REAL ESTATE PURCHASE AND SALE AGREEMENT
BETWEEN
AEW/XXXXXX, X.X.
AND
HARVARD PROPERTY TRUST, LLC
CONCERNING PROPERTY COMMONLY
KNOWN AS XXXXXX TOWER
IN HOUSTON, TEXAS
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 - Definitions; Property Identification..................................................................1
ARTICLE 2 - Agreement; Purchase Price.............................................................................7
Section 2.1. Agreement to Sell and Purchase..................................................................7
Section 2.2. Purchase Price..................................................................................7
ARTICLE 3 - Deposit...............................................................................................7
Section 3.1. Deposit.........................................................................................7
ARTICLE 4 - Survey and Title Commitment...........................................................................8
Section 4.1. Title and Survey................................................................................8
ARTICLE 5 - Inspection, Audit and Financing.......................................................................9
Section 5.1. Access..........................................................................................9
Section 5.2. Study Period...................................................................................10
Section 5.3 Confidentiality.................................................................................10
Section 5.4. Reporting......................................................................................11
Section 5.5. Assumption of Contracts.........................................................................12
ARTICLE 6 - Conditions Precedent, Casualty Damage or Condemnation................................................12
Section 6.1. Conditions Precedent Favoring Purchaser........................................................12
Section 6.2. Conditions Precedent Favoring Seller...........................................................13
Section 6.3. Risk of Loss...................................................................................14
Section 6.4. Condemnation...................................................................................14
Section 6.5. Leasing & Other Activities Prior to Closing....................................................14
ARTICLE 7 - Representations, Warranties and Covenants............................................................15
Section 7.1. Purchaser's Representations....................................................................15
Section 7.2. Seller's Representations.......................................................................18
Section 7.3. Seller's Knowledge.............................................................................20
Section 7.5. Notice of Breach................................................................................20
ARTICLE 8 - Closing..............................................................................................21
Section 8.1. Closing Date...................................................................................21
Section 8.2. Seller's Deliveries............................................................................21
Section 8.3. Purchaser's Deliveries.........................................................................22
Section 8.4. Costs and Prorations...........................................................................22
Section 8.5. Possession.....................................................................................25
ARTICLE 9 - Real Estate Commission...............................................................................25
Section 9.1. Commissions....................................................................................25
ARTICLE 10 - Termination and Default.............................................................................25
Section 10.1. Termination without Default...................................................................25
Section 10.2. Purchaser's Default...........................................................................26
Section 10.3. Seller's Default..............................................................................26
Section 10.4. Breach of Representations.....................................................................27
ARTICLE 11 - Miscellaneous.......................................................................................27
Section 11.1. Entire Agreement..............................................................................27
Section 11.2. Binding On Successors and Assigns.............................................................27
Section 11.3. Assignment by Purchaser.......................................................................28
Section 11.4. Waiver........................................................................................28
Section 11.5. Governing Law.................................................................................28
Section 11.6. Counterparts..................................................................................28
Section 11.7. Notices.......................................................................................28
Section 11.8. Attorneys' Fees...............................................................................29
Section 11.9. IRS Real Estate Sales Reporting...............................................................30
Section 11.10. Time Periods.................................................................................30
Section 11.11. Modification of Agreement....................................................................30
Section 11.12. Further Instruments..........................................................................30
Section 11.13. Descriptive Headings; Word Meaning...........................................................30
Section 11.14. Time of the Essence..........................................................................30
Section 11.15 Tenant in Common Interests...................................................................30
Section 11.16 Section 1031 Exchange........................................................................30
Section 11.17 Construction of Agreement.....................................................................31
Section 11.18. Limitations on Liability......................................................................31
Section 11.19. Severability.................................................................................32
Section 11.20. No Recording.................................................................................32
Section 11.21. No Implied Agreement..........................................................................32
Section 11.22. Facsimile Signatures..........................................................................32
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Exhibits
--------
Exhibit A - Description of the Land
Exhibit B - Form of Tenant Estoppel
Exhibit B-1 - Form of Seller Estoppel
Exhibit C - Rent Roll
Exhibit D - List of Continuing Contracts
Exhibit E - Telecommunication Agreements
Exhibit F - Form of Deed
Exhibit G - Form of Xxxx of Sale and General Assignment
Exhibit H - Form of Assignment and Assumption Agreement
Exhibit I - Representation Certificate
Exhibit J - Form of Agreement re Letter of Credit
REAL ESTATE PURCHASE AND SALE AGREEMENT
THIS REAL ESTATE PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is
entered and into as of the Effective Date (defined below) by and between
AEW/XxXxxx, X.X., a Delaware limited partnership (the "SELLER") and Harvard
Property Trust, LLC a Delaware limited liability company ("PURCHASER").
In consideration of the mutual promises hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. For purposes of this Agreement, capitalized
terms not otherwise defined herein have the meanings set forth below:
"ANTI-TERRORISM LAWS" shall have the meaning set forth in SECTION
7.1(I).
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean an Assignment and
Assumption Agreement substantially in the form attached hereto as EXHIBIT H.
"XXXX OF SALE" shall mean a xxxx of sale and general assignment
substantially in the form attached hereto as EXHIBIT G.
"BUSINESS DAY" shall mean any day of the week other than (i) Saturday
and Sunday, (ii) a day on which banking institutions in Boston, Massachusetts or
the city in which the Real Property is located are obligated or authorized by
law or executive action to be closed to the transaction of normal banking
business, or (iii) a day on which governmental functions in the Boston,
Massachusetts or the city in which the Real Property is located are interrupted
because of extraordinary events such as hurricanes, power outages or acts of
terrorism.
"CLOSING" shall mean the consummation of the purchase and sale of the
Property pursuant to the terms of this Agreement.
"CLOSING DATE" shall mean September 7, 2004.
"CLOSING STATEMENT" shall have the meaning set forth in SECTION 8.4(I).
"CODE" shall mean the Internal Revenue Code of 1986, and all amendments
thereto and all regulations issued thereunder.
"CONFIDENTIAL INFORMATION" means all documents, studies, reports, test
results, brochures, offering materials, photographs, leases, lease guarantees,
rent rolls, surveys, title reports and commitments, legal documents, financial
information, computer output and other materials and information relating to
Property, the Leases and/or the Tenants and all analyses, compilations,
forecasts, projections and other documents prepared based upon such materials
and information, any and all
proposals made in connection with a potential sale of the Property (including
any proposals involving a price for the Property), whether the same are in
electronic, pictorial, written or other form.
CONTINUING CONTRACT NOTICE" shall have the meaning set forth in SECTION
5.5(B).
"CONTINUING CONTRACTS" shall mean the Contracts listed on EXHIBIT D.
"CONTRACTS" shall mean all service, management and leasing contracts
affecting the Land or Improvements; provided, however, that the term "Contracts"
shall not include the Leases, the Parking Agreement or the Telecommunication
Agreements.
"DEED" shall mean a special warranty deed substantially in the form
attached hereto as EXHIBIT F.
"DELINQUENT RENT" means any of the Rents or other amounts that, under
the terms of the applicable Lease, are to be paid by the Tenants on or prior to
the Closing Date, but which have not been received in good funds by Seller on or
prior to the Closing Date.
"DEEMED TO KNOW" (or words of similar import) shall have the following
meaning: (a) Purchaser shall be "deemed to know" of the existence of a fact or
circumstance to the extent that such fact or circumstance is disclosed by this
Agreement, the Documents, any tenant estoppel certificate received by or on
behalf of Purchaser or any studies, tests, reports, or analyses prepared by or
for or otherwise obtained by or on behalf of Purchaser in connection with the
Property; and (b) Purchaser shall be "deemed to know" that a representation or
warranty of Seller is untrue, inaccurate or incorrect to the extent that this
Agreement, the Documents, any tenant estoppel certificate received by or on
behalf of Purchaser or any studies, tests, reports or analyses prepared by or
for or otherwise obtained by or on behalf of Purchaser in connection with the
Property contains information which is inconsistent with such representation or
warranty.
"DEPOSIT" shall have the meaning set forth in SECTION 3.1(A).
"DESIGNATED SELLER REPRESENTATIVE" means Xxxxxx Xxxxxx.
"DOCUMENTS" shall mean all documents, studies and reports applicable to
the Property or any portion thereof and made available to Purchaser or its
agents prior to Closing, including the Title Commitment, the Title Documents,
the Offering Memorandum, the Survey, the Leases, tenant estoppel certificates,
environmental, engineering and soils reports, and the Rent Roll.
"DOLLARS" and the sign "$" mean the lawful money of the United States of
America.
"EFFECTIVE DATE" means the date underneath the signature of Seller and
Purchaser on the signature page of this Agreement; provided, however, that if
such dates are different, the latest of such dates shall be the Effective Date.
"ESCROW AGENT" shall mean the Partners Title Company.
"ESTOPPEL REQUIREMENT" shall have the meaning set forth in SECTION
6.1(A)(IV).
"HAZARDOUS MATERIALS" shall mean any substance which is or contains: (i)
any "hazardous substance" as now or hereafter defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended (42
U.S.C. Section 9601 et seq.) or any regulations promulgated thereunder; (ii) any
"hazardous waste" as now or hereafter defined in the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.) or regulations promulgated
thereunder; (iii) any substance
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regulated by the Toxic Substances Control Act (15 U.S.C. Section 2601 et. seq.);
(iv) gasoline, diesel fuel or other petroleum hydrocarbons; (v) asbestos and
asbestos containing materials, in any form, whether friable or nonfriable; (vi)
polychlorinated biphenyls; (vii) radon gas; (viii) mold, mildew, fungus or other
potentially dangerous organisms; and (ix) any additional substances or materials
which are now or hereafter classified or considered to be hazardous or toxic
under any laws, ordinances, statutes, codes, rules, regulations, agreements,
judgments, orders and decrees now or hereafter enacted, promulgated, or amended,
of the United States, the states, the counties, the cities or any other
political subdivisions in which the Real Property is located and any other
political subdivision, agency or instrumentality exercising jurisdiction over
the owner of the Real Property, the Real Property or the use of the Real
Property relating to pollution, the protection or regulation of human health,
natural resources or the environment, or the emission, discharge, release or
threatened release of pollutants, contaminants, chemicals or industrial, toxic
or hazardous substances or waste into the environment (including ambient air,
surface water, ground water or land or soil).
"IMPROVEMENTS" shall mean all buildings, structures and other
improvements situated upon the Land and any fixtures, systems and facilities
owned by Seller and located on the Land.
"INTANGIBLE PROPERTY" shall mean all of Seller's right, title and
interest, if any, in all intangible assets relating to the Land, Improvements or
Personal Property, including all of Seller's right, title and interest, if any,
in all (a) warranties and guaranties relating to the Land, Improvements or
Personal Property, (b) all licenses, permits and approvals relating to the Land,
Improvements or Personal Property, (c) all logos and tradenames relating to the
Land, Improvements or Personal Property, (d) all contract rights, and (e) all
plans and specifications relating to the Land, Improvements or Personal
Property, in each case to the extent that Seller may legally transfer the same;
provided, however, that the term "Intangible Property" shall not include the
names "AEW", "XxXxxx" or any variations or derivations thereof, whether alone or
in combination with one or more other words.
"LAND" shall mean the land described on EXHIBIT A attached hereto,
together with all privileges, rights, easements and appurtenances belonging to
such land and all right, title and interest (if any) of Seller in and to any
streets, alleys, passages or other rights-of-way or appurtenances included in,
adjacent to or used in connection with such land and all right, title and
interest (if any) of Seller in all mineral rights appurtenant to such land.
"LEASE PROPOSAL NOTICE" shall mean a written notice from Seller to
Purchaser in accordance with SECTION 6.5(A) that: (a) identifies a Tenant or
proposed Tenant; (b) contains a term sheet, letter of intent or other
description of the material business terms of a proposed Lease Transaction; and
(c) contains any relevant financial information about the Tenant or proposed
Tenant that is in Seller's possession or control.
"LEASE TRANSACTION" shall mean any of the following actions by Seller
with respect to any Lease (or proposed Lease): (a) the execution of any new
Lease; (b) the renewal or material modification of any Lease, or the consent to
any assignment of or subletting under any Lease, other than any renewal,
expansion, assignment or subletting that Seller is obligated to enter into or
approve under the terms of the Leases; or (c) the termination of any Lease.
"LEASES" shall mean all leases (other than subleases), including all
amendments, extensions, modifications and supplements thereto, pursuant to which
any Person uses or occupies any part of the Real Property.
"MAJOR TENANT" shall mean any Tenant of the Property leasing fifteen
percent (15%) or more of the total leasable area of the Improvements under a
Lease that does not expire (and which the Tenant thereunder cannot terminate
absent a default by the landlord) before December 31, 2004.
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"MATERIAL CASUALTY" shall have the meaning set forth in SECTION 6.3.
"MATERIAL TAKING" shall have the meaning set forth in SECTION 6.4.
"NON-MAJOR TENANT" shall mean all Tenants of the Property other than
Major Tenants.
"NONREFUNDABLE PORTION OF THE DEPOSIT" shall have the meaning set forth
in SECTION 3.1(B).
"OFFERING MEMORANDUM" means that Confidential Offering Memorandum
prepared by Seller's Broker and entitled "Xxxxxx Tower, Houston, Texas,
Confidential Offering Memorandum" and all updates, supplements and modifications
thereto.
"OPERATING EXPENSE PASS-THROUGHS" shall have the meaning set forth in
SECTION 8.4(D).
"PARKING AGREEMENT" means that certain Independent Service Contractor
Agreement dated November 24, 1999 between Seller and Republic Parking System,
Inc.
"PERMITTED EXCEPTIONS" shall mean: (a) applicable zoning, subdivision,
building and other land use laws and regulations; (b) all matters reflecting the
existence or terms of Leases shown on the Rent Roll or entered into after the
date hereof in accordance with the terms of this Agreement, including
non-disturbance agreement, notices (or short forms) of Leases and financing
statements pertaining to Tenant property; (c) all matters, whether or not of
record, that arise out of the actions of Purchaser or its agents,
representatives or contractors; (d) the lien of real estate taxes and
assessments not yet due and payable, subject to adjustment as provided herein;
(e) all matters that the Title Company is willing to insure over without
additional premium or indemnity from Purchaser and that, in the exercise of
Purchaser's reasonable business judgment, do not have a material adverse impact
on the ownership, operation or value of the applicable Property; and (f) all
matters shown on or referenced in the Title Commitment (other than Seller
Mortgages) or the Survey, all matters of record as of the date of this
Agreement, such state of facts as would be disclosed by a physical inspection of
the Real Property or an ALTA "as-built" survey of the Real Property as of the
Title Objection Date, and all other matters affecting title to the Real Property
as to which Purchaser has actual knowledge or is deemed to know as of the Title
Objection Date, except for those matters as to which, in accordance with SECTION
4.1: (i) Purchaser makes a written objection on or before the Title Objection
Date; and (ii) Seller elects to use reasonable efforts to cure.
"PERSON" shall mean any individual, estate, trust, partnership, limited
liability company, limited liability partnership, corporation, governmental
agency or other legal entity and any unincorporated association.
"PERSONAL PROPERTY" shall mean all furniture, equipment, machinery,
inventories, supplies, signs and other tangible personal property, if any, owned
by Seller and installed, located or situated on or used in connection with the
operation of the Improvements, subject to depletions, replacements and additions
in the ordinary course of business, but excluding all (i) materials relating to
Seller's marketing efforts for the sale of the Property, including
communications with other potential purchasers, (ii) projections and other
internal memoranda or materials, (iii) appraisals, budgets, Seller's strategic
plans for the Property, internal analyses (including Seller's analyses with
respect to its leasing of space in the Property), computer software, and
submissions relating to Seller's obtaining of internal authorizations, (iv)
attorney and accountant work product, and all other materials subject to any
legal privilege in favor of Seller, and (v) the personal property located in any
on-site management office used by the current property manager for the Property
(all of the items excluded under (i) through (v) above being collectively,
"EXCLUDED ITEMS").
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"POST CLOSING CLAIM CAP" shall mean Five Hundred Thousand Dollars
($500,000).
"PROPERTY" shall mean, collectively, the Real Property, the Personal
Property, Seller's interest in the Leases, and the Intangible Property.
"PURCHASE PRICE" shall mean the purchase price for the Property as
specified in SECTION 2.2.
"PURCHASER TITLE OBJECTIONS" shall have the meaning set forth in SECTION
4.1.
"PURCHASER'S SURVIVING OBLIGATIONS" shall mean Purchaser's obligations
under SECTIONS 5.1, 5.3, 9.1, 11.8 and 11.18 of this Agreement
"REAL PROPERTY" shall mean, collectively, the Land and the Improvements.
"REIMBURSABLE LEASE EXPENSES" shall mean, collectively, (i) any third
party costs and expenses incurred by Seller prior to Closing arising out of or
in connection with any extensions, renewals or expansions exercised by Tenants
between the Effective Date and the Closing Date in accordance with the existing
Leases, and (ii) any new Lease or Lease modification entered into with
Purchaser's prior approval (or deemed approval as provided for herein) between
the Effective Date and Closing. Such Reimbursable Lease Expenses shall include,
(a) brokerage commissions and fees to effect any such leasing transaction, (b)
expenses incurred for repairs, improvements, equipment, painting, decorating,
partitioning and other items to satisfy the Tenant's requirements with regard to
such leasing transaction, (c) legal fees for services in connection with the
preparation of documents and other services rendered in connection with the
effectuation of the leasing transaction, (d) if there are any rent concessions
covering any period that the Tenant has the right to be in possession of the
demised space, the rents that would have accrued during the period of such
concession prior to the Closing Date as if such concession were amortized over
(1) with respect to any extension or renewal exercised or entered into on or
after the Effective Date, the term of such extension or renewal, (2) with
respect to any expansion exercised or entered into on or after the Effective
Date, that portion of the term remaining under the subject Lease after the rent
commencement date for such expansion, or (3) with respect to any new Lease, the
entire initial term of any such new Lease, and (e) expenses incurred for the
purpose of satisfying or terminating the obligations of a Tenant under a new
Lease to the landlord under another lease (whether or not such other lease
covers space in the Property).
"RESTRICTED PERIOD" shall mean the period commencing three (3) Business
Days before the end of the Study Period and ending on the earlier of the Closing
or the termination of this Agreement.
"RENT" shall mean fixed and minimum rents and all additional rents,
escalation charges, common area maintenance charges, imposition charges, heating
and cooling charges, insurance charges, charges for utilities, percentage rent,
and all other amounts, charges and commissions payable by the Tenants.
"RENT ROLL" shall mean the rent roll attached hereto as EXHIBIT C.
"SECURITY DEPOSITS" shall mean all security deposits, access card or key
deposits, cleaning fees and other deposits relating to space within the Real
Property paid by Tenants to Seller or its managing agent.
"SELLER'S ESTOPPEL CERTIFICATE" shall mean an estoppel certificate from
Seller substantially in the form attached hereto as EXHIBIT B-1.
"SELLER PARTIES" shall mean Seller and Seller's direct and indirect
owners, and their respective agents, officers, directors, trustees, advisors,
managers, members, agents, employees and counsel.
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"SELLER MORTGAGE" shall mean any mortgage or deed of trust granted or
assumed by Seller and encumbering the Property or any portion thereof.
"SELLER REPRESENTATIONS" shall mean the representations and warranties
of Seller expressly set forth in SECTION 7.2.
"SELLER'S BROKER" shall mean Granite Partners, LLC.
"SELLER'S TITLE ELECTION PERIOD" shall have the meaning set forth in
SECTION 4.1.
"STUDY PERIOD" shall mean the period commencing on the date of this
Agreement and ending at 5:00 p.m. East Coast time on August 16, 2004.
"SURVEY" shall mean that certain survey dated April 1, 2002, last
updated May 20, 2002, prepared by Terra Surveying Co., Inc., Project No.
2247-9703-S and entitled "ALTA/ACSM LandTitle Survey of 2 Tracts out of Blocks
296 and 000 Xxxxx Xxxx Xxxxxxx Xxxxx, X. X. Xxxxxx Survey, A-323, City of
Houston, Xxxxxx County, Texas.
"TELECOMMUNICATION AGREEMENTS" shall mean any telecommunication
licenses, riser management agreements, cable agreements, and/or rooftop licenses
listed on EXHIBIT E.
"TENANTS" shall mean all Persons leasing or occupying space within the
Real Property pursuant to the Leases.
"TIC INVESTORS" shall have the meaning set forth in SECTION 11.15.
"TITLE COMMITMENT" shall mean that certain commitment issued by the
Xxxxxxx Title on June 1, 2004 and with an effective date of May 20, 2004 (File
No. 04120227) for a standard form T-1, TLTA Owner Policy of Title Insurance.
"TITLE COMPANY" shall mean: (i) Partners Title Company, having an office
address at 000 Xxxx Xxxxxx, Xxxxx 0000X, Xxxxxxx, Xxxxx 00000-0000 (Attention:
Xxxx Xxxxxxxx) (co-insurer for 50%); and (ii) the Boston, Massachusetts office
of Xxxxxxx Title Guaranty Company ("XXXXXXX TITLE") (Attention Xx. Xxxxxxxx
Xxxxxx) (co-insurer for 50%).
"TITLE DOCUMENTS" shall mean all documents referred to in the Title
Commitment.
"TITLE OBJECTION DATE" shall mean the date that is twenty (20) days
before the end of the Study Period.
"TITLE OBJECTION NOTICE" shall have the meaning set forth in SECTION
4.1.
"UTILITY DEPOSITS" shall mean all deposits made by or on behalf of
Seller with the Persons providing water, sewer, gas, electricity, telephone and
other utilities to the Real Property.
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ARTICLE 2
AGREEMENT; PURCHASE PRICE
SECTION 2.1. AGREEMENT TO SELL AND PURCHASE. Subject to the terms and
provisions hereof, Seller agrees to sell the Property to Purchaser, and
Purchaser agrees to purchase the Property from Seller.
SECTION 2.2. PURCHASE PRICE. The Purchase Price for the Property shall
be Fifty Two Million and 00/100 Dollars ($52,000,000.00). Subject to the
adjustments and apportionments as hereinafter set forth, the Purchase Price
shall be paid on the Closing Date by wire transfer of immediately available
federal funds.
ARTICLE 3
DEPOSIT
SECTION 3.1. DEPOSIT.
(a) No later than the second Business Day following the Effective
Date, Purchaser shall deposit Two Million Dollars ($2,000,000) (together with
the additional deposit provided for in SECTION 3.2 below, and all interest and
earnings thereon, the "DEPOSIT") with Escrow Agent. The Deposit shall be held in
a segregated "money market" account pursuant to a escrow agreement consistent
with the terms hereof and otherwise reasonably acceptable to Seller and
Purchaser. The Deposit shall be applied to the Purchase Price if the Closing
occurs. In the event that the Closing does not occur by the Closing Date, the
Deposit shall be disbursed as provided herein. If Purchaser fails to deliver the
Deposit to Escrow Agent within such two Business Days, this Agreement shall, at
Seller's election, terminate.
(b) Notwithstanding anything in this Agreement to the contrary, One
Hundred and Fifty Thousand Dollars ($150,000.00) of the Deposit (the
"NONREFUNDABLE PORTION OF THE DEPOSIT") shall be nonrefundable and shall be paid
to Seller in all circumstances other than a termination of this Agreement by
Purchaser in accordance with SECTION 10.3. Any payment of the Nonrefundable
Portion of the Deposit to Seller shall be in addition to all of Seller's other
rights and remedies under this Agreement, including Seller's right to retain the
entire Deposit in accordance with SECTION 10.2.
(c) Notwithstanding anything in this Agreement to the contrary, One
Hundred and No/100 Dollars ($100.00) of the Deposit is delivered to the Escrow
Agent for delivery by the Escrow Agent to Seller as "Independent Contract
Consideration", and the Deposit is reduced by the amount of the Independent
Contract Consideration so delivered to Seller, which amount has been bargained
for and agreed to as consideration for Seller's execution and delivery of this
Agreement.
SECTION 3.2. ADDITIONAL DEPOSIT. No later than the first Business Day
immediately following the end of the Study Period, unless this Agreement
terminates in accordance with SECTION 5.2 below, Purchaser shall make a One
Million Dollar ($1,000,000) addition to the Deposit with the Escrow Agent by
certified or cashier's check or wire transfer of immediately available federal
funds and provide Seller with written confirmation thereof. If Purchaser fails
to deliver such addition to the Deposit to the Escrow Agent within one Business
Day following the end of the Study Period, this Agreement shall, at Seller's
election in its sole discretion, terminate, in which event (i) the Nonrefundable
Portion of the Deposit shall be paid to Seller, (ii) the balance of the Deposit
made under SECTION 3.1(A) shall be returned to Purchaser, and (iii) except for
Purchaser's Surviving Obligations, Seller and Purchaser shall have no further
obligations or liabilities to each other hereunder.
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ARTICLE 4
SURVEY AND TITLE COMMITMENT
SECTION 4.1. TITLE AND SURVEY.
(a) Seller has delivered or shall promptly deliver to Purchaser: (i)
a copy of the Survey; and (ii) a copy of the Title Commitment, together with
copies of all instruments referred to thereon as exceptions to title.
(b) Purchaser shall have until the Title Objection Date to give
Seller a written notice (the "TITLE OBJECTION NOTICE") that sets forth in
reasonable detail any objections that Purchaser has to title or survey matters
affecting the Property (the "PURCHASER TITLE OBJECTIONS"); provided, however,
that Purchaser shall have no right to object to any of the matters set forth
within SUBSECTIONS (A) through (E) of the definition of Permitted Exceptions.
Seller shall have five (5) days from its receipt of the Title Objection Notice
("SELLER'S TITLE ELECTION PERIOD") to give Purchaser notice as to whether Seller
elects to use reasonable efforts to cure the Purchaser Title Objections by the
Closing Date. If Seller fails to give Purchaser written notice of such election
before the end of Seller's Title Election Period, Seller shall be deemed to have
elected not to attempt to cure the Purchaser Title Objections. If Seller elects
or is deemed to have elected not to attempt to cure any one or more of the
Purchaser Title Objections, such Purchaser Title Objections shall constitute
Permitted Exceptions and Purchaser shall have until the end of the Study Period
to determine whether to take title to the Property subject to such matters or to
terminate this Agreement in accordance with SECTION 5.2. If Seller elects to use
reasonable efforts to cure any one or more of the Purchaser Title Objections,
Seller shall have until the Closing Date to complete such cure, failing which
Purchaser shall have the option of either accepting the title as it then is or
terminating this Agreement. If Purchaser elects to terminate this Agreement in
accordance with the immediately preceding sentence, (i) the Nonrefundable
Portion of the Deposit shall be paid to Seller, (ii) the balance of the Deposit
shall be returned to Purchaser promptly following Purchaser's compliance with
its obligations under SECTION 5.3(C), and (iii) except for Purchaser's Surviving
Obligations, Seller and Purchaser shall have no further obligations or
liabilities to each other hereunder. If Seller elects to use reasonable efforts
to cure any one or more Purchaser Title Objections, Seller shall use reasonable
efforts to correct such Purchaser Title Objections on or before the Closing
Date, except that (y) Seller shall in no event be required to bring suit to
clear any claimed title or survey defects and (z) except for Seller Mortgages,
Seller shall not be required to expend more than a total of Twenty Five Thousand
Dollars ($25,000) to cure the Purchaser Title Objections. All Seller Mortgages
will be satisfied by Seller on or prior to the Closing Date or, if not so
satisfied, shall be satisfied at Closing out of the proceeds otherwise payable
to Seller.
(c) Purchaser shall be entitled to request that the Title Company
provide such endorsements to the Purchaser's title insurance policy as Purchaser
may reasonably require, provided that (i) such endorsements or amendments shall
be at no cost to, and shall impose no additional liability on, Seller, (ii)
Purchaser's obligations under this Agreement shall not be conditioned upon its
ability to obtain such endorsements and, if Purchaser is unable to obtain such
endorsements, Purchaser shall nevertheless be obligated to proceed to close the
transactions contemplated hereby without reduction of or set off against the
Purchase Price, and (iii) the Closing shall not be delayed as a result of
Purchaser's request.
ARTICLE 5
INSPECTION, AUDIT AND FINANCING
SECTION 5.1. ACCESS.
(a) During the pendency of this Agreement, Purchaser, personally or
through its authorized agent or representative, shall be entitled upon
reasonable
8
advance notice to Seller to enter upon the Property during normal business hours
and shall have the right to make such investigations, including appraisals,
engineering studies, soil tests, environmental studies and underwriting
analyses, as Purchaser deems necessary or advisable, subject to the following
limitations: (a) such access shall not violate any law or agreement to which
Seller is a party or otherwise expose Seller to a material risk of liability;
(b) Purchaser shall give Seller written notice at least two (2) Business Days
before conducting any inspections or communicating with any Tenant of the
Property, and a representative of Seller shall have the right to be present when
Purchaser or its representatives conducts its or their investigations on the
Property or communicates with any Tenants; (c) neither Purchaser nor its
representatives shall interfere with the use, occupancy or enjoyment of any
Tenants, subtenants or other occupants of the Property or their respective
employees, contractors, customers or guests; (d) neither Purchaser nor its
agents shall damage the Property or any portion thereof; (e) unless Seller
agrees otherwise, before Purchaser or its agents enter onto the Property,
Purchaser shall deliver to Seller a certificate of insurance naming Seller as an
additional insured, evidencing commercial general liability insurance (including
property damage, bodily injury and death) issued by an insurance company having
a rating of at least "A-VII" by A.M. Best Company, with limits of at least
$2,000,000 per occurrence for bodily or personal injury or death and $5,000,000
aggregate per location; (f) Purchaser shall: (i) use reasonable efforts to
perform all on-site due diligence reviews and all communications with Tenants on
an expeditious and efficient basis; and (ii) indemnify, hold harmless and defend
the Seller Parties against, and hold the Seller Parties harmless from, all loss,
liability, claims, costs (including reasonable attorneys' fees), liens and
damages resulting from or relating to the activities of Purchaser or its agents
under this paragraph; and (g) without Seller's prior written consent, which
Seller may give or withhold in its absolute discretion, Purchaser shall not
conduct any Phase II exams, soil borings or other invasive tests on or around
the Property. The foregoing indemnification obligation shall survive the Closing
or termination of this Agreement. Further, during the Study Period, Seller
agrees to make available to Purchaser, or to its duly authorized agents or
representatives, copies of all Leases and all applicable books and records
relating to the Property and the operation and maintenance thereof to the extent
that such materials are in Seller's possession or control and do not constitute
Excluded Items. Such items may be examined at all reasonable times during normal
business hours upon prior reasonable notice to Seller.
(b) Purchaser has advised Seller that Purchaser must cause to be
prepared up to three (3) years of audited financial statements in respect of the
Property in compliance with the policies of Purchaser and certain laws and
regulations, including Securities and Exchange Commission Regulation S-X, Rule
3-14. Seller agrees to use reasonable efforts, at no out-of-pocket cost or
expense or liability to Seller, to cooperate with Purchaser's auditors in the
preparation of such audited financial statements (it being understood and agreed
that the foregoing covenant shall survive Closing until April 29, 2005). Without
limiting the generality of the preceding sentence: (i) Seller shall, during
normal business hours and upon reasonable advance notice, allow Purchaser's
auditors reasonable access to the books and records maintained by Seller in
respect of the Property (except to the extent that the same were provided to
Purchaser at or before the Closing or to the extent that such access is
requested after April 29, 2005); and (ii) if Seller has audited financial
statements with respect to the Property, Seller shall promptly provide
Purchaser's auditors with a copy of such audited financial statements. If after
Closing Seller obtains an audited financial statement in respect of the Property
for a fiscal period in 2003 or 2004 that was not completed at the time of
Closing, then Seller shall promptly provide Purchaser with a copy of such
audited financial statement, and the foregoing covenant shall survive Closing
until April 29, 2005. Purchaser agrees that any information provided by Seller
in accordance with the foregoing provisions shall be without any representation
or warranty, express or implied. Purchaser shall be responsible for any third
party costs incurred by Seller with respect to this SECTION 5.1(B), and
Purchaser's obligation to pay such costs shall survive the Closing. In no event
shall Seller have any obligations under this SECTION 5.1(B) after April 29,
2005.
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SECTION 5.2. STUDY PERIOD. Purchaser shall have the Study Period to
physically inspect the Property, review the economic data, underwrite the
Tenants and review the Leases, conduct appraisals, perform examinations of the
physical condition of the Improvements, examine the Real Property for the
presence of Hazardous Materials, and to otherwise conduct such due diligence
review of the Property and all records and other materials related thereto as
Purchaser, in its absolute discretion, deems appropriate. If, between the date
of this Agreement and the end of the Study Period, Purchaser shall, for any
reason in Purchaser's sole discretion, determine that it does not wish to
purchase the Property, Purchaser shall be entitled to terminate this Agreement
by giving written notice thereof to Seller prior to the expiration of the Study
Period, and thereupon (i) the Nonrefundable Portion of the Deposit shall be paid
to Seller, (ii) the balance of the Deposit shall be returned to Purchaser
promptly following Purchaser's compliance with its obligations under SECTION
5.3(C), and (iii) except for Purchaser's Surviving Obligations, Seller and
Purchaser shall have no further obligations or liabilities to each other
hereunder. If Purchaser fails to give such notice prior to the expiration of the
Study Period, it shall conclusively be deemed to have elected to waive its right
to terminate this Agreement under this SECTION 5.2 and shall be obligated to
purchase the Property in accordance with the terms hereof.
SECTION 5.3 CONFIDENTIALITY.
(a) Prior to Closing, Purchaser shall hold all Confidential
Information in confidence and shall not disclose or permit the disclosure of the
Confidential Information to any Person without Seller's prior written consent.
Purchaser further agrees that, before the Closing, Purchaser will use the
Confidential Information only for purposes of evaluating the Property in
connection with its purchase thereof in accordance with the terms of this
Agreement. Prior to the Closing, Purchaser shall not disclose the transaction
contemplated hereby or the Confidential Information to any Person, other than to
such of its employees, officers, directors, attorneys, accountants, clients and
prospective lenders who (i) have a need to review the Confidential Information
for the purpose of advising Purchaser on the suitability of the Property for
purchase, (ii) have been informed in writing of the confidential nature of such
information and (iii) have agreed to be bound by the terms of this Agreement.
Purchaser shall ensure that all persons to whom it discloses the Confidential
Information shall keep the same confidential in accordance with the terms of
this Agreement. In any event, Purchaser shall be responsible for any breach of
this Agreement by any of its employees, officers, directors, affiliates,
attorneys, accountants, clients or advisors. Within three (3) days of written
request from Seller, Purchaser shall deliver to Seller all the Confidential
Information which is in tangible form, including any copies Purchaser has made
and other embodiments thereof. Purchaser shall destroy all extracts, summaries
and compilations thereof and references thereto which are in Purchaser's notes,
documents, databases or other records (whether prepared by Purchaser or by
Seller), and in either case Purchaser will certify to the Seller by written
affidavit that it has done so.
(b) Notwithstanding the above terms, to the extent that Purchaser is
required to disclose the Confidential Information by law, regulation or stock
exchange rule or pursuant to a subpoena, court order or other legal proceeding,
Purchaser shall notify Seller (both by telephone and in writing) within one (1)
Business Day of its knowledge of such legally required disclosure. Purchaser
shall cooperate with Seller's counsel in any appeal or challenge to such
disclosure made by Seller. If no protective order or similar relief is obtained,
Purchaser shall (i) disclose only that portion of the Confidential Information
that it is legally obligated to disclose, (ii) exercise reasonable efforts to
obtain reliable assurances that the disclosed information will be kept
confidential and (iii) exercise reasonable efforts to provide Seller with a copy
of the information to be disclosed before the same is given to any third party.
In addition, and notwithstanding anything to the contrary in this Agreement,
Purchaser may disclose any portion of the Confidential Information that is
generally available to the public, other than any portion of the Confidential
Information that becomes available to the public as a result of a previous
disclosure by Purchaser in violation of this Agreement.
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(c) If this Agreement is terminated, (i) Purchaser shall promptly
deliver to Seller all the Confidential Information (or portions thereof
requested by Seller) which is in tangible form, including any copies Purchaser
has made and other embodiments thereof, and (ii) Purchaser shall destroy all
extracts, summaries and compilations thereof and references thereto which are in
Purchaser's notes, documents, databases or other records (whether prepared by
Purchaser or by Seller), and in either case Purchaser will certify to the Seller
by written affidavit that it has done so.
(d) Purchaser acknowledges that the Confidential Information is of a
special, unique, unusual, extraordinary and intellectual character and that the
Seller's interest in the Confidential Information may be irreparably injured by
disclosure of such Confidential Information in violation of this Agreement.
Purchaser further acknowledges and agrees that money damages would not be a
sufficient remedy for any breach of SECTION 5.3 of this Agreement by it and
that, in addition to all other remedies available at law or in equity, the
Seller shall be entitled to specific performance or injunctive or other
equitable relief as a remedy for any breach or potential breach by the Purchaser
of SECTION 5.3 of this Agreement and further agrees to waive any requirement for
the securing or posting of any bond in connection with such remedy.
The provisions of this SECTION 5.3 shall survive the termination of this
Agreement.
SECTION 5.4. REPORTING. In the event that Purchaser's due diligence
reveals any condition of the Property that in Purchaser's judgment requires
disclosure to any governmental agency or authority, Purchaser shall immediately
notify Seller thereof. In such event, Seller, and not Purchaser or anyone acting
on Purchaser's behalf, shall make such disclosures as Seller deems appropriate.
Notwithstanding the foregoing, Purchaser may disclose matters concerning the
Property to a governmental authority if, (a) in the written opinion of
Purchaser's outside legal counsel, Purchaser is required by law to make such
disclosure, and (b) Purchaser gives Seller not less than ten (10) days prior
written notice of the proposed disclosure, together with a copy of such legal
opinion.
SECTION 5.5. ASSUMPTION OF CONTRACTS.
(a) Notwithstanding anything to the contrary in this Agreement, the
Continuing Contracts shall be assigned to and assumed by Purchaser at the
Closing pursuant to the Assignment and Assumption Agreement.
(b) Before the end of the Study Period, Purchaser shall give notice
to Seller of any Contracts, other than the Continuing Contracts, that Purchaser
elects to have continue after Closing (the "CONTINUING CONTRACT NOTICE"), and
such Contracts, if assignable by Seller, shall be assigned to and assumed by
Purchaser at Closing pursuant to the Assignment and Assumption Agreement. All
Contracts (other than the Continuing Contracts) as to which Purchaser does not
timely give a Continuing Contract Notice shall be terminated by Seller at no
cost or liability to Purchaser by Seller sending a termination notice to the
applicable service provider on or before the Closing Date, it being understood
and agreed that the actual effective date of the termination may not occur until
after the Closing (in which event, such Contract shall be assigned to Purchaser
as if it were a Continuing Contract but subject to the termination notice).
(c) At the Closing, Seller shall assign to Purchaser, and Purchaser
shall assume, the Parking Agreement and the Telecommunication Agreements
pursuant to the Assignment and Assumption Agreement.
11
ARTICLE 6
CONDITIONS PRECEDENT, CASUALTY DAMAGE OR CONDEMNATION
SECTION 6.1. CONDITIONS PRECEDENT FAVORING PURCHASER.
(a) In addition to any other conditions precedent in favor of
Purchaser as may be expressly set forth elsewhere in this Agreement, Purchaser's
obligations under this Agreement are subject to the timely fulfillment of the
conditions set forth in this SECTION 6.1 on or before the Closing Date, or such
earlier date as is set forth below. Each condition may be waived in whole or in
part only by written notice of such waiver from Purchaser to Seller.
(i) Seller shall have performed and complied in all material
respects with all of the terms of this Agreement to be performed and complied
with by Seller prior to or at the Closing.
(ii) On the Closing Date, the representations of Seller set
forth in SECTION 7.2 shall be true, complete and accurate in all material
respects, subject to: (1) changes that: (y) are caused by the acts or omissions
of Purchaser or its agents or affiliates; or (z) are a result of the operation
of the Property in the normal course of business since the date hereof and in
accordance with the terms of this Agreement and do not, individually or in the
aggregate, have a material adverse effect on the value or operation of the
Property; and (2) casualty or condemnation (which shall be governed by SECTIONS
6.3 and 6.4, respectively).
(iii) On the Closing Date, title to the Property shall be
conveyed to Purchaser subject only to the Permitted Exceptions.
(iv) Purchaser shall have received estoppel certificates
confirming the accuracy in all material respects of the Rent Roll from: (1) each
Major Tenant; and (2) a sufficient number of Non-Major Tenants so that, in the
aggregate, Purchaser receives estoppel certificates that cover at least 85% (by
net rentable square feet) of the Improvements that are subject to Leases as of
the Closing (the "ESTOPPEL REQUIREMENT"). The disclosure or expression of any
facts, claims or information by Tenants in their completed estoppel certificates
shall not be deemed a material variation from the form required if such facts,
claims or information were (A) set forth in the Leases or the Rent Roll or
otherwise disclosed to Purchaser in writing before the commencement of the
Restricted Period, or (B) represent less than $50,000 in the aggregate in
potential loss or cost. Notwithstanding the foregoing, if Seller is unable to
obtain a sufficient number of estoppel certificates from Tenants to meet the
Estoppel Requirement, Seller may, at its sole option, substitute Seller's
Estoppel Certificates for one or more Non-Major Tenants to the extent necessary
to satisfy the Estoppel Requirement. With respect to any Tenant for whom Seller
delivers a Seller's Estoppel Certificate, Seller shall be entitled to continue
to deal with such Tenant after Closing to attempt to obtain an estoppel
certificate from such Tenant. If Purchaser subsequently receives an estoppel
certificate from any Tenant for whom Seller has delivered a Seller's Estoppel
Certificate, Seller shall thereupon be released from liability to the extent
that the information contained in the estoppel certificate obtained from the
Tenant is consistent with the information contained in Seller's Estoppel
Certificate. All Tenant estoppel certificates required hereby shall be
substantially in the form attached hereto as EXHIBIT B; provided, however that
in connection with any Lease that provides for a form of tenant estoppel
certificate (or the contents thereof), then the delivery of an estoppel
certificate that complies in all material respects with the applicable Lease
shall in all events be deemed to satisfy the requirements of this provision as
to such Lease.
(b) Notwithstanding the foregoing, if the condition set forth in
SECTION 6.1(A)(IV) shall not have been fulfilled on or before the Closing Date,
and if Purchaser is unwilling to waive such condition, then either Seller or
Purchaser shall have the one time right, exercisable by not less than ten (10)
days
12
prior written notice to the other party, to extend the Closing Date for up to
thirty (30) days to provide additional time for the fulfillment of such
condition; in no event shall this extension right apply in the case of the
failure of any condition other than the one set forth in SECTION 6.1(A)(IV).
Subject to Purchaser's right to terminate this Agreement prior to the expiration
of the Study Period in accordance with the terms of SECTION 5.2, Purchaser
acknowledges and agrees that its obligation to perform under this Agreement is
not contingent upon Purchaser's ability to obtain any (i) governmental or
quasi-governmental approval of changes or modifications in use or zoning, or
(ii) modification of any existing land use restriction, or (iii) consents to
assignments of any service contracts or other agreements which Purchaser
requests, or (iv) endorsements to Purchaser's Owner's Title Policy, or (v)
financing for acquisition of the Property.
SECTION 6.2. CONDITIONS PRECEDENT FAVORING SELLER. In addition to any
other condition precedent in favor of Seller as may be expressly set forth
elsewhere in this Agreement, Seller's obligations under this Agreement are
expressly subject to the timely fulfillment of the conditions set forth in this
SECTION 6.2 on or before the Closing Date, or such earlier date as is set forth
below. Each condition may be waived in whole or part only by written notice of
such waiver from Seller to Purchaser.
(a) Purchaser shall have performed and complied in all material
respects with all of the terms of this Agreement to be performed and complied
with by Purchaser prior to or at the Closing.
(b) On the Closing Date, the representations of Purchaser set forth
in SECTION 7.1 shall be true, accurate and complete in all material respects.
SECTION 6.3. RISK OF LOSS. In the event all or a portion of the
Improvements should be damaged or destroyed by fire or other casualty prior to
Closing such that Seller's reasonable estimate of the cost to repair the same
exceeds five percent (5%) of the Purchase Price (any such casualty, a "MATERIAL
CASUALTY"), Purchaser may, at Purchaser's sole option, elect to either:
(a) terminate this Agreement and receive back the Deposit; or
(b) close the transaction contemplated by this Agreement.
In the event of a fire or other casualty that is not a Material
Casualty, or if there is a Material Casualty and Purchaser elects to proceed
pursuant to SECTION 6.3(B), (i) Purchaser shall purchase the Property in
accordance with the terms hereof (without reduction in the Purchase Price other
than a credit for any applicable deductible in Seller's insurance policy) and
(ii) Seller shall assign to Purchaser at Closing all insurance proceeds payable
on account of such damage (net of collection costs and costs of repair
reasonably incurred by Seller and not then reimbursed). With respect to any
Material Casualty, Purchaser shall be deemed to have elected to proceed under
SECTION 6.3(B) unless, within ten (10) days from written notice of such Material
Casualty, Purchaser provides Seller with written notice that Purchaser elects to
terminate this Agreement pursuant to SECTION 6.3(A).
SECTION 6.4. CONDEMNATION. In the event that all or a material portion
of the Real Property should be condemned by right of eminent domain prior to the
Closing such that Seller's reasonable estimate of the loss of value of the
remaining Real Property exceeds five percent (5%) of the Purchase Price (any
such event, a "MATERIAL TAKING"), Purchaser may, at Purchaser's sole option,
elect either to:
(a) terminate this Agreement and receive back the Deposit; or
(b) close the transaction contemplated by this Agreement.
13
In the event of a condemnation by right of eminent domain that is not a
Material Taking, or if there is a Material Taking and Purchaser elects to
proceed under SECTION 6.4(B), Purchaser shall purchase the Property in
accordance with the terms hereof (without reduction in the Purchase Price) and
Seller shall assign to Purchaser at Closing all condemnation proceeds payable as
a result of such condemnation (net of collection costs and costs of repair
reasonably incurred by Seller and not then reimbursed). With respect to any
Material Taking, Purchaser shall be deemed to have elected to proceed under
SECTION 6.4(B) unless, within ten (10) days from written notice of such Material
Taking, Purchaser provides Seller with written notice that Purchaser elects to
terminate this Agreement pursuant to SECTION 6.4(A).
SECTION 6.5. LEASING & OTHER ACTIVITIES PRIOR TO CLOSING.
(a) Seller shall provide Purchaser with prompt notice of any new
Lease, any material modification of any Lease and any Lease termination that
occurs between the date hereof and the commencement of the Restricted Period.
Except for any transaction with any affiliate of Seller, Purchaser shall have no
right to approve any such activities before the commencement of the Restricted
Period. During the Restricted Period, Seller shall not enter into any Lease
Transaction without Purchaser's prior written consent, which consent shall not
be unreasonably withheld or delayed. When seeking such consent from Purchaser,
Seller shall provide Purchaser with a Lease Proposal Notice and, if Purchaser
does not notify Seller in writing of its approval or disapproval within three
(3) Business Days, Purchaser shall be deemed to have approved the transaction
described in such notice. If Purchaser disapproves such request, then
Purchaser's written notice shall specify the reasons for such disapproval. If
the Closing occurs, Purchaser shall reimburse seller at Closing for all
Reimbursable Lease Expenses.
(b) During the Restricted Period, Seller shall not enter into any
new service, management or leasing contracts for the Property or modifications,
renewals or terminations of any existing contracts that would materially affect
the Property after Closing, without the written consent of Purchaser, which
consent shall not be unreasonably withheld or delayed; provided, however, that
Purchaser's consent shall not be required with respect to any contract that can
be terminated without penalty on not more than thirty (30) days prior written
notice. If Purchaser does not notify Seller in writing of its consent or
disapproval within three (3) Business Days after notice thereof from Seller,
Purchaser shall be deemed to have consented to such requested action. If
Purchaser disapproves any such request, then Purchaser's written notice shall
specify the reasons for such disapproval.
(c) At all times prior to Closing, Seller shall continue to (i)
conduct business with respect to the Property substantially in the same manner
in which said business has been heretofore conducted, and (ii) insure the
Property substantially as it is currently insured.
(d) Commencing on the Effective Date, Purchaser shall be entitled to
request commercially reasonable subordination, non-disturbance and attornment
agreements ("SNDAS") benefitting Purchaser's lender from each Major Tenant and
from any other Tenants from whom Purchaser's lender requires an SNDA and Seller
shall use reasonable efforts (at no cost or liability to Seller) to cooperate in
Purchaser's efforts to obtain such SNDAs; provided, however, that the receipt of
SNDAs shall not be a condition of Purchaser's obligation to close.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 7.1. PURCHASER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.
Purchaser hereby represents, warrants, covenants, and acknowledges to Seller as
of the date hereof and as of the Closing as follows:
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(a) Purchaser acknowledges that it is an experienced and
sophisticated purchaser of commercial real estate projects such as the Property
and that, prior to the end of the Study Period, it will have a full and complete
opportunity to conduct such investigations, examinations, inspections and
analyses of the Property as Purchaser, in its absolute discretion, may deem
appropriate. Purchaser further acknowledges that, except for Seller
Representations, Purchaser has not relied upon any statements, representations
or warranties by Seller or any agent of Seller;
(b) Purchaser agrees that the Property shall be sold and that
Purchaser shall accept possession of the Property on the Closing Date strictly
on an "AS IS, WHERE IS" AND "WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT
OR OTHERWISE, KNOWN OR UNKNOWN" basis, with no right of set-off or reduction in
the Purchase Price, and that, except for the Seller Representations, such sale
shall be without representation or warranty of any kind, express or implied,
including any warranty of income potential, operating expenses, uses,
merchantability or fitness for a particular purpose, and Seller does hereby
disclaim and renounce any such representation or warranty. Purchaser
specifically acknowledges that, except for the Seller Representations, Purchaser
is not relying on any representations or warranties of any kind whatsoever,
express or implied, from Seller, any other Seller Party or any broker or other
agents as to any matters concerning the Property including: (1) the value of the
Property; (2) any income to be derived from the Property; (3) the suitability of
the Property for any and all activities and uses which Purchaser may conduct
thereon, including the possibilities for further development of the Property or
construction thereon; (4) the habitability, merchantability, marketability,
profitability or fitness for a particular purpose of the Property or any
improvements thereon; (5) the manner, quality, state of repair or lack of repair
on the Property or any improvements thereon; (6) the nature, quality or
condition of the Property, including with respect to water conditions, soil,
geological or geotechnical condition (including soil expansiveness, corrosivity,
or stability, or seismic, hydrological, geological and topographical conditions
and configurations, including, without limitation, any opinions or conclusions
of any soils engineer(s) retained to perform geotechnical and/or soils studies
or to oversee any soils engineering aspects of developing the Property); (7) the
compliance of or by the Seller, the Property, or its operation with any codes,
laws, rules, ordinances, regulations of any applicable governmental authority or
body; (8) the manner or quality of the construction or materials incorporated
into the Property; (9) compliance with environmental laws or land use laws,
rules, regulations, orders, codes or requirements, including, but not limited
to, the Americans with Disabilities Act of 1990, the Federal Water Pollution
Control Act, the U.S. Environmental Protection Agency regulations at 40 CFR,
Part 261, the Clean Water Act, the Safe Drinking Water Act, the Hazardous
Materials Transportation Act, the Toxic Substance Control Act, and/or any rules
or regulations promulgated under any of the foregoing (as the same may be
amended from time to time); (10) the presence or absence of radon gas, methane
gas, asbestos any other Hazardous Materials at, on, under, or adjacent to the
Property; (11) the conformity of any improvements to any plans or
specifications, including, without limitation, any plans and specifications that
may have been or may be provided to Purchaser; (12) the conformity of the
Property to past, current or future applicable zoning or building requirements;
(13) deficiency of any undershoring; (14) deficiency of any drainage; (15) the
fact that all or a portion of the Property may be located on or near an
earthquake fault line or in or near an earthquake or seismic hazard zone; (16)
the existence of vested land use, zoning or building entitlements affecting the
Property; (17) water rights or the availability of or access to water; (18) the
presence or suitability of any utilities or availability thereof; (19) the
completeness or accuracy of any information provided to Purchaser by Seller or
its agents; (20) any matters relating to the Leases or the Tenants; or (21) any
other matter relating to the Property or to the development, construction,
operation, or sale of the Property. Purchaser further acknowledges and agrees
that, except for Seller's Representations, Seller is under no duty to make any
affirmative disclosures or inquiry regarding any matter which may or may not be
known to Seller or any of the other Seller Parties, and Purchaser, for itself
and for its successors and assigns, hereby expressly waives and releases Seller
and each of the other Seller Parties from any such duty that otherwise might
exist;
15
PROVIDED, HOWEVER, that the foregoing provision shall not prevent
Purchaser from relying on the Seller Representations, subject to the
limitations and conditions relating thereto set forth in this Agreement;
(c) Except as expressly provided below in this SECTION
7.1(C), Purchaser, for Purchaser and Purchaser's successors and assigns, hereby
releases Seller and the other Seller Parties from, and irrevocably and
unconditionally waives all claims and liability against Seller and each of the
other Seller Parties for or attributable to, the following:
(i) any and all statements or opinions heretofore or
hereafter made, or information furnished, by or on behalf of the Seller
Parties to Purchaser or any of Purchaser's agents or representatives;
and
(ii) any and all losses, costs, claims, liabilities,
expenses, demands or obligations of any kind or nature whatsoever,
whether known or unknown and foreseen or unforeseen, attributable to the
Property, whether arising or accruing before, on or after the Closing
and whether attributable to events or circumstances which have
heretofore or may hereafter occur, including all losses, costs, claims,
liabilities, expenses, demands and obligations with respect to the
structural, physical, or environmental condition of the Property
including claims or liabilities relating to the presence, discovery or
removal of any Hazardous Materials in, at, under or about the Property
and any other matters described in SECTION 7.1(B);
PROVIDED, HOWEVER, that the release and waiver set forth in this
SECTION 7.1(C) is not intended and shall not be construed to
affect or impair any rights or remedies that Purchaser may have
against Seller as a result of a breach of any of Seller
Representations or of any covenant of Seller expressly set forth
in this Agreement, subject to the terms and limitations on
Seller's liability as set forth elsewhere in this Agreement.
Purchaser acknowledges and agrees that (1) Purchaser may hereinafter discover
facts different from or in addition to those now (or as the Closing) known to
Purchaser, (2) Purchaser's agreement to release, acquit and discharge Seller and
the other Seller Parties as set forth herein shall remain in full force and
effect notwithstanding the existence or discovery of any such additional or
different facts, (3) Purchaser knowingly waives any rights, privileges and
benefits under any federal, state or local law which may negatively impact the
validity or enforceability of any part of the releases set forth in this
Agreement, (4) upon the completion of the Closing, Seller shall be deemed to
have satisfied all of Seller's obligations, covenants and liabilities in this
Agreement and in any documents executed by Seller in connection herewith other
than those obligations of Seller that, by the express terms of this Agreement,
survive the Closing (in which case such survival shall be subject to the
limitations set forth in this Agreement), and (5) Purchaser irrevocably
covenants never to commence or prosecute, or to collude with others to commence
or prosecute, against Seller or any other Seller Party any action or proceeding
based upon any claim covered by the foregoing release.
Purchaser understands the legal significance of the foregoing provisions and
acknowledges and agrees that the provisions of this SECTION 7.1(B)-(C) were a
material factor in Sellers' acceptance of the Purchase Price and that Sellers
are unwilling to sell the Property unless Sellers and the other Seller Parties
are expressly released as set forth in SECTION 7.1(B)-(C).
The releases contained in this SECTION 7.1(B)-(C) and elsewhere in this
Agreement include claims of which Purchaser is presently unaware or which
Purchaser does not presently suspect to exist, which, if known by Purchaser,
would materially affect Purchaser's release of Seller. Purchaser specifically
waives the provisions of any law of any state, territory or jurisdiction the
import of which is as follows:
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A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
Notwithstanding anything to the contrary in this Agreement, the provisions of
SECTION 7.1(B)-(C) shall survive the Closing;
(d) Purchaser is a limited liability company duly formed,
validly existing and in good standing under the laws of Delaware. This Agreement
constitutes the valid and legally binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms;
(e) There are no actions, suits or proceedings pending or,
to the knowledge of Purchaser, threatened, against or affecting Purchaser which,
if determined adversely to Purchaser, would adversely affect its ability to
perform its obligations hereunder;
(f) Neither the execution, delivery or performance of this
Agreement nor compliance herewith (a) conflicts or will conflict with or results
or will result in a breach of or constitutes or will constitute a default under
(1) the charter documents or by-laws of Purchaser, (2) to the best of
Purchaser's knowledge, any law or any order, writ, injunction or decree of any
court or governmental authority, or (3) any agreement or instrument to which
Purchaser is a party or by which it is bound or (b) results in the creation or
imposition of any lien, charge or encumbrance upon its property pursuant to any
such agreement or instrument;
(g) No authorization, consent, approval of any governmental
authority (including courts) is required for the execution and delivery by
Purchaser of this Agreement or the performance of its obligations hereunder;
(h) Purchaser is either acting as a principal in this
transaction or is acting for an investor over which Purchaser has discretionary
authority in connection with the transaction contemplated hereby; and
(i) Purchaser is not, and will not be, a Person with whom
Seller is restricted from doing business under the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, H.R. 3162, Public Law 107-56 (commonly known as the "USA
PATRIOT ACT") and Executive Order Number 13224 on Terrorism Financing, effective
September 24, 2001 and regulations promulgated pursuant thereto (collectively,
"ANTI-TERRORISM LAWS"), including persons and entities named on the Office of
Foreign Asset Control Specially Designated Nationals and Blocked Persons List.
SECTION 7.2. SELLER'S REPRESENTATIONS. Except as set forth in this
Agreement, the Leases, the Rent Roll or any other Document, Seller warrants and
represents to Purchaser as set forth in (a) and (b) of this SECTION 7.2:
(a) REPRESENTATIONS CONCERNING SELLER
(i) Seller is a limited partnership, duly formed,
validly existing and in good standing under the laws of the State of Delaware
This Agreement constitutes the valid and legally binding obligation of Seller,
enforceable against Seller in accordance with its terms;
(ii) There are no actions, suits or proceedings
pending or, to the knowledge of Seller, threatened, against or affecting Seller
which, if determined adversely to Seller, would adversely affect its ability to
perform its obligations hereunder;
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(iii) Seller has full right, power and authority and
is duly authorized to enter into this Agreement, to perform each of the
covenants on its part to be performed hereunder and to execute and deliver, and
to perform its obligations under all documents required to be executed and
delivered by it pursuant to this Agreement;
(iv) Neither the execution, delivery or performance
of this Agreement nor compliance herewith (a) conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under (1) the charter documents or by-laws of Seller, (2) to the best of
Seller's knowledge, any law or any order, writ, injunction or decree of any
court or governmental authority, or (3) any agreement or instrument to which
Seller is a party or by which it is bound or (b) results in the creation or
imposition of any lien, charge or encumbrance upon its property pursuant to any
such agreement or instrument;
(v) No authorization, consent, or approval of any
governmental authority (including courts) is required for the execution and
delivery by Seller of this Agreement or the performance of its obligations
hereunder;
(vi) Seller is not a "foreign person" as defined in
Section 1445 of the Code;
(vii) Seller is not, and will not be, a Person with
whom Purchaser is restricted from doing business with under the Anti-Terrorism
Laws, including persons and entities named on the Office of Foreign Asset
Control Specially Designated Nationals and Blocked Persons List;
(B) REPRESENTATIONS CONCERNING THE PROPERTY
(i) To the best of Seller's knowledge: (1) Seller
has delivered or made available to Purchaser copies of the Leases that are
complete in all material respects; and (2) the Leases are in full force and
effect;
(ii) The Rent Roll that is attached hereto as EXHIBIT
C is a copy that is complete in all material respects of the rent roll that, as
of the Effective Date, is being used by the Seller in its ordinary course of
owning and managing the Property;
(iii) Seller has received no written notice from: (1)
any Tenant claiming that Seller is currently in default in its material
obligations as landlord under such Tenant's Lease; or (2) any Person claiming
that any Tenant is currently in default in any material obligation under its
Lease;
(iv) Except as set forth on the Rent Roll: (1) no
Rent has been paid by any Tenant more than one month in advance; and (2) no
Security Deposits are held by or on behalf of Seller;
(v) Seller has received no written notice from any
governmental authorities: (1) that there currently is any pending condemnation
or eminent domain proceeding relating to the Real Property, or (2) that any such
proceeding is currently contemplated;
(vi) Seller has not received any written notice from
any governmental agency requiring the correction of any condition with respect
to the Property, or any part thereof, by reason of a material violation of any
applicable federal, state, county or municipal law, code, rule or regulation,
which has not been cured or waived;
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(vii) Seller has not received any written notice of
any current or pending litigation against Seller that would, in the reasonable
judgment of Seller, if determined adversely to Seller, materially and adversely
affect Purchaser or the Property following Closing;
(viii) To the best of Seller's knowledge, (a) Seller
has delivered or made available to Purchaser true and complete copies of all
Contracts that are in Seller's possession or control and materially affect the
ownership, use and operation of the Property, and (b) such Contracts are in full
force and effect;
(ix) Seller has delivered or made available to
Purchaser a copy that is true and complete in all material respects of the
Parking Agreement; to the best of Seller's knowledge, the Parking Agreement is
in full force and effect and free from material default;
(x) Seller has delivered or made available to
Purchaser copies that are true and complete in all material respects of the
Continuing Contracts listed on EXHIBIT D hereto; to the best of Seller's
knowledge, such Continuing Contracts are in full force and effect and free from
material default; and
(xi) Seller has delivered or made available to
Purchaser copies that are true and complete in all material respects of the
Telecommunication Agreements listed on EXHIBIT E hereto; to the best of Seller's
knowledge, such Telecommunication Agreements are in full force and effect and
free from material default.
SECTION 7.3. SELLER'S KNOWLEDGE. Whenever a representation is qualified
by the phrase "to the best of Seller's knowledge", or by words of similar
import, the accuracy of such representation shall be based solely on the actual
(as opposed to constructive or imputed) knowledge of the Designated Seller
Representative, without independent investigation or inquiry. Purchaser
acknowledges that the Designated Seller Representative is named solely for the
purpose of defining the scope of Seller's knowledge and not for the purpose of
imposing any liability on or creating any duties running from the Designated
Seller Representative to Purchaser and Purchaser agrees that no Designated
Seller Representative shall have any liability under this Agreement or in
connection with the transactions contemplated hereby.
SECTION 7.5. NOTICE OF BREACH.
(a) To the extent that, before the expiration of the Study Period,
Purchaser obtains actual knowledge or is deemed to know that Seller's
representations and warranties are inaccurate, untrue or incorrect in any way,
such representations and warranties shall be deemed modified to reflect such
actual or deemed knowledge as of the end of the Study Period.
(b) If after the expiration of the Study Period but prior to the
Closing, Purchaser first obtains actual knowledge that any of the
representations or warranties made herein by Seller are untrue, inaccurate or
incorrect in any material respect, Purchaser shall give Seller written notice
thereof within five (5) Business Days of obtaining such actual knowledge (but,
in any event, prior to the Closing). In such event, Seller shall have the right
(but not the obligation) to attempt to cure such misrepresentation or breach and
shall, at its option, be entitled to a reasonable adjournments of the Closing
(not to exceed ninety (90) days) for the purpose of such cure. If Seller elects
to attempt to so cure but is unable to so cure any misrepresentation or breach
of warranty, then Purchaser, as its sole remedy for any and all such materially
untrue, inaccurate or incorrect representations or warranties, shall elect
either (a) to waive such misrepresentations or breaches of representations and
warranties and consummate the transaction contemplated hereby without any
reduction of or credit against the Purchase Price, or (b) if Purchaser first
obtained actual knowledge of such material misrepresentation or breach of
warranty after the end of
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the Study Period, to terminate this Agreement in its entirety by written notice
given to Seller on the Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be Purchaser promptly following Purchaser's
compliance with its obligations under SECTION 5.3(C) and, thereafter, neither
party shall have any further rights or obligations hereunder except as provided
in any section hereof that by its terms expressly provides that it survives any
termination of this Agreement.
ARTICLE 8
CLOSING
SECTION 8.1. CLOSING DATE. Subject to Seller's and Purchaser's right to
extend the Closing Date as provided in SECTION 6.1(B) of this Agreement, the
Closing shall take place at 10:00 a.m. on the Closing Date. Unless the parties
otherwise agree in writing, the Closing shall be conducted through a customary
escrow arrangement with the Title Company and, on or before the Closing Date,
the Seller shall deliver to the Title Company the documents listed in SECTION
8.2(A)-(H) and the Purchaser shall deliver to the Title Company the documents
and funds described in SECTION 8.3. The other materials and documents described
in SECTION 8.2 shall be delivered directly from Seller to Purchaser (or
Purchaser's property manager) on or before the Closing Date.
SECTION 8.2. SELLER'S DELIVERIES. At the Closing, Seller shall deliver
or cause to be delivered to Purchaser, at Seller's sole expense, each of the
following items, each executed and acknowledged to the extent appropriate:
(a) The Deed;
(b) The Xxxx of Sale;
(c) The Assignment and Assumption Agreement;
(d) A non-foreign person affidavit sworn to by Seller as
required by Section 1445 of the Code;
(e) A certificate updating the Seller Representations
substantially in the form of EXHIBIT I;
(f) Such evidence or documents as may be reasonably required
by the Title Company relating to: (i) mechanics' or materialmen's liens; (ii)
parties in possession; and (iii) the status and capacity of Seller and the
authority of the Person or Persons who are executing the various documents on
behalf of Seller in connection with the sale of the Property;
(g) A duly-executed Closing Statement;
(h) An updated Rent Roll;
(i) The tenant notice letters prepared by Purchaser pursuant
to SECTION 8.5 below;
(j) All keys in Seller's possession or control to all locks
on the Improvements;
(k) The Leases; and
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(l) All Contracts and all other documents in the possession
or control of Seller and material to Purchaser's ownership or operation of the
Property, including all permits, licenses, approvals, plans, specifications,
guaranties and warranties relating to the Property and in Seller's possession or
control, but excluding the Excluded Items.
SECTION 8.3. PURCHASER'S DELIVERIES. At the Closing, Purchaser shall
deliver to Seller the following items:
(a) Immediately available federal funds sufficient to pay
the Purchase Price (less the Deposit, and subject to apportionments and
adjustments as set forth herein) and Purchaser's share of all escrow costs and
closing expenses;
(b) Duly executed and acknowledged originals of the
Assignment and Assumption Agreement and the Closing Statement;
(c) The tenant notice letters prepared by Purchaser pursuant
to SECTION 8.5 below; and
(d) Such evidence or documents as may reasonably be required
by the Title Company evidencing the status and capacity of Purchaser and the
authority of the Person or Persons who are executing the various documents on
behalf of Purchaser in connection with the purchase of the Property.
SECTION 8.4. COSTS AND PRORATIONS.
(a) GENERAL. Real estate taxes and assessments allocable to the
payment period that includes the Closing Date, personal property taxes, if any,
Rents and all other items of income and expense with respect to the Property
shall be prorated between Seller and Purchaser as of the Closing Date in
accordance with this SECTION 8.4. Except as otherwise provided in this SECTION
8.4, income and expenses shall be prorated on an accrual basis. All
apportionments and prorations made hereunder shall be made based on the number
of days of ownership of the Property in the period applicable to the
apportionment, with Purchaser entitled to income and responsible for expenses
for the Closing Date. Prorations of annual payments will be made based on the
number of days of ownership in the applicable annual period.
(b) RENTS. Seller shall be entitled to all Rent attributable to any
period before the Closing Date. Purchaser shall be credited at Closing with: (i)
all security or other deposits held by or on behalf of Seller with respect to
the Property (other than any security deposits held in the form of a letter of
credit or other non-cash security, as to which, at Closing, Seller and Purchaser
shall enter into a letter agreement substantially in the form of EXHIBIT J);
(ii) any Rent prepaid beyond the Closing Date; and (iii) any interest earned as
of the Closing on security deposits or prepaid Rent held by or on behalf of
Seller, to the extent that such interest is refundable to Tenants under the
terms of the applicable Lease or applicable law.
(c) DELINQUENT RENT. Delinquent Rent shall not be accrued or
prorated at Closing. Any Delinquent Rent that is paid after the Closing Date
shall, subject to the terms below, be paid to Seller, and if Delinquent Rent is
received by Purchaser, Purchaser shall pay the Delinquent Rent to Seller
promptly after collection by Purchaser; provided, however, that all Rent
collected after the Closing Date shall be applied first to payment of all
amounts due Purchaser from the applicable Tenant and second to all Delinquent
Rent due to Seller. Purchaser shall use reasonable efforts to collect any
Delinquent Rent after the Closing, provided that Purchaser shall not be required
to commence any legal proceedings or terminate any Lease. In the event Purchaser
commences any action or proceeding against any Tenant and as a result thereof
collects any Delinquent Rent which Purchaser is required to remit to Seller,
Purchaser shall be entitled to deduct and retain a portion of the amount
collected which is equal to the
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Pro Rata Share of the reasonable, third party expenses incurred by Purchaser in
connection with the collection of such Delinquent Rent. Purchaser shall not
waive any Delinquent Rent or modify or amend any Lease so as to reduce the
Delinquent Rent owed by the Tenant for any period in which Seller is entitled to
receive such Delinquent Rent, without first obtaining Seller's written consent.
If Purchaser fails to pay any Delinquent Rent due to Seller under the terms
hereof within fifteen (15) days of Purchaser's receipt of the same, the amount
due to Seller shall thereafter bear interest at any annual rate of ten percent
(10%), compounded monthly. As of the date set forth for the final closing
adjustment in SECTION 8.4(I), any Delinquent Rent which has not then been paid
shall be deemed assigned to Seller, provided that, without the prior written
consent of Purchaser, Seller shall not take any action against a Tenant owing
Delinquent Rent which would affect such Tenant's right to occupy the premises
demised under its Lease.
(d) OPERATING EXPENSE PASS THROUGH ADJUSTMENTS. Seller, as landlord
under the Leases, is currently collecting from Tenants under all or some of the
Leases additional rent to cover taxes, insurance, utilities, maintenance and
other operating costs and expenses (collectively, "OPERATING EXPENSE
PASS-THROUGHS") incurred by Seller in connection with the ownership, operation,
maintenance and management of the Property. Upon Purchaser's reconciliation of
the Operating Expense Pass-Throughs for the year in which Closing occurs, the
parties shall make an adjusting payment between themselves so that, with respect
to any amounts recovered from Tenants, or if applicable, refunded to Tenants,
with respect to Operating Expense Pass-Throughs, (i) Seller receives from
Purchaser any such amount recovered by Purchaser from Tenants with respect to
under-collections of Operating Expense Pass-Throughs by Seller relating to the
portion of the year of Closing that occurs prior to the date of Closing, and
(ii) Purchaser receives from Seller any such amounts to be paid to Tenants by
Purchaser with respect to over-collections of Operating Expense Pass-Throughs by
Seller relating to the portion of the year of Closing that occurs prior to the
date of Closing. In either event, Purchaser shall be responsible for crediting
or repaying those amounts to the appropriate Tenants. If Seller collected
estimated prepayments of Operating Expense Pass-Throughs attributable to any
period after Closing, Seller shall pay or credit such amounts to Purchaser at
Closing.
(e) TAXES. All real estate taxes assessed against the Real Property
shall be prorated between Seller and Purchaser on an accrual basis based upon
the actual current tax xxxx. If the most recent tax xxxx received by Seller
before the Closing Date is not the actual current tax xxxx, then Seller and
Purchaser shall initially prorate the taxes at the Closing by applying 100% of
the tax rate for the period covered by the most current available tax xxxx to
the latest assessed valuation, and shall reprorate the taxes retroactively when
the actual current tax xxxx is then available; provided, however, that in no
event shall Seller be charged with or responsible for any increase in real
estate taxes resulting from the sale of the Property to Purchaser or from any
improvements made or Leases entered into on or after the Closing. All real
estate taxes accruing before the Closing Date shall be the obligation of Seller
and all such taxes accruing on and after the Closing Date shall be the
obligation of Purchaser. Any refunds of real estate taxes made after the Closing
shall first be applied to the unreimbursed third-party costs incurred by Seller
or Purchaser in obtaining the refund, then paid to any Tenants who are entitled
to the same and the balance, if any, shall be paid to Seller (for the period
prior to the Closing Date) and to Purchaser (for the period commencing on and
after the Closing Date). If any proceeding to determine the assessed value of
the Real Property or the real estate taxes payable with respect to the Real
Property has been commenced before the Effective Date and shall be continuing as
of the Closing Date, Seller shall be authorized to continue to prosecute such
proceeding and shall be entitled to any abatement proceeds therefrom allocable
to any period before the Closing Date, and Purchaser agrees to cooperate as
reasonably requested with Seller and to execute any and all documents reasonably
requested by Seller in furtherance of the foregoing.
(f) ASSESSMENT INSTALLMENTS. If there are special assessments
pending against the Property, Seller shall pay any installments of such special
assessments that are due and payable prior to the Closing and Purchaser shall
pay all installments of such special assessments on or after the Closing;
provided,
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however, that: (i) Seller shall not be required to pay any installments of
special assessments that relate to projects that have not been completed as of
the Effective Date; and (ii) Seller shall have no obligation to pay (and
Purchaser shall not receive a credit for) any special assessments to the extent
that such assessments are required to be paid by any Tenant.
(g) UTILITIES. Final readings and final xxxxxxxx for utilities will
be made if possible as of the Closing Date, in which event no proration shall be
made at the Closing with respect to utility bills; otherwise a proration shall
be made based upon the parties' reasonable good faith estimate and a
readjustment made within thirty (30) days after Closing. Utility Deposits, plus
any interest on the Utility Deposits to which Seller is or will be entitled that
are held by the provider of the utilities and which are freely transferable to
Purchaser, shall at the election of Seller be assigned by Seller to Purchaser
and Purchaser shall pay Seller the full amount thereof at Closing. Seller shall
retain the right to obtain a refund of any Utility Deposits which are not
required to be assigned to Purchaser, and Purchaser will cooperate with Seller
as reasonably requested in obtaining any refund.
(h) CONTINUING CONTRACTS. Prepaid charges, payments and accrued
charges under the Telecommunication Agreements, the Parking Agreement, the
Continuing Contracts and under any other Contracts assigned to Purchaser shall
be prorated at Closing in a manner reasonably acceptable to Seller and
Purchaser.
(i) CLOSING STATEMENT. Purchaser and Seller shall cooperate to
produce prior to the Closing Date a schedule of prorations and closing costs
that is as complete and accurate as reasonably possible (the "CLOSING
STATEMENT"). If any of the aforesaid prorations cannot be calculated accurately
on the Closing Date, then they shall be estimated to the extent possible as of
the Closing and calculated as soon after the Closing Date as is feasible. All
adjustments to initial estimated prorations shall be made by the parties with
due diligence and cooperation within sixty (60) days following the Closing, or
such later time as may be required to obtain necessary information for
proration, by prompt cash payment to the party yielding a net credit from such
prorations from the other party; provided, however, that the provisions of this
paragraph shall survive the Closing until April 29, 2005 and after such date
neither Seller nor Purchaser shall have any further rights or obligations under
this SECTION 8.4.
(j) CLOSING COSTS. Seller shall pay the base premium for the Title
Policy, the cost of the Survey, one-half of the recording fees and one-half of
the Title Company's customary escrow and closing fees. Purchaser shall pay all
costs associated with its due diligence, including the cost of appraisals,
architectural, engineering, credit and environmental reports, all title
insurance premiums and costs other than the base premium paid by Seller as
provided for above, the cost of any modifications to the Survey requested by
Purchaser, one-half of the recording fees and one-half of the Title Company's
customary escrow and closing fees. Purchaser and Seller shall each pay their own
legal fees related to the preparation of this Agreement and all documents
required to settle the transaction contemplated hereby. All other customary
purchase and sale closing costs shall be paid by Seller or Purchaser in
accordance with the custom in the jurisdiction where the Property is located.
(K) LEASE EXPENSES. At Closing, Purchaser shall reimburse Seller for
any and all Reimbursable Lease Expenses to the extent that the same have been
paid by Seller prior to Closing. In addition, at Closing, Purchaser shall assume
Seller's obligations to pay, when due (whether on a stated due date or by
acceleration) any Reimbursable Lease Expenses unpaid as of the Closing, and
Purchaser hereby agrees to indemnify, defend and hold Seller harmless from and
against any and all claims for such Reimbursable Lease Expenses which remain
unpaid for any reason at the time of Closing, which obligations of Purchaser
shall survive the Closing. Each party shall make available to the other all
records, bills, vouchers and other data in such party's control verifying
Reimbursable Lease Expenses and the payment thereof.
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SECTION 8.5. POSSESSION. Possession of the Property shall be delivered
to Purchaser by Seller at the Closing, subject only to the Leases (and any
subleases), rights arising under the Continuing Contracts and any other
Contracts to be assigned to Purchaser in accordance with SECTION 5.5, the
Parking Agreement, the Telecommunication Agreements, and the Permitted
Exceptions. Seller and Purchaser covenant and agree to execute, at Closing, a
written notice of the acquisition of the Property by Purchaser, in sufficient
copies for transmittal to all Tenants and properly addressed to all such
Tenants. Such notice shall be prepared by Purchaser and approved by Seller,
shall notify the Tenants of the sale and transfer and shall contain appropriate
instructions relating to the payment of future rentals, the giving of future
notices, and other matters reasonably required by Purchaser or required by law.
Unless a different procedure is required by applicable law, in which event such
laws shall be controlling, Purchaser agrees to transmit or otherwise deliver
such letters to the Tenants promptly after the Closing.
ARTICLE 9
REAL ESTATE COMMISSION
SECTION 9.1. COMMISSIONS. If and when, but only if and when, the Closing
is completed and the Purchase Price is paid in full, Seller shall be obligated
to pay a real estate commission and/or brokerage fee to Seller's Broker in
accordance with a separate agreement between Seller and Seller's Broker. Seller
and Purchaser represent and warrant to each other that no other brokerage fee or
real estate commission is or shall be due or owing in connection with this
transaction, and Seller and Purchaser hereby indemnify and hold the other
harmless from any and all claims of any other broker or agent based on action or
alleged action of the other. The provisions of this paragraph shall survive the
Closing.
ARTICLE 10
TERMINATION AND DEFAULT
SECTION 10.1. TERMINATION WITHOUT DEFAULT. If the sale of the Property
is not consummated because of the failure of any condition precedent to
Purchaser's obligations expressly set forth in this Agreement or for any other
reason except a default by Purchaser in its obligation to purchase the Property
in accordance with the provisions of this Agreement, and provided that Purchaser
has performed or tendered performance of all of its material obligations under
this Agreement, the Deposit (other than the Nonrefundable Portion of the
Deposit) shall be returned to Purchaser promptly following Purchaser's
compliance with its obligations under SECTION 5.3(c).
SECTION 10.2. PURCHASER'S DEFAULT. If the sale contemplated hereby is
not consummated because of a default by Purchaser in its obligation to purchase
the Property in accordance with the terms of this Agreement after Seller has
performed or tendered performance of all of its material obligations in
accordance with this Agreement, then: (a) this Agreement shall terminate; (b)
the Deposit shall be paid to and retained by Seller as liquidated damages; and
(c) except for Purchaser's Surviving Obligations, Seller and Purchaser shall
have no further obligations to each other. THE PARTIES HERETO, BEFORE ENTERING
INTO THIS AGREEMENT, HAVE BEEN CONCERNED WITH THE FACT THAT SUBSTANTIAL DAMAGES
WILL BE SUFFERED BY SELLER IN THE EVENT THAT PURCHASER SHOULD FAIL TO PURCHASE
THE PROPERTY SUBJECT TO AND IN ACCORDING TO THE TERMS AND CONDITIONS OF THIS
AGREEMENT. PURCHASER AND SELLER ACKNOWLEDGE THAT THE DAMAGES TO SELLER IN THE
EVENT OF A BREACH OF THIS AGREEMENT BY PURCHASER WOULD BE DIFFICULT OR
IMPOSSIBLE TO DETERMINE, THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES'
BEST AND MOST ACCURATE ESTIMATE OF THE DAMAGES THAT WOULD BE SUFFERED BY SELLER
IF THE TRANSACTION SHOULD FAIL TO CLOSE AND THAT SUCH ESTIMATE IS REASONABLE
UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS
24
AGREEMENT AND UNDER THE CIRCUMSTANCES THAT SELLER AND PURCHASER REASONABLY
ANTICIPATE WOULD EXIST AT THE TIME OF SUCH BREACH. THE PARTIES, HAVING MADE A
DILIGENT ENDEAVOR TO ASCERTAIN THE ACTUAL COMPENSATORY DAMAGES WHICH SELLER
WOULD SUFFER IN THE EVENT OF PURCHASER'S FAILURE TO PURCHASE THE PROPERTY
SUBJECT TO AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT,
HEREBY AGREE THAT THE REASONABLE ESTIMATE OF SAID DAMAGES IS THE SUM EQUAL TO
THE AMOUNT OF THE DEPOSIT. THEREFORE, IN THE EVENT THAT THE SALE CONTEMPLATED
HEREBY SHALL FAIL TO CLOSE FOR ANY REASON OTHER THAN SELLER'S DEFAULT HEREUNDER
OR THE FAIURE OF ANY CONDITION PRECEDENT IN FAVOR OF PURCHASER EXPRESSLY SET
FORTH IN THIS AGREEMENT, SELLER SHALL BE ENTITLED TO AND SHALL RETAIN THE ENTIRE
DEPOSIT AS LIQUIDATED DAMAGES AND AS ITS SOLE REMEDY AT LAW OR IN EQUITY. THE
AMOUNT OF THE LIQUIDATED DAMAGES HAS BEEN ESTABLISHED BY THE PARTIES AS THE
AMOUNT OF THE MONETARY DAMAGES SELLER WILL SUFFER BASED SOLELY UPON A FAILURE BY
PURCHASER TO PURCHASE THE PROPERTY AND SELLER SHALL BE ENTITLED TO RECOVER NO
OTHER DAMAGES FROM PURCHASER BASED SOLELY UPON A FAILURE BY PURCHASER TO
PURCHASE THE PROPERTY. BY INITIALING BELOW, THE PARTIES EXPRESSLY UNDERSTAND AND
AGREE TO THE FOREGOING PROVISIONS RELATING TO LIQUIDATED DAMAGES.
This SECTION 10.2 is intended only to liquidate and limit Seller's right
to damages arising due to Purchaser's failure to purchase the Property in
accordance with the terms of this Agreement and shall not limit the obligations
of Purchaser pursuant to SECTIONS 5.1, 5.3, 9.1, 11.8 or 11.18 of this
Agreement.
SECTION 10.3. SELLER'S DEFAULT. If Purchaser shall have performed or
tendered performance of all of its material obligations under this Agreement,
and the sale contemplated hereby is not consummated because of a default by
Seller in its obligation to sell the Property in accordance with the terms of
this Agreement, then, Purchaser may, as its sole and exclusive remedy at law or
in equity: (a) terminate this Agreement by giving written notice thereof to
Seller, in which event the Deposit (including the Nonrefundable Portion of the
Deposit) will be returned to Purchaser promptly following Purchaser's compliance
with its obligations under SECTION 5.3(C) and the parties shall have no further
obligation to each other except for Purchaser's Surviving Obligations; (b) waive
such default and consummate the transactions contemplated hereby in accordance
with the terms of this Agreement; or (c) specifically enforce this Agreement.
Purchaser hereby irrevocably waives any other right or remedy for such default.
As a condition precedent to Purchaser exercising any right to bring an action
for specific performance as the result of Seller's default hereunder, Purchaser
must commence such action within sixty (60) days after the occurrence of such
default. Purchaser agrees that its failure timely to commence such an action for
specific performance within such sixty (60) day period shall be deemed a waiver
by it of its right to commence such an action.
SECTION 10.4. BREACH OF REPRESENTATIONS. Seller and Purchaser agree
that, following the Closing, each shall be liable for the direct, but not
consequential or punitive, damages resulting from any breach of its
representations and warranties expressly set forth in ARTICLE 7 hereof and in
any Seller Estoppel provided by Seller; provided, however, that: (i) the total
liability of Seller for all such breaches and any matters relating thereto shall
not, in the aggregate, exceed the Post Closing Claim Cap; (ii) the total
liability of Purchaser for all such breaches and any matters relating thereto
shall not, in the aggregate, exceed the Post Closing Claim Cap; (iii) such
representations and warranties are personal to Seller and Purchaser and may not
be assigned to or enforced by any other Person, other than to an assignee of
Purchaser in accordance with SECTION 11.3; and (iv) the representations and
warranties of Seller set forth in this Agreement or in any document or
certificate delivered by Seller in connection herewith shall survive the Closing
for a period of one hundred eighty (180) days; provided, however, that no claim
with respect to such representations and warranties of Seller shall be valid or
enforceable, at
25
law or in equity, unless written notice containing a description of the specific
nature of such claim shall have been given by Purchaser to Seller prior to the
expiration of said one hundred eighty (180) day period and an action shall have
been commenced by Purchaser against Seller within two (2) years of Closing.
Notwithstanding the foregoing, however, if the Closing occurs, Purchaser hereby
expressly waives, relinquishes and releases any right or remedy available to it
at law, in equity, under this Agreement or otherwise to make a claim against
Seller for damages that Purchaser may incur, or to rescind this Agreement and
the transactions contemplated hereby, as the result of any of Seller's
representations or warranties in this Agreement or any document executed by
Seller in connection herewith being untrue, inaccurate or incorrect if Purchaser
knew or is deemed to know that such representation or warranty was untrue,
inaccurate or incorrect at the time of the Closing. Purchaser further agrees
that, following the Closing, no claim may or shall be made for any alleged
breach of any representations or warranties made by Seller under or relating to
this Agreement (including any claim under any Seller's Estoppel Certificate)
unless the amount of such claim or claims, individually or in the aggregate,
exceeds $50,000 (at which point, subject to the above provisions, Seller shall
be liable for all such damages caused thereby relating back to the first dollar
of loss).
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior discussions, understandings or
agreements between the parties. All Exhibits and Schedules attached hereto are a
part of this Agreement and are incorporated herein by reference.
SECTION 11.2. BINDING ON SUCCESSORS AND ASSIGNS. Subject to SECTION
11.3, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 11.3. ASSIGNMENT BY PURCHASER. Without the prior written consent
of Seller, Purchaser shall not, directly or indirectly, assign this Agreement or
any of its rights hereunder. Any attempted assignment in violation hereof shall,
at the election of Seller, be of no force or effect and shall constitute a
default by Purchaser. Notwithstanding the foregoing, Purchaser may assign its
rights under this Agreement subject to the following conditions: (a) the
assignment must be to an Affiliate; (b) such assignee must assume all of
Purchaser's obligations hereunder in a manner reasonably acceptable to Seller
and become jointly and severally liable with Purchaser for all such obligations;
and (c) at least two (2) Business Days prior to the proposed assignment,
Purchaser shall provide Seller with notice thereof and evidence that the
foregoing conditions are satisfied. For purposes of this SECTION 11.3, the term
"AFFILIATE" shall mean: (i) an entity that controls, is controlled by, or is
under common control with Purchaser, (ii) any partnership in which Purchaser or
Purchaser's controlling member is the general partner, (iii) any fund or entity
sponsored by Purchaser, or (iv) any entity that retains Purchaser or a company
affiliated with Purchaser to manage the Property.
SECTION 11.4. WAIVER. The excuse or waiver of the performance by a party
of any obligation of the other party under this Agreement shall only be
effective if evidenced by a written statement signed by the party so excusing or
waiving. No delay in exercising any right or remedy shall constitute a waiver
thereof, and no waiver by Seller or Purchaser of the breach of any covenant of
this Agreement shall be construed as a waiver of any preceding or succeeding
breach of the same or any other covenant or condition of this Agreement.
SECTION 11.5. GOVERNING LAW.
26
(a) This Agreement shall be construed and the rights and obligations
of Seller and Purchaser hereunder determined in accordance with the internal
laws of the State of Texas without regard to the principles of choice of law or
conflicts of law.
(b) In recognition of the benefits of having any disputes with
respect to this Agreement resolved by an experienced and expert person, Seller
and Purchaser hereby agree that any suit, action, or proceeding, whether claim
or counterclaim, brought or instituted by any party hereto on or with respect to
this Agreement or which in any way relates, directly or indirectly, to this
Agreement or any event, transaction, or occurrence arising out of or in any way
connected with this Agreement or the Property, or the dealings of the parties
with respect thereto, shall be tried only by a court and not by a jury. EACH
PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT,
ACTION, OR PROCEEDING.
SECTION 11.6. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and it shall be sufficient that the signature of each party
appear on one or more such counterparts. All counterparts shall collectively
constitute a single agreement. A facsimile signature to this Agreement shall be
sufficient to prove the execution hereby by any Person.
SECTION 11.7. NOTICES. All notices or other communications required or
provided to be sent by either party shall be in writing and shall be sent by:
(i) by United States Postal Service, certified mail, return receipt requested,
(ii) by any nationally known overnight delivery service for next day delivery or
(iii) delivered in person. All notices shall be deemed to have been given upon
receipt. All notices shall be addressed to the parties at the addresses below:
To Seller: AEW/XxXxxx, X.X.
0000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxx
With copies to: AEW Capital Management, L.P.
World Trade Center Xxxx
Xxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxxx
and
Xxxxx Xxxxxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
and
Xxxxxxx Xxxxx LLP
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
27
To Purchaser: Harvard Property Trust, LLC
0000 X. Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxxxx
with a copy to: Xxxxxx & Xxxxxxx, L.L.P.
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X Xxxxxx
Any address or name specified above may be changed by notice given to
the addressee by the other party in accordance with this SECTION 11.7. The
inability to deliver notice because of a changed address of which no notice was
given as provided above, or because of rejection or other refusal to accept any
notice, shall be deemed to be the receipt of the notice as of the date of such
inability to deliver or rejection or refusal to accept. Any notice to be given
by any party hereto may be given by the counsel for such party.
SECTION 11.8. ATTORNEYS' FEES. In the event of a judicial or
administrative proceeding or action by one party against the other party with
respect to the interpretation or enforcement of this Agreement, the prevailing
party shall be entitled to recover reasonable costs and expenses including
reasonable attorneys' fees and expenses, whether at the investigative, pretrial,
trial or appellate level. The prevailing party shall be determined by the court
based upon an assessment of which party's major arguments or position prevailed.
SECTION 11.9. IRS REAL ESTATE SALES REPORTING. Purchaser and Seller
hereby agree that the Escrow Agent shall act as "the person responsible for
closing" the transaction which is the subject of this Agreement pursuant to
Section 6045(e) of the Code and shall prepare and file all informational
returns, including IRS Form 1099-S, and shall otherwise comply with the
provisions of Section 6045(e) of the Code.
SECTION 11.10. TIME PERIODS. Any reference in this Agreement to the time
for the performance of obligations or elapsed time shall mean consecutive
calendar days, months, or years, as applicable. In the event the time for
performance of any obligation hereunder expires on a day that is not a Business
Day, the time for performance shall be extended to the next Business Day.
SECTION 11.11. MODIFICATION OF AGREEMENT. No modification of this
Agreement shall be deemed effective unless in writing and signed by both Seller
and Purchaser.
SECTION 11.12. FURTHER INSTRUMENTS. Each party, promptly upon the
request of the other, shall execute and have acknowledged and delivered to the
other or to Escrow Agent, as may be appropriate, any and all further instruments
reasonably requested or appropriate to evidence or give effect to the provisions
of this Agreement and which are consistent with the provisions of this
Agreement.
SECTION 11.13. DESCRIPTIVE HEADINGS; WORD MEANING. The descriptive
headings of the paragraphs of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any provisions of
this Agreement. Words such as "herein", "hereinafter", "hereof" and "hereunder"
when used in reference to this Agreement, refer to this Agreement as a whole and
not merely to a subdivision in which such words appear, unless the context
otherwise requires. The singular shall include the plural and the masculine
gender shall include the feminine and neuter, and vice versa, unless the context
otherwise requires. The word "including" shall not be restrictive and shall be
interpreted as if followed by the words "without limitation."
28
SECTION 11.14. TIME OF THE ESSENCE. Time is of the essence of this
Agreement and all covenants and deadlines hereunder. Without limiting the
foregoing, Purchaser and Seller hereby confirm their intention and agreement
that time shall be of the essence of each and every provision of this Agreement,
notwithstanding any subsequent modification or extension of any date or time
period that is provided for under this Agreement. The agreement of Purchaser and
Seller that time is of the essence of each and every provision of this Agreement
shall not be waived or modified by any conduct of the parties, and the agreement
of Purchaser and Seller that time is of the essence of each and every provision
of this Agreement may only be modified or waived by the express written
agreement of Purchaser and Seller that time shall not be of the essence with
respect to a particular date or time period, or any modification or extension
thereof, which is provided under this Agreement.
SECTION 11.15. TENANT IN COMMON INTERESTS Purchaser has advised Seller
that Purchaser may solicit investments in the Property from investors that will
acquire undivided interests in the Property and become tenants-in-common therein
("TIC INVESTORS"). Notwithstanding anything contained in this Agreement to the
contrary, Seller and Purchaser agree as follows: (i) Purchaser shall have the
right to distribute information about the Property and this Agreement to
advisors of potential TIC Investors and brokers who may facilitate the sale of
tenant-in-common interests in the Property to potential TIC Investors, provided
that (1) each Person to whom such information is disclosed shall be informed in
writing of the confidentiality requirements of Section 5.3 of this Agreement and
(2) Purchaser shall be responsible for any violation of the confidentiality
provisions of this Agreement by any Person to whom Purchaser discloses such
information; (ii) at the Closing, Purchaser may designate one or more TIC
Investors as nominees for purposes of acquiring title to the Property at
Closing, provided that Purchaser shall give Seller not less than five (5)
Business Days prior written notice of the name of all such designees; (iii)
Purchaser shall be responsible for preparing the deed to each such nominee
(which deed shall be in the form attached to this Agreement); (iv) Purchaser
shall be responsible for all expenses relating to the conveyance of the Property
to the TIC Investors, including any additional recording fees or escrow charges;
(v) Purchaser's obligations under this Agreement are not in any way conditioned
upon its ability to have any portion of the Property acquired by TIC Investors,
and in no event shall the naming of potential TIC Investors as nominees of
Purchaser for the purposes of acquiring title to the Property in any way limit
or affect Purchaser's obligations or liabilities under this Agreement; (vi) in
no event shall Purchaser be entitled to extend the Closing Date in order
accommodate the sale of interests in the Property to TIC Investors; (vii)
Purchaser shall be solely responsible for, and shall indemnify, defend and hold
the Seller harmless from, all liabilities, costs and expenses relating to the
sale of interests in the Property to TIC Investors, including all obligations
and liabilities relating to state and federal securities law and Anti-Terrorism
Laws; and (x) in no event shall any TIC Investor have any rights under this
Agreement or be a third-party beneficiary of this Agreement. The indemnification
provision set forth above shall survive the Closing or termination of this
Agreement.
SECTION 11.16. SECTION 1031 EXCHANGE In the event that Purchaser elects
to purchase the Property as part of a like kind exchange pursuant to Section
1031 of the Code (including, without limitation, a Section 1031 exchange
involving tenancy in common interests), Seller agrees to cooperate as reasonably
requested with Purchaser in connection therewith and to execute and deliver all
documents which reasonably may be required to effectuate such exchange as a
qualified transaction pursuant to Section 1031 of the Code; provided, however,
that: (a) the Closing shall not be delayed; (b) Seller incurs no additional cost
or liability in connection with the like-kind exchange; (c) Purchaser pays all
costs associated with the like-kind exchange; (d) Seller is not obligated to
take title to any other property; (e) Purchaser's obligations under this
Agreement are not in any way conditioned upon its ability to accomplish any
like-kind exchange and in no event shall any actual or proposed like-kind
exchange limit or affect Purchaser's obligations or liabilities under this
Agreement; and (f) Purchaser shall be solely responsible for, and shall
indemnify, defend and hold the Seller harmless from, all liabilities, costs and
expenses relating to any actual or proposed like-kind exchange. The
indemnification provision set forth above shall survive the Closing or
termination of this Agreement.
29
SECTION 11.17 CONSTRUCTION OF AGREEMENT. This Agreement shall not be
construed more strictly against one party than against the other merely by
virtue of the fact that it may have been prepared primarily by counsel for one
of the parties, it being recognized that both Purchaser and Seller have
contributed substantially and materially to the preparation of this Agreement.
SECTION 11.18. LIMITATIONS ON LIABILITY. Notwithstanding anything to the
contrary in this Agreement, and subject to any additional limitations on
Seller's liability set forth elsewhere in this Agreement: (a) Purchaser's
recourse against Seller under this Agreement or any agreement, document,
certificate or instrument delivered by Seller hereunder, or under any law, rule
or regulation relating to the Property, shall be limited to Seller's interest in
the Property (or, following the Closing, to the net proceeds of the sale of the
Property actually received by Seller); and (b) in no event shall any of the
Seller Parties have any personal liability hereunder or otherwise. The
acceptance of the Deed shall constitute full performance of all of Seller's
obligations hereunder other than those obligations of Seller, if any, that by
the express terms hereof are to survive the Closing.
SECTION 11.19. SEVERABILITY. The parties hereto intend and believe that
each provision in this Agreement comports with all applicable local, state and
federal laws and judicial decisions. If, however, any provision in this
Agreement is found by a court of law to be in violation of any applicable local,
state, or federal law, statute, ordinance, administrative or judicial decision,
or public policy, or if in any other respect such a court declares any such
provision to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of all parties hereto that, consistent with and with a
view towards preserving the economic and legal arrangements among the parties
hereto as expressed in this Agreement, such provision shall be given force and
effect to the fullest possible extent, and that the remainder of this Agreement
shall be construed as if such illegal, invalid, unlawful, void, or unenforceable
provision were not contained herein, and that the rights, obligations, and
interests of the parties under the remainder of this Agreement shall continue in
full force and effect.
SECTION 11.20. NO RECORDING. The provisions hereof shall not constitute
a lien on the Property. Neither Purchaser nor its agents or representatives
shall record or file this Agreement or any notice or memorandum hereof in any
public records; provided, however, that this provision shall not prohibit
Purchaser from filing a copy of this Agreement with any court in which Purchaser
brings an action for specific performance in accordance with SECTION 10.4. If
Purchaser breaches the foregoing provision, this Agreement shall, at Seller's
election, terminate, and Seller shall retain the Deposit in accordance with
SECTION 10.2. Purchaser hereby irrevocably appoints Seller as its true and
lawful attorney-in-fact, coupled with an interest, for the purpose of executing
and recording such documents and performing such other acts as may be necessary
to terminate any recording or filing of this Agreement in violation of this
provision.
SECTION 11.21. NO IMPLIED AGREEMENT. Neither Seller nor Purchaser shall
have any obligations in connection with the transaction contemplated by this
Agreement unless both Seller and Purchaser, each acting in its sole discretion,
elects to execute and deliver this Agreement to the other party. No
correspondence, course of dealing or submission of drafts or final versions of
this Agreement between Seller and Purchaser shall be deemed to create any
binding obligations in connection with the transaction contemplated hereby, and
no contract or obligation on the part of Seller or Purchaser shall arise unless
and until this Agreement is fully executed by both Seller and Purchaser. Once
executed and delivered by Seller and Purchaser, this Agreement shall be binding
upon them notwithstanding the failure of Escrow Agent or any broker or other
Person to execute this Agreement.
SECTION 11.22. FACSIMILE SIGNATURES. Signatures to this Agreement, any
amendment hereof and any notice given hereunder, transmitted by telecopy shall
be valid and effective to bind the party so signing. Each party agrees to
promptly deliver an execution original of this Agreement (and any
30
amendment hereto) with its actual signature to the other party, but a failure to
do so shall not affect the enforceability of this Agreement (or any amendment
hereto), it being expressly agreed that each party to this Agreement shall be
bound by its own telecopied signature and shall accept the telecopied signature
of the other party to this Agreement.
[The balance of this page has intentionally been left blank.
Signature pages follow.]
31
IN WITNESS WHEREOF, Seller and Purchaser hereto have executed this
Agreement as of the date first written above.
SELLER: PURCHASER:
------ ---------
AEW/XXXXXX, X.X., HARVARD PROPERTY TRUST, LLC,
a Delaware limited partnership a Delaware limited liability company
By: XxXxxx Xxxxxxxx (Xxxxx) XX #0, L.L.C.,
a Delaware limited liability company, its By: :______________________________
Administrative Partner Name:______________________________
Title:_____________________________
Date: July 23, 2004
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date: July 23, 2004
By: AEW Partners II, L.P., a Delaware limited
partnership, its Managing Partner
By: AEW II, L.P., a Delaware limited
Partnership, its general partner
By: Partners II Holdings, L.P.,
a Delaware limited partnership,
its general partner
By: AEW II Corporation,
a Delaware corporation,
its general partner
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date: July 23, 2004
32
RECEIPT BY THE ESCROW AGENT
---------------------------
This Agreement, fully executed by both Seller and Purchaser, has been
received by the Escrow Agent this ____ day of _______________, 2004 and by
execution hereof, Escrow Agent hereby covenants and agrees to be bound by the
terms of this Agreement that are applicable to it.
ESCROW AGENT
Partners Title Company
By: ___________________________
Name:______________________
Title:_____________________
33
EXHIBIT A
---------
DESCRIPTION OF THE LAND
EXHIBIT B
---------
TENANT ESTOPPEL CERTIFICATE
[Name and address of Purchaser]
[Name and address of Purchaser's Lender]
Re: ______________________________________
Gentlemen:
The undersigned ("Lessee") has executed and entered into that
certain lease agreement ("Lease Agreement") attached hereto as EXHIBIT A and
made a part hereof for all purposes with respect to those certain premises
("Leased Premises") which are located in the above-referenced project
("Project") and are more fully described in the Lease Agreement. Lessee
understands that the entities to whom this letter is addressed (collectively,
"Addressee") and the other Benefited Parties (as hereinafter defined) have
committed to loan or invest a substantial sum of money in reliance upon this
certification by the undersigned, which certification is a condition precedent
to making such loan or investment, or that the Benefited Parties intend to take
some other action in reliance upon this certification.
With respect to the Lease Agreement, Lessee certifies to you the
following, with the intention that you may rely fully thereon:
1. A true and correct copy of the Lease Agreement, including any
and all amendments and modifications thereto, is attached hereto as Exhibit A;
2. The original Lease Agreement is dated ___________, 200__, and
has been assigned, modified, supplemented or amended only in the following
respects:
(Please write "None" above or, on a separate sheet of paper,
state the effective date of and describe any oral or written
modifications, supplements or amendments to the Lease Agreement
and attach a copy of such modifications, supplements or
amendments, with the Lease Agreement as EXHIBIT A);
3. Lessee is in actual occupancy of the Leased Premises under the
Lease Agreement; the Leased Premises are known as Suite ______ of the Project,
and the Leased Premises contain approximately ______ square feet.
4. The initial term of the Lease Agreement commenced on
_________________________, 19______, and ends at midnight on
_______________________ , 200______, at a monthly base rent of $ , and no
rentals or other payments in advance of the current calendar month have been
paid by Lessee, except as follows:
(Please write "None" above or describe such matters on a
separate sheet of paper);
5. Base Rent with respect to the Lease Agreement has been paid by
Lessee through __________________, 200______; all additional rents and other
charges have been paid for the current periods;
6. There are no concessions, bonuses, free months rent, rebates or
other matters affecting the rent for Lessee, except as follows:
(Please write "None" above or describe such matters on a
separate sheet of paper);
7. No security or other deposit has been paid by Lessee with
respect to the Lease Agreement, except as follows:
(Please write "None" above or describe such deposits on a
separate sheet of paper);
8. The Lease Agreement is in full force and effect and there are no
events or conditions existing which, with notice or the lapse of time or both,
could constitute a monetary or other default of the Lessor under the Lease
Agreement, or entitle Lessee to any offset or defense against the prompt current
payment of rent or constitute a default by Lessee under the Lease Agreement,
except as follows:
(Please write "None" above or describe such default on a
separate sheet of paper);
9. All improvements required to be made by Lessor under the terms
of the Lease Agreement have been satisfactorily completed and accepted by Lessee
as being in conformity with the Lease Agreement, except as follows:
(Please write "None" above or describe such improvements on a
separate sheet of paper);
10. Lessee has no option to expand or rent additional space within
the Project or any right of first refusal with regard to any additional space
within the Project, other than the Leased Premises, except as follows:
(Please write "None" above or describe such right or option on a
separate sheet of paper);
11. Lessee has no right or option to renew the Lease Agreement for
any period of time after the expiration of the initial term of the Lease
Agreement, except as follows:
(Please write "None" above or describe such right on a separate
sheet of paper);
12. To the best of Lessee's knowledge, any and all broker's leasing
and other commissions relating to and/or resulting from Lessee's execution of
the Lease Agreement and occupancy of the Leased Premises have been paid in full
and no broker's leasing or other commissions will be or become due or payable in
connection with or as a result of either Lessee's execution of a new Lease
Agreement covering all or any portion of the Leased Premises or any other space
within the Project or Lessee's renewal of the Lease Agreement, except as
follows:
(Please write "None" above or describe such right on a separate
sheet of paper);
13. To the best of Lessee's knowledge, the use, maintenance or
operation of the Leased Premises complies with, and will at all times comply
with, all applicable federal, state, county or local statutes, laws, rules and
regulations of any governmental authorities relating to environmental, health or
safety matters (being hereinafter collectively referred to as the Environmental
Laws);
14. The Leased Premises have not been used and Lessee does not plan
to use the Leased Premises for any activities which, directly or indirectly,
involve the use, generation, treatment, storage,
ii
transportation or disposal of any petroleum product or any toxic or hazardous
chemical, material, substance, pollutant or waste;
15. Lessee has not received any notices, written or oral, of
violation of any Environmental Law or of any allegation which, if true, would
contradict anything contained herein and there are no writs, injunctions,
decrees, orders or judgments outstanding, no lawsuits, claims, proceedings or
investigations pending or threatened, relating to the use, maintenance or
operation of the Leased Premises, nor is Lessee aware of a basis for any such
proceeding;
16. There are no actions, whether voluntary or otherwise, pending
against Lessee under the bankruptcy or insolvency laws of the United States or
of any state.
17. Lessee understands that the Lease Agreement may be assigned to
Addressee and Lessee agrees to attorn to Addressee in all respects in accordance
with the Lease Agreement.
For purposes hereof, the term "Benefited Parties" means Addressee and
the following parties: (a) Landlord; (b) Behringer Harvard Xxxxxx Tower S LP,
Behringer Harvard Xxxxxx Tower H LP, and their respective successors and assigns
(including tenants in common purchasing an interest in the Property); and (c)
any lender to which any party described in the foregoing clause (b) grants a
deed of trust or other lien upon the Project.
Dated: ______________________________, 200______.
Very truly yours,
__________________________________
By:
Name:
Title:
iii
EXHIBIT B-1
-----------
SELLER ESTOPPEL CERTIFICATE
TO: _ [Name and address of Purchaser]
_ [Name and address of Purchaser's Lender]
RE: Lease dated ______________ between ____________________________
("LANDLORD") and __________________________ ("TENANT") for
Leased Premises consisting of approximately ________________
square feet (the "PREMISES") located at ________________________
(the "Property")
BACKGROUND
----------
___________________________ (the "SELLER") has this day conveyed to
_________________________ ("Purchaser") the property described in a Real Estate
Purchase and Sale Agreement between Seller and Purchaser dated _______, ___,
200_ (the "PURCHASE AGREEMENT"). This Seller Estoppel Certificate is delivered
by Seller to Purchaser pursuant to the Purchase Agreement and capitalized terms
used herein without definition have the meaning given to them in the Purchase
Agreement. Seller's liability hereunder shall be subject to the all time, dollar
and other limitations on Seller's liability set forth in the Purchase Agreement.
Whenever a representation herein is qualified by the phrase "to Seller's
knowledge", or by words of similar import, such knowledge shall be limited as
provided in the Purchase Agreement. No officer, director, owner, manager,
trustee, or agent of Seller shall have any liability hereunder.
Subject to the above limitations, and except as set forth in the
Purchase Agreement or any Document, Seller hereby certifies as follows:
1. The Lease constitutes the entire agreement between the Landlord
and Tenant concerning the Premises and has not been modified or
amended except as follows:
________________________________________________________________
________________________________________________________________
________________________________________________________________
2. The Lease is in full force and effect;
3. To the best of Seller's knowledge, as of the date hereof, Tenant
has no offsets or defenses to its performance of the terms and
provisions of the Lease, including (without limitation) the
payment of rent due thereunder;
4. Tenant has accepted possession of the Premises pursuant to the
terms of the Lease;
5. All improvements and space required to be furnished by the
Landlord under the Lease have been completed in all material
respects and the Landlord has complied with all of its material
obligations with respect to the construction, fixturing and
equipping of the Premises, except as follows:
__________________________________;
6. The term of the Lease commenced on ____________, ____ and
terminates on ____________, ______, subject to any extension
provisions set forth in the Lease;
7. Base rent of $_____________ is payable monthly in advance under
the Lease. In addition to such base rent, Tenant pays its pro
rata share of real estate taxes and operating expenses in
accordance with the terms of the Lease. No rents have been paid
more than 30 days in advance. Tenant has paid base rent through
___________, ______;
8. The amount of the security deposit currently held by Landlord is
$ ____________ (if none, so state); and
9. To the best of Seller's knowledge, neither Seller nor the Tenant
is in default in any of its material obligations under the
Lease.
Subject to the above limitations, this certificate is being delivered to
you with the knowledge that you and the other Benefited Parties (as hereinafter
defined) will rely upon it in making an investment in the Property. For purposes
hereof, the term "BENEFITED PARTIES" means the addressees named above and the
following parties: (a) Landlord; (b) Behringer Harvard Xxxxxx Tower S LP, and
Behringer Harvard Xxxxxx Tower H LP; and (c) any lender to which any party
described in the foregoing clause (b) grants a deed of trust or other lien upon
the Property.
This certificate is dated as of _________________, 2004.
Seller
By:_____________________
Name:
Title:
ii
EXHIBIT C
---------
RENT ROLL
XXXXXX TOWER
0000 XXXXXX XXXXXX
XXXXXXX, XXXXX
RENT ROLL
As of July 1, 2004
[CHART OMITTED]
37
EXHIBIT D
---------
LIST OF CONTINUING CONTRACTS
Electric Energy Sales Agreement dated May 29, 2003 with Reliant
Energy Solutions, LLC, as amended by First Amendment to Electric
Energy Sale Agreement dated as of April 21, 2004.
EXHIBIT E
---------
TELECOMMUNICATION AGREEMENTS
Cypress Communications, Inc. - Agreement dated ________________
Metropolitan Fiber Systems of Houston, Inc. - Agreement dated ________________
Winstar Wireless, Inc. - Agreement dated ________________
Yipes Communications, Inc. - Agreement dated ________________
EXHIBIT F
---------
FORM OF DEED
SPECIAL WARRANTY DEED
THE STATE OF TEXAS ss.
ss. KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF _________ ss.
THAT , a _____________________________ ("Grantor"), whose mailing
address is ________________________________________________, for and in
consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration paid in cash to Grantor by the Grantee herein named, has
GRANTED, BARGAINED, SOLD and CONVEYED, and by these: presents does GRANT,
BARGAIN, SELL and CONVEY unto _________________________________, a
________________________ ("Grantee"), whose mailing address is
_______________________________, that certain real property situated in the
County of _________________, Texas, more particularly described on EXHIBIT A
attached hereto and made a part hereof for all purposes ("Property").
TO HAVE AND TO HOLD the Property and all improvements thereon, together
with all and singular the rights and appurtenances thereto and in any wise
belonging unto the said Grantee, its legal representatives, successors and
assigns, forever; and Grantor does hereby bind itself, its legal representatives
and successors, to Warrant and Forever Defend all and singular the Property,
unto the said Grantee, its legal representatives, successors and assigns,
against every person whomsoever, lawfully claiming or to claim the same, or any
part thereof by, through or under Grantor, but not otherwise.
This conveyance is made and delivered subject to all matters of record
as of the date hereof including, without limitation, those matters of title set
forth on EXHIBIT B attached hereto and incorporated herein by reference, but
only to the extent the same, in fact, do exist and are applicable to the
Property.
Grantee, by its acceptance hereof, assumes liability for the payment of
all ad valorem taxes and assessments for the Property for the calendar year of
the date of this Special Warranty Deed and for all subsequent years.
IN WITNESS WHEREOF, Grantor has executed this Special Warranty Deed on
the ______ day of _________________, 200__.
[SELLER]
THE COMMONWEALTH OF MASSACHUSETTS
_____________, ss. ____ ____, 2004
Then personally appeared the above named
__________________________________. ____________________________ of
_____________ and acknowledged the foregoing instrument to be his free act and
deed and the free act and deed of __________________________ before me.
____________________________
Notary Public
My Commission expires:
ii
EXHIBIT G
---------
XXXX OF SALE AND GENERAL ASSIGNMENT
KNOW ALL PEOPLE BY THESE PRESENTS, that ______________________________,
with an address at c/o _____________________________ ("SELLER"), for and in
consideration of the sum of Ten and No/100 Dollars ($10.00) lawful money of the
United States, and other good and valuable consideration to Seller in hand paid,
at or before the ensealing and delivery of these presents, by
___________________________, a _____________ _______________ whose post office
address is _____________________ ("PURCHASER"), the receipt and sufficiency of
which is hereby acknowledged, has bargained and sold, and by these presents does
grant, bargain, sell, convey, set over, transfer, assign and deliver unto the
Purchaser, its successors and assigns, the following:
(a) All of Seller's right, title and interest in and to all
fixtures, equipment and articles of personal property (except for personal
property owned by tenants) (hereinafter, the "PERSONALTY") attached to or
located on and used in connection with the operation of the parcel of land
described in EXHIBIT A attached hereto (the "LAND") and the buildings and
improvements erected thereon (collectively, the "PREMISES"), which Personalty
includes all personal property, if any, owned by Seller and located on and used
in the operation and maintenance of the Premises, which Personalty is being
conveyed simultaneously with the conveyance by Seller to Purchaser of all its
right, title and interest in and to the Premises by a Deed of even date
herewith;
(b) All of Seller's right, title and interest in and to all those
permits, licenses, certificates, approvals, authorizations, variances and
consents (including any and all presently pending applications therefor)
affecting the Land and the buildings and improvements thereon issued to Seller
or to its predecessors in interest in the Premises as holder, claimant,
licensee, permitee, successor in interest, applicant and/or owner or lessor of
the Premises, by any and all federal, state, county, municipal and local
governments, and all departments, commissions, boards, bureaus and offices
thereof, having or claiming jurisdiction over the Premises, whether or not the
same may presently be in full force and effect, all to the extent that Seller
may lawfully transfer the same to Purchaser;
(c) All of Seller's right, title and interest in and to all
unexpired warranties and guaranties affecting the Premises and/or the
Personalty, all to the extent that Seller may lawfully transfer the same to
Purchaser (it being agreed that nothing in this Section (c) shall be construed
to affect Seller's rights under such warranties and guaranties with respect to
periods prior to the date hereof); and
(d) All of Seller's right, title and interest in and to all
appraisals, surveys, architectural and/or engineering renderings, plans and
specifications, soils and other geological reports and studies, and all other
reports, studies and other information relating in any way to development and/or
use of the Premises.
Notwithstanding the foregoing, the Excluded Items (as defined in the
Real Estate Purchase and Sale Agreement dated ______ between Seller and _______)
are not included in this xxxx of sale and assignment.
To have and to hold the same unto Purchaser, its successors and assigns
forever.
This xxxx of sale and assignment is made without any warranties, express
or implied, except for those representations and warranties, if any, expressly
set forth in that Real Estate Purchase and Sale Agreement between Seller and
______________________ dated as of ________________, 200__ (the "AGREEMENT"),
all of which are subject to the limitations set forth in the Agreement.
IN WITNESS WHEREOF, this Xxxx of Sale has been duly signed and sealed by
the Seller as of the _____ day of ___________, 200__.
SELLER:
[Name]
By: _______________________________
Name:______________________________
Title:_____________________________
ii
EXHIBIT A
---------
(to Xxxx of Sale)
Property Description
iii
EXHIBIT H
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "ASSIGNMENT") is executed
as of ________________, 200__ ---------- by and between
___________________________ ("ASSIGNOR"), and __________________________
("ASSIGNEE"). -------- --------
BACKGROUND
Assignor has this day conveyed to the Assignee the property located in
______________, ____________ County, ______________, more particularly described
in EXHIBIT A hereto (the "PREMISES") and, in connection with the conveyance of
the Premises, Assignor and Assignee intend that Assignor's right, title,
interests, powers, and privileges in and under all leases and security deposits
affecting the Premises and other matters stated herein be assigned and
transferred to Assignee.
AGREEMENT
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. LEASES. Assignor hereby transfers and assigns to Assignee any
and all right, title and interest which Assignor may have, as landlord or
otherwise, in leases with tenants covering spaces in the Premises (collectively
the "LEASES"), including but not limited to the leases listed in EXHIBIT B
attached hereto and made a part hereof. Assignee hereby assumes all liabilities
and obligations of Assignor under the Leases arising or accruing from and after
the date hereof including, without limitation, all obligations with respect to
all security deposits with respect to the Leases.
2. SECURITY DEPOSITS. Assignor hereby transfers and assigns to
Assignee all security deposits held by the Assignor relative to the Leases.
3. CONTRACTS. Assignor hereby transfers and assigns to Assignee any
and all right, title and interest which Assignor may have in the contracts, if
any, listed in EXHIBIT C attached hereto and made a part hereof (collectively,
the "CONTRACTS"). By executing this Assignment, Assignee hereby accepts and
agrees to perform all of the terms, covenants and conditions of the Contracts on
the part of Assignor therein required to be performed, from and after the date
hereof, but not prior thereto. Assignee hereby assumes all liabilities and
obligations of Assignor under the Contracts arising or accruing from and after
the date hereof and agrees to indemnify, defend and hold Seller harmless with
respect thereto.
4. SUCCESSORS AND ASSIGNS. This Assignment shall inure to the
benefit of, and be binding upon, the successors, executors, administrators,
legal representatives and assigns of the parties hereto.
5. GOVERNING LAW. This Agreement shall be construed under and
enforced in accordance with the laws of the State of Texas.
6. NO REPRESENTATIONS. This assignment is made without any
representation or warranty, express or implied, except for those representations
and warranties, if any, expressly set forth in that Real Estate Purchase and
Sale Agreement between Assignor and _______________________ dated as of
_____________, 2004 (the "AGREEMENT"), all of which are subject to the
limitations set forth in the Agreement.
IN WITNESS WHEREOF, this Assignment has been duly signed and sealed by
the parties as of the date set forth above.
ASSIGNOR:
[Name]
By: ____________________________
Name:_______________________
Title:______________________
ASSIGNEE:
[Name]
By: ____________________________
Name:_______________________
Title:______________________
ii
EXHIBIT A
---------
(to Assignment and Assumption)
Property Description
iii
EXHIBIT B
---------
(to Assignment and Assumption)
Rent Roll
iv
EXHIBIT C
Assigned Contracts
(to Assignment and Assumption)
[List the Parking Agreement, the Telecommunication Agreements,
the Continuing Contracts and any other Contracts assigned to
Purchaser in accordance with SECTION 5.5]
v
EXHIBIT I
---------
REPRESENTATION CERTIFICATE
The undersigned, as Seller under a Real Estate Purchase and Sale
Agreement ("PURCHASE AGREEMENT") dated as of _________________, 200__ between
_________________________ ("SELLER") and _____________________________
("PURCHASER"), does hereby certify to Purchaser as follows:
Except as otherwise disclosed in writing to Purchaser, the
representations and warranties set forth in Section 7.2 of the Purchase
Agreement are hereby reaffirmed as of the date hereof.
Seller's liability hereunder shall be subject to the limitations set
forth in the Purchase Agreement.
Dated as of this ____ day of ____________, 200__.
Seller:
[Name]
By: __________________________________
Name:_____________________________
Title:____________________________
EXHIBIT J
FORM OF AGREEMENT RE: LETTER OF CREDIT
[Insert Purchaser Address]
_____________, ___, 200_
[Insert Seller Address]
RE: Real Estate Purchase and Sale Agreement dated _______between
________________ and _______________ (the "PURCHASE AGREEMENT")
Dear ______:
Reference is made to the following facts which constitute the background
to this agreement:
A. _______________ ("SELLER") is the owner of certain property
known as _____________________ (the "PROPERTY");
B. Pursuant to the terms of the Purchase Agreement,
_______________("PURCHASER") is acquiring title to the Property on the date
hereof. Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them under the terms of the Purchase Agreement.
C. Pursuant to the Assignment and Assumption of Leases being
executed and delivered pursuant to the Purchase Agreement, Seller has assigned
to Purchaser all of Seller's right, title and interest in all tenant security
deposits with respect to the Property (whether held in cash or in the form of
letters of credit).
D. In lieu of a cash security deposit, ________________ ("TENANT")
has furnished Seller with a certain letter of credit dated ______________ in the
amount of $___________, issued by _______________ (Irrevocable Standby Letter of
Credit Number ____________) for the account of ____________ and naming Seller as
the beneficiary (such letter of credit, and any extension or replacement
thereof, being referred to herein as the "LETTER OF CREDIT").
E. Although Seller and Purchaser are this date closing the
transaction contemplated under the Purchase Agreement, Seller has not yet
completed the process of having the Letter of Credit assigned or amended to name
Purchaser as beneficiary, or replaced with a replacement letter of credit in
form and substance reasonably satisfactory to Purchaser and issued by an
institution acceptable to Purchaser (any such assignment, amendment or
replacement being referred to herein as the Assignment of the Letter of Credit).
F. Seller and Purchaser have made certain agreements with respect
to the Assignment of the Letter of Credit and, until such Assignment is
accomplished, with respect to the administration of the Letter of Credit, all as
more particularly hereinafter set forth.
ii
NOW, THEREFORE, for good and valuable consideration in hand this day
paid by each of the parties hereto to the other, the receipt and sufficiency of
which are hereby acknowledged, Seller and Purchaser hereby agree as follows with
respect to the Letter of Credit:
1. Seller agrees to exercise reasonably diligent efforts to
accomplish the Assignment of the Letter of Credit in a form and manner
reasonably acceptable to Purchaser on or before the date which is 30 days
following the date hereof. Seller agrees to execute and deliver such instruments
the issuer of the Letter of Credit shall reasonably request to assign such
Letter of Credit to Purchaser provided that Seller does not incur any material
cost or liability in connection therewith.
2. Until the date on which the Assignment of the Letter of Credit
has been accomplished (the "ASSIGNMENT DATE"), Purchaser hereby appoints Seller
as Purchaser's agent for purposes of holding and administering the Letter of
Credit strictly in accordance with Purchaser's direction, and Seller hereby
accepts such appointment and acknowledges that the Letter of Credit is being
held by Seller in Seller's name in its capacity as agent for Purchaser and
Seller hereby irrevocably disclaims any claim to the Letter of Credit or the
proceeds of any draw thereunder.
3. Seller agrees that until the Assignment Date:
(i) Seller shall present and draw upon the Letter of Credit
promptly upon the written demand of Purchaser and
furnish Purchaser with the full proceeds of any such
draw or draws;
(ii) Seller shall not draw on the Letter of Credit nor
consent to any amendment, modification or termination of
the Letter of Credit without the prior written consent
of Purchaser (which consent Purchaser may grant or
withhold in its sole discretion); and
(iii) Seller shall promptly forward to Purchaser (in the
manner provided for notice under the Purchase Agreement)
any correspondence received by Seller with respect to
the Letter of Credit.
Purchaser shall indemnify and hold Seller harmless from and against any
and all loss, cost, damage and expense incurred by Seller arising out of any
action taken by Seller under this Paragraph 3 based upon Purchaser's
instructions (except to the extent arising from Seller's gross negligence or
willful misconduct).
4. On the Assignment Date, Seller shall furnish Purchaser with
originals of the Letter of Credit and any amendment, assignment or replacement
thereof effecting the Assignment, and upon Purchaser's written confirmation of
its receipt thereof this agreement shall terminate and be of no further force or
effect.
5. This agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors and assigns.
iii
Kindly confirm your agreement with the foregoing by countersigning this
letter agreement in the space indicated below, whereupon this agreement shall
take effect as an instrument under seal for all purposes.
Sincerely,
[Insert Purchaser Name]
By: __________________________________
Name:
Title:
CONFIRMED AND AGREED:
[Insert Seller Name]
By: ______________________________________
Name:
Title:
iv
