Arden Realty Limited Partnership
c/o Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000-X
Xxx Xxxxxxx, Xxxxxxxxxx 00000
December 5, 1996
Fidelity Partners, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
Re: Offer to Purchase Rights under Purchase
Agreement for Acquisition of Co-Tenancy
Interest in Union Bank Center, located
at 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx
Gentlemen:
By this letter, Arden Realty Limited Partnership,
a Maryland limited partnership ("Buyer") offers to purchase
from Fidelity Partners, Inc., a California corporation
("Seller"), (i) all of Seller's right, title and interest
(the "Haptel Purchase Rights") under that certain Agreement
of Purchase and Sale of Tenancy-in-Common Interest dated
November 15, 1996 between Haptel, Inc., a Delaware
corporation ("Owner"), as seller, and Seller, as buyer (the
"Agreement"), pursuant to which Seller has the right to
purchase Owner's co-tenancy interest in the Property, and
(ii) all of Seller's right, title and interest (the "HPP
Purchase Rights") under the HPP Agreement (defined in
paragraph 5(b) below) (collectively, the "Purchase Rights").
Unless defined herein, all capitalized terms used herein
shall have the meanings given to them in the Agreement or in
the HPP Agreement.
Buyer offers to purchase the Purchase Rights on
the following terms and conditions:
1. Purchase Price of Purchase Rights.
$650,000.00. Such purchase price shall be paid in two (2)
installments as follows: $150,000 of the purchase price
shall be paid upon the Closing (as defined in the Agreement
and the HPP Agreement) and $500,000 of the purchase price
shall be paid on January 2, 1997.
2. Deposits Under Agreement.
(a) Concurrently with the mutual execution
and delivery of this letter agreement, and in addition to
Buyer's obligation under Paragraph 1 above, Buyer agrees to
deposit an amount equal to $86,250.00 (the "Initial
Deposit") in escrow with the Title Company, which amount
shall constitute the "Initial Deposit" under the Agreement
and the HPP Agreement. Such deposit shall be fully
refundable to Buyer in the event the conditions set forth
under Paragraph 4 below are not satisfied or in the event
Seller fails to perform its obligations under this letter
agreement. In this regard, Seller agrees (i) concurrently
with the mutual execution and delivery of this letter
agreement, to direct the Title Company in writing that any
return of the Initial Deposit shall be delivered to Buyer,
and not to Seller, and (ii) upon receipt by Seller of
written notice from Buyer that any of the conditions set
forth in Paragraph 4 below have not been satisfied and that
Buyer terminates this letter agreement, to immediately
instruct the Title Company to refund the Initial Deposit to
Buyer.
(b) In the event the condition set forth in
Paragraph 4(a) below is satisfied, Buyer agrees to deposit
an amount equal to Three Hundred Forty-Five Thousand Dollars
($345,000) (the "Additional Deposit") in escrow with the
Title Company, which amount shall constitute the "Additional
Deposit" under the Agreement and the HPP Agreement. The
Initial Deposit and the Additional Deposit are collectively
referred to as the "Deposit". Such Deposit shall be fully
refundable to Buyer in the event the conditions set forth in
Paragraphs 4(b) or 4(c) below are not satisfied or in the
event Seller fails to perform its obligations under this
Agreement. In this regard, Seller agrees (i) concurrently
with the delivery of the Additional Deposit, to direct the
Title Company in writing that any return of the Additional
Deposit shall be delivered to Buyer, and not to Seller, and
(ii) upon receipt by Seller of written notice from Buyer
that any of the conditions set forth in Paragraph 4(b) or
4(c) below have not been satisfied and that Buyer terminates
this letter agreement, to immediately instruct the Title
Company to refund the Deposit to Buyer. Provided that
Seller complies with its obligations under the immediately
preceding sentence, Seller shall have no additional
liability to Buyer as a result of the Title Company's
failure to comply with such directions.
3. Transfer. Title to the Purchase Rights shall
be assigned to Buyer on the Transfer Date (defined below)
free and clear of all liens, encumbrances and prior
assignments. Such transfer shall be effectuated by the
mutual execution and delivery by Buyer and Seller of
Assignment Agreements, in the respective forms attached
hereto as Exhibits "A-1" and "A-2". The "Transfer Date"
shall be the Approval Date, provided that the conditions set
forth in Paragraph 4(a) below have been satisfied or waived
by Buyer, and provided that in no event shall the Transfer
Date occur prior to the Approval Date.
4. Buyer Conditions. Buyer's obligations to
purchase the Purchase Rights shall be conditioned upon the
following:
(a) Buyer's approval (in its sole and
absolute discretion) in writing on or before the date which
is one (1) day before the Approval Date of the condition of
and all other matters relating to the Property, as well as
all of the other due diligence items set forth in
Paragraph 3 of each of the Agreement and the HPP Agreement,
including without limitation, the Title Report, Survey,
Leases, contracts listed on Exhibit 3.3 of each of the
Agreement and the HPP Agreement and the Due Diligence
Documents. In this regard, (i) Seller agrees to cooperate
with Buyer and take all actions (A) reasonably requested by
Buyer to arrange for Buyer's entry onto the Property and any
inspections and/or testing by Buyer in connection therewith,
and (B) otherwise requested by Buyer in connection with
Buyer's efforts to perform its due diligence review
hereunder, and (ii) Seller assigns to Buyer all of Seller's
access, inspection and other rights under the Agreement and
the HPP Agreement with respect to the performance of
Seller's due diligence review under the Agreement and the
HPP Agreement.
(b) (i) the satisfaction of all conditions
to Seller's (or any assignee's) obligation, as buyer, to
consummate the Closing under the Agreement, (ii) no breach
or default by the Owner under the Agreement, and (iii) the
concurrent Closing under the Agreement.
(c) (i) the satisfaction of all conditions
to Seller's (or any assignee's) obligation, as buyer, to
consummate the Closing under the HPP Agreement concurrently
with the Closing under the Agreement, (ii) no breach or
default by HPP under the HPP Agreement, and (iii) the
concurrent Closing under the HPP Agreement.
If Buyer shall timely disapprove any of the due diligence
items set forth above, or if any of the conditions set forth
in Paragraphs 4(b) or 4(c) above are not satisfied, then
this letter agreement shall terminate, the Deposit shall be
immediately returned to Buyer, and neither party shall have
any further rights or remedies against the other by reason
hereof. In the event either of the conditions set forth in
Paragraphs 4(b) or 4(c) is not satisfied or waived by Buyer,
and the Transfer Date has occurred, upon request from
Seller, Buyer shall re-assign the Purchase Rights back to
Seller.
5. Actions Pending Transfer Date.
(a) Provided that Buyer is not in material
default under this letter agreement, (i) if any consents,
approvals or elections of Seller are required or permitted
under the Agreement or HPP Agreement, then Seller shall not
give or make the same without first obtaining the written
consent of Buyer, (ii) Seller shall not modify or amend the
Agreement or HPP Agreement or waive any right of the buyer
under the Agreement or HPP Agreement without the prior
written consent of Buyer, (iii) Seller further agrees not to
amend or modify the Union Property Commission Agreement
(defined below) without the prior written consent of Buyer,
(iv) Seller shall deliver to Buyer promptly upon receipt
copies of any notices or other communications received from
Owner relating to the Agreement or the Property or from HPP
relating to the HPP Agreement or Property, and (v) Seller
shall not deliver any notice or other communication to Owner
or HPP or take any other action under the Agreement or HPP
Agreement without first having the same approved by Buyer.
(b) Seller acknowledges that that certain
Contribution Agreement (the "HPP Agreement") by and between
the Seller and Hapsmith-Praxis Partners ("HPP") was entered
into as of November 27, 1996, and subsequently modified by
the parties pursuant to a memorandum from Xxxxxxx Xxxxx to
Xxx Xxxxxxx dated November 29, 1996, and a letter from Xxx
Xxxxxxx to Xxxxxxx Xxxxx dated December 5, 1996.
6. Warranties and Representations. Seller makes
the following warranties and representations to Buyer, which
shall be true and correct as of the date of Seller's
acceptance hereof, as of the Transfer Date and as of the
Closing under the Agreement and the HPP Agreement:
(a) To the best of Seller's knowledge, all
documents delivered to Buyer by and on behalf of Seller are
or will be true and correct copies of the originals and
truly represent the factual matters stated therein.
(b) Seller has the legal power, right and
authority to enter into this letter agreement and the
instruments referenced herein, and to consummate the
transactions contemplated hereby.
(c) All requisite corporate action has been
taken by Seller in connection with entering into this letter
agreement, the instruments referenced herein, and the
consummation of the transactions contemplated hereby. No
consent of any partner, shareholder, creditor, investor of
Seller, judicial or administrative body, or governmental
authority having jurisdiction over Seller or other party is
required.
(d) The individuals executing this letter
agreement and the instruments referenced herein on behalf of
Seller have the legal power, right, and actual authority to
bind Seller to the terms and conditions hereof and thereof.
(e) This letter agreement and all documents
required hereby to be executed by Seller are and shall be
valid, legally binding obligations of and enforceable
against Seller in accordance with their terms, except as may
be limited by laws of bankruptcy and insolvency.
(f) Except for the required consents of the
Owner and HPP under Section 11.4 of the Agreement and
Section 11.4 of the HPP Agreement, respectively, neither the
execution and delivery of this letter agreement and
documents referenced herein, nor the incurrence of the
obligations set forth herein, nor the consummation of the
transactions herein contemplated, nor compliance with the
terms of this letter agreement and the documents referenced
herein conflict with or result in the material breach of any
terms, conditions or provisions of, or constitute a default
under, any bond, note, or other evidence of indebtedness or
any contract, indenture, mortgage, deed of trust, loan,
lease or other agreements or instruments to which Seller is
a party.
(g) A true and correct copy of the HPP
Agreement and the Agreement are respectively attached hereto
as Exhibits "B" and "C". There are no other agreements with
respect to the transfer of Owner's interest in the Property
to Seller other than the Agreement. There are no other
agreements with respect to the transfer of HPP's interest in
the Property to Seller other than the HPP Agreement.
Neither the HPP Agreement nor the Agreement has been
modified or amended.
(h) Seller has not previously assigned,
agreed to assign or hypothecated all or any part of the
Purchase Rights and is the holder thereof free and clear of
any liens, encumbrances or other rights of third parties.
(i) A true and correct copy of the brokerage
agreement with Union Property Capital which is referred to
in Paragraph 5.3 of the Agreement and Paragraph 5.3 of the
HPP Agreement (the "Union Property Commission Agreement") is
attached hereto as Exhibit "D". Except as expressly set
forth in this letter agreement, there are no other
agreements pursuant to which Buyer is obligated to pay a
brokerage commission or finder's fee to a third party in
connection with the purchase of the Property, other than the
Union Property Commission Agreement. The Union Property
Commission Agreement has not been modified or amended.
(j) To the best of Seller's knowledge,
Seller is not aware of any material information relating to
the Property which has not been disclosed to Buyer.
7. Brokers. Each party represents to the other
that it has not hired or dealt with any broker or other
middleman entitled to any commission or other compensation
based upon the transactions contemplated hereby, other than
Hawthorne Realty. In the event of and upon the closing of
the sale of the Owner's interest in the Property to Buyer,
and the closing of the contribution of HPP's interest in the
Property to Buyer, Buyer and Seller shall equally split a
brokerage commission to Hawthorne Realty in connection with
the transactions contemplated hereby in an amount equal to
$100,000 ($50,000 to be paid by Seller and $50,000 to be
paid by Buyer). Such commission shall be in addition to the
payment of any commission due and owing by Buyer under the
Agreement or under the HPP Agreement.
8. Assignment. Except as provided in the
preceding sentence, neither party shall assign its rights or
obligations under this letter agreement without the prior
written consent of the other party, which shall not be
unreasonably withheld.
9. Confidentiality. Buyer and Seller agree to
keep the terms of this transaction strictly confidential and
not disclose same to any third parties, without the consent
of the other party, except that Buyer may discuss and
disclose the terms of this transaction to Buyer's advisors,
employees, consultants, attorneys, partners and lenders.
10. Indemnity. Seller hereby agrees to
indemnify, defend and hold harmless Buyer from and against
(i) any and all claims, damages, costs, expenses and
liabilities ("Claims") arising from or related to any
actions taken by Seller in connection with the Agreement or
the HPP Agreement which Buyer was unaware of or which Buyer
did not approve, and (ii) any actual out-of-pocket costs
incurred by Buyer due to or in connection with any Claims
arising from or related to Owner's or HPP's failure to honor
and accept the transfer of the Purchase Rights to Buyer
without having consented thereto.
11. Miscellaneous.
(a) In the event of any litigation between
the parties respecting this letter agreement, the prevailing
party shall be entitled to reasonable attorneys fees, court
costs and litigation expenses, as determined by the Court.
(b) Notices required or permitted hereunder
shall be personally delivered or sent by air courier or
first class mail, return receipt requested, addressed as
follows:
(1) If to Buyer:
c/o Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxx
with copies to:
Jeffer, Mangels, Xxxxxx & Marmaro LLP
2121 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
(2) If to Seller:
Fidelity Partners, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx
with a copy to:
Freed and Heinemann
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Xxxxx Xxxxxxxxx, Esq.
(c) This letter agreement shall be binding
upon and inure to the benefit of the parties and their
respective representatives, successors and assigns.
(d) This letter agreement represents the
entire understanding of the parties respecting the subject
matter hereof, supersedes all prior understandings, whether
oral or written, and may not be amended except in writing
signed by the parties hereof. This letter agreement shall
be construed in accordance with the laws of the State of
California.
(e) Each party hereto shall be authorized to
rely upon the signatures of all of the parties hereto on
this letter agreement which are delivered by facsimile as
constituting duly authorized, irrevocable, actual, current
delivery of this letter agreement with original ink
signatures of each person and entity; provided, however,
that each party hereto that delivers such facsimile shall
deliver an executed original of the same to each party so
receiving the previous facsimile signatures within five (5)
days after the delivery of such facsimile signatures.
(f) Each of the parties shall from time to
time at the request of the other party execute and deliver
such documents and take such other actions as may be
required to more effectively carry out the terms of this
letter agreement. The warranties and representations of
Seller shall survive the Closing.
12. Notwithstanding anything to the contrary
contained herein, in the event the transactions contemplated
under the Agreement and the HPP Agreement are not
consummated for reasons other than due to (i) a default by
Owner or HPP under the Agreement or the HPP Agreement,
respectively, or (ii) the occurrence of an event (or the
discovery by Buyer of a circumstance pursuant to its due
diligence review of the Property) which materially adversely
effects the value or condition of the Property, as
determined by Buyer in its reasonable discretion, Buyer
shall pay to Seller an amount equal to $75,000.
If the foregoing is consistent with your
understanding, please acknowledge your acceptance and
agreement by signing where shown below and returning to the
undersigned the enclosed copy of this letter on or before
5 p.m. on December 6, 1996, at which time this offer will
otherwise expire.
Very truly yours,
Arden Realty Limited Partnership,
a Maryland limited partnership
By: Arden Realty, Inc., a
Maryland corporation,
its sole general partner
By /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: President and COO
ACCEPTED AND AGREED:
Fidelity Partners, Inc.,
a California corporation
By /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
Date: /s/ 12/5/96