225 BUSH STREET
AGREEMENT OF PURCHASE AND SALE
This Agreement, dated as of July 19, 2000 (the "Effective Date"), is
among OAIC Bush Street, LLC, a Delaware limited liability company ("Seller"),
and Flynn Land Company, Inc., a California corporation ("Flynn") and GEM
Investors, Inc., a Delaware corporation ("GEM," together with Flynn, "Buyer").
ARTICLE I
PURCHASE AND SALE OF PROPERTY
SECTION 1.1 SALE.
Seller agrees to sell to Buyer, and Buyer agrees to purchase from
Seller, subject to the terms, covenants and conditions set forth herein, that
certain real property located at 225 Bush Street, San Francisco, CA 94102,
together with any and all rights, privileges, improvements and easements
appurtenant thereto owned by Seller, which real property is more particularly
described in an EXHIBIT A attached hereto and made a part hereof (collectively
the "Real Property"), together with the tangible personal property owned by
Seller, if any, located on the Real Property and used exclusively in the
operation or maintenance of the Real Property and described in EXHIBIT F
attached hereto, and including the items required to be delivered by Seller
under Section 8.3(d) herein (the "Personal Property"), and all right, title and
interest of Seller in any intangible personal property now or on the Closing
Date owned by Seller and used in the ownership, use or operation of the Real
Property or the Personal Property, including Seller's rights, if any, to all
building or trade names, including the right to use the name "225 Bush Street,"
(provided however, Seller makes no representation or warranty that Seller has
any rights with respect to ownership or use of such trade names), any lease and
occupancy rights (including the lessor's interest in and to the tenant leases
described in EXHIBIT B attached hereto and made a part hereof as well as any
additional tenant leases or amendments or modifications thereto approved by
Buyer or which are permitted to be entered into by Seller pursuant to this
Agreement (collectively, the "Leases"), all security deposits and prepaid rent,
if any, under the Leases and any and all guaranties, letters of credit or other
credit enhancement relating to the Leases), utility contracts, advertising
materials, plans and specifications and, all other agreements or rights relating
to the ownership, use and operation of the Real Property or the Personal
Property (including the service contracts described in EXHIBIT G attached hereto
and additional service contracts entered into after the date hereof in
accordance with this Agreement the ("Service Contracts") and the construction
contracts described in EXHIBIT H attached hereto and additional construction
contract entered into after the date hereof in accordance with this Agreement
(the "Construction Contracts") (collectively, the "Intangible Property"). The
Real Property, Personal Property and Intangible Property are collectively
referred to herein as the "Property".
SECTION 1.2 PURCHASE PRICE.
(a) The purchase price of the Property is One Hundred Fifty
Four Million Dollars ($154,000,000) (the "Purchase Price").
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(b) The Purchase Price shall be paid as follows:
(1) Upon the execution of this Agreement Buyer shall
deposit with the Title Company (as defined below), cash or other immediately
available funds in the amount of Five Hundred Thousand Dollars ($500,000)
($450,000 of which amount shall constitute the "Initial Deposit" and $50,000 of
which amount shall constitute the "Nonrefundable Payment"). The Nonrefundable
Payment shall be fully and completely earned by Seller as consideration for
entering into this Agreement with Buyer and for not marketing the Property
further prior to entering into an agreement with a potential purchaser of the
Property, and the Nonrefundable Payment shall only be refundable as specifically
provided in Section 1.2(b)(3) below and shall otherwise not be refundable under
any circumstances. If the Closing occurs, then the Nonrefundable Payment shall
be credited against the Purchase Price.
(2) If at the end of the Contingency Period Buyer elects
to proceed with the purchase of the Property Buyer shall deposit in escrow with
Chicago Title Insurance Company (the "Title Company") an all-cash payment in the
amount of One Million Five Hundred Thousand Dollars ($1,500,000) (the
"Additional Deposit," and the same, together with the Initial Deposit of
$450,000, and the "Supplemental Deposit" (as defined in Section 8.2 (b)), if
made by Buyer, shall be collectively referred to as the "Deposit").
(3) THE DEPOSIT AND THE NONREFUNDABLE PAYMENT SHALL BE
HELD IN AN INTEREST BEARING ACCOUNT AND ALL INTEREST THEREON SHALL BE DEEMED A
PART OF THE DEPOSIT AND THE NONREFUNDABLE PAYMENT. IF THE SALE OF THE PROPERTY
AS CONTEMPLATED HEREUNDER IS CONSUMMATED, THEN THE DEPOSIT AND THE NONREFUNDABLE
PAYMENT SHALL BE PAID TO SELLER AT THE CLOSING AND CREDITED AGAINST THE PURCHASE
PRICE. IF THE SALE OF THE PROPERTY IS NOT CONSUMMATED DUE TO (A) SELLER'S
DEFAULT HEREUNDER OR (B) THE FAILURE OF THE CONDITIONS FOR THE BENEFIT OF BUYER
SET FORTH IN SECTIONS 2.1(G), OR 2.1(H), OR (C) THE TERMINATION OF THIS
AGREEMENT BY BUYER UNDER SECTION 5.2, THEN, AS BUYER'S SOLE REMEDY, BUYER MAY
TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO SELLER AND RECEIVE A REFUND OF THE
DEPOSIT AND THE NONREFUNDABLE PAYMENT, IN WHICH EVENT NEITHER PARTY SHALL HAVE
ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED IN SECTIONS 6.1,
9.3 AND 9.9 BELOW, PROVIDED, HOWEVER, THAT IF THE SALE OF THE PROPERTY IS NOT
CONSUMMATED AS RESULT OF THE WILLFUL DEFAULT OF SELLER, BUYER SHALL BE ENTITLED
TO BRING AN ACTION AGAINST SELLER FOR ACTUAL DAMAGES INCURRED BY BUYER UP TO AN
AMOUNT NOT TO EXCEED THREE PERCENT (3%) OF THE PURCHASE PRICE, PROVIDED (A) ANY
CLAIM THAT BUYER MAKES AGAINST SELLER MUST BE FILED IN THE APPROPRIATE COURT OF
COMPETENT JURISDICTION WITHIN NINETY (90) DAYS AFTER SUCH TERMINATION NOTICE TO
SELLER BY BUYER AND (B) SUCH THREE PERCENT (3%) CAP SHALL NOT APPLY IN THE EVENT
THAT SELLER WILLFULLY DEFAULTS UNDER THIS AGREEMENT BY SELLING THE PROPERTY TO
ANY THIRD PARTY (OR ENTERS INTO AN AGREEMENT TO DO SO) IN BREACH OF THE TERMS
HEREOF WITHIN NINETY (90) DAYS OF THE CLOSING DATE SUBJECT TO THE LIMITATIONS
SET FORTH IN THE SECOND SENTENCE OF SECTION 9.18 BELOW. IF THE SALE OF THE
PROPERTY IS NOT CONSUMMATED DUE TO THE TERMINATION OF THE AGREEMENT BY BUYER
PURSUANT TO SECTION 8.4 OR THE TERMINATION OF THIS AGREEMENT BY BUYER UNDER
SECTION 4.1, THEN, AS BUYER'S SOLE REMEDY, BUYER MAY TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE TO SELLER AND RECEIVE A REFUND OF THE DEPOSIT AND THE
NONREFUNDABLE PAYMENT SHALL BE RETAINED BY SELLER, IN WHICH EVENT NEITHER PARTY
SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER EXCEPT AS PROVIDED IN
SECTIONS 6.1, 9.3 AND 9.9 BELOW. IF THE SALE IS NOT CONSUMMATED DUE TO ANY
DEFAULT BY BUYER HEREUNDER, THEN THE TITLE COMPANY SHALL DELIVER TO SELLER THE
NONREFUNDABLE PAYMENT AND THE DEPOSIT AS LIQUIDATED DAMAGES. THE PARTIES HAVE
AGREED THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A FAILURE TO CONSUMMATE THIS
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SALE DUE TO BUYER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE
NONREFUNDABLE PAYMENT AND THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES
THAT SELLER WOULD INCUR IN SUCH EVENT. BY PLACING THEIR INITIALS BELOW, EACH
PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE
FACT THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS
AGREEMENT WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE
FOREGOING IS NOT INTENDED TO LIMIT THE PARTIES OBLIGATIONS UNDER SECTIONS 6.1,
9.3 AND 9.9.
INITIALS: SELLER ________ BUYER _______
(4) The balance of the Purchase Price, which is One
Hundred Fifty Two Million Dollars ($152,000,000) shall be deposited by Buyer
with the Title Company and paid to Seller all in cash at the consummation of the
purchase and sale contemplated hereunder (the "Closing").
ARTICLE II
CONDITIONS
SECTION 2.1 CONDITION PRECEDENT.
Buyer's obligation to purchase the Property is conditioned upon the
following:
(a) Buyer has reviewed that certain Preliminary Report issued
by Title Company, dated July 3, 2000 under Order No. 9560955-SH (the "PTR"),
copies of the underlying documents referenced therein and that certain ALTA
Survey, last revised on March 27, 1998, prepared by Martin M. Ron & Associates,
Inc. (the "Survey").
(b) Buyer's review and approval of all Leases, Service
Contracts and Construction Contracts affecting the Property. Seller shall
furnish to Buyer copies of the Leases, Service Contracts and Construction
Contracts within five (5) days after the date Seller receives a fully executed
original of this Agreement (the "Delivery Period").
(c) Buyer's review and approval of the physical condition of
the Property.
(d) Buyer's review and approval of all zoning, land use,
building, environmental and other statutes, rules, or regulations applicable to
the Property.
(e) Subject to the provisions of the paragraph below, Buyer's
review and approval of operating statements with respect to the Property for
1999 and the partial calendar year ending on May 31, 2000, certificates of
occupancy, plans and specifications, soils and other reports, service contracts,
operating budget, invoices and other contracts or documents which will be
binding on Buyer after Closing. Seller shall make available to Buyer within the
Delivery Period copies of all such items in Seller's possession solely for
Buyer's inspection during reasonable business hours. Notwithstanding the
foregoing, Buyer's review shall not include a review of Seller's internal
economic memoranda or reports, attorney-client privileged materials or Seller's
appraisals of the Property, if any.
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(f) Buyer's review and approval of any other matters Buyer
deems relevant to the Property in its sole and absolute discretion.
(g) Buyer's receipt of the "Title Policy" (as defined in
Section 4.2) or Title Company's unconditional agreement to issue the same.
(h) The absence of any voluntary or involuntary bankruptcy
affecting Seller under applicable state or local laws.
SECTION 2.2 CONTINGENCY PERIOD.
Buyer shall have thirty (30) days from the Effective Date (such period
being referred to herein as the "Contingency Period"), to review and approve the
matters described in Sections 2.1(a)-(f) above in Buyer's sole and absolute
discretion. If Buyer determines in its sole and absolute discretion to proceed
with the purchase of the Property, then Buyer shall, before the end of the
Contingency Period, notify Seller in writing (the "Acceptance Notice") that
Buyer has approved all of the matters described in Section 2.1(a)-(f) above,
including, without limitation, all documents, agreements, surveys, reports and
other items and materials delivered to or made available to Buyer in connection
with this Agreement during the Contingency Period (the "Due Diligence
Materials"), and Buyer shall place the Additional Deposit in escrow with the
Title Company pursuant to Section 1.2(b)(2) above. If before the end of the
Contingency Period Buyer fails, for any reason or no reason in its sole and
absolute discretion, to give Seller such Acceptance Notice and deliver the
Additional Deposit, then Buyer shall be deemed not to have elected to proceed
with the purchase of the Property, this Agreement shall so terminate, the
Nonrefundable Payment shall be retained by Seller, the Deposit shall be
delivered to Buyer and neither party shall have any further rights or
obligations hereunder except as provided in Sections 6.1, 9.3 and 9.9 below.
ARTICLE III
BUYER'S EXAMINATION
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF SELLER.
Subject to the provisions of Sections 3.2 and 3.3 below, Seller hereby
makes the following representations and warranties with respect to the Property,
provided that Seller makes no representations or warranties with respect to the
matters (the "Disclosure Items") to the extent expressly set forth in Schedule 1
attached hereto or in the documentation referenced in Schedule 1 attached
hereto. Notwithstanding anything to the contrary contained herein or in any
document delivered in connection herewith, Seller shall have no liability with
respect to such Disclosure Items.
(a) Seller has not (i) made a general assignment for the
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or
suffered the filing of any involuntary petition by Seller's creditors, (iii)
suffered the appointment of a receiver to take possession of all, or
substantially all, of Seller's assets, (iv) suffered the attachment or other
judicial seizure of all, or substantially all, of Seller's assets, (v) admitted
in writing its inability to pay its debts as they come due, or (vi) made an
offer of settlement, extension or composition to its creditors generally.
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(b) Seller is not a "foreign person" as defined in Section
1445 of the Internal Revenue Code of 1986, as amended (the "Code") and any
related regulations.
(c) This Agreement (i) has been duly authorized, executed and
delivered by Seller, and (ii) does not violate any provision of any agreement or
judicial order to which Seller is a party or to which Seller or the Property is
subject.
(d) Seller has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(e) As of the Effective Date, the only Leases and amendments
thereto in force for the Property as of the date hereof are set forth in the
list attached hereto as EXHIBIT B and made a part hereof. As of the Effective
Date, the only Service Contracts that affect the Property are set forth in
EXHIBIT G attached hereto. As of the Effective Date, the only Construction
Contracts that affect the Property are set forth in EXHIBIT H attached hereto.
To the best of Seller's knowledge, there are no unrecorded agreements which will
affect the Property on the Closing Date other than the Leases, the Service
Contracts and the Construction Contracts. Unless otherwise indicated on EXHIBIT
G, all Service Contracts are terminable without penalty upon not more than
thirty (30) days prior written notice. To the best of Seller's knowledge, Seller
is not in default under the Leases, the Service Contracts or the Construction
Contracts.
(f) To the best of Seller's knowledge, there is no litigation
pending with respect to the Property (or affecting Seller and which would
adversely affect Seller's ability to perform under this Agreement) other than as
set forth in SCHEDULE 1.
(g) To the best of Seller's knowledge, except as set forth in
SCHEDULE 1 or as may be disclosed in Due Diligence Materials, Seller has
received no written notice from any governmental authority that the present use
and operation of the Property is in violation of any of the applicable law
(including, without limitation, (i) the Americans with Disabilities Act ("ADA"),
Title 24 of the California Administrative Code, and other similar federal, state
and local laws, (ii) building codes and any other laws relating to the
construction or design of the improvements on the Property, including, without
limitation, fire, safety, handicapped access, or seismic design (collectively,
"Building Codes"), and (iii) any laws relating to environmental matters (the
"Environmental Laws").
(h) Seller represents that Gregory Breskin, Vice Presdent,
and William Stolberg, Senior Asset Manager are the only persons currently within
Seller's organization with primary responsibility for the management for the
Property.
(i) Seller represents and warrants that it retained or
engaged no broker or finder instrumental in arranging or bringing about this
transaction except for Grubb & Ellis Real Estate Company ("Seller's Broker").
(j) Seller represents that after the expiration of the
Contingency Period and prior to Closing, Seller shall terminate the following
service contracts listed on EXHIBIT G attached hereto: (i) the management
agreement with Jones Lang LaSalle dated April 1, 1998; (ii) the office leasing
agreement with Grubb & Ellis Company dated April 24, 1998; and (iii) the retail
leasing agreement with CB Richard Ellis dated January 2, 1999; provided that
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Buyer acknowledges and agrees that those agreements provided for herein allow
such brokers to submit a list of tenants with which such broker was negotiating
at the time of termination of such contracts and Buyer will be obligated to pay
a commission to such broker if Buyer subsequently enters into any lease with
such tenant during the time period specified in such agreement (the "Post
Termination Obligations") and after such termination, Buyer shall assume such
Post Termination Obligations pursuant to the Assignment of Leases.
Each of the representations and warranties of Seller contained in this
Section 3.1: (1) is true as of the date of this Agreement; (2) shall be deemed
remade by Seller, and shall be true in all material respects as of the date of
Closing (as if made on and as of the Closing), subject to (A) any Exception
Matters (as defined below), (B) the Disclosure Items, and (C) other matters
expressly permitted in this Agreement or otherwise specifically approved in
writing by Buyer including, without limitation, the Due Diligence Materials; and
(3) shall survive the close of escrow as provided in Section 3.3 below.
SECTION 3.2 NO LIABILITY FOR EXCEPTION MATTERS.
As used herein, the term "Exception Matter" shall refer to a matter
disclosed to Buyer in writing or discovered by Buyer before the Closing, that
would make a representation or warranty of Seller contained in this Agreement
materially untrue or incorrect, including, without limitation, matters disclosed
in writing to Buyer by Seller or by any other person. If Buyer obtains knowledge
of any Exception Matter after the date hereof, Buyer may terminate this
Agreement and receive a return of the Deposit upon written notice to Seller
within five (5) days after Buyer learns of such Exception Matter if Seller
elects not to cure or remedy any such Exception Matter. Buyer shall promptly
notify Seller in writing of any Exception Matter of which Buyer obtains
knowledge before the Closing. If Buyer obtains knowledge of any Exception Matter
before the Closing, but nonetheless elects to proceed with the acquisition of
the Property, Buyer shall consummate the acquisition of the Property subject to
such Exception Matter and Seller shall have no liability with respect to such
Exception Matter, notwithstanding any contrary provision, covenant,
representation or warranty contained in this Agreement. If Buyer elects to
terminate this Agreement on the basis of any Exception Matter, Buyer shall so
notify Seller in writing within five (5) days following Buyer's discovery of the
Exception Matter, and the Deposit shall be returned to Buyer and the
Nonrefundable Payment shall be retained by Seller. Buyer's failure to give such
notice within such five (5) day period shall be deemed a waiver by Buyer of such
Exception Matter. Upon any such termination of this Agreement, neither party
shall have any further rights or obligations hereunder, except as provided in
Sections 6.1, 9.3, and 9.9 below. Notwithstanding the foregoing, if Buyer elects
to terminate this Agreement on the basis that Seller has breached a material
representation or warranty at the time of the Effective Date and for which
Seller had actual knowledge on the Effective Date, then Buyer shall have the
remedies set forth in Section 1.2(b)(3) above in connection with such default by
Seller, even if the same constitutes an Exception Matter but subject to the
limitations set forth therein and in Section 9.18. Seller shall have no
obligation to cure or remedy any Exception Matter, and, subject to Buyer's right
to terminate this Agreement as set forth above and the remedies set forth in
Section 1.2(b)(3), in the event that Seller has breached a material
representation or warranty at the time of the Effective Date and for which
Seller had actual knowledge on the Effective Date, Seller shall have no
liability whatsoever to Buyer with respect to any Exception Matters.
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SECTION 3.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties of Seller and Buyer contained herein
shall survive for a period of nine (9) months after the Closing, except that
Buyer's representations and warranties in Sections 3.5(d), (e) and (f) shall
survive indefinitely. Any claim which Buyer or Seller may have at any time
against the other for a breach of any such representation or warranty (other
than those contained in Sections 3.5(d), (e) and (f)), whether known or unknown,
which is not asserted (i) by written notice to Seller or Buyer within such nine
(9) month period and (ii) by Seller's or Buyer's filing a legal action with
respect thereto whether such nine (9) month period shall not be valid or
effective, and the other party shall have no liability with respect thereto.
SECTION 3.4 SELLER'S KNOWLEDGE.
For purposes of this Agreement and any document delivered at Closing,
whenever the phrase "to the best of Seller's knowledge" or the "knowledge" of
Seller or words of similar import are used, they shall be deemed to refer to the
current actual knowledge of Gregory Breskin, Vice President, and William
Stolberg, Senior Asset Manager.
SECTION 3.5 REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Seller as follows:
(a) Buyer represents and warrants to Seller that this
Agreement and all documents executed by Buyer which are to be delivered to
Seller at Closing do not and at the time of Closing will not violate any
provision of any agreement or judicial order to which Buyer is a party or to
which Buyer is subject.
(b) Buyer represents and warrants to Seller that Buyer has
not (i) made a general assignment for the benefit of creditors, (ii) filed any
voluntary petition in bankruptcy or suffered the filing of any involuntary
petition by Buyer's creditors, (iii) suffered the appointment of a receiver to
take possession of all, or substantially all, of Buyer's assets, (iv) suffered
the attachment or other judicial seizure of all, or substantially all, of
Buyer's assets, (v) admitted in writing its inability to pay its debts as they
come due, or (vi) made an offer of settlement, extension or composition to its
creditors generally.
(c) Buyer is duly formed, validly existing and in good
standing under the laws of the State of California. Buyer has duly authorized,
executed and delivered this Agreement.
(d) Buyer is not a party in interest with respect to any
employee benefit or other plan within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), which is subject to ERISA or Section 4975 of the Code and which is an
investor in Seller.
(e) Other than Seller's Broker, as defined below, Buyer has
had no contact with any broker or finder instrumental in arranging or bringing
about this transaction with respect to the Property.
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Each of the representations and warranties of Buyer contained in this Section
shall be deemed remade by Buyer as of the Closing and shall survive the Closing
as provided in Section 3.3 above.
SECTION 3.6 BUYER'S INDEPENDENT INVESTIGATION.
(a) Buyer acknowledges and agrees that it has been given or
will be given before the end of the Contingency Period, a full opportunity to
inspect and investigate each and every aspect of the Property, either
independently or through agents of Buyer's choosing, including, without
limitation:
(1) All matters relating to title, together with all
governmental and other legal requirements such as taxes, assessments, zoning,
use permit requirements and building codes.
(2) The physical condition and aspects of the Property,
including, without limitation, the interior, the exterior, the square footage
within the improvements on the Real Property and within each tenant space
therein, the structure, seismic aspects of the Property, the paving, the
utilities, and all other physical and functional aspects of the Property. Such
examination of the physical condition of the Property shall include an
examination for the presence or absence of Hazardous Materials, as defined
below, which shall be performed or arranged by Buyer at Buyer's sole expense.
For purposes of this Agreement, "Hazardous Materials" shall mean inflammable
explosives, radioactive materials, asbestos, polychlorinated biphenyls, lead,
lead-based paint, under and/or above ground tanks, hazardous materials,
hazardous wastes, hazardous substances, oil, or related materials, which are
listed or regulated in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Sections 6901, et seq.), the
Resources Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et
seq.), the Clean Water Act (33 U.S.C. Section 1251, et seq.), the Safe Drinking
Water Act (14 U.S.C. Section 1401, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Section 1801, et seq.), and the Toxic Substance
Control Act (15 U.S.C. Section 2601, et seq.), the California Hazardous Waste
Control Law (California Health and Safety Code Section 25100, et seq.), the
Porter-Cologne Water Quality Control Act (California Water Code Section 13000,
et seq.), and the Safe Drinking Water and Toxic Enforcement Act of 1986
(California Health and Safety Code Section 25249.5, et seq.) and any other
applicable federal, state or local laws.
(3) Any easements and/or access rights affecting the
Property.
(4) The leases and all matters in connection therewith,
including, without limitation, the ability of the tenants to pay the rent and
the economic viability of the tenants.
(5) The service contracts and any other documents or
agreements of significance affecting the Property.
(6) All problems or defects arising out of or in any way
related to whether the Property or the operating systems thereof will experience
any problems or defects as a result of Year 2000 Problems, as defined below.
"Year 2000 Problems" shall mean the failure of computer software and hardware
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systems and equipment containing embedded computer chips to correctly receive,
transmit, process, manipulate, store, retrieve, retransmit or utilize data and
information due to the occurrence of the Year 2000 or the inclusion of dates on
or about January 1, 2000.
(7) All other matters of material significance affecting
the Property.
(b) BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT SELLER IS
SELLING AND BUYER IS PURCHASING THE PROPERTY ON AN "AS IS WITH ALL FAULTS" BASIS
AND THAT BUYER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS TO ANY
MATTERS CONCERNING THE PROPERTY EXCEPT AS EXPRESSLY SET FORTH IN SECTION 3.1
ABOVE OR IN THE DEED OR BILL OF SALE, INCLUDING WITHOUT LIMITATION, (i) the
quality, nature, adequacy and physical condition and aspects of the Property,
including, but not limited to, the structural elements, seismic aspects of the
Property, foundation, roof, appurtenances, access, landscaping, parking
facilities and the electrical, mechanical, HVAC, plumbing, sewage, and utility
systems, facilities and appliances, the square footage within the improvements
on the Real Property and within each tenant space therein, (ii) the quality,
nature, adequacy, and physical condition of soils, geology and any groundwater,
(iii) the existence, quality, nature, adequacy and physical condition of
utilities serving the Property, (iv) the development potential of the Property,
and the Property's use, habitability, merchantability, or fitness, suitability,
value or adequacy of the Property for any particular purpose, (v) the zoning or
other legal status of the Property or any other public or private restrictions
on use of the Property, (vi) the compliance of the Property or its operation
with any applicable codes, laws, regulations, statutes, ordinances, covenants,
conditions and restrictions of any governmental or quasi-governmental entity or
of any other person or entity, (vii) the presence of Hazardous Materials on,
under or about the Property or the adjoining or neighboring property, (viii) the
quality of any labor and materials used in any improvements on the Real
Property, (ix) the condition of title to the Property, (x) the leases, service
contracts, or other agreements affecting the Property (xi) the problems or
defects arising out of or in any way related to the Year 2000 Problems, and
(xii) economics of the operation of the Property.
Buyer's Initials: _______
SECTION 3.7 RELEASE.
(a) Without limiting the above, and except for (x) the
representations and warranties of Seller contained in Section 3.1 hereof and
Seller's covenants specifically set forth in this Agreement but subject to the
limitations and qualifications set forth herein respecting such representations,
warranties and covenants, (y) fraud or criminal acts of Seller or its agents or
employees, or (z) any release of Hazardous Materials in violation of applicable
law during Seller's period of ownership of the Property resulting from the acts
of Seller, Buyer on behalf of itself and its successors and assigns waives its
right to recover from, and forever releases and discharges, Seller, Seller's
affiliates, Seller's investment manager, the partners, trustees, beneficiaries,
shareholders, members, directors, officers, employees and agents of each of
them, and their respective heirs, successors, personal representatives and
assigns (collectively, the "Seller Related Parties"), from any and all demands,
claims, legal or administrative proceedings, losses, liabilities, damages,
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penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the Property, this Agreement, and the transactions
contemplated hereby, including, without limitation, (i) the physical condition
of the Property including, without limitation, all structural and seismic
elements, all mechanical, electrical, plumbing, sewage, heating, ventilating,
air conditioning and other systems, the environmental condition of the Property
and Hazardous Materials on, under or about the Property, (ii) any law or
regulation applicable to the Property, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U.S.C. Sections 6901, et seq.), the Resources Conservation and
Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.), the Clean Water Act (33
U.S.C. Section 1251, et seq.), the Safe Drinking Water Act (14 U.S.C. Section
1401, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801, et seq.), and the Toxic Substance Control Act (15 U.S.C. Section 2601, et
seq.), the California Hazardous Waste Control Law (California Health and Safety
Code Section 25100, et seq.), the Porter-Cologne Water Quality Control Act
(California Water Code Section 13000, et seq.), and the Safe Drinking Water and
Toxic Enforcement Act of 1986 (California Health and Safety Code Section
25249.5, et seq.) and any other federal, state or local law and (iii) problems
or defects arising out of or in any way related to Year 2000 Problems.
(b) In connection with Section 3.7(a) above, Buyer expressly
waives the benefits of 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."
Buyer's Initials: _______
SECTION 3.8 SURVIVAL.
The provisions of this Article III shall survive the Closing subject to
the limitations and qualifications contained in such provisions.
ARTICLE IV
TITLE
SECTION 4.1 CONDITIONS OF TITLE.
At the Closing, Seller shall convey title to the Property to Buyer by
grant deed (the "Deed") subject to no exceptions other than:
(a) Interests of tenants under the Leases;
(b) Non-delinquent liens for real estate taxes and
assessments; and
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(c) Any exceptions disclosed by the preliminary title report
and any amendments or supplements thereto or the Due Diligence Materials, and
any other exceptions to title which would be disclosed by an inspection and/or
survey of the Property; provided however, Seller shall discharge, as they relate
to the Property, (i) that certain Deed of Trust dated April 8, 1998 by Seller as
trustor, Chicago Title Insurance Company as trustee, and Salomon Brothers Realty
Corp. ("Salomon") as beneficiary, recorded April 8, 1998, Reel H107, Image 248,
Series No. 98-G331657-00 in the Official Records of the County of San Francisco
(the "Official Records"); (ii) that certain Assignment of Rents & Leases
recorded April 8, 1998 to Salomon, in Reel H107, Image 249, Series No.
98-0G331658-00 in the Official Records; (iii) that certain financing statement
recorded April 8, 1998 by Seller as debtor and Salomon as secured party in Reel
H107, Image 250, Series No. 98-0G331659-00; and (iv) any monetary lien that
arises after the Effective Date and prior to the Closing Date due to any act of
Seller and any deed of trust entered into by Seller.
If there are additional exceptions to title that were not disclosed to
Buyer prior to the expiration of the Contingency Period and that are disclosed
to Buyer after the Contingency Period and prior to Closing, Buyer shall have, as
Buyer's sole rights and remedies, the right, in Buyer's sole discretion, to
approve such additional exceptions and proceed with the Closing or to terminate
this Agreement as provided below. Buyer shall notify Seller in writing on or
before three (3) business days after receiving notice of any additional
exceptions to title as to whether Buyer approves or disapproves such exceptions.
Buyer's failure to give Seller written notice of Buyer's approval during such
three (3) business day period shall be deemed an election by Buyer to approve
the title exceptions. If Buyer disapproves the additional exceptions, then this
Agreement shall terminate and the Deposit shall be returned to Buyer, the
Nonrefundable Payment shall be retained by Seller and neither party shall have
any further rights or obligations hereunder except as provided in Sections 6.1,
9.3 and 9.9 below. If Buyer approves the additional title exceptions, such
additional title exceptions shall become additional Conditions of Title.
All of the foregoing exceptions shall be referred to collectively as
the "Conditions of Title" except for those items listed in Section 4.1(c)(i),
(ii), (iii) and (iv) above. By acceptance of the Deed and the Closing of the
purchase and sale of the Property, (i) Buyer agrees it is assuming for the
benefit of Seller all of the obligations of Seller with respect to the
Conditions of Title from and after the Closing, except for the unrecorded
management agreement disclosed of record by that certain Assignment and
Subordination of Management Agreement executed by Pacific Resources Development,
Inc., Northwest Asset Management Company, Inc., and Shanghai Commercial Bank
Ltd. and recorded September 12, 1997, Reel G966, Image 735, Series No. 6-214438
in the Official Records and (ii) Buyer agrees that Seller shall have
conclusively satisfied its obligations with respect to title to the Property.
The provisions of this Section shall survive the Closing.
SECTION 4.2 EVIDENCE OF TITLE.
Delivery of title in accordance with the foregoing shall be evidenced
by the willingness of the Title Company to issue, at Closing, an ALTA Form B
(1970, amended 10/17/70) extended coverage owner's title insurance policy, or
equivalent form acceptable to Buyer in the face amount of the Purchase Price
showing title to the Real Property vested in Buyer, subject to the Conditions of
Title (the "Title Policy"). Buyer shall have prepared, at Buyer's cost, an
updated Survey of the Property necessary to support the issuance of the Title
Policy. Buyer shall provide Seller with a copy of such updated Survey at no cost
to Seller.
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ARTICLE V
RISK OF LOSS AND INSURANCE PROCEEDS
SECTION 5.1 MINOR LOSS.
Buyer shall be bound to purchase the Property for the full Purchase
Price as required by the terms hereof, without regard to the occurrence or
effect of any damage to the Property or destruction of any improvements thereon
or condemnation of any portion of the Property, provided that: (a) the cost to
repair any such damage or destruction, or the diminution in the value of the
remaining Property as a result of a partial condemnation, does not exceed Five
Hundred Thousand Dollars ($500,000) and (b) upon the Closing, there shall be a
credit against the Purchase Price due hereunder equal to the amount of any
insurance proceeds or condemnation awards collected by Seller as a result of any
such damage or destruction or condemnation, plus the amount of any insurance
deductible, less any sums expended by Seller toward the restoration or repair of
the Property. If the proceeds or awards have not been collected as of the
Closing, then such proceeds or awards shall be assigned to Buyer, except to the
extent needed to reimburse Seller for sums expended to repair or restore the
Property, and Seller shall retain the rights to such proceeds and awards.
SECTION 5.2 MAJOR LOSS.
If the amount of the damage or destruction or condemnation as specified
above exceeds Five Hundred Thousand Dollars ($500,000), then Buyer may, at its
option to be exercised within five (5) days of Seller's notice of the occurrence
of the damage or destruction or the commencement of condemnation proceedings,
either terminate this Agreement or consummate the purchase for the full Purchase
Price as required by the terms hereof. If Buyer elects to terminate this
Agreement or fails to give Seller notice within such five (5) day period that
Buyer will proceed with the purchase, then the Deposit shall be returned to
Buyer, the Nonrefundable Payment shall be retained by Seller, and neither party
shall have any further rights or obligations hereunder except as provided in
Sections 6.1, 9.3 and 9.9 below. If Buyer elects to proceed with the purchase,
then upon the Closing, there shall be a credit against the Purchase Price due
hereunder equal to the amount of any insurance proceeds or condemnation awards
collected by Seller as a result of any such damage or destruction or
condemnation, plus the amount of any insurance deductible, less any sums
expended by Seller toward the restoration or repair of the Property. If the
proceeds or awards have not been collected as of the Closing, then such proceeds
or awards shall be assigned to Buyer, except to the extent needed to reimburse
Seller for sums expended to repair or restore the Property, and Seller shall
retain the rights to such proceeds and awards.
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ARTICLE VI
BROKERS AND EXPENSES
SECTION 6.1 BROKERS.
At Closing, Seller shall pay the commission due, if any, to Seller's
Broker, which shall be paid pursuant to a separate agreement between Seller and
Seller's Broker. If any other person brings a claim for a commission or finder's
fee based upon any contact, dealings or communication with Buyer or Seller, then
the party through whom such person makes his claim shall defend the other party
(the "Indemnified Party") from such claim, and shall indemnify the Indemnified
Party and hold the Indemnified Party harmless from any and all costs, damages,
claims, liabilities or expenses (including without limitation, reasonable
attorneys' fees and disbursements) incurred by the Indemnified Party in
defending against the claim. The provisions of this Section 6.1 shall survive
the Closing or, if the purchase and sale is not consummated, any termination of
this Agreement.
SECTION 6.2 EXPENSES.
Except as provided in Sections 4.2 above and 8.5(b) below, each party
hereto shall pay its own expenses incurred in connection with this Agreement and
the transactions contemplated hereby.
ARTICLE VII
LEASES AND OTHER AGREEMENTS
SECTION 7.1 BUYER'S APPROVAL OF NEW LEASES AND AGREEMENTS AFFECTING
THE PROPERTY.
(a) Between the Effective Date and the end of the Contingency
Period, Seller shall not enter into any new lease, service contract or
construction contract or other agreement materially affecting the Property, or
modify or terminate any existing lease, service contract, construction contract
or other agreement materially affecting the Property, without first providing
not less than three (3) business days notice thereof to the Buyer (recognizing
that the Buyer shall have no right to approve or disapprove any such action)
during the Contingency Period.
(b) Between the end of the Contingency Period and the
Closing, Seller shall not enter into any new lease, service contract,
construction contract or other agreement which will affect the Property or be
binding upon Buyer, or modify or terminate the same, without first obtaining
Buyer's approval, in Buyer's sole and absolute discretion. If Buyer fails to
give Seller notice of its approval or disapproval of any such proposed action
within three (3) business days after Seller notifies Buyer of Seller's desire to
take such action, then Buyer shall be deemed to have withheld its approval.
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SECTION 7.2 TENANT IMPROVEMENT COSTS, LEASING COMMISSIONS AND FREE
RENT.
With respect to any leasing commissions, tenant improvement costs,
move-in- allowances, tenant improvement allowances and base building improvement
work specifically required to be paid, performed or credited by the landlord
under the Leases for the current terms of those Leases listed on EXHIBIT B as of
the Effective Date, Seller shall be responsible for all such costs. To the
extent such costs are not paid for by Seller prior to the Closing Date, then
Buyer shall assume such responsibilities pursuant to the Assignment of Leases
and Buyer shall receive a credit against the Purchase Price for the remaining
amount left unpaid by Seller for such items. Buyer shall be responsible for
leasing commissions, tenant improvement costs, allowances and base building
improvement work specifically required under the Leases for (a) extension or
expansion options exercised after the Effective Date for those Leases set forth
in EXHIBIT B attached hereto and (b) any new Lease or amendment to Lease
approved by Buyer or entered into by Seller for which Buyer has received notice
in accordance with Section 7.1(a) above after the Effective Date. To the extent
there are any construction contracts for base building improvements or tenant
improvement work for the current term of any Leases in effect as of the date of
this Agreement (the "Construction Contracts"), then Buyer shall assume, pursuant
to the Assignment of Leases, all such contracts and Buyer shall receive a credit
against the Purchase Price for the remaining amount left unpaid by Seller on
such Construction Contracts as of the Closing Date. To the extent that
additional costs are incurred, but not accounted for, under such Construction
Contracts as a result of any government approvals required for the work
contracted for under the Construction Contracts, then Buyer shall assume all
responsibility for such additional costs. Except as provided herein, on and
after the Closing, Seller shall have no further obligations with respect to any
leases or other agreements affecting the Property, including, without
limitation, tenant improvement work, leasing commissions, Construction Contracts
and free rent. The provisions of this Section shall survive the Closing.
SECTION 7.3 TENANT NOTICES.
Buyer hereby expressly agrees, confirms and acknowledges that Buyer
shall immediately after Closing deliver to each tenant of the Property a signed
statement acknowledging that Buyer is the new owner of the Property and that
Buyer has received and is responsible for all such tenants' security deposits
providing an exact dollar amount of each security deposit (to the extent Buyer
has received a credit for the same under this Agreement or to the extent such
security deposits have been transferred or assigned). Buyer also hereby
expressly agrees, confirms and acknowledges that Buyer shall be liable for (and
Buyer hereby expressly assumes all liability for) all such security deposits
that are transferred from Seller to Buyer regardless of whether notice is given
to the tenant of the Property in accordance with the provisions of this Section
7.3. The provisions of this Section 7.3 shall survive the Closing.
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ARTICLE VIII
CLOSING AND ESCROW
SECTION 8.1 ESCROW INSTRUCTIONS.
Upon execution of this Agreement, the parties hereto shall deposit an
executed counterpart of this Agreement with the Title Company, and this
instrument shall serve as the instructions to the Title Company as the escrow
holder for consummation of the purchase and sale contemplated hereby. Seller and
Buyer agree to execute such reasonable additional and supplementary escrow
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however, that in the event of any
conflict between the provisions of this Agreement and any supplementary escrow
instructions, the terms of this Agreement shall control.
SECTION 8.2 CLOSING.
(a) The Closing hereunder shall be held and delivery of all
items to be made at the Closing under the terms of this Agreement shall be made
at the offices of the Title Company on August 31, 2000 before 12:00 noon local
time, or such other earlier date and time as Buyer and Seller may mutually agree
upon in writing (the "Closing Date"). Except as provided in Section 8.2(b)
below, such date and time may not be extended without the prior written approval
of both Seller and Buyer.
(b) Buyer shall have the one (1) time option to extend the
Closing Date to September 28, 2000, provided that not less than five (5) days
prior to the original Closing Date, Buyer (a) deposits with the Title Company
cash or other immediately available funds in the amount of Five Hundred Thousand
Dollars ($500,000) (the "Supplemental Deposit") and (b) gives Seller written
notice of its option to extend to September 28, 2000. Such Supplemental Deposit
shall be deemed as part of the Deposit, as such term is defined in Section
1.2(b)(3). The Supplemental Deposit shall be fully and completely earned by the
Seller for granting such extension and the Supplemental Deposit shall only be
refundable as specifically provided in Section 1.2(b)(3) and Section 3.2 herein
and shall otherwise not be refundable under any circumstances.
SECTION 8.3 DEPOSIT OF DOCUMENTS.
(a) At or before the Closing, Seller shall deposit into
escrow the following items:
(1) the duly executed and acknowledged Deed conveying
the Real Property to Buyer subject to the Conditions of Title;
(2) four (4) duly executed counterparts of the Bill of
Sale in the form attached hereto as EXHIBIT C (the "Bill of Sale");
(3) four (4) duly executed counterparts of an Assignment
and Assumption of Leases, Service Contracts and Warranties in the form attached
hereto as EXHIBIT D pursuant to the terms of which Buyer shall assume all of
Seller's obligations under the Leases, Service Contracts and the Construction
Contracts (the "Assignment of Leases");
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(4) an affidavit pursuant to Section 1445(b)(2) of the
Federal Code, and on which Buyer is entitled to rely, that Seller is not a
"foreign person" within the meaning of Section 1445(f)(3) of the Federal Code;
and
(5) California 597-W Certificate.
(b) At or before Closing, Buyer shall deposit into escrow the
following items:
(1) funds necessary to close this transaction;
(2) four (4) duly executed counterparts of the Bill of
Sale; and
(3) four (4) duly executed counterparts of the
Assignment of Leases.
(c) Seller and Buyer shall each deposit such other
instruments as are reasonably required by the Title Company or otherwise
required to close the escrow and consummate the acquisition of the Property in
accordance with the terms hereof. Seller and Purchaser hereby designate Title
Company as the "Reporting Person" for the transaction pursuant to Section
6045(e) of the Internal Revenue Code and the regulations promulgated thereunder
and agree to execute such documentation as is reasonably necessary to effectuate
such designation.
(d) Seller shall deliver to Buyer originals of the leases,
copies of the tenant correspondence files and originals of any other items which
Seller was required to furnish Buyer copies of or make available at the Property
pursuant to Section 2.1(e) above, except for Seller's general ledger and other
internal books or records which shall be retained by Seller, within five (5)
business days after the Closing Date. Seller shall deliver to Buyer a set of
keys to the Property on the Closing Date.
SECTION 8.4 ESTOPPEL CERTIFICATES.
(a) If in accordance with Article II of this Agreement Buyer
elects to proceed with the purchase of the Property, then Seller shall use its
reasonable efforts to obtain estoppel certificates from each tenant of the
Property in the form attached hereto as EXHIBIT E or, if a tenant's lease
requires a different form, in the form required by the tenant's lease. It shall
be a condition to Buyer's obligation to close the sale and purchase of the
Property that on or before the Closing, Buyer is able to obtain an estoppel
certificate in the form described above from NBC Internet and the other tenants
occupying seventy percent (70%) (the "Required Percentage") of the remaining
area of the Property actually rented to tenants.
(b) If the conditions contained in Section 8.4(a) above and
Section 8.4(c) below are not satisfied, then Buyer may, by written notice given
to Seller before the Closing, elect to terminate this Agreement and receive a
refund of the Deposit or waive said condition. If Buyer so elects to terminate
this Agreement, the Nonrefundable Payment shall be retained by Seller and
neither party shall have any further rights or obligations hereunder except as
provided in Section 6.1 above and Sections 9.3 and 9.9 below.
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(c) If in accordance with Article II of this Agreement, Buyer
elects to proceed with the purchase of the Property, then Seller shall use its
reasonable efforts to obtain estoppel certificates from the contractors for the
Construction Contracts stating only the following: (i) the total amount due
under the Construction Contracts; (ii) the total amount paid as of the date of
the estoppel; and (iii) there are no defaults of Seller under such Construction
Contracts. It shall be a condition to Buyer's obligation to close the sale and
purchase of the Property that on or before the Closing, Buyer is able to obtain
estoppel certificates under each of the Construction Contracts in the form
described above. If Buyer so elects to terminate this Agreement for failure to
obtain such estoppel certificates, Buyer shall receive a refund of the Deposit
and the Nonrefundable Payment shall be retained by Seller and neither party
shall have any further rights or obligations hereunder except as provided in
Section 6.1 above and Sections 9.3 and 9.9 below.
SECTION 8.5 PRORATIONS.
(a) Rents, including, without limitation, percentage rents,
if any, and any additional charges and expenses payable under tenant leases, all
as and when actually collected (whether such collection occurs prior to, on or
after the Closing Date); real property taxes and assessments; water, sewer and
utility charges; amounts payable under any service contracts; annual permits
and/or inspection fees (calculated on the basis of the period covered); and any
other expenses of the operation and maintenance of the Property, shall all be
prorated as of 12:01 a.m. on the date the Deed is recorded, on the basis of a
365-day year. Each of Buyer and Seller shall be responsible for the credits and
reimbursements provided in Section 7.2. After deduction for collection costs,
any sums collected by Buyer from a tenant after the Closing shall be applied
first to the current month's rent due of such tenant and thereafter, to the
oldest sums delinquent from such tenant. Buyer shall use reasonable efforts to
collect such delinquent rents but shall not be required to institute any action
to terminate occupancy or otherwise. Seller retains the rights to collect any
such delinquent rents from tenants after Closing. The amount of any security
deposits made under tenant leases shall be credited against the Purchase Price.
Security deposits in the form of letters of credit shall either be reissued in
the name of Buyer at Closing, or Seller shall assign its rights therein to Buyer
at Closing, and will reasonably cooperate with Buyer post Closing, at no expense
to Seller, to facilitate the transfer to Buyer. Seller shall use reasonable
efforts to cause all security deposits in the form of letters of credit to be
amended or reissued in the name of Buyer as soon as possible after the Closing,
and Buyer shall cooperate with Seller in such efforts. Upon delivery to Buyer of
the reissued or amended letter of credit, Seller's obligations with respect to
such letter of credit shall immediately terminate, and, from and after such
delivery of the reissued or amended letter of credit, Buyer shall indemnify
Seller and hold harmless and defend Seller from and against any and all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) arising out of the letter of credit. Seller shall be
entitled to request return of any utility deposits with respect to the Property
(but shall not be entitled to a credit therefore). It shall be Buyer's
responsibility to transfer utility service for the Property as of the Closing
Date. Buyer agrees to release, indemnify and hold Seller harmless from all
claims, liability, costs or expenses arising out of or relating to the utility
service for the Property after the Closing Date. The indemnification obligation
herein shall survive Closing. Seller reserves all right, title and interest in
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any refund obtained from any taxing authority as a result of a pending tax
appeal made by Seller prior to the date of Closing related to the period prior
to Closing; provided, however, Seller shall remit to Buyer, the proportionate
share owed to tenants for amounts in excess of amounts previously paid by such
tenants attributable to the period of Seller's ownership of the Property. Seller
and Buyer hereby agree that if any of the aforesaid prorations and credits
cannot be calculated accurately on the Closing Date, then the same shall be
calculated as soon as reasonably practicable after the Closing Date and either
party owing the other party a sum of money based on such subsequent proration(s)
or credits shall promptly pay said sum to the other party.
(b) Seller shall pay all transfer taxes applicable to the
sale. Buyer shall pay all the costs of obtaining any title insurance policy, the
cost of any endorsements and all of the escrow fee. Recording charges and any
other expenses of the escrow for the sale shall be paid by Buyer and Seller in
accordance with customary practice as determined by the Title Company.
(c) The provisions of this Section 8.5 shall survive the
Closing.
SECTION 8.6 Compliance with Commercial Water Conservation Ordinance.
The City and County of San Francisco has adopted a Commercial Water Conservation
Ordinance ("CWCO") pursuant to which commercial buildings in San Francisco are
subject to certain water conservation requirements. In the event that Buyer
approves the Property at the conclusion of the Contingency Period, Buyer, at its
sole cost and expense, agrees to be responsible for compliance with CWCO in
accordance with Chapter 13A of the San Francisco Building Code.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES.
Any notices required or permitted to be given hereunder shall be given
in writing and shall be delivered (a) in person, (b) by certified mail, postage
prepaid, return receipt requested, (c) by facsimile with confirmation of
receipt, or (d) by a commercial overnight courier that guarantees next day
delivery and provides a receipt, and such notices shall be addressed as follows:
To Buyer: Flynn Land Company, Inc.
One Flynn Center
825 Van Ness Avenue, Suite 304
San Francisco, CA 94109
Attention: Mr. Gregory Flynn
Telephone: (415) 673-5900
Fax No.: (415) 673-6093
With a copy to: Gem Investors, Inc.
900 North Michigan Avenue
Chicago, Illinois 60611
Attention: Mr. Craig Caffarelli
Telephone: (312) 915-2402
Fax No.: (312) 915-2901
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With a copy to: Pircher, Nichols & Meeks
1999 Avenue of the Stars
Los Angeles, CA 90067
Attention: Randall Single
Telephone: (310) 201-8951
Fax No.: (310) 201-8922
To Seller: Ocwen Financial Corporation
1675 W. Palm Beach Lakes Blvd., Suite 900
West Palm Beach, FL 33401
Attention: Secretary
Telephone: (561) 882-8559
Fax No. (561) 681-8174
with a copy to: Ocwen Capital Corporation
1675 W. Palm Beach Lakes Blvd.
The Forum, Suite 400
West Palm Beach, FL 33401
Attention: William H. Stolberg and Todd Reed, Esq.
Telephone: (561) 682-8000
Fax No. (561) 682-8163
with a copy to: Orrick, Herrington & Sutcliffe LLP
400 Sansome Street
San Francisco, CA 94111
Attention: Michael H. Liever, Esq.
Telephone: (415) 773-5808
Fax No.: (415) 773-4285
To Title Company: Chicago Title Company
388 Market Street, Thirteenth Floor
San Francisco, California 94111
Attention: Nikki Carr
Fax No.: (415) 434-2176
or to such other address as either party may from time to time specify in
writing to the other party. Any notice shall be effective only upon delivery.
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SECTION 9.2 ENTIRE AGREEMENT.
This Agreement, together with the Exhibits hereto, contains all
representations, warranties and covenants made by Buyer and Seller and
constitutes the entire understanding between the parties hereto with respect to
the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Agreement together with the Exhibits hereto.
SECTION 9.3 ENTRY AND INDEMNITY.
In connection with any entry by Buyer, or its agents, employees or
contractors onto the Property, Buyer shall give Seller reasonable advance notice
of such entry and shall conduct such entry and any inspections in connection
therewith so as to minimize, to the greatest extent possible, interference with
Seller's business and the business of Seller's tenants and otherwise in a manner
reasonably acceptable to Seller. Without limiting the foregoing, prior to any
entry to perform any on-site testing, Buyer shall give Seller written notice
thereof, including the identity of the company or persons who will perform such
testing and the proposed scope of the testing. Seller shall approve or
disapprove, in Seller's sole discretion, the proposed testing within three (3)
business days after receipt of such notice. If Seller fails to respond within
such three (3) business day period, Seller shall be deemed to have disapproved
the proposed testing. If Buyer or its agents, employees or contractors take any
sample from the Property in connection with any such approved testing, Buyer
shall provide to Seller a portion of such sample being tested to allow Seller,
if it so chooses, to perform its own testing. Seller or its representative may
be present to observe any testing or other inspection performed on the Property.
Upon the request of Seller, Buyer shall promptly deliver to Seller copies of any
reports relating to any testing or other inspection of the Property performed by
Buyer or its agents, employees or contractors. Buyer shall not contact any
governmental authority without first obtaining the prior written consent of
Seller thereto, and Seller, at Seller's election, shall be entitled to have a
representative on any phone or other contact made by Buyer to a governmental
authority and present at any meeting by Buyer with a governmental authority.
Buyer shall maintain, and shall assure that its contractors maintain, public
liability and property damage insurance in amounts and in form and substance
adequate to insure against all liability of Buyer and its agents, employees or
contractors, arising out of any entry or inspections of the Property pursuant to
the provisions hereof, and Buyer shall provide Seller with evidence of such
insurance coverage upon request by Seller. Buyer shall indemnify and hold Seller
harmless from and against any costs, damages, liabilities, losses, expenses,
liens or claims (including, without limitation, reasonable attorney's fees)
arising out of or relating to any entry on the Property by Buyer, its agents,
employees or contractors in the course of performing the inspections, testings
or inquiries provided for in this Agreement. The foregoing indemnity shall
survive beyond the Closing, or, if the sale is not consummated, beyond the
termination of this Agreement.
SECTION 9.4 TIME.
Time is of the essence in the performance of each of the parties'
respective obligations contained herein.
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SECTION 9.5 INTENTIONALLY DELETED.
SECTION 9.6 ASSIGNMENT.
Buyer's rights and obligations hereunder shall not be assignable
without the prior written consent of Seller; provided however, Buyer shall have
the right to assign this Agreement without Seller's prior consent to an entity
that is controlled directly or indirectly (i.e. "controlled" means the ability
to direct, affirmatively or negatively by veto, the management and policies of
the entity in question) by either Flynn or GEM or Flynn and GEM together (or an
entity controlled by them), and in which Flynn or Gem or Flynn and Gem (or an
entity controlled by them), together own an aggregate 20% equity interest,
directly or indirectly. Buyer shall in no event be released from any of its
obligations or liabilities hereunder in connection with any assignment and shall
provide Seller with prior notice of any assignment. Seller shall have the right
to reasonably approve any assignment and assumption agreement made in connection
with any assignment. Without limiting the above, in no event shall Buyer have
the right to assign its rights or obligations hereunder to any party which could
not make the representation and warranty contained in subsection 3.5(d) above,
and in connection with any assignment pursuant to the terms hereof, the assignee
shall reconfirm in a written instrument acceptable to Seller and delivered to
Seller prior to the assignment said representation and warranty as applied to
the assignee. Subject to the provisions of this Section, this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns.
SECTION 9.7 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
SECTION 9.8 GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
SECTION 9.9 CONFIDENTIALITY AND RETURN OF DOCUMENTS.
Buyer and Seller shall each maintain as confidential any and all
material obtained about the other or, in the case of Buyer, about the Property,
this Agreement or the transactions contemplated hereby, and shall not disclose
such information to any third party. This provision shall survive the Closing or
any termination of this Agreement.
SECTION 9.10 INTERPRETATION OF AGREEMENT.
The article, section and other headings of this Agreement are for
convenience of reference only and shall not be construed to affect the meaning
of any provision contained herein. Where the context so requires, the use of the
singular shall include the plural and vice versa and the use of the masculine
shall include the feminine and the neuter. The term "person" shall include any
individual, partnership, joint venture, corporation, trust, unincorporated
association, any other entity and any government or any department or agency
thereof, whether acting in an individual, fiduciary or other capacity.
21
<PAGE>
SECTION 9.11 LIMITED LIABILITY.
The obligations of Seller are intended to be binding only on the
property of Seller and shall not be personally binding upon, nor shall any
resort be had to, the private properties of any of its trustees, officers,
beneficiaries, directors, members, or shareholders, or of its investment
manager, the general partners, officers, directors, members, or shareholders
thereof, or any employees or agents of Seller or its investment manager. Subject
to the other terms and provisions herein, including, without limitation, those
of Section 9.18, the provisions of this Section 9.11 shall not be construed to
prohibit Buyer from pursuing the proceeds of this transaction to the extent
allowed under applicable law, to the extent that Buyer has a valid claim against
such assets pursuant to Section 3.3 herein which was not satisfied from the
assets of Seller.
SECTION 9.12 AMENDMENTS.
This Agreement may be amended or modified only by a written instrument
signed by Buyer and Seller.
SECTION 9.13 NO RECORDING.
Neither this Agreement or any memorandum or short form thereof may be
recorded by Buyer.
SECTION 9.14 DRAFTS NOT AN OFFER TO ENTER INTO A LEGALLY BINDING
CONTRACT.
The parties hereto agree that the submission of a draft of this
Agreement by one party to another is not intended by either party to be an offer
to enter into a legally binding contract with respect to the purchase and sale
of the Property. The parties shall be legally bound with respect to the purchase
and sale of the Property pursuant to the terms of this Agreement only if and
when the parties have been able to negotiate all of the terms and provisions of
this Agreement in a manner acceptable to each of the parties in their respective
sole discretion, including, without limitation, all of the Exhibits and
Schedules hereto, and both Seller and Buyer have fully executed and delivered to
each other a counterpart of this Agreement, including, without limitation, all
Exhibits and Schedules hereto.
SECTION 9.15 INTENTIONALLY DELETED.
SECTION 9.16 NO PARTNERSHIP.
The relationship of the parties hereto is solely that of Seller and
Buyer with respect to the Property and no joint venture or other partnership
exists between the parties hereto. Neither party has any fiduciary relationship
hereunder to the other.
SECTION 9.17 NO THIRD PARTY BENEFICIARY.
The provisions of this Agreement are not intended to benefit any third
parties.
22
<PAGE>
SECTION 9.18 LIMITATIONS ON LIABILITY.
Notwithstanding anything to the contrary contained herein, after the
Closing the maximum aggregate liability of Seller, and the maximum aggregate
amount which may be awarded to and collected by Buyer under this Agreement
(including, without limitation, for any breach of representation and warranty
contained herein), and any and all documents executed pursuant hereto or in
connection herewith (collectively the "Other Documents") including, without
limitation, the Deed, the Bill of Sale and the Assignment of Leases, shall under
no circumstances whatsoever exceed three percent (3%) of the Purchase Price. In
no event shall any party be liable for any indirect, consequential, special or
punitive damages on account of such party's breach of any covenant,
representation or warranty contained in this Agreement or any certificate
delivered in connection with this Agreement.
SECTION 9.19 EXCHANGE.
Buyer may consummate the purchase of the Property as part of a
so-called like kind exchange (the "Exchange") pursuant to ss.1031 of the
Internal Revenue Code of 1986, as amended (the "Code"), provided that: (a)
Closing shall not be delayed or affected by reason of the Exchange nor shall the
consummation or accomplishment of the Exchange be a condition precedent or
condition subsequent to Buyer's obligations under this Agreement; (b) Buyer
shall effect the Exchange through an assignment of this Agreement, or its rights
under this Agreement, to a qualified intermediary, provided that such assignment
shall not release Buyer of its obligations hereunder and that all Closing
documents, including, without limitation, the Deed, Bill of Sale and Assignment
of Leases shall be directly between Buyer and Seller; (c) Seller shall not be
required to take an assignment of the purchase agreement for other property or
be required to acquire or hold title to, or any beneficial interest in, any real
property for purposes of consummating the Exchange; and (d) Buyer shall pay any
additional costs or expenses that would not otherwise have been incurred by
Buyer or Seller had Buyer not consummated its purchase through the Exchange.
Seller shall not by this Agreement or acquiescence to the Exchange have its
rights under this Agreement affected or diminished in any manner or be
responsible for compliance with or be deemed to have warranted to Buyer that the
Exchange in fact complies with ss.1031 of the Code and Buyer, will rely solely
and exclusively on its own tax advice with respect thereto. Seller shall have
the right to review and approve any documents to be executed by Seller in
connection with the Exchange, provided that Seller shall have no obligation to
execute any documents or to undertake any action by which Seller would or might
incur any liability or obligation not otherwise provided for in the other
provisions of this Agreement. Buyer shall indemnify and defend Seller and hold
Seller harmless from and against any and all claims, damages, liabilities,
losses, costs and expenses, including, without limitation, court costs and
reasonable attorneys' fees and paralegals' fees and disbursements (including,
but not limited to, all such fees and disbursements at trial, upon appeal, and
on any petition for review and/or in connection with an action for recission),
arising out of or in any way connected with the Exchange that Seller would not
have incurred but for the Exchange. In no event shall the Closing Date be
delayed as a result of Buyer's election to effect an exchange in connection with
Buyer's acquisition of the Property pursuant to this section, or as a result of
Seller's entering into the Buyer's exchange agreement, and the consummation of
the exchange shall not be a condition to Closing. The provisions of this section
shall survive the Closing.
23
<PAGE>
SECTION 9.20 SURVIVAL.
Except as expressly set forth to the contrary herein, no
representations, warranties, covenants or agreements of the Seller contained
herein shall survive the Closing.
SECTION 9.21 SURVIVAL OF ARTICLE IX.
The provisions of this Article IX shall survive the Closing.
24
<PAGE>
The parties hereto have executed this Agreement as of the respective
dates written below.
SELLER: OAIC Bush Street, LLC,
a Delaware limited liability company
By: /s/ GREG BRESKIN
--------------------------
Name: Greg Breskin
Its:
---------------------------
BUYER: GEM INVESTORS, Inc., a Delaware corporation
By: /s/
--------------------------
Its:
--------------------------
FLYNN LAND COMPANY, INC., a California
corporation
By: /s/
--------------------------
Its:
--------------------------
25
<PAGE>
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A Real Property Description
Exhibit B List of Tenant Leases
Exhibit C Bill of Sale
Exhibit D Assignment of Leases, Service Contracts and Warranties
Exhibit E Estoppel Certificate
Exhibit F Tangible Personal Property
Exhibit G List of Service Contracts
Exhibit H List of Construction Contracts
SCHEDULES
Schedule 1 Disclosure Items
<PAGE>
EXHIBIT A
REAL PROPERTY DESCRIPTION
A-1
<PAGE>
EXHIBIT B
LIST OF TENANT LEASES
B-1
<PAGE>
EXHIBIT C
BILL OF SALE
----------------------------------------
This Bill of Sale (the "Bill of Sale") is made and entered into
____________, 2000, by and between OAIC Bush Street, LLC, a Delaware limited
liability company ("Assignor"), and_____________, a _______________
("Assignee").
In consideration of the sum of Ten Dollars ($10) and other good and
valuable consideration paid by Assignee to Assignor, the receipt and sufficiency
of which are hereby acknowledged by Assignor, Assignor does hereby assign,
transfer, convey and deliver to Assignee, its successors and assigns, free and
clear of any liens or encumbrances created by, through or under Assignor, all
items of tangible personal property, if any, owned by Assignor and situated upon
and used exclusively in connection with the land described on the attached
EXHIBIT A (the "Land"), the improvements located thereon (the "Improvements"),
and described on the attached EXHIBIT B, but specifically excluding any such
personal property in Seller's management office and any and all personal
property owned by tenants or otherwise considered the property of tenants under
any leases affecting the Land or Improvements (the "Tangible Personal Property")
and any intangible personal property owned by Assignor and used in the
ownership, use or operation of the Land, Improvements or the Tangible Personal
Property, including Assignor's rights, if any, to all building or trade names,
including the right to use the name "225 Bush Street," provided however, Seller
makes no representation or warranty that Seller has any rights with respect to
ownership or use of such trade names (the "Intangible Personal Property,"
together with the Tangible Personal Property, the "Personal Property").
This Bill of Sale is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on EXHIBIT C,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
THAT CERTAIN AGREEMENT OF PURCHASE AND SALE DATED _______________, 2000, BY AND
BETWEEN ASSIGNOR AND ASSIGNEE (THE "AGREEMENT"), ASSIGNOR HAS NOT MADE, DOES NOT
MAKE AND SPECIFICALLY 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 NATURE, QUALITY OR CONDITIONS OF THE
PERSONAL PROPERTY, (B) THE INCOME TO BE DERIVED FROM THE PERSONAL PROPERTY, (C)
THE SUITABILITY OF THE PERSONAL PROPERTY FOR ANY AND ALL ACTIVITIES AND USES
WHICH ASSIGNEE MAY CONDUCT THEREON, (D) THE COMPLIANCE OF OR BY THE PERSONAL
PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY
APPLICABLE GOVERNMENTAL AUTHORITY OR BODY, (E) THE HABITABILITY, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PERSONAL PROPERTY, OR (F) ANY OTHER
MATTER WITH RESPECT TO THE PERSONAL PROPERTY. ASSIGNEE FURTHER ACKNOWLEDGES AND
AGREES THAT, HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PERSONAL PROPERTY,
ASSIGNEE IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PERSONAL PROPERTY AND
NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY ASSIGNOR, EXCEPT AS
C-1
<PAGE>
SPECIFICALLY PROVIDED IN THE AGREEMENT. ASSIGNEE FURTHER ACKNOWLEDGES AND AGREES
THAT ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PERSONAL
PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT ASSIGNOR HAS NOT MADE
ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION. ASSIGNEE
FURTHER ACKNOWLEDGES AND AGREES THAT THE SALE OF THE PERSONAL PROPERTY AS
PROVIDED FOR HEREIN IS MADE ON AN "AS IS, WHERE IS" CONDITION AND BASIS "WITH
ALL FAULTS," EXCEPT AS SPECIFICALLY PROVIDED IN THE AGREEMENT.
The obligations of Assignor are subject to the limitations of liability
set forth in Section 9.11 of the Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Bill of Sale
to be executed on the date and year first above written.
ASSIGNOR: OAIC Bush Street, LLC,
a Delaware limited liability company
By: /s/ GREG BRESKIN
-----------------------------
Name: Greg Breskin
Its:
-----------------------------
ASSIGNEE: ____________________,
a ______________________
By: /s/
-----------------------------
Its:
-----------------------------
By: /s/
-----------------------------
Its:
-----------------------------
C-2
<PAGE>
EXHIBIT D
ASSIGNMENT OF LEASES, SERVICE CONTRACTS
AND WARRANTIES
-------------------------------
This Assignment of Lease, Service Contracts and Warranties (this
"Assignment") is made and entered into _______________, 2000, by and between
OAIC Bush Street, LLC, a Delaware limited liability company ("Assignor"), and
____________, a ______________ ("Assignee").
For good and valuable consideration paid by Assignee to Assignor, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
does hereby assign, transfer, set over and deliver unto Assignee all of
Assignor's right, title, and interest in (i) those certain leases (the "Leases")
listed on EXHIBIT A, attached hereto and made a part hereof for all purposes
except for Seller's right to collect delinquent rent and other delinquent sums
owing under such Leases for the period prior to the date hereof, (ii) those
certain service contracts, equipment leases, tenant improvement agreements,
Construction Contracts (as defined in the Agreement) and leasing agreements (the
"Contracts") listed on EXHIBIT B, if any, attached hereto and made a part hereof
for all purposes, and (iii) those certain warranties held by Assignor (the
"Warranties") listed on EXHIBIT C, attached hereto and made a part hereof for
all purposes.
This Assignment is made subject, subordinate and inferior to the
easements, covenants and other matters and exceptions set forth on EXHIBIT D,
attached hereto and made a part hereof for all purposes.
ASSIGNEE ACKNOWLEDGES AND AGREES, BY ITS ACCEPTANCE HEREOF, THAT,
EXCEPT AS EXPRESSLY PROVIDED IN THAT CERTAIN AGREEMENT OF PURCHASE AND SALE,
DATED AS OF _______________, 2000, BY AND BETWEEN ASSIGNOR AND ASSIGNEE (THE
"AGREEMENT"), THE LEASES, THE CONTRACTS AND THE WARRANTIES ARE CONVEYED "AS IS,
WHERE IS" AND IN THEIR PRESENT CONDITION WITH ALL FAULTS, AND THAT ASSIGNOR HAS
NOT MADE, DOES NOT MAKE AND SPECIFICALLY 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 THE NATURE, QUALITY OR
CONDITION OF THE LEASES, THE CONTRACTS OR THE WARRANTIES, THE INCOME TO BE
DERIVED THEREFROM, OR THE ENFORCEABILITY, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF THE LEASES, THE CONTRACTS OR THE WARRANTIES.
Except as otherwise expressly provided in the Agreement, by accepting
this Assignment and by its execution hereof, Assignee assumes the payment and
performance of, and agrees to pay, perform and discharge, all the debts, duties
and obligations to be paid, performed or discharged from and after the date
hereof, (a) by the "landlord" or the "lessor" under the terms, covenants and
conditions of the Leases, including, without limitation, brokerage commissions
and compliance with the terms of the Leases relating to tenant improvements and
security deposits, (b) by the owner under the Contracts and/or the Warranties,
and (c) of the Post Termination Obligations as defined in the Agreement.
Assignee agrees to indemnify, hold harmless and defend Assignor from and against
any and all claims, losses, liabilities, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) resulting by reason of the
failure of Assignee to pay, perform or discharge any of the debts, duties or
obligations assumed or agreed to by Assignee hereunder. Assignor agrees to
indemnify Assignee and hold harmless and defend Assignee from and against any
and all claims, damages, liabilities, losses, costs and expenses (including,
D-1
without limitation, reasonable attorney's fees) resulting from any default by
Assignor with respect to Assignor's obligations accruing for the period prior to
the date hereof, as owner under the service contracts and equipment leases,
excluding any such debts, duties or obligations arising out of or in any way
related to the physical, environmental or structural condition of the Property,
as such term is defined in the Agreement.
The obligations of Assignor are subject to the limitations of liability
set forth in Section 9.11 of the Agreement.
All of the covenants, terms and conditions set forth herein shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
to be executed on the day and year first above written.
ASSIGNOR: OAIC Bush Street, LLC,
a Delaware limited liability company
By: /s/ GREG BRESKIN
-----------------------------
Name: Greg Breskin
Its:
-----------------------------
ASSIGNEE: ____________________,
a ______________________
By: /s/
-----------------------------
Its:
-----------------------------
By: /s/
-----------------------------
Its:
-----------------------------
D-2
<PAGE>
EXHIBIT E
TENANT ESTOPPEL CERTIFICATE
TO: ___________________________
___________________________
___________________________
Attn: ____________________
Re: Lease, dated as of ________, 19___, between
________________, a ____________, as tenant ("Tenant"),
and ________________, a _______________, as landlord
("Landlord"), covering certain premises known by the
street address Suite ____ 225 Bush Street, in the City of
San Francisco, County of San Francisco, State of
California (the "Leased Premises"), as amended as noted
on attached SCHEDULE A (collectively, the "Lease")
Gentlemen:
The undersigned Tenant hereby represents, warrants and certifies to
_________________ ("[LANDLORD/BUYER/LENDER]") that:
1. The Lease has not been modified, changed, altered or amended in any
respect, either orally or in writing, except as may be indicated on SCHEDULE A
annexed hereto, and constitutes the entire agreement between Tenant and Landlord
affecting Tenant leasing of the Leased Premises. A true and correct copy of the
Lease is attached as SCHEDULE B. The Lease is in full force and effect and is
not subject to any contingencies or conditions not set forth in the Lease.
2. The term of the Lease commenced on ________________ and will expire
on _________________; the Tenant has ____ successive options to renew the Lease
term, each for an additional period of ___ years.
3. The monthly base rent payable by Tenant under the Lease is
$_________. Tenant has paid all fixed and additional rent and other sums which
are due and payable under the Lease through the date hereof, and Tenant has not
made and will not make any prepayments of fixed rent for more than one month in
advance. There are no presently unexpired rental concessions or abatements due
under the Lease except as set forth on SCHEDULE A annexed hereto. Tenant has no
credits, offsets, abatements, defenses, counterclaims or deductions against any
rental or other payments due under the Lease or with respect to its performance
of the other terms and conditions of the Lease, and has asserted no claims
against Landlord.
4. Tenant has paid to Landlord as a security deposit in the amount of
$____________. Tenant has not made any other the payments to Landlord as a
security deposit, advance or prepaid rent.
E-1
<PAGE>
5. Landlord has completed, and, if required under the Lease, paid for,
any and all tenant work required under the Lease and Tenant has accepted the
Leased Premises. Tenant is not entitled to any further payment or credit for
tenant work.
6. To Tenant's best knowledge, Landlord is not in default in the
performance of any of the terms of the Lease, nor is there now any fact or
condition which, with notice or lapse of time or both, will become such a
default. Tenant has not delivered to Landlord any notice of default with respect
to the Landlord's obligations under the Lease.
7. Tenant is in actual possession of the entire Leased Premises and,
to Tenant's best knowledge, is not in any respect in default under any of the
terms and conditions of the Lease, nor is there now any fact or condition which,
with notice or lapse of time or both, will become such a default. Tenant has not
received from Landlord any notice of default with respect to the Tenant
obligations under the Lease.
8. Tenant has not assigned, transferred, mortgaged or otherwise
encumbered its interest under the Lease, nor subleased any of the Leased
Premises, nor permitted any person or entity to use the Leased Premises, nor
permitted any person or entity to use the Leased Premises, except as otherwise
indicated on SCHEDULE A annexed hereto.
9. Except as expressly provided in the Lease, Tenant
(i) does not have any right to renew or extend the term of the
Lease;
(ii) does not have any right to cancel or surrender the Lease
prior to the expiration of the term of the Lease;
(iii) does not have any option or rights of first refusal or first
offer to purchase or lease all or any part of the Leased Premises or
the real property of which the Leased Premises are a part;
(iv) does not have any right, title or interest with respect to
the Leased Premises other than as lessee under the Lease, and
(v) does not have any right to relocate into other property owned
by Landlord or any of Landlord's affiliates.
10. There has not been filed by or against Tenant a petition in
bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors,
any petition seeking reorganization or arrangement under the bankruptcy laws of
the United States, or any state thereof, or any other action brought under said
bankruptcy laws with respect to Tenant.
11. If Tenant is required to provide insurance coverage under the
Lease, Tenant has not given or received written notice that Tenant insurance
coverage will be canceled or will not be renewed.
E-2
<PAGE>
12. To Tenant's best knowledge, all systems, elements and components of
the Leased Premises are in working order and repair and sound operating
condition. To Tenant's best knowledge, Tenant's use and occupancy of the Leased
Premises complies with all applicable building, zoning, land us, environmental,
anti-pollution, health, fire, safety, access accommodations for the physically
handicapped, subdivision, energy and resource conservation and similar laws,
statues, rules, regulations and ordinances, and all covenants, conditions and
restrictions applicable to the Leased Premises. Tenant has not received any
notice, citation or other claim alleging any violation of any such law, statute,
rule, regulation, ordinance, covenant, condition or restriction.
13. To the best knowledge of Tenant, any and all brokerage and leasing
commissions relating to and/or resulting from Tenant's execution and delivery of
the Lease and occupancy of the Leased Premises have been paid in full.
14. The individual executing this Tenant Estoppel Certificate on behalf
of Tenant represents and warrants that he has the power and the authority to
execute this Tenant Estoppel Certificate on behalf of Tenant.
15. [LANDLORD/BUYER/LENDER] has advised Tenant that
[LANDLORD/BUYER/LENDER] will rely upon the truth of this certification in
acquiring the Leased Premises. This Tenant Estoppel Certificate shall inure to
the benefit of [LANDLORD/BUYER/LENDER] and its respective nominees, successors,
assigns, participants and designees and shall be binding upon Tenant and its
successors and assigns.
Dated this ___ day of ________, 2000
TENANT:
_____________, a_______________
By: /s/
--------------------------------
Its:
------------------------------
E-3
<PAGE>
EXHIBIT F
TANGIBLE PERSONAL PROPERTY
F-1
<PAGE>
EXHIBIT G
LIST OF SERVICE CONTRACTS
G-1
<PAGE>
EXHIBIT H
LIST OF CONSTRUCTION CONTRACTS
H-1
<PAGE>
SCHEDULE 1
DISCLOSURE ITEMS
Natural hazards described in the following California code sections
(the "Natural Hazard Laws") may affect the Property: (A) Govt. Code Section
8589.3 (Special Flood Hazard Area); (B) Govt. Code Section 8589.4 (Inundation
Area); (C) Govt. Code Section 51183.5 (Fire Hazard Severity Zone); (D) Public
Resource Code Section 2621.9 (Earthquake Fault Zone); (E) Public Resource Code
Section 2694 (Seismic Hazard Zone); and (F) Public Resource Code Section 4136
(Wildland Area). Seller's Broker shall execute and deliver to Buyer a Natural
Hazards Disclosure Statement with respect to the foregoing matters (the "Natural
Hazards Disclosure Statement"). Buyer acknowledges and agrees that Buyer will
independently evaluate and investigate whether any or all of such Natural
Hazards affect the Property, and Seller shall have no liabilities or obligations
with respect thereto. Prior to the expiration of the Contingency Period, Buyer
shall execute and deliver to Seller the Natural Hazards Disclosure Statement.
BUYER ACKNOWLEDGES AND REPRESENTS THAT BUYER HAS EXTENSIVE EXPERIENCE ACQUIRING
AND CONDUCTING DUE DILIGENCE REGARDING COMMERCIAL PROPERTIES. THIS PROVISION IS
AN ESSENTIAL ASPECT OF THE BARGAIN BETWEEN THE PARTIES.
o Asbestos Survey Report dated September 18, 1998 prepared by ATC
Associated Inc.
o Final Report for Asbestos Abatement Procedures and Project
Oversight 20th, 21st and 22nd floor dated October 18, 1999 prepared
by ATC Associated Inc.
o Final Report for Asbestos Abatement Procedures and Project
Oversight 12th, and 13st floors dated September 22, 1999 prepared
by ATC Associated Inc.
o Bulk Sampling Report, Floor 1and Mezzanine dated June 9, 1999
prepared by ATC Associated Inc.
o Bulk Sampling Report, Wells Fargo Bank dated June 10, 1999 prepared
by ATC Associated Inc.
o Bulk Sampling Report, Floor 19 dated June 10, 1999 prepared by ATC
Associated Inc.
o Bulk Sampling Report, Floor 20, 21 & 22 dated March 15, 1999
prepared by ATC Associated Inc.
o Bulk Sampling Report, Floor 8 and 9 dated September 3, 1999
prepared by ATC Associated Inc.
o Bulk Sampling Report, Floor 12 and 13 dated June 10, 1999 prepared
by ATC Associated Inc.
o Draft Phase I Environmental Site Assessment dated May 2000 prepared
by Hygienetics Environmental Services, Inc.
o Draft report of building electrical power distribution analysis
prepared by Dunham & Associates completed in May 2000.
o Air Quality Inspection and Auditaire Installation dated June 11,
1999 prepared by Healthy Buildings International, Inc.
S-1
<PAGE>
o HBI Reinspection Report dated April 10, 2000 prepared by Healthy
Buildings International, Inc.
o Dillingham & Murphy had an HVAC chase relocated through their copy
room. An amendment to reduce the premises square footage in Suite
600 and Suite 790 by approximately 75 square feet in total needs to
be prepared and finalized.
o A lease termination has been verbally agreed with tenant Stephen
Isaacs to vacate Suite 1439 (796 SF) by July 31, 2000. A lease
termination agreement is being prepared for execution.
o Environmental Science Associates under Section 5(d) of their lease
engaged Deloitte & Touche to audit the operating and tax expenses
for the 1998expense year. Deloitte & Touche, in a letter dated June
22, 2000 to ESA, summarized five areas that they do not think are
consistent with the Tenant's base year. Landlord received a letter
summarizing these inconsistencies on July 13, 2000. Landlord does
not agree with the conclusions of Deloitte & Touche and a response
is to be prepared. The requested amount of the refund to tenant is
$9,391.
o On June 14, 2000, a leak occurred in the SmithGroup space in Suite
1100 due to construction on the 12th floor. The cost from the water
damage calculated by the tenant is $3,353.92 not including the
rebuild of the Stark Villa Architectural Model. The Landlord
considers the matter an insurance issue between the Tenant and the
construction contractor (Skyline Construction). The tenant is
working directly with the contractor for a resolution to the
matter.
S-2
<PAGE>
FIRST AMENDMENT TO
AGREEMENT OF PURCHASE AND SALE
225 BUSH STREET
THIS AGREEMENT ("AGREEMENT") is made as of August 18, 2000, among OAIC
Bush Street, LLC, a Delaware limited liability company ("SELLER"), and Flynn
Land Company, Inc., a California corporation ("FLYNN") and GEM Investors, Inc.,
a Delaware corporation ("GEM," together with Flynn, "BUYER").
R E C I T A L S
Seller and Buyer are parties to that certain purchase agreement
captioned "AGREEMENT OF PURCHASE AND SALE", dated as of July 19, 2000 (the
"PURCHASE AGREEMENT"), providing for, among other things, the purchase and sale
of that certain land and improvements located at 225 Bush Street, in the City of
San Francisco, State of California, as more particularly described in such
Purchase Agreement, all upon the terms and conditions set forth therein. Unless
otherwise defined herein, all capitalized terms in this Agreement shall have the
meaning set forth in the Purchase Agreement.
Buyer and Seller desire to make certain modifications to such Purchase
Agreement.
NOW, THEREFORE, in consideration of the respective promises contained
in this Agreement, Buyer and Seller agree as follows:
1. CLOSING DATE. Section 8.2(a) of the Purchase Agreement is hereby
amended so that the Closing Date shall be September 28, 2000, subject to Section
8.4(d). Section 8.2(b) of the Purchase Agreement is hereby intentionally deleted
in its entirety.
2. ESTOPPEL CERTIFICATES. Section 8.4 of the Purchase Agreement is
hereby amended to include the following language as Section 8.4(d):
"(d) If Seller has not obtained such estoppel certificates as
discussed in Sections 8.4(a) and 8.4(c) above, and Seller reasonably
determines that it will be able to obtain such estoppel certificates,
then Seller may elect to extend the Closing Date by twenty nine (29)
calendar days (the "ESTOPPEL EXTENSION PERIOD") so as to occur on
October 27, 2000, provided Seller delivers written notice to Buyer of
such election prior to September 22, 2000. During the Estoppel
Extension Period, Seller shall have a one-time right to accelerate the
Closing Date so as to occur five (5) business days from delivery of
written notice to Buyer that Seller has obtained such estoppel
certificates, and Seller has in fact obtained such estoppel
certificates."
3. CONTINGENCY PERIOD. Section 2.2 of the Purchase Agreement is hereby
amended so that the Contingency Period shall expire at 5:00 p.m., Pacific time
on Tuesday, September 5, 2000.
1
<PAGE>
4. ADDITIONAL DEPOSIT. Section 1.2(b)(2) of the Purchase Agreement is
hereby amended so that the Additional Deposit shall be increased to Two Million
Dollars ($2,000,000.00).
5. ENTIRE AGREEMENT; NO MODIFICATIONS; CONFLICT WITH PURCHASE
AGREEMENT. The Purchase Agreement as amended by this Agreement constitutes the
entire agreement of the parties with respect to the transactions contemplated
therein and supersedes any prior correspondence, memoranda, understandings,
offers, negotiations and agreements, oral or written. In the event of a conflict
between the terms of this Agreement and the terms of the Purchase Agreement, the
terms of this Agreement shall control.
6. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SELLER: OAIC Bush Street, LLC,
a Delaware limited liability company
By: /s/ GREG BRESKIN
------------------------------
Name: Greg Breskin
Its: Vice President
BUYER: GEM INVESTORS, Inc., a Delaware corporation
By: /s/ CRAIG CAFFARELLI
------------------------------
Craig Caffarelli
Its: Vice President
FLYNN LAND COMPANY, INC., a California
corporation
By: /s/ GREGORY G. FLYNN
------------------------------
Gregory G. Flynn
Its:
------------------------------
2
<PAGE>
SECOND AMENDMENT
TO
225 BUSH STREET
AGREEMENT OF PURCHASE AND SALE
THIS SECOND AMENDMENT TO 225 BUSH AGREEMENT OF PURCHASE AND
SALE is entered into as of this __ day of September, 2000 by and between OAIC
California Partnership, L.P., a California limited partnership ("Seller"), and
Flynn Land Company, Inc., a California corporation ("Flynn") and GEM Investors,
Inc., a Delaware corporation ("GEM" together with Flynn the "Buyer").
RECITALS
A. Seller and Buyer have previously entered into that certain
Agreement of Purchase and Sale 225 Bush Street, dated as of July 19, 2000, as
amended by that certain First Amendment to Agreement of Purchase and Sale 225
Bush Street dated as of August 18, 2000 (collectively the "Original Agreement").
B. Seller and Buyer now desire to amend the Original Agreement
as more particularly set forth herein.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. All capitalized terms used herein and not defined herein
shall have the meanings given such terms in the Original Agreement.
2. As of the date hereof, all of the conditions precedent
specified in Sections 2.1(a)-(f) are deemed to have been satisfied, Buyer is
deemed to have given the Acceptance Notice, as provided in Section 2.2 of the
Original Agreement, and Buyer shall no longer have any right to terminate the
Original Agreement pursuant to said Section 2.2. Buyer shall deposit the
Additional Deposit in escrow within one (1) business day of the execution of
this Second Amendment by both parties hereto.
3. The Purchase Price, as specified in section 1.2(a), is
hereby reduced to One Hundred and Forty Six Million Dollars ($146,000,000). The
balance of the Purchase Price as described in section 1.2(b)(4) is hereby
reduced to One Hundred and Forty Four Million Dollars ($144,000,000).
4. The Closing Date, as specified in Section 8.2(a), is
extended to October 31, 2000.
5. In the event that on or prior to the Closing Date Seller
has not entered into the "Staples Lease", as defined below, One Million Five
Hundred Thousand Dollars ($1,500,000) of the Purchase Price (the "Staples
Holdback") shall not be paid to Seller at the Closing but instead shall be held
<PAGE>
in an interest bearing escrow account pursuant to mutually acceptable escrow
instructions consistent with this Section which shall provide that (i) at any
time after the Closing Date and prior to the date that is thirty (30) days after
the Closing Date that Seller delivers to Buyer the Staples Lease duly executed
by Staples, Inc., Buyer, as owner of the Property, shall execute the Staples
Lease and the Staples Holdback plus all interest accruing thereon shall be
immediately released to Seller, and (ii) in the event that on or prior to the
date that is thirty (30) days after the Closing Date, the Seller has not
satisfied the condition set forth in clause (i) above, the Staples Holdback plus
all interest accruing thereon shall immediately be released to Buyer. For
purposes of this paragraph the "Staples Lease" shall be deemed to be a lease
with Staples, Inc., that conforms in all material respects to the form attached
as Exhibit A, at a minimum rental rate per rentable square foot per year as
follows:
--------------------------------------------------------------------------------
Lease Year Rent per rentable square foot per year
--------------------------------------------------------------------------------
1-3 $52.00
--------------------------------------------------------------------------------
4-7 $57.00
--------------------------------------------------------------------------------
8-10 $62.00
--------------------------------------------------------------------------------
11-15 (option period) $68.00
--------------------------------------------------------------------------------
As provided in Section 7.2 of the Original Agreement, Buyer shall pay all tenant
improvement costs and leasing commissions due under the Staples Lease.
Notwithstanding the foregoing provisions of this paragraph 5, the release of the
Staples Holdback shall be subject to the proration provisions set forth in
paragraph 6 below. All material modifications to the form of the Staples Lease
attached as Exhibit A shall be subject to the approval of Buyer, which may be
given or withheld in Buyer's sole and absolute discretion. By way of example,
but without limitation, the following items shall be deemed to be material
changes in the Staples Lease: (i) any change in the term, (ii) any reduction in
the premises below 20,090 rentable square feet or any increase in the premises
above 20,800 rentable square feet, (iii) the granting of any additional option
terms, the modification of the existing option rights or the granting of any
expansion rights, (iv) any increase in the tenant improvement allowance or any
other increase in any tenant inducement, (v) any change in the tenant's expense
sharing or reimbursement obligations (other than changes resulting merely from a
change in the rentable square footage of the premises consistent with clause
(ii) above), (vi) any change in the rent structure that results in the rent for
any year during the initial ten year term of the Staples Lease being ten dollars
($10.00) per rentable square foot per year more than the rent per rentable
square foot per year for any other year of the initial term, (vii) any change in
the annual per square foot rent for the first option term that is less than six
dollars per rentable square foot more than the highest per square foot rent for
any year of the initial term of the Staples Lease, (viii) any change in the rent
structure that results in the Effective Total Annual Rent, as defined in
paragraph 6 below, under the Staples Lease being less than One Million Four
Thousand Five Hundred Dollars ($1,004,500). Notwithstanding any other provision
of this Second Amendment or the Original Agreement, any modifications (y) to the
rental or other related provisions of the Staples Lease that are within the
2
<PAGE>
parameters described in clauses (vi), (vii) and (viii) above, or (z) that
increase or decrease the rentable square footage of the Staples Lease to a total
rentable square footage that is not less than 20,090 rentable square feet nor
more than 20,800 rentable square feet (and modifications resulting therefrom to
corresponding provisions such as the tenant's prorata share of expenses or CAM
reimbursements), shall not be deemed to be material, shall not be subject to
Buyer's approval and Buyer shall not disapprove the Staples Lease on account
thereof; provided that such changes shall be subject to the proration of the
Staples Holdback, as described in paragraph 6 below. In the event that Seller
submits to Buyer an executed form of the Staples Lease that contains one or more
material modifications, other than those noted in clauses (y) and (z) above in
this paragraph, Buyer shall approve or reject such form of Staples Lease within
three (3) business days of the date of the submittal. In the event that Buyer
does not notify Seller in writing within such three (3) business day period that
Buyer has approved or rejected said form of Staples Lease, Buyer shall be deemed
to have approved said form of Staples Lease and the Staples Holdback shall be
released to Seller, subject to the proration provisions contained in paragraph 6
below. Subject to all of the provisions of this paragraph 5, for purposes of
Section 7.1(a) of the Original Agreement, Buyer hereby approves the form of the
Staples Lease attached hereto. In the event that Buyer rejects the Staples Lease
as a result of any material modification thereto, Buyer shall not enter into a
lease with Staples, Inc. within six (6) months of the date of said rejection
and, if Buyer does enter into such lease with Staples, Inc. within such six (6)
month period, Buyer shall immediately pay to Seller the sum of One Million Five
Hundred Thousand Dollars ($1,500,000), subject to the proration provisions in
paragraph 6 below.
6. For the purposes of calculating any proration subject to
this paragraph 6 the "Effective Total Annual Rent" for the Staples Lease shall
be deemed to be the total rent payable under the Staples Lease for the initial
ten-year term divided by ten(10). In the event that the Effective Total Annual
Rent payable under the Staples Lease executed pursuant to paragraph 5 above, or
executed prior to the Closing pursuant to Section 7.1(a) of the Original
Agreement, is less than One Million One Hundred and Forty Five Thousand One
Hundred and Thirty Dollars ($1,145,130) then for each dollar that the Effective
Total Annual Rent is less than One Million One Hundred and Forty Five Thousand
One Hundred and Thirty Dollars ($1,145,130): (i) if the Staples Lease is
exeucted prior to the Closing, Buyer shall be entitle to a credit at Closing in
the amount of ten dollars ($10.00), or (ii) if the Staples Lease is executed
after the Closing, the Staples Holdback, or the amount that Buyer is obligated
to pay under the last sentence of Paragraph 5 above, shall be reduced by ten
dollars ($10.00); provided that the Staples Holdback, or the amount that the
Buyer is obligated to pay under the last sentence of Paragraph 5 above, shall
never be increased and shall never be reduced below zero and, if the Staples
Lease is executed prior to the Closing Buyer, shall never be entitled to a
credit in excess of One Million Five Hundred Thousand Dollars ($1,500,000).
Notwithstanding any contrary provision of this Paragraph 6, in the event that in
connection with the execution of the Staples Lease, Seller is able to negotiate
any reduction in the commission payable in connection with the Staples Lease,
which commission is being paid by Buyer, the amount of any such reduction of
such commission shall be deducted from any reduction pursuant to this Paragraph
6 in the Staples Holdback, any credit due Buyer at Closing or any sums due
Seller under the last sentence of Paragraph 5 above; for example, if as a result
of the provisions of this Paragraph 6, the Staples Holdback due Seller upon the
execution of the Staples Lease after Closing is reduced to One Million Two
Hundred Thousand Dollars ($1,200,000) and Seller is able to negotiate a One
Hundred Thousand Dollar ($100,000) reduction in the commission, the amount due
Seller would be One Million Three Hundred Thousand Dollars ($1,300,000).
3
<PAGE>
7. The October 27, 2000 date in Section 8.4(d) of the Original
Agreement is hereby extended to November 28, 2000 and the September 22, 2000
date in said Section is hereby changed to read November 23, 2000.
8. Except as specifically set forth herein, the Original
Agreement shall remain in full force and effect. The Original Agreement as
amended by this Second Amendment constitutes the entire agreement of the parties
with respect to the transactions contemplated therein and supersedes any prior
correspondence, memoranda, understanding, offers, negotiations and agreements,
oral or written. In the event of a conflict between the terms of this Second
Amendment and the Original Agreement, this Second Amendment, shall control.
9. This Second Amendment 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.
The parties hereto have executed this Agreement as of the date
first written above.
SELLER: OAIC California Partnership, L.P.,
a California limited partnership
By: Ocwen Capital Corporation
Its: Investment Manager
By: /s/
--------------------------------
Its:
--------------------------------
BUYER: GEM Investors, Inc.
a Delaware corporation
By: /s/
-----------------------------------
Its:
-----------------------------------
Flynn Land Company, Inc.,
a California corporation
By: /s/
-----------------------------------
Its:
-----------------------------------
4
<PAGE>
THIRD AMENDMENT
TO
225 BUSH STREET
AGREEMENT OF PURCHASE AND SALE
THIS THIRD AMENDMENT TO 225 BUSH AGREEMENT OF PURCHASE AND
SALE (this "Amendment") is entered into as of this 27th day of October, 2000 by
and between OAIC California Partnership, L.P., a California limited partnership
("Seller"), and the following entities collectively as tenants in common
(individually and collectively, jointly and severally, "Buyer"): WXIII/225 Bush,
LLC, a Delaware limited liability company, as to an undivided 92.8537% tenancy
in common, Citrine 225 Bush, LLC, a Delaware limited liability company, as to an
undivided 6.4317% tenancy in common, and GEM Laredo 225 Bush, LLC, a Delaware
limited liability company, as to an undivided 0.7146% tenancy in common.
RECITALS
A. Flynn Land Company, Inc., a California corporation
("Flynn") and GEM Investors, Inc., a Delaware corporation ("GEM" together with
Flynn, "Original Buyer") and Seller have previously entered into that certain
Agreement of Purchase and Sale 225 Bush Street, dated as of July 19, 2000, as
amended by that certain First Amendment to Agreement of Purchase and Sale 225
Bush Street dated as of August 18, 2000, and as further amended by that certain
Second Amendment to Agreement of Purchase and Sale 225 Bush Street (the "Second
Amendment") dated as of September 22, 2000 (collectively the "Original
Agreement").
B. Original Buyer has assigned its interest as "Buyer" under
the Original Agreement to Buyer pursuant to that certain Assignment and
Assumption of Purchase Agreement, dated as of the date hereof.
C. Seller and Buyer now desire to amend the Original Agreement
as more particularly set forth herein.
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. All capitalized terms used herein and not defined herein
shall have the meanings given such terms in the Original Agreement.
2. The Purchase Price, as specified in section 1.2(a) of the
Original Agreement, is hereby reduced to One Hundred and Forty Three Million
Five Hundred Thousand Dollars ($143,500,000). The balance of the Purchase Price
as described in section 1.2(b)(4) of the Original Agreement is hereby reduced to
One Hundred and Forty One Million Dollars ($141,000,000).
3. The Closing Date shall remain October 31, 2000.
4. Sections 3, 5, 6 and 7 of the Second Amendment are hereby
terminated and shall be of no further force or effect.
<PAGE>
5. Notwithstanding anything to the contrary contained in
Section 8.4(d) of the Original Purchase Agreement, Seller shall have no right to
extend the Closing Date past the date specified in Section 3 of this Amendment.
6. Except as specifically set forth herein, the Original
Agreement shall remain in full force and effect. The Original Agreement as
amended by this Amendment constitutes the entire agreement of the parties with
respect to the transactions contemplated therein and supersedes any prior
correspondence, memoranda, understanding, offers, negotiations and agreements,
oral or written. In the event of a conflict between the terms of this Amendment
and the Original Agreement, this Amendment, shall control.
7. This Amendment 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.
The parties hereto have executed this Agreement as of the date
first written above.
BUYER:
WXIII/225 BUSH, LLC,
a Delaware limited liability company
By: Diamond Real Estate Fund, L.P.,
a Delaware limited partnership
a Managing Member
By: Diamond Managers, L.P.,
a Delaware limited partnership
Its General Partner
By: GEM Investors, Inc.,
a Delaware corporation
Its General Partner
By: /s/
---------------------------
Name:
--------------------------
Title:
-------------------------
2
<PAGE>
GEM LAREDO 225 BUSH, LLC,
a Delaware limited liability company
By: /s/
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
CITRINE 225 BUSH, LLC,
a Delaware limited liability company
By: /s/
--------------------------------
Name:
-------------------------------
Title:
-------------------------------
SELLER:
OAIC CALIFORNIA PARTNERSHIP, L.P.
a California limited partnership
By: Ocwen Capital Corporation
Its: Investment Manager
By: /s/ GREG BRESKIN
-----------------------------------
Name: Greg Breskin
Its: Vice President
3
