Exhibit 10.2
CONTRIBUTION AGREEMENT
among
RECKSON OPERATING PARTNERSHIP, L.P.,
certain of its
SUBSIDIARIES
listed on the signature pages hereof,
RECKSON AUSTRALIA OPERATING COMPANY LLC
and
RECKSON AUSTRALIA LPT CORPORATION
Dated as of August 12, 2005
TABLE OF CONTENTS
Page
Section 1. Properties to be Contributed; Permitted Debt;
Responsible Entity Termination; Trigger Events; Schedules....................................3
1.01. Transfer of Properties.........................................................................3
1.02. Additional Components of Properties; Excluded Property.........................................4
1.03. Review Materials...............................................................................4
1.04. Due Diligence..................................................................................4
1.05. Requests for Estoppels and Consents; Certain Provisions Regarding Debt.........................5
1.06. Termination; Surviving Obligations.............................................................6
1.07. Reallocation of Properties and Contributed Interests Among
Tranches; Exclusion of Properties and Contributed Interests.................................6
1.08. Responsible Entity Termination Trigger Event...................................................7
1.09. Revisions to Schedules.........................................................................7
Section 2. Objections to Title............................................................................7
2.01. (a) Title Commitments; Title Policies; Permitted Exceptions....................................7
Section 3. Contribution Consideration....................................................................11
3.01. Consideration.................................................................................11
3.02. Adjustments to Consideration..................................................................12
3.03. Effect of Permitted Debt Holder Refusal of Assumption Consent.................................13
3.04. Certain Transactions at Closing...............................................................13
3.05. Issuance of Interests In Advance..............................................................13
Section 4. The Closing...................................................................................13
4.01. Tranche 1 Closing.............................................................................13
4.02. Tranche 2 Closing.............................................................................14
4.03. Tranche 3 Closing.............................................................................14
4.04. Closings......................................................................................14
4.05. Effect of a Closing Not Occurring.............................................................14
4.06. Dates; Times; Dollars.........................................................................14
Section 5. Representations and Warranties................................................................15
5.01. Contributor Representations and Warranties....................................................15
5.02. Relevant Contributees Representations and Warranties..........................................19
5.03. REIT Representations and Warranties...........................................................20
TABLE OF CONTENTS
(continued)
Page
5.04. (a) Survival of Contributor Representations and Warranties; Modification Thereof..............21
5.05. (a) Indemnification by Contributor; Cap; Basket...............................................21
Section 6. Acknowledgments of the Company................................................................24
6.01. No Prior Representations or Warranties........................................................24
6.02. As-Is.........................................................................................24
6.03. Environmental Matters.........................................................................25
Section 7. Contributor's Obligations as to the Properties................................................25
7.01. Operation of Properties Prior to Closing......................................................25
7.02. Certain Lease/Service Contract Actions........................................................25
7.03. Certain Prohibited Actions....................................................................26
7.04. Maintenance of Insurance......................................................................26
7.05. Required Tenant Estoppels; Contributor Estoppel...............................................26
7.06. Landlord Estoppels............................................................................27
7.07. Required Consents.............................................................................27
7.08. Termination of Existing Property Management Agreements........................................27
7.09. Compliance With Permitted Debt Loan Documents.................................................27
7.10. Cooperation Regarding Financing...............................................................28
7.11. Assignment of Environmental Insurance Policy..................................................28
Section 8. Destruction, Damage or Condemnation...........................................................28
8.01. (a) Condemnation..............................................................................28
Section 9. Additional Covenants of Contributor...........................................................29
9.01. Access........................................................................................29
Section 10. Conditions Precedent to Closing...............................................................29
10.01. Conditions Precedent to Company Obligations...................................................29
10.02. Conditions Precedent to Contributor Obligations...............................................30
10.03. Effect of Contributor's Failure to Meet Conditions............................................31
Section 11. Contributor's Closing Deliveries..............................................................32
11.01. Contributor Closing Deliveries................................................................32
11.02. Delivery at Appropriate Closing; Modified Deliverables Required By
Third Parties; Modification of Deliveries Regarding Entity Transfers.......................34
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TABLE OF CONTENTS
(continued)
Page
Section 12. The Company's Closing Deliveries..............................................................35
12.01. Company Deliveries............................................................................35
Section 13. Apportionments; Closing Costs.................................................................36
13.01. General Apportionments........................................................................36
13.02. Adjustment of Taxes...........................................................................37
13.03. Credits.......................................................................................37
13.04. Tenant Arrearages.............................................................................38
13.05. Additional Rent...............................................................................39
13.06. Closing Statements............................................................................39
13.07. Subject to the other provisions of this Section 13, the
following shall apply to closing costs:.....................................................39
Section 14. Failure of Contributor or the Company to Perform..............................................40
14.01. Company Default/Breach Prior to Closing.......................................................40
14.02. Contributor Default/Breach Prior to Closing...................................................40
14.03. Termination of Agreement Regarding Aggregation of Title, Survey,
Closing Condition, Condemnation and Casualty Events........................................41
Section 15. Broker........................................................................................41
15.01. Broker Representation and Warranty; Indemnification...........................................41
Section 16. Notices.......................................................................................41
16.01. Method of Notification and Delivery...........................................................41
Section 17. Miscellaneous Provisions......................................................................43
17.01. Assignment or Transfer........................................................................43
17.02. Integration Clause............................................................................43
17.03. Amendments....................................................................................43
17.04. Governing Law.................................................................................43
17.05. Captions......................................................................................43
17.06. Successors and Assigns........................................................................43
17.07. Masculine and Feminine Terms..................................................................43
17.08. Schedules and Riders..........................................................................43
17.09. Counterparts..................................................................................43
17.10. No Recordation................................................................................43
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TABLE OF CONTENTS
(continued)
Page
17.11. No Third Party Beneficiaries..................................................................44
17.12. No Offer......................................................................................44
17.13. Jurisdiction; Service of Process..............................................................44
17.14. Further Assurances; Cooperation Regarding Consents............................................44
Section 18. Certain Tax Matters...........................................................................44
18.01. Like-Kind Exchanges...........................................................................44
Section 19. Entity Transfers..............................................................................45
19.01. Transfer of Entity Interests in Lieu of Asset Sale............................................45
Section 20. Certain Provisions Regarding SPE Entities.....................................................46
20.01. SPE Entities..................................................................................46
Exhibits
--------
Exhibit A. Subsidiaries
Exhibit B. Properties
Exhibit C. Form of Limited Liability Company Agreement
Exhibit D-1. Form of Property Management and Leasing Agreement
Exhibit D-2. Form of Construction Service Agreements
Exhibit D-3. Form of Services Agreement
Exhibit D-4. Form of AM Agreement
Exhibit E. Form of Tenant Estoppel
Exhibit F. Form of Landlord Estoppel
Exhibit G. Intentionally Omitted
Exhibit H. Intentionally Omitted
Exhibit I. Form of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP Opinion
Exhibit J. Mortgage Loan Application
Exhibit K. Form of License Agreement
Exhibit L. Intentionally Omitted
Exhibit M. Form of Tax Protection Agreement
Exhibit N. Form of Option Agreement
Schedules
---------
Schedule 1.01(a) Tranche 1 Properties
Schedule 1.01(b) Tranche 2 Properties
Schedule 1.01(c) Tranche 3 Properties
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Schedule 1.02 Excluded Personal Property
Schedule 1.05(b)(i) Assumed Existing Debt
Schedule 3.01(a)(i) Tranche 1 Contribution Consideration and Sales Price
Schedule 3.01(b)(i) Tranche 2 Contribution Consideration and Sales Price
Schedule 3.01(c)(i) Tranche 3 Contribution Consideration and Sales Price
Schedule 5.01(e)-1 Rent Rolls
Schedule 5.01(e)-2 Other Tenant Information
Schedule 5.01(f) Leases
Schedule 5.01(g) Ground Leases
Schedule 5.01(h) Brokerage Agreements
Schedule 5.01(i) Material Service Contracts
Schedule 5.01(j) Capital Improvement Projects
Schedule 5.01(k) Environmental Reports and Matters
Schedule 5.01(o) Litigation Schedule
Schedule 5.01(p) Outstanding Agreements with Attorneys or Consultants
Schedule 5.01(q) Permitted Debt Loan Documents
Schedule 5.05(a) Special Indemnification Matters
Schedule 7.05 Loan Properties
Schedule 7.07 Required Consents
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INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
1031 Exchange................................................................................................18.01
225 High Ridge Property.......................................................................................7.11
Additional Rent. ............................................................................................13.05
Advance Rent..............................................................................................13.01(a)
Agents........................................................................................................1.03
Agreement.................................................................................................Preamble
Aggregate Interests Election................................................................................. 3.05
AM Agreement..............................................................................................Recitals
Approved Loan Documentation................................................................................1.05(d)
Assignments of Ground Leases..............................................................................11.01(q)
Assignments of Leases.....................................................................................11.01(r)
Assumed Existing Debt......................................................................................1.05(b)
Assumed Existing Debt Properties...........................................................................1.05(b)
Assumed Existing Debt Holders..............................................................................1.05(b)
Australian Trust..........................................................................................Recitals
Basket.....................................................................................................5.05(a)
Brokerage Agreements.......................................................................................5.01(h)
Business Days.................................................................................................7.01
Cap........................................................................................................5.05(a)
Cash Portion of the Sales Price ...........................................................................3.01(c)
CC Substitution Event......................................................................................8.01(c)
Closing.......................................................................................................4.04
Closing Date..................................................................................................4.04
Code Witholding Section....................................................................................5.01(n)
Company...................................................................................................Preamble
Condition Failure Threshold...............................................................................10.03(a)
Contributed Equity Value...................................................................................3.01(c)
Contributed Entity...........................................................................................19.01
Contributed Interests......................................................................................1.01(c)
Contributor...............................................................................................Preamble
Contributor Closing Conditions...............................................................................10.01
Contributor Estoppel..........................................................................................7.05
Contributor's Knowledge....................................................................................5.04(a)
Cost to Cure ..............................................................................................2.01(d)
CS Agreements.............................................................................................Recitals
Cure Choice Notice.........................................................................................2.01(c)
Debt Releases..............................................................................................1.05(a)
Defect.....................................................................................................2.01(c)
Defect Property............................................................................................2.01(c)
Defects Notice.............................................................................................2.01(c)
Defect Substitution Event..................................................................................2.01(e)
Defect Threshold...........................................................................................2.01(c)
Defect Threshold Deadline..................................................................................2.01(c)
Defect Threshold Termination Right.........................................................................2.01(c)
DYNA Models................................................................................................2.01(f)
Election to Defend.........................................................................................5.05(d)
Entity Transfer..............................................................................................19.01
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Defined Term Section
------------ -------
Environmental Insurance Policy................................................................................7.11
Environmental Reports......................................................................................5.01(k)
Excluded Properties..........................................................................................18.01
Excluded Personal Property ...................................................................................1.02
Excluded Property License Agreements..........................................................................1.02
Existing Debt..............................................................................................1.05(b)
Failed Closing Condition Property.........................................................................10.03(a)
Final Closing Statement......................................................................................13.06
Free Rent Period..........................................................................................13.03(f)
Ground Leases..............................................................................................5.01(g)
Identified Debt............................................................................................1.05(b)
Identified Debt Properties.................................................................................1.05(b)
Interests..................................................................................................3.01(a)
Landlord Estoppel.............................................................................................7.06
Loans......................................................................................................1.05(b)
Loan Properties...............................................................................................7.05
Leases.....................................................................................................5.01(f)
LLC Agreement.............................................................................................Recitals
Losses.....................................................................................................5.05(a)
Major Tenants..............................................................................................5.01(f)
Manager...................................................................................................Recitals
Material Service Contracts.................................................................................5.01(i)
Mortgages..................................................................................................1.05(b)
Mortgage Loan Application..................................................................................1.05(b)
Must Removes...............................................................................................2.01(a)
Notice.......................................................................................................16.01
Option Agreement..........................................................................................11.01(w)
Owner Operating Partnership...............................................................................Preamble
Payoff Debt................................................................................................1.05(b)
Permitted Debt Consents....................................................................................1.05(a)
Permitted Debt.............................................................................................1.05(b)
Permitted Debt Loan Documents............................................................................. 5.01(q)
Permitted Debt Properties..................................................................................1.05(b)
Permitted Debt Holders.....................................................................................1.05(b)
Permitted Exceptions.......................................................................................2.01(a)
Post-Closing Adjustment Period...............................................................................13.06
Portfolio Services Agreements.............................................................................Recitals
Promissory Notes...........................................................................................1.05(b)
Property......................................................................................................1.01
Property Management Agreements............................................................................Recitals
Property Services Agreements..............................................................................Recitals
Properties.................................................................................................1.01(c)
XXXX......................................................................................................Recitals
Real Properties............................................................................................1.01(c)
REIT......................................................................................................Preamble
RE Trigger Event .............................................................................................1.08
Relevant Contributee(s)...................................................................................Recitals
Rent Credit...............................................................................................13.03(f)
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Defined Term Section
------------ -------
Rent Rolls.................................................................................................5.01(e)
Rep Survival Period........................................................................................5.04(a)
Required Consents.............................................................................................7.07
Required Forms............................................................................................11.01(t)
Responsible Entity........................................................................................Recitals
Review Materials..............................................................................................1.03
Searches...................................................................................................2.01(a)
Securities Act.............................................................................................5.01(t)
Service Contracts..........................................................................................5.01(i)
Services Agreement........................................................................................Recitals
Interests..................................................................................................3.01(a)
SPE Entities..............................................................................................Recitals
Special Indemnification Matters ...........................................................................5.05(a)
Subsidiaries..............................................................................................Preamble
Substitute Ground Lessor Estoppel ..............................................................................7.06
Substitute Property........................................................................................2.01(f)
Survey.....................................................................................................2.01(b)
Surveys....................................................................................................2.01(b)
Surviving Obligations.........................................................................................1.06
Synapse Lease.............................................................................................13.03(f)
Tax Protection Agreement..................................................................................Recitals
Tenant Estoppels..............................................................................................7.05
Third Party Claim..........................................................................................5.05(d)
Title Cap..................................................................................................2.01(a)
Title Commitments..........................................................................................2.01(a)
Title Company..............................................................................................2.01(a)
Title Policies.............................................................................................2.01(a)
Total Consideration........................................................................................3.01(c)
Tranche 1 Permitted Debt...................................................................................3.01(a)
Tranche 1 Cash Portion of the Sales Price..................................................................3.01(a)
Tranche 1 Closing.............................................................................................4.01
Tranche 1 Closing Date........................................................................................4.01
Tranche 1 Closing Deadline....................................................................................4.01
Tranche 1 Contributed Equity Value.........................................................................3.01(a)
Tranche 1 Consideration....................................................................................3.01(a)
Tranche 1 Contributed Interests............................................................................1.01(a)
Tranche 1 Non-Cash Portion of Consideration................................................................3.01(a)
Tranche 1 Properties.......................................................................................1.01(a)
Tranche 1 Real Properties .................................................................................1.01(a)
Tranche 2 Permitted Debt...................................................................................3.01(b)
Tranche 2 Cash Portion of the Sales Price..................................................................3.02(b)
Tranche 2 Closing.............................................................................................4.02
Tranche 2 Closing Date........................................................................................4.02
Tranche 2 Contributed Equity Value.........................................................................3.01(b)
Tranche 2 Consideration....................................................................................3.01(b)
Tranche 2 Contributed Interests............................................................................1.01(b)
Tranche 2 Non-Cash Portion of Consideration................................................................3.01(b)
Tranche 2 Properties.......................................................................................1.01(b)
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Tranche 2 Real Properties..................................................................................1.01(b)
Tranche 3 Permitted Debt...................................................................................3.01(c)
Tranche 3 Cash Portion of the Sales Price..................................................................3.01(c)
Tranche 3 Closing.............................................................................................4.03
Tranche 3 Closing Date........................................................................................4.03
Tranche 3 Contributed Equity Value.........................................................................3.01(c)
Tranche 3 Consideration....................................................................................3.01(c)
Tranche 3 Contributed Interests............................................................................1.01(c)
Tranche 3 Non-Cash Portion of Consideration................................................................3.01(c)
Tranche 3 Properties.......................................................................................1.01(c)
Tranche 3 Real Properties..................................................................................1.01(c)
Transactions Agreement ...................................................................................11.01(w)
TSSC Threshold...............................................................................................14.03
Underwriting Agreement.......................................................................................18.01
Underwriting Deadline.........................................................................................4.01
Unidentified Debt..........................................................................................1.05(b)
Unidentified Debt Properties...............................................................................1.05(b)
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CONTRIBUTION AGREEMENT
----------------------
This CONTRIBUTION AGREEMENT (this "Agreement") dated as of August ___,
2005, among RECKSON OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership ("Owner Operating Partnership"), having an address at 000
Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, and the various direct and
indirect wholly owned or controlled subsidiaries of Owner Operating
Partnership set forth on Exhibit A annexed hereto and on the signature pages
hereof (collectively, the "Subsidiaries"; the Subsidiaries and Owner Operating
Partnership, collectively, "Contributor"), RECKSON AUSTRALIA OPERATING COMPANY
LLC, a Delaware limited liability company, having an address at c/o Reckson
Management Group, Inc., 000 Xxxxxxxxxxx Xxxx, Xxxxx 000X, Xxxxxxxx, Xxx Xxxx
00000, Attn: Xxxxxxx Xxxxxxx, Fax: 000-000-0000, Telephone: 000-000-0000 (the
"Company") and RECKSON AUSTRALIA LPT CORPORATION, a Maryland corporation (the
"REIT"), having an address at c/o Reckson Management Group, Inc., 000
Xxxxxxxxxxx Xxxx, Xxxxx 000X, Xxxxxxxx, Xxx Xxxx 00000, Attn: Xxxxxxx Xxxxxxx,
Fax: 000-000-0000, Telephone: 000-000-0000. Defined terms used herein may be
located using the Index of Defined Terms immediately preceding this Preamble.
RECITALS:
---------
A. Owner Operating Partnership directly owns, or indirectly owns through
its wholly owned Subsidiaries, fee simple interests or ground leasehold
interests (as lessee) in the Real Properties (as hereinafter defined) set
forth on Exhibit B annexed hereto.
B. The Company is a subsidiary of the REIT, and was formed for the
purpose of acquiring (directly or indirectly) all right, title and interest of
Contributor in and to the Real Properties; such acquisition may be effectuated
by the acquisition of all of Owner Operating Partnership's right, title and
interest in some or all of the Subsidiaries in lieu of the acquisition of the
assets of such Subsidiaries, as contemplated by Section 19 hereof.
C. At each Closing, inter alia, Contributor shall contribute the
Properties (as hereinafter defined) to the Company and/or to certain designees
of the Company (which designees shall be referred to herein as the "SPE
Entities", and which SPE Entities shall be wholly-owned, and to the extent
required by any applicable lenders in respect of such SPE Entities, special
purpose, subsidiaries of the Company, newly formed prior to each Closing), as
applicable, pursuant to the terms of this Agreement and upon the satisfaction
of the conditions to each such Closing set forth herein.
D. Contributor shall receive Interests (as hereinafter defined) in the
Company and/or cash proceeds pursuant to terms of this Agreement and the LLC
Agreement (as hereinafter defined), as applicable, with respect to the
contribution of the applicable Properties to the Company and/or the SPE
Entities (the Company and/or the SPE Entities, as the context may require,
shall be referred to herein as the "Relevant Contributee")
E. The parties intend for the foregoing to be accomplished in three
closings (such closings are referred to herein as the Tranche 1 Closing, the
Tranche 2 Closing and the Tranche 3 Closing, and each may be referred to
herein as a "Closing", as such terms are more particularly defined
hereinafter), subject to the terms and conditions set forth herein.
F. At the Tranche 1 Closing, Owner Operating Partnership and the REIT
shall enter into that certain Amended and Restated Limited Liability Company
Agreement of the Company annexed hereto as Exhibit C (the "LLC Agreement").
G. At each Closing, (i) Reckson Management Group, Inc., a New York
corporation (which is an Affiliate (as defined in the LLC Agreement) of Owner
Operating Partnership) or certain Affiliates of Reckson Management Group, Inc.
(any of the foregoing, as the context may require, "Manager"), (ii) the
Company, and (iii) each Affiliate of the Company that shall be acquiring a
Property at such Closing, or, to the extent Contributed Interests are acquired
in lieu of any Properties, the Contributed Entity (as hereinafter defined),
shall enter into a Property Management and Leasing Agreement, substantially in
the form annexed hereto as Exhibit D-1, (collectively, the "Property
Management Agreements").
H. At each Closing, (i) Reckson Construction & Development, LLC, a
Delaware limited liability company, or certain Affiliates of Reckson
Construction & Development, LLC, (ii) the Company, and (iii) each Affiliate of
the Company that shall be acquiring a Property at such Closing, or, to the
extent Contributed Interets are acquired in lieu of any Properties, the
Contributed Entity, shall enter into a Construction Services Agreement,
substantially in the form annexed hereto as Exhibit D-2 (collectively, the "CS
Agreements", together with the Property Management Agreements, to be referred
to as the "Property Services Agreements").
I. At the Tranche 1 Closing, Manager and the Company shall enter into
that certain Services Agreement substantially in the form annexed hereto as
Exhibit D-3 (the "Services Agreement").
J. At the Tranche 1 Closing, Reckson Australia Asset Manager LLC, a
Delaware limited liability company, and the REIT shall enter into that certain
Asset Management Agreement substantially in the form annexed hereto as Exhibit
D-4 (the "AM Agreement", and together with the Property Services Agreements
and the Services Agreement, collectively, the "Portfolio Services
Agreements").
K. On or before the Xxxxxxx 0 Xxxxxxx, Xxxxxxx Xxxxxxxxx Management Ltd.,
a corporation organized under the laws of New South Wales, Australia ("XXXX")
will be the responsible entity (the "Responsible Entity") in respect of
Reckson New York Property Trust, an Australian listed property trust (the
"Australian Trust").
L. At the Tranche 1 Closing, Owner Operating Partnership, certain of its
affiliates, the Company and the REIT shall enter into that certain Option
Agreement (as hereinafter defined).
M. At or prior to the Tranche 1 Closing, Reckson Australia Management
Limited and Citigroup Global Markets Australia Pty Ltd and UBS AG, Australia
Branch shall enter into that certain Underwriting Agreement (as hereinafter
defined).
N. In connection with the financing of the acquisition of the Properties
and Contributed Interests, as more particularly described herein, the parties
desire for Contributor to enter into certain Identified Debt (as hereinafter
defined) with UBS Real Estate Investments Inc. and/or other lenders, which
Identified Debt is intended to encumber certain of the Tranche 1 Properties on
or before the Tranche 1 Closing and certain of the Tranche 3 Properties on or
before the Tranche 3 Closing, and the applicable Properties are intended to be
transferred subject to such Identified Debt. Some of the Properties not
encumbered by Identified Debt may be transferred at the applicable Closing
subject to the Assumed Existing Debt (as hereinafter defined) currently
encumbering such Properties (subject to consent of the applicable lender and
other conditions set forth herein), and some of the Properties not encumbered
by Identified Debt or Existing Assumption Debt may be transferred subject to
Unidentified Debt (as hereinafter defined) agreed upon by the parties
subsequent to the date hereof and prior to the applicable Closing.
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O. At the Tranche 1 Closing, Owner Operating Partnership, the Relevant
Contributee, the Company and the REIT shall enter into that certain Tax
Protection Agreement in the form annexed hereto as Exhibit M (the "Tax
Protection Agreement").
NOW THEREFORE, in consideration of the terms and conditions contained in
this Agreement, the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Properties to be Contributed; Permitted Debt; Responsible
Entity Termination; Trigger Events; Schedules
1.01. Transfer of Properties. At each Closing, Contributor shall
contribute either the relevant Properties or the Contributed Interests to the
Relevant Contributee, subject in each case to any Permitted Debt permitted by
this Agreement to encumber such Properties, as described below:
(a) Tranche 1 Properties. At the Tranche 1 Closing, Contributor
shall contribute, assign, transfer and deliver to the Relevant Contributee,
and the Relevant Contributee shall receive from Contributor, upon the terms
and conditions set forth in this Agreement, either or both of (i) fee simple
and/or leasehold interests in and to the Properties set forth on Schedule
1.01(a) annexed hereto (the "Tranche 1 Real Properties"), and all right, title
and interest of Contributor in and to the fixtures, equipment and other
property attached or appurtenant to the Tranche 1 Real Properties or (ii)
Contributed Interests in the Contributed Entities that own such Tranche 1 Real
Properties (the "Tranche 1 Contributed Interests"; the Tranche 1 Real
Properties, together with the Tranche 1 Contributed Interests, the "Tranche 1
Properties", it being acknowledged and agreed that references in this
Agreement to the Tranche 1 Properties shall be deemed references to either or
both of the Tranche 1 Real Properties or the Tranche 1 Contributed Interests,
as the context may require); in exchange for the Tranche 1 Consideration that
is allocated among such Tranche 1 Properties as described in Section 3 of this
Agreement.
(b) Tranche 2 Properties. At the Tranche 2 Closing, Contributor
shall contribute, assign, transfer and deliver to the Relevant Contributee,
and the Relevant Contributee shall receive from Contributor, upon the terms
and conditions set forth in this Agreement, either or both of (i) fee simple
and/or leasehold interests in and to the Properties set forth on Schedule
1.01(b) annexed hereto (the "Tranche 2 Real Properties"), and all right, title
and interest of Contributor in and to the fixtures, equipment and other
property attached or appurtenant to the Tranche 2 Real Properties or (ii)
Contributed Interests in the Contributed Entities that own such Tranche 2 Real
Properties (the "Tranche 2 Contributed Interests"; the Tranche 2 Real
Properties, together with the Tranche 2 Contributed Interests, the "Tranche 2
Properties", it being acknowledged and agreed that references in this
Agreement to the Tranche 2 Properties shall be deemed references to either or
both of the Tranche 2 Real Properties or the Tranche 2 Contributed Interests,
as the context may require); in exchange for the Tranche 2 Consideration that
is allocated among such Tranche 2 Properties as described in Section 3 of this
Agreement.
(c) Tranche 3 Properties. At the Tranche 3 Closing, Contributor
shall contribute, assign, transfer and deliver to the Relevant Contributee,
and the Relevant Contributee shall receive from Contributor, upon the terms
and conditions set forth in this Agreement, either or both of (i) fee simple
and/or leasehold interests in and to the Properties set forth on Schedule
1.01(c) annexed hereto (the "Tranche 3 Real Properties", together with the
Tranche 1 Real Properties and the Tranche 2 Real Properties, the "Real
Properties"), and all right, title and interest of Contributor in and to the
fixtures, equipment and other property attached or appurtenant to the Tranche
3 Real Properties or (ii) Contributed Interests in the Contributed Entities
that own such Tranche 3 Real Properties (the "Tranche 3 Contributed
Interests", and together with the Tranche 1 Contributed Interests and the
Tranche 2 Contributed Interests, the "Contributed Interests"; the Tranche 3
Real Properties, together with the Tranche 3 Contributed
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Interests, the "Tranche 3 Properties", it being acknowledged and agreed that
references in this Agreement to the Tranche 3 Properties shall be deemed
references to either or both of the Tranche 3 Real Properties or the Tranche 3
Contributed Interests, as the context may require; the Real Properties,
together with the Contributed Interests, the "Properties"); in exchange for
the Tranche 3 Consideration that is allocated among such Tranche 3 Properties
as described in Section 3 of this Agreement.
1.02. Additional Components of Properties; Excluded Property. For
purposes of this Agreement, the term "Real Properties" shall also include,
without limitation, all right, title and interest of Contributor in and to any
easements, rights of way, strips, gores, privileges, licenses, appurtenants
and other rights, benefits and interests, appurtenant thereto, including,
without limitation, all right, title and interest of Contributor in and to any
streets or other public ways adjacent to the Real Properties and any water,
sewer, utility district or mineral rights owned by, or leased to, Contributor,
all improvements located on each Real Property and all structures, systems and
utilities utilized by Contributor with respect to such Real Properties
exclusively (but excluding any improvements owned by tenants under any Leases
at the Real Properties, except any improvements owned by Contributor or to
which Contributor has rights under any Ground Lease), all tangible personal
property owned by Contributor and located on the land or used in connection
with each Real Property and all of Contributor's right, title and interest in
and to all Leases, Ground Leases, all security deposits given under all
Leases, the Ground Leases and all Service Contracts and other agreements to
the extent any adjustments are made pursuant to Section 13.01. Notwithstanding
anything to the contrary in this Agreement, the property described on Schedule
1.02 annexed hereto and made a part hereof (the "Excluded Personal Property")
shall not be included in the Properties subject to transfer pursuant to this
Agreement, nor shall the Excluded Personal Property be subject to transfer by
operation of law or otherwise in connection with transfer of Contributed
Interests under this Agreement. The parties acknowledge and agree that, at
each relevant Closing, Contributor and the Relevant Contributee(s) shall enter
into license agreements ("Excluded Property License Agreements") in the form
annexed hereto as Exhibit K and made a part hereof with respect to certain
Excluded Personal Property described on Schedule 1.02.
1.03. Review Materials. Contributor has made available to the Company
true, correct and complete copies of the Title Commitments, the Searches, the
Surveys, the Leases, Ground Leases, the Environmental Reports, the Continuing
Loan Documents, any engineering reports and appraisals ordered by Contributor
for the Company (together with any other materials reasonably requested by the
Company, collectively, the "Review Materials"). The Review Materials and any
other materials, reports, surveys, books and records examined by or on behalf
of the Company pursuant to this Agreement shall: (i) be held in strict
confidence by the Company, (ii) not be used for any purpose other than the
investigation and evaluation of the Properties by the Company and its lenders,
attorneys, financial advisors, investors, accountants, partners, members,
directors, officers, employees, agents, engineers and consultants involved or
likely to be involved in this transaction (collectively, the "Agents"), and
(iii) not to be disclosed, divulged or otherwise furnished to any other person
or entity prior to the Closing except to the Agents, as otherwise contemplated
herein, or as permitted by Contributor, or as required by law, regulation or
court order. If this Agreement is terminated for any reason whatsoever, the
Company shall, at its option, destroy or return to Contributor all of the
Review Materials in the possession of the Company and the Agents. The
provisions of this Section shall survive the termination of this Agreement.
1.04. Due Diligence. The Company acknowledges that, prior to the
execution of this Agreement, it has been permitted to make a complete review,
evaluation and inspection of the Real Properties and has completed all due
diligence deemed desirable by the Company with respect to the Real Properties.
To the extent not already delivered, copies of all other environmental,
appraisals, engineering or any other third party reports prepared by or on
behalf of the Company with respect to the Properties shall be provided
promptly to Contributor and such reports shall be held subject to the second
sentence of Section 1.03. Subject to Section 9.01, the Company shall have no
further right to inspect the Real
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Properties or to conduct any testing in respect thereof unless approved in
writing by Contributor, such approval not to be unreasonably withheld, delayed
or conditioned. The Company acknowledges that it has entered into this
Agreement with the intention of making and relying solely upon its
investigation of the physical, environmental, economic and legal condition of
the Real Properties and that it is not relying upon any representation or
warranty of Contributor or any agent, employee, representative or Affiliate of
Contributor, other than those specifically set forth herein. The Company
further acknowledges that it has not received from Contributor any accounting,
tax, legal, architectural, engineering, environmental property management or
other advice with respect to the transactions contemplated hereby and that,
except as otherwise expressly provided herein, the Company is relying solely
upon the advice of its own accounting, tax, legal, architectural, engineering,
environmental, property management and other advisors.
1.05. Requests for Estoppels and Consents; Certain Provisions Regarding
Debt.
(a) Tenant Estoppels; Landlord Estoppels; Consents; Debt Releases.
Prior to each applicable Closing Date, with respect to the Tranche 1
Properties, the Tranche 2 Properties and the Tranche 3 Properties, Contributor
shall submit (i) written requests for Tenant Estoppels to all tenants of the
applicable Properties, (ii) written requests for Landlord Estoppels to all
ground lessors under the applicable Ground Leases, (iii) written requests for
consents to the appropriate party in accordance with Section 7.07, (iv)
written requests for approval (the "Permitted Debt Consents") of the
assumption of the Permitted Debt (as defined hereinafter) from the Permitted
Debt Holders (as defined hereinafter) and (v) a release or releases (the "Debt
Releases") from the applicable lenders releasing Contributor and its
Affiliates from all liability arising from and after the applicable Closing
under any and all debt documents related to the Permitted Debt. Contributor
shall use commercially reasonable efforts to procure the Debt Releases prior
to the applicable Closing and to include pre-approval of such Debt Releases in
the relevant Permitted Debt Loan Documents (as hereinafter defined).
(b) Certain Provisions Regarding Debt.
(i) General. Schedule 1.05(b)(i) annexed hereto lists (i) the
Real Properties that are encumbered by debt as of the date hereof and the
corresponding debt obligations (such debt, the "Existing Debt"), including the
principal amounts of Existing Debt outstanding as of the date hereof and a
designation of such Existing Debt as the parties intend to be either (x)
satisfied at each applicable Closing (the "Payoff Debt"), or (y) assumed by
the Company, and/or the Relevant Contributee, as indicated on Schedule
1.05(b)(i) (the "Assumed Existing Debt") at each applicable Closing, and, in
connection with the Real Properties subject to Assumed Existing Debt
(collectively, the "Assumed Existing Debt Properties"), a designation of the
lenders (the "Assumed Existing Debt Holders") that are holders of promissory
notes ("Promissory Notes") made in connection with loans ("Loans") secured by
mortgages or deeds of trust ("Mortgages") encumbering the Assumed Existing
Debt Properties, (ii) the Real Properties that the parties intend to be
encumbered (the "Identified Debt Properties") prior to the applicable Closing
with the approximately $248,000,000 of fixed rate debt (the "Identified Debt")
contemplated by that certain Mortgage Loan Application attached hereto as
Exhibit J (the "Mortgage Loan Application"), and (iii) to the extent currently
identifiable by the parties, the approximately $72,000,000 of floating rate
debt and any other debt (the "Unidentified Debt") and corresponding Tranche 1
Real Properties and Tranche 2 Real Properties and other Real Properties (the
"Unidentified Debt Properties") intended to be encumbered by such Unidentified
Debt at or prior to the Tranche 2 Closing and the principal amount(s) thereof.
"Permitted Debt" shall mean the Assumed Existing Debt, Identified Debt and
Unidentified Debt to be assumed at the relevant Closing. "Permitted Debt
Properties" shall mean the Assumed Existing Debt Properties, the Identified
Debt Properties and the Unidentified Debt Properties. "Permitted Debt Holders"
shall mean all holders of Promissory Notes made in connection with Permitted
Debt Loans.
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(c) Negotiation and Approval of Loan Documentation. The Company and
the Relevant Contributees acknowledge and agree that Contributor shall have
the exclusive right (but in consultation with the Company and the other
Relevant Contributees) to negotiate the terms of the Identified Debt (subject
to the terms and conditions set forth in the Mortgage Loan Application) and
the Unidentified Debt, as well as the related loan documentation, with the
applicable lenders. The Contributor may present drafts of term sheets and
related loan documentation to the Company and the other Relevant Contributees
from time to time for review and approval, which approval shall not be
unreasonably withheld, conditioned or delayed, and the Company and the other
Relevant Contributees shall notify Contributor within five (5) Business Days
of approval or disapproval of the relevant matters, provided that failure of
the Company and the other Relevant Contributees to notify Contributor of
disapproval of any such matter within such time period shall be deemed
approval of such matter. Any such matter that is approved or deemed to be
approved shall not be the subject of further review by the Company and the
other Relevant Contributees absent material changes to such matters or
material changes to other portions of the documentation that materially affect
such matters. If any matter is disapproved in accordance with the foregoing,
the parties shall reasonably cooperate in good faith to resolve such dispute,
but failure to resolve such dispute shall not affect the obligations of the
parties under this Agreement. The Company and the other Relevant Contributees
hereby approve the terms of the Mortgage Loan Application. The parties
acknowledge and agree that any Identified Debt or Unidentified Debt negotiated
under this Section 1.05(c) shall include appropriate Debt Releases, if
applicable.
(d) Approval of Debt; Effect Thereof. The parties acknowledge and
agree that, upon written notification by the Relevant Contributees to
Contributor that the Relevant Contributees approve of all of the final terms
and final related loan documentation ("Approved Loan Documentation"), the
definitions of Sections 1.05(b) and 1.05(d) shall be deemed modified, if
necessary, to reflect the effect of such approved Identified and Unidentified
Debt on the Permitted Debt, and each of the parties shall, at the request of
any of the others, execute a reasonable amendment to this Agreement clarifying
the foregoing (including, if necessary, a description of any Existing Debt or
other Permitted Debt to be refinanced in connection with such Identified and
Unidentified Debt). The parties agree that, as may have been approved in
respect of such Permitted Debt in accordance with the foregoing, at
Contributor's option, either (x) at or prior to the applicable Closing,
Contributor shall enter into the Approved Loan Documentation and the Relevant
Contributees shall assume the relevant Identified Debt and Unidentified Debt
at such Closing in accordance with, and subject to, the terms and conditions
of this Agreement, or (y) at the applicable Closing, the Relevant Contributees
shall execute and deliver the Approved Loan Documentation.
1.06. Termination; Surviving Obligations. In the event that any express
provision of this Agreement gives any party the right to terminate this
Agreement, such party shall notify the other parties in writing of such
termination, and upon delivery of such notice this Agreement shall be
terminated and neither Contributor, the Company, nor the REIT shall have any
further liability to the other hereunder, except with respect to the covenants
and indemnities explicitly stated to survive termination of this Agreement,
including, without limitation, those contained in Section 1.03, Section
2.01(e), Section 5.01, Section 6.01, Section 6.03, Section 7.09, Section
13.02, Section 13.04, Section 13.06, Section 14, Section 15 and Section 17,
which shall be referred to herein as the "Surviving Obligations".
1.07. Reallocation of Properties and Contributed Interests Among
Tranches; Exclusion of Properties and Contributed Interests.
(a) Reallocation. The parties acknowledge and agree that Contributor
may, with the consent of the Relevant Contributees, which consent shall not be
unreasonably withheld, delayed or conditioned, reallocate the Properties (and
applicable Contributed Interests) scheduled to be
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contributed at each Closing among Tranche 1 Properties, the Tranche 2
Properties and the Tranche 3 Properties, and the parties agree to revise the
relevant schedules of this Agreement accordingly in order to reflect any
changes to the allocations of the Total Consideration and the Properties (and
applicable Contributed Interests) among such Tranches.
(b) Exclusion. For purposes of clarity, in addition to the
aforementioned right to reallocate the distribution of Properties among
Tranches, Contributor shall have the right to exclude Properties pursuant to
Section 18 of this Agreement in connection with like-kind exchanges of the
Excluded Properties (as hereinafter defined). If Properties are excluded from
this Agreement pursuant to Section 18, then the Cap shall be proportionately
reduced by the value of such Excluded Property relative to the value of the
remaining Properties (but the Basket shall not be reduced or increased as a
result of such exclusion).
1.08. Responsible Entity Termination Trigger Event. Notwithstanding
anything herein to the contrary, in the event that Reckson Australia
Management Ltd. (or any successor to Reckson Australia Management Ltd. that
shall be a controlled Affiliate of Owner Operating Partnership) is terminated
or otherwise removed or retired as the Responsible Entity for any reason (an
"RE Trigger Event"), then Owner Operating Partnership may, at its option and
in its sole discretion, elect to terminate this Agreement in its entirety,
subject to the Surviving Obligations.
1.09. Revisions to Schedules. The parties acknowledge and agree that, as
of the date hereof, certain schedules of this Agreement describing and
allocating the consideration are in a preliminary form or, due to the nature
of such schedules, it is impossible or unduly burdensome to continuously
update such schedules. The parties will use commercially reasonable efforts to
agree upon final forms of each schedule prior to the applicable Closing, using
good faith efforts to conform such schedules to such parties' expectations as
contemplated in the relevant DYNA Models, the PDS and other transaction
documents (it being acknowledged and agreed that, to the extent necessary or
desirable for the exercise of for the proper exercise of any right granted to
the parties hereunder, such schedules will be finalized in a timely manner to
permit the relevant party to exercise such right in an informed manner, and
the relevant time periods for exercise of such rights will be extended on a
day for day basis attributable to any delay attributable to the other party,
as may be necessary).
Section 2. Objections to Title
2.01. (a) Title Commitments; Title Policies; Permitted Exceptions. The
Company acknowledges and agrees that it has received copies of ALTA title
insurance commitments (together with any updates and endorsements thereto, the
"Title Commitments") issued by Commonwealth Land Title Insurance Company
and/or First American Title Insurance Company or such other reputable title
insurance companies designated by Contributor which is licensed to do business
in the states where the Properties are located (collectively, the "Title
Company") in respect of all of the Properties on or prior to the date hereof.
The title insurance policies to be issued at each Closing by Title Company
pursuant to the Title Commitments shall be standard forms of owner's policies
(ALTA Form 1992 or later), in jurisdictions where such forms of policy are
available, in the collective amount of the Tranche 1 Consideration, Tranche 2
Consideration and Tranche 3 Consideration, as applicable, allocated to the
relevant Properties as the Company shall require at each Closing, and shall
contain such endorsements (including non-imputation), affirmative coverages
and reinsurance and/or co-insurance as the Company shall reasonably require
(collectively, the "Title Policies"). Each Title Policy shall insure (in the
policy amount set forth therein) that the Company or applicable Subsidiary
listed in such policy holds fee or leasehold title to such Property, as
applicable, as of the applicable Closing Date, subject only to, with respect
to such Property, (i) the exceptions contained in the applicable Title
Commitment as of the date hereof (except for any "standard" or "general"
exceptions, which shall be removed by satisfactory title
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affidavit from Contributor), (ii) any matters affecting title created before
or after the date hereof by or with the written consent of the Relevant
Contributees, (iii) any other title or survey matters which arise after the
date hereof that either are not objected to in writing by the Company pursuant
to Section 2.01(c) hereof, or, if objected to in writing by the Company
pursuant to Section 2.01(c) hereof, are those (A) which Contributor has
elected in writing not to remove or cure (which shall be a matter within
Contributor's sole discretion, excepting solely as to Must Removes (as defined
below), or has been unable to remove or cure prior to the Closing Date
(excepting Must Removes), and, in each case, subject to which the Company has
elected in writing to accept as Permitted Exceptions, (B) over which the Title
Company is willing to insure or provide affirmative insurance (at no cost or
expense to the Relevant Contributees), or (C) which are the responsibility of
any tenant under the Leases to cure, correct or remove including, without
limitation, Leases executed in accordance with the terms of Section 7, and
(iv) any other matters to which the Relevant Contributees are required to
accept title to the Properties pursuant to the terms of this Agreement,
(clauses (i) through (iv), collectively, the "Permitted Exceptions"), and (v)
with respect to all Properties, otherwise free and clear of all standard or
general exceptions contained in the Title Commitments which the Title Company
is permitted by applicable law to remove upon delivery of the Surveys and
customary title affidavits from Contributor. Contributor shall cause the Title
Policies to be issued to the Relevant Contributees at the applicable Closing.
The Company has ordered, at Company's expense, customary UCC, judgment, lien
and bankruptcy searches against Contributor and the Properties (as applicable)
(together with any updates thereto, collectively, the "Searches").
Notwithstanding anything contained herein to the contrary, the following shall
not be deemed "Permitted Exceptions" (collectively, the "Must Removes"): (X)
other than the liens representing the Permitted Debt, any monetary liens
voluntarily created by Contributor including, without limitation, any
mortgage, lien, pledge, encumbrance or exception to title against such
Property (whether such Property consists of Contributed Interests or Real
Property) created by the voluntary action of Contributor or its Affiliates
against or affecting such Property that can be removed or cured by payment of
a liquidated sum of money and (Y) any judgment, fines penalties or other
involuntary liens affecting such Property if and to the extent that the
aggregate cost of satisfying the claims secured by such liens is less than (i)
Twenty-Five Thousand ($25,000) Dollars per Property and (ii) the aggregate of
Five Hundred Thousand ($500,000) Dollars for all Properties per Tranche (as
applicable, the "Title Cap").
(b) Surveys. The Relevant Contributee(s) acknowledge and agree that
on or prior to the date hereof they have received copies of updated surveys of
each of the Properties in form and substance satisfactory to the Relevant
Contributee(s) (the "Surveys", and each, a "Survey"), certified to the
Company, the Relevant Contributees and the Title Company.
(c) Defects. Subject to Section 2.01(e), with respect to (i) any new
matters raised by the Title Company after the date hereof as an additional
exception in any Title Commitment or (ii) such new matters as may be disclosed
by updates to any Survey or the Searches and, in the case of clauses (i) and
(ii), which (x) have a material adverse effect on the use, utility or value of
the Property or the use, utility or value of the Contributed Interests, and
(y) are not otherwise Permitted Exceptions (each a "Defect"), within five (5)
Business Days after the Company receives written notification thereof, the
Company shall give written notification(s) to Contributor (each such
notification, a "Defects Notice") of any objections the Company may have to
such Defect. Contributor shall elect, by written notice (each such notice, a
"Cure Choice Notice") within seven (7) Business Days after receipt of a
Defects Notice (it being agreed that failure to provide notice of such
election within such period shall be deemed refusal to cure such Defect to the
Relevant Contributees), to either cure or refuse to cure any such Defect with
regard to any Property. If Contributor elects to cure such Defect in
accordance with the foregoing, such Defect shall be deemed a "Must Remove"
under this Agreement. If the Contributor does not elect to cure such Defect in
accordance with the foregoing, the Company shall notify Contributor within
five (5) Business Days (the expiration date of such five (5) Business Day
period, the "Defect Threshold Deadline") after expiration of such seven (7)
day period whether it shall (i) terminate this Agreement in
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its entirety, subject to the Surviving Obligations, provided that the Relevant
Contributees shall not have the right to terminate this Agreement pursuant to
this clause (i) until the Relevant Contributees shall have terminated this
Agreement pursuant to the following clause (ii) with respect to one or more
Properties, the individual or aggregate value of which (based conclusively on
the Total Consideration allocated to such Property or Properties as set forth
on the relevant schedules), is greater than or equal to fifteen percent (15%)
of the Total Consideration as of the date hereof (such threshold, the "Defect
Threshold"), or (ii) terminate this Agreement with respect to the affected
Property (each such affected Property as to which this Agreement is
terminated, a "Defect Property") only (in which event (x) this Agreement
shall, without further action of the parties, be deemed to have been
automatically and ipso facto amended so as to eliminate such Property, (y) the
applicable Tranche 1 Consideration, Tranche 2 Consideration or Tranche 3
Consideration shall be reduced by the portion thereof allocated to such
Property, and the Cap shall be proportionately reduced (but the Basket shall
not be reduced as a result of such elimination), and (z) this Agreement shall
otherwise remain in full force and effect); it being agreed that failure to
provide notice of such election within such response time period shall be
deemed an election to proceed with the transactions contemplated in this
Agreement, subject to the terms and conditions of this Agreement, without
terminating this Agreement with respect to any such affected Property,
provided that the foregoing shall not be construed as a waiver of any
subsequent termination rights that may be available to the Relevant
Contributees under this Section 2.01(c). If the Defect Threshold is reached,
then Contributor shall have the right ("Defect Threshold Termination Right")
to terminate this Agreement in its entirety by written notice to the Relevant
Contributees on or before the Defect Threshold Deadline; failure to exercise
the Defect Threshold Termination Right in accordance with the foregoing shall
be deemed an election by Contributor to proceed with the transactions
contemplated in this Agreement, subject to reinstatement of the Defect
Threshold Termination Right at such time as further Defects aggregating,
together with previously discovered Defects, in excess of the Defect Threshold
may be revealed in accordance with the foregoing. Each Defect Property not
replaced with a Substitute Property shall become an "Option Property" under
the Option Agreement, and shall be subject to the terms and conditions of the
Option Agreement.
(d) Cure of Defects. Contributor shall have the right, but not the
obligation, to cure any such Defect within fifteen (15) Business Days after
its receipt of the Defect Notice, or in the case of any Defect which cannot
with due diligence be cured within such fifteen (15) Business Day period, such
later date by which such Defect can reasonably be cured, provided that
Contributor commences to cure such Defect within such fifteen (15) Business
Day period and thereafter continues diligently and in good faith to cure the
Defect, provided, further, that Contributor's right to cure any Defect in
accordance with the foregoing provisions is subject to compliance with the
provisions of Section 2.01(c) of this Agreement applicable to Cure Choice
Notices. In the event that Contributor elects not to cure any such Defect or
is unable to effect such cure prior to the applicable Closing, the Company
shall have the remedies provided in Section 2.01(c), this Section 2.01(d) and
Section 14 hereof. Notwithstanding anything to the contrary contained in this
Agreement, Contributor shall have no obligation to cure any Permitted
Exceptions and Defects (other than the Must Removes) and shall only have the
obligation to cure the Must Removes. If Contributor fails to cure any Defects
other than the Must Removes, or if by the expiration of the cure period
provided for above, Contributor has failed to cure all Defects (other than the
Must Removes), the Company shall nonetheless be obligated to proceed to close
subject to any such Defects. In such event, at the Company's sole election,
(a) the Company shall deduct from the applicable Tranche 1 Consideration,
Tranche 2 Consideration or Tranche 3 Consideration with respect to such
Property the cost to cure ("Cost to Cure") such Defect as mutually agreed to
by the Company and Contributor in their commercially reasonable discretion (it
being acknowledged and agreed that, in the event that the Total Consideration
allocated to such Property consists of both Contributed Equity Value and Cash
Portion of Sales Price, such deduction shall be allocated to the Cash Portion
of Sales Price with respect to such Property, provided, however, that if the
Cost to Cure exceeds the Cash Portion of Sales Price in respect of such
Property, the Relevant Contributees may allocate such deduction
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to the Cash Portion of Sales Price applicable to any other Properties), or (b)
Contributor shall place into escrow with the Title Company, pursuant to an
escrow agreement in a form mutually agreed to by the parties, the cost to cure
such Defect as mutually agreed to by the Company and Contributor in their
commercially reasonable discretion; provided, however, that in no event shall
the amount of such deduction or such escrow, together with all amounts paid by
Contributor to cure Defects (other than the Must Removes) exceed (i) the
portion of the Total Consideration allocated to such Property, with respect to
any individual Property, or (ii) the Title Cap, in the aggregate. In no event
shall an amount so deducted or escrowed reduce the amount available under the
Title Cap; provided, however, that in the event that the subject Defect
constitutes a Breach of the representations and warranties contained in
Section 5.01(i) or Section 5.01(o), the Company shall not be entitled to
indemnification with respect thereto pursuant to Section 5.05(a), to the
extent of amounts in escrow or paid in accordance with this Section 2.01(d).
Contributor shall satisfy any Must Removes of record or, as an alternative to
causing such Must Removes to be satisfied of record and provided that the
Title Company agrees to omit such Must Remove(s) from the Title Policies: (i)
bond or cause to be bonded such Must Remove(s), (ii) deliver or cause to be
delivered to the Title Company, on the date of the Closing, instruments in
recordable form and sufficient to satisfy such Must Remove(s) of record,
together with the appropriate recording or filing costs, or (iii) deposit or
cause to be deposited with the Title Company sufficient monies, acceptable to
and reasonably requested by the Title Company, to assure the obtaining and
recording of a satisfaction of the Must Remove(s). With respect to (a) any
condition or state of facts that is set forth on any Title Commitment, Survey
or Search as of date hereof or (b) any Defect (other than the Must Removes)
for which the Company fails to deliver a Defect Notice thereof in accordance
with this Agreement, such Defect or Defect, as the case may be, shall be
deemed approved by the Company and shall constitute a Permitted Exception
hereunder, and the Company shall be obligated to close without further
deduction from the applicable Total Consideration with respect to any such
items. In the event that any of the foregoing time periods applicable to the
Relevant Contributees responses to various notices would otherwise extend
beyond the applicable Closing Date, the Closing Date shall, at the request of
the Relevant Contributees, be extended on a day for day basis in respect of
such time period.
(e) Substitute Properties In Connection With Title Defects.
Notwithstanding anything to the contrary contained herein, in the event that
any Defect that Contributor intended or is otherwise obligated to cure
hereunder has not been cured as of the applicable Closing Date with respect to
the applicable Property in accordance with Section 2.01(c) or Section 2.01(d),
such event shall constitute a "Defect Substitution Event" for the purposes of
this Agreement.
(f) Substitution Procedures. If any of (x) a Defect Substitution
Event, (y) a CC Substitution Event (as hereinafter defined) or (z) a Closing
Condition Substitution Event (as hereinafter defined) occurs from time to
time, Contributor may in its sole and absolute discretion elect (with respect
to a Defect Substitution Event or a Closing Condition Substitution Event, at
any time at or prior to the applicable Closing; with respect to a CC
Substitution Event, within ten (10) Business Days of delivering notice of such
CC Substitution Event) to retain its interests in such affected Property or
Properties (individually or collectively, as the context may require, the
"Affected Property") (for purposes of clarity, notwithstanding anything to the
contrary, one Substitute Property may replace more than one Affected Property
if the value of the Substitute Property is greater than or equal to such
replaced Properties) and, in lieu of transferring such interests to the
Company at the applicable Closing, as may be otherwise required by this
Agreement, Contributor shall deliver to the Company fee simple title (or
Contributed Interests, as applicable) with respect to a Substitute Property,
pursuant to the same terms of this Agreement applicable to any other Property,
provided that in the event that title to the Substitute Property is delivered
to the Relevant Contributee in accordance with the foregoing, the Company
shall obtain the prior approval of any lender of the Company to release any
mortgage or other lien held by such lender on the Substitute Property in
exchange for a lien on the Property originally required to be delivered at the
applicable Closing Date once such Defect is cured. If the applicable lender
does not agree to
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release such mortgage or other lien, such mortgage or lien shall, at the sole
cost and expense of Contributor, be prepaid in respect of such Substitute
Property. For purposes of this Agreement, "Substitute Property" shall mean a
property in the New York tri-state area (v) with a value, mutually agreed upon
by Contributor and the Relevant Contributees, that is equal to or greater than
that of the Affected Property affected or subject to the applicable Defect
Substitution Event, CC Substitution Event or Closing Condition Event, (w)
generally consistent with the Properties, (x) having income equal or greater
to the amount set forth in the DYNA Model with respect to such Affected
Property, (y) having leases that otherwise comply with the applicable DYNA
Model, and (z) otherwise acceptable to any lender (including Permitted Debt
Holders) of the Company providing financing with respect to such Affected
Property. Contributor shall bear the costs and expenses of all appraisals
required by the foregoing. If such Substitute Property has a greater value
than the value of the Affected Property, the Total Consideration (and
appropriate components thereof) shall be increased accordingly. For purposes
of this Agreement, the term "DYNA Models" shall mean those certain net
operating income projections for each of the Properties prepared on behalf of
the Company to value the Properties as of the date set forth in the DYNA
Models. If Contributor conveys Substitute Property to the Company, in lieu of
any Property identified on Exhibit B annexed hereto, Contributor shall have
the right to require the Company to acquire such Substitute Property at such
time as the conditions set forth in this Agreement with respect to the
acquisition of such Property and the applicable Closing have been satisfied.
Contributor shall pay all actual out-of-pocket expenses incurred by the
Company in connection with Contributor's exercise of its rights pursuant to
the immediately preceding sentence. It is acknowledged and agreed that upon
substitution of such Substitute Property in accordance with the provisions of
this Section 2.01(f), such substitution shall be deemed to cure the relevant
Defect Substitution Event, CC Substitution Event and/or Closing Condition
Substitution Event applicable to the Affected Property, and notwithstanding
anything to the contrary herein, the Relevant Contributees shall not be
permitted to (x) exercise any termination right under this Agreement arising
in connection with such Affected Property or (y) to bring any proceeding
otherwise permitted under this Agreement in respect of breach of
representations and warranties or covenants in respect of the Affected
Property. Notwithstanding anything to the contrary in this Agreement, either
party shall have the right, by written notice, to extend the applicable
Closing (and all subsequent Closings on a day for day basis) for up to fifteen
(15) Business Days in order to effectuate the provisions of this Section
2.01(f). This Section 2.01(f) shall survive the applicable Closing.
Section 3. Contribution Consideration
3.01. Consideration.
(a) Tranche 1 Consideration. Schedule 3.01(a)(i) annexed hereto sets
forth (i) the aggregate agreed upon equity value of the Tranche 1 Properties
to be contributed at the Tranche 1 Closing (referred to herein as the "Tranche
1 Contributed Equity Value"), (ii) the aggregate principal amount outstanding
as of the Tranche 1 Closing Date of the Permitted Debt for such Tranche 1
Properties (such Permitted Debt, the "Tranche 1 Permitted Debt") and (iii) the
aggregate agreed upon cash portion of consideration (the "Tranche 1 Cash
Portion of the Sales Price") and the aggregate agreed upon non-cash
consideration (the "Tranche 1 Non-Cash Portion of Consideration") for the
contribution and transfer of each of the Tranche 1 Properties to the Relevant
Contributees at the Tranche 1 Closing. The sum of the amounts referenced in
clauses (i) and (ii) shall be referred to herein, collectively, as the
"Tranche 1 Consideration". Subject to Section 3.02, on the Tranche 1 Closing
Date, the Company shall (i) issue non-managing member interests in the Company
(the "Interests") to Owner Operating Partnership or, in Contributor's sole and
absolute discretion, to the applicable Subsidiary, as to the Tranche 1
Non-Cash Portion of Consideration, if any, as allocated for each Tranche 1
Property and (ii) pay to the Owner Operating Partnership or, in Contributor's
sole and absolute discretion, to the applicable Subsidiary the Tranche 1 Cash
Portion of the Sales Price, if any.
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(b) Tranche 2 Consideration. Schedule 3.01(b)(i) annexed hereto sets
forth (i) the aggregate agreed upon equity value of the Tranche 2 Properties
to be contributed at the Tranche 2 Closing (referred to herein as the "Tranche
2 Contributed Equity Value"), (ii) the Permitted Debt for such Tranche 2
Properties as of the Tranche 2 Closing Date (such Permitted Debt, the "Tranche
2 Permitted Debt") and (iii) the aggregate agreed upon cash portion of
consideration (the "Tranche 2 Cash Portion of the Sales Price") and the
aggregate agreed upon non-cash consideration (the "Tranche 2 Non-Cash Portion
of Consideration") for the contribution and transfer of each of the Tranche 2
Properties to the Relevant Contributee(s) at the Tranche 2 Closing. The sum of
the amounts referenced in clauses (i) and (ii) shall be referred,
collectively, to herein as the "Tranche 2 Consideration". Subject to Section
3.02, on the Tranche 2 Closing Date, the Company shall (i) issue Interests to
Owner Operating Partnership or, in Contributor's sole and absolute discretion,
to the applicable Subsidiary, as to the Tranche 2 Non-Cash Portion of
Consideration, if any, as allocated for each Tranche 2 Property and (ii) pay
to the Owner Operating Partnership or, in Contributor's sole and absolute
discretion, to the applicable Subsidiary the Tranche 1 Cash Portion of the
Sales Price, if any.
(c) Tranche 3 Consideration. Schedule 3.01(c)(i) annexed hereto sets
forth (i) the aggregate agreed upon equity value of the Tranche 3 Properties
to be contributed at the Tranche 3 Closing (referred to herein as the "Tranche
3 Contributed Equity Value"), (ii) the Permitted Debt for such Tranche 3
Properties as of the Tranche 3 Closing Date (such Permitted Debt, the "Tranche
3 Permitted Debt") and (iii) the aggregate agreed upon cash portion of
consideration (the "Tranche 3 Cash Portion of the Sales Price") and the
aggregate agreed upon non-cash consideration (the "Tranche 3 Non-Cash Portion
of Consideration") for the contribution and transfer of each of the Tranche 3
Properties to the Relevant Contributee(s) at the Tranche 3 Closing. The sum of
the amounts referenced in clauses (i) and (ii) shall be referred to herein,
collectively, as the "Tranche 3 Consideration". Subject to Section 3.02, on
the Tranche 3 Closing Date, the Company shall (i) issue Interests to Owner
Operating Partnership or, in Contributor's sole and absolute discretion, to
the applicable Subsidiary, in an amount equal to the Tranche 3 Non-Cash
Portion of Consideration, if any, as allocated for each Tranche 3 Property and
(ii) pay to the Owner Operating Partnership or in Contributor's sole and
absolute discretion, to the applicable Subsidiary, the Tranche 1 Cash Portion
of the Sales Price, if any. The Tranche 1 Consideration, the Tranche 2
Consideration and the Tranche 3 Consideration, collectively, are referred to
herein as the "Total Consideration" (it being acknowledged and agreed that the
Total Consideration on the date hereof is Four Hundred Fifty Seven Million
Five Hundred Thirty One Thousand Two Hundred Thirty Five and 00/100 Dollars
($457,531,235.00)). The Tranche 1 Contributed Equity Value, the Tranche 2
Contributed Equity Value and the Tranche 3 Contributed Equity Value,
collectively, are referred to herein as the "Contributed Equity Value". The
Tranche 1 Cash Portion of the Sales Price, the Tranche 2 Cash Portion of the
Sales Price and the Tranche 3 Cash Portion of the Sales Price, collectively,
are referred to herein as the "Cash Portion of the Sales Price".
(d) De Minimis Consideration; Sales Tax. Contributor and the Company
hereby acknowledge and agree that the value of the non-real estate assets
associated with the Properties to be contributed and sold to the Relevant
Contributee(s) is de minimis and no part of the Contributed Equity Value or
Cash Portion of the Sales Price is allocable thereto. Although it is not
anticipated that any sales tax shall be due and payable, the Company agrees
that the Company shall pay any and all State of New York sales and/or use
taxes imposed upon or due in connection with the transactions contemplated
hereunder under any applicable laws of New York State. The Company shall file
all necessary tax returns with respect to such taxes and, to the extent
required by applicable law, Contributor will join in the execution of any such
tax returns.
3.02. Adjustments to Consideration. The amounts set forth in Schedules
3.01(a), 3.01(b) and 3.01(c) shall each be adjusted as of the respective
Closing to reflect (i) any adjustments made pursuant to Section 2.01(d),
Section 13, and any other adjustments to the Cash Portion of the Sales Price
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with respect to any Property (plus or minus) made in accordance with any other
term or provision of this Agreement and (ii) any principal payments made on
the Permitted Debt after the date hereof for each of the Tranche 1 Closing,
Tranche 2 Closing and Tranche 3 Closing, it being understood that any such
principal payments shall result in a corresponding increase in the Tranche 1
Contributed Equity Value, the Tranche 2 Contributed Equity Value and the
Tranche 3 Contributed Equity Value, as applicable, as allocated for each of
the Permitted Debt Properties for which such principal payments are made to
the applicable Cash Portion of the Sales Price.
3.03. Effect of Permitted Debt Holder Refusal of Assumption Consent. If,
on or prior to the Tranche 1 Closing, the Tranche 2 Closing or the Tranche 3
Closing, as applicable, one or more of the Permitted Debt Holders refuses to
give a Permitted Debt Consent to Contributor and/or refuses to provide a Debt
Release, then Contributor shall prepay or if permitted thereby, defease, such
Permitted Debt in full on or prior to the applicable Closing, and the
applicable Contributed Equity Value for each such Permitted Debt Property so
prepaid or defeased shall be increased by the amount of principal, interest
and prepayment premiums or penalties payable in respect of the amount so
prepaid or defeased, and such increase shall be allocated to the applicable
Cash Portion of the Sales Price.
3.04. Certain Transactions at Closing. At each Closing, upon the
consummation of the applicable transactions contemplated herein, the Relevant
Contributee(s) shall (i) pay the applicable Cash Portion of the Sales Price
(plus or minus net adjustments and prorations pursuant to Section 13) with
respect to the Properties to Contributor or such other entity as required to
effectuate the transactions contemplated hereby, (ii) issue the applicable
Interests with respect to the Properties to Contributor or the applicable
Subsidiary, as applicable, and (iii) and the Relevant Contributees shall
assume the Permitted Debt (to the extent applicable) in accordance with
Section 3.02.
3.05. Issuance of Interests In Advance. Notwithstanding the foregoing,
the Contributor may elect (the "Aggregate Interests Election"), at or prior to
the Tranche 1 Closing, to receive at the Tranche 1 Closing, subject to the
terms and conditions of this Agreement, all of the Interests otherwise
intended to be issued at each of the Tranche 1 Closing, the Tranche 2 Closing
and the Tranche 3 Closing. If the Contributor makes the Aggregate Interests
Election, then the Company and the REIT shall cause the Interests to be issued
at the Tranche 1 Closing, and notwithstanding anything to the contrary in this
Agreement, the Company and the REIT shall have no further obligation under
this Agreement to issue Interests at any Closing, and such obligation shall be
deemed fulfilled at each relevant Closing. Such Interests transferred in
connection with the Tranche 1 Closing shall be transferred subject to the
express condition that if any of the Properties or Contributed Interests are
not conveyed pursuant to the terms of this Agreement and Contributor has not
elected to cure such failure with a Substitute Property in accordance with the
terms and provisions of this Agreement, then the Interests shall be reduced or
returned by the portion thereof allocated to such Property.
Section 4. The Closing
4.01. Tranche 1 Closing. Except as otherwise provided in this Agreement,
the contribution of the Tranche 1 Properties and the delivery of the
applicable Interests pursuant to this Agreement and the LLC Agreement, payment
of the Tranche 1 Cash Portion of Sales Price and assumption of the relevant
Permitted Debt, shall be consummated at a closing (the "Tranche 1 Closing")
that shall take place at 10:00 a.m. on or about September 30, 2005 (the
"Tranche 1 Closing Date") (anticipated to be the date that is four (4)
business days after receipt by Australian Trust of that portion of the
aggregate subscription price for the initial public offering of units in the
Australian Trust which is payable on the closing date of said initial public
offering), or such other earlier date as may be agreed to by the parties
hereto, and which closing shall be at the offices of Paul, Hastings, Xxxxxxxx
& Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
location as the parties may agree upon;
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provided; however, that if (i) the Underwriting Agreement is not executed by
the parties thereto on or before September 30, 2005 ("Underwriting Deadline")
or (ii) the Tranche 1 Closing has not occurred on or before October 31, 2005
(the "Tranche 1 Closing Deadline"), either Contributor or the Company may
elect, at its option, to terminate this Agreement by giving the other party
written notice of the exercise of such election at any time after the
Underwriting Deadline or the Tranche 1 Closing Deadline, as applicable,
whereupon this Agreement shall terminate, and neither Contributor nor the
Company shall have any further liability to the other hereunder, except for
the Surviving Obligations.
4.02. Tranche 2 Closing. Except as otherwise provided in this Agreement,
the contribution of the Tranche 2 Properties and the delivery of the
applicable Interests pursuant to this Agreement and the LLC Agreement, payment
of the Tranche 2 Cash Portion of Sales Price and assumption of the relevant
Permitted Debt, shall be consummated at a closing (the "Tranche 2 Closing")
that, subject to the last sentence of Section 7.01, shall take place at 10:00
a.m. on or about January 5, 2006 (the "Tranche 2 Closing Date"), or such other
earlier date as may be agreed to by the parties hereto, at the offices of
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or such other location as the parties may agree upon.
4.03. Tranche 3 Closing. Except as otherwise provided in this Agreement,
the contribution of the Tranche 3 Properties and the delivery of the
applicable Interests pursuant to this Agreement and the LLC Agreement, payment
of the Tranche 3 Cash Portion of Sales Price and assumption of the relevant
Permitted Debt, shall be consummated at one or more closings (collectively,
the "Tranche 3 Closing") that, subject to the last sentence of Section 7.01,
shall take place at 10:00 a.m. on or about October 1, 2006 (the "Tranche 3
Closing Date"), or such other earlier or later dates as may be agreed to by
the parties hereto, at the offices of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP,
00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other location as the
parties may agree upon.
4.04. Closings. For purpose of this Agreement, the term "Closing" shall
mean any of the Tranche 1 Closing, Tranche 2 Closing or Tranche 3 Closing, as
the context may require, and the term "Closing Date" shall mean any of the
Tranche 1 Closing Date, Tranche 2 Closing Date or Tranche 3 Closing Date, as
the context may require.
4.05. Effect of a Closing Not Occurring. Notwithstanding the foregoing,
(a) if the Tranche 1 Closing does not occur for any reason and this Agreement
is terminated in accordance with the terms hereof, then neither Contributor
nor the Company shall have any obligation to consummate the Tranche 2 Closing
and the Tranche 3 Closing, and (b) if the Tranche 2 Closing does not occur for
any reason and this Agreement is terminated in accordance with the terms
hereof, then neither Contributor nor Company shall have any obligation to
consummate the Tranche 3 Closing. To the extent that such failure to close is
a default hereunder, the parties shall be entitled to exercise their
respective remedies as expressly provided herein.
4.06. Dates; Times; Dollars. For purposes of clarity, the parties hereto
acknowledge and agree that (x) all references to dates in this Agreement shall
be deemed references to the occurrence of such date in New York, New York, (y)
all references to times shall be deemed references to Eastern Standard Time,
and (z) all references to monetary amounts shall be deemed references to
United States Dollars (such amounts to be paid by Federal Funds Wire Transfer
of immediately available funds), except to the extent expressly noted to the
contrary in this Agreement. In addition, unless otherwise specified herein,
all references to the delivery of "true", "correct", and/or "complete" (A)
copies of any documents, materials and other information and (B) lists or
other disclosures (and, in each case, words of similar import), shall be
deemed to be followed by the words "in all material respects".
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Section 5. Representations and Warranties
5.01. Contributor Representations and Warranties. Owner Operating
Partnership and each of the Subsidiaries, respectively, represent and warrant
as to itself (and not as to each other or any other entity) and as to the
Contributed Interests and the other Properties that it contributes or
otherwise transfers (and not as to any other Properties) to the Relevant
Contributees as follows (notwithstanding the pluralization used in the
following representations and warranties, the breadth of the following
representations and warranties shall not be deemed expanded beyond the scope
indicated by the foregoing):
(a) Such party (x) is a partnership, limited partnership or limited
liability company, as applicable, formed, existing and in good standing under
the laws of the state of its formation, (y) is qualified and in good standing
in each of the states in which each of the Properties directly owned by it are
located (to the extent required by law), except where the failure to do so
would not have a material adverse effect on the ability of such Subsidiary to
fulfill its responsibilities under this Agreement and (z) has the requisite
power and authority (i) to enter into this Agreement and all documents
contemplated hereunder to be entered into by such party, and (ii) to perform
the terms and obligations of such party under this Agreement and such other
documents.
(b) Subject to obtaining the Required Consents, the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby on the part of such party have been duly authorized by all
necessary partnership action, limited partnership action or limited liability
company action, as applicable, and no other proceedings or consents on the
part of such party are necessary in order to permit it to consummate the
transactions contemplated hereby.
(c) This Agreement has been duly executed by such party and all of
such party's obligations hereunder are the legal, valid and binding
obligations of such party, enforceable in accordance with the terms of this
Agreement, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or
affecting creditors' rights generally from time to time in effect and to
general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless whether considered in
a proceeding in equity or at law.
(d) Such party is not the subject of any bankruptcy, reorganization,
insolvency or similar proceedings on the date hereof. To such party's
knowledge, there are no such proceedings threatened against such party, nor
are any such proceedings contemplated by such party.
(e) Annexed hereto as Schedule 5.01(e)-1 is a true, correct and
complete copy of the rent rolls for the Properties (the "Rent Rolls")
identifying and listing, as of the date thereof, by tenant, security deposits,
square footage, and monthly fixed rent. The parties hereto acknowledge that
such Rent Rolls may not list (and, to the extent that such Rent Rolls do not
list, such party makes no representation or warranty with respect to) (i)
subleases, concessions or license agreements which may have been entered into
by tenants or subtenants (unless such subleases, concessions, or license
agreements were known to such party), (ii) license or concession agreements
that have terms not in excess of sixty (60) days or are terminable by the
landlord without penalty, and (iii) kiosks or pushcarts occupied under
agreements that are terminable by the landlord without penalty upon not more
than one month's notice. Annexed hereto as Schedule 5.01(e)-2 is a true,
correct and complete list of all tenant arrearages for all of the Properties.
(f) Annexed hereto as Schedule 5.01(f) is a true, correct and
complete list of all written leases or occupancy agreements for the Properties
(which together with all existing
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amendments and modifications thereof are collectively referred to as
"Leases"), and true, correct and complete copies of each Lease have been
delivered or made available to the Company. To such party's knowledge, each
Lease is in full force and effect. Except as set forth on Schedule 5.01(f), to
such party's knowledge, such party has not received any written notice that
such party is in breach or default under any Lease, which breach or default
remains uncured on the date hereof. Except as set forth on Schedule 5.01(f),
such party has not sent any written notice to any of its respective Tenants
occupying more than twenty five thousand (25,000) rentable square feet ("Major
Tenant") within the twelve (12) month period preceding the date hereof
asserting that such Major Tenant is in breach or default under any Lease to
which it is a party, which breach or default remains uncured on the date
hereof.
(g) Schedule 5.01(g) annexed hereto is a true, correct and complete
list of all ground leases under which such party is the ground lessee,
including all existing amendments and modifications thereto (collectively
"Ground Leases") affecting the Properties. To such party's knowledge, all
Ground Leases affecting the Properties are in full force and effect. Such
party has not given, nor has such party received, any written notice of a
material default (which remains uncured) under any Ground Lease.
(h) A true, correct and complete list of all agreements for the
payment of leasing commissions by the party holding the interest of landlord
with respect to the Properties under which such landlord is required to pay
any leasing commissions, brokerage fees or any other fee or charge that is due
and payable on or after the applicable Closing is set forth on Schedule
5.01(h) annexed hereto (such agreements are collectively referred to as the
"Brokerage Agreements").
(i) Schedule 5.01(i) annexed hereto contains a true, correct and
complete list of all Material Service Contracts. For purposes hereof,
"Material Service Contracts" shall mean all contracts (except for Leases,
Ground Leases and Brokerage Agreements) relating to the management, leasing,
operation, maintenance or repair of the Properties or that would otherwise
affect the use, operation or enjoyment of the Properties (collectively,
"Service Contracts") that are either (i) not terminable upon one month's
notice or less without payment or penalty; or (ii) for which the services
thereunder cost in excess of Seventy-Five Thousand ($75,000) Dollars per annum
with respect to any individual Property. To such party's knowledge, all of the
Material Service Contracts are in full force and effect and such party has not
received written notice of any material default thereunder. All Service
Contracts (other than those executed in contravention of the terms thereof)
shall be assigned to, and assumed by, the Relevant Contributee(s), as
applicable, at the respective Closing for the Properties affected by such
Service Contracts, to the extent such Service Contracts are assignable and all
necessary consents have been obtained.
(j) Except as set forth on Schedule 5.01(j) annexed hereto, (i)
there are currently no capital improvement projects commenced by such party
or, to such party's actual knowledge, costing more than Two Hundred Fifty
Thousand ($250,000) Dollars in the aggregate at any of the Properties other
than maintenance required in the ordinary course of business, (ii) to such
party's knowledge, there are no pending or threatened condemnation
proceedings, and (iii) except as set forth in the Leases no tenant has any
options, rights of first refusal or rights of first offer to purchase any of
the Properties.
(k) Except as disclosed in the reports listed on Schedule 5.01(k)
annexed hereto and/or any other environmental report or update thereto
obtained by the Company from a third party engineer or consultant prior to the
applicable Closing Date (the "Environmental Reports"), or as otherwise noted
on Schedule 5.01(k), to such party's knowledge, such party has not received
any written notification which remains uncured from any Governmental Authority
having jurisdiction over this Properties (A) stating that any hazardous
materials, hazardous substances, contaminants or pollutants
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have been stored, generated, disposed of, released or transported at, on or
from the Properties in violation of any environmental laws or regulations
applicable to the Properties, and there is no claim pending against such party
with respect to (x) any such violation applicable to the Properties, or (B)
with respect to any corrective or remedial action or cleanup relating to any
of the Properties, whether currently on-going or awaiting final governmental
approval, or (y) any further action letters relating to any of the Properties.
(l) All casualty insurance policies presently in effect with respect
to the Properties are in sufficient amounts and are on commercially reasonable
terms to provide for the "replacement costs" of each of the Properties and the
premiums for all such insurance policies have been paid in full through the
date hereof. Such party has received no written notice from any insurance
carrier that, if not corrected, would result in a termination of insurance
coverage or increase in the present cost thereof. To such party's knowledge,
all insurance policies presently in effect with respect to the Properties are
in full force and effect and either the policies or proceeds thereunder are
fully transferable to the Company.
(m) Such party does not have (i) any employees located at the
Properties or employees located elsewhere whose duties are primarily with
respect to the Properties or (ii) any pension plan liabilities, funded or
unfunded, or employee benefit plan(s), programs, agreements, or arrangements
of any kind pertaining to the Properties or any employees of such party
located at the Properties.
(n) Such party is not a "foreign person" as defined in the Internal
Revenue Code Section 1445, as amended (the "Code Withholding Section").
(o) Except as set forth on Schedule 5.01(o) annexed hereto, there is
no litigation, action, claim, suit, investigation, arbitration or other
adversarial contest or proceeding pending or, to such party's knowledge,
threatened, against such party with respect to any of the Properties or
relating to any of the Ground Leases or the Leases which would in the
aggregate have a material adverse affect on the Properties taken as a whole
(other than claims for personal injury, bodily injury or property damage which
are reasonably believed by such party to be covered by such party's existing
insurance policies).
(p) Except as set forth in Schedule 5.01(p), there are no
outstanding agreements with attorneys or consultants with respect to tax bills
for a Property that will bind the Relevant Contributees or the Properties
after the first full tax year after the applicable Closing.
(q) Such party, to its knowledge, has complied in all material
respects with (and, prior to each respective Closing, shall continue to comply
in all material respects with) the terms and provisions of the Permitted Debt
and corresponding Notes, Mortgages and all other documents securing the
Permitted Debt Loans (collectively, the "Permitted Debt Loan Documents"), and
all notices or correspondence received from the Permitted Debt Holder.
Schedule 5.01(q) annexed hereto is a true, correct and complete list of all
Permitted Debt Loan Documents. Such Notes and Mortgages are in full force and
effect, and such party has not received from the Lender thereunder a written
notice a default thereunder or under any of the Permitted Debt Loan Documents
(where default remains uncured). Such party has delivered to the Company or
its Agents true and complete copies of all Permitted Debt Loan Documents.
(r) Such party understands the risks of, and other considerations
relating to, the purchase of the Interests. Such party, by reason of its
business and financial experience, together with the business and financial
experience of those persons, if any, retained by it to represent or advise it
with respect to its investment in the Interests, (i) has such knowledge,
sophistication and experience in
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financial and business matters and in making investment decisions of this type
that it is capable of evaluating the merits and risks of an investment in the
Company and of making an informed investment decision, (ii) is capable of
protecting its own interest or has engaged representatives or advisors to
assist it in protecting its interests and (iii) is capable of bearing the
economic risk of such investment.
(s) Such party understands that an investment in the Company
involves substantial risks. Such party has been given the opportunity to make
a thorough investigation of the proposed activities of the Company and has
been furnished with materials relating to the Company and its proposed
activities. Such party has been afforded the opportunity to obtain any
additional information deemed necessary by such party to verify the accuracy
of any representations made or information conveyed to such party. Such party
confirms that all documents, records, and books pertaining to its investment
in the Company and requested by such party have been made available or
delivered to such party. Such party has had an opportunity to ask questions
and receive answers from the Company, or from a person or persons acting on
the Company's behalf, concerning the terms and conditions of this investment.
(t) The Interests to be issued to such party will be acquired by
such party for its own account for investment only and not with a view to, or
with any intention of, a distribution or resale thereof, in whole or in part,
or the grant of any participation therein, without prejudice, however, to such
party's right (subject to the terms of the Interests) at all times to sell or
otherwise dispose of all or any part of its Interests under an exemption from
such registration available under the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws, and subject,
nevertheless, to the disposition of its assets being at all times within its
control. Such party was not formed for the specific purpose of acquiring an
interest in the Company.
(u) Such party acknowledges that, except as expressly set forth in
this Agreement or in the LLC Agreement, (i) the Interests to be issued to such
party have not been registered under the Securities Act or state securities
laws by reason of a specific exemption or exemptions from registration under
the Securities Act and applicable state securities laws and, if such Interests
are represented by certificates, such certificates will bear a legend to such
effect, (ii) the Company's reliance on such exemptions is predicated in part
on the accuracy and completeness of the representations and warranties of such
party contained herein, (iii) such Interests, therefore, cannot be resold
unless registered under the Securities Act and applicable state securities
laws, or unless an exemption from registration is available, (iv) there is no
public market for such Interests, and (v) the Company has no obligation or
intention to register such Interests for resale under the Securities Act or
any state securities laws or to take any action that would make available any
exemption from the registration requirements of such laws. Such party hereby
acknowledges that because of the restrictions on transfer or assignment of
such Interests to be issued hereunder which will be set forth in the LLC
Agreement and/or in a registration rights agreement, such party may have to
bear the economic risk of the investment commitment evidenced by this
Agreement and any Interests acquired hereby for an indefinite period of time.
(v) Such party has prepared and timely filed all tax returns
required to be filed by it on or before the date hereof with respect to the
Properties, which tax returns are true, correct and complete in all material
respects. Such party has paid or made provision for the payment of all taxes
with respect to the ownership and operation of the Properties that are due or
claimed to be due from it on or before the date hereof by any governmental
taxing authority. No federal, state, local or foreign taxing authority has
given written notice to such party of any tax deficiency, lien, interest or
penalty or other assessment against such party which has not been paid and no
audit or written inquiry has been commenced or, to the best of such party's
knowledge, threatened by any federal, state, local or foreign tax authority
relating to such party that may be expected to result in a tax deficiency,
lien, interest or other
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assessment against the assets of such party. Contributor shall pay any and all
taxes imposed on the Company based on Contributor's failure to comply with any
bulk sales law.
(w) Schedule 7.07 is a true, correct and complete list of all
Required Consents.
(x) The applicable Contributed Interests have not been assigned,
pledged or otherwise encumbered or transferred, and are not subject to any
pledges, liens or other encumbrances. There are no attachments, executions or
assignments for the benefit of creditors or voluntary proceedings in
bankruptcy or under any other debtor relief laws pending or (to such party's
knowledge) threatened by or against such party or otherwise affecting such
Contributed Interests. Except for the Contributed Interests owned by such
party, such party does not own any interest in, nor does such party have any
ownership rights in respect of, the Property to which the Contributed
Interests relate, and from and after the transfer of such Contributed
Interests to Purchaser, such party shall not own any interest in, nor have any
ownership rights in respect of, the Property or the entity to which the
Contributed Interests relate.
5.02. Relevant Contributees Representations and Warranties. The Company
represents and warrants to Contributor as to itself and as to and on behalf of
all of the other Relevant Contributees, if applicable, as follows:
(a) Such party is (a) a limited liability company, organized,
existing and in good standing under the laws of the State of Delaware and has
the requisite power and authority to enter into and perform the terms of this
Agreement, including to issue the Interests to Contributor to the extent
called for in accordance with the terms of this Agreement and the LLC
Agreement and (b) has, since its formation or its acquisition (directly or
indirectly) by the REIT, been classified for federal income tax purposes as a
partnership or disregarded entity and not as a corporation or an association
taxable as a corporation, or a "publicly traded partnership" within the
meaning of Section 7704(b) of the Code.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby on the part of such party
has been duly authorized by all necessary limited liability company action and
no other proceedings on the part of such party are necessary in order to
permit it to consummate the transactions contemplated hereby.
(c) This Agreement has been duly executed by such party and all of
such party's obligations hereunder are the legal, valid and binding
obligations of such party, enforceable in accordance with the terms of this
Agreement, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws relating to or
affecting creditors' rights generally from time to time in effect and to
general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing), regardless whether considered in
a proceeding in equity or at law.
(d) Such party's performance of its duties under this Agreement will
not conflict with, result in a breach of or be a default under, or be
adversely affected by, any existing agreements, instruments, judgments,
permits, orders, rules, regulations or decrees to which such party is a party
or by which it or its assets are bound.
(e) Such party is not the subject of any bankruptcy, reorganization,
insolvency or similar proceedings.
(f) The Interests to be issued in connection with the transactions
contemplated herein will be duly authorized and validly issued in accordance
with the terms of the LLC
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Agreement and, assuming the accuracy of Contributor's representations and
warranties, in compliance with federal and applicable state securities laws,
and will be, in connection with the transactions contemplated herein, fully
paid and non-assessable with no preemptive rights, and the Interests to be
issued in connection with the transactions contemplated herein will be issued
upon the terms provided in the LLC Agreement, as the same is to be amended as
permitted or required hereunder. Except as created by this Agreement, as of
the date hereof, there are no outstanding subscriptions, options, warrants,
preemptive or other rights or other arrangements or commitments obligating the
Company to issue any Interests. At each Closing, upon receipt by Contributor
of the Contribution Consideration applicable for such Closing in exchange for
Interests, the Company will issue the Interests to be issued hereunder free
and clear of all liens other than those suffered or permitted or granted by
Contributor and, as of such Closing, such Contributor will be admitted as a
member of the Company. The issuance of the Interests to Contributor at each
Closing will not require any approval or consent of any person except any such
approval as shall have been obtained on or prior to such Closing Date.
5.03. REIT Representations and Warranties. The REIT represents and
warrants to Contributor as follows:
(a) The REIT is a corporation, organized, existing and in good
standing under the laws of the State of Maryland and has the requisite power
and authority to enter into and perform the terms of this Agreement.
(b) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby on the part of the REIT
have been duly authorized by all necessary limited liability company action
and no other proceedings on the part of the REIT are necessary in order to
permit it to consummate the transactions contemplated hereby.
(c) This Agreement has been duly executed by the REIT and all of the
REIT's obligations hereunder are the legal, valid and binding obligations of
the REIT, enforceable in accordance with the terms of this Agreement, subject
to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws relating to or affecting creditors' rights
generally from time to time in effect and to general principles of equity
(including concepts of materiality, reasonableness, good faith and fair
dealing), regardless whether considered in a proceeding in equity or at law.
(d) The REIT's performance of its duties under this Agreement will
not conflict with, result in a breach of or be a default under, or be
adversely affected by, any existing agreements, instruments, judgments,
permits, orders, rules, regulations or decrees to which the REIT is a party or
by which it or its assets are bound.
(e) The REIT is not the subject of any bankruptcy, reorganization,
insolvency or similar proceedings.
(f) The REIT is in compliance with the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 , and the regulations promulgated thereunder (the
"Patriot Act"), and comparable regulations. None of the funds contributed to
the REIT have or will be derived from illegal activities or made in
contravention of any United States anti-money laundering laws or regulations.
Neither the REIT nor any of its beneficial owners (i) is or will be subject to
United States trade sanctions or included on any United States government
published lists of terrorists or terrorist organizations and (ii) is a
"foreign shell bank" as defined under the Patriot Act.
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5.04. (a) Survival of Contributor Representations and Warranties;
Modification Thereof. The representations and warranties in this Agreement by
Contributor are made as of the date hereof, and shall be remade by Contributor
as of the date of each Closing (as applicable to the Properties or the
Interests being contributed or sold to the Company, and/or the SPE Entities,
as applicable, at such Closing) with the same force and effect as if in fact
specifically remade at that time. If facts or circumstances arising after the
date hereof render Contributor unable to remake a representation or warranty
in any material respect as of such Closing, and Contributor specifically so
advises the Company, in writing and prior to such Closing (including, without
limitation, by amendment of the schedules hereto), of the particular
circumstances rendering any representation or warranty untrue in any material
respect, or if the same is disclosed in writing in an update to any Title
Commitment, Search or third party report commissioned by the Company in
connection with its review of the Properties, the failure to remake such
representation and warranty shall not constitute a default hereunder by
Contributor, except (in each case) in the event or to the extent that the
untruth of such representation or warranty is the result of any act or
omission of Contributor and/or its Agents in breach or violation of the terms
of this Agreement; notwithstanding the foregoing, the truth and accuracy of
all representations and warranties made by Contributor in this Agreement
(required to be true in all material respects as of an applicable Closing Date
pursuant to Section 10.01(b)), as modified to reflect the operation of the
Properties from and after the date hereof in the ordinary course (including,
without limitation, leasing activities with respect thereto) or as otherwise
permitted in accordance with the terms of this Agreement, shall be a condition
precedent to the Company's obligation hereunder at each Closing.
Notwithstanding the foregoing, the parties acknowledge that if an item is (a)
disclosed only on one schedule such disclosure shall be deemed to be disclosed
on any other relevant schedule to the extent such item is relevant to the
representation or warranty in question, and to the extent such item is
inconsistent with such other schedule, the disclosure of such item on any
schedule shall be deemed to modify the incorrect representation and (b)
disclosed in any third party report delivered in writing by Contributor to the
Company, such disclosure shall be deemed to modify the relevant representation
and warranty. The representations and warranties contained in Subparagraphs
5.01(a), (b) and (c) shall survive the Closing, and the representations and
warranties in Subparagraph 5.01(w) shall survive the Closing for a period
equal to the applicable statute of limitations plus three months. Except as
provided in the immediately preceding sentence and in the next sentence, all
other representations and warranties made in this Agreement by Contributor
shall survive the applicable Closing for twelve (12) months from each such
Closing (the "Rep Survival Period") and shall not merge into any instrument of
conveyance delivered at the Closing. "Contributor's Knowledge" shall be
defined for purposes of this Agreement as the current actual (not
constructive, imputed or implied) knowledge, without any duty of inquiry or
investigation, of the Contributor. The provisions of this Section 5.04(a)
shall survive the Closing.
(b) Survival of Company and REIT Representations and Warranties. The
representations and warranties in this Agreement by the Company and the REIT
are made as of the date hereof and shall be remade by the Company and the REIT
and as of each Closing. The representations and warranties in Subparagraphs
5.02(a), (b), (c) and (d) and Subparagraphs 5.03(a), (b), (c) and (d) shall
survive the Closing. All other representations and warranties of the Company
and the REIT, if any, shall survive the applicable Closing for the Rep
Survival Period and shall not merge into any instrument of conveyance
delivered at the Closing. The provisions of this Section 5.04(b) shall survive
the Closing.
5.05. (a) Indemnification by Contributor; Cap; Basket. Notwithstanding
anything to the contrary in this Agreement, but subject to (i) the immediately
succeeding sentence, (ii) Section 2.01(d), and (iii) the Cap (as hereinafter
defined), Contributor agrees to and does hereby indemnify, defend and hold
harmless the Company, the SPE Entities and the REIT, their respective
constituents and Agents, and their successors and assigns, from and against
any and all liabilities, claims, demands, suits, administrative proceedings,
causes of action, costs, damages, personal injuries and property damages,
losses and expenses (including, without limitation, reasonable attorneys' or
other consultants' fees and
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disbursements, but excluding consequential, punitive, special and other
indirect damages), both known and unknown, present and future, at law or in
equity (collectively, "Losses") arising out of, by virtue of, or related to, a
breach or inaccuracy of any representation, warranty or covenant of
Contributor contained in Section 5.01 or Section 15.01. Notwithstanding the
foregoing, no claim for a breach or inaccuracy of any representation, warranty
or covenant of Contributor contained in Section 5.01 or 15.01 shall be
actionable or payable (x) unless the valid claims for all such breaches and
inaccuracies collectively aggregate more than Five Hundred Thousand Dollars
($500,000) (the "Basket") with respect to all Properties, in which event the
amount of all claims in excess of such $500,000 threshold shall be actionable,
and (y) unless written notice containing a description of the specific nature
of such breach or inaccuracy shall have been given by the Company to
Contributor prior to the expiration of the Rep Survival Period. The Company,
the SPE Entities and the REIT agree to first seek recovery (using commercially
reasonable efforts to do so) under any insurance polices, Service Contracts,
Leases, Title Policies, Ground Lease or any other agreement for which such
recovery is available prior to seeking recovery from Contributor, and
Contributor shall not be liable to the Company, the SPE Entities or the REIT
to the extent such party's claim is satisfied from such insurance policies,
Service Contracts, Leases or Title Policies, Ground Leases or any other
agreement for which such recovery is available. Notwithstanding anything
contained herein to the contrary, in no event shall Contributor's aggregate
liability to the Company, the SPE Entities or the REIT for breach or
inaccuracy of any representation or warranty or covenant of Contributor in
this Agreement or as remade as of any Closing Date pursuant to Section 5.04,
or in any other way related to this Agreement and the transactions
contemplated hereby, exceed the amount of the Cap. As used in this Section
5.05, the term "Cap" shall mean the total aggregate amount of Twenty Five
Million and 00/100 Dollars ($25,000,000.00). Notwithstanding anything to the
contrary contained herein, no claim for a breach or inaccuracy of any
representation or warranty or covenant of Contributor shall be actionable or
payable if the breach or inaccuracy in question results from or is based on
(i) a condition, state of facts or other matter expressly disclosed in any
Review Materials as of the date hereof or in any Schedule attached to this
Agreement, or (ii) if the inaccuracy of, or failure to make, such
representation or warranty as of the applicable Closing does not constitute a
breach, default or violation pursuant to the second sentence of Section
5.04(a). Notwithstanding anything to the contrary in this Section 5.05(a), the
Cap, the Basket and the Rep Survival Period shall not be applicable to Losses
arising from or in connection with the matters described on Schedule 5.05(a)
of this Agreement (the "Special Indemnification Matters"), it being agreed
that Contributor shall and does hereby indemnify, defend and hold harmless the
Company, the SPE Entities and the REIT, their respective constituents and
Agents, and their successors and assigns, from and against any Losses arising
out of, by virtue of, or related to, (x) a breach or inaccuracy of any
representation, warranty or covenant of Contributor relating to the Special
Indemnification Matters or (y) otherwise relating to the Special
Indemnification Matters.
(b) Indemnification by Company; Cap; Basket. Notwithstanding
anything to the contrary in this Agreement, but subject to the immediately
succeeding sentence and to the last sentence of this Section 5.05(b), the
Company and the REIT agree to and do hereby indemnify, defend and hold
harmless Contributor, its partners, members, shareholders, officers and
directors, and their respective Agents, Affiliates and each of their
successors and assigns, from and against any Losses arising out of, by virtue
of, or related to (i) a breach or inaccuracy of any representation, warranty
or covenant of the REIT or the Company contained in Section 5.02, 5.03 or
16.01 hereof, or (ii) a release, emission, discharge or disposal of any
reportable quantities of hazardous materials, hazardous substances,
contaminants or pollutants at or from any of the Properties in violation of
any U.S. Federal or state environmental laws or regulations applicable to the
Properties to the extent such violation occurs subsequent to the applicable
Closing Date or before any applicable Closing Date if such release, emission,
discharge or disposal was caused by or at the direction of the Company or the
REIT. Contributor agrees (and agrees to cause the applicable Contributee) to
first seek recovery (using commercially reasonable efforts to do so) under any
insurance policies, Service Contracts, Leases, Title Policies, Ground Leases
or
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any other agreement for which such recovery is available prior to seeking
recovery from the Company or the REIT, and the Company and the REIT shall not
be liable to Contributor to the extent the Contributor's claim is satisfied
from such insurance policies, Service Contracts, Leases, Title Policies,
Ground Leases or any other agreement for which such recovery is available.
(c) Exculpation. Notwithstanding anything to the contrary in this
Agreement, but subject to the terms and provisions of Section 5.05(b), neither
party hereto, nor any member or any general or limited partner of such party,
whether direct or indirect, nor any direct or indirect member or any general
or limited partner in such party, nor any disclosed or undisclosed officers,
shareholders, members, principals, directors, employees, partners, servants,
Agents or Affiliates of either party and each of their successors or permitted
assigns, shall have any personal liability with respect to any provisions of
this Agreement and, if after the Tranche 1 Closing Date any party is in breach
or default with respect to its respective obligations or otherwise, the other
party hereto shall look solely to such breaching or defaulting party's
interest in and to the Interests or the proceeds from the sale of the
Properties (subject, in each case, to Section 5.05(a) of this Agreement) for
the satisfaction of remedies hereunder.
(d) Procedures Regarding Indemnification. If a claim or demand for
indemnification is based upon an asserted liability or obligation to a person
or entity not a party to this Agreement nor a permitted successor or assign (a
"Third Party Claim"), then the indemnified party shall give prompt (within the
time required for the filing of any responsive pleading in the case of
litigation) written notice of any such claim to the indemnifying party. The
indemnifying party may defend or settle such claims or actions with counsel
chosen and paid by it by giving written notice (the "Election to Defend") to
the indemnified party within thirty (30) days after the date such notice of a
Third Party Claim is received by the indemnifying party; provided, however,
that the indemnifying party may not settle such claims or action without the
consent of the other party to this Agreement, which consent shall not be
unreasonably withheld, if the indemnified party will not be fully released in
connection therewith. Such notice and opportunity shall be conditions
precedent to any liability of the indemnifying party under this Agreement.
Notwithstanding anything to the contrary in this Agreement, a failure to
provide or delay in providing any required notice shall not prejudice any
right to indemnification under this Agreement except to the extent that the
indemnifying party is prejudiced by such failure. In no event shall the
provisions of this subsection reduce or lessen the obligations of the
indemnifying party under this subsection, if prior to the expiration of such
thirty (30) day notice period, the indemnified party shall respond to a Third
Party Claim if such action is reasonably required to minimize damages or avoid
a forfeiture or penalty or because of a requirement imposed by law. If the
indemnifying party does not duly give the Election to Defend as provided
above, then it shall be deemed to have irrevocably waived its right to defend
or settle such claims, but it shall have the right, at its expense, to attend,
but not otherwise participate in, proceedings with such third parties; and if
the indemnifying party does duly give the Election to Defend, then the
indemnified party shall have the right at its expense, to attend, but not
otherwise participate in, such proceedings. The indemnified party (or its
designee) shall have the right, to the extent permitted by law or regulation,
by written notice given to the indemnifying party at any time, to assume
exclusive control of the defense of any claim insofar as the indemnified party
is concerned, but, subject to the immediately succeeding sentence, the giving
of such notice shall result in the indemnifying party being relieved of its
obligations in respect of such claim under this Agreement. If at any time
during the pendency of a claim the indemnifying party shall disaffirm its
responsibility for such claim, the indemnified party (or its designee) shall
have the right, but not the obligation, to assume the exclusive control of the
defense and settlement of such claim insofar as the indemnified party is
concerned, and all costs and expenses of such defense shall be paid by the
indemnifying party if such claim is within the scope of the indemnification
obligations of the indemnifying party under this Agreement.
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Section 6. Acknowledgments of the Company
6.01. No Prior Representations or Warranties. The Company acknowledges
that except as expressly set forth in this Agreement, neither Contributor nor
any agent or representative or purported agent or representative of
Contributor has made, and Contributor is not liable for or bound in any manner
by, any express or implied warranties, guaranties, promises, statements,
inducements, representations or information (including, without limitation,
any information set forth in offering materials heretofore furnished to the
Company) pertaining to the Properties or any part thereof, the physical
condition thereof, environmental matters, income, expenses or operation
thereof or the uses which can be lawfully made of the same under applicable
zoning or other laws or any other matter or thing with respect thereto,
including, without limitation, any existing or prospective leases, operating
agreements or other agreements. Without limiting the foregoing, the Company
acknowledges and agrees that, except as expressly set forth in this Agreement
or any other agreement or document entered into by the parties in connection
with the transaction contemplated hereby, Contributor is not liable for or
bound by (and the Company has not relied upon) any verbal or written
statements, representations, real estate brokers' "set-ups" or offering
materials or any other information respecting the Properties furnished by
Contributor or any broker, employee, agent, consultant or other person
representing or purportedly representing Contributor. Accordingly, Contributor
is entering into this Agreement based upon the Company's assurances that the
Company has a well-informed opinion of the value of the Properties. The
Company is not relying upon any representations made by Contributor regarding
market conditions which influence the Properties such as competitive position
relative to its existing and potential future competitors, market rental rates
achievable at the Properties, vacancy assumptions, credit loss and downtime
reserves, project growth rates (if any) in rents or expenses, impact of the
contribution and sale on assessed values, tenant work and leasing fee levels
necessary to generate estimated market rents, tenant retention ratios and the
need for an amount of any "capital reserves". The provisions of this Section
6.01 shall survive each Closing.
6.02. As-Is. The Company acknowledges that it has, prior to the date
hereof, inspected the Properties, the physical and environmental condition and
the uses thereof, and the fixtures, equipment and personal property included
in this contribution and acquisition to its satisfaction, and the Company has
independently investigated, analyzed and appraised the value and profitability
thereof, the creditworthiness of tenants, and the presence of hazardous
materials, if any, in or on the Properties, that they have received or had
made available to them by Contributor, on or prior to the date hereof, copies
of and/or has reviewed the Review Materials and other agreements and documents
referred to or contemplated herein, that they are thoroughly acquainted with
all of the foregoing and that the Company, in entering into this Agreement,
will rely exclusively upon their own independent investigations, analyses,
studies and appraisals and not upon any information provided to the Company by
or on behalf of Contributor with respect thereto. AT EACH CLOSING, THE COMPANY
AGREES TO ACCEPT THE PROPERTIES CONTRIBUTED OR SOLD TO THE COMPANY AND/OR THE
SPE ENTITIES, AS APPLICABLE, AT SUCH CLOSING IN "AS IS, WHERE IS" CONDITION,
EXCEPT FOR CONTRIBUTOR'S REPRESENTATIONS, WARRANTIES OR COVENANTS EXPRESSLY
CONTAINED IN THIS AGREEMENT, WITH ALL FAULTS AS OF THE DATE HEREOF AND
SPECIFICALLY AND WITHOUT ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES, EITHER
EXPRESS OR IMPLIED AS TO (I) THE CONDITION, FITNESS FOR ANY PARTICULAR
PURPOSE, OR MERCHANTABILITY OF SUCH PROPERTIES, (II) THE STRUCTURAL INTEGRITY
OF SUCH PROPERTIES, (III) THE ACCURACY OR COMPLETENESS OF ANY INFORMATION,
DATA, MATERIALS OR CONCLUSIONS CONTAINED IN ANY INFORMATION PROVIDED TO THE
COMPANY FROM ANY SOURCE WHATSOEVER, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, (IV) ENVIRONMENTAL MATTERS PERTAINING TO SUCH PROPERTIES EXCEPT AS SET
FORTH HEREIN, OR (V) ANY OTHER WARRANTY OF ANY KIND, NATURE OR TYPE WHATSOEVER
FROM CONTRIBUTOR,
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EXCEPT AS MAY BE EXPRESSLY PROVIDED HEREIN, REASONABLE WEAR AND TEAR AND
DAMAGE BY FIRE OR OTHER CASUALTY (SUBJECT TO THE PROVISIONS OF SECTION 8.01)
BETWEEN THE DATE HEREOF AND THE APPLICABLE CLOSING DATE EXCEPTED, AND THE
COMPANY SHALL ASSUME (SUBJECT TO THE PROVISIONS HEREOF AND APPLICABLE LAW) THE
RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS
AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS MAY NOT HAVE BEEN REVEALED
BY THE COMPANY'S INVESTIGATIONS.
6.03. Environmental Matters. With respect to all matters disclosed in the
Environmental Reports, Contributor and the Company agree that the Company
shall not have the right to bring any claim against Contributor for any
environmental matters or violation of any environmental laws with respect to
the matters disclosed in such Environmental Report and the Company waives all
the rights (at law, in equity or otherwise) to implead Contributor in any
action brought with respect to such environmental matters and waives all
rights of contribution against Contributor in connection therewith, provided,
however, that the foregoing shall not be deemed to affect or limit the
indemnification obligations of Contributor set forth in Section 5.05(a)
regarding the Special Indemnification Matters. The provisions of this Section
6.03 shall survive any applicable Closing indefinitely.
Section 7. Contributor's Obligations as to the Properties
7.01. Operation of Properties Prior to Closing. Prior to each Closing for
each respective Property, Contributor agrees that it shall maintain, repair,
lease, manage and operate the Properties in substantially the same manner as
Contributor has operated, managed, leased, maintained and repaired the
Properties prior to the date of this Agreement. As it relates to each
Property, from and after the date hereof and through the Closing Date for each
such Property, or earlier termination of this Agreement, Contributor shall not
(a) remove any material assets, fixtures, equipment or personal property
therefrom (not including any of the foregoing items to the extent owned by
tenants or other occupants of the Properties) unless the same are replaced
with similar items of at least equal quality prior to the Closing, (b) modify
or amend in any material respect adverse to the landlord, extend, renew or
terminate any material Service Contract, Brokerage Agreement or existing
property management contracts (except as set forth in Section 7.08) or enter
into any new Service Contract (except as set forth in Section 7.02), Brokerage
Agreement or existing property management contracts, without the prior consent
of the Company, which consent shall not be unreasonably withheld, conditioned
or delayed, (c) accept rent from any tenant more than one (1) month in advance
(except as otherwise consistent with past practice), and (d) amend any Lease
in any material respect adverse to the landlord thereunder or enter into any
new or renewal lease, license or other agreement for other than customary and
market terms affecting the ownership or operation of all or any portion of any
Property, without the prior consent of the Company, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, Contributor
may amend any Lease, or execute any new or renewal lease, license or other
agreement to the extent consistent with (or more favorable to the landlord
than) the DYNA Models without the prior consent of the Company. Any Lease or
Service Contract submitted in writing by Contributor to the Company for
approval and not objected to in a writing given by the Company to Contributor
within five (5) Business Days after the Company's receipt thereof shall be
deemed approved by the Company. For purposes of this Agreement, the term
"Business Days" shall mean any day other than a Saturday, Sunday and bank
holiday in New York State; if any date on which a party hereunder is required
to perform or pay any amount is not a Business Day, then such date shall be
deemed to occur on the next immediately succeeding Business Day.
7.02. Certain Lease/Service Contract Actions. Notwithstanding anything to
the contrary in Section 7.01, prior to the applicable Closing, Contributor
may, without the Company's prior consent, terminate or modify any Lease or
Service Contract for a Property to be contributed or sold to the
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Company at such Closing by reason of a material default by the tenant (other
than a Major Tenant) or service provider, as applicable, beyond the expiration
of any applicable grace or cure period in the payment of rent or Additional
Rent, the performance of any other material obligation or the provision of
services; provided, however, that such termination or modification is in
accordance with the terms of such agreement or otherwise permissible pursuant
to this Agreement. In addition, prior to the applicable Closing, Contributor
may, with the Company's prior consent, which consent may be withheld in
Company's sole discretion, terminate or modify any Lease with a Major Tenant
by reason of a material default by such Major Tenant beyond the expiration of
any applicable grace or cure period in the payment of rent or additional rent
and/or the performance of any other material obligation. Any such termination
by Contributor prior to such Closing shall not affect the obligations of the
Company under this Agreement in any manner or entitle the Company to an
abatement of or credit against the applicable Cash Portion of the Sales Price
or give rise to any other claim on the part of the Company.
7.03. Certain Prohibited Actions. During the term of this Agreement,
subject to any expressly permissive provisions of this Agreement to the
contrary (including Section 18 of this Agreement), Contributor shall not (i)
unless the Property has been substituted for another property not otherwise
included in the Tranche 1, Tranche 2 or Tranche 3 Properties, as applicable,
and such Property is no longer intended by the parties to be transferred to a
Relevant Contributee pursuant to this Agreement, (A) enter into any written
agreement for the sale of such Property with any other party, (B) transfer,
mortgage or pledge any interest in any such Property, except as expressly
provided for herein with respect to Leases or in connection with any Permitted
Debt, (C) contract for or commence any material construction, capital
improvement or deferred maintenance at any such Property, unless required to
do so hereunder, under the Leases, if requested by any tenant at such tenant's
expense, as required by any law or as a result of an emergency (provided
Contributor shall provide notice thereof to the Company as soon as is
practical), (D) without the prior written consent of the Company, not to be
unreasonably withheld, conditioned or delayed, institute prior to the
applicable Closing Date, any proceeding or application for a reduction in the
real estate tax assessment of the Property or any other relief for any tax
year unless such taxes are being contested in good faith and either the taxes
being so contested have been paid in full if so required by the applicable
taxing authority or adequate reserves for the payment of such taxes have been
established by Contributor which in such instance shall not require the
Company's consent, and if Contributor receives any payment of a rebate of
taxes in its favor, Contributor will remit to any tenant of the Properties all
or any portion of such rebated sums which is owed to such tenant, or (ii)
enter into any employment contract, employee benefit plan, program, agreement
or arrangement of any kind, union contract or pension plan which will be
binding on the Company upon any Closing.
7.04. Maintenance of Insurance. Contributor shall maintain in full force
and effect until each applicable Closing all material insurance policies
applicable to the Properties or any replacements thereof, and shall renew
those expiring before such applicable Closing for no more than one year
without the Company's prior written consent, such that at all times from the
date hereof through the applicable Closing Date there shall be no lapse in
such insurance coverage as existed on the date hereof.
7.05. Required Tenant Estoppels; Contributor Estoppel. Prior to (but in
no event earlier than ninety (90) days prior to) the Tranche 1 Closing, the
Tranche 2 Closing and the Tranche 3 Closing, and as a condition to the Tranche
1 Closing, the Tranche 2 Closing and the Tranche 3 Closing, respectively,
Contributor shall provide to the Company estoppel certificates in the form of
Exhibit E annexed hereto ("Tenant Estoppels") from such tenants representing
at least seventy (70%) percent of total leased rentable square footage under
all of the Leases in effect as of the date hereof with respect to the Tranche
1 Properties, the Tranche 2 Properties and the Tranche 3 Properties and the
Tranche 1 Closing, the Tranche 2 Closing and the Tranche 3 Closing,
respectively. Notwithstanding the foregoing, if Contributor is unable to
obtain the Tenant Estoppels with respect to any Properties (other than one of
the Properties listed on Schedule 7.05 annexed hereto (the "Loan
Properties")), Contributor may deliver
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to the Company at the applicable Closing substitute estoppel certificates
signed by Contributor (each a "Contributor Estoppel") representing up to
fifteen (15%) percent of the total leased rentable square footage under all
Leases in effect as of the date hereof and the Company shall accept in lieu of
such Tenant Estoppel signed by the tenants such Contributor Estoppels. No
Substitute Ground Lessor Estoppel (as defined hereinafter) shall be counted
against the aforementioned fifteen percent (15%) threshold. In the event that
a tenant under a Lease subsequently provides the Company with a Tenant
Estoppel with respect to a Lease for which Contributor has given the Company a
Contributor Estoppel, the Company shall retain and rely on such Tenant
Estoppel, and the Contributor Estoppel given for such Lease will be of no
further force and effect from and after the date on which such Tenant Estoppel
is delivered to the Company, but only to the extent that such Tenant Estoppel
confirms the pertinent statements made in such Contributor Estoppel. Prior to
(but in no event dated earlier than ninety (90) days prior to the Tranche 2
Closing Date, or the Tranche 3 Closing Date, respectively). Notwithstanding
anything to the contrary in this Agreement, Contributor's obligations and
liabilities under this Agreement with respect to any Contributor Estoppel
shall not be subject to the Cap, the Basket or the Representation Survival
Period.
7.06. Landlord Estoppels. Prior to (but in no event dated earlier than
ninety (90) days prior to the applicable Closing Date) and as a condition to
the applicable Closing with respect to such Property, Contributor shall use
its commercially reasonable efforts to provide to the Company additional
estoppel certificates from each lessor under a Ground Lease in the form of
Exhibit F annexed hereto ("Landlord Estoppel"), provided, that, Contributor
shall be deemed to have complied with its obligations under this Section 7.06
to deliver any estoppel certificate or document so required hereunder from a
particular ground lessor, to the extent that such ground lessor delivers such
estoppel certificate or document in the form prescribed by the applicable
Ground Lease. If, notwithstanding such commercially reasonable efforts,
Contributor is unable to obtain any Landlord Estoppels in respect of any
Ground Leases, Contributor shall be required to deliver at the applicable
Closing a substitute estoppel certificate signed by Contributor (each a
"Substitute Ground Lessor Estoppel"). Notwithstanding anything to the contrary
in this Agreement, Contributor's obligations and liabilities under this
Agreement with respect to any Substitute Ground Lessor Estoppel shall not be
subject to the Cap, the Basket or the Representation Survival Period.
7.07. Required Consents. Prior to and as a condition to the Tranche 1
Closing, the Tranche 2 Closing and the Tranche 3 Closing, as applicable,
Contributor shall deliver to the Company any consents required to consummate
the transactions contemplated by this Agreement, which such consents are
listed on Schedule 7.07 annexed hereto (the "Required Consents").
7.08. Termination of Existing Property Management Agreements. Contributor
shall terminate, at Contributor's sole cost and expense, in writing all
existing property management contracts (a) for the Tranche 1 Properties, on or
prior to the Xxxxxxx 0 Xxxxxxx, (x) for the Tranche 2 Properties, on or prior
to the Tranche 2 Closing, and (c) for the Tranche 3 Properties, on or prior to
the Tranche 3 Closing.
7.09. Compliance With Permitted Debt Loan Documents. Until the applicable
Closing occurs, Contributor shall comply in all material respects with the
requirements, obligations and liabilities under any Permitted Debt Loan
Documents. Contributor agrees that subject to Section 13.01(j) and 13.07(a),
the Company shall only be responsible for (i) the principal amount of the
Notes and Mortgages outstanding as of the date of the respective Closing for
the Permitted Debt Properties, (ii) the payment of principal and interest on,
and the performance of all other obligations with respect to the period from
and after the applicable Closing under the Notes and Mortgages accruing from
and after the respective Closing for the Permitted Debt Properties and (iii)
any amounts with respect to the period prior to the applicable Closing for
which the Company receives a credit at such Closing (including, without
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limitation, accrued unpaid interest on any such Permitted Debt). This Section
7.09 shall survive each Closing.
7.10. Cooperation Regarding Financing. Contributor and the Relevant
Contributees shall cooperate, in all commercially reasonable respects, with
requirements of any lender regarding the Permitted Debt, provided that the
Company shall reimburse Contributor for any costs incurred in connection
therewith.
7.11. Assignment of Environmental Insurance Policy. Contributor shall use
commercially reasonable efforts to assign, indorse or otherwise transfer the
benefits of the environmental insurance policy (together with any amendments,
modifications, or supplements thereof, the "Environmental Insurance Policy")
relating to the Property located at 000 Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx
(the "225 High Ridge Property"), effective as of the applicable Closing, to
the Relevant Contributee.
Section 8. Destruction, Damage or Condemnation
8.01. (a) Casualty and Condemnation. If, at any time, an amount of the
Properties greater than or equal to (as reasonably determined by Contributor)
fifteen percent (15%) or more of the Total Consideration of the Properties to
be contributed to the Company is damaged or destroyed by fire or other
casualty ("Casualty") or is taken by eminent domain (or is the subject of a
pending condemnation proceeding that has not been reduced to judgment)
("Condemnation"), on an aggregate basis, then Contributor shall notify the
Company of such fact and, subject to Section 8.01(b) of this Agreement, the
Company shall have the right to terminate this Agreement with respect to all
remaining Tranches by giving written notice to Contributor, provided, however,
that the Company shall be deemed to have elected to proceed with the
acquisition if the Company fails to notify Contributor of its election within
ten (10) Business Days of receipt of such notice. In the case of Casualty, if
the Company elects, or is deemed to have elected, to proceed with the
acquisition of the Property or Properties, then the Company shall accept title
to the Property or Properties in their existing condition, in which event
Contributor shall, subject to the requirements of any financing encumbering
the Property or Properties, assign to the Company, at the applicable Closing,
all of Contributor's right, title and interest in and to the insurance
proceeds awarded or to be awarded to Contributor as the result of such damage
or destruction to such Properties and the Contributed Equity Value or Cash
Portion of Sales Price, as applicable, shall be reduced by the amount of any
deductible in connection with the subject casualty. In the case of
Condemnation, if the Company elects, or is deemed to have elected, to proceed
with the acquisition of the Property or Properties (other than the portion so
taken), then the Company shall accept title to the Property or Properties in
their existing condition, and Contributor shall, subject to the requirements
of any financing encumbering the Property or Properties, assign and turn over
to the Company at the applicable Closing, and the Company shall be entitled to
receive and keep, all amounts awarded or to be awarded as the result of the
taking of such Properties; it being understood and agreed that the Contributed
Equity Value or the Cash Portion of Sales Price of the Property or Properties
to be transferred to the Company pursuant to this Section 8.01(a), as
applicable, shall not be reduced by the amounts so awarded or anticipated to
be so awarded. Contributor shall not settle or compromise any insurance claims
or legal actions relating thereto without the Company's prior consent.
(b) Substitute Properties In Connection with Casualty and
Condemnation. Notwithstanding anything to the contrary contained herein, in
the event that a Casualty or Condemnation occurs, and such Casualty or
Condemnation would otherwise permit the Company or the other Relevant
Contributees to exercise termination rights in accordance with the provisions
of Section 8.01(a) of this Agreement, such event shall constitute a "CC
Substitution Event".
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Section 9. Additional Covenants of Contributor
9.01. Access. Without limiting the effect of the Company's waiver of a
due diligence period, Contributor covenants that between the date of this
Agreement and each Closing, subject to the limitations set forth in Section
1.04, Contributor shall allow the Company or the Company's agents,
representatives or employees reasonable access to the Properties, the Leases
and other documents required to be delivered under this Agreement upon
reasonable prior notice at reasonable times during normal business hours;
provided, however, that no drilling, test borings or other material
disturbance of any Property may be conducted by the Company for review of
soils, compaction, environmental, structural or other conditions without the
prior written consent of Contributor. Contributor (or its designee) shall have
the right, but not the obligation, to accompany the Company or its Agents
during such access to the Properties. The Company shall exercise reasonable
diligence not to disturb the use or occupancy or the conduct of tenant,
occupant or business at any Property. The Company hereby agrees to indemnify,
defend and hold harmless the Contributor and its Affiliates (and each of their
shareholders, members, officers, directors, employees, affiliates, agents,
successors and permitted assigns) from all loss, cost, expense, claims,
damages or liabilities resulting from any such entry or inspections performed
by the Company or its agents or representatives, including, without
limitation, any mechanic's or materialmen's liens relating to the activities
of such parties; such indemnity shall survive the termination of this
Agreement.
Section 10. Conditions Precedent to Closing
10.01. Conditions Precedent to Company Obligations. Subject to Section
10.03, the Relevant Contributees' obligations to effectuate the Tranche 1
Closing, the Tranche 2 Closing and the Tranche 3 Closing on the applicable
Closing Date are subject to the satisfaction of the following conditions
precedent (collectively, the "Contributor Closing Conditions") on or before
the applicable Closing (unless waived in whole or in part by the Relevant
Contributees in writing):
(a) Delivery of Closing Documents. Contributor shall have delivered
to or for the benefit of the Relevant Contributees, on or before the
applicable Closing Date, all of the documents (including, without limitation,
all Tenant Estoppels, Contributor Estoppels, Landlord Estoppels and Substitute
Landlord Estoppels required under this Agreement), other information and
payments, if any, required of Contributor in connection with such Closing
pursuant to Section 11.
(b) Representations and Warranties. All of Contributor's
representations and warranties made in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the
applicable Closing Date, subject in each case to modification of such
representations and warranties pursuant to Section 5.05 of this Agreement and
as may be otherwise expressly permitted by the terms of this Agreement. In
addition, Contributor shall have performed all of its covenants and other
obligations hereunder in all material respects.
(c) Required Consents. All Required Consents to be obtained or given
pursuant to the terms of any Lease or other material agreement affecting the
relevant Properties in connection with the consummation of the transaction
contemplated by this Agreement in respect of the Tranche 1 Closing, the
Tranche 2 Closing and the Tranche 3 Closing, as applicable, shall have been
obtained or given by Contributor.
(d) Brokerage Obligations. All obligations of Contributor under the
Brokerage Agreements with respect to the current, unexpired term of Leases
existing as of the date hereof relating to the Tranche 1 Properties, the
Tranche 2 Properties or the Tranche 3 Properties in connection with the
Tranche 1 Closing, the Tranche 2 Closing or the Tranche 3 Closing,
respectively, shall have been
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paid or credited with respect to such Closing for the account of the Company
against the applicable Cash Portion of the Sales Price, except for any
obligations and commissions becoming due and payable following the date of
this Agreement and (x) resulting from the exercise of renewal or expansion
options by tenants or (y) arising in connection with any new leases signed
after the date hereof in accordance with the terms of this Agreement.
(e) Other Material Conditions Precedent. Contributor shall have
satisfied or caused to be satisfied all other conditions precedent and
covenants with respect to the applicable Closing set forth in this Agreement
in all material respects or any such unsatisfied condition or covenant shall
have been waived in writing by the Relevant Contributees.
(f) Owner's Title Policies and Lender Policies. The Title Company
shall be prepared to issue the Title Policies and and lender title insurance
policies with respect to the Permitted Debt, including, without limitation,
all endorsements (including, without limitation, non-imputation endorsements)
and other affirmative coverage required by any lender or reasonably required
by the Company for all of the Tranche 1 Properties, the Tranche 2 Properties
or the Tranche 3 Properties, as applicable, in the name of the Relevant
Contributees, and any lender of the Company, subject only to the Permitted
Exceptions, in each case, subject to the terms and conditions set forth in
this Agreement.
(g) Termination of Management Contracts. All management contracts
affecting the Properties shall have been terminated, effective as of the
Closing, without liability to the Company.
(h) Closing of Relevant Underwriting Transactions. The transactions
under the Underwriting Agreement applicable to such Closing shall have closed.
(i) Listing of Australian Trust. All conditions and requirements for
the listing of Australian Trust on the Australian Stock Exchange and quotation
of its securities have been satisfied (other than administrative requirements
and acquisition of the Properties).
(j) Permitted Debt Documents. All documents and other instruments
and certificates (executed and acknowledged, where appropriate) required of
Contributor to comply with all the requirements of the Permitted Debt Holders
in order to obtain the Permitted Debt Consents.
(k) Identified Debt. Due authorization, execution and delivery of
the relevant Identified Debt documents by all parties involved other than the
Relevant Contributees.
(l) Assignment of Environmental Insurance Policy. Contributor shall
have assigned, indorsed or otherwise transferred over to the Relevant
Contributee the benefits of the Environmental Insurance Policy.
10.02. Conditions Precedent to Contributor Obligations. The Contributor's
obligations to effectuate the Tranche 1 Closing, the Tranche 2 Closing and the
Tranche 3 Closing on the applicable Closing Date are subject to the
satisfaction of the following conditions precedent on or before the applicable
Closing (unless waived in whole or in part by the Contributor in writing):
(a) Delivery of Closing Documents and Payments. The Company shall
have delivered to or for the benefit of the Contributor, on or before the
applicable Closing Date, all of the documents and payments, if any, required
of the Company in connection with such Closing pursuant to Section 12.
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(b) Conditions Precedent. The Company shall have satisfied or caused
to be satisfied all other conditions precedent and covenants with respect to
the applicable Closing Date set forth in this Agreement or any such
unsatisfied condition or covenant shall have been waived by Contributor.
(c) Representations and Warranties. All of the Company's and the
REIT's representations and warranties made in this Agreement shall be true and
correct in all material respects as of the date hereof and as of such Closing
Date. Moreover, the Company and the REIT shall have performed all of its
covenants and other obligations hereunder in all material respects.
(d) Intentionally Omitted.
(e) Permitted Debt Documents. To the extent the Permitted Debt
Consents are obtained, the Relevant Contributees and the REIT shall execute
and deliver instruments assuming the Permitted Debt and the Ground Leases for
the Tranche 1 Properties, including executing any replacement guarantees,
environmental indemnities, reserve agreements and any other loan documents
substantially equivalent to any of the existing and unexpired Continuing Loan
Documents reasonably requested by such Permitted Debt Holder as a condition to
releasing Contributor and its Affiliates from any liability thereunder in a
form and substance reasonably satisfactory to the applicable lender, including
the execution by the Company of a guaranty in favor of such Permitted Debt
Holder.
(f) Listing of Australian Trust. All conditions and requirements for
the listing of Australian Trust on the Australian Stock Exchange and quotation
of its securities have been satisfied (other than administrative requirements
and acquisition of the Properties).
(g) Closing of Relevant Underwriting Transactions. The transactions
under the Underwriting Agreement applicable to such Closing shall have closed.
(h) Unidentified Debt. The Company has entered into the Unidentified
Debt.
10.03. Effect of Contributor's Failure to Meet Conditions.
(a) If Contributor shall fail to satisfy any of the Contributor
Closing Conditions applicable to the Tranche 1 Closing, the Tranche 2 Closing
or the Tranche 3 Closing, as applicable, as of the applicable Closing Date,
then without limiting any other right or remedy to which the Relevant
Contributees may be entitled, the Company shall be entitled, subject to the
rights granted to Contributor described in the following sentence, to (i)
terminate this Agreement in its entirety, subject to the Surviving
Obligations, provided that the Relevant Contributees shall not have the right
to terminate this Agreement pursuant to this clause (i) until the Relevant
Contributees shall have terminated this Agreement pursuant to the following
clause (ii) with respect to one or more Properties, the individual or
aggregate value of which (based conclusively on the Total Consideration
allocated to such Property or Properties as set forth on the relevant
schedules), is greater than or equal to fifteen percent (15%) of the Total
Consideration of the Properties to be contributed (the "Condition Failure
Threshold"), (ii) terminate this Agreement with respect to the affected
Property (each such affected Property as to which this Agreement is
terminated, a "Failed Closing Condition Property") only (in which event (x)
this Agreement shall, without further action of the parties, be deemed to have
been automatically and ipso facto amended so as to eliminate such Failed
Closing Condition Property, (y) the applicable Tranche 1 Consideration,
Tranche 2 Consideration or Tranche 3 Consideration shall be reduced by the
portion thereof allocated to such Property, and the Cap shall be
proportionately reduced, and (z) this Agreement shall otherwise remain in full
force and effect). The foregoing rights granted to the Relevant Contributees
shall be subject to (a) Contributor's right, exercised by written notice on or
before the applicable Closing Date, to
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extend such Closing Date (and any scheduled Closing Dates to follow such
Closing Date, on a day for day basis) by up to thirty (30) days in order to
permit Contributor, using commercially reasonable efforts, to satisfy such
unsatisfied closing conditions, and (b) Contributor's right to terminate this
Agreement in its entirety from and after such time as the Condition Failure
Threshold is reached; provided, however, that Contributor shall be deemed to
have waived any of the foregoing rights that are not exercised in accordance
with the foregoing on or before the Closing Date (as same may have been
extended in accordance with the foregoing or any other provision of this
Agreement), subject to reinstatement in connection with any subsequent
Closings at which the Condition Failure Threhold is met or exceeded. Each
Failed Closing Condition Property not replaced with a Substitute Property
shall become an "Option Property" under the Option Agreement, and shall be
subject to the terms and conditions of the Option Agreement.
(b) Substitute Properties In Lieu of Closing Condition Failure.
Notwithstanding anything to the contrary contained herein, in the event that
any closing condition that Contributor intended or is otherwise obligated to
fulfill under this Agreement has not been fulfilled as of the applicable
Closing Date with respect to one or more Properties in accordance with the
terms and conditions of this Agreement, such event shall constitute a "Closing
Condition Substitution Event".
Section 11. Contributor's Closing Deliveries
11.01. Contributor Closing Deliveries. On the Tranche 1 Closing Date, the
Tranche 2 Closing Date and the Tranche 3 Closing Date, as applicable,
Contributor shall deliver (to the extent not already delivered) the following
to the Company:
(a) Leases, Ground Leases, Similar Documents. Originals of all
Leases, Ground Leases, and other similar documents relating to the Properties
and in effect as of such Closing Date, to the extent in Contributor's
possession or subject to its control; provided, however, that Contributor
shall retain all the foregoing documents during the term of and in accordance
with the Services Agreement.
(b) Security Schedule. A Schedule of all cash security and similar
deposits, held by or on behalf of Contributor on the Closing Date under the
Leases.
(c) Rent Rolls. Updated Rent Rolls, dated not more than thirty (30)
days prior to the applicable Closing Date and setting forth all arrearages in
rents.
(d) Service Contracts. All original Service Contracts or in lieu of
originals, complete certified copies thereof, which are in effect on the
Closing Date and which are assignable by Contributor; provided, however, that
Contributor shall retain all Service Contracts during the term of the Services
Agreement.
(e) Assignment of Service Contracts, Insurance Policies,
Certificates, Permits and Other Documents. An assignment to the Company and/or
the SPE Entities of all of the interests of Contributor in the Service
Contracts, insurance policies (unless provided for in Section 2.01(f)),
certificates, permits and other documents to be delivered to the Company at
the Closing which are then in effect and are assignable by Contributor.
(f) Transferable Insurance Policies. With respect to all insurance
policies to be transferred from Contributor to the Company (as distinguished
from coverage to be obtained by Contributor or the Company in lieu thereof),
original insurance policies, with the Company added on each as an additional
insured, with respect to which premium are to be apportioned or, if
unobtainable, true
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copies or certificates thereof; provided, however, that Contributor shall
retain possession of all such policies during the terms of the Services
Agreement.
(g) Certificates, Licenses, Permits, Authorizations and Approvals.
All certificates, licenses, permits, authorizations and approvals issued for
or with respect to the Properties by any Governmental Authority having
jurisdiction thereover to the extent same are transferable to the Company;
provided, however, that Contributor shall retain all the foregoing documents
during the term of the Services Agreement.
(h) FIRPTA. A certification of non-foreign status for Owner
Operating Partnership and each Subsidiary, in form required by the Code
Withholding Section, signed under penalty of perjury. Contributor understands
that such certification will be retained by the Company and will be made
available to the Internal Revenue Service on request.
(i) Tenant Notices. An original letter executed by Contributor or by
its agent, advising the tenants of the transfer of the Properties to the
Company and directing that rents and other payments thereafter be sent to the
Company or as the Company may direct.
(j) Authority Documents. Corporate resolutions, certificates of good
standing, incumbency certificates and other evidence of authority within
respect to Contributor, duly executed where applicable.
(k) Possession. Possession of the Properties in the condition
required by this Agreement, subject to the Leases and Ground Leases, and keys
therefor; provided, however, that Contributor shall retain all keys during the
term of the Services Agreement.
(l) Landlord Consents. Original Landlord Consents, if any.
(m) Tenant Estoppels; Landlord Estoppels. All original Tenant
Estoppels, and any Contributor Estoppels in lieu thereof, obtained in
accordance with Section 7.05.
(n) Required Consents. All original Required Consents.
(o) Landlord Estoppels. All Landlord Estoppels or any Substitute
Landlord Estoppels in lieu thereof in accordance with Section 7.06.
(p) Deeds. executed and acknowledged deeds conveying to the Company
fee simple title to the Properties (other than those Properties transferred by
an entity sale pursuant to Section 19 of this Agreement) owned by Contributor
in fee simple title, subject to the Permitted Exceptions.
(q) Assignment of Ground Leases. Executed and acknowledged
assignments and assumptions of ground leases (collectively, the "Assignments
of Ground Leases"), assigning and transferring to the Company, as applicable,
all right, title and interest of Contributor in and to, and all post-Closing
obligations of the lessee under, all Ground Leases affecting the Properties
(other than those Properties transferred by an entity sale pursuant to Section
19 of this Agreement).
(r) Assignment of Leases. Executed and acknowledged assignments and
assumptions of leases (collectively the "Assignments of Leases"), assigning
and transferring to the Company, as applicable, all right, title and interest
of Contributor in and to, and all post-Closing
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obligations of the lessor under, all Leases affecting the Properties (other
than those Properties transferred by an entity sale pursuant to Section 19 of
this Agreement).
(s) Bills of Sale. Executed bills of sale transferring to the
Company, as applicable, all personal property owned by Contributor and located
at or attached to the Properties (other than those Properties transferred by
an entity sale pursuant to Section 19 of this Agreement).
(t) Required Forms. Transfer tax returns, certificates and/or any
other document or instrument required by any federal, state or local
government or municipality to transfer or convey the Properties or to record
any deed or assignment of lease, including, without limitation, any forms
relating to environmental matters required to be filed in connection with the
transfer of the Properties located in Connecticut (collectively, the "Required
Forms").
(u) Services Agreement. An executed Services Agreement.
(v) Substitute Property Documentation. Any documentation reasonably
requested by the Company, any lender or the Title Company in connection with a
Substitute Property.
(w) Agreements. Counterparts of (v) the Option Agreement (the
"Option Agreement") in the form attached hereto as Exhibit N, (w) this
Agreement, (x) the LLC Agreement, (y) the Portfolio Services Agreements, to
the extent applicable to the Tranche 1 Closing, duly authorized, executed and
delivered by all of the parties thereto, and (z) the Tax Protection Agreement,
duly authorized, executed and delivered by all of the parties thereto. The
foregoing, collectively, the "Transaction Agreements".
(x) Excluded Property License Agreements. Counterparts of the
Excluded Property License Agreements, duly authorized, executed and delivered
by the Contributor.
(y) Estoppels. Contributor shall have delivered to or for the
benefit of the Company the requisite Tenant Estoppels, Contributor Estoppels,
Landlord Estoppels, and/or Substitute Ground Lessor Estoppels required under
Sections 7.05 and 7.06.
(z) Other Documents. Any other documents required by this Agreement
to be delivered by Contributor (executed and acknowledged where appropriate)
or otherwise necessary or reasonably required to consummate this transaction
as contemplated herein.
11.02. Delivery at Appropriate Closing; Modified Deliverables Required By
Third Parties; Modification of Deliveries Regarding Entity Transfers.
Notwithstanding the foregoing, to the extent that any of the items to be
delivered to the Company pursuant to Section 11.01 relate to Tranche 2
Properties or Tranche 3 Properties (and do not relate to Tranche 1 Properties)
such items, documents or information shall not be required to be delivered by
the Company at the Tranche 1 Closing and shall instead be delivered by the
Company at the Closing to which such items, documents or information relate.
If any third party with an interest in this transaction, including, without
limitation, any lender or the Title Company, reasonably requires that
additional or updated items, documents or information ((x) which updated or
additional items, documents or information are customary for transactions of
this type and (y) which additional items do not impose any immaterial
additional obligations or liabilities on Contributor) be provided at the
Tranche 2 Closing or the Tranche 3 Closing, then in either case such new,
executed, modified, altered, amended or changed documents or information shall
be delivered to the Company on or prior to the Tranche 2 Closing Date in
connection with the Tranche 2 Properties and on or prior to the Tranche 3
Closing Date in connection with the Tranche 3 Properties. In the event that an
SPE Entity is the Relevant Contributee hereunder, delivery to the Company
shall satisfy the delivery
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requirements hereunder and the deliverables required under Section 11.01 shall
be appropriately modified to reflect the intended contribution to such
Relevant Contributee. The deliveries required under this Section 11 shall be
subject to modification pursuant to Section 20 of this Agreement in connection
with a transfer of entity interests in lieu of an asset transfer.
Section 12. The Company's Closing Deliveries
12.01. Company Deliveries. On the Tranche 1 Closing Date, the Tranche 2
Closing Date and the Tranche 3 Closing Date, as applicable, Company shall
deliver (to the extent not already delivered) the following to the
Contributor:
(a) LLC Agreement. The LLC Agreement executed by the Company and the
REIT.
(b) Assumption of Service Contracts, Insurance Policies,
Certificates, Permits and Other Documents. An executed assumption by the
Company and the SPE Entities, as applicable, of all of the interests of
Contributor in those Service Contracts, insurance policies, certificates,
permits and other documents to be delivered to the Company at the Closing
which are then in effect and are assignable by Contributor.
(c) Portfolio Services Agreement. Executed Portfolio Services
Agreements.
(d) Assignments of Ground Leases and Leases. Executed and
acknowledged Assignments of Ground Leases and the Assignments of Leases.
(e) Documents Required By Permitted Debt Holders. All documents
(including assignment and assumption agreements) and other instruments and
certificates (executed and acknowledged, where appropriate) required of the
Company to comply with all the requirements of the Permitted Debt Holders in
order to assume the Permitted Debt and obtain the Permitted Debt Consents,
together with such other documents described in Section 10.02(e) of this
Agreement;
(f) Required Forms. Executed and acknowledged Required Forms to the
extent a purchaser is required to execute and acknowledge the same.
(g) Interests. The Interests in accordance with this Agreement and
the LLC Agreement.
(h) Applicable Cash Portion of Sales Price. On the Tranche 1 Closing
Date, the Tranche 1 Cash Portion of the Sales Price (plus or minus net
adjustments and prorations pursuant to this Agreement), on the Tranche 2
Closing Date, the Tranche 2 Cash Portion of the Sales Price (plus or minus net
adjustments and prorations pursuant to this Agreement), and on the Tranche 3
Closing Date, the Tranche 3 Cash Portion of the Sales Price (plus or minus net
adjustments and prorations pursuant to this Agreement) payable to Contributor
on the Tranche 3 Closing Date.
(i) Assumption and Indemnity Relating To Ground Leases. An
assumption by the Company or an SPE Entity (as applicable), of, and an
indemnity from the Company in favor of Contributor (and/or its Affiliates or
affiliates, but only to the extent they are signatories under any such
indemnity and/or guaranty), in a form and substance reasonably satisfactory to
Contributor, with respect to, any guarantees and related documents under the
Ground Leases from which Contributor (and/or any of its Affiliates and such
other affiliates) is not released from liability from and after the Closing
Date, for any Losses arising on or after the applicable Closing Date.
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(j) Intentionally Omitted.
(k) PHJW Opinion. An opinion from Paul, Hastings, Xxxxxxxx & Xxxxxx
LLP, in the form attached hereto as Exhibit I.
(l) Agreements. Counterparts of the Transaction Agreements (as
defined in Section 11.01 of this Agreement), duly authorized, executed and
delivered by all of the parties thereto except the Relevant Contributees.
(m) Debt Releases. Executed original Debt Release with respect to
each applicable Permitted Debt Holder.
(n) Excluded Property License Agreements. Counterparts of the
Excluded Property License Agreements, duly authorized, executed and delivered
by the Relevant Contributees.
(o) Other Documents. Any other documents required by this Agreement
to be delivered by the Company (executed and acknowledged, where appropriate)
or otherwise necessary or reasonably required to consummate this transaction
as contemplated herein.
In the event that an SPE Entity is the Relevant Contributee hereunder,
delivery to the Company shall satisfy the delivery requirements hereunder and
the deliverables required under Section 12.01 shall be appropriately modified
to reflect the intended contribution to such Relevant Contributee. The
deliveries required under this Section 12 shall be subject to modification
pursuant to Section 20 of this Agreement in connection with a transfer of
entity interests in lieu of an asset transfer.
Section 13. Apportionments; Closing Costs
13.01. General Apportionments. The following apportionments shall be made
between the parties at the appropriate Closing as of 11:59 p.m. on the day
prior to the applicable Closing Date:
(a) rent payments (including prepaid rents) and Additional Rent
actually received by Contributor under the Leases, excluding, however, any
"advance rent" paid in advance by tenants under such Leases in respect of the
last month of the term of such Leases (such advance rent, the "Advance Rent").
(b) to the extent not paid directly by tenants under the Leases,
water charges, sewer rents, other utility charges and vault charges, if any,
on the basis of the fiscal period for which assessed, except that if there is
a water meter at the Properties, apportionment at the Closing shall be based
on the last available reading, subject to adjustment after the Closing when
the next reading is available.
(c) value of fuel stored at the Properties at the price then charged
by Contributor's supplier, including any taxes.
(d) charges under transferable Service Contracts and other
transferable agreements pertaining solely to the Properties or permitted
renewals or replacements thereof.
(e) permitted administrative charges, if any, on tenants' security
deposits.
(f) insurance premiums and transfer premiums on transferable
insurance policies or permitted renewals thereof.
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(g) insurance premiums on insurance policies that are not
transferred to the Company but under which coverage is provided to the Company
from and after the Closing.
(h) rent under all Ground Leases.
(i) to the extent not paid directly by tenants to taxing authorities
pursuant to the Leases, real estate taxes and personal property taxes for the
current fiscal year.
(j) outstanding leasing commissions, tenant improvement obligations,
free rent and other concessions of the landlord under any new or renewal
leases entered into after the date hereof pursuant to Section 7.01 (such
apportionment to be made based on the fixed term of such new or renewal
lease).
(k) all interest accrued on the Permitted Debt, but not paid as of
the applicable Closing Date.
(l) Such other items customarily apportioned in real estate closings
of commercial properties in the New York tri-state area.
13.02. Adjustment of Taxes. The adjustment of real estate and personal
property taxes shall be made on the basis of presently available evidence of
such taxes, subject to adjustment by payment from Contributor to the Company,
or the Company to Contributor, whichever is applicable, after the applicable
Closing due to any change in assessment, applicable rate or other reason.
Notwithstanding the foregoing, all or any portion of any special assessments,
that are a lien as of such Closing and that are not otherwise recoverable from
tenants under the Leases shall be paid by Contributor. This Section 13.02
shall survive each Closing and/or sooner termination of this Agreement.
13.03. Credits. The following adjustments to the Cash Portion of the
Sales Price shall be made between the parties at each Closing:
(a) To the extent not assigned or otherwise transferred to the
Relevant Contributees, the Company and the SPE Entities, as applicable, shall
be credited and Contributor charged with security deposits (together with any
interest accrued thereon) or advance rentals made by tenants under the Leases,
the Ground Leases and any additional Leases entered into by Contributor
pursuant to Section 7.01.
(b) To the extent not assigned or otherwise transferred to the
Relevant Contributees, Contributor shall be credited and the Company and the
SPE Entities, as applicable, charged with deposits under any Service Contracts
assigned to the Company at the Closing, and any other transferable deposits to
be transferred in connection with the transactions contemplated hereunder.
(c) The Company and the SPE Entities shall be credited, and
Contributor charged with, all unpaid leasing commissions and tenant
improvement obligations, to the extent applicable to Leases in effect as of
the date hereof (but not including any commissions that may result from the
exercise after the Closing of renewal or expansion options by tenants).
(d) The Contributor shall be credited and the Company and the SPE
Entities, as applicable, charged with (i) fees, charges and reserves under
applicable Permitted Debt and (ii) escrow deposits maintained under applicable
Permitted Debt (plus accrued interest thereon).
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(e) The Contributor shall be credited, and the Company and the SPE
Entities, as applicable, charged with, amounts paid or payable (including any
bonds or security deposits) under telephone and telex contracts and contracts
for the supply of heat, steam, electric power, gas, lighting and any other
utility service, with Contributor receiving a credit for all deposits, if any,
made by Contributor as security under any such public service contract(s) if
the same is transferable and provided such deposit remains on deposit for the
benefit of the Company. (In addition, the parties agree to work together in
good faith to determine, before the expiration of the applicable Closing Date,
the manner in which other bonds and security deposits with respect to the
Properties will be handled from and after the applicable Closing. Without
limiting the foregoing, the parties will use good faith efforts to agree as to
(i) whether the Company (or the applicable SPE Entity) should substitute its
own bonds and/or security deposits for those previously posted by Contributor,
and (ii) which party shall have responsibility for the cost of any such bond
and their respective periods of responsibility therefor.
(f) As of the applicable Closing Date with respect to the 225 High
Ridge Property, the Relevant Contributee shall be credited, and Contributor
charged with, an amount equal to Eight Hundred Seventy Five Thousand and
00/100 Dollars ($875,000.00) (the "Rent Credit"), payable in respect of the
free rent or reduced rent concession period (the "Free Rent Period") described
in that certain Lease dated May 11, 2005 by and between 225 High Ridge
Venture, as landlord, and Synapse Group, Inc., as tenant, commencing on May 1,
2007 for certain space in the building located at 000 Xxxx Xxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxxx (as amended, modified, restated and supplemented from
time to time hereafter, the "Synapse Lease"), provided that if, as of the
scheduled commencement date of the Free Rent Period or at any time prior to
the expiration of the Free Rent Period, either (x) the Synpase Lease has been
terminated or is otherwise not in full force and effect or such tenant is not
entitled to some or all of such Free Rent Period or (y) the Synpase Lease
shall be amended, modified or supplemented in any manner that affects the Free
Rent Period, then the Relevant Contributee shall promptly notify Contributor
of such occurrence and shall promptly wire the Rent Credit (which Rent Credit
shall be equitably prorated among the relevant parties, if necessary, to
reflect the occurrence and timing of the events described in the preceding
clauses (x) and (y)) in accordance with any wiring instructions provided by
Contributor in connection with such notice. The Company and such Relevant
Contributee shall be jointly and severally liable with respect to the return
of the Rent Credit in accordance with this Section. This Section shall survive
the Closing or earlier termination of this Agreement.
(g) As of the applicable Closing Date with respect to the 000 Xxxx
Xxxxx Property, the Contributor shall be credited, and the Relevant
Contributee charged with, an amount equal to Fifty Seven Thousand and 00/100
Dollars ($57,000.00), payable in respect of certain cost savings realized or
to be realized by the Relevant Contributee in connection with issuance of a
zoning endorsement in respect of the 225 High Ridge Property.
13.04. Tenant Arrearages. If any tenant is in arrears in the payment of
rent or Additional Rent on the Closing Date for which the Property affected by
such tenant is being contributed or sold, rents received from such tenant
after such Closing shall be applied in the following order of priority:
(a) first to the month in which such Closing occurred;
(b) second to the month prior to the Closing;
(c) third to the months after the Closing; and
(d) fourth to any month or months prior to the Closing.
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If rents or Additional Rents or any portion thereof received by Contributor or
the Company after such Closing are payable to the other party by reason of
this allocation, the appropriate sum, less a proportionate share of any
reasonable attorneys' fees, out-of-pocket costs and expenses of collection
thereof, shall be promptly paid to the other party, which obligation shall
survive such Closing.
13.05. Additional Rent. If any tenant is required to pay percentage rent,
escalation charges for real estate taxes, common area maintenance charges,
operating expenses, cost-of-living adjustments or other charges of a similar
nature ("Additional Rent"), and any Additional Rent is collected by the
Company or Contributor on behalf of the Company after the Closing for the
contribution or sale of the Property affected by such tenant which accrued
prior to such Closing and was not otherwise adjusted, then the Company shall
promptly pay Contributor's proportionate share thereof to Contributor, less
any reasonable attorneys' fees, and any other reasonable out-of-pocket costs
and expenses of collection thereof, which obligation shall survive such
Closing.
13.06. Closing Statements. On or before each Closing, Contributor will
prepare and the Company shall review and approve (which approval shall not be
unreasonably withheld or delayed) a final closing statement (the "Final
Closing Statement") setting forth the final determination of all open items
and other apportionments estimated as of each applicable Closing to be
included on the closing statements for each Closing and any re-adjustment
required to "true up" any amounts adjusted under Section 13.01 (including,
without limitation, Additional Rent). The net amount due to Contributor or the
Company, if any, by reason of adjustments to the closing statement as shown in
the Final Closing Statement, shall be paid or credited to the applicable party
at Closing. The adjustments, prorations and determinations agreed to by
Contributor and the Company under this Section 13.06 shall be conclusive and
binding on the parties hereto. Notwithstanding the foregoing, if at any time
within the three hundred sixty five (365) day period following the Tranche 1
Closing, the Tranche 2 Closing or the Tranche 3 Closing, as applicable (each
such period being referred to herein as a "Post-Closing Adjustment Period"),
the amount of any item to be apportioned or credited pursuant to this
Agreement shall prove to be incorrect (whether as a result in an error in
calculation or a lack of complete and accurate information as of the
applicable Closing), the party in whose favor the error was made shall
promptly pay to the other party the sum necessary to correct such error upon
receipt of proof of such error, provided that such proof is delivered to the
party from whom payment is requested within the applicable Post-Closing
Adjustment Period. In order to enable Contributor to determine whether any
such delayed adjustment is necessary, the Relevant Contributee(s) shall
provide to Contributor such information as Contributor shall reasonably
request during the Post-Closing Adjustment Period in order to confirm or
finalize closing adjustments hereunder. The provisions of this Section 13.06
shall survive each Closing and not be merged therein.
13.07. Subject to the other provisions of this Section 13, the following
shall apply to closing costs:
(a) Company Closing Costs. At the applicable Closing, the Company
shall pay (x) all mortgage recording taxes and (y) any other cost or expense
set forth in this Agreement explicitly to be paid by the Company.
(b) Contributor Closing Costs. At the applicable Closing,
Contributor shall pay (i) all recording fees on any document recorded pursuant
to this Agreement to discharge Liens and encumbrances which are not Permitted
Exceptions in accordance with the terms and provisions hereof, (ii) all costs
incurred in obtaining the Required Consents (other than costs described in
Section 13.07(a)(viii)), the Tenant Estoppels, and any Contributor Estoppels
in lieu thereof per Section 7.05, and all other required estoppel certificates
per Section 7.06, and (iii) any other cost or expense set forth in this
Agreement explicitly to be paid by Contributor.
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(c) REIT Closing Costs. At the applicable Closing, the REIT shall
pay (i) all costs for any document to be recorded pursuant to this Agreement
or the LLC Agreement, (ii) the cost of the title examination, the Title
Commitments and the title insurance premiums, including any extended coverage
and endorsements, incurred in connection with the issuance of the Title
Policies and any same costs associated with any lender title insurance
policies, (iii) the cost of any Survey, (iv) any escrow fee which may be
charged by the Title Company, (v) the cost of Phase I environmental site
assessments, other environmental reports and engineering reports, (vi) the
cost of appraisals, (vii) all prepayment premiums and penalties on any loan
encumbering any of the Properties required to be paid by any party hereto at
any Closing, (viii) in each case, all costs charged by the Permitted Debt
Holders, or in connection with the initial financing of the Permitted Debt and
assumption of such Permitted Debt (including, without limitation, their legal
costs, loan assumption fees, bank fees, title insurance endorsements, but
excluding mortgage recording tax), (ix) all costs associated with the transfer
of insurance policies, and (x) subject to Section 20, all of the state and
local transfer taxes, documentary stamp tax or similar tax required to be paid
in the States, counties, cities and/or towns in which the Properties are
located.
(d) Other Costs and Expenses. Except as expressly set forth herein,
each party shall pay its own attorney's fees and all of its other costs and
expenses.
Section 14. Failure of Contributor or the Company to Perform
14.01. Company Default/Breach Prior to Closing. If, prior to any of the
Tranche 1 Closing, the Tranche 2 Closing or the Tranche 3 Closing, the Company
and/or the REIT shall materially default in the performance of any of its
obligations under this Agreement, or shall materially breach any of its
representations, warranties or covenants contained in this Agreement, and such
default or breach shall remain uncured for ten (10) days after the Company
receives written notice thereof from Contributor, then (a) if such act or
omission occurred prior to the Tranche 1 Closing, Contributor, as its sole and
exclusive remedy, may choose, in its absolute discretion, to either (i)
terminate this Agreement and recover from the Company and/or the REIT the
Contributor's actual out of pocket costs incurred in connection with this
Agreement and the transactions contemplated herein or (ii) commence an action
against any such party for specific performance of such obligations hereunder
(subject to all of the terms of this Agreement), and (b) if such act or
omission occurred after the Tranche 1 Closing but before the Tranche 2 Closing
or Tranche 3 Closing, Contributor, may choose, in its absolute discretion, to
either (i) commence an action against any such party for specific performance
of such obligations hereunder (subject to all of the terms of this Agreement),
or (ii) terminate this Agreement and seek liquidated damages hereunder from
the Company and/or the REIT in an amount of five percent (5%) of the Total
Consideration that would otherwise be due with respect to the remaining
terminated Tranches. If Contributor elects to terminate this Agreement
pursuant to this Section 14.01(a), this Agreement shall be of no further force
and effect except for the Surviving Obligations, which shall remain in effect
as provided herein.
14.02. Contributor Default/Breach Prior to Closing. If, prior to any
Closing, the Contributor shall materially default in the performance of any of
its obligations under this Agreement, or shall materially breach any of its
representations, warranties or covenants contained in this Agreement, and such
default shall remain uncured for ten (10) days after the Contributor receives
written notice thereof from the Company, then the Relevant Contributees may
choose, in their sole discretion, to either (i) commence an action against any
such party for specific performance of such obligations hereunder (subject to
all of the terms of this Agreement), or (ii) terminate this Agreement and
recover from the Contributor the Relevant Contributees' actual, out of pocket
costs incurred in connection with this Agreement and the transactions
contemplated herein. If the Relevant Contributees elect to terminate this
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Agreement pursuant to this Section 14.01(a), this Agreement shall be of no
further force and effect except for the Surviving Obligations, which shall
remain in effect as provided herein.
14.03. Termination of Agreement Regarding Aggregation of Title, Survey,
Closing Condition, Condemnation and Casualty Events. Notwithstanding anything
to the contrary herein, if at any time, or from time to time, the sum of the
Total Consideration allocated to the Affected Properties in connection with
the aggregate of the Defect Substitution Events, Closing Condition
Substitution Events and CC Substitution Events affecting the Affected
Properties outstanding at such time exceeds fifteen percent (15%) of the Total
Consideration (with the Total Consideration determined as of the date
hereof)(the "TSSC Threshold"), and at such time the substitution procedures of
Section 2.01(f) have not been invoked with respect to some or all of the
Affected Properties, then both the Contributor and the Relevant Contributees
shall have the continuing right to terminate this Agreement by written notice
to the other as of the date of such notice, provided, however, that such
terminating party shall not have the right to terminate this Agreement
pursuant to this Section 14.03 until the expiration of any applicable notice
and cure and expiration of any rights to extend the applicable Closing granted
with respect to the non-terminating party. For purposes of clarity, the
parties acknowledge and agree that substitution of Substitute Property for
Affected Property (and the pending substitution of Substitute Property for
Affected Property, provided the substitution procedures were instituted in a
timely manner and are being diligently pursued in accordance with the terms
and conditions of this Agreement) in accordance with this Agreement shall not
count against the TSSC Threshold with respect to the portion of Total
Consideration applicable to such Affected Property.
Section 15. Broker
15.01. Broker Representation and Warranty; Indemnification. Contributor
and the Company mutually represent and warrant to each other that neither
Contributor nor the Company knows of, or has dealt with, any broker, finder,
salesperson or similar agent who has claimed or may have the right to claim a
commission in connection with this transaction. Contributor and the Company
shall, subject to the Cap, indemnify and defend each other against any costs,
claims or expenses, including reasonable attorneys' fees, arising out of the
breach on their respective parts of the representations and warranties or
agreements contained in this Section 15.01. The representations and
obligations under this Section 15.01 shall survive the Closing or, if the
Closing does not occur, the termination of this Agreement.
Section 16. Notices
16.01. Method of Notification and Delivery. Any notices, demands,
consents, approvals and other communications ("Notice") provided for in this
Agreement or given in connection with this Agreement shall be given in writing
by (a) personal delivery, (b) reputable overnight delivery service with proof
of delivery, (c) United States Mail, postage prepaid, registered or certified
mail, return receipt requested, deposited in a United States post office or a
depository for the receipt of mail regularly maintained by the post office, or
(d) legible facsimile transmission sent to the intended addressee at the
address set forth below, or to such other address or to the attention of such
other person as the addressee shall have designated by giving at least ten
(10) days written notice sent in accordance herewith, and Notice shall be
deemed to have been given by (i) personal delivery, when received as evidenced
by an affidavit of the person making such delivery, (ii) in the case of
expedited delivery service, next Business day following the date sent and
(iii) mail, then received by the addressee on the date received as evidenced
by a return receipt. When received in the case of facsimile transmission, as
of the date of the facsimile transmission provided that an original of such
facsimile is also sent to the intended addressee by means described in clauses
(a) or (b) above. The inability to make delivery because of change of address
of which notice was given or by reason of rejection or refusal to accept
delivery of any Notice shall be
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deemed to be receipt of the Notice as of the date of such inability to deliver
or rejection or refusal to accept. Unless changed in accordance with the
preceding sentence, the addresses for notices given pursuant to this Agreement
shall be as follows:
If to Contributor:
c/o Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxx 000X
Xxxxxxxx, Xxx Xxxx 00000
Attn: General Counsel
Fax: 000-000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Fax: 000-000-0000
Telephone: 000-000-0000
Email: XXXxxxxxx@xxxx.xxx
If to the Company:
c/o Reckson Associates Realty Corp.
000 Xxxxxxxxxxx Xxxx
Xxxxx 000X
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx, Vice President, Legal-Corporate
Fax: 000-000-0000
Telephone: 000-000-0000
Email: XXxxxxxx@Xxxxxxx.xxx
with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: 000-000-0000
Telephone: 000-000-0000
Email: Xxxxxxxxxxxxxxxx@xxxxxxxxxxxx.xxx
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Section 17. Miscellaneous Provisions
17.01. Assignment or Transfer. Subject to Section 18.01 of this
Agreement, no party hereto shall assign this Agreement or its rights hereunder
without the prior written consent of the other parties hereto. Notwithstanding
anything herein to the contrary, the Company shall have the right to instruct
Contributor to convey title to any of the Properties to any wholly-owned
subsidiary of the Company designated in writing by the Company at least five
(5) Business Days prior to the applicable Closing, and (ii) Contributor may,
without the Company and/or the REIT's consent, assign all or any part of its
rights hereunder to an Affiliate thereof.
17.02. Integration Clause. This Agreement embodies and constitutes the
entire understanding between the parties with respect to the contribution and
sale of the Properties to the Company, and all prior agreements,
understandings, representations and statements, oral or written, are merged
into this Agreement.
17.03. Amendments. Neither this Agreement nor any provision hereof may be
waived, modified, amended, discharged or terminated except by an instrument
signed by both parties hereto, and then only to the extent set forth in such
instrument.
17.04. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York without regard to its
principles of conflicts of law.
17.05. Captions. The captions in this Agreement are inserted for
convenience of reference only and in no way define, describe or limit the
scope or intent of this Agreement or any of the provisions hereof. Unless
otherwise specified, all references to Sections, sections or provisions in
this Agreement refer to such Sections, Section or provisions as set forth
herein.
17.06. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
17.07. Masculine and Feminine Terms. As used in this Agreement, the
masculine shall include the feminine and neuter, the singular shall include
the plural and the plural shall include the singular, as the context may
require.
17.08. Schedules and Riders. If the provisions of any Schedule or rider
to this Agreement are inconsistent with the provisions of this Agreement, the
provisions of such Schedule or rider shall prevail.
17.09. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute a single instrument.
17.10. No Recordation. This Agreement shall not be recorded.
17.11. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted
assigns, and no other person or entity shall be entitled to rely upon or
receive any benefit from this Agreement or any term hereof.
17.12. No Offer. The submission of this Agreement for examination does
not constitute an offer by or to either party. This Agreement shall be
effective and binding only after due execution and delivery by the parties
hereto.
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17.13. Jurisdiction; Service of Process. The parties hereto each hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of
any judgment in respect hereof, to the non-exclusive general jurisdiction of
the courts of the State of New York, the federal courts of the United States
of America for the Southern District of New York, and appellate courts from
any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and, to the extent permitted by law, waives any objection that it
may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding brought in an inconvenient court
and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to its address set
forth hereunder; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction in the continental United States.
17.14. Further Assurances; Cooperation Regarding Consents. Subject to the
terms and conditions herein provided, each of the parties hereto shall execute
and deliver such documents as the other party shall reasonably request in
order to consummate and make effective the transactins contemplated herein;
provided, however, that the execution and delivery of such documents by such
party shall not result in any additional liability or cost to such party. Each
of the parties shall use commercially reasonable efforts to cooperate in order
to obtain any Required Consents.
Section 18. Certain Tax Matters
18.01. Like-Kind Exchanges. The Company and Contributor acknowledge and
agree that Contributor may elect no later than five (5) days prior to any
Closing Date, to execute and assign to an exchange facilitator, qualified
intermediary, exchange accommodation titleholder or similar entity its
interest in, a separate agreement of sale with respect to any of the Tranche 2
Properties or the Tranche 3 Properties specified by Contributor (the "Excluded
Properties") to facilitate a like-kind exchange of the Excluded Properties in
a transaction or transactions which are intended to qualify for treatment as a
tax-deferred like-kind exchange pursuant to the provisions of Section 1031 of
the Internal Revenue Code (a "1031 Exchange"). Each Excluded Property shall no
longer be subject to the provisions of this Agreement, and the Tranche 2 or
Tranche 3 Consideration and the Tranche 2 or Tranche 3 Cash Portion of the
Sales Price shall be reduced by the Contributed Equity Value of each Excluded
Property. Subject to Section 19, Contributor's election to proceed with a 1031
Exchange of the Excluded Properties may include transfers of equity interests
in entities, the merger and/or consolidation of entities and/or the creation
of other entities such as single member limited liability companies. If
Contributor so elects, the Company shall cooperate (at no expense or liability
to it) in effectuating the 1031 Exchange of the Excluded Properties and in
implementing any such assignment and/or execution of any documentation,
provided that (i) Contributor shall indemnify the Company for all direct costs
and expenses incurred by the Company in connection with an intended or
effectuated 1031 Exchange of an Excluded Property, (ii) the Company shall not
be obligated to take title to any other property, nor shall this Section 18.01
affect in any manner Contributor's obligations or the Company's rights and
benefits under this Agreement (except to the extent that each Excluded
Property shall no longer be subject to the provisions of this Agreement), and
(iii) it is expressly understood that the consummation by Contributor or the
ability by the
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electing party to consummate its intended 1031 Exchange is not a condition
precedent to Contributor's obligation to consummate either the Tranche 2
Closing or the Tranche 3 Closing. The Cap shall be proportionately reduced
upon the occurrence of the transactions contemplated in this Section 18.01.
18.02 Reimbursement of Preformation Expenditures. The Contributor and the
Relevant Contributee(s) hereby agree that, for purposes Section 707(a)(2)(B)
of the Code and the Treasury Regulations thereunder (relating to "disguised
sales"), the money or other consideration received by the Contributor under
this Agreement will be treated as a reimbursement of preformation expenditures
within the meaning of Treasury Regulations Section 1.707-4(d) to the maximum
extent possible
Section 19. Entity Transfers.
19.01. Transfer of Entity Interests in Lieu of Asset Sale. For the
purposes hereof, the term "Contributed Entity" shall mean any entity wholly
owned (directly or indirectly) by the Contributor and now or hereafter owning
one or more of the Properties to be acquired pursuant to this Agreement. If
the Contributor reasonably determines, prior to any or all of the applicable
Closings, that a transfer of all of Contributor's interests in and to the
applicable Contributed Entity to the Company or the SPE Entities (each such
sequence of transactions, or any portion thereof, an "Entity Transfer") in
lieu of an asset sale or contribution of such Properties as otherwise provided
under this Agreement, would result in a savings in costs, expenses or other
liabilities to be incurred by Contributor hereunder or in connection herewith,
then the Contributor shall, at least ten (10) Business Days before the
applicable Closing, notify the Relevant Contributee(s) of Contributor's desire
to effectuate such Entity Transfer and the Relevant Contributee(s) shall,
within five (5) Business Days of such notice, notify Contributor of the
Relevant Contributee(s)' approval or disapproval of such request for an Entity
Transfer; provided, however, that such approval shall not be unreasonably
withheld or conditioned if the cooperation required of the Relevant
Contributee(s) to effectuate such Entity Transfer shall not result in any
unreimbursed increased cost or expense (other than the expense for additional
Searches) or any materially increased obligations or liabilities of the
Company (other than those customarily arising in connection with the transfer
of interests in an entity owning similar property or properties in lieu of
transfers of the underlying property or properties). Failure of the Relevant
Contributee(s) to respond within the aforementioned five (5) Business Day
period shall be deemed approval of such Entity Transfer. The Relevant
Contributee(s) shall reasonably cooperate with Contributor to effectuate each
Entity Transfer that is approved or deemed approved by the Relevant
Contributee(s). In connection with each such Entity Transfer, Contributor
shall (i) provide, in writing, as of the applicable Closing Date, such
additional representations and warranties related to such Contributed Entity
(or the interests in such Contributed Entity that are subject to the Entity
Transfer) as may be reasonably requested by the Company and customarily
required in similar transactions, and (ii) provide to the Relevant
Contributee(s) at the applicable Closing (A) subject to the Cap, an indemnity
in favor of the Relevant Contributee for losses related to such Contributed
Entity for matters arising prior to the applicable Closing Date, in form and
substance reasonably satisfactory to the Company (it being acknowledged and
agreed that such indemnification shall be deemed to eliminate the Company's
right to withhold approval of any Entity Transfer on the grounds that matters
covered in such indemnification will result in materially increased
obligations, liabilities, costs or expenses) and (B) any other documentation
reasonably requested by the Company or by any lender of the Company to the
extent customarily required in similar transactions.
Section 20. Certain Provisions Regarding SPE Entities.
20.01. SPE Entities. The Company acknowledges and agrees that it shall
provide Contributor with the organizational and authorization documents
relating to each of the SPE Entities prior to the applicable Closing and that,
as of the applicable Closing Date, such SPE Entities shall assume, and shall
be jointly and severally liable for, all obligations and liabilities of the
Company in respect of the
-45-
Property to be contributed to such SPE Entity, and shall be entitled to all of
the rights and benefits of the Company in respect of such Property as may be
provided under this Agreement. Prior to the applicable Closing, the Company
shall cause the relevant SPE Entity to execute a joinder agreement in form and
substance reasonably satisfactory to Contributor to effectuate the foregoing.
[Signature Pages Immediately Follow]
-46-
CONTRIBUTOR
-----------
For the following Properties:
0000 Xxxxxxx Xxxxxxxx, Xxxxxxx, XX;
0000 Xxxxxxx Xxxxxxxx, Xxxxxxx, XX;
000 Xxxxx Xxxxxx Xxxx, Xxxxxxxxx, XX;
000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, XX:
RECKSON OPERATING PARTNERSHIP,
L.P, a Delaware limited partnership
By: RECKSON ASSOCIATES REALTY
CORP., its general partner
By: /s/ Xxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer and
Executive Vice President
Each of the following Subsidiaries:
RA 35 Pinelawn Road LLC, a
Delaware limited liability company;
RA 000 Xxxxx Xxxxxxx LLC, a
Delaware limited liability company;
RA 000 Xxxxx Xxxxxx Xxxx LLC, a
Delaware limited liability company;
RA 000 Xxxxxxxxx Xxxxx LLC, a
Delaware limited liability company;
RA 000 Xxxxxxxxxx Xxxx LLC, a
Delaware limited liability company;
RA 00 Xxxxxxxxxx Xxxx LLC, a
Delaware limited liability company;
RA 000 Xxxxxxxxx Xxxxx LLC, a
Delaware limited liability company;
RA 000 Xxxxx Xxxx LLC, a
Delaware limited liability company;
RA 225 High Ridge LLC, a
Delaware limited liability company;
RA 1660 Xxxx Xxxxxxx Road LLC, a
Delaware limited liability company;
RA 000 Xxxxxxxxxxx Xxxx LLC, a
Delaware limited liability company;
RA 50 Marcus Drive LLC, a
Delaware limited liability company;
RA 000 Xxxxxxxxx Xxxxx LLC, a
Delaware limited liability company
By: RECKSON OPERATING PARTNERSHIP,
L.P,, a Delaware limited partnership
By: RECKSON ASSOCIATES REALTY
CORP., its general partner
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Financial Officer and
Executive Vice President
COMPANY
-------
RECKSON AUSTRALIA OPERATING COMPANY
LLC, a Delaware limited liability company
By: RECKSON AUSTRALIA LPT CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
REIT
----
RECKSON AUSTRALIA LPT CORPORATION,
a Maryland corporation
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Name: Xxxxxxx Xxxxxx
Title: Executive Vice President
