SALE AGREEMENT
THIS SALE AGREEMENT (this "Agreement") is made as
of November 6, 1996 (the "Effective Date"), by and between
Metropolitan Life Insurance Company, a New York corporation
("Seller"), and Arden Realty, Inc., a Maryland corporation
("Purchaser").
W I T N E S E T H:
ARTICLE I
PURCHASE AND SALE
Section 1.1 Agreement of Purchase and. Subject to
the terms and conditions hereinafter set forth, Seller agrees to
sell and convey to Purchaser, and Purchaser agrees to purchase
from Seller, the following:
(a) that certain tract or parcel of land situated in
the City of Monterey Park, Los Angeles County, California more
particularly described in Exhibit A attached hereto and made a
part hereof, together with all rights and appurtenances
pertaining to such property, including any right, title and
interest of Seller in and to adjacent streets, alleys or
rights-of-way (the property described in clause (a) of this
Section 1.1 being herein referred to collectively as the "Land");
(b) the buildings, structures, fixtures and other
improvements affixed to or located on the Land, excluding
fixtures owned by tenants (the property described in clause (b)
of this Section 1.1 being herein referred to collectively as the
"Improvements");
(c) any and all of Seller's right, title and interest
in and to all tangible personal property located upon the Land or
within the Improvements, including, without limitation, any and
all appliances, furniture, carpeting, draperies and curtains,
tools and supplies, and other items of personal property owned by
Seller (excluding cash and any software), located on and used
exclusively in connection with the operation of the Land and the
Improvements, which personal property includes without limitation
the personal property listed on Exhibit B attached hereto (the
property described in clause (c) of this Section 1.1 being herein
referred to collectively as the "Personal Property");
(d) any and all of Seller's right, title and interest
in and to the leases, licenses and occupancy agreements covering
all or any portion of the Real Property, to the extent they are
in effect on the date of the Closing (as such term is defined in
Section 4.1 hereof) (the property described in clause (d) of this
Section 1.1 being herein referred to collectively as the
"Leases"), together with all rents and other sums due thereunder
(the "Rents") and any and all security deposits in Seller's
possession in connection therewith (the "Security Deposits"); and
(e) any and all of Seller's right, title and interest
in and to (i) all assignable contracts and agreements
(collectively, the "Operating Agreements") listed and described
on Exhibit C attached hereto and made a part hereof, relating to
the upkeep, repair, maintenance or operation of the Land,
Improvements or Personal Property, and (ii) all assignable
existing warranties and guaranties (express or implied) issued to
Seller in connection with the Improvements or the Personal
Property, and (iii) all assignable existing permits, licenses,
approvals and authorizations issued by any governmental authority
in connection with the Property (the property described in clause
(e) of this Section 1.1 being sometimes herein referred to
collectively as the "Intangibles").
Section 1.2 Property Defined. The Land and the
Improvements are hereinafter sometimes referred to collectively
as the "Real Property." The Land, the Improvements, the Personal
Property, the Leases and the Intangibles are hereinafter
sometimes referred to collectively as the "Property."
Section 1.3. Purchase Price. Seller is to sell and
Purchaser is to purchase the Property for the amount of Forty-Two
Million Dollars ($42,000,000) (the "Purchase Price").
Section 1.4 Payment of Purchase Price. The Purchase
Price, as increased or decreased by prorations and adjustments as
herein provided, shall be payable in full at Closing in cash by
wire transfer of immediately available funds to a bank account
designated by Seller in writing to Purchaser prior to the
Closing.
Section 1.5 Deposit. Simultaneously with the
execution and delivery of this Agreement, Purchaser is depositing
with Chicago Title Company (the "Escrow Agent"), having its
office at 000 X. Xxxxxx Xxxxxx, #000, Xxx Xxxxxxx,XX 00000
Attention: Xxxxx Xxxxxxx the sum of Five Hundred Thousand Dollars
($500,000) (the "Deposit") in good funds, either by certified
bank or cashier's check or by federal wire transfer. The Escrow
Agent shall hold the Deposit in an interest-bearing account
reasonably acceptable to Seller and Purchaser, in accordance with
the terms and conditions of this Agreement. All interest on such
sum shall be deemed income of Purchaser, and Purchaser shall be
responsible for the payment of all costs and fees imposed on the
Deposit account. The Deposit and all accrued interest shall be
distributed in accordance with the terms of this Agreement. The
failure of Purchaser to timely deliver any Deposit hereunder
shall be a material default, and shall entitle Seller, at
Seller's sole option, to terminate this Agreement immediately.
Section 1.6 Deposit as Liquidated Damages. FROM AND
AFTER THE EXPIRATION OF THE INSPECTION PERIOD AND THE TITLE
INSPECTION PERIOD, AS SUCH TERMS ARE DEFINED HEREINBELOW (THE
"APPROVAL DATE"), IN THE EVENT THE SALE OF THE PROPERTY AS
CONTEMPLATED HEREUNDER IS NOT CONSUMMATED FOR ANY REASON EXCEPT A
DEFAULT UNDER THIS AGREEMENT ON THE PART OF SELLER, THE DEPOSIT
(INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF) SHALL
BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE
PARTIES ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT
THAT THE SALE IS NOT CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR
IMPRACTICABLE TO DETERMINE. THEREFORE, BY SEPARATELY EXECUTING
THIS SECTION 1.6 BELOW, THE PARTIES ACKNOWLEDGE THAT THE
NONREFUNDABLE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS
THE PARTIES' REASONABLE ESTIMATE OF SELLER'S DAMAGES AND AS
SELLER'S EXCLUSIVE REMEDY AGAINST PURCHASER IN THE EVENT THE
CLOSING DOES NOT OCCUR AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY
AGAINST PURCHASER ARISING FROM SUCH FAILURE OF THE SALE TO CLOSE.
IN ADDITION, PURCHASER SHALL PAY ALL TITLE, SURVEY AND ESCROW
CANCELLATION CHARGES. NOTWITHSTANDING THE FOREGOING, IN NO EVENT
SHALL THIS SECTION 1.6 LIMIT THE DAMAGES RECOVERABLE BY EITHER
PARTY AGAINST THE OTHER PARTY DUE TO (A) THE OTHER PARTY'S
OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS
AGREEMENT, OR (B) THIRD PARTY CLAIMS. BY THEIR SEPARATELY
EXECUTING THIS SECTION 1.6 BELOW, PURCHASER AND SELLER
ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE
PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS
LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS
EXECUTED.
METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation
By: /s/ B. Xxxx Xxxxxxxxxx
Title: Investment Officer
ARDEN REALTY, INC.,
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
Section 1.7 Escrow Agent.
Escrow Agent shall hold and dispose of the Deposit
in accordance with the terms of this Agreement. Seller and
Purchaser agree that the duties of the Escrow Agent hereunder are
purely ministerial in nature and shall be expressly limited to
the safekeeping and disposition of the Deposit in accordance with
this Agreement. Escrow Agent shall incur no liability in
connection with the safekeeping or disposition of the Deposit for
any reason other than Escrow Agent's willful misconduct or gross
negligence. In the event that Escrow Agent shall be in doubt as
to its duties or obligations with regard to the Deposit, or in
the event that Escrow Agent receives conflicting instructions
from Purchaser and Seller with respect to the Deposit, Escrow
Agent shall not be required to disburse the Deposit and may, at
its option, continue to hold the Deposit until both Purchaser and
Seller agree as to its disposition, or until a final judgment is
entered by a court of competent jurisdiction directing its
disposition, or Escrow Agent may interplead the Deposit in
accordance with the laws of the state in which the Property is
located.
Escrow Agent shall not be responsible for any
interest on the Deposit except as is actually earned, or for the
loss of any interest resulting from the withdrawal of the Deposit
prior to the date interest is posted thereon.
Escrow Agent shall execute this Agreement solely
for the purpose of being bound by the provisions of Sections 1.5,
1.6 and 1.7 hereof.
ARTICLE II
TITLE AND SURVEY
Section 2.1 Title Inspection Period. During the
period beginning upon the Effective Date and ending at 5:00 p.m.
(local time at the Property) on the date that is thirty (30) days
after the date hereof (hereinafter referred to as the "Title
Inspection Period"), Purchaser shall have the right to review (a)
a current preliminary title report on the Real Property,
accompanied by copies of all documents referred to in the report,
which shall be obtained by Purchaser promptly after the Effective
Date; (b) copies of the most recent property tax bills for the
Property, which shall be obtained by Seller promptly after the
Effective Date; (c) a survey of the Real Property prepared by a
licensed surveyor or engineer hired by Purchaser (the "Survey");
and (d) a copy of Seller's title insurance policy and/or survey
for the Real Property, if available, which policy and survey (if
available) shall be provided by Seller promptly after the
Effective Date.
Section 2.2 Title Examination. Purchaser shall
notify Seller in writing (the "Title Notice") prior to the
expiration of the Title Inspection Period which exceptions to
title (including survey matters), if any, will not be accepted by
Purchaser. If Purchaser fails to notify Seller in writing of its
disapproval of any exceptions to title by the expiration of the
Title Inspection Period, Purchaser shall be deemed to have
approved the condition of title to the Real Property. If
Purchaser notifies Seller in writing that Purchaser objects to
any exceptions to title, Seller shall have ten (10) business days
after receipt of the Title Notice to notify Purchaser (a) that
Seller will remove such objectionable exceptions from title on or
before the Closing; provided that Seller may extend the Closing
for such period as shall be required to effect such cure, but not
beyond thirty (30) days; or (b) that Seller elects not to cause
such exceptions to be removed. The procurement by Seller of a
commitment for the issuance of the Title Policy (as defined in
Section 2.5 hereof) or an endorsement thereto insuring Purchaser
against any title exception which was disapproved pursuant to
this Section 2.2 shall be deemed a cure by Seller of such
disapproval. If Seller gives Purchaser notice under clause (b)
above, Purchaser shall have five (5) business days in which to
notify Seller that Purchaser will nevertheless proceed with the
purchase and take title to the Property subject to such excep
tions, or that Purchaser will terminate this Agreement. If this
Agreement is terminated pursuant to the foregoing provisions of
this paragraph, then neither party shall have any further rights
or obligations hereunder (except for any indemnity obligations of
either party pursuant to the other provisions of this Agreement),
the Deposit shall be returned to Purchaser and each party shall
bear its own costs incurred hereunder. If Purchaser shall fail
to notify Seller of its election within said five-day period,
Purchaser shall be deemed to have elected to proceed with the
purchase and take title to the Property subject to such
exceptions.
Section 2.3 Pre-Closing "Gap" Title Defects.
Purchaser may, at or prior to Closing, notify Seller in writing
(the "Gap Notice") of any objections to title (a) raised by the
Title Company between the expiration of the Title Inspection
Period and the Closing and (b) not disclosed by the Title Company
or otherwise known to Purchaser prior to the expiration of the
Title Inspection Period; provided that Purchaser must notify
Seller of such objection to title within two (2) business days of
being made aware of the existence of such exception. If
Purchaser sends a Gap Notice to Seller, Purchaser and Seller
shall have the same rights and obligations with respect to such
notice as apply to a Title Notice under Section 2.2 hereof.
Section 2.4 Permitted Exceptions. The Property
shall be conveyed subject to the following matters, which are
hereinafter referred to as the "Permitted Exceptions":
(a) those matters that either are not objected to in
writing within the time periods provided in Sections 2.2 or 2.3
hereof, or if objected to in writing by Purchaser, are those
which Seller has elected not to remove or cure, or has been
unable to remove or cure, and subject to which Purchaser has
elected or is deemed to have elected to accept the conveyance of
the Property;
(b) the rights of tenants under the Leases;
(c) the lien of all ad valorem real estate taxes and
assessments not yet due and payable as of the date of Closing,
subject to adjustment as herein provided;
(d) local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building
and zoning laws, ordinances and regulations, now or hereafter in
effect relating to the Property; and
(e) items shown on the Survey and not objected to by
Purchaser or waived or deemed waived by Purchaser in accordance
with Section 2.2 hereof.
Section 2.5 Conveyance of Title. At Closing, Seller
shall convey and transfer to Purchaser fee simple title to the
Land and Improvements, by execution and delivery of the Deed (as
defined in Section 4.2(a) hereof). Evidence of delivery of such
title shall be the issuance by Chicago Title Company (the "Title
Company"), or another national title company, of a CLTA Owner's
Policy of Title Insurance (the "Title Policy") covering the Real
Property, in the full amount of the Purchase Price, subject only
to the Permitted Exceptions.
ARTICLE III
REVIEW OF PROPERTY
Section 3.1 Right of Inspection. During the period
beginning upon the Effective Date and ending at 5:00 p.m. (local
time at the Property) on the date that is thirty (30) days after
the date hereof (hereinafter referred to as the "Inspection
Period"), Purchaser shall have the right to make a physical
inspection of the Real Property, including an inspection of the
environmental condition thereof pursuant to the terms and
conditions of this Agreement, and to examine at the Property (or
the property manager's office, as the case may be) documents and
files located at the Property or the property manager's office
concerning the leasing, maintenance and operation of the
Property, but excluding Seller's partnership or corporate
records, internal memoranda, financial projections, budgets,
appraisals, accounting and tax records and similar proprietary,
confidential or privileged information (collectively, the
"Confidential Documents").
Purchaser understands and agrees that any on-site
inspections of the Property shall occur at reasonable times
agreed upon by Seller and Purchaser after reasonable prior
written notice to Seller and shall be conducted so as not to
interfere unreasonably with the use of the Property by Seller or
its tenants. Seller reserves the right to have a representative
present during any such inspections. If Purchaser desires to do
any invasive testing at the Property, Purchaser shall do so only
after notifying Seller and obtaining Seller's prior written
consent thereto, which consent may be subject to any terms and
conditions imposed by Seller in its sole discretion, including
without limitation the prompt restoration of the Property to its
condition prior to any such inspections or tests, at Purchaser's
sole cost and expense. At Seller's option, Purchaser will
furnish to Seller copies of any reports received by Purchaser
relating to any inspections of the Property. Purchaser agrees to
protect, indemnify, defend and hold Seller harmless from and
against any claim for liabilities, losses, costs, expenses
(including reasonable attorneys' fees), damages or injuries
arising out of or resulting from the inspection of the Property
by Purchaser or its agents or consultants, and notwithstanding
anything to the contrary in this Agreement, such obligation to
indemnify and hold harmless Seller shall survive Closing or any
termination of this Agreement.
Section 3.2 Environmental Reports. PURCHASER
ACKNOWLEDGES THAT (1) PURCHASER HAS RECEIVED COPIES OF THE
ENVIRONMENTAL REPORTS LISTED ON EXHIBIT D ATTACHED HERETO, (2) IF
SELLER DELIVERS ANY ADDITIONAL ENVIRONMENTAL REPORTS TO
PURCHASER, PURCHASER WILL ACKNOWLEDGE IN WRITING THAT IT HAS
RECEIVED SUCH REPORTS PROMPTLY UPON RECEIPT THEREOF, AND (3) ANY
ENVIRONMENTAL REPORTS DELIVERED OR TO BE DELIVERED BY SELLER OR
ITS AGENTS OR CONSULTANTS TO PURCHASER ARE BEING MADE AVAILABLE
SOLELY AS AN ACCOMMODATION TO PURCHASER AND MAY NOT BE RELIED
UPON BY PURCHASER IN CONNECTION WITH THE PURCHASE OF THE
PROPERTY. PURCHASER AGREES THAT SELLER SHALL HAVE NO LIABILITY
OR OBLIGATION WHATSOEVER FOR ANY INACCURACY IN OR OMISSION FROM
ANY ENVIRONMENTAL REPORT. PURCHASER HAS CONDUCTED, OR WILL
CONDUCT PRIOR TO THE EXPIRATION OF THE INSPECTION PERIOD, ITS OWN
INVESTIGATION OF THE ENVIRONMENTAL CONDITION OF THE PROPERTY TO
THE EXTENT PURCHASER DEEMS SUCH AN INVESTIGATION TO BE NECESSARY
OR APPROPRIATE.
Section 3.3 Right of Termination. If for any reason
whatsoever Purchaser determines that the Property or any aspect
thereof is unsuitable for Purchaser's acquisition, Purchaser
shall have the right to terminate this Agreement by giving
written notice thereof to Seller prior to the expiration of the
Inspection Period, and if Purchaser gives such notice of
termination within the Inspection Period, this Agreement shall
terminate. If this Agreement is terminated pursuant to the
foregoing provisions of this paragraph, then neither party shall
have any further rights or obligations hereunder (except for any
indemnity obligations of either party pursuant to the other
provisions of this Agreement), the Deposit shall be returned to
Purchaser and each party shall bear its own costs incurred
hereunder. If Purchaser fails to give Seller a notice of
termination prior to the expiration of the Inspection Period,
Purchaser shall be deemed to have approved all aspects of the
Property (except title and survey, which shall be governed by
Article II hereof) and to have elected to proceed with the
purchase of the Property pursuant to the terms hereof.
Section 3.4 Review of Tenant Estoppels. Seller
shall deliver to each tenant of the Property an estoppel
certificate in substantially the form of Exhibit E attached
hereto (the "Tenant Estoppels"), and shall request that the
tenants complete and sign the Tenant Estoppels and return them to
Seller. Seller shall deliver copies of the completed Tenant
Estoppels to Purchaser as Seller receives them. Purchaser shall
notify Seller within three (3) days of receipt of any Tenant
Estoppel in the event Purchaser determines such Tenant Estoppel
is not acceptable to Purchaser along with the reasons for such
determination. In the event Purchaser fails to give such notice
within such three (3) day period then any such Tenant Estoppel
shall be deemed to be acceptable to Purchaser. In the event that
Seller fails to obtain the Tenant Estoppels (or in lieu thereof,
at Seller's option, Seller estoppels therefor) that are
satisfactory to Purchaser with respect to all of the tenants of
the Property, Purchaser shall have until the Approval Date to
terminate this Agreement by written notice to Seller. If this
Agreement is terminated pursuant to the foregoing provisions of
this paragraph, then neither party shall have any further rights
or obligations hereunder (except for any indemnity obligations of
either party pursuant to the other provisions of this Agreement),
the Deposit shall be returned to Purchaser and each party shall
bear its own costs incurred hereunder. If Purchaser fails to
give Seller a notice of termination as set forth above, Purchaser
shall be deemed to have approved the Tenant Estoppels (and Seller
estoppels, if applicable) and to have elected to proceed with the
purchase of the Property pursuant to the terms hereof. Any
Tenant Estoppel which is received from a tenant after Seller
provides its own estoppel may be substituted for Seller's
estoppel and Seller shall have no further liability thereunder,
provided that such Tenant Estoppel contains no changes or, if
changed, is otherwise reasonably acceptable to Purchaser. The
provisions of this Section 3.4 shall survive the Closing.
ARTICLE IV
CLOSING
Section 4.1 Time and Place. The consummation of the
transaction contemplated hereby (the "Closing") shall be held by
mail or overnight courier, to the extent possible, or if
necessary, at the offices of Seller at 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxx Xxxx, Xxxxxxxxxx 00000 on December 18, 1996.
Notwithstanding the foregoing, Seller shall have the elction,
exercisable on written notice to Purchaser delivered prior to the
Closing, to cause the Closing to occur on any business day during
the first week of January 1997 that Seller shall select. At the
Closing, Seller and Purchaser shall perform the obligations set
forth in, respectively, Section 4.2 and Section 4.3 hereof, the
performance of which obligations shall be concurrent conditions;
provided that the Deed shall not be recorded until Seller
receives confirmation that Seller has received the full amount of
the Purchase Price, adjusted by prorations as set forth herein.
At Seller's option, the Closing shall be consummated through an
escrow administered by Escrow Agent. In such event, the Purchase
Price and all documents shall be deposited with the Escrow Agent
as escrowee.
Section 4.2 Seller's Obligations at Closing. At
Closing, Seller shall:
(a) deliver to Purchaser a duly executed grant deed
(the "Deed") in the form attached hereto as Exhibit G, conveying
the Land and Improvements, subject only to the Permitted
Exceptions; the warranty of title in the Deed will be only as to
claims made by, through or under Seller and not otherwise;
(b) deliver to Purchaser a duly executed xxxx of sale
(the "Xxxx of Sale") conveying the Personal Property without
warranty of title or use and without warranty, express or
implied, as to merchantability and fitness for any purpose and in
the form attached hereto as Exhibit H;
(c) assign to Purchaser, and Purchaser shall assume,
the landlord/lessor interest in and to the Leases, Rents and
Security Deposits, and any and all obligations to pay leasing
commissions and finder's fees with respect to the Leases and
amendments, renewals and expansions thereof, to the extent
provided in Section 4.4(b)(v) hereof, by duly executed assignment
and assumption agreement (the "Assignment of Leases") in the form
attached hereto as Exhibit I pursuant to which (i) Seller shall
indemnify Purchaser and hold Purchaser harmless from and against
any and all claims pertaining thereto arising prior to Closing
and (ii) Purchaser shall indemnify Seller and hold Seller
harmless from and against any and all claims pertaining thereto
arising from and after the Closing, including without limitation,
claims made by tenants with respect to tenants' Security Deposits
to the extent paid, credited or assigned to Purchaser;
(d) to the extent assignable, assign to Purchaser, and
Purchaser shall assume, Seller's interest in the Operating
Agreements and the other Intangibles by duly executed assignment
and assumption agreement (the "Assignment of Contracts") in the
form attached hereto as Exhibit J pursuant to which (i) Seller
shall indemnify Purchaser and hold Purchaser harmless from and
against any and all claims pertaining thereto arising prior to
Closing and (ii) Purchaser shall indemnify Seller and hold
Seller harmless from and against any and all claims pertaining
thereto arising from and after the Closing;
(e) join with Purchaser to execute a notice (the
"Tenant Notice") in the form attached hereto as Exhibit K, which
Purchaser shall send to each tenant under each of the Leases
promptly after the Closing, informing such tenant of the sale of
the Property and of the assignment to Purchaser of Seller's
interest in, and obligations under, the Leases (including, if
applicable, any Security Deposits), and directing that all Rent
and other sums payable after the Closing under each such Lease be
paid as set forth in the notice;
(f) In the event that any representation or warranty
of Seller needs to be modified due to changes since the Effective
Date, deliver to Purchaser a certificate, dated as of the date of
Closing and executed on behalf of Seller by a duly authorized
officer thereof, identifying any representation or warranty which
is not, or no longer is, true and correct and explaining the
state of facts giving rise to the change. In no event shall
Seller be liable to Purchaser for, or be deemed to be in default
hereunder by reason of, any breach of representation or warranty
which results from any change that (i) occurs between the
Effective Date and the date of Closing and (ii) is expressly
permitted under the terms of this Agreement or is beyond the
reasonable control of Seller to prevent; provided, however, that
the occurrence of a change which is not permitted hereunder or is
beyond the reasonable control of Seller to prevent shall, if
materially adverse to Purchaser, constitute the non-fulfillment
of the condition set forth in Section 4.6(b) hereof; if, despite
changes or other matters described in such certificate, the
Closing occurs, Seller's representations and warranties set forth
in this Agreement shall be deemed to have been modified by all
statements made in such certificate;
(g) deliver to Purchaser such evidence as the Title
Company may reasonably require as to the authority of the person
or persons executing documents on behalf of Seller;
(h) deliver to Purchaser a certificate in the form
attached hereto as Exhibit L duly executed by Seller stating that
Seller is not a "foreign person" as defined in the Federal
Foreign Investment in Real Property Tax Act of 1980;
(i) deliver to Purchaser the Leases and the Operating
Agreements, together with such leasing and property files and
records located at the Property or the property manager's office
which are material in connection with the continued operation,
leasing and maintenance of the Property, but excluding any
Confidential Documents. For a period of three (3) years after
the Closing, Purchaser shall allow Seller and its agents and
representatives access without charge to all files, records and
documents delivered to Purchaser at the Closing, upon reasonable
advance notice and at all reasonable times, to examine and make
copies of any and all such files, records and documents, which
right shall survive the Closing;
(j) deliver such affidavits as may be customarily and
reasonably required by the Title Company, in a form reasonably
acceptable to Seller;
(k) deliver to Purchaser possession and occupancy of
the Property, subject to the Permitted Exceptions;
(l) execute a closing statement acceptable to Seller;
and
(m) deliver such additional documents as shall be
reasonably required to consummate the transaction contemplated by
this Agreement.
Section 4.3 Purchaser's Obligations at Closing. At
Closing, Purchaser shall:
(a) pay to Seller the full amount of the Purchase
Price (which amount shall include the Deposit), as increased or
decreased by prorations and adjustments as herein provided, in
immediately available wire transferred funds pursuant to Section
1.4 hereof;
(b) join Seller in execution of the Assignment of
Leases, Assignment of Contracts and Tenant Notices;
(c) In the event that any representation or warranty
of Purchaser set forth in Sections 5.5(a) or (b) hereof needs to
be modified due to changes since the Effective Date, deliver to
Seller a certificate, dated as of the date of Closing and
executed on behalf of Purchaser by a duly authorized
representative thereof, identifying any such representation or
warranty which is not, or no longer is, true and correct and
explaining the state of facts giving rise to the change. In no
event shall Purchaser be liable to Seller for, or be deemed to be
in default hereunder by reason of, any breach of representation
or warranty set forth in Sections 5.5(a) or (b) hereof which
results from any change that (i) occurs between the Effective
Date and the date of Closing and (ii) is expressly permitted
under the terms of this Agreement or is beyond the reasonable
control of Purchaser to prevent; provided, however, that the
occurrence of a change which is not permitted hereunder or is
beyond the reasonable control of Purchaser to prevent shall, if
materially adverse to Seller, constitute the non-fulfillment of
the condition set forth in Section 4.7(c) hereof; if, despite
changes or other matters described in such certificate, the
Closing occurs, Purchaser's representations and warranties set
forth in this Agreement shall be deemed to have been modified by
all statements made in such certificate;
(d) deliver to Seller such evidence as the Title
Company may reasonably require as to the authority of the person
or persons executing documents on behalf of Purchaser;
(e) deliver such affidavits as may be customarily and
reasonably required by the Title Company, in a form reasonably
acceptable to Purchaser;
(f) execute a closing statement acceptable to
Purchaser; and
(g) deliver such additional documents as shall be
reasonably required to consummate the transaction contemplated by
this Agreement.
Section 4.4 Credits and Prorations.
(a) All income and expenses of the Property shall be
apportioned as of 12:01 a.m., on the day of Closing, as if
Purchaser were vested with title to the Property during the
entire day upon which Closing occurs. Such prorated items shall
include without limitation the following:
(i) all Rents, if any;
(ii) taxes and assessments (including personal
property taxes on the Personal Property) levied against the
Property;
(iii) utility charges for which Seller is liable,
if any, such charges to be apportioned at Closing on the basis of
the most recent meter reading occurring prior to Closing (dated
not more than fifteen (15) days prior to Closing) or, if
unmetered, on the basis of a current xxxx for each such utility;
(iv) all amounts payable under brokerage
agreements and Operating Agreements, pursuant to the terms of
this Agreement; and
(v) any other operating expenses or other items
pertaining to the Property which are customarily prorated between
a purchaser and a seller in the county in which the Property is
located.
(b) Notwithstanding anything contained in Section
4.4(a) hereof:
(i) At Closing, (A) Seller shall, at Seller's
option, either deliver to Purchaser any Security Deposits
actually held by Seller pursuant to the Leases or credit to the
account of Purchaser the amount of such Security Deposits (to the
extent such Security Deposits have not been applied against
delinquent Rents or otherwise as provided in the Leases), and (B)
Purchaser shall credit to the account of Seller all refundable
cash or other deposits posted with utility companies serving the
Property, or, at Seller's option, Seller shall be entitled to
receive and retain such refundable cash and deposits;
(ii) Any taxes paid at or prior to Closing shall
be prorated based upon the amounts actually paid. If taxes and
assessments due and payable during the year of Closing have not
been paid before Closing, Seller shall be charged at Closing an
amount equal to that portion of such taxes and assessments which
relates to the period before Closing and Purchaser shall pay the
taxes and assessments prior to their becoming delinquent. Any
such apportionment made with respect to a tax year for which the
tax rate or assessed valuation, or both, have not yet been fixed
shall be based upon the tax rate and/or assessed valuation last
fixed. To the extent that the actual taxes and assessments for
the current year differ from the amount apportioned at Closing,
the parties shall make all necessary adjustments by appropriate
payments between themselves within thirty (30) days after such
amounts are determined following Closing, subject to the
provisions of Section 4.4(d) hereof;
(iii) Charges referred to in Section 4.4(a)
hereof which are payable by any tenant to a third party shall not
be apportioned hereunder, and Purchaser shall accept title
subject to any of such charges unpaid and Purchaser shall look
solely to the tenant responsible therefor for the payment of the
same. If Seller shall have paid any of such charges on behalf of
any tenant, and shall not have been reimbursed therefor by the
time of Closing, Purchaser shall credit to Seller an amount equal
to all such charges so paid by Seller;
(iv) As to utility charges referred to in Section
4.4(a)(iii) hereof, Seller may on notice to Purchaser elect to
pay one or more of all of said items accrued to the date
hereinabove fixed for apportionment directly to the person or
entity entitled thereto, and to the extent Seller so elects, such
item shall not be apportioned hereunder, and Seller's obligation
to pay such item directly in such case shall survive the Closing
or any termination of this Agreement;
(v) Purchaser shall be responsible for the
payment of (A) all Tenant Inducement Costs (as hereinafter
defined) and leasing commissions which become due and payable
(whether before or after Closing) as a result of any new Leases,
or any renewals, amendments or expansions of existing Leases,
signed during the Lease Approval Period (as hereinafter defined)
and, if required, approved or deemed approved in accordance with
Section 5.4 hereof; and (B) all Tenant Inducement Costs and
leasing commissions with respect to new Leases, or renewals,
amendments or expansions of existing Leases, signed or entered
into from and after the date of Closing; and (C) all Tenant
Inducement Costs and leasing commissions listed on Exhibit M
attached hereto. If, as of the date of Closing, Seller shall
have paid any Tenant Inducement Costs or leasing commissions for
which Purchaser is responsible pursuant to the foregoing
provisions, Purchaser shall reimburse Seller therefor at Closing.
For purposes hereof, the term "Tenant Inducement Costs" shall
mean any out-of-pocket payments required under a Lease to be paid
by the landlord thereunder to or for the benefit of the tenant
thereunder which is in the nature of a tenant inducement,
including specifically, without limitation, tenant improvement
costs, lease buyout costs, and moving, design, refurbishment and
club membership allowances. The term "Tenant Inducement Costs"
shall not include loss of income resulting from any free rental
period, it being agreed that Seller shall bear the loss resulting
from any free rental period until the date of Closing and that
Purchaser shall bear such loss from and after the date of
Closing. For purposes hereof, the term "Lease Approval Period"
shall mean the period from the date hereof until the date of
Closing;
(vi) Unpaid and delinquent Rent collected by
Seller and Purchaser after the date of Closing shall be delivered
as follows: (a) if Seller collects any unpaid or delinquent Rent
for the Property, Seller shall, within fifteen (15) days after
the receipt thereof, deliver to Purchaser any such Rent which
Purchaser is entitled to hereunder relating to the date of
Closing and any period thereafter, and (b) if Purchaser collects
any unpaid or delinquent Rent from the Property, Purchaser shall,
within fifteen (15) days after the receipt thereof, deliver to
Seller any such Rent which Seller is entitled to hereunder
relating to the period prior to the date of Closing. Seller and
Purchaser agree that (i) all Rent received by Seller or Purchaser
within the first ninety (90) day period after the date of Closing
from each tenant under the Leases shall be applied first to such
tenant's delinquent Rent, if any, in the order of maturity, and
then to such tenant's current Rent, and (ii) all Rent received by
Seller or Purchaser after the first ninety (90) day period after
the date of Closing from each tenant under the Leases shall be
applied first to such tenant's current Rent and then to such
tenant's delinquent Rent, if any, in the inverse order of
maturity. Purchaser will make a good faith effort after Closing
to collect all Rents in the usual course of Purchaser's operation
of the Property, but Purchaser will not be obligated to institute
any lawsuit or other collection procedures to collect delinquent
Rents. Seller may attempt to collect any delinquent Rents owed
Seller and may institute any lawsuit or collection procedures,
but may not evict any tenant. In the event that there shall be
any Rents or other charges under any Leases which, although
relating to a period prior to Closing, do not become due and
payable until after Closing or are paid prior to Closing but are
subject to adjustment after Closing (such as year end common area
expense reimbursements and the like), then any Rents or charges
of such type received by Purchaser or its agents or Seller or its
agents subsequent to Closing shall, to the extent applicable to a
period extending through the Closing, be prorated between Seller
and Purchaser as of Closing and Seller's portion thereof shall be
remitted promptly to Seller by Purchaser.
(c) Seller may prosecute an appeal of the real
property tax assessment for the 1995/1996 tax years, and may take
related action which Seller deems appropriate in connection
therewith. Purchaser shall cooperate with Seller in connection
with such appeal and collection of a refund of real property
taxes paid. Seller owns and holds all right, title and interest
in and to such appeal and refund, and all amounts payable in
connection therewith shall be paid directly to Seller by the
applicable authorities. If such refund or any part thereof is
received by Purchaser, Purchaser shall promptly pay such amount
to Seller. Any refund received by Seller shall be distributed as
follows: first, to reimburse Seller for all costs incurred in
connection with the appeal; second, with respect to refunds
payable to tenants of the Real Property pursuant to the Leases,
to such tenants in accordance with the terms of such Leases; and
third, to Seller to the extent such appeal covers the period
prior to the Closing, and to Purchaser to the extent such appeal
covers the period as of the Closing and thereafter. If and to
the extent any such appeal covers the period after the Closing,
Purchaser shall have the right to participate in such appeal.
(d) Except as otherwise provided herein, any revenue
or expense amount which cannot be ascertained with certainty as
of Closing shall be prorated on the basis of the parties'
reasonable estimates of such amount, and shall be the subject of
a final proration sixty (60) days after Closing, or as soon
thereafter as the precise amounts can be ascertained. Purchaser
shall promptly notify Seller when it becomes aware that any such
estimated amount has been ascertained. Once all revenue and
expense amounts have been ascertained, Purchaser shall prepare,
and certify as correct, a final proration statement which shall
be subject to Seller's approval. Upon Seller's acceptance and
approval of any final proration statement submitted by Purchaser,
such statement shall be conclusively deemed to be accurate and
final.
(e) Subject to the final sentence of Section 4.4(d)
hereof, the provisions of this Section 4.4 shall survive Closing.
Section 4.5 Transaction Taxes and Closing Costs.
(a) Seller and Purchaser shall execute such returns,
questionnaires and other documents as shall be required with
regard to all applicable real property transaction taxes imposed
by applicable federal, state or local law or ordinance;
(b) Seller shall pay the fees of any counsel
representing Seller in connection with this transaction. Seller
shall also pay the following costs and expenses: one-half of the
escrow fee, if any, which may be charged by the Escrow Agent or
Title Company; the premium for the Title Policy, to the extent it
does not exceed the cost of a CLTA policy; one-half (1/2) of the
fees for recording the Deed and the Assignment of Leases; and any
transfer tax which becomes payable by reason of the transfer of
the Property.
(c) Purchaser shall pay the fees of any counsel
representing Purchaser in connection with this transaction.
Purchaser shall also pay the following costs and expenses: one-
half of the escrow fee, if any, which may be charged by the
Escrow Agent or Title Company; the premium for the Title Policy,
to the extent it exceeds the cost of a CLTA policy, and all
endorsements to the Title Policy; the cost of the Survey; and one-
half (1/2) of the fees for recording the Deed and the Assignment
of Leases;
(d) The Personal Property is included in this sale
without charge, except that Purchaser shall pay to Seller the
amount of any and all sales or similar taxes payable in
connection with the transfer of the Personal Property and
Purchaser shall execute and deliver any tax returns required of
it in connection therewith;
(e) All costs and expenses incident to this
transaction and the closing thereof, and not specifically
described above, shall be paid by the party incurring same; and
(f) The provisions of this Section 4.5 shall survive
the Closing.
Section 4.6 Conditions Precedent to Obligation of
Purchaser. The obligation of Purchaser to consummate the
transaction hereunder shall be subject to the fulfillment on or
before the date of Closing of all of the following conditions,
any or all of which may be waived by Purchaser in its sole
discretion:
(a) Seller shall have delivered to Purchaser all of
the items required to be delivered to Purchaser pursuant to the
terms of this Agreement, including but not limited to, those
provided for in Section 4.2 hereof;
(b) All of the representations and warranties of
Seller contained in this Agreement shall be true and correct in
all material respects as of the date of Closing (with appropriate
modifications permitted under this Agreement); and
(c) Seller shall have performed and observed, in all
material respects, all covenants and agreements of this Agreement
to be performed and observed by Seller as of the date of Closing.
Section 4.7 Conditions Precedent to Obligation of
Seller. The obligation of Seller to consummate the transaction
hereunder shall be subject to the fulfillment on or before the
date of Closing of all of the following conditions, any or all of
which may be waived by Seller in its sole discretion:
(a) Seller shall have received the Purchase Price as
adjusted as provided herein, pursuant to and payable in the
manner provided for in this Agreement;
(b) Purchaser shall have delivered to Seller all of
the items required to be delivered to Seller pursuant to the
terms of this Agreement, including but not limited to, those
provided for in Section 4.3 hereof;
(c) All of the representations and warranties of
Purchaser contained in this Agreement shall be true and correct
in all material respects as of the date of Closing (with
appropriate modifications permitted under this Agreement); and
(d) Purchaser shall have performed and observed, in
all material respects, all covenants and agreements of this
Agreement to be performed and observed by Purchaser as of the
date of Closing.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 5.1 Representations and Warranties of
Seller. Seller hereby makes the following representations and
warranties to Purchaser as of the Effective Date, which
representations and warranties shall be deemed to have been made
again as of the Closing, subject to Section 4.2(f) hereof:
(a) Organization and Authority. Seller has been duly
organized and is validly existing under the laws of the State of
New York. Subject to the provisions of Section 10.16 hereof,
Seller has the full right and authority to enter into this
Agreement and to transfer all of the Property and to consummate
or cause to be consummated the transaction contemplated by this
Agreement. The person signing this Agreement on behalf of Seller
is authorized to do so.
(b) Pending Actions. To Seller's knowledge, Seller
has not received written notice of any action, suit, arbitration,
unsatisfied order or judgment, government investigation or
proceeding pending against Seller which, if adversely determined,
could individually or in the aggregate materially interfere with
the consummation of the transaction contemplated by this
Agreement.
(c) Operating Agreements. To Seller's knowledge, the
Operating Agreements listed on Exhibit C are all of the
agreements concerning the operation and maintenance of the
Property entered into by Seller and affecting the Property,
except those operating agreements that are not assignable or are
to be terminated by Seller within thirty (30) days after the
Closing, and except any agreement with Seller's property manager,
which shall be terminated by Seller.
(d) Lease Brokerage. To Seller's knowledge, there are
no agreements with brokers providing for the payment from and
after the Closing by Seller or Seller's successor-in-interest of
leasing commissions or fees for procuring tenants with respect to
the Property, except as disclosed in Exhibit N hereto;
(e) Condemnation. To Seller's knowledge, Seller has
received no written notice of any condemnation proceedings
relating to the Property.
(f) Litigation. To Seller's knowledge, except as set
forth on Exhibit O attached hereto, and except tenant eviction
proceedings, tenant bankruptcies, proceedings for the collection
of delinquent rentals from tenants and proceedings related to
claims for personal injury or damage to property due to events
occurring at the Property, Seller has not received written notice
of any litigation which has been filed against Seller that arises
out of the ownership of the Property and would materially affect
the Property or use thereof, or Seller's ability to perform
hereunder;
(g) Violations. To Seller's knowledge, except as set
forth on Exhibit P attached hereto, Seller has not received
written notice of any uncured violation of any federal, state or
local law relating to the use or operation of the Property which
would materially adversely affect the Property or use thereof;
and
(h) Leases. To Seller's knowledge, the rent roll
attached hereto as Exhibit Q is accurate in all material
respects, and lists all of the leases currently affecting the
Property.
Section 5.2 Knowledge Defined. References to the
"knowledge" of Seller shall refer only to the current actual
knowledge of the Designated Employees (as hereinafter defined) of
Seller, and shall not be construed, by imputation or otherwise,
to refer to the knowledge of Seller or any affiliate of Seller,
to any property manager, or to any other officer, agent, manager,
representative or employee of Seller or any affiliate thereof or
to impose upon such Designated Employees any duty to investigate
the matter to which such actual knowledge, or the absence
thereof, pertains. As used herein, the term "Designated
Employees" shall refer to Xxxxxx XxXxxxxx, who is Seller's
internal asset manager with primary internal business
responsibility for the operation of the Property.
Section 5.3 Survival of Seller's Representations and
Warranties. The representations and warranties of Seller set
forth in Section 5.1 hereof as updated as of the Closing in
accordance with the terms of this Agreement, shall survive
Closing for a period of one hundred eighty (180) days. No claim
for a breach of any representation or warranty of Seller shall be
actionable or payable if the breach in question results from or
is based on a condition, state of facts or other matter which was
known to Purchaser prior to Closing. Seller shall have no
liability to Purchaser for a breach of any representation or
warranty (a) unless the valid claims for all such breaches
collectively aggregate more than Fifty Thousand Dollars
($50,000), in which event the full amount of such valid claims
shall be actionable, up to the Cap (as defined in this Section),
and (b) unless written notice containing a description of the
specific nature of such breach shall have been given by Purchaser
to Seller prior to the expiration of said one hundred eighty
(180) day period and an action shall have been commenced by
Purchaser against Seller within two hundred forty (240) days of
Closing. Purchaser agrees to first seek recovery under any
insurance policies, service contracts and Leases prior to seeking
recovery from Seller, and Seller shall not be liable to Purchaser
if Purchaser's claim is satisfied from such insurance policies,
service contracts or Leases. As used herein, the term "Cap"
shall mean the total aggregate amount of One Million Dollars
($1,000,000).
Section 5.4 Covenants of Seller. Seller hereby
covenants with Purchaser as follows:
(a) From the Effective Date hereof until the Closing
or earlier termination of this Agreement, Seller shall use
reasonable efforts to operate and maintain the Property in a
manner generally consistent with the manner in which Seller has
operated and maintained the Property prior to the date hereof;
(b) Except as provided hereinbelow, a copy of any
amendment, renewal or expansion of an existing Lease or of any
new Lease which Seller wishes to execute between the Effective
Date and the date of Closing will be submitted to Purchaser prior
to execution by Seller. Purchaser agrees to notify Seller in
writing within five (5) business days after its receipt thereof
of either its approval or disapproval thereof, including all
Tenant Inducement Costs and leasing commissions to be incurred in
connection therewith. In the event Purchaser informs Seller
within such five business day period that Purchaser does not
approve the amendment, renewal or expansion of the existing Lease
or the new Lease, which approval shall not be unreasonably
withheld, Seller shall have the right to terminate this Agreement
by written notice thereof to Purchaser within five (5) business
days after Seller's receipt of written notice of Purchaser's
disapproval thereof. If this Agreement is terminated pursuant to
the foregoing provisions of this paragraph, then neither party
shall have any further rights or obligations hereunder (except
for any indemnity obligations of either party pursuant to the
other provisions of this Agreement), the Deposit shall be
returned to Purchaser and each party shall bear its own costs
incurred hereunder. In the event Purchaser fails to notify
Seller in writing of its approval or disapproval within the five
(5) business day period set forth above, Purchaser shall be
deemed to have approved such new Lease, amendment, renewal or
expansion. At Closing, Purchaser shall reimburse Seller for any
Tenant Inducement Costs, leasing commissions or other expenses,
including legal fees, incurred by Seller pursuant to an
amendment, a renewal, an expansion or a new Lease approved (or
deemed approved) by Purchaser.
Section 5.5 Representations and Warranties of
Purchaser. Purchaser hereby makes the following representations
and warranties to Seller as of the Effective Date, which
representations and warranties shall be deemed to have been made
again as of the Closing, subject to Section 4.3(c) hereof:
(a) Organization and Authority. Purchaser has been
duly organized and is validly existing under the laws of
California. Purchaser has the full right and authority to enter
into this Agreement and to consummate or cause to be consummated
the transaction contemplated by this Agreement. The person
signing this Agreement on behalf of Purchaser is authorized to do
so;
(b) Pending Actions. To Purchaser's knowledge, there
is no action, suit, arbitration, unsatisfied order or judgment,
government investigation or proceeding pending against Purchaser
which, if adversely determined, could individually or in the
aggregate materially interfere with the consummation of the
transaction contemplated by this Agreement.
(c) ERISA. As of the Closing, (1) Purchaser will
not be an employee benefit plan as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA"), which is subject to Title I of ERISA, nor a plan as
defined in Section 4975(e)(1) of the Internal Revenue Code of
1986, as amended (each of the foregoing hereinafter referred to
collectively as "Plan"), and (2) the assets of the Purchaser will
not constitute "plan assets" of one or more such Plans within the
meaning of Department of Labor ("DOL") Regulation Section 2510.3-
101.
As of the Closing, if Purchaser is a "governmental
plan" as defined in Section 3(32) of ERISA, the closing of the
sale of the Property will not constitute or result in a violation
of state or local statutes regulating investments of and
fiduciary obligations with respect to governmental plans.
As of the Closing, Purchaser will be acting on its own
behalf and not on account of or for the benefit of any Plan.
Purchaser has no present intent to transfer the
Property to any entity, person or Plan which will cause a
violation of ERISA.
Purchaser shall not assign its interest under this
contract of sale to any entity, person, or Plan which will cause
a violation of ERISA.
Section 5.6 Survival of Purchaser's Representations
and Warranties. The representations and warranties of Purchaser
set forth in Section 5.5 hereof as updated as of the Closing in
accordance with the terms of this Agreement, shall survive
Closing for a period of one hundred eighty (180) days. Purchaser
shall have no liability to Seller for a breach of any
representation or warranty unless written notice containing a
description of the specific nature of such breach shall have been
given by Seller to Purchaser prior to the expiration of said one
hundred eighty (180) day period and an action shall have been
commenced by Seller against Purchaser within two hundred forty
(240) days of Closing.
ARTICLE VI
DEFAULT
Section 6.1 Default by Purchaser. In the event the
sale of the Property as contemplated hereunder is not consummated
due to Purchaser's default hereunder, Seller shall be entitled,
as its sole remedy, to terminate this Agreement and receive the
Deposit as liquidated damages for the breach of this Agreement,
it being agreed between the parties hereto that the actual
damages to Seller in the event of such breach are impractical to
ascertain and the amount of the Deposit is a reasonable estimate
thereof.
Section 6.2 Default by Seller. In the event the
sale of the Property as contemplated hereunder is not consummated
due to Seller's default hereunder, Purchaser shall be entitled,
as its sole remedy, either (a) to receive the return of the
Deposit, which return shall operate to terminate this Agreement
and release Seller from any and all liability hereunder, or (b)
to enforce specific performance of Seller's obligation to convey
the Property to Purchaser in accordance with the terms of this
Agreement, it being understood and agreed that the remedy of
specific performance shall not be available to enforce any other
obligation of Seller hereunder. Purchaser expressly waives its
rights to seek damages in the event of Seller's default
hereunder. Purchaser shall be deemed to have elected to
terminate this Agreement and receive back the Deposit if
Purchaser fails to file suit for specific performance against
Seller in a court having jurisdiction in the county and state in
which the Property is located, on or before thirty (30) days
following the date upon which Closing was to have occurred.
Section 6.3 Recoverable Damages. Notwithstanding
Sections 6.1 and 6.2 hereof, in no event shall the provisions of
Sections 6.1 and 6.2 limit the damages recoverable by either
party against the other party due to the other party's obligation
to indemnify such party in accordance with this Agreement.
ARTICLE VII
RISK OF LOSS
Section 7.1 Minor Damage. In the event of loss or
damage to the Property or any portion thereof which is not
"Major" (as hereinafter defined), this Agreement shall remain in
full force and effect provided that Seller shall, at Seller's
option, either (a) perform any necessary repairs, or (b) assign
to Purchaser all of Seller's right, title and interest in and to
any claims and proceeds Seller may have with respect to any
casualty insurance policies or condemnation awards relating to
the premises in question. In the event that Seller elects to
perform repairs upon the Property, Seller shall use reasonable
efforts to complete such repairs promptly and the date of Closing
shall be extended a reasonable time in order to allow for the
completion of such repairs. If Seller elects to assign a
casualty claim to Purchaser, the Purchase Price shall be reduced
by an amount equal to the lesser of the deductible amount under
Seller's insurance policy or the cost of such repairs as
determined in accordance with Section 7.3 hereof. Upon Closing,
full risk of loss with respect to the Property shall pass to
Purchaser.
Section 7.2 Major Damage. In the event of a "Major"
loss or damage, either Seller or Purchaser may terminate this
Agreement by written notice to the other party, in which event
the Deposit shall be returned to Purchaser. If neither Seller
nor Purchaser elects to terminate this Agreement within ten (10)
days after Seller sends Purchaser written notice of the
occurrence of such Major loss or damage (which notice shall state
the cost of repair or restoration thereof as opined by an
architect in accordance with Section 7.3 hereof), then Seller and
Purchaser shall be deemed to have elected to proceed with
Closing, in which event Seller shall, at Seller's option, either
(a) perform any necessary repairs, or (b) assign to Purchaser all
of Seller's right, title and interest in and to any claims and
proceeds Seller may have with respect to any casualty insurance
policies or condemnation awards relating to the premises in
question. In the event that Seller elects to perform repairs
upon the Property, Seller shall use reasonable efforts to
complete such repairs promptly and the date of Closing shall be
extended a reasonable time in order to allow for the completion
of such repairs. If Seller elects to assign a casualty claim to
Purchaser, the Purchase Price shall be reduced by an amount equal
to the lesser of the deductible amount under Seller's insurance
policy or the cost of such repairs as determined in accordance
with Section 7.3 hereof. Upon Closing, full risk of loss with
respect to the Property shall pass to Purchaser.
Section 7.3 Definition of "Major" Loss or Damage.
For purposes of Sections 7.1 and 7.2, "Major" loss or damage
refers to the following: (a) loss or damage to the Property
hereof such that the cost of repairing or restoring the premises
in question to substantially the same condition which existed
prior to the event of damage would be, in the opinion of an
architect selected by Seller and reasonably approved by
Purchaser, equal to or greater than Five Hundred Thousand Dollars
($500,000), and (b) any loss due to a condemnation which
permanently and materially impairs the current use of the
Property. If Purchaser does not give written notice to Seller of
Purchaser's reasons for disapproving an architect within five (5)
business days after receipt of notice of the proposed architect,
Purchaser shall be deemed to have approved the architect selected
by Seller.
ARTICLE VIII
COMMISSIONS
Section 8.1 Brokerage Commissions. With respect to
the transaction contemplated by this Agreement, Seller represents
that its sole broker is Xxxxxxx & Wakefield of California, Inc.
("Seller's Broker"), and Purchaser represents that it is not
represented by a broker. Each party hereto agrees that if any
person or entity, other than Seller's Broker, makes a claim for
brokerage commissions or finder's fees related to the sale of the
Property by Seller to Purchaser, and such claim is made by,
through or on account of any acts or alleged acts of said party
or its representatives, said party will protect, indemnify,
defend and hold the other party free and harmless from and
against any and all loss, liability, cost, damage and expense
(including reasonable attorneys' fees) in connection therewith.
The provisions of this paragraph shall survive Closing or any
termination of this Agreement.
ARTICLE IX
DISCLAIMERS AND WAIVERS
Section 9.1 No Reliance on Documents. Except as
expressly stated herein, Seller makes no representation or
warranty as to the truth, accuracy or completeness of any
materials, data or information delivered by Seller or its brokers
or agents to Purchaser in connection with the transaction
contemplated hereby. Purchaser acknowledges and agrees that all
materials, data and information delivered by Seller to Purchaser
in connection with the transaction contemplated hereby are
provided to Purchaser as a convenience only and that any reliance
on or use of such materials, data or information by Purchaser
shall be at the sole risk of Purchaser, except as otherwise
expressly stated herein. Neither Seller, nor any affiliate of
Seller, nor the person or entity which prepared any report or
reports delivered by Seller to Purchaser shall have any liability
to Purchaser for any inaccuracy in or omission from any such
reports.
SECTION 9.2 AS-IS SALE; DISCLAIMERS. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, IT IS UNDERSTOOD AND
AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE ANY
WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS
OR IMPLIED, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
PURCHASER ACKNOWLEDGES AND AGREES THAT UPON CLOSING
SELLER SHALL SELL AND CONVEY TO PURCHASER AND PURCHASER SHALL
ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS", EXCEPT TO
THE EXTENT EXPRESSLY PROVIDED OTHERWISE IN THIS AGREEMENT.
PURCHASER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT
LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING
TO THE PROPERTY OR RELATING THERETO (INCLUDING SPECIFICALLY,
WITHOUT LIMITATION, OFFERING PACKAGES DISTRIBUTED WITH RESPECT TO
THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGERS OF THE
PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR
PURPORTING TO REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN,
DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING, UNLESS SPECIFICALLY
SET FORTH IN THIS AGREEMENT. PURCHASER ALSO ACKNOWLEDGES THAT
THE PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE
PROPERTY IS BEING SOLD "AS-IS."
PURCHASER REPRESENTS TO SELLER THAT PURCHASER HAS
CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING, SUCH INVESTIGATIONS
OF THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PHYSICAL AND
ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS NECESSARY OR
DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PROPERTY
AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE TAKEN
WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND
NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR
ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO, OTHER THAN SUCH
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AS ARE
EXPRESSLY SET FORTH IN THIS AGREEMENT. UPON CLOSING, PURCHASER
SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT
LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY
PURCHASER'S INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE
DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND
SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS)
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION
(INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH
PURCHASER MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND
SELLER'S OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS)
AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT
CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY
APPLICABLE LAWS AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS,
CIRCUMSTANCES OR MATTERS REGARDING THE PROPERTY.
IN CONNECTION THEREWITH, PURCHASER EXRESSLY WAIVES ALL RIGHTS
UNDER CALIFORNIA CIVIL CODE SECTION 1542, WHICH 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 OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR."
Section 9.3 Survival of Disclaimers. The provisions
of this Article IX shall survive Closing or any termination of
this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.1 Confidentiality. Purchaser and its
representatives shall hold in strictest confidence all data and
information obtained with respect to Seller or its business,
whether obtained before or after the execution and delivery of
this Agreement, and shall not disclose the same to others;
provided, however, that it is understood and agreed that
Purchaser may disclose such data and information to the
employees, lenders, consultants, accountants and attorneys of
Purchaser provided that such persons agree in writing to treat
such data and information confidentially. In the event this
Agreement is terminated or Purchaser fails to perform hereunder,
Purchaser shall promptly return to Seller any statements,
documents, schedules, exhibits or other written information
obtained from Seller in connection with this Agreement or the
transaction contemplated herein. It is understood and agreed
that, with respect to any provision of this Agreement which
refers to the termination of this Agreement and the return of the
Deposit to Purchaser, such Deposit shall not be returned to
Purchaser unless and until Purchaser has fulfilled its obligation
to return to Seller the materials described in the preceding
sentence. In the event of a breach or threatened breach by
Purchaser or its agents or representatives of this Section 10.1,
Seller shall be entitled to an injunction restraining Purchaser
or its agents or representatives from disclosing, in whole or in
part, such confidential information. Nothing herein shall be
construed as prohibiting Seller from pursuing any other available
remedy at law or in equity for such breach or threatened breach.
The provisions of this Section 10.1 shall survive Closing or any
termination of this Agreement.
Section 10.2 Public Disclosure. Prior to and after
the Closing, any release to the public of information with
respect to the sale contemplated herein or any matters set forth
in this Agreement will be made only in the form approved by
Purchaser and Seller. The provisions of this Section 10.2 shall
survive the Closing or any termination of this Agreement.
Section 10.3 Assignment. Subject to the provisions
of this Section 10.3, the terms and provisions of this Agreement
are to apply to and bind the permitted successors and assigns of
the parties hereto. Purchaser may not assign its rights under
this Agreement without first obtaining Seller's written approval,
which approval may be given or withheld in Seller's sole
discretion. In the event Purchaser intends to assign its rights
hereunder, (a) Purchaser shall send Seller written notice of its
request at least ten (10) business days prior to Closing, which
request shall include the legal name and structure of the
proposed assignee, as well as any other information that Seller
may reasonably request, and (b) Purchaser and the proposed
assignee shall execute an assignment and assumption of this
Agreement in form and substance satisfactory to Seller, and (c)
in no event shall any assignment of this Agreement release or
discharge Purchaser from any liability or obligation hereunder.
Notwithstanding the foregoing, under no circumstances shall
Purchaser have the right to assign this Agreement to any person
or entity owned or controlled by an employee benefit plan if
Seller's sale of the Property to such person or entity would, in
the reasonable opinion of Seller's ERISA advisor, create or
otherwise cause a "prohibited transaction" under ERISA. Any
transfer, directly or indirectly, of any stock, partnership
interest or other ownership interest in Purchaser shall
constitute an assignment of this Agreement. The provisions of
this Section 10.3 shall survive the Closing or any termination of
this Agreement.
Section 10.4 Notices. Any notice pursuant to this
Agreement shall be given in writing by (a) personal delivery, (b)
reputable overnight delivery service with proof of delivery, (c)
United States Mail, postage prepaid, registered or certified
mail, return receipt requested, or (d) legible facsimile
transmission, sent to the intended addressee at the address set
forth below, or to such other address or to the attention of such
other person as the addressee shall have designated by written
notice sent in accordance herewith, and shall be deemed to have
been given upon receipt or refusal to accept delivery, or, in the
case of facsimile transmission, as of the date of the facsimile
transmission provided that an original of such facsimile is also
sent to the intended addressee by means described in clauses (a),
(b) or (c) above. Unless changed in accordance with the
preceding sentence, the addresses for notices given pursuant to
this Agreement shall be as follows:
If to Seller: Metropolitan Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: B. Xxxx Xxxxxxxxxx
Equity Investments
Telephone No. 000.000.0000
Telecopy No. 000.000.0000
If to Purchaser: Arden Realty, Inc.
0000 Xxxxxxxx Xxxxxxxxx, #000 Xxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
Section 10.5 Modifications. This Agreement cannot be
changed orally, and no executory agreement shall be effective to
waive, change, modify or discharge it in whole or in part unless
such executory agreement is in writing and is signed by the
parties against whom enforcement of any waiver, change,
modification or discharge is sought.
Section 10.6 Entire Agreement. This Agreement,
including the exhibits and schedules hereto, contains the entire
agreement between the parties hereto pertaining to the subject
matter hereof and fully supersedes all prior written or oral
agreements and understandings between the parties pertaining to
such subject matter, other than any confidentiality agreement
executed by Purchaser in connection with the Property.
Section 10.7 Further Assurances. Each party agrees
that it will execute and deliver such other documents and take
such other action, whether prior or subsequent to Closing, as may
be reasonably requested by the other party to consummate the
transaction contemplated by this Agreement. The provisions of
this Section 10.7 shall survive Closing.
Section 10.8 Counterparts. This Agreement may be
executed in counterparts, all such executed counterparts shall
constitute the same agreement, and the signature of any party to
any counterpart shall be deemed a signature to, and may be
appended to, any other counterpart.
Section 10.9 Facsimile Signatures. In order to
expedite the transaction contemplated herein, telecopied
signatures may be used in place of original signatures on this
Agreement. Seller and Purchaser intend to be bound by the
signatures on the telecopied document, are aware that the other
party will rely on the telecopied signatures, and hereby waive
any defenses to the enforcement of the terms of this Agreement
based on the form of signature.
Section 10.10 Severability. If any provision of this
Agreement is determined by a court of competent jurisdiction to
be invalid or unenforceable, the remainder of this Agreement
shall nonetheless remain in full force and effect; provided that
the invalidity or unenforceability of such provision does not
materially adversely affect the benefits accruing to any party
hereunder.
Section 10.11 Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State in which the Property is located. Purchaser and Seller
agree that the provisions of this Section 10.11 shall survive the
Closing or any termination of this Agreement.
Section 10.12 No Third-Party Beneficiary. The
provisions of this Agreement and of the documents to be executed
and delivered at Closing are and will be for the benefit of
Seller and Purchaser only and are not for the benefit of any
third party, and accordingly, no third party shall have the right
to enforce the provisions of this Agreement or of the documents
to be executed and delivered at Closing.
Section 10.13 Captions. The section headings
appearing in this Agreement are for convenience of reference only
and are not intended, to any extent and for any purpose, to limit
or define the text of any section or any subsection hereof.
Section 10.14 Construction. The parties acknowledge
that the parties and their counsel have reviewed and revised this
Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
Section 10.15 Recordation. This Agreement may not be
recorded by any party hereto without the prior written consent of
the other party hereto. The provisions of this Section 10.15
shall survive the Closing or any termination of this Agreement.
Section 10.16 Seller Approval. Notwithstanding any
other provision of this Agreement, the obligation of Seller to
consummate the transaction contemplated herein shall be subject
to the condition that the Real Estate Investments Committee, the
National Investments Committee and the Investments Committee of
the Board of Directors of Seller shall have approved the sale of
the Property to Purchaser, pursuant to the terms and conditions
of this Agreement, on or prior to the date that is thirty (30)
days following the date hereof (the "Committee Approval Date").
If Seller fails to give Purchaser notice within five (5) business
days after the Committee Approval Date that such committees have
approved the sale of the Property to Purchaser pursuant to the
terms hereof, then this Agreement shall terminate and neither
party shall have any further rights or obligations hereunder
(except for any indemnity obligations of either party pursuant to
the other provisions of this Agreement), the Deposit shall be
returned to Purchaser and each party shall bear its own costs
hereunder.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the Effective Date.
SELLER:
METROPOLITAN LIFE INSURANCE COMPANY
a New York corporation
By: /s/ B. Xxxx Xxxxxxxxxx
Title: Investment Officer
PURCHASER:
ARDEN REALTY, INC.
a Maryland corporation
By: /s/ Xxxxxxx X. Xxxxx
Title: Chairman of the Board and
Chief Executive Officer
Escrow Agent executes this Agreement below solely for the
purpose of acknowledging that it agrees to be bound by the
provisions of Sections 1.5, 1.6 and 1.7 hereof.
ESCROW AGENT:
Chicago Title Company
a _____________________
By: Xxxxx Xxxxxxx
Title: ____________________
The Company hereby agrees to furnish supplementally the omitted
exhibits and schedules to the Commission upon request.
