PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
1. IDENTIFICATION OF PARTIES.
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (this "Agreement") is entered into as of March 12, 1997,
by and between ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited
partnership ("Purchaser"), and QRE HOLDING COMPANY, a California
corporation ("Seller").
2. DESCRIPTION OF THE PROPERTY.
Seller hereby agrees to sell, assign and convey to
Purchaser, and Purchaser hereby agrees to purchase from Seller, all of
Seller's right, title and interest in and to the following:
(a) That certain real property located at 00000 Xxxxxxx
Xxxxxxxxx, xx xxx Xxxx xx Xxx Xxxxxxx, Xxxxxx of Los Angeles,
State of California, more particularly described on Exhibit A
attached hereto and incorporated herein by this reference (the
"Land"), together with any improvements located thereon (the
"Improvements");
(b) All of Seller's interest as lessor in all leases
covering the Land and Improvements (said leases, together with
any and all amendments, modifications or supplements thereto, are
hereinafter referred to collectively as the "Leases" and are
identified on the Schedule of Leases attached hereto as
Exhibit B);
(c) All rights, privileges, easements and appurtenances to
the Land and the Improvements, if any, including, without
limitation, all of Seller's right, title and interest, if any, in
and to all mineral and water rights and all easements, rights-of-way and
other appurtenances used or connected with the beneficial
use or enjoyment of the Land and the Improvements (the Land, the
Improvements and all such easements and appurtenances (including,
without limitation, Seller's interest as lessor under the Leases)
are sometimes collectively hereinafter referred to as the "Real
Property");
(d) All tangible personal property and fixtures located
now or at the Closing on or about the Land or Improvements or
attached or appurtenant thereto or used in connection with the
operation thereof, but excluding: (i) tangible personal property
owned by tenants under Leases in their capacity as tenants, and
(ii) all other tangible personal property and fixtures located on
or about the Land or Improvements which are not owned by Seller.
(The tangible personal property and fixtures described in the
preceding sentence is referred to in this Agreement as the
"Personal Property"); and
(e) All non-exclusive trademarks and trade names (if any)
used or useful in connection with the Real Property, but only to
the extent that the same are not trademarks or trade names of
Seller or any of Seller's affiliated companies (collectively, the
"Trade Names"), together with Seller's interest (if any) in and
to any service contracts, utility contracts, telephone exchange
numbers, advertising materials, guarantees, licenses, approvals,
certificates, plans and specifications, permits, governmental
approvals and development rights, and warranties relating to the
Property, to the extent assignable (collectively, the "Intangible
Property"). (The Real Property, the Personal Property, the Trade
Names and the Intangible Property are sometimes collectively
hereinafter referred to as the "Property").
3. THE PURCHASE PRICE.
The purchase price for the Property is Six Million Six
Hundred Fifty and no/100s Dollars ($6,650,000.00) (the "Purchase
Price") and shall be paid to Seller by Purchaser at the Closing
(as that term is defined in Section 15 below) as follows:
(a) Within two (2) business days after execution of this
Agreement by all parties, Purchaser shall deposit in escrow with
Commonwealth Land Title Company, 000 Xxxx Xxxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 ("Escrow Company") an
xxxxxxx money deposit in immediately available funds in the
amount of One Hundred Thousand and no/100s Dollars ($100,000.00)
(the "Deposit"). The Deposit paid by Purchaser pursuant to the
terms hereof shall be held by Escrow Company in an interest
bearing account insured by the federal government in an
institution as directed by Purchaser and reasonably acceptable to
Seller. In the event the purchase and sale of the Property is
consummated as contemplated hereunder, the Deposit plus all
interest accrued thereon shall be paid to Seller and credited
against the Purchase Price. In the event the purchase and sale
of the Property is not consummated because of the failure of any
Purchaser's Condition Precedent (as defined in Section 10 below)
or any other reason except for a default under this Agreement on
the part of Purchaser, the Deposit plus all interest accrued
thereon shall be immediately refunded to Purchaser. In the event
the purchase and sale of the Property is not consummated because
of a default under this Agreement on the part of Purchaser, the
Deposit plus all interest accrued thereon shall be paid to and
retained by Seller pursuant to Section 18(b) below.
(b) The balance of the Purchase Price over and above the
amount paid by or credited to Purchaser pursuant to Section 3(a)
above shall be paid to Seller by wire transfer of immediately
available funds at the Closing, net of all prorations as provided
herein.
4. TITLE.
(a) Seller has obtained from Commonwealth Land Title
Company, 000 Xxxx Xxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000
("Title Company"), and Purchaser acknowledges receipt of, a
preliminary title report dated February 6, 1997, Order No.
1704096-27, pertaining to the Real Property (the "PTR"), together
with copies of all documents relating to the title exceptions
referred to in such PTR. Purchaser acknowledges receipt of the
PTR and the title exceptions referred to therein.
(b) Purchaser elects to obtain an ALTA extended coverage
policy of title insurance. Purchaser shall obtain an updated
survey of the Real Property (the "Survey"), a copy of which shall
be promptly delivered to Seller and Title Company. The Survey
shall be sufficient to enable Title Company at the Closing to
issue an ALTA extended owner's policy of title insurance (with
mechanic's lien coverage), and shall be certified to Purchaser
and Title Company. Seller shall pay for the Survey. At Closing,
Purchaser shall pay Seller Three Thousand and no/100s Dollars
($3,000.00) towards the cost of the Survey.
(c) As soon as possible after the execution of this
Agreement, Purchaser shall confer with the Title Company and
attempt to resolve title matters which Purchaser might otherwise
disapprove. Within three (3) business days after Purchaser
receives the Survey, Purchaser shall notify Seller in writing of
any title exceptions identified in the PTR (other than exceptions
("Survey Exceptions") which are listed in any amendment or
supplement thereof as a result of the Survey and were not listed
in the February 6, 1997 PTR) which Purchaser disapproves. Within
three (3) business days after Purchaser receives the Survey,
Purchaser shall notify Seller in writing of any Survey Exceptions
which Purchaser disapproves. Any exception not disapproved in
writing by the applicable date shall be deemed approved by
Purchaser, and shall constitute a "Permitted Exception"
hereunder. Purchaser and Seller hereby agree that (i) all non-delinquent
property taxes and assessments, except for the lien of
supplemental taxes which are due as a result of an event
occurring prior to the Closing, (ii) the rights of the tenants
under the Leases, and (iii) all matters created by or on behalf
of Purchaser, including, without limitation, any documents or
instruments to be recorded as part of any financing for the
acquisition of the Property by Purchaser, shall constitute
"Permitted Exceptions." No more than two (2) business days after
Purchaser notifies Seller of any disapproved title exceptions,
Seller shall notify Purchaser in writing of any disapproved title
exceptions which Seller is unable or unwilling to cause to be
removed or insured against prior to or at Closing and, with
respect to such exceptions, Purchaser then shall elect, by giving
written notice to Seller and Escrow Company within one (1)
business day thereafter, (x) to terminate this Agreement, or (y)
to waive its disapproval of such exceptions, in which case such
exceptions shall then be deemed to be Permitted Exceptions.
Purchaser's failure to give such notice shall be deemed an
election to waive the disapproval of any such exception. In the
event Purchaser elects to terminate this Agreement in accordance
with clause (x) above, the Deposit, plus all interest accrued
thereon, shall be immediately refunded to Purchaser; provided,
however, that Purchaser and Seller each shall be responsible for
one-half of any title or escrow cancellation fees.
Notwithstanding anything to the contrary contained herein, Seller
shall cause all mortgages, deeds of trust and monetary liens
(including liens for delinquent or supplemental taxes as set
forth above, mechanic's liens and judgement liens) affecting the
Property as may be shown in the PTR or any update thereof
(including the title policy to be issued to Purchaser at the
Closing), and all indebtedness secured thereby (collectively,
"Monetary Liens") to be fully satisfied, released and discharged
of record on or prior to the Closing. If any Monetary Liens
remain at the Closing, then Purchaser shall be entitled to offset
against the Purchase Price and receive a credit in Escrow for the
amounts expended to discharge the same, provided that before
discharging any Monetary Lien, Purchaser shall give Seller
written notice and reasonable opportunity to cause any such lien
to be released or discharged of record (including, without
limitation, by posting of a bond in accordance with Civil Code ss.
3143).
(d) At Purchaser's request, upon prior arrangement with
Seller, at any time during reasonable business hours within one
(1) year after the Closing, Seller shall, at Purchaser's expense,
provide to Purchaser's designated independent auditor, access to
the books and records of the Property, regarding the period for
which Purchaser is required by applicable rules or regulations of
the Securities Exchange Commission to have audited financial
statements prepared with respect to the Property, to the extent
that such books, records and related information are in the
Seller's possession or control and relate to the period during
which Seller held title to the Property; provided however, such
books and records shall not include Internal Analyses (as defined
in Section 5(c)), and Seller shall not be deemed to make any
representations or warranties of any kind regarding the accuracy
or thoroughness of such books and records. Seller further agrees
to provide to Purchaser's designated auditor a letter in the form
of Exhibit L.
5. INSPECTION.
(a) As used in this Agreement, the term "Due Diligence
Period" shall mean the period from the date hereof until 5:00
p.m. Los Angeles, California time on March 24, 1997. During the
Due Diligence Period, and with reasonable advance notice to
Seller, Purchaser, its agents and representatives shall be
entitled to enter onto the Real Property during reasonable
business hours (subject to the rights of tenants in possession)
to perform inspections and tests of the Property and the
structural and mechanical systems within any Improvements;
provided, however, that in no event shall (i) such inspections or
tests disrupt or disturb the on-going operation of the Property
or the rights of the tenants at the Property, or (ii) Purchaser
or its agents or representatives drill or bore on or through the
surface of the Property without Seller's prior written consent,
which consent may be given or withheld in Seller's sole and
absolute discretion. After making such tests and inspections,
Purchaser agrees to promptly restore the Property to its
condition prior to such tests and inspections (which obligation
shall survive for one (1) year after the Closing or any
termination of this Agreement). Prior to Purchaser entering the
Property to conduct the inspections and tests described above,
Purchaser shall obtain and maintain, and shall cause each of its
contractors and agents to maintain (and shall deliver to Seller
evidence thereof), at Purchaser's sole cost and expense, general
liability insurance, from an insurer reasonably acceptable to
Seller, in the amount of One Million and no/100s Dollars
($1,000,000.00) combined single limit for personal injury and
property damage per occurrence, such policies to name Seller as
an additional insured party, which insurance shall provide
coverage against any claim for personal liability or property
damage caused by Purchaser or its agents, employees or
contractors in connection with such inspections and tests.
(b) Purchaser agrees to keep the Property free from all
liens and to indemnify, defend, and hold harmless Seller, and
Seller's officers, directors, shareholders, beneficiaries,
partners, agents, employees and attorneys, and their respective
successors and assigns, from and against all claims, actions,
losses, liabilities, damages, costs and expenses (including, but
not limited to, reasonable attorneys' fees and costs) incurred,
suffered by, or claimed against Seller by reason of personal
injury, bodily injury, property damage or mechanics' or
materialmens' liens caused by Purchaser and/or its agents,
employees or contractors in exercising its rights under this
Section 5. This indemnity shall survive the Closing or any
termination of this Agreement.
(c) During the Due Diligence Period and with reasonable
advance notice to Seller, Purchaser, its agents and repre-
sentatives shall be entitled to inspect, during Seller's regular
business hours, material documents, if any, relating to the
Property in the possession or control of Seller or Seller's
property manager (provided, however, that, except as expressly
set forth herein, Seller makes no representations or warranties
of any kind regarding the accuracy or thoroughness of the
information contained in such documents), excluding, however,
Seller's internal appraisals and economic evaluations of the
Property and reports regarding the Property prepared by Seller,
Trust Company of the West, Westmark Realty Advisors L.L.C. and/or
TCW Realty Advisors solely for internal use or for the
information of the investors in Seller (collectively, "Internal
Analyses").
6. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Purchaser that the
following matters are true and correct as of the execution of this
Agreement and will also be true and correct as of the Closing:
(a) Seller is a corporation, duly organized, validly
existing and in good standing under the laws of the State of
California.
(b) This Agreement is, and all the documents executed by
Seller which are to be delivered to Purchaser at the Closing will
be, duly authorized, executed, and delivered by Seller, and is
and will be legal, valid, and binding obligations of Seller
enforceable against Seller in accordance with their respective
terms (except to the extent that such enforcement may be limited
by applicable bankruptcy, insolvency, moratorium and other
principles relating to or limiting the right of contracting
parties generally), and does not and will not violate any
provisions of any agreement to which Seller is a party or to
which it is subject.
(c) Except as set forth in the materials delivered to
Purchaser pursuant to Section 8 below or as otherwise disclosed
in writing by Seller to Purchaser prior to the end of the Due
Diligence Period, to Seller's actual knowledge, there are no
pending or threatened legal proceedings or administrative actions
of any kind or character adversely affecting the Property or
Seller's interest therein.
(d) Except as set forth in the materials delivered to
Purchaser pursuant to Section 8 below, or as otherwise disclosed
in writing by Seller to Purchaser prior to the end of the Due
Diligence Period, Seller has received no written notice from any
city, county, state or other government authority of any
violation of any statute, ordinance, regulation, or
administrative or judicial order or holding, whether or not
appearing in public records, with respect to the Property, which
violation has not been corrected.
(e) Except as set forth in the materials delivered to
Purchaser pursuant to Section 8 below, or as otherwise disclosed
in writing by Seller to Purchaser prior to the end of the Due
Diligence Period, Seller has received no written notice from any
city, county, state or other government authority (i) of any
order or directive requiring any work of repair, maintenance or
improvement be performed on the Property, or (ii) relating to
defects in the Improvements or relating to noncompliance with any
applicable building code or restriction that has not been
corrected, or relating to any threat of impending condemnation.
(f) Except as set forth in the materials delivered to
Purchaser pursuant to Section 8 below, or as otherwise disclosed
in writing by Seller to Purchaser prior to the end of the Due
Diligence Period, Seller has received no written notice from
governmental authorities that (i) the Property is in violation of
any federal, state and local laws, ordinances and regulations
applicable to the Property with respect to hazardous or toxic
substances or industrial hygiene (collectively, "Environmental
Laws"), which violation has not been corrected, or (ii) past or
current tenants of all or any portion of the Property have owned,
used, generated, manufactured, stored, handled, released or
disposed of any hazardous or toxic substances on the Property in
violation of applicable Environmental Laws. Notwithstanding the
foregoing representations and warranties, the acts, if any, of
Seller's past or current tenants shall not be imputed to Seller.
(g) To the best of Seller's knowledge, and except as set
forth in the tenant estoppel certificates delivered to Purchaser
pursuant to Section 10(a) below or as otherwise specifically
disclosed in writing to Purchaser prior to the end of the Due
Diligence Period, there is no current default in the performance
of the obligations of any party under the Leases.
(h) Except as set forth in the tenant estoppel
certificates delivered to Purchaser pursuant to Section 10(a)
below or as otherwise specifically disclosed in writing to
Purchaser prior to the end of the Due Diligence Period: (i) the
Leases are in full force and effect, (ii) the copies of the
Leases given to Purchaser by Seller are true and complete copies
of the Leases, (iii) the term of the Leases and obligation to pay
rent thereunder has commenced, (iv) to Seller's actual knowledge,
the tenants thereunder are in possession and occupancy thereof,
(v) no rebates, rental concessions, free rent periods, credits,
setoffs or rent reductions relating to any period after the
Closing have given by Seller, (vi) no tenant is affiliated with
Seller, and (vii) Seller has not entered into any modifications
of the Leases. There are no outstanding assignments by Seller of
Seller's interest in the Leases.
(i) To the best of Seller's knowledge, except as disclosed
in writing to Purchaser prior to the end of the Due Diligence,
there are no management, employee, maintenance, operating,
service or other contracts or arrangements of a similar nature
affecting the Property which would be binding on Purchaser
subsequent to the Closing, other than those delivered to
Purchaser pursuant to Section 8 hereof. The copies of the
documents and materials delivered to Purchaser by Seller pursuant
to Section 8 hereof constitute true and complete copies of such
documents in effect on the date hereof, except as otherwise noted
in such documents and materials. As of the date hereof, Seller
has neither sent nor received written notice declaring a default
or breach under any such documents or materials, which has not
been subsequently cured, except as disclosed in such documents or
materials and except for claims which Seller has or may have
against its insurers or others relating to or arising out of the
January 17, 1994 earthquake (the "Earthquake Claims"), which
Earthquake Claims Seller hereby expressly reserves and are not
being transferred to Purchaser.
(j) Except as set forth in the tenant estoppel
certificates delivered to Purchaser pursuant to Section 10(a)
below or as otherwise specifically disclosed in writing to
Purchaser prior to the end of the Due Diligence Period, the Rent
Roll (as defined in Section 8) is true and correct, and sets
forth all Leases, and amendments or modifications thereof which
would be binding on Purchaser subsequent to Closing.
(k) Except as set forth in the tenant estoppel
certificates delivered to Purchaser pursuant to Section 10(a)
below or as otherwise specifically disclosed in writing to
Purchaser prior to the end of the Due Diligence Period, to the
best of Seller's knowledge, there are no assignments or subleases
of any of the Leases.
(l) The inventory of Personal Property delivered pursuant
to Section 8 is true and correct in all material respects.
As used in this Agreement, (x) the phrase "to Seller's
actual knowledge" or words of similar import shall mean the actual
(and not constructive or imputed) knowledge, without independent
investigation or inquiry, of Xxxxxxx X. Xxxxxx, the Portfolio Manager,
and Xxxxxx Xxxxxxx, Asset Manager, and (y) the phrase "to the best of
Seller's knowledge" shall mean the actual knowledge, after reasonable
investigation and inquiry (but not constructive or imputed knowledge)
of Xxxxxxx X. Xxxxxx and Xxxxxx Xxxxxxx, and Seller represents s of this
Agreement, unless otherwise specifically provided.
(k) This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
(l) If any action is brought by either party against the
other party, relating to or arising out of this Agreement, the
transaction described herein or the enforcement hereof, the
prevailing party shall be entitled to recover from the other par-
ty reasonable attorneys' fees, costs and expenses incurred in
connection with the prosecution or defense of such action. For
purposes of this Agreement, the term "attorneys' fees" or
"attorneys' fees and costs" shall mean the fees and expenses of
counsel to the parties hereto, which may include printing,
photostating, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals and other
persons not admitted to the bar but performing services under the
supervision of an attorney, and the costs and fees incurred in
connection with the enforcement or collection of any judgment
obtained in any such proceeding. The provisions of this Section
21(l) shall survive the entry of any judgment, and shall not
merge, or be deemed to have merged, into any judgment.
(m) This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto and to their respective
transferees, successors, and assigns. Neither this Agreement nor
any of the rights or obligations of Seller or Purchaser hereunder
shall be transferred or assigned by Seller or Purchaser without
the prior written consent of the non-assigning party.
(n) Exhibits A through L, inclusive, attached hereto are
incorporated herein by reference.
(o) Notwithstanding anything to the contrary contained
herein, this Agreement shall not be deemed or construed to make
the parties hereto partners or joint venturers, or to render
either party liable for any of the debts or obligations of the
other, it being the intention of the parties to merely create the
relationship of Seller and Purchaser with respect to the Property
to be conveyed as contemplated hereby.
(p) This Agreement shall not be recorded or filed in the
public land or other public records of any jurisdiction by either
party and any attempt to do so may be treated by the other party
as a breach of this Agreement.
(q) Each party agrees that, except as otherwise set forth
in this Agreement or provided by law or unless compelled by an
order of a court, it shall keep the contents of this Agreement
and any information related to the transaction contemplated
hereby confidential (except that Purchaser may disclose such
matters in accordance with the provisions of Section 9 above) and
further agrees to refrain from generating or participating in any
publicity statement, press release, or other public notice
regarding this transaction without the prior written consent of
the other party unless required under applicable law or by a
court order. The provisions of this Section 21(q) shall survive
the Closing or any termination of this Agreement and shall not be
merged into any instrument or conveyance delivered at the
Closing.
(r) Seller and Purchaser agree that it is their specific
intent that no broker shall be a party to or a third party
beneficiary of this Agreement or the escrow; and further that the
consent of a broker shall not be necessary to any agreement,
amendment, or document with respect to the transaction
contemplated by this Agreement.
(s) In the event that any of the dates specified in this
Agreement shall fall on a Saturday, a Sunday, or a holiday, then
the date of such action shall be deemed to be extended to the
next business day.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as
of the date first above written.
SELLER: QRE HOLDING COMPANY,
a California corporation
By:/s/ Xxxxxxx X. Xxxxxx
Its Authorized Signatory
By:/s/ Xxxxxxx X. Xxxxxx
Its Authorized Signatory
PURCHASER: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: ARDEN REALTY GROUP, INC.,
a Maryland corporation,
as General Partner
By:/s/ Xxxxxxx X. Xxxxx
Its: Chairman and CEO
