AGREEMENT OF SALE AND PURCHASE
BETWEEN
HSOV ASHFORD PERIMETER, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AS SELLER
AND
HARVARD PROPERTY TRUST, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AS PURCHASER
PERTAINING TO
ASHFORD PERIMETER BUILDING, ATLANTA, GEORGIA
EXECUTED EFFECTIVE AS OF
NOVEMBER 4, 2004
AGREEMENT OF SALE AND PURCHASE
THIS AGREEMENT OF SALE AND PURCHASE (this "AGREEMENT") is
entered into and effective for all purposes as of November 4, 2004 (the
"EFFECTIVE DATE"), by and between HSOV ASHFORD PERIMETER, LLC, a Delaware
limited liability company ("SELLER"), and HARVARD PROPERTY TRUST, LLC, a
Delaware limited liability company ("PURCHASER").
In consideration of the mutual promises, covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. For purposes of this Agreement, the following
capitalized terms have the meanings set forth in this Section 1.1:
"AFFILIATE" means any person or entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with Purchaser or Seller, as the case may be. For the
purposes of this definition, "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a person or entity, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have the
meanings correlative to the foregoing.
"AGREEMENT" has the meaning ascribed to such term in the opening
paragraph.
"AUTHORITIES" means the various governmental and
quasi-governmental bodies or agencies having jurisdiction over Seller, the Real
Property, the Improvements, or any portion thereof.
"BROKER" has the meaning ascribed to such term in Section 11.1.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a
day on which national banking associations are authorized or required to close.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. ss. 9601 et seq.), as amended
by the Superfund Amendments Reauthorization Act of 1986 (42 U.S.C. ss. 9601 et
seq.), as the same may be amended.
"CERTIFICATE AS TO FOREIGN STATUS" has the meaning ascribed to
such term in Section 10.3(e).
"CERTIFYING PARTY" has the meaning ascribed to such term in
Section 4.5.
"CLOSING" means the consummation of the purchase and sale of the
Property contemplated by this Agreement, as provided for in Article X.
"CLOSING DATE" means the date on which the Closing occurs, which
date will be January 6, 2005, or such earlier or later date to which Purchaser
and Seller may hereafter agree in writing.
"CLOSING STATEMENT" has the meaning ascribed to such term in
Section 10.4(a).
"CLOSING SURVIVING OBLIGATIONS" means the covenants, rights,
liabilities and obligations set forth in Sections 3.2(a), 3.2(b) (subject to
Section 16.1), 4.9, 5.2(a), 5.2(d), 5.3, 5.5, 5.6, 8.1 (subject to Section
16.1), 8.2, 10.4 (subject to the limitations therein), 10.7, 11.1, 13.3, 16.1
and Article 17.
"CLOSING TIME" has the meaning ascribed to such term in Section
10.4(a).
"CODE" has the meaning ascribed to such term in Section 4.9.
"COMMITMENT" has the meaning ascribed to such term in Section
6.2(a).
"CONFIDENTIALITY AGREEMENT" means that certain Confidentiality
Agreement dated , 2004 executed by Purchaser.
"DEED" has the meaning ascribed to such term in Section 10.3(a).
"DEPOSIT" has the meaning ascribed to such term in Section 4.1.
"DEPOSIT TIME" means 5:00 p.m. Dallas, Texas time on the
Business Day that immediately precedes the Closing Date.
"DOCUMENTS" has the meaning ascribed to such term in Section
5.2(a).
"XXXXXXX MONEY DEPOSIT" has the meaning ascribed to such term in
Section 4.1.
"EFFECTIVE DATE" has the meaning ascribed to such term in the
opening paragraph of this Agreement.
"ENVIRONMENTAL LAWS" means all federal, state and local
environmental laws, rules, statutes, directives, binding written
interpretations, binding written policies, ordinances and regulations issued by
any Authorities and in effect as of the date of this Agreement with respect to
or which otherwise pertain to or affect the Real Property or the Improvements,
or any portion thereof, the use, ownership, occupancy or operation of the Real
Property or the Improvements, or any portion thereof, or Purchaser, and as same
have been amended, modified or supplemented from time to time prior to and are
in effect as of the date of this Agreement, including but not limited to CERCLA,
the Hazardous Substances Transportation Act (49 U.S.C. ss. 1802 et seq.), RCRA,
thE Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Safe Drinking
Water Act (42 U.S.C. ss. 300f et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), THE
Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. ss. 11001
et seq.), the Radon and Indoor AiR Quality Research Act (42 U.S.C. ss. 7401
note, et seq.), comparable state and local laws, and any
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and all rules anD regulations which are in effect as of the date of this
Agreement under any and all of the aforementioned laws.
"ESCROW INSTRUCTIONS" has the meaning ascribed to such term in
Section 4.2.
"EXISTING SURVEY" has the meaning ascribed to such term in
Section 6.1.
"GENERAL CONVEYANCE" has the meaning ascribed to such term in
Section 10.2(b).
"GOVERNMENTAL REGULATIONS" means all laws, ordinances, rules and
regulations of the Authorities applicable to Seller or Seller's use and
operation of the Real Property or the Improvements or any portion thereof.
"HAZARDOUS SUBSTANCES" means all (a) asbestos, radon gas,
electromagnetic waves, urea formaldehyde foam insulation and transformers or
other equipment that contains dielectric fluid containing polychlorinated
biphenyls of 50 ppm or greater, (b) any solid, liquid, gaseous or thermal
contaminant, including smoke vapor, soot, fumes, acids, alkalis, chemicals,
waste, petroleum products or byproducts, asbestos, PCBs, phosphates, lead or
other heavy metals, chlorine, or radon gas, (c) any solid or liquid wastes
(including hazardous wastes), hazardous air pollutants, hazardous substances,
hazardous chemical substances and mixtures, toxic substances, pollutants and
contaminants, as such terms are defined in any Environmental Law, including,
without limitation CERCLA, RCRA, the National Environmental Policy Act (42
U.S.C. ss. 4321 et seq.), the HazardouS Substances Transportation Act, the Toxic
Substances Control Act, the Clean Water Act (33 U.S.C. ss. 1321 et seq.), the
Clean Air Act, the Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.), as such Laws have beeN amended and/or supplemented from time to time
prior to the date of this Agreement, and any and all rules and regulations
promulgated under any of the above, and (d) any other chemical, material or
substance, the use or presence of which, or exposure to the use or presence of
which, is prohibited, limited or regulated by any Environmental Laws, in effect
as of or prior to the date of this Agreement or as the same may be amended or
supplemented after the date of this Agreement.
"IMPROVEMENTS" means all buildings, structures, fixtures,
parking areas and improvements owned by Seller and located on the Real Property.
"INDEPENDENT CONSIDERATION" has the meaning ascribed to such
term in Section 3.4.
"INSPECTION PERIOD" means the period beginning upon the
Effective Date and ending at 5:00 p.m., Dallas, Texas time, on the twenty-first
(21st) day following the Effective Date.
"LEASING COSTS" has the meaning ascribed to such term in Section
10.4(e).
"LICENSEE PARTIES" has the meaning ascribed to such term in
Section 5.1(a).
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"LICENSES AND PERMITS" means, collectively, all of Seller's
right, title and interest, to the extent assignable without the necessity of
consent or assignable only with consent and such consent has been obtained, in
and to licenses, permits, certificates of occupancy, approvals, dedications,
subdivision maps and entitlements issued, approved or granted by the Authorities
prior to Closing in connection with the Real Property and the Improvements,
together with all renewals and modifications thereof.
"LISTS" has the meaning ascribed to such term in Section 8.2(f).
"MAJOR TENANTS" has the meaning ascribed to such term in Section
7.2(a).
"NEW TENANT COSTS" has the meaning ascribed to such term in
Section 10.4(e).
"OFAC" has the meaning ascribed to such term in Section 8.2(e).
"OFFICIAL RECORDS" means the Official Records of Real Property
in the Office of the Clerk and Recorder of the City of Atlanta and County of
DeKalb, Georgia.
"OPERATING EXPENSE RECOVERIES" has the meaning ascribed to such
term in Section 10.4(c).
"ORDER" has the meaning ascribed to such term in Section 8.2(e).
"ORDERS" has the meaning ascribed to such term in Section
8.2(e).
"OTHER PARTY" has the meaning ascribed to such term in Section
4.5.
"PERMITTED EXCEPTIONS" has the meaning ascribed to such term in
Section 6.2(a).
"PERMITTED OUTSIDE PARTIES" has the meaning ascribed to such
term in Section 5.2(b).
"PERSON" means any individual, partnership, limited partnership,
joint venture, corporation, limited liability company, trust, estate, custodian,
trustee, executor, administrator, nominee, representative, unincorporated
organization, sole proprietorship, trust, employee benefit plan, tribunal,
governmental entity, department, or agency, or other entity.
"PERSONAL PROPERTY" means all of Seller's right, title and
interest in and to the equipment, appliances, tools, supplies, machinery,
artwork, furnishings, property-level books and records and other tangible
personal property attached to, appurtenant to, located in and used exclusively
in connection with the ownership or operation of the Improvements and described
on EXHIBIT A attached hereto.
"PREPAYMENT PREMIUM" has the meaning ascribed to such term in
Section 10.6(a).
"PROPERTY" has the meaning ascribed to such term in Section 2.1.
"PRORATION ITEMS" has the meaning ascribed to such term in
Section 10.4(a).
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"PURCHASE PRICE" has the meaning ascribed to such term in
Section 3.1.
"PURCHASER" has the meaning ascribed to such term in the opening
paragraph of this Agreement.
"PURCHASER'S INFORMATION" has the meaning ascribed to such term
in Section 5.2(c).
"RCRA" means the Resource Conservation and Recovery Act (42
U.S.C. ss. 6901 et seq.), as amendeD by the Hazardous and Solid Wastes
Amendments of 1984, and as further amended.
"REAL PROPERTY" means those certain parcels of or interests in
real property located in DeKalb County, Georgia, as more particularly described
on EXHIBIT B attached hereto and made a part hereof, together with all of
Seller's right, title and interest, if any, in and to the appurtenances
pertaining thereto, including but not limited to Seller's right, title and
interest in and to the streets, alleys and right-of-ways which abut such real
property, and any easement rights, air rights, subsurface rights, development
rights and water rights appurtenant to such real property.
"RECORDS AND PLANS" means, collectively: (i) all books and
records, including but not limited to property operating statements,
specifically relating to the Improvements; (ii) all structural reviews,
architectural drawings and engineering, soils, seismic, geologic and
architectural reports, studies and certificates pertaining to the Real Property
or the Improvements; and (iii) all final plans, specifications and drawings of
the Improvements or any portion thereof. The terms "Records and Plans" shall not
include (1) any document or correspondence which would be subject to the
attorney- client privilege; (2) any document or item which Seller is
contractually or otherwise bound to keep confidential; (3) any documents
pertaining to the marketing of the Property for sale to prospective purchasers;
(4) any internal memoranda, reports or assessments of Seller or Seller's
Affiliates relating to Seller's valuation of the Property; (5) appraisals of the
Property whether prepared internally by Seller or Seller's Affiliates or
externally; (6) any documents or items which Seller considers confidential or
proprietary; (7) any documents or items which are not in Seller's possession and
control, and (8) any materials projecting or relating to the future performance
of the Property.
"RENTALS" has the meaning ascribed to such term in Section
10.4(b), and some may be "Delinquent" in accordance with the meaning ascribed to
such term in Section 10.4(b).
"RENT ROLL" has the meaning ascribed to such term in Section
5.2(a).
"REPORTING PERSON" has the meaning ascribed to such term in
Section 4.9(a).
"SELLER" has the meaning ascribed to such term in the opening
paragraph of this Agreement.
"SELLER CERTIFICATE" has the meaning ascribed to such term in
Section 7.2(b).
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"SERVICE CONTRACTS" means all of Seller's right, title and
interest in all service agreements, maintenance contracts, equipment leasing
agreements, warranties, guarantees, bonds and other contracts for the provision
of labor, services, materials or supplies relating solely to the Real Property,
Improvements or Personal Property and under which Seller is currently paying for
services rendered in connection with the Property, as listed and described on
EXHIBIT C attached hereto, together with all renewals, supplements, amendments
and modifications thereof, and any new such agreements entered into after the
Effective Date, to the extent permitted by Section 7.1(f), except that any
management agreements will be terminated at Closing and are excluded from such
term.
"SIGNIFICANT PORTION" means damage by fire or other casualty to
the Real Property and the Improvements or a portion thereof requiring repair
costs in excess of $1,000,000 as such repair costs are reasonably estimated by
Seller.
"TENANT DEPOSITS" means all security deposits, paid or deposited
by the Tenants to Seller, as landlord, or any other person on Seller's behalf
pursuant to the Tenant Leases, which have not been applied to obligations under
Tenant Leases (together with any interest which has accrued thereon, but only to
the extent such interest has accrued for the account of the respective Tenants).
"TENANT LEASES" means the following pertaining to the
Improvements: (i) any and all written leases, rental agreements, occupancy
agreements and license agreements (and any and all written renewals, amendments,
modifications and supplements thereto) entered into on or prior to the Effective
Date, (ii) any and all new written leases, rental agreements, occupancy
agreements and license agreements entered into after the Effective Date and
prior to the Closing Date and (iii) any and all new written renewals,
amendments, modifications and supplements to any of the foregoing entered into
after the Effective Date and prior to the Closing Date, and, as to (ii) and
(iii) only, to the extent approved by Purchaser pursuant to Section 7.1(e) to
the extent such approval is required under Section 7.1(e). Tenant Leases will
not include subleases, franchise agreements or similar occupancy agreements
entered into by Tenants which, by their nature, are subject to Tenant Leases.
"TENANT NOTICE LETTERS" has the meaning ascribed to such term in
Section 10.7.
"TENANTS" means all persons or entities leasing, renting or
occupying space within the Improvements pursuant to the Tenant Leases, but
expressly excludes any subtenants, licensees, concessionaires, franchisees or
other persons or entities whose occupancy is derived through Tenants.
"TERMINATION SURVIVING OBLIGATIONS" means the rights,
liabilities and obligations set forth in Sections 5.2, 5.3, 5.6, 11.1, 12.1,
Article XIII and Article XVII.
"TITLE COMPANY" means Partners Title Company, having an office
address at 000 Xxxx Xxxxxx, Xxxxx 0000X, Xxxxxxx, Xxxxx 77002-3215, Attention:
Xxxx Xxxxxxxx, Phone: (000) 000-0000.
"TITLE POLICY" has the meaning ascribed to such term in Section
6.2(a).
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"TO SELLER'S KNOWLEDGE" means the present actual (as opposed to
constructive or imputed) knowledge solely of Xxx Xxxxxx, without any independent
investigation or inquiry whatsoever. Such individuals are named in this
Agreement solely for the purpose of establishing the scope of Seller's
knowledge. Such individuals shall not be deemed to be parties to this Agreement
nor to have made any representations or warranties hereunder, and no recourse
shall be had to such individuals for any of Seller's representations and
warranties hereunder (and Purchaser hereby waives any liability of or recourse
against such individuals).
"TRAVELER'S LOAN" means that certain $27,000,000 loan made by
The Travelers Insurance Company to Seller and secured by the Property.
"TRAVELER'S LOAN AGREEMENT" means that certain Loan Agreement
between Seller and The Travelers Insurance Company dated August 1, 2003.
SECTION 1.2 REFERENCES; EXHIBITS AND SCHEDULES. Except as otherwise
specifically indicated, all references in this Agreement to Articles or Sections
refer to Articles or Sections of this Agreement, and all references to Exhibits
or Schedules refer to Exhibits or Schedules attached hereto, all of which
Exhibits and Schedules are incorporated into, and made a part of, this Agreement
by reference. The words "herein," "hereof," "hereinafter" and words and phrases
of similar import refer to this Agreement as a whole and not to any particular
Section or Article.
ARTICLE II
AGREEMENT OF PURCHASE AND SALE
SECTION 2.1 AGREEMENT. Seller hereby agrees to sell, convey and assign
to Purchaser, and Purchaser hereby agrees to purchase and accept from Seller, on
the Closing Date and subject to the terms and conditions of this Agreement, all
of the following (collectively, the "PROPERTY"):
(a) the Real Property;
(b) the Improvements;
(c) the Personal Property;
(d) all of Seller's right, title and interest as lessor in
and to the Tenant Leases and, subject to the terms of the respective applicable
Tenant Leases, the Tenant Deposits;
(e) all of Seller's right, title and interest, if any, in,
to and under the Service Contracts and the Licenses and Permits, in each case to
the extent assignable without the necessity of consent or approval and, if
consent or approval is required, to the extent any necessary consent or approval
has been obtained;
(f) all of Seller's right, title and interest, to the extent
assignable or transferable without the necessity of consent or approval (and if
consent or approval is required, to the extent such consent or approval has been
obtained), in and to all trade names, trademarks, logos and service marks (in
each case, if any) utilized solely by Seller in connection with the
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operation of the Real Property and Improvements (other than the names or
variations thereof of Seller, its Affiliates, the property manager and Tenants);
SECTION 2.2 INDIVISIBLE ECONOMIC PACKAGE. Purchaser has no right to
purchase, and Seller has no obligation to sell, less than all of the Property,
it being the express agreement and understanding of Purchaser and Seller that,
as a material inducement to Seller and Purchaser to enter into this Agreement,
Purchaser has agreed to purchase, and Seller has agreed to sell, all of the
Property, subject to and in accordance with the terms and conditions hereof.
ARTICLE III
CONSIDERATION
SECTION 3.1 PURCHASE PRICE. The purchase price for the Property (the
"PURCHASE PRICE") will be FORTY SIX MILLION THREE HUNDRED THOUSAND and No/100
Dollars ($46,300,000.00) in lawful currency of the United States of America,
payable as provided in Section 3.3. To the extent that the Prepayment Premium is
less than the prepayment premium that would have otherwise been payable had such
premium been calculated in accordance with Section 2.3(4) of the Traveler's Loan
Agreement (the "HYPOTHETICAL PREPAYMENT PREMIUM"), the Purchase Price shall be
increased by one-half (1/2) of the amount by which the Prepayment Premium is
less than the Hypothetical Prepayment Premium. For example, if the Hypothetical
Prepayment Premium is $1,500,000 and the Prepayment Premium is $1,000,000, the
Purchase Price shall be increased by $250,000 (($1,500,000 - $1,000,000) x 1/2.)
SECTION 3.2 ASSUMPTION OF OBLIGATIONS.
(a) As additional consideration for the purchase and sale of
the Property, effective as of Closing, Purchaser will be deemed to have, and by
virtue of closing the purchase of the Property Purchaser shall have: (1) assumed
and agreed to perform or pay, as applicable, (i) all of the covenants and
obligations of Seller, Seller's predecessor in title and Seller's Affiliates
pursuant to the Tenant Leases and Service Contracts assigned to Purchaser and
which are to be performed subsequent to the Closing Date, (ii) all obligations
under the Tenant Leases and the Service Contracts assigned to Purchaser and
relating to the physical or environmental condition of the Property, regardless
of whether such obligations arise before or after the Closing Date and (iii) the
Leasing Costs for which Purchaser is responsible under Section 10.4(e) below;
and (2) assumed and agreed to discharge, perform and comply with each and every
liability, duty, covenant, debt or obligation of Seller or any of its Affiliates
resulting from, arising out of or in any way related to the Licenses and Permits
and arising or accruing on or after the Closing Date. Purchaser hereby
indemnifies, defends, and holds Seller and its Affiliates harmless from and
against any and all claims, liens, damages, demands, causes of action,
liabilities, lawsuits, judgments, losses, costs and expenses (including without
limitation, reasonable attorneys' fees and expenses) asserted against or
incurred by Seller or its Affiliates and arising out of the failure of Purchaser
to perform its obligations pursuant to this Section 3.2(a). The provisions of
this Section 3.2(a) shall fully survive the closing without limitation.
(b) Effective as of Closing, Seller will be deemed to have,
and by virtue of closing the sale of the Property Seller shall have, agreed to
indemnify and hold Purchaser harmless from and against any and all claims,
liens, damages, demands, causes of action,
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liabilities, lawsuits, judgments, losses, costs and expenses (including without
limitation, reasonable attorneys' fees and expenses) asserted against or
incurred by Purchaser by reason of or arising out of any failure by Seller to
perform its obligations under the Service Contracts and Tenant Leases assigned
to Purchaser to the extent the same arose prior to the Closing Date, other than
(1) any obligations relating to the physical or environmental conditions of the
Property, and (2) any Leasing Costs, which obligations are expressly assumed by
Purchaser as provided in Section 3.2(a) above; provided, however, that Seller's
obligations under this subsection (b) shall not apply to any claims which (i)
are based on any matter which is identified in this Agreement (including the
Schedules and Exhibits hereto) as an exception or qualification to any
representation or warranty of Seller set forth herein, or in any estoppel
certificate delivered to Purchaser at or prior to the Closing pursuant to this
Agreement by any Tenant, (ii) are based on any matter constituting a breach of
Seller's representations and warranties that is deemed waived by Purchaser
pursuant to the terms of this Agreement or (iii) are based on a liability which
was taken into account as a Closing adjustment pursuant to Section 10.4. The
provisions of this Section 3.2(b) are subject in all events to the provisions of
Section 16.1 below. This Section 3.2(b) shall survive Closing only to the extent
provided in Section 16.1 below.
SECTION 3.3 METHOD OF PAYMENT OF PURCHASE PRICE. No later than the
Deposit Time, Purchaser will deposit in escrow with the Title Company the
Purchase Price (subject to adjustments described in Section 10.4), together with
all other costs and amounts to be paid by Purchaser at Closing pursuant to the
terms of this Agreement, by Federal Reserve wire transfer of immediately
available funds to an account to be designated by the Title Company. No later
than 2:00 p.m. Dallas, Texas time on the Closing Date: (a) Purchaser will cause
the Title Company to (i) pay to Seller by Federal Reserve wire transfer of
immediately available funds to an account to be designated by Seller, the
Purchase Price (subject to adjustments described in Section 10.4), less any
costs or other amounts to be paid by Seller at Closing pursuant to the terms of
this Agreement, and (ii) pay to all appropriate payees the other costs and
amounts to be paid by Purchaser at Closing pursuant to the terms of this
Agreement; and (b) Seller will direct the Title Company to pay to the
appropriate payees out of the proceeds of Closing payable to Seller, all costs
and amounts to be paid by Seller at Closing pursuant to the terms of this
Agreement.
SECTION 3.4 INDEPENDENT CONSIDERATION. The sum of One Hundred
Dollars ($100.00) (the "INDEPENDENT CONSIDERATION") out of the Xxxxxxx Money
Deposit is independent of any other consideration provided hereunder, shall be
fully earned by Seller upon the Effective Date hereof, and is not refundable to
Purchaser under any circumstances. Accordingly, if this Agreement is terminated
for any reason by either party, the Independent Consideration shall be paid by
the Title Company to Seller.
ARTICLE IV
XXXXXXX MONEY DEPOSIT AND ESCROW INSTRUCTIONS
SECTION 4.1 THE DEPOSIT. Within two (2) Business Days after the
execution and delivery of this Agreement by Purchaser and Seller, Purchaser
shall deposit with the Title Company, in good funds immediately collectible by
the Title Company, the sum of One Million and No/100 Dollars ($1,000,000.00)
(the "FIRST DEPOSIT"), which will be held in escrow by the Title Company
pursuant to the terms of this Agreement. If Purchaser has not previously
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terminated this Agreement, then within two (2) Business Days after the
expiration of the Inspection Period, Purchaser shall deposit with the Title
Company, in good funds immediately collectible by the Title Company, an
additional sum of One Million and No/100 Dollars ($1,000,000.00) (the "SECOND
DEPOSIT"), which will be held in escrow by the Title Company pursuant to the
terms of this Agreement. The Deposit (plus all interest earned thereon), and the
Second Deposit (plus all interest earned thereon), when deposited, less the
Independent Consideration, shall be the "XXXXXXX MONEY DEPOSIT" for purposes of
this Agreement. If Purchaser fails to timely make the Second Deposit, then
Purchaser shall be in default hereunder, and Seller shall be entitled to
exercise its rights and remedies under Section 13.2. At Closing, the Xxxxxxx
Money Deposit shall be applied towards payment of the Purchase Price.
SECTION 4.2 ESCROW INSTRUCTIONS. Article IV of this Agreement
constitutes the escrow instructions of Seller and Purchaser to the Title Company
with regard to the Xxxxxxx Money Deposit and the Closing (the "ESCROW
INSTRUCTIONS"). By its execution of the joinder attached hereto, the Title
Company agrees to be bound by the provisions of this Article IV. If any
requirements relating to the duties or obligations of the Title Company
hereunder are not acceptable to the Title Company, or if the Title Company
requires additional instructions, the parties agree to make such deletions,
substitutions and additions to the Escrow Instructions as Purchaser and Seller
hereafter mutually approve in writing and which do not substantially alter this
Agreement or its intent. In the event of any conflict between this Agreement and
such additional escrow instructions, this Agreement will control.
SECTION 4.3 DOCUMENTS DEPOSITED INTO ESCROW. On or before the
Deposit Time, (a) Purchaser will cause the difference between the Purchase Price
and the Deposit and interest thereon (subject to the prorations provided for in
Section 10.4 and with the addition of all Closing costs to be paid by Purchaser)
to be transferred to the Title Company's escrow account, in accordance with the
timing and other requirements of Section 3.3, (b) Purchaser will deliver in
escrow to the Title Company the documents described and provided for in Section
10.2(b), (c), (d) and (e) below, and (c) Seller will deliver in escrow to the
Title Company the documents described and provided for in Section 10.3(a), (b),
(c), (d), (e), (f), (g), (i) and (l) below.
SECTION 4.4 CLOSE OF ESCROW. Provided that the Title Company has not
received from Seller or Purchaser any written termination notice as described
and provided for in Section 4.5 (or if such a notice has been previously
received, provided that the Title Company has received from such party a
withdrawal of such notice), when Purchaser and Seller have delivered the
documents required by Section 4.3, the Title Company will:
(a) If applicable and when required, file with the Internal
Revenue Service (with copies to Purchaser and Seller) the reporting statement
required under Section 6045(e) of the Internal Revenue Code and Section 4.9;
(b) Insert the applicable Closing Date as the date of any
document delivered to the Title Company undated, and assemble counterparts into
single instruments;
(c) Disburse to Seller, by wire transfer to Seller of
immediately available federal funds, in accordance with wiring instructions to
be obtained by the Title Company from
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Seller, all sums to be received by Seller from Purchaser at the Closing,
comprised of the Purchase Price as adjusted in accordance with the provisions of
this Agreement;
(d) Deliver the Deed to Purchaser by agreeing to cause the
same to be recorded in the Official Records and agreeing to obtain conformed
copies of the recorded Deed for delivery to Purchaser and to Seller following
recording;
(e) Issue to Purchaser the Title Policy required by Section
6.2(a) of this Agreement;
(f) Deliver to Seller, in addition to Seller's Closing
proceeds, all documents deposited with the Title Company for delivery to Seller
at the Closing; and
(g) Deliver to Purchaser (i) all documents deposited with
the Title Company for delivery to Purchaser at the Closing and (ii) any funds
deposited by Purchaser in excess of the amount required to be paid by Purchaser
pursuant to this Agreement.
SECTION 4.5 TERMINATION NOTICES. Other than as provided in Section
5.4, if at any time the Title Company receives a certificate of either Seller or
Purchaser (for purposes of this Section 4.5, the "CERTIFYING PARTY") stating
that: (a) the Certifying Party is entitled to receive the Xxxxxxx Money Deposit
pursuant to the terms of this Agreement, and (b) a copy of the certificate was
delivered as provided herein to the other party (for purposes of this Section
4.5, the "OTHER PARTY") prior to or contemporaneously with the giving of such
certificate to the Title Company, then, unless the Title Company has then
previously received, or receives within three (3) Business Days after receipt of
the Certifying Party's certificate, contrary instructions from the Other Party,
the Title Company, within one (1) Business Day after the expiration of the
foregoing three (3) Business Day period, will deliver the Independent
Consideration to Seller and the Xxxxxxx Money Deposit to the Certifying Party,
and thereupon the Title Company will be discharged and released from any and all
liability hereunder. If the Title Company receives contrary instructions from
the Other Party within three (3) Business Days following the Title Company's
receipt of said certificate, the Title Company will not so deliver the Xxxxxxx
Money Deposit, but will continue to hold the same pursuant hereto, subject to
Section 4.6.
SECTION 4.6 INDEMNIFICATION OF TITLE COMPANY. If this Agreement or
any matter relating hereto becomes the subject of any litigation or controversy,
Purchaser and Seller jointly and severally, will hold Title Company free and
harmless from any loss or expense, including reasonable attorneys' fees, that
may be suffered by it by reason thereof other than as a result of Title
Company's gross negligence or willful misconduct. In the event conflicting
demands are made or notices served upon Title Company with respect to this
Agreement, or if there is uncertainty as to the meaning or applicability of the
terms of this Agreement or the Escrow Instructions, Purchaser and Seller
expressly agree that the Title Company will be entitled to file a suit in
interpleader and to obtain an order from the court requiring Purchaser and
Seller to interplead and litigate their several claims and rights among
themselves. Upon delivery of the Independent Consideration to Seller and the
filing of the action in interpleader and the deposit of the Xxxxxxx Money
Deposit into the registry of the court, the Title Company will be fully released
and discharged from any further obligations imposed upon it by this Agreement
after such deposit.
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SECTION 4.7 MAINTENANCE OF CONFIDENTIALITY BY TITLE COMPANY. Except
as may otherwise be required by law or by this Agreement, Title Company will
maintain in strict confidence and not disclose to anyone the existence of this
Agreement, the identity of the parties hereto, the amount of the Purchase Price,
the provisions of this Agreement or any other information concerning the
transactions contemplated hereby, without the prior written consent of Purchaser
and Seller in each instance.
SECTION 4.8 INVESTMENT OF XXXXXXX MONEY DEPOSIT. Title Company will
invest and reinvest the Deposit, at the instruction and sole election of
Purchaser, only in (a) bonds, notes, Treasury bills or other securities
constituting direct obligations of, or guaranteed by the full faith and credit
of, the United States of America, and in no event maturing beyond the Closing
Date, or (b) an interest-bearing account at a commercial bank mutually
acceptable to Seller, Purchaser and Title Company. The investment of the Deposit
will be at the sole risk of Purchaser and no loss on any investment will relieve
Purchaser of its obligations to pay to Seller as liquidated damages the original
amount of the Deposit as provided in Article XIII, or of its obligation to pay
the Purchase Price. All interest earned on the Deposit will be the property of
Purchaser and will be reported to the Internal Revenue Service as income until
such time as Seller is entitled to the Deposit pursuant to this Agreement.
Purchaser will provide the Title Company with a taxpayer identification number
and will pay all income taxes due by reason of interest accrued on the Deposit.
SECTION 4.9 DESIGNATION OF REPORTING PERSON. In order to assure
compliance with the requirements of Section 6045 of the Internal Revenue Code of
1986, as amended (for purposes of this Section 4.9, the "CODE"), and any related
reporting requirements of the Code, the parties hereto agree as follows:
(a) The Title Company (for purposes of this Section 4.9, the
"REPORTING PERSON"), by its execution hereof, hereby assumes all
responsibilities for information reporting required under Section 6045(e) of the
Code.
(b) Seller and Purchaser each hereby agree:
(i) to provide to the Reporting Person all
information and certifications regarding such party, as reasonably
requested by the Reporting Person or otherwise required to be provided
by a party to the transaction described herein under Section 6045 of the
Code; and
(ii) to provide to the Reporting Person such party's
taxpayer identification number and a statement (on Internal Revenue
Service Form W-9 or an acceptable substitute form, or on any other form
the applicable current or future Code sections and regulations might
require and/or any form requested by the Reporting Person), signed under
penalties of perjury, stating that the taxpayer identification number
supplied by such party to the Reporting Person is correct.
(c) Each party hereto agrees to retain this Agreement for
not less than four years from the end of the calendar year in which Closing
occurred, and to produce it to the Internal Revenue Service upon a valid request
therefor.
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(d) The addresses for Seller and Purchaser are as set forth
in Section 14.1 hereof, and the real estate subject to the transfer provided for
in this Agreement is described in EXHIBIT B.
ARTICLE V
INSPECTION OF PROPERTY
SECTION 5.1 ENTRY AND INSPECTION.
(a) From and after the Effective Date, but subject to the
provisions of this Section 5.1 and subject to the obligations set forth in
Section 5.3 below, Seller will permit Purchaser and its authorized agents and
representatives (collectively, the "LICENSEE PARTIES") the right to enter upon
the Real Property at all reasonable times during normal business hours to
perform inspections of the Property and communicate with Tenants and service
providers; provided, however, Purchaser shall not have the right to communicate
with Tenants or service providers unless interviews and communications are
coordinated through Seller and Seller shall have the right to participate in any
such communications. Purchaser will provide to Seller written notice of the
intention of Purchaser or the other Licensee Parties to enter the Real Property
at least 48 hours prior to such intended entry and specify the intended purpose
therefor and the inspections and examinations contemplated to be made and/or the
Tenants and service providers with whom any Licensee Party will communicate. At
Seller's option, Seller may be present for any such entry, inspection and
communication with any Tenants or service providers. Notwithstanding anything to
the contrary contained herein, no physical testing or sampling shall be
conducted during any such entry by Purchaser or any Licensee Party upon the Real
Property without Seller's specific prior written consent, which consent may be
withheld, delayed or conditioned in Seller's sole and absolute discretion;
provided, however, that prior to giving any such approval, Seller shall be
provided with a written sampling plan in reasonable detail in order to allow
Seller a reasonable opportunity to evaluate such proposal. If Purchaser or the
other Licensee Parties undertake any borings or other disturbances of the soil,
the soil shall be recompacted to its condition as existed immediately before any
such borings or other disturbances were undertaken. If Purchaser or any Licensee
Party takes any sample from the Real Property in connection with any testing,
Purchaser shall, upon the request of Seller, provide to Seller a portion of such
sample being tested to allow Seller, if it so chooses, to perform its own
testing.
(b) Subject to the obligations set forth in Section 5.3
below, the Licensee Parties shall have the right to communicate directly with
the Authorities for any good faith reasonable purpose in connection with the
transaction contemplated by this Agreement (so long as any such communications
made during the Inspection Period are conducted without disclosing that a sale
of the Property is contemplated).
SECTION 5.2 DOCUMENT REVIEW.
(a) Seller has made available prior to the execution and
delivery of this Agreement, or will make available within two (2) Business Days
after the execution and delivery of this Agreement, to Purchaser and its
authorized agents or representatives for review, inspection, examination,
analysis, verification and photocopying, at either the office of Seller,
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Seller's property manager or at the Real Property, the following relative to the
Property to the extent in Seller's possession or control (collectively, the
"DOCUMENTS"): (i) all existing environmental reports and studies of the Property
made available to Purchaser; (ii) assessments (special or otherwise), ad valorem
and personal property tax bills, covering the year preceding the Effective Date;
(iii) Seller's most current rent roll (the "RENT ROLL"); (iv) operating
statements for the previous time period covering the period of Seller's
ownership of the Property; (v) copies of the Tenant Leases, the Service
Contracts, the Licenses and Permits and the Records and Plans; and (vi) a
current inventory of the Personal Property.
(b) Purchaser acknowledges that any and all of the Documents
may be proprietary and confidential in nature and have been provided to
Purchaser solely to assist Purchaser in determining the feasibility of
purchasing the Property. Subject only to the provisions of Article XII and
Section 17.16, Purchaser agrees not to disclose the contents of the Documents,
or any of the provisions, terms or conditions contained therein, to any party
outside of Purchaser's organization other than its attorneys, partners,
accountants, consultants, lenders or investors (collectively, for purposes of
this Section 5.2(b), the "PERMITTED OUTSIDE PARTIES"). Purchaser further agrees
that within its organization, or as to the Permitted Outside Parties, the
Documents will be disclosed and exhibited only to those persons within
Purchaser's organization or to those Permitted Outside Parties who are
responsible for determining the feasibility of Purchaser's acquisition and
financing of the Property. Purchaser further acknowledges that the Documents and
other information relating to the leasing arrangements between Seller and the
Tenants or prospective tenants are proprietary and confidential in nature.
Subject to the provisions of Section 17.16, Purchaser agrees not to divulge the
contents of such Documents and other information except in strict accordance
with the confidentiality standards set forth in this Section 5.2 and Article
XII. In permitting Purchaser and the Permitted Outside Parties to review the
Documents or information to assist Purchaser, Seller has not waived any
privilege or claim of confidentiality with respect thereto, and no third party
benefits or relationships of any kind, either express or implied, have been
offered, intended or created by Seller and any such claims are expressly
rejected by Seller and waived by Purchaser and the Permitted Outside Parties,
for whom, by its execution of this Agreement, Purchaser is acting as an agent
with regard to such waiver.
(c) Purchaser will return to Seller all copies Purchaser has
made of the Documents and all copies of any studies, reports or test results
regarding any part of the Property obtained by Purchaser, before or after the
execution of this Agreement, in connection with Purchaser's inspection of the
Property (collectively, "PURCHASER'S INFORMATION") not later than ten (10)
Business Days following the time this Agreement is terminated for any reason.
(d) Purchaser acknowledges that some of the Documents may
have been prepared by third parties and may have been prepared prior to Seller's
ownership of the Property. Purchaser hereby acknowledges that, except as
expressly provided in Section 8.1 below, Seller has not made and does not make
any representation or warranty regarding the truth, accuracy or completeness of
the Documents or the sources thereof (whether prepared by Seller, Seller's
Affiliates or any other person or entity). Seller has not undertaken any
independent investigation as to the truth, accuracy or completeness of the
Documents and is providing the Documents solely as an accommodation to
Purchaser.
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(e) Notwithstanding any provision of this Agreement to the
contrary, no termination of this Agreement will terminate Purchaser's
obligations pursuant to this Section 5.2.
(f) Purchaser has advised Seller that Purchaser must cause
to be prepared up to three (3) years of audited financial statements in respect
of the Property in compliance with the policies of Purchaser and certain laws
and regulations, including, without limitation, Securities and Exchange
Commission Regulation S-X, Rule 3-14. Seller agrees (i) to use commercially
reasonable efforts to cooperate to make information available to Purchaser's
auditors in connection with the preparation of such audited financial
statements, and (ii) to make Seller's property manager and Seller's asset
manager in respect of the Property available for interview in connection with
the conduct of such audit (it being understood and agreed that the foregoing
covenants shall survive Closing). Notwithstanding the foregoing covenants,
Seller shall have no obligation to take any action that may reasonably be
expected to expose Seller to liability from Purchaser's auditors.
SECTION 5.3 ENTRY AND INSPECTION OBLIGATIONS.
(a) Purchaser agrees that in entering upon and inspecting or
examining the Property and communicating with any Tenants, Purchaser and the
other Licensee Parties will not: disturb the Tenants or interfere with their use
of the Property pursuant to their respective Tenant Leases; interfere with the
operation and maintenance of the Property; damage any part of the Property or
any personal property owned or held by any Tenant or any other person or entity;
injure or otherwise cause bodily harm to Seller or any Tenant, or to any of
their respective agents, guests, invitees, contractors and employees, or to any
other person or entity; permit any liens to attach to the Property by reason of
the exercise of Purchaser's rights under this Article V; communicate with the
Tenants or service providers without Seller's prior written consent as provided
in this Article V; or, subject to the provisions of Section 17.16, reveal or
disclose any information obtained concerning the Property and the Documents to
anyone outside Purchaser's organization, except in accordance with the
confidentiality standards set forth in Section 5.2(b) and Article XII. Purchaser
will: (i) maintain and cause those entering the Property to maintain
comprehensive general liability (occurrence) insurance in terms (including
contractual indemnity coverage with respect to the indemnity in Section 5.3(b))
and amounts satisfactory to Seller covering any accident arising in connection
with the presence or activities of Purchaser or the other Licensee Parties on
the Property, and deliver to Seller a certificate of insurance verifying such
coverage and Seller being named as an additional insured on such coverage prior
to entry upon the Property; (ii) promptly pay when due the costs of all
inspections, entries, samplings and tests and examinations done with regard to
the Property; and (iii) promptly restore the Property to its condition as
existed immediately prior to any such inspection, investigations, examinations,
entries, samplings and tests, but in no event later than ten (10) days after the
damage occurs. Nothing contained in this Section 5.3 shall be deemed or
construed as Seller's consent to any further physical testing or sampling with
respect to the Property after the date hereof.
(b) Purchaser hereby indemnifies, defends and holds Seller
and its members, partners, agents, officers, directors, employees, successors,
assigns and Affiliates harmless from and against any and all liens, claims,
causes of action, damages, liabilities, demands, suits, and obligations,
together with all losses, penalties, costs and expenses relating to any of the
foregoing (including but not limited to court costs and reasonable attorneys'
and consultants' fees) arising
15
out of any inspections, investigations, examinations, entries, samplings or
tests conducted by Purchaser or any Licensee Party, whether prior to or after
the date hereof, with respect to the Property or any violation of the provisions
of this Section 5.3.
(c) Notwithstanding any provision of this Agreement to the
contrary, neither the Closing nor a termination of this Agreement will terminate
Purchaser's obligations pursuant to this Section 5.3.
SECTION 5.4 RIGHT OF TERMINATION. Seller agrees that in the event
Purchaser determines in Purchaser's sole discretion, that the Property is not
suitable for its purposes, or that it is in the interest of Purchaser to
terminate this Agreement for any other reason, then Purchaser shall have the
right to terminate this Agreement by sending written notice thereof (the "Notice
of Termination") to Seller prior to the expiration of the Inspection Period.
Upon delivery by Purchaser of such Notice of Termination within the Inspection
Period, this Agreement shall terminate and the Xxxxxxx Money Deposit shall be
returned to Purchaser (and the Independent Consideration paid to Seller). If
Purchaser fails to send Seller a Notice of Termination prior to the expiration
of the Inspection Period, Purchaser shall no longer have any right to terminate
this Agreement under this Section 5.4.
SECTION 5.5 SALE "AS IS". THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER, THIS AGREEMENT
REFLECTS THE MUTUAL AGREEMENT OF SELLER AND PURCHASER, AND PURCHASER HAS
CONDUCTED, OR WILL CONDUCT DURING THE INSPECTION PERIOD, ITS OWN INDEPENDENT
EXAMINATION OF THE PROPERTY. OTHER THAN THE SPECIFIC MATTERS REPRESENTED IN
SECTION 8.1 HEREOF (AS LIMITED BY SECTION 16.1 OF THIS AGREEMENT), BY WHICH ALL
OF THE FOLLOWING PROVISIONS OF THIS SECTION 5.5 ARE LIMITED, PURCHASER HAS NOT
RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY
REPRESENTATION OR WARRANTY OF SELLER OR ANY OF SELLER'S AFFILIATES, AGENTS OR
REPRESENTATIVES, AND PURCHASER HEREBY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS
OR WARRANTIES HAVE BEEN MADE. SELLER SPECIFICALLY DISCLAIMS, AND NEITHER IT NOR
ANY OF ITS AFFILIATES NOR ANY OTHER PERSON IS MAKING, ANY REPRESENTATION,
WARRANTY OR ASSURANCE WHATSOEVER TO PURCHASER AND NO WARRANTIES OR
REPRESENTATIONS OF ANY KIND OR CHARACTER, EITHER EXPRESS OR IMPLIED, ARE MADE BY
SELLER OR RELIED UPON BY PURCHASER WITH RESPECT TO THE STATUS OF TITLE TO OR THE
MAINTENANCE, REPAIR, CONDITION, DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY
PORTION THEREOF, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF PURCHASER UNDER APPROPRIATE
STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (e) ANY CLAIM BY PURCHASER FOR
DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN, OR UNKNOWN, OR LATENT, WITH RESPECT
TO THE REAL PROPERTY, IMPROVEMENTS OR THE PERSONAL PROPERTY, (f) THE FINANCIAL
CONDITION OR PROSPECTS OF THE PROPERTY OR THE TENANTS AND
16
(g) THE COMPLIANCE OR LACK THEREOF OF THE REAL PROPERTY OR THE IMPROVEMENTS WITH
GOVERNMENTAL REGULATIONS, IT BEING THE EXPRESS INTENTION OF SELLER AND PURCHASER
THAT, EXCEPT AS EXPRESSLY SET FORTH TO THE CONTRARY IN SECTION 8.1 OF THIS
AGREEMENT (AS LIMITED BY SECTION 16.1 OF THIS AGREEMENT), THE PROPERTY WILL BE
CONVEYED AND TRANSFERRED TO PURCHASER IN ITS PRESENT CONDITION AND STATE OF
REPAIR, "AS IS" AND "WHERE IS", WITH ALL FAULTS. Purchaser represents that it is
a knowledgeable, experienced and sophisticated purchaser of real estate, and
that it is relying solely on its own expertise and that of Purchaser's
consultants in purchasing the Property. Purchaser has conducted prior to the
date hereof, or will conduct during the Inspection Period, such inspections,
investigations and other independent examinations of the Property and related
matters as Purchaser deems necessary, including but not limited to the physical
and environmental conditions thereof, and will rely upon same and not upon any
statements of Seller (excluding the limited specific matters represented by
Seller in Section 8.1 hereof as limited by Section 16.1 of this Agreement) or of
any Affiliate, officer, director, employee, agent or attorney of Seller.
Purchaser acknowledges that all information obtained by Purchaser was obtained
from a variety of sources and Seller will not be deemed to have represented or
warranted the completeness, truth or accuracy of any of the Documents or other
such information heretofore or hereafter furnished to Purchaser, except as
expressly provided in this Agreement. Upon Closing, Purchaser will assume the
risk that adverse matters, including, but not limited to, adverse physical and
environmental conditions, may not have been revealed by Purchaser's inspections
and investigations. Purchaser further hereby assumes the risk of changes in
applicable Environmental Laws relating to past, present and future environmental
health conditions on, or resulting from the ownership or operation of, the
Property. Purchaser acknowledges and agrees that upon Closing, Seller will sell
and convey to Purchaser, and Purchaser will accept the Property, "AS IS, WHERE
IS," with all faults. Purchaser further acknowledges and agrees that there are
no oral agreements, warranties or representations, collateral to or affecting
the Property, by Seller, an Affiliate of Seller, any agent of Seller or any
third party. Seller is not liable or bound in any manner by any oral or written
statements, representations or information pertaining to the Property furnished
by any real estate broker, agent, employee, servant or other person, unless the
same are specifically set forth or referred to herein. Purchaser acknowledges
that the Purchase Price reflects the "AS IS, WHERE IS" nature of this sale and
any faults, liabilities, defects or other adverse matters that may be associated
with the Property. Purchaser, with Purchaser's counsel, has fully reviewed the
disclaimers and waivers set forth in this Agreement, and understands the
significance and effect thereof. Purchaser acknowledges and agrees that the
disclaimers and other agreements set forth herein are an integral part of this
Agreement, and that Seller would not have agreed to sell the Property to
Purchaser for the Purchase Price without the disclaimer and other agreements set
forth in this Agreement. The terms and conditions of this Section 5.5 will
expressly survive the Closing and will not merge with the provisions of any
closing documents.
________________________
Purchaser Initials
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SECTION 5.6 PURCHASER'S RELEASE OF SELLER.
(a) SELLER RELEASED FROM LIABILITY. Purchaser, on behalf of
itself and its partners, officers, directors, agents, controlling persons and
Affiliates, hereby releases Seller and Seller's Affiliates from any and all
liability, responsibility, causes of action, claims or demands, whether direct
or indirect, known or unknown, accrued or contingent, arising out of or related
to the condition (including the presence in the soil, air, structures and
surface and subsurface waters, of Hazardous Substances that have been or may in
the future be determined to be toxic, hazardous, undesirable or subject to
regulation and that may need to be specially treated, handled and/or removed
from the Property under current or future federal, state and local laws,
regulations or guidelines), valuation, salability or utility of the Property, or
its suitability for any purpose whatsoever except to the extent that such
responsibility or liability is the result of the material inaccuracy (if any) of
Seller's representation under Section 8.1(j) hereof (as limited by Section 16.1
of this Agreement). Without limiting the foregoing, Purchaser specifically
releases Seller and Seller's Affiliates from any claims Purchaser may have
against Seller and/or Seller's Affiliates now or in the future arising from the
environmental, health or safety condition of the Property or the presence of
Hazardous Substances or contamination on or emanating from the Property. The
foregoing waivers and releases by Purchaser shall survive either (i) the Closing
and shall not be deemed merged into the provisions of any closing documents, or
(ii) any termination of this Agreement.
________________________
Purchaser Initials
(b) PURCHASER'S WAIVER OF OBJECTIONS. Purchaser acknowledges
that it has prior to the date hereof, or will during the Inspection Period,
inspect the Property, observe its physical characteristics and existing
conditions and conduct such investigations and studies on the Property and
adjacent areas as it deems necessary, and subject only to Seller's
responsibility for any breach of the warranty and representation contained in
Section 8.1(j) of this Agreement (as limited by Section 16.1 of this Agreement),
Purchaser hereby waives any and all objections to or complaints (including but
not limited to actions based on federal, state or common law and any private
right of action under CERCLA, RCRA or any other state and federal law to which
the Property is or may be subject) against Seller, its Affiliates, or their
respective officers, directors, partners, members, owners, employees or agents
regarding physical characteristics and existing conditions, including without
limitation structural and geologic conditions, subsurface soil and water
conditions and solid and hazardous waste and Hazardous Substances on, under,
adjacent to or otherwise affecting the Property or related to prior uses of the
Property.
(c) ASSUMPTION OF RISK. Purchaser further hereby assumes the
risk of changes in applicable laws and regulations relating to past, present and
future environmental, safety or health conditions on, or resulting from the
ownership or operation of, the Property, and the risk that adverse physical
characteristics and conditions, including without limitation the presence of
Hazardous Substances or other substances, may not be revealed by its
investigation.
________________________
Purchaser Initials
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(d) SURVIVAL. The provisions of this Section 5.6 shall
survive either (i) the Closing and shall not be deemed merged into the
provisions of any closing documents, or (ii) any termination of this Agreement.
SECTION 5.7 HAZARDOUS MATERIALS. If, subsequent to the execution of
this Agreement, Seller obtains knowledge of, or Purchaser's inspection of the
Property reveals the presence of any Hazardous Materials or the violation or
potential violation of any Environmental Law at, on or under the Property
(collectively, a "DEFECTIVE CONDITION"), which Seller, in its sole judgment,
determines could constitute a potential liability to Seller after the Closing or
should be remedied prior to the sale of the Property, Seller shall have the
right upon written notice to Purchaser on or before the Closing Date either (i)
to extend the Closing Date for the period of time necessary to complete such
remediation at Seller's sole cost and expense, or (ii) to terminate this
Agreement upon written notice to Purchaser, in which event the Xxxxxxx Money
Deposit shall be refunded to Purchaser, and thereafter neither Seller nor
Purchaser will have any further rights or obligations to the other hereunder
except with respect to the Termination Surviving Obligations. Purchaser
understands that Seller may elect in its sole discretion to obtain its own new
or updated environmental assessments at Seller's cost in furtherance of its
rights under this Section 5.7. The terms of this Section 5.7 are solely for the
benefit of Seller. Purchaser shall have no additional right or remedy hereunder
as a result of the exercise by Seller of its rights under this Section 5.7.
ARTICLE VI
TITLE AND SURVEY MATTERS
SECTION 6.1 SURVEY. No later than two (2) Business Days after the
execution and delivery of this Agreement, Seller will deliver to Purchaser's
counsel (if not delivered to Purchaser prior to the date hereof) a copy of that
certain survey of the Real Property, dated January 7, 2003, last revised July
31, 2003, prepared by Frontline Surveying and Mapping, Inc. (the "EXISTING
SURVEY"). Seller shall have no obligation to obtain any modification, update, or
recertification of the Existing Survey.
SECTION 6.2 TITLE COMMITMENT.
(a) Purchaser shall cause the Title Company to furnish to
Purchaser a preliminary title report or title commitment(the "COMMITMENT"), by
the terms of which the Title Company agrees to issue to Purchaser at Closing an
owner's policy of title insurance (the "TITLE POLICY") in the amount of the
Purchase Price on the ALTA Owner Policy of Title Insurance with extended
coverage, Standard Form Rev. 10/17/92 (as amended to date) insuring Purchaser's
fee simple title to the Real Property to be good and indefeasible, subject to
the terms of such policy and the exceptions described therein. Subject to
Section 6.2(b), all matters shown on the Existing Survey and exceptions listed
in the Commitment are conclusively deemed to be acceptable to Purchaser. The
term "PERMITTED EXCEPTIONS" means taxes and assessments for the year of Closing
and for any other year if not yet due and payable as of Closing and all matters
either shown on the Existing Survey or listed in the Commitment. The Title
Policy may be delivered after Closing if at the Closing the Title Company issues
a currently effective, duly executed "marked up" Commitment and irrevocably
commits in writing to issue the Title Policy in the form of the "marked up"
Commitment promptly after the Closing Date.
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(b) Notwithstanding any provision of this Section 6.2 to the
contrary, Seller will be obligated to cure exceptions to title to the Real
Property and Improvements relating to (or, as to (ii), cure or cause deletion
from the Title Policy or affirmative title insurance over) (i) liens and
security interests securing any loan to Seller, and (ii) any other liens or
security interests created by documents executed by Seller to secure monetary
obligations, other than liens for ad valorem taxes and assessments.
ARTICLE VII
INTERIM OPERATING COVENANTS AND ESTOPPELS
SECTION 7.1 INTERIM OPERATING COVENANTS. Seller covenants to
Purchaser that Seller will:
(a) OPERATIONS. From the Effective Date until Closing,
continue to operate, manage and maintain the Improvements in the ordinary course
of Seller's business and substantially in accordance with Seller's present
practice, subject to ordinary wear and tear and further subject to Article IX of
this Agreement.
(b) MAINTAIN INSURANCE. From the Effective Date until
Closing, maintain fire and extended coverage insurance on the Improvements which
is at least equivalent in all material respects to Seller's insurance policies
covering the Improvements as of the Effective Date.
(c) PERSONAL PROPERTY. From the Effective Date until
Closing, not transfer or remove any Personal Property from the Improvements
except for the purpose of repair or replacement thereof. Any items of Personal
Property replaced after the Effective Date will be installed prior to Closing
and will be of substantially similar quality of the item of Personal Property
being replaced.
(d) COMPLY WITH GOVERNMENTAL REGULATIONS. From the Effective
Date until Closing, not knowingly take any action that Seller knows would result
in a failure to comply in all material respects with all Governmental
Regulations applicable to the Property, it being understood and agreed that
prior to Closing, Seller will have the right to contest any such Governmental
Regulations.
(e) LEASES. From the Effective Date until Closing, not enter
into any new lease or any amendments, expansions or renewals of Tenant Leases
without the prior written consent of Purchaser, which consent will not be
unreasonably withheld, delayed or conditioned, and will be deemed given unless
written objection thereto is given within two (2) Business Days after receipt of
the relevant information. Furthermore, nothing herein shall be deemed to require
Purchaser's consent to any expansion or renewal which Landlord is required to
honor pursuant to any Lease.
(f) SERVICE CONTRACTS. From the Effective Date until
Closing, not enter into any service contract other than in the ordinary course
of business, unless such service contract is terminable on thirty (30) days
notice without penalty or unless Purchaser consents thereto in writing, which
approval will not be unreasonably withheld, delayed or conditioned.
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(g) NOTICES. To the extent received by Seller, from the
Effective Date until Closing, promptly deliver to Purchaser copies of written
default notices, notices of lawsuits and notices of violations affecting the
Property.
(h) UBTI AGREEMENTS. Notwithstanding anything contained in
this Agreement to the contrary, if, during the Inspection Period, Purchaser
notifies Seller in writing that any existing agreement affecting the Property
(including, without limitation, any agreement in respect to the parking facility
included in the Improvements) might, if assigned to Purchaser, cause Purchaser
to incur unrelated business taxable income under the Internal Revenue Code of
1986, as amended (a "UBTI AGREEMENT"), then Seller shall cause such UBTI
Agreement to be terminated at or prior to Closing, to the extent that such UBTI
Agreement permits termination by Seller by Closing without the payment of any
penalty or termination fee.
SECTION 7.2 ESTOPPELS.
(a) It will be a condition to Closing that Seller obtain and
deliver to Purchaser, from each of the major tenants listed on EXHIBIT D-1
("MAJOR TENANTS") and other Tenants leasing space which when added to the Major
Tenants aggregates at least 75% of the leased space at the Improvements,
executed estoppel certificates, with no material modifications from the estoppel
certificate form attached hereto as EXHIBIT D-2; provided, however, (i) to the
extent that the form as so completed requires information not required of a
Tenant under the provisions of its Tenant Lease, Seller will exercise good faith
efforts to obtain an estoppel certificate for such Tenant in the form completed
as provided below, or in a form as close thereto as reasonably possible, but in
any event an estoppel certificate executed by a Tenant in the form prescribed by
its Tenant Lease shall satisfy the requirement of this Section 7.2(a), and (ii)
Purchaser will not unreasonably withhold approval of any estoppel certificate as
modified by a Tenant and delivered by Seller to Purchaser, provided that the
information included in such estoppel is not inconsistent with the information
included in the estoppel form completed for such Tenant pursuant to the below
provisions of this Section 7.2(a). Within five (5) Business Days after the
Effective Date, Seller will deliver to Purchaser completed forms of estoppel
certificates, in the form attached hereto as EXHIBIT D-2 and containing the
information contemplated thereby, for all Tenants. Within five (5) Business Days
following Purchaser's receipt thereof, Purchaser will send to Seller notice
either (i)approving such forms as completed by Seller or (ii) setting forth in
detail all changes to such forms which Purchaser believes to be appropriate to
make the completed forms of estoppel certificates accurate and complete. Seller
will make such changes to the extent Seller agrees such changes are appropriate,
except that Seller will not be obligated to make any changes which request more
expansive information than is contemplated by EXHIBIT D-2. Seller will then
circulate the tenant estoppels to the Tenants and exercise good faith efforts to
obtain execution of same by the Tenants. Seller shall deliver each estoppel
certificate executed by a Tenant (whether or not in compliance herewith) to
Purchaser promptly following Seller's receipt thereof. Notwithstanding anything
contained herein to the contrary, in no event shall Seller's failure to obtain
the required number of acceptable estoppel certificates in accordance with the
provisions of this Section 7.2(a) constitute a default by Seller under this
Agreement.
(b) Seller, at its sole option, may elect to satisfy part of
the requirements under Section 7.2(a) by delivering a representation certificate
of Seller in the form attached
21
hereto as EXHIBIT E (a "SELLER Certificate") for up to 10% of the space leased
by non- Major Tenants. If Seller subsequently obtains an estoppel certificate
meeting the requirements of Section 7.2(a) hereof, from a Tenant for which
Seller has delivered a Seller Certificate, the delivered Seller Certificate will
be null and void, and Purchaser will accept such estoppel certificate in its
place.
(c) If, as of the fifth (5th) day prior to the Closing Date,
Seller has not obtained and furnished to Purchaser executed estoppel
certificates (or a combination of executed estoppel certificates and Seller
Certificates permitted under Section 7.2(b) above) sufficient to satisfy the
condition set forth in Section 7.2(a), then Purchaser may (i) waive the
foregoing condition precedent and proceed to Closing; or (ii) terminate this
Agreement, in which event the Xxxxxxx Money Deposit (less the Independent
Consideration, which shall be paid over to Seller) shall be returned to
Purchaser and neither Seller nor Purchaser will have any further obligation
under this Agreement except for the Termination Surviving Obligations.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
SECTION 8.1 SELLER'S REPRESENTATIONS AND WARRANTIES. The following
constitute the sole representations and warranties of Seller. Subject to the
limitations set forth in Article XVI of this Agreement, Seller represents and
warrants to Purchaser the following as of the Effective Date:
(a) STATUS. Seller is a limited liability company duly
organized and validly existing under the laws of the State of Delaware.
(b) AUTHORITY. The execution and delivery of this Agreement
and the performance of Seller's obligations hereunder have been or will be duly
authorized by all necessary action on the part of Seller, and this Agreement
constitutes the legal, valid and binding obligation of Seller, subject to
equitable principles and principles governing creditors' rights generally.
(c) NON-CONTRAVENTION. The execution and delivery of this
Agreement by Seller and the performance by Seller of Seller's obligations under
this Agreement will not violate any judgment, order, injunction, decree,
regulation or ruling of any court or Authority or conflict with, result in a
breach of, or constitute a default under the organizational documents of Seller,
any note or other evidence of indebtedness, any mortgage, deed of trust or
indenture, or any lease or other material agreement or instrument to which
Seller is a party or by which it is bound.
(d) SUITS AND PROCEEDINGS. To Seller's Knowledge as of the
Effective Date, except as listed in EXHIBIT F, there are no legal actions, suits
or similar proceedings pending and served, or threatened against Seller relating
to the Property or Seller's ownership or operation of the Property, which are
not adequately covered by existing insurance or, if adversely determined, would
materially adversely affect the value of the Property, the continued operations
thereof or Seller's ability to perform Seller's obligations under this
Agreement.
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(e) NON-FOREIGN ENTITY. Seller is not a "foreign person" or
"foreign corporation" as those terms are defined in the Internal Revenue Code of
1986, as amended, and the regulations promulgated thereunder.
(f) TENANTS. To Seller's Knowledge as of the Effective Date,
the list of Tenants, as set forth on EXHIBIT G attached hereto, constitutes all
of the Tenants from whom Seller is currently accepting rental payments. To
Seller's Knowledge, there are no written leases or occupancy agreements
affecting the Real Property or Improvements to which Seller is a party and bound
with any parties other than the Tenants listed on EXHIBIT G.
(g) SERVICE CONTRACTS. To Seller's Knowledge as of the
Effective Date, none of the service providers listed on EXHIBIT C is in default
under any Service Contract. To Seller's Knowledge, the Documents made available
to Purchaser pursuant to Section 5.2(a) hereof include copies of all Service
Contracts listed on EXHIBIT C under which Seller is currently paying for
services rendered in connection with the Property.
(h) NO VIOLATIONS. To Seller's Knowledge, Seller has not
received prior to the Effective Date any written notification from an Authority
(i) that the Real Property and Improvements is in violation of any applicable
fire, health, building, use, occupancy or zoning laws or (ii) that any work is
required to be done to the Real Property and Improvements where such work
remains outstanding and, if unaddressed would have a material adverse affect on
the Property or use of the Property as currently operated.
(i) INSURANCE. To Seller's Knowledge, 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 Improvements or any
part or component thereof that would adversely affect the insurability of the
Improvements or cause any increase in the premiums for insurance for the
Improvements.
(j) ENVIRONMENTAL. Except as shown in any environmental
reports covering the Real Property and Improvements which have been made
available to Purchaser pursuant to Section 5.2(a), to Seller's Knowledge, Seller
has not received written notice from any Authorities of the Real Property or
Improvements being in violation of any Environmental Law.
(k) LEASING COMMISSIONS. To Seller's knowledge, all leasing
commissions which are attributable to the execution of Tenant Leases existing as
of the Effective Date or the move-in of tenants occupying the Property as of the
Effective Date have been paid in full; provided, however, no representation is
made with respect to leasing commissions due in connection with amendments,
modifications, extensions, expansions or renewals of the Tenant Leases or with
respect to commissions due in connection with the failure by a tenant to
exercise an early termination option.
(l) MANAGEMENT AGREEMENTS. Any and all property management
contracts and leasing agreements with respect to the Property shall be
terminated by Seller effective as of the Closing, with Seller having fully paid
and discharged any and all obligations accruing thereunder.
23
SECTION 8.2 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
represents and warrants to Seller the following:
(a) STATUS. Purchaser is a limited liability company duly
organized and validly existing under the laws of the State of Delaware.
(b) AUTHORITY. The execution and delivery of this Agreement
and the performance of Purchaser's obligations hereunder have been or will be
duly authorized by all necessary action on the part of Purchaser and its
constituent owners and/or beneficiaries and this Agreement constitutes the
legal, valid and binding obligation of Purchaser, subject to equitable
principles and principles governing creditors' rights generally.
(c) NON-CONTRAVENTION. The execution and delivery of this
Agreement by Purchaser and the consummation by Purchaser of the transactions
contemplated hereby will not violate any judgment, order, injunction, decree,
regulation or ruling of any court or Authority or conflict with, result in a
breach of, or constitute a default under the organizational documents of
Purchaser, any note or other evidence of indebtedness, any mortgage, deed of
trust or indenture, or any lease or other material agreement or instrument to
which Purchaser is a party or by which it is bound.
(d) CONSENTS. No consent, waiver, approval or authorization
is required from any person or entity (that has not already been obtained) in
connection with the execution and delivery of this Agreement by Purchaser or the
performance by Purchaser of the transactions contemplated hereby.
(e) OFAC COMPLIANCE. Purchaser is in compliance with the
requirements of Executive Order No. 133224, 66 Fed. Reg. 49079 (Sept. 25, 2001)
(the "ORDER") and other similar requirements contained in the rules and
regulations of the Office of Foreign Assets Control, Department of the Treasury
("OFAC") and in any enabling legislation or other Executive Orders or
regulations in respect thereof (the Order and such other rules, regulations,
legislation, or orders are collectively called the "ORDERS").
(f) LISTS. Neither Purchaser nor any beneficial owner of
Purchaser:
(i) is listed on the Specially Designated Nationals
and Blocked Persons List maintained by OFAC pursuant to the Order and/or
on any other list of terrorists or terrorist organizations maintained
pursuant to any of the rules and regulations of OFAC or pursuant to any
other applicable Orders (such lists are collectively referred to as the
"LISTS");
(ii) is a Person who has been determined by competent
authority to be subject to the prohibitions contained in the Orders; or
(iii) is owned or controlled by, or acts for or on
behalf of, any Person on the Lists or any other Person who has been
determined by competent authority to be subject to the prohibitions
contained in the Orders.
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ARTICLE IX
CONDEMNATION AND CASUALTY
SECTION 9.1 SIGNIFICANT CASUALTY. If, prior to the Closing Date, all
or a Significant Portion of the Real Property and Improvements is destroyed or
damaged by fire or other casualty, Seller will notify Purchaser of such
casualty. Purchaser will have the option to terminate this Agreement upon notice
to Seller given not later than ten (10) days after receipt of Seller's notice.
If this Agreement is terminated, the Xxxxxxx Money Deposit will be returned to
Purchaser upon Purchaser's compliance with Section 4.5 and thereafter neither
Seller nor Purchaser will have any further rights or obligations to the other
hereunder except with respect to the Termination Surviving Obligations. If
Purchaser does not elect to terminate this Agreement, Seller will not be
obligated to repair such damage or destruction but (a) Seller will assign and
turn over to Purchaser all of the insurance proceeds net of reasonable
collection costs (or, if such have not been awarded, all of its right, title and
interest therein) payable with respect to such fire or other casualty, and (b)
the parties will proceed to Closing pursuant to the terms hereof without
abatement of the Purchase Price, except that Purchaser will receive a credit for
the lesser of (i) any insurance deductible amount, or (ii) the cost of such
repairs (other than repairs which are the responsibility of Tenants under Tenant
Leases) as reasonably estimated by Seller.
SECTION 9.2 CASUALTY OF LESS THAN A SIGNIFICANT PORTION. If less
than a Significant Portion of the Real Property and Improvements is damaged as
aforesaid, Purchaser shall not have the right to terminate this Agreement and
Seller will not be obligated to repair such damage or destruction but (a) Seller
will assign and turn over to Purchaser all of the insurance proceeds net of
reasonable collection costs (or, if such have not been awarded, all of its
right, title and interest therein) payable with respect to such fire or other
casualty, and (b) the parties will proceed to Closing pursuant to the terms
hereof without abatement of the Purchase Price, except that Purchaser will
receive a credit for the lesser of (i) any insurance deductible amount, or (ii)
the cost of such repairs (other than repairs which are the responsibility of
Tenants under Tenant Leases) as reasonably estimated by Seller.
SECTION 9.3 CONDEMNATION OF PROPERTY. In the event of condemnation
or sale in lieu of condemnation of all or any portion of the Real Property and
Improvements prior to the Closing, Purchaser will have the option, by providing
Seller written notice within ten (10) days after receipt of Seller's notice of
such condemnation or sale, of terminating Purchaser's obligations under this
Agreement or electing to have this Agreement remain in full force and effect. In
the event Purchaser does not terminate this Agreement pursuant to the preceding
sentence, Seller will assign to Purchaser any and all claims for the proceeds of
such condemnation or sale to the extent the same are applicable to the Real
Property and Improvements, and Purchaser will take title to the Property with
the assignment of such proceeds and subject to such condemnation and without
reduction of the Purchase Price. Should Purchaser elect to terminate Purchaser's
obligations under this Agreement under the provisions of this Section 9.3, the
Xxxxxxx Money Deposit will be returned to Purchaser upon Purchaser's compliance
with Section 4.5 and neither Seller nor Purchaser will have any further
obligation under this Agreement except for the Termination Surviving
Obligations. Notwithstanding anything to the contrary herein, if any eminent
domain or condemnation proceeding is instituted (or notice of same is given)
solely for the taking of any subsurface rights for utility easements or for any
right-of-way easement, and the surface may, after such taking, be used in
substantially
25
the same manner as though such rights have not been taken, Purchaser will not be
entitled to terminate this Agreement as to any part of the Property, but any
award resulting therefrom will be assigned to Purchaser at Closing and will be
the exclusive property of Purchaser upon Closing.
ARTICLE X
CLOSING
SECTION 10.1 CLOSING. The Closing of the sale of the Property by
Seller to Purchaser will occur on the Closing Date through the escrow
established with the Title Company. At Closing, the events set forth in this
Article X will occur, it being understood that the performance or tender of
performance of all matters set forth in this Article X are mutually concurrent
conditions which may be waived by the party for whose benefit they are intended.
SECTION 10.2 PURCHASER'S CLOSING OBLIGATIONS. At least one (1)
Business Day prior to the Closing Date, Purchaser, at its sole cost and expense,
will deliver the following items in escrow with the Title Company pursuant to
Section 4.3, for delivery to Seller at Closing as provided herein:
(a) The Purchase Price, after all adjustments are made at
the Closing as herein provided, by Federal Reserve wire transfer of immediately
available funds, in accordance with the timing and other requirements of Section
3.3;
(b) A counterpart of the General Conveyance, Xxxx of Sale,
and Assignment and Assumption substantially in the form attached hereto as
EXHIBIT I (the "GENERAL CONVEYANCE") duly executed by Purchaser;
(c) Evidence reasonably satisfactory to Seller that the
person executing the Closing documents on behalf of Purchaser has full right,
power, and authority to do so;
(d) The Tenant Notice Letters, duly executed by Purchaser;
(e) A counterpart of any required State, County or Municipal
transfer declaration forms; and
(f) Such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transactions which are the subject
of this Agreement.
SECTION 10.3 SELLER'S CLOSING OBLIGATIONS. Seller, at its sole cost
and expense, will deliver (y) the following items (a), (b), (c), (d), (e), (f),
(g), (i), (l) and (m) in escrow with the Title Company pursuant to Section 4.3,
and (z) upon receipt of the Purchase Price, Seller shall deliver the following
items (h), (j) and (k) to Purchaser at the Property:
(a) A limited warranty deed substantially in the form
attached hereto as EXHIBIT J (the "DEED"), duly executed and acknowledged by
Seller conveying to Purchaser the Real Property and the Improvements subject
only to the Permitted Exceptions, which Deed shall be delivered to Purchaser by
the Title Company agreeing to cause same to be recorded in the Official Records;
26
(b) The General Conveyance duly executed by Seller;
(c) The Tenant Notice Letters, duly executed by Seller;
(d) Evidence reasonably satisfactory to Title Company and
Purchaser that the person executing the Closing documents on behalf of Seller
has full right, power and authority to do so;
(e) A certificate in the form attached hereto as EXHIBIT K
("CERTIFICATE AS TO FOREIGN STATUS") certifying that Seller is not a "foreign
person" as defined in Section 1445 of the Internal Revenue Code of 1986, as
amended;
(f) The Tenant Deposits, at Seller's option, either (i) in
the form of a cashier's check issued by a bank reasonably acceptable to
Purchaser, or (ii) as part of an adjustment to the Purchase Price. In the event
the Tenant Deposits are in the form of a letter of credit, then Seller shall
deliver at Closing the original letter(s) of credit, together with documentation
sufficient to cause the letter(s) of credit to be assigned to Purchaser upon
approval thereof by the issuer of the letter(s) of credit;
(g) A certification meeting the requirements of O.C.G.A.
Section 48-7-128 relating to the withholding of income tax in the State of
Georgia.
(h) The Personal Property;
(i) The Rent Roll, updated to show any changes, to Seller's
Knowledge, as of one (1) Business Day prior to the Closing Date (which shall be
deemed a part of the Documents for purposes of this Agreement);
(j) All original Licenses and Permits, Tenant Leases, and
Service Contracts in Seller's possession and control;
(k) All keys to the Improvements which are in Seller's
possession;
(l) A counterpart of any required State, County or Municipal
transfer declaration forms; and
(m) Such other documents as may be reasonably necessary or
appropriate to effect the consummation of the transactions which are the subject
of this Agreement.
SECTION 10.4 PRORATIONS.
(a) Seller and Purchaser agree to adjust, as of 11:59 p.m.
on the day immediately preceding the Closing Date (the "CLOSING TIME"), the
following (collectively, the "PRORATION ITEMS"): real estate and personal
property taxes and assessments which are required to be paid for the calendar
year in which the Closing occurs, utility bills (except as hereinafter
provided), collected Rentals (subject to the terms of (c) below) and operating
expenses payable by the owner of the Property. Seller will be charged and
credited for the amounts of all of the Proration Items relating to the period up
to and including the Closing Time, and Purchaser will
27
be charged and credited for all of the Proration Items relating to the period
after the Closing Time. Such preliminary estimated Closing prorations shall be
set forth on a preliminary closing statement to be prepared by Seller and
submitted to Purchaser for Purchaser's approval (which approval shall not be
unreasonably withheld, delayed or conditioned) five (5) days prior to the
Closing Date (the "CLOSING STATEMENT"). The Closing Statement, once agreed upon,
shall be signed by Purchaser and Seller and delivered to the Title Company for
purposes of making the preliminary proration adjustment at Closing subject to
the final cash settlement provided for below. The preliminary proration shall be
paid at Closing by Purchaser to Seller (if the preliminary prorations result in
a net credit to Seller) or by Seller to Purchaser (if the preliminary prorations
result in a net credit to Purchaser) by increasing or reducing the cash to be
delivered by Purchaser in payment of the Purchase Price at the Closing. If the
actual amounts of the Proration Items are not known as of the Closing Time, the
prorations will be made at Closing on the basis of the best evidence then
available; thereafter, when actual figures are received, re-prorations will be
made on the basis of the actual figures, and a final cash settlement will be
made between Seller and Purchaser. No prorations will be made in relation to
insurance premiums (except to the extent covered by the proration of Operating
Expense Recoveries), and Seller's insurance policies will not be assigned to
Purchaser. Final readings and final xxxxxxxx for utilities will be made if
possible as of the Closing Time, in which event no proration will be made at the
Closing with respect to utility bills (except to the extent covered by the
proration of Operating Expense Recoveries). Seller will be entitled to all
deposits presently in effect with the utility providers, and Purchaser will be
obligated to make its own arrangements for deposits with the utility providers.
A final reconciliation of Proration Items shall be made by Purchaser and Seller
within six (6) months of Closing, except to the extent that sufficient property
tax or other information is not available at such time to make a final
adjustment of Proration Items, in which event such adjustments will be made as
soon as reasonably practicable after such information is made available. The
provisions of this Section 10.4 (excluding subsection (e) which is governed by
Section 3.2(a) above) will survive the Closing for twelve (12) months.
(b) Purchaser will receive a credit on the Closing Statement
for the prorated amount (as of the Closing Time) of all Rentals previously paid
to and collected by Seller and attributable to any period following the Closing
Time. After the Closing, Seller will cause to be paid or turned over to
Purchaser all Rentals, if any, received by Seller after Closing and properly
attributable to any period following the Closing Time. "RENTALS" as used herein
includes fixed monthly rentals, additional rentals, percentage rentals,
escalation rentals (which include each Tenant's proportionate share of building
operation and maintenance costs and expenses as provided for under the
applicable Tenant Lease, to the extent the same exceeds any expense stop
specified in such Tenant Lease), retroactive rentals, all administrative
charges, utility charges, tenant or real property association dues, storage
rentals, special event proceeds, temporary rents, telephone receipts, locker
rentals, vending machine receipts and other sums and charges payable to Seller
or its successor by tenants under the Tenant Leases or from other occupants or
users of the Property, excluding specific tenant xxxxxxxx which are governed by
Section 10.4(d) below. Rentals are "DELINQUENT" if they were due prior to the
Closing Time and payment thereof has not been made on or before the Closing
Time. Delinquent Rentals will not be prorated. Purchaser agrees to use good
faith collection procedures with respect to the collection of any Delinquent
Rentals, but Purchaser will have no liability for the failure to collect any
such amounts and will not be required to conduct lock-outs or take any other
legal action to enforce collection of any such amounts owed to Seller by Tenants
of the Property. All sums collected by
28
Purchaser from and after Closing from each Tenant (excluding Tenant payments for
Operating Expense Recoveries attributable to the period prior to the Closing
Time governed by Section 10.4(c) below and tenant specific xxxxxxxx for tenant
work orders and other specific services as described in and governed by Section
10.4(d) below) will be applied first to current amounts owed by such Tenant to
Purchaser and then to prior delinquencies owed by such Tenant to Seller. Any
sums collected by Purchaser and due Seller will be promptly remitted to Seller.
Notwithstanding the foregoing, however, after the Closing Date Seller may
collect Delinquent Rentals, amounts owed for Operating Expense Recoveries and
xxxxxxxx for tenant work orders directly from Tenants, provided, however, in no
event will Seller have the right to threaten termination of any Tenant Lease.
(c) Seller will prepare a reconciliation as of the Closing
Time of the amounts of all xxxxxxxx and charges for operating expenses and taxes
in excess of the applicable expense stop, if any, specified in each Tenant Lease
(collectively, "OPERATING EXPENSE RECOVERIES") for calendar year 2004. If less
amounts have been collected from Tenants for Operating Expense Recoveries for
calendar year 2004 than would have been owed by Tenants under the Tenant Leases
if the reconciliations under such Tenant Leases were completed as of the Closing
Time based on the operating expenses and taxes incurred by Seller for calendar
year 2004 up to the Closing Time (as prorated pursuant to Section 10.4(a)
above), Purchaser will pay such difference to Seller at Closing as an addition
to the Purchase Price. If more amounts have been collected from Tenants for
Operating Expense Recoveries for calendar year 2004 than would have been owed by
Tenants under the Tenant Leases if the reconciliations under such Tenant Leases
were completed as of the Closing Time based on the operating expenses and taxes
incurred by Seller for calendar year 2004 up to the Closing Time (as prorated
pursuant to Section 10.4(a) above), Seller will pay to Purchaser at Closing as a
credit against the Purchase Price such excess collected amount. Purchaser and
Seller agree that such proration of Operating Expense Recoveries at Closing for
calendar year 2004 will fully relieve Seller from any responsibility to Tenants
or Purchaser for such matters subject to Seller's and Purchaser's right and
obligation to finalize prorations within one hundred twenty (120) days after
Closing solely to make adjustments necessary to the extent estimates used in the
calculation of such reconciliation at Closing differ from actual bills received
after Closing for those items covered by such reconciliation at Closing or to
correct any errors. In this regard, Purchaser will be solely responsible, from
and after Closing, for (i) collecting from Tenants the amount of any outstanding
Operating Expense Recoveries for calendar year 2004 for periods before and after
Closing, and (ii) where appropriate, reimbursing Tenants for amounts
attributable to Operating Expense Recoveries for calendar year 2004, as may be
necessary based on annual reconciliations for Operating Expense Recoveries for
such calendar year.
(d) With respect to specific tenant xxxxxxxx for work
orders, special items performed or provided at the request of a given Tenant or
other specific services, which are collected by Purchaser or Seller after the
Closing Time but relate to any such specific services rendered by Seller or its
property manager prior to the Closing Time and which are identified on the
Tenant's payment as relating to such specific services or which are clearly
identifiable as being payment for any such specific services, Purchaser shall
cause such collected amounts to be paid to Seller, or Seller may retain such
payment if such payment is received by Seller after the Closing Time.
29
(e) Notwithstanding any provision of this Section 10.4 to
the contrary, Purchaser will be solely responsible for all leasing commissions,
brokerage commissions, tenant improvement allowances, legal fees and other
expenditures incurred in connection with the lease of space in the Property
("LEASING COSTS") to the extent unpaid as of the Closing Date and becoming due
and payable after Closing under or with respect to Tenant Leases entered into
prior to the Effective Date, including, without limitation, Leasing Costs
pertaining to amendments, modifications, expansions, extensions, renewals of, or
failure to exercise termination options under, Tenant Leases becoming effective
after the Effective Date. Subject to any approval rights which Purchaser may
have pursuant to Section 7.1(e) of this Agreement, Purchaser further agrees to
be solely responsible for all Leasing Costs (for purposes of this Section
10.4(e), "NEW TENANT COSTS") incurred or to be incurred in connection with any
new Tenant Lease executed on or after the Effective Date, and Purchaser will pay
to Seller at Closing as an addition to the Purchase Price an amount equal to any
New Tenant Costs paid by Seller prior to Closing.
SECTION 10.5 DELIVERY OF REAL PROPERTY. Upon completion of the
Closing, Seller will deliver to Purchaser possession of the Real Property and
Improvements, subject to the Tenant Leases and the Permitted Exceptions.
SECTION 10.6 COSTS OF TITLE COMPANY AND CLOSING COSTS. Costs of the
Title Company and other Closing costs incurred in connection with the Closing
will be allocated as follows:
(a) Purchaser will pay (i) all premium and other costs for
the Title Policy and any endorsements thereto, (ii) all premiums and other costs
for any mortgagee policy of title insurance, including but not limited to any
endorsements or deletions, (iii) the costs associated with any modifications,
updates, or recertifications of the Existing Survey, (iv) Purchaser's attorney's
fees; (v) 1/2 of all of the Title Company's escrow and closing fees, if any,
(vi) any intangibles tax imposed as result of Purchaser's financing, (vii) any
prepayment premium and associated fees actually required by The Travelers
Insurance Company to be paid at Closing as a result of the repayment of the
Traveler's Loan (collectively, the "PREPAYMENT PREMIUM"), and (viii) all
recording fees other than that of the Deed;
(b) Seller will pay (i) transfer tax resulting from the
conveyance of the Property, (ii) 1/2 of all of the Title Company's escrow and
closing fees, (iii) Seller's attorneys' fees and (iv) all recording fees imposed
on the Deed;
(c) Any other costs and expenses of Closing not provided for
in this Section 10.6 shall be allocated between Purchaser and Seller in
accordance with the custom in the county in which the Real Property is located;
and
(d) If the Closing does not occur on or before the Closing
Date for any reason whatsoever, the costs incurred through the date of
termination will be borne by the party incurring same.
SECTION 10.7 POST-CLOSING DELIVERY OF TENANT NOTICE LETTERS.
Immediately following Closing, Purchaser will deliver to each Tenant (via
messenger or certified mail, return receipt requested) a written notice executed
by Purchaser and Seller (i) acknowledging the sale of the
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Property to Purchaser, (ii) acknowledging that Purchaser has received and is
responsible for the Tenant Deposits (specifying the exact amount of the Tenant
Deposits) and (iii) indicating that rent should thereafter be paid to Purchaser
and giving instructions therefor (the "TENANT NOTICE LETTERS"). Purchaser shall
provide to Seller a copy of each Tenant Notice Letter promptly after delivery of
same, and proof of delivery of same promptly after such proof is available. This
Section 10.7 shall survive Closing.
ARTICLE XI
BROKERAGE
SECTION 11.1 BROKERS. Seller agrees to pay to CB Xxxxxxx Xxxxx, a
Georgia licensed real estate broker ("BROKER"), a real estate commission at
Closing (but only in the event of Closing in strict compliance with this
Agreement) pursuant to a separate agreement. The payment of the commission by
Seller to Broker will fully satisfy the obligations of the Seller for the
payment of a real estate commission hereunder. Other than as stated in the first
sentence of this Section 11.1, Purchaser and Seller represent to the other that
no real estate brokers, agents or finders' fees or commissions are due or will
be due or arise in conjunction with the execution of this Agreement or
consummation of this transaction by reason of the acts of such party, and
Purchaser and Seller will indemnify, defend and hold the other party harmless
from any brokerage or finder's fee or commission claimed by any person asserting
his entitlement thereto at the alleged instigation of the indemnifying party for
or on account of this Agreement or the transactions contemplated hereby. The
provisions of this Article XI will survive any Closing or termination of this
Agreement.
SECTION 11.2 BROKER'S LIEN WAIVER. At least one (1) Business Day
prior to the Closing Date, Broker shall deliver to the Title Company a broker's
lien waiver which includes, without limitation, (a) an acknowledgment by Broker
of the receipt of the entire balance due to Broker for all services rendered by
Broker relating to the Land, (b) a waiver by Broker of any claim or lien which
Broker may have against Purchaser, Seller, or the Land by reason of the
transaction contemplated by this Agreement, and (c) an indemnity by Broker of
Seller and Purchaser from and against any such claim or lien which may be
asserted by any agent, broker or other intermediary by reason of any act or
agreement of Broker.
ARTICLE XII
CONFIDENTIALITY
SECTION 12.1 CONFIDENTIALITY. Subject to the provisions of Section
17.16, Seller and Purchaser each expressly acknowledges and agrees that, unless
and until the Closing occurs, the transactions contemplated by this Agreement
and the terms, conditions, and negotiations concerning the same will be held in
the strictest confidence by each of them and will not be disclosed by either of
them except to their respective legal counsel, accountants, consultants,
officers, investors, clients, partners, directors, shareholders and lenders, and
except and only to the extent that such disclosure may be necessary for their
respective performances hereunder or as otherwise required by applicable law.
Purchaser further acknowledges and agrees that, except as provided in this
Section 12.1, in Section 5.2(b) and in Section 17.16, until the Closing occurs,
all information obtained by Purchaser in connection with the Property will not
be disclosed by Purchaser to any third persons without the prior written consent
of Seller. Nothing contained in
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this Article XII will preclude or limit either party to this Agreement from
disclosing or accessing any information otherwise deemed confidential under this
Article XII that is (a) rightfully of public record or within the public domain,
or (b) in connection with that party's enforcement of its rights following a
disagreement hereunder, or in response to lawful process or subpoena or other
valid or enforceable order of a court of competent jurisdiction or any filings
with governmental authorities required by reason of the transactions provided
for herein pursuant to an opinion of counsel. To the extent of any conflict
between the terms of this Agreement and the terms of the Confidentiality
Agreement, the terms of this Agreement shall govern. The provisions of this
Article XII will survive any termination of this Agreement.
ARTICLE XIII
REMEDIES
SECTION 13.1 DEFAULT BY SELLER. In the event the Closing of the
purchase and sale transaction provided for herein does not occur as herein
provided by reason of any default of Seller, Purchaser may, as Purchaser's sole
and exclusive remedy, elect by notice to Seller within thirty (30) Business Days
following the scheduled Closing Date, either of the following: (a) terminate
this Agreement, in which event Purchaser will receive from the Title Company the
Xxxxxxx Money Deposit (and the Independent Consideration shall be paid to
Seller) whereupon Seller and Purchaser will have no further rights or
obligations under this Agreement, except with respect to the Termination
Surviving Obligations; or (b) seek to enforce specific performance of the
Agreement, and in either event, Purchaser hereby waives all other remedies,
including without limitation, any claim against Seller for damages of any type
or kind including, without limitation, consequential or punitive damages.
Failure of Purchaser to make the foregoing election within the foregoing thirty
(30) Business Day period shall be deemed an election by Purchaser to terminate
this Agreement and receive from the Title Company the Xxxxxxx Money Deposit,
whereupon Seller and Purchaser will have no further rights or obligations under
this Agreement, except with respect to the Termination Surviving Obligations.
Notwithstanding the foregoing, nothing contained in this Section 13.1 will limit
Purchaser's remedies at law, in equity or as herein provided in the event of a
breach by Seller of any of the Closing Surviving Obligations after Closing or
the Termination Surviving Obligations after termination.
SECTION 13.2 DEFAULT BY PURCHASER. IN THE EVENT THE CLOSING AND THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREIN DO NOT OCCUR AS PROVIDED
HEREIN BY REASON OF ANY DEFAULT OF PURCHASER, PURCHASER AND SELLER AGREE IT
WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE DAMAGES WHICH SELLER MAY
SUFFER. PURCHASER AND SELLER HEREBY AGREE THAT (i) AN AMOUNT EQUAL TO THE
XXXXXXX MONEY DEPOSIT, TOGETHER WITH ALL INTEREST ACCRUED THEREON, IS A
REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT SELLER WOULD SUFFER IN THE EVENT
PURCHASER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY, AND (ii)
SUCH AMOUNT WILL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR PURCHASER'S
DEFAULT AND FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY, AND WILL BE
SELLER'S SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY) FOR ANY DEFAULT
OF PURCHASER RESULTING IN THE FAILURE OF CONSUMMATION OF THE CLOSING, WHEREUPON
THIS AGREEMENT WILL TERMINATE AND SELLER AND
32
PURCHASER WILL HAVE NO FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EXCEPT WITH
RESPECT TO THE TERMINATION SURVIVING OBLIGATIONS. NOTWITHSTANDING THE FOREGOING,
NOTHING CONTAINED IN THIS SECTION 13.2 HEREIN WILL LIMIT SELLER'S REMEDIES AT
LAW, IN EQUITY OR AS HEREIN PROVIDED IN THE EVENT OF A BREACH BY PURCHASER OF
ANY OF THE CLOSING SURVIVING OBLIGATIONS OR THE TERMINATION SURVIVING
OBLIGATIONS.
____________________________ ____________________________
Purchaser Initials Seller Initials
SECTION 13.3 CONSEQUENTIAL AND PUNITIVE DAMAGES. EACH OF SELLER AND
PURCHASER WAIVE ANY RIGHT TO XXX THE OTHER FOR ANY CONSEQUENTIAL OR PUNITIVE
DAMAGES FOR MATTERS ARISING UNDER THIS AGREEMENT. THIS SECTION 13.3 SHALL
SURVIVE CLOSING OR TERMINATION OF THIS AGREEMENT.
ARTICLE XIV
NOTICES
SECTION 14.1 NOTICES. All notices or other communications required or
permitted hereunder will be in writing, and will be given by (a) personal
delivery, or (b) professional expedited delivery service with proof of delivery,
or (c) United States mail, postage prepaid, registered or certified mail, return
receipt requested, or (d) facsimile (providing that such facsimile is confirmed
by the sender by expedited delivery service in the manner previously described),
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 will have
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
on a Business Day at the address or in the manner provided herein, or, in the
case of facsimile transmission, upon receipt if on a Business Day and, if not on
a Business Day, on the next Business Day. Unless changed in accordance with the
preceding sentence, the addresses for notices given pursuant to this Agreement
will be as follows:
To Purchaser: Harvard Property Trust, LLC
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxx Xxxxxx
Fax: (000) 000-0000
with copy to: Xxxxxx & Xxxxxxx, L.L.P.
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
To Seller: c/o Hines Interests Limited Partnership
Three First National Plaza
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00 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Mr. C. Xxxxx Xxxxxxxxx
Telecopy No. (000) 000-0000
with copy to: c/o Hines Interests Limited Partnership
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxx Xxxxx
Fax: (000) 000-0000
with copy to: GE Real Estate
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Attn: Asset Manager -- HSOV
Facsimile: (000) 000-0000
with copy to: GE Real Estate
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx XX, Esq.
Facsimile: (000) 000-0000
with copy to: King & Spalding LLP
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: D. Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
ARTICLE XV
ASSIGNMENT AND BINDING EFFECT
SECTION 15.1 ASSIGNMENT; BINDING EFFECT. Purchaser will not have the
right to assign this Agreement without Seller's prior written consent.
Notwithstanding the foregoing, Seller may assign its rights under this Agreement
to an Affiliate and, subject to Section 16.1(d), Purchaser may assign its rights
under this Agreement to a Permitted Purchaser Assignee (as hereinafter defined)
without the consent of the non-assigning party, provided that any such
assignment does not relieve the assigning party of its obligations hereunder.
This Agreement will be binding upon and, subject to Section 16.1(d), inure to
the benefit of Seller and Purchaser and their respective successors and
permitted assigns, and no other party will be conferred any rights by virtue of
this Agreement or be entitled to enforce any of the provisions hereof. Whenever
a reference is made in this Agreement to Seller or Purchaser, such reference
will include the successors and permitted assigns of such party under this
Agreement. For purposes of this Section 15.1, the term "PERMITTED PURCHASER
ASSIGNEE" shall mean: (a) an Affiliate of Purchaser; (b) any fund or entity
sponsored by Purchaser; or (c) any entity that retains Purchaser or a company
affiliated with Purchaser to manage the Property. Each such Permitted Purchaser
Assignee, as part of such assignment and assumption, shall expressly acknowledge
and agree to
34
the terms of this Agreement, including, without limitation, Sections 5.5, 5.6
and 5.7 and this Article XVI. Moreover, upon the assignment of this Agreement to
a Permitted Purchaser Assignee, Purchaser shall deliver to Seller either (i) a
certificate executed by such Permitted Purchaser Assignee making the
representations and warranties set forth in Section 8.2 hereof (with the
representation set forth in Section 8.2(a) modified as appropriate to conform to
the identity of the Permitted Purchaser Assignee); or (ii) a certificate
executed by Purchaser certifying that such Permitted Purchaser Assignee is in
compliance with the representations and warranties set forth in Section 8.2
hereof (with the representation set forth in Section 8.2(a) modified as
appropriate to conform to the identity of the Permitted Purchaser Assignee).
ARTICLE XVI
PROCEDURE FOR INDEMNIFICATION AND LIMITED SURVIVAL OF
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 16.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Notwithstanding anything to the contrary contained in
this Agreement, (1) the representations and warranties of Seller set forth in
Section 8.1 and Seller's liability under Section 8.1, and (2) the covenants in
Section 3.2(b) and Seller's liability under Section 3.2(b), will survive the
Closing for a period of one (1) year. Purchaser will not have any right to bring
any action against Seller as a result of (i) any untruth, inaccuracy or breach
of such representations and warranties under Section 8.1, or (ii) the failure of
Seller to perform its obligations under Section 3.2(b), unless and until the
aggregate amount of all liability and losses arising out of all such untruths,
inaccuracies, breaches and failures exceeds $50,000, and then only to the extent
of such excess. In addition, in no event will Seller's liability for all such
untruths, inaccuracies, breaches, and/or failures under Sections 3.2(b) and 8.1
(including Seller's liability for attorneys' fees and costs in connection with
such untruths, inaccuracies, breaches and/or failures) exceed, in the aggregate,
$1,000,000.
(b) Seller shall have no liability with respect to any of
Seller's representations, warranties and covenants herein if, prior to the
Closing, Purchaser has actual knowledge of any breach of a representation,
warranty or covenant of Seller herein, or Purchaser obtains actual knowledge
(from whatever source, including, without limitation, any tenant estoppel
certificates, as a result of Purchaser's due diligence tests, investigations and
inspections of the Property, or written disclosure by Seller or Seller's agents
and employees) that contradicts any of Seller's representations, warranties or
covenants herein, and Purchaser nevertheless consummates the transaction
contemplated by this Agreement.
(c) The Closing Surviving Obligations will survive Closing
without limitation unless a specified period is otherwise provided in this
Agreement. All other representations, warranties, covenants and agreements made
or undertaken by Seller under this Agreement, unless otherwise specifically
provided herein, will not survive the Closing Date but will be merged into the
Closing documents delivered at the Closing. The Termination Surviving
Obligations shall survive termination of this Agreement without limitation
unless a specified period is otherwise provided in this Agreement.
35
(d) In the case of any assignment or sale of interests in
the Property to TIC Investors (as hereinafter defined): (i) the knowledge of
Purchaser and its Affiliates shall be deemed imputed to the TIC Investors for
purposes of this Agreement, (ii) Behringer Harvard TIC Management Services LP, a
Texas limited partnership and an Affiliate of Purchaser, shall act as sole agent
for notices to be provided to Purchaser and (iii) the TIC Investors shall have
no right to make claims or give notices under this Agreement except by and
through the agent referred to in clause (ii) of the preceding sentence, and then
only in the event such claims or notices are brought on behalf of all of the TIC
Investors and the other owners of the Property. Purchaser hereby agrees to
indemnify, defend and hold Seller and its members, partners, agents, officers,
directors, employees, successors, assigns and Affiliates harmless from and
against any and all liens, claims, causes of action, damages, liabilities,
demands, suits, and obligations, together with all losses, penalties, costs and
expenses relating to any of the foregoing (including but not limited to court
costs and reasonable attorneys' and consultants' fees) brought by any of the TIC
Investors or any other party in connection with the solicitation of the TIC
Investors other than claims arising from Seller's breach of this Agreement or
Seller's breach of an express representation or warranty set forth in this
Agreement or in any of the documents to be delivered at Closing, which in either
event, must be brought by the TIC Investors, if at all, in accordance with the
terms of this Section 16.1(d).
ARTICLE XVII
MISCELLANEOUS
SECTION 17.1 WAIVERS. No waiver of any breach of any covenant or
provisions contained herein will be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision contained
herein. No extension of time for performance of any obligation or act will be
deemed an extension of the time for performance of any other obligation or act.
SECTION 17.2 RECOVERY OF CERTAIN FEES. In the event a party hereto
files any action or suit against another party hereto by reason of any breach of
any of the covenants, agreements or provisions contained in this Agreement, then
in that event the prevailing party will be entitled to have and recover of and
from the other party all attorneys' fees and costs resulting therefrom, subject,
however, in the case of Seller, to the limitations set forth in Section 16.1
above. For purposes of this Agreement, the term "attorneys' fees" or "attorneys'
fees and costs" shall mean all court costs and the fees and expenses of counsel
to the parties hereto, which may include printing, photostatting, duplicating
and other expenses, air freight charges, and fees billed for law clerks,
paralegals and other persons not admitted to the bar but performing services
under the supervision of an attorney, and the costs and fees incurred in
connection with the enforcement or collection of any judgment obtained in any
such proceeding. The provisions of this Section 17.2 shall survive the entry of
any judgment, and shall not merge, or be deemed to have merged, into any
judgment.
SECTION 17.3 TIME OF ESSENCE. Seller and Purchaser hereby acknowledge
and agree that time is strictly of the essence with respect to each and every
term, condition, obligation and provision hereof.
36
SECTION 17.4 CONSTRUCTION. Headings at the beginning of each article
and section are solely for the convenience of the parties and are not a part of
this Agreement. Whenever required by the context of this Agreement, the singular
will include the plural and the masculine will include the feminine and vice
versa. This Agreement will not be construed as if it had been prepared by one of
the parties, but rather as if both parties had prepared the same. All exhibits
and schedules referred to in this Agreement are attached and incorporated by
this reference, and any capitalized term used in any exhibit or schedule which
is not defined in such exhibit or schedule will have the meaning attributable to
such term in the body of this Agreement. In the event the date on which
Purchaser or Seller is required to take any action under the terms of this
Agreement is not a Business Day, the action will be taken on the next succeeding
Business Day.
SECTION 17.5 COUNTERPARTS. To facilitate execution of this Agreement,
this Agreement may be executed in multiple counterparts, each of which, when
assembled to include an original or faxed signature for each party contemplated
to sign this Agreement, will constitute a complete and fully executed agreement.
All such fully executed original or faxed counterparts will collectively
constitute a single agreement.
SECTION 17.6 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of law
or public policy, all of the other conditions and provisions of this Agreement
will nevertheless remain in full force and effect, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
adverse manner to either party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto will negotiate in good faith to modify this Agreement so as to reflect
the original intent of the parties as closely as possible in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
SECTION 17.7 ENTIRE AGREEMENT. This Agreement is the final expression
of, and contains the entire agreement between, the parties with respect to the
subject matter hereof, and supersedes all prior understandings with respect
thereto. This Agreement may not be modified, changed, supplemented or
terminated, nor may any obligations hereunder be waived, except by written
instrument, signed by the party to be charged or by its agent duly authorized in
writing, or as otherwise expressly permitted herein.
SECTION 17.8 GOVERNING LAW. THIS AGREEMENT WILL BE CONSTRUED,
PERFORMED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
SECTION 17.9 NO RECORDING. The parties hereto agree that neither this
Agreement nor any affidavit concerning it will be recorded.
SECTION 17.10 FURTHER ACTIONS. The parties agree to execute such
instructions to the Title Company and such other instruments and to do such
further acts as may be reasonably necessary to carry out the provisions of this
Agreement.
37
SECTION 17.11 NO OTHER INDUCEMENTS. The making, execution and delivery
of this Agreement by the parties hereto has been induced by no representations,
statements, warranties or agreements other than those expressly set forth
herein.
SECTION 17.12 EXHIBITS. EXHIBITS A through K, inclusive, are
incorporated herein by reference.
SECTION 17.13 NO PARTNERSHIP. Notwithstanding anything to the contrary
contained herein, this Agreement shall not be deemed or construed to make the
parties hereto partners or joint venturers, it being the intention of the
parties to merely create the relationship of Seller and Purchaser with respect
to the Property to be conveyed as contemplated hereby.
SECTION 17.14 LIMITATIONS ON BENEFITS. It is the explicit intention of
Purchaser and Seller that no person or entity other than Purchaser and Seller
and their permitted successors and assigns is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the parties
hereto, and the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
Purchaser and Seller or their respective successors and assigns as permitted
hereunder. Nothing contained in this Agreement shall under any circumstances
whatsoever be deemed or construed, or be interpreted, as making any third party
(including, without limitation, Broker or any Tenant) a beneficiary of any term
or provision of this Agreement or any instrument or document delivered pursuant
hereto, and Purchaser and Seller expressly reject any such intent, construction
or interpretation of this Agreement.
SECTION 17.15 EXCULPATION. In no event whatsoever shall recourse be
had or liability asserted against any of Seller's partners, members,
shareholders, employees, agents, directors, officers or other owners of Seller
or their respective constituent partners. Seller's direct and indirect
shareholders, partners, members, beneficiaries and owners and their respective
trustees, officers, directors, employees, agents and security holders, assume no
personal liability for any obligations entered into on behalf of Seller under
this Agreement and the Closing documents.
SECTION 17.16 TIC INVESTORS. Purchaser has advised Seller that, after
the expiration of the Inspection Period, Purchaser may solicit investments in
the Property from investors that will acquire undivided interests in the
Property and become tenants-in-common therein ("TIC INVESTORS"). Notwithstanding
anything contained in this Agreement to the contrary, Seller and Purchaser agree
as follows: (a) after the expiration of the Inspection Period, Purchaser shall
have the right to distribute information about the Property and this Agreement
to brokers who may facilitate the sale of such tenant in common interests and to
potential TIC Investors and their advisors; (b) subject to Section 16.1(d),
Purchaser shall have the right to assign its rights under this Agreement to TIC
Investors that invest in the Property and/or cause Seller to convey the Property
directly to such TIC Investors; and (c) after the expiration of the Inspection
Period, Purchaser may undertake other activities to accommodate the sale of
tenant in common interests and substitute TIC Investors for all or a portion of
the Purchaser's interests hereunder or in the Property. Purchaser acknowledges
and agrees that in so soliciting the TIC Investors, Purchaser is not acting as
Seller's agent and is not authorized to make representations or warranties on
behalf of Seller.
38
IN WITNESS WHEREOF, Seller and Purchaser have respectively executed this
Agreement to be effective as of the date first above written.
PURCHASER:
HARVARD PROPERTY TRUST, LLC,
a Delaware limited liability company
By:
-----------------------------------------
Name:
--------------------------------
Title:
-------------------------------
SELLER:
HSOV ASHFORD PERIMETER, LLC,
a Delaware limited liability company
By: XXXXX SUBURBAN OFFICE VENTURE, L.L.C.
a Delaware limited liability company,
its sole member
By: XXXXX SUBURBAN LIMITED PARTNERSHIP,
a Texas limited partnership,
its Manager
By: XXXXX FUND MANAGEMENT, L.L.C.
a Delaware limited liability company,
its General Partner
By: XXXXX INTERESTS LIMITED PARTNERSHIP
a Delaware limited partnership,
its sole member
By: XXXXX HOLDINGS, INC.,
a Texas corporation,
its General Partner
By: _____________________
Name: _____________________
Title: _____________________
Agreement of
Purchase and Sale
39
JOINDER BY TITLE COMPANY
Partners Title Company, referred to in this Agreement as the "Title
Company," hereby acknowledges that it received this Agreement executed by Seller
and Purchaser on the __________ day of November, 2004 and accepts the
obligations of the Title Company as set forth herein. The Title Company hereby
agrees to hold and distribute the Independent Consideration and Xxxxxxx Money
Deposit and interest thereon, and Closing proceeds in accordance with the terms
and provisions of this Agreement. It further acknowledges that it hereby assumes
all responsibilities for information reporting required under Section 6045(e) of
the Internal Revenue Code.
PARTNERS TITLE COMPANY
By:____________________________________
Printed Name:__________________________
Title:_________________________________
Agreement of
Purchase and Sale
40
JOINDER BY BROKER
The undersigned Broker joins herein to evidence such Broker's agreement
to the provisions of Section 11.1 and to represent to Seller and Purchaser that
such Broker (i) knows of no other brokers, salespersons or other parties
entitled to any compensation for brokerage services arising out of this
transaction other than those whose names appear in this Agreement, (ii) has not
made any of the representations or warranties specifically disclaimed by Seller
in Section 16.1 and (iii) is duly licensed and authorized to do business in the
State of Georgia.
CB XXXXXXX XXXXX, INC.
Date: ________, 2004 By:__________________________________________
Printed Name:________________________________
Title:_______________________________________
Address: 0000 Xxxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
License No.:_________________________
Tax I.D. No.:________________________
Agreement of
Purchase and Sale
41
