AGREEMENT OF PURCHASE AND SALE
AND
JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS (this "Agreement") is made and entered into as of
this 15th day of August, 1997, by and between FOREMOST CARMEL
MOUNTAIN LTD., a California limited partnership ("Seller"), and
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Buyer"), with reference to the following facts:
A. Seller is the owner of the Property (as hereinafter
defined).
B. Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, the Property (as hereinafter defined),
on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the
mutual covenants and agreements herein set forth, and other
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Seller and Buyer hereby agree as follows:
ARTICLE 1
PROPERTY
Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from Seller, subject to the terms and
conditions set forth herein, the following:
1.1 Land. That certain land (the "Land"), located in the
City of San Diego, State of California commonly known as the
Foremost Professional Building and more particularly described on
Exhibit A hereto;
1.2 Appurtenances. All rights, privileges and easements
appurtenant to the Land, including, without limitation, all
minerals, oil, 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, 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 as the "Appurtenances");
1.3 Improvements. All improvements and fixtures located
upon the Land, including, without limitation, an approximately
60,384 rentable square foot Class "A" office building, and all
other structures presently 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 as the "Improvements");
1.4 Leases. All interest of Seller, as landlord, in and to
the leases of space in the Improvements as described on Exhibit B
hereto (collectively, the "Leases");
1.5 Personal Property. All personal property of Seller, if
any, located on or in or used in connection with the operation,
maintenance or management of the Land and/or the Improvements
(collectively, the "Personal Property");
1.6 Service Contracts. Those service contracts and other
agreements, lease rights, warranties, guarantees, agreements,
utility contracts and other rights relating to the ownership, use
and operation of all or any part of the Property, elected to be
assumed by Buyer pursuant to Section 5.2 hereof (collectively,
the "Service Contracts"); and
1.7 Intangible Property. All right, title and interest of
Seller in and to any and all intangible property owned by Seller
and used in the ownership, use and/or operation of the Land or
the Improvements, including, without limitation, the right to use
any trade name now used in connection with the Land or the
Improvements, the current books and records in Seller's
possession relating to the Property, and all other books and
records and all other books and records relating to the operation
and management of the Real Property (collectively, the
"Intangible Property").
The Land, the Appurtenances, the Improvements and the Leases
are sometimes referred to herein collectively as the "Real
Property." The Real Property, Personal Property, Service
Contracts and the Intangible Property are sometimes referred to
herein collectively as the "Property."
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. The total purchase price for the
Property shall be the sum of Eight Million One Hundred Ninety-
Five Thousand Dollars ($8,195,000) (the "Purchase Price").
2.2 Payment of Purchase Price. The Purchase Price shall be
paid as follows:
(a) Deposit. Upon the Opening of Escrow (as
hereinafter defined), Buyer shall deliver to California Counties
Title ("Escrow Holder"), 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxx
Xxx, Xxxxxxxxxx 00000 the sum of One Hundred Thousand Dollars
($100,000) (the "Deposit"). In the event the sale of the
Property is consummated, the Deposit shall be credited towards
the Purchase Price.
(b) Balance of Purchase Price. The Purchase Price,
less the sum of the Deposit (the "Purchase Price Balance") shall
be deposited with Escrow Holder by Buyer in immediately available
funds not later than the Closing Date (as hereinafter defined).
In the event the sale of the Property is consummated, such
amounts to be paid as set forth herein shall be credited towards
the Purchase Price. In the event the sale of the Property is not
consummated because of the failure of any condition or the
default by Seller, all such amounts, together with interest
thereon, shall be returned immediately to Buyer.
2.3 Investment of Deposit; Liquidated Damages
2.3.1 Investment of Deposit. The Deposit shall be
placed in an interest-bearing account with a financial
institution reasonably acceptable to Buyer, with all interest
accruing to the benefit of Buyer. The Deposit shall be disposed
of by Escrow Holder only as provided in this Agreement.
2.3.2 Liquidated Damages. IN THE EVENT THAT,
FOLLOWING THE EXPIRATION OF THE CONTINGENCY PERIOD, THE
TRANSACTIONS CONTEMPLATED HEREBY ARE NOT CONSUMMATED DUE TO A
DEFAULT SOLELY ON THE PART OF BUYER, THE AMOUNT OF THE DEPOSIT
SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES.
THE PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT
THE TRANSACTIONS CONTEMPLATED HEREBY ARE NOT CONSUMMATED
FOLLOWING THE EXPIRATION OF THE CONTINGENCY PERIOD DUE TO A
DEFAULT SOLELY ON THE PART OF BUYER WOULD BE EXTREMELY DIFFICULT
OR IMPRACTICABLE TO DETERMINE. THEREFORE, BY PLACING THEIR
SIGNATURES BELOW, THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE
DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES'
REASONABLE ESTIMATE OF SELLER'S DAMAGES.
Seller:/s/ RLW CVK Buyer:/s/ VJC
ARTICLE 3
ESCROW
3.1 Deposit with Escrow Holder and Escrow Instructions.
Within three (3) business days following the execution of this
Agreement by the parties hereto, the parties hereto shall deposit
a fully executed original of this Agreement with Escrow Holder,
and this Agreement shall serve as the instructions to Escrow
Holder for consummation of the transactions contemplated hereby.
Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable
Escrow Holder to comply with the terms of this Agreement;
provided, however, that in the event of any conflict between the
terms and provisions of this Agreement and the terms and
provisions of any supplementary escrow instructions, the terms
and provisions of this Agreement shall control.
3.2 Confirmation of the Opening of Escrow. Upon receipt of
a fully executed copy of this Agreement, Escrow Holder shall
immediately execute this Agreement to evidence Escrow Holder's
agreement to act in compliance with the terms and provisions
hereof. Escrow Holder shall immediately notify Buyer in Seller
in writing of the date on which escrow was established with
Escrow Holder (the "Opening of Escrow"), which date shall
thereafter be the Opening of Escrow date for purposes of this
Agreement.
ARTICLE 4
TITLE TO PROPERTY
4.1 Real Property. At the Closing, Seller shall convey to
Buyer marketable and insurable fee simple title to the Real
Property by duly executed and acknowledged grant deed in the form
of Exhibit C hereto (the "Grant Deed"). Evidence of delivery of
marketable and insurable fee simple title to the Real Property
shall be the issuance by Chicago Title Insurance Company (the
"Title Company") of an ALTA Owner's Policy of Title Insurance
(extended coverage) (form B, rev. 10-17-70) (the "Title Policy")
in the amount of the Purchase Price, insuring fee simple title to
the Real Property in Buyer, free and clear of monetary liens and
subject only to the Permitted Exceptions (as hereinafter defined)
and including the Endorsements (as hereinafter defined).
4.2 Leases. At the Closing, Seller shall transfer all of
its right, title and interest in and to the Leases by an
Assignment of Leases in the form of Exhibit D hereto (the
"Assignment of Leases"), free and clear of any liens,
encumbrances or interests of third parties.
4.3 Personal Property. At the Closing, Seller shall
transfer title to the Personal Property, if any, by a xxxx of
sale in the form of Exhibit E hereto (the "Xxxx of Sale"), free
and clear of any liens, encumbrances or interests of third
parties.
4.4 Service Contracts. At the Closing, Seller shall
transfer all of its right, title and interest in and to the
Service Contracts, if any, by an Assignment of Service Contracts,
Warranties and Guarantees in the form of Exhibit F hereto (the
"Assignment of Service Contracts"), free and clear of any liens,
encumbrances or interest of third parties.
4.5 Intangible Property. At the Closing, Seller shall
transfer all of its right, title and interest in and to all
Intangible Property, if any, by an Assignment of Intangible
Property in the form of Exhibit G hereto (the "Assignment of
Intangible Property"), free and clear of any liens, encumbrances
or interests of third parties.
ARTICLE 5
BUYER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to Buyer's
obligation to purchase the Property:
5.1 Review and Approval of Title. Not later than ten (10)
days following the date first above written, Seller shall deliver
to Buyer all of the following:
5.1.1 a current extended coverage preliminary title
report (the "Preliminary Title Report") with respect to the
Property issued by the Title Company, accompanied by copies of
all documents referenced in such report;
5.1.2 at Buyer's sole cost and expense, an ALTA survey
of the Real Property prepared by a licensed surveyor reasonably
acceptable to Buyer (the "Survey"). Notwithstanding the
foregoing, Seller agrees to provide Buyer with a copy of any ALTA
survey of the Property in Seller's possession. The Survey shall
be certified to Buyer and the Title Company and in sufficient
detail to provide the basis for an ALTA owner's policy of title
insurance without boundary, encroachment or survey exceptions,
and shall show the location of all easements and improvements,
and any and all other pertinent information with respect to the
Real Property. The Survey shall also indicate and certify as to
the total acreage of the Real Property and any encroachments of
improvements onto easements or onto adjacent properties or
certify as to their absence and shall indicate the presence of
improvements and easements on property adjoining the Real
Property if located within five (5) feet of the boundaries of the
Real Property; and
5.1.3 at Seller's sole cost and expense, copies of all
existing and proposed unrecorded easements, covenants,
restrictions, agreements or other documents in Seller's
possession which affect the Real Property, including, without
limitation, any and all documents relating to any variance,
conditional use permits or land-use restrictions relating to or
affecting the Real Property, or if no such documents exist, a
certification of Seller to that effect.
Title to the Property shall be subject only to such exceptions in
the Preliminary Title Report as Buyer shall approve, in Buyer's
sole and absolute discretion (collectively, the "Permitted
Exceptions"). Buyer shall have until the later of (i) thirty
(30) days following the date hereof, or (ii) thirty (30) days
following receipt of the items listed in 5.1.1, 5.1.2, and 5.1.3
hereof (the "Contingency Period"), in which to notify Seller, in
writing, as to those items which are Permitted Exceptions, those
matters which Buyer approves and which Buyer disapproves, and
which endorsements Buyer will be requiring (collectively, the
"Endorsements"). Buyer's failure to provide such written notice
to Seller shall constitute approval of all matters shown in the
Preliminary Title Report and Survey. If Buyer disapproves of any
matter disclosed in the Preliminary Title Report or Survey as
herein provided, Seller shall have ten (10) business days after
Seller receives written notice of such disapproval to elect to
cure any such matter by delivering written notice of such
election to Buyer. Seller's failure to give such notice to Buyer
within the ten (10) day period set forth herein shall constitute
Seller's election not to cure the matters disapproved by Buyer.
If Seller elects not to cure any such matter, Buyer may either,
at Buyer's sole election, (i) proceed with the purchase of the
Property, in which event Buyer shall be deemed to have approved
such matters which were previously disapproved, or (ii) terminate
this Agreement, in which event this Agreement shall terminate,
the Deposit, together with any interest earned thereon, shall be
returned to Buyer, and the parties hereto shall be relieved of
all further rights and obligations hereunder.
5.2 Delivery of Reports and Documents. Within five (5)
days following the date hereof, Seller shall deliver to Buyer,
copies of any and all of the following documents in Seller's
possession or control:
(a) a rent roll of the Property for the current month;
(b) copies of the Leases, and all licenses, service
contracts (including parking, elevator, HVAC and landscaping
maintenance contracts), management contracts, brokerage
agreements, permits, variances, insurance policies, maps,
certificates of occupancy, building permits and other
documentation and evidence that the construction, present use,
occupancy and operation of the Property is authorized by and is
in compliance with all governmental regulations;
(c) warranties and instruction books (e.g., for
vertical transportation, HVAC and other building systems); income
tax returns for calendar years 1995 and 1996, and 1997 monthly
operating statements to date;
(d) all available plans, structural drawings,
architectural and "as built" drawings, including, but not limited
to, mechanical, electrical, air conditioning, landscape and
sprinkler drawings and specifications regarding the improvements,
and any soils, structural, geological, environmental, hazardous
materials and asbestos studies or reports relating to subsurface
conditions, grading plans, topographical maps and similar data
respecting the Property;
(e) copies of property tax bills for the last two (2)
years and copies of the most recently available utility bills and
similar records respecting the Property;
(f) a list of all personal property owned by or leased
by Seller and used in connection with the ownership or operation
of the Property;
(g) a certificate of Seller certifying to Seller's
knowledge that there is no legal or administrative action,
proceeding, claim, arbitration or suit pending before any court,
agency or official, nor any such claim or action threatened in
writing, relating to the Seller, the Property or with respect to
the validity of any statutes, ordinances, regulations or
restrictions or any permits or approvals thereunder relating to
the Property, nor any outstanding contingent liabilities
affecting the Property; and
(h) any and all other reports, plans or studies
relating to the Property
(collectively, the "Reports and Documents"). Buyer shall have
until the expiration of the Contingency Period in which to review
the Reports and Documents heretofore delivered and approve or
disapprove any of the foregoing, in Buyer's sole and absolute
discretion. In the event Buyer disapproves any of the Reports
and Documents, Buyer shall deliver Seller written notice of
Buyer's disapproval prior to the expiration of the Contingency
Period, in which event this Agreement shall terminate, the
Deposit, together with any interest thereon, shall be returned to
Buyer, and the parties hereto shall be relieved of all further
rights and obligations hereunder. In the event Buyer fails to
deliver said written notice to Seller prior to the expiration of
the Contingency Period, Buyer shall be deemed to have approved
the Reports and Documents. Buyer agrees to return the Reports
and Documents to Seller in the event for any reason this
Agreement is terminated and the transactions contemplated herein
are not consummated.
5.3 Buyer's Independent Review. Buyer shall have the
right, during the Contingency Period, to conduct such further
inspections and/or tests of the Property as Buyer deems necessary
and/or desirable, to enable Buyer to satisfy itself as to all
matters relating to the Property, including, without limitation,
a Phase 1 environmental assessment of the Property, asbestos-
containing-materials studies, Americans with Disabilities Act
compliance studies, soils testing, engineering studies, zoning
and intended use reviews, the physical, structural, mechanical
condition of the Property, seismic studies, and other surveys and
studies of the Property (collectively, "Buyer's Inspections and
Reports"). Buyer's right to conduct Buyer's Inspections and
Reports shall be subject to and conducted in accordance with
Buyer's right of access to the Property as set forth in Section
12.2 hereof. In the event that, based upon Buyer's independent
review of the Property, Buyer determines, in Buyer's sole and
absolute discretion, that Buyer is unwilling to proceed with the
purchase of the Property, Buyer may elect to terminate the
Agreement by so notifying Seller in writing of Buyer's election
prior to the expiration of the Contingency Period, and this
Agreement shall terminate, the Deposit, together with any
interest earned thereon, shall be returned to Buyer, and the
parties hereto shall be relieved of all further rights and
obligations hereunder. In the event Buyer fails to deliver said
written notice to Seller prior to the expiration of the
Contingency Period, Buyer shall be deemed to have disapproved
Buyer's Inspections and Reports.
5.4 Estoppel Certificates. Buyer shall receive, prior to
the Closing, an estoppel certificate from (i) each tenant
occupying not less than three thousand (3,000) rentable square
feet, and (ii) a sufficient number of other tenants at the
Property such that estoppel certificates shall have been received
pursuant to clauses (i) and (ii) hereof with respect to not less
than eighty-five percent (85%) of the aggregate rentable square
feet of the Property covered by Leases in effect on the Closing
Date, in the form of Exhibit H hereto and in substance
satisfactory to Buyer, in Buyer's sole and absolute discretion
(collectively, the "Estoppel Certificates"). In the event that
Buyer disapproves of any Estoppel Certificate Buyer may elect to
terminate the Agreement by so notifying Seller in writing of
Buyer's election prior to the expiration of the Contingency
Period, or, if delivered subsequent to the expiration of the
Contingency Period, within five (5) business days following
receipt of such estoppel certificate, in which event this
Agreement shall terminate, the Deposit, together with any
interest earned thereon, shall be returned to Buyer, and the
parties hereto shall be relieved of all further rights and
obligations hereunder. In the event Seller is able to obtain
estoppel certificatess from tenants representing at least seventy-
five percent (75%) of the aggregate rentable square feet of the
Property, Seller may provide Buyer with Landlord estoppel
certificates in a form substantially similar to Exhibit A for
sufficient leases so that Buyer has estoppel certificates with
respect to not less than eighty-five percent (85%) of the
aggregate rentable square feet of the Property covered by Leases
in effect on the Closing Date.
5.5 Representations and Warranties of Seller. All of
Seller's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct when
made and shall be true and correct as of the Closing Date.
5.6 Covenants of Seller. Seller shall have complied with
all of Seller's covenants and agreements contained in or made
pursuant to this Agreement.
5.7 Delivery of Documents. Seller shall have delivered
into Escrow the documents and instruments described in Section
7.2 hereof and shall have delivered to Buyer the documents and
instruments described in Section 7.3 hereof.
5.8 Condition of Property. The condition of the Property
shall not have changed from the date of this Agreement to the
Closing Date, ordinary wear and tear excepted.
5.9 Conditions for the Benefit of Buyer. The foregoing
conditions are for the sole benefit of Buyer. If any of the
foregoing conditions described in this Article 4 is not satisfied
for any reason whatsoever, Buyer shall have the right at its sole
election either to waive such condition and proceed with the
transactions contemplated hereby, or, in the alternative, to
terminate this Agreement, in which event Buyer shall be entitled
to a return of the Deposit, together with all interest earned
thereon, and Seller and Buyer shall be released from further
obligation or liability hereunder (except for those obligations
and liabilities which, pursuant to the terms of this Agreement,
survive such termination).
ARTICLE 6
SELLER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to
Seller's obligation to sell the Property:
6.1 Representations and Warranties of Buyer. All of
Buyer's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct when
made and shall be true and correct as of the Closing Date.
6.2 Covenants of Buyer. Buyer shall have complied with all
of Buyer's covenants and agreements contained in or made pursuant
to this Agreement.
6.3 Delivery of Documents and Funds. Buyer shall have
delivered into Escrow the documents, instruments and funds
described in Section 7.4 hereof.
6.4 Conditions for the Benefit of Seller. The foregoing
conditions are for the sole benefit of Seller. If any of the
foregoing conditions described in this Article 5 is not satisfied
for any reason whatsoever, Seller shall have the right at its
sole election either to waive such condition and proceed with the
transactions contemplated hereby, or, in the alternative, to
terminate this Agreement, in which event Buyer shall be entitled
to a return of the Deposit, together with all interest earned
thereon, and Seller and Buyer shall be released from further
obligation or liability hereunder (except for those obligations
and liabilities which, pursuant to the terms of this Agreement,
survive, such termination).
ARTICLE 7
CLOSING
7.1 Closing. The closing hereunder (the "Closing") shall
mean the recording of the Grant Deed conveying title to the
Property from Seller to Buyer and shall be held and delivery of
all items to be made at the Closing shall be made at the offices
of Escrow Holder on the sooner to occur of (i) September 30,
1997, or (ii) the fifteenth (15th) day following the expiration
of the Contingency Period (the "Closing Date"), or such other
date prior thereto and/or at such other location as Buyer and
Seller may mutually agree in writing. In the event the Closing
Date does not fall on a Business Day (as hereinafter defined),
the Closing Date shall be moved to the next succeeding Business
Day. Such date may not otherwise be modified without the written
approval of both Seller and Buyer. In the event the Closing does
not occur on or before the Closing Date, Escrow Holder shall,
unless it is notified by both parties to the contrary within five
(5) days after the Closing Date, return to the depositor thereof
items which may have been deposited hereunder. Any such return
shall not, however, relieve either party hereto of any liability
it may have for its wrongful failure to close.
7.2 Deliveries by Seller to Escrow Holder. Not later than
one (1) business day prior to the Closing Date, Seller shall
deposit with Escrow Holder the following:
7.2.1 The Grant Deed, duly executed and acknowledged
by Seller, in recordable form, and ready for recordation on the
Closing Date;
7.2.2 An Affidavit of Non-Foreign Status in the form
of Exhibit I hereto, duly executed by Seller pursuant to Section
1445 of the Internal Revenue Code of 1986, as amended;
7.2.3 California Form 590-RE, duly executed by Seller;
7.2.4 The Xxxx of Sale;
7.2.5 The Assignment of Leases;
7.2.6 The Assignment of Service Contracts; and
7.2.7 Any and all other documents, instruments, data,
records, correspondence or agreements called for hereunder which
have not been previously delivered.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
7.3 Deliveries by Seller Outside of Escrow. On or before
the Closing Date, Seller shall deliver or cause to be delivered
to Buyer the following:
7.3.1 To the extent they are then in Seller's
possession, and have not heretofore been delivered to Buyer, the
original and as-built plans and specifications for all
Improvements on the Property;
7.3.2 To the extent in Seller's possession, all
unexpired warranties and guarantees which Seller has received in
connection with any work or services performed with respect to,
or equipment installed in, the improvements on the Property;
7.3.3 All keys in Seller's possession (properly
tagged for identification) for all improvements on the Property;
7.3.4 The originals of all Leases and Estoppel
Certificates (if not previously delivered), all correspondence to
or from any tenants, relating to the Leases and all guarantees,
certificates of deposit or other security associated therewith;
7.3.5 The originals of all Service Contracts
which are being assumed by Buyer and will remain in effect after
the Closing and all correspondence and existing records prepared
by Seller in its normal course of operations specifically for the
Property (and which are not otherwise confidential) relating to,
and necessary for, the on-going operations and maintenance of the
Property (which materials may be either delivered at Closing or
left at the management office at the Property); and
7.3.6 An inventory list of all Seller's personal
property on the Property.
Buyer may waive compliance on Seller's part under any of the
foregoing items by an instrument in writing.
7.4 Deliveries by Buyer. Not later than one (1) business
day prior to the Closing Date, Buyer shall deposit with Escrow
Holder the following:
7.4.1 The Purchase Price Balance, for disbursement to
Seller in accordance with the terms and provisions hereof, to be
held by Escrow Holder pursuant to joint closing instructions
reasonably acceptable to Buyer and Seller; and
7.4.2 Any other documents, instruments, data, records,
correspondence or agreements called for hereunder which have not
previously been delivered.
Seller may waive compliance on Buyer's part under any of the
foregoing items by an instrument in writing.
7.5 Other Instruments. In addition to the documents and
instruments to be delivered as herein provided, each of the
parties hereto shall, from time to time at the request of the
other party, execute and deliver to the other party such other
instruments of transfer, conveyance and assignment and shall take
such other action as may be reasonably required to effectively
carry out the terms of this Agreement.
7.6 Prorations. All revenues, income, receivables, costs,
expenses and payables of the Property shall be apportioned
equitably between the parties as of Closing on the basis of the
actual number of days in a particular month, and with respect to
the items enumerated below where a particular manner of
apportionment is provided, then apportionment of such item shall
be made in such manner. The obligation to make apportionments
shall survive Closing. Without limitation, the following items
shall be so apportioned:
(i) Monthly rents and percentage rent and
"passthroughs" of real estate taxes and operating expenses due
from occupancy tenants under Leases, as and when collected. If
at Closing there are any past due rents or charges owed by
occupancy tenants, they shall not be prorated until received;
Buyer shall include such delinquencies in its normal billing and
shall pursue the collection thereof in good faith after the
Closing Date (but Buyer shall not be required to litigate or
declare a default in any Lease). To the extent Buyer receives
amounts on account of Leases on or after the Closing Date, such
payments shall be applied first toward then current rent owed to
Buyer in connection with the applicable Lease for which such
payments are received, and any excess monies received shall be
applied toward the payment of any delinquent rents, with Seller's
share thereof being promptly delivered to Seller. Buyer may not
waive any delinquent rents nor modify a Lease so as to reduce or
otherwise affect amounts owed thereunder for any period in which
Seller is entitled to receive its share of charges or amounts
without first obtaining Seller's written consent. Seller hereby
reserves the right to pursue any remedy against any tenant owing
delinquent rents and any other amounts to Seller. Buyer shall
reasonably cooperate with Seller in any collection efforts
hereunder (but shall not be required to litigate or declare a
default in any Lease). With respect to delinquent rents and any
other amounts or other rights of any kind respecting tenants who
are no longer tenants of the Property as of the Closing Date,
Seller shall retain all rights relating thereto;
(ii) Real estate and personal property taxes and any
special assessments, taking into consideration discounts for the
earliest permitted payment, based upon the latest previous tax
levies. Such items shall be reapportioned between Seller and
Buyer if current tax rates differ from the latest previous tax
rates as soon as the same are known. Seller agrees that to the
extent any additional taxes, assessments or levies are imposed,
assessed or levied against the Property, or any portion thereof,
the Seller or the Buyer at any time subsequent to Closing but
with reference to any period prior thereto during Seller's
ownership thereof, Seller shall promptly pay to Buyer an amount
equal to such additional assessments or levies. Similarly, if
tax refunds become payable for periods during Seller's ownership
of the Property, such amounts (subject to adjustments for the
potential claims of occupancy tenants that paid tax increases by
way of rent escalations to Seller) shall be promptly paid over to
Seller. In the event that any assessments on the Property are
payable in installments, then the installment for the current
period shall be prorated (with Buyer assuming the obligation to
pay any installment due after the Closing Date). In no event
shall Seller be charged with or be responsible for any increase
in the taxes on the Property resulting from the sale of the
Property or from any improvements made or lease entered into on
or after the Closing Date;
(iii) Transferable annual permits, licenses, and/or
inspection fees, if any, on the basis of the duration of the
same;
(iv) Security deposits, plus accrued interest, if any,
payable thereon to tenants, and any other deposits and prepaid
rent, shall be credited (or assigned) to Buyer;
(v) Utility charges levied against Seller or the
Property, and Buyer shall transfer all such utility services to
its name and account immediately upon Closing;
(vi) Service Contracts on the basis of the charge or
premium for the period involved;
(vii) All forms of rent concessions, including free
rent, reduced rent and other concessions or obligations under all
Leases for following the Closing not to exceed Two Thousand Five
Hundred Dollars ($2,500) shall be assumed by Buyer at Closing,
and all amounts in excess of said Two Thousand Five Hundred
Dollars ($2,500) shall be credited to Buyer against the Purchase
Price at Closing; and
(viii) All other operation expenses incurred in the
management and operation of the Property.
No insurance policies shall be assigned hereunder, and
accordingly there shall be no proration of insurance premiums.
7.7 Costs and Expenses. Buyer and Seller shall each pay
one-half (1/2) of Escrow Holder's escrow fee. Seller shall pay
all documentary transfer taxes, transfer or conveyance taxes
imposed by the City and/or County in which the Property is
located. Seller shall pay any and all delinquent real property
taxes or assessments, and the cost of recording the Grant Deed.
Seller shall pay that portion of the premium for the Title Policy
attributable to the issuance of a CLTA standard coverage title
policy and Buyer shall pay the balance of the premium for the
Title Policy, and the cost of the Endorsements, if any.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF SELLER
As a material inducement to Buyer to enter into this
Agreement, Seller hereby represents and warrants to and agrees
with Buyer as follows:
8.1 Reports, Contracts and Other Documents. The survey,
mechanical and structural plans and specifications, soil reports,
certificates of occupancy, warranties, and all other books and
records relating to or affecting the Property and all other
contracts or documents delivered to Buyer pursuant to this
Agreement or in connection with the execution hereof, including,
without limitation, the Reports and Documents, are and at the
time of Closing will be true and correct copies and contain no
inaccuracies or misstatements of fact, and all such contracts and
other documents relating to or affecting the Property have been
or will be delivered to Buyer pursuant to this Agreement.
8.2 Condemnation; Land-Use Regulation. Seller has not
received notice of any condemnation, environmental, zoning or
other land-use regulation proceedings, either instituted or
planned to be instituted against the Property.
8.3 Leases. Except as set forth on Exhibit B, Seller has
not executed or otherwise entered into any written or unwritten
leases, tenancies, occupancy agreements, or other agreements with
respect to the Property or affecting possession thereof or any
portion thereof or any rights thereto and there are no such
agreements entered into or executed by any third party. To
Seller's actual knowledge, there is no default on the part of
Seller, as lessor, or, except as described on Schedule 8.5
hereto, on the part of any lessee, and there exists no condition
that with the passage of time or the giving of notice or both
would constitute such a default.
8.4 Service Contracts, Mechanic's Liens and Other
Agreements. Other than those which are cancelable on thirty (30)
day's notice, Seller has not entered into any service agreements
or contracts or other agreements, oral or written (other than as
set forth in this Agreement) relating to the Property which will
be in force on the Closing Date, except as disclosed on Schedule
8.6 hereto, and Seller has not received any notice of any
material default thereunder that remains uncured. Seller shall
provide Buyer with true, correct and complete copies of all
agreements listed on Schedule 8.6 pursuant to Section 5.2 hereof.
8.5 Absence of Other Agreements Affecting the Property.
To Seller's knowledge, there are no easements, encumbrances or
other matters affecting the Property except as may be shown in
the Preliminary Title report.
8.6 Litigation. There is no litigation pending or, to
Seller's knowledge threatened, against Seller that arises out of
the ownership or operation of the Property or that might
detrimentally affect the use or operation of the Property for its
intended purpose or the value of the Property or is likely to
materially and adversely affect the ability of Seller to perform
its obligations under this Agreement.
8.7 Authority of Seller. This Agreement and all documents
executed by Seller which are to be delivered to Buyer at or prior
to the Closing are or at the time of Closing will be duly
authorized, executed, and delivered by Seller, are or at the time
of Closing will be legal, valid, and binding obligations of
Seller enforceable in accordance with their terms, and are and
at the time of Closing will be sufficient to convey title (if
they purport to do so).
8.8 No Conflict. The execution and delivery of this
Agreement, the consummation of the transactions herein
contemplated, and compliance with the terms of this Agreement
shall not conflict with or result in a breach of any of the terms
of provisions of, or constitute a default under, any instrument
or agreement to which Seller is a party or, to Seller's
knowledge, by which any of the Property is or may be bound, or
any applicable regulation of any governmental agency, or any
judgment, order or decree of any court having jurisdiction over
Seller or, to Seller's knowledge, the Property.
8.9 Use and Operation of Property. Seller knows of no
facts nor has Seller failed to disclose to Buyer any fact known
to Seller which would prevent Buyer from using, leasing and
operating the Property after Closing in the normal manner in
which similar properties in the area are used, operated and
leased or in the manner in which the Property has been used,
leased and operated prior to the Closing Date.
8.10 Other Contracts to Convey Property. Seller has not
committed nor obligated itself in any manner whatsoever to sell
the Property to any party other than Buyer.
8.11 Hazardous Substances and Environmental Matters. To
Seller's actual knowledge, neither Seller, nor any other person
or entity, has ever used, generated, manufactured, produced,
stored, released, discharged or disposed of on, under or about
the Property, or transported to or form the Property any
Hazardous Substance (as hereinafter defined) or allowed any other
person or entity to do so. To Seller's actual knowledge, no
proceeding or inquiry by any governmental authority with respect
to the presence of any Hazardous Substance on the Property or the
migration thereof from or to other property is pending or
threatened, nor have any claims been made or threatened by any
third party against Seller or the Property relating to any loss
or injury resulting form any Hazardous Substance. The term
"Environmental Law" shall include, without limitation, any
federal, state or local law, statute, ordinance or regulation
pertaining to health, industrial hygiene or the environment
(collectively referred to as "Environmental Laws"), including,
without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") as amended, 42
U.S.C. Sections 9601 et seq., and the Resource Conservation and
Recovery Act of 1976 ("RCRA") as amended, 42 U.S.C. Sections 9601
et seq. The term "Hazardous Substance" shall include, without
limitation, (i) those substances included within the definitions
"hazardous substances," "hazardous materials," "toxic
substances," or "solid waste" in CERCLA, RCRA and the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., as
amended, and in the regulations promulgated pursuant to said
laws; (ii) those substances defined as "hazardous wastes" in
Section 25117 of the California Health & California Health &
Safety Code, or as "hazardous substances" in Section 25316 of the
California Health & Safety Code, and in the regulations
promulgated pursuant to said laws; (iii) those substances listed
in the United States Department of Transportation Table (49 CFR
172.101 and amendments thereto) or by the Environmental
Protection Agency (or any successor agency) as hazardous
substances (40 CFR Part 302 and amendments thereto); and (iv)
such other substances, materials, and wastes which are or become
regulated under applicable local, state or federal law, or which
are classified as hazardous or toxic under local, state or
federal law, rules or regulations.
8.12 Knowledge of Seller. As used herein, the phrase, "to
the knowledge of Seller" or other similar phrases mean and refer
to the present actual knowledge of Xxxxxx Wish, a principal of
Seller. In connection therewith, Seller represents and warrants
that Xxxxxx Wish is the person in Seller's organization who
possess relevant knowledge pertaining to the Property and the
representations and warranties contained herein.
8.13 General Disclaimer. Buyer acknowledges that it will
inspect and examine the Property and, except as expressly
provided in this Agreement, will rely solely on its own
investigation of the Property and not on any information provided
or to be provided by or on behalf of the Seller. Except as
otherwise expressly provided in this Agreement, the sale of the
Property to Buyer is made on an "AS IS" "WHERE IS" and "WITH ALL
FAULTS" basis. Buyer acknowledges that in consideration of
entering into this Agreement, that, except as expressly provided
in this Agreement, Seller makes no warranty or representation,
with respect to the Property, or any portion thereof, express or
implied, or arising by operation of law, including, but not
limited to, any warranty of condition (physical, environmental or
otherwise), title (other than the limited warranties of title
contained in the grant deed), habitability or fitness for a
particular purpose or otherwise.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES OF BUYER
As a material inducement to Seller to enter into this
Agreement, Buyer hereby represents and warrants to and agrees
with Seller as follows:
9.1 Authority of Buyer. This Agreement and all documents
executed by Buyer which are to be delivered to Seller at or prior
to the Closing are or at the time of Closing will be duly
authorized, executed, and delivered by Buyer, are or at the time
of Closing will be legal, valid, and binding obligations of Buyer
enforceable in accordance with their terms.
9.2 Litigation. There is no litigation pending or, to
Buyer's knowledge threatened, against Buyer that is likely to
materially and adversely affect the ability of Buyer to perform
its obligations under this Agreement.
9.3 No Conflict. The execution and delivery of this
Agreement, the consummation of the transactions herein
contemplated, and compliance with the terms of this Agreement
shall not conflict with or result in a breach of any of the terms
of provisions of, or constitute a default under, any instrument
or agreement to which Buyer is a party or any applicable
regulation of any governmental agency, or any judgment, order or
decree of any court having jurisdiction over Buyer.
ARTICLE 10
COVENANTS OF SELLER
Seller agrees and covenants with Buyer, from the date hereof
through the Closing Date, as follows:
10.1 Maintenance and Operation of the Property. Seller
shall maintain the Property in good order, condition and repair,
reasonable wear and tear excepted, and shall make all repairs,
maintenance and replacements as is necessary to so maintain the
Property.
10.2 No Leases or Other Contracts. Seller shall not enter
into or modify any leases, service contracts or other similar
agreements with respect to the Property without the prior written
consent of Buyer, which consent shall not be unreasonably
withheld, and which consent or disapproval shall be provided
within two (2) business days following request therefor.
10.3 No Other Encumbrances. Seller shall not enter into
any agreements respecting the sale of the Property or any portion
thereof, and shall not enter into any agreements which encumber
or subject to lien the Property or any portion thereof.
10.4 Insurance. Seller shall keep its existing policies of
insurance in full force and effect.
10.5 Disclosure of Changes. If Seller discovers any
information or facts which would materially or adversely change
the representations and warranties of Seller contained in this
Agreement, Seller shall promptly give notice to Buyer of such
information or facts.
ARTICLE 11
DAMAGE OR DESTRUCTION; CONDEMNATION
In the event that, after the date hereof but prior to the
Closing Date, either any portion of the Property is taken
pursuant to eminent domain proceedings or any of the improvements
on the Property are damaged or destroyed by any casualty, Seller
shall have no obligation to repair or replace any such damage or
destruction. Seller shall, upon consummation of the transaction
herein provided, assign to Buyer all claims of Seller respecting
any condemnation or casualty insurance coverage, as applicable,
and all condemnation proceeds or proceeds from any such casualty
insurance received by Seller on account of any casualty (the
damage from which shall not have been repaired by Seller prior to
the Closing Date) as applicable, and Seller shall give Buyer a
credit equal to the deductible portion of Seller's insurance
policy attributable to the Property. In the event (i) the
condemnation award shall equal or exceed One Hundred Thousand
Dollars ($100,000) or otherwise materially and adversely affect
the Property, as reasonably determined by Buyer, or (ii) the cost
of repair of damage to the Property on account of a casualty,
shall equal or exceed One Hundred Thousand Dollars ($100,000) or
otherwise materially and adversely interfere with the operations
of the Property, as reasonably determined by Buyer, Buyer may, at
its option, terminate this Agreement by notice to Seller, given
on or before the Closing Date, in which event this Agreement
shall terminate, the Deposit, together with all interest earned
thereon, shall be returned to Buyer, and each party shall be
relieved of all further obligations hereunder.
ARTICLE 12
DELIVERY OF POSSESSION AND ENTRY ON PROPERTY
12.1 Delivery of Possession. Possession of the Property
shall be delivered to Buyer on the Closing Date.
12.2 Entry on Property. From the date hereof until the
Closing, Seller shall afford Buyer reasonable access to the
Property for the purpose of conducting Buyer's Inspections.
Buyer agrees to keep the Property free and clear of any
mechanic's liens or other liens in connection with Buyer's
Inspections and Reports, and Buyer indemnifies and holds Seller
harmless from and against any and all liability, loss, cost,
damage and/or expense, including, without limitation, attorneys'
fees and costs, resulting directly from Buyer's entry onto the
Property.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by Seller. Seller hereby agrees to
indemnify Buyer and hold Buyer harmless from and against any and
all claims, demands and losses, including, without limitation,
reasonable attorneys' fees and costs suffered by Buyer as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or
breach of covenant made by Seller in this Agreement or any
document, certificate, or exhibit given by Seller or delivered by
Seller to Buyer pursuant to or in connection with this Agreement;
and
(b) Any and all obligations, liabilities, claims,
liens or encumbrances, whether direct, contingent or
consequential and no matter how arising, and in any way related
to the Property and arising or accruing on or before the Closing
Date, or in any way related to or arising from any act, conduct,
omission, contract or commitment of Seller (or any of its agents
or employees) at any time or times on or before the Closing Date.
13.2 Indemnification by Buyer. Buyer hereby agrees to
indemnify Seller and hold Seller harmless from and against any
and all claims, demands liabilities, liens, costs, expenses,
penalties, damages and losses, including, without limitation,
reasonable attorneys' fees and costs suffered by Seller as a
direct or indirect result of:
(a) Any misrepresentation or breach of warranty or
breach of covenant made by Buyer in this Agreement or any
document, certificate, or exhibit given by Buyer or delivered by
Buyer to Seller pursuant to or in connection with this Agreement;
and
(b) Any and all obligations, liabilities, claims,
liens or encumbrances, whether direct, contingent or
consequential and no matter how arising, and in any way related
to the Property and arising or accruing after the Closing Date,
or in any way related to or arising from any act, conduct,
omission, contract or commitment of Buyer (or any of its agents
or employees) at any time or times after the Closing Date.
13.3 Warranty and Indemnity Regarding Estoppels. If Seller
has failed to deliver to Buyer any estoppel certificates required
to be delivered pursuant to Section 5.4 hereof on or before the
Closing Date and Buyer nevertheless elects to close the
transaction, Seller shall indemnify Buyer with respect to any
claim made by any tenant or other party which is based upon facts
not consistent with the representations and warranties of Seller
herein or set forth on the respective unmodified form of estoppel
certificate to have been provided by such tenant.
The provisions of this Article 13 shall survive the
execution and delivery of this Agreement, the delivery of the
Grant Deed and transfer of title.
ARTICLE 14
MISCELLANEOUS
14.1 Notices. Any notice or other communication required or
permitted to be given under this Agreement shall be in writing
and sent by commercial courier service, United States mail,
registered or certified mail, postage prepaid, return receipt
requested, and addressed as follows:
If to Buyer: Arden Realty Limited Partnership
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxx, Director of
Acquisitions
with a copy to: Christensen, Miller, Fink, Jacobs,
Xxxxxx, Weil & Xxxxxxx, LLP
2121 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxx, Esq.
Fax No. (000) 000-0000
If to Seller: Foremost Carmel Mountain Ltd.
00000 Xxxxxx Xxxxxxx, Xxxxx "X"
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Wish
Fax No. (000) 000-0000
If to Escrow Holder: California Counties Title Escrow
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxx
If to the Title Company: Chicago Title Insurance Company
________________________________
________________________________
________________________________
Attn: __________________________
or such other address as either party may from time to time
specify in writing to the other in the manner aforesaid. If
personally delivered, such notices or other communications shall
be deemed delivered upon delivery. If sent by commercial courier
service, United States mail, registered or certified mail,
postage prepaid, return receipt requested, such notices or other
communications shall be deemed delivered upon delivery or refusal
to accept delivery as indicated on the return receipt.
14.2 Brokers and Finders. In connection with the
transactions contemplated by this Agreement (a) Seller hereby
represents and warrants to Buyer that Seller has not, and shall
not, incur any obligation to any third party for the payment of
any broker's fee, finder's fee, commission or other similar
compensation, other than to Xxx & Associates, and (b) Buyer
hereby represents and warrants to Seller that Buyer has not, and
shall not, incur any obligation to any third party for the
payment of any broker's fee, finder's fee, commission or other
similar compensation. In the event of a claim for broker's fee,
finder's fee, commission or other similar compensation in
connection herewith, Buyer, if such claims is based upon any
agreement alleged to have been made by Buyer, hereby agrees to
indemnify and hold Seller harmless from and against any and all
liability, loss, cost, damage and/or expense (including, without
limitation, reasonable attorneys' fees and expenses) which Seller
may sustain or incur by reason of such claim, and Seller, if such
claims is based upon any agreement alleged to have been made by
Seller, hereby agrees to indemnify and hold Buyer harmless from
and against any and all liability, loss, cost, damage and/or
expense (including, without limitation, reasonable attorneys'
fees and expenses) which Buyer may sustain or incur by reason of
such claim. The provisions of this Section shall survive the
Closing.
14.3 Successors and Assigns. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereof and
their respective successors, heirs, administrators and assigns;
provided, however, that Buyer may not assign its rights or
obligations under this Agreement without the prior written
consent of Seller, which consent shall not be unreasonably
withheld or delayed. In addition, Buyer may assign its rights in
this Agreement to an entity which controls, is controlled by, or
is under common control with, Buyer without the consent of
Seller.
14.4 Amendments. This Agreement may be amended or modified
only by a written instrument executed by the parties hereto.
14.5 Continuation and Survival of Representations and
Warranties. All representations and warranties by the respective
parties contained herein or made in writing pursuant to this
Agreement are intended to be and shall remain true and correct as
of the time of Closing, shall be deemed to be material, and shall
survive the execution and delivery of this Agreement, and the
execution and delivery of the Deed and the transfer of title to
the Property.
14.6 Interpretation. Whenever used herein, the term
"including" shall be deemed to be followed by the words "without
limitation." Words used in the singular number shall include
the plural, and vice-versa, and any gender shall be deemed to
include each other gender.
14.7 Captions. The captions and headings of the Articles
and Sections of this Agreement are for convenience of reference
only, and shall not be deemed to define or limit the provisions
hereof.
14.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
14.9 Merger of Prior Agreements. This Agreement, including
the exhibits and schedules hereto, constitutes the entire
agreement between the parties with respect to the purchase and
sale of the Property and supersedes all prior agreements and
understandings between the parties hereto relating to the subject
matter hereof.
14.10 Attorneys' Fees. In the event either Buyer or Seller
brings any suit or other proceeding with respect to the subject
matter or enforcement of this Agreement, the prevailing party (as
determined by the court, agency or other authority before which
such suit or proceeding is commenced) shall, in addition to such
other relief as may be awarded, be entitled to recover attorneys'
fees, expenses and costs of investigation as actually incurred
(including, without limitation, attorneys' fees, expenses and
costs of investigation incurred in appellate proceedings, costs
incurred in establishing the right to indemnification, or in any
action or participation in, or in connection with, any case or
proceeding under Chapter 7, 11 or 13 of the Bankruptcy Xxxx, 00
Xxxxxx Xxxxxx Code Sections 101 et seq., or any successor
statutes).
14.11 Time of the Essence. Time is of the essence of this
Agreement.
14.12 Election of Remedies. Except as otherwise
specifically provided herein to the contrary in Section 2.3.2
hereof, no right or remedy conferred upon either party in this
Agreement is intended to be exclusive of any other right or
remedy contained herein or now or hereafter available to either
part at law or in equity, and every such right and remedy shall
be cumulative and shall be in addition be every other right or
remedy contained in this Agreement or now or hereafter available
to either party at law or in equity.
14.13 Authority. The parties signing below represent and
warrant that they have the requisite authority to bind the
entities on whose behalf they are signing.
14.14 Exhibits. The exhibits and schedules attached hereto
are hereby incorporated by reference herein.
14.15 Severability. The invalidity or unenforceability of
any one or more of the provisions of this Agreement shall not
affect the validity or enforceability of any of the other
provisions of this Agreement.
14.16 Further Assurances. The parties hereto agree to
execute, acknowledge and deliver any and all additional papers,
documents and other assurances and shall perform any and all acts
and things reasonably necessary in connection with the
performance of the obligations hereunder and to carry out the
intent of the parties hereto.
14.17 Effect of Waiver. A waiver by either party hereto
shall not affect either party's right to enforce the provisions
contained herein, nor shall nay extension or waiver be held to be
an extension of time or waiver of any prior or subsequent breach
of the same or any other obligation under this Agreement.
14.18 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
14.19 No Third Parties Benefitted. This Agreement is made
and entered into solely for the benefit of Seller and Buyer,
their successors and assigns, and no other person or entity shall
have any rights hereunder.
14.20 Specific Performance. The parties understand and
agree that the Property is unique and for that reason, among
others, Buyer will be irreparably damaged in the event that this
Agreement is not specifically enforced. Accordingly, in the
event of any breach or default in or of this Agreement or any of
the warranties, terms or provisions hereof by Seller, Buyer shall
have, in addition to a claim for damages for such breach or
default, and in addition and without prejudice to any right or
remedy available at law or in equity, the right to demand and
have specific performance of this Agreement.
14.21 Business Day. As used herein, Business Day shall
mean and refer to any day in which banking institutions are open
for business and the County Recorder's Office of San Diego
County, California is accepting documents for recordation in
their real estate records.
14.22 Furnishing of Audit Letter. Seller agrees to
furnish, from time to time upon the request of Buyer, an Audit
Letter substantially in the form of Exhibit K hereto, to Buyer's
accountants.
14.23 Arbitration. ANY CONTROVERSY OR CLAIM ARISING
UNDER OR RELATING TO THE TERMS OF THIS AGREEMENT OR ANY OF THE
EXHIBITS ATTACHED TO IT, AND ANY PROCEEDINGS TO ENFORCE THIS
AGREEMENT OR RIGHTS UNDER THIS AGREEMENT AND ITS EXHIBITS OTHER
THAN THE "EXCLUDED MATTERS" (AS HEREINAFTER DEFINED) SHALL BE
SETTLED BY ARBITRATION IN THE CITY OF SAN DIEGO, IN ACCORDANCE
WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION. THE ARBITRATOR(S) SHALL HAVE THE RIGHT TO DETERMINE
THE SCOPE OF THEIR JURISDICTION AND GRANT EQUITABLE RELIEF,
INCLUDING, WITHOUT LIMITATION, THE RIGHT TO ORDER THE EXPUNGEMENT
OF ANY LIS PENDENS WHICH THE ARBITRATOR(S) DEEM IMPROPER. THE
PREVAILING PARTY SHALL BE ENTITLED TO REASONABLE ATTORNEYS' FEES
AND OTHER REASONABLE COSTS INCURRED IN CONNECTION WITH THE
ARBITRATION OR ANY OTHER LITIGATION PLUS INTEREST ON THE AMOUNT
OF ANY AWARD. JUDGMENT UPON THE AWARD RENDERED BY THE
ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF. THIS PARAGRAPH MUST BE INITIALED BELOW IN ORDER FOR
THIS PARAGRAPH OF THE AGREEMENT TO BE BINDING.
NOTICE: BY INITIALLING IN THE SPACE BELOW, YOU ARE
AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
CALIFORNIA LAW, AND YOU ARE GIVING UP ANY RIGHTS YOU
MIGHT POSSESS TO HAVE THE DISPUTE LITIGATION IN A COURT
OR JURY TRIAL. BY INITIALLING IN THE SPACE BELOW, YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND
APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN
THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE
TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY. WE HAVE READ AND UNDERSTAND THE FOREGOING
AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO
NEUTRAL ARBITRATION.
/s/ RLW CVK /s/ VJC
Seller's Initials Buyer's Initials
As used herein, "Excluded Matters" means any controversy,
claim or proceeding with respect to or otherwise related to a
breach or default of any representation or warranty contained in
this Agreement (which matters shall not be subject to the
arbitration provisions contained herein).
14.24 Tax Deferred Exchange. Seller may desire to
dispose of the Property through a tax deferred exchange which
qualifies for non-recognition of gain under Section 1031 of the
Internal Revenue Code. Buyer shall cooperate with Seller in
attempting to effectuate such exchange, including, but not
limited to, the execution of such documentation as may be
reasonably necessary to effect such exchange, provided that
(i) Buyer shall not incur any additional liability in connection
with an exchange for the benefit of Seller, (ii) Buyer shall not
be obligated to take title to any real property (other than the
Property), (iii) the date of Closing shall not be extended as a
result of the exchange, without Buyer's prior written consent,
and (iv) any additional costs and charges attributable to the
exchange, including, but not limited to, attorneys' fees,
brokers' commissions and other transaction related expenses shall
be paid for by Seller. Buyer and Seller further agree that
Seller may substitute an intermediary ("Intermediary") to act in
place of Seller as the seller of the Property. The Intermediary
shall be designated in writing by Seller. Upon identification of
Intermediary, Intermediary shall be substituted for Seller as the
seller of the Property. Buyer agrees that performance by
Intermediary will be treated as performance by Seller. Seller
shall unconditionally guarantee the full and timely performance
by Intermediary of each and every one of the representations,
warranties, covenants, indemnities, obligations and undertakings,
and, in the event of breach, Buyer may proceed directly against
Seller on this guarantee without the need to join Intermediary as
a party to any action against Seller. Seller unconditionally
waives any defense that it might have as guarantor that it would
not have if it had made or undertaken these representations,
warranties, covenants, indemnities, obligations and undertakings
directly. In the event of the breach of any representations,
warranties, covenants, obligations and undertakings by Seller or
Intermediary or in the event of any claim upon any indemnity of
Seller or Intermediary (whether the representation, warranty,
covenant, indemnity, obligation or undertaking is express or
implied), Buyer's exclusive recourse shall be against the Seller
and Buyer shall have no recourse of any type against the
Intermediary arising from this transaction.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Seller: FOREMOST CARMEL MOUNTAIN LTD.
a California limited partnership
By: MAMMOTH EQUITIES, LLC,
a Nevada limited liability company
Its: General Partner
By: /s/ Xxxxxx X. Wish
Its: Managing Manager
By: BRIGHTON PARK, LTD.,
a California limited partnership
By: /s/ Xxxxxxx X. Xxxxxxxxx
Its: General Partner
Buyer: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY, INC.,
a Maryland corporation
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxxx
Its: President and COO
