AGREEMENT OF PURCHASE AND SALE
CALABASAS TECH CENTER
By and Between
CALABASAS TECH CENTER, INC.,
Seller
and
ARDEN REALTY LIMITED PARTNERSHIP,
Purchaser
DATED: March 31, 1998
TABLE OF CONTENTS
Page
1. Definitions 2
2. Sale; Purchase Price 3
3. Conditions Precedent 3
3.1 Seller's Deliveries 4
3.2 Due Diligence 4
3.3 Title and Survey 7
3.4 Tenant Estoppels 8
4. Closing; Conditions; Deliveries 8
4.1 Time, Place and Manner of Closing 8
4.2 Condition to Parties' Obligation to Close 9
4.3 Deliveries 9
4.4 Permitted Termination 11
5. Prorations 11
6. Seller's Representations, Warranties and Covenants 13
6.1 Power 13
6.2 Requisite Action 13
6.3 Authority 14
6.4 Validity 14
6.5. Conflicts 14
6.6 Leases 14
6.7 Service Contracts 14
6.8 Litigation 14
6.9 Environmental Condition 14
6.10 Condemnation 15
6.11 Employees 15
6.12 Notices of Violation 15
6.13 Indemnity 15
7. Purchase As-Is 16
8. Purchaser's Representations, Warranties and Covenants 17
8.1 Power 17
8.2 Requisite Action 17
8.3 Authority 17
8.4 Validity 18
8.5 Conflicts 18
8.6 Litigation 18
8.7 Indemnity 18
9. Closing Costs 18
10. Commissions 18
11. Escrow Closing 19
12. Attorneys' Fees and Costs 19
13. Notice 19
14. Fire or Other Casualty; Condemnation 20
15. Operations After Date of This Agreement 20
16. Assignment 21
17. Remedies 22
18. Miscellaneous 24
18.1 Entire Agreement 24
18.2 Time 24
18.3 Counterpart Execution 24
18.4 Governing Law 24
18.5 Publicity 24
18.6 Recordation 24
18.7 Benefit 25
18.8 Section Headings 25
18.9 Further Assurances 25
18.10 Severability 25
18.11 WAIVER OF TRIAL BY JURY 25
18.12 Independent Counsel 26
18.13 Governmental Approvals 26
18.14 No Waiver 26
18.15 Discharge and Survival 26
19. Exculpation of Seller and Related Parties 26
20. Audit Letter 27
AGREEMENT OF PURCHASE AND SALE
(CALABASAS TECH CENTER)
THIS AGREEMENT OF PURCHASE AND SALE is made and entered
into this 31st day of March, 1998 (the "Effective Date") by
and between CALABASAS TECH CENTER, INC., a Delaware
corporation ("Seller"), having an address of c/▇ ▇▇▇▇▇▇▇
Capital Management Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇; facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, and ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Purchaser"), having an address of ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
East Tower, Suite 700, Beverly Hills, California 90212,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; facsimile number (310) 274-
6218.
RECITALS
A. Seller is the owner of the Property (as defined below).
B. Seller desires to sell and convey to Purchaser, and
Purchaser desires to purchase from Seller, subject to the
terms and conditions set forth in this Agreement:
1. That certain land located at 26520-26672 Agoura
Road in the City of Calabasas, County of Los Angeles,
State of California, and more particularly described on
Exhibit A attached hereto (the "Land");
2. All of Seller's interest in and to any and all
rights, privileges and easements appurtenant to the
Land, including, without limitation, all minerals,
oils, gas and other hydrocarbon substances on and under
the Land, as well as all development rights and air
rights relating to the Land, and all water rights and
water stock relating to the Land, and any and all
easements, rights-of-way or appurtenances used in
connection with the beneficial use and enjoyment of the
Land (all of which are sometimes collectively referred
to herein as the "Appurtenances");
3. All of Seller's interest in and to any and all
improvements and fixtures located upon the Land,
including, without limitation, seven buildings used as
a research and development park, and all other
structures located on the Land, all fixtures,
apparatus, equipment and appliances used in connection
with the operation or occupancy thereof (all of which
are collectively referred to herein as the
"Improvements");
4. All of Seller's interest, as landlord, in and to
the leases, occupancy agreements, and amendments
thereto for the Improvements (the "Leases"), excepting
therefrom, the landlord's right to any rents or other
amounts accruing prior to the Closing Date thereunder.
The Leases are listed on Schedule 1;
5. All of Seller=s right, title and interest in and
to any personal property, if any, located on or in the
Land or used exclusively in connection with Seller's
operation, maintenance or management of the Land and/or
the Improvements (collectively, the "Personal
Property"). The Personal Property is listed on
Schedule 5;
6. All of Seller's right, title and interest in and
to the service contracts, equipment leases, other
agreements related exclusively to the Property
(collectively, the "Service Contracts"). The Service
Contracts are listed on Schedule 2; and
7. All of Seller's right, title and interest in and
to any and all intangible property owned by Seller and
used exclusively in connection with Seller's ownership,
use and/or operation of the Land or the Improvements,
to the extent assignable, including, without
limitation, warranties and guaranties, the right to use
any trade names now used in connection with the Land or
the Improvements, the books and records relating to the
Property, inventory records, building management
records, payroll records and all other books and
records relating to the operation and management of the
Land and/or the Improvements (collectively, the
"Intangible Property"). The Intangible Property shall
not include any claims of Seller against third parties
or any books, records, reports, documents or
information which Seller has deemed to be confidential,
privileged or proprietary, or any computer discs, tapes
and other data bases or software (provided that Seller
shall provide copies of printouts of such data to the
extent same regards exclusively the Property).
The Land, the Appurtenances and the Improvements are
sometimes collectively referred to herein as the "Real
Property." The Real Property, the Personal Property,
the Leases, the Services Contracts and the Intangible
Property are sometimes collectively referred to herein
as the "Property."
NOW, THEREFORE, the parties hereto hereby agree as
follows:
1. Definitions. As used in this Agreement, the following
terms have the following meanings:
Closing Date. As agreed between Seller and Purchaser
but no later than May 14, 1998 (a pre-closing shall be
held on May 13, 1998).
Due Diligence Period. The period commencing on the
Effective Date and ending at 5:00 p.m. Chicago,
Illinois time on April 30, 1998.
Escrow Company. Near North National Title Corporation.
Title Company. Near North National Title Corporation
as agent for Chicago Title Company.
2. Sale; Purchase Price.
2.1 Subject to the terms and provisions hereof, Seller
agrees to sell and convey to Purchaser, and Purchaser agrees
to purchase from Seller the Property.
2.2 The total purchase price (hereinafter called the
"Purchase Price") to be paid by Purchaser to Seller for the
Property shall be Forty-Six Million Fifty Thousand and
no/100 Dollars ($46,050,000.00). The Purchase Price shall
be payable in the following manner:
(a) ▇▇▇▇▇▇▇ Money. Purchaser shall, within two
(2) business days after the execution and delivery of this
Agreement by Purchaser and Seller, deposit with the Escrow
Company, as escrow agent, the amount of Four Hundred
Thousand and 00/100 Dollars ($400,000.00) (hereinafter
called the "▇▇▇▇▇▇▇ Money") which ▇▇▇▇▇▇▇ Money shall be in
the form of a wire transfer of immediately available United
States of America funds. Except as otherwise expressly
provided herein to the contrary, the ▇▇▇▇▇▇▇ Money shall
become nonrefundable at 5:00 p.m., Chicago, Illinois time,
of the last day of the Due Diligence Period. The ▇▇▇▇▇▇▇
Money shall be held and disbursed by the Escrow Company
acting as escrow agent pursuant to the ▇▇▇▇▇▇▇ Money Escrow
Agreement in the form of Exhibit B attached hereto which the
parties have executed simultaneously with this Agreement.
The ▇▇▇▇▇▇▇ Money shall be invested in a federally issued or
insured interest bearing instrument with any interest
accruing thereon being deemed part of the ▇▇▇▇▇▇▇ Money and
shall be paid to the party to which the ▇▇▇▇▇▇▇ Money is
paid pursuant to the provisions hereof. If the sale
hereunder is consummated in accordance with the terms
hereof, the ▇▇▇▇▇▇▇ Money and any interest thereon shall be
applied to the Purchase Price to be paid by Purchaser at the
Closing. In the event of a default hereunder by Purchaser
or Seller, the ▇▇▇▇▇▇▇ Money shall be applied as provided
herein.
(b) Cash Balance. Purchaser shall pay the
balance of the Purchase Price, subject to the prorations
described in Section 5 below, in cash (the "Cash Balance")
by wire transfer of immediately available United States of
America funds to the Title Company for payment to Seller, in
accordance with the terms and conditions of this Agreement
no later than 11:00 a.m. (Chicago, Illinois time) on the
Closing Date.
3. Conditions Precedent. In the event any of the
conditions set forth in Sections 3.2(b), 3.3, or 3.4 below
shall not have been fulfilled, accepted or deemed accepted
or waived as provided herein on or before the applicable
dates specified herein, Purchaser shall have the right to
terminate this Agreement by giving written notice thereof to
Seller on or before the respective dates specified herein,
and thereupon all ▇▇▇▇▇▇▇ Money shall be refunded to
Purchaser and neither party shall have any further rights or
obligations hereunder, except for the Surviving Obligations
(as hereinafter defined).
3.1 Seller's Deliveries. Seller has delivered or made
available or within five (5) days after the Effective Date
shall deliver or make available to Purchaser complete copies
of the following items which are in Seller's possession:
(a) all Leases;
(b) all Service Contracts;
(c) copies of the real estate tax bills for the
current year and the last two prior years, if available;
(d) any existing environmental reports, including
any Phase I environmental report;
(e) the existing owner's title policy;
(f) the existing survey (the "Existing Survey");
(g) annual operating statements for the Property
for the last three calendar years and monthly operating
statements for the months in the current year, including the
calculation of escalations for expenses and taxes;
(h) existing plans and specifications;
(i) copies of all pending Proposals (as defined
in Section 15(b)) presently outstanding, if any; and
(j) a copy of Seller's internal rent roll for the
Property.
Seller shall provide to Purchaser any documents
described in this Section 3.1 and first coming into Seller's
possession or produced by Seller after the initial delivery
and continue to provide the same during the pendency of this
Agreement.
In the event this Agreement terminates for any reason,
Purchaser shall immediately return to Seller all information
delivered by Seller or Seller's agent(s) to Purchaser or
Purchaser's agent(s). The foregoing provision shall survive
termination of this Agreement.
3.2 Due Diligence. Purchaser and its representatives
shall be permitted to enter upon the Property at any
reasonable time and from time to time before the Closing
Date to examine, inspect and investigate the Property as
well as all records and other documentation provided by
Seller or located at the Property or at the offices of
Seller's property manager, ▇▇▇▇▇▇▇ Properties, Ltd., located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(at which office Seller's operating files for the Property
shall be available for review) (collectively, "Due
Diligence"). The Due Diligence shall be subject to the
terms, conditions and limitations set forth in this Section
3.2.
(a) Purchaser shall have a right to enter upon
the Property for the purpose of conducting its Due Diligence
(and, after the Due Diligence Period, to prepare to operate
the Property) provided that in each such instance (i)
Purchaser notifies Seller of its intent to enter the
Property to conduct its Due Diligence not less than 36 hours
prior to such entry; (ii) the date and approximate time
period are scheduled with Seller; (iii) Purchaser is in full
compliance with the insurance requirements set forth in
Section 3.2(f) hereof; and (iv) Purchaser shall not be
permitted to conduct interviews with the tenants of the
Property and shall not have access to areas of a tenant's
space which such tenant deems to be a "sensitive area." At
Seller's election, a representative of Seller shall be
present during any entry by Purchaser or its representatives
upon the Property for conducting its Due Diligence.
Purchaser shall take all necessary actions to insure that
neither it nor any of its representatives unreasonably
interfere with the tenants or ongoing operations occurring
at the Property. Purchaser shall not cause or permit any
mechanic liens, materialmen's liens or other liens to be
filed against the Property as a result of its Due Diligence.
(b) Purchaser shall have through the last day of
the Due Diligence Period in which to conduct its Due
Diligence and, in Purchaser's sole discretion, to determine
whether the Property is acceptable to Purchaser. If during
the Due Diligence Period, Purchaser becomes aware of any
problem or defect in the Property or any other aspect of the
Property which Purchaser determines makes the Property
unsuitable to Purchaser, Purchaser may terminate this
Agreement by giving written notice of termination to Seller
on or before the last day of the Due Diligence Period. If
Purchaser does not timely give notice of termination as
aforesaid, Purchaser shall be deemed to have accepted the
Property and this Agreement shall continue in full force and
effect. In the event of such termination, the ▇▇▇▇▇▇▇ Money
shall be returned to Purchaser and neither party shall have
any further obligations to the other party hereunder, except
for the Surviving Obligations.
(c) Purchaser shall, at least thirty-one (31)
days prior to the Closing Date, notify Seller in writing
requesting termination of any or all of the Service
Contracts that Purchaser desires not to assume. Seller
shall (i) terminate all such Service Contracts which are
noted on Schedule 2 as being terminable upon thirty (30)
days' notice, and (ii) use commercially reasonably efforts
to terminate all other such Service Contracts (provided that
Seller shall not be required to make any termination
payment) that Purchaser does not elect to assume. If
Purchaser does not timely give notice requesting termination
of a Service Contract, Purchaser shall be deemed to have
accepted the assumption of such Service Contract. Purchaser
shall assume all other Service Contracts (including Service
Contracts which Seller is unable to terminate under the
preceding clause (ii)).
(d) Purchaser shall have the right to conduct, at
its sole cost and expense, any inspections, studies or tests
that Purchaser deems appropriate in determining the
condition of the Property, provided, however, Purchaser is
not permitted to perform any intrusive testing, including,
without limitation, a Phase II environmental assessment or
boring, without (i) submitting to Seller the scope and
inspections for such testing; and (ii) obtaining the prior
written consent of Seller.
(e) Purchaser agrees and covenants with Seller
not to disclose to any third party (other than lenders,
accountants, attorneys and other professionals and
consultants in connection with the transaction contemplated
herein) without Seller's prior written consent, unless
Purchaser is obligated by law to make such disclosure, any
of the reports or any other documentation or information
obtained by Purchaser which relates to the Property or
Seller in any way, all of which shall be used by Purchaser
and its agents solely in connection with the transaction
contemplated hereby. In the event that this Agreement is
terminated, Purchaser agrees that all such information will
be held in strict confidence. Notwithstanding the
foregoing, Purchaser may issue press releases or make other
disclosures to the extent required by applicable securities
laws. Purchaser agrees to use its best efforts to obtain
Seller's approval of the form and substance of any such
disclosure.
(f) Purchaser agrees to indemnify, defend and
hold Seller and its partners, trustees, beneficiaries,
shareholders, members, managers, advisors and other agents
and their respective partners, trustees, beneficiaries,
employees, officers, directors and shareholders (the
"Indemnified Parties") harmless from and against any and all
claims, losses, damages, costs and expense (including,
without limitation reasonable attorneys fees and court
costs) suffered or incurred by any of the Indemnified
Parties as a result of or in connection with any activities
of Purchaser (including activities of any of Purchaser's
employees, consultants, contractors or other agents) on or
about the Property, including, without limitation,
mechanics' liens, damage to the Property, injury to persons
or property resulting from such activities in connection
therewith, and in the event that the Property is disturbed
or altered in any way as a result of such activities.
Purchaser shall promptly restore the Property to its
condition existing prior to the commencement of such
activities which disturb or alter the Property.
Furthermore, Purchaser agrees to maintain and cause any of
its representatives or agents conducting any Due Diligence
to maintain and have in effect commercial general liability
insurance with (i) all risk coverage, (ii) waiver of
subrogation, and (iii) limits of not less than One Million
and 00/100 ($1,000,000.00) for personal injury, including
bodily injury and death, and property damage. Such
insurance shall name the Seller, Heitman Capital Management
Corporation ("HCMC") and ▇▇▇▇▇▇▇ Properties Ltd. as
additional insured parties. Purchaser shall deliver to
Seller a copy of the certificate of insurance effectuating
the insurance required hereunder prior to the commencement
of such activities which certificate shall provide that such
insurance shall not be terminated or modified without at
least thirty (30) days' prior written notice to Seller.
(g) Purchaser acknowledges and agrees that it
shall have no right to review or inspect any of the
following: (i) internal memoranda, correspondence,
analyses, documents or reports prepared by or for Seller or
an affiliate of Seller in connection with this (A) Agreement
(B) the transaction contemplated by this Agreement, (C) the
acquisition of the Property by Seller (other than
environmental reports, if any) or (D) any prior or current
contemplated reorganization of Seller and certain affiliated
funds, (ii) communications between Seller and HCMC, and
(iii) appraisals, assessments or other valuations of the
Property in the possession of Seller or HCMC.
(h) Sections 3.2(e) and 3.2(f) and such other
designated provisions in this Agreement shall survive
Closing or any termination of this Agreement (collectively,
the "Surviving Obligations").
3.3 Title and Survey. Seller shall, at Seller's sole
cost and expense, obtain and deliver to Purchaser for
Purchaser's review a preliminary title report along with a
copy of each instrument listed as an exception thereon (the
"Title Report") on the Real Property issued by the Title
Company and any existing survey of the Property in Seller's
possession or control (the "Existing Survey"). During the
Due Diligence Period, Purchaser shall have the right to
obtain, at its sole cost and expense, any desired
endorsements to the Title Report which are available, if
any. Purchaser may elect to receive an update to the
Existing Survey (the "Updated Survey") by notifying Seller
of such election in writing within five (5) days after
Purchaser's receipt of the Existing Survey. If Purchaser so
elects, Seller shall, at Purchaser's sole cost and expense,
obtain and deliver to Purchaser for Purchaser's review the
Updated Survey. The Updated Survey shall: (i) be made in
accordance with the specifications listed on Exhibit C
attached hereto, and (ii) contain a certification in the
form set forth on Exhibit D attached hereto. Purchaser
shall have until the date which is fifteen days after
receipt of the Title Commitment and Existing Survey (such
date being referred to as the "Title Review Date") for
examination of Title Commitment and Existing Survey and the
making of any objections thereto, said objections to be made
in writing and delivered to Seller on or before the end of
the Title Review Date. If Purchaser shall fail to make any
objections on or before the Title Review Date, Purchaser
shall be deemed to have accepted all exceptions to the Title
Commitment and the form and substance of the Existing Survey
and all matters shown thereon; all such exceptions and
matters and any exceptions or matters caused by or through
Purchaser shall be included in the term "Permitted
Exceptions" as used herein. In the event Purchaser elects
to receive the Updated Survey, then Purchaser shall have
until five (5) days after receipt thereof for examination of
the Updated Survey and the making of written objections
thereto and delivery of same to Seller. If Purchaser shall
fail to deliver written notice to Seller of any such
objections to the Updated Survey on or before the expiration
of such 5 day period, Purchaser shall be deemed to have
accepted the form and substance of the Updated Survey and
all matters shown thereon; all such exceptions and matters
and any exceptions or matters caused by or through Purchaser
shall be included as Permitted Exceptions. Provided that
Purchaser receives the Existing Survey before the end of the
Due Diligence Period, Purchaser may not object to matters
shown on the Updated Survey that were shown on the Existing
Survey, and shall not unreasonably withhold its approval of
the Updated Survey. If the Updated Survey is delivered less
than 5 days before Closing, the Closing Date shall be
extended by not more than 5 days to provide Purchaser with a
full 5 day period to review the Updated Survey. If any
objections to (i) the Title Commitment or Existing Survey
are made within the Title Review Period, or (ii) the Updated
Survey within the 5 day review period described above, then
Seller shall have the right, but not the obligation, to cure
(by removal, endorsement or otherwise; provided that any
endorsement, other than with respect to mechanics' liens,
monetary judgments and/or other monetary encumbrances, shall
be subject to Purchaser's prior written consent, not to be
unreasonably withheld) such objections on or before the
Closing Date. If the objections are not cured by Seller by
the scheduled Closing Date, then Purchaser may as its only
option, elect to either: (i) waive such objection and
consummate the transaction contemplated by this Agreement;
or (ii) terminate this Agreement, in which event the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser and neither
party shall have any further obligations to the other party
except for the Surviving Obligations.
3.4 Tenant Estoppels.
(a) Seller shall deliver to Purchaser, no later than
five (5) days prior to the Closing Date, estoppel
certificates, in the form of Exhibit E attached hereto from
tenants leasing at least eighty percent (80%) of the square
footage of the Property currently leased. Purchaser agrees
to reasonably approve changes made by tenants to the form of
the tenant estoppel certificate (and agrees that the tenant
may delete the language contained in paragraph 10 thereof)
and, if the tenant is not willing to deliver the estoppel
certificate in the form of Exhibit E, shall accept the form
of estoppel required under such tenant's lease.
(b) Prior to the Closing Date, Seller shall deliver to
Purchaser all estoppel certificates it receives before the
Closing Date. If estoppel certificates in addition to those
required to satisfy the condition in Section 3.4 are
received, and the information set forth in such additional
estoppel certificates would materially and adversely affect
Purchaser's ownership or operation of the Property after the
Close of Escrow, then Purchaser may, on or prior to the
Closing Date, deliver written notice to Seller of same,
which notice shall describe in reasonable detail the
disapproved items. If Purchaser makes such notice, Seller
may attempt to cure same, to Purchaser's reasonable approval
(and Seller may extend the Closing Date by not more than
five (5) business days to complete such cure). If Seller
elects not to cure, or fails to cure by the end of such five
(5) business day period, this Agreement shall terminate, the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser, and neither
party shall have any obligation to the other under this
Agreement except as expressly provided herein.
4. Closing; Conditions; Deliveries.
4.1 Time, Place and Manner of Closing. The Closing
shall be held on the Closing Date in the offices of Seller's
counsel in Los Angeles or at any location mutually
acceptable to the parties.
4.2 Condition to Parties' Obligation to Close. In
addition to all other conditions set forth herein, the
obligation of Seller, on the one hand, and Purchaser, on the
other hand, to consummate the transaction contemplated
hereunder shall be contingent upon the following:
(a) The other party's representations and
warranties contained herein shall be true and correct in all
material respects as of the date of this Agreement and the
Closing Date;
(b) As of the Closing Date, the other party shall
have performed its obligations hereunder in all material
respects and all deliveries to be made at Closing have been
tendered;
(c) As of the Closing Date, there shall exist no
pending action, suit or proceeding with respect to the other
party before or by any court or administrative agency which
seeks to restrain or prohibit, or to obtain damages or a
discovery order with respect to, this Agreement or the
consummation of the transactions contemplated hereby; and
(d) Simultaneously with execution of this
Agreement, Purchaser shall have delivered to Seller a fully
executed original ERISA certificate in the form of Exhibit F
attached hereto.
4.3 Deliveries. At Closing each party shall execute
and deliver to the other and/or the Title Company the
following documents and other items:
(a) Seller shall deliver to Purchaser and/or the Title
Company:
(i) a grant deed (the "Deed") to the
Property in recordable form, duly executed by Seller and
acknowledged and in substantially the same form as set forth
in Exhibit G attached hereto, conveying to Purchaser title
to the Real Property, subject to the Permitted Exceptions;
(ii) a ▇▇▇▇ of sale duly executed by Seller
and in substantially the same form as set forth in Exhibit H
attached hereto, conveying to Purchaser title to all
personal property owned by Seller and located at the Real
Property, if any;
(iii) an assignment to Purchaser of the
Leases duly executed by Seller and in substantially the same
form as set forth in Exhibit I attached hereto;
(iv) an assignment to Purchaser of the
Service Contracts in accordance with Section 3.2(c), and
other third party contracts pursuant to Section 5.8, being
assumed hereunder, licenses and permits affecting the
Property (to the extent freely assignable) duly executed by
Seller and in substantially the same form as set forth in
Exhibit J attached hereto; and
(v) a non-foreign transferor certification
pursuant to Section 1445 of the Internal Revenue Code and
any similar provisions of California state law, in
substantially the same form as set forth on Exhibit K
attached hereto (the "Affidavit").
(b) Purchaser shall deliver to Seller or the
Title Company:
(i) the Cash Balance, by wire transfer, as
provided in Section 2.2 hereof; and
(ii) an assumption duly executed by the
Purchaser of the assignments described in Sections
4.3(a)(iii) and (iv), in substantially the same form as set
forth in Exhibit I and Exhibit J attached hereto,
respectively.
(c) Seller and Purchaser shall jointly deliver to
the Title Company:
(i) A closing statement;
(ii) All transfer declarations or similar
documentation required by law;
(iii) Letters to the tenants of the
Property in the form of Exhibit L attached hereto; and
(iv) Notices in substantially the form
attached hereto as Exhibit M attached hereto to the other
party to each Service Contract assumed by Purchaser pursuant
to Section 3.2(c) of this Agreement.
(d) Seller shall deliver to Purchaser outside of
Escrow:
(i) Possession of the Property, on the
Closing Date; and
(ii) To the extent in Seller's possession,
any keys, original as-built plans, original Service
Contracts, unexpired warranties for any of the capital
improvements to the Property or the Personal Property,
original guaranties, original Leases, original tenant
estoppel certificates and the originals of any other
documents delivered or made available to Purchaser pursuant
to Section 3.1 hereof (confidential, privileged or
proprietary information shall not be provided).
(e) The Title Company shall irrevocably commit to
Purchaser that it is prepared to issue to Purchaser an ALTA
Form B (Revised 10/17/70; if the Title Company no longer
issues the 10/17/70 form) extended coverage policy of title
insurance, in the form required under Section 3.3, effective
as of the recording of the Deed, insuring Purchaser as the
owner of the Real Property, and removing all exceptions
other than Permitted Exceptions. Notwithstanding the
foregoing, if the Title Company is willing to accept a gap
undertaking from Seller in lieu of confirmation that the
Deed has been recorded, then the Closing (including delivery
of the Purchase Price proceeds to Seller) shall occur when
such gap undertaking is delivered and all other conditions
precedent hereunder have been satisfied or waived as
provided herein.
4.4 Permitted Termination. So long as a party is not
in default hereunder, if any condition to such party=s
obligation to proceed with the Closing hereunder has not
been satisfied or waived as of the Closing Date or such
earlier date as provided herein, such party may, in its sole
discretion, terminate this Agreement by delivering written
notice to the other party before the Closing Date, or elect
to close, notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have
waived any such condition.
5. Prorations. All items of income and expense shall be
paid, prorated or adjusted as of the close of business on
the day prior to the Closing Date (the "Proration Date") in
the manner hereinafter set forth:
5.1 Purchaser shall be credited with (i) the amount of
(A) all rents and (B) all expense contributions, real estate
tax contributions, and other reimbursements from tenants
("Tenant Contributions") received by Seller and attributable
to any month commencing after the Closing Date and (ii) all
unapplied cash security deposits made by tenants under all
leases of the Real Property in effect as of the Closing
Date.
5.2 All rents and Tenant Contributions for the month
of Closing shall be prorated between Purchaser and Seller
based upon their respective days of ownership for such month
in which the Closing occurs. Neither Purchaser nor Seller
shall receive credit at Closing for any payments of rental
obligations due but not paid as of the Proration Date. At
the time of the final calculation and collection from
tenants of Tenant Contributions for 1998, whether in the
nature of a reconciliation payment or full payment, in
arrears, there shall be a reproration between Purchaser and
Seller as to the Tenant Contributions. Such reproration
shall not be made on the basis of a per diem method of
allocation, but shall instead be apportioned between Seller
and Purchaser on the basis of the relative share of actual
expenses in question incurred by Seller and Purchaser during
the lease year in question. Seller covenants to provide
Purchaser with any information necessary to finalize such
calculation. Purchaser covenants to ▇▇▇▇ tenants for
amounts due from tenants attributable to periods prior to
Closing and diligently pursue collections from tenants and,
as collected, to timely deliver to Seller reproration
amounts due Seller (including without limitation under
Section 5.6 below).
5.3 Intentionally deleted.
5.4 Any amounts received from tenants after Closing
shall be applied on a tenant by tenant basis in the
following order: (i) first on account of any amount
currently due Purchaser from such tenant(s); (ii) next, on
account of any amount due Seller from such tenant(s) for the
period up to and including the Proration Date and (iii)
finally, any balance then remaining to Purchaser. Seller
retains the right to pursue its remedies against tenants
after Closing for any delinquent payments or other amounts
owed to Seller, except for actions or proceedings affecting
possession or landlord liens. However, Seller will not
exercise any such rights or remedies unless such delinquent
rents have not been collected by Purchaser and paid to
Seller within three (3) months after the Closing Date. Any
money due to Seller shall be remitted to Seller within five
(5) business days after the end of each month in which
Purchaser receives such money.
5.5 Operating expenses, including, without limitation,
ordinary operating expenses, permits, licenses, membership
dues, and any other prepaid expenses, shall be prorated
between Purchaser and Seller based upon the actual days of
their respective ownership of the Property utilizing the
actual expenses or reasonable estimates (prorations made
based upon estimates shall be reprorated after the Closing
Date based upon the actual expenses once known).
5.6 Real estate taxes shall be prorated between Seller
and Purchaser based upon the actual days of ownership of the
parties for the year in which Closing occurs utilizing the
most recent ascertainable tax ▇▇▇▇(s). Seller and Purchaser
agree to reprorate said real estate taxes upon Purchaser=s
receipt of supplemental tax ▇▇▇▇(s).
Notwithstanding the foregoing, as between Seller and
Purchaser, Purchaser shall be solely responsible for any
real estate taxes attributable to the increase in the
assessed value of the Property resulting from Purchaser's
acquisition thereof or any improvements made after to the
Property after Closing. Accordingly, in the reproration and
any subsequent billing and collection of Tenant
Contributions for ad valorem real estate taxes and
assessments, such amounts shall be allocated to Seller on a
tenant-by-tenant basis before any such amounts are allocated
to Purchaser on account of the any such increased
assessment.
5.7 Except for utilities billed directly to Tenants,
utilities shall be prorated as of the Proration Date based
upon either meter readings on the Proration Date or the
prior month=s actual invoices, unless the Purchaser obtains
new utility service in its own name effective as of the
Closing Date.
5.8 Purchaser shall be responsible for and pay: (a)
the cost of all tenant improvements, (b) all leasing
commissions and (c) space planning and legal costs (those
matters listed under (a), (b) and (c) are hereinafter
collectively referred to as "Leasing Costs") due and payable
as a result of leases made pursuant to: (i) Proposals
listed on Schedule 4 attached hereto, and (ii) any Proposal
which Purchaser approves, or is deemed to have approved as
provided in Section 15. Purchaser shall also be responsible
for and pay any leasing commissions due under Leases as a
result of the tenant exercising any renewal right (or
failing to exercise any termination right), to the extent
such commission obligations are set forth in Schedule 4
attached hereto. Purchaser shall assume any agreements
evidencing payment obligations of Purchaser under this
Section 5.8. Seller shall be responsible for and pay any
leasing commissions (i) due under currently existing leasing
agreements for Leases existing as of the Effective Date, as
a result of the tenant exercising any renewal right (or
failing to exercise any termination right), to the extent
such commission obligations are not set forth in Schedule 4
attached hereto or (ii) due under any Proposal listed on
Schedule 4, which commission obligation is not listed on
Schedule 4.
5.9 All insurance policies and property management
agreements (including without limitation the property
management/leasing agreement with HCMC) shall be terminated
as of the Closing Date and there shall be no proration with
respect to these items.
All other items which are customarily prorated in
transactions similar to the transaction contemplated hereby
and which were not heretofore dealt with, will be prorated
as of the Proration Date. In the event any prorations or
computations made under this Section are based on estimates
or prove to be incorrect, then either party shall be
entitled to an adjustment to correct the same, provided that
it makes written demand on the party from whom it is
entitled to such adjustment within one hundred and twenty
days after the end of the current calendar year. Purchaser
shall indemnify and hold Seller harmless from and against
any and all claims and costs (i) in connection with
Purchaser's assumption of responsibility for the Leasing
Costs as provided in Section 5.8 herein, including but not
limited to any and all obligations under third party
contracts assumed by Purchaser as provided by Sections 4.3
(a) (iv) hereof; and (ii) for which Purchaser received
credits pursuant to this Section 5. The indemnity set forth
in the immediately preceding sentence and the covenants
contained in this Section 5 shall survive Closing.
6. Seller's Representations, Warranties and Covenants.
Seller hereby represents, warrants and covenants as follows:
6.1 Power. Seller has the legal power, right and
authority to enter into this Agreement and the instruments
referenced herein and to consummate the transactions
contemplated hereby.
6.2 Requisite Action. All requisite action
(corporate, trust, partnership or otherwise) has been taken
by Seller in connection with entering into this Agreement
and the instruments referenced herein and the consummation
of the transactions contemplated hereby. No consent of any
partner, shareholder, member, creditor, investor, judicial
or administrative body, authority or other party is required
which has not been obtained to permit Seller to enter into
this Agreement and consummate the transaction contemplated
hereby.
6.3 Authority. The individuals executing this
Agreement and the instruments referenced herein on behalf of
Seller have the legal power, right and actual authority to
bind Seller to the terms and conditions hereof and thereof.
6.4 Validity. This Agreement and all documents
required hereby to be executed by Seller are and shall be
valid, legally binding obligations of and enforceable
against Seller in accordance with their terms.
6.5. Conflicts. None of the execution and delivery of
this Agreement and documents referenced herein, the
incurrence of the obligations set forth herein, the
consummation of the transactions herein contemplated or
referenced herein conflicts with or results in the material
breach of any terms, conditions or provisions of or
constitutes a default under, any bond, note, or other
evidence of indebtedness or any contract, lease or other
agreements or instruments to which Seller is a party.
6.6 Leases. Attached hereto as Schedule 1 is a
complete and accurate list of the leases, occupancy
agreements and amendments thereto relating to the Property,
which shall be updated by Seller prior to Closing, if
necessary, including the addition thereto of leases executed
after the date hereof through Closing pursuant to Proposals
which are approved or deemed approved by Purchaser as
provided under Section 15. With respect only to leases for
which no estoppel certificate is returned by the tenant
thereunder, to the knowledge of Seller: (a) the lease
documents delivered or made available to Purchaser in
accordance with this Agreement constitute complete and
accurate copies of the documents constituting each such
lease and (b) there are no other written or oral agreements
between Seller and the applicable tenant with respect to the
Property or the tenancy under such lease.
6.7 Service Contracts. Attached hereto as Schedule 2
is a complete and accurate list of the service contracts,
equipment leases and other agreements relating to the
Property which shall be updated by Seller prior to Closing,
if necessary.
6.8 Litigation. Except as set forth on Schedule 3 no
litigation has been served upon Seller, nor to the best of
the Seller's knowledge has been filed, or threatened in
writing, affecting the Seller's ability to consummate the
transaction contemplated by this Agreement. Schedule 3
shall be updated by Seller prior to Closing, if necessary.
Purchaser shall have the right to reasonably disapprove any
update to Schedule 3 made after the end of the Due Diligence
Period, in which event this Agreement shall terminate, the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser, and neither
party shall have any further obligation to the other except
as expressly provided herein.
6.9 Environmental Condition. Seller has no knowledge
of any violation of Environmental Laws related to the
Property or the presence or release (other than as permitted
by law) of Hazardous Materials on or from the Property
except as disclosed in the environmental reports, studies
and other information relating to the environmental
condition of the Property delivered by Seller to Purchaser
or made available for Purchaser=s review. The term
AEnvironmental Laws@ includes, without limitation, the
Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act
(ACERCLA@) and other federal laws governing the environment
as in effect on the date of this Agreement together with
their implementing regulations and guidelines as of the date
of this Agreement, and all state, regional, county,
municipal and other local laws, regulations and ordinances
that are equivalent or similar to the federal laws recited
above or that purport to regulate Hazardous Materials in
effect as of the date of this Agreement. "Hazardous
Materials" means any substance which is (i) designated,
defined, classified or regulated as a hazardous substance,
hazardous material, hazardous waste, pollutant or
contaminant under any Environmental Law, as currently in
effect as of the date of this Agreement, (ii) petroleum
hydrocarbon, including crude oil or any fraction thereof and
all petroleum products, (iii) PCBs, (iv) lead, (v) friable
asbestos, (vi) flammable explosives, (vii) infectious
materials, or (viii) radioactive materials.
6.10 Condemnation. To Seller's knowledge, there are no
condemnation proceedings, either instituted or planned to be
instituted, which could materially and adversely affect
either the use or operation of the Property for its intended
purpose or the value of the Property.
6.11 Employees. Seller has no employees.
6.12 Notices of Violation. To Seller's knowledge,
Seller has received no notice of violation of fire, building
or life safety codes or ordinances from any local
governmental agency, which notice remains outstanding. For
purposes of this Section 6.12 only, the parties listed in
clause (i) of the grammatical paragraph following Section
6.13 below shall be limited to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Asset
Manager, HCMC, and not to any other parties.
6.13 Indemnity. Seller shall indemnify and hold
Purchaser harmless from and against any and all claims,
actions, judgments, liabilities, liens, damages, penalties,
fines, costs and reasonable attorneys' fees, asserted
against, imposed on or suffered or incurred by Purchaser (or
the Property) to the extent arising out of or in connection
with any breach of the warranties, representations and
covenants set forth in this Section 6. The warranties and
representations set forth in this Section 6 shall be deemed
remade as of Closing, and said warranties and
representations as so remade, and the indemnity obligation
set forth in herein shall survive Closing, provided that any
claim by Purchaser based upon a misrepresentation or breach
of any warranty or representation or indemnity obligation
under this Section 6 shall be deemed waived unless
Purchaser has given Seller notice of such claim prior to
December 31, 1998.
As used in this Section 6, the term "to Seller's knowledge"
"actual knowledge" or "best of Sellers knowledge" (i) shall
mean and apply to the actual knowledge of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Executive Vice President of HCMC, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice
President of HCMC, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Asset Manager,
HCMC, and not to any other parties, (ii) shall mean the
actual knowledge of such individuals, without any
investigation or inquiry of any kind, and (iii) shall not
mean such individuals are charged with knowledge of the
acts, omissions and/or knowledge of Seller's agents or
employees.
Notwithstanding anything contained in this Agreement to
the contrary, Seller shall have no liability for breaches of
any representations, warranties and certifications (the
"Representations") which are made by Seller herein or in any
of the documents or instruments required to be delivered by
Seller hereunder if Purchaser, its officers, employees,
shareholders, members, partners, or agents had knowledge of
such breach by Seller at Closing and Purchaser shall not
have the right to bring any lawsuit or other legal action
against Seller, nor pursue any other remedies against
Seller, as a result of the breach of such Representation
caused thereby, but Purchaser's sole right shall be to
terminate this Agreement in which event, the ▇▇▇▇▇▇▇ Money
shall be returned to Purchaser.
7. Purchase As-Is. EXCEPT FOR THE REPRESENTATIONS OF
SELLER EXPRESSLY SET FORTH IN SECTION 6 OF THIS AGREEMENT,
PURCHASER WARRANTS AND ACKNOWLEDGES TO AND AGREES WITH
SELLER THAT PURCHASER IS PURCHASING THE PROPERTY IN ITS "AS-
IS, WHERE IS" CONDITION "WITH ALL FAULTS" AS OF THE CLOSING
DATE AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY WARRANTIES,
REPRESENTATIONS OR GUARANTEES, EITHER EXPRESS OR IMPLIED, AS
TO ITS CONDITION, FITNESS FOR ANY PARTICULAR PURPOSE,
MERCHANTABILITY, OR ANY OTHER WARRANTY OF ANY KIND, NATURE,
OR TYPE WHATSOEVER FROM OR ON BEHALF OF SELLER. EXCEPT FOR
THE REPRESENTATIONS OF SELLER EXPRESSLY SET FORTH IN SECTION
6 OF THIS AGREEMENT, SELLER SPECIFICALLY DISCLAIMS ANY
WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST
OR PRESENT, EXPRESS OR IMPLIED, CONCERNING (A) THE VALUE,
NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE WATER, STRUCTURAL INTEGRITY, SOIL
AND GEOLOGY; (B) THE INCOME TO BE DERIVED FROM THE PROPERTY;
(C) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL
ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON,
INCLUDING THE POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE
PROPERTY; (D) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS
OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF
ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (E) THE
HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (F) THE
MANNER OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY,
INCORPORATED INTO THE PROPERTY; (G) THE MANNER, QUALITY,
STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (H) THE
PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR
ADJACENT TO THE PROPERTY OR ANY OTHER ENVIRONMENTAL MATTER
OR CONDITION OF THE PROPERTY; OR (I) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY. PURCHASER ACKNOWLEDGES AND AGREES
THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF
SELLER CONTAINED IN SECTION 6 OF THIS AGREEMENT, ANY
INFORMATION PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT
TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND
THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO
REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY
ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION
THEREOF, FURNISHED BY ANY REAL ESTATE BROKER, AGENT,
EMPLOYEE, SERVANT OR OTHER PERSON EXCEPT FOR THE EXPRESS
REPRESENTATIONS SET FORTH IN SECTION 6 OF THIS AGREEMENT.
PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT PURCHASER IS
A SOPHISTICATED AND EXPERIENCED PURCHASER OF PROPERTIES SUCH
AS THE PROPERTY AND HAS BEEN DULY REPRESENTED BY COUNSEL IN
CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT. EXCEPT
AS MAY OTHERWISE BE PROVIDED HEREIN, SELLER HAS MADE NO
AGREEMENT TO ALTER, REPAIR OR IMPROVE ANY OF THE PROPERTY.
8. Purchaser's Representations, Warranties and Covenants.
Purchaser hereby represents, warrants and covenants as
follows:
8.1 Power. Purchaser has the legal power, right and
authority to enter into this Agreement and the instruments
referenced herein and to consummate the transactions
contemplated hereby.
8.2 Requisite Action. All requisite action
(corporate, trust, partnership or otherwise) has been taken
by Purchaser in connection with entering into this Agreement
and the instruments referenced herein and the consummation
of the transactions contemplated hereby. No consent of any
partner, shareholder, member, creditor, investor, judicial
or administrative body, authority or other party is required
which has not been obtained to permit Purchaser to enter
into this Agreement and consummate the transaction
contemplated hereby.
8.3 Authority. The individuals executing this
Agreement and the instruments referenced herein on behalf of
Purchaser have the legal power, right and actual authority
to bind Purchaser to the terms and conditions hereof and
thereof.
8.4 Validity. This Agreement and all documents
required hereby to be executed by Purchaser are and shall be
valid, legally binding obligations of and enforceable
against Purchaser in accordance with their terms.
8.5 Conflicts. Neither the execution and delivery of
this Agreement and documents referenced herein, nor the
incurrence of the obligations set forth herein, nor the
consummation of the transactions herein contemplated, nor
referenced herein conflict with or result in the material
breach of any terms, conditions or provisions of or
constitute a default under, any bond, note, or other
evidence of indebtedness or any contract, lease or other
agreements or instruments to which Purchaser is a party.
8.6 Litigation. There is no action, suit or
proceeding pending or threatened against Purchaser in any
court or by or before any other governmental agency or
instrumentality which would materially and adversely affect
the ability of Purchaser to carry out the transactions
contemplated by this Agreement.
8.7 Indemnity. Purchaser shall indemnify and hold the
Indemnified Parties harmless from and against any and all
claims, actions, judgments, liabilities, liens, damages,
penalties, fines, costs and reasonable attorneys= fees,
foreseen or unforeseen, asserted against, imposed on or
suffered or incurred by Seller directly or indirectly
arising out of or in connection with any breach of the
warranties, representations and covenants set forth in this
Section 8 or the inaccuracy of the ERISA Certificate. The
warranties, representations and indemnities set forth in
this Section 8 shall be deemed remade as of Closing and
shall survive Closing, and said warranties and
representations as so remade, and the indemnity obligation
set forth in herein shall be deemed waived unless Seller has
given Purchaser written notice of any such claim prior to
December 31, 1998.
9. Closing Costs. Seller shall pay the following
expenses: (i) the costs to obtain a standard CLTA owner's
title policy; (ii) the costs to obtain the Existing Survey;
(iii) one-half of all escrow fees; (iv) Seller's legal fees
and expenses; and (v) conveyance fees, documentary, stamp
and transfer taxes. Purchaser shall pay the following
expenses: (a) the costs for ALTA coverage and any
endorsements to the title policy; (b) the costs to obtain
the Updated Survey; (c) one-half of all escrow fees; (d)
the fee for the recording of the Deed; (e) all costs and
expenses incurred in connection with the transfer of any
transferable permits, warranties or licenses in connection
with the ownership or operation of the Property; (f) all
costs and expenses associated with Purchaser's financing, if
any; and (g) Purchaser's legal fees and expenses. The
provisions of this Section 9 shall survive Closing or any
termination of this Agreement.
10. Commissions. Seller shall be solely responsible for
the payment of the commission to The Greenwich Group
International LLC. Seller and Purchaser each warrant and
represent to the other that (other than The Greenwich Group
International LLC) neither has had any dealings with any
broker, agent, or finder relating to the sale of the
Property or the transactions contemplated hereby, and each
agrees to indemnify and hold the other and their respective
advisors (including HCMC) harmless against any claim for
brokerage commissions, compensation or fees by any broker,
agent, or finder in connection the sale of the Property or
the transactions contemplated hereby resulting from the acts
of the indemnifying party. The provisions of this Section
10 shall survive Closing.
11. Escrow Closing. It is contemplated that the
transaction contemplated herein shall be closed through an
escrow which shall be opened by the parties with the Escrow
Company within two (2) business days after mutual execution
of this Agreement (the "Escrow"). The parties shall
execute instructions to Escrow Holder consistent with the
terms of this Agreement prior to Closing.
12. Attorneys' Fees and Costs. In the event suit or
action is instituted to interpret or enforce the terms of
this Agreement, or in connection with any arbitration or
mediation of any dispute, the prevailing party shall be
entitled to recover from the other party such sum as the
court, arbitrator or mediator may adjudge reasonable as such
party's costs and attorney's fees, including such costs and
fees as are incurred in any trial, on any appeal, in any
bankruptcy proceeding (including the adjudication of issues
peculiar to bankruptcy law) and in any petition for review.
Each party shall also have the right to recover its
reasonable costs and attorney=s fees incurred in collecting
any sum or debt owed to it by the other party, with or
without litigation, if such sum or debt is not paid within
fifteen (15) days following written demand therefor. This
Section 12 shall survive the Closing or earlier termination
of this Agreement.
13. Notice. All notices, demands, deliveries and
communications (a "Notice") under this Agreement shall be
delivered or sent by: (i) first class, registered or
certified mail, postage prepaid, return receipt requested,
(ii) nationally recognized overnight carrier, or (iii)
facsimile with original Notice sent via overnight delivery
addressed to the address of the party in question set forth
in the first paragraph of this Agreement and copies to the
parties designated below or to such other address as either
party may designate by Notice pursuant to this Section 13.
Notices shall be deemed given (x) three business days after
being mailed as provided in clause (i) above, (y) one
business day after delivery to the overnight carrier as
provided in clause (ii) above, or (z) on the day of the
transmission of the facsimile so long as it is received in
its entirety by 5:00 p.m. (Chicago, Illinois time) on such
day and the original of such Notice is received the next
business day via overnight mail as provided in clause (iii)
above.
Notices to Seller copy to: Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Purchaser copy to: Christensen, Miller, Fink, Jacobs,
▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇, LLP
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
facsimile no. (▇▇▇) ▇▇▇-▇▇▇▇
14. Fire or Other Casualty; Condemnation.
14.1 If the Property or any part thereof is damaged by fire
or other casualty prior to the Closing Date which would cost
in excess of $750,000 to repair (as determined by an
insurance adjuster selected by the insurance carriers),
Purchaser may terminate this Agreement by written notice to
Seller given on or before the earlier of (i) twenty (20)
days following such casualty or (ii) the Closing Date. In
the event of such termination, this Agreement shall be of no
further force and effect and, except for the Surviving
Obligations, neither party shall thereafter have any further
obligation under this Agreement, and Seller shall direct the
Title Company to promptly return all ▇▇▇▇▇▇▇ Money to
Purchaser. If Purchaser does not elect to terminate this
Agreement or the cost of repair is determined by said
adjuster to be less than $750,000, then the Closing shall
take place as herein provided without abatement of the
Purchase Price, and Seller shall assign and transfer to
Purchaser on the Closing Date, without warranty or recourse,
all of Seller=s right, title and interest to the balance of
insurance proceeds paid or payable to Seller on account of
such fire or casualty remaining after reimbursement to
Seller for the total amount of all costs and expenses
incurred by Seller in connection therewith including but not
limited to making emergency repairs, securing the Property
and complying with applicable governmental requirements.
Seller shall pay to Purchaser the amount of the deductible
of any of Seller's applicable insurance policies.
14.2 If any material portion of the Property is taken
in eminent domain proceedings prior to Closing, Purchaser
may terminate this Agreement by notice to Seller given on or
before the earlier of (i) twenty (20) days after such taking
or (ii) the Closing Date, and, in the event of such
termination, this Agreement shall be of no further force and
effect and, except for the Surviving Obligations, neither
party shall thereafter have any further obligation under
this Agreement, and Seller shall direct the Title Company to
promptly return all ▇▇▇▇▇▇▇ Money to Purchaser. If
Purchaser does not so elect to terminate or if the taking is
not material, then the Closing shall take place as herein
provided without abatement of the Purchase Price, and Seller
shall deliver or assign to Purchaser on the Closing Date,
without warranty or recourse, all of Seller's right, title
and interest in and to all condemnation awards paid or
payable to Seller.
15. Operations After Date of This Agreement. Seller
covenants and agrees with Purchaser that:
(a) after the date hereof through the Closing, Seller
will (except as specifically provided to the contrary
herein):
(i) Refrain from transferring any of the Property
or creating on the Property any easements, liens,
mortgages, encumbrances, or other interests which will
survive Closing or permitting any changes to the zoning
classification of the Land;
(ii) Refrain from entering into or amending any
contracts, or other agreements (excluding leases)
regarding the Property (other than contracts in the
ordinary and usual course of business and which are
cancelable by the owner of the Property without penalty
within thirty (30) days after giving notice thereof);
(iii) Continue to operate, maintain, and
repair the Property in a manner consistent with
Seller's current practices;
(iv) Fully comply with the terms of the Leases;
(v) Refrain from offering the Property for sale
or marketing the same; and
(vi) Deliver to Purchaser copies of all leases
entered into after the date hereof and copies of all
Proposals (as defined in Section 15(b) below) with
respect to which no lease has been executed and which
has not expired or been withdrawn, except as provided
otherwise in Section 15(b) below.
(b) after the date hereof through the Closing, Seller
will (except as specifically provided to the contrary
herein); refrain from (i) amending any Leases of any portion
of the Property without Purchaser's consent (which shall not
be unreasonably withheld, conditioned or delayed), (ii)
canceling any of such Leases (provided that Seller may
deliver 3 day notices to pay or quit in connection with
tenant defaults) without Purchaser's consent (which shall not
be unreasonably withheld, conditioned or delayed), or (iii)
executing any new leases without Purchaser's consent (which
shall not be unreasonably withheld, conditioned or delayed).
Purchaser shall have five (5) days from its receipt of a
Proposal to notify Seller in writing of its approval or
rejection of any such Proposal. If no such notice is
received by Seller within such period then Purchaser shall
be deemed to have approved any such Proposal. As used
herein, "Proposal" shall mean a description of the economic
terms of any proposed lease or amendment along with any
financial information on the tenant in Seller's possession
(the "Proposal"). Seller shall have the right to execute
lease documents evidencing a Proposal approved or deemed
approved by Purchaser.
16. Assignment. Purchaser shall not assign this
Agreement without Seller=s prior written consent which
consent may be withheld for any reason or no reason.
Subject to the previous sentence, this Agreement shall apply
to, inure to the benefit of and be binding upon and
enforceable against the parties hereto and their respective
successors and assigns. Seller=s consent to any such
assignment shall be conditioned upon Seller's receipt of the
following not less than five (5) business days prior to the
Closing Date: (i) a duly executed express assumption of all
of the duties and obligations of Purchaser by the proposed
assignee in a form acceptable to Seller, and (ii) an ERISA
certificate, in the form attached hereto as Exhibit B and
the content of which is satisfactory to Seller. Subject to
the foregoing conditions, Seller hereby consents to
Purchaser's assignment to an entity of which Purchaser is
the controlling shareholder, managing member or general
partner. Notwithstanding any such assignment, Purchaser
shall remain fully liable for its obligations under this
Agreement.
17. Remedies.
(a) (i) IN THE EVENT THAT SELLER SHALL FAIL TO
CONSUMMATE THIS AGREEMENT AND SUCH FAILURE IS NOT A RESULT
OF PURCHASER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY
PURCHASER OR SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE
PROVISIONS HEREOF, PURCHASER, IN THE CASE WHERE SUCH FAILURE
IS BASED UPON A VOLUNTARY BREACH BY SELLER ("SELLER'S
DEFAULT"), SHALL ONLY BE ENTITLED TO SEEK AT ITS ELECTION,
EITHER: (A) THE REMEDY OF SPECIFIC PERFORMANCE, OR (B)
DAMAGES IN AN AMOUNT NOT TO EXCEED SEVEN HUNDRED FIFTY
THOUSAND DOLLARS ($750,000) IN THE AGGREGATE OF ALL RECOURSE
OF PURCHASER UNDER THE PURCHASE DOCUMENTS (AS DEFINED IN
SECTION 19 HEREOF). IN NO EVENT SHALL SELLER BE LIABLE TO
PURCHASER FOR ANY PUNITIVE, SPECULATIVE OR CONSEQUENTIAL
DAMAGES. IN THE CASE WHERE SUCH FAILURE IS BASED UPON AN
INVOLUNTARY BREACH BY SELLER (I.E., SELLER'S INABILITY TO
CONVEY THE PROPERTY AS A RESULT OF A LIS PENDENS OR
INJUNCTION), PURCHASER, AS ITS SOLE AND EXCLUSIVE REMEDY,
MAY TERMINATE THIS AGREEMENT AND RECEIVE A REFUND OF THE
▇▇▇▇▇▇▇ MONEY. IN NO EVENT SHALL PURCHASER BE ENTITLED TO
RECORD A LIS PENDENS OR NOTICE OF PENDENCY OF ACTION AGAINST
THE PROPERTY FOR ANY REASON WHATSOEVER.
(ii) PURCHASER SHALL (A) NOTIFY SELLER OF ITS
ELECTION TO SEEK THE REMEDY OF SPECIFIC PERFORMANCE ON OR
BEFORE THE DATE WHICH IS FORTY FIVE DAYS AFTER THE DATE OF A
SELLER'S DEFAULT AND (B) INSTITUTE PROCEEDINGS SEEKING SUCH
REMEDY ON OR BEFORE THE DATE WHICH IS THIRTY DAYS AFTER THE
DATE OF PURCHASER'S NOTICE.
(iii) PURCHASER SHALL BE DEEMED TO HAVE WAIVED ITS
ELECTION TO SEEK THE REMEDY OF SPECIFIC PERFORMANCE IF
PURCHASER DOES NOT (x) NOTIFY SELLER OF SUCH ELECTION AS
PROVIDED IN SECTION 17(a)(ii) (A) HEREINABOVE , OR (y)
INSTITUTE PROCEEDINGS, SEEKING SUCH REMEDY AS PROVIDED IN
SECTION 17(a)(ii)(B) HEREINABOVE.
(iv) NOTWITHSTANDING ANYTHING IN THIS SECTION
17(a) TO THE CONTRARY, SELLER'S LACK OF DELIVERY OF THE
TENANT ESTOPPEL CERTIFICATES CONTEMPLATED IN SECTION 3.4
ABOVE SHALL NOT CONSTITUTE A BREACH BY SELLER UNDER THIS
AGREEMENT.
(b) IN THE EVENT THAT PURCHASER SHOULD FAIL TO
CONSUMMATE THIS AGREEMENT FOR ANY REASON, EXCEPT SELLER'S
DEFAULT OR THE TERMINATION OF THIS AGREEMENT BY PURCHASER OR
SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE TERMS AND
PROVISIONS HEREOF, THEN SELLER, AS ITS SOLE AND EXCLUSIVE
REMEDY MAY TERMINATE THIS AGREEMENT BY NOTIFYING PURCHASER
THEREOF AND RECEIVE OR RETAIN THE ▇▇▇▇▇▇▇ MONEY AS
LIQUIDATED DAMAGES, PROVIDED THAT THIS PROVISION SHALL NOT
LIMIT SELLER'S RIGHTS TO RECEIVE REIMBURSEMENT FOR ATTORNEYS
FEES AND TO PURSUE AND RECOVER ON A CLAIM WITH RESPECT TO
ANY SURVIVING OBLIGATIONS. THE PARTIES AGREE THAT SELLER
WILL SUFFER DAMAGES IN THE EVENT OF PURCHASER'S DEFAULT ON
ITS OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS
DIFFICULT OR IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE THAT
THE AMOUNT OF THE ▇▇▇▇▇▇▇ MONEY IS A REASONABLE ESTIMATE OF
SELLER'S LOSS IN THE EVENT OF PURCHASER'S DEFAULT. THUS,
SELLER SHALL ACCEPT AND RETAIN THE ▇▇▇▇▇▇▇ MONEY AS
LIQUIDATED DAMAGES BUT NOT AS A PENALTY. EXCEPT AS
OTHERWISE SET FORTH IN THIS SECTION 17(b), SUCH LIQUIDATED
DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY.
IN THE EVENT SELLER IS ENTITLED TO THE ▇▇▇▇▇▇▇ MONEY AS
LIQUIDATED DAMAGES AND TO THE EXTENT SELLER HAS NOT ALREADY
RECEIVED THE ▇▇▇▇▇▇▇ MONEY, THE ▇▇▇▇▇▇▇ MONEY SHALL BE
IMMEDIATELY PAID TO SELLER BY THE TITLE COMPANY UPON RECEIPT
OF WRITTEN NOTICE FROM SELLER THAT PURCHASER HAS DEFAULTED
UNDER THIS AGREEMENT, AND PURCHASER AGREES TO TAKE ALL SUCH
ACTIONS AND EXECUTE AND DELIVER ALL SUCH DOCUMENTS NECESSARY
OR APPROPRIATE TO EFFECT SUCH PAYMENT.
SELLER AND PURCHASER ACKNOWLEDGE THAT THEY HAVE READ
AND UNDERSTAND THE PROVISIONS OF THE FOREGOING LIQUIDATED
DAMAGES PROVISION AND BY THEIR SIGNATURES IMMEDIATELY BELOW
AGREE TO BE BOUND BY ITS TERMS.
SELLER'S INITIALS: PURCHASER'S INITIALS:
/s/ HJE /s/ VJC
18. Miscellaneous.
18.1 Entire Agreement. This Agreement, together with
the exhibits attached hereto, constitute the entire
agreement of the parties hereto regarding the purchase and
sale of the Property, and all prior agreements,
understandings, representations and statements, oral or
written, are hereby merged herein. In the event of a
conflict between the terms of this Agreement and any prior
written agreements, the terms of this Agreement shall
prevail. This Agreement may only be amended or modified by
an instrument in writing, signed by the party intended to be
bound thereby.
18.2 Time. All parties hereto agree that time is of
the essence in this transaction. If the time for
performance of any obligation hereunder shall fall on a
Saturday, Sunday or holiday (national, in the State of
Illinois or the state in which the Property is located) such
that the transaction contemplated hereby can not be
performed, the time for performance shall be extended to the
next such succeeding day where performance is possible.
18.3 Counterpart Execution. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original. Counterparts may be executed by
facsimile, provided that any party executing by facsimile
shall promptly execute and deliver original copies of this
Agreement.
18.4 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF CALIFORNIA
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
18.5 Publicity. Seller and Purchaser hereby covenant
and agree that, at all times after the date of execution
hereof and continuing after the Closing, unless consented to
in writing by the other party, no press release or other
public disclosure concerning this transaction shall be made,
and each party agrees to use best efforts to prevent
disclosure of this transaction. Notwithstanding the
foregoing, Purchaser may issue press releases or other
disclosures to the extent required by applicable securities
laws. Purchaser agrees to use its best efforts to obtain
Seller's approval of the form and substance of any such
disclosure.
18.6 Recordation. Purchaser shall not record this
Agreement or a memorandum or other notice thereof in any
public office without the express written consent of Seller.
A breach by Purchaser of this covenant shall constitute a
material default by Purchaser under this Agreement.
18.7 Benefit. This Agreement is for the benefit of
Purchaser and Seller, and except as provided in the
indemnity granted by Purchaser under Paragraphs 3.2 and 8.7
with respect to the Indemnified Parties listed therein, no
other person or entity will be entitled to rely on this
Agreement, receive any benefit from it or enforce any
provisions of it against Purchaser or Seller.
18.8 Section Headings. The Section headings contained
in this Agreement are for convenience only and shall in no
way enlarge or limit the scope or meaning of the various and
several Sections hereof.
18.9 Further Assurances. Purchaser and Seller agree to
execute all documents and instruments reasonably required in
order to consummate the purchase and sale herein
contemplated. The obligations of the parties under this
Section 18.9 shall survive the Close of Escrow through
December 31, 1998. Neither party shall be required to take
any action under this Section 18.9 after the Close of
Escrow, which causes it to incur any additional liability or
expense.
18.10 Severability. If any portion of this
Agreement is held to be unenforceable by a court of
competent jurisdiction, the remainder of this Agreement
shall remain in full force and effect.
18.11 WAIVER OF TRIAL BY JURY. SELLER AND
PURCHASER, TO THE EXTENT THEY MAY LEGALLY DO SO, HEREBY
EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER
OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED
WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE
PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE
EXTENT THEY MAY LEGALLY DO SO, SELLER AND PURCHASER HEREBY
AGREE THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION,
OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A
JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR
PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY
JURY.
SELLER'S INITIALS: PURCHASER'S INITIALS:
/s/ HJE /s/ VJC
18.12 Independent Counsel. Purchaser and Seller
each acknowledge that: (a) they have been represented by
independent counsel in connection with this Agreement; (b)
they have executed this Agreement with the advice of such
counsel; and (c) this Agreement is the result of
negotiations between the parties hereto and the advice and
assistance of their respective counsel. The fact that this
Agreement was prepared by Seller's counsel as a matter of
convenience shall have no import or significance. Any
uncertainty or ambiguity in this Agreement shall not be
construed against Seller because Seller's counsel prepared
this Agreement in its final form.
18.13 Governmental Approvals. Nothing contained in
this Agreement shall be construed as authorizing Purchaser
to apply for a zoning change, variance, subdivision maps,
lot line adjustment, or other discretionary governmental
act, approval or permit with respect to the Property prior
to the Closing, and Purchaser agrees not to do so.
Purchaser agrees not to submit any reports, studies or other
documents, including, without limitation, plans and
specifications, impact statements for water, sewage,
drainage or traffic, environmental review forms, or energy
conservation checklists to any governmental agency, or any
amendment or modification to any such instruments or
documents prior to the Closing. Purchaser's obligation to
purchase the Property shall not be subject to or conditioned
upon Purchaser's obtaining any variances, zoning amendments,
subdivision maps, lot line adjustment or other discretionary
governmental act, approval or permit.
18.14 No Waiver. No covenant, term or condition
of this Agreement other than as expressly set forth herein
shall be deemed to have been waived by Seller or Purchaser
unless such waiver is in writing and executed by Seller or
Purchaser, as the case may be.
18.15 Discharge and Survival. The delivery of the
Deed by Seller, and the acceptance thereof by Purchaser
shall be deemed to be the full performance and discharge of
every covenant and obligation on the part of Seller to be
performed hereunder except the Surviving Obligations.
Except as otherwise expressly provided herein, no action
shall be commenced after the Closing on any covenant or
obligation except the Surviving Obligations.
19. Exculpation of Seller and Related Parties.
Notwithstanding anything to the contrary contained in this
Agreement or in any exhibits attached hereto or in any
documents executed in connection herewith (collectively,
including this Agreement, said exhibits and any such
document, the "Purchase Documents"), it is expressly
understood and agreed by and between the parties hereto
that: (i) the recourse of Purchaser or its successors or
assigns against Seller with respect to the alleged breach by
or on the part of Seller of any representation, warranty,
covenant, undertaking, indemnity or agreement contained in
any of the Purchase Documents (collectively, "Seller's
Undertakings") shall be limited to an amount not to exceed
$750,000 the aggregate of all recourse of Purchaser under
the Purchase Documents; and (ii) no personal liability or
personal responsibility of any sort with respect to any of
Seller's Undertakings or any alleged breach thereof is
assumed by, or shall at any time be asserted or enforceable
against, Seller or HCMC, or against any of their respective
shareholders, directors, officers, employees, agents,
constituent partners, members, beneficiaries, trustees or
representatives except as provided in (i) above with respect
to Seller.
20. Audit Letter. Seller agrees, upon Purchaser's request
after Closing, to furnish Purchaser's independent auditor
with two (2) representation letters regarding the books and
records of the Property, in substantially the same form as
Exhibit N attached hereto. The first such letter shall
cover calendar year 1997. The second such letter shall
cover the period of calendar year 1998 up to the Closing
Date. Seller shall have no obligation to deliver more than
these two (2) such letters, or to deliver any such letter
requested later than one (1) year after the Closing Date.
Purchaser shall indemnify, defend and hold Seller harmless
from and against any and all claims, actions, judgments,
liabilities, liens, damages, penalties, fines and costs
(including, without limitation, reasonable attorneys' fees)
(collectively, the "Liabilities"), asserted against, imposed
on or suffered or incurred by Seller arising out of or in
connection with such representation letter, including as a
result of any inaccuracies or misrepresentations therein.
IN WITNESS WHEREOF, the parties hereto have caused
these presents to be made as of the day and year first above
stated.
SELLER:
CALABASAS TECH CENTER, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
PURCHASER:
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation, its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President and COO
