SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment") is
made and entered into as of this 27th day of March, 1998 by and between (i)
PRUBETA-3, a New Jersey general partnership ("Seller") and (ii) Xxxx-Xxxx Realty
Acquisition Corp., a New Jersey corporation ("Acquisition"), Parsippany Campus
Realty Associates, L.P. ("PCRA") Xxxx-Xxxx Realty, L.P. ("LP", and together with
PCRA, "Buyer").
RECITALS
A. Seller and Acquisition are parties to that certain Purchase and Sale
Agreement dated as of February 18, 1998, as amended by letter agreement dated
February 27, 1998 (as so amended, the "Contract"), pursuant to which Seller
agreed to sell and Acquisition agreed to purchase the portion of The Prudential
Business Campus described therein, located in Parsippany, New Jersey and
Hanover, New Jersey, upon the terms and conditions set forth in the Contract.
Acquisition has assigned all of its right, title and interest to and under the
Contract to LP, and LP has requested that Seller convey the Vacant Property to
PCRA.
B. Seller and Buyer now desire to amend the Contract upon the terms and
conditions hereinafter set forth.
AGREEMENTS
NOW THEREFORE, for and in consideration of the Recitals set forth above,
the mutual covenants contained herein and other good and valuable consideration,
the receipt, adequacy, and sufficiency of which hereby are acknowledged, Seller
and Buyer hereby agree as follows:
1. Recitals Incorporated; Certain Defined Terms. Capitalized terms that
are not otherwise defined in this Amendment shall have the same meanings herein
as are ascribed to such terms in the Contract.
2. Permit Resolution. The following provision is hereby added to the
Contract as Section 9.4:
A. Seller and Purchaser acknowledge that (i) Permit #14741, authorized under
Section 404 of the Clean Water Act (the "Permit"), expired on February 25, 1998,
(ii) that the applicable governmental authorities have not extended or renewed
the Permit, and (iii) as a result, the "sickle-shaped" portion of the Vacant
Property specifically identified on Exhibit P hereto (the "Identified Parcel")
might be identified as "wetlands" and if so, could not be developed without
further action. At Closing, Buyer shall receive a reduction in the Purchase
Price in the amount of
Five Million Dollars ($5,000,000), and until the fifth (5th) anniversary of the
Closing Date, Seller shall have the right to earn all or a portion of such Five
Million Dollars ($5,000,000) as provided herein.
B. From and after the Closing Date, Seller shall lead the efforts, and Seller
and Buyer shall use their respective good faith, reasonable efforts to work
together, and with the applicable governmental and quasi-governmental
authorities having jurisdiction over the Vacant Property, (i) to renew the
Permit, which results in Buyer being in substantially the same position
regarding the developability of the Identified Parcel as if the Permit had not
expired, (ii) to obtain a new Clean Water Act Section 404 or comparable permit
which results in Buyer being in substantially the same position regarding the
developability of the Identified Parcel as if the Permit had not expired, or
(iii) by some other means obtaining a resolution, including, without limitation,
obtaining a classification of the Identified Parcel by the applicable
governmental authorities as non-wetlands, which results in Buyer being in
substantially the same position regarding the developability of the Identified
Parcel as if the Permit had not expired (any of the foregoing, a "Resolution").
To the extent necessary to achieve the Resolution, Buyer shall allow Seller, its
agents and contractors, at Seller's cost and expense, access to the Identified
Parcel, for any legitimate purpose related to Seller's rights and
responsibilities hereunder; provided there is no unreasonable interference with
the operation and/or development of the balance of the Vacant Property and
Seller obtains Buyer's prior approval before any entry (which approval shall not
be unreasonably conditioned, withheld or delayed). Seller hereby agrees to
indemnify, defend and hold Buyer, and Buyer's partners, officers, directors,
employees, agents and attorneys, harmless from and against any and all claims,
costs, losses, liabilities, damages and expenses of any kind or nature
whatsoever (including reasonable attorneys' fees and costs) to the extent
arising out of or resulting from personal injury or damage to tangible property
caused by the entry and/or the conduct of activities upon the Vacant Property by
Seller, its agents, contractors, subcontractors after the Closing Date.
C. Seller shall coordinate its efforts to achieve the Resolution with respect to
the Identified Parcel with Buyer's efforts to develop the balance of the Vacant
Property, and otherwise consult with and keep Buyer apprised as to the status of
Seller's efforts to achieve the Resolution. Seller shall not file any material
application (other than an application previously filed by Seller) or otherwise
take any material action relating to the achievement of the Resolution without
Buyer's prior consent, which shall not be unreasonably conditioned, withheld or
delayed. Buyer shall cooperate with Seller in all reasonable respects in
connection with Seller's efforts to achieve the Resolution, provided, however,
under no circumstance shall Buyer be required to change its development plan for
the portion of the Vacant Property shown on the Tax Map of the Township of
Parsippany as Block 202, Lot 7.01 (the "Development Parcel") if such change
would in any material adverse respect affect Buyer's ability to achieve the
maximum development potential of the Development Parcel, or cause Buyer to incur
any material additional cost or expense in connection with such development.
Nothing herein shall be construed to require Buyer to pursue its development of
the Development Parcel at any time if in Buyer's sole judgment such pursuit is
not appropriate at such time. If Buyer elects to pursue such development, Buyer
shall consult with Seller prior to taking any actions relating to wetlands
issues affecting the Vacant Property,
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and shall coordinate such efforts with Seller so as not to unreasonably impair
or delay the achievement of the Resolution.
D. If the Resolution is achieved on or before the fifth (5th) anniversary of the
Closing Date, then within ten (10) business days after the date upon which the
Resolution is achieved, Buyer shall pay to Seller the sum of Five Million
Dollars ($5,000,000), and from and after such date Seller shall have no further
rights, obligations, liabilities or duties relating in any way to the
Resolution, the Identified Parcel, the Development Parcel, or the development or
non-development thereof, and Buyer shall have no further obligations,
liabilities or duties to pay Seller any additional consideration pursuant to
this Section 9.4.
E. If the Resolution is not achieved on or before the fifth (5th) anniversary of
the Closing Date, but on or before the fifth (5th) anniversary of the Closing
Date Buyer nevertheless has obtained governmental approval (whether or not such
approval is subject to the satisfaction of conditions, including, without
limitation, obtaining building permits, but excluding any conditions relating to
the developability of the Identified Parcel alone) to develop upon the
Development Parcel an office project which includes in excess of Three Hundred
Thousand (300,000) square feet of gross building area, without incurring
additional material development costs which are necessary because of the
expiration of the Permit, such as but not limited to the additional expense of
constructing decked parking (the "Development Approval"), then within ten (10)
business days after receiving the Development Approval, Buyer shall pay to
Seller an amount determined by multiplying Five Million Dollars ($5,000,000)
times a fraction, the numerator of which is the excess gross building area over
Three Hundred Thousand (300,000) square feet for which Buyer shall have obtained
the Development Approval, and the denominator of which is Two Hundred Thousand
(200,000) (the "Formula"). If at any time or times thereafter, on or before the
fifth (5th) anniversary of the Closing Date, Buyer obtains new or modified
Development Approval for additional square footage, then within ten (10)
business days after receiving any such additional Development Approval, Buyer
shall pay to Seller an additional amount, calculated by applying the Formula to
the additional square footage achieved in such subsequent Development Approval.
At such time, if any, as Seller shall have earned Five Million Dollars
($5,000,000) pursuant to the Formula, Seller shall have no further rights,
obligations, liabilities or duties relating in any way to the Resolution, the
Identified Parcel, the Development Parcel, or the development or non-development
thereof, and Buyer shall have no further obligations, liabilities or duties to
pay Seller any additional consideration pursuant to this Section 9.4.
F. If on or before the third (3rd) anniversary of the Closing Date, Buyer shall
sell the Development Parcel or any direct or indirect interest therein (except
for any sale, transfer, issuance or redemption of the corporate shares or
partnership interests of Xxxx-Xxxx Realty Corporation or Xxxx-Xxxx Realty, L.P.,
their respective successors or assigns, any mergers or consolidations concerning
such parties, or any similar transactions) to an unrelated third party for a
bona fide gross sale price or value (grossed up to 100%, if applicable, with
respect to a sale or transfer of less than a 100% direct or indirect interest in
the Property) of more than the applicable Base Price (as defined below), and
Seller shall have received less than Five Million Dollars
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($5,000,000) pursuant to Section D or Section E above, then not later than ten
(10) business days after the closing date of such sale or transfer, Buyer shall
pay to Seller an amount equal to the excess, if any, of such gross sale price or
value over the Base Price, up to a maximum payment to Seller of Five Million
Dollars ($5,000,000), minus any amount previously received by Seller under
Section E above. Buyer shall give Seller written notice upon Buyer reaching
agreement upon a price or value for the Development Parcel, and shall provide
Seller with any documentation reasonably requested by Seller which may bear upon
the price to be paid for, or allocated to, the Development Parcel in connection
with any such sale or other transfer. As used herein, "Base Price" shall mean
(i) Eight Million Two Hundred Fifty Thousand Dollars ($8,250,000) if the Closing
of the transfer occurs before the first (1st) anniversary of the Closing Date,
(ii) Eight Million Six Hundred Sixty-Two Thousand Five Hundred Dollars
($8,662,500) if the Closing of the transfer occurs from and after the first
(1st) anniversary of the Closing Date and before the second (2nd) anniversary of
the Closing Date, and (iii) Nine Million Ninety-Five Thousand Six Hundred
Twenty-Five Dollars ($9,095,625) if the Closing of the transfer occurs from and
after the second (2nd) anniversary of the Closing Date and before the third
(3rd) anniversary of the Closing Date. Buyer shall have no obligation to Seller
with respect to the payment of all or any portion of the $5,000,000 pursuant to
this Section E if the Closing of any sale of the Development Parcel or any
direct or indirect interest therein shall occur after the third (3rd)
anniversary of the Closing Date.
G. If neither the Resolution nor the Development Approval is achieved on or
before the fifth (5th) anniversary of the Closing Date, and the Development
Parcel shall not have been sold or transferred on or before the third (3rd)
anniversary of the Closing Date as described above for more than the applicable
Base Price, Buyer shall retain all or the applicable portion of the Five Million
Dollars ($5,000,000) Purchase Price reduction provided for above, and from and
after such date Seller shall have no further rights, obligations, liabilities or
duties relating in any way to the Resolution, the Identified Parcel, the
Development Parcel, or the development or non-development thereof, and Buyer
shall have no further obligations, liabilities or duties to pay Seller any
additional consideration pursuant to this Section 9.4.
H. Seller and Buyer agree to continue their respective efforts described above
in Section (B) until the earlier of (i) the date upon which the Resolution is
achieved, or (ii) the fifth (5th) anniversary of the Closing Date or (iii) the
payment to Seller of $5,000,000 in the aggregate pursuant to this Section 9.4
(such earlier date, the "Sunset Date"). Until the Sunset Date, (a) Buyer agrees
to expend such reasonable resources, including assigning personnel, retaining
legal counsel and environmental experts and paying their respective fees and
expenses, attending meetings, and spending money, as may be prudent or necessary
to assist Seller in achieving the Resolution as provided in Section (B),
including, without limitation, attending meetings, executing applications and
other documents reasonably satisfactory to Buyer, and (b) Seller agrees to
expend such reasonable resources, including assigning personnel and attending
meetings, and retaining legal counsel and environmental experts and paying their
respective fees and expenses, and, only if required by the applicable
governmental and quasi-governmental authorities as a condition precedent to
allowing the Resolution, paying the cost of filling the
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Identified Parcel, performing site work, or taking any other physical action
reasonably necessary to achieve the Resolution (but Seller shall not otherwise
be obligated to expend money), as may be prudent or necessary to achieve the
Resolution. Seller shall have no obligation with respect to any development,
non-development or wetland issues relating to any portion of the Property other
than the Identified Parcel.
I. The provisions of this Section 9.4 shall survive the Closing Date.
3. Indemnity. The following is hereby added to the Contract as Section
9.5:
A. Prudential and EPV, the sole partners of Seller as of the date hereof, hereby
jointly and severally agree to indemnify, defend, and hold Xxxx-Xxxx Realty
Acquisition Corp., Xxxx-Xxxx Realty Corporation, Xxxx-Xxxx Realty, L.P.,
Parsippany Campus Realty Associates, L.P., and their respective successors and
assigns (collectively, "MC") free and harmless, from and against any and all
out-of-pocket damages, costs and expenses (including reasonable attorneys' fees
and costs) incurred by MC, to the extent arising out of or resulting from any
and all claims, suits, actions, proceedings or judgments (collectively, "GAB
Claims") made by or in favor of GAB Business Services, Inc. and/or GAB Robins
North America, Inc. (collectively "GAB") or their respective predecessors,
successors or assigns or any other person or entity having an interest in GAB
(collectively, the "GAB Entities") that the sale of the Property by Seller to
Buyer violates or interferes with GAB's right of first refusal contained in that
certain Lease to GAB Business Services, Inc. dated April 4, 1983 and that
certain Lease to GAB Business Services, Inc. dated November 30, 1983
(collectively, the Lease"), including, without limitation, any injunction or
other court order or judgment after the date hereof requiring Buyer and Seller
to rescind the sale of the Property or any portion thereof, specifically
excluding, however, (i) any lost profits or lost increases in value, which MC
may allege that MC incurred as a result of any such rescission or other order or
judgment but including any out-of-pocket losses incurred by MC as a result of
any court order or judgment requiring MC to disgorge any amounts earned by MC
from the Property during MC's period of ownership thereof, and (ii) any and all
damages which may be assessed against MC as a result of actions MC takes after
the date hereof to the extent such actions are taken without, or are
inconsistent with, express written directions to MC from Prudential's counsel.
B. MC shall cooperate with PruBeta-3 and Prudential in all reasonable respects
(and Prudential and EPV jointly and severally agree to reimburse MC for the
out-of-pocket costs incurred by MC in connection with such cooperation) in
connection with GAB Robins North America, Inc. v. PruBeta-3 et al., Docket No.
MRS-L-187-98 and any other suits, actions or proceedings relating to or arising
from the GAB Claims (collectively "Litigation"), and take such actions and
execute such filings and other documents as may be reasonably necessary to
comply with the strategies and directions selected by PruBeta-3 and Prudential
and their counsel in connection with the Litigation. Seller shall direct its
counsel to keep MC apprised as to the status of the GAB Claims and the
Litigation and any new filings and promptly furnish MC with copies of all papers
proposed to be issued by Seller and issued by GAB or the Court, to the extent
not directly served upon MC by GAB or the Court. Prudential shall have the right
to
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select and direct MC's counsel in connection with the Litigation, which shall
not be the same counsel as Prudential's or PruBeta-3's counsel. Prudential
hereby appoints, and MC accepts, Xxxxx Xxxx as the attorney to initially
represent MC in connection with the Litigation. If MC determines, in its
reasonable judgment, that changing the counsel representing MC is warranted,
then MC shall so notify Prudential, Prudential shall select new counsel for MC,
and such new counsel shall be subject to MC's consent, not to be unreasonably
withheld, conditioned or delayed. MC shall not assert that Prudential's and
PruBeta-3's counsel should be disqualified to represent Prudential and/or
PruBeta-3 in connection with the Litigation or any other matters as a result of
any conflict of interest unless such conflict of interest results from
Prudential's counsel undertaking representation of MC after the date hereof.
Prudential shall have the right to settle any such claim for which Prudential
and EPV have agreed to indemnify MC under this Section 9.5, provided Prudential
and/or EPV duly perform the obligation to so indemnify MC in accordance with
this Section 9.5. This indemnity contained in this Section 9.5 shall not be
subject to the $4,050,000 limitation on maximum liability set forth in Section
14.16.
C. The provisions of this Section 9.5 shall survive the Closing Date.
5. Allocation of Purchase Price. To correct an error, Section 2.3 of the
Contract is hereby amended so that the "Developed Property Purchase Price" is
One Hundred Twenty-Nine Million Five Hundred Thirty-Two Thousand and no/100
Dollars ($129,532,000), and the "Vacant Property Purchase Price" is Twenty-Seven
Million Five Hundred Thousand Dollars ($27,500,000) and no/100.
5. Effect of Amendment. This Amendment modifies and amends the Contract.
The terms and provisions hereof shall supersede any contrary terms and
provisions contained in the Contract. The Contract, as hereby amended and
modified, remains in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first set forth above.
PRUBETA-3, a New Jersey general partnership
By: The Prudential Insurance Company of America, as General
Partner of PruBeta-3
By:
---------------------------------------------
Name:
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Its Vice President
By: Equity Parsippany Venture, a Colorado general partnership,
as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado corporation,
as Managing Partner
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Its Vice President
XXXX-XXXX REALTY ACQUISITION CORP.
By:
---------------------------------------------
Name:
-------------------------------------------
Its:
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con't on next page
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XXXX-XXXX REALTY, L.P., a Delaware limited partnership
By:
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By:
---------------------------------------------
Name:
-------------------------------------------
Its:
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PARSIPPANY CAMPUS REALTY ASSOCIATES, L.P.
By: Xxxx-Xxxx Sub XII, Inc.
By:
---------------------------------------------
Name:
-------------------------------------------
Its:
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The undersigned have executed this Amendment for the purpose of
acknowledging their joint and several liability for their respective obligations
set forth in Section 3 of this Amendment which are expressly denominated as
being joint and several.
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, as General Partner of PruBeta-3
By:
---------------------------------------------
Name:
-------------------------------------------
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Its Vice President
EQUITY PARSIPPANY VENTURE, a Colorado general
partnership, as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado corporation,
as Managing Partner
By:
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Its Vice President
con't on next page
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The undersigned, U S WEST FINANCIAL SERVICES, INC., a Colorado corporation
("USWFS"), hereby unconditionally and primarily guarantees the payment and
performance by EPV of all of its obligations under Section 3 this Amendment
without requiring Buyer or MC to pursue any other party before pursuing USWFS.
USWFS hereby acknowledges that Buyer is relying on this guaranty in entering
into this Amendment and in closing the transactions contemplated in hereunder;
and that this guaranty is a material inducement to each of the foregoing. USWFS
hereby acknowledges that it is an affiliate of the managing partner in EPV and
is thereby receiving benefit from entering into this guaranty.
DATED: As of March ___, 1998.
U S WEST FINANCIAL SERVICES, INC.,
a Colorado corporation
By:
----------------------------------------------------
Xxxxxxx X. Xxxxxxxxxxx
Vice President
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February 27, 1998
326-0852
VIA FACSIMILE
Xxxxxxx X. Xxxxxxxxx, Xx.
X.X. Xxxxxx Investment Management, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Xxxxxx County (One & Five Sylvan Way)
Dear Mr. Cinammond:
This letter confirms that Xxxx-Xxxx Realty Acquisition Corp. ("MC") has
completed its due diligence pursuant Article 4 of that certain Purchase and Sale
Agreement dated February 4, 1998 (the "Agreement") between Sylvan Way L.L.C.
("Sylvan") and MC and elects to proceed with the transaction.
The parties to the Agreement hereby agree that the Purchase Price (as
defined in Article 2 of the Agreement) is hereby reduced by $300,000.00.
Please confirm Sylvan's agreement to said reduction of the Purchase Price
by countersigning this letter and returning it to me by facsimile prior to 5:00
p.m. today. Thank you for your prompt attention to this matter.
Very truly yours,
Xxxx X. Xxxxxx, III
AGREED AND ACCEPTED:
SYLVAN WAY L.L.C., a Virginia
limited liability company
By: System Realty Nineteen, Inc., a Virginia corporation
By:
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Name: Xxxxxxx X. Xxxxxxxxx, Xx.
Title: President
ADOPTION OF PARTNERSHIP AGREEMENT
The undersigned hereby agrees: (I) to assume all of the rights and
obligations of a Limited Partner (as defined in the Partnership Agreement
referred to below); (ii) to be bound by the terms of the Second Amended and
Restated Agreement of Limited Partnership of Xxxx-Xxxx Realty, L.P., dated as of
December 11, 1997 (as amended from time to time, the "Partnership Agreement");
and (iii) that notices under the Partnership Agreement may be addressed to the
undersigned at the address set forth below.
THE REMAINDER OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK
SIGNATURES ARE ON THE FOLLOWING PAGE
Please date and sign the next page
and provide an address to which notices pursuant to the Partnership
Agreement should be sent.
IN WITNESS WHEREOF, the undersigned has executed this Adoption of
Partnership Agreement as of this _____ day of ______________, 1998.
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By:
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Title:
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Address:
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