Agreement of Purchase and Sale
of Tenancy-in-Common Interest
between
Haptel, Inc.,
a Delaware corporation,
as "Seller",
and
Fidelity Partners, Inc.,
a California corporation
as "Purchaser"O,
dated as of November 15, 1996
for property at
0000 X. Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
Table Of Contents
Page
List of Exhibits
1. TIC Interest
1.1 Description
1.2 The Property
1.3 "As-Is" Purchase
2. Price and Payment
2.1 Purchase Price
2.2 Payment
2.3 Closing
3. Inspections and Approvals
3.1 Inspections
3.2 Title and Survey
3.3 Contracts
3.4 Permitted Encumbrances
3.5 Survey
3.6 Due Diligence Documents
3.7 Purchaser's Right to Terminate
3.8 Confidentiality
4. Prior to Closing
4.1 Insurance
4.2 Operation
4.3 New Contracts
4.4 New Leases
4.5 Prospective Leases
4.6 Liens and Encumbrances
5. Representations and Warranties
5.1 By Seller
5.2 By Purchaser
5.3 Mutual
6. Costs and Prorations
6.1 Purchaser's Costs
6.2 Seller's Costs
6.3 Prorations
6.4 Taxes
6.5 In General
6.6 Purpose and Intent
7. Damage, Destruction or Condemnation
7.1 Material Event
7.2 Immaterial Event
7.3 Termination and Return of Deposit
8. Notices
9. Closing and Escrow
9.1 Escrow Instructions
9.2 Seller's Deliveries
9.3 Purchaser's Deliveries
9.4 (Intentionally Deleted)
9.5 Insurance
9.6 Utility Service and Deposits
9.7 Notice Letters
9.8 Post-Closing Collections
9.9 Reporting Requirements
10. Default; Failure of Condition
10.1 Purchaser Default
10.2 Seller Default
10.3 Failure of Condition
11. Miscellaneous
11.1 Entire Agreement
11.2 Severability
11.3 Applicable Law
11.4 Assignability
11.5 Successors Bound
11.6 Breach
11.7 No Public Disclosure
11.8 Captions
11.9 Attorneys' Fees
11.10 No Partnership
11.11 Time of Essence
11.12 Counterparts
11.13 Recordation
11.14 Proper Execution
11.15 Tax Protest
11.16 No Merger
11.17 Actual Knowledge
11.18 Survival and Limitation of Representations
and Warranties
11.19 Limited Liability
11.20 Execution of HPP Agreement
11.21 Time to Execute and Deliver
Agreement of Purchase and Sale of Tenancy-in-Common Interest
This Agreement of Purchase and Sale of Tenancy-in-Common
Interest (this "Agreement"), dated as of the 15th day of
November, 1996, is made by and between Haptel, Inc., a
Delaware corporation ("Seller"), and Fidelity Partners, Inc.
a California corporation ("Purchaser").
Recitals:
A. In 1983, Seller became a partner in Hapsmith-Praxis
Airport Associates, a California general partnership (the
"Partnership"), formed pursuant to that certain Joint
Venture Agreement of Hapsmith-Praxis Airport Associates by
and between Seller and Hapsmith-Praxis Partners, a
California limited partnership ("HPP"), dated as of
January 27, 1983.
B. Since 1983, the Partnership has owned certain real
property situated in the County of Los Angeles, State of
California, as more particularly described on Exhibit A
hereto, together with the improvements located thereon,
consisting of a ten-story office building commonly known as
the Union Bank Center located at 0000 X. Xxxxxxx Xxxxxxxxx,
Xxx Xxxxxxx, Xxxxxxxxxx (the "Property").
C. As a result of the dissolution of the Partnership,
Seller will be an eighty-six and one-quarter percent
(86.25%) tenant-in-common in the Property with HPP. As used
in this Agreement, the phrase "Seller's Allocable
Percentage" shall mean eighty-six and one-quarter percent
(86.25%).
D. Seller desires to sell to Purchaser and Purchaser
desires to purchase from Seller on the Closing Date Seller's
tenancy-in-common interest in the Property (the "TIC
Interest").
E. For purposes of this Agreement, Seller and HPP shall be
collectively referred to as the "Partners" during the period
prior to the dissolution of the Partnership and as the
"Tenants-In-Common" from and after the dissolution of the
Partnership.
Now, Therefore, in consideration of the foregoing, of
the covenants, promises and undertakings set forth herein,
and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and
Purchaser agree as follows:
1. TIC Interest
1.1 Description
Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Seller agrees to
sell and transfer, and Purchaser agrees to purchase and
acquire the TIC Interest.
1.2 The Property
For purposes of this Agreement, the Property shall
consist of the following:
1. Certain land ("Land") located in the City of
Los Angeles, County of Los Angeles, State of California and
more specifically described in Exhibit 1.1.1 attached
hereto;
2. The buildings, parking areas, improvements, and
fixtures now situated on the Land (the "Improvements");
3. All furniture, personal property, machinery, apparatus,
and equipment currently used in the operation, repair and
maintenance of the Land and Improvements and situated
thereon (collectively, the "Personal Property"), generally
described on Exhibit 1.1.3 attached hereto. The Personal
Property to be conveyed is subject to depletions,
replacements and additions in the ordinary course of
Seller's business;
4. All easements, hereditaments, and appurtenances
belonging to or inuring to the benefit of Seller and
pertaining to the Land, if any;
5. The leases or occupancy agreements, including those in
effect on the date of this Agreement which are identified on
the Schedule of Leases attached hereto as Exhibit 1.1.5, and
any new leases entered into pursuant to Section 4.4, which
as of the Closing (as hereinafter defined) affect all or any
portion of the Land or Improvements ("Leases"), and any
security deposits actually held by Seller with respect to
any such Leases;
6. Subject to Section 3.3, all contracts and agreements
relating to the operation or maintenance of the Land,
Improvements or Personal Property the terms of which extend
beyond midnight of the day preceding the Closing Date;
7. Assignable warranties and guaranties issued in
connection with the Improvements or Personal Property; and
8. All transferable consents, authorizations, variances or
waivers, licenses, permits and approvals from any
governmental or quasi-governmental agency, department,
board, commission, bureau or other entity or instrumentality
solely in respect of the Land or Improvements (collectively,
"Approvals").
1.3 "As-Is" Purchase
Purchaser acknowledges and agrees that it has been or
will prior to the Approval Date (as hereinafter defined) be
given a full opportunity to inspect and investigate every
aspect of the Property, including all matters related to
legal status or requirements, physical condition, title,
leasing, contracts and other matters of significance.
Purchaser specifically acknowledges and agrees that the TIC
Interest is being sold in an "as is" condition and "with all
faults" as of the date of Closing. Except as expressly set
forth in this Agreement, no representations or warranties
have been made or are made and no responsibility has been or
is assumed by Seller or by any partner, officer, person,
firm, agent or representative acting or purporting to act on
behalf of Seller as to any matters concerning the TIC
Interest or the Property, including, without limitation, the
condition or repair of the Property or the value, expense of
operation, or income potential thereof or as to any other
fact or condition which has or might affect the Property or
the condition, repair, value, expense of operation or income
potential of the Property or any portion thereof. The
parties agree that all understandings and agreements
heretofore made between them or their respective agents or
representatives are merged in this Agreement and the
Exhibits hereto annexed, which alone fully and completely
express their agreement, and that this Agreement has been
entered into after full investigation, or with the parties
satisfied with the opportunity afforded for full
investigation, Purchaser is not relying upon any statement
or representation by the other unless such statement or
representation is specifically embodied in this Agreement or
the Exhibits annexed hereto. Without limiting the
foregoing, Seller makes no representations or warranties as
to whether the Property contains asbestos or harmful or
toxic substances or pertaining to the extent, location or
nature of same. Further, to the extent that Seller has
provided to Purchaser information from any inspection,
engineering or environmental reports concerning asbestos or
harmful or toxic substances, Seller makes no representations
or warranties with respect to the accuracy or completeness,
methodology of preparation or otherwise concerning the
contents of such reports. Purchaser acknowledges that
Seller has requested Purchaser to inspect fully the Property
and investigate all matters relevant thereto and to rely
solely upon the results of Purchaser's own inspections or
other information obtained or otherwise available to
Purchaser, rather than any information that may have been
provided by Seller to Purchaser.
Without limiting the above, Purchaser on behalf of
itself and its successors and assigns waives and releases
Seller and its successors and assigns from any and all
demands, claims, legal or administrative proceedings,
losses, liabilities, damages, penalties, fines, liens,
judgments, costs or expenses whatsoever (including, without
limitation, attorneysO fees and costs), whether direct or
indirect, known or unknown, foreseen or unforeseen, arising
from or relating to the physical condition of the Property
or any law or regulation applicable thereto, including the
presence or alleged presence of asbestos or harmful or toxic
substances in, on, under or about the Property including,
without limitation, any claims under or on account of (i)
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same may have been or may be
amended from time to time, and similar state statutes, and
any regulations promulgated thereunder, (ii) any other
federal, state or local law, ordinance, rule or regulation,
now or hereafter in effect, that deals with or otherwise in
any manner relates to, environmental matters of any kind, or
(iii) this Agreement or the common law. Consequently,
Purchaser expressly waives all rights under California Civil
Code section 1542, which provides that:
"A general release does not extend to claims
which the creditor does not know or suspect to
exist in his favor at the time of executing
the release, which if known by him must have
materially affected his settlement with the
debtor."
Purchaser
Initials /s/ JS
The terms and provisions of this paragraph shall survive
Closing hereunder.
2. Price and Payment
2.1 Purchase Price
The purchase price for the TIC Interest ("Purchase
Price") is Eight Million Nine Hundred Seventy Thousand
Dollars ($8,970,000).
2.2 Payment
Payment of the Purchase Price is to be made as follows:
1. (a) Within two (2) business days after the date of
this Agreement and the execution by HPP and Purchaser of the
HPP Agreement (as hereinafter defined), Purchaser shall make
an xxxxxxx money deposit of Eighty-Six Thousand Two Hundred
Fifty Dollars ($86,250) (the "Initial Deposit").
(b) On or before the Approval Date, and provided
Purchaser does not give the Termination Notice (as defined
in and pursuant to Section 3.7 hereof) on or before the
Approval Date, Purchaser shall deposit an additional Three
Hundred Forty-Five Thousand Dollars ($345,000) (the
"Additional Deposit). (The Initial Deposit and the
Additional Deposit, if made, are collectively referred to
herein as the "Deposit.")
(c) The Deposit, as installments of the same are paid,
will be placed and held in escrow (the "Escrow") by Chicago
Title Insurance Company ("Title Company") in an interest
bearing account at a mutually acceptable banking
institution. Any interest earned by the Deposit shall be
considered as part of the Deposit. Except as otherwise
provided in this Agreement, the Deposit will be applied to
the Purchase Price at Closing.
2. At Closing, the Purchaser shall pay Seller Eight
Million Nine Hundred Seventy Thousand Dollars ($8,970,000)],
inclusive of the Deposit , and subject to the prorations as
provided herein, to the Escrow via wire transfer in
immediately available funds.
2.3 Closing
Payment of the Purchase Price and the closing hereunder
("Closing") will take place pursuant to the Escrow closing
on or before the date that is fifteen (15) days after the
Approval Date, but in no event later than December 31, 1996
("Closing Date"), at the offices of the Title Company at
10:00 a.m. local time or at such other time and place as may
be agreed upon in writing by Seller and Purchaser.
3. Inspections and Approvals
3.1 Inspections
1. Seller agrees to allow Purchaser or Purchaser's agents
or representatives reasonable access to the Property (during
business hours) for purposes of any non-intrusive physical
or environmental inspection of the Property and review of
the Leases, expenses and other matters relating to the
Property, all at Purchaser's sole cost and expense.
Purchaser shall not conduct or intentionally allow any
physically intrusive testing of, on or under the Property
without first obtaining SellerOs written consent as to the
timing and scope of work to be performed and, upon request
of Seller, entering into an access agreement in a form
acceptable to Seller. Purchaser's breach of the foregoing
prohibition shall entitle Seller, at its option, immediately
and without the cure period provided in Section 11.6 hereof
to declare this Agreement to be terminated and to retain as
provided in Section 10.1 hereof the Deposit as liquidated
damages. For purposes of this Section 3.1.1, "physically
intrusive testing" means any testing which involves the
boring of or into the land or the improvements and/or the
removal, collection or obtaining of soils, building
materials or other physical samples from the land or the
improvements.
2. Purchaser agrees that, in making any non-intrusive
physical or environmental inspections of the Property,
Purchaser will carry not less than One Million Dollars
($1,000,000) comprehensive general liability insurance with
contractual liability endorsement which insures Purchaser's
indemnity obligations hereunder, and, upon request of
Seller, will provide Seller with written evidence of same,
will not interfere with the activity of tenants or any
persons occupying or providing service at the Property, will
not reveal the results of its inspections to any third party
not approved by Seller, except for Purchaser's advisors,
consultants, partners and lenders, and will restore promptly
any physical damage caused by the inspections. Purchaser
shall give Seller reasonable prior notice of its intention
to conduct any inspections, and Seller reserves the right to
have a representative present. Purchaser agrees to provide
Seller with a copy of any inspection report upon Seller's
written request, which agreement shall survive Closing;
provided, however, if the transaction does not close
hereunder for a reason other than a default by Purchaser ,
then Seller shall reimburse Purchaser for fifty percent
(50%) of the cost of any such report requested by Seller in
writing. Purchaser agrees (which agreement shall survive
Closing or termination of this Agreement) to indemnify,
defend, and hold Seller free and harmless from any loss,
injury, damage, claim, lien, cost or expense, including
attorney"s fees and costs (collectively, "Costs"), arising
out of a breach of the foregoing agreements by Purchaser in
connection with the inspection of the Property, or otherwise
from the exercise by Purchaser or its agents or
representatives of the right of access under this Section
3.1 (collectively, "Purchaser's Indemnity Obligations").
Any inspections shall be at Purchaser's expense.
3. Except as expressly provided in Section 5.1.5 below,
Seller makes no representations or warranties as to the
truth, accuracy or completeness of any materials, data or
other information supplied to Purchaser in connection with
Purchaser's inspection of the Property (e.g., that such
materials are complete, accurate or the final version
thereof, or that all such materials are in Seller's
possession). It is the parties' express understanding and
agreement that such materials are provided only for
Purchaser's convenience in making its own examination and
determination prior to the Approval Date, as hereinafter
defined, as to whether it wishes to purchase the TIC
Interest, and, in doing so, Purchaser shall rely exclusively
on its own independent investigation and evaluation of every
aspect of the Property and not on any materials supplied by
Seller. Purchaser expressly disclaims any intent to rely on
any such materials provided to it by Seller in connection
with its inspection and agrees that it shall rely solely on
its own independently developed or verified information.
3.2 Title and Survey
Within two (2) business days after the date of this
Agreement, Seller shall cause to be delivered to Purchaser a
preliminary title report for title insurance on the TIC
Interest or the TIC Interest in the Land, issued by Title
Company ("Title Report"), together with copies of all items
shown as exceptions to title therein. Purchaser shall have
until the date that is ten (10) days prior to the Approval
Date ("Interim Date") to provide written notice to Seller of
any matters shown by the Title Report which are not
satisfactory to Purchaser, which notice ("Title Notice")
must specify the reason such matter(s) are not satisfactory
and the curative steps necessary to remove the basis for
Purchaser's disapproval. The parties shall then have until
the Approval Date specified in Section 3.7 to make such
arrangements or take such steps as they shall mutually agree
to satisfy Purchaser's objection(s); provided, however, that
Seller shall have no obligation whatsoever to expend or
agree to expend any funds, to undertake or agree to
undertake any obligations or otherwise to cure or agree to
cure any title objections, and Seller shall not be deemed to
have any obligation to cure unless Seller expressly
undertakes such an obligation by a written notice to or
written agreement with Purchaser given or entered into on or
prior to the Approval Date and which recites that it is in
response to a Title Notice. Purchaser's sole right with
respect to any Title Report matter to which it objects in a
Title Notice given in a timely manner shall be to elect on
or before the Approval Date to terminate this Agreement
pursuant to Section 3.6 hereof. All matters shown in the
Title Report with respect to which Purchaser fails to give a
Title Notice on or before the last date for so doing, or
with respect to which a timely Title Notice is given but
Seller fails to undertake an express obligation to cure as
provided above, shall be deemed to be approved by Purchaser
as "Permitted Encumbrances" as provided in Section 3.4
hereof, subject, however, to Purchaser's termination right
provided in Section 3.7 hereof.
3.3 Contracts
On or before the Approval Date, Purchaser shall notify
Seller in writing if Purchaser elects not to assume at
Closing any of the service, maintenance, supply or other
contracts relating to the operation of the Property which
are identified on Exhibit 3.3 attached hereto. If Purchaser
does not exercise its right to terminate this Agreement on
or before the Approval Date, Seller shall give notice of
termination of such disapproved contract(s); provided, if by
the terms of the disapproved contract Seller has no right to
terminate same on or prior to Closing, or if any fee or
other compensation is due thereunder as a result of such
termination, Purchaser shall be required at Closing to
assume all obligations thereunder until the effective date
of the termination and to assume the obligation to pay or to
reimburse Seller for the payment of the termination related
charge.
3.4 Permitted Encumbrances
Unless Purchaser terminates this Agreement pursuant to
Section 3.7 hereof following its opportunity fully to
inspect the Property, the state of title thereto and all
other matters relating to the Property, including its
feasibility for Purchaser's intended use and its suitability
as an investment, Purchaser shall be deemed to have approved
and to have agreed to purchase the TIC Interest subject to
the following:
1. All exceptions to title shown in the Title Report or
matters shown on the Survey, if any, which Purchaser has
approved or is deemed to have approved pursuant to
Section 3.2 hereof;
2. All contracts and leases which Purchaser has approved
or is deemed to have approved pursuant to Sections 3.3, 4.3
and 4.4 hereof;
3. the lien of non-delinquent real and personal property
taxes and assessments;
4. rights of parties in possession not shown by the public
records;
5. discrepancies, conflicts in boundary lines, shortages
in area, encroachments, and any state of facts which an
inspection of the premises would disclose and which are not
shown by the public records;
6. easements or claims of easements not shown by the
public records;
7. any service, installation, connection, maintenance or
construction charges due after closing, and subject to the
proration provisions hereof, for sewer, water, electricity,
telephone, cable television or gas;
8. unrecorded leaseholds, rights of vendors and holders of
security interests on personal property installed upon the
Property by tenants and rights of tenants to remove trade
fixtures at the expiration of the term of the leases of
tenants; and
9. any matters created by or consented to in writing by
Purchaser.
All of the foregoing are referred to herein collectively as
"Permitted Encumbrances".
3.5 Survey
Purchaser shall have the right to obtain an ALTA survey
of the Land and Improvements ("Survey"), at Purchaser's sole
cost and expense, on or before the Approval Date. If
Purchaser disapproves the Survey, Purchaser shall have the
right to terminate the transaction by delivering a
Termination Notice to Seller pursuant to Section 3.7 below
on or before the Termination Date.
3.6 Due Diligence Documents
Prior to the date hereof, Seller has provided to
Purchaser copies of or otherwise made available to Purchaser
for review the documents described in Exhibit 3.6 hereto,
all to the extent such documents are in the possession of
Seller on the date of this Agreement (collectively, the "Due
Diligence Documents"). Purchaser shall have until the
Approval Date to review the Due Diligence Documents. If
Purchaser is not satisfied with the Due Diligence Documents,
it shall have the right to deliver a Termination Notice
pursuant to Section 3.7 below.
3.7 Purchaser's Right to Terminate
If Purchaser determines that the TIC Interest is not a
suitable investment for its purposes, Purchaser shall have
the right by giving Seller written notice ("Termination
Notice") on or before the date ("Approval Date") that is
thirty (30) days after the execution of this Agreement and
the HPP Agreement, but in no event later than December 20,
1996, to terminate its obligation to purchase the TIC
Interest. If the Termination Notice is timely given, Seller
shall direct the Title Company promptly to return the
Deposit to Purchaser and neither party shall have any
further liability hereunder except for Purchaser's Indemnity
Obligations and other obligations set forth in Section 3.1.2
and Purchaser's obligations set forth in Sections 3.8, 5.3
and 11.7 hereof.
3.8 Confidentiality
Unless Seller specifically and expressly otherwise
agrees in writing, Purchaser agrees that all information
regarding the TIC Interest or the Property of whatsoever
nature made available to it by Seller or Seller's agents or
representatives ("Proprietary Information") is confidential
and shall not be disclosed to any other person except those
assisting Purchaser with the transaction, or PurchaserOs
investors or lender, if any, and then only upon Purchaser
making such person aware of the confidentiality restriction
and procuring such person's agreement to be bound thereby.
In the event the purchase and sale contemplated hereby fails
to close for any reason whatsoever, Purchaser agrees to
return to Seller, or cause to be returned to Seller all
Proprietary Information. Further, Purchaser agrees not to
use or allow to be used any Proprietary Information for any
purpose other than to determine whether to proceed with the
contemplated purchase, or if same is consummated, in
connection with the operation of the Property post-Closing.
Notwithstanding any other term of this Agreement, the
provisions of this SectionE3.8 shall survive Closing or the
termination of this Agreement.
4. Prior to Closing
From and after the date of this Agreement and until
Closing, Seller shall cause the Partnership or Tenants-In-
Common to:
4.1 Insurance
Keep the Property insured against fire and other hazards
covered by extended coverage endorsement and comprehensive
public liability insurance against claims for bodily injury,
death and property damage occurring in, on or about the
Property, with coverage amounts under such policies not less
than the coverages in effect on the date of this Agreement.
4.2 Operation
Operate and maintain the Property in a businesslike
manner and substantially in accordance with the
Partnership's or the Tenants-In-Common's past practices with
respect to the Property, and make any and all repairs and
replacements reasonably required to cause the Property to be
at closing in its present condition, normal wear and tear
excepted, provided that in the event of any loss or damage
to the Property as described in Section 7, Seller shall have
an obligation to Purchaser to cause the Partnership or the
Tenants-In-Common to repair the Property only if Seller so
elects and then shall be obligated only to the extent of
available insurance proceeds.
4.3 New Contracts
Not enter into any third party service or maintenance
contracts without the written consent of Purchaser, which
consent shall not be unreasonably withheld, conditioned or
delayed. Failure of Purchaser to consent or expressly
withhold its consent stating with specificity the basis of
its objection within two (2) business days after written
request for such consent shall be deemed to constitute
consent.
4.4 New Leases
Subject to the rights of Purchaser under Section 4.5
below, continue its present rental program and efforts at
the Property to rent vacant space, provided that (i) prior
to the Approval Date, Seller or HPP will give Purchaser
immediate notice of any new leases or lease amendments
entered into by the Partnership or the Tenants-In-Common or
any subleases approved by the Partnership or the Tenants-In-
Common, together with copies of the underlying lease or
sublease documents, (ii) on and after the Approval Date,
neither the Partnership nor the Tenants-In-Common will
execute any new leases or amend, terminate or accept the
surrender of any existing tenancies or approve any subleases
without the prior written consent of Purchaser, which
consent shall not be unreasonably withheld, conditioned or
delayed, except that the Partnership and the Tenants-In-
Common are authorized to accept the termination of leases at
the end of their existing terms; and (iii) in the event that
the Partnership or the Tenants-In-Common execute any new
lease after the date of this Agreement which requires the
construction of tenant fixtures or improvements or the
payment of leasing or brokerage commission(s) at the expense
of the landlord, Purchaser, by electing to proceed with the
purchase notwithstanding its termination right pursuant to
Section 3.7, or by approving such lease if executed after
the Approval Date, agrees to assume the obligation to pay
and/or at Closing to reimburse Seller for Seller's Allocable
Percentage of the paid portion of the cost of such
improvements and leasing or brokerage commission(s) and any
other costs associated with such Lease unless Seller and
Purchaser expressly agree in writing that Seller shall be
responsible for any such costs. Failure of Purchaser to
consent or expressly withhold its consent stating with
specificity the basis of its objection within two (2)
business days after written request for such consent shall
be deemed to constitute consent.
4.5 Prospective Leases
From and after the Approval Date through the Closing or
the earlier termination of this Agreement, Purchaser shall
have the right to retain a leasing broker for the Property
approved by Seller (the "Leasing Broker"), such approval not
to be unreasonably withheld, and to cause such Leasing
Broker to market the Property to prospective tenants;
provided, however, that Purchaser shall cause the Leasing
Broker to disclose to each prospective tenant in writing
that Purchaser is not the owner of the Property and that the
effectiveness of any lease negotiated by Purchaser (a
"Prospective Lease") shall be conditioned upon the
acquisition of the TIC Interest by Purchaser in accordance
with this Agreement. Purchaser have no right or authority
to execute any Prospective Lease or to otherwise bind the
Property and all Prospective Leases and other agreements
shall be executed, if at all, by Seller. Seller shall have
the right to approve the terms and conditions of all
Prospective Leases prior to executing the same. Purchaser
acknowledges that if it requests Seller to execute any
Prospective Lease pursuant to this Section 4.5, then
Purchaser shall be deemed to have approved such lease for
all purposes of Section 4.4 above. Purchaser shall
indemnify, defend, and hold Seller free and harmless from
any Costs arising in connection with the exercise of
Purchaser's rights under this Section 4.5, including,
without limitation, any Costs arising out of claims by
prospective tenants, real estate brokers or leasing agents
(including, without limitation, any claim to a brokerage
commission or finders' fee by any real estate broker or
leasing agent). The foregoing indemnity shall survive
beyond the Closing or, if the sale is not consummated,
beyond the termination of this Agreement.
4.6 Liens and Encumbrances
Not voluntarily create any liens, encumbrances or
easements against the Property without the prior written
consent of Purchaser, except for liens or encumbrances which
will be discharged prior to Closing.
5. Representations and Warranties
5.1 By Seller
Seller represents and warrants to Purchaser that:
1. Seller is a corporation duly organized under the
laws of the State of Delaware, has duly authorized the
execution and performance of this Agreement, and such
execution and performance will not violate any material term
of its certificate of incorporation or bylaws.
2. This Agreement is the valid and binding obligation
of Seller.
3. To the actual knowledge of Seller, Seller has not
received, within the twelve (12) month period prior to the
date hereof (the "Operative Period"), written notice from
any governmental authority having jurisdiction over the
Property that the Property is in violation of any laws,
ordinances or regulations of such governmental authority.
4. To the actual knowledge of Seller, Seller has not
received, during the Operative Period, written notice from
any governmental authority having jurisdiction over the
Property of any pending or threatened condemnation actions
with respect to the Property.
5. To the actual knowledge of Seller, the rent roll
and operating statements prepared by Seller and delivered to
Purchaser pursuant to Section 3.6 above are accurate and
complete in all material respects.
5.2 By Purchaser
Purchaser represents and warrants to Seller that:
1. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California, is authorized to do business in the State of
California, has duly authorized the execution and
performance of this Agreement, and such execution and
performance will not violate any material term of its
certificate of incorporation or bylaws.
2. Purchaser is acting as principal in this transaction
with authority to close the transaction.
3. No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking
reorganization or arrangement or other action under Federal
or State bankruptcy laws is pending against or contemplated
by Purchaser.
4. By the Approval Date, Purchaser will have inspected the
Property fully and completely at its expense and will have
ascertained to its satisfaction the extent to which the
Property complies with applicable zoning, building,
environmental, health and safety and all other laws, codes
and regulations.
5. By the Approval Date, Purchaser will have reviewed the
Leases, contracts, expenses and other matters relating to
the Property and, based upon its own investigations,
inspections, tests and studies, will have determined whether
to purchase the TIC Interest and to assume SellerOs
obligations with respect to the Property arising after the
Closing Date under the leases, contracts and otherwise with
respect to the Property.
6. Purchaser is a corporation domesticated in the United
States of America.
7. Purchaser will not use the assets of an employee
benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")
and covered under Title I, Part 4 of ERISA or Section 4975
of the Internal Revenue Code of 1986, as amended, in the
performance or discharge of its obligations hereunder,
including the acquisition of the TIC Interest. Purchaser
shall not assign its interest hereunder to any person or
entity which does not expressly make this covenant and
warranty for the benefit of Seller.
5.3 Mutual
Each of Seller and Purchaser represents to the other
that it has had no dealings, negotiations, or consultations
with any broker, representative, employee, agent or other
intermediary, except Union Property Capital (Broker), in
connection with the Agreement or the sale of the TIC
Interest. Purchaser will be responsible for any commission,
fee or other compensation, if any, payable upon Closing to
Broker pursuant to the terms of a separate written agreement
between Purchaser and Broker. Seller and Purchaser agree
that each will indemnify, defend and hold the other free and
harmless from the claims of any other broker(s),
representatives, employees, agent(s) or other
intermediary(ies) claiming to have represented Seller or
Purchaser, respectively, or otherwise to be entitled to
compensation in connection with this Agreement or in
connection with the sale of the TIC Interest. Purchaser
will indemnify, defend and hold Seller free and harmless
from any and all losses, liabilities, claims, and expenses
(including reasonable attorneys fees) arising out of any
claims of Broker for compensation in connection with the
sale of the TIC Interest. The provisions of this
Section 5.3 shall survive Closing and the termination of
this Agreement.
6. Costs and Prorations
6.1 Purchaser's Costs
Purchaser will pay the following costs of closing this
transaction:
1. The fees and disbursements of its counsel, inspecting
architect and engineer, if any;
2. One-half (1/2) of any escrow fees and recording fees;
3. One-half (1/2) of any sales or use taxes relating to
the transfer of Seller's interest in the Personal Property
to Purchaser;
4. One-half (1/2) of any real estate transfer, stamp or
documentary taxes;
5. One-half (1/2) of the cost of an owner's title
insurance policy without extended coverage or special
endorsements, issued in connection with this transaction;
6. The cost of any title insurance in excess of the costs
of an owner's policy without extended coverage or special
endorsements, including any charge(s) for endorsements
and/or deletions of exception items, and any escrow or title
cancellation fees imposed by any title company in the event
the escrow is canceled;
7. The broker's fee payable to Broker; and
8. Any other expense(s) incurred by Purchaser or its
representatives in inspecting or evaluating the Property or
closing this transaction.
6.2 Seller's Costs
Seller will pay:
1. The fees and disbursements of Seller's counsel;
2. One-half (1/2) of any escrow fees and recording fees;
3. One-half (1/2) of any sales or use taxes relating to
the transfer of Seller's interest in the Personal Property
to Purchaser;
4. One-half (1/2) of any real estate transfer, stamp or
documentary taxes; and
5. One-half (1/2) of the cost of an owner's title
insurance policy without extended coverage or special
endorsements, issued in connection with this transaction.
6.3 Prorations
Seller's Allocable Percentage of the rents and any other
amounts payable by tenants, personal property taxes,
installment payments of special assessment liens, vault
charges, sewer charges, utility charges and normally
prorated operating expenses actually collected or paid as of
the Closing Date shall be prorated as of the Closing Date
and be adjusted against the Purchase Price due at the
Closing, provided that within one hundred twenty (120) days
after the Closing, Purchaser and Seller will make a further
adjustment for such rents, taxes or charges which may have
accrued or been incurred prior to the Closing Date, but not
collected or paid at that date. All prorations shall be
made on a 360-day calendar year basis, thirty (30) days to
the month.
6.4 Taxes
Seller's Allocable Percentage of general real estate
taxes and special assessments relating to the Property
payable during the year in which Closing occurs shall be
prorated as of the Closing Date. If closing shall occur
before the actual taxes and special assessments payable
during such year are known, the apportionment of taxes shall
be upon the basis of taxes for the Property payable during
the immediately preceding year, provided that, if the taxes
and special assessments payable during the year in which
closing occurs are thereafter determined to be more or less
than the taxes payable during the preceding year (after any
appeal of the assessed valuation thereof is concluded),
Seller and Purchaser promptly (but no later than
December 31, 1996 except in the case of an ongoing tax
protest) shall adjust the proration of such taxes and
special assessments and Seller or Purchaser, as the case may
be, shall pay to the other Seller's Allocable Percentage of
any amount required as a result of such adjustment and this
covenant shall not merge with the deed delivered hereunder
but shall survive the Closing.
6.5 In General
Any other costs or charges of closing this transaction
not specifically mentioned in this Agreement shall be paid
and adjusted in accordance with local custom in LosEAngeles
County, California.
6.6 Purpose and Intent
Except as expressly provided herein, the purpose and
intent as to the provisions of prorations and apportionments
set forth in this Section 6 and elsewhere in this Agreement
is that Seller shall bear Seller's Allocable Percentage of
the expenses of ownership and operation of the Property and
shall receive Seller's Allocable Percentage of the income
therefrom accruing through midnight at the end of the day
preceding the Closing and Purchaser shall bear all such
expenses and receive all such income accruing thereafter.
7. Damage, Destruction or Condemnation
7.1 Material Event
If, after the Approval Date but prior to Closing,
fifteen percent (15%) or more of the net rentable area of
the building(s) or of the parking spaces on the Property or
all access to the Property are rendered completely
untenantable, or are destroyed or taken under power of
eminent domain, Purchaser may elect to terminate this
Agreement by giving written notice of its election to Seller
within fourteen (14) days after receiving notice of such
destruction or taking. If Purchaser does not give such
written notice within such fourteen (14) day period, this
transaction shall be consummated on the date and at the
Purchase Price provided for in Section 2, and Seller will
assign to Purchaser Seller's Allocable Percentage of the
physical damage proceeds of any insurance policy(ies) or
condemnation awards payable to the Partnership or the
Tenants-In-Common as a result of any such damage or
destruction or condemnation up to the amount of the Purchase
Price (the "Seller's Proceeds").
7.2 Immaterial Event
If, after the Approval Date but prior to Closing, less
than fifteen percent (15%) of the net rentable area of the
buildings or of the parking spaces on the Property are
rendered completely untenantable or are destroyed, or are
taken under power of eminent domain, Purchaser shall close
this transaction on the date and at the Purchase Price
agreed upon in Section 2, and Seller will assign to
Purchaser the Seller's Proceeds.
7.3 Termination and Return of Deposit
If either party elects to terminate this Agreement
pursuant to this Section 7, and if Purchaser is not, on the
date of such election, in default under the Agreement,
Seller shall promptly direct the Title Company to return the
Deposit to Purchaser.
8. Notices
Any notice required or permitted to be given hereunder
shall be deemed to be given when hand delivered or one (1)
business day after pickup by Xxxxx Air Freight, Airborne,
Federal Express, or similar overnight express service, in
either case addressed to the parties at their respective
addresses referenced below:
If to Seller: Haptel, Inc.
c/o OOConnor Realty Advisors, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
With a copy to: Xxxxxxxx & Xxxxxxxx
000 Xxxxxxxxxx Xxxxxx
XxxXXxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
If to Purchaser: Fidelity Partners, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to: Freed & Heinemann
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
or in each case to such other address as either party may
from time to time designate by giving notice in writing to
the other party.
9. Closing and Escrow
9.1 Escrow Instructions
Upon execution of this Agreement, the parties shall
deliver an executed counterpart of this Agreement to the
Title Company to serve as the instructions to the Title
Company as the escrow holder for consummation of the
transaction contemplated herein. Seller and Purchaser agree
to execute such additional and supplementary escrow
instructions as may be appropriate to enable the Title
Company to comply with the terms of this Agreement,
provided, however that in the event of any conflict between
the provisions of this Agreement and any supplementary
escrow instructions, the terms of this Agreement shall
prevail.
9.2 Seller's Deliveries
Seller shall deliver either at the Closing or by making
available at the Property, as appropriate, the following
original documents, each, executed and, if required,
acknowledged:
1. A grant deed to convey the TIC Interest, in the form
attached hereto as Exhibit 9.2.1, subject to the matters set
out in Section 3.4 and other matters subsequently approved
by Purchaser or Purchaser's counsel.
2. A xxxx of sale in the form attached hereto as Exhibit
9.2.2 conveying Seller's interest in the Personal Property.
3. (i) The Leases described in Section 1.1.5 which are
still in effect as of Closing and any new leases entered
into pursuant to Section 4.4; (ii) a current listing of any
tenant security deposits and prepaid rents held by the
Partnership or the Tenants-In-Common with respect to the
Property; and (iii) an assignment of SellerOs interest in
such leases, deposits, and prepaid rents by way of an
assignment and assumption agreement in the form attached
hereto as Exhibit 9.2.3.
4. (i) Copies of all contracts relating to the Property
which Purchaser has elected to assume or which are not
terminable by the Partnership or the Tenants-In-Common on or
before the Closing Date; and (ii) an assignment of Seller's
interest in such contracts to Purchaser by way of an
assumption agreement, in the form attached hereto as Exhibit
9.2.4.
5. An assignment of Seller's interest in and to all
transferable warranties and guarantees then in effect, if
any, with respect to the improvements located on the
Property or any repairs or renovations to such improvements
and Personal Property being conveyed hereunder, which
assignment is in the form attached hereto as Exhibit 9.2.5.
6. All books and records at the Property held by or for
the account of the Partnership or the Tenants-In-Common,
including without limitation, plans and specifications and
lease applications, as available.
7. An affidavit pursuant to the Foreign Investment and
Real Property Tax Act in the form attached hereto as Exhibit
9.2.7.
8. A California Franchise Tax Board Form 590-RE.
9.3 Purchaser's Deliveries
At the closing, Purchaser shall (i) pay Seller the
Purchase Price, subject to adjustment for the prorations as
provided herein; (ii) execute the agreements referred to in
Sections 9.2.3(iii) and 9.2.4(ii) and the ERISA certificate
attached hereto as Exhibit 9.3; and (iii) execute and
deliver to Seller a corporation authorization and incumbency
certificate in form and substance satisfactory to Seller and
SellerOs counsel.
9.4 (Intentionally Deleted)
9.5 Insurance
Seller shall terminate all policies of insurance
maintained by the Partnership or the Tenants-In-Common as of
noon on the Closing Date and Purchaser shall be responsible
for obtaining its own insurance thereafter.
9.6 Utility Service and Deposits
Seller shall be entitled to the return of Seller's
Allocable Percentage of any deposit(s) posted by the
Partnership or the Tenants-In-Common with any utility
company and Seller shall notify each utility company serving
the Property to terminate Seller's accounts of the
Partnership or the Tenants-In-Common, effective at noon on
the Closing Date.
9.7 Notice Letters
Within thirty (30) days after the Closing, Seller shall
provide to Purchaser copies of form letters to contractors
and utility companies serving the Property and tenants of
the Property, advising them of the sale of the TIC Interest
to Purchaser.
9.8 Post-Closing Collections
Purchaser shall use its best efforts following Closing
to collect and promptly remit to Seller Seller's Allocable
Percentage of the rents or other amounts due Seller for the
period prior to Closing. Purchaser shall apply such rents
or other amounts received, first for the account of
Purchaser to pay reasonable collection costs and for amounts
currently due to Purchaser; second, to Seller for any and
all amounts due to Seller for periods prior to Closing; and
the balance to be retained by Purchaser. Notwithstanding
the foregoing, Seller reserves the right after Closing to
proceed against any present or former tenants of the
Property for rents, additional charges or other sums due
from such tenants attributable to the period prior to the
Closing Date.
9.9 Reporting Requirements
Purchaser and Seller shall each deposit such other
instruments as are reasonably required by Title Company or
otherwise required to close the escrow and consummate the
purchase and sale of the TIC Interest in accordance with the
terms hereof, including, without limitation, an agreement
designating Title Company as the "Reporting Person" for the
transaction pursuant to Section 6045(e) of the Internal
Revenue Code and the regulations promulgated thereunder, and
executed by Seller, Purchaser and Title Company, in the form
attached hereto as Exhibit 9.9. Such agreement shall comply
with the requirements of Section 6045(e) of the Internal
Revenue Code and the regulations promulgated thereunder.
10. Default; Failure of Condition
10.1 Purchaser Default
If Purchaser shall become in breach of or default under
this Agreement and the breach or default continues beyond
the expiration of the cure period, if any, provided in
Section 11.6 hereof, the Deposit shall be retained by Seller
as liquidated damages, and both parties shall be relieved of
and released from any further liability hereunder except for
Purchaser's indemnity obligations and other obligations set
forth in Section 3.1.2 and Purchaser's obligations set forth
in Sections 3.8, 5.3 and 11.7 hereof. Seller and Purchaser
agree that the Deposit is a fair and reasonable amount to be
retained by Seller as agreed and liquidated damages in light
of Seller's removal of the TIC Interest from the market and
the costs incurred by Seller and shall not constitute a
penalty or a forfeiture.
Purchaser Seller
Initials /s/ JS /s/ JLD
10.2 Seller Default
If Seller shall refuse or fail to convey the TIC
Interest as herein provided for any reason other than (i) a
default by Purchaser and the expiration of the cure period,
if any, provided under Section 11.6 hereof, (ii) the
existence of a pending default (as defined in and
contemplated by Section 11.6) of Purchaser, or (iii) any
other provision of this Agreement which permits Seller to
terminate this Agreement or otherwise relieves Seller of the
obligation to convey the TIC Interest, Purchaser shall elect
as its sole remedy hereunder either to terminate the
Agreement and recover the Deposit plus an amount equal to
Purchaser's actual out-of-pocket costs in conducting its due
diligence investigations hereunder, not to exceed the sum of
Fifty Thousand Dollars ($50,000), or to enforce the Seller's
obligations to convey the TIC Interest, provided that no
such action in specific performance shall seek to require
the Seller to do any of the following: (a) change the
condition of the Property or restore the same after any fire
or other casualty; (b) subject to Section 10.3, below,
expend money or post a bond to remove a title encumbrance or
defect or correct any matter shown on a survey of the
Property; or (c) secure any permit, approval, or consent
with respect to the Property or Seller's conveyance of the
Tic Interest.
Purchaser Seller
Initials /s/ JS /s/ JLD
10.3 Failure of Condition
If prior to Closing Seller discloses to Purchaser or
Purchaser discovers that (i) title to the TIC Interest is
subject to defects, limitations or encumbrances other than
Permitted Encumbrances, or (ii) any representation or
warranty of Seller contained in this Agreement is or, as of
the Closing Date, will be untrue, then Purchaser shall
promptly give Seller written notice of its objection
thereto. In such event, Seller may elect to postpone the
Closing for thirty (30) days and attempt to cure such
objection, provided that Purchaser may not object to the
state of title of the TIC Interest on the basis of matters
set out in Section 3.4 above. The parties acknowledge and
agree that Seller shall have no obligation to cure any
objection. If Purchaser fails to waive the objection within
ten (10) days after notice from Seller that Seller will not
cure the objection, this Agreement will terminate
automatically and Seller shall promptly direct the Title
Company to return the Deposit to Purchaser, provided that
Purchaser shall not be in default hereunder, and neither
party shall have any liability to the other except for
PurchaserOs Indemnity Obligations and other obligations set
forth in SectionE3.1.2 and PurchaserOs obligations set forth
in Sections 3.8, 5.3 and 11.7 hereof. For the purposes of
this Agreement, any title defect, limitation or encumbrance
other than a Permitted Encumbrance shall be deemed cured if
a title company reasonably acceptable to Purchaser and
authorized to do business in the State of California will
agree to issue an owner's title insurance policy to
Purchaser for the Purchase Price, which policy takes no
exception for such defect, limitation or encumbrance and is
issued for no additional premium or for an additional
premium if Seller agrees to pay such additional premium upon
Closing.
11. Miscellaneous
11.1 Entire Agreement
This Agreement, together with the Exhibits attached
hereto, all of which are incorporated by reference, is the
entire agreement between the parties with respect to the
subject matter hereof, and no alteration, modification or
interpretation hereof shall be binding unless in writing and
signed by both parties.
11.2 Severability
If any provision of this Agreement or application to any
party or circumstances shall be determined by any court of
competent jurisdiction to be invalid and unenforceable to
any extent, the remainder of this Agreement or the
application of such provision to such person or
circumstances, other than those as to which it is so
determined invalid or unenforceable, shall not be affected
thereby, and each provision hereof shall be valid and shall
be enforced to the fullest extent permitted by law.
11.3 Applicable Law
This Agreement shall be construed and enforced in
accordance with the laws of the State of California.
11.4 Assignability
Purchaser may not assign this Agreement without first
obtaining Seller's written consent; provided, however, that
Purchaser shall be entitled to assign this Agreement at any
time without Seller's consent to a partnership or limited
liability company in which Purchaser or a partnership or
limited liability company controlled by Purchaser is the
managing general partner or manager, as appropriate; and,
provided further, that Purchaser shall be entitled to freely
assign this Agreement without Seller's consent after the
Approval Date and the delivery of the Additional Deposit to
Title Company. Any assignment in contravention of this
provision shall be void. No assignment shall release the
Purchaser herein named from any obligation or liability
under this Agreement. Any permitted assignee shall be
deemed to have made any and all representations and
warranties made by Purchaser hereunder, as if the assignee
were the original signatory hereto.
11.5 Successors Bound
Subject to Section 11.4 above, this Agreement shall be
binding upon and inure to the benefit of Purchaser and
Seller and their successors and permitted assigns.
11.6 Breach
Should either party be in breach of or default under or
otherwise fail to comply with any of the terms of this
Agreement, except as otherwise provided in this Agreement,
the complying party shall have the option to cancel this
Agreement upon ten (10) days written notice to the other
party of the alleged breach and failure by such other party
to cure such breach within such ten (10) day period. The
non-defaulting party shall promptly notify the defaulting
party in writing of any alleged default upon obtaining
knowledge thereof. The Closing Date shall be extended to
the extent necessary to afford the defaulting party the full
ten-day period within which to cure such default; provided,
however, that the failure or refusal by a party to perform
on the scheduled Closing Date (except in respect of a
Pending Default by the other party) shall be deemed to be an
immediate default without the necessity of notice; and
provided further, that if the Closing Date shall have been
once extended as a result of default by a party, such party
shall be not be entitled to any further notice or cure
rights with respect to that or any other default. For
purposes of this SectionE11.6, a OPending DefaultO shall be
a default for which (i) written notice was given by the non-
defaulting party, and (ii) the cure period extends beyond
the scheduled Closing Date.
11.7 No Public Disclosure
Purchaser shall make no public disclosure of the terms
of this transaction without the prior written consent of
Seller, except that Purchaser may discuss the transaction in
confidence with Purchaser's advisors, consultants, partners
and lenders and with the Leasing Broker.
11.8 Captions
The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way
define, limit or describe the scope of this Agreement or the
scope or content of any of it provisions.
11.9 Attorneys' Fees
If either party hereto fails to perform any of its
obligations under this Agreement or if any dispute arises
between the parties hereto concerning the meaning or
interpretation of any provision of this Agreement, then the
defaulting party or the party not prevailing in such
dispute, as the case may be, shall pay any and all costs and
expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and
reasonable attorneys' fees and disbursements. Any such
attorneys' fees and other expenses incurred by either party
in enforcing a judgment in its favor under this Agreement
shall be recoverable separately from and in addition to any
other amount included in such judgment, and such attorneysO
fees obligation is intended to be severable from the other
provisions of this Agreement and to survive and not be
merged into any such judgment.
11.10 No Partnership
Nothing contained in this Agreement shall be construed
to create a partnership or joint venture between the parties
or their successors in interest.
11.11 Time of Essence
Time is of the essence in this Agreement.
11.12 Counterparts
This Agreement may be executed and delivered in any
number of counterparts, each of which so executed and
delivered shall be deemed to be an original and all of which
shall constitute one and the same instrument.
11.13 Recordation
Purchaser and Seller agree not to record this Agreement
or any memorandum hereof.
11.14 Proper Execution
The submission by Seller to Purchaser of this Agreement
in unsigned form shall be deemed to be a submission solely
for Purchaser's consideration and not for acceptance and
execution. Such submission shall have no binding force and
effect, shall not constitute an option, and shall not confer
any rights upon Purchaser or impose any obligations upon
Seller irrespective of any reliance thereon, change of
position or partial performance. The submission by Seller
of this Agreement for execution by Purchaser and the actual
execution and delivery thereof by Purchaser to Seller shall
similarly have no binding force and effect on Seller unless
and until Seller shall have executed this Agreement and the
Initial Deposit shall have been received by the Title
Company and a counterpart thereof shall have been delivered
to Purchaser.
11.15 Tax Protest
If as a result of any tax protest or otherwise any
refund or reduction of any real property or other tax or
assessment relating to the Property during the period for
which, under the terms of this Agreement, Seller is
responsible, Seller shall be entitled to receive or retain
Seller's Allocable Percentage of such refund or the benefit
of such reduction, less equitable prorated costs of
collection.
11.16 No Merger
The obligations contained herein shall not merge with
the transfer of title to the TIC Interest but shall remain
in effect until fulfilled.
11.17 Actual Knowledge
Whenever a representation or warranty is made in this
Agreement on the basis of the actual knowledge of Seller,
such representation and warranty is made with the exclusion
of any facts disclosed to or otherwise known by Purchaser,
and is made solely on the basis of the actual, as
distinguished from implied, imputed and constructive,
knowledge on the date that such representation or warranty
is made, without inquiry or investigation or duty, of
Xxxxx X. Xxxxxxxx ("Xxxxxxxx"), the officer of X'Xxxxxx
Realty Advisors, Inc. with day to day responsibility for the
operation of the Property, without attribution to Davidson
of facts and matters otherwise within the personal knowledge
of any other officers or employees of Seller or third
parties, including but not limited to tenants and the
property manager of the Property.
11.18 Survival and Limitation of Representations and Warranties
The representations and warranties set forth in
Section 5.1 shall survive the Closing but written
notification of any claim arising therefrom must be received
by Seller within nine (9) months of the Closing Date or such
claim shall be forever barred and Seller shall have no
liability with respect thereto.
11.19 Limited Liability
The obligations of Seller are intended to be binding
only on the TIC Interest prior to Closing and on the
proceeds of the sale of the TIC Interest after the Closing,
and shall not be personally binding upon, nor shall any
resort be had to, Seller or the private properties of any of
its partners, trustees, officers, directors or shareholders
(except for private properties acquired after the Closing
with the proceeds of the sale of the TIC Interest).
11.20 Execution of HPP Agreement
Promptly after the execution of this Agreement,
Purchaser shall attempt to negotiate the terms of a purchase
and sale agreement with HPP (the "HPP Agreement") pursuant
to which Purchaser shall acquire the tenancy-in-common
interest of HPP in the Property. If for any reason
Purchaser and HPP fail to enter into the HPP Agreement on or
before December 1, 1996, then Seller and Purchaser shall
each have the right to terminate this Agreement by written
notice to the other party, which notice shall be given, if
at all, not later than December 5, 1996.
11.21 Time to Execute and Deliver
This Agreement shall be void if one fully executed copy
is not received by Seller on or before 5:00 p.m. California
time on November 20, 1996. Seller will accept an executed
signature page transmitted by facsimile within the time
period set forth above; provided that this Agreement will be
void unless Seller receives one fully executed original
within one business day thereafter.
In Witness Whereof, Purchaser and Seller have executed
this Agreement on the date set forth below, effective as of
the date set forth above.
Seller: Haptel, Inc.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
Purchaser: Fidelity Partners, Inc.
a California corporation
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx
President
The Company hereby agrees to furnish supplementally the
omitted exhibits and schedules to the Commission upon
request.
