EXHIBIT 10.2
AGREEMENT OF SALE
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between
ROBERT M. DAVIDSON AND JANICE G. DAVIDSON,
Seller,
and
CUC REAL ESTATE HOLDINGS, INC.
Purchaser
Premises
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19840 Pioneer Avenue
Torrance, CA 90503
Dated as of July 23, 1996
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
TABLE OF CONTENTS
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Section Page
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1. Sale-Purchase . . . . . . . . . . . . . . . . . . . . . 1
2. Purchase Price . . . . . . . . . . . . . . . . . . . . 2
3. Manner of Payment . . . . . . . . . . . . . . . . . . . 2
4. Permitted Exceptions . . . . . . . . . . . . . . . . . 2
5. Closing Date . . . . . . . . . . . . . . . . . . . . . 2
6. Violations . . . . . . . . . . . . . . . . . . . . . . 3
7. Apportionments . . . . . . . . . . . . . . . . . . . . 3
8. Title Insurance . . . . . . . . . . . . . . . . . . . . 4
9. Closing Documents . . . . . . . . . . . . . . . . . . . 5
10. Representations and Warranties . . . . . . . . . . . . 7
11. Seller's Covenants . . . . . . . . . . . . . . . . . . 12
12. Mechanic's Liens . . . . . . . . . . . . . . . . . . . 13
13. Broker . . . . . . . . . . . . . . . . . . . . . . . . 14
14. Condemnation and Destruction . . . . . . . . . . . . . 14
15. Environmental Inspection . . . . . . . . . . . . . . . 15
16. Default . . . . . . . . . . . . . . . . . . . . . . . . 15
17. Indemnification . . . . . . . . . . . . . . . . . . . . 16
18. Non Liability . . . . . . . . . . . . . . . . . . . . . 16
19. Notices . . . . . . . . . . . . . . . . . . . . . . . . 16
20. Entire Agreement . . . . . . . . . . . . . . . . . . . 17
21. Amendments . . . . . . . . . . . . . . . . . . . . . . 17
22. Waiver . . . . . . . . . . . . . . . . . . . . . . . . 18
23. Successors and Assigns . . . . . . . . . . . . . . . . 18
24. Paragraph Headings . . . . . . . . . . . . . . . . . . 18
27. Governing Law . . . . . . . . . . . . . . . . . . . . . 18
28. Restrictions on Assignment . . . . . . . . . . . . . . 18
29. Time of the Essence . . . . . . . . . . . . . . . . . . 18
30. Counterparts . . . . . . . . . . . . . . . . . . . . . 18
31. Separability . . . . . . . . . . . . . . . . . . . . . 18
32. Termination . . . . . . . . . . . . . . . . . . . . . . 19
Exhibits
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A. Legal Description
B. Deed
C. Bill of Sale
D. Assignment and Assumption of Lease
E. Lease
F. List of Contracts
THIS AGREEMENT OF SALE (the "Agreement"), made as of the 23rd
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day of July, 1996, between ROBERT M. DAVIDSON AND JANICE G. DAVIDSON
(collectively, "Seller"), individuals having an address c/o Davidson &
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Associates, Inc., 19840 Pioneer Avenue, Torrance, CA 90503 and CUC
REAL ESTATE HOLDINGS, INC. ("Purchaser"), a Delaware corporation,
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having an office at 707 Summer Street, Stamford, Connecticut 06901.
W I T N E S S E T H :
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1. Sale-Purchase. In consideration of the mutual
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covenants and agreements hereinafter set forth, and subject to the
consummation of the Merger (as hereinafter defined) Seller agrees to
sell and convey to Purchaser, and Purchaser agrees to purchase from
Seller, all of Seller's right, title and interest in and to that
certain plot, piece or parcel of land located in the City of Torrance,
County of Los Angeles, State of California, more particularly
described in Exhibit "A" annexed hereto and made a part hereof (the
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"Land"), together with: (a) all easements, rights of way, privileges,
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appurtenances and other rights pertaining thereto; (b) all buildings
and improvements and fixtures now or hereafter erected thereon
(collectively, the "Building"), and all fixtures, machinery, equipment
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and other articles of personal property now or hereafter attached or
appurtenant thereto, or used in connection therewith which are owned
by Seller, if any; (c) leases in which Seller is the lessee, if any,
of equipment used in the operation or maintenance of the Premises, if
and to the extent same are transferrable, and, if the consent of the
lessor thereunder is required, if such consent is obtained by
Purchaser prior to the Closing Date; and (d) all right, title and
interest, if any, of Seller in and to any land lying in the bed of any
street, road or avenue opened or proposed, public or private, in front
of or adjoining the Premises, to the center line thereof, and all
right, title and interest of Seller in and to any award made or to be
made in lieu thereof and in and to any unpaid award for damage to the
Premises by reason of change of grade of any street (the Land, the
Building and other rights, improvements and property heretofore
mentioned being hereinafter collectively referred to as the
"Premises"). Seller shall execute and deliver to Purchaser, on the
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delivery of the Deed (hereinafter defined) and the consummation of the
transactions contemplated hereby (the "Closing"), all proper instru
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ments for the conveyance of such title and the assignment and
collection of any such award.
2. Purchase Price. The purchase price for the Premises
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(the "Purchase Price") shall be Five Million Five Hundred Forty-Five
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Thousand and 00/100 Dollars ($5,545,000.00)
3. Manner of Payment. The Purchase Price, as the same may
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be affected by apportionments, shall be paid at Closing (hereinafter
defined) as provided in this Section.
A. At the Closing and upon the terms and subject to
the conditions of this Agreement, Purchaser shall deliver to Seller a
certificate or certificates representing the number of shares of
Purchaser's common stock equal to (x) the Purchase Price hereunder,
divided by (y) Thirty-Seven and 50/100 Dollars ($37.50) (the closing
price for Purchaser's common stock on February 16, 1996), registered
in the name of Seller (the "Shares"), and cash in lieu of fractional
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shares. All shares of Purchaser's common stock delivered to Seller
under this Agreement shall be free and clear of all liens and encum-
brances, fully paid and non-assessable.
B. Purchaser agrees that the Shares shall be deemed
Registrable Securities under the Registration Rights Agreement (as
such term is defined in the Merger Agreement referred to in Section 5
hereof).
C. The parties acknowledge and agree that no portion
of the Purchase Price has been allocated to any personal property to
be conveyed hereunder.
4. Permitted Exceptions. The Premises shall be sold, and
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fee simple title thereto shall be conveyed, free and clear of any and
all liens or encumbrances, other than (i) the exceptions to title
shown on the Title Report (hereinafter defined) and (ii) non-
delinquent real property taxes ("Permitted Exceptions"). The issuance
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by the title company of the Title Policy (as hereinafter defined)
shall be conclusive evidence of Seller's compliance herewith.
5. Closing Date. The closing of the sale of the Premises
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hereunder (the "Closing") shall be held simultaneously with and at the
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same location as the closing of the merger (the "Merger") under that
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certain Agreement
and Plan of Merger (the "Merger Agreement"), dated as of February 19,
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1996, among Davidson & Associates, Inc., CUC International Inc. and
Stealth Acquisition II Corp.
6. Violations. The work required to eliminate any
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violations of law or municipal ordinances, orders or requirements
which have been noted in, or issued by, the departments of building,
fire, labor, health or other Federal, State, County or Municipal
departments having jurisdiction against or affecting the Premises on
or prior to the Closing Date shall be performed by Seller, at Seller's
sole cost and expense, by the Closing Date. Purchaser and Purchaser's
representatives shall have the right to enter upon and inspect the
Premises for any such violations from time to time on or before the
Closing Date. Notwithstanding the foregoing, Seller shall not be
required to perform work with respect to a given violation in the
event that either (i) Purchaser has received notice of such violation
from Seller prior to March 29, 1996 or (ii) Purchaser had actual
knowledge of such violation prior to March 29, 1996.
7. Apportionments.
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A. Purchaser and Seller agree to make apportionments
as of 11:59 p.m. of the day next preceding the Closing Date of non-
delinquent real property taxes, water rates and charges, sewer taxes,
assessments, rental income and expenses and other items which may
customarily be apportioned at real estate closings.
B. Seller has made and agrees to continue to make
available for Purchaser's examination at any time after the date
hereof, all records, statements and accounts bearing on or relating to
(a) rents and revenues and the collection thereof, and (b) the
operation of the Premises and expenditures made in connection
therewith. On the Closing Date, Seller shall furnish Purchaser with a
comprehensive and complete statement of prepaid rents and other
revenues and uncollected rents and other revenues certified as true
and complete, and shall pay over to Purchaser any rents and other
revenues collected by Seller which pertain to any period of time
commencing with the Closing Date.
C. If any refund of real property taxes, water rates
and charges or sewer taxes and rents is made after the Closing Date
for a period prior to the Closing Date, the same shall be applied
first to the costs incurred in obtaining same and the balance, if any,
shall be paid to the Seller (for the period prior to the Closing Date)
and the Purchaser (for the period commencing with the Closing Date).
D. To the extent that rents are received by Purchaser
or Seller after the Closing Date, the amount thereof shall be applied
in the following order of priority: (i) first, to the month in which
the Closing occurred; (ii) second, to any month or months following
the month in which the Closing occurred; and (iii) third, to any month
or months prior to the month in which the Closing occurred. If rents
or any portion thereof received by Purchaser or Seller after the
Closing are payable to the other party by reason of this allocation,
the appropriate sum, less a proportionate share of any reasonable
attorneys' fees, costs and expenses of collection thereof shall be
paid promptly to the other party, which obligations shall survive the
Closing.
8. Title Insurance.
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A. Seller has furnished to Purchaser a current
preliminary title insurance report and commitment (the "Title
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Report"). Seller shall forthwith undertake, with due diligence, to
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eliminate those exceptions appearing in the Title Report which
Purchaser is not required to accept under the terms of this Agreement
(i.e., exceptions other than Permitted Exceptions). If the Title
Report discloses judgments, bankruptcies or other returns against
other persons having names the same as or similar to that of Seller,
Seller on request, shall deliver to Purchaser affidavits showing that
such judgments, bankruptcies or other returns are not against Seller.
Seller also shall deliver any affidavits and documentary evidence
required by the Title Company to eliminate exceptions appearing in the
Title Report which Seller contests.
B. At the Closing, Seller shall deliver to Purchaser
a CLTA title insurance policy (the "Title Policy") showing fee simple
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title vested in Purchaser subject only to Permitted Encumbrances.
C. The premium for the Title Policy to be issued by
the Title Company to Purchaser shall be paid at the Closing by Seller.
Seller shall pay any additional premium or charge required by the
Title Company to remove (a) exceptions relating to mechanic's liens,
and (b) any other exceptions that Seller elects to remove by making
such payment. Seller shall also pay any and all recording and filing
fees and transaction taxes incurred in connection with the transfer of
the Premises for Purchaser, including, without limitation, all
transfer, transfer gains, stamp and sales taxes.
D. The Seller shall eliminate any liens or
encumbrances affecting the Premises which may be removed or satisfied
by the payment of a liquidated sum of money, and Seller shall not be
deemed unable to convey title in accordance with the terms of this
Agreement if it shall fail or refuse to eliminate any such liens or
encumbrances. Notwithstanding the foregoing, Seller, in lieu of
satisfying such liens or encumbrances, may deposit with the Title
Company such amount of money as may be determined by the Title Company
as being sufficient to induce it to insure the Purchaser against
collection of such liens and/or encumbrances, including interest and
penalties, out of or against the Premises, in which event such liens
and encumbrances shall not be objections to title. Notwithstanding
the foregoing, Seller shall not be required to eliminate a given lien
or encumbrance of which Purchaser had actual knowledge prior to March
29, 1996.
9. Closing Documents.
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A. At the Closing, Seller, at its sole cost and
expense, shall deliver to Purchaser the following:
(i) a grant deed in the form annexed hereto as
Exhibit "B" (the "Deed"), so as to convey to Purchaser good,
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marketable and insurable fee simple absolute title to the Premises,
free and clear of all liens and encumbrances other than Permitted
Exceptions, which Deed shall be in recordable form, duly executed and
acknowledged, and shall have affixed thereto, at Seller's sole cost
and expense, any requisite surtax, documentary tax stamps, and/or
transfer tax in the proper amount. Seller shall defend, indemnify and
hold Purchaser harmless from and against any damage, loss, cost and
expense, including attorney's fees and disbursements, arising out of
or resulting from Seller's failure to pay for any transfer taxes which
are or may become due and payable as a result of the sale of the
Premises. The provisions of this Section 10A(i) shall survive the
Closing;
(ii) a bill of sale in the form annexed hereto as
Exhibit "C" (the "Bill of Sale") conveying, transferring and selling
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to Purchaser all right, title and interest of Seller in and to all of
the personal property of Seller being sold to Purchaser, if any, which
Bill of Sale shall contain a warranty that such property is free and
clear of all liens, encumbrances and security interests (other than
the Permitted Exceptions) and adverse claims. Seller shall prepare,
execute and file any required sales tax return and pay any sales tax
due thereon. Seller shall defend, indemnify and hold Purchaser
harmless from and against any damage, loss, cost and expense,
including attorney's fees and disbursements, arising out of or
resulting from Seller's failure to pay for any sales tax which is or
may become due and payable as a result of the sale of such personal
property. The provisions of this Section 10A(ii) shall survive the
Closing;
(iii) all required permanent certificates of
occupancy for the Building and improvements comprising a part of the
Premises to the extent in the possession of Seller at Closing;
(iv) all original (a) licenses and permits
pertaining to the Premises and which may be required for the use or
occupancy thereof, (b) records and other documents pertaining to the
ownership, operation and maintenance of the Premises as may be in
Seller's possession, and (c) insurance policies affecting the Premises
and which are to be transferred to Purchaser at Purchaser's request
and (d) service and other contracts relating to the Premises, all to
the extent in the possession of Seller at Closing, together with an
assignment (the "General Assignment") of such items thereof as shall
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be assignable;
(v) all assignable guaranties and warranties
which Seller has received in connection with any work or services
performed, or to be performed with respect to, or equipment installed
in the Premises, all to the extent in the possession of Seller at
Closing, and Seller shall cooperate with Purchaser in enforcing any
such guaranties and warranties not assignable, which obligation shall
survive the Closing;
(vi) an assignment of any leases in the form of
the Assignment and Assumption of Lease annexed hereto as Exhibit "D";
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(vii) Seller's executed counterparts of any lease
and any amendments, and other letters or other documents
relating thereto, together with schedules of security deposits paid by
the tenant thereunder, applications thereof heretofore made by the
Seller, current deposit balances and the Seller's separate certified
check, payable to the order of the Purchaser (or as otherwise directed
by the Purchaser), in the amount of the security deposit held under
the lease, it being agreed that the Seller shall not apply, release or
return any such security deposit prior to the Closing Date. The
Purchaser shall execute a receipt for the security deposit paid over
to it at the Closing, and shall execute an agreement whereby the
Purchaser holds the Seller free and harmless from any liability for
any application thereof made after the Closing Date;
(viii) the original Title Policy showing only such
exceptions as are Permitted Exceptions;
(ix) an executed Affidavit of Non-Foreign Status,
in form acceptable to Purchaser, certifying that Seller is not a
"foreign person" pursuant to Section 1445 of the Internal Revenue Code
of 1986 and the Temporary and Proposed Treasury Regulations
promulgated thereunder;
(x) any keys in Seller's possession to entrance
doors to, and equipment and utility rooms located in, the Premises,
which keys shall be properly tagged for identification; and
(xi) such other documents as may be reasonably
required to effectuate the transaction contemplated by this Agreement.
10. Representations and Warranties.
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A. Seller represents, warrants and agrees that:
(i) Seller owns legal and beneficial title to the
Premises;
(ii) the lease set forth in Exhibit "E" (the
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"Lease") is true, correct and complete and has not been modified or
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amended and is valid and enforceable in accordance with its terms, is
in full force and effect, and neither the landlord nor, to the
knowledge of Seller, the tenant thereunder (the "Tenant") is in
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default of any of its obligations under the Lease; the Tenant is in
possession of the premises leased by it; the rents under the Lease are
actually being paid; the Tenant has not paid any rent for more than
one (1) month in advance; other than as specifically provided in the
lease, the Tenant does not claim and
is not entitled to "free" rent, rent concessions, rebates, rent
abatements, set-offs or offsets against rent or other charges; all
work required to be performed by the landlord under the Lease, if any,
has been completed and fully paid for; Seller has assigned none of its
rights under the Lease; no representation or covenant has been made by
Seller to the Tenant except as incorporated in the Lease; all
representations made by the landlord in the Lease or any documents
relating thereto are true and correct; any consents or notices
required to be obtained or given under the terms of the Lease in
connection with this transaction have been obtained or given, as the
case may be; and that neither the Lease nor any security deposit made
thereunder are then subject to any liens, security interests or
adverse claims;
(iii) the copies of the real property tax bills for
the Premises for the current tax year which have been furnished by
Seller to Purchaser are true and correct copies of all of the tax
bills for the Premises;
(iv) to Seller's knowledge, the Premises comply
with all building, fire, zoning and other ordinances and regulations
applicable thereto;
(v) to Seller's knowledge, the Premises and the
present condition thereof do not violate any applicable deed
restrictions or other covenants, restrictions or agreements, site plan
approvals, zoning or subdivision regulations or urban redevelopment
plans applicable to the Premises, as modified by any duly issued
variances;
(vi) no notes or notices of violation of law or
municipal ordinances or of Federal, State, County or municipal or
other governmental agency regulations, orders or requirements relating
to the Premises have been entered or received by Seller, and Seller
has no reason to believe that any such note or notice may or will be
entered;
(vii) to Seller's knowledge, all water, sewer, gas,
electricity, telephone and other utilities serving the Premises are
supplied directly to the Premises by facilities of public utilities
and the cost of installation of such utilities has been fully paid
for;
(viii) there is no action or proceeding (zoning or
otherwise) or governmental investigation pending, or, to the knowledge
of Seller, threatened against or relating to Seller, the Premises or
the transaction contemplated by this Agreement,
nor, to the knowledge of Seller, is there any basis for such action,
and Seller shall indemnify Purchaser against, and shall hold Purchaser
harmless from, any and all damages, costs, expenses and liability,
including, without limitation, attorney's fees and disbursements,
incurred or sustained by Purchaser because of said litigation or the
prosecution or defense thereof or any appeals or ancillary proceedings
with respect thereto;
(ix) Seller has no knowledge of any federal,
state, county or municipal plans to change the highway or road system
in the vicinity of the Premises or to restrict or change access from
any such highway or road to the Premises or of any pending or
threatened condemnation of the Premises or any part thereof or of any
plans for improvements which might result in a special assessment
against the Premises;
(x) to Seller's knowledge, all roads bounding the
Premises are public roads and the Deed is the only instrument
necessary to convey to Purchaser full access to and the right to such
roads freely as well as all rights appurtenant to the Premises in such
roads;
(xi) all fixtures, machinery and equipment
included in this sale are owned free and clear of any liens and
encumbrances, except for the Permitted Exceptions;
(xii) to Seller's knowledge, the foundation,
structure and roof of the Building are sound;
(xiii) Seller has not retained anyone to file
notices of protest against, or to commence actions to review, real
property tax assessments against the Premises, and is not aware that
any such action has been taken by or on behalf of the Tenant;
(xiv) (a) to Seller's knowledge, the Premises are
free of contamination from any substance or material presently
identified to be toxic or hazardous (collectively, "Hazardous
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Material") according to any applicable federal, state or local
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statute, rule or regulation (collectively, the "Law"), including,
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without limitation, any asbestos, pcb, radioactive substance, methane,
volatile hydrocarbons, industrial solvents or any other material or
substance which has in the past or could presently or at any time in
the future cause or constitute a health, safety or other environmental
hazard to any person or property; (b) to Seller's knowledge, no
discharge, spillage, uncontrolled loss, seepage or filtration of oil
or petroleum or chemical liquids or solids, liquid or gaseous products
or
hazardous waste, or hazardous substance has occurred at, upon, under
or within the Premises or any contiguous real estate; (c) neither the
Seller nor, to Seller's knowledge, any other party has been, is or
will be involved in operations at or near the Premises which could
lead to the imposition on the Seller or any other owner of the
Premises of liability or the creation of a lien on the Premises under
the Law or under any similar applicable laws or regulations; and (d)
to Seller's knowledge, neither the Premises, nor any portion thereof,
now contain, nor in the past have contained, any underground or
aboveground tanks for the storage of fuel oil, gasoline and/or other
petroleum products or by-products. Seller shall defend, indemnify and
hold Purchaser harmless from and against any claims against Purchaser
and any loss, cost, damage and expense, including, without limitation,
attorney's fees and disbursements, suffered by Purchaser, arising out
of or in any way related to a breach of the aforesaid representation
and warranty and the provisions of this Section 11(xiv) shall survive
the Closing;
(xv) Seller is not a "foreign person" as defined
in Section 1445 of the Internal Revenue Code of 1986 and the Temporary
and Proposed Treasury Regulations promulgated thereunder;
(xvi) other than as set forth on Exhibit "F"
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annexed hereto and made a part hereof, there are no service,
maintenance, employment or any other contracts or agreements to which
Seller is a signatory and which affect the Premises;
(xvii) other than the Lease, there are no leases
executed with the respect to the Premises and no person or entity
other than the Tenant has any right of possession to all or any
portion of the Premises;
(xviii) no person or entity has any option to
purchase to the Premises and no person has a right of first refusal to
purchase the Premises;
(xix) Seller has furnished to Purchaser an accurate
schedule of all insurance policies now affecting the Premises and the
only insurance policies carried on the Premises are those set forth on
said Schedule; and
(xx) Seller hereby represents, warrants and
covenants that it has not taken and will not take or agree to take any
action with respect to the Premises or the sale thereof to Purchaser
which would prevent the Merger (as defined in the
Merger Agreement) from qualifying, or being accounted for, as a
pooling of interests.
B. Seller acknowledges that each of the
representations, warranties and agreements made by it in this Section
11 and elsewhere in this Agreement is material to Purchaser hereunder.
C. All of the representations, warranties and
agreements set forth herein and elsewhere in this Agreement shall be
true upon the execution of this Agreement and shall be deemed to be
repeated at and as of the Closing Date.
D. Notwithstanding anything to the contrary herein
contained, if Purchaser determines that any of Seller's
representations or warranties are untrue or Seller has not complied
with any of its obligations under this Agreement, then Purchaser shall
have no recourse against Seller for any such breach or failure to
perform or under any indemnification provision provided in this
Agreement unless and until Seller's liabilities, damages, costs and
expenses exceed $100,000.00, and then only for such excess, and
Seller's liability in respect of such indemnities (i) shall not exceed
10% of the Purchase Price, and (ii) shall be satisfied solely by
delivery to Purchaser of shares of Purchaser's common stock valued at
the date preceding delivery of such shares to Purchaser.
11. Seller's Covenants. Seller covenants that, between the
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date hereof and the Closing Date:
A. Seller shall perform all of Seller's obligations
as landlord under the Lease, will not modify, cancel, extend or
otherwise change in any manner any of the terms, covenants or
conditions of the Lease, any guaranty, the insurance policies carried
on the Premises, or any of the other agreements affecting the Premises
or enter into any new leases of space in the Premises or any other
occupancy agreements affecting the Premises, without the prior written
consent of Purchaser;
B. Seller shall not enter into any employment
contract, service contract or any other agreement in respect of the
Premises without the prior written consent of Purchaser;
C. Seller shall not permit any mechanic's or other
lien, charge or order for the payment of money to be filed against the
Premises;
D. Seller shall cause the conditions of Purchaser's
obligation to close title to be met subject, however, to the
provisions of Section 8A hereof; and
E. Seller shall execute such documentation and take
such action in connection with the transaction contemplated hereby as
Purchaser shall reasonably request in order that the Merger shall
qualify, and be accounted for, as a pooling of interests.
F. Other than the use and storage of Hazardous
Materials incidental to Seller's business and provided such use or
storage, as the case may be, is in compliance with Law, from the date
hereof until the Closing hereunder, the Premises shall remain free
from Hazardous Material in any form. If Hazardous Material shall be
discovered at any time prior to the Closing hereunder, the work
required to eliminate any such Hazardous Material affecting the
Premises shall be performed by Seller, at Seller's sole cost and
expense, by the Closing Date. Seller shall use its best efforts and
due diligence to have all such Hazardous Material removed before the
Closing Date. In the event that any of such work is not completed, or
all Hazardous Material has not been removed from the Premises, prior
to the Closing, Seller shall deposit with Purchaser's attorneys in
escrow, at the Closing, an amount sufficient to cover the cost of said
removal, as estimated in good faith by Purchaser, and Seller shall
remove such Hazardous Material, as promptly as possible after the
Closing at Seller's sole cost and expense, notwithstanding the amount
of any such estimate. If the work required to remove such Hazardous
Material has not been completed within sixty (60) days after the
Closing, Purchaser shall be entitled to take the necessary action to
remove such Hazardous Material and shall be entitled to reimbursement
for sums expended in that regard from sums held in escrow by
Purchaser's attorneys. In the event the amount of funds remaining in
the escrow shall be insufficient to complete the work necessary to
remove such Hazardous Material from the Premises, Seller shall
promptly upon demand deposit in escrow the amount reasonably estimated
by Purchaser to be sufficient to complete such work. After all
Hazardous Material in the Premises has been removed, any sums
remaining in such escrow shall be promptly returned to Seller.
Promptly upon request made by Purchaser, Seller shall furnish
Purchaser with any required authorization to make searches for such
Hazardous Material. The provisions of this Section 12F shall survive
the Closing.
12. Mechanic's Liens. If, subsequent to the Closing Date,
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any mechanic's or other lien, charge or order for the
payment of money shall be filed against the Premises or against
Purchaser or Purchaser's assigns, based upon any act or omission, or
alleged act or omission before or after the Closing Date, of Seller,
its agents, servants or employees, or any contractor, subcontractor or
materialman connected with the construction and completion by Seller
of improvements at the Premises, or repairs made to the Premises by or
on behalf of Seller (whether or not such lien, charge or order shall
be valid or enforceable as such), within ten (10) days after notice to
Seller of the filing thereof, Seller shall take such action, by
bonding, deposit, payment or otherwise, as will remove or satisfy such
lien of record against the Premises. The provisions of this Section
13 shall survive the Closing.
13. Broker. Seller and Purchaser each represent to the
------
other that they have dealt with no real estate brokers or other
persons acting as such in connection with this transaction. Seller
and Purchaser each agree to indemnify, hold harmless and defend the
other party from or against any claim for brokerage commissions
asserted as a result of such party's acts or omissions. The
provisions of this Section 14 shall survive the Closing.
14. Condemnation and Destruction.
----------------------------
A. If, prior to the Closing Date, all or any
significant portion of the Premises is taken by eminent domain (or is
the subject of a pending or contemplated taking which has not been
consummated), Seller shall notify Purchaser of such fact and Purchaser
shall have the option to (A) terminate this Agreement upon notice to
Seller given not later than ten (10) days after receipt of Seller's
notice, or (B) take title to the Premises or such portion thereof as
shall not have been taken, in which event Seller shall assign and turn
over, and Purchaser shall be entitled to receive and keep, all awards
for the taking by eminent domain. For purposes hereof, a "significant
portion" includes any portion of the Building comprising a part of the
Premises, the parking areas or driveways thereon, any means of ingress
thereto or egress therefrom or any other portion of the Premises on
which improvements have not yet been constructed. Notwithstanding the
foregoing, Purchaser shall have no right to terminate this Agreement
pursuant to this Section 15A unless the Tenant has the similar right
to terminate the Lease pursuant to the terms thereof.
B. If a material part of the Building comprising a
part of the Premises, the parking areas or driveways, any means of
ingress thereto or egress therefrom or the personal property
subject to this Agreement is destroyed by fire or other casualty
("material" herein deemed to be any destruction greater than
"immaterial" as defined below), or if the Tenant shall have exercised
any right to terminate the Lease pursuant to the terms thereof, Seller
shall notify Purchaser of such fact and Purchaser shall have the
option to terminate this Agreement upon notice to Seller given not
later than thirty (30) days after receipt of Seller's notice. In the
event there is damage to or destruction of an immaterial part of said
Building, parking areas, driveways, means of ingress or egress or
personal property by fire or other casualty, or if the Tenant shall
have failed, or shall be deemed to have failed, to exercise any right
to terminate the Lease pursuant to the terms thereof, the damage shall
be repaired by Seller and the Closing Date shall be adjourned at
Seller's request for one or more specified periods, not exceeding
sixty (60) days in the aggregate, in order to permit Seller to make
such repairs, it being agreed that if such repairs are not completed
within said sixty (60) day period, Purchaser may elect (i) to postpone
the Closing Date for one or more further periods until such repairs
are completed, or (ii) to close title notwithstanding that such
repairs have not been completed, in which event Seller's obligation to
make such repairs shall survive the Closing hereunder. An
"immaterial" part of the buildings, parking areas, driveways, means of
ingress or egress or personal property shall be deemed to have been
damaged or destroyed if the cost of repair or replacement shall be Two
Hundred Fifty Thousand Dollars ($250,000) or less. Notwithstanding
the foregoing, Purchaser shall have no right to terminate this
Agreement pursuant to this Section 15B unless the Tenant has the
similar right to terminate the Lease pursuant to the terms thereof.
15. Environmental Inspection. Purchaser or Purchaser's
------------------------
representative shall have the right, from time to time or at any time
prior to the Closing, at Purchaser's sole cost and expense, to obtain
an environmental study of the Premises to determine the existence of
any Hazardous Material. Purchaser or Purchaser's representatives
shall be permitted to conduct such tests as Purchaser or Purchaser's
representatives may deem appropriate and shall be entitled to access
to the Premises for such purposes upon reasonable advance oral notice,
provided that reasonable precautions shall be taken to avoid
disturbing the operations at the Property. Purchaser shall pay all
costs incurred in making such studies and shall indemnify, defend and
hold Seller harmless from any loss incurred by Seller resulting from
any damage or personal injury incurred in connection therewith
(provided that such indemnity shall not encompass any liability
arising out of the presence or existence
of hazardous substances discovered during the course of such studies).
The indemnification provisions of this Section 16 shall survive the
Closing.
16. Default. Subject to Section 8E hereof, if Seller is
-------
unable to convey title to the Premises in accordance with the terms of
this Agreement, or in the event Seller fails to comply with any
provisions of this Agreement, then Purchaser shall have all legal
rights and remedies available at law or in equity by reason of
Seller's default, including, without limitation, the right to obtain
specific performance of Seller's obligations hereunder and/or
injunctive relief.
17. Indemnification. (a) Seller hereby agrees to defend,
---------------
indemnify and hold Purchaser harmless from and against all losses,
damages, costs and expenses, including, without limitation, legal fees
and disbursements, incurred by Purchaser subsequent to the date of
this Agreement by reason of any claims made against Seller or others
relating to the Premises and arising from acts, occurrences or matters
that took place or were claimed to have taken place prior to the
Closing hereunder. The provisions of this Section 18 shall survive
the Closing.
(b) Purchaser hereby agrees to defend, indemnify and hold
Seller harmless from and against all losses, damages, costs and
expenses, including, without limitation, legal fees and disbursements,
incurred by Seller subsequent to the date of this Agreement by reason
of any claims made against Purchaser or others relating to the
Premises and arising from acts, occurrences or matters that took place
or were claimed to have taken place after the Closing hereunder. The
provisions of this Section 18 shall survive the Closing.
18. Non Liability. Seller agrees that neither the
-------------
partners, directors, officers, employees nor agents of Purchaser have
any personal obligation hereunder, and that Seller shall not seek to
assert any claim or enforce any rights hereunder against such
partners, directors, officers, employees, or agents of Purchaser.
19. Notices. All notices, demands or requests made
-------
pursuant to, under or by virtue of this Agreement must be in writing
and mailed to the party to which the notice, demand or request is
being made by certified or registered mail, return receipt requested,
or by overnight express hand delivery, or by facsimile transmission
provided telephonic confirmation of receipt is obtained promptly after
receipt of transmission, as follows:
if to Purchaser:
CUC Real Estate Holdings, Inc.
707 Summer Street
Stamford, CT 06901
Attention: Amy N. Lipton, Esq.
Facsimile: (203) 348-1982
with a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Howard Chatzinoff, Esq.
and Elliot L. Hurwitz, Esq.
Facsimile: (212) 310-8007
if to Seller:
c/o Davidson & Associates, Inc.
19840 Pioneer Avenue
Torrance, CA 90503
Attention: Robert M. Davidson
Facsimile: (310) 793-0601
with a copy to:
Gibson, Dunn & Crutcher
333 South Grand Avenue, 48th Floor
Los Angeles, CA 90071
Attention: Peter F. Ziegler, Esq.
Facsimile: (213) 229-7520
or to such other address as the person to whom notice is given may
have previously furnished to the other in writing in the manner set
forth above. Notices hereunder may be given by a party or such
party's attorneys named above.
20. Entire Agreement. This Agreement contains all of the
----------------
terms agreed upon between the parties with respect to the subject
matter hereof.
21. Amendments. This Agreement may not be changed,
----------
modified or terminated, except by an instrument executed by the
parties hereto who are or will be affected by the terms of such
instrument.
22. Waiver. No waiver by either party of any failure or
------
refusal to comply with its obligations shall be deemed a waiver of any
other or subsequent failure or refusal to so comply.
23. Successors and Assigns. The stipulations aforesaid
----------------------
shall inure to the benefit of, and shall bind, the heirs, executors,
administrators, successors and assigns of the respective parties.
24. Paragraph Headings. The headings of the various
------------------
paragraphs of this Agreement have been inserted only for the purposes
of convenience, and are not part of this Agreement and shall not be
deemed in any manner to modify, explain, explore or restrict any of
the provisions of this Agreement.
26. No Third Party Rights. Subject to Section 24 hereof,
---------------------
nothing in this Agreement is intended or shall be construed to confer
upon or to give to any person, firm or corporation other than the
parties hereto any right, remedy or claim under or by reason of this
agreement. All terms and conditions of this Agreement shall be for
the sole and exclusive benefit of the parties hereto.
27. Governing Law. This Agreement shall be governed by the
-------------
laws of the State of New York.
28. Restrictions on Assignment. This Agreement may not be
--------------------------
assigned by Purchaser or Seller without the prior written consent of
the other which may be withheld in the sole and absolute discretion of
either party; provided, however, Purchaser shall have the right to
assign this Agreement without the consent of Seller to a wholly-owned
subsidiary of Purchaser and Purchaser may designate a subsidiary or
affiliate to accept title to the Premises at Closing.
29. Time of the Essence. Time is of the essence for all
-------------------
time periods specified in this Agreement.
30. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which shall constitute an original but
all of which, taken together, shall constitute but one and the same
instrument.
31. Separability. Except as herein otherwise expressly
------------
provided, no waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any
preceding or succeeding breach thereof or of any other agreement or
provision herein contained.
32. Termination. This Agreement shall terminate upon the
-----------
termination of the Merger Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
SELLER:
------
/s/ Robert M. Davidson
----------------------------------------
Robert M. Davidson
/s/ Janice G. Davidson
----------------------------------------
Janice G. Davidson
PURCHASER:
---------
CUC REAL ESTATE HOLDINGS, INC.
By: /s/ E. Kirk Shelton
-------------------------------------
Name: E. Kirk Shelton
Title: Vice-President
NYFS01...:\01\39801\0023\1526\AGR2286A.54F
EXHIBIT "A"
LEGAL DESCRIPTION
[ATTACH LEGAL FROM TITLE POLICY]
EXHIBIT "B"
DEED
---------------------
[TO BE PREPARED BY SELLER'S COUNSEL]
EXHIBIT "C"
BILL OF SALE
------------
EXHIBIT "D"
ASSIGNMENT AND ASSUMPTION OF LEASE
EXHIBIT "E"
LEASE
---------------------------------------
EXHIBIT "F"
CONTRACTS
---------
NONE