ARDEN REALTY LIMITED PARTNERSHIP
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
December 9, 1997
11601 Wilshire Associates
c/o Real Tech Leasing & Management
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Re: World Savings Building.
Gentlemen:
Reference is made to that certain Agreement to Acquire
Certain Interests in Real Property dated November 12, 1997
and covering the World Savings Building at 00000 Xxxxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, as modified by those
certain letter agreements among us dated November 13, 1997,
November 20, 1997, November 26, 1997, December 1, 1997 and
December 3, 1997, respectively, extending the critical dates
to December 5, 1997 and the Closing Date to December 10, 1997
(collectively, the "Master Agreement"), between you and your
direct and indirect constituent partners as Owner and the
undersigned as Acquirer ("Arden") regarding the above-
referenced real property ("Property"). Capitalized terms not
otherwise defined in this letter shall have the meaning
ascribed to them in the Master Agreement.
Prior to the date hereof you delivered to Arden a
proposed Settlement Agreement between you and Sprink, Inc.
("Sprink") covering an alleged defect in the bolts used in
the coupling of sprinkler system ("Bolts") whereby Sprink
offered you the sum of $200,000 in full settlement of any
claims related to the Bolts in exchange for a full and
general release. In addition, the fire safety panel at the
Building ("Fire Panel") and the upgrade of the Energy
Management System at the Building ("EM System") may not be
completed, repaired, fully functional and "signed-off" by the
City of Los Angeles until after the Closing. Owner and Arden
have continued discussion regarding these matters and have
now agreed to resolve their differences with regard to these
items and follows: Arden hereby agrees to acquire and Owner
agrees to transfer the Property in accordance with the terms
of the Master Agreement as amended by this letter agreement
("Amendment") upon the following additional or modified terms
and conditions:
1. Owner shall assign at Closing all of its right,
title and interest in and to its cause of action or right to
a cause of action against Sprink and all rights to the
proposed settlement with Sprink, including the proceeds
thereof.
2. Owner acknowledges that (a) there is a balance due
on the Fire Panel installation contract with Pyro Technation
Specialists the sum of $87,941 (which includes certain
holdbacks) at the completion thereof and (b) the Building has
been cited by the Fire Department for violations of the fire,
life-safety systems which must be remedied by January 5,
1998. Arden believes that there may be an additional $25,000
required to do the work which is specifically excluded from
the Pyro Technation Specialists Contract (such as ceiling
repair and painting) as well as do the work to satisfy the
notices of violation. Owner agrees to credit the sum of
$112,941 (i.e., $87,941 plus $25,000) to Arden at Closing and
agrees to use its best efforts to obtain an extension prior
to Closing of the date by which the violations must be cured
to February 15, 1998.
3. The EMS System work is being performed by The Xxx
Xxxx Company ("Contractor"). In order to provide security to
Arden that the work will be completed, signed-off by the City
of Los Angeles, fully functional under load conditions and
warranted for one year by the Contractor, Owner has agreed to
leave $250,000 in Escrow after Closing in an interest bearing
account as a security fund and held by Escrow for a maximum
of one year after Closing to provide security to Arden that
if the Contractor fails to fully perform or complete the
installation of the EM System upgrade to the reasonable
satisfaction of Arden or the City of Los Angeles, or if the
EM System fails under load tests or fails to otherwise
adequately perform under standard working conditions at the
Building in accordance with its specifications or the
covenants or warranties of the Contractor or breaks-down
during the warranty period and, in all such cases, is not
promptly repaired so as to be fully functional by the
Contractor under its warranty (as opposed to problems and
costs related to maintenance work), Arden shall have the
right by written notice to Escrow to demand immediate
reimbursement for monies expended by it to correct, repair or
replace the EM System (which ever is the most commercially
reasonable alternative under the circumstances). This
holdback reserve shall be managed in accordance with that
certain Post Closing Reserve Agreement, attached hereto
marked Exhibit A and incorporated herein by this reference.
4. Commencing as of the date this Amendment is
accepted by Owner, Purchaser shall be deemed to have
"approved" the Property for all purposes and its Deposit
shall be increased to a total of $2,500,000 and become non-
refundable, subject to the conditions precedent to its
obligation to Close as set forth in the Master Agreement.
Without limitation thereon, Arden acknowledges that it is
acquiring the Property subject to (i) the matters disclosed
in connection with the Sprink litigation, and (ii) the status
of the Fire Panel, Fire Department violations, and the EM
System (and acknowledges that, except for the credits or
holdbacks provided for herein, Owner shall have no further
liability or obligation with respect thereto, such liability
or obligation being hereby released). Arden waives and
releases all claims whether known or unknown regarding the
matters described in the preceding clauses (i) and (ii)
including, without limitation, all benefits under California
Civil Code Section 1542; provided, however, that Owner
represents and warrants to Arden that $87,941 is the maximum
amount due under paragraph 2(a) above and the foregoing
waiver shall not apply to this representation and warranty.
5. Notwithstanding anything in the Master Agreement to
the contrary, the Apollo interest shall first be contributed
to Arden by means of a Contribution Agreement being executed
concurrently with this Amendment whereby Apollo shall receive
at Closing OP Units in exchange for its equity in the
Property; and the amount utilized to calculate the number of
OP Units of Apollo and the OP Units of the Constituent
Partners of Wilstein to be acquired pursuant to the
respective Contribution Agreements shall be reduced by each
such entities' share of the net expenses of the transaction
which shall be paid by Arden on such entities' behalf.
6. Except to the extent set forth above, Owner and
Arden hereby reaffirm and ratify the Master Agreement as
previously amended and as amended hereby.
7. This letter may be executed in two or more
counterparts, and, when so executed, will have the same force
and effect as though all signatures appeared on a single
document. Any signature page of this letter may be detached
from any counterpart without impairing the legal effect of
any signatures thereon, and may be attached to another
counterpart identical in form thereto but having attached to
it one or more additional signature pages. In addition to the
foregoing, the parties hereto each (i) has agreed to permit
the use of telecopied signatures in order to expedite the
transaction contemplated by this letter, (ii) intends to be
bound by its respective telecopied signature, (iii) is aware
that the other party will rely on the telecopied signature,
and (iv) acknowledges such reliance and waives any defenses
to the enforcement of this letter and notices effecting the
transaction contemplated by this letter based on the fact
that a signature or notice was sent by telecopy.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return a copy
of this Amendment for our files.
Sincerely,
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.
a Maryland corporation
Its general partner
By:/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx,
Chairman of the Board and
Chief Executive Officer
Accepted and Agreed to this
12th day to December 1997
11601 WILSHIRE ASSOCIATES,
a California general partnership
By: 11601 HOLDING CORP.,
a Delaware corporation,
Its General Partner
By:/s/ Xxxxxx X. Xxxxx
XXXXXX X. XXXXX,
Vice President
By: SAN XXXXXXX ASSOCIATES,
a California general partnership,
Its General Partner
By: WILSHIRE SV ASSOCIATES,
a California limited partnership
(formerly known as WSVA Associates),
Its General Partner
By: HOUSING AFFILIATES, INC.,
a California corporation,
Its General Partner
By:/s/ Xxxxx Xxxxxxxx
XXXXX XXXXXXXX,
President
By: FOREST CITY SAN XXXXXXX CORP.,
an Ohio corporation,
Its General Partner
By: /s/ D. Xxxxxx XxXxxx
Print Name: D. Xxxxxx XxXxxx
Print Title: Vice President
11601 HOLDING CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
WILSHIRE SV ASSOCIATES,
a California limited partnership
By:Housing Affiliates, Inc.,
a California corporation
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
CONSTITUENT PARTNERS OF WILSHIRE SV ASSOCIATES
HOUSING AFFILIATES, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx as Co-Trustee of
D & S Wilstein Family Trust - 1989
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx as Co-Trustee of 1987
L & J Wilstein Family Trust
/s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
/s/ Xxx Xxxxxx
Xxx Xxxxxx as Trustee of the 1987
Xxxxxx Living Revocable Trust
FOREST CITY SAN XXXXXXX CORP.,
an Ohio corporation
By: /s/ D. Xxxxxx XxXxxx
Name: D. Xxxxxx XxXxxx
Title: Vice President
cc: Xxxxxx X. Xxxxxxx
Brig Xxxx
Xxxxxxx X. Xxxxxx, Esq. (000) 000-0000
Xxxx Xxxxxxxx (000) 000-0000
Xxxx Xxxxxxxx Esq. (000) 000-0000
Xxxxxxx Xxxxxxxxxx, Esq.(000) 000-0000
