AGREEMENT TO ACQUIRE CERTAIN INTERESTS IN REAL PROPERTY
AND ESCROW INSTRUCTIONS
Among
11601 HOLDING CORP.;
FOREST CITY SAN XXXXXXX CORP.;
WILSHIRE SV ASSOCIATES
and
The Constituent Partners of Wilshire SV Associates
Owner
and
ARDEN REALTY LIMITED PARTNERSHIP
Acquirer
and
ARDEN REALTY, INC.
ARI
Covering
World Savings Building
00000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
November 12, 199
AGREEMENT TO ACQUIRE CERTAIN INTERESTS IN REAL PROPERTY
AND ESCROW INSTRUCTIONS
THIS AGREEMENT TO ACQUIRE CERTAIN INTERESTS IN REAL
PROPERTY AND ESCROW INSTRUCTIONS ("Agreement") is made and
entered into this 12th day of November 1997 by and among
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited
partnership ("Acquirer"), ARDEN REALTY, INC., a Maryland
corporation ("ARI"), 11601 HOLDING CORP., a Delaware
corporation ("Apollo"), FOREST CITY SAN XXXXXXX CORP., an
Ohio corporation ("Forest City"), WILSHIRE SV ASSOCIATES, a
California limited partnership and the constituent partners
of WILSHIRE SV ASSOCIATES (collectively, "Wilstein").
Apollo, Forest City and Wilstein are sometimes hereinafter
collectively referred to as "Owner."
A. At the Closing (as hereinafter described) Apollo,
Forest City and Wilstein will be the owner, as tenants in
common, of a leasehold estate covering that certain parcel
of real property (the "Real Property") and the owner of the
improvements thereon which, for informational purposes only,
are a 25-story office building containing approximately
469,115 rentable square feet, other facilities, fixtures,
paving and surfacing thereon or associated therewith, with a
separate eight level automobile parking structure with a
total of approximately 1,000 marked parking spaces (collec
tively, the "Improvements"). The Real Property and Improve
ments are located at 00000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx, and more particularly described in Exhibit "A"
attached hereto and forming a part hereof. The entity and
undivided ownership interest of Apollo, Wilstein and Forest
City, as tenants in common, either directly or through
constituent entities, are, or as of the Closing will be,
Apollo as to 50%, Wilstein as to 25% and Forest City as to
25%. The undivided tenancy in common interests are each
sometimes hereinafter individually referred to as a "TIC
Interest" and all are sometimes hereinafter collectively
referred to as the "TIC Interests". As used herein, the
term "Percentage Interest" as to each of Apollo, Wilstein
and Forest City means such party's percentage interest as
set forth in this paragraph.
X. Xxxxxxxx desires to contribute its TIC Interest to
Acquirer in exchange for cash and limited partnership
interests ("OP Units") in Acquirer, and Apollo desires to
merge its entity into ARDEN REALTY, INC., the general
partner of Acquirer ("ARI") in exchange for ARI common
stock, and Acquirer desires to acquire, all of their
respective TIC Interests in the real and personal property
located at or forming part of the Real Property, the
Improvements, and all appurtenant easements and rights, and
the Personal Property (as hereinafter defined) on the terms,
covenants and conditions hereinafter set forth.
C. Forest City desires to hold its TIC Interest
following the Closing as a tenant in common with Acquirer,
and Acquirer acknowledges that it will be a tenant in common
with Forest City following Acquirer's acquisition of the TIC
Interests of Apollo and Wilstein at the Closing.
D. As of the date hereof, all of the TIC Interests in
the real property are subject to a first trust deed loan
with Swiss Bank Corporation ("Existing Loan"), with the
ability to repay the same in full on or before December 15,
1997, in the discounted amount of $77,000,000 ("Pay-Off
Amount") reduced by $1,000,000 which has already been paid
by Owner leaving a remaining amount to be paid of
$76,000,000 ("Remaining Pay-Off Amount"). After the Closing
(as hereinafter defined), Acquirer shall cause the Existing
Loan to be replaced by a new nonrecourse first trust deed
loan(s) complying in all respects with the requirements of
paragraphs 2.2, 2.3 and 2.4 below ("New Loan").
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
Owner and Acquirer as follows:
1. Acquisition. Subject to all of the terms and
conditions of this Agreement and for the consideration set
forth, on Closing (as hereinafter defined), Apollo, Wilstein
and Forest City individually and collectively agree as
follows:
1.1 Apollo. Apollo shall merge into ARI and ARI
shall issue to the merged entity's shareholders, ARI common
stock and thereby acquire all of Apollo's right, title and
interest in and to the Property (hereinafter described)(the
"Merger") in the manner provided in that certain Merger
Agreement ("Merger Agreement") attached hereto as Exhibit
"N" and made a part hereof.
1.2 Wilstein. Wilstein shall contribute and convey
or cause to be conveyed to Acquirer all of Wilstein's right,
title and interest in the Property in exchange for OP Units
and cash of Acquirer (the "Contribution") in the manner
provided in that certain Contribution Agreement
("Contribution Agreement") attached hereto as Exhibit "K"
and made a part hereof.
1.3 Forest City. Forest City shall enter into a
Tenancy in Common Agreement (the "TIC Agreement") setting
forth the respective rights and obligations of Forest City
and Acquirer as tenants in common with respect to the
Property following the Closing in the form and substance of
Exhibit "M" attached hereto and made a part hereof.
1.4 The Property. The Property shall consist of
all of the interests of Apollo, Wilstein and Forest City and
shall constitute all of the ownership interests in the
following:
(a) That certain leasehold estate ("Leasehold
Estate") in the Real Property more particularly described in
Exhibit "A" which, as a condition to Closing will be subject
only to such easements, agreements and exceptions as may
have been approved or deemed approved by Acquirer in
accordance with Paragraph 4(a) hereof and the tenancies and
occupancies that are set forth on Exhibit "B" or which are
approved hereafter as herein provided;
(b) The interests of the Owner in the Improvements,
together with all easements and appurtenances thereto;
(c) All of the personal property of Owner (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 (the "Inventory");
(d) All leases to tenants leasing space in the
Improvements (the "Tenant Leases");
(e) To the extent assignable, those certain service
and other agreements more particularly described in Exhibit
"C" attached hereto and made a part hereof; and
(f) All other right, title and interest of Owner in
and 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 (f) hereof.
2. Valuation and Payment or Exchange. Owner and
Acquirer have agreed that the value of the Property is the
sum of One Hundred Ten Million Six Hundred Thousand and
No/100 Dollars ($110,600,000) ("Valuation") and Acquirer
will exchange with Apollo and Wilstein for all of their TIC
Interests in the Property (75%) based upon $83,100,000 of
the Valuation, and accept Forest City as a tenant in common
and owner of an undivided twenty-five (25%) interest in the
Property, subject to the terms of the TIC Agreement.
2.1 Deposit.
(a) Upon the opening of Escrow (as hereinafter set
forth) Acquirer shall deliver to Escrow Agent (as
hereinafter defined) cash in the sum of Five Hundred
Thousand and No/100 Dollars ($500,000.00), ("Initial
Deposit") which shall be held by Escrow Agent as security
for the full performance by Acquirer of its obligations
hereunder and on account of its obligations at Closing,
subject to the following terms and conditions:
(i) If Acquirer elects to continue with its
acquisition of the Property pursuant to this Agreement after
the Approval Period or the Extended Approval Period, as the
case may be, (as hereinafter defined), Acquirer shall
increase the Initial Deposit prior to the Approval Date or
the Extended Approval Date, as the case may be, by cash in
the amount of Two Million Dollars ($2,000,000) for a total
of $2,500,000 (which sum, together with any interest earned
thereon and additions thereto, are herein collectively
called the "Deposit") and such Deposit shall become non-
refundable subject to the remaining conditions to Closing;
(ii) If Closing occurs, then the Deposit shall
be refunded;
(iii) If Closing does not occur and Owner
shall be entitled to liquidated damages as provided in
Paragraph 10(b) hereof, Owner shall be entitled to the
Deposit; and
(iv) If the Closing does not occur and Acquirer
shall be entitled to the return of the Deposit as provided
in this Agreement, the same shall be returned to Acquirer.
(b) The Deposit shall be at all times invested by
Escrow Agent in the following investments ("Approved Invest
ments"): (i) United States Treasury obligations, (ii)
United States Treasury-backed repurchase agreements issued
by a major money center banking institution reasonably
acceptable to Owner, (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 Owner and Acquirer. The Deposit shall be
disposed of by Escrow Agent only as provided in this
Agreement.
2.2 Contribution. Wilstein shall contribute its
TIC Interest to Acquirer and become an additional limited
partner in Acquirer at Closing. The TIC Interest of
Wilstein ( the "Contribution Interest") shall be contributed
to the capital of Acquirer subject to Wilstein's Percentage
Interest of the Remaining Pay-Off Amount of the Existing
Loan (it being understood and agreed that Acquirer shall
replace after Closing the Existing Loan with the New Loan in
an amount at least equal to $60,000,000 and containing terms
and provisions no more materially onerous than the Existing
Loan). At Closing, and in consideration for the
Contribution, Wilstein shall receive limited partnership
interests in Acquirer ("OP Units") and cash in an aggregate
amount equal to the "Contribution Value". As used herein,
"Contribution Value" means the amount by which Twenty-Eight
Million Seven Hundred Seventy Thousand and No/100 Dollars
($28,770,000) (the "Wilstein Share") exceeds an amount equal
to (i) an amount equal to Wilstein's Percentage Interest of
the Remaining Pay-Off Amount, plus (or minus) (ii) an amount
equal to Wilstein's Percentage Interest of the net amount of
all costs, expenses, adjustments and prorations to be
credited (or debited) to Acquirer pursuant to this
Agreement. For purposes of determining the number of OP
Units to be issued to Wilstein, each OP Unit shall have a
deemed value equal to the value of one (1) share of ARI
common stock as of the date which is five (5) business days
prior to Closing. The Contribution shall be consummated
pursuant to the terms of that certain Contribution Agreement
in the form of Exhibit "K" attached hereto and made a part
hereof. Notwithstanding anything to the contrary contained
in this paragraph 2.2, if at the Effective Date both the
Contribution Agreement and the Amendment to Limited
Partner's Agreement have not been attached hereto as
Exhibits "K" and "L," respectively, the parties agree that
unless on or before November 17, 1997 the same shall be
initialed by Acquirer and Wilstein and attached hereto, then
either Acquirer or Wilstein shall have the right to
terminate this Agreement. Any such termination shall be
exercised, if at all, by the electing party giving written
notice thereof to all parties hereto, whereupon this
Agreement shall terminate. The OP Units issued to Wilstein
thereby may be redeemed or exchanged only in accordance with
that certain Amendment to Limited Partnership Agreement, in
the form attached hereto as Exhibit "L".
2.3 Merger. Apollo shall merge into ARI and ARI
shall issue to the merged entity's shareholders, ARI common
stock in exchange pursuant to a tax-free reorganization
qualifying under the Internal Revenue Code, as amended. The
value of the Apollo TIC Interest so merged shall be subject
to the Apollo Percentage Interest of the Remaining Pay-Off
Amount (it being understood and agreed that Acquirer shall
replace after Closing the Existing Loan with the New Loan in
an amount at least equal to $60,000,000). At the Closing and
consummation of the merger, the Apollo shareholders shall
receive ARI Common Stock in an amount equal to the "Merged
Value". As used herein, "Merged Value" means the amount by
which Fifty-Four Million Three Hundred Thirty Thousand and
No/100 Dollars ($54,330,000) (the "Apollo Share") exceeds an
amount equal to (i) Apollo's Percentage Interest of the
Remaining Pay-Off Amount, plus (or minus) (ii) an amount
equal to Apollo's Percentage Interest of the net amount of
all costs, expenses, adjustments and prorations to be
credited (or debited) to Acquirer pursuant to this
Agreement. Each share of ARI Common Stock shall have a
value equal to its closing price five (5) business days
prior to the Closing. The Merger shall be consummated
pursuant to the terms of that certain Merger Agreement in
the form of Exhibit "N" attached hereto and made a part
hereof and the Investor Questionnaire in the form of Exhibit
"O" attached hereto and made a part hereof. Notwithstanding
anything to the contrary contained in this paragraph 2.3, if
at the Effective Date the Merger Agreement has not been
attached hereto as Exhibit "N", the parties agree that
unless on or before November 17, 1997 (a) the same shall be
initialled by Acquirer and Apollo and attached hereto or (b)
Apollo shall elect in writing to sell for cash its TIC
Interest in the Property based upon a sale price equal to
the amount by which Fifty-Four Million Three Hundred Thirty
Thousand and No/100 Dollars ($54,330,000) exceeds an amount
equal to (i) Apollo's Percentage Interest of the Remaining
Pay-Off Amount, plus (or minus) (ii) an amount equal to
Apollo's Percentage Interest applied to the net amount of
all costs, expenses, adjustments and proration to be
credited (or debited) to Acquirer pursuant to this
Agreement, then either Acquirer or Apollo shall have the
right to terminate this Agreement. Any such termination
shall be exercised, if at all, by the electing party giving
written notice thereof to all parties hereto, whereupon this
Agreement shall terminate.
2.4 Tenant in Common. Forest City shall hold its
TIC Interest subject to an amount of the New Loan which
shall be nonrecourse and in an amount equal to its share
(for its tax basis purposes) of the Remaining Pay-Off
Amount. Forest City agrees to (a) enter into a nonrecourse
promissory note in that amount and secured by its TIC
Interest, and to execute any collateral agreements or
documents that are reasonably necessary or customarily
appropriate in connection with such portion of the New Loan
in form and substance reasonably acceptable to Forest City
and (b) enter into that certain Tenancy In Common Agreement
in the form of Exhibit "M" attached hereto and made a part
hereof. Notwithstanding anything to the contrary contained
in this paragraph 2.4, (a) if at the Effective Date the
Tenancy In Common Agreement has not been attached hereto as
Exhibit "M", the parties agree that unless on or before
November 17, 1997 the same shall be initialed by Acquirer
and Forest City and attached hereto or (b) if on or before
November 28, 1997 Acquirer has not provided Forest City with
evidence of the commitment of the lender to make the New
Loan, then either Acquirer or Forest City shall have the
right to terminate this Agreement. Any such termination
shall be exercised, if at all, by the electing party giving
written notice thereof to all parties hereto, whereupon this
Agreement shall terminate.
3. Escrow.
(a) Opening of Escrow. As soon as commercially
reasonable after their complete execution of this Agreement
("Effective Date") and in any event not later than three (3)
business days thereafter, Owner and Acquirer shall open an
escrow (the "Escrow") with Chicago Title Insurance Company,
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx,
00000, Attention: Xxxx Xxxxxxxx ("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 Owner, Acq
uirer 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 Owner and Acquirer. Escrow Agent
shall immediately, upon receipt of such duly executed copy
of this Agreement, notify Owner and Acquirer 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 ten (10)
business days following the Approval Date, but subject to
Owner's right to extend as hereinafter provided, in all
events not later than December 2, 1997, provided the Ground
Lessor Consent and Estoppels and the Tenant Estoppels
satisfying the requirements of paragraph 8(b) hereof have
been received and all other Acquirer's Conditions Precedent
to Closing as set forth in Paragraph 8 hereof and the
Conditions Precedent to Owner's Obligation to Close Escrow
(set forth in Paragraph 9 below) have been satisfied.
Notwithstanding the foregoing, any Owner (with the written
consent of each other Owner) shall have the right to extend
the Closing, subject to obtaining an extension of the
Remaining Pay-Off Amount for the same extension period, for
a period not to extend beyond January 7, 1998, by giving
written notice thereof to Acquirer on or before November 28,
1997. The term "Closing" as used herein shall be deemed to
be the date upon which the respective Conditions Precedent
to Acquirer's Obligation to Close Escrow (set forth in
Paragraph 8 below) and the Conditions Precedent to Owner's
Obligation to Close Escrow (set forth in Paragraph 9 below)
have been satisfied, the Assignment of Leasehold and Grant
to the Improvements ("Assignment of Leasehold" herein)
hereinafter referred to is recorded in the office of the
County Recorder of Los Angeles County and the net proceeds
(in cash and OP Units) required to close are held by Escrow
Agent for disbursement to Owner. 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) Owner has caused to be delivered to
Acquirer a CLTA Preliminary Title Report covering the Real
Property and the Improvements, which states that it is
subject to any matter that would be disclosed by a survey
(the "Preliminary Title Report"), issued by Chicago Title
Insurance Company ("Title Company"), together with copies of
all documents evidencing matters of record shown as
exceptions to title thereon. If Acquirer shall desire an
updated ALTA Survey of the Real Property and Improvements
("Survey"), Acquirer shall cause the same to be so made at
Acquirer's sole cost and expense before the Approval Date
(and upon receipt shall deliver a copy of the Survey to
Owner). Acquirer shall have the right to object to any
exceptions contained in the Preliminary Title Report or the
Survey by giving notice to Owner before the Approval Date.
Notwithstanding any of the foregoing, Owner shall at Closing
(but shall not be obligated prior thereto) remove of record
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 Acquirer
gives written notice that it disapproves any such additional
exceptions to title matters, stating the exceptions so
disapproved, before the Approval Date, Acquirer shall be
deemed to have approved said exceptions. Acquirer's
approval of the Preliminary Title Report shall be without
prejudice to Acquirer's right to disapprove additional
survey matters or any supplementary reports issued by Title
Company or disclosed after the Approval Date; provided,
however, Acquirer's approval shall not be unreasonably
withheld, and, as to survey matters, shall only be
applicable if Acquirer shall have obtained the updated
Survey before the Approval Date. If for any reason, on or
before the Closing Date Owner does not cause such exceptions
to title or survey matters which Acquirer timely disapproves
(to the extent Acquirer is permitted hereunder to so
disapprove) to be removed at no cost or expense to Acquirer
(Owner having the right but not the obligation to do so),
the obligation of Apollo and Wilstein to transfer (and
Forest City to enter into the TIC Agreement) and Acquirer to
acquire the Property as herein provided shall terminate (and
Owner and Acquirer shall have no further obligations in
connection herewith). Acquirer shall have the option to
waive the condition precedent set forth in this paragraph
4(a) by notice to Owner. In the event of such waiver, such
condition shall be deemed satisfied. All matters set forth
on the Preliminary Title Report, the updated Survey obtained
by Acquirer which are not timely objected to by Acquirer
shall be permitted exceptions to title and shall
additionally include (i) any title or survey matters
objected to by Acquirer, which objections are subsequently
waived in writing by Acquirer, and (ii) any title or survey
matters objected to by Acquirer in accordance with the terms
and provisions of this Agreement, which objections are cured
to Acquirer'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 Owner is obligated to pay and dis
charge, Escrow Agent may use any portion of the net proceeds
of the Escrow to satisfy the same (if the same are not
bonded-over or otherwise satisfied by title endorsement),
provided Owner shall simultaneously either deliver to Escrow
Agent at Closing title instruments in recordable form
sufficient to satisfy such liens and encumbrances of record,
together with the cost of recording or filing said
instruments or appropriate pay off letters or instructions.
(b) Title Policy. The Title Policy shall be
Chicago Title Company's ALTA Owner's policy with liability
in the amount of $83,100,000, showing the Apollo and
Wilstein TIC Interests (i) in the Leasehold Estate in Real
Property and (ii) in the fee title to the Improvements in
each instance, as vested in Acquirer, subject only to the
permitted exceptions specified in Paragraph 4(a) above.
5. Delivery of Information.
(a) Owner has previously delivered or has caused to
be delivered to Acquirer or made available to Acquirer at
the Property to the extent they are in Owner's possession or
under its control, and Acquirer has reviewed and approved
(except the environmental materials) the following:
(i) Complete copies of all of the leases
constituting the Leasehold Estate and all amendments
thereto;
(ii) 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;
(iii) 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 Owner at any
time after January 1, 1995 to the extent available to Owner;
(iv) A set of any "as built" plans, specifica
tions and structural drawings with respect to the Building
shell and any third-party soil, geological, seismic,
environmental and hazardous materials and asbestos studies
or reports, relating to the Improvements or the subsurface
conditions, grading plans, water table or other matters
bearing upon condition of the Property;
(v) A copy of all documents and instruments
evidencing, securing and pertaining to the existing first
trust deed loan covering the Property;
(vi) All electricity and property tax bills for
the period beginning January 1, 1995 to the extent available
to Owner;
(vii) Statements of income and expense for
the Property for all calendar years beginning 1995 and for
the current year to date to the extent available to Owner;
(viii) All warranties and operating manuals
that Owner may have from vendors, contractors or servicing
agents with respect to the physical condition of the
Improvements, the Property or any portion thereof or the
equipment located therein;
(ix) Complete copies of all service and other
contracts pertaining to the Property (including, but not
limited to, HVAC, elevator, landscape, management, leasing
brokerage and parking) in respect to which Owner is
obligated and which are intended to survive Closing
hereunder (the "Service Contracts"); and
(x) A list of all personal property (including
supplies) owned or leased by Owner and used in connection
with the operation, maintenance and repair of the Property.
(b) As of the Effective Date, Acquirer has approved
all of the matters and things set forth in paragraph 5(a)
except the environmental studies and its own environmental
investigations. Acquirer shall have until 5:00 P.M. Los
Angeles time on November 14, 1997 (the "Approval Date") in
which to approve or disapprove all of the other matters and
things that are subject to Acquirer's rights of review,
inspection and approval hereunder; provided, however, if on
the Approval Date Acquirer has not received (at least three
(3) days prior thereto) its written environmental report
concerning the Property, Acquirer shall have the right, by
written notice to Owner prior to the Approval Date, to
extend the Approval Date ("Extended Approval Date") only as
to the environmental matters (the reports of which it has
not timely received) to the date which is three (3) business
days after the receipt of the same but not later than
November 28, 1997. Acquirer's failure either to approve or
disapprove the Property before the expiration of the
Approval Date, as the same may be extended as to the
environmental matters shall be deemed its approval thereof.
If Acquirer disapproves any of said information, Acquirer
shall notify Owner in writing thereof within the time period
specified above whereupon, this Agreement shall terminate.
(c) At Acquirer's request at any time from and
after the date hereof until the date that is one (1) year
after the Closing Date, Owner shall, at Acquirer's expense,
provide to Acquirer's designated independent auditor, Ernst
& Young, reasonable access to the books and records of the
Property, regarding the period for which Acquirer is
required to have audited financial statements prepared with
respect to the Property as may be required by the Securities
and Exchange Commission, but only to the extent that such
books, records and related information are in Owner's
possession or control and relate to the period during which
Owner held title to the Property.
(d) Acquirer has delivered to Wilstein copies of
all recent audited and unaudited financial statements of and
filings with the S.E.C. by Acquirer and ARI for its review.
6. Inspections and Approval by Acquirer.
(a) Acquirer has approved the matters referred to
in subparagraphs (b) and (c) below, subject to such
additional testing as may be necessary to complete its
environmental investigation of the Property.
(b) Notwithstanding subparagraph (a) to the con
trary, from and after the date hereof, Acquirer and its
agents, employees and contractors shall be afforded
reasonable access to the Property during normal business
hours and upon twenty-four (24) hours prior notice, subject
to the rights of tenants in possession. Owner shall
reasonably cooperate to assist Acquirer. However, Acquirer
agrees not to contact any of Owner's tenants without Owner's
prior consent and to hold Owner harmless from and against
any loss, cost, damage, claim or expense suffered by Owner
or the Property and caused by Acquirer's investigations (the
foregoing obligation surviving any termination of this
Agreement). In no event shall Acquirer make any intrusive
physical testing (environmental, structural or otherwise) at
the Property (such as soil borings or the like) without
Owner's prior consent. Acquirer shall promptly restore the
Property to its condition immediately prior to such
investigations. In addition, Acquirer agrees not to
unreasonably interfere with the use and enjoyment of the
Property by Owner, its agents, representatives, employees or
any tenants or other occupants. Owner shall have the right,
at its option, to cause a representative of Owner to be
present at all inspections, reviews and examinations
conducted hereunder. At the request of Owner, Acquirer
shall promptly deliver to Owner true, accurate and complete
copies of any written reports relating to the Property
prepared for or on behalf of Acquirer by any third party
and, in the event of termination hereunder, shall return all
documents and other materials furnished to or on behalf of
Acquirer by Owner hereunder. Acquirer shall keep all
information or data received or discovered in connection
with any of the inspections, reviews or examinations
strictly confidential; provided, however, that Acquirer
shall be entitled to disclose such information to Acquirer's
attorneys, consultants, accountants and prospective debt and
equity financing sources who reasonably need to be informed
in connection with Acquirer's determinations hereunder (who
shall, in turn, be required to keep such information
confidential). Acquirer acknowledges that any and all such
information shall be utilized solely for the purpose of
assisting Acquirer in its determination of whether or not to
purchase the Property hereunder (and for no other purpose).
The parties acknowledge that the amount of damages that
Owner would suffer by reason of a breach of the
confidentiality provisions hereunder or under Paragraph
16(k) hereof would be extremely difficult, if not
impossible, to determine and that, in addition to any and
all other rights or remedies which may be available to
Owner, Owner may pursue an action for injunctive relief in
connection therewith.
(c) From and after the date hereof until Closing,
Acquirer and its agents shall be afforded reasonable
opportunity by Owner during normal business hours and upon
twenty-four (24) hours prior notice to examine all operating
books and records that directly relate to the Property
(including all specifications and as-built drawings to the
extent they are in Owner's possession), all building
permits, certificates of occupancy, third party soil and
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 Owner 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.
7. Operation of Property Pending Closing.
(a) Tenant Leases. Owner has leased portions of
the Property to various occupancy tenants. From and after
the date of execution of this Agreement and until the
Closing Date Owner shall not enter into any new leases or
amend or extend, terminate or accept the surrender of any
existing tenancies or approve any subleases without the
prior written consent of Acquirer (which consent shall not
be unreasonably delayed or withheld). In requesting such
consent, Owner shall inform Acquirer 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. Also included in the
request for consent, shall be Owner's proposed draft of the
lease or amendment agreement. The failure of Acquirer to
respond within five (5) business days after written request
for any such approval shall be deemed to constitute
approval. Owner 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. Owner covenants and agrees to be respon
sible for all leasing commissions, tenant improvement costs
and legal fees with respect to any leases (including amend
ments and renewals) entered into on or before the Effective
Date. Owner represents that as of the Effective Date there
are no pending lease transactions to which Acquirer will be
subject which Acquirer has not approved in writing.
Acquirer covenants and agrees to be responsible for all
leasing commissions, tenant improvement costs, legal fees
and unamortized rent concessions with respect to any new
leases, extensions of or options under existing leases and
renewals occurring after the Effective Date, provided that
(i) with respect to matters occurring prior to Closing,
Acquirer has approved or is deemed to have approved such
action or event by Owner, to the extent Acquirer is entitled
to approve hereunder and (ii) Owner has delivered to
Acquirer copies of the proposed lease and other agreements
with respect thereto and to which any brokerage commissions
are payable. Failing such delivery, if applicable, and
approval (or deemed approval), Owner shall remain
responsible for all of costs and expenses including
commissions.
(c) Insurance Policies. Owner 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. Owner 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 Owner for any
term provided that such Service Contracts are terminable by
Owner or its successors in interest upon not more than
thirty (30) days' notice to the service provider.
(e) Property Management. Owner 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
Owner.
8. Conditions Precedent to Acquirer's Obligation to
Close Escrow. The obligation of Acquirer to consummate the
transactions contemplated hereby is subject to the following
conditions, inserted for Acquirer's sole benefit and that
may be waived by Acquirer only in writing at its sole
option. Said conditions are as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Owner contained in
Paragraph 13 of this Agreement shall be true on the date of
Closing in all material respects as though such representa
tions and warranties were made on and as of such date.
(b) Delivery of Estoppels. Owner shall have deliv
ered to Acquirer (i) 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 "D-1"
attached hereto and forming a part hereof or substantially
in the form prescribed in the applicable lease (it being
understood and acknowledged by Acquirer that paragraph 6 and
paragraph 10 (as it relates to requiring the tenant to give
notice to Acquirer's lenders) in Exhibit "D-1" is optional
and not a requirement in any tenant's lease), consistent in
all material respects with the information to be provided by
Owner 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 and (ii) estoppel
letters ("Ground Lease Estoppels") from each of the lessors
(fee owners) under the Leasehold Estate consenting to the
proposed transaction contemplated by this Agreement, if
required, and otherwise substantially in the form of
Exhibits "D-2A" and "D-2B", respectively, attached hereto
and forming a part hereof, conforming in all material
respects with the information produced by Owner herewith.
Owner can satisfy the Tenant Estoppel condition of this
paragraph and Acquirer will accept Tenant Estoppel
Certificates executed by Owner if executed and delivered, in
substantially the form attached as Exhibit "D-1" and
conforming to the rent roll provided by Owner, as to each
tenant required to meet either the 85% or 3,500 square feet
threshold. If Owner notifies Acquirer that it is unable to
secure an estoppel with respect to the Gorfain Lease,
Acquirer shall have two (2) business day thereafter to
either (i) waive the condition or (ii) terminate this
Agreement for failure of such condition.
(c) Compliance with This Agreement. Owner shall
have performed and complied with in 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 Para
graph 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 prior to
Closing.
9. Conditions Precedent to Owner's Obligation to Close
Escrow. The obligation of Owner to consummate the
transactions contemplated hereby is subject to the following
conditions, inserted for Owner's sole benefit and that may
be waived solely by Owner only in writing at its sole
option. Said conditions are as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Acquirer contained in
this Agreement, or in any certificate or document signed by
Acquirer 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 Net Proceeds and Documents. Acq
uirer 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. Acquirer shall
have performed and complied with all agreements and con
ditions required by this Agreement to be performed or
complied with by it on or prior to Closing.
(d) Consent of World Savings. World Savings, the
lessor under the ground lease, shall have given its consent
in writing to the proposed conveyance of the leasehold
estate to Acquirer in accordance with the terms of this
Agreement.
10. Remedy of Acquirer and Owner Upon Default.
(a) Remedies of Acquirer. In the event that Owner
fails to keep and perform each and every obligation,
covenant and agreement herein by Owner to be kept or per
formed, then Acquirer may pursue an action against Owner and
the Property for specific performance and/or damages but
agrees that it shall have no right to seek or obtain
consequential or punitive damages resulting from a breach of
Apollo's and/or Wilstein's agreements to convey their TIC
Interests in the Property or Forest City's breach of its
agreement to enter in the TIC Agreement. Notwithstanding
the foregoing, Acquirer's right to file an action for
specific performance against Owner, or any of the them, (i)
shall be limited to the period of thirty (30) days following
notice by Acquirer to Owner setting forth the obligation,
covenant or agreement which Owner has failed to keep or
perform and (ii) shall require evidence of Acquirer's
ability to perform all of the obligations of Acquirer then
capable of being performed at the point in time of Owner's
breach or default.
(b) Remedy of Owner. THE PARTIES HERETO, BEFORE
ENTERING INTO THIS TRANSACTION, HAVE BEEN CONCERNED WITH THE
FACT THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY OWNER IF
ACQUIRER 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 MARKET
ABILITY OF THE PROPERTY, IT IS REALIZED BY THE PARTIES THAT
IT WOULD BE EXTREMELY DIFFICULT AND IMPRACTICABLE, IF NOT IM
POSSIBLE, TO ASCERTAIN WITH ANY DEGREE OF CERTAINTY PRIOR TO
SIGNING THIS AGREEMENT THE AMOUNT OF DAMAGES THAT WOULD BE
SUFFERED BY OWNER IN THE EVENT OF ACQUIRER'S WRONGFUL FAIL
URE TO PURCHASE THE PROPERTY. THE PARTIES, HAVING MADE DILI
GENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL COM
PENSATORY DAMAGES OWNER WOULD SUFFER IN THE EVENT OF
ACQUIRER'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 ACQUIRER'S
WRONGFUL FAILURE TO PURCHASE THE PROPERTY, OWNER SHALL BE
ENTITLED TO SUCH AMOUNT AS FULL LIQUIDATED DAMAGES, AND THAT
PAYMENT OR TENDER TO OWNER BY ACQUIRER OF SUCH AMOUNT SHALL
TERMINATE ALL OF OWNER'S RIGHTS AND REMEDIES AT LAW OR IN
EQUITY AGAINST ACQUIRER WITH RESPECT TO SUCH FAILURE TO
PERFORM. NOTWITHSTANDING THE FOREGOING, NOTHING CONTAINED
HEREIN SHALL LIMIT OWNER'S RIGHTS OR REMEDIES IN THE EVENT
OF A BREACH BY ACQUIRER OF THE CONFIDENTIALITY PROVISIONS
SET FORTH IN PARAGRAPHS 6(a) and 16(k) HEREOF.
/s/ DW /s/ RLJ /s/ AC /s/ DLR /s/ VJC
Wilsteins's Apollo's Forest City's Acquirer's
Initials Initials Initials Initials
(c) Notwithstanding anything to the contrary
contained herein, the (i) liability of Apollo, Wilstein and
Forest City under this Agreement shall be several both as to
amounts and remedies, (ii) the aggregate liability of Owner
arising pursuant to or in connection with the
representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Owner
under this Agreement or any document executed or delivered
in connection herewith (except the Merger Agreement) or
otherwise related to or connected with the Property shall
not exceed $2,000,000 (i.e., the maximum exposure of Apollo
will be $1,000,000 and the maximum exposure of each of
Forest City and Wilstein will be $500,000); provided,
however, no such limitation shall exist with respect to
Apollo only for the matters covered by the Merger Agreement.
11. Closing Procedure.
(a) At least one business day prior to the date of
Closing, Acquirer shall have delivered to Escrow Agent
counterpart executed originals, and acknowledged as
required, of the following documents and the following sums
of money required to be delivered by Acquirer hereunder:
(i) The cash amounts necessary to fulfill its
requirements set forth in Paragraph 2;
(ii) Such funds as may be necessary to comply
with Acquirer's obligations hereunder regarding prorations,
costs and expenses;
(iii) A signed counterpart of the Assignment
of Leasehold and Grant to the Improvements and notarized for
recordation ("Assignment of Leasehold") in the form of
Exhibit "E" attached hereto and forming a part hereof;
(iv) A Preliminary Change of Ownership Report
for delivery with the Assignment of Leasehold;
(v) A signed counterpart of the Assignment of
Leases and Security Deposits (the "Assignment of Leases")
substantially in the form and substance of Exhibit "G"
attached hereto and forming a part hereof and a signed
counterpart of the Assignment of Service and Miscellaneous
Rights and Agreements (the "Assignment of Service
Contracts") substantially in the form and substance of
Exhibit "H" attached hereto and forming a part hereof;
(vi) A signed counterpart of the Contribution
Agreement executed by Wilstein in the form of Exhibit "K"
attached hereto and made a part hereof;
(vii) A signed counterpart of the Amendment
to Agreement of Limited Partnership executed by all of the
required existing partners, in the form of Exhibit "L"
hereto and forming a part hereof;
(viii) A signed counterpart of the Merger
Agreement executed by Apollo in the form of Exhibit "N"
attached hereto and made a part hereof: and
(ix) A signed counterpart and notarized for
recordation of the TIC Agreement with Forest City in the
form of Exhibit "M" hereto and forming a part hereof and/or
other collateral agreements and documents relating to
Acquirer's tenancy in common with Forest City as are deemed
acceptable to Acquirer.
(x) Signed copies of the New Loan documents,
save and except for the ones being executed by Forest City,
as may be necessary to consummate the New Loan; and
(xi) Execute such other documents, instruments
and certificates as may be reasonably necessary to carry out
the intent and purpose of this Agreement.
(b) At least one business day prior to the date of
Closing, Wilstein, Forest City and Apollo, to the extent
applicable, shall have delivered to Escrow Agent counterpart
executed originals, and acknowledged as required, of the
following documents:
(i) The Assignment of Leasehold together with
a separate Declaration Regarding Documentary Transfer Taxes;
(ii) A Xxxx of Sale (the "Xxxx of Sale") in the
form of Exhibit "F" attached hereto covering the Personal
Property;
(iii) An Assignment of Leases;
(iv) An Assignment of Service Contracts;
(v) An original counterpart of each of the
Service Contracts, Leases and keys to the Property if in
Owner's possession or under its control;
(vi) An affidavit or declaration certifying
that Wilstein and Apollo is not a foreign person under IRC
? 1445 and the equivalent form 590 RE with respect to the
State of California;
(vii) Notices to each of the tenants of the
Property of the transfer of the TIC Interests in the
Property to Acquirer;
(viii) To the extent they are in Owner'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
Owner 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;
(x) A signed counterpart of the Contribution
Agreement executed by Wilstein and each of the constituent
partners of Wilstein in the form of Exhibit "K" attached
hereto and made a part hereof;
(xi) A signed counterpart of the Amendment to
Agreement of Limited Partnership executed by each of the
constituent partners of Wilstein receiving OP Units, in the
form of Exhibit "L" hereto and forming a part hereof;
(xii) A signed counterpart of the Merger
Agreement executed by Apollo in the form of Exhibit "N"
attached hereto and made a part hereof;
(xiii) A signed counterpart by Forest City and
notarized for recordation of the TIC Agreement and/or any
other collateral documents and instruments relating to the
tenancy in common as may be agreed to between Acquirer and
Forest City;
(xiv) A signed copy of the Investor Question
naire in the form of Exhibit "O" attached hereto from each
of the Apollo Shareholders and the holders of the Wilstein
OP Units;
(xv) Signed copies by Forest City and Wilstein
of the appropriate New Loan documents as may be reasonably
necessary to consummate the New Loan; and
(xvi) Execute such other documents,
instruments and certificates as may be reasonably necessary
to carry out the intent and purpose of this Agreement.
(c) Upon delivery of the foregoing sums and
documents, Escrow Agent shall cause Title Company to cause
the Assignment of Leasehold and the Tenancy in Common
Agreement 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
prorated between Owner (including the TIC Interest of Forest
City) on the one hand and Acquirer and Forest City, on the
other hand, 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 and if any item of proration or adjustment
is incapable of complete proration or adjustment at the
Closing, the parties agree to make such proration or
adjustment as soon thereafter as reasonably possible based
upon complete information. 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. Acquirer shall receive no credit for unamortized
rent concessions with respect to tenant leases in effect on
the Effective Date. If at Closing there are any past due
rents or charges owed by occupancy tenants, they shall not
be prorated until received; Acquirer shall include such
delinquencies in its normal billing and shall pursue the
collection thereof in good faith after the Closing Date (but
Acquirer shall not be required to litigate or declare a
default in any Tenant Lease). To the extent Acquirer
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 Acquirer 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 Owner's
share thereof being promptly delivered to Owner. Acquirer
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 Owner is entitled to receive its
share of charges or amounts without first obtaining Owner's
written consent. Owner hereby reserves the right to pursue
any remedy against any tenant owing delinquent rents and any
other amounts to Owner. Acquirer shall reasonably cooperate
with Owner 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, Owner shall retain all rights relating thereto;
(ii) Rent for the current payment period under
the Ground Lease. Any remaining credit due Owner on
Additional Rent pursuant to the Settlement Agreement dated
December 12, 1995 between Owner and World Savings shall be
credited to Owner at Closing;
(iii) Real estate and personal property taxes
and any special assessments, based upon the latest previous
tax levies. Such items shall be reapportioned between Owner
and Acquirer if current tax rates differ from the latest
previous tax rates as soon as the same are known. Owner
agrees that to the extent any additional taxes, assessments
or levies are imposed, assessed or levied against the
Property, or any portion thereof, the Owner or the Acquirer
at any time subsequent to Closing but with reference to any
period prior thereto during Owner's ownership thereof, Owner
shall promptly pay to Acquirer an amount equal to such
additional assessments or levies. Similarly, if tax refunds
become payable for periods during Owner'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 Owner) shall be
promptly paid over to Owner. In the event that any
assessments on the Property are payable in installments,
then the installment for the current period shall be
prorated (with Acquirer assuming the obligation to pay any
installment due after the Closing Date). In no event shall
Owner 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;
(iv) Transferable annual permits, licenses,
and/or inspection fees, if any, on the basis of the duration
of the same;
(v) Security Deposits, plus accrued interest,
if any, payable thereon to tenants, and any other deposits
and prepaid rent, shall be credited (or assigned) to
Acquirer;
(vi) Utility charges levied against Owner or
the Property, and Acquirer shall transfer all such utility
services to its name and account immediately upon Closing;
(vii) Service Contracts on the basis of the
charge or premium for the period involved;
(viii) Tenant improvements costs, leasing
commissions and legal fees for leases signed after the
Effective Date shall be paid by Acquirer, to the extent
approved by Acquirer in accordance with Paragraphs 7(a) and
7(b) together with any amounts payable thereunder; and
(ix) 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) Wilstein and Apollo shall pay:
(1) The cost of securing the CLTA
standard coverage portion of the Title Policy that is
attributable to the required ALTA Owner's coverage;
(2) Documentary transfer tax (County
and City) imposed on the conveyance of title to the Property
to Acquirer it being agreed that Acquirer will acquire the
Wilstein and Apollo TIC Interests subject to the Existing
Loan; and
(3) One-half of Escrow Agent's
Escrow Fee.
(ii) Acquirer shall pay:
(1) The cost of the Preliminary
Title Report and the cost of any Escrow or Title
cancellation charges in the event that the transaction fails
to close through no fault of the Owner and, if Closing does
occur, that portion of the cost of the Title Policy that is
not to be paid by Wilstein and Apollo pursuant to Subsection
(b)(i)(1) above including the cost of any endorsements and
the cost of updating the ALTA Survey;
(2) The cost of recording the
Assignment of Leasehold, and the Tenancy in Common
Agreement;
(3) All expenses relating to Acquire
r's financing of its acquisition of the Property and its due
diligence reviews hereunder; and
(4) 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 con
sulting fees, and other incidental expenses in connection
with this transaction shall be borne by the party incurring
same.
13. Representations, Warranties and Covenants of Owner.
(a) Except as specifically set forth in this
Paragraph 13(a), the acquisition 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 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. Acquirer acknowledges that Acquirer has examined,
reviewed and inspected all matters which in Acquirer's
judgment bear upon the Property and its value and
suitability for Acquirer's purposes. Except as to matters
specifically set forth in this Paragraph 13(a), Acquirer
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
Owner to Acquirer or otherwise discovered by Acquirer prior
to the expiration of the Approval Period as contained in the
materials delivered to Acquirer and identified in Paragraph
5 hereof, Owner hereby makes the following representations,
warranties and covenants. Except as disclosed in Exhibit
"J" attached hereto:
(i) Owner has no knowledge of any:
(1) existing latent defects or
seismic conditions concerning the Real Property or the
Improvements or materially incorrect income or expense
figures in any financial statements prepared by or for Owner
and delivered to Acquirer regarding the Property (with
respect to periods of time occurring prior to the date
hereof and, without limitation on the foregoing, Owner does
not make any representation or warranty with respect to any
projections);
(2) any pending claim, litigation or
administrative action, arbitration, proceeding pending
before any court, agency or official, nor any such claim or
action threatened in writing, relating to the Owner or the
Property;
(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 except for office and medical supplies in customary
quantities; and
(5) matter that would suggest any
portion of the Property having ever been used by Owner or
any tenant of any portion of the Property during Owner's
ownership thereof as a waste storage or disposal site or
gasoline station. Without limiting the other provisions of
this Agreement, Owner shall reasonably cooperate with
Acquirer's investigation of matters relating to the
foregoing provisions of this paragraph and to provide access
to and copies of any third party 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.
Owner agrees that Acquirer may make inquiries of
governmental agencies regarding such matters, without liabil
ity for the outcome of such discussions. For the purposes
of this Agreement, "Hazardous Substances" shall mean (A) sub
stances defined as "hazardous substances" in (i) the Compre
hensive 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.
(ii) The ground lease with World Savings
described in Exhibit "A" hereto constituting the Leasehold
Estate, the Tenant Leases and Service Contracts and any
other agreements, matters and things to be submitted to
Acquirer by Owner 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 as
thereafter supplemented by supplements or additions,
approved in writing by Acquirer, on or before Closing.
Notwithstanding anything to the contrary contained herein,
Owner shall have no obligation or liability to Acquirer with
respect to any of the foregoing ground or tenant lease
matters which shall be confirmed as correct in any estoppel
certificate delivered to Acquirer as provided in this
Agreement;
(iii) To Owner's knowledge, the operating
financial information prepared by Owner and delivered to
Acquirer with respect to the Property, consisting of
Statements of Operations for all calendar years beginning on
and after January 1, 1995 and for the current calendar year
are true and correct in all material respects; in this
regard Owner agrees to make available to Acquirer and its
accountants, at Acquirer's cost, all accounting records for
the calendar year ended 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 directly relating to the operations of the
Property reasonably requested to the extent in Owner's
possession; and
(iv) As used in this Agreement, "to Owner's
knowledge" or other similar knowledge limitations as to
Owner shall mean the actual knowledge, without any duty to
investigate, of Xxxx Xxxxxxxxxx, Xxxxx Xxxxxxxx and Xxxxxx
X. Xxxxx.
(b) Notwithstanding anything contained in Para
graphs 5(a) or 13(a) to the contrary, Owner 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 Acquirer by any broker representing or
purporting to represent Owner.
(c) None of Apollo, Wilstein or Forest City has any
employees which are also employed by 11601 Wilshire
Associates, a California general partnership and whose job
description require work at or solely with respect to the
Property. Furthermore, nothing in this Agreement or any
document delivered pursuant hereto, express or implied,
shall obligate Acquirer to employ any person now employed at
the Property.
14. Representations and Warranties of Acquirer. Acq
uirer hereby makes the following representations and
warranties, each of which is deemed to be material and each
of which is stated by Acquirer to be true and correct on the
date hereof:
(a) Acquirer 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 Acquirer, enforceable in accordance with its
terms, except as such enforcement may be affected by bank
ruptcy, 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 Acquirer
is a party or by which Acquirer may be bound or affected.
(b) The execution and delivery of this Agreement
and the payment and performance by Acquirer 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 Acquirer, and all such actions
have been duly taken by Acquirer.
(c) As of the expiration of the Approval Period and
as of the Closing Date (i) Acquirer has received and
reviewed all materials provided to Acquirer by Owner
pursuant to Paragraphs 4 and 5 above (collectively, the "Due
Diligence Materials"), (ii) Acquirer has inspected the
Property, (iii) Acquirer has made such investigation of the
information contained in the Due Diligence Materials as it
deems appropriate, and (iv) Acquirer is satisfied based upon
its examination of the Due Diligence Materials and its
investigation of all other aspects of the Property which
Acquirer 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. Except as set forth
in subparagraph 13(a) and elsewhere in this Agreement,
Acquirer is not relying on any representation, written
information, data, reports, warranty, or statement of Owner
or their agents concerning the Property or the accuracy or
completeness of the Due Diligence Materials, and Acquirer is
acquiring the Property in "AS-IS" condition based solely
upon Acquirer's own independent inspection, investigation
and review, as more particularly set forth in Paragraph
13(a) hereof. Furthermore, Acquirer acknowledges and agrees
that Owner has no obligation from and after the date hereof
to continue or complete the installation of any corridor
upgrades or environmental management systems.
15. General Covenants and Agreements of Acquirer
and Owner.
(a) Delivery of Possession. Possession of the
Property shall be delivered to Acquirer upon Closing,
subject to the rights of tenants in possession.
(b) Damage to or Destruction of Property Prior to
Closing; Risk of Loss. If prior to Closing the Property
shall sustain damage caused by fire or other casualty that
is insured and that would cost One Million Dollars
($1,000,000) or more to repair or if any uninsured loss or
casualty occurs that would cost One Million Dollars
($1,000,000) or more to repair, either Owner or Acquirer 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
Owner nor Acquirer so elects to terminate its obligations
under this Agreement, or if the loss or casualty would cost
less than One Million Dollars ($1,000,000) to repair, the
Closing shall take place as provided herein and Acquirer
shall receive (i) a credit for the amount of Owner's
deductible or retention and (ii) an assignment of Owner'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. Owner shall
retain all interest in and to the insurance proceeds that
may be payable to Owner on account of repaired and completed
damage, but Owner 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, Owner agrees to
immediately advise Acquirer thereof. In the event of such
condemnation, Acquirer shall have the option to (1) take
title in accordance with the terms and conditions of this
Agreement and negotiate with the said condemning authority
for the condemnation award and receive the benefits thereof
without affecting the Valuation, 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 Owner or to Escrow Agent hereunder shall
be returned to Acquirer as set forth herein. Notice of the
exercise of such option hereunder shall be in writing,
delivered to Owner at the address set forth in Paragraph
16(g) of this Agreement (or such other address as Owner may
have theretofore designated in writing) at least two days
prior to Closing.
(d) Brokers/Finders. Owner warrants that Owner did
not negotiate with respect to the purchase of the Property
through any broker, agent, finder, affiliate or other third
party 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 and Owner hereby agrees to
indemnify Acquirer against and hold Acquirer harmless from
any and all claims, demands, causes of action or damages
resulting from any breach of this warranty. Acquirer hereby
warrants that Acquirer did not negotiate through any broker,
agent, finder, affiliate or other third party 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 Owner against and hold Owner harmless
from any and all claims, demands, causes of action or
damages resulting from any breach of this warranty. This
provision shall survive Closing.
(e) Further Assurances Prior to Closing. Owner and
Acquirer shall, prior to Closing, execute any and all docu
ments 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) Waivers, Amendments and Modifications of Provi
sions. 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.
(h) Indemnification. Owner shall indemnify Acq
uirer against and hold Acquirer 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 Owner (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 Owner) unless caused by
Acquirer, resulting from such tort occasioned in or about
the Property prior to Closing. Acquirer shall indemnify
Owner against and hold Owner 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 Acquirer (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 Acquirer) unless caused
by Owner, resulting from such tort occasioned in or about
the Property (a) as a result of its investigation of the
Property during the Approval Period or (b) on or subsequent
to Closing. These covenants shall survive Closing.
16. Miscellaneous Provisions.
(a) Successors and Assigns. Subject to the pro
visions 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 sub
ject 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 sev
eral 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 Owner or Acquirer
shall obtain legal counsel and bring an action or proceeding
against the other by reason of an alleged 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 (i) 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 or (ii) who successfully defends an action
or proceeding brought by the other party and against whom no
material damages or specific performance are awarded.
(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 the next business day or (3) by facsimile
transmission during normal business hours on regular
business days at the to the following addresses, and shall
be effective immediately upon delivery:
Owner: Apollo Real Estate Advisors, LP
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
FAX (000) 000-0000
With a copy to: Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Real Estate Notices (GML)
FAX (000) 000-0000
With a copy to: Forest City Enterprises, Inc.
Legal Department
0000 Xxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
FAX (000) 000-0000
With a copy to: Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxxxxxx X. Xxxxxxx, Esq.
FAX: (000) 000-0000
With a copy to: Xxxxx Xxxxxxxx
Realtech
0000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
FAX (000) 000-0000
With a copy to: Xxxxx Xxxxxxx Xxxxxx & Xxxxxx LLP
00000 Xxxxx Xxxxxx Xxxxxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx Xxxxx, Esq.
FAX (000) 000-0000
Acquirer: Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
FAX (000) 000-0000
With a copy to: Xxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
FAX (000) 000-0000
Escrow Agent: Chicago Title Company
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
FAX (000) 000-0000
All notices, requests and other communications may be sent
by legal counsel for the party and shall be deemed received
on the date of acknowledgment or other evidence of actual
receipt.
(h) Severability. If any provision of this Agree
ment or the application thereof to any person or cir
cumstance 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. Owner and Acquirer agree that
it is in both of their best interests to keep this Agreement
and all information concerning the Property confidential
until Closing. Owner and Acquirer each agrees that neither
shall take any action nor conduct itself in any fashion that
would disclose to unrelated third parties Acquirer's acqui
sition or intended ownership and operation of the Property
or any aspect of the contemplated transaction, subject,
however, to any party's obligations under the Securities Act
of 1933, the Securities and Exchange Act of 1934, the rules
and regulations promulgated thereunder, the rules of the
NYSE and any credit or underwriting agreement by which
either party is bound and Owner's obligation to notify World
Savings, the Lessor under the Master Lease, as defined in
Exhibit "E" hereto, or the occupancy tenants and its
existing lender of the proposed transactions hereunder.
After Closing, either party may make a public announcement
of the transaction.
(l) Survival. Any cause of action of a party for a
breach of the representations and warranties contained in
this agreement shall survive for a one (1) year period after
Closing, at which time such representations and warranties
(and any cause of action resulting from a breach thereof not
then in litigation) shall terminate. Notwithstanding the
foregoing, if Acquirer shall have actual knowledge as of the
Closing that any of the representations or warranties of
Owner contained herein are false or inaccurate or that Owner
is in breach or default of any of its obligations under this
Agreement, and Acquirer nonetheless closes the transactions
hereunder and acquires the Property, then Owner shall have
no liability or obligation respecting such false or
inaccurate representations or warranties or other breach or
default (and any cause of action resulting therefrom shall
terminate upon such closing hereunder).
(m) 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.
(n) Facsimile Signatures. Acquirer and Owner each
(i) has agreed to permit the use, from time to time and
where appropriate, of telecopied signatures in order to
expedite the transaction contemplated by this Agreement,
(ii) intends to be bound by its respective telecopied
signature, (iii) is aware that the other party will rely on
the telecopied signature, and (iv) acknowledges such
reliance and waives any defenses to the enforcement of the
documents and notices effecting the transaction contemplated
by this Agreement based on the fact that a signature or
notice was sent by telecopy.
IN WITNESS WHEREOF, Owner and Acquirer do hereby execute
this Agreement as of the date first written above.
Owner: 11601 HOLDING CORP.,
a Delaware corporation
By: /s/ Xxxxxx Xxxxx
Name: Xxxxxx Xxxxx
Title: Vice President
WILSHIRE SV ASSOCIATES,
a California limited partnership
(formerly known as WSV Associates)
By: Housing Affiliates, Inc.,
a California corporation
By:/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
CONSTITUENT PARTNERS OF WILSHIRE SV ASSOCIATES
HOUSING AFFILIATES, INC.,
a California corporation
By:/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, President
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxxxxxx
/s/ Xxxxxxx Xxx Xxxxxx
Xxx Xxxxxx
FOREST CITY SAN XXXXXXX CORP.,
an Ohio corporation
By:/s/ Xxxxx X. XxXxx
Name: Xxxxx X. XxXxx
Title: Vice President
Acquirer: 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 and Chief
Operating Officer
ARI: ARDEN REALTY, INC.
a Maryland limited partnership
Its general partner
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx,
President and Chief
Operating Officer
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:
Chicago Title Company
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Senior Escrow Officer
