ARDEN REALTY
AGREEMENT OF PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
BETWEEN
XXXXXXXXX INVESTMENT GROUP, INC.,
A CALIFORNIA CORPORATION
SELLER
AND
ARDEN REALTY LIMITED PARTNERSHIP
PURCHASER
TABLE OF CONTENTS
Page
1. PURCHASE AND SALE 1
2. PURCHASE PRICE AND PAYMENT 2
3. ESCROW 3
4. TITLE MATTERS 4
5. DELIVERY OF INFORMATION 5
6. INSPECTIONS AND APPROVAL BY PURCHASER 6
7. OPERATION OF PROPERTY PENDING CLOSING 7
8. CONDITIONS PRECEDENT TO PURCHASER'S
OBLIGATION TO CLOSE ESCROW 8
9. CONDITIONS PRECEDENT TO SELLER'S
OBLIGATION TO CLOSE ESCROW 9
10.REMEDY OF PURCHASER AND SELLER UPON
DEFAULT 9
11.CLOSING PROCEDURE 10
12.COSTS AND PRORATIONS 11
13.REPRESENTATIONS, WARRANTIES AND COVENANTS
OF SELLER 13
14.REPRESENTATIONS AND WARRANTIES OF
PURCHASER 15
15.GENERAL COVENANTS AND AGREEMENTS OF
PURCHASER AND SELLER 15
16.MISCELLANEOUS PROVISIONS 18
AGREEMENT OF PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND ESCROW INSTRUCTIONS
("Agreement") is made and entered into this 9th day of April 1997
by and between XXXXXXXXX INVESTMENT GROUP, INC., a California
corporation ("Seller"), and ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Purchaser"), with reference to the
following facts.
A. Seller is the fee owner of that certain parcel of real
property (the "Real Property") and the improvements thereon,
including a one-story office building and a three-story office
building containing, in the aggregate, approximately 61,000
rentable square feet, and other facilities, fixtures, paving and
surfacing thereon or associated therewith, (collectively, the
"Improvements"). The Real Property and Improvements are located
at 4200 and 0000 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxxx, and is
more particularly described in Exhibit "A" attached hereto and
forming a part hereof.
B. Seller desires to sell, and Purchaser desires to
purchase, all of the real and personal property owned by Seller
located at or forming part of the Real Property, including, but
not limited to, the Improvements, and all appurtenant easements
and rights, and the Personal Property (as hereinafter defined) on
the terms, covenants and conditions hereinafter set forth.
NOW, THEREFORE, with reference to the foregoing recitals and
in reliance thereon and in consideration of the purchase price
hereinbelow set forth, and the other terms, covenants and
conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed by Seller and
Purchaser as follows:
1. Purchase and Sale. 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, hereditaments and appurtenances thereto,
subject only to such easements, agreements and exceptions as may
have been approved by Purchaser in accordance with Paragraph 4(a)
hereof and the tenancies and occupancies that are set forth on
Exhibit "B";
(b) All of the personal property of Seller (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");
(c) All leases to tenants leasing space in the
Improvements (the "Tenant Leases");
(d) To the extent assignable, those certain service
and other agreements more particularly described in Exhibit "C"
attached hereto and made a part hereof, which are approved by
Purchaser; and
(e) All other right, title and interest of Seller
constituting part and parcel of the Property (as hereinafter
defined), including, but not limited to, trade names, logos,
easements, licenses, permits, air rights, certificates of
occupancy, warranties, rights-of-way, signs, trademarks,
telephone listings and numbers, sewer agreements, water line
agreements, utility agreements, water rights and oil, gas and
mineral rights (collectively, the "Intangibles") to the extent
assignable or transferable.
Reference herein to the "Property" shall include all of the real,
personal and intangible property described in subparagraphs (a)
through (e) hereof.
2. Purchase Price and Payment. The purchase price (the
"Purchase Price") to be paid by Purchaser to Seller for the
Property is the sum of Seven Million Four Hundred Thousand and
No/100 Dollars ($7,400,000.00), 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 Thousand Dollars
($100,000.00), ("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 Closing occurs, then the Deposit shall be
applied to the Purchaser Price;
(ii) 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
(iii) 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 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, Escrow Agent shall be entitled to withhold and pay
to the Internal Revenue Service and the Franchise Tax Board such
withholding required of Purchaser pursuant to Internal Revenue
Code 1445 and equivalent form provided under the Revenue and
Taxation Code of the State of California.
(c) The Deposit shall be at all times invested by
Escrow Agent in the following investments ("Approved
Investments"): (i) United States Treasury obligations,
(ii) United States Treasury-backed repurchase agreements issued
by a major money center banking institution reasonably acceptable
to Seller, (iii) Certificates of Deposit or Money Market Accounts
of institutions whose deposits are insured by the FDIC or
(iv) such other manner as may be reasonably agreed to by Seller
and Purchaser. The Deposit shall be disposed of by Escrow Agent
only as provided in this Agreement.
(d) All payments required to be made under this
Agreement shall be made in U.S. funds.
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 five (5)
business days thereafter, Seller and Purchaser shall open an
escrow (the "Escrow") with First American Title Company, 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxx, Attention:
Xx. Xxxxx Xxx ("Escrow Agent"), through which the purchase and
sale of the Property shall be consummated. A fully executed copy
of this Agreement shall be deposited with Escrow Agent, duly
executed by Seller, Purchaser and Escrow Agent, to serve as
Escrow instructions to Escrow Agent, and Escrow Agent shall be
and is hereby authorized and instructed to deliver pursuant to
the terms of this Agreement the documents and monies to be
deposited into the Escrow. Escrow Agent may attach to this
Agreement Escrow Agent's standard form escrow agreement, to the
extent that the same is consistent with the terms hereof, and are
reasonably approved by Seller and Purchaser. Escrow Agent shall
immediately, upon receipt of such duly executed copy of this
Agreement, notify Seller and Purchaser of the opening of Escrow.
Should either party fail to open Escrow in accordance with the
provisions of this Paragraph 3(a), such failure shall constitute
a material breach of this Agreement.
(b) Closing of Escrow. Escrow shall close on or
before May 23, 1997 (the "Closing Date"), provided the Tenant
Estoppels satisfying the requirements of paragraph 8(b) hereof
have been received and all other Purchaser's Conditions Precedent
to Closing as set forth in Paragraph 8 hereof have been
satisfied. The term "Closing" as used herein shall be deemed to
be the date upon which the respective Conditions Precedent to
Purchaser's Obligation to Close Escrow (set forth in Paragraph 8
below) and the Conditions Precedent to Seller's Obligations 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
Xxxx 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 by the Closing Date, this Agreement and the Escrow
shall be canceled 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 Reports.
(i) Purchaser shall order a CLTA Preliminary
Title Report covering the Real Property and the Improvements,
(the "Preliminary Title Report"), issued by First American Title
Insurance Company through First American Title Insurance Company,
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxxx,
Attention: Xx. Xxxxx Xxxx ("Title Agent"), together with true
and legible copies of all documents evidencing matters of record
shown as exceptions to title thereon. If Purchaser shall desire
an ALTA Survey of the Real Property and Improvements ("Survey"),
Purchaser shall cause the same to be so made at Purchaser's sole
cost and expense before the Closing Date (and upon receipt shall
deliver a copy of the undated Survey to Seller). Purchaser shall
have the right to object to any exceptions contained in the
Preliminary Title Report or the Survey by giving notice to Seller
as hereinafter provided. 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. Unless
Purchaser gives written notice that it disapproves any such
exceptions to title matters, stating the exceptions so
disapproved, within the earlier of (i) thirty (30) days after
receipt of the last of the Preliminary Title Report or Survey, or
(ii) May 19, 1997, Purchaser shall be deemed to have approved
said exceptions. Purchaser's approval of the Preliminary Title
Report shall be without prejudice to Purchaser's right to
disapprove additional survey matters or any supplementary reports
issued by Title Company or other exceptions disclosed after
receipt of the initial Preliminary Title Report and Survey. If
for any reason, on or before the Closing Date Seller does not
cause such exceptions to title or survey matters which Purchaser
timely disapproves to be removed at no cost or expense to
Purchaser (Seller having the right but not the obligation to do
so), the obligation of Purchaser to buy the Property as herein
provided shall, at Purchaser's option, terminate (and Seller and
Purchaser shall have no further obligations in connection
herewith). Purchaser shall have the option to waive the
condition precedent set forth in this paragraph 4(a) by written
notice to Seller. In the event of such waiver, such condition
shall be deemed satisfied. All matters set forth on the
Preliminary Title Report, the Survey or any updated Survey
obtained by Purchaser which are not timely objected to by
Purchaser shall be permitted exceptions to title and shall
additionally include (i) any title or survey matters objected to
by Purchaser, which objections are subsequently waived in writing
by Purchaser, and (ii) any title or survey matters objected to by
Purchaser in accordance with the terms and provisions of this
Agreement, which objections are cured to Purchaser's
satisfaction, (iii) real estate taxes and assessments not yet due
and payable, and (iv) the printed exceptions which appear in the
standard form ALTA owner's policy of title insurance (with
extended coverage).
(ii) If at the date of Closing there are any liens
or encumbrances that Seller is obligated to pay and 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). Further, Seller shall simultaneously
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 Improvements as vested in Purchaser, or in
Purchaser's permitted assignee, subject only to the permitted
exceptions specified in Paragraph 4(a) above.
5. Delivery of Information.
(a) As soon as practicable after the date hereof, but
in no event later than five (5) business days after the Effective
Date, except as otherwise set forth, Seller shall have delivered
or shall have caused to be delivered or made available to
Purchaser at the Property, to the extent they are in Seller's
possession or under its control, the following:
(i) Complete copies of all of the Tenant Leases
and all amendments thereto, a schedule of which is attached
hereto as Exhibit "B" and forms a part hereof.
(ii) Evidence that the Real Property complies with
the Subdivision Map Act of California, the Property has all of
the necessary valid Certificates of Occupancy and otherwise
complies with all construction and operational laws, codes,
ordinances, regulations and conditional use permits.
(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) A set of all "as built" plans, specifications
and structural drawings (including, but not limited to,
mechanical, electrical, air conditioning, landscaping and
sprinkler drawings), 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) 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, 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;
(viii) 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 Seller is obligated (the "Service
Contract");
(ix) A list of all personal property (including
supplies) owned or leased by Seller and used in connection with
the operation, maintenance and repair of the Property.
(b) Purchaser shall have until 5:00 P.M. on the day
preceding the Closing Date (the "Approval Period") to approve or
disapprove all matters and things that are subject to Purchaser's
rights or review, inspection and approval hereunder. Purchaser's
failure either to approve or disapprove said information by the
date specified herein shall be deemed its disapproval thereof.
If Purchaser disapproves any of said information, Purchaser shall
notify Seller in writing thereof within the time period
specified. If Purchaser so notifies Seller or any matters are
deemed disapproved as provided herein, this Agreement shall
terminate. Notwithstanding the foregoing, if Purchaser
disapproves any Service Contract, this Agreement shall not
terminate and Seller shall lawfully terminate such Service
Contract not later than thirty (30) days after the Closing, to
the extent the same can be so terminated and provided Purchaser
shall pay all cancellation or termination penalties, fees or
costs in connection therewith.
6. Inspections and Approval by Purchaser.
(a) From and after the date hereof, Purchaser and its
agents, employees and contractors shall be afforded full access
to the Property during normal business hours and upon twenty-four
(24) hours prior notice for the purpose of making such
investigations as Purchaser deems prudent with respect to the
physical condition of the Property, including, but not limited
to, engineering tests, subject to the rights of tenants in
possession. Seller shall reasonably cooperate to assist
Purchaser in completing such inspection. However, Purchaser
agrees not to contact any of Seller's tenants without Seller's
prior consent and to hold Seller harmless from and against any
loss, costs, damages, claim or expense suffered by Seller or the
Property and caused by Purchaser's said investigations (the
foregoing obligation surviving any termination of this
Agreement). In no event shall Purchaser make any intrusive
physical testing (environmental, structural or otherwise) at the
Property (such as soil borings or the like) without Seller's
prior consent. Purchaser shall promptly restore the Property to
its condition immediately prior to such investigations. In
addition, Purchaser agrees not to unreasonably interfere with the
use and enjoyment of the Property by Seller, its agents,
representatives, employees or any tenants or other occupants.
Seller shall have the right, at its option, to cause a
representative of Seller to be present at all inspections,
reviews and examinations conducted hereunder. At the request of
Seller, Purchaser shall promptly deliver to Seller true, accurate
and complete copies of any written reports relating to the
Property prepared for or on behalf of Purchaser by any third
party and, in the event of termination hereunder, shall return
all documents and other materials furnished to or on behalf of
Purchaser by Seller hereunder. Purchaser shall keep all
information or data received or discovered in connection with any
of the inspections, reviews or examinations strictly
confidential; provided; however, that Purchaser shall be entitled
to disclose such information to Purchaser's attorneys,
consultants, accountants and prospective debt and equity
financing sources who reasonably need to be informed in
connection with Purchaser's determinations hereunder.
(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 specifications and as-
built drawings to the extent they are in Seller's possession),
all building permits, certificates of occupancy, soil reports,
engineers' reports and studies, and similar information relating
to the Property or its management, operation, maintenance or use,
and all warranties and operating annuals that Seller may have
from vendors, contractors or servicing agents with respect to the
physical condition of the Property or any portion thereof or the
equipment located thereon.
(c) Purchaser shall have until the expiration of
Approval Period in which to approve or disapprove the matters
referred to in subparagraphs (a) and (b) above. Furthermore,
Purchaser shall have until the expiration of the Approval Period
in which to approve or disapprove of a market and leasing survey
of the Property and the surrounding leasing market (including its
own economic analysis of the feasibility of the Property for
Purchaser's particular use thereof). Purchaser's disapproval
shall be in writing and shall be delivered to Seller prior to the
expiration of the Approval Period. Failure to deliver such
written disapproval 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 tenants. From and after the date of
execution of this Agreement 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 or approve any
subleases without the prior written consent of Purchaser which
consent may be withheld in Purchaser's sole discretion. In
requesting such consent, Seller shall inform Purchaser in writing
of the amount, if any, proposed to be required to pay for, or any
allowance proposed to be given for, tenant improvements work, any
leasing commissions and fees, in connection with such lease and
any rent concessions. Also included in the request for consent,
shall be Seller's proposed draft of the lease or amendment
agreement. The failure of Purchaser to respond within five (5)
business days after written request for any such disapproval
shall be deemed to constitute approval. Seller shall not collect
in advance any rent or other sum due under any of the Tenant
Leases, except for collection of current rents no more than one
month in advance. Notwithstanding the foregoing, with respect to
any tenant improvements which Seller is currently obligated to
complete under any lease, and which are not completed as of
Closing, Seller shall assign any and all contracts relating to
the construction of such improvements to Purchaser and Purchaser
shall be responsible for completing such improvements after
Closing. Furthermore, Purchaser shall receive a credit to the
Purchase Price in an amount equal to Twenty-Five Dollars ($25.00)
per square foot of the premises under any applicable lease, less
any verified amounts actually expended by Seller (which have been
distributed to the appropriate contractors and for which invoices
and unconditional lien releases have been received) for such
improvements prior to Closing.
(b) Leasing Commissions; Tenant Improvements and Rent
Concessions. Seller covenants and agrees to be responsible 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 the Closing Date;
provided that 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 the
Effective Date; (i) that Purchaser, in its sole discretion,
approves and (ii) for which Purchaser has received fully
executed copies of such lease and other agreement with respect
thereto and to which any brokerage commissions are payable.
Failing such delivery and approval, Seller shall remain
responsible for all of costs and expenses including commissions.
(c) Insurance Policies. Seller shall keep all of the
insurance policies covering the Property (or substantially
equivalent coverage) in full force and effect between the date of
this Agreement and Closing (the "Insurance Policies").
(d) Service Contracts. Seller shall have the right to
renew or replace Service Contracts that expire prior to Closing
or to enter into new Service Contracts for emergency purposes if
deemed reasonably necessary by Seller for any term provided that
such Service Contracts are terminable by Seller or its successors
in interest upon not more than thirty (30) days' notice to the
service provider.
(d) Property Management. Seller shall maintain the
Property in the same manner as prior hereto pursuant to its
normal course of business (such maintenance obligations not
including extraordinary capital expenditures or expenditures not
incurred in such normal course of business), subject to
reasonable wear and tear and further subject to destruction by
casualty or other events beyond the reasonable control of Seller.
8. Conditions Precedent to Purchaser's Obligation to Close
Escrow. The obligation of Purchaser to consummate the
transactions contemplated hereby; is subject to the following
conditions, inserted for Purchaser's sole benefit and that may be
waived by Purchaser only in writing at its sole option. Said
conditions are as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Seller contained in
Paragraph 13 of this Agreement shall be true on the date of
Closing in all material respects as though such representations
and warranties were made on and as of such date.
(b) Delivery of Tenant Estoppels. Seller shall have
delivered to Purchaser estoppel letters (the "Tenant Estoppels")
from tenants representing 85% of the leased area and from all
tenants leasing more than 3,500 square feet in the Improvements
in substantially the form of Exhibit "D" attached hereto and
forming a part hereof, consistent in all material respects with
the information to be provided by Seller hereunder and certifying
inter alia to the effect that there are no defaults by landlord
under the lease known to tenant thereunder; that such lease is
unmodified except as may be set forth therein and in full force
and effect; that there are not defenses or offsets against the
landlord known to tenant thereunder; and that rental is current
and has not been paid more than one month in advance.
(c) Compliance with this Agreement. Seller shall have
performed and complied 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
Paragraph 4(b).
(e) Change in Condition. Subject to the provisions of
Paragraphs 15(b) and 15(c) hereof, there shall exist no damage,
destruction or condemnation of the Property prior to Closing.
9. Conditions Precedent to Seller's Obligation to Close
Escrow. The obligation of Seller to consummate the transactions
contemplated hereby is subject to the following conditions,
inserted for Seller's sole benefit and that may be waived solely
by Seller only in writing at its sole option. Said conditions
are as follows:
(a) Representations and Warranties True at Closing.
The representations and warranties of Purchaser contained in this
Agreement, or in any certificate or document signed by Purchaser
pursuant to the provisions hereof, shall be true on and as of
Closing in all material respects as though such representations
and warranties were made on and as of such date.
(b) Delivery of Purchase Price 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 performed, then
Purchaser may pursue such rights it may have against Seller and
the Property either at law or in equity.
(b) Remedy of Seller. THE PARTIES HERETO, BEFORE
ENTERING INTO THIS TRANSACTION, HAVE BEEN CONCERNED WITH THE FACT
THAT SUBSTANTIAL DAMAGES WILL BE SUFFERED BY SELLER IF PURCHASER
SHOULD WRONGFULLY FAIL TO PURCHASE THE PROPERTY. WITH THE
FLUCTUATION IN VALUE OF REAL PROPERTY, THE CURRENT AND HIGHLY
UNPREDICTABLE STATE OF THE ECONOMY, THE FLUCTUATING MONEY MARKET
FOR REAL ESTATE LOANS OF ALL TYPES, AND OTHER FACTORS THAT
DIRECTLY AFFECT THE VALUE AND MARKETABILITY OF THE PROPERTY, IT
IS REALIZED BY THE PARTIES THAT IT WOULD BE EXTREMELY DIFFICULT
AND IMPRACTICABLE, IF NOT IMPOSSIBLE, TO ASCERTAIN WITH ANY
DEGREE OF CERTAINTY PRIOR TO SIGNING THIS AGREEMENT THE AMOUNT OF
DAMAGES THAT WOULD BE SUFFERED BY SELLER IN THE EVENT OF
PURCHASER'S WRONGFUL FAILURE TO PURCHASE PROPERTY. THE PARTIES,
HAVING 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, 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/ JPS /s/ RSZ
Seller's Initials Purchaser's Initials
11. Closing Procedure.
(a) At least one business day prior to the Closing
Date, Purchaser shall have delivered to Escrow Agent counterpart
executed originals of the following documents and the following
sums of money required to be delivered by Purchaser hereunder:
(i) The Purchase Price 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 Tenant Lease
Assignment, and a signed counterpart of the Xxxx of Sale, each
defined below.
(b) At least one business day prior to the date of
Closing, Seller shall have delivered to Buyer Escrow Agent, as
applicable, counterpart executed originals (except with respect
to items (v) and (vi), in which case the actual items in Seller's
possession shall have been delivered) of the following documents:
(i) The Grant Deed in the form of Exhibit "E"
attached hereto and forming a part hereof;
(ii) A General Assignment and Xxxx of Sale for
Personal Property (the "Xxxx of Sale")it he form of Exhibit "F"
attached hereto covering the Personal Property;
(iii) A Tenant Lease Assignment substantially
in the form and substance of Exhibit "G" attached hereto and
forming a part hereof;
(iv) An original counterpart of each of the
Service Contracts, Leases and keys to the Property if in Seller's
possession or under its control;
(v) Notices to each of the tenants and occupants
of the Property of the transfer of the Property to Purchaser;
(vi) To the extent they are in Seller's
possession, a complete set of all plans, specifications and as-
built drawings, and all building permits, certificate of
occupancy, third-party soil reports, and environmental reports
and studies relating to the Improvements; and
(vii) 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) Upon delivery of the foregoing sums and documents,
Escrow Agent shall cause the Grant Deed to be recorded (by a
special recording if necessary) in the Official Records of Xxxx
County, California, and immediately to issue the Title Policy.
12. Costs and Prorations.
(a) Prorations. All revenues, income, receivables,
costs, expenses and payables of the Property shall be apportioned
equitably between the parties as of Closing on the basis of the
actual number of days in a particular month, and with respect to
the items enumerated below where a particular manner of
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 be prorated until received;
Purchaser shall include such delinquencies in its normal billing
and shall pursue the collection thereof in good faith under the
closing Date (but Purchaser shall not be required to litigate or
declare a default in any Tenant Lease). To the extent Purchaser
receives amounts on account of Tenant Leases on or after the
Closing Date, such payments shall be applied first toward then
current rent owed to Purchaser in connection with the applicable
Tenant Lease for which such payments are received, and any excess
monies received shall be applied toward the payment of any
delinquent rents, with Seller's share thereof being promptly
delivered to Seller. Purchaser may not waive any delinquent
rents nor modify a Tenant Lease so as to reduce or otherwise
affect amounts owed thereunder for any period in which Seller is
entitled to receive its share of charges or amounts without first
obtaining Seller's written consent. Seller hereby reserves the
right to pursue any remedy against any tenant owing delinquent
rents and any other amounts or other rights of any kind
respecting tenants who are no longer tenants of the Property as
of the Closing Date, Seller shall retain all rights relating
thereto.
(ii) Real estate and personal property taxes and
any special assessments, taking into consideration discounts for
the earliest permitted payment, based upon the latest previous
tax levies. Such items shall be reapportioned between Seller and
Purchaser if current tax rates differ from the latest previous
tax rates as soon as the same are known. Seller agrees that to
the extent any additional taxes, assessments or levies are
imposed, assessed or levied against the Property, or any portion
thereof, the Seller or the Purchaser at any time subsequent to
Closing but with reference to any period prior thereto during
Seller's ownership thereof, Seller shall promptly pay to
Purchaser an amount equal to such additional assessments or
levies. Similarly, if tax refunds become payable for periods
during Seller's ownership of the Property, such amounts (subject
to adjustments for the potential claims of occupancy tenants that
paid tax increases by way of rent escalations to Seller) shall be
promptly paid over to Seller. In the event that any assessments
on the Property are payable in installments, then the installment
for the current period shall be prorated (with Purchaser assuming
the obligation to pay any installment due after the Closing
Date). In no event shall Seller be charged with or be
responsible for any increase in the taxes on the Property
resulting from the sale of the Property or from any improvements
made or lease entered into on or after the Closing Date.
(iii) Transferable annual permits, licenses,
and/or inspection fees, if any, on the basis of the duration of
the same;
(iv) Security Deposits, plus accrued interest, if
any, payable thereon to tenants, and any other deposits and
prepaid rent, shall be credited (or assigned) to Purchaser;
(v) Utility charges levied against Seller or the
Property, and Purchaser shall transfer all such utility services
to its name and account immediately upon Closing;
(vi) Service Contracts on the basis of the charge
or premium for the period involved;
(vii) Tenant improvement costs and leasing
commissions for leases signed after the Effective Date 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
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 CTLA standard
coverage portion of the Title Policy that is attributable to the
required ALTA Owner's coverage, the cost of title endorsements
deemed reasonably necessary to satisfy a specific title exception
objection by Purchaser);
(2) Documentary transfer tax (County and
City) imposed on the conveyance of title to the Property of
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 fault 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
Subsection (b))i)(1) above and the cost of the ALTA Survey; and
(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 consulting fees, and other incidental expenses in
connection with this transaction shall be borne by the party
incurring same.
13. Representations, Warranties and Covenants of Seller.
(a) Seller hereby makes the following representations,
warranties and covenants, each of which is deemed to be material
and each of which is stated by Seller to be true and correct on
the date hereof and on the Closing Date and each of which shall
survive the Closing:
(i) Seller has no knowledge of any:
(1) existing latent defects or seismic
conditions concerning the Real Property or materially incorrect
income or expense figures in any financial statements prepared by
or for Seller and delivered to Purchaser regarding the Property;
(2) any 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 Seller 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;
(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;
(5) thing that would suggest any portion of
the Property having ever been used by Seller or any tenant of any
portion of ht Property during Seller's ownership thereof as a
waste storage or disposal site or gasoline station. Without
limiting the other provisions of this Agreement, Seller shall
reasonably cooperate with Purchaser's investigation of matters
relating to the foregoing provisions of this paragraph and to
provide access to and copies of any data and/or documents dealing
with potentially Hazardous Substances used at the Property and
any disposal practices followed in accordance with, and subject
to the provisions of, Paragraph 6 hereof. Seller agrees that
Purchaser may make inquiries of governmental agencies regarding
such matters, without liability for the outcome of such
discussions. For the purposes of this Agreement, "Hazardous
Substances" shall mean (A) substances defined as "hazardous
substances" in (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.
9601 et seq.), or (ii) the Resource Conservation and Recovery
Act of 1976 (42 U.S.C. 6901 et seq.), together with the
regulations enacted pursuant to such acts, and (B) those
substances defined as "hazardous wastes" in 25117 of the
California Health and Safety Code or as "hazardous substances" in
25316 of the California Health and Safety Code together with
the regulations enacted pursuant to such statutes.
(ii) The Tenant Leases and Service Contracts and
any other agreements, matters and things to be submitted to
Purchaser by Seller for approval pursuant to Paragraph 5 above,
or otherwise, shall be true, correct and complete copies thereof
as of the date of submission thereof, and 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 lease
matters which shall be confirmed as correct in any tenant
estoppel certificate delivered to Purchaser as provided in this
Agreement;
(iii) The operating financial information
prepared by Seller and delivered to Purchaser with respect to the
Property, consisting of Statements of Operations for the calendar
years ended December 31, 1995 and 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 years ended December 31, 1995
and 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, canceled checks and any other
accounting documents and information reasonably requested; and
(iv) 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 the property manager for the Real Property, Xxxxx Xxxxxx, the
Leasing Agent for the Real Property, the chief engineer for the
Real Property and Mr. Xxxxx Xxxxx.
(b) Notwithstanding anything contained in
Paragraphs 5(a) or 13(a) to the contrary, Seller is neither
responsible nor liable for any representation or warranty, either
expressed or implied, guaranty, promise or other information
pertaining to the Property or the Improvements made or furnished
to Purchaser by any broker representing or purporting to
represent Seller.
14. Representations and Warranties of Purchaser. Purchaser
hereby makes the following representations and warranties, each
of which is deemed to be material and each of which is stated by
Purchaser to be true and correct on the date hereof:
(a) Purchaser has full legal power and authority to
enter into and perform this Agreement in accordance with its
terms. This Agreement constitutes the valid and binding
obligation of Purchaser, enforceable in accordance with its
terms, except as such enforcement may be affected by bankruptcy,
insolvency and other laws affecting the rights of creditors
generally. The execution, delivery and performance of this
Agreement and all documents in connection therewith are not in
contravention of or in conflict with any agreement or undertaking
to which Purchaser is a party or by which Purchaser may be bound
or affected;
(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 Approved 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 ht 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, and 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 One Hundred Fifty Thousand Dollars ($150,000)
or more to repair or if any uninsured loss or casualty occurs
that would cost One Hundred Fifty Thousand Dollars ($150,000) or
more to repair, either Seller or Purchaser may respectively elect
to terminate this Agreement by written notice to the other within
fifteen days after notice of such event, or at Closing, whichever
is earlier. If neither Seller nor Purchaser so elects to
terminate its obligations under this Agreement, or if the loss or
casualty would cost less than One Hundred Fifty Thousand Dollars
($150,000) to repair, the Closing shall take place as provided
herein and Purchaser shall receive an assignment of Seller's
rights to insurance proceeds with respect to any unrepaired
damage (including any rental loss proceeds with respect to any
unrepaired damage (including any rental loss proceeds for periods
after the Closing), loss or casualty in question. Seller shall
retain all interest in and to the insurance proceeds that may be
payable to Seller on account of repaired and completed damage,
but Seller shall have no obligation of repair or replacement.
(c) Condemnation of Property Prior to Closing. In the
event that the Property or any part thereof becomes the subject
of a condemnation proceeding other than of a minor immaterial
nature prior to Closing, Seller agrees to immediately advise
Purchaser thereof. In the vent 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 Purchaser 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 ASU, Inc. ("Broker") or incur any liability,
contingent or otherwise, for brokerage or finder's fees or
agent's commissions or other like payments in connection with
this Agreement, or the transactions contemplated hereby. Seller
agrees to pay at Closing to Broker the commission due it in
connection with the within transaction and Seller and hereby
agrees to indemnify Purchaser against and hold Purchaser harmless
from any and all claims, demands, causes of action or damages
resulting from any breach of this warranty. Purchaser hereby
warrants that Purchaser did not negotiate through any broker,
agent, finder, affiliate or other third party other than Broker
or incur any liability, contingent or otherwise, for any such
brokerage or finder's fees, agent's commissions or other like
payments, in connection with this Agreement, and hereby agrees to
indemnify Seller against and hold Seller harmless from any and
all claims, demands, causes of action or damages resulting from
any breach of 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 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 agreeing to be
bound by all consents and approvals theretofore given or deemed
to have been given by Purchaser, and such assignment or
nomination shall not relieve Purchaser of its obligations
hereunder.
(h) Waivers, Amendments and Modifications of
Provisions. Waivers, amendments or modifications of any term or
condition of this agreement must be in writing signed by the
party against whom such waiver is sought to be enforced. No
waiver by any party of any breach hereunder shall be deemed a
waiver of any other or subsequent breach.
(i) Indemnification. Seller shall indemnify Purchaser
against and hold Purchaser harmless from any and all loss, cost,
damage, claim, liability or expense, including court costs and
reasonable attorneys' fees, for (1) any of the matters and to the
extent to be indemnified under the Assignment of Leases or the
Assignment of Service Contracts; (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 Seller (including any personal injury or property
damage or claim of personal injury or property damage of any kind
whatsoever, including death, to property or persons, including
employees of Seller) unless caused by Purchaser, resulting from
such tort occasioned in or about the Property prior to Closing.
Purchaser shall indemnify Seller against and hold Seller harmless
from any and all loss, damage, claim of damage, liability or
expense, including court costs and reasonable attorneys' fees,
for (1) any of the matters and to the extent to be indemnified
under the Assignment of Leases or the Assignment of Service
Contracts; (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 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
(b) on or subsequent to Closing. These covenants shall survive
Closing.
16. Miscellaneous Provisions.
(a) Successors and Assigns. Subject to the provisions
hereof, the terms and provisions hereof shall be binding upon and
inure to the benefit of the successors and assigns of the parties
hereto.
(b) Meaning of Terms. When necessary herein, all
terms used in the singular shall apply to the plural and vice
versa; and all terms used in the masculine shall apply to the
neuter and feminine genders.
(c) Entire Agreement. This Agreement is the entire
agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements between the
parties hereto with respect thereto. No claim of waiver,
modification, consent of acquiescence with respect to any of the
provisions of this Agreement shall be made against either party,
except on the basis of a written instrument executed by or on
behalf of such party.
(d) Governing Law. This Agreement is to be governed
by and construed in accordance with the internal laws of the
State of California.
(e) Paragraph Headings. The headings of the several
paragraphs of this Agreement are inserted solely for convenience
of reference and are not a part of and are not intended to
govern, limit or aid in the construction of any term or provision
hereof.
(f) Attorneys' Fees. If either Seller or Purchaser
shall obtain legal counsel and bring an action or proceeding
against the other by reason of 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 following
addresses, and shall be effective immediately upon delivery:
Seller: Xxxxxxxxx Investment Group, Inc.
00000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Xxxx Xxxxxxxx, Esq.
00000 X. Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Purchaser: Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000 Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
With a copy to: Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Escrow Agent: First American Title Company
0000 Xxxxxxxxxx Xxxxxx Xxxxx 000
Xxxxxxxxxxx Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxx
Facsimile No.: (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 Agreement
or the application thereof to any person or circumstance shall be
invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provision 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 and other
entity, other than the parties hereto, their successors and
permitted assigns, any right, remedy or claim under or with
respect to this Agreement or any provision hereof.
(k) Confidentiality. Seller and Purchaser agree that
it is in both of their best interests to keep this Agreement and
all information concerning the Property confidential until
Closing. Seller and Purchaser each agrees that neither shall
take any action nor conduct itself in any fashion that would
disclose to third parties unrelated to Purchaser's acquisition or
intended ownership and operation of the Property, any aspect of
the contemplated transaction. After Closing, neither party shall
make any public announcement of the transaction that has not been
approved in advance and in writing by the other party.
(l) 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 designated in
writing by Seller. Upon identification of Intermediary,
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 as "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.
(o) Facsimile Signatures. Purchaser and Seller 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, the parties hereto have executed this
Agreement the day and year first hereinabove written.
Seller: XXXXXXXXX INVESTMENT GROUP, INC.
a California corporation
By:/s/ Xxxx X. Shauerman
Xxxx X. Xxxxxxxxxx
President
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:
FIRST AMERICAN TITLE COMPANY
By:/s/ Xxxxx Xxx
Name: Xxxxx Xxx
Title: Escrow Officer
