AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
between
JC INVESTMENT & REALTY, INC.
a Washington corporation
as Seller
and
ARDEN REALTY LIMITED PARTNERSHIP
a Maryland limited partnership
as Buyer
for
HARBOR CORPORATE CENTER
00000 XXXXXXXX XXXXXX
XXXXXXX, XXXXXXXXXX
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW
INSTRUCTIONS ("Agreement") dated as of the _____ day of
May, 1997 is by and between JC Investment & Realty, Inc.
("Seller"), and Arden Realty Limited Partnership ("Buyer").
Capitalized terms used in the Recitals below, not otherwise
defined therein, shall have the meanings ascribed to them
in Section 1 of this Agreement.
R E C I T A L S
WHEREAS, this Agreement is made and entered into with
reference to the following facts:
WHEREAS, Seller is the owner of the Property.
WHEREAS, Buyer desires to purchase, and Seller desires
to sell, the Property on the terms and conditions set forth
in this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the
following terms shall have the following meanings:
1.1 "Appurtenances" means all rights, privileges and
easements appurtenant to the Land, including, without
limitation, all minerals, oil, gas and other hydrocarbon
substances in, on and under the Land, as well as all
development rights, air rights, water, water rights and
water stock relating to the Land and any other easements
appurtenant to the Land.
1.2 "Assignment of Intangible Property" means the
Assignment of Intangible Property, to be duly executed and
delivered by Seller in accordance with Section 4.1 of this
Agreement, assigning to Buyer all of Seller's right, title
and interest, if any, in and to the Intangible Property.
The Assignment of Intangible Property shall be in the form
of, and upon the terms contained in, Exhibit "B".
1.3 "Assignment of Leases" means the Assignment of
Leases, to be duly executed and delivered by Seller in
accordance with Section 4.1 of this Agreement, assigning to
Buyer all of Seller's right, title and interest in and to
the Leases. The Assignment of Leases shall be in the form
of, and upon the terms contained in, Exhibit "C".
1.4 "Xxxx of Sale" means the Xxxx of Sale, to be duly
executed and delivered by Seller in accordance with
Section 4.1 of this Agreement, conveying to Buyer all of
the Personal Property. The Xxxx of Sale shall be in the
form of, and upon the terms contained in, Exhibit "D".
1.5 "Closing" means the consummation of the
conveyances of the Property, the Leases and the other
transactions contemplated under this Agreement, all of
which shall occur on or before the Closing Date.
1.6 "Closing Date" means July 22, 1997, unless
otherwise mutually agreed to in writing by Buyer and Seller
or extended pursuant to the terms of this Agreement.
1.7 "Code" means the United States Internal Revenue
Code of 1986, as amended.
1.8 "Deed" means the Grant Deed, to be duly executed,
acknowledged and delivered in recordable form by Seller in
accordance with Section 4.1 of this Agreement, conveying to
Buyer good and marketable fee simple title to the Real
Property. The Deed shall be in the form of, and upon the
terms contained in, Exhibit "E".
1.9 "Deposit" means the sum of One Hundred Thousand
Dollars ($100,000.00) to be delivered concurrently with the
mutual execution of this Agreement by Buyer and Seller and
delivery of the same to Escrow Holder in accordance with
Section 3.1 of this Agreement.
1.10 "Due Diligence Period" means the period commencing
on the date this Agreement is executed and delivered by
both Buyer and Seller and ending at 6:00 p.m. (California
time) on the date which is thirty (30) days following the
date that an escrow is opened with Escrow Holder for the
consummation of the transaction contemplated hereby.
1.11 "Escrow Holder" means Commerce Escrow Company.
1.12 "Fixtures" means all fixtures placed on, attached
to, or located at and used in connection with the operation
of, the Land and which are owned by Seller.
1.13 "Governmental Regulations" means any local, state,
and federal laws, ordinances, rules, requirements,
resolutions, policy statements and regulations (including,
without limitation, those relating to land use,
subdivision, zoning, environmental, labor relations,
notification of sale to employer, Hazardous Materials,
occupational health and safety, water, earthquake hazard
reduction and building and fire codes) bearing on the
construction, development, alteration, rehabilitation,
maintenance, use, operation, or sale of the Property.
1.14 "Hazardous Materials" means any hazardous or toxic
substance, material or waste which is or becomes regulated
by any local governmental authority, any agency of the
State of California or any agency of the United States
Government. The term "Hazardous Materials" includes,
without limitation, any material or substance which (a)
contains petroleum or any petroleum by-products,
(b) contains asbestos, (c) contains urea formaldehyde foam
insulation, (d) is designated as a "hazardous substance"
pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. 1317), (e) is defined as a
"hazardous waste" pursuant to Section 1004 of the Federal
Resource Conservation and Recovery Act, 42 U.S.C. 6901
(42 U.S.C. 6903), or (f) is defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42
U.S.C. 9601 (42 U.S.C. 9601). Each reference to a
statute or law in this definition shall be deemed to
include any amendments thereto which are enacted from time
to time.
1.15 "Intangible Property" means all of Seller's right,
title and interest in and to any and all intangible
personal property now and through the Closing Date owned by
Seller and used in connection with the ownership,
construction, development, use and/or operation of the Real
Property and/or Personal Property, including, without
limitation, the Service Contracts (to the extent approved
in writing by Buyer), the Licenses and Permits, the
Intellectual Property and the Records and Plans and the
Warranties.
1.16 "Land" means the real property located at 00000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx, as legally described
in Exhibit "A".
1.17 "Leases" means the existing leases relating to the
Real Property, which Leases are listed on Exhibit "F".
1.18 "Licenses and Permits" means all of Seller's
right, title, interests, privileges, benefits and remedies
in, to and under all authorizations, approvals, permits,
certificates of occupancy, licenses, agreements, variances,
tentative maps, final maps, plans and specifications and
land use entitlements held by Seller and/or relating to the
construction, reconstruction, occupancy, operation or use
of any part of the Real Property or Personal Property
(e.g., all building permits and certificates of occupancy).
1.19 "Notices To Tenants" means the notices from Seller
to the tenants under the Leases whereby such tenant is
notified that the Property has been transferred by Seller
to Buyer and instructing it to pay any and all rents and
other sums payable under the Leases from and after the
Closing directly to Buyer or as otherwise directed by
Buyer, in the form of Exhibit "G".
1.20 "Personal Property" means all personal property of
Seller located on or in or used in connection with the Real
Property, as set forth on Exhibit "O".
1.21 "Property" means the Real Property, the Personal
Property and the Intangible Property.
1.22 "Purchase Price" means the sum of Four Million
Four Hundred Thousand Dollars ($4,400,000).
1.23 "Real Property" means the Land, the improvements
situated on the Land including surface parking, the
Fixtures and the Appurtenances.
1.24 "Records and Plans" means (a) all books and
records maintained in connection with the ownership,
development, construction, maintenance or operation of the
Property, (b) all preliminary, final and "as-built" plans
and specifications respecting the Real Property, and
(c) all structural reviews, architectural drawings, and
engineering, soil, seismic, geologic and architectural
reports, studies and certificates and other documents
pertaining to the Real Property (including those which
include comments by any building or safety engineer,
inspector or other person who regularly makes such
inspections) which are within the possession of, under the
control of, or reasonably available (without cost or
expense) to Seller.
1.25 "Service Contracts" means the management agreement
together with all supplements, amendments and modifications
thereto, relating to the management of the Property, which
is set forth on Exhibit "H" attached to this Agreement.
1.26 "Tenant Estoppel" means the written statement in
the form of, and upon the terms contained in, Exhibit "I",
in favor of Buyer from the tenant which is a party to each
of the Leases, dated not earlier than fifteen (15) days
prior to the Closing Date, for tenants occupying in the
aggregate at least eighty percent (80%) of the leased Real
Property.
1.27 "Title Company" means First American Insurance
Company.
1.28 "Title Policy" means an ALTA owner's title policy
(Form B-1970) issued by the Title Company for the benefit
of Buyer, which Title Policy shall have a liability limit
in the amount of the Purchase Price, shall include those
endorsements reasonably requested by Buyer and shall show
only those matters which constitute Permitted Exceptions
(defined below).
1.29 "Transferor's Certificate" means the certificate,
to be duly executed by Seller under penalty of perjury and
delivered by Seller in accordance with Section 4.1 of this
Agreement, certifying that Seller is not a "foreign person"
in accordance with the provisions of Section 1445 of the
Code and any similar provisions of applicable state law.
The Transferor's Certificate shall be in the form of, and
upon the terms contained in, Exhibit "J".
1.30
1.30 "Warranties" means all third party warranties and
guarantees relating to the Property.
2. ESCROW. The purchase and sale of the Property
shall be consummated through an escrow at Escrow Holder.
As soon as reasonably practicable following the mutual
execution of this Agreement, but in no event later than
three (3) days after the date of this Agreement, the
parties shall deliver to Escrow Holder a fully executed
counterpart of this Agreement, which shall constitute its
escrow instructions. The parties shall execute such
additional escrow instructions, not inconsistent with this
Agreement, as Escrow Holder shall deem reasonably necessary
for its protection. In the event of any conflict between
this Agreement and any additional escrow instructions, the
terms of this Agreement shall govern.
3. AGREEMENT TO SELL; PURCHASE PRICE. Seller agrees
to sell to Buyer, and Buyer agrees to purchase from Seller,
the Property in accordance with the terms, and subject to
the conditions, of this Agreement. The Purchase Price for
the Property will be paid as follows:
3.1 Deposit. Concurrently with the execution of this
Agreement by Buyer and Seller and delivery of the same to
Escrow Holder, Buyer will deliver the Deposit to Escrow
Holder to hold in trust. Escrow Holder will invest the
Deposit in an interest bearing account with a responsible
federally-insured institutional lender approved by Buyer
and Seller, and interest will be for the account of Buyer
except as otherwise provided in this Agreement and will be
credited against the Purchase Price at Closing.
3.2 Balance of Purchase Price. The entire balance of
the Purchase Price (after taking into account the
adjustments described in Sections 10 and 11), shall be paid
to Seller, either (a) in immediately available funds, or
(b) at the written election of Seller at least twenty one
days prior to Closing, in Operating Partnership Units of
Arden Realty Limited Partnership ("OP Units") through
Escrow Holder, at Closing. Each OP Unit shall have a value
equal to one (1) share of Arden Realty, Inc. common stock
as of the date of which is three (3) business days prior to
Closing. (Arden Realty, Inc. is listed on the New York
Stock Exchange under the symbol "ARI"). The OP Units shall
be exchanged in accordance with that certain Amendment to
Limited Partnership Agreement, in the form attached hereto,
as Exhibit "P", and by this referenced incorporated herein.
4. DELIVERIES AT CLOSING; CLOSING PROCEDURES. The
Closing will take place on the Closing Date. Buyer may
elect to close escrow on an earlier date by giving written
notice to Seller and Escrow Holder of its intent to close
escrow earlier at least five (5) days in advance of such
earlier date, but such notice shall not be binding upon
Buyer, and if Buyer is not in a position to close on the
earlier date, whether due to inability to expedite issuance
of Operating Partnership Units as elected by Seller, or
otherwise Buyer shall have until the Closing Date to close.
4.1 By Seller. At least one (1) business day prior to
the Closing, Seller shall deliver or cause to be delivered
to Escrow Holder (unless otherwise indicated) the following
items, duly executed and, where appropriate, acknowledged
by Seller:
4.1.1 The Deed.
4.1.2 The Xxxx of Sale.
4.1.3 The Assignment of Intangible Property.
4.1.4 The Assignment of Leases.
4.1.5 The Notices to Tenants.
4.1.6 The Transferor's Certificate.
4.1.7 The Tenant Estoppels.
4.1.8 If Seller so elects pursuant to Section 3.2
above, the Admission of New Partner and Amendment to
Limited Partnership Agreement.
4.1.9 All such further confirmations, satisfactions,
releases, approvals, consents and any and all such further
instruments as may be reasonably necessary, appropriate,
expedient or proper in the reasonable opinion of Title
Company in order to issue the Title Policy.
4.2 By Buyer. At the Closing, Buyer will deliver or
cause to be delivered to Escrow Holder or the Seller the
following items, duly executed and, where appropriate,
acknowledged by Buyer:
4.2.1 The net balance of the Purchase Price, to be
paid in accordance with Section 3.2 of this Agreement,
after deducting the Deposit plus any interest accrued
thereon, and after taking into account the adjustments and
cost allocations in accordance with Sections 10 and 11.
4.2.2 Counterparts of the Assignment of Intangible
Property and the Assignment of Leases.
4.2.3 If Seller so elects pursuant to Section 3.2(b)
above, the Admission of New Partner and Amendment to
Limited Partnership Agreement.
4.3 By Buyer and Seller. Buyer and Seller will each
deposit such other instruments consistent with this
Agreement as are reasonably required to effectuate the
transactions contemplated under this Agreement.
4.4 Closing Procedures. Provided that Escrow Holder has
received the documents and funds described in Sections 4.1
and 4.2 above and has not received notice from any party
hereto either that an agreement of another party hereunder
has not been performed, that a condition set forth herein
has not been satisfied or waived or that this Agreement has
terminated (by its terms or by an election duly made
hereunder), and further provided that the issuance of, or
an unconditional commitment to issue, the Title Policy has
been obtained, Escrow Holder is authorized and instructed
at 8:00 a.m. on the Closing Date to:
4.4.1 Record the Deed with the County Recorder of Los
Angeles County, California.
4.4.2 Cause the Title Policy to be issued by the
Title Company.
4.4.3 Deliver to Buyer: the Assignment of Leases, the
Assignment of Intangible Property, the Xxxx of Sale, the
Transferor's Certificate, all documents and items required
to be delivered by Seller pursuant to Sections 4.1
and 8.1.4 or any other provision of this Agreement, not
otherwise previously delivered directly to Buyer, all other
items deposited by Seller with Escrow Holder pertaining to
the Property, and any funds deposited by Buyer in excess of
the amount to be paid by Buyer under the terms of this
Agreement.
4.4.4 Deliver to Seller: the Purchase Price after
taking into account the adjustments and cost allocations in
accordance with Sections 10 and 11, and the Assignment of
Leases and Assignment of Intangible Property executed in
counterpart by Buyer, and any other document deposited by
Buyer with Escrow Holder for delivery to Seller at the
Closing.
5. REPRESENTATIONS AND WARRANTIES.
5.1 Seller's Representations and Warranties. Seller
makes the following representations and warranties to
Buyer, upon which warranties and representations Buyer has
relied and will continue to rely, all of which are true as
of the date of this Agreement and will be true and correct
as of the Closing:
5.1.1 Organization. Seller is duly organized,
validly existing and in good standing under the laws of the
State of Washington and is duly qualified to do business in
the State of California. The execution and delivery of
this Agreement and the other documents contemplated this
Agreement by Seller, and the performance by Seller of the
obligations under this Agreement and the other documents
contemplated in this Agreement (i) are within the power of
Seller; (ii) have been duly authorized by all requisite
corporate action; and (iii) will not violate any provision
of law, any order of any court or agency of government, the
charter documents of Seller or its shareholders, or any
indenture, agreement or any other instrument to which
Seller is a party. This Agreement and each of the other
documents described in this Agreement when executed and
delivered to Buyer, will constitute legal, valid and
binding obligations enforceable against Seller in
accordance with the terms of such documents.
5.1.2 Seller has full legal power and authority to
enter into and perform this Agreement in accordance with
its terms. The execution, delivery and performance of this
Agreement and all documents in connection therewith are not
in contravention of or in conflict with any deed of trust,
agreement or undertaking to which Seller is a party or by
which Seller or any of its property, including the
Property, may be bound or affected following the Closing.
The execution and delivery of this Agreement and the
performance by Seller of its obligations hereunder require
no further action or approval in order to constitute this
Agreement as a binding and enforceable obligation of
Seller, and all such actions have been duly taken by
Seller;
5.1.3 Seller is the owner of the Personal Property
and has good title thereto, free and clear of all liens,
claims and security interests whatsoever. Seller knows of
no encroachments onto the Property or by the improvements
thereon onto any adjoining property except as disclosed in
the ALTA survey of the Property delivered to the Buyer
pursuant to Section 9.1.2 below;
5.1.4 Except as disclosed to Buyer during the Due
Diligence Period or as contained in the materials delivered
to Buyer during the Due Diligence Period, Seller has no
actual knowledge of any:
a. Governmental notification from any
governmental authority notifying Seller of any
(a) violation of any city, County, State, Federal,
building, zoning, fire, health code, regulation, ordinance
or covenant, filed or issued against the Property; and
(b) impending or threatened special assessments on the
Property;
b. Existing, proposed or contemplated
plan to modify or realign any existing street or highway or
any existing, proposed or contemplated eminent domain
proceeding that would result in the taking of all or any
part of the Property;
c. Litigation or legal proceeding
pending or threatened in writing against Seller or the
Property that could reasonably be expected to materially
and adversely affect Seller's or Buyer's ability to perform
their respective obligations hereunder, or Buyer's use of
the Property for its existing purposes;
d. Storage or disposal on the Property
of any material amounts of toxic or hazardous waste,
material or substance, and Seller has received no notice
from any governmental authority requiring the removal of
any toxic or hazardous waste, material or substance from
the Property.
e. Lease, tenancy or other right of
occupancy or use for any portion of the Property under
which any party has a right to occupy the Property (other
than pursuant to the Leases).
f. Maintenance contract, equipment
lease, warranty or guaranty relating to the operation or
maintenance of the Property (other than Service Contracts).
5.1.5 The rent roll attached hereto as Exhibit L
accurately sets forth and lists all of the Leases and all
tenants presently in possession or entitled to possession
of the Property, all security deposits from such tenants
and the status of the payment of all rents and other
charges due Seller from said tenants pursuant to the
Leases.
5.1.6 The Leases and Service Contracts provided to
Buyer are true, complete and accurate.
5.1.7 Except as otherwise disclosed to Buyer, the
Leases are all in full force and effect.
5.1.8 Except as set forth on Exhibit M, there are no
commissions or other fees payable to any person, entity or
agent with respect to the Leases.
5.1.9 Except as set forth on Exhibit N, any and all
decorating, painting, renovation or construction work
(other than the maintenance or repairs required to be
performed by the landlord under the Leases) required to be
done under the provisions of any Leases as of the Closing
have been, or as of the Closing, at Seller's expense, will
be fully completed and paid for.
5.2 Buyer's Representations and Warranties. Buyer makes
the following representations and warranties to Seller upon
which warranties and representations Seller has relied and
will continue to rely, all of which are true as of the date
of this Agreement and will be true and correct as of the
Closing:
5.2.1 Organization. Buyer is duly organized, validly
existing and in good standing under the laws of the State
of Maryland and is duly qualified to do business in the
State of California. The execution and delivery of this
Agreement and the other documents contemplated this
Agreement by Buyer, and the performance by Buyer of the
obligations under this Agreement and the other documents
contemplated in this Agreement (i) are within the power of
Buyer; (ii) have been duly authorized by all requisite
partnership action and corporate action on the part of all
of its constituent corporate partners; and (iii) will not
violate any provision of law, any order of any court or
agency of government, the charter documents of Buyer or its
general partners, or any indenture, agreement or any other
instrument to which Buyer is a party. This Agreement and
each of the other documents described in this Agreement
when executed and delivered to Buyer, will constitute
legal, valid and binding obligations enforceable against
Buyer in accordance with the terms of such documents.
5.2.2 Buyer has full legal power and authority to
enter into and perform this Agreement in accordance with
its terms. The execution, delivery and performance of this
Agreement and all documents in connection therewith are not
in contravention of or in conflict with any agreement or
undertaking to which Buyer is a party. The execution and
delivery of this Agreement and the performance by Buyer of
its obligations hereunder require no further action or
approval in order to constitute this Agreement as a binding
and enforceable obligation of Buyer, and all such actions
have been duly taken by Buyer;
6. SELLER'S OBLIGATIONS. Seller hereby covenants to
Buyer, upon which covenants Buyer has relied and will
continue to rely, that for the period from the date of this
Agreement through and including the Closing Date:
6.1 Further Liens and Encumbrances. Seller will not
subject the Property to any additional liens, encumbrances,
covenants, conditions, easements, rights of way or similar
matters after the date of this Agreement. Seller will not
hereafter modify, extend, renew, replace or otherwise
change any of the terms, covenants or conditions of any of
such documents, or enter into any new agreements affecting
the Property without the prior written consent of Buyer,
which consent may be withheld in Buyer's sole and absolute
discretion.
6.2 Leases; Other Contracts; Interim Activities. Seller
will not hereafter terminate, modify, extend, renew,
replace or otherwise change the Leases or existing
contracts or enter into new leases or contracts affecting
the Property except with the prior written consent of
Buyer, which consent (a) will not be unreasonably withheld
(with respect to any such action prior to the expiration of
the Due Diligence Period), and (b) may be withheld in
Buyer's sole and absolute discretion (with respect to any
such action after the expiration of the Due Diligence
Period). From and after the expiration of the Due
Diligence Period, Seller shall not apply for or otherwise
deal with any governmental authority regarding the
development, entitlement or subdivision of the Real
Property without the prior written consent of Buyer, which
may be withheld in Buyer's sole and absolute discretion.
6.3 Property Management and Operation. Seller shall
maintain the operation of the Property in a good and
business-like manner. Seller shall provide all services
and operate, manage and maintain the Property (including
mechanical equipment of every kind used in the operation
thereof, and liability and casualty insurance) in such a
manner that the Property shall be in the same condition on
the Closing Date as on the date of this Agreement, ordinary
wear and tear excepted. Without limiting the foregoing,
Seller shall perform all of its obligations under the
Leases and the Service Contracts.
6.4 Cooperation with Representatives. Seller shall
cooperate with Buyer and its accountants, counsel and/or
other representatives in providing information and
materials pertaining to the operation and marketing of the
Property, including access to the Property. Without
limiting the generality of the foregoing, from and after
the execution and delivery of this Agreement, Seller shall
allow a representative or representatives of Buyer access
to the Property for the purpose of (a) monitoring the
operation of the Property, and (b) performing such
investigations and analyses of the Property as Buyer may
reasonably require. Seller will permit a meeting with a
tenant and Buyer's representative during the Due Diligence
Period, provided that a Seller representative is present.
6.5 No Removal of Personal Property. Seller will not
remove any of the Personal Property unless the Personal
Property so removed is simultaneously replaced with
substantially similar Personal Property of similar quality
or utilities.
6.6 Obtaining Estoppels and Consents. Seller shall use
its reasonable best efforts to obtain all written consents
from third parties required or reasonably requested by
Buyer or its accountants, counsel or other representatives
in connection with this Agreement, including, without
limitation, the Tenant Estoppels. Seller hereby
acknowledges and agrees that the obtaining of the Tenant
Estoppels are a condition precedent to Buyer's obligations
under this Agreement.
6.7 Service Contracts. Seller shall deliver notices of
termination to any vendors under the Service Contracts
which have been designated in writing by Buyer to be
terminated ("Disapproved Service Contract List") provided
that the Disapproved Service Contract List is delivered by
Buyer to Seller on or before the expiration of the Due
Diligence Period. Seller shall, within two (2) days
following the later of the expiration of the Due Diligence
Period or Buyer's delivery of the Disapproved Service
Contract List, deliver termination notices to each of the
vendors with respect to the Service Contracts so designated
by Buyer in the Disapproved Service Contract List. Buyer
shall be solely responsible for all costs and expenses
associated with the termination of any of the Service
Contracts set forth by Buyer in the Disapproved Service
Contract List.
6.8 Post-Closing Financial Records. As soon as
reasonably practicable following the Closing Date, Seller
shall deliver to Buyer the following: (a) a final income
statement through the Closing Date, (b) a final cumulative
general ledger through the Closing Date, and (c) a final
aged delinquency listing, including all security deposits
received by Seller.
6.9 Audit Rights. At Buyer's request at any time from
and after the date hereof until the date that is one (1)
year after the Closing Date, Seller shall, at Buyer's
expense, provide to Buyer's designated independent auditor
access to the books and records of the Property, regarding
the period for which Buyer is required to have audited
financial statements prepared with respect to the Property
as may be required by the Securities and Exchange
Commission, to the extent that such books, records and
related information are in Seller's possession or control
and relate to the period during which Seller held title to
the Property. Further, Seller agrees to provide to such
auditor a representation letter regarding the books and
records of the Property, in substantially the form of
Exhibit "K" attached hereto, in connection with the normal
course of auditing the Property in accordance with
generally accepted auditing standards.
6.10 Management and Listing Agreements. Seller agrees to
terminate, at Seller's sole cost and expense, any property
management agreement and brokerage leasing agreement
effective as of the Closing Date.
7. TITLE TO REAL PROPERTY. At Closing, title to the
Real Property will be conveyed to Buyer by Seller by the
Deed, subject only to the following matters ("Permitted
Exceptions"):
7.1 matters of title respecting the Real Property
approved or deemed approved by Buyer in accordance with
this Agreement including all Schedule B Exceptions to the
Title Policy approved by Buyer; and
7.2 matters affecting the condition of title to the Real
Property created by or with the written consent of Buyer.
8. CONDITIONS PRECEDENT/CONCURRENT TO CLOSING; CLOSING
DATE.
8.1 Buyer's Conditions. Buyer shall not be required to
close the transaction provided for under this Agreement,
unless and until each and every one of the following
conditions has been fulfilled:
8.1.1 Representations, Warranties and Covenants of
Seller. Seller shall have duly and timely performed each
and every covenant to be performed by Seller under this
Agreement and the representations and warranties set forth
in this Agreement shall be true and correct as of the
Closing in all respects.
8.1.2 Seller's Deliveries. Seller shall have duly
and timely delivered to Buyer all of the items described in
Section 4.1 of this Agreement.
8.1.3 No Material Changes. At the Closing, there
will be no material adverse changes in the physical or
financial condition of the Property which were discovered
by Buyer after the Due Diligence Period.
8.1.4 Delivery of Pre-Closing Documents and
Agreements. Seller shall have delivered to Buyer on or
before the Closing Date the following (to the extent in
Seller's possession, control or otherwise reasonably
available [at no cost or expense] to Seller):
8.1.4.1 Originals of all Leases and Service
Contracts;
8.1.4.2 Originals of all Records and Plans;
8.1.4.3 Originals of all Licenses and Permits; and
8.1.4.4 Originals of all Warranties.
8.1.5 Title Insurance. The Title Company will have
issued or have unconditionally and irrevocably committed to
issue the Title Policy to Buyer.
8.1.6 Due Diligence Approval. Buyer shall have
approved (or be deemed to have approved) all matters to be
reviewed in accordance with Section 9 of this Agreement.
9. DUE DILIGENCE PERIOD:
9.1 Matters To Be Reviewed. Buyer's obligation to close
the purchase of the Property and to pay the Purchase Price
shall be subject to and conditioned upon Buyer's complete
satisfaction with all of the following items, each of which
Buyer shall have the right to review and approve or
disapprove in Buyer's sole and absolute discretion during
the Due Diligence Period:
9.1.1 Title. Buyer will have until 6:00 p.m.
(California time) on the expiration of the Due Diligence
Period to examine and approve all matters of title and to
notify Seller in writing of any defects in title. Seller
shall, at its sole cost and expense, within three (3) days
following the date this Agreement is executed and delivered
by Buyer and Seller, deliver to Buyer a current preliminary
title report issued by the Title Company and relating to
the Real Property, together with all underlying documents
relating thereto. If Buyer fails to notify Seller in
writing of any objections to title prior to the expiration
of the Due Diligence Period, title to the Property shall be
conclusively deemed to be approved by Buyer. If Buyer, in
its sole discretion, timely notifies Seller in writing of
specific objections to title prior to the expiration of the
Due Diligence Period, Seller will have three (3) business
days after receipt of Buyer's notification of any objection
in which to advise Buyer that:
9.1.1.1 Seller will remove any objectionable
exceptions on or before the Closing Date; or
9.1.1.2 Seller will not cause the exceptions to be
removed.
If Seller advises Buyer that it will not
cause the exceptions to be removed, Buyer will have five
(5) days from its receipt of Seller's notice to elect to:
(i) proceed with the purchase and
acquire the Property subject to such exceptions, but
conditioned upon Seller fulfilling each and every one of
its other obligations hereunder and all of the other
conditions precedent in favor of Buyer having been duly and
timely satisfied; or
(ii) terminate this Agreement by
written notice to Seller, in which case the Deposit, and
any interest thereon, will be immediately returned to Buyer
without further instructions from Seller, and all rights
and obligations of the parties existing hereunder shall
terminate and be of no further force or effect, except any
rights and obligations which are expressly stated to
survive the termination of this Agreement.
If Buyer does not give Seller written
notice of its election within said five (5) day period,
Buyer will be conclusively deemed to have elected to
terminate this Agreement as described in (ii) above.
If Seller commits to remove any objection
to title and fails to do so by the Closing Date, Seller
will be in material default under this Agreement and Buyer
may, at Buyer's election, terminate this Agreement and
pursue its remedies as set forth in Section 14 of this
Agreement.
9.1.2 Inspections and Studies. Buyer will have until
6:00 p.m. (California time) on the expiration of the Due
Diligence Period to conduct (as applicable) and review and
approve any and all inspections, investigations, tests,
studies (including feasibility studies and other economic
models) and appraisals as Buyer may have elected to make or
obtain with respect to the Property and/or the operation
and financial condition of the Property, including, without
limitation, financial analyses of the books and records,
environmental inspections and studies, structural and
mechanical investigations, appraisals, and analyses of the
Property's compliance with Governmental Regulations. Buyer
and Buyer's representatives, agents and designees will have
the right to enter the Property at all reasonable times,
upon reasonable oral notice to perform all such
investigations of the Property, and to conduct interviews
with (i) property management personnel of Seller, and (ii)
such other parties as Buyer may deem appropriate in its
reasonable discretion. Seller will cooperate with Buyer
and its representatives in that regard. Seller shall
deliver to Buyer at Seller's sole cost and expense, within
five (5) days (unless indicated otherwise below) following
the date this Agreement is executed and delivered by Buyer
and Seller, all information in Seller's possession or
control which is reasonably related to the Property, plus
the following items:
9.1.2.1 To the extent in Seller's possession, an
ALTA "as-built" survey of the Real Property prepared by a
licensed surveyor;
9.1.2.2 The Leases and all modifications or
amendments
and guaranties relating thereto; all tenant correspondence
and all current financial statements of the tenant to the
extent the same are in Seller's possession or control; all
contracts (including the Service Contracts), agreements and
management agreements; all "operating statements" for the
last three (3) calendar years for the Property and a year-
to-date operating statement for the calendar year 1997, a
balance sheet dated no earlier than December 31, 1996; an
income statement for the last two (2) calendar years and a
year-to-date income statement for the calendar year 1997,
each such statement to be certified by Seller as being
true, correct and complete reports prepared by Seller in
the ordinary course of business; a cumulative general
ledger for year-to-date 1997, reports (including all
environmental reports, soils reports, surveys and plans and
specifications affecting or relating to the Property, and
all modifications or amendments thereto); all Records and
Plans, Warranties, Licenses and Permits and governmental
approvals obtained or held by Seller and relating to the
development, construction, operation, use or occupancy of
any of the Property.
9.1.2.3 Reports of insurance carriers, if any,
insuring
the Property during the period of Seller's ownership of the
Property and each portion thereof respecting the claims
history of the Property; insurance certificates of Seller
and tenants respecting the Property; all correspondence,
reports, and notices pertaining to the existence of toxic
or Hazardous Materials and/or waste at the Property; all
permits, reports, certificates and notices pertaining to
the existence, removal and/or decommission of any and all
storage tanks located on, at or underneath the Property;
all brokerage and commission agreements; all agreements
entered by Seller and Seller's affiliates affecting the
Property and/or income and cash flow to be received from
the Property that will survive the Closing; tax bills and
assessments for the current year and the three (3) year
period immediately preceding the current year; any and all
information in Seller's possession respecting the
creditworthiness of the tenants under the Leases at the
Property; all written reports respecting incidents of
theft, burglary or crimes attempted or committed at, on or
to the Property or other such incidents which are the
subject of litigation; and such other information
reasonably requested by Buyer of Seller in writing during
the Due Diligence Period.
9.1.3 Indemnity. Buyer agrees to indemnify and hold
Seller harmless from any and all injuries, losses, liens,
claims, judgments, obligations, liabilities, costs,
expenses or damages (including reasonable attorneys' fees
and court costs) sustained by Seller to the extent same
results from or arises out of any inspections by Buyer or
any of its representatives pursuant to Section 9.1.2 above.
9.1.4 Insurance. Prior to any entry, Buyer shall
obtain, maintain and provide Seller, or shall cause any
consultant, contractor or other person entering the
Property to obtain, maintain and provide Seller, with proof
of comprehensive general liability insurance in the amount
of at least $1,000,000 combined, single limit coverage,
naming Seller as an additional insured.
9.2 Notice of Objections.
9.2.1 If Buyer fails to notify Seller in writing of
any objections to the items set forth in Section 9.1.2 on
or before the expiration of the Due Diligence Period, Buyer
shall be conclusively deemed to have approved such items.
9.2.2 If Buyer, in its sole discretion, notifies
Seller in writing of any objections to the condition of the
Property or any other matters relating to the Property
and/or operation or financial condition of the Property as
set forth in Section 9.1.2 on or before the expiration of
the Due Diligence Period, the parties will have five (5)
business days to agree upon a resolution of the
objection(s). If the parties cannot agree within the five
(5) business day period, then Buyer may terminate this
Agreement by delivering written notice to Seller (which
notice must be given within three (3) business days after
the expiration of the five (5) business day period), in
which event the Deposit and any interest accrued thereon
will be returned to Buyer, and all rights and obligations
of the parties existing hereunder shall terminate and be of
no further force or effect, except any rights and
obligations which are expressly stated to survive the
termination of this Agreement.
10. PRORATIONS. The following are to be prorated as of
the Closing Date, as follows:
10.1 Current Rent. Current rent under the Leases shall
be prorated as of the Closing Date, regardless of whether
such rent has been paid to Seller.
10.2 Rent Arrears. With respect to any rent arrears
arising under the Leases, Buyer shall pay to Seller any
rent actually collected that is applicable to the period
preceding the Closing Date, less reasonable collection
charges actually incurred; provided, however, that it is
hereby understood and agreed that all rent collected by
Buyer shall be applied first to unpaid rent accruing after
the Closing Date, and then, only after all such past due
rent has been collected, to unpaid rent accruing prior to
the Closing Date.
10.3 Security Deposits. The security deposit paid by the
tenant pursuant to the Leases, and any interest required to
be paid thereon, shall be fully credited to Buyer at
Closing.
10.4 Other Prorations. Liability for all real property
taxes, common area maintenance, Property operation
expenses, and other recurring costs which are not otherwise
paid directly by tenants shall be prorated as of the
Closing Date; provided, however, Buyer shall not be
responsible for any costs or expenses pertaining to Service
Contracts or other items of expense which Buyer has not
approved in writing. Seller shall remain liable for any
supplemental taxes attributable to any period prior to the
Closing and Seller shall be entitled to any tax refunds
attributable to any period prior to the Closing. If any
such supplemental taxes shall be billed to Buyer or levied
against the Property after the Closing, then Seller agrees
to pay its prorated share thereof to Buyer within thirty
(30) days of demand therefor by Buyer. Any such sums not
paid when due may be advanced by
10.5
Buyer and such amounts shall bear interest from the date of
advance by Buyer until paid by Seller at ten percent (10%)
per annum.
10.5 Preliminary Closing Adjustment. Seller
and Buyer shall jointly prepare a preliminary closing
adjustment computation on the basis of the Leases and other
sources, and shall deliver such computation to the Escrow
Holder prior to Closing.
10.6 Post-Closing Reconciliation. All items
described in this Section 10 that are capable of being
prorated as of the Closing Date, shall be prorated as of
the Closing Date. All other items shall be reconciled
within one hundred eighty (180) days after the Closing Date
to the extent that such items may be reconciled within such
one hundred eighty (180) day period, or, to the extent such
items may not be reconciled within such one hundred eighty
(180) day period, when such items may first be reconciled
after Closing.
10.7 Survival. The provisions of this
Section 10 shall survive Closing.
11. COSTS AND EXPENSES. The closing costs shall be
allocated as follows:
11.1 Buyer. Buyer shall pay all premiums for the ALTA
portion of the Title Policy, one half of escrow fees, and
Buyer's share of prorations.
11.2 Other Closing Costs. Seller shall pay one half of
escrow fees and the CLTA portion of the Title Policy
premium; and each party will pay their own legal and
professional fees and fees of other consultants incurred by
Buyer and Seller respectively. Seller shall be responsible
for its share of prorations, including all state and county
transfer taxes, all sales taxes, any other tax or
assessment imposed as a result of the transactions
contemplated under this Agreement, and any document
recording changes and notary fees, including, without
limitation, any recording fees and notary charges with
respect to the Deed.
11.3 Delivery of Possession. Simultaneously with the
Closing, Seller shall deliver possession and enjoyment of
the Property to Buyer, and all keys to the Property in
Sellers' possession, and Buyer shall thereupon have the
immediate right to possess, develop, use, sell, encumber
and/or transfer the Property, or any part thereof for its
own account to the total exclusion of Seller.
12. AS-IS. Except as specifically set forth in this
Paragraph and the representations set forth in Paragraph 5
above, the sale of the Property hereunder is and will be
made on an "as is" basis, without representations and
warranties of any kind or nature, express, implied or
otherwise, including but not limited to, any representation
or warranty concerning title to the Property, the physical
condition of
13.
the Property (including, but not limited to, the condition
of the soil or the improvements) , the environmental
condition of the Property (including, but not limited to,
the presence or absence of hazardous substances on or
respecting the Property) , the compliance of the Property
with applicable laws and regulations (including, but not
limited to, zoning and building codes or the status of
development or use rights respecting the Property), the
financial condition of the Property or any other
representation or warranty respecting any income, expenses,
charges, liens or encumbrances, rights or claims on,
affecting or pertaining to the Property or any party
thereof. Buyer acknowledges that Buyer will examine,
review and inspect all matters which in Buyer's judgment
bear upon the Property and its value and suitability for
Buyer's purposes, and Seller shall cooperate with Buyer in
making such information available to Buyer for such
examination. Except as to matters specifically set forth
in this Paragraph and the representations set forth in
Paragraph 5 above, Buyer will acquire the Property solely
on the basis of its own physical and financial
examinations, reviews and inspections and the title
insurance protection afforded by the Title Policy.
13. CONDEMNATION AND DESTRUCTION:
13.1 Eminent Domain or Taking. If proceedings under a
power of eminent domain relating to the Property or any
part thereof are commenced prior to the Closing Date,
Seller shall promptly inform Buyer in writing.
13.1.1 If such proceedings involve the taking of title
to all or any Material (defined below) interest in the
Property, Buyer may elect to terminate this Agreement by
notice in writing sent within thirty (30) days of Seller's
written notice to Buyer, in which case the Deposit, and any
interest thereon, will be returned to Buyer and neither
party shall have any further obligation to or rights
against the other except any rights or obligations of
either party which are expressly stated to survive
termination of this Agreement.
13.1.2 If the proceedings do not involve the taking of
title to all or a Material interest in the Property or if
Buyer does not elect to terminate this Agreement, this
transaction will be consummated as described in this
Agreement and any award or settlement payable with respect
to such proceeding will be paid or assigned to Buyer upon
the Closing.
13.1.3 For purposes of this Section 13.1, "Material"
shall mean a taking which Buyer reasonably determines
materially and adversely affects the value or operations of
the Property, and which is not less than Fifty Thousand
Dollars ($50,000).
13.2 Damage or Destruction. Except as provided in this
paragraph, prior to the Close of Escrow the entire risk of
loss of damage by earthquake, flood, hurricane, landslide,
fire or other casualty is borne and assumed by Seller. If,
prior to the Closing Date, any part of the Property is
damaged or destroyed by earthquake, flood, landslide, fire
or other casualty, Seller will promptly inform Buyer of
such fact in writing and advise Buyer as to the extent of
the damage.
13.2.1 If such damage or destruction is Material (as
defined below), Buyer has the option to terminate this
Agreement upon written notice to the Seller given not later
than thirty (30) days after receipt of Seller's written
notice to Buyer advising of such damage or destruction.
13.2.2 If this Agreement is so terminated, Buyer will
be entitled to the return of the Deposit together with any
interest thereon.
13.2.3 If Buyer does not timely exercise this option
to terminate this Agreement, or if the casualty is not
Material, Seller will either (a) assign to Buyer all of
Seller's right, title and interest in and to any and all
insurance proceeds under Seller's insurance policies
relating to such damage or destruction, and shall reduce
the Purchase Price by the amount of the deductible and any
other amount not covered by insurance under such policies
(including reasonably anticipated post-Closing rental loss,
except to the extent covered by insurance, through to
completion of such repair and restoration resulting from
such casualty), and this transaction will close pursuant to
the terms of this Agreement, or (b) if the casualty is
Material, give Buyer notice of Seller's election to
terminate this Agreement by notice in writing sent within
ten (10) days of Buyer's last day upon which it could
exercise Buyer's right to terminate in which case the
Deposit, and any interest thereon, will be returned to
Buyer and neither party shall have any further obligation
to or right against the other except any rights or
obligations of either party which are expressly stated to
survive termination of this Agreement.
13.2.4 For purposes of this Section 13.2, "Material"
is deemed to be any damage or destruction to the Property
where the cost of repair or replacement is estimated to be
more than 10% of the Purchase Price.
13.2.5 Survival. The provisions of this Section 13
shall survive the Closing.
14. REMEDIES:
14.1 Buyer's Remedies. IN THE EVENT THAT SELLER SHALL
FAIL TO CONSUMMATE THIS AGREEMENT FOR ANY REASON, EXCEPT
BUYER'S DEFAULT OR A TERMINATION OF THIS AGREEMENT BY BUYER
OR SELLER PURSUANT TO A RIGHT TO DO SO UNDER THE PROVISIONS
HEREOF, BUYER SHALL HAVE THE FOLLOWING REMEDIES, WHICH
SHALL BE BUYER'S SOLE AND EXCLUSIVE REMEDIES BASED UPON A
DEFAULT BY SELLER. SUCH REMEDIES SHALL NOT BE CUMULATIVE,
MEANING BUYER MAY EXERCISE ONE (1) BUT NOT BOTH OF SUCH
REMEDIES. BUYER SHALL DELIVER TO SELLER AND ESCROW HOLDER
NOTICE OF ITS ELECTION OF REMEDIES WITHIN TWO (2) DAYS
AFTER SELLER'S DEFAULT. THE SOLE REMEDIES AVAILABLE TO
BUYER ARE AS FOLLOWS:
(i) BUYER MAY TERMINATE THIS AGREEMENT,
IN WHICH CASE SELLER SHALL IMMEDIATELY RETURN THE DEPOSIT,
TOGETHER WITH ANY INTEREST EARNED THEREON, TO BUYER, UPON
EXECUTION OF CANCELLATION INSTRUCTIONS BY BUYER, AND SELLER
SHALL PAY ANY ESCROW CANCELLATION CHARGES. IN ADDITION,
BUYER SHALL HAVE THE RIGHT TO PURSUE AN ACTION AGAINST
SELLER FOR ALL ACTUAL OUT-OF-POCKET (BUT NOT CONSEQUENTIAL)
DAMAGES SUFFERED BY BUYER; OR
(ii) BUYER MAY BRING AN ACTION FOR
SPECIFIC PERFORMANCE AGAINST SELLER WITH RESPECT TO THIS
AGREEMENT BUT ONLY UNDER THE FOLLOWING CONDITIONS AND
CIRCUMSTANCES:
(a) BUYER SHALL HAVE FULLY
PERFORMED ALL OBLIGATIONS OF BUYER UNDER THIS AGREEMENT,
EXCEPT THAT WITH RESPECT TO DEPOSITING THE BALANCE OF THE
PURCHASE PRICE, BUYER SHALL HAVE EVIDENCED TO SELLER'S
REASONABLE SATISFACTION THAT BUYER IS READY, WILLING AND
ABLE TO TIMELY DEPOSIT SAID FUNDS IN ESCROW;
(b) THE ACTION SHALL BE COMMENCED,
AND SERVICE OF PROCESS UPON SELLER MADE, NOT LATER THAN
FORTY-FIVE (45) DAYS AFTER SELLER'S DEFAULT; AND
(c) ALL OF THE ISSUES IN SUCH
ACTION, WHETHER OF FACT OR LAW, SHALL BE HEARD BY A
REFERENCE PROCEEDING PURSUANT TO CALIFORNIA CODE OF CIVIL
PROCEDURE, SECTION 638, ET. SEQ. WITHIN TEN (10) DAYS
FOLLOWING THE COMMENCEMENT OF ANY SUCH ACTION, THE PARTIES
SHALL MAKE APPLICATION TO THE COURT IN WHICH THE ACTION IS
PENDING FOR THE APPOINTMENT OF A RETIRED SUPERIOR COURT
JUDGE OR COURT OF APPEAL JUSTICE FROM THE THEN CURRENT LIST
OF RETIRED JUDGES AVAILABLE TO SERVE AS REFEREES IN THE
COUNTY IN WHICH SUCH ACTION IS COMMENCED TO SERVE AS THE
REFEREE. THE REFEREE CHOSEN SHALL BE DEEMED QUALIFIED ONLY
IF HE IS WILLING TO AGREE TO HEAR THE SUBJECT ACTION WITHIN
TWENTY (20) DAYS FOLLOWING THE DATE OF APPLICATION TO THE
COURT, TO HEAR THE SUBJECT ACTION ON CONSECUTIVE DAYS AND
TO RENDER A DECISION WITHIN A FURTHER FIFTEEN (15) DAY
PERIOD. THE PARTIES SHALL ADVANCE, IN EQUAL SHARES, THE
FEES AND EXPENSES OF THE REFEREE SELECTED PURSUANT TO THIS
PROVISION, BUT THE LOSING PARTY IN ANY SUCH ACTION SHALL
REIMBURSE THE PREVAILING PARTY FOR ANY AND ALL FEES AND
EXPENSES PREVIOUSLY ADVANCED BY SUCH PREVAILING PARTY FOR
THE REFEREE.
14.2 Seller's Remedies. IF BUYER SHOULD FAIL TO
CONSUMMATE THIS AGREEMENT AS A RESULT OF BUYER'S DEFAULT
UNDER THE TERMS OF THIS AGREEMENT, THEN SELLER, AS ITS SOLE
AND EXCLUSIVE REMEDY, MAY TERMINATE THIS AGREEMENT BY
NOTIFYING BUYER THEREOF AND RECEIVE OR RETAIN THE DEPOSIT
AS LIQUIDATED DAMAGES. THE PARTIES AGREE THAT SELLER WILL
SUFFER DAMAGES IN THE EVENT OF BUYER'S DEFAULT ON ITS
OBLIGATIONS. ALTHOUGH THE AMOUNT OF SUCH DAMAGES IS
DIFFICULT OR IMPOSSIBLE TO DETERMINE, THE PARTIES AGREE
THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE ESTIMATE OF
SELLER'S LOSS IN THE EVENT OF BUYER'S DEFAULT. THUS,
SELLER SHALL ACCEPT AND RETAIN THE DEPOSIT AS LIQUIDATED
DAMAGES BUT NOT AS A PENALTY. SELLER HEREBY ACKNOWLEDGES
AND AGREES SUCH LIQUIDATED DAMAGES SHALL CONSTITUTE
SELLER'S SOLE AND EXCLUSIVE REMEDY AND SELLER HEREBY WAIVES
THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389 AND
ANY OTHER APPLICABLE EXISTING OR FUTURE LAW PERMITTING A
CONTRACT TO BE ENFORCED EVEN THOUGH DAMAGES ARE LIQUIDATED
FOR ITS BREACH.
SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND
UNDERSTAND THE PROVISIONS OF THE FOREGOING PROVISION AND BY
THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS
TERMS.
Seller:/s/ HM Buyer:/s/ RSZ
15. BROKERAGE COMMISSIONS. Each party hereby represents
and warrants to the other that except for Seller's
obligation set forth below, it has not incurred any
obligation to any third party for the payment of any real
estate commission, finder's fee or other like sum in
connection with the sale of the Property to Buyer, and each
party hereby agrees to indemnify and hold the other party
harmless from and against any and all claims, demands,
causes of action and costs, including attorneys' fees and
costs, made, brought or sought against or from the other
arising out of any agreement for the payment of a real
estate commission, finder's fee or other like sum entered
into between either party and a third party in connection
with the sale of the Property to Buyer. Seller shall pay
CB Commercial at Closing through Escrow a commission equal
to two and one half percent (2.5%) of the Purchase Price.
16. NOTICE. All notices, requests, demands or documents
which are required or permitted to be given or served
hereunder shall be in writing and (a) delivered personally,
(b) delivered by a national overnight courier (i.e., Fed
Ex), or (c) transmitted by facsimile, addressed as follows:
To Seller at: JC Investment & Realty, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx
Attn: Harutoshi Mori, President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxx LLP
000 X. Xxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
Attn: Xxxxx X. Xxxxxx III
Facsimile: (000) 000-0000
To Buyer at: Arden Realty Limited Partnership
0000 Xxxxxxxx, Xxxxx 000X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxx
President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Marmaro, LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx
Attn: Xxxxx X. Xxxx
Facsimile: (000) 000-0000
Notice shall be deemed to have been delivered only upon
actual delivery to the intended addressee in the case of
either personal, courier, or facsimile delivery. The
addresses for purposes of this paragraph may be changed by
giving written notice of such change in the manner provided
herein for giving notices. Unless and until such written
notice is delivered, the latest information stated by
written notice, or provided herein if no written notice of
change has been delivered, shall be deemed to continue in
effect for all purposes hereunder.
17. MISCELLANEOUS:
17.1 Survival. The representations and warranties
contained in this Agreement shall survive for a period of
twelve (12) months following the Closing Date.
17.2 Assignment. Buyer shall not assign this Agreement
except to an affiliate or related party to Buyer which
party is more than fifty percent (50%) owned and controlled
by Buyer, and with Seller's approval, which approval shall
not be unreasonably withheld. Notwithstanding such
assignment Buyer and its general partner as of the date
hereof shall remain liable to Seller to perform all of
Buyer's obligations pursuant to this Agreement.
17.3 Parties in Interest. As and when used herein, the
terms, "Seller" and "Buyer" mean and include, and this
Agreement their respective successors and assigns and shall
be binding upon and inure to the benefit of, the above-
named Seller and Buyer and their respective successors and
permitted assigns.
17.4 Section Headings. The headings of sections are
inserted only for convenience and shall in no way define,
describe or limit the scope or intent of any provision of
this Agreement.
17.5 No Oral Modifications. This Agreement may not be
amended or modified except in writing executed by all
parties hereto.
17.6 Full Integration. Buyer and Seller each acknowledge
that there are no other agreements or representations,
either oral or written, express or implied, that are not
embodied in this Agreement, and this Agreement, the
Exhibits attached to this Agreement, and the Transfer
Documents, represent a complete integration of all the
prior and contemporaneous agreements and understandings and
documents.
17.7 Binding Effect. This Agreement shall be binding
upon and inure to the benefit of the parties hereto, and
their respective successors and assigns, and no other party
shall be a beneficiary hereunder.
17.8 Attorneys' Fees. If an action is commenced by a
party hereto resulting from a dispute with respect to the
transactions contemplated herein, the prevailing party
shall be entitled to recover its attorneys' fees and costs
from the other party in such action. As used herein, the
term "attorneys' fees" means attorneys' fees whether or not
litigation ensues and if litigation ensues whether incurred
at trial, on appeal, on discretionary review or otherwise.
17.9 Governing Law. This Agreement will be governed by,
interpreted under, and construed and enforced in accordance
with the laws of the State of California, with venue in the
city and County of Los Angeles, California. Each of the
parties hereto acknowledge and agree that the laws of the
State of California and the selection of venue in the city
and County of Los Angeles were freely chosen by Buyer and
Seller.
17.10 Confidentiality. Unless otherwise agreed to in
writing by Seller and Buyer, each party will use reasonable
efforts to keep confidential the terms of this Agreement,
the possible sale of the Property, and all documents,
financial statements, reports or other information provided
to, or generated by the other party relating to the
Property, and will use reasonable efforts to not disclose
any such information to any person other than (a) those
employed by Seller or Buyer; (b) those who are actively and
directly participating in the evaluation of the Property
and the negotiation and execution of this Agreement or
financing of the purchase of the Property; and
(c) governmental, administrative, regulatory or judicial
authorities in the investigation of the compliance of the
Property with applicable legal requirements; and (d) third
parties as required under applicable law. The provisions
of this paragraph will survive the termination of this
Agreement other than by Closing.
17.11 Captions. The captions contained in this
Agreement are for convenience only and are not intended to
limit or define the scope or effect of any provision of
this Agreement.
17.12 Severability. The invalidity, illegality or
unenforceability of any provision of this Agreement shall
not affect the enforceability of any other provision of
this Agreement, all of which shall remain in full force and
effect.
17.13 Time of the Essence. Time is of the essence of
this Agreement and of the obligations required hereunder.
17.14 Non-Waiver. No delay or failure by any party
to exercise any right hereunder, and no partial or single
exercise of any such right, shall constitute a waiver of
that or any other right, unless otherwise expressly
provided herein.
17.15 Facsimile. The parties hereto and their
respective successors and assigns are hereby authorized to
rely upon the signatures of each person and entity on this
Agreement which are delivered by facsimile as constituting
a duly authorized, irrevocable, actual, current delivery of
this Agreement with original ink signatures of each person
and entity.
17.16 Further Assurances. Buyer and Seller agree to
execute all documents and instruments reasonably required
in order to consummate the purchase and sale contemplated
in this Agreement.
17.17 Counterparts. This Agreement may be executed
in any number of counterparts and each such counterpart
shall be deemed to be an original, but all of which, when
taken together, shall constitute one Agreement.
Buyer and Seller have executed this Agreement as of
the date written above.
"SELLER"
JC Investment & Realty, Inc.
a Washington corporation
By:/s/ Harutoshi Mori
Name: Harutoshi Mori
Title: President
"BUYER"
Arden Realty Limited Partnership
a Maryland limited partnership
By: Arden Realty, Inc.
Its: General Partner
By:/s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
