EXHIBIT 10.11
RECORDING REQUESTED BY, )
WHEN RECORDED MAIL TO: )
)
Behringer Harvard Minnesota Center TIC I, LLC )
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000 )
Xxxxxx, Xxxxx 00000 )
)
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Above Space for Recorder's Use
TENANTS IN COMMON AGREEMENT
This TENANTS IN COMMON AGREEMENT ("Agreement") is made and effective as
of October 15, 2003 (the "Effective Date"), by and between Behringer Harvard
Minnesota Center TIC I, LLC, a Delaware limited liability company ("Behringer")
and Behringer Harvard Minnesota Center TIC II, LLC, a Delaware limited liability
company (the "Company") (each of Behringer and the Company shall sometimes
individually be referred to as "Tenant in Common" and collectively as "Tenants
in Common"), with reference to the facts set forth below.
RECITALS
A. The Tenants in Common will acquire the percentage undivided
interests set forth on Exhibit "A" in certain real property and improvements, as
more particularly described in Exhibit "B" attached hereto and incorporated
herein (the "Project").
B. The Tenants in Common desire to enter into this Agreement to
provide for the orderly administration of their rights and responsibilities as
to each other and as to others and to delegate authority and responsibility for
the intended further operation and management of the Project.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
set forth below.
1. NATURE OF RELATIONSHIP BETWEEN CO-TENANTS. The Tenants in Common
shall each hold their respective interests in the Project as tenants-in-common.
The Tenants in Common do not intend by this Agreement to create a partnership or
a joint venture, but merely to set forth the terms and conditions upon which
each of them shall hold their respective interests in the Project. Neither do
the Tenants in Common wish to create a partnership or joint venture with the
Property Manager (as defined below). Each Tenant in Common hereby elects to be
excluded from the provisions of Subchapter K of Chapter 1 of the Internal
Revenue Code of 1986, as amended (the "Code"), with respect to the joint
ownership of the Project. The exclusion elected by the Tenants in Common
hereunder shall commence with the execution of this Agreement and shall be
equally applicable to all assignees of a Tenant in Common upon such assignment.
Each Tenant in Common hereby covenants and agrees that each Tenant in Common
shall report on such Tenant in Common's respective federal and state income tax
returns such Tenant in Common's respective share of items of income, gain/loss,
deduction and credits that result from holding the Project in a manner
consistent with (i) the treatment of the co-tenancy as a co-ownership of real
property (and not a partnership) for Federal and state income tax purposes and
(ii) the exclusion of the Tenants in Common from Subchapter K of Chapter 1 of
the Code, commencing with the first taxable year of such Tenant in Common that
includes the Effective Date or, for assignees of a Tenant in Common, the
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date of such assignment. No Tenant in Common shall notify the Commissioner of
Internal Revenue that such Tenant in Common desires that Subchapter K of the
Code apply to the Tenants in Common and each Tenant in Common hereby agrees to
indemnify, protect, defend and hold the other Tenants in Common free and
harmless from all costs, liabilities, tax consequences and expenses, including,
without limitation, attorneys' fees, which may result from any Tenant in Common
so notifying the Commissioner in violation of this Agreement or otherwise taking
a contrary position on any tax return. The Tenants in Common shall not file a
partnership or corporate tax return, conduct business under a common name,
execute an agreement identifying any or all of the Tenants in Common as
partners, shareholders, or members of a business entity, or otherwise hold
themselves out as a partnership or other form of business entity. Except as
expressly provided herein, no Tenant in Common is authorized to act as agent
for, to act on behalf of, or to do any act that will bind any other Tenant in
Common or to incur any obligations with respect to the Project.
2. MANAGEMENT.
2.1 Concurrently with the acquisition of the Project, the
Tenants in Common will enter into a Property and Asset Management Agreement (the
"Management Agreement") with Behringer Harvard TIC Management Services, LP, a
Texas limited partnership ("Property Manager"). Pursuant to the Management
Agreement, the Property Manager shall be the sole and exclusive manager of the
Project, interface with the owner and holder of any first lien deed of trust
encumbering the Project during the term of the Management Agreement and act as
the agent of the Tenants in Common with respect to the management, operation,
maintenance and leasing of the Project during the term of the Management
Agreement. A copy of the Management Agreement is attached hereto as Exhibit "C"
and the terms, covenants and conditions of the Management Agreement are
incorporated herein as if set forth in full. Neither (a) the death, retirement,
removal, withdrawal, termination or resignation of the Property Manager, (b) any
assignment for the benefit of creditors by or the adjudication of bankruptcy or
incompetency of the Property Manager nor (c) the termination of the Management
Agreement shall cause the termination of this Agreement and this Agreement shall
remain in full force and effect notwithstanding any such events.
2.2 UNANIMOUS CONSENT OF THE TENANTS IN COMMON. The consent
of all of the Tenants in Common shall be required with respect to any sale,
exchange, lease or release of all or a portion of the Project, any loans or
modifications of any loans secured by the Project, the approval of any property
management agreement or any extension, renewal or modification thereof. Whenever
in this Agreement the consent or approval of the Tenants in Common is required
or otherwise requested, with respect to any (i) sale or exchange of all or a
portion of the Project or (ii) loan or modification of any loan secured by the
Project, the Tenants in Common shall have fifteen (15) days after the date the
request for such consent or approval is received pursuant to Section 10.8 to
approve or disapprove of the matter. Whenever in this Agreement the consent or
approval of the Tenants in Common is required or otherwise requested, with
respect to any modification or renewal of the any property management agreement,
the Tenants in Common shall have thirty (30) days after the date the request for
consent or approval is received pursuant to Section 10.8 to the Tenants in
Common for their approval or disapproval of the matter. Whenever in this
Agreement the consent or approval of the Tenants in Common is required or
otherwise requested, with respect to any lease or release of all or a portion of
the Project, the Tenants in Common shall have five (5) days after the date the
request for consent or approval is received pursuant to Section 10.8 to the
Tenants in Common for their approval or disapproval of the matter. The Tenants
in Common agree to use their best efforts to respond to any request for consent
or approval. If a Tenant in Common does not disapprove of such matter within the
specified response period described above, the Tenant in Common shall be deemed
to have approved the matter. By execution hereof, the Tenants in Common confirm
their approval of the Property Management Agreement and that certain loan made
(or to be made immediately after the execution of this Agreement) by Greenwich
Capital Financial Products,
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Inc., a wholly-owned subsidiary of the Royal Bank of Scotland Group Plc
(together with its successors and/or assigns, the "Lender") secured by, among
other things, a mortgage or deed of trust ("Deed of Trust") on the Project (the
"Greenwich Capital Loan").
2.3 MAJORITY CONSENT OF THE TENANTS IN COMMON. Whenever the
approval or consent of the Tenants in Common is required with respect to any
items, other than those set forth in Section 2.2, the approval or consent of the
Tenants in Common holding more than 50% of the percentage interest in the
Project shall be required to approve such action.
3. INCOME AND LIABILITIES. Except as otherwise provided herein and
in the Management Agreement, all benefits and obligations of the ownership of
the Project, including, without limitation, income, revenue, operating expenses,
proceeds from sale or refinance or condemnation awards shall be shared by the
Tenants in Common in proportion to their respective undivided interests in the
Project. Notwithstanding the foregoing, (a) each Tenant in Common shall be
responsible for all real estate and personal property taxes, general and special
real property assessments and other like charges (collectively "Taxes")
attributable to its undivided interest in the Project, (b) fees under the
Management Agreement shall be paid by each of the Tenants in Common as provided
in the Management Agreement and (c) expenses or other costs that are not applied
to the Tenants in Common pro rata based on their interests in the Project shall
be separately charged to each Tenant in Common. The Tenants in Common shall
receive, within 3 months of receipt by the Property Manager, all cash from
operations of the Project after payment of expenses and debt service, in
proportion to their respective undivided interests in the Project, except for
such amounts as may be determined by the Property Manager pursuant to the
Management Agreement to be retained for reserves or improvements
4. CO-TENANT'S OBLIGATIONS. The Tenants in Common each agree to
perform such acts as may be reasonably necessary to carry out the terms and
conditions of this Agreement, including, without limitation:
4.1 DOCUMENTS. The Tenants in Common shall execute any and
all documents required in connection with a sale or refinancing of the Project
in accordance with Section 5 and such additional documents as may be required
under this Agreement or may be reasonably required to effect the intent of the
Tenants in Common with respect to the Project or any loans encumbering the
Project.
4.2 ADDITIONAL FUNDS. Each Tenant in Common will be
responsible for a pro rata share (based on its undivided interest or as
otherwise provided with respect to the fees under the Management Agreement, or
other items specifically applicable to individual Tenants in Common) of any
future cash needed in connection with the ownership, operation, management and
maintenance of the Project as determined by the Property Manager pursuant to the
Management Agreement. Without limiting the foregoing, each Tenant in Common
agrees that if any loan for the Project provides for recourse liability to the
Company or any affiliate and non-recourse liability to one or more of the other
Tenants in Common, and if the Company or any affiliate pays more than its pro
rata share of the liability related to the loan (as compared to its ownership
interest) as a result of such recourse liability ("Excess Payment"), the Tenants
in Common agree to reimburse the Company or any affiliate for the Tenants in
Common's pro rata share of such Excess Payment; provided, however, that the
Property Manager has agreed to indemnify the Tenants in Common in Section 13.9.2
of the Management Agreement to the extent a Tenant in Common becomes liable to
the lender as a result of certain actions of the Property Manager. In addition,
each Tenant in Common shall be liable for, and indemnify and hold harmless, the
other Tenants in Common as a result of any action or inaction by such Tenant in
Common that causes any recourse liability or damages to the Tenants in Common or
the Project with respect to any loan. To the extent any Tenant in Common fails
to advance any funds pursuant to this Section within fifteen (15) days after the
Property Manager or the Company delivers notice that such additional funds are
required, any other
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Tenant(s) in Common may pay such amount. The nonpaying Tenant in Common shall
reimburse the paying Tenant(s) in Common within 30 days the amount of any such
payments plus interest thereon at the rate of ten percent (10%) per annum (but
not more than the maximum rate allowed by law) until paid. In the event any
Tenant in Common defaults under the preceding sentence, the Property Manager is
hereby authorized to pay the Tenant(s) in Common entitled to reimbursement and
interest the amounts due out of future cash from operations or from the sale or
refinancing of the Project or other distributions pursuant to the Management
Agreement from the defaulting Tenant's in Common share of proceeds. The remedies
against a nonpaying Tenant in Common provided for herein are in addition to any
other remedies that may otherwise be available, including, but not limited to,
the right to obtain a lien against the undivided interest in the Project of the
nonpaying Tenant in Common to the extent allowed by law. Notwithstanding the
preceding provisions, however, it is expressly understood and agreed that all
such rights to, or to obtain, reimbursement are subject and subordinate in all
respects to the rights of any lender.
5. SALE OR ENCUMBRANCE OF PROJECT.
5.1 SALE. In accordance with the Management Agreement, the
Property Manager shall be entitled to seek and negotiate the terms of (a)
permanent and other financing for the Project, including loans secured by the
Project, (b) the sale of the Project (or portions thereof) to third-party
purchasers (a "Sale") and (c) any lease of all or any portion of the Project.
All of the items described in (a), (b) and (c) shall require the unanimous
approval of the Tenants in Common, which approval shall be as set forth in
Section 2.2. Any such written request of the Property Manager shall be
accompanied by a copy of a bona fide offer to purchase, a loan commitment letter
setting forth all the material terms of the transaction or the principal lease
terms.
5.2 To the extent necessary, the proceeds of a Sale shall
(i) first, be, used to pay in full any loans encumbering title to the Project
(ii) second, be used to pay all outstanding costs and expenses incurred in
connection with the holding, marketing and sale of the Project and (iii) third,
any proceeds of a Sale remaining after payment of the items set forth above
shall be paid as provided in Section 3.
6. POSSESSION. The Tenants in Common intend to lease the Project at
all times and no Tenant in Common shall have the right to occupy or use the
Project at any time during the term of this Agreement.
7. TRANSFER OR ENCUMBRANCE.
7.1 Each Tenant in Common may sell, transfer, convey,
pledge, encumber or hypothecate its interest in the Project or any part thereof
(each a "Transfer"), provided that any transferee shall take such interest
subject to this Agreement and the Management Agreement, to the extent the
Management Agreement is in effect at the time of the Transfer, and the
transferor and transferee shall execute and cause to be recorded an assignment
and assumption agreement ("Assumption Agreement") whereby (i) the transferor
assigns to the transferee all of its right, title and interest in and to this
Agreement and the Management Agreement; and (ii) the transferee assumes and
agrees to perform faithfully and to be bound by all of the terms, covenants,
conditions, provisions and agreements of this Agreement and the Management
Agreement with respect to the undivided interest to be transferred. Upon
execution and recordation of such Assumption Agreement the transferor shall be
relieved of all liability under this Agreement accruing after the date of
recordation of the Assumption Agreement and the transferee shall become a party
to this Agreement without further action by the other Tenants in Common. The
Tenants in Common acknowledge that Xxxxxxxxx is selling undivided interests in
the Project pursuant to the Confidential Private Placement Memorandum of Tenant
in Common Interests in Behringer Harvard
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Minnesota Center dated July 10, 2003. Each Tenant in Common shall be responsible
for compliance with applicable securities laws with respect to any sale of its
interest in the Project.
7.2 RIGHT OF FIRST OFFER. If a Tenant in Common (a "Selling
Tenant") desires to sell its interest in the Project, then such Selling Tenant
shall first allow Behringer or its affiliates or assigns, and second the Tenants
in Common other than the Selling Tenant (each an "Offeror" and collectively the
"Offerors") to make an offer to purchase the Selling Tenant's interest pursuant
to the terms and conditions set forth in this Section 7.2. If a Selling Tenant
desires to sell its interest in the Project, such Selling Tenant shall provide
written notice (the "Notice") of its intent to sell its interest to each
Offeror. Behringer or its affiliates or it assigns shall first have the right,
within fifteen (15) days after receipt of such Notice pursuant to Section 10.8,
to deliver a written offer to the Selling Tenant to purchase the Selling
Tenant's interest in the Project. If the Selling Tenant does not accept an offer
from Behringer or its affiliates or it assigns within fifteen (15) days after
receipt of the Notice pursuant to Section 10.8 then the Tenants in Common other
than the Selling Tenant shall have the right within the next fifteen (15) days
after the end of the first fifteen (15) day period, to deliver an offer to the
Selling Tenant to purchase the Selling Tenants interest in the Project for a
price that is greater than the price offered by Behringer or its affiliates or
assigns. If the Selling Tenant does not accept the offer from either Behringer
or its affiliates or assigns or the Tenants in Common other than the Selling
Tenant, then the Selling Tenant shall be free to sell its interest in the
Project to a purchaser other than an Offeror, provided that the sale of the
Selling Tenant's interest to a purchaser (other than an Offeror) is for a price
greater than any purchase price offered by an Offeror pursuant to this Section
7.2 and is in compliance with the terms of any loan encumbering the Project.
7.3 PURCHASE OPTION. The Tenants in Common agree that
Behringer or any of its affiliates or their assigns shall have the right, while
this Agreement remains in effect, to purchase a Dissenting Tenant in Common's
(as defined below) interest in the Project as set forth in this Section 7.3. A
Dissenting Tenant in Common shall mean a Tenant in Common who votes against or
fails to consent to any item that requires the unanimous approval or consent of
the Tenants in Common pursuant to the terms of this Agreement when at least 50%
of the Tenants in Common have voted or provided consent for such action. In
order to execute this option, Behringer or its affiliate shall provide written
notice of its election to exercise this option to the Dissenting Tenant in
Common at any time prior to 45 days after the approval period for such vote or
consent has terminated as provided in any request for such vote or consent. In
the event that Behringer or its affiliates or their assigns exercise this
purchase option, all of the Dissenting Tenant in Common's right, title and
interest in its Interest shall transfer to Behringer or its affiliates or their
assigns as of the date the election to exercise the purchase option is received
by the Dissenting Tenant in Common pursuant to Section 10.8, and Xxxxxxxxx shall
own all right, title and interest to such Interest as of such date; provided,
however, that Behringer or its affiliates or their assigns may delay the
transfer of the Interest for any length of time as specified in its election to
exercise the purchase option up and through the payment date and provided,
further, that the transfer, and effective date of such transfer, shall be
subject to any consent of the Lender, if required. The purchase price of the
Dissenting Tenants in Common interest shall be equal to the Fair Market Value of
the Interest (as defined in Section 8 of this Agreement) of the Dissenting
Tenant in Common. Such purchase price sale shall be paid by Behringer or its
affiliates or their assigns within 30 days of the determination of the Fair
Market Value of the Project, and the obligation to pay the purchase price shall
bear interest at the short term Applicable Federal Rate from the date of
transfer through the payment date. The purchaser and seller shall begin
negotiation of the Fair Market Value of the Project within fifteen (15) days
after the date of the written notice from Xxxxxxxxx or assignee and shall follow
the procedures set forth in Section 8. The allocation of the costs and
liabilities shall be subject to the terms set forth in Section 8.
7.4 DEFAULTING TENANT IN COMMON. The Tenants in Common agree
that Behringer or any of its affiliates or their assigns shall have the right,
while this Agreement remains in effect, to
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purchase a Defaulting Tenant in Common's (as defined below) interest in the
Project as set forth in this Section7.4. A Defaulting Tenant in Common shall
mean a Tenant in Common who is in default under any loan documents attributable
to any loan secured by the Project, the Management Agreement or this Agreement.
In order to execute this option, Behringer or its affiliate shall provide
written notice of its election to exercise this option to the Defaulting Tenant
in Common during the period such Defaulting Tenant in Common is in default or
for a period of 30 days thereafter to Behringer of such default. In the event
that Behringer or its affiliates or their assigns exercise this purchase option,
all of the Defaulting Tenant in Common's right, title and interest in its
Interest shall transfer to Behringer or its affiliates or their assigns as of
the date the election to exercise the purchase option is received by the
Defaulting Tenant in Common pursuant to Section 10.8, and Xxxxxxxxx shall own
all right, title and interest to such Interest as of such date; provided,
however, that Behringer or its affiliates or their assigns may delay the
transfer of the Interest for any length of time as specified in its election to
exercise the purchase option up and through the payment date and provided,
further, that the transfer, and effective date of such transfer, shall be
subject to any consent of the Lender, if required. The purchase price of the
Defaulting Tenants in Common interest shall be equal to the Fair Market Value of
the Interest (as defined in Section 8 of this Agreement) of the Defaulting
Tenant in Common. Such purchase price sale shall be paid by Behringer or its
affiliates or their assigns within 30 days of the determination of the Fair
Market Value of the Project, and the obligation to pay the purchase price shall
bear interest at the short term Applicable Federal Rate from the date of
transfer through the payment date. The purchaser and seller shall begin
negotiation of the Fair Market Value of the Project within fifteen (15) days
after the date of the written notice from Xxxxxxxxx or assignee and shall follow
the procedures set forth in Section 8. The allocation of the costs and
liabilities shall be subject to the terms set forth in Section 8.
8. RIGHT OF PARTITION.
8.1 Subject to the provisions set forth in Section 8.2, the
Tenants in Common agree that any Tenant in Common and any of its
successors-in-interests shall have the right, while this Agreement remains in
effect, to have the Project partitioned, and to file a complaint or institute
any proceeding at law or in equity to have the Project partitioned in accordance
with and to the extent provided by applicable law. The Tenants in Common
acknowledge that partition of the Project may result in a forced sale by all of
the Tenants in Common. To avoid the inequity of a forced sale and the potential
adverse effect on the investment by the Tenants in Common, the Tenants in Common
agree that, as a condition precedent to filing a partition action, the Tenant in
Common filing such action ("Seller") shall first make a written offer ("Offer")
to sell its undivided interest first to Behringer or its affiliates or assigns
and second to the other Tenants in Common at a price equal to the Fair Market
Value of the Interest (as defined below) of Seller's undivided interest. If
Xxxxxxxxx does not accept such Offer, then the other Tenants in Common shall be
entitled to purchase a portion of the Seller's interest in proportion to their
undivided interest in the Project. If any Tenant in Common elects not to
purchase his or her share of the Seller's interest, the other Tenants in Common
shall be entitled to purchase additional interests based on their undivided
interest in the Project; "Fair Market Value of the Interest" shall mean the fair
market value of Seller's undivided interest (determined by multiplying the
partitioning Tenant in Common's percentage interest in the Project on the date
of the Offer by the Fair Market Value of the Project reduced by (i) liabilities
secured by the Project or liabilities taken subject to, (ii) Seller's
proportionate share of any fee or other amount that would be payable to the
Property Manager or any affiliates (including any real estate commission) under
the Management Agreement upon the sale of the Project at a price equal to the
Fair Market Value of the Project and (iii) selling, prepayment or other costs
that would apply in the event the Project was sold on the date of the Offer) as
determined in accordance with the procedures set forth below, including any
unpaid advanced made pursuant to Section 4.2 on behalf of Seller. Xxxxxxxxx
shall have twenty (20) days after delivery of the Offer to accept the Offer. If
Xxxxxxxxx does not accept the offer within such twenty (20) day period, the
other Tenants in Common shall have the right within the next twenty (20) days to
accept the Offer. If Behringer or any or all of the
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other Tenants in Common ("Purchaser") accept the Offer, Seller and Purchaser
shall commence negotiation of the Fair Market Value of the Project within
fifteen (15) days after the Offer is accepted. If the parties do not agree,
after good faith negotiations, within ten (10) days, then each party shall
submit to the other a proposal containing the Fair Market Value of the Project
the submitting party believes to be correct ("Proposal"). If either party fails
to timely submit a Proposal, the other party's submitted proposal shall
determine the Fair Market Value of the Project. If both parties timely submit
Proposals, then the Fair Market Value of the Project shall be determined by
final and binding arbitration in accordance with the procedures set forth below.
The parties shall meet within seven (7) days after delivery of the last Proposal
and make a good faith attempt to mutually appoint a certified MAI real estate
appraiser as an arbitrator who shall have been active full-time over the
previous five (5) years in the appraisal of comparable properties located in the
county in which the Project is located to act as the arbitrator. If the parties
are unable to agree upon a single arbitrator, then the parties each shall,
within five (5) days after the meeting, select an arbitrator that meets the
foregoing qualifications. The two (2) arbitrators so appointed shall, within
fifteen (15) days after their appointment, appoint a third arbitrator meeting
the foregoing qualifications. The determination of the arbitrator(s) shall be
limited solely to the issue of whether Seller's or Purchaser's Proposal most
closely approximates the Project's fair market value. The decision of the single
arbitrator or of the arbitrator(s) shall be made within thirty (30) days after
the appointment of a single arbitrator or the third arbitrator, as applicable.
The arbitrator(s) shall have no authority to create an independent structure of
fair market value or prescribe or change any or several of the components or the
structure thereof; the sole decision to be made shall be which of the parties'
Proposals shall determine the Fair Market Value of the Project. The decision of
the single arbitrator or majority of the three (3) arbitrators shall be binding
upon the parties. If either party fails to appoint an arbitrator within the time
period specified above, the arbitrator appointed by one of them shall reach a
decision which shall be binding upon the parties. The cost of the arbitrators
shall be paid equally by Seller and Purchaser. The arbitration shall be
conducted in Hennepin County, Minnesota, in accordance with the Minnesota
Uniform Arbitration Act, Minn. Stat. xx.xx. 572.08 - 572.30 as modified by this
Agreement. The parties agree that Federal Arbitration Act, Title 9 of the United
States Code, shall not apply to any arbitration hereunder. The parties shall
have no discovery rights in connection with the arbitration. The decision of the
arbitrator(s) may be submitted to any court of competent jurisdiction by the
party designated in the decision. The party designated in the decision shall
submit to the superior court a form of judgment incorporating the decision of
the arbitrator(s), and such judgment, when signed by a judge of the superior
court, shall become final for all purposes and shall be entered by the clerk of
the court on the judgment roll of the court. If one party refuses to arbitrate
an arbitrable dispute and the party demanding arbitration obtains a court order
directing the other party to arbitrate, the party demanding arbitration shall be
entitled to all of its reasonable attorneys' fees and costs in obtaining such
order, regardless of which party ultimately prevails in the matter. In addition,
if one party refuses arbitration and is subsequently ordered by a court to
arbitrate, such party shall also pay all of the arbitration costs and expenses.
By executing this Agreement each Tenant in Common is agreeing to have any
dispute arising out of the matters included in the arbitration of disputes
provision decided by neutral arbitration as provided by Minnesota law and each
Tenant in Common is giving up its rights might possess to have the dispute
litigated in a court or jury trial. By executing this Agreement you are giving
up your judicial rights to discovery and appeal. If a Tenant in Common refuses
to submit to arbitration after agreeing to this provision, the Tenant in Common
may be compelled to arbitrate under the authority of the Minnesota Uniform
Arbitration Act, Minn. Stat. xx.xx. 572.08 - 572.30. Each Tenant in Common's
agreement to Tenant in Common arbitration provision is voluntary. The closing of
the purchase of Seller's interest shall occur at a mutually agreeable title
company where the Project is located within 30 days from the date a Fair Market
Value of the Project is determined, whether by agreement or arbitration. Closing
costs and prorations shall be allocated as is standard practice where the
Project is located. The Purchaser shall take Seller's interest subject to the
liabilities included in the determination of Fair Market Value of the Project
secured by the Project and the Management Agreement which may include unpaid
fees due to the Property Manager.
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8.2 Notwithstanding anything to the contrary in Section 8.1,
so long as the Greenwich Capital Loan or any portion thereof is outstanding,
each Tenant in Common agrees that it will not seek or be entitled to seek and
obtain a partition of all or any part of the Project without first obtaining the
prior written consent of Xxxxxx. Accordingly, each Tenant in Common expressly
waives any right it may have to partition the Project or any part thereof,
whether such rights arise under Minnesota law, or otherwise, unless Xxxxxx has
consented in writing to such party's exercise of such rights.
9. BANKRUPTCY OPTION.
9.1 OPTION. If, during the term of this Agreement, a Tenant
in Common is Bankrupt, Behringer and/or an affiliate or assignee shall have the
right, to be exercised by written notice ("Bankruptcy Call Notice") to the
Bankrupt Tenant in Common, to purchase all of the Bankrupt Tenant in Common's
interest in the Project. Upon receipt of the Bankruptcy Call Notice, the
Bankrupt Tenant in Common shall be obligated to provide Behringer and/or its
affiliate or in the event that Behringer and/or an affiliate does not elect to
exercise the option within 20 days of the receipt of the Bankruptcy Call Notice,
the other Tenants in Common an option to purchase the Bankrupt Tenant in
Common's entire interest in the Project for the Fair Market Value of the
Bankrupt Tenant in Common's interest in the Project as determined under Section
8. Such purchase and sale shall be closed within 30 days of the determination of
the Fair Market Value of the Project. The allocation of the costs and
liabilities shall be subject to the terms set forth in Section 8.
9.2 BANKRUPT. For purposes of this Agreement, a Tenant in
Common shall be considered Bankrupt if such Tenant in Common: (1) is unable to
pay debts as they come due, including any debt associated with the Project; (2)
admits in writing to his or her inability to pay debts as they due, including
any debt associated with the Project; (3) makes a general assignment for the
benefit of creditors; (4) files any petition or answer seeking to adjudicate it
bankrupt or insolvent; (5) seeks liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of its debts; (6)
seeks, consents to or acquiesces in the entry of an order for relief or the
appointment of a receiver, trustee, custodian, or other similar official or for
any substantial part of its property; (7) the entry of an order for relief or
approving a petition for relief or reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future bankruptcy, insolvency or similar statute, law or regulation or the
filing of any such petition that is not dismissed in 90 days; (8) entry of an
order appointing a trustee, custodian, receiver or liquidator of all or any
substantial portion of its property, which order is not dismissed within 60 days
or (9) is considered bankrupt under the loan documents attributable to any loan
which is secured by the Project.
9.3 RIGHT OF FIRST REFUSAL. If, under federal bankruptcy
law, similar debtor relief laws, or other laws affecting the Project, the option
to purchase granted under this Section 9 is voided or declared unenforceable,
Behringer and/or an affiliate shall have a right of first refusal to buy any
interest in the Project of a Bankrupt Tenant in Common in the event of any
proposed transfer by a trustee, receiver, conservator, liquidator, guardian, or
other transferee. Such right of first refusal shall provide that Xxxxxxxxx
and/or its affiliate may purchase the Bankrupt Tenant in Common's interest in
the Project at the same price and on the same terms as such Project is proposed
to be sold by such trustee, receiver, conservator, liquidator, guardian or other
transferee.
10. GENERAL PROVISIONS.
10.1 MUTUALITY, RECIPROCITY, RUNS WITH THE LAND. All
provisions, conditions, covenants, restrictions, obligations and agreements
contained herein or in the Management Agreement are made for the direct, mutual
and reciprocal benefit of each and every part of the Project; shall be binding
upon and shall inure to the benefit of each of the Tenants in Common and their
respective heirs,
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executors, administrators, successors, assigns, devisees, representatives,
lessees and all other persons acquiring any undivided interest in the Project or
any portion thereof whether by operation of law or any manner whatsoever
(collectively, "Successors"); shall create mutual, equitable servitudes and
burdens upon the undivided interest in the Project of each Tenant in Common in
favor of the interest of every other Tenant in Common; shall create reciprocal
rights and obligations between the respective Tenants in Common, their interests
in the Project, and their Successors; and shall, as to each of the Tenants in
Common and their Successors operate as covenants running with the land, for the
benefit of the other Tenants in Common pursuant to applicable law. It is
expressly agreed that each covenant contained herein or in the Management
Agreement (i) is for the benefit of and is a burden upon the undivided interests
in the Project of each of the Tenants in Common, (ii) runs with the undivided
interest in the Project of each Tenant in Common and (iii) benefits and is
binding upon each Successor owner during its ownership of any undivided interest
in the Project, and each owner having any interest therein derived in any manner
through any Tenant in Common or Successor. Every person or entity who now or
hereafter owns or acquires any right, title or interest in or to any portion of
the Project is and shall be conclusively deemed to have consented and agreed to
every restriction, provision, covenant, right and limitation contained herein or
in the Management Agreement, whether or not such person or entity expressly
assumes such obligations or whether or not any reference to this Agreement or
the Management Agreement is contained in the instrument conveying such interest
in the Project to such person or entity. The Tenants in Common agree that any
Successor shall become a party to this Agreement and the Management Agreement
upon acquisition of an undivided interest in the Project as if such person was a
Tenant in Common initially executing this Agreement.
10.2 BINDING ARBITRATION. Any controversy between the parties
hereto arising out of or related to this Agreement or the breach thereof or an
investment in the tenant in common interests in the Project shall be settled by
arbitration in Hennepin County, Minnesota, in accordance with the rules of The
American Arbitration Association, and judgment entered upon the award rendered
may be enforced by appropriate judicial action. The arbitration panel shall
consist of one member, which shall be the mediator if mediation has occurred or
shall be a person agreed to by each party to the dispute within 30 days
following notice by one party that he or she desires that a matter be
arbitrated. If there was no mediation and the parties are unable within such 30
day period to agree upon an arbitrator, then the panel shall be one arbitrator
selected by the Minneapolis office of The American Arbitration Association,
which arbitrator shall be experienced in the area of real estate and limited
liability companies and who shall be knowledgeable with respect to the subject
matter area of the dispute. The losing party shall bear any fees and expenses of
the arbitrator, other tribunal fees and expenses, reasonable attorneys' fees of
both parties, any costs of producing witnesses and any other reasonable costs or
expenses incurred by the losing party or the prevailing party or such costs
shall be allocated by the arbitrator. The arbitration panel shall render a
decision within 30 days following the close of presentation by the parties of
their cases and any rebuttal. The parties shall agree within 30 days following
selection of the arbitrator to any prehearing procedures or further procedures
necessary for the arbitration to proceed, including interrogatories or other
discovery; provided, in any event each Tenant in Common shall be entitled to
discovery in accordance with the Minnesota Uniform Arbitration Act, Minn. Stat.
xx.xx. 572.08 - 572.30.
10.3 ATTORNEYS' FEES. If any action or proceeding is
instituted between all or any of the Tenants in Common arising from or related
to or with this Agreement, the Tenant in Common or Tenants in Common prevailing
in such action or proceeding shall be entitled to recover from the other Tenant
in Common or Tenants in Common all of its or their costs of action or
proceeding, including, without limitation, attorneys' fees and costs as fixed by
the court or arbitrator therein.
10.4 ENTIRE AGREEMENT. This Agreement, together with the
Management Agreement, constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof and all
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prior and contemporaneous agreements, representations, negotiations and
understandings of the parties hereto, oral or written, are hereby superseded and
merged herein.
10.5 GOVERNING LAW. This Agreement shall be governed by and
construed under the internal laws of the State of Minnesota without regard to
choice of law rules.
10.6 VENUE. Any action relating to or arising out of this
Agreement shall be brought only in a court of competent jurisdiction located in
Minneapolis, Minnesota.
10.7 MODIFICATION. No modification, waiver, amendment,
discharge or change of this Agreement shall be valid unless the same is in
writing and signed by the party against which the enforcement of such
modification, waiver, amendment, discharge or change is or may be sought. No act
of any Tenant in Common shall be construed to be a waiver of any provision of
this Agreement, unless such waiver is in writing and signed by the Tenant in
Common affected. Any Tenant in Common hereto may specifically waive any breach
of this Agreement by any other Tenant in Common, but no such waiver shall
constitute a continuing waiver of similar or other breaches.
10.8 NOTICE AND PAYMENTS. Any notice to be given or other
document or payment to be delivered by any party to any other party hereunder
may be delivered in person, or may be deposited in the United States mail, duly
certified or registered, with postage prepaid, or by Federal Express or other
similar overnight delivery service, and addressed to the party for whom
intended, as follows:
To the Tenants in Common at:
c/o Behringer Harvard Minnesota Center TIC I, LLC
0000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
With a copy to the Tenants in Common at the addresses specified
in Exhibit "A" hereto.
Any party hereto may from time to time, by written notice to the others,
designate a different address which shall be substituted for the one above
specified. Unless otherwise specifically provided for herein, all notices,
payments, demands or other communications given hereunder shall be in writing
and shall be deemed to have been duly given and received (i) upon personal
delivery, or (ii) as of the third business day after mailing by United States
registered or certified mail, postage prepaid, addressed as set forth above, or
(iii) the immediately succeeding business day after deposit with Federal Express
or other similar overnight delivery system.
10.9 SUCCESSORS AND ASSIGNS. All provisions of this Agreement
shall inure to the benefit of and shall be binding upon the
successors-in-interest, assigns, and legal representatives of the parties
hereto. Any assignee of a Tenant in Common shall be considered a Tenant in
Common.
10.10 TERM. This Agreement shall commence as of the date of
recordation and shall terminate at such time as the Tenants in Common or their
successors-in-interest or assigns no longer own the Project as
tenants-in-common. In no event shall this Agreement continue beyond December 31,
2020. The bankruptcy, death, dissolution, liquidation, termination, incapacity
or incompetency of a Tenant in Common shall not cause the termination of this
Agreement.
10.11 WAIVERS. No act of any Tenant in Common shall be
construed to be a waiver of any provision of this Agreement, unless such waiver
is in writing and signed by the Tenant in Common affected. Any Tenant in Common
hereto may specifically waive any breach of this Agreement by any
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other Tenant in Common, but no such waiver shall constitute a continuing waiver
of similar or other breaches.
10.12 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which, when taken together, shall be deemed one fully
executed original.
10.13 SEVERABILITY. If any portion of this Agreement shall
become illegal, null or void or against public policy, for any reason, or shall
be held by any court of competent jurisdiction to be illegal, null or void or
against public policy, the remaining portions of this Agreement shall not be
affected thereby and shall remain in full force and effect to the fullest extent
permissible by law.
10.14 APPLICABLE SECURITIES LAWS. NEITHER THE SECURITIES AND
EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR
DISAPPROVED THE SECURITIES OFFERED HEREBY OR PASSED UPON THE ACCURACY OR
ADEQUACY OF ANY DISCLOSURE MADE IN CONNECTION THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE. THE SECURITIES OFFERED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM.
10.15 TIME IS OF THE ESSENCE. Time is of the essence of each
and every provision of this Agreement.
11. ADDITIONAL COVENANTS AND AGREEMENTS REGARDING THE GREENWICH
CAPITAL LOAN.
11.1 Each Tenant in Common agrees that this Agreement, and
all rights and privileges and remedies of each Tenant in Common hereunder,
including without limitation, (i) any rights of first refusal (including any
such rights arising under Section 363(i) of Chapter 11 of the United States
Bankruptcy Code), purchase options or other similar rights under this Agreement,
are subject and subordinate to the deed of trust and the other loan documents
with respect to the Greenwich Capital Loan ("Loan Documents") and the liens
created thereby, and to all rights of the Lender thereunder. No party may
exercise any remedy provided for herein (including any rights of
indemnification) against any other party for as along as the Greenwich Capital
Loan (or any portion thereof) is outstanding; provided, however, that as long as
no Event of Default (as defined in the Loan Documents) currently exists, the
parties subject to the rights described above and in Sections 8 and 9 shall be
entitled to exercise such options.
11.2 Notwithstanding anything to the contrary contained
herein, each Tenant in Common herby waives, for so long as the Greenwich Capital
Loan (or any portion thereof) is outstanding, any lien rights, whether statutory
or otherwise, that it may have against the co-tenancy interest of any other
Tenant in Common.
11.3 For so long as the Greenwich Capital Loan (or any
portion thereof) is outstanding, the Lender shall be a third party beneficiary
of this Agreement.
11.4 For so long as the Greenwich Capital Loan (or any
portion thereof) is outstanding, this Agreement may not be terminated or
cancelled, modified, changed, supplemented, altered or amended in any manner
whatsoever, without the prior written consent of the Lender except pursuant to
any Permitted Transfers allowed under the Loan Documents.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
TENANTS IN COMMON:
BEHRINGER HARVARD MINNESOTA CENTER TIC I, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx, III
-------------------------------------------
Xxxxxx X. Xxxxxxx, III, Secretary
BEHRINGER HARVARD MINNESOTA CENTER TIC II, LLC,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxxxx, III
-------------------------------------------
Xxxxxx X. Xxxxxxx, III, Secretary
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STATE OF TEXAS )
) ss:
COUNTY OF DALLAS )
On October 14, 2003, before me, Xxxx X. Xxxxxxxxxxxx (insert name
of notary), personally appeared Xxxxxx X. Xxxxxxx, III (insert name of Tenant
in Common), personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxx X. Xxxxxxxxxxxx
----------------------------------------
Notary Public (Signature)
STATE OF TEXAS )
) ss:
COUNTY OF DALLAS )
On October 14, 2003, before me, Xxxx X. Xxxxxxxxxxxx (insert name
of notary), personally appeared Xxxxxx X. Xxxxxxx, III (insert name of Tenant
in Common), personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Xxxx X. Xxxxxxxxxxxx
----------------------------------------
Notary Public (Signature)
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