EXECUTION COPY
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MEMBERSHIP INTERESTS PURCHASE AGREEMENT
BETWEEN
ENTRECAP FINANCIAL LLC
AND
CAPLEASE, LP
DATED AS OF MARCH 14, 2007
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TABLE OF CONTENTS
ARTICLE I Purchase and Sale of Interests.......................................1
Section 1.1. Purchase and Sale of Interests......................1
ARTICLE II Purchase Price 2
Section 2.1. Purchase Price......................................2
Section 2.2. Payment of Purchase Price...........................2
ARTICLE III Closing 3
Section 3.1. Closing Date........................................3
Section 3.2. Apportionments......................................3
Section 3.3. Closing Deliveries..................................4
Section 3.4. Transfer Taxes and Transaction Costs................5
Section 3.5. Default by Purchaser................................5
Section 3.6. Default by Seller...................................6
Section 3.7. Closing of Books....................................7
ARTICLE IV Representations and Warranties of Seller............................7
Section 4.1. Representations.....................................7
Section 4.2. Seller's Knowledge.................................10
Section 4.3. Condemnation.......................................10
Section 4.4. Casualty...........................................10
Section 4.5. Leases and Debt Instruments........................11
Section 4.6. Environmental Matters..............................11
Section 4.7. Absence of Bankruptcy..............................11
Section 4.8. Taxes..............................................11
Section 4.9. Insurance..........................................12
Section 4.10. Brokers............................................12
Section 4.11. Disclaimer of Certain Warranties...................12
Section 4.12. Condition of the Properties; Representations.......12
ARTICLE V Representations and Warranties of Purchaser.........................14
Section 5.1. Organization and Standing..........................14
Section 5.2. Authorization, Validity and Execution..............14
Section 5.3. Consents and Approvals; No Violation...............14
Section 5.4. Securities Law Representations.....................14
Section 5.5. Availability of Funds..............................15
Section 5.6. Single Purpose Entity; Guarantor...................15
Section 5.7. Litigation.........................................16
Section 5.8. Miscellaneous......................................16
ARTICLE VI Certain Agreements.................................................17
Section 6.1. Conduct of Business................................17
Section 6.2. Access.............................................18
Section 6.3. Confidentiality....................................18
Section 6.4. Directors' and Officers' Indemnification...........19
Section 6.5. Further Assurances.................................19
Section 6.6. Publicity..........................................19
Section 6.7. Retention of Records...............................19
Section 6.8. Change of Name of Company Following the Closing....20
Section 6.9. No Implied Representations and Warranties..........20
Section 6.10. Third Party Notices and Consents...................20
Section 6.11. Tenant Estoppels...................................21
Section 6.12. Lender Estoppels...................................21
Section 6.13. Special Provisions Regarding Prefco II Limited
Partnership...................................22
ARTICLE VII Conditions to Closing.............................................22
Section 7.1. Conditions to Purchaser's Obligations..............22
Section 7.2. Conditions to Seller's Obligations.................23
ARTICLE VIII Survival and Indemnification.....................................23
Section 8.1. Survival of Representations........................23
Section 8.2. Indemnification by Seller..........................23
Section 8.3. Indemnification by Purchaser.......................24
Section 8.4. Limits on Indemnification..........................24
Section 8.5. Procedure for Indemnification......................25
Section 8.6. Exclusive Remedy...................................26
ARTICLE IX Termination 26
Section 9.1. Termination........................................26
Section 9.2. Effect of Termination..............................27
ARTICLE X Miscellaneous 27
Section 10.1. Governing Law; Consent to Jurisdiction.............27
Section 10.2. Waiver of Jury Trial...............................27
Section 10.3. Notices............................................27
Section 10.4. Entire Agreement; Amendment........................28
Section 10.5. Parties in Interest................................28
Section 10.6. Interpretation.....................................29
Section 10.7. Certain Definitions................................29
Section 10.8. Disclosure Schedules...............................31
Section 10.9. Waiver.............................................31
Section 10.10. Severability.......................................31
Section 10.11. Counterparts; Delivery by Facsimile................31
Section 10.13. Further Assurances.................................32
Section 10.14. Third Party Beneficiary............................32
Section 10.15. Exculpation........................................32
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Exhibits
Exhibit A The Subsidiaries
Exhibit B The Properties
Exhibit C Escrow Agent Wiring Instructions
Exhibit D Assignment of Interests
Exhibit E Form of Tenant Estoppel
Exhibit F Form of Lender Estoppel
Schedules
Schedule 4.1(a) Organizational Documents
Schedule 4.1(b) Capital Structure of Acquired Companies
Schedule 4.5(a) Leases, Debt Instruments, and Material Agreements
Schedule 4.6 Environmental Reports
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MEMBERSHIP INTERESTS PURCHASE AGREEMENT
This MEMBERSHIP INTERESTS PURCHASE AGREEMENT (this "Agreement"), dated as
of March 14, 2007, is made by and between ENTRECAP FINANCIAL LLC, a Delaware
limited liability company ("Seller"), successor by conversion to limited
liability company status of EntreCap Financial Corporation, a Delaware
corporation, (f/k/a Pitney Xxxxx Credit Corporation) and CAPLEASE, LP, a
Delaware limited partnership ("Purchaser").
RECITALS
WHEREAS, Seller is the owner and holder of all of the limited liability
interests in ENTRECAP REAL ESTATE LLC, a Delaware limited liability company (the
"Company");
WHEREAS, the Company owns, directly or indirectly, and controls all of the
partnership interests, stock interests and limited liability company interests
in and to the limited partnerships, corporations and limited liability companies
set forth on Exhibit A hereto (individually a "Subsidiary" and collectively the
"Subsidiaries"; the partnership, stock and limited liability company interests
in the Company and the Subsidiaries being referred to below as the "Interests");
WHEREAS, the Company and the Subsidiaries are engaged solely in the
business of owning and leasing the real estate assets set forth and described on
Exhibit B hereto (the "Properties"), and Seller, through its ownership of the
Interests, owns and holds the beneficial ownership of the Properties;
WHEREAS, on the terms and subject to the conditions set forth herein,
Seller has agreed to sell, assign and transfer to Purchaser, and Purchaser has
agreed to purchase from Seller, all of Seller's right, title and interest in and
to the Interests and the Properties;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF INTERESTS
Section 1.1. PURCHASE AND SALE OF INTERESTS. On the terms and subject to
the conditions set forth herein, Seller agrees to sell, assign, transfer and
convey to Purchaser, and Purchaser agrees to purchase, acquire and accept from
Seller, all of the right, title and interest of Seller in and to the Interests.
ARTICLE II
PURCHASE PRICE
Section 2.1. PURCHASE PRICE. The aggregate consideration to be paid by
Purchaser to Seller in consideration of the Interests (the "Purchase Price") is
THREE HUNDRED SIXTY-FOUR MILLION FOUR HUNDRED THOUSAND AND NO/100 DOLLARS
($364,400,000.00), payable as follows:
(i) Twenty Million and No/100 Dollars ($20,000,000.00), by payment
of the "Deposit" (as defined below) pursuant to Sections 2.2(a) and (c) hereof;
(ii) Taking title to the Interests with the properties being
encumbered by, and subject to, existing mortgage indebtedness, which as of the
date of closing is estimated to be in the aggregate principal amount of
$172,316,859.00; and
(iii) The balance of the Purchase Price in cash at the Closing, in
the amount of $172,083,141.00. To the extent that the balance of the existing
mortgage indebtedness is greater or less than the amount set forth in clause
(ii) above, the balance of the Purchase Price payable in cash at the Closing
shall be decreased or increased accordingly.
Section 2.2. PAYMENT OF PURCHASE PRICE. (a) Not later than the Business
Day following the execution of this Agreement by the parties, Seller and
Purchaser shall enter into a separate escrow agreement with First American Title
Insurance Company of New York as escrow agent (the "Escrow Agent"), and
Purchaser shall either deliver to Escrow Agent a bank check issued by a bank
which is a member of the New York Clearing House Association in the amount of
Five Million Dollars ($5,000,000.00), payable to the order of "First American
Title Insurance Company, as Escrow Agent" or transfer by a wire transfer of
immediately available federal funds the amount of Five Million Dollars
($5,000,000.00) to the escrow account established by Escrow Agent, pursuant to
the wire instructions set forth on Exhibit C (the deposit which made pursuant to
this subsection (a) and the additional deposit made pursuant to subsection (c)
below being referred to as the "Deposit").
(b) For a period of twenty-four (24) days following the date of this
Agreement (the "Inspection Period"), Purchaser shall have the right to conduct
such due diligence with respect to the Properties, the Company and the
Subsidiaries as Purchaser deems appropriate, including the right to conduct such
inspections at the Properties as it may elect to perform, provided that such
inspections are permitted under the terms of applicable leases and do not
disturb or in any way disrupt the occupancy or operations of tenants at the
Properties. Seller shall deliver to Purchaser or its representatives, promptly
upon request, all documents in Seller's possession regarding the Properties, the
Company or the Subsidiaries as Purchaser may reasonably request, including tax
returns relating to the Properties, the Company or the Subsidiaries. In the
event that Purchaser is not satisfied with the results of its inspections, then
Purchaser, at its sole discretion, may terminate this Agreement by notice given
to Seller no later than the expiration of the Inspection Period. If Purchaser
has not so notified Seller of Purchaser's election to terminate this Agreement
under this Section 2.2(b) upon the expiration of the Inspection Period, then the
option to terminate the Agreement under this Section 2.2(b) shall be null and
void and of no further effect. Time is of the essence as to Purchaser's
obligations under this paragraph (b).
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(c) Not later than the Business Day following the expiration of the
Inspection Period, Purchaser shall either deliver to Escrow Agent, an unendorsed
bank check issued by a bank which is a member of the New York Clearing House
Association in the amount of Fifteen Million Dollars ($15,000,000.00) payable
directly to the order of "First American Title Insurance Company, as Escrow
Agent" or wire transfer in immediately available federal funds the amount of
Fifteen Million Dollars ($15,000,000.00) to the escrow account of Escrow Agent
in accordance with the wire instructions set forth on Exhibit C. Time is of the
essence as to Purchaser's obligations under this paragraph (c).
(d) At the Closing, Seller shall be entitled to retain the Deposit
(together with all interest accrued thereon) and Purchaser shall deliver the
balance of the Purchase Price (i.e., the cash portion of the Purchase Price less
the Deposit) to Seller.
(e) All monies payable by Purchaser under this Agreement, unless
otherwise specified in this Agreement, shall be paid by Purchaser causing said
amount to be wire transferred in immediately available federal funds for credit
to such bank account or accounts, and divided into such amounts as may be
required to consummate the transactions contemplated by this Agreement.
(f) In the event that Purchaser fails to make the required payment of
the additional portion of the Deposit, pursuant to paragraph (c) above, then
such failure shall constitute a default hereunder, and Seller shall be entitled
to retain, as its sole and exclusive remedy, the Deposit paid pursuant to
paragraph (a) above plus all interest earned thereon.
ARTICLE III
CLOSING
Section 3.1. CLOSING DATE. The closing of the transactions contemplated
hereby (the "Closing") will take place at 10:00 a.m., Eastern Time, at the
offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx
the fourth (4th) Business Day following the expiration of the Inspection Period.
The date on which the Closing occurs is referred to herein as the "Closing
Date".
Section 3.2. APPORTIONMENTS. The parties agree that there will be no
prorations or apportionments as of the Closing Date, other than prorations for
franchise, income and similar taxes (which will be prorated at Closing). The
provisions of this Section 3.2 shall survive the Closing.
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Section 3.3. CLOSING DELIVERIES.
(a) BY SELLER. At the Closing, Seller will deliver to Purchaser the
following:
(i) title to the Interests effected in the manner specified in the
limited liability agreement of the Company, pursuant to an Assignment from
Seller to Purchaser in the form set forth as Exhibit D;
(ii) to the extent any Interests have been certificated, the
original certificate evidencing such Interest, duly endorsed on such certificate
(or by separate stock power) to Purchaser;
(iii) a certificate executed by the corporate secretary or an
assistant secretary of Seller certifying as of the Closing Date as to the
resolution of the Board of Directors of Seller authorizing the execution,
delivery and performance by Seller of this Agreement and the consummation of the
transactions contemplated hereby;
(iv) certificates, if any, of the appropriate Governmental
Authorities certifying the good standing of Seller and the Subsidiaries
organized under the laws of one of the United States;
(v) resignations and releases effective as of the Closing Date of
the directors and officers of the Company and the Subsidiaries;
(vi) originals or, if unavailable, photocopies of the Leases then in
effect to the extent in Seller's possession or control;
(vii) amended limited liability company certificates of formation,
limited partnership certificates or articles of incorporation to the extent
required by applicable law with any Secretary of State in connection with the
transfer of the Interests;
(viii) originals or, if unavailable, photocopies of all other
documents listed or referred to in this Agreement, or in the Exhibits or
Schedules hereto, concerning the Company, the Subsidiaries and the Properties,
to the extent that such documents are in Seller's possession or control; and
(ix) a duly executed certification stating that Seller is not a
"foreign person" within the meaning of Section 1445 of the Internal Revenue Code
of 1986.
(b) BY PURCHASER. At the Closing, Purchaser will deliver to Seller:
(i) the Purchase Price, as provided in Section 2.2;
(ii) a certificate executed by an officer of Purchaser to the effect
that the conditions specified in clauses (a) and (b) of Section 7.2 have been
satisfied;
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(iii) a certificate executed by the corporate secretary or an
assistant secretary of Purchaser certifying as of the Closing Date (A) a true
and complete copy of the certificate of incorporation of Purchaser, (B) a true
and complete copy of the bylaws of Purchaser, (C) a true and complete copy of
the resolutions of the board of directors of Purchaser authorizing the
execution, delivery and performance by Purchaser of this Agreement and the
consummation of the transactions contemplated by this Agreement and (D)
incumbency matters;
(iv) certificates, if any, of the appropriate Governmental
Authorities certifying the good standing of Purchaser in its state or
jurisdiction of incorporation; and
(v) where required by the terms of any of the Leases or Debt
Instruments, proof that Purchaser or a guarantor furnished by Purchaser has the
requisite financial net worth to succeed Seller as beneficial owner of the
Leases and the Properties.
Section 3.4. TRANSFER TAXES AND TRANSACTION COSTS.
(a) Seller shall be responsible for (i) the costs of its legal counsel,
advisors and other professionals employed by it in connection with the
transactions contemplated by this Agreement; (ii) any fees, costs or expenses,
including [assumption and] legal fees, of any lender under any Debt Instrument
or any lessee under any Lease payable by Seller or Purchaser in connection with
the transactions contemplated by this Agreement, and any such fees, costs or
expenses accruing prior to the date hereof, and (iii) any sales, use or real
property transfer taxes, recording fees, gain taxes, stock transfer taxes or
fees and all other similar taxes and fees (collectively "Transfer Taxes").
(b) Except as otherwise provided above, Purchaser shall be responsible
for (i) the costs and expenses associated with its due diligence, (ii) the costs
and expenses of its legal counsel, advisors and other professionals employed by
it in connection with the transactions contemplated by this Agreement, (iii) all
premiums and fees for title examination and title insurance obtained and all
related charges and survey costs in connection therewith, (iv) all costs and
expenses incurred in connection with any new financing obtained by Purchaser,
including without limitation, loan fees, mortgage recording taxes, financing
costs and lender's legal fees and (v) any recording fees, other than as set
forth in paragraph (a) of this Section 3.4, for documentation to be recorded in
connection with the transactions contemplated by this Agreement.
(c) The provisions of this Section 3.4 shall survive the Closing.
Section 3.5. DEFAULT BY PURCHASER. (a) If (i) Purchaser shall default in
the payment of the Purchase Price or in the performance of any of its other
obligations to be performed on the Closing Date, or (ii) Purchaser shall default
in the performance of any of its material obligations to be performed prior to
the Closing Date and, with respect to any default under this clause (ii) only,
such default shall continue for five (5) Business Days after notice to
Purchaser, Seller's sole remedy by reason thereof shall be to terminate this
Agreement, and upon such termination Seller shall be entitled to retain the
Deposit (and all interest earned thereon) as liquidated damages for Purchaser's
default hereunder, it being agreed that the damages by reason of Purchaser's
default are difficult, if not impossible, to ascertain, and thereafter Purchaser
and Seller shall have no further rights or obligations under this Agreement
except for those that are expressly provided in this Agreement to survive the
termination hereof. If Seller terminates this Agreement pursuant to a right
given to it hereunder and Purchaser takes any action which interferes with
Seller's ability to sell, exchange, transfer, lease, dispose of or finance any
Property or Interests or take any other actions with respect thereto (including,
without limitation, the filing by Purchaser of any lis pendens or other form of
attachment against any Property or Interest), then Purchaser (and any permitted
assignee of Purchaser's interest hereunder) and shall be liable for all losses,
costs, damages, liabilities or expenses (including, without limitation,
reasonable attorneys' fees, court costs and disbursements but not consequential
damages), as determined by a final non-appealable judgment of court of competent
jurisdiction to have been incurred by Seller by reason of such action by
Purchaser. Notwithstanding the foregoing, none of the foregoing provisions
regarding liquidated damages or the provisions of the preceding sentence shall
be deemed to reduce or waive in any respect the additional obligations of
Purchaser to indemnify Seller after the Closing Date as provided in Section 8.3
of this Agreement. The provisions of this Section 3.5 shall survive the
termination hereof.
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(b) If Purchaser is unable to timely satisfy (and Seller has not waived
in writing) the conditions precedent to Seller's obligation to effect the
Closing pursuant to Section 7.2, then such failure shall constitute a default
hereunder, in which case paragraph (a) of this Section 3.5 shall govern.
Section 3.6. DEFAULT BY SELLER. (a) If (x) Seller shall default in any of
its obligations to be performed on the Closing Date or (y) Seller shall default
in the performance of any of its material obligations to be performed prior to
the Closing Date and, with respect to any default under this clause (y) only,
such default shall continue for five (5) Business Days after notice to Seller,
Purchaser (in lieu of prosecuting an action for damages or proceeding with any
other legal or equitable course of conduct, the right to bring such actions or
proceedings being expressly and voluntarily waived by Purchaser, to the extent
legally permissible, following and upon advice of its counsel) shall have the
right, to either (i) rescind this Agreement and receive a return of the Deposit
(together with any interest earned thereon), it being understood that if
Purchaser fails to commence an action for specific performance within sixty (60)
days after such default, Purchaser's sole remedy shall be to receive a return of
the Deposit (together with any interest earned thereon) subject to the other
provisions of this Section 3.6, or (ii) to seek to obtain specific performance
of Seller's obligations hereunder, provided that any action for specific
performance shall be commenced within sixty (60) days after such default, and if
Purchaser prevails in such action then Seller shall reimburse Purchaser for all
reasonable legal fees, court costs and all other reasonable costs of such
action. If Purchaser elects to seek specific performance of this Agreement, then
as a condition precedent to any suit for specific performance, Purchaser shall
on or before the Closing Date, time being of the essence, perform, in all
material respects, all of its obligations hereunder which are capable of being
performed (other than the payment of the Purchase Price, which shall be paid as
and when required by the court in the suit for specific performance). In the
event that Purchaser elects to rescind this Agreement and request a return of
the Deposit, upon such rescission and return this Agreement shall terminate and
neither party shall have any further obligations hereunder except for those that
are expressly provided in this Agreement to survive termination hereof.
Notwithstanding the foregoing, Purchaser shall have no right to seek specific
performance hereunder if Seller shall be prohibited from performing its
obligations hereunder by reason of any law, regulation, or other legal
requirement applicable to Seller. In addition, and notwithstanding the foregoing
provisions of this Section 3.6 and in addition to the other rights and remedies
of Purchaser set forth in this Section 3.6, in the event of Purchaser's
rescission of this Agreement as a result of Seller's willful default hereunder
or knowing breach of a material representation under Article IV hereof,
Purchaser shall be entitled to recover the actual out-of-pocket costs incurred
by Purchaser as a result of such default or breach by Seller, as determined by a
final non-appealable judgment of a court of competent jurisdiction. The
provisions of this Section 3.6 shall survive the termination hereof.
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(b) If Seller is unable to timely satisfy the conditions precedent to
Purchaser's obligation to effect the Closing pursuant to Section 7.1, then, (i)
Seller may, if it so elects and without any abatement in the Purchase Price,
adjourn the Closing Date for a period or periods not to exceed thirty (30) days
in the aggregate and (ii) if, after any such extension, the conditions precedent
to Purchaser's obligation to effect the Closing continue not to be satisfied
(and Purchaser has not waived the same) or if Seller does not elect such
extension, and, in either case, such failure of condition precedent is not the
result of Seller's default hereunder, then Purchaser or Seller shall be entitled
to terminate this Agreement by notice thereof to the other party. If this
Agreement is so terminated, then Purchaser shall be entitled to receive the
Deposit (and all accrued interest therein) and neither party shall have any
further obligations hereunder, except those expressly stated to survive the
termination hereof.
Section 3.7. CLOSING OF BOOKS. Seller shall cause the Company and each of
the Subsidiaries to close their books as of the Closing Date for federal, state
and local income tax purposes, as a result of the closing of the transactions
provided for herein. Seller shall be responsible for the filing of all federal,
state and local tax returns of the Company and the Subsidiaries for the period
up to and including the Closing Date, and the payment of all Taxes (as defined
below) required to be paid with such returns. Seller shall provide to Purchaser
copies of all such tax returns for each Subsidiary that is treated as a
corporation for Federal income tax purposes promptly after the date of filing,
together with evidence of payment of all Taxes required to be paid with such
returns, or other evidence reasonably satisfactory to Purchaser of Seller's
compliance with this Section, provided that Seller shall not be required to
disclose or furnish to Purchaser copies of any tax returns of Seller filed in
connection with this transaction. The obligations of Seller under this Section
3.7 shall survive the Closing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as set forth below:
Section 4.1. REPRESENTATIONS.
(a) Seller, the Company and each of the Subsidiaries is a limited
partnership, corporation or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and each has all necessary power and authority to own, lease and
operate its properties and to carry on its business as currently being
conducted. A true, correct and complete list of the organizational documents, as
amended to date, of the Company and each of the Subsidiaries is set forth on
Schedule 4.1(a) (the "Organizational Documents"), and true, correct and complete
charts showing the capital structure of the Company and each of the Subsidiaries
are set forth on Schedule 4.1(b). Seller has delivered to Purchaser a true,
correct and complete copy of each Organizational Document, which copies are in
either paper or electronic form.
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(b) (i) The Interests have been duly authorized and validly issued and
are fully paid and nonassessable, are not subject to any preemptive or
subscription rights and were not issued in violation of any preemptive or
subscription rights. Except for the Interests held directly or indirectly by the
Company, no Person holds any debt or equity interests, securities or other
interests in the Company or any of the Subsidiaries, and there are no
instruments or agreements to issue any of the foregoing to any Person.
(ii) Except with respect to their ownership of the Properties,
neither the Company nor any Subsidiary owns, directly or indirectly, any capital
stock, membership interest, general or limited partnership interest or other
interest in any Person that is not one of the Subsidiaries.
(iii) Each owner of an Interest has or will have on the date of
Closing good and valid title to 100% of the Interest so owned, free and clear of
any Encumbrances (as defined herein) under the terms of this Agreement.
(c) Seller has all necessary power and authority (i) to execute and
deliver this Agreement and the other agreements, documents and instruments to be
executed by Seller in connection with the transactions contemplated hereby (ii)
to perform (or cause to be performed) its obligations hereunder and thereunder
and (iii) to consummate the transactions contemplated hereby and thereby. This
Agreement has been, and each of the documents to be executed and delivered by
Seller pursuant to this Agreement, will be on or prior to the Closing Date, duly
authorized, executed and delivered by Seller, and, assuming the due execution of
this Agreement by Purchaser, is and will be a legal, valid and binding
obligation of Seller, enforceable against it in accordance with its terms,
except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium, receivership and similar
laws affecting the enforcement of creditors' rights generally and to general
equitable principles.
(d) Subject to the completeness and accuracy of Purchaser's
representations in this Agreement, the execution by Seller of this Agreement and
the consummation by Seller of the transactions contemplated hereby (i) will not
violate the provisions of any Organizational Document of Seller, the Company or
any Subsidiary; (ii) will not violate any law, statute, ordinance, code, rule,
regulation, order or decree (collectively, "Laws") of any foreign, federal,
state or local governmental or regulatory body, agency, court or authority
("Governmental Authority") by which Seller, the Company or any Subsidiary is
bound; and (iii) will not result in a violation or breach of, conflict with,
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, payment or acceleration)
under any Lease or Debt Instrument (as defined herein) or result in the creation
of any lien, encumbrance, restriction, security interest or claim of any kind
and character ("Encumbrances") upon any of the Interests or the Properties.
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(e) With respect to each of the Properties:
(i) There are no condemnation or eminent domain proceedings pending
or, to the Knowledge of Seller, threatened;
(ii) To the knowledge of Seller, other than lessees under the
Leases, sublessees, licensees or occupants permitted under the Leases or other
parties who are in possession of space within any of the Properties to which
they are entitled, there are no leases, subleases, licenses, concessions, or
other agreements (including with respect to food services, parking and other
concessions), written or oral, granting to any party or parties the right of use
or occupancy of any portion of the Properties;
(iii) All net rent due under the Leases prior to the date hereof has
been paid, and no payments of rent which under the terms of any Lease would be
due and payable subsequent to the Closing Date have been prepaid.
(iv) To the Knowledge of Seller, it has not received, nor has the
Company or any Subsidiary received, within the eight-month period prior to the
date of this Agreement, written notice of the existence of Violations (as
defined below) with respect to the Company, the Subsidiaries or the Properties.
(f) There is no action, suit or proceeding at law or in equity pending
or, to the Knowledge of Seller, overtly threatened in writing against the
Company or any Subsidiary that (i) questions the validity or enforceability of
this Agreement or the Leases or (ii) if determined adversely could reasonably be
expected to materially adversely affect (x) the ability of Seller to consummate
the transactions contemplated by this Agreement, (y) the use and operation of
any of the Properties or (z) the rights of any of the Subsidiaries to enforce
the Leases. To the Knowledge of Seller, (a) none of the Subsidiaries nor the
Company has been permanently or temporarily enjoined or barred by order,
judgment or decree of or agreement with any Governmental Authority from engaging
in or continuing any conduct or practice in connection with the Properties, and
(b) there is no outstanding order, judgment, ruling, injunction or decree
requiring the Company or any Subsidiary to take, or refrain from taking, action
with respect to the Properties.
(g) The Company and the Subsidiaries do not have and have never had any
employees or employee benefit plans.
(h) The Company engages in and has engaged in no business other than
the ownership of the Interests (and ownership of interests in Affiliates that
will, as of the Closing Date, no longer be owned by the Company). PREFCO II
Limited Partnership, PREFCO Nineteen Limited Partnership, PREFCO Fifteen Limited
Partnership, PREFCO Onze LLC and Xxxxxxx Connecticut Venture Trusts (the
"Property Owners") engage and have engaged in no business other than the
ownership of the Properties owned by such Property Owners. PREFCO II SPE Inc.,
PREFCO Xxx-Neuf LLC, PREFCO Fifteen Holdings Limited Partnership, PREFCO Quinze
LLC and PREFCO Fifteen GP LLC engage and have engaged in no business other than
the ownership of the direct and indirect Interests in the Property Owners.
- 9 -
(i) Except for the indebtedness evidenced by the Debt Instruments,
neither the Company nor any of the Subsidiaries has any Liabilities.
(j) To the Knowledge of Seller, neither Seller, the Company nor any
owner of a direct or indirect beneficial interest in the Company has elected to
classify the Company or any of the Subsidiaries (other than PREFCO II SPE Inc.)
as associations taxable as corporations under Treas. Reg. 301.7701-3.
Section 4.2. SELLER'S KNOWLEDGE. Any and all uses of the phrase, "to the
Knowledge of Seller" or other references to Seller's knowledge in this Agreement
shall mean the actual knowledge of Xxxxxx Xxxxxx or Xxxxxxxx X. Xxxxxxxx
("Seller Knowledge Individuals") as to a fact at the time given without
investigation or inquiry. Purchaser acknowledges that, except in the ordinary
course of their collectively responsibilities as employees or agents of Seller,
Seller Knowledge Individuals have not performed and are not obligated to perform
any investigation or review of any files or other information in the possession
of Seller, or to make any inquiry of any persons, or to take any other actions
in connection with the representations and warranties of Seller set forth in
this Agreement. Neither the actual, present, conscious knowledge of any other
individual or entity, nor the constructive knowledge of Seller Knowledge
Individuals or of any other individual or entity, shall be imputed to Seller
Knowledge Individuals. The individuals specified as Seller Knowledge Individuals
are employees of Seller at a management or supervisory level who would, in the
ordinary course of their collective responsibilities as employees or agents or
other persons, have knowledge of the matters described in the representations
and warranties of Seller in this Agreement that are limited by the Knowledge of
Seller.
Section 4.3. CONDEMNATION. If, prior to the Closing Date, any part of any
of the Properties are taken (other than a temporary taking), or if Seller shall
receive an official notice from any governmental authority having eminent domain
power over any of the Properties of its intention to take, by eminent domain
proceeding, any part of any of the Properties (a "Taking"), neither party shall
have any right to terminate this Agreement, and the parties shall nonetheless
consummate this transaction in accordance with this Agreement, without any
abatement of the Purchase Price or any liability or obligation on the part of
Seller by reason of such Taking; provided, however, that Seller shall, on the
Closing Date, (i) assign and remit to Purchaser the net proceeds of any award or
other proceeds of such Taking which may have been collected by Seller as a
result of such Taking, less all expenses incurred by Seller in connection with
such Taking, or (ii) if no award or other proceeds shall have been collected,
deliver to Purchaser an assignment of Seller's right to any such award or other
proceeds which may be payable to Seller as a result of such Taking. The
provisions of this Section 4.3 supersede any law applicable to any of the
Properties governing the effect of condemnation in contracts for real property.
Section 4.4. CASUALTY. If all or any parts of any of the Properties are
damaged by fire or other casualty occurring on or after the date hereof and
prior to the Closing Date, whether or not such damage affects material parts of
any of the Properties, neither party shall have the right to terminate this
Agreement and the parties shall nonetheless consummate this transaction in
accordance with this Agreement, without any abatement of the Purchase Price or
any liability or obligation on the part of Seller by reason of such destruction
or damage. In such event, Seller shall assign and transfer to Purchaser all
right, title and interest of Seller, if any exists under the terms of the
applicable casualty insurance policies, Leases or Debt Instruments, to make a
claim for and to retain any and all casualty insurance proceeds under the
casualty insurance policies in effect with respect to the applicable Property.
The provisions of this Section 4.4 supersede any law applicable to the
Properties governing the effect of fire or other casualty in contracts for real
property.
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Section 4.5. LEASES AND DEBT INSTRUMENTS.
(a) Schedule 4.5(a) contains a true, correct and complete list of all
material agreements currently binding on the Company or the Subsidiaries (x)
pursuant to which any of the Properties have been leased to tenants, including
all material agreements related thereto (collectively the "Leases"), and (z)
evidencing or securing mortgage or deed-of-trust indebtedness encumbering the
Properties, including pass-through certificates relating thereto (the "Debt
Instruments"), and Seller has delivered to Purchaser a true, accurate, correct
and complete copy of each Lease and Debt Instrument, which copies are in either
paper or electronic form.
(b) Except for the Leases, Debt Instruments, Organizational Documents
and Permitted Encumbrances, neither the Company nor any Subsidiary is a party to
any agreement that will be binding upon the Company, the Subsidiaries or the
Properties on or after the Closing Date.
Section 4.6. ENVIRONMENTAL MATTERS. Except as disclosed in the Phase I
environmental reports listed on Schedule 4.6 (the "Environmental Reports"), to
the Knowledge of Seller neither the Company nor any of the Subsidiaries has
received during the six-month period prior to the date of this Agreement any
written complaint, summons, citation, notice of violation, notice of potential
liability or a written information request from any Governmental Authority with
regard to air emissions, water discharges, noise emissions or "Hazardous
Material" or any other environmental matters, in each case affecting any of the
Properties or any portion thereof.
Section 4.7. ABSENCE OF BANKRUPTCY. Neither the Company nor any of the
Subsidiaries has commenced (within the meaning of any "Bankruptcy Law") a
voluntary case, or consented to the entry of an order for relief against it in
an involuntary case, or consented to the appointment of a custodian of it or for
all or any substantial part of its property, nor to the Knowledge of Seller has
a court of competent jurisdiction entered an order or decree under any
Bankruptcy Law that is for relief against any of the Subsidiaries or the Company
or appointed a custodian for all or any substantial part of their respective
properties.
Section 4.8. TAXES.
(a) All returns, statements, forms and reports required to be filed in
respect of any Tax (each, a "Tax Return") that were required to be filed prior
to the Closing Date by, or with respect to, the Company and each Subsidiary have
been, or will be, filed, and all such Taxes shown to be due on Tax Returns have
been paid. As used herein, "Taxes" means (i) all taxes, charges, fees, levies,
duties, imposts, contributions or assessments imposed by any Governmental
Authority, including all income, gross receipts, value added, ad valorem, asset,
excise, real property, personal property, windfall profit, minimum, franchise,
stamp, licensing, withholding, employment, social security, housing, sales, use,
transfer, unemployment and payroll taxes and any other tax, charge, fee, levy,
duty, impost or assessment, and (ii) any interest, fines, surcharges, penalties
or additions to tax incurred in connection with such taxes, charges, fees,
levies, duties, imposts and assessments.
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(b) To the Knowledge of Seller, there is no action, suit, investigation
or audit being conducted or overtly threatened in writing by any Governmental
Authority with respect to any Tax of the Company or any Subsidiary.
(c) There are no outstanding requests, agreements, consents or waivers
to extend the statute of limitations applicable to the assessment of any Taxes
or deficiencies against the Company or any of the Subsidiaries, and no power of
attorney granted by any of them with respect to any Taxes is currently in force.
Section 0.0.XXXXXXXXX. Neither the Company nor any Subsidiary maintains
any policies or binders of fire, casualty, liability, burglary, fidelity,
workers' compensation, vehicular, health, life and other insurance that relate
to the Properties.
Section 4.10. BROKERS. Other than Xxxxxxx & Xxxxxxxxx, Inc., and its
subsidiary Xxxxxxx and Wakefield Securities, Inc. (collectively the "Broker"),
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Seller. Seller agrees
to pay all fees and commissions due and owing to the Broker in connection with
the transactions contemplated hereunder, pursuant to a separate agreement. The
provisions of this Section 4.10 shall survive the Closing.
Section 4.11. DISCLAIMER OF CERTAIN WARRANTIES. SELLER MAKES NO
REPRESENTATION OR WARRANTY TO PURCHASER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PROPERTIES, THE COMPANY OR THE SUBSIDIARIES OTHER THAN AS EXPRESSLY PROVIDED IN
THIS ARTICLE IV. WITHOUT LIMITING THE FOREGOING, SELLER DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY TO PURCHASER, EXPRESS OR IMPLIED, WITH RESPECT TO (A)
THE INFORMATION SET FORTH IN THE CONFIDENTIAL INFORMATION MEMORANDA DISTRIBUTED
BY OR ON BEHALF OF SELLER IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
HEREBY OR (B) ANY FINANCIAL PROJECTION OR FORECAST RELATING TO THE COMPANY OR
THE OWNERSHIP OF THE PROPERTIES.
Section 4.12. CONDITION OF THE PROPERTIES; REPRESENTATIONS.
(a) PURCHASER EXPRESSLY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, NEITHER SELLER, NOR ANY PERSON ACTING ON BEHALF OF
SELLER, NOR ANY PERSON OR ENTITY WHICH PREPARED OR PROVIDED ANY OF THE MATERIALS
REVIEWED BY PURCHASER IN CONDUCTING ITS DUE DILIGENCE, NOR ANY DIRECT OR
INDIRECT OFFICER, DIRECTOR, PARTNER, MEMBER, SHAREHOLDER, EMPLOYEE, AGENT,
REPRESENTATIVE, ACCOUNTANT, ADVISOR, ATTORNEY, PRINCIPAL, AFFILIATE, CONSULTANT,
CONTRACTOR, SUCCESSOR OR ASSIGN OF ANY OF THE FOREGOING PARTIES (SELLER, AND ALL
OF THE OTHER PARTIES DESCRIBED IN THE PRECEDING PORTIONS OF THIS SENTENCE (OTHER
THAN PURCHASER) SHALL BE REFERRED TO HEREIN COLLECTIVELY AS THE "EXCULPATED
PARTIES") HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY ORAL OR WRITTEN
REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESSED OR IMPLIED, BY OPERATION OF LAW
OR OTHERWISE (INCLUDING WITHOUT LIMITATION WARRANTIES OF HABITABILITY,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE), WITH RESPECT TO ANY
PROPERTY, THE PERMITTED USE OF ANY PROPERTY OR THE ZONING AND OTHER LAWS,
REGULATIONS AND RULES APPLICABLE THERETO OR THE COMPLIANCE BY SUCH PROPERTY
THEREWITH, THE REVENUES AND EXPENSES GENERATED BY OR ASSOCIATED WITH ANY
PROPERTY, OR OTHERWISE RELATING TO ANY PROPERTY OR THE TRANSACTIONS CONTEMPLATED
HEREIN. PURCHASER FURTHER ACKNOWLEDGES THAT ALL MATERIALS WHICH HAVE BEEN
PROVIDED BY ANY OF THE EXCULPATED PARTIES HAVE BEEN PROVIDED WITHOUT ANY
WARRANTY OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO THEIR CONTENT,
SUITABILITY FOR ANY PURPOSE, ACCURACY, TRUTHFULNESS OR COMPLETENESS (EXCEPT THAT
PURCHASER SHALL BE ENTITLED TO RELY ON SUCH REPRESENTATIONS MADE IN THIS
AGREEMENT AS TO MATERIALS BEING TRUE AND COMPLETE COPIES OF THE MATERIALS THEY
PURPORT TO BE), AND PURCHASER SHALL NOT HAVE ANY RECOURSE AGAINST SELLER OR ANY
OF THE OTHER EXCULPATED PARTIES IN THE EVENT OF ANY ERRORS THEREIN OR OMISSIONS
THEREFROM. PURCHASER IS ACQUIRING THE COMPANY BASED SOLELY ON ITS OWN
INDEPENDENT INVESTIGATION INCLUDING INSPECTION OF THE PROPERTIES AND NOT IN
RELIANCE ON ANY INFORMATION PROVIDED BY SELLER, OR ANY OF THE OTHER EXCULPATED
PARTIES, EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH HEREIN. PURCHASER
EXPRESSLY DISCLAIMS ANY INTENT TO RELY ON ANY SUCH MATERIALS PROVIDED TO IT BY
SELLER IN CONNECTION WITH ITS DUE DILIGENCE AND AGREES THAT IT SHALL RELY SOLELY
ON ITS OWN INDEPENDENTLY DEVELOPED OR VERIFIED INFORMATION.
- 12 -
(b) PURCHASER ACKNOWLEDGES AND AGREES THAT IT IS PURCHASING THE
OWNERSHIP INTERESTS IN THE PROPERTIES WITH THE PROPERTIES BEING IN THEIR "AS IS"
CONDITION AND "WITH ALL FAULTS", BASED UPON THE CONDITION OF THE PROPERTIES AS
OF THE DATE OF THIS AGREEMENT, SUBJECT TO WEAR AND TEAR AND SUBJECT TO LOSS BY
CONDEMNATION OR FIRE OR OTHER CASUALTY. PURCHASER ACKNOWLEDGES AND AGREES THAT
ITS OBLIGATIONS UNDER THIS AGREEMENT SHALL NOT BE SUBJECT TO ANY FINANCING
CONTINGENCY OR OTHER CONTINGENCIES OR SATISFACTION OF CONDITIONS, AND PURCHASER
SHALL HAVE NO RIGHT TO TERMINATE THIS AGREEMENT OR RECEIVE A RETURN OF THE
DEPOSIT (OR THE ACCRUED INTEREST THEREON) EXCEPT AS EXPRESSLY PROVIDED FOR IN
SECTION 3.6 HEREOF.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as set forth below:
Section 5.1. ORGANIZATION AND STANDING. Purchaser is an entity duly
organized, validly existing and, where applicable, in good standing under the
laws of its jurisdiction of organization.
Section 5.2. AUTHORIZATION, VALIDITY AND EXECUTION. Subject to receipt of
the approval of the Board of Directors of Capital Lease Funding, Inc., the
controlling owner of Purchaser, which approval Purchaser covenants to obtain
within five (5) Business Days following the date hereof ("Board Approval"),
Purchaser has all necessary corporate or other entity power and authority (a) to
execute and deliver this Agreement and the other agreements, documents and
instruments to be executed and delivered by Purchaser in connection with the
transactions contemplated hereby, (b) to perform (or cause to be performed) its
obligations hereunder and thereunder and (c) to consummate the transactions
contemplated hereby. No other action is necessary for the authorization,
execution, delivery and performance by Purchaser of this Agreement and Purchaser
Documents. This Agreement has been, and each of the agreements, documents and
instruments to be executed and delivered by Purchaser pursuant to this Agreement
will be on or prior to the Closing Date, duly authorized, executed and delivered
by Purchaser, and, assuming the due execution of this Agreement by Seller, this
Agreement is a legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium, receivership and similar laws affecting the
enforcement of creditors' rights generally and to general equitable principles.
Section 5.3.CONSENTS AND APPROVALS; NO VIOLATION. The execution by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby (a) will not violate the provisions of the
certificate of incorporation, the bylaws or any other similar organizational
instrument of Purchaser; (b) will not violate any statute, rule, regulation,
order or decree of any Governmental Authority by which Purchaser is bound; (c),
subject to Purchaser obtaining Board Approval, will not require any consent or
approval of, or the giving of any notice to, or filing with, any Person on or
prior to the Closing Date by or for Purchaser and (d) will not result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under any agreement by which Purchaser is
bound.
Section 5.4. SECURITIES LAW REPRESENTATIONS.
(a) Purchaser is acquiring the Interests in good faith solely for its
own account with the present intention of holding such Interests for purposes of
investment, and Purchaser is not acquiring the Interests with a view to or for
subdivision, distribution, fractionalization or distribution thereof, in whole
or in part, or as an underwriter or conduit to other beneficial owners or
subsequent Purchasers.
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(b) Purchaser acknowledges and understands that the Interests have not
been registered under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act") or qualified under the
securities or "blue sky" laws of applicable states in reliance upon exemptions
from registration or qualification thereunder and the Interests may not be sold,
offered, transferred, assigned, pledged, hypothecated or otherwise disposed of
or encumbered, except in compliance with the Securities Act and such laws.
(c) Purchaser has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of an
investment in the Interests.
(d) Purchaser has received and reviewed carefully information regarding
the Company, the Subsidiaries, the Interests and the Properties, including all
documents listed or referred to in this Agreement or in the Schedules or
Exhibits attached hereto, and has, to the extent it has deemed necessary or
advisable, reviewed the aforementioned information and this Agreement with its
investment, tax, accounting and legal advisors. Purchaser and such advisors have
been given a full opportunity to ask questions of and receive answers from
Seller concerning this transaction and have received or been given access to
such information and documents as are necessary to verify the accuracy of the
information furnished to Purchaser concerning an investment in the Interests as
Purchaser or such advisors have requested.
Section 5.5. AVAILABILITY OF FUNDS. Purchaser has, and will have at the
Closing, sufficient funds available on hand or through existing credit
facilities to enable Purchaser to consummate the transactions contemplated
hereby and to permit Purchaser to perform all of its obligations under this
Agreement.
Section 5.6. SINGLE PURPOSE ENTITY; GUARANTOR. (a) Purchaser shall have
prior to the Closing created Single Purpose Bankruptcy Remote Entities pursuant
to each of the Leases for, and for the purpose of owning and holding indirect
ownership in each of, the Properties located at the following addresses: 000
Xxxxxxxxxxxx Xxxxx, Xxxxxxxx, XX; 0000 Xxxxxx Xxxxxx, Xxxxxxxx, XX; 0000
Xxxxxxxx Xxxxxx, Xxxxx, XX; 0000 Xxxx Xxxxx Xxxx a/k/a 00 Xxxxx Xxxxx, Xxxxx,
XX; 000 Xxxxxx Xxx, Xxxxxxxxxxxxx, XX; 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxx Xxxxx,
XX; and 0 Xxxxxx Xxx, Xxxxxxx, XX.
(b) Purchaser will prior to the Closing provide (i) a Lease guarantor
having a net worth in excess of $50,000,000 for the Properties located at 0000
Xxxxxxxx Xxxxxx, Xxxxx, XX and 0000 Xxxx Xxxxx Xxxx a/k/a 00 Xxxxx Xxxxx, Xxxxx,
XX, (xx) a Lease guarantor with a net worth in excess of $25,000,000 for the
Properties located at 000 Xxxxxx Xxx, Xxxxxxxxxxxxx, XX, 0000 Xxxxxxxx Xxxxxx
Xxxx, Xxxx Xxxxx, XX, 0 Xxxxxx Xxx, Xxxxxxx, XX and (iii) a Lease guarantor with
a net worth in excess of $50,000,000 for the Properties located at 000 Xxxxxx
Xxxx Xxxx, Xxxxxxxxxxxx, XX, 000 X. 00xx Xxxxxx, Xxxxxx, XX, 0000 Xxxxxxxx
Xxxxx, Xxxxxxxxx, XX, 0000 X. Xxxxxxxx, Xxxxxxxxxx, XX, 000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx, XX, 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx, XX, 0000 Xxxxxxx
Xxxx, Xxxxxxxx, XX, 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxx, XX, 000 X. Xxxxxxx Xxxxx,
Xxxxxxx, XX, 000 Xxxxxxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxx, XX and 0000 Xxxxxxxxx
Xxxxxxx, Xxxxxxx, XX.
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Section 5.7. LITIGATION. There is no action, suit or proceeding at law or
in equity against Purchaser or any of its Affiliates pending, or to the
knowledge of Purchaser, threatened which would, if decided adversely to
Purchaser, prohibit the transactions contemplated by this Agreement or which is
reasonably likely to have a material adverse effect on Purchaser's ability to
consummate the transactions contemplated by this Agreement.
Section 5.8. MISCELLANEOUS.
(a) Purchaser hereby represents and warrants to Seller as of the date
hereof and as of Closing that:
(i) Purchaser is not acquiring the Property with the assets of an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), or, if plan assets will be
used to acquire the Property, Purchaser will deliver to Seller at Closing a
certificate containing such factual representations as shall permit Seller and
its counsel to conclude that no prohibited transaction would result from the
consummation of the transactions contemplated by this Agreement. Purchaser is
not a "party in interest" within the meaning of Section 3(3) of ERISA with
respect to any beneficial owner of Seller. (ii) Except with respect to any
claims arising out of any breach of covenants, representations or warranties set
forth in Article IV above, Purchaser, for itself and its agents, affiliates,
successors and assigns, hereby releases and forever discharges Seller, its
employees, agents, affiliates, successors and assigns from any and all rights,
claims and demands at law or in equity, whether known or unknown at the time of
this Agreement, which Purchaser has or may have in the future, arising out of
the physical, environmental, economic or legal condition of the Property,
including, without limitation, any claim for indemnification or contribution
arising under the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.) or any similar federal, state or
local statute, rule or ordinance relating to liability of property owners for
environmental matters.
Section 5.9. VIOLATIONS. Purchaser agrees to purchase all of the Interests
and the ownership of the Company and the Subsidiaries subject to any and all
notes or notices of violations of law, or municipal ordinances, orders,
designations or requirements whatsoever noted in or issued by any federal,
state, municipal or other governmental department, agency or bureau or any other
governmental authority having jurisdiction over the individual Properties (any
of the following, collectively, "Violations"), or any condition or state of
repair or disrepair or other matter or thing, whether or not noted, which, if
noted, would result in a Violation being placed on any of the Properties. Seller
shall have no duty to remove or repair any condition, matter or thing existing,
whether or not noted, which, if noted, would result in a violation being placed
on any of the Properties. Seller shall have no duty to remove or repair any of
the aforementioned Violations, or other conditions, and Purchaser shall accept
the Interest in subject to all such Violations, the existence of any conditions
at any of the Properties which would give rise to such Violations, if any, and
any governmental claims arising from the existence of such Violations, in each
case without any abatement of or credit against the Purchase Price.
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ARTICLE VI
CERTAIN AGREEMENTS
Section 6.1. CONDUCT OF BUSINESS. (a) During the period from the date
hereof to the Closing Date, except (x) as may be approved by Purchaser and (y)
as is otherwise permitted, contemplated or required by this Agreement or by law,
Seller will not permit the Company or any Subsidiary to:
(i) Amend its Organizational Documents or subdivide or reclassify in
any way any of its membership interests, partnership interests or other equity
interests, or change or agree to change in any manner any rights in such
interests;
(ii) Redeem, purchase or otherwise acquire any of the membership
interests, partnership interests or other equity interests of any Subsidiary;
(iii) Issue or sell any membership interests, partnership interests
or other equity interests, or securities convertible into or exchangeable for,
or options, warrants or rights to purchase or subscribe to, such membership,
partnership or equity interests;
(iv) Adopt or amend any collective bargaining agreement or adopt or
amend any Employee Benefit Plan;
(v) Adopt a plan of liquidation or resolutions providing for the
liquidation, dissolution, merger, consolidation or other reorganization;
(vi) Incur or assume any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities, obligations or
indebtedness (whether absolute or contingent and whether or not currently due
and payable);
(vii) Loan or advance any amount to, or sell, transfer or lease any
of the assets of, the Company or any Subsidiary, or enter into any agreement or
arrangement that would be binding upon any of them or upon any portion of the
Properties after Closing;
(viii) Merge or consolidate with, or acquire all or any significant
portion of the assets of any business or any Person, or agree to change in any
material respect the character of its business;
(ix) terminate, amend or modify, or permit the surrender of, any
existing Lease or enter into any new lease or contract that will be binding upon
the Company or any Subsidiary following the Closing Date; or
(x) amend any provision of any existing Debt Instrument.
- 17 -
(b) Seller shall cause the Company and each of the Subsidiaries to
continue to perform and observe in all material respects all of the covenants
and conditions required to be performed by them in the same manner as now being
performed and observed by them in the ordinary course under the Leases and the
Debt Instruments.
Section 6.2. ACCESS. Seller will permit Purchaser and its appropriate
representatives to have reasonable access, prior to the Closing Date, to the
Properties to the extent that Seller has the authority to do so under the
Leases, during normal working hours and upon reasonable notice, and to other
information and employees and personnel of Seller reasonably requested by
Purchaser and related to the ownership of the Properties, as Purchaser
reasonably deems necessary or advisable; provided, that Purchaser will not
unreasonably disrupt the personnel and operations of the Properties; provided,
further, that nothing herein will require Seller (a) to undertake efforts to
re-format, manipulate or reconfigure any information or data regarding the
Properties; (b) to provide Purchaser with access to or copies of information
that must be maintained as confidential in accordance with the terms of a
written agreement with a third party; or (c) to provide Purchaser with access to
or copies of any information that relates to any businesses or operations of
Seller other than its ownership of the Properties; provided, further, that
nothing contained herein will permit Purchaser to conduct any soil, groundwater
or other testing. The access and production of information and materials
provided for in this Section 6.2 will be coordinated by Xxxxxx Xxxxxx, Real
Estate Director of Seller (the "Coordinator"), or by such other person as the
Coordinator designates from time to time and Purchaser, its Affiliates and
Representatives will contact the Coordinator or persons designated by the
Coordinator with respect to coordinating and obtaining such access or
information and materials.
Section 6.3. CONFIDENTIALITY.
(a) Purchaser acknowledges that the information being provided to it in
connection with the transactions contemplated hereby is subject to the terms of
a confidentiality agreement dated October 26, 2006, between Purchaser and Seller
(the "Confidentiality Agreement"), the terms of which are incorporated herein by
reference. Effective upon the Closing, the Confidentiality Agreement will
terminate with respect to information relating solely to the Properties;
provided, however, that Purchaser acknowledges that any and all other
information provided to it by Seller or its representatives or Affiliates
concerning Seller will remain subject to the terms and conditions of the
Confidentiality Agreement after the Closing Date.
(b) For a period of one (1) year after the Closing Date, the parties
will, subject to clause (c) below, keep confidential and will not disclose to
any Person any Confidential Information to the extent it relates to this
transaction, except as may be required by law or by any listing agreement with
or listing rules of a national securities exchange or trading market or
inter-dealer quotation system. For purposes of this Agreement, "Confidential
Information" means any non-public information about this transaction, including
but not limited to the Purchase Price, other than information which is or
becomes generally available to the public. To the extent that any Confidential
Information does not relate exclusively to this transaction, Seller may, without
the consent of Purchaser, disclose such information to any purchaser or
potential purchaser (by any means, including by asset sale, stock sale or
merger) of all or any portion of Seller's business.
- 18 -
(c) Notwithstanding the foregoing, the obligations of confidentiality
contained herein, as they relate to the transactions contemplated by this
Agreement, will not apply to the federal tax structure or federal tax treatment
of such transactions, and each party hereto (and any employee, representative,
or agent of any party hereto) may disclose to any and all persons, the federal
tax structure and federal tax treatment of such transactions. The preceding
sentence is intended to cause such transactions to be treated as not having been
offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under Section 6011 of the Code, and will be construed in a manner
consistent with such purpose. In addition, Confidential Information may be
disclosed by Seller to any investors in Seller or in Affiliates of Seller and to
lenders and other parties providing financing or equity capital to Seller, the
Company or any of their Affiliates.
(d) The provision of this Section 6.3 shall survive the Closing.
Section 6.4. DIRECTORS' AND OFFICERS' INDEMNIFICATION. The provisions of
the Organizational Documents of the Company or the Subsidiaries concerning
elimination of liability and indemnification of directors and officers will not
be amended in any manner that would adversely affect the rights thereunder of
any Person that is as of the date hereof or as of the Closing Date an officer or
director of the Company or any Subsidiary.
Section 6.5. FURTHER ASSURANCES. From and after the Closing, as and when
requested by any party, each party will execute and deliver, or cause to be
executed and delivered, all such documents and instruments and will take, or
cause to be taken, at the requesting party's expense, all such further or other
actions, as such other party may reasonably deem necessary or desirable to
consummate the transactions contemplated by this Agreement.
Section 6.6. PUBLICITY. Prior to the Closing, neither of the parties
hereto will issue any press release or make any other public statement, in each
case relating to or connected with or arising out of this Agreement or the
matters contained herein, without obtaining the prior approval of the other
party, except as may be required by law or by any listing agreement with or
listing rules of a national securities exchange or trading market or
inter-dealer quotation system in which case, the party proposing to issue such
press release or make such public statement will use commercially reasonable
efforts to consult in good faith with the other party before issuing such press
release or making such public statement. The requirements of this Section 6.6
will be in addition to those included in the Confidentiality Agreement.
Section 6.7. RETENTION OF RECORDS.
(a) In order to facilitate the resolution of any claims made against or
incurred by (a) Seller prior to or after the Closing Date or (b) Purchaser after
the Closing Date, or for any other reasonable purpose, each of Purchaser and
Seller shall, upon reasonable notice and subject to Section 6.3 hereof, afford
the officers, employees and authorized agents and representatives of each other
party hereto reasonable access (including the right to make, at such other
party's own expense, photocopies), during normal business hours in connection
with financial reporting and Tax matters (including financial and Tax audits and
Tax contests) from and after the Closing Date, to the books and records of such
party, if any, relating to the Properties or the Interests held by such party
and shall retain such books and records for such purposes pursuant to the normal
document retention policy of Seller or Purchaser, as the case may be.
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(b) Seller will from time to time, upon reasonable advance notice from
Purchaser, provide Purchaser and its representatives with reasonable access to
Seller's financial books and records to enable Purchaser's independent
accountants to prepare and file audited financial statements in compliance with
Rule 3-14 of Regulation S-X of the Securities and Exchange Commission (the
"SEC"), solely with respect to the three Properties leased to Nestle Food
Company (the "Nestle Properties"). Seller agrees to cooperate and to cause its
officers, employees, accountants and other representatives to cooperate with the
reasonable requests of Purchaser and its accountants in connection with the
foregoing, including such cooperation as may be reasonably requested by
Purchaser so that such financial statements can be completed and delivered to
Purchaser within sufficient time to enable Purchaser to satisfy its SEC filing
requirements. In addition, Seller agrees to provide to Purchaser's accountants
with a signed representation letter, in form and content comparable to the form
of representation letter furnished to Seller prior to the date hereof,
containing such statements reasonably requested by such accountants to enable
them to render an opinion on the aforesaid financial statements as they relate
to the Nestle Properties. Purchaser shall use all commercially reasonable
efforts to cause its accountants to complete their work on such financial
statements prior to the Closing Date, as such work relates to the Nestle
Properties, and to review and accept prior to the Closing the aforesaid
representation letter being requested of Seller. Purchaser shall reimburse
Seller promptly upon request for all reasonable out-of-pocket costs and expenses
incurred by Seller in so cooperating with Purchaser pursuant to this paragraph.
The obligations of the parties under this paragraph shall survive the Closing.
Section 6.8. CHANGE OF NAME OF COMPANY FOLLOWING THE CLOSING. Within sixty
(60) days from the Closing Date, Purchaser shall cause the Company to change its
name so that its new name does not contain the term "EntreCap", or any terms
confusingly similar thereto. Purchaser shall promptly notify Seller in writing,
pursuant to the provisions of Section 10.4 below, as to the new name of the
Company once adopted. Purchaser shall make all filings and submissions, at its
sole cost and expense, to effectuate the aforementioned name changes.
Section 6.9. NO IMPLIED REPRESENTATIONS AND WARRANTIES. Purchaser hereby
acknowledges and agrees that Seller is not making any representation or warranty
whatsoever, express or implied, except those representations and warranties of
Seller explicitly set forth in this Agreement.
Section 6.10. THIRD PARTY NOTICES AND CONSENTS. Each of Seller and
Purchaser shall give (or will cause their respective Subsidiaries to give) any
notices to third persons, and use, and cause their respective subsidiaries to
use, their commercially reasonable efforts without the expenditure of funds to
obtain any consents from third persons necessary to consummate the transactions
contemplated by this Agreement.
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Section 6.11. TENANT ESTOPPELS.
(a) Seller shall request a tenant estoppel certificate in the form of
Exhibit E (or such other form as is provided in the applicable tenant's Lease)
from each of the lessees under the Leases (individually a "Tenant Estoppel" and
collectively, "Tenant Estoppels"), and Seller shall use commercially reasonably
efforts to obtain a Tenant Estoppel from each of such lessees prior to the
Closing Date. Tenant Estoppels executed by lessees shall be substantially in the
form of Exhibit E or in such other form as is provided in the terms of the
lessees' respective Leases (subject to (a) non-material modification thereof,
(b) such lessee making note of items which constitute Permitted Encumbrances or
items which Seller otherwise agrees to discharge and (c) limiting its statements
"to lessee's knowledge" (or words of similar import)); provided, however, that
if any lessee is required or permitted under the terms of its Lease to provide a
different form of estoppel, provide less information or otherwise make different
statements in a certification of such nature than are set forth on Exhibit E,
then Purchaser shall accept any modifications made to such form of estoppel
certificate to the extent that such modifications to the form are consistent
with the minimum requirements set forth in such lessee's Lease. In undertaking
commercially reasonably efforts to obtain Tenant Estoppels, Seller shall not be
required to expend any money, provide any financial accommodations or commence
any proceeding or litigation.
(b) It shall be a condition precedent to Purchaser's obligation to
close hereunder that Seller shall have delivered executed Tenant Estoppels under
the Leases made by not less than three of the five tenants named in Schedule
4.5(a). If Seller is unable to obtain the required number of Tenant Estoppels
prior to the Closing Date, then the Closing Date shall be automatically extended
until a date that is two (2) Business Days following receipt of the required
number of Tenant Estoppels, but in no event later than 30 days after the
expiration of the Inspection Period. If Seller has not obtained the required
number of Tenant Estoppels on or before such extended Closing Date, then
Purchaser shall be entitled to terminate this Agreement and receive a return of
the Deposit (together with all interest thereon) or waive such requirement and
proceed to Closing. In addition, if Seller shall have obtained less than all
(but at least the required number) of Tenant Estoppels prior to the Closing
Date, as the Closing Date may have been extended, then Seller shall provide a
landlord's estoppel for each Lease for which a Tenant Estoppel shall not have
been obtained, which landlord's estoppel shall conform to the form set forth in
Exhibit E. In addition, upon Purchaser's receipt after the Closing of a Tenant
Estoppel from a tenant for which a landlord's estoppel certificate was furnished
by Seller at the Closing, then such landlord's estoppel shall be deemed null and
void and of no further force and effect and shall be replaced by such Tenant
Estoppel.
Section 6.12. LENDER ESTOPPELS. Seller shall request an estoppel
certificate in the form substantially similar to the form annexed hereto as
Exhibit F (collectively the "Lender Estoppels") from each of the lenders who
have outstanding mortgage loans or who hold mortgages or deeds of trust
encumbering any of the Properties. Seller shall be obligated to expend only
commercially reasonable efforts to obtain the Lender Estoppels; provided,
however, if Seller is unable to obtain all Lender Estoppels prior to the Closing
Date, then the Closing Date shall be automatically extended until a date that is
two (2) Business Days following receipt of all Lender Estoppels, but in no event
later than 30 days after the expiration of the Inspection Period. If Seller has
not obtained all Lender Estoppels on or before such extended Closing Date, then
Purchaser shall be entitled to terminate this Agreement and receive a return of
the Deposit (together with all interest thereon) or waive such requirement and
proceed to Closing.
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Section 6.13. SPECIAL PROVISIONS REGARDING PREFCO II LIMITED PARTNERSHIP.
(a) In accordance with Article 5 of that certain Promissory Note
executed by Prefco II Limited Partnership ("Prefco Borrower") in favor of Bear
Xxxxxxx Funding, Inc. ("Lender") and secured by that certain Leasehold Mortgage
and Security Agreement (the "Security Agreement"), Prefco Borrower shall notify
Lender (the "Defeasance Notice") of the intent of Prefco Borrower to obtain a
release of that certain real property located at 0000 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxxxx Xxxxxx from the lien of the Security Agreement (the "Defeasance"). The
Defeasance Notice shall be accompanied by any deposits required of Lender or
servicer, which deposits shall be paid and/or advanced by Purchaser. After
delivery of the Defeasance Notice, Purchaser shall be responsible for
coordinating all matters related to the Defeasance with Lender and servicer;
provided, however, that the Prefco Borrower (and Seller, as necessary) will
cooperate fully in facilitating the Defeasance, including the execution and
delivery of any certificates that may be required by Lender. All fees, expenses,
costs and charges (including, without limitation, reasonable attorneys',
accountants' and consultants' fees and disbursements and rating agency fees and
expenses, if any) incurred by Lender or servicer in connection with the
Defeasance (including the actual amount required to purchase U.S. Government
Securities used to secure the release of the lien of the Security Agreement and
any premium charged for said securities) shall be the responsibility and
obligation of Purchaser.
(b) The provisions of this Section 6.13 shall survive the Closing.
ARTICLE VII
CONDITIONS TO CLOSING
Section 7.1. CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
conditioned upon the satisfaction or waiver, at or prior to the Closing, of the
following conditions, provided, however, that Purchaser may not rely on the
failure of any of the following conditions in this Section 7.1 to be satisfied
if such failure was caused by Purchaser's failure to act in good faith or to use
commercially reasonable efforts to cause the Closing to occur.
(a) The representations and warranties set forth in Article IV hereof
will be true and correct in all respects as if made on and as of the Closing
Date (except to the extent that such representations and warranties expressly
relate to a specific date, in which case such representations and warranties
will be true and correct as of such date), except for such inaccuracies in,
breaches of and omissions from such representations and warranties as would not
have, or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(b) Title to the Properties shall be subject only to the Permitted
Encumbrances.
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(c) The deliveries described in Section 3.3(a) shall have been received
by Purchaser substantially in the form reasonably satisfactory to Purchaser.
(d) Seller shall have in all material respects performed all
obligations required to be performed by it under this Agreement on and prior to
the Closing Date.
Section 7.2. CONDITIONS TO SELLER'S OBLIGATIONS. The obligation of Seller
to consummate the transactions contemplated by this Agreement is conditioned
upon the satisfaction or waiver, at or prior to the Closing, of the following
conditions, provided, however, that Seller may not rely on the failure of any of
the following conditions in this Section 7.2 to be satisfied if such failure was
caused by Seller's failure to act in good faith or to use commercially
reasonable efforts to cause the Closing to occur.
(a) The representations and warranties set forth in Article V hereof
will be true and correct in all material respects as if made on and as of the
Closing Date.
(b) The deliveries described in Section 3.3(b) shall have been received
by Seller substantially in the form reasonably satisfactory to Seller.
(c) Purchaser shall have in all material respects performed all
obligations required to be performed by it under this Agreement on and prior to
the Closing Date, including payment of the Purchase Price.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
Section 8.1. SURVIVAL OF REPRESENTATIONS. The representations and
warranties made in this Agreement will terminate six (6) months from the date
hereof; provided, however, that any claims of a breach of any such surviving
representation or warranty made in good faith in writing and received by Seller
prior to such termination date will survive such date to the extent of the facts
alleged in such claim. The covenants and agreements contained herein to be
performed or complied with after the Closing (other than the covenant and
agreement to indemnify against breaches of certain representations and
warranties, which will survive only until the expiration of the underlying
representation and warranty) will survive the execution and delivery of this
Agreement, the Closing and the consummation of the transactions contemplated
hereby.
Section 8.2. INDEMNIFICATION BY SELLER.Seller will indemnify Purchaser,
and its respective officers, directors, employees and agents against, and hold
them harmless from, any and all loss, liability, assessment, fine, penalty,
claim, damage, expense or cost of mitigation actually suffered or paid
(including reasonable legal fees and expenses) ("Damages") arising from (i) any
misrepresentation or breach of warranty by Seller in this Agreement or (ii) any
breach of covenant or agreement made or to be performed by Seller pursuant to
this Agreement, provided that, with respect to indemnification by Seller
pursuant to this Section, (i) Seller shall not be liable unless the amount of
Damages with respect to all misrepresentations or breaches under this Agreement
exceeds $100,000.00, and then only to the extent of such excess, and (ii)
Seller's maximum liability for all such misrepresentations or breaches shall not
exceed $5,000,000.00. Any claim by Purchaser based on a misrepresentation or
breach by Seller must be made not later than 6 months after the actual Closing
Date hereunder, in the manner prescribed by this Agreement, and Seller's
liability for any misrepresentation or breach under this Agreement shall expire
and terminate on the date following the date that is six (6) months after the
Closing Date hereunder. The provisions of this Section 8.2 shall not be
applicable to any claim by Purchaser under Section 3.4(a) hereof.
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Section 8.3. INDEMNIFICATION BY PURCHASER.
(a) Purchaser will indemnify Seller and its respective officers,
directors, employees and agents against, and hold them harmless from, all
Damages arising from (i) any misrepresentation or breach of warranty of
Purchaser in this Agreement and (ii) any breach of covenant or agreement made or
to be performed by Purchaser pursuant to this Agreement. Any claim by Seller
based on a misrepresentation or breach by Purchaser must be made not later than
6 months after the actual Closing Date hereunder, in the manner prescribed by
this Agreement, and Purchaser's liability for any misrepresentation or breach
under this Agreement shall expire and terminate on the date following the date
that is six (6) months after the Closing Date hereunder. The provisions of this
Section 8.3 shall not be applicable to any claim by Seller under Section 3.4(b)
hereof.
Section 8.4. LIMITS ON INDEMNIFICATION.
(a) In case any event occurs which would otherwise entitle either party
to assert a claim for indemnification hereunder, no Damages will be deemed to
have been sustained by such party to the extent of (i) any Tax savings
realizable by such party with respect thereto, or (ii) any proceeds received or
to be received by such party from any insurance policies with respect thereto.
(b) An Indemnifying Party will not be liable under this Article VIII
for (i) any Damage which represents the cost of repairs, replacements or
improvements insofar as they enhance the value of the repaired, replaced or
improved asset above its value on the Closing Date, or which represents the cost
of repair or replacement in excess of the lowest reasonable cost of such repair
or replacement, or (ii) consequential damages, special damages, incidental
damages, indirect damages, punitive damages, lost profits or similar items.
(c) The parties acknowledge and agree that if Purchaser or Seller has
knowledge of a failure of any condition set forth in Article VII, respectively,
or of any breach by the other party of any representation, warranty or covenant
contained in this Agreement, and such party proceeds with the Closing, such
party will be deemed to have waived such condition or breach and such party and
its successors, assigns and Affiliates will not be entitled to xxx for damages
or to assert any other rights or remedy for any losses arising from any matters
relating to such condition or breach, notwithstanding anything to the contrary
contained herein or in any certificate delivered pursuant hereto. Purchaser
shall be deemed to have knowledge of any information contained in any document
delivered to Purchaser in connection with this Agreement.
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(d) Each Indemnified Party will be obligated in connection with any
claim for indemnification under Section 8.2 or Section 8.3 to use commercially
reasonable efforts to mitigate Damages upon and after becoming aware of any
event which could reasonably be expected to give rise to such Damages.
Section 8.5. PROCEDURE FOR INDEMNIFICATION. Any party seeking
indemnification under this Article VIII (an "Indemnified Party") will give each
party from whom indemnification is being sought (each, an "Indemnifying Party")
notice of any matter for which such Indemnified Party is seeking
indemnification, stating the amount of the Damages, if known, and method of
computation thereof, and containing a reference to the provisions of this
Agreement in respect of which such right of indemnification is claimed or
arises. The obligations of an Indemnifying Party under this Article VIII with
respect to Damages arising from any claims of any third party which are subject
to the indemnification provided for in this Article VIII (collectively,
"Third-Party Claims") will be governed by and contingent upon the following
additional terms and conditions: if an Indemnified Party receives, after the
Closing Date, initial notice of any Third-Party Claim, the Indemnified Party
will give the Indemnifying Party notice of such Third-Party Claim within such
time frame as necessary to allow for a timely response and in any event within
30 calendar days of the receipt by the Indemnified Party of such notice;
provided, however, that the failure to provide such timely notice will not
release the Indemnifying Party from any of its obligations under this Article
VIII except to the extent the Indemnifying Party is prejudiced by such failure.
The Indemnifying Party will be entitled to assume and control the defense of
such Third-Party Claim at its expense and through counsel of its choice if it
gives notice of its intention to do so to the Indemnified Party within 45
calendar days of the receipt of such notice from the Indemnified Party;
provided, however, that if there exists a conflict of interest that would make
it inappropriate in the reasonable judgment of the Indemnified Party (upon and
in conformity with advice of counsel) for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party will be
entitled to retain one counsel (plus one local counsel, if necessary),
reasonably acceptable to the Indemnifying Party, at the expense of the
Indemnifying Party, provided that the Indemnified Party and such counsel will
contest such Third-Party Claims in good faith. In the event the Indemnifying
Party exercises the right to undertake any such defense against any such
Third-Party Claim as provided above, the Indemnified Party will cooperate with
the Indemnifying Party in such defense and make available to the Indemnifying
Party, at the Indemnifying Party's expense, all witnesses, pertinent records,
materials and information in the Indemnified Party's possession or under the
Indemnified Party's control relating thereto as is reasonably required by the
Indemnifying Party. Similarly, in the event the Indemnified Party is, directly
or indirectly, conducting the defense against any such Third-Party Claim, the
Indemnifying Party will cooperate with the Indemnified Party in such defense and
make available to the Indemnified Party, at the Indemnifying Party's expense,
all such witnesses, records, materials and information in the Indemnifying
Party's possession or under the Indemnifying Party's control relating thereto as
is reasonably required by the Indemnified Party. The Indemnifying Party will
not, without the written consent of the Indemnified Party (which will not be
unreasonably withheld or delayed), settle or compromise any Third-Party Claim or
consent to the entry of any judgment which does not include as an unconditional
term thereof the delivery by the claimant or plaintiff to Indemnified Party of a
written release from all liability in respect of such Third-Party Claim. No
Third-Party Claim which is being defended in good faith by the Indemnifying
Party or which is being defended by the Indemnified Party as provided above in
this Section 8.5 will be settled by the Indemnified Party without the written
consent of the Indemnifying Party.
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Section 8.6. EXCLUSIVE REMEDY. After the Closing Date, the indemnification
provided for in this Article VIII will constitute the sole remedy of any party
to the Agreement with respect to breaches by any other party to the Agreement of
any of the representations, warranties, agreements or covenants contained in the
Agreement.
ARTICLE IX
TERMINATION
Section 9.1. TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated herein may be abandoned at any time prior to the Closing:
(a) By the mutual consent of Seller and Purchaser;
(b) By either Seller or Purchaser:
(i) If the Closing will not have occurred on or prior to [May 31],
2007; or
(ii) If any Governmental Authority will have issued an order, decree
or ruling or taken any other action, in each case permanently restraining,
enjoining or otherwise prohibiting the material transactions contemplated by
this Agreement and such order, decree, ruling or other action will have become
final and non-appealable; provided, however, that the party seeking termination
pursuant to this clause (b) of this Section 9.1 is not in breach in any material
respect of any of its representations, warranties, covenants or agreements
contained in this Agreement;
(c) By Seller in the event of a material breach of any covenant or
agreement to be performed or complied with by Purchaser pursuant to the terms of
this Agreement or of any representation or warranty of Purchaser contained in
this Agreement, which breach (i) has continued without cure for a period of 30
days following written notice thereof by Seller to Purchaser or if such breach
cannot be cured and (ii) would result in a condition to Closing set forth in
Section 7.2 of this Agreement not being satisfied (which condition has not been
waived by Seller in writing); or
(d) By Purchaser in the event of a material breach of any covenant or
agreement to be performed or complied with by Seller pursuant to the terms of
this Agreement or of any representation or warranty of Seller contained in this
Agreement, which breach (i) has continued without cure for a period of 30 days
following written notice thereof by Purchaser to Seller or if such breach cannot
be cured and (ii) would result in a condition to Closing set forth in Section
7.1 of this Agreement not being satisfied (which condition has not been waived
by Purchaser in writing).
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Section 9.2. EFFECT OF TERMINATION. In the event that this Agreement is
terminated by Seller or Purchaser pursuant to Section 9.1, written notice
thereof will forthwith be given to the other and all further obligations of the
parties hereto under this Agreement (other than pursuant to Sections 3.5, 3.6,
6.4, this Section 9.2 and Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.9 and
10.11, all of which will continue in full force and effect) will terminate
without further action by any party and without liability or other obligation of
either party to the other party hereunder; provided, however, that no party will
be released from liability hereunder if this Agreement is terminated and the
transactions abandoned by reason of any willful breach of this Agreement.
ARTICLE X.
MISCELLANEOUS
Section 10.1. GOVERNING LAW; CONSENT TO JURISDICTION.
(a) The interpretation and construction of this Agreement, and all
matters relating hereto, will be governed by the laws of the State of New York
applicable to contracts made and to be performed entirely within the State of
New York without giving effect to any conflict of law provisions thereof.
(b) Each of the parties agrees that any legal action or proceeding with
respect to this Agreement may be brought in the federal and state courts located
in the State of New York, and, by execution and delivery of this Agreement, each
party hereto hereby irrevocably submits itself in respect of its property,
generally and unconditionally, to the exclusive jurisdiction of the aforesaid
courts in any legal action or proceeding arising out of this Agreement. Each of
the parties hereto hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in the preceding sentence. Each party consents to process
being served in any such action or proceeding by the mailing of a copy thereof
to the address set forth in Section 10.3 below its name and agrees that such
service upon receipt will constitute good and sufficient service of process or
notice thereof. Nothing in this paragraph will affect or eliminate any right to
serve process in any other manner permitted by law.
Section 10.2. WAIVER OF JURY TRIAL. The parties hereto hereby irrevocably
waive their respective rights to trial by jury of any cause of action, claim,
counterclaim or cross-complaint in any action or other proceeding brought by any
party hereto against any other party or parties hereto with respect to any
matter arising out of, or in any way connected with or related to, this
Agreement or any portion thereof, whether based upon contractual, statutory,
tortious or other theories of liability. Each party represents that it has
consulted with counsel regarding the meaning and effect of the foregoing waiver
of its right to a jury trial.
Section 10.3. NOTICES. Any notice or other communications required or
permitted hereunder will be sufficiently given if delivered in person,
transmitted via facsimile (but only if followed by transmittal by recognized
overnight courier or hand delivery), or sent by registered or certified mail,
postage prepaid, or recognized overnight courier service addressed as follows:
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(a) If to Purchaser: Caplease, LP
1065 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Wolf, Block, Xxxxxx & Xxxxx-Xxxxx, LLP
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) If to Seller: EntreCap Financial LLC
0 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxxx, President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address or number as will be furnished in writing by any such
person, and such notice or communication will be deemed to have been given (a)
as of the date so personally delivered or transmitted via facsimile, (b) on the
third Business Day after the mailing thereof or (c) on the first Business Day
after delivery by recognized overnight courier service.
Section 10.4. ENTIRE AGREEMENT; AMENDMENT. This Agreement, including the
Exhibits, Schedules and other documents referred to herein which form a part
hereof, and the Confidentiality Agreement, contain the entire understanding of
the parties hereto with respect to the subject matter contained herein and
therein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter other than the
Confidentiality Agreement. This Agreement may not be amended except by a written
instrument executed by the parties hereto.
Section 10.5. PARTIES IN INTEREST. This Agreement may not be transferred,
assigned, pledged or hypothecated by any party hereto (whether by operation of
law or otherwise) without the prior written consent of the other party. This
Agreement will be binding upon and will inure to the benefit of the parties
hereto and their respective successors and permitted assigns.
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Section 10.6. INTERPRETATION. The words "HEREOF," "HEREIN" and "HEREWITH"
and words of similar import will, unless otherwise stated, be construed to refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Paragraph, Exhibits and Schedule references are
to the Articles, Sections, Paragraphs, Exhibits and Schedules of this Agreement
unless otherwise specified. The table of contents and headings contained in this
Agreement are for reference purposes only and will not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "INCLUDE,"
"INCLUDES," "INCLUDING" or similar expressions are used in this Agreement, they
will be understood be followed by the words "WITHOUT LIMITATION." The words
describing the singular number will include the plural and vice versa, and words
denoting any gender will include all genders and words denoting natural persons
will include corporations and partnerships and vice versa. The phrase "MADE
AVAILABLE" in this Agreement will mean that the information referred to has been
made available if requested by the party to whom such information is to be made
available. The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event of an ambiguity or question of intent or
interpretation arises, this Agreement will be construed as if drafted jointly by
the parties and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
Section 10.7. CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) "AFFILIATE" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person.
(b) "BUSINESS DAY" shall mean every day other than Saturdays, Sundays,
all days observed by the federal or New York State government as legal holidays
and all days on which commercial banks in New York State are required by law to
be closed.
(c) "DEBT INSTRUMENTS" shall mean instruments and documents evidencing
or securing the mortgage or deed-of trust indebtedness encumbering the
Properties as set forth on Schedule 4.5(a).
(d) "ENVIRONMENTAL CLAIMS" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, notice of violation,
judicial or administrative proceeding or judgment from any governmental agency,
department, bureau, office or other governmental authority, or any third party
involving violations of Environmental Laws.
(e) "ENVIRONMENTAL LAW" means any applicable federal, state or local
law, ordinance, rule, regulation, requirement, binding guideline, code,
resolution, order or decree (including consent decrees and administrative
orders) in effect on or prior to the date of this Agreement which regulates the
use, generation, handling, storage, treatment, transportation, decontamination,
clean-up, removal, encapsulation, enclosure, abatement or disposal of any
hazardous material, including the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., the Toxic
Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33
U.S.C. Sections 1251, et seq., the Hazardous Material Transportation Act, 49
U.S.C. Section 5101, the Clean Air Act, 42 U.S.C. Sections 7401, et seq., their
state analogues and any other federal, state or local statute, law, ordinance,
resolution, code, rule, regulation, order or decree regulating, relating to, or
imposing liability or standards of conduct concerning any hazardous material.
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(f) "HAZARDOUS MATERIALS"- shall include (a) any chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical, hazardous waste, medical waste, biohazardous or infectious waste under
Environmental Laws; (b) petroleum, petroleum-based or petroleum-derived
products; (c) polychlorinated biphenyls; (d) radioactive or explosive materials;
and (e) friable or damaged asbestos-containing materials.
(g) "LIABILITIES" means claims, debts, liabilities, obligations, duties
and responsibilities of any kind and description, whether absolute or
contingent, monetary or non-monetary, direct or indirect, known or unknown or
matured or unmatured, or of any other nature.
(h) "MATERIAL ADVERSE EFFECT" means any change, effect, event or
occurrence that is materially adverse to, or has a materially adverse effect on,
the business, properties, assets, financial condition or results of operations
of the Company, taken as a whole, other than any change, effect, event or
occurrence resulting from (i) general economic, political, financial, or market
conditions, (ii) conditions or circumstances generally affecting the industries
in which the Company operates and not having a disproportionate effect on the
Company or the Properties, (iii) any natural disaster, any act of terrorism,
sabotage, military action or war (whether or not declared) or any other social
or political disruption, in each case including any escalation or worsening
thereof, (iv) the announcement of the transactions contemplated herein by
Purchaser or other communication by Purchaser of its plans or intentions with
respect to the Company or the Properties, or (v) any matter of which Purchaser
has actual knowledge on the date hereof.
(i) "PERMITTED ENCUMBRANCES" means all matters shown in the Title
Commitments with respect to which Purchaser fails to object prior to the
expiration of the Inspection Period.
(j) "PERSON" means any individual, trustee, firm, corporation,
partnership, limited liability company, trust, joint venture, bank, Governmental
Authority, trust or other organization or entity.
(k) "TITLE COMMITMENT" means the commitment from the Title Company for
an "extended coverage" owner's policy of title insurance for each of the
Properties.
(l) "TITLE COMPANY" means First American Title Insurance Company of New
York.
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Section 10.8. DISCLOSURE SCHEDULES. Unless otherwise defined in the
schedules attached hereto, all capitalized terms used in such schedules will
have the meanings ascribed to them in this Agreement, and all section references
in the schedules refer to the corresponding section hereof. Any attachments to
the schedules form an integral part of the schedules and are incorporated by
reference for all purposes as if set forth fully therein. The headings contained
in the schedules are for convenience of reference purposes only and will not
affect in any way the meaning or interpretation of this Agreement or the
schedules. No reference to or disclosure of any item or other matter in the
schedules will be construed as an admission or indication that such item or
other matter is material or that such item or other matter is required to be
referred to or disclosed in the schedules. The exceptions, modifications,
descriptions and disclosures in any schedule are made for all relevant purposes
of this Agreement and are exceptions by Seller to all representations and
warranties set forth in this Agreement or in any instrument delivered pursuant
to this Agreement to the extent applicable thereto.
Section 10.9. WAIVER. Except as otherwise provided in this Agreement, any
failure of either of the parties to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition will not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
Section 10.10. SEVERABILITY. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any Person or circumstance is held invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction, such invalidity, illegality
or unenforceability will not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.
Section 10.11. COUNTERPARTS; DELIVERY BY FACSIMILE. This Agreement may be
executed in two or more counterparts, all of which taken together will
constitute one instrument, and will become effective when one or more such
counterparts have been signed by each of the parties and delivered to the other
party. Executed signature pages delivered by facsimile will be treated in all
respects as original signatures.
(a) The headings of the various sections of this Agreement have been
inserted only for the purposes of convenience, and are not part of this
Agreement and shall not be deemed in any manner to modify, explain, expand or
restrict any of the provisions of this Agreement. The provisions of this Article
X shall survive the Closing or the termination hereof.
Section 10.12. PARTIES; ASSIGNMENT AND RECORDING.
(a) This Agreement and the various rights and obligations arising
hereunder shall inure to the benefit of and be binding upon Seller and Purchaser
and their respective successors and permitted assigns; provided that none of the
representations or warranties made by Seller hereunder shall inure to the
benefit of any person or entity that may, after the Closing Date, succeed to
Purchaser's interest in the Properties, other than an assignee permitted
pursuant to Paragraph (b) of this Section.
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(b) Purchaser may not assign or otherwise transfer this Agreement or
any of its rights or obligations hereunder or any of the direct or indirect
ownership interests in Purchaser, without first obtaining Seller's consent
thereto; provided, however, that Purchaser may assign this Agreement in whole or
in part prior to the Closing to any Affiliate of Purchaser, upon reasonable
advance notice to Seller of any such assignment.
(c) Neither this Agreement nor any memorandum hereof may be recorded
without first obtaining Seller's consent thereto.
Section 10.13. FURTHER ASSURANCES.
Seller and Purchaser will do, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, assignments, notices, transfers and
assurances as may be reasonably required by the other party, for the better
assuring, conveying, assigning, transferring and confirming unto Purchaser the
Property and for carrying out the intentions or facilitating the consummation of
this Agreement. The provisions of this Section 10.13 shall survive the Closing.
Section 10.14. THIRD PARTY BENEFICIARY.
This Agreement is an agreement solely for the benefit of Seller and
Purchaser (and their permitted successors and/or assigns). No other person,
party or entity shall have any rights hereunder nor shall any other person,
party or entity be entitled to rely upon the terms, covenants and provisions
contained herein. The provisions of this Section 10.14 shall survive the Closing
or the termination hereof.
Section 10.15. EXCULPATION. (a) Purchaser agrees that it does not have and
will not have any claims or causes of action against any disclosed or
undisclosed officer, director, employee, trustee, shareholder, partner,
principal, parent, subsidiary or other affiliate of Seller, including, without
limitation, any officer, director, employee, trustee, shareholder, partner or
principal of any such parent, subsidiary or other affiliate (collectively,
"Seller's Affiliates"), arising out of or in connection with this Agreement or
the transactions contemplated hereby. Purchaser agrees to look solely to Seller
and its assets for the satisfaction of any liability or obligation arising under
this Agreement or the transactions contemplated hereby, or for the performance
of any of the covenants, warranties or other agreements contained herein, and
further agrees not to xxx or otherwise seek to enforce any personal obligation
against any of Seller's Affiliates with respect to any matters arising out of or
in connection with this Agreement or the transactions contemplated hereby.
Without limiting the generality of the foregoing provisions of this Section
10.15(a), Purchaser hereby unconditionally and irrevocably waives any and all
claims and causes of action of any nature whatsoever it may now or hereafter
have against Seller's Affiliates, and hereby unconditionally and irrevocably
releases and discharges Seller's Affiliates from any and all liability
whatsoever which may now or hereafter accrue in favor of Purchaser against
Seller's Affiliates, in connection with or arising out of this Agreement or the
transactions contemplated hereby.
(b) Seller agrees that it does not have and will not have any claims or
causes of action against any disclosed or undisclosed officer, director,
employee, trustee, shareholder, partner, principal, parent, subsidiary or other
affiliate of Purchaser, or any officer, director, employee, trustee,
shareholder, partner or principal of any such parent, subsidiary or other
affiliate (collectively, "Purchaser's Affiliates"), arising out of or in
connection with this Agreement or the transactions contemplated hereby. Seller
agrees to look solely to Purchaser and its assets for the satisfaction of any
liability or obligation arising under this Agreement or the transactions
contemplated hereby, or for the performance of any of the covenants, warranties
or other agreements contained herein, and further agrees not to xxx or otherwise
seek to enforce any personal obligation against any of Purchaser's Affiliates
with respect to any matters arising out of or in connection with this Agreement
or the transactions contemplated hereby. Without limiting the generality of the
foregoing provisions of this Section 10.15(b), Seller hereby unconditionally and
irrevocably waives any and all claims and causes of action of any nature
whatsoever it may now or hereafter have against Purchaser's Affiliates, and
hereby unconditionally and irrevocably releases and discharges Purchaser's
Affiliates from any and all liability whatsoever which may now or hereafter
accrue in favor of Seller against Purchaser's Affiliates, in connection with or
arising out of this Agreement or the transactions contemplated hereby.
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The provisions of this Section 10.15 shall survive the termination of
this Agreement and the Closing.
* * *
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IN WITNESS WHEREOF, each of the parties has caused this Membership
Interests Purchase Agreement to be duly executed, all as of the date first above
written.
ENTRECAP FINANCIAL LLC
By: /s/ W. Xxxxx Xxxxxxxxx
--------------------------------
Name: W. Xxxxx Xxxxxxxxx
Title: Vice President
CAPLEASE LP
a Delaware limited partnership
by: CLF OP General Partner LLC
a Delaware limited liability company
its general partner
by: Capital Lease Funding, Inc.
a Maryland corporation
its sole member
By: /s/ Xxxx X. XxXxxxxx
--------------------------------
Name: Xxxx X. XxXxxxxx
Title: Chief Executive Officer
