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EXHIBIT 10.31
MEMBERSHIP INTEREST PURCHASE AGREEMENT
(301 South Fair Oaks)
This Membership Interest Purchase Agreement (this "Agreement") is made
and entered into effective as of October 1, 1999, by and between KW Del Mar
Group, Inc., a California corporation ("Seller"), and Camden Investment Property
Group Inc., a California corporation ("Buyer"), with reference to the following
facts and circumstances:
RECITALS
A. Seller owns a Seventy Five Percent (75%) membership interest in Del Mar
Pasadena, LLC, a California limited liability company ("Company"), which was
formed solely for the purpose of owning a membership interest in 301 South Fair
Oaks, LLC, a California limited liability company, whose sole purpose is to
acquire, own, finance, manage, maintain, improve, operate, sell, exchange,
dispose of or otherwise deal with that certain real property located at 000
Xxxxx Xxxx Xxxx xx xxx Xxxx xx Xxxxxxxx, Xxxxxx of Los Angeles, State of
California (the"Property").
B. Seller desires to sell to Buyer Fifty Three and Thirty Three One
Hundredths Percent (53.33%) of Seller's Seventy Five Percent (75%) membership in
Company (the "Interest") (representing Forty Percent (40%) of total Company
membership interests), at the price and upon the terms set forth in this
Agreement. Seller and Buyer agree that Seller shall sell, transfer, assign and
convey the Interest in the Company to Buyer, and that Buyer shall assume
Seller's entire membership interest, rights, liabilities, and obligations in the
Company, and that Buyer shall be substituted for Seller in Seller's capacity as
a member of the Company.
C. Buyer desire to purchase the Interest from Seller at the price and upon
the terms, conditions and covenants set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Seller and Buyer agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings indicated in this paragraph.
1.1. "Closing Date" shall mean that business day on which the
transactions described in this Agreement shall take place, and "Closing" shall
refer to the simultaneous delivery, by Buyer and Seller, of the documents,
instruments and payments provided for herein or as may otherwise be necessary or
appropriate to consummate the transactions contemplated by this Agreement.
1.2 "Purchase Price" shall mean that sum due Seller from Buyer set
forth in Section 2.2 of this Agreement.
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1.3 "Senior Loan" shall mean that certain loan by Tokai Bank to 301
South Fair Oaks, LLC, a California limited liability company secured by a first
priority lien on the Property.
1.4 "Interest" shall mean Fifty Three and Thirty Three One Hundredths
Percent (53.33%) of Seller's Seventy Five Percent (75%) membership in Company
(representing Forty Percent (40%) of total Company membership interests).
2. SALE AND TRANSFER OF Interest
2.1. Agreement of Sale and Purchase. On the terms and subject to
conditions set forth in this Agreement, on the Closing Date, Seller shall sell,
transfer, assign, and deliver to Buyer, and Buyer shall purchase from Seller,
all of the Interest.
2.2. Consideration For Interest. As full and complete consideration
for the transfer of the Interest by Seller to Buyer and for the other
transactions contemplated hereby, Buyer shall pay to Seller at Closing the cash
sum of Fifty Thousand and No/100 Dollars ($50,000.00).
3. COVENANTS, REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer makes the
following representations and warranties to Seller which shall survive the
Closing: Buyer is a Corporation, duly organized, validly existing and in good
standing under the laws of the State of California. Buyer has all requisite
power and authority to own its assets and properties and to conduct the business
in which it is engaged. This Agreement has been duly executed and delivered to
Seller by Buyer and is a valid and binding obligation of Buyer, enforceable
against it in accordance with its terms. Neither the execution, delivery or
performance of the terms of this Agreement, nor the consummation of the
transactions contemplated hereby, will conflict with, result in a breach of, or
constitute a default under any provision of the Articles of Incorporation or the
Bylaws of Buyer. Buyer agrees that at the Closing, Buyer will cause Company to
grant to Seller a right to special distributions as more particularly described
below.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER. Seller covenants,
represents and warrants to Buyer as follows:
4.1. Organization; Corporate Authority. Seller is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
California. Seller has all requisite corporate power and authority to own its
assets and properties and to conduct the businesses in which it is engaged. This
Agreement has been duly executed and delivered to Buyer by Seller and is a valid
and binding obligation of Seller, enforceable against it in accordance with its
terms. Neither the execution, delivery or performance of the terms of this
Agreement, nor the consummation of the transactions contemplated hereby, will
conflict with, result in a breach of, or constitute a default under (a) any
provision of the Articles of Incorporation or Bylaws of Seller, (b) any court or
administrative order, decree, or process to which Seller is a party, or by which
any of its assets are bound, (c) any mortgage, indenture, lease, agreement or
other document or instrument to which Seller is a party, or by which its assets
are bound, or (d) any permit, license, statute, ordinance, rule or regulation
applicable to Seller or by which its assets are bound.
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4.2. Title to Interest. Seller is, and at the Closing Date will be,
the owner, beneficially and of record, of one hundred percent (100%) of the
Interest, and except for any security interests or liens granted to Xxxx
Commercial Credit or Tokai Bank and existing on the date of Closing, Seller owns
the Interest free and clear of all liens, encumbrances, security agreements,
equities, options, claims, charges or other restrictions of any kind.
4.3 Tax Returns and Audits. Within the times and in the manner
prescribed by law, Company has filed all federal, state, and local tax returns
required by law to have and have paid all taxes, assessments, penalties and
interest due and payable and there is no known outstanding tax, assessment,
interest or penalty, or deficiency proposed by any federal, state or local
taxing authority with respect to any tax period.
4.4 Accounts Receivable. Buyer has been provided with a true and
accurate operating statements and rent rolls with respect to the Property.
4.5 Accounts Payable. Buyer has been provided with copies complete
and accurate schedules of the accounts payable of Company reflecting the
creditor, date obligation was incurred, partial amounts paid if any, balance
due, and the goods or services (and vendor or provider thereof) represented by
such account payable. The accounts payable were each incurred in the normal
course of business and represent ordinary and necessary reasonable business
expenses of Company.
4.6 Title to Assets. Company has good and marketable title to all its
assets and interests in assets, whether real, personal, mixed, tangible, and
intangible, which constitute all the assets and interests in assets that are
used in the business of Company. All these assets are free and clear of
restrictions on or conditions to transfer or assignment, and free and clear of
mortgages, liens, pledges, charges, encumbrances, equities, claims, easements,
rights of way, covenants, conditions, or restrictions. No shareholder, officer,
director, or employee of Company, nor any spouse, child, or other relative or
any of these persons, owns, or has any interest, directly or indirectly, in any
of the real or personal property owned by or leased to Company or in or to any
copyrights, patents, trademarks, trade names, or trade secrets owned, possessed
or licensed by Company.
4.7 Existing Employment Contracts: Benefit or Retirement Plans. There
is no pending or, to Seller's knowledge, any threatened labor dispute, strike,
or work stoppage affecting Company's business.
4.8 Insurance Policies. Company has maintained and now maintains
insurance on all of its assets and business activities as are customarily
insured by businesses of its type and covering property damage and loss of
income by fire or other casualty and insuring against liabilities, claims and
risks against which it is legally required or otherwise customary to insure and
such policies provide adequate insurance coverage for the risks associated with
the Company's business.
4.9 Contracts and Agreements. Copies of all contracts, agreements,
leases or other obligations or commitments whether oral or written ("Contracts")
have been furnished or made available to Buyer. Company has performed all
obligations required to be performed by it to date under the Contracts. There is
no default or event that with notice or lapse of time, or both, would constitute
a default by any party to any of the Contracts. Company has not received notice
that any
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party to any of these agreement intends to cancel or terminate any of these
agreement or to exercise or not exercise any options under any of these
agreements. Company is not a party to, nor is any of its property bound by, any
agreement that is materially adverse to the business, property, or financial
condition of Company. To the knowledge of Seller, all of the Contracts are valid
and binding obligations of the parties thereto and are enforceable in accordance
with their terms.
4.10 Compliance with Laws. Company has at all times complied, and
Seller shall insure that at all times from the date hereof until the Closing
Date Company shall comply, fully and faithfully with all laws, orders,
regulations, rules and ordinances affecting to any extent or in any manner any
aspect of Company's business, and duly adopted, imposed or promulgated by any
legislative, executive, administrative or judicial body or officer of the United
States, State of California, or any other governmental authority having
jurisdiction over any aspect of or to any extent or any manner in connection
with Company's existence or business.
4.11 Litigation. Except as disclosed to Buyer in writing, there is no
suit, action, arbitration, or legal, administrative, or other proceeding, or
governmental investigation pending or, to the best knowledge of Seller,
threatened against or affecting Company, or any of its business, assets or
financial condition.
4.12 Authority and Consent. Seller has the right, power, legal
capacity, and authority to enter into and perform the obligations under, this
Agreement, and no approvals or consents of any person other than Seller is
necessary in connection with it, except that of the California Commissioner of
Corporations, if required, with respect to the transfer of the Interest.
Seller's obligation to transfer the Interest to Buyer pursuant to this Agreement
is expressly conditioned upon the grant of such consent (unless the need
therefore is obviated by circumstances or law to the satisfaction of Buyer).
5. SELLER'S OBLIGATIONS BEFORE CLOSING.
5.1 Buyer' Access to Premises and Information. Seller shall provide
Buyer and its counsel, accountants, lenders and other representatives with full
access during normal business hours to all properties, books, accounts, records,
contracts, and documents of or relating to Company. Seller shall furnish or
cause to be furnished to Buyer and their representatives all data and
information concerning the business, finances, and properties of Company that
may be reasonably requested.
5.2 Conduct of Business in Normal Course. Seller shall cause Company
to carry on its business and activities diligently and in substantially the same
manner as it has previously been carried out, and shall not use, institute or
make any methods of manufacture, purchase, sale, lease, management, accounting,
or operation that will vary materially from those methods used by Corporation as
of the date of this Agreement.
5.3 Preservation of Business and Relationships. Seller shall cause
Company to use its best efforts to preserve Company's business organization
intact, to keep available to Company its present officers and employees, to
preserve its present relationship with suppliers, customers, and others
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having business relationship with it and to maintain Company's existing business
permits, licenses, consents, approvals and certificates.
5.4 Corporate Documents. Seller shall furnish to Buyer for its
examination, at least ten (10) days before the Closing, the following:
(a) certified copies of the articles of organization and
operating agreement of Company in both cases as amended to date;
(b) the minute and record books of Company, containing all
records of all proceedings, consents, actions, and meetings of the
members and officers of Company;
(c) all permits, orders, and consents issued by the California
Commissioner of Corporations with respect to Company, or any security
issued by Company, and all applications for such permits, orders, and
consents; and
(d) the membership interest transfer books, if any, of Company
setting forth all transfers of any membership interests.
6. PROFESSIONAL SERVICES. Seller and Buyer agree that each shall be
responsible for all fees and costs for all professional services employed by
them in connection with this Agreement, including but not limited to attorneys,
accountants, brokers, or others.
7. CONDITIONS TO CLOSING.
7.1 Conditions to Buyer' Obligations. The obligations of Buyer to
consummate the transactions contemplated by this Agreement shall be subject, at
Buyer' option, to the satisfaction, prior to the Closing, of the following
conditions:
(a) Representations and Warranties True. Each representation
and warranty of Seller contained in this Agreement shall be true and
accurate as of the Closing Date as if made the Closing Date.
(b) Covenants Performed. Each covenant of Seller contained in
this Agreement and required to be performed prior to the Closing Date
shall have been fully performed as of the Closing Date.
(c) Consents. All consents and approvals of any governmental
agency or of any other person required for the consummation of the
transactions (or any of them) contemplated by this Agreement shall have
been obtained.
7.2 Conditions to Seller' Obligations. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject, at
Seller' option, to the satisfaction, prior to the Closing, of the following
conditions:
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(a) Representations and Warranties True. Each representation
and warranty of Buyer contained in this Agreement shall be true and
accurate as of the Closing Date as if made on the Closing Date.
(b) Covenants Performed. Each covenant of Buyer contained in
this Agreement and required to be performed prior to the Closing Date
shall have been fully performed as of the Closing Date.
8. CLOSING.
8.1 Time, Place and Location of the Closing. The Closing of the
transaction contemplated herein shall occur in the offices of Xxxxx, Xxxxxxxxx &
Xxxxxx, LLP, at 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, on
December 30, 1999 at 11:00 a.m..
8.2 Duties of the Seller at Closing. At the Closing, Seller shall
deliver to Buyer the following documents and instruments, in form and substance
satisfactory to the Buyer and its counsel:
(a) An assignment of membership interest executed by Seller,
and a certificate, if any, representing the Interest, duly endorsed by
Seller for transfer of the Interest;
(d) A shareholders agreement executed by Seller; and
(e) Any and all other instruments and documents executed by
Seller necessary to consummate the transaction contemplated herein.
8.3 Duties of the Buyer at Closing. At the Closing, Buyer shall
deliver to Seller:
(a) A check in the amount of Fifty Thousand and No/100 Dollars
($50,000.00) payable to the Seller;
(b) An assignment of membership interest executed by Buyer,
(c) A shareholders agreement executed by Buyer; and
(d Any and all other instruments and documents executed by
Buyer necessary to consummate the transaction contemplated herein.
9. MUTUAL RELEASE. Seller and Buyer unconditionally and forever release and
discharge each other from any action, cause of action, claim, demand, liability
or loss which either may have, now or in the future, which arises from or
relates to this Agreement. Seller and Buyer acknowledge that the Property is an
income producing property and that the value thereof is subject to the influence
of many factors including leases presently being negotiated but not yet in
effect, and leases which are in effect which may or may not be performing leases
in the future. The parties agree that the Purchase Price is fair and reasonable
notwithstanding potential upward or downward fluctuations in the fair market
value of the Interest as a result of the foregoing or for any other reason. The
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parties intend this release to be interpreted in the broadest fashion possible
and knowingly and voluntarily waive the provisions of California Civil Code
Section 1542 which provides, in part, as follows:
"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 THE SETTLEMENT WITH THE DEBTOR."
10. NOTICES. Any notice or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given if placed
in the mail, certified, postage prepaid, or personally delivered or telecopied
and addressed as follows:
TO SELLER: KW Del Mar Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. XxXxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
TO BUYER: Camden Investment Property Group Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address as shall be furnished by any party by notice pursuant
to this Section 10 and any such notice or communication shall be deemed to have
been given as of the date personally delivered, or 48 hours after deposit in the
mail.
11. NATURE AND SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. All
representations, warranties, covenants, and agreements of the parties contained
in this Agreement, or in any instrument, certificate, opinion, or other writing
provided for in it, shall survive the Closing.
12. ATTORNEYS' FEES AND COSTS. In the event of any legal action arising out
of or in any way related to the terms and provision of this Agreement, the
successful party in such proceeding shall be entitled to an award of reasonable
attorneys' fees and costs of suit to be fixed by the court before which such
action is heard.
13. GOVERNING LAW. This Agreement shall be construed in accordance with, and
be governed by, the laws of the State of California.
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14. TIME IS OF THE ESSENCE. Time is of the essence in this Agreement.
15. PARTIES, GENDER AND NUMBER. All of the terms and provision of this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective transferees, heirs, executors, distributees, or
successors, however and whenever chosen. The masculine, neuter or female gender
as well as the singular and plural shall be indiscriminately substituted each
for the other wherever and whenever the context of this Agreement shall render
it reasonably appropriate.
16. ENTIRE AGREEMENT. This Agreement represents the entire agreement and
understandings of the parties with reference to the transactions set forth
herein, and no representations or warranties have been made in connection with
this Agreement other than as expressly set forth herein. This Agreement
supersedes all prior negotiations, discussions, correspondence, communications,
understandings and agreements relating to the subject matter hereof, and all
prior drafts of the Agreement, all of which are merged into this Agreement.
17. WAIVERS AND AMENDMENTS. This Agreement may be amended, modified or
supplemented only in writing executed by all of the parties hereto. Any waiver
of any breach or of performance of any provision of this Agreement shall be
binding only if given in writing and executed by the party so waiving any such
breach or provision. The waiver by any party of such a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach, whether or not similar.
18. SEVERABILITY. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or unenforceability of the Agreement or any other term or provision
hereof.
19. COUNTERPARTS. This Agreement may be executed in two or more counterparts
and by each party or separate counterparts, each of which shall be deemed an
original and all of which taken together shall constitute but one and the same
document. Facsimile signatures shall be deemed original signatures for all
purposes.
20. FURTHER ASSURANCES. Each of the parties hereto shall take such other
action and execute such additional documents and certificates, and make such
filings, as may be necessary to effectuate the intent of this Agreement.
Further, Seller shall cooperate with Buyer and with Company after the Closing,
including by the furnishing of testimony and other evidence, as may reasonably
be requested by Buyer or by Company in the prosecution or defense of any
third-party claim, lawsuit or proceeding relating to Company or its business.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
Buyer:
Camden Investment Property Group Inc.,
a California corporation
By: ___________________________________
Name: _________________________________
Title: ________________________________
Seller:
KW Del Mar Group, Inc.,
a California corporation
By: ___________________________________
Name: _________________________________
Title: ________________________________
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ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST
This Assignment and Assumption of Member Interest (this "Assignment") is
made and entered into as December___, 1999, by and between KW Del Mar Group,
Inc., a California corporation ("Seller"), and Camden Investment Property Group
Inc., a California corporation ("Buyer"), with reference to the following facts
and circumstances:
RECITALS
A. Seller owns a Seventy Five Percent (75%) membership interest in
Del Mar Pasadena, LLC, a California limited liability company ("Company"), which
was formed solely for the purpose of owning a membership interest in 301 South
Fair Oak, LLC, a California limited liability company, whose sole purpose is to
acquire, own, finance, manage, maintain, improve, operate, sell, exchange,
dispose of or otherwise deal with that certain real property located at 000
Xxxxx Xxxx Xxxx xx xxx Xxxx xx Xxxxxxxx, Xxxxxx of Los Angeles, State of
California (the"Property").
B. Seller desires to sell to Buyer Fifty Three and Thirty Three One
Hundredths Percent (53.33%) of Seller's Seventy Five Percent (75%) membership in
Company (the "Interest") (representing Forty Percent (40%) of total Company
membership interests), at the price and upon the terms set forth in this
Agreement. Seller and Buyer agree that Seller shall sell, transfer, assign and
convey the Interest in the Company to Buyer, and that Buyer shall assume
Seller's entire membership interest, rights, liabilities, and obligations in the
Company, and that Buyer shall be substituted for Seller in Seller's capacity as
a member of the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Seller and Buyer hereto hereby
agree as follows:
Assignment, Assumption, and Substitution. Seller hereby transfers and
assigns to Buyer Fifty Three and Thirty Three One Hundredths Percent (53.33%) of
Seller's Seventy Five Percent (75%) membership in Company (representing Forty
Percent (40%) of total Company membership interests). Buyer hereby accepts such
assignment, and assumes and agrees to perform all of the obligations of Seller
under the operating agreement of the Company as a Member of the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the day and year first above written.
BUYER:
Camden Investment Property Group Inc.,
a California corporation
By: ___________________________________
Name: _________________________________
Title: ________________________________
SELLER:
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KW Del Mar Group, Inc.,
a California corporation
By: ___________________________________
Name: _________________________________
Title: ________________________________
