ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement") is made and
delivered this 25th day of March, 1998 by Equity Parsippany Venture, a general
partnership organized under the laws of the State of Colorado (hereinafter
referred to as "ASSIGNOR"), to Xxxx-Xxxx Realty Acquisition Corp., a New Jersey
corporation (hereinafter referred to as "ASSIGNEE"), pursuant to the Purchase
and Sale Agreement dated as of March 25, 1998 (the "Purchase Agreement") between
ASSIGNOR and ASSIGNEE, providing for, among other things, the sale by ASSIGNOR
to ASSIGNEE of its entire interest (the "Partnership Interest") in PRUBETA-3, a
general partnership organized under the laws of the State of New Jersey (the
"Partnership").
WITNESSETH
Whereas, ASSIGNEE and the Partnership have entered into a Purchase and
Sale Agreement dated February 18, 1998 as amended by a letter agreement dated
_________, 1998 and a second amendment dated the date hereof (the "Second
Amendment") (the "Business Campus Contract") pursuant to which ASSIGNEE
purchased the property commonly known as "The Prudential Business Campus" and
more particularly described in the Business Campus Contract, the closing of
which occurred immediately prior to the execution of this Agreement; and
Whereas, the Partnership presently owns the property known as 0 Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx, and ASSIGNOR, concurrently with execution of this
Agreement, is entering into the Purchase Agreement with the ASSIGNOR for the
ASSIGNOR's Partnership Interest; and
Whereas, the ASSIGNOR acknowledges that as a condition for the ASSIGNEE
entering into both the Business Campus Contract and the Purchase Agreement,
ASSIGNOR and ASSIGNEE must enter into this Agreement pursuant to which, among
other things, (i) ASSIGNOR assigns all of its right, title and interest in the
Partnership Interest and (ii) ASSIGNEE assumes the obligations of the
Partnership Interest from and after the date hereof; provided, however, that the
ASSIGNEE is not assuming any liabilities or obligations of the Partnership or
the Partnership Interest arising out of, resulting from or relating to the
Business Campus Contract and/or the Purchase Agreement, including, without
limitation, that certain indemnity made, jointly and severally, by ASSIGNOR and
the Prudential Insurance Company of America ("Prudential") pursuant to Section
9.5 of the Business Campus Contract (the "GAB Indemnity").
Now, Therefore, in consideration of the premises and mutual covenants of
the parties hereto, the parties hereby agree as follows:
1.0 Representations. ASSIGNOR represents that ASSIGNOR is the sole owner
of all right, title and interest in and to said Partnership Interest, and that
title to said Partnership Interest
is free and clear of any and all liens, mortgages, encumbrances or security
interests thereon.
2.0 Assignment of Interest. Simultaneously herewith, in consideration of
$1.00, the receipt of which is hereby acknowledged, ASSIGNOR assigns, transfers
and conveys to ASSIGNEE all of ASSIGNOR's right, title and interest in and to
the Partnership Interest subject to the limitations set forth below.
3.0 Acceptance and Assumption by ASSIGNEE. ASSIGNEE (i) accepts and agrees
to be bound by all the terms and provisions of the Joint Venture Agreement for
PruBeta-3 dated January 24, 1989 from and after the date hereof and (ii) hereby
assumes all obligations with respect to the Partnership Interest conveyed hereby
that arise or accrue from and after the date hereof; provided, however, that
ASSIGNEE does not assume, and ASSIGNOR retains, all liabilities and obligations
of Assignor arising out of, resulting from or relating to the Purchase Agreement
and/or the Business Campus Contract, including, without limitation, the GAB
Indemnity and shall be liable for all Damages (as defined below) arising out of,
resulting from or relating thereto.
4.0 Indemnifications.
4.1 Indemnification by ASSIGNOR. ASSIGNOR hereby indemnifies and
agrees to hold harmless ASSIGNEE from and against any and all claims,
liabilities, losses, deficiencies and damages, as well as reasonable expenses
(including attorneys' fees and disbursements) and interest and penalties related
thereto, (collectively, "Damages"), incurred by ASSIGNEE, by reason of or
resulting from, either directly or indirectly, the obligations of the ASSIGNOR,
its agents, nominees, or employees related to the Partnership Interest conveyed
hereby which accrued prior to the date hereof or, with respect to Damages which
may arise out of, result from or relate to the Business Campus Contract, the
Purchase Agreement and GAB Indemnity, which may accrue on or after the date
hereof; provided, however, that, the foregoing indemnity of ASSIGNOR shall not
apply to any Damages arising out of or relating to (a) the liabilities waived by
ASSIGNEE pursuant to the provisions of Section 3.3 of the Purchase Agreement and
(b) any fact, circumstance or condition for which ASSIGNOR would not otherwise
have liability as a result of ASSIGNEE's acknowledgments and agreements
contained in Article 3 of the Purchase Agreement and (c) any fact, circumstance
or condition covered by the representations and warranties of ASSIGNOR given
pursuant to Article 6 of the Purchase Agreement (It being understood and agreed
that ASSIGNEE's only rights and remedies for any Damages arising out of any such
fact, circumstance or condition shall be as and to the extent available to
ASSIGNEE as a result of a breach of the applicable representation and warranty
contained in said Article 6) and (d) any obligations, debts or liabilities set
forth in the Property Financials (except for the line item in the 1997 Financial
Statement described as "Other Liabilities" in the approximate amount of $322,000
which shall be included within the Damages and the responsibility of ASSIGNOR),
(as defined in the Purchase Agreement) and (e) any obligations, debts or
liabilities, if any, which ASSIGNEE has expressly and specifically agreed to in
writing accept pursuant to the terms of the Purchase Agreement or at the closing
of the transaction contemplated thereby.
4.2 Indemnification by ASSIGNEE. ASSIGNEE hereby indemnifies and agrees to
hold harmless ASSIGNOR from and against any and all Damages, incurred by
ASSIGNOR, by
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reason of or resulting from, either directly or indirectly, the obligations of
the ASSIGNEE, its agents, nominees, or employees, related to the Partnership
Interest conveyed hereby which accrued before, on and after the date hereof;
provided, however, that the indemnification provided in this Section 4.2 shall
exclude (i) any and all Damages arising out of or relating to the Business
Campus Contract, the Purchase Agreement or the GAB Indemnity which accrued
before, on, or after the date hereof and (ii) obligations, debts or liabilities,
if any, which ASSIGNEE has expressly and specifically agreed to in writing
accept pursuant to the terms of the Purchase Agreement or at the closing of the
transaction contemplated thereby.
5.0 Binding Effect. The agreements, terms, covenants and conditions herein
shall bind, and inure to the benefit of, the parties hereto and their respective
heirs, administrators, successors and assigns.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, each of
ASSIGNOR and ASSIGNEE has caused this Assignment and Assumption Agreement to be
executed and delivered by its duly authorized representative as of the day and
year first above written.
ASSIGNOR
EQUITY PARSIPPANY VENTURE,
a Colorado general partnership
By: US West Real Estate, Inc.,
a Colorado Corporation,
as Managing Partner
By:
------------------------------
Stewart A. Loewestein
Vice President
Accepted:
ASSIGNEE
XXXX-XXXX REALTY ACQUISITION CORP.
By:
-----------------------------
Xxxxx X. Xxxxxx
Executive Vice President
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The undersigned, US WEST FINANCIAL SERVICES, INC., a Colorado corporation
("USWFS"), hereby unconditionally and primarily guarantees the payment and
performance by ASSIGNOR of all of its obligations under this Agreement without
requiring Xxxx-Xxxx to pursue any other party before pursuing USWFS. USWFS
hereby acknowledges that Xxxx-Xxxx is relying on this guaranty in entering into
this Assignment and Assumption Agreement and in closing the transactions
contemplated in the Business Campus Contract and the Purchase Agreement and
approving the sale of the Partnership Interest; and that this guaranty is a
material inducement to each of the foregoing. USWFS hereby acknowledges that it
is an affiliate of the managing partner in ASSIGNOR and is thereby receiving
benefit from entering into this guaranty and from the Business Campus Contract
and the Purchase Agreement and the sale of ASSIGNOR's Partnership Interest.
DATED: As of March ___, 1998.
US WEST FINANCIAL SERVICES, INC.,
a Colorado corporation
By:
----------------------------------
Xxxxxxx X. Xxxxxxxxxxx
Vice President
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Xxxx-Xxxx Realty Acquisition Corp.
c/o Xxxx-Xxxx Realty Corporation
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
March 26, 1998
The Prudential Insurance Company
of North America
The Prudential Realty Group
Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Reference is hereby made to that certain Joint Venture Agreement of
PRUBETA-3 (the "Partnership") between The Prudential Insurance Company of
America ("Prudential") and Equity Parsippany Venture, dated January 24, 1989
(the "Partnership Agreement"). Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Partnership Agreement.
In connection with the purchase by Xxxx-Xxxx Acquisition Corp. ("Xxxx-Xxxx") of
the Partnership Interest owned by Equity Parsippany Venture pursuant to that
certain Purchase and Sale Agreement between Xxxx-Xxxx and Equity Parsippany
Venture dated the date hereof (the "Purchase Agreement"), that certain
Assignment and Assumption Agreement between Xxxx-Xxxx and Equity Parsippany
Venture dated the date hereof (the "Assignment and Assumption Agreement") and
the subsequent assignment of Xxxx-Xxxx'x entire interest in the Purchase
Agreement and Assignment and Assumption Agreement to Xxxx-Xxxx Realty, L.P., and
as a condition thereof, Prudential, Xxxx-Xxxx and Xxxx-Xxxx Realty, L.P.,
intending to be legally bound hereby, hereby agree as follows:
I. To amend the Partnership Agreement to incorporate the following terms
and conditions, which amendment shall be executed by Xxxx-Xxxx and Prudential as
soon as practicable but in no event later than thirty (30) days after the date
hereof:
New recitals shall be drafted to explain the reasons for the amendments
and the current state of the Partnership.
All references to BetaWest shall be changed to Xxxx-Xxxx.
Prudential shall acknowledge that (i) all construction and development
projects contemplated in the Partnership Agreement, including but
not limited to Phase II, Phase III, Hilton Court East, and the
Infrastructure Subphase have been completed, (ii) no further Capital
Contributions pursuant to Section 4.4 of the Partnership Agreement
and no further Additional Contributions pursuant to Section 4.9 of
the Partnership Agreement are or will be required to be made by
either Xxxx-Xxxx or Prudential, (iii) no Project Budgets shall be
adopted, and no Project Reserves shall be funded, pursuant to
Section 4.12 of the Partnership Agreement, (iv) no financing will be
obtained pursuant to Section 4.13 of the
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Partnership Agreement, (v) all Development Management Agreements
entered into pursuant to Section 6.6 of the Partnership Agreement
have been terminated with no further obligations of the Partnership
and no new Development Management Contracts or similar agreements or
arrangements will be entered into, and (vi) all Construction
Contracts entered into pursuant to Section 6.7 of the Partnership
Agreement have been terminated with no further obligations of the
Partnership and no new Construction Contracts or similar agreements
or arrangements will be entered into without the mutual consent of
Xxxx-Xxxx and Prudential.
Prudential shall acknowledge that the BetaWest Notes and Purchase Money
Mortgage Notes have been paid in full and are no longer obligations
of the Partnership.
Section 6.7 shall be amended whereby the Asset Management Fee payable by
the Partnership to Prudential shall be deleted and replaced by an
Asset Management Fee payable by the Partnership to Xxxx-Xxxx in
consideration for the supervising and operation of the property
known as 0 Xxxxxx Xxxxx. Such Asset Management Fee shall be
comprised as follows: (i) 3% of the gross collected rents of the
Partnership less any third-party property management fees payable by
the Partnership; and (ii) if Xxxx-Xxxx is the procuring broker a
commission on leases entered into after the date hereof (a "New
Lease"), calculated as follows: (A) 5% of the base rent for each
year of the initial term of such lease up to ten years; (B) 2 1/2%
of the base rent for such lease for each year of the initial term
thereafter up to a maximum of an additional five years; (C) for a
lease of additional space by a tenant under a New Lease, 5% of the
base rent for the first ten years and 2 1/2% of the base rent for
each year thereafter up to an additional five years; and (D) for a
renewal or extension of a lease term by a tenant under a New Lease,
2 1/2% of the base rent payable for each renewal or extension year
for a maximum period of fifteen years from the lease commencement;
and (iii) a 2% override on commissions for New Leases where
Xxxx-Xxxx is not the procuring broker.
Section 7.5 shall be amended to designate Xxxx-Xxxx as the Tax Matters
Partner, subject to the reasonable approval of Prudential's internal
tax law department. If Xxxx-Xxxx is not designated Tax Matters
Partner, the Partnership Agreement shall be amended to provide for
the approval of Xxxx-Xxxx of certain decisions made by the Tax
Matters Partner.
Section 7.6 shall be amended to reflect the actual capital accounts to the
Partnership made by Prudential and Xxxx-Xxxx.
Xxxx-Xxxx shall acknowledge that if the Partnership earns any portion of
the $5 million which may be earned by the Partnership pursuant to
Paragraph 2 of the Second Amendment to the Business Campus Contract,
Xxxx-Xxxx shall have no right to such $5 million and Xxxx-Xxxx shall
consent to the immediate distribution of the
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entire $5 million as Prudential and Equity Parsippany Venture may
direct.
Corresponding changes shall be made to Section 1.1.
The following outstanding landlord obligations shall be paid for by an
equal capital contribution to the Partnership by both Prudential and
Xxxx-Xxxx, provided that Xxxx-Xxxx receives an adjustment for an
amount equal to its capital contribution from Equity Parsippany
Venture at the closing of the transaction contemplated by the
Purchase Agreement:
(a) Xxxxxxx & Wakefield of New Jersey, Inc., 9 Campus Drive:
$22,107.69, the Construction Allowance, due upon presentation of
receipted bills; and
(b) XXXXX, 0 Xxxxxx Xxxxx: $86,530.00, the Landlord Work Allowance.
In addition to the foregoing, the parties hereto hereby agree as follows:
1. Xxxx-Xxxx, or its successors or assigns, and Prubeta-3 shall, within
thirty (30) days hereof, enter into a reciprocal easement agreement to provide
the tenants and occupants of 0 Xxxxxx Xxxxx and their customers, employees and
invitees, the right to use a limited number of parking spots located at the
property commonly known as 2 Hilton Court.
2. Simultaneous with the consummation of the transactions contemplated
under the Purchase Agreement, each of Xxxx-Xxxx and Prudential will transfer
$25,792.15 will be transferred to a newly established bank account in the name
of the Partnership which amount represents security deposits held in the name of
the Partnership for the benefit of tenants of 0 Xxxxxx Xxxxx.
3. Xxxx-Xxxx shall have no liability, and Prudential shall have no right
of contribution or subrogation against Xxxx-Xxxx for any of the Partnership's
obligations under the Business Campus Contract (as such term is defined in the
Purchase Agreement), including without limitation, the indemnification provided
for in Paragraph 3 of the Second Amendment to the Business Campus Contract.
4. Prudential consents to the entering into of the Purchase Agreement and
the transactions contemplated thereby, including without limitation the sale of
the Partnership Interest by Equity Parsippany Venture, the purchase of the
Partnership Interest by Xxxx-Xxxx and the execution of the Assignment and
Assumption Agreement. Further, Prudential acknowledges that all provisions of
the Partnership Agreement relating to any right of first refusal or right of
first offer have been satisfied by Equity Parsippany Venture and agrees to and
accepts Xxxx-Xxxx as a partner and party to the Partnership Agreement, with all
rights and privileges of a 50% Venturer pursuant to the Partnership Agreement.
5. It is understood and agreed that no failure to execute the amendment
referred to in Section I hereof by the parties hereto shall operate as a waiver
by either of them to require that such
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amendment be executed in accordance herewith.
6. It is further understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by Prudential, Xxxx-Xxxx or
any of their representatives and that Prudential and Xxxx-Xxxx shall be entitled
to equitable relief, including injunction and specific performance, as a remedy
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies for a breach by Prudential or Xxxx-Xxxx of this Agreement but shall be
in addition to all other remedies available at law or equity to Prudential and
Xxxx-Xxxx.
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Please indicate your acceptance of the foregoing by signing this letter
agreement as indicated below.
XXXX-XXXX REALTY ACQUISITION CORP.
Xxxx-Xxxx Realty, L.P.
By:
---------------------------------
Xxxxx X. Xxxxxx, Esq.
Executive Vice President
Accepted and Agreed to
as of the date first written above:
THE PRUDENTIAL INSURANCE COMPANY
OF NORTH AMERICA
By:
------------------------------------------
Name:
Title:
