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EXHIBIT 10.2
AGREEMENT OF PURCHASE AND SALE
AND
JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
(this "Agreement") is made and entered into as of this ___ day of September,
1997, by and between Activity Business Associates, LLC, a California limited
liability company ("Seller"), and Arden Realty Limited Partnership, a Maryland
limited partnership ("Buyer"), with reference to the following facts:
A. Seller is the owner of the Property (as hereinafter defined).
B. Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, the Property (as hereinafter defined), on the terms and
conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual
covenants and agreements herein set forth, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
hereby agree as follows:
ARTICLE 1
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer hereby
agrees to purchase from Seller, subject to the terms and conditions set forth
herein, the following:
1.1 Land. That certain land (the "Land"), located in the City of
San Diego, State of California commonly known as Activity Business Park, 9235,
9245 and 0000 Xxxxxxxx Xxxx and 9520 and 0000 Xxxxxxx Xxxxxx and more
particularly described on Exhibit A hereto;
1.2 Appurtenances. All rights, privileges and easements
appurtenant to the Land to the extent owned by Seller, if any, including,
without limitation, all minerals, oil, gas and other hydrocarbon substances on
and under the Land, as well as all development rights and air rights relating
to the Land, and all water, water rights and water stock relating to the Land,
and any and all easements, rights-of-way or appurtenances used in connection
with the beneficial use and enjoyment of the Land (all of which are sometimes
collectively referred to as the "Appurtenances");
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1.3 Improvements. All improvements and fixtures located upon
the Land, including, without limitation, five buildings containing in the
aggregate approximately 161,351 net rentable square feet, and all other
structures presently located on the Land, all fixtures, apparatus, equipment,
and appliances used in connection with the operation or occupancy thereof (all
of which are collectively referred to as the "Improvements");
1.4 Leases. All interest of Seller, as landlord, in and to the
leases of space in the Improvements in effect on the Closing Date (as
hereinafter defined) and approved by Buyer pursuant to this Agreement
(collectively, the "Leases");
1.5 Personal Property. All personal property of Seller, if any,
located on or in or used in connection with the operation, maintenance or
management of the Land and/or the Improvements (collectively, the "Personal
Property");
1.6 Service Contracts. Those service contracts and other
agreements, lease rights, warranties, guarantees, agreements, utility contracts
and other rights relating to the ownership, use and operation of all or any part
of the Property, elected to be assumed by Buyer pursuant to Section 5.2 hereof
(collectively, the "Service Contracts"); and
1.7 Intangible Property. All right, title and interest of Seller
in and to any and all intangible property owned by Seller and used in the
ownership, use and/or operation of the Land or the Improvements, including,
without limitation, the right to use any trade name now used in connection with
the Land or the Improvements, the books and records relating to the Property,
including computer discs, tapes and other data bases or software, inventory
records, building management records, payroll records and all other books and
records and all other books and records relating to the operation and
management of the Real Property (collectively, the "Intangible Property").
The Land, the Appurtenances, the Improvements and the Leases are
sometimes referred to herein collectively as the "Real Property." The Real
Property, Personal Property, Service Contracts and the Intangible Property are
sometimes referred to herein collectively as the "Property."
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ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The total purchase price for the Property shall
be the sum of Fourteen Million Six Hundred Thousand Dollars ($14,600,000) (the
"Purchase Price").
2.2 Payment of Purchase Price. The Purchase Price shall be paid as
follows:
(a) Initial Deposit. Upon the Opening of Escrow (as
hereinafter defined) Buyer shall deliver to First American Title Insurance
Company of Los Angeles ("Escrow Holder"), 000 X. Xxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx 00000, Attn: Xxxxxx Xxxxxxxx, the sum of One Hundred Thousand
Dollars ($100,000) (the "Initial Deposit"). In the event the sale of the
Property is consummated, the Initial Deposit shall be credited towards the
Purchase Price.
(b) Additional Deposit. On November 7, 1997, Buyer shall
deliver to Escrow Holder the sum of One Hundred Fifty Thousand Dollars
($150,000) (the "Additional Deposit"). The Initial Deposit and the Additional
Deposit are sometimes hereinafter referred to collectively as the "Deposit."
In the event the sale of the Property is consummated, the Deposit shall be
credited towards the Purchase Price.
(c) Assumption of Existing Loan. A portion of the
Purchase Price shall be payable by Buyer assuming the obligations of Seller
under that certain loan presently encumbering the Property (the "Existing
Loan"), such portion of the Purchase Price so payable being an amount equal to
the outstanding principal balance of the Existing Loan as of the Closing Date
(such amount being herein called the "Existing Loan Amount"). The Existing
Loan Amount as of the Closing Date is estimated to be approximately Eight
Million Two Hundred Seventy Thousand Dollars ($8,270,000).
(d) Balance of Purchase Price. The Purchase Price, less
the sum of the Deposit and the amount assumed by Buyer under the Existing Loan
(the "Purchase Price Balance"), estimated to be approximately Six Million
Eighty Thousand Dollars ($6,080,000), shall be deposited with Escrow Holder by
Buyer in immediately available funds not later than the Closing Date (as
hereinafter defined). In the event the sale of the Property is consummated,
the Purchase Price Balance shall be credited towards the Purchase Price. In
the event the sale of the Property is not consummated because of the failure of
any condition or the default by Seller, all such amounts, together with
interest thereon, shall be returned immediately to Buyer.
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2.3 Investment of Deposit; Liquidated Damages
2.3.1 Investment of Deposit. The Deposit shall be placed
in an interest-bearing account with a financial institution reasonably
acceptable to Buyer, or in another investment instrument designated by Buyer,
with all interest accruing to the benefit of Buyer. The Deposit shall be
disposed of by Escrow Holder only as provided in this Agreement.
2.3.2 Liquidated Damages. IN THE EVENT THAT, FOLLOWING THE
EXPIRATION OF THE CONTINGENCY PERIOD, THE TRANSACTIONS CONTEMPLATED HEREBY ARE
NOT CONSUMMATED DUE TO A DEFAULT SOLELY ON THE PART OF BUYER, THE AMOUNT OF THE
DEPOSIT SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES AND AS
SELLER'S SOLE AND EXCLUSIVE REMEDY. THE PARTIES ACKNOWLEDGE THAT SELLER'S
ACTUAL DAMAGES IN THE EVENT THE TRANSACTIONS CONTEMPLATED HEREBY ARE NOT
CONSUMMATED FOLLOWING THE EXPIRATION OF THE CONTINGENCY PERIOD DUE TO A DEFAULT
SOLELY ON THE PART OF BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
DETERMINE. THEREFORE, BY PLACING THEIR SIGNATURES BELOW, THE PARTIES
ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN AGREED UPON, AFTER
NEGOTIATION, AS THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES.
Seller: /s/ WB Buyer: /s/ VJC
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2.4 Exchange of Property for Units. Seller has informed Buyer
that Seller may be interested in receiving partnership units in Buyer ("Units")
in lieu of a portion of the Purchase Price. In the event Seller desires to
receive Units, Seller shall so inform Buyer in writing of such election,
including the portion of the Purchase Price Seller would like to receive in
Units, prior to the expiration of the Contingency Period (as hereinafter
defined). Buyer and Seller agree to negotiate in good faith to enter into the
appropriate documentation ("Investor Documents") necessary to effect such an
exchange. The Investor Documents shall be on terms acceptable to Buyer in its
sole discretion, and shall include, among other things, investor
representations made on behalf of Seller and disclaimers with respect to the
Units. In the event Buyer and Seller cannot mutually agree on the Investor
Documents, Buyer's failure to deliver Units in lieu of a portion of the
Purchase Price shall not be deemed a default under this Agreement and shall not
impede or delay the Closing.
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ARTICLE 3
ESCROW
3.1 Deposit with Escrow Holder and Escrow Instructions. Within
three (3) business days following the execution of this Agreement by the
parties hereto, the parties hereto shall deposit a fully executed original of
this Agreement with Escrow Holder, and this Agreement shall serve as the
instructions to Escrow Holder for consummation of the transactions contemplated
hereby. Seller and Buyer agree to execute such additional and supplementary
escrow instructions as may be appropriate to enable Escrow Holder to comply
with the terms of this Agreement; provided, however, that in the event of any
conflict between the terms and provisions of this Agreement and the terms and
provisions of any supplementary escrow instructions, the terms and provisions
of this Agreement shall control.
3.2 Confirmation of the Opening of Escrow. Upon receipt of a
fully executed copy of this Agreement, Escrow Holder shall immediately execute
this Agreement to evidence Escrow Holder's agreement to act in compliance with
the terms and provisions hereof. Escrow Holder shall immediately notify Buyer
in Seller in writing of the date on which escrow was established with Escrow
Holder (the "Opening of Escrow"), which date shall thereafter be the Opening of
Escrow date for purposes of this Agreement.
ARTICLE 4
TITLE TO PROPERTY
4.1 Real Property. At the Closing, Seller shall convey to Buyer
fee simple title to the Real Property by duly executed and acknowledged grant
deed in the form of Exhibit C hereto (the "Grant Deed"). Evidence of delivery
of fee simple title to the Real Property shall be the issuance by First
American Title Title Insurance Company (the "Title Company") of an ALTA Owner's
Policy of Title Insurance (extended coverage) (the "Title Policy") in the
amount of the Purchase Price, insuring fee simple title to the Real Property in
Buyer, free and clear of monetary liens and subject only to the Permitted
Exceptions (as hereinafter defined) and including the Endorsements (as
hereinafter defined).
4.2 Leases. At the Closing, Seller shall transfer all of its
right, title and interest in and to the Leases by an Assignment of Leases in
the form of Exhibit D hereto (the "Assignment of Leases"), free and clear of
any liens, encumbrances or interests of third parties, other than the Existing
Loan.
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4.3 Personal Property. At the Closing, Seller shall transfer
title to the Personal Property, if any, by a xxxx of sale in the form of
Exhibit E hereto (the "Xxxx of Sale"), free and clear of any liens,
encumbrances or interests of third parties, other than the Existing Loan.
4.4 Service Contracts. At the Closing, Seller shall transfer all
of its right, title and interest in and to the Service Contracts, if any, by an
Assignment of Service Contracts, Warranties and Guarantees in the form of
Exhibit F hereto (the "Assignment of Service Contracts"), free and clear of any
liens, encumbrances or interest of third parties, other than the Existing Loan.
4.5 Intangible Property. At the Closing, Seller shall transfer
all of its right, title and interest in and to all Intangible Property, if any,
by an Assignment of Intangible Property in the form of Exhibit G hereto (the
"Assignment of Intangible Property"), free and clear of any liens, encumbrances
or interests of third parties, other than the Existing Loan.
ARTICLE 5
BUYER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to Buyer's
obligation to purchase the Property:
5.1 Review and Approval of Title. Not later than ten (10) days
following the date first above written, Seller shall deliver to Buyer all of
the following:
5.1.1 at Seller's sole cost and expense, a current extended
coverage preliminary title report (the "Preliminary Title Report") with respect
to the Property issued by the Title Company, accompanied by copies of all
documents referenced in such report;
5.1.2 at Seller's sole cost and expense, an ALTA survey of
the Real Property prepared by a licensed surveyor reasonably acceptable to
Buyer (the "Survey"). The Survey shall be certified to Buyer and the Title
Company and in sufficient detail to provide the basis for an ALTA owner's
policy of title insurance without boundary, encroachment or survey exceptions,
and shall show the location of all easements and improvements, and any and all
other pertinent information with respect to the Real Property. The Survey
shall also indicate and certify as to the total acreage of the Real Property
and any encroachments of improvements onto easements or onto adjacent
properties or certify as to their absence and shall indicate the
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presence of improvements on property adjoining the Real Property if located
within five (5) feet of the boundaries of the Real Property; and
5.1.3 at Seller's sole cost and expense, copies of all
existing and proposed easements, covenants, restrictions, or similar agreements
which affect the state of title to the Real Property, including, without
limitation, any and all documents relating to any variance, conditional use
permits or land-use restrictions relating to or affecting the Real Property, or
if no such documents exist, a certification of Seller to that effect.
Title to the Property shall be subject only to such exceptions in the
Preliminary Title Report as Buyer shall approve, in Buyer's sole and absolute
discretion (collectively, the "Permitted Exceptions"). It is understood that
the Permitted Exceptions shall include the documents evidencing the Existing
Loan, in the event Buyer approves the Existing Loan in accordance with Section
5.2 hereof. Buyer shall have from the date hereof until November 7, 1997 (the
"Contingency Period"), in which to notify Seller, in writing, as to those items
which are Permitted Exceptions, those matters which Buyer disapproves, and
which endorsements Buyer will be requiring (collectively, the "Endorsements").
Buyer's failure to provide such written notice to Seller shall constitute
disapproval of all matters shown in the Preliminary Title Report and Survey.
If Buyer disapproves of any matter disclosed in the Preliminary Title Report or
Survey as herein provided, Seller shall have ten (10) business days after
Seller receives written notice of such disapproval to elect to cure any such
matter by delivering written notice of such election to Buyer. Seller's
failure to give such notice to Buyer within the ten (10) day period set forth
herein shall constitute Seller's election not to cure the matters disapproved
by Buyer. If Seller elects not to cure any such matter, Buyer may either, at
Buyer's sole election, (i) proceed with the purchase of the Property, in which
event Buyer shall be deemed to have approved such matters which were previously
disapproved, or (ii) terminate this Agreement, in which event this Agreement
shall terminate, the Deposit, together with any interest earned thereon, shall
be returned to Buyer, and the parties hereto shall be relieved of all further
rights and obligations hereunder.
5.2 Delivery of Reports and Documents. Within ten (10) days
following the date hereof, Seller shall deliver to Buyer, copies of any and all
of the following documents in Seller's possession or control:
(a) a rent roll of the Property for the current month;
(b) evidence that the Property complies with the Subdivision
Map Act;
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(c) copies of the Leases, and all licenses, service contracts
(including parking, elevator, HVAC and landscaping maintenance contracts),
management contracts, and brokerage agreements which relate to the Property,
and, to the extent in Seller's possession, copies of all current permits,
variances, insurance policies, maps, certificates of occupancy, building
permits and other documentation and evidence that the present use, occupancy
and operation of the Property is authorized by and is in compliance with all
governmental regulations;
(d) warranties and instruction books (e.g., for vertical
transportation, HVAC and other building systems);
(e) operating statements for calendar years 1995 and 1996, and
1997 monthly statements through the most recently completed month;
(f) all available plans, structural drawings, architectural
and "as built" drawings in Seller's possession, including, but not limited to,
mechanical, electrical, air conditioning, landscape and sprinkler drawings and
specifications regarding the improvements, and any soils, structural,
geological, environmental, hazardous materials and asbestos studies or reports
relating to subsurface conditions, grading plans, topographical maps and
similar data respecting the Property;
(g) copies of property tax bills for the last two (2) years
and copies of the most recently available utility bills respecting the
Property;
(h) a list of all personal property owned by or leased by
Seller and used in connection with the ownership or operation of the Property;
(i) a certificate of Seller certifying to Seller's knowledge
that there is no legal or administrative action, proceeding, claim, arbitration
or suit pending before any court, agency or official, nor any such claim or
action threatened in writing, relating to the Seller or the Property;
(j) copies of all documents evidencing or relating to the
Existing Loan; and
(k) any and all other reports, plans or studies relating to
the Property (collectively, the "Reports and Documents"). Buyer shall have
until the expiration of the Contingency Period in which to review the Reports
and Documents heretofore delivered and approve or disapprove any of the
foregoing, in Buyer's sole and absolute discretion. In the event Buyer
disapproves any of the Reports and Documents, Buyer shall deliver Seller
written notice of Buyer's disapproval prior to the expiration of the
Contingency Period, in which event this Agreement shall terminate, the Deposit,
together with any interest thereon, shall be returned to Buyer, and the parties
hereto
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shall be relieved of all further rights and obligations hereunder. In the
event Buyer fails to deliver said written notice to Seller prior to the
expiration of the Contingency Period, Buyer shall be deemed to have disapproved
the Reports and Documents. Buyer agrees to return the Reports and Documents to
Seller in the event for any reason this Agreement is terminated and the
transactions contemplated herein are not consummated.
5.3 Buyer's Independent Review. Buyer shall have the right, during
the Contingency Period, to conduct such further inspections and/or tests of the
Property as Buyer deems necessary and/or desirable, to enable Buyer to satisfy
itself as to all matters relating to the Property, including, without
limitation, an environmental assessment of the Property, including any further
testing recommended by such initial assessments, asbestos-containing-materials
studies, Americans with Disabilities Act compliance studies, soils testing,
engineering studies, zoning and intended use reviews, the physical, structural,
mechanical condition of the Property, seismic studies, and other surveys and
studies of the Property (collectively, "Buyer's Inspections and Reports").
Buyer's right to conduct Buyer's Inspections and Reports shall be subject to and
conducted in accordance with Buyer's right of access to the Property as set
forth in Section 12.2 hereof. In the event that, based upon Buyer's independent
review of the Property, Buyer determines, in Buyer's sole and absolute
discretion, that Buyer is unwilling to proceed with the purchase of the
Property, Buyer may elect to terminate the Agreement by so notifying Seller in
writing of Buyer's election prior to the expiration of the Contingency Period,
and this Agreement shall terminate, the Deposit, together with any interest
earned thereon, shall be returned to Buyer, and the parties hereto shall be
relieved of all further rights and obligations hereunder. In the event Buyer
fails to deliver said written notice to Seller prior to the expiration of the
Contingency Period, Buyer shall be deemed to have disapproved Buyer's
Inspections and Reports.
5.4 Estoppel Certificates. Buyer shall receive, prior to the
Closing, an estoppel certificate from (i) each tenant occupying not less than
2,500 net rentable square feet, and (ii) a sufficient number of other tenants
at the Property such that estoppel certificates shall have been received
pursuant to clauses (i) and (ii) hereof with respect to not less than
eighty-five percent (85%) of the aggregate net rentable square feet of the
Property covered by Leases in effect on the Closing Date, in the form of
Exhibit H hereto and in substance satisfactory to Buyer, in Buyer's sole and
absolute discretion (collectively, the "Estoppel Certificates"). In the event
that Buyer disapproves of any Estoppel Certificate Buyer may elect to terminate
the Agreement by so notifying Seller in writing of Buyer's election prior to
the expiration of the Contingency Period, or, if delivered subsequent to the
expiration of the Contingency Period, within five (5) business days following
receipt of such estoppel certificate, in
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which event this Agreement shall terminate, the Deposit, together with any
interest earned thereon, shall be returned to Buyer, and the parties hereto
shall be relieved of all further rights and obligations hereunder.
5.5 Lender Estoppel Certificate. Buyer shall receive, prior to
the expiration of the Contingency Period, an estoppel certificate from the
lender under the Existing Loan in the form of Exhibit I hereto and in substance
satisfactory to Buyer, in Buyer's sole and absolute discretion (the "Lender
Estoppel Certificate"). In the event that Buyer disapproves the Lender
Estoppel Certificate, Buyer may elect to terminate the Agreement by so
notifying Seller in writing of Buyer's election prior to the expiration of the
Contingency Period, in which event this Agreement shall terminate, the Deposit,
together with any interest earned thereon, shall be returned to Buyer, and the
parties hereto shall be relieved of all further rights and obligations
hereunder.
5.6 Representations and Warranties of Seller. All of Seller's
representations and warranties contained in or made pursuant to this Agreement
shall have been true and correct when made and shall be true and correct as of
the Closing Date.
5.7 Covenants of Seller. Seller shall have complied with all of
Seller's covenants and agreements contained in or made pursuant to this
Agreement.
5.8 Delivery of Documents. Seller shall have delivered into Escrow
the documents and instruments described in Section 7.2 hereof and shall have
delivered to Buyer the documents and instruments described in Section 7.3
hereof.
5.9 Condition of Property. The condition of the Property shall
not have changed from the date of this Agreement to the Closing Date, ordinary
wear and tear excepted.
5.10 Conditions for the Benefit of Buyer. The foregoing conditions
are for the sole benefit of Buyer. If any of the foregoing conditions
described in this Article 4 is not satisfied for any reason whatsoever, Buyer
shall have the right at its sole election either to waive such condition and
proceed with the transactions contemplated hereby, or, in the alternative, to
terminate this Agreement, in which event Buyer shall be entitled to a return of
the Deposit, together with all interest earned thereon, and Seller and Buyer
shall be released from further obligation or liability hereunder (except for
those obligations and liabilities which, pursuant to the terms of this
Agreement, survive such termination).
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ARTICLE 6
SELLER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to Seller's
obligation to sell the Property:
6.1 Representations and Warranties of Buyer. All of Buyer's
representations and warranties contained in or made pursuant to this Agreement
shall have been true and correct when made and shall be true and correct as of
the Closing Date.
6.2 Covenants of Buyer. Buyer shall have complied with all of
Buyer's covenants and agreements contained in or made pursuant to this
Agreement.
6.3 Delivery of Documents and Funds. Buyer shall have delivered
into Escrow the documents, instruments and funds described in Section 7.4
hereof.
6.4 Conditions for the Benefit of Seller. The foregoing
conditions are for the sole benefit of Seller. If any of the foregoing
conditions described in this Article 5 is not satisfied for any reason
whatsoever, Seller shall have the right at its sole election either to waive
such condition and proceed with the transactions contemplated hereby, or, in
the alternative, to terminate this Agreement, in which event Buyer shall be
entitled to a return of the Deposit, together with all interest earned thereon,
and Seller and Buyer shall be released from further obligation or liability
hereunder (except for those obligations and liabilities which, pursuant to the
terms of this Agreement, survive, such termination).
ARTICLE 7
CLOSING
7.1 Closing. The closing hereunder (the "Closing") shall
mean the recording of the Grant Deed conveying title to the Property from
Seller to Buyer and shall be held and delivery of all items to be made at the
Closing shall be made at the offices of Escrow Holder on January 6, 1998 (the
"Closing Date"), or such other date prior thereto and/or at such other location
as Buyer and Seller may mutually agree in writing. In the event the Closing
Date does not fall on a Business Day (as hereinafter defined), the Closing Date
shall be moved to the next succeeding Business Day. Such date may not
otherwise be modified without the written approval of both Seller and Buyer.
In the event the Closing does not occur on or before the Closing Date, Escrow
Holder shall, unless it is notified by both parties to the contrary within five
(5) days
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after the Closing Date, return to the depositor thereof items which may have
been deposited hereunder. Any such return shall not, however, relieve either
party hereto of any liability it may have for its wrongful failure to close.
7.2 Deliveries by Seller to Escrow Holder. Not later than one (1)
Business Day prior to the Closing Date, Seller shall deposit with Escrow Holder
the following:
7.2.1 The Grant Deed, duly executed and acknowledged by
Seller, in recordable form, and ready for recordation on the Closing Date;
7.2.2 An Affidavit of Non-Foreign Status in the form of
Exhibit J hereto, duly executed by Seller pursuant to Section 1445 of the
Internal Revenue Code of 1986, as amended;
7.2.3 California Form 590-RE, duly executed by Seller;
7.2.4 The Xxxx of Sale;
7.2.5 The Assignment of Leases;
7.2.6 The Assignment of Service Contracts;
7.2.7 All documents necessary to effect the assignment of
the Existing Loan; and
7.2.8 Any and all other documents, instruments, data,
records, correspondence or agreements called for hereunder which have not been
previously delivered.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
7.3 Deliveries by Seller Outside of Escrow. On or before the
Closing Date, Seller shall deliver or cause to be delivered to Buyer the
following:
7.3.1 To the extent they are then in Seller's possession,
and have not heretofore been delivered to Buyer, the original and as-built
plans and specifications for all Improvements on the Property;
7.3.2 To the extent in Seller's possession, all unexpired
warranties and guarantees which Seller has received in connection with any work
or services
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performed with respect to, or equipment installed in, the improvements on the
Property;
7.3.3 All keys in Seller's possession (properly tagged for
identification) for all improvements on the Property;
7.3.4 The originals of all Leases, Estoppel Certificates
and the Lender Estoppel Certificate (if not previously delivered), all
correspondence in Seller's possession to or from any tenants, relating to the
Leases and all guarantees, certificates of deposit or other security associated
therewith;
7.3.5 The originals of all Service Contracts which are
being assumed by Buyer and will remain in effect after the Closing and all
correspondence and existing records prepared by Seller in its normal course of
operations specifically for the Property (and which are not otherwise
confidential) relating to, and necessary for, the on-going operations and
maintenance of the Property (which materials may be either delivered at Closing
or left at the management office at the Property);
7.3.6 An inventory list of all Seller's personal property
on the Property; and
7.3.7 Copies of all insurance policies obtained or
maintained by Seller and containing coverage applicable to the Property. For
purposes of this agreement, policies of insurance include, but are not limited
to, policies of commercial general liability, fire, earthquake, flood, hazard,
bodily injury, lost rents, theft, condemnation, casualty loss and any umbrella
policies concerning the Property;.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
7.4 Deliveries by Buyer. Not later than the Closing Date, Buyer
shall deposit with Escrow Holder the following:
7.4.1 The Purchase Price Balance, and/or, to the extent
Seller has elected to receive Units in accordance with Section 2.4 of this
Agreement, the certificates representing the Units for disbursement to Seller
in accordance with the terms and provisions hereof, to be held by Escrow Holder
pursuant to joint closing instructions reasonably acceptable to Buyer and
Seller;
7.4.2 All documents necessary to effect the assignment and
assumption of the Existing Loan; and
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7.4.3 Any other documents, instruments, data, records,
correspondence or agreements called for hereunder which have not previously
been delivered.
Seller may waive compliance on Buyer's part under any of the foregoing items by
an instrument in writing.
7.5 Other Instruments. In addition to the documents and
instruments to be delivered as herein provided, each of the parties hereto
shall, from time to time at the request of the other party, execute and deliver
to the other party such other instruments of transfer, conveyance and
assignment and shall take such other action as may be reasonably required to
effectively carry out the terms of this Agreement.
7.6 Prorations. All revenues, income, receivables, costs,
expenses and payables of the Property shall be apportioned equitably between
the parties as of Closing on the basis of the actual number of days in a
particular month, and with respect to the items enumerated below where a
particular manner of apportionment is provided, then apportionment of such item
shall be made in such manner. The obligation to make apportionments shall
survive Closing. Without limitation, the following items shall be so
apportioned:
(i) Monthly rents and percentage rent and "passthroughs"
of real estate taxes and operating expenses due from occupancy tenants under
Leases, as and when collected. If at Closing there are any past due rents or
charges owed by occupancy tenants, they shall not be prorated until received;
Buyer shall include such delinquencies in its normal billing and shall pursue
the collection thereof in good faith after the Closing Date (but Buyer shall
not be required to litigate or declare a default in any Lease). To the extent
Buyer receives amounts on account of Leases on or after the Closing Date, such
payments shall be applied first toward then current rent owed to Buyer in
connection with the applicable Lease for which such payments are received, and
any excess monies received shall be applied toward the payment of any
delinquent rents, with Seller's share thereof being promptly delivered to
Seller. Buyer may not waive any delinquent rents nor modify a Lease so as to
reduce or otherwise affect amounts owed thereunder for any period in which
Seller is entitled to receive its share of charges or amounts without first
obtaining Seller's written consent. Seller hereby reserves the right to pursue
any remedy against any tenant owing delinquent rents and any other amounts to
Seller. Buyer shall reasonably cooperate with Seller in any collection efforts
hereunder (but shall not be required to litigate or declare a default in any
Lease). With respect to delinquent rents and any other amounts or other rights
of any kind respecting tenants who are no longer tenants of the Property as of
the Closing Date, Seller shall retain all rights relating thereto;
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(ii) Real estate and personal property taxes and any
special assessments, taking into consideration discounts for the earliest
permitted payment, based upon the latest previous tax levies. Such items shall
be reapportioned between Seller and Buyer if current tax rates differ from the
latest previous tax rates as soon as the same are known. Seller agrees that to
the extent any additional taxes, assessments or levies are imposed, assessed or
levied against the Property, or any portion thereof, the Seller or the Buyer at
any time subsequent to Closing but with reference to any period prior thereto
during Seller's ownership thereof, Seller shall promptly pay to Buyer an amount
equal to such additional assessments or levies. Similarly, if tax refunds
become payable for periods during Seller's ownership of the Property, such
amounts (subject to adjustments for the potential claims of occupancy tenants
that paid tax increases by way of rent escalations to Seller) shall be promptly
paid over to Seller. In the event that any assessments on the Property are
payable in installments, then the installment for the current period shall be
prorated (with Buyer assuming the obligation to pay any installment due after
the Closing Date). In no event shall Seller be charged with or be responsible
for any increase in the taxes on the Property resulting from the sale of the
Property or from any improvements made or lease entered into on or after the
Closing Date;
(iii) Transferable annual permits, licenses, and/or
inspection fees, if any, on the basis of the duration of the same;
(iv) Security deposits, plus accrued interest, if any,
payable thereon to tenants, and any other deposits and prepaid rent, shall be
credited (or assigned) to Buyer;
(v) Utility charges levied against Seller or the
Property, and Buyer shall transfer all such utility services to its name and
account immediately upon Closing;
(vi) Service Contracts on the basis of the charge or
premium for the period involved;
(vii) All forms of rent concessions, including free rent,
rent which is reduced by a sum certain or a percentage amount for a defined
period of time, and other similar monetary concessions or obligations under all
Leases for the period following the Closing (collectively, "Free Rent") shall
be credited to Buyer against the Purchase Price at Closing (excluding therefrom
any Free Rent which was disclosed by Seller and agreed to be assumed by Buyer
during the Contingency Period); and
(viii) All other operation expenses incurred in the
management and operation of the Property.
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No insurance policies shall be assigned hereunder, and accordingly there shall
be no proration of insurance premiums.
7.7 Costs and Expenses. Buyer and Seller shall each pay one-half
(1/2) of Escrow Holder's escrow fee. Seller shall pay all documentary transfer
taxes, transfer or conveyance taxes imposed by the City and/or County in which
the Property is located. Seller shall pay any and all delinquent real property
taxes or assessments, and the cost of recording the Grant Deed. Seller shall
pay the cost of the Title Policy, including the Endorsements with liability in
the amount of the Purchase Price. Buyer shall pay all costs of assuming the
Existing Loan up to a maximum of one percent (1%) of the Existing Loan Amount;
any costs in excess of one percent (1%) of the Existing Loan Amount shall be
paid by Seller.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this Agreement, Seller
hereby represents and warrants to and agrees with Buyer as follows:
8.1 Condition of Property. To the best of Seller's knowledge,
without any duty to investigate, there are now, and at the Closing Date there
will be, no material physical or mechanical defects of the Property, including,
without limitation, the plumbing, heating, air conditioning, ventilating, life
safety and electrical systems, and all such items are in good operating
condition and repair and in compliance with all applicable governmental laws,
ordinances, regulations and requirements.
8.2 Use and Operation. To the best of Seller's knowledge, without
any duty to investigate, the use and operation of the Property now are, and at
the time of Closing will be, in substantial compliance with applicable building
codes, environmental, zoning and land use laws, and other applicable local,
state and federal laws, ordinances, regulations and requirements.
8.3 Reports, Contracts and Other Documents. The survey,
mechanical and structural plans and specifications, soil reports, certificates
of occupancy, warranties, and all other books and records relating to or
affecting the Property and all other contracts or documents delivered to Buyer
pursuant to this Agreement or in connection with the execution hereof,
including, without limitation, the Reports and Documents, are and at the time
of Closing will be true and correct copies and, to the extent such
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document was prepared by Seller, contain no material inaccuracies or
misstatements of fact, and all such contracts and other documents relating to
or affecting the Property have been or will be delivered to Buyer pursuant to
this Agreement.
8.4 Condemnation; Land-Use Regulation. To the best of Seller's
knowledge, there are no condemnation, environmental, zoning or other land-use
regulation proceedings, either instituted or planned to be instituted, which
could detrimentally affect the use or operation of the Property for its
intended purpose or the value of the Property, nor has Seller received notice
of any special assessment proceedings affecting the Property.
8.5 Leases. Except as set forth on Exhibit B, Seller has not
executed or otherwise entered into any written or unwritten leases, tenancies,
occupancy agreements, or other agreements with respect to the Property or
affecting possession thereof or any portion thereof or any rights thereto and
there are no such agreements entered into or executed by any third party.
There is no default on the part of Seller, as lessor, or, except as described
on Schedule 8.5 hereto, on the part of any lessee, and, to the best knowledge of
Seller, there exists no condition that with the passage of time or the giving
of notice or both would constitute such a default. No event or transaction
contemplated by this Agreement will conflict with, violate any provision of, or
constitute a default under (with or without the giving of notice and/or the
lapse of time) any of the Leases. Except as disclosed on Schedule 8.5, there is
no conflict between the rights of tenants to space in the Improvements, nor is
any conflict between the terms of this Agreement and any Lease, whether by
original leasing, options to extend, expand or renew, rights of first refusal,
or otherwise.
8.6 Existing Loan. True and correct copies of the Existing Loan
Documents have been delivered or otherwise made available to Buyer. Seller has
not given or received any written notice of a material default under the
Existing Loan Documents that remains uncured.
8.7 Service Contracts, Mechanic's Liens and Other Agreements.
Other than those which are cancelable on thirty (30) day's notice, Seller has
not entered into any service agreements or contracts or other agreements, oral
or written (other than as set forth in this Agreement) relating to the Property
which will be in force on the Closing Date, except as disclosed on Schedule 8.7
hereto, and Seller has not received any notice of any material default
thereunder that remains uncured. Seller shall provide Buyer with true, correct
and complete copies of all agreements listed on Schedule 8.7 pursuant to
Section 5.2 hereof. There will be no contractors, subcontractors,
sub-subcontractors, materialmen or any persons or entities who will be entitled
to a
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mechanic's lien against the Property at Closing. There is no obligation of
Seller under the terms of any contract, lease or other instrument relating to
or affecting the Property; other than the obligations contained in the
contracts, leases and other documents disclosed to Buyer pursuant to this
Agreement. There will be as of the Closing Date no obligation of Buyer under
the terms of any contract, lease or other instrument affecting the Property
other than the obligations contained in the contracts, leases and other
documents which Buyer has elected to assume pursuant to this Agreement.
8.8 Brokerage Commissions. There are no commissions, finder's
fees or other compensation owing or which may become owing to any broker or any
other person or entity with respect to any tenant lease or occupancy agreement
including, without limitation, any such compensation with respect to any future
renewals, extensions or expansions thereof.
8.9 Labor Disputes. There is no current labor dispute with any
maintenance or other personnel or employees of Seller or any contracts with
respect to the Property which could adversely affect the use, operation or
value of the Property.
8.10 Absence of Other Agreements Affecting the Property. To the
best knowledge of Seller, there are no easements, encumbrances or other
agreements which create a lien against the Property except as may be shown in
the Preliminary Title report.
8.11 Default in Respect of Appurtenances. To the best knowledge of
Seller, without any duty to investigate, there is no default under or in
respect of any of the Appurtenances on the part of any party thereto and no
condition exists that with the passage of time or giving of notice or both
would constitute such a default.
8.12 Litigation. There is no litigation pending or, to Seller's
knowledge threatened, against Seller that arises out of the ownership or
operation of the Property or that might detrimentally affect the use or
operation of the Property for its intended purpose or the value of the Property
or is likely to materially and adversely affect the ability of Seller to
perform its obligations under this Agreement.
8.13 Utilities. All water, sewer, gas, electric, telephone, and
drainage facilities and all other utilities required by law or by the current
use and operation of the Property are, and at the time of Closing will be,
connected and operating pursuant to valid permits, and are adequate to service
the Property as it is currently used and to permit full compliance with all
requirements of law and normal usage of the Property by the tenants thereof and
their licensees and invitees.
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8.14 Use Permits and Other Approvals. To the best of Seller's
knowledge, without any duty to investigate, Seller has obtained all licenses,
permits, approvals, easements and rights of way, including proof of dedication,
required from all governmental authorities having jurisdiction over the
Property or from private parties for the normal use and operation of the
Property and to ensure free and unimpeded vehicular and pedestrian ingress to
and egress from the Property as required to permit the normal intended usage of
the Property by the tenants thereof, their invitees and customers.
8.15 Authority of Seller. This Agreement and all documents
executed by Seller which are to be delivered to Buyer at or prior to the
Closing are or at the time of Closing will be duly authorized, executed, and
delivered by Seller, are or at the time of Closing will be legal, valid, and
binding obligations of Seller enforceable in accordance with their terms, and
are and at the time of Closing will be sufficient to convey title (if they
purport to do so).
8.16 No Conflict. The execution and delivery of this Agreement,
the consummation of the transactions herein contemplated, and compliance with
the terms of this Agreement shall not conflict with or result in a breach of
any of the terms of provisions of, or constitute a default under, any
instrument or agreement to which Seller is a party or, to Seller's knowledge,
by which any of the Property is or may be bound, or any applicable regulation
of any governmental agency, or any judgment, order or decree of any court
having jurisdiction over Seller or, to Seller's knowledge, the Property.
8.17 Use and Operation of Property. Seller knows of no facts nor
has Seller failed to disclose to Buyer any fact which would prevent Buyer from
using, leasing and operating the Property after Closing in the normal manner in
which similar properties in the area are used, operated and leased or in the
manner in which the Property has been used, leased and operated prior to the
Closing Date.
8.18 Other Contracts to Convey Property. Seller has not committed
nor obligated itself in any manner whatsoever to sell the Property to any party
other than Buyer.
8.19 Hazardous Substances and Environmental Matters. Neither
Seller, nor to the best knowledge of Seller, any other person or entity, has
ever used, generated, manufactured, produced, stored, released, discharged or
disposed of on, under or about the Property, or transported to or form the
Property any Hazardous Substance (as hereinafter defined) or allowed any other
person or entity to do so. No proceeding or inquiry by any governmental
authority with respect to the presence of any
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Hazardous Substance on the Property or the migration thereof from or to other
property is pending or threatened, nor have any claims been made or threatened
by any third party against Seller or the Property relating to any loss or
injury resulting form any Hazardous Substance. Except as may be disclosed in
any environmental reports delivered by Seller to Buyer pursuant to this
Agreement, there is no occurrence or condition on any real property adjoining
or in the vicinity of the Property that could cause the Property or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of the Property under any Environmental Law (as
hereinafter defined). The term "Environmental Law" shall include, without
limitation, any federal, state or local law, statute, ordinance or regulation
pertaining to health, industrial hygiene or the environment (collectively
referred to as "Environmental Laws"), including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA") as amended, 42 U.S.C. Sections 9601 et seq., and the Resource
Conservation and Recovery Act of 1976 ("RCRA") as amended, 42 U.S.C. Sections
9601 et seq. The term "Hazardous Substance" shall include, without limitation,
(i) those substances included within the definitions "hazardous substances,"
"hazardous materials," "toxic substances," or "solid waste" in CERCLA, RCRA and
the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., as
amended, and in the regulations promulgated pursuant to said laws; (ii) those
substances defined as "hazardous wastes" in Section 25117 of the California
Health & California Health & Safety Code, or as "hazardous substances" in
Section 25316 of the California Health & Safety Code, and in the regulations
promulgated pursuant to said laws; (iii) those substances listed in the United
States Department of Transportation Table (49 CFR 172.101 and amendments
thereto) or by the Environmental Protection Agency (or any successor agency) as
hazardous substances (40 CFR Part 302 and amendments thereto); and (iv) such
other substances, materials, and wastes which are or become regulated under
applicable local, state or federal law, or which are classified as hazardous or
toxic under local, state or federal law, rules or regulations.
8.20 Transactions with Affiliates. Except as disclosed on Schedule
8.20 hereto, there are no agreements between Seller and any Affiliate (as
hereinafter defined) of Seller respecting the Property, including the use,
operation and maintenance thereof. Without limiting the foregoing, there are
no Leases, Service Contracts, or brokerage agreements between Seller and any
Affiliate of Seller respecting the Property or any portion thereof except as
disclosed on Schedule 8.20. As used herein "Affiliate" shall mean and refer to
any entity which controls, is controlled by, or is under common control with
Seller.
ARTICLE 9
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REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to Seller to enter into this Agreement, Buyer
hereby represents and warrants to and agrees with Seller as follows:
9.1 Authority of Buyer. This Agreement and all documents executed
by Buyer which are to be delivered to Seller at or prior to the Closing are or
at the time of Closing will be duly authorized, executed, and delivered by
Buyer, are or at the time of Closing will be legal, valid, and binding
obligations of Buyer enforceable in accordance with their terms.
9.2 Litigation. There is no litigation pending or, to Buyer's
knowledge threatened, against Buyer that is likely to materially and adversely
affect the ability of Buyer to perform its obligations under this Agreement.
9.3 No Conflict. The execution and delivery of this Agreement,
the consummation of the transactions herein contemplated, and compliance with
the terms of this Agreement shall not conflict with or result in a breach of
any of the terms of provisions of, or constitute a default under, any
instrument or agreement to which Buyer is a party or any applicable regulation
of any governmental agency, or any judgment, order or decree of any court
having jurisdiction over Buyer.
ARTICLE 10
COVENANTS OF SELLER
Seller agrees and covenants with Buyer, from the date hereof through
the Closing Date, as follows:
10.1 Maintenance and Operation of the Property. Seller shall
maintain the Property in good order, condition and repair, reasonable wear and
tear excepted, and shall make all repairs, maintenance and replacements as is
necessary to so maintain the Property.
10.2 No Leases or Other Contracts. Seller shall not enter into or
modify any leases, service contracts or other similar agreements with respect
to the Property without the prior written consent of Buyer, which shall not be
unreasonably withheld or delayed. Buyer agrees to respond to Seller's request
for approval within two (2) business days following request therefore.
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10.3 No Other Encumbrances. Seller shall not enter into any
agreements respecting the sale of the Property or any portion thereof, and
shall not enter into any agreements which encumber or subject to lien the
Property or any portion thereof.
10.4 Insurance. Seller shall keep its existing policies of
insurance in full force and effect.
10.5 Disclosure of Changes. If Seller discovers any information or
facts which would materially or adversely change the representations and
warranties of Seller contained in this Agreement, Seller shall promptly give
notice to Buyer of such information or facts.
ARTICLE 11
DAMAGE OR DESTRUCTION; CONDEMNATION
In the event that, after the date hereof but prior to the Closing
Date, either any portion of the Property is taken pursuant to eminent domain
proceedings or any of the improvements on the Property are damaged or destroyed
by any casualty, Seller shall have no obligation to repair or replace any such
damage or destruction. Seller shall, upon consummation of the transaction
herein provided, assign to Buyer all claims of Seller respecting any
condemnation or casualty insurance coverage, as applicable, and all
condemnation proceeds or proceeds from any such casualty insurance received by
Seller on account of any casualty (the damage from which shall not have been
repaired by Seller prior to the Closing Date) as applicable, and Seller shall
give Buyer a credit equal to the deductible portion of Seller's insurance
policy attributable to the Property. In the event (i) the condemnation award
shall equal or exceed One Hundred Thousand Dollars ($100,000) or otherwise
materially and adversely affect the Property, as reasonably determined by
Buyer, or (ii) the cost of repair of damage to the Property on account of a
casualty, shall equal or exceed One Hundred Thousand Dollars ($100,000) or
otherwise materially and adversely interfere with the operations of the
Property, as reasonably determined by Buyer, Buyer may, at its option,
terminate this Agreement by notice to Seller, given on or before the Closing
Date, in which event this Agreement shall terminate, the Deposit, together with
all interest earned thereon, shall be returned to Buyer, and each party shall
be relieved of all further obligations hereunder.
ARTICLE 12
DELIVERY OF POSSESSION AND ENTRY ON PROPERTY
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12.1 Delivery of Possession. Possession of the Property shall be
delivered to Buyer on the Closing Date.
12.2 Entry on Property. From the date hereof until the Closing,
Seller shall afford Buyer reasonable access to the Property for the purpose of
conducting Buyer's Inspections. Buyer agrees to coordinate all such visits to
the Property with a representative of Seller, and to conduct all such visits in
a commercially reasonable manner which minimizes any unnecessary disruption to
tenants. Buyer agrees to keep the Property free and clear of any mechanic's
liens or other liens in connection with Buyer's Inspections and Reports, and
Buyer indemnifies and holds Seller harmless from and against any and all
liability, loss, cost, damage and/or expense, including, without limitation,
attorneys' fees and costs, resulting directly from Buyer's entry onto the
Property.
12.3 Buyer's Obligation to Maintain Insurance. Prior to any entry
onto the Property pursuant to this Agreement by Buyer or any person or entity
acting on behalf of Buyer, Buyer shall provide Seller with a certificate of
insurance confirming the effectiveness of a policy of liability insurance in
favor of Buyer, which names Seller as additional insureds, with a combined
single limit coverage in an amount of not less than One Million Dollars
($1,000,000) per occurrence and which is not amendable or cancelable on less
than thirty (30) days prior written notice.
12.4 Marketing of Property. From November 1, 1997 until the
Closing Date, Buyer shall have the right, but not the obligation, to market
the Property for lease. Seller agrees to cooperate with Buyer in Buyer's
marketing efforts.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Seller. Seller hereby agrees to indemnify
Buyer and hold Buyer harmless from and against any and all claims, demands and
losses, including, without limitation, reasonable attorneys' fees and costs
suffered by Buyer as a direct or indirect result of:
(a) Any misrepresentation or breach of warranty or breach
of covenant made by Seller in this Agreement or any document, certificate, or
exhibit given by Seller or delivered by Seller to Buyer pursuant to or in
connection with this Agreement; and
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(b) Any and all obligations, liabilities, claims, liens
or encumbrances, whether direct, contingent or consequential and no matter how
arising, and in any way related to the Property and arising or accruing on or
before the Closing Date, or in any way related to or arising from any act,
conduct, omission, contract or commitment of Seller (or any of its agents or
employees) at any time or times on or before the Closing Date.
13.2 Indemnification by Buyer. Buyer hereby agrees to indemnify
Seller and hold Seller harmless from and against any and all claims, demands
liabilities, liens, costs, expenses, penalties, damages and losses, including,
without limitation, reasonable attorneys' fees and costs suffered by Seller as
a direct or indirect result of:
(a) Any misrepresentation or breach of warranty or breach
of covenant made by Buyer in this Agreement or any document, certificate, or
exhibit given by Buyer or delivered by Buyer to Seller pursuant to or in
connection with this Agreement; and
(b) Any and all obligations, liabilities, claims, liens
or encumbrances, whether direct, contingent or consequential and no matter how
arising, and in any way related to the Property and arising or accruing after
the Closing Date, or in any way related to or arising from any act, conduct,
omission, contract or commitment of Buyer (or any of its agents or employees)
at any time or times after the Closing Date.
13.3 Warranty and Indemnity Regarding Estoppels. If Seller has
failed to deliver to Buyer any estoppel certificates required to be delivered
pursuant to Section hereof on or before the Closing Date and Buyer
nevertheless elects to close the transaction, Seller shall indemnify Buyer with
respect to any claim made by any tenant or other party which is based upon
facts not consistent with the representations and warranties of Seller herein
or set forth on the respective unmodified form of estoppel certificate to have
been provided by such tenant.
The provisions of this Article shall survive the execution and
delivery of this Agreement, the delivery of the Grant Deed and transfer of
title.
ARTICLE 14
MISCELLANEOUS
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14.1 Notices. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing and sent by
commercial courier service, United States mail, registered or certified mail,
postage prepaid, return receipt requested, and addressed as follows:
If to Buyer: Arden Realty Limited Partnership
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
with a copy to: Christensen, Miller, Fink, Jacobs,
Xxxxxx, Weil & Xxxxxxx, LLP
2121 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
If to Seller: c/o Xxxxxxx Xxxxxxxxx
0000 Xxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
with a copy to: Irell & Xxxxxxx
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
If to Escrow Holder: First American Title Co. of LA
-------------------------------------
000 X. Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx, XX 00000
-------------------------------------
Attn: Xxxxxx Xxxxxxxx
-------------------------------------
If to the Title Company: First American Title Co. of LA
-------------------------------------
000 X. Xxxxxxx Xxxxxx
-------------------------------------
Xxxxxxxx, XX 00000
-------------------------------------
-------------------------------------
Attn: Xxxxxx Xxxxxxxx
-------------------------------------
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or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid. If personally delivered, such notices or
other communications shall be deemed delivered upon delivery. If sent by
commercial courier service, United States mail, registered or certified mail,
postage prepaid, return receipt requested, such notices or other communications
shall be deemed delivered upon delivery or refusal to accept delivery as
indicated on the return receipt.
14.2 Brokers and Finders. In connection with the transactions
contemplated by this Agreement (a) Seller hereby represents and warrants to
Buyer that Seller has not, and shall not, incur any obligation to any third
party for the payment of any broker's fee, finder's fee, commission or other
similar compensation, and (b) Buyer hereby represents and warrants to Seller
that Buyer has not, and shall not, incur any obligation to any third party for
the payment of any broker's fee, finder's fee, commission or other similar
compensation other than to CB Commercial. In the event of a claim for broker's
fee, finder's fee, commission or other similar compensation in connection
herewith, Buyer, if such claims is based upon any agreement alleged to have
been made by Buyer, hereby agrees to indemnify and hold Seller harmless from
and against any and all liability, loss, cost, damage and/or expense
(including, without limitation, reasonable attorneys' fees and expenses) which
Seller may sustain or incur by reason of such claim, and Seller, if such claims
is based upon any agreement alleged to have been made by Seller, hereby agrees
to indemnify and hold Buyer harmless from and against any and all liability,
loss, cost, damage and/or expense (including, without limitation, reasonable
attorneys' fees and expenses) which Buyer may sustain or incur by reason of
such claim. The provisions of this Section shall survive the Closing.
14.3 Successors and Assigns. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereof and their respective
successors, heirs, administrators and assigns. Buyer may assign its rights or
obligations under this Agreement upon notice to Seller, and Buyer shall be
relieved of any further obligations hereunder provided that such assignee
assumes the obligations of the Buyer hereunder in writing.
14.4 Amendments. This Agreement may be amended or modified only by
a written instrument executed by the parties hereto.
14.5 Continuation and Survival of Representations and Warranties.
All representations and warranties by the respective parties contained herein
or made in writing pursuant to this Agreement are intended to be and shall
remain true and correct as of the time of Closing, shall be deemed to be
material, and shall survive the execution and delivery of this Agreement, and
the execution and delivery of the Deed
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and the transfer of title to the Property for a period of two (2) years
following the Closing.
14.6 Interpretation. Whenever used herein, the term "including"
shall be deemed to be followed by the words "without limitation." Words used in
the singular number shall include the plural, and vice-versa, and any gender
shall be deemed to include each other gender.
14.7 Captions. The captions and headings of the Articles and
Sections of this Agreement are for convenience of reference only, and shall not
be deemed to define or limit the provisions hereof.
14.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
14.9 Merger of Prior Agreements. This Agreement, including the
exhibits and schedules hereto, constitutes the entire agreement between the
parties with respect to the purchase and sale of the Property and supersedes
all prior agreements and understandings between the parties hereto relating to
the subject matter hereof.
14.10 Attorneys' Fees. In the event either Buyer or Seller brings
any suit or other proceeding with respect to the subject matter or enforcement
of this Agreement, the prevailing party (as determined by the court, agency or
other authority before which such suit or proceeding is commenced) shall, in
addition to such other relief as may be awarded, be entitled to recover
attorneys' fees, expenses and costs of investigation as actually incurred
(including, without limitation, attorneys' fees, expenses and costs of
investigation incurred in appellate proceedings, costs incurred in establishing
the right to indemnification, or in any action or participation in, or in
connection with, any case or proceeding under Chapter 7, 11 or 13 of the
Bankruptcy Xxxx, 00 Xxxxxx Xxxxxx Code Sections 101 et seq., or any successor
statutes).
14.11 Time of the Essence. Time is of the essence of this
Agreement.
14.12 Election of Remedies. Except as otherwise specifically
provided herein to the contrary in Section hereof, no right or remedy
conferred upon either party in this Agreement is intended to be exclusive of
any other right or remedy contained herein or now or hereafter available to
either part at law or in equity, and every such right and remedy shall be
cumulative and shall be in addition be every other right or remedy contained in
this Agreement or now or hereafter available to either party at law or in
equity.
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14.13 Authority. The parties signing below represent and warrant
that they have the requisite authority to bind the entities on whose behalf
they are signing.
14.14 Exhibits. The exhibits and schedules attached hereto are
hereby incorporated by reference herein.
14.15 Severability. The invalidity or unenforceability of any one
or more of the provisions of this Agreement shall not affect the validity or
enforceability of any of the other provisions of this Agreement.
14.16 Further Assurances. The parties hereto agree to execute,
acknowledge and deliver any and all additional papers, documents and other
assurances and shall perform any and all acts and things reasonably necessary
in connection with the performance of the obligations hereunder and to carry
out the intent of the parties hereto.
14.17 Effect of Waiver. A waiver by either party hereto shall not
affect either party's right to enforce the provisions contained herein, nor
shall any extension or waiver be held to be an extension of time or waiver of
any prior or subsequent breach of the same or any other obligation under this
Agreement.
14.18 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.19 No Third Parties Benefitted. This Agreement is made and
entered into solely for the benefit of Seller and Buyer, their successors and
assigns, and no other person or entity shall have any rights hereunder.
14.20 Specific Performance. The parties understand and agree that
the Property is unique and for that reason, among others, Buyer will be
irreparably damaged in the event that this Agreement is not specifically
enforced. Accordingly, in the event of any breach or default in or of this
Agreement or any of the warranties, terms or provisions hereof by Seller, Buyer
shall have, in addition to a claim for damages for such breach or default, and
in addition and without prejudice to any right or remedy available at law or in
equity, the right to demand and have specific performance of this Agreement.
14.21 Memorandum of Agreement. Concurrently with the execution of
this Agreement, Seller shall execute, acknowledge and deliver to Buyer a
Memorandum
28
29
of Agreement in the form of Exhibit k hereto, which Buyer may record in the
appropriate records of the County in which the Property is situated.
14.22 Business Day. As used herein, Business Day shall mean and
refer to any day in which banking institutions are open for business and the
County Recorder's Office of Los Angeles County, California is accepting
documents for recordation in their real estate records.
14.23 Furnishing of Audit Letter. Seller agrees to furnish, from
time to time upon the request of Buyer, an Audit Letter substantially in the
form of Exhibit L hereto, to Buyer's accountants.
14.24 Tax Deferred Exchange. Seller may desire to dispose of the
Property through a tax deferred exchange which qualifies for non- recognition
of gain under Section 1031 of the Internal Revenue Code. Buyer shall cooperate
with Seller in attempting to effectuate such exchange, including, but not
limited to, the execution of such documentation as may be reasonably necessary
to effect such exchange, provided that (i) Buyer shall not incur any additional
liability in connection with an exchange for the benefit of Seller, (ii) Buyer
shall not be obligated to take title to any real property (other than the
Property), (iii) the date of Closing shall not be extended as a result of the
exchange, without Buyer's prior written consent, and (iv) any additional costs
and charges attributable to the exchange, including, but not limited to,
attorneys' fees, brokers' commissions and other transaction related expenses
shall be paid for by Seller. Buyer and Seller further agree that Seller may
substitute an intermediary ("Intermediary") to act in place of Seller as the
seller of the Property. The Intermediary shall be designated in writing by
Seller. Upon identification of Intermediary, Intermediary shall be substituted
for Seller as the seller of the Property. Buyer agrees that performance by
Intermediary will be treated as performance by Seller. Seller shall
unconditionally guarantee the full and timely performance by Intermediary of
each and every one of the representations, warranties, covenants, indemnities,
obligations and undertakings, and, in the event of breach, Buyer may proceed
directly against Seller on this guarantee without the need to join Intermediary
as a party to any action against Seller. Seller unconditionally waives any
defense that it might have as guarantor that it would not have if it had made
or undertaken these representations, warranties, covenants, indemnities,
obligations and undertakings directly. In the event of the breach of any
representations, warranties, covenants, obligations and undertakings by Seller
or Intermediary or in the event of any claim upon any indemnity of Seller or
Intermediary (whether the representation, warranty, covenant, indemnity,
obligation or undertaking is express or implied), Buyer's exclusive recourse
shall be against the Seller and Buyer shall have no recourse of any type
against the Intermediary arising from this transaction.
29
30
14.25 Arbitration. ANY CONTROVERSY OR CLAIM ARISING UNDER OR
RELATING TO THE TERMS OF THIS AGREEMENT OR ANY OF THE EXHIBITS ATTACHED TO IT,
AND ANY PROCEEDINGS TO ENFORCE THIS AGREEMENT OR RIGHTS UNDER THIS AGREEMENT
AND ITS EXHIBITS SHALL BE SETTLED BY ARBITRATION IN THE CITY OF LOS ANGELES, IN
ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. THE ARBITRATOR(S) SHALL HAVE THE RIGHT TO DETERMINE THE SCOPE OF
THEIR JURISDICTION AND GRANT EQUITABLE RELIEF, INCLUDING, WITHOUT LIMITATION,
THE RIGHT TO ORDER THE EXPUNGEMENT OF ANY LIS PENDENS WHICH THE ARBITRATOR(S)
DEEM IMPROPER. THE PREVAILING PARTY SHALL BE ENTITLED TO REASONABLE ATTORNEYS'
FEES AND OTHER REASONABLE COSTS INCURRED IN CONNECTION WITH THE ARBITRATION OR
ANY OTHER LITIGATION PLUS INTEREST ON THE AMOUNT OF ANY AWARD. JUDGMENT UPON
THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION THEREOF. THIS PARAGRAPH MUST BE INITIALED BELOW IN ORDER FOR THIS
PARAGRAPH OF THE AGREEMENT TO BE BINDING.
NOTICE: BY INITIALLING IN THE SPACE BELOW, YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW, AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO
HAVE THE DISPUTE LITIGATION IN A COURT OR JURY TRIAL. BY INITIALLING
IN THE SPACE BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN
THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL ARBITRATION.
/s/ WB /s/ VJC
-------------------------- --------------------------
Seller's Initials Buyer's Initials
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
30
31
Seller: Activity Business Associates, LLC,
a California limited liability company
By:
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Buyer: Arden Realty Limited Partnership,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Its: President and COO
------------------------------
31
32
Seller: Activity Business Associates, LLC,
a California limited liability company
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Buyer: Arden Realty Limited Partnership,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
---------------------------------
Its:
------------------------------
32
33
LIST OF EXHIBITS
Exhibit A: Description of the Land
Exhibit B: Leases
Exhibit C: Grant Deed
Exhibit D: Assignment of Leases
Exhibit E: Xxxx of Sale
Exhibit F: Assignment of Service Contracts
Exhibit G: Assignment of Intangible Property
Exhibit H: Form of Estoppel Certificate
Exhibit I: Form of Lender Estoppel Certificate
Exhibit J: Affidavit of Non-Foreign Status
Exhibit K: Memorandum of Agreement
Exhibit L: Form of Audit Letter
34
LIST OF SCHEDULES
Schedule 8.5: Lease Disclosures
Schedule 8.7: Service Contract Disclosures
Schedule 8.20: Disclosures Regarding Affiliates
35
SCHEDULE 8.5
------------
LEASE DISCLOSURES
Pursuant to paragraph 8.5, page 17, of this agreement, Seller hereby certifies
that no conditions exist that requires disclosure in schedule 8.5, other than
the following:
a) Seller currently in under lease with Capstone Pharmacy, (tenant). A copy
of the lease is in Buyers possession. Terms of the lease call for Seller
(lessor) to carpet units 110, 209, 210. Tenant has been too busy to have
the new carpeting installed, but retains the right to require Seller
(lessor) to install new carpeting at his request.
Schedule 8.5 Lease Disclosures
36
SCHEDULE 8.7
------------
SERVICE CONTRACT DISCLOSURES
Pursuant to paragraph 8.7, page 17 of this agreement, there exists no service
contracts or other agreements on the property which are not cancelable on 30
days notice. There are no entities of any kind entitled to lien the property.
Seller has no obligation under any contract, lease, or other instrument other
than that specified in the contract, lease, or other instrument given to Buyer
and outlined in that letter dated October 7, 1997 from Xxxx Xxxx to Xxxxxxxx X.
Xxxx. All of the above statements shall be true as of closing.
Schedule 8.7 Service Contract Disclosure 10.16.97
37
SCHEDULE 8.20
-------------
TRANSACTIONS WITH AFFILIATES
Pursuant to paragraph 8.20, page 20 of this agreement, there are no transactions
with affiliates other than the following:
a) A project management agreement with Marus Enterprises, owned by Xxxxxxx
Xxxx, the managing member of the Seller. Said agreement is to be
terminated upon the closing of this transaction.
b) There exists a lease between Seller and Marus Enterprises on 939 sq. ft.,
unit 215, building 3. Buyer is in possession of said lease. Said lease
shall terminate upon closing and tenant shall vacate the unit on or before
2-1-98. Tenant shall pay Buyer $710.94 per month from closing to vacating
the unit.
Schedule 8.20 Trans. w/Affiliates 10.16.97
38
Activity Business Park
Rent Abatement
Rent
Tenant Date Abatement
Staff Builders Aug-98 $ 1,675.00
Sep-98 1,675.00
SmithKline Xxxxxxx Feb-98 11,984.09 represents free rent on original
Jul-98 12,276.39 lease executed 1991 -- Tenant
Feb-99 12,583.30 receives no free rent on expansion
Jul-99 12,890.21 space taken in 1994.
Xxxxx Fargo Alarm Feb-98 1,523.13
Mar-98 1,523.13
----------
$56,130.25
1998 $30,656.74
1999 25,473,51
----------
$56,130.25
The above represents the total Rent abatement on activity Business Park. No free
rent has been given on project since 1995 as market conditions have been in
Landlord's favor.
39
EXHIBIT A
DESCRIPTION OF PROPERTY
The Property is situated in the County of San Diego, State of California and is
described as follows:
PARCEL 1 OF PARCEL MAP XX. 00000, XXXX XX XXX XXXXX, XXXXXX OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY.
A.P.N.: 000-000-00-00
EXHIBIT A
40
Leases
EXHIBIT B
41
Activity Business Park
Rent Roll
October 1997
SIZE LEASE LEASE CURRENT
BLDG UNIT TENANT SQ. FT. START END RENT COMMENTS
1 101 IMAGE Hospitality Consultants 1,920 03/01/91 02/29/00 1,454.00
1 104 Computer Processing Unlimited 9,600 06/01/90 01/31/02 8,202.00 occupy suites 102, 103, 104, 105, 106
1 107 Micro Precision Calibration 1,920 09/01/97 08/31/99 1,497.60
1 108 Vivid Graphics 1,920 01/01/93 05/31/98 1,572.00
1 109 USA Today 1,920 05/01/93 04/30/03 1,559.00
1 110 Hi Tech Electronics 1,920 04/01/94 03/31/99 1,398.00
1 111 Xxxx-Xxx Deli 650 07/01/89 04/30/99 549.00
1 112 Xxxxxx Printing, Inc. 3,240 11/01/89 02/28/01 2,763.00
2 101 Natel Engineering Company, Inc. 1,440 05/01/92 02/28/99 1,152.00
2 102 A Catered Affair 1,440 01/01/96 08/31/00 1,048.00
2 103 Force Electronics, Inc. 1,536 06/01/93 05/31/98 1,212.50
2 104 Jadestone Financial Corp. 1,536 05/01/91 05/14/99 1,198.00
2 105 Xxxxxxx Xxxxxx Escrow 2,896 07/01/90 09/30/99 2,409.68 See Note 1
2 106 Xxxxxxx & Associates 2,784 01/06/95 01/31/98 1,948.80 occupy suites 106, 107 / See Note 2
2 109 A Catered Affair 2,720 01/01/91 08/31/00 2,177.00 occupy suites 108, 109
2 110 San Diego Auto Credit, Inc. 1,536 05/01/91 04/30/99 1,152.00
2 111 The Trendex Group 1,536 03/01/95 02/28/98 1,075.20
2 112 Phanatech 2,880 09/01/95 08/31/00 2,037.76 occupy suites 112, 113
3 101 Xxxxxx Xxxx, Inc. 3,000 04/01/92 03/31/02 2,460.00
3 102 Xxxxxx X. Xxxx 1,011 04/01/97 03/31/00 788.58
3 103 Arch Communications 1,932 01/01/96 12/31/02 1,522.25
3 104 1st Choice Home Healthcare 3,498 08/01/93 12/31/98 3,189.00 occupy suites 104, 105
3 106 Warehouse Office Supply 1,680 11/01/89 12/31/97 1,204.00
3 107 Respironics Colorado, Inc. 1,983 11/01/92 10/31/97 1,624.00 See Note 3
3 108 Phanatech 1,983 06/01/96 05/30/00 1,444.00
3 110 Phanatech 4,035 07/01/97 08/31/00 2,905.00 occupy suites 109, 110
3 208 Construction Notice Services 9,546 07/01/90 06/30/99 7,148.00
3 210 Executive Assist Integration 2,040 05/15/96 11/30/98 1,499.40
3 211 Construction Collection Srvcs 1,254 03/01/95 02/28/98 987.53
3 212 American Home Health 1,194 03/01/95 02/28/98 896.00
3 213 Pacific Rim Personnel Services 1,154 09/01/93 03/31/98 832.03
3 214 NSAS Cargo International 920 10/01/94 12/31/97 670.16
3 215 NARUS Enterprises 939 01/01/95 12/31/98 710.94
3 216 Scanivalve Corp 939 09/01/95 08/31/99 704.25
3 217 Executive Assist Integration 902 12/01/94 11/30/98 662.97
3 218 Executive Assist Integration 696 07/15/96 11/30/98 511.56
4 101 SmithKline Xxxxxxx 25,559 02/15/91 02/14/01 29,323.61 occupy ste 101-106 & Xxxx 0 xxx 000
0 000 Xxxx Photo 9,730 03/01/90 02/28/00 10,679.00 occupy suites 107 - 108
4 109 Vextra Design Inc. 4,102 03/01/97 07/31/00 2,707.00
4 110 Xxxxx Fargo Alarm Service 4,102 12/01/88 01/31/99 3,046.26
5 101 American Pathology Resources 15,944 03/01/96 01/31/03 14,123.00
5 105 Vacnet 3,870 0.00
5 107 Emerald Digital Diagnostics 3,870 03/01/97 02/28/03 3,251.00
5 110 Capstone Pharmacy Services 12,074 02/01/91 02/28/04 11,326.00
Total Rent 138,621.08
Total C.A.N. 5,521.68
TOTAL Leased 157,481 97.60% 144,142.76
TOTAL Vacant 3,870 2.40%
TOTAL 161,351
42
Activity Business Park
Notes to Rent Roll
October 1997
1. Xxxxxxx Xxxxxx Escrow: In addition to the monthly Base Rent, the tenant is
repaying $21,500 of deferred rent at the rate of $537.50 per month. As of
September 30, 1997 the balance is $12,362.50.
2. Xxxxxxx & Associates: During August 1997, the tenant requested a buyout of
the remaining portion of their lease which expired on January 1, 1998. The
tenant's monthly Base Rent was $1,948.80 ($0.70/sqft). The revenue received
from the buyout is being accounted for as prepaid rent. Subsequent to the
buyout agreement, the suite was re-leased for five years to Mikron
Instruments, Inc. with a starting monthly Base Rent of $2,366.40
($0.85/sqft) commencing on December 1, 1997.
3. Respironics Colorado, Inc.: The tenant has expressed the desire to extend
the lease for two years. They have been presented with a lease addendum to
extend the lease with a starting base rent of $1,562.00 ($0.79/sqft).
43
Exhibit C
44
RECORDING REQUESTED BY AND
WHEN RECORDED, MAIL THIS DEED
AND TAX STATEMENTS TO:
Christensen, Miller, Fink, Jacobs,
Xxxxxx, Xxxx & Xxxxxxx, LLP
2121 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, Esq.
------------------------------------------
GRANT DEED
A.P.N._____________
The undersigned grantor(s) declare(s):
Documentary transfer tax is SEE SEPARATE DECLARATION.
() computed on full value of property conveyed, or
() computed on full value less value of liens and encumbrances remaining
at time of sale.
() Unincorporated area: ( ) City of_____________________, and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
ACTIVITY BUSINESS ASSOCIATES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY,
hereby GRANT(S) to
ARDEN REALTY LIMITED PARTNERSHIP, A MARYLAND LIMITED PARTNERSHIP,
the following described real property in the City of San Diego, County of San
Diego, State of California:
AS PER LEGAL DESCRIPTION ATTACHED HERETO, MADE A PART HEREOF AND
ATTACHED HERETO AS EXHIBIT A.
Signature of Grantor
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
----------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
45
ASSIGNMENT OF LEASES AND SECURITY DEPOSITS
------------------------------------------
THIS ASSIGNMENT OF LEASES AND SECURITY DEPOSITS is made this day of
____, ___________, 1997, by and between ACTIVITY BUSINESS ASSOCIATES, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY, ("Assignor"), and ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Assignee") with reference to the
following facts:
C. Assignor, as Lessor, and each of the lessees named in Exhibit "A"
attached hereto, have entered into a lease for the space indicated on said
Exhibit "A" comprising a portion of the improvements constructed upon that
certain parcels of real property situated in the City of San Diego, State of
California (the "Property"), more particularly described in Exhibit "B" attached
hereto (all of said leases referred to in Exhibit "A" as amended to the date
hereof being hereinafter collectively referred to as the "Leases").
B. Assignor has received rent security deposits and rents prepaid more
than one (1) month in advance from lessees under some of the Leases, in the
total amount of $ in cash referred to in Exhibit "A" attached hereto and made a
part hereof (collectively the "Security Deposits").
C. Assignor now desires to assign and transfer to Assignee all of
Assignor's interest as lessor in the Leases and the Security Deposits, subject
to the rentals, terms, covenants, obligations, easements and restrictions set
forth therein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee, and its successor
and assigns, all of Assignor's interest as Lessor in and to the Leases and the
Security Deposits, subject to said rentals, terms, covenants, obligations,
easements and restrictions therein provided.
2. Assignee hereby (a) accepts the assignment of the Leases and the
Security Deposits, shall be entitled to all rights and benefits accruing to the
lessor thereunder, and (b) agrees to assume and be bound by the terms of the
Leases subject to the terms and provisions of each of the Leases, from and after
the date hereof, and (c) agrees to defend and indemnify Assignor to the extent
of Assignee's interest in the Property from all obligations of landlord under
the Leases or obligations as landlord which accrue from and after the date
hereof.
Exhibit D
46
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of July _____, 1997, between
Seller and Arden Realty Limited Partnership and the covenants, agreements and
limitations contained therein are incorporated herein by reference as if herein
set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
of Leases and Security Deposits as of the day and year first above written.
"Assignor":
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
"Assignee':
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
-----------------------------------
Its:
----------------------------------
47
XXXX OF SALE
ACTIVITY BUSINESS ASSOCIATES, LLC, A CALIFORNIA LIMITED LIABILITY
COMPANY, ("SELLER"), for good and valuable consideration heretofore paid by
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership ("Buyer"), the
receipt and sufficiency of which are hereby acknowledged, hereby sells,
transfers, grants, bargains, conveys, assigns, and delivers to Purchaser, its
successors and assigns free and clear of all liens and encumbrances: All
fixtures, fittings, appliances, apparatus, equipment, machinery, chattels and
personal property, to the extent owned by Seller, and listed in Exhibit "A"
attached hereto, including all building maintenance supplies and heating,
ventilating and air conditioning, electrical, mechanical and plumbing equipment
and facilities which are used in connection with the operation or maintenance of
the improvements erected upon the land described in Exhibit "B" attached hereto.
This instrument is given pursuant to that certain Agreement of Purchase
and Sale and Escrow Instructions dated as of July _, 1997, between Seller and
Buyer and the covenants, agreements and limitations contained therein are
incorporated herein by reference as if herein set out in full.
IN WITNESS WHEREOF, Seller has executed this instrument this ___ day of
______________.
"SELLER"
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Exhibit E
48
ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES
AND GUARANTEES
THIS ASSIGNMENT OF SERVICE CONTRACTS, WARRANTIES AND GUARANTEES is made
this ____ day of __________, by and between ACTIVITY BUSINESS ASSOCIATES, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY ("Assignor"), and ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Assignee"), with reference to the
following facts:
A. Assignor is the owner of the benefits of, subject to the burdens
contained in, those certain service agreements currently in effect in connection
with the business of Assignor related to the Property being purchased by
Assignee concurrently herewith, all of which service contracts and agreements
(the "Service Agreements") are annexed hereto as a part of, or are described in,
Exhibit "A" attached hereto and made a part hereof.
B. Assignor has heretofore used or acquired (or may have acquired)
certain intangible rights in connection with the Property and/or the
Improvements including but not limited to various trade names, logos, easements,
licenses, permits, air rights, certificates of occupancy, warranties, rights of
way, signs, sewer agreements, water line agreements, utility agreements, water
rights and oil, gas and mineral rights and other intangible property
(collectively the "Intangibles").
C. Assignor is the owner, or entitled to the benefit, of the warranties
and guaranties, exprees and implied, covering the fixtures and equipment located
on the Property ("Warranties and Guaranties").
D. Assignor now desires to assign and transfer to Assignee all of its
right, title and interest in the Service Agreements, Intangibles and the
Warranties and Guaranties subject to all of the payments, terms, covenants,
obligations, agreements and reductions therein set forth.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinbelow set forth, it is agreed:
1. Assignor hereby assigns and transfers to Assignee and its successors
and assigns, all Assignor's right, title and interest in the Service Agreements,
Intangibles and the Warranties and Guaranties subject to said payments, terms,
covenants, obligations, agreements and restrictions.
2. Assignee hereby (a) accepts the assignment of the Guaranties, shall
be entitled to all rights and benefits accruing to the Assignor thereunder, (b)
agrees to assume and be bound by the terms thereof from and after the date
hereof, and (c) agrees to defend and indemnify Assignor to the extent of
Assignee's
Exhibit F
49
interest in the Property from all obligations of Assignor under the Service
Contracts, Intangibles and the Warranties and Guaranties or from any which
accrue from and after the date hereof.
3. This instrument is given pursuant to that certain Agreement of
Purchase and Sale and Escrow Instructions dated as of September ___, 1997,
between Seller and Arden Realty Limited Partnership and the covenants,
agreements and limitations contained therein are incorporated herein by
reference as if herein set out in full.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
of Service Contracts, Warranties and Guarantees as of the day and year first
hereinabove written.
"Assignor':
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
"Assignee":
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation
Its: General Partner
By:
----------------------------
Its:
---------------------------
50
ASSIGNMENT OF INTANGIBLE PROPERTY
THIS ASSIGNMENT OF INTANGIBLE PROPERTY (this "Assignment") is made as
of ________, 199_ by Activity Business Associates, LLC, a California limited
liability company ("Assignor"), to Arden Realty Limited Partnership, a Maryland
limited partnership ("Assignee") pursuant to the provisions of that certain
Agreement of Purchase and Sale dated as of September __, 0000, (xxx "Xxxxxxxx
Agreement"), by and between Assignor and Assignee.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, subject to the terms and provisions of the
Purchase Agreement, Assignor hereby sells, transfers, conveys and assigns to
Assignee the Intangible Property, as such term is defined in the Purchase
Agreement, including those items set forth on Schedule A attached hereto and
made a part hereof.
IN WITNESS WHEREOF, this Assignment has been executed by Assignor on
the date set forth above.
"ASSIGNOR"
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Exhibit G
51
TENANT ESTOPPEL CERTIFICATE
Arden Realty Limited Partnership
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Ms. Brig Troy
Re: Tenant Lease for ________________
_______________, California
Suite _________
Ladies and Gentlemen:
We understand that you are the proposed purchaser of an ______________
building complex located at ____________________, California (the "Property")
in which the undersigned is a tenant. We further understand that in connection
with your purchase of the Property it is necessary that you understand the
precise nature of our tenancy and in order to so do, we hereby warrant and
represent to you that with respect to our lease, as amended (the "Lease") and
more particularly described in Schedule "A" attached hereto (the "Schedule")
the following is true and correct:
1. The Lease constitutes the entire agreement between the
undersigned and the landlord thereunder with respect to the subject matter
thereof and the Lease has not been modified, amended or supplemented in any way
except by the amendments or other agreements described in the Schedule.
2. The summary of the basic terms of the Lease contained in the
Schedule is true and correct.
3. Except as provided in the Schedule, the undersigned has not
assigned, transferred or hypothecated the Lease or any interest therein or
entered into a sublease for any portion of the premises covered by the Lease
and no person or firm other than the undersigned or its employees is in
possession of such premises or any portion thereof.
4. The undersigned is not in default (or with the giving of
notice or the passage of time or both will not be in default) under the Lease
and the undersigned has no claim against, off-set, credit, defense,
counterclaim or deductions against the landlord thereunder, or any rent or
other sums due or payable under the Lease, and the landlord thereunder is not
in default (or with the giving of notice or the passage of time or both will
not be in default) under the Lease.
Exhibit H
52
5. The undersigned has no option, right of first refusal or
otherwise to purchase the Property or any portion thereof or any interest
therein and the only interest of the undersigned in the Property is that of a
tenant pursuant to the terms of the Lease.
6. The undersigned does not engage in the generation, storage or
disposal of "Hazardous Materials" on the Property and to the best of the
undersigned's knowledge, there are no Hazardous Materials located in, on, under
or in the vicinity of the Premises demised by the Lease except for normal
office supplies. The undersigned agrees not to use, store, or permit the use,
storage or release of any Hazardous Materials on, under or about the Premises
or the Property other than what is permitted by applicable law, codes,
regulations or restrictions and used by the undersigned in accordance with
applicable laws and in amounts as dictated by the normal conduct of the
undersigned's business. The term "Hazardous Material" means any toxic or
hazardous substance, material or wastes which if or becomes regulated by any
local government, the State of California, the United States government or any
agency or division thereof.
7. The undersigned is not the subject of any bankruptcy,
insolvency, debtor's relief, reorganization, receivership or other similar
proceedings.
8. The person executing this Certificate hereby warrants and
represents that he or she has the power and authority to execute and deliver
this Certificate on behalf of the tenant named herein.
9. The undersigned as tenant hereby ratifies and confirms the
Lease and the tenancy created thereby and upon consummation of sale and notice
thereof, agrees to accept you or your assignees and your lenders as the
landlord thereunder.
10. The undersigned agrees to notify your lenders at the address
designated by such lenders of any default on the part of Landlord under the
Lease, and further agrees that notwithstanding any provisions of the Lease, no
notice, cancellation or termination thereof shall be effective unless Lender
shall have received such notice and have failed to cure or commence to cure
such default within a reasonable time following receipt of such notice and the
expiration of any cure period applicable thereto.
53
We understand that the current owner, ____________________, you and/or
any other purchaser(s) and their respective lenders will, if you proceed with
the purchase of the Property, rely on this Certificate.
Very truly yours,
___________________________________
Name of Tenant
___________________________________
Signature
___________________________________
Date
54
SCHEDULE"A"
-----------
Summary of Lease Terms
----------------------
(1) Name of Tenant:_______________________________________________________
(2) Lease Date:___________________________________________________________
(3) Amendment Dates, Separate Agreements, if any:_________________________
(4) Suite No.:_________; Estimated Square Footage:________________________
(5) Lease Start Date:____________; Lease End:_____________________________
(6) Remaining Option(s) to Extend:________________________________________
(7) Option(s) for Additional Space:_______________________________________
(8) Monthly Base Rent: $_____________;
Escalations/CAM Charge: $_____________;
Total Monthly Rent: $_____________;
(9) Tenant's Percentage Share of Increased Operating Costs: _____________%
(10) Security Deposit: $_______________; Prepaid Rent:_____________________
(11) Assignees/Subtenants:_________________________________________________
(12) Parking Spaces:_______________________________________________________
(13) Lease Guarantor(s):___________________________________________________
(14) Uncured Defaults by Landlord: None____________________________________
(15) Exclusive Uses:_______________________________________________________
(16) Free or Reduced Rent Months remaining after____/01/__:________________
(17) Tenant Improvements or other allowances due Tenant: $_________________
55
(18) Comments, if any:_____________________________________________________
______________________________________________________________________
______________________________________________________________________
_____________________________
Name of Tenant
By:__________________________
Date:________________________
56
AFFIDAVIT OF NON-FOREIGN STATUS
To inform Arden Realty Limited Partnership, a Maryland limited
partnership ("Transferee"), that withholding of tax under Section 1445 of the
Internal Revenue Code of 1986, as amended ("Code") will not be required upon the
transfer of certain real property to the Transferee by Activity Business
Associates, LLC, a California limited liability company ("Transferor"), the
undersigned hereby certifies the following on behalf of Transferor:
1 . The Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Code and the
Income Tax Regulations promulgated thereunder).
2. The Transferor's employer identification number/social security
number is__________________________.
3. The Transferor's office/personal residence address is
__________________________.
The Transferor understands that this Affidavit may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
The Transferor understands that the Transferee is relying on this
Affidavit in determining whether withholding is required upon said transfer.
Under penalty of perjury I declare that I have examined this Affidavit
and it is true, correct and complete, and I further declare that I have
authority to sign this document on behalf of the Transferor.
Date:_____________________, 199__
TRANSFEROR:
ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:___________________________________
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Exhibit J
57
RECORDING REQUESTED BY )
AND WHEN RECORDED RETURN TO: )
Christensen, Miller, Fink, Jacobs, )
Xxxxxx, Weil & Xxxxxxx, LLP )
2121 Avenue of the Stars )
18th Floor )
Xxx Xxxxxxx, Xxxxxxxxxx 00000 )
Attn: Xxxxx X. Xxxx, Esq. )
__________ Space Above This Line For Recorder's Use ___________
MEMORANDUM OF AGREEMENT
THIS MEMORANDUM OF AGREEMENT (this "Memorandum") is made and entered
into as of this __ day of September, 1997, by and between Activity Business
Associates, LLC, a California limited liability company ("Seller"), and Arden
Realty Limited Partnership, a Maryland limited partnership ("Buyer"), with
reference to the following facts.
A. Seller is the owner of that certain real property (the "Property")
more particularly described in Exhibit A, which is attached hereto and
incorporated by reference herein.
B. Buyer desires to purchase from Seller and Seller desires to sell to
Buyer the Property on the terms set forth in that certain Agreement of Purchase
and Sale and Joint Escrow Instructions (the "Purchase Agreement") of even date
herewith, by and between Seller and Buyer.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual
agreements herein set forth, and other valuable consideration, receipt of which
is hereby acknowledged, Owner and Optionee agree as follows:
1. Seller hereby agrees to sell, and Buyer agrees to purchase the
Property in accordance with the terms and conditions set forth in the Purchase
Agreement.
2. The Purchase Agreement is incorporated by reference herein, and, in
the event of any conflicts or inconsistencies between the terms and provisions
of this Memorandum and the terms and provisions of the Purchase Agreement, the
terms and provisions of the Option Agreement shall control, it being understood
and agreed by
Exhibit K
58
Owner and Optionee that the sole purpose of this Memorandum of Option is to
provide notice of the Option Agreement and that this Memorandum of Option shall
not alter, modify, restrict, limit or otherwise affect any of the terms and
provisions of the Option Agreement or any of the rights or obligations created
therein.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum as
of the date first above written.
Seller: ACTIVITY BUSINESS ASSOCIATES, LLC,
a California limited liability company
By:___________________________________
Xxxxxxx X. Xxxxxxxxx
Its: Vice President
Buyer: Arden Realty Limited Partnership,
a Maryland limited partnership
By:___________________________________
Its:_______________________________
59
AUDIT LETTER
Ernst & Young, LLP
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Dear Sir:
We are writing at your request to confirm our understanding that your
audit of the statement of operating income for the year ended
_________________, 1996, was made for the purpose of expressing an opinion as
to whether the statement of operating income presents fairly, in all material
respects, the results of operations of [Name of Project] in conformity with
generally accepted accounting principles. These representations are made
exclusively to [Auditor] and not to the buyer of the Project or to any third
party. In connection with your ______________________, 199_ audit we confirm,
to the best of our knowledge and belief, with respect to our daily operations
and without independent investigation or inquiry, the following representations
made during your audit:
A. We have made available to you all financial records and
related data concerning this Project, which are in our possession.
B. We are not aware of any:
1. Irregularities involving any member of management or
employees that could have a materially adverse effect on the statement of
operating income.
2. Notices of violations of laws or regulations, the
effect of which should be considered for disclosure in the financial statements
or as a basis for recording a loss contingency.
3. Material liabilities, gain or loss contingencies or
other transactions (including oral and written guarantees) that are required to
be but have not been accrued or disclosed.
4. Material events that have occurred subsequent to
___________________, 199_ that would require material adjustment to the
statement of operating income.
Exhibit X
00
Xxxxx & Xxxxx, XXX
______________ ___, 199_
Page 22
C. The Company has complied with all material aspects of
contractual agreements relating to the Project (e.g., management contracts)
that would have a material effect on the statement of operating income in the
event of noncompliance.
D. All significant payments to affiliated companies of the
undersigned have been property recorded or disclosed in the financial
statements.
By:________________________
61
EXHIBIT A
DESCRIPTION OF PROPERTY
The Property is situated in the County of San Diego, State of California and is
described as follows:
PARCEL 1 OF PARCEL MAP XX. 00000, XXXX XX XXX XXXXX, XXXXXX OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF ON FILE IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY.
A.P.N.: 000-000-00-00
EXHIBIT A
