EXECUTION COPY
Page 9 of 64 Pages
PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXX EQUITY, INC.,
a Florida corporation
AS SELLER
AND
XXXXX II REALTY TRUST, INC.
a Maryland corporation
AS BUYER
As of August 23, 2001
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made as of the
23rd day of August, 2001, by and among XXXXX EQUITY, INC., a Florida corporation
(the "Seller"), having an address at 0000 Xxxxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxxxx,
XX 00000, XXXXX II Realty Trust, Inc., a Maryland corporation, or its permitted
assigns (the "Buyer"), having an office at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, XX 00000.
W I T N E S S E T H:
- - - - - - - - - -
ARTICLE I
DEFINITIONS AND REFERENCES
1.1 Definitions. The following terms, as used in this Agreement,
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have the following meanings and references unless the context is inconsistent
therewith:
"Act of Bankruptcy" means any of the following acts by a party
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hereto: (i) applying for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property; (ii) admitting in writing its inability
to pay its debts as they become due; (iii) making a general assignment for the
benefit of its creditors; (iv) filing a voluntary petition or commencing a
voluntary case or proceeding under the Federal Bankruptcy Code (as now or
hereafter in effect); (v) being adjudicated a bankrupt or insolvent; (vi) filing
a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts;
(vii) failing to controvert in a timely and appropriate manner, or acquiescing
in writing to, any petition filed against it in an involuntary case or
proceeding under the Federal Bankruptcy Code (as now or hereafter in effect),
(viii) taking any corporate action for the purpose of effecting any of the
foregoing or (ix) the entering of an order (including an order for relief
entered in an involuntary case under the Federal Bankruptcy Code (as now or
hereafter in effect)), judgment or decree approving or ordering any of the
foregoing which continues unstayed and in effect for a period of sixty (60)
consecutive days.
"Adjustment Date" means 11:59 a.m. on the day immediately
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preceding the Closing Date.
"Adjustment Period" is defined in Section 5.4(d) hereof.
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"Affiliate" means a Person or entity which controls, is in common
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control with or is controlled by another Person; and for such purpose, "control"
of a Person (including the terms "controlling," "controlled by" and "under
common control with") means the possession, directly or indirectly, of the legal
power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
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"Agreement Date" means the first date upon which this Agreement
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has been executed by Seller and Buyer.
"Applicable Laws" shall mean any applicable building, zoning,
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subdivision, environmental, health, safety or other governmental laws, statutes,
ordinances, resolutions, rules, codes, regulations, orders or determinations of
any Authority or of any insurance boards of underwriters (or other body
exercising similar functions).
"Approved Lease(s)" means collectively (i) the Leases, (ii) any
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renewals or expansions of the Leases made pursuant to the terms of such Leases
and (iii) any other renewal, expansion or new lease made by Seller after the
Agreement Date with Buyer's approval as provided in Section 5.5(a)(ix) or for
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which Buyer's approval is not required under section 5.5(a)(ix).
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"Atrium & Pacific Plaza" means the Project located at the San
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Antonio, Texas, airport, consisting of 2 buildings containing 232,604 rentable
square feet, more or less, as described in Exhibit E-1(a).
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"Austin Center" means the Project in Austin, Texas consisting of
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12 buildings containing 440,805 rentable square feet, more or less, as described
in Exhibit E-1(b).
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"Authority" means any governmental, regulatory or administrative
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body, agency, commission, board, arbitrator or authority, any court or judicial
authority, any public, private or industry regulatory authority, whether
international, national, federal, state or local.
"Authorizations" shall mean all Licenses, Permits and approvals
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required by any Authority with respect to the construction, ownership,
operation, leasing, maintenance or use of the Property, any Project or any part
thereof.
"Base Allocation" is defined in Section 2.5 hereof.
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"Birmingham Colonnade" means the Project in Birmingham, Alabama,
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consisting of 5 buildings containing 452,522 rentable square feet, more or less,
as described in Exhibit E-1(c).
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"Birmingham Colonnade Retail Center" means the Project located in
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Birmingham, Alabama, consisting of 7 buildings containing 112,578 rentable
square feet, more or less, situated on 16.65 acres, more or less, as described
in Exhibit E-1(d).
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"Break-Up Fee" is defined in Section 11.2(a) hereof.
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"Broker" is defined in Section 8.1 hereof.
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"Building" is defined in Section 2.1(b) hereof.
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"Business Day" means any day other than a Saturday, Sunday or
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other day that banks in the State of New York are not permitted or required to
be closed.
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"Buyer Financing" is defined in Section 5.6(g) hereof.
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"Buyer Indemnification Claim" is defined in Section 5.3(b)
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hereof.
"Buyer Indemnitee" is defined in Section 5.3(a) hereof.
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"Buyer's Equity Investment" means the amount determined by
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subtracting (i) the principal amount of Third Party Debt incurred by the Buyer
in connection with its acquisition of the Property hereunder from (ii) the sum
of (a) $300,000,000.00; (b) any and all additional capital invested by Buyer (or
its Affiliates) in connection with the Property (provided that in no event shall
any undistributed income or other amounts received with respect to the Project
from any and all sources be treated as capital invested by Buyer) and (c)
Buyer's Expenses.
"Buyer's Expenses" means all of Buyer's actual out-of-pocket
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costs and expenses incurred in connection with the transactions contemplated
hereunder including, without limitation, any and all fees and expenses paid by
Buyer to the Lender in connection with the Commitments, the Buyer Financing and
all other Due Diligence Expenses; provided that such amount will not exceed
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Three Million Five Hundred Thousand Dollars ($3,500,000.00); provided, further,
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Buyer shall use reasonable efforts to ensure that Buyer's Expenses are not
duplicative of any costs and/or expenses incurred by Seller in connection with
this Agreement, including, without limitation, the cost of procuring the Title
Commitments, Survey(s), Environmental Reports, Property Inspection Reports,
Zoning Letters and similar due diligence items.
"CAM Charges" is defined in Section 4.5(a)(iv) hereof.
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"Cap" is defined in Section 5.4(c) hereof.
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"Cash Available for Distribution" means the amount by which the
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Net Cash Flow exceeds the sum of (i) Buyer's Equity Investment and (ii) an
amount equal to a fifteen percent (15%) Internal Rate of Return on Buyer's
Equity Investment.
"Cash Payment" is defined in Section 2.2 hereof.
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"Xxxxxxxxx Xxxxxx Office Park" means the Project located in
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Charlotte, North Carolina, consisting of 3 buildings containing 322,624 rentable
square feet, more or less, as described in Exhibit E-1(e).
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"Claim" means any action, suit, lawsuit, hearing, investigation,
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notice of a violation or noncompliance, litigation, proceeding, arbitration,
appeals or other dispute, whether civil, criminal, administrative or otherwise.
"Closing" means the consummation of the sale and conveyance of
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the Property by or on behalf of Seller to Buyer, and payment of the Closing
Purchase Price by Buyer to Seller, pursuant to Section 4.1 hereof.
"Closing Commitment" is defined in Section 3.2 hereof.
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"Closing Date" means the date upon which the Closing occurs, as
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set forth in Section 4.1(a) hereof.
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"Closing Purchase Price" is defined in Section 2.2 hereof.
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"Commitments" is defined in Section 5.6(g) hereof.
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"Commission" is defined in Section 5.1(c) hereof.
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"Contract" means any agreement, contract, commitment, instrument,
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document, certificate or other arrangement or understanding, whether written or
oral.
"County" means with respect to each separate Property the county
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in which such Property is located.
"Damages" means all damages (but not including consequential
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damages), losses (including any diminution in value), liabilities, payments,
amounts paid in settlement, obligations, fines, penalties, costs of burdens
associated with performing injunctive relief, and other costs (including
reasonable fees and expenses of attorneys, accountants and other professional
advisors, and of expert witnesses and other costs of investigation, preparation
and litigation in connection with any Claim or threatened Claim) of any kind or
nature whatsoever, whether known or unknown, contingent or vested, or matured or
unmatured. In calculating "Damages," the dollar amount of any losses will be
offset by insurance proceeds received by Buyer, third party indemnification
payments received by Buyer, any net tax benefits derived by Buyer and similar
payments or benefits actually received by Buyer; and with respect to Damages
relating to changes in the Rent Roll, all revenue and expense increases and all
revenue and expense decreases will be deemed corresponding, but the net effect
thereof will be adjusted reasonably to reflect creditworthiness of tenants and
other similar factors.
"Default Fee" means Ten Million Dollars ($10,000,000).
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"Due Diligence Expenses" shall mean any and all costs, fees,
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disbursements and expenses incurred by Buyer (or third parties hired or retained
by Buyer, including, without limitation, the Lender, engineers, architects,
attorneys, and accountants) in connection with their respective due diligence of
the Property and each of the Projects, including, without limitation, fees for
applications and Commitments from the Lender, the Lender's reasonable attorney's
fees, surveys, environmental studies, engineering reports, and appraisals;
provided Buyer shall use reasonable efforts to ensure that Buyer's Expenses are
not duplicative of any costs and expenses incurred by Seller in connection with
this Agreement, including, without limitation, the cost of procuring the Title
Commitments, Survey(s), Environmental Reports, Property Inspection Reports,
Zoning Letters and similar due diligence items.
"Environmental Damages" shall mean all third-party Claims,
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Orders, Damages, Liens, costs and expenses of investigation and defense of any
Claim, whether or not such is ultimately defeated, and of any settlement or
judgment, of whatever kind or nature, contingent or otherwise, matured or
unmatured, including, without limitation, reasonable attorneys' fees and
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disbursements and consultants' fees, any of which arise as a result of the
existence of Hazardous Substances upon, about or beneath any Project or
migrating or threatening to migrate from any Project, or as a result of the
existence of a violation of Environmental Requirements pertaining to any
Project.
"Environmental Reports" means those certain environmental reports
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listed on Exhibit E-6.
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"Environmental Requirements" shall mean (i) all Applicable Laws
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of all Authorities and (ii) all judicial, administrative and regulatory decrees,
judgments and orders, in each case relating to the protection of human health or
the environment from Hazardous Substances, including, without limitation: (a)
all requirements thereof, including, without limitation, those pertaining to
reporting, licensing, permitting, investigation and remediation of emissions,
discharges, releases or threatened releases of Hazardous Substances into the
air, surface water, groundwater or land, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances and (b) all requirements pertaining to the
protection of the health and safety of employees or the public from Hazardous
Substances.
"Estimated Breach" is defined in Section 5.4(e) hereof.
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"Estimation Notice" is defined in Section 5.4(e) hereof.
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"First Offer Term" is defined in Section 12.1 hereof.
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"Greensboro South Office Park" means the Project located in
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Greensboro, North Carolina, consisting of 13 buildings containing 688,506
rentable square feet, more or less, as described in Exhibit E-1(f).
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"Greensboro Xxxxxxxx-Xxxxxxx Building" means the Project located
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in Greensboro, North Carolina, consisting of 1 building containing 89,887
rentable square feet, more or less, as described in Exhibit E-1(g).
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"Greenville Xxxxx Mountain Center" means the Project located in
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Greenville, South Carolina, consisting of 9 buildings containing 400,502
rentable square feet, more or less, as described in Exhibit E-1(h).
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"Greenville Park Central Center" means the Project located in
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Greenville, South Carolina, consisting of 3 buildings containing 157,936
rentable square feet, more or less, as described in Exhibit E-1(i).
"Hazardous Substances" means (i) those substances included within
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the definitions of "hazardous substances," "hazardous materials," "toxic
substances" or "solid waste" in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.ss.9601 et seq., the Resource
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Conservation and Recovery Act of 1976, 42 U.S.C.ss.6901 et seq., the Hazardous
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Materials Transportation Act, 49 U.S.C.ss.1801 et seq., the Toxic Substance
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Control Act of 1976, as amended, 15 U.S.C.ss.2601 et seq. or the Clean Water
-- ---
Act, 33 U.S.C.ss.1321 et seq., and in the regulations promulgated pursuant
-- ---
thereto; (ii) those substances listed in the United States Department of
Transportation Table (49 CFRss.172.101) or by the Environmental Protection
Agency as "hazardous substances," (iii) such other substances, materials and
wastes which are regulated, or classified as "pollutants" or "contaminants," or
as hazardous or toxic, under Applicable Law, and (iv) any material, waste or
substance which is or contains petroleum, asbestos, polychlorinated biphenyls,
flammable explosives or radioactive materials.
"Herein" or "hereof" means this entire Agreement rather than just
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the sentence, paragraph or section in which used.
"Improvements" is defined in Section 2.1(b) hereof.
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"Including," "include" or "includes" mean including as an
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example, without limiting the generality of the description.
"Indemnified Party" is defined in Section 8.1 hereof.
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"Indemnifying Party" is defined in Section 8.1 hereof.
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"Intangibles" is defined in Section 2.1(e) hereof.
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"Internal Rate of Return" means the annual discount rate
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equivalent to a compounded quarterly rate which establishes the net present
value as of the Closing Date of the Net Cash Flow of Buyer as being equal to the
net present value as of the Closing Date of Buyer's Equity Investment. In
determining the Internal Rate of Return, the following will apply:
(a) all present value calculations will be made as of the
Closing Date;
(b) Buyer's Equity Investment will be treated as having
been invested on the Closing Date;
(c) Net Cash Flow will be computed on a monthly basis and
will be deemed received by Buyer on the date actually
received;
(d) Net Cash Flow will be determined prior to application
of any federal, state or local income taxation to Buyer
(including any withholding or deduction requirements);
(e) all amounts will be calculated on a compounded
quarterly basis, and on the basis of a 360-day year
composed of twelve 30-day months; and
(f) Internal Rate of Return calculations will use the
methodology of Microsoft Excel 2000.
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"Knowledge" is defined in Section 5.2 hereof.
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"Land" is defined in Section 2.1(a) hereof.
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"Lease(s)" is defined in Section 2.1(d) hereof.
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"Lease Proposal" is defined in Section 5.5(a)(ix) hereof.
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"Lease Schedule" is defined in Section 2.1(d) hereof.
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"Lender" is defined in Section 5.6(g) hereof.
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"Liability Threshold" is defined in Section 5.4(b) hereof.
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"Licenses" is defined in Section 5.1(dd) hereof.
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"Lien" means any (a) security interest, lien, mortgage, pledge,0
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hypothecation, encumbrance, Claim, easement, charge, restriction on transfer or
otherwise, or interest of another person of any kind or nature, including any
conditional sale or other title retention Contract or lease in the nature
thereof; (b) any filing or agreement to file a financing statement as debtor
under the Uniform Commercial Code or any similar statute; and (c) any
subordination arrangement in favor of another Person.
"Limited Liability Company Agreement" is defined in Section 2.4
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hereof.
"LLC" is defined in Section 2.4 hereof.
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"Loan Commitment" means that certain loan commitment dated August
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23, 2001 and executed by Buyer and Lender.
"Marketing Period" is defined in Section 11.1 hereof.
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"Material Breach Notice" is defined in Section 5.4(e) hereof.
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"Membership Interest" is defined in Section 2.4 hereof.
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"Miscellaneous Land Parcels" shall mean certain unused parcels
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without value listed on Exhibit E-2.
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"Xxxxxx Xxxxxxx" is defined in Section 8.1 hereof.
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"Net Cash Flow" means (i) the aggregate of all cash received with
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respect to the Projects from any and all sources, including rents,
reimbursements, sales proceeds and refinancing proceeds from and after the
Closing Date through, with respect to each Project, the date of sale of such
Project to a third party purchaser which is not an Affiliate of Buyer, less (ii)
the sum of (a) cash expended for the recurring and non-recurring expenses of the
Projects, including all operating expenses, any and all fees and expenses paid
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to Seller under the Property Management Agreement, capital expenditures, taxes
(other than income taxes) and fees (including fees paid to Affiliates of Buyer;
provided that such fees are on market terms and conditions and are for
service(s) customarily provided to the Project, and to similar projects in the
surrounding community, in the ordinary course of business) incurred or expended
with respect to the Projects and (b) interest and principal payments on the
Third Party Debt.
"NWMLIC" means Northwest Mutual Life Insurance Company.
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"Offer Period" is defined in Section 12.1 hereof.
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"Offer Price" is defined in Section 12.1 hereof.
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"Option Period" is defined in Section 11.1 hereof.
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"Operating Agreements" is defined in Section 2.1(e) hereof.
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"Operating Agreements Schedule" is defined in Section 2.1(e)
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hereof.
"Order" means any writ, decree order, judgment, injunction, rule,
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ruling, lien, voting right, consent of or by an Authority.
"Permits" means the permits for the use and occupancy of any
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portion of any Project, including those described in Schedule S-1.1 (pp).
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"Permitted Exceptions" means those conditions of title to the
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Real Property set forth in Schedule S-3.1 hereof.
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"Person" means any individual, partnership, joint venture, firm,
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corporation, limited liability company, association, trust or other enterprise,
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Personalty" is described in Section 2.1(c) hereof.
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"Project" means the separate Property comprising each of the ten
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(10) commercial developments described in Exhibit E-1.
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"Property" is defined in Section 2.1(e) hereof.
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"Property Inspection Reports" means those certain property
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inspection reports listed on Exhibit E-7.
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"Property Management Agreement" is defined in Section 10.1
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hereof.
"Purchase Notice" is defined in Section 12.1 hereof.
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"Purchase Price Allocation" is defined in Section 2.5 hereof.
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"Real Property" means the Land and the Improvements.
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"Rent Roll" is defined in Section 5.1(jj) hereof.
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"Required ROFO Parcels" is defined in Section 12.2 hereof.
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"ROFO Offer" is defined in Section 12.1 hereof.
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"ROFO Parcel" is defined in Section 12.1 hereof.
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"Sale Period" is defined in Section 12.1 hereof.
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"San Xxxxxxx Xxxx Center" means the Project located in San
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Antonio, Texas, consisting of 27 buildings containing 1,053,814 rentable square
feet, more or less, as described in Exhibit E-1(j).
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"Seller's Expenses" means all of Seller's actual out-of-pocket
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costs and expenses incurred in connection with the transactions contemplated
hereunder, including all costs and expenses of the NWMLIC collateral
substitution; provided that such amount will not exceed $4,000,000.
"Seller Indemnitee" is defined in Section 5.7(a) hereof.
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"Seller Indemnification Claim" is defined in Section 5.7(b)
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hereof.
"Seller's Knowledge" is defined in Section 5.2 hereof.
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"Seller's Representatives" means Xxxxxx X. Xxxxxxx, Xxxx X.
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Xxxxxxxxxx, Xxxxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx
Drielinger, Xxxx Xxxxx, and each of the General Managers of each of the
Projects.
"Shares" means the Five Million Seven Hundred Thirty-Three
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Thousand Seven Hundred Seventy Two (5,733,772) shares of the $.01 par value
common capital stock of Seller owned by Buyer.
"SNDA" means a Subordination, Non-Disturbance and Attornment
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Agreement in the form required by Lender.
"Survey" means, with respect to each Project, the ALTA survey of
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the Project to be prepared by the Surveyor, as set forth in Section 3.1 hereof.
"Surveyor" means, with respect to each Project, the licensed land
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surveyor to which Seller and Buyer mutually agree.
"Tax" means any federal, state, local, or foreign income, gross
---
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental, customs, ad valorem, duties, capital
stock, franchise, profits, withholding, social security, unemployment,
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disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other
tax of any kind whatsoever, including any interest, penalty, or addition
thereto, whether disputed or not.
"Tax Reduction Proceeding" is defined in Section 13.4(a) hereof.
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"Tax Returns" is defined in Section 5.1(gg) hereof.
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"Tenant" means any Person occupying, or having the right to
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occupy, any portion of the Property.
"Tenant Estoppels" is defined in Section 4.2(e) hereof.
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"Tenant Estoppel/SNDA Threshold Amount" is defined in Section
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4.7(c) hereof.
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"Tenant Inducement Costs" means any out-of-pocket payments
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required under a Lease to be paid by the landlord thereunder to or for the
benefit of the tenant thereunder to induce the tenant to enter into a Lease,
including tenant improvement costs, lease buyout costs and moving, design,
refurbishment and club membership allowances (but does not include loss of
income resulting from any free rental period).
"Third Party Debt" means the debt incurred by Buyer in connection
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with the acquisition of the Property pursuant to this Agreement, and any
refinancing of such debt, in each instance from lenders which are not Affiliates
of Buyer.
"Title Agent" means the agent for the Underwriter, by which the
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Title Commitment and Title Policy will be issued.
"Title Commitment" means the ALTA Form B (1992, as amended) Owner
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(and Lender, if applicable) Marketability Title Insurance Commitment, issued or
to be issued to Buyer (and the Lender, if applicable) with respect to the Real
Property, as set forth in Section 3.1 hereof, which will include copies of all
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matters for which exception is made in Schedule B thereof.
"Title Defect" means any condition of title to the Real Property,
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other than a Permitted Exception, which renders title unmarketable, or which
materially interferes with the current use of the Real Property.
"Title Policy" means the ALTA Form B Owner (and Lender, if
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applicable) Title Insurance Policy to be issued to Buyer (and Lender, if
applicable) pursuant to the Title Commitment, with the creditor's rights
exception or exclusion from coverage having been deleted.
"UCC Reports" is defined in Section 3.1 hereof.
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"Underwriter" means Lawyers Title Insurance Corporation or
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another nationally recognized title insurer acceptable to Buyer, for and upon
whom the Title Commitment and Title Policy are to be issued.
"Zoning Letters" means those certain letters obtained from the
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applicable Authority and listed on Exhibit E-8.
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ARTICLE II
PURCHASE AND SALE
2.1 Agreement of Purchase and Sale. Subject to the terms and
------------------------------
conditions hereinafter set forth, Seller agrees to sell and convey and Buyer
agrees to purchase the following:
(a) those certain tracts or parcels of land situated in
Austin, Texas; San Antonio, Texas; Birmingham, Alabama; Charlotte, North
Carolina; Greensboro, North Carolina; and Greenville, South Carolina; together
with any Miscellaneous Land Parcels appurtenant thereto, each as more
particularly described on Exhibit E-2 attached hereto and made a part hereof;
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together with all and singular the rights and appurtenances pertaining to such
land, including any easement, right, title and interest of Seller in and to
adjacent streets, alleys or rights-of-way (collectively, the "Land");
----
(b) the buildings (each a "Building" and collectively the
"Buildings"), structures, fixtures (including, without limitation, all heating,
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air conditioning, plumbing, lighting, communications, elevator fixtures,
inventory and goods) and other improvements on the Land (collectively, the
"Improvements");
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(c) all of Seller's right, title and interest in and to all
tangible personal property upon the Land and/or within the Buildings, including
appliances, furniture, carpeting, draperies and curtains, tools and supplies,
machinery, equipment, inventory, plans and specifications, operating manuals,
maintenance and other Property records, and other items of personal property
(excluding cash, and excluding all computer programs, software and similar items
used in connection with the corporate operations of Seller, but not excluding
the information on the Seller's computers' hard drive relating exclusively to
the operation and management of the Properties), owned by Seller and used
primarily in connection with the operation of each Project, including those
items described on Exhibit E-3 attached hereto and made a part hereof
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(collectively, the "Personalty");
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(d) all of Seller's right, title and interest in and to all
leases, licenses, franchises, and agreements listed and described on Exhibit E-4
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relating to the Property (the "Lease Schedule") attached hereto and made a part
hereof (including rooftop antennae leases and/or agreements), pursuant to which
any portion of the Projects (including, without limitation, parking spaces) is
used or occupied by anyone other than Seller (collectively, the "Leases"); and
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(e) all of Seller's right, title and interest, if any, in
and to all intangible personal property owned by Seller and used primarily in
connection with the ownership, operation, leasing, occupancy, or maintenance of
the Property or any Project, including all assignable contracts and agreements
(collectively, the "Operating Agreements") listed and described on Exhibit E-5
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(the "Operating Agreements Schedule") attached hereto and made a part hereof,
-------------------------------
relating to the upkeep, repair, maintenance or operation of the Projects, which
will extend beyond the Closing Date, including (i) all assignable equipment
leases, (ii) all assignable existing warranties and guaranties (express or
implied) issued to Seller in connection with the Improvements or the Personal
Property, (iii) all assignable Permits, licenses and approvals, if any, (iv) any
logos or symbols used by Seller with respect to the Property, (v) telephone
exchange numbers related to the operation of the Projects and (vi) Seller's
right, title and interest, if any, in, the trade names, trademarks,
servicemarks, copyrights, including "Austin Center," "Birmingham Colonnade,"
"Xxxxxxxxx Xxxxxx Xxxxxx Xxxx," "Xxxxxxxxxx Xxxxx Xxxxxx Xxxx," "Greensboro
Xxxxxxxx-Xxxxxxx Building," "Greenville Xxxxx Mountain Center," "Greenville Park
Central Center," "San Xxxxxxx Xxxx Center" and "Atrium & Pacific Plaza" and any
derivation thereof, and any other name or names by which the Projects are now
known or under which the Projects are currently operated by Seller, as those
names apply to the Property and including the street addresses currently
assigned to the Projects under the current numbering systems of the applicable
local governments, but expressly excluding the name "Xxxxx" or any derivative or
logo thereof (collectively, the "Intangibles," and together with the Land,
------------
Improvements, Personalty and the Leases, the "Property"). Notwithstanding the
--------
foregoing, Seller will give notice terminating any Operating Agreements
designated in writing by Buyer pursuant to Section 4.2(d) hereof.
------
2.2 Purchase Price. Seller agrees to sell and Buyer agrees to
---------------
purchase, on the Closing Date, the Property for a purchase price of (a) Two
Hundred Eight Million Two Hundred Fifty-Nine Thousand Six Hundred Forty-Eight
and No/100 Dollars ($208,259,648.00 U.S.) (the "Cash Payment"), (b) the Shares
------------
and (c) the Membership Interest (collectively with the Shares and the Cash
Payment, the "Closing Purchase Price").
----------------------
2.3 Payment of Closing Purchase Price. The Closing Purchase Price
----------------------------------
will be paid on the Closing Date by (a) the transfer by Buyer to Seller of the
Shares, free and clear of all Claims, Orders and Liens, except those created by
Seller, (b) cash in the amount of the Cash Payment, subject to the prorations
and adjustments set forth in Section 4.5 hereof. The Cash Payment (as so
---
adjusted) will be payable in full on the Closing Date by wire transfer of
immediately available federal funds to a bank account designated by Seller to
Buyer in writing no later than three Business Days prior to the Closing and (c)
the transfer by Buyer to Seller of the Membership Interest, free and clear of
all Claims, Orders and Liens which will be effectuated by Seller becoming a
party to the Limited Liability Company Agreement.
2.4 Membership Interest. Buyer intends to take and hold title to the
-------------------
Property in a to-be-formed Delaware limited liability company (such limited
liability company, the "LLC"), in which Buyer will be the sole initial member
and Seller will be admitted as an additional member at the Closing (Buyer's
membership interest in the LLC, the "Membership Interest"). The respective
--------------------
rights and obligations of the Buyer and the Seller in the LLC shall be set forth
13
Page 22 of 64 Pages
in a limited liability company agreement ("Limited Liability Company
----------------------------
Agreement"). The Buyer will provide the Seller with a draft of the Limited
---------
Liability Company Agreement within seven days of the date of this Agreement
which shall be subject to the approval of the Seller, such approval not to be
unreasonably withheld. The Buyer and Seller shall use their best efforts to
agree upon the terms of the Limited Liability Company Agreement within
twenty-one days of the date of this Agreement. The Limited Liability Company
Agreement shall provide (i) that Seller will receive twenty percent (20%) of the
Cash Available for Distribution from the Projects, payable monthly in arrears on
the twentieth (20th) day of each calendar month, (ii) that in the event of an
intentional fraud by Seller by reason of Actual Knowledge of a Seller
Representative other than Project General Managers, Seller's interest in the LLC
shall terminate, (iii) that Seller may transfer its Membership Interest to an
Affiliate of Seller, (iv) tag along and take along provisions, (v) that the
Membership Interest will be a non-voting interest and (vi) that Seller will
pledge on a non-recourse basis or otherwise subordinate the Membership Interest
in connection with the financing contemplated by the Loan Commitment as required
by Lender.
2.5 Purchase Price Allocation. Buyer and Seller agree to use their
--------------------------
reasonable efforts to agree upon an allocation of the Closing Purchase Price
within thirty (30) days of the date of this Agreement (the "Base Allocation").
----------------
The parties' agreement on the Base Allocation and any adjustments thereto shall
be final and binding on all parties and shall be referred to herein as the
"Purchase Price Allocation". Buyer and Seller each agree to (i) treat (and cause
-------------------------
to be treated) the purchase and sale of the Property as (x) part sale of the
Property to Seller in consideration for the Closing Purchase Price and (y) part
contribution of the Property to LLC in consideration for issuance of the
Membership Interest, (ii) report (and cause to be reported) the part sale and
part contribution of the Property for all United States federal, state, and
local Tax purposes in a manner consistent with such treatment, and (iv) not take
(or cause to be taken) any position inconsistent with such treatment and the
Purchase Price Allocation.
ARTICLE III
TITLE, SURVEY AND INSPECTIONS
3.1 Title Commitment Issuance, Examination, Objection and Cure.
---------------------------------------------------------------
Prior to the Agreement Date, Seller has caused, at Seller's expense, (i) the
Title Agent to issue to Buyer a Title Commitment with respect to each Project
including copies of all recorded documents for which exception is made in
Schedule B thereof and searches of Uniform Commercial Code filings in the county
and State in which each Project is situated (the "UCC Reports") and (ii) the
------------
Surveyor to prepare a Survey of the Real Property of each Project. Buyer has
reviewed the Title Commitment(s), Survey(s) and UCC Reports and has accepted the
condition of Seller's title subject only to those matters specifically set forth
in Schedule S-3.1 hereof (the "Permitted Exceptions").
----- --------------------
3.2 Closing Commitment. At Closing, Seller will cause Title Agent to
------------------
issue to Buyer an endorsement to each Title Commitment or a "marked up"
duplicate original of each Title Commitment (each, a "Closing Commitment"),
-------------------
14
Page 23 of 64 Pages
reflecting that all requirements of the Title Commitment have been fulfilled or
waived and eliminating the "gap exception," the standard ALTA exceptions, any
exceptions for Gap Title Defects to which Buyer has timely objected, containing
any endorsements required by Lender, and extending the effective date of
coverage through recording of the deed of conveyance to Buyer. The Title Policy
will be delivered to Buyer (and Lender, if applicable) promptly after Closing.
3.3 Conveyance of Title. At Closing, Seller will convey and transfer
-------------------
to Buyer such title to the Property, subject to the Permitted Exceptions, as
will enable the Title Company to issue a Title Policy pursuant to each Title
Commitment, covering the applicable Property in the full amount of the allocated
Closing Purchase Price thereof. Notwithstanding anything contained herein to the
contrary, the Property will be conveyed subject to the following matters, which
will be deemed to be Permitted Exceptions:
(a) the rights of Tenants, as tenants only, under the
Approved Leases;
(b) the lien of all ad valorem real estate taxes and
assessments not yet due and payable as of the Closing Date, subject to
adjustment as herein provided;
(c) local, state and federal laws, ordinances or
governmental regulations, including but not limited to, building and zoning
laws, ordinances and regulations, now or hereafter in effect relating to the
Property; and
(d) the Permitted Exceptions.
3.4 Pre-Closing "Gap" Title Defects. Buyer may, at or prior to
----------------------------------
Closing, notify Seller in writing of any defect in Buyer's title to the Property
(a "Gap Title Defect") either (a) appearing as an exception in the applicable
-----------------
Title Commitment as of the Agreement Date but not included hereunder as a
Permitted Exception, or (b) first raised by the Underwriter, the Title Agent or
the Surveyor, or first appearing of record, between the effective date of the
Title Commitment and the Closing Date and not permitted by the terms of this
Agreement. With respect to any Gap Title Defect set forth in such notice which
is in a liquidated dollar amount, Seller will cure such Gap Title Defect, and
with respect to any material adverse Gap Title Defect which is not in a
liquidated dollar amount, Seller will use reasonable efforts to cure such Gap
Title Defect within a period of thirty (30) days after receipt of such notice
(but not later than December 14, 2001, or the Closing Date, if earlier, as to
which time is of the essence) and Seller will not be required to expend more
than $250,000.00 in connection therewith) and Buyer will have the following
options: (i) to accept a conveyance of the Property subject to the Permitted
Exceptions, specifically including the Gap Title Defects which Seller is unable
to cure and without a reduction of the Closing Purchase Price (and Buyer will
have no claim pursuant to Section 5.3 hereof with respect to such Gap Title
Defect) or (ii) after Seller's thirty (30) day cure period (but not later than
December 14, 2001, or the Closing Date, if earlier, as to which time is of the
essence), to terminate this Agreement by sending written notice thereof to
Seller, and promptly upon delivery of such notice of termination this Agreement
will terminate, subject to Section 13.20 hereof. To the extent necessary for
Seller to attempt to cure any such matters, the Closing Date will be extended by
a reasonable additional time to effect such a cure, but in no event will the
15
Page 24 of 64 Pages
extension be later than December 14, 2001 (time being of essence with respect to
such date).
ARTICLE IV
CLOSING
4.1 Time and Place. Except as otherwise provided in Section 7
--------------- -
hereof, the consummation of the transactions contemplated hereby ("Closing")
-------
will be held at the offices of Lender's attorney or such other location as may
be agreed to by the parties hereto, beginning at 9:00 a.m. on December 14, 2001;
provided, that in the event Seller elects prior to October 31, 2001 to terminate
all of its efforts to negotiate, enter into and execute any of the transactions
described in Section 11.1 hereof, Closing will occur on the first Business Day
----
that is forty-five (45) days following receipt by Buyer of Seller's written
notice of such election.
4.2 Seller's Obligations at Closing. At Closing, Seller will:
-------------------------------
(a) deliver to Buyer a duly executed special warranty deed,
dated as of the Closing Date, in recordable form, conveying the Real Property of
each Project, subject only to the Permitted Exceptions, substantially in the
form(s) attached hereto as Form F-1 (modified to the extent necessary to comply
---
with the laws of the jurisdiction in which the applicable Real Property is
situated);
(b) deliver to Buyer a duly executed xxxx of sale, dated as
of the Closing Date, conveying the Personal Property of each Project, without
warranty, expressed or implied, as to merchantability and fitness for any
purpose, substantially in the form attached hereto as Form F-2;
---
(c) assign to Buyer, and Buyer will assume, the
landlord/lessor interest in and to the Leases by duly executed Assignment and
Assumption Agreement, dated as of the Closing Date, substantially in the form
attached hereto as Form F-3, including, without limitation, a
---
cross-indemnification provision whereby, subject to the Liability Threshold and
Cap, Seller will indemnify Buyer for Damages accruing under the Leases prior to
the Closing Date and Buyer will indemnify Seller for Damages accruing under the
Leases on or after the Closing Date;
(d) to the extent assignable, assign to Buyer, and Buyer
will assume, Seller's interest in the Operating Agreements (other than those
which Buyer has notified Seller in writing, not later than thirty (30) days
prior to Closing, that Buyer has elected not to assume) and the other
Intangibles by duly executed Assignment and Assumption Agreement, dated as of
the Closing Date, substantially in the form attached hereto as Form F-4;
---
(e) deliver to Buyer (i) such Tenant Estoppels as are in
Seller's possession, substantially in the form attached hereto as Form F-5 or on
---
the form required by and otherwise acceptable to the Lender (the "Tenant
------
Estoppels"), and (ii) such SNDA's as are in Seller's possession; the Tenant
---------
16
Page 25 of 64 Pages
Estoppels to be effective as of a date within forty-five (45) days prior to the
Closing Date (or such shorter period as may be required by the terms of the Loan
Commitment);
(f) join with Buyer in a written notice in form and content
reasonably satisfactory to Buyer, which Buyer will send to each Tenant under
each of the Leases informing such Tenant of the sale of each Project and the
Property and of the assignment to Buyer of Seller's interest in, and obligations
under, the Leases (including, if applicable, any security deposits), and
directing that all rent and other sums payable after the Closing under each such
Lease will be paid as set forth in the notice;
(g) deliver to Buyer a certificate, dated as of the Closing
Date and executed on behalf of Seller by a duly authorized officer thereof,
stating that the representations and warranties of Seller contained in this
Agreement are true and correct in all material respects as of the Closing Date
or identifying any representation or warranty which is no longer true and
correct and explaining the state of facts giving rise to the change (provided,
however, Buyer and Seller acknowledge and agree that any rights Buyer may have
in connection therewith shall be subject to the provisions of Section 5.4
---
hereof);
(h) deliver to Buyer such evidence as Buyer's counsel
and/or the Title Company may reasonably require as to the authority of the
Person or Persons executing documents on behalf of Seller;
(i) deliver to Buyer an affidavit, dated as of the Closing
Date, duly executed by Seller stating that Seller is not a "foreign person" as
defined in the Federal Foreign Investment in Real Property Tax Act of 1980 and
the 1984 Tax Reform Act;
(j) deliver to Buyer an affidavit, dated as of the Closing
Date, duly executed by Seller in form and substance reasonably acceptable to the
Title Agent for the purpose of deleting the "gap" exception and the standard
printed exceptions;
(k) deliver to Buyer a closing statement and disbursement
schedule duly executed by Seller, dated as of the Closing Date;
(l) deliver to Buyer the original (or, if originals are not
available, a certified copy) of Leases and Operating Agreements certified as
true, complete and correct, and guaranties and warranties, equipment leases,
parking agreements and licenses and Permits, if any, in the possession of Seller
or Seller's agents, together with all leasing and property files and records
related to the ownership, operation, leasing and maintenance of the Property.
Buyer, at no expense to Buyer, will cooperate with Seller for a period of two
(2) years after the Closing in case of Seller's need in response to any legal
requirement, a tax audit, tax return preparation or litigation threatened or
brought against Seller, by allowing Seller and its agents or representatives
access, upon reasonable advance notice (which notice will identify the nature of
the information sought by Seller), at all reasonable times to examine and make
17
Page 26 of 64 Pages
copies of any and all such instruments, files and records delivered to Buyer
hereunder, which right will survive the Closing;
(m) deliver to Buyer possession and occupancy of the
Property, subject only to the Permitted Exceptions;
(n) deliver to Buyer, to the extent in the possession of
Seller or its property manager, all keys, electronic pass cards or devices to
all entrance doors to, and equipment and utility rooms and vault boxes located
in, each Project, which keys and electronic pass cards or devices will be
properly tagged for identification and which delivery may be accomplished by
Seller or its property manager depositing such items in the management office in
the Project; and
(o) deliver to Buyer a Property Management Agreement, dated
as of the Closing Date, for each Project duly executed by Xxxxx Realty Services,
Inc., in substantially the form attached hereto as Form F-7;
---
(p) deliver to Buyer resolutions of the Board of Directors
of Seller authorizing the transactions contemplated by this Agreement, together
with evidence of approval of the shareholders of Seller, if required pursuant to
Seller's organizational documents;
(q) deliver to Buyer the written opinion of White & Case
LLP, substantially in the form attached hereto as Form F-8, dated as of the
---
Closing Date;
(r) deliver to Buyer "reliance letters" entitling Buyer to
rely upon the environmental and engineering reports prepared for Seller and
provided to Buyer prior to the Agreement Date;
(s) cause to be filed UCC-3 termination statements, or
other similar documents, terminating any and all UCC-1 financing statements, and
similar publicly filed financing documents, encumbering the Property, and
deliver copies thereof to Buyer;
(t) deliver such additional documents as will be reasonably
required to consummate the transactions contemplated by this Agreement;
(u) join Buyer in execution of the Limited Liability
Company Agreement; and
(v) deliver to Buyer a certificate executed by a duly
authorized officer of Seller certifying that Seller waives any contractual
restrictions it may have with respect to Buyer's right to transfer the Shares as
provided herein.
4.3 Buyer's Obligations at Closing. At Closing, Buyer will:
---------------------------------
(a) pay to Seller the cash portion of the Closing Purchase
Price, in immediately available wire transferred funds pursuant to Section 2.3
---
above;
18
Page 27 of 64 Pages
(b) either (i) deliver the certificates representing the
Shares, free and clear of all Claims, Orders or Liens duly endorsed in blank or
accompanied by stock powers duly executed in blank, with signatures(s)
guaranteed by a domestic commercial bank or trust company, with all necessary
transfer tax and other revenue stamps, acquired at Buyer's expense, affixed and
canceled, or (ii) if the Shares are held of record by a financial or other third
party institution, irrevocably direct such institution to cause the transfer of
the Shares to Seller in accordance with the terms of this Agreement. Buyer
agrees to use its reasonable efforts to cure any deficiencies with respect to
the endorsement of the certificates representing the Shares or with respect to
the stock power accompanying any such certificates.
(c) join Seller or Xxxxx Realty Services, Inc., as
applicable, in execution of the instruments described in Sections 4.2(c), (d),
------ ---
(f), (k) and (o) above;
--- --- ---
(d) deliver to Seller such evidence as Seller's counsel
and/or the Title Company may reasonably require as to the authority of the
Person or Persons executing documents on behalf of Buyer;
(e) deliver to Seller the written opinion of Akin, Gump,
Strauss, Xxxxx & Xxxx, L.L.P., substantially in the form attached hereto as Form
F-9, dated as of the Closing Date;
---
(f) deliver such additional documents as are reasonably
required to consummate the transaction contemplated by this Agreement;
(g) deliver to Seller a Limited Liability Company Agreement
dated as of the Closing Date, executed by Buyer; and
(h) deliver to Seller evidence of the approval of the
shareholders of Buyer of the transactions contemplated by this Agreement.
4.4 Title Company Obligations at Closing. At Closing, the Title
---------------------------------------
Agent will deliver a copy of the Title Commitment, "marked up" to continue the
effective date through recording of the deed of conveyance and to delete the
standard and gap exceptions, and otherwise in the form required hereunder.
4.5 Credits and Prorations. Except as otherwise specifically set
-----------------------
forth in this Agreement, ad valorem property taxes and other revenues and
expenses of, and impounds, prepayments or deposits affecting or related to, the
Property (including rents and other sums due under Leases as hereinafter set
forth) will be prorated between Seller and Buyer as of the Adjustment Date, and
any security deposits held pursuant to Leases will be paid or credited to Buyer.
Ad valorem property taxes, with maximum allowable discount for early payment, if
any, will be prorated on the basis of actual taxes for the year of Closing, if
known, or otherwise on the basis of ad valorem property taxes for the
immediately preceding year. Any Closing proration of taxes will be reprorated at
the request of either party when the actual tax xxxx for the year of Closing is
available. Special assessment liens certified, or for which the work has been
substantially completed, as of the Closing Date will be paid by Seller, and any
other special assessments will be assumed by Buyer.
19
Page 28 of 64 Pages
(a) Rent.
(i) Current Rent. Rents that have actually been paid
-------------
to Seller for the month in which Closing occurs
will be prorated.
(ii) Past Due Rents. With respect to any rents that are
--------------
payable for the month in which Closing occurs that have not actually been paid
and any past due rents for periods other than the month in which Closing occurs,
such rents shall not be prorated or adjusted. Seller may elect to retain the
right to collect, xxx for and recover such rents, or assign or transfer such
past due rents to Buyer in consideration of Buyer's agreement to use good faith
efforts to collect such amounts on behalf of Seller and to pay such past due
rents to Seller as and when collected; provided, however, that nothing contained
herein shall be construed to require Buyer to institute any Action to collect
such past due amounts.
(iii)Commissions and Tenant Items. Other than the
-------------------------------
items set forth in the Rent Rolls, Schedule 5.1(kk) or Schedule 5.1(h), Buyer
------
will be responsible for, and will receive no credit toward the Closing Purchase
Price with respect to, all real estate commissions, tenant improvement
allowances and tenant inducements due for any Approved Leases. Buyer will be
responsible for, and will receive no credit toward the Closing Purchase Price
with respect to, any rent abatements or other rent concessions which are
applicable to that portion of the term of any Lease or Approved Lease which
follows the Adjustment Date. With respect to the items set forth in Section
5.1(kk), Schedule 5.1(h) and in the Rent Roll, Seller shall remain responsible
-------
for and shall pay the cost of such items. The foregoing sentence will survive
Closing.
(iv) CAM Charges. If any common area maintenance
------------
charges ("CAM Charges") and/or other payments due from tenants for any period
------------
prior to the Adjustment Date (A) have been billed as of the Adjustment Date
based upon an estimated budget and are subject to recalculation and adjustment
after the Adjustment Date based upon actual common area maintenance expenses,
(B) have not been billed, and/or (C) if billed, have not been collected by
Seller as of the Closing Date, then Buyer promptly will adjust CAM Charges to
actual expenses, and upon receiving any CAM Charges and/or other payments
(including such adjusted payments) from Tenants will pay over to Seller the
proportion of such CAM Charges and/or other payments from Tenants which is due
Seller for the period prior to the Adjustment Date. Notwithstanding the
foregoing, CAM Charges and/or other payments due from tenants, to the extent
ascertainable and payable, will be credited and paid to Seller, on an as
collected basis. Buyer will exercise reasonable diligence in the collection of
any such amounts and will pay to Seller, within five (5) days after receipt, the
amount to which Seller is entitled hereunder. The provisions of this Section
4.5(a) will survive Closing and delivery of the deed of conveyance.
------
(b) Post-Closing Adjustments. Any matters specified in this
------------------------
Section that cannot reasonably be determined and apportioned between Seller and
Buyer on the Closing Date will be identified by Buyer and Seller in writing at
Closing, and will be subject to final settlement at such time as such matter is
finally determined (but in no event later than one hundred eighty (180) days
after the Closing Date). Such apportionments will be effective as of the
20
Page 29 of 64 Pages
Adjustment Date. The provisions of this Section 4.5(b) will survive Closing and
------
delivery of the deed of conveyance.
4.6 Closing Costs. Seller will pay (a) the fees of its legal counsel
-------------
in connection with this transaction, (b) the recording fees and transfer taxes,
and any sales tax on Personalty, if applicable, payable by reason of the
transfer of the Property, (c) the costs of preparation of the Surveys of, and
environmental and engineering reports for each Project prepared for Seller and
provided to Buyer prior to the Agreement Date, and (d) the cost of issuing the
Title Commitments. Buyer will pay (i) the fees of its legal counsel in
connection with this transaction, (ii) other than as set forth in the foregoing
subparagraph (c), all costs and expenses related to any due diligence performed
by Buyer or on Buyer's behalf at the Property or any financing obtained by
Buyer, and (iii) the premium(s) for the Title Policies.
4.7 Conditions Precedent to Obligation of Buyer. Subject to the
-----------------------------------------------
terms and provisions of Section 5.4(d) and (e) hereof, the obligation of Buyer
------ ---
to consummate the transaction hereunder will be subject to the fulfillment on or
before the Closing Date of all of the following conditions, any or all of which
may be waived by Buyer in its sole discretion:
(a) All of the representations and warranties of Seller
contained in this Agreement will be true and correct in all material respects as
of the Closing Date.
(b) Seller will have performed and observed, in all
material respects, all covenants and agreements of this Agreement to be
performed and observed by Seller as Closing Date.
(c) Buyer will have received delivery, on or prior to
Closing, of Tenant Estoppels and SNDA's from the Tenants identified on Schedule
S-4.7(d) and at least 50% (as determined by gross leaseable area) of the
remaining Tenants (such amount being referred to herein as the "Tenant
------
Estoppel/SNDA Threshold Amount"). All Tenant Estoppels which are returned by the
------------------------------
Tenants without change or with only changes due to the passage of time (or with
typographical revisions or corrections or limited qualifications, including a
qualification to the best of Tenant's knowledge except as to (i) the payment of
monetary obligations, and (ii) statements that the lease or other documents
attached to the Tenant Estoppel are true, complete and correct) or additions or
deletions which are either in accordance with the Tenant's Lease (including use
of a pre-approved tenant estoppel form attached to such Tenant's Lease) or are
properly completed to the reasonable satisfaction of Buyer in accordance with
the provisions of this Agreement will be deemed to be acceptable by Buyer.
Notwithstanding the foregoing, it is expressly understood and agreed that a
failure to deliver sufficient Tenant Estoppels and/or SNDA's to reach the Tenant
Estoppel Threshold Amount will be a failure of condition only and will not be a
default hereunder. Seller will deliver to Buyer copies of Tenant Estoppels and
SNDA's promptly as received prior to Closing; and upon Buyer's request, Seller
will deliver to Buyer copies of the Tenant Estoppel and SNDA requests submitted
to Tenants.
21
Page 30 of 64 Pages
(d) There must not be pending or, to the Knowledge of
Seller, threatened, any Claim by or before any Authority, arbitrator or mediator
seeking to restrain, prohibit or invalidate the transactions contemplated
hereby.
(e) Lender, pursuant to its right under the first paragraph
of the Loan Commitment, shall not have modified the Loan Commitment based upon
market reception in a manner which would have a material adverse effect on Buyer
(for which purpose Buyer acknowledges that the increase in interest rate margin
permitted in the Loan Commitment will not have a material adverse effect on
Buyer) and has caused Buyer, pursuant to its right under the Loan Commitment, to
terminate the Loan Commitment and receive a refund of its commitment fee
thereunder.
A failure of a condition to Buyer's obligation to close as set forth
in the foregoing Sections 4.7(a) or (b) will be governed exclusively by Sections
5.4(d) and (e) hereof; but if a condition to Buyer's obligation to close as set
--------------
forth in the foregoing Sections 4.7(c), (d) or (e) is not satisfied, Buyer's
-------------------
remedy with respect thereto will be to terminate this Agreement, subject to the
provisions of Section 13.20 hereof.
-----
4.8 Conditions Precedent to Obligation of Seller. The obligation of
---------------------------------------------
Seller to consummate the transactions contemplated by this Agreement will be
subject to the fulfillment on or before the Closing Date of all of the following
conditions, any or all of which, other than Section 4.8(a), may be waived by
------
Seller in its sole discretion:
(a) Seller will have received consent to the transactions
contemplated by this Agreement from any lender holding a mortgage on any Project
whose consent is required pursuant to the applicable mortgage or related loan
documents (a true and correct copy of the unexecuted conditional consent of
NWMLIC being attached hereto as Schedule S-4.8(c));
---------
(b) all of the representations and warranties of Buyer
contained in this Agreement will be true and correct in all material respects as
of the Closing Date;
(c) Buyer will have performed and observed, in all material
respects, all covenants and agreements of this Agreement to be performed and
observed by Buyer as of the Closing Date; and
(d) There must not be pending or, to the knowledge of
Buyer, threatened, any Claim by or before any Authority, arbitrator or mediator
seeking to restrain, prohibit or invalidate the transactions contemplated
hereby.
If a condition to Seller's obligation to close as set forth in this
Section 4.8 is not satisfied, or waived by Seller, Seller's remedy with respect
thereto will be to terminate this Agreement, subject to the provisions of
Section 13.20 hereof.
-----
22
Page 31 of 64 Pages
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1 Representations and Warranties of Seller. Seller hereby makes
------------------------------------------
the following representations and warranties to Buyer as of the Agreement Date:
(a) Organization and Authority. Seller has been duly formed
--------------------------
and is validly existing under the laws of the State of Florida. Seller has the
full right and authority to enter into this Agreement and to transfer all of the
Property, including all of the Projects, to be conveyed by Seller pursuant
hereto and to consummate or cause to be consummated the transactions
contemplated herein to be made by Seller. Seller is qualified to transact its
business and is in good standing in each of the jurisdictions where Seller is
required to be so qualified in connection with each Project and has all
requisite powers and all Authorizations, consents and approvals necessary to
carry on its business as now conducted, except where the failure to so qualify
or be in good standing or to have the requisite Authorizations, consents and
approvals would not have a material adverse effect on the ability of Seller to
perform its obligations under this Agreement. No other material consent,
approval or authorization is necessary, including, without limitation, the
approval by Seller of its stockholders, to the consummation of the transactions
contemplated hereby. All consents, approvals, and Authorizations necessary to
consummate the transactions contemplated hereby have been obtained. The person
signing this Agreement on behalf of Seller is authorized to do so.
(b) Authorization, Execution and Disclosure. This Agreement
---------------------------------------
has been duly authorized by all necessary action on the part of Seller, has been
duly executed and delivered by Seller, constitutes the valid and binding
agreement of Seller and is enforceable in accordance with its terms. Other than
Seller, no other Person has an ownership interest in the Property.
(c) Securities and Exchange Commission Filings. Seller has
------------------------------------------
furnished or made available to the Buyer a true and complete copy of each report
filed by Seller with the Securities and Exchange Commission (the "Commission")
----------
since January 1, 1999, and all material correspondence between the Commission
and Seller since such date. None of such documents as of the date it was
respectively filed with the Commission contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements included in the documents referred to in the first sentence of this
Section 5.1(c) (i) fairly present in all material respects the financial
------
position of Seller and its subsidiaries as a whole and the results of operations
as at and for the respective periods then ended, subject to year-end adjustments
with respect to such financial statements which are unaudited; and (ii) have
been prepared in accordance with GAAP. Except as set forth in Schedule S-5.1(c)
--------
hereof, since the date upon which each of the above referenced reports were
filed with the Commission, there has been no material adverse change in the
business operations or financial position of Seller.
23
Page 32 of 64 Pages
(d) Bankruptcy. No Act of Bankruptcy has occurred and is
----------
continuing with respect to Seller.
(e) Seller Is Not a "Foreign Person". Seller is not a
------------------------------------
"foreign person" within the meaning of Section 1445 of the Internal Revenue
Code, as amended (i.e., Seller is not a foreign corporation, foreign
partnership, foreign trust, foreign estate or foreign person as those terms are
defined in the Internal Revenue Code and regulations promulgated thereunder).
(f) No Violation. Except as set forth in Schedule S-5.1(f),
------------ --------
the execution, delivery and performance by Seller of this Agreement, and all
other agreements contemplated hereby, and the fulfillment of and compliance with
the respective terms hereof and thereof by Seller, do not and will not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default or event of default under (whether with or without due
notice, the passage of time or both), (iii) result in the creation of any Lien
upon Seller's assets, including, without limitation, any or all of the Projects
pursuant to, (iv) give any third party the right to modify, terminate or
accelerate any obligation under, (v) result in a violation of or (vi) require
any authorization, consent, approval, exemption or other action by, notice to,
or filing with any third party or Authority pursuant to, the charter or bylaws
of Seller or any Applicable Law (including, without limitation, approvals
pursuant to the Xxxx-Xxxxx-Xxxxxx Act), Order or Contract to which Seller or its
properties are subject, which could individually or in the aggregate have an
adverse effect on title to the Property or any portion thereof or which could
interfere in any respect with the consummation by Seller of the transaction
contemplated by this Agreement. Seller has complied with all Applicable Laws in
connection with the execution, delivery and performance of this Agreement, the
agreements contemplated hereby and the transactions contemplated hereby and
thereby.
(g) Pending Claims. Except as set forth in Schedule
1 ---------------
S-5.1(g) hereof, there are no Claims pending or, to the Knowledge of Seller,
---------
threatened against the Property or Seller that (i) in any manner raise any
question affecting the validity or enforceability of this Agreement, any
agreements affecting or pertaining to the Property, any agreement or instrument
to which Seller is a party or by which it is bound and any agreement
contemplated by this Agreement, (ii) could materially and adversely affect the
business, financial position or results of operations of the Property or any of
the Projects, (iii) could materially and adversely affect the ability of Seller
to perform its obligations hereunder or under any document to be delivered
pursuant hereto, (iv) could create a Lien on the Property or any of the Projects
or any part thereof or interest therein or (v) could otherwise materially and
adversely affect the Property or any of the Projects, any part thereof or
interest therein or the use, operation, condition or occupancy thereof.
------------------------
1 The Seller shall remain responsible for litigation listed on Schedule
S-5.1(g).
--------
24
Page 33 of 64 Pages
(h) Leases. Seller is the lessor or landlord or the
-------
successor lessor or landlord under the Leases. Seller has delivered true,
correct and complete copies of each Lease, including all amendments thereto, to
Buyer. Except as set forth on the Lease Schedule, there are no parties in
possession of any Project, the Property or any portion thereof, except for the
tenants under the Leases. There are no other leases or occupancy agreements to
which Seller is a party affecting the Property or any Project other than the
Leases as set forth on the Lease Schedule. Except as set forth on Schedule
S-5.1(h), Seller has received no written notice of any intention by any tenant
--------
under a Lease to (i) cancel or terminate the same or (ii) vacate all or any
portion of such tenant's leased premises. To the extent that any of the Leases
call for security, such security remains on deposit with Seller in accordance
with all Applicable Laws and has not been applied towards any payment due under
said Leases except as set forth on Schedule S-5.1(h). Except as set forth in
--------
Schedule 5.1(h), Seller has not received any advance rent or advance
------
compensation under any of said Leases in excess of one month. To Seller's
Knowledge, no party is in default under any Lease except as set forth on
Schedule S-5.1(h). To Seller's Knowledge, Seller has performed all obligations
--------
required of it under all of the Leases and there remain no unfulfilled
obligations of Seller under the Leases, the nonperformance of which could
entitle a tenant to damages under such Lease or could cause Seller to be in
default under such Lease. Except as shown on the Lease Schedule, (i) no Lease
has been modified, altered or amended in any respect, (ii) no tenant has the
right to cancel or terminate its lease, to renew or extend its lease, or to
expand or contract the leased premises covered thereby and (iii) no tenant has
any interest in the Property other than the leasehold possessory interest set
forth in such tenant's lease. Except as shown on Schedule S-5.1(h), no tenant
--------
has given written notice to Seller of (x) its intention to institute any Claim
with respect to any Lease and (y) any dispute regarding any CAM Charges billed
to such tenant. Except as set forth on the Lease Schedule or Schedule S-5.1(h),
--------
no tenant or occupant is entitled to any rebates, allowances, concessions, free
rent or rent abatement for any period after the consummation of the transaction
contemplated hereby. To Seller's Knowledge, each of the Leases is valid and
subsisting and in full force and effect in accordance with its terms and
constitutes the legal, valid, binding and enforceable obligation of the tenant
thereunder. To Seller's Knowledge, each tenant has accepted the premises covered
by its Lease and is in possession of such premises in accordance with its Lease.
Except as set forth on the Lease Schedule or Schedule S-5.1(h), all initial
--------
installation work, if any, required of Seller has been fully performed, paid for
and accepted by the tenant. Except as set forth on Schedule S-5.1(h), to
--------
Seller's Knowledge, no tenant has any pending Claim, offsets or counterclaims
against Seller which, if successfully asserted, would reduce the rent payable
under such tenant's lease or result in the cancellation or termination thereof.
There are no unperformed obligations to provide any tenant with any work and/or
services, including, without limitation, painting, repair, alteration,
carpeting, appliances or other equipment or work of any kind under any Lease,
except as set forth on Schedule S-5.1(h). All of the Leases are the result of
-------
arms-length negotiations between the parties thereto. To Seller's Knowledge,
none of the rents or other charges billed to, or collected from, any tenant
under the Leases violates any Applicable Laws to which Seller is subject. None
of the Leases and none of the rents or other amounts payable thereunder have
been assigned, pledged or encumbered by Seller except for any assignments,
pledges or encumbrances which will be fully released on or before the Closing
Date.
25
Page 34 of 64 Pages
(i) No Property Violations. Except as set forth in the
------------------------
Property Inspection Reports, to Seller's Knowledge, each Project complies in all
material respects with all Applicable Laws. To Seller's Knowledge, Seller is not
in default or violation of any order, writ, injunction, decree or demand of any
Authority. Except as set forth on Schedule S-5.1(i), Seller has not received any
--------
written notification from any Authority (i) that any Project is in violation of
any applicable fire, health, building, use, occupancy or zoning laws or (ii)
that any work is required to be done upon or in connection with any Project in
order to comply with such laws.
(j) Condemnation. Except as set forth in Schedule S-5.1(j),
------------ --------
no condemnation or similar proceedings relating to any Project is pending or, to
Seller's Knowledge, threatened. Except as set forth in Schedule S-5.1(j), Seller
has no Knowledge of any change or proposed change in (i) the route, grade or
width of, or otherwise affecting, any street, creek or road adjacent to or
serving any Project or (ii) the existing zoning and/or land use restrictions
affecting any Project.
(k) Insurance. Seller has obtained and delivered to Buyer
---------
copies of all insurance policies covering each Project and the Property. No
Claims are outstanding under any such policy, and neither Seller, nor to
Seller's Knowledge any other person, has done, by act or omission, anything
which would impair coverage of any such policy. All of Seller's insurance
policies are valid and in full force and effect and Seller has complied in all
material respects with all requirements of the insurance carriers of such
insurance policies. Except as set forth in Schedule S-5.1(k), Seller has not
--------
received any written notice from any insurance company or board of fire
underwriters of any defects or inadequacies in or on the Property or any
Project, or any part or component thereof that would materially and adversely
affect the insurability of the Property, any Project, or cause any material
increase in the premiums for insurance for the Property or any Project that have
not been cured or repaired.
(l) Utilities. Each Project is served by all utilities and
---------
utility facilities necessary to serve the current use and occupancy of such
Project. Except as set forth on the Survey(s), to Seller's Knowledge, all
utilities required for the operation of each Project either enter each such
Project through adjoining streets, or they pass through adjoining land, in
accordance with valid public easements or irrevocable private easements. To
Seller's Knowledge, all of said utilities are in compliance with all Applicable
Laws and all installation and connection charges therefor have been paid in
full.
(m) Curb Cuts. Except as set forth on the Survey(s), to
----------
Seller's Knowledge, all curb cut street opening permits or licenses required for
vehicular access to and from each Project from any adjoining public street have
been obtained and paid for and are in full force and effect.
(n) No Special Taxes. Except as set forth in Schedule
------------------
S-5.1(n), Seller has no Knowledge of, nor has it received any written notice of,
any special taxes or assessments relating to the Property or any part thereof or
any planned public improvements that may result in a special tax or assessment
against the Property.
(o) Title To Real Property. Except as set forth in the
------------------------
Title Commitments, Seller is the sole owner of fee simple absolute title to the
Real Property.
26
Page 35 of 64 Pages
(p) Personalty. All of the Personalty being conveyed by
----------
Seller hereunder is free and clear of all Liens except for those Liens which
will be discharged by Seller at Closing, and Seller has good and merchantable
title thereto and the right to convey the same in accordance with the terms of
this Agreement. Except as set forth on Schedule S-5.1(p) hereto, none of the
--------
Personalty is leased.
(q) Operating Agreements. There are no management, service,
--------------------
supply, or maintenance, employment or other contracts in effect with respect to
the Property of any nature whatsoever, written or oral, other than the Operating
Agreements listed on the Operating Agreements Schedule. Seller has performed all
of its obligations under each of the Operating Agreements in all material
respects and, to Seller's Knowledge, no fact or circumstance has occurred which,
by itself or with the passage of time or the giving of notice or both, would
constitute a default under any of the Operating Agreements. To Seller's
Knowledge, all other parties to the Operating Agreements have performed all of
their obligations thereunder in all material respects, and are not in default
thereunder in any material respect. Seller has received no written notice of any
intention by any of the parties to any of the Operating Agreements to cancel or
terminate the same. Seller is not a party to any other agreement or instrument
or subject to any other restriction which would materially and adversely affect
any Project.
(r) Employment Matters. Neither Seller nor its management
-------------------
company, if any, is a party to any oral or written employment contracts or
agreements, including, without limitation, with any property level employees,
with respect to any Project which would in any way be binding on Buyer or any
such Project.
(s) Historical Districts. To Seller's Knowledge, no
----------------------
Project, nor any portion of any Project, is listed in any national, state or
local register of historic places or areas.
(t) Hazardous Substances. Neither Seller nor, to Seller's
---------------------
Knowledge, any previous owner, tenant, occupant or user of any Project or any
other person, has engaged in or permitted any operations or activities upon, or
any use or occupancy of any Project or any portion thereof, for the purpose of,
or in any way involving, the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Substances on, under, in or about any such Project in violation of any
Applicable Laws. Except as set forth in the Environmental Reports, to Seller's
Knowledge, no Hazardous Substances have migrated from or to any Project upon,
about, or beneath other properties in violation of any Environmental
Requirements. To Seller's Knowledge, no Project nor any Project's existing or
prior uses fail or failed to materially comply with Environmental Requirements.
Seller has no Knowledge of any permits, licenses or other Authorizations which
are required under any Environmental Requirements with regard to the current
uses of any Project which have not been obtained and complied with. To Seller's
Knowledge, neither Seller nor any prior owner, occupant or user of any Project
has received any written notice concerning any past or present alleged violation
of or non-compliance with Environmental Requirements in connection with any such
Project or any liability for Environmental Damages in connection with any such
Project for which Seller (or Buyer after Closing) may be liable. Except as set
forth in the Environmental Reports, to Seller's Knowledge, no Hazardous
Substances are constructed, deposited, stored or otherwise located on, under, in
27
Page 36 of 64 Pages
or about any Project in violation of any Environmental Requirements. There
exists no Claim, pending, or to Seller's Knowledge, threatened, relating to any
alleged violation of Environmental Requirements on any Project, or from the
suspected presence of Hazardous Substances thereon, or relating to any
Environmental Damages. Except as set forth in the Environmental Reports, to
Seller's Knowledge, no underground or above ground chemical treatment or storage
tanks, or gas or oil xxxxx, are found at any Project. To Seller's Knowledge,
Seller has provided to Buyer, in writing, all information relating to
environmental conditions in, on, under or from any of the Projects and the
Property contained in Seller's current files and records, including reports
relating to Hazardous Substances in, on, under or migrating to or from any of
the Projects and the Property and/or to the environmental condition of the
Projects and the Property.
(u) Americans With Disabilities Act. Except as set forth on
-------------------------------
Schedule S-5.1(u) or in the Property Inspection Reports, to Seller's Knowledge,
--------
each Project is in compliance in all material respects with the Americans With
Disabilities Act of 1990, 42 U.S.C. xx.xx. 12101-12213, and any other similar
public accommodation laws and neither Seller nor, to Seller's Knowledge, any
prior owner of any Project has received any written notice concerning any
alleged violation of the aforementioned public accommodation laws.
(v) Structural Condition. Except as set forth on Schedule
---------------------
S-5.1(v) or in the Property Inspection Reports, to Seller's Knowledge, each
--------
Project, including, without limitation, all buildings, improvements, parking
facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC
systems, fire protection systems, electrical systems, equipment, elevators,
exterior sidings and doors, landscaping, irrigation systems and all structural
components, are in good condition, order and repair in all material respects,
there exists no structural or other material defects or damages in any Project,
whether latent or otherwise, and Seller has not received written notice from any
insurance company or bonding company of any defects or inadequacies in any
Project, or any part thereof, which would materially and adversely affect the
insurability of the same or cause the imposition of extraordinary premiums or
charges thereon or of any termination or threatened termination of any policy of
insurance or bond. Except as set forth on Schedule S-5.1(v) or in the Property
--------
Inspection Reports, to Seller's Knowledge, each Project is free from unrepaired
damage caused by fire or other casualty. Except as set forth on Schedule
S-5.1(v) or in the Property Inspection Reports, to Seller's Knowledge, all
--------
liquid and solid waste disposal, septic and sewer systems located on each
Project are in a good and safe condition and repair and in compliance in all
material respects with all Applicable Laws. Seller has received no written
notice of any, and to Seller's Knowledge, there is no, latent or patent defect
in (i) the Improvements or structural elements thereof or, mechanical systems
therein (including, without limitation, the roof or roofs of the Improvements
and all heating, ventilating, air conditioning, plumbing, electrical, utility
and sprinkler systems therein) or (ii) the utility system servicing the
Projects.
(w) Zoning and Platting. Except as set forth on Schedule
--------------------
S-5.1(w) or in the Zoning Letters, to Seller's Knowledge, the present zoning
--------
(including all bulk and height restrictions and minimum parking space
requirements) of the Property and each individual Project permits the current
use thereof without special variances (other than those currently utilized and
28
Page 37 of 64 Pages
maintained) and the Property and each individual Project is in compliance with
present zoning (including all bulk and height restrictions and minimum parking
space requirements) without dependence upon any adjoining land or improvements
(other than those being conveyed to Buyer pursuant hereto). Seller has no
Knowledge of any fact, proceeding or threatened action or proceeding which could
result in a modification or termination of the present zoning of any Project.
Except as set forth on Schedule S-5.1(w), to Seller's Knowledge, each Project is
--------
properly platted as a separate lot under Applicable Laws, and constitutes a
separate tax lot and is not taxed in conjunction with any property owned by
Seller and not being conveyed by Seller to Buyer pursuant to this Agreement.
(x) Access. Except as set forth on the Surveys or in the
------
Title Commitments, to Seller's Knowledge, each Project has full and free access
to and from public highways, streets or roads and Seller has no Knowledge of any
pending or threatened governmental proceeding or any other fact or condition
which would limit or result in the termination of such Project's existing access
to and from public highways, streets or roads. To Seller's Knowledge, all roads
necessary for the use of each Project for their current respective uses have
been completed, are physically open and dedicated to public use and have been
accepted by all Authorities.
(y) No Commitments. Except as set forth on Schedule
---------------
S-5.1(y) and in the Permitted Exceptions, to Seller's Knowledge, no written
-------
commitments have been made to any Authority, utility company, school board,
church or other religious body, or any homeowners' association or any other
organization, group or individual, relating to the Property which would impose
an obligation upon Buyer to make any contribution or dedication of money or land
or to construct, install or maintain any improvements of a public or private
nature on or off any Project. Without limiting the generality of the foregoing,
Seller is not a party to any paving agreements or undertakings, payback
agreements, revenue bonds, utility debt service expenses or other charges or
expenses upon or relating to any of the Projects or applicable thereto.
(z) No Other Property Interests. To Seller's Knowledge,
-----------------------------
there are no property interests, buildings, structures or other improvements or
personal property that are owned by Seller which are necessary for the operation
of any Project that are not being conveyed pursuant to this Agreement.
(aa) Full and Accurate Disclosure. All information submitted
----------------------------
by Seller to Buyer and in all financial statements, rent rolls, reports,
certificates and other documents submitted in connection with this Agreement and
all statements of fact made by Seller in this Agreement, are accurate, complete
and correct in all material respects. No statement of fact made by Seller in
this Agreement contains any untrue statement of a material fact or omits to
state any material fact necessary to make statements contained herein not
misleading. There is no material fact presently known to Seller which has not
been disclosed to Buyer which materially and adversely affects, or might
materially and adversely affect, the Property or any Project, individually or in
the aggregate.
(bb) No Plan Assets. Seller is not an "employee benefit
---------------
plan," as defined in Section 3(3) of ERISA, subject to Title I of ERISA, and
none of the assets of Seller constitutes or will constitute "plan assets" of one
29
Page 38 of 64 Pages
or more such plans within the meaning of 29 C.F.R. Section 2510.3-101. In
addition, (a) Seller is not a "governmental plan" within the meaning of Section
3(32) of ERISA and (b) transactions by or with Seller are not subject to State
statutes regulating investment of, and fiduciary obligations with respect to,
governmental plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect, which prohibit or otherwise restrict the
transactions contemplated by this Agreement.
(cc) Use of Property. Except for the Birmingham Colonnade
---------------
Retail Center and as otherwise set forth on Schedule S-5.1(cc), each Project is
---------
used exclusively for office purposes and other appurtenant and related uses. The
Birmingham Colonnade Retail Center is used exclusively for retail purposes and
other appurtenant and related uses.
(dd) Certificate of Occupancy; Licenses. Except as set forth
----------------------------------
on Schedule S-5.1(dd), to Seller's Knowledge, all certifications, permits,
---------
licenses and approvals, including, without limitation, certificates of
completion and occupancy permits (for building shells and individually leased
space) required for the legal use, occupancy and operation of each Project as
each such Project currently exists (collectively, the "Licenses"), have been
obtained and are in full force and effect and are not subject to revocation,
suspension or forfeiture. To Seller's Knowledge, the use being made by each
Project is in material conformity with the certificate of occupancy issued for
each Project and no violations of such certificates of occupancy exist.
(ee) Flood Zone. Except as shown on the Surveys, to Seller's
----------
Knowledge, none of the Improvements on any Project are located in an area as
identified by the Federal Emergency Management Agency as an area having special
flood hazards and, if so located, flood insurance is in full force and effect
with respect to such Project.
(ff) Tax Reduction Proceedings. There are no Tax Reduction
--------------------------
Proceedings pending other than as set forth on Schedule S-5.1(ff).
---------
(gg) Taxes. Seller has filed all returns, declarations,
-----
reports, claims for refunds, or information returns or statements relating to
taxes required to be filed with any governmental Authority, including any
schedules or attachments thereto, and including any amendments thereof
(collectively, "Tax Returns"). Except for the extensions of its calendar year
2000 federal and state income tax returns, Seller is not the beneficiary of any
extension of time within which to file any Tax Return. No Action has ever been
initiated or threatened by an Authority in a jurisdiction where Seller does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no Liens on the Property, any Project, or any of the assets of Seller
that arose in connection with any failure (or alleged failure) to pay any Tax.
All such Tax Returns were accurate, correct and complete in all respects and
accurately reflect the facts regarding the income, business, assets, operations,
activities, status, or other matters of Seller or any other information required
to be shown thereon. All Taxes that Seller owes (whether or not shown on any Tax
Return) have been paid. All sales, use and/or occupancy taxes applicable to the
Property or the Seller as they relate to the Property which are due and payable
have been paid.
30
Page 39 of 64 Pages
(hh) Consents. Attached hereto as Schedule S-5.1(hh) is a
-------- ---------
true and complete list of all Projects subject to a mortgage that requires the
consent of its respective lender.
(ii) Construction in Accordance with Plans. Except as set
---------------------------------------
forth in the Property Inspection Reports, to Seller's Knowledge, all buildings,
improvements and fixtures (including all streets, curbs, sidewalks, sewers and
other utilities) forming a part of the Property have been completed and
installed substantially in accordance with the plans and specifications approved
by the Authority having jurisdiction thereof.
(jj) Rent Roll. The rent roll attached hereto as Schedule
---------
S-5.1(jj) (the "Rent Roll") is true, correct and complete and accurately
--------- ----------
reflects the economic terms contained in each of the Leases and actual rents and
additional rents billed and received thereunder.
(kk) Leasing Commissions. Except as set forth on the Rent
--------------------
Roll or on Schedule S-5.1(kk), no brokerage or leasing commissions or other
---------
compensation is due and payable to any person, firm, corporation or other entity
with respect to or on account of any of the Leases or the rents or revenues to
be derived therefrom or any extension or renewals thereof.
(ll) No Unpaid Charges. Except for obligations incurred in
-----------------
the ordinary course of business which are not delinquent, there are no unpaid
charges, debts, liabilities, claims or obligations arising form the
construction, occupancy, ownership, use or operation of the Projects or the
Property (including, without limitation, disputed CAM charges, taxes or other
charges) which could give rise to any mechanic's or materialmen's or other
statutory lien against the Property, or any part thereof, or for which Buyer
will be responsible.
(mm) Financial Information. Except as set forth on Schedule
---------------------
S-5.1(mm), all financial data, including, without limitation, the statements of
---------
cash flow and income and operating expense, that have been delivered to Buyer in
respect of the Projects and the Property (i) are true, complete and correct in
all material respects, (ii) accurately represent the financial condition of the
Projects and the Property as of the date of such reports in all material
respects and (iii) have been prepared in accordance with GAAP throughout the
periods covered, except as disclosed therein. To Seller's Knowledge, Seller does
not have any contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments reasonably likely to have a material adverse effect on any Project
or the Property or other operation thereof, except as referred to or reflected
in such financial statements.
(nn) No Option. Except as set forth in Article XII hereof,
--------- ---
there are no outstanding agreements (written or oral) pursuant to which Seller
(or, to Seller's Knowledge, any predecessor to or representative of Seller) has
agreed to sell or has granted an option or right of first refusal to purchase
the Property, any Project, or any part thereof.
(oo) Investment Company Act. Seller is not an "investment
-----------------------
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
31
Page 40 of 64 Pages
(pp) White & Case LLP Legal Opinion. On and as of the
-----------------------------------
Closing Date, all factual assumptions made in the White & Case LLP Legal Opinion
referenced in Section 4.2(q) hereof, including, but not limited to, the exhibits
attached thereto, shall be true and correct in all material respects and any
factual assumptions made in any subsequent opinion required to be delivered to
Buyer, including, but not limited to, the exhibits attached thereto, shall be
true and correct in all material respects on the date made.
(qq) Disclosure. All relationships or financial interests of
----------
Xxxx X.X. Xxxxxxxx, Xxx Xxxxxxx and Xxxxxx X. Xxxxxxx with and in Buyer and its
Affiliates have been disclosed, or are known, to the board of directors of the
Seller.
5.2 Knowledge Defined. The "knowledge" of Seller ("Knowledge") shall
----------------- ---------
mean the actual knowledge of Seller and of Seller's Representatives after due
inquiry. Such due inquiry shall mean an inquiry of Seller's personnel involved
in the operation, ownership, maintenance and management of the Property and the
current general manager for the Property, and such inquiry shall also include
the direction by Seller to such personnel and general manager to review all
relevant files in their possession relating to the ownership, operation,
maintenance and management of the Property; provided, however, notwithstanding
anything contained herein to the contrary, the terms "Knowledge", "Knowledge of
Seller" or "Seller's Knowledge" shall in no event be construed, by imputation or
otherwise, to include matters that Seller or Seller's Representatives "should
have known," but did not actually know in fact.
5.3 Seller Indemnification.
----------------------
(a) Seller will indemnify and hold harmless Buyer, its
Affiliates, partners, directors, officers, stockholders, members,
representatives, advisors, agents, and any successor and assignee which is an
Affiliate of Buyer (collectively, the "Buyer Indemnitees") from and pay any and
-----------------
all Damages, directly or indirectly, resulting from, relating to, arising out
of, or attributable to any one of the following: (i) any breach of any
representation or warranty Seller has made in this Agreement, (ii) any breach by
Seller of any covenant or obligation of Seller in this Agreement, and (iii)
cleanup, remediation or removal of Hazardous Substances or other environmental
conditions on the Property to the extent (A) required by law and (B) existing on
the Property on or before the Closing Date. The term "Damages" as used in this
Section 5.3 is not limited to matters asserted by third parties against Buyer,
---
but includes Damages incurred or sustained by Buyer in the absence of third
party Claims.
(b) Indemnification Third Party Claim Procedures. If any
----------------------------------------------
third party Claim is commenced in which any Buyer Indemnitee is a party that may
give rise to a Claim for indemnification against Seller hereunder (an "Buyer
-----
Indemnification Claim") then such Buyer Indemnitee will promptly give notice to
----------------------
Seller of such Claim. Failure to notify Seller of such Claim will not relieve
Seller of any liability that Seller may have to the Buyer Indemnitee, except to
the extent the defense of such claim is materially and irrevocably prejudiced by
the Buyer Indemnitee's failure to give such notice. Seller will have the right
to defend against an Buyer Indemnification Claim, at its own expense, with
counsel of its choice reasonably satisfactory to the Buyer Indemnitee if (i)
within fifteen (15) days following the receipt of notice of the Buyer
32
Page 41 of 64 Pages
Indemnification Claim, Seller notifies the Buyer Indemnitee in writing that
Seller will indemnify the Buyer Indemnitee from and against the entirety of any
Damages such Buyer Indemnitee may suffer resulting from, relating to, arising
out of, or attributable to the Buyer Indemnification Claim; (ii) the Buyer
Indemnification Claim involves only money damages and does not seek an
injunction or other equitable relief and (iii) Seller continuously conducts the
defense of the Buyer Indemnification Claim actively and diligently. So long as
Seller is conducting the defense of the Buyer Indemnification Claim in
accordance with this Section 5.3(b), (i) Buyer Indemnitee may retain separate
co-counsel at its own cost and expense and participate in the defense of the
Buyer Indemnification Claim, (ii) Buyer Indemnitee will not consent to any
settlement or the entry of any Order with respect to the Buyer Indemnification
Claim without the prior written consent of Seller (not to be withheld
unreasonably) and (iii) Seller will not consent to any settlement or the entry
of any Order with respect to the Buyer Indemnification Claim without the prior
written consent of the Buyer Indemnitee (not to be withheld unreasonably).
5.4 Survival of Seller's Representations, Warranties and Covenants.
--------------------------------------------------------------
(a) The representations, warranties and covenants of Seller
set forth in this Agreement will survive Closing for a period of eighteen (18)
months thereafter; except that the representations and warranties set forth in
Section 5.1(a) (Organization and Authority), Section 5.1(t) (Hazardous
------ ------
Substances) and 5.1(gg) (Taxes) will survive the Closing and continue in full
-------
force and effect until the applicable statute of limitations expires.
(b) No Claim for indemnification under Section 5.3(a),
------
whether a third party Claim or otherwise, will be actionable or payable unless
the valid Claims for all such breaches collectively aggregate more than Two
Million and No/100 Dollars ($2,000,000.00) (the "Liability Threshold"), in which
-------------------
event the Claims in excess of the Liability Threshold will be actionable.
(c) Notwithstanding the foregoing, in no event will
Seller's aggregate liability to Buyer for indemnification under Section 5.3(a)
------
exceed the amount of Forty Million and No/100 Dollars ($40,000,000.00) (the
"Cap").
---
(d) Notwithstanding anything to the contrary contained in
this Agreement, if (i) Buyer becomes aware prior to Closing of any breach of any
representation, warranty or covenant of Seller and (ii) the Damages incident to
such breach are reasonably estimated by Buyer to be less than $7.2 million,
Buyer shall promptly after the discovery of such breach (1) notify Seller in
writing thereof (such notice to include a description of such breach), and (2)
until the earlier of (i) thirty (30) days after the giving of such notice or
(ii) the Closing Date, but in no event less than seven (7) days (and the Closing
Date shall be extended if necessary therefor) (as applicable, the "Adjustment
----------
Period"), use its reasonable efforts to negotiate in good faith with Seller a
------
mutually agreed upon adjustment to the Purchase Price; provided, that if Buyer
--------
and Seller are unable to agree to such Purchase Price adjustment within such
Adjustment Period despite using their good faith efforts to agree upon a
Purchase Price adjustment, Buyer shall consummate the transactions contemplated
hereby, and may make a claim for indemnification pursuant to Section 5.3(a)
33
Page 42 of 64 Pages
hereof against Seller with respect to such Damages, subject to the Liability
Threshold and the Cap.
(e) Notwithstanding anything to the contrary contained in
this Agreement, if (i) Buyer becomes aware prior to Closing of any breach of any
representation, warranty or covenant of Seller and (ii) the Damages incident to
such breach are reasonably estimated by Buyer to be equal to or greater than
$7.2 million, Buyer shall promptly after the discovery of such breach notify
Seller in writing thereof (the "Material Breach Notice") (such Material Breach
-----------------------
Notice to include a description of such breach) and Buyer shall determine (and
notify Seller in the Material Breach Notice of Buyer's determination) either to
(1) consummate the transactions contemplated by this Agreement or (2) terminate
this Agreement; provided, however, that if Buyer determines to consummate the
-------- -------
transactions contemplated by this Agreement, Buyer and Seller will, following
the delivery of the Material Breach Notice and prior to Closing, use their
respective reasonable efforts to negotiate in good faith during the Adjustment
Period a mutually agreed upon adjustment to the Purchase Price; provided,
--------
further, that if Buyer and Seller are unable to agree to such Purchase Price
-------
adjustment within such Adjustment Period despite using their good faith efforts
to agree upon a Purchase Price adjustment, Buyer shall consummate the
transactions contemplated hereby and may make a claim for indemnification under
Section 5.3(a) hereof with respect to such Damages, subject to the Liability
------
Threshold and the Cap; provided, further, that if such Damages are reasonably
estimated by Seller (the "Estimated Breach") to be in excess of $10 million,
-----------------
then Seller shall notify Buyer in writing of its estimate of such Damages (the
"Estimation Notice") and, subject to Section 5.4(f) hereof, Seller shall have
------------------ ------
the right to terminate this Agreement.
(f) If, within ten (10) Business Days of its receipt of an
Estimation Notice, Buyer determines, in its reasonable discretion, that the
Estimated Breach is less than $10 million, Seller shall not have the right to
terminate this Agreement and Buyer shall be subject to Section 5.4(e) hereof
without regard to the final proviso thereof, but if Buyer consummates the
transactions contemplated hereby, Seller's aggregate liability with respect to
Damages relating to such Estimated Breach will not exceed the amount of Ten
Million Dollars ($10,000,000). If Buyer fails to respond to such Estimation
Notice within such ten (10) Business Day period, the Estimated Breach shall
thereafter be deemed to be reasonably estimated in excess of $10 million, and
Seller shall thereafter have the right to terminate this Agreement, subject to
Section 13.20 hereof.
-----
5.5 Covenants of Seller. Seller hereby covenants with Buyer as
---------------------
follows:
(a) Operations Prior to Closing. Between the date hereof
-----------------------------
and the Closing Date:
(i) Subject to the restrictions contained herein,
Seller shall operate the Property and each Project in all material respects in
the same manner in which Seller operated the Property and each Project prior to
the date hereof, so as to keep the Property and each Project in all material
respects in the same condition as of the date hereof, reasonable wear and tear
34
Page 43 of 64 Pages
excepted, and so as to maintain in all material respects the same caliber of the
operations conducted at each Project and the reasonable good will of all tenants
of each Project.
(ii) Seller shall maintain the Improvements and the
Personalty (including, but not limited to, the mechanical systems, plumbing,
electrical, wiring, appliances, fixtures, heating, air conditioning and
ventilating equipment, elevators, boilers, equipment, roofs, structural members
and furnaces) in all material respects in the same condition as they are as of
the date hereof, reasonable wear and tear excepted, provided, however, except
for required maintenance, restoration and repairs, consistent with past
practice, Seller shall not, without the prior written consent of Buyer, which
consent shall not be unreasonably withheld, undertake any construction,
alteration or improvement to any Project, individually or in the aggregate,
other than (A) construction, alterations or improvements for which provision is
made in the applicable current Project budget and (B) unbudgeted construction,
alterations and improvements the costs of which do not exceed $100,000.00 in the
aggregate.
(iii)Seller shall maintain its books of account and
records in the usual, regular and ordinary manner on a basis consistent with the
basis used in keeping its books in prior years.
(iv) To the extent required therein, Seller shall
punctually perform and discharge all obligations and undertakings of Seller
under the Leases and the Operating Agreements in all material respects, but in
no event less than in the same manner that Seller currently performs and
discharges obligations and undertakings under the Leases and Operating
Agreements.
(v) Seller shall use and operate each Project in
compliance in all material respects with Applicable Laws and the requirements of
any mortgage, deed of trust, security agreement, pledge agreement, ground lease,
Lease, Operating Agreement and insurance policy affecting the Property, but in
no event less than the same manner that Seller currently uses and operates each
Project.
(vi) Seller shall (1) pay or cause to be paid prior to
delinquency all ad valorem and other Taxes or charges due and payable with
respect to each Project or its operation, and (2) provide Buyer, within seven
(7) Business Days of receipt, copies of any written notices Seller receives with
respect to any special assessments or proposed increases in the valuation of any
Project for ad valorem tax purposes.
(vii)Seller shall not take any action or fail to take
action the result of which would have a material adverse effect on the Property
or any Project, individually or in the aggregate, or Buyer's ability to continue
the operating thereof after the Closing Date in substantially the same manner as
presently conducted, or which would cause any of Seller's representations and
warranties contained herein to be untrue or inaccurate in any material respect
as of the Closing Date.
(viii) Without Buyer's prior written consent, Seller
shall not subject any Project or any portion of the Property to or permit or
suffer to exist any Liens (other than inchoate mechanics' and materialmens'
35
Page 44 of 64 Pages
liens), covenants, conditions or restrictions or seek any zoning changes or take
any other action; and except in the ordinary course of its business, without
Buyer's prior written consent, which consent shall not be unreasonably withheld
(Seller's failure to consent not to be deemed unreasonable if Lender will not
consent thereto), Seller shall not subject any Project to any easements or other
title matters.
(ix) A copy of any renewal or expansion of an existing
Lease or of any new lease which Seller wishes to execute between the Agreement
Date and the Closing Date will be submitted to Buyer prior to execution by
Seller, and, in the case of a new lease requiring Buyer's approval as
hereinafter set forth, Seller shall also deliver to Buyer a proposal containing
the information for which provision is made in Schedule S-5.5(a)(ix)(1) hereof
---------------
(the "Lease Proposal"). Buyer shall have the right to approve any new lease or
---------------
any renewal or expansion of an existing Lease (other than a renewal or expansion
accomplished pursuant to the terms and provisions of the existing Lease, for
which Buyer shall have no approval rights) for (i) space in excess of 5,000
square feet or (ii) any such new lease or applicable renewal or expansion which
is not on terms consistent with the approved leasing budget and/or not an arm's
length transaction; provided, however, such approval shall not be unreasonably
withheld. Buyer agrees to notify Seller in writing within ten (10) business days
of its receipt of the applicable Lease Proposal of Buyer's approval or
disapproval, including all Tenant Inducement Costs and leasing commissions to be
incurred in connection therewith. If Buyer fails to notify Seller in writing of
Buyer's approval or disapproval within the ten (10) business day period set
forth above, such failure conclusively will be deemed the approval of Buyer. If
Buyer informs Seller in writing within ten (10) business days that Buyer does
not approve the new lease or applicable renewal or expansion of the existing
Lease, then Seller will not enter into the disapproved lease or applicable
extension or renewal. At Closing, Buyer will reimburse Seller for any Tenant
Inducement Costs, leasing commissions or other expenses, including legal fees,
incurred by Seller in connection with any new lease or applicable renewal or
expansion of an existing Lease approved (or deemed approved) by Buyer. Without
limiting the foregoing, Seller will not take any action after the Agreement Date
to enforce or terminate any Lease (except as expressly required by such Lease),
including applying any portion of a security deposit, without the prior written
consent of Buyer, which consent shall not be unreasonably withheld; provided
that if Buyer fails to notify Seller in writing of Buyer's approval or
disapproval within the ten (10) business day period for such purpose set forth
above, such failure will be deemed the approval by Buyer; and provided further,
however, that nothing contained herein will prohibit Seller from continuing to
pursue against any tenant any action instituted prior to the Agreement Date and
listed on Schedule S-5.5(a)(ix)(2) hereof nor prohibit Seller from pursuing,
---------------
either before or after Closing, any claim against any tenant for reimbursement
of amounts due Seller for costs incurred by Seller on the behalf of such Tenant
prior to the Agreement Date, all such rights being reserved by Seller; provided,
however, Seller agrees to institute any such action no later than 60 days after
Closing.
(x) From the Agreement Date until the earlier of the
Closing Date or the earlier termination of this Agreement pursuant to the terms
hereof, Seller will not, without the prior written consent of Buyer, which
consent will not be unreasonably withheld: (i) modify any Lease (except as the
Lease may specifically require) nor exercise any landlord option under any Lease
36
Page 45 of 64 Pages
(except in all cases as expressly provided by such Lease), (ii) terminate or
fail in any respect to comply in all material respects with the terms of any
Lease or enter into any new lease or (iii) consent to any sublease of any
portion of any Project or an assignment of any Lease (except as expressly
required by such Lease.)
(xi) Other than in the ordinary course of Seller's
business, Seller shall not remove or cause or permit to be removed from any
Project any part or portion thereof or the Personalty without the express
written consent of Buyer, which consent shall not be unreasonably withheld,
unless the same is replaced, prior to the Closing Date, with similar items of at
least equal suitability, quality and value, free and clear of any liens or
security interests.
(xii)Unless otherwise permitted by the terms of this
Agreement, including, without limitation, Section 5.5(a)(viii) hereof, Seller
--------------------
shall cause all debts and liabilities for labor, materials, services and
equipment incurred in the construction, operation and development of each
Project, including leasehold improvements, to be paid in full or otherwise
discharged or bonded prior to Closing.
(xiii) Seller shall promptly deliver to Buyer, upon
Buyer's written request, such reports showing the revenue and expenses of each
Project as Seller customarily keeps or receives internally for its own use.
(xiv)Seller or Seller's managing agent shall not enter
into any new employment agreements which would in any way be binding on Buyer or
any Project or any portion thereof without the express written consent of Buyer.
(xv) Seller shall promptly advise Buyer of (1) any
Claim which might materially and adversely affect the Property or any Project of
which Seller obtains Knowledge or (2) any change in Applicable Laws which might
materially and adversely affect the value or use of the Property by Buyer of
which Seller obtains Knowledge.
(b) Operating Agreements. Seller shall not enter into any
---------------------
new management agreement, maintenance or repair contract, supply contract, lease
in which it is lessee or other agreements with respect to any Project or portion
thereof which is not terminable upon thirty (30) days' notice without penalty,
nor shall Seller enter into any agreements modifying the Operating Agreements in
any material respect, unless (i) any such agreement or modification will not
bind Buyer or the Property after the Closing Date or (ii) Seller has obtained
Buyer's prior written consent to such agreement or modification, which consent
shall not be unreasonably withheld. Seller agrees, at Seller's sole cost and
expense, to cancel and terminate, effective as of the Closing Date, Seller's
management agreement and any other Operating Agreements identified by Buyer in
writing prior to the Closing.
(c) Insurance. Seller will at all times from the Agreement
---------
Date to the Closing Date maintain on each Project insurance coverage in an
amount not less than the amount, and with the same carrier(s), as maintained on
the date hereof or, if Seller elects to replace the coverage maintained by
Seller on the date hereof, such coverage will be in an amount not less than the
37
Page 46 of 64 Pages
current coverage (unless otherwise agreed by Buyer), such policy is replaced,
without any lapse of coverage, and with a carrier reasonably acceptable to
Buyer.
(d) Mortgagee Consents. Seller will use reasonable efforts
------------------
to obtain the mortgagee consents, if any, required pursuant to Section 4.8(a)
------
hereof.
(e) Tenant Estoppels. Seller will use reasonable efforts to
----------------
obtain and deliver to Buyer prior to Closing a Tenant Estoppel signed by each
Tenant in accordance with Section 4.2(e) hereof.
(f) Cooperation. In connection with the transactions
-----------
contemplated by this Agreement, Seller shall cooperate with Buyer and use its
commercially reasonable efforts to furnish and deliver to Buyer all documents,
certificates and instruments required by the Lender in connection with this
Agreement and Buyer's Financing, including, without limitation, subordination,
non-disturbance and attornment agreements from such tenants as the Lender may
require; provided that, except as specifically set forth in this Section 5.5(f)
------
nothing contained herein shall be construed as altering or increasing any of the
limitations on Seller's duties and obligations set forth herein.
(g) Relationship with Interested Parties. The Company
---------------------------------------
agrees not to pursue any remedies under Florida Statutess. 607.0832 to void the
transactions contemplated hereby as a result of not having received information
regarding the relationships or financial interests of Xxxxxx X. Xxxxxxx, Xxxx
X.X. Xxxxxxxx and Xxx Xxxxxxx.
5.6 Representations and Warranties of Buyer. Buyer hereby represents
---------------------------------------
and warrants to Seller:
(a) Organization and Authority. Buyer has been duly formed
--------------------------
and is validly existing under the laws of the State of Maryland. Buyer has the
full right, power and authority to enter into this Agreement and to purchase all
of the Property, including all of the Projects, to be conveyed by Seller
pursuant hereto and to consummate or cause to be consummated the transactions
contemplated herein to be made by Buyer. Buyer has all requisite powers and all
authorizations, consents and approvals necessary to carry on its business as now
conducted and to enter into this Agreement and to carry out its obligations
hereunder. All consents, approvals, and authorizations necessary for Buyer to
consummate the transactions contemplated hereby have been obtained or will be
obtained prior to Closing. The persons signing this Agreement on behalf Buyer
are authorized to do so.
(b) Authorization, Execution and Disclosure. This Agreement
---------------------------------------
has been duly authorized by all necessary action on the part of Buyer, has been
duly executed and delivered by Buyer, constitutes the valid and binding
agreement of Buyer and is enforceable in accordance with its terms, subject to
Buyer stockholder approval.
38
Page 47 of 64 Pages
(c) Bankruptcy. No Act of Bankruptcy has occurred and is
----------
continuing with respect to Buyer.
(d) No Violation. The execution, delivery and performance
------------
by Buyer of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by Buyer, do not and will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default or event of
default under (whether with or without due notice, the passage of time or both),
(iii) result in the creation of any Lien upon Buyer's assets, (iv) give any
third party the right to modify, terminate or accelerate any obligation under,
(v) result in a violation of or (vi) require any Authorization, consent,
approval, exemption or other action by, notice to, or filing with any third
party or Authority pursuant to, the charter or bylaws of Buyer or any Applicable
Law (including, without limitation, approvals pursuant to the Xxxx-Xxxxx-Xxxxxx
Act), Order or Contract to which Buyer, or its properties are subject, which
could interfere in any material respect with the consummation by Buyer of the
transaction contemplated by this Agreement. Buyer has complied with all
Applicable Laws in connection with the execution, delivery and performance of
this Agreement, the agreements contemplated hereby and the transactions
contemplated hereby and thereby.
(e) Pending Claims. There is no action, suit, arbitration,
--------------
unsatisfied order or judgment, governmental investigation or proceeding pending
or, to the knowledge of Buyer, threatened against Buyer, which, if adversely
determined, could interfere in any material respect with the consummation by
Buyer of the transactions contemplated by this Agreement.
(f) Access to Information and Experience. Buyer has
-----------------------------------------
reviewed each report filed by Seller with the Commission since January 1, 1999
and all material correspondence between the Commission and Seller since such
date. Buyer has had an opportunity to ask questions of and receive answers from
Seller, or a person or persons acting on its behalf, concerning Seller. Buyer
has had an opportunity to obtain all additional information necessary to verify
the accuracy of the information referred to in this Section 5.6(f). Buyer has
------
substantial experience in business enterprises of the nature conducted by Seller
and is able to evaluate the merits and risks of the disposition of the Shares as
provided herein.
(g) Acquisition Funds. Buyer has obtained a commitment
------------------
letter from Fleet National Bank (the "Lender"), a true and correct copy of which
------
is attached hereto as Exhibit E-9, pursuant to which the Lender has agreed to
---
commit to provide to Buyer debt financing (such debt financing commitments, the
"Commitments") for the acquisition of the Property pursuant to the Agreement
-----------
(the "Buyer Financing") in accordance with terms thereof, and such Commitments
----------------
are in good standing and full force and effect.
(h) Shares. Except as set forth on Schedule S-5.6(h)
------ --------
hereto, the Shares are owned by Buyer free of all Liens, Orders, Claims and
Contracts. The Shares were acquired from third parties or Seller in compliance
with all Applicable Laws, free and clear of any rescission and Contract rights.
There is no outstanding Contract with any person to purchase, or otherwise
acquire the Shares. Upon the performance by Seller of its obligations at the
Closing, Buyer will convey good and marketable title to the Shares, free and
39
Page 48 of 64 Pages
clear of all Liens, Orders, Claims, Contracts or other limitations whatsoever.
The assignments, endorsements, stock powers and other instruments of transfer
delivered by Buyer to the Seller at Closing will be sufficient to transfer
Buyer's entire interest, legal and beneficial, in the Shares to Seller. The
Shares represent all of the capital stock of Seller owned or held, legally or
beneficially, by Buyer or any Affiliate(s) of Buyer.
(i) Full and Accurate Disclosure. No statement of fact
----------------------------
made by Buyer in this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary to make statements contained
herein not misleading. There is no material fact presently known to Buyer which
has not been disclosed to Seller which could interfere in any material respect
with the consummation by Buyer of the transactions contemplated by this
Agreement.
5.7 Buyer Indemnification.
---------------------
(a) Buyer will indemnify and hold harmless Seller, its
affiliates, partners, directors, officers, stockholders, members,
representatives, advisors, agents, successors and assigns (collectively, the
"Seller Indemnitees") from and pay any and all Damages, directly or indirectly,
------------------
resulting from, relating to, arising out of, or attributable to any one of the
following: (i) any breach of any representation or warranty Buyer has made in
this Agreement, (ii) any breach by Buyer of any covenant or obligation of Buyer
in this Agreement, and (iii) cleanup, remediation or removal of Hazardous
Substances or other environmental conditions on the Property to the extent (A)
required by law and (B) not existing on the Property until after the Closing
Date. The term "Damages" as used in this Section 5.7 is not limited to matters
---
asserted by third parties against Seller, but includes Damages incurred or
sustained by Seller in the absence of third party Claims.
(b) If any third party Claim is commenced in which any
Seller Indemnitee is a party that may give rise to a Claim for indemnification
against Buyer hereunder (a "Seller Indemnification Claim") then such Seller
-------------------------------
Indemnitee will promptly give notice to Buyer of such Claim. Failure to notify
Buyer of such Claim will not relieve Buyer of any liability that Buyer may have
to the Seller Indemnitee, except to the extent the defense of such Claim is
materially and irrevocably prejudiced by the Seller Indemnitee's failure to give
such notice. Buyer will have the right to defend against an Seller
Indemnification Claim, at its own expense, with counsel of its choice
satisfactory to the Seller Indemnitee if (i) within fifteen (15) days following
the receipt of notice of the Seller Indemnification Claim, Buyer notifies the
Seller Indemnitee in writing that Buyer will indemnify the Seller Indemnitee
from and against the entirety of any Damages such Seller Indemnitee may suffer
resulting from, relating to, arising out of, or attributable to the Seller
Indemnification Claim; (ii) the Seller Indemnification Claim involves only money
Damages and does not seek an injunction or other equitable relief and (iii)
Buyer continuously conducts the defense of the Seller Indemnification Claim
actively and diligently. So long as Buyer is conducting the defense of the
Seller Indemnification Claim in accordance with this Section 5.7(b), (i) Seller
------
Indemnitee may retain separate co-counsel at its own cost and expense and
participate in the defense of the Seller Indemnification Claim, (ii) Seller
Indemnitee will not consent to any settlement or the entry of any Order with
respect to the Seller Indemnification Claim without the prior written consent of
40
Page 49 of 64 Pages
Buyer (not to be withheld unreasonably) and (iii) Buyer will not consent to any
settlement or the entry of any Order with respect to the Seller Indemnification
Claim without the prior written consent of the Seller Indemnitee (not to be
withheld unreasonably).
5.8 Survival of Buyer's Representations, Warranties and Covenants.
---------------------------------------------------------------
The representations, warranties and covenants of Buyer set forth in this
Agreement will survive Closing for a period of eighteen (18) months thereafter;
except that the representations and warranties set forth in Section 5.6(a)
hereof will survive Closing and continue in full force and effect until the
applicable statute of limitations expires. No Claim for indemnification will be
actionable or payable unless the valid Claims for all such breaches collectively
aggregate more than the Liability Threshold, in which event the Claims in excess
of the Liability Threshold will be actionable; provided the representations set
--------
forth in Section 5.6(h) hereof shall not be subject to the Liability Threshold
and shall be actionable and payable from, after and including the first dollar
of Damage suffered by Seller in connection with a breach thereof.
Notwithstanding the foregoing, in no event will Buyer's aggregate liability for
indemnification under this Section 5.8 exceed the amount of Forty Million and
---
No/100 Dollars ($40,000,000.00).
5.9 Covenants of Buyer.
------------------
(a) Buyer Financing. Buyer hereby covenants with Seller
----------------
that Buyer will use reasonable good faith efforts to consummate the Buyer
Financing.
(b) Cooperation. In connection with the transactions
-----------
contemplated by this Agreement, Buyer shall cooperate with Seller and use its
commercially reasonable efforts to furnish and deliver to Seller all documents,
certificates and instruments required in connection with the performance of
Seller's duties and obligations contained herein; provided that, except as
specifically set forth in this Section 5.9(b) nothing contained herein shall be
------
construed as altering or increasing any of the limitations on Buyer's duties and
obligations set forth in this Agreement.
ARTICLE VI
DEFAULT
6.1 Default by Buyer.
----------------
(a) Subject to Section 6.1(b) hereof, if Buyer defaults
------
and/or fails to consummate the transactions contemplated by this Agreement in
accordance with the terms set forth herein for any reason other than (i) a
Seller default as provided in Section 6.2(a) below (subject to the exceptions
------
set forth in Section 6.2(a) below and Seller's right to notice and cure as
------
provided in Section 6.2(b) below), (ii) despite Buyer's good faith efforts, the
------
failure of Buyer to consummate the Buyer Financing or (iii) the permitted
termination of this Agreement by either Seller or Buyer as expressly provided in
this Agreement, Seller will be entitled to terminate this Agreement and obtain
from Buyer a lump sum payment equal to the Default Fee plus Seller's Expenses.
Notwithstanding the foregoing, if, despite Buyer's good faith efforts, Lender
refuses to consummate the Buyer Financing unless such refusal is based solely
41
Page 50 of 64 Pages
upon one or more of (i) the failure of any Project to comply with applicable
parking codes, ordinances and/or governmental requirements, (ii) Seller being in
default hereunder or (iii) a failure of the condition of Section 4.7(c), Seller
------
will be entitled to obtain from Buyer a lump sum payment equal to Seller's
Expenses. The payment of such amounts due under this Section 6.1(a) shall be
------
paid by Buyer to Seller in immediately available funds within thirty (30) days
following such default.
(b) Seller will not be entitled to terminate this Agreement
and Buyer will not be under any obligation to make any payment to Seller under
Section 6.1(a) hereof, unless Seller shall have delivered written notice to
------
Buyer specifying Buyer's default or failure to consummate the transactions
contemplated by this Agreement, and Buyer has a period of thirty (30) days
(except with respect to Buyer's obligation to close and any other obligation
hereunder for which a shorter time period is expressly provided herein) within
which to cure such default or failure, and if Buyer shall cure such default or
failure within such period, then Seller shall not be entitled to terminate this
Agreement under Section 6.1(a) hereof and Buyer will not be under any obligation
------
to make any payment to Seller under Section 6.1(a) hereof.
------
6.2 Default by Seller.
(a) Subject to Section 6.2(b) hereof, if Seller defaults
------
and/or fails to consummate the transactions contemplated by this Agreement in
accordance with the terms set forth herein for any reason other than (i) a Buyer
default as provided in Section 6.1(a) above (subject to the exceptions set forth
------
in Section 6.1(a) and Buyer's right to notice and cure as provided in Section
------
6.1(b) hereof); or (ii) the permitted termination of this Agreement by either
------
Seller or Buyer as herein expressly provided, Buyer will be entitled to
terminate this Agreement and obtain from Seller a lump sum payment equal to the
Default Fee plus Buyer's Expenses. The payment of such amounts due under this
Section 6.2(a) shall be paid by Seller to Buyer in immediately available funds
------
within thirty (30) days following such default.
(b) Buyer will not be entitled to terminate this Agreement
and Seller will have no obligation to make any payment to Buyer under Section
6.2(a) hereof, unless Buyer shall have delivered written notice to Seller
------
specifying Seller's default or failure to consummate the transactions
contemplated by this Agreement, and Seller has a period of thirty (30) days
(except with respect to Seller's obligation to close and any other obligation
hereunder for which a shorter time period is expressly provided herein) within
which to cure such default or failure, and if Seller shall cure such default or
failure within such period, then Buyer shall not be entitled to terminate this
Agreement under Section 6.2(a) hereof and Seller will have no obligation to make
------
any payment to Buyer under Section 6.2(a) hereof.
------
6.3 Liquidated Damages. Buyer and Seller acknowledge that the
-------------------
Default Fee is the agreed and liquidated damages for a default hereunder and the
exercise by the non-defaulting party of its rights to receive the Default Fee
under Section 6.1(a) or 6.2(a), as applicable, shall be the sole and exclusive
----- ------
remedy of such non-defaulting party. Buyer and Seller acknowledge that because
of the difficulty, uncertainty and inconvenience of ascertaining actual damages,
the payment of the Default Fee as agreed and liquidated damages does not
constitute a penalty but represents fair, adequate and reasonable compensation
42
Page 51 of 64 Pages
to the non-defaulting party for the defaulting party's default.
6.4 No Conflict. Notwithstanding anything contained herein, a breach
-----------
of a representation or other item covered by the indemnification provisions of
Section 5.3 and 5.4 hereof shall not constitute, nor be deemed, a default
--- ---
hereunder nor entitle either party to the Default Fee.
ARTICLE VII
RISK OF LOSS
7.1 Condemnation. Other than with respect to any matter disclosed in
------------
Schedule S-5.1(j), in the event of any actual or threatened taking of all or any
--------
portion of any Project or any proposed sale in lieu thereof pursuant to the
power of eminent domain after the Agreement Date and prior to Closing (a
"Taking"), Seller shall give written notice thereof to Buyer promptly after
Seller learns or receives notice thereof. If all or any part of any Project is
subject to a Taking and such Taking has or will have a material adverse effect
on the affected Project, as reasonably determined by Buyer, Buyer shall have the
right to terminate this Agreement by giving Seller written notice thereof prior
to the Closing, subject to Section 13.20 hereof. If Buyer elects not to
terminate this Agreement, all proceeds, awards and other payments arising out of
such condemnation or sale (actual or threatened) shall be paid or assigned, as
applicable, to Buyer at Closing and there shall be no reduction in the Purchase
Price. Seller shall not settle or compromise any such proceeding without Buyer's
written consent, which consent shall not be unreasonably withheld.
7.2 Risk of Loss; Casualty. If, after the Agreement Date and prior
-----------------------
to Closing, all or any portion of any Project is destroyed or damaged as a
result of fire or any other cause whatsoever, Seller shall give written notice
thereof to Buyer promptly after Seller learns or receives notice thereof. If
such destruction or damage has or will have a material adverse effect on the
affected Project, as reasonably determined by Buyer, Buyer shall have the right
to terminate this Agreement by giving Seller written notice thereof prior to the
Closing, subject to Section 13.20 hereof. If Buyer elects not to terminate this
-----
Agreement, then all insurance proceeds and rights to proceeds arising out of
such destruction or damage (other than business interruption or rental loss
insurance proceeds payable prior to the Closing) shall be paid or assigned, as
applicable, to Buyer at the Closing and Buyer shall receive a credit against the
Purchase Price equal to the amount of any deductibles under the policy or
policies of insurance covering such loss or damage and there shall be no
reduction in the Purchase Price.
43
Page 52 of 64 Pages
ARTICLE VIII
BROKER
8.1 Brokerage Commissions. Seller has agreed pursuant to a separate
---------------------
written agreement to pay an advisory fee to Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") in connection with the transaction which is the subject of
---------------
this Agreement, and Seller is exclusively responsible for the payment of Xxxxxx
Xxxxxxx'x fee. Each party (in such capacity, an "Indemnifying Party") agrees
-------------------
that should any claim be made for brokerage commissions or finder's fees by any
broker or finder other than Xxxxxx Xxxxxxx by, through or on account of any acts
of the Indemnifying Party or its representatives, the Indemnifying Party will
indemnify and hold the other party (in such capacity, an "Indemnified Party")
------------------
free and harmless from and against any and all Damages incurred by the
Indemnified Party in connection with such claim. The provisions of this
paragraph will survive Closing or earlier termination of this Agreement.
ARTICLE IX
DISCLAIMERS AND WAIVERS
9.1 No Reliance on Documents. Except as expressly stated herein,
-------------------------
Seller makes no representation or warranty as to the truth, accuracy or
completeness of any materials, data or information delivered by Seller to Buyer
in connection with the transaction contemplated hereby. Buyer acknowledges and
agrees that all materials, data and information prepared by third parties
unaffiliated with Seller and delivered by Seller to Buyer in connection with the
transaction contemplated hereby are provided to Buyer as a convenience only and
that any reliance on or use of such materials, data or information by Buyer will
be at the sole risk of Buyer, except as may be otherwise expressly stated
herein. Without limiting the generality of the foregoing provisions, Buyer
acknowledges and agrees that (a) any environmental or other report with respect
to the Property which is delivered by Seller to Buyer will be for general
informational purposes only, (b) Buyer will not have any right of action against
Seller with respect to any such report delivered by Seller to Buyer, (c) neither
Seller nor any Affiliate of Seller will have any liability to Buyer for any
inaccuracy in or omission from any such report and (d) Seller does not represent
or warrant the truth, accuracy or completeness of any such reports or any
written or verbal statement made by Seller's agent. To the contrary, Buyer
acknowledges and agrees that this information is provided to Buyer by Seller
merely as an accommodation, that Buyer relies upon it at its own risk, and that
Seller has advised Buyer to, and understands that Buyer will, make its own full
and complete investigations concerning the Property and Hazard Substances.
9.2 DISCLAIMERS. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, IT
-----------
IS UNDERSTOOD AND AGREED THAT SELLER IS NOT MAKING AND HAS NOT AT ANY TIME MADE
ANY WARRANTIES OR REPRESENTATIONS WHATSOEVER. BUYER ACKNOWLEDGES AND AGREES THAT
UPON CLOSING SELLER WILL SELL AND CONVEY TO BUYER AND BUYER WILL ACCEPT THE
PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS" AS OF THE AGREEMENT DATE, EXCEPT TO
THE EXTENT OF ANY CONTRARY REPRESENTATIONS OR WARRANTIES OF SELLER EXPRESSLY SET
FORTH IN THES AGREEMENT OR AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.
BUYER HAS NOT RELIED AND WILL NOT RELY ON, AND SELLER IS NOT LIABLE FOR OR BOUND
BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTIES, STATEMENTS, REPRESENTATIONS
44
Page 53 of 64 Pages
OR INFORMATION PERTAINING TO THE PROPERTY OR RELATING THERETO (INCLUDING ANY
OFFERING CIRCULAR AND ANY OTHER PROPERTY INFORMATION PACKAGES DISTRIBUTED WITH
RESPECT TO THE PROPERTY) MADE OR FURNISHED BY SELLER, THE MANAGER OF THE
PROPERTY, OR ANY REAL ESTATE BROKER OR AGENT REPRESENTING OR PURPORTING TO
REPRESENT SELLER, TO WHOMEVER MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR
IN WRITING, UNLESS SPECIFICALLY SET FORTH IN THIS AGREEMENT. EXCEPT AS
SPECIFICALLY SET FORTH IN SECTION 5.1 OF THIS AGREEMENT, UPON CLOSING BUYER WILL
ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO,
CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT
HAVE BEEN REVEALED BY BUYER'S INVESTIGATIONS, AND BUYER, UPON CLOSING, WILL BE
DEEMED TO HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER'S OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS) FROM AND AGAINST ANY AND ALL
CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT), LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT
COSTS) OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, WHICH BUYER MIGHT
HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER'S OFFICERS, DIRECTORS,
SHAREHOLDERS, EMPLOYEES AND AGENTS) AT ANY TIME BY REASON OF OR ARISING OUT OF
ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF
ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, ANY ENVIRONMENTAL LAWS) AND
ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS REGARDING
THE PROPERTY, EXCEPT TO THE EXTENT ACTIONABLE AS A BREACH OF AN EXPRESS
REPRESENTATION BY SELLER PURSUANT TO THIS AGREEMENT.
The foregoing disclaimer will not apply to any breach by Seller of a
representation or warranty expressly set forth in this Agreement.
ARTICLE X
PROPERTY MANAGEMENT
10.1 Retention of Seller. At Closing, Xxxxx Realty Services, Inc. and
-------------------
Buyer will enter into a property management agreement (the "Property Management
-------------------
Agreement"), dated as of the Closing Date, with respect to each Project in the
---------
form attached hereto and made a part hereof as Form F-7 (with such modifications
as may be necessary in order to conform the agreement to the specific
requirements of the applicable Project).
45
Page 54 of 64 Pages
ARTICLE XI
MARKETING OF SELLER AND/OR PROPERTY
11.1 Post-Agreement Marketing. From and after the Agreement Date
-------------------------
through November 15, 2001 (the "Marketing Period"), Seller will have the right
-----------------
to negotiate, enter into and execute definitive documentation with another
Person concerning (a) a merger of Seller with another Person, (b) a sale of
substantially all of the capital stock of Seller, including the Shares, to
another Person, (c) a sale of substantially all of the assets of Seller,
including the Property, to another Person, or (d) a sale of the Property to
another Person; provided that in the case of a sale of the Property to another
Person, such transaction shall not be conditioned upon any financing or contain
any other contingencies other than are set forth in this Agreement. In any of
the foregoing events, the transaction which is the subject of this Agreement,
and all time periods hereunder, will be tolled pending the closing of the
agreement memorializing the applicable transaction; and if such transaction
fails to close, for whatever reason, Buyer, at Buyer's option, may elect, within
thirty (30) days after receipt of written notice (the "Option Period") of the
--------------
failure of the applicable transaction, to proceed pursuant to this Agreement, in
which event all time periods hereunder will recommence as of the date of Buyer's
election. Seller will provide Buyer with a true, correct and complete copy of
the document(s) memorializing any such transaction and any amendments or
modifications thereto.
11.2 Break-Up Fee.
------------
(a) If Seller (x) consummates any transaction set forth in
Section 11.1(d) or (y) enters into such transaction, but such transaction fails
-------
to close for any reason whatsoever and Buyer elects within the Option Period not
to proceed pursuant to this Agreement as set forth in Section 11.1, Seller
----
agrees to pay to Buyer the sum (A) Five Million Dollars ($5,000,000.00) (the
"Break-Up Fee") plus (B) Buyer's Expenses; such sums to be paid to Buyer in
immediately available funds (i) simultaneously with the closing of the
transaction described in Section 11.1(d) or (ii) if such sale fails to close for
-------
whatever reason, then within ten (10) days after Buyer elects not to proceed
with the consummation of the transactions contemplated in this Agreement as set
forth in Section 11.1.
-----
(b) If Seller (a) consummates any of the transactions set
forth in Sections 11.1(a)-(c), or (b) enters into any such transaction but such
-----------
transaction fails to close and Buyer elects not to proceed pursuant to this
Agreement as set forth in Section 11.1, Seller agrees to pay to Buyer the amount
----
of Buyer's Expenses; such sums to be paid simultaneously with the closing of any
such transaction or if such transaction fails to close, within ten (10) days
after Buyer elects not to proceed with the consummation of the transactions
contemplated in this Agreement as set forth in Section 11.1.
11.3 Post-Agreement Date Buyer Exclusion. During the Marketing
--------------------------------------
Period, Seller covenants that after its execution of this Agreement neither it
nor its Affiliates will make any further bids or offers with respect to the
Property, renegotiate this Agreement to increase the Closing Purchase Price
46
Page 55 of 64 Pages
hereunder, or otherwise participate directly or indirectly in the post-Agreement
marketing of the Property in any manner whatsoever.
ARTICLE XII
RIGHT OF FIRST OFFER
12.1 First Offer. Seller hereby grants to Buyer a right of first
------------
offer to purchase from Seller the undeveloped parcels of real property (each a
"ROFO Parcel") adjoining the Projects identified on Schedule S-12.1 hereof which
----------- ------
Seller proposes to resell after the Agreement Date and before the first to occur
(the "First Offer Term") of (a) five (5) years after the Closing Date, (b)
------------------
completion of construction thereon of a building or buildings suitable for
occupancy or (c) the sale by the Buyer of all or substantially all of the
Project to which the ROFO Parcel is related; it being understood and agreed that
the right of first offer hereunder will terminate with respect to all or any
portion of a ROFO Parcel for which no Resale Offer (as hereinafter defined) is
in effect as of the expiration of the First Offer Term. Before Seller offers, or
enters into any agreement, to sell any ROFO Parcel, Seller will first deliver to
Buyer written notice of Seller's intention (a "ROFO Offer"), the identity of the
----------
purchaser and the price (the "Offer Price") and terms at and upon which Seller
------------
proposes to sell the ROFO Parcel , and Buyer will have a period of twenty (20)
days after receipt thereof (the "Offer Period") within which to deliver to
-------------
Seller written notice (a "Purchase Notice") of Buyer's agreement to purchase the
---------------
ROFO Parcel from Seller in accordance with the terms and conditions set forth in
the Resale Offer, for a cash purchase price equal to the Offer Price. If Buyer
fails timely to deliver a Purchase Notice, or waives its right to purchase,
within the Offer Period, Seller may sell the ROFO Parcel at any time within a
period (the "Sale Period") of six (6) months after expiration of the Offer
------------
Period at a price and upon terms no more favorable to the purchaser than those
set forth in the ROFO Offer. If, at any time and from time to time within the
Sale Period, Seller proposes to sell the ROFO Parcel at a price or upon terms
more favorable to the purchaser than those set forth in the ROFO Offer, Seller
will deliver notice to Buyer of such price and terms and Buyer will have a
period of fifteen (15) days after receipt of such notice within which to submit
to Seller a Purchase Notice as set forth above; and if Seller has not sold the
ROFO Parcel within the Sale Period, Buyer's right of first offer herein set
forth will be reinstated and remain in full force and effect for the remainder
of the First Offer Term as if Seller had not theretofore made an original ROFO
Offer to Buyer.
12.2 Lender Requirement. Notwithstanding the provision of Section
-------------------
12.1 above, or any other provision of this Agreement to the contrary, in the
----
event that Lender requires, as a condition to closing the Loan pursuant to the
Loan Commitment, that Buyer purchase one or more ROFO Parcels ("Required ROFO
-------------
Parcels"), Buyer agrees to purchase from Seller, and Seller agrees to sell to
-------
Buyer, the Required ROFO Parcels for a purchase price equal to the fair market
value thereof as established by agreement between Seller and Buyer, or if Seller
and Buyer are unable to agree upon such fair market value within five (5) days
after notification by Lender of the requirement to acquire the Required ROFO
Parcels, by arbitration pursuant to Section 12.3 hereof. Such arbitration(s)
----
will be conducted in the city in which the affected ROFO Parcel(s) are located,
47
Page 56 of 64 Pages
and will be completed within thirty-five (35) days after notification by Lender
of the requirement to acquire the Required ROFO Parcels. Seller will convey good
and marketable title to the Required ROFO Parcels, free and clear of liens and
encumbrances, by special warranty deed in the form attached to this Agreement as
Form F-1. Title insurance and surveying costs, recording taxes and fees will be
borne in accordance with the standard commercial practice prevailing in the
applicable market.
12.3 Arbitration. (a) If any matter is to be submitted to arbitration
-----------
pursuant to the provisions of the foregoing Section 12.2, the arbitration will
-----
be governed by the rules of the American Arbitration Association and will be
conducted in Miami, Florida. Each arbitrator will be a disinterested MAI real
estate appraiser having at least 20 years experience in appraising real property
in the area of the ROFO Parcel which is the subject of the arbitration. If,
within thirty (30) days after the call for arbitration, the parties are able to
agree upon a single arbitrator, the decision of such arbitrator will be final.
If the parties are not able to agree on a single arbitrator, each party will
appoint an arbitrator, and the two arbitrators thus appointed will appoint a
third arbitrator, and the decision of a majority of three arbitrators will be
binding. Each party will bear the expenses of its own arbitrator, and the
expenses of a common arbitrator, or third arbitrator, will be shared equally by
the parties.
(b) Notwithstanding the provisions of the foregoing Section
12.3(a), in the event the parties are unable to agree upon the fair market value
-------
of a ROFO Parcel and there is not time, within the time limits set forth in said
Section 12.3(a), to conclude an arbitration prior to the Closing Date, each of
-------
Seller and Buyer promptly will select a disinterested licensed Realtor having at
least 20 years experience as a licensed real estate broker in the area of the
ROFO Parcel to be valued, and the two Realtors thus appointed will appoint a
third similarly qualified and experienced Realtor, and the 3 Realtors thus
appointed will by majority agreement set the Closing fair market value of the
ROFO Parcel. After Closing, either party may dispute the decision of the
Realtors and invoke the arbitration procedures set forth in Section 12.3(a), in
which event the purchase price of the purchased ROFO Parcel will be adjusted by
additional cash payment by Buyer to Seller, or cash refund from Seller to Buyer,
as applicable, within ten (10) days after the decision of the arbitrators is
announced.
12.4 Separation of ROFO Parcels. Seller and Buyer acknowledge that
--------------------------
one or more of the ROFO Parcels are presently embodied within adjoining Land
and/or not separately surveyed and legally described, and that therefore, prior
to Closing, Seller must cause surveys and legal descriptions of the ROFO Parcels
to be prepared subject to Buyer's approval, which approval will not be
unreasonably withheld (it being agreed that Buyer will not be unreasonable in
failing to approve any matter which Lender will not approve); and, to the extent
that a ROFO Parcel is currently embodied within adjoining Land, to modify the
survey and legal description of such Land to exclude the ROFO Parcel. Seller
shall bear all costs of separation of the ROFO Parcels from the adjoining Land,
including reasonable expenses incurred by Buyer and all costs and expenses of
preparing surveys and legal descriptions.
Further, Seller and Buyer acknowledge that separation of a ROFO Parcel
from adjoining Land, or separation of the ownership of Land and an adjoining
ROFO Parcel, may require agreements between the owner of the Land and ROFO
48
Page 57 of 64 Pages
Parcel, and/or owners of neighboring property, in order to assure that the
separation of the Land and ROFO Parcel will not materially adversely affect the
ownership, use or development of the remaining parcel of Land. Such agreements
might include, without limitation, reciprocal easement and operating agreements;
cross parking agreements; easements for access, utilities or drainage; joint
maintenance agreements; and so forth. Further, separation of a ROFO Parcel from
existing Land would require obtaining a separate tax folio number for the Land
and ROFO Parcel, or otherwise assuring that the Land and ROFO Parcel will be
treated as separate tax lots. Within a period of thirty (30) days after the
Agreement Date, Seller will prepare for Buyer's approval, which approval will
not be unreasonably withheld (it being agreed that Buyer will not be
unreasonable in failing to approve any matter which Lender will not approve),
proposed documents and agreements to support the separation of any ROFO Parcel
currently embodied in a parcel of Land, and to support the separate ownership of
a ROFO Parcel and any adjoining parcel of Land, and Seller and Buyer will make a
diligent good faith effort to finalize such documents within five (5) days prior
to closing. Seller and Buyer will cooperate in identifying and resolving any
issues which need to be addressed in order to accommodate such separation or
separate ownership.
Notwithstanding the foregoing, in the event that despite diligent good
faith efforts Seller and Buyer are unable to obtain any governmental approval
necessary for, or to agree upon the terms and conditions of, separation of any
ROFO Parcel from the parcel of Land by which it is embodied, or separation of
the ownership of any ROFO Parcel and any adjoining parcel of the Land, Seller
will convey such ROFO Parcel together with the Land at Closing, and Buyer will
agree (and record in the public records, together with the applicable deed of
conveyance, evidence of such agreement) to reconvey such ROFO Parcel, without
consideration, immediately upon obtaining the necessary approval or agreement
upon the terms and conditions of separation, as the case may be; and in such
event, Seller and Buyer will cooperate, and make a diligent good faith effort,
as soon as possible to obtain the required approvals, and to agree upon terms
and conditions, in order to reconvey the ROFO Parcel to Seller. Seller will pay
all reasonable costs, including transfer taxes, of such reconveyance, and will
indemnify and hold Buyer harmless from and against any Damages related to
arising out of Buyer's ownership of such ROFO Parcel prior to reconveyance
except to the extent due to Buyer's misfeasance or malfeasance. At such time
that the governmental approval necessary for, or the Seller and Buyer have
agreed upon the terms and conditions of, separation of the ROFO Parcel from the
Land in which it is embodied, or separation of the ownership of any ROFO Parcel
and any adjoining parcel of Land, Buyer will reconvey any such ROFO Parcel in
substantially the same physical and legal condition as existed at the time of
the Closing.
ARTICLE XIII
MISCELLANEOUS
13.1 Confidentiality. The existence and contents of this Agreement
---------------
and the matters disclosed by any due diligence review undertaken by Buyer in
49
Page 58 of 64 Pages
connection with the transactions herein contemplated and any additional
information furnished by Seller to Buyer hereunder from time to time will be
kept confidential and will not be disclosed to any third parties without the
consent of both parties hereto, except for any disclosure that may be required
by law to be made to Buyer's Affiliates, investors, accountants, lenders,
lawyers and experts (including, without limitation, appraisers, title agents,
surveyors and engineers) and any applicable governmental or quasi-governmental
authorities. Neither party is responsible for the actions of third parties as to
the disclosure of confidential information, but each party agrees to inform
their accountants, lenders, attorneys and other consultants of the
confidentiality of this transaction and all such other information and, upon
request of the other, agrees to use reasonable efforts to obtain confidentiality
agreements from such third parties.
13.2 Intentionally Deleted.
---------------------
13.3 Assignment. Neither Buyer, on the one hand, nor Seller, on the
----------
other hand, may assign its rights under this Agreement without first obtaining
the other's written approval, which approval will not be unreasonably withheld;
provided, however, that Buyer may assign its rights under this Agreement to an
-------- -------
Affiliate without the consent of Seller.
13.4 Tax Reduction Proceedings.
-------------------------
(a) Both before and after Closing, Seller will continue to
have the exclusive right to initiate, prosecute, withdraw, settle or otherwise
compromise in the manner it deems appropriate any protest or reduction
proceeding affecting ad valorem taxes assessed against the Property (a "Tax
---
Reduction Proceeding") for years prior to the year in which the Closing is to
---------------------
occur and Seller or its assigns will have the exclusive right to receive all
real estate tax refunds attributable to, and to be reimbursed by Buyer for all
real estate tax credits attributable to, the year prior to the year in which the
Closing is to occur; provided, however that any such credits shall first be
applied to any amounts required to be credited to Tenants pursuant to the terms
of their respective leases.
(b) Both before and after Closing, Seller will continue to
have the exclusive right to prosecute, but will not have the right to withdraw,
settle or otherwise compromise without the written consent of Buyer, which
consent will not be unreasonably withheld, any Tax Reduction Proceeding
initiated prior to the Closing Date for the year in which the Closing is to
occur. If, as of the Closing Date, Seller has not initiated a Tax Reduction
Proceeding for the year in which the Closing occurs, either Seller or Buyer may
thereafter do so; provided, however, that (i) Seller will first notify Buyer of
its intent to do so and will not initiate such a Tax Reduction Proceeding if
Buyer initiates the same within thirty (30) days after such notice; (ii) Buyer
will notify Seller promptly after Buyer has initiated such a Tax Reduction
Proceeding; and (iii) the party initiating such a Tax Reduction Proceeding will
not withdraw, settle or otherwise compromise the same without the prior written
consent of the other party hereto, which consent will not be unreasonably
withheld. All ad valorem tax refunds and credits received after the Closing Date
which are attributable to the year during which the Closing occurs will be
apportioned between the Seller and Buyer as of the Closing Date, after deducting
expenses of collection thereof (including reasonable attorneys' fees and
50
Page 59 of 64 Pages
disbursements) and crediting such refunds and credits to Tenants pursuant to the
terms of their respective leases.
13.5 Notices. Any notice pursuant to this Agreement will be given in
-------
writing by (a) personal delivery, or (b) reputable overnight delivery service
with proof of delivery, or (c) United States Mail, postage prepaid, registered
or certified mail, return receipt requested, or (d) legible facsimile
transmission sent to the intended addressee at the address set forth below, or
to such other address or to the attention of such other person as the addressee
has designated by written notice sent in accordance herewith, and will be deemed
to have been given either at the time of personal delivery, or, in the case of
expedited delivery service or mail, as of the date of first attempted delivery
at the address and in the manner provided herein, or, in the case of facsimile
transmission, as of the date of the facsimile transmission provided that an
original of such facsimile is also sent to the intended addressee by means
described in clauses (a), (b) or (c) above. Unless changed in accordance with
the preceding sentence, the addresses for notices given pursuant to this
Agreement will be as follows:
If to Seller:
------------
Xxxxx Equity, Inc.
000 Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with copy to Seller's counsel:
White & Case
First Union Financial Center
Suite 0000
Xxx Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Attention: H. Xxxxxxx Xxxxxx, Jr.
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to Buyer:
-----------
c/o Apollo Real Estate Advisors
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X.X. Xxxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
51
Page 60 of 64 Pages
with a copy to Buyer's counsel:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
13.6 Modifications. This Agreement cannot be changed orally, and no
-------------
executory agreement will be effective to waive, change, modify or discharge it
in whole or in part unless such executory agreement is in writing and is signed
by the parties against whom enforcement of any waiver, change, modification or
discharge is sought.
13.7 Tenant Notification Letters. Buyer will deliver to each and
-----------------------------
every tenant of the Property under a Lease thereof a signed statement
acknowledging Buyer's receipt and responsibility for each tenant's security
deposit (to the extent delivered by Seller to Buyer at Closing), if any, all in
compliance with and pursuant to the applicable provisions of applicable law. The
provisions of this paragraph will survive Closing.
13.8 Calculation of Time Periods. Unless otherwise specified, in
----------------------------
computing any period of time described in this Agreement, the day of the act or
event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is not a Business Day, in which event the period will run until
the end of the next day which is a Business Day. The final day of any such
period will be deemed to end at 5 p.m., local time.
13.9 Successors and Assigns. The terms and provisions of this
------------------------
Agreement are to apply to and bind the permitted successors and assigns of the
parties hereto.
13.10 Entire Agreement. This Agreement, including the Exhibits,
-----------------
Schedules, certificates, instruments and documents delivered herewith, contains
the entire agreement between the parties pertaining to the subject matter hereof
and fully supersedes all prior written or oral agreements and understandings
between the parties pertaining to such subject matter.
13.11 Further Assurances. Each party agrees that it will without
--------------------
further consideration execute and deliver such other documents and take such
other action, whether prior or subsequent to Closing, as may be reasonably
requested by the other party to consummate more effectively the purposes or
subject matter of this Agreement. Without limiting the generality of the
foregoing, Buyer will, if requested by Seller, execute acknowledgments of
receipt with respect to any materials delivered by Seller and received by Buyer
with respect to the Property. The provisions of this Section 13.11 will survive
Closing.
13.12 Counterparts. This Agreement may be executed in counterparts,
------------
and all such executed counterparts will constitute the same agreement.
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13.13 Severability. If any provision of this Agreement is determined
------------
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Agreement will nonetheless remain in full force and effect.
13.14 Applicable Law. This Agreement is governed by the laws of the
---------------
State of New York, except with respect to remedies governed by the law of the
jurisdiction in which an individual Property is situated.
13.15 No Third Party Beneficiary. The provisions of this Agreement and
--------------------------
of the documents to be executed and delivered at Closing are and will be for the
benefit of Seller, Buyer only and are not for the benefit of any third party,
and accordingly, no third party will have the right to enforce the provisions of
this Agreement or of the documents to be executed and delivered at Closing.
13.16 Exhibits and Schedules. The Schedules and Exhibits attached
-----------------------
hereto are hereby deemed to be an integral part of this Agreement.
13.17 Captions. The section headings appearing in this Agreement are
--------
for convenience of reference only and are not intended, to any extent and for
any purpose, to limit or define the text of any section or any subsection
hereof.
13.18 Construction. The parties acknowledge that the parties and their
------------
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party will not be employed in the interpretation of this Agreement or
any exhibits or amendments hereto.
13.19 Termination of Agreement. This Agreement may be terminated prior
------------------------
to the Closing:
(a) by Buyer, pursuant to Section 4.7(d), 7.1 or 7.2;
(b) by Buyer, pursuant to Section 3.4, 4.7(c) or 5.4(e);
(c) by Buyer, pursuant to Section 4.7(e);
(d) by Buyer, pursuant to Section 6.2;
(e) by Seller, pursuant to Section 4.8(d);
(f) by Seller, pursuant to Section 4.8(a) or 5.4(e);
(g) by Seller, pursuant to Section 4.8(b) as a result of
------
Buyer's breach of a representation or warranty contained in Section 5.6(h);
------
(h) by Seller, pursuant to Section 4.8(b) or (c) other than
------
as a result of Buyer's breach of a representation or warranty contained in
Section 5.6(h); and
------
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(i) by Seller, pursuant to Section 6.1.
13.20 Effect of Termination.
---------------------
(a) If this Agreement is terminated pursuant to:
(i) Section 13.19(b) hereof, then within ten (10)
--------
Business Days of such termination Seller shall pay to Buyer, by wire transfer in
immediately available funds, Buyer's Expenses;
(ii) Section 13.19(c) hereof, then within ten (10)
--------
Business Day of such termination, Buyer shall pay to Seller by wire transfer in
immediately available funds, Seller's Expenses;
(iii)Section 13.19(d) hereof, then Seller shall pay to
--------
Buyer the Default Fee plus Buyer's Expenses, and such payment shall be made in
accordance with Section 6.2 hereof;
(iv) Section 13.19(f) hereof, then within ten (10)
--------
Business Days of such termination, Seller shall pay to Buyer, by wire transfer
in immediately available funds, Buyer's Expenses;
(v) Section 13.19(g) hereof, then within ten (10)
--------
Business Days of such termination Buyer shall pay to Seller, by wire transfer in
immediately available funds, the Default Fee plus Seller's Expenses;
(vi) Section 13.19(h) hereof, then within ten (10)
-------
Business Days of such termination Buyer shall pay to Seller by wire transfer of
immediately available funds Seller's Expenses and Seller shall be entitled to
pursue indemnification pursuant to Section 5.7; or
(vii)Section 13.19(i) hereof, then Buyer shall pay to
--------
Seller either (A) Seller's Expenses, or (B) the Default Fee plus Seller's
Expenses, as applicable under Section 6.1 hereof, and such payment shall be made
in accordance with said Section 6.1.
(b) Notwithstanding any amounts due and payable under
Section 13.20(a) hereof, if this Agreement is terminated for any reason set
--------
forth in Section 13.19 hereof, then this Agreement shall be of no further force
-----
and effect, except for any provision which expressly survives a termination of
this Agreement, including, without limitation, the indemnification obligation
set forth in Section 8.1 and the confidentiality obligation set forth in Section
---
13.1 hereof.
----
13.21 No Recordation. Except as otherwise required by law, including
--------------
any filings required to be made with the Commission, neither this Agreement nor
any memorandum of the terms hereof will be recorded or otherwise placed of
public record and any breach of this covenant will, unless the party not placing
54
Page 63 of 64 Pages
same of record is otherwise in default hereunder, entitle the party not placing
same of record to pursue its rights and remedies under Article VI.
[Signatures on following page]
55
Page 64 of 64 Pages
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the Agreement Date.
SELLER:
XXXXX EQUITY, INC., a Florida corporation
By: /S/XXXXXX X. XXXXXXX
-----------------------------------------------------------
Name: XXXXXX X. XXXXXXX
---------------------------------------------------------
Title:
--------------------------------------------------------
Date: AUGUST 23, 2001
---------------------------------------------------------
BUYER:
XXXXX II REALTY TRUST, INC., a Maryland corporation
By: /S/ XXXX X.X. XXXXXXXXX
-----------------------------------------------------------
Name: XXXX X.X. XXXXXXXXX
---------------------------------------------------------
Title: VICE PRESIDENT
--------------------------------------------------------
Date: AUGUST 23, 2001
---------------------------------------------------------
56
