PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS
To: First American Title Insurance Company Escrow No. 4971189
of Los Angeles ("Escrow Agent") Title Order Nos. 9722438-8, 9722417-8
000 Xxxxx Xxxxxxx Xxxxxx Title Officer: Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS ("Agreement") is made and entered into and is
effective as of the 12th day of November, 1997 (the "Effective
Date"), by and between THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK, a New York mutual life insurance company ("Seller"), and
ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
("Buyer").
Recitals
1. Seller is the owner of the Property (as defined below).
2. Seller has agreed to sell the Property to Buyer, and Buyer
has agreed to purchase the Property from Seller, such purchase
and sale being made upon and subject to the terms and conditions
set forth in this Agreement.
Agreement
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual covenants set forth in this Agreement, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer and Seller hereby agree as set
forth below.
2. Purchase and Sale of the Property. Seller agrees to sell,
assign, convey, and transfer to Buyer all of Seller's right,
title and interest in and to the following real and personal
property described in subsections (a) through (g) below
(collectively referred to herein as the "Property"), and Buyer
hereby agrees to purchase and accept the Property, and assume the
obligations in connection therewith, subject to and in accordance
with the terms and conditions contained in this Agreement:
(1) Land. Subject to general and special real estate taxes and
assessments, and all matters of record or apparent from an
inspection or survey, Seller's interest in that certain real
property located at 000 Xxxx Xxxxxxxx Xxxxxx, in the City of
Glendale, County of Los Angeles, State of California (the
AGlendale Land@), and 00000 Xxxxxxxx Xxxx., xx xxx Xxxx xx Xxx
Xxxxxxx, Xxxxxx of Los Angeles, State of California (the
"Wilshire Land"), which real property is more particularly
described, respectively, on Exhibit "A-1" and Exhibit "A-2"
(collectively, the "Land").
(2) Improvements. Those certain fixtures and improvements
located on the Land and described on Exhibit "B-1" and Exhibit "B-
2" attached hereto (collectively, the "Improvements"), including
several commercial, retail and/or industrial buildings, parking
structures, driveways, hardscaping, and related improvements,
together with fixtures attached thereto, it being understood and
agreed, however, that Buyer shall have no right, title or
interest in or to any of such fixtures and improvements which are
the property of the tenants of the Property (the "Tenants") under
the Leases (as defined below). The Glendale Land and
Improvements thereon may be referred to herein as the Glendale
Property, and the Wilshire Land and the Improvements thereon may
be referred to as the Wilshire Property. The Land and the
Improvements may be collectively referred to herein as the "Real
Property."
(3) Personalty. That certain tangible personal property of
Seller which is located on or in the Land or the Improvements and
which is described on Exhibits "B-1" and Exhibit "B-2" attached
hereto (collectively, the "Personalty"), it being understood and
agreed, however, that Buyer shall have no right, title or
interest in or to (and the "Personalty" shall not include) (i)
any personal property on the Improvements which is the personal
property of the Tenants pursuant to the Leases, or (ii) any lap-
top computers which are the personal property of Seller and are
located in the on-site offices of the Real Property.
(4) Appurtenances. All of Seller's rights, privileges and
easements appurtenant to the Land, all development rights and air
rights relating to the Land and any and all easements,
rights-of-way and other appurtenances used in connection with the
beneficial use and enjoyment of the Land, but excluding all
water, water rights and water stock, and excluding minerals and
mineral rights of every kind (including oil, gas and other
hydrocarbon substances) on or under the Land.
(5) Leases. Seller's interest in all leases, subleases,
licenses, concessions, and other forms of agreement in effect as
of the Effective Date or entered into after the Effective Date,
and remaining in effect as of the Closing Date (as defined
below), granting to any party or parties the right of use or
occupancy of any portion of the Land and/or Improvements, and all
renewals, modifications, amendments, guarantees, and other
agreements affecting the same (together, the "Leases").
(6) Awards. All right, title and interest of Seller in and to
any unpaid awards for damages to the Land and/or Improvements
resulting from any taking in eminent domain or by reason of
change of grade of any street accruing after closing of the
purchase and sale pursuant to this Agreement.
(7) Intangible Property. Except the name of Seller or
affiliated entities, all of the interest of Seller in any
intangible property now or hereafter owned by Seller and used or
designed for use in connection with the Land, Improvements and/or
Personalty, and any contract or lease rights, licenses, permits,
certificates of occupancy, franchises, agreements, utility
contracts and agreements (including sewer and water line
agreements), telephone listings and numbers used by Seller at the
Real Property, unexpired claims, signs, trade names, logos,
trademarks and service marks arising from or related to the Real
Property (other than Seller's name or marks), warranties,
guaranties and sureties belonging to Seller, or other rights
relating to the ownership, development, construction, design, use
and operation of the Land and/or Improvements (together,
"Intangible Property"), so long as and to the extent that said
Intangible Property may be transferred or assigned, and is not
specifically excluded from the Xxxx of Sale (as defined below).
Notwithstanding anything to the contrary herein, Intangible
Property does not include (i) any refunds of taxes or assessments
which were paid by Seller or Seller's predecessor in interest,
prior to close of the purchase and sale pursuant hereto, or of
insurance premiums paid by Seller or Seller's predecessor-in-
interest and attributable to the period prior to the Closing Date
(without regard to when such refunds are received), (ii)
condemnation or other awards which represent refunds of amounts
paid by Seller or any predecessor-in-interest prior to the
Closing Date or awards for property damage (other than amounts to
be credited to Buyer pursuant to Section 13 of this Agreement) or
otherwise relating to the Property, (iii) any claims of Seller
existing as of the Closing Date against Tenants for delinquent
rents, to the extent not subsequently paid or credited to Seller,
or (iv) claims of Seller made pursuant to or arising in
connection with the litigation matters set forth on Exhibit "C"
attached hereto (the "Litigation Claims"); provided, however,
that Litigation Claims do not include any rents or other income
relating to the period after the Closing Date with respect to
Leases as to which the Tenant continues to occupy the leased
premises after the Closing Date.
3. Opening of Escrow and Deposit.
(1) General Instructions. First American Title Insurance
Company of Los Angeles is hereby designated as escrow holder
("Escrow Agent"), to act in accordance with this Agreement.
Escrow Agent's general conditions or provisions, which are
attached hereto as Exhibit "D", are incorporated by reference
herein (with the changes noted thereon); provided, however, that
in the event of any inconsistency between Exhibit "D" and any
other provisions of this Agreement, the provisions of this
Agreement shall control over the provisions of Exhibit "D."
Buyer and Seller shall each execute, deliver and be bound by such
further escrow instructions or other instruments as may be
reasonably requested by the other party or by Escrow Agent from
time to time, so long as the same are consistent with this
Agreement, and upon execution thereof by both Seller and Buyer,
such escrow instructions shall be deemed to be a material part of
this Agreement. Escrow Agent needs to be concerned only with
those provisions of this Agreement that instruct it to perform
specific acts or with respect to which escrow holders generally
and reasonably would be expected to act. Escrow Agent shall
comply, but shall have no liability whatsoever for complying,
with the unilateral instructions of only one party without the
consent of the other party hereto if expressly required to do so
in this Agreement.
(2) Opening of Escrow. Concurrently with its execution of this
Agreement, Buyer shall open an escrow with Escrow Agent (the
"Escrow") by delivering to Escrow (with a copy to Seller), an
executed copy of this Agreement, and a deposit in the form of
immediately available funds in the amount of Five Hundred
Thousand Dollars ($500,000.00) (such deposit, together with all
interest accrued thereon, is collectively referred to herein as
the "Initial Deposit"). Escrow Agent shall retain possession of
the Initial Deposit until delivery or return thereof is permitted
or required under this Agreement. The Initial Deposit shall be
deposited by Escrow Agent in an interest-bearing account with the
interest thereon to be disbursed with the Deposit in accordance
with the provisions hereof.
(3) Deposits. On or before 9:00 a.m. Pacific Standard Time
("PST") of the first business day after the date of expiration of
the Investigation Period (as defined below) without written
cancellation of the Escrow by Buyer, Buyer shall initiate a bank
wire to Escrow Agent in the form of immediately available funds,
in the additional amount of Five Hundred Thousand Dollars
($500,000.00) (such deposit, together with all interest accrued
thereon while in Escrow, is collectively referred to herein as
the "Additional Deposit," and together with the Initial Deposit,
the "Deposit"). Buyer understands, acknowledges and agrees that,
upon deposit of the Additional Deposit into Escrow, the entire
Deposit shall immediately become non-refundable (except upon (i)
Default (as defined below) by Seller or (ii) failure to occur of
any of the conditions set forth in subsection 7(a) below other
than as a result of the conduct or omissions of Buyer), shall
immediately be deemed to have been fully earned by Seller, and
shall be immediately delivered by Escrow Agent to Seller. If
Buyer provides Notice (as defined below) to Seller, during the
Investigation Period, of Buyer's cancellation of Escrow as a
result of information obtained by Buyer during the Investigation
Period, then Escrow Agent shall return the Initial Deposit to
Buyer, net only of Buyer's share of the costs and expenses of
Escrow and title. If the purchase and sale shall close pursuant
to this Agreement, the Deposit shall be credited against the
Purchase Price (as defined below) at the close of Escrow.
(4) Closing. The Escrow shall close, as evidenced by
recordation of a Grant Deed in accordance herewith (the
"Closing"), on a date mutually agreed to by the parties, but in
all events on or before Friday, December 5, 1997 at 5:00 p.m. PST
(the "Outside Closing Date"). If Buyer does not cancel the
Escrow during the Investigation Period as herein permitted, and
Escrow thereafter fails to close on or before the expiration of
the Outside Closing Date, for any reason, then (i) this Agreement
shall terminate and, except for provisions which expressly
survive a termination, neither party shall have any further
obligation to the other hereunder; and (ii) Escrow shall be
canceled and the Deposit shall be distributed to Seller;
provided, however, that if Escrow fails to close on or before the
Outside Closing Date due solely to a default by Seller or to a
failure to satisfy any of the conditions set forth in subsection
7(a) below other than as a result of the conduct or omission of
Buyer, then the Deposit shall be distributed to Buyer.
4. Purchase Price. The "Purchase Price" for the Property shall
be Thirty Million Eight Hundred Thousand Dollars ($30,800,000.00)
payable in immediately available funds upon Closing, and
otherwise in accordance with the terms and conditions contained
in this Agreement. Buyer understands and agrees that Buyer shall
not have any right to purchase either the Glendale Property or
the Wilshire Property unless Buyer shall concurrently purchase
both such properties pursuant to this Agreement.
5. Prorations. The following items shall be prorated as of the
date of Closing (the "Closing Date") and such prorations shall be
reflected on the settlement statements prepared by Escrow Agent
on the Closing Date and shall serve to adjust the Purchase Price.
Such prorations shall be made on the basis of a 365-day year, as
of 12:01 a.m. on the Closing Date.
(1) Rents.
(1) All rentals, receipts and other revenues from the Property,
including base rents, percentage rents and additional rents
(other than those referenced in Section 4(b) below) and the last
sentence of this Section 4(a)(i) (collectively, "Rents"), which
have been actually received by Seller and which are payments
under Leases for the period from and after the Closing Date,
shall be credited to Buyer, and Buyer shall be entitled to
collect all Rents which are delinquent or due on or after the
Closing Date. Notwithstanding the foregoing, and the other
provisions of this Section 4, Seller shall retain to the extent
received by Seller, and Buyer shall pay to Seller, if, when and
to the extent received by Buyer (A) any Rents paid by Medical
Data Exchange, for all or any portion of the months of November
and December, 1997, which Rent such Tenant has indicated it will
now agree to pay, pursuant to a Lease amendment to be executed
(in lieu of free rent previously attributable to Tenant's
occupancy during such months in 1997), and (B) any amounts paid
by Medical Data Exchange as reimbursement for tenant improvement
costs, to the extent that the actual cost of tenant improvements
exceeds the amount estimated by Seller for such work
(approximately $124,064.00).
(2) All Rents collected by Buyer after the Closing Date with
respect to each Lease for which Rent payments are delinquent at
Closing by not more than thirty (30) days, including without
limitation Rents and other amounts collected by Buyer pursuant to
the last sentence of Section 4(a)(i) above, and subject to
Seller=s retained right to xxx therefor with respect to
delinquent Rents accruing prior to the Closing Date (or with
respect to Medical Data Exchange, prior to December 31, 1997), to
the extent not paid or credited to Seller, shall be credited and
paid by Buyer as follows: first to Seller for amounts due before
the Closing Date, but unpaid prior to the Closing Date, and
second to Buyer;
(3) All Rents collected by Buyer after the Closing Date with
respect to each Lease for which Rent payments are delinquent at
Closing by more than thirty (30) days shall (subject to Seller's
retained right to xxx therefor with respect to delinquent Rents
accruing prior to the Closing Date, to the extent not paid or
credited to Seller) be credited and paid by Buyer as follows:
first to Buyer in an amount equal to amounts due as of the date
of collection but after the Closing Date, and second to Seller in
an amount equal to amounts due prior to the Closing Date and
unpaid as of the Closing Date;
(4) Notwithstanding the foregoing, with respect to any Lease for
which Rent is paid in arrears, Rent received by Buyer after the
Closing shall be credited to the Rent in arrears for the previous
month before it is credited to current month or advance Rents;
(5) Any delinquent Rents which, as so credited, relate in whole
or part to any period prior to the Closing Date shall be remitted
by Buyer to Seller when collected by Buyer (net only of Buyer's
proportionate share of any reasonable out-of-pocket collection
expenses actually incurred by Buyer); and
(6) In addition to the foregoing, any tenant improvements,
leasing commissions or other monetary obligations of the landlord
under Leases entered into after the Effective Date pursuant to
Section 6(c) below, which obligations have been paid by Seller,
shall be credited to Seller.
(2) Lease Operating Cost Pass-Throughs.
(1) All operating cost pass-throughs for taxes, utilities,
insurance, common area maintenance charges or other current
operating costs and cost of living escalation amounts ("CAM
Charges") (A) paid by Tenants and which have been actually
received by Seller and which are allocable to the period from and
after the Closing Date, shall be credited to Buyer, and (B)
payable by Tenants but unpaid as of the Closing Date and
attributable to the period before the Closing Date, shall
(subject to Seller=s retained right to xxx Tenants for such
amounts) be subject to collection by Buyer after the Closing Date
and upon such collection shall be credited and paid by Buyer as
set forth herein below.
(2) All CAM Charges collected by Buyer after the Closing Date
with respect to each Lease for which such payments are delinquent
at Closing by not more than thirty (30) days shall (subject to
Seller's retained right to xxx therefor with respect to
delinquent CAM Charges accruing prior to the Closing Date, to the
extent not paid or credited to Seller) be credited and paid by
Buyer as follows: first to Seller for amounts due before the
Closing Date, but unpaid prior to the Closing Date, and second to
Buyer;
(3) All CAM Charges collected by Buyer after the Closing Date
with respect to each Lease for which such payments are delinquent
at Closing by more than thirty (30) days shall (subject to
Seller's retained right to xxx therefor with respect to
delinquent CAM Charges accruing prior to the Closing Date, to the
extent not paid or credited to Seller) be credited and paid by
Buyer as follows: first to Buyer in an amount equal to amounts
due as of the date of collection but after the Closing Date, and
second to Seller in an amount equal to amounts due prior to the
Closing Date and unpaid as of the Closing Date; and
(4) With respect to any Lease for which CAM Charges are paid in
arrears, CAM Charges received by Buyer after the Closing under
such Lease shall be credited to the CAM Charges in arrears before
the same are credited to current month or advance CAM Charges
under such Lease. Any delinquent CAM Charges which, as so
credited, relate in whole or part to any period prior to the
Closing Date shall be remitted by Buyer to Seller when collected
by Buyer (net only of Buyer's proportionate share of any
reasonable out-of-pocket collection expenses actually incurred by
Buyer).
(3) Property Taxes. All real property taxes for the current
(1997-98) tax year which are due and payable on or before the
Closing Date and all real property taxes for years prior thereto
shall be paid by Seller on or before the Closing Date, and
prorated as of the Closing Date for the 1997-98 tax year (on the
basis of the portion of the 1997-98 tax year which falls after
the Closing Date, and based upon the most recent assessment and
levy). Any adjustments to such taxes for the 1997-98 tax year
(with the exception of any readjustment as a result of the sale
contemplated hereby) shall be adjusted between Seller and Buyer
promptly upon receipt by Buyer of the actual bills for such
taxes. Seller shall be entitled to retain for its own account
any and all refunds (whenever received) of taxes and assessments
paid by Seller prior to the Closing Date, including any of the
same that shall result from pending property tax appeals, if any,
relating to the Property or the personalty associated therewith.
(4) Assessments. All assessments, special assessments and other
like charges imposed against the Property, or any part thereof,
by reason of roadways, utility lines, streets, alleys or other
improvements in existence, under construction or planned and
payable on or prior to the Closing Date shall be prorated to such
date. All such assessments, special assessments and other
charges affecting the Property and payable after the Closing Date
shall be the sole responsibility of Buyer. All pending refunds
of assessments paid by Seller prior to the Closing Date, if any,
shall be delivered to and retained by Seller.
(5) Security Deposits. All security and other deposits, if any,
including any accrued interest thereon if such interest is
required to be remitted to Tenants pursuant to their respective
Leases, received by Seller on or before the Closing Date on
behalf of any Tenants under any Leases (and not subject to
current or past application against Lease obligations pursuant to
the Leases), shall be credited to Buyer, and Escrow shall deliver
a notice to the Tenants, in the form of Exhibit "E-1" and Exhibit
"E-2" attached hereto, advising Tenants that: (i) Buyer has
purchased the Property, (ii) the security deposit, if any, has
been delivered to Buyer in connection with such sale, and (iii)
Seller is relieved of any and all liability for any such security
deposit.
(6) Utility Charges and Other Expenses. Prepaid water, sewer,
and other utility charges and similar Property expenses allocable
to the period from and after the Closing Date shall be credited
to Seller, and accrued water, sewer, and other utility charges
and similar Property expenses shall be credited to Buyer. After
the Closing, outside of Escrow, the parties shall make any
readjustments necessary based upon a final billing obtained by
Buyer or actual subsequent readings of utility meters respecting
that billing period in which the Closing occurred. All utility
security deposits, if any, shall either be retained by Seller
without adjustment or, at Seller's option, shall be delivered to
Buyer and credited to Seller.
(7) Service Contracts. Prepaid charges in connection with any
Service Contracts (as defined below) which Buyer assumes pursuant
hereto, and any licenses or permits issued in connection with the
Property (to the extent transferrable) shall be credited to
Seller. Accrued charges payable for the period up to the Closing
Date and unpaid as of the Closing in connection with such Service
Contracts, licenses or permits (to the extent transferrable)
shall be credited to Buyer.
(8) Tenant Allowances. Amounts due from Seller under the Leases
(other than Leases or Lease modifications approved by Buyer under
Section 6), but unpaid as of the Closing Date, shall be credited
to Buyer on the Closing Date, and at Closing, Buyer shall assume
the liability for payment thereof, to pay for:
(1) tenant improvements commenced prior to the Closing Date;
(2) Leasing commissions (excluding any commissions which may be
due after the Effective Date with respect to options, extensions,
expansions or renewals); and
(3) with respect to a Lease for Suite 410 at the Glendale
Property, which Seller anticipated leasing prior to the Effective
Date, Buyer shall be credited for an amount equal to (x)
$68,588.10 for leasing commissions, (y) $163,305.00 for tenant
improvements to be performed prior to the commencement of such
Lease, irrespective of when or whether such improvements
commence, and (z) $114,313.50, for an amount equal to six months
of rent which would have been due under such Lease, but offset by
an amount equal to $38,104.50 if Suite 710 at the Glendale
Property is leased prior to the Closing Date; each of which such
credits compensate Buyer for amounts which would have been the
obligation of Seller had such Lease been entered into prior to
the Effective Date.
Seller shall receive a credit for all amounts paid by Seller for
leasing commissions and tenant improvements pursuant to Section 6
below (including without limitation the Lease to MSI
Entertainment, Inc. described therein). Seller shall also
deliver to Buyer any tenant improvement funds held by Seller as
of the Closing Date with respect to uncompleted tenant
improvements or which are subject to refund to Tenants and Buyer
shall assume Seller's liability to provide such tenant
improvements and make such refunds. In addition to the
foregoing, an amount equal to the value of "free rent," if any,
specified in the Leases for the one (1) year period commencing on
the Closing Date (exclusive of any Leases or Lease modifications
approved by Buyer under Section 6), to the extent the existence
of such free rent was not disclosed to Buyer in the offering
circular or pursuant to other materials delivered to Buyer on or
before the Effective Date, shall be credited to Buyer on the
Closing Date, by multiplying the number of months of free rent
with respect to each particular Lease during the one (1) year
period following the Closing Date, by the base monthly rental
rate payable under that Lease in the first month in which rent is
payable. On or before 9:00 a.m. PST on November 14, 1997, Buyer
shall deliver to Seller a list of Leases as to which free rent is
due within the specified period and the amounts of free rent due
as to each such Lease (the "Free Rent List"). Seller shall
deliver to Buyer a Notice specifying any exceptions (based upon
correctness or prior disclosure to Buyer) on or before 9:00 a.m.
PST on November 21, 1997. If Seller's Notice is not satisfactory
to Buyer, Buyer shall cancel the Escrow in accordance with
Section 5(c) or proceed to Close and waive any objections to
Seller's Notice. If Seller fails to deliver timely Notice, the
Free Rent List shall be deemed to be correct.
If any of the prorations described in this Section 4 cannot
be calculated accurately on the Closing Date, then the same shall
be calculated as soon as reasonably possible thereafter and
either party owing the other party a sum of money based on such
subsequent prorations shall promptly pay said sum to the other
party. If either party owing funds to the other after the
Closing Date pursuant to this Section does not remit them within
thirty (30) days after demand therefor (which demand shall also
include invoices or other appropriate documentation in support
thereof), such funds shall thereafter bear interest at a "Default
Rate" equal to five percent (5%) above the highest rate as
announced from time to time by Chase Manhattan Bank, N.A. at its
principal office in New York City as its "prime rate," as the
same shall fluctuate from day to day, or, if lesser, the maximum
rate permitted by law.
6. Due Diligence Investigation Period.
(1) Due Diligence Materials. Within seven (7) days after the
opening of Escrow (the "Diligence Date"), without any
representation or warranty as to accuracy or completeness, and
only to the extent within the physical possession of Seller,
Seller shall either (at Seller's option) deliver to Buyer or make
available for inspection (and copying) by Buyer at Buyer's
expense, at the Property and/or the offices of Seller (except
that the items listed in (i) below shall be delivered by Seller
to Buyer), the following items relating to the Property:
(1) Preliminary title reports or commitments issued by First
American Title Insurance Company ("Title Company"), dated within
ninety (90) days of the Effective Date (the "Preliminary
Report"), relating to the Glendale Property and the Wilshire
Property which Buyer may use to obtain, directly from the Title
Company, copies of those documents referenced as exceptions in
the Preliminary Report, so that, to the extent Buyer wishes to do
so, it shall be able to review all such documents;
(2) The current Tenants' Leases, including any and all
amendments thereto; Service Contracts; maintenance records;
copies of current utility bills (to the extent received); copies
of architectural plans and "as-built" drawings (if any) for the
buildings (which Buyer understands do not necessarily reflect the
present state of the buildings); building permits, certificates
of occupancy, and licenses pertaining to the Property to the
extent they remain in effect; copies of any written warranties
relating to the Personalty; copies of insurance claim reports, if
any; and Seller's Property operating statements for calendar
years 1995 and 1996 and monthly operating statements for January
1997 through September 1997;
(3) Copies of all real property tax and assessment bills
received by Seller for the 1996-97 and 1997-98 tax years;
(4) That certain Phase I Environmental Survey prepared by
Xxxxxxxx & Xxxxx dated August 3, 1993 and a Phase II report
prepared by the same consultant dated August 6, 1993, both with
respect to the Glendale Property;
(5) That certain Americans With Disabilities Act study prepared
by Xxxxxxxxx and Company dated February 4, 1994, and that certain
Property Conditions Assessment Report study prepared by Building
Diagnostic Group dated May 30, 1995, both with respect to the
Glendale Property;
(6) A Seismic Study dated August 2, 1994, and prepared by
Englekirk & Xxxxx, with respect to the Wilshire Property;
(7) An Environmental Site Assessment dated March 1994, and
prepared by Xxxxxxxx & Xxxxx, with respect to the Wilshire
Property;
(8) A Seismic Report dated September 1994, and prepared by
Xxxxxxxx & Xxxxx, with respect to the Wilshire Property;
(9) Seismic Retrofit Plans dated November 1994, and prepared by
Englekirk & Xxxxx, with respect to the Wilshire Property; and
(10) A Letter dated September 15, 1997 from Englekirk & Xxxxx,
with respect to the Wilshire Property.
(2) ALTA Survey. In the event that Buyer determines that it
desires to obtain an American Land Title Association survey with
respect to the Property (the "Survey"), Buyer may obtain such a
Survey during the Investigation Period (as defined below), at
Buyer's sole cost and expense; provided, however, that if Buyer
fails to obtain the Survey prior to the end of the Investigation
Period, Buyer must either cancel Escrow or proceed to purchase
the Property based solely on Title Company's agreement to provide
standard title insurance coverage (with exceptions for any items
a survey would disclose and for any items disclosed by a Survey
obtained after the end of the Investigation Period). Without
limiting the generality of the foregoing, Buyer acknowledges and
agrees that Buyer's failure to obtain a Survey prior to the end
of the Investigation Period shall not be deemed a default
hereunder or a failure of a condition to Buyer's obligation to
Close, but Buyer's delay in obtaining the Survey shall not extend
the Investigation Period or the Outside Closing Date, and, to the
extent any items are disclosed to Buyer in a Survey delivered to
Buyer after the end of the Investigation Period, such items shall
be deemed "Permitted Exceptions" (as defined below).
(3) Investigation Period. Beginning upon the date of Buyer's
and Seller's execution and delivery of the Entry Permit (as
defined below), and terminating as of 12:00 noon PST on Monday,
November 24, 1997 (the "Investigation Period"), Buyer may,
subject to the limitations set forth in this Agreement and in the
Entry Permit, investigate any and all aspects of the Property.
To the extent Buyer is entitled to investigate particular matters
during the Investigation Period, Seller, at no cost or expense to
Seller, shall reasonably cooperate with Buyer to the extent
Seller's cooperation is required for Buyer to obtain public
information pertaining to the Property from governmental
agencies. If, in Buyer's sole discretion, Buyer disapproves of
any aspect of the Property, Buyer may cancel the Escrow by Notice
to Seller delivered to Seller on or before 5:00 p.m. PST on the
last day of the Investigation Period. If Buyer does not timely
cancel Escrow as set forth in the above sentence, Buyer shall be
unconditionally obligated to purchase both the Glendale Property
and the Wilshire Property without any contingencies (other than
Section 7(a) conditions precedent). Upon termination of the
Investigation Period without timely cancellation of Escrow, the
Deposit shall be non-refundable in favor of Seller, and shall be
released to Seller by Escrow Agent without further act of Buyer.
If Escrow is canceled during the Investigation Period in
accordance herewith, Buyer shall deliver to Seller, for retention
by Seller, all information, studies, and reports obtained or made
by Buyer or its agents relating to the Property. In addition, if
Escrow is canceled during the Investigation Period in accordance
herewith, Seller shall instruct Escrow Agent to refund the
Deposit to Buyer, net only of Buyer's share of costs and expenses
of the Escrow and title. The inspection, investigation and
survey of the Land and other portions of the Property by Buyer
shall be in lieu of any notice or disclosure required by Section
25359.7 of the California Health and Safety Code, or by any
provision of the Civil Code or pursuant to any other applicable
law, and Buyer hereby waives any requirement for a notice
pursuant to those provisions. Buyer shall be deemed to have
approved all soil and other physical conditions pertaining to the
Property unless it cancels Escrow in accordance herewith on or
before the end of the Investigation Period. Notwithstanding
anything to the contrary herein, if Buyer desires to undertake
any testing, investigation or inspection of the Land with respect
to the presence of hazardous or toxic substances or any substance
which requires investigation or remediation under any federal,
state or local statute, regulation, ordinance, order, action or
policy, Buyer shall perform such inspections, investigations or
tests on or before the expiration of the Investigation Period,
using only environmental engineers or consultants from the
approved list of engineers and consultants to be provided by Seller.
(4) Title. Not later than 5:00 PST on Monday, November 17,
1997, Buyer may provide Notice to Seller that Buyer disapproves
of one or more matters affecting title to the Property (the
"Title Notice Date") and request that Seller correct such
deficiency. All matters affecting title to the Property which
are not disapproved by Buyer by Notice to Seller on or before the
Title Notice Date, together with all matters consented to by
Buyer or created by Buyer or its agents, or by a tenant (without
Seller's written consent), shall be deemed to be "Permitted
Exceptions" for the purposes of this Agreement; provided,
however, that Buyer shall have the right to further disapprove
title exceptions up until the date which is four (4) days prior
to the expiration of the Investigation Period, if and to the
extent a Survey obtained by Seller shows exceptions unacceptable
to Buyer and not disclosed in the previously approved Permitted
Exceptions. In the event Seller receives no such Notice, all
matters affecting title to the Property shall be deemed Permitted
Exceptions. If Buyer timely and properly objects to a title
matter, Seller shall, in the exercise of its sole discretion, at
least one (1) day prior to the end of the Investigation Period,
advise Buyer whether Seller intends to correct the title
objection or provide endorsement coverage with respect thereto
prior to the close of Escrow. If Seller elects not to correct
the deficiency or provide endorsement coverage with respect
thereto, or if Seller provides no Notice to Buyer of its intent
with respect thereto (in which event Seller shall be deemed to
have elected not to correct the deficiency or provide endorsement
coverage with respect thereto), Buyer shall be required, either
to waive its objection or cancel Escrow by Notice delivered to
Seller and Escrow Agent on or before the expiration of the
Investigation Period. Subject to any deficiency which Seller has
agreed to correct or endorse prior to the close of Escrow, if
Buyer does not cancel Escrow during the Investigation Period,
Buyer shall be deemed to have waived its previous objections to
matters affecting title to the Property, which objections shall
thereafter be deemed included in the "Permitted Exceptions."
Notwithstanding the foregoing, Seller agrees to use its
reasonable efforts to cause the removal from the Title Policy (by
removal, indemnity or endorsement), prior to Closing, of all
monetary encumbrances recorded against the Real Property after
the end of the Investigation Period, other than (i) liens
recorded as a result of acts or omissions of Buyer, and (ii)
liens recorded as a result of acts or omissions of Tenants.
(5) Title Commitment. On or before the expiration of the
Investigation Period, Buyer shall have obtained from Title
Company Commitments to issue, in a form acceptable to Buyer, a
standard coverage policy of title insurance (collectively, the
"Title Policy") dated as of the Closing Date, with respect to the
Glendale Property and the Wilshire Property, in an amount which,
in the aggregate, is equal to the amount of the Purchase Price,
showing fee title to, respectively, the Glendale Property and the
Wilshire Property vested in Buyer, subject only to the Permitted
Exceptions, and with such endorsements and such exclusions as
shall be acceptable to Buyer (each, a "Commitment"). If Buyer
fails to obtain the Commitments, Buyer shall be required to close
Escrow (subject only to the conditions in Section 7(a))
notwithstanding that Buyer may not be able to obtain, thereafter,
a Title Policy in a form acceptable to Buyer with respect to each
of the Glendale Property and the Wilshire Property.
(6) Buyer's Right of Entry. Prior to the Effective Date, Buyer
and Seller have entered into that certain Entry Permit shown on
Exhibit "F" attached hereto ("Entry Permit"), and shall act in
accordance with the terms of that Entry Permit, subject, however,
to the more specific limitations set forth in this Agreement.
Buyer shall have the right to enter the Property prior to the end
of the Investigation Period, to conduct, at Buyer's cost, expense
and liability, the following studies or inspections: (i) a market
and neighborhood analysis; (ii) a complete financial analysis of
the Property; (iii) subject to the rights of Tenant, physical
inspections and structural and seismic analyses of the
Improvements; (iv) soils, geology and environmental studies; and
(iv) an architectural inspection of the Property. In addition,
Buyer may enter the Property, subject to the Entry Permit through
the Closing Date with the prior written consent of Seller (which
consent shall not be unreasonably delayed or denied), in
connection with preparation for transfer of the Property to Buyer
(but not to conduct continuing diligence after expiration of the
Investigation Period), for purposes such as obtaining access to
the books and records of Seller made available to Buyer pursuant
to Section 5(a) above, in connection with audits by Buyer's
auditors, and meeting with on-site staff to effect an orderly
transition of management following the Closing Date.
7. Limitation on Leasing. While this Agreement is in effect,
and so long as Buyer is not in default hereunder, Seller shall
not modify any of the Leases or enter into any new Leases after
the Effective Date without the prior written consent of Buyer,
which shall not be unreasonably withheld. Such consent shall be
conclusively presumed to be granted two (2) business days after a
copy of such proposed new Lease or Lease modification is
delivered to Buyer, unless Buyer objects in writing, listing the
specific and reasonable basis for such objection, by Notice to
Seller within such period. As to all such Leases or Lease
modifications entered into after the Effective Date (unless Buyer
timely and properly objects as set forth above), Buyer hereby
expressly assumes all obligations of the landlord under such
Leases, including obligations with respect to tenant
improvements, leasing commissions and free rent or other rent
concessions, whether such obligations are payable prior or
subsequent to the Closing Date. In addition to the foregoing,
Buyer assumes all such obligations with respect to a Lease
entered into by and between Seller and MSI Entertainment, Inc.
with respect to Suite 402 at the Wilshire Property,
notwithstanding that such Lease was entered into prior to the
Effective Date, including without limitation leasing commissions
due in connection with entering into such Lease; provided,
however, that Buyer shall be responsible for leasing commissions
in the amount of $13,090.64, and Seller shall be responsible for
any leasing commissions in excess of that amount. Except with
respect to entering into new Leases and Lease modifications,
Seller shall retain all of its rights to operate the Property in
the ordinary course of business prior to the Closing Date,
including taking legal action against Tenants in default under
their Leases, and Buyer shall cooperate (at no cost to Buyer)
with Seller's prosecution of such actions to completion following
the Closing. Notwithstanding the foregoing, prior to delivering a
Tenant notice under Code of Civil Procedure '1161, et seq.,
Seller shall deliver a Notice to Buyer specifying the nature of
the default and the amount to be paid or other actions required
to cure the default. If Buyer fails to deliver Notice to Seller
within three (3) days of Seller's Notice, pursuant to which Buyer
agrees to treat such Lease as a Lease subject to the provisions
of Sections 4(a)(ii) and 4(b)(ii) (so as to apply amounts
received post-closing first to delinquent amounts which accrued
pre-closing), then Seller may proceed to exercise its rights and
remedies against such Tenant.
8. Conditions Precedent to Closing.
(1) Buyer's Conditions. The closing of the purchase of the
Property on the Closing Date and Buyer's obligation to acquire
the Property shall, in addition to any other conditions set forth
herein, be conditional and contingent upon satisfaction, or
waiver by Buyer, of all of the below listed conditions:
(1) Personal Property. The Personalty shall consist of those
items described on Exhibit "B-1" hereto with respect to the
Glendale Property and Exhibit "B-2," with respect to the Wilshire
Property, subject only to changes relative to use and consumption
thereof during the ordinary course of business while this
Agreement is in effect;
(2) Compliance with Agreement. Seller shall have substantially
performed and complied with all of its covenants and conditions
contained in this Agreement;
(3) Accuracy of Representations and Warranties. The
representations and warranties of Seller set forth in this
Agreement shall be confirmed by Seller in writing as materially
true and correct as of the Closing Date;
(4) Title. No matters shall have been placed of record after
expiration of the Investigation Period, and remain of record as
of the Closing Date, other than mechanics and materialmen liens,
and other liens, placed of record (i) in connection with acts or
omissions of Tenants or work performed by or for Tenants, and not
financed by Seller, and (ii) as a result of acts or omissions of
Buyer, which matters the Title Company intends to include as an
exception to the Title Policy;
(5) Casualty or Condemnation. No casualty or condemnation has
occurred pursuant to which Buyer has elected to terminate the
Agreement in accordance with Section 13 below; and
(6) Estoppels. Seller shall have delivered to Buyer prior to
the Closing Date, Tenant estoppels, executed within sixty (60)
days of the Closing Date and in the form of Exhibit "G-1" (with
respect to the Glendale Property Leases), and Exhibit "G-2" with
respect to the Wilshire Property Leases, either directly to the
benefit of Buyer or assigned by Seller to Buyer, and without any
material exceptions noted thereon by the applicable Tenant except
for Permitted Estoppel Exceptions (as defined below) ("Tenant
Estoppels") from (i) Tenants leasing, in the aggregate, as of the
Effective Date, not less than seventy percent (70%) of the total
leased space in each of the Glendale Property and the Wilshire
Property, and (ii) Tenants leasing, in the aggregate, as of the
Effective Date, more than 3500 square feet of net rentable area
in each of the Glendale Property and the Wilshire Property (it
being understood and agreed that Leases entered into after the
Effective Date and approved or deemed approved by Buyer shall be
deemed to have approved Tenant Estoppels); provided, however,
that, with respect to one or more particular premises in the
Property, Seller may, in lieu of delivering to Buyer a Tenant
Estoppel to meet such condition, deliver a "Seller's Estoppel"
with respect to such leased space, in the form of Exhibit "G-3"
attached hereto, subject only to Permitted Estoppel Exceptions;
provided, further, however, that in the event that Seller
thereafter delivers a Tenant Estoppel to Buyer with respect to
the same Lease (either before or after the Closing Date), then
Seller=s Estoppel shall be of no force and effect with respect to
the Lease covered by such Tenant Estoppel, if and to the extent
that the Tenant Estoppel is consistent with the previously
delivered Seller's Estoppel. As used herein, "Permitted Estoppel
Exceptions" means all of the following: (x) a Tenant's failure or
refusal to provide the bracketed paragraphs on Exhibit "G-1" with
respect to the Glendale Property (such that Seller shall deliver,
to all Tenants at the Glendale Property, the form of Tenant
Estoppel on Exhibit "G-1" including such paragraphs, but if one
or more Tenants only deliver a Tenant Estoppel with such
paragraphs omitted or stricken, such a Tenant Estoppel shall
nevertheless be deemed to be a conforming Tenant Estoppel;
provided, however, that if Paragraph 14 (as shown on Exhibit AG-
1@) is omitted or stricken, Seller shall be entitled to satisfy
the estoppel requirement by delivering a Seller's Estoppel
acknowledging that Buyer and its potential lenders may rely on
the Tenant Estoppel); (y) a Wilshire Property Tenant's failure to
include (after Seller's delivery to such Tenant the Tenant
Estoppel in the form of Tenant Estoppel on Exhibit "G-2"),
Paragraphs 10 or 11 of Exhibit "G-2" with respect to the Wilshire
Property; and (z) a Tenant's disclosure of information (i)
consistent with the Lease of the Tenant, or inconsistent with
such Lease in an immaterial respect, or (ii) known to or made
available to Buyer prior to expiration of the Investigation
Period in connection with Buyer's review of materials pursuant to
Section 5 above.
(2) Seller's Conditions. The closing of the purchase of the
Property on the Closing Date and Seller's obligation to sell and
convey the Property shall, in addition to any other conditions
set forth herein, be conditional and contingent upon
satisfaction, or waiver by Seller, of each and all of the below
listed conditions:
(1) Compliance with Agreement. Buyer shall have substantially
performed and complied with all of its covenants and conditions
contained in this Agreement, and shall have delivered all
documents required to be delivered by Buyer pursuant hereto to
effect a concurrent purchase of both the Glendale Property and
the Wilshire Property in accordance herewith;
(2) Accuracy of Representations and Warranties. All
representations and warranties of Buyer contained in or made
pursuant to this Agreement shall be confirmed by Buyer in writing
as true and correct as of the Closing Date;
(3) Title. The condition precedent set forth in Section
7(a)(iv) shall have been satisfied.
9. Closing Documents. On or before the Closing Date, Seller
and Buyer shall deliver to Escrow Agent the following fully-
executed documents and/or items, acknowledged where appropriate
(together referred to herein as the "Closing Documents"):
(1) Deed. Two Grant Deeds, in the form attached as Exhibit "H-
1" (relating to the Glendale Property) and Exhibit "H-2"
(relating to the Wilshire Property) (collectively, the "Deeds"),
executed by and notarized on behalf of Seller, and conveying
Seller=s interest in the Land and Improvements to Buyer, subject
to general and special real estate taxes and assessments, and all
matters of record or apparent from an inspection or survey;
(2) Xxxx of Sale, Assignment and Assumption Agreement. A Xxxx
of Sale, Assignment and Assumption agreement to be executed and
delivered by Seller and Buyer, in the form attached hereto as
Exhibit "I-1" relating to the Glendale Property and Exhibit "I-2"
relating to the Wilshire Property (collectively, the "Xxxx of
Sale") (i) conveying to Buyer title to the Personalty, (ii)
assigning to Buyer Seller's interest in all Leases and providing
for assumption thereof by Buyer, (iii) assigning to Buyer,
Seller's interest in all assignable, written or oral service,
maintenance, construction, parking, brokerage, leasing
commission, advertising, employment, operating or other
contracts, arrangements or agreements affecting the Property,
including any third party management agreements or contracts (but
not any management agreement or management contract, or leasing
agreement with respect to the entire Property, entered into by
ARES, Inc. or any other affiliate of Seller), and any agreements
pursuant to which goods, services, supplies or any other items
whatsoever are furnished and/or to be furnished in connection
with the Property, or the repair, maintenance or operation of the
Property or any portion or component thereof ("Service
Contracts"), and providing for assumption thereof by Buyer, and
(iv) assigning to Buyer all of Seller's interest in the
Intangible Property, together with originals of all Intangible
Property (if applicable) in each case without representation by
Seller as to assignability or other matters (except to the extent
expressly represented and warranted by Seller herein in Section
10 below).
(3) Non-Foreign Status Affidavit. Seller shall deliver an
Affidavit of Non-Foreign Status in the form of Exhibit "J"
attached hereto, together with a State of California FTB 590RE
form.
(4) Other Documents. Buyer and Seller shall deliver such other
documents as shall be reasonably required to transfer or assign
the Property to Buyer, and provide for assumption of liabilities
by Buyer as provided herein.
10. Closing.
(1) Closing Date. The Closing Date shall be on a business day
as agreed to by Seller and Buyer, but in all events shall be on a
date no later than the Outside Closing Date, unless this date is
mutually extended in writing by Seller and Buyer in the exercise
of their respective sole discretion.
(2) Time and Place. The Closing shall take place through Escrow
on the Closing Date at the offices of Escrow Agent.
(3) Payment of Purchase Price. Buyer shall deliver to Escrow at
least one (1) business day before the Closing Date immediately
available funds in the amount of the Purchase Price plus any
prorations, costs and expenses hereunder payable by Buyer, and
less the amount of the Deposit (which shall have been delivered
to Seller on or before the day after the expiration of the
Investigation Period). The amount of the Deposit shall be
credited against the Purchase Price upon Closing.
(4) Possession. Possession of the Property shall be delivered
to Buyer on the Closing Date, subject only to the rights of
Tenants under the Leases and matters of record or apparent by
inspection or survey of the Property. At Closing, Seller will
make available to Buyer at the Real Property all keys (identified
as to suite), Personalty, and originals or true and correct
copies of all plans and specifications, manuals, warranties and
operating logs for the Real Property and other operating and
management documents not previously delivered to Buyer and in
Seller's possession or control.
(5) Closing Costs. Seller shall pay at Closing the premium for
the standard coverage policy of title insurance, documentary
transfer fees and one-half of the escrow and recording fees.
Buyer shall pay the premium for the extended coverage policy of
title insurance and one-half of the escrow and recording fees.
Seller and Buyer shall each be responsible for paying their
respective attorneys' fees and costs, if any.
(6) Settlement Statement and Disbursement Ledger. Escrow Agent
shall prepare and deliver to the parties on the Closing Date a
correct Settlement Statement and Cash Receipts and Disbursements Ledger.
(7) Title Policy. Escrow Agent shall require Title Company to
deliver the Title Policy to Buyer (with a copy to Seller) within
fifteen (15) business days following the Closing Date.
(8) Xxxx of Sale. On the Closing Date, Seller shall assign to
Buyer, the Personalty and the Intangible Property, with the
exception of items of Personalty excluded pursuant to the Xxxx of
Sale, and Seller shall assign to Buyer and Buyer shall assume,
Seller's rights and obligations under, the Leases and Service
Contracts, in accordance with and as specified in the Xxxx of Sale.
(9) Audit Letter. On or before the Closing Date, at Buyer's
request, Seller shall deliver a letter to Buyer's auditors, in
the form of Exhibit "K" attached hereto.
11. Representations and Warranties of Seller. Seller represents
and warrants to Buyer, as of the Effective Date and as of the
Closing Date, as follows:
(1) Status of and Execution by Seller. Seller is (i) in good
standing and validly existing as a New York corporation; and (ii)
duly authorized, qualified and licensed to do all things required
of it under or in connection with this Agreement, including to
execute, deliver and perform this Agreement. All agreements,
instruments, and documents herein provided to be executed by
Seller will be duly executed by and binding upon Seller as of the
Closing.
(2) Leases. The Lease Schedule attached hereto as Exhibit "L"
correctly lists, as of the Effective Date, all of the Leases and
the base rental currently required to be paid with respect
thereto. Except as disclosed on Exhibit "L," the Leases are not
in monetary default as of the Effective Date, and Seller shall
have, on or before the Diligence Date, made available to Buyer
true and accurate copies of the Leases in effect as of the
Effective Date. Notwithstanding anything to the contrary in this
Agreement, to the extent that the foregoing statements are
confirmed by Tenants in Tenant Estoppels delivered to Buyer (or
in other documents made available to Buyer), Seller shall have no
obligation or liability to Buyer with respect to such statements
regarding such Leases.
(3) Service Contracts. There are no Service Contracts which are
not terminable on thirty (30) (or fewer) days' notice, and
entered into by Seller with respect to the Property, which remain
in effect, except those listed on Exhibit "M" attached hereto.
(4) Mechanics Liens. To Seller's knowledge, there are no
mechanics liens outstanding with respect to the Property as a
result of work performed thereon by Seller, or contractors or
agents of Seller, except any of the same as shall be removed (or
endorsed over by Title Company) as of the Closing Date.
(5) Financial Statements. To Seller's knowledge, there are no
materially incorrect income or expense figures in any financial
statements prepared by or for Seller and made available to Buyer
with respect to the Property, except as may be corrected in other
financial or other statements or documents made available to
Buyer in connection with Buyer's due diligence, and Seller
acknowledges and agrees that Buyer, at Buyer's sole cost and
expense, may request its auditors to review such statements in
connection with its purchase of the Property.
(6) Pending Actions. To Seller's knowledge, except as set forth
on Exhibit "C," there is no litigation, claim, administrative
action, arbitration or other proceeding now pending or threatened
in writing against Seller relating to the Property, which would
materially and adversely affect the use, operation or
construction of the Property, and which is not a matter of public
record.
(7) No Violations. To Seller's knowledge, Seller has received
no written notice of violations of City, County, State, Federal,
building, fire or health codes, zoning codes or other regulations
or ordinances, filed or issued against the Property by any
government authority, which violations remain outstanding and
which would materially and adversely affect the use of the Property.
As used in this Agreement, the term "to Seller's knowledge"
shall mean to Seller's actual present knowledge, as determined by
the state of knowledge of the individual who acts as the Seller's
asset manager of the Property as of the Effective Date (or, with
respect to Section 10(g) only, as determined by the state of
knowledge of Xxxxx Xxxxxxx and Xxxxx Xxxxxx, with respect to the
Glendale Property and, of Xxxxx Xxxxxxx, Xxxxx Xxxxxx and Xxxx
Van't Hof, with respect to the Wilshire Property), without
independent investigation or independent review of Seller's
files. Seller shall not have any liability for breach of its
representations and warranties herein if, as of the Closing Date,
the representations and warranties set forth above shall not be
true, but Buyer has knowledge of such facts prior to the Closing
and proceeds to close Escrow notwithstanding such facts. Seller
shall be entitled to state in writing prior to Closing exceptions
to the representations, warranties, and covenants set forth
above, in which case Buyer may (i) terminate this Agreement if
such exceptions are not reasonably acceptable, in which event the
Deposit (less Buyer=s share of Escrow and Closing costs) shall be
returned to Buyer, or (ii) elect to close Escrow notwithstanding
such exceptions. In either event, Seller shall have no further
obligation or liability to Buyer. The representations and
warranties of Seller set forth in this Agreement shall survive
for one (1) year after the close of Escrow.
12. Representations and Warranties of Buyer. Buyer represents
and warrants to Seller, as of the Effective Date and as of the
Closing Date, as follows:
(1) Status of and Execution by Buyer. Buyer is now and on the
Closing Date will be: (i) duly formed and validly existing as a
Maryland limited partnership; (ii) duly authorized, qualified and
licensed under the laws of the State of California to conduct
business and to acquire the Property; and (iii) duly authorized,
qualified and licensed to do all things required of it under or
in connection with this Agreement, including to execute, deliver
and perform this Agreement. All agreements, instruments, and
documents herein provided to be executed by Buyer will be duly
executed by and binding upon Buyer as of the Closing.
(2) No Violations. Neither this Agreement nor any of the
agreements, instruments and documents herein provided to be
executed or to be caused to be executed by Buyer violate or will
violate any provision of any agreement, law, regulation or
judicial order to which Buyer is a party or by which it is bound.
The representations and warranties of Buyer contained in
this Agreement shall survive for one (1) year after the close of Escrow.
13. Condition of the Property.
(1) AS-IS. Buyer acknowledges that Seller is selling, and Buyer
shall accept, the Property in an "AS IS" condition without any
representation or warranty whatsoever by Seller relating to the
Property, with the exception of the express, limited
representations and warranties set forth in Section 10 above.
Buyer acknowledges that it is a sophisticated real estate
investor who shall have had, as of the Closing Date, open access
to, and sufficient time to review, all information, documents,
agreements, studies and tests relating to the Property that Buyer
elects to conduct, and conduct a complete and thorough
inspection, analysis and evaluation of the Property, including
without limitation investigation of structural, seismic, zoning,
land use and environmental issues, if any, and further
acknowledges that Buyer shall conduct such tests and
investigations, if at all, prior to expiration of the
Investigation Period, and that Buyer shall receive and review
such information as Buyer shall require in the course of its
investigation. Buyer shall undertake such investigation as Buyer
shall deem necessary or desirable to make Buyer fully aware of
the condition of the Property as well as all facts, circumstances
and information which may affect the use and operation of the
Property, and Buyer covenants and warrants to Seller that Buyer
shall rely solely on Buyer's own due diligence investigation in
determining to purchase the Property.
(2) Release. Effective as of the Closing Date, Buyer, on behalf
of itself, its officers, directors and its and their respective
successors, shall, and by the execution of this Agreement, hereby
does, forever release Seller, its officers, directors, agents and
employees, and its and their respective successors, of and from
any and all losses, liabilities, damages, claims, demands, causes
of action, costs and expenses, whether known or unknown, arising
out of or in any way connected with the Property, including the
condition of title to the Property (and Seller's interest in and
ownership thereof) and the environmental and structural condition
of the Property (herein, "Losses"). Buyer shall, upon the
Closing, and, by the execution of this Agreement, hereby does,
forever release Seller of and from any environmental claims and
causes of action existing now or hereafter created or enacted,
whether at common law or by federal, state, county, or municipal
law or ordinance. Buyer agrees never to commence, aid in any
way, or prosecute against Seller, its officers, directors, agents
or employees or its and their respective successors, any action
or other proceeding based upon any Losses. The foregoing release
shall not be deemed to release any claim of Buyer for Seller=s
breach of its representations and warranties set forth in Section
10 above (subject to the limitation on the survival of such
representations and warranties as set forth in Section 10), nor
any claim of Buyer for damages resulting from the untruth of any
matter which Seller certifies to be true in any Seller's Estoppel
delivered to Buyer in connection with this Agreement, which
Seller's Estoppel remains in effect as of the date Buyer brings
such claim.
(3) Waiver. Buyer expressly waives any rights or benefits
available to it with respect to the foregoing release under any
provision of applicable law which generally provides that a
general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time the release
is agreed to, which, if known to such creditor, would materially
affect a settlement. Buyer, by the execution of this Agreement,
acknowledges that it fully understands the foregoing, and with
this understanding, nonetheless elects to and does assume all
risk for Losses known or unknown, described in this Section 12.
Without limiting the generality of the foregoing:
THE UNDERSIGNED ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY LEGAL
COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL
CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM, MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
THE UNDERSIGNED, BEING AWARE OF THIS CODE SECTION, HEREBY
EXPRESSLY WAIVES ANY RIGHTS IT MAY HAVE THEREUNDER, AS WELL AS
UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR
EFFECT.
Seller's Initials: /s/ SR Buyer's Initials:/s/ VJC
14. Casualty or Condemnation. If prior to the Closing Date,
the Property shall be destroyed or substantially damaged, and the
cost to repair shall exceed One Million Dollars ($1,000,000.00),
or if the Property shall become the subject of any proceedings,
judicial, administrative, or otherwise, for eminent domain or
condemnation where the value of the portion of the Property
sought exceeds One Million Dollars ($1,000,000.00), Seller shall
promptly notify Buyer thereof, and Buyer may then, within fifteen
(15) days after delivery of Notice of the same by Seller, elect
to terminate this Agreement by giving Seller Notice thereof, in
which event the parties hereto shall be relieved and released of
and from any further duties, obligations, rights, or liabilities
hereunder (but not under the Entry Permit), and the Deposit shall
be returned to Buyer (less only Buyer's half of Escrow fees and
costs). If the Closing Date is within the aforesaid fifteen (15)
day period, then the Closing shall be extended to the next
business day following the end of said fifteen (15) day period.
If (i) the value of the Property destroyed or substantially
damaged or subject to taking is equal to or less than One Million
Dollars ($1,000,000.00), or (ii) Buyer elects to complete the
transactions contemplated herein as provided above
notwithstanding destruction or eminent domain or condemnation
proceedings involving damage or condemnation value of in excess
of One Million Dollars ($1,000,000.00), this Agreement shall
remain in full force and effect and the purchase contemplated
herein, less any portion of the Property taken by eminent domain
or condemnation, if any, shall be consummated with no further
adjustment or modification and at the Closing Seller shall
assign, transfer, and set over to Buyer all the right, title, and
interest of Seller in and to any insurance proceeds resulting
from the casualty or any awards that have been or may thereafter
be made for the taking or condemnation.
15. Default and Remedies.
IF (i) BUYER IS IN DEFAULT OF THIS AGREEMENT PRIOR TO THE
CLOSING, (ii) BUYER FAILS TO CURE SUCH DEFAULT ON OR BEFORE THE
DATE WHICH IS FIVE (5) DAYS AFTER NOTICE THEREOF FROM SELLER (OR,
IF EARLIER, ON OR BEFORE THE OUTSIDE CLOSING DATE), AND (iii)
SELLER ELECTS TO TERMINATE THIS AGREEMENT DUE TO BUYER'S DEFAULT,
THE DEPOSIT AND ALL OTHER PAYMENTS AND THINGS OF VALUE DELIVERED
BY BUYER SHALL BE FORFEITED BY BUYER AND RETAINED BY SELLER, AND
BOTH PARTIES SHALL THEREAFTER BE RELEASED FROM ALL FURTHER
OBLIGATIONS UNDER THIS AGREEMENT. IF (i) SELLER IS IN DEFAULT OF
THIS AGREEMENT PRIOR TO THE CLOSING, (ii) SELLER FAILS TO CURE
SUCH DEFAULT ON OR BEFORE THE DATE WHICH IS FIVE (5) DAYS AFTER
NOTICE THEREOF FROM BUYER (OR, IF EARLIER, ON OR BEFORE THE
OUTSIDE CLOSING DATE), AND (iii) BUYER ELECTS TO TERMINATE THIS
AGREEMENT DUE TO SELLER'S DEFAULT, BUYER SHALL BE ENTITLED TO
OBTAIN A RELEASE OF THE DEPOSIT, AND IN LIEU OF ALL OTHER
REMEDIES AND DAMAGES, BUYER SHALL BE ENTITLED TO, AT ITS
ELECTION, EITHER (A) SPECIFIC ENFORCEMENT OF SELLER'S DUTY TO
TRANSFER THE PROPERTY PURSUANT TO THIS AGREEMENT, OR (B) PAYMENT
BY SELLER OF ONE MILLION DOLLARS ($1,000,000.00) AS LIQUIDATED
DAMAGES (IN WHICH EVENT BOTH PARTIES SHALL THEREAFTER BE RELEASED
FROM ALL FURTHER OBLIGATIONS HEREUNDER); PROVIDED, HOWEVER, BY
PURSUING AN ACTION FOR SPECIFIC PERFORMANCE, BUYER SHALL BE
DEEMED TO HAVE IRREVOCABLY ELECTED SUCH ACTION AS ITS SOLE REMEDY
HEREUNDER AND SHALL NOT BE ENTITLED TO MAINTAIN A CONCURRENT OR
ALTERNATIVE ACTION FOR ANY OTHER DAMAGES OR REMEDIES.
BUYER AND SELLER ACKNOWLEDGE THAT BUYER'S AND SELLER'S
DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO DETERMINE IN THE
EVENT, RESPECTIVELY, OF BUYER'S OR SELLER'S FAILURE TO PERFORM
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THAT THE DEPOSIT AND THE
LIQUIDATED RECOVERY SET FORTH ABOVE, FOR BUYER IN THE EVENT OF
SELLER'S BREACH, AND SELLER IN THE EVENT OF BUYER'S BREACH, ARE
REASONABLE ESTIMATES OF SUCH DAMAGES. THE DEPOSIT AND SUCH OTHER
PAYMENT SHALL, THEREFORE, BE LIQUIDATED DAMAGES TO, RESPECTIVELY,
SELLER AND BUYER, AND RETENTION THEREOF OR RECEIPT THEREOF SHALL
BE, RESPECTIVELY, SELLER'S AND BUYER'S SOLE AND EXCLUSIVE REMEDY
FOR THE OTHER PARTY'S FAILURE TO PERFORM ITS OBLIGATIONS UNDER
THIS AGREEMENT IN THE EVENT THE NON-DEFAULTING PARTY ELECTS TO
TERMINATE THIS AGREEMENT (UNLESS BUYER ELECTS ITS RIGHT TO SEEK
SPECIFIC PERFORMANCE AS PROVIDED HEREIN). EXCEPT AS EXPRESSLY
PROVIDED ABOVE, SELLER AND BUYER EACH EXPRESSLY WAIVE THE
REMEDIES OF SPECIFIC PERFORMANCE AND ADDITIONAL DAMAGES. IN
ADDITION, BUYER HEREBY WAIVES ANY RIGHT (EXCEPT IN CONNECTION
WITH AN ACTION FOR SPECIFIC PERFORMANCE), WHICH BUYER MAY
OTHERWISE HAVE TO RECORD ANY NOTICE OF PENDING ACTION (LIS
PENDENS) AFFECTING THE PROPERTY. BUYER AND SELLER FURTHER
ACKNOWLEDGE BY THEIR INITIALS BELOW THAT THEIR RESPECTIVE WAIVER
OF THEIR RIGHTS PURSUANT TO THIS SECTION 14 IS MATERIAL
CONSIDERATION FOR THE OTHER PARTY TO ENTER INTO THIS AGREEMENT.
SELLER'S INITIALS /s/ SR BUYER'S INITIALS: /s/ VJC
16. Brokerage Commissions. Buyer hereby represents and warrants
to Seller that Buyer has not incurred, and shall not have
incurred as of the Closing Date, any liability for the payment of
any brokerage fee or commission in connection with the
transaction contemplated in this Agreement. Seller hereby
represents and warrants to Buyer that Seller has not incurred,
and shall not have incurred as of the Closing Date, any liability
for the payment of any brokerage fee or commission in connection
with the transaction contemplated in this Agreement, except for
the commission due Xxxxx X. Xxxxxxx and Colliers/The Xxxxxx
Company, with respect to the Wilshire Property, and Xxxxxxx &
Xxxxxxxxx, with respect to the Glendale Property, which
commission (as between Buyer and Seller) shall be the sole
obligation of Seller. Seller and Buyer hereby agree to defend,
indemnify and hold harmless the other from and against any and
all claims of any other person claiming a brokerage fee or
commission in connection with the Property through such party.
17. Miscellaneous.
(1) No Exchange. Seller shall not participate in, or
accommodate Buyer in connection with, a 1031 exchange.
(2) Entire Agreement. This Agreement supersedes all prior
discussions, agreements and understandings between Seller and
Buyer, with the exception of the Entry Permit and the
confidentiality letter signed by Buyer on or about October 21,
1997, and constitutes the entire agreement between Seller and
Buyer with respect to the transaction herein contemplated. This
Agreement may be amended or modified only by a written instrument
executed by Seller and Buyer.
(3) Waiver. Each party hereto may waive any breach by the other
party of any of the provisions contained in this Agreement or any
default by such other party in the observance or performance of
any covenant or condition required to be observed or performed by
it contained herein; provided, however, that such waiver or
waivers shall be in writing, shall not be construed as a
continuing waiver, and shall not extend to or be taken in any
manner whatsoever to affect any subsequent breach, act or
omission or default or affect each party's rights resulting
therefrom. No waiver will be implied from any delay or failure
by either party to take action on account of any default by the
other party. No extension of time for performance of any
obligations or acts shall be deemed an extension of the time for
performance of any other obligations or acts.
(4) Further Assurances. Each party hereto shall do such further
acts and execute and deliver such further agreements and
assurances as the other party may reasonably require to give full
effect and meaning to this Agreement.
(5) Notices. All notices demands, consents, approvals and other
communications given pursuant to this Agreement (each, a
ANotice@) must be in writing and must be sent by hand, or by
telecopy (with a duplicate copy sent by ordinary mail, postage
prepaid), or by certified or registered mail, postage prepaid,
return receipt requested, or by reputable overnight courier
service, postage prepaid, addressed to the party to be notified
as set forth below:
TO SELLER:
The Mutual Life Insurance Company of New York
00000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: H.E. Xxx Xxxxxxxx, Esq.
With a copy to:
Croudace & Xxxxxxxx
0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
TO BUYER:
Arden Realty Limited Partnership
c/o Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Mr. Xxxxxx Xxxxxxx
With a copy to:
Xxxx & Xxxxx, P.C.
0000 Xxxxxxx Xxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attn.: Xxxxxxx X. Xxxxxx, Esq.
Notices will be deemed given when delivered to Seller or Buyer,
as applicable (regardless of whether delivered to the persons
stated above to receive copies), by hand or when a legible copy
is received by telecopier (provided receipt is verified by
telephone confirmation or one of the other permitted means of
giving Notices under this Section), or if mailed, three (3) days
after deposit in the U.S. mail, certified, return receipt
requested (or on the date of delivery for overnight courier
service), with failure or refusal to accept delivery constituting
delivery for this purpose. The parties agree to use reasonable
efforts to provide copies of Notices to the outside counsel for
the other party specified above, but delivery of such copies
shall not be required for effective delivery of Notice. Actual
notice, however and from whomever given or received, will always
be effective Notice when received. Either party may change its
address for Notices set forth above by giving at least ten (10)
days' prior Notice of such change to the other party.
(6) Facsimile Signatures. Buyer and Seller each (i) agrees to
permit the use of telecopied signatures, from time to time, where
appropriate and consistent with subsection (e) above, 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.
(7) Successors and Assigns; Survival. This Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and
their respective successors, heirs, administrators and assigns,
provided, however, that if Buyer assigns this Agreement, Buyer
shall not be relieved of any liability in connection herewith or
the purchase and sale. Any provision of this Agreement which, by
its terms, is to be performed after the Closing, shall survive
the Closing Date until full performance thereof.
(8) Governing Law and Venue. This Agreement shall be governed
by and construed in accordance with the laws of the State of
California and the venue shall be in Orange County.
(9) No Third Parties Benefitted. The parties do not intend to
confer any benefit on any person, firm, or corporation other than
Seller and Buyer, except as and to the extent otherwise expressly
provided herein.
(10) Attorneys' Fees. In the event of any dispute between any
parties arising out of or in connection with this Agreement or
any other document executed or delivered in connection herewith,
including any litigation, arbitration, bankruptcy and appellate
proceedings (and efforts to enforce the judgment, award or other
disposition of any of the same), the party which prevails in such
action (the "Prevailing Party") shall be reimbursed by the other
party for attorneys' fees, costs and expenses incurred by the
Prevailing Party in connection with such dispute (whether or not
such costs or expenses are specified in California Code of Civil
Procedure Section 1033.5 (a) or (b)). As used herein, the
"Prevailing Party" shall mean the party which obtains the net
monetary recovery or, if no monetary recovery is sought, the
party obtaining the greater nonmonetary relief.
(11) Construction. The section titles or captions in this
Agreement are for convenience only and shall not be deemed to be
part of this Agreement. All pronouns and any variations of
pronouns shall be deemed to refer to the masculine, feminine, or
neuter, singular or plural, as the identity of the parties may
require. Whenever the terms referred to herein are singular, the
same shall be deemed to mean the plural, as the context
indicates, and vice versa. The enumeration of certain
particulars as included within the general language shall not
restrict the scope or affect the generality of such language, and
except as expressly otherwise provided herein, the term "include"
shall mean "include, but shall not be limited to" and the term
"including" shall mean "including, without limitation." Both
Buyer and Seller are sophisticated parties who have been
represented by counsel in the negotiation of this Agreement, and
this Agreement shall not be construed as if it had been prepared
only by Buyer or Seller but rather as if both Buyer and Seller
had prepared the same. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any
person or circumstance shall, at any time or to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances
other than those to which it is held invalid or unenforceable,
shall not be affected thereby, and each provision of this
Agreement shall be valid and shall be enforced to the fullest
extent permitted by law.
(12) Time of Essence. Time is of the essence of this Agreement
and each and every term and provision hereof.
(13) Confidentiality and Indemnification. Buyer covenants and
agrees that: (i) all information provided to it by Seller in
connection with the Property or resulting from Buyer's
inspections of the Property and review of relevant materials will
be held in strict confidence by it and its agents and employees,
(ii) Buyer will return all such information to Seller in the
event the transaction contemplated by this Agreement is not
consummated for any reason, and (iii) Buyer will not rely
thereon, but will instead conduct Buyer's own due diligence
inquiry with respect to the Property. Buyer further agrees to
indemnify and hold Seller harmless from and against any and all
claims or damages, including attorneys' fees, resulting from
Buyer's breach of the covenant contained herein and/or from its
or its agents' or employees' entrance onto the Property. The
indemnification contained herein shall, without limitation,
survive the termination of this Agreement.
(14) Consents and Approvals. Both Seller and Buyer represent and
warrant to the other that each have obtained all requisite
consents and approvals, whether required by internal operating
procedures or otherwise, for entering into this Agreement and
closing the transaction contemplated hereby.
(15) No Other Agreements. After the Effective Date and until the
earlier of the termination of this Agreement or the Outside
Closing Date, Seller shall not enter into any written agreement
with any other person or entity for the sale of the Property;
provided, however, that Seller may accept back-up offers with
respect to purchase of the Property.
(16) Exhibits. All of the Exhibits referenced in this Agreement
are incorporated herein by reference.
(17) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which taken together shall be deemed one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the Effective Date.
BUYER:
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By Arden Realty, Inc., a Maryland corporation,
its sole general partner
By:/s/ Xxxxxx X. Xxxxxxx
Its: President and Chief Operating Officer
SELLER:
THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, a New York mutual life insurance company
By:/s/ Xxxxxx Xxxxxxx
Its: Vice-President
"ESCROW AGENT:" The undersigned acknowledges receipt of this
Agreement and agrees to act in accordance with all applicable
provisions contained herein.
FIRST AMERICAN TITLE INSURANCE COMPANY OF LOS ANGELES,
a California corporation
By:/s/ Xxxxxxxx Xxxxxxxx
Its: Senior Escrow Officer
