NOTE PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
This NOTE PURCHASE AND SALE AGREEMENT ("Agreement") is
entered into as of August 27, 1997 by and between Coast
Federal Bank, Federal Savings Bank, a federally chartered
capital stock savings bank, as successor in interest to
Coast Savings and Loan Association, a California corporation
("Coast") and Arden Realty Limited Partnership, a Maryland
limited partnership ("Buyer") with regard to the following
facts and circumstances.
RECITALS
A. Coast and Washington Mutual Bank, a Washington
corporation, as successor in interest to Washington Mutual
Savings Bank, a Washington corporation ("Washington") are
the payee and holder of that certain Restated and Amended
Promissory Note dated as of December 14, 1994 (the "Note")
in the original principal amount of $15,728,745.29 (the
"Loan"), which Note was executed by Xxxxxxx Xxxxx and
Company, Incorporated, a California corporation (the
"Original Borrower") in favor of Coast. The Note is secured
by that certain Construction and Permanent Deed of Trust,
Financing Statement, Security Agreement and Fixture Filing
(with Assignment of Rents and Leases) and Grant of Easement
dated as of December 23, 1986, as amended (the "Deed of
Trust"), covering that certain real property more
particularly described in Exhibit "A" attached hereto and
incorporated herein by this reference (the "Property"),
which Deed of Trust was recorded on December 29, 1986, as
Instrument Number 00-0000000 in the Official Records of Los
Angeles County (the "County"), California. The Note amended
and restated in its entirety that certain Promissory Note
dated as of December 23, 1986 made by Original Borrower to
the order of Coast in the original principal amount of
$16,400,000.00 (the "Original Loan"). The Note is also
evidenced, accompanied or secured by certain additional
documents, including, without limitation: (a) that certain
Security Agreement dated as of December 23, 1986, as amended
(the "Security Agreement), and (b) that certain Assignment
of Lessor's Interest in Leases dated as of December 23,
1986, as amended (the "Assignment of Leases"), and recorded
on December 29, 1986, as Instrument Number 00-0000000 in the
Official Records of the County. The Note, the Deed of
Trust, the Assignment of Leases, the Security Agreement, and
all the other documents described in Schedule 1 attached
hereto, shall hereinafter be referred to collectively as the
"First Loan Documents."
B. On or about February 20, 1987, Coast assigned an
undivided 58.63% beneficial interest in the Original Loan to
Xxxxxxxxx Savings, F.S.B., a federally chartered savings
bank ("Xxxxxxxxx"), and on or about April 24, 1987, Coast
assigned an undivided 21.37% beneficial interest in the
Original Loan to Washington.
C. On or about February 16, 1994, Coast acquired the
beneficial interest of Xxxxxxxxx in the Loan. As of the
date of this Agreement, Coast owns an undivided 78.63%
beneficial interest in the Loan, and Washington owns an
undivided 21.37% beneficial interest in the Loan.
D. In addition to Coast's beneficial interest in the
Loan, Coast currently services the Loan.
E. Coast is the sole payee and holder of that certain
Restated and Amended Promissory Note dated as of
December 14, 1994 (the "Second Note"), in the original
principal amount of $9,944,958.73 (the "Second Loan"), which
Second Note was executed by Original Borrower in favor of
Coast. The Second Note was originally secured by that
certain Second Deed of Trust, Financing Statement, Security
Agreement and Fixture Filing (with Assignment of Rents and
Leases) and Grant of Easement dated as of December 23, 1986,
as amended (the "Second Deed of Trust"), covering the
Property, which Second Deed of Trust was recorded on
December 29, 1986 as Instrument Number 00-0000000 in the
Official Records of the County. The Second Note amended and
restated in its entirety that certain Promissory Note dated
as of December 23, 1986, made by Original Borrower to the
order of Coast in the original principal amount of
$9,700,000.00 as amended. The Second Note is also
evidenced, accompanied or secured by certain additional
documents, including, without limitation: (a) that certain
Security Agreement dated as of December 23, 1986, as amended
(the "Second Security Agreement"), and (b) that certain
Assignment of Lessor's Interest in Leases dated as of
December 23, 1986, and recorded on December 29, 1986, as
Instrument Number 00-0000000 in the Official Records of the
County, as amended (the "Second Assignment of Leases"). The
Second Note, the Second Deed of Trust, the Second Assignment
of Leases, the Second Security Agreement, and all the other
documents described in Schedule 2 attached hereto, shall
hereinafter referred to collectively as the "Second Loan
Documents."
F. Coast is the sole owner and the holder of the
Second Loan, and Coast services the Second Loan.
G. For purposes of this Agreement, the First Loan
Documents and the Second Loan Documents and any
modifications, revisions or extensions thereof, and all
other documents in connection with the Loan and the Second
Loan described in paragraph 8.1 hereof shall hereinafter be
referred to collectively as the "Loan Documents."
Notwithstanding anything to the contrary herein, Loan
Documents shall include only those documents which exist and
are in the possession or control of Coast and which are not
privileged or are not an internal memorandum or report of
Coast, and Loan Documents shall not include the
participation agreements and related documents between Coast
and Washington and Coast and Xxxxxxxxx.
H. On June 14, 0000, Xxxx Xxxxx Xxxxxxx Xxxxxxxx Xxxx
II, a California limited partnership ("LBABP II") filed a
case under Chapter 11 of the U.S. Bankruptcy Code (the
"Bankruptcy Case").
I. A consensual plan of reorganization (the "Plan")
proposed by Coast and LBABP II and approved by Washington
was confirmed by the United States Bankruptcy Court Central
District of California on November 30, 1994.
J. In accordance with the terms of the Plan, on or a
about December 14, 1994, LBABP II assumed the obligations of
Original Borrower under the Loan Documents and became
jointly and severally liable with the Original Borrower for
such obligations, and the terms of the Loan and the Second
Loan were amended and restated in their entirety.
K. Subject to the terms and conditions set forth in
this Agreement, (i) Buyer desires to purchase the Note and
the First Loan Documents from Coast and Washington, and
Coast and Washington desire to sell to Buyer the Note and
the First Loan Documents; and (ii) Buyer desires to purchase
the Second Note and the Second Loan Documents from Coast,
and Coast desires to sell to Buyer the Second Note and the
Second Loan Documents.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing
Recitals, as well as the covenants and conditions contained
herein, and for other good and valuable consideration, the
receipt, sufficiency and validity of which are hereby
acknowledged by all parties, it is hereby agreed as follows:
1. Recitals. All of the above Recitals are
incorporated herein as part of this Agreement.
2. Purchase and Sale. Upon the terms and
conditions of this Agreement, Coast hereby agrees to sell,
assign, and transfer to Buyer all of its right, title and
interest in and to the Note, the Second Note, and all of the
other Loan Documents, without recourse, warranty,
representation, of any nature whatsoever, except as
specifically set forth in this Agreement, and Buyer hereby
agrees to purchase from Coast, on an "AS IS" basis, without
recourse to Coast, all of Coast's right, title and interest
in and to the Note, the Second Note, and all of the other
Loan Documents. Upon the terms and conditions of this
Agreement, Coast hereby agrees to use its best efforts to
cause Washington to sell, assign, and transfer to Buyer all
of its right, title and interest in and to the Note, and the
other First Loan Documents, without recourse, warranty,
representation, of any nature whatsoever, except as
specifically set forth in that certain estoppel letter dated
of even date herewith and executed by Washington (the
"Estoppel Letter"), and Buyer hereby agrees to purchase from
Washington, on an "AS IS" basis, without recourse to
Washington, all of Washington's right, title and interest in
and to the Note, and the other First Loan Documents.
3. Purchase Price. The purchase price for
the Note, the Second Note, and the other Loan Documents
shall be Fourteen Million Four Hundred Thousand and No/100
Dollars ($14,400,000.00) (the "Purchase Price") payable as
hereinafter provided. With respect to the Loan, as of the
Closing Date, Escrow Holder shall allocate the Purchase
Price as payment for the Loan as follows: (i) Coast shall
receive an amount equal to 78.63% of the outstanding amounts
owing under the Loan, and (ii) Washington shall receive an
amount equal to 21.37% of the outstanding amounts owing
under the Loan. With respect to the Loan, Escrow Holder
shall deduct from each of Coast's and Washington's pro rata
share of the Purchase Price (based upon Coast's and
Washington's interest in the Loan as set forth in Paragraph
B of the Recitals section of this Agreement), any amounts
for which Coast and Washington are responsible for under the
terms of Paragraphs 7.6 and 10 hereof in accordance with
their pro rate share (based upon Coast's and Washington's
interest in the Loan). With respect to the Second Loan, as
of the Closing Date, Escrow Holder shall deliver to Coast
the remaining balance of the Purchase Price (after payment
in full of the Loan) as payment for the Second Loan.
4. Payment of Purchase Price.
4.1 Deposit. Upon the Opening of Escrow (as
defined in paragraph 6 below), Buyer shall deposit with
Escrow Holder (as defined in Paragraph 6 below) a deposit in
the aggregate sum of One Hundred Thousand and No/100 Dollars
($100,000.00) ("Deposit"). Buyer shall deliver the Deposit
by its check made payable to Escrow Holder. Escrow Holder
shall invest the Deposit in a non-term, interest-bearing
account with a FDIC-insured financial institution located in
the County and designated by Coast, with all interest
thereon to be paid to the account for Buyer's benefit. On
the day after the Contingency Date (as defined in Paragraph
7.1 of this Agreement), and provided that Buyer has not
terminated this Agreement as a result of its disapproval
prior to the Contingency Date of any of the items set forth
in paragraph 7 below, Escrow Holder shall pay to Coast the
Deposit and the interest thereon ("Deposit Interest")
without further instruction from Buyer.
4.2 Cash Payment. On or before one (1)
business day prior to the Close of Escrow (as defined in
Paragraph 6 below), Buyer shall deposit into Escrow (as
defined in Paragraph 6 below), in cash or cash equivalent,
(which for purposes of this Agreement shall mean a wire
transfer of immediately available funds or a bank cashier's
check drawn on a reputable bank or savings association
licensed to do business in California and acceptable to
Coast) the amount of Fourteen Million Three Hundred Thousand
and No/100 Dollars ($14,300,000.00), and (ii) the amount
representing the payment described in paragraph 11.4(a) and
11.4(b) hereof, subject to Buyer's share of prorations and
adjustments, closing costs and any other obligations of
Buyer expressly set forth herein, and minus those funds
actually paid by Buyer to the Escrow Holder together with
interest thereon (collectively, the "Cash Payment").
5. Condition of Title. At the Close of
Escrow, with respect to the Loan and the Second Loan, Coast
shall convey to Buyer by Assignment of Deed of Trust (the
"Assignment of Deed of Trust"), all of its right, title and
interest in and to the Deed of Trust and the Second Deed of
Trust covering the Property, and Coast shall also cause
Washington to convey to Buyer by an Assignment of Deed of
Trust all of Washington's right, title and interest in the
Deed of Trust covering the Property, subject only to the
following matters (collectively, "Approved Title
Conditions"): (a) real property general and special taxes
and assessments not delinquent and the lien of supplemental
assessments; (b) the exceptions to the title set forth on
Exhibit "J" ("Title Exceptions") attached hereto which are
approved by Buyer pursuant to Paragraph 7.1.1; and (c) such
other matters as may appear of record and be approved or
waived by Buyer in writing. The present title company
insuring,the liens of the Deed of Trust and the Second Deed
of Trust in favor of Coast is Commonwealth Land Title
Insurance Company ("Commonwealth"). With respect to the
Deed of Trust, Commonwealth issued that certain ALTA 1970
lender's policy dated December 30, 1994, file number
874986809 ("First Title Policy"). With respect to the
Second Deed of Trust, Commonwealth issued that certain 1970
ALTA lender's policy dated December 30, 1994, file number
874986809 ("Second Title Policy").
6. Escrow.
6.1 Buyer and Coast shall cause an escrow
("Escrow") to be opened upon the full execution of this
Agreement, for the consummation of the transaction, by
delivering into Escrow a fully executed copy of this
Agreement no later than one (1) business day following its
full execution by all parties ("Opening of Escrow"). Escrow
shall be with First American Title Company of Los Angeles
located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
("Escrow Holder"). The Close of Escrow shall be no later
than September 3, 1997 ("Close of Escrow"), and there shall
be no extension thereof unless specifically set forth in a
writing executed by both Coast and Buyer. Should the
Closing Date fall on a Saturday, Sunday or national, state
or local holiday, or a holiday recognized by Coast, the
Closing Date shall occur on the next business day that is
not a national, state or local holiday, or a holiday
recognized by Coast. This Agreement shall be null and void
and of no further effect unless it is executed and delivered
by Buyer to the Escrow Holder no later than the close of
business on September 2, 1997.
6.2 Notwithstanding anything to the contrary
in this Agreement, the general provisions of Escrow Holder,
if any, which are later signed by the parties, are
incorporated by reference to the extent they are not
inconsistent with the provisions of this Agreement. If
there is any inconsistency between the provisions of those
general provisions and any of the provisions of this
Agreement, the provisions of this Agreement shall control.
If any requirements under this Agreement relating to the
duties or obligations of the Escrow Holder are unacceptable
to the Escrow Holder, or if the Escrow Holder requires
additional instructions, the parties agree to make any
deletions, substitutions and additions as Buyer and Coast
shall mutually approve in writing, and which do not
materially alter the terms of the Agreement. Any
supplemental instructions shall be signed only as an
accommodation to Escrow Holder and shall not be deemed to
modify or amend the rights of Buyer and Coast, as between
Buyer and Coast, unless those supplemental instructions
expressly so provide and are agreed to in writing by both
Buyer and Coast. To the extent permissible by law, Coast
shall cooperate with Buyer in requesting the Escrow Holder
to prepare the conveyance documents (including, without
limitation, the Assignments of Deed of Trust) in a manner
that keeps the documentary transfer stamps and taxes and
Purchase Price from becoming a part of, or determinable
from, the public record.
6.3 If necessary, Escrow Holder is
authorized to insert in any undated closing documents the
date of the Assignments of Deed of Trust and other documents
which require recordation.
7. Conditions.
7.1 Conditions Precedent to the Contingency
Date. Buyer's obligations to purchase the Note, the Second
Note, and the other Loan Documents are subject to the
satisfaction, not later than 5:00 p.m. on August 28, 1997
(the "Contingency Date") of each of the following
conditions. These conditions shall be either approved or
disapproved in writing by Buyer, in the exercise of Buyer's
sole and absolute discretion, on or before the Contingency
Date set forth herein or shall be deemed approved
conclusively if no written disapproval has been submitted by
Buyer to Escrow Holder and Coast as of the Contingency Date.
7.1.1 Title. On or before the
Contingency Date, Title Company shall deliver to Buyer: (i)
a standard preliminary title report relating to the Property
("Title Report"), and (ii) copies of all documents relating
to the exceptions shown. The items set forth in
subparagraph (i) and (ii) above shall be referred to
collectively as the "Title Documents". Buyer shall have
until the Contingency Date to deliver to Coast and Escrow
Holder written notice of Buyer's approval or disapproval of
the matters of title shown in the Title Documents ("Buyer's
Title Notice").
7.1.1.1 If Buyer timely
disapproves of any items shown in the Title Documents, Coast
shall then have the right, but not the obligation, in
Coast's sole and absolute discretion, to attempt to cure or
remove the objections. Coast shall exercise its right to
attempt to cure or remove the objections by depositing
notice into Escrow with a copy to Buyer within five (5)
business days after Coast's receipt of Buyer's Title Notice,
which Notice shall set forth Coast's proposed cure for such
objection. Failure or refusal of Coast to deposit such
notice electing to attempt to cure or remove Buyer's
objections shall be deemed an election by Coast not to
attempt to so cure or remove the objections.
7.1.1.2 If Coast elects to cure
or remove Buyer's objections and such proposed cure is
acceptable to Buyer, in its sole and absolute discretion,
then Coast shall have until the Close of Escrow to cure or
remove said objections. Coast shall be deemed to have cured
Buyer's objections if Title Company commits to issue the
Title Policy.
7.1.2 Operating Documents. On or
before the Contingency Date, Buyer has received, secured,
reviewed and approved any and all documents and materials
respecting the Property and its operation, which exist and
are in the possession or control of Coast, and which are not
privileged or are not an internal memorandum or report of
Coast, relating to: (i) tenant leases, if any, for current
tenants in effect, (ii) ground leases, if any, (iii) ground
subleases, if any, and (iv) copies of all applicable
warranties affecting the Property. The documents referred
to in subparagraphs (i) through (iv) hereof shall be
referred to collectively as the "Operating Documents". The
Operating Documents are being furnished without Coast's
representations or warranty as to their accuracy or their
completeness.
7.1.3 Inspection of Property.
7.1.3.1 On or before the
Contingency Date, Buyer has completed and approved or
disapproved the results of any are' all inspections,
investigations, tests and studies, with respect to the
Property as Buyer may at Buyer's reasonable discretion elect
to make or obtain (including, without limitation,
investigations with regard to the environmental condition,
zoning, building codes and other governmental regulations,
architectural and/or structural inspections, mechanical,
engineering tests, economic feasibility studies and soils,
seismic geologic and environmental reports). The cost of
any such inspections, tests, reviews, reports and studies
shall be borne exclusively by Buyer. Notwithstanding
anything stated above, Buyer shall not engage in any
destructive testing or cause any physical damage to the
Property without Coast's and Borrower's prior written
consent. Buyer shall indemnify and hold Coast, Washington,
Borrower, and the Property free of and harmless from any and
all claims (including mechanics' liens), liabilities,
losses, damages, costs and expenses, including, without
limitation, attorneys' fees and costs caused by or arising
out of the activities of Buyer, its agents, representatives,
employees, and independent contractors in connection with or
relating to the Property, and its surroundings, whether
pursuant to the terms hereof or otherwise. Notwithstanding
any contrary provisions hereof, this indemnification shall
survive the termination of this Agreement, the cancellation
of Escrow or the Close of Escrow.
7.1.3.2 In the event that, in the
exercise of its sole and absolute discretion, Buyer timely
disapproves of the condition of the Property as provided
herein, Buyer shall deposit with Escrow Holder prior to the
Contingency Date, with a copy to Coast, a writing
identifying the items disapproved and specifying the reasons
for the disapproval, along with a copy of any reports test
results or other documents verifying the disapproved
condition.
7.1.3.3 If Buyer disapproves any
such items, Coast shall then have the right, but not the
obligation, in Coast's sole and absolute discretion, to
attempt to cure or remove the objections to the satisfaction
of Buyer. Coast shall exercise its right to attempt to cure
or remove the objections by depositing notice in Escrow with
a copy to Buyer within five (5) business days after Coast's
receipt of Buyer's notice, which notice shall set forth
Coast's proposed cure for such objection, in its sole and
absolute discretion. Failure or refusal of Coast to deposit
such notice electing to attempt to cure or remove Buyer's
objections shall be deemed an election by Coast not to
attempt to so cure or remove the objections. If Coast
elects to cure or remove Buyer's objections and such
proposed cure is acceptable to Buyer, in its sole and
absolute discretion, then Coast shall have until the Close
of Escrow to cure or remove such objections.
7.1.3.4 Buyer acknowledges,
understands, represents and agrees that: (1) Buyer is
purchasing the Note, the Second Note, and the other Loan
Documents in an "AS-IS CONDITION" "WITH ALL FAULTS"; (2)
Buyer shall conduct or cause to be conducted, in its sole
and absolute discretion, an independent investigation,
inspection, survey and analysis, as it deems necessary, to
determine the threat or presence of any hazardous substance
at, on, in, under, about, above, from or adjacent to the
Property and its surroundings, and (3) Coast has not
provided Buyer with any environmental reports, nor has Coast
made any written representations of warranties concerning
the environmental condition of the Property.
7.1.4 Loan Documents and the Loan
Service Documents. On or before the Opening of Escrow,
Coast has or shall deliver to Buyer true, correct and
complete copies of the Loan Documents and the Loan Service
Documents (as defined herein). Buyer shall have until the
Contingency Date to approve or disapprove the Loan Documents
and the Loan Service Documents, in the exercise of Buyer's
sole and absolute discretion. With respect to the Loan and
the Second Loan, the "Loan Service Documents" shall mean the
fire and casualty insurance policies, the loan histories,
the statements of account and the tax files.
7.2 Failure of Conditions Precedent to the
Contingency Date. Except as otherwise provided, Buyer may
terminate this Agreement and cancel Escrow by reason of
Buyer's written disapproval prior to the Contingency Date of
any of the items set forth in Paragraphs 7.1.1, 7.1.2,
7.1.3, and 7.1.4, which, with respect to the matters
identified in Paragraphs 7.1.1, 7.1.2 and 7.1.3, Coast
elects not to cure or remove as provided, in which case the
Deposit and Deposit Interest shall be returned to Buyer and
the cancellation charges required to be paid to Escrow
Holder shall be divided equally between Buyer and Coast, and
all other charges shall be borne by the party that incurred
the charge. Notwithstanding any provision to the contrary
stated herein, the Deposit and the Deposit Interest shall
not be returned to Buyer until Buyer delivers to Coast all
instruments and documents previously delivered to Buyer by
Coast in connection with the transactions contemplated by
this Agreement.
7.3 Conditions Precedent to Coast's
Obligation to Close. Coast's obligations under this
Agreement are subject to the satisfaction, no later than the
Closing Date, of the following conditions precedent: (i)
Buyer shall have delivered to Escrow Holder, for
disbursement as herein set forth, the Deposit and the Cash
Payment; (ii) Buyer shall have delivered to Escrow Holder
the items and the documents described in Paragraph 8.2
below, duly executed and acknowledged as provided therein;
(iii) Buyer's representations, warranties and covenants set
forth in Paragraph 12 shall be true and correct in all
material respects as of the Closing Date; (iv) as of the
Closing Date, First American Title Company of Los Angeles
("Title Company") shall have issued or shall have committed
to issue to Buyer the 1970, ALTA Loan Policy and all
endorsements thereto (collectively, the "Title Policy"),
subject to the Approved Title Conditions; and (v)
Washington's execution and delivery to Coast or Escrow
Holder, as the case may be, all documents required to close
this transaction, including, but not limited to, the
documents described in paragraph 8.1.3 hereof.
7.4 Mutual Conditions Precedent to Close of
Escrow. The Close of Escrow and the obligations of both
Buyer and Coast under this Agreement are subject to the
satisfaction, no later than the Closing Date, of the
following conditions precedent: (i) Buyer shall have fully
performed, satisfied and completed all of the conditions
precedent required by Coast prior to the Close of Escrow,
and (ii) Washington shall have delivered to Buyer the
Estoppel Letter, in form and substance satisfactory to
Buyer.
7.5 Failure of Conditions Precedent to Close
of Escrow.
7.5.1 Title and Condition of
Property. In the event that the Title Policy is not in
conformity with the matters approved by Buyer as provided in
Paragraphs 5 and 7.1.1 hereof as of the Closing Date, or
Buyer has disapproved of the condition of the Property in
accordance with Paragraph 7.1.3, and Coast has elected not
to attempt to remedy or cure the defects or objections or is
unable to do so to the satisfaction of Buyer, then Buyer
either shall terminate this Agreement and cancel Escrow or
waive the objections and purchase the Note, the Second Note,
and other Loan Documents without such objections being so
remedied and with no reduction in the Purchase Price, and
such election shall be Buyer's sole remedy.
7.5.2 Other Conditions Precedent.
In the event any of the conditions set forth in Paragraph
7.3 or 7.4 are not timely satisfied or waived: (i) this
Agreement shall terminate, the rights, obligations and
liabilities of Buyer and Coast shall terminate, and Escrow
shall be canceled, except as otherwise provided herein; (ii)
Escrow Holder shall promptly return to Coast and Buyer all
funds (except as provided for in Paragraph 7.5.2 (ii)
hereinbelow) and documents respectively deposited by them
into Escrow which are held by Escrow Holder on the date of
said termination and cancellation less the amount of any
cancellation charges required to be paid by such party under
Paragraph 7.6; and (ii) if any condition set forth in
Paragraph 7.3 (i) through (iv) was not timely satisfied or
waived, Coast shall retain or shall be entitled to the
receipt from Escrow Holder of the Deposit and the Deposit
Interest. However, if the unsatisfied, unwaived conditions
relate exclusively to Paragraph 7.4, Coast shall return to
Buyer the funds actually delivered by the Buyer to Escrow
Holder, with interest thereon.
7.6 Cancellation Fees and Expenses. Except
as otherwise set forth herein, in the event this Agreement
terminates and Escrow is canceled because of: (i) the non-
satisfaction of any condition set forth in Paragraph 7.3,
the cancellation charges required to be paid to Escrow
Holder shall be borne by Buyer, and all other charges shall
be borne by the party that incurred the charge; (ii) the non-
satisfaction of any condition set forth in Paragraph 7.4,
the cancellation charges required to be paid by and to
Escrow Holder shall be equally divided between Buyer and
Coast, and all other charges shall be borne by the party
that incurred the charge; (iii) any default by Buyer or
Coast, the cancellation charges required to be paid by and
to Escrow Holder shall be borne by the defaulting party; and
(iv) the mutual agreement of Buyer and Coast, Escrow
Holder's fees and all other costs shall be divided equally
between Buyer and Coast. Notwithstanding any provision to
the contrary herein, (a) if this Agreement terminates and
Escrow is cancelled solely as a result of the Second Loan,
Coast and not Washington shall be responsible for paying any
cancellation charges, fees or costs set forth in
subparagraphs (ii), (iii) and (iv) of this paragraph, and
(b) if this Agreement terminates and Escrow is cancelled
solely as a result of Washington's failure to take the
action necessary to close this transaction, Washington and
not Coast shall be responsible for paying any cancellation
charges, fees and costs set forth in subparagraphs (ii),
(iii) and (iv) of this paragraph.
8. Deliveries to Escrow. Buyer and Coast
hereby agree to deliver, or cause to be delivered, to Escrow
Holder on or prior to the Close of Escrow the following
instruments and documents, the delivery of which shall be a
condition precedent to the Close of Escrow:
8.1 Deliveries by Coast. Coast shall
deliver, or cause to be delivered, to Escrow prior to the
Closing Date, original, duly executed and acknowledged as
required, the Loan Documents and the documents required to
close this transaction, which are in the possession or
control of Coast, and which are not privileged or are not an
internal memorandum or report of Coast, including, but not
limited to each of the following:
8.1.1 With respect to the Loan (Loan
No. 2728236):
(a) The Amended and Restated
Promissory Note dated as of December 14, 1994;
(b) The Construction and Permanent
Deed of Trust, Financing Statement Security Agreement and
Fixture Filing (with Assignment of Rents and Leases) and
Grant of Easement dated as of December 23, 1986 and recorded
on December 29, 1986 as Instrument Number 00-0000000 in the
Official Records of the County;
(c) The Amendment to Deed of
Trust, Security Agreement, and Assignment of Rents and
Leases dated as of December 14, 1994 and recorded on
December 30, 1994 as Instrument Number 00-0000000 in the
Official Records of the County; and
(d) The Security Agreement dated
as of December 23, 1986;
(e) The UCC-1 Financing Statement
dated as of December 23, 1986 and filed on January 15, 1987
as File Number 87-013228 in the Office of the California
Secretary of State, and all UCC-2s filed in connection
therewith;
(f) The Assignment of Lessor's
Interest in Leases dated as of December 23, 1986 and
recorded on December 29, 1986 as Instrument Number 86-
1818750 in the Official Records of the County; and
(g) The First Title Policy issued
by Commonwealth insuring the Loan as a first lien on the
Property dated as of December 30, 1994, File Number 8749868-
09, any endorsements thereto.
8.1.2 With respect to Second Loan (Loan
No. 2728285):
(a) The Amended and Restated
Promissory Note dated as of December 14, 1994;
(b) The Second Deed of Trust,
Financing Statement, Security Agreement and Fixture Filing
(with Assignment of Rents and Leases) and Grant of Easement
dated as of December 23, 1986 and recorded on December 29,
1986 as Instrument Number 00-0000000 in the Official Records
of the County;
(c) The First Amendment (I) to
Second Deed of Trust, Financing Statement, Security
Agreement and Fixture Filing (with Assignment of Rents and
Leases) and Grant of Easement, and (II) To Assignment of
Lessor's Interest in Leases dated as of December 28, 1988
and recorded on December 30, 1988 as Instrument Number 88-
2088378 in the Official Records of the County;
(d) The Amendment to Deed of Trust
Security Agreement and Assignment of Rents and Leases dated
as of December 14, 1994 and recorded on December 30, 1994 as
Instrument Number 00-0000000 in the Official Records of the
County;
(e) The Security Agreement dated
as of December 23, 1986;
(f) The UCC-1 Financing Statement
dated as of December 23, 1986 and filed on January 15, 1987,
as File Number 87-013226 in the Office of the California
Secretary of State, and all UCC-2s filed in connection
therewith;
(g) The Assignment of Lessor's
Interest in Leases dated as of December 23, 1986 and
recorded on December 29, 1986 as Instrument Number 86-
1818752 in the Official Records of the County; and
(h) The Second Title Policy issued
by Commonwealth insuring the Second Loan as a second lien on
the Property dated as of December 30, 1994, file number
8749868-09, and any endorsements thereto.
8.1.3 With respect to each of the Loan
(Loan No. 2728236) and the Second Loan (Loan No. 2728285):
(a) An Assignment and Endorsement
of Promissory Note in favor of Buyer, in the form attached
hereto as Exhibit "B";
(b) The Assignment of Deed of
Trust, in the form attached hereto as Exhibit "C";
(c) The Assignment of Assignment
of Lessor's Interest in Leases and Proceeds (the "Assignment
of Assignment of Leases") in the form attached hereto as
Exhibit "D";
(d) The Assignment of Loan
Documents in the form attached hereto as Exhibit "E";
(e) The UCC-2 Financing Statement
Change/Fixture Filing (the "UCC-2 Fixture Filing") in the
form attached hereto as Exhibit "F";
(f) The UCC-2 Financing Statement
Change/State Filing (the "UCC-2 State Filing") in the form
attached hereto as Exhibit "G";
(g) The Certification of Non-
Foreign Status by Entity Transferor ("FIRPTA") in the form
attached hereto as Exhibit "I";
(h) The Title Exceptions in the
form attached hereto as Exhibit "J"; and
(i) The Substitution of Trustee
(the "Substitution of Trustee") form in the form attached
hereto as Exhibit "K".
8.2 Deliveries by Buyer. Buyer shall
deliver, each of the following:
(a) The Deposit;
(b) The Cash Payment;
(c) The Closing Costs;
(d) The General Release (the
"Release"), in the form attached hereto as Exhibit "H"; and
(e) With respect to the Loan and the
Second Loan, a certificate to Coast, in the form attached
hereto as Exhibit "L", acknowledging that:
(1) Buyer has been provided with
access to the Loan Documents described herein which Coast
represents to be all of the Loan Documents which exist and
are in its possession or control of Coast and which are not
privileged or are not an internal memorandum or report of
Coast and other information related to the Loan, and has had
full and complete access to, and has either fully inspected
and studied, or has waived its right to inspect and study
the Property;
(2) Buyer has fully reviewed the
Loan Documents described herein, information provided by
Coast related to the Loan, and information provided by Coast
pertaining to the Loan, the Loan Documents and the Property
as it and any of its advisors have deemed appropriate.
(3) Except as set forth in this
Agreement, Coast has made no warranties, express, implied or
statutory, or representations of any kind to Buyer
including, but not limited to, any representation or
warranty related to the Loan, the Loan Documents, other
information related to the Loan, the enforceability of the
Loan Documents, the ownership, existence, value,
sufficiency, condition, environmental status or status of
title of the Property or any other collateral securing
payment of the Loan, the creditworthiness of Borrower, or
any other party that may be obligated on the Loan or the
perfection or appropriateness of any filing with respect to
any lien or security interest related to the Loan in
connection with the sale and assignment of the Loan and the
Loan Documents.
(4) Buyer reaffirms, as of the
date of the Closing, all of Buyers representations and
warranties contained in Paragraph 12 of this Agreement.
9. Condition of Title and Title Policy.
With respect to each of the Loan and the Second Loan, on or
before the Close of Escrow, Buyer shall cause Title Company
to issue in favor of Buyer the Title Policy showing that by
a valid assignment the beneficial interest under the Deed of
Trust and Second Deed of Trust has been transferred to
Buyer, subject only to the Approved Title Conditions. Coast
shall pay for the entire cost of the Title Policy.
10. Costs and Expenses. Except as otherwise
provided in the supplemental escrow instructions, with
respect to the Loan and the Second Loan, Coast shall pay for
any and all documentary transfer taxes, or equivalent or
like taxes, and all recording and filing fees incurred in
the closing of this transaction. Coast and Buyer shall
additionally divide equally all escrow fees incurred in
connection with the closing of this transaction. Each party
shall be responsible for its own attorneys' fees incurred in
connection with the review, negotiation and preparation of
this Agreement, the Exhibits attached to this Agreement and
any other agreement, instrument or document prepared by
Buyer's or Coast's legal counsel in connection with the
closing of this transaction.
11. Closing. On or before the Close of
Escrow, and when all conditions precedent have been
satisfied, Escrow Holder shall close the Escrow by
proceeding as follows:
11.1 With respect to the Loan and the Second
Loan, record or cause the recordation of the Assignment of
Deed of Trust, the Assignment of Assignment of Leases, and
the UCC-2 Fixture Filing, and any other documents which
Coast and Buyer may require, to be recorded in the County,
and obtain conformed copies thereof for distribution to
Coast and Buyer, and deliver or cause to be delivered the
UCC-2 State Filing to the Office of the Secretary of State
and obtain conformed copies thereof for distribution to
Coast and Buyer.
11.2 Direct Title Company to issue the Title
Policy in favor of Buyer, subject only to the Approved Title
Conditions.
11.3 Disburse all funds deposited with Escrow
Holder by Buyer in payment of the Purchase Price and any
other obligations hereunder as follows: (a) deduct from the
account of Coast all items chargeable to Coast under this
Agreement, including amounts due under Paragraphs 9 and 10;
(b) credit to the account of Coast all items due to Coast
under this Agreement; (c) disburse to Coast by wire transfer
promptly upon the Close of Escrow the remaining amount due
to Coast; and (d) any funds remaining after deducting
Buyer's share of the closing costs and expenses, and all
other amounts chargeable to Buyer under this Agreement,
shall be returned to Buyer by Escrow Holder's check.
11.4 (a) With respect to the Loan, regularly
scheduled monthly principal and interest payments due under
the Note shall be prorated for the period beginning on the
first day of the calendar month in which the closing occurs
through the Close of Escrow, assuming a three hundred and
sixty (360) day year, and, subject to the provisions of
Paragraph 3 hereof, shall be paid in cash to Coast, on or
before one (1) business day prior to the Close of Escrow, at
the interest rate provided for in the Note; and (b) with
respect to the Second Loan, regularly scheduled monthly
principal and interest payments due under the Second Note
shall be prorated for the period beginning on the first day
of the calendar month in which the closing occurs through
the Close of Escrow, assuming a three hundred and sixty
(360) day year, and, subject to the provisions of Paragraph
3 hereof, shall be paid in cash to Coast, on or before one
(1) business day prior to the Close of Escrow, at the
interest rate provided for in the Note. Notwithstanding
anything to the contrary contained herein, upon the Close of
Escrow Buyer shall be entitled to retain (i) all payments
received by Buyer for the Loan or the Second Loan after the
Closing Date of any kind or character, including, without
limitation, all principal and interest (other than the
regularly scheduled monthly principal and interest payments
described in subparagraphs (a) and (b) above, and proceeds
from compromises and settlements; and (ii) a credit against
the amount of the Purchase Price for all amounts held by
Coast in any escrow reserve account required to be
maintained in accordance with the terms of the Loan
Documents. The regularly scheduled monthly payments
described in subparagraphs (a) and (b) of this paragraph
11.4 shall be prorated as of 11:59 p.m. on the day
immediately preceding the Close of Escrow.
11.5 With respect to the Loan and the Second
Loan, disburse to Buyer originals of this Agreement, the
Loan Documents, the Title Exceptions, the Assignment of Loan
Documents, the FIRPTA, the Assignment and Endorsement of
Promissory Note, disburse to Buyer copies of the Release and
the Certificate, and disburse to Buyer conformed copies of
the Assignment of Deed of Trust, the Assignment of
Assignment of Leases, the UCC-2 Fixture Filing, and the UCC-
2 State Filing, the Substitution of Trustee, and any other
documents (or copies thereof) deposited into Escrow pursuant
to this Agreement.
11.6 With respect to the Loan and the Second
Loan, disburse to Coast the originals of this Agreement, the
Release, and the Certificate, disburse to Coast copies of
the Assignment of Loan Documents, the Title Exceptions, the
FIRPTA, Assignment and Endorsement of Promissory Note, and
disburse to Coast conformed copies of the Assignment of Deed
of Trust, Assignment of Assignment of Leases, the
Substitution of Trustee, UCC-2 State Filing, and UCC-2
Fixture Filing, and any other documents (or copies thereof)
deposited into Escrow pursuant to this Agreement.
12. Buyer's Representations and Warranties.
With respect to the Loan and the Second Loan, Buyer and each
person executing this agreement on its behalf hereby
represent and warrant to Coast each of the following:
12.1 Buyer has had access to and
has inspected the Property to the extent that Buyer and its
advisors have deemed necessary or desirable.
12.2 Buyer has been advised to
undertake, has been given the opportunity to undertake, has
undertaken and is relying solely on, its own investigation
of the Loan, the Second Loan, the Loan Documents, the
Operating Documents, the Loan Service Documents, and the
Property and its own investigation and determination of the
ownership, existence, value, condition and environmental
status of the Property and the creditworthiness of Borrower
and any other parties that may be obligated under the Loan.
12.3 Buyer is a sophisticated
investor and is sufficiently knowledgeable and experienced
in financial and business matters, including, without
limitation, the purchase and ownership of promissory notes,
commercial real estate, mortgages, deeds of trust and
chattel paper, to be able to evaluate the risks and merits
of this transaction.
12.4 Neither the execution and
delivery by Buyer of this Agreement, nor the performance by
Buyer of its obligations hereunder, will (a) conflict with,
or result in a breach of, any of the material terms,
conditions, or provisions of any law, rule or regulation
applicable to Buyer or any order, injunction, or decree of
any court or governmental instrumentality or of any bond,
debenture, note, mortgage, deed of trust, indenture,
agreement or other instrument to which Buyer is now a party
or by which it may be bound, or constitute a default
thereunder after the expiration of any applicable notice and
cure period, or (b) result in the creation or imposition of
any claim, lien, security interest, charge, or other
encumbrance of any nature whatsoever upon any property of
Buyer pursuant to the terms of any such agreement or
instrument.
12.5 Neither the execution and
delivery by Buyer of this Agreement, nor the performance by
Buyer of its obligations hereunder requires (a) the consent,
authorization, or approval of, the giving of notice to, or
the registration with, or the taking of any other action in
respect of, any federal, state, or foreign governmental
authority or agency, pursuant to any law, rule, or
regulation applicable to Buyer or pursuant to any order,
injunction or decree of any such authority or agency, or (b)
the consent, authorization or approval of, or the giving of
notice to any partner, shareholder, officer, director,
affiliate, or creditor of Buyer.
12.6 Buyer has the legal power,
right, and authority to enter into this Agreement and the
instruments referenced herein, and to consummate the
transaction contemplated hereby.
12.7 All requisite action
(corporate, trust, partnership, or otherwise) has been taken
by Buyer in connection with the entering into this Agreement
and the instruments referenced herein and the consummation
of the transaction contemplated hereby. No further consent
of any shareholder, creditor, investor, judicial or
administrative body, governmental authority, or other party
is required.
12.8 The individuals executing this
Agreement and the instruments referenced herein on behalf of
Buyer have the legal power, right, and actual authority to
bind Buyer to the terms and conditions hereof and thereof.
12.9 This Agreement and all
documents required hereby to be executed by Buyer are and
shall be valid, legally binding obligations of, and
enforceable against, Buyer in accordance with their terms,
subject to bankruptcy, insolvency, and other limitations on
creditors' rights.
13. Coast's Representations and Warranties.
Coast hereby represents and warrants to Buyer each of the
following:
13.1 Coast is the holder of an undivided
78.63 % beneficial interest in the Loan and the other First
Loan Documents, and Coast has the right to assign its right,
title, and interest in and to the Loan and the other First
Loan Documents. Washington is the holder of an undivided
21.37% beneficial interest in the Loan and the other First
Loan Documents.
13.2 Coast is the sole owner and holder of
the Second Note, and the other Second Loan Documents and has
the right to assign its right, title, and interest in and to
the Second Note and the other Second Loan Documents.
13.3 Coast is, and as of the Closing Date,
will be a federally chartered capital stock savings bank
duly organized, validly existing and in good standing under
the laws of the United States, and is qualified to conduct
business in the State of California. Coast has taken all
necessary action to authorize the execution, delivery and
performance of this Agreement by it, and has the power and
authority to execute, deliver and perform this Agreement and
all the transactions contemplated hereby;
13.4 The Agreement and all of the obligations
of the Coast hereunder are the legal, valid and binding
obligations of the Coast, enforceable in accordance with the
terms of this Agreement;
13.5 To the best of Coast's knowledge, there
is no action, suit or proceeding pending against the Coast
in any court or by or before any other governmental agency
or instrumentality which would materially and adversely
affect the ability of the Coast to carry out the
transactions contemplated by this Agreement.
13.6 As to each of the Loan or the Second
Loan sold hereunder:
13.6.1 Except as otherwise set forth in
the Loan Documents, Coast is transferring such loan and the
Loan Documents free and clear of any and all liens, pledges,
charges or security interests of any nature encumbering such
loan and the related Loan Documents;
13.6.2 The proceeds of the Loan or the
Second Loan have been fully disbursed and, except as
otherwise set forth in the Loan Documents, there is no
requirement for future advances, payments, draws, or funding
thereunder, nor is Coast obligated to reimburse the Borrower
thereunder for or complete any off-site or on-site
improvements with respect to the Property;
13.6.3 The assignment of the Loan and
the Second Loan, and the Assignments of the Loan Documents,
constitutes the legal, valid and binding assignment of Coast
to Buyer;
13.6.4 To the best of Coast's
knowledge, there is no proceeding known to the Coast to be
pending for the total or partial condemnation of the
Property.
13.6.5 All Loan Documents, Operating
Documents, Title Documents, and Loan Service Documents
pertaining to the Loan and the Second Loan, which exist and
are in Coast's possession or control, which are not
privileged or are not an internal memorandum or report of
Coast have been made available to Buyer prior to execution
of this Agreement. To the best of Coast's knowledge, copies
of any original documents or papers made available to Buyer
are true and correct copies of the documents and papers they
purport to be;
13.6.6 Except as otherwise provided in
the Loan Documents, neither the Loan nor the Second Loan is
cross-collateralized, nor is the Property subject to any
cross-collateralization, with any other Coast loans.
13.6.7 The outstanding principal
balance of the Loan as of July 31, 1997 was $7,823,822.45;
the accrued and unpaid interest as of July 31, 1997 was $0
and the amount of any reserve escrow account as of July 31,
1997 was $0. The outstanding principal balance of the
Second Loan as of July 31, 1997 was $9,722,008.03; the
accrued and unpaid interest as of July 31, 1997 was $0 and
the amount of any reserve escrow account as of July 31, 1997
is $0.
13.6.8 During the period commencing on
the date on which this Agreement is executed by both Coast
and Buyer and ending on the Closing Date, Coast shall not,
except as required by law or the terms of the Note, the
Second Note, the Loan Documents, or any other applicable
document, release any of the collateral for the Loan or the
Second Loan or any party from any liability on or with
respect to the Loan or the Second Loan, compromise or settle
any claims of any kind or character with respect to the Loan
or the Second Loan, enter into any modification, amendment,
supplement or waiver with respect to the Loan or the Second
Loan, the Note or the Second Note, the Loan Documents,
without Buyer's written consent, nor will Coast provide any
additional advances under the Loan without Buyer's written
consent, except as required by law or by the terms of the
Loan Documents.
13.6.9 Coast acknowledges that it
understands the meaning and legal consequences of the
representations, warranties, covenants and acknowledgements
set forth in this Paragraph 13.
13.6.10 For the purposes of this
Agreement, the phrase "to the best of Coast's knowledge"
shall mean the actual knowledge of Xxx Xxxxxxxxx, Vice
President of Coast, without the duty of inquiry or
investigation.
14. NO REPRESENTATIONS BY COAST OR
WASHINGTON. BUYER IS PURCHASING COAST'S AND WASHINGTON'S
INTEREST IN THE LOAN DOCUMENTS "AS-IS," WITHOUT RECOURSE TO
COAST OR WASHINGTON, AND WITHOUT ANY REPRESENTATIONS OR
WARRANTIES WHATSOEVER BY COAST OR WASHINGTON EXCEPT THOSE
EXPRESSLY STATED IN THIS AGREEMENT. IN PARTICULAR, BUT
WITHOUT LIMITATION, EXCEPT AS OTHERWISE EXPRESSLY STATED IN
THIS AGREEMENT, COAST AND WASHINGTON MAKE NO REPRESENTATIONS
OR WARRANTIES REGARDING THE VALUE OF THE PROPERTY, THE
ABILITY OF BORROWER TO REPAY THE LOAN OR THE ENFORCEABILITY
OF THE LOAN DOCUMENTS. BUYER REPRESENTS, WARRANTS, AND
ACKNOWLEDGES THAT BUYER HAS MADE AN INDEPENDENT INSPECTION
AND INVESTIGATION OF THE PROPERTY, THE CONDITION OF TITLE,
THE LOAN, THE SECOND LOAN, AND THE LOAN DOCUMENTS, AND
EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT THAT
BUYER IS PURCHASING THE LOAN DOCUMENTS AT BUYER'S SOLE RISK
BASED UPON BUYER'S INDEPENDENT INSPECTION AND INVESTIGATION
AND WITHOUT RELIANCE ON ANY REPRESENTATION, WARRANTY, OR
STATEMENT OF COAST, WASHINGTON OR COAST FED SERVICES, THE
TRUSTEE UNDER THE DEED OF TRUST, OR THE AGENTS OR EMPLOYEES
OF EITHER OF THEM.
15. "As Is" Condition of Property. Buyer
has made, or will on or before the, Contingency Date, have
made an on-site inspection of the Property, including all
improvements thereon, and/or has otherwise investigated the
Property, its current owner, together with zoning,
environmental condition, title matters and the like to
Buyer's satisfaction, or Buyer has had an opportunity to
perform the above functions; and except as specifically
provided to the contrary in this Agreement, Coast and
Washington are fully and completely released from all
responsibility and liability regarding the condition,
fitness, suitability, evaluation and/or utility of the
Property. Buyer expressly acknowledges that Buyer is buying
the Loan and the Second Loan secured by the Property and
such security is in an "AS IS" condition with all faults and
Buyer has not relied on any warranties, promises,
understandings or representations, express or implied, of
Coast or Washington or any agent of Coast or Washington
relating to the Property and all aspects thereof, including,
without limitation, the presence or absence of any hazardous
or toxic substances, the suitability of the use of the
Property for any purpose, access to any public or private
road or right of way, or the compliance of the Property with
any applicable laws, regulations, or ordinances, including,
without limitation, those related to hazardous or toxic
waste or substances, building, zoning, fire hazard, drainage
and licensing requirements. Buyer acknowledges that any and
all leasing information, feasibility or marketing reports,
or other information of any type that Buyer has received or
may receive from Coast or Washington or its agents is
furnished on the express condition that Buyer shall or would
make an independent verification of the accuracy of any or
all such information, all such information being furnished
without any warranty whatsoever (express or implied), except
as otherwise specifically provided in this Agreement. Buyer
agrees that it will not attempt to assert any liability
against Coast or Washington and/or its agents for furnishing
such information, and Buyer agrees to indemnify and hold
Coast and Washington and/or its agents free of and harmless
from any and all such claims of liability. This indemnity
shall survive the Close of Escrow or the termination of this
Agreement.
16. Indemnification. Buyer hereby agrees to
indemnity, protect and hold harmless Coast, Washington, any
past, present or future Parent Company ("Parent Company") of
Coast or Washington, any past, present or future affiliate
or subsidiary company of Coast, Washington or Parent
Company, including the employees, agents, representatives,
directors, officers, shareholders, attorneys, accountants,
successors and assigns, of any of them (collectively, the
"Related Persons") against, and to hold such parties
harmless from all claims, demands, liabilities, losses,
damages, costs and expenses, including, without limitation,
reasonable attorneys' fees and costs, incurred by such
parties to the extent arising after the Closing Date in
connection with any act, omission, conduct or activity of
Buyer (including Buyer's employees, agents, representatives,
directors, officers, shareholders, attorneys accountants) in
its capacity as lender with respect to the Note, the Second
Note, the other Loan Documents, the Property or the
environmental condition of the Property.
17. Release. Buyer hereby waives and
releases any claims against Coast, Washington and the
Related Persons pertaining to the existence, release or
threatened existence or release of Hazardous Substances (as
defined in Paragraph 17.2 of this Agreement) at, on, in,
under, about, above, from or adjacent to the Property and
its surroundings, or the environmental condition of the
Property, including, without limitation, claims arising
under one or more Environmental Laws (as defined in
Paragraph 17.1 of this Agreement).
17.1 Environmental Laws. Environmental Laws
shall mean any and all federal, state, municipal and local
laws, statutes, ordinances, rules, regulations, orders and
decrees, whether statutory or common law, as amended from
time to time, now or hereafter in effect, or promulgated,
pertaining to the environment, public health and safety and
industrial hygiene, including the use, generation,
manufacture, production, storage, release, discharge,
disposal, handling, treatment, removal, decontamination,
clean-up, transportation or regulation of any Hazardous
Substance as defined in Paragraph 17.2 of this Agreement.
Environmental Laws shall include, without limitation, the
Comprehensive Environmental Response Compensation Liability
Act of 1980 ("CERCLA"), 42 U.S.C. Sections 9601, et seq.,
the Resource Conservation and Recovery Act of 1976 ("RCRA"),
42 U.S.C. Sections 6901, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., the
Residential Lead-Based Paint Hazard Reduction Act of 1992,
42 U.S.C. 4852d, and the California Health and Safety Code
Section 25100, et seq., as amended from time to time. This
definition shall not be construed or interpreted to limit or
restrict any definition or provision of any Exhibit to this
Agreement.
17.2 Hazardous Substance. Hazardous
Substance shall mean any hazardous substance, hazardous
waste or hazardous material as defined in one or more
Environmental Laws, petroleum hydrocarbons including crude
oil or any fraction thereof, asbestos, polychlorinated
biphenyls, lead-based paint and/or lead-based paint hazards
(as those terms are defined in the Lead-Based Paint
Statute), any noxious, toxic, flammable explosive or
radioactive substance, any waste, material, or matter, and
any other substance, material, waste or matter now or
hereafter regulated by one or more Environmental Laws. This
definition shall not be construed or interpreted to limit or
restrict any definition or provision of any Exhibit to this
Agreement.
18. Notices. All notices or other
communications required or permitted hereunder shall be in
writing, and shall be telecopied, personally delivered
(including by means of professional messenger service), sent
by registered or certified mail, postage prepaid, return
receipt requested, or sent by recognized overnight air
courier (e.g., Federal Express), cost prepaid, and shall be
deemed received upon the date of delivery of a legible copy,
if telecopied, and shall be deemed received by 5: 00 p.m.,
California time, on the date of delivery (otherwise on the
following date), if personally delivered, or two (2) days
following delivery to the U.S. Mail, if mailed, and one (1)
day following delivery to the courier if sent by overnight
air courier and addressed as follows:
To Buyer: Arden Realty Limited Partnership
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Ms. Brig Troy
With a Copy to: Loeb & Loeb LLP
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxx, Esq.
To Coast: Coast Federal Bank
0000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a Copy to: Coast Federal Bank
0000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
19. Conditions Precedent to Sale of the Note
and the Second Note. The following are conditions precedent
to the sale and purchase of the Note and the Second Note
pursuant to this Agreement:
19.1 Execution of Documents. Buyer shall
have executed, acknowledged, where applicable, and delivered
to Coast and Escrow Holder this Agreement and each of the
documents specified in this Agreement.
19.2 With respect to the Loan, Washington
shall have executed and acknowledged, where applicable, and
delivered to Coast and/or Escrow Holder each of the
documents required to close this transaction, including,
without limitation, the Estoppel Letter.
19.3 Execution of Release. Buyer shall
execute and acknowledge, where applicable, and deliver to
Coast the Release.
19.4 Representations and Warranties. The
continued truth, accuracy and completeness of each of the
representations and warranties of Buyer set forth in
Paragraph 12 above and the continued truth, accuracy and
completeness of each of the representations and warranties
of Coast set forth in Paragraph 13 above.
19.5 Payment. Buyer shall have deposited
with Escrow Holder the Deposit and the Cash Payment. The
Deposit shall have been paid directly to Escrow Holder
simultaneously with the execution of this Agreement.
19.6 All Conditions. Coast, Washington and
Buyer shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or
complied with by them prior to or at the Close of Escrow.
19.7 Effectiveness of Sale. Notwithstanding
Coast's negotiation, preparation or execution of this
Agreement, or any of the instruments or documents attached
as exhibits, and notwithstanding anything else to the
contrary, the sale of the Note, and the Second Note, and the
assignment of the Loan Documents shall not be deemed to have
occurred unless and until the recordation of the Assignments
of Deed of Trust has occurred with respect to the Deed of
Trust and the Second Deed of Trust, and all other conditions
precedent have been met or waived by Coast.
19.8 Transfer of Servicing. As of Close of
Escrow, Coast shall transfer to Buyer the servicing with
respect to the Loan and the Second Loan. Subsequent to the
Close of Escrow, Coast shall notify the Borrower of the
transfer to Buyer and Buyer shall notify the Borrower
regarding the manner in which payments on the Loan are to be
made. Coast's notification shall be in the form attached
hereto as Exhibit "M".
19.9 Substitution of Trustee. With respect
to the Deed of Trust and the Second Deed of Trust, Buyer
shall execute and record or cause the recordation of a
Substitution of Trustee naming Title Company as Trustee
thereunder.
20. Default. In the event of a default by
Coast or Buyer, the following shall apply:
20.1 DEFAULT BY COAST. EXCEPT AS PROVIDED
HEREIN, IN THE EVENT THE CLOSE OF ESCROW AND THE
CONSUMMATION OF THE TRANSACTION CONTEMPLATED HEREIN DO NOT
OCCUR BY REASON OF ANY DEFAULT BY COAST, AND PROVIDED BUYER
SHALL NOT BE IN DEFAULT UNDER THIS AGREEMENT, BUYER'S SOLE
AND EXCLUSIVE REMEDY SHALL BE THE RETURN OF ALL FUNDS PAID
BY BUYER TO ESCROW HOLDER TOGETHER WITH INTEREST THEREON,
THE PAYMENT BY COAST OF ANY CHARGES REQUIRED TO BE PAID BY
OR TO ESCROW HOLDER OR TITLE COMPANY, AND THE REIMBURSEMENT
BY COAST FOR BUYER'S ACTUAL, OUT-OF-POCKET EXPENSES ARISING
FROM COAST'S BREACH AS SHOWN BY INVOICES AND OTHER EVIDENCE
SATISFACTORY TO COAST WITH SUCH REIMBURSEMENT ITSELF NOT TO
EXCEED ONE HUNDRED THOUSAND AND NO/100 DOLLARS
($100,000.00). THIS REMEDY IS IN LIEU OF ALL OTHER REMEDIES
BUYER MAY HAVE AT LAW OR IN EQUITY, INCLUDING THE SPECIFIC
PERFORMANCE OF THIS AGREEMENT AND BENEFIT-OF-THE-BARGAIN
MONEY DAMAGES. If FOR ANY REASON, WASHINGTON FAILS OR
REFUSES TO TAKE THE NECESSARY ACTION OR FAILS TO EXECUTE THE
DOCUMENTS REQUIRED TO CLOSE THIS TRANSACTION, AND THIS
TRANSACTION DOES NOT CLOSE AS A RESULT THEREOF, COAST SHALL
NOT BE IN DEFAULT UNDER THE TERMS OF THIS AGREEMENT.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, UPON THE
CLOSE OF ESCROW AND THE CONSUMMATION OF THE TRANSACTION
CONTEMPLATED HEREIN, THE REMEDY DESCRIBED IN THIS PARAGRAPH
20.1 SHALL BE TERMINATED.
/s/ RSZ /s/ GS
Buyer's Initials Coast's Initials
20.2 DEFAULT BY BUYER. IN THE EVENT THE
CLOSE OF ESCROW DOES NOT OCCUR AS PROVIDED BY REASON OF ANY
DEFAULT OF BUYER, BUYER AND COAST AGREE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES
WHICH COAST MAY SUFFER. THEREFORE BUYER AND COAST HEREBY
AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT
COAST WOULD SUFFER IN THE EVENT BUYER DEFAULTS AND FAILS TO
COMPLETE THE PURCHASE OF THE PROPERTY HEREUNDER IS AND SHALL
BE, AS COAST'S SOLE AND EXCLUSIVE REMEDY, WHETHER AT LAW OR
IN EQUITY, AN AMOUNT EQUAL TO THE DEPOSIT PLUS ACCRUED
INTEREST THEREON. SAID AMOUNT SHALL BE THE FULL, AGREED AND
LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY
BUYER, ALL OTHER CLAIMS TO DAMAGES OR OTHER REMEDIES BEING
HEREIN EXPRESSLY WAIVED BY COAST. UPON FAULT BY BUYER AND
UPON COAST'S ELECTION, THIS AGREEMENT SHALL BE TERMINATED
AND NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR
OBLIGATIONS HEREUNDER, EACH TO THE OTHER, EXCEPT FOR THE
RIGHT OF COAST TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER
AND ESCROW HOLDER AS HEREIN PROVIDED.
/s/ RSZ /s/ GS
Buyer's Initials Coast's Initials
21. Broker. Coast and Buyer represent and
warrant to the another that no broker or finder has been
engaged in connection with the transaction contemplated by
this Agreement, or to its knowledge is in any way connected
with such transaction. Coast and Buyer agree to indemnify
one another from any claim against the other for any broker
or agent commission arising from acts, engagements or
alleged acts or engagements of Buyer or Coast, respectively,
as the case may be, or related to this Agreement. This
indemnification clause shall survive the Close of Escrow,
the termination of this Agreement or the cancellation of
Escrow.
22. General Provisions.
22.1 Partial Invalidity. If any term or
provision of this Agreement or the application thereof to
any person or circumstance shall, to any extent, be invalid
or unenforceable, the remainder of this Agreement, shall not
be affected thereby, and each such other term and provision
of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.
22.2 Waivers. No waiver of any breach of any
covenant or provision herein contained shall be deemed a
waiver of any preceding or succeeding breach thereof, or of
any other covenant or provision herein contained. No
extension of time for performance of any obligation or act
shall be deemed an extension of the time for performance of
any other obligation or act.
22.3 Survival of Representations. Except as
otherwise provided, the covenants, agreements,
representations and warranties made herein shall survive the
Close of Escrow.
22.4 Successors and Assigns. This Agreement
shall be binding upon and shall inure to the benefit of the
heirs, devisees, legatees, personal representatives,
administrators, executors and successors and assigns of the
parties hereto.
22.5 Professional Fees. In the event of the
bringing of any action or suit by a party hereto against
another party hereunder by reason of any breach of, or to
enforce, any of the covenants, agreements or provisions on
the part of the other party arising out of this Agreement,
then in that event the prevailing party shall be entitled to
have and recover of and from the other part all costs and
expenses of the action or suit, including reasonable
attorneys' fees, accounting and engineering fees, and any
other professional fees resulting therefrom.
22.6 Entire Agreement. This Agreement
(including all exhibits attached hereto) is the final
expression of, and contains the entire agreement between,
the parties with respect to the subject matter hereof and
supersedes all prior understandings with respect thereto,
including all prior letters of intent. This Agreement may
not be modified, changed or supplemented, except by written
instrument signed by the party to be charged or by its agent
duly authorized in writing or as otherwise expressly
permitted herein. The parties do not intend to confer any
benefit hereunder on any person, firm or corporation other
than the parties hereto.
22.7 Time of Essence. Time is strictly of
the essence with respect to each and every term, condition,
obligation and provision hereof. Failure to timely perform
any of the terms, conditions, obligations or provisions
hereof by either party shall constitute a material breach of
a non-curable (but waivable) default under this Agreement by
the party so failing to perform.
22.8 Construction. Headings at the beginning
of each paragraph and subparagraph are solely for the
convenience of the parties and are not a part of this
Agreement. Whenever required by the context of this
Agreement, the singular shall include the plural and the
masculine shall include the feminine and vice versa. This
Agreement shall not be construed as if it had been prepared
by one of the parties, but rather as if both parties had
prepared the same. Unless otherwise indicated, all
references to paragraphs and subparagraphs are to this
Agreement. All exhibits referred to in this Agreement and
attached hereto are incorporated herein by this reference.
22.9 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
an original, but all of which shall constitute one
agreement.
22.10 Governing Law. The provisions of this
Agreement governing the contractual rights and obligations
of Buyer and Coast shall be governed, construed, and
enforced according to the laws of the United States and,
where not inconsistent, by the laws of the State of
California.
22.11 Efforts to Close Escrow. Buyer and
Coast agrees to execute all such instruments and documents
and to take all actions pursuant to the provisions hereof in
order to consummate the purchase and sale herein
contemplated by this Agreement and shall use their
reasonable efforts to accomplish the Close of Escrow in
accordance with the provisions hereof.
22.12 No Reliance. In entering into this
Agreement, neither party has relied on statements or
representations made by the other party hereto, their agents
or representatives, with the exception of the
representations set forth herein. Each party has considered
all matters contained herein with the aid of counsel and has
relied entirely on their own judgment and the judgment of
their own counsel.
23. Arbitration.
23.1 In the event of any dispute, claim or
controversy between the parties hereto arising out of or
relating to the interpretation or enforcement of this
Agreement, whether in contract, tort, equity or otherwise,
such dispute, claim or controversy shall be resolved by and
through an arbitration proceeding to be conducted under the
auspices and the commercial arbitration rules of the
American Arbitration Association (or any like organization
successor thereto) at Los Angeles, California before an
arbitrator who has been agreed to in writing by both
parties. The arbitrability of any such dispute, claim or
controversy shall likewise be determined in such
arbitration. Such arbitration proceeding shall be conducted
in as expedited a manner as is then permitted by the
commercial arbitration rules (formal or informal) of the
American Arbitration Association. Both the foregoing
agreement of the parties to arbitrate any and all such
disputes, claims and controversies and the results,
determinations, findings, judgments and/or awards rendered
through any such arbitration shall be final and binding on
the parties and may be specifically enforced by legal
proceedings. Time is of the essence of this arbitration
procedure, and the arbitrator(s) shall be instructed and
required to render his (their) decision within ten (10) days
following completion of the arbitration. Judgment on any
award rendered by such arbitrator may be entered in any
court having jurisdiction over the subject matter of the
controversy.
23.2 Procedure. Such arbitration may be
initiated by written notice from either party to the other
setting forth a demand for arbitration and detailing with
specificity the nature of the dispute, claim or controversy
to be arbitrated.
23.3 Discovery Rules. The parties and
arbitrator(s) shall have all of the rights and duties
relating to discovery provided by ?1283.05 of the California
Code of Civil Procedure, which is hereby made a part of this
Agreement, except that the arbitrator(s) shall have the
right to disapprove or to limit any discovery which such
arbitrator(s) deems to be for purposes of delay or otherwise
unnecessarily burdensome or oppressive.
23.4 Qualifications of Arbitrator(s). Each
arbitrator in any such arbitration shall, insofar as is
practicable, be a person who is expert in the subject matter
of the dispute.
23.5 Governing Law. The arbitrator(s) shall
follow any applicable federal law and California state law
(with respect to all matters of substantive law) in
rendering an award.
23.6 Opportunity to Present Evidence. Prior
to rendering his (their) determination or award, the
arbitrator(s) shall afford each party an opportunity to
express its views as to the proper determination of the
matters under arbitration, orally or in writing as the
arbitrator(s) may deem appropriate; provided, however, that
(i) either party submitting written material shall be
required to submit a copy of that material to the other
party who shall have the opportunity to submit a written
reply to that material within ten (10) days, and (ii) if
either party is to submit oral statements, the other party
shall be afforded a reasonable opportunity to be present at
the time at which these oral statements are made before the
arbitrator(s) and to reply orally.
23.7 Costs of Arbitration. The cost of the
arbitration proceeding and any proceeding in court to
confirm or to vacate any arbitration award, as applicable
(including, without limitation, attorneys' fees and costs),
shall be borne by the unsuccessful party or at the
discretion of the arbitrator(s), may be prorated between the
parties in such proportion as the arbitrator(s) determine(s)
to be equitable and shall be awarded as part of the judgment
of the arbitrator(s).
23.8 Exclusive Remedy. The parties agree
that arbitration as set forth above shall be the sole means
of resolving any disputes, claims and controversies among
them arising out of or relating to the interpretation or
enforcement of this Agreement.
IN WITNESS, WHEREOF, the parties hereto have
executed this Agreement as of the day and year set forth
above.
SELLER: BUYER:
COAST FEDERAL BANK, FEDERAL Arden Realty Limited
SAVINGS BANK, a federally Partnership, a Maryland
chartered capital stock limited partnership
savings bank, as successor
in interest to Coast Savings By: Arden Realty, Inc.,
and Loan Association, a a Maryland corporation
California corporation Its General Partner
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx By: /s/ X. X. Xxxxx
Its: Vice President Name: Xxxxxxx X. Xxxxx
Its: CEO
ESCROW HOLDER
FIRST AMERICAN TITLE COMPANY
OF LOS ANGELES
By: /s/ Xxxxxxxx Xxxxxxxx
Name: Xxxxxxxx Xxxxxxxx
Its: Senior Escrow Officer
