STANDARD OFFER, AGREEMENT AND ESCROW
INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
(NON-RESIDENTIAL)
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
July 13, 1998
-----------------------------
(Xxxx for Reference Purposes)
1. BUYER.
1.1 Xxxxx Xxxxxxx and Xxxx Xxxx and/or Assignee/Nominee ,(the Buyer) hereby
offers to purchase the real property, hereinafter described, from the owner
thereof (the "Seller") (collectively, the "Parties" or individually, a "Party"),
through an escrow (the "Escrow") to close on August 28, 1998 (the "Expected
Closing Date") to be held by Professional Escrow (Xxxxx Xxxxx) (the "Escrow
Holder") whose address is 000 X. Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, Phone
No. (000) 000-0000, Facsimile No. (000) 000-0000 upon the terms and conditions
set forth in this agreement (the "Agreement"). Buyer shall have the right to
assign Xxxxx's rights hereunder, but any such assignment shall not relieve Buyer
of Buyer's obligations herein unless the Seller expressly releases Buyer.
1.2 The term "Date of Agreement" as used herein shall be the date when by
execution and delivery (as defined in paragraph 20.2) of this document or a
subsequent counter-offer thereto, Buyer and Seller have reached agreement in
writing whereby Xxxxxx agrees to sell, and Xxxxx agrees to purchase, the
Property upon terms accepted by both Parties.
2. PROPERTY.
2.1 The real property (the "Property") that is the subject of this offer
consists of (insert a brief physical description) a 2-story approximate 22,000
square foot office building on approximately 32,800 square feet of fee simple
land is located in the City of West Hollywood, County of Los Angeles State of
CA, is commonly known by the street address of 0000 Xxxxxxx Xxxxxxxxx, Xxxx
Xxxxxxxxx and is legally described as: To be supplied to escrow
2.2 If the legal description of the Property is not complete or is
inaccurate, this Agreement shall not be invalid and the legal description shall
be completed or corrected to meet the requirements of First American Title
Company (Xxxxx Xxxxxxx and Xxx Xxxxxxx) (the "Title Company"), which Title
Company shall issue the title policy hereinafter described.
2.3 The Property includes, at no additional cost to Buyer, the permanent
improvements thereon, including those items which the law of the state in which
the Property is located provides is part of the Property, as well as the
following items, if any, owned by Seller and presently located in the Property:
electrical distribution systems (power panels, xxxx ducting, conduits,
disconnects, lighting fixtures), telephone distribution systems (lines, jacks
and connections), space heaters, air conditioning equipment, air lines, fire
sprinkler systems, security systems, carpets, window coverings, wall coverings,
and any and all personal property used in connection with the operation of the
Property as distinguished from the operation of Seller's business (collectively,
the "Improvements").
2.4 If the Property is located in the State of California, the Broker(s)
is/are required under the Xxxxxxx-Xxxxxx Special Studies Zones Act, to disclose
to a prospective purchaser of real property whether the property being purchased
is located within a delineated special studies zone (a zone that encompasses a
potentially or recently active trace of an earthquake fault that is deemed by
the State Geologist to be sufficiently active and well defined enough to
constitute a potential hazard to structures from surface faulting or fault
(creep). If the Property is located within such a special studies zone, its
development may require a geologic report from a state registered geologist. In
accordance with such law, the Broker(s) hereby inform(s) Buyer that the Property
[X] (a) Is not within such a special studies zone.
[ ] (b) Is within such a special studies zone.
2.5 If (1) the Property is located in the State of California, (2) the
Improvements were constructed prior to 1975, and (3) the Improvements include
structures with (i) pre-cast (e.g., tilt-up) concrete or reinforced masonry
walls together with wood frame floors or roofs or (ii) unreinforced masonry
walls, California law requires that Seller or Sellers Broker provide Buyer with
a copy of The Commercial Property Owners Guide to Earthquake Safety (the
"Booklet") published by the California Seismic Safety Commission. Seller and
Sellers Broker hereby inform Xxxxx that the Property:
[ ] (a) meets the foregoing requirements, and Seller and Seller's Broker
are required to provide Buyer with a copy of the Booklet. Seller or
Seller's Broker shall, within five (5) business days of the Date of
Agreement, deliver to Buyer a copy of the Booklet and a completed
"Commercial Property Earthquake Weakness Disclosure Report" contained in
the Booklet duly executed by Seller. Within five (5) business days of
Buyers receipt of said Disclosure Report, Xxxxx shall deliver a duly
countersigned copy of the same to Escrow Holder, with a copy to Seller and
Seller's Broker. Escrow Holder is hereby instructed that the Escrow shall
not close unless and until Escrow Holder has received the Disclosure Report
duly signed by both Seller and Buyer.
[X] (b) does not meet the foregoing requirements requiring the delivery of
the Booklet.
3. PURCHASE PRICE.
3.1 The purchase price (the "Purchase Price") to be paid by Buyer to Seller
for the Property shall be
$3,800,000.00, payable as follows:
-------------
(a) Cash down payment, including the Deposit as defined in paragraph
4.3 (or if an all cash transaction, the Purchase Price): $ 1,900,000.00
(STRIKE IF NOT
APPLICABLE)
(b) Amount of "New Loan" as defined in paragraph 5.1, if any: $ _____________
(c) Buyer shall take title to the Property subject to the following
existing deed(s) of trust ("Existing Deed(s) of Trust") securing
the existing promissory note(s) ("Existing Note(s)"):
(i) An Existing Note (the "First Note") with an unpaid principal
balance as of the Closing of approximately: $ 1,500,000.00
Said existing note is payable at $________________________per
month, including interest at the rate of Prime Rate* plus 2%
per annum until paid (and/or the entire unpaid balance is due
on or before September 8, 1998).
(ii) An Existing Note (the "Second Note") with an unpaid principal
balance as of the Closing of approximately: $ _____________
Said Existing Note is payable at $_____________________ per
month, including interest at the rate of _______ % per annum
until paid (and/or the entire unpaid balance is due on
_____________________________).
(d) Buyer shall give Seller a deed of trust (the "Purchase Money Deed
of Trust") on the Property, to secure the promissory note of Buyer
to Seller described in Paragraph 6 (the "Purchase Money Note") in
the amount of: $ 400,000.00
Total Purchase Price $ 3,800,000.00
3.2 If an Existing Deed of Trust permits the beneficiary thereof to require
payment of a transfer fee as a condition to the transfer of the Property subject
to such Existing Deed of Trust, Xxxxx agrees to pay transfer fees and costs of
up to one and one-half percent (1 1/2%) of the unpaid principal balance of the
applicable Existing Note.
4. DEPOSITS
4.1 Buyer hereby delivers a check in the sum of $100,000.00, payable to
Professional Escrow Company, to be (CHECK APPLICABLE BOX) [X] forthwith
deposited in the payee's trust account [ ] held uncashed until the Date of
Agreement. when cashed, the check shall be deposited into the payee's trust
account to be applied toward the Buyer's check or funds shall, upon request by
Xxxxx, be promptly returned to Buyer.
*Prime Rate means the rate that Chase Manhattan Bank announces from time-to-time
as its prime lending rate, as in effect from time-to-time
PAGE 1
/s/ T.D.
/s/ R.M.
/s/ B.B.
/s/ N.T.
4.2 Within five (5) business days after the Day of Agreement, Buyer shall
deposit with Escrow Holder the additional sum of $ -0- to be applied to the
Purchase Price at the Closing.
4.3 The funds deposited with Escrow Holder by or on behalf of Buyer under
paragraphs 4.1 and 4.2 above (collectively, the "Deposit"), shall be deposited
by Escrow Holder in such State or Federally chartered bank as Buyer may select
and in such interest-bearing account or accounts as Escrow Holder or Broker(s)
deem appropriate and consistent with the timing requirements of this
transaction. The interest therefrom shall accrue to the benefit of Buyer, who
hereby acknowledges that there may be penalties or interest forfeitures if the
applicable instrument is redeemed prior to its specified maturity.
Buyer's Federal Tax Identification Number is _______________________.
5. FINANCING CONTINGENCY. - THIS SECTION IS CROSSED OUT AND DELETED
6. PURCHASE MONEY NOTE. (STRIKE IF NOT APPLICABLE)
6.1 The Purchase Money Note shall provide for interest on unpaid principal
at the rate of 8.000 % per annum, with principal interest to be paid as follows:
all interest shall accrue and the entire Note and Deed of Trust shall be due and
payable on or before September 8, 1998. The Purchase Money Note and Purchase
Money Deed of Trust shall be on the current forms commonly used by Escrow
Holder, and be junior and subordinate only to the Existing Note(s) and/or New
Loan expressly called for by this Agreement.
6.2 The Purchase Money Note and the Purchase Money Deed of Trust shall
contain provisions regarding the following:
(a) PREPAYMENT. Principal may be prepaid in whole or in part at any time
without penalty, at the option of Buyer.
(b) LATE CHARGE. A late charge of 6% shall be payable with respect to any
payment of principal, interest, or other charges, not made within ten (10) days
after it is due.
(c) DUE ON SALE. In the event the Buyer sells or transfers title to
the Property or any portion thereof, then the Seller may, at Sellers option,
require the entire unpaid balance of the Purchase Money Note to be then paid in
full.
7. REAL ESTATE BROKERS. THIS SECTION IS CROSSED OUT AND DELETED
8. ESCROW AND CLOSING.
8.1 Upon acceptance hereof by Seller, this Agreement, including any
counter-offers incorporated herein by the Parties, shall constitute not only the
agreement of purchase and sale between Buyer and Seller, but also instructions
to Escrow Holder for the consummation of the Agreement through the Escrow.
Escrow Holder shall not prepare any further escrow instructions restating or
amending this Agreement unless specifically so instructed by the Parties or a
Broker herein.
8.2 Escrow Holder is hereby authorized and instructed to conduct the Escrow
in accordance with this Agreement, applicable law, custom and practice of the
community in which Escrow H older is located, including any reporting
requirements of the Internal Revenue Code. In the event of a conflict between
the law of the state where the Property is located and the law of the state
where the Escrow Holder is located, the law of the state where the Property is
located shall prevail.
8.3 Subject to satisfaction of the contingencies herein described, Xxxxxx
Holder shall close this escrow (the "Closing") by recording the grant deed and
other documents required to be recorded and by disbursing the funds and
documents in accordance with this Agreement.
8.4 If this transaction is terminated for non-satisfaction and non-waiver of
a Buyer's Contingency, as defined in paragraph 9.4, then neither of the Parties
shall thereafter have any liability to the other under this Agreement, except to
the extent of the breach of any affirmative covenant or warranty in this
Agreement that may have been involved. In the event of such termination, Buyer
shall be promptly refunded all funds deposited by or on behalf of Buyer with a
Broker, Escrow Holder or Seller, less only Title Company and Escrow Holder
cancellation fees and costs, all of which shall be Buyers obligation.
8.5 The Closing shall occur on the Expected Closing Date, or as soon
thereafter as the Escrow is in condition for Closing; provided, however, that if
the Closing does not occur by the Expected Closing Date and the Expected Closing
Date is not extended by mutual instructions of the Parties, a Party hereto not
then in default under this Agreement may notify the other Party, Escrow Holder,
and Broker(s), in writing that, unless the Closing occurs within five (5)
business days following said notice, the Escrow and this Agreement shall be
deemed terminated without further notice or instructions.
8.6 Should the Closing not occur during said five (5) day period, this
Agreement and Escrow shall be deemed terminated and Escrow Holder shall
forthwith return all monies and documents less only Escrow Holder's reasonable
fees and expenses, to the party who deposited them. Such Party shall indemnify
and hold escrow holder harmless in connection with such return. However, no
refunds or documents shall be returned to a party claimed by written notice to
Escrow Holder to be in default under this Agreement.
8.7 Except as otherwise provided herein, the termination of Escrow and this
Agreement and/or the return of deposited funds or documents shall not relieve or
release either Buyer or Seller from any obligation to pay Escrow Holder's fees
and costs or constitute a waiver, release or discharge of any breach or default
that has occurred in the performance of the obligations, agreements, covenants
or warranties contained herein.
8.8 If this Agreement terminates for any reason other than Seller's breach
or default, then at Seller's request, and as a condition to the return of
Buyer's deposit, Buyer shall within five (5) days after written request deliver
to Seller, at no charge, copies of all surveys, engineering studies, soil
reports, maps, master plans, feasibility studies and other similar items
prepared by or for Buyer that pertain to the Property.
9. CONTINGENCIES TO CLOSING. THERE ARE NO CONTINGENCIES TO CLOSING.
PAGE 2
/s/ T.D.
/s/ R.M.
/s/ B.B.
/s/ N.T.
ALL OF SECTION 9 IS CROSSED OUT AND DELETED
10. DOCUMENT REQUIRED AT CLOSING:
10.1 Escrow Holder shall cause to be issued to Buyer a standard coverage (or
ALTA extended, if so elected under paragraph 9.1(f) owner's form policy of title
insurance effective as of the Closing, issued by the Title Company in the full
amount of the Purchase Price, insuring title to the Property vested in Buyer,
subject only to the exceptions approved by Buyer. In the event there is a
Purchase Money Deed of Trust in this transaction, the policy of title insurance
shall be a joint protection policy insuring both Buyer and Seller.
"IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO
OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE
PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY
BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO
ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING."
10.2 Seller shall deliver or cause to be delivered to Escrow Holder in time
for delivery to Buyer at the Closing, an original ink signed:
(a) Xxxxx deed (or equivalent), duly executed and in recordable form,
conveying fee title to the Property to Buyer.
(b) If paragraph 3.1(c) has not been stricken, the Beneficiary
Statements concerning Existing Note(s).
PAGE 3
/s/ T.D.
/s/ R.M.
/s/ B.B.
/s/ N.T.
(c) If applicable, the Existing Leases and Other Agreements together
with duly executed assignments thereof by Xxxxxx and Xxxxx. The assignment of
Existing Leases shall be on the most recent Assignment and Assumption of
Lessor's Interest in Lease form published by the A.I.R. or its equivalent.
(d) If applicable, the Tenancy Statements executed by Xxxxxx and the
Tenant(s) of the Property.
(e) An affidavit executed by Seller to the effect that Seller is not a
"foreign person" within the meaning of Internal Revenue Code Section 1445 or
successor statutes. If Seller does not provide such affidavit an form reasonably
satisfactory to Buyer at least three (3) business days prior to the Closing.
Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to
Internal Revenue Service such sum as is required by applicable Federal law with
respect to purchases from foreign sellers.
10.3 Buyer shall deliver or cause to be delivered to Seller through escrow:
(a) The cash portion of the Purchase Price and such additional sums as
are required of Buyer under this Agreement for prorations, expenses and
adjustments. The balance of the cash portion of the Purchase Price. including
Xxxxx's escrow charges and other cash charges, if any, shall be deposited by
Buyer with Escrow Holder, by cashier's check drawn upon a local major banking
institution, federal funds wire transfer, or any other method acceptable to
Escrow Holder as Immediately collectable funds, no later than 11:00 am. on the
business day prior to the Expected Closing Date.
(b) If a Purchase Money Note and Purchase Money Deed of Trust are
called for by this Agreement, the duly executed originals of those documents,
the Purchase Money Deed of Trust being in recordable form, together with
evidence of fire insurance on the improvements in the amount of the full
replacement cost naming Seller as a mortgage loss payee, and a real estate tax
service contract (at Buyers expense), assuring Seller of notice of the status of
payment of real property taxes during the life of the Purchase Money Note.
(c) The assumption portion of the Assignment and Assumption of Lessor's
Interest in Lease form specified in paragraph 10.2(c), above, duly executed by
Buyer with respect to the obligations of the Lessor accruing after the Closing
as to each Existing Lease.
(d) Assumptions duly executed by Xxxxx of the obligations of Seller
that accrue after Closing under any Other Agreements. (e) If applicable, a
written assumption duly executed by Xxxxx of the loan documents with respect to
Existing Notes.
11. PRORATIONS, EXPENSES AND ADJUSTMENTS.
11.1 TAXES. Real property taxes payable by the owner of the Property shall
be prorated through Escrow as of the date of the Closing, based upon the latest
tax bill available. The Parties agree to prorate as of the Closing any taxes
assessed against the Property by supplemental bill levied by reason of events
occurring prior to the Closing. Payment shall be made promptly in cash upon
receipt of a copy of any such supplemental bill of the amount necessary to
accomplish such proration. Seller shall pay and discharge in full at or before
the Closing the prorated unpaid balance of any special assessment bonds.
11.2 INSURANCE. If Buyer elects to take an assignment of the existing
casualty and/or liability insurance that is maintained by Seller, the current
premium therefor shall be prorated through Escrow as of the date of Closing.
11.3 RENTALS, INTEREST AND EXPENSES. Collected rentals, interest on Existing
Notes, utilities, and operating expenses shall be prorated as of the date of
Closing. The Parties agree to promptly adjust between themselves outside of
Escrow any rents received after the Closing.
11.4 SECURITY DEPOSIT. Security Deposits held by Seller shall be given to
Buyer by a credit to the cash required of Buyer at the Closing.
11.5 POST CLOSING MATTERS. Any item to be prorated that is not determined or
determinable at the Closing shall be promptly adjusted by the Parties by
appropriate cash payment outside of Escrow when the amount due is determined.
11.6 VARIATIONS IN EXISTING NOTE BALANCES. In the event that Buyer is taking
title to the Property subject to an Existing Deed of Trust(s), and in the event
that a Beneficiary Statement as to the applicable Existing Note(s) discloses
that the unpaid principal balance of such Existing Note(s) at the Closing will
be more or less than the amount set forth in paragraph 3.1(c) hereof (the
"Existing Note Variation"), then the Purchase Money Note(s) shall be reduced or
increased by an amount equal to such Existing Note Variation. If there is to be
no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a)
shall be reduced or increased by the amount of such Existing Note Variation.
11.7 VARIATIONS IN NEW LOAN BALANCE. In the event Buyer is obtaining a New
Loan and in the event that the amount of the New Loan actually obtained is
greater than the amount set forth in paragraph 5.1 hereof, the Purchase Money
Note, if one is called for in this transaction, shall be reduced by the excess
of the actual face amount of the New Loan over such amount as designated in
paragraph 5.1 hereof.
11.8 ESCROW COSTS AND FEES. Buyer and Seller shall each pay one-half of the
Escrow Holder's charges and Seller shall pay the usual recording fees and any
required documentary transfer taxes. Seller shall pay the premium for a standard
coverage owners or Joint protection policy of title insurance.
12. REPRESENTATION AND WARRANTIES OF SELLER AND DISCLAIMER.
12.1 Seller's warranties and representations shall survive the Closing and
delivery of the deed and unless otherwise noted herein, are true, material and
relied upon by Xxxxx and Broker(s) in all respects, both as of the Date of
Agreement, and as of the date of Closing. Seller hereby makes the following
warranties and representations to Buyer and Xxxxxx(s):
(a) AUTHORITY OF SELLER. Seller is the owner of the Property and/or has
the full right, power and authority to sell, convey and transfer the Property to
Buyer as provided herein, and to perform Seller's obligations hereunder.
(b) MAINTENANCE DURING ESCROW AND EQUIPMENT CONDITION AT CLOSING.
Except as otherwise provided in paragraph 9.1(l) hereof dealing with
destruction, damage or loss, Seller shall maintain the Property until the
Closing in its present condition, ordinary wear and tear excepted. The heating.
ventilating, air conditioning, PLUMBING, elevators, loading doors and electrical
systems shall be in good operating order and condition at the time of Closing.
(c) HAZARDOUS SUBSTANCES/STORAGE TANKS. Seller has no knowledge, except
as otherwise disclosed to Buyer in writing, of the existence or prior existence
on the Property of any Hazardous Substance (as defined in paragraph 9.1(c)). nor
of the existence or prior existence of any above or below ground storage tank or
tanks.
(d) COMPLIANCE. Seller has no knowledge of any aspect or condition of
the Property which violates applicable laws, rules, regulations, codes, or
covenants, conditions or restrictions, or of improvements or alterations made to
the Property without a permit where one was required, or of any unfulfilled
order or directive of any applicable governmental agency or casualty insurance
company that any work of investigation. remediation, repair, maintenance or
improvement is to be performed on the Property.
(e) CHANGES IN AGREEMENTS. Prior to the Closing. Seller will not
violate or modify, orally or in writing, any Existing Lease or Other Agreement,
or create any new leases or other agreements affecting the Property, without
Buyer's written approval, which approval will not be unreasonably withheld.
(f) POSSESSORY RIGHTS. Seller has no knowledge that anyone will, at the
Closing, have any right to possession of the Property, except as disclosed by
this Agreement or otherwise in writing to Buyer.
(g) MECHANICS' LIENS. There are no unsatisfied mechanic's or
materialman's lien rights concerning the Property.
(h) ACTIONS, SUITS OR PROCEEDINGS. Seller has no knowledge of any
actions, suits or proceedings pending or threatened before any commission,
board, bureau, agency, instrumentality, arbitrator(s) court or tribunal that
would affect the Property or the right to occupy or utilize same.
(i) NOTICE OF CHANGES. Seller will promptly notify Buyer and Xxxxxx(s)
in writing of any Material Change (as defined in paragraph 9.1(m)) affecting the
Property that becomes known to Seller prior to the Closing.
(j) NO TENANT BANKRUPTCY PROCEEDINGS. Seller has no notice or knowledge
that any tenant of the Property is the subject of a bankruptcy or insolvency
proceeding.
(k) NO SELLER BANKRUPTCY PROCEEDINGS. Seller is not the subject of a
bankruptcy, insolvency or probate proceeding.
12.2 Buyer hereby acknowledges that, except as otherwise stated in this
Agreement, Buyer is purchasing the Property in its existing condition and will,
by the time called for herein, make or have waived all inspections of the
Property Buyer believes are necessary to protect its own interest in. and its
contemplated use of, the Property. The Parties acknowledge that, except as
otherwise stated in this Agreement, no representations, inducements, promises,
agreements, assurances, oral or written, concerning the Property, or any aspect
of the Occupational Safety and Health Act, hazardous substance laws, or any
other act, ordinance or law, have been made by either Party or Broker, or relied
upon by either Party hereto.
13. POSSESSION.
13.1 Possession of the Property shall be given to Buyer at the Closing
subject to the rights of tenants under Existing Leases. 14. BUYER'S ENTRY.
14. BUYER'S ENTRY.
14.1 At any time during the Escrow period, Buyer, and its agents and
representatives, shall have the right at reasonable times and subject to rights
of tenants under Existing Leases, to enter upon the Property for the purpose of
making inspections and tests specified in this Agreement. Following any such
entry or work, unless otherwise directed in writing by Seller, Buyer shall
return the Property to the condition it was in prior to such entry or work,
including the recompaction or removal of any disrupted soil or material as
Seller may reasonably direct. All such Inspections and tests and any other work
conducted or materials furnished with respect to the Property by or for Buyer
shall be paid for by Buyer as and when due and Buyer shall indemnity, defend,
protect and hold harmless Seller and the Property of and from any and all
claims, liabilities, demands, losses, costs, expenses (including reasonable
attorneys fees), damages or recoveries, including those for injury to person or
property, arising out of or relating to any such work or materials or the acts
or omissions of buyer, its agents or employees in connection therewith.
15. FURTHER DOCUMENTS AND ASSURANCES.
15.1 Buyer and Seller shall each, diligently and in good faith, undertake
all actions and procedures reasonably required to place the escrow in condition
for closing as and when required by this agreement. buyer and seller agree to
provide all further information, and to execute and deliver all further
documents and instruments, reasonably required by escrow holder or the title
company.
16. ATTORNEYS' FEES.
16.1 In the event of any litigation or arbitration between the Buyer,
Seller, and Xxxxxx(s), or any of them, concerning this transaction, the
prevailing party shall be entitled to reasonable attorney's fees and costs. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all attorneys' fees reasonably
incurred in good faith.
17. PRIOR AGREEMENTS/AMENDMENTS.
17.1 The contract in effect as of the date of agreement supersedes any and
all prior agreements between seller and buyer regarding the property.
17.2 Amendments to this agreement are effective only if made in writing and
executed by xxxxx and seller.
PAGE 4
/s/ R.M.
/s/ B.B.
/s/ N.T.
18. BROKER'S RIGHTS.
18.1 If this sale shall not be consummated due to the default of either the
Buyer or Seller, the defaulting party shall be liable to and shall pay to
Broker(s) the commission that Broker(s) would have received had the sale been
consummated. This obligation of Buyer, if Buyer is the defaulting party, is in
addition to any obligation with respect to liquidated damages.
18.2 Upon the Closing. Broker(s) is/are authorized to publicize the facts of
this transaction.
19. NOTICES.
19.1 Whenever any Party hereto, Escrow Holder or Broker(s) herein shall
desire to give or serve any notice, demand request approval or other
communication, each such communication shall be in writing and shall be
delivered personally. by messenger or by mail. postage prepaid, addressed as set
forth adjacent to that Party's or Xxxxxx's signature on this Agreement or by
telecopy with receipt confirmed by telephone. Service of any such communication
shall be deemed made on the date of actual receipt at such address.
19.2 Any Party or Broker hereto may from time to time, by notice In writing
served upon the other Party as aforesaid, designate a different address to
which, or a different person or additional persons to whom, all communications
are thereafter to be made.
20. DURATION OF OFFER.
20.1 If this offer shall not be accepted by Seller on or before 5:00 p.m.
according to the time standard applicable to the city of Los Angeles on the date
of July 25, 1998, .it shall be deemed automatically revoked.
20.2 The acceptance of this offer, or of any subsequent counter-offer
hereto, that creates an agreement between the Parties as described in paragraph
1.2, shall be deemed made upon delivery to the other Party or either Broker
herein of a duly executed writing unconditionally accepting the last outstanding
offer or counter-offer.
21. LIQUIDATED DAMAGES. (THIS LIQUIDATED DAMAGES PARAGRAPH IS APPLICABLE ONLY
IF INITIALED BY BOTH PARTIES.)
21.1 THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT
TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE
SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER OF ALL CONTINGENCIES
PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE
ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF $ 50,000.00 PLUS INTEREST, IF
ANY, ACCRUED THEREON. UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE
RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES
AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER.
------------------------- ---------------------------
BUYER INITIALS SELLER INITIALS
22. ARBITRATION OF DISPUTES: THIS SECTION IS CROSSED OUT AND DELETED
23. APPLICABLE LAW
23.1 This Agreement shall be governed by, and paragraph 22.3 amended to
refer to, the laws of the state In which the Property is located.
24. TIME OF ESSENCE.
24.1 Time is of the essence of this Agreement.
25. COUNTERPARTS.
25.1 This Agreement may be executed by Xxxxx and Seller in counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument. Escrow Holder, after verifying that the
counterparts are identical except for the signatures, is authorized and
instructed to combine the signed signature pages on one of the counterparts,
which shall then constitute the Agreement.
26. DISCLOSURES REGARDING THE NATURE OF A REAL ESTATE AGENCY RELATIONSHIP.
26.1 The Parties and Xxxxxx(s) agree that their relationship(s) shall be
governed by the principles set forth in California Civil Code, Section 2375, as
summarized in the following paragraph 26.2.
26.2 When entering Into a discussion with a real estate agent regarding a
real estate transaction, a Buyer or Seller should from the outset understand
what type of agency relationship or representation it has with the agent or
agents in the transaction. Xxxxx and Seller acknowledge being advised by the
Broker(s) in this transaction, as follows:
(a) SELLER'S AGENT. A Seller's agent under a listing agreement with the
Seller acts as the agent for the Seller only. A Seller's agent or subagent has
the following affirmative obligations: (1) TO THE SELLER: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) TO
THE BUYER AND THE SELLER: a. Diligent exercise of reasonable skill and care in
performance of the agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to
reveal to either Party any confidential information obtained from the other
Party which does not involve the affirmative duties set forth above.
(b) BUYER'S AGENT: A selling agent can, with a Xxxxx's consent, agree
to act as agent for the Buyer only. In these situations, the agent is not the
Seller's agent, even if by agreement the agent may receive compensation for
services rendered, either in full or in part from the Seller. An agent acting
only for a Buyer has the following affirmative obligations: (1) TO THE BUYER: A
fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with
the Buyer. (2) TO THE BUYER AND THE SELLER: a. Diligent exercise of reasonable
skill and care in performance of the agent's duties. b. A duty of honest and
fair dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained form the other Party which does not involve the affirmative duties set
forth above.
PAGE 5
/s/ T.D.
/s/ R.M.
/s/ B.B.
/s/ N.T.
(c) AGENT REPRESENTING BOTH SELLER AND BUYER. A real estate agent,
either acting directly or through one or more associate licenses, can legally be
the agent of both the Seller and the Buyer in a transaction, but only with the
knowledge and consent of both the Seller and the Buyer. (1) IN a DUAL AGENCY
SITUATION, the agent has the following affirmative obligations to both the
Seller and the Buyer: a. A fiduciary duty of utmost care, integrity, honesty and
loyalty in the dealings with either Seller or the Buyer. b. Other duties to the
Seller and the Buyer as stated above in their respective sections (a) or ~b) of
this paragraph 26.2. (2) In representing both Seller and Buyer, the agent may
not without the express permission of the respective Party, disclose to the
other Party that the Seller will accept a price less than the listing price or
that the Buyer will pay a price greater than the price offered. (3) The above
duties of the agent In a real estate transaction do not relieve a Seller or
Buyer from the responsibility to protect their own interests Buyer and Seller
should carefully read all agreements to assure that they adequately express
their understanding of the transaction. A real estate agent is a person
qualified to advise about real estate, If legal or tax advice is desired,
consult a competent professional.
(d) FURTHER DISCLOSURES. Throughout this transaction Buyer and Seller
may receive more than one disclosure, depending upon the number of agents
assisting in the transaction, Buyer and Seller should each read its contents
each time it is presented, considering the relationship between them and the
real estate agent in this transaction and that disclosure.
26.3 CONFIDENTIAL INFORMATION: Xxxxx and Seller agree to Identify to
Broker(s) as "Confidential" any communication or information given Broker(s)
that is considered by such Party to be confidential.
27. ADDITIONAL PROVISIONS:
Additional provisions of this offer, If any, are as follows or are attached
hereto by an addendum consisting of paragraphs 29 through 32. It will be
presumed no other provisions are included unless specified here.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
XXXXX AND SELLER HEREBY ACKNOWLEDGE THAT THEY HAVE BEEN AND ARE NOW ADVISED BY
THE BROKER(S) TO CONSULT AND RETAIN THEIR OWN EXPERTS TO ADVISE AND REPRESENT
THEM CONCERNING THE LEGAL AND INCOME TAX EFFECTS OF THIS AGREEMENT, AS WELL AS
THE CONDITION AND/OR LEGALITY OF THE PROPERTY, THE IMPROVEMENTS AND EQUIPMENT
THEREIN. THE SOIL THEREOF, THE CONDITION OF TITLE THERETO, THE SURVEY THEREOF.
THE ENVIRONMENTAL ASPECTS THEREOF, THE INTENDED AND/OR PERMITTED USAGE THEREOF.
THE EXISTENCE AND NATURE OF TENANCIES THEREIN. THE OUTSTANDING OTHER AGREEMENTS,
IF ANY. WITH RESPECT THERETO, AND THE EXISTING OR CONTEMPLATED FINANCING
THEREOF, AND THAT THE BROKER(S) IS/ARE NOT TO BE RESPONSIBLE FOR PURSUING THE
INVESTIGATION OF ANY SUCH MATTERS UNLESS EXPRESSLY OTHERWISE AGREED TO IN
WRITING BY BROKER(S) AND BUYER OR SELLER.
THIS FORM IS NOT FOR USE IN CONNECTION
WITH THE SALE OF RESIDENTIAL PROPERTY.
IF THIS AGREEMENT HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY
THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS AGREEMENT OR THE
TRANSACTION INVOLVED HEREIN. THE UNDERSIGNED BUYER OFFERS AND AGREES TO BUY THE
PROPERTY ON THE TERMS AND CONDITIONS STATED AND ACKNOWLEDGES RECEIPT OF A COPY
HEREOF.
BUYER:
XXXXX XXXXXXX AND XXXX XXXX AND/OR ASSIGNEE / NOMINEE
By /s/ Xxxxx Xxxxxxx /Date 8-31-98
------------------------------ ---------------------
Name Printed: Xxxxx Xxxxxxx
--------------------------------
/s/ Xxxx Xxxx
-------------------------
Xxxx Xxxx
825 So. Barrington Avenue
-------------------------
Address
Los Angeles, CA 90049
-------------------------
(000) 000-0000 (000) 000-0000
---------------------------- ----------------------------
Telephone Facsimile No.
28. ACCEPTANCE.
28.1 Seller accepts the foregoing offer to purchase the Property and
hereby agrees to sell the Property to Buyer on the terms and conditions therein
specified.
SECTIONS 28.2 and 28.3 ARE CROSSED OUT AND DELETED
NOTE: A PROPERTY INFORMATION SHEET IS REQUIRED TO BE DELIVERED TO BUYER BY
SELLER UNDER THIS AGREEMENT.
SELLER:
NEWSTAR MEDIA, INC. a California corporation
--------------------------------------------------
By /s/ Xxxxxx Xxxxxx Date 8-31-98
Name Printed: Xxxxxx Xxxxxx
Title: Vice President and General Counsel
/s/ Xxxx Xxxxxx
Chief Financial Officer
0000 Xxxxxxx Xxxxxxxxx
----------------------------------------
Address
West Hollywood, CA 90048
----------------------------------------
(000) 000-0000
-------------------------------- -------------------------------
Telephone Facsimile No.
PAGE 6
ADDENDUM TO THAT CERTAIN OFFER, AGREEMENT
& ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE
DATED JULY 13,1998 BY AND BETWEEN
XXXXX XXXXXXX AND XXXX XXXX AND/OR NOMINEE AS BUYER
AND NEWSTAR MEDIA, INC., A CALIFORNIA CORPORATION AS SELLER
FOR THE PROPERTY KNOWN AS 0000 XXXXXXX XXXXXXXXX
XXXX XXXXXXXXX, XXXXXXXXXX
This Addendum shall serve to amend the above Purchase Agreement. It is
understood and agreed between the parties that should the typed portion of this
Addendum ever be construed to be in conflict with the printed portion of the
Purchase Agreement, the typed portions of this Addendum shall prevail.
29. BUYER'S CONTINGENCY PERIOD. All contingencies to the close of escrow other
than clean title at closing have been removed. Buyer reserves the right to
perfect title to its satisfaction prior to closing.
30. The first sentence of paragraph 14.1 shall be deleted and the following
substituted:
"If Buyer intends to go onto the Property before the close of
escrow, Buyer shall provide verbal notice to the Seller at
least one (1) day in advance. The Seller or the Seller's Agent
shall have the right to accompany the Buyer at all times on the
Property, the intention being to avoid alerting tenants and
other of Buyer's purchase of the Property. If Buyer conducts
any tests, surveys, or investigations on the Property during
the period prior to the close of escrow, Buyer shall provide to
Seller copies of any written reports obtained by Buyer pursuant
to Buyer's inspection of the Property and Buyer shall indemnify
and hold the Seller harmless from any and all costs associated
with such tests, surveys, or investigations."
31. DESIGNATION OF NOMINEE OR ASSIGNEE/1031 EXCHANGE. Xxxxx has made Seller
aware that it intends to use this Property to complete a 1031 Tax Deferred
Exchange, presently in escrow at Timcor Financial Corp. and set to close
approximately August 28, 1998. Seller agrees to cooperate whenever necessary, at
no cost to Seller, to complete the exchange; provided that (i) completion of
such Tax Deferred Exchange shall not be a condition to the purchase of the
Property by Buyer; (ii) the Tax Deferred Exchange shall not delay the Closing
Date; and (iii) Seller shall not be required to take title to any other property
in connection with such Tax Deferred Exchange.
32. SELLER LEASEBACK. Xxxxx has entered escrow on the Property based upon
Seller's representations of a sale/leaseback under the following terms and
conditions:
32.1 Seller shall lease the Property from Buyer from close of escrow for a
period of one (1) year (12 months) on an "as is, where is" basis at a
rental of Three Hundred Eighty Thousand Dollars ($380,000.00) per
annum, payable on the first (1St) day of each month at Thirty-One
Thousand Six Hundred Sixty-Six Dollars and Sixty-Six Cents
($31,166.66).
32.2 Buyer shall have no obligations whatsoever for any tenant improvement
costs or any maintenance or upkeep costs during the lease term.
32.3 The lease, to be prepared and executed during Xxxxx's contingency
period, shall be an AIR (American Industrial Real Estate Association)
Single-Tenant Net lease.
32.4 At the end of the lease, the building and all of its systems shall be
kept and returned to Buyer/Landlord in the same condition as of the
close of escrow, reasonable wear and tear excepted.
/s/ T.D.
/s/ R.M.
/s/ B.B.
/s/ N.T.
32.5 Parking shall be free during the term.
32.6 There will be no options or rights to extend the lease term.
32.7 The Property shall be leased on an "as is, where is" basis.
32.8 All other terms to be negotiated in final lease documents.
Xxxxxx to & ACCEPTED: "SELLER" AGREED TO & ACCEPTED: "BUYER"
NEWSTAR MEDIA INC., XXXXX XXXXXXX AND XXXX XXXX AND/OR NOMINEE
A CALIFORNIA CORPORATION
BY:/s/ Xxxxxx Xxxxxx BY: /s/ Xxxxx Xxxxxxx
-------------------------------- --------------------------------
Its Authorized Representative Xxxxx Xxxxxxx
DATE: 8-31-98 DATE: 8-31-98
---------------------------- ---------------------------
/s/ Xxxx Xxxxxx BY: /s/ Xxxx Xxxx
Chief Financial Officer -----------------------------
Xxxx Xxxx
DATE:
----------------------------
ADDENDUM
Page 2 of 2
