AGREEMENT OF PURCHASE AND SALE
OR CONTRIBUTION
AND ESCROW INSTRUCTIONS
Between
HFA-CLARENDON CREST, L.L.C.,
Seller
and
ARDEN REALTY LIMITED PARTNERSHIP,
Purchaser
Covering
00000 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx
February 18, 1997
AGREEMENT OF PURCHASE AND SALE
OR CONTRIBUTION
AND ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE OR CONTRIBUTION AND
ESCROW INSTRUCTIONS ("Agreement") is made and entered into this
18th day of February, 1997 by and between HFA-CLARENDON CREST,
L.L.C., a Delaware limited liability company ("Seller"), and ARDEN
REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Purchaser"), with reference to the following facts:
A. Seller is the fee owner of that certain parcel of real
property (the "Real Property") that, for informational purposes
only, is improved with a three (3)-story stucco covered structural
steel moment frame office building above reinforced concrete
parking levels containing approximately 43,061 net rentable square
feet, other facilities, fixtures, paving and surfacing thereon or
associated therewith, and parking facilities containing
approximately 124 marked spaces (collectively, the
"Improvements"). The Real Property is located at 00000 Xxxxxxxxx
Xxxxxx, in the City of Los Angeles, County of Los Angeles, in the
State of California, and is more particularly described in Exhibit
"A" attached hereto and forming a part hereof.
B. Seller desires to sell, and Purchaser desires to
purchase, all of the real and personal property owned by Seller
located at or forming part of the Real Property, including, but
not limited to, the Improvements, and all appurtenant easements
and rights, and the Personal Property (as hereinafter defined) on
the terms, covenants and conditions hereinafter set forth.
NOW, THEREFORE, with reference to the foregoing recitals and
in reliance thereon and in consideration of the purchase price
hereinbelow set forth, and the other terms, covenants and
conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed by Seller and
Purchaser as follows:
1. Purchase and Sale; or Contribution. Subject to all of the
terms and conditions of this Agreement and for the consideration
set forth, on Closing (as hereinafter defined), Seller shall
convey, or cause to be conveyed, to Purchaser, and Purchaser or
its assignee shall acquire by purchase from Seller or, at Seller's
election, by contribution from Seller, all of the following:
(a) The Real Property and the Improvements, together
with all easements, hereditaments and appurtenances thereto,
subject only to such easements, agreements and exceptions as may
have been approved by Purchaser in accordance with Paragraph 4(a)
hereof and the tenancies and occupancies that are set forth on
Exhibit "B";
(b) All of the personal property (the "Personal
Property") located at, attached or appurtenant to, or used in
connection with the operation or maintenance of the Real Property
and/or the Improvements listed on Exhibit "C" (the "Inventory");
(c) All leases to tenants leasing space in the
Improvements (the "Tenant Leases");
(d) To the extent assignable, those certain service
and other agreements more particularly described in Exhibit "D"
attached hereto and made a part hereof; and
(e) All other right, title and interest of Seller
constituting part and parcel of the Property (as hereinafter
defined), including, but not limited to, trade names, logos,
easements, licenses, permits, air rights, certificates of
occupancy, warranties, rights-of-way, signs, trademarks, telephone
listings and numbers, sewer agreements, water line agreements,
utility agreements, water rights and oil, gas and mineral rights
(collectively, the "Intangibles") to the extent assignable or
transferable. Reference herein to the "Property" shall include
all of the real, personal and intangible property described in
subparagraphs (a) through (e) hereof.
2. Purchase Price; Payment or Contribution.
2.1 The purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property, if the transaction
is to be a purchase and sale, is the sum of Five Million Two
Hundred Thousand Dollars ($5,200,000.00), payable as follows:
(a) Upon the opening of Escrow (as hereinafter set
forth) Purchaser shall deliver to Escrow Agent (as hereinafter
defined) cash in the sum of Twenty-Five Thousand Dollars
($25,000), ("Initial Deposit") which shall be held by Escrow Agent
as security for the full performance by Purchaser of its
obligations hereunder and on account of the Purchase Price payable
at Closing, subject to the following terms and conditions:
(i) If Purchaser elects to continue with this
Agreement at the Approval Date (as hereinafter defined), Purchaser
shall increase the Initial Deposit by the amount of $25,000 in
cash for a total of $50,000 (which sums, together with any
interest earned thereon and additions thereto, are herein
collectively called the "Deposit") within one business day after
the Approval Date;
(ii) If Closing occurs, then the Deposit shall be
applied to the Purchase Price;
(iii) If Closing does not occur and Seller shall
be entitled to liquidated damages as provided in Paragraph 10(b)
hereof, Seller shall be entitled to the Deposit; and
(iv) If the Closing does not occur and Purchaser
shall be entitled to the return of the Deposit as provided in this
Agreement, the same shall be returned to Purchaser.
(b) Purchaser shall pay to Seller through Escrow Agent
at Closing in immediately available funds an amount equal to the
balance of the Purchase Price, plus (or minus) the net amount of
all costs, expenses, adjustments and prorations to be credited (or
debited) to Purchaser pursuant to this Agreement (the "Adjusted
Purchase Price"). If Seller fails to forward to Purchaser a
Qualifying Statement provided under 1445 of the Internal Revenue
Code and an equivalent Form 590RE provided under the Revenue and
Taxation Code of the State of California (to the extent
applicable), Escrow Agent shall be entitled to withhold and pay to
the Internal Revenue Service and the Franchise Tax Board such
withholding required of Purchaser pursuant to Internal Revenue
Code 1445 and equivalent form provided under the Revenue and
Taxation Code of the State of California.
(c) The Deposit shall be at all times invested by
Escrow Agent in the following investments ("Approved
Investments"): (i) United States Treasury obligations, (ii)
United States Treasury-backed repurchase agreements issued by a
major money center banking institution reasonably acceptable to
Seller, (iii) Certificates of Deposit or Money Market Accounts of
institutions whose deposits are insured by the FDIC or (iv) such
other manner as may be reasonably agreed to by Seller and
Purchaser. The Deposit shall be disposed of by Escrow Agent only
as provided in this Agreement.
(d) All payments required to be made under this
Agreement shall be made in U.S. funds.
2.2 In lieu of a purchase and sale transaction, Seller
can elect by written notice delivered to Purchaser prior to the
expiration of the Approval Period (as hereinafter defined), to
contribute the Property to Purchaser ("Contribution") and to
become an additional limited partner in Purchaser at Closing. In
that connection, the parties agree that the payments to be made by
Purchaser to Seller at Closing shall be made and adjusted as
follows:
(i) An amount (the "Loan Payoff Amount") equal to
the aggregate amount necessary to pay off the existing loan
("Existing Loan") made by Imperial Thrift & Loan Association
("Existing Lender") and secured by, among other documents, a first
deed of trust covering the Property; and
(ii) An amount (the "Contribution Value") equal to
the amount by which the Adjusted Purchase Price exceeds the Loan
Payoff Amount shall be deemed paid by Seller receiving at Closing
limited partnership interests ("OP Units") in Purchaser (as more
particularly set forth herein).
Each OP Unit shall have a value equal to one (1) share of Arden
Realty, Inc. common stock ("ARI") as of the date which is three
(3) business day prior to Closing. ARI is listed on the New York
Stock Exchange under the Symbol ARI. The OP Units may be
exchanged only in accordance with that certain Amendment to
Limited Partnership Agreement, in the form attached hereto as
Exhibit "K" and by this reference incorporated herein. Except as
otherwise set forth herein, the balance of subparagraphs (a)
through (d) above, shall be equally applicable to the
Contribution; provided, further, however that if Seller makes the
Contribution election as herein provided, the terms and provisions
of this Agreement shall be modified mutatis mutandis to effectuate
the foregoing (and if requested the parties will enter into a
modification agreement in such form as may be reasonably agreed
upon to effectuate the same).
3. Escrow.
(a) Opening of Escrow. As soon as commercially
reasonable after their complete execution and delivery of this
Agreement ("Effective Date") and in any event not later than two
business days thereafter, Seller and Purchaser shall open an
escrow (the "Escrow") with Commerce Escrow, 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx Xxxxxx ("Escrow Agent"), through which the purchase and sale
of the Property shall be consummated. A fully executed copy of
this Agreement shall be deposited with Escrow Agent, duly executed
by Seller, Purchaser and Escrow Agent, to serve as Escrow
instructions to Escrow Agent, and Escrow Agent shall be and is
hereby authorized and instructed to deliver pursuant to the terms
of this Agreement the documents and monies to be deposited into
the Escrow. Escrow Agent may attach to this Agreement Escrow
Agent's standard form escrow agreement, to the extent that the
same is consistent with the terms hereof, and are reasonably
approved by Seller and Purchaser. Escrow Agent shall immediately,
upon receipt of such duly executed copy of this Agreement, notify
Seller and Purchaser of the opening of Escrow. Should either
party fail to open Escrow in accordance with the provisions of
this Paragraph 3(a), such failure shall constitute a material
breach of this Agreement.
(b) Closing of Escrow. Escrow shall close April 1,
1997, provided the Tenant Estoppels satisfying the requirements of
paragraph 8(b) hereof have been received and all other Purchaser's
Conditions Precedent to Closing as set forth in Paragraph 8 hereof
have been satisfied. The term "Closing" as used herein shall be
deemed to be the date upon which the respective Conditions
Precedent to Purchaser's Obligation to Close Escrow (set forth in
Paragraph 8 below) and the Conditions Precedent to Seller's
Obligation to Close Escrow (set forth in Paragraph 9 below) have
been satisfied, the Grant Deed ("Grant Deed" herein) hereinafter
referred to is recorded in the office of the County Recorder of
Los Angeles County. If the Closing as provided herein does not
occur, this Agreement and the Escrow shall be cancelled and
terminated and thereafter neither party shall have any further
obligation or liability to the other party, except as expressly
set forth in this Agreement.
4. Title Matters.
(a) Title Report.
(i) Seller has ordered (and upon receipt shall
cause to be delivered to Purchaser) a CLTA Preliminary Title
Report covering the Real Property and the Improvements, which may
state that it is subject to any matter that would be disclosed by
a survey (the "Preliminary Title Report"), issued by First
American Title Company ("Title Company"), together with true
copies of all documents evidencing matters of record shown as
exceptions to title thereon. Seller has delivered to Purchaser a
copy of that certain survey of the Property dated March 21, 1996
prepared by Xxxxxxx Associates (the "Survey"). If Purchaser shall
desire to update such Survey, Purchaser shall cause the same to be
so updated at Purchaser's sole cost and expense before the
Approval Date (and upon receipt shall deliver a copy of the
updated Survey to Seller). Purchaser shall have the right to
object to any exceptions contained in the Preliminary Title Report
or the Survey (or updated Survey) by giving notice to Seller by
the Approval Date. Notwithstanding any of the foregoing, Seller
shall at Closing (but shall not be obligated prior thereto) remove
of record (or at Seller's election provide a credit to Purchaser
sufficient to pay off) all tax and mechanic's liens (except only
for the liens of the taxes and assessments to be prorated under
Paragraph 12(a)(ii)), at its sole cost and expense. Unless
Purchaser gives written notice that it disapproves any such
additional exceptions to title matters, stating the exceptions so
disapproved, by the Approval Date, Purchaser shall be deemed to
have approved said exceptions. Purchaser's approval of the
Preliminary Title Report shall be without prejudice to Purchaser's
right to disapprove additional survey matters or any supplementary
reports issued by Title Company or disclosed after the Approval
Date; provided, however, Purchaser's approval shall not be
unreasonably withheld, and, as to survey matters, shall only be
applicable if Purchaser shall have obtained an update of the
Survey before the Approval Date. If for any reason, on or before
the Closing Date Seller does not cause such exceptions to title or
survey matters which Purchaser timely disapproves (to the extent
Purchaser is permitted hereunder to so disapprove) to be removed
at no cost or expense to Purchaser (Seller having the right but
not the obligation to do so), the obligation of Seller to sell,
and Purchaser to buy, the Property as herein provided shall
terminate (and Seller and Purchaser shall have no further
obligations in connection herewith). Purchaser shall have the
option to waive the condition precedent set forth in this
paragraph 4(a) by notice to Seller. In the event of such waiver,
such condition shall be deemed satisfied. All matters set forth
on the Preliminary Title Report, the Survey or any updated Survey
obtained by Purchaser which are not timely objected to by
Purchaser shall be permitted exceptions to title and shall
additionally include (i) any title or survey matters objected to
by Purchaser, which objections are subsequently waived in writing
by Purchaser, and (ii) any title or survey matters objected to by
Purchaser in accordance with the terms and provisions of this
Agreement, which objections are cured to Purchaser's satisfaction,
(iii) real estate taxes and assessments not yet due and payable;
and (iv) the printed exceptions which appear in the standard form
ALTA owner's policy of title insurance (with extended coverage).
(ii) If at the date of Closing there are any
liens or encumbrances that Seller is obligated to pay and dis-
charge, Escrow Agent may use any portion of the Purchase Price to
satisfy the same (if the same are not bonded-over or otherwise
satisfied by title endorsement), provided Seller shall simultane-
ously either deliver to Escrow Agent at Closing title instruments
in recordable form sufficient to satisfy such liens and encum-
brances of record, together with the cost of recording or filing
said instruments.
(b) Title Policy. The Title Policy shall be First
American Title Company's ALTA Owner's policy with liability in the
amount of the Purchase Price, showing fee title to the Real
Property and the Improvements as vested in Purchaser, or in
Purchaser's permitted assignee, subject only to the permitted
exceptions specified in Paragraph 4(a) above.
5. Delivery of Information.
(a) As soon as practicable after the date hereof, but
in no event later than five (5) business days after the Effective
Date, except as otherwise set forth, Seller shall have delivered
or shall have caused to be delivered or made available to
Purchaser at the Property to Purchaser to the extent they are in
Seller's possession or under its control, the following:
(i) Complete copies of all of the Tenant Leases
and all amendments thereto, a schedule of which is attached hereto
as Exhibit "B" and forms a part hereof.
(ii) The loss history of the Property pertaining
to any property damage or personal injury suffered for which an
insurance claim of more than Fifty Thousand Dollars ($50,000) was
submitted by Seller at any time after April 1, 1996 to the extent
available to Seller;
(iii) A set of all plans and specifications and
third-party soil reports, or environmental reports and studies
relating to the Property;
(iv) All electricity and property tax bills for
the period beginning April 1, 1996 to the extent available to
Seller;
(v) Statements of income and expense for the
Property for the calendar years 1996 (from and after April 1,
1996) and current year to date to the extent available to Seller;
(vi) All warranties and operating manuals that
Seller may have from vendors, contractors or servicing agents with
respect to the physical condition of the Property or any portion
thereof or the equipment located therein; and
(vii) Complete copies of all service and other
contracts pertaining to the Property in respect to which Seller is
obligated (the "Service Contracts").
(b) Except as expressly provided in this Agreement,
Seller makes no representation or warranty as to the accuracy of
the information contained in any of the documents, instruments or
agreements to be provided to Purchaser pursuant to this Paragraph
5.
(c) Purchaser shall have until 5:00 P.M. on the date
that is thirty (30) days after the Effective Date or the next
business day if that date is a Saturday, Sunday or legal holiday
(the "Approval Date") in which to approve or disapprove all
matters and things that are subject to Purchaser's rights of
review, inspection and approval hereunder. Purchaser's failure
either to approve or disapprove said information by the Approval
Date as aforesaid shall be deemed its approval thereof (and its
covenant to deliver the additional $25,000 deposit required
pursuant to paragraph 2(a)(i) hereof). If Purchaser disapproves
any of said information, Purchaser shall notify Seller in writing
thereof within the time period specified above whereupon, this
Agreement shall terminate, however, notwithstanding the foregoing,
if Purchaser disapproves any Service Contract, this Agreement
shall not terminate and Seller shall lawfully terminate such
Service Contract not later than thirty (30) days after the
Closing, to the extent the same can be so terminated and provided
Purchaser shall pay all cancellation or termination penalties,
fees or costs in connection therewith.
6. Inspections and Approval by Purchaser.
(a) From and after the date hereof, Purchaser and its
agents, employees and contractors shall be afforded full access to
the Property during normal business hours and upon forty-eight
(48) hours prior notice for the purpose of making such
investigations as Purchaser deems prudent with respect to the
physical condition of the Property, including, but not limited to,
engineering tests, subject to the rights of tenants in possession.
Seller shall reasonably cooperate to assist Purchaser in
completing such inspection. However, Purchaser agrees not to
contact any of Seller's tenants without Seller's prior consent and
to hold Seller harmless from and against any loss, cost, damage,
claim or expense suffered by Seller or the Property and caused by
Purchaser's said investigations (the foregoing obligation
surviving any termination of this Agreement). In no event shall
Purchaser make any intrusive physical testing (environmental,
structural or otherwise) at the Property (such as soil borings or
the like) without Seller's prior consent. Purchaser shall
promptly restore the Property to its condition immediately prior
to such investigations. In addition, Purchaser agrees not to
unreasonably interfere with the use and enjoyment of the Property
by Seller, its agents, representatives, employees or any tenants
or other occupants. Seller shall have the right, at its option,
to cause a representative of Seller to be present at all
inspections, reviews and examinations conducted hereunder. At the
request of Seller, Purchaser shall promptly deliver to Seller
true, accurate and complete copies of any written reports relating
to the Property prepared for or on behalf of Purchaser by any
third party and, in the event of termination hereunder, shall
return all documents and other materials furnished to or on behalf
of Purchaser by Seller hereunder. Purchaser shall keep all
information or data received or discovered in connection with any
of the inspections, reviews or examinations strictly confidential;
provided; however, that Purchaser shall be entitled to disclose
such information to Purchaser's attorneys, accountants and
prospective debt and equity financing sources who reasonably need
to be informed in connection with Purchaser's determinations
hereunder (and who shall, in turn, be required to keep such
information confidential).
(b) From and after the date hereof until Closing,
Purchaser and its agents shall be afforded full opportunity by
Seller during normal business hours and upon forty-eight (48)
hours prior notice to examine all operating books and records that
relate to the Property, including all specifications and as-built
drawings (to the extent they are in Seller's possession), all
building permits, certificates of occupancy, soil reports,
engineers' reports and studies, and similar information relating
to the Property or its management, operation, maintenance or use,
and all warranties and operating manuals that Seller may have from
vendors, contractors or servicing agents with respect to the
physical condition of the Property or any portion thereof or the
equipment located thereon.
(c) Purchaser shall have until the Approval Date in
which to approve or disapprove the matters referred to in
subparagraphs (a) and (b) above. Furthermore, Purchaser shall
have until the expiration of the Approval Period in which to
approve or disapprove of a market and leasing survey of the
Property and the surrounding leasing market (including its own
economic analysis of the feasibility of the Property for
Purchaser's particular use thereof) to be prepared at Purchaser's
sole cost and expense. Purchaser's disapproval shall be in
writing and shall be delivered to Seller prior to the Approval
Date. Failure to deliver such written disapproval shall be deemed
Purchaser's approval of said matters (and its covenant to deliver
the additional $25,000 deposit required pursuant to paragraph
2(a)(i) hereof). Purchaser understands and agrees that if it
shall disapprove of any matter or thing subject to its approval
pursuant to paragraph 5 and 6 hereof, Seller shall not on account
thereof be obligated to correct the objection or otherwise lower
the Purchase Price or grant any credit with respect thereto.
7. Operation of Property Pending Closing.
(a) Tenant Leases. Seller has leased portions of the
Property to various occupancy tenants. From and after the date of
the complete execution of this Agreement and until the Closing
Date Seller shall not enter into any new leases or amend,
terminate or accept the surrender of any existing tenancies or
approve any subleases without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld).
Concurrently with its execution of this Agreement Seller shall
notify Purchaser of any lease agreements that are outstanding for
signature by prospective tenants, each of which is hereby deemed
approved by Buyer. Any such agreements, if signed, shall be
deemed to be signed prior to execution of this Agreement. In
requesting such consent, Seller shall inform Purchaser in writing
of the amount, if any, proposed to be required to pay for, or any
allowance proposed to be given for, tenant improvement work, any
leasing commissions and fees, in connection with such lease and
any rent concessions. The failure of Purchaser to respond within
five (5) business days after written request for any such approval
shall be deemed to constitute approval. Seller shall not collect
in advance any rent or other sum due under any of the Tenant
Leases, except for collection of current rents no more than one
month in advance.
(b) Leasing Commissions; Tenant Improvements and Rent
Concessions. Purchaser shall be responsible for all leasing
commissions, tenant improvement costs and unamortized rent
concessions due with respect to leases, extensions, and renewals
of leases, and similar events occurring after the date of this
Agreement, provided that (i) Purchaser has approved or is deemed
to have approved such action or event by Seller to the extent
occurring prior to the Closing Date and (ii) Seller has delivered
to Purchaser copies of the agreements with respect to which any
such commissions are payable. Failing such delivery, Seller shall
remain responsible for all of such commissions.
(c) Insurance Policies. Seller shall keep all of the
insurance policies covering the Property (or substantially
equivalent coverage) in full force and effect between the date of
this Agreement and Closing (the "Insurance Policies").
(d) Service Contracts. Seller shall have the right to
renew or replace Service Contracts that expire prior to Closing or
to enter into new Service Contracts for emergency purposes if
deemed reasonably necessary by Seller for any term provided that
such Service Contracts are terminable by Seller or its successors
in interest upon not more than thirty (30) days' notice to the
service provider.
(e) Property Management. Seller shall maintain the
Property in the same manner as prior hereto pursuant to its normal
course of business (such maintenance obligations not including
extraordinary capital expenditures or expenditures not incurred in
such normal course of business), subject to reasonable wear and
tear and further subject to destruction by casualty or other
events beyond the reasonable control of Seller.
8. Conditions Precedent to Purchaser's Obligation to Close
Escrow. The obligation of Purchaser to consummate the transactions
contemplated hereby is subject to the following conditions,
inserted for Purchaser's sole benefit and that may be waived by
Purchaser only in writing at its sole option. Said conditions are
as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Seller contained in
Paragraph 13 of this Agreement shall be true on the date of
Closing in all material respects as though such representations
and warranties were made on and as of such date.
(b) Delivery of Tenant Estoppels. Seller shall have
delivered to Purchaser estoppel letters (the "Tenant Estoppels")
from tenants representing 85% of the leased area and from all
tenants leasing more than 3,500 square feet in the Improvements in
substantially the form of Exhibit "E" attached hereto and forming
a part hereof, consistent in all material respects with the
information to be provided by Seller hereunder and certifying
inter alia to the effect that there are no defaults by landlord
under the lease known to tenant thereunder; that such lease is
unmodified except as may be set forth therein and in full force
and effect; that there are no defenses or offsets against the
landlord known to tenant thereunder; and that rental is current
and has not been paid more than one month in advance.
(c) Compliance with This Agreement. Seller shall have
performed and complied within all material respects all agreements
and conditions required by this Agreement to be performed or
complied with by it on or prior to Closing.
(d) Title Policy. Title Company shall be ready,
willing and able to issue the Title Policy required by Paragraph
4(b).
(e) Change in Condition. Subject to the provisions of
Paragraphs 15(b) and 15(c) hereof, there shall exist no damage,
destruction or condemnation of the Property occurring after the
date hereof and prior to Closing.
9. Conditions Precedent to Seller's Obligation to Close
Escrow. The obligation of Seller to consummate the transactions
contemplated hereby is subject to the following conditions,
inserted for Seller's sole benefit and that may be waived solely
by Seller only in writing at its sole option. Said conditions are
as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Purchaser contained in this
Agreement, or in any certificate or document signed by Purchaser
pursuant to the provisions hereof, shall be true on and as of
Closing in all material respects as though such representations
and warranties were made on and as of such date.
(b) Delivery of Purchase Price or Contribution Value
and Documents. Purchaser shall have delivered all funds and
documents to Escrow Holder required by it hereunder to enable it
to close the Escrow.
(c) Compliance with This Agreement. Purchaser shall
have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by it
on or prior to Closing.
10. Remedy of Purchaser and Seller Upon Default.
(a) IF THE TRANSACTION HEREIN PROVIDED SHALL NOT BE
CLOSED BY REASON OF SELLER'S DEFAULT UNDER THIS AGREEMENT AND
PURCHASER SHALL NOT HAVE DEFAULTED UNDER THIS AGREEMENT, THEN THE
DEPOSIT SHALL BE RETURNED TO PURCHASER. IN ADDITION, THE PARTIES
HERETO, BEFORE ENTERING INTO THIS TRANSACTION, HAVE BEEN CONCERNED
WITH THE FACT THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY
PURCHASER IF SELLER SHOULD WRONGFULLY FAIL TO SELL THE PROPERTY TO
PURCHASER. SELLER HAS STATED THAT IT WILL NOT PERMIT ANY ACTION
FOR SPECIFIC PERFORMANCE OF THIS AGREEMENT. WITH THE FLUCTUATION
IN VALUE OF REAL PROPERTY, THE CURRENT AND HIGHLY UNPREDICTABLE
STATE OF THE ECONOMY, THE FLUCTUATING MONEY MARKET FOR REAL ESTATE
LOANS OF ALL TYPES, AND OTHER FACTORS THAT DIRECTLY AFFECT THE
VALUE AND MARKETABILITY OF THE PROPERTY, IT IS REALIZED BY THE
PARTIES THAT IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE, IF
NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY PRIOR TO
SIGNING THIS AGREEMENT THE AMOUNT OF DAMAGES THAT WOULD BE
SUFFERED BY PURCHASER IN THE EVENT OF SELLER'S WRONGFUL FAILURE TO
SELL THE PROPERTY TO PURCHASER. IN ADDITION, PURCHASER DESIRES TO
PROVIDE A FINANCIAL DISINCENTIVE FOR ANY SUCH FAILURE BY SELLER.
THE PARTIES, HAVING MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES PURCHASER WOULD SUFFER
IN THE EVENT OF SELLER'S WRONGFUL FAILURE TO SELL THE PROPERTY TO
PURCHASER, HEREBY AGREE THAT THE REASONABLE ESTIMATE OF SAID
DAMAGES IS AN AMOUNT EQUAL TO ONE HUNDRED THOUSAND DOLLARS
($100,000); AND IN THE EVENT OF SELLER'S WRONGFUL FAILURE TO SELL
THE PROPERTY TO PURCHASER, PURCHASER SHALL BE ENTITLED TO SUCH
AMOUNT AS FULL LIQUIDATED DAMAGES, AND THAT PAYMENT OR TENDER TO
PURCHASER OF SUCH AMOUNT SHALL TERMINATE ALL OF PURCHASER'S RIGHTS
AND REMEDIES AT LAW OR IN EQUITY AGAINST SELLER WITH RESPECT TO
SUCH FAILURE TO PERFORM. AS USED HEREIN, SELLER'S WRONGFUL
FAILURE TO SELL THE PROPERTY TO PURCHASER SHALL MEAN ITS WILLFUL
AND UNWARRANTED REFUSAL TO DELIVER THE GRANT DEED WITH PURCHASER
HAVING COMPLIED WITH ITS OBLIGATIONS HEREUNDER (EXCEPT FOR ITS
OBLIGATION TO FUND THE BALANCE OF THE PURCHASE PRICE) AND BEING
READY, WILLING AND ABLE TO CLOSE (AND SUCH TERM SHALL NOT APPLY TO
ANY OTHER DEFAULT OR BREACH BY SELLER HEREUNDER).
/s/ JM /s/ VC
Seller's Purchaser's
Initials Initials
(b) Remedy of Seller. THE PARTIES HERETO, BEFORE
ENTERING INTO THIS TRANSACTION, HAVE BEEN CONCERNED WITH THE FACT
THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY SELLER IF PURCHASER
SHOULD WRONGFULLY FAIL TO PURCHASE THE PROPERTY. WITH THE
FLUCTUATION IN VALUE OF REAL PROPERTY, THE CURRENT AND HIGHLY
UNPREDICTABLE STATE OF THE ECONOMY, THE FLUCTUATING MONEY MARKET
FOR REAL ESTATE LOANS OF ALL TYPES, AND OTHER FACTORS THAT
DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY, IT IS
REALIZED BY THE PARTIES THAT IT WOULD BE EXTREMELY DIFFICULT AND
IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF
CERTAINTY PRIOR TO SIGNING THIS AGREEMENT THE AMOUNT OF DAMAGES
THAT WOULD BE SUFFERED BY SELLER IN THE EVENT OF PURCHASER'S
WRONGFUL FAILURE TO PURCHASE THE PROPERTY. THE PARTIES, HAVING
MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL
COMPENSATORY DAMAGES SELLER WOULD SUFFER IN THE EVENT OF PUR-
CHASER'S WRONGFUL FAILURE TO PURCHASE THE PROPERTY, HEREBY AGREE
THAT THE REASONABLE ESTIMATE OF SAID DAMAGES IS AN AMOUNT EQUAL TO
THE DEPOSIT; AND IN THE EVENT OF PURCHASER'S WRONGFUL FAILURE TO
PURCHASE THE PROPERTY, SELLER SHALL BE ENTITLED TO SUCH AMOUNT AS
FULL LIQUIDATED DAMAGES, AND THAT PAYMENT OR TENDER TO SELLER BY
PURCHASER OF SUCH AMOUNT SHALL TERMINATE ALL OF SELLER'S RIGHTS
AND REMEDIES AT LAW OR IN EQUITY AGAINST PURCHASER WITH RESPECT TO
SUCH FAILURE TO PERFORM.
/s/ JM /s/ VC
Seller's Purchaser's
Initials Initials
(c) Notwithstanding anything to the contrary contained
herein, the aggregate liability of Seller arising pursuant to or
in connection with the representations, warranties,
indemnifications, covenants or other obligations (whether express
or implied) of Seller under this Agreement (or any document
executed or delivered in connection herewith) shall not exceed
$400,000.00. Without limitation on the other limitations or
remedies contained herein, in the event of any dispute between the
parties respecting this Agreement or the transactions herein
contemplated, Purchaser hereby waives (i) any right to record or
file a lis pendens or other similar notice of suit, (ii) any right
to seek specific performance of this Agreement, and (iii) any
right to assert any claim affecting the right of possession or
title to the Property. In no event shall this Agreement (or any
short form or memorandum thereof) be recorded against or with
respect to the Property.
11. Closing Procedure.
(a) At least one business day prior to the date of
Closing, Purchaser shall have delivered to Escrow Agent
counterpart executed originals of the following documents and the
following sums of money required to be delivered by Purchaser
hereunder:
(i) The Purchase Price or the Loan Payoff Amount
(depending upon Seller's election for a purchase and sale or a
Contribution) in the manner set forth in Paragraph 2;
(ii) Such funds as may be necessary to comply
with Purchaser's obligations hereunder regarding prorations, costs
and expenses; and
(iii) A signed counterpart of the Assignment of
Leases, a signed counterpart of the Assignment of Service
Contracts and a signed counterpart of the Amendment to Limited
Partnership Agreement executed by all required partners, if Seller
shall have elected to contribute the Property for OP Units in
Purchaser.
(b) At least one business day prior to the date of
Closing, Seller shall have delivered to Escrow Agent counterpart
executed originals of the following documents:
(i) The Grant Deed in the form of Exhibit "F"
attached hereto and forming a part hereof;
(ii) A Xxxx of Sale (the "Xxxx of Sale") in the
form of Exhibit "G" attached hereto covering the Personal
Property;
(iii) An Assignment and Assumption of Leases and
Security Agreements (the "Assignment of Leases") substantially in
the form and substance of Exhibit "H" attached hereto and forming
a part hereof;
(iv) An Assignment and Assumption of Service and
Miscellaneous Rights and Agreements (the "Assignment of Service
Contracts") substantially in the form and substance of Exhibit "I"
attached hereto and forming a part hereof;
(v) An original counterpart of the Amendment to
Limited Partnership Agreement if Seller shall have elected to
contribute the Property to Purchaser.
(vi) An original counterpart of each of the
Service Contracts, Leases and keys to the Property if in Seller's
possession or under its control;
(vii) Notices to each of the tenants and occupants
of the Property of the transfer of the Property to Purchaser;
(viii) To the extent they are in Seller's
possession, a complete set of all plans, specifications and
as-built drawings, and all building permits, certificates of
occupancy, third-party soil reports, and environmental reports and
studies relating to the Improvements;
(ix) All warranties and operating manuals that
Seller may have from vendors, contractors or servicing agents with
respect to the physical condition of the Property or any portion
thereof or the equipment located thereon; and
(x) If the transaction is to be a Contribution,
cash in the sum of the Security Deposits, the net prorations owing
to Purchaser and Seller's share of the costs and expenses of the
transaction (it being understood that Seller may elect to cause
all such amounts to be credited to Purchaser and debited against
the Purchase Price).
(c) Upon delivery of the foregoing sums and documents,
Escrow Agent shall cause Title Company to cause the Grant Deed to
be recorded (by a special recording if necessary) in the Official
Records of Los Angeles County, California, and immediately to
issue the Title Policy.
12. Costs and Prorations.
(a) 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 apportion-
ment 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 Tenant 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;
Purchaser shall include such delinquencies in its normal billing
and shall pursue the collection thereof in good faith after the
Closing Date (but Purchaser shall not be required to litigate or
declare a default in any Tenant Lease). To the extent Purchaser
receives amounts on account of Tenant Leases on or after the
Closing Date, such payments shall be applied first toward then
current rent owed to Purchaser in connection with the applicable
Tenant 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. Purchaser may not waive any delinquent rents
nor modify a Tenant 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. Purchaser shall reasonably cooperate
with Seller in any collection efforts hereunder (but shall not be
require 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
Purchaser 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 Purchaser at any time subsequent to Closing but
with reference to any period prior thereto during Seller's
ownership thereof, Seller shall promptly pay to Purchaser 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 Purchaser 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 Purchaser;
(v) Utility charges levied against Seller or the
Property, and Purchaser 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) Tenant improvements and leasing commissions
in accordance with Paragraphs 7(a) and 7(b).
(viii) All other operating 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.
(b) Expenses of Closing. The expenses of Closing
shall be paid in the following manner:
(i) Seller shall pay:
(1) The cost of the Preliminary Title
Report, that portion of the cost of securing the Title Policy that
is attributable to CLTA Owner's coverage;
(2) Documentary transfer tax imposed on
the conveyance of title to the Property to Purchaser;
(3) One-half of Escrow Agent's Escrow Fee.
(ii) Purchaser shall pay:
(1) The cost of recording the Grant Deed;
(2) That portion of the cost of the Title
Policy that is not paid by Seller, including the cost of any
endorsements, and the cost of any update to any existing ALTA
Survey; and
(3) One half of Escrow Agent's Escrow fee.
All other Closing fees and expenses, including, but not limited
to, the parties' legal expenses, accounting and consulting fees,
and other incidental expenses in connection with this transaction
shall be borne by the party incurring same.
13. Representations, Warranties and Covenants of Seller.
(a) Except as specifically set forth in this Paragraph
13(a), the sale of the Property hereunder is and will be made on
an "as is" basis, without representations and warranties of any
kind or nature, express, implied or otherwise, including but not
limited to, any representation or warranty concerning title to the
Property, the physical condition of the Property (including, but
not limited to, the condition of the soil or the improvements),
the environmental condition in of the Property (including, but not
limited to, the presence or absence of hazardous substances on or
respecting the Property), the compliance of the Property with
applicable laws and regulations (including, but not limited to,
zoning and building codes or the status of development or use
rights respecting the Property), the financial condition of the
Property or any other representation or warranty respecting any
income, expenses, charges, liens or encumbrances, rights or claims
on, affecting or pertaining to the Property or any party thereof.
Purchaser acknowledges that Purchaser has examined, reviewed and
inspected all matters which in Purchaser's judgment bear upon the
Property and its value and suitability for Purchaser's purposes.
Except as to matters specifically set forth in this Paragraph
13(a), Purchaser will acquire the Property solely on the basis of
its own physical and financial examinations, reviews and
inspections and the title insurance protection afforded by the
Title Policy. Subject to the foregoing and except as disclosed by
Seller to Purchaser or otherwise discovered by Purchaser prior to
the Approval Date or as contained in the materials delivered to
Purchaser and identified in Paragraph 5 hereof, Seller hereby
makes the following representations, warranties and covenants,
each of which is deemed to be material and each of which is stated
by Seller to be true and correct on the date hereof and on the
Closing Date (subject to any exceptions disclosed by Seller in
writing) and each of which shall survive the Closing for a period
of one (1) year, except as disclosed in the reports and documents
listed on Exhibit "J" attached hereto:
(i) Seller is the owner of the Personal Property
and has marketable title, free and clear of all liens, claims and
security interests whatsoever, except for matters of record.
(ii) Seller has no knowledge of any:
(1) existing latent defects or seismic
conditions concerning the Real Property or materially incorrect
income or expense figures in any financial statements prepared by
or for Seller and delivered to Purchaser regarding the Property
(with respect to periods of time occurring prior to the date
hereof and, without limitation on the foregoing, Seller does not
make any representation or warranty with respect to any
projections).
(2) any pending litigation or agreement
not of record materially and adversely affecting the Property and
which would be binding upon Purchaser after the Closing;
(3) written notice of violations of City,
County, State, Federal, building, zoning, fire or health codes,
regulations or ordinances, filed or issued against the Property;
(4) Hazardous Substance in existence on or
below the surface of the Real Property or in any building located
upon the Real Property, including, without limitation,
contamination of soil, subsoil or ground water, which constitutes
a violation of any applicable law, rule or regulation of any
government entity having jurisdiction thereof;
(5) thing that would suggest any portion
of the Property has ever been used by Seller or any tenant of any
portion of the Property during Seller's ownership thereof as a
waste storage or disposal site or gasoline station. Without
limiting the other provisions of this Agreement, Seller shall
reasonably cooperate with Purchaser's investigation of matters
relating to the foregoing provisions of this paragraph and to
provide access to and copies of any data and/or documents dealing
with potentially Hazardous Substances used at the Property and any
disposal practices followed in accordance with, and subject to the
provisions of, Paragraph 6 hereof. Seller agrees that Purchaser
may make inquiries of governmental agencies regarding such mat-
ters, without liability for the outcome of such discussions. For
the purposes of this Agreement, "Hazardous Substances" shall mean
(A) substances defined as "hazardous substances" in (i) the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S. C. '' 9601 et seq.), or (ii) the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. '' 6901
et seq.), together with the regulations enacted pursuant to such
acts, and (B) those substances defined as "hazardous wastes" in
' 25117 of the California Health and Safety Code or as "hazardous
substances" in ' 25316 of the California Health and Safety Code
together with the regulations enacted pursuant to such statutes.
(iii) The Tenant Leases and Service Contracts
entered into by Seller and, to Seller's knowledge, the other
Tenant Leases, Service Contracts and any other agreements, matters
and things to be submitted to Purchaser by Seller for approval
pursuant to Paragraph 5 above, or otherwise, shall be true,
correct and complete copies thereof as of the date of submission
thereof, and unless thereafter supplemented by supplements or
additions, approved in writing by Purchaser, on or before Closing.
Notwithstanding anything to the contrary contained herein, Seller
shall have no obligation or liability to Purchaser with respect to
any of the foregoing lease matters which shall be confirmed as
correct in any tenant estoppel certificate delivered to Purchaser
as provided in this Agreement;
(iv) The operating financial information prepared
by Seller and delivered to Purchaser with respect to the Property
which financial information was prepared on a cash basis of
accounting, consisting of Statements of Operations for the
calendar years ended December 31, 1996 and for the current
calendar year are true and correct in all material respects
(provided, however, for the period of time occurring prior to
April 1, 1996, such representation shall be limited to Seller's
knowledge); in this regard Seller agrees to make available to
Purchaser and its accountants, at Purchaser's cost, all accounting
records for the calendar years ended December 31, 1995, December
31, 1996 and for the period from January 1, 1997 through the date
of Closing, including but not limited to all general ledgers, cash
receipts, cancelled checks and any other accounting documents and
information reasonably requested to the extent in Seller's
possession or under its control; and
(v) As used in this Agreement, "to Seller's
knowledge" or other similar knowledge limitations as to Seller
shall mean the actual knowledge of Xxxx Xxxxxxx, as President, and
Xxx Xxxxxxxx, as Asset Manager, both of Summit Commercial
Properties, Inc.
(b) Notwithstanding anything contained in Paragraphs
5(a) or 13(a) to the contrary, Seller is neither responsible nor
liable for any representation or warranty, either expressed or
implied, guaranty, promise or other information pertaining to the
Property or the Improvements made or furnished to Purchaser by any
broker representing or purporting to represent Seller.
14. Representations and Warranties of Purchaser.
Purchaser hereby makes the following representations and
warranties, each of which is deemed to be material and each of
which is stated by Purchaser to be true and correct on the date
hereof:
(a) Purchaser has full legal power and authority to
enter into and perform this Agreement in accordance with its
terms. This Agreement constitutes the valid and binding
obligation of Purchaser, enforceable in accordance with its terms,
except as such enforcement may be affected by bankruptcy,
insolvency and other laws affecting the rights of creditors
generally. The execution, delivery and performance of this
Agreement and all documents in connection therewith are not in
contravention of or in conflict with any agreement or undertaking
to which Purchaser is a party or by which Purchaser may be bound
or affected; and
(b) The execution and delivery of this Agreement and
the payment and performance by Purchaser of its payments and
obligations hereunder require no further action or approval in
order to constitute this Agreement as a binding and enforceable
obligation of Purchaser, and all such actions have been duly taken
by Purchaser.
(c) As of the Approval Date and as of the Closing Date
(i) Purchaser has received and reviewed all materials provided to
Purchaser by Seller pursuant to Sections 4 and 5 above
(collectively, the "Due Diligence Materials"), (ii) Purchaser has
inspected the Property, (iii) Purchaser has made such
investigation of the information contained in the Due Diligence
Materials as it deems appropriate, (iv) Purchaser is satisfied
with all aspects of the Property which Purchaser deems material to
its purchase thereof, including, without limitation, the condition
of title to the Property, the zoning of the Property, the
condition and physical aspects of all structures located on the
Real Property (including the Improvements) and the presence or
absence of Hazardous Substances on the Property, and (v) except as
set forth in subparagraph 13(a) and elsewhere in this Agreement,
Purchaser is not relying on any representation, written
information, data, reports, warranty, or statement of Seller or
its agents concerning the Property or the accuracy or completeness
of the Due Diligence Materials, and Purchaser is purchasing the
Property in "AS-IS" condition based solely upon Purchaser's own
independent inspection, investigation and review, as more
particularly, set forth in Paragraph 13(a) hereof.
15. General Covenants and Agreements of Purchaser and
Seller.
(a) Delivery of Possession. Possession of the Property
shall be delivered to Purchaser upon Closing, subject to the
rights of tenants in possession.
(b) Damage to or Destruction of Property Prior to
Closing; Risk of Loss. If after the date hereof and prior to
Closing the Property shall sustain damage caused by fire or other
casualty that is insured and that would cost One Hundred Fifty
Thousand Dollars ($150,000) or more to repair or if any uninsured
loss or casualty occurs that would cost One Hundred Fifty Thousand
Dollars ($150,000) or more to repair, either Seller or Purchaser
may respectively elect to terminate this Agreement by written
notice to the other within fifteen days after notice of such
event, or at Closing, whichever is earlier. If neither Seller nor
Purchaser so elects to terminate its obligations under this Agree-
ment, or if the loss or casualty would cost less than One Hundred
Fifty Thousand Dollars ($150,000) to repair, the Closing shall
take place as provided herein and Purchaser shall receive an
assignment of Seller's rights to insurance proceeds with respect
to any unrepaired damage (including any rental loss proceeds for
periods after the Closing), loss or casualty in question. Seller
shall retain all interest in and to the insurance proceeds that
may be payable to Seller on account of repaired and completed
damage, but Seller shall have no obligation of repair or
replacement.
(c) Condemnation of Property Prior to Closing. In the
event that the Property or any part thereof becomes the subject of
a condemnation proceeding other than of a minor immaterial nature
prior to Closing, Seller agrees to immediately advise Purchaser
thereof. In the event of such condemnation, Purchaser shall have
the option to (1) take title in accordance with the terms and
conditions of this Agreement and negotiate with the said con-
demning authority for the condemnation award and receive the
benefits thereof without affecting the Purchase Price, or (2)
terminate this Agreement and declare its obligations thereunder
null and void and of no further effect, in which event all sums
theretofore paid to Seller or to Escrow Agent hereunder shall be
returned to Purchaser as set forth herein. Notice of the exercise
of such option hereunder shall be in writing, delivered to Seller
at the address set forth in Paragraph 16(g) of this Agreement (or
such other address as Seller may have theretofore designated in
writing) at least two days prior to Closing.
(d) Brokers' Commissions. Seller warrants that Seller
did not negotiate with respect to the purchase of the Property
through any broker, agent, finder, affiliate or other third party
other than Xxxxxxx & Xxxxxxxxx ("Broker") or incur any liability,
contingent or otherwise, for brokerage or finder's fees or agent's
commissions or other like payments in connection with this
Agreement, or the transactions contemplated hereby. Seller agrees
to pay at Closing to Broker the commission due it in connection
with the within transaction in accordance with the provisions of a
separate written agreement between Broker and Seller and hereby
agrees to indemnify Purchaser against and hold Purchaser harmless
from any and all claims, demands, causes of action or damages
resulting from any breach of this warranty. Purchaser hereby
warrants that Purchaser did not negotiate through any broker,
agent, finder, affiliate or other third party other than Broker or
incur any liability, contingent or otherwise, for any such
brokerage or finder's fees, agent's commissions or other like
payments, in connection with this Agreement, and hereby agrees to
indemnify Seller against and hold Seller harmless from any and all
claims, demands, causes of action or damages resulting from any
breach of his warranty. This provision shall survive Closing.
(e) Further Assurances Prior to Closing. Seller and
Purchaser shall, prior to Closing, execute any and all documents
and perform any and all acts reasonably necessary, incidental or
appropriate to effect the purchase and sale and the transactions
contemplated in this Agreement.
(f) Time of Essence. Time shall be of the essence with
respect to the obligations of the parties hereunder.
(g) Assignability. Purchaser may not assign any of its
rights or duties hereunder without the prior written consent of
Seller (which consent may be given or withheld in Seller's sole
and absolute discretion). Seller may assign its rights hereunder
in accordance with the provisions of Paragraph 16(m) below.
(h) Waivers, Amendments and Modifications of
Provisions. Waivers, amendments or modifications of any term or
condition of this Agreement must be in writing signed by the party
against whom such waiver is sought to be enforced. No waiver by
any party of any breach hereunder shall be deemed a waiver of any
other or subsequent breach.
(i) Indemnification. Seller shall indemnify Purchaser
against and hold Purchaser harmless from any and all loss, cost,
damage, claim, liability or expense, including court costs and
reasonable attorneys' fees, for third party claims arising out of
or in connection with any tort committed by Seller (including any
personal injury or property damage or claim of personal injury or
property damage of any kind whatsoever, including death, to
property or persons, including employees of Seller) unless caused
by Purchaser, resulting from such tort occasioned in or about the
Property prior to Closing. Purchaser shall indemnify Seller
against and hold Seller harmless from any and all loss, damage,
claim of damage, liability or expense, including court costs and
reasonable attorneys' fees, for third party claims arising out of
or in connection with any tort committed by Purchaser (including
any personal injury or property damage or claim of personal injury
or property damage of any kind whatsoever, including death, to
property or persons, including employees of Purchaser) unless
caused by Seller, resulting from such tort occasioned in or about
the Property (a) as a result of its investigation of the Property
during the Approval Period and (b) on or subsequent to Closing.
These covenants shall survive Closing.
16. Miscellaneous Provisions.
(a) Successors and Assigns. Subject to the provisions
hereof, the terms and provisions hereof shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto.
(b) Meaning of Terms. When necessary herein, all terms
used in the singular shall apply to the plural and vice versa; and
all terms used in the masculine shall apply to the neuter and
feminine genders.
(c) Entire Agreement. This Agreement is the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements between the
parties hereto with respect thereto. No claim of waiver,
modification, consent or acquiescence with respect to any of the
provisions of this Agreement shall be made against either party,
except on the basis of a written instrument executed by or on
behalf of such party.
(d) Governing Law. This Agreement is to be governed by
and construed in accordance with the internal laws of the State of
California.
(e) Paragraph Headings. The headings of the several
paragraphs of this Agreement are inserted solely for convenience
of reference and are not a part of and are not intended to govern,
limit or aid in the construction of any term or provision hereof.
(f) Attorneys' Fees. If either Seller or Purchaser
shall obtain legal counsel and bring an action or proceeding
against the other by reason of the breach of any covenant,
provision or condition hereof, or otherwise arising out of this
Agreement, the unsuccessful party shall pay to the prevailing
party reasonable attorneys' fees, which shall be payable whether
or not any proceeding is prosecuted to judgment or award. The
term "prevailing party" shall include a party who brings an action
or proceeding against the other by reason of the other's breach or
default and obtains substantially the relief sought by judgment or
award.
(g) Notices. All notices, requests and other
communications hereunder shall be in writing and shall be
personally delivered or, in the alternative, deposited with (1)
the United States Postal Service, Certified Mail with Return
Receipt Requested, with postage prepaid or (2) Federal Express or
other overnight air freight forwarder for delivery to the
following addresses:
Seller: c/o Summit Commercial
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
With a copy to: Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Real Estate Notices (GML)
Purchaser: Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxxx X. Xxxx
With a copy to: Xxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Escrow Agent: Commerce Escrow
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
All notices, requests and other communications shall be deemed
given upon deposit with the United States Postal Service or
reputable delivery service as provided for herein and shall be
deemed received on the date of acknowledgment or other evidence of
actual receipt.
(h) Severability. If any provision of this Agreement
or the application thereof to any person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provisions to other persons
or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
(i) Further Assurances on or After Closing. Each party
hereto agrees to do all acts and things and to make, execute and
deliver such written instruments as shall be reasonably necessary
to carry out the terms and provisions of this Agreement. This
covenant of further assurances shall survive Closing.
(j) Other Parties. Nothing in this Agreement shall be
construed as giving any person, firm, corporation or other entity,
other than the parties hereto, their successors and permitted
assigns, any right, remedy or claim under or with respect to this
Agreement or any provision hereof.
(k) Confidentiality. Seller and Purchaser agree that
it is in both of their best interests to keep this Agreement and
all information concerning the Property confidential until
Closing. Seller and Purchaser each agrees that neither shall take
any action nor conduct itself in any fashion that would disclose
to third parties unrelated to Purchaser's acquisition or intended
ownership and operation of the Property, any aspect of the
contemplated transaction. After Closing, neither party shall make
any public announcement of the transaction that has not been
approved in advance and in writing by the other party.
(l) Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be
deemed an original; such counterparts shall together constitute
but one agreement.
(m) Seller Exchange Rights. Seller may consummate the
sale of the Property as part of a so-called like kind exchange
("Exchange") pursuant to Section 1031 of the Internal Revenue Code
of 1986, as amended, provided that (i) except as hereinafter set
forth, all costs, fees and expenses attendant to such Exchange
shall be the sole responsibility of Seller, (ii) the Closing shall
not be delayed or affected by reason of such Exchange nor shall
the consummation or accomplishment of the Exchange be a condition
precedent or condition subsequent to Seller's obligations under
this Agreement, (iii) Purchaser shall not be required to acquire
or hold title to any real property other than the Property for
purposes of consummating the Exchange, (iv) in the event of any
such Exchange, and notwithstanding that in connection with such
Exchange record title to the Property may be conveyed by Seller to
an accommodation entity which thereupon conveys title to the
Property to Purchaser pursuant to an amendment and assignment
("Assignment") of this Agreement by Seller to such accommodation
entity (which assignment, and amendment of escrow instructions in
connection therewith, shall be prepared by Seller at Seller's
expense and executed by Purchaser when reasonably requested by
Seller, subject to the reasonable approval of the form thereof by
Purchaser), all covenants and agreements of Seller pursuant to
this Agreement shall be deemed to be made by Seller, shall survive
any conveyance to an accommodation party, shall continue in favor
of and inure to the benefit of Purchaser and shall be enforceable
by Purchaser against Seller, as though the Property had been
conveyed directly by Seller to Purchaser; and (v) the Exchange
shall in no way reduce, abridge or modify any of Seller's
obligations or duties or any of Purchaser's rights or remedies
hereunder. Purchaser will have no liability to Seller in the
event the Exchange is not consummated, or in the event Seller does
not achieve the desired tax treatment. Purchaser shall pay its
own attorneys' fees in connection with the review of any documents
in connection with the Exchange.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first hereinabove written.
Seller: HFA-CLARENDON CREST, L.L.C.,
a Delaware limited liability company
By: Clarendon Crest-HFA, Inc.,
a California corporation
Its Managing Member
By: /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: President
Purchaser: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
The undersigned hereby executes this Agreement to evidence
its agreement to act as Escrow Holder in accordance with the terms
of this Agreement.
AGREED AND ACCEPTED:
Escrow Agent:
COMMERCE ESCROW COMPANY
By /s/ Xxxx Xxxxxx
Name: Xxxx Xxxxxx
Title: President
