AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
Between
CARLSBERG INVESTMENT COMPANY
Seller
and
ARDEN REALTY LIMITED PARTNERSHIP
Purchaser
Covering
0000 00XX Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx
January 27, 1997
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS ("Agreement") is made and entered into this
27th day of January 1997 by and between CARLSBERG INVESTMENT
COMPANY, a Wyoming partnership ("Seller"), and ARDEN REALTY
LIMITED PARTNERSHIP, a Maryland limited partnership ("Pur
chaser"), with reference to the following facts:
A. Seller is the fee owner of that certain parcel of
real property (the "Real Property") and the improvements
thereon, for informational purposes only, are a three-story
office building containing approximately 103,569 rentable
square feet, other facilities, fixtures, paving and
surfacing thereon or attached thereto (collectively, the
"Improvements"). The Real Property and Improvements are
commonly referred to as the Carlsberg Corporate Center and
are located at 0000 00xx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
00000, and the Real Property 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 Property and the Personal Property
(as hereinafter defined) including, but not limited to, the
Improvements, and all appurtenant easements and rights on
the terms, covenants and conditions hereinafter set forth.
NOW, THEREFORE, with reference to the foregoing reci
tals and in reliance thereon and in consideration of the pur
chase price hereinbelow set forth, and the other terms, cov
enants 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. 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 or to
Purchaser's assignee pursuant to paragraph 15(g) below, and
Purchaser or its assignee shall purchase from Seller, all of
the following:
(a) The Real Property and the Improvements,
together with all easements 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) Seller's right, title and interest in and to
all of the personal property of Seller located at, attached
or appurtenant to, and used in connection with the operation
or maintenance of the Real Property and/or the Improvements
more particularly set forth on Exhibit "C" attached hereto
and made a part hereof (the "Personal Property").
(c) All leases to tenants leasing space in the
Improvements (the "Tenant Leases");
(d) To the extent assignable and approved by
Purchaser (as hereinafter provided), those certain service
and other agreements more particularly described in Exhibit
"D" attached hereto and made a part hereof (the "Service
Contracts"); and
(e) Except for the name "Carlsberg" as it relates
to any matter other than the name of the Improvements, 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, 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 and Payment. The purchase price
(the "Purchase Price") to be paid by Purchaser to Seller for
the Property is the sum of Twelve Million and No/100 Dollars
($12,000,000.00), 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 One Hundred Fifty
Thousand Dollars ($150,000.00), ("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 its
purchase of the Property pursuant to this Agreement after
the Approval Period (as hereinafter defined), Purchaser
shall increase the Initial Deposit within one business day
after the expiration of the Approval Period by cash in the
amount of One Hundred Thousand Dollars ($100,000.00) for a
total of $250,000 (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 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. If Seller fails to forward to Purchaser
a combined 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 in the form of Exhibit "E" attached hereto and
made a part hereof, 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 Section 18662 of
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 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 Seller, (iii) Certificates of Deposit or Money
Market Accounts of institutions whose deposits are insured
by the FDIC or (iv) such other investments as may be
reasonably agreed to by Seller and Purchaser. The Deposit
shall be paid 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.
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 (2) business days thereafter, Seller and Purchaser
shall open an escrow (the "Escrow") with Chicago Title, 000
Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 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 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 general conditions to an escrow, to
the extent that the same are 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 not
later than ten (10) business days following the expiration
of the Approval Period and upon at least three (3) business
days prior written notice from Purchaser to Seller, provided
in all such events the Estoppels (as hereinafter defined)
satisfying the requirements of paragraph 8(b) hereof have
been received and approved and all other Purchaser's
Conditions Precedent to Closing as set forth in Paragraph 8
hereof have been satisfied or waived by Purchaser. 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 and the net proceeds of sale are held by
Escrow Agent for disbursement to Seller. If the Closing as
provided herein does not occur on or before March 31, 1997,
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 to the contrary.
4. Title Matters.
(a) Title Report.
(i) As of the Effective Date, Seller has
delivered to Buyer a CLTA Preliminary Title Report covering
the Real Property, 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") dated as of January 2, 1997, and bears
Title Order No. 6125456, together with true and legible
copies of all documents evidencing matters of record shown
as exceptions to title thereon. Purchaser has also received
as of the Effective Date an ALTA Survey of the Real Property
and Improvements dated November 1, 1996 ("Survey") prepared
by Xxxxxx X. Xxxxx. Purchaser shall cause the same to be
updated and recertified at Purchaser's sole cost and expense
before the expiration of the Approval Period (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 by giving written notice to Seller before the
expiration of the Approval Period. Unless Purchaser gives
written notice that it disapproves any title exceptions or
matters, stating the exceptions or matters so disapproved,
before the expiration of the Approval Period, Purchaser
shall be deemed to have approved all title exceptions and
matters. Notwithstanding the foregoing, Purchaser shall
have the right to disapprove any supplementary reports
issued by Title Company or disclosed after the expiration of
the Approval Period within five (5) business days following
Purchaser's receipt of any such supplemental report;
provided, however, Purchaser's approval shall not be
unreasonably withheld. If for any reason, on or before the
Closing Date, Seller does not cause the 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
except as otherwise specifically provided in this Agreement
to the contrary). Notwithstanding any of the foregoing,
Seller 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. 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 or the Survey obtained by
Purchaser which are not timely objected to by Purchaser
shall be permitted exceptions to title. In addition, the
following matters shall be permitted exceptions: (i) any
title or survey matters objected to by Purchaser, which
objections are subsequently waived in writing by Purchaser;
(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; (iv) the printed exceptions which appear in the
standard form CLTA owner's policy of title insurance (with
extended coverage); and (v) the interests of tenants in
possession.
(ii) If at the date of Closing there are any
liens or encumbrances that Seller is obligated to pay and
discharge, 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); Seller shall
use best efforts to 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.
(b) Title Policy. The Title Policy shall be
Chicago Title Insurance 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 Effective
Date, but in no event later than three (3) 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 for inspection at
the Property 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,
copies of all tenant improvement plans and specifications
and access to all tenant and leasing files.
(ii) Evidence that the Property has the neces
sary Certificates of Occupancy and other permits to operate
the Improvements.
(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 Seller at any
time after January 1, 1995 to the extent available to
Seller;
(iv) All 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 the condition of the Property;
(v) All electricity and property tax bills
for the period beginning January 1, 1995 to the extent
available to Seller;
(vi) Statements of income and expense for the
Property for the calendar years 1995 and 1996 and current
year to date to the extent available to Seller;
(vii) All warranties and operating
manuals that Seller 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; and
(viii) Complete copies of the Service
Contracts, including, without limitation, 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 Seller is obligated.
(b) Purchaser shall have until 5:00 P.M. PST on
the later of (i) the twentieth (20th) business day following
the Effective Date, and (ii) the fifteenth (15th) day
following the date that the last of the materials listed in
paragraph (a) above have been delivered or made available to
Purchaser (the "Approval Period") in which to approve or
disapprove in writing all matters and things that are
subject to Purchaser's rights of review, inspection and
approval hereunder. Notwithstanding the expiration of the
Approval Period, Purchaser shall have until the later of the
expiration of the Approval Period or 5:00 p.m. PST on the
fifth (5th) business day following its receipt of the
written report of the Deep Boring Tests (hereinafter
described) (the "Deep Boring Tests Approval Date") in which
to approve or reject the Property based upon the results of
such Deep Boring Tests. Purchaser's failure either to
approve or disapprove in writing said information before the
expiration of the applicable period for Purchaser's approval
thereof as set forth herein shall be deemed to be
Purchaser's approval thereof. If Purchaser disapproves any
of said information, Purchaser shall notify Seller in
writing thereof within the time period specified above
whereupon, this Agreement shall automatically terminate,
unless Purchaser shall request that Seller agree prior to
the expiration of the Approval Period to cure the same to
Purchaser's satisfaction prior to the Closing Date. If
Seller notifies Purchaser of Seller's inability or
unwillingness to cure a disapproved item, Purchaser shall
have five (5) business days after receipt of Seller's notice
to either (1) waive its prior objection to the disapproved
item or (2) terminate the Agreement. Purchaser's failure to
waive its prior objection to the disapproved item or to
terminate the Agreement shall be deemed to constitute
Purchaser's election to waive its prior objection to the
disapproved item. Notwithstanding any of the foregoing,
however, if Purchaser disapproves any Service Contract
(except for those described on Schedule 1), this Agreement
shall not terminate and Seller shall lawfully terminate such
Service Contract not later than thirty (30) days after the
Closing.
6. Inspections and Approval by Purchaser.
(a) From and after the Effective Date, upon
twenty-four (24) hours prior notice to Seller and receipt by
Purchaser of Seller's prior consent (which shall not be
unreasonably withheld) Purchaser and its agents, employees,
contractors and consultants shall be afforded reasonable
access to the Property during normal business hours for the
purpose of making such investigations as Purchaser deems
prudent with respect to the physical condition of the Prop
erty, including, but not limited to, engineering, soil,
geological, environmental (including ground water),
hazardous or toxic material, noise, pollution, seismic,
structural or other tests, studies or investigations as
Purchaser may require (collectively, "Tests"). Included
shall be the right to access, expose and inspect (including
ultra-sound testing) a representative number of "moment"
frames in the steel structure of the Building, subject to
the rights of tenants in possession. Notwithstanding the
foregoing, however, all invasive examinations and testing by
Purchaser shall require the prior written consent of Seller,
not to be unreasonably conditioned, delayed or withheld.
Seller shall reasonably cooperate to assist Purchaser in
completing such Tests. Access for this purpose and the
location of such Tests shall be coordinated with and agreed
to by Seller. Purchaser shall promptly restore the Property
to its condition immediately prior to such investigations
and Purchaser shall be responsible for repairing or
replacing damage done in the process of such inspection and
Tests. Purchaser agrees not to contact any of Seller's
tenants without Seller's prior consent and to indemnify,
defend and hold Seller and its agents harmless from and
against any loss, cost, damage, claim or expense including,
without limitation, reasonable attorneys' fees, charges and
disbursements suffered by Seller, its agents or the Property
in connection with or arising out of Purchaser's
investigation and Tests. The obligations of Purchaser set
forth in the preceding two sentences of this Paragraph 6(a)
shall survive any termination of this Agreement. 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, examinations and Tests conducted
hereunder. Purchaser shall promptly deliver to Seller true,
accurate and complete copies of any written reports relating
to the physical condition and testing of the Property
prepared for or on behalf of Purchaser by any third party
(the foregoing obligation surviving any termination of this
Agreement). In the event of termination of this Agreement,
Purchaser shall return all documents and other materials
furnished to or on behalf of Purchaser by Seller hereunder
and comprising the so-called "due diligence" materials.
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, consultants,
accountants and prospective debt and equity financing
sources who reasonably need to be informed of Purchaser's
determinations hereunder. The confidentiality obligation of
Purchaser set forth in the preceding sentence shall survive
any termination of this Agreement.
(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 twenty-four
(24) hours prior notice to examine all operating books and
records that relate to the Property (including all specifica
tions and as-built drawings to the extent they are in
Seller's possession), all of the following available:
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) Seller has informed Purchaser of and
Purchaser is aware of the recent discovery of the presence
of Trichloroethane ("TCE") and other volatile organic
compounds ("VOCs") in the soil on the Property, the exact
location and quantity of which has not been determined.
Purchaser, by its execution of this Agreement, acknowledges
that it has received copies of and will review during the
Approval Period, the following documents: (1) the Phase I
Environmental Site Assessment, dated October 28, 1996,
prepared by Xxxxxx-Xxxxxx-Recon ("LFR") and (2) the Phase II
Subsurface Investigation, dated November 19, 1996, prepared
by LFR. Seller has informed Purchaser that this Phase II
Subsurface Investigation did not include deep boring tests
on the Property. Purchaser covenants that, as part of its
investigation of the Property, it will engage an
environmental consultant (who shall be approved by Seller
which approval (i) shall include the scope of work to be
performed and (ii) shall not be unreasonably withheld or
delayed beyond 48 hours from submission) to perform deep
boring tests on the Property ("Deep Boring Tests"). Seller
shall be entitled to a written report detailing the results
of the Deep Boring Tests. Purchaser shall pay for the cost
of these tests. However, if the Closing does not occur
through no default of the Purchaser, Seller will reimburse
Purchaser for the cost of the Deep Boring Tests (the
foregoing obligation surviving any termination of this
Agreement) in an amount not to exceed $13,500.00.
(d) Purchaser shall have until the expiration of
Approval Period in which to approve, disapprove or waive in
its sole discretion each the matters referred to in subpara
graphs (a), (b) and (c) above. Notwithstanding the
foregoing, Purchaser shall have until the later of the Deep
Boring Tests Approval Date and the expiration of the
Approval Period to approve or disapprove the Property based
upon the results of the Deep Boring Tests. 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 expiration of the
Approval Period. Failure to timely deliver such written dis
approval shall be deemed Purchaser's approval of said
matters.
7. Operation of Property Pending Closing.
(a) Tenant Leases. Seller has leased portions of
the Property to various occupancy tenants. From and after
the Effective Date and until the Closing Date Seller shall
not enter into any new leases or amend or extend, terminate
or accept the surrender of any existing tenancies (unless
the existing lease expires) or approve any new subleases
(collectively, "Lease Action") without the prior written
consent of Purchaser (which consent shall not be
unreasonably delayed or withheld). In requesting such
consent, Seller shall inform Purchaser in writing ("Request
for Consent") 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.
Notwithstanding the foregoing, Lease Action meeting all of
the requirements of Schedule 2 attached hereto and made a
part hereof shall be deemed approved and consented to by
Purchaser and may be taken by Seller. Also included in the
Request for Consent, shall be Seller's proposed draft of the
lease or amendment agreement. Purchaser shall use its best
efforts to approve or disapprove any Request for Consent as
soon as possible; provided, however, that the failure of
Purchaser to respond within five (5) days after its receipt
of any Request for Consent shall be deemed to constitute its
approval of such Request for Consent. From the date that
Purchaser receives any Request for Consent through the date
of the Closing or any termination of this Agreement,
Purchaser shall not engage in any competitive lease
negotiations with or enter into any lease, with any proposed
tenant disclosed by any Request for Consent, with respect to
any other property. If Purchaser shall timely object to
and/or disapprove of any Lease Action proposed to be taken
by Seller (requiring Purchaser's consent as provided herein)
prior to the expiration of the Approval Period, Seller,
nevertheless, can take such Lease Action which, upon written
notice by Seller to Purchaser, shall entitle Purchaser to an
option to terminate this Agreement for a period of five (5)
business days following Purchaser's receipt of such notice.
Purchaser's failure to timely exercise its option to
terminate shall be deemed to be its election to waive its
objection to such Lease Action by Seller. If Purchaser
shall timely object to and/or disapprove of any Lease Action
proposed to be taken by Seller after the expiration of the
Approval Period and the making of the Deposit by Purchaser
and before Closing, Seller shall not take such Lease Action.
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. Seller has
informed Purchaser that an affiliate of Seller is occupying
3,751 rentable square feet in the Improvements and that such
affiliate intends to vacate the space within sixty (60) days
following the Closing Date.
(b) Leasing Commissions; Tenant Improvements and
Rent Concessions. Seller covenants and agrees to be respon
sible for all leasing commissions, tenant improvement costs
and unamortized rent concessions with respect to any leases
(including amendments and renewals) entered into on or
before January 10, 1997 (collectively, "Old Leases").
Purchaser covenants and agrees to be responsible for all
leasing commissions, tenant improvement costs and
unamortized rent concessions with respect to any new leases,
extensions of existing leases and renewals occurring after
January 10, 1997 (collectively, "New Leases"), provided that
(i) Purchaser has approved or is deemed to have approved
such action by Seller and (ii) Seller has delivered to
Purchaser copies of the proposed New Leases and other
agreements with respect thereto prior to the Closing and by
virtue of which brokerage commissions are payable, tenant
improvements are to be constructed or rent concessions are
to be granted. Failing such delivery and approval (or
deemed approval), Seller shall remain responsible for all of
costs and expenses including commissions for New Leases
incurred prior to the Closing.
(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) Property Management. Seller shall use its
best efforts to cause the property manager, Carlsberg
Management Company (which is unrelated to Seller) to
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.
(e) 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.
Notwithstanding the foregoing, Seller shall terminate and
cancel as of the Closing Date any and all exclusive leasing
agency agreements and shall give a thirty (30) day notice of
termination of the existing management agreement promptly
following (1) the later of the expiration of the Approval
Period and the Deep Boring Tests Approval Date and (2) the
making of the Deposit by Purchaser. Seller shall defend and
indemnify Purchaser against any loss, cost, expense or
damage suffered by Purchaser after the Closing if such
management agreement is not so terminated within such thirty
(30) day period.
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 Clos
ing. 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 caused to be delivered to Purchaser estoppel letters
(collectively, 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 "F" attached hereto and
forming a part hereof. Notwithstanding the foregoing,
Seller can satisfy the condition set forth in this Paragraph
8(b) by providing an estoppel executed by Seller in
substantially the form of Exhibit "G" attached hereto and
forming a part hereof (together with the Tenant Estoppels,
the "Estoppels"), for any tenant or all tenants for which
Seller has not been successful in obtaining a Tenant
Estoppel executed by such tenant.
(c) Compliance with This Agreement. Seller 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 pro
visions 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 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 Clos
ing. The representations and warranties of Purchaser con
tained 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 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) Remedies of Purchaser. In the event that
Seller fails to keep and perform each and every obligation,
covenant and agreement herein by Seller to be kept or per
formed, then Purchaser may pursue an action for specific
performance against Seller by first tendering its timely,
full performance required hereunder, but Purchaser hereby
agrees that Seller shall not be responsible to Purchaser for
any actual or consequential damages (including lost profits)
or punitive damages.
(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 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 SELLER IN THE EVENT OF PURCHASER'S WRONGFUL FAIL
URE TO PURCHASE THE PROPERTY. PURCHASER ACKNOWLEDGES THAT
(1) SELLER HAS RECEIVED SIX OTHER OFFER TO PURCHASE THE
PROPERTY AND (2) SELLER IS ELECTING NOT TO PURSUE
NEGOTIATIONS WITH ANY OF THE OTHER POTENTIAL PURCHASERS AND
IS REMOVING THE PROPERTY FROM THE MARKET IN RELIANCE ON
PURCHASER'S PROMISE TO PERFORM UNDER THIS AGREEMENT. THE
PARTIES HAVE MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO
ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES SELLER WOULD
SUFFER IN THE EVENT OF PURCHASER'S WRONGFUL FAILURE TO
PURCHASE THE PROPERTY AND 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/BHC /s/RSZ
Seller's Purchaser's
Initials Initials
11. Closing Procedure.
(a) At least one business day prior to the date
of Closing, Purchaser shall have delivered to Escrow Agent
three (3) counterpart executed originals of the following
documents and the following sums of money required to be
delivered by Purchaser hereunder:
(i) The Purchase Price in the manner set
forth in Paragraph 2(a);
(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 and Security Deposits ("Assignment of
Leases") substantially in the form and substance of Exhibit
"J" 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 "K" attached hereto and forming a part hereof.
(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
"H" attached hereto and forming a part hereof;
(ii) A Xxxx of Sale (the "Xxxx of Sale") in
the form of Exhibit "I" 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 and Leases if in Seller's possession or
under its control;
(vi) Notices to each of the tenants and occu
pants of the Property of the transfer of the Property to
Purchaser substantially in the form and substance of Exhibit
"M" attached hereto and forming a part hereof;
(c) Upon delivery of the foregoing sums and docu
ments, Escrow Agent shall cause Title Company to cause the
Grant Deed to be recorded (by a special recording if neces
sary) in the Official Records of Los Angeles County,
California, and immediately to issue the Title Policy.
(d) Promptly following the Closing, a representa
tive of the Seller will arrange to meet with a
representative of Purchaser at the Property for the purpose
of delivering operating control of the Property to
Purchaser, as follows:
(i) Delivery of identified and coded keys
to the Property;
(ii) To the extent they are in Seller's
possession or under its control all building permits,
certificates of occupancy, elevator operating permits, third-
party engineering, structural and maintenance reports
covering the Property;
(iii) 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
(iv) All tenant and service provider billing
and payment histories and correspondence to the extent in
Seller's possession or under its control.
12. Costs and Prorations.
(a) Prorations. All revenues, income, receiv
xxxxx, costs, expenses and payables of the Property shall be
apportioned equitably between the parties as of Closing on
the basis of the actual number of days in a particular
month, and with respect to the items enumerated below where
a particular manner of apportionment is provided, then
apportionment of such item shall be made in such manner.
The obligation to make apportionments shall survive Closing.
Without limitation, the following items shall be so
apportioned:
(i) Monthly rents and percentage rent and
"passthroughs" of real estate taxes and operating expenses
due from occupancy tenants under 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 (except as to
the lease with the County of Los Angeles) 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. With
respect to the Tenant Lease with the County of Los Angeles,
however, first payments collected by Purchaser shall be
delivered to Seller until all arrearages and delinquencies
have been satisfied. Notwithstanding any of the foregoing,
in the event that Purchaser within six (6) months after
Closing alters the financial terms of any Tenant Lease of
2,500 square feet or less pursuant to which Seller is owed
delinquent rents or charges, then, with respect to rents or
charges under such Tenant Lease that are first received by
Purchaser after the alteration of the financial terms by
Purchaser, such payments shall be payable first as follows:
(x) first to Seller for the delinquent rents or charges
which are attributable to the two (2) month period just
prior to the Closing and (y) second to Purchaser for any
then outstanding rental obligations which first become due
and payable on or after the Closing and (z) third to Seller
for any remaining delinquent rents or charges which are
attributable to the period prior to the Closing. For the
purpose of the preceding sentence an eviction or termination
of any tenant's occupancy is not an alteration of the
financial terms of any Tenant Lease. 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 required to litigate or declare a default
in any Lease). With respect to delinquent rents and any
other amounts or other rights of any kind respecting tenants
who are no longer tenants of the Property as of the Closing
Date, Seller shall retain all rights relating thereto.
(ii) Real estate and personal property taxes
and any special assessments, taking into consideration
discounts for the earliest permitted payment, based upon the
latest previous tax levies. Such items shall be
reapportioned between Seller and 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, 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
applicable to such period. 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 leases 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 costs and
leasing commissions for leases, amendments and renewals
signed after January 10, 1997, shall be paid by Purchaser if
approved by Purchaser 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 securing the CLTA
standard coverage portion of the ALTA Owner's Title
Policy;
(2) Documentary transfer tax (County and
City) imposed on the conveyance of title to the
Property to Purchaser;
(3) Any sales or use taxes that may be
owing in connection with the transactions contemplated
by this Agreement; and
(4) One-half of Escrow Agent's Escrow
Fee.
(ii) Purchaser 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 default of the Seller and, if Closing
does occur, that portion of the cost of the Title
Policy that is not to be paid by Seller pursuant to
subparagraph (b)(i)(1) above, the cost of all
endorsements to the ALTA Owner's Title Policy and the
cost of the ALTA Survey;
(2) The cost of recording the Grant Deed;
(3) All expenses relating to Purchaser's
financing of its acquisition of the Property; 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 Seller.
(a) Seller hereby makes the following representa
tions, 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 Effective Date and on the Closing Date
and each of which shall survive the Closing for a period of
six (6) months, except as to subparagraph (i)(4) which shall
survive the Closing for a period of two (2) years:
(i) Except as set forth in Paragraph 6 (c)
above or on the Disclosure Schedule set forth in Exhibit "L"
attached hereto and made a part hereof, Seller has no
knowledge of any:
(1) existing latent defects or seismic
conditions concerning the Real Property or materially incor
rect income or expense figures in any financial statements
prepared by or for Seller and delivered to Purchaser
regarding the Property;
(2) any claim, litigation or administra
tive action, arbitration, proceeding pending before any
court, agency or official, nor any such claim or action
threatened in writing, relating to the Seller's interest in
the Property or the Property or with respect to the validity
of any statutes, ordinances, regulations or restrictions or
any permits or approvals thereunder relating to the
construction of any Improvements on the Property or the
operation thereof nor any outstanding contingent liabilities
affecting 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; and
(4) Seller also represents and warrants
to Purchaser that: Seller has (i) not generated or
discharged any Hazardous Substances at the Property, (ii)
not violated and has not received any notice of violation of
any federal, state or local laws or ordinances governing
Hazardous Substances at the Property or (iii) no actual
knowledge of any Hazardous Substance on the Property other
than the TCE and VOCs or as disclosed in the Phase I
Environmental Site Agreement, dated October 28, 1996
prepared by LFR or the Phase II Subsurface Investigation
dated November 19, 1996 prepared by LFR.
(ii) Without limiting the other provisions of
this Agreement, Seller shall reasonably cooperate with
Purchaser's investigation of matters relating to the
foregoing provisions of Paragraph 13(i)(4) 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. 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 regula
tions 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 Rent Roll and the Service
Contracts submitted to Purchaser by Seller for approval
pursuant to Paragraph 5 above, or otherwise, shall be true,
correct and complete as to all economic terms thereof as of
the date of submission thereof, and as 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 Rent Roll matters or Service Contracts or
other agreements which shall be confirmed as correct in any
estoppel certificate or service provider certificate
delivered to Purchaser as provided in this Agreement;
(iv) To the best of Seller's actual
knowledge, the operating financial information prepared by
Seller's management agent and delivered to Purchaser with
respect to the Property, consisting of Statements of
Operations for the calendar year ended December 31, 1996,
and for the current calendar year are true and correct in
all material respects; in this regard Seller agrees to make
available to Purchaser and its accountants, at Purchaser's
cost, all accounting records for the calendar year ended
December 31, 1996, and for the current calendar year 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; and
(v) As used in this Agreement, "to Seller's
knowledge" or other similar knowledge limitations as to
Seller shall mean the actual knowledge, without any duty to
investigate, of Xxxxxxx X. Carlsberg.
(b) Notwithstanding anything contained in Para
graphs 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. Pur
chaser 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 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
Purchaser is a party or by which Purchaser may be bound or
affected;
(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; and
(c) As of the expiration of the Approval Period
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, and (iv) Purchaser is satisfied based
upon its examination of the Due Diligence Materials and its
investigation of all other 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.
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 prior to Closing the Property
shall sustain damage caused by fire or other casualty that
is insured and that would cost Five Hundred Thousand Dollars
($500,000) or more to repair or if any uninsured loss or
casualty occurs that would cost Five Hundred Thousand
Dollars ($500,000) 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 Agreement, or if the loss or casualty
would cost less than Five Hundred Thousand Dollars
($500,000) 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 material 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 condemning
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 First Property Realty
Corporation ("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 a 2% commission in
connection with the within transaction and Seller hereby
agrees to defend and 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 connec
tion with this Agreement or the closing hereof, and hereby
agrees to defend and indemnify Seller against and hold
Seller 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. 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 its
rights and duties hereunder without the prior written
consent of Seller (which consent may be withheld in Seller's
sole and absolute discretion); provided, however, that
Purchaser may assign all of its rights and duties hereunder
to any entity with which Purchaser is, directly or
indirectly, affiliated or an entity to be formed and
controlled by the principals (Xxxxxxx X. Xxxxx and Xxxxxx X.
Xxxxxxx) of Purchaser, without Seller's consent, upon the
giving of written notice to Seller, which notice may not be
given less than three days prior to Closing. For the
purpose of this paragraph an "affiliate" of or a person
"affiliated" with, a specified person, is a person that
directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control
with, the person specified. Any such assignment is
conditional upon such assignee assuming the obligations of
Purchaser under this Agreement and agreeing to be bound by
all consents and approvals theretofore given or deemed to
have been given by Purchaser. Such assignment or nomination
shall not relieve Purchaser of its obligations hereunder
including the obligation to pay the Purchase Price upon the
Closing hereof.
(h) Waivers, Amendments and Modifications of
Provisions. Waivers, amendments or modifications of any
term or condition of this Agreement must be in writing and
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 and
defend Purchaser against and hold Purchaser harmless from
any and all loss, cost, damage, claim, liability or expense,
including court costs and reasonable attorneys' fees,
charges or disbursements for (1) any of the matters under
the Assignment of Leases or the Assignment of Service
Contracts to the extent to be indemnified thereunder by
Seller; or (2) 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;
provided, however, Seller will not and does not protect,
defend or indemnify Purchaser from or against any claims,
damages or liabilities arising out of the TCE or the VOCs or
other Hazardous Substances on the Property nor will Seller
be responsible to Purchaser for any of the cost of clean-up,
if required. Purchaser shall indemnify and defend Seller
against and hold Seller harmless from any and all loss,
cost, damage, claim liability or expense, including court
costs and reasonable attorneys' fees, charges or disburse
ments, for (1) any of the matters under the Assignment of
Leases or the Assignment of Service Contracts to the extent
to be indemnified thereunder by Purchaser; (2) breach of its
confidentiality covenants under Paragraph 6(a); or (3) 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 or until Closing or (b)
on or subsequent to Closing. These covenants shall survive
Closing or any termination of this Agreement.
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 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 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 Seller or Pur
chaser 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,
charges and disbursements, 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, sent by
facsimile transmission (with confirmation) to the numbers
listed below or 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, and shall be effective immediately upon delivery
if during regular business hours or, if not delivered during
regular business hours, then the next business day:
Seller: Carlsberg Investment Company
0000 00xx Xxxxxx
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Carlsberg,
General Partner
FAX (000) 000-0000
With a copy to: Carlsberg Investment Company
c/o Pacific US Real Estate Group
0 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Fax: (000) 000-0000
With a copy to: Xxxxxx Xxxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
FAX (000) 000-0000
Purchaser: Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxx
Chairman & CEO
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 Insurance Company
000 Xxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
FAX (000) 000-0000
All notices, requests and other communications shall be
deemed received on the date of acknowledgment or other
evidence of actual receipt if delivered during regular
business hours or, if not delivered during regular business
hours, then the next business day.
(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 after the Closing. In this regard Seller
agrees to use its best efforts to cause to be made available
to Purchaser's auditors copies of the books, records,
general ledgers and journals relating to the Property,
sufficient for them to prepare comparative certified
statements for Purchaser for calendar years 1996 and 1997 to
the date of Closing. 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. This Paragraph 16(i) shall survive the Closing or
any termination of this Agreement.
(l) Tax Deferred Exchange. Seller may desire to
dispose of the Property through a tax deferred exchange
which qualifies for non-recognition of gain under Section
1031 of the Internal Revenue Code. Purchaser shall
cooperate with Seller in attempting to effectuate such
exchange, including, but not limited to, the execution of
such documentation as may be reasonably necessary to effect
such exchange, provided that (i) Purchaser shall not incur
any additional liability in connection with an exchange for
the benefit of Seller, (ii) Purchaser shall not be obligated
to take title to any real property (other than the
Property), (iii) the date of Closing shall not be extended
as a result of the exchange, without Purchaser's prior
written consent, and (iv) any additional costs and charges
attributable to the exchange, including, but not limited to,
attorneys' fees, brokers' commissions and other transaction
related expenses shall be paid for by Seller. Purchaser and
Seller further agree that Seller may substitute an
intermediary ("Intermediary") to act in place of Seller as
the seller of the Property. The Intermediary shall be desig
nated in writing by Seller. Upon identification of Interme
diary, Intermediary shall be substituted for Seller as the
seller of the Property. Purchaser agrees to accept the
Property and all other required performance from
Intermediary and to render its performance of all of its
obligations to Intermediary. Purchaser agrees that
performance by Intermediary will be treated as performance
by Seller. Seller shall unconditionally guarantee the full
and timely performance by Intermediary of each and every one
of the representations, warranties, covenants, indemnities,
obligations and undertakings of Intermediary. As guarantor,
Seller shall be treated as a primary obligor with respect to
these representations, warranties, covenants, indemnities,
obligations and undertakings, and, in the event of breach,
Purchaser may proceed directly against Seller on this
guarantee without the need to join Intermediary as a party
to any action against Seller. Seller unconditionally waives
any defense that it might have as guarantor that it would
not have if it had made or undertaken these representations,
warranties, covenants, indemnities, obligations and
undertakings directly. In the event of the breach of any
representations, warranties, covenants, obligations and
undertakings by Seller or Intermediary or in the event of
any claim upon any indemnity of Seller or Intermediary
(whether the representation, warranty, covenant, indemnity,
obligation or undertaking is express or implied),
Purchaser's exclusive recourse shall be against the Seller
and Purchaser shall have no recourse of any type against the
Intermediary arising from this transaction.
(m) Condition of Property. Purchaser
acknowledges that it will inspect and examine the Property
and, except as expressly provided in this Agreement, will
rely solely on its own investigation of the Property and not
on any information provided or to be provided by or on
behalf of Seller. Except as otherwise expressly provided in
this Agreement, the sale of the Property to Purchaser is
made on an "AS IS" "WHERE IS" and "WITH ALL FAULTS" basis.
Purchaser acknowledges that in consideration of entering
into this Agreement, that, except as expressly provided in
this Agreement, Seller makes no warranty or representation
with respect to the Property, or any portion thereof,
express or implied, or arising by operation of law,
including, but not limited to, any warranty of condition
(physical, environmental or otherwise), title (other than
the limited warranties of title contained in the grant
deed), habitability or fitness for a particular purpose or
otherwise.
(n) 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.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first hereinabove written.
Seller: CARLSBERG INVESTMENT COMPANY,
a Wyoming partnership
By: /s/ Xxxxxxx X. Carlsberg
Name: Xxxxxxx X. Carlsberg
Title: General Partner
Purchaser: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty, Inc.,
a Maryland corporation,
Its general partner
By:/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx,
Chairman of the Board and
Chief Executive 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 Insurance Company
By: /s/ Xxxx Xxxxxxxx
Name: Xxxx Xxxxxxxx
Title: Senior Escrow Officer
