EXHIBIT 99.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is entered into as of the 28th day of August, 2002, by and
between CITIBANK, N.A., a national banking association (the "Seller"), and BP
000 XXXX XXXXXX LLC, a Delaware limited liability company (the "Purchaser").
W I T N E S S E T H
WHEREAS, the land described in EXHIBIT A attached hereto (the "Land") and known
as 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, together with the building and all other
improvements erected thereon (the "Building") and appurtenances thereto are
subject to the condominium form of ownership pursuant to the terms of that
certain Second Amended and Restated Declaration of Condominium dated as of
January 1, 1995 and recorded October 2, 1997 in Reel 2502, Page 334 in the
Office of the Register of the City of New York, County of New York (the
"Condominium Declaration");
WHEREAS, the Condominium Declaration established and/or confirmed a plan for the
creation of a condominium known as The 000 Xxxx Xxxxxx Condominium (the
"Condominium");
WHEREAS, Seller is the fee owner of the premises described in EXHIBIT B-1
attached hereto and referred to as "Unit 1" in the Condominium Declaration
("Unit 1");
WHEREAS, Seller is the fee owner of the premises described in EXHIBIT B-2
attached hereto and referred to as "Unit 2" in the Condominium Declaration
("Unit 2");
WHEREAS, Xxxx 0 and Unit 2 represent all of the units in the Condominium (Unit 1
and Unit 2 are sometimes collectively referred to as the "Units", and each of
Unit 1 and Unit 2 are sometimes individually referred to as a "Unit");
WHEREAS, Seller wishes to sell the Property (as such term is hereinafter
defined) to Purchaser;
WHEREAS, Purchaser desires to purchase the Property from Seller;
WHEREAS, Purchaser has agreed to lease to Seller, and Seller has agreed to lease
from Purchaser, the Citi Branch Leased Premises (as such term is hereinafter
defined) in the manner hereinafter set forth; and
WHEREAS, Purchaser has agreed to lease to Citigroup (as such term is hereinafter
defined), and Citigroup has agreed to lease from Purchaser, the Citi Office
Leased Premises (as such term is hereinafter defined) in the manner hereinafter
set forth;
WHEREAS, Purchaser has agreed to lease to Citigroup, and Citigroup has agreed to
lease from Purchaser, the Citi Retail Leased Premises (as such term is
hereinafter defined) in the manner hereinafter set forth;
WHEREAS, the parties hereto are desirous of setting forth their respective
rights and obligations with respect to the transactions contemplated by this
Agreement;
1
NOW THEREFORE, in consideration of the mutual promises herein set forth and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Purchaser agree as follows:
DEFINITIONS
DEFINITIONS. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
"ADJOURNED CLOSING DATE" has the meaning given to such term in Section 4.1(c) of
this Agreement.
"ADJUSTMENT DATE" has the meaning given to such term in Section 6.1(a) of this
Agreement.
"AGREEMENT" means this Purchase and Sale Agreement, including all Exhibits and
Schedules hereto.
"AMERINDO" has the meaning given to such term in Section 6.2 of this Agreement.
"AMERINDO LEASE" means that certain Amended and Restated Office Space Lease
dated as of March 21, 1997 between Seller's predecessor in interest and
Amerindo, as amended by a certain First Lease Amendment dated as of March 24,
2000 between Seller's predecessor in interest and Amerindo and as modified by a
certain Partial Surrender Agreement dated as of July, 2002 between Seller and
Amerindo.
"APPROVED PURCHASE ORDERS" has the meaning given to such term in Section 6.7 of
this Agreement.
"XXXX OF SALE" has the meaning given to such term in Section 5.2(b) of this
Agreement.
"BOARD OF MANAGERS" means the Board of Managers of the Condominium.
"BUILDING" has the meaning given to such term in the first "WHEREAS" clause of
this Agreement.
"BUSINESS DAY" has the meaning given to such term in Section 2.2 of this
Agreement.
"CITI BRANCH LEASE" has the meaning given to such term in Section 2.4 of this
Agreement.
"CITI BRANCH LEASED PREMISES" means the space demised to Seller pursuant to the
terms of the Citi Branch Lease.
"CITI BRANCH LEASE ESTOPPEL" has the meaning given to such term in Section
5.2(q) of this Agreement.
"CITI BRANCH LEASE SNDA" has the meaning given to such term in Section 5.4(d) of
this Agreement.
2
"CITIGROUP" means Citigroup Inc., a Delaware corporation.
"CITI OFFICE LEASE" has the meaning given to such term in Section 2.4 of this
Agreement.
"CITI OFFICE LEASE ESTOPPEL" has the meaning given to such term in Section
5.2(r) of this Agreement.
"CITI OFFICE LEASE SNDA" has the meaning given to such term in Section 5.4(g) of
this Agreement.
"CITI OFFICE LEASED PREMISES" means the space demised to Citigroup pursuant to
the terms of the Citi Office Lease.
"CITI RETAIL LEASE" has the meaning given to such term in Section 2.4 of this
Agreement.
"CITI RETAIL LEASED PREMISES" means the space demised to Citigroup pursuant to
the terms of the Citi Retail Lease.
"CITI RETAIL LEASE ESTOPPEL" has the meaning given to such term in Section
5.2(s) of this Agreement.
"CITI RETAIL LEASE SNDA" has the meaning given to such term in Section 5.4(j) of
this Agreement.
"CITY TRANSFER TAX" has the meaning given to such term in Section 5.5(b) of this
Agreement.
"CLOSING" means the consummation of transactions described in Article II hereof.
"CLOSING DATE" means the date upon which the Closing shall occur, which date
shall in no event or under any circumstance (but subject to Section 5.1) be
later than the Outside Closing Date (as hereinafter defined), TIME BEING OF THE
ESSENCE.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION AGREEMENTS" has the meaning given to such term in Section 10.1(m) of
this Agreement.
"COMMITMENT" has the meaning given to such term in Section 4.1(a) of this
Agreement.
"COMMON ELEMENTS" has the meaning given to such term in the Condominium
Declaration.
"CONDOMINIUM" has the meaning given to such term in the second "WHEREAS" clause
of this Agreement.
"CONDOMINIUM AGREEMENT" has the meaning given to such term in Section 5.9 of
this Agreement.
3
"CONDOMINIUM DECLARATION" has the meaning given to such term in the first
"WHEREAS" clause of this Agreement.
"CONTRACTED PURCHASE ORDER AMOUNT" has the meaning given to such term in Section
6.7 of this Agreement.
"CONTRACTS" means the service, supply, management, leasing, franchise,
maintenance, security and all other agreements or contracts (including any
amendment, modification or amendment and restatement of any of the foregoing)
entered into in connection with, and exclusively relating to, the operation,
leasing, maintenance and repair of the Property (and not any other property)
including, without limitation, (i) the construction contracts and other
agreements with respect to work that is normally capitalized instead of expensed
in accordance with generally accepted accounting principles consistently
applied, which is being performed or to be performed at the Property, (ii) any
leases of any of the personal property included in this transaction, (iii) any
contracts pertaining to displays of artwork or similar matters, (iv) any
contracts with the City of New York or any other municipal, governmental or
quasi-governmental entity or agency relating to the Property or its use,
operation, leasing, maintenance or repair and (v) an undivided interest
attributable to Seller's interest in all contracts entered into by the Board of
Managers. For the avoidance of doubt, the term "Contracts" expressly excludes
therefrom all agreements or contracts entered into by or on behalf of Seller
which, relative to the rest of the Building, exclusively relate to any portion
of the Property which will constitute part of the Citi Office Leased Premises,
the Citi Branch Leased Premises or the Citi Retail Leased Premises, provided
that such Contracts would not be required for Purchaser to fulfill its
obligations under the Citi Office Lease, the Citi Branch Lease or the Citi
Retail Lease.
"CONTROLLED AFFILIATE" has the meaning given to such term in Section 16.5 of
this Agreement.
"CURRENT RECEIVABLES" has the meaning given to such term in Section 6.2 of this
Agreement.
"DEED" has the meaning given to such term in Section 5.2(a) of this Agreement.
"DEPOSIT" has the meaning given to such term in Section 2.2(a) of this
Agreement.
"ESCROW AGENT" has the meaning given to such term in Section 2.2(a) of this
Agreement.
"EXCLUDED PROPERTY" means (i) the art work located in the lobby of the Building
and more particularly described on SCHEDULE 1.1 attached hereto, which art work
is owned, and will continue to be owned, by Seller after the Closing Date and
will continue to be located in the lobby of the Building in accordance with the
provisions of the Citi Office Lease, (ii) all fixtures, furniture, furnishings,
equipment or other personal property (including, without limitation, trade
fixtures in, on, around or affixed to the Property) owned or leased by the Board
of Managers, any tenant, managing agent, leasing agent, contractor, or employee
at the Property, (iii) the Back-Up Power System (as such term is defined in the
Citi Office Lease) and all fixtures, furniture, furnishings, equipment or other
personal property (including, without limitation, trade fixtures in, on, around
or affixed to the Property) located in the Citi Office Leased Premises, the Citi
Branch Leased Premises and/or the Citi Retail Leased Premises which is owned or
leased by
4
Seller or otherwise used by Seller in connection with the operation of its
business (in contradistinction to the operation of the Building), and (iv) all
tenant improvements installed prior to the date hereof, or in progress on the
Closing Date, in any portion of the Property which will constitute part of the
Citi Office Leased Premises, the Citi Branch Leased Premises or the Citi Retail
Leased Premises.
"EXISTING LEASES" means Leases executed and delivered prior to the Closing Date.
"EXISTING MANAGEMENT AGREEMENT" means the existing management agreement
previously entered into between Seller and Existing Property Manager with
respect to the management of the Property.
"EXISTING PROPERTY MANAGER" means Xxxxxxx & Wakefield, Inc.
"FIRPTA AFFIDAVIT" has the meaning given to such term in Section 5.2(g) of this
Agreement.
"LAND" has the meaning given to such term in the first "WHEREAS" clause of this
Agreement.
"LEASES" means all space leases, licenses, occupancy agreements or other
agreements, granting any rights of use, occupancy or possession in or to the
Property or any portion thereof, and shall include, without limitation, all
guaranties of such agreements, as all of the same may have been amended,
modified and/or restated.
"XXXXXX" means Xxxxxx Brothers, Inc., a Delaware corporation.
"XXXXXX BROTHERS LEASE" means that certain Lease dated October 1, 2001 between
Seller, as landlord and Xxxxxx, as tenant, as amended by that certain letter
agreement dated as of October 1, 2001, as further amended by that certain First
Supplemental Agreement dated as of January 1, 2002, as further amended by that
certain Second Supplemental Agreement dated as of November 15, 2001 and as
further amended by that certain letter agreement dated as of December 13, 2001.
"LETTER OF CREDIT" has the meaning given to such term in Section 2.2(d) of this
Agreement.
"NEW CLOSING NOTICE" has the meaning given to such term in Section 4.4 of this
Agreement.
"NON-OBJECTIONABLE ENCUMBRANCES" has the meaning given to such term in Section
4.1(c) of this Agreement.
"NOTICES" has the meaning given to such term in Section 11.1 of this Agreement.
"OTHER TENANTS" has the meaning given to such term in Section 5.2(t) of this
Agreement.
"OUTSIDE CLOSING DATE" has the meaning given to such term in Section 5.1 of this
Agreement.
"PERMITTED ENCUMBRANCES" has the meaning given to such term in Section 3.1 of
this Agreement.
"PROPERTY" means the Land, the Units, the Building and all other improvements,
fixtures, appurtenances, equipment and other personal property (other than the
Excluded Property) owned
5
or leased by the Seller in connection with the operation and management of the
Units, as more particularly described in Section 2.3 below.
"PROPERTY TAXES" has the meaning given to such term in Section 6.1(a)(i) of this
Agreement.
"PURCHASE PRICE" means One Billion Sixty Million and 00/100 Dollars
($1,060,000,000).
"PURCHASER" has the meaning given to such term in the preamble to this
Agreement.
"PURCHASER INDEMNIFIED PARTIES" means Purchaser and any disclosed or undisclosed
officer, director, employee, trustee, shareholder, partner, principal, parent,
subsidiary or other direct or indirect affiliate of Purchaser, or any officer,
director, employee, trustee, shareholder, partner or principal of any such
shareholder, partner, principal, parent, subsidiary or other direct or indirect
affiliate or any advisor or consultant of any of the foregoing.
"RECEIVABLES" has the meaning given to such term in Section 6.2 of this
Agreement.
"REPRESENTATIVES" means, with respect to any person or entity, such person's or
entity's agents or representatives, including, without limitation, its
directors, officers, employees, affiliates, partners, agents, contractors,
engineers, attorneys, accountants, consultants, brokers or financial advisors.
"REQUIRED PERCENTAGE" has the meaning given to such term in Section 5.2(t) of
this Agreement.
"SCHEDULED CLOSING DATE" has the meaning given to such term in Section 5.1 of
this Agreement.
"SELLER" has the meaning given to such term in the preamble to this Agreement.
"SELLER CAPITAL IMPROVEMENTS/REPAIRS" has the meaning given to such term in
Section 8.1(b)(iv) of this Agreement.
"SELLER ESTOPPEL" has the meaning given to such term in Section 5.2(t) of this
Agreement.
"SELLER INDEMNIFIED PARTIES" means Seller and any disclosed or undisclosed
officer, director, employee, trustee, shareholder, partner, principal, parent,
subsidiary or other direct or indirect affiliate of Seller, or any officer,
director, employee, trustee, shareholder, partner or principal of any such
shareholder, partner, principal, parent, subsidiary or other direct or indirect
affiliate or any advisor or consultant of any of the foregoing.
"SELLER KNOWLEDGE INDIVIDUALS" has the meaning given to such term in Section
10.1 of this Agreement.
"STANDARD TENANT ESTOPPEL" has the meaning given to such term in Section 5.2(q)
of this Agreement.
"STATE TRANSFER TAX" has the meaning given to such term in Section 5.5(b) of
this Agreement.
6
"SUBORDINATION AGREEMENT" has the meaning given to such term in Section 5.9 of
this Agreement.
"SYSTEM" has the meaning given to such term in Section 6.7 of this Agreement.
"TAKING" has the meaning given to such term in Section 14.1 of this Agreement.
"TENANT ALLOWANCES" has the meaning given to such term in Section 6.5 of this
Agreement.
"TITLE COMPANIES" means, collectively, Chicago Title Insurance Company, Lawyers
Title Insurance Corporation and First American Title Insurance Company, through
their respective New York City offices.
"TITLE CURE NOTICE" has the meaning given to such term in Section 4.1(c) of this
Agreement.
"TITLE CURE PERIOD" has the meaning given to such term in Section 4.1(c) of this
Agreement.
"TITLE OBJECTIONS" has the meaning given to such term in Section 4.1(a) of this
Agreement.
"TITLE POLICY" has the meaning given to such term in Section 4.7 of this
Agreement.
"UNIT 1" has the meaning given to such term in the third "WHEREAS" clause of
this Agreement.
"UNIT 2" has the meaning given to such term in the fourth "WHEREAS" clause of
this Agreement.
"UNIT(S)" has the meaning given to such term in the fifth "WHEREAS" clause of
this Agreement.
"UPDATE EXCEPTION" has the meaning given to such term in Section 4.1(b) of this
Agreement.
"UPDATE OBJECTION DATE" has the meaning given to such term in Section 4.1(b) of
this Agreement.
PURCHASE AND SALE; LEASEBACK
PURCHASE AND SALE. Subject to the terms and provisions set forth in this
Agreement, on the Closing Date: (a) Seller shall transfer or cause to be
transferred all of Seller's right, title and interest in the Property to
Purchaser and (b) Purchaser shall pay the Purchase Price to Seller as provided
in Section 2.2.
PAYMENT OF THE PURCHASE PRICE. The Purchase Price (subject to the
prorations described below) is payable by Purchaser as follows:
Simultaneously with the execution of this Agreement by Purchaser,
Purchaser is delivering to Lawyers Title Insurance Corporation, as escrow agent
(the "Escrow Agent") the sum of Seventy-Five Million Dollars ($75,000,000),
which payment is to be made by wire transfer to a bank
7
account designated by Escrow Agent in writing (such deposit which is made
pursuant to this subsection (a) being hereinafter referred to as the "Deposit").
The Deposit shall be held by Escrow Agent in accordance with the terms of that
certain Escrow Agreement of even date herewith between Seller, Purchaser and
Escrow Agent in the form of EXHIBIT C attached hereto.
Upon receipt by Escrow Agent of the Deposit, Escrow Agent shall cause the
same to be deposited into an interest bearing account in the name of Escrow
Agent, as escrow agent, and Purchaser shall have the right to direct the
investment of all sums contained therein (it being agreed that Purchaser shall
direct that such sums be invested in, and Escrow Agent shall cause such sums to
be invested in, obligations or securities rated A-1+ or better by Standard &
Poor's and which are payable on demand or having a maturity not later than the
business day preceding the Scheduled Closing Date or any Adjourned Closing Date,
if applicable). Escrow Agent shall not be liable for the loss of principal or
interest on any investment made pursuant to the foregoing direction. If the
Closing shall occur, the interest on the Deposit, if any, shall be paid to
Purchaser, and, if the Closing shall not occur and this Agreement shall be
terminated, then the interest earned on the Deposit shall be paid to the party
entitled to receive the Deposit as provided in this Agreement. The party
receiving such interest shall pay any income taxes thereon. Seller represents
and warrants that Seller's tax identification number is 00-0000000. Purchaser
represents and warrants that Purchaser's tax identification number is
00-0000000.
At the Closing, the Deposit shall be paid to Seller and Purchaser shall
deliver the balance of the Purchase Price (i.e., the Purchase Price less the
Deposit) to Seller, as adjusted pursuant to Article VI hereof, which payment
shall be made by wire transfer on or before 2:00 p.m. Eastern Time on the
Closing Date to a bank account designated by Seller in writing.
Purchaser shall have a one time right to substitute a letter of credit
(the "Letter of Credit") for all or any portion of the cash Deposit on the
following terms and conditions:
The Letter of Credit shall be in a minimum amount of $70,000,000, shall
be issued not later than September 18, 2002, shall be issued for the account of
Purchaser in favor of Seller, as the named beneficiary, by a New York City money
center bank reasonably acceptable to Seller and shall be substantially in the
form attached hereto as EXHIBIT C-1, and shall have an expiration date of
October 10, 2002, it being agreed that if the Closing is extended by Seller or
Purchaser to a date later than the Outside Closing Date in accordance with the
provisions of this Agreement, Purchaser shall not later than the Outside Closing
Date effect an extension of expiration date of the Letter of Credit to a date
which is ten (10) business days after the date to which the Closing has been so
extended. If the expiration date is not timely extended by Purchaser, Seller
shall have the absolute and unconditional right to draw the Letter of Credit in
full and to cause the proceeds thereof to be deposited with Escrow Agent as a
cash Deposit, to be thereafter held and applied by Escrow Agent, together with
any other cash Deposit then held by Escrow Agent, in accordance with the
provisions of the Escrow Agreement.
If Purchaser shall deliver to Seller a substitute Letter of Credit in
accordance with the provisions of this Section 2.2(d) for any portion of the
cash Deposit, Seller and Purchaser shall contemporaneously with such delivery
direct Escrow Agent to release to Purchaser a portion of the cash Deposit
deposited by Purchaser with Escrow Agent in accordance with the provisions of
8
Section 2.2(a) of this Agreement equal to the face amount of the Letter of
Credit, it being agreed, however that Seller shall not be obligated to accept a
substitute Letter of Credit unless the face amount thereof plus the amount
remaining on deposit in the Escrow Account is equal to at least $75,000,000.
If Purchaser shall deliver to Seller a substitute Letter of Credit in
accordance with the provisions of this Section 2.2(d), then notwithstanding
anything to the contrary contained in this Section 2.2, at the Closing (a)
Purchaser shall pay the full Purchase Price (less any cash Deposit then held by
Escrow Agent) to Seller, as adjusted pursuant to Article VI hereof, which
payment shall be made by wire transfer on or before 2:00 p.m. Eastern Time on
the Closing Date to a bank account designated by Seller in writing, and (b)
Seller shall upon receipt of the full Purchase Price shall deliver the original
of the Letter of Credit to Purchaser for cancellation.
If Purchaser shall deliver to Seller a substitute Letter of Credit in
accordance with the provisions of this Section 2.2(d), and if Purchaser shall
default in the performance of its obligations under this Agreement, Seller shall
have the absolute and unconditional right to draw the Letter of Credit in full
and to cause the proceeds thereof to be deposited with Escrow Agent as a cash
Deposit , to be thereafter held and applied by Escrow Agent, together with any
other cash Deposit then held by Escrow Agent, in accordance with the provisions
of the Escrow Agreement.
If Purchaser shall deliver to Seller a substitute Letter of Credit in
accordance with the provisions of this Section 2.2(d), and if Seller shall
default in the performance of its obligations under this Agreement, Seller shall
have the absolute and unconditional obligation to return the original Letter of
Credit to Purchaser for cancellation.
As used in this Agreement, the term "business day" shall mean every day
other than Saturdays, Sundays, all days observed by the federal or New York
State government as legal holidays and all days on which commercial banks in New
York State are required by law to be closed.
SCOPE OF SALE. Included in the sale of the Property is all of the
Seller's right, title and interest in and to the following:
an undivided 100% interest in the Common Elements;
all easements, covenants, servitudes and other rights now belonging or
appertaining to, or comprising a part of, the Land or the Units, and all right,
title and interest of the Seller in and to any land lying in the bed of any
street, road, avenue or alley, open or closed, in front of or behind or
otherwise adjoining the Land or the Units and to the center line thereof;
the buildings, structures, fixtures and other improvements, and the
furniture, equipment, supplies, tools, machinery, security systems, computer
software and other personal property which are now located on or attached to the
Land or the Units, and any leases under which any of the same may be under lease
to the Seller for use at the Units;
to the extent they may be transferred under applicable law, all licenses,
permits, approvals and authorizations required for the use and operation of all
or any part of the Units;
9
Intentionally Omitted;
to the extent they may be transferred, warranties covering any portion of
the Units;
the Leases, together with (but subject to the terms of Section 9.2 of
this Agreement) all security deposits paid under the Leases;
all existing surveys, blueprints, drawings, plans and specifications
(including, without limitation, structural, HVAC, mechanical and plumbing plans
and specifications) pertaining to the Units in Seller's possession or control;
all available tenant lists, lease files, correspondence, documents,
booklets, manuals and promotional and advertising materials concerning the Units
or used in connection with the operation of the Units, the Condominium, the
Common Elements, or the Building, or any part thereof, to the extent any of the
foregoing are located at the Building or the Existing Property Manager's office
or otherwise in Seller's possession and control, and shall specifically exclude
any internal books and records of Seller maintained at any of Seller's offices,
internal and external appraisals of the Property and any other privileged or
proprietary information not otherwise in the possession of the Existing Property
Manager; and
all other intangible personal property owned by the Seller or in which
the Seller otherwise has an interest, and used solely in connection with or
arising in connection with the operation of the Building in contradistinction to
the operation of Seller's business conducted on or from the Units or any part
thereof, including, if available, telephone exchange numbers, specifically
excluding, however, any names or marks of Seller or any affiliates of Seller.
Seller and Purchaser acknowledge and agree that (i) there is expressly excluded
from the items described in (a) - (j) above all Excluded Property and (ii) the
value of the personal property that is included in the transaction contemplated
by this Agreement is DE MINIMIS and no part of the Purchase Price is allocable
thereto.
LEASEBACK. On the Closing Date, (i) Purchaser shall lease to Seller and
Seller shall lease from Purchaser the Citi Branch Leased Premises, pursuant to
the terms and conditions of the lease attached hereto as EXHIBIT D (the "Citi
Branch Lease"), (ii) Purchaser shall lease to Citigroup and Citigroup shall
lease from Purchaser the Citi Office Leased Premises, pursuant to the terms and
conditions of the lease attached hereto as EXHIBIT E (the "Citi Office Lease")
and (iii) Purchaser shall lease to Citigroup and Citigroup shall lease from
Purchaser the Citi Retail Leased Premises, pursuant to the terms and conditions
of the lease attached hereto as EXHIBIT F (the "Citi Retail Lease").
STATUS OF THE TITLE
PERMITTED ENCUMBRANCES. Subject to the terms and provisions of this
Agreement, Seller's interest in the Property shall be sold, assigned and
conveyed by Seller to Purchaser, and Purchaser shall accept same, subject only
to the following (collectively, the "Permitted Encumbrances"):
10
the state of facts disclosed on the survey prepared by Xxxx X. Xxxxxx -
X.X. Xxxxxxx, Inc. dated September 1, 1987, and last redated by visual
examination on August 28, 2002, by Xxxxxx X. Links.;
the standard printed exclusions from coverage contained in the ALTA form
of owners title policy currently in use in New York, with the standard New York
endorsement, and the easements, conditions, restrictions, agreements and
encumbrances as set forth on SCHEDULE 3.1(b) annexed hereto;
Non-Objectionable Encumbrances (as hereinafter defined) and any liens,
encumbrances or other title exceptions approved or waived by Purchaser as
provided in Section 4.1
Property Taxes (as hereinafter defined) which are a lien but not yet due
and payable, subject to apportionment in accordance with Article VI hereof;
any laws, rules, regulations, statutes, ordinances, orders or other legal
requirements affecting the Property, including, without limitation, those
relating to zoning and land use;
any utility company rights, easements and franchises for electricity,
water, steam, gas, telephone or other service or the right to use and maintain
poles, lines, wires, cables, pipes, boxes and other fixtures and facilities in,
over, under and upon the Property, provided that, in the case of any of the
foregoing items which shall not be of record, the same do not materially
adversely affect the present use of the Property;
any installment not yet due and payable of assessments imposed after the
date hereof and affecting the Property or any portion thereof;
all violations of laws, rules, regulations, statutes, ordinances, orders
or requirements, now or hereafter issued or noted;
the Condominium Agreement; and
the rights and interests held by tenants under the Leases in effect at
Closing.
TITLE INSURANCE, LIENS.
TITLE OBJECTIONS. 1. The parties acknowledge that Seller (at Purchaser's
expense) has delivered or caused to be delivered to Purchaser, and Purchaser has
had an opportunity to review, title commitment number LT2K0296 issued by Lawyers
Title Insurance Corporation, title commitment number 3102-00661 issued by
Chicago Title Insurance Company and title commitment number
NY-00001540-NYNY-N4002 issued by First American Title Insurance Company of New
York (collectively, the "Commitment") for an owner's policy of title insurance
with respect to Purchaser's acquisition of the Property. Purchaser shall
purchase and accept such owner's policy of title insurance from the Title
Companies, as co-insurers on an equal (i.e., 1/3rd each) basis and Purchaser
shall cause any entity financing Purchaser's acquisition of the Property to
similarly accept its mortgagee's policy of title insurance from the Title
Companies on the
11
same equal basis. Purchaser has heretofore given Seller notice of Purchaser's
objections (the "Title Objections") to those liens, encumbrances or other title
exceptions (other than Permitted Encumbrances) revealed by the Commitment or has
otherwise waived its right to do so. Any liens, encumbrances and other title
exceptions appearing on the Commitment which have not been expressly objected to
in a written notice to Seller prior to the date hereof shall not constitute
Title Objections and shall be deemed Permitted Encumbrances.
If, prior to the Closing Date, any of the Title Companies shall deliver
any update to the Commitment which discloses additional liens, encumbrances or
other title exceptions which were not disclosed by the Commitment ) (each, an
"Update Exception"), then Purchaser shall have until the earlier of (x) five (5)
business days after delivery of such update or (y) the business day immediately
preceding the Closing Date, time being of the essence (the "Update Objection
Date") to deliver notice to Seller objecting to any of the Update Exceptions. If
Purchaser fails to deliver such objection notice by the Update Objection Date,
Purchaser shall be deemed to have waived its right to object to any Update
Exceptions (and the same shall not be deemed Title Objections and shall be
deemed Permitted Encumbrances). If Purchaser shall deliver such objection notice
by the Update Objection Date, any Update Exceptions which are not objected to in
such notice shall not constitute Title Objections and shall be deemed Permitted
Encumbrances.
Purchaser shall not be entitled to object to, and shall be deemed to have
approved, any liens, encumbrances or other title exceptions (and the same shall
not constitute Title Objections but shall be deemed Permitted Encumbrances) (1)
over which the Title Companies are willing to insure (without additional cost to
Purchaser), (2) against which the Title Companies are willing to provide
affirmative insurance (without additional cost to Purchaser), or (3) which will
be extinguished upon the transfer of the Property (collectively, the
"Non-Objectionable Encumbrances"). Notwithstanding anything to the contrary
contained herein, if Seller is unable to eliminate the Title Objections set
forth in the Commitment or any update thereto by the Scheduled Closing Date,
unless the same are waived by Purchaser without any abatement in the Purchase
Price, Seller may, upon at least two (2) business days' prior notice (the "Title
Cure Notice") to Purchaser (except with respect to matters first disclosed
during such two (2) business day period, as to which matters notice may be given
at any time through and including the Scheduled Closing Date) adjourn the
Scheduled Closing Date (such date to which Seller adjourns the Scheduled Closing
Date is herein referred to as the "Adjourned Closing Date"), for a period not to
exceed ninety (90) days ("the Title Cure Period"), in order to attempt to
eliminate such exceptions.
ELECTIONS. If Seller is unable to eliminate any Title Objection within
the Title Cure Period, unless the same is waived by Purchaser, then, Purchaser
may (i) accept the Property subject to such Title Objection without abatement of
the Purchase Price, in which event (x) such Title Objection shall be deemed to
be, for all purposes, a Permitted Encumbrance, (y) Purchaser shall close
hereunder notwithstanding the existence of same, and (z) Seller shall have no
obligations whatsoever after the Closing Date with respect to Seller's failure
to cause such Title Objection to be eliminated, or (ii) terminate this Agreement
by notice given to Seller within ten (10) business days following expiration of
the Title Cure Period, time being of the essence, in which event Purchaser shall
be entitled to a return of the Deposit (together with any interest accrued
thereon). If Purchaser shall fail to deliver the termination notice described in
clause (ii) within the 10
12
business day period described therein, time being of the essence, Purchaser
shall be deemed to have made the election under clause (i). Upon the timely
giving of any termination notice under clause (ii), this Agreement shall
terminate and neither party hereto shall have any further rights or obligations
hereunder other than those which are expressly provided to survive the
termination hereof.
NO ACTIONS. It is expressly understood that in no event shall Seller be
required to bring any action or institute any proceeding, or to otherwise incur
any costs or expenses in order to attempt to eliminate any Title Objections or
to otherwise cause title in the Property to be in accordance with the terms of
this Agreement on the Closing Date. Notwithstanding the foregoing, Seller shall
be obligated to expend up to $20,000,000 to cure any Title Objection which can
be satisfied, cured, discharged or otherwise removed by the payment of a sum of
money (including, without limitation, by depositing up to $20,000,000 with the
Title Companies in accordance with the provisions of Section 4.5).
RESCHEDULED CLOSING DATE. If Seller shall have adjourned the Scheduled
Closing Date in order to cure Title Objections in accordance with the provisions
of Section 4.1, Seller shall, upon the satisfactory cure thereof, promptly
reschedule the Scheduled Closing Date, upon at least five (5) business days'
prior notice to Purchaser (the "New Closing Notice").
DISPOSITION OF LIENS AND ENCUMBRANCES. In lieu of satisfying any liens or
encumbrances required to be satisfied under this Agreement, Seller may, at its
option, deposit with the Title Companies such sum of money or deliver to the
Title Companies such affidavits and certificates as may be determined by the
Title Companies as being sufficient to induce the Title Companies (i) to insure
Purchaser and Purchaser's successors and assigns (at the then current rate(s) of
the Title Companies) against collection of liens and/or encumbrances required to
be eliminated by Seller (as hereinabove set forth) out of or against the
Property or Purchaser or such successors and assigns, and (ii) to omit such
liens and encumbrances from any title insurance policy issued to any unrelated
arm's-length lenders of Purchaser and Purchaser's successors and assigns and the
successors and assigns of such lenders, without additional charge or premium,
and provided further that the Title Companies agree, in writing, to defend any
action commenced by the holder of any lien or encumbrance so insured against to
enforce or collect the same at the sole cost and expense of the Title Companies,
in which event such liens and encumbrances shall not be objections to title.
SELLER AFFIDAVITS. If the Commitment discloses judgments, bankruptcies or
other returns against other persons having names the same as, or similar to,
that of Seller, Seller shall deliver to the Title Companies affidavits showing
that such judgments, bankruptcies or other returns are not against Seller in
order to induce the Title Companies to omit exceptions with respect to such
judgments, bankruptcies or other returns or to insure over same. In addition,
Seller shall deliver to the Title Companies, all customary affidavits required
to omit (i) exceptions with respect to municipal emergency repairs, (ii)
exceptions with respect to (A) retroactive street vault charges, together with
interest and penalties thereon, and (B) work done by the City of New York upon
the Property or any demand made by the City of New York for any such work that
may result in charges by the New York City Department of Environmental
Protection for water tap closings or any related work, (iii) exceptions with
respect to fees for inspections, reinspections,
13
examinations and services performed by the Department of Buildings or for
permits issued by the Department of Buildings, and (iv) any other exceptions of
a similar type; provided that any of the exceptions enumerated in clauses (i) -
(iv) are customarily omitted from a title report on the basis of an affidavit
from the owner of the property being insured, without the expenditure of money
by such owner.
TITLE INSURANCE. At Closing, the Title Companies shall issue to Purchaser
or be irrevocably committed to issue to Purchaser an ALTA 1992 owner's form
title insurance policy (the "Title Policy"), in the amount of the Purchase
Price, insuring that fee simple title to the Property is vested in Purchaser
subject only to the Permitted Encumbrances. Purchaser shall be entitled to
request that the Title Companies provide such endorsements (or amendments) to
the Title Policy as Purchaser may reasonably require, provided that (a) such
endorsements (or amendments) shall be at no cost to, and shall impose no
additional liability on Seller, (b) Purchaser's obligations under this Agreement
shall not be conditioned upon Purchaser's ability to obtain such endorsements
and, if Purchaser is unable to obtain such endorsements, Purchaser shall
nevertheless be obligated to proceed to close the transaction contemplated by
this Agreement without reduction or set off against the Purchase Price, and (c)
the Closing shall not be delayed as a result of Purchaser's request.
CLOSING
CLOSING. The Closing of the purchase and sale of the Property shall be
held on September 25, 2002 (such date, or the date Seller sets for the Closing
if Seller shall elect to extend this date pursuant to Section 4.1 or Section
5.2(u), or the date to which Seller or Purchaser adjourns the Closing in
accordance with the provisions of this Section 5.1, is herein referred to as the
"Scheduled Closing Date"), at 9:30 a.m. Eastern Time, at the offices of Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Seller or Purchaser shall have the right to adjourn the date of Closing from
September 25, 2002 until September 27, 2002 (the "Outside Closing Date") by
written notice to the other party given on or before the originally Scheduled
Closing Date. In order to facilitate the timely and expeditious closing of title
and the payment of the Purchase Price on the Scheduled Closing Date, Seller and
Purchaser shall conduct and complete a comprehensive pre-closing on the business
day prior to the Scheduled Closing Date.
SELLER'S CLOSING ITEMS. At the Closing, Seller agrees to execute, deliver
and/or provide to Purchaser, or cause to be executed, delivered and provided to
Purchaser, the following:
a bargain and sale deed for the Property with covenants against grantor's
acts and otherwise in accordance with all requirements of the Condominium
Declaration and applicable law (the "Deed"), in the form attached hereto as
EXHIBIT G.
a xxxx of sale covering the personal property (other than the Excluded
Personal Property) at the Property in the form attached hereto as EXHIBIT H (the
"Xxxx of Sale");
14
at Purchaser's request, an assignment or substitution of Seller's
interest or position in the litigation and proceedings, if any, described on
SCHEDULE 10.1(C) attached hereto;
a Secretary's or an Assistant Secretary's Certificate certifying that the
Board of Directors of Seller has duly adopted resolutions authorizing the within
transaction and an executed and acknowledged Incumbency Certificate certifying
to the authority of the officers of such entity to execute the documents to be
delivered by such entity on the Closing Date;
a copy of the Articles of Association and the By-Laws of Seller,
certified to be true and correct by an officer of Seller;
a certificate from the Comptroller of Currency as to Seller's formation
under the laws of the United States of America;
a "non-foreign person" certification from Seller pursuant to Section 1445
of the Code in the form attached hereto as EXHIBIT I (the "FIRPTA Affidavit");
a resignation by each member of the Board of Managers in the form
attached hereto as EXHIBIT J;
evidence of payment in full to the Board of Managers of all unpaid Common
Charges (as such term is defined in the Condominium Declaration) theretofore
assessed against the Units or otherwise payable by Seller under the Condominium
Declaration;
any bonds, warranties or guarantees, and any licenses and permits, which
are in any way applicable to the Units or any part thereof in the possession or
control of Seller;
all tenant files (including the materials described in Section 2.3(i)
hereof and all materials in the possession and control of Seller relating to the
determination, calculation and billing of operating expenses at the Building),
architectural, mechanical or electrical plans and specifications, interior floor
plans, "as built" plans and surveys relating to the Units and/or any tenant
spaces, as well as all changes thereto, in the possession or control of Seller;
notices to all tenants of the Units informing them of the sale of the
Property to Purchaser in the form attached hereto as EXHIBIT K;
evidence of the termination of all Contracts set forth in SCHEDULE
10.1(i) attached hereto as well as the Existing Management Agreement.
a certificate, dated as of the Closing Date, stating that the
representations and warranties of Seller contained in this Agreement are true
and correct in all material respects as of the Closing Date (except to the
extent Seller has identified matters which have occurred with respect to Leases
and leasing activities at the Property or security deposits held under Leases or
other activities, but only to the extent any of the foregoing shall be expressly
permitted under Section 8.1 of this Agreement and with respect to which Seller
promptly delivers notice thereof to Purchaser or shall have otherwise been be
approved by Purchaser);
15
all original Leases and all original Contracts with respect to the Units
(including, without limitation, all amendments, modifications, side letters or
agreements with respect thereto) and, in the case of Leases, to the extent in
Sellers possession or control, all correspondence relating thereto; provided,
however, that if an original thereof is not in Seller's possession or under
Seller's control, Seller shall deliver a copy thereof to Purchaser, certified to
be true and complete;
a schedule, dated as of the Closing Date, identifying each of the tenants
of each of the Units, which schedule will be certified to be true, complete and
correct in all material respects as of the date thereof;
the cash security deposits (together with interest accrued thereon, if
any, less a 1% administrative fee if such cash security deposit has been
deposited in an interest bearing account) and all letters of credit or other
non-cash security deposits with respect to the Leases but only to the extent the
same have not been applied in accordance with the Leases or returned to tenants
and relate to tenants occupying space in the Units on the Closing Date pursuant
to Leases then in effect;
an estoppel certificate substantially in the form contemplated by the
Citi Branch Lease, dated as of the Closing Date, duly executed by Seller as the
tenant under the Citi Branch Lease (the "Citi Branch Lease Estoppel");
an estoppel certificate substantially in the form contemplated by the Citi
Office Lease, dated as of the Closing Date, duly executed by Citigroup as the
tenant under the Citi Office Lease (the "Citi Office Lease Estoppel");
an estoppel certificate substantially in the form contemplated by the
Citi Retail Lease, dated as of the Closing Date, duly executed by Citigroup as
the tenant under the Citi Retail Lease (the "Citi Retail Lease Estoppel");
executed tenant estoppel certificates, dated as of a date not earlier
than forty five (45) days prior to the Closing Date, from (i) Xxxxxx under the
Xxxxxx Brothers Lease, substantially in the form contemplated by the Xxxxxx
Brothers Lease, and (ii) such other tenants of the Units (other than Seller,
Citigroup and Xxxxxx) (the "Other Tenants"), each substantially in the form
attached hereto as Exhibit O (the "Standard Tenant Estoppel"), and subject to
the provisions of Section 16.16 of this Agreement, as are necessary to cover one
hundred (100%) percent of the total leased space in the Units (the "Required
Percentage"), inclusive of the space leased pursuant to the Citi Branch Lease,
the Citi Office Lease, the Citi Retail Lease and the Xxxxxx Lease; provided,
however, if for any reason Seller is unable to deliver any estoppels from Other
Tenants on the Scheduled Closing Date such that Seller is unable to deliver
tenant estoppels satisfying the Required Percentage, Seller shall be obligated
to either (i) deliver a Seller estoppel certificate (a "Seller Estoppel") which
covers the matters such tenant was obligated to certify to under its applicable
Lease or (ii) adjourn the Closing for a period not to exceed sixty (60) days
from the Scheduled Closing Date. If Seller elects to adjourn the Closing
pursuant to clause (ii) of the preceding sentence, Seller shall be required at
the expiration of such period to deliver Seller Estoppels for each of the Other
Tenants from which Seller has been unable to obtain
16
Standard Tenant Estoppels during such sixty (60) day period and Seller and
Purchaser shall close the purchase and sale hereunder in accordance with the
provisions of this Agreement. Seller shall use commercially reasonable efforts
to obtain such missing Standard Tenant Estoppels during such sixty (60) day
period. Any Seller Estoppel shall by its terms survive for only one (1) year
following the Closing Date; provided, however, if at any time prior to the
expiration of such one (1) year period, Purchaser shall receive an estoppel
certificate from the tenant covered in any such Seller Estoppel, then so long as
Purchaser would have been obligated to accept such estoppel pursuant to Section
16.17 of this Agreement, such Seller Estoppel shall be returned to Seller and
shall be deemed null and void and of no further force or effect;
the affidavits or similar documents contemplated by Section 4.6 of this
Agreement; and
such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transactions that are the subject of this
Agreement.
Seller shall be deemed to have delivered the items set forth in clauses (j), (k)
and (n) above if the same are left in the management office of the Building on
the Closing Date.
PURCHASER'S CLOSING ITEMS. At the Closing, Purchaser agrees to execute,
deliver and/or provide to Seller, or cause to be executed, delivered and/or
provided to Seller, the following:
the balance of the Purchase Price (as adjusted in accordance with Article
VI of this Agreement), in the manner required by Section 2.2 of this Agreement;
if requested, a Letter of Direction from Purchaser directing Escrow Agent
to pay the Purchase Price and all other amounts due at Closing, in accordance
with the provisions of this Agreement, to Seller or any other person as Seller
shall designate;
a Secretary's Certificate certifying that the Board of Directors of
Purchaser has duly adopted resolutions authorizing the within transaction and an
executed and acknowledged Incumbency Certificate certifying to the authority of
the officers of such entity to execute the documents to be delivered by such
entity on the Closing Date;
a certificate, dated as of the Closing Date, stating that the
representations and warranties of Purchaser contained in this Agreement are true
and correct in all material respects as of the Closing Date; and
such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transactions that are the subject of this
Agreement.
DOCUMENTS JOINTLY EXECUTED BY SELLER AND PURCHASER. Seller and Purchaser
shall each execute and deliver (and, to the extent applicable, Seller shall
cause Citigroup to execute and deliver) the following documents:
the City Transfer Tax and State Transfer Tax returns provided for in
Section 5.5, to be delivered to the Title Companies;
17
the Citi Branch Lease;
a Memorandum of the Citi Branch Lease, in proper statutory form for
recording;
a subordination, non-disturbance and attornment agreement among Seller,
Purchaser and Purchaser's lender, if any, in the form attached as Exhibit H-1 of
the Citi Branch Lease (the "Citi Branch Lease SNDA");
the Citi Office Lease;
a Memorandum of the Citi Office Lease, in proper statutory form for
recording;
a subordination, non-disturbance and attornment agreement among
Citigroup, Purchaser and Purchaser's lender, if any, in the form attached as
Exhibit H-1of the Citi Office Lease (the "Citi Office Lease SNDA");
the Citi Retail Lease;
a Memorandum of the Citi Retail Lease, in proper statutory form for
recording;
a subordination, non-disturbance and attornment agreement among
Citigroup, Purchaser and Purchaser's lender, if any, in the form attached as
Exhibit H-1of the Citi Retail Lease (the "Citi Retail Lease SNDA");
an assignment and assumption of the Leases in the form attached hereto as
EXHIBIT L;
an assignment and assumption of the Contracts which Purchaser has elected
to assume pursuant to Section 5.11 of this Agreement, in the form attached
hereto as EXHIBIT M;
an assignment and assumption of Seller's obligations under that certain
Systems Agreement by and among Seller, Dai-Ichi Life Investment Properties,
Inc., The Citigroup Center Condominium and The 000 Xxxx Xxxxxx Condominium,
dated as of November 22, 2000 in the form attached hereto as EXHIBIT N;
the documentation necessary to comply with Section 5.7 of this Agreement;
the Condominium Agreement; and
such other documents as may be reasonably necessary or appropriate to
effect the consummation of the transactions that are the subject of this
Agreement.
TRANSFER AND RECORDATION TAXES. 1. At the Closing, all recording fees,
recording taxes and sales taxes, if any, imposed in connection with the
conveyance of the Property pursuant to this Agreement shall be paid by
Purchaser.
At the Closing, Seller shall pay the New York State Real Estate Transfer
Tax (the "State Transfer Tax") in accordance with Article 31 of the Tax Law of
the State of New York, and the New York City Real Property Transfer Tax (the
"City Transfer Tax") imposed by Chapter 21,
18
Title 11 of the Administrative Code of the City of New York, in connection with
the conveyance of the Property to Purchaser in accordance with the provisions of
this Agreement, provided, however, that in the event that a State Transfer Tax
and/or City Transfer Tax is not imposed in connection with the conveyance of the
Property at Closing as contemplated by Section 16.6 hereof, then Seller shall
remain liable for the payment of the State Transfer Tax and City Transfer Tax at
such time as the exchange transaction contemplated by Section 16.6 is completed
and such Transfer Taxes are levied, it being agreed that in no event or under
any circumstances shall Seller be obligated to pay State Transfer Taxes and City
Transfer Taxes pursuant to this subsection in excess of the amount which would
have been payable by Seller without giving effect to the exchange transaction
contemplated under Section 16.6 hereof.
Seller and Purchaser shall each execute and/or swear to the returns or
statements required in connection with the State Transfer Tax and the City
Transfer Tax, and any other taxes referred to in this Section 5.5 or otherwise
applicable to the transactions contemplated by this Agreement, and shall deliver
same, together with the check or checks of Seller in payment thereof which are
required of Seller, to the Title Companies on the Closing Date. All such tax
payments shall be made by certified or bank check payable directly to the order
of the appropriate governmental officer, or in such manner as the Title
Companies shall reasonably require and accept.
The agreement of Seller and Purchaser set forth in this Section with
respect to the taxes described above shall not extend to any additional fees,
penalties or interest charges payable in addition to such taxes as a result of
(i) the negligence or willful failure to act by either party, (ii) any incorrect
or incomplete information in any return or form filed by either party, or (iii)
the failure of a party to file any such return or form, it being agreed that the
full amount of any such additional fees, penalties or interest charges shall be
paid by the party whose negligence or willful failure to act, who has caused the
incorrect or incomplete return or form to be prepared or who was required by law
to file the return or form which was not filed, as the case may be, leads to the
imposition of such additional fees, penalties or interest charges.
The provisions of this Section 5.5 shall survive the Closing.
TITLE INSURANCE AND SURVEY COSTS. The costs of examination of title
(including all UCC, tax and other searches) and title premiums for the issuance
by the Title Companies of policies of title insurance insuring Purchaser's fee
interest in the Property, conforming to the requirements of Purchaser, shall be
paid by Purchaser. The cost of obtaining new or updated surveys for the
Property, conforming to the requirements of Purchaser, shall be paid by
Purchaser. The provisions of this Section 5.6 shall survive the Closing.
1099 COMPLIANCE. Seller and Purchaser shall execute, acknowledge and
deliver to the other party such instruments, and take such other actions, as
such other party may reasonably request in order to comply with Section 6045(e)
of the Code, or any successor provision or any regulations promulgated pursuant
thereto, insofar as the same requires reporting of information in respect of
real estate transactions. The parties designate the Title Companies as the
responsible party for reporting this information as required by law. The
provisions of this Section 5.7 shall survive the Closing.
19
ATTORNEY'S FEES. Seller and Purchaser shall each bear the costs of their
respective counsel in connection with the sale and purchase of the Property.
CONDOMINIUM DECLARATION. Seller and Purchaser shall jointly cause the
Board of Managers to execute and deliver an Agreement by and among Purchaser,
the Condominium (acting through the Board of Managers), Seller and Citigroup in
the form of EXHIBIT P attached hereto pursuant to the provisions of which the
Purchaser and the Condominium (acting through the Board of Managers) shall agree
as follows:
at all times when the Citi Office Lease is in effect, the Building shall
be owned in the condominium form of ownership;
at all times when the Citi Office Lease is in effect, there shall in no
event or under any circumstances be any subdivision of Unit 2;
at all times when the Citi Office Lease is in effect, there shall in no
event be more than three subdivisions of Unit 1 into separate condominium units;
at all times when the Citi Office Lease is in effect, all condominium
units into which Unit 1 may be subdivided shall at all times be either directly
or indirectly owned and controlled by a single entity, it being agreed by the
parties hereto that ownership of any such subdivided condominium unit by an
"exchange accommodation title holder" or a "qualified intermediary" in
connection with a tax deferred exchange under Section 1031 of the Internal
Revenue Code entered into by the owner of Unit 1 or the condominium units into
which Unit 1 has been subdivided in accordance with the provisions of Section
5.9(c) shall not constitute a violation of this subsection (d), provided that at
the conclusion of such tax deferred exchange (i.e., the transfer of such
subdivided condominium unit by such "exchange accommodation title holder" or
"qualified intermediary" to the ultimate purchaser thereof) such subdivided
condominium unit and all of the other condominium units into which Unit 1 has
been so subdivided are either directly or indirectly owned and controlled by a
single entity;
at all times when the Citi Office Lease is in effect, there shall in no
event or under any circumstance be any reallocation of space between or among
any of Xxxx 0, Xxxx 0 or any other condominium unit into which Unit 1 has been
subdivided in accordance with the provisions of this Section;
at all times when the Citi Office Lease is in effect, the tenant under
the Citi Office Lease shall at all times be entitled to have a representative
present at all meetings of the Board of Managers and shall be entitled to
present its views on any and all matters before the Board of Managers;
at all times when the Citi Office Lease is in effect, notwithstanding any
sale, transfer or conveyance (whether voluntary, involuntary, by operation of
law or as a result of foreclosure or acceptance of a deed in lieu of
foreclosure) of either or both of the Units or of any condominium unit into
which Unit 1 has been subdivided in accordance with the provisions of this
Section, the Building shall at all times be managed by a single qualified
manager having a standing and
20
reputation in the New York metropolitan region as a first class manager of
office buildings comparable to the Building and otherwise reasonably acceptable
to the tenant under the Citi Office Lease, it being agreed by that Boston
Properties L.P. and any management company directly owned and controlled by
Boston Properties L.P. shall constitute an approved management company for the
purposes of this subsection (g);
other than certain transfers specifically exempted pursuant to the
provisions of Article 48 of the Citi Office Lease, at all times when the Citi
Office Lease is in effect, any sale, transfer or conveyance of the Property or
any portion thereof (irrespective of whether in Xxxx 0, Xxxx 0 or any other
condominium unit into which Unit 1 has been subdivided in accordance with the
provisions of this Section) shall be subject to the right of first offer or the
right of first refusal, as applicable, in favor of the tenant under the Citi
Office Lease in accordance with the provisions of Article 48 of the Citi Office
Lease, it being agreed by the parties that so long as the provisions of Article
48 of the Citi Office Lease are in form and substance complied with in all
respects, the transfer of the Property or the portion thereof which is to be
sold by the owner thereof to an "exchange accommodation title holder" or a
"qualified intermediary" in connection with a tax deferred exchange of the
Property or such portion thereof under Section 1031 of the Internal Revenue
Code, and the transfer of the Property or such portion thereof by such "exchange
accommodation title holder" or "qualified intermediary" to the ultimate
purchaser thereof shall not be subject to the right of first offer or the right
of first refusal set forth in Article 48 of the Citi Office Lease (i.e., such
tax deferred exchange and the steps thereof shall be deemed to constitute a
single sale, transfer and conveyance of the Property or such portion thereof for
the purposes of determining compliance with the provisions of Article 48 of the
Citi Office Lease);
at all times when the Citi Office Lease or the Citi Retail Lease is in
effect, the leasing of any space in the Building (irrespective of whether in
Xxxx 0, Xxxx 0 or any other condominium unit into which Unit 1 has been
subdivided in accordance with the provisions of this Section) shall be subject
to the right of first offer in favor of the tenant or tenants thereunder (and
any exemptions therefrom) in accordance with the provisions set forth in Article
40 and Article 41of the Citi Office Lease or Article 40 of the Citi Retail
Lease, as applicable;
at all times when any of the Citi Office Lease, the Citi Retail Lease or
the Citi Branch Lease is in effect, the respective tenants thereunder shall be
granted non-disturbance and such tenants shall attorn to the entity acquiring
the interest of landlord under such Leases, provided that such entity has
acquired such interest in compliance with the provisions of the Condominium
Agreement and the provisions of the Citi Office Lease, the Citi Retail Lease or
the Citi Branch Lease, as applicable; and
in the event of any conflict between the provisions of the Condominium
Declaration, the other Condominium documents, or any amendments of the
foregoing, on the one hand, and the provisions of any of the Citi Office Lease,
the Citi Retail Lease and/or the Citi Branch Lease, or any amendments of the
foregoing, on the other hand, then the provisions of such Leases shall govern
and control.
The Condominium Agreement shall be duly recorded in New York County, and
the Condominium Declaration shall be amended to the extent reasonably necessary
to conform it to
21
the provisions and requirements set forth in the Condominium Agreement. Seller
shall be entitled to enforce the provisions of the Condominium Agreement by an
action for specific performance, and shall be entitled to seek injunctive relief
against Purchaser and/or the Board of Managers to the full extent that Seller is
entitled thereto, it being agreed that Seller does not have an adequate remedy
at law for damages which will be suffered by Seller in the event of a breach of
the provisions of the Condominium Agreement.
CONDITIONS PRECEDENT. The obligation of (i) Purchaser to consummate
the transaction contemplated by this Agreement shall be
conditioned upon Seller's delivery of the documents and
instruments required to be delivered by Seller pursuant to
Section 5.2 and Section 5.4 of this Agreement and (ii) Seller
to consummate the transaction contemplated by this Agreement
shall be conditioned upon Purchaser's payment of the Purchase
Price and Purchaser's delivery of the documents and instruments
required to be delivered by Purchaser pursuant to Section 5.3
and Section 5.4 of this Agreement.
ASSUMPTION OR TERMINATION OF CONTRACTS. Seller shall terminate each
Contract and shall send a notice of such termination promptly after the
execution of this Agreement, which notices shall be effective on the later to
occur of the date of the Closing, or the respective dates provided for in the
Contracts for such notices to be effective. Seller shall pay any and all charges
and payments accrued under Contracts with respect to the period prior to the
Closing and Purchaser shall pay any and all charges and payments accruing under
Contracts with respect to the period of time from and after the Closing through
the expiration of the contractual termination period thereunder. Seller agrees
to terminate the Existing Management Agreement effective as of the Closing Date.
CLOSING ADJUSTMENTS
CLOSING ADJUSTMENTS. 1. The following are to be apportioned as of 11:59
p.m. on the day immediately preceding the Closing Date (the "Adjustment Date"),
provided that the Purchase Price is received by Seller no later than 2:00 p.m.
Eastern Time on the Closing Date (and in the event the Purchase Price is not
received by 2:00 p.m. Eastern Time on the Closing Date, then as of 11:59 p.m. on
the date on which the Closing occurs), subject in all cases to the rights of
tenants under their Leases:
real estate taxes, sewer rents and taxes, water rates and charges (to the
extent not accounted for pursuant to clause (iii) below), vault charges and
taxes, business improvement district taxes and assessments and any other
governmental taxes, charges or assessments levied or assessed against the
Property (collectively, "Property Taxes"), on the basis of the respective
periods for which each is assessed or imposed, to be apportioned in accordance
with Section 6.1(b) hereof;
charges (to the extent not accounted for pursuant to clause (iii) below)
for all other public utilities, including, without limitation, steam,
electricity and gas (to the extent the owner of the Units is responsible for
payment thereof). The rights to the return of any deposits with utility
22
companies shall be retained by Seller and Seller will not receive any credit at
Closing for such deposits. Purchaser shall promptly upon request of Seller put
up any replacement deposit which may be required by a utility company as a
precondition to the release of Seller's deposit;
base rents, fixed rents, additional rents, escalation rents, percentage
rents and any other rents paid or payable for the billing period in progress on
the Closing Date, as and when collected; it being agreed that to the extent, on
the Adjustment Date, base rent, fixed rent, additional rents, escalation rents,
percentage rents or other rents have not been collected for such billing period,
then each such item shall be adjusted retroactively to the Adjustment Date (and
such adjustment paid) no later than thirty (30) days after each such item has
been collected. Percentage rent, payments or reimbursements on account of
operating expenses and real estate taxes, utility charges and any other
payments, reimbursements or contributions by tenants under the Leases shall be
prorated as follows: (y) with respect to percentage rents (if any), Purchaser
shall furnish to Seller promptly upon receipt copies of all sales reports from
tenants who owe percentage rent for any period prior to the Adjustment Date,
whereupon the percentage rent due (if any) shall be promptly calculated and
prorated between Seller and Purchaser as of the Adjustment Date; and (z) the
amount of any other rents, payments, reimbursements or contributions to be made
by any tenant shall be computed in accordance with such tenant's Lease as
existing as of the Adjustment Date, and (provided that such tenant's rent
payments are not in arrears) Purchaser shall remit to Seller Seller's pro rata
portion of such rents, payments, reimbursements or contributions (based upon
apportionment being made as of the Adjustment Date) promptly after such rents,
payments, reimbursements or contributions have been collected by Purchaser from
such tenant. If Seller has collected estimated amounts of prepayments in excess
of any tenant's pro rata share, (i) Seller shall promptly remit said excess to
Purchaser after notice from Purchaser and after such excess is verified by a
review or analysis of estimated prepayments in accordance with such tenant's
Lease, (ii) Purchaser shall promptly remit to the applicable tenant any such
excess paid over to Purchaser pursuant to the preceding clause (i), and (iii)
Purchaser shall indemnify and hold Seller harmless from all claims, demands,
causes of actions, losses, damages, liabilities, costs and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) asserted
against or incurred by Seller in connection with or arising out of Purchaser's
failure to fulfill its obligations pursuant to the preceding clause (ii) of this
sentence;
permit fees and license fees with respect to any assigned permits and
licenses;
charges and payments under the terminated Contracts or permitted renewals
or replacements thereof;
wages and fringe benefits (including, without limitation, vacation pay,
sick days, health, welfare, pension and disability benefits) and other
compensation payable to all personnel employed at the Property;
administrative charges on security deposits held pursuant to the Leases
(provided the same are permitted to be charged pursuant to the applicable
Leases);
23
fuel, if any, as estimated by Seller's supplier, at current cost,
together with any sales taxes payable in connection therewith, if any (a letter
from Seller's fuel supplier shall be conclusive evidence as to the quantity of
fuel on hand and the current cost therefor);
Common Charges; and
such other items that, in New York, New York, are customarily prorated,
adjusted or paid in accordance with the "customs in respect to title closings"
recommended by The Real Estate Board of New York, Inc., as amended and in effect
on the Closing Date, in connection with the sale of property similar to the
Property, consistent with the terms and provisions of this Agreement.
Property Taxes shall be apportioned on the basis of the fiscal period for
which assessed. If the Closing Date shall occur either before an assessment is
made or a tax rate is fixed for the tax period in which the Closing Date occurs,
the apportionment of such Property Taxes based thereon shall be made at the
Closing Date by applying the tax rate for the preceding year to the latest
assessed valuation (or, if none, other basis of valuation, including, without
limitation, written opinions of tax adjusters or as otherwise agreed to by
Seller and Purchaser), but, promptly after the assessment and/or tax rate for
the current year are fixed, the apportionment thereof shall be recalculated and
Seller or Purchaser, as the case may be, shall promptly make an appropriate
payment to the other based on such recalculation. If as of the Closing Date the
Property or any portion thereof shall be affected by any special or general
assessments which are or may become payable in installments of which the first
installment is then a lien and has become payable, Seller shall pay the unpaid
installments of such assessments which are due prior to the Closing Date and
Purchaser shall pay the installments which are due on or after the Closing Date.
If there are water meters at the Property, the unfixed water rates and
charges and sewer rents and taxes covered by meters, if any, shall be
apportioned (i) on the basis of an actual reading done within thirty (30) days
prior to the Adjustment Date, or (ii) if such reading has not been made, on the
basis of the last available reading. If the apportionment is not based on an
actual current reading, then upon the taking of a subsequent actual reading, the
parties shall, within ten (10) business days following notice of the
determination of such actual reading, readjust such apportionment and Seller
shall deliver to Purchaser or Purchaser shall deliver to Seller, as the case may
be, the amount determined to be due upon such readjustment.
Charges for all electricity, steam, gas and other utility services shall
be billed to Seller's account up to the Adjustment Date and, from and after the
Adjustment Date, all utilities shall be billed to Purchaser's account, other
than charges for utility services relating solely to the period up to the
Adjustment Date, which shall be billed directly to, and be paid directly by,
Seller. If for any reason such changeover in billing is not practicable as of
the Closing Date, as to any utility service, such utility service shall be
apportioned on the basis of actual current readings or, if such readings have
not been made, on the basis of the most recent bills that are available. If any
apportionment is not based on an actual current reading, then upon the taking of
a subsequent actual reading, the parties shall, within ten (10) business days
following notice of the determination of such actual reading, readjust such
apportionment and Seller shall promptly
24
deliver to Purchaser, or Purchaser shall promptly deliver to Seller, as the case
may be, the amount determined to be due upon such readjustment. If a xxxx is
rendered by a utility company after the Closing and covers the period up to the
Adjustment Date, then such xxxx shall be paid by Seller. If a xxxx is rendered
by a utility company after the Closing and covers a period prior to and after
the Adjustment Date, then such xxxx shall be apportioned between Seller and
Purchaser, but such xxxx shall be paid by Purchaser.
All funds in any operating accounts, reserve accounts or any other
accounts pertaining to the Property on the Adjustment Date, whether in the name
of Seller or Existing Property Manager, shall (subject to the terms of any
applicable Leases and the adjustments required under this Agreement) be retained
by Seller or applied as Seller shall direct, and all cash, coins and xxxxx cash
to which Seller is entitled (including without limitation, in coin operated
machines) located on the Property shall be counted by Seller or Existing
Property Manager on the Adjustment Date and the same shall be remitted to Seller
by Existing Property Manager.
The security deposits and advance rents with respect to the Leases
(together with interest accrued thereon, if any, less a 1% administrative fee if
such cash security deposit has been deposited in an interest bearing account)
shall not be prorated, but instead shall be paid over to Purchaser on the
Closing Date; provided, however, that, if such security deposits or advance
rents are in the possession or control of Existing Property Manager, at
Purchaser's request Seller shall direct Existing Property Manager in writing to
retain possession or control thereof for the benefit of Purchaser. Promptly
after the Closing, Seller shall transfer or cause to be transferred to Purchaser
any and all letters of credit and the Seller's interest in any certificates of
deposit held by Seller as security for a tenant's performance under any of the
Leases being assigned to Purchaser. If any such letter of credit is
non-transferable, Seller shall use its good faith efforts to have such letter of
credit reissued in the name of Purchaser (at Seller's sole cost and expense),
and failing that, Seller agrees to continue holding any such non-transferable
letter of credit and agrees to present the letter of credit for payment or to
release the letter of credit on the written instructions of Purchaser and will
remit any funds collected thereunder to Purchaser (less any reasonable costs of
collection), provided that Seller is indemnified and held harmless from and
against any liability, cost or expense as a result thereof.
COLLECTION OF RECEIVABLES. Purchaser shall remit to Seller promptly after
collection by Purchaser Seller's apportioned share of all "Current Receivables"
due from tenants at the Property that are not in default of their monthly rental
obligations for any billing period prior to the billing period in progress on
the Closing Date. The term "Receivables" as used in this Agreement shall mean
all rental payments, expense reimbursements and other monetary obligations of
any kind due and owing or to become due and owing to Seller for the period prior
to the Closing Date under the Leases; the term "Current Receivables" shall mean
all Receivables for the billing period in progress on the Closing Date.
Purchaser shall undertake its customary collection efforts on behalf of Seller
to collect all Receivables for a period of six (6) months from the Closing Date
(which shall include the submission of monthly invoices and follow-up invoices,
and may (but need not) include the commencement or continuation of litigation or
other proceedings), it being agreed that in such cases any monies received by
Purchaser from and after the Closing Date from any party liable for any portion
of the Receivables to be collected by Purchaser shall be applied (after payment
of all reasonable costs of collection, including
25
reimbursement to Seller or Purchaser of any legal fees or collection costs
reasonably incurred by either of them) FIRST to the payment of monies owed to
Seller and Purchaser for the billing period in progress on the Closing Date,
SECOND to any current sums and arrearages owed to Purchaser (relating to billing
periods after the billing period in progress as of the Closing Date), and LAST
to the balance of any Receivables. Any monies received by Purchaser which are to
be applied to Receivables owed to Seller hereunder shall be held in trust by
Purchaser for the benefit of Seller and remitted to Seller promptly after
receipt. Notwithstanding the foregoing, Seller shall retain the sole right to
collect (in such manner as it shall deem appropriate) (x) Receivables due from
tenants who have vacated the Property prior to the Closing Date, and (y) those
Receivables, if any, listed on SCHEDULE 6.2 attached hereto, and Purchaser shall
not be required to undertake any collection efforts with respect to such
Receivables except as provided in the following sentence. Upon the request of
Seller, Purchaser shall take such commercially reasonable steps and actions, at
the direction and expense of Seller, to cause Amerindo Investment Advisors Inc.
("Amerindo") to make the payments required to be made by Amerindo under
paragraph 5 of that certain Partial Surrender Agreement dated July, 2002 between
Seller and Amerindo. Purchaser acknowledges and agrees that it will be
commercially reasonable for Seller to request Purchaser to terminate the
Amerindo Lease if Amerindo fails to timely make the aforementioned payment and
Purchaser shall terminate such lease if so requested by Seller provided that
Seller shall indemnify and hold harmless Purchaser from and against all losses,
costs and expenses suffered by Purchaser as a result of such termination
(including, but not limited to, all base rent, fixed rent, and additional rent
to which Purchaser would have been entitled during the remaining term of the
lease with Amerindo) and provided further that if the Amerindo Lease is so
terminated, Purchaser shall turn over to Seller (and Seller shall be entitled to
retain) any security deposit then held by Purchaser under the Amerindo Lease.
Purchaser hereby acknowledges that it has no right, title or interest in any
payments owed to Seller under the aforementioned Partial Surrender Agreement and
that such amounts belong exclusively to Seller. Any sums received by Purchaser
in connection with the preceding sentence shall be held in trust by Purchaser
for the benefit of Seller and shall be immediately turned over to Seller.
Notwithstanding anything to the contrary hereinabove provided, (i) Purchaser
acknowledges and agrees that from and after the Closing Date Seller shall at all
times have the right to independently xxx Amerindo to enforce the personal
recourse obligation of Amerindo under paragraph 5 of the aforementioned Partial
Surrender Agreement and (ii) Seller acknowledges and agrees that from and after
the Closing Date, Purchaser shall at all times have the right to xxx Amerindo to
enforce the provisions of the Partial Surrender Agreement and shall have the
right to exercise any and all remedies to which it is entitled under the
Amerindo Lease with respect to any default thereunder. With respect to any
pending litigation or other proceedings to collect any Receivables from tenants
in occupancy on the Closing Date, Purchaser shall have the option of either (i)
continuing such litigation or proceedings (the costs of which shall be equitably
apportioned between Seller and Purchaser, based upon the amounts ultimately paid
to each, and reimbursed out of the first monies collected, if any) and Purchaser
shall be substituted as the plaintiff, if necessary, or (ii) of not continuing
the litigation, whereupon Seller may continue such litigation in its own name
and at its sole cost and expense, provided that such litigation shall not result
in the eviction of the tenant or the termination of its Lease without
Purchaser's consent, and in which event all sums collected by Seller as a result
of such litigation (after payment of all costs and expenses) shall be applied in
full satisfaction of the subject Receivables. Neither Purchaser nor Seller shall
settle or
26
compromise any claims against tenants which relate solely to Receivables payable
to Purchaser and Seller without Seller's and Purchaser's prior written approval,
which shall not be unreasonably withheld or delayed. If within sixty (60) days
following the date hereof any of the Receivables to be collected by Purchaser
have not been collected and remitted to Seller or Purchaser has not commenced
litigation to collect such Receivables, then Seller may undertake its own
efforts to collect such Receivables, including the commencement of litigation
and other proceedings (but Seller shall not seek to evict any tenant or
terminate any Lease), and in which event all sums collected by Seller as a
result of such litigation (after payment of all costs and expenses) shall be
applied in full satisfaction of the subject Receivables, it being agreed that
Seller shall refrain from taking any such efforts during the sixty (60) day
period following the Closing. Purchaser and Seller shall reasonably cooperate
with each other in the collection of Receivables and shall execute any documents
reasonably requested by the other to collect such Receivables; provided,
however, such party's reasonable out-of-pocket costs are reimbursed by the
other.
TAX PROTESTS. As of the date of this Agreement, Seller may have engaged
various law firms or consultants to protest the valuation of the Property
("Protest Proceedings"), as more particularly described in SCHEDULE 10.1(g)
attached hereto, for the purpose of protesting the amount of ad valorem taxes
for certain tax fiscal periods, some of which may have been paid by Seller and
some of which either are not yet due and payable or have not been paid. With
respect to tax fiscal periods commencing prior to the tax fiscal period in
progress on the Closing Date, all ad valorem taxes imposed on the Property are
the responsibility of Seller, and further, any refund payable to Seller by
virtue of a favorable determination resulting from such protests shall belong
exclusively to Seller, with Seller having the obligation to refund the portion
of any such refund, if any, owing to tenants under leases in effect during such
prior tax fiscal periods. Any refund (including, without limitation, any
interest payable thereon) payable by virtue of a favorable determination
resulting from any such Protest Proceeding with respect to the tax fiscal period
in progress on the Closing Date, after payment or reimbursement of all fees and
out-of-pocket expenses relating thereto, shall be prorated between Seller and
Purchaser on a per diem basis, with Seller being entitled to receive the portion
allocated to the portion of such tax fiscal period up to and including the
Adjustment Date, and with Seller having the obligation to refund the portion of
any such refund, if any, owing to tenants under the Leases on account of such
refund attributable to periods prior to Adjustment Date. In connection with any
Protest Proceeding for the tax fiscal period in progress on the Closing Date, at
Purchaser's request Seller shall, if possible, cause Purchaser to be substituted
for Seller in such Protest Proceeding and any other pending Protest Proceedings
for tax fiscal periods commencing prior to the tax fiscal period in progress on
the Closing Date, or if not possible, Seller shall permit Purchaser to control
the conduct all such Protest Proceedings, it being agreed that Seller shall not
be obligated to agree to the settlement of any such Protest Proceedings in which
Purchaser has been substituted for Seller or which Purchaser is controlling
unless Seller approves of such settlement in the exercise of its reasonable
discretion. Seller and Purchaser shall otherwise cooperate with each other with
respect to all Protest Proceedings. Neither Seller nor Purchaser shall in any
event settle any Protest Proceedings pending on the Closing Date in which taxes
for any tax fiscal period in progress on or prior to the Closing Date are being
adjudicated without the other party's consent, which consent shall not be
unreasonably withheld or delayed.
27
LEASING COMMISSIONS. Seller and Purchaser shall each be responsible for
the payment of those leasing commissions relating to Existing Leases allocable
to each such party as set forth on SCHEDULE 6.4 attached to this Agreement, as
the same become due and payable, it being the intention that (A) Seller shall be
responsible for the payment of all leasing commissions, referral fees and legal
fees relating to Existing Leases other than commissions or fees due or payable
as a result of (i) the exercise of any renewal option or other option or right
or failure to exercise any right under any Existing Lease which is exercised or
not exercised after the Closing Date (including, without limitation, any such
commissions or fees which become due and payable as the result of any extension
of month to month tenancies occurring subsequent to the Closing Date or failure
by a tenant to exercise a termination option subsequent to the Closing Date), or
(ii) any renewal, expansion or other modification of an Existing Lease entered
into after the Closing Date or otherwise agreed to by Purchaser after the
Closing Date and (B) Purchaser shall be responsible for the payment of (i) all
leasing commissions and referral fees due or payable as a result of the exercise
of any renewal option or other option or right, or failure to exercise any
right, under any Existing Lease after the Closing Date (including, without
limitation, any such commission or fees which become due and payable as the
result of any extension of month to month tenancies occurring subsequent to the
Closing Date or failure by a tenant to exercise a termination option subsequent
to the Closing Date) and (ii) as the result of any renewal, expansion or
modification of any Existing Lease entered into after the Closing Date or
otherwise agreed to by Purchaser after the Closing Date. Purchaser shall
reimburse Seller as an adjustment item to the extent Seller has paid any leasing
commissions or referral fees which are the responsibility of Purchaser under the
preceding sentence. Seller agrees to terminate at Closing the brokerage
agreement listed as Items 2 and 4 on Schedule 10.1(m) insofar as the same
pertain to the Property in accordance with the provisions of Section 2.1(C) of
such brokerage agreements.
TENANT IMPROVEMENTS AND OTHER EXPENSES. Seller and Purchaser shall each
be responsible for the payment of all tenant improvement expenses (including all
hard and soft construction costs, whether payable to the contractor or to the
tenant), tenant allowances, lease buyout costs, legal fees and expenses, moving
allowances and other out-of-pocket costs (collectively, the "Tenant Allowances")
as set forth on SCHEDULE 6.5 attached to this Agreement, as the same become due
and payable, it being the intention that (A) Seller shall be responsible for the
payment of all Tenant Allowances which are the obligation of the landlord under
the Existing Leases other than (i) Tenant Allowances to the extent they become
due and payable during the term of Existing Leases and do not relate to the
initial occupancy by the tenants thereunder, and (ii) as set forth in the
following clause (B) with respect to renewal options, expansion options or first
offer rights, under the Existing Leases and (B) Purchaser shall be responsible
for the payment of all Tenant Allowances to the extent they become due and
payable during the term of Existing Leases and (i) do not relate to the initial
occupancy by the tenants thereunder, or (ii) relate to renewal periods or
additional space under renewal options, expansion options or first offer rights,
under the Existing Leases exercised on or after the Closing Date or otherwise
agreed to by Purchaser after the Closing Date. Purchaser shall reimburse Seller
as an adjustment item to the extent Seller has paid any such expenses which are
the obligation of Purchaser under clause (B) of the preceding sentence. Seller
shall in no event be obligated to pay for any increased costs relating to change
orders or additions to the tenant improvements or changes in the scope of the
28
work or the specifications agreed to by Purchaser and issued on or after the
Closing Date with respect to Existing Leases.
BUDGETED REPAIRS. Seller shall be responsible for the payment of the
costs and expenses incurred by Seller in connection with repairs, replacements
and improvements relating to (i) the base building capital improvements for the
Building generally but excluding costs and expenses for Tenant Allowances in
connection with the leasing of space in the Units for a particular tenant and
(ii) capital improvements for the Common Elements, which repairs, replacements
and improvements are either currently in progress or are anticipated to be
incurred by Seller prior to the Closing Date and are as set forth on SCHEDULE
6.6 attached to this Agreement.
PURCHASE ORDERS. Attached hereto as SCHEDULE 6.7 are all "open" purchase
orders in the amount of $1,000 or more for the Building (other than work
performed on an emergency basis which is not the subject of a purchase order)
that have been entered into the database system for the Building (the "System")
as of the date hereof. Seller shall be responsible for payment of the stated
contract amounts, whether incurred as an owner of the Units or by a property
manager of the Units or any portion of the Common Elements on behalf of the
Board of Managers, in connection with the operation and maintenance of the
Property (such contracted amounts, the "Contracted Purchase Order Amounts") for
(i) the purchase orders identified on SCHEDULE 6.7 attached hereto, including
any amendments thereto entered into by or on behalf of Seller prior to the
Closing Date, (ii) all other purchase orders for work performed at the Building
and entered into by or on behalf of Seller prior to the Closing Date and (iii)
work performed on an emergency basis at the Building prior to the Closing Date
which is not the subject of a purchase order, whether or not entered into the
System as of the Closing Date (the items set forth in the foregoing clauses (i)
- (iii) are collectively, the "Approved Purchase Orders"). Purchaser shall be
responsible for all payments with respect to Approved Purchase Orders which are
in excess of the Contracted Purchase Order Amounts to the extent such additional
costs are incurred as a result of any act or omission of Purchaser.
SURVIVAL. Seller and Purchaser agree to use reasonable efforts to
calculate all adjustments required under this Article VI (and to make the
adjustment payments resulting from such calculations) with respect to those
items of income and expense which are ascertainable on the Closing Date by no
later than twenty (20) days after the Closing Date. Each other item of income
and expense which is subject to adjustment under this Article VI but which is
not ascertainable on the Closing Date will be adjusted retroactive to the
Closing Date, and the payment made on such adjustment within sixty (60) days
after the date that such adjustment becomes ascertainable, I.E., the date by
which each party, in its good faith business judgment, has sufficient
information to make such adjustment. The parties agree that each party shall
have the right following Closing, on reasonable written notice to the other,
from time to time to review the books and records of such other party pertaining
solely to the operations of the Property to the extent necessary to confirm the
amounts of adjustments payable to Seller and/or Purchaser following the Closing,
and Seller and Purchaser shall instruct any property manager to make its books
and records available for this purpose. Purchaser and Seller shall cooperate as
necessary following the Closing in order to promptly and in good faith discharge
their respective obligations under this Article VI. Notwithstanding the
foregoing, any claim for an adjustment under Section 6.1 will be valid if made
in writing with reasonable specificity within one (1) year
29
after the Closing Date, except in the case of items of adjustment which at the
expiration of such period are subject to pending litigation or administrative
proceedings. Claims with respect to items of adjustment which are subject to
litigation or administrative proceedings will be valid if made on or before the
later to occur of (i) the date that is one (1) year after the Closing Date and
(ii) the date that is one hundred eighty (180) days after a final order shall
have issued in such litigation or administrative hearing. Both parties shall use
good faith efforts to resolve any disputed claims promptly. The provisions of
this Article VI shall survive the Closing. Purchaser shall notify, or shall
cause its property manager to notify, Seller of any reimbursement adjustment to
which Seller becomes entitled under the provisions of this Article VI promptly
after Purchaser or such property manager determines that such reimbursement
adjustment is due to Seller.
INDEMNIFICATION
SELLER'S INDEMNITY. Seller hereby agrees to indemnify Purchaser and the
other Purchaser Indemnified Parties against, and to hold Purchaser and the other
Purchaser Indemnified Parties harmless from, all claims, demands, causes of
action, losses, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements) asserted against or
incurred by Purchaser or any of the other Purchaser Indemnified Parties in
connection with or arising out of acts or omissions of Seller or Seller's
Representatives, or other matters or occurrences that take place before the
Closing and relate to the ownership, maintenance or operation of the Property.
Seller's obligations under this Section 7.1 shall survive the Closing for a
period of two (2) years; provided, however, that Seller's obligations under this
Section 7.1 as the same relate to any Protest Proceedings described in Section
6.3 hereof shall survive the Closing for a period of five (5) years.
PURCHASER'S INDEMNITY. Purchaser hereby agrees to indemnify Seller and
the other Seller Indemnified Parties against, and to hold Seller and the other
Seller Indemnified Parties harmless from, all claims, demands, causes of action,
losses, damages, liabilities, costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) asserted against or incurred by
Seller or any of the other Seller Indemnified Parties in connection with or
arising out of acts or omissions of Purchaser or Purchaser's Representatives, or
other matters or occurrences that take place after the Closing and relate to the
ownership, maintenance or operation of the Property. Purchaser's obligations
under this Section 7.2 shall survive the Closing for a period of two (2) years;
provided, however, that Purchaser's obligations under this Section 7.1 as the
same relate to any Protest Proceedings described in Section 6.3 hereof shall
survive the Closing for a period of five (5) years.
INDEMNIFICATION PROCEDURES. Whenever in this Agreement it is provided
that any party shall indemnify and hold harmless the other party, then, as a
condition to such indemnity the terms of this Section 7.3 shall apply. The party
indemnified shall promptly give written notice to the indemnitor of any claim or
demand made upon it which is or may be indemnified against. The indemnitor shall
have the right to defend against such claim or demand by counsel selected by
indemnitor's liability insurer or such other counsel selected by indemnitor and
reasonably satisfactory to the indemnified party. The indemnified party shall
reasonably cooperate with the
30
indemnitor, at the indemnitor's expense. The indemnitor shall not settle or
approve the settlement of any claim without the approval of the indemnified
party, which approval shall not be unreasonably withheld or delayed; provided,
however, such approval shall not be required in connection with any settlement
which includes an unconditional release of the indemnified party and for which
there is no admission of any wrongdoing on any part of the indemnified party.
The indemnified party shall not settle or approve the settlement of any claim
without the approval of the indemnitor, which approval shall not be unreasonably
withheld or delayed. Any separate counsel retained by the indemnified party
shall be at its own expense.
COVENANTS OF SELLER
COVENANTS. 1. During the period from the date hereof until the Closing
Date, Seller shall:
subject to subsections (b)(i) and (ii) below, be permitted to enter into
any agreements with respect to all or any portion of the Property provided that
such agreements expire by their terms on or prior to the Closing Date or, in the
case of Contracts, may be terminated by the owner of the Property without
penalty upon thirty (30) days' (or less) prior notice;
maintain, or cause the Board of Managers to maintain, in full force and
effect the insurance policies currently in effect with respect to the Property;
promptly deliver to Purchaser copies of (a) written default notices,
notices of lawsuits and notices of violations affecting either Unit that are
sent or actually received by Seller, and (b) without duplication of anything
contained in the preceding clause (a), any notice received from the City of New
York, any taxing authority and any other municipal, governmental or
quasi-governmental entity or agency pertaining to either Unit, and any notices
received from the Grand Central Partnership;
deliver to Purchaser, promptly after the execution and delivery thereof
by all parties thereto, copies of all new Leases entered into, and all
agreements pertaining to the termination, modification or amendment of Existing
Leases, in each case entered into in accordance with the provisions of this
Agreement; and
operate and manage the Property in a manner consistent with current
practice, including, without limitation, maintaining fire and other hazards
extended coverage insurance, including the coverage set forth on the summary of
Seller's insurance hereto as SCHEDULE 8.1(a)(v).
During the period from the date hereof until the Closing Date, Seller
shall not, except as permitted under Section 8.1(a) above, without Purchaser's
prior approval:
terminate, amend or modify any existing Lease, or enter into any new
Lease for space at the Property or any material license or permit for space at
or use of the Property;
consent to any assignment of sublease by any tenant under any Lease,
except as may be expressly required in accordance with a particular Lease;
31
grant any consent or waiver under any Lease, except as may be expressly
required in accordance with a particular Lease;
apply any security deposits held under Leases in respect of defaults by
tenants under the Leases;
bring (or knowingly permit to be brought) on to, or remove or dispose
from, the Property, any hazardous substances or materials in violation of
applicable environmental laws;
amend or modify (other than non-material amendments or modifications) or
renew any of the Contracts unless such Contracts contain provisions complying
with Section 8.1(a)(i) of this Agreement;
sell, assign, or convey any right, title or interest whatsoever in or to
the Units, or create or permit to exist any lien, security interest, easement,
encumbrance, charge or condition affecting the Units (other than a Permitted
Encumbrance), without the prior consent of Purchaser except to the extent
relating to (x) leasing of the Units or portions thereof as permitted in
accordance with this Agreement, or (y) items approved in writing by Purchaser;
perform or cause to be performed any capital improvements or capital
repairs at the Property. Notwithstanding the foregoing, Purchaser's prior
approval shall not be required for: (a) capital improvements or capital repairs
contemplated by Section 6.6 or otherwise required by law, (b) capital
improvements or capital repairs which may be required in the event of an
emergency to preserve the Property, or (c) capital improvements or capital
repairs required in accordance with the terms and provisions of a tenant lease
(collectively, "Seller Capital Improvements/Repairs"). In the event that Seller
deems it necessary to perform a Seller Capital Improvement/Repair which does not
require Purchaser's prior approval as described in the previous sentence, Seller
shall use good faith efforts to notify Purchaser of such Seller Capital
Improvement/Repair as soon as practicable. In the event Seller elects to perform
a capital improvement or a capital repair not contemplated by Section 6.6 and
which is (i) required by law, (ii) due to an emergency situation, (iii) approved
by Purchaser, or (iv) required in accordance with the terms and provisions of a
tenant lease, then the cost of such capital improvement or capital repair shall
be borne solely by Seller. To the extent such costs can be passed through to a
tenant pursuant to the terms of such tenant lease, then Seller shall receive a
credit for such costs at Closing; or
enter into any new Contracts.
Whenever in Section 8.1(b) hereof Seller is required to obtain
Purchaser's approval with respect to any transaction described therein,
Purchaser shall, within five (5) business days after receipt of Seller's request
therefor, notify Seller of its approval or disapproval of same and, if Purchaser
fails to notify Seller of its disapproval within said five (5) business day
period, Purchaser shall be deemed to have disapproved same.
Seller shall cause the fire alarm system at the Building to be fully
functional and fully operational prior to the Closing (i.e., Seller shall have
completed the upgrade thereto as more
32
particularly described in SCHEDULE 6.6 of this Agreement); provided, however,
that it shall not be a condition to Closing that such work be completed,
however, Seller's obligations to complete such work shall survive the Closing
indefinitely.
ASSIGNMENTS BY SELLER AND ASSUMPTIONS
BY PURCHASER; SECURITY DEPOSITS; EMPLOYEES.
ASSIGNMENTS AND ASSUMPTIONS. On the Closing Date, Seller agrees to assign
to Purchaser, without recourse, representation or warranty (except as expressly
set forth in this Agreement), all of Seller's right, title and interest in, and
Purchaser agrees to assume Seller's obligations accruing on and after the
Closing Date under, the documents described in clauses (i), (ii) and (iii)
below:
the Leases which are then in effect (together with any security deposited
by the tenants thereunder);
the Contracts which are then in effect; and
the transferable permits, licenses and warranties, if any, relating to
the Property.
SECURITY DEPOSITS. Prior to the Closing, Seller shall have the right to
return the security deposit of any tenant thereunder who is entitled to the
return of such deposit pursuant to the terms of its Lease. At the Closing,
Seller shall transfer or cause to be transferred to Purchaser the security
deposits (together with interest accrued thereon, if any, less a 1%
administrative fee if such cash security deposit has been deposited in an
interest bearing account) then held by Seller and not applied to defaults or
returned to tenants as above provided.
EMPLOYEES. Seller and Purchaser agree that after the Closing Date
Purchaser may either (x) offer the same employment by Purchaser (or by the
property manager engaged by Purchaser) to any or all employees set forth on
SCHEDULE 9.3 who are union employees under their then current employment
contracts or agreements, including any collective bargaining agreements or (y)
terminate the employment of any or all such employees at the Property. Purchaser
acknowledges that in the event it terminates any of such union employees or if
it terminates any of the cleaning contractor, building engineer or xxxxxxxxx of
the Building or requires those companies to reduce their employees at the
Property from those listed on SCHEDULE 9.3 and, as a result, any of the union
employees engaged by such companies are terminated, certain termination benefits
may be payable with respect to such terminated employees. Purchaser agrees that
it shall be liable for the payment of all such termination benefits and hereby
agrees to indemnify and hold harmless Seller and the other Seller Indemnified
Parties from and against any loss, cost, damage, liability or expense
(including, without limitations, reasonable attorneys' fees, court costs and
disbursements) incurred by Seller or any other Seller Indemnified Party arising
from or by reason of Purchaser's failure to pay such termination benefits as and
when due and payable. Notwithstanding anything to the contrary contained in this
Section, Seller and Purchaser agree that Purchaser shall not have any liability
hereunder with respect to the termination of employment of any employees who do
not spend the predominance of their time providing
33
services to the base building operations at the Property. The provisions of this
Section 9.3 shall survive the Closing.
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES BY SELLER. Seller hereby represents and
warrants to Purchaser as of the date hereof that:
Seller is a national banking association, duly organized and validly
existing under the laws of the United States of America;
Seller has the legal right, power and authority to enter into this
Agreement and perform all of its obligations hereunder, and the execution and
delivery of this Agreement and the performance by Seller of its obligation
hereunder, (x) has been duly authorized, and (y) will not conflict with, or
result in a breach of, any of the terms, conditions and provisions of its
organizational and governance documents or any law, statute, rule or regulation,
or order, judgment, writ, injunction or decree of any court or governmental
instrumentality, or any contract, agreement or instrument to which it is a party
or by which it is bound, or to which it or any portion of its property is
subject and (z) will not require the consent, approval, authority or order of
any court or governmental agency that has not been previously obtained in
writing or delivered to the Purchaser;
there are no litigations, governmental or administrative proceedings or
arbitrations presently pending or, to Seller's actual knowledge, threatened in
writing with respect to any of the Property (exclusive of the proceedings
against tenants, tort and other liability proceeding for which adequate
insurance coverage is available, and exclusive of the proceedings, if any, set
forth on SCHEDULE 10.1(c) hereto) and Seller has delivered copies of all
relevant documents, filings and other materials relating to any such proceeding
or arbitrations (regardless of whether adequate insurance coverage is available
and inclusive of the proceedings set forth on Schedule 10.1 (c) hereto).
Purchaser shall have no liability under, or any obligation to pursue, such
litigation or proceedings, except as it may elect under Section 6.2 or Section
6.3 hereof;
Seller has not received written notice of any pending condemnation,
eminent domain or similar proceedings with respect to the Property, and has no
actual knowledge that any such proceedings are threatened or contemplated; there
are no unrecorded rights of first offer to purchase, rights of first refusal to
purchase, purchase options or similar rights or contractually required consents
to transfer pertaining to the Property (other than that set forth in the Citi
Office Lease);
the fixtures, furniture, furnishings, equipment, machinery and other
personal property attached to, appurtenant to or located on the Property (other
than the Excluded Property which is not being transferred) have been fully paid
for and are owned by Seller free and clear of all liens and encumbrances;
34
a true and complete list of the Protest Proceedings, if any, and the law
firms or consultants representing the Seller with respect thereto, is attached
hereto as SCHEDULE 10.1(g);
attached hereto as SCHEDULE 10.1(h) is a true, correct and complete list
of the Leases in effect as of the date hereof, including, without limitation,
all amendments, modifications, side letters or agreements pertaining thereto;
attached hereto as SCHEDULE 10.1(i) is a true, correct and complete list
of the Contracts in effect as of the date hereof, including, without limitation,
all amendments, modifications, side letters or agreements pertaining thereto;
attached hereto as SCHEDULE 10.1(j) is a true and complete list of the
security deposits currently held by Seller under the Leases in effect as of the
date hereof;
attached hereto as SCHEDULE 10.1(k) is a tenant arrearage schedule which
is true, correct and complete in all material respects as of the date hereof;
There are no unpaid Leasing Commissions or Tenant Allowances which are
either currently due and payable or earned (but not yet due or payable) except
as set forth on SCHEDULE 10.1(l)(i) (as to Leasing Commissions) and SCHEDULE
10.1(l)(ii) (as to Tenant Allowances), it being understood that the foregoing
representation excludes therefrom any representation as to Leasing Commissions
or Tenant Allowances which may become due as the result of any renewal,
extension, expansion or modification of any Existing Lease which has not been
exercised as of the date hereof;
attached hereto as SCHEDULE 10.1(m) is a true, correct and complete list
of all written agreements and documents obligating Seller or the Existing
Property Manager to pay Leasing Commissions that are not contained in a Lease,
together with all amendments and modifications thereto ("Commission Agreements")
to which Seller or Citicorp North America, Inc. is a named party or otherwise
with respect to which Seller has actual knowledge. Seller has delivered to
Purchaser true, correct and complete copies of all Commission Agreements,
provided that such representation is limited to Seller's knowledge with respect
to Commission Agreements not entered into by Seller or Citicorp North America,
Inc.
there is no spray-on asbestos located in the Building;
Seller is not a "foreign person" within the meaning of Section 1445(f)(3)
of the Code;
no base rent, fixed rent or additional rent has been paid more than one
(1) month in advance by any tenant under any Lease, and Seller has not received
any written notices by any tenant under any Lease asserting (x) a material
default by Seller under such Lease, or a defense or off-set to rent or
additional rent by any such tenant based on an allegation that Seller is in
default of any of its obligations as landlord under any Lease, in both cases
which default remains uncured or (y) any material claims of any nature; and
35
Seller is permitted under applicable law to retain a 1% administrative
fee with respect to security deposits held under each Lease with respect to
which Seller is retaining a 1% administrative fee in accordance with the
provisions of this Agreement.
Any and all uses of the phrase, "to the best of the Seller's knowledge" or other
references to Seller's knowledge in this Agreement shall mean the actual,
present, conscious knowledge of Xxxxx XxXxxxxx, Xxxxxx Xxxxxxx and Xxxxxxx
Xxxxxx (the "Seller Knowledge Individuals") as to a fact at the time given
without investigation or inquiry. Without limiting the foregoing, Purchaser
acknowledges that the Seller Knowledge Individuals have not performed and are
not obligated to perform any investigation or review of any files or other
information in the possession of Seller, or to make any inquiry of any persons,
or to take any other actions in connection with the representations and
warranties of Seller set forth in this Agreement. Neither the actual, present,
conscious knowledge of any other individual or entity, nor the constructive
knowledge of the Seller Knowledge Individuals or of any other individual or
entity, shall be imputed to the Seller Knowledge Individuals.
REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser hereby represents
and warrants to Seller as of the date hereof that:
Purchaser is a limited liability company duly organized, validly existing
and in good standing under the laws of the State of Delaware; and
Purchaser has the legal right, power and authority to enter into this
Agreement and perform all its obligations hereunder, and the execution and
delivery of this Agreement and the performance by Purchaser of its obligations
hereunder, (x) have been duly authorized, and (y) will not conflict with, or
result in a breach of, any of the terms, conditions and provisions of its
organizational and governance documents or any law, statute, rule or regulation,
or order, judgment, writ, injunction or decree of any court or governmental
instrumentality, or any contract, agreement or instrument to which Purchaser is
a party or by which it is bound, or to which it or any portion of its property
is subject and (z) will not require the consent, approval, authority or order of
any court or governmental agency that has not been previously obtained in
writing and delivered to Seller.
ACKNOWLEDGMENTS OF PURCHASER. Purchaser acknowledges and agrees for the
benefit of Seller that:
EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT OR IN ANY
AGREEMENT OR INSTRUMENT EXECUTED AND DELIVERED BY SELLER TO PURCHASER
CONTEMPORANEOUSLY HEREWITH, INCLUDING BY WAY OF EXAMPLE BUT NOT LIMITED TO
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 10.1 OF THIS AGREEMENT AND
THE LIMITED WARRANTY OF TITLE EXPRESSLY SET FORTH IN THE DEED (HEREINAFTER
COLLECTIVELY REFERRED TO IN THIS SECTION 10.3 AS THE "SURVIVING
REPRESENTATIONS"), SELLER HEREBY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS
AND WARRANTIES OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PROPERTY, AND PURCHASER
36
AGREES TO ACCEPT THE PROPERTY "AS IS, WHERE IS, WITH ALL FAULTS". WITHOUT
LIMITING THE GENERALITY OF THE PRECEDING SENTENCE OR ANY OTHER DISCLAIMER SET
FORTH HEREIN, SELLER AND PURCHASER HEREBY AGREE THAT, EXCEPT FOR THE SURVIVING
REPRESENTATIONS, SELLER HAS NOT MADE AND IS NOT MAKING ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, AS TO (A) THE NATURE OR
CONDITION, PHYSICAL OR OTHERWISE, OF THE PROPERTY OR ANY ASPECT THEREOF,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF HABITABILITY, SUITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, OR THE ABSENCE OF
REDHIBITORY OR LATENT VICES OR DEFECTS IN THE PROPERTY, (B) THE NATURE OR
QUALITY OF CONSTRUCTION, STRUCTURAL DESIGN OR ENGINEERING OF THE IMPROVEMENTS OR
THE STATE OF REPAIR OR LACK OR REPAIR OF ANY OF THE IMPROVEMENTS, (C) THE
QUALITY OF THE LABOR OR MATERIALS INCLUDED IN THE IMPROVEMENTS, (D) THE SOIL
CONDITIONS, DRAINAGE CONDITIONS, TOPOGRAPHICAL FEATURES, ACCESS TO PUBLIC
RIGHTS-OF-WAY, AVAILABILITY OF UTILITIES OR OTHER CONDITIONS OR CIRCUMSTANCES
WHICH AFFECT OR MAY AFFECT THE PROPERTY OR ANY USE TO WHICH THE PROPERTY MAY BE
PUT, (E) ANY CONDITIONS AT OR WHICH AFFECT OR MAY AFFECT THE PROPERTY WITH
RESPECT TO ANY PARTICULAR PURPOSE, USE, DEVELOPMENT POTENTIAL OR OTHERWISE, (F)
THE AREA, SIZE, SHAPE, CONFIGURATION, LOCATION, CAPACITY, QUANTITY, QUALITY,
CASH FLOW, EXPENSES OR VALUE OF THE PROPERTY OR ANY PART THEREOF, (G) THE NATURE
OR EXTENT OF TITLE TO THE PROPERTY, OR ANY EASEMENT, SERVITUDE, RIGHT-OF-WAY,
POSSESSION, LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHERWISE THAT
MAY AFFECT TITLE TO THE PROPERTY, (H) ANY ENVIRONMENTAL, GEOLOGICAL, STRUCTURAL,
OR OTHER CONDITION OR HAZARD OR THE ABSENCE THEREOF HERETOFORE, NOW OR HEREAFTER
AFFECTING IN ANY MANNER THE PROPERTY, INCLUDING BUT NOT LIMITED TO, THE PRESENCE
OR ABSENCE OF ASBESTOS OR ANY ENVIRONMENTALLY HAZARDOUS SUBSTANCE ON, IN, UNDER
OR ADJACENT TO THE PROPERTY, (I) THE COMPLIANCE OF THE PROPERTY OR THE OPERATION
OR USE OF THE PROPERTY WITH ANY APPLICABLE RESTRICTIVE COVENANTS, OR WITH ANY
LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENTAL BODY (INCLUDING
SPECIFICALLY, WITHOUT LIMITATION, ANY ZONING LAWS OR REGULATIONS, ANY BUILDING
CODES, ANY ENVIRONMENTAL LAWS, AND THE AMERICANS WITH DISABILITIES ACT OF 1990,
42 U.S.C. 12101 ET SEQ.). THE PROVISIONS OF THIS SECTION 10.3 SHALL BE BINDING
ON PURCHASER AND SHALL SURVIVE THE CLOSING.
PURCHASER HAS BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, AND THE
LEASES, CONTRACTS AND OTHER MATERIALS (INCLUDING, WITHOUT LIMITATION, TITLE
MATERIALS AND FINANCIAL REPORTS) RELATING TO THE PROPERTY THAT PURCHASER DEEMED
NECESSARY TO INSPECT AND REVIEW IN CONNECTION WITH THE
37
TRANSACTION CONTEMPLATED BY THIS AGREEMENT, AND PURCHASER HAS RETAINED SUCH
ENVIRONMENTAL CONSULTANTS, STRUCTURAL ENGINEERS AND OTHER EXPERTS AS IT DEEMED
NECESSARY TO INSPECT THE PROPERTY AND REVIEW SUCH MATERIALS. PURCHASER IS
RELYING ON ITS OWN INVESTIGATION AND THE ADVICE OF ITS EXPERTS REGARDING THE
PROPERTY, AND UPON ITS REVIEW OF LEASES, CONTRACTS, AND OTHER MATERIALS, AND NOT
ON ANY REPRESENTATIONS OR WARRANTIES OF SELLER (OTHER THAN THE SURVIVING
REPRESENTATIONS). PURCHASER ACKNOWLEDGES THAT SELLER MAKES ABSOLUTELY NO
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF
ANY INFORMATION, REPORTS OR OTHER MATERIALS DELIVERED TO PURCHASER, EXCEPT AS
MAY BE EXPRESSLY SET FORTH IN THE SURVIVING REPRESENTATIONS OR ELSEWHERE IN THIS
AGREEMENT OR IN THE INSTRUMENTS EXECUTED AND DELIVERED AT CLOSING.
REPRESENTATIONS NOT CONDITIONS TO CLOSING. The representations and
warranties set forth herein above and all other representations and warranties
contained in this Agreement shall be true and correct in all material respects
as of the Closing Date (except to the extent any such representations and
warranties expressly relate to an earlier date and with such changes as are
permitted under, or result by reason of the effect of, this Agreement); it being
agreed, however, that if any of such representations and warranties shall not be
true and correct in all material respects as of the Closing Date, the truth and
correctness of such representations and warranties shall not be conditions
precedent to closing the transactions contemplated herein (and the parties shall
continue to be absolutely and unconditionally obligated to consummate the
transactions contemplated under this Agreement), but the non-breaching party's
sole rights and remedies with respect to such breach shall be as set forth in
the succeeding section. In addition, Purchaser acknowledges and agrees that its
obligations under this Agreement shall not be subject to any financing or other
contingency and Purchaser shall have no right to terminate this Agreement or
receive a return of the Deposit (or the accrued interest thereon) except as
expressly provided for in Sections 4.2, 13.1 (a), 13.1(b), 14.1(b) and 15.2
hereof.
DAMAGES FOR BREACH OF REPRESENTATIONS. In the event of a material breach
with respect to any representation or warranty made by Seller or Purchaser under
this Agreement, the non-breaching party shall be entitled to pursue a claim with
respect to such breach if and only if (i) written notice of such breach is given
to the breaching party on or prior to the expiration of the applicable Survival
Period (as hereinafter defined) for such breach, which notice must contain a
reasonably detailed description of the facts relating to the claimed breach and
(ii) the liability and losses arising out of such breach, when aggregated with
all other breaches, if any, of representations and warranties under this
Agreement, shall exceed $2,500,000. For purposes of this Section 10.5, "Survival
Period" shall mean: with respect to the representations and warranties in
Sections 10.1(a), 10.1(b), 10.2(a) and 10.2(b), a period without expiration, and
with respect to all other representations and warranties, a period of one (1)
year commencing on the day following the Closing Date. The provisions of this
Section 10.5 shall survive the Closing.
38
NOTICES
NOTICES. All notices, demands, requests, approvals or other
communications ("notices") required to be given or which may be given hereunder
shall be in writing and shall be given by personal delivery with receipt
acknowledged or by United States registered or certified mail, return receipt
requested, postage prepaid or by Federal Express or other reputable national
overnight courier service, and shall be deemed given when received or refused at
the following addresses:
If to Seller:
Citibank, N.A.
000 Xxxx Xxxxxx-0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
With copies to:
Citigroup
Xxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
and:
Citigroup
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx - Xxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
and:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
If to Purchaser:
BP 000 Xxxx Xxxxxx LLC
c/o Boston Properties, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
39
With a copies to:
Boston Properties, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Each party may designate a change of address (or additional or substitute
parties for notice) by notice to the other party, given at least fifteen (15)
days before such change of address is to become effective. The giving of any
notice required hereunder may be waived in writing by the party entitled to
receive such notice.
CONFIDENTIALITY AND PRESS RELEASES
CONFIDENTIALITY. Purchaser acknowledges and agrees that it shall be bound
by all of the terms and conditions of that certain confidentiality letter
agreement between Boston Properties and Seller dated as of July 26, 2002.
Between the date hereof through and including the Closing Date and except as
otherwise expressly provided in Section 12.2 below, Purchaser and Seller shall
not (and shall use reasonable efforts to cause Purchaser's and Seller's
respective agents, employees, attorneys and advisors including, without
limitation, financial institutions to not) disclose, make known, divulge,
disseminate or communicate the Purchase Price or any of the terms of this
Agreement or this transaction or any agreement, document or understanding
pertinent to the instant transaction without the consent of the other party,
except (i) as required by law, (ii) to Purchaser's or Seller's employees and
advisors involved in the transaction, (iii) to Purchaser's prospective lenders
or investors or (iv) to Seller's lender or investors.
PRESS RELEASES. Purchaser and Seller shall promptly after the execution
of this Agreement issue a joint press release disclosing the material terms of
the transaction, which press release shall be in the form of EXHIBIT Q attached
hereto.
SURVIVAL. The provisions of Section 12.1 shall survive the termination of
this Agreement and the provisions of Section 12.2 shall survive the termination
hereof or the Closing.
40
DAMAGE AND DESTRUCTION
EFFECT OF DAMAGE. If all or any part of the Property is damaged by fire
or other casualty occurring following the date hereof and prior to the Closing
Date, whether or not such damage affects a material part of the Property, then:
if the estimated cost of repair or restoration is less than or equal to
$50,000,000 and if the estimated time to complete such repair or restoration is
twelve (12) months or less, neither party shall have the right to terminate this
Agreement and the parties shall nonetheless consummate this transaction in
accordance with this Agreement, without any abatement of the Purchase Price or
any liability or obligation on the part of Seller by reason of said destruction
or damage. In such event, subject to the terms of the Condominium Declaration,
Seller shall assign to Purchaser and Purchaser shall have the right to make a
claim for and to retain any casualty insurance proceeds received under the
casualty insurance policies and any rental interruption insurance (but not
business interruption insurance) in effect with respect to the Property on
account of said physical damage or destruction as shall be necessary to perform
repairs to the Building and/or to rebuild the Building to substantially the same
condition as it existed prior to the occurrence of such fire or other casualty
and Purchaser shall receive a credit against the cash due at Closing for the
amount of the deductible on such casualty insurance policy, and in the case of
an uninsured casualty of the type which is typically insured against in the case
of a property comparable to the Property, Purchaser shall receive a credit
against the cash due at Closing equal to the insurance proceeds which would have
been payable under an insurance policy covering such casualty if such casualty
had been insured against by Seller and assuming no deductible on such insurance
policy. If a casualty shall occur with respect to the Property for which
insurance is not available, or is not typically insured against, in the case of
a property comparable to the Property, and if the estimated cost of repair or
restoration is less than or equal to $50,000,000, Seller shall have the right at
its election to credit against the cash due at Closing the cost of such repair
and restoration, in which event the Closing shall occur in accordance with the
provisions of this Agreement, or Seller shall have the right at its election not
to credit against the cash due at Closing the cost of such repair or
restoration, in which event the Closing shall not occur unless Purchaser elects
to close notwithstanding the occurrence of such casualty without credit or
adjustment from Seller in favor of Purchaser, and in which event the Closing
shall occur in accordance with the provisions of this Agreement.
if the estimated cost of repair or restoration exceeds $50,000,000 or if
the estimated time to complete such repair or restoration exceeds twelve (12)
months, both Purchaser and Seller shall have the option, exercisable within
thirty (30) days after receipt of notice of the occurrence of such fire or other
casualty and such factual information regarding the casualty and availability of
insurance proceeds as is reasonably sufficient to enable Purchaser or Seller, as
the case may be, to make an informed decision about whether or not to proceed to
Closing, time being of the essence, to terminate this Agreement by delivering
notice thereof to the other party, whereupon the Deposit (together with any
interest accrued thereon) shall be returned to Purchaser and this Agreement
shall be deemed canceled and of no further force or effect, and neither party
shall have any further rights or liabilities against or to the other except for
such provisions which are expressly provided in this Agreement to survive the
termination hereof. If a fire or other
41
casualty described in this clause (b) shall occur and neither Purchaser nor
Seller shall have timely elected to terminate this Agreement, then Purchaser and
Seller shall consummate this transaction in accordance with this Agreement,
without any abatement of the Purchase Price or any liability or obligation on
the part of Seller by reason of said destruction or damage and, in such event,
subject to the terms of the Condominium Declaration, Seller shall assign to
Purchaser and Purchaser shall have the right to make a claim for and to retain
any casualty insurance proceeds received under the casualty insurance policies
in effect with respect to the Property on account of said physical damage or
destruction as shall be necessary to perform repairs to the Building and/or to
rebuild the Building to substantially the same condition as it existed prior to
the occurrence of such fire or other casualty and Purchaser shall receive a
credit from the cash due at Closing for the amount of the deductible on such
casualty insurance policy.
ESTIMATES. The estimated cost to repair and/or restore and the estimated
time to complete contemplated in Section 13.1 above shall be established by
estimates obtained by Seller from independent contractors, subject to
Purchaser's review and reasonable approval of the same and the provisions of
Section 13.3 below.
DISPUTES. The provisions of this Article XIII supersede the provisions of
Section 5-1311 of the General Obligations Law of the State of New York. Any
disputes under this Article XIII as to the cost of repair or restoration or the
time for completion of such repair or restoration shall be resolved by expedited
arbitration before a single arbitrator acceptable to both Seller and Purchaser
in their reasonable judgment in accordance with the rules of the American
Arbitration Association; provided that if Seller and Purchaser fail to agree on
an arbitrator within five days after a dispute arises, then either party may
request The Real Estate Board of New York, Inc., to designate an arbitrator.
Such arbitrator shall be an independent architect or engineer having at least
ten (10) years of experience in the construction of office buildings in
Manhattan. The determination of the arbitrator shall be conclusive and binding
upon the parties. The costs and expenses of such arbitrator shall be borne
equally by Seller and Purchaser.
CONDEMNATION
EFFECT OF CONDEMNATION. If, prior to the Closing Date, any part of the
Property is taken (other than a temporary taking), or if Seller shall receive an
official notice from any governmental authority having eminent domain power over
the Property of its intention to take, by eminent domain proceeding, any part of
the Property (a "Taking"), then:
if such Taking involves ten percent (10%) or less of the rentable area of
the Building as determined by an independent architect chosen by Seller (subject
to Purchaser's review and reasonable approval of such determination and the
provisions of Section 14.2 below), neither party shall have any right to
terminate this Agreement, and the parties shall nonetheless consummate this
transaction in accordance with this Agreement, without any abatement of the
Purchase Price or any liability or obligation on the part of Seller by reason of
such Taking; provided, however, that Seller shall, on the Closing Date, (i)
subject to the terms of the Condominium Declaration, assign and remit to
Purchaser, and Purchaser shall be entitled to receive and keep, the net proceeds
of any award or other proceeds of such Taking which may
42
have been collected by Seller as a result of such Taking less the reasonable
expenses incurred by Seller in connection with such Taking, or (ii) if no award
or other proceeds shall have been collected, deliver to Purchaser, subject to
the terms of the Condominium Declaration, an assignment of Seller's right to any
such award or other proceeds which may be payable to Seller as a result of such
Taking and Purchaser shall reimburse Seller for the reasonable expenses incurred
by Seller in connection with such Taking.
if such Taking involves more than ten percent (10%) of the rentable area
of the Property as determined by an independent architect chosen by Seller
(subject to Purchaser's review and reasonable approval of such determination and
the provisions of Section 14.2(b) below), both Purchaser and Seller shall have
the option, exercisable within thirty (30) days after receipt of notice of such
Taking and such factual information regarding the Taking and the availability of
awards or other proceeds of such Taking as is reasonably sufficient to enable
Purchaser or Seller, as the case may be, to make an informed decision about
whether or not to proceed to Closing, time being of the essence, to terminate
this Agreement by delivering notice thereof to the other party, whereupon the
Deposit (together with any interest earned thereon) shall be returned to
Purchaser and this Agreement shall be deemed canceled and of no further force or
effect, and neither party shall have any further rights or liabilities against
or to the other except pursuant to the provisions of this Agreement which are
expressly provided to survive the termination hereof. If a Taking described in
this clause (b) shall occur and neither Purchaser nor Seller shall have timely
elected to terminate this Agreement, then Purchaser and Seller shall consummate
this transaction in accordance with this Agreement, without any abatement of the
Purchase Price or any liability or obligation on the part of Seller by reason of
such Taking; provided, however, that Seller shall, on the Closing Date, (i)
subject to the terms of the Condominium Declaration, assign and remit to
Purchaser, and Purchaser shall be entitled to receive and keep, the net proceeds
of any award or other proceeds of such Taking which may have been collected by
Seller as a result of such Taking less the reasonable expenses incurred by
Seller in connection with such Taking, or (ii) if no award or other proceeds
shall have been collected, deliver to Purchaser, subject to the terms of the
Condominium Declaration, an assignment of Seller's right to any such award or
other proceeds which may be payable to Seller as a result of such Taking and
Purchaser shall reimburse Seller for the reasonable expenses incurred by Seller
in connection with such Taking.
The provisions of this Article XIV supersede the provisions of Section
5-1311 of the General Obligations Law of the State of New York. Any disputes
under this Article XIV as to whether the Taking involves more than ten percent
(10%) of the rentable area of the Property shall be resolved by expedited
arbitration before a single arbitrator acceptable to both Seller and Purchaser
in their reasonable judgment in accordance with the rules of the American
Arbitration Association; provided that if Seller and Purchaser fall to agree on
an arbitrator within five days after a dispute arises, then either party may
request The Real Estate Board of New York, Inc. to designate an arbitrator. Such
arbitrator shall be an independent architect having at least ten (10) years of
experience in the construction of office buildings in Manhattan. The costs and
expenses of such arbitrator shall be borne equally by Seller and Purchaser.
43
DEFAULT BY PURCHASER OR SELLER
PURCHASER DEFAULT. If Purchaser shall default in the payment of the
Purchase Price or if Purchaser shall default in the performance of any of its
other obligations to be performed on the Closing Date, Seller's sole remedy by
reason thereof shall be to terminate this Agreement and, upon such termination,
Seller shall be entitled to retain the Deposit (and any interest earned thereon)
as liquidated damages for Purchaser's default hereunder, it being agreed that
the damages by reason of Purchaser's default are difficult, if not impossible,
to ascertain, and thereafter Purchaser and Seller shall have no further rights
or obligations under this Agreement except for those that are expressly provided
in this Agreement to survive the termination hereof. If Seller terminates this
Agreement pursuant to a right given to it hereunder and Purchaser takes any
action which interferes with Seller's ability to sell, exchange, transfer,
lease, dispose of or finance the Property or take any other actions with respect
thereto (including, without limitation, the filing of any lis pendens or other
form of attachment against the Property), then the named Purchaser (and any
assignee of Purchaser's interest hereunder) shall be liable for all loss, cost,
damage, liability or expense (including, without limitation, reasonable
attorneys' fees, court costs and disbursements) incurred by Seller by reason of
such action to contest by Purchaser.
SELLER DEFAULT. If Seller shall default in any of its obligations to be
performed on the Closing Date, Purchaser as its sole remedy by reason thereof
(in lieu of prosecuting an action for damages or proceeding with any other legal
course of conduct, the right to bring such actions or proceedings being
expressly and voluntarily waived by Purchaser, to the extent legally
permissible, following and upon advice of its counsel) shall have the right
subject to the other provisions of this Section 15.2 (i) to seek to obtain
specific performance of Seller's obligations hereunder, provided that any action
for specific performance shall be commenced within sixty (60) days after such
default, and if Purchaser prevails thereunder, Seller shall reimburse Purchaser
for all reasonable legal fees, court costs and all other reasonable costs of
such action or (ii) to receive a return of the Deposit (together with any
interest earned thereon), it being understood that if Purchaser fails to
commence an action for specific performance within sixty (60) days after such
default, Purchaser's sole remedy shall be to receive a return of the Deposit
(together with any interest earned thereon). Upon such return and delivery, this
Agreement shall terminate and neither party hereto shall have any further
obligations hereunder except for those that are expressly provided in this
Agreement to survive the termination hereof. Notwithstanding the foregoing,
Purchaser shall have no right to seek specific performance if Seller shall be
prohibited from performing its obligations hereunder by reason of any law,
regulation, or other legal requirement applicable to Seller.
SURVIVAL. The provisions of this Article XV shall survive the termination
hereof.
MISCELLANEOUS PROVISIONS
SEVERABILITY. Each part of this Agreement is intended to be severable. If
any term, covenant, condition or provision hereof is unlawful, invalid, or
unenforceable for any reason whatsoever, this Agreement shall be construed
without such term, covenant, condition or provision.
44
RIGHTS CUMULATIVE; WAIVERS. The rights of each of the parties under this
Agreement are cumulative and may be exercised as often as any party considers
appropriate. The rights of any of the parties hereunder shall not be capable of
being waived or varied otherwise than by an express waiver or variation in
writing executed by all of the parties hereto. Failure to exercise or any delay
in exercising any of such rights also shall not operate as a waiver or variation
of that or any other such right. Defective or partial exercise of any of such
rights shall not preclude any other or further exercise of that or any other
such right. No act or course of conduct or negotiation on the part of any party
shall in any way preclude such party from exercising any such right or
constitute a suspension or any variation of any such right.
HEADINGS. The headings contained in this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
CONSTRUCTION. Unless the context otherwise requires, singular nouns and
pronouns, when used herein, shall be deemed to include the plurals of such nouns
or pronouns and pronouns of one gender shall be deemed to include the equivalent
pronouns of the other gender.
ASSIGNMENT. Purchaser shall not assign its rights under this Agreement to
any other party without the prior written consent of Seller; provided, however,
that the Purchaser named herein shall have the one-time right to assign this
Agreement to a "Controlled Affiliate" (as defined below). "Controlled Affiliate"
shall mean any entity (i) controlled by Purchaser and (ii) the majority of the
beneficial interests in which are owned, directly or indirectly, by Purchaser as
of the date of the assignment and the Closing Date. "Controlled by" means the
power and authority to direct the business and affairs of the assignee by reason
of the ownership of a majority of the beneficial interests in such assignee, by
contract or otherwise. Any such assignment shall be conditioned upon Purchaser
delivering to Seller an executed original of the assignment and assumption
agreement wherein the assignee assumes all of the obligations of the Purchaser
named herein and proof reasonably satisfactory to Seller that the assignee
constitutes a "Controlled Affiliate". An assignment or transfer of this
Agreement shall not relieve the Purchaser named herein of any of its obligations
hereunder which accrued prior to the date of such assignment. Except as set
forth in Section 16.9 below, this Agreement and the terms, covenants,
conditions, and provisions hereof, and the obligations, undertakings, rights and
benefits hereunder, including the exhibits and schedules hereto, shall be
binding upon, and shall inure to the benefit of, the undersigned parties and
their respective successors and assigns.
1031 COOPERATION. Purchaser may acquire the Property as part of an
Internal Revenue Code Section 1031 tax deferred exchange for the benefit of
Purchaser. Seller agrees to assist and cooperate in all reasonable ways in such
exchange at no cost, expense or liability to Seller and Seller further agrees to
execute any and all documents (subject to reasonable approval of Seller and its
legal counsel) as are reasonably necessary in connection with such exchange
provided that in no event or under any circumstance shall the Closing be delayed
beyond the Outside Closing Date as a result of any such Transaction. In
connection with any such tax deferred exchange, Purchaser may assign all
contract rights and obligations hereunder to a "qualified intermediary" or
"exchange accommodation title holder" as such terms are defined in the Internal
Revenue Code, relevant Treasury regulations and relevant revenue procedures and
nothing contained in Section 16.5 hereof shall restrict any such assignment. As
part of such
45
exchange, Seller shall not be obligated to acquire or convey any other property
as part of such exchange. No permitted assignment under this Section shall
relieve Purchaser of liability under this Agreement.
COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument, and
either party hereto may execute this Agreement by signing any such counterpart.
GOVERNING LAW. 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 NEW YORK AND FEDERAL STATUTORY OR COMMON LAW, AS
APPLICABLE, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAWS.
JURISDICTION; VENUE. For the purposes of any suit, action or proceeding
involving this Agreement, the parties hereto hereby expressly submit to the
jurisdiction of all federal and state courts sitting in New York County in the
State of New York and consent that any order, process, notice of motion or other
application to or by any such court or a judge thereof may be served within or
without such court's jurisdiction by registered mail or by personal service,
PROVIDED that a reasonable time for appearance is allowed, and the parties
hereto agree that such court shall have exclusive jurisdiction over any such
suit, action or proceeding commenced under this Agreement. Each party hereby
irrevocably waives any objection that it may have now or hereafter to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any federal or state court sitting in New York County in
the State of New York and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
NO THIRD-PARTY BENEFICIARIES. No person, firm or other entity other than
the parties hereto (and to the extent provided herein, the other Seller
Indemnified Parties) shall have any rights or claims under this Agreement. The
representations, warranties, covenants and indemnities of each party hereunder
shall run to the benefit of the parties hereto only (and to the extent provided
herein, the other Seller Indemnified Parties), and not to any successors,
assigns or other third parties.
WAIVER OF TRIAL BY JURY. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT TO A
TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND
AGREE THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.
BROKERS AND ADVISORS. 1. Seller and Purchaser each warrants and
represents to the other that it has not dealt or negotiated with any broker in
connection with the sale of the Property as provided by this Agreement. Seller
and Purchaser each hereby agrees to indemnify and hold the other harmless from
all loss, cost, damage or expense (including reasonable attorney's fees)
incurred by the other as a result of any claim arising out of the acts of the
indemnifying party (or
46
others on its behalf) for a commission, finder's fee or similar compensation
made by any broker, finder or any party who claims to have dealt with such
party.
(b) Seller shall be responsible for the payment of any sums due Xxxxxxx Xxxxx
Xxxxxx in its capacity as financial advisor to Seller and for the payment of all
professionals and other advisors retained by the Seller in connection with the
sale of the Property as provided by this Agreement. Purchaser shall be
responsible for the payment of all professionals and advisors retained by
Purchaser in connection with the sale of the Property as provided by this
Agreement.
(c) The provisions of this Section 16.12 shall survive the Closing.
INTEGRATION. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the specific matters agreed
to herein and supersedes all prior agreements or understandings between the
parties with respect to the matters contained herein. The parties hereto
acknowledge that no oral or other agreements, understandings, representations or
warranties exist with respect to this Agreement or with respect to the
obligations of the parties hereto under this Agreement, except those
specifically set forth in this Agreement.
ERISA. Purchaser represents and warrants to Seller that Purchaser is not
an employee benefit plan or a governmental plan, or a party in interest of
either of such plans, and that the funds being used to acquire the Property are
not plan assets or subject to state laws regulating investment of, and fiduciary
obligations with respect to, a governmental plan. As used in this Section 16.14,
the terms "employee benefit plan", "party in interest", "plan assets" and
"governmental plan" shall have the respective meanings assigned to them in the
Employee Retirement Income Security Act of 1974, as amended, and the Regulations
promulgated in connection therewith. The representations and warranties
contained in this Section 16.13 shall survive the Closing or the termination of
this Agreement.
AMENDMENTS. This Agreement may not be changed, modified or terminated,
except by an instrument in writing signed by the parties hereto.
FURTHER ASSURANCES; COOPERATION. The parties will execute, acknowledge
and deliver all and every such further acts, deeds, conveyances, assignments,
notices, transfers and assurances as may be reasonably required for the better
assuring, conveying, assigning, transferring and confirming unto Purchaser the
Property and for carrying out the intentions or facilitating the consummation of
the transactions contemplated by this Agreement. In furtherance thereof, the
parties hereto shall cooperate with each other to effectuate the transactions
contemplated by this Agreement and to minimize transaction costs. The parties
further agree to cooperate with each other in connection with (i) any filings
pursuant to Regulation SX, (ii) reviewing and addressing claims by tenants with
respect to operating expenses billed at the Building, (iii) employment matters
described in Section 9.3 of this Agreement, and (iv) any other matters relating
to the period prior to the Closing. The provisions of this Section 16.16 shall
survive the Closing for a period without expiration.
TENANT ESTOPPELS. Seller shall request each of the Other Tenants under a
Lease to deliver an estoppel certificate in the form of the Standard Tenant
Estoppel and Seller shall exercise good
47
faith, commercially reasonable efforts to cause such tenants to furnish executed
Standard Tenant Estoppels and to deliver the same to Purchaser; provided,
however, Purchaser will accept any Standard Tenant Estoppel with such
modifications thereto (i) to conform the same to the form of estoppel such
tenant is obligated to deliver under its applicable Lease, and such further
non-material modifications thereof, (ii) making note of items which constitute
Permitted Encumbrances or which Seller otherwise agrees to discharge, or (iii)
to conform the same to the Leases or other information delivered to Purchaser or
made available for its review.
NO RECORDING. Neither this Agreement nor any memorandum hereof may be
recorded without first obtaining Seller's consent thereto.
48
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first referenced above.
SELLER:
CITIBANK, N.A.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
BP 000 XXXX XXXXXX LLC
By: Boston Properties, L.P., its sole
member
By: Boston Properties, Inc.,
its general partner
By:
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Vice President
49
