SALE, PURCHASE AND ESCROW AGREEMENT BETWEEN HOLLYWOOD WAY OFFICE VENTURES, LLC (“Seller”) AND POINT.360 (“Purchaser”) AND COMMONWEALTH LAND TITLE INSURANCE COMPANY (“Escrow Agent”)
BETWEEN
HOLLYWOOD
WAY OFFICE VENTURES, LLC
(“Seller”)
AND
(“Purchaser”)
AND
COMMONWEALTH
LAND TITLE INSURANCE COMPANY
(“Escrow
Agent”)
This
Sale, Purchase And Escrow Agreement (this “Agreement”), dated as of May 19, 2008
(the “Agreement Date”), is made by and among POINT.360, a California corporation
(“Purchaser”), and HOLLYWOOD WAY OFFICE VENTURES, LLC, a California limited
liability company (“Seller”), and constitutes (i) a contract of sale and
purchase between Seller and Purchaser and (ii) an escrow agreement among
Seller, Purchaser and COMMONWEALTH LAND TITLE INSURANCE COMPANY, as escrow
agent
(“Escrow Agent”), the consent of which appears at the end hereof.
ARTICLE
1
RECITALS
1.1. Real
Property.
Seller
owns and holds fee title to that certain real property located in the City
of
Burbank, California as more particularly described in Exhibit A attached hereto
and made a part hereof (the “Land”), together with (1) all buildings,
improvements, fixtures, pools, and similar structures located on the Real
Property consisting generally of a two-story office building with approximately
32,000 rentable square feet, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
and a vacant parcel currently used for parking at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (the “Improvements”), (2) all rights, benefits, privileges,
easements, tenements, herditaments, rights-of-way and other appurtenances
thereon or in any way appertaining thereto, including all mineral rights,
development rights, air and water rights and (3) all strips and gores and
any land lying in the bed of any street, road or alley, open or proposed,
adjoining such Land (collectively, the “Property”).
1.2. Lease
of Property.
Purchaser, as successor in interest to VDI Media, a California corporation,
has
leased the Property from Seller, as successor in interest to Al Post, Inc.,
a
California corporation, pursuant to that certain Building Lease dated June
11,
1998 (“Lease”) that expires on June 10, 2008.
1.3. Purchase
and Sale.
Seller
desires to sell and Purchaser desires to purchase all of Seller’s right, title
and interest in and to the Property, upon the terms and covenants and subject
to
the conditions set forth below.
1.4. Lease
Extension.
In
anticipation of the consummation of the transaction contemplated by this
Agreement and concurrently with the execution and delivery of this Agreement,
the parties are entering into a one (1) year extension of the Lease (“Lease
Extension”).
ARTICLE
2
PURCHASE
PRICE
2.1. Price.
In
consideration of the covenants herein contained, Seller hereby agrees to sell
and Purchaser hereby agrees to purchase the Property for a total purchase price
of EIGHT MILLION DOLLARS ($8,000,000) (the “Purchase Price”), subject to
adjustment as provided in Section 6.2 below, which shall be paid by Purchaser
as
follows:
2
2.1.1 Deposit.
Purchaser will deliver within two (2) business days after the Effective Date,
to
Escrow Agent the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000) (the “Deposit”)
and upon the end of the Investigation Period will become non-refundable and
will
be immediately released to Seller.
2.1.2 Payment
of Purchase Price.
Purchaser shall, at or before the Closing (as defined in Section 6.1), deliver
to Escrow Agent, by bank wire transfer of immediately available funds, a sum
equal to the balance of the Purchase Price. The balance of the Purchase Price
received by Seller at Closing shall be adjusted to reflect prorations and other
adjustments pursuant to Section 6.2 and Section 7.1.
ARTICLE
3
CONDITIONS
TO THE PARTIES’ OBLIGATIONS
3.1. Conditions
to Purchaser’s Obligation to Purchase.
Purchaser’s obligation to purchase is expressly conditioned upon the
satisfaction of each of the following conditions precedent which are for
Purchaser’s sole benefit, provided that Purchaser may, in its sole discretion,
elect to waive any such conditions in writing:
3.1.1 Investigation
Period.
Purchaser shall have affirmatively approved of the results of its investigation
of the Property during the Investigation Period (as hereinafter
defined).
3.1.2 Performance
by Seller.
Performance in all material respects of the obligations and covenants of, and
deliveries required of, Seller hereunder.
3.1.3 Delivery
of Title and Possession.
Delivery at the Closing of (i) the Deed (as defined in Section 4.2.1) and
(ii) possession as provided in Section 15.1.
3.1.4 Title
Insurance.
Delivery at the Closing of the standard current form of California Land Title
Association owner's policy of title insurance (the “Title Policy”), or an
irrevocable commitment to issue the same, with liability in the amount of the
Purchase Price issued by United Title Insurance Company (the “Title Company”),
insuring that fee title to the Real Property vests in Purchaser subject to
the
Permitted Encumbrances (as defined in Section 4.2.1). (At its option, Purchaser
may direct the Title Company to an ALTA extended coverage policy or to issue
additional title insurance endorsements if Purchaser pays for the extra cost
of
such coverage and/or additional endorsements, provided that the Title Company's
failure to issue any such additional endorsements shall not affect Purchaser's
obligations under this Agreement).
3.1.5 Seller’s
Representations.
The
representations and warranties by Seller set forth in Section 11.1 being true
and correct in all material respects as of the Closing except as modified by
notice (in accordance with Section 11.1) to which Purchaser does not object
in
writing by the later of (i) three (3) business days after receipt thereof
or (ii) the end of the Investigation Period.
3.1.6 No
Material Damage or Condemnation.
No
material amount of damage or condemnation proceeding shall be pending or
threatened against the Property.
3.2. Conditions
to Seller’s Obligation to Sell.
Seller’s obligation to sell is expressly conditioned upon each of the following
conditions precedent which are for Seller’s sole benefit, provided that Seller
may, in its sole discretion, elect to waive any such conditions in
writing:
3
3.2.1 Performance
by Purchaser.
Performance in all material respects of the obligations and covenants of, and
deliveries required of, Purchaser hereunder.
3.2.2 Receipt
of Purchase Price.
Receipt
of the Purchase Price and any adjustments due Seller under ARTICLE 7 and Section
6.2 at the Closing in the manner herein provided.
3.2.3 Purchaser’s
Representations.
The
representations and warranties by Purchaser set forth in Section 11.2 being
true
and correct in all material respects as of the Closing.
ARTICLE
4
DELIVERIES
4.1. Purchaser’s
Deliveries.
Purchaser shall, at or before the Closing, deliver to Escrow Agent each of
the
following:
4.1.1 Closing
Statement.
An
executed settlement statement reflecting the prorations and adjustments required
under ARTICLE 7.
4.1.2 Cash
-
Prorations.
The
amount, if any, required of Purchaser under ARTICLE 7.
4.1.3 Other
Documents.
Such
other documents and/or instruments as may be reasonably required to complete
the
purchase and sale of the Property.
4.2. Seller’s
Deliveries.
Seller
shall, at or before the Closing, deliver to Escrow Agent (or directly to
Purchaser if so specified below) each of the following:
4.2.1 Deed.
A
standard form grant deed with respect to the Real Property executed and
acknowledged by Seller (the “Deed”), pursuant to which Seller shall convey title
to the Real Property with the documentary transfer taxes shown on a separate
(non-recorded) declaration.
4.2.2 Assignment
and Assumption of Lease.
A
standard form of assignment and assumption of the Lease, as extended, pursuant
to which Seller shall assign the Lease to Purchaser and Purchaser shall assume
all landlord obligations thereunder.
4.2.3 Owner’s
Affidavit.
An
Owner’s Affidavit as reasonably required by the Title Company as a condition to
issue the Title Insurance required under this Agreement.
4.2.4 FIRPTA
Affidavit.
Four
executed copies of an affidavit in the form of Exhibit B with respect to the
Foreign Investment in Real Property Tax Act and the California FTB Form
593-C..
4.2.5 Closing
Statement.
An
executed settlement statement reflecting the prorations and adjustments required
under ARTICLE 7.
4.2.6 Cash
-
Prorations.
The
amount, if any, required of Seller under ARTICLE 7.
4.2.7 Seller’s
Certification.
A
certification executed by Seller affirming that all representations and
warranties of Seller contained herein are and remain true as of the
Closing.
4.2.8 Other
Documents.
Such
other documents and/or instruments as may be reasonably required to complete
the
purchase and sale of the Property.
4
4.3.
Failure
to Deliver.
The
failure of Purchaser or Seller to make any delivery required above by and in
accordance with this ARTICLE 4 which is not waived by the other party shall
constitute a default hereunder by Purchaser or Seller, as
applicable.
ARTICLE
5
INVESTIGATION
OF PROPERTY
5.1. Delivery
of Documents.
As used
herein the term “Effective Date” shall be May 19, 2008. As a condition precedent
to the effectiveness of this Agreement, the parties shall deliver to each other
executed counterparts of the Lease Extension concurrently with the delivery
of
the executed counterparts of this Agreement. The following materials shall
constitute the “Due Diligence Materials” which shall be delivered to Purchaser
as provided herein:
5.1.1 Preliminary
Title Report.
On or
before the Effective Date, a current preliminary title report covering the
Real
Property issued by United Title Insurance Company (an affiliate of the Title
Company), together with copies of all documents referred to as exceptions
therein (collectively, the “Title Report”). The Title Report will form the basis
of Title Company’s commitment to issue to Purchaser, as the proposed insured,
its regular CLTA or ALTA (as determined by Purchaser) Owner’s title insurance
policy (the “Owner’s Title Policy”) in the amount of the Purchase
Price.
5.1.2 Phase
I Environmental Report.
On or
before the Effective Date, Seller's Phase I Environmental Report dated January
9, 2007. Purchaser hereby acknowledges that Seller makes no representation
or
warranty with respect to the accuracy, completeness, conclusions or other
information contained in said report.
5.1.3 Natural
Hazard Disclosure Statement.
Seller
has ordered a current Natural Hazard Disclosure Statement as provided by
California Civil Code Section 1103.3 and will deliver a copy to Purchaser within
one (1) business day after receipt.
5.1.4 Existing
Survey.
Seller
has ordered a copy of the existing survey (“Existing Survey”) from ▇▇▇▇▇▇
Surveying & Mapping, Inc., (323.223.1011) and will deliver a copy to
Purchaser within one (1) business day after receipt.
5.2. Investigation
Period.
Purchaser shall have until 5:00 p.m. Pacific Time on the day that is twenty
(20)
days after the Effective Date to make the following investigations of the
Property (the “Investigation Period”).
5.2.1 Title
and Survey.
Review
title to the Property and notify Seller of any objections (the “Title
Objections”) with respect to the Title Report and Existing Survey not later than
fifteen (15) days after the Effective Date based on its review thereof. In
addition, notwithstanding any statements to the contrary, Purchaser shall have
three (3) business days after receipt of any update or supplement to the Title
Report and/or Existing Survey (each, a “Title Update”) to notify Seller of any
objections (also, “Title Objections”) to any matters reflected on a Title Update
first raised or materially and adversely altered in such Title Update. If
Purchaser does not timely give the applicable notice, such failure shall be
conclusively deemed to be full and complete approval of the Title Report,
Existing Survey or the Title Update, as applicable, and any matter disclosed
therein. If Purchaser gives notice of the unacceptability of any title matter,
Seller shall have four (4) business days after receipt thereof to notify
Purchaser that Seller (a) will cause or (b) elects not to cause any or all
Title
Objections disclosed therein to be removed or insured over by the Title Company.
Seller's failure to notify Purchaser within such four (4) business day period
as
to any Title Objection shall be deemed an election by Seller not to remove
or
have the Title Company insure over such Title Objection. If Seller notifies
or
is deemed to have notified Purchaser that Seller shall not remove nor have
the
Title Company insure over any or all of the Title Objections, Purchaser shall
have until three (3) business days after the actual or deemed election (as
the
case may be) not to remove or have the Title Company insure over such Title
Objection to (i) terminate this Agreement or (ii) waive such Title Objections
and proceed to closing without any abatement or reduction in the Purchase Price
on account of such Title Objections. If Purchaser does not timely give such
notice, Purchaser shall be deemed to have elected to object to such Title
Objections. The Closing shall be automatically extended as necessary to allow
for the expiration of the foregoing time periods plus one (1) business day.
If
Seller elects to attempt to cure any such matters disclosed in a Title Update
and timely objected to by Purchaser, Seller shall have the right, at its
election, to extend the date for Closing by a reasonable additional time to
effect such a cure, but in no event shall the Closing be extended for more
than
thirty (30) days.
5
5.2.2 Physical
Inspection of Property.
(i) Access.
Seller shall allow Purchaser and Purchaser’s engineers, architects or other
employees and agents reasonable access to the Property during normal business
hours for the limited purposes provided herein. Purchaser and its engineers,
architects and other employees and agents may exercise such access solely for
the purpose inspecting the physical condition of the Property and
conducting non-intrusive physical and environmental tests and inspections
thereof. PURCHASER SHALL NOT CONDUCT OR ALLOW ANY PHYSICALLY INTRUSIVE TESTING
OF, ON OR UNDER THE PROPERTY WITHOUT FIRST OBTAINING SELLER’S WRITTEN CONSENT
WHICH SHALL NOT BE UNREASONABLY CONDITIONED, DELAYED OR DENIED AS TO THE TIMING
AND SCOPE OF THE WORK TO BE PERFORMED AND THE PARTIES ENTERING INTO AN AMENDMENT
HERETO MEMORIALIZING SUCH SCOPE OF WORK AND ANY ADDITIONAL AGREEMENTS OF THE
PARTIES WITH RESPECT TO SUCH TESTING.
(ii) Insurance.
Purchaser agrees that it will be covered by not less than $1,000,000 commercial
general liability insurance (with a contractual liability endorsement, insuring
its indemnity obligation under this Agreement), insuring all activity and
conduct of Purchaser or anyone acting on its behalf while exercising such right
of access and naming Seller as insured.
(iii) Indemnification.
Purchaser shall indemnify, defend (with counsel reasonably satisfactory to
Seller), protect and hold harmless Seller and its agents and representatives
from and against any and all liability, loss, cost, damage or expense
(including, without limitation, reasonable attorney’s fees and costs) that
Seller or such agents and representatives may sustain or incur by reason of
or
in connection with any inspection made by Purchaser or Purchaser’s agents or
contractors relating to or in connection with the Property (not including
uncovering of existing conditions), or entries by Purchaser or its agents or
contractors onto the Property. Notwithstanding any provision to the contrary
in
this Agreement, the indemnity obligations of Purchaser under this Agreement
shall survive any termination of this Agreement or the delivery of the deed
and
the transfer of title pursuant to this Agreement.
(iv) Notice
of
Tests. Purchaser agrees to give Seller two (2) business day prior notice of
its
intent to conduct any inspections or tests so that Seller will have the
opportunity to have a representative present during any such inspection or
test,
the right to do which Seller expressly reserves. Purchaser agrees to cooperate
with any reasonable request by Seller in connection with the timing of any
such
inspection or test.
(v) No
Expense to Seller. Purchaser agrees that any inspection, test or other study
or
analysis of the Property shall be performed at Purchaser’s expense and in strict
accordance with applicable law.
(vi) Obligation
to Restore Property. Purchaser agrees at its own expense to promptly repair
or
restore the Property, or, at Seller’s option, to reimburse Seller for any repair
or restoration costs, if any inspection or test requires or results in any
damage to or alteration of its condition. The obligations set forth in this
Section (vi) shall survive the Closing and any termination of this Agreement.
5.2.3 General
Investigation.
In
addition, Purchaser shall have until the end of the Investigation Period to
make
such other investigations as Purchaser shall deem appropriate.
5.3. Effect
of Termination.
If
Purchaser determines not to proceed with the purchase of the Property, then
Purchaser shall, on or before the expiration of the Investigation Period, either
so notify Seller in writing or do nothing, in which case Purchaser shall be
deemed to have disapproved the Property and the Deposit and all accrued interest
therein, subject to any rights which Seller may have for reimbursement and/or
indemnity, shall be immediately returned to Purchaser and all further rights
and
obligations of the parties with respect to this Agreement shall cease and
terminate without any further liability of either party to the other (except
those obligations which are specifically provided to survive such termination
as
provided in this Agreement). If no notice of disapproval is delivered to Seller
on or before the end of the Investigation Period, Purchaser shall be deemed
to
have disapproved of the Property. Thereafter, the Deposit and all accrued
interest therein, subject to any rights which Seller may have for reimbursement
and/or indemnity, shall be immediately returned to Purchaser and all further
rights and obligations of the parties with respect to this Agreement shall
cease
and terminate without any further liability of either party to the other (except
those obligations which are specifically provided to survive such termination
as
provided in this Agreement). Until such time, Purchaser shall diligently pursue
its investigation of the Property. If Purchaser affirmatively approves of the
Property, the Deposit shall become nonrefundable (subject to the remaining
conditions precedent to Purchaser’s obligation to close) and shall be
immediately released to Seller.
5.4. No
Obligation to Cure.
Except
as otherwise provided in this Agreement and except for the removal of monetary
liens on the Property (but excluding bonds, assessments or similar liens payable
in installments), Seller shall not be required to render its title marketable
or
to remove or correct any exception or matter disapproved by Purchaser or to
spend any money or incur any expense in order to do so. Notwithstanding the
foregoing, Seller shall provide Title Company with a mechanics’ lien indemnity
and owner’s affidavit in forms required by Title Company.
6
ARTICLE
6
THE
CLOSING
6.1. Date
and Manner of Closing.
The
escrow for the purchase and sale of the Property shall close (the “Closing”) not
later than ten (10) days following the end of the Investigation
Period.
6.2. Option
to Extend Closing Date.
Purchaser shall have the option to extend the Closing Date for six (6) thirty
(30) day periods on the following terms and conditions: (i) Purchaser shall
give
Seller notice of its election to extend the Closing Date not less than five
(5)
business days prior to the then scheduled Closing Date and (ii) the Purchase
Price will be adjusted pursuant to Schedule 1 attached hereto.
ARTICLE
7
PRORATION,
FEES, COSTS AND ADJUSTMENTS
7.1. Prorations.
The
only
items to be prorated between Purchaser and Seller are the rents due under the
Lease and insurance premiums paid by Seller as landlord under the Lease and
the
amounts paid by Purchaser to Seller on account of such insurance premiums.
For
purposes of calculating prorations, Buyer shall be deemed to be in title to
the
Property, and therefore entitled to the income and responsible for expenses,
for
the entire day upon which the Close of Escrow occurs. Seller agrees to prepare
a
schedule of tentative prorations prior to the Closing Date with respect to
the
Property. Such prorations shall be paid by Buyer to Seller (if the prorations
result in a net credit to the Seller) or by Seller to Buyer (if the prorations
result in a net credit to the Buyer) at the Close of Escrow. A copy of the
schedule of prorations and the other debits and credits which may be required
pursuant to Sections 7.2 and 7.3 hereof as agreed upon by Buyer and Seller
shall
be delivered to Escrow Holder prior to the Close of Escrow.
7.2. Real
Property Tax Refunds.
The
Seller is currently processing a refund of real property taxes relating to
the
Property with the County of Los Angeles. Promptly upon receipt of any such
refunds, Seller shall pay over all such refund to Purchaser. Seller’s obligation
to pay over such refunds shall survive the Closing and shall continue as long
as
any refunds shall remain outstanding.
7.3. Security
Deposit.
Seller
shall be debited and Purchaser shall be credited with the amount of the security
deposit held by Seller on account of the Lease.
7.4. Seller’s
Closing Costs.
Seller
shall pay (i) one half of Escrow Agent’s escrow fee or escrow termination
charge, (ii) the premium for a standard coverage policy of title insurance
issued by United Title Insurance Company, (iii) any applicable transfer
taxes, and (iv) Seller’s own attorneys’ fees.
7.5. Purchaser’s
Closing Costs.
Purchaser shall pay (i) one half of Escrow Agent’s escrow fee or escrow
termination charge, (ii) the additional premium for ALTA Extended coverage
for the Title Policy, (iii) the cost of any title insurance endorsements
ordered by Purchaser, (iv) any costs incurred in connection with
Purchaser’s investigation of the Property pursuant to ARTICLE 5, including the
cost of any new environmental assessment commissioned by Purchaser and the
cost
of any survey and (v) Purchaser’s own attorneys’ fees.
7
Recording
costs and similar Closing costs shall be apportioned in accordance with the
custom for commercial real estate transactions in the county where the Property
is located.
ARTICLE
8
DISTRIBUTION
OF FUNDS AND DOCUMENTS
8.1. Delivery
of the Purchase Price.
At the
Closing, Escrow Agent shall deliver the Purchase Price, as adjusted by those
prorations set forth in Article 7 above, to Seller, and the transaction shall
not be considered closed until such delivery occurs.
8.2. Other
Monetary Disbursements.
Escrow
Agent shall, at the Closing, hold for personal pickup or arrange for wire
transfer, (i) to Seller, or order, as instructed by Seller, all sums and
any proration or other credits to which Seller is entitled and less any
appropriate proration or other charges and (ii) to Purchaser, or order, any
excess funds therefore delivered to Escrow Agent by Purchaser and all sums
and
any proration or other credits to which Purchaser is entitled and less any
appropriate proration or other charges.
8.3. Recorded
Documents.
Escrow
Agent shall cause the Deed and any other documents that Seller or Purchaser
desires to record to be recorded with the appropriate county recorder and,
after
recording, returned to the grantee, beneficiary or person acquiring rights
under
said document or for whose benefit said document was required.
8.4. Documents
to Purchaser.
Escrow
Agent shall at the Closing (except as otherwise provided) deliver by overnight
express delivery to Purchaser the following:
(i) one
conformed copy of the Deed;
(ii) one
original of the Assignment of Leases;
(iii) two
originals of the FIRPTA Affidavit and the FTB Form 593-C;
(iv) two
originals of Seller’s certification as to its representations and
warranties;
(v) one
original of the Closing Statement; and
(vi) one
original of the Title Policy (to be delivered within a reasonable time after
the
Closing).
8.5. Documents
to Seller.
Escrow
Agent shall at the Closing (except as otherwise provided) deliver by overnight
express delivery to Seller’s counsel, the following:
(i) one
conformed copy of the Deed;
(ii) one
original of the Assignment of Leases;
two
originals of the FIRPTA Affidavit and the FTB Form 593-C;
(iii) one
original of the Closing Statement; and
(iv) a
copy of
the Title Policy (to be delivered within a reasonable time after the
Closing).
8.6. All
Other Documents.
Escrow
Agent shall at the Closing deliver by overnight express delivery, each other
document received hereunder by Escrow Agent to the person acquiring rights
under
said document or for whose benefit said document was required.
8
ARTICLE
9
RETURN
OF DOCUMENTS AND FUNDS UPON TERMINATION
9.1. Return
of Seller’s Documents.
If
escrow or this Agreement is terminated for any reason, Purchaser shall, within
five (5) business days following such termination, deliver to Seller all
documents and materials relating to the Property previously delivered to
Purchaser by Seller and copies of all property condition, environmental
assessment and seismic reports obtained by Purchaser from third parties in
connection with the Property and Purchaser’s investigation thereof. Such items
shall be delivered without representation or warranty as to accuracy or
completeness and without liability of Purchaser to Seller with respect thereto
and with no right of Seller to rely thereon without the consent of the third
party. Escrow Agent shall deliver all documents and materials deposited by
Seller and then in Escrow Agent’s possession to Seller and shall destroy any
documents executed by both Purchaser and Seller. Upon delivery by Escrow Agent
to Seller (or such destruction, as applicable) of such documents and materials,
Escrow Agent’s obligations with regard to such documents and materials under
this Agreement shall be deemed fulfilled and Escrow Agent shall have no further
liability with regard to such documents and materials to Seller or
Purchaser.
9.2. Return
of Purchaser’s Documents.
If
escrow or this Agreement is terminated for any reason, Escrow Agent shall
deliver all documents and materials deposited by Purchaser and then in Escrow
Agent’s possession to Purchaser and shall destroy any documents executed by both
Purchaser and Seller. Upon delivery by Escrow Agent to Purchaser (or such
destruction, as applicable) of such documents and materials, Escrow Agent’s
obligations with regard to such documents and materials under this Agreement
shall be deemed fulfilled and Escrow Agent shall have no further liability
with
regard to such documents and materials to Seller or Purchaser.
9.3. Deposit.
If
escrow or this Agreement is terminated for any reason other than
(i) Seller’s default, (ii) a failure of a condition precedent for the
benefit of Purchaser or (iii) pursuant to Purchaser’s rights of termination
pursuant to ARTICLE 12, then the Deposit shall be retained by Seller. In the
event of any default by Seller, a failure of a condition precedent specified
in
Section 3.1 or termination pursuant to ARTICLE 12 the Deposit shall be returned
to Purchaser.
9.4. No
Effect on Rights of Parties;
Survival. The return of documents and monies as set forth above shall not affect
the right of either party to seek such legal or equitable remedies as such
party
may have under ARTICLE 10 with respect to the enforcement of this Agreement.
The
obligations under this ARTICLE 9 shall survive termination of this
Agreement.
ARTICLE
10
DEFAULT
10.1. Seller’s
Remedies.
IF, FOR
ANY REASON WHATSOEVER (OTHER THAN THE FAILURE OF A CONDITION SET FORTH IN
SECTION 3.1 AND OTHER THAN A TERMINATION OF THIS AGREEMENT PURSUANT TO SECTION
3.1, OR ARTICLE 12), PURCHASER FAILS TO COMPLETE THE ACQUISITION AS HEREIN
PROVIDED, PURCHASER SHALL BE IN BREACH OF ITS OBLIGATIONS HEREUNDER AND SELLER
SHALL BE RELEASED FROM ANY FURTHER OBLIGATIONS HEREUNDER. PURCHASER AND SELLER
HEREBY ACKNOWLEDGE AND AGREE THAT SELLER’S DAMAGES IN THE EVENT OF SUCH A BREACH
OF THIS AGREEMENT BY PURCHASER WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE,
THAT THE AMOUNT OF THE DEPOSIT IS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE
OF THE DAMAGES SELLER WOULD SUFFER IN THE EVENT THE TRANSACTION PROVIDED FOR
IN
THIS AGREEMENT FAILS TO CLOSE, AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE
CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT. PURCHASER AND SELLER
AGREE
THAT SELLER’S RIGHT TO RETAIN THE DEPOSIT SHALL BE THE SOLE REMEDY OF SELLER AT
LAW IN THE EVENT OF SUCH A BREACH OF THIS AGREEMENT BY PURCHASER.
NOTWITHSTANDING ANY OF THE FOREGOING, HOWEVER, THIS LIQUIDATED DAMAGES PROVISION
SHALL NOT LIMIT SELLER’S RIGHTS WITH RESPECT TO PURCHASER’S INDEMNITIES OF
SELLER, SELLER’S RIGHTS TO ALL DOCUMENTS AND REPORTS PURSUANT TO SECTION 9.1, OR
SELLER’S RIGHTS TO RECOVER ATTORNEYS’ FEES AND COURT COSTS PURSUANT TO SECTION
16.5 BELOW.
9
ACCEPTED
AND AGREED TO:
| /s/ ▇▇▇▇ ▇▇▇▇▇ | /s/ ▇▇▇▇ ▇▇▇▇▇ |
| Seller | Purchaser |
10.2. Purchaser’s
Remedies.
IN THE
EVENT THE CLOSE OF ESCROW AND THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED
THIS AGREEMENT DO NOT OCCUR BY REASON OF DEFAULT BY SELLER, PURCHASER AS ITS
SOLE REMEDY WILL BE ENTITLED TO EITHER (I) THE RETURN OF ITS DEPOSIT, ANY
INTEREST ACCRUED THEREON, OR TO (II) SEEK SPECIFIC PERFORMANCE OF THIS
AGREEMENT. EXCEPT IN AN ACTION FOR SPECIFIC PERFORMANCE WHICH MUST BE BROUGHT
WITHIN SIXTY (60) DAYS OF THE DATE OF SELLER’S DEFAULT. PURCHASER EXPRESSLY
WAIVES THE RIGHT TO RECORD A “LIS PENDENS” AGAINST THE PROPERTY PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE, SECTION 409, OR ANY OTHER PROVISION OF
APPLICABLE LAW.
ACCEPTED
AND AGREED TO:
| _______________________ | _______________________ |
| Seller | Purchaser |
ARTICLE
11
REPRESENTATIONS
AND WARRANTIES
11.1. Seller’s
Warranties and Representations.
The
matters set forth in this Section 11.1 constitute representations and warranties
by Seller which are now and (subject to matters contained in any notice given
pursuant to the next succeeding sentence) shall, in all material respects,
at
the Closing be true and correct. All representations and warranties contained
in
this Section 11.1 are qualified by any information contained in any documents
or
other material given to Purchaser by Seller in connection with its review of
matters pertaining to the Property pursuant to Section 3 above, including
any title report or Phase I Environmental Report or Natural Hazard Disclosure
Statement given to Purchaser. If Seller learns of, or has a reason to believe
that any of the representations and warranties contained in this ARTICLE 11
may
cease to be true prior to Closing, Seller shall give prompt notice to Purchaser
(which notice shall include copies of the instrument, correspondence, or
document, if any, upon which Seller’s notice is based). As used in this Section
11.1, the phrase “to the extent of Seller’s actual knowledge” shall mean the
actual knowledge of ▇▇▇▇ ▇▇▇▇▇, the managing member of Seller and there shall
be
no duty imposed or implied to investigate, inspect or audit any such matters.
To
the extent Purchaser has or acquires knowledge prior to the expiration of the
Investigation Period that these representations and warranties are inaccurate,
untrue or incorrect in any way, such representations and warranties shall be
deemed modified to reflect Purchaser’s knowledge. Seller’s representations and
warranties shall survive the Closing for a period of six (6)
months.
10
11.1.1 Broker.
Seller
shall indemnify and hold harmless Purchaser from any claims, costs, damages
or
liabilities (including attorneys’ fees) arising from any claim by any third
party for the payment of any brokerage commissions or finders fees (“Fees”)
based on any statement or agreement by Seller with such third party with respect
to the payment of any such Fees. Seller acknowledges that by separate agreement
it will pay a brokerage commission to ▇▇▇▇▇▇▇ ▇▇▇▇.
11.1.2 Organization.
Seller
has been duly formed, validly exists and is in good standing in the jurisdiction
of its formation and in the state in which the Property is located.
11.1.3 Power
and Authority.
Seller
has the legal power, right and authority and has obtained all necessary member
consents to enter into this Agreement and to consummate the transactions
contemplated hereby.
11.1.4 Contravention.
Seller
is not prohibited from consummating the transactions contemplated by this
Agreement by any law, regulation, agreement, instrument, restriction, order
or
judgment.
11.1.5 Litigation.
To the
best of Seller’s knowledge, no litigation or proceedings (including eminent
domain) are pending or threatened, relating to Seller or the Property or any
part thereof, which, if adversely determined, could individually or in the
aggregate have an adverse effect on title to or the use and enjoyment or value
of the Property or any portion thereof, or which could in any material way
interfere with the consummation of the transaction contemplated in this
Agreement.
11.1.6 Bankruptcy.
Seller
has not made a general assignment for the benefit of creditors, filed any
voluntary petition in bankruptcy or received notice of the filing of any
involuntary petition in bankruptcy against Seller.
11.1.7 Seller
Not a Foreign Person:
Seller
is not a “foreign person” as defined in Section 1445 of the Internal Revenue
Code of 1986, as amended (the “Code”) and any related regulations.
11.1.8 No
Liens.
Except
as may be shown in the title report to be delivered to Purchaser hereunder,
Seller has not received any notifications from any city, county, state, or
other
governmental authority having jurisdiction over the Property advising of any
intended public improvements that could result in a lien or charge against
the
Property.
11.1.9 No
Violations.
Seller
has not received a written notices from any governmental entity alleging that
the Property is in violation of any building and safety, seismic,
fire-life-safety or zoning law, ordinance or regulation relating to
Property.
11
11.2. Purchaser’s
Warranties and Representations.
The
matters set forth in this Section 11.2 constitute representations and warranties
by Purchaser which are now and shall, at the Closing, be true and correct.
Purchaser’s representations and warranties shall survive the Closing for a
period of six (6) months.
11.2.1 Broker.
Purchaser shall indemnify and hold harmless Seller from any claims, costs,
damages or liabilities (including attorneys’ fees) arising from any claim by any
third party for the payment of any brokerage commissions or finders fees
(“Fees”) based on any statement or agreement by Purchaser with such third party
with respect to the payment of any such Fees. Purchaser acknowledges that it
will be solely responsible for any brokerage commission or other fee due to
▇▇▇▇▇▇▇ & Wakefield.
11.2.2 Power
and Authority.
Purchaser has been duly organized, is validly existing and is in good standing
in the state of California, and is qualified to do business in the California.
This Agreement has been, and all documents executed by Purchaser which are
to be
delivered to Seller at Closing will be, duly authorized, executed and delivered
by Purchaser.
11.2.3 No
Violation of Law.
Purchaser represents and warrants to Seller that this Agreement and all
documents executed by Purchaser which are to be delivered to Seller at Closing
do not and at the time of Closing will not violate any provision of any
agreement or judicial order to which Purchaser is a party or to which Purchaser
is subject.
11.2.4 Not
Insolvent.
Purchaser represents and warrants to Seller that Purchaser has not (i) made
a general assignment for the benefit of creditors, (ii) filed any voluntary
petition in bankruptcy or suffered the filing of any involuntary petition by
Purchaser’s creditors, (iii) suffered the appointment of a receiver to take
possession of all, or substantially all, of Purchaser’s assets,
(iv) suffered the attachment or other judicial seizure of all, or
substantially all, of Purchaser’s assets, (v) admitted in writing its
inability to pay its debts as they come due, or (vi) made an offer of
settlement, extension or composition to its creditors generally.
11.2.5 Independent
Investigation.
Purchaser hereby represents and warrants (i) that it or its affiliates have
been
in continuous possession of the Property as the tenant for more than ten (10)
years and as such has been solely responsible for the repair and maintenance
of
the Property and its operating systems and the operation of the Property, (ii)
the consummation of this transaction shall constitute Purchaser’s acknowledgment
that it has independently inspected and investigated the Property and has made
and entered into this Agreement based upon such inspection and investigation
and
its own examination of the condition of the Property. Upon Closing, Purchaser
shall assume the risk that adverse matters, including but not limited to,
construction defects and adverse physical and environmental conditions, may
not
have been revealed by Purchaser’s investigations, and Purchaser, upon closing,
shall be deemed to have waived, relinquished and released Seller (and its
members and manager and its and their respective officers, investors, managers,
employees and agents) from and against any and all claims, demands, causes
of
action (including causes of action in tort or under any environmental law),
losses, damages, liabilities (whether based on strict liability or otherwise),
losses, damages, liabilities, costs and expenses (including attorneys’ fees and
court costs) of any and every kind or character, known or unknown, which
Purchaser might have asserted or alleged against Seller (and its members and
manager and its and their respective officers, directors, shareholders,
investors, managers, trustees, employees and agents) at any time by reason
of or
arising out of any latent or patent construction defects or physical conditions,
violations of any applicable laws (including, without limitation, any
environmental laws) and any and all other acts, omissions, events, circumstances
or matters regarding the Property.
11.2.6 Purchaser
Reliance.
Purchaser is experienced in and knowledgeable about the ownership and management
of real estate, and it has relied and will rely exclusively on its own
consultants, advisors, counsel, employees, agents, principals and/or studies,
investigations and/or inspections with respect to the Property, its condition,
value and potential. Purchaser agrees that, notwithstanding the fact that it
has
received certain information from Seller or its affiliates, agents or
consultants, Purchaser has relied upon and will continue to rely solely upon
its
own analysis and will not rely on any information provided by Seller or its
affiliates, agents or consultants, except as expressly set forth in Section
11.1.
12
11.2.7 No
Other Warranties and Representations.
Except
as specifically set forth in this ARTICLE 11, Seller has not made, nor
authorized anyone to make, any warranty or representation as to the Leases,
any
written materials delivered to Purchaser, the persons preparing such materials,
the present or future physical condition, development potential, zoning,
building or land use law or compliance therewith, the operation, income
generated by, or any other matter or thing affecting or relating to the Property
or any matter or thing pertaining to this Agreement. Purchaser expressly
acknowledges that no such warranty or representation has been made and that
Purchaser is not relying on any warranty or representation whatsoever other
than
as is expressly set forth in this ARTICLE 11. Purchaser shall accept the
Property “as is” and in its condition on the date of Closing subject only to the
express provisions of this Agreement.
11.2.8 Hazardous
Materials.
Purchaser hereby acknowledges and agrees that Seller makes no representation
or
warranty as to, and Purchaser waives and releases Seller from any present or
future claims, whether known or unknown, foreseeable or otherwise, arising
from
or relating to the presence or alleged presence of any hazardous materials
or
harmful or toxic substances (“Hazardous Materials”) 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, (iii) this Agreement, or
(iv) the common law. In furtherance and not limitation thereof, Purchaser
agrees that should any investigation, cleanup, remediation or removal of any
Hazardous Materials or harmful or toxic substances or other environmental
conditions on or related to the Property be required after the date of Closing,
Seller shall have no liability to Purchaser to perform or pay for such
investigation, clean-up, removal or remediation.
ARTICLE
12
CASUALTY
AND CONDEMNATION
12.1. Casualty
and Condemnation.
12.1.1 Uniform
Act. This
Agreement shall be governed by the Uniform Vendor and Purchaser Risk Act as
set
forth in Section 1662 of the California Civil Code (“Act”) as supplemented by
this ARTICLE 12. For purposes of the Act, (a) a taking by eminent domain of
a
portion of the Property shall be deemed to affect a “material part” of the
Property if the estimated value of the portion of the Property taken exceeds
ten
percent (10%) of the Purchase Price or materially adversely affects the
Property’s access or parking, and (b) the destruction of a “material part”
of the Property shall be deemed to mean an insured or uninsured casualty to
the
Property following Buyer’s inspection of the Property and prior to the Close of
Escrow having an estimated cost of repair which equals or exceeds twenty percent
(20%) of the Purchase Price.
12.1.2 Definitions.
The
phrase “estimated value” shall mean an estimate obtained from a M.A.I.
appraiser, who has at least live (5) years experience evaluating property
located in the County where the Property Is located, similar in nature and
function to that of the Property, selected by Seller and approved by Seller,
and
the phrase “estimated cost of repair” shall mean an estimate obtained from an
independent contractor selected by Seller and approved by Purchaser. Purchaser
shall not unreasonably withhold, condition or delay Purchaser’s approval under
this Section.
ARTICLE
13
CONDUCT
PRIOR TO CLOSING
13.1. Actions
Prohibited.
Seller
shall not, without the prior written approval of Purchaser, which approval
will
not be unreasonably withheld or delayed:
(i) make
any
material structural alterations or additions to the Property except as
(a) in the ordinary course of operating the Property, (b) required for
maintenance and repair or (c) required by the Lease or the
Contracts;
(ii) sell,
transfer, encumber or change the status of title of all or any portion of the
Property;
(iii) change
or
attempt to change, directly or indirectly, the current zoning of the Real
Property in a manner materially adverse to it; or
(iv) cancel,
amend or modify, in a manner materially adverse to the Property, any license
or
permit held by Seller with respect to the Property or any part thereof which
would be binding upon Purchaser after the Closing.
13
13.2. Assignment.
The
assignment of Seller’s rights hereunder, but not title to the Property, to an
intermediary for purposes of effecting an exchange pursuant to Section 1031
of
the Internal Revenue Code of 1986, as amended, shall not be deemed a violation
of this Section. Purchaser shall cooperate with such an exchange.
13.3. Confidentiality.
Seller
and Purchaser shall, prior to the Closing, maintain the confidentiality of
the
terms of this sale and purchase and shall not, except as required by law or
governmental regulation applicable to Seller or Purchaser, disclose the terms
of
this Agreement or of such sale and purchase to any third parties whomsoever
other than consultants, investors or prospective investors in Seller or
Purchaser or the principals of the Escrow Agent, Title Company and such other
persons whose assistance is required in carrying out the terms of this
Agreement. Prior to Closing, Purchaser shall not at any time issue a press
release or otherwise communicate with media representatives regarding this
sale
and purchase unless such release or communication has received the prior
approval of Seller. Purchaser agrees that, prior to Closing, all documents
and
information regarding the Property of whatsoever nature made available to it
by
Seller or Seller’s agents and the results of all tests and studies of the
Property (collectively, the “Proprietary Information”) are confidential and
Purchaser shall not disclose any Proprietary Information to any other person
except those assisting it with the analysis of the Property, and only after
procuring such person’s agreement to abide by these confidentiality
restrictions. This Section 13.3 shall survive the Closing or termination of
this
Agreement.
13.4. Right
to Cure.
If any
title defect or other matter which would entitle Purchaser to terminate this
Agreement shall first arise after Purchaser notifies Seller of its Title
Objections pursuant to Section 5.2.1 and prior to the Closing or if Seller
shall
have breached any representation or warranty hereunder, Seller may elect, by
written notice to Purchaser, to cure such title defect or other matter by
causing it to be removed or cure such breach of any representation or warranty
hereunder and Seller may adjourn the Closing for up to thirty (30) days to
do
so. Nothing contained in this Section 13.4 shall require Seller to cure any
such
title defect or other matter or to incur any liability or expense to do
so.
ARTICLE
14
NOTICES
14.1. Notices.
All
notices, demands, approvals, and other communications provided for in this
Agreement shall be in writing and shall be effective upon the earlier or the
following to occur: (a) when delivered to the recipient, (b) three (3) business
days after deposit in a sealed envelope in the United States mail, postage
prepaid by registered or certified mall, return receipt requested, (c) the
next
business day after deposit with a nationally recognized overnight courier,
addressed to the recipient as set forth below; or (d) upon delivery by facsimile
or email transmission, as evidenced by a fax or email confirmation receipt
provided that the same is transmitted during normal California business hours,
Monday through Friday. All notices shall be sent as follows:
| If to Purchaser, to: |
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇ ▇▇▇▇▇
Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
|
14
| With a copy to |
TroyGould
PC
|
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile:
310-201-4746
Email:
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
|
| If to Seller, to: | Hollywood Way Office Ventures, LLC |
|
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
|
| with a copy to: | ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. |
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
|
| If to Escrow Agent, to: | LandAmerica Commercial Services |
|
▇▇▇
▇. ▇▇▇▇▇
LandAmerica
Commercial Services
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
|
or
to
such other address or to such other person as any party shall designate to
the
others for such purpose in the manner hereinabove set forth. If the date on
which any notice to be given hereunder falls on a Saturday, Sunday or legal
holiday, then such date shall automatically be extended to the next business
day
immediately following such Saturday, Sunday or legal holiday.
ARTICLE
15
TRANSFER
OF TITLE AND POSSESSION
15.1. Transfer
of Possession.
Possession of the Property shall be transferred to Purchaser at the time of
Closing subject to the Permitted Encumbrances and the Lease.
15.2. Delivery
of Documents at Closing.
At the
time of Closing, Seller shall deliver to Purchaser originals or copies of any
additional documents, instruments or records in the possession of Seller or
its
agents which are necessary for the ownership and operation of the
Property.
15
ARTICLE
16
GENERAL
PROVISIONS
16.1. Captions.
Captions in this Agreement are inserted for convenience of reference only and
do
not define, describe or limit the scope or the intent of this Agreement or
any
of the terms hereof.
16.2. Exhibits.
All
exhibits referred to herein and attached hereto are a part hereof.
16.3. Entire
Agreement.
This
Agreement contains the entire agreement between the parties relating to the
transaction contemplated hereby and all prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged
herein.
16.4. Modification.
No
modification, waiver, amendment, discharge or change of this Agreement shall
be
valid unless the same is in writing and signed by the party against which the
enforcement of such modification, waiver, amendment, discharge or change is
or
may be sought; provided, however, any amendment hereto or to the Escrow
Instructions may be executed and distributed by facsimile and a copy of such
amendment executed and distributed by facsimile shall be deemed an original
for
all purposes.
16.5. Attorneys’
Fees.
Should
any party hereto employ an attorney for the purpose of enforcing or construing
this Agreement, or any judgment based on this Agreement, in any legal proceeding
whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief
or
other litigation, the prevailing party shall be entitled to receive from the
other party or parties thereto reimbursement for all reasonable attorneys’ fees
and all costs, whether incurred at the trial or appellate level, including
but
not limited to service of process, filing fees, court and court reporter costs,
investigative costs, expert witness fees and the cost of any bonds, whether
taxable or not, and such reimbursement shall be included in any judgment, decree
or final order issued in that proceeding. The “prevailing party” means the party
in whose favor a judgment, decree, or final order is rendered.
16.6. Governing
Law.
This
Agreement shall be construed and enforced in accordance with the laws of the
State of California.
16.7. Time
of Essence.
Time is
of the essence to this Agreement and to all dates and time periods set forth
herein. However, if this Agreement requires any act to be done on a date that
is
not a business day, such act or action shall be deemed to have been validly
done
or taken if done or taken on the next succeeding business day.
16.8. Assignment
by Purchaser.
Purchaser shall have the right to assign this Agreement to any affiliated entity
or any entity owned or controlled in common with Purchaser, provided that
Purchaser shall not be released from any of its obligations hereunder.
16.9. Severability.
If any
term, covenant, condition, provision or agreement herein contained is held
to be
invalid, void or otherwise unenforceable by any court of competent jurisdiction,
the fact that such term, covenant, condition, provision or agreement is invalid,
void or otherwise unenforceable shall in no way affect the validity or
enforceability of any other term, covenant, condition, provision or agreement
herein contained.
16.10. Successors
and Assigns.
All
terms of this Agreement shall be binding upon, inure to the benefit of and
be
enforceable by, the parties hereto and their respective legal representatives,
successors and assigns (subject to Section 16.8).
16
16.11. Interpretation.
Seller
and Purchaser acknowledge each to the other that both they and their counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the
drafting party shall not be employed in the interpretation of this Agreement
or
any amendments or exhibits hereto.
16.12. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed an original; such counterparts shall together
constitute but one agreement.
16.13. Recordation.
This
Agreement may not be recorded and any attempt to do so shall be of no effect
whatsoever.
16.14. Limitation
of Liability.
No,
officer, member, manager, investor, employee or agent of or consultant to Seller
shall be held to any personal liability hereunder, and no resort shall be
had
to
their property or assets for satisfaction of any claims hereunder or in
connection with the affairs of Seller. This Section 16.14 shall survive the
Closing and any termination of this Agreement forever; provided, however, if
Seller shall cease to exist or shall have distributed substantially all of
its
assets to its members, Purchaser may join the members of Seller in any cause
of
action brought against Seller to the extent of retrieving any distributions
made
to such members attributable to the transaction contemplated by this
Agreement.
16.15. Possession
of Seller.
As used
in this Agreement, the “possession” or “receipt” of a document, notice or
similar writing by Seller shall be deemed to be only the possession, receipt
or
notice of such document by Seller.
16.16. Business
Day.
As used
in this Agreement, “business day” shall be deemed to be any day other than a day
on which banks in the state where the Property is located shall be permitted
or
required to close. To the extent any notice delivery or other performance is
required on a day that is not a business day, such notice delivery or
performance shall be deemed to be required on the immediately following business
day.
16.17. Further
Assurances.
Each
party will, whenever and as often as it shall reasonably be requested to do
so
by the other party, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any and all such further conveyances, assignments,
approvals, consents and any and all other documents and do any and all other
acts as may be necessary to carry out the intent and purpose of this Agreement.
This Section 16.17 shall survive the Closing.
16.18. Waiver.
No
waiver by Purchaser or Seller of any of the terms or conditions of this
Agreement or any of their respective rights under this Agreement shall be
effective such waiver is in writing and signed by the party charged with the
waiver.
ARTICLE
17
ESCROW
AGENT DUTIES AND DISPUTES
17.1. Other
Duties of Escrow Agent.
Escrow
Agent shall not be bound in any way by any other agreement or contract between
Seller and Purchaser, whether or not Escrow Agent has knowledge thereof. Escrow
Agent’s only duties and responsibilities with respect to the Deposit shall be to
hold the Deposit and other documents delivered to it as agent and to dispose
of
the Deposit and such documents in accordance with the terms of this Agreement.
Without limiting the generality of the foregoing, Escrow Agent shall have no
responsibility to protect the Deposit and shall not be responsible for any
failure to demand, collect or enforce any obligation with respect to the Deposit
or for any diminution in value of the Deposit from any cause, other than Escrow
Agent’s gross negligence or willful misconduct. Escrow Agent may, at the expense
of Seller and Purchaser, consult with counsel and accountants in connection
with
its duties under this Agreement. Escrow Agent shall not be liable to the parties
hereto for any act taken, suffered or permitted by it in good faith in
accordance with the advice of counsel and accountants. Escrow Agent shall not
be
obligated to take any action hereunder that may, in its reasonable judgment,
result in any liability to it unless Escrow Agent shall have been furnished
with
reasonable indemnity satisfactory in amount, form and substance to Escrow
Agent.
17
17.2. Disputes.
Escrow
Agent is acting as a stakeholder only with respect to the Deposit. If there
is
any dispute as to whether Escrow Agent is obligated to deliver the Deposit
or as
to whom the Deposit is to be delivered, Escrow Agent shall not make any
delivery, but shall hold the Deposit until receipt by Escrow Agent of an
authorization in writing, signed by all the parties having an interest in the
dispute, directing the disposition of the Deposit, or, in the absence of
authorization, Escrow Agent shall hold the Deposit until the final determination
of the rights of the parties in an appropriate proceeding. Escrow Agent shall
have no responsibility to determine the authenticity or validity of any notice,
instruction, instrument, document or other item delivered to it, and it shall
be
fully protected in acting in accordance with any written notice, direction
or
instruction given to it under this Agreement and believed by it to be authentic.
If written authorization is not given, or proceedings for a determination are
not begun, within thirty (30) days after the date scheduled for the closing
of
title and diligently continued, Escrow Agent may, but is not required to, bring
an appropriate action or proceeding for leave to deposit the Deposit with a
court in the state where the Property is located pending a determination. Escrow
Agent shall be reimbursed for all costs and expenses of any action or
proceeding, including, without limitation, attorneys’ fees and disbursements
incurred in its capacity as Escrow Agent, by the party determined not to be
entitled to the Deposit. Upon making delivery of the Deposit in the manner
provided in this Agreement, Escrow Agent shall have no further liability
hereunder. In no event shall Escrow Agent be under any duty to institute, defend
or participate in any proceeding that may arise between Seller and Purchaser
in
connection with the Deposit.
17.3. Reports.
Escrow
Agent shall be responsible for the timely filing of any reports or returns
required pursuant to the provisions of Section 6045(e) of the Internal Revenue
Code of 1986, as amended (and any similar reports or returns required under
any
state or local laws) in connection with the closing of the transaction
contemplated by this Agreement.
[SIGNATURES
ON THE NEXT PAGE]
18
IN
WITNESS WHEREOF, this Agreement has been executed as of the date first set
forth
above.
| PURCHASER: | ||
| POINT.360, a California corporation | ||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇ | |
|
▇▇▇▇ ▇▇▇▇▇ |
||
| Executive Vice President & CFO | ||
| HOLLYWOOD WAY OFFICE VENTURES, LLC, | ||
| a California limited liability company | ||
| |
|
|
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇ | |
|
▇▇▇▇ ▇▇▇▇▇ |
||
| Managing Member | ||
19
CONSENT
AND AGREEMENT OF ESCROW AGENT
The
undersigned Escrow Agent hereby agrees to (i) accept the foregoing
Agreement, (ii) be escrow agent under said Agreement, and (iii) be
bound by said Agreement in the performance of its duties as escrow
agent.
| LANDAMERICA COMMERCIAL SERVICES | ||
| |
|
|
| By: | /s/▇▇▇ ▇. ▇▇▇▇▇ | |
|
Name: ▇▇▇ ▇. ▇▇▇▇▇, CSEO |
||
| Dated: May 19, 2008 | ||
20
EXHIBIT
A
Description
of Land
EXHIBIT
A
EXHIBIT
B
FIRPTA
Affidavit
Transferor’s
Certification of Non-Foreign Status
To
inform
_____________________________, _______________ limited liability company
(“Transferee”), that withholding of tax under Section 1445 of the Internal
Revenue Code of 1986, as amended (the “Code”), will not be required upon the
transfer of certain real property to Transferee by ____________________________
(“Transferor”), the undersigned hereby certifies the following on behalf of
Transferor:
1. Transferor
is not a foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and the Income Tax Regulations
promulgated thereunder);
2. Transferor’s
U.S. employer identification number is ___________ and
3. Transferor’s
office address is ___________________________________
Transferor
understands that this Certification may be disclosed to the Internal Revenue
Service by Transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under
penalty of perjury I declare that I have examined this Certification and to
the
best of my knowledge and belief it is true, correct and complete, and I further
declare that I have authority to sign this document on behalf of
Transferor.
Dated:
_________________, 2008
[Signature
blocks for Seller]
EXHIBIT
B
SCHEDULE
1
Price
Adjustment
If
Purchaser exercises its options to extend the Closing Date the Purchase Price
shall be adjusted as follows:
|
Option
|
Closing
Date
|
Purchase
Price
|
||
|
If
Purchaser exercises its first option to extend the Closing
Date
|
On
or before 60 days after the Effective Date
|
$8,000,000
|
||
|
If
Purchaser exercises its second option to extend the Closing
Date
|
On
or before 90 days after the Effective Date
|
$8.050,000
|
||
|
If
Purchaser exercises its third option to extend the Closing
Date
|
On
or before 120 days after the Effective Date
|
$8,100,000
|
||
|
If
Purchaser exercises its fourth option to extend the Closing
Date
|
On
or before 150 days after the Effective Date
|
$8,150,000
|
||
|
If
Purchaser exercises its fifth option to extend the Closing
Date
|
On
or before 180 days after the Effective Date
|
$8,200,000
|
||
|
If
Purchaser exercises its sixth option to extend the Closing
Date
|
On
or before 210 days after the Effective Date
|
$8,250,000
|
SCHEDULE
1