EXHIBIT 10.3
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN:
EAST BROADWAY 5151 LIMITED PARTNERSHIP
METROPOLITAN OPERATING PARTNERSHIP, L.P.,
5750 ASSOCIATES LIMITED PARTNERSHIP
MAITLAND ASSOCIATES, LTD., and
MAITLAND WEST ASSOCIATES LIMITED PARTNERSHIP
(the "SELLER")
and
PRAEDIUM PERFORMANCE FUND IV, L.P.
(the "PURCHASER")
Dated: as of July 22, 1999
TABLE OF CONTENTS
SECTIONS Page
SECTION 1: SUBJECT OF SALE...................................................2
SECTION 2: DEFINITIONS.......................................................3
SECTION 3: TRANSFER OF PROPERTY; PURCHASE PRICE.............................9
SECTION 4: DUE DILIGENCE; "AS IS" SALE.......................................9
SECTION 5: MATTERS TO WHICH THE SALE IS SUBJECT.............................10
SECTION 6: OUTSTANDING INTEREST OR UNMARKETABLE TITLE.......................11
SECTION 7: ADJUSTMENTS......................................................12
SECTION 8: CASUALTY.........................................................13
SECTION 9: CONDEMNATION PENDING CLOSING.....................................14
SECTION 10: THE SELLER'S WARRANTIES AND REPRESENTATIONS.....................15
SECTION 11: THE SELLER'S INSTRUMENTS AT CLOSING.............................20
SECTION 12: PURCHASER'S REPRESENTATIONS AND WARRANTIES......................23
SECTION 13: PURCHASER'S INSTRUMENTS AT CLOSING..............................24
SECTION 14: CONTRACT PERIOD.................................................15
SECTION 15: BROKERAGE.......................................................24
SECTION 16: CONDITIONS PRECEDENT TO CLOSING.................................25
SECTION 17: CLOSING.........................................................27
SECTION 18: EXPENSES........................................................27
SECTION 19: NOTICES.........................................................28
SECTION 20: DEFAULT.........................................................29
SECTION 21: ASSIGNMENT......................................................30
SECTION 22: INDEMNITY.......................................................30
SECTION 23: COUNTERPARTS....................................................30
SECTION 24: INTENTIONALLY DELETED...........................................30
SECTION 25: MISCELLANEOUS...................................................30
SECTION 26: ESCROW AGENT....................................................32
SECTION 27: CONFIDENTIALITY/PUBLICATION.....................................33
SCHEDULES
Schedule 1: List of Personal Property
Schedule 2: Brokerage Agreements
Schedule 3: Major Tenants
Schedule 4: Permitted Encumbrances
Schedule 5: Delinquent Rents
Schedule 6: Service Contracts
Schedule 7: Insurance Limits and Deductibles
Schedule 8: Leases
Schedule 9: Security Deposits
Schedule 10: Rent Rolls
Schedule 11: Tenant Improvements Not Yet Performed or Paid for
Schedule 12: Unpaid Tenant Improvement Allowances
Schedule 13: Litigation or other Proceedings
Schedule 14: Title Endorsements
Schedule 15: Leasing Proposals
Schedule 16: Xxxxxx Contract
Schedule 17: Xxxxxxxx & Xxxxxxx Contract
EXHIBITS
Exhibit A: Legal Description of the Land
Exhibit B: Deed
Exhibit C: Assignment and Assumption Agreement
Exhibit D: FIRPTA Certificate
Exhibit E: Arizona Contract Estoppel
Exhibit E-1 Copies of Existing Arizona Estoppels
Exhibit F: Florida Estoppels
Exhibit F-1: Florida Estoppel Corrections
Exhibit G: Form of Novation Agreement
Exhibit H: Form of Notice of Assignment
Exhibit I: Form of Assignment of the GSA Lease
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") made as of the 22nd
day of July, 1999 by and between EAST BROADWAY 5151 LIMITED PARTNERSHIP,
METROPOLITAN OPERATING PARTNERSHIP, L.P. ("METROPOLITAN"), 5750 ASSOCIATES
LIMITED PARTNERSHIP, MAITLAND ASSOCIATES, LTD. and MAITLAND WEST ASSOCIATES
LIMITED PARTNERSHIP, each having an address at c/o Metropolitan Partners, LLC,
000 Xxxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (collectively, the "SELLER" and
each, individually, a "SELLER") and PRAEDIUM PERFORMANCE FUND IV, L.P., having
an address at 00 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter, the "PURCHASER").
RECITALS
A. East Broadway 5151 Limited Partnership is the owner of the property
known as 0000 Xxxx Xxxxxxxx in Tuscon, Arizona ("5151 EAST BROADWAY"), which
property is more particularly described as Parcel 1 on Exhibit A attached
hereto.
B. Metropolitan Operating Partnership, L.P. is the owner of the property
known as Century Plaza in Phoenix, Arizona ("CENTURY PLAZA"), which property
is more particularly described as Parcel 2 on Exhibit A attached hereto (0000
Xxxx Xxxxxxxx and Century Plaza are hereinafter collectively referred to as
the "ARIZONA PROPERTIES").
C. 5750 Associates Limited Partnership is the owner of the property known
as 0000 Xxxxx Xxxx. in Xxxxxxx, Xxxxxxx ("0000 MAJOR BLVD."), which property
is more particularly described as Parcel 3 on Exhibit A attached hereto.
X. Xxxxxxxx Associates, Ltd. is the owner of the property known as
Maitland Forum in Orlando, Florida ("MAITLAND FORUM") which property is more
particularly described as Parcel 4 on Exhibit A attached hereto.
X. Xxxxxxxx West Associates Limited Partnership is the owner of the
property known as Maitland West in Orlando, Florida ("MAITLAND WEST") which
property is more particularly described as Parcel 5 on Exhibit A attached
hereto (0000 Xxxxx Xxxx., Xxxxxxxx Forum and Maitland West are hereinafter
collectively referred to as the "FLORIDA PROPERTIES"; the Arizona Properties
and the Florida Properties are each hereinafter sometimes individually
referred to as a "PROPERTY").
F. Purchaser desires to purchase the Properties and Seller desires to
sell the same to Purchaser pursuant to the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, do hereby agree as follows:
SUBJECT OF SALE
Section 1.01. Subject to and in accordance with the terms and conditions
of this Agreement, the Seller shall transfer and convey to Purchaser, all of
the Seller's right, title and interest in and to the following:
(a) (i) those certain parcels of real property situate, lying and being
in the States of Arizona and Florida and being more particularly described on
EXHIBIT A attached hereto (the "LAND"), and (ii) all of the improvements
located on the Land (individually, a "BUILDING" and collectively, the
"IMPROVEMENTS");
(b) all rights, privileges, grants and easements appurtenant to the
Seller's interest in the Land and Improvements, including, without limitation,
all of the Seller's right, title and interest in and to the Land lying in the
bed of any public street, road or alley, all mineral and water rights and all
easements, licenses, covenants and rights-of-way or other appurtenances used
in connection with the beneficial use and enjoyment of the Land and
Improvements (the Land and Improvements and all such rights, privileges,
easements, grants and appurtenances are sometimes referred to herein as the
"REAL PROPERTY"); (c) the fixtures, machinery, equipment, and other items of
personal property and fixtures owned by the Seller and located in or attached
to the Real Property, including, but not limited to the items set forth on
Schedule 1 attached hereto and made a part hereof and all warranties and
guarantees, to the extent in Seller's possession or control, relating to the
foregoing or the Real Property or any portion thereof (the "PERSONAL
PROPERTY"), and used in connection with the ownership or operation of the Real
Property; (d) all leases, notices and other agreements with respect to the use
and occupancy of the Real Property, together with all amendments and
modifications thereto and any guaranties provided thereunder (individually, a
"LEASE", collectively, the "LEASES") and rents, percentage rents, additional
rents, including prepaid rents (to the extent attributable to the period
following the Closing) reimbursements, profits, income, receipts (collectively
"Rents") and the amounts required to be deposited (individually, a "SECURITY
DEPOSIT"; collectively, the "SECURITY DEPOSITS") under any such Leases in the
nature of security for the performance of any Tenant's obligations thereunder;
(e) the right to use any names by which any of the Real Property is commonly
known and all goodwill, if any, related to said names; (f) all permits,
licenses, approvals, and certificates relating to the Real Property and the
Personal Property (collectively, the "PERMITS AND LICENSES") and all of the
Seller's right, title and interest in and to (i) those contracts (including,
without limitation, management contracts) and agreements for the servicing,
maintenance, repair or operation of the Real Property (the "SERVICE
CONTRACTS") and (ii) the brokerage agreements listed on Schedule 2 attached
hereto and made a part hereof (the "BROKERAGE AGREEMENTS") relating to the
Leases; (g) all books, records, promotional material, tenant data, past and
current rent rolls, market studies, keys, plans and specifications (other than
the general ledger account of the Seller) used in connection with the use or
operation of the Real Property or Personal Property (collectively, the "BOOKS
AND RECORDS") in each case to the extent in Seller's possession or control;
and (h) all other rights, privileges, and appurtenances, if any related to the
ownership, use or operation of the Real Property or Personal Property,
including, without limitation, any real estate tax refunds relating to the
Property allocable to the period following the Closing Date. The Real
Property, the Personal Property, the Leases, the Security Deposits, the
Permits and Licenses, the Service Contracts, the Brokerage Agreements, the
Books and Records, and all other property interests relating or appurtenant to
each Property being conveyed hereunder are hereinafter collectively referred
to as the "PROPERTIES".
DEFINITIONS
Section 2.01. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly indicates a contrary intent:
(i) the capitalized terms defined in this Section have the meanings
assigned to them in this Section, and include the plural as well as the
singular; and
(ii) the words "herein", "hereof", and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Section or other subdivision.
"ACTUAL KNOWLEDGE" shall mean the actual knowledge (after due inquiry
with the Arizona Property Manager and the Florida Property Manager and after
requiring (i) the Arizona Property Manager to verify any relevant information
with Xxxxx Xxxxxx and the personnel listed on Exhibit H to the Arizona
Property Management Agreement and (ii) the Florida Property Manager to verify
any relevant information with the personnel listed on Exhibit A to the Florida
Property Management Agreement) of X.X. Xxxx, III, Xxxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxxxxx and Metropolitan, it being agreed by the parties
hereto that no knowledge shall be imputed to Seller or any of the foregoing
individuals or entities on account of the receipt by Metropolitan of the
records of Tower Realty Trust, Inc. subsequent to the merger, consummated on
May 24, 1999, pursuant to that certain Agreement and Plan of Merger, dated as
of December 8, 1998, among Metropolitan Partners LLC, Reckson Operating
Partnership, L.P., Reckson Associates Realty Corp. and Tower Realty Trust,
Inc.
"AFFILIATE" as to any Person, shall mean any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 50% or more of the
securities having ordinary voting power for the election of directors of such
Person or (b) direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"ANTICIPATED MATERIAL LOSS" shall have the meaning set forth in the
definition of Material Loss.
"ANTICIPATED MATERIAL LOSS DEADLINE" shall have the meaning set forth in
Section 10.26 hereof.
"ARIZONA CONTRACT ESTOPPEL" shall mean the form of estoppel certificate
attached hereto as Exhibit E.
"ARIZONA PROPERTY MANAGEMENT AGREEMENT" shall mean that certain
Management and Leasing Agreement, dated as of May 24, 1999, between East
Broadway 5151 Limited Partnership, Metropolitan Operating Partnership, L.P.,
Corporate Center Associates, Black Canyon Loop Company, LLC and the Arizona
Property Manager.
"ARIZONA PROPERTY MANAGER" shall mean JDB Asset Management, Inc.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the Assignment and
Assumption Agreement in the form of Exhibit C attached hereto.
"BOOKS AND RECORDS" shall have the meaning set forth in Section 1.01
hereof.
"BROKERAGE AGREEMENTS" shall have the meaning set forth in Section 1.01
hereof.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or State
of New York or federal legal holiday.
"CLOSING" shall mean the closing of the transactions contemplated by this
Agreement.
"CLOSING DATE" shall mean the date when title to the Property is conveyed
to Purchaser in accordance with the terms and conditions of this Agreement.
"CONTRACT PERIOD" shall mean the period commencing on the date of this
Agreement and ending on the Closing Date.
"DATA ROOM" shall mean, with respect to the Arizona Properties, the "data
room" in the offices of Insignia/ESG, Inc. at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxx, Arizona, or at such other location as the materials relating to
the Arizona Properties may be located subsequent to the date of this Agreement
and (ii) with respect to the Florida Properties, the "data room" in the
offices of CB Xxxxxxx Xxxxx, Inc. at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxx, or at such other location as the materials relating to the
Florida Properties may be located subsequent to the date of this Agreement.
"DEPOSIT" shall have the meaning set forth in Section 3.02 hereof.
"ENVIRONMENTAL LAWS" shall mean all foreign, federal, state and local
laws, regulations, rules and ordinances relating to pollution or protection of
the environment, including, without limitation, laws relating to releases or
threatened releases of hazardous substances, oils, pollutants or contaminants
into the indoor or outdoor environment (including, without limitation, ambient
air, surface water, groundwater, land, surface and subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, release, transport or handling of hazardous substances,
oils, pollutants or contaminants expressly intending to include without
limitation asbestos.
"ESCROW AGENT" shall mean Commonwealth Land Title Insurance Company.
"FLORIDA ESTOPPELS" shall have the meaning set forth in Section
11.01(f)(ii) hereof.
"FLORIDA PROPERTY MANAGEMENT AGREEMENT" shall mean that certain Agreement
for the Management of Xxx Xxxxxxx Xxxxxx, 0000 Xxxxxx Xxxxxx, Xxxxxxxx Forum
and Maitland West Buildings A, B and C, dated as of May 24, 1999, between
Maitland West Associates Limited Partnership, Maitland Associates LTD, 5750
Associates Limited Partnership, Magnolia Associates LTD and the Florida
Property Manager.
"FLORIDA PROPERTY MANAGER" shall mean CB Xxxxxxx Xxxxx, Inc.
"GROUND LEASE" shall have the meaning set forth in Section 11.01(q)
hereof.
"INDEMNITEE" shall have the meaning set forth in Section 15.02 hereof.
"INDEMNITOR" shall have the meaning set forth in Section 15.02 hereof.
"KNOWLEDGE" shall mean the actual knowledge of Xxxx Xxxxxxxxx and Xxxxx
Xxxxxxxxxx and the information related in the Arizona Contract Estoppels and
the Florida Estoppels.
"LEASES" shall have the meaning set forth in Section 1.01 hereof.
"LOSS" or "LOSSES" shall mean actual damage, loss, reasonable cost or
reasonable expense (including reasonable costs of investigation incurred in
defending against and/or settling such damage, loss, cost or expense or claim
therefor and any amounts paid in settlement thereof) imposed on, or incurred
by Seller.
"LOSS EVENT" shall have the meaning set forth in Section 10.26 hereof.
"MAC THRESHOLD" shall have the meaning set forth in the definition of
Material Adverse Change.
"MAJOR ARIZONA TENANTS" shall mean those Major Tenants located in the
Arizona Properties.
"MAJOR TENANTS" shall mean the Tenants identified on Schedule 3, attached
hereto.
"MATERIAL ADVERSE CHANGE" shall mean the occurrence of a reduction of the
annual base rent with respect to the Properties as compared to the aggregate
annual base rent stated for the Properties shown on the Rent Roll on account
of (i) the failure of a Tenant or Tenants (excluding Sverdrup and the Type A
Delinquent Tenants) to pay annual base rent for either (x) the one (1) full
calendar month preceding the Closing Date and for the calendar month in which
the Closing Date occurs if the Closing occurs on or after the fifteenth (15th)
day of a month or (y) if the Closing Date occurs before the fifteenth (15th)
day of a calendar month, the two (2) full calendar months preceding the
Closing Date, which arrearages remain uncured on the Closing Date, (ii) the
filing of a voluntary or involuntary petition in bankruptcy by or with respect
to one or more Tenants (excluding Sverdrup), (iii) or the termination of one
or more Leases (excluding Sverdrup) other than pursuant to (A) an option
contained in such Lease(s), (B) the stated expiration of such Lease(s) (but
not a termination in connection with a default by either the landlord(s) or
the Tenant(s) thereunder) or (C) a termination in connection with a casualty
or condemnation, which shall be governed by Sections 8 and 9 hereof (the
occurrence of (i), (ii) or (iii) above with respect to any Lease or Leases
being hereinafter referred to as a "MATERIAL TENANT DEFAULT"), it being
understood that the natural expiration of a Lease or the exercise of a
termination option as provided in a Lease shall not be a Material Tenant
Default, which loss of or reduction of annual base rent exceeds in the
aggregate $800,000 (the "MAC THRESHOLD"). For purposes of this Agreement, the
occurrence of a Material Tenant Default with respect to any Lease shall be
deemed to cause a loss of revenue with respect to such Lease in the amount of
one (1) year's annual base rent payable under the Lease at the then applicable
rental rate for such Tenant stated in the Rent Roll. Notwithstanding anything
to the contrary herein set forth, the term "Material Adverse Change" shall not
include any loss of or reduction of revenue to the extent that such loss of or
reduction of revenue as compared to the Rent Roll occurs (1) with respect to
any of the Leases to Blazer Financial Services, Inc., Trust One and IBA, (2)
as a result of a casualty or condemnation with respect to any Property or (3)
on account of the area of Century Plaza.
"MATERIAL LITIGATION THRESHOLD" shall have the meaning set forth in the
definition of Material Property Litigation.
"MATERIAL LOSS" or "MATERIAL LOSSES" shall mean any actual damage, loss,
cost or expense or, subject to Section 10.26 hereof, any claimed damage, loss,
cost or expense reasonably likely to become actual by some known date or
following the occurrence of some event or events (i.e. following the process
of litigation; such damage, loss, cost or expense reasonably likely to become
actual as aforesaid being herein referred to as an "ANTICIPATED MATERIAL
LOSS"), including reasonable costs of investigation incurred in defending
against and/or settling such damage, loss, cost or expense or claim therefor
and any amounts paid in settlement thereof but excluding consequential
damages, that are not a Material Adverse Change, that are imposed on or
suffered by Purchaser because any representations made by Seller in Section 10
of this Agreement are false or inaccurate, which damages, losses, costs or
expenses exceed, in the aggregate, $500,000 (the "MATERIAL LOSS THRESHOLD").
Purchaser agrees that no damage, loss, cost or expense imposed on or suffered
by Purchaser shall be deemed a "Material Loss" if such damage, loss, cost or
expense imposed on or suffered by Purchaser relates to any of the following:
(i) a Material Adverse Change, (ii) any matter of which Purchaser has
Knowledge as of the date of this Agreement, (iii) the physical condition of
the Properties and/or required capital improvements (provided, however, that
this subclause (iii) shall not serve to limit the scope of Sections 8 and 9 of
this Agreement or Purchaser's rights thereunder nor shall it serve to limit
Seller's obligations under Sections 10.10 and 10.25 of this Agreement), and
(iv) the existence of any hazardous substances at the Properties and any
violation of Environmental Laws with respect to any of the Properties.
"MATERIAL LOSS THRESHOLD" shall have the meaning set forth in the
definition of Material Loss.
"MATERIAL PROPERTY LITIGATIONS" shall mean litigations between Seller and
any third parties which could cause a lien to be filed against a Property or
between Seller and any Tenant, in either case which: (i) are commenced, or
come to the attention of Purchaser if not listed on Schedule 13 of this
Agreement, subsequent to the date of this Agreement and (ii) make claims for
damages, other than punitive damages, in excess of $500,000 (the "MATERIAL
LITIGATION THRESHOLD").
"MATERIAL TENANT DEFAULT" shall have the meaning set forth in the
definition of Material Adverse Change.
"MAXIMUM REIMBURSEMENT OBLIGATION" shall mean $4,000,000.
"METROPOLITAN" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"MINOR ARIZONA TENANTS" shall have the meaning set forth in Section
11.01(f)(i) hereof.
"NEWLY DELINQUENT TENANTS" shall have the meaning set forth in Section
7.01(a) hereof.
"NON-CASH SECURITY DEPOSITS" shall have the meaning set forth in Section
11.01(u) hereof.
"ONGOING CAPITAL IMPROVEMENTS" shall have the meaning set forth in
Section 10.25 hereof.
"PERMITS AND LICENSES" shall have the meaning set forth in Section 1.01
hereof.
"PERMITTED ENCUMBRANCES" shall mean, with respect to each Property those
restrictions, covenants, agreements, easements and other matters and things
affecting title as reflected on Schedule 4 annexed hereto and made a part
hereof.
"PERSON" shall mean any individual, partnership, limited liability
company, corporation, trust, governmental entity or any other type of entity.
"PERSONAL PROPERTY" shall have the meaning set forth in Section 1.01
hereof.
"PROPERTY" shall have the meaning set forth in Recital E hereof.
"PROPERTIES" shall have the meaning set forth in Section 1.01 hereof.
"PROPERTY FILES" shall have the meaning set forth in Section 4.01 hereof.
"PROPERTY MANAGEMENT AGREEMENTS" shall mean the Florida Management
Agreement and the Arizona Management Agreement.
"PROPERTY MANAGERS" shall mean the Arizona Property Manager and the
Florida Property Manager collectively.
"PURCHASER'S LOSS NOTICE" shall have the meaning set forth in Section
10.20 hereof.
"PURCHASER'S WAIVER NOTICE" shall have the meaning set forth in Section
4.01 hereof.
"REAL ESTATE TAXES" shall mean real estate taxes and any general or
special assessments imposed upon the Real Property, including but not limited
to any general or special assessments of any governmental or municipal
authority or tax district, including, without limitation, any assessments
levied for public benefits to the Real Property.
"RENT ROLL" shall mean the rent roll attached to this Agreement as
Schedule 10.
"RENTS" shall mean, collectively, all minimum rent, percentage rents and
additional rent (including all escalations and tax and expense pass-throughs)
payable by the Tenants under the Leases.
"SECURITY DEPOSITS" shall have the meaning set forth in Section 1.01
hereof.
"SELLER'S ESTOPPELS" shall have the meaning set forth in Section 11.01(f)
hereof.
"SERVICE CONTRACTS" shall have the meaning set forth in Section 1.01
hereof.
"TAX BILLS" shall mean the two most recent real estate tax bills with
respect to the Property, copies of which were previously delivered to
Purchaser.
"TENANTS" shall mean all of the tenants, licensees, or other occupants of
the Improvements.
"TENANT ESTOPPELS" shall mean the Arizona Tenant Estoppels and the
Florida Estoppels collectively.
"TITLE INSURER" shall mean Commonwealth Land Title Insurance Company or
any other title insurance company acceptable to Purchaser and licensed in
Florida and Arizona.
"TYPE A DELINQUENT TENANTS" shall mean those Tenants designated as "Type
A" on Schedule 5, attached hereto.
TRANSFER OF PROPERTY; PURCHASE PRICE
Section 3.01. The Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase from the Seller, subject to and in accordance with the
terms, provisions, covenants and conditions set forth in this Agreement, the
Properties for a purchase price of SEVENTY-FIVE MILLION FIVE HUNDRED THOUSAND
($75,500,000.00) DOLLARS (the "PURCHASE PRICE").
Section 3.02. Upon execution and delivery of this Agreement, Purchaser
has deposited the sum of THREE MILLION ($3,000,000.00) DOLLARS with Escrow
Agent (such amount, together with any interest accrued thereon being
hereinafter referred to as the "DEPOSIT") to be held by Escrow Agent in
accordance with Section 26 of this Agreement.
Section 3.03. On the Closing Date, Purchaser shall deliver to Escrow
Agent the balance of the Purchase Price (i.e. the Purchase Price less the
Deposit) by wire transfer.
SECTION 4: DUE DILIGENCE; "AS IS" SALE
Section 4.01. Seller has made available to Purchaser the most current
surveys of the Properties, the most recent title insurance policies or
commitments for the Properties and the most recent environmental reports
relating to the Properties and such other documents, correspondence and
memoranda as may relate to the Properties to the extent that such information
is in Seller's possession or control (such materials being hereinafter
collectively referred to as the "PROPERTY FILES"). Except as expressly herein
set forth to the contrary, Purchaser has examined the Properties and reviewed
the Property Files and agrees to accept the Properties "AS IS".
Section 4.02. During the Contract Period, Purchaser and its authorized
agents, employees and other representatives, upon reasonable prior notice to
the Seller, shall have reasonable access to the Properties for the purpose of
inspecting the same and the Seller shall have the right to and shall make a
representative available to be present during such inspections. In connection
therewith, Purchaser may cause one or more surveyors, attorneys, engineer,
auditors, architects and other experts of its choice and at Purchaser's
expense to (i) inspect the Properties and any documents related to the
Properties, to the extent in Seller's possession or control, including,
without limitation, all title and survey information, as-built plans and
specifications, soil and environmental reports, engineering inspection reports
with respect to all mechanical systems, the roof, etc., the site plan, zoning
approvals, building permits, Leases, Service Contracts, books, all prior
tenant estoppels (including all notices relating thereto and thereunder),
financial and accounting records and any other non-proprietary,
non-confidential information which may reasonably be requested by Purchaser,
and (ii) appraise and otherwise do that which, in the opinion of Purchaser, is
necessary to determine the condition and value of the Properties for the uses
intended by Purchaser. Seller shall use reasonable efforts to arrange the
availability to Purchaser during the Contract Period of all Leases, operating
statements, Service Contracts and the most recent tax and utility bills
relating to the Properties, to the extent that such information is available
in the Data Room or in Seller's possession or control. Purchaser agrees that
it shall not contact any Tenant or occupant of the Properties prior to the
Closing without Seller's approval, which approval may be granted or withheld
in Seller's reasonable discretion, provided that Seller may have a
representative present at any contact between Purchaser and any Tenant or
occupant of the Properties. All information obtained, received and/or reviewed
by Purchaser during the Contract Period shall be kept strictly confidential in
accordance with Section 27 of this Agreement except as may be required in
order to comply with applicable law, subpoena, SEC disclosure requirements and
judicial orders and except to the extent that any information obtained is
public knowledge (provided, however, that Purchaser shall not confirm any
inquiries of third-parties based on such public knowledge). Purchaser shall
not interfere in any material respect with the use or operation of the
Properties during such inspections. Purchaser shall indemnify, defend and hold
harmless the Seller from and against any and all loss, costs, liability,
damage and expenses, including, but not limited to, penalties, fines, court
costs, disbursements and reasonable out-of-pocket attorney's fees incurred
directly in connection with or arising directly from injuries to persons or
damage to Properties directly caused by Purchaser, its agents, employees,
representatives or independent contractors with respect to such right of
access and Purchaser shall deliver to Seller evidence of contractual liability
insurance maintained by Purchaser, its agents, employees, representatives or
independent contractors, as the case may be, insuring Purchaser's indemnity
under this Section, at such time as Purchaser requests access to the
Properties in accordance with this Section 4.02. The provisions of this
Section shall be binding upon Purchaser regardless of whether or not the
transactions contemplated hereby are consummated and shall survive for a
one-year period following the termination of this Agreement or the Closing.
SECTION 5: MATTERS TO WHICH THE SALE IS SUBJECT
Section 5.01. The Seller shall assign and convey or cause to be assigned
and conveyed to Purchaser good, valid, marketable, insurable fee title to the
Properties (subject to Section 11.01(o) hereof) free and clear of any and all
mortgages, liens, leases, encumbrances and easements, and other title matters
except:
(a) All taxes, Real Estate Taxes, water meter and water charges and sewer
rents, fixed or not fixed, relating to the period after the Closing Date;
specifically excluded from this provision are all such taxes, charges and
sewer rents which accrued prior to the Closing Date, but are payable after the
Closing Date;
(b) All zoning laws and building ordinances, resolutions, regulations and
orders (other than violation orders) of all boards, bureaus, commissions and
bodies of any municipal, county, state or federal government; and
(c) The Permitted Encumbrances.
SECTION 6: OUTSTANDING INTEREST OR UNMARKETABLE TITLE
Section 6.01. As a condition to the Closing, and subject to Section
11.01(o) hereof, the Title Insurer must issue at the Closing fee title
policies to Purchaser insuring Purchaser's title to the Properties subject
only to the Permitted Encumbrances. As a condition to the Closing, the Title
Insurer must issue at the Closing standard ALTA fee title policies with
mechanic's lien endorsements, the endorsements annexed hereto as Schedule 14
and, subject to Section 11.01(o), hereof, all other standard endorsements to
Purchaser insuring Purchaser's title to the Properties subject only to the
Permitted Encumbrances.
Section 6.02. If at the Closing it should appear that any of the
Properties are affected by any outstanding interest or question of title which
Purchaser is not obliged to take the Properties subject to in accordance with
the terms of this Agreement and, if such interest or question of title may,
according to Purchaser's and Seller's reasonable expectations, be removed as
an objection to title within one (1) month from the scheduled Closing Date,
the Seller and/or Purchaser may adjourn the Closing Date for such purpose for
a combined period not extending beyond the first day of the calendar month
next succeeding the month of the scheduled Closing Date during which xxxx
Xxxxxx shall use reasonable efforts to promptly and continually seek to
remedy, cure and remove any such objection to title at Seller's sole cost and
expense. If any Property shall be affected by any lien or encumbrance which is
not a Permitted Encumbrance and which may be discharged by the payment of an
ascertainable amount of money not to exceed $750,000 (it being understood that
Seller shall not be required to remove any lien or encumbrance not caused by,
at the direction of, as a result of the actions or omissions of or with the
consent of Seller, the removal of which would require expenditures in excess
of $750,000), Seller shall discharge all such liens or encumbrances and Seller
shall be entitled to a reasonable adjournment not to exceed two (2) weeks to
accomplish the discharge thereof; further, subject to the reasonable approval
of Purchaser and the Title Insurer, the Seller shall have the obligation, to
escrow with the Escrow Agent for such lien or encumbrance if such lien or
encumbrance is not readily dischargeable. Notwithstanding the foregoing,
Seller shall be obligated to discharge or remove of record all liens or
encumbrances recorded against any Property which are not Permitted
Encumbrances, which liens or encumbrances were caused by, at the direction of,
as a result of the actions or omissions of or with the consent of Seller,
regardless of the amount of such liens or encumbrances and Purchaser, in its
sole discretion, may adjourn the Closing for a period not to exceed two (2)
months if necessary for Seller to so remove or discharge such liens or
encumbrances. Subject to the immediately preceding sentence, if after any
applicable adjournment the Seller shall be unable to convey Property in
accordance with the provisions of this Agreement or Seller shall be unwilling
to remove any lien or encumbrance which (i) is not a Permitted Encumbrance,
(ii) was not caused by, at the direction of, as a result of the actions or
omissions of or with the consent of Seller and (iii) which may be discharged
only by the payment of money in excess of $750,000, Purchaser shall have the
right to waive the defect in title and accept such title as the Seller can
convey without a reduction in the Purchase Price or terminate this Agreement
by written notice to the Seller whereupon the Deposit and all interest thereon
shall be immediately returned to Purchaser and the parties shall have no
further rights or obligations hereunder except that Seller shall reimburse
Purchaser for up to $25,000 of its due diligence costs in the event that this
Agreement is terminated because Seller is unwilling to remove any lien or
encumbrance which is not a Permitted Encumbrance, was not caused by, at the
direction of, as a result of the actions or omissions of or with the consent
of Seller and which may be discharged only by the payment of money in excess
of $750,000.
SECTION 7: ADJUSTMENTS
Section 7.01. All items of income and expense relating to the Properties,
including the following, shall be apportioned between the parties as of
midnight of the day immediately preceding the Closing Date so that the Seller
shall be charged with and have the benefit of such items accrued through the
day immediately preceding the Closing Date, and Purchaser shall be charged
with and have the benefit of such items accrued from and after the Closing
Date:
(a) Rents (including base rent, percentage rents and additional rent).
Attached hereto as Schedule 5 is a list, prepared on a Tenant by Tenant basis,
of all delinquent Rents as of June 30, 1999 of which Seller has Actual
Knowledge. Except as set forth below, any payments received by Purchaser after
the Closing on account of delinquent Rents or Rents collected in arrears
attributable to the period prior to the Closing shall be adjusted post-Closing
in accordance with the following order of priority: (i) first, pro-rata
between Purchaser and Seller, to the calendar month in which the Closing
occurs; (ii) then, for the benefit of Purchaser, to the extent necessary for
Purchaser to remain current with respect to Rents attributable to the period
subsequent to the Closing, to any calendar month or months following the
calendar month in which the Closing occurs; and (iii) then, for the benefit of
Seller, to any other unpaid Rents attributable to the period prior to the
calendar month in which the Closing occurs. Notwithstanding the foregoing, to
the extent that any Tenant (x) which does not appear on the delinquency list
attached hereto as Schedule 5 or is designated as a "Type B" Tenant on
Schedule 5 and (y) which has deposited with Seller a Security Deposit in
connection with its Lease as set forth on Schedule 9 annexed hereto, fails,
beyond the expiration of any applicable grace period, to pay the Rent due
under its Lease for both of the last two calendar months prior to Closing
(such Tenant being herein referred to as a "NEWLY DELINQUENT TENANT"), then
any payments received by Purchaser after the Closing from such Newly
Delinquent Tenant on account of delinquent Rents attributable to the period
prior to the Closing shall be adjusted post-Closing in accordance with the
following order of priority: (1) first, pro-rata between Purchaser and Seller,
to the calendar month in which the Closing occurs; (2) then, for the benefit
of Seller, to the one (1) calendar month preceding the month in which the
Closing occurs; (3) then, for the benefit of Purchaser, to the extent
necessary for Purchaser to remain current with respect to Rents attributable
to the period subsequent to the Closing, to any calendar month or months
following the calendar month in which the Closing occurs; and (4) then, for
the benefit of Seller, to any other unpaid Rents attributable to the period
prior to the calendar month which precedes the calendar month in which the
Closing occurs. Purchaser shall use commercially reasonable efforts (which
shall not include litigation), at Seller's sole cost and expense, to recover
all delinquent Rents to which Seller is entitled pursuant to this Section
7.01(a). This provision shall survive the Closing for a period of eighteen
(18) months. Seller shall not commence any litigation against Tenants, which
prohibition shall survive the Closing, nor shall Seller otherwise seek
recovery from any Tenants after the Closing Date, provided, however, that this
sentence shall not limit the right of Seller to pursue or recover $8,762.42
plus interest from Career Development in connection with amounts owed Seller
for work performed by Seller in Career Development's premises. Additionally,
Seller shall not during the Contract Period apply the Security Deposit of any
Tenant against such Tenant's unperformed obligations under its Lease.
(b) Real Estate Taxes, sewer and vault rents, charges and license fees,
water meter and frontage charges and other utilities charges. If the Closing
Date shall occur before the Real Estate tax rate is fixed, the apportionment
of Real Estate Taxes at the Closing shall be upon the basis of the old Real
Estate Tax rate for the preceding period applied to the latest assessed
valuation. Promptly after the new Real Estate Tax rate is fixed for the
calendar year in which the Closing takes place, the apportionment of Real
Estate Taxes shall be recomputed. Any discrepancy resulting from such
recomputation shall be promptly paid to the other party, which obligation
shall survive the Closing for a period of eighteen (18) months. Seller shall
receive full credit for any early payment discount obtained with respect to
the Florida Properties.
(c) charges payable under Service Contracts, Brokerage Agreements and the
Property Management Agreements on the basis of the period covered by such
payments and any other ordinarily adjusted expenses including fuel and utility
charges.
(d) Except as set forth to the contrary, the provisions of this ss.7.01
shall survive the closing for a period of six months.
Section 7.02. Seller shall be responsible for any overcharges of common
area maintenance at the Properties attributable to the period preceding the
Closing Date. If, after the Closing, a Tenant shall make a claim against
Purchaser for the recovery of any common area maintenance overcharges
attributable to the period proceeding the Closing Date, Seller shall reimburse
Purchaser for its costs and expenses in defending or contesting same and
Seller shall indemnify Purchaser for the amount of any payment, judgment or
settlement resulting from such claim; provided, however, that Purchaser shall
not enter into any settlement of any such claim without Seller's prior written
consent, which shall not be unreasonably withheld or delayed. Seller's
obligations under this Section 7.02 shall survive the Closing for a period of
one-hundred and eighty (180) days.
SECTION 8: CASUALTY
Section 8.01. (a) If a "material part" (as defined below) of any of the
Improvements shall be damaged or destroyed by fire or other casualty, then, in
any such event, Purchaser may, at its option, either (i) cancel this Agreement
by written notice delivered to Seller no later than the earlier of the Closing
Date or the twentieth (20th) day after the date of such fire or other
casualty, whereupon subject to Section 26, the Deposit shall be returned to
Purchaser and the parties hereto shall be released of all obligations and
liabilities of whatsoever nature in connection with this Agreement, or (ii)
proceed to close the transactions contemplated by this Agreement, in which
event all of the provisions of subsection 8.01(b)(i) and subsection
8.01(b)(ii) below shall apply.
(b) If a part other than a material part of an Improvement shall be
destroyed or damaged by fire or other casualty Purchaser shall nevertheless
close title to all of the Properties pursuant to all the terms and conditions
of this Agreement, subject to the following: (i) Seller shall not (x) adjust
and settle any insurance claims, or (y) enter into any construction or other
contract for the repair or restoration of the damaged Property without
Purchaser's prior written consent, which consent shall not be unreasonably
withheld or delayed (it being agreed that Purchaser shall be deemed to have
consented to any insurance adjustment or settlement or any contract for repair
or restoration if Purchaser has not objected to the same in writing on or
before the fifth (5th) business day after the date on which same was delivered
to Purchaser by written notice for its consent), and (ii) at the Closing, the
Seller shall (1) pay over to Purchaser the amount of any insurance proceeds,
to the extent collected by Seller in connection with such casualty, less the
amount of the reasonable expenses incurred by Seller directly in connection
with collecting such proceeds and making any repairs to the Property
occasioned by such casualty pursuant to any contract, plus the amount of any
deductible under Seller's insurance policy, (2) assign to Purchaser all of
Seller's right, title and interest in and to any insurance proceeds and the
right to settle and adjust same that are uncollected at the time of the
Closing and that may be paid in respect of such casualty, and (3) pay to
Purchaser the amount of any policy deductibles pursuant to the insurance
policies covering such fire or other casualty and maintained by Seller (as
opposed to insurance or self-insurance maintained by Tenants of the
Properties). The Seller shall reasonably cooperate with Purchaser in the
collection of such proceeds, which obligation shall survive the Closing.
(c) For the purpose of this Section, the phrase a "MATERIAL PART" of an
Improvement shall mean that the cost of repair or restoration is estimated by
a reputable contractor selected by the Seller and reasonably satisfactory to
Purchaser, to be in excess of five percent (5%) of the Purchase Price.
SECTION 9: CONDEMNATION PENDING CLOSING
Section 9.01. If, condemnation or eminent domain proceedings shall be
commenced by any competent public authority against the Real Property or any
part thereof, the Seller shall promptly give Purchaser written notice thereof.
After written notice of the commencement of any such proceedings from the
Seller and in the event that the taking, of such property is Material (as
hereinafter defined), Purchaser shall have the right (i) to accept title to
the Property subject to the proceedings, and pay to the Seller the full
Purchase Price, whereupon any award payable to the Seller shall be paid to
Purchaser and the Seller shall deliver to Purchaser at the Closing all
assignments and other documents reasonably requested by Purchaser to vest such
award in Purchaser, or (ii) to rescind this Agreement upon written notice
delivered to Seller no later than the day that is twenty (20) days after the
date on which Seller delivered notice of such proceeding to Purchaser and upon
the return of the Deposit to Purchaser, with interest thereon, this Agreement
shall be null and void and neither party will have any further obligations
hereunder, except for any rights or obligations which are expressly stated to
survive termination of this Agreement. A taking shall be deemed to be
"MATERIAL" if said taking would either (i) materially interfere with the use
or operation of the Property for the contemplated use thereof, or (ii) reduce
the estimated value of the Property (as reasonably determined by an
independent M.A.I. appraiser chosen by Purchaser and reasonably satisfactory
to the Seller) by an amount equal to five percent (5%) or more of the Purchase
Price or (iii) create a right of any Tenant or Tenants leasing in the
aggregate over five percent (5%) or more of the leased square feet of the
Properties to cancel their Lease(s) as a result of such condemnation.
SECTION 10: THE SELLERS' COVENANTS WARRANTIES AND REPRESENTATIONS
To induce Purchaser to enter into this Agreement and to accept the
Properties from the Seller, each Seller makes the following representations
and warranties (but only with respect to the Property of which such Seller is
the owner), all of which the Seller represents are true in all material
respects as of the date hereof and shall be true in all material respects as
of the Closing Date and shall be deemed remade as of that date:
Section 10.01. (a) Each entity comprising Seller is and at the Closing
shall be duly organized and validly existing and in good standing under the
laws of the State in which it is organized with full power and authority to
sell its Property and to take all actions required by this Agreement. Each
entity comprising Seller shall at the Closing be authorized to do business in
the State in which its Property is located.
(b) The execution, delivery and performance of this Agreement and
consummation of the transaction hereby contemplated in accordance with the
terms of this Agreement will not violate any partnership agreement or any
material contract, agreement, commitment, order, judgment or decree to which
Seller is a party or by which it is bound, and Seller has obtained (or will,
by the Closing, have obtained) all consents necessary (whether from a
governmental authority or other third party) in order for it to consummate the
transactions contemplated hereby.
(c) The party or parties executing this Agreement on behalf of Seller
have been duly authorized and are empowered to bind Seller to this Agreement
and to take all actions required by this Agreement
(d) Upon execution, this Agreement shall be the binding obligation of
Seller, enforceable against Seller in accordance with the terms hereof.
Section 10.02. (a) Prior to the date of this Agreement, Seller has
delivered to Purchaser copies of environmental studies of the Real Property
prepared by Law Engineering. Seller represents that it has not retained any
environmental engineer other than Law Engineering to perform environmental
studies relating to the Real Property.
(b) To Seller's knowledge there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation or
proceeding, pending relating to Seller or any portion of any of the Properties
or, to the Actual Knowledge of each Seller, threatened against any Seller or
any portion of any of the Properties relating in any way to the Environmental
Laws or any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder.
Section 10.03. Except as set forth on Schedule 13 attached hereto, to
Seller's Actual Knowledge there are no existing or pending litigation, claims,
condemnations or sales in lieu thereof with respect to any aspect of the
Properties nor, to the Actual Knowledge of Seller, have any actions, suits,
condemnations, proceedings or claims been threatened or asserted. No
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending or
threatened against the Seller. In the event any proceeding of the character
described in this Section is initiated or threatened against the Seller prior
to the Closing Date, the Seller shall promptly advise Purchaser thereof in
writing.
Section 10.04. Seller shall make available to Purchaser copies of all
Leases, in each case to the extent in Seller's possession or control, at all
times until Closing. Seller has no Actual Knowledge of any other Leases.
Section 10.05. No Seller is a "foreign person" as defined in Section 1445
of the Internal Revenue Code of 1986, as amended, and the income tax
regulations thereunder.
Section 10.06. There is no action, suit or proceeding pending or, to
Seller's Actual Knowledge, threatened against the Seller and or relating to or
arising out of the ownership, management or operation of the Properties, in
any court or before any mediator, arbitrator, federal, state or municipal
department, commission, board, bureau or other governmental instrumentality.
Section 10.07. Attached hereto as Schedule 2 is a list of all Brokerage
Agreements, of which Seller has Actual Knowledge, to which Seller is a party
and/or which affect the Properties.
Section 10.08. Attached hereto as Schedule 6 is a list of all Service
Contracts, of which Seller has Actual Knowledge, to which Seller is a party
and/or which affect the Properties.
Section 10.09. To the Actual Knowledge of Seller, there are no Service
Contracts, Brokerage Agreements, property or asset management agreements or
any other agreements that relate to services provided to the Properties that
are not terminable on notice of thirty (30) days or less without premium or
fee and, subsequent to May 24, 1999, no Service Contracts Brokerage
Agreements, Property Management Agreements or any other agreement affecting
the Properties or the Tenants have been amended or modified nor have any new
Service Contracts, Brokerage Agreements, property or asset management
agreements, or any other agreements been entered into. Seller agrees to
terminate all or any of the Brokerage Agreements, the Property Management
Agreements or other asset management agreements and any Service Contracts,
upon the written request of Purchaser, effective as of the Closing Date (if
possible given the date of Purchaser's request).
Section 10.10. Seller shall operate and maintain the Properties in a
commercially reasonable manner.
Section 10.11. During the Contract Period, Seller shall notify Purchaser
of all Material Tenant Defaults of which Seller has Actual Knowledge.
Section 10.12. Seller shall not market all or any of the Properties or
enter into any contract or agreement to sell all or any portion of its
interest in and to all or any portion of the Properties.
Section 10.13. Seller has no employees at the Properties.
Section 10.14. During the Contract Period Seller shall maintain such
casualty and general liability insurance with respect to the Properties as is
currently in effect. Set forth on Schedule 7, attached hereto are the
insurance limits currently maintained by Seller and any applicable
deductibles. Seller shall have the right to change insurance carriers during
the Contract Period without Purchaser's consent provided that the coverage of
any replacement policy shall not be less than the coverage set forth on
Schedule 7.
Section 10.15. Seller shall not enter into any Leases or any amendments,
extensions, expansions or terminations of any Leases without the prior written
consent of Purchaser, except as described in the proposals attached hereto as
Schedule 15.
Section 10.16. On or after the Closing Date Seller shall seek with
diligence and good faith the execution by the United State of America of (i) a
Novation Agreement, (ii) an Assignment of Government Contract and (iii) a
Notice of Assignment of Government Contract, each in the forms attached hereto
as Exhibits G, H and I respectively. Seller's obligations under this Section
10.16 shall survive the Closing.
Section 10.17. Attached hereto as Schedule 8 is a list of all Leases of
which Seller has Actual Knowledge.
Section 10.18. Attached hereto as Schedule 9 is a list of all Security
Deposits in Seller's possession.
Section 10.19. To Seller's Actual Knowledge the Rent Roll is true and
accurate as of June 30, 1999; provided, however, that Seller makes no
representation as to the accuracy of the size of the premises demised by the
Leases as stated on the Rent Roll; Seller shall promptly notify Purchaser (but
in any event no later than five (5) business days prior to the Closing) to the
extent that Seller becomes aware of any change to or correction of the
information set in Schedule 10. Notwithstanding the foregoing, Seller makes no
representation as to the respective areas of the premises as set forth in the
Rent Roll.
Section 10.20. To Seller's Actual Knowledge attached hereto as Schedule
11 is a true and accurate list as of June 30, 1999 of all unperformed tenant
improvements which Seller is obligated to perform under the Leases or
completed tenant improvements not yet paid for; Seller shall promptly notify
Purchaser (but in any event no later than five (5) business days prior to the
Closing) to the extent that Seller becomes aware of any change to or
correction of the information set in Schedule 11. On or prior to Closing,
Seller shall pay all unpaid amounts and complete all unperformed work or
Purchaser shall receive a credit in such amounts at Closing to be applied
against the Purchase Price. Without limiting the generality of the previous
sentence, (i) Seller shall be obligated to pay all amounts owed on account of
the work performed in the Xxxxxxx Xxxxxx, Inc. space at 0000 Xxxx Xxxxxxxx,
which obligation shall be paid at Closing or Purchaser shall receive a credit
in the unpaid amount at Closing, (ii) Purchaser shall receive a credit at
Closing in an amount equal to the positive difference, if any, between the
contract price stated in the contract for tenant improvements to be performed
for Dr. Xxxxx Xxxxxx in Century Plaza, a copy of which contract is attached
hereto as Schedule 16, and the aggregate amount of any payments made prior to
Closing on account thereof provided that such contractor agrees at Closing to
complete such work for the unpaid contract amount, (iii) Purchaser shall
receive a credit at Closing in an amount equal to the positive difference, if
any, between the contract price stated in the contract for tenant improvements
to performed for Xxxxxxxx & Xxxxxxx in Century Plaza, a copy of which contract
is attached hereto as Schedule 17, and the aggregate amount of any payments
made prior to Closing on account thereof provided that such contractor agrees
at Closing to complete such work for the unpaid contract amount and (iv)
Seller shall be obligated to pay all amounts owed on account of the painting
and carpeting in the Arizona Veterans space in Century Plaza, which obligation
shall be paid at Closing or Purchaser shall receive a credit in the unpaid
amount at Closing.
Section 10.21. To Seller's Actual Knowledge, attached hereto as Schedule
12 is a true and accurate list of all of the unpaid tenant improvement
allowances which Seller is obligated to pay under all of the Leases.
Section 10.22. All representations, warranties and covenants of the
Seller contained in this Agreement or in any affidavit or other document
delivered in connection herewith shall be true and correct in all material
respects at Closing and shall survive the Closing for a period of nine (9)
months (except as otherwise expressly provided in this Agreement), it being
the intention of the parties hereto that no legal action will accrue hereunder
subsequent to such nine (9) month period on account of the breach of any
representations, warranties and covenants of the Seller. Section 10.23. Seller
shall cooperate with Purchaser during the Contract Period, at Purchaser's
expense, to arrange the transfer of utilities with respect to the Properties.
Section 10.24. (a) Seller has delivered to Purchaser copies of all Tenant
Estoppels it has received subsequent to June 1, 1999 and Seller shall deliver
to Purchaser copies of all Tenant Estoppels it receives during the Contract
Period. (b) Seller shall diligently seek to remove of record the Ground Lease.
Section 10.25. Seller is currently (i) installing a water cooling tower
at Century Plaza pursuant to certain agreement, dated April 1, 1999, between
Tower Realty Operating Partnership, L.P. and Tri-City Mechanical, (ii)
performing concrete repairs to the parking garage at 0000 Xxxx Xxxxxxxx
pursuant to an agreement, dated June 24, 1999, between East Broadway 5151
Limited Partnership and Xxxxxx Xxxxxx Construction Company and (iii)
performing ceramic tile repairs at 0000 Xxxx Xxxxxxxx pursuant to a bid, dated
April 30, 1999, prepared by Xxxxx Tile (the foregoing hereinafter collectively
referred to as "ONGOING CAPITAL IMPROVEMENTS"). Seller shall complete the
Ongoing Capital Improvements prior to the Closing Date, in a good and
workmanlike manner and in compliance with all applicable codes, ordinances and
legal requirements of the Cities of Phoenix and Tuscon, Arizona, as
applicable. To the extent that the Ongoing Capital Improvements have not been
completed on the Closing Date, Seller shall deliver to Purchaser the
contractor's agreement to perform and complete the balance of such Ongoing
Capital Improvements for the unpaid contract amount and the difference between
the total amount theretofore paid by Seller on account of the incomplete
Ongoing Capital Improvements and the contract price of same shall credited to
Purchaser at Closing.
Section 10.26. If (i) any of the representations, covenants and
warranties set forth above prove to have been false or inaccurate when made
and same is asserted in a writing (a "PURCHASER'S LOSS NOTICE") delivered by
Purchaser to the Seller during the nine (9) month survival period, and (ii)
Purchaser incurs a Material Loss as a result of such inaccuracy or falsity
(the occurrence of a Material Loss to Purchaser being hereinafter referred to
as a "LOSS EVENT"), then Seller shall promptly reimburse Purchaser for such
Material Loss up to the amount of the Maximum Reimbursement Obligation (less
the amount of any reimbursement previously granted Purchaser hereunder and any
credit to the Purchase Price granted Purchaser at Closing pursuant to Section
16.01(a)(i) hereof). Seller's obligation under this paragraph shall survive
the Closing or earlier termination of this Agreement provided Purchaser has
delivered a Purchaser Loss Notice prior to the expiration of such nine (9)
months (it being the intention of the parties hereto that Purchaser shall have
no right to deliver a Purchaser's Loss Notice subsequent to such nine (9)
month period), provided, further, that Purchaser shall have no right to
commence any legal action on account of a Material Loss for which a
Purchaser's Loss Notice was timely delivered subsequent to the date that is
six (6) months after the expiration of the nine (9) month survival period.
Notwithstanding the foregoing, Purchaser may make a claim for an Anticipated
Material Loss for which a Purchaser Loss Notice was timely delivered (i.e.
prior to the end of the nine (9) month survival period; Purchaser agrees that
a Purchaser's Loss Notice with respect to an Anticipated Material Loss, to be
effective, must state with reasonable specificity the nature of the damage,
loss, cost or expense that Purchaser deems likely to become actual) and which
occurs (that is becomes an actual Material Loss) subsequent to the expiration
of such nine (9) month survival period and not later than the date (the
"ANTICIPATED MATERIAL LOSS DEADLINE") that is twelve (12) months after the
Closing Date. Purchaser shall have no right to commence any legal action on
account of an Anticipated Material Loss for which a Purchaser's Loss Notice
was timely delivered (and which becomes an actual Material Loss prior to the
Anticipated Material Loss Deadline) subsequent to the date that is six (6)
months after the Anticipated Material Loss Deadline. Purchaser shall have no
right to claim an additional loss post-Closing in connection with any Material
Loss for which Purchaser received a credit pre-Closing in accordance with
Section 16.01(a)(i) hereof whether or not the actual loss incurred in
connection with such Material Loss is equal to or greater than the credit
granted to Purchaser at Closing . It is specifically acknowledged that if
Purchaser has any Knowledge on or prior to the date hereof that any
representation made by Seller in this Agreement is false or inaccurate, Seller
shall have no liability with respect to such false or inaccurate
representation. Metropolitan hereby agrees to guaranty the obligations of each
Seller under this Section 10.26 and under Section 22.01 hereof. Metropolitan
covenants to maintain a minimum net worth (after deducting good will) of
$5,000,000 during the Survival Period (as hereinafter defined). Seller's SEC
filings shall be the sole determining factor as to whether Seller shall have
complied with the requirements of the immediately preceding sentence. The term
"SURVIVAL PERIOD" shall mean the period of time up to and including the date
that Seller (including Metropolitan) shall no longer have any actual or
potential liability under this Section 10.26 or Section 22.01 hereof.
SECTION 11: THE SELLER'S INSTRUMENTS AT CLOSING
Section 11.01. Each Seller shall execute, or where applicable, cause the
following to be delivered to Purchaser on the Closing Date:
(a) a deed in the form of Exhibit B-1 hereto with respect to each Arizona
Property and a special warranty deed in the form of Exhibit B-2 hereto with
respect to each Florida Property;
(b) assignments or other instruments in recordable form transferring and
assigning to Purchaser each Seller's interest in the Property (other than the
Real Estate) in the form of Exhibit C hereto;
(c) a certificate from the Seller stating that all representations and
warranties made by the Seller in this Agreement are true in all material
respects as of the Closing Date as if made on such date;
(d) duly executed real estate transfer tax forms, if any, for each
Florida Property. The Seller shall at Closing pay all real estate transfer and
conveyance and sales taxes payable to the appropriate state and/or local
governmental and/or municipal authorities,
(e) a duly executed affidavit as may be required pursuant to Section 1445
of the Internal Revenue Code in the form of Exhibit D hereto;
(f) (i) tenant estoppels (the "ARIZONA TENANT ESTOPPELS") from the
Tenants of the Arizona Properties, dated subsequent to June 1, 1999,
substantially in the form of the Arizona Contract Estoppel attached hereto as
Exhibit E, from each of the Major Arizona Tenants and from Tenants of the
Arizona Properties other than the Major Arizona Tenants (the "MINOR ARIZONA
TENANTS") occupying in the aggregate fifty percent (50%) or more of the
balance of the leased square footage of the Arizona Properties. Alternatively,
Seller may (x) cause the Tenants of the Arizona Properties to initial copies
of the estoppel certificates already delivered to Purchaser (copies of which
are attached as Exhibit E-1 hereto) which have been marked to conform to the
form of the Arizona Contract Estoppel or (y) deliver to Purchaser letters from
each of the Tenants in the Arizona Properties effecting the same changes as
would be addressed by the estoppel certificates referred to in subclause (x)
above. In the event that Seller is unable to obtain tenant estoppels from
Minor Arizona Tenants occupying in the aggregate 50% or more of the leased
square footage of the Arizona Properties occupied by all Minor Arizona
Tenants, Seller shall provide estoppel certificates ("SELLER'S ESTOPPELS")
which contain substantially the same information as would be contained in an
estoppel certificate given by a Tenant in connection with a sufficient number
of the Minor Arizona Tenants such that the tenant estoppels received from the
Minor Arizona Tenants and the Seller's Estoppels delivered with respect to the
Minor Arizona Tenants shall account for an aggregate of fifty percent (50%) of
the leased square footage of the portion of the Arizona Properties occupied by
Minor Arizona Tenants; provided that Seller shall not be required to deliver
any Seller's Estoppels which contain information that is not true. If Seller
is unable to deliver Seller's Estoppels in accordance with the foregoing
sentence, Purchaser shall have the right to terminate this Agreement and
receive the return of the Deposit.
(ii) Seller shall deliver to Purchaser at Closing the originals of the
estoppel certificates from the Florida Tenants, copies of which are attached
hereto as Exhibit F (collectively the "FLORIDA Estoppels"). Seller shall
deliver to Purchaser letters from those Tenants of the Florida Properties
specified on Exhibit F-1 which address the matters set forth on Exhibit F-1.
(iii) During the Contract Period Seller shall cooperate with Purchaser,
at Purchaser's expense, in requesting new estoppels from Tenants to the extent
required or requested by Purchaser's lender; provided, however, that a new
estoppel shall not be requested from any Tenant prior to such Tenant's
delivery of either a Tenant Estoppel, an initialed corrective estoppel or a
letter as contemplated by Sections 11.01(f)(i) and 11.01(f)(ii) above (unless
Purchaser waives the requirement that such Tenant deliver a corrected
estoppel).
(g) all third party warranties and guaranties with respect to the
Personal Property and the Real Property, if any, to the extent in Seller's
possession or control (it being understood that Seller makes no
representations or warranties with respect to the Personal Property);
(h) executed notices to Tenants with respect to the sale of the
Properties prepared by Seller and approved by Purchaser. If Purchaser has not
approved the form of Tenant notices on or before the second business day prior
to Closing, the Tenant notices shall be prepared and distributed after the
Closing Date, which obligation shall survive the Closing;
(i) a Section 1099 affidavit;
(j) all plans, specifications, permits, licenses and keys with respect to
the Properties, if any, in each case to the extent in Seller's possession or
control;
(k) all files relating to the Properties (excluding the general ledger),
including, without limitation, all Tenant files and Service Contract files, in
each case to the extent in Seller's possession or control;
(l) disks containing all computer records in Seller's possession or
control with respect to the Properties;
(m) all original Leases in Seller's possession or control, if any;
(n) to the extent required by the Title Insurer, original certificates of
good standing, foreign authorizations, secretary's certificates and
resolutions from each entity comprising Seller authorizing the sale of its
Property and the consummation of the transactions contemplated by this
Agreement applicable it its Property;
(o) (i) a gap indemnity and such documents and instruments as may be
necessary for the Title Insurer to provide a mechanic's lien endorsement and
(ii) such other documents, instruments, resolutions and other materials
reasonably requested by Purchaser as may be necessary to effect the transfer
of title hereunder or as may be requested by the Title Insurer which do not
result in or require representations, covenants and warranties more extensive
than those made by Seller in this Agreement;
(p) copies of all notices terminating Service Contracts, Management
Agreements and Brokerage Agreements, to the extent Purchaser requested such
terminations in accordance with Section 10.09 hereof;
(q) evidence reasonably satisfactory to Purchaser and the Title Insurer
of the termination of that certain Ground Lease, dated March 9, 1984 (the
"GROUND LEASE"), between Maitland Associates, Ltd. and Maitland Property
Investors, Ltd. and that same is removed of record;
(r) certificates from each of the brokers under the Brokerage Agreements
stating any amounts due under the Brokerage Agreements.
(s) with respect to the GSA Lease, Seller shall use commercially
reasonable efforts to obtain fully executed, as applicable, a Novation
Agreement, an Assignment of the GSA Lease and a Notice of Assignment in each
case in the form attached hereto as Exhibits G, H and I.
(t) a delinquency schedule dated no earlier than five days prior to the
Closing Date.
(u) with respect to any Security Deposits which are other than cash or
that are in the form of a letter of credit (collectively, the "NON-CASH
SECURITY DEPOSITS"), such instruments of transfer or assignment as shall be
necessary to transfer such Non-Cash Security Deposits to Purchaser as the new
beneficiary thereunder. Seller shall reasonably cooperate with Purchaser to
prevent the expiration of any Non-Cash Security Deposits prior to the transfer
of the same to Purchaser and to facilitate the recognition by the issuer of
such instrument of Purchaser as the beneficiary of any letter of credit or
other form of Non-Cash Security Deposits.
SECTION 12: PURCHASER'S REPRESENTATIONS AND WARRANTIES
Section 12.01. To induce the Seller to enter into this Agreement,
Purchaser makes the following representations and warranties, all of which
Purchaser represents are true in all material respects as of the date hereof
and shall be true in all material respects as of the Closing Date and shall be
deemed to be made as of that date.
(a) Purchaser is and at the Closing shall be a limited partnership duly
organized and validly existing and in good standing under the laws of the
State of Delaware with full power and authority to own and purchase the
Property and to take all actions required by this Agreement and each entity
designated by Purchaser to take title to a Property in accordance with Section
21 of this Agreement shall be at Closing a limited partnership or limited
liability company duly organized and validly existing and in good standing
under the laws of the State of its formation with full power and authority to
own and purchase such Property and to take all actions required by this
Agreement.
(b) The execution, delivery and performance of this Agreement and
consummation of the transaction hereby contemplated in accordance with the
terms of this Agreement will not violate the partnership agreement or any
material contract, agreement, commitment, order, judgment or decree to which
Purchaser is a party or by which it is bound, and Purchaser has obtained (or
will, by the Closing, have obtained) all consents necessary (whether from a
governmental authority or other third party) in order for it to consummate the
transactions contemplated hereby.
(c) The party or parties executing this Agreement on behalf of Purchaser
have been duly authorized and are empowered to bind Purchaser to this
Agreement and to take all actions required by this Agreement.
(d) Upon execution, this Agreement shall be the binding obligation of
Purchaser, enforceable against Purchaser in accordance with the terms hereof.
(e) No action, suit or proceeding is pending or, to Purchaser's knowledge,
threatened against Purchaser which would materially adversely affect
Purchaser's financial condition or its ability to fully perform its
obligations pursuant to this Agreement.
(f) The execution and delivery of this Agreement and the performance by
Purchaser of its obligations hereunder do not and will not conflict with or
violate any law, rule, judgment, regulation, order, writ, injunction or decree
of any court or governmental or quasi-governmental entity with jurisdiction
over Purchaser, including, without limitation, the United States of America,
the State of New York or any political subdivision of any of the foregoing, or
any decision or ruling of any arbitrator to which Purchaser is a party or by
which Purchaser is bound or affected and no consent of any governmental agency
is required.
All representations, warranties and covenants of Purchaser contained in
this Agreement or in any affidavit or other document delivered in connection
herewith shall be true and correct in all material respects at Closing and
shall survive the Closing for a period of six months, it being the intent of
the parties hereto that Seller may not commence any legal action subsequent to
such six (6) month period on account of the breach of any representations,
warranties and covenants of the Purchaser.
If (x) any of the representations and warranties set forth above prove to
have been false when made and such falsity is asserted in writing delivered by
the Seller to Purchaser during the applicable survival period, and (y) the
Seller incurs a Loss as a result of such falsity, then the Seller shall be
entitled to recover such Loss through all remedies available at law or in
equity. It is specifically acknowledged that, if the Closing occurs, Purchaser
shall have no liability with respect to misrepresentations which were actually
known by the Seller at Closing.
SECTION 13: PURCHASER'S INSTRUMENTS AT CLOSING
Section 13.01. On the Closing Date, Purchaser shall cause the Escrow
Agent to deliver the Purchase Price to the Seller. Additionally, on the
Closing Date, Purchaser shall execute and deliver to the Seller the following:
(a) the Assignment and Assumption Agreement in the form of Exhibit C
attached hereto; and
(b) such other documents, instruments, resolutions and other material
necessary to effect the transfer of title hereunder and reasonably requested
by the Seller or the Title Insurer.
SECTION 14: INTENTIONALLY DELETED
SECTION 15: BROKERAGE
Section 15.01. Purchaser and the Seller represent and warrant to each
other that no broker or person was in any way instrumental or had any part in
bringing about this transaction except CB Xxxxxxx Xxxxx, Inc., with respect to
the Florida Properties, and Insignia/ESG, Inc., with respect to the Arizona
Properties, whose fees the Seller shall pay in each case. Purchaser agrees
that, should any claim be made for commissions with respect to the
transactions contemplated hereby by any broker or person other than CB Xxxxxxx
Xxxxx, Inc. and Insignia/ESG Inc. arising by, through or on account of any act
of Purchaser or Purchaser's representatives, Purchaser shall indemnify and
hold the Seller harmless from and against any and all direct claims,
liabilities, costs or expenses (including reasonable out-of-pocket attorneys'
fees) in connection therewith. The Seller agrees that should any claim be made
for commissions by any broker or person including, but not limited to CB
Xxxxxxx Xxxxx, Inc. and Insignia/ESG, Inc. arising by, through or on account
of any act of any Seller or such Seller's representatives, Seller shall
indemnify and hold Purchaser harmless from and against any and all claim,
liability, cost or expense (including reasonable attorneys' fees) in
connection therewith. The provisions of this paragraph shall survive the
Closing and/or termination of this Agreement, but the provisions hereof shall
not be deemed or construed as a covenant for the benefit of any third party.
Section 15.02. Each party being indemnified is hereinafter called
"INDEMNITEE" and each party making such indemnity is hereinafter called
"INDEMNITOR". Indemnitee agrees that in the event any Claims shall be made
against Indemnitee for which indemnity is sought, Indemnitee shall, with due
diligence and reasonable promptness, notify Indemnitor thereof and continue to
give Indemnitor reasonably prompt written notice of all developments in
connection therewith within the knowledge of Indemnitee. Indemnitor shall have
the option of defending the Claim at Indemnitor's sole cost and expense, in
the name of Indemnitee, and shall have the right to designate any counsel
approved by Indemnitee (which approval shall not be unreasonably withheld or
delayed) to defend such Claim, and if Indemnitor so elects to defend such
Claim, Indemnitee shall have the right to participate and be represented by
counsel or other representatives of Indemnitee's choosing in any Claim and all
negotiations relative thereto, at its sole cost and expense. Indemnitor shall
have the right to determine all matters in connection with the Claim
(including, without limitation, all negotiations and the settlement thereof),
except that no settlement of Indemnitee's liability may be made without
Indemnitee's consent. If Indemnitee shall refuse to consent to any reasonable
settlement, Indemnitee shall thereafter negotiate or defend the Claim at its
own cost and expense, and Indemnitor will only be liable for the amount for
which Indemnitor could have settled the Claim, as well as the costs and
expenses incurred up to the date of the refusal by Indemnitee to consent to
the settlement. Indemnitor shall arrange to provide such information to
Indemnitee as is necessary to keep Indemnitee fully informed of all
proceedings and Indemnitee shall have the right to examine Indemnitor's
records relating to such proceedings during normal business hours. Indemnitee
shall fully cooperate with Indemnitor and Indemnitor's attorneys at all stages
of the Claim and shall promptly supply to Indemnitor and Indemnitor's
attorneys all papers and evidence in Indemnitee's possession and other
information within Indemnitee's knowledge pertinent to the Claim. Indemnitee
shall produce at the appropriate place or places, at reasonable times, such
witnesses under Indemnitee's control as may be reasonably requested by
Indemnitor or Indemnitor's attorneys.
Section 15.03. If Indemnitor does not timely exercise Indemnitor's right
to defend any claim, then after written notice to Indemnitor, Indemnitee shall
defend the same with due diligence at the sole expense of Indemnitor. Section
15.04. The provisions of this agreement relating to indemnification shall
survive the Closing or sooner termination of this agreement.
SECTION 16: CONDITIONS PRECEDENT TO CLOSING
Section 16.01. (a) Purchaser's obligations to close title under this
Agreement on the Closing Date shall be subject to the satisfaction or
existence of the following conditions precedent on or prior to the Closing
Date:
(i) all of the Seller's representations and warranties made in this
Agreement shall be true and correct in all material respects as of the
Closing Date as if they were made on that date; provided, however, that
Purchaser shall be obligated to consummate the Closing without any
adjustment in the Purchase Price if Loss Events shall have occurred and
the aggregate amount of the Material Losses resulting therefrom is equal
to or less than the Material Loss Threshold. If any Loss Events shall
have occurred and the aggregate amount of the Material Losses resulting
therefrom exceeds the Material Loss Threshold, Purchaser shall have the
option to (a) terminate this Agreement and demand the return of the
Deposit (unless Seller shall agree to grant Purchaser a credit against
the Purchase Price in an amount equal to the difference between the
Material Loss Threshold and the aggregate amount of all Material Losses,
in which case Purchaser may not terminate this Agreement; provided that
Purchaser shall have no obligation to close if such credit is in an
amount in excess of $1,000,000), or (b) recover such Material Loss from
Seller at Closing by means of an adjustment or credit to the Purchase
Price; provided, however, that Purchaser's credit on account of Material
Losses determined prior to Closing shall not exceed $1,000,000 pursuant
to this clause (b) unless Seller expressly agrees to a credit exceeding
$1,000,000. Notwithstanding the foregoing, if Purchaser claims a credit
against the Purchase Price of more than $1,000,000, on account of
Material Losses Seller shall have the right to terminate this Agreement,
the Deposit shall be returned to Purchaser and thereafter neither party
shall have any obligation to the other except with respect to those
provisions expressly stated to survive the termination of this Agreement
and except that Seller shall reimburse Purchaser for a portion of its
expenses actually incurred in connection with this transaction up to a
maximum amount of $25,000. In the event that there is a dispute at
Closing as to whether a Material Loss has occurred, the Closing shall
occur without adjustment regarding same, provided, however, that a
portion of the Purchase Price equal to the disputed amount (but in no
event more than $1,000,000) shall be held in escrow by the Escrow Agent
pending resolution of the dispute and in the event that a Material Loss
shall be determined post-closing to have occurred, the amount held in
escrow shall be disbursed to Purchaser in accordance with Section 10.26
of this Agreement to the extent of the Material Loss as finally
determined and the balance, if any, shall be returned to Seller.
Notwithstanding the foregoing, if the amount of the credit claimed by
Purchaser on account of Material Losses exceeds $1,000,000 and there is a
dispute at Closing as to the amount of such Material Losses, Purchaser
may elect either (x) to terminate this Agreement and receive a return of
the Deposit or (ii) require Seller to escrow $1,000,000 as provided above
pending resolution of the dispute in which case Purchaser shall not be
entitled to a recovery or credit in excess of $1,000,000 with respect to
such disputed Material Losses claim for which an escrow is created at
Closing under the immediately preceding sentence.
(ii) the Seller shall have performed all material obligations and
agreements undertaken by it herein to be performed (including, without
limitation Section 11 of this Agreement) and shall have delivered all
documentation required to be delivered by Seller hereunder at or prior to
the Closing Date;
(iii) the Title Insurer shall be ready, willing and able to insure
title subject only to the Permitted Encumbrances.
(iv) the aggregate amount of claims under Material Property
Litigations shall be less than the Material Litigation Threshold. If, on
the Closing Date, there are Material Property Litigations which involve
claims that exceed the Material Litigation Threshold, Purchaser shall
have the right to terminate this Agreement and receive the return of the
Deposit.
(v) The aggregate amount of any Material Adverse Changes shall be
less than the MAC Threshold. If, on the Closing Date, Material Adverse
Changes shall have occurred which exceed the MAC Threshold, Purchaser
shall have the right to terminate this Agreement and receive the return
of the Deposit.
Except as expressly set forth herein to the contrary, in the event that any of
the conditions to Purchaser's obligations to close title under this Agreement
are not satisfied on the Closing Date, Purchaser may (but shall have no
obligation to), in its sole discretion, adjourn the Closing for a period not
to exceed two (2) months, during which period Seller will use commercially
reasonable efforts to satisfy such conditions precedent, or terminate this
Agreement in which case Purchaser may recover the Deposit and this Agreement
shall be of no further force and effect except with respect to those
provisions expressly stated to survive the termination of this Agreement.
(b) The Seller's obligations to close title under this Agreement on the
Closing Date shall be subject to the satisfaction of the following conditions
precedent on the Closing Date:
(i) all of Purchaser's representations and warranties made in this
Agreement shall be true and correct in all material respects as of the
Closing Date as if they were made on that date; and
(ii) Purchaser shall have performed all material obligations and
agreements undertaken by it herein to be performed at or prior to the
Closing Date.
SECTION 17: CLOSING
Section 17.01. The closing of title to the Property (the "CLOSING") shall
take place at the offices of Xxxxx & Xxxx LLP, One World Trade Center, New
York, New York at 10:00 a.m. EDT on September 27, 1999 (time being of the
essence).
SECTION 18: EXPENSES
Section 18.01. Each party will bear its own legal expenses in connection
with this transaction. Purchaser shall pay the cost of any title insurance
policies and any transfer taxes, documentary stamp taxes and other recording
fees due in connection with the Properties, except Seller shall pay up to a
maximum amount of $400,000 on account of the Florida documentary stamp taxes
and Purchaser's owner's title insurance premiums (not including premiums for
endorsements) for the Florida Properties. Seller agrees that Purchaser shall
have the right to allocate the Purchase Price among the Properties in its sole
and absolute discretion. Except as otherwise expressly set forth herein,
Purchaser shall pay all other Purchaser costs and Purchaser expenses of
preparing for and concluding this transaction, including the cost of surveys,
engineering reports and environmental obtained by Purchaser and Purchaser's
legal use opinions, if any, and the like.
SECTION 19: NOTICES
Section 19.01. All notices, requests and demands to be made hereunder to
the parties hereto shall be in writing (at the addresses set forth below) and
shall be given by any of the following means: (a) personal delivery
(including, without limitation, overnight delivery, courier or messenger
services); (b) telecopying (if electronically confirmed in writing,) or (c)
registered or certified, first-class United States mail, postage prepaid,
return receipt requested. Notice by a party's counsel shall be deemed to be
notice by such party. All notices to the Seller shall be sent to the address
set forth below. Such addresses may be changed by notice to the other parties
given in the same manner as provided above. Any notice, demand or request sent
(x) pursuant to subsection (a) shall be deemed received upon such personal
delivery, (y) pursuant to subsection (b) shall be deemed received on the day
it is dispatched by telecopier and (z) pursuant to subsection (c) shall be
deemed received upon delivery or the date on which delivery was refused.
If to Purchaser:
Praedium Performance Fund IV, L.P.
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xxxx Xxxxxxxxx
Telecopy: (000) 000-0000
With copies to:
Sidley & Austin
000 Xxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxx, Esq.
Telecopy: (000) 000-0000
To Seller: c/o Metropolitan Partners, LLC
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
With copies to:
c/o Metropolitan Partners LLC
00 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attention: Xx. Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
With copies to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
SECTION 20: DEFAULT
Section 20.01. Purchaser's Default. If Purchaser shall be in default,
hereunder and fail to close the transaction contemplated hereunder, provided
Purchaser has not exercised any of its rights to terminate this Agreement,
then the Seller shall have the right, if and only if Seller is ready, willing
and able to convey title to the Properties in accordance with the terms of
this Agreement, to treat this Agreement as having been breached by Purchaser
and the Seller's sole remedy on account of such breach shall be the right to
terminate this Agreement by written notice to Purchaser or Purchaser's
attorney. Upon such termination (a) Purchaser shall forfeit all rights and
claims with respect to the Property pursuant to this Agreement and to the
Deposit; and (b) Escrow Agent shall remit the Deposit to the Seller. The
Seller and Purchaser hereby agree that payment of the Deposit to the Seller
shall be deemed to be fair and adequate, but not excessive, liquidated damages
based upon the following considerations which the Seller and Purchaser agree
would constitute damages to the Seller for any default by Purchaser but which
are impossible to quantify, to wit: (i) the removal of the Properties from the
real estate market together with the uncertainty of obtaining a new purchaser
at the same or greater purchase price; (ii) the expenses incurred by the
Seller, including (but not by way of limitation) attorneys' fees, taxes,
mortgage interest, and other items incidental to the maintenance of the
Properties until they are eventually sold; and (iii) all other expenses
incurred by the Seller as a result of Purchaser's default.
In the event of such termination, Purchaser shall immediately return all due
diligence material, reports and studies delivered to Purchaser by the Seller and
this Agreement shall be of no further force and effect except for those
provisions expressly stated to survive termination of this Agreement.
Section 20.02. The Seller's Default. Except as expressly set forth in
Sections 16.01 and 10.26 hereof, in the event that the Seller is in default by
reason of a material breach of the Seller's representations, covenants or
warranties and the same cannot be cured within thirty (30) days without harm
to Purchaser, subject to the immediately succeeding sentence Purchaser's sole
remedy shall be to demand the immediate return of the Deposit with interest
thereon and the cancellation of this Agreement. Except as expressly set forth
in Sections 16.01 and 10.26 hereof, in the event the Seller is in default by
reason of (a) Seller's failure to deliver title in accordance with the terms
of this Agreement for more than ten (10) calendar days after receipt of
written notice thereof has been given to the Seller or Seller's failure to
satisfy any of the conditions precedent set forth in Section 16.01 hereof
(subject to any adjournments expressly provided for in this Agreement) or (b)
Seller's intentional or unintentional breach of Seller's covenants,
representations, or warranties, Purchaser's remedies shall include the right
to (x) immediate return of the Deposit and the cancellation of this Agreement
and reimbursement by Seller of all of Purchaser's out-of-pocket due diligence
expenses actually incurred or (y) an action to specifically enforce this
Agreement, provided, however, that Purchaser may bring an action to
specifically enforce this Agreement only with respect to all of the
Properties, it being understood that Purchaser may not and shall not be
required under any circumstances acquire less than all of the Properties
pursuant to this Agreement. The preceding sentence shall not be deemed to
limit Purchaser's right to seek recovery up to the Maximum Reimbursement
Obligation pursuant to Section 10.26 of this Agreement. Except as otherwise
provided herein, Purchaser shall have no other rights or remedies against the
Seller on account of a default. Except as expressly set forth herein to the
contrary, the provisions of this Section 20.02 shall survive the Closing or
earlier termination of this Agreement.
SECTION 21: ASSIGNMENT
Section 21.01. This Agreement and Purchaser's rights hereunder may not be
assigned by Purchaser without the prior written consent of the Seller except
that Purchaser may designate, no later than five (5) days prior to Closing,
wholly owned subsidiaries or Affiliates as the entities to take title to the
Properties but such designation shall not relieve Purchaser with respect to
any liability which may survive (but, jointly and severally with its
assignees) the Closing or termination of this Agreement in accordance with the
terms hereof. To the extent that Purchaser assigns it rights in accordance
with this Section 21.01, Seller's post-closing obligations and Purchaser's
rights shall run to the benefit of such assignee(s).
SECTION 22: INDEMNITY
Section 22.01. Seller shall indemnify and hold Purchaser harmless from
any loss, cost or damage suffered by Purchaser on account of or in connection
with any of the litigations set forth on Schedule 13 attached hereto, which
obligation shall survive Closing.
SECTION 23: COUNTERPARTS
Section 23.01. This Agreement may be executed in counterparts. The
signatures of the parties who sign different counterparts of this Agreement or
any of the instruments executed to effectuate the purposes of this Agreement
shall have the same effect as if those parties had signed the same
counterparts of this Agreement or of any such instrument.
SECTION 24: INTENTIONALLY DELETED
SECTION 25: MISCELLANEOUS
Section 25.01. Subject to Section 21 hereof, this Agreement shall be
binding upon and shall inure to the benefit of the Seller and Purchaser and
their respective successors and assigns.
Section 25.02. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. This Agreement shall be
construed without regard to any presumption or other rule requiring
construction against the party causing this Agreement to be drafted. If any
words or phrases in this Agreement shall have been stricken out or otherwise
eliminated, whether or not any other words or phrases have been added, this
Agreement shall be construed as if the words or phrases so stricken out or
otherwise eliminated were never included in this Agreement and no implication
or inference shall be drawn from the fact that said words or phrases were so
stricken out or otherwise eliminated. All terms and words used in this
Agreement, regardless of the number or gender in which they are used, shall be
deemed to include any other number and any other gender as the context may
require.
Section 25.03. The headings of the several Sections contained in this
Agreement are inserted only as a matter of convenience and for reference and
in no way define, limit or describe the scope of this Agreement or the intent
of any provision thereof.
Section 25.04. The invalidity or unenforceability of any provision of
this Agreement shall not affect or impair any other provision of this
Agreement.
Section 25.05. This Agreement contains the entire agreement between the
Seller and Purchaser, and any and all prior understandings and dealings
heretofore had are merged herein and any agreement hereafter made shall be
ineffective to change, modify or discharge this Agreement in whole or in part
unless such agreement hereafter made is in writing and signed by the Seller
and Purchaser.
Section 25.06. Purchaser shall have no right to record this Agreement or
a memorandum hereof. If Purchaser shall so record this Agreement or a
memorandum, Purchaser shall be in default of the terms and conditions of this
Agreement.
Section 25.07. All judicial actions, suits or proceedings brought against
either party with respect to its obligations, liabilities or any other matter
under or arising out of or in connection with this Agreement or for
recognition or enforcement of any judgment rendered in any such proceedings
may be brought in any trial or appellate state or federal court of competent
jurisdiction in the City of New York. By execution and delivery of this
Agreement, each party hereto accepts, generally and unconditionally, the
non-exclusive jurisdiction of such courts and irrevocably waives, and agrees
not to plead or claim, any objection that it may ever have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court. Each party hereby irrevocably waives
trial by jury and any objections to jurisdiction or venue, including without
limitation any objection to the laying of venue or based on the ground of
forum non conveniens, which it may now or in the future have to the bringing
of any such action or proceeding in any such jurisdiction.
SECTION 26: ESCROW AGENT
Section 26.01. The Seller and Purchaser hereby designate Commonwealth
Land Title Insurance Company as "ESCROW AGENT" to receive and hold the Deposit
delivered herewith by Purchaser in accordance with Section 3 hereof, and
Escrow Agent agrees to act as such Escrow Agent subject to the provisions of
this Section 26.
Section 26.02. The Deposit shall be deposited in an interest bearing
account at any federally insured banking institution. From and after the date
of a default by either party, all interest on the Deposit or the remaining
portion thereof shall be paid to the non-defaulting party.
Section 26.03. On receipt by Escrow Agent of a statement executed by the
Seller and Purchaser that title to the Property has closed under this
Agreement, Escrow Agent shall promptly deliver such Deposit to Purchaser
together with any interest accrued thereon and the Deposit plus interest shall
be credited against the Purchase Price.
Section 26.04. On receipt by Escrow Agent of a statement executed by
Purchaser prior to, on or after the Closing Date that title to the Properties
has not closed under this Agreement because of a default by any Seller under
this Agreement or because of any Seller's inability to convey title to the
Properties in accordance with the provisions of this Agreement or because any
contingency contained in this Agreement has not been satisfied or waived,
Escrow Agent shall, within five (5) Business Days, deliver a copy of said
statement to the Seller and return such Deposit to Purchaser on the fifth
(5th) Business Day after receipt by the Seller of said statement unless Escrow
Agent, prior to such return, receives from the Seller a statement contesting
the accuracy of Purchaser's statement and demanding retention of said Deposit
by Escrow Agent.
Section 26.05. On receipt by Escrow Agent of a statement executed by the
Seller prior to, on or after the Closing Date that title to the Property has
not closed under this Agreement because of a default by Purchaser under this
Agreement, Escrow Agent shall within five (5) Business Days deliver said
statement to Purchaser and deliver such Deposit to the Seller on the fifth
(5th) Business Day after receipt by Purchaser of such statement unless Escrow
Agent, prior to such delivery, receives from Purchaser a statement contesting
the accuracy of the Seller's statement and demanding retention of said Deposit
by Escrow Agent.
Section 26.06. On receipt by Escrow Agent of a statement from the Seller
or Purchaser, as the case may be, under subparagraph 26.04 or 26.05 above,
Escrow Agent shall retain the Deposit and thereafter deliver the same to
either the Seller or Purchaser as the Seller or Purchaser may direct by a
statement executed by them both, provided if there is any dispute with respect
to the Deposit, Escrow Agent may immediately and with notice to the Seller and
Purchaser, surrender said Deposit to a court of competent jurisdiction for
such disposition as may be directed by such court.
Section 26.07. Upon delivery of the Deposit to either Seller, Purchaser
or a court of competent jurisdiction under and pursuant to the provisions of
this Section, Escrow Agent shall be relieved of all liability, responsibility
or obligation with respect to or arising out of the Deposit and any and all of
its obligations arising therefrom.
Section 26.08. The Escrow Agent shall not be liable for any error of
judgment or for any act done or omitted by it in good faith or for anything
which it may in good faith do or refrain from doing in connection herewith or
for any negligence other than its gross negligence, nor shall the Escrow Agent
be answerable for the misconduct (except for willful misconduct) of its
agents, attorneys or employees if they be selected with reasonable care. The
Escrow Agent is authorized to act upon any document believed by it to be
genuine and to be signed by the proper party or parties and will incur no
liability in so acting.
Section 26.09. Seller and Purchaser acknowledge that Escrow Agent is
acting solely as a stakeholder. Seller and Purchaser shall jointly and
severally indemnify and hold the Escrow Agent harmless from and against any
cost, expenses, claims or liabilities arising in connection with its
performance hereunder as Escrow Agent, except to the extent caused by Escrow
Agent's gross negligence or willful misconduct. Section 26.10. The Escrow
Agent has executed this Agreement for the sole purpose of agreeing to act as
such in accordance with the terms of this Agreement.
SECTION 27: CONFIDENTIALITY/PUBLICATION
Section 27.01. Except as may be required by law or as may be necessary to
effectuate the contemplated transaction or except as set forth below, both the
Seller and Purchaser, individually and on behalf of their representatives,
agree that during the Contract Period they and their respective
representatives shall hold both the terms and conditions of this Agreement and
its existence as confidential information and will not except as required by
law or subpoena, disclose such terms, conditions or existence or the fact that
the negotiations are taking place, to any third party without the other's
consent. To the extent that either party desires to make any public relations
releases (other than required government and SEC filings) during the Contract
Period, the other party's written consent shall be required, which consent
shall not be unreasonably withheld or delayed. Notwithstanding anything to the
contrary herein set forth, in the event of a breach by either party under this
Section 27, the other party shall be entitled to seek such remedies as may be
available in equity or at law including, without limitation, damages. This
Section shall survive for one (1) year after the termination of this Agreement
in the event that the Closing does not occur. This Section shall constitute a
binding and enforceable agreement under applicable law.
IN WITNESS WHEREOF, the Seller and Purchaser have executed this Agreement as of
the day and year first above written.
SELLER
EAST BROADWAY 5151 LIMITED
PARTNERSHIP
By: East Broadway 5151 Limited
Partnership, its general partner
By: Metropolitan Operating
Partnership, L.P.,
its general partner
By: Metropolitan Partners, LLC,
its general partner
By: /s/ Xxxxx Xxxxxxx
------------------------
Name:
Title:
METROPOLITAN OPERATING PARTNERSHIP
By: Metropolitan Partners, LLC, its
general partner
By: Metropolitan Partners, LLC
By: /s/ Xxxxx Xxxxxxx
------------------------
Name:
Title:
5750 ASSOCIATES LIMITED PARTNERSHIP
By: 5750 Associates Limited
Partnership, its general
partner
By: Metropolitan Operating
Partnership, L.P. its general
partner
By: Metropolitan Partners,
LLC, its general partner
By: /s/ Xxxxx Xxxxxxx
--------------------
Name:
Title:
MAITLAND ASSOCIATES, LTD.
By: Metropolitan Operating
Partnership, L.P., its general
partner
By: Metropolitan Partners, LLC,
its general partner
By: /s/ Xxxxx Xxxxxxx
------------------------
Name:
Title:
MAITLAND WEST ASSOCIATES LIMITED
PARTNERSHIP
By: Metropolitan Operating
Partnership, L.P., its general
partner
By: Metropolitan Partners, LLC,
its general partner
By: /s/Xxxxx Recchler
------------------------
Name:
Title:
PURCHASER:
PRAEDIUM PERFORMANCE FUND IV, L.P.
By: Praedium Performance Partners LLC,
its general partner
By: /s/ Xxxx Xxxxxxxxx
------------------------
Name:
Title:
ESCROW AGENT
COMMONWEALTH LAND TITLE INSURANCE
COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name:
Title:
SCHEDULE 1
List of Personal Property
SCHEDULE 2
Brokerage Agreements
SCHEDULE 13
Litigation
Exhibit A: Description of the Land
Exhibit B:
DEED
When recorded, return to:
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________________________________________________________
(Space above this line for Recorder's use)
SPECIAL WARRANTY DEED
For the consideration of Ten Dollars and other valuable consideration,
the receipt and sufficiency of which are acknowledged,
______________________________, a ______________ limited partnership
("Grantor"), conveys to _____________________, a ______________ [limited
liability company], the following described real property situated in
___________________________, together with all buildings, structures,
improvements and fixtures thereon and all rights and privileges appurtenant
thereto:
See the legal description set forth in Exhibit "A" attached
and incorporated by this reference (the "Property").
SUBJECT TO only those matters set forth in Exhibit "B" attached and incorporated
by this reference.
Grantor binds itself and its successors to warrant and defend
the title to the Property against all acts of Grantor and no other, subject to
only the matters set forth above.
Dated this _____ day of ______________, 1999.
Grantor: ___________________________
By _________________________, its general partner
By____________________________________________
Name:
Title:
STATE OF_______________ )
) ss.
County of ______________)
The foregoing instrument was acknowledged before me this ____ day of
June, 1999, by as of _________________________________________, on behalf of
the partnership.
________________________________
Notary Public
My Commission Expires:
_______________________
Exhibit C
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT (this "Assignment"), dated this ____ day of _________,
199_, is made by and among _________________________ (the "Assignor") and
_______ ___________________________ (the "Assignee").
WHEREAS, Assignee has this day purchased Assignor's interest in the real
property legally described on the attached Exhibit A (the "Property"); and
WHEREAS, the execution and delivery of this Assignment is a condition
precedent to the purchase by the Assignee of the Property;
NOW, THEREFORE, in consideration of the purchase and sale of the
Property, and for other good and valuable consideration, Assignor agrees as
follows (unless otherwise defined, all capitalized terms shall have the
meanings set forth in the Purchase and Sale Agreement dated as of
_______________, 199_ between Assignor and Assignee (the "Purchase and Sale
Agreement"));
1. Assignor hereby grants, transfers and assigns to Assignee and Assignee
accepts from Assignor, without representation, warranty or covenant, all the
right, title and interest of Assignor in and to the following (the "Assigned
Assets"):
(a) the fixtures, machinery, equipment, and other items of personal
property and fixtures owned by the Assignor and located in or attached to the
Property, including, but not limited to the items set forth on Schedule 1 to
the Purchaser and Sale Agreement, and all warranties and guarantees, to the
extent in Assignor's possession or control, relating to the foregoing or the
Property or any portion thereof, and used in connection with the ownership or
operation of the Property;
(b) all leases, notices and other agreements with respect to the use and
occupancy of the Property, together with all amendments and modifications
thereto and any guaranties provided thereunder and rents, percentage rents,
additional rents, including prepaid rents (to the extent attributable to the
period following the date hereof) reimbursements, profits, income, receipts
and the amounts required to be deposited under any such leases in the nature
of security for the performance of any tenant's obligations thereunder;
(c) the right to use any names by which any of the Property is commonly
known and all goodwill, if any, related to said names;
(d) all permits, licenses, approvals, and certificates relating to the
Property and the foregoing personal property and all of the Assignor's right,
title and interest in and to (i) those contracts (including, without
limitation, management contracts) and agreements for the servicing,
maintenance, repair or operation of the Property and (ii) the brokerage
agreements listed on Schedule 2 to the Purchase and Sale Agreement relating to
the Leases;
(e) all books, records, promotional material, tenant data, past and
current rent rolls, market studies, keys, plans and specifications (other than
the general ledger account of the Assignor) used in connection with the use or
operation of the Property or personal property herein described in each case
to the extent in Assignor's possession or control; and
(f) all other rights, privileges, and appurtenances, if any related to
the ownership, use or operation of the Property or personal property herein
described, including, without limitation, any real estate tax refunds relating
to the Property allocable to the period following the date hereof. The
foregoing are collectively referred to herein as the "Assigned Assets".
The foregoing assignment is made without recourse, and on an "as-is,
where-is, with all faults" basis, without any representation or warranty by
Assignor except as may be expressly set forth in the Purchase and Sale
Agreement.
2. Assignor shall retain full responsibility for all the obligations
under the Assigned Assets accruing prior to the date hereof and Assignor
agrees to indemnify and hold Assignee harmless from any claims, liabilities or
costs arising therefrom.
3. Assignee agrees to assume full responsibility for all the obligations
under the Leases accruing on or after the date hereof and Assignee agrees to
indemnify and hold Assignor harmless from any claims, liabilities or costs
arising therefrom.
4. This instrument may be executed in counterparts, each of which shall
constitute an original and all of which, taken together, shall constitute one
and the same instrument.
5. This Assignment shall be governed by and construed in accordance with
the laws of the State of New York. This Assignment shall be construed without
regard to any presumption or other rule requiring construction against the
party causing this Agreement to be drafted.
IN WITNESS WHEREOF, the parties have executed this Assignment as of the
date first written above.
ASSIGNOR: ASSIGNEE:
_________________________ _________________________________
By: ____________________________
By:____________________________ By: _______________________
Name: Name:
Title:
Exhibit D
FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code provides that a transferee of a
U.S. real property interest must withhold tax if the transferor is a foreign
person. To inform the transferee that withholding of tax is not required upon
the disposition of a U.S. real property interest by ("Seller"), Seller hereby
certifies the following:
1. Seller is not a foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Internal Revenue Code and
Income Tax Regulations);
2. Seller's U.S. employer identification number is ( ) and
-----------------
3. Seller's principal place of business is (_______________________________).
Seller understands that this certification may be disclosed to the
Internal Revenue Service by transferee and that any false statement contained
herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have authority to sign this
document on behalf of Seller.
By: ________________________________
By:_____________________________
Name:
Title:
Subscribed and sworn to
before me this ____ day of
___________, 199_.
____________________________
Notary Public
Exhibit E
Arizona Contract Estoppel
Exhibit F
Florida Estoppels
Exhibit F-1
Property Tenant Premises
1. Maitland Forum ITT Suites 140 and 240
2. Maitland Forum Honor Technology Suites 105, 111, 113,
115, 180, 181, 225,
231, 235, 237 and
storage
3. Maitland Forum Apollo Suites 200 and 325
4. Maitland Forum Florida Power Suites 306, 312 and
entire 14th Floor
5. 0000 Xxxxx Xxxx. Xxxxxx Xxxxx 000
