individually and as Trustee of the
A.S. Glikbarg Family Trust, and Ed N. Harrison, individually and as Trustee of
the Ed N. Harrison Separate Property Trust.
"Limited Partner" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit may be amended from time to time, or
any Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of a
Limited Partner representing a fractional part of the Partnership Interests of
all Limited Partners and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement.
"Liquidating Events" shall have the meaning set forth in Section 13.1.
"Liquidator" shall have the meaning set forth in Section 13.2.A.
"Majority in Interest of the Limited Partners" means Limited Partners
(other than any Limited Partner which is an Affiliate of the General Partner)
holding Percentage Interests that are greater than fifty percent (50%) of the
aggregate Percentage Interests of all Limited Partners (other than any Limited
Partner 50% or more whose equity is owned, directly or indirectly, by the
General Partner).
"Majority of Remaining Partners" means Partners other than the General
Partner owning (i) greater than fifty percent (50%) of the profits interests in
the Partnership held by all Partners other than the General Partner, determined
and allocated based on any reasonable estimate of profits from the relevant date
to the projected termination of the Partnership and taking into account present
and future allocations of profits under this Agreement as it is in effect on the
relevant date, and (ii) greater than fifty percent (50% of the capital interests
in the Partnership, determined as of the relevant date under this Agreement,
owned by all the Partners other than the General Partner.
"Net Income" or "Net Loss" means for each fiscal year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such fiscal year as determined in accordance with Code Section 703(a) (for this
purpose, all items of income, gain loss,
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or deduction required to be stated separately pursuant to Code Section 703(a)(1)
shall be included in taxable income or loss) with the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition of Net Income or Net Loss shall be added to
such taxable income or loss;
(b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Net Income or Net Loss pursuant to this definition of Net
Income or Net Loss shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to subparagraph (b) or subparagraph (c) of the definition
of Gross Asset Value, the amount of such adjustment shall be taken into account
as gain or loss from the disposition of such asset for purposes of computing Net
Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year;
(f) To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts as a result of a distribution
other than in liquidation of a Partner's interest in the Partnership, the amount
of such adjustment shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases the basis
of the asset) from the disposition of the asset and shall be taken into account
for purposes of computing Net Income or Net Loss; and
(g) Notwithstanding any other provision of this definition of Net
Income or Net Loss, any items which are specially allocated pursuant to Section
6.3 hereof shall not be taken into account in computing Net Income or Net Loss.
The amounts of the items of Partnership income, gain, loss, or deduction
available to be specially allocated pursuant to Section 6.3 hereof shall be
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determined by applying rules analogous to those set forth in this definition of
Net Income or Net Loss.
"Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions
for a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" shall have the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Notice of Exchange" means the Notice of Exchange substantially in the
form of Exhibit B to this Agreement.
"OP Unit" means, with respect to a limited partnership interest in the
General Partner, a fractional, undivided share of such "Partnership Interest"
(as defined in the Amended and Restated Agreement of Limited Partnership of the
General Partner) ("General Partner's Agreement").
"Partner" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means, an ownership interest in the
Partnership of either a Limited Partner or the General Partner and includes any
and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. The
Partnership Interest of any Partner shall be adjusted to give effect to all
Capital Contributions made to the Partnership after the Effective Date as set
forth in Section 4.3.
"Partnership Minimum Gain" shall have the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership
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Minimum Gain, as well as any net increase or decrease in Partnership Minimum
Gain, for a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof which record date shall be the same as the record date established by the
Company for a distribution to its stockholders of some or all of its portion of
such distribution.
"Partnership Unit" means, with respect to any class of Partnership
Interest, a fractional, undivided share of such class of Partnership Interest
issued pursuant to Sections 4.1 and 4.3. The ownership of Partnership Units may
be evidenced by a certificate for units substantially in the form of Exhibit D
hereto or as the General Partner may determine with respect to any class of
Partnership Units issued from time to time under Section 4.1 and 4.3.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to a Partner holding a Partnership
Interest, its interest in the Partnership as specified in Exhibit A attached
hereto, as such Exhibit may be amended from time to time and may be evidenced by
a certificate substantially in the form of Exhibit D hereto or as the General
Partner may determine with respect to any class of Partnership Interests issued
from time to time under Section 4.1 and 4.3.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Pledge" shall have the meaning set forth in Section 11.3.A.
"Preferred Contribution" shall have the meaning set forth in Section
4.3.G.
"Properties" means such interests in real property and personal
property including without limitation, fee interests, interests, in ground
leases, interests in joint ventures, interests in mortgages, and debt
instruments as the Partnership may hold from time to time.
"Property" means that certain real property commonly known as 1100
Glendon Avenue, Los Angeles, California 90024 which is improved with a
twenty-two (22) story high-rise office building and other improvements and
facilities.
"Prudential Loan" shall have the meaning set forth in Section 4.3.D.
"Qualified Transferee" means an "Accredited Investor" as defined in
Rule 501 promulgated under the Securities Act.
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"Refinanced Debt" shall have the meaning set forth in Section 4.3.D.
"Regulations" means the Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Section
6.3.A(8) of this Agreement.
"REIT" means a real estate investment trust under Section 856 of the
Code.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
"Securities Exchange Act" means the Securities Act of 1934, as amended,
and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
"Specified Exchange Date" means the day of receipt by the General
Partner of a Notice of Exchange.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
"Tax Items" shall have the meaning set forth in Section 6.4.A.
"Tenant" means any tenant from which the General Partner derives rent
either directly or indirectly through partnerships, including the Partnership.
"Tendered Units" shall have the meaning set forth in Section 8.6.A.
"Tendering Partner" shall have the meaning set forth in Section 8.6.A.
"Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
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ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization. The Partnership is a limited partnership and
elects as of the Effective Date to be governed by the Act and upon the terms and
conditions set forth in this Agreement. Except as expressly provided herein, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
Section 2.2 Name. The name of the Partnership is Westwood Center, a
California Limited Partnership. The Partnership's business may be conducted
under any other name or names deemed advisable by the General Partner, including
the name of the General Partner or any Affi1iate thereof. The words "Limited
Partnership, "L.P.," "Ltd," or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership at any time and from
time to time and shall notify the Limited Partners of such change in the next
regular communication to the Limited Partners.
Section 2.3 Resident Agent; Principal Office. The name and address of
the resident agent of the Partnership in the State of California is Victor J.
Coleman, 9100 Wilshire Boulevard, East Tower, Suite 700, Beverly Hills,
California 90212. The address of the principal office of the Partnership is
located at 9100 Wilshire Boulevard, East Tower, Suite 700, Beverly Hills,
California 90212, or such other place as the General Partner may from time to
time designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of California
as the General Partner deems advisable.
Section 2.4 Power of Attorney.
A. Each Limited Partner and each Assignee constitutes and appoints the
General Partner, any Liquidator, and authorized officers and attorneys-in-fact
of each, and each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in its name, place and stead to:
(1) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (a) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner or the Liquidator
deems appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the Limited Partners have limited liability)
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in the State of California and in all other jurisdictions in which the
Partnership may conduct business or own property; (b) all instruments that the
General Partner or any Liquidator deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this Agreement in accordance
with its terms; (c) all conveyances and other instruments or documents that the
General Partner or any Liquidator deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a certificate of cancellation; (d) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article 11 or 12 hereof
or the Capital Contribution of any Partner; and (e) all certificates, documents
and other instruments relating to the determination of the rights, preferences
and privileges of Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or necessary,
in the sole and absolute discretion of the General Partner or any Liquidator, to
evidence, or confirm any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is consistent with the terms
of this Agreement or appropriate or necessary, in the sole discretion of the
General Partner or any Liquidator, to effectuate the terms or intent of this
Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, in recognition of the fact that each of
the Partners will be relying upon the power of the General Partner and any
Liquidator to act as contemplated by this Agreement in any filing or other
action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Interest and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any Liquidator, taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or any Liquidator, within 15 days after receipt of the General
Partner's or Liquidator's request therefor, such further designation, powers of
attorney and other instruments as
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the General Partner or the Liquidator, as the case may be, deems necessary to
effectuate this Agreement and the purposes of the Partnership.
Section 2.5 Term. The term of the Partnership commenced on June 8, 1965
and shall continue until December 31, 2096 unless it is dissolved sooner
pursuant to the provisions of Article 13 or as otherwise provided by law.
Section 2.6 Number of Partners. The Partnership shall not at any time
have more than 100 partners (including as partners those persons indirectly
owning an interest in the Partnership through a partnership, limited liability
company, S corporation or grantor trust (such entity, a "flow through entity"),
but only if substantially all of the value of such person's interest in the flow
through entity is attributable to the flow through entity's interest (direct or
indirect) in the Partnership).
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business. The purpose and nature of the
business to be conducted by the Partnership is (i) to own, operate, renovate,
rehabilitate and manage as a long term investment that certain real property
improved with a twenty-two story high-rise office building located at 1100
Glendon Avenue, Los Angeles, California 90024, commonly known as Westwood Center
(the "Property"), (ii) to conduct any business that may be lawfully conducted by
a limited partnership organized pursuant to the Act, (iii) to enter into any
partnership, joint venture or other similar arrangement to engage in any
business described in the foregoing clause (i) or to own interests in any entity
engaged, directly or indirectly, in any such business and (iv) to do anything
necessary or incidental to the foregoing. In furtherance of the foregoing and
not in limitation thereof, the Limited Partners understand and acknowledge the
announced intention of the General Partner commencing with the Effective Date to
attempt to implement and carry out a plan in one or more phases to totally and
completely renovate, retrofit, rehabilitate and remodel the Property through
additional Capital Contributions, and loans in its sole and unfettered
discretion and without the approval or consent of the Limited Partners and which
action may significantly dilute the Percentage Interests of the Limited
Partners.
Section 3.2 Powers. Subject to the limitations specifically and
expressly set forth in this Agreement, the Partnership is empowered to do any
and all acts and things necessary, appropriate, proper, advisable, incidental to
or convenient for the furtherance and accomplishment of the purposes and
business described herein and for the protection and benefit of the Partnership,
including, without limitation, full power and authority, directly or through its
ownership interest in other entities, to enter into, perform
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and carry out contracts of any kind, borrow money and issue evidences of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or other
lien, acquire and develop real property, and lease, sell, transfer and dispose
of real property; provided, however, that the Partnership shall not take, or
refrain from taking, any action which, in the judgment of the Company or the
General Partner, in either of their sole and absolute discretion, (i) would
adversely affect the ability of the Company to continue to quality as a REIT,
(ii) would subject the Company to any taxes under Section 857 or Section 4981 of
the Code, (iii) would violate any law or regulation of any governmental body or
agency having jurisdiction over the Company or any of its securities, unless any
such action (or inaction) under (i) , (ii) or (iii) shall have been specifically
consented to by the Company in writing or (iv) would constitute a breach of a
fiduciary duty by its officers or directors to the Company's shareholders. If
any action or inaction authorized pursuant to the foregoing sentence (including
any amendment to this Agreement authorized by Section 7.3.C.(3)) would cause the
Guarantors to recognize a material and adverse income tax consequence, prior to
such event, the General Partner and the Guarantors will negotiate in good faith
to attempt to prevent such tax consequence.
Section 3.3 Partnership Only for Purposes Specified. The Partnership
shall be a partnership only for the purposes specified in Section 3.1 hereof,
and this Agreement shall not be deemed to create a partnership among the
Partners with respect to any activities whatsoever other than the activities
within the purposes of the Partnership as specified in Section 3.1 hereof.
Except as otherwise provided in this Agreement, no Partner shall have any
authority to act for, bind, commit or assume any obligation or responsibility on
behalf of the Partnership, its properties or any other Partner. Except as to the
guaranties required of the Guarantors pursuant to Section 4.3.D below, no
Partner, in its capacity as a Partner under this Agreement, shall be responsible
or liable for any indebtedness or obligation of another Partner, nor shall the
Partnership be responsible or liable for any indebtedness or obligation of any
Partner, incurred either before or after the execution and delivery of this
Agreement by such Partner, except as to those responsibilities, liabilities,
indebtedness or obligations incurred pursuant to and as limited by the terms of
this Agreement and the Act.
Section 3.4 Representations and Warranties by the Parties
A. Each Partner that is an individual represents and warrants to each
other Partner that (i) such Partner has the legal capacity to enter into this
Agreement and perform such Partner's obligations hereunder, (ii) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default under,
any agreement by which such Partner or any of such Partner's property is or are
bound, or any statute, regulation, order or other law to
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which such Partner is subject, (iii) such Partner is neither a "foreign person"
within the meaning of Section 1445(f) of the Code nor a "foreign partner" within
the meaning of Section 1446(e) of the Code, and (iv) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
B. Each Partner that is not an individual represents and warrants to
each other Partner that (i) all transactions contemplated by this Agreement to
be performed by it have been duly authorized by all necessary action, including
without limitation, that of its general partner(s), committee(s), trustee(s),
beneficiaries, directors and/or stockholder(s), as the case may be, as
required, (ii) the consummation of such transactions shall not result in a
breach or violation of, or a default under, its partnership agreement, trust
agreement, charter or by-laws, as the case may be, any agreement by which such
Partner or any of such Partner's properties or any of its partners,
beneficiaries, trustees or stockholders, as the case may be, is or are bound, or
any statute, regulation, order or other law to which such Partner or any of its
partners, trustees, beneficiaries or stockholders, as the case may be, is or are
subject, (iii) such Partner is neither a "foreign person" within the meaning of
Section 1445(f) of the Code nor a "foreign partner" within the meaning of
Section 1446(e) of the Code, and (iv) this Agreement is binding upon, and
enforceable against, such Partner in accordance with its terms.
C. Each Partner represents, warrants and agrees that it has acquired
and continues to hold its interest in the Partnership for its own account for
investment only and not for the purpose of, or with a view toward, the resale or
distribution of all or any part thereof, nor with a view toward selling or
otherwise distributing such interest or any part thereof at any particular time
or under any predetermined circumstances. Each Partner further represents and
warrants that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds it has invested in the Partnership in what it
understands to be a highly speculative and illiquid investment.
D. Each Partner further represents, warrants and agrees as follows:
(1) To such Partner's actual knowledge, except as provided in
Exhibit F, it does not, and agrees that it will not without the prior written
consent of the General Partner, actually own or Constructively Own, any stock in
the Company, other than as a result of an exchange of Tendered Units pursuant to
Section 8.6.
(2) Upon request of the General Partner, it will disclose to the
General Partner the amount of shares of the Company that it actually owns or
Constructively Owns.
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E . The representations and warranties contained in Sections 3.4.A,
3.4.B, 3.4.C and 3.4.D hereof shall survive the execution and delivery of this
Agreement by each Partner and the dissolution and wind up of the Partnership.
F. Each Partner hereby acknowledges that no representations as to
potential profit, cash flows, funds from operations or yield, if any, in respect
of the Partnership or the General Partner have been made by any Partner or any
employee or representative or Affiliate of any Partner, and that projections and
any other information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contribution of the Partners. As of the Effective
Date (a) the General Partner shall make the Capital Contribution as set forth in
Exhibit A to this Agreement; (b) Harrison Trust, Elisa Wiley Harrison, Johnny
Ruth Harrison and Christina Oien shall contribute a portion of the interest due
on their notes receivable from the Partnership as set forth on Exhibit A to the
Capital of the Partnership as a Capital Contribution; (c) Glikbarg Trust,
Harrison Trust, Elisa Wiley Harrison, Johnny Ruth Harrison, ________________,
Executor of the Estate of Ruth Harrison Matthes and Thomas S. Harrison IV shall
retain as Capital in the Partnership the agreed value set forth opposite their
names in Exhibit A; and (d) Glikbarg Trust will contribute as a Capital
Contribution additional cash as a Limited Partner in the amount shown on Exhibit
A. The Partners shall own Partnership Interests in the amounts set forth in
Exhibit A and shall have a Percentage Interest in the Partnership as set forth
in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time
to time by the General Partner to the extent necessary to reflect accurately
exchanges, redemptions, Capital Contributions, the issuance of additional
Partnership Interests or similar events having an effect on a Partner's
Percentage Interest; provided that, except as a result of Exchanges, the Limited
Partners in the aggregate shall at all times have at least a one percent (1%)
interest in the Partnership. Except as required by law or as otherwise provided
in Section 4.3, no Partner shall be required or permitted to make any additional
Capital Contributions or loans to the Partnership.
Section 4.2 Loans by Third Parties. Subject to Section 4.3, the
Partnership may incur Debt, or enter into other similar credit, guarantee,
financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any further acquisition of Properties) with any
Person that is not the General Partner upon such terms as the General Partner
determines
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appropriate; provided that, the Partnership shall not incur any Debt that is
recourse to the General Partner, except to the extent otherwise agreed to by the
General Partner in its sole discretion.
Section 4.3 Additional Funding and Capital Contributions.
A. General. The General Partner may, at any time and from time to time,
determine that the Partnership requires additional funds ("Additional Funds")
for such Partnership purposes as the General Partner may determine. Additional
Funds may be raised by the Partnership, at the election of the General Partner,
in any manner provided in, and in accordance with, the terms of this Section
4.3. No Person shall have any preemptive, preferential or similar right or
rights to subscribe for or acquire any Partnership Interest.
B. Funding Notice. The General Partner shall give written notice (the
"Funding Notice") to the Limited Partners of the need for Additional Funds when
in excess, at any one time, of $100,000 and the anticipated source(s) thereof.
C. General Partner Loans. The General Partner may lend the Additional
Funds to the Partnership (a "General Partner Loan"). If the General Partner
enters into a loan to the Partnership, the General Partner Loan will be at an
interest rate of ten (10%) percent per annum.
D. Prudential Loan Refinancing. Notwithstanding anything to the
contrary contained in this Article 4, the General Partner has agreed that with
respect to that certain first trust deed loan in favor of The Prudential
Insurance Company of America in the original principal amount of $16,000,000 and
dated June 5, 1985 (the "Prudential Loan"), and all subsequent first trust deed
loans secured by the Property, the General Partner shall obtain and shall be
solely responsible for obtaining at the cost and expense of and on behalf of the
Partnership refinancing of the unpaid principal balance and accrued but unpaid
interest on the Prudential Loan or the Refinanced Debt, as the case may be,
whether at the maturity, earlier acceleration or voluntary prepayment thereof
(which voluntary prepayment shall be made only upon the election by the General
Partner in its sole discretion) in a transaction or by means whereby (i) there
is a new first trust deed loan secured by the Property in the principal amount
of no less than (a) the then outstanding principal balance of the Prudential
Loan ("Refinanced Debt") or, (b) to the extent the Prudential Loan has been
previously repaid by Refinanced Debt, the then outstanding principal balance of
such Refinanced Debt, (ii) the new loan provides for regular amortization over a
period of not less than twenty-five (25) years so that at all times the
Partnership will have secured debt of not less than the then outstanding
principal balance of the Prudential Loan or the Refinanced Debt, as the case may
be, at the time of said refinancing less amounts previously paid by regular
monthly debt service to amortize such Refinanced
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Debt and (iii) Guarantors are required to give concurrent "bottom dollar"
guaranties with respect to the Refinanced Debt (as hereinafter defined) in the
amount of $10,700,000 and $2,300,000, respectively, so that at all times
Guarantors will have personal liability for $10,700,000 and $2,300,000,
respectively, less principal amounts previously paid by regular monthly debt
service to amortize such Refinanced Debt. Such "bottom dollar" guaranties shall
be in form and substance provided by the Guarantors and reasonably acceptable to
the General Partner and must provide that (i) the lender must first foreclose on
the Property and reduce the amount of the guaranties by the amount of the
proceeds from such foreclosure sale before exercising its rights against
Guarantors; (ii) Guarantors will have no personal liability to the extent of any
reduction in value of the Property due to an earthquake and (iii) the term of
each "bottom dollar" guaranty would be for the life of the Refinanced Debt
subject to earlier termination separately as to each Guarantor thirty (30) days
after the death of that particular Guarantor or his spouse. If the General
Partner elects not to refinance the Prudential Loan prior to the maturity or
earlier acceleration thereof, it shall not be in violation of this Section 4.3.D
as a result of the amortization currently required under the Prudential Loan.
Notwithstanding anything to the contrary in this Section 4.3.D, the amount of
the required Refinanced Debt may be further reduced by the amount of $10,700,000
upon the death of Ed N. Harrison or his spouse and/or by the amount of
$2,300,000 upon the death of A.S. Glikbarg or his spouse. A dissolution, merger,
consolidation reorganization or other combination of the Partnership which
results in the termination of the Partnership and that is made in compliance
with the provisions of Section 7.3.E.(2) shall not constitute a default by the
General Partner under this Section 4.3.D.
E. Issuance of Additional Partnership Interests. If specified in the
Funding Notice to the Limited Partners, the General Partner, in its sole and
absolute discretion, may raise all or any portion of the Additional Funds by
accepting additional Capital Contributions, subject to Section 4.3.F in the
event additional Capital Contributions are made in cash. In connection with any
such additional Capital Contributions (of cash or property), the General Partner
is hereby authorized to cause the Partnership from time to time to issue to
Partners (including the General Partner) or other persons (including, without
limitation, in connection with the contribution of property to the Partnership)
additional Partnership Interests as shall be determined by the General Partner
in its sole and absolute discretion subject to Section 4.3.G hereof and
California law, including without limitation, the allocations of items of
Partnership income, gain, loss and deduction.
F. Participation Rights of Partners. The Funding Notice delivered by
the General Partner prior to its making or accepting (on behalf of the
Partnership) any additional cash Capital Contributions pursuant to Section 4.3.E
hereof shall contain the
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total amount of additional Capital Contributions sought to be made to the
Partnership, and the terms and conditions pertaining thereto. Each Limited
Partner may elect to make an additional Capital Contribution not to exceed the
product of (i) the total amount of additional Capital Contributions being
sought, and (ii) such Limited Partner's Percentage Interest (with such product
deemed the "Pro Rata Contribution"). For purposes of determining the Limited
Partner's Pro Rata Contribution (or the Pro Rata Participation (as defined
below) ) , the Limited Partner's Percentage Interest shall mean the Percentage
Interest with respect to the Partnership Interests issued to the Limited Partner
on the Effective Date. Such election shall be made, if at all, by providing
written notice thereof (the "Election Notice") to the General Partner within
five (5) days after delivery of the Funding Notice. Failure to respond to such
Funding Notice shall be deemed to be an election by such Limited Partner not to
make such Capital Contribution. Such Election Notice shall contain the amount of
the additional Capital Contribution, if any, such Limited Partner is electing to
make (such additional Capital Contribution not to exceed the Pro Rata
Contribution).
G. Percentage Interest Adjustments in the Case of Capital
Contributions. Upon the acceptance of additional Capital Contributions the
Percentage Interest related thereto shall be equal to a fraction, the numerator
of which is equal to the amount of cash contributed and the denominator of which
is equal to the sum of (i) the aggregate amount of Capital Contributions
contributed by all Partners prior to the Business Day immediately preceding the
date on which the additional Capital Contributions are made ["Adjustment Date"])
and (ii) the aggregate amount of additional Capital Contributions contributed by
all Partners and/or third parties to the Partnership on such Adjustment Date in
respect of such class of Partnership Interests. The Percentage Interest of each
other Partner holding Partnership Interests of such class not making a full pro
rata Capital Contribution shall be adjusted to equal to a fraction, the
numerator of which is equal to the sum of (i) the aggregate amount of Capital
Contributions contributed by such Limited Partner (computed as of the Business
Day immediately preceding the Adjustment Date) and (ii) the amount of additional
Capital Contributions, if any, made by such Partner to the Partnership in
respect of such class of Partnership Interests as of such Adjustment Date, and
the denominator of which is equal to the sum of (i) the aggregate amount of
Capital Contributions contributed by all Partners prior to the Business Day
immediately preceding the Adjustment Date), plus (ii) the aggregate amount of
additional Capital Contributions contributed by all Partners and/or third
parties to the Partnership on such Adjustment Date in respect of such class. The
General Partner shall promptly give each Partner written notice of its
Percentage Interest, as adjusted. If as a result of Additional Capital
Contributions by the General Partner, the Percentage Interest of the Limited
Partners would drop below one percent (1%) but for the penultimate sentence of
Section 4.1, the General Partner is empowered to cause an amendment to this
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Agreement to treat such excess Additional Capital Contributions as a "Preferred
Contribution" which will entitle the General Partner to cumulative preferential
distributions (and allocations) from the Partnership until such Preferred
Contribution(s) and a return thereon of fifteen percent (50%) per annum,
compounded, has been received by the General Partner on account thereof.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions. The
General Partner shall cause the Partnership to distribute quarterly all, or such
portion as the General Partner may in its discretion determine, of Available
Cash generated by the Partnership during such quarter to the Partners who are
Partners on the Partnership Record Date with respect to such quarter, (1) first,
with respect to any Partnership Interests that are entitled to any preference in
distribution, (and pro rata in proportion to the respective Percentage Interests
on such Partnership Record Date), and, (2) second, with respect to Partnership
Interests that are not entitled to any preference in distribution, pro rata to
each such class in accordance with the terms of such class (and within each such
class, pro rata in proportion with the respective Percentage Interests on such
Partnership Record Date). Unless otherwise expressly provided for herein or in
an agreement at the time a new class of Partnership Interests is created in
accordance with Article 4 hereof, no Partnership Interest shall be entitled to a
distribution in preference to any other Partnership Interest. The General
Partner shall use its best efforts to distribute sufficient cash to allow
Partners to pay tax on Net Income.
Section 5.2 Distributions in Kind. No right is given to any Partner to
demand and receive property other than cash. The General Partner may determine,
in its sole and absolute discretion, to make a distribution in kind to the
Partners of Partnership assets, and such assets shall be distributed in such a
fashion as to ensure that the fair market value is distributed and allocated in
accordance with Articles 5 and 6.
Section 5.3 Distributions Upon Liquidation. Proceeds from a Terminating
Capital Transaction shall be distributed to the Partners in accordance with
Section 13.2.
Section 5.4 Distribution to Reflect Issuance of Additional Partnership
Interests. In the event that the Partnership issues additional Partnership
Interests to the General Partner or any Additional Limited Partner pursuant to
Section 4.3 hereof, the General Partner shall make such revisions to this
Article 5 as it determines are necessary to reflect the issuance of such
additional Partnership Interests.
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ARTICLE 6
ALLOCATIONS
Section 6.1 Timing and Amount of Allocations of Net Income and Net
Loss. Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each fiscal year of the Partnership as of the end of
each such year. Subject to the other provisions of this Article 6, an allocation
to a Partner of a share of Net Income or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.
Section 6.2 General Allocations.
A. Except as otherwise provided in this Article 6, Net Income and Net
Loss shall be allocated to each of the Partners holding the same class of
Partnership Interests in accordance with their respective Percentage Interest of
such class.
B. Allocations to Reflect Issuance of Additional Partnership Interests.
In the event that the Partnership issues additional Partnership Interests to the
General Partner or any Additional Limited Partner pursuant to Section 4.3
hereof, the General Partner shall make such revisions to this Section 6.2 as it
determines are necessary to reflect the issuance of such additional Partnership
Interests.
Section 6.3 Additional Allocation Provisions. Notwithstanding the
foregoing provisions of this Article 6:
A. Regulatory Allocations.
(1) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of Section
6.2 of the Agreement, or any other provision of this Article 6, if there is a
net decrease in Partnership Minimum Gain during any fiscal year, each Partner
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner's share
of the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be allocated shall be determined in accordance
with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2) . This Section
6.3.A(l) is intended to qualify as a "minimum gain chargeback" within the
meaning of Regulation Section 1.704-2(f) which shall be controlling in the event
of a conflict between such Regulation and this Section 6.3.A(l).
(2) Partner Minimum Gain Chargeback. Except as otherwise provided
in Regulations Section 1.704-2(i) (4), and notwithstanding the provisions of
Section 6.2 of the Agreement, or any
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other provision of this Article 6 (except Section 6.3.A(l)) if there is a net
decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any fiscal year, each Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Partner's share of the net decrease in Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each General Partner and Limited Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Regulations
Sections 1.704-2(i)(4) and 1.7042(j)(2). This Section 6.3.A(2) is intended to
qualify as a "chargeback of partner nonrecourse debt minimum gain" within the
meaning of Regulation Section 1.704-2(i)(4) which shall be controlling in the
event of a conflict between such Regulation and this Section 6.3.A(2).
(3) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any
Nonrecourse Deductions for any fiscal year shall be specially allocated to the
Partners in accordance with their Percentage Interests. Any Partner Nonrecourse
Deductions for any fiscal year shall be specially allocated to the Partner(s)
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable, in accordance
with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(4) Qualified Income Offset. If any Partner unexpectedly receives
an adjustment, allocation or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall
be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to
the Partner in an amount and manner sufficient to eliminate, to the extent
required by such Regulations, the Adjusted Capital Account Deficit of the
Partner as quickly as possible provided that an allocation pursuant to this
Section 6.3.A(4) shall be made if and only to the extent that such Partner would
have an Adjusted Capital Account Deficit after all other allocations provided in
this Article 6 have been tentatively made as if this Section 6.3.A(4) were not
in the Agreement. It is intended that this Section 6.3.A(4) qualify and be
construed as a "qualified income offset" within the meaning of Regulations
1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict
between such Regulations and this Section 6.3.A(4).
(5) Gross Income Allocation. In the event any Partner has a deficit
Capital Account at the end of any fiscal year which is in excess of the sum of
(1) the amount (if any) such Partner is obligated to restore to the Partnership,
and (2) the amount such
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Partner is deemed to be obligated to restore pursuant to Regulations Section
1.704-1(b) (2) (ii) (c) or the penultimate sentences of Regulations Sections
1.704-2(g) (1) and 1.704-2(i) (5), each such Partner shall be specially
allocated items of Partnership income and gain in the amount of such excess as
quickly as possible, provided that an allocation pursuant to this Section
6.3.A(5) shall be made if and only to the extent that such Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided in this Article 6 have been tentatively made as if this Section
6.3.A(5) and Section 6.3.A(4) were not in the Agreement.
(6) Limitation on Allocation of Net Loss. To the extent any
allocation of Net Loss would cause or increase an Adjusted Capital Account
Deficit as to any Partner, such allocation of Net Loss shall be reallocated
among the other Partners in accordance with their respective Percentage
Interests, subject to the limitations of this Section 6.3.A(6).
(7) Section 754 Adjustment. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b) (2)
(iv) (m) (2) or Regulations Section 1.704-1(b) (2) (iv) (m) (4), to be taken
into account in determining Capital Accounts as the result of a distribution to
a Partner in complete liquidation of his interest in the Partnership, the amount
of such adjustment to the Capital Accounts shall be treated as an item of gain
(if the adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Partners in accordance with their interests in the Partnership in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to
whom such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
(8) Curative Allocation. The allocations set forth in Sections
6.3.A(l), (2), (3), (4), (5), (6), and (7) (the "Regulatory Allocations") are
intended to comply with certain regulatory requirements, including the
requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be taken
into account in allocating other items of income gain, loss and deduction among
the Partners so that, to the extent possible, the net amount of such allocations
of other items and the Regulatory Allocations to each Partner shall be equal to
the net amount that would have been allocated to each such Partner if the
Regulatory Allocations had not occurred.
B. For purposes of determining a Partner's proportional share of the
"excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), each Partner's interest in Partnership
profits shall be such Partner's Percentage Interest.
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Section 6.4 Tax Allocations
A. In General. Except as otherwise provided in this Section 6.4, for
income tax purposes each item of income, gain, loss and deduction (collectively,
"Tax Items") shall be allocated among the Partners in the same manner as its
correlative item of "book" income, gain, loss or deduction is allocated pursuant
to Sections 6.2 and 6.3.
B. Allocations Respecting Section 704 (c) Revaluations. Notwithstanding
Section 6.4.A, Tax Items with respect to Partnership property that is
contributed to the Partnership by a Partner shall be shared among the Partners
for income tax purposes pursuant to Regulations promulgated under Section 704(c)
of the Code, so as to take into account the variation, if any, between the basis
of the property to the Partnership and its initial Gross Asset Value. With
respect to properties contributed to the Partnership, the Partnership shall
account for such variation under any method approved under Section 704 (c) of
the Code and the applicable regulations as chosen by the General Partner. In the
event the Gross Asset Value of any Partnership asset is adjusted pursuant to
subparagraph (b) of the definition of Gross Asset Value (provided in Article 1
of this Agreement), subsequent allocations of Tax Items with respect to such
asset (including but not limited to the Property) shall take account of the
variation, if any, between the adjusted basis of such asset and its Gross Asset
Value in the same manner as under Section 704 (c) of the Code and the applicable
regulations consistent with the requirements of Regulations Section
1.704-1(b)(2)(iv)(g) using the "traditional method" (with the "ceiling rule") as
described in Regulations Section 1.704-3(b)(1)
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are
exclusively vested in the General Partner, and no Limited Partner shall have any
right to participate in or exercise control or management power over the
business and affairs of the Partnership. The General Partner may not be removed
by the Limited Partners with or without cause, except with the consent of the
General Partner. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement, the General
Partner, subject to the other provisions hereof including Section 7.3, shall
have full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set forth
in Section 3.2 hereof and to effectuate the
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purposes set forth in Section 3.1 hereof, including, without limitation:
(1) except as specifically provided to the contrary in Sections
4.3.D and 7.3.E, the making of any expenditures, the lending or borrowing of
money (including, without limitation making prepayments on loans and borrowing
money to permit the Partnership to make distributions to its Partners in such
amounts as will permit the Company (so long as the Company has determined to
qualify as a REIT) to avoid the payment of any federal income tax (including,
for this purpose, any excise tax pursuant to Section 4981 of the Code) and to
make distributions to its stockholders sufficient to permit the Company to
maintain REIT status), the assumption or guarantee of, or other contracting
for, indebtedness and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by mortgage, deed of trust or other
lien or encumbrance on the Partnership's assets) and the incurring of any
obligations it deems necessary for the conduct of the activities of the
Partnership;
(2) the making of tax, regulatory and other filings, or rendering
of periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of, the Partnership;
(3) except as specifically provided to the contrary in Sections
4.3.D and 7.3.E, the acquisition, disposition, mortgage, pledge, encumbrances
hypothecation or exchange of any assets of the Partnership or the merger or
other combination of the Partnership with or into another entity;
(4) except as specifically provided to the contrary in Sections
4.3.D and 7.3.E, the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership, and the use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose consistent with
the terms of this Agreement and on any terms it sees fit, including, without
limitation, the financing of the conduct or the operations of the General
Partner or the Partnership, the lending of funds to other Persons (including,
without limitation, the General Partner (if necessary to permit the financing or
capitalization of a subsidiary of the General Partner or the Partnership) or any
Subsidiaries of the Partnership) and the repayment of obligations of the
Partnership, any of its Subsidiaries and any other Person in which it has an
equity investment;
(5) the negotiation, execution, and performance of any contracts,
leases, conveyances or other instruments that the General Partner considers
useful or necessary to the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this Agreement;
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(6) the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement;
(7) the selection and dismissal of employees of the Partnership
(including, without limitation, employees having titles such as "chairman,"
"chief executive officer," "chief operating officer," "president," "vice
president," "secretary" and "treasurer"), and agents, outside attorneys,
accountants, consultants and contractors of the Partnership, the determination
of their compensation and other terms of employment or hiring, including waivers
of conflicts of interest and the payment of their expenses and compensation out
of the Partnership's assets;
(8) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate, it being
agreed, however, that the General Partner shall cause the Partnership to
maintain a minimum of $3,000,000 public liability insurance and to maintain fire
and extended coverage property insurance in the full insurable value of the
Property and to maintain earthquake insurance if and to the extent as the
Company generally maintains it for its properties and to maintain any other
insurance or increased limits required by any lender to the Partnership;
(9) except as specifically provided to the contrary in Section
7.3.E, the formation of, or acquisition of an interest in, and the contribution
of property to, any further limited or general partnerships, joint ventures or
other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to any Subsidiary
and any other Person in which it has an equity investment from time to time);
provided that, as long as the Company has determined to continue to qualify as a
REIT, the Partnership may not engage in any such formation, acquisition or
contribution that would cause the Company to fail to qualify as a REIT;
(10) except as specifically provided to the contrary in the
Contribution Agreement, the control of any matters affecting the rights and
obligations of the Partnership, including the conduct of litigation and the
incurring of legal expense and the settlement of claims and litigation, and the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law;
(11) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Person (including, without
limitation, contributing or loaning Partnership funds to, incurring indebtedness
on behalf of, or guarantying the obligations of any such Persons);
(12) subject to the other provisions in this Agreement, the
determination of the fair market value of any Partnership property distributed
in kind using such reasonable method of
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valuation as it may adopt, provided that such methods are otherwise consistent
with requirements of this Agreement;
(13) the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or improvements owned
by the Partnership or any Subsidiary of the Partnership or any Person in which
the Partnership has made a direct or indirect equity investment;
(14) holding, managing, investing and reinvesting cash and other
assets of the Partnership;
(15) the collection and receipt of revenues and income of the
Partnership;
(16) the exercise, directly or indirectly through any
attorney-in-fact acting under a general or limited power of attorney, of any
right, including the right to vote, appurtenant to any asset or investment held
by the Partnership;
(17) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any Subsidiary
of the Partnership or any other Person in which the Partnership has a direct or
indirect interest, or jointly with any such Subsidiary or other Person;
(18) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the Partnership
does not have an interest pursuant to contractual or other arrangements with
such Person; and
(19) subject to the requirements of Section 4.3 D and Section
7.3.E, the making, execution and delivery of any and all deeds, leases, notes,
deeds to secure debt, mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, Warranties, indemnities, waivers, releases
or legal instruments or agreements in writing necessary or appropriate in the
judgment of the General Partner for the accomplishment of any of the powers of
the General Partner enumerated in this Agreement.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the abovementioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the partners, notwithstanding any other provisions of this Agreement
(except as provided in Sections 4.3.D and 7.3), the Act or any applicable law,
rule or regulation. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
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C. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the properties of the Partnership and (ii) liability insurance for
the Indemnities hereunder.
D. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain working capital reserves in such
amounts as the General Partner, in it sole and absolute discretion, deems
appropriate and reasonable from time to time.
E. Except as specifically provided to the contrary in Sections 3.2,
4.3.D and 7.3.E, in exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action taken
by it. Except for the General Partner's or the Partnership's failure to comply
with Sections 3.2, 4.3.D and 7.3.E, the General Partner and the Partnership
shall not have liability to a Partner under any circumstances as a result of an
income tax liability incurred by such Limited Partner as a result of an action
(or inaction) by the General Partner pursuant to its authority under this
Agreement.
Section 7.2 Certificate of Limited Partnership. To the extent that such
action is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of California and each other state, the
District of Columbia or other jurisdiction, in which the Partnership may elect
to do business or own property. Subject to the terms of Section 8.5.A(4) hereof,
the General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate or any amendment thereto to any Limited Partner.
The General Partner shall use all reasonable efforts to cause to be filed such
other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of California, any other state, or the District of
Columbia or other jurisdiction, in which the Partnership may elect to do
business or own property.
Section 7.3 Restrictions on General Partner's Authority
A. The General Partner may not take any action in contravention of an
express prohibition or limitation of this Agreement, including, without
limitation:
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(1) take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement;
(2) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose except as otherwise
provided in this Agreement;
(3) perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other liability except
as provided herein or under the Act; or
(4) enter into any contract, mortgage, loan or other agreement that
expressly prohibits or restricts the ability of a Limited Partner to exercise
its rights to an Exchange in full, except with the written consent of such
Limited Partner.
B. The General Partner shall not, without the prior Consent of the
Partners, undertake, on behalf of the Partnership, any of the following actions:
(1) except as provided in Section 7.3.C, amend, modify or terminate
this Agreement other than to reflect the admission, substitution, termination or
withdrawal of partners pursuant to Article 12 hereof, provided that any
amendment of Sections 4.3.D, 6.4.B and 7.3.E shall only be made in compliance
with Section 7.3.E;
(2) make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver or trustee for
all or any part of the assets of the Partnership;
(3) institute any proceeding for bankruptcy on behalf of the
Partnership; or
(4) confess a judgment against the Partnership.
C. Notwithstanding Section 7.3.B and 7.3.E.(3), the General Partner
shall have the exclusive power to amend this Agreement as may be required to
facilitate or implement any of the following purposes:
(1) to reflect a change that is of an inconsequential nature and
does not adversely, affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;
(2) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or
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regulation of a federal or state agency or contained in federal or state law;
and
(3) to reflect such changes as are reasonably necessary for the
Company to maintain status as a REIT, including changes which may be
necessitated due to a change in applicable law (or an authoritative
interpretation thereof) or a ruling of the IRS.
The General Partner will provide notice to the Limited Partners before any
action under this Section 7.3.C is taken.
D. Notwithstanding Section 7.3.B and 7.3.C hereof, this Agreement shall
not be amended with respect to any Partner adversely affected, and no action may
be taken by the General Partner, without the Consent of such Partner adversely
affected if such amendment or action would (i) convert a Limited Partner's
interest in the Partnership into a general partner's interest (except as the
result of the General Partner acquiring such interest) , (ii) modify the limited
liability of a Limited Partner, (iii) alter rights of the Partner to receive
distributions pursuant to Article 5 or Section 13.2.A(4), or the allocations
specified in Article 6 (except as permitted pursuant to Section 4.3 and Section
7.3.C(3) hereof), (iv) materially alter or modify the rights to an Exchange as
set forth in Section 8.6, and related definitions hereof or (v) amend this
Section 7.3.D unless the General Partner is acting pursuant to its powers under
Section 7.3.E(4) in which event no Consent of any affected Partner shall be
required. Further, no amendment may alter the restrictions on the General
Partner's authority set forth elsewhere in this Section 7.3 without the Consent
specified in such section.
E. So long as either (1) A.S. Glikbarg and his spouse or (2) Ed N.
Harrison and his spouse are living, the General Partner shall not cause or
suffer the Partnership to take any of the following actions without the prior
Consent of the Glikbarg Trust (if both A.S. Glikbarg and his spouse are living)
and the Harrison Trust (if both Ed N. Harrison and his spouse are living):
(1) for the period of two (2) years following the Effective Date,
(a) dissolve the Partnership or (b) merge, consolidate, reorganize or otherwise
combine the Partnership in a transaction to which the Partnership is a party; or
(2) (a) after the two (2) year period following the Effective Date,
and until the end of the ten (10) year period following the Effective Date,
dissolve the Partnership, or merge, consolidate, reorganize or otherwise combine
the Partnership in a transaction to which the Partnership is a party, unless
such dissolution or other transaction (i) is structured in a manner that does
not trigger any material adverse income tax consequences to A.S. Glikbarg or Ed
N. Harrison and (ii) provides for the continuation of the substance of the
provisions set forth in Sections 4.3.D and 6.4.B (regarding allocations under
Code Section
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704 (c) ) and 7 .3. E (2) ; (b) for a period of ten (10) years following the
Effective Date, sell, transfer or dispose of the Property other than in a
tax-deferred exchange qualifying under Section 1031 of the Code or equivalent,
successor, replacement or additional Code Sections in which no gain or loss is
recognized for income tax purposes unless the Partnership has been merged into
the General Partner in accordance with clause (a) above and the Company or the
General Partner sells substantially all of its assets in a single or series of
related taxable transactions. The foregoing ten (10) year limitation shall
terminate upon the death of both (a) A.S. Glikbarg or his spouse and (b) Ed N.
Harrison or his spouse. However, notwithstanding the ten (10) year period set
forth in clauses (a) and (b) of the first sentence of this Section 7.3.E.(2),
while both Mr. and Mrs. Glikbarg or both Mr. and Mrs. Harrison are living after
the ten (10) year period has expired the General Partner agrees to cooperate
with both families to attempt to structure any proposed transaction so that (i)
it would not trigger significant federal income taxes to either of them or their
trusts as Limited Partners, and (ii) if the proposed transaction involves a
merger, consolidation, reorganization or other combination in which the
Partnership is not the surviving entity, the transaction provides for the
continuation of the substance of the provisions set forth in Sections 4. 3. D,
6. 4. B and 7. 3. E. (2) ; provided, however, if after such ten (10) year period
has expired (and for so long as both Mr. and Mrs. Glikbarg or both Mr. and Mrs.
Harrison are living), (x) the General Partner and such persons reach agreement
on a structure which satisfies one but not both of the objectives set forth in
clauses (i) and (ii) above, then the General Partner may pursue its proposed
transaction but only in accordance with such agreement and without any other
obligations under this Section 7.3.E.(2) with respect to the tax treatment of
the Limited Partners, and (y) if the General Partner and such persons do not
reach agreement on a structure which satisfies either of the objectives set
forth in clauses (i) and (ii) above, then the General Partner may pursue its
proposed transaction without any obligations under this Section 7.3.E.(2) with
respect to the tax treatment of the Limited Partners.
(3) Modify or amend Sections 4.3.D, 6.4.B and this Section 7.3.E.
(4) Notwithstanding the foregoing limitations in Section
7.3.E.(l) or (2) or those contained in Section 8.6.F such provisions shall in no
way limit the General Partner's ability to (a) engage in a "Termination
Transaction" as defined in the partnership agreement of the General Partner
(including the transactions described under Section 11.2.C of such agreement)
(b) engage in a transaction designed to sell, transfer, merge, consolidate,
reorganize or roll-up all or substantially all of the assets of the General
Partner with another entity for the benefit of the shareholders of the Company
or (c) act or refrain from acting in a way or manner so as to avoid a breach by
the General Partner, the Company, or its board of directors of any fiduciary
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duty to the Company or its shareholders, and none of the General Partner, the
Partnership or any other party shall have any liability under this Agreement for
engaging in such a transaction, action or in action.
Section 7.4 Reimbursement of the General Partner
A. Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not hereafter be compensated for its services as general partner of the
Partnership.
B. The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to the ownership of interests in
and operation of, or for the benefit of, the Partnership. Such reimbursements
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7 hereof.
C. If and to the extent any reimbursements to the General Partner
pursuant to this Section 7.4 constitute gross income of the General Partner (as
opposed to the repayment of advances made by the General Partner on behalf of
the Partnership), such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners, Capital Accounts.
Section 7.5 Outside Activities of the General Partner
The General Partner and/or its Affiliates, may engage in or possess an
interest in other business ventures of every nature and description,
independently or with others, whether such ventures are competitive with the
Partnership or otherwise; and except as expressly provided in an independent
written and duly executed instrument, neither the Partnership nor the Partners
shall have any right by virtue of this Agreement in or to such independent
ventures or to the income or profits derived therefrom.
Section 7.6 Contracts with Affiliates
A. The General Partner without the approval of the Limited Partners,
may propose and adopt on behalf of the Partnership employee benefit plans funded
by the Partnership for the benefit of employees of the Partnership in respect of
services performed, directly or indirectly, for the benefit of the Partnership.
B. The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, a right of first opportunity arrangement
and other conflict avoidance
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agreements with various Affiliates of the Partnership and the General Partner,
on such terms as the General Partner, in its sole and absolute discretion,
believes are advisable.
Section 7.7 Indemnification
A. The Partnership shall indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceeding and either was committed in bad faith or
was the result of dishonesty or gross negligence; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. Without limitation, except as to
the guaranties by the Guarantors now or hereafter in effect as described in
Section 4.3.D of this Agreement for which the Partnership shall not be obligated
to indemnify the Guarantors, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to) , and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7.A. The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
any entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Partnership.
B. Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding may be paid or reimbursed by the Partnership in advance of the final
disposition of the proceeding upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall
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ultimately be determined that the standard of conduct has not been met.
C . The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.
D. The Partnership may purchase and maintain insurance on behalf of the
Indemnities and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
E. For purposes of this Section 7.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of Section 7.7; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
F. In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
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I. If and to the extent any reimbursements to the General Partner
pursuant to this Section 7.7 constitute gross income of the General Partner (as
opposed to the repayment of advances made by the General Partner on behalf of
the Partnership) such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners' Capital Accounts.
J. Any indemnification hereunder is subject to, and limited by, the
provisions of the Act.
Section 7.8 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable or accountable in damages or
otherwise to the Partnership, any Partners or any Assignees for losses
sustained, liabilities incurred or benefits not derived as a result of errors in
judgment or mistakes of fact or law or any act or omission if the General
Partner acted in good faith.
B. The Limited Partners expressly acknowledge that the General Partner
is acting for the benefit of the Partnership, the Limited Partners and the
General Partner's partners collectively, that except as otherwise specifically
provided in Sections 4.3.D and 7.3.E, the General Partner is under no obligation
to give priority to the separate interests of the Limited Partners or the
General Partner's partners (including, without limitation, the tax consequences
to Limited Partners or Assignees or to stockholders) in deciding whether to
cause the Partnership to take (or decline to take) any actions and that except
as specifically provided in Sections 4.3.D and 7.3.E, the General Partner shall
not be liable to the Partnership or to any Partner for monetary damages for
losses sustained, liabilities incurred, or benefits not derived by Limited
Partners in connection with such decisions, provided that the General Partner
has acted in good faith.
C. Subject to its obligations and duties as General Partner set forth
in Sections 4.3.D and 7.3.E, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
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modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9 Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers and other consultants and
advisers selected by it, and any act reasonably taken or reasonably omitted to
be taken in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or any
nonmandatory provision of the Act, any action of the Company as general partner
of the General Partner on behalf of the Partnership, or any decision of the
Company as general partner of the General Partner to refrain from acting on
behalf of the Partnership, undertaken in the good faith belief that such action
or omission is necessary or advisable in order (i) to protect the ability of the
Company to continue to qualify as a REIT or (ii) to avoid the Company incurring
any taxes under Section 857 or Section 4981 of the Code, is expressly authorized
under this Agreement and is deemed approved by all of the Limited Partners.
Section 7.10 Title to Partnership Assets. Title to Partnership assets,
whether real, personal or mixed and whether tangible or intangible, shall be
deemed to be owned by the Partnership as an entity, and no Partners,
individually or collectively, shall have any ownership interest in such
Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may determine, including
Affiliates of the General Partner. The General Partner hereby declares and
warrants that any Partnership assets for which legal title is held in the name
of the General Partner or any nominee or
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Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
Section 7.11 Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement or
under the Act.
Section 8.2 Management of Business. No Limited Partner or Assignee
(other than the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner, the Partnership or
any of their Affiliates, in their capacity as such) shall take part in the
operations, management or control (within the meaning of the Act) of the
Partnership's business, transact any business in the Partnership's name or
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have the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such,
shall not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Any Limited Partner
and any officer, director, employee, agent, trustee, Affiliate or stockholder of
any Limited Partner shall be entitled to and may have business interests and
engage in business activities in addition to those relating to the Partnership,
including business interests and activities in direct competition with the
Partnership or that are enhanced by the activities of the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any
business ventures of any other Person, other than the Limited Partners
benefitting from the business conducted by the General Partner, and such Person
shall have no obligation pursuant to this Agreement to offer any interest in any
such business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such
Person.
Section 8.4 Return of Capital. Except pursuant to the rights of
Exchange set forth in Section 8.6, no Limited Partner shall be entitled to the
withdrawal or return of his or her Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. No Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of
Capital Contributions, or otherwise expressly provided in this Agreement, as to
profits, losses, distributions or credits.
Section 8.5 Rights of Limited Partners Relating to the Partnership
A. In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.B hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at the Partnership's expense:
(1) to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by the Company
pursuant to the Securities Exchange Act, and each communication sent to the
stockholders of the Company;
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(2) to obtain a copy of the Partnership's federal, state and local
income tax returns for each Partnership Year;
(3) to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(4) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments thereto
have been executed; and
(5) to obtain true and full information regarding the amount of
cash and a description and statement of any other property or services
contributed by each Partner and which each Partner has agreed to contribute in
the future, and the date on which each became a Partner.
B. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, any information that (i) the General Partner believes to be in the
nature of trade secrets or other information the disclosure of which the General
Partner in good faith believes is not in the best interests of the Partnership
or (ii) the Partnership or the General Partner is required by law or by
agreements with unaffiliated third parties to keep confidential.
Section 8.6 Exchange Rights
A. On or after the date one (1) year after the Effective Date, each
Limited Partner (acting individually) shall have the right (subject to the terms
and conditions set forth herein) to require the General Partner to acquire all
(but not a portion) of the Partnership Interests held by such Limited Partner
(such Partnership Interests being hereafter referred to as "Tendered Units") in
exchange for cash in the amount set forth in Section 8.6.C. (an "Exchange") .
Notwithstanding the foregoing, any Limited Partner may purchase all or a portion
of the Partnership Interests of another Limited Partner (the "Purchased Units"),
in which case such purchasing Limited Partner shall have (i) the right to
require the General Partner to acquire all (but not a portion) of the Purchased
Units in an Exchange, and also (ii) the right to require the General Partner to
acquire all (but not a portion) of the Partnership Units held by such Limited
Partner other than the Purchased Units in an Exchange, which rights need not be
exercised concurrently. Unless otherwise expressly provided in this Agreement or
in a separate agreement entered into between the General Partner and the Limited
Partners, all Limited Partnership Interests shall be entitled to a right of
Exchange hereunder. Any Exchange shall be exercised pursuant to a Notice of
Exchange delivered to the General Partner by the Limited Partner who is
exercising the right (the "Tendering Partner").
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B. Notwithstanding Section 8.6.A above, if a Limited Partner has
delivered to the General Partner a Notice of Exchange then the General Partner
may, in its sole and absolute discretion, (subject to the limitations on
ownership and transfer of the General Partner) acquire the Tendered Units from
the Tendering Partner in exchange for a number of OP Units (as of the Specified
Exchange Date) as set forth in Section 8.6.C and the Tendering Partner shall
transfer the Tendered Units to the General Partner in exchange for such OP
Units. In such event, the Tendering Partners shall have no right to require the
General Partner to acquire such Tendered Units in exchange for cash. The General
Partner shall promptly give such Tendering Partner written notice of its
election , and the Tendering Partner may elect to withdraw its request for an
Exchange at any time prior to the acceptance of the cash or OP Units by such
Tendering Partner.
C. Upon receipt of the Notice of Exchange, the General Partner shall
cause an Appraisal of the Property as of the date of the Notice of Exchange to
determine its then fair market value and shall engage the Partnership's
accountants to determine the amount of the liquidating distribution (the "Cash
Amount") that would be made to the Tendering Partner pursuant to Section 5.3 if
the Property had been sold in an arm's length transaction for its fair market
value as determined by the Appraisal, the liabilities of the Partnership had
been paid, the Partnership closed its books on the date of the Notice of
Exchange with respect to other items of income and expense, and the Partnership
dissolved. The Tendered Units shall be acquired as of the Specified Exchange
Date for the Cash Amount or, in the sole and absolute discretion of the General
Partner, exchanged for the number of OP Units of the General Partner equal to
the Cash Amount divided by the Fair Market Value of a share of capital stock of
the Company. Such Exchange shall be consummated no later than ten (10) business
days following the determination of the Cash Amount.
D. The General Partner agrees to cause a Tendering Partner who is to
receive OP Units to be admitted as an Additional Limited Partner of the General
Partner and the Tendering Partner shall execute an amendment to the agreement of
limited partnership of the General Partner reflecting its admission and
percentage interest in the General Partner and its agreement to abide by the
partnership agreement of the General Partner. Notwithstanding any delay in such
delivery, the Tendering Partner shall be deemed the owner of such OP Units for
all purposes, including without limitation, the right to consent, and receive
distributions, as of the Specified Exchange Date.
E. Notwithstanding anything herein to the contrary, with respect to any
Exchange pursuant to this Section 8.6:
(1) All Partnership Interests acquired by the General Partner
pursuant thereto shall automatically, and without further
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action required, be converted into and deemed to be General Partner Interests.
(2) Except as otherwise specifically provided, without the consent
of the General Partner, each Limited Partner may not effect an Exchange for less
than all of the Partnership Interests held by such Limited Partner.
(3) Each Tendering Partner shall continue to own all Partnership
Interests subject to any Exchange for OP Units, and be treated as a Limited
Partner with respect to such Partnership Interests for all purposes of this
Agreement, until the Specified Exchange Date. Until a Specified Exchange Date,
the Tendering Partner shall have no rights as a limited partner of the General
Partner with respect to such Tendering Partner's Partnership Interests.
F. Notwithstanding anything in this Section 8.6 to the contrary, but
subject to the limitations set forth in the following sentence, the General
Partner is hereby granted the right and option to acquire the Partnership
Interest of each of the Limited Partners in exchange for cash or, at the General
Partner's election, OP Units of the General Partner in accordance with the
valuation and other procedures set forth in Sections 8.6.C and 8.6.D. The
foregoing option shall not be exercisable with respect to the Partnership
Interest owned by the (i) Harrison Trust prior to the death of either Ed N.
Harrison or his spouse or (ii) the Glikbarg Trust prior to the death of either
A.S. Glikbarg or his spouse.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting. The General Partner shall keep or
cause to be kept at the principal office of the Partnership appropriate books
and records with respect to the Partnership's business, including without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 9.3 hereof. Any records maintained by or on behalf of the Partnership
in the regular course of its business may be kept on, or be in the form of,
punch cards, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time; the books of
the Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles.
Section 9.2 Fiscal Year. The fiscal year of the Partnership shall be
the calendar year.
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Section 9.3 Reports.
A. As soon as practicable, but in no event later than 105 days after
the close of each Partnership Year, or such earlier date as they are filed with
the Securities and Exchange Commission, the General Partner shall cause to be
mailed to each Limited Partner as of the close of the Partnership Year, an
annual report containing financial statements of the Partnership, or of the
Company if such statements are prepared solely on a consolidated basis with the
Company, for such Partnership Year, presented in accordance with generally
accepted accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the General
Partner.
B. As soon as practicable, but in no event later than 45 days after the
close of each calendar quarter (except the last calendar quarter of each year),
or such earlier date as they are filed with the Securities and Exchange
Commission, the General Partner shall cause to be mailed to each Limited Partner
as of the last day of the calendar quarter, a report containing unaudited
financial statements of the Partnership, or of the Company, if such statements
are prepared solely on a consolidated basis with the applicable law or
regulation, or as the General Partner determines to be appropriate.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns. The General Partner shall
arrange for the preparation and timely filing of all returns of Partnership
income, gains, deductions, losses and other items required of the Partnership
for federal and state income tax purposes and shall use all reasonable efforts
to furnish, within 90 days of the close of each taxable year, the tax
information reasonably required by Limited Partners for federal and state income
tax reporting purposes.
Section 10.2 Tax Elections. Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine whether to
make any available election pursuant to the Code, including the election under
Section 754 of the Code. The General Partner shall have the right to seek to
revoke any such election (including without limitation, any election under
Section 754 of the Code) upon the General Partner's determination in its sole
and absolute discretion that such revocation is the best interests of the
Partners. The Partners acknowledge, however, that prior to the Effective Date
the Partnership made an election under Section 754 of the Code.
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Section 10.3 Tax Matters Partner
A . The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. Pursuant to Section 6223 (c) of the
Code, upon receipt of notice from the IRS of the beginning of an administrative
proceeding with respect to the Partnership, the tax matters partner shall
furnish the IRS with the name, address and profit interest of each of the
Limited Partners and Assignees; provided, however, that such information is
provided to the Partnership by the Limited Partners and Assignees.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership items
required to be taken into account by a Partner for income tax purposes (such
administrative proceedings being referred to as a "tax audit" and such judicial
proceedings being referred to as "judicial review") , and in the settlement
agreement the tax matters partner may expressly state that such agreement shall
bind all Partners, except that such settlement agreement shall not bind any
Partner (i) who (within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner or (ii) who is a "notice partner" (as defined in Section
6231 of the Code) or a member of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(2) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the tax matters
partner, to seek judicial review of such final adjustment, including the filing
of a petition for readjustment with the Tax Court or the United States Claims
Court, or the filing of a complaint for refund with the District Court of the
United States for the district in which the Partnership's principal place of
business is located;
(3) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with the IRS
at any time and, if any part of such request is not allowed by the IRS, to file
an appropriate pleading (petition or complaint) for judicial review with respect
to such request;
(5) to enter into an agreement with the IRS to extend the period
for assessing any tax which is attributable to any item required to be taken
into account by a Partner for tax purposes, or an item affected by such item;
and
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(6) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.
Notwithstanding the foregoing, for tax years ending on or before
December 31, 1997 (except as to issues relating to the tax status of the
Partnership), the General Partner agrees to consult with A.S. Glikbarg and Ed N.
Harrison with respect to tax issues raised by the IRS and to reasonably consider
and to reasonably take into account the views expressed by such persons.
C. The tax matters partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax matters partner
in performing his duties as such (including legal and accounting fees) shall be
borne by the Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm to assist the tax matters partner
in discharging his duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.
D. While Arden Realty Limited Partnership is the tax matters
partner, it shall not agree to any settlement of any issues regarding the
Limited Partners' tax basis or deemed distributions to any Limited Partner under
Section 752 (b) without the consent (which may not be unreasonably conditioned
or withheld) of A.S. Glikbarg (or his spouse) and Ed N. Harrison (or his spouse)
provided that such consent shall not be required for such issues which relate to
the status of the Partnership as a partnership or the amount, character or
allocation of items of income or loss of the Partnership.
Section 10.4 Withholding. Each Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such Limited
Partner any amount of federal, state, local, or foreign taxes that the General
Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445 or
1446 of the Code. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner,
which loan shall be repaid by such Limited Partner within 15 days after notice
from
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the General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to the
Limited Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii)
shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner's Partnership Interest to secure
such Limited Partner's obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.4. In the event that a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.4
when due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal, plus two percentage points (but not
higher than the maximum lawful rate) from the date such amount is due (i.e., 15
days after demand) until such amount is paid in full. Each Limited Partner shall
take such actions as the Partnership or the General Partner shall request in
order to perfect or enforce the security interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which the
General Partner purports to assign its General Partner Interest to another
Person or by which a Limited Partner purports to assign its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift (outright or
in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise. The term "transfer" when used in this Article
11 does not include any Exchange for OP Units or cash pursuant to Section 8.6.
No part of the interest of a Limited Partner shall be subject to the claims of
any creditor, any spouse for alimony or support, or to legal process, and may
not be voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.
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B. No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article 11.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of General Partner's Partnership interest.
A. Except in connection with a transaction permitted under Section
7.3.E. or a "Termination Transaction" as defined in the partnership agreement of
the General Partner (including the transactions described under Section 11.2.C.
of such agreement), the General Partner shall not withdraw from the Partnership
without the consent of a Majority in Interest of the Limited Partners, which may
be given or withheld by each Limited Partner in its sole and absolute
discretion, and only upon the admission of a successor General Partner pursuant
to Section 12.1. Upon any transfer of a Partnership Interest in accordance with
the provisions of this Section 11.2, the transferee shall become a Substitute
General Partner for all purposes herein, and shall be vested with the powers and
rights of the transferor General Partner, and shall be liable for all
obligations and responsible for all duties of the General Partner, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired. It is a condition to any transfer otherwise permitted hereunder
that the transferee assumes, by operation of law or express agreement, all of
the obligations of the transferor General Partner under this Agreement with
respect to such transferred Partnership interest, and no such transfer (other
than pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor General Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor General Partner of
its obligations under this Agreement without the Consent of the Limited
Partners, in their reasonable discretion. In the event the General Partner
withdraws from the Partnership, in violation of this Agreement or otherwise, or
otherwise dissolves or terminates, or upon the Incapacity of the General
Partner, all of the remaining Partners may elect to continue the Partnership
business by selecting a Substitute General Partner in accordance with the Act.
In all events, the successor entity must be structured so as to permit the
Limited Partners' Exchange rights.
B. In connection with any transactions permitted by Section 11.2.3 or
Section 11.2.C of the Amended and Restated Agreement of Limited Partnership of
the General Partner dated October 9, 1996, which transaction is engaged in by
either the General Partner or the Company, the General Partner shall use
commercially reasonable efforts to structure such transaction to avoid causing
the Limited Partners to recognize gain for federal income tax purposes by
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virtue of the occurrence of or their participation in such transaction. The sole
remedy for a breach by the General Partner of this Section 11.2.B shall be a
claim for damages.
Section 11.3 Limited Partners' Rights to Transfer
A. Any Limited Partner may, at any time, without the consent of the
General Partner, (i) transfer all or any portion of its Partnership Interest to
the General Partner subject to the provisions of Section 11.6, (ii) transfer all
but not a portion of its Partnership Interest to an Affiliate, another original
Limited Partner or to an Immediate Family member, subject to the provisions of
Section 11.6, (iii) transfer all but not a portion of its Partnership Interest
to a trust for the benefit of a charitable beneficiary or to a charitable
foundation, subject to the provisions of Section 11.6, (iv) if it is an estate
or trust, subject to the provisions of Section 11.6 transfer its Partnership
Interest to the named beneficiary or beneficiaries, and (v) subject to the
provisions of Section 11.6, pledge (a "Pledge") all but not a portion of its
Partnership Interest to a lending institution, which is not an Affiliate of such
Limited Partner, as collateral or security for a bona fide loan or other
extension of credit, and transfer such pledged Partnership Interest to such
lending institution in connection with the exercise of remedies under such loan
or extension or credit, and the transfer of such pledged Partnership Interest by
the lender to any transferee. Each Limited Partner or Assignee (including
Limited Partners or Assignees resulting from a transfer made pursuant to clauses
(i) through (v) of the preceding sentence) shall have the right to transfer all
but not a portion of its Partnership Interest, subject to the provisions of
Section 11.6 and the satisfaction of each of the following conditions (in
addition to the right of each such Limited Partner or Assignee to continue to
make any such transfer permitted by clauses (i)-(v) of such preceding sentence
without satisfying either of the following conditions):
(a) General Partner Right of First Refusal. The transferring
Partner shall give written notice of the proposed transfer to the General
Partner, which notice shall state (i) the identity of the proposed transferee,
and (ii) the amount and type of consideration proposed to be received for the
transferred Partnership Interests. Except for transfers made pursuant to clauses
(i)-(v) in Section 11.3.A, the General Partner shall have ten (10) days upon
which to give the transferring Partner notice of its election to acquire the
Partnership Interests on the proposed terms. If it so elects, it shall purchase
the Partnership Interests on such terms within ten (10) days after giving notice
of such election. If it does not so elect, the transferring Partner may transfer
such Partnership Interests to a third party, on economic terms no more favorable
to the transferee than the proposed terms, subject to the other conditions of
this Section 11.3.
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(b) Qualified Transferee. Any transfer of a Partnership Interest
shall be made only to Qualified Transferees.
It is a condition to any transfer otherwise permitted hereunder that
the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such transferred Partnership Interest and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under
this Agreement without the approval of the General Partner, in its reasonable
discretion. Notwithstanding the foregoing, any transferee of any transferred
Partnership Interest shall be subject to any and all ownership limitations
contained in the Charter and the representations in Section 3.4.D. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take
subject to the obligations of the transferor hereunder. Unless admitted as a
Substitute Limited Partner, no transferee, whether by a voluntary transfer, by
operation of law or otherwise, shall have rights hereunder, other than the
rights of an Assignee as provided in Section 11.5.
B. If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator, or receiver of such
Limited Partner's estate or successor-in-interest shall have all the rights of a
Limited Partner, but not more rights than those enjoyed by other Limited
Partners, for the purpose of settling or managing the estate, and such power as
the Incapacitated Limited Partner possessed to transfer all or any part of his
or its interest in the Partnership. The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer otherwise permitted
under Section 11.3 by a Limited Partner of his or her Partnership Interests if,
in the opinion of legal counsel to the Partnership, such transfer would require
the filing of a registration statement under the Securities Act by the
Partnership or would otherwise violate any federal or state securities laws or
regulations applicable to the Partnership or the Partnership Interest.
D. No transfer by a Limited Partner of his or her Partnership Interests
(including any Exchange for OP Units pursuant to Section 8.6) may be made to any
person if (i) in the opinion of legal counsel for the Partnership, it would
result in the Partnership being treated as an association taxable as a
corporation, or (ii) such transfer is effectuated through an "established
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Section 7704 of the Code.
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E. No transfer of any Partnership Interests may be made to a lender to
the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General
Partner, in its sole and absolute discretion; provided that, as a condition to
such consent, the lender will be required to enter into an arrangement with the
Partnership and the General Partner to redeem or exchange for OP Units in which
a security interest is held simultaneously with the time at which such lender
would be deemed to be a partner in the Partnership for purposes of allocating
liabilities to such lender under Section 752 of the Code.
Section 11.4 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee
as a Limited Partner in his or her place (except as to any transferee permitted
by Section 11.3.A). The General Partner shall, however, have the right to
consent to the admission of a transferee of the interest of a Limited Partner
pursuant to this Section 11.4 as a Substituted Limited Partner, which consent
may be given or withheld by the General Partner in its sole and absolute
discretion. The General Partner's failure or refusal to permit a transferee of
any such interests to become a Substituted Limited Partner shall not give rise
to any cause of action against the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted Limited Partner
in accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement. The admission of any transferee as a Substituted Limited Partner
shall be subject to the transferee executing and delivering to the Partnership
an acceptance of all of the terms and conditions of this Agreement (including
without limitation, the provisions of Section 2.4 and such other documents or
instruments as may be required to effect the admission).
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Interests, and Percentage Interest of such Substituted Limited
Partner and to eliminate or adjust, if necessary, the name, address and interest
of the predecessor of such Substituted Limited Partner.
Section 11.5 Assignees. If the General Partner, in its sole and
absolute discretion, does not consent to the admission of any permitted
transferee under Section 11.3 as a Substituted Limited Partner, as described in
Section 11.4, such transferee shall be considered an Assignee for purposes of
this Agreement. An Assignee shall be entitled to all the rights of an assignee
of a limited partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net
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Losses, gain and loss attributable to the Partnership Interests assigned to such
transferee, the rights to transfer the Partnership Interests provided in this
Article 11, and the right of Exchange provided in Section 8.6, but shall not be
deemed to be a holder of Partnership Interests for any other purpose under this
Agreement, and shall not be entitled to effect a Consent with respect to such
Partnership Interests on any matter presented to the Limited Partners for
approval (such Consent remaining with the transferer Limited Partner). In the
event any such transferee desires to make a further assignment of any such
Partnership Interests, such transferee shall be subject to all the provisions of
this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Interests.
Section 11.6 General Provisions
A. No Limited Partner may withdraw from the Partnership other than as a
result of (i) a permitted transfer of all of such Limited Partner's Partnership
Interests in accordance with this Article 11 and the transferee(s) of such Units
being admitted to the Partnership as a Substituted Limited Partner or (ii)
pursuant to the exercise of its right of Exchange of all of such Limited
Partner's Partnership Interests under Section 8.6.
B. Any Limited Partner who shall transfer all of such Limited Partner's
Partnership Interests in a transfer permitted pursuant to this Article 11 where
such transferee was admitted as a Substituted Limited Partner or pursuant to the
exercise of its rights of Exchange of all of such Limited Partner's Partnership
Interests under Section 8.6 shall cease to be a Limited Partner.
C. Transfers pursuant to this Article 11 may only be made effective on
the first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.
D. If any Partnership Interest is transferred, assigned or redeemed
during any quarterly segment of the Partnership's fiscal year in compliance with
the provisions of this Article 11 or transferred pursuant to Section 8.6, on any
day other than the first day of a Partnership Year, then Net Income, Net Losses,
each item thereof and all other items attributable to such interest for such
fiscal year shall be divided and allocated between the transferor Partner and
the transferee Partner by taking into account their varying interests during the
fiscal year in accordance with Section 706(d) of the Code, using the interim
closing of the books method. Except as otherwise required by Section 706(d) of
the Code, solely for purposes of making such allocations, each of such items for
the calendar month in which the transfer, assignment or redemption occurs shall
be allocated to the Person who is a Partner as of midnight on the last day of
said month and none of such items for the calendar month in which an exchange
occurs will be allocated to the Tendering Partner. All distributions of
Available Cash with respect to which the Partnership Record Date is before
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the date of such transfer, assignment or exchange shall be made to the
transferor Partner, and all distributions of Available Cash thereafter, in the
case of a transfer or assignment other than a redemption, shall be made to the
transferee Partner. Notwithstanding the foregoing, the General Partner may adopt
such other conventions relating to allocations in connection with transfers,
assignments, redemptions or Exchanges as it determines are necessary or
appropriate so that, in the case of a distribution of Available Cash to either
the transferor Partner or the transferee Partner during the month in which such
transfer, assignment, redemption or Exchange occurred, there is a corresponding
allocation of income to the partner who received such distribution.
E. In addition to any other restrictions on transfer herein contained,
including without limitation the provisions of this Article 11 and Section 2.6,
in no event may any transfer or assignment of a Partnership Interest by any
Partner (including by way of a Exchange) be made (i) to any person or entity who
lacks the legal right, power or capacity to own a Partnership Interest; (ii) in
violation of applicable law; (iii) of any component portion of a Partnership
Interest, such as the Capital Account, or rights to distributions, separate and
apart from all other components of a Partnership Interest; (iv) if in the
opinion of legal counsel to the Partnership such transfer would cause a
termination of the Partnership for federal or state income tax purposes (except
as a result of the Exchange for OP Units or cash of all Partnership Interests
held by all Limited Partners or pursuant to a transaction expressly permitted
under Section 11.2); (v) if in the opinion of counsel to the Partnership such
transfer would cause the Partnership to cease to be classified as a partnership
for federal income tax purposes (except as a result of the Exchange for OP Units
or cash of all Partnership Interests held by all Limited Partners); (vi) if such
transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a "party-in-interest" (as defined in
Section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to
the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.2-101; (viii) if such transfer requires the
registration of such Partnership Interest pursuant to any applicable federal or
state securities laws; (ix) if such transfer is effectuated through an
"established securities market" or a "secondary market" (or the substantial
equivalent thereof) within the meaning of Section 7704 of the Code or such
transfer causes the Partnership to become a "Publicly Traded Partnership," as
such term is defined in Sections 469(k)(2) or 7704(b) of the Code; (x) if such
transfer subjects the Partnership to be regulated under the Investment Company
Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement
Income Security Act of 1974, each as amended; (xi) if the transferee or assignee
of such Partnership Interest is unable
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to make the representations set forth in Section 3.4.D. or such transfer could
otherwise adversely affect the ability of the Company to remain qualified as a
REIT; or (xii) if in the opinion of legal counsel for the Partnership such
transfer would adversely affect the ability of the Company to continue to
qualify as a REIT or subject the Company to any additional taxes under Section
857 or Section 4981 of the Code.
F. The General Partner shall monitor the transfers of interests in the
Partnership to determine (i) if such interests are being traded on an
"established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code, and (ii)
whether additional transfers of interests would result in the Partnership being
unable to qualify for at least one of the "safe harbors" set forth in
Regulations Section 1.7704-1 (or such other guidance subsequently published by
the IRS setting forth safe harbors under which interests will not be treated as
"readily tradable on a secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code) (the "Safe Harbors"). The
General Partner shall take all steps reasonably necessary or appropriate to
prevent any trading of interests or any recognition by the Partnership of
transfers made on such markets and, except as otherwise provided herein, to
insure that at least one of the Safe Harbors is met.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner. A successor to all
of the General Partner's General Partner Interest pursuant to Section 11.2
hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective upon such
transfer. Any such transferee shall carry on the business of the Partnership
without dissolution. In each case, the admission shall be subject to the
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission. In the case
of such admission on any day other than the first day of a Partnership Year, all
items attributable to the General Partner Interest for such Partnership Year
shall be allocated between the transferring General Partner and such successor
as provided in Article 11 hereof.
Section 12.2 Admission of Additional Limited Partners
A. After the admission to the Partnership of the initial Limited
Partners on the Effective Date hereof, a Person who makes a Capital Contribution
to the Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i)
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evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including, without limitation, the power
of attorney granted in Section 2.4 hereof and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order
to effect such Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the receipt of the Capital Contribution in respect of such Limited
Partner and the consent of the General Partner to such admission. If any
Additional Limited Partner is admitted to the Partnership on any day other than
the first day of a Partnership Year, then Net Income, Net Losses, each item
thereof and all other items allocable among Partners and Assignees for such
Partnership Year shall be allocated among such Limited Partner and all other
Partners and Assignees by taking into account their varying interests during the
Partnership Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which an admission of
an Additional Limited Partner occurs shall be allocated among all the Partners
and Assignees including such Additional Limited Partner. All distributions of
Available Cash with respect to which the Partnership Record Date is before the
date of such admission shall be made solely to Partners and Assignees other than
the Additional Limited Partner (other than in its capacity as an Assignee) and,
except as otherwise agreed to by the Additional Limited Partners and the General
Partner, all distributions of Available Cash thereafter shall be made to all
Partners and Assignees including such Additional Limited Partner.
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership. For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
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ARTICLE 13
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner (selected as described in Section 13.1.B below) shall continue
the business of the Partnership. The Partnership shall dissolve, and its affairs
shall be wound up, upon the first to occur of any of the following ("Liquidating
Events"):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal of the General Partner, as defined in the
Act, unless, within 90 days after the withdrawal, a Majority of the Remaining
Partners agree in writing, in their sole and absolute discretion, to continue
the business of the Partnership and to the appointment, effective as of the date
of withdrawal, of a substitute General Partner;
C. subject to compliance with Section 7.3.E(2) an election to dissolve
the Partnership made by the General Partner, in its sole and absolute
discretion,
D. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
E. the sale of all or substantially all of the assets and properties of
the Partnership for cash or marketable securities;
F. the Incapacity of the General Partner, unless all of the remaining
Partners in their sole and absolute discretion agree in writing to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such Incapacity, of a substitute General Partner; or
G. the Exchange for OP Units of all Partnership Interests (other than
those of the General Partner).
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's business and affairs.
The General Partner (or, in the event there is no remaining General Partner, any
Person elected by a Majority in Interest of the Limited Partners (the
"Liquidator")) shall be
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responsible for overseeing the winding up and dissolution of the Partnership and
shall take full account of the Partnership's liabilities and property and the
Partnership property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof, and the proceeds therefrom (which may, to the
extent determined by the General Partner, include shares of stock in the General
Partner) shall be applied and distributed in the following order:
(1) First, to the payment and discharge of all of the Partnership's
debts and liabilities to creditors other than the Partners;
(2) Second, to the payment and discharge of all of the Partnership's
debts and liabilities to the Partners;
(3) The balance, if any, to the General Partner and Limited Partners in
accordance with their positive Capital Account balances, determined after taking
into account all Capital Account adjustments for the Partnership taxable year
during which the liquidation occurs (other than those made as a result of the
liquidating distribution set forth in this Section 13.2.A(4)).
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13 other than reimbursement of its
expenses as provided in Section 7.4.
B. Notwithstanding the provisions of Section 13.2.A hereof which
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
Section 13.3 Compliance with Timing Requirements of Regulations. In the
event the Partnership is "liquidated" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions
61.
<PAGE> 103
shall be made pursuant to this Article 13 to the General Partner and Limited
Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in
his or her Capital Account (after giving effect to all contributions,
distributions and allocations for the taxable years, including the year during
which such liquidation occurs), such Partner shall have no obligation to make
any contribution to the capital of the Partnership with respect to such deficit,
and such deficit shall not be considered a debt owed to the Partnership or to
any other Person for any purpose whatsoever. In the discretion of the General
Partner, a pro rata portion of the distributions that would otherwise be made to
the General Partner and Limited Partners pursuant to this Article 13 may be:
A. distributed to a trust established for the benefit of the General
Partner and Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership. The assets of any
such trust shall be distributed to the General Partner and Limited Partners from
time to time, in the reasonable discretion of the General Partner, in the same
proportions and the amount distributed to such trust by the Partnership would
otherwise have been distributed to the General Partner and Limited Partners
pursuant to this Agreement; or
B. withheld to provide a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the unrealized portion of any
installment obligations owed to the Partnership, provided that such withheld
amounts shall be distributed to the General Partner and Limited Partners as soon
as practicable.
Section 13.4 Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article 13, in the event the Partnership is
liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)
but no Liquidating Event has occurred, the Partnership's property shall not be
liquidated, the Partnership's liabilities shall not be paid or discharged, and
the Partnership's affairs shall not be wound up. Instead, the Partnership shall
be deemed to have distributed the Partnership property in kind to the General
Partner and Limited Partners, who shall be deemed to have assumed and taken such
property subject to all Partnership liabilities, all in accordance with their
respective Capital Accounts. Immediately thereafter, the General Partner and
Limited Partners shall be deemed to have recontributed the Partnership property
in kind to the Partnership, which shall be deemed to have assumed and taken such
property subject to all such liabilities.
Section 13.5 Rights of Limited Partners. Except as otherwise provided
in this Agreement, each Limited Partner shall look
62.
<PAGE> 104
solely to the assets of the Partnership for the return of his Capital
Contribution and shall have no right or power to demand or receive property from
the General Partner. No Limited Partner shall have priority over any other
Limited Partner as to the return of his Capital Contributions, distributions or
allocations.
Section 13.6 Notice of Dissolution. In the event a Liquidating Event
occurs or an event occurs that would, but for provisions of Section 13.1, result
in a dissolution of the Partnership, the General Partner shall, within 30 days
thereafter, provide written notice thereof to each of the Partners and to all
other parties with whom the Partnership regularly conducts business (as
determined in the discretion of the General Partner) and shall publish notice
thereof in a newspaper of general circulation in each place in which the
Partnership regularly conducts business (as determined in the discretion of the
General Partner).
Section 13.7 Cancellation of Certificate of Limited Partnership. Upon
the completion of the liquidation of the Partnership cash and property as
provided in Section 13.2 hereof, the Partnership shall be terminated and the
Certificate shall be cancelled and such other actions as may be necessary to
terminate the Partnership shall be taken.
Section 13.8 Reasonable Time for Winding Up. A reasonable time shall be
allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.
Section 13.9 Waiver of Partition. Each Partner hereby waives any right
to partition of the Partnership property.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
Section 14.1 Amendments
A. The actions requiring consent or approval of Limited Partners
pursuant to this Agreement, including Section 7.3, or otherwise pursuant to
applicable law, are subject to the procedures in this Article 14.
B. Amendments to this Agreement may be proposed by the
General Partner or by any Limited Partner. Following such proposal, the General
Partner shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written consent of the Limited Partners on the proposed
amendment or shall call a meeting to vote thereon and to transact any other
business that it may deem appropriate. For purposes of obtaining
63.
<PAGE> 105
a written consent, the General Partner may require a response within a
reasonable specified time, but not less than 15 days, and failure to respond in
such time period shall constitute a consent which is consistent with the General
Partner's recommendation (if so recommended) with respect to the proposal;
provided, that, an action shall become effective at such time as requisite
consents are received even if prior to such specified time.
Section 14.2 Action by the Partners
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners holding 25 percent or more of the Partnership Interests held by
Limited Partners. The call shall state the nature of the business to be
transacted. Notice of any such meeting shall be given to all Partners not less
than seven days nor more than 30 days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Whenever the vote or
Consent of the Limited Partners or of the Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of Partners
or may be given in accordance with the procedure prescribed in Section 14.1
hereof.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by the percentage as is expressly required by this
Agreement for the action in question. Such consent may be in one instrument or
in several instruments, and shall have the same force and effect as a vote of
the Percentage Interests of the Partners (expressly required by this Agreement).
Such consent shall be filed with the General Partner. An action so taken shall
be deemed to have been taken at a meeting held on the effective date so
certified.
C. Each Limited Partner may authorize any Person or Persons to act for
him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Limited Partner executing it.
D. Each meeting of Partners shall be conducted by the General Partner
or such other Person as the General Partner may appoint pursuant to such rules
for the conduct of the meeting as the General Partner or such other Person deems
appropriate.
E. Nothwithstanding the foregoing, Sections 4.3.D, 6.4.B and 7.3.E
shall automatically be deleted from this Agreement, and shall have no further
force or effect, upon both (i) the first to occur of the transfer by the
Glikbarg Trust of its Partnership Interest, the death of either A.S. Glikbarg or
his spouse, or the prior
64.
<PAGE> 106
written consent of the Glikbarg Trust; and (ii) the first to occur of the
transfer by the Harrison Trust of its Partnership Interest, the death of either
Ed N. Harrison or his spouse, or the prior written consent of the Harrison
Trust.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice. Any notice, demand, request or
report required or permitted to be given or made to a Partner or Assignee under
this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by first class United States mail or by other
means of written communication to the Partner or Assignee at the address set
forth in Exhibit A or such other address as the Partners shall notify the
General Partner in writing.
Section 15.2 Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the scope
or intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may require,
any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Section 15.6 Creditors. Other than as expressly set forth herein with
respect to Indemnitees, none of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon any breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
65.
<PAGE> 107
Section 15.8 Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterparts Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.
Section 15.9 Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of California, without
regard to the principles of conflicts of law.
Section 15.10 Invalidly of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
Section 15.11 Entire Agreement. This Agreement and the Contribution
Agreement and any other written agreements executed pursuant thereto and
simultaneously therewith contain the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersede any other
prior written or oral understandings or agreements among them with respect
thereto.
Section 15.12 No Rights as Partners of the General Partners. Nothing
contained in this Agreement shall be construed as conferring upon the holders of
Partnership Interests any rights whatsoever as partners of the General Partner,
including without limitation any right to receive distributions made to partners
of the General Partner or to vote or to consent or to receive notice as Partners
in respect of any meeting of partners for the election of one or more general
partners of the General Partner or any other matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
"GENERAL PARTNER" ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By:___________________________________
Name:
Title:
66.
<PAGE> 108
LIMITED PARTNERS:
____________________________________ ___________________________________
Ed N. Harrison, Trustee of the Ed A.S. Glikbarg, Trustee of the A.S.
N. Harrison Separate Property Trust Glikbarg Family Trust created by
created by Declaration of Trust Declaration of Trust dated 9/16/87
dated 8/18/87
____________________________________ ___________________________________
Thomas S. Harrison, IV ___________________________________,
Executor of the Estate of
Ruth Harrison Matthes
____________________________________ ___________________________________
Elisa Wiley Harrison Johnny Ruth Harrison
___________________________________
Christina Oien
67.
<PAGE> 109
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND PARTNERSHIP INTEREST
<TABLE>
<CAPTION>
Amount of Interest
Due on Notes
Agreed Value Receivable Contributed
Cash of Owned (N) or Additional Capital Partnership
Contributions Property Cash Contributed (C) Account Interest
------------- -------- -------------------- ------- --------
<S> <C> <C> <C> <C> <C>
General Partner
Arden Realty Limited Partnership $28,762,500* $0 $28,762,500 97.50%
Limited Partners
Ed N. Harrison. Trustee 54,310 $203,713 (N) 258,023 0.87488%
254 Tigertail Road
Los Angeles, CA 90049
A.S. Glikbarg, Trustee 10,345 150,118 (C) 160,463 0.5438%
375 Fordyce Road
Los Angeles, CA
Thomas S. Harrison, IV 11,782 0 11,782 0.04006%
[Address]
Estate of 11,782 0 11,782 0.04006%
Ruth Harrison Matthes**
44 Golf Cottage Drive,
Wyndemere
Naples, Florida 33999
Christina Oien 0 3,730 (N) 3,730 0.01264%
[Address]
Elisa Wiley Harrison 5,891 193,822 (N) 199,713 0.67674%
[Address]
Johnny Ruth Harrison 5,891 86,118 (N) 92,008 0.3118%
[Address]
TOTALS $28,762,500 $100,000 $637,500 $29,500,000 100.00%
</TABLE>
* Less the outstanding principal balance of the Prudential Loan.
** Assignee only, not a limited partner.
A-1
<PAGE> 110
EXHIBIT B
NOTICE OF EXCHANGE
The undersigned hereby [irrevocably] (i) transfers __________ Limited
Partnership Interests in Westwood Center, a California Limited Partnership in
accordance with the terms of the Amended and Restated Agreement of Limited
Partnership of Westwood Center, a California Limited Partnership dated August
__, 1997 and the rights of Exchange referred to therein, (ii) surrenders such
Limited Partnership Interests and all right, title and interest therein, and
(iii) directs that the OP Units or cash deliverable upon Exchange be delivered
to the address specified below, and be registered or placed in the name(s) and
at the address(es) specified below.
Dated:___________________
Name of Limited Partner: ________________________________
(Signature of Limited Partner)
________________________________
(Street Address)
________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
________________________________
Issue OP Units to:
Please insert social security or identifying number:
Name:________________________________
ID #:________________________________
B-1
<PAGE> 111
EXHIBIT C
CONSTRUCTIVE OWNERSHIP DEFINITION
The term "Constructively Owns" means ownership determined through the
application of the constructive ownership rules of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. Generally, these rules provide the
following:
a. an individual is considered as owning the Ownership Interest that is
owned, actually or constructively, by or for his spouse, his children, his
grandchildren, and his parents;
b. an Ownership Interest that is owned, actually or constructively, by
or for a partnership or estate is considered as owned proportionately by its
partners or beneficiaries;
C. an ownership Interest that is owned, actually or constructively, by
or for a trust is considered as owned by its beneficiaries in proportion to the
actuarial interest of such beneficiaries (provided, however, that in the case of
a "grantor trust" the Ownership Interest will be considered as owned by the
grantors);
d. if 10 percent or more in value of the stock in a corporation is
owned, actually or constructively, by or for any person, such person shall be
considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such corporation in that proportion which the value of
the stock which such person so owns bears to the value of all the stock in such
corporation;
e. an Ownership Interest that is owned, actually or constructively, by
or for a partner of a partnership or a beneficiary of an estate or trust shall
be considered as owned by the partnership, estate, or trust (or, in the case of
a grantor trust, the grantors);
f. if 10 percent or more in value of the stock in a corporation is
owned, actually or constructively, by or for any person, such corporation shall
be considered as owning the Ownership Interest that is owned, actually or
constructively, by or for such person;
g. if any person has an option to acquire an Ownership Interest
(including an option to acquire an option or any one of a series of such
options), such Ownership Interest shall be considered as owned by such person;
h. an Ownership Interest that is constructively owned by a person by
reason of the application of the rules described in paragraphs (a) through (g)
above shall, for purposes of applying paragraphs (a) through (g), be considered
as actually owned by such person provided, however, that (i) an Ownership
Interest constructively owned by an individual by reason of paragraph (a) shall
not be considered as owned by him for purposes of again applying paragraph (a)
in order to make another the constructive owner of such Ownership Interest, (h)
an Ownership Interest
C-1
<PAGE> 112
constructively owned by a partnership, estate, trust, or corporation by reason
of the application of paragraphs (e) or (f) shall not be considered as owned by
it for purposes of applying paragraphs (b), (c), or (d) in order to make another
the constructive owner of such Ownership Interest, (iii) if an Ownership
Interest may be considered as owned by an individual under paragraphs (a) or
(g), it shall be considered as owned by him under paragraph (g), and (iv) for
purposes of the above described rules, an S corporation shall be treated as a
partnership and any stockholder of the S corporation shall be treated as a
partner of such partnership except that this rule shall not apply for purposes
of determining whether stock in the S corporation is constructively owned by any
person.
i. For purposes of the above summary of the constructive ownership
rules, the term "Ownership Interest" means the ownership of stock with respect
to a corporation and, with respect to any other type of entity, the ownership of
an interest in either its assets or net profits.
C-2
<PAGE> 113
EXHIBIT D
FORM OF PARTNERSHIP CERTIFICATE
CERTIFICATE FOR PARTNERSHIP INTERESTS OF
WESTWOOD CENTER
No._______________ _______________ UNITS
Arden Realty Limited Partnership, as the General Partner of Westwood
Center, a California Limited Partnership (the "Partnership"), hereby certifies
that _____________________ is a Limited Partner of the Partnership whose
Partnership Interests therein, as set forth in the Amended and Restated
Agreement of Limited Partnership of Westwood Center dated August ___, 1997 (the
"Partnership Agreement"), under which the Partnership is existing and as filed
in the office of the California Secretary of State (copies of which are on file
at the Partnership's principal office at 9100 Wilshire Boulevard, East Tower,
Suite 700, Beverly Hills, California 90212, represent _______ units of limited
partnership interest in the Partnership.
THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE
TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION COMPLIES WITH THE PROVISIONS OF THE AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP DATED AS OF JULY ___, 1997 AS IT MAY BE AMENDED FROM TIME
TO TIME (A COPY OF WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE
PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR (B) IF THE PARTNERSHIP HAS BEEN
FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN
EFFECT THEREUNDER.
DATED:________________, 1997
WESTWOOD CENTER,
a California Limited Partnership
By: Arden Realty Limited Partnership
a Maryland limited partnership
Its General Partner
By: Arden Realty, Inc.
a California Limited Partnership
Its General Partner
By:_______________________________
Name:
Title:
ATTEST:
By:_______________________________
Name:
Title:
D-1
<PAGE> 114
EXHIBIT E
SCHEDULE OF PARTNERS' OWNERSHIP
WITH RESPECT TO TENANTS
E-1
<PAGE> 115
EXHIBIT F
SCHEDULE OF SHARES OF CAPITAL STOCK OF ARDEN REALTY, INC.,
ACTUALLY OR CONSTRUCTIVELY OWNED BY LIMITED PARTNERS
F-1
<PAGE> 116
EXHIBIT D
SCHEDULE OF TENANCIES AND OCCUPANCIES
<PAGE> 117
?????? MANAGER Rent Roll Page: 1
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
0701 VACANT 0.00 1057 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0705 SUHL, RENAN 1,096.80 457 28.80/yr 6/01/97 5/31/98 1,651.20
2.40/mth
0707 VACANT 0.00 1385 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
0709 VACANT 0.00 606 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0710 VACANT 0.00 2780 0.00/yr 0.00
0.00/mth
0711 UCLA - JONSSON CANCER CENTER 11,620.00 5754 24.23/yr 7/15/87 10/31/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
2.02/mth
0716 EXECUTIVE PARKING INDUSTRIES 1,855.00 1855 12.00/yr 3/01/97 2/28/02 1,855.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0760 UCLA - JONSSON CANCER CENTER 8,746.00 4373 24.00/yr 12/15/89 10/31/10 0.00
2.00/mth
0762 EXECUTIVE PARKING INDUSTRIES 3,554.00 3554 12.00/yr 5/01/97 2/28/02 0.00
- ----------------------------------------------------------------------------------------------------------------------
1.00/mth
0763 U.C.L.A. DRUG RESEARCH CENTER 18,975.30 9987 22.80/yr 12/01/94 12/31/97 0.00
1.90/mth
- ----------------------------------------------------------------------------------------------------------------------
0767 EXECUTIVE PARKING INDUSTRIES 1,891.00 1891 12.00/yr 3/01/97 2/28/02 0.00
1.00/mth
0800 SINGER, JULIAN D.D.S. 1,032.00 860 14.40/yr 10/01/96 9/30/97 2,064.00
- ----------------------------------------------------------------------------------------------------------------------
1.20/mth
0801 SMITH-MARDER & DICK 1,320.00 550 28.80/yr 6/01/95 5/31/98 1,449.00
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
0805 WISH, ALAN J. 860.00 699 14.76/yr 5/01/95 4/30/98 860.00
1.23/mth
0806 CHEN, ADAM, D.D.S. 1,238.40 516 28.80/yr 9/01/92 8/31/10 1,238.00
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
0809 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0811 DeGOLIA, VAN DYKE, M.D. 1,238.40 516 28.80/yr 10/01/96 9/30/99 1,238.90
2.40/mth
0815 MCBRIDE AND SOBELMAN 2,064.00 860 28.80/yr 2/01/94 1/31/99 2,064.00
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
0818 VACANT 0.00 2064 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0819 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
0821 KYUNG SIK YU AND KYE AE YU 2,750.00 1375 24.00/yr 12/01/96 11/30/01 3,300.00
- ----------------------------------------------------------------------------------------------------------------------
2.00/mth
0832 CASELLINI, RENZO C. 3,492.00 1455 28.80/yr 6/01/93 5/31/00 3,718.56
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 118
?????? MANAGER Rent Roll Page: 2
Property: WESTWOOD CENTER
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
0835 VACANT 0.00 1325 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0837 VACANT 0.00 1902 0.00/yr 0.00
0.00/mth 0.00
0842 CASELLINI/R dba SWISS QUALITY 24.00/yr 6/01/96 6/30/00 480.00
- --------------------------------------------------------------------------------------------------------------------
2.00/mth
0844 VACANT 0.00 198 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0846 VACANT 0.00 250 0.00/yr 0.00
0.00/mth
0847 VACANT 0.00 619 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
0850 VACANT 0.00 1125 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0851 VACANT 0.00 1662 0.00/yr 0.00
0.00/mth
0900 VACANT 1,574.00 656 28.80/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
0901 VACANT 0.00 2063 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0906 RIVIN, ADRIEN SURVOL & MARK 1,651.20 688 28.80/yr 9/01/95 8/30/98 1,651.20
2.40/mth
0908 VACANT 0.00 688 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
0913 SEXSMITH, DONNA Ph.D. 825.60 344 28.80/yr 5/01/97 4/30/98 825.60
2.40/mth
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
0918 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0919 VACANT 0.00 1031 0.00/yr 0.00
0.00/mth
0921 MARMOR, JUDD M.D. 1,651.20 688 14.40/yr 10/01/96 9/30/97 1,651.20
- --------------------------------------------------------------------------------------------------------------------
1.20/mth
0927 VACANT 0.00 1031 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
0931 TRAGORRI/OSCAR DBA ORTHO LABS 825.60 344 28.00/yr 9/01/97 8/31/02 825.60
2.40/mth
0932 VACANT 0.00 688 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
0933 VACANT 0.00 313 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 119
RESIDENT MANAGER Rent Roll Page: 3
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
0935 VACANT 0.00 516 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0938 BAERWALD, D. & BACH, R., Ph.D. 1,651.20 688 28.80/yr 2/01/97 1/31/98 1,651.20
2.40/mth
0939 GOLDBERG, HERB Ph.D. 1,238.40 516 28.80/yr 12/01/96 11/30/97 0.00
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
0941 VAN DAM, HEIMAN, M.D. 825.60 344 28.80/yr 10/01/96 9/30/97 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
0942 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
0943 VACANT 0.00 344 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
0945 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
0950 RUBENSTEIN/LIDIA, M.D. 4,951.20 2063 28.80/yr 11/01/94 10/31/97 4,951.20
2.40/mth
0955 VACANT 0.00 1224 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1000 UCLA MEDICAL GROUP SERVICES 100.00 3424 0.35/yr 11/01/91 11/30/10 0.00
0.03/mth
- ----------------------------------------------------------------------------------------------------------------------
1000B VACANT 0.00 4828 0.00/yr 0.00
0.00/mth
1025 VACANT 0.00 1374 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1050 VACANT 0.00 8252 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1100 CALIFORNIA GRADUATE INSTITUTE 23,568.60 14284 19.80/yr 6/01/93 5/31/98 26,425.40
1.65/mth
1150 VACANT 0.00 2063 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1155 VACANT 0.00 1297 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1200 VACANT 0.00 1342 0.00/yr 0.00
0.00/mth
1201 VACANT 0.00 590 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1205 ROSENSTEIN, WENDY M.D. 825.60 344 28.80/yr 07/01/97 6/30/98 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1207 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1210 BRICKMAN, HARRY, M.D. 1,238.40 516 28.80/yr 3/01/94 2/28/99 1,238.40
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1212 VACANT 0.00 516 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 120
?????? MANAGER Rent Roll Page: 4
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1213 VACANT 0.00 805 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1214 JOSEPHSON, SUSAN M.D.A. 1,238.40 516 28.80/yr 12/01/94 11/30/99 1,238.40
2.40/mth
1215 VACANT 0.00 516 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1216 VACANT 0.00 516 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1223 VACANT 0.00 2064 0.00/yr 0.00
0.00/mth
1231 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1232 VACANT 0.00 1376 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1235 VACANT 0.00 1783 0.00/yr 0.00
0.00/mth
1250 VACANT 0.00 5234 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1400 WESTWOOD CENTER BLDG. OFFICE 0.00 4238 0.00/yr 01/01/66 12/31/10 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1411 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1414 STEINBERG, SARA, M.D. 825.60 344 28.80/yr 09/01/96 08/31/10 825.60
LEASE OUT FOR SIGNATURE 1 YEAR
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1416 FRANKLIN, CARRIE, A. 825..60 344 28.80/yr 07/01/97 06/30/98 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1417 VACANT 0.00 714 0.00/yr 0.00
0.00/mth
1418 UCLA MEDICAL CENTER 688.00 344 24.00/yr 11/01/95 10/31/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
2.00/mth
1421 VACANT 0.00 662 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1427 VACANT 0.00 1433 0.00/yr 0.00
0.00/mth
1431 PRAKEL, SUZANNE 1,099.20 458 28.80/yr 04/01/97 03/31/00 1,099.20
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1432 SILVERMAN, DIANE, MFCC 825.60 344 28.80/yr 09/01/92 08/31/10 825.60
LEASE OUT FOR SIGNATURE 3 YEARS 2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1434 ADELMAN, JOEL, L.C.S.W. 1,238.40 516 28.80/yr 08/01/95 7/31/00 1,238.40
2.40/mth
1435 FREEDMAN, RINA 1,238.40 516 28.80/yr 01/01/96 12/31/01 1,238.40
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1436 HELLER, JACQUELINE, M.D. 1,238.40 516 28.80/yr 11/01/94 10/31/99 1,238.40
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 121
RESIDENT MANAGER Rent Roll Page: 5
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1137 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1441 NOBLER, HINDY, Ph.D. 825.60 344 28.80/yr 5/01/96 4/30/99 825.60
2.40/mth
1442 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1443 SCHICK, GERALDINE, M.S.W. 825.60 344 28.80/yr 7/01/97 6/30/98 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1444 BRACE, SUSAN Ph.D. 768.00 320 28.80/yr 10/01/95 9/30/98 768.00
2.40/mth
1445 TUGENDHAFT, EMILY M.S.W. 825.60 344 28.80/yr 7/01/97 6/30/98 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1446 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1447 OPTIMIZATION SOFTWARE 825.60 344 28.80/yr 2/01/95 1/31/98 825.60
2.40/mth
1448 VACANT 0.00 344 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1449 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1450 ANDREWS, LOIS; REINITZ, JAMES Ph.D. 2,474.40 1031 28.80/yr 10/01/95 9/30/97 2,474.40
2.40/mth
1451 MORTON, VICTOR, Ph.D. 825.60 344 28.80/yr 6/01/95 5/31/98 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1455 ROMANOFF, RICHARD, Ph.D. 1,444.80 602 28.80/yr 3/01/95 2/28/98 1,444.80
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1500 VACANT 0.00 654 0.00/yr 0.00
0.00/mth
1501 VACANT 0.00 2203 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1504 PAPPAS, CHERYL Ph.D. 825.60 344 28.80/yr 11/01/96 10/31/97 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1506 MINTON, DANIEL C., M.D. 825.60 344 28.80/yr 4/01/97 3/31/00 825.60
2.40/mth
1510 GELLMAN & GREENWALD 1,651.20 688 28.80/yr 6/01/96 5/31/99 1,651.20
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1512 THOMPSON & COTLOVE 2,064.00 860 28.80/yr 9/01/95 8/31/98 2,064.00
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1515 KELLY, ANN MARIE, Ph.D. 825.60 344 28.80/yr 2/01/97 1/31/98 825.60
2.40/mth
1517 SONES AND HOFFMAN 825.60 344 28.80/yr 6/01/96 5/31/99 857.20
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1518 VACANT 0.00 516 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 122
?????? MANAGER Rent Roll Page: 6
Property: WESTWOOD CENTER
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1521 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ---------------------------------------------------------------------------------------------------------------------
1523 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
1527 LANSKY, MELVIN R., M.D. 825.60 344 28.80/yr 9/01/96 8/31/01 825.60
- ---------------------------------------------------------------------------------------------------------------------
2.40/mth
1529 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ---------------------------------------------------------------------------------------------------------------------
1531 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1532 THOMPSON, BONNIE, M.A., MFCC 825.60 344 28.80/yr 2/01/97 1/31/98 825.60
- ---------------------------------------------------------------------------------------------------------------------
2.40/mth
1534 AUERBACH, MARTY 741.60 309 28.80/yr 2/01/97 1/31/98 741.30
2.40/mth
- ---------------------------------------------------------------------------------------------------------------------
1536 VENTURA, SHELLEY, M.S.W., Ph.D. 825.60 344 28.80/yr 3/01/96 2/28/98 860.00
2.40/mth
1537 LAFFERTY, WHELAN and RAHBAR 2,474.70 1031 28.80/yr 1/01/97 12/31/97 2,474.10
- ---------------------------------------------------------------------------------------------------------------------
2.40/mth
1538 GITLIN, MICHAEL J., M.D. 825.60 344 28.80/yr 3/01/96 2/28/98 825.60
2.40/mth
- ---------------------------------------------------------------------------------------------------------------------
1539 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1543 BEEBEE, MARTIN, MORENO, COFFEY 1,651.20 688 28.80/yr 9/01/97 8/31/98 1,651.20
- ---------------------------------------------------------------------------------------------------------------------
2.40/mth
1544 VACANT 1031 24.00/yr 0.00
2.00/mth
- ---------------------------------------------------------------------------------------------------------------------
1545 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1547 GREENBERG, WALTER P., Ph.D. 860.00 344 30.00/yr 2/01/94 7/31/10 860.00
- ---------------------------------------------------------------------------------------------------------------------
2.50/mth
1548 UCLA - HINES RESEARCH 1,903.80 1002 22.80/yr 8/01/96 7/31/99 0.00
1.90/mth
- ---------------------------------------------------------------------------------------------------------------------
1550 VACANT 0.00 645 0.00/yr 0.00
0.00/mth
1555 VACANT 0.00 1308 0.00/yr 2,290.87
- ---------------------------------------------------------------------------------------------------------------------
0.00/mth
1600 ANDERSONN, KAUSS, & HUGHES 2,299.20 958 28.80/yr 7/01/97 5/31/00 2,299.20
0.00/mth
- ---------------------------------------------------------------------------------------------------------------------
1601 TARLOW, GERALD Ph.D. 1,416.00 590 28.80/yr 3/01/96 2/28/99 1,416.00
2.40/mth
1605 VACANT 0.00 688 0.00/yr 0.00
- ---------------------------------------------------------------------------------------------------------------------
0.00/mth
1606 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 123
???? MANAGER Rent Roll Page: 7
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1610 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1611 DARKE, LAURA & EISENBERG, LAURIE 1,651.20 688 28.80/yr 7/01/95 6/30/98 1,699.20
2.40/mth
1613 VACANT 0.00 344 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1614 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1615 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1616 SALK, JONATHAN, M.D. 860.00 344 30.00/yr 8/01/91 1/31/10 860.00
- ----------------------------------------------------------------------------------------------------------------------
2.50/mth
1617 DAFTER, ROGER, Ph.D. 777.60 324 28.80/yr 7/01/96 6/30/99 810.00
7.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1618 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
1619 VACANT 0.00 344 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1621 SILVERTON, LEIGH, Ph.D. 825.60 344 28.80/yr 10/01/96 10/31/10 0.00
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1623 SAUNDERS, ANITA, Ph.D. 825.60 344 28.80/yr 4/01/96 3/31/99 825.60
2.40/mth
1625 UCLA -- DR. PASNAU & DR. STOSSEL 1,892.00 860 26.40/yr 9/01/90 8/31/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
2.20/mth
1629 RICKLES, W. H. MD 1,320.00 550 28.80/yr 6/01/97 5/31/00 1,320.00
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1632 CHERMAN, STEVEN B., L.C.S.W. 825.60 344 28.80/yr 4/01/97 3/31/98 825.60
2.40/mth
1633 HARY, ELAINE, Ph.D. 825.60 344 28.80/yr 6/01/96 5/31/98 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1634 DONOVAN, KAREN & TOLMAS, PHYLLIS 860.00 344 30.00/yr 2/01/95 1/31/10 825.60
2.50/mth
- ----------------------------------------------------------------------------------------------------------------------
1636 BENDER, DAVID, M.D. 1,238.40 344 28.80/yr 7/01/95 6/30/98 1,238.40
2.40/mth
1637 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1639 VAN DAM, MACHIEL, LCSW 825.60 344 28.80/yr 9/01/97 8/31/98 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1640 CARUTH, ELAINE, G., Ph.D. 1,238.40 516 28.80/yr 7/01/93 6/30/98 2,238.40
2.40/mth
1641 ALT, WINSTON D., M.D., Ph.D. 1,238.40 516 28.80/yr 8/01/94 7/31/98 1,238.40
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1642 VAN DEUSEN, TIM, M.D. 825.60 344 28.80/yr 7/01/93 6/30/10 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 124
?????? MANAGER Rent Roll Page: 8
Property: WESTWOOD CENTER
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1644 STOCKTON, JAMES H. 860.00 344 30.00/yr 11/01/83 10/31/10 860.00
2.50/mth
- ----------------------------------------------------------------------------------------------------------------------
1645 ORLYN, BARRY M. 1,238.40 516 28.80/yr 8/01/97 7/31/98 1,238.40
2.40/mth
1646 HEINICKE, CHRISTOPH M., Ph.D. 825.60 344 28.80/yr 7/01/96 6/30/99 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1647 GOODMAN, LINDA S., Ph.D. 860.00 344 30.00/yr 2/01/96 1/31/10 825.60
2.50/mth
- ----------------------------------------------------------------------------------------------------------------------
1648 ROCHMAN, JERRY Ph.D. 825.60 344 28.80/yr 10/01/95 9/30/98 825.60
2.40/mth
1649 GOLDENBERG, HERBERT Ph.D. 825.60 344 28.80/yr 2/01/95 1/31/10 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
1650 FOSTER, BEATRIZ 1,238.40 516 28.80/yr 2/01/97 1/31/98 1,238.40
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
1654 ROSENBLATT, MICHAEL, M.D. 984.00 410 28.80/yr 8/01/95 7/31/98 984.00
2.40/mth
1655 AM COLLEGE OBSTETRIC/GYNECOLOGY 1,958.90 1031 22.80/yr 1/01/95 12/31/97 1,958.90
- ----------------------------------------------------------------------------------------------------------------------
1.90/mth
1700 VACANT 0.00 1204 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1701 MATTIS, MARY L., Ph.D. 1,517.50 607 30.00/yr 7/01/92 6/30/10 1,517.50
2.50/mth
1707 LIFSHITZ, ERIC M.D. 1,145.00 458 30.00/yr 6/01/96 5/31/10 1,099.20
- ----------------------------------------------------------------------------------------------------------------------
2.50/mth
1708 VACANT 0.00 1217 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1709 FRANZBLAU, MICHAEL M.D. 1,279.20 533 28.80/yr 6/01/96 5/31/01 1,279.20
2.40/mth
1715 VACANT 0.00 533 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1716 VACANT 0.00 1718 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
1717 KIM, NADY, Ph.D. 1,279.20 533 28.00/yr 3/01/97 2/28/00 20.86
2.40/mth
1719 MOSS, TRUDY, Ph.D. 852.00 481 21.26/yr 3/01/92 2/28/99 0.00
- ----------------------------------------------------------------------------------------------------------------------
1.77/mth
1721 BARTON, BROOKE, M.D., INC. 1,422.00 585 29.17/yr 10/01/96 9/30/97 1,422.00
2.43/mth
- ----------------------------------------------------------------------------------------------------------------------
1724 VACANT 0.00 120 0.00/yr 0.00
0.00/mth
1726 VACANT 0.00 120 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
1731 VACANT 0.00 533 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 125
?????? MANAGER Rent Roll Page: 9
Property: WESTWOOD CENTER
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
17?? ???? ??????, Ph.D. ??.00 ??? 28.80/yr 11/01/96 10/31/9? ???.00
2.?0/mth
- --------------------------------------------------------------------------------------------------------------------
1737 SHEEHAN & ROSS 1,099.20 458 28.80/yr 6/01/97 5/31/98 1,099.20
2.40/mth
1739 ANNE LABORDE AS OF 10/1/97 1,152.00 480 2.40/yr 10/01/97 9/30/00 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
1740 VACANT 0.00 1326 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
1743 SOLAR, SHEILA, Ph.D. 1,058.40 441 28.80/yr 3/01/94 2/28/98 1,058.40
2.40/mth
1745 YA???A, PATRICE 924.00 385 28.80/yr 4/01/96 4/30/10 924.60
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
1747 ??????, JANIS V., Ph.D. 940.80 392 28.80/yr 4/01/97 3/31/00 940.80
?.40/mth
- --------------------------------------------------------------------------------------------------------------------
1751 SCHUMAN & JONES AS OF 9/1/97 2,008.80 837 0.00/yr 9/01/97 8/31/00 0.00
2.40/mth
1752 SCHAIRER, JOHN & JESSICA 1,651.20 688 28.80/yr 9/01/95 8/31/98 1,651.20
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
1??? VACANT 0.00 3427 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
1801 HELLER, EUGENE C. 3,346.20 1859 21.60/yr 11/01/96 10/31/01 3,569.28
0.00/mth
18?? VACANT 0.00 2780 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
18?? VACANT 0.00 1239 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
18?? A.F.S.C.M.E. 3,052.80 1696 21.60/yr 5/01/96 4/30/01 3,052.80
1.80/mth
18?? UCLA 1,048.00 524 24.00/yr 3/01/94 2/28/10 0.00
- --------------------------------------------------------------------------------------------------------------------
2.00/mth
1??? VACANT 0.00 3?01 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
1851 GERSON AND ADRIEN 2,800.00 1120 30.00/yr 5/01/93 4/30/98 2,800.20
2.40/mth
185? ADREIN, CHERI, Ph.D. 566.40 236 28.80/yr 8/01/97 7/31/98 566.40
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
18?? VACANT 0.00 17878 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
1901 VACANT 0.00 0 0.00/yr 0.00
0.00/mth
2000 C??DOW, RIN? HARRIS 2,337.60 974 28.80/yr 9/01/97 8/31/00 3,437.50
- --------------------------------------------------------------------------------------------------------------------
2.40/mth
2??? ????????, ??????, M.D. 1,368.00 ??0 28.80/yr 4/01/97 3/31/98 1,368.00
2.40/mth
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 126
?????? MANAGER Rent Roll Page: 10
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
200? ???????????????????? M.D 84??? 344 28.80/yr 8/01/97 7/31/98 ?????.??
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
2006 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
2008 PHELAN, KELLY, M.D. 860.00 344 30.00/yr 6/01/96 5/31/10 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.50/mth
2009 NEWMAN, FRANK, Ph.D. 1,190.40 496 28.80/yr 7/01/96 6/30/99 1,190.40
2.?0/mth
- ----------------------------------------------------------------------------------------------------------------------
2010 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
2012 GOLDBERG, ALFRED, M.D. 1,238.40 516 28.80/yr 9/01/94 8/31/10 1,238.00
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
2014 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
2015 COTTON, OI, STEWART 2,927.50 1171 30.00/yr 6/01/90 5/31/10 2,927.50
2.50/mth
2017 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
2021 ASTOR-?????, CARRIE, Ph.D. 825.60 344 28.80/yr 1/01/97 12/31/98 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
2025 KAPPELER, THOMAS, M.D. 2,474.40 1031 28.80/yr 2/01/92 1/31/10 0.00
2.40/mth
2029 BELL, ILENE, Ph.D. 825.60 344 28.80/yr 6/01/97 5/31/98 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
2031 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
2032 GOLDSTEIN, DAVID, Ph.D. 825.60 344 28.80/yr 7/01/96 6/30/99 825.60
2.40/mth
2033 BRIGHTMAN, RICHARD, Ph.D. 825.60 344 28.80/yr 4/01/97 3/31/98 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
2034 SEIDLER-FELLER, DOREEN, Ph.D. 825.60 344 28.80/yr 7/01/95 6/30/00 825.60
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
2035 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
2036 KARAGOZIAN, ALBERT 825.60 344 28.80/yr 12/01/96 11/30/97 825.60
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
2037 VACANT 0.00 668 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
2038 FLETCHER, CHARLOTTE, Ph.D. 860.00 344 30.00/yr 7/01/95 7/31/10 825.60
2.50/mth
2042 VACANT 0.00 516 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
2045 VACANT 3949 26.40/yr 0.00
2.20/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 127
???????? MANAGER Rent Roll Page: 11
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2??? VACANT 0.00 ??? 0.00/yr 0.00
2.40/mth
- ----------------------------------------------------------------------------------------------------------------------
2100 SADOW AND ??????????????? 1,296.00 540 28.80/yr 8/01/96 7/31/98 1,296.00
2.40/mth
2101 WARREN BRADLEY L., M.D. 1,416.00 590 28.80/yr 8/01/94 7/31/99 1,416.00
- ----------------------------------------------------------------------------------------------------------------------
2.40/mth
210? ENGLISH ?????? CENTER 4,?????? ?10 ??.??/yr 7/01/97 6/30/98 4,??????
?.??/mth
- ----------------------------------------------------------------------------------------------------------------------
201? UCLA -- DIVISION OF FAMILY MFD 3,068.50 1805 20.40/yr 12/01/91 7/31/10 0.00
1.70/mth
2112 VACANT 0.00 344 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
211? VACANT 0.00 688 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
211? VACANT 0.00 688 0.00/yr 0.00
0.00/mth
2121 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
2125 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
2129 VACANT 0.00 688 0.00/yr 0.00
0.00/mth
2133 VACANT 0.00 688 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/yr
21?? VACANT 0.00 344 0.00/mth 0.00
0.00/yr
- ----------------------------------------------------------------------------------------------------------------------
2137 VACANT 0.00 344 0.00/yr 0.00
0.00/mth
2139 MONTY'S WESTWOOD INC. 1,200.00 600 24.00/yr 1/01/82 12/31/10 1,200.00
- ----------------------------------------------------------------------------------------------------------------------
2.00/mth
21?? MONTY'S WESTWOOD INC. 2,500.00 5400 5.56/yr 11/01/69 10/31/99 2,500.00
0.46/mth
- ----------------------------------------------------------------------------------------------------------------------
G1057 LAILAI CAFE 6,375.00 5100 15.00/yr 3/01/97 6/30/07 7,395.00
1.25/mth
G10?? CHOLAKYAN ??????? (GARY) 1,350.00 450 36.00/yr 2/01/96 1/31/01 1,350.00
- ----------------------------------------------------------------------------------------------------------------------
3.00/mth
G10?? ??? TRAVEL 2,194.00 665 39.59/yr 4/01/92 3/31/92 2,52?.00
3.30/mth
- ----------------------------------------------------------------------------------------------------------------------
G1080 SOUSANNA, HENRI 1,592.00 923 20.70/yr 9/01/96 12/31/03 1,592.00
1.72/mth
G1082 VOGEL, JON D. 3,425.00 1400 29.36/yr 3/01/91 2/28/98 3,627.00
- ----------------------------------------------------------------------------------------------------------------------
2.45/mth
G10?? SAM??? FO????, INC. ??????? 2800 32.82/yr 12/01/88 11/30/98 0.00
BELIEVE THEY MAY HAVE ABANDONED SPACE, 2.??/mth
ATTORNEY'S HANDLING
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 128
?????? MANAGER Rent Roll Page 12
Property: WESTWOOD CENTER
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
G1096 VACANT 0.00 7972 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
G1150 VACANT 8944 22.94/yr 0.00
1.90/mth
LOBBY1 LOPEZ, PAUL 678.00 339 24.00/yr 8/01/97 7/31/98 678.00
- --------------------------------------------------------------------------------------------------------------------
2.00/mth
PH07 VACANT 0.00 182 0.00/yr 0.00
0.00/mth
- --------------------------------------------------------------------------------------------------------------------
PH1 VACANT 0.00 140 0.00/yr 0.00
0.00/mth
PH11 NEW AMERICA ELECTRICAL CORP. 501.00 167 36.00/yr 12/01/94 12/31/10 400.80
- --------------------------------------------------------------------------------------------------------------------
3.00/mth
PH14 CHANEY, MICHAEL 1,171.20 488 28.80/yr 1/01/95 12/31/98 1,567.20
2.40/mth
- --------------------------------------------------------------------------------------------------------------------
PH16 VACANT 0.00 499 0.00/yr 0.00
0.00/mth
PH18 BRANDMAN ASSOCIATES, MICHAEL 1,785.00 159 134.72/yr 10/01/94 9/30/10 1,785.00
- --------------------------------------------------------------------------------------------------------------------
11.23/mth
PH21 VACANT 387.00 129 36.00/yr 0.00
3.00/mth
- --------------------------------------------------------------------------------------------------------------------
PH22 VACANT 0.00 129 0.00/yr 0.00
0.00/mth
PH2200 VACANT 0.00 5888 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
PH23 COUSER, SHERRI 718.00 170 50.68/yr 12/01/94 12/01/10 943.80
4.22/mth
- --------------------------------------------------------------------------------------------------------------------
PH24 VACANT 0.00 161 0.00/yr 0.00
0.00/mth
PH25 GARCIA, JOE 196.00 72 32.67/yr 12/01/96 12/31/10 196.80
- --------------------------------------------------------------------------------------------------------------------
2.72/mth
PH26 ROMANOFF, RICHARD, Ph.D. 216.00 72 36.00/yr 6/01/96 6/30/10 216.00
3.00/mth
- --------------------------------------------------------------------------------------------------------------------
PH27A VACANT 104.00 30 ?1.60/yr 0.00
3.47/mth
PH27B VACANT 0.00 30 0.00/yr 0.00
- --------------------------------------------------------------------------------------------------------------------
0.00/mth
PH30 HESS, JAMES 282.00 59 57.36/yr 3/01/96 3/31/10 0.00
4.78/mth
- --------------------------------------------------------------------------------------------------------------------
PH4 HESS, JAMES 588.00 196 ?6.00/yr 7/01/96 6/30/10 0.00
3.00/mth
PH5 KIM, EVELYN 597.00 164 43.68/yr 2/01/97 3/31/10 492.00
- --------------------------------------------------------------------------------------------------------------------
3.64/mth
PH6 THORNBERG, ERIC 492.00 164 36.00/yr 5/01/97 4/30/98 492.00
3.00/mth
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 129
?????? MANAGER Rent Roll Page: 13
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PH8 VACANT 447.00 149 36.00/yr 0.00
3.00/mth
- ----------------------------------------------------------------------------------------------------------------------
PH9 JOY AROFF 561.00 187 36.00/yr 3/01/97 2/28/99 561.00
3.00/mth
PHMAIL MEDINA & THOMPSON, INC. 150.00 0 0.00/yr 6/01/95 6/30/10 559.28
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
PHMAIL2 ROBERTS, VICKI 150.00 0 00.00/yr 6/01/97 6/30/10 580.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
PRK001 CINAMERICA THEATRES, L.P. 5,000.00 0 0.00/yr 7/01/94 7/31/06 0.00
0.00/mth
PRK300 BOGARD, WILLIAM (SCHOCK'S) 1,359.60 1133 14.40/yr 10/01/96 9/30/97 1,359.60
- ----------------------------------------------------------------------------------------------------------------------
1.20/mth
PRKNG VACANT 0.00 0 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
ST762 VACANT 0.00 0 0.00/yr 0.00
0.00/mth
STR10 CALIFORNIA GRADUATE INSTITUTE 100.00 100 12.00/yr 1/31/95 2/28/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
1.00/mth
STR11 CALIFORNIA GRADUATE INSTITUTE 100.00 100 12.00/yr 4/01/95 3/31/10 0.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
STR15 VACANT 0.00 100 0.00/yr 0.00
0.00/mth
STR17 REGENTS OF UNIVERSITY CALIF. 100.00 100 12.00/yr 4/01/97 4/30/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
1.00/mth
STR19 REGENTS OF UNIVERSITY CALIF. 100.00 100 12.00/yr 6/01/97 6/30/10 0.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
STR22 A.F.S.C.M.E. 100.00 100 12.00/yr 8/01/96 8/31/10 0.00
1.00/mth
STR23 VACANT 0.00 100 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
STR25 REGENTS OF UNIVERSITY CALIF. 100.00 100 12.00/yr 8/01/97 8/31/10 0.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
STR26 KAPPELER, THOMAS, M.D. 100.00 100 12.00/yr 7/01/97 7/31/10 0.00
1.00/mth
STR28 ANGELES DESIGN SYSTEMS, INC. 100.00 100 12.00/yr ?/01/9? 3/31/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
1.00/mth
STR3 UCLA 100.00 100 12.00/yr 5/01/96 3/31/10 0.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
STR31 KARAGOZION, ALBERT 100.00 100 12.00/yr ?/??/?? 11/30/10 0.00
?.?0/mth
STR34 CORPORATION OF KATE MANTILINI 400.00 450 ?0.67/yr ?/??/?? 4/30/10 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.89/mth
STR38 VACANT 0.00 200 0.00/yr 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 130
?????? MANAGER Rent Roll Page: 14
Property: WESTWOOD CENTER
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------
Unit Rent Per Lease Lease
Reference Monthly Square Square Starting Exp. Deposits
Number Name Rent Feet Foot Date Date Held
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
???? ?????? ? ?? ??? ??.00/yr ?.??
?.00/mth
- ----------------------------------------------------------------------------------------------------------------------
?-STR8 VACANT 0.00 100 0.00/yr 0.00
0.00/mth
?-STR9 VACANT 0.00 100 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
????? ????? ???.?? 100 12.00/yr ?/??/?? ?/??/?? ?.??
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
?-STRG VACANT 0.00 100 0.00/yr 0.00
0.00/mth
?-STRH VACANT 0.00 100 0.00/yr 0.00
- ----------------------------------------------------------------------------------------------------------------------
0.00/mth
?-STR UCLA ALUMNI ASSOCIATION ???.00 28? 12.00/yr 11/01/94 10/31/10 0.00
1.00/mth
- ----------------------------------------------------------------------------------------------------------------------
?-STRP3 U.C.L.A. 150.00 0 0.00/yr 12/01/94 12/31/97 0.00
0.00/mth
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 131
EXHIBIT E
SCHEDULE AND DESCRIPTION OF SERVICE CONTRACTS
<TABLE>
<CAPTION>
VENDOR PAID AMOUNT
- ------------------------------------ ---------- ------------
<S> <C> <C>
ACCO Monthly $8679.81
(HVAC)
American Reclamation Monthly 968.00
(Trash)
Arch Communications Monthly 68.45
(Pagers)
Blue Cross Monthly 976.00
(Dependents Health Insurance)
Braverman & Codron Monthly 1200.00
(Acct.)
G&K Services Monthly 350.00
(Uniforms)
Honeywell Quarterly 53.25
(Fire Alarm)
Page Net Monthly 29.40
(Pager)
Premium Property Protective Monthly 10,000(appr)
Services (Security)
Premier/ABM Monthly 14,500(appr)
(Janitorial)
Principal Mutual Monthly 3,042.90
(Health Insurance)
Telecom Communications Monthly 90.00
(Answering Service)
</TABLE>
<PAGE> 132
EXHIBIT F
Intentionally Deleted
<PAGE> 133
EXHIBIT G
TENANT ESTOPPEL CERTIFICATE
Westwood Center
1100 Glendon Avenue
Los Angeles, California 90024
Re: Tenant Lease for 1100 Glendon Avenue
Los Angeles, California 90024
Suite _________
Ladies and Gentlemen:
We understand that Westwood Center, the partnership that owns the office
building complex located at 1100 Glendon Avenue, Los Angeles, California (the
"Property") in which the undersigned is a tenant, proposes to admit a new
partner. We further understand that it is necessary that you understand the
precise nature of our tenancy and in order to so do, we hereby warrant and
represent to you that with respect to our lease, as amended (the "Lease") and
more particularly described in Schedule "A" attached hereto (the "Schedule") the
following is true and correct:
1. The Lease constitutes the entire agreement between the undersigned and
the landlord thereunder with respect to the subject matter thereof and the Lease
has not been modified, amended or supplemented in any way except by the
amendments or other agreements described in the Schedule.
2. The summary of the basic terms of the Lease contained in the Schedule
is true and correct.
3. Except as provided in the Schedule, the undersigned has not assigned,
transferred or hypothecated the Lease or any interest therein or entered into a
sublease for any portion of the premises covered by the Lease and no person or
firm other than the undersigned or its employees is in possession of such
premises or any portion thereof.
4. The undersigned is not in default (or with the giving of notice or the
passage of time or both will not be in default) under the Lease and the
undersigned has no claim against, off-set, credit, defense, counterclaim or
deductions against the landlord thereunder or, any rent or other sums due or
payable under the Lease and, the landlord thereunder is not in default (or with
the giving of notice or the passage of time or both will not be in default)
under the Lease.
5. The undersigned has no option, right of first refusal or otherwise to
purchase the Property or any portion thereof or any interest therein and the
only interest of the undersigned in the Property is that of a tenant pursuant to
the terms of the Lease.
6. The undersigned does not engage in the generation, storage or disposal
of "Hazardous Materials" on the Property and to the best of the undersigned's
knowledge, there are no Hazardous Materials located in, on, under or in the
vicinity of the Premises demised by the Lease except for normal office supplies.
The undersigned agrees not to use, store, or permit the
<PAGE> 134
Lease except for normal office supplies. The undersigned agrees not to use
store, or permit the use, storage or release of any Hazardous Materials on,
under or about the Premises or the Property other than what is permitted by
applicable law, codes, regulations or restrictions and used by the undersigned
in accordance with applicable laws and in amounts as dictated by the normal
conduct of the undersigned's business. The term "Hazardous Material" means any
toxic or hazardous substance, material or wastes which if or becomes regulated
by any local government, the State of California, the United States government
or any agency or division thereof.
7. The undersigned is not the subject of any bankruptcy, insolvency,
debtor's relief, reorganization, receivership or other similar proceedings.
8. The person executing this Certificate hereby warrants and represents
that he or she has the power and authority to execute and deliver this
Certificate on behalf of the tenant named herein.
9. The undersigned as tenant hereby ratifies and confirms the Lease and
the tenancy created thereby.
We understand that the new partner of Westwood Center will rely on this
Certificate.
Very truly yours,
------------------------------------------
Name of Tenant
------------------------------------------
Signature
------------------------------------------
Date
<PAGE> 135
SCHEDULE "A"
Summary of Lease Terms
(1) Name of Tenant:
-----------------------------------------------------------
(2) Lease Date:
---------------------------------------------------------------
(3) Amendment Dates, Separate Agreements, if any:
-----------------------------
(4) Suite No.: ; Estimated Square Footage:
------------------- ------------------
(5) Lease Commencement Date: ; Expiration of Term:
--------------- ---------------
(6) Option(s) to Extend:
------------------------------------------------------
(7) Option(s) for Additional Space:
-------------------------------------------
(8) Monthly Base Rent: $ ;
-------------
Escalations/CAM Charges: $ ;
-------------
Total Monthly Rent: $ .
-------------
(9) Tenant's Percentage Share of Increased Operating Costs: %
------------------
(10) Security Deposit: $ ; Prepaid Rent:
--------------- --------------------------
(11) Assignees/Subtenants:
-----------------------------------------------------
(12) Parking Spaces:
-----------------------------------------------------------
(13) Lease Guarantor(s):
-------------------------------------------------------
(14) Uncured Defaults by Landlord: None
--------------------------------------------
(15) Exclusive Uses:
-----------------------------------------------------------
(16) Tenant Improvements or other allowances due Tenant: $
---------------------
(17) Comments, if any:
--------------------------------------------------------
----------------------------------------
Name of Tenant
By:
-----------------------------------
Date:
-----------------------------------
<PAGE> 136
EXHIBIT H
LIABILITY AGREEMENT
<PAGE> 137
LIABILITY AGREEMENT
THIS LIABILITY AGREEMENT (the "Agreement") is made this________ day
of_________ , 1997 by and between Ed N. Harrison both individually and as
Trustee of the Ed N. Harrison Separate Property Trust created by Declaration of
Trust dated 8/18/87 and __________ Harrison (collectively referred to as
"Harrison"), A.S. Glikbarg both individually and as Trustee of the A.S. Glikbarg
Family Trust created by Declaration of Trust dated 9/16/87 and Arleen Glikbarg
(collectively referred to as "Glikbarg") and Arden Realty Limited Partnership, a
Maryland limited partnership ("Arden OP") (Harrison, Glikbarg and Arden OP are
sometimes hereinafter referred to as a "Party" or collectively as the
"Parties"), with reference to the following facts:
A. Prior to the date hereof, Ed N. Harrison as Trustee of the Ed N.
Harrison Separate Property Trust created by Declaration of Trust dated 8/18/87
("Harrison Trust") and A.S. Glikbarg as Trustee of the A.S. Glikbarg Family
Trust dated 9/16/87 ("Glikbarg Trust") were the general partners of Westwood
Center, a California limited partnership (the "Partnership"). Pursuant to a
certain Agreement to Contribute dated _________, 1997 (the "Contribution
Agreement") between the Partnership and Arden OP, concurrently herewith Arden OP
is making a substantial capital contribution to the Partnership and is being
admitted as the general partner of the Partnership, and the interests held by
Harrison Trust and Glikbarg Trust are being converted to that of limited
partners.
B. The Partnership has outstanding certain indebtedness evidenced
by that certain promissory note (the "Note") dated June 5, 1985 in the original
principal amount of $16,000,000 in favor of The Prudential Insurance Company of
America, Loan Number 2190495, which Note is secured by a Deed of Trust (the
"Deed of Trust") covering the real property (the "Property") owned by the
Partnership. The Note, Deed of Trust and all loan documents ancillary thereto
are hereinafter collectively referred to as the "Prudential Loan." The Note was
executed by Harrison Trust and Glikbarg Trust on behalf of the Partnership as
its general partners. The Prudential Loan is a "recourse loan" for which both
the Partnership and Harrison Trust and Glikbarg Trust, as its general partners
who executed the Note on behalf of the Partnership, are personally liable.
C. This Agreement is being executed pursuant to the Contribution
Agreement in order to allocate liability for the Prudential Loan as between
Harrison and Glikbarg, as the former general partners and their affiliates, on
the one hand, and Arden OP, as the newly admitted general partner, on the other
hand.
1
<PAGE> 138
NOW, THEREFORE, in consideration of the foregoing recitals and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
1. Allocation of Liability for the Prudential Loan. The Parties
acknowledge and agree that notwithstanding the liability of any of them to
Prudential with respect to the Prudential Loan, as among the Parties, each of
them shall be liable for the Prudential Loan as follows:
(a) Harrison and Glikbarg shall be liable for the first Thirteen
Million Dollars ($13,000,000) of the Prudential Loan (the amount for which
Harrison and Glikbarg are liable being hereinafter referred to as the
"Harrison/Glikbarg Share"). Arden OP shall be liable for any amounts due under
the Prudential Loan for which Harrison and Glikbarg are not liable hereunder
(the "Arden Share"), including without limitation amounts due in excess of
Thirteen Million Dollars ($13,000,000). The Harrison/Glikbarg Share and the
Arden Share are sometimes hereinafter referred to as the applicable Party's
"Share."
(b) Notwithstanding any provision to the contrary in this
Agreement:
(i) Neither Harrison nor Glikbarg shall have any liability
for the Harrison/Glikbarg Share hereunder in the event of "material uninsured
damage" to the Property due to an earthquake. For purposes of this Agreement,
"material uninsured damage" shall mean damage to the Property that is not
compensated by insurance and which is in an amount greater than twenty percent
(20%) of the outstanding principal balance of the Prudential Loan as of the date
hereof.
(ii) Prudential (or its successors or assigns) (hereafter
collectively referred to as "Prudential") first must have exercised all of its
rights, powers and remedies with respect to foreclosure on the Property and any
other collateral held by it as security for the repayment of the Prudential
Loan, and after such exercise, must have applied all net proceeds or other
amounts received (including the amount of all credit bids and the like) from
such foreclosure sale or sales to the discharge of the Prudential Loan, before
the obligation of Harrison and Glikbarg for the Harrison/Glikbarg Share shall
arise hereunder, and the obligation of Harrison and Glikbarg for the
Glikbarg/Harrison Share shall be limited to the excess (if any) of (x) Thirteen
Million Dollars ($13,000,000), over (y) the net proceeds or other amounts
attributable to the foreclosure sale or sales of the Property and any other
collateral which are applied to the discharge of the Prudential Loan.
By way of example only, and not in limitation of the foregoing:
if there were a default under the Prudential Loan
2
<PAGE> 139
of $16,000,000, and if the Property brought at least $13,000,000 at foreclosure,
the obligation of Harrison and Glikbarg for the Harrison/Glikbarg Share would be
limited to the excess of $13,000,000 over $13,000,000, or zero, and Harrison and
Glikbarg would have no liability hereunder. If, however, for reasons other than
"material uninsured damage" to the Property due to earthquake, the Property
brought only $10,000,000 at foreclosure, the obligation of Harrison and Glikbarg
for the Harrison/Glikbarg Share would be limited to the excess of $13,000,000
over $10,000,000, or $3,000,000.
2. Allocation of Harrison/Glikbarg share Among Harrison and
Glikbarg. To the extent Harrison and Glikbarg are liable for the
Harrison/Glikbarg Share, Harrison shall be liable for 82.31% thereof and
Glikbarg shall be liable for 17.69% thereof. The liabilities of Harrison and
Glikbarg hereunder shall be several and not joint.
3. Term of Agreement. This Agreement, as well as all of the rights,
duties, requirements and obligations created hereunder, shall remain in full
force and effect as long as the Prudential Loan is outstanding, and shall
terminate on the date on which the Prudential Loan is satisfied in full.
4. Indemnification. If, for any reason, a Party (the "Indemnitee")
makes any payment to Prudential with respect to the Prudential Loan in excess of
his or its respective Share (the "Excess Payment"), the Party liable for such
payment hereunder (the "Indemnitor") shall absolutely and unconditionally
reimburse the Indemnitee for the lesser of (i) the full amount of the Excess
Payment, or (ii) the maximum amount that the Indemnitor would have been
obligated to pay hereunder had such Excess Payment not been made by the
Indemnitee. The Indemnitor shall reimburse the Indemnitee as required by this
Section 4 within ten (10) days after receiving notice of an Excess Payment from
the Indemnitee. Any payment made pursuant to this Section 4 shall for all
purposes hereunder be treated as a payment of such Indemnitor's respective Share
of the Prudential Loan in accordance with Section 1 hereof.
5. Amendments of the Note or Deed of Trust. Except as provided to
the contrary in the Contribution Agreement and the Amended and Restated
Agreement of Limited Partnership of Westwood Center dated_________________, 1997
(the "Amended and Restated Agreement") and subject to the provisions therein
regarding the Prudential Loan (as therein defined)(including without limitation
Section 2(b) of the Contribution Agreement and Section 4.3.D of the Amended and
Restated Agreement), the Partnership, Prudential or any subsequent holder of the
Note or beneficiary of the Deed of Trust may, from time to time, without notice
to or consent of Harrison or Glikbarg, agree to any amendment, waiver,
modification or alteration of the Note or Deed of Trust and the
3
<PAGE> 140
Partnership's rights and obligations thereunder (including without limitation
renewa1, waiver or variation of the maturity of the indebtedness evidenced by
the Note, increase or reduction of the rate of interest payable under the Note,
release, substitution or addition of any guarantor or endorser and acceptance or
release of any security for the Note). The Note may be extended one or more
times without notice to or consent from Harrison or Glikbarg, and the Parties
shall remain at all times bound to their obligations under this Agreement
notwithstanding such extensions.
6. Notices, etc, Relating to the Prudential Loan. Each Party shall
promptly send to the other Parties copies of all notices, demands, pleadings and
the like received by the Party with respect to any default, foreclosure or other
action on the Prudential Loan.
7. Waivers. Harrison and Glikbarg each expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution or
any other claim which they may now or hereafter have against the Partnership or
any other person directly or contingently liable for the payment or performance
of the Prudential Loan except for those rights arising from this Agreement. In
furtherance, and not in limitation, of the preceding waiver, Harrison and
Glikbarg each agrees that any payment to Prudential pursuant to this Agreement
shall be deemed a contribution to the capital of the Partnership and any such
payment shall not cause either Harrison or Glikbarg to be a creditor of the
Partnership.
8. No Third Party Beneficiary. No provisions of this Agreement,
express or implied, are intended or shall be construed to confer upon or give to
any person other than the Parties hereto, any rights, remedies or other benefits
under or by reason of this Agreement, and all provisions hereof shall be
personal solely between the Parties to this Agreement.
9. No Assignment. None of the Parties shall be entitled to assign
their rights or obligations under this Agreement to any other person without the
written consent of the other Parties.
10. Entire Agreement. The Parties agree that this Agreement
contains the entire understanding and agreement between them with respect to the
subject matter hereof and cannot be amended, modified or superseded except by an
agreement in writing signed by the Parties.
11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given only
if done in one or more of the following ways: (a) on the day of delivery if
delivered personally; (b)
4
<PAGE> 141
two (2) days after the date of mailing if mailed by certified or registered
first class mail, postage prepaid; (c) the next business day after deposit with
an overnight air courier company guaranteeing next day delivery; or (d) when
sent by facsimile (with a copy simultaneously sent by registered or certified
mail, return receipt requested). Such notices shall be given to a party at the
address and/or facsimile telephone number set forth below:
If to Harrison: Ed N. Harrison, Trustee of the
Ed N. Harrison Separate Property
Trust u/d/t dated August 18, 1987
c/o Edward Landry, Esq.
Musick, Peeler & Garrett
One Wilshire Boulevard, #2000
Los Angeles, California 90017-3321
Facsimile: (213) 624-1376
If to Glikbarg Trust: A.S. Glikbarg, Trustee u/d/t
dated September 6 1987 establishing the
A.S. Glikbarg Family Trust
375 Fordyce Road
Los Angeles, California 90049
Facsimile: (310) 476-9691
If to Arden OP: Arden Realty Limited Partnership
9100 Wilshire Boulevard
Suite 700 East
Beverly Hills, California 90212
Attn: Mr. Richard S. Ziman
Facsimile: (310) 246-2941
With a copy to: Troy & Gould
1801 Century Park East
16th Floor
Los Angeles, California 90067
Attn: Kenneth R. Blumer, Esq.
Facsimile: (310) 201-4746
Any party may, at any time by giving five (5) days' prior written notice to the
other party, designate any other address in substitution of the foregoing
address to which such notice will be given.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California other
than conflict of laws.
13. Litigation Costs. In the event it becomes necessary to enforce
the provisions of this Agreement against any of the Parties, the prevailing
party shall be entitled to receive, in addition to any other recovery, costs of
enforcement,
5
<PAGE> 142
including attorneys and accountants fees, whether or not litigation is
instituted.
14. Severability. If any provision of this Agreement shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby. If any provision of this Agreement shall be held
invalid due to its scope or breadth, such provision shall be deemed valid to the
extent of the scope or breadth permitted by law.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.
16. Cautions. Section titles or captions contained in this
Agreement are inserted only as a matter of convenience and for reference and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof.
IN WITNESS WHEREOF, the Parties have executed this Agreement the
day and year first above written.
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By:______________________________
Victor J. Coleman
President
_____________________________________
Ed N. Harrison
_____________________________________
Ed N. Harrison as Trustee of the
Ed N. Harrison Separate Property Trust
created by Declaration of Trust
dated 8/18/87
_____________________________________
______________Harrison
6
<PAGE> 143
_____________________________________
A.S. Glikbarg
_____________________________________
A.S. Glikbarg as Trustee of the
A.S. Glikbarg Family Trust created by
Declaration of Trust dated 9/16/87
_____________________________________
Arleen Glikbarg
7
<PAGE> 144
EXHIBIT I
LIST OF ACTIONS, CITATIONS & CLAIMS
1. Michael Preston, et. al. v. Westwood Center Limited Partnership, Los
Angeles Superior Court Case No. SC042844. The Partnership is a co-defendant in a
wrongful death action; the other co-defendant is Monty's Steak House, the tenant
on the 21st floor. The Partnership's insurance carrier, Royal Insurance Company,
has accepted coverage.
2. David C. Morley v. A.S. Glikbarg, Ed N. Harrison et al., Los Angeles
Superior Court Case No. BC 105190. This is a malicious prosecution claim that is
currently on appeal by both the plaintiff and the defendants. The Partnership's
insurance carrier, CNA (Transcontinental Insurance Co.) is defending this claim
and has posted the appeal bond under a reservation of rights. Although the
action is against the general partners only, the Partnership has acknowledged
its responsibility and obligation to pay any and all costs, expenses, attorneys'
fees and/or judgments or settlements with regard thereto.
3. The Partnership has received a letter from Tooley & Company in which
Tooley asserted that the Partnership had a contract with it with respect to the
Partnership's real property.
4. The Partnership received a citation dated May 3, 1995 from the City of
Los Angeles Department of Building and Safety for failure to comply with City
ordinances requiring steel weld inspections. A copy of this citation was
previously sent to Brig Troy at Arden OP.
5. The Partnership received a citation from the City of Los Angeles
Department of Building and Safety in 1988 for failure to comply with the City's
fire sprinkler retrofit ordinance. The Partnership has completed the required
fire sprinkler retrofit work except for two elevator fire doors, for which an
extension has been obtained. Copies of the citation and related correspondence
with Building and Safety were previously sent to Brig Troy.
6. Rhett Neeley v. Westwood Center, Los Angeles Superior Court Case No.
SC042854. The plaintiff, Rhett Neeley, claims that while on guard duty, he
slipped and fell in a stairwell. The Partnership's insurance carrier, Royal
Insurance Company, has accepted coverage.
7. A claim asserted by David Horowitz that while walking across a
"concrete pad" on the property, he tripped and fell. The Partnership's insurance
carrier, Royal Insurance Company, has accepted coverage.
8. A claim by Jennifer Shamay that she slipped on a mat while leaving the
building on a rainy day. The Partnership's insurance carrier, Royal Insurance
Company, has accepted coverage.
<PAGE> 145
EXHIBIT J
OPEN TAX MATTERS
1. The Partnership continues to receive billings from the Employment
Development Department ("EDD") for employment taxes that were discharged in the
Partnership's bankruptcy. The original amount of the employment taxes in
question is less than $1,000. The Partnership continues to receive these
billings even though the Partnership's bankruptcy counsel has repeatedly written
to EDD informing it that the taxes in question were discharged in bankruptcy.
<PAGE> 146
EXHIBIT K
OFFSITE PARKING RIGHTS
1. Those items set forth in the Preliminary Title Report.
2. Lease dated October 29, 1994 between Harrison Properties, a Limited
Partnership and Frank Mills, an individual dba Euro Hair Systems, which was
amended pursuant to an Amendment of Lease dated May 19, 1995 between the same
parties. The lease terminates on May 31, 2000 with on five (5) year option to
renew. The lease provides for five (5) free monthly spaces and 30 minutes free
customer parking at 1100 Glendon. Tenant must pay for the yearly rental cost of
a validation machine.
3. Lease dated June 21, 1994 between Harrison Properties, a Limited
Partnership and "Morgan & Marcus, Inc., A California corporation dba Morgan &
Co. Jewellers" [sic]. The lease terminates December 31, 1999 with no option to
renew. The lease provides for two (2) monthly unreserved parking spaces at 1100
Glendon at no charge.
4. Lease dated July 27, 1983 between Harrison Properties and Hamburger
Hamlets, Inc., which was assigned to Marilyn and Harry Lewis, LLC, a California
limited liability company pursuant to a Consent to Assignment and Amendment to
Lease between Harrison Properties and Marilyn and Harry Lewis, LLC, dated "as of
this _____ day of May, 1995 (the Effective Date)". The lease terminates December
31, 2003 with two five (5) year options and one ten (10) year option to renew.
The lease provides for twenty customers at 1100 Glendon. There is also a parking
covenant for three (3) spaces at 1100 Glendon.
<PAGE> 147
EXHIBIT L
GENERAL RELEASE
<PAGE> 148
R E L E A S E
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
Westwood Center, a California Limited Partnership, (hereinafter referred to as
"Partnership") does hereby forever release, discharge, and acquit Ed N.
Harrison, individually, Ed N. Harrison as Trustee of the Ed N. Harrison Separate
Property Trust created by Declaration of Trust dated August 18, 1987, and A. S.
Glikbarg, individually, and A. S. Glikbarg as Trustee of the A. S. Glikbarg
Family Trust created by Declaration of Trust dated September 16, 1987
(hereinafter "Released Parties") from any and all actions, causes of action,
obligations, costs, damages, losses, claims, liabilities, and demands of
whatsoever character to the date hereof, exclusive, however, of the Released
Parties' obligations under Sections 8(b), 8(c), 13(a) and 15(g) of the Agreement
to Contribute and Escrow Instructions dated September 26, 1997, between the
Partnership and Arden Realty Limited Partnership to the extent such obligations
run in favor of the Partnership (the "Excluded Obligations"):
This Release includes but is not limited to any and all claims of
whatsoever character dealing with or having to do with the Released Parties
acting as general partners of the Partnership or representing the Partnership in
any manner whatsoever, including as an agent, attorney, or otherwise, but does
not include claims with respect to the Excluded Obligations.
It is further understood and agreed that this Release extends to all
claims of every nature and kind whatsoever, other than claims with respect to
the Excluded Obligations; there is hereby expressly released all rights under
Section 1542 of the California Civil Code which provides as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing
the release, which if known by him, must have materially affected his
settlement with the debtor."
The undersigned understand and agree that the giving or acceptance of
this Release and the agreements contained herein shall not constitute or be
construed as an admission of any liability whatsoever by the parties hereto, or
the admission of the validity of any claims made by or against any party hereto
or any of them, it being the purpose of this Release to settle disputed claims
and not to admit liability.
Each of the persons executing this Release on behalf of a party hereto
warrants and represents that said person is duly authorized to execute such
Release on behalf of such party.
COSKEY & BALDRIDGE
ATTORNEYS AT LAW
LOS ANGELES, CALIFORNIA
<PAGE> 149
Each party hereto represents and warrants that said party has not
heretofore assigned or transferred, or purported to assign or transfer, to any
person, firm, or corporation whomsoever any claim, debt, liability, demand,
obligation, cost, expense, action or cause of action herein released.
The undersigned further agree that this Release shall be binding upon
their successors and assigns and shall inure to the benefit of the officers,
spouses, servants, agents, attorneys, employees, subsidiaries, and connected
corporations of the past or present of the parties hereto.
The undersigned further declare and represent that no promise,
inducement, or agreement not herein expressed has been made to the undersigned,
and that this Release contains the entire agreement between the parties.
This Release may be executed in counterparts, which together shall
constitute a single agreement, and each of which shall be an original for all
purposes.
If any provision of this agreement is unenforceable for any reason, the
remaining provisions shall nevertheless be of full force and effect.
In the event of any dispute between the parties hereto arising out of
the subject matter of this agreement, the prevailing party in any such dispute,
in addition to all other remedies, shall be entitled to reasonable attorneys'
fees.
Executed as of November_________, 1997.
WESTWOOD CENTER,
a California corporation
BY ITS GENERAL PARTNERS:
________________________________________
ED N. HARRISON, Individually
________________________________________
ED N. HARRISON, Trustee of the Ed N.
Harrison Separate Property Trust
Created by Declaration of Trust dated
8/18/97
________________________________________
A.S. GLIKBARG, Individually
-2-
<PAGE> 150
________________________________________
A.S. GLIKBARG, Trustee of the A. S.
Glikbarg Family Trust Created by
Declaration of Trust dated 9/16/97
-3-
<PAGE> 151
EXHIBIT M
PARKING RIGHTS AGREEMENT
This Parking Rights Agreement ("Agreement") is made and effective as of
the 2nd day of September 1997 by and between WESTWOOD CENTER, a California
limited partnership ("Westwood") and HARRISON PROPERTIES, a California limited
partnership ("Harrison") with respect to the following:
RECITALS
A. Westwood is the owner of a high rise commercial office building and
parking facility ("Parking Garage") located at 1100 Glendon Avenue, Los Angeles,
California 90024 (collectively, the "Property") which Property is more
particularly described on Exhibit "A" hereto.
B. Harrison is the owner of several commercial buildings located at 1127
through 1151 Glendon Avenue, Los Angeles, California 90024 ("Harrison
Properties") which are more particularly described on
Exhibit "B" attached hereto.
C. Harrison Properties has insufficient on-site parking to satisfy the
zoning and other governmental requirements necessary to occupy, lease, operate,
and maintain certificates of occupancy for commercial and retail uses.
D. Prior to the date hereof, Westwood entered into a covenant with the
City of Los Angeles ("City") to provide three (3) off-site parking spaces in
favor of 1139 Glendon Avenue; namely, a Covenant and Agreement Regarding
Maintenance of Off-Street Parking Space dated February 14, 1985 and recorded on
April 26, 1985 as Instrument Nos. 85-472679 and 85-472680 for Harrison
Properties ("Covenant").
E. In addition to the Covenant, however, Harrison, independently, has
entered into leases with tenants of portions of the Harrison Properties agreeing
to provide off-site employee and patron parking in the Parking Garage. Westwood
has never been a party to any of these leases or other parking agreements, but
has, nevertheless, made a good faith attempt to honor these Harrison
commitments.
F. Westwood and Harrison now desire to memorialize an agreement relative
to the off-site parking rights (both covenanted and leased) emanating from the
Harrison Properties and affecting the Parking Garage and the Property.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, covenants and agreements set forth herein and other good and valuable
consideration, the
<PAGE> 152
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. CHARACTER OF PARKING RIGHTS. Subject to the qualifications and
limitations hereinafter expressed, Westwood hereby grants Harrison the license
and right to use the Parking Garage for unreserved monthly, daily and transient
automobile parking in the locations, at the rates and subject to the rules and
regulations designated by Westwood or its Parking Garage operator, from time to
time, subject, however, to the limitations on maximum number of parking spaces
and parking rates hereinafter set forth ("Parking Rights"). The obligations of
Westwood set forth herein are for the benefit of Harrison and shall not create
personal obligations on Westwood which survive Westwood's ownership of any
interest in the Property. The rights granted or acknowledged hereby shall, to
the extent not previously covenanted to the City, constitute a license, subject
to the terms and conditions of this Agreement, shall be binding on Westwood and
all successive owners, encumbrances, parking lot operators and other parties
having an interest in the Parking Garage and/or the Property only during such
party's respective ownership thereof and only for so long as the Property is
continuing to operate as a commercial office building. The benefits of such
license shall be personal to Harrison and its successors in ownership to the
Harrison Properties and shall not be further burdened by any subdivision or
separation thereof nor assignable or otherwise alienable separate and apart from
the Harrison Properties.
1.1 COVENANTED PARKING RIGHTS. Westwood acknowledges that it has
previously established a covenant with the City to provide three (3) off site
parking spaces for one of the Harrison Properties; namely 1139 Glendon Avenue
("Covenanted Rights"). The Covenanted Rights are covenants running with the
Property and are independent of the license and rights being granted by this
Agreement but shall be counted with such rights for determining the Maximum
Parking Rights, as hereinafter defined.
1.2 ADDITIONAL PARKING RIGHTS. In addition to the Covenanted Rights,
Westwood hereby acknowledges, grants and licenses additional Parking Rights in
favor of Harrison and appurtenant to the Harrison Properties to park up to an
additional forty-seven (47) automobiles, subject to the availability of
nonreserved parking spaces at the Parking Garage and the provisions to Paragraph
6.7 below ("Additional Rights"), at any one time on any one day on a nonreserved
space basis during the hours that the Parking Garage is open for automobile
parking.
1.3 MAXIMUM PARKING RIGHTS. The sum of the Covenanted Rights and the
Additional Rights which at the present time constitute fifty (50) parking spaces
is the Maximum Parking Rights acknowledged, granted and licensed by
<PAGE> 153
Westwood, as the case may be, for Harrison Properties. The Maximum Parking
Rights is subject to temporary or permanent reduction because of casualty or
condemnation at the Property, Force Majeure as defined in Paragraph 10 below,
cessation of parking because of temporary renovation of the Parking Garage or
the Property, or the provisions set forth in Paragraph 6.7 below.
1.4 EXCESS CAPACITY RIGHTS. At any time and from time to time that
the Parking Garage has parking capacity to allow for transient parking in excess
of the Maximum Parking Rights, the guests, invitees, customers and patrons of
the tenants of Harrison at Harrison Properties shall have the right together
with and subject to the limitations upon all other members of the public at
large to park in the Parking Garage.
2. TERM. The term of the Parking Rights, is as follows:
2.1 COVENANTED PARKING RIGHTS. The term of the Covenanted Parking
Rights shall run in accordance with such Covenant or until the City agrees to
release the Property from the Covenant; provided, however, Westwood shall have
the right to transfer such Covenanted Parking Rights on a temporary or permanent
basis to another property within the Westwood area which is acceptable to the
City.
2.2 ADDITIONAL PARKING RIGHTS. The term of the Additional Parking
Rights shall run, subject to the other limitations and qualifications contained
in this Agreement, until (a) it is no longer needed by Harrison or its
successors in interest with respect to Harrison Properties, (b) the Harrison
Lease to the Hamlet Gardens expires or (c) the Property is no longer operated as
a commercial office building; provided, however, Westwood shall have the right
to transfer such Additional Parking Rights on a temporary or permanent basis to
another location within the Westwood area.
2.3 EXCESS CAPACITY RIGHTS. The term of the Excess Capacity Rights
shall run, subject to the other limitations and qualifications contained in this
Agreement, until (a) it is no longer needed by Harrison or its
successors-in-interest with respect to the Harrison Properties, (b) the Property
is no longer operated as a commercial office building or (c) the Parking Garage
no longer has the capacity for off-site transient parking in addition to its
other existing commitments for covenanted parking for third parties or off-site
shared parking.
3. PARKING FEES AND CHARGES. Westwood shall be entitled to charge and
Harrison and/or its tenants and their respective employees, agents and patrons
shall be obligated to pay for the Parking Rights set forth herein, as follows:
<PAGE> 154
3.1 EXCESS PARKING RIGHTS. All Excess Parking Rights shall be
charged at the regular, recurring, standard transient parking rates being
charged from time to time by the Parking Garage.
3.2 ADDITIONAL PARKING RIGHTS. All Additional Parking rights shall
be charged at the regular, recurring, standard parking rates (monthly, daily or
transient, as the case may be) being charged from time to time by the Parking
Garage; provided, however, that neither Harrison nor its tenants or their
respective employees, agents or patrons shall be charged for such parking in
excess of the amount allowed to be charged pursuant to the presently existing
terms of the presently existing (but not future) leases with each present tenant
of Harrison.
3.3 COVENANTED PARKING RIGHTS. Except to the extent limited by the
provisions of Section 3.2 above, all Covenanted Parking Rights shall be charged
at the regular, recurring, standard parking rates (monthly, daily or transient,
as the case may be) being charged, from time to time, by the Parking Garage.
4. REGULATION OF USAGE OF PARKING SPACES. Westwood shall endeavor to cause
the Parking Garage to be operated in a manner to ensure that the Harrison
Properties shall be entitled to use, subject to any charges, the Maximum Parking
Rights. In addition, all parking in the Property shall be in accordance with
such reasonable and uniformly applicable rules and regulations as may be
established, from time to time, by Westwood or the operator of the Parking
Garage, consistent with the needs of both the businesses (including, without
limitation, the hours of operations of such businesses) of the Property. A copy
of such rules and regulations shall be delivered by Westwood to Harrison and the
tenants of Harrison Properties, and copies of any replacements, additions or
modifications to such rules and regulations shall be delivered to Harrison and
the tenants of Harrison Properties at least three (3) business days prior to the
date upon which such replacements, additions or modifications become effective.
5. REMEDIES IN EVENT OF DEFAULT. Except to the extent a longer cure is
required, in the event that either party shall fail to perform any of its
obligations pursuant to this Agreement, and such default shall continue for a
period of thirty (30) days after delivery of written notice thereof from the
non-defaulting party to the defaulting party (or, with respect to defaults
requiring more than thirty (30) days for a cure, the defaulting party shall not
have commenced the cure within such thirty (30) day period and thereafter
diligently and continuously prosecuted the same to completion), the defaulting
party shall have committed an uncured default under this Agreement. The
non-defaulting party shall be entitled, as its sole remedy for such uncured
default, to maintain an action for specific performance or for damages. Any such
<PAGE> 155
action shall be brought in the Los Angeles County Superior Court. Under no
circumstances may this Agreement or any rights created pursuant hereto be
unilaterally terminated by action of any party.
6. GENERAL PROVISIONS.
6.1 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
constitute, bind and inure to the benefit of all successors, assigns and other
parties now having or obtaining a fee interest in the Property and the Harrison
Properties. It is not intended that the rights granted hereunder should benefit
any property other than the Harrison Properties, or benefit any persons other
than the owners, tenants, employees, customers, patrons and other users of those
properties. Any person succeeding to fee title to, respectively, the Property or
the Harrison Properties, shall automatically, as of the effective date of the
transfer or conveyance, (a) succeed to the rights herein granted to the owner of
such property and (b) except as expressly provided in the Agreement, be deemed
to have assumed the obligations of such owner accruing after such effective
date. No such transfer or conveyance shall be deemed to relieve such transferor
of obligations accruing under this Agreement prior to such transfer or
conveyance; provided, that, following transfer or conveyance of all of its fee
interest in the Property, the transferring owner shall have no further
responsibility for any obligations or liability first arising or accruing under
this Agreement after the date of such transfer. On or before the date either
party transfers any portion of their respective interests in the Property or the
Harrison Properties to a third party or parties, the transferring party shall
(i) provide a copy of this Agreement to the transferee, (ii) obtain transferee's
written acknowledgement of receipt of this Agreement and (iii) provide such
acknowledgement of receipt to the non-transferring party herein.
6.2 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Agreement in which time of performance is
a factor.
6.3 SEVERABILITY. In the event that any provision of this Agreement
shall be determined by a court of competent jurisdiction to be invalid, void or
illegal, or invalid, void or illegal as applied to any person or circumstance,
the remaining provisions hereof and/or the application of such provision(s) to
any person(s) and/or circumstance(s) other than those as to which it is held to
be invalid, void or illegal, shall nevertheless remain in full force and effect
to the maximum extent permitted by law and not be affected thereby.
6.4 INCORPORATION OF PRIOR AGREEMENTS; AMENDMENT. This Agreement
contains the entire agreement of the parties
<PAGE> 156
hereto with respect to the subject matter hereof and all preliminary
negotiations, prior agreements (express or implied) or understandings pertaining
to such matters, except those contained herein or therein, shall not be
effective for any purpose. No verbal agreement or implied covenant shall be held
to vary the provisions hereof, any statute, law or custom to the contrary
notwithstanding. No provision of this Agreement may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest.
6.5 NOTICES. Any notice required or permitted to be made or given
hereunder shall be in writing and may be served personally or made by registered
or certified mail, return receipt requested, by overnight express mail, by
federal express or other overnight delivery service, or by facsimile (with a
confirming copy being sent concurrently by any other of the foregoing methods).
If served by mail, federal express or other overnight delivery service, or by
facsimile it shall be addressed to the party to whom directed at its respective
address or facsimile number, as the case may be, set forth below:
To Partnership: Westwood Center
1100 Glendon Avenue, Suite 1400
Los Angeles, CA 90024
To Harrison: Ed N. Harrison
c/o Musick, Peeler & Garret
One Wilshire Building
Suite 2000
Los Angeles, CA 90017
Attn: Edward Landry, Esq.
Any notice which is personally served or served by overnight service or
facsimile shall be effective upon delivery; any notice given by mail as provided
above shall be deemed effectively given, if deposited in the United States mail,
registered or certified, postage prepaid and addressed as specified above, on
the date of receipt or refusal indicated on the return receipt. Either party may
by written notice to the other from time to time specify a different address for
notice purposes, but no new address shall be effective until at least twenty
(20) days after receipt of notice of the same by the persons to whom such notice
is directed. However, in the event of a postal strike, all notices hereunder
shall be personally served or sent by facsimile, federal express or other
overnight delivery service.
6.6 WAIVERS. No waiver of any provision of this Agreement shall be
deemed to be a waiver of any other provision hereof or of the subsequent
application of the provision as to which such waiver is given or suffered.
Consent to or approval of any act by one of the parties hereto
<PAGE> 157
shall not be deemed to render unnecessary the obtaining of such party's consent
to or approval of any subsequent act.
6.7 SUBORDINATION. The rights, licenses and privileges granted
herein (except for the Covenanted Parking Rights) shall be and remain subject
and subordinate to the required parking and other rights needed by Westwood and
its successors-in-interest (a) to satisfy any and all requirements of (i) the
certificate of occupancy for the Property and the Parking Garage and (ii) the
designated zoning and any C.U.P. conditions related to the Property and (b) to
ensure continued compliance with all governmental requirements for the operation
of the Property to the effect that the Maximum Parking Rights shall be reduced
or eliminated to the extent necessary to maintain compliance with all
governmental requirements effecting the continued operation of the Property as a
commercial office building.
7. ATTORNEYS' FEES. In any action or reference proceeding by either party
hereto against the other party arising out of, relating to or resulting from the
provisions of this Agreement, the prevailing party in such action shall be
entitled to recover from the other party its costs incurred therein, including
reasonable attorneys' fees, in an amount determined by the Court.
8. CAPTIONS. The captions of the sections of this Agreement are for
convenience only, are not a part of this Agreement and do not in any way limit
or amplify the terms and provisions hereof.
9. GOVERNING LAW. This Agreement shall be construed, interpreted and
applied in accordance with the laws of the State of California.
10. FORCE MAJEURE. Each party shall be excused from performing any of its
respective obligations or undertakings provided in this Agreement, except any of
its respective obligations to pay any sums of money under the applicable
provisions hereof, in the event and for so long as the performance of such
obligations is prevented or delayed by Act of God, fire, earthquake, flood,
explosion, action of the elements, war, invasion, insurrection, riot, mob
violence, sabotage, malicious mischief, inability to procure labor, equipment,
facilities, materials or supplies in the open market, failure of transportation,
condemnation, requisition, laws, order of government or civil or military or
naval authorities or any other cause (excluding financial inability and/or the
inability to obtaining financing), whether similar or dissimilar to the
foregoing, not within the control of the party obligated to perform.
11. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an
<PAGE> 158
original, but all of which together shall constitute but one and the same
instrument.
12. JUDICIAL REFERENCE. Except with respect to an action for injunctive
relief commenced by a party in order to protect against irreparable injury
hereunder or any failure to timely tender any fees or payments due under this
Agreement, all disputes and claims arising under this Agreement, whether
relating to its interpretation, application, enforcement or breach, shall be
heard by a referee of the Los Angeles Superior Court pursuant to California Code
of Civil Procedure Section 638, et seq. The parties shall have the rights of
discovery and appeal provided by California Code of Civil Procedure Section 638,
et seq. With respect to all judicial reference proceedings under this Agreement,
the parties shall agree upon a single referee who shall try all issues, whether
of fact or law, and report a finding and judgment thereon and issue all legal
and equitable relief appropriate under the circumstances of the controversy
before him or her. If the parties are unable to agree on a referee within ten
(10) days of a written request to do so by either party hereto, either party may
seek to have one appointed pursuant to California Code of Civil Procedure
Section 640. In connection with the foregoing, the parties expressly and
knowingly waive any right to jury trial with respect to any matter subject to
this reference proceeding. Each of the parties hereto hereby agrees that this
Agreement constitutes a written consent to waiver of trial by jury pursuant to
the provisions of California Code of Civil Procedure Section 631 and hereby
authorizes and empowers the other party to file this Agreement with the clerk or
judge of any court of competent jurisdiction as statutory written consent to
waiver of trial by jury. The cost of such proceeding shall initially be borne
equally by the parties, but shall ultimately be borne by the party who does not
prevail. Any referee selected pursuant to this Paragraph shall be considered a
temporary judge appointed pursuant to Article 6, Section 21 of the California
Constitution. The referee shall also award to the prevailing party all costs of
such litigation, including, without limitation, all reasonable attorneys' fees.
13. FURTHER ASSURANCES. As part of the consideration to Westwood for the
grant of the Parking Rights contained herein, Harrison for itself and its
successors-in-interest of the Harrison Properties and as a condition to the
continuation of the Parking Rights, covenants and agrees for the benefit of
Westwood and the Property that it will aid and support any proposed renovation
and rehabilitation of the Property for commercial and retail uses, execute any
and all required documents and instruments necessary to evidence such support
and to certify the limitations of its Parking Rights and obligations as
contained in this Agreement.
14. INDEMNITY. Harrison agrees for itself and its successors-in-interest
of the Harrison Properties to protect,
<PAGE> 159
defend and indemnify and hold Westwood and its successors-in-interest wholly
harmless from and against any and all loss, cost, damage, claim, liability or
expense, including court costs and reasonable attorneys' fees, for third party
claims arising out of or in connection with any the Parking Rights granted
herein and any tort claim based thereon or related thereto (including any
personal injury or property damage or claim of personal injury or property
damage of any kind whatsoever, including death, to property or persons,) unless
caused by the gross negligence or intentional misconduct of Westwood.
IN WITNESS WHEREOF, the parties hereto have executed this Parking Rights
Agreement as of the day and year first above written.
WESTWOOD: WESTWOOD CENTER,
a California limited partnership
By:
-----------------------------------------
A.S. Glikbarg
General Partner
By:
-----------------------------------------
Ed N. Harrison
General Partner
HARRISON PROPERTIES: HARRISON PROPERTIES,
a California limited partnership
By:
-----------------------------------------
Ed N. Harrison
General Partner
<PAGE> 1
EXHIBIT 10.12
ADDENDUM TO
AGREEMENT TO CONTRIBUTE CAPITAL
AND ESCROW INSTRUCTIONS
THIS ADDENDUM TO AGREEMENT TO CONTRIBUTE CAPITAL AND ESCROW
INSTRUCTIONS (the "Addendum") is executed as of September 26, 1997 by and
between Westwood Center, a California limited partnership (the "Partnership")
and Arden Realty Limited Partnership, a Maryland limited partnership
("Contributor"), with reference to the following facts:
A. Concurrently with the execution of this Addendum, the Partnership
and Contributor have executed an Agreement to Contribute Capital and Escrow
Instructions (the "Agreement to Contribute"). Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the Agreement to
Contribute.
B. The parties desire to make certain clarifications to the
Agreement to Contribute regarding the applicability of certain sections therein
to Glikbarg Trust and Harrison Trust rather than to A.S. Glikbarg and Ed N.
Harrison, respectively. The parties also wish to define the terms "Glikbarg
Trust" and "Harrison Trust."
C. The parties also desire to amend the Agreement to Contribute to
provide for the execution and delivery of a certain letter agreement as a
condition to the Partnership's obligation to close Escrow.
NOW, THEREFORE, with reference to the foregoing recitals and in
reliance thereon and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by the
Partnership and Contributor as follows:
1. As used in the Agreement to Contribute and this Addendum,
"Glikbarg Trust" shall mean A.S. Glikbarg as Trustee of the A.S. Glikbarg Family
Trust under Declaration of Trust dated September 16, 1987, and "Harrison Trust"
shall mean Ed N. Harrison as Trustee of the Ed N. Harrison Separate Property
Trust under Declaration of Trust dated August 18, 1987.
2. All references in the Agreement to Contribute to the "General
Partners" shall mean Glikbarg Trust and Harrison Trust, and not A.S. Glikbarg
and Ed N. Harrison, respectively. All provisions in Sections 8(b), 8(e) and
15(g) with respect to the several liability of the General Partners shall mean
Glikbarg
1
<PAGE> 2
Trust and Harrison Trust, and not A.S. Glikbarg and Ed N. Harrison,
respectively.
3. The definition of "Guarantors" is revised to mean Glikbarg Trust
and Harrison Trust rather than A.S. Glikbarg and Ed N. Harrison, respectively.
4. The reference in Section 13(a) to A.S. Glikbarg and Ed N.
Harrison shall mean both A.S. Glikbarg and Glikbarg Trust, and both Ed N.
Harrison and Harrison Trust, respectively. The parenthetical beginning on the
seventh line of Section 13(a), which begins "(said several liability of A.S.
Glikbarg...)" is revised to read as follows: "(said several liability of A.S.
Glikbarg as to 1/6th and Ed N. Harrison as to 5/6ths being their liability under
said guaranty and said several liability of Glikbarg Trust as to 1/6th and
Harrison Trust as to 5/6ths being their respective liability as General Partners
of the Partnership)."
5. The several liability of the guarantors referred to in the
statement opposite the signatures of A.S. Glikbarg and Ed N. Harrison as
guarantors on page 31 of the Agreement to Contribute, which reads "Guarantors
severally as to Paragraphs 8(b), 8(e), 13(a) and 15(g)" means A.S. Glikbarg as
to 1/6th and Ed N. Harrison as to 5/6ths.
6. Section 9 of the Agreement to Contribute, entitled "Conditions
Precedent to Partnership's Obligation to Close Escrow," is amended to add a new
subsection (f) as follows:
"(f) EXECUTION OF LETTER AGREEMENT. All required parties shall have
signed the letter agreement attached hereto as Exhibit "N" (the "Agreement
re Obligation to Redeem").
7. Section 11(a) of the Agreement to Contribute, which sets forth
the sums of money and documents required to be delivered to Escrow Agent by
Contributor at least one business day prior to the date of Closing, is amended
to add a new subsection (v) as follows:
"(v) Signed counterparts of the Agreement re Obligation to
Redeem."
8. Section 11(b) of the Agreement to Contribute, which sets forth
the documents required to be delivered to Escrow Agent by the Partnership at
least one business day prior to the date of Closing, is amended to add a new
subsection (vi) as follows:
"(vi) Signed counterparts of the Agreement re Obligation
to Redeem."
2
<PAGE> 3
9. The Agreement to Contribute, as supplemented and amended by this
Addendum, shall remain in full force and effect in accordance with its terms.
10. This Addendum may be executed in any number of counterparts,
each of which so executed shall be deemed an original; such counterparts shall
together constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum
as of the day and year first hereinabove written.
PARTNERSHIP: WESTWOOD CENTER
a California limited partnership
By: /s/ A. S. Glikbarg
-----------------------------------------
Name: A.S. Glikbarg, Trustee of
the A.S. Glikbarg Family Trust
Title: General Partner
By: /s/ Ed N. Harrison
-----------------------------------------
Name: Ed N. Harrison, Trustee of
the Ed N. Harrison Separate
Property Trust
Title: General Partner
CONTRIBUTOR: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Richard S. Ziman
----------------------------------
Name: Richard S. Ziman
Title: CEO
3
<PAGE> 4
EXHIBIT N
ARDEN REALTY LIMITED PARTNERSHIP
9100 WILSHIRE BOULEVARD
SUITE 700 EAST TOWER
BEVERLY HILLS, CALIFORNIA 90212
(310) 271-8600
FAX (310) 246-2941
September 26, 1997
Westwood Center
1100 Glendon Avenue
Suite 1400
Los Angeles, CA 90024
Attn: A.S. Glikbarg and
Ed N. Harrison
General Partners
Gentlemen:
Reference is made to that certain AGREEMENT TO CONTRIBUTE AND ESCROW
INSTRUCTIONS ("Agreement") dated this 26th day of September, 1997 by and
between WESTWOOD CENTER, a California limited partnership ("Partnership"), and
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Contributor"), and to the proposed Amended and Restated Agreement of Limited
Partnership of the Partnership which is an Exhibit thereto.
You have informed us that your Partners, both limited and general, are
concerned about their right and obligation to accept shares of common stock of
Arden Realty, Inc. ("Arden") that are not immediately saleable without
registration in lieu of their partnership interest in Contributor if they elect
to convert their Partnership Interests in the Partnership to OP Units in
Contributor.
This letter will confirm our agreement and that of Arden for the benefit
of your Partners that, if (1) any Partner elects to become an OP Unit Holder of
Contributor and (2) such Partner subsequently elects to have his or her OP
Units "Redeemed", Contributor and Arden shall be obligated to redeem such
Partner's OP Units for cash unless Arden can deliver to him or her, in lieu of
cash, shares of common stock of Arden that are either registered for resale or
immediately saleable without restriction or registration under Section 5 of the
Securities Act of 1933 in the manner and in the amount reflected in the
Contributor Partnership Agreement.
Please confirm your agreement on behalf of your Partners to the foregoing
in the space provided below for your signatures and return a fully executed
copy of this letter to the undersigned.
<PAGE> 5
Westwood Center
September 26, 1997
Page 2
We look forward to working with you toward consummating this transaction.
Very truly yours,
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partership,
By: Arden Realty, Inc.
a Maryland corporation,
Its: Sole General Partner
By:_____________________________
Victor J. Coleman,
Its: President
ARDEN REALTY, INC.
a Maryland corporation,
By:_____________________________
Victor J. Coleman,
Its: President
AGREED AND ACCEPTED:
Westwood Center
a California limited partnership
By:___________________________
A.S. Glikbarg
General Partner
Date:____________________
By:____________________________
Ed N. Harrison
General Partner
Date:_____________________
<PAGE> 1
EXHIBIT 10.13
SECOND ADDENDUM TO
AGREEMENT TO CONTRIBUTE CAPITAL
AND ESCROW INSTRUCTIONS
THIS SECOND ADDENDUM TO AGREEMENT TO CONTRIBUTE CAPITAL AND ESCROW
INSTRUCTIONS (the "Second Addendum") is executed as of October 31, 1997 by and
between Westwood Center, a California limited partnership (the "Partnership")
and Arden Realty Limited Partnership, a Maryland limited partnership
("Contributor"), with reference to the following facts:
A. Prior to the execution of this Second Addendum, the Partnership
and Contributor negotiated a form of an Agreement to Contribute Capital and
Escrow Instructions (the "Agreement to Contribute"). The Agreement to Contribute
states that it is "made and entered into this 26th day of September, 1997."
Notwithstanding the date set forth in the Agreement to Contribute, it was not
executed and delivered by the Partnership until October 31, 1997.
B. The parties have also executed an Addendum to Agreement to
Contribute Capital and Escrow Instructions (the "First Addendum"), which states
that it is "executed as of September 26, 1997."
C. The parties desire to amend the Agreement to Contribute to
clarify the dates that are the date of the Agreement, the Effective Date, the
last day of the Approval Period and the date on which escrow shall close.
NOW, THEREFORE, with reference to the foregoing recitals and in
reliance thereon and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by the
Partnership and Contributor as follows:
1. Date of the Agreement to Contribute. The introductory sentence at
the beginning of the Agreement to Contribute is amended to change the date to
October 31, 1997. All references in the Agreement to Contribute to "the date
hereof" shall mean October 31, 1997.
2. Date of the First Addendum. The introductory sentence at the
beginning the First Addendum is amended to change the date to October 31, 1997.
3. Effective Date. The parties agree that the full and complete
execution and delivery of the Agreement to
1
<PAGE> 2
Contribute occurred on October 31, 1997, and that the Effective Date (as defined
in Section 3(a)) is October 31, 1997.
4. Approval Period. The first sentence of Section 5(b) of the
Agreement to Contribute is amended to read as follows:
"Contributor shall have from the date hereof until 5:00 P.M. on December
29, 1997 (the "Approval Period") in which to approve or disapprove all
matters and things that are subject to Contributor's rights of review,
inspection and approval hereunder."
5. Closing of Escrow. The first sentence of Section 3(b) of the
Agreement to Contribute is amended to read as follows:
"Escrow shall close not later than January 13, 1997, but no more than ten
(10) business days following the expiration of the Approval Period,
provided the Contributor's Conditions Precedent to Closing as set forth in
Paragraph 8 hereof have been satisfied and the Partnership's conditions to
Closing set forth in Paragraph 9 have been satisfied."
6. The Agreement to Contribute, as supplemented and amended by the
First Addendum and this Second Addendum, shall remain in full force and effect
in accordance with its terms.
7. This Second Addendum may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.
2
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have executed this Second
Addendum as of the day and year first hereinabove written.
PARTNERSHIP: WESTWOOD CENTER
a California limited partnership
By: /s/ A. S. Glikbarg
----------------------------------------
Name: A.S. Glikbarg, Trustee of
the A.S. Glikbarg Family Trust
Title: General Partner
By:
----------------------------------------
Name: Ed N. Harrison, Trustee of
the Ed N. Harrison Separate
Property Trust
Title: General Partner
CONTRIBUTOR: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Richard S. Ziman
----------------------------------
Name: Richard S. Ziman
Title: Chairman/CEO
3
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have executed this Second
Addendum as of the day and year first hereinabove written.
PARTNERSHIP: WESTWOOD CENTER
a California limited partnership
By:
----------------------------------------
Name: A.S. Glikbarg, Trustee of
the A.S. Glikbarg Family Trust
Title: General Partner
By: /s/ Ed N. Harrison
----------------------------------------
Name: Ed N. Harrison, Trustee of
the Ed N. Harrison Separate
Property Trust
Title: General Partner
CONTRIBUTOR: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Richard S. Ziman
----------------------------------
Name: Richard S. Ziman
Title: Chairman/CEO
3
<PAGE> 1
EXHIBIT 10.14
THIRD ADDENDUM TO
AGREEMENT TO CONTRIBUTE CAPITAL
AND ESCROW INSTRUCTIONS
THIS THIRD ADDENDUM TO AGREEMENT TO CONTRIBUTE CAPITAL AND ESCROW
INSTRUCTIONS (the "Third Addendum") is executed as of January 13, 1998 by and
between Westwood Center, a California limited partnership (the "Partnership")
and Arden Realty Limited Partnership, a Maryland limited partnership
("Contributor"), with reference to the following facts:
A. The Partnership and Contributor previously executed an Agreement
to Contribute Capital and Escrow Instructions (the "Agreement to Contribute"),
an Addendum to Agreement to Contribute Capital and Escrow Instructions (the
"First Addendum"), and a Second Addendum to Agreement to Contribute Capital and
Escrow Instructions (the "Second Addendum").
B. On or about December 29, 1997, Contributor delivered notice to
the Partnership that it had approved of the Property and all matters and things
that are subject to Contributor's right of review, inspection and approval in
accordance with the provisions of Section 5(b) of the Agreement to Contribute.
Contributor also requested that the Partnership grant an extension to and
including February 2, 1998 within which to Close the transaction contemplated by
the Agreement to Contribute.
C. The parties desire to amend the Agreement to Contribute to extend
the Closing Date and to make certain other changes thereto.
NOW, THEREFORE, with reference to the foregoing recitals and in
reliance thereon and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by the
Partnership and Contributor as follows:
1. Closing of Escrow. The first sentence of Section 3(b) of the
Agreement to Contribute is amended to read as follows:
"Escrow shall close not later than January 30, 1998, provided the
Contributor's Conditions Precedent to Closing as set forth in
Paragraph 8 hereof have been satisfied and the Partnership's
conditions to Closing set forth in Paragraph 9 have been satisfied.
Notwithstanding the foregoing, Contributor shall have
1
<PAGE> 2
the right to extend the Closing to and including February 2, 1998,
in which case the amount of the Capital Contribution to be
contributed by Contributor to the Partnership shall be increased by
the amount of the cost (including any "minimum" premium) of
extending the Partnership's existing insurance policy beyond the
expiration date of January 31, 1998 through the Closing."
2. Capital Contribution. The first sentence of Section 2 of the
Agreement to Contribute is amended to read as follows:
"The amount of the capital contribution (the "Capital Contribution")
to be contributed by Contributor to the Partnership for the
Partnership Interest is the amount of Twenty-Eight Million Seven
Hundred Forty One Thousand Three Hundred Sixty Six and 86/100
Dollars ($28,741,366.86), payable as follows:"
3. Management of the Property. The Partnership shall continue to
manage the Property in the same manner as it has subsequent to the execution of
the Agreement to Contribute pursuant to its normal course of business; provided,
however, that from and after the date hereof, the Partnership shall not do any
of the following without the prior written approval of Contributor: (i) enter
into any new leases or renew or extend any existing leases beyond the scheduled
date of Closing, (ii) renew, extend or replace Service Contracts that expire
prior to the Closing other than those necessary for the continued normal
operation of the Property, (iii) incur any capital expenditure in excess of
$25,000, or (iv) enter into any new contract or commitment to contract that
extends beyond the scheduled date of Closing. No Partnership management
personnel shall be required to be terminated prior to the Closing.
4. Insurance. The Partnership shall continue to maintain its present
insurance policy through the Closing; provided, however, that if Contributor
elects to extend the Closing to and including February 2, 1998, the amount of
the Capital Contribution to be contributed by Contributor to the Partnership
shall be increased by the amount of the cost (including any "minimum" premium)
of extending the Partnership's existing insurance policy beyond the current
expiration date of January 31, 1998 through the Closing.
5. Damage to or Destruction of the Property Prior to Closing.
Section 15(a) of the Agreement to Contribute is amended to read as follows:
2
<PAGE> 3
"(a) Damage to or Destruction of Property Prior to Closing;
Risk of Loss. If prior to Closing, the Property shall sustain damage
caused by fire or other casualty that is insured and that would cost
Two Million Five Hundred Thousand Dollars ($2,500,000) or more to
repair or if any uninsured loss or casualty occurs that would cost
One Hundred Fifty Thousand Dollars ($150,000) or more to repair,
either Partnership or Contributor may respectively elect to
terminate this Agreement by written notice to the other within
fifteen (15) days after notice of such event, or at Closing,
whichever is earlier. If neither the Partnership nor Contributor so
elects to terminate its obligations under this Agreement, or if the
loss or casualty would cost less than Two Million Five Hundred
Thousand Dollars ($2,500,000) with respect to an insured casualty
and One Hundred Fifty Thousand Dollars ($150,000) with respect to an
uninsured casualty to repair, the Closing shall take place as
provided herein and the Partnership shall inure to the Partnership's
rights to insurance proceeds with respect to any unrepaired damage
(including any rental loss proceeds for periods after the Closing),
loss or casualty in question with the right to use those proceeds as
determined by Contributor, as the Partnership's general partner from
and after the Closing. The Partnership shall retain all interest in
and to the insurance proceeds that may be payable to the Partnership
on account of repaired and completed damage, but the Partnership
shall have no obligation of repair or replacement."
6. Upon the execution of this Third Amendment, Contributor shall
cause Escrow to immediately release the Deposit to the Partnership. The Deposit
shall be nonrefundable by the Partnership to Contributor except as follows:
(a) If the Closing does not occur and Contributor shall be
entitled to the return of the Deposit as provided in the Agreement
to Contribute, then the Partnership shall immediately return the
Deposit to Contributor.
(b) Notwithstanding the provisions of Section 6(a) of this
Third Addendum, in the event Contributor exercises its right to
terminate the Agreement to Contribute pursuant to Section 15(a)
thereof, if the loss or casualty is insured, then the Partnership
shall return to Contributor the Deposit less only that portion of
the Deposit representing the amount of the Partnership's deductible
on any insurance claim with respect to such loss or casualty (but
not more than the
3
<PAGE> 4
Deposit); if the loss or casualty is uninsured, then the Partnership
shall return to Contributor the Deposit less only that portion of
the Deposit in excess of the Partnership's cost to repair.
7. Section 15(j) of the Agreement to Contribute is amended to read
as follows:
"(j) 1997 and 1998 Income Tax Returns. A.S. Glikbarg and Ed N.
Harrison shall supervise the preparation of the Partnership's 1997
federal and California income tax returns (collectively, the "1997
Tax Returns") and shall have the sole authority to approve the 1997
Tax Returns. Contributor agrees that it shall execute and file on
behalf of the Partnership the 1997 Tax Returns as approved by
Messrs. Glikbarg and Harrison. With respect to the Partnership's
1998 federal and California income tax returns (collectively, the
"1998 Tax Returns"), at least thirty (30) days prior to the due date
for such returns including any extensions, Contributor shall deliver
to A.S. Glikbarg and Ed N. Harrison drafts of the Partnership's 1998
Tax Returns for their review and comment. Contributor agrees to
reasonably consider and to reasonably take into account the views
expressed by Glikbarg and Harrison with respect to the 1998 Tax
Returns."
8. The Agreement to Contribute, as supplemented and amended by the
First Addendum, the Second Addendum, and this Third Addendum, shall remain in
full force and effect in accordance with its terms.
9. This Third Addendum may be executed in any number of
counterparts, each of which so executed shall be deemed an original; such
counterparts shall together constitute but one agreement.
4
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have executed this Third
Addendum as of the day and year first hereinabove written.
PARTNERSHIP: WESTWOOD CENTER
a California limited partnership
By: /s/ A. S. Glikbarg
----------------------------------------
Name: A.S. Glikbarg, Trustee of
the A.S. Glikbarg Family Trust
Title: General Partner
By: /s/ Ed N. Harrison
----------------------------------------
Name: Ed N. Harrison, Trustee of
the Ed N. Harrison Separate
Property Trust
Title: General Partner
CONTRIBUTOR: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Victor J. Coleman
----------------------------------
Name: Victor J. Coleman
Title: President & CEO
5
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement (Form S-3 No. 333-44141) and related Prospectus of Arden Realty, Inc.
for the registration of up to $1,000,000,000 of its Common Stock and in the
Registration Statement (Form S-3 No. 333-40451) and related Prospectus of Arden
Realty, Inc. for the registration of 2,971,756 shares of its Common Stock and
Form S-8 filed on October 9, 1997 pertaining to the 1996 Stock Option and
Incentive Plan of Arden Realty, Inc. and Arden Realty Limited Partnership of our
report dated September 10, 1997 with respect to the combined statement of
revenues and certain expenses of 1996 LBA Owned Portfolio for the year ended
December 31, 1996, and the incorporation by reference therein of our report
dated August 25, 1997 with respect to the combined statement of revenue and
certain expenses of 1996 CIGNA Acquired Properties for the year ended December
31, 1996, and the incorporation by reference therein of our report dated August
25, 1997 with respect to the combined statement of revenue and certain expenses
of 1997 MetLife Acquired Properties for the year ended December 31, 1996, and
the incorporation by reference therein of our report dated August 25, 1997 with
respect to the combined statement of revenue and certain expenses of Ontario
Airport Commerce Center and Hunter Business Park for the year ended December 31,
1996, and the incorporation by reference therein of our report dated August 25,
1997 with respect to the statement of revenue and certain expenses of Sorrento
Valley Science Park for the year ended December 31, 1996, and the incorporation
by reference therein of our report dated August 25, 1997 with respect to the
statement of revenue and certain expenses of HDS Plaza for the year ended
December 31, 1996, and the incorporation by reference therein of our report
dated August 25, 1997 with respect to the statement of revenue and certain
expenses of Fountain Valley Plaza for the year ended December 31, 1996, and the
incorporation by reference therein of our report dated August 25, 1997 with
respect to the statement of revenue and certain expenses of Havengate Center for
the year ended December 31, 1996, and the incorporation by reference therein of
our report dated August 25, 1997 with respect to the statement of revenue and
certain expenses of Von Karman Corporate Center for the year ended December 31,
1996, and the incorporation by reference therein of our report dated August 25,
1997 with respect to the statement of revenue and certain expenses of Centrelake
Plaza for the year ended December 31, 1996, and the incorporation by reference
therein of our report dated August 25, 1997 with respect to the statement of
revenue and certain expenses of 150 East Colorado for the year ended December
31, 1996, and the incorporation by reference therein of our report dated
November 23, 1997 with respect to the combined statement of revenue and certain
expenses of SDK Properties for the year ended December 31, 1996, and the
incorporation by reference therein of our report dated January 21, 1998 with
respect to the statement of revenue and certain expenses of 9201 Sunset for the
year ended December 31, 1996, and the incorporation by reference therein of our
report dated October 27, 1997 with respect to the statement of revenue and
certain expenses of Activity Business Center for the year ended December 31,
1996, and the incorporation by reference therein of our report dated January 21,
1998 with respect to the statement of revenue and certain expenses of 9100
Wilshire for the year ended December 31, 1996, and the incorporation by
reference therein of our report dated May 30, 1997 with respect to the combined
statement of revenue and certain expenses of 1100 Glendon for the year ended
December 31, 1996, all of which were included in the Form 8-K of Arden Realty,
Inc. dated January 30, 1998.
/s/ Ernst & Young LLP
Los Angeles, California
January 30, 1998
