PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
To: First American Title
Insurance Company ("Escrow Agent") Escrow No. N971108G
000 Xxxx Xxxxx Xxxxxx Title Order No. OR-9733589
Xxxxx Xxx, Xxxxxxxxxx 00000 Title Officer: Xxxxx X. Xxxxx
Attn.: Xx. Xxxx Xxxxxxxx
Telephone: (000) 000-0000
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into and is effective as of the
29th day of April, 1997 (the "Effective Date"), by and between THE
MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a New York corporation
("Seller"), and ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership ("Buyer").
Recitals
A. Seller is the owner of the Property (as defined below).
B. Seller has agreed to sell the Property to Buyer, and
Buyer has agreed to purchase the Property from Seller,
such purchase and sale being made upon and subject to the
terms and conditions set forth in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual covenants set forth in this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Seller hereby agree as set forth
below.
1. Purchase and Sale of the Property. Seller agrees to
sell, assign, convey, and transfer to Buyer all of Seller's right,
title and interest in and to the following real and personal
property described in subsections (a) through (g) below
(collectively referred to herein as the "Property"), and Buyer
hereby agrees to purchase and accept the Property, and assume the
obligations in connection therewith, subject to and in accordance
with the terms and conditions contained in this Agreement:
(a) Land. Subject to general and special real estate
taxes and assessments, and all matters of record or apparent from
an inspection or survey, Seller's interest in that certain real
property located at 1, 4, 5, 6, 8, 10, 18, 20, 22, 24, 26, 28, and
00 Xxxxxxxxxxxx Xxxxx, in the City of La Palma, County of Orange,
State of California, which real property is more particularly
described in Exhibit "A" (the "Land").
(b) Improvements. Those certain fixtures and
improvements located on the Land and described on Exhibit "B"
attached hereto (collectively, the "Improvements"), including
several commercial, retail and/or industrial buildings, parking
structures, driveways, hardscaping, and related improvements,
together with fixtures attached thereto, it being understood and
agreed, however, that Buyer shall have no right, title or interest
in or to any of such fixtures and improvements which are the
property of the tenants of the Property (the "Tenants") under the
Leases (as defined below). The Land and the Improvements may be
collectively referred to herein as the "Real Property."
(c) Personalty. That certain tangible personal property
of Seller which is located on or in the Land or the Improvements
and which is described on Exhibit "B" attached hereto
(collectively, the "Personalty"), it being understood and agreed
that Buyer shall have no right, title or interest in or to any
personal property on the Improvements which is the personal
property of the Tenants pursuant to the Leases.
(d) Appurtenances. All of Seller's rights, privileges
and easements appurtenant to the Land, all development rights and
air rights relating to the Land and any and all easements,
rights-of-way and other appurtenances used in connection with the
beneficial use and enjoyment of the Land, but excluding all water,
water rights and water stock, and excluding minerals and mineral
rights of every kind (including oil, gas and other hydrocarbon
substances) on or under the Land.
(e) Leases. Seller's interest in all leases, subleases,
licenses, concessions, and other forms of agreement in effect as of
the Effective Date or entered into after the Effective Date, and
remaining in effect as of the Closing Date (as defined below),
granting to any party or parties the right of use or occupancy of
any portion of the Land and/or Improvements, and all renewals,
modifications, amendments, guarantees, and other agreements
affecting the same (together, the "Leases").
(f) Awards. All right, title and interest of Seller in
and to any unpaid awards for damages to the Land and/or
Improvements resulting from any taking in eminent domain or by
reason of change of grade of any street accruing after closing of
the purchase and sale pursuant to this Agreement.
(g) Intangible Property. Except the name of Seller or
affiliated entities, all of the interest of Seller in any
intangible property now or hereafter owned by Seller and used or
designed for use in connection with the Land, Improvements and/or
Personalty, and any contract or lease rights, licenses, permits,
certificates of occupancy, franchises, agreements, utility
contracts and agreements (including sewer and water line
agreements), telephone listings and numbers used by Seller at the
Real Property, unexpired claims, signs, trade names, logos,
trademarks and service marks arising from or related to the Real
Property (other than Seller's name or marks), warranties,
guaranties and sureties belonging to Seller, or other rights
relating to the ownership, development, construction, design, use
and operation of the Land and/or Improvements (together,
"Intangible Property"), so long as and to the extent that said
Intangible Property may be transferred or assigned, and is not
specifically excluded from the Xxxx of Sale (as defined below).
Notwithstanding anything to the contrary herein, Intangible
Property does not include (i) any refunds of taxes or assessments
which were paid by Seller or Seller's predecessor in interest,
prior to close of the purchase and sale pursuant hereto, or of
insurance premiums paid by Seller or Seller's predecessor-in-interest and
attributable to the period prior to the Closing Date
(without regard to when such refunds are received), (ii)
condemnation or other awards which represent refunds of amounts
paid by Seller or any predecessor-in-interest prior to the Closing
Date or awards for property damage (other than amounts to be
credited to Buyer pursuant to Section 13 of this Agreement) or
otherwise relating to the Property, (iii) any claims of Seller
existing as of the Closing Date against Tenants for delinquent
rents, to the extent not subsequently paid or credited to Seller,
or (iv) claims of Seller made pursuant to or arising in connection
with the litigation matters set forth on Exhibit "C" attached
hereto (the "Litigation Claims"); provided, however, that
Litigation Claims do not include any rents or other income relating
to the period after the Closing Date with respect to Leases as to
which the Tenant continues to occupy the leased premises after the
Closing Date.
2. Opening of Escrow and Deposit.
(a) General Instructions. First American Title Insurance
Company is hereby designated as escrow holder ("Escrow Agent"), to
act in accordance with this Agreement. Escrow Agent's general
conditions or provisions, which are attached hereto as Exhibit "D",
are incorporated by reference herein (with the changes noted
thereon); provided, however, that in the event of any inconsistency
between Exhibit "D" and any other provisions of this Agreement, the
provisions of this Agreement shall control over the provisions of
Exhibit "D." Buyer and Seller shall each execute, deliver and be
bound by such further escrow instructions or other instruments as
may be reasonably requested by the other party or by Escrow Agent
from time to time, so long as the same are consistent with this
Agreement, and upon execution thereof by both Seller and Buyer,
such escrow instructions shall be deemed to be a material part of
this Agreement. Escrow Agent needs to be concerned only with those
provisions of this Agreement that instruct it to perform specific
acts or with respect to which escrow holders generally and
reasonably would be expected to act. Escrow Agent shall comply,
but shall have no liability whatsoever for complying, with the
unilateral instructions of only one party without the consent of
the other party hereto if expressly required to do so in this
Agreement.
(b) Opening of Escrow. Concurrently with its execution of
this Agreement, Buyer shall open an escrow with Escrow Agent (the
"Escrow") by delivering to Escrow (with a copy to Seller), an
executed copy of this Agreement, and a deposit in the form of
immediately available funds in the amount of One Million Dollars
($1,000,000.00) (such deposit, together with all interest accrued
thereon, is collectively referred to herein as the "Initial
Deposit"). Escrow Agent shall retain possession of the Initial
Deposit until delivery or return thereof is permitted or required
under this Agreement. The Initial Deposit shall be deposited by
Escrow Agent in an interest-bearing account with the interest
thereon to be disbursed with the Deposit in accordance with the
provisions hereof.
(c) Deposits. On or before 9:00 a.m. Pacific Daylight Time
("PDT") of the first business day after the date of expiration of
the Investigation Period (as defined below) without written
cancellation of the Escrow by Buyer, Buyer shall initiate a bank
wire to Escrow Agent in the form of immediately available funds, in
the additional amount of Four Million Dollars ($4,000,000.00) (such
deposit, together with all interest accrued thereon while in
Escrow, is collectively referred to herein as the "Additional
Deposit," and together with the Initial Deposit, the "Deposit").
Buyer understands, acknowledges and agrees that, upon deposit of
the Additional Deposit into Escrow, the entire Deposit shall
immediately become non-refundable (except upon (i) Default (as
defined below) by Seller or (ii) failure to occur of any of the
conditions set forth in subsection 7(a) below other than as a
result of the conduct or omissions of Buyer), shall immediately be
deemed to have been fully earned by Seller, and shall be
immediately delivered by Escrow Agent to Seller. If Buyer provides
Notice (as defined below) to Seller, during the Investigation
Period, of Buyer's cancellation of Escrow as a result of
information obtained by Buyer during the Investigation Period
(other than information disclosed in or reasonably inferable from
the Disclosure Reports), then Escrow Agent shall return the Initial
Deposit to Buyer upon receipt of written verification from Seller
that Buyer has complied with its obligations hereunder with respect
to cancellation of Escrow during the Investigation Period, and net
only of Buyer's share of the costs and expenses of Escrow and
title. If the purchase and sale shall close pursuant to this
Agreement, the Deposit shall be credited against the Purchase Price
(as defined below) at the close of Escrow.
(d) Closing. The Escrow shall close, as evidenced by
recordation of a Grant Deed in accordance herewith (the "Closing"),
on or before the earlier of (i) June 17, 1997, and (ii) 12:00 p.m.
PDT on the date which is three (3) business days after Buyer
completes a public offering of limited partnership interests in
Buyer; provided, however, that Buyer's completion of such an
offering shall in no event be deemed a condition to the Closing,
and provided further, however, that the Closing shall not occur,
without the written consent of both parties, on or before June 4,
1997 (with the applicable date of Closing being referred to as the
"Outside Closing Date"). Buyer shall advise Seller of the
scheduled date for completion of Buyer's public offering not less
than five (5) business days prior to such date. If Buyer does not
cancel the Escrow during the Investigation Period as herein
permitted, and Escrow thereafter fails to close on or before the
expiration of the Outside Closing Date, for any reason, then (i)
this Agreement shall terminate and, except for provisions which
expressly survive a termination, neither party shall have any
further obligation to the other hereunder; and (ii) Escrow shall be
canceled and the Deposit shall be distributed to Seller; provided,
however, that if Escrow fails to close on or before the Outside
Closing Date due solely to a default by Seller or to a failure to
satisfy any of the conditions set forth in subsection 7(a) below
other than as a result of the conduct or omission of Buyer, then
the Deposit shall be distributed to Buyer.
3. Purchase Price. The "Purchase Price" for the Property shall
be Eighty Million One Hundred Thousand Dollars ($80,100,000.00)
payable in immediately available funds upon Closing, and otherwise
in accordance with the terms and conditions contained in this
Agreement.
4. Prorations. The following items shall be prorated as of the
date of Closing (the "Closing Date") and such prorations shall be
reflected on the settlement statements prepared by Escrow Agent on
the Closing Date and shall serve to adjust the Purchase Price.
Such prorations shall be made on the basis of a 365-day year, as of
12:01 a.m. on the Closing Date.
(a) Rents.
(i) All rentals, receipts and other revenues from the
Property, including base rents, percentage rents and additional
rents (other than those referenced in Section 4(b) below)
(collectively, "Rents") which have been actually received by Seller
and which are payments under Leases for the period from and after
the Closing Date, shall be credited to Buyer, and Buyer shall be
entitled to collect all Rents which are delinquent or due on or
after the Closing Date;
(ii) All Rents collected by Buyer after the Closing Date
with respect to each Lease for which Rent payments are delinquent
at Closing by not more than thirty (30) days shall (subject to
Seller's retained right to xxx therefor with respect to delinquent
Rents accruing prior to the Closing Date, to the extent not paid or
credited to Seller) be credited and paid by Buyer as follows: first
to Seller for amounts due before the Closing Date, but unpaid prior
to the Closing Date, and second to Buyer;
(iii) All Rents collected by Buyer after the Closing
Date with respect to each Lease for which Rent payments are
delinquent at Closing by more than thirty (30) days shall (subject
to Seller's retained right to xxx therefor with respect to
delinquent Rents accruing prior to the Closing Date, to the extent
not paid or credited to Seller) be credited and paid by Buyer as
follows: first to Buyer in an amount equal to amounts due as of the
date of collection but after the Closing Date, and second to Seller
in an amount equal to amounts due prior to the Closing Date and
unpaid as of the Closing Date;
(iv) Notwithstanding the foregoing, with respect to any
Lease for which Rent is paid in arrears, Rent received by Buyer
after the Closing shall be credited to the Rent in arrears for the
previous month before it is credited to current month or advance
Rents;
(v) Any delinquent Rents which, as so credited, relate
in whole or part to any period prior to the Closing Date shall be
remitted by Buyer to Seller when collected by Buyer (net only of
Buyer's proportionate share of any reasonable out-of-pocket
collection expenses actually incurred by Buyer); and
(vi) In addition to the foregoing, any tenant
improvements, leasing commissions or other monetary obligations of
the landlord under Leases entered into after the Effective Date
pursuant to Section 6(c) below, which obligations have been paid by
Seller, shall be credited to Seller.
(b) Lease Operating Cost Pass-Throughs.
(i) All operating cost pass-throughs for taxes,
utilities, insurance, common area maintenance charges or other
current operating costs and cost of living escalation amounts ("CAM
Charges") (A) paid by Tenants which have been actually received by
Seller and which are allocable to the period from and after the
Closing Date, shall be credited to Buyer, and (B) payable by
Tenants but unpaid as of the Closing Date and attributable to the
period before the Closing Date, shall (subject to Seller's retained
right to xxx Tenants for such amounts) be subject to collection by
Buyer after the Closing Date and upon such collection shall be
credited and paid by Buyer as set forth herein.
(ii) All CAM Charges collected by Buyer after the Closing
Date with respect to each Lease for which such payments are
delinquent at Closing by not more than thirty (30) days shall
(subject to Seller's retained right to xxx therefor with respect to
delinquent CAM Charges accruing prior to the Closing Date, to the
extent not paid or credited to Seller) be credited and paid by
Buyer as follows: first to Seller for amounts due before the
Closing Date, but unpaid prior to the Closing Date, and second to
Buyer;
(iii) All CAM Charges collected by Buyer after the
Closing Date with respect to each Lease for which such payments are
delinquent at Closing by more than thirty (30) days shall (subject
to Seller's retained right to xxx therefor with respect to
delinquent CAM Charges accruing prior to the Closing Date, to the
extent not paid or credited to Seller) be credited and paid by
Buyer as follows: first to Buyer in an amount equal to amounts due
as of the date of collection but after the Closing Date, and second
to Seller in an amount equal to amounts due prior to the Closing
Date and unpaid as of the Closing Date; and
(iv) With respect to any Lease for which CAM Charges are
paid in arrears, CAM Charges received by Buyer after the Closing
under such Lease shall be credited to the CAM Charges in arrears
before the same are credited to current month or advance CAM
Charges under such Lease. Any delinquent CAM Charges which, as so
credited, relate in whole or part to any period prior to the
Closing Date shall be remitted by Buyer to Seller when collected by
Buyer (net only of Buyer's proportionate share of any reasonable
out-of-pocket collection expenses actually incurred by Buyer).
(c) Property Taxes. All real property taxes for the current
(1996-97) tax year which are due and payable on or before the
Closing Date and all real property taxes for years prior thereto
shall be paid by Seller on or before the Closing Date, and prorated
as of the Closing Date for the 1996-97 tax year (on the basis of
the portion of the 1996-97 tax year which falls after the Closing
Date, and based upon the most recent assessment and levy). Any
adjustments to such taxes for the 1996-97 tax year (with the
exception of any readjustment as a result of the sale contemplated
hereby) shall be adjusted between Seller and Buyer promptly upon
receipt by Buyer of the actual bills for such taxes. Seller shall
be entitled to retain for its own account any and all refunds
(whenever received) of taxes and assessments paid by Seller prior
to the Closing Date, including any of the same that shall result
from pending property tax appeals relating to the Property or the
personalty associated therewith.
(d) Assessments. All assessments, special assessments and
other like charges imposed against the Property, or any part
thereof, by reason of roadways, utility lines, streets, alleys or
other improvements in existence, under construction or planned and
payable on or prior to the Closing Date shall be prorated to such
date. All such assessments, special assessments and other charges
affecting the Property and payable after the Closing Date shall be
the sole responsibility of Buyer. All pending refunds of
assessments paid by Seller prior to the Closing Date shall be
delivered to and retained by Seller.
(e) Security Deposits. All security and other deposits, if
any, including any accrued interest thereon if such interest is
required to be remitted to Tenants pursuant to their respective
Leases, received by Seller on or before the Closing Date on behalf
of any Tenants under any Leases (and not subject to current or past
application against Lease obligations pursuant to the Leases),
shall be credited to Buyer, and Escrow shall deliver a notice to
the Tenants, in the form of Exhibit "E-1" attached hereto, advising
Tenants that: (i) Buyer has purchased the Property, (ii) the
security deposit, if any, has been delivered to Buyer in connection
with such sale, and (iii) Seller is relieved of any and all
liability for any such security deposit.
(f) Utility Charges and Other Expenses. Prepaid water,
sewer, and other utility charges and similar Property expenses
allocable to the period from and after the Closing Date shall be
credited to Seller, and accrued water, sewer, and other utility
charges and similar Property expenses shall be credited to Buyer.
After the Closing, outside of Escrow, the parties shall make any
readjustments necessary based upon a final billing obtained by
Buyer or actual subsequent readings of utility meters respecting
that billing period in which the Closing occurred. All utility
security deposits, if any, shall either be retained by Seller
without adjustment or, at Seller's option, shall be delivered to
Buyer and credited to Seller.
(g) Service Contracts. Prepaid charges in connection with
any Service Contracts (as defined below) which Buyer assumes
pursuant hereto, and any licenses or permits issued in connection
with the Property (to the extent transferrable) shall be credited
to Seller. Accrued charges payable for the period up to the
Closing Date and unpaid as of the Closing in connection with such
Service Contracts, licenses or permits (to the extent
transferrable) shall be credited to Buyer.
(h) Tenant Allowances. Amounts due from Seller under the
Leases (other than Leases or Lease modifications approved by Buyer
under Section 6), but unpaid as of the Closing Date, to pay for (i)
tenant improvements commenced prior to the Closing Date, and (ii)
Leasing commissions unpaid prior to the Closing Date (excluding any
commissions which may be due after the Effective Date with respect
to options, extensions, expansions or renewals), shall be credited
to Buyer on the Closing Date. In addition to the foregoing, an
amount equal to the value of "free rent," if any, specified in the
Leases for the one (1) year period commencing on the Closing Date
(exclusive of any Leases or Lease modifications approved by Buyer
under Section 6), to the extent the existence of such free rent was
not disclosed to Buyer in the offering circular or pursuant to
other materials delivered to Buyer on or before April 16, 1997,
shall be credited to Buyer on the Closing Date, by multiplying the
number of months of free rent with respect to each particular Lease
during the one (1) year period following the Closing Date, by the
base monthly rental rate payable under that Lease in the first
month in which rent is payable. On or before 9:00 a.m. PDT on May
12, 1997, Buyer shall deliver to Seller a list of Leases as to
which free rent is due within the specified period and the amounts
of free rent due as to each such Lease (the "Free Rent List").
Seller shall deliver to Buyer a Notice specifying any exceptions
(based upon correctness or prior disclosure to Buyer) on or before
9:00 a.m. PDT on May 14, 1997. If Seller's Notice is not
satisfactory to Buyer, Buyer shall cancel the Escrow in accordance
with Section 5(c) or proceed to Close and waive any objections to
Seller's Notice. If Seller fails to deliver timely Notice, the
Free Rent List shall be deemed to be correct.
If any of the prorations described in this Section 4 cannot be
calculated accurately on the Closing Date, then the same shall be
calculated as soon as reasonably possible thereafter and either
party owing the other party a sum of money based on such subsequent
prorations shall promptly pay said sum to the other party. If
either party owing funds to the other after the Closing Date
pursuant to this Section does not remit them within thirty (30)
days after demand therefor (which demand shall also include
invoices or other appropriate documentation in support thereof),
such funds shall thereafter bear interest at a "Default Rate" equal
to five percent (5%) above the highest rate as announced from time
to time by Chase Manhattan Bank, N.A. at its principal office in
New York City as its "prime rate," as the same shall fluctuate from
day to day, or, if lesser, the maximum rate permitted by law.
5. Due Diligence Investigation Period.
(a) Due Diligence Materials. Within seven (7) days after the
opening of Escrow (the "Diligence Date"), without any
representation or warranty as to accuracy or completeness, and only
to the extent within the physical possession of Seller, Seller
shall either (at Seller's option) deliver to Buyer or make
available for inspection (and copying) by Buyer at Buyer's expense,
at the Property and/or the offices of Seller, the following items:
(i) A preliminary title report or commitment issued by
First American Title Insurance Company ("Title Company"), dated
within forty-five (45) days of the Effective Date (the "Preliminary
Report"), which Buyer may use to obtain, directly from the Title
Company, copies of those documents referenced as exceptions in the
Preliminary Report, so that, to the extent Buyer wishes to do so,
it shall be able to review all such documents prior to noon on May
14, 1997;
(ii) The current Tenants' Leases, including any and all
amendments thereto; Service Contracts; maintenance records; copies
of current utility bills (to the extent received); copies of
architectural plans and "as-built" drawings (if any) for the
buildings (which Buyer understands do not necessarily reflect the
present state of the buildings); building permits, certificates of
occupancy, and licenses pertaining to the Property to the extent
they remain in effect; copies of any written warranties relating to
the Personalty; copies of insurance claim reports, if any; and
Seller's Property operating statements for calendar years 1995 and
1996 and monthly operating statements for January 1997 through
February 1997; and
(iii) Copies of all real property tax and assessment
bills received by Seller for the 1995-96 and 1996-97 tax years.
(b) ALTA Survey. On or before May 7, 1997, Seller shall
deliver to Buyer a current American Land Title Association survey
prepared by a surveyor selected by Seller, with respect to the
Property (the "Survey"); provided, however, that Seller's failure
to deliver the Survey by such date shall not be deemed a default
hereunder or a failure of a condition to Buyer's obligation to
Close, but shall only serve to extend the termination of the
Investigation Period by one day for each day of delay, from and
after May 14, 1997, in Seller's delivery of the survey to Buyer.
(c) Investigation Period. Beginning upon the opening of
Escrow, and terminating as of 5:00 p.m. PDT on the date which is
the later of (i) May 14, 1997, and (ii) seven (7) days after
Seller's delivery of the Survey to Buyer (the "Investigation
Period"), Buyer may, subject to the limitations set forth in this
Agreement and in the Entry Permit (as defined below), investigate
any and all aspects of the Property; provided, however, that if
such Investigation Period extends beyond May 14, 1997 (as a result
of Seller's delivery of the Survey after May 7, 1997 in accordance
with Section 5(a) above), Buyer's investigation and right to cancel
Escrow as a result of such investigation, shall be limited from and
after May 14, 1997 to matters relating to and disclosed solely in
connection with the Survey. To the extent Buyer is entitled to
investigate particular matters during the Investigation Period,
Seller, at no cost or expense to Seller, shall reasonably cooperate
with Buyer to the extent Seller's cooperation is required for Buyer
to obtain public information pertaining to the Property from
governmental agencies. If, in Buyer's sole discretion, Buyer
disapproves of any aspect of the Property (other than matters
disclosed in or reasonably inferable from the Disclosure Reports
(as defined below)), Buyer may cancel the Escrow by Notice to
Seller delivered to Seller on or before 5:00 p.m. PDT, on (i) May
14, 1997 as to all matters disapproved other than matters disclosed
solely in the Survey, and (ii) the last day of the Investigation
Period as to matters disclosed solely in the Survey. If Buyer does
not timely cancel Escrow as set forth in the above sentence, Buyer
shall be unconditionally obligated to purchase the Property without
any contingencies (other than Section 7(a) conditions precedent).
Upon termination of the Investigation Period without timely
cancellation of Escrow, the Deposit shall be non-refundable in
favor of Seller, and shall be released to Seller by Escrow Agent
without further act of Buyer. If Escrow is canceled during the
Investigation Period in accordance herewith, (i) Buyer shall
deliver to Seller, for retention by Seller, all information,
studies, and reports obtained or made by Buyer or its agents
relating to the Property, and (ii) Seller shall instruct Escrow
Agent to refund the Deposit to Buyer, net only of Buyer's share of
costs and expenses of the Escrow and title. The inspection,
investigation and survey of the Land and other portions of the
Property by Buyer shall be in lieu of any notice or disclosure
required by Section 25359.7 of the California Health and Safety
Code, or by any provision of the Civil Code or pursuant to any
other applicable law, and Buyer hereby waives any requirement for
a notice pursuant to those provisions. Buyer shall be deemed to
have approved all soil and other physical conditions pertaining to
the Land unless it has delivered to Seller on or before May 14,
1997, Notice of disapproval specifically identifying each matter
pertaining to soils or physical conditions disapproved, which
determination shall be made by Buyer in its sole discretion.
Notwithstanding anything to the contrary herein, if Buyer desires
to undertake any testing, investigation or inspection of the Land
with respect to the presence of hazardous or toxic substances or
any substance which requires investigation or remediation under any
federal, state or local statute, regulation, ordinance, order,
action or policy, Buyer shall perform such inspections,
investigations or tests on or before May 14, 1997, using only
environmental engineers or consultants from the approved list of
engineers and consultants to be provided by Seller.
(d) Title. Not later than 5:00 p.m. PDT on May 7, 1997,
Buyer may provide Notice to Seller that Buyer disapproves of one or
more matters affecting title to the Property and request that
Seller correct such deficiency. All matters affecting title to the
Property which are not disapproved by Buyer by Notice to Seller
delivered on or before 5:00 p.m. PDT on May 7, 1997, together with
all matters consented to by Buyer or created by Buyer or its
agents, or by a tenant (without Seller's written consent), shall be
deemed to be "Permitted Exceptions" for the purposes of this
Agreement; provided, however, that Buyer shall have the right to
further disapprove any such title exception up until the date which
is four (4) days prior to the expiration of the Investigation
Period, if and to the extent the Survey, if delivered after May 7,
1997, shows that such exception encroaches upon improvements on the
Land. In the event Seller receives no such Notice, all matters
affecting title to the Property shall be deemed Permitted
Exceptions. If Buyer timely and properly objects to a title
matter, Seller shall, in the exercise of its sole discretion, at
least one (1) day prior to the end of the Investigation Period,
advise Buyer whether Seller intends to correct the title objection
or provide endorsement coverage with respect thereto prior to the
close of Escrow. If Seller elects not to correct the deficiency or
provide endorsement coverage with respect thereto, or if Seller
provides no Notice to Buyer of its intent with respect thereto (in
which event Seller shall be deemed to have elected not to correct
the deficiency or provide endorsement coverage with respect
thereto), Buyer shall be required, either to waive its objection or
cancel Escrow by Notice delivered to Seller and Escrow Agent on or
before the expiration of the Investigation Period. Subject to any
deficiency which Seller has agreed to correct or endorse prior to
the close of Escrow, if Buyer does not cancel Escrow during the
Investigation Period, Buyer shall be deemed to have waived its
previous objections to matters affecting title to the Property,
which objections shall thereafter be deemed included in the
"Permitted Exceptions." Notwithstanding the foregoing, Seller
agrees to use its reasonable efforts to cause the removal from the
Title Policy (by removal, indemnity or endorsement), prior to
Closing, of all monetary encumbrances recorded against the Real
Property after the end of the Investigation Period, other than (i)
liens recorded as a result of acts or omissions of Buyer, and (ii)
liens recorded as a result of acts or omissions of Tenants.
(e) Title Commitment. On or before the expiration of the
Investigation Period, Buyer shall have obtained from Title Company
a Commitment to issue, in a form acceptable to Buyer, a standard
coverage policy of title insurance (the "Title Policy") dated as of
the Closing Date in the amount of the Purchase Price showing fee
title to the Land vested in Buyer, subject only to the Permitted
Exceptions and with such endorsements and such exclusions as shall
be acceptable to Buyer (the "Commitment"). If Buyer fails to
obtain the Commitment, Buyer shall be required to close Escrow
(subject only to the conditions in Section 7(a)) notwithstanding
that Buyer may not be able to obtain, thereafter, a Title Policy in
a form acceptable to Buyer.
(f) Buyer's Right of Entry. Prior to the Effective Date,
Buyer and Seller have entered into that certain Entry Permit shown
on Exhibit "F" attached hereto ("Entry Permit"), and shall act in
accordance with the terms of that Entry Permit, subject, however,
to the more specific limitations set forth in this Agreement.
Buyer shall have the right to enter the Property through 5:00 p.m.
PDT on May 14, 1997, to conduct, at Buyer's cost, expense and
liability, the following studies or inspections: (i) a market and
neighborhood analysis; (ii) a complete financial analysis of the
Property; (iii) subject to the rights of Tenant, physical
inspections and structural analyses of the Improvements; (iv)
soils, geology and environmental studies; and (iv) an architectural
inspection of the Property. In addition, if the Survey is
delivered after May 7, 1997, Buyer may enter the Property after May
14, 1997 and through 5:00 p.m. PDT on the date of the expiration of
the Investigation Period, in accordance with the Entry Permit, for
the sole purpose of investigating matters shown on the Survey. In
addition, Buyer may enter the Property, subject to the Entry Permit
through the Closing Date with the prior written consent of Seller
(which consent shall not be unreasonably delayed or denied), in
connection with preparation for transfer of the Property to Buyer
(but not to conduct continuing diligence after expiration of the
Investigation Period), for purposes such as obtaining access to the
books and records of Seller made available to Buyer pursuant to
Section 5(a) above, in connection with audits by Buyer's auditors,
and meeting with on-site staff to effect an orderly transition of
management following the Closing Date.
(g) Environmental and Structural Reports. Seller has
previously delivered to Buyer those certain environmental and
structural reports described on Exhibit "G" attached hereto (the
"Disclosure Reports"). Notwithstanding anything to the contrary in
this Agreement, Buyer shall not be entitled to disapprove of any
condition relating to the Property, in connection with disapprovals
made during the Investigation Period or otherwise, to the extent
the condition was disclosed in or reasonably inferable from any of
the Disclosure Reports.
6. Limitation on Leasing. While this Agreement is in effect, and
so long as Buyer is not in default hereunder, Seller shall not
modify any of the Leases or enter into any new Leases after the
Effective Date without the prior written consent of Buyer, which
shall not be unreasonably withheld. Such consent shall be
conclusively presumed to be granted two (2) business days after a
copy of such proposed new Lease or Lease modification is delivered
to Buyer, unless Buyer objects in writing, listing the specific and
reasonable basis for such objection, by Notice to Seller within
such period. As to all such Leases or Lease modifications entered
into after the Effective Date (unless Buyer timely and properly
objects as set forth above), Buyer hereby expressly assumes all
obligations of the landlord under such Leases, including
obligations with respect to tenant improvements and leasing
commissions, whether such obligations are payable prior or
subsequent to the Closing Date. Except with respect to entering
into new Leases and Lease modifications, Seller shall retain all of
its rights to operate the Property in the ordinary course of
business prior to the Closing Date, including taking legal action
against Tenants in default under their Leases, and Buyer shall
cooperate (at no cost to Buyer) with Seller's prosecution of such
actions to completion following the Closing. Notwithstanding the
foregoing, prior to delivering a Tenant notice under Code of Civil
Procedure 1161, et seq., Seller shall deliver a Notice to Buyer
specifying the nature of the default and the amount to be paid or
other actions required to cure the default. If Buyer fails to
deliver Notice to Seller within three (3) days of Seller's Notice,
pursuant to which Buyer agrees to treat such Lease as a Lease
subject to the provisions of Sections 4(a)(ii) and 4(b)(ii) (so as
to apply amounts received post-closing first to delinquent amounts
which accrued pre-closing), then Seller may proceed to exercise its
rights and remedies against such Tenant.
7. Conditions Precedent to Closing.
(a) Buyer's Conditions. The closing of the purchase of the
Property on the Closing Date and Buyer's obligation to acquire the
Property shall, in addition to any other conditions set forth
herein, be conditional and contingent upon satisfaction, or waiver
by Buyer, of all of the below listed conditions:
(i) Personal Property. The Personalty shall consist of
those items described on Exhibit"B" hereto, subject only to changes
relative to use and consumption thereof during the ordinary course
of business while this Agreement is in effect;
(ii) Compliance with Agreement. Seller shall have
substantially performed and complied with all of its covenants and
conditions contained in this Agreement;
(iii) Accuracy of Representations and Warranties.
The representations and warranties of Seller set forth in this
Agreement shall be confirmed by Seller in writing as materially
true and correct as of the Closing Date;
(iv) Title. No matters shall have been placed of record
after expiration of the Investigation Period, and remain of record
as of the Closing Date, other than mechanics and materialmen liens,
and other liens, placed of record in connection with acts or
omissions of Tenants or work performed by or for Tenants, and not
financed by, Seller, and (ii) as a result of acts or omissions of
Buyer, which matters the Title Company intends to include as an
exception to the Title Policy;
(v) Casualty or Condemnation. No casualty or
condemnation has occurred pursuant to which Buyer has elected to
terminate the Agreement in accordance with Section 13 below; and
(vi) Estoppels. Seller shall have delivered to Buyer
prior to the Closing Date, Tenant estoppels, executed within sixty
(60) days of the Closing Date and in the form of Exhibit "E-3"
without any material exceptions noted thereon by the applicable
Tenant except for Permitted Estoppel Exceptions (as defined below)
("Tenant Estoppels") from (i) each of the Tenants leasing more than
3500 square feet of net rentable area in the Property on or before
the Effective Date, and (ii) Tenants leasing, in the aggregate, not
less than eighty-five percent (85%) of total leased space in the
Property (it being understood and agreed that Leases entered into
after the Effective Date and approved or deemed approved by Buyer
shall be deemed to have approved Tenant Estoppels); provided,
however, that, with respect to one or more particular premises in
the Property, Seller may, in lieu of delivering to Buyer a Tenant
Estoppel to meet such condition, deliver a "Seller's Estoppel" with
respect to such leased space, in the form of Exhibit "E-4"
attached hereto, subject only to Permitted Estoppel Exceptions, in
the event that Seller does not obtain such estoppel from a Tenant
prior to the Closing Date; provided, further, however, that in the
event that Seller obtains any such Tenant Estoppel after the
Closing Date and delivers the same to Buyer, then Seller's Estoppel
shall be of no further force and effect with respect to the Lease
covered by such Tenant Estoppel delivered after the Closing Date,
if and to the extent that the Tenant Estoppel is consistent with
the previously delivered Seller's Estoppel. As used herein,
"Permitted Estoppel Exceptions" means information (i) consistent
with the Lease of the Tenant, or inconsistent with such Lease in an
immaterial respect, or (ii) made available to Buyer during the
Investigation Period in connection with Buyer's review of materials
pursuant to Section 5 above.
(b) Seller's Conditions. The closing of the purchase of the
Property on the Closing Date and Seller's obligation to sell and
convey the Property shall, in addition to any other conditions set
forth herein, be conditional and contingent upon satisfaction, or
waiver by Seller, of each and all of the below listed conditions:
(i) Compliance with Agreement. Buyer shall have
substantially performed and complied with all of its covenants and
conditions contained in this Agreement, and shall have delivered
all documents required to be delivered by Buyer pursuant hereto;
(ii) Accuracy of Representations and Warranties. All
representations and warranties of Buyer contained in or made
pursuant to this Agreement shall be confirmed by Buyer in writing
as true and correct as of the Closing Date;
(iii) Title. The condition precedent set forth in
Section 7(a)(iv) shall have been satisfied.
8. Closing Documents. On or before the Closing Date, Seller and
Buyer shall deliver to Escrow Agent the following fully-executed
documents and/or items, acknowledged where appropriate (together
referred to herein as the "Closing Documents"):
(a) Deed. A Grant Deed, in the form attached as Exhibit "I"
(the "Deed"), executed by and notarized on behalf of Seller, and
conveying Seller's interest in the Land and Improvements to Buyer,
subject to general and special real estate taxes and assessments,
and all matters of record or apparent from an inspection or survey;
(b) Xxxx of Sale, Assignment and Assumption Agreement. A
Xxxx of Sale, Assignment and Assumption agreement to be executed
and delivered by Seller and Buyer, in the form attached hereto as
Exhibit "J" (the "Xxxx of Sale") (i) conveying to Buyer title to
the Personalty, (ii) assigning to Buyer Seller's interest in all
Leases and providing for assumption thereof by Buyer, (iii)
assigning to Buyer, Seller's interest in all assignable, written or
oral service, maintenance, construction, parking, brokerage,
leasing commission, advertising, employment, operating or other
contracts, arrangements or agreements affecting the Property,
including any third party management agreements or contracts (but
not any management agreement or management contract, or leasing
agreement with respect to the entire Property, entered into by
ARES, Inc. or any other affiliate of Seller), and any agreements
pursuant to which goods, services, supplies or any other items
whatsoever are furnished and/or to be furnished in connection with
the Property, or the repair, maintenance or operation of the
Property or any portion or component thereof ("Service Contracts"),
and providing for assumption thereof by Buyer, and (iv) assigning
to Buyer all of Seller's interest in the Intangible Property,
together with originals of all Intangible Property (if applicable)
in each case without representation by Seller as to assignability
or other matters (except to the extent expressly represented and
warranted by Seller herein in Section 10 below).
(c) Non-Foreign Status Affidavit. Seller shall deliver an
Affidavit of Non-Foreign Status in the form of Exhibit "K" attached
hereto, together with a State of California FTB 590RE form.
(d) Other Documents. Buyer and Seller shall deliver such
other documents as shall be reasonably required to transfer or
assign the Property to Buyer, and provide for assumption of
liabilities by Buyer as provided herein.
9. Closing.
(a) Closing Date. The Closing Date shall be on a business
day as agreed to by Seller and Buyer, but in all events shall be on
a date no later than the Outside Closing Date, unless this date is
mutually extended in writing by Seller and Buyer in the exercise of
their respective sole discretion.
(b) Time and Place. The Closing shall take place through
Escrow on the Closing Date at the offices of Escrow Agent.
(c) Payment of Purchase Price. Buyer shall deliver to Escrow
at least one (1) business day before the Closing Date immediately
available funds in the amount of the Purchase Price plus any
prorations, costs and expenses hereunder payable by Buyer, and less
the amount of the Deposit (which shall have been delivered to
Seller on or before the day after the expiration of the
Investigation Period). The amount of the Deposit shall be credited
against the Purchase Price upon Closing.
(d) Possession. Possession of the Property shall be
delivered to Buyer on the Closing Date, subject only to the rights
of Tenants under the Leases and matters of record or apparent by
inspection or survey of the Property. At Closing, Seller will make
available to Buyer at the Real Property all keys (identified as to
suite), Personalty, and originals or true and correct copies of all
plans and specifications, manuals, warranties and operating logs
for the Real Property and other operating and management documents
not previously delivered to Buyer and in Seller's possession or
control.
(e) Closing Costs. Seller shall pay at Closing the premium
for the standard coverage policy of title insurance, documentary
transfer fees and one-half of the escrow and recording fees. Buyer
shall pay the premium for the extended coverage policy of title
insurance and one-half of the escrow and recording fees. Seller
and Buyer shall each be responsible for paying their respective
attorneys' fees and costs, if any.
(f) Settlement Statement and Disbursement Ledger. Escrow
Agent shall prepare and deliver to the parties on the Closing Date
a correct Settlement Statement and Cash Receipts and Disbursements
Ledger.
(g) Title Policy. Escrow Agent shall require Title Company
to deliver the Title Policy to Buyer within fifteen (15) business
days following the Closing Date.
(h) Xxxx of Sale. On the Closing Date, Seller shall assign
to Buyer, the Personalty and the Intangible Property, with the
exception of items of Personalty excluded pursuant to the Xxxx of
Sale, and Seller shall assign to Buyer and Buyer shall assume,
Seller's rights and obligations under, the Leases and Service
Contracts, in accordance with and as specified in the Xxxx of Sale.
(i) Audit Letter. On or before the Closing Date, at Buyer's
request, Seller shall deliver a letter to Buyer's auditors, in the
form of Exhibit "L" attached hereto.
10. Representations and Warranties of Seller. Seller represents
and warrants to Buyer, as of the Effective Date and as of the
Closing Date, as follows:
(a) Status of and Execution by Seller. Seller is (i) in good
standing and validly existing as a New York corporation; and (ii)
duly authorized, qualified and licensed to do all things required
of it under or in connection with this Agreement, including to
execute, deliver and perform this Agreement. All agreements,
instruments, and documents herein provided to be executed by Seller
will be duly executed by and binding upon Seller as of the Closing.
(b) Leases. The Lease Schedule attached hereto as Exhibit
"E-2" correctly lists, as of the Effective Date, all of the Leases
and the base rental currently required to be paid with respect
thereto. Except as disclosed on Exhibit "E-2," the Leases are not
in monetary default as of the Effective Date, and Seller shall
have, on or before the Diligence Date, made available to Buyer true
and accurate copies of the Leases in effect as of the Effective
Date. Notwithstanding anything to the contrary in this Agreement,
to the extent that the foregoing statements are confirmed by
Tenants in Tenant Estoppels delivered to Buyer (or in other
documents made available to Buyer), Seller shall have no obligation
or liability to Buyer with respect to such statements regarding
such Leases.
(c) Service Contracts. There are no Service Contracts which
are not terminable on thirty (30) (or fewer) days' notice, and
entered into by Seller with respect to the Property, which remain
in effect, except those listed on Exhibit "H" attached hereto.
(d) Mechanics Liens. To Seller's knowledge, there are no
mechanics liens outstanding with respect to the Property as a
result of work performed thereon by Seller, or contractors or
agents of Seller, except any of the same as shall be removed (or
endorsed over by Title Company) as of the Closing Date.
(e) Financial Statements. To Seller's knowledge, there are
no materially incorrect income or expense figures in any financial
statements prepared by or for Seller and made available to Buyer
with respect to the Property, except as may be corrected in other
financial or other statements or documents made available to Buyer
in connection with Buyer's due diligence, and Seller acknowledges
and agrees that Buyer, at Buyer's sole cost and expense, may
request its auditors to review such statements in connection with
its purchase of the Property.
(f) Pending Actions. To Seller's knowledge, except as set
forth on Exhibit "C," there is no litigation, claim, administrative
action, arbitration or other proceeding now pending or threatened
in writing against Seller relating to the Property, which would
materially and adversely affect the use, operation or construction
of the Property, and which is not a matter of public record.
(g) No Violations. To Seller's knowledge, Seller has
received no written notice of violations of City, County, State,
Federal, building, fire or health codes, zoning codes or other
regulations or ordinances, filed or issued against the Property by
any government authority, which violations remain outstanding and
which would materially and adversely affect the use of the
Property.
As used in this Agreement, the term "to Seller's knowledge"
shall mean to Seller's actual present knowledge, as determined by
the state of knowledge of the individual who acts as the Seller's
asset manager of the Property as of the Effective Date, without
independent investigation or independent review of Seller's files.
Seller shall not have any liability for breach of its
representations and warranties herein if, as of the Closing Date,
the representations and warranties set forth above shall not be
true, but Buyer has knowledge of such facts prior to the Closing
and proceeds to close Escrow notwithstanding such facts. Seller
shall be entitled to state in writing prior to Closing exceptions
to the representations, warranties, and covenants set forth above,
in which case Buyer may (i) terminate this Agreement if such
exceptions are not reasonably acceptable, in which event the
Deposit (less Buyer's share of Escrow and Closing costs) shall be
returned to Buyer, or (ii) elect to close Escrow notwithstanding
such exceptions. In either event, Seller shall have no further
obligation or liability to Buyer. The representations and
warranties of Seller set forth in this Agreement shall survive for
one (1) year after the close of Escrow.
11. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller, as of the Effective Date and as of the Closing
Date, as follows:
(a) Status of and Execution by Buyer. Buyer is now and on
the Closing Date will be: (i) duly formed and validly existing as
a Maryland limited partnership; (ii) duly authorized, qualified and
licensed under the laws of the State of California to conduct
business and to acquire the Property; and (iii) duly authorized,
qualified and licensed to do all things required of it under or in
connection with this Agreement, including to execute, deliver and
perform this Agreement. All agreements, instruments, and documents
herein provided to be executed by Buyer will be duly executed by
and binding upon Buyer as of the Closing.
(b) No Violations. Neither this Agreement nor any of the
agreements, instruments and documents herein provided to be
executed or to be caused to be executed by Buyer violate or will
violate any provision of any agreement, law, regulation or judicial
order to which Buyer is a party or by which it is bound.
The representations and warranties of Buyer contained in this
Agreement shall survive for one (1) year after the close of Escrow.
12. Condition of the Property.
(a) AS-IS. Buyer acknowledges that Seller is selling, and
Buyer shall accept, the Property in an "AS IS" condition without
any representation or warranty whatsoever by Seller relating to the
Property, with the exception of the express, limited
representations and warranties set forth in Section 10 above.
Buyer acknowledges that it is a sophisticated real estate investor
who shall have had, as of the Closing Date, open access to, and
sufficient time to review, all information, documents, agreements,
studies and tests relating to the Property that Buyer elects to
conduct, and conduct a complete and thorough inspection, analysis
and evaluation of the Property, including environmental issues, if
any, and further acknowledges that Buyer shall conduct such tests,
if at all, prior to May 14, 1997 or, with respect to Survey matters
only, on or before such later date (if any) as shall constitute the
expiration of the Investigation Period, and that Buyer shall
receive and review such information as Buyer shall require in the
course of its investigation. Buyer shall undertake such
investigation as Buyer shall deem necessary or desirable to make
Buyer fully aware of the condition of the Property as well as all
facts, circumstances and information which may affect the use and
operation of the Property, and Buyer covenants and warrants to
Seller that Buyer shall rely solely on Buyer's own due diligence
investigation in determining to purchase the Property.
(b) Release. Effective as of the Closing Date, Buyer, on
behalf of itself, its officers, directors and its and their
respective successors, shall, and by the execution of this
Agreement, hereby does, forever release Seller, its officers,
directors, agents and employees, and its and their respective
successors, of and from any and all losses, liabilities, damages,
claims, demands, causes of action, costs and expenses, whether
known or unknown, arising out of or in any way connected with the
Property, including the condition of title to the Property (and
Seller's interest in and ownership thereof) and the environmental
and structural condition of the Property (herein, "Losses"). Buyer
shall, upon the Closing, and, by the execution of this Agreement,
hereby does, forever release Seller of and from any environmental
claims and causes of action existing now or hereafter created or
enacted, whether at common law or by federal, state, county, or
municipal law or ordinance. Buyer agrees never to commence, aid in
any way, or prosecute against Seller, its officers, directors,
agents or employees or its and their respective successors, any
action or other proceeding based upon any Losses. The foregoing
release shall not be deemed to release any claim of Buyer for
Seller's breach of its representations and warranties set forth in
Section 10 above (subject to the limitation on the survival of such
representations and warranties as set forth in Section 10), nor any
claim of Buyer for damages resulting from the untruth of any matter
which Seller certifies to be true in any Seller's Estoppel
delivered to Buyer in connection with this Agreement, which
Seller's Estoppel remains in effect as of the date Buyer brings
such claim.
(c) Waiver. Buyer expressly waives any rights or benefits
available to it with respect to the foregoing release under any
provision of applicable law which generally 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 the release is agreed
to, which, if known to such creditor, would materially affect a
settlement. Buyer, by the execution of this Agreement,
acknowledges that it fully understands the foregoing, and with this
understanding, nonetheless elects to and does assume all risk for
Losses known or unknown, described in this Section 12. Without
limiting the generality of the foregoing:
THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY LEGAL
COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL
CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
THE UNDERSIGNED, BEING AWARE OF THIS CODE SECTION, HEREBY EXPRESSLY
WAIVES ANY RIGHTS IT MAY HAVE THEREUNDER, AS WELL AS UNDER ANY
OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
Seller's Initials:/s/TNC Buyer's Initials:/s/ VJC
13. Casualty or Condemnation. If prior to the Closing Date, the
Property shall be destroyed or substantially damaged, and the cost
to repair shall exceed One Million Dollars ($1,000,000.00), or if
the Property shall become the subject of any proceedings, judicial,
administrative, or otherwise, for eminent domain or condemnation
where the value of the portion of the Property sought exceeds One
Million Dollars ($1,000,000.00), Seller shall promptly notify Buyer
thereof, and Buyer may then, within fifteen (15) days after
delivery of Notice of the same by Seller, elect to terminate this
Agreement by giving Seller Notice thereof, in which event the
parties hereto shall be relieved and released of and from any
further duties, obligations, rights, or liabilities hereunder (but
not under the Entry Permit), and the Deposit shall be returned to
Buyer (less only Buyer's half of Escrow fees and costs). If the
Closing Date is within the aforesaid fifteen (15) day period, then
the Closing shall be extended to the next business day following
the end of said fifteen (15) day period. If (i) the value of the
Property destroyed or substantially damaged or subject to taking is
equal to or less than One Million Dollars ($1,000,000.00), or (ii)
Buyer elects to complete the transactions contemplated herein as
provided above notwithstanding destruction or eminent domain or
condemnation proceedings involving damage or condemnation value of
in excess of One Million Dollars ($1,000,000.00), this Agreement
shall remain in full force and effect and the purchase contemplated
herein, less any portion of the Property taken by eminent domain or
condemnation, if any, shall be consummated with no further
adjustment or modification and at the Closing Seller shall assign,
transfer, and set over to Buyer all the right, title, and interest
of Seller in and to any insurance proceeds resulting from the
casualty or any awards that have been or may thereafter be made for
the taking or condemnation.
14. Default and Remedies.
IF (i) BUYER IS IN DEFAULT OF THIS AGREEMENT PRIOR TO THE
CLOSING, (ii) BUYER FAILS TO CURE SUCH DEFAULT ON OR BEFORE THE
DATE WHICH IS FIVE (5) DAYS AFTER NOTICE THEREOF FROM SELLER (OR,
IF EARLIER, ON OR BEFORE THE OUTSIDE CLOSING DATE), AND (iii)
SELLER ELECTS TO TERMINATE THIS AGREEMENT DUE TO BUYER'S DEFAULT,
THE DEPOSIT AND ALL OTHER PAYMENTS AND THINGS OF VALUE DELIVERED BY
BUYER SHALL BE FORFEITED BY BUYER AND RETAINED BY SELLER, AND BOTH
PARTIES SHALL THEREAFTER BE RELEASED FROM ALL FURTHER OBLIGATIONS
UNDER THIS AGREEMENT. IF (i) SELLER IS IN DEFAULT OF THIS
AGREEMENT PRIOR TO THE CLOSING, (ii) SELLER FAILS TO CURE SUCH
DEFAULT ON OR BEFORE THE DATE WHICH IS FIVE (5) DAYS AFTER NOTICE
THEREOF FROM BUYER (OR, IF EARLIER, ON OR BEFORE THE OUTSIDE
CLOSING DATE), AND (iii) BUYER ELECTS TO TERMINATE THIS AGREEMENT
DUE TO SELLER'S DEFAULT, BUYER SHALL BE ENTITLED TO OBTAIN A
RELEASE OF THE DEPOSIT, AND IN LIEU OF ALL OTHER REMEDIES AND
DAMAGES, BUYER SHALL BE ENTITLED TO, AT ITS ELECTION, EITHER (A)
SPECIFIC ENFORCEMENT OF SELLER'S DUTY TO TRANSFER THE PROPERTY
PURSUANT TO THIS AGREEMENT, OR (B) PAYMENT BY SELLER OF ONE MILLION
DOLLARS ($1,000,000.00) AS LIQUIDATED DAMAGES (IN WHICH EVENT BOTH
PARTIES SHALL THEREAFTER BE RELEASED FROM ALL FURTHER OBLIGATIONS
HEREUNDER); PROVIDED, HOWEVER, BY PURSUING AN ACTION FOR SPECIFIC
PERFORMANCE, BUYER SHALL BE DEEMED TO HAVE IRREVOCABLY ELECTED SUCH
ACTION AS ITS SOLE REMEDY HEREUNDER AND SHALL NOT BE ENTITLED TO
MAINTAIN A CONCURRENT OR ALTERNATIVE ACTION FOR ANY OTHER DAMAGES
OR REMEDIES.
BUYER AND SELLER ACKNOWLEDGE THAT BUYER'S AND SELLER'S DAMAGES
WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE IN THE EVENT,
RESPECTIVELY, OF BUYER'S OR SELLER'S FAILURE TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THAT THE DEPOSIT AND THE
LIQUIDATED RECOVERY SET FORTH ABOVE, FOR BUYER IN THE EVENT OF
SELLER'S BREACH, AND SELLER IN THE EVENT OF BUYER'S BREACH, ARE
REASONABLE ESTIMATES OF SUCH DAMAGES. THE DEPOSIT AND SUCH OTHER
PAYMENT SHALL, THEREFORE, BE LIQUIDATED DAMAGES TO, RESPECTIVELY,
SELLER AND BUYER, AND RETENTION THEREOF OR RECEIPT THEREOF SHALL
BE, RESPECTIVELY, SELLER'S AND BUYER'S SOLE AND EXCLUSIVE REMEDY
FOR THE OTHER PARTY'S FAILURE TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT IN THE EVENT THE NON-DEFAULTING PARTY ELECTS TO TERMINATE
THIS AGREEMENT (UNLESS BUYER ELECTS ITS RIGHT TO SEEK SPECIFIC
PERFORMANCE AS PROVIDED HEREIN). EXCEPT AS EXPRESSLY PROVIDED
ABOVE, SELLER AND BUYER EACH EXPRESSLY WAIVE THE REMEDIES OF
SPECIFIC PERFORMANCE AND ADDITIONAL DAMAGES. IN ADDITION, BUYER
HEREBY WAIVES ANY RIGHT (EXCEPT IN CONNECTION WITH AN ACTION FOR
SPECIFIC PERFORMANCE), WHICH BUYER MAY OTHERWISE HAVE TO RECORD ANY
NOTICE OF PENDING ACTION (LIS PENDENS) AFFECTING THE PROPERTY.
BUYER AND SELLER FURTHER ACKNOWLEDGE BY THEIR INITIALS BELOW THAT
THEIR RESPECTIVE WAIVER OF THEIR RIGHTS PURSUANT TO THIS SECTION 14
IS MATERIAL CONSIDERATION FOR THE OTHER PARTY TO ENTER INTO THIS
AGREEMENT.
SELLER'S INITIALS/s/ TMC BUYER'S INITIALS/s/ VJC
15. Brokerage Commissions. Buyer hereby represents and warrants
to Seller that Buyer has not incurred, and shall not have incurred
as of the Closing Date, any liability for the payment of any
brokerage fee or commission in connection with the transaction
contemplated in this Agreement. Seller hereby represents and
warrants to Buyer that Seller has not incurred, and shall not have
incurred as of the Closing Date, any liability for the payment of
any brokerage fee or commission in connection with the transaction
contemplated in this Agreement, except for the commission due Xx.
Xxxxx X. Xxxxxxx and Colliers/The Xxxxxx Company, which commission
(as between Buyer and Seller) shall be the sole obligation of
Seller. Seller and Buyer hereby agree to defend, indemnify and
hold harmless the other from and against any and all claims of any
other person claiming a brokerage fee or commission in connection
with the Property through such party.
16. Miscellaneous.
(a) No Exchange. Seller shall not participate in, or
accommodate Buyer in connection with, a 1031 exchange.
(b) Entire Agreement. This Agreement supersedes all prior
discussions, agreements and understandings between Seller and
Buyer, with the exception of the Entry Permit and the
confidentiality letter signed by Buyer on or about April 21, 1997,
and constitutes the entire agreement between Seller and Buyer with
respect to the transaction herein contemplated. This Agreement may
be amended or modified only by a written instrument executed by
Seller and Buyer.
(c) Waiver. Each party hereto may waive any breach by the
other party of any of the provisions contained in this Agreement or
any default by such other party in the observance or performance of
any covenant or condition required to be observed or performed by
it contained herein; provided, however, that such waiver or waivers
shall be in writing, shall not be construed as a continuing waiver,
and shall not extend to or be taken in any manner whatsoever to
affect any subsequent breach, act or omission or default or affect
each party's rights resulting therefrom. No waiver will be implied
from any delay or failure by either party to take action on account
of any default by the other party. No extension of time for
performance of any obligations or acts shall be deemed an extension
of the time for performance of any other obligations or acts.
(d) Further Assurances. Each party hereto shall do such
further acts and execute and deliver such further agreements and
assurances as the other party may reasonably require to give full
effect and meaning to this Agreement.
(e) Notices. All notices demands, consents, approvals and
other communications given pursuant to this Agreement (each, a
"Notice") must be in writing and must be sent by hand, or by
telecopy (with a duplicate copy sent by ordinary mail, postage
prepaid), or by certified or registered mail, postage prepaid,
return receipt requested, or by reputable overnight courier
service, postage prepaid, addressed to the party to be notified as
set forth below:
TO SELLER:
The Mutual Life Insurance Company of New York
00000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: H.E. Xxx Xxxxxxxx, Esq.
With a copy to:
Croudace & Xxxxxxxx
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
TO BUYER:
Arden Realty Limited Partnership
c/o Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Mr. Xxxxxx Xxxxxxx
With a copy to:
Xxxx & Xxxxx, P.C.
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Notices will be deemed given when delivered to Seller or Buyer, as
applicable (regardless of whether delivered to the persons stated
above to receive copies), by hand or when a legible copy is
received by telecopier (provided receipt is verified by telephone
confirmation or one of the other permitted means of giving Notices
under this Section), or if mailed, three (3) days after deposit in
the U.S. mail, certified, return receipt requested (or on the date
of delivery for overnight courier service), with failure or refusal
to accept delivery constituting delivery for this purpose. The
parties agree to use reasonable efforts to provide copies of
Notices to the outside counsel for the other party specified above,
but delivery of such copies shall not be required for effective
delivery of Notice. Actual notice, however and from whomever given
or received, will always be effective Notice when received. Either
party may change its address for Notices set forth above by giving
at least ten (10) days' prior Notice of such change to the other
party.
(f) Facsimile Signatures. Buyer and Seller each (i) agrees
to permit the use of telecopied signatures, from time to time,
where appropriate and consistent with subsection (e) above, in
order to expedite the transaction contemplated by this Agreement,
(ii) intends to be bound by its respective telecopied signature,
(iii) is aware that the other party will rely on the telecopied
signature, and (iv) acknowledges such reliance and waives any
defenses to the enforcement of the documents and Notices effecting
the transaction contemplated by this Agreement based on the fact
that a signature or Notice was sent by telecopy.
(g) Successors and Assigns; Survival. This Agreement shall
be binding upon, and inure to the benefit of, the parties hereto
and their respective successors, heirs, administrators and assigns,
provided, however, that if Buyer assigns this Agreement Buyer shall
not be relieved of any liability in connection herewith or the
purchase and sale. Any provision of this Agreement which, by its
terms, is to be performed after the Closing, shall survive the
Closing Date until full performance thereof.
(h) Governing Law and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State
of California and the venue shall be in Orange County.
(i) No Third Parties Benefitted. The parties do not intend
to confer any benefit on any person, firm, or corporation other
than Seller and Buyer, except as and to the extent otherwise
expressly provided herein.
(j) Attorneys' Fees. In the event of any dispute between any
parties arising out of or in connection with this Agreement or any
other document executed or delivered in connection herewith,
including any litigation, arbitration, bankruptcy and appellate
proceedings (and efforts to enforce the judgment, award or other
disposition of any of the same), the party which prevails in such
action (the "Prevailing Party") shall be reimbursed by the other
party for attorneys' fees, costs and expenses incurred by the
Prevailing Party in connection with such dispute (whether or not
such costs or expenses are specified in California Code of Civil
Procedure Section 1033.5 (a) or (b)). As used herein, the
"Prevailing Party" shall mean the party which obtains the net
monetary recovery or, if no monetary recovery is sought, the party
obtaining the greater nonmonetary relief.
(k) Construction. The section titles or captions in this
Agreement are for convenience only and shall not be deemed to be
part of this Agreement. All pronouns and any variations of
pronouns shall be deemed to refer to the masculine, feminine, or
neuter, singular or plural, as the identity of the parties may
require. Whenever the terms referred to herein are singular, the
same shall be deemed to mean the plural, as the context indicates,
and vice versa. The enumeration of certain particulars as included
within the general language shall not restrict the scope or affect
the generality of such language, and except as expressly otherwise
provided herein, the term "include" shall mean "include, but shall
not be limited to" and the term "including" shall mean "including,
without limitation." Both Buyer and Seller are sophisticated
parties who have been represented by counsel in the negotiation of
this Agreement, and this Agreement shall not be construed as if it
had been prepared only by Buyer or Seller but rather as if both
Buyer and Seller had prepared the same. If any term, covenant,
condition, or provision of this Agreement or the application
thereof to any person or circumstance shall, at any time or to any
extent, be invalid or unenforceable, the remainder of this
Agreement, or the application of such term or provision to persons
or circumstances other than those to which it is held invalid or
unenforceable, shall not be affected thereby, and each provision of
this Agreement shall be valid and shall be enforced to the fullest
extent permitted by law.
(l) Time of Essence. Time is of the essence of this
Agreement and each and every term and provision hereof.
(m) Confidentiality and Indemnification. Buyer covenants and
agrees that: (i) all information provided to it by Seller in
connection with the Property or resulting from Buyer's inspections
of the Property and review of relevant materials will be held in
strict confidence by it and its agents and employees, (ii) Buyer
will return all such information to Seller in the event the
transaction contemplated by this Agreement is not consummated for
any reason, and (iii) Buyer will not rely thereon, but will instead
conduct Buyer's own due diligence inquiry with respect to the
Property. Buyer further agrees to indemnify and hold Seller
harmless from and against any and all claims or damages, including
attorneys' fees, resulting from Buyer's breach of the covenant
contained herein and/or from its or its agents' or employees'
entrance onto the Property. The indemnification contained herein
shall, without limitation, survive the termination of this
Agreement.
(n) Consents and Approvals. Both Seller and Buyer represent
and warrant to the other that each have obtained all requisite
consents and approvals, whether required by internal operating
procedures or otherwise, for entering into this Agreement and
closing the transaction contemplated hereby.
(o) No Other Agreements. After the Effective Date and until
the earlier of the termination of this Agreement or the Outside
Closing Date, Seller shall not enter into any written agreement
with any other person or entity for the sale of the Property;
provided, however, that Seller may accept back-up offers with
respect to purchase of the Property.
(p) Exhibits. All of the Exhibits referenced in this
Agreement are incorporated herein by reference.
(q) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but
all of which taken together shall be deemed one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.
BUYER:
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By Arden Realty, Inc., a Maryland corporation,
its sole general partner
By:/s/ Xxxxxx X. Xxxxxxx
Its: President and COO
SELLER:
THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, a New York corporation
By:/s/ Xxxxxx XxXxxxxx
Its: Vice President
"ESCROW AGENT:" The undersigned acknowledges receipt of this
Agreement and agrees to act in accordance with all applicable
provisions contained herein.
FIRST AMERICAN TITLE INSURANCE COMPANY,
a California corporation
By: Xxxx Xxxx Grotsch
Its: Escrow Officer
