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Sumitomo Bank Building
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
by
and
between
TRUST COMPANY OF THE WEST, a California corporation,
as trustee for TCW REALTY FUND III
"Seller"
and
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
"Purchaser"
Dated as of
December 6, 1996
TABLE OF CONTENTS
1. IDENTIFICATION OF PARTIES
2. DESCRIPTION OF THE PROPERTY
3. THE PURCHASE PRICE
4. TITLE
5. INSPECTION
6. REPRESENTATIONS AND WARRANTIES OF SELLER
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
8. DELIVERY OF DOCUMENTS
9. CONFIDENTIALITY
10. CONDITIONS PRECEDENT TO CLOSING
11. COVENANTS OF SELLER
12. SELLER'S CLOSING DELIVERIES
13. PURCHASER'S CLOSING DELIVERIES
14. PRORATIONS AND ADJUSTMENTS
15. CLOSING
16. CLOSING COSTS
17. RISK OF LOSS
18. DEFAULT
19. BROKER'S COMMISSION
20. ESCROW
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 December 6,
1996, by and between ARDEN REALTY LIMITED PARTNERSHIP, a Maryland
limited partnership ("Purchaser"), and TRUST COMPANY OF THE WEST, a
California corporation, as trustee of TCW REALTY FUND III ("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 ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 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 herein
after 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 Twelve
Million Eight Hundred Thousand and No/100 Dollars ($12,800,000.00) (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, ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Escrow Company") an initial ▇▇▇▇▇▇▇ money
deposit in immediately available funds in the amount of Two Hundred
Thousand and No/100 Dollars ($200,000.00) (the "Initial Deposit").
(b) By the end of the Due Diligence Period (as defined in Section
5(a) below), Purchaser shall deposit in escrow with Escrow Company an
additional ▇▇▇▇▇▇▇ money deposit in immediately available funds in the
amount of Two Hundred Thousand and No/100 Dollars ($200,000.00) (the
"Additional Deposit"). The Initial Deposit and the Additional Deposit
are sometimes hereinafter collectively referred to as 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, or if Purchaser fails to deliver the Additional Deposit on
or before the end of the Due Diligence Period (as defined in Section
5(a) below) 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).
(c) The balance of the Purchase Price over and above the amounts
paid by or credited to Purchaser pursuant to Sections 3(a) and (b)
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, ▇▇▇
▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Title
Company"), and Purchaser acknowledges receipt of, a preliminary title
report dated November 22, 1996, order no. 9600144-9, 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. By December 18, 1996, Purchaser shall obtain an
updated survey of the Real Property (the "Survey") as soon as possible
after the execution of this Agreement, a copy of which shall be
promptly delivered to Seller and Title Company. The current survey of
the Real Property was prepared by Steryo Engineering on February 12,
1986, and updated January 12, 1987, designated no. 414-02, a copy of
which has been received by Purchaser. 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. The Survey shall be
at Purchaser's sole cost and expense.
(c) No later than December 18, 1996, or within two business days
after Purchaser receives the Survey, whichever is earlier, 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 November 22, 1996 title report) which Purchaser
disapproves. No later than December 18, 1996, or within two business
days after Purchaser receives the Survey, whichever is earlier,
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 five (5) 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
three (3) business days 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 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 Closing, then Buyer shall be
entitled to offset 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 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.
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
time on December 18, 1996. During the Due Diligence Period, and with
reasonable advance notice to Seller, Purchaser, its agents and repre
sentatives 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/100 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
materialmen's 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 representatives shall be
entitled to inspect, during Seller's regular business hours, material
documents in the possession or control of Seller or Seller's on-site
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), if any, relating to the Property, 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 Real Estate Investment Services, Westmark Realty
Advisors L.L.C., TCW Realty Advisors, CB Commercial Realty Advisors,
Inc. and/or CB Commercial Real Estate Group, Inc. 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, correct
and complete copies of the Leases, (iii) the term of the Leases and
obligation to pay rent thereunder has commenced, (iv) the tenant
thereunder is in full possession and actual 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, 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 reserves and is
not transferring 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) Seller is sufficiently capitalized and has sufficient assets
such that it shall be able to pay any and all reasonably anticipated
liabilities, costs, claims and expenses of Seller in connection with
the Property and this Agreement.
(m) The Insurance Information (as defined in Section 8(ii)) is
true and accurate in all material respects, subject to the exceptions,
exclusions, modifications and other terms and conditions of the
underlying insurance policies to which the Insurance Information
relates, which insurance policies are in full force and effect.
(n) The inventory of Personal Property delivered pursuant to
Section 8(ix) 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, the Portfolio Manager and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Asset Manager, and (y) the phrase "to the best of
Seller's knowledge" shall mean the knowledge, after reasonable
investigation and inquiry (but not constructive or imputed knowledge)
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and Seller represents that the
foregoing are the individuals with the primary responsibility for
overseeing the management, operation and sale of the Property). The
express representations and warranties made in this Agreement shall not
merge into any instrument or conveyance delivered at the Closing;
provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of such representations and
warranties shall be commenced and served, if at all, on or before the
date which is twelve (12) months after the date of the Closing and, if
not commenced and served on or before such date, thereafter shall be
void and of no force or effect. Seller shall have no liability with
respect to any of the foregoing representations and warranties if,
prior to the Closing, Purchaser discovers or learns of information
(from whatever source, including, without limitation, the tenant
estoppel certificates delivered pursuant to Section 10(a) below, as a
result of Purchaser's due diligence tests, investigations and
inspections of the Property, or disclosure by Seller or Seller's agents
and employees) that contradicts any of the foregoing representations
and warranties, or renders any of the foregoing representations and
warranties untrue or incorrect, and Purchaser nevertheless consummates
the transaction contemplated by this Agreement.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
Purchaser represents and warrants to Seller 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) Purchaser is a Maryland limited partnership, duly formed,
validly existing and in good standing under the laws of the State of
Maryland, and qualified to do business in the State of California.
(b) This Agreement is, and all the documents executed by
Purchaser which are to be delivered to Seller at the Closing will be,
duly authorized, executed, and delivered by Purchaser, and is and will
be legal, valid, and binding obligations of Purchaser enforceable
against Purchaser 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 Purchaser is
a party or to which it is subject.
(c) That except as otherwise expressly set forth in this Agreement,
neither Seller, nor anyone acting for or on behalf of Seller, has made
any representation, warranty, promise or statement, express or implied,
to Purchaser, or to anyone acting for or on behalf of Purchaser,
concerning the Property or the condition, use or development thereof.
Purchaser further represents and warrants that, in entering into this
Agreement, Purchaser has not relied on any representation, warranty,
promise or statement, express or implied, of Seller, or anyone acting
for or on behalf of Seller, other than as expressly set forth in this
Agreement, and that all matters concerning the Property have been or
shall be independently verified by Purchaser prior to the Closing, and
that Purchaser shall purchase the Property on Purchaser's own prior
investigation and examination of the Property (or Purchaser's election
not to do so); AND THAT, AS A MATERIAL INDUCEMENT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT BY SELLER, AND EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, PURCHASER IS PURCHASING THE PROPERTY IN AN "AS IS"
PHYSICAL CONDITION AND IN AN "AS IS" STATE OF REPAIR, WITH ALL FAULTS.
Except as may be expressly set forth in this Agreement, Purchaser does
hereby waive, and Seller does hereby disclaim, all warranties of any
type or kind whatsoever with respect to the Property, whether express
or implied, including, by way of description but not limitation, those
of fitness for a particular purpose and use. Notwithstanding anything
to the contrary herein, Purchaser and Seller acknowledge that any
written disclosures made by Seller prior to the Closing shall
constitute notice to Purchaser of the matter disclosed, and Seller
shall have no further liability thereafter if Purchaser thereafter con
summates the transaction contemplated hereby.
(d) Purchaser is not an employee benefit plan (a "Plan") subject
to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), nor a person or entity acting, directly or
indirectly, on behalf of any Plan or using the assets of any Plan to
acquire the Property, Purchaser is not a "party in interest" (as that
term is defined in Section 3(14) of ERISA with respect to any Plan that
is an investor in Seller, and Purchaser's acquisition of the Property
will not constitute or result in a prohibited transaction under Section
406 of ERISA or Section 4975 of the Code.
(e) It is expressly acknowledged by Purchaser that no financing
for this transaction shall be provided by Seller.
(f) Purchaser is sufficiently capitalized and has sufficient
assets such that it shall be able to pay any and all reasonably
anticipated liabilities, costs, claims and expenses of Purchaser in
connection with this Agreement.
8. DELIVERY OF DOCUMENTS.
Seller has delivered or shall deliver to Purchaser
within ten (10) days after execution of this Agreement true and correct
copies of the following documents relating to the Property (to the
extent the same are in Seller's possession or control), subject to the
confidentiality provisions of this Agreement, and the terms of an
Acknowledgement and Disclaimer in the form attached hereto as Exhibit
J, which Purchaser shall execute and deliver to Seller together with
Purchaser's executed copy of this Agreement:
(i) copies of all outstanding labor, service, equipment, supply,
management (excluding the current property management agreement),
maintenance, concession, utility, construction and operating contracts,
and any amendments thereto to which Seller is a party (collectively,
the "Service Contracts");
(ii) statement of insurance coverage and premiums by policy type,
and evidence of insurance (collectively, "Insurance Information")
(Purchaser acknowledges that Seller's insurance is carried under a
blanket policy which will not be assigned to Purchaser, and that
Purchaser shall be responsible for obtaining, at Purchaser's sole cost
and expense, all insurance relating to the Property which is necessary
or desirable);
(iii) engineering and physical inspection reports including
hazardous materials and asbestos reports, Phase 1 and Phase 2
environmental reports, if any;
(iv) all building permits, existing surveys, final, unqualified
and unconditional certificates of occupancy, governmental agreements
and approvals, complete architectural, structural and site plans;
(v) income and expense statements for 1994 and 1995, and for the
period from January 1, 1996 through October 15, 1996;
(vi) all base year information for all current Leases in place for
the Property;
(vii) the most current rent roll for the Property (the "Rent
Roll") which shall be updated to October 15, 1996, setting forth the
tenant name, suite number, approximate tenant Lease square footage,
Lease commencement date, Lease expiration date for all Leases at the
Property, security deposits and tenant prepayments. During reasonable
business hours during the Due Diligence Period, Purchaser may inspect
recent tenant correspondence for each tenant, as well as utility bills
and other matters relating to the operation of the Property present at
the property management office at the Property;
(viii) a budget for calendar year 1996;
(ix) an inventory of the Personal Property;
(x) tax bills for the Property for 1993-1994, 1994-1995, and 1995-
1996, together with the tax ▇▇▇▇ for 1996-1997; and
(xi) copies of all leases for the Property.
During the Due Diligence Period, Purchaser shall have the right to
conduct the inspections and investigations specified in Section 5 and
to review all the materials provided under this Section 8, as well as
any other materials Purchaser may elect to obtain and review at
Purchaser's sole cost and expense in connection with the Property.
Purchaser agrees to promptly deliver to Seller copies of all reports,
studies and results of tests and investigations obtained or conducted
by Purchaser with respect to the Property. Purchaser may at any time
during the Due Diligence Period terminate this Agreement in its sole
and absolute discretion, by sending to Seller and Escrow Company
written notice indicating Purchaser's election to so terminate the
Agreement. In the event Purchaser, in its sole and absolute
discretion, terminates this Agreement during the Due Diligence Period,
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. Purchaser's failure to terminate this Agreement
prior to the expiration of the Due Diligence Period in accordance with
the provisions of this Section 8 shall be deemed approval of the
Property and the matters covered by Purchaser's investigations and
inspections thereof and the only remaining contingencies to Purchaser's
obligation to consummate the transaction contemplated herein shall be
Purchaser's Conditions Precedent as set forth in Section 10(a) below.
Purchaser acknowledges and agrees that the foregoing deliveries will be
made by Seller to accommodate and facilitate Purchaser's investigations
relating to the Property, and 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
the materials delivered to Purchaser.
9. CONFIDENTIALITY.
Purchaser agrees that it shall keep confidential the
information contained in the materials provided by Seller for
Purchaser's inspection pursuant to Section 5 and Section 8, and shall
not disclose such information to any third parties; provided, however:
(i) Purchaser may disclose the information contained in the materials
provided by Seller for Purchaser's inspection to the extent required by
applicable reporting requirements of the Securities Exchange
Commission, and (ii) Purchaser shall have the right to provide such
information to its agents, consultants, proposed lenders, consultants,
attorneys and prospective investors in connection with Purchaser's
acquisition of the Property under the following conditions:
(a) Purchaser shall instruct the aforesaid parties to maintain
the confidentiality of such information;
(b) Upon the written request of Seller, Purchaser shall promptly
inform Seller of the identity of each party to whom such information is
furnished and when such information was furnished to each party; and
(c) Purchaser shall instruct such parties to return to Seller all
copies and originals of any documents relating to the Property provided
by Seller, upon Seller's written request.
If the transaction contemplated by this Agreement is not consum
mated for any reason, Purchaser promptly shall return to Seller, and
instruct its representatives, consultants, attorneys, and prospective
investors to return to Seller, all copies and originals of information
and materials previously provided for inspection by Seller to
Purchaser. The provisions of this Section 9 shall survive any
termination of this Agreement. This Section 9 shall cease to apply to
Purchaser upon the Closing of the purchase and sale contemplated by
this Agreement.
10. CONDITIONS PRECEDENT TO CLOSING.
(a) The following shall be conditions precedent to Purchaser's
obligation to consummate the purchase and sale transaction contemplated
herein (the "Purchaser's Conditions Precedent"):
(i) Purchaser shall not have terminated this Agreement in
accordance with Section 4, Section 8, Section 17(a) or Section 17(b)
of this Agreement within the time periods described in said Sections.
(ii) Title Company shall stand ready to issue, at the Closing, an
ALTA owner's policy of title insurance (the "Title Policy"), insuring
Purchaser's interest in the Real Property, dated the day of the
Closing, with liability in the amount of the Purchase Price, subject
only to the Permitted Exceptions.
(iii) Purchaser shall have received and reasonably approved,
at least ten (10) days prior to the Closing, executed estoppel
certificates substantially in the form of Exhibit C hereto from every
tenant occupying at least 2,500 rentable square feet, and, collectively
from tenants occupying at least eighty percent (80%) of the leasable
space in the Improvements which is leased as of the date of this
Agreement, provided, however, that if the form of estoppel certificate
attached hereto as Exhibit C requests information in addition to or
different than that required to be given pursuant to a tenant's Lease,
this condition will be satisfied for such tenant(s) if such tenant(s)
executes an estoppel certificate in the form required pursuant to its
Lease. If Seller is unable to obtain an estoppel certificate from a
sufficient number of tenants to satisfy the percentage set forth above,
then, in lieu thereof, Seller shall provide to Purchaser a certificate
pertaining to those tenants necessary to satisfy the percentage set
forth above covering the same matters that would have been set forth in
the tenant's estoppel certificate (and, in the event that, after the
Closing, Seller delivers to Purchaser a tenant estoppel certificate
from a tenant for whom Seller executed a Seller's certification at the
Closing, then Seller thereafter shall be released from said
certification). Subject to the preceding sentence, Seller's liability
in connection with any Seller's certificate shall not merge into any
instrument or conveyance delivered at the Closing; provided, however,
that any action, suit or proceeding with respect to the truth, accuracy
or completeness of such certificate shall be commenced and served, if
at all, on or before the date which is twelve (12) months after the
date of the Closing and, if not commenced and served on or before such
date, thereafter shall be void and of no force or effect.
(xv) There shall be no material breach of any of
Seller's representations, warranties or covenants set forth in Section
6 and Section 11, as of the Closing.
(iv) Seller shall have delivered to the Escrow Company the items
described in Section 12.
The conditions set forth in this Section 10(a) are solely for
the benefit of Purchaser and may be waived only by Purchaser.
Purchaser shall, at all times prior to the termination of this
Agreement, have the right to waive any of these conditions.
(b) The following shall be conditions precedent to Seller's obli
gation to consummate the purchase and sale transaction contemplated
herein (the "Seller's Conditions Precedent"):
(i) Purchaser shall not have terminated this Agreement in
accordance with Section 4, Section 8, Section 17(a) or Section 17(b) of
this Agreement within the time periods described in said Sections.
(ii) Purchaser shall have delivered to Escrow Company, prior to
the Closing, for disbursement as directed hereunder, all cash or other
immediately available funds due from Purchaser in accordance with this
Agreement.
(iii) There shall be no material breach of any of Purchaser's
representations, warranties or covenants set forth in Section 5 and
Section 7, as of the Closing.
(iv) Purchaser shall have delivered to Escrow Company the items
described in Section 13.
(v) Seller shall have received a fully executed letter in the
form attached hereto as Exhibit D from the broker(s) identified in
Section 19 below, which fully executed letter Seller shall obtain by
the end of the Due Diligence Period.
The conditions set forth in this Section 10(b) are solely for
the benefit of Seller and may be waived only by Seller. Seller shall,
at all times prior to the termination of this Agreement, have the right
to waive any of these conditions.
11. COVENANTS OF SELLER.
Seller hereby covenants with Purchaser, as follows:
(a) After the date hereof and prior to the Closing, no part of
the Property, or any interest therein, will be sold, encumbered or
otherwise transferred without Purchaser's consent.
(b) After the date hereof and prior to the Closing, Seller shall
not enter into any new Leases, or materially amend, modify or extend
any existing Leases, in any case without the prior written consent of
Purchaser (which consent shall not be unreasonably withheld or
delayed). Purchaser shall have two (2) business days from receipt of a
written lease proposal from Seller to consent to said lease. If
Purchaser does not respond in writing to Seller within said two (2)
business days, the lease shall be deemed approved. If Purchaser
disapproves a lease proposal received from Seller, Purchaser's written
response to the lease proposal shall state the reasons for such
disapproval. If Purchaser consents to any such new Lease, or to the
amendment, modification or extension of any existing Lease, Purchaser
shall be solely responsible for the payment of all leasing commissions
in connection therewith and any tenant improvement costs or allowance,
move-in allowance and any other payment to the tenant thereunder
(whether coming due prior to the Closing, if the transaction
contemplated by this Agreement closes, in which case any such amount
shall be payable to Seller at Closing, or after the Closing), provided
however, such commissions and costs shall be prorated between Seller
and Purchaser based on the portion of the term of the respective lease
(or renewal) which precedes Closing and the portion of the term of the
Lease which occurs after the Closing.
(c) Until the Closing, Seller shall keep the Property insured
against fire, vandalism and other loss, damage and destruction,
provided, however, that Seller's insurance policies shall not be
assigned to Purchaser at the Closing, and Purchaser shall be obligated
to obtain its own insurance coverage from and after the Closing.
(d) Until the Closing, Seller shall operate and maintain the
Property in the manner being operated and maintained on the date of
this Agreement.
12. SELLER'S CLOSING DELIVERIES.
At least one (1) business day prior to the Closing,
Seller shall deliver or cause to be delivered to Escrow Company the
following:
(a) A Grant Deed executed by Seller, the form of Exhibit E
attached hereto, conveying the Real Property to Purchaser free and
clear of all claims, liens and encumbrances except the Permitted
Exceptions and matters arising by or through Purchaser (the "Grant
Deed").
(b) A ▇▇▇▇ of Sale executed by Seller, in the form of Exhibit F
attached hereto, conveying to the Purchaser title to the Personal
Property, if any (the "▇▇▇▇ of Sale").
(c) An affidavit in the form of Exhibit G attached hereto,
certifying that Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code (the "Certificate of Non-Foreign
Status"), together with California Form 590.
(d) A General Assignment executed by Seller, in the form of
Exhibit H attached hereto, assigning to Purchaser the Service Contracts
and any warranties, guaranties and indemnities relating to the
Property, to the extent that such items are assignable (the "General
Assignment").
(e) An Assignment of Leases executed by Seller, in the form of
Exhibit I attached hereto, assigning to Purchaser all of Seller's
interest under the Leases (the "Assignment of Leases").
(f) Any other documents, instruments or agreements reasonably
necessary to effectuate the transaction contemplated by this Agreement.
13. PURCHASER'S CLOSING DELIVERIES.
At least one (1) business day prior to the Closing,
Purchaser shall deliver to Escrow Company:
(a) The balance of the Purchase Price, as adjusted for
Purchaser's share of the Closing costs, prorations, reimbursements and
adjustments as set forth in Sections 14 and 16 herein, in immediately
available funds.
(b) An executed counterpart of the General Assignment and the
Assignment of Leases, whereby Purchaser shall assume the obligations
relating to the matters set forth in such documents.
(c) Any other documents, instruments or agreements reasonably
necessary to effectuate the transaction contemplated by this Agreement.
14. PRORATIONS AND ADJUSTMENTS.
(a) The following shall be prorated and adjusted between Seller
and Purchaser as of the day of the Closing, except as otherwise
specified:
(i) General real estate, personal property and ad valorem taxes
and assessments, and any improvement or other bonds encumbering the
Property, for the current tax year for the Property.
(ii) Utility charges, if any, and such other items that are
customarily prorated in transactions of this nature shall be ratably
prorated.
(iii) Rent and other charges under the Leases (to the extent
such monies have actually been collected by Seller). Rents and other
charges under the Leases which are delinquent as of the Closing shall
not be prorated, and rents and other amounts received by Purchaser
after the Closing from a tenant owing such delinquent rent or other
charges shall be applied (A) first, to Purchaser's actual out-of-pocket
costs of collection incurred with respect to such tenant; (B) second,
to rents due from such tenant for the month in which such payment is
received by Purchaser; (C) third, to rents attributable to any period
after the Closing which are past due on the date of receipt; and (D)
finally, to rents and other charges delinquent as of the Closing (and
Purchaser promptly shall remit such amounts to Seller). Seller retains
the right to pursue and collect (through any lawful proceeding)
delinquent rents pertaining to Seller's period of ownership. Purchaser
agrees that it shall use commercially reasonable efforts to collect any
such delinquent rents and will not compromise or settle any of Seller's
claims regarding delinquent rent without Seller's written consent
(provided, however, that Purchaser shall have no obligation to
institute legal proceedings, including an action for unlawful detainer,
against a tenant owing delinquent rents).
(iv) The amount of all unapplied security deposits under the
Leases shall be credited to Purchaser.
For purposes of calculating prorations, Purchaser shall be deemed
to be in title to the Property, and, therefore, entitled to the income
therefrom and responsible for the expenses thereof for the entire day
upon which the Closing occurs. All such prorations shall be made on
the basis of the actual number of days of the month which shall have
elapsed as of the day of the Closing and based upon the actual number
of days in the month and a three hundred sixty-five (365) day year.
The amount of such prorations shall be initially performed by the
Escrow Company at Closing but shall be subject to adjustment in cash
after the Closing outside of escrow as and when complete and accurate
information becomes available, if such information is not available at
the Closing. Seller and Purchaser agree to cooperate and use their
best efforts to make such adjustments no later than sixty (60) days
after the Closing (except with respect to property taxes, which shall
be adjusted within sixty (60) days after the tax bills for the
applicable period are received). Without limiting the generality of
the foregoing, Seller and Purchaser hereby agree that (i) with respect
to any year-end reconciliations of reimbursable expenses under the
Leases, Seller and Purchaser shall cooperate to complete such
reconciliations as soon as possible after the Closing, with Seller
responsible for amounts owing to tenants under the Leases, and entitled
to amounts payable by tenants under the Leases (as the case may be),
with respect to periods prior to the Closing, and with Purchaser
responsible for amounts owing to tenants under the Leases, and entitled
to amounts payable by tenants under the Leases (as the case may be),
with respect to periods from and after the Closing (and, with respect
to any such amounts payable to Seller, Purchaser agrees that it shall
use commercially reasonable efforts to collect such amounts, provided,
however, that Purchaser shall have no obligation to institute legal
proceedings, including an action for unlawful detainer, against a
tenant owing any such amounts), and (ii) with respect to any property
tax appeals or reassessments filed by Seller for tax years prior to the
year in which the Closing occurs, Seller shall be entitled to the full
amount of any refund or rebate resulting therefrom (subject to any
requirement under the Leases to pay to the tenants thereunder a share
of any such refund or rebate, which shall be Seller's sole obligation),
and with respect to any property tax appeals or reassessments filed by
Seller for the tax year in which the Closing occurs, Seller and
Purchaser shall share the amount of any rebate or refund resulting
therefrom (after first paying to Seller all costs and expenses incurred
by Seller in pursuing such appeal or reassessment) in proportion to
their respective periods of ownership of the Property for such tax year
(with Seller and Purchaser each obligated for any amount of such refund
or rebate required to be paid to the tenants under the Leases for its
respective period of ownership of the Property for such tax year), and
(iii) in no event will there be any proration of insurance premiums
under Seller's existing policies of insurance relating to the Property,
and Purchaser acknowledges and agrees that none of Seller's insurance
policies (or any proceeds payable thereunder, except as expressly
provided for in Section 17 below) will be assigned to Purchaser at the
Closing, and Purchaser shall be solely obligated to obtain any and all
insurance that it deems necessary or desirable. Except as set forth in
this Section 14, all items of income and expense which accrue for the
period prior to the Closing will be for the account of Seller and all
items of income and expense which accrue for the period on and after
the Closing will be for the account of Purchaser. The provisions of
this Section 14 shall survive the Closing.
15. CLOSING.
The purchase and sale contemplated herein shall close
(the "Closing") fifteen (15) days after the end of the Due Diligence
Period or on such specific date and time mutually agreed to by the
parties, but in no event later than December 20, 1996. As used herein,
the term "Closing" means the date and time that Seller's Grant Deed is
recorded in the Official Records of the County in which the Land is
located (the "Official Records").
16. CLOSING COSTS.
Seller shall pay any documentary transfer tax due in
connection with the consummation of the transaction contemplated
herein, the premium for the Title Policy (including the cost of title
curative endorsements which Seller elects to obtain pursuant to Section
4 above) equal to the amount of a CLTA standard coverage owner's
policy, and fifty percent (50%) of all other escrow and closing costs.
Purchaser shall pay all costs and expenses incurred in connection with
obtaining any financing for the purchase of the Property, including any
additional title insurance premium payable in connection with Purchaser
obtaining an ALTA extended coverage owner's policy and any lender's
policy of title insurance, the cost of any title endorsements which are
not title curative endorsements which Seller elects to obtain pursuant
to Section 4 above, the fee for recording the Grant Deed and the
Assignment of Leases, and fifty percent (50%) of all other escrow and
closing costs. Each party shall bear the expense of its own counsel.
Unless otherwise specified herein, if the sale of the Property
contemplated hereunder does not occur because of a failure of one or
more of the conditions described Section 10(a)(i), (ii), or (iii), or
a default on the part of Purchaser, all escrow cancellation and title
fees shall be paid by Purchaser; if the sale of the Property does not
occur because of a default on the part of Seller, all escrow
cancellation and title fees shall be paid by Seller.
17. RISK OF LOSS.
(a) If, after the execution of this Agreement by Purchaser and
Seller, and prior to the Closing, the Improvements, or any part
thereof, are materially damaged (as set forth in Section 17(d)),
Purchaser shall have the right, exercisable by giving notice to Seller
within ten (10) business days after receiving written notice of such
damage or destruction (but in any event prior to the Closing), either
(i) to terminate this Agreement, in which case neither party shall have
any further rights or obligations hereunder (except as may be expressly
provided to the contrary elsewhere in this Agreement), and any money
(including, without limitation, the Deposit and all interest accrued
thereon) or documents in escrow shall be returned to the party
depositing the same and Purchaser and Seller each shall be responsible
for one-half of any title or escrow cancellation fee, or (ii) to accept
the Property in its then condition and to proceed with the Closing
without any abatement or reduction in the Purchase Price (except as set
forth in Section 17(f) below), and receive an assignment of all of
Seller's right to any insurance proceeds payable by reason of such
damage or destruction. If Purchaser elects to proceed under clause
(ii) above, Seller shall not compromise, settle or adjust any claims to
such proceeds without Purchaser's prior written consent.
(b) If prior to the Closing, all or any material portion (as set
forth in Section 17(d)) of the Property is subject to a taking by
public authority, Purchaser shall have the right, exercisable by giving
notice to Seller within five (5) days after receiving written notice of
such taking (but in any event prior to the Closing), either (i) to
terminate this Agreement, in which case neither party shall have any
further rights or obligations hereunder (except as may be expressly
provided to the contrary elsewhere in this Agreement), and any money
(including, without limitation, the Deposit and all interest accrued
thereon) or documents in escrow shall be returned to the party
depositing the same, and Purchaser and Seller each shall be responsible
for one-half of any title or escrow cancellation fee, or (ii) to accept
the Property in its then condition, without any abatement or reduction
in the Purchase Price, and receive an assignment of all of Seller's
rights to any condemnation award payable by reason of such taking. If
Purchaser elects to proceed under clause (ii) above, Seller shall not
compromise, settle or adjust any claims to such award without
Purchaser's prior written consent. As used in this Section 17,
"taking" shall mean any transfer of the Property or any portion thereof
to a governmental entity or other party with appropriate authority, by
exercise of the power of eminent domain.
(c) In the event that prior to the Closing, any non-material
portion of the Property is damaged or subject to a taking, Purchaser
shall accept the Property in its then condition (without any abatement
or reduction in the Purchaser Price except as set forth in Section
17(f) below) and proceed with the Closing, in which case Purchaser
shall be entitled to an assignment of all of Seller's rights to any
insurance proceeds or any award in connection with such taking, as the
case may be. In the event of any such non-material damage or taking,
Seller shall not compromise, settle or adjust any claims to such
insurance proceeds or such award, as the case may be, without
Purchaser's prior written consent.
(d) For the purpose of this Section 17, damage to the Property or
a taking of a portion thereof shall be deemed to involve a material
portion thereof if the reasonably estimated cost of restoration or
repair of such damage or the amount of the condemnation award with
respect to such taking shall exceed the sum of Two Hundred Fifty
Thousand Dollars ($250,000.00).
(e) Seller agrees to give Purchaser notice of any taking, damage
or destruction of the Property promptly after Seller obtains knowledge
thereof.
(f) If, after the execution of this Agreement by Purchaser and
Seller, and prior to the Closing, the Improvements, or any part
thereof, are damaged and Purchaser proceeds with the Closing, then
Purchaser shall receive a credit against the Purchase Price equal to
the reasonably estimated cost of restoration or repair of such damage,
subject to the following: (i) in no event shall such credit exceed the
sum of Two Hundred Fifty Thousand Dollars ($250,000.00), and (ii) if
insurance coverage is available to pay for all or a portion of the cost
of repair of such damage or for the loss of income arising from such
damage, then the credit shall be reduced by the amount of such
available insurance coverage.
18. DEFAULT.
(a) In the event Seller defaults in its obligations under this
Agreement, Purchaser shall have all remedies at law and in equity,
including, without limitation, specific performance; provided, however,
that in an action for damages, Purchaser shall be limited to recovering
its actual damages but not any consequential damages.
(b) IF PURCHASER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY AS A
RESULT OF PURCHASER'S DEFAULT, THE DEPOSIT, PLUS ANY INTEREST ACCRUED
THEREON, SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES.
THE AMOUNT PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES SHALL
BE SELLER'S SOLE REMEDY IN THE EVENT OF PURCHASER'S FAILURE TO CLOSE
THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO EXPRESSLY AGREE AND
ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY
PURCHASER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN
AND THAT THE AMOUNT OF THE DEPOSIT PLUS ANY INTEREST ACCRUED THEREON
REPRESENTS THE PARTIES' REASONABLE ESTIMATE OF SUCH DAMAGES. THE
PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A
FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES
TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND
1677. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION 18(b), SELLER AND PURCHASER AGREE THAT THIS LIQUIDATED DAMAGES
PROVISION IS NOT INTENDED AND SHOULD NOT BE DEEMED OR CONSTRUED TO
LIMIT IN ANY WAY PURCHASER'S INDEMNITY OBLIGATIONS UNDER SECTIONS 5 AND
19.
SELLER'S INITIALS: /s/ AJP /s/ME PURCHASER'S INITIALS: /s/RSZ
19. BROKER'S COMMISSION.
Purchaser and Seller each represents and warrants to the
other that no brokerage commission, finder's fee or other compensation
is due or payable with respect to the transaction contemplated hereby
other than a commission to be paid to CB Commercial Real Estate Group,
Inc. and First Property Realty Corporation pursuant to a separate
agreement, which shall be paid by Seller only upon the Closing of the
purchase and sale contemplated hereby. Purchaser hereby agrees to
indemnify, defend, and hold Seller harmless from and against any
losses, damages, costs and expenses (including, but not limited to,
attorneys' fees and costs) incurred by Seller by reason of any breach
or inaccuracy of the Purchaser's representations and warranties
contained in this Section 19. Seller hereby agrees to indemnify,
defend, and hold Purchaser harmless from and against any losses,
damages, costs and expenses (including, but not limited to, attorneys'
fees and costs) incurred by Purchaser by reason of any breach or
inaccuracy of Seller's representations and warranties contained in this
Section 19. The provisions of this Section 19 shall survive the
Closing.
20. ESCROW.
(a) Instructions. Within five (5) days after execution of this
Agreement, Purchaser and Seller each shall deposit a copy of this
Agreement executed by such party (or either of them shall deposit a
copy executed by both Purchaser and Seller) with Escrow Company. This
Agreement, together with such further instructions, if any, as the
parties shall provide to Escrow Company by written agreement, shall
constitute the escrow instructions. If any requirements relating to
the duties or obligations of Escrow Company hereunder are not accept
able to Escrow Company, or if Escrow Company requires additional in
structions, the parties hereto agree to make such deletions,
substitutions and additions hereto as counsel for Purchaser and Seller
shall mutually approve, which additional instructions shall not sub
stantially alter the terms of this Agreement unless otherwise expressly
agreed to by Seller and Purchaser.
(b) Deposits into Escrow. Seller shall make its deposits into
escrow in accordance with Section 12. Purchaser shall make its
deposits into escrow in accordance with Section 13. Escrow Company is
hereby authorized to close the escrow only if and when: (i) Escrow
Company has received all items to be delivered by Seller and Purchaser
pursuant to Sections 12 and 13; and (ii) Title Company can and will
issue the Title Policy concurrently with the Closing.
(c) Close of Escrow. Provided that Escrow Company shall not have
received written notice in a timely manner from Purchaser or Seller of
the failure of any condition to the Closing or of the termination of
the escrow, and if and when Purchaser and Seller have deposited into
escrow the matters required by this Agreement and Title Company can and
will issue the Title Policy concurrently with the Closing, Escrow
Company shall:
(i) Deliver to Purchaser: (i) the Grant Deed by causing it to be
recorded in the Official Records of the County of Los Angeles, State of
California and immediately upon recording delivering to Purchaser a
conformed copy of the Grant Deed; (ii) the ▇▇▇▇ of Sale; (iii) the
Certificate of Non-Foreign Status and California Form 590; (iv) the
General Assignment; and (v) the Assignment of Leases by causing it to
be recorded in the Official Records and immediately upon recording
delivering to Purchaser a conformed copy of the Assignment of Leases.
(ii) Deliver to Seller: the Purchase Price, after satisfying the
Closing costs, prorations and adjustments and any broker commission to
be paid by Seller pursuant to Sections 14, 16 and 19, respectively.
(iii) Deliver to Purchaser: any funds deposited by Purchaser,
and any interest earned thereon, in excess of the amount required to be
paid by Purchaser hereunder.
(iv) Deliver the Title Policy issued by Title Company to Purchaser.
(d) Real Estate Reporting Person. Escrow Company is hereby
designated the "real estate reporting person" for purposes of section
6045 of title 26 of the United States Code and Treasury Regulation
1.6045-4 and any instructions or settlement statement prepared by
Escrow Company shall so provide. Upon the consummation of the
transaction contemplated by this Agreement, Escrow Company shall file
Form 1099 information return and send the statement to Seller as
required under the aforementioned statute and regulation.
21. MISCELLANEOUS.
(a) Purchaser acknowledges that Trust Company of the West is
entering into this Agreement as trustee of a trust created under the
laws of California and agrees to look solely to the assets of the
beneficiary of such trust for the enforcement of any claims against
Seller, as neither Trust Company of the West nor any of its affiliated
entities (including, but not limited to, Westmark Real Estate
Investment Services, Westmark Realty Advisors L.L.C., TCW Realty
Advisors, CB Commercial Realty Advisors, Inc. and CB Commercial Real
Estate Group, Inc.) nor any investor or participant in the beneficiary
of such trust nor any of their respective officers, directors,
employees, partners or shareholders assume any personal liability for
any of the obligations entered into on behalf of Seller.
(b) Each individual and entity executing this Agreement hereby
represents and warrants that he, she or it has the capacity set forth
on the signature pages hereof with full power and authority to bind the
party on whose behalf he, she or it is executing this Agreement to the
terms hereof.
(c) This Agreement is the entire Agreement between the parties
hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, whether oral or written, between
the parties with respect to the matters contained in this Agreement.
Any waiver, modification, consent or acquiescence with respect to any
provision of this Agreement shall be set forth in writing and duly
executed by or in behalf of the party to be bound thereby. No waiver
by any party of any breach hereunder shall be deemed a waiver of any
other or subsequent breach.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken
together shall constitute one and the same instrument. The signature
page of any counterpart may be detached therefrom without impairing the
legal effect of the signature(s) thereon provided such signature page
is attached to any other counterpart identical thereto except having
additional signature pages executed by other parties to this Agreement
attached thereto.
(e) Time is of the essence in the performance of and compliance
with each of the provisions and conditions of this Agreement.
(f) Any communication, notice or demand of any kind whatsoever
which either party may be required or may desire to give to or serve
upon the other shall be in writing and delivered by personal service
(including express or courier service), by electronic communication,
whether by telex, telegram or telecopy (if confirmed in writing sent by
registered or certified mail, postage prepaid, return receipt
requested), or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
Purchaser: ARDEN REALTY LIMITED PARTNERSHIP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Executive Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: Christensen, Miller, Fink, Jacobs, ▇▇▇▇▇▇,
Weil & ▇▇▇▇▇▇▇, LLP
2121 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Seller: TRUST COMPANY OF THE WEST,
a California corporation,
as trustee of TCW REALTY FUND III
c/o Westmark Realty Advisors
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ & Fox
1901 Avenue of the Stars, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Escrow Company: Commonwealth Land Title Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇ ▇▇▇▇▇
Telephone: (800) 432-0706 ext. 112
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Title Company: Commonwealth Land Title Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (800) 950-9772 ext. 6421
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address for notice by written notice given to
the other in the manner provided in this Section. Any such communication,
notice or demand shall be deemed to have been duly given or served on the
date personally served, if by personal service, on the date of confirmed
dispatch, if by electronic communication, or three (3) days after being
placed in the U.S. Mail, if mailed.
(g) The parties agree to execute such instructions to Escrow
Company and Title Company and such other instruments and to do such fur
ther acts as may be reasonably necessary to carry out the provisions of
this Agreement.
(h) The making, execution and delivery of this Agreement by the
parties hereto has been induced by no representations, statements,
warranties or agreements other than those expressly set forth herein.
(i) Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be valid under applicable law, but,
if any provision of this Agreement shall be invalid or prohibited
thereunder, such invalidity or prohibition shall be construed as if
such invalid or prohibited provision had not been inserted herein and
shall not affect the remainder of such provision or the remaining
provisions of this Agreement.
(j) The language in all parts of this Agreement shall be in all
cases construed simply according to its fair meaning and not strictly
for or against any of the parties hereto. Section headings of this
Agreement are solely for convenience of reference and shall not govern
the interpretation of any of the provisions of this Agreement.
References to "Sections" are to Sections of this Agreement, unless
otherwise specifically provided.
(k) This Agreement shall be governed by and construed in ac
cordance 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 party 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 21.12 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 J, 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 21.17 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.
[SIGNATURES ON NEXT PAGE]
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: TRUST COMPANY OF THE WEST,
a California corporation,
as trustee of TCW REALTY FUND III
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Authorized Signatory
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Its Authorized Signatory
PURCHASER: ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
By: Arden Realty Group, Inc.
a Maryland corporation,
Its General Partner
Date: December 6, 1996 Signature: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: CEO
The Company hereby agrees to furnish supplementally the omitted
exhibits and schedules to the Commission upon request.