EXHIBIT 10.4
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this "AMENDMENT") is entered into as of February 12, 2002, by and
between LAV, LLC, a Delaware limited liability company ("PURCHASER"), and
BPP/ARROWHEAD, L.P., a Delaware limited partnership ("SELLER"), with reference
to that certain Purchase and Sale Agreement and Joint Escrow Instructions dated
as of November 26, 2001, between Seller and Purchaser (the "PURCHASE
AGREEMENT").
RECITALS:
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A. Under the Purchase Agreement, Seller agreed to sell, and Purchaser
agreed to purchase from Seller, certain property commonly known as the Village
at Lake Arrowhead, located in the County of San Bernardino, California.
B. Seller and Purchaser desire to execute this Amendment in order to modify
certain of the terms of the Purchase Agreement.
C. Each initially capitalized term used herein shall have the meaning
ascribed to such term as set forth in the Purchase Agreement, unless otherwise
defined herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, Seller and
Purchaser hereby agree that the Purchase Agreement is amended as follows:
1. The date of the Maintenance Lease referred to in Section 1(h)(i) and in
Exhibit A-1 is changed to January 31, 2002.
2. Seller and Purchaser agree that the conditions precedent set forth in
Sections 7(a)(ix), 7(a)(x), 7(b)(x) and 7(b)(xi) have been satisfied. At
Closing, Seller shall provide Purchaser with a cash credit against the Purchase
Price in the amount of One Million Five Hundred Thousand Dollars ($1,500,000)
for repair of the seawall and the parking structure and any and all defects or
deferred maintenance in connection with the Property, including without
limitation the items on EXHIBIT H of the Purchase and Sale Agreement. Such
credit shall be in addition to the credit referred to in Section 11(a)(ii).
Purchaser acknowledges that the $1,500,000 credit represents full satisfaction
of Seller's obligations with respect to all repair items at the Property.
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3. The following sentence is added to the end of Section 8(a):
"Notwithstanding the above, Seller shall provide Purchaser with a
credit at Closing for any unpaid tenant improvement allowances,
commissions, architectural fees and landlord capital improvements
required to be made by landlord under that certain Lease Agreement,
dated January 9, 2002, by and between Seller and CF Real Estate Loans,
Inc. (d/b/a Re/Max Lake Arrowhead), with such aggregate amount to be
agreed upon prior to Closing by Seller and Purchaser each in its
reasonable discretion; provided, however, that such amount shall not
exceed the sum of $275,000 plus the applicable commissions.
4. Section 8(e) is deleted in its entirety.
5. In Section 11(a)(ii), the phrase "not described on Exhibit H attached
hereto" is deleted. In addition, the following sentence is added to the end of
Section 11(a)(ii):
"Notwithstanding the above, Purchaser shall reimburse Seller at
Closing in the following amounts (to the extent that such amounts have
been paid by Seller): (1) $12,548.50 plus $4,462.48 for Fireman's Fund
Commercial Insurance with Business Coverage Endorsement, (2) $2,500
for Floating Property Insurance, (3) $8,900 for Umbrella Insurance
Coverage, (4) $62,375 for Difference in Conditions Insurance, and (5)
$1,539 for Contractors' Equipment Insurance."
6. Section 11(e) is deleted in its entirety.
7. Section 12 is amended and restated in its entirety as follows:
"The purchase and sale contemplated herein shall close (the "CLOSING")
as soon as possible following approval of the transaction contemplated
herein by Seller's Board of Directors (the "CLOSING DATE"). Purchaser
and Seller anticipate that the transaction will be considered at the
Board's next meeting on February 14, 2002. As used herein, the term
"Closing" means the date and time that Seller's Grant Deed is recorded
in the Official Records."
8. Section 18 is amended and restated to include the following clause (c):
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"(c) Purchaser acknowledges that the principals in Purchaser, Xxxxx
Xxxxxx and Xxx Xxxxx, are senior executives of Seller and are thoroughly
familiar with the Property, including the condition of the seawall and
the parking structure and the extent of repairs required to be made to
the seawall and the parking structure. Purchaser has had full and ample
opportunity to investigate all aspects of the condition of the Property,
including the seismic risk, to make all inspections and investigations
of the Property that it deems necessary, including the testing and
pulling of the post-tension cables supporting the parking structure, to
consult with several structural engineers and other experts as to the
extent of repairs required to be made and cost estimates for such
repairs, and to underwrite the cost of such repairs. Purchaser
acknowledges that it has received and reviewed the following documents:
(1) Property Condition Assessment, dated February 11, 1998, prepared by
Property Condition Assessments, LLC, (2) Property Condition Survey
Report, dated October 10, 2000, prepared by Xxxx/Okubo Associates, Ltd.,
(3) Request for Bid, Construction of Soil Vapor Extraction System, dated
February 19, 1999, prepared by PES Environmental, Inc., (4) Report of
Fuel Conveyance Pipelines and Abandonment and Request for No Further
Action, dated July 20, 1999, prepared by PES Environmental, Inc., (5)
Phase I Environmental Site Assessment, dated March 10, 1998, prepared by
PES Environmental, Inc., (6) Preliminary Seismic Evaluation Report,
dated January 16, 2002, prepared by Cash & Associates, (7) Structural
Evaluation, Lake Arrowhead Village Parking Structure, dated January 21,
2002, prepared by Seneca Structural Engineering, (8) Geotechnical
Investigation, Lake Arrowhead Seawall, dated November 5, 2001, prepared
by TerraCosta Consulting Group, (9) Bulkhead Improvement Project, dated
December 10, 2001, prepared by Cash & Associates, (10) Structural Third
Party Review, Lake Arrowhead Parking Structure, dated February 1, 2002,
prepared by Xxxxx Xxxxxxx & Associates, (11) Retrofit System Proposal,
Arrowhead Village Parking Structure, dated January 30, 2002, prepared by
Seneca Structural Engineering, (12) Letter from Seneca Structural
Engineering dated January 29, 2002 regarding the existing system
capacity estimate for the parking structure. Specifically, Purchaser
acknowledges (i) the deficient condition of the seawall, (ii) the
corrosion and possible compromising of the post-tension cables in the
parking structure, (iii) other damage to the rebar and concrete in the
parking structure, (iv) the difficulty encountered in removing and
replacing the post-tension cables, (v) the potential need to install an
external post-tension cable system on the parking structure, (vi) that
the parking garage leaks and water has intruded into the structural
components of the parking garage, possible
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compromising the post-tension cables and other structural components,
(vii) that the parking structure has several large openings which must
be barricaded to protect against injury, and (viii) that Seller has been
advised to limit the weight load on the parking structure. Accordingly,
(i) Purchaser hereby waives all warranties of any type or kind
whatsoever with respect to the Property, including the seawall and the
parking structure, including by way of description but not limitation,
those of fitness for a particular purpose and use, tenantability or
habitability.
(ii) Purchaser, on behalf of itself and its members, shareholders,
principals, directors, officers, agents and any person or entity
claiming by, through or under Purchaser, each hereby fully and
irrevocably releases, discharges and waives its rights to recover
from Seller, any and all claims that Purchaser may now have or
hereafter acquire against Seller for any cost, loss, claim, penalty,
fine, lien, judgment, liability, damage, expense, action or cause of
action (including, without limitation, attorneys' fees and costs),
whether foreseen or unforeseen, direct or indirect, known or unknown,
arising from or related to the physical condition of the Property,
including, without limitation, the items identified on EXHIBIT H of
the Purchase Agreement, the matters described in SECTION 18(c) above,
the condition of the seawall and the parking structure and any
building code, engineering, construction or seismic deficiencies or
defects in the seawall, parking structure or item identified on
EXHIBIT H. Purchaser further acknowledges and agrees that this
release shall be given full force and effect according to each of its
expressed terms and provisions, including, but not limited to, those
relating to unknown and unsuspected claims, damages and causes of
action. As a material covenant and condition of this Agreement,
Purchaser agrees that in the event of any claims arising out of the
physical condition of the Property, including, without limitation,
that of the Seawall and the parking structure, Purchaser shall not
seek recourse, redress or relief from Seller and shall look solely to
persons and entities other than Seller for any recourse, redress or
relief. With respect to the release set forth herein relating to
unknown and unsuspected claims, Purchaser hereby acknowledges that
such waiver and release is made with the advice of counsel and with
full knowledge and understanding of the consequences and effects of
such waiver, and that such waiver is made with the full knowledge,
understanding and agreement that California Civil Code Section 1542
provides as follows, and that the protection afforded by said Code
Section is hereby waived:
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"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Upon consummation of the Closing, the foregoing release shall be deemed
to be restated and made again as of the Closing Date and shall survive
the Closing."
9. Section 20(a) is revised to include the following after clause (vii):
"(viii) any claim filed by Coldwell Banker Sky Ridge Realty
relating to its assertion that Seller's refusal to permit it to maintain
buyer's guide display boxes on the Property is a violation of its First
Amendment rights, (ix) any claim filed by Xxxxxxx Xxxx relating to a
slip-and-fall injury that occurred on December 15, 2001, (x) any claim
filed by Xxxxx Xxxxxxxx relating to a slip-and-fall injury that occurred
on January 29, 2002 and (xi) MR. G'S, INC. V. BPP/ARROWHEAD, L.P., et
al, Case No. SCVSS086278, Superior Court, Orange County, California.
None of the foregoing lawsuits is a Material Lawsuit."
10. The last sentence of Section 20(a) is amended and restated as follows:
"Purchaser shall indemnify, defend and hold harmless Seller and its
shareholders, directors, officers, members, partners, employees,
representatives and agents, and their respective successors and assigns
(collectively, the "INDEMNIFIED SELLER PERSONS") from and against any
claims, actions, suits, demands, losses, damages, liabilities,
obligations, judgments, settlements, awards, penalties, costs or
expenses, including, without limitation, reasonable attorneys' fees and
expenses (collectively, "LOSSES") incurred or suffered by any
Indemnified Seller Person that results from, relates to or arises out of
(x) events occurring from and after the Closing Date, including, without
limitation, liability for overcharging pass-through expenses for the
period from and after Closing, (y) the physical condition of the
Property, including, without limitation, that of the seawall and the
parking garage."
11. Exhibit H to the Purchase Agreement is deleted in its entirety.
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12. Except as otherwise set forth herein, the Purchase Agreement (i) shall
remain unmodified, in full force and effect and enforceable in accordance with
its terms, and (ii) is hereby ratified and reaffirmed in each and every
respect."
13. This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument, with the same effect as if all parties had signed the same signature
page. In order to facilitate and expedite execution of this Amendment, the
parties hereto may execute and exchange facsimile counterparts of the signature
pages, and facsimile counterparts will serve as originals.
14. Xxxxxxx Pacific Properties, Inc. has executed this Amendment for the
purpose of memorializing that it shall be secondarily liable for the performance
of the obligations of Seller set forth in Section 20(a) of the Purchase
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
SELLER: BPP/ARROWHEAD, L.P.,
a Delaware limited partnership
By: BPP/Arrowhead, Inc.
a Delaware corporation,
its General Partner
By: /S/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Its: Senior Vice President
By: /S/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Its: Senior Vice President
PURCHASER: LAV, LLC,
a Delaware limited liability company
By: Xxxxxx-Xxxxx Manager, Inc.,
a Delaware corporation,
Its Managing Member
By: /S/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Its: Chief Financial Officer
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XXXXXXX: XXXXXXX PACIFIC PROPERTIES, INC.,
a Maryland corporation
By: /S/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Its: Senior Vice President
By: /S/ XXXX X. XXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxx
Its: Senior Vice President
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