SALE AND PURCHASE AGREEMENT
AND
ESCROW AGREEMENT
This Agreement, dated as of August 29, 1997, is made
by and between METROPOLITAN LIFE INSURANCE COMPANY, a New York
corporation ("Seller"), and ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Buyer") with reference to the
recitals set forth in Article I below and constitutes (i) a
contract of sale and purchase between the parties and (ii) an
escrow agreement between Seller, Buyer and FIRST AMERICAN TITLE
INSURANCE COMPANY ("Escrow Agent"), the consent of which appears
at the end hereof.
ARTICLE I
RECITALS
1.1 Real Property. Seller owns and holds fee title to
that certain land (the "Land") described in Exhibit A attached
hereto, together with all improvements (the "Improvements")
located thereon known as South Bay Technology Center and located
at 680 and 000 Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx,
(collectively, the "Real Property").
1.2 Personal Property. In connection with the Real
Property, Seller has (i) obtained certain governmental permits
and approvals, (ii) obtained certain contractual rights and other
intangible assets, and (iii) acquired certain other items of
tangible personal property more completely described in Exhibit B
(collectively, the "Personal Property"). The Real Property and
the Personal Property are collectively referred to as the
"Property."
1.3 Purchase and Sale. Seller now desires to sell and
Buyer now desires to purchase all of Seller's right, title and
interest in and to the Property, upon the terms and covenants and
subject to the conditions set forth below.
ARTICLE II
PURCHASE PRICE
2.1 Price. In consideration of the covenants herein
contained, Seller hereby agrees to sell and Buyer hereby agrees
to purchase the Property for a total purchase price of Six
Million Four Hundred Thousand Dollars ($6,400,000) (the "Purchase
Price"), which Buyer shall, at or before the Closing (as defined
in Section 8.1), deliver to Escrow Agent, by bank wire transfer
of immediately available funds. The Purchase Price received by
Seller at Closing shall be adjusted to reflect prorations and
other adjustments pursuant to Section 9.1.
ARTICLE III
OPENING OF ESCROW
Buyer and Seller have opened an escrow with Escrow
Agent. Upon the mutual execution of this Agreement, Buyer and
Seller shall deposit with Escrow Agent fully executed
counterparts of this Agreement for use as escrow instructions.
If required by Escrow Agent, Buyer and Seller further agree to
execute Escrow Agent's usual form of supplemental escrow
instructions for transactions of this type as Escrow Agent may
reasonably request and as are reasonably acceptable to Buyer and
Seller and as are not inconsistent with the provisions of this
Agreement; provided, however, that such escrow instructions shall
be for the purpose of implementing this Agreement, and such
instructions shall incorporate this Agreement by reference and
shall specifically provide that no provision thereof shall have
the effect of modifying this Agreement unless it is so expressly
stated and initialed on behalf of Buyer and Seller.
ARTICLE IV
CONDITIONS TO THE PARTIES' OBLIGATIONS
4.1 Escrow Agent. Escrow Agent shall not be concerned
with this Section nor have any responsibility therefor.
4.2 Conditions to Buyer's Obligation to Purchase.
Buyer's obligation to purchase is expressly conditioned upon each
of the following:
(a) Performance by Seller. Performance in all
material respects of the obligations and covenants of, and
deliveries required of, Seller hereunder.
(b) Delivery of Title and Possession. Delivery at the
Closing of (i) the Deed (as defined in Section 6.1(a)) and
issuance of the Title Policy (as defined in Section 8.1(b))
showing title in Buyer in the condition described in Section
8.1(b), and (ii) possession as provided in Section 17.1.
(c) Seller's Representations. The representations and
warranties by Seller set forth in Section 13.2 being true and
correct in all material respects as of the Closing.
(d) Tenant Estoppels. Delivery at the Closing of
estoppel letters (the "Estoppel Letters"), which except in the
case of leases to agencies or departments of the State of
California, shall be in substantially the form annexed hereto as
Exhibit G, from tenants under Leases representing not less than
seventy-five percent (75%) of the leased square footage of the
Property and, in any event, including responses from Pitney
Xxxxx, Inc., Carnet Holding Corporation and RE Xxxxxxxxxx, Inc.;
provided, however, that if Seller is unable to obtain the
Estoppel Letters prior to the Scheduled Closing Date, Seller
shall be entitled to adjourn the Closing for up to thirty (30)
days to attempt to obtain the Estoppel Letters; and provided,
further, that, if Seller is unable to obtain any of the Estoppel
Letters, Seller shall be entitled (but shall not be obligated) to
satisfy the closing condition with respect thereto by providing,
in lieu thereof, Seller's representations as to the matters
addressed in the missing Estoppel Letters, subject, however, to
the limitations contained in Sections 13.4 and 18.15 hereof.
(e) Shell Indemnity. Delivery at the Closing of an
Indemnification Agreement, substantially in the form attached
hereto as Exhibit M, executed by Shell Oil Company in favor of
Buyer.
4.3 Conditions to Seller's Obligation to Sell.
Seller's obligation to sell is expressly conditioned upon each of
the following:
(a) Performance by Buyer. Performance in all material
respects of the obligations and covenants of, and deliveries
required of, Buyer hereunder.
(b) Receipt of Purchase Price. Receipt of the
Purchase Price and any adjustments due Seller under Article IX at
the Closing in the manner herein provided.
ARTICLE V
BUYER'S DELIVERIES TO ESCROW AGENT
5.1 Purchase Price. Buyer shall deliver to Escrow
Agent the Purchase Price as set forth in Article II, subject to
adjustments and prorations in accordance with Article IX.
5.2 Deliveries. Buyer shall, at or before the
Closing, deliver to Escrow Agent each of the following:
(a) Assignment of Leases and Contracts. Four executed
counterparts of the Assignment and Assumption of Leases,
Contracts and Other Property Interests (the "Assignment of Leases
and Contracts") in the form of Exhibit C.
(b) Xxxx of Sale. Four executed counterparts of a
xxxx of sale (the "Xxxx of Sale") in the form of Exhibit F,
pursuant to which Seller shall convey and transfer to Buyer all
of its right, title and interest in and to the Personal Property.
(c) Cash B Prorations. The amount, if any, required
of Buyer under Article IX.
5.3 Failure to Deliver. The failure of Buyer to make
any delivery required above by the date, or within the time, set
forth above shall constitute a default hereunder by Buyer.
ARTICLE VI
SELLER'S DELIVERIES TO ESCROW AGENT
6.1 Delivery of Instruments and Documents. Seller
shall, at or before the Closing, deliver to Escrow Agent the
following instruments and documents:
(a) Deed. A grant deed (the "Deed"), substantially in
the form annexed hereto as Exhibit L, with respect to the Real
Property, executed and acknowledged by Seller, pursuant to which
Seller shall convey title to the Real Property subject to the
following (collectively, the "Permitted Encumbrances"):
(1) Non-delinquent real property taxes and
all assessments and unpaid installments thereof which
are not delinquent.
(2) The leases affecting the Property
enumerated in Exhibit D and any leases executed in
accordance with this Agreement after the date hereof
(collectively, the "Leases"), and the rights of the
tenants thereunder.
(3) Any other lien, encumbrance, easement or
other exception or matter voluntarily imposed or
consented to by Buyer prior to or as of the Closing.
(4) All exceptions to title disclosed in the
Title Policy (as defined in Section 8.1).
(5) Exceptions and matters normally
contained in the standard printed form of American Land
Title Association extended coverage owner's policy.
(6) Any matters shown on the survey, if any,
delivered in accordance with Section 7.1, or which a
visual inspection of the Property would reveal.
(b) Assignment of Leases and Contracts. Four executed
counterparts of the Assignment of Leases and Contracts, together
with original executed counterparts (or copies if originals are
not in Seller's possession) of the Leases and the service
contracts, equipment leases, maintenance agreements and other
contracts affecting the Property enumerated in Exhibit E (the
"Contracts") assigned thereby.
(c) Xxxx of Sale. Four executed counterparts of the
Xxxx of Sale.
(d) Tenant Estoppels. The Estoppel Letters (as
defined in Section 4.2(d)).
(e) Notices to Tenants. Notices signed by Seller (or
Seller's manager for the Improvements) addressed to each tenant
under each Lease in the form of Exhibit H.
(f) FIRPTA Affidavit. Executed copies of an affidavit
in the form of Exhibit I, with respect to the Foreign Investment
in Real Property Tax Act.
(g) California Form 590 RE. Executed copies of
California Franchise Tax Board Form 590 RE in the form of Exhibit
K.
(h) Cash B Prorations. The amount, if any, required
of Seller under Article IX.
6.2 Failure to Deliver. The failure of Seller to make
any delivery required above by the date, or within the time, set
forth above shall constitute a default hereunder by Seller.
ARTICLE VII
INVESTIGATION OF PROPERTY
7.1 Delivery of Documents. On or before the date of
this Agreement, Seller has delivered to Buyer all items listed on
Exhibit J attached hereto and Buyer hereby confirms receipt of
same.
7.2 Physical Inspection of Property. Buyer acknowl
edges and agrees that Buyer has completed all physical
inspection, testing and survey of the Property required by Buyer
and Buyer's representatives, agents and designees.
Buyer hereby agrees to indemnify and hold harmless
Seller, SSR Realty Advisors, Inc. and the pension fund or other
investors on whose behalf Seller is acting, from and against any
mechanics' lien or claim therefor, any claim, cause of action,
lawsuit, damage, liability, loss, cost or expense (including,
without limitation, attorneys' fees) arising out of any such
inspections, tests or survey conducted by Buyer, its representa
tives, agents or designees. The provisions of this Section 7.2
shall survive the termination of this Agreement or the Closing
hereunder.
ARTICLE VIII
THE CLOSING
8.1 Date and Manner of Closing. Escrow Agent shall
close the escrow (the "Closing") as soon as all conditions to
closing contained in this Agreement have been satisfied which
shall in any event be no later than August 28,1997 (the "Final
Closing Date"), time being of the essence (subject only to
Seller's remedy period under Section 4.2(d) actually extending
beyond such date and Seller's cure rights under Section 15.2, in
which event Seller will give Buyer not less than three business
days notice of the date of Closing), by (i) filing for record the
Deed and such other documents as may be necessary to procure the
Title Policy, (ii) delivering the Purchase Price to Seller in the
form of a bank wire transfer of immediately available funds, and
(iii) delivering funds and documents as set forth in Article X
entitled "Distribution of Funds and Documents," WHEN AND ONLY
WHEN each of the following conditions has been satisfied:
(a) Funds and Documents. All funds and instruments
required to be delivered to Escrow Agent pursuant to Articles V
and VI have been so delivered to Escrow Agent.
(b) Title Insurance. The Title Company is prepared to
issue a standard American Land Title Association owner's policy
of title insurance (the "Title Policy") with liability in the
amount of the Purchase Price, insuring that fee title to the Real
Property vests in Buyer subject to the Permitted Encumbrances.
8.2 Additional Title Insurance. Buyer may, at Buyer's
option, direct Title Company to issue additional title insurance
endorsements and extended coverage and extended coverage, if
Buyer pays for the extra cost of such additional endorsements and
provided that Title Company's failure to issue any such
additional endorsements shall not affect Buyer's obligations
under this Agreement.
8.3 Delay in Closing; Authority to Close. If Escrow
Agent cannot close the escrow on or before the Final Closing
Date, it will, nevertheless, close the same when all conditions
have been satisfied or waived, notwithstanding that one or more
of such conditions has not been timely performed, unless after
the Final Closing Date and prior to the close of the escrow,
Escrow Agent receives a written notice to terminate the escrow
and this Agreement from a party who, at the time such notice is
delivered, is not in default hereunder. The exercise of such
right of termination, any delay in the exercise of such right,
and the return of monies and documents, shall not affect the
right of the party giving such notice of termination to pursue
remedies permitted under Article XII for the other party's breach
of this Agreement. In addition, the giving of such notice, the
failure to object to termination of the escrow or the return of
monies and documents shall not affect the right of the other
party to pursue other remedies permitted under Article XII for
the breach of the party who gives such notice.
ARTICLE IX
PRORATION, FEES, COSTS AND ADJUSTMENTS
9.1 Prorations. (a) On or before the Closing, Buyer
and Seller shall agree on the amounts of the prorations and
inform Escrow Agent of such amounts. In accordance therewith,
Escrow Agent shall prorate between the parties (and the parties
shall deposit funds therefor with Escrow Agent or shall instruct
Escrow Agent to debit against sums held by Escrow Agent owing to
such party), as of 11:59 p.m. the day prior to the Closing, all
income and expenses with respect to the Property and payable to
or by the owner of the Property, including, without limitation:
(i) all real property taxes on the basis of the fiscal period for
which assessed (if the Closing shall occur before the tax rate is
fixed, the apportionment of taxes shall be based on the tax rate
for the preceding period applied to the latest assessed
valuation); (ii) rents and other tenant payments, if any,
received under the Leases; (iii) delinquent rentals and other
tenant payments, if any, not more than 30 days overdue under the
Leases; (iv) charges for water, sewer, electricity, gas, fuel and
other utility charges, all of which shall be read promptly before
Closing, unless Seller elects to close its own applicable
account, in which event Buyer shall open its own account and the
respective charges shall not be prorated; (v) amounts prepaid and
amounts accrued but unpaid on service contracts and management
contracts which are to be assumed by Buyer; and (vi) amounts, if
applicable, pursuant to Section 18.16.
At the Closing Buyer shall pay or reimburse Seller for
all leasing commissions, tenant improvement costs and other
charges payable by reason of or in connection with any Lease
entered into after July 7, 1997 or any renewal, modification or
extension of an existing Lease after such date.
Real property tax refunds and credits received after
the Closing which are attributable to a fiscal tax year prior to
the Closing shall belong to Seller. Any such refunds and credits
attributable to the fiscal tax year during which the Closing
occurs shall be apportioned between Seller and Buyer after
deducting the reasonable out-of-pocket expenses of collection
thereof, and this apportionment obligation shall survive the
Closing.
At the Closing, Seller shall deliver to Buyer all
security deposits (plus interest accrued thereon to the extent
required to be paid by the applicable Lease or applicable law)
required to be held by Seller under the Leases (other than those
then permitted to be applied by Landlord against outstanding
obligations).
Delinquent rentals and other tenant payments more than
30 days overdue, if any, shall not be prorated and all rights
thereto shall be retained by Seller who reserves the right to
collect and retain such delinquent rentals and payments, provided
that any legal proceedings initiated by Seller with respect to
the collection thereof shall be subject to Buyer's approval not
to be unreasonably withheld or delayed. If at any time after the
Closing Buyer shall receive any such delinquent rentals or
payments (all of which Buyer shall use its best efforts to
obtain), Buyer shall immediately remit such rents and payments to
Seller, provided that any monies received by Buyer from a
delinquent tenant shall be applied first to current rents then
due and payable and then to delinquent rents in the inverse order
in which they became due and payable. If any tenants are
required to pay percentage rent, additional rent or escalation
charges for real property taxes, operating expenses or other
charges, Seller and Buyer shall at the Closing reasonably
estimate the unpaid amount thereof attributable to any period
prior to the Closing and Buyer shall pay such amount to Seller at
the Closing.
(b) (i) If any rents (including cost reimbursement
payments) are payable or accruable under the Leases on the basis
of estimates or formulae and are subject to adjustment after the
Closing Date, such rents shall be apportioned at the Closing to
the extent collected on the basis of the then current charges or
accruals, as applicable, and shall be subject to reapportionment
on the basis of the amounts as finally determined to be owing
under the Leases. Apportionment of escalation rent shall be made
on the basis of a 365-day year and the actual number of days
elapsed. At the end of the fiscal year following Closing, Buyer
shall prepare and submit to Seller a final calculation of the
amounts and other items to be apportioned pursuant to this
Agreement as of the Closing Date (the "Final Report"). Seller
shall raise any objections it has to the Final Report within
thirty (30) days after the submission thereof by written notice
to Buyer given within said thirty (30) day period and stating in
reasonable detail Seller's objections, and Buyer shall allow
Seller and its authorized representatives reasonable access
during business hours to its books and records pertinent to the
Property to permit Seller to review the Final Report and to
ascertain its accuracy.
(ii) If Seller shall raise any objections to the Final
Report as provided above, the parties shall meet within
ten (10) days after submission of Seller's notice thereof and
attempt to resolve such objections. If any objections are not
resolved within said ten (10) day period, such objections may
thereafter be submitted by either party to Price Waterhouse LLP
(or if it shall fail or refuse to serve such other "Big Six"
accounting firm as mutually acceptable to Seller and Buyer) for
determination. The determination of such firm shall be final and
conclusive on the parties and judgment may be entered thereon in
any court of competent jurisdiction. The rules of the American
Arbitration Association applicable to commercial arbitrations
shall apply to any such arbitration.
(iii) The Final Report shall be deemed amended by
agreement of the parties or determination of such firm, and,
within ten (10) days after such agreement or determination, Buyer
shall xxxx the tenants therefor. Thereafter, Seller promptly
shall pay to Buyer, or Buyer shall pay to Seller promptly upon
collection, as the case may be, the amount determined to be due
from such party to the other in accordance with this Section 8
based upon the Final Report, as the same may have been amended;
provided, however, if the Final Report as so amended or
determined shall evidence a net amount due from one party to the
other of less than $10,000, no settlement of such amount due
shall be required.
(iv) If a determination is required, the parties shall
bear the fees and expenses of the firm handling such
determination equally.
(c) The obligations of the parties hereto under this
Section 9.1 shall survive the Closing.
9.2 Seller's Closing Costs. Seller will pay (i) the
documentary transfer tax, in the amount Escrow Agent determines
to be required by law, (ii) one-half of Escrow Agent's escrow fee
or escrow termination charge, (iii) Seller's own attorneys' fees,
(iv) the cost of the Title Report and the title premium for the
Title Policy, and (v) taxes and any other costs incurred in
recording the Deed or any other instruments other than the
documentary transfer tax.
9.3 Buyer's Closing Costs. Buyer will pay (i)
one-half of Escrow Agent's escrow fee or escrow termination
charge, (ii) the cost of any other title insurance endorsements
and extended coverage ordered by Buyer, (iii) the cost of any new
survey of the Property or any update of any existing survey,
(iv) any costs incurred in connection with Buyer's investigation
of the Property pursuant to Article VII, and (v) Buyer's own
attorneys' fees.
ARTICLE X
DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Form of Disbursements. All disbursements by
Escrow Agent shall be made by bank wire transfer to the account
of the receiving party, as such pa to the
Property. Further, Seller agrees to provide such auditor a
representation letter regarding the books and records of the
Property, in a form reasonably acceptable to Seller, Buyer and
Buyer's auditor, in connection with the normal course of auditing
the Property in accordance with generally accepted auditing
standards (but shall not thereby be deemed to have made any
representation or warranty to Buyer or to any other third party).
IN WITNESS WHEREOF, this Agreement has been executed as
of the date first set forth above.
SELLER: BUYER:
METROPOLITAN LIFE INSURANCE ARDEN REALTY LIMITED
COMPANY PARTNERSHIP, a Maryland limited
partnership
By: SSR Realty Advisor, By: Arden Realty,Inc., a Maryland
its Investment Advisor corporation, its general partner
By:/s/ Xxxx X. Xxxxx By:/s/ Xxxxxxx X. Xxxxx
Authorized Signatory Name: Xxxxxxx X. Xxxxx
Title:CEO
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees to (i)
accept the foregoing Agreement, (ii) be escrow agent under said
Agreement, and (iii) be bound by said Agreement in the
performance of its duties as escrow agent.
By /s/ Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxxxx
[Print Name]
Its Escrow Officer
[Title]
