CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made this
26th day of March, 1998, by and among the parties set forth on Exhibit A annexed
hereto and made a part hereof (jointly and severally, "Contributors", and each
individually, a "Contributor"), each having an address c/o Pacifica Holding
Company, 5975 South Quebec Street, Suite 100, Englewood, Colorado, XXXX-XXXX
REALTY, L.P., a Delaware limited partnership ("MCRLP") and XXXX-XXXX REALTY
CORPORATION, a Maryland corporation ("Xxxx-Xxxx"), each having an address at 00
Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
RECITALS
1. Contributors are, collectively, the owners of all the membership
and/or other ownership interests in and to Pacifica Development Properties II
Limited Liability Company, a Colorado limited liability company ("PDPII"). Each
Contributor owns the respective membership and/or ownership interest in PDPII
set forth on Exhibit B annexed hereto and made a part hereof.
2. PDPII owns various commercial properties located throughout the
Denver, Colorado metropolitan area. Xxxx-Xxxx, through MCRLP and certain
affiliated entities of MCRLP, similarly own various commercial properties
located throughout New Jersey, New York, Pennsylvania, Nebraska, Iowa,
California, Florida, Arizona, Connecticut and Texas.
3. In order to effectuate their contribution and exchange of assets
as herein provided, each Contributor hereby agrees to contribute all of its
membership and/or ownership interests in and to PDPII and certain other assets
to MCRLP and Xxxx-Xxxx, and MCRLP and Xxxx-Xxxx hereby agree to accept the
contribution of the Contributors' Interest and certain other assets on, and
subject to, the terms, covenants and conditions set forth herein.
4. Contributors, MCRLP and Xxxx-Xxxx have determined that the
transactions contemplated hereby are in the respective parties' best interests.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and for ten dollars ($10.00) and other good and valuable
consideration, the mutual receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, do agree
as follows:
a. SUBJECT OF CONTRIBUTION.
i. Upon, and subject to the terms, covenants and conditions of
this Agreement, on the Closing Date (as hereinafter defined), each of the
Contributors shall contribute, convey or otherwise transfer to certain designees
of MCRLP 100% of said Contributor's
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right, title and interest (collectively, "Contributors' Interests, each
individually, a "Contributor's Interest") in and to PDPII.
ii. From and after the Closing, PDPII shall be the sole and
exclusive owner of the following:
(1) that certain real property situate, lying and being
in the State of Colorado and being more particularly described on Schedule 1(a)
(the "Land") and all of the improvements located on the Land (individually, a
"Building" and collectively, the "Improvements");
(2) all rights, privileges, grants and easements
appurtenant to PDPII's interest in the Land and Improvements, if any, including
without limitation, all of Contributor's and/or PDPII's rights, title and
interests in and to all land lying in the bed of any public street, road or
alley, all mineral and water rights and all easements, licenses, covenants and
rights-of-way or other appurtenances used in connection with the beneficial use
and enjoyment of the Land and Improvements (the Land and Improvements and all
such rights, privileges, easements, grants and appurtenances are sometimes
collectively referred to herein as the "Real Property");
(3) except as set forth on Schedule 1(c) all personal
property, artwork, fixtures, equipment, inventory and computer programming and
software owned by PDPII and located on any of the Real Property or used at any
of the management and corporate offices of PDPII or Contributor (the "Personal
Property");
(4) all leases and other agreements with respect to the
use and occupancy of the Real Property, together with all amendments and
modifications thereto (the "Leases") and any guaranties provided thereunder, and
rents, additional rents, reimbursements, profits, income, receipts and the
amount deposited (the "Security Deposit") under any Lease in the nature of
security for the performance of the Tenant's (as defined herein) obligations
thereunder;
(5) Intentionally Deleted.
(6) all assignable permits, licenses, guaranties,
approvals, certificates and warranties relating to the Real Property and the
Personal Property (collectively, the "Permits and Licenses"), all of PDPII's
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Real Property ("Service Contracts")
and telephone numbers in use at any of the Real Property or the management
offices and corporate headquarters of PDPII (together with the Permits and
Licenses and the Service Contracts, the "Intangible Property");
(7) all books, records, promotional material, tenant
data, leasing material and forms, past and current rent rolls, files,
statements, market studies, keys, plans,
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specifications, reports, tests and other materials of any kind owned by or in
the possession of PDPII which are or may be used in the use and operation of the
Real Property or Personal Property (collectively, the "Books and Records"); and
(8) all other rights, privileges and appurtenances owned
by PDPII, if any, and in any way related to the rights and interests described
above in this Section 1.
The Real Property, the Personal Property, the Leases, the
Intangible Property, the Books and Records and the other property interests are
hereinafter collectively referred to as the "Property".
b. CONSIDERATION.
i. Total Exchange Consideration. The aggregate consideration
for the Contributor's Interests (the "Exchange Consideration") is Eight Million
Seven Hundred Twelve Thousand Five Hundred Five and xx/100 ($8,712,505.00)
Dollars, to be paid by MCRLP in accordance with Section 2.2. The Exchange
Consideration shall be allocated as follows: (1) Land: $2,612,505 and (2)
Building and Improvements: $6,100,000.
ii. The Property. (a) At the Closing (as hereinafter defined),
and upon satisfaction of the terms and conditions herein (i) Contributors shall
contribute, convey or otherwise transfer to MCRLP or its Permitted Assignees (as
hereinafter defined), all of Contributors' Interests and (ii) MCRLP (and
Xxxx-Xxxx where applicable) shall, subject to adjustment as set forth herein,
pay to Contributors or their designees, in cash, the amount of Eight Million
Seven Hundred Twelve Thousand Five Hundred Five and xx/100 ($8,712,505.00)
Dollars (the "Cash Payment"), allocated as set forth in Schedule 2.2(a)(i); and
(iii) MCRLP (and Xxxx-Xxxx where applicable) shall issue the Contributor Units
(as hereinafter defined) in an amount set forth on Schedule 2.2(a)(ii) to such
persons as Contributor shall direct in writing (as set forth in Section
10.2(aa)) as soon as practicable following the date hereof (the "Unit Holders").
(2) Simultaneous with MCRLP accepting the Contributors'
Interests, MCRLP shall issue, subject to adjustments as set forth herein, common
units of limited partnership interests in MCRLP (the "Contributor Units"),
convertible into Xxxx-Xxxx common stock ("Common Stock"); provided, however,
that the Unit Holders shall be issued and shall hold the Contributor Units in
accordance with the provisions of Section 19.
(3) At the Closing, MCRLP shall issue to Contributors
and/or the Unit Holders or their designees certificates representing the
Contributor Units (the "Permanent Certificates"), which Permanent Certificates
shall contain the legend set forth on Exhibit 10.2(ee).
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(4) All rights and benefits incidental to the ownership
of the Contributor Units received in exchange for the Property, including, but
not limited to the right to receive distributions, voting rights and the right
to exchange the Contributor Units for shares of Common Stock, shall accrue for
the benefit of the Unit Holders commencing on the Closing Date (as defined
herein).
(5) With respect to the first Partnership Record Date
(as defined in the OP Agreement (as defined below)) on or after the Closing, the
Unit Holders shall receive distributions payable with respect to the Contributor
Units on a pro rata basis based upon the number of days during the calendar
quarter preceding such Partnership Record Date that the Unit Holders held
Contributor Units.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
c. INSPECTION PERIOD; MCRLP'S RIGHT OF TERMINATION AND REJECTION
PRIOR TO CLOSING.
i. Prior to the Closing (the "Inspection Period"), MCRLP, at
its sole cost and expense, may perform, or cause to be performed, tests,
investigations and studies of or related to the Property, the Contributors
and/or PDPII, including, but not limited to, soil tests and borings, ground
water tests and investigations, percolation tests, surveys, architectural,
engineering, subdivision, environmental, access, financial, market analysis,
development and economic feasibility studies and other tests, investigations or
studies as MCRLP, in its sole discretion, determines is necessary or desirable
in connection with the Property, the Contributors and/or PDPII and may inspect
the physical (including environmental) and financial condition of the Property,
the Contributors and/or PDPII, including but not limited to Leases, Service
Contracts, contracts pursuant to which third party management fees are payable,
copies of the Contributors' and PDPII's Tax Returns and the Property Financials
(as hereinafter defined) as of and for the years ending December 31, 1995, 1996
and 1997, engineering and environmental reports, development approval
agreements, permits and approvals, which inspection shall be satisfactory to
MCRLP in its sole discretion. Contributors agree to cooperate and shall cause
PDPII to cooperate with MCRLP in such review and inspection and, to the extent
not yet delivered, shall deliver said documents and information to MCRLP within
ten (10) days from the date hereof. MCRLP may terminate this Agreement for any
reason, by written notice given to Contributor, prior to the expiration of the
Inspection Period. In the event MCRLP terminates this Agreement during the
Inspection Period, this Agreement shall be null and void and the parties hereto
shall be relieved of all further obligations hereunder except as otherwise
provided herein. In the event MCRLP does not terminate this Agreement by the end
of the Inspection Period, then MCRLP shall be deemed to have elected not to
terminate this Agreement.
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ii. During the Inspection Period, MCRLP, its agents and
contractors shall have unlimited access to the Property the Contributors and/or
PDPII and other information pertaining thereto in the possession or within the
control of Contributors, during normal business hours, for the purpose of
performing such studies, tests, borings, investigations and inspections for the
purposes described in Section 3.1 above. Such right of inspection and the
exercise of such right shall not constitute a waiver by MCRLP of the breach of
any representation or warranty of PDPII or Contributors which might, or should,
have been disclosed by such inspection. Contributors shall cooperate and cause
PDPII to cooperate with MCRLP in facilitating its due diligence inquiry and
shall obtain, and use commercially reasonable efforts to obtain, any consents
that may be necessary in order for MCRLP to perform the same.
iii. To assist MCRLP in its due diligence investigation of the
Property and PDPII, Contributors shall deliver to MCRLP, by the execution and
delivery of this Agreement, true and correct copies of all existing Phase I
environmental studies (the "Phase I Reports") in the possession or control of
Contributors, PDPII, its counsel or consultants, with respect to the Real
Property, which Phase I Reports are set forth on Schedule 3.3 annexed hereto. In
the event that MCRLP determines that it requires any new Phase I Reports or
updates thereof, the cost of such reports or updates shall be borne by MCRLP. If
MCRLP reasonably requires that further environmental investigations be
undertaken beyond any new Phase I or updated Phase I Report, all engineering
costs and expenses relating to said further environmental investigations shall
be borne by Xxxx-Xxxx.
iv. Intentionally Deleted.
v. During the Inspection Period, Xxxx-Xxxx and MCRLP shall
provide to Contributors and their agents and advisors reasonable access to
Xxxx-Xxxx'x and MCRLP's books and records, and Xxxx-Xxxx and MCRLP shall provide
Contributors such other reasonable information including, without limitation,
all Securities and Exchange Commission filings of MCRLP and Xxxx-Xxxx and
federal, state, and local income, excise, franchise, and all other tax filings,
in order to permit Contributors, at their sole cost and expense, to perform
reasonable due diligence on such parties. Nothing arising from PDPII's or
Contributors' inspection or due diligence as permitted by this Section shall
give rise to a right of Contributors to terminate this Agreement.
vi. Xxxx-Xxxx shall have the right, without the obligation, to
terminate this Agreement if (i) at any time prior to the Closing Date, Xxxx-Xxxx
determines in its sole discretion, that any of the Property is subject to
materially adverse environmental conditions, including, without limitation, any
environmental condition that has a material adverse affect on the property value
of any Real Property, on the current use of any Real Property, on groundwater
at, on, under, about or emanating from any Real Property or on the ability of
Xxxx-Xxxx or MCRLP to finance any Real Property; or (ii) Contributor is unable
to obtain the approval of any member of the Contributors to the terms of this
Agreement; or (iii) Xxxx-Xxxx determines that certain of the indebtedness
encumbering the Property or PDPII cannot be satisfied.
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d. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
i. As of the Closing Date, title to the Property shall be
subject only to the following (collectively, the "Permitted Encumbrances"):
(1) The liens of real estate taxes, personal property
taxes, water charges, and sewer charges provided the same are not yet due and
payable, but subject to adjustment as provided herein;
(2) the rights of those parties occupying space at any
of the Improvements (collectively, "Tenants") as tenants only;
(3) those restrictions, covenants, agreements,
easements, matters and things affecting title to the Real Property as of the
date hereof and more particularly described in Schedule 4.1(c) annexed hereto
and by this reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of MCRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or conditioned;
(4) any and all laws, statutes, ordinances, codes,
rules, regulations, requirements, or executive mandates affecting the Real
Property including, without limitation, those related to zoning and land use, as
of the date hereof;
(5) the state of facts shown on the surveys described on
Schedule 4.1(e) for the property comprising the Real Property;
(6) the Service Contracts, excluding, however, any
Service Contract MCRLP advises Contributor to terminate prior to Closing (as
hereinafter defined);
(7) any utility company rights, easements and franchises
to maintain poles, lines, wires, cables, pipes, boxes and other fixtures and
facilities in, over, under or upon the Real Property, provided the same do not
impair, in other than a de minimis manner, the present use of the Real Property;
(8) such matters as the Title Company (as hereinafter
defined) shall be willing, without special premium, to omit as exceptions to
coverage; and
(9) Intentionally Deleted.
ii. Prior to the date hereof, Contributors shall have directed
Land Title Guarantee Company (the "Title Company"), as agent for Chicago Title
Insurance Company, to prepare a title insurance search and commitment for
owner's title insurance policy for the Real Property (the "Title Commitment").
MCRLP shall cause the Title Company to promptly deliver
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a copy of the same to Contributors and their counsel. If any defects, objections
or exceptions in the title to the Real Property appear in the Title Commitment
(other than the Permitted Encumbrances) which MCRLP is not required to accept
under the terms of this Agreement, Contributors may, at their election,
undertake to eliminate such unacceptable defects, objections or exceptions, it
being agreed that except as provided below, Contributors shall have no
obligation to incur any expense in connection with curing such defects,
objections or exceptions, other than (i) judgments against any Contributor or
PDPII; (ii) mortgages or other liens which can be satisfied by payment of a
liquidated amount; and (iii) defects, objections or exceptions which can be
removed by payments not to exceed $100,000.00 in the aggregate. Contributors, in
their discretion, may adjourn the Closing for up to sixty (60) days in order to
eliminate unacceptable defects, objections or exceptions. If, after complying
with the foregoing requirements, Contributors are unable to eliminate all
unacceptable defects, objections or exceptions in accordance with the terms of
this Agreement on or before such adjourned date for the Closing, MCRLP shall
elect either (i) to terminate this Agreement by notice given to Contributors, in
which event the provisions of Section 23.2(a) shall apply, or (ii) to accept
title subject to such unacceptable defects, objections or exceptions and receive
no credit against or reduction of the consideration to be given hereunder for
the Property. Contributors and PDPII agree and covenant that they shall not
voluntarily place any encumbrances or restrictions on title to the Real Property
from and after the date of the first issuance of the Title Commitment for said
Property, except for the right to reserve easements for utilities and ingress
and egress encumbering the Real Property (post-closing) for the benefit of
adjacent properties owned by PDPII (or any affiliate thereof) upon the written
consent of MCRLP, which consent shall not be unreasonably withheld or delayed.
Xxxx-Xxxx and MCRLP covenant and agree that they shall consult with Contributors
prior to causing any other person or entity to request any inspection of the
Real Property by any governmental entity. Contributors recognize that
Xxxx-Xxxx'x and MCRLP's due diligence necessitates said inspection. Xxxx-Xxxx
and MCRLP agree that they shall conduct any due diligence with such governmental
entity with a view toward maintaining the confidentiality of the transaction
contemplated by this Agreement.
iii. It shall be a condition to Closing that Contributors
contribute and convey, and that the Title Company insures, title to the Real
Property in the amount of the Exchange Consideration (at a standard rate for
such insurance) in the name of MCRLP or its designees, by a standard 1992 ALTA
Owner's Policy, with ALTA endorsements Form 3.1, Form 8.1, a comprehensive
owner's endorsement and non-imputation endorsement, to the extent that the
premium for such endorsements, with the exception of the non-imputation
endorsements, is paid by MCRLP, for the Real Property and any other endorsements
as reasonably required by MCRLP, free and clear of all liens, encumbrances and
other matters, other than the Permitted Encumbrances (the "Title Policy"). The
Title Company shall provide affirmative insurance that (i) the exception for
taxes shall apply only to the current taxes not yet due and payable; and (ii) to
the extent that the premium for such endorsements, with the exception of the
non-imputation endorsements, is paid by MCRLP, (a) any Permitted Encumbrances
have not been violated, and that any future violation thereof will not result in
a forfeiture or reversion of title; and (b) MCRLP's contemplated use of the Real
Property will not violate the Permitted Encumbrances. PDPII and Contributor
shall provide
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such affidavits, undertakings and indemnities as the Title Company insuring
title to the Real Property may require, including without limitation indemnities
relating to each non-imputation endorsement, and shall cure all other defects
and exceptions other than the Permitted Encumbrances and as required pursuant to
Section 4.2. The words "insurable title" and "insurable" as used in this
Agreement are hereby defined to mean title which is insurable at standard rates
(without special premium) by the Title Company without exception other than the
Permitted Encumbrances, and standard printed policy and survey exceptions.
iv. Contributors shall cause one or more surveyors acceptable
to MCRLP to deliver to MCRLP a survey or surveys of the Real Property acceptable
to MCRLP in all respects and in conformity with ALTA standards. MCRLP shall, at
MCRLP's sole cost and expense and with Contributors' cooperation and assistance,
cause the surveyor to update the survey no more than thirty (30) days prior to
the Closing Date and shall have the general survey exception removed from the
Title Policy and the survey affirmatively insured, to the extent that the
premium for such endorsement is paid by MCRLP, to MCRLP.
v. Any unpaid taxes, water charges, sewer rents and
assessments, together with the interest and penalties thereon to a date not less
than seven (7) business days following the Closing Date (in each case subject to
any applicable apportionment), and any mortgages or other liens created by
Contributors or PDPII, together with the cost of recording or filing of any
instruments necessary to discharge such liens and such judgments, shall be paid
at the Closing by Contributors. PDPII or Contributors shall deliver to MCRLP, on
the Closing Date, instruments in recordable form sufficient to discharge any
such mortgages or other liens which any of the Contributors or PDPII is
obligated to pay and discharge pursuant to the terms of this Agreement.
vi. If the Title Commitment discloses judgments, bankruptcies
or other returns against other persons or entities having names the same as or
similar to that of PDPII or any of the Contributors, Contributors shall, upon
request, deliver to the Title Company affidavits showing that such judgments,
bankruptcies or other returns are not against PDPII or any of the Contributors,
or any of their affiliates. Upon request by MCRLP, Contributors shall deliver
any affidavits and documentary evidence as are reasonably required by the Title
Company to eliminate the standard exceptions on the ALTA Owner's Policy.
e. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTORS.
i. In order to induce MCRLP and Xxxx-Xxxx to perform as
required hereunder, Contributors hereby warrant and represent jointly and
severally to MCRLP and Xxxx-Xxxx, the following with respect to the Property and
Contributors' Interests:
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(1) PDPII is a duly organized and validly existing
entity, organized and in good standing under the laws of the state of its
formation, as more particularly set forth in Exhibit A hereto, is duly
authorized to transact business in the State of Colorado, has all requisite
power and authority to consent to the execution and delivery of this Agreement
and all other documents and instruments to be executed and delivered by it
hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to cause the contribution and conveyance of
Contributors' Interests in accordance with the terms and conditions hereof. All
necessary actions of PDPII and Contributors, and the members of each, to confer
such power and authority upon the persons executing this Agreement and all
documents which are contemplated by this Agreement on their behalf have been
taken.
(2) PDPII has the power and authority to own the
Property and to conduct and transact its limited liability company business.
(3) This Agreement, when duly executed and delivered,
will be the legal, valid and binding obligation of each Contributor, enforceable
in accordance with the terms of this Agreement. The performance by each
Contributor of its duties and obligations under this Agreement and the documents
and instruments to be executed and delivered by it hereunder will not conflict
with, or result in a breach of, or default under, any provision of any of the
organizational documents of such Contributors or PDPII or any agreements,
instruments, decrees, judgments, injunctions, orders, writs, laws, rules or
regulations, or any determination or award of any court or arbitrator to which
such Contributors or PDPII is a party or by which its assets are or may be
bound.
(4) Annexed hereto as Schedule 5.1 (d) is a true,
complete and correct schedule of all of the Leases. The Leases are valid and
bona fide obligations of the landlord and Tenants thereunder and are in full
force and effect. To the best of Contributors' knowledge, no defaults exist
thereunder and no condition exists which, with the passage of time or the giving
of notice or both, will become a default; the Leases constitute all of the
leases, tenancies or occupancies affecting the Real Property on the date hereof;
all Tenants have commenced occupancy; there are no agreements (other than the
Leases) which confer upon any Tenant or any other person or entity any rights
with respect to the Property, nor is any Tenant entitled now or in the future to
any concession, rebate, offset, allowance or free rent for any period, nor has
any such claim been asserted by any Tenant.
(5) Annexed hereto as Schedule 5.1(e) (the "Rent Roll")
is a listing of the following, which is true, complete and correct in all
respects for the Building: (i) the name of each Tenant; (ii) the fixed rent
actually being collected; (iii) the expiration date or status of each Lease
(including all rights or options to renew); (iv) the Security Deposit, if any;
(v) whether there is any guaranty of a Tenant's obligations from a third party,
and if so the nature of said guaranty; (vi) any written notices given by any
Tenant of an intention to vacate space in the future;
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(vii) the base year(s) and base year amounts for all items of rent or additional
rent billed to each Tenant on that basis; and (viii) any arrearages of any
Tenant beyond thirty (30) days.
(6) To the knowledge of Contributors, PDPII has
performed all of the obligations and observed all of the covenants required of
it as landlord under the terms of the Leases. Except as set forth on Schedule
5.1(f) annexed hereto, all work, alterations, improvements or installations
required to be made for or on behalf of all Tenants under the Leases have in all
respects been carried out, performed and complied with, and there is no
agreement with any Tenant for the performance of any work to be done in the
future, and no continuing obligations or liabilities by PDPII, as landlord under
the Leases. To the knowledge of PDPII and Contributors, except as set forth on
Schedule 5.1(f), no work has been performed at any Building which would require
an amendment to the certificate of occupancy for such Building for which an
amendment has not been obtained, and any and all work performed at the Real
Property to the date hereof and to the Closing Date has been and will be in
accordance with the rules, laws and regulations of all applicable authorities.
All bills and claims for labor performed and materials furnished to or for the
benefit of the Property arising prior to the Closing Date will be paid in full
by PDPII within customary time periods, not to exceed forty-five (45) days from
the receipt of an invoice by PDPII.
(7) There are no service contracts, union contracts,
employment agreements or other agreements affecting the Property or the
operation thereof, except the Service Contracts and other contracts and
agreements set forth on Schedule 5.1(g) annexed hereto. All of the Service
Contracts are and will on the Closing Date be unmodified and in full force and
effect without any material default or claim of material default by any of the
parties thereto. All sums presently due and payable by PDPII under the Service
Contracts have been fully paid and all sums which become due and payable between
the date hereof and the Closing Date shall be fully paid by PDPII within
customary time periods, not to exceed forty-five (45) days from the receipt of
an invoice by PDPII. All of the Service Contracts may be terminated on not more
than sixty (60) days notice without the payment of any fee or penalty, and the
representation contained in this sentence is not subject to being modified by
the limitations of Section 5.5. There are no employees of PDPII, or any
affiliate thereof, working at or in connection with the Real Property pursuant
to any of the Service Contracts, other contracts and/or employment agreements
except as set forth on Schedule 5.1(g).
(8) Except as set forth on Schedule 5.1(h) annexed
hereto, there are no actions, suits, labor disputes, litigation or proceedings
currently pending or, to the knowledge of PDPII or Contributors, threatened
against or related to PDPII or any of the any of the Contributors or all or any
part of the Property or PDPII, the environmental condition thereof, or the
operation thereof.
(9) Except as set forth on Schedule 5.1(i) annexed
hereto, neither PDPII nor any of the Contributors has received written notice of
and neither has any knowledge of (i) any pending or contemplated annexation or
condemnation proceedings, or private
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purchase in lieu thereof, affecting or which may affect the Real Property or any
part thereof, (ii) any proposed or pending proceeding to change or redefine the
zoning classification of all or any part of the Real Property, (iii) any
proposed or pending special assessments affecting the Real Property or any
portion thereof, (iv) any penalties or interest due with respect to real estate
taxes assessed against the Real Property, or (v) any proposed changes in any
road or grades with respect to the roads providing a means of ingress and egress
to the Real Property. Contributors agree to furnish MCRLP with a copy of any
such notice received within two (2) business days after receipt.
(10) Contributors have provided MCRLP with all reports
in the possession of PDPII, Contributors, its counsel or consultants, or under
their control, related to the physical condition of the Real Property.
(11) Except as set forth on Schedule 5.1(k) annexed
hereto, Contributors have no knowledge of any notices, suits, or judgments
relating to any violations (including environmental) of any laws, ordinances or
regulations affecting the Real Property, or any violations or conditions that
may give rise thereto, and have no reason to believe that any agency, board,
bureau, commission, department or body of any municipal, county, state or
federal governmental unit, or any subdivision thereof, having, asserting or
acquiring jurisdiction over all or any part of the Real Property or the
management, operation, use or improvement thereof (collectively, the
"Governmental Authorities" or "Governmental Authority" as the context requires)
contemplates the issuance thereof, and there are no outstanding orders,
judgments, injunctions, decrees or writ of any Governmental Authorities against
or involving PDPII, any of the Contributors or the Real Property. For purposes
of this Agreement, the term "Governmental Authority" shall also include the
Internal Revenue Service and any other federal, state, local or foreign taxing
authority.
(12) There are no employees of PDPII or the Contributors
or any affiliates thereof working at or in connection with the Real Property
except as set forth on Schedule 5.1(l).
(13) Annexed hereto as Schedule 5.1(m) is a schedule of
all leasing commission obligations affecting the Property. The respective
obligations of PDPII, Contributors and MCRLP with respect to said commissions
are set forth in Section 13.
(14) Neither PDPII nor any of the Contributors has made
a general assignment for the benefit of creditors, filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition by PDPII's or
Contributor's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of PDPII's or Contributor's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of PDPII's or Contributor's assets, admitted in writing its inability to pay its
debts as they come due or made an offer of settlement, extension or composition
to its creditors generally.
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(15) Except as set forth on Schedule 5.1(o), the
Personal Property is now owned and will on each of the Closing Date be owned by
PDPII or the Contributors free and clear of any conditional bills of sale,
chattel mortgages, security agreements or financing statements or other security
interests of any kind.
(16) Intentionally Deleted.
(17) Intentionally Deleted.
(18) Intentionally Deleted.
(19) Contributors have no knowledge that any part of the
Real Property has been designated as wetlands or any other word of similar
purport or meaning under the Federal Water Pollution Control Act, 33 U.S.C.
ss.1251 et seq.; the Colorado Water Quality Control Act, Colo. Rev. Stat.
Section 25-8-101 et seq; or any other applicable federal, state, county or
municipal statute, ordinance, rule, regulation, order or code.
(20) To the best of Contributors' knowledge, there are
no active or inactive aboveground or underground storage tanks or vessels or
associated piping at the Real Property, regardless of whether or not such tanks
or vessels are regulated tanks or vessels, except as set forth on Schedule
5.1(t).
(21) Contributors have no knowledge of outstanding
requirements or recommendations by (i) any insurance company currently insuring
the Property; (ii) any board of fire underwriters or other body exercising
similar functions; or (iii) the holder of any mortgage encumbering any of the
Property, which require or recommend any repairs or work of a material nature to
be done on the Property.
(22) The financial statements, including the income and
expense statements and the balance sheets of PDPII, the Contributors and their
affiliates, excluding only those assets, liabilities and operations not
contemplated to be contributed pursuant to this Agreement, relating to PDPII's
ownership and operation of the Property and the related statement of income,
member's capital and cash flows, including the footnotes thereto (the "Property
Financials") as of and for the years ending December 31, 1995, 1996 and 1997,
fairly present the combined financial position of PDPII and Contributors
relating to the Property as of such dates and the results of operations and cash
flows of PDPII and the Contributors relating to the ownership and operation of
the Property for such respective periods. The Property Financials from January
1, 1998, through the most recent month ending prior to the Closing Date, fairly
present the combined financial position of the Property relating to the
ownership and operation of the Property as of such date (subject to the normal
year-end adjustments described in Schedule 5.1(v)) and with all interim
financial statements of the Property heretofore delivered to MCRLP on behalf of
PDPII and the Contributors. Except as set forth on the Property Financials,
there are no other direct or indirect
72
indebtedness, liability, claim or loss that accrued prior to Closing, whether
known or unknown, fixed or unfixed, xxxxxx or inchoate, liquidated or
unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise,
whether or not of a kind required by GAAP to be set forth on the Property
Financials or the notes thereto, including, without limitation, indebtedness for
borrowed money (collectively, "Liabilities").
(23) Except as set forth in Schedule 5.1(w), PDPII does
not maintain any 401(k) savings plans, pension plans, multi-employer plans (as
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), employee benefit plans (as defined in ERISA) or employee
welfare plans providing for benefits to PDPII employees (each, an "Employer
Plan"). From and after the date hereof, the Contributors shall not cause or
permit PDPII to adopt an Employer Plan. Xxxx-Xxxx shall have no liability to any
current or former employees of Contributor or any affiliate thereof, including,
without limitation, any liabilities which may arise as a result of the
consummation of the transactions contemplated by this Agreement, under any plans
or programs listed on Schedule 5.1(w), or arising under applicable Federal or
state law, including, without limitation, under the Worker Adjustment and
Retraining Nonfiction Act (WARN) and Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).
(24) Intentionally Deleted.
(25) Except as disclosed in the Phase I Reports or
otherwise set forth in Schedule 5.1(y):
(a) To the best of Contributors' knowledge, no
Governmental Authority has demanded in writing, addressed to PDPII, Contributors
or any of its affiliates, counsel or agents, that any Contaminants (as defined
herein) be cleaned up or environmentally remediated at any Real Property, which
has not been cleaned up or environmentally remediated.
(b) To the best of Contributors' knowledge, no
Contaminants have been Discharged (as hereinafter defined) which would allow a
Governmental Authority to demand that a cleanup be undertaken.
(c) To the best of Contributors' knowledge, no
ss.104(e) informational request, issued pursuant to CERCLA (as hereinafter
defined) with respect to the Real Property has been received by Contributors or
PDPII.
(d) To the best of Contributors' knowledge, all
pre- existing aboveground and underground storage tanks and vessels, if any, at
the Real Property have been removed and their contents disposed of in accordance
with and pursuant to all applicable Environmental Laws.
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(e) To the best of Contributors' knowledge, there
is no asbestos or asbestos containing material requiring remediation under
Environmental Laws (as hereinafter defined) on the Real Property, except as set
forth on Schedule 5.1(y).
(f) To the best of Contributor's knowledge, all
transformers and capacitors containing polychlorinated biphenyls ("PCBs") , and
all "PCB Items", as defined in 40 CFR, ss.761.3, located on or affecting the
Real Property, are identified in Schedule 5.1(y) and are in compliance with all
Environmental Laws.
(g) To the best of Contributors' knowledge, PDPII
and the Contributors have all material certificates, licenses and permits (the
"Permits"), including without limitation, environmental Permits, required to
operate the Real Property. To the best of Contributors' knowledge, there is no
violation of any Environmental Laws with respect to any Permits, all Permits are
in full force and effect, are transferable with the Real Property, as the case
may be, without additional payment by MCRLP, and shall, upon Closing, be
transferred to MCRLP by Contributors and PDPII.
(h) To the best of Contributors' knowledge, the
Real Property has not been used during the period of PDPII's ownership as solid
wastes disposal sites and facilities as defined in the Colorado Solid Wastes
Disposal Sites and Facilities Law, Colo. Rev. Stat. Section 30-20-100.5 et seq.
and the regulations promulgated thereunder.
(i) To the best of Contributors' knowledge, there
are no engineering or institutional controls at the Real Property, including
without limitation, any deed notice, declaration of environmental restriction,
groundwater classification exception area, well restriction area or other notice
or use limitations pursuant to Colo. Rev. Stat. Section 00-00-000 et seq. and
the regulations promulgated thereunder.
(j) Neither PDPII nor any of the Contributors have
transported any Contaminants from the Real Property to another location in
violation of Environmental Laws.
(k) To the best of Contributors' knowledge, there
are no federal or state liens, as referenced under CERCLA and the regulations
promulgated thereunder, or under any other applicable Environmental Law that
have attached to the Real Property.
(l) Contributors and PDPII have provided MCRLP
with all environmental site assessments, investigations, and documents and all
other Environmental Documents (as that term is defined below) in their
possession or under their control and shall continue to do so after execution of
this Agreement promptly upon its receipt.
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(m) For purposes of this Agreement, the following
words shall have the respective meaning set forth below:
(i) "Contaminants" shall include, without
limitation, any regulated substance, toxic substance, hazardous substance,
hazardous waste, pollution, pollutant or contaminant, as defined or referred to
in the Resource Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901 et
seq.; the Comprehensive Environmental Response, Compensation and Liability Act,
as amended, 42 U.S.C. ss.9601 et seq. ("CERCLA"); the Water Pollution and
Control Act, 33 U.S.C. ss.1251 et seq.; together with any amendments thereto,
regulations promulgated thereunder and all substitutions thereof, as well as
words of similar purport or meaning referred to in any other applicable federal,
state, county or municipal environmental statute, ordinance, rule or regulation,
including, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde and petroleum products and petroleum based derivatives.
(ii) "Discharge" shall mean the releasing,
spilling, leaking, leaching, disposing, pumping, pouring, emitting, emptying,
treating or dumping of Contaminants at, into, onto or from the Property
regardless of whether the result of an intentional or unintentional action or
omission.
(iii) "Environmental Documents" shall mean
all environmental documentation in the possession or under the control of PDPII
or the Contributors concerning the Property or its environs, including, without
limitation, all sampling plans, cleanup plans, preliminary assessment plans and
reports, site investigation plans and reports, remedial investigation plans and
reports, remedial action plans and reports, or the equivalent, sampling results,
sampling result reports, data, diagrams, charts, maps, analysis, conclusions,
quality assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any Governmental
Authority.
(iv) "Environmental Laws" means each and
every applicable federal, state, county or municipal statute, ordinance, rule,
regulation, order, code, directive or requirement of any Governmental Authority
in any way related to Contaminants.
(26) PDPII and each Contributor shall have timely paid
all Taxes (as defined herein) due and payable on or prior to the Closing Date.
PDPII and each Contributor shall have timely filed all Tax Returns (as defined
herein) required to be filed on or prior to the Closing Date. Each such Tax
Return is complete and accurate in all respects. PDPII and each Contributor
shall have timely paid or will timely pay, or shall have provided for or will
provide for a cash reserve for the payment of, all Taxes due and payable on or
after the Closing Date for all taxable periods (or portions thereof) ending on
or prior to the Closing Date (a "Pre-Closing Tax Period" or "Pre-Closing Tax
Periods"). PDPII and each Contributor shall timely file all Tax Returns which
relate to all Pre-Closing Tax Periods but which are required to be filed after
the
75
Closing Date. Each such Tax Return will be complete and accurate in all
respects. True and complete copies of all Tax Returns filed by PDPII and each
Contributor for taxable periods beginning on or after January 1, 1994, and all
written communications relating thereto, have been, or will be upon request,
delivered to Xxxx-Xxxx. PDPII has also provided, or will also provide upon
request, to Xxxx-Xxxx copies of: (i) any letter ruling, determination letter or
similar document issued to PDPII by any Governmental Authority, and (ii) any
closing or other agreement entered into by PDPII with any Government Authority.
Except as set forth on Schedule 5.1(z), there are no ongoing Audits or Audits
pending or, to the knowledge of PDPII or any Contributors against the Property,
any Contributors or PDPII. There are no agreements or waivers extending the
statutory period of limitations with respect to any such Tax Returns or for the
assessment or collection of any such Taxes. No claim has ever been made by a
Governmental Authority in a jurisdiction where PDPII or any Contributor does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
(27) Annexed hereto as Schedule 5.1(aa) is a listing,
for federal income tax purposes, of the following information, which is true,
complete and correct in all aspects for each item of Property contributed
through each Contributor's Interest: (i) its adjusted basis as of the first day
of PDPII's taxable year which includes the Closing Date; (ii) the date placed in
service; (iii) the depreciation method; and (iv) the remaining useful life.
(28) Subject to the provisions of Section 5.5, no
representation or warranty made by PDPII or any Contributor contained in this
Agreement contains any untrue statement of a material fact or omits to state any
material fact necessary, in light of the circumstances under which it was made,
in order to make the statements herein not misleading or necessary in order to
fully and fairly provide the information required to be provided in any such
document, certificate, Schedule or Exhibit.
(29) As used throughout this Agreement, the phrases "to
Contributor's knowledge," "to the knowledge of Contributor," "to the best of
Contributor's knowledge" "to PDPII's knowledge," "to the knowledge of PDPII,"
"to the best of PDPII's knowledge" or any similar derivation thereof, shall mean
the actual (not constructive) knowledge of Xxxxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx,
Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx Xxxx and Xxxxx
Xxxxxx, without having undertaken any independent investigation of facts or
legal issues without having any duty to do so, and without imputing to the
aforementioned persons the knowledge of any employee, agent, representative or
affiliate of Contributors or of any other person or entity.
(30) Annexed hereto as Schedule 5.1(dd)(i) is a true,
complete and correct copy of PDPII's operating agreement, as amended to date,
and same shall be unchanged and in effect on the Closing Date. Annexed hereto as
Schedule 5.1(dd)(ii) is a filed copy of the articles of organization of PDPII.
76
(31) Contributors have good and marketable title to one-
hundred (100%) percent of PDPII and 100% of Contributors' Interests, free of all
liens and encumbrances whatsoever.
(32) Contributors have the power and authority to own
their respective Contributors' Interests and to conduct and transact their own
business and the business of PDPII.
(33) The contribution of Contributors' Interests
pursuant to this Agreement is authorized and within the power of each
Contributor and is legal and will not conflict with, result in any breach of any
of the provisions of, or constitute a default under the provisions of PDPII's
operating agreement or other instrument to which any Contributor is a party or
by which any Contributor may be bound.
(34) Neither MCRLP, nor Xxxx-Xxxx shall be responsible,
as a consequence of the contribution intended hereby, for any obligation
(including any Taxes) of PDPII or Contributor or for any liability, debt or
obligation (including any Taxes) of PDPII or Contributor to any third party
including, without limitation, any employees of PDPII or Contributor or any
Employer Plan accruing during the period prior to Closing (and Contributor
hereby agrees to indemnify, defend and hold MCRLP and Xxxx-Xxxx harmless from
and against any such liability, debt or obligation, including any Taxes and
reasonable attorney's fees), except for any obligations or liabilities of PDPII
or Contributor subject to which MCRLP or Xxxx-Xxxx has expressly agreed to
accept the assignment of Contributor's Interests and accruing during the period
following Closing. The representations and the indemnity set forth herein shall
be deemed to be material to MCRLP and Xxxx-Xxxx'x obligation to perform
hereunder and shall survive the Closing.
(35) After the Closing, Contributors shall not be
entitled to receive from PDPII any distribution or payment of indebtedness or
for any other reason whatsoever, except for cash and receivables with respect to
rent under the Leases for the period occurring prior to Closing to the extent
Contributor is entitled to same under Article 11, as of the date of Closing,
which shall be paid to Contributors.
ii. Intentionally Deleted.
iii. All representations and warranties made in this Agreement
by PDPII and the Contributors and those representations and warranties made by
the Contributors and the Contributor Unit Holders in the certificate executed by
each and delivered pursuant to Exhibit 10.2(ee) shall survive the Closing Date
for a period of one (1) year, except that the representations and warranties set
forth in clauses (a), (c), (w), (z) and (dd) through (hh) of Section 5.1 shall
survive such Closing Date for the applicable period of the statute of
limitations (unless otherwise specified herein), and shall not be merged in the
Interest Assignments. Notwithstanding the foregoing, to the extent that a Tenant
shall certify in its Estoppel Certificate (as defined below) as to any of the
77
matters which are contained in the representations and warranties made by PDPII
and/or Contributors in Section 5.1(f) of this Agreement, then such
representations and warranties as to such matters shall be of no further force
or effect to the extent of any conflict. Apollo Real Estate Investment Fund II,
L.P., a Delaware limited partnership; Pacifica Holding Company, a Colorado
corporation; and Pacifica Holding Company, a Colorado limited liability company
(collectively, "Guarantor"), and Contributors, jointly and severally, shall,
pursuant to a separate indemnity agreement (the "Indemnity Agreement") in the
form attached hereto as Exhibit 5.3, indemnify and defend MCRLP and Xxxx-Xxxx,
and to hold MCRLP and Xxxx-Xxxx harmless, from and against any and all claims,
liabilities, losses, deficiencies and damages as well as reasonable expenses
(including attorney's, consulting and engineering fees), and interest and
penalties related thereto, incurred by MCRLP by reason of or resulting from any
breach, inaccuracy, incompleteness or non-fulfillment of the representations,
warranties, covenants and agreements of PDPII and Contributors contained in this
Agreement to the full extent PDPII or the Contributors would be liable therefor
under the terms of this Agreement. The foregoing indemnity shall be deemed to be
material to MCRLP and Xxxx-Xxxx'x obligation to perform hereunder and shall
survive the Closing. Notwithstanding the foregoing, Xxxxxx X. Xxxxxxx XXX,
Xxxxxxx X. Xxxxxxx XXX, Xxxxxx Xxxxx XXX and the members of Contributors shall
have no liability for any loss resulting from any breach of the foregoing
representations and warranties. In addition, except as set forth in Section 28,
MCRLP and Xxxx-Xxxx shall not have a right to bring a claim against Contributors
by virtue of any of the representations or warranties being false or misleading
unless and until the aggregate damages to MCRLP and/or Xxxx-Xxxx are reasonably
expected to exceed $100,000.00, but thereafter MCRLP and/or Xxxx-Xxxx may bring
a claim against Contributors for the entire amount of its aggregate damages.
iv. Each Contributor acknowledges that it is not in a
significantly disparate bargaining position with respect to MCRLP or Xxxx-Xxxx
in connection with the transaction contemplated by this Agreement and that such
Contributor was represented by legal counsel in connection with this
transaction.
x. Xxxx-Xxxx and MCRLP each acknowledges that it has had, or
will have had, as of the Closing, sufficient time to review all materials and
information set forth in Schedule 5.5, and sufficient time and access to review
and investigate the Property. Notwithstanding any other provision of this
Agreement, except as set forth in Subsections 5.1(d), (e) and (f) as they relate
to the Leases, the Estoppels and the Rent Rolls, the representations and
warranties of PDPII and Contributors as set forth herein or in each
Contributor's Closing Certificate are hereby modified to be made true to the
extent that, as of the date hereof with respect to the representations and
warranties made herein, and as of the Closing Date with respect to the
representations and warranties made by PDPII and each Contributor as of the
Closing Date, (i) information contained in the records made available as set
forth Schedule 5.5 no longer makes the subject representation or warranty not
true, whether or not either Xxxx-Xxxx or MCRLP has actual knowledge of such
information, or (ii) either Xxxx-Xxxx or MCRLP has knowledge that the subject
representation or warranty is untrue, or (iii) Contributors have delivered or
made available to any
78
of the individuals described in Section 6.1(l) other written information
disclosing that the subject representation or warranty is not true, whether or
not either Xxxx-Xxxx or MCRLP has actual knowledge of such information.
f. REPRESENTATIONS AND WARRANTIES OF XXXX-XXXX AND MCRLP.
i. In order to induce Contributors to perform as required
hereunder, Xxxx-Xxxx and MCRLP hereby jointly and severally warrant and
represent the following:
(1) (i) MCRLP is a duly organized and validly existing
limited partnership organized and in good standing under the laws of the State
of Delaware, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to acquire the Property in accordance with
the terms and conditions hereof. All necessary actions of the partners of MCRLP
to confer such power and authority upon the persons executing this Agreement and
all documents which are contemplated by this Agreement on its behalf have been
taken.
(b) Xxxx-Xxxx is a duly organized and validly existing
corporation organized and in good standing under the laws of the State of
Maryland, has all requisite power and authority to execute and deliver this
Agreement and all other documents and instruments to be executed and delivered
by it hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to permit MCRLP to acquire the Property in
accordance with the terms and conditions hereof. All necessary actions of the
board of directors of Xxxx-Xxxx to confer such power and authority upon the
persons executing this Agreement and all documents which are contemplated by
this Agreement on its behalf have been taken.
(2) This Agreement and the agreements and other
documents to be executed and delivered by each of Xxxx-Xxxx and MCRLP hereunder,
when duly executed and delivered, will be the legal, valid and binding
obligation of each of Xxxx-Xxxx and MCRLP, enforceable in accordance with the
terms of this Agreement. The performance by each of Xxxx-Xxxx and MCRLP of each
of its duties and obligations under this Agreement and the documents and
instruments to be executed and delivered by each of them hereunder will not
conflict with, or result in a breach of, or default under, any provision of any
of the organizational documents of each of Xxxx-Xxxx and MCRLP or any
agreements, instruments, decrees, judgments, injunctions, orders, writs, laws,
rules or regulations, or any determination or award of any court or arbitrator,
to which each of Xxxx-Xxxx and MCRLP is a party or by which each of its assets
are or may be bound.
(3) The Contributor Units to be issued to Contributors
and/or the Unit Holders are duly authorized and, when issued by MCRLP, will be
fully paid and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim
79
or rights of interest of any third party of any nature whatsoever. The shares of
Common Stock to be issued by Xxxx-Xxxx upon redemption of the Contributor Units
will be reserved for future listing with the New York Stock Exchange prior to
the date upon which any of the same will be exercisable or redeemable for Common
Stock, and, upon such issuance, will be fully paid and non-assessable, free and
clear of any mortgage, pledge, lien, encumbrance, security interest, claim or
rights of interest of any third party of any nature whatsoever.
(4) MCRLP has furnished to Contributors a true and
complete copy of the OP Agreement, as amended to date.
(5) Xxxx-Xxxx has caused to be delivered to Contributors
copies of the OP Agreement. The SEC Documents were, and those additional
documents filed between the date hereof and the Closing will be, prepared and
filed in compliance with the rules and regulations promulgated by the SEC, and
do not and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein in order to make the
statements contained therein, in light of the circumstances under which they
were made or will be made, not misleading.
(6) The consolidated financial statements included in
the SEC Documents have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the period involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q) and present fairly (subject, in
the case of the unaudited statements, to normal, recurring year-end audit
adjustments) the consolidated financial position of Xxxx-Xxxx and its
Subsidiaries at the dates thereof and the consolidated results of operations and
cash flows for the periods then ended. For purposes of this Agreement,
"Subsidiaries" shall mean (i) any entity of which Xxxx-Xxxx (or other specified
entity) shall own directly or indirectly through a subsidiary, a nominee
arrangement or otherwise (x) at least a majority of the outstanding capital
stock (or other shares of beneficial interest), or (y) at least a majority of
the partnership, joint venture or similar interests; and (ii) any entity in
which Xxxx-Xxxx (or other specified entity) is a general partner or joint
partner, including without limitation MCRLP. "Subsidiaries" shall specifically
exclude Xxxx-Xxxx Services, Inc. and The Grove Street Urban Renewal Corp., which
are the only non-qualified REIT subsidiaries of Xxxx-Xxxx as of the date hereof.
(7) No action, suit, claim, investigation or proceeding,
whether legal or administrative or in mediation or arbitration, is pending or,
to the best of each of Xxxx-Xxxx'x and MCRLP's knowledge, threatened, at law or
in equity, against either of Xxxx-Xxxx or MCRLP before or by any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality which would prevent either of Xxxx-Xxxx or
MCRLP from performing its respective obligations pursuant to this Agreement.
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(8) The execution and delivery of this Agreement and the
performance by each of Xxxx-Xxxx and MCRLP of its respective obligations
hereunder do not and will not conflict with or violate any law, rule, judgment,
regulation, order, writ, injunction or decree of any court or governmental or
quasi-governmental entity with jurisdiction over Xxxx-Xxxx or MCRLP, including
without limitation, the United States of America, the States of New York and New
Jersey or any political subdivision of any of the foregoing, or any decision or
ruling of any arbitrator to which Xxxx-Xxxx or MCRLP is a party or by which
Xxxx-Xxxx or MCRLP is bound or affected.
(9) (1) Xxxx-Xxxx (A) intends to file its federal income
tax return for the tax year that will end on December 31, 1997, as a real estate
investment trust ("REIT") within the meaning of Section 856 of the Internal
Revenue Code of 1986, as amended (the "Code"), (B) has complied with all
applicable provisions of the Code which would have enabled it to qualify as a
REIT for 1995 and 1996, (C) has operated, and intends to continue to operate, in
such a manner so as to enable it to qualify as a REIT for 1998 and subsequent
years, and (D) has not taken or omitted to take any action which would
reasonably be expected to cause its disqualification as a REIT, and no challenge
to its REIT status is pending or, to Xxxx-Xxxx'x knowledge, threatened.
(2) Xxxx-Xxxx has timely filed with the
appropriate Governmental Authority all Tax Returns required to be filed by it or
has timely requested extensions and any such request has been granted and has
not expired. Each such Tax Return is true and correct in all material respects.
All Taxes shown as owed by Xxxx-Xxxx or any of its Subsidiaries on any Tax
Return have been paid or accrued, except for Taxes being contested in good faith
and for which adequate reserves have been established. None of Xxxx-Xxxx or any
of its Subsidiaries has executed or filed with the Internal Revenue Service or
any other taxing authority any agreement now in effect extending the period for
assessment or collection of any Tax.
(3) To its knowledge, as of the date hereof, Xxxx-
Xxxx is a "domestically-controlled" REIT within the meaning of Section
897(h)(4)(B) of the Code.
(10) All of Xxxx-Xxxx'x real property and other material
assets are owned by Xxxx-Xxxx indirectly through its ownership of MCRLP and
MCRLP's Subsidiaries.
(11) Neither Xxxx-Xxxx nor MCRLP has made a general
assignment for the benefit of creditors, filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by either of
Xxxx-Xxxx'x or MCRLP's creditors, suffered the appointment of a receiver to take
possession of all, or substantially all, of Xxxx-Xxxx'x or MCRLP's assets,
suffered the attachment or other judicial seizure of all, or substantially all,
of Xxxx-Xxxx'x or MCRLP's assets, admitted in writing its inability to pay its
debts as they come due or made an offer of settlement, extension or composition
to its creditors generally.
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(12) As used throughout this Agreement, the phrases "to
Xxxx-Xxxx'x knowledge," "to the knowledge of Xxxx-Xxxx," "to the best of
Xxxx-Xxxx'x knowledge" "to MCRLP's knowledge," "to the knowledge of MCRLP," "to
the best of MCRLP's knowledge" or any similar derivation thereof, shall mean the
actual (not constructive) knowledge Xxx Xxxxx, Xxxx XxXxxx, Xxxxxx Xxxxxx,
Xxxxxx Xxxxxxxxx, Xxxxx X. Xxxxxx, and Xxxxx Xxxxx, without having undertaken
any independent investigation of facts or legal issues without having any duty
to do so, and without imputing to the aforementioned persons the knowledge of
any employee, agent, representative or affiliate of Xxxx-Xxxx, MCRLP or of any
other person or entity.
ii. Each of Xxxx-Xxxx and MCRLP acknowledges that it is not in
a significantly disparate bargaining position with respect to Contributor in
connection with the transaction contemplated by this Agreement and that
Xxxx-Xxxx and MCRLP were represented by legal counsel in connection with this
transaction.
iii. All representations and warranties made by Xxxx-Xxxx and
MCRLP in this Agreement shall survive the Closing Date for a period of eighteen
(18) months, except that the representations and warranties set forth in clauses
(a) and (b) of Section 6.1 shall survive the Closing Date for the applicable
period of the statute of limitations (unless otherwise specified herein), and
shall not be merged in the Assignment of Contributor's Interest. Xxxx-Xxxx and
MCRLP agree to indemnify and defend Contributors, and to hold Contributors
harmless, from and against any and all claims, liabilities, losses, deficiencies
and damages as well as reasonable expenses (including attorney's, consulting and
engineering fees), and interest and penalties related thereto, incurred by
Contributors by reason of or resulting from any breach, inaccuracy,
incompleteness or non-fulfillment of the representations, warranties, covenants
and agreements of Xxxx-Xxxx and MCRLP contained in this Agreement.
Notwithstanding the foregoing, the partners and/or shareholders of MCRLP and
Xxxx-Xxxx shall have no liability for any loss resulting from any breach of the
foregoing representations and warranties. In addition, Contributors shall not
have a right to bring a claim against Xxxx-Xxxx or MCRLP by virtue of any of the
representations or warranties being false or misleading unless and until (a)
such false or misleading representation or warranty has a material adverse
affect on the transactions contemplated herein; and (b) the aggregate damages to
Contributors is reasonably expected to exceed $100,000.00, but thereafter
Contributors may bring a claim against Xxxx-Xxxx or MCRLP for the entire amount
of their aggregate damages.
g. INTERIM OPERATING COVENANTS OF CONTRIBUTORS.
i. Contributors covenant and agree that between the date
hereof and the Closing Date (the "Interim Period"), they shall perform or
observe or cause PDPII to perform or observe the following with respect to the
Real Property:
(1) PDPII will complete any capital expenditure program
currently in process or anticipated to be completed. PDPII and Contributors will
not defer taking
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any actions or spending any of its funds, or otherwise manage the Real Property
differently, due to the transaction contemplated by this Agreement.
(2) PDPII, as landlord, will not enter into any new
leases with respect to the Property, or renew or modify any Lease, without
MCRLP's prior written consent; provided, however that PDPII shall be permitted
to enter into new leases, renewals or modifications upon prior notice to, but
without the prior written consent of MCRLP, so long as such lease, renewal or
modification is on market terms and conditions with bona fide third parties and
is the type of transaction which PDPII currently enters into in the ordinary
course of its business.
(3) PDPII shall comply with and/or remedy all violations
of statutes, ordinances, rules, regulations, orders, codes, directives or
requirements affecting the Real Property, whether or not such violations are now
noted in the records of or have been issued by any Governmental Authorities
prior to the Closing, and the Real Property shall be conveyed free of any such
violations, including, without limitation, violations of Environmental Laws.
(4) Neither PDPII nor any Contributors shall:
(a) Enter into any agreement requiring PDPII to do
work for any Tenant after the Closing Date without first obtaining the prior
written consent of MCRLP, unless such agreement is on market terms and
conditions with bona fide third parties and is the type of agreement which PDPII
currently enters into in the ordinary course of its business, in which case no
consent of MCRLP will be required; or
(b) Accept the surrender of any Service Contract
or Lease, or grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third parties and
upon prior written notice to MCRLP.
(c) Intentionally Deleted.
(5) PDPII shall not, between the date hereof and the
Closing Date, apply any Security Deposits with respect to any Tenant in
occupancy on the Closing Date, except in its ordinary course of business. PDPII
and Contributors shall provide MCRLP with an updated schedule of Security
Deposits at the Closing.
(6) Between the date hereof and the Closing Date, PDPII
will not renew, extend or modify any of the Service Contracts without the prior
written consent of MCRLP unless such is done by PDPII in the ordinary course of
its business and such Service Contracts contain a right to terminate on thirty
(30) days' notice with no material cost to exercise such right, in which case no
consent of MCRLP will be required.
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(7) PDPII and Contributors shall not remove or permit
the removal of any Personal Property located in or on the Property, except as
may be required for repair and replacement. All replacements shall be free and
clear of liens and encumbrances except to the extent the original Personal
Property was so encumbered and shall be of quality at least equal to the
replaced items and shall be deemed included in this sale, without cost or
expense to MCRLP, other than expressly provided herein.
(8) PDPII and Contributors shall, upon request of MCRLP
at any time after the date hereof, assist MCRLP in its preparation of audited
financial statements, statements of income and expense, and such other
documentation as MCRLP may reasonably request, covering the period of PDPII's
ownership of the Real Property.
(9) Between the date hereof and the Closing Date, PDPII
will make all required payments under any mortgage affecting the Real Property
within any applicable grace period, but without reimbursement by MCRLP therefor.
PDPII shall also comply with all other material terms covenants and conditions
of any mortgage on the Real Property.
(10) PDPII shall not cause or permit the Real Property
or any interest therein (including without limitation the Improvements or the
Contributors' Interests), to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred.
(11) PDPII agrees to maintain and keep in full force and
effect the hazard, liability and casualty insurance policies it is currently
maintaining, which policies Contributors represent are sufficient to protect, to
a reasonable and prudent extent, the owner of the Property, in such amounts as
are required so as not to be deemed a co-insurer, and for actual replacement
cost, against any loss, damage, claim or liability.
(12) PDPII and Contributors shall permit MCRLP and its
authorized representatives to inspect the Books and Records of their operations
at all reasonable times upon reasonable notice. All Books and Records not
conveyed to MCRLP hereunder shall be maintained for MCRLP's inspection at each
Contributor's address as set forth in Exhibit A hereto.
(13) PDPII and Contributors shall:
(a) promptly notify MCRLP of, and promptly deliver
to MCRLP, a certified true and complete copy of any notice PDPII or Contributors
may receive, on or before the Closing Date from any Governmental Authority
concerning a violation of Environmental Laws or Discharge of Contaminants;
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(b) contemporaneously with the signing and
delivery of this Agreement, and subsequently promptly upon receipt by PDPII or
its representatives, deliver to MCRLP a certified true and complete copy of all
Environmental Documents; and
(c) timely provide MCRLP with drafts of any
pertinent documentation in connection with leasing matters, Service Contracts
and agreements for work to be done on behalf of Tenants and shall keep MCRLP
informed of all substantive negotiations and discussions with respect to the
foregoing matters on an on-going basis.
ii. Prior to the Closing, Contributors shall deliver to
MCRLP reviewed Property Financials as set forth in Section 5.1(v). Within thirty
(30) days after the Closing Date, Contributors shall deliver to MCRLP Property
Financials, as set forth in Section 5.1(v), through the Closing Date. The
provisions of this Section 7.2 shall survive the Closing Date.
iii. Intentionally Deleted.
iv. Intentionally Deleted.
v. PDPII and Contributors will timely pay all Taxes due
and payable by each of them during the Interim Period. PDPII and Contributors
will timely file all Tax Returns required to be filed by them during the Interim
Period. Each such Tax Return will be complete and accurate in all respects and
will be filed on a basis consistent with past practice. A copy of all such Tax
Returns shall be delivered to Xxxx-Xxxx at least three (3) days prior to such
Tax Returns being filed. The obligations set forth in this Section 7.5 shall
survive the expiration or earlier termination of this Agreement and/or shall
survive the Closing Date for the applicable period of the statute of
limitations.
h. INTENTIONALLY DELETED.
i. ESTOPPEL CERTIFICATES.
i. Contributors agree to deliver to each Tenant, no later than
the date hereof, an estoppel certificate in the form annexed hereto as Exhibit
9.1 for Tenant's execution, completed to reflect Tenant's particular Lease
status. Contributors agree to use commercially reasonable efforts to obtain from
all Tenants the estoppel certificates in such form; provided, however, that if
any Tenant shall refuse to execute an estoppel letter in such form, Contributors
shall nevertheless use commercially reasonable efforts to obtain estoppel
certificates in the form in which each Tenant is obligated to deliver the same
as provided in its Lease. Contributors agree to deliver to MCRLP copies of all
estoppel letters received by Tenants, in the form received by PDPII or
Contributors. The estoppel certificates required to be obtained pursuant to this
Section 9.1 are collectively referred to as the "Estoppel Certificates".
85
ii. As a condition to the Closing, Contributors shall deliver
(a) an Estoppel Certificate from all Tenants which lease space at the Real
Property in excess of 10,000 square feet or more in the aggregate, and (b)
Estoppel Certificates from the remaining Tenants leasing in the aggregate at
least seventy-five (75%) percent of the square footage of the Real Property
including the Tenants set forth in Clause 9.2(a) above.
iii. For an Estoppel Certificate to be deemed delivered for
purposes of this Agreement, it must certify that Tenant's most recent rental
payment under its Lease was made not more than one (1) month prior to the month
in which the Closing occurs.
j. CLOSINGS.
i. (a) Closing. The consummation of the transactions
contemplated hereunder with respect to the Property (the "Closing") shall take
place at the offices of Brownstein, Hyatt, Xxxxxx & Xxxxxxxxxx, P.C., 000
Xxxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxx, 00000-0000, on or about March
25, 1998 (the "Closing Date"). Upon notice to Contributors, MCRLP may elect to
accelerate the Closing Date to a date not less than five (5) days after the date
of MCRLP's notice.
(2) Intentionally Deleted.
(3) Intentionally Deleted.
(4) Intentionally Deleted.
ii. On the Closing Date, except as otherwise set forth in
subsections 10.2(z) and 10.2(aa), Contributor, at its sole cost and expense,
will deliver or cause to be delivered to MCRLP the following documents, fully
executed by all parties thereto other than MCRLP or parties claiming by, through
or under MCRLP:
(1) Duly executed and acknowledged assignments from each
Contributor of such Contributor's Interest (the "Interest Assignments"), in the
form annexed hereto as Exhibit 10.2(a), to MCRLP or its designee, as assignee,
together with all applicable and requisite consents, mortgagee consents and
resolutions authorizing the assignment and transaction.
(2) All original Leases and all other documents
pertaining thereto, and certified copies of such Leases or other documents where
Contributors, using their best efforts, are unable to deliver originals of the
same.
(3) All other original documents or instruments referred
to herein, including without limitation the Service Contracts, Licenses and
Permits and Books and
86
Records, and certified copies of the same where Contributors, using their best
efforts, are unable to deliver originals of the same.
(4) Intentionally Deleted.
(5) Intentionally Deleted.
(6) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f).
(7) Intentionally Deleted.
(8) Affidavits and indemnities required by the Title
Company in connection with non-imputation title insurance endorsements and such
other documents and instruments required by the Title Company, executed by
Contributors certifying (i) against any work done or supplies delivered to the
Real Property which might be grounds for a materialman's or mechanic's lien
under or pursuant to Colorado Lien Law, in form sufficient to enable the Title
Company to affirmatively insure MCRLP against any such lien, (ii) that the
signatures on the Interest Assignments are sufficient to bind Contributors and
convey the Contributors' Interest to MCRLP, (iii) the Rent Roll, and (iv) that
Contributors shall indemnify the Title Company against any loss resulting from
the imputation of knowledge to MCRLP, or Xxxx-Xxxx through Contributors.
(9) Affidavits and other instruments, including but not
limited to all organizational documents of PDPII and PDPII's members, as
applicable, including PDPII's operating agreements, filed copies of the articles
of organization and good standing certificates (or its equivalent), reasonably
requested by MCRLP and the Title Company evidencing the power and authority of
PDPII and Contributors to enter into this Agreement and any documents to be
delivered hereunder, and the enforceability of the same.
(10) The original Estoppel Certificates.
(11) A list of all cash security deposits and all
non-cash security deposits (including letters of credit) delivered by Tenants
under the Leases, together with other instruments of assignment, transfer or
consent as may be necessary to permit MCRLP to realize upon the same and as may
be required by the issuing banks of any cash and non-cash security deposits to
reflect a change in the beneficial interest of the PDPII and changes in
signatories to the bank accounts holding the cash and non-cash security
deposits.
(12) A certificate indicating that the representations
and warranties of PDPII and Contributors made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
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(13) A Rent Roll for the Property, current as of the
Closing Date, certified by PDPII and Contributors as being true and correct in
all material respects.
(14) All proper instruments as shall be reasonably
required for the conveyance to MCRLP of all right, title and interest, if any,
of PDPII and Contributors in and to any award or payment made, or to be made,
(i) for any taking in condemnation, eminent domain or agreement in lieu thereof
of land adjoining all or any part of the Improvements, (ii) for damage to the
Land, or Improvements or any part thereof by reason of change of grade or
closing of any such street, road, highway or avenue, and (iii) for any taking in
condemnation or eminent domain of any part of the Land and Improvements.
(15) In order to avoid the imposition of the withholding
tax payment pursuant to Section 1445 of the Code, a certificate which is in a
form acceptable to Xxxx-Xxxx and which is signed by each Contributor (or an
appropriate officer of each Contributor that is an entity) to the effect that
such Contributor is not a "foreign person" as that term is defined in Section
1445(f)(3) of the Code.
(16) All such transfer and other tax declarations and
returns and information returns, duly executed and sworn to by Contributors as
may be required of Contributors by law in connection with the transfer of
Contributors' Interests to MCRLP, including but not limited to, Internal Revenue
Service forms and the declaration required to be filed pursuant to Title 39,
Article 14 of the Colorado Revised Statutes.
(17) A statement setting forth all adjustments and
prorations shown thereon.
(18) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
(19) Estoppel certificates addressed to MCRLP from the
mortgagees of the mortgages, if any, in form and substance reasonably acceptable
to MCRLP.
(20) An opinion of counsel from Brownstein, Hyatt,
Xxxxxx & Xxxxxxxxxx, P.C., substantially in the form of Exhibit 10.2(t)
regarding the due execution, delivery, and enforceability of this Agreement, the
foregoing documents and the contribution by each Contributor of its
Contributor's Interest to MCRLP.
(21) Duly executed and acknowledged Indemnity Agreement
substantially in the form of Exhibit 5.3.
(22) Intentionally Deleted.
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(23) A Registration Rights Agreement substantially in
the form of Exhibit 10.3(g).
(24) Intentionally Deleted.
(25) Such other documents as may be reasonably required
by MCRLP or as may be appropriate to effectuate the consummation of the
transactions contemplated by this Agreement.
(26) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth, with respect to each Contributor that will
receive Contributor Units as part of the consideration: (i) the identity of such
Contributors and the amount of Contributor Units so allocated to any such
Contributor; (ii) the gross fair market value of the interest that such
Contributor is transferring to MCRLP for purposes of determining the gain or
loss that will be recognized for federal income tax purposes as a result of the
transfer; (iii) the adjusted basis of such interest immediately prior to the
contribution; (iv) the amount of cash and Contributor Units allocated to such
interest; and (v) the amount of any liability relating to such interest that
MCRLP will either assume or to which such interest will be subject and which
does not constitute a "qualified liability" within the meaning of Treasury
Regulations Section 1.707-5(a)(6).
(27) At least fifteen (15) days prior to the Closing
Date, a schedule setting forth: (i) any Contributor named for purposes of
Section 10.2(z)(i) which is to receive less than the full amount of Contributor
Units indicated for purposes of Section 10.2(z)(i); and (ii) the names of those
persons who are to receive Contributor Units that each such Contributor would
otherwise be entitled to receive and the amount of units that any such persons
are to receive. At least fifteen (15) days prior to the Closing Date, each
Contributor to which this Section 10.2(aa) is relevant shall issue "direction
letters" to MCRLP (in the form acceptable to MCRLP), to the effect that each
such Contributor authorizes the issuance by MCRLP of Contributor Units directly
to such persons (and in such amounts) which are set forth for purposes of
Section 10.2(aa)(ii).
(28) A letter from each applicable municipal department
or agency having jurisdiction that the Property is in compliance with the laws,
codes, rules, regulations and ordinances regarding (i) zoning, (ii) building,
(iii) health and (iv) fire, life and safety.
(29) A computer diskette containing any closing or other
documents executed in connection with this transaction and prepared by PDPII,
Contributors or their counsel, in WordPerfect or Microsoft Word format.
(30) All original organizational documents relating to
PDPII and the Contributors, and all statements of accounts, books and records
and insurance policies.
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(31) A certificate executed by each Contributor Unit
Holder and each Contributor receiving Contributor Units, substantially in the
form of Schedule 10.2(ee).
(32) A counterpart to the OP Agreement substantially in
the form of Exhibit 10.2(ff), executed by each Contributor Unit Holder and each
Contributor receiving Contributor Units.
iii. On the Closing Date, Xxxx-Xxxx and MCRLP, at their sole
cost and expense, will deliver or cause to be delivered to Contributors the
following documents, fully executed by all parties thereto other than
Contributors or parties claiming by, through or under Contributors:
(1) The Cash Payment, net of adjustments and prorations.
(2) The Permanent Certificates representing, in the
aggregate, the Contributor Units.
(3) Intentionally Deleted.
(4) Duly executed and acknowledged Omnibus Assignment in
the form of Exhibit 10.2(f) annexed hereto.
(5) A certificate indicating that the representations
and warranties of Xxxx-Xxxx and MCRLP made in this Agreement are true and
correct as of the Closing Date or if there have been any changes, a description
thereof.
(6) Affidavits and other instruments, including but not
limited to all organizational documents of Xxxx-Xxxx and MCRLP including limited
partnership agreements, filed copies of limited partnership certificates,
articles of organization, and good standing certificates, reasonably requested
by Contributors evidencing the power and authority of Xxxx-Xxxx and MCRLP to
enter into this Agreement and any documents to be delivered hereunder, and the
enforceability of the same.
(7) A Registration Rights Agreement substantially in the
form of Exhibit 10.3(g).
(8) Intentionally Deleted.
(9) A Tradenames Assignment Agreement substantially in
the form of Exhibit 10.2(r).
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(10) Intentionally Deleted.
(11) Duly executed and acknowledged Interest Assignments
in the form of Exhibit 10.2(a).
(12) Such other documents as may be reasonably required
or appropriate to effectuate the consummation of the transactions contemplated
by this Agreement.
iv. Contributor shall pay for the premium charges and costs
for title insurance policies (but not any endorsements to such policies required
by Xxxx-Xxxx); all survey costs; all costs incurred to repay or satisfy any and
all liens; all costs incurred with respect to non-imputation endorsements to
title insurance policies obtained by MCRLP; all leasing commissions due to
Tenants in connection with the initial and/or current terms of their respective
Leases; all costs of tenant improvement concessions due to Tenants in connection
with the initial and/or current terms of their respective Leases; and all
customary prorations and apportionments. Xxxx-Xxxx shall pay for the costs of
all customary documentary and recording fees, if any; the cost of any
endorsements to its title insurance policies (with the exception of any
non-imputation endorsements); all due diligence investigations costs (including,
without limitation, the cost of all Phase I Reports for the Property, which
environmental assessment reports shall be dated no more than thirty (30) days
prior to the Closing Date); and all customary prorations and apportionments.
Each party shall be responsible for its own attorney's fees. The provisions of
this Section 10.4 shall survive the Closing.
v. The Closing shall be consummated without compliance with
bulk sales laws. If by reason of any applicable bulk sales law, any claims are
asserted by creditors of Contributors related to periods prior to the Closing,
such claims shall be the responsibility of Contributors, and Contributors shall
jointly and severally indemnify, defend and hold harmless MCRLP (and its
respective directors, officers, employees, affiliates, successors and assigns)
from and against all losses or liabilities, if any, based upon, arising out of
or otherwise in respect of the failure to comply with such bulk sales laws.
vi. Xxxx-Xxxx and MCRLP acknowledge and agree that, except as
set forth in this Agreement, MCRLP is acquiring the Property in its "as is"
condition "subject to all faults" and specifically and expressly without any
warranties, representations or guarantees, either express or implied, of any
kind, nature, or type whatsoever from or on behalf of Contributors. Xxxx-Xxxx
and MCRLP acknowledge that except for documents, reports and information related
to the environmental integrity of the Real Property, neither Xxxx-Xxxx nor MCRLP
has relied and is not relying on any information, document, reports, sales
brochure or other literature, maps or sketches, financial information,
projections, pro formas or statements, that may have been given by or made by or
on behalf of Contributors with respect to the Property. MCRLP and Xxxx-Xxxx
further acknowledge that all materials relating to the Property which have been
provided by Contributors, including but not limited to, the Phase I Reports,
have been provided without any warranty or
91
representation, expressed or implied as to their content, suitability for any
purpose, accuracy, truthfulness or completeness and neither MCRLP nor Xxxx-Xxxx
shall have any recourse against Contributors or its counsel, advisors, agents,
officers, directors or employees for any information in the event of any errors
therein or omissions therefrom.
Contributors do not warrant or make any representation,
express or implied, as to the merchantability, quantity, quality, condition,
suitability or fitness of the Property for any purpose whatsoever, including,
without limitation, its compliance with applicable building codes and
ordinances, zoning laws, environmental laws including, without limitation, the
Clean Air Act, CERCLA and the Super Fund Amendments and Reauthorization Act
("XXXX"), the Americans with Disabilities Act, and any other federal, state or
local statutes, codes or ordinances. MCRLP also acknowledges and agrees that (i)
the representations and warranties of Contributors in Section 5 of this
Agreement and (ii) provisions in this Agreement for delivery of existing Phase I
Reports and inspection and investigation of the Property are adequate to enable
MCRLP to make MCRLP's own determination with respect to the suitability or
fitness of the Property, including, without limitation, its compliance with
applicable building codes and ordinances, zoning laws, environmental laws
including, without limitation, the Clean Air Act, CERCLA and XXXX, the Americans
with Disabilities Act, and any other federal, state or local statutes, codes or
ordinances.
Except to the extent (a) caused by a breach of any of
Contributors' representations hereunder; (b) related to claims by or liabilities
to third parties unrelated to Xxxx-Xxxx or MCRLP; or (c) as otherwise expressly
set forth herein, including, without limitation, as indemnified under the
Indemnity Agreement, MCRLP and Xxxx-Xxxx, for themselves and their successors
and assigns, hereby release each of the Contributors, and their agents,
employees, partners, officers, directors, members, managers, contractors,
consultants and representatives from, and waive any and all causes of action or
claims against any of such persons for (i) any and all liability attributable to
any physical condition of or at the Property, including, without limitation, the
presence on, under or about the Property of any materials the release or storage
of which is regulated by law; (ii) any and all liability resulting from the
failure of the Property to comply with any applicable laws; and (iii) any
liabilities, damages or injury arising from, connected with or otherwise caused
by statements, opinions or information obtained from any of such persons with
respect to the Property.
k. ADJUSTMENTS.
i. The following items under (a) through (g) with respect to
the Real Property are to be apportioned as of midnight on the date preceding the
Closing:
(1) Rents, escalation charges and percentage rents
payable by Tenants as and when collected. All moneys received from Tenants from
and after the Closing shall belong to MCRLP and shall be applied by MCRLP to
current rents and other charges under the
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Leases. After application of such moneys to current rents and charges, MCRLP
agrees to remit to Contributors any excess amounts paid by a Tenant to the
extent that such Tenant was in arrears in the payment of rent prior to the
Closing.
(2) A cashier's or certified check or wire transfer to
the order of MCRLP in the amount of all cash Security Deposits and any prepaid
rents, together with interest required to be paid thereon. At the election of
MCRLP, such amount may be allotted to MCRLP as a credit against the Cash
Payment.
(3) Utility charges payable by PDPII, including without
limitation, electricity, water charges and sewer charges. If there are meters on
the Real Property, Contributors will cause readings of all said meters to be
performed not more than ten (10) days prior to the Closing Date.
(4) Amounts payable under the Service Contracts other
than those Service Contracts which MCRLP has elected not to assume.
(5) Real estate taxes due and payable for the calendar
year. If the Closing Date shall occur before the tax rate is fixed, the
apportionment of real estate taxes shall be upon the basis of the tax rate for
the preceding year applied to the latest assessed valuation.
(6) The value of fuel stored at any of the Real
Property, at PDPII's most recent cost, including taxes, on the basis of a
reading made within fifteen (15) days prior to the Closing by PDPII's supplier.
(7) Intentionally Deleted.
ii. Intentionally Deleted.
iii. At the Closing, Contributors shall deliver to MCRLP a
list of additional rent, however characterized, under all Leases, including
without limitation, real estate taxes, electrical charges, utility costs and
operating expenses (collectively, "Additional Rents") billed to Tenants for the
calendar year 1998 (both on a monthly basis and in the aggregate), the basis for
which the monthly amounts are being billed and the amounts incurred by PDPII on
account of the components of Additional Rent for calendar year 1998. Upon the
reconciliation by MCRLP of the Additional Rents billed to Tenants, and the
amounts actually incurred for calendar year 1998, Contributors and MCRLP shall
be liable for overpayments of Additional Rents, and shall be entitled to
payments from Tenants, as the case may be, on a pro rata basis based upon each
party's period of ownership during calendar year 1998. Notwithstanding the
foregoing, the calculation of real estate taxes, and the collection of
Additional Rents from Tenants attributable to such real estate taxes, as
reflected on the closing statement related hereto, shall be final as of the
Closing Date.
93
iv. Intentionally Deleted.
v. If, on the Closing Date, the Property or any part thereof
shall be or shall have been affected by an assessment or assessments which are
or may become payable in annual installments, all the unpaid installments of any
such assessment due and payable on or prior to the Closing Date shall be paid
and discharged by Contributors on the Closing Date.
vi. Except as otherwise provided in this Agreement, the
adjustments shall be made in accordance with the customs in respect to title
closings in the State of Colorado.
vii. Any errors in calculations or adjustments shall be
corrected or adjusted as soon as practicable after the Closing.
viii. The provisions of this Section 11 shall survive the
Closing Date.
l. CONDITIONS PRECEDENT TO CLOSING.
i. The obligations of Contributors to deliver the
Contributors' Interests and to perform the other covenants and obligations to be
performed by Contributors on the Closing Date shall be subject to the following
conditions (all or any of which may be waived, in whole or in part, by
Contributor):
(1) The representations and warranties made by MCRLP and
Xxxx-Xxxx herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that a failure of any
representations or warranties to be true and correct in all material respects
shall not give rise to a claim by Contributors hereunder so long as such matters
do not have a material adverse effect on the transactions contemplated herein.
(2) MCRLP and Xxxx-Xxxx shall have executed and
delivered to Contributors all of the documents provided herein for said
delivery.
(3) Intentionally Deleted.
(4) Xxxx-Xxxx and MCRLP shall have performed all
covenants and obligations undertaken by Xxxx-Xxxx and MCRLP herein in all
material respects and complied with all material conditions required by this
Agreement to be performed or complied with by them on or before the Closing
Date.
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ii. The obligations of Xxxx-Xxxx and MCRLP to deliver the
Permanent Certificates to Contributor Unit Holders and to accept the
Contributors' Interests and Xxxx-Xxxx'x and MCRLP's obligation to perform the
other covenants and obligations to be performed by Xxxx-Xxxx and MCRLP on the
Closing Date shall be subject to the following conditions (all or any of which
may be waived, in whole or in part, by Xxxx-Xxxx or MCRLP):
(1) Subject to Section 5.5(a) the representations and
warranties made by PDPII and Contributors herein shall be true and correct in
all material respects with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date. For
the purposes of the Closing condition described in this Section 12.2(a), any
limitation to the knowledge, best knowledge, or actual knowledge in any
representation, warranty, covenant or agreement made by PDPII and Contributors
herein shall be inapplicable.
(2) Contributors shall have performed all covenants and
obligations undertaken by Contributors herein in all respects and complied with
all conditions required by this Agreement to be performed or complied with by it
on or before the Closing Date.
(3) The Title Company is unconditionally prepared to
issue to MCRLP a Title Policy meeting the requirements set forth in Section 4
hereof for an "insurable title".
(4) The Real Property shall be in compliance with all
Environmental Laws.
(5) Contributors shall have executed and delivered to
MCRLP all of the documents or other requisite documents provided for herein for
said delivery.
m. INTENTIONALLY DELETED.
n. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
All leasing commissions due on account of the original term of
all Leases made before the date of this Agreement and extensions and renewals
which are presently effective (but not renewals or extensions of such leases
which are exercised after the Closing Date) shall be paid by Contributor. MCRLP
shall be credited at Closing as set forth on Schedules 5.1(f) and 5.1(m)
respectively with respect to certain tenant improvement and leasing commission
obligations, but Contributors shall remain liable for any amounts due and owing
in excess of such credits. All leasing commissions on account of extensions or
renewals of Leases made after the Closing Date shall be paid by MCRLP. All
tenant improvements obligations shall be satisfied prior to the Closing Date.
The provisions of this Section shall survive the Closing.
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o. ASSIGNMENT.
This Agreement may not be assigned by Xxxx-Xxxx or MCRLP
except to a directly or indirectly wholly-owned subsidiary or subsidiaries of
Xxxx-Xxxx or MCRLP, or to a partnership in which any such wholly-owned
subsidiary or subsidiaries owns, either directly or indirectly, at least
seventy-five (75%) percent of the profits, losses and cash flow thereof and
controls the management of the affairs of such partnership (any such entity, a
"Permitted Assignee") and any other assignment or attempted assignment by
Xxxx-Xxxx or MCRLP shall be deemed null and void and of no force and effect.
Notwithstanding anything to the contrary contained herein, Xxxx-Xxxx or MCRLP
may assign the Contributors' Interests to various entities, provided that each
of such entities is a Permitted Assignee. A copy of any assignment permitted
hereunder, together with an agreement of the assignee assuming all of the terms
and conditions of this Agreement to be performed by Xxxx-Xxxx or MCRLP with
respect to the portion of the Real Property, in form reasonably satisfactory to
counsel for Contributors, shall be delivered to the attorneys for Contributors
prior to the Closing, and in any event, no such assignment shall relieve
Xxxx-Xxxx and MCRLP from their obligations under this Agreement.
p. BROKER.
Xxxx-Xxxx, MCRLP, and Contributors represent that, with the
exception of Sonnenblick Xxxxxxx Ltd. , Conning Asset Management, Inc. and
Pacifica Holding Company LLC (collectively, "Brokers") they have not dealt with
any brokers, finders or salesmen, in connection with this transaction, and agree
to indemnify, defend and hold each other harmless from and against any and all
loss, cost, damage, liability or expense, including reasonable attorneys' fees,
which they may sustain, incur or be exposed to by reason of any breach of the
foregoing representation and warranty. Notwithstanding the foregoing,
Contributors shall pay in full any commission, fee or other compensation due the
Brokers pursuant to separate agreements, and Guarantor and Contributors agree to
indemnify, defend and hold MCRLP and Xxxx-Xxxx harmless from and against any and
all loss, cost, damage, liability, or expense, including reasonable attorneys'
fees, which MCRLP or Xxxx-Xxxx may sustain, incur or be exposed to by reason of
Contributor's failure to pay in full the Brokers pursuant to such separate
agreements. The provisions of this Section shall survive the Closing and/or
other termination of this Agreement.
q. CASUALTY LOSS.
i. Subject to Section 7.1(h), PDPII and Contributors shall
continue to maintain, or cause any Tenant to maintain, in all material respects,
the fire and extended coverage insurance policies with respect to the Property
(the "Insurance Policies") which are currently in effect, through the date that
said coverage currently expires, which obligation shall survive the Closing.
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ii. If at any time prior to the Closing Date, all or any
portion of the Property is destroyed or damaged as a result of fire or any other
casualty (a "Casualty"), Contributors shall promptly give written notice
("Casualty Notice") thereof to MCRLP. Within ten (10) days after the receipt of
the Casualty Notice, MCRLP and Xxxx-Xxxx shall have the right, at their sole
option, to terminate this Agreement with respect to said Property by written
notice to Contributors. Notwithstanding the foregoing, MCRLP and Xxxx-Xxxx shall
not have the right to terminate this Agreement, if (a) Contributors' insurance
fully covers the damage resulting from the Casualty; (b) the proceeds of any
insurance, together with a credit equal to Contributors' deductible under the
Insurance Policies, shall be paid to MCRLP at the time of the Closing; and (c)
all unpaid claims and rights in connection with losses to the Property shall be
assigned to MCRLP at the Closing without in any manner affecting the Exchange
Consideration hereunder. Contributor represents that the insurance maintained by
it is customary and prudent for the assets owned by it.
iii. If the Property is the subject of a Casualty but MCRLP
does not terminate this Agreement pursuant to the provisions of this Section,
then Contributors shall, prior to the Closing Date, cause all temporary repairs
to be made to the Property as shall be required to prevent further deterioration
and damage to the Property and to protect public health and safety; provided,
however, that any such repairs shall first be approved by MCRLP. Contributors
shall have the right to be reimbursed from the proceeds of any insurance with
respect to the Property for the cost of such temporary repairs.
r. CONDEMNATION.
In the event of a material taking (as defined in this Section
18), MCRLP and Xxxx-Xxxx shall have the right, at their sole option, to either
(a) terminate this Agreement by giving Contributors written notice to such
effect at any time after its receipt of written notification of any such
occurrence, or (b) accept title to the remainder of the Property without
reduction of any consideration given hereunder. Should MCRLP or Xxxx-Xxxx so
terminate this Agreement in accordance with this Section, neither party shall
have any further liability or obligations to the other. In the event MCRLP and
Xxxx-Xxxx shall not elect to cancel this Agreement, Contributors shall, subject
to the rights of the holder of any existing mortgage, assign all proceeds of
such taking to MCRLP, and the same shall be MCRLP's sole property, and MCRLP
shall have the sole right to settle any claim in connection with the Property.
The term "material taking" shall be defined to mean the institution of any
proceedings, judicial, administrative or otherwise which involve (a) the taking
of a portion of Real Property such that ingress and egress to such Real Property
is impaired, (b) the taking of a portion of the parking spaces of a Real
Property such that after such taking the Real Property will not be in compliance
with local zoning regulations regarding adequate parking, or (c) the taking of
any part of a Building.
s. TRANSFER RESTRICTIONS.
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i. Contributors hereby agree that the Contributor Units may
not be sold, assigned, transferred, pledged, encumbered or in any manner
disposed of (collectively, "Transferred") or redeemed for shares of Common Stock
until the first anniversary of the Closing Date. Thereafter, the Contributor
Units and/or the shares of Common Stock underlying the Contributor Units (the
"Underlying Shares") may only be transferred (i) privately in accordance with
the terms of the OP Agreement and this Section 19, or (ii) publicly (subject to
the restrictions of the Act and the rules and regulations promulgated
thereunder) in trading blocks of 150,000 shares of Common Stock or less, in any
single day. Notwithstanding anything herein to the contrary, the provisions of
this Section 19 shall not apply to (i) pledges or encumbrances of all or a
portion of the Contributor Units to an institutional lender, or (ii) Transfers
of all or any portion of the Contributor Units to permitted transferees as set
forth in the OP Agreement (the "Permitted Transferees"). Any holder of
Contributor Units pursuant to (i) or (ii) of the preceding sentence shall be
subject to the terms and conditions of the OP Agreement.
ii. If any of the Unit Holders, or any of their Permitted
Transferees (each a "Seller") receives a bona fide written offer to purchase
part or all of its Contributor Units or Underlying Shares in a privately
negotiated transaction which it desires to accept, such Seller shall not sell,
transfer, or otherwise dispose of (the "Proposed Disposition") such Units or
Underlying Shares (the "Disposition Securities") to a third party (the
"Purchaser"), unless prior to such Proposed Disposition, such Seller shall have
promptly reduced the terms and conditions, if any, of the Proposed Disposition
to a reasonably detailed writing and shall have delivered written notice (the
"Disposition Notice") of such Proposed Disposition to MCRLP. The Disposition
Notice shall identify the Purchaser, the Disposition Securities, the
consideration and method of payment contemplated by the Proposed Disposition and
all other terms and conditions, if any, of the Proposed Disposition.
iii. Xxxx-Xxxx shall not sell the Property within four (4)
years from the date of the Closing (the "Restricted Period") without the prior
written consent of Contributors, other than (1) in connection with a transaction
which does not result in recognition of gain by the Contributors; (2) a sale of
any of the Property set forth in Schedule 19.3 hereto; (3) as determined by the
Board of Directors of Xxxx-Xxxx (the "Board") as necessary to satisfy any
material monetary default on any mortgage secured by the Property; (4) as
determined by the Board as necessary to satisfy any material, unsecured debt,
judgment or liability of Xxxx-Xxxx when the same becomes due (at maturity or
otherwise); (5) in connection with the sale of all or substantially all of the
properties owned by Xxxx-Xxxx under such terms and conditions which the Board,
in its sole judgment, determines to be in the best interests of Xxxx-Xxxx and
its public stockholders; and/or (6) sales of the Property which do not result in
material and adverse tax consequences for the Contributors. Xxxx-Xxxx may
dispose of any or all of the Property in its sole discretion, and without the
consent of Contributors, upon the expiration of the Restricted Period.
Notwithstanding any of the foregoing language to the contrary, Xxxx-Xxxx shall
not distribute the Property for a period of seven (7) years if the distribution
of such Property would result in the recognition of income by Contributor
pursuant
98
to Sections 704(c)(1)(B) or 737 of the Code, except as otherwise permitted in
clauses (1) through (7) above.
t. INTENTIONALLY DELETED.
u. TAX MATTERS.
i. (a) Contributors will timely pay or provide for the payment
of all Taxes which are attributable to all Pre-Closing Tax Periods, but which
are not due and payable until after the Closing Date in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for which either MCRLP (or any of its direct or indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property. To the extent allowed by law, Contributors will timely
file all Tax Returns which are required to be filed in connection with the
ownership and/or operation of the Property (by them or any predecessor entities)
or their businesses for all Pre-Closing Tax Periods but which are not required
to be filed until after the Closing Date and the non-timely filing (or
non-filing) of which could result in direct or indirect liability to MCRLP (or
any of its direct or indirect partners) or a claim against the Property. Each
such Tax Return will be complete and accurate. Contributors will provide
Xxxx-Xxxx with a copy of all such Tax Returns promptly after such Tax Returns
are filed. All Taxes imposed in connection with the ownership and/or operation
of the Property during any taxable periods which begin on or before the Closing
Date and end after the Closing Date ("Straddle Periods" or "Straddle Period")
shall be allocated between Contributors and MCRLP in accordance with their
respective periods of ownership of the Property. Contributors will timely pay
all Taxes with respect to their businesses for any Straddle Period (and any
other taxable period) for which either MCRLP (or any of its direct to indirect
partners) could be held directly or indirectly liable or a claim could be made
against the Property.
(2) Contributors shall cause PDPII to provide Xxxx-Xxxx
with a copy of its Federal income tax returns which reflect (in whole or in
part) any of the transactions contemplated hereunder and which reflect (in whole
or in part) any of the gain or loss recognized in respect of such transactions.
ii. PDPII and Contributors shall pay any and all Taxes
including without limitation, Taxes imposed with respect to the operation of its
business and the ownership or operation of the Property or PDPII for all taxable
periods (or portions thereof) ending on or prior to the Closing imposed upon
MCRLP based, in whole or in part, upon the failure to comply with the bulk sales
laws.
iii. Contributors are hereby authorized to continue the
proceeding or proceedings now pending for the reduction of the assessed
valuation of the Property as set forth on Schedule 21.3 and to litigate or
settle the same in Contributors' discretion. MCRLP is hereby
99
authorized by Contributors, in MCRLP's sole discretion, to file any applicable
proceeding for the 1997 and/or 1998 fiscal year for the reduction of the
assessed valuation of the Property. The net refund of taxes, if any, for any tax
year for which Contributors or MCRLP shall be entitled to share in the refund
shall be divided between Contributors and MCRLP in accordance with the
apportionment of taxes pursuant to the provisions hereof. All expenses in
connection therewith, including counsel fees, shall be borne by Contributors and
MCRLP in proportion to their ownership period of the asset in question.
iv. For purposes of this Agreement:
(1) "Taxes" or "Tax" means all federal, state, county,
local, foreign and other taxes of any kind whatsoever (including, without
limitation, income, profits, premium, estimated, excise, sales, use, occupancy,
gross receipts, franchise, ad valorem, severance, capital levy, production,
transfer, license, stamp, environmental, withholding, employment, unemployment
compensation, payroll related and property taxes, import duties and other
governmental charges or assessments), whether or not measured in whole or in
part by net income, and including deficiencies, interest, additions to tax or
interest, and penalties with respect thereto, and including expenses associated
with contesting any proposed adjustment related to any of the foregoing.
(2) "Tax Returns" or "Tax Return" means all original and
amended Federal, state, local and foreign tax returns, declarations, statements,
reports, schedules, forms, information returns and other filings relating to
Taxes.
(3) "Audits" or "Audit" means any audit, assessment of
Taxes, any other examination or claim by any Governmental Authority, judicial,
administrative or other proceeding or litigation (including any appeal of any
such judicial, administrative or other proceeding or litigation) relating to
Taxes and/or Tax Returns.
v. The provisions of this Section shall survive the Closing
Date.
v. PUBLICATION.
i. MCRLP shall have the exclusive right to make such public
announcements or filings with respect to the exchange as MCRLP may deem
reasonably prudent and, upon advice of counsel, as may be necessary or required
by law.
w. REMEDIES.
i. If the conditions set forth in Section 12.2 with respect to
the Closing have been satisfied (unless the failure or inability to be so
satisfied is due to Xxxx-Xxxx or
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MCRLP) and if MCRLP or Xxxx-Xxxx is not ready, willing and able to perform its
obligations hereunder on the Closing Date, or in the event of a material default
of MCRLP or Xxxx-Xxxx or MCRLP's or Xxxx-Xxxx'x material failure to comply with
any material representation, warranty, covenant or agreement set forth herein
with respect to the Closing, then Contributors, subject to the limitations set
forth in this Agreement, including, without limitation, those set forth in
Section 6.3, shall have the right as their sole and exclusive remedy to either
(i) terminate this Agreement upon written notice to MCRLP, in which event
neither party shall thereafter have any further obligations under this
Agreement, except those which expressly survive the termination hereof; or (ii)
maintain an action for either (A) specific performance, or (B) monetary damages.
ii. If the conditions set forth in Section 12.1 have been
satisfied (unless the failure or inability to be so satisfied is due to PDPII or
any Contributor), and if Contributors are not ready, willing and able to perform
their obligations hereunder on the Closing Date, or in the event of any material
default on the part of any of the Contributors, or PDPII or any Contributors'
failure to comply with any material representation, warranty, covenant or
agreement set forth herein, MCRLP shall be entitled to either (i) terminate this
Agreement upon notice to Contributors following which neither party shall
thereafter have any further obligations under this Agreement, except those which
expressly survive the termination hereof; or (ii) commence an action against
Contributors seeking either (A) monetary damages, or (B) specific performance of
Contributors' obligations under this Agreement.
iii. The acceptance of the Assignment of Interest by MCRLP
shall be deemed a full performance and discharge of every agreement and
obligation of Contributors to be performed under this Agreement, except those,
if any, which are specifically stated in this Agreement to survive the Closing.
x. INTENTIONALLY DELETED.
y. NOTICE.
All notices, demands, requests, or other writings in this
Agreement provided to be given or made or sent, or which may be given or made or
sent, by either party hereto to the other, shall be in writing and shall be
delivered by depositing the same with any nationally recognized overnight
delivery service, or by telecopy or fax machine, in either event with all
transmittal fees prepaid, properly addressed, and sent to the following
addresses:
If to Xxxx-Xxxx: c/o Xxxx-Xxxx Realty Corporation
or MCRLP 00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
(000) 000-0000 (tele.)
101
(000) 000-0000 (fax)
with a copy to: Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
If to PDPII: c/o Pacifica Holding Company, LLC
or Contributors 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
with a copy to: Brownstein, Hyatt, et al.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esq.
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
and a copy to: Apollo Real Estate Advisors
1301 Avenue of the Xxxxxxxx, 00xx
Xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. Xxxxxxx Xxxx
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
or to such other address as either party may from time to time designate
by written notice to the other. Notices given by (i) overnight delivery service
as aforesaid shall be deemed received and effective on the first business day
following such dispatch, and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided the same is sent
prior to 4:00 p.m. Eastern Time on a business day (if sent later, then notice
shall be deemed given on the next business day) and if the sending party
receives a written send confirmation on its machine and forwards a copy thereof
by regular mail accompanied by such notice or communication. Notices may be
given by counsel for the parties described above, and such Notices shall be
deemed given by said party, for all purposes hereunder.
z. DEPRECIATION METHOD.
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Xxxx-Xxxx, as the general partner of MCRLP, covenants and
agrees that MCRLP and its affiliates will use the "traditional method with
curative allocations" (as defined in Treasury Regulations Section 1.704-3(c)) of
allocating income, gain, loss and deduction to account for the variation between
the fair market value and adjusted basis of the Property for federal income tax
purposes with respect to (i) the contribution of the Property, and (ii) any
revaluation of the Property in accordance with the provisions of Treasury
Regulations Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g) and
1.704-3(a)(6).
aa. MISCELLANEOUS.
i. Intentionally Deleted.
ii. This Agreement constitutes the entire agreement between
the parties and incorporates and supersedes all prior negotiations and
discussions between the parties. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their successors and assigns, and
nothing in the Agreement express or implied, is intended to confer upon any
other person any rights or remedies of any nature whatsoever under or by reason
of this Agreement.
iii. This Agreement cannot be amended, waived or terminated
orally, but only by an agreement in writing signed by the party to be charged.
iv. This Agreement shall be interpreted and governed by the
laws of the State of Colorado, without regard to conflicts of laws principles,
and shall be binding upon the parties hereto and their respective successors and
assigns.
v. The caption headings in this Agreement are for convenience
only and are not intended to be part of this Agreement and shall not be
construed to modify, explain or alter any of the terms, covenants or conditions
herein contained. The, feminine or masculine gender, when used herein, shall
include the other gender and the use of the singular shall include the plural.
vi. If any term, covenant or condition of this Agreement is
held to be invalid, illegal or unenforceable in any respect, this Agreement
shall be construed without such provision.
vii. Each party shall, from time to time, execute, acknowledge
and deliver to the other party such further instruments, and perform such
additional acts, as the other party may reasonably request in order to
effectuate the intent of this Agreement. Nothing contained in this Agreement
shall be deemed to create any rights or obligations of partnership, joint
venture or similar association between Contributors and MCRLP or Xxxx-Xxxx. This
Agreement shall be
103
given a fair and reasonable construction in accordance with the intentions of
the parties hereto, and without regard to or aid of canons requiring
construction against Contributors, MCRLP or Xxxx-Xxxx or the party whose counsel
drafted this Agreement.
viii. This Agreement shall not be effective or binding until
such time as it has been executed and delivered by all parties hereto. This
Agreement may be executed by the parties hereto in counterparts, all of which
together shall constitute a single Agreement.
ix. All references herein to any Section, Exhibit, or Schedule
shall be to the Sections of this Agreement and to the Exhibits and Schedules
annexed hereto unless the context clearly dictates otherwise. All of the
Exhibits and Schedules annexed hereto are, by this reference, incorporated
herein.
x. In the event that PDPII or Contributors, and MCRLP or Xxxx-
Xxxx enter into litigation or alternative dispute resolution in connection with
this Agreement or the transaction contemplated herein, the non-prevailing party
in such litigation or alternative dispute resolution shall be responsible for
the payment of all expenses and reasonable attorneys' fees incurred by the
prevailing party.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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