EXHIBIT 10.19
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CONTRIBUTION AGREEMENT
by and between
XXXXXXX XXXX,
an individual
and
ARDEN REALTY GROUP LIMITED PARTNERSHIP
a Maryland limited partnership
Dated as of June 17, 1996
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TABLE OF CONTENTS
Page
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. CONTRIBUTION OF PARTNERSHIP INTEREST AND EXCHANGE FOR OP UNITS. . . . . 2
1.1 Contribution Transaction . . . . . . . . . . . . . . . . . . . . . 2
1.2 Minimum Consideration and Exchange of OP Units . . . . . . . . . . 2
1.3 Additional Consideration . . . . . . . . . . . . . . . . . . . . . 2
1.4 Adjusted Consideration . . . . . . . . . . . . . . . . . . . . . . 3
1.5 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6 Contribution of Certain Rights . . . . . . . . . . . . . . . . . . 3
1.7 Prorations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8 Treatment as Contribution. . . . . . . . . . . . . . . . . . . . . 4
2. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Time and Place . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Closing Deliveries . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Closing Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. REPRESENTATIONS AND WARRANTIES AND INDEMNITIES. . . . . . . . . . . . . 6
3.1 Representations and Warranties of the Operating Partnership. . . . 6
3.2 Representations and Warranties of Contributor. . . . . . . . . . . 7
3.3 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. COVENANTS OF CONTRIBUTOR. . . . . . . . . . . . . . . . . . . . . . . . 7
5. RELEASES AND WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 General Release of Operating Partnership . . . . . . . . . . . . . 8
5.2 General Release of Contributor . . . . . . . . . . . . . . . . . . 9
5.3 Waiver of Section 1542 Protections . . . . . . . . . . . . . . . . 9
5.4 Waiver of Rights Under Partnership Agreement . . . . . . . . . . . 9
6. POWER OF ATTORNEY
6.1 Grant of Power of Attorney . . . . . . . . . . . . . . . . . . . . 9
6.2 Limitation on Liability. . . . . . . . . . . . . . . . . . . . . . 10
7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.1 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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EXHIBIT LIST
SECTION FIRST
EXHIBITS REFERENCED
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A Constituent Interests of Contributor's Partnership Interest . . . Recital D
B Contribution and Assumption Agreement . . . . . . . . . . . . . . . . 1.1
C Form of Quitclaim . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
D Representations and Warranties of Contributor . . . . . . . . . . . . . 3.2
E Assignment and Assumption Agreement . . . . . . . . . . . . . . . . . . 1.1
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CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (hereinafter referred to as the "CONTRIBUTION
AGREEMENT") is made and entered into as of June 17, 1996 by and between Arden
Realty Group Limited Partnership, a Maryland limited partnership (the "OPERATING
PARTNERSHIP"), and Xxxxxxx Xxxx, an individual (the "CONTRIBUTOR").
RECITALS
A. The Operating Partnership desires to consolidate the ownership of a
portfolio of office properties (the "PARTICIPATING PROPERTIES") located in
Southern California through a series of transactions (the "FORMATION
TRANSACTIONS") whereby the Operating Partnership will acquire direct interests
in certain of the Participating Properties (the "PROPERTY INTERESTS") and all of
the interests in certain limited partnerships, certain limited liability
companies and certain other entities (collectively the "PARTICIPATING
PARTNERSHIPS AND LLCS") which currently own directly or indirectly the
Participating Properties (the "CONSOLIDATION").
B. The Formation Transactions relate to the proposed initial public
offering (the "PUBLIC OFFERING") of the common stock of Arden Realty Group,
Inc., a Maryland corporation (the "COMPANY"), which will operate as a self-
administered and self-managed real estate investment trust ("REIT") and will be
the sole general partner of the Operating Partnership.
C. The owners of the Property Interests and the partners and members of
the Participating Partnerships and LLCs will either transfer their Property
Interests and interests in the Participating Partnerships and LLCs to the
Company in exchange for cash (the "CASH PARTICIPANTS") or contribute such
interests directly to the Operating Partnership in exchange for an interest in
the Operating Partnership (the "OP PARTICIPANTS").
D. The Contributor owns interests in certain of the Participating
Partnerships and LLCs as set forth on EXHIBIT "A" (the "PARTNERSHIPS") which
Partnerships own directly or indirectly interests in certain of the
Participating Properties also as set forth on Exhibit A (the "PROPERTY" or the
"PROPERTIES"). As used herein, "PARTNERSHIP AGREEMENT" means the partnership
agreement or membership agreement, as applicable, under which each such
Partnership was formed.
E. The Contributor desires to, and the Operating Partnership desires the
Contributor to, contribute to the Operating Partnership, all of its right, title
and interest, as a partner (or member) of the Partnerships, including, without
limitation, all of its voting rights and interests in the capital, profits and
losses of the Partnerships or any property distributable therefrom, constituting
all of its interests in the Partnerships (such right, title and interest are
hereinafter collectively referred to as the "PARTNERSHIP INTEREST") and all of
its right, title and interest in a certain property management agreement as set
forth in ARTICLE 1.1 hereof, in
exchange for partnership units in the Operating Partnership (the "OP UNITS"),
on the terms and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing premises, and
the mutual undertakings set forth below, the parties hereto agree as follows:
TERMS OF AGREEMENT
1. CONTRIBUTION OF PARTNERSHIP INTEREST AND EXCHANGE FOR OP UNITS
1.1 CONTRIBUTION TRANSACTION
At the Closing (as defined in ARTICLE 2.2 herein) and subject to the
terms and conditions contained in this Contribution Agreement, the Contributor
shall transfer to the Operating Partnership, absolutely and unconditionally,
all of its Partnership Interest (as such term is defined in Recital B herein)
and all of its right, title and interest in that certain Property Management
Agreement, dated as of December 14, 1994, by and among 5000 Spring Associates,
LLC, a Nevada limited liability company, Xxxxxx Xxxxxxx as Trustee of the
Xxxxxx Xxxxxxx and Xxxxxxxxx Xxxxxxx 1982 Trust, and Contributor, as Owners
and Arden Realty Group, Inc., a California corporation, as Manager (the
"PROPERTY MANAGEMENT AGREEMENT"). The contribution of the Contributor's
Partnership Interest shall be evidenced by a "CONTRIBUTION AND ASSUMPTION
AGREEMENT" for each of the Partnerships in substantially the form of EXHIBIT
"B" attached hereto. The Contributor shall execute and have duly acknowledged
an individual quitclaim deed in the form of EXHIBIT "C" quitclaiming to the
Operating Partnership any direct or indirect ownership interest in and to the
Properties. Furthermore, the contribution of the Property Management Agreement
shall be evidenced by an "ASSIGNMENT AND ASSUMPTION AGREEMENT" in
substantially the form of EXHIBIT "E" attached hereto. The parties shall take
such additional actions and execute such additional documentation as may be
required by the Partnership Agreement and the Agreement of Limited Partnership
of the Operating Partnership (the "OP AGREEMENT") in order to effect the
transactions contemplated hereby.
1.2 MINIMUM CONSIDERATION AND EXCHANGE OF OP UNITS.
Subject to ARTICLES 1.3 AND 1.4 below, the Operating Partnership
shall, in exchange for the Partnership Interest and Contributor's interest in
the Property Management Agreement, transfer to the Contributor the number of
OP Units having a value, based on one OP Unit being equal in value to the
Public Offering price for one share of the Company's common stock, equal to
the value indicated on Exhibit A as Contributor's "Total Minimum
Consideration." The transfer of the OP Units to the Contributor shall be
evidenced by either an amendment (the "AMENDMENT") to the OP Agreement or by
certificates relating to such units (the "CERTIFICATES") in either case, as
shall be acceptable to the Contributor. The parties shall take such
additional actions and execute such additional documentation as may be
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required by the Partnership Agreement and the OP Agreement in order to effect
the transactions contemplated hereby.
1.3 ADDITIONAL CONSIDERATION
Subject to ARTICLE 1.4 below, in the event that, at Closing the
aggregate value (determined as provided in ARTICLE 1.2) of the OP Units
available to all OP Participants exceeds the sum of the Total Minimum
Consideration values (after all adjustments set forth in ARTICLE 1.4) of all
OP Participants (the "ADDITIONAL CONSIDERATION"), then the Additional
Consideration or a portion thereof, if any, shall be allocated among the OP
Participants (including the Contributor) based upon the relative values of the
Contributor's Partnership Interest and the interests contributed by each of
the other OP Participants, in each case as determined by Xxxxxxx X. Xxxxx, in
his sole discretion.
1.4 ADJUSTED CONSIDERATION
The Operating Partnership reserves the right not to acquire any
particular interest that constitutes part of the Partnership Interest, if in
good faith the Operating Partnership determines that the ownership of such
interest or the underlying Property would be inappropriate for the Operating
Partnership for any reason whatsoever. Contributor hereby agrees that, in
such event, the Contributor's Total Minimum Consideration may be reduced by an
amount determined by Xxxxxxx X. Xxxxx, in his sole discretion, to reflect the
reduction in total value of the Partnership Interest ultimately contributed by
the Contributor.
1.5 AUTHORIZATION
Contributor hereby authorizes Xxxxxxx X. Xxxxx to make any and all
determinations to be made by him pursuant to ARTICLES 1.3 AND 1.4 hereof, and
any and all such determinations shall be final and binding on all parties.
1.6 CONTRIBUTION OF CERTAIN RIGHTS
Effective upon the Closing, the Contributor hereby contributes to the
Operating Partnership all of its rights and interests, if any, including
rights to indemnification in favor of the Contributor, if any, under the
agreements pursuant to which the Contributor or its affiliates initially
acquired the Partnership Interest transferred pursuant to this Contribution
Agreement.
1.7 PRORATIONS
At the Closing, or as promptly as practicable following the Closing,
to the extent such matters are not the right or responsibility of all tenants
of a given Property, all revenue and all charges that are customarily prorated
in transactions of this nature, including accrued rent currently due and
payable, overpaid taxes or fees, real and personal property
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taxes, common area maintenance charges and other similar periodic charges
payable or receivable with respect to such Property shall be ratably prorated
between the partners of the Partnership which holds such Property prior to the
Closing and the Operating Partnership on and after the Closing, effective as
of the Closing. After providing for such prorations, (i) if the Partnership
has a resultant cash surplus, the value of the Contributor's Partnership
Interest shall be increased in proportion to Contributor's ratable share of
such cash surplus and additional OP Units (based on the initial Public
Offering price of the Company's common stock) shall be issued to the
Contributor as a valuation adjustment to the Contributor's Total Minimum
Consideration, and (ii) if the Partnership has a resultant cash deficit, the
value of the Contributor's Partnership Interest shall be reduced in proportion
to Contributor's ratable share of such cash deficit, and fewer OP Units shall
be issued to the Contributor as a valuation adjustment to the Contributor's
Total Minimum Consideration, unless such deficit is cured prior to Closing.
1.8 TREATMENT AS CONTRIBUTION
The transfer, assignment and exchange of interests effectuated with
respect to the Operating Partnership, pursuant to this Contribution Agreement
shall constitute, a "Capital Contribution" pursuant to Article 4 of the OP
Agreement and is intended to be governed by Section 721(a) of the Internal
Revenue Code of 1986, as amended (the "CODE").
2. CLOSING
2.1 CONDITIONS PRECEDENT
The effectiveness of the Company's registration statement filed with
the Securities and Exchange Commission on Form S-11 (the "REGISTRATION
STATEMENT") is a condition precedent to the obligations of all parties to this
Contribution Agreement to effect the transactions contemplated by this
Contribution Agreement on the Closing Date (as defined below).
The obligations of the Operating Partnership to effect the
transactions contemplated hereby shall be subject to the following additional
conditions:
(a) The representations and warranties of the Contributor contained
in this Contribution Agreement shall have been true and correct in all
material respects on the date such representations and warranties were made,
and shall be true and correct in all material respects on the Closing Date as
if made at and as of such date;
(b) Each of the obligations of the Contributor to be performed by it
shall have been duly performed by it on or before the Closing Date;
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(c) Concurrently with the Closing, the Contributor shall have
executed and delivered to the Operating Partnership the documents required to
be delivered pursuant to SECTION 2.3 hereof;
(d) The Contributor shall have obtained all necessary consents or
approvals of governmental authorities or third parties to the consummation of
the transactions contemplated hereby;
(e) The Contributor shall not have breached any of its covenants
contained herein in any material respect;
(f) No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been enacted,
entered, promulgated or enforced by any court of competent jurisdiction or
governmental or regulatory authority or instrumentality that prohibits the
consummation of the transactions contemplated hereby, and no litigation or
governmental proceeding seeking such an order shall be pending or threatened;
(g) There shall not have occurred between the date hereof and the
Closing Date any material adverse change in the Partnerships' businesses;
(h) All existing management agreements with respect to the
Properties shall have been contributed to the Operating Partnership prior to
or simultaneously with the Closing; and
(i) All management functions with respect to the Properties
presently conducted by Arden Realty Group, Inc., a Maryland corporation, shall
be assumed by the Operating Partnership.
The foregoing conditions may be waived by the Operating Partnership
in its sole and absolute discretion.
2.2 TIME AND PLACE
The date, time and place of the transactions contemplated hereunder
shall be the day the Operating Partnership receives the proceeds from the
Public Offering from the underwriter(s), at 10:00 a.m. in the office of Xxxxxx
& Xxxxxxx, 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx (the
"CLOSING" or "CLOSING DATE"). The transfers described in ARTICLES 1.1 AND 1.2
of this Contribution Agreement, and all closing deliveries, and the
consummation of the Public Offering, shall be deemed concurrent for all
purposes.
2.3 CLOSING DELIVERIES
At the Closing, the parties shall make, execute, acknowledge and
deliver, or cause to be made, executed, acknowledged and delivered through the
Attorney-in-Fact (see
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ARTICLE 6.1 below), the legal documents and other items (collectively the
"CLOSING DOCUMENTS") necessary to carry out the intention of this Contribution
Agreement, which Closing Documents and other items shall include, without
limitation, the following:
(i) A Contribution and Assumption Agreement for each of the
Partnerships;
(ii) An individual quitclaim deed for each Property fully executed
and duly acknowledged from each of the individual constituent partners
and/or members of the Contributor, as required by the Operating
Partnership;
(iii) An Assignment and Assumption Agreement duly executed and
delivered by the Contributor and the Operating Partnership, whereby the
Contributor assigns its rights under the Property Management Agreement to
the Operating Partnership;
(iv) The Amendment or the Certificates evidencing the transfer of OP
Units to the Contributor;
(v) An American Land Title Assurances ("ALTA") policy of title
insurance with appropriate endorsements and levels of reinsurance for the
Property issued as of the Closing Date or endorsements or other assurances
that the existing policy or policies of title insurance are sufficient for
purposes of this Contribution Agreement, which the Contributor shall cause
the tite company to issue to the Operating Partnership in a form acceptable
to the Operating Partnership (the "TITLE POLICIES") including satisfaction
by the Contributor of any and all title company requirements applicable to
it;
(vi) The Partnerships' books and records and securities or other
evidences of ownership held by the Contributor; and
(vii) An affidavit from the Contributor, stating under penalty of
perjury, the Contributor's United States Taxpayer Identification Number
and that the Contributor is not a foreign person pursuant to section
1445(b)(2) of the Code and a comparable affidavit satisfying California
and any other withholding requirements.
2.4 CLOSING COSTS
The Operating Partnership shall pay any documentary transfer taxes,
escrow charges, title charges and recording taxes or fees incurred in
connection with the transactions contemplated hereby.
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3. REPRESENTATIONS AND WARRANTIES AND INDEMNITIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE OPERATING PARTNERSHIP
The Operating Partnership hereby represents and warrants to and
covenants with the Contributor that:
(a) ORGANIZATION; AUTHORITY. The Operating Partnership has been
duly formed and is validly existing with requisite power to enter this
Contribution Agreement and all agreements contemplated hereby. The
persons and entities executing this Contribution Agreement and all
agreements contemplated hereby on behalf of the Operating Partnership have
the power and authority to enter into this Contribution Agreement and such
other contemplated agreements; and
(b) DUE AUTHORIZATION. The execution, delivery and performance
by the Operating Partnership of its obligations under this Contribution
Agreement and all agreements contemplated hereby will not contravene any
provision of applicable law, the OP Agreement, charter, declaration of
trust or other constituent document of the Operating Partnership, or any
agreement or other instrument binding upon the Operating Partnership or
any judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Operating Partnership, and no consent,
approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by the
Operating Partnership of its obligations under this Contribution
Agreement and all other agreements contemplated hereby.
3.2 REPRESENTATIONS AND WARRANTIES OF CONTRIBUTOR
The Contributor represents and warrants to and covenants with the
Operating Partnership as provided in EXHIBIT "D" attached hereto, and
acknowledges and agrees to be bound by the indemnification provisions
contained therein.
3.3 INDEMNIFICATION
The Operating Partnership shall indemnify and hold harmless the
Contributor (the "INDEMNIFIED CONTRIBUTOR PARTY") from and against any and all
claims, losses, damages, liabilities and expenses, including without
limitation, amounts paid in settlement, reasonable attorneys' fees, costs of
investigation and remediation, costs of investigative judicial or
administrative proceedings or appeals therefrom and costs of attachment or
similar bonds (collectively, "LOSSES") asserted against, imposed upon or
incurred by the Indemnified Contributor Party in connection with: (i) any
breach of a representation or warranty of the Operating Partnership contained
in this Contribution Agreement; (ii) any liabilities or obligations incurred,
arising from or out of, in connection with or as a result of
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any claims made or actions brought by or against the Contributor, the
Partnerships, the Properties or an Indemnified Contributor Party, that arise
from or out of, in connection with or as a result of any Contamination (as
defined in Exhibit D hereto) of the Properties regardless of when or how
occurring, except to the extent, and only to the extent, such Losses arise
from or constitute a breach of a representation and warranty of Contributor
under Exhibit D; and (iii) all fees, costs and expenses of the Operating
Partnership in connection with the transactions contemplated by the
Contribution Agreement, including without limitation any and all costs
associated with the transfers contemplated herein.
4. COVENANTS OF CONTRIBUTOR
(a) From the date hereof through the Closing, the Contributor shall
not:
(i) Sell or transfer all or any portion of the Partnership
Interest; or
(ii) Mortgage, pledge or encumber (or permit to become
encumbered) all or any portion of the Partnership Interest.
(b) From the date hereof through the Closing, the Contributor shall
permit each of the Partnerships to conduct its business in the ordinary course,
consistent with past practice, and shall not permit any of the Partnerships to:
(i) Enter into any material transaction not in the ordinary
course of business;
(ii) Sell or transfer any assets of the Partnerships;
(iii) Mortgage, pledge or encumber (or permit to become
encumbered) any assets of the Partnerships, except (x) liens for taxes
not due, (y) purchase money security interests and (z) mechanics' liens
being disputed by the Partnerships in good faith and by appropriate
proceedings;
(iv) Amend, modify or terminate any material agreements or other
instruments to which the Partnerships are a party;
(v) Materially alter the manner of keeping the Partnerships'
books, accounts or records or the accounting practices therein reflected;
or
(vi) Make any distribution to its partners.
(c) The Contributor shall use its good faith diligent efforts to
obtain any approvals, waivers or other consents of third parties required to
effect the transactions contemplated by this Contribution Agreement.
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5. RELEASES AND WAIVERS
Each of the releases and waivers enumerated in this ARTICLE 5 shall
become effective only upon the Closing of the contribution and exchange of the
Partnership Interest pursuant to ARTICLES 1 AND 2 herein.
5.1 GENERAL RELEASE OF OPERATING PARTNERSHIP
As of the Closing, the Contributor irrevocably waives, releases and
forever discharges the Operating Partnership and the Operating Partnership's
affiliates, partners (including Xxxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx),
agents, attorneys, successors and assigns of and from, any and all charges,
complaints, claims, liabilities, damages, actions, causes of action, losses
and costs of any nature whatsoever (collectively, "CONTRIBUTOR CLAIMS"), known
or unknown, suspected or unsuspected, arising out of or relating to any of the
Partnership Agreements, this Contribution Agreement or any other matter which
exists at the Closing, except for Contributor Claims arising from the breach
of any representation, warranty, covenant or obligation under this
Contribution Agreement.
5.2 GENERAL RELEASE OF CONTRIBUTOR
As of the Closing, the Operating Partnership irrevocably waives,
releases and forever discharges the Contributor and Contributor's agents,
attorneys, successors and assigns of and from, any and all charges,
complaints, claims, liabilities, damages, actions, causes of action, losses
and costs of any nature whatsoever (collectively, "OPERATING PARTNERSHIP
CLAIMS"), known or unknown, suspected or unsuspected, arising out of or
relating to any of the Partnership Agreements, this Contribution Agreement or
any other matter which exists at the Closing, except for Operating Partnership
Claims arising from the breach of any representation, warranty, covenant or
obligation under this Contribution Agreement.
5.3 WAIVER OF SECTION 1542 PROTECTIONS
As of the Closing, the Contributor and the Operating Partnership each
expressly waives and relinquishes all rights and benefits afforded by Section
1542 of the California Civil Code and do so understanding and acknowledging
the significance and consequence of such specific waiver of Section 1542 which
provides:
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.
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5.4 WAIVER OF RIGHTS UNDER PARTNERSHIP AGREEMENT
As of the Closing, the Contributor waives and relinquishes all rights
and benefits otherwise afforded to Contributor under the Partnership
Agreements including, without limitation, any right to consent to or approve
of the sale or contribution by the other partners (or members) of the
Partnerships of their partnership interests to the Company or the Operating
Partnership.
6. POWER OF ATTORNEY
6.1 GRANT OF POWER OF ATTORNEY
Contributor does hereby irrevocably appoint the Operating Partnership
(or its designee) and each of them individually and any successor thereof from
time to time (such Operating Partnership or designee or any such successor of
any of them acting in his, her or its capacity as attorney-in-fact pursuant
hereto, the "ATTORNEY-IN FACT") as the true and lawful attorney-in-fact and
agent of Contributor, to act in the name, place and stead of Contributor to
make, execute, acknowledge and deliver all such other contracts, orders,
receipts, notices, requests, instructions, certificates, consents, letters and
other writings (including without limitation the execution of any Closing
Documents or other documents relating to the acquisition by the Operating
Partnership of Contributor's Partnership Interest), to provide information to
the Securities and Exchange Commission and others about the transactions
contemplated hereby and, in general, to do all things and to take all actions
which the Attorney-in-Fact in its sole discretion may consider necessary or
proper in connection with or to carry out the transactions contemplated by
this Contribution Agreement, as fully as could Contributor if personally
present and acting. Further, Contributor hereby grants to Attorney-in-Fact a
proxy (the "PROXY") to vote Contributor's Partnership Interest on any matter
related to the Formation Transactions presented to the partners of any of the
Partnerships for a vote, including, but not limited to, the transfer of
interests in the Partnership by the other partners.
Each of the Power of Attorney and Proxy and all authority granted
hereby shall be coupled with an interest and therefore shall be irrevocable
and shall not be terminated by any act of Contributor, by operation of law or
by the occurrence of any other event or events, and if any other such act or
events shall occur before the completion of the transactions contemplated by
this Contribution Agreement, the Attorney-in-Fact shall nevertheless be
authorized and directed to complete all such transactions as if such other act
or events had not occurred and regardless of notice thereof. Contributor
agrees that, at the request of Operating Partnership it will promptly execute
a separate power of attorney and proxy on the same terms set forth in this
ARTICLE 6, such execution to be witnessed and notarized. Contributor hereby
authorizes the reliance of third parties on each of the Power of Attorney and
Proxy.
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Contributor acknowledges that the Operating Partnership has, and any
designee or successor thereof acting as Attorney-in-Fact may have, an economic
interest in the transactions contemplated by this Contribution Agreement.
6.2 LIMITATION ON LIABILITY
It is understood that the Attorney-in-Fact assumes no responsibility
or liability to any person by virtue of the Power of Attorney or Proxy granted
by Contributor hereby. The Attorney-in-Fact makes no representations with
respect to and shall have no responsibility for the Formation Transactions or
the Public Offering, or the acquisition of the Partnership Interest by the
Operating Partnership and shall not be liable for any error or judgement or
for any act done or omitted or for any mistake of fact or law except for its
own gross negligence or bad faith. Contributor agrees to indemnify the
Attorney-in-Fact for and to hold the Attorney-in-Fact harmless against any
loss, claim, damage or liability incurred on its part arising out of or in
connection with it acting as the Attorney-in-Fact under the Power of Attorney
or Proxy created by Contributor hereby, as well as the cost and expense of
investigating and defending against any such loss, claim, damage or liability,
except to the extend such loss, claim, damage or liability is due to the gross
negligence or bad faith of the Attorney-in-Fact. Contributor agrees that the
Attorney-in-Fact may consult with counsel of its own choice (who may be
counsel for Operating Partnership or its successors or affiliates), and it
shall have full and complete authorization and protection for any action taken
or suffered by it hereunder in good faith and in accordance with the opinion
of such counsel. It is understood that the Attorney-in-Fact may, without
breaching any express or implied obligation to Contributor hereunder, release,
amend or modify any other power of attorney or proxy granted by any other
person under any related agreement.
7. MISCELLANEOUS
7.1 FURTHER ASSURANCES. The Contributor shall take such other
actions and execute such additional documents following the Closing as the
Operating Partnership may reasonably request in order to effect the
transactions contemplated hereby.
7.2 COUNTERPARTS. This Contribution Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
7.3 GOVERNING LAW. This Contribution Agreement shall be governed by
the internal laws of the State of California, without regard to the choice of
laws provisions thereof.
7.4 NOTICES. Any notice to be given hereunder by any party to the
other shall be given in writing by personal delivery or by registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
communicated as of the date of personal delivery (including delivery by
overnight courier). Mailed notices shall be
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addressed as set forth below, but any party may change the address set forth
below by written notice to other parties in accordance with this paragraph.
To the Contributor:
Xxxxxxx Xxxx
c/o Arden Realty Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, XX 00000
To the Operating Partnership:
Arden Realty Group Limited Partnership
c/o Arden Realty Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Contribution Agreement
as of the date first written above.
"OPERATING PARTNERSHIP"
ARDEN REALTY GROUP LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY GROUP, INC.,
a Maryland Corporation,
general partner
By:
------------------------------
"CONTRIBUTOR"
XXXXXXX XXXX,
an individual
By:
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12
EXHIBIT A
to
CONTRIBUTION AGREEMENT
CONSTITUENT INTERESTS OF CONTRIBUTOR'S PARTNERSHIP INTEREST
Partnerships Property Held by the Minimum
and Management Agreement Partnerships Consideration
----------------------------- ---------------------------- --------------
1950 Xxxxxxxx Associates, L.P. 0000 Xxxxxxxx Xxxxxxxxx $ 56,134
----------------------------- ---------------------------- -------------
5000 Spring Associates, LLC 0000 Xxxx Xxxxxx Xxxxxx $ 33,917
----------------------------- ---------------------------- -------------
Arden LAOP Two, LLC Anaheim City Center; $ 2,408
000 Xxxx Xxxxxxxx
----------------------------- ---------------------------- -------------
Arden LAOP Three, LLC 00000 Xxxxxxx Xxxxxxxxx; $ 12,621
Bristol Plaza
----------------------------- ---------------------------- -------------
LAOP IV, LLC 0000 Xxxxxxx Xxxxxx; $276,066
Westwood Terrace;
Calabasas Commerce Center;
Xxx Xxx Xxxxxxxx;
00 Xxxxx Xxxx;
Skyview Center;
0000 Xxxxxxx Xxxxx Xxxxx;
0000/00 Xxxxxxx Xxxxx Xxxxx
----------------------------- ---------------------------- -------------
LAOP V, LLC 0000 Xxxxx Xxxxxx; $ 85,936
000 Xxxxxxxxx Xxxxxx;
0000 Xxxxxxxx Xxxxxxxxx;
Imperial Bank Tower
Xxxxx Xxxxxxxx
Associates, LLC 000 Xxxx Xxxxxxxx $347,139
----------------------------- ---------------------------- -------------
Management Agreement for 5000 $ 34,376
East Spring Street
----------------------------- ---------------------------- -------------
Total Minimum
Consideration $848,597
-------------
-------------
A-1
EXHIBIT B
to
CONTRIBUTION AGREEMENT
CONTRIBUTION AND ASSUMPTION AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby assigns, transfers,
contributes and conveys to ARDEN REALTY GROUP LIMITED PARTNERSHIP, a Maryland
limited partnership (the "Operating Partnership"), its entire legal and
beneficial right, title and interest in and to 5000 Spring Associates, LLC, a
Nevada limited liability company (the "Partnership"), including, without
limitation, all right, title and interest, if any, of the undersigned in and
to the assets of the Partnership and the right to receive distributions of
money, profits and other assets from the Partnership, presently existing or
hereafter at any time arising or accruing (such right, title and interest are
hereinafter collectively referred to as the "Partnership Interest"), TO HAVE
AND TO HOLD the same unto the Operating Partnership, its successors and
assigns, forever.
Upon the execution and delivery hereof, the Operating Partnership
assumes all obligations in respect of the Partnership Interest.
The Partnership owns certain real property as described in Attachment
"1" attached hereto.
Executed: _____ __, 1996
By: /s/ Xxxxxxx Xxxx
----------------------
Xxxxxxx Xxxx
B-1
EXHIBIT C
to
CONTRIBUTION AGREEMENT
Order No.
Escrow No.
Loan No.
WHEN RECORDED MAIL TO:
--------------------------------------------------------------------------------
MAIL TAX STATEMENTS TO: SPACE ABOVE THIS LINE FOR RECORDER'S USE
DOCUMENTARY TRANSFER TAX $ ...........
..... Computed on the consideration or
value of property conveyed; OR
..... Computed on the consideration or
value less liens or encumbrances
remaining at time of sale.
---------------------------------------
Signature of Declarant of Agent
determining tax - Firm Name
--------------------------------------------------------------------------------
QUITCLAIM DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
do(es) hereby REMISE, RELEASE and FOREVER QUITCLAIM to
Arden Realty Group Limited Partnership, a Maryland limited partnership
the real property in the City of ____________, County of ____________, State of
California, described as
Dated ______________________ _____________________________
STATE OF CALIFORNIA } _____________________________
} _____________________________
COUNTY OF ________________ } _____________________________
On ______________ before me,
___________________________,
personally appeared ________
____________________________
personally known to me (or proved to
me on the basis of satisfactory evidence)
to be the person(s) whose names(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the
instrument the person(s) or the entity
upon behalf of which the person(s) acted,
executed the instrument.
WITNESS my hand and official seal.
Signature ________________________ (This area for official notarial seal)
C-1
EXHIBIT D
TO
CONTRIBUTION AGREEMENT
REPRESENTATIONS, WARRANTIES AND INDEMNITIES
ARTICLE 1- ADDITIONAL DEFINED TERMS
For purposes of this EXHIBIT D, the following terms have the meanings
set forth below. Terms which are not defined below shall have the meaning set
forth for those terms as defined in the Contribution Agreement to which this
EXHIBIT D is attached:
ACTIONS: Means all actions, complaints, charges, accusations,
investigations, petitions, suits or other proceedings, whether civil or
criminal, at law or in equity, or before any arbitrator or Governmental Entity.
CLAIMS: Means claims, disputes, actions, suits, arbitrations,
proceedings or investigations (collectively "Claims") pending or, to Knowledge,
threatened that directly or indirectly affect any of the Contributor, the
Partnerships or the Properties.
CONTRIBUTION AGREEMENT: Means the Contribution Agreement to which
this EXHIBIT D is attached.
KNOWLEDGE: Means, with respect to any representation or warranty so
indicated, the actual knowledge, upon reasonable investigation and inquiry in
good faith, of the signatory to the Contribution Agreement.
LIENS: Means, with respect to any real and personal property, all
mortgages, pledges, liens, options, charges, security interests, restrictions,
prior assignments, encumbrances, covenants, encroachments, assessments, rights
of others, licenses, easements, liabilities or claims of any kind or nature
whatsoever, direct or indirect, including, without limitation, interests in or
claims to revenues generated by such property.
OP UNITS: Shall have the meaning set forth in the OP Agreement.
PERMITTED LIENS: Means (a) Liens, or deposits made to secure the
release of such Liens, securing taxes, the payment of which is not delinquent or
the payment of which is actively being contested in good faith by appropriate
proceedings diligently pursued;
(b) Zoning laws and ordinances generally applicable to the districts
in which the Properties are located which are not violated by the existing
structures or present uses thereof;
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(c) Liens imposed by laws, such as carriers', warehousemen's and
mechanics' liens, and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings diligently
pursued;
(d) non-exclusive easements for public utilities that do not have a
material adverse effect upon, or interfere with the use of, the Properties; and
(e) any exceptions contained in the Title Policies.
PERSON: Means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or governmental entity.
PROSPECTUS: Means the Company's Form S-11 Registration Statement.
REIT SHARES: Shall have the meaning set forth in the OP Agreement.
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF THE CONTRIBUTOR
The Contributor represents and warrants to the Operating Partnership
as set forth below in this ARTICLE 2. Notwithstanding any other provision of
the Contribution Agreement or this EXHIBIT D, the Contributor makes
representations, warranties and indemnities only with respect to the interests
in the Partnerships to be transferred by the Contributor identified on EXHIBIT A
to the Contribution Agreement.
2.1 ORGANIZATION; AUTHORITY. The Contributor (A) if a natural
person, has the legal capacity to enter the Contribution Agreement; if not a
natural person, is duly formed, validly existing and in good standing (to the
extent applicable) under the laws of the jurisdiction of its formation, and (B)
has all requisite power and authority to own, lease or operate its property and
to carry on its business as presently conducted and, to the extent required
under applicable law, is qualified to do business and is in good standing in
each jurisdiction in which the nature of its business or the character of its
property make such qualification necessary.
2.2 DUE AUTHORIZATION. The execution, delivery and performance of
the Contribution Agreement by the Contributor has been duly and validly
authorized by all necessary action of the Contributor. This Contribution
Agreement and each agreement, document and instrument executed and delivered by
or on behalf of the contributor pursuant to this contribution Agreement
constitutes, or when executed and delivered will constitute, the legal, valid
and binding obligation of the Contributor, each enforceable against the
Contributor in accordance with its terms, as such enforceability may be limited
by bankruptcy or the application of equitable principles.
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2.3 CONSENTS AND APPROVALS. No consent, waiver, approval or
authorization of any third party is required to be obtained by the Contributor
in connection with the execution, delivery and performance of the Contribution
Agreement and the transactions contemplated hereby, except any of the foregoing
that shall have been satisfied prior to the Closing Date.
2.4 OWNERSHIP OF THE PARTNERSHIP INTERESTS. The Contributor is the
sole owner of the Partnership Interest and has good and valid title to such
Partnership Interest, free and clear of all Liens, other than Permitted Liens.
2.5 PARTNERSHIP INTEREST. The Partnership Interest constitutes all
of the issued and outstanding interests owned by the Contributor in the
Partnerships. The Partnership Interest is validly issued, fully paid and
non-assessable, and was not issued in violation of any preemptive rights. The
Partnership Interest has been issued in compliance with applicable law and the
relevant Partnership Agreements (as then in effect). There are no rights,
subscriptions, warrants, options, conversion rights, preemptive rights or
agreements of any kind outstanding to purchase or to otherwise acquire any of
the interests which comprise the Partnership Interest or any securities or
obligations of any kind convertible into any of the interests which comprise the
Partnership Interest or other equity interests or profit participation of any
kind in the Partnerships. At the Closing, upon receipt of the consideration,
the Contributor will have transferred the Partnership Interest free and clear of
all security interests, mortgages, pledges, liens, encumbrances, claims and
equities to the Operating Partnership.
2.6 NO VIOLATION. None of the execution, delivery or performance of
the Contribution Agreement and the transactions contemplated hereby does or
will, with or without the giving of notice, lapse of time, or both, (i) violate,
conflict with, result in a breach of, or constitute a default under or give to
others any right of termination or cancellation of (A) the organizational
documents, including the charters and bylaws, if any, of the Contributor, (B)
any material agreement, document or instrument to which the Contributor is a
party or by which the Contributor or its Partnership Interest is bound or (C)
any term or provision of any judgment, order, writ, injunction, or decree of any
governmental or regulatory authority binding on the Contributor or by which the
Contributor or any of its assets or properties are bound or subject or (ii)
result in the creation of any Lien, other than a Permitted Lien, upon the
Partnership Interest.
2.7 NON-FOREIGN STATUS. The Contributor is not a foreign person,
foreign corporation, foreign partnership, foreign trust or foreign estate (as
defined in the Code), and is, therefore, not subject to the provisions of the
Code relating to the withholding of sales proceeds to foreign persons.
2.8 WITHHOLDING. The Contributor shall execute at Closing such
certificates or affidavits reasonably necessary to document the inapplicability
of any federal or state withhoding provisions, including those referred to in
ARTICLE 2.7 above and similar provisions under California law. If Contributor
fails to provide such certificates or affidavits, the Operating
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Partnership may withhold a portion of any payments otherwise to be made to the
Contributor as required by the Code or California law.
2.9 INVESTMENT PURPOSES. The Contributor acknowledges his, her or
its understanding that the offering and sale of the OP Units to be acquired
pursuant to the Agreement are intended to be exempt from registration under
the Securities Act of 1933, as amended and the rules and regulations in effect
thereunder (the "ACT"). In furtherance thereof, the Contributor represents
and warrants to the Company as follows:
2.9.1 INVESTMENT. The Contributor is acquiring the OP Units
solely for his, her or its own account for the purpose of investment and not
as a nominee or agent for any other person and not with a view to, or for
offer or sale in connection with, any distribution of any thereof. The
Contributor agrees and acknowledges that he, she or it will not, directly or
indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise
dispose of (hereinafter, "TRANSFER") any of the OP Units unless (i) the
Transfer is pursuant to an effective registration statement under the Act and
qualification or other compliance under applicable blue sky or state
securities laws, or (ii) counsel for the Contributor (which counsel shall be
reasonably acceptable to the Operating Partnership) shall have furnished the
Operating Partnership with an opinion, reasonably satisfactory in form and
substance to the Operating Partnership, to the effect that no such
registration is required because of the availability of an exemption from
registration under the Act and qualification or other compliance under
applicable blue sky or state securities laws.
2.9.2 KNOWLEDGE. The Contributor is knowledgeable,
sophisticated and experienced in business and financial matters; the
Contributor has previously invested in securities similar to the OP Units and
fully understands the limitations on transfer imposed by the Federal
securities laws and as described in the Contribution Agreement. The
Contributor is able to bear the economic risk of holding the OP Units for an
indefinite period and is able to afford the complete loss of his, her or its
investment in the OP Units; the Contributor has received and reviewed all
information and documents about or pertaining to the Company, the Operating
Partnership, the business and prospects of the Company and the Operating
Partnership and the issuance of the OP Units as the Contributor deems
necessary or desirable, and has been given the opportunity to obtain any
additional information or documents and to ask questions and receive answers
about such information and documents, the Company, the Operating Partnership,
the business and prospects of the Company and the Operating Partnership and
the OP Units which the Contributor deems necessary or desirable to evaluate
the merits and risks related to his, her or its investment in the OP Units;
and the Contributor understands and has taken cognizance of all risk factors
related to the purchase of the OP Units.
2.9.3 HOLDING PERIOD. The Contributor acknowledges that he,
she or it has been advised that (i) the OP Units and the common stock of the
Company into which the OP Units may be exchanged in certain circumstances (the
"COMMON STOCK") must be held indefinitely, and the Contributor must continue
to bear the economic risk of the investment in the OP Units (and any Common
Stock that might be exchanged therefor) unless they are subsequently
registered under the Act or an exemption from such registration is available,
(ii)
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a restrictive legend in the form hereafter set forth shall be placed on the
certificates representing the OP Units (and any Common Stock that might be
exchanged therefor), and (iii) a notation shall be made in the appropriate
records of the Operating Partnership (and the Company) indicating that the OP
Units (and any Common Stock that might be exchanged therefor) are subject to
restrictions on transfer.
2.9.4 ACCREDITED INVESTOR. If the Contributor is an
individual, such individual is an "accredited investor" (as such term is
defined in Rule 501(a) of Regulation D under the Act) and as such:
(i) is a director or executive officer of the Company; or
(ii) has an individual net worth, or joint net worth with his or
her spouse, in excess of $1,000,000; or
(iii) had an individual annual adjusted gross income in
excess of $200,000 in each of the two most recent years and reasonably
expects to have annual adjusted gross income in excess of $200,000 in
the current year; or
(iv) had a joint income with his spouse in excess of $300,000 in
each of the two most recent years and reasonably expects to have an annual
adjusted gross income, with his spouse, in excess of $300,000 in the
current year.
If the Contributor is not an individual, it is an "accredited investor"
(as such term is defined in Rule 501(a) of Regulation D under the Act).
2.9.5 LEGENDING. Each certificate representing the OP Units
(and any Common Stock that might be exchanged therefor) shall bear the
following legend:
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE COMPANY
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT THE
PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT
REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR "BLUE
SKY" LAWS;
In addition, the Common Stock for which the OP Units might be
exchanged shall also bear a legend which generally provides the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND
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TRANSFER FOR THE PURPOSE OF THE CORPORATION'S MAINTENANCE OF ITS STATUS AS
A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"). SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND
EXCEPT AS EXPRESSLY PROVIDED IN THE CORPORATION'S CHARTER, (1) NO PERSON
MAY BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION'S
COMMON STOCK IN EXCESS OF 9.0% (BY VALUE OR BY NUMBER OF SHARES,
WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING COMMON STOCK OF THE
CORPORATION; (2) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY OWN COMMON
STOCK THAT WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD" UNDER
SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO
QUALIFY AS A REIT; AND (3) NO PERSON MAY TRANSFER COMMON STOCK IF SUCH
TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED
BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY
OWNS OR ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN COMMON STOCK WHICH
CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OR CONSTRUCTIVELY OWN
COMMON STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY
THE CORPORATION. IF ANY OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP ARE
VIOLATED, THE COMMON STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY
TRANSFERRED TO A TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE
CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES
UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS
SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A
TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE.
FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS
IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO.
ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE
CHARTER OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME,
A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP,
WILL BE FURNISHED TO EACH HOLDER OF COMMON STOCK ON REQUEST AND WITHOUT
CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE
CORPORATION.
2.10 NO BROKERS. Neither the Contributor nor any of its respective
officers, directors or employees has employed or made any agreement with any
broker, finder or similar agent or any person or firm which will result in the
obligation of the Operating Partnership or any of its affiliates to pay any
finder's fee, brokerage fees or commissions or similar payment in connection
with the transactions contemplated by the Contribution Agreement.
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2.11 SOLVENCY. The Contributor has been and will be solvent at all
times prior to and immediately following the transfer of the Partnership
Interest to the Operating Partnership.
2.12 NO MISREPRESENTATIONS. No representation, warranty or
statement made, or information provided, by the Contributor in the
Contribution Agreement or in any other document or instrument furnished or to
be furnished by or on behalf of the Contributor pursuant hereto or as
contemplated hereby (i) contains or will contain any untrue statement of a
material fact or (ii) omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading.
2.13 TAXES. For federal income tax purposes, the Partnerships are,
and at all times during their existence have been, partnerships (rather than
associations or publicly traded partnerships taxable as corporations). The
Partnerships have filed all tax returns required to be filed by them and have
paid all taxes required to be paid by them. The transactions contemplated
hereby will not result in any tax liability to the Partnerships, the Company
or the Operating Partnership. No tax lien or other charge exists or will
exist upon consummation of the transactions contemplated hereby with respect
to any Property except such tax liens for which the tax is not due and has
been reserved for payment by the Partnerships or tax liens or other charges
which individually or in the aggregate would not have a material adverse
effect on the Operating Partnership.
ARTICLE 3 - INDEMNIFICATION
3.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; REMEDY FOR BREACH.
(a) Subject to ARTICLE 3.6, all representations and warranties
contained in this EXHIBIT D or in any Schedule or certificate delivered pursuant
hereto shall survive the Closing.
(b) Notwithstanding anything to the contrary in the Contribution
Agreement or this EXHIBIT D, no party hereto shall be liable under this EXHIBIT
D or the Contribution Agreement for monetary damages (or otherwise) for breach
of any of its representations and warranties contained in this EXHIBIT D or the
Contribution Agreement, or in any Schedule, certificate or affidavit delivered
by it pursuant thereto, other than pursuant to the succeeding provisions of this
ARTICLE 3.
3.2 GENERAL INDEMNIFICATION.
(a) The Contributor shall indemnify and hold harmless the Operating
Partnership, the REIT, and their affiliates and each of their respective
directors, officers, employees, agents, representatives and affiliates (each of
which is an "INDEMNIFIED PARTY") from and against any and all claims, losses,
damages, liabilities and expenses, including, without limitation, amounts paid
in settlement, reasonable attorneys' fees, costs of investigation and
remediation, costs of investigative, judicial or administrative proceedings or
appeals therefrom, and costs of
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attachment or similar bonds (collectively, "LOSSES"), asserted against,
imposed upon or incurred by the Indemnified Party in connection with or as a
result of any breach of a representation or warranty of the Contributor
contained in the Contribution Agreement or in any Schedule, certificate or
affidavit delivered by the Contributor pursuant to the Contribution Agreement.
(b) The Contributor shall indemnify and hold harmless the Indemnified
Parties from and against any and all Losses, asserted against, imposed upon or
incurred by the Indemnified Parties in connection with or as a result of:
(i) all fees and expenses of the Contributor in connection with
the transactions contemplated by the Contribution Agreement;
(ii) any liabilities or obligations incurred, arising from or out
of, in connection with or as a result of the failure of the Contributor to
obtain all consents required to consummate the transactions contemplated by
the Contribution Agreement.
3.3 PAYMENT OF INDEMNIFICATION. The Contributor may satisfy its
obligations hereunder by the prompt delivery (paid promptly as and when
expenses are incurred) to an Indemnified Party of OP Units, subject to the
limits on ownership and transfer of REIT shares set forth in the Company's
articles of incorporation. Any OP Units delivered to an Indemnified Party
hereunder shall be valued based upon the initial public offering price of the
Company's Common Stock.
3.4 NOTICE AND DEFENSE OF CLAIMS. As soon as reasonably
practicable after receipt by the Indemnified Party of notice of any liability
or claim incurred by or asserted against the Indemnified Party that is subject
to indemnification under this ARTICLE 3, the Indemnified Party shall give
notice thereof to the Contributor, including liabilities or claims to be
applied against the indemnification baskets established pursuant to ARTICLE
3.5 hereof. The Indemnified Party may at its option demand indemnity under
this ARTICLE 3 as soon as a claim has been threatened by a third party,
regardless of whether an actual Loss has been suffered, so long as the
Indemnified Party shall in good faith determine that such claim is not
frivolous and that the Indemnified Party may be liable for, or otherwise
incur, a Loss as a result thereof and shall give notice of such determination
to the Contributor. The Indemnified Party shall permit the Contributor, at
its option and expense, to assume the defense of any such claim by counsel
selected by the Contributor and reasonably satisfactory to the Indemnified
Party, and to settle or otherwise dispose of the same; PROVIDED, HOWEVER, that
the Indemnified Party may at all times participate in such defense at its
expense; and PROVIDED FURTHER, HOWEVER, that the Contributor shall not, in
defense of any such claim, except with the prior written consent of the
Indemnified Party in its sole and absolute discretion, consent to the entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff in question
to the Indemnified Party and its affiliates a release of all liabilities in
respect of such claims, or that does not result only in the payment of money
damages. If the Contributor shall fail to undertake such defense within 30
days after such notice, or within such shorter time as may be reasonable under
the circumstances, then the Indemnified Party shall
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have the right to undertake the defense, compromise or settlement of such
liability or claim on behalf of and for the account of the Contributor.
3.5 LIMITATIONS ON AND THRESHOLD FOR INDEMNIFICATION UNDER
ARTICLE 3.2.
(a) The Contributor shall not be liable under ARTICLE 3.2 hereof
unless and until the total amount recoverable by the Indemnified Parties under
ARTICLE 3.2 exceeds $200,000; PROVIDED, HOWEVER, that once the total amount
recoverable by the Indemnified Parties under ARTICLE 3.2 hereof exceeds $200,000
in the aggregate, the Contributor's obligation under ARTICLE 3.2 hereof shall be
for the full amount of such obligation.
(b) Notwithstanding anything contained herein to the contrary, the
Contributor shall not be liable or obligated to make payments under this ARTICLE
3 with respect to any Partnership Interest to the extent such payments in the
aggregate would exceed the value of the OP Units (based upon the initial public
offering price of the Common Stock) received by the Contributor at the Closing.
Notwithstanding anything contained herein to the contrary, the Indemnified
Parties shall look first to the Contributor's OP Units for indemnification under
this ARTICLE 3 and then to the Contributor's other assets.
3.6 LIMITATION PERIOD.
(a) Notwithstanding the foregoing, any claim for indemnification under
ARTICLE 3.2 hereof must be asserted in writing by the Indemnified Party, stating
the nature of the Losses and the basis for indemnification therefor:
(i) within one year after the Closing in the case of a claim
under ARTICLE 3.2 hereof (other than a claim under ARTICLE 3.2(A) based
upon a breach of the representations, and warranties of the Contributor set
forth in ARTICLE 2.13 hereof as specified below; and
(ii) prior to the expiration of the applicable statutes of
limitations in the case of a claim under ARTICLE 3.2(A) based upon a breach
of the representations and warranties of the Contributor set forth in
ARTICLE 2.13 hereof.
(b) If so asserted in writing within one year after the Closing, such
claims for indemnification shall survive until resolved by mutual agreement
between the Contributor and the Indemnified Party or by judicial determination.
Any claim for indemnification not so asserted in writing within one year after
the Closing shall not thereafter be asserted and shall forever be waived.
3.7 RESERVATION OF CONTRIBUTOR RIGHTS.
Notwithstanding anything else in this Contribution Agreement to the
contrary, the Contributor reserves unto itself all rights and remedies
(including rights to seek contribution)
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against any third party indemnitors and prior property owners or occupants for
which the Partnerships have been indemnified by the Contributor hereunder. To
the extent the Contributor's rights against any such third party indemnitors,
owners or occupants may be prejudiced by actions or inactions by any owner or
occupant of the Properties after the Closing, the Contributor's indemnity
obligation shall be reduced in accordance with the effect of the actions or
inactions which so prejudiced the Contributor's rights.
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EXHIBIT E
to
CONTRIBUTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby assigns, transfers and
conveys to ARDEN REALTY GROUP LIMITED PARTNERSHIP, a Maryland limited
partnership (the "Operating Partnership"), its entire legal and beneficial
right, title and interest in and to that certain Property Management
Agreement, dated as of December 14, 1994, by and among 5000 Spring Associates,
LLC, a Nevada limited liability company, Xxxxxx Xxxxxxx as Trustee of the
Xxxxxx Xxxxxxx and Xxxxxxxxx Xxxxxxx 1982 Trust, and Contributor, as Owners
and Arden Realty Group, Inc., a California corporation, as Manager, TO HAVE
AND TO HOLD the same unto the Operating Partnership, its successors and
assigns, forever.
Executed: __________ __, 1996 XXXXXXX XXXX, an individual
By:
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