PURCHASE AND SALE AGREEMENT
by and between
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OWNER CORP,
a Delaware corporation
and
CAPLEASE, LP,
a Delaware limited partnership
Property Name: The Aon Building
Location: Glenview, Illinois
Effective Date: July 15, 2004
TABLE OF CONTENTS
ARTICLE 1 - CERTAIN DEFINITIONS................................................1
ARTICLE 2 - SALE OF PROPERTY...................................................8
ARTICLE 3 - PURCHASE PRICE.....................................................8
3.1 ▇▇▇▇▇▇▇ Money Deposit.................................................8
3.1.1 Payment of Deposit..............................................8
3.1.2 Applicable Terms; Failure to Make Deposit.......................8
3.2 Cash at Closing.......................................................8
ARTICLE 4 - TITLE MATTERS......................................................8
4.1 Title to Real Property................................................8
4.2 Title Defects.........................................................9
4.2.1 Buyer's Objections to Title; Seller's Obligations and Rights....9
4.2.2 Discharge of Title Obligations.................................10
4.2.3 No New Exceptions..............................................10
4.3 Title Insurance......................................................10
ARTICLE 5 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY...................11
5.1 Buyer's Due Diligence................................................11
5.1.1 Access to Property.............................................11
5.1.2 Limit on Government Contacts...................................11
5.2 As-Is Sale...........................................................11
5.3 Termination of Agreement During Due Diligence Period.................12
5.4 Buyer's Certificate..................................................12
ARTICLE 6 - ADJUSTMENTS AND PRORATIONS........................................13
6.1 Lease Rentals and Other Revenues.....................................13
6.1.1 Rents..........................................................13
6.1.2 Other Revenues.................................................14
6.2 Reimbursable Lease Expenses..........................................14
6.3 Real Estate and Personal Property Taxes..............................14
6.3.1 Proration of Ad Valorem Taxes..................................14
6.3.2 Insufficient Information.......................................15
6.3.3 Special Assessments............................................15
6.3.4 Tenant Reimbursements..........................................15
6.3.5 Reassessment...................................................16
6.4 Other Property Operating Expenses....................................16
6.5 Closing Costs........................................................16
6.6 Cash Security Deposits...............................................17
6.7 Apportionment Credit.................................................17
6.8 Delayed Adjustment; Delivery of Operating and Other Financial
Statements..........................................................17
ARTICLE 7 - CLOSING...........................................................17
7.1 Closing Date.........................................................17
7.2 Title Transfer and Payment of Purchase Price.........................18
7.3 Seller's Closing Deliveries..........................................18
7.4 Buyer's Closing Deliveries...........................................20
ARTICLE 8 - CONDITIONS TO CLOSING.............................................21
8.1 Conditions to Seller's Obligations...................................21
8.2 Conditions to Buyer's Obligations....................................22
8.3 Waiver of Failure of Conditions Precedent............................22
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8.4 Approvals not a Condition to Buyer's Performance.....................22
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES....................................22
9.1 Buyer's Representations..............................................22
9.1.1 Buyer's Authorization..........................................23
9.1.2 Buyer's Financial Condition....................................23
9.2 Seller's Representations.......................................23
9.2.1 Seller's Authorization.........................................23
9.2.2 Other Seller's Representations.................................24
9.3 General Provisions...................................................26
9.3.1 No Representation as to Leases.................................26
9.3.2 Seller's Warranties Deemed Modified............................26
9.3.3 Notice of Breach; Seller's Right to Cure.......................26
9.3.4 Survival; Limitation on Seller's Liability.....................27
ARTICLE 10 - COVENANTS........................................................28
10.1 Buyer's Covenants....................................................28
10.1.1 Confidentiality................................................28
10.1.2 Buyer's Indemnity..............................................28
10.2 Seller's Covenants...................................................29
10.2.1 Contracts......................................................29
10.2.2 Maintenance of Property........................................30
10.3 Mutual Covenants.....................................................31
10.3.1 Publicity......................................................31
10.3.2 Brokers........................................................31
10.3.3 Tax Protests; Tax Refunds and Credits..........................32
10.3.4 Survival.......................................................32
ARTICLE 11 - FAILURE OF CONDITIONS............................................32
11.1 To Seller's Obligations..............................................32
11.2 To Buyer's Obligations...............................................33
ARTICLE 12 - CONDEMNATION/CASUALTY............................................33
12.1 Right to Terminate...................................................33
12.2 Allocation of Proceeds and Awards....................................33
12.3 Insurance.............................................................34
12.4 Waiver...............................................................34
ARTICLE 13 - ESCROW PROVISIONS................................................34
ARTICLE 14 - LEASING MATTERS..................................................35
14.1 New Leases; Lease Modifications......................................35
14.2 Lease Enforcement....................................................36
14.3 Lease Expenses.......................................................36
ARTICLE 15 - MISCELLANEOUS....................................................37
15.1 Buyer's Assignment...................................................37
15.2 Designation Agreement................................................37
15.3 Survival/Merger......................................................37
15.4 Integration; Waiver..................................................38
15.5 Governing Law........................................................38
15.6 Captions Not Binding; Exhibits.......................................38
15.7 Binding Effect.......................................................38
15.8 Severability.........................................................38
15.9 Notices..............................................................38
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15.10 Counterparts.........................................................40
15.11 No Recordation.......................................................40
15.12 Additional Agreements; Further Assurances............................40
15.13 Construction.........................................................40
15.14 ERISA................................................................41
15.15 Maximum Aggregate Liability..........................................43
15.17 WAIVER OF JURY TRIAL.................................................43
15.18 Facsimile Signatures.................................................44
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EXHIBITS
Exhibit A Legal Description
Exhibit B List of Contracts
Exhibit C Form of As-Is Certificate And Agreement
Exhibit D Form of Deed
Exhibit E Form of ▇▇▇▇ of Sale
Exhibit F Form of Assignment of Leases
Exhibit G Form of Assignment of Intangible Property
Exhibit H Certificate of Officer
Exhibit I Form of FIRPTA Affidavit
Exhibit J Intentionally Omitted
Exhibit K Litigation Notices, Contract Defaults and Governmental Violations
Exhibit L Form of Notice to Tenants
Exhibit M Form of Aon Estoppel Certificate
Exhibit N List of Tenants
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made to be effective as
of July 15, 2004, by and between ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OWNER CORP, a Delaware
corporation ("Seller"), and CAPLEASE, LP, a Delaware limited partnership
("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1 - CERTAIN DEFINITIONS
As used herein, the following terms shall have the following meanings:
"Additional Deposit" shall mean the sum of One Million Nine Hundred
Thousand and No/100 Dollars ($1,900,000).
"Affiliate" or "affiliate" shall mean any entity directly or indirectly
controlling, controlled by or under common control with another entity.
For the purposes of the immediately preceding sentence, "control" means
the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of an entity whether
through the ownership of voting securities, by contract or otherwise.
"Aon" shall mean Aon Corporation, a Delaware corporation.
"Aon Lease" shall mean that certain Office Lease dated as of July 1,
1999 between Seller, as landlord (as successor to BRE/Glenview I, Inc.,
a Delaware corporation) and Aon, as tenant, as amended by the First
Lease Amendment dated as of May 31, 2000 and the Second Lease Amendment
dated as of April 30, 2001 and as the same may be further amended,
modified or supplemented.
"business day" shall mean any day other than a Saturday, Sunday, or any
federal or state of Illinois holiday. If any period expires on a day
which is not a business day or any event or condition is required by
the terms of this Agreement to occur or be fulfilled on a day which is
not a business day, such period shall expire or such event or condition
shall occur or be fulfilled, as the case may be, on the next succeeding
business day.
"Buyer's Broker" shall mean any broker, agent, finder or advisor
retained by Buyer in connection with this Transaction.
"Buyer's Reports" shall mean the results of any examinations,
inspections, investigations, tests, studies, analyses, appraisals,
evaluations and/or investigations prepared by or for or otherwise
obtained by Buyer or Buyer's Representatives in connection with Buyer's
Due Diligence.
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"Buyer's Representatives" shall mean Buyer, any direct or indirect
owner of any beneficial interest in Buyer, and any officers, directors,
employees, agents, representatives and attorneys of Buyer or any such
direct or indirect owner of any beneficial interest in Buyer.
"Closing" shall mean the closing of the Transaction.
"Closing Date" shall mean August 11, 2004, subject to any adjournments
as set forth herein. Time is of the essence with respect to the Closing
Date.
"Closing Tax Year" shall mean the Tax Year in which the Closing Date
occurs.
"Confidential Materials" shall mean any books, computer software,
records or files (whether in a printed or electronic format) that
consist of or contain any of the following: appraisals; budgets;
strategic plans for the Real Property; internal analyses; information
regarding the marketing of the Property for sale; submissions relating
to obtaining internal authorization for the sale of the Property by
Seller or any direct or indirect owner of any beneficial interest in
Seller; attorney and accountant work product; attorney-client
privileged documents; internal correspondence of Seller, any direct or
indirect owner of any beneficial interest in Seller, or any of their
respective affiliates and correspondence between or among such parties;
or other information in the possession or control of Seller, Seller's
property manager or any direct or indirect owner of any beneficial
interest in Seller which such party deems proprietary or confidential.
"Contracts" shall mean all service, supply, maintenance, utility and
commission agreements, all equipment leases, and all other contracts,
subcontracts and agreements relating to the Real Property and the
Personal Property (including all contracts, subcontracts and agreements
relating to the construction of any unfinished tenant improvements, the
HVAC Contract and any other contracts, subcontracts and agreements to
which Seller is a party relating to the repair of the HVAC System), all
of which (other than those relating to the HVAC System) are described
in Exhibit B attached hereto and incorporated herein by this reference,
together with any additional contracts, subcontracts and agreements
entered into in accordance with the terms of Subsection 10.2.1 hereof
and as the same may be modified or terminated in accordance with the
terms of Subsection 10.2.1.
"deemed to know" (or words of similar import) shall have the following
meaning:
(a) Buyer shall be "deemed to know" of the existence of a fact or
circumstance to the extent that:
(i) any Buyer's Representative knows of such fact or
circumstance, or
(ii) such fact or circumstance is disclosed by this
Agreement, any documents executed by Seller for the
benefit of Buyer in connection with the Closing, the
Documents, any estoppel certificate executed by any
tenant of the Property and delivered to Buyer or any
Buyer's Representatives, or any Buyer's Reports.
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(b) Buyer shall be "deemed to know" that any Seller's Warranty is
untrue, inaccurate or incorrect to the extent that:
(i) any Buyer's Representative has knowledge of
information which is inconsistent with such Seller's
Warranty, or
(ii) this Agreement, any documents executed by Seller for
the benefit of Buyer in connection with the Closing,
the Documents, any estoppel certificate executed by
any tenant of the Property and delivered to Buyer or
any Buyer's Representatives, or any Buyer's Reports
contains information which is inconsistent with such
Seller's Warranty.
"Deposit" shall mean the Initial Deposit and the Additional Deposit, to
the extent the same are deposited by Buyer in accordance with the terms
of Subsection 3.1.1 hereof, together with any interest earned thereon.
"Designated Employees" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Documents" shall mean the documents and instruments applicable to the
Property or any portion thereof that Seller or any of the other Seller
Parties deliver or make available to Buyer or Buyer' Representatives
prior to Closing or which are otherwise obtained by Buyer or Buyer's
Representatives prior to Closing, including, but not limited to, the
Title Commitment, the Survey, the Title Documents, and the Property
Documents.
"Due Diligence" shall mean examinations, inspections, investigations,
tests, studies, analyses, appraisals, evaluations and/or investigations
with respect to the Property, the Documents, and other information and
documents regarding the Property, including, without limitation,
examination and review of title matters, applicable land use and zoning
Laws and other Laws applicable to the Property, the physical condition
of the Property, the economic status of the Property and any reports
prepared by or on behalf of Seller or Aon (if in Seller's possession)
regarding the HVAC System.
"Due Diligence Period" shall mean the period commencing on June 30,
2004 and expiring on the later of (a) August 6, 2004 and (b) the date
that Seller delivers to Buyer an executed estoppel certificate from Aon
or, if Aon does not execute an estoppel certificate, the date on which
the matters set forth in the estoppel certificate delivered to Aon by
Seller are deemed approved pursuant to Article 19 of the Lease.
"Escrow Agent" shall mean Chicago Title Insurance Company, whose
mailing address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as escrow agent.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"HVAC Capital Improvements Amount" shall mean the amount to repair the
HVAC System as set forth in the HVAC Contract.
"HVAC Contract" shall have the meaning set forth in Section 5.1.3.
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"HVAC Holdback" shall mean a holdback from the proceeds due to Seller
at the Closing in an amount equal to 25% of the HVAC Capital
Improvements Amount ("Holdback Amount") pursuant to an escrow agreement
by and among the Title Company, Seller and Buyer, in form and substance
satisfactory to Seller and Buyer.
"HVAC System" shall mean the heating, ventilation and air conditioning
system in the building located on the Real Property.
"Initial Deposit" shall mean the sum of One Hundred Thousand and No/100
Dollars ($100,000).
"Laws" shall mean all municipal, county, state or federal statutes,
codes, ordinances, laws, rules or regulations.
"Leases" shall mean all leases (as the same shall be modified or
amended) for tenants of the Real Property on the Closing Date
(including, without limitation, all New Leases and the Aon Lease).
"Liabilities" shall mean, collectively, any and all problems,
conditions, losses, costs, damages, claims, liabilities, expenses,
demands or obligations of any kind or nature whatsoever.
"Major Casualty/Condemnation" shall mean:
(a) with respect to any condemnation or eminent domain proceedings
that occurs after the date hereof, (i) the portion of the
Property that is the subject of such proceedings has a value
in excess of $4,287,500, as reasonably determined by Seller,
(ii) any proceeding that reduces the number of parking spaces
at the Property to a number less than the number existing as
of the date hereof and less than that required by applicable
Laws or (iii) any material taking of access to and from the
Property from public roads; and
(b) with respect to any casualty that occurs after the date
hereof, either (i) the casualty is an uninsured casualty and
Seller, in its sole and absolute discretion, does not elect to
cause the damage to be repaired or restored prior to Closing
(and if Seller elects to repair or restore such damage, Seller
shall be entitled to an adjournment of the Closing Date (not
to exceed thirty (30) days) to effectuate such repair or
restoration) or give Buyer a credit at Closing for such repair
or restoration, or (ii) the portion of the Property that is
damaged or destroyed has a cost of repair that is in excess of
$4,287,500, as reasonably determined by Seller.
"New Leases" shall mean, collectively, any lease for space at the
Property entered into between the date hereof and the Closing Date.
"Other Property Rights" shall mean, collectively, Seller's interest in
and to all of the following, if and only to the extent the same may be
assigned or quitclaimed by Seller without any expense to Seller: (a) to
the extent that the same are in effect as of the Closing Date, any
licenses, permits and other written authorizations necessary for the
use, operation or ownership of the Real Property, and (b) any
guaranties and warranties in effect with respect to any portion of the
Real Property or the Personal Property as of the Closing Date.
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"Owner's Title Policy" shall mean an ALTA Owner's Form of title
insurance policy (or such other comparable form of title insurance
policy as is available in the jurisdiction in which the Property is
located) in the form of the Title Commitment, in the amount of the
Purchase Price.
"Permitted Exceptions" shall mean and include all of the following: (a)
applicable zoning and building ordinances and land use regulations, (b)
all liens, encumbrances, covenants, conditions, restrictions, easements
and other matters set forth on Exhibit B to the form of Deed attached
hereto as Exhibit D, (c) such exceptions to title as are listed on
Schedule B of the Title Commitment, including the Title Company's
standard printed exceptions, (d) such state of facts as disclosed in
the Survey, (e) such state of facts as would be disclosed by a physical
inspection of the Property, (f) the lien of taxes and assessments not
yet due and payable (it being agreed by Buyer and Seller that if any
tax or assessment is levied or assessed with respect to the Property
after the date hereof and the owner of the Property has the election to
pay such tax or assessment either immediately or under a payment plan
with interest, Seller may elect to pay under a payment plan, which
election shall be binding on Buyer), (g) any exceptions caused by Buyer
or any Buyer's Representative, (h) such other exceptions as may be
Removed from the Owner's Title Policy, (i) the rights of the tenants
under the Leases, (j) any matters about which Buyer knows or is deemed
to know prior to the expiration of the Due Diligence Period, and (k)
any matters deemed to constitute additional Permitted Exceptions under
Subsection 4.2.1 hereof. Notwithstanding any provision to the contrary
contained in this Agreement or any of the documents to be executed in
connection herewith or pursuant hereto, any or all of the Permitted
Exceptions may be omitted by Seller in the Deed (as defined in
Subsection 7.3(a)) without giving rise to any liability of Seller,
irrespective of any covenant or warranty of Seller contained in the
Deed (which provisions shall survive the Closing and not be merged
therein).
"Personal Property" shall mean, collectively, (a) all tangible personal
property owned by Seller that is located on the Real Property and used
in the ownership, operation and maintenance of the Real Property, and
(b) all books, records and files of Seller relating to the Real
Property or the Leases, but specifically excluding from the items
described in both clauses (a) and (b), any Confidential Materials and
any computer software that is licensed to Seller.
"Property" shall mean, collectively, (a) the Real Property, (b) the
Personal Property, (c) Seller's interest as landlord in all Leases; (d)
if and only to the extent the same may be assigned or quitclaimed by
Seller without any expense to Seller, the Contracts, and (e) the Other
Property Rights.
"Property Documents" shall mean, collectively, (a) the Leases, (b) the
Contracts, and (c) any other documents or instruments which constitute,
evidence or create any portion of the Property.
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"Prudential" shall mean The Prudential Insurance Company of America, a
New Jersey corporation which is an affiliate of a limited partner in
the sole shareholder of Seller.
"PTE 84-14" shall mean Prohibited Transaction Exemption 84-14 granted
by the U.S. Department of Labor.
"Purchase Price" shall mean the sum of Eighty-Five Million Seven
Hundred and Fifty Thousand Dollars ($85,750,000).
"Real Property" shall mean that certain parcel of real estate described
in Exhibit A attached hereto and incorporated herein by this reference,
together with all buildings, improvements and fixtures located thereon
and owned by Seller as of the Closing Date and all right, title and
interest, if any, that Seller may have in and to all rights, privileges
and appurtenances pertaining thereto including all of Seller's right,
title and interest, if any, in and to all rights-of-way, open or
proposed streets, alleys, easements, strips or gores of land adjacent
thereto; provided, however, that in the event of any condemnation or
casualty that occurs after the date hereof, the term "Real Property"
shall not include any of the foregoing that is destroyed or taken as a
result of any such condemnation proceeding.
"Remove" with respect to any exception to title shall mean that Seller
causes the Title Company to remove or affirmatively insure over the
same as an exception to the Owner's Title Policy for the benefit of
Buyer, without any additional cost to Buyer, whether such removal or
insurance is made available in consideration of payment, bonding,
indemnity of Seller or otherwise.
"Rents" shall mean all base rents, percentage rents, additional rent
and any tax and operating expense reimbursements and escalations due
from the tenants of the Property under the Leases.
"Required Exceptions" shall mean, collectively, any Title Objections to
the extent (and only to the extent) that the same (a) have not been
caused by Buyer or any Buyer's Representatives, and (b) are either:
(i) liens evidencing monetary encumbrances (other than liens for
non-delinquent general real estate taxes) ("Monetary Liens")
which can be Removed by payment of liquidated amounts not to
exceed $250,000 in the aggregate for all such liens, or
(ii) liens or encumbrances other than Monetary Liens created by
Seller or its agents and affiliates after the date of this
Agreement in violation of Subsection 4.2.3.
"Seller-Allocated Amounts" shall mean, collectively:
(a) with respect to any condemnation or eminent domain proceedings
with respect to any portion of the Property that occurs after
the date hereof, (i) the costs, expenses and fees, including
reasonable attorneys' fees, expenses and disbursements,
incurred by Seller in connection with obtaining payment of any
award or proceeds in connection with any such condemnation or
eminent domain proceedings, and (ii) any portion of any such
award or proceeds that is allocable to loss of use of the
Property prior to Closing; and
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(b) with respect to any casualty to any portion of the Property
that occurs after the date hereof, (i) the costs, expenses and
fees, including reasonable attorneys' fees, expenses and
disbursements, incurred by Seller in connection with the
negotiation and/or settlement of any casualty claim with an
insurer with respect to the Property, (ii) the proceeds of any
rental loss, business interruption or similar insurance that
are allocable to the period prior to the Closing Date, and
(iii) the reasonable and actual costs incurred by Seller in
stabilizing the Property following a casualty.
"Seller Parties" shall mean and include, collectively, (a) Seller; (b)
its counsel; (c) Seller's Broker; (d) Seller's property manager; (e)
any direct or indirect owner of any beneficial interest in Seller; (f)
any officer, director, employee, or agent of Seller, its counsel,
Seller's Broker, Seller's property manager or any direct or indirect
owner of any beneficial interest in Seller; and (g) any other entity or
individual affiliated or related in any way to any of the foregoing.
"Seller's Broker" shall mean ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of Illinois &
Michigan, Inc.
"Seller's knowledge" or words of similar import shall refer only to the
actual knowledge of the Designated Employees and shall not be construed
to refer to the knowledge of any other Seller Party, or to impose or
have imposed upon the Designated Employees any duty to investigate the
matters to which such knowledge, or the absence thereof, pertains,
including, but not limited to, the contents of the files, documents and
materials made available to or disclosed to Buyer or the contents of
files maintained by the Designated Employees. There shall be no
personal liability on the part of the Designated Employees arising out
of any of the Seller's Warranties.
"Seller's Warranties" shall mean Seller's representations and
warranties set forth in Section 9.2 and any documents executed by
Seller for the benefit of Buyer in connection with Closing, as the same
may be deemed modified or waived by Buyer pursuant to the terms of this
Agreement.
"Survey" shall mean a survey of the Property prepared by a surveyor
licensed in the State where the Property is located.
"Tax Year" shall mean the year period commencing on January 1 of each
calendar year and ending on December 31 of each calendar year, being
the real estate tax year for the county in which the Property is
located.
"Title Commitment" shall mean a commitment to issue an Owner's Policy
of Title Insurance with respect to the Property issued by the Title
Company.
"Title Company" shall mean Chicago Title Insurance Company.
7
"Title Documents" shall mean all documents referred to on Schedule B of
the Title Commitment as exceptions to coverage.
"Title Objections" shall mean any exceptions to title to which Buyer is
entitled and timely objects in accordance with the terms of Subsection
4.2.1(a).
"Transaction" shall mean the transaction contemplated by this
Agreement.
ARTICLE 2 - SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions set forth in this Agreement and
the Exhibits attached hereto, all of Seller's right, title and interest in and
to the Property.
ARTICLE 3 - PURCHASE PRICE
In consideration of the sale of the Property to Buyer, Buyer shall pay to Seller
an amount equal to the Purchase Price, as prorated and adjusted as set forth in
Article 6, Section 7.2, or as otherwise provided under this Agreement. The
Purchase Price shall be paid as follows:
3.1 ▇▇▇▇▇▇▇ Money Deposit.
3.1.1 Payment of Deposit. Upon the full and final execution of this
Agreement and as a condition precedent to the effectiveness of
this Agreement, and as a condition to the continued
effectiveness of this Agreement, Buyer shall pay the Initial
Deposit to Escrow Agent. On or prior to the expiration of the
Due Diligence Period and as a condition precedent to the
continued effectiveness of this Agreement, Buyer shall pay the
Additional Deposit to Escrow Agent.
3.1.2 Applicable Terms; Failure to Make Deposit. Except as expressly
otherwise set forth herein, the Deposit shall be applied
against the Purchase Price on the Closing Date and shall
otherwise be held and delivered by Escrow Agent in accordance
with the provisions of Article 13. Notwithstanding any
provision in this Agreement to the contrary, if Buyer fails to
timely make the Initial Deposit or the Additional Deposit as
provided herein, Buyer shall be deemed to have elected to
terminate this Agreement, the Deposit then being held in
escrow with the Escrow Agent, if any, shall be paid to Seller
as liquidated damages, and the parties shall have no further
rights or obligations hereunder except for obligations which
expressly survive the termination of this Agreement. The
parties agree that Sellers' damages, in the event of an
occurrence described in the immediately preceding sentence,
will be difficult to determine and that the Deposit then being
held in escrow with the Escrow Agent, if any, is a fair and
genuine estimate of such damages. Notwithstanding anything to
the contrary set forth in this Section 3.1.2, if Buyer does
not make the Additional Deposit because it has elected to
terminate the Agreement in accordance with Section
4.2.1(b) or Section 5.3, then the Initial Deposit shall be
returned to Buyer in accordance with such provisions and shall
not be paid to Seller.
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3.2 Cash at Closing. On the Closing Date, Buyer shall (a) pay to Seller an
amount equal to the balance of the Purchase Price in immediately
available funds by wire transfer as more particularly set forth in
Section 7.2, as prorated and adjusted as set forth in Article 6,
Section 7.2, or as otherwise provided under this Agreement, and (b)
direct the Escrow Agent to pay the Deposit to Seller.
ARTICLE 4 - TITLE MATTERS
4.1 Title to Real Property. Seller shall use good faith and reasonable
efforts to obtain the Title Commitment, copies of all of the Title
Documents, and the Survey as soon as reasonably practicable after the
date hereof. Seller shall notify Buyer when it receives any of the
aforementioned documents and shall promptly furnish Buyer copies of the
same.
4.2 Title Defects.
4.2.1 Buyer's Objections to Title; Seller's Obligations and Rights.
(a) Prior to the end of the Due Diligence Period, Buyer
shall have the right to object in writing to any
title matters that appear on the Title Commitment,
the Survey, and any supplemental title reports or
updates to the Title Commitment (whether or not such
matters constitute Permitted Exceptions). In
addition, after the expiration of the Due Diligence
Period, Buyer shall have the right to object in
writing to any title matters which are not Permitted
Exceptions and which materially adversely affect
Buyer's title to the Real Property that may appear on
any supplemental title reports or updates to the
Title Commitment issued after the expiration of the
Due Diligence Period so long as such objection is
made by Buyer within five (5) business days after
Buyer becomes aware of the same (but, in any event,
prior to the Closing Date). Unless Buyer is entitled
to and timely objects to such title matters, all such
title matters shall be deemed to constitute
additional Permitted Exceptions.
(b) If this Agreement is not terminated by Buyer in
accordance with the provisions hereof, Seller shall,
at Closing, Remove or cause to be Removed any Title
Objections to the extent (and only to the extent)
that the same constitute Required Exceptions. In
addition, Seller may elect (but shall not be
obligated) to Remove or cause to be Removed any other
Title Objections. To the extent that the same do not
constitute Required Exceptions, Seller shall notify
Buyer in writing within five (5) business days after
receipt of Buyer's notice of Title Objections (but,
in any event, prior to the Closing Date) whether
Seller elects to Remove the same. If Seller elects
not to Remove one or more Title Objections, then,
within five (5) business days after Seller's election
(but, in any event, prior to the Closing Date), Buyer
may elect in writing to either (i) terminate this
Agreement, in which event the Deposit shall be paid
to Buyer and, thereafter, the parties shall have no
further rights or obligations hereunder except for
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obligations which expressly survive the termination
of this Agreement, or (ii) waive such Title
Objections and proceed to Closing. Failure of Buyer
to respond in writing within such period shall be
deemed an election by Buyer to waive such Title
Objections and proceed to Closing. Any such Title
Objection so waived (or deemed waived) by Buyer shall
be deemed to constitute a Permitted Exception and the
Closing shall occur as herein provided without any
reduction of or credit against the Purchase Price.
(c) If Seller is unable to Remove any Required Exceptions
or other Title Objection that it has previously
elected to Remove prior to the Closing, Buyer may at
Closing elect to either (a) terminate this Agreement,
in which event the Deposit shall be paid to Buyer
and, thereafter, the parties shall have no further
rights or obligations hereunder except for
obligations which expressly survive the termination
of this Agreement, or (b) waive such Title Objection
and the Closing shall occur as herein provided
without any reduction of or credit against the
Purchase Price.
(d) Seller shall be entitled to a reasonable adjournment
of the Closing (not to exceed ninety (90) days) for
the purpose of the Removal of any Required Exceptions
or other Title Objections.
4.2.2 Discharge of Title Objections. If on the Closing Date there
are any Required Exceptions or any other Title Objections
which Seller has elected to pay and discharge, Seller may use
any portion of the Purchase Price to satisfy the same,
provided Seller shall cause the Title Company to Remove the
same.
4.2.3 No New Exceptions. From and after the date hereof, Seller
shall not execute any deed, easement, restriction, covenant or
other matter affecting title to the Property unless Buyer has
received a copy thereof and has approved the same in writing.
If, prior to the expiration of the Due Diligence Period, Buyer
fails to object in writing to any such proposed instrument
within three (3) business days after delivery of the
aforementioned notice, Buyer shall be deemed to have approved
the proposed instrument. If, following the expiration of the
Due Diligence Period, Buyer fails to object in writing to any
such proposed instrument within three (3) business days after
delivery of the aforementioned notice, Buyer shall be deemed
to have not approved the proposed instrument. Buyer's consent
shall not be unreasonably withheld or delayed with respect to
any such instrument that is proposed prior to the end of the
Due Diligence Period. Buyer, in its sole and absolute
discretion, shall be entitled to grant or withhold its consent
with respect to any such instrument that is proposed between
the end of the Due Diligence Period and the Closing.
4.3 Title Insurance. At Closing, the Title Company shall issue the Owner's
Title Policy to Buyer, insuring that fee simple title to the Real
Property is vested in Buyer subject only to the Permitted Exceptions.
Buyer shall be entitled to request that the Title Company provide such
endorsements (or amendments) to the Owner's Title Policy as Buyer may
reasonably require, provided that (a) such endorsements (or amendments)
shall be at no cost to, and shall impose no additional liability on,
10
Seller, (b) Buyer's obligations under this Agreement shall not be
conditioned upon Buyer's ability to obtain such endorsements and, if
Buyer is unable to obtain such endorsements, Buyer shall nevertheless
be obligated to proceed to close the Transaction without reduction of
or set off against the Purchase Price, and (c) the Closing shall not be
delayed as a result of Buyer's request.
ARTICLE 5 - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
5.1 Buyer's Due Diligence.
5.1.1 Access to Property. Between the date hereof and the Closing
Date Seller shall allow Buyer and Buyer's Representatives
access to the Property upon reasonable prior notice at
reasonable times provided (a) such access does not interfere
with the operation of the Property; (b) Buyer shall not
contact any tenant without Seller's prior written consent; and
(c) Seller or its designated representative shall have the
right to pre-approve and be present during any physical
testing of the Property. If the Closing does not occur for any
reason, Buyer shall, at Seller's election and following
written notice from Seller, deliver promptly to Seller copies
of all Buyer's Reports; provided that Seller reimburses Buyer
for Buyer's out-of-pocket costs in connection with the same.
5.1.2 Limit on Government Contacts. Notwithstanding any provision in
this Agreement to the contrary, except in connection with the
preparation of a so-called "Phase I" environmental report with
respect to the Property, Buyer shall not contact any
governmental official or representative regarding hazardous
materials on or the environmental condition of the Property
without Seller's prior written consent thereto, which consent
shall not be unreasonably withheld or delayed. In addition, if
Seller's consent is obtained by Buyer, Seller shall be
entitled to receive at least five (5) days prior written
notice of the intended contact and to have a representative
present when Buyer has any such contact with any governmental
official or representative.
5.1.3 HVAC. During the Due Diligence Period, Buyer and Seller shall
use their respective good faith efforts to agree on the HVAC
Capital Improvements Amount and the scope of work and form of
fixed price contract (the "HVAC Contract") to repair the HVAC
System. If there is no such agreement prior to the expiration
on the Due Diligence Period, Buyer or Seller, in its sole and
absolute discretion, may terminate this Agreement by written
notice to the other party at any time prior to 5:00 p.m.
Eastern Time on the last day of the Due Diligence Period, and,
in the event of such termination, neither Seller nor Buyer
shall have any liability hereunder except for those
obligations which expressly survive the termination of this
Agreement and Buyer shall be entitled to the return of the
Initial Deposit. In the event neither party terminates this
Agreement prior to 5:00 p.m. Eastern Time on the last day of
the Due Diligence Period, Buyer and Seller shall be deemed to
have waived their respective rights to terminate this
Agreement in accordance with this Section 5.1.3.
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5.2 As-Is Sale. Buyer acknowledges and agrees as follows:
(a) During the Due Diligence Period, Buyer has conducted
(or has waived its right to conduct), and shall
continue to conduct, such Due Diligence as Buyer has
deemed or shall deem necessary or appropriate.
(b) The Property shall be sold, and Buyer shall accept
possession of the Property on the Closing Date, "AS
IS, WHERE IS, WITH ALL FAULTS", with no right of
setoff or reduction in the Purchase Price.
(c) Except for Seller's Warranties, none of the Seller
Parties have or shall be deemed to have made any
verbal or written representations, warranties,
promises or guarantees (whether express, implied,
statutory or otherwise) to Buyer with respect to the
Property, any matter set forth, contained or
addressed in the Documents (including, but not
limited to, the accuracy and completeness thereof) or
the results of Buyer's Due Diligence.
(d) Buyer shall independently confirm to its satisfaction
all information that it considers material to its
purchase of the Property or the Transaction.
In addition, Buyer expressly understands and acknowledges that it is
possible that unknown Liabilities may exist with respect to the
Property and that Buyer explicitly took that possibility into account
in determining and agreeing to the Purchase Price, and that a portion
of such consideration, having been bargained for between parties with
the knowledge of the possibility of such unknown Liabilities shall be
given in exchange for a full accord and satisfaction and discharge of
all such Liabilities.
5.3 Termination of Agreement During Due Diligence Period. If Buyer, in its
sole and absolute discretion, is not satisfied with the results of its
Due Diligence during the Due Diligence Period (including, without being
limited to, the state of title to the Property), Buyer may terminate
this Agreement by written notice to Seller at any time prior to 5:00
p.m. Eastern Time on the last day of the Due Diligence Period, and, in
the event of such termination, neither Seller nor Buyer shall have any
liability hereunder except for those obligations which expressly
survive the termination of this Agreement and Buyer shall be entitled
to the return of the Initial Deposit. In the event Buyer fails to
terminate this Agreement prior to 5:00 p.m. Eastern Time on the last
day of the Due Diligence Period, Buyer shall be deemed to have waived
its rights to terminate this Agreement in accordance with this Article
5.
5.4 Buyer's Certificate. Buyer shall deliver to Seller at the Closing, a
certificate in the form of Exhibit C attached hereto and incorporated
herein by this reference.
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ARTICLE 6 - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
6.1 Lease Rentals and Other Revenues.
6.1.1 Rents. All collected Rents shall be prorated between Seller
and Buyer as of the day prior to the Closing Date. Seller
shall be entitled to all Rents attributable to any period to
but not including the Closing Date. Buyer shall be entitled to
all Rents attributable to any period on and after the Closing
Date. For purposes of determining each of Buyer's and Seller's
pro rata share of percentage rents, the amount "attributable"
to the period prior to the Closing Date shall be equal to (a)
the aggregate amount of such percentage rents actually
collected for the calendar year in which the Closing occurs
multiplied by (b) a fraction, the numerator of which shall be
the number of days prior to the Closing Date that the
applicable tenant leases space at the Property during the
calendar year in which the Closing occurs and the denominator
of which shall be 365. Except with respect to percentage rents
(which shall be prorated as provided hereinbelow), Rents not
collected as of the Closing Date shall not be prorated at the
time of Closing. With respect to percentage rent due from any
tenant, Buyer and Seller agree that at Closing estimated
percentage rent shall be prorated for the calendar year in
which the Closing occurs (even though the same may not have
been collected as of the Closing) based upon the amount of
percentage rent due from such tenant for the calendar year
immediately prior to the calendar year in which the Closing
occurs. After Closing, Buyer shall make a good faith effort to
collect any Rents not collected as of the Closing Date on
Seller's behalf and to tender the same to Seller upon receipt
(which obligation of Buyer shall survive the Closing and not
be merged therein); provided, however, that all Rents
collected by Buyer on or after the Closing Date shall first be
applied to all amounts due under the applicable Lease at the
time of collection (i.e., current Rents and sums due Buyer as
the current owner and landlord) with the balance (if any)
payable to Seller, but only to the extent of amounts
delinquent and actually due Seller. Buyer shall not have an
exclusive right to collect the sums due Seller under the
Leases and Seller hereby retains its rights to pursue claims
against any tenant under the Leases for sums due with respect
to periods prior to the Closing Date (including, without
limitation, any percentage rent that may be due with respect
to any period of time prior to Closing, regardless of when the
same is to be paid to the owner of the Property pursuant to
the terms of the applicable Lease); provided, however, that
Seller (i) shall be required to notify Buyer in writing of its
intention to commence or pursue such legal proceedings; (ii)
shall only be permitted to commence or pursue any legal
proceedings after the date which is three (3) months after
Closing; and (iii) shall not be permitted to commence or
pursue any legal proceedings against any tenant seeking
eviction of such tenant or the termination of the underlying
lease. The terms of the immediately preceding sentence shall
survive the Closing and not be merged therein.
6.1.2 Other Revenues. Revenues from Property operations (other than
Rents (which shall be prorated as provided in Subsection
6.1.1), security deposits (which will be dealt with as
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provided in Section 6.5), and pre-paid installments or other
payments under Contracts that are not being transferred to
Buyer on the Closing Date (which shall be the sole property of
Seller)) that are actually collected shall be prorated between
Buyer and Seller as of 12:01 a.m. on the Closing Date. Seller
shall be entitled to all such revenues attributable to any
period to but not including the Closing Date and Buyer shall
be entitled to all such revenues attributable to any period on
and after the Closing Date. After Closing, Buyer shall make a
good faith effort to collect any such revenues not collected
as of the Closing Date on Seller's behalf and to tender the
same to Seller upon receipt (which obligation of Buyer shall
survive the Closing and not be merged therein). Buyer shall
not have an exclusive right to collect such revenues and
Seller hereby retains its rights to pursue claims against any
parties for sums due with respect to periods prior to the
Closing Date.
6.2 Real Estate and Personal Property Taxes.
6.2.1 Proration of Ad Valorem Taxes. Buyer and Seller shall only
prorate ad valorem real estate and personal property taxes for
the Property that are actually due and payable during Closing
Tax Year, regardless of the year for which such taxes are
assessed. As a result, if real estate or personal property
taxes for the Property are paid in arrears (i.e., taxes paid
during any Tax Year are assessed for or otherwise attributable
to the previous Tax Year), there shall be no proration of real
estate taxes assessed for or attributable to the Property for
the Closing Tax Year (which would be due and payable during
the following Tax Year). There shall be no proration of ad
valorem real estate or personal property taxes other than as
set forth hereinabove and, as between Buyer and Seller, Buyer
agrees that it shall be solely responsible for all such ad
valorem real estate and personal property taxes due and
payable after the Closing. The proration of the ad valorem
real estate and personal property taxes actually due and
payable during the Closing Tax Year shall be calculated as
follows:
(a) Seller shall be responsible for that portion of such
taxes equal to (i) the total such taxes due and
payable during the Closing Tax Year, multiplied by
(ii) a fraction, the numerator of which shall be the
number of days in the Closing Tax Year prior to the
Closing Date, and the denominator of which shall be
365; and
(b) Buyer shall be responsible for that portion of such
taxes equal to (i) the total such taxes due and
payable during the Closing Tax Year, multiplied by
(ii) a fraction, the numerator of which shall be the
number of days in the Closing Tax Year subsequent to
and including the Closing Date, and the denominator
of which shall be 365.
6.2.2 Insufficient Information. If, at Closing, the real estate
and/or personal property tax rate and assessments have not
been set for the taxes due and payable during the Closing Tax
Year, then the proration of such taxes shall be based upon the
rate and assessments for the preceding Tax Year, and such
proration shall be adjusted between Seller and Buyer after
Closing upon presentation of written evidence that the actual
taxes due and payable during the Closing Tax Year differ from
the amounts used at Closing and in accordance with the
provisions of Section 6.8.
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6.2.3 Special Assessments. Seller shall pay all installments of
special assessments due and payable prior to the Closing Date
and Buyer shall pay all installments of special assessments
due and payable on and after the Closing Date; provided,
however, that Seller shall not be required by the foregoing to
pay any installments of special assessments which have not
been confirmed or which relate to projects that have not been
completed on the date hereof.
6.2.4 Tenant Reimbursements. Notwithstanding the foregoing terms of
this Article 6, Seller shall have no obligation to pay (and
Buyer shall not receive a credit at Closing for) any real
estate or personal property taxes or special assessments to
the extent that Buyer is entitled after Closing to
reimbursement of taxes and assessments, or the recovery of any
increase in taxes and assessments, from the tenants under the
Leases, regardless of whether Buyer actually collects such
reimbursement or increased taxes and assessments from such
tenants, it being understood and agreed by Buyer and Seller
that (a) as between Buyer and Seller, Buyer shall be
responsible for payment of all of such real estate or personal
property taxes and assessments, and (b) the burden of
collecting such reimbursements shall be solely on Buyer.
Furthermore, Seller and Buyer acknowledge and agree that,
notwithstanding any provision in any of the Leases to the
contrary, the tax reimbursement payments to be paid by tenants
of the Property during the Closing Tax Year are to be applied
to pay the real estate taxes due and payable during the
Closing Tax Year and, therefore, Buyer shall not receive a
credit for any amounts due and payable by tenants of the
Property prior to the Closing as real estate tax
reimbursements.
6.2.5 Reassessment. In the event the Property has been assessed for
property tax purposes at such rates as would result in
reassessment (i.e., "escape assessment" or "roll-back taxes")
based upon the change in land usage or ownership of the
Property on or after the Closing Date, Buyer hereby agrees to
pay all such taxes and to indemnify and save Seller harmless
from and against all Liabilities for such taxes. Such
indemnity shall survive the Closing and not be merged therein.
6.3 Other Property Operating Expenses. Operating expenses for the Property
shall be prorated as of 12:01 a.m. on the Closing Date. Seller shall
pay all utility charges and other operating expenses attributable to
the Property to, but not including the Closing Date (except for those
utility charges and operating expenses payable by tenants in accordance
with the Leases) and Buyer shall pay all utility charges and other
operating expenses attributable to the Property on or after the Closing
Date. To the extent that the amount of actual consumption of any
utility services is not determined prior to the Closing Date, a
proration shall be made at Closing based on the last available reading
and post-closing adjustments between Buyer and Seller shall be made
within twenty (20) days of the date that actual consumption for such
pre-closing period is determined, which obligation shall survive the
Closing and not be merged therein. Seller shall not assign to Buyer any
deposits which Seller has with any of the utility services or companies
servicing the Property. Buyer shall arrange with such services and
companies to have accounts opened in Buyer's name beginning at 12:01
15
a.m. on the Closing Date. Notwithstanding the foregoing terms of this
section, Seller shall have no obligation to pay (and Buyer shall not
receive a credit at Closing for) any operating expenses to the extent
that Buyer is entitled after Closing to reimbursement of operating
expenses, or the recovery of any increase in operating expenses, from
the tenants under the Leases, regardless of whether Buyer actually
collects such reimbursement or increased operating expenses from such
tenants, it being understood and agreed by Buyer and Seller that (a) as
between Buyer and Seller, Buyer shall be responsible for payment of all
of such operating expenses, and (b) the burden of collecting such
reimbursements shall be solely on Buyer.
6.4 Closing Costs. Buyer shall pay the following costs and expenses
associated with the Transaction: (a) all premiums and charges of the
Title Company relating to the Owner's Title Policy, including the cost
of all endorsements to the Owner's Title Policy, (b) the cost of the
Survey (including any Survey costs incurred by Seller in anticipation
of the sale of the Property, but not in connection with Seller's
original acquisition of the Property), (c) all recording and filing
charges in connection with the instrument by which Seller conveys the
Property, (d) one-half of all escrow and closing charges by Escrow
Agent, (e) the commission due Buyer's Broker, (f) all costs of Buyer's
Due Diligence, including fees due its consultants and attorneys, and
(g) all lenders' fees and other costs related to any financing to be
obtained by Buyer. Seller shall pay the following costs and expenses
associated with the Transaction: (i) all fees due its attorneys, (ii)
all transfer taxes, sales taxes, documentary stamp taxes and similar
charges, if any, applicable to the transfer of the Property to Buyer,
(iii) one-half of all escrow and closing charges by Escrow Agent, and
(iv) all costs incurred in connection with causing the Title Company to
Remove any Required Exceptions or to Remove any other Title Objections
to the extent Seller specifically agrees in writing, at or prior to
Closing, to cause Removal of such matter, it being understood for
purposes of this sentence that nothing in this Agreement or any prior
understanding or agreement of the parties shall be construed to
obligate Seller to so Remove or agree to Remove any such matter. The
obligations of the parties under this Section 6.4 shall survive the
Closing (and not be merged therein) or any earlier termination of this
Agreement.
6.5 Cash Security Deposits. At Closing, Seller shall give Buyer a credit
against the Purchase Price in the aggregate amount of any cash security
deposits then held by Seller under the Leases.
6.6 Apportionment Credit. In the event the apportionments to be made at the
Closing result in a credit balance (a) to Buyer, such sum shall be paid
at the Closing by giving Buyer a credit against the Purchase Price in
the amount of such credit balance, or (b) to Seller, Buyer shall pay
the amount thereof to Seller at the Closing by wire transfer of
immediately available funds to the account or accounts to be designated
by Seller for the payment of the Purchase Price.
6.7 Delayed Adjustment; Delivery of Operating and Other Financial
Statements. If at any time following the Closing Date, the amount of an
item listed in any section of this Article 6 shall prove to be
incorrect (whether as a result of an error in calculation or a lack of
complete and accurate information as of the Closing), the party in
whose favor the error was made shall promptly pay to the other party
16
the sum necessary to correct such error upon receipt of proof of such
error, provided that such proof is delivered to the party from whom
payment is requested on or before one (1) year after Closing (such
period being referred to herein as the "Post Closing Adjustment
Period"). In order to enable Seller to determine whether any such
delayed adjustment is necessary, Buyer shall provide to Seller current
operating and financial statements for the Property no later than the
date one (1) month prior to the expiration of the Post-Closing
Adjustment Period. The provisions of this Section 6.7 shall survive the
Closing and not be merged therein.
6.8 HVAC System Credit; HVAC Holdback. At the Closing, Buyer shall receive
a credit against the Purchase Price in the amount of the HVAC Capital
Improvements Amount less any amounts theretofore expended by Seller
pursuant to the HVAC Contract. At the Closing, the HVAC Holdback shall
be established. On April 30, 2005, Buyer shall request an estoppel from
Aon pursuant to Article 19 of the Aon Lease to the effect that, as of
the date of such estoppel, the HVAC System is in good working order and
Aon has no claims against Buyer in connection with the HVAC System, as
repaired. If Aon delivers a "clean" estoppel within thirty days or is
deemed to agree to the matters set forth in such estoppel pursuant to
the Aon Lease, Buyer shall instruct the Title Company to release the
Holdback Amount to Seller. If Aon delivers an estoppel that raises
issues regarding the functioning of the HVAC System, Buyer shall cause
the contractor to address these issues under the warranty provided in
the HVAC Contract. Buyer will then seek another estoppel from Aon as
provided above and if Aon delivers a "clean" estoppel within thirty
days or is deemed to agree to the matters set forth in such estoppel
pursuant to the Aon Lease, Buyer shall instruct the Title Company to
release the Holdback Amount to Seller. If the warranty is not effective
to address the issues raised by Aon or if all of the work is not
covered by the warranty, Buyer may drawdown and apply funds in the HVAC
Holdback to the same. Buyer will then seek another estoppel from Aon as
provided above and if Aon delivers a "clean" estoppel within thirty
days or is deemed to agree to the matters set forth in such estoppel
pursuant to the Aon Lease, Buyer shall instruct the Title Company to
release the balance of the Holdback Amount, if any, to Seller. Under no
circumstances shall Seller's liability to any person or entity
(including Aon and Buyer) relating to the HVAC System exceed the
Holdback Amount. Notwithstanding anything in this Agreement to the
contrary, Buyer shall have no recourse against Seller relating to the
HVAC System, except as set forth in this Section 6.8.
ARTICLE 7 - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
7.1 Closing Date. Subject to Seller's right to extend the Closing as
provided in this Agreement, Closing shall occur on the Closing Date.
The parties shall endeavor to conduct an escrow-style closing through
the Escrow Agent so that it will not be necessary for any party to
attend the Closing. If, however, either Buyer or Seller determines in
good faith that such an escrow Closing is not practical, Buyer and
Seller shall conduct a "pre-closing" at 10:00 a.m. Eastern Time on the
last business day prior to the Closing Date at the offices of Seller's
attorney with title transfer and payment of the Purchase Price to be
completed on the Closing Date as set forth in Section 7.2. Time is of
the essence with respect to the Closing.
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7.2 Title Transfer and Payment of Purchase Price. Provided all conditions
precedent to Seller's obligations hereunder have been satisfied, Seller
agrees to convey the Property to Buyer upon confirmation of receipt of
the Purchase Price by the Escrow Agent as set forth below. Provided all
conditions precedent to Buyer's obligations hereunder have been
satisfied, Buyer agrees to pay the amount specified in Article 3 by
timely delivering the same to the Escrow Agent no later than 11:00 a.m.
Eastern Time on the Closing Date and unconditionally directing the
Escrow Agent to deposit the same in Seller's designated account by
12:00 noon Eastern Time on the Closing Date. In addition, for each full
or partial day after 12:00 noon Eastern Time on the Closing Date that
Seller has not received in its account the payment specified in Article
3, Buyer shall pay to Seller at Closing (and as a condition thereto)
the greater of (a) an amount equal to one (1) day's interest on the
unpaid funds at the rate per annum equal to the "prime rate" as such
rate is reported in the "Money Rates" section of The Wall Street
Journal, as published and distributed in New York, New York, in effect
from time to time, and (b) an amount equal to the per diem proration
for one (1) day. Notwithstanding the foregoing, Seller shall have the
right to terminate this Agreement at any time if such payment is not
received in Seller's designated account by 12:00 noon Eastern Time on
the Closing Date.
7.3 Seller's Closing Deliveries. At Closing, Seller shall deliver or cause
to be delivered the following:
(a) Deed. A deed in the form of Exhibit D attached hereto
and incorporated herein by this reference ("Deed")
executed and acknowledged by Seller.
(b) ▇▇▇▇ of Sale. A ▇▇▇▇ of sale in the form of Exhibit E
attached hereto and incorporated herein by this
reference ("▇▇▇▇ of Sale") executed by Seller.
(c) Assignment of Tenant Leases. An assignment and
assumption of tenant leases, in the form of Exhibit F
attached hereto and incorporated herein by this
reference ("Assignment of Leases") executed by
Seller.
(d) Assignment of Intangible Property. An assignment and
assumption of the Contracts and the Other Property
Rights (to the extent the same are not transferred by
the Deed, ▇▇▇▇ of Sale or Assignment of Leases) in
the form of Exhibit G attached hereto and
incorporated herein by this reference ("Assignment of
Intangible Property") executed by Seller.
(e) Notice to Tenants. A single form letter in the form
of Exhibit N attached hereto and incorporated herein
by this reference, duplicate copies of which shall be
sent by Buyer after the Closing to each tenant under
the Leases.
(f) Non-Foreign Status Affidavit. A non-foreign status
affidavit in the form of Exhibit I attached hereto
and incorporated herein by this reference, as
required by Section 1445 of the Internal Revenue
Code, executed by Seller.
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(g) Aon Estoppel Certificate. An executed estoppel
certificate from Aon under the Aon Lease dated no
earlier than ten (10) days prior to the initially
scheduled Closing Date substantially in the form of
Exhibit M attached hereto and incorporated herein by
this reference. The parties hereby agree that if Aon
revises or modifies such estoppel certificate to
address any inadequacies in, or concerns with, the
current HVAC System, then such estoppel certificate,
as so revised or modified, shall nonetheless be a
complying Seller delivery.
(h) Evidence of Authority. Documentation to establish to
the Title Company's reasonable satisfaction the due
authorization of Seller's execution of this Agreement
and all documents contemplated by this Agreement and
the consummation of the Transaction, which shall
consist of a certificate of an officer of Prudential
Investment Management Inc., the managing member of PF
Global Real Estate Advisors, LLC, in the form of
Exhibit H attached hereto and incorporated herein by
reference.
(i) Other Documents. Such other documents as may be
reasonably required by the Title Company or as may be
agreed upon by Seller and Buyer to consummate the
Transaction, including, if required by the Title
Company, a gap indemnity in a form reasonably
acceptable to Seller.
(j) Tax Returns. If applicable, duly completed and signed
real estate transfer tax or sales tax returns.
(k) Closing Statement. Seller's form of closing
statement, setting forth the prorations and
adjustments to the Purchase Price respecting the
Property to be made pursuant to Article 6 (the
"Closing Statement"), executed by Seller.
(l) Leases. A copy of all Leases certified by Seller to
be true, correct and complete copies.
(m) Keys and Original Documents. Keys to all locks on the
Real Property in Seller's or Seller's building
manager's possession and originals or, if originals
are not available, copies, of all of the Property
Documents, to the extent not previously delivered to
Buyer.
The items to be delivered by Seller in accordance with the terms of
Subsections (a) through (l) of this Section 7.3 shall be delivered to
Escrow Agent no later than 5:00 p.m. Eastern Time on the last business
day prior to the Closing Date and the items to be delivered by Seller
in accordance with the terms of Subsection (m) of this Section 7.3
shall be delivered outside of escrow and shall be deemed delivered if
the same are located at the Property on the Closing Date.
7.4 Buyer's Closing Deliveries. At the Closing, Buyer shall deliver or
cause to be delivered the following:
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(a) Purchase Price. The Purchase Price, as adjusted for
apportionments and other adjustments required under
this Agreement, plus any other amounts required to be
paid by Buyer at Closing.
(b) Deed. The Deed executed and acknowledged by Buyer.
(c) ▇▇▇▇ of Sale. The ▇▇▇▇ of Sale executed by Buyer.
(d) Assignment of Leases. The Assignment of Leases
executed by Buyer.
(e) Assignment of Intangible Property. The Assignment of
Intangible Property executed by Buyer.
(f) Buyer's As-Is Certificate. The certificate of Buyer
required under Article 5 hereof.
(g) Intentionally Omitted.
(h) Evidence of Authority. Documentation to establish to
Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the Property
and Buyer's execution of this Agreement and the
documents required to be delivered by Buyer pursuant
to this Agreement and the consummation of the
Transaction.
(i) Other Documents. Such other documents as may be
reasonably required by the Title Company or may be
agreed upon by Seller and Buyer to consummate the
Transaction.
(j) Tax Returns. If applicable, duly completed and signed
real estate transfer tax or sales tax returns.
(k) Closing Statement. The Closing Statement, executed by
Buyer.
The Purchase Price shall be paid in accordance with the terms of
Section 7.2 hereof and the items to be delivered by Buyer in accordance
with the terms of Subsections (b) through (k) of this Section 7.4 shall
be delivered to Escrow Agent no later than 5:00 p.m. Eastern Time on
the last business day prior to the Closing Date.
ARTICLE 8 - CONDITIONS TO CLOSING
8.1 Conditions to Seller's Obligations. Seller's obligation to close the
Transaction is conditioned on all of the following, any or all of which
may be waived by Seller by an express written waiver, at its sole
option:
(a) Intentionally Omitted.
(b) Representations True. All representations and
warranties made by Buyer in this Agreement shall be
true and correct in all material respects on and as
of the Closing Date, as if made on and as of such
date except to the extent they expressly relate to an
earlier date;
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(c) Buyer's Financial Condition. No petition has been
filed by or against Buyer under the Federal
Bankruptcy Code or any similar state or federal Law,
whether now or hereafter existing; and
(d) Buyer's Deliveries Complete. Buyer shall have
delivered the funds required hereunder and all of the
documents to be executed by Buyer set forth in
Section 7.4 and shall have performed all other
covenants, undertakings and obligations, and complied
with all conditions required by this Agreement, to be
performed or complied with by Buyer at or prior to
the Closing.
8.2 Conditions to Buyer's Obligations. Buyer's obligation to close the
Transaction is conditioned on all of the following, any or all of which
may be expressly waived by Buyer in writing, at its sole option:
(a) Representations True. Subject to the provisions of
Section 9.3, all representations and warranties made
by Seller in this Agreement, as the same may be
amended as provided in Section 9.3, shall be true and
correct in all material respects on and as of the
Closing Date, as if made on and as of such date
except to the extent that they expressly relate to an
earlier date;
(b) Title Conditions Satisfied. At the time of the
Closing, title to the Property shall be as provided
in Article 4 of this Agreement; and
(c) Seller's Deliveries Complete. Seller shall have
delivered all of the documents and other items
required pursuant to Section 7.3 and shall have
performed all other covenants, undertakings and
obligations, and complied with all conditions
required by this Agreement, to be performed or
complied with by Seller at or prior to the Closing.
8.3 Waiver of Failure of Conditions Precedent. At any time or times on or
before the date specified for the satisfaction of any condition, Seller
or Buyer may elect in writing to waive the benefit of any such
condition set forth in Section 8.1 or Section 8.2, respectively. By
closing the Transaction, Seller and Buyer shall be conclusively deemed
to have waived the benefit of any remaining unfulfilled conditions set
forth in Section 8.1 and Section 8.2, respectively. In the event any of
the conditions set forth in Sections 8.1 or 8.2 are neither waived nor
fulfilled, Seller or Buyer (as appropriate) may exercise such rights
and remedies, if any, that such party may have pursuant to the terms of
Article 11 hereof.
8.4 Approvals not a Condition to Buyer's Performance. Subject to Buyer's
right to terminate this Agreement prior to the expiration of the Due
Diligence Period in accordance with the terms of Article 5 hereof,
Buyer acknowledges and agrees that its obligation to perform under this
Agreement is not contingent upon Buyer's ability to obtain any (a)
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governmental or quasi-governmental approval of changes or modifications
in use or zoning, or (b) modification of any existing land use
restriction, or (c) consents to assignments of any service contracts,
management agreements or other agreements which Buyer requests, or (d)
endorsements to the Owner's Title Policy or (e) any financing to
acquire the Property.
ARTICLE 9 - REPRESENTATIONS AND WARRANTIES
9.1 Buyer's Representations. Buyer represents and warrants to, and
covenants with, Seller as follows:
9.1.1 Buyer's Authorization. Buyer (and as used in this Section
9.1.1, the term Buyer includes any general partners or
managing members of Buyer) (a) is duly organized (or formed),
validly existing and in good standing under the Laws of its
State of organization and, as and to the extent required by
Law, the State in which the Property is located, (b) is
authorized to consummate the Transaction and fulfill all of
its obligations hereunder and under all documents contemplated
hereunder to be executed by Buyer, and (c) has all necessary
power to execute and deliver this Agreement and all documents
contemplated hereunder to be executed by Buyer, and to perform
all of its obligations hereunder and thereunder. This
Agreement and all documents contemplated hereunder to be
executed by Buyer, have been duly authorized by all requisite
partnership, corporate or other required action on the part of
Buyer and are the valid and legally binding obligation of
Buyer, enforceable in accordance with their respective terms.
Neither the execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by Buyer, nor
the performance of the obligations of Buyer hereunder or
thereunder will result in the violation of any Law or any
provision of the organizational documents of Buyer or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
9.1.2 Buyer's Financial Condition. No petition has been filed by or
against Buyer under the Federal Bankruptcy Code or any similar
state or federal Law.
9.2 Seller's Representations. Seller represents and warrants to Buyer as
follows:
9.2.1 Seller's Authorization. Seller (a) is duly organized (or
formed), validly existing and in good standing under the Laws
of its State of organization and, to the extent required by
Law, the State in which the Property is located, (b) is
authorized to consummate the Transaction and fulfill all of
its obligations hereunder and under all documents contemplated
hereunder to be executed by Seller, and (c) has all necessary
power to execute and deliver this Agreement and all documents
contemplated hereunder to be executed by Seller, and to
perform all of Seller's obligations hereunder and thereunder.
This Agreement and all documents contemplated hereunder to be
executed by Seller, have been duly authorized by all requisite
partnership, corporate or other required action on the part of
Seller and are the valid and legally binding obligation of
Seller, enforceable in accordance with their respective terms.
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Neither the execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by Seller, nor
the performance of the obligations of Seller hereunder or
thereunder will result in the violation of any Law or any
provision of the organizational documents of Seller or will
conflict with any order or decree of any court or governmental
instrumentality of any nature by which Seller is bound.
9.2.2 Other Seller's Representations. To Seller's knowledge:
(a) Except as listed in Exhibit K attached hereto and
incorporated herein by this reference, Seller has not
received any written notice of any current or pending
litigation or proceeding (including condemnation
proceedings) against Seller or the Property which
would, in the reasonable judgment of Seller, if
determined adversely to Seller or the Property,
materially adversely affect the Property.
(b) As of the date of this Agreement, Seller has not
entered into any contracts, subcontracts or
agreements affecting the Property which will be
binding upon Buyer after the Closing other than (i)
the Contracts listed in Exhibit B attached hereto,
(ii) the Leases, and (iii) the Permitted Exceptions.
(c) Except for defaults cured on or before the date
hereof, Seller has not received any written notice of
default under the terms of any of the Contracts
except as listed in Exhibit K attached hereto.
(d) As of the date of this Agreement, the only tenants of
the Property are the tenants listed in Exhibit N
attached hereto and incorporated herein by this
reference; provided, however, that the foregoing is
not intended (and shall not be construed) as a
representation by Seller of the parties that are in
actual possession of any portion of the Property
since there may be subtenants, licensees or assignees
that are in possession of portions of the Property of
which Seller may not be aware.
(e) Except for violations cured or remedied on or before
the date hereof and except as listed in Exhibit K
attached hereto, as of the date of this Agreement,
Seller has not received any written notice from any
governmental authority of any violation of any zoning
Law applicable to the Property.
(f) As of the date of this Agreement, except as set forth
in Exhibit B attached hereto, there are no currently
effective leasing commission agreements with respect
to the Property.
(g) No Rents or Leases have been assigned, transferred or
hypothecated by Seller (other than any liens in favor
of Seller's mortgage lender which will be released at
the Closing).
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(h) The Personal Property to be transferred to Buyer is
free and clear of liens, security interests and other
encumbrances (other than any liens in favor of
Seller's mortgage lender which will be released at
the Closing).
(i) No petition has been filed by or against Seller under
the Federal Bankruptcy Code or any similar state or
federal Law.
9.2.3 No Other Agreements. Seller has not entered into any currently
effective agreement to sell or dispose of all or any portion
of its interest in and to the Property (except for this
Agreement and any options to purchase the Property or a
portion thereof that may be contained in any of the Leases).
9.3 General Provisions.
9.3.1 No Representation as to Leases. Seller does not represent or
warrant that any particular Lease or Leases will be in force
or effect on the Closing Date or that the tenants will have
performed their obligations thereunder.
9.3.2 Seller's Warranties Deemed Modified. To the extent that Buyer
knows or is deemed to know prior to the expiration of the Due
Diligence Period that Seller's Warranties are inaccurate,
untrue or incorrect in any way, such representations and
warranties shall be deemed modified to reflect Buyer's
knowledge or deemed knowledge, as the case may be.
9.3.3 Notice of Breach; Seller's Right to Cure. If after the
expiration of the Due Diligence Period but prior to the
Closing, Buyer or any Buyer's Representative obtains actual
knowledge that any of Seller's Warranties are untrue,
inaccurate or incorrect in any material respect, Buyer shall
give Seller written notice thereof within five (5) business
days of obtaining such knowledge (but, in any event, prior to
the Closing). If at or prior to the Closing, Seller obtains
actual knowledge that any of Seller's Warranties are untrue,
inaccurate or incorrect in any material respect, Seller shall
give Buyer written notice thereof within five (5) business
days of obtaining such knowledge (but, in any event, prior to
the Closing). In either such event, Seller shall have the
right to cure such misrepresentation or breach and shall be
entitled to a reasonable adjournment of the Closing (not to
exceed ninety (90) days) for the purpose of such cure. If
Seller is unable to so cure any misrepresentation or breach,
then Buyer, as its sole remedy for any and all such materially
untrue, inaccurate or incorrect material representations or
warranties, shall elect either (a) to waive such
misrepresentations or breaches of representations and
warranties and consummate the Transaction without any
reduction of or credit against the Purchase Price, or (b) to
terminate this Agreement by written notice given to Seller on
the Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be returned to Buyer and,
thereafter, neither party shall have any further rights or
obligations hereunder except as provided in any section hereof
that by its terms expressly provides that it survives any
termination of this Agreement. If any of Seller's Warranties
are untrue, inaccurate or incorrect but are not, in the
aggregate, untrue, inaccurate or incorrect in any material
respect, Buyer shall be deemed to waive such misrepresentation
24
or breach of warranty, and Buyer shall be required to
consummate the Transaction without any reduction of or credit
against the Purchase Price. The untruth, inaccuracy or
incorrectness of Seller's Warranties shall be deemed material
only if Buyer's aggregate damages resulting from the untruth,
inaccuracy or incorrectness of Seller's Warranties are
reasonably estimated to exceed $50,000.
9.3.4 Survival; Limitation on Seller's Liability. Seller's
Warranties shall survive the Closing and not be merged therein
for a period of ninety (90) days and Seller shall only be
liable to Buyer hereunder for a breach of a Seller's Warranty
or in any of the documents executed by Seller at the Closing
with respect to which a claim is made by Buyer against Seller
on or before the ninetieth (90th) day after the date of the
Closing. Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of Seller for
breaches of Seller's Warranties shall be limited as set forth
in Section 15.15 hereof. Notwithstanding the foregoing,
however, if the Closing occurs, Buyer hereby expressly waives,
relinquishes and releases any right or remedy available to it
at law, in equity, under this Agreement or otherwise to make a
claim against Seller for damages that Buyer may incur, or to
rescind this Agreement and the Transaction, as the result of
any of Seller's Warranties being untrue, inaccurate or
incorrect if (a) Buyer knew or is deemed to know that such
representation or warranty was untrue, inaccurate or incorrect
at the time of the Closing, or (b) Buyer's damages as a result
of such representations or warranties being untrue, inaccurate
or incorrect are reasonably estimated to aggregate less than
$50,000.
ARTICLE 10 - COVENANTS
10.1 Buyer's Covenants. Buyer hereby covenants as follows:
10.1.1 Confidentiality. Buyer acknowledges that any information
heretofore or hereafter furnished to Buyer with respect to the
Property has been and will be so furnished on the condition
that Buyer maintain the confidentiality thereof. Accordingly,
Buyer shall hold, and shall cause Buyer's Representatives to
hold, in strict confidence, and Buyer shall not disclose, and
shall prohibit Buyer's Representatives from disclosing, to any
other person without the prior written consent of Seller until
the Closing shall have been consummated, (a) the terms of the
Agreement, (b) any of the information in respect of the
Property delivered to or for the benefit of Buyer whether by
any Buyer's Representatives or by Seller or any of the Seller
Parties, including, but not limited to, any information
heretofore or hereafter obtained by Buyer or any Buyer's
Representatives in connection with its Due Diligence, and (c)
the identity of Seller and if applicable the identity of any
direct or indirect owner of any beneficial interest in Seller.
In addition, Buyer hereby agrees that, after Closing, it shall
continue to hold, and shall cause Buyer's Representatives to
hold, the terms of this Agreement and, if applicable the
identity of any direct or indirect owner of any beneficial
interest in Seller in strict confidence, and Buyer shall not
disclose, and shall prohibit Buyer's Representatives from
disclosing, such information to any other person without the
25
prior written consent of Seller. In the event the Closing does
not occur or this Agreement is terminated, Buyer shall
promptly return to Seller all copies of documents containing
any of such information without retaining any copy thereof or
extract therefrom. Notwithstanding anything to the contrary
hereinabove set forth, Buyer may disclose such information (a)
on a need-to-know basis to its employees, members of
professional firms serving it or potential lenders, (b) as may
be required in order to comply with applicable Laws, and (c)
to the extent that such information is a matter of public
record. The provisions of this Subsection 10.1.1 shall survive
any termination of this Agreement.
10.1.2 Buyer's Indemnity. Buyer hereby agrees to indemnify, defend,
and hold Seller and each of the other Seller Parties free and
harmless from and against any and all Liabilities (including
reasonable attorneys' fees, expenses and disbursements)
arising out of or resulting from (a) the breach of the terms
of Subsection 10.1.1 or (b) the entry on the Real Property
and/or the conduct of any Due Diligence by Buyer or any of
Buyer's Representatives at any time prior to the Closing;
provided, however, that Buyer's obligations under this clause
(b) shall not apply to the mere discovery of a pre-existing
environmental or physical condition at the Property. The
foregoing indemnity shall survive the Closing (and not be
merged therein) or any earlier termination of this Agreement.
10.2 Seller's Covenants. Seller hereby covenants as follows:
10.2.1 Contracts.
(a) Without Buyer's prior consent, as determined below,
between the date hereof and the Closing Date Seller
shall not extend, renew, replace or modify any
Contract or enter into any new service contract or
agreement unless such Contract, service contract or
agreement (as so extended, renewed, replaced or
modified) can be terminated by the owner of the
Property without penalty on not more than thirty (30)
days' notice. Seller shall provide Buyer not less
than three (3) business days' prior written notice to
provide its consent to any such contract, extension,
renewal, replacement or modification. If, prior to
the expiration of the Due Diligence Period, Buyer
fails to object in writing to any such proposed
action within three (3) business days after delivery
of the aforementioned notice, Buyer shall be deemed
to have approved the proposed action. If, following
the expiration of the Due Diligence Period, Buyer
fails to object in writing to any such proposed
action within three (3) business days after delivery
of the aforementioned notice, Buyer shall be deemed
to have not approved the proposed action. Buyer's
consent shall not be unreasonably withheld or delayed
with respect to any such transaction that is proposed
prior to the end of the Due Diligence Period. Buyer,
in its sole and absolute discretion, shall be
entitled to grant or withhold its consent with
respect to any such transaction that is proposed
between the end of the Due Diligence Period and the
Closing.
26
(b) On or before the Closing, Seller shall terminate any
management agreements currently in effect with
respect to the Property at the sole cost and expense
of Seller.
10.2.2 Maintenance of Property. Except to the extent Seller is
relieved of such obligations by Article 12 hereof, between the
date hereof and the Closing Date Seller shall maintain and
keep the Property in a manner consistent with Seller's past
practices with respect to the Property; provided, however,
that, subject to Buyer's right to terminate this Agreement
prior to the expiration of the Due Diligence Period in
accordance with the terms of Article 5 hereof, Buyer hereby
agrees that, except for breaches of this Section 10.2.2,
Buyer, shall accept the Property subject to, and Seller shall
have no obligation to cure, (a) any violations of Laws, or (b)
any physical conditions which would give rise to violations of
Laws, whether the same now exist or arise prior to Closing.
Between the date hereof and the Closing Date, Seller will
advise Buyer of any written notice Seller receives after the
date hereof from any governmental authority of the violation
of any Laws regulating the condition or use of the Property.
10.3 Mutual Covenants.
10.3.1 Publicity. Seller and Buyer each hereby covenant and agree
that (a) prior to the Closing neither Seller nor Buyer shall
issue any Release (as hereinafter defined) with respect to the
Transaction without the prior consent of the other, except to
the extent required by applicable Law, and (b) after the
Closing, any Release issued by either Seller or Buyer shall be
subject to the review and approval of both parties (which
approval shall not be unreasonably withheld or delayed),
except to the extent required by applicable Law. If either
Seller or Buyer is required by applicable Law to issue a
Release, such party shall, at least two (2) business days
prior to the issuance of the same, deliver a copy of the
proposed Release to the other party for its review. As used
herein, the term "Release" shall mean any press release or
public statement with respect to the Transaction or this
Agreement.
10.3.2 Brokers. Seller and Buyer expressly acknowledge that Seller's
Broker and Buyer's Broker have acted as the exclusive brokers
with respect to the Transaction and with respect to this
Agreement. Seller shall pay any brokerage commission due to
Seller's Broker in accordance with the separate agreement
between Seller and Seller's Broker. Buyer shall pay any
brokerage commission due to Buyer's Broker in accordance with
the separate agreement between Buyer and Buyer's Broker.
Seller agrees to hold Buyer harmless and indemnify Buyer from
and against any and all Liabilities (including reasonable
attorneys' fees, expenses and disbursements) suffered or
incurred by Buyer as a result of any claims by Seller's Broker
or any other party claiming to have represented Seller as
broker in connection with the Transaction. Buyer agrees to
hold Seller harmless and indemnify Seller from and against any
and all Liabilities (including reasonable attorneys' fees,
expenses and disbursements) suffered or incurred by Seller as
a result of any claims by Buyer's Broker or any other party
claiming to have represented Buyer as broker in connection
with the Transaction.
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10.3.3 Tax Protests; Tax Refunds and Credits. Seller shall have the
right to continue and to control the progress of and to make
all decisions with respect to any contest of the real estate
taxes and personal property taxes for the Property due and
payable during the Closing Tax Year and all prior Tax Years.
Buyer shall have the right to control the progress of and to
make all decisions with respect to any tax contest of the real
estate taxes and personal property taxes for the Property due
and payable during all Tax Years subsequent to the Closing Tax
Year. All real estate and personal property tax refunds and
credits received after Closing with respect to the Property
shall be applied in the following order of priority: first, to
pay the costs and expenses (including reasonable attorneys'
fees, expenses and disbursements) incurred in connection with
obtaining such tax refund or credit; second, to pay any
amounts due to any past or present tenant of the Property as a
result of such tax refund or credit to the extent required
pursuant to the terms of the Leases; and third, apportioned
between Buyer and Seller as follows:
(a) with respect to any refunds or credits attributable
to real estate and personal property taxes due and
payable during the Closing Tax Year (regardless of
the year for which such taxes are assessed), such
refunds and credits shall be apportioned between
Buyer and Seller in the manner provided in Section
6.3;
(b) with respect to any refunds or credits attributable
to real estate and personal property taxes due and
payable during any period prior to the Closing Tax
Year (regardless of the year for which such taxes are
assessed), Seller shall be entitled to the entire
refunds and credits; and
(c) with respect to any refunds or credits attributable
to real estate and personal property taxes due and
payable during any period after the Closing Tax Year
(regardless of the year for which such taxes are
assessed), Buyer shall be entitled to the entire
refunds and credits.
10.3.4 Survival. The provisions of this Section 10.3 shall survive
the Closing (and not be merged therein) or earlier termination
of this Agreement.
ARTICLE 11 - FAILURE OF CONDITIONS
11.1 To Seller's Obligations. If, on or before the Closing Date, (i) Buyer
is in default of any of its obligations hereunder, or (ii) any of
Buyer's material representations or warranties are untrue in any
material respect, or (iii) the Closing otherwise fails to occur by
reason of Buyer's failure or refusal to perform its obligations
hereunder in a prompt and timely manner, then Seller may elect to (a)
terminate this Agreement by written notice to Buyer; or (b) waive the
condition and proceed to close the Transaction. If this Agreement is so
terminated, then, except if Buyer has terminated this Agreement in
accordance with Section 4.2.1(b), Section 5.3, or because of a default
on the part of Seller hereunder, Seller shall be entitled to the
Deposit as liquidated damages, and thereafter neither party to this
Agreement shall have any further rights or obligations hereunder other
than any arising under any section herein which expressly provides that
it survives the termination of this Agreement.
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11.2 To Buyer's Obligations. If, at the Closing, (i) Seller is in default of
any of its obligations hereunder, or (ii) any of Seller's material
representations or warranties are untrue in any material respect, or
(iii) the Closing otherwise fails to occur by reason of Seller's
failure or refusal to perform its obligations hereunder in a prompt and
timely manner, Buyer shall have the right, to elect, as its sole and
exclusive remedy, to (a) terminate this Agreement by written notice to
Seller, promptly after which the Deposit shall be returned to Buyer, or
(b) waive the condition and proceed to close the Transaction, or (c)
seek specific performance of this Agreement by Seller. As a condition
precedent to Buyer exercising any right it may have to bring an action
for specific performance hereunder, Buyer must commence such an action
within ninety (90) days after the occurrence of Seller's default. Buyer
agrees that its failure to timely commence such an action for specific
performance within such ninety (90) day period shall be deemed a waiver
by it of its right to commence an action for specific performance as
well as a waiver by it of any right it may have to file or record a
notice of lis pendens or notice of pendency of action or similar notice
against any portion of the Property.
ARTICLE 12 - CONDEMNATION/CASUALTY
12.1 Right to Terminate. If, after the date hereof, (a) any portion of the
Property is taken by condemnation or eminent domain (or is the subject
of a pending taking which has not yet been consummated), or (b) any
portion of the Property is damaged or destroyed (excluding routine wear
and tear), Seller shall notify Buyer in writing of such fact promptly
after obtaining knowledge thereof. If the Property is the subject of a
Major Casualty/Condemnation that occurs after the date hereof, Buyer
shall have the right to terminate this Agreement by giving written
notice to Seller no later than ten (10) business days after the giving
of Seller's notice, and the Closing Date shall be extended, if
necessary, to provide sufficient time for Buyer to make such election.
The failure by Buyer to so elect in writing to terminate this Agreement
within such ten (10) business day period shall be deemed an election
not to terminate this Agreement. If this Agreement is terminated
pursuant to this Section 12.1, the Deposit funded by Buyer to date
shall be returned to Buyer and, thereafter, this Agreement shall
terminate and neither party to this Agreement shall have any further
rights or obligations hereunder other than any arising under any
section herein which expressly provides that it shall survive the
termination of this Agreement.
12.2 Allocation of Proceeds and Awards. If a condemnation or casualty occurs
after the date hereof and this Agreement is not terminated as permitted
pursuant to the terms of Section 12.1, then this Agreement shall remain
in full force and effect, Buyer shall acquire the remainder of the
Property upon the terms and conditions set forth herein and at the
Closing:
(a) if the awards or proceeds, as the case may be, have
been paid to Seller prior to Closing, Buyer shall
receive a credit at Closing equal to (i) the amount
of any such award or proceeds on account of such
condemnation or casualty, plus (ii) if a casualty has
29
occurred and such casualty is an insured casualty, an
amount equal to Seller's deductible with respect to
such casualty, less (iii) an amount equal to the
Seller-Allocated Amounts; and
(b) to the extent that such award or proceeds have not
been paid to Seller prior to Closing, (i) if a
casualty has occurred and such casualty is an insured
casualty, Buyer shall receive a credit at Closing
equal to Seller's deductible with respect to such
casualty, less an amount equal to the
Seller-Allocated Amounts, and (ii) Seller shall
assign to Buyer at the Closing (without recourse to
Seller) the rights of Seller to, and Buyer shall be
entitled to receive and retain, such awards or
proceeds; provided, however, that within one (1)
business day after receipt of such
awards or proceeds, Buyer shall pay to Seller an
amount equal to the Seller-Allocated Amounts not
previously paid to Seller.
12.3 Insurance. Seller shall maintain the property insurance coverage
currently in effect for the Property, or comparable coverage, through
the Closing Date.
12.4 Waiver. The provisions of this Article 12 supersede the provisions of
any applicable Laws with respect to the subject matter of this Article
12.
ARTICLE 13 - ESCROW PROVISIONS
The Deposit and any other sums (including, without limitation, any interest
earned thereon) which the parties agree shall be held in escrow (herein
collectively called the "Escrow Deposits"), shall be held by the Escrow Agent,
in trust, and disposed of only in accordance with the following provisions:
(a) The Escrow Agent shall invest the Escrow Deposits in
government insured interest-bearing instruments
reasonably satisfactory to both Buyer and Seller,
shall not commingle the Escrow Deposits with any
funds of the Escrow Agent or others, and shall
promptly provide Buyer and Seller with confirmation
of the investments made. Any interest earned on the
Deposit shall be considered a part of the Deposit.
(b) If the Closing occurs, the Escrow Agent shall deliver
the Escrow Deposits to, or upon the instructions of,
Seller on the Closing Date.
(c) If for any reason the Closing does not occur, the
Escrow Agent shall deliver the Escrow Deposits to
Seller or Buyer only upon receipt of a written demand
therefor from such party, subject to the following
provisions of this Subsection (c). If for any reason
the Closing does not occur and either party makes a
written demand upon the Escrow Agent for payment of
the Escrow Deposits, the Escrow Agent shall give
written notice to the other party of such demand. If
the Escrow Agent does not receive a written objection
from the other party to the proposed payment within
30
ten (10) days after the giving of such notice, the
Escrow Agent is hereby authorized to make such
payment. If the Escrow Agent does receive such
written objection within such period, the Escrow
Agent shall continue to hold such amount until
otherwise directed by written instructions signed by
Seller and Buyer or a final judgment of a court.
(d) The parties acknowledge that the Escrow Agent is
acting solely as a stakeholder at their request and
for their convenience, that the Escrow Agent shall
not be deemed to be the agent of either of the
parties, and that the Escrow Agent shall not be
liable to either of the parties for any action or
omission on its part taken or made in good faith, and
not in disregard of this Agreement, but shall be
liable for its negligent acts and for any Liabilities
(including reasonable attorneys' fees, expenses and
disbursements) incurred by Seller or Buyer resulting
from the Escrow Agent's mistake of law respecting the
Escrow Agent's scope or nature of its duties. Seller
and Buyer shall jointly and severally indemnify and
hold the Escrow Agent harmless from and against all
Liabilities (including reasonable attorneys' fees,
expenses and disbursements) incurred in connection
with the performance of the Escrow Agent's duties
hereunder, except with respect to actions or
omissions taken or made by the Escrow Agent in bad
faith, in disregard of this Agreement or involving
negligence on the part of the Escrow Agent.
(e) Buyer shall pay any income taxes on any interest
earned on the Escrow Deposits. Buyer represents and
warrants to the Escrow Agent that its taxpayer
identification number is ▇▇-▇▇▇▇▇▇▇.
(f) The Escrow Agent has executed this Agreement in the
place indicated on the signature page hereof in order
to confirm that the Escrow Agent has received and
shall hold the Escrow Deposits in escrow, and shall
disburse the Escrow Deposits pursuant to the
provisions of this Article 13.
ARTICLE 14 - LEASING MATTERS
14.1 New Leases; Lease Modifications. After the date hereof, except as may
be permitted by the terms of this Section 14.1, Seller shall not,
without Buyer's prior written consent, (a) enter into a New Lease; (b)
modify or amend any Lease (except any modifications or amendments
entered into to reflect the exercise by a tenant of a renewal,
extension or expansion option or other right contained in such tenant's
lease); or (c) consent to any assignment or sublease in connection with
any Lease. Seller shall furnish Buyer with a written notice of the
proposed action which shall contain information regarding the proposed
action that Seller believes is reasonably necessary to enable Buyer to
make informed decisions with respect to the advisability of the
proposed action. If, prior to the expiration of the Due Diligence
Period, Buyer fails to object in writing to any such proposed action
within three (3) business days after delivery of the aforementioned
information, Buyer shall be deemed to have approved the proposed
action. If, following the expiration of the Due Diligence Period, Buyer
fails to object in writing to any such proposed action within three (3)
31
business days after delivery of the aforementioned information, Buyer
shall be deemed to have not approved the proposed action. Buyer's
consent shall not be unreasonably withheld or delayed with respect to
any such transaction that is proposed prior to the end of the Due
Diligence Period. Buyer, in its sole and absolute discretion, shall be
entitled to grant or withhold its consent with respect to any such
transaction that is proposed between the end of the Due Diligence
Period and the Closing. Notwithstanding the foregoing, if any Lease
requires that the landlord's consent be given under the applicable
circumstances, then Buyer shall be deemed ipso facto to have approved
such action. Further, if any Lease requires that landlord's consent
shall not be unreasonably withheld, then Buyer's consent shall not be
unreasonably withheld. Any notice from Buyer rejecting the proposed
action shall include a description of the reasons for Buyer's
rejection. If Buyer rejects the proposed action, Seller nevertheless
retains full right, power and authority to execute such documents as
are necessary to effect such action, and Seller shall promptly advise
Buyer of the same. The foregoing notwithstanding, in the event Buyer
has rejected the proposed action but Seller nonetheless proceeds to
effect it, Buyer shall have the right, within three (3) business days
after receipt of Seller's notice that Seller has taken such action, to
elect to terminate this Agreement by the delivery to Seller of a
written notice of termination, in which case the Deposit shall be paid
to Buyer and, thereafter, the parties shall have no further rights or
obligations hereunder other than any arising under any section herein
which expressly provides that it shall survive the termination of this
Agreement. If Buyer fails to notify Seller within such time period,
Buyer shall be deemed to have fully waived any rights to terminate this
Agreement pursuant to this Section 14.1. Seller shall deliver to Buyer
a true and complete copy of each such New Lease, renewal or extension
agreement, modification, or amendment, as the case may be, promptly
after the execution and delivery thereof.
14.2 Lease Enforcement. Seller shall have the right, but not the obligation
(except to the extent that Seller's failure to act shall constitute a
waiver of such rights or remedies), to enforce the rights and remedies
of the landlord under any Lease, by summary proceedings or otherwise
(including, without limitation, the right to remove any tenant), and to
apply all or any portion of any security deposits then held by Seller
toward any loss or damage incurred by Seller by reason of any defaults
by tenants, and the exercise of any such rights or remedies shall not
affect the obligations of Buyer under this Agreement in any manner or
entitle Buyer to a reduction in, or credit or allowance against, the
Purchase Price or give rise to any other claim on the part of Buyer.
ARTICLE 15 - MISCELLANEOUS
15.1 Buyer's Assignment. Buyer shall have the right to assign this Agreement
to an Affiliate, without Seller's consent but shall, in any event,
notify Seller in writing of any such assignment at least five (5)
business days prior to the Closing. Except as expressly provided to the
contrary by the immediately preceding sentence, Buyer shall not assign
this Agreement or its rights hereunder to any individual or entity
without the prior written consent of Seller, which consent Seller may
grant or withhold in its sole and absolute discretion, and any such
assignment shall be null and void ab initio. In the event of any
permitted assignment by Buyer, any assignee shall assume any and all
obligations and liabilities of Buyer under this Agreement but,
notwithstanding such assumption, Buyer shall continue to be liable
hereunder.
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15.2 Designation Agreement. Section 6045(e) of the United States Internal
Revenue Code and the regulations promulgated thereunder (herein
collectively called the "Reporting Requirements") require an
information return to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in connection with
the Transaction. Escrow Agent is either (x) the person responsible for
closing the Transaction (as described in the Reporting Requirements) or
(y) the disbursing title or escrow company that is most significant in
terms of gross proceeds disbursed in connection with the Transaction
(as described in the Reporting Requirements). Accordingly:
(a) Escrow Agent is hereby designated as the "Reporting
Person" (as defined in the Reporting Requirements)
for the Transaction. Escrow Agent shall perform all
duties that are required by the Reporting
Requirements to be performed by the Reporting Person
for the Transaction.
(b) Seller and Buyer shall furnish to Escrow Agent, in a
timely manner, any information requested by Escrow
Agent and necessary for Escrow Agent to perform its
duties as Reporting Person for the Transaction.
(c) Escrow Agent hereby requests Seller to furnish to
Escrow Agent Seller's correct taxpayer identification
number. Seller acknowledges that any failure by
Seller to provide Escrow Agent with Seller's correct
taxpayer identification number may subject Seller to
civil or criminal penalties imposed by law.
Accordingly, Seller hereby certifies to Escrow Agent,
under penalties of perjury, that Seller's correct
taxpayer identification number is ▇▇▇▇▇▇▇▇▇.
(d) Each of the parties hereto shall retain this
Agreement for a period of four (4) years following
the calendar year during which Closing occurs.
15.3 Survival/Merger. Except for the provisions of this Agreement which are
explicitly stated to survive the Closing, (a) none of the terms of this
Agreement shall survive the Closing, and (b) the delivery of the Deed
and any other documents and instruments by Seller and the acceptance
thereof by Buyer shall effect a merger, and be deemed the full
performance and discharge of every obligation on the part of Buyer and
Seller to be performed hereunder.
15.4 Integration; Waiver. This Agreement, together with the Exhibits hereto,
embodies and constitutes the entire understanding between the parties
with respect to the Transaction and all prior agreements,
understandings, representations and statements, oral or written, are
merged into this Agreement. Neither this Agreement nor any provision
hereof may be waived, modified, amended, discharged or terminated
except by an instrument signed by the party against whom the
enforcement of such waiver, modification, amendment, discharge or
termination is sought, and then only to the extent set forth in such
instrument. No waiver by either party hereto of any failure or refusal
by the other party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or refusal to so
comply.
33
15.5 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State in which the Property is located.
15.6 Captions Not Binding; Exhibits. The captions in this Agreement are
inserted for reference only and in no way define, describe or limit the
scope or intent of this Agreement or of any of the provisions hereof.
All Exhibits attached hereto shall be incorporated by reference as if
set out herein in full.
15.7 Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and
permitted assigns.
15.8 Severability. If any term or provision of this Agreement or the
application thereof to any persons or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term or provision to persons or circumstances
other than those as to which it is held invalid or unenforceable shall
not be affected thereby, and each term and provision of this Agreement
shall be valid and enforced to the fullest extent permitted by law.
15.9 Notices. Any notice, request, demand, consent, approval and other
communications under this Agreement shall be in writing, and shall be
deemed duly given, delivered or made at the time and on the date when
received by facsimile (provided that the sender of such communication
shall orally confirm receipt thereof by the appropriate parties and
send a copy of such communication to the appropriate parties within one
(1) business day of such facsimile) or when personally delivered as
shown on a receipt therefor (which shall include delivery by a
nationally recognized overnight delivery service) or three (3) business
days after being mailed by prepaid registered or certified mail, return
receipt requested, to the address for each party set forth below. Any
party, by written notice to the other in the manner herein provided,
may designate an address different from that set forth below.
IF TO BUYER:
CAPLEASE, LP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone #: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
34
COPY TO:
Dechert LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone #: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy #: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO SELLER:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Owner Corp
c/o PF Global Real Estate Advisors, LLC
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
The Prudential Insurance Company of America
c/o PAMG-RE Law Department
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Law Department
(▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.)
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
WITH A COPY TO:
Shearman & Sterling LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
15.10 Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original and all of which counterparts taken together
shall constitute one and the same agreement.
35
15.11 No Recordation. Seller and Buyer each agrees that neither this
Agreement nor any memorandum or notice hereof shall be recorded and
Buyer agrees (a) not to file any notice of pendency or other instrument
(other than a judgment) against the Property or any portion thereof in
connection herewith and (b) to indemnify Seller against all Liabilities
(including reasonable attorneys' fees, expenses and disbursements)
incurred by Seller by reason of the filing by Buyer of such notice of
pendency or other instrument. Notwithstanding the foregoing, if the
same is permitted pursuant to applicable Laws, Buyer shall be entitled
to record a notice of lis pendens if Buyer is entitled to seek (and is
actually seeking) specific performance of this Agreement by Seller in
accordance with the terms of Section 11.2 hereof.
15.12 Additional Agreements; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall execute
and deliver such documents as the other party shall reasonably request
in order to consummate and make effective the Transaction; provided,
however, that the execution and delivery of such documents by such
party shall not result in any additional liability or cost to such
party.
15.13 Construction. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation
of this Agreement or any amendment hereof or Exhibit hereto.
15.14 ERISA. Buyer acknowledges and agrees that it is dealing solely with
Seller in connection with the Transaction and that it is not dealing
with Prudential, Prudential Securities Incorporated, or any other
entity affiliated with Prudential (hereinafter, a "Prudential
Affiliate") in connection with any aspect of the Transaction. Buyer,
subsequent to the date hereof, shall not deal with any Prudential
affiliate in connection with any aspect of the Transaction without
Seller's consent, which may be given or withheld for any reason or no
reason. In addition, to satisfy compliance with ERISA, Buyer represents
and warrants to Seller as of the date hereof and as of the Closing Date
(as used in this Section, Seller shall be deemed to mean "Seller and
Prudential") that:
(a) Buyer is not directly or indirectly acting on behalf,
or using the assets, of any (i) employee benefit plan
within the meaning of Section 3(3) of ERISA, (ii)
plan within the meaning of Section 4975 of the
Internal Revenue Code or (iii) entity the assets of
which are treated as "plan assets" under U.S.
Department of Labor Regulation 29 CFR Section
2510.3-101 in connection with the Transaction or the
payment of the Purchase Price.
(b) Buyer is not a "governmental plan" within the meaning
of Section 3(32) of ERISA and the funds used by Buyer
to acquire the Property are not subject to state
statutes regulating investments of and fiduciary
obligations with respect to governmental plans.
(c) Neither Buyer nor any of its affiliates (within the
meaning of Part V(c) of PTE 84-14 has, or during the
immediately preceding year has exercised, the
authority to appoint or terminate Prudential as
investment manager of any assets of the employee
36
benefit plans whose assets are held by Prudential or
to negotiate the terms of any management agreement
with Seller or Prudential on behalf of any such plan.
(d) The Transaction is not specifically excluded by Part
I(b) of PTE 84-14.
(e) Buyer is not a related party of Seller or Prudential
(as defined in Part V(h) of PTE 84-14).
(f) The terms of the Transaction have been negotiated and
determined at arm's length, as such terms would be
negotiated and determined by unrelated parties.
Buyer hereby agrees to execute such documents or provide such
information as Seller (or Prudential) may reasonably require in
connection with the Transaction or to otherwise assure Seller (or
Prudential) that: (i) the Transaction is not a prohibited transaction
under ERISA or the Internal Revenue Code or any applicable similar
prohibition under state Law, (ii) the Transaction is otherwise in full
compliance with ERISA and such applicable similar state Laws, and (iii)
Seller (and Prudential) is not in violation of ERISA or any applicable
similar state Laws by compliance with this Agreement and by closing the
Transaction. Seller shall not be obligated to consummate the
Transaction unless and until the Transaction complies with ERISA and
the Internal Revenue Code and applicable similar state Laws and Seller
(and Prudential) is satisfied that the Transaction complies in all
respects with ERISA, the Internal Revenue Code and any applicable
similar state Laws. The obligations of Buyer under this section shall
survive the Closing and shall not be merged therein. Notwithstanding
any provision in this Agreement to the contrary, the representations,
warranties, covenants and agreements set forth in this Section 15.14
are intended to inure to the benefit of both Seller and Prudential and
Prudential shall be entitled to rely hereon and enforce the provisions
hereof.
15.15 Maximum Aggregate Liability. Notwithstanding any provision to the
contrary contained in this Agreement or any documents executed by
Seller pursuant hereto or in connection herewith, the maximum aggregate
liability of Seller and the Seller Parties, and the maximum aggregate
amount which may be awarded to and collected by Buyer, in connection
with the Transaction, the Property, under this Agreement and under any
and all documents executed pursuant hereto or in connection herewith
(including, without limitation, in connection with the breach of any of
Seller's Warranties for which a claim is timely made by Buyer) shall
not exceed Five Hundred Thousand Dollars ($500,000). The provisions of
this section shall survive the Closing (and not be merged therein) or
any earlier termination of this Agreement.
15.16 Time of Essence. Time is of the essence with respect to this Agreement.
15.17 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY
PROCEEDINGS BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE TRANSACTION, THIS
AGREEMENT, THE PROPERTY OR THE RELATIONSHIP OF BUYER AND SELLER
HEREUNDER. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE CLOSING
(AND NOT BE MERGED THEREIN) OR ANY EARLIER TERMINATION OF THIS
AGREEMENT.
37
15.18 Facsimile Signatures. Signatures to this Agreement transmitted by
telecopy shall be valid and effective to bind the party so signing.
Each party agrees to promptly deliver an execution original to this
Agreement with its actual signature to the other party, but a failure
to do so shall not affect the enforceability of this Agreement, it
being expressly agreed that each party to this Agreement shall be bound
by its own telecopied signature and shall accept the telecopied
signature of the other party to this Agreement.
15.19 Tax Deferred Exchange. Buyer and Seller agree that, at either Buyer's
or Seller's sole election, this transaction shall be structured as an
exchange of like-kind properties under Section 1031 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations and
proposed regulations thereunder, including, without limitation, a
"reverse like-kind exchange". The parties agree that if either wishes
to make such election, it must do so prior to the Closing Date. If
either so elects, the other shall reasonably cooperate, provided any
such exchange is consummated pursuant to an agreement that is
reasonably acceptable to Buyer and Seller and which shall be executed
and delivered on or before the Closing Date. The electing party shall
in all events be responsible for all costs and expenses related to the
Section 1031 exchange and shall fully indemnify, defend and hold the
other harmless from and against any and all liability, claims, damages,
expenses (including reasonable attorneys' and paralegal fees and
reasonable attorneys' and paralegal fees on appeal), proceedings and
causes of action of any kind or nature whatsoever arising out of,
connected with or in any manner related to such Section 1031 exchange
that would not have been incurred by the non-electing party if the
transaction were a purchase for cash. The provisions of the immediately
preceding sentence shall survive Closing and the transfer of title to
the Property to Buyer. Notwithstanding anything to the contrary
contained in this paragraph, any such Section 1031 exchange shall be
consummated through the use of a facilitator or intermediary so that
Buyer shall in no event be requested or required to acquire title to
any property other than the Property.
38
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed as of the date(s) set forth below to be effective as of the day
and year first above written.
SELLER:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OWNER CORP, a
Delaware corporation
By: PF Global Real Estate Advisors, LLC,
its agent
By: Prudential Investment Management Inc.,
its managing member
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
BUYER:
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/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: CEO
39