EXHIBIT 10.1
EXECUTION COPY
AMENDED AND RESTATED
PURCHASE AGREEMENT
Between
METROPOLIS REALTY TRUST, INC.
on the one hand
and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, L.P., as Purchaser
on the other hand
Dated as of May 7, 2002
This AMENDED AND RESTATED PURCHASE AGREEMENT (this
"Agreement") is made as of the 7th day of May, 2002, between METROPOLIS REALTY
TRUST, INC., a Maryland corporation, ("Owner"), and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, L.P., a
Delaware limited partnership ("Purchaser").
RECITALS :
Owner, through 1290 Partners, L.P., a Delaware limited
partnership and a wholly owned subsidiary of Owner ("1290
Partners"), is the owner and holder of the fee simple estate in and
to those certain plots, pieces and parcels of land (collectively,
the "Land") commonly known as ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ and more particularly described in Schedule A,
together with the buildings and other improvements located on the
Land (the building located on the Land, containing approximately
2,000,000 square feet, being referred to as the "Building"; the
fixtures equipment, furnishings, supplies and other personal
property of every nature, tangible and intangible, owned by Owner
and used in connection with the Building, being referred to as the
"Personalty," and the Building, the Land and the Personalty being
collectively referred to as the "Property").
Purchaser and 1290 Partners are parties to the Purchase and
Sale Agreement, dated as of April 16, 2002 (the "Original Purchase
and Sale Agreement"), and Purchaser, 1290 Partners and Owner hereby
desire to amend and restate the Original Purchase and Sale
Agreement in its entirety in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, the parties hereto covenant
and agree as follows:
1. DEFINITIONS.
Actions Section 10(a)(vi)
Additional Rent Section 7(b)(x)
Agreement Preamble
AP-1290 Section 4(h)
AP-1290 Obligations Section 4(h)
Apportionment Date Section 7(a)
▇▇▇▇▇ Section 4(h)
Assumed Obligations Section 7(j)
Base Rents Section 7(b)(i)
Broker Section 13(a)
Brokerage Agreements Section 10(a)(xi)
Building Recitals
business day Section 4(e)
Closing Section 16(a)
Closing Date Section 16(a)
Closing Statement Section 7(a)
Commitment Section 6(a)
Confidentiality Letter Section 27(b)
Contracts Section 3(b)
Contractual Cure Items Section 6(c)
Control Section 26(d)
Damages Section 10(a)
Default Rate Section 7(i)
Deposit Section 4(a)
Eligible Assignee Section 26(d)
Environmental Report Section 3(b)
ERISA Section 10(b)(ii)
Escrow Agent Section 4(a)
Exceptions Section 6(a)
Exchange Act Section 8(f)
Existing Loan Section 10(a)(xv)
Existing Loan Documents Section 10(a)(xv)
FIRPTA Section 15(a)(xii)
Independent Accountant Section 7(h)
Land Recitals
Leases Section 3(b)(iv)
Leasing Commissions Section 7(j)
Limited Partnership Agreement Section 4(h)
Limitation Period Section 10(a)
Loan Section 2(b)
Loan Term Sheet Section 2(b)
Major Leases Section 8(a)(iii)
Major Tenant Section 9(a)(iv)
Material Damage Section 11(b)
Material Taking Section 12(b)
Notices Section 17
Original Purchase and Sale Agreement Recitals
Overage Rent Section 7(b)(iii)
Owner Related Parties Section 3(d)
Owner Preamble
Owner Closing Certification Section 9(a)(x)
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Owner Common Stock Section 9(a)(vi)
Owner's Knowledge Section 10(a)(ii)
Permitted Encumbrances Section 5
Personalty Recitals
Persons Section 26(d)
Property Recitals
Property Taxes Section 7(a)(ii)
Purchase Price Section 4
Purchaser Preamble
Purchaser Closing Certificate Section 9(b)(v)
Purchaser's Knowledge Section 10(b)(iv)
Purchaser's Representatives Section 3
Reconciliation Statement Section 7(h)
Rent Audit Section 7(b)(viii)
Rents Section 7(a)(i)
Representation Section 10(a)
SEC Section 8(f)
SEC Disclosure Documents Section 8(f)
Security Deposits Section 10(a)(iv)
Scheduled Closing Date Section 16(a)
Special Committee Section 8(c)
Superior Offer Section 8(c)
Unsolicited Offer Section 8(c)
Survey Section 6(a)
Taking Section 12(a)
Tenant Improvements Section 7(j)
Third Party Information Section 33(c)
Title Company Section 6(a)
Title Objections Section 6(a)
Trust Section 10(b)(i)
1290 Partners Recitals
Unsolicited Offer Section 8(c)
Utilities Section 7(e)
Voting Agreements Section 8(e)
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2. TERMS AND STRUCTURE OF PURCHASE.
(a) Owner hereby agrees to sell, transfer and convey the
Property to Purchaser, and Purchaser hereby agrees to purchase and accept the
Property from Owner, in each case on and subject to the other terms and
conditions set forth in this Agreement.
(b) Not later than two (2) days prior to the Closing,
Purchaser or a designee of Purchaser hereby agrees to lend to Metropolis Realty
Holdings LLC, a Delaware limited liability company which at such time shall hold
approximately 99.9% of the issued and outstanding shares of Owner, an amount
equal to Two Hundred Million Dollars ($200,000,000) (the "Loan") on such terms
as set forth in the Term Sheet attached hereto as Exhibit 1-A (the "Loan Term
Sheet").
3. COMPLETION OF DUE DILIGENCE.
(a) Purchaser has completed its review and due diligence
with respect to the Property. Subject to the provisions of Section 3(c),
Purchaser and its agents, employees, consultants, inspectors, appraisers,
engineers and contractors (collectively, the "Purchaser's Representatives")
shall have the right through the Closing Date (unless this Agreement is earlier
terminated in accordance with its terms), from time to time, upon the advance
written notice required pursuant to, and in accordance with, Section 3(c), to
enter upon and pass through the Property during normal business hours to examine
and inspect the same.
(b) Owner has delivered and Purchaser acknowledges
receipt of all of the following:
(i) plans and specifications for the construction of
the Building;
(ii) engineering reports relating to the Premises
that have been issued or published in the past two years;
(iii) copies of the organizational documents for
Owner and 1290 Partners, including the limited partnership agreement for Owner,
all amendments thereto, and all organizational documents filed with the Delaware
Secretary of State;
(iv) copies of all the (x) leases, licenses and
occupancy agreements demising space at the Premises, including all amendments,
modifications and supplements thereto; and (y) guarantees relating to any of the
foregoing leases, licensees and occupancy agreements (the items described in
clauses (x) and (y) above collectively, the "Leases");
(v) copies of the service, maintenance, supply and
other material agreements relating to the operation of the Premises pursuant to
which there is a current or future obligation of Owner, together with all
amendments, modifications and supplements relating thereto set forth on Exhibit
D hereto, except for those agreements that Purchaser has notified Owner in
writing prior to the Closing Date that Purchaser will not assume hereunder
(collectively the "Contracts");
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(vi) copies of financial books and records relating
to the operation of the Premises;
(vii) a copy of the most recent as-built survey of
the Premises;
(viii) a copy of Owner's policy of title insurance
on the Premises, together with copies of all exceptions set forth in such policy
of title insurance on the Property;
(ix) [Intentionally deleted]
(x) a copy of that phase I environmental assessment
prepared for GE Capital Corporation by Vertex Engineering, dated August, 1999
(the "Environmental Report");
(xi) copies of all certificates of occupancy issued
with respect to the Premises;
(xii) copies of all unexpired product and equipment
warranties for the Building, including, without limitation, any roof warranties;
(xiii) a copy of most the recent ACP-5 for the
Premises;
(xiv) a copy of the most recent local law 10 report
for the Premises;
(xv) a copy of the most recent RPI filed for the
Premises; and
(xvi) copies of the five-year loss history of the
Premises for insurance purposes.
(c) In conducting any inspection of the Property,
Purchaser shall at all times comply with all laws and regulations of all
applicable governmental authorities, and neither Purchaser nor any of the
Purchaser's Representatives shall interfere with the business of Owner conducted
at the Property or disturb the use or occupancy of any occupant of the Property,
or damage the Property. In conducting the foregoing inspection, Purchaser and
Purchaser's Representatives shall at all times comply with, and shall be subject
to, the rights of the tenants under the Leases (and any persons claiming under
or through such tenants). Purchaser shall schedule and coordinate all such
inspections with Owner; provided, however, that (i) Purchaser shall give Owner
reasonable prior notice before each such entry, (ii) each such notice shall
include sufficient information identifying which of Purchaser's Representatives
are to conduct such inspection and permitting Owner to review the scope of the
proposed inspection, and (iii) neither Purchaser nor Purchaser's Representatives
shall cause or permit any borings, drillings or samplings to be done on the
Property without Owner's prior written consent in each instance. Purchaser
agrees to pay to Owner on demand the cost of repairing and restoring any damage
which Purchaser or Purchaser's Representatives shall cause to the Property. All
inspection fees, appraisal fees, engineering fees and other costs and expenses
of any kind incurred by Purchaser or Purchaser's Representatives relating to
such inspection of the Property shall be at the sole expense of Purchaser. In
connection with any inspections conducted by Purchaser or Purchaser's
Representatives, Purchaser shall:
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(i) permit Owner to have a representative present
during all such inspections;
(ii) take all actions and implement all protections
(in each case consistent with industry practice) necessary to ensure that all
actions taken in connection with such inspections, and the equipment, materials,
and substances generated, used or brought onto the Property, pose no threat to
the safety or health of persons or the environment, and cause no damage to the
Property or other persons;
(iii) furnish to Owner, at no cost or expense to
Owner, copies of all surveys, soil test results, engineering, asbestos,
environmental and other studies and reports generated by third parties not
affiliated with Purchaser;
(iv) maintain or cause to be maintained, at
Purchaser's expense, a policy of comprehensive general public liability
insurance, with a broad form contractual liability endorsement covering
Purchaser's indemnification obligations contained in Section 3(d) hereof.
Purchaser shall deliver a certificate evidencing such insurance to Owner upon
request; and
(v) not allow any such inspections or any and all
other activities undertaken by Purchaser or Purchaser's Representatives to
result in any liens, judgments or other encumbrances being filed or recorded
against the Property, and Purchaser shall, at its sole cost and expense,
promptly discharge of record any such liens or encumbrances that are so filed or
recorded (including, without limitation, liens for services, labor or materials
furnished).
(d) Purchaser agrees to indemnify and hold Owner and its
affiliates and their respective shareholders, officers, directors, partners,
principals, members, employees and agents, and any successors or assigns of the
foregoing (collectively with Owner, the "Owner Related Parties") harmless from
and against any and all losses, costs, damages, liens, claims, liabilities or
expenses (including, but not limited to, reasonable attorneys' fees, court costs
and disbursements) incurred by any of the Owner Related Parties arising from or
by reason of Purchaser's and/or Purchaser's Representatives' inspection of, the
Property, or any tests, inspections or other due diligence conducted by or on
behalf of Purchaser (whether or not the same shall occur on or prior to the date
hereof), except that the foregoing will not be construed to cover the
negligence, willful misconduct or bad faith of any Owner Related Party, or any
actions required to be taken by law as a result of the findings generated by
Purchaser's activities; provided, however, that Purchaser agrees to use
commercially reasonable efforts to maintain confidential and not to disclose any
of its findings to any third party (other than to persons acting on its behalf,
and to potential lenders and potential investors, and to any other parties to
whom disclosure may be required by law) without the prior written consent of
Owner, including without limitation, any governmental authority.
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4. PURCHASE PRICE.
The purchase price ("Purchase Price") for the Premises shall
be Seven Hundred Forty-Five Million Five Hundred Thousand Dollars
($745,500,000). The Purchase Price shall be payable as follows:
(a) Prior to the execution of this Agreement by
Purchaser, Purchaser has delivered to Fidelity National Title Insurance Company,
Atlanta Office, as escrow agent (when acting as escrow agent, the "Escrow
Agent"), the amount of Twenty Five Million Dollars ($25,000,000) by wire
transfer in immediately available federal funds to the escrow account of Escrow
Agent in accordance with the wire instructions set forth on Exhibit 1 (such
deposit which is made pursuant to this subsection (a), together with any
additions thereto made by Purchaser pursuant to Section 16(b), and all interest
accrued thereon, the "Deposit"), and the Escrow Agent hereby acknowledges the
receipt thereof;
(b) Escrow Agent has caused, and shall cause, the Deposit
to be invested in commercial paper, corporate promissory notes or other
obligations maturing on or prior to Closing, and, as at any date of
determination, rated A or better (or, in the case of commercial paper, A-1 or
better) by S&P, or, A2 or better (or, in the case of commercial paper, P-1 or
better) by ▇▇▇▇▇'▇, or insured certificates of deposit maturing on or prior to
Closing of any commercial bank that is a member of the Federal Reserve System,
the short-term obligations of which are rated A2 or better by ▇▇▇▇▇'▇ and A or
better by S&P, as designated in writing from time to time by Purchaser to Escrow
Agent (provided, that Purchaser shall not designate any such investment which
has a maturity date occurring after the Closing Date). Escrow Agent shall not be
liable for (1) any loss of such investment (unless due to Escrow Agent's gross
negligence or willful misconduct) or (2) any failure to attain a favorable rate
of return on such investment. Escrow Agent shall deliver the Deposit, to Owner
or to Purchaser, as the case may be, under the following conditions:
(i) The Deposit shall be delivered to Owner on the
Closing Date upon receipt by Escrow Agent of a statement executed by Owner and
Purchaser that the Deposit may be released; or
(ii) The Deposit shall be delivered to Owner
following receipt by Escrow Agent of written demand therefor from Owner stating
that Purchaser has defaulted in the performance of any of its material
obligations required to be performed by Purchaser on or prior to the Closing
(which notice will generally state the basis for the claim of default) if
Purchaser shall not have given written notice of objection in accordance with
the provisions set forth below in Section 4(c); provided, however, if Owner only
demands a portion of the Deposit, Escrow Agent shall only deliver such portion
of the Deposit to Owner and the remainder of the Deposit shall be delivered by
Escrow Agent to Purchaser; or
(iii) The Deposit shall be delivered to Purchaser
following receipt by Escrow Agent of written demand therefor from Purchaser
stating that Owner has defaulted in the performance of any of its material
obligations required to be performed by Owner on or prior to the Closing (which
notice will generally state the basis for the claim of default) or that this
Agreement was terminated under circumstances entitling Purchaser to the return
of the Deposit, and specifying the Section of this Agreement which entitles
Purchaser to the return of the Deposit, if Owner shall not have given written
notice of objection in accordance with the provisions set forth below in Section
4(c); or
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(iv) The Deposit shall be delivered to Purchaser or
Owner as directed by joint written instructions of Owner and Purchaser.
(c) Upon the filing of a written demand for the Deposit
by Owner or Purchaser, pursuant to subsection (ii) or (iii) above, Escrow Agent
shall promptly give written notice thereof (including a copy of such demand) to
the other party. The other party shall have the right to object to the delivery
of the Deposit, by giving written notice of such objection to Escrow Agent at
any time within ten (10) days after such party's receipt of written notice from
Escrow Agent, but not thereafter. Such notice shall set forth the basis for
objecting to the delivery of the Deposit. Upon receipt of such notice of
objection, Escrow Agent shall promptly give a copy of such notice to the party
who filed the written demand. If Escrow Agent shall have timely received such
notice of objection, Escrow Agent shall continue to hold the Deposit until (i)
Escrow Agent receives joint written notice from Owner and Purchaser directing
the disbursement of the Deposit, in which case Escrow Agent shall then disburse
the Deposit in accordance with said direction, or (ii) litigation is commenced
between Owner and Purchaser, in which case Escrow Agent shall deposit the
Deposit with the clerk of the court in which said litigation is pending and
notify Owner and Purchaser in writing that it has deposited the Deposit with
such clerk, or (iii) Escrow Agent takes such affirmative steps as Escrow Agent
may elect, at Escrow Agent's option, in order to terminate Escrow Agent's duties
hereunder, including but not limited to depositing the Deposit (and notifying
Owner and Purchaser that it has deposited the Deposit) in court and commencing
an action for interpleader, the costs thereof to be borne by whichever of Owner
or Purchaser is the losing party.
(d) Escrow Agent may rely and act upon any instrument or
other writing reasonably believed by Escrow Agent to be genuine and purporting
to be signed and presented by any person or persons purporting to have authority
to act on behalf of Owner or Purchaser, as the case may be, and shall not be
liable in connection with the performance of any duties imposed upon Escrow
Agent by the provisions of this Agreement, except for Escrow Agent's own gross
negligence, willful misconduct or default. Escrow Agent shall have no duties or
responsibilities except those set forth herein. Escrow Agent shall not be bound
by any modification, cancellation or rescission of this Agreement unless the
same is in writing and signed by Purchaser and Owner and delivered to the Escrow
Agent, and, if Escrow Agent's duties hereunder are affected, unless Escrow Agent
shall have given prior written consent thereto. Escrow Agent shall be reimbursed
by Owner and Purchaser for any expenses (including reasonable legal fees and
disbursements of outside counsel, including all of Escrow Agent's fees and
expenses with respect to any interpleader action incurred in connection with
this Agreement), and such liability shall be joint and several; provided that,
as between Purchaser and Owner, the prevailing party in any dispute over the
Deposit shall be entitled to reimbursement from the other of any such expenses
paid to Escrow Agent. If the Escrow Agent shall be uncertain as to Escrow
Agent's duties or rights hereunder, or shall receive instructions from Purchaser
or Owner that, in Escrow Agent's opinion, are in conflict with any of the
provisions hereof, Escrow Agent shall be entitled to hold the Deposit, until any
of the events described in clauses (i); (ii) or (iii) of Section 4(c) occurs.
After delivery of the Deposit in accordance herewith, Escrow Agent shall have no
further liability or obligation of any kind whatsoever.
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(e) Escrow Agent shall have the right at any time to
resign upon ten (10) business days prior written notice to Owner and Purchaser.
Owner and Purchaser shall jointly select a successor Escrow Agent and shall
notify Escrow Agent of the name and address of such successor Escrow Agent
within ten (10) business days after receipt of notice of Escrow Agent of its
intent to resign. If Escrow Agent has not received notice of the name and
address of such successor Escrow Agent within such period, Escrow Agent shall
have the right to select on behalf of Owner and Purchaser a bank or trust
company, located in New York City, with a minimum net worth of $2,000,000,000,
to act as successor Escrow Agent hereunder. At any time after the ten (10)
business day period, Escrow Agent shall have the right to deliver the Deposit,
to any successor Escrow Agent selected hereunder, provided such successor Escrow
Agent shall execute and deliver to Owner and Purchaser an assumption agreement
whereby it assumes all of Escrow Agent's obligations hereunder. Upon the
delivery of all such amounts and such assumption agreement, the successor Escrow
Agent shall become the Escrow Agent for all purposes hereunder and shall have
all of the rights and obligations of the Escrow Agent hereunder, and the
resigning Escrow Agent shall have no further responsibilities or obligations
hereunder. As used in this Agreement, the term "business day" shall mean every
day other than Saturdays, Sundays, all days observed by the federal or New York
State government as legal holidays and all days on which commercial banks in New
York State are required by law to be closed.
(f) At the Closing, the Deposit shall be a credit against
the Purchase Price, and Purchaser shall deliver on the Closing Date by wire
transfer of immediately available federal funds to an account designated by
Owner no later than two (2) business days prior to Closing an amount equal to
the Purchase Price less the Deposit, subject to adjustments and apportionments
as set forth herein.
(g) All monies payable by Purchaser at the Closing under
this Agreement, unless otherwise specified in this Agreement, shall be paid by
Purchaser causing said amount to be wire transferred to a bank or banks in the
United States advised in writing by Owner in immediately available federal funds
for credit to such bank account or accounts, and divided into such amounts as
may be required to consummate the transactions contemplated by this Agreement.
(h) To the extent AP-1290 LLC, a Delaware limited
liability company ("AP-1290"), shall not make all or any portion of its (i)
$82,625,000 initial capital contribution and (ii) $1,100,000 payment for its
portion of the closing costs for the new loan for the Property (the "AP-1290
Obligations") in accordance with and subject to the terms of that certain
Limited Partnership Agreement, dated as of the date hereof (the "Limited
Partnership Agreement"), by and among JT 1290 Corp., Jamestown 1290 Partners,
and AP-1290, then, (i) Purchaser may deliver a note made by Apollo Real Estate
Investment Fund, L.P. ("▇▇▇▇▇") in favor of Owner in an amount not to exceed
$83,725,000, which note shall be secured by any dividends otherwise payable by
Owner from the proceeds of the sale hereunder, to ▇▇▇▇▇, (ii) Owner shall have a
security interest in the dividends payable to ▇▇▇▇▇ and immediately upon receipt
of such dividends ▇▇▇▇▇ shall pay the face amount of the note, and (iii)
Purchaser shall receive a credit against the Purchase Price in an amount equal
to face amount of such note.
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5. STATUS OF TITLE.
Subject to the terms and provisions of this Agreement, on the
Closing Date the Property shall be subject only to the exceptions listed on
Exhibit 2 attached hereto and made a part hereof and matters approved and deemed
approved hereunder and to the following (collectively, the "Permitted
Encumbrances"):
(a) Property Taxes which are a lien but not yet due and
payable, subject to proration in accordance with Section 7;
(b) any utility company rights, easements and franchises
for electricity, water, steam, gas, telephone or other service or the right to
use and maintain poles, lines, wires, cables, pipes, boxes and other fixtures
and facilities in, over, under and upon the Property, provided that the same do
not materially adversely affect the present use of the Property;
(c) the Leases in effect at the Closing and the rights
and interests held by tenants, as tenants only, under such Leases and all
persons claiming by, through or under such tenants; provided, however, the
foregoing is not intended to waive any condition to the Closing relating to the
breach of any representation or warranty relating to Leases;
(d) the terms and conditions of the Existing Loan
Documents, provided that Owner shall be responsible for the payment of all sums
secured by the Existing Loan Documents;
(e) building codes and restrictions heretofore and
hereafter adopted by any public agency;
(f) right, lack of right or restrictions on the right of
any owner of the Property to construct or maintain any vault or vaulted area in
or under the sidewalks abutting the Property, any licensing statute, ordinance
or regulation, and the terms of any license pertaining thereto, and any fees for
vault space which may hereafter be assessed;
(g) present and future zoning laws, ordinances,
resolutions, orders and regulations of all municipal, county, state and federal
governments having jurisdiction over the Property and the use thereof;
(h) all municipal violations of record;
(i) possible lack of or revocable nature of the right, if
any, to maintain or use any space, facilities or appurtenances outside the
building lines, whether on, over or under the land, including, without
limitation, all vaults, signs and sidewalk openings;
(j) any state of facts shown on the Survey (as
hereinafter defined), and any change since the date of such Survey that an
accurate survey of the Property or a physical inspection thereof would,
disclose, including without limitation, all encroachments and projections of the
Property upon or over streets or adjacent premises and all encroachments and
projections on or over the Property or any variations between tax lot lines and
lines of record title of the Property, provided that such changes do not render
title unmarketable;
(k) any lien or encumbrance caused by Purchaser or any of
its agents.
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6. TITLE INSURANCE; LIENS.
(a) Purchaser acknowledges receipt from Owner on or prior
to the date hereof of an as-built ALTA survey of the Property, dated June 7,
1963 and last redated March 18, 2002 (the "Survey") and a commitment for an
owner's policy of title insurance dated January 8, 2002 (the "Commitment") with
respect to Owner's ownership of the Property from Fidelity National Title
Insurance Company, Atlanta Office (the "Title Company"). Owner acknowledges that
Purchaser may obtain title insurance and subsequent title searches and
continuations from any nationally recognized title insurance company.
(i) Prior to the execution of this Agreement,
Purchaser shall have notified Owner in writing if the Commitment or Survey shall
set forth any material liens, encumbrances, encroachments or other title
exceptions, other than the Permitted Encumbrances, to which Purchaser does not
consent, and which are not otherwise permitted hereunder (each, an "Exception"),
and such notice shall specify the Exceptions to which Purchaser objects (the
"Title Objections"). If Purchaser has not delivered such notice prior to the
execution of this Agreement, Purchaser shall be deemed to have waived its right
to object to any Exceptions (and the same shall not be deemed Title Objections
and shall be deemed Permitted Encumbrances), except as to matters arising after
the date of the Commitment, which shall be subject to the terms forth in Section
6(d). If Purchaser shall deliver such notice prior to execution of this
Agreement, any Exceptions which are not objected to in such notice shall not
constitute Title Objections and shall be deemed Permitted Encumbrances.
(b) If Owner notifies Purchaser within ten (10) days
after the Owner's receipt of any notice of any Title Objection that it is unable
or unwilling to eliminate any such Title Objection which is not a Contractual
Cure Item, then unless the same is waived by Purchaser, Purchaser may elect by
written notice to Owner delivered within ten (10) days after receipt of such
notice from Owner to (i) accept the title to the Property subject to such Title
Objection without abatement of the Purchase Price, in which event such Title
Objection shall be deemed to be, for all purposes, a Permitted Encumbrance, or
(ii) terminate this Agreement, in which event Purchaser shall be entitled to a
return of the Deposit. Upon the timely giving of any termination notice under
clause (ii), this Agreement shall terminate and neither party hereto shall have
any further rights or obligations hereunder other than those which are expressly
provided to survive the termination hereof.
(c) Owner shall be required, at or prior to the Closing,
to take one of the following actions with respect to any Contractual Cure Item:
(x) to satisfy such Contractual Cure Item (by payment, bonding or otherwise), or
(y) to cause such Contractual Cure Item to be satisfied by delivery to the Title
Company at the Closing of an affidavit or other document required by the Title
Company. The following shall constitute "Contractual Cure Items": (i) Property
Taxes then due and payable as of the Closing Date and not being apportioned by
the parties pursuant to Section 7; (ii) any Title Objections which arise from
the act or failure to act of Owner and can be removed by the payment of a
liquidated sum of money and (iii) those items listed on Exhibit 3.
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(d) Purchaser shall have the right to update the
Commitment prior to Closing and make objection by written notice to Owner with
respect to any matter which arises after the date of the Commitment but prior to
Closing, which matters shall constitute valid "Exceptions" and which notice
shall constitute valid "Title Objections"; provided, however, that Purchaser
shall be able to terminate this Agreement with respect to such additional Title
Objections (which do not constitute Contractual Cure Items) only if Owner (x)
fails to eliminate such Title Objection on or prior to the Closing Date and (y)
such Title Objection, individually or in the aggregate, would have a material
adverse effect on the Property; provided, further, that if such matter would not
constitute a material adverse effect on the Property, then Owner shall use
commercially reasonable efforts to eliminate such Title Objections on or prior
to the Closing Date, and if such Title Objections is not so eliminated by such
time, then Purchaser shall be deemed to have accepted title to the Property
subject to such Title Objections without abatement of the Purchase Price and
such Title Objection will deemed to be, for all purposes, a Permitted
Encumbrance.
7. APPORTIONMENTS.
(a) The following shall be apportioned between Purchaser
and Owner as of 11:59 p.m. on the day immediately preceding the Closing Date
(the "Apportionment Date") on the basis of the actual number of days of the
month which shall have elapsed as of the Closing Date and based upon the actual
number of days in the month and a 365 day year, and reflected on a closing
statement (the "Closing Statement") to be agreed upon by Purchaser and Owner and
executed at Closing:
(i) subject to Section 7(b), prepaid rents, fixed
rents and additional rents payable pursuant to the Leases (including, without
limitation, operating expense escalation payments, real estate tax escalation
payments and percentage rent, if any, payable under the Leases) (collectively,
"Rents") and all other revenue or income derived with respect to the Property,
all on an if, as and when collected basis;
(ii) real estate taxes, sewer rents and taxes, water
rates and charges, vault charges and taxes, business improvement district taxes
and assessments and any other governmental taxes, charges or assessments levied
or assessed against the Property (collectively, "Property Taxes"), on the basis
of the respective periods for which each is assessed or imposed, to be
apportioned in accordance with Section 7(c);
(iii) fuel, if any, as reasonably estimated by
Owner's supplier, at Owner's cost, together with any sales taxes payable in
connection therewith, if any (a letter from Owner's fuel supplier shall be
conclusive evidence as to the quantity of fuel on hand and Owner's cost
therefor);
(iv) prepaid fees, if any, for licenses and other
permits which will be transferred by Owner to Purchaser on the Closing Date;
(v) any amounts prepaid or payable by Owner under
the Contracts in effect as of the Closing Date;
(vi) business improvement district dues, if any;
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(vii) such other items as are customarily
apportioned between sellers and purchasers of real properties of a type similar
to the Property and located in the City, County and State of New York.
(b) (i) Monthly base rents (collectively, "Base Rents")
under the Leases shall be adjusted and prorated on an if, as and when collected
basis. Base Rents collected after the Closing Date from tenants who owe Base
Rents for periods prior to the Closing Date, shall be applied, (A) first, in
payment of Base Rents for the month in which received; (B) second, in payment of
Base Rents for the month in which the Closing Date occurs; (C) third, in payment
of Base Rents for any period after Closing Date for which Base Rent has not been
paid; and (D) fourth, in payment of Base Rents for the periods prior to the
Closing Date. Each such amount, less reasonable collection costs, shall be
adjusted and prorated as provided above and the party receiving such amount
shall, within ten (10) business days, pay to the party entitled thereto the
portion thereof to which it is entitled.
(ii) Purchaser will use commercially reasonable
efforts, from and after the Closing, to demand payment of and collect rent and
Additional Rent (as hereinafter defined) arrearages owed to Owner by any tenant
for the benefit of Owner. Owner will have the right, after the Closing, to
pursue any remedies against such tenants; provided, however, that Owner will not
have the right to seek eviction of any tenant or otherwise commence any
litigation against any tenant. Owner shall not compromise, waive or settle any
claim against a tenant with respect to rent and Additional Rent arrearages in
respect of any period prior to the Closing without the prior written consent of
Purchaser.
(iii) With respect to any Lease that provides for
the payment of additional or escalation rent based upon (A) a percentage of a
tenant's gross sales during a specified annual or other period or (B) increases
in real estate taxes, operating expenses, labor costs, cost of living indices or
▇▇▇▇▇▇'▇ wages (collectively, "Overage Rent"), such Overage Rent shall be
adjusted and prorated on an if, as and when collected basis.
(iv) Subject to the other provisions of this Section
7, for any Overage Rent payable for an accounting period that expired prior to
the Closing Date, but which shall be paid after the Closing Date, such entire
amount shall belong to Owner and if Purchaser shall receive the same, Purchaser
shall pay such amount (less reasonable collection costs) to Owner within ten
(10) business days after receipt thereof.
(v) Overage Rent payable for the accounting period
in which the Closing Date occurs shall be apportioned between Purchaser and
Owner based upon the ratio that the portion of such accounting period prior to
the Closing Date bears to the entire such accounting period. If, prior to the
Closing Date, Owner receives any installments of Overage Rent attributable to
Overage Rent for periods from and after the Closing Date, such sums shall be
apportioned at the Closing Date. Any installments of Overage Rent attributable
to Overage Rent for periods prior to the Closing Date, subject to the other
provisions of this Section, shall belong to Owner and if Purchaser shall receive
the same, Purchaser shall pay such amount (less reasonable collection costs) to
Owner within ten (10) business days.
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(vi) Any payment by tenants of Overage Rent shall be
applied to Overage Rents then due and payable in the following order of
priority: (A) first, in payment of Overage Rents for the month in which
received; (B) second, in payment of Overage Rents for the month in which the
Closing Date occurs; (C) third, in payment of Overage Rents for any period after
the Closing Date in which Overage Rents have not been paid; and (D) fourth, in
payment of Overage Rents for the periods prior to the Closing Date. Each such
amount, less reasonable collection costs, shall be adjusted and prorated as
provided above and the party receiving such amount shall, within ten (10)
business days, pay to the party entitled thereto the portion thereof to which it
is entitled.
(vii) Subject to the payment priority set forth in
clause (vi) above, to the extent any portion of Overage Rent is required to be
paid monthly by tenants on account of estimated amounts for the current period,
and at the end of each calendar year (or, if applicable, at the end of each
lease year or tax year or any other applicable accounting period), such
estimated amounts are to be recalculated based upon the actual expenses, taxes
and other relevant factors for that calendar (lease or tax) year, with the
appropriate adjustments being made with such tenants, then such portion of the
Overage Rent shall be prorated between Purchaser and Owner on the Closing Date
based on such estimated payments (i.e., with (x) Owner entitled to retain all
monthly installments of such amounts with respect to periods prior to the
calendar month in which the Closing Date occurs, to the extent such amounts are
as of the Closing Date estimated to equal the amounts ultimately due to Owner
for such periods, (y) Owner and Purchaser apportioning all monthly installments
of such amounts with respect to the calendar month in which the Closing Date
occurs and (z) Purchaser entitled to all monthly installments after the Closing.
The parties shall make final reconciliation of such estimates pursuant to the
provisions of Section 7(i) below.
(viii) To the extent that any tenant, pursuant to a
right contained in an existing tenant lease, conducts an audit prior to December
26, 2002 respecting any Overage Rent or Additional Rent calculation (a "Rent
Audit") for an accounting period that expires prior to the Closing Date, or
otherwise becomes entitled to a refund of Overage Rent or Additional Rent with
respect to a period that expires prior to or includes the Closing Date, Owner
shall be liable for its prorated share of any refunds due to such tenant or be
the recipient of any additional payments due by such tenant as the result of
such Rent Audit (and will bear all costs relating to the Rent Audit which are
the responsibility of the landlord under the lease in question (or a pro-rata
share thereof if also covering subsequent periods including any period in which
the Closing occurs)). As an example, if the landlord is required to reimburse a
tenant for an audit covering only the operating expenses for the operating year
before the Closing, that obligation shall be solely Owner's, but if the audit
covers both the operating year before the Closing and the operating year in
which the Closing occurs, such audit cost shall first be split between the two
years based on the relative dollar amount to be repaid to the tenant for each
such year, with Owner bearing all of the costs allocated to the pre-closing
operating year, and then the amount allocated to the year in which the Closing
occurs shall be apportioned between Owner and Purchaser based on the ownership
of the Property during such operating year. The results of any Rent Audit for
any accounting period in which the Closing Date occurs shall be apportioned in
the same manner as Overage Rent. Rent Audits for accounting periods commencing
after the Closing Date shall each be settled by Purchaser in accordance with the
applicable existing Lease. Any amounts required to be paid by Owner under this
paragraph (viii) shall be paid on or before December 26, 2002.
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(ix) To the extent that any amounts are paid or
payable by a tenant under a Lease in advance of the period to which such expense
applies, whether as a one time payment or in installments (e.g. for real
property tax escalations), such amounts shall be apportioned as provided above
but based upon the period for which such payments were or are being made.
(x) To the extent tenants pay items of Rent which
are not Base Rents or Overage Rents, such as charges for electricity, steam,
water, cleaning, overtime services, sundry charges or other charges of a similar
nature (collectively, "Additional Rent"), such rent shall be applied based on
the period covered by such Additional Rent charge (i.e., the period the
applicable work, utility or service was provided). If the period to which a
payment of Additional Rent applies cannot reasonably be determined based on the
context of such payment, then such Additional Rent shall be applied to the
period(s) determined in accordance with paragraph (i) above in the same order of
priority as Base Rent. For any Additional Rent payable for a period that expired
prior to the Closing Date, but which shall be paid after the Closing Date, the
entire amount thereof shall belong to Owner and if Purchaser shall receive the
same, Purchaser will pay such amount to Owner within ten (10) business days.
Additional Rent payable for the period in which the Closing Date occurs shall be
apportioned between Owner and Purchaser based upon the same method used to
apportion the underlying expense being billed to such tenant, or if such expense
is not being apportioned, then based upon the ratio that the portion of such
accounting period prior to the Closing Date bears to the entire such accounting
period.
(xi) To the extent any payment received from a
tenant after the Closing does not indicate whether the payment is for an item of
Base Rent, Overage Rent or Additional Rent, and the same can not be clearly
determined from the context of such payment (e.g., it is accompanied by an
invoice for an item of Base Rent, Overage Rent or Additional Rent in such
amount), then such payment will be applied (x) first to payment of any Base Rent
then due or delinquent, in accordance with paragraphs (i) and (ii) above, (y)
second to payment of any Additional Rent then due or delinquent, in accordance
with paragraph (x) above and (z) third to any Overage Rent then due or
delinquent, in accordance with paragraphs (iv)-(ix) above.
(c) Property Taxes shall be apportioned on the basis of
the fiscal period for which assessed. If the Closing Date shall occur either
before an assessment is made or a tax rate is fixed for the tax period in which
the Closing Date occurs, the apportionment of such Property Taxes based thereon
shall be made at the Closing Date by applying the tax rate for the preceding
year to the latest assessed valuation, but, promptly after the assessment and/or
tax rate for the current year are fixed, the apportionment thereof shall be
recalculated and Owner or Purchaser, as the case may be, shall make an
appropriate payment to the other within ten (10) business days based on such
recalculation. If as of the Closing Date the Property or any portion thereof
shall be affected by any special or general assessments which are or may become
payable in installments of which the first installment is then a lien and has
become payable, Owner shall only be responsible for the unpaid installments of
such assessments which are due prior to the Closing Date and Purchaser shall pay
such installments which are due on or after the Closing Date.
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(d) If there are water meters at the Property, the
unfixed water rates and charges and sewer rents and taxes covered by meters, if
any, shall be apportioned (i) on the basis of an actual reading done within two
(2) days prior to the Apportionment Date, or (ii) if such reading has not been
made, on the basis of the last available reading. If the apportionment is not
based on an actual current reading, then upon the taking of a subsequent actual
reading, the parties shall, within ten (10) business days following notice of
the determination of such actual reading, readjust such apportionment and Owner
shall deliver to Purchaser, or Purchaser shall deliver to Owner, as the case may
be, the amount determined to be due upon such readjustment.
(e) Owner will use commercially reasonable efforts to
have meters for other utilities (not the responsibility of tenants) read on or
just prior to the Closing Date. Charges for all electricity, steam, gas and
other utility services (collectively, "Utilities") shall be for Owner's account
up to the Apportionment Date and, from and after the Apportionment Date, all
utilities shall be for Purchaser's account. Each Utility shall be apportioned on
the basis of actual current readings or, if such readings have not been made, on
the basis of the most recent bills that are available. If any apportionment is
not based on an actual current reading, then upon the taking of a subsequent
actual reading, the parties shall, within ten (10) business days following
notice of the determination of such actual reading, readjust such apportionment
and Owner shall promptly deliver to Purchaser, or Purchaser shall promptly
deliver to Owner, as the case may be, the amount determined to be due upon such
adjustment.
(f) Purchaser shall have no right to receive any rental
insurance proceeds which relate to the period prior to the Closing Date, all of
which shall be the property of Owner.
(g) With respect to all tax years prior to the tax year
in which the Closing occurs, Purchaser shall be entitled to commence, continue
and control the progress of, and shall be entitled to make all decisions with
respect to, any proceeding or proceedings, whether or not now pending, for the
reduction of the assessed valuation of the Property, and, in its sole
discretion, to try or settle the same. Any such proceeding or proceedings with
respect to the tax year in which the Closing occurs, and all decisions regarding
the commencement, continuation, trial or settlement of such proceeding or
proceedings, shall be controlled, subsequent to the Closing, by Purchaser. Each
of Purchaser and Owner agrees to cooperate with the other in connection with the
prosecution of any such proceedings and to take all steps, whether before or
after the Closing Date, as may be necessary to carry out the intention of the
foregoing, including, without limitation, the delivery to any other party to
this Agreement, upon demand, of any relevant books and records, including
receipted tax bills and cancelled checks used in payment of such taxes, the
execution of any and all consents or other documents, and the taking of any act
necessary for the collection of such refund by the requesting party. During its
period of ownership, Owner has challenged the Property assessments for tax years
1990-1991 through 2001-2002 and has settled and received payment on account of
tax years 1990/91 through 1996/97. All refunds or credits owed to any tenants
presently in occupancy on account of such refund(s) have been paid or credited
by Owner in full. Any subsequent tax refunds belonging in whole or in part to
Owner, shall be paid to Owner after first deducting therefrom any payments owed
to tenants on account thereof or, if such payment is made directly to Owner or
1290 Partners, Owner shall pay to Purchaser such amounts (if any) owed to
tenants on account thereof within ten (10) days after receipt of such refund.
16
(h) No later than December 1, 2002, Purchaser shall
prepare and deliver to Owner (or its successor) for the review and approval of
Owner a final reconciliation of the Closing Statement reasonably satisfactory to
Owner in form and substance (the "Reconciliation Statement") setting forth the
final determination of the adjustments and prorations provided for herein and
setting forth any items which are not capable of being determined at such time
(and the manner in which such items shall be determined and paid). Owner and
Purchaser shall use good faith efforts to agree upon the Reconciliation
Statement by December 15, 2002. If Owner and Purchaser cannot agree upon the
Reconciliation Statement by December 15, 2002, then Owner and Purchaser shall,
within five (5) days thereafter (i) appoint Ernst & Young LLP (the "Independent
Accountant"), to resolve all disputes in connection with the Reconciliation
Statement for purposes of this Agreement within thirty (30) days after its
appointment; and (ii) present in writing to the Independent Accountant, all work
papers and other information used to prepare the Reconciliation Statement, and
such additional information on their behalf as they shall desire supporting
their positions. The resolution of the dispute rendered by such Independent
Accountant shall be final and binding upon the Owner and Purchaser. The fees and
expenses of the Independent Accountant shall be borne by the non-prevailing
party in the dispute.
(i) The net amount due Owner or Purchaser, if any, by
reason of adjustments to the closing statement executed by the parties at
Closing, as shown in the Reconciliation Statement, shall be readjusted based
upon the terms of this Section 7. If, based upon such readjustments, Owner is
entitled to additional amounts, Purchaser will pay such amounts to Owner within
ten (10) days following the approval by Owner and Purchaser but no later than
December 26, 2002, unless there is a dispute submitted to the Independent
Accountant, then within ten (10) days following the resolution of such dispute
by the Independent Accountant. If, based upon such readjustments, Purchaser is
entitled to additional amounts, Owner shall pay such amounts to Purchaser within
ten (10) days following the approval by Owner and Purchaser of the
Reconciliation Statement, but no later than December 26, 2002, unless there is a
dispute submitted to the Independent Accountant, then within ten (10) days
following the resolution of such dispute by the Independent Accountant. The
adjustments, prorations and determinations agreed to by Owner and Purchaser in
Reconciliation Statement or as determined by the Independent Accountant shall be
conclusive and binding on the parties hereto. If any payment to be made after
the Closing under this Section 7(i) shall not be paid when due hereunder, the
same shall bear interest (which shall be paid together with the applicable
payment hereunder) from the date due until so paid at a rate per annum equal to
the Prime Rate (as such rate may vary from time to time) as reported in the Wall
Street Journal plus 3% (the "Default Rate").
(j) On the Closing Date, Purchaser agrees to assume and
become responsible for (i) all of Owner's tenant improvement obligations (the
"Tenant Improvements") and leasing commissions ("Leasing Commissions") set forth
on Schedule Q hereto, (ii) the landlord's obligations under the Leases arising
from and after the Closing Date and (iii) the obligations of Owner or 1290
Partners under the Contracts arising from and after the Closing Date
(collectively, the "Assumed Obligations"). Except for the Assumed Obligations,
Permitted Encumbrances, Leases, Contracts and other obligations expressly
assumed by Purchaser hereunder, Owner shall remain liable and responsible for
all of the obligations and liabilities of Owner and 1290 Partners.
17
(k) At the Closing, the cash portion of the Security
Deposits (including any interest due thereon to the Closing Date) shall be
credited against the Purchase Price.
8. COVENANTS OF OWNER.
(a) During the period from the date hereof until the
Closing Date, Owner shall:
(i) maintain in full force and effect the insurance
policies currently in effect with respect to the Property (or replacements
continuing similar coverage);
(ii) operate and manage the Property in a manner
consistent with past practice;
(iii) notify Purchaser promptly of any of the
following which takes place on or before the Closing Date: written notices of
claimed material default or material non-performance received or given by Owner
with respect to Leases to which any Major Tenant is a party ("Major Leases") or
to which EMI Entertainment, ABN Amro, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and Straight Arrow
Publishing is a party, or the Contracts, litigation commenced against or by
Owner with respect to the Property, the Major Leases or Contracts, notices of
condemnation proceedings and casualty losses to the Property; and
(iv) use reasonable efforts to notify Purchaser of
any written notices of claimed material default or material non-performance
received or given by Owner with respect to any Leases not subject to Section
8(a)(iii).
(b) During the period from the date hereof until the
Closing Date, Owner shall not, to the extent the same would be binding on or
affect the Property or any owner thereof after the Closing, without Purchaser's
prior approval (which approval shall not be unreasonably withheld or delayed):
(i) terminate any Lease; amend or modify, or permit
the cancellation (other than non-material amendments or modifications or
pursuant to an express option granted to tenant thereunder or which any tenant
may have at law) or surrender of, or consent to the assignment or subletting
under, any Lease unless contractually bound; or enter into any new lease or
renewal lease (unless contractually bound on definitive terms) for space at the
Property except pursuant to a leasing schedule agreed to in writing by the
parties hereto;
(ii) solicit, initiate or encourage (including by
way of furnishing information), any transaction involving the sale or other
disposition of the Property, except as contemplated in this Agreement,
including, without limitation, Section 8(c) hereof;
18
(iii) affirmatively subject the Property to any
additional liens, encumbrances, covenants or easements; or
(iv) sell, transfer or otherwise dispose of the
Property.
(c) Purchaser acknowledges and agrees that until such
time as the Loan is funded Owner and the Special Committee of the Board of
Directors of Owner ("Special Committee") shall be permitted to participate in
discussions and negotiations, and to furnish information concerning Owner and/or
the Property in connection with an unsolicited written inquiry, proposal or
offer ("Unsolicited Offer") by an unaffiliated third party that the Special
Committee reasonably believes (after having obtained sufficient preliminary
information upon which to make such determination) that after giving due regard
to the likelihood of consummation of such Unsolicited Offer, such Unsolicited
Offer would result in Owner's stockholders realizing more value for their shares
than they would in connection with the transactions contemplated by this
Agreement (such offer a "Superior Offer"), which Superior Offer involves (x) the
purchase of all or substantially all of the equity interests of Owner; (y) the
purchase of all or substantially all of the Property; and/or (z) entering into
any of the following transactions: merger, consolidation, business combination,
recapitalization, liquidation and dissolution involving Owner; provided,
however, that in any such case, it is the good faith opinion of the Special
Committee, after consultation with outside counsel and after having obtained
such preliminary information, that failure to participate in such discussion and
negotiations or to furnish such information would likely be inconsistent with
the Special Committee's duties to Owner's stockholders under applicable law.
Owner agrees that it will promptly (and in no event later than
24 hours after receipt of an Unsolicited Offer) notify Purchaser (which notice
shall be provided orally and in writing and shall identify the person or entity
making the Unsolicited Offer and set forth its material terms) after receipt of
an Unsolicited Offer and thereafter shall keep Purchaser informed, on a current
basis, of the status and material terms of any Unsolicited Offer.
The Special Committee shall recommend that Owner's
stockholders vote to approve this Agreement (and this recommendation shall be
included in Owner's SEC Disclosure Documents (as defined in Section 8(f)) and it
may not withdraw or modify its recommendation in a manner adverse to Purchaser
or recommend that the Owner's stockholders vote in favor of or accept an
Unsolicited Offer. Notwithstanding the foregoing, until such time as the Loan is
funded, the Special Committee may withdraw or modify its recommendation
described above, or may recommend that Owner's stockholders vote in favor of or
accept an Unsolicited Offer, if:
(i) it is the opinion of the Special Committee,
after consultation with outside counsel, that failure to take such action would
likely be inconsistent with the Special Committee's duties to the Owner 's
stockholders under applicable law;
(ii) the Special Committee shall have delivered
written notice to Purchaser, advising Purchaser that it intends to take such
action unless the terms and conditions of this Agreement are amended, and three
(3) business days have elapsed following the Special Committee's delivery of
such notice;
19
(iii) this Agreement were amended by Purchaser
before the expiration of said three-business-day period, and the Unsolicited
Offer would nonetheless still constitute a Superior Offer; and
(iv) Owner has complied with its obligations set
forth in Section 8(c).
(d) Notwithstanding any other provision of this Section
8, Owner shall not accept or enter into any agreement concerning a Superior
Offer for a period of at least five (5) business days after Purchaser's receipt
of the initial notification of the Unsolicited Offer pursuant to this Section 8,
during which period Owner shall, and shall cause its financial and legal
advisors to, negotiate with Purchaser to amend the terms and conditions of this
Agreement as would enable Purchaser to match the economic terms and other
conditions contained in such Superior Offer in order to proceed with the
transactions contemplated hereby.
(e) Owner shall use its commercially reasonable efforts
to obtain voting agreements by May 16, 2002 from the holders of at least
sixty-seven percent (67%) of the issued and outstanding holders of Owner Common
Stock (the "Voting Agreements") substantially in the form attached hereto as
Exhibit 6.
(f) As soon as practicable following the execution of
this Agreement and the Voting Agreements, Owner shall file with the Securities
and Exchange Commission ("SEC") the applicable form of filing(s) prescribed by
the SEC for transactions of the type contemplated hereby ("SEC Disclosure
Documents"), in accordance with the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the rules and regulations under the Exchange Act, and
Owner will deliver a written notice to Purchaser notifying Purchaser that (A)
such filing has been made upon the date that Owner files the SEC Disclosure
Documents and (B) the date upon which it is notified by the SEC whether or not
Owner's SEC Disclosure Documents will be reviewed by the SEC. Purchaser will
cooperate with Owner in the preparation of the SEC Disclosure Documents and will
provide Owner with all data concerning Purchaser as is reasonably necessary in
the opinion of Owner's counsel in order for Owner to prepare the SEC Disclosure
Documents. Owner shall use all commercially reasonable efforts to respond
promptly to any comments made by the SEC with respect to their respective SEC
Disclosure Documents, and, if applicable, to cause the SEC Disclosure Documents
to be mailed to its stockholders at the earliest practicable date. Owner agrees
to afford Purchaser and its counsel a reasonable opportunity to review and
comment upon the SEC Disclosure Documents prior to their being filed with the
SEC and to provide Purchaser and its counsel with copies of any comments that
Owner or its counsel may receive from the SEC or its staff with respect thereto
as soon as practicable after the receipt of such comments. If the Special
Committee withdraws or modifies its approval or recommendation of this Agreement
and the consummation of the transactions contemplated hereby in accordance with
Section 8(c) hereof, Owner may postpone or delay the filing or mailing, as the
case may be, of any or all of its respective SEC Disclosure Documents.
20
(g) If Owner elects not to consummate the transactions
contemplated hereby and instead elects to pursue its rights set forth in Section
8(c), then Owner shall have the right to terminate this Agreement and shall not
be in default hereunder so as to allow Purchaser to avail itself of the remedies
set forth in Section 18(b) hereof; provided, however, that (A) from and after
the date hereof until 11:59 p.m. on the date that Owner files the SEC Disclosure
Documents with the SEC, but in no event later than June 1, 2002, if Owner shall
terminate this Agreement pursuant to its rights set forth in Section 8(c), then
Owner shall pay to Purchaser a fee equal to Fifteen Million Dollars
($15,000,000); and (B) from and after 12:00 a.m. on the date immediately
following the date upon which the Owner files the SEC Disclosure Documents with
the SEC, but in no event later than June 2, 2002, if Owner shall terminate this
Agreement pursuant to its rights set forth in Section 8(c), then Owner shall pay
to Purchaser a fee equal to Twenty Million Dollars ($20,000,000), which amounts
in both subclauses (A) and (B) shall also be deemed to include all of
Purchaser's expenses incurred in connection with the transactions contemplated
hereby (the "Break Up Fee"). The Break Up Fee shall be payable to Purchaser upon
the earlier of: (i) five (5) business days following the consummation of the
Superior Offer; and (ii) December 31, 2002; and (iii) ninety (90) days following
the termination of a Superior Offer transaction that Owner has elected to pursue
in connection with its termination of this Agreement in accordance with this
Section 8(g); provided, however, that as to subclauses (ii) and (iii), on or
prior to the date Owner is required to pay the Break Up Fee, Owner may elect, in
lieu of paying the Break Up Fee on such date, to instead deliver to Purchaser a
clean, irrevocable letter of credit in an amount equal to the Break Up Fee
issued by a New York bank money center in favor of Purchaser, with an expiration
date of July 15, 2003 and otherwise in form reasonably acceptable to Purchaser.
The terms of such letter of credit shall provide that it may be drawn upon by
Purchaser on or after June 30, 2003 if the payment of the Break Up Fee is not
made by Owner on or prior to June 30, 2003. The parties acknowledge and agree
that the amount of the Break Up Fee is not intended as a penalty and does not
have the legal effect of a penalty, but instead serves as a reasonable estimate
by the parties of the damage which would be suffered by Purchaser in such an
event.
(h) Except for the Major Tenants (which shall be governed
by Section 9(a)(iv) hereof), Owner shall use commercially reasonable efforts to
obtain an executed estoppel certificate from each other tenant of the Building.
Each such estoppel certificate shall confirm the existence of and pertinent
facts surrounding the applicable Lease. If any lease has a form of estoppel
certificate attached thereto, then Owner shall use its commercially reasonable
efforts to deliver such form executed by such tenant. If no such form is
attached, Owner shall use commercially reasonable efforts to deliver an estoppel
letter in such form as is reasonably requested by Purchaser.
(i) Except for the Major Tenants (which shall be governed
by Section 9(a)(v) hereof), at the request of Purchaser, Owner shall use its
commercially reasonable efforts to obtain an executed subordination,
nondisturbance and attornment agreement in connection with Purchaser's lender's
mortgage financing from each other tenant of the Building. If any Lease has a
form of subordination, nondisturbance and attornment agreement attached thereto,
then Owner shall deliver such form executed by such tenant. If no such form is
attached, Owner shall deliver a subordination, nondisturbance and attornment
agreement in such form as is reasonably requested by Purchaser.
(j) Purchaser and Owner hereby covenant and agree to
cooperate and use their respective commercially reasonable effort to effectuate
and carry out the transactions contemplated by Section 2 hereof.
21
(k) Purchaser hereby covenants and agrees that to the
extent that Purchaser determines not to assume any of the Contracts listed on
Schedule D hereto, that it shall be responsible for any and all termination
costs and expenses incurred by Owner relating to Purchaser's decision not to
assume such Contract.
(l) Owner hereby covenants to cooperate with Purchaser in
endeavoring to minimize the mortgage recording tax and agrees to use
commercially reasonable efforts to cause the holder of the Existing Loan to
assign the existing mortgage to Purchaser's designee upon repayment in full of
such Existing Loan.
9. CONDITIONS.
(a) Conditions to Obligations of Purchaser. The
obligations of Purchaser to effect the Closing shall be subject to the
fulfillment or written waiver by Purchaser at or prior to the Closing Date of
the following conditions:
(i) Major Leases. All of the Major Leases, plus the
leases for EMI Entertainment, ABN Amro, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and Straight Arrow
Publishing shall all be in full force and effect in all material respects on the
Closing Date.
(ii) Title. The Property shall be subject only to
Permitted Encumbrances.
(iii) Transaction Expenses. Owner shall have paid
all of the transaction expenses (or made provision for the payment thereof) for
which it is responsible pursuant to Section 14.
(iv) Estoppel Certificates. Owner shall have
delivered to Purchaser an executed estoppel certificate from each tenant listed
on Schedule E (each such tenant referred to as a "Major Tenant"). Each such
estoppel certificate shall be dated within forty-five (45) days prior to the
date of Closing, and shall confirm the existence of and pertinent facts
surrounding the applicable Lease. If any Major Lease has a form of estoppel
certificate attached thereto, then Owner shall deliver such form executed by
such tenant. If no such form is attached, Owner shall use commercially
reasonable efforts to deliver an estoppel letter reasonably acceptable to
Purchaser; provided, however, that in either event, Owner shall use commercially
reasonable efforts to cause such Major Tenant to include within such estoppel
certificate such other information as may be reasonably requested by Purchaser.
(v) Subordination Agreements. At the request of
Purchaser, Owner shall have delivered to Purchaser an executed subordination,
nondisturbance and attornment agreement in connection with Purchaser's lender's
mortgage financing from each Major Tenant. If any Major Lease has a form of
subordination, nondisturbance and attornment agreement attached thereto, then
Owner shall deliver such form executed by such Major Tenant. If no such form is
attached, Owner shall deliver a subordination, nondisturbance and attornment
agreement in a form reasonably acceptable to Purchaser; provided, however, that
in either event, Owner shall use commercially reasonable efforts to cause such
Major Tenant to include within such subordination, nondisturbance and attornment
agreement such other information as may be reasonably requested by Purchaser.
22
(vi) Stockholder Approval. The transactions
contemplated hereby shall have been duly approved by an affirmative vote of the
holders of at least 66-2/3 % of the outstanding shares of Owner's common stock,
par value $10.00 per share ("Owner Common Stock").
(vii) Pay-Off Letter. Owner shall have delivered to
Purchaser a customary payoff letter from General Electric Capital Corporation or
other authorized lender under the Existing Loan Agreement in respect of the
Existing Loan.
(viii) No Injunction. No provision of any applicable
law or regulation and no judgment, injunctions then enforceable against
Purchaser, order or decree shall prohibit the transactions contemplated by this
Agreement.
(ix) Deliveries. Owner shall have executed and
delivered all of the documents required to be delivered by it under Section
15(a) hereof.
(x) Representations and Warranties of Owner. Owner's
representations and warranties in this Agreement will be true and correct in all
material respects (A) as of the date of this Agreement and (B) on and as of the
Closing Date. On the Closing Date, Owner will deliver to Purchaser a
certificate, duly executed by an executive officer of Owner, certifying that
Owner's representations and warranties in this Agreement are true and correct in
all material respects as of the Closing Date (the "Owner Closing
Certification").
Purchaser shall have the right at any time to waive in writing any of the
contingencies or conditions set forth in this Section 9(a). If the conditions
and/or contingencies described in this Section 9(a) are not fully and completely
satisfied on the Closing Date, unless Purchaser elects to waive the unsatisfied
conditions and/or contingencies in writing, Purchaser shall have the right to
terminate this Agreement, in which event the Deposit shall be returned to
Purchaser by providing written notice of such termination to Owner at any time
through and including the Closing Date.
(b) Conditions to the Obligations of Owner to the
Closing. The obligations of Owner to effect the Closing shall be subject to the
fulfillment or written waiver by Owner at or prior to the Closing Date of the
following conditions:
(i) Funding. Purchaser shall have paid the balance
of the Purchase Price, after applying any credits against the Purchase Price
hereunder, and authorized the release of the Deposit in accordance with Section
4(b)(i) with respect to the payment of the Purchase Price.
(ii) No Injunction. No provision of any applicable
law or regulation and no judgment, injunctions currently enforceable against
Owner, order or decree shall prohibit the transactions contemplated by this
Agreement.
(iii) Owner Stockholder Approval. The transactions
contemplated hereby shall have been duly approved by an affirmative vote of the
holders of at least 66-2/3 % of the outstanding shares of Owner Common Stock.
23
(iv) Transaction Expenses. Purchaser shall have paid
all or substantially all of the transaction expenses for which it is responsible
pursuant to Section 14.
(v) Representations and Warranties of Purchaser.
Purchaser's representations and warranties in this Agreement will be true and
correct in all material respects (A) as of the date of this Agreement and (B) on
and as of the Closing Date. On the Closing Date, Purchaser will deliver to Owner
a certificate, duly executed by an executive officer of Purchaser, certifying
that Purchaser's representations and warranties in this Agreement are true and
correct in all material respects as of the Closing Date (the "Purchaser Closing
Certification").
(vi) Deliveries. Owner shall have executed and
delivered all of the documents required to be delivered by it under Section
15(b) hereof.
(vii) Loan. The Loan shall have been consummated.
10. CONDITION OF THE PROPERTY; REPRESENTATIONS.
(a) Owner hereby represents and warrants to Purchaser as
of the date hereof and shall be deemed to have remade such representations and
warranties as of the Closing as follows (each a "Representation"):
(i) Owner was duly formed and is validly existing as
a corporation in good standing under the laws of the State of Maryland. 1290
Partners was duly formed and is validly existing as a limited partnership in
good standing under the laws of the State of Delaware. Owner owns 100% of the
outstanding limited partnership interests of 1290 Partners, representing 99.9%
of the partnership interest of 1290 Partners. 1290 GP Corp., a Delaware
corporation, is the sole general partner of 1290 Partners, and owns 0.1% of the
limited partnership interests in 1290 Partners. Owner owns all of the
outstanding shares of 1290 GP Corp. Each of Owner and 1290 Partners has full
power and authority and all licenses, permits, and authorizations necessary to
carry on the business in which it is engaged and to own and use the properties
owned and used by it in all other jurisdictions in which Owner and 1290 Partners
is transacting business except where the failure to have such licenses, permits
and authorizations would not have a material adverse effect on the operation of
the Property. Owner has full power and authority to enter into and perform this
Agreement in accordance with its terms, and those executing this Agreement on
its behalf are authorized to do so and thereby bind Owner to the terms hereof.
This Agreement and all documents executed by Owner, or its affiliates, which are
to be delivered to Purchaser at the Closing are, and at the time of the Closing,
will be, duly authorized, executed and delivered by Owner or its affiliates, as
the case may be, and at the time of the Closing, will be the legal, valid and
binding obligations of Owner or its affiliates, as the case may be, enforceable
against Owner or such affiliates in accordance with its terms subject to the
approval of the stockholders of the Owner, and except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally, and do not and, at the time of the
Closing, will not, constitute a default under any written obligation of Owner or
violate any judicial order to which Owner is subject or bound, except where such
default or violation would not have a material adverse effect on Owner's ability
to perform its obligations hereunder or thereunder.
24
(ii) Schedule C is a true, correct and complete list
of all Leases in effect as of the date hereof. Owner has delivered or made
available to Purchaser, true and complete copies of all Leases set forth on
Schedule C. Other than as set forth in Schedule C, to Owner's Knowledge (as
hereinafter defined) (A) no tenant under a Lease is in default under its Lease
beyond the applicable cure period; except for defaults that, individually or in
the aggregate, do not have a material adverse effect on the operation of the
Property; (B) no tenant under a Lease has alleged, in writing or otherwise, and
such allegation remains outstanding or remains uncured, that the landlord under
its Lease is in default thereunder beyond the applicable cure period, or that
such tenant has an existing valid counterclaim or a right of offset against any
base rent or additional rent payable under its Lease, except for defaults that,
individually or in the aggregate, do not have a material adverse effect on the
operation of the Property; and (C) no tenant under a Lease has alleged, in
writing or otherwise, and such allegation remains outstanding or remains
uncured, that there is any dispute in the amount of base rent payable under its
Lease, except for such allegations that, individually or in the aggregate, do
not have a material adverse effect on the operation of the Property. No consents
are required under any Leases in connection with the consummation of the
transactions contemplated by this Agreement. To Owner's Knowledge, there are no
parties in possession of any portion or the Property, whether as lessees,
tenants at sufferance, trespassers or otherwise, except for the tenants under
the Leases or their assignees or subtenants under written assignments or
subleases which have been delivered to Purchaser. For purposes of this
Agreement, "Owner's Knowledge" shall mean the actual knowledge of the following
individuals: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
who are the individuals most likely to know of the matters to which such
Knowledge is referenced.
(iii) Schedule D is a true, correct and complete
list of the Contracts in effect as of the date hereof. Owner has delivered or
made available to Purchaser true and complete copies of all Contracts set forth
on Schedule D.
(iv) Schedule F is a true, correct and complete list
of the security deposits, including cash, certificates of deposit, and letters
of credit, currently held by Owner under the Leases in effect as of the date
hereof (the "Security Deposits").
(v) Schedule G is a tenant arrearage schedule which
is true, correct and complete in all material respects as of the date hereof.
(vi) Except for the matters set forth on Schedule H,
there is no action, suit, litigation, hearing or administrative proceeding
("Actions") to which the Property, or Owner is a party, pending before any court
or other governmental authority or to Owner's Knowledge, threatened with respect
to all or any portion of the Property or Owner, except for such Actions pending
or threatened that, individually or in the aggregate, do not have a material
adverse effect on the operation of the Property.
(vii) There are no condemnation or eminent domain
proceedings pending, or to the best of Owner's Knowledge, threatened against the
Property.
25
(viii) Except as set forth on Schedule I, there are
no collective bargaining agreements or other employment agreements to which
Owner is a party (or by which Owner is bound) and relating to the Property.
(ix) Except as set forth on Schedule J, neither
Owner nor the managing agent of the Property employs any union employees at the
Property.
(x) To Owner's Knowledge, except as set forth on
Schedule K, no zoning, building, or other law, ordinance, regulation, or
restriction is, or as of the Closing will be, violated by the continued
maintenance, operation, or use of the Property in its present manner, except
where such violation would not have a material adverse effect on the operation
of the Property.
(xi) Schedule L sets forth a true, correct and
complete list of all brokerage agreements in effect as of the date hereof and
which will be effective after the Closing relating to the Leases. Owner has
delivered to Purchaser true, correct and complete copies of all such brokerage
agreements listed in Schedule L (the "Brokerage Agreements").
(xii) Copies of insurance certificates setting forth
casualty and rent loss coverage maintained with respect to the Property are
attached as Schedule M; the policies evidenced by such certificates are in full
force and effect and premiums on said policies have been paid through September
30, 2002.
(xiii) The Environmental Report which Owner has
delivered to Purchaser is a true, correct and complete copy of such report, and
to Owner's Knowledge is the only such report relating to the environmental
condition of the Property that has been issued or published in the past two
years. Owner has not received any written warning notice, notice of violation,
administrative complaint, judicial complaint or other formal or informal written
notice alleging that conditions on the Property are in violation of any
environmental laws, regulations, ordinances or rules.
(xiv) Each tenant under the Leases has commenced
payment of the base rent payable under its Lease except as set forth on Schedule
N.
(xv) The only material documents evidencing or
securing the indebtedness related to that certain Loan Agreement among 1290
Partners, L.P., Lenders Party thereto and General Electric Capital Corporation,
dated December 13, 1999 ("Existing Loan") are set forth on Schedule O (the
"Existing Loan Documents"). The Existing Loan Documents have not been amended or
modified except as set forth on Schedule O. True, correct and complete copies of
the Existing Loan Documents have been delivered or made available to Purchaser.
(xvi) 1290 Partners has fee simple title to the
Property, free and clear of all encumbrances, except for the Permitted
Encumbrances.
(xvii) To Owner's Knowledge, Owner holds, and there
are presently in effect, all zoning, building, or other licenses, permits,
authorizations and approvals required for the operation of the Building by all
governmental authorities having jurisdiction, except where the failure to have
such licenses, permits, authorizations and approvals would not have a material
adverse effect on the operation of the Building.
26
(xviii) Owner has not received any written notice of
any special assessments contemplated being imposed against the Property after
the date hereof, except for such special assessments that, individually or in
the aggregate, do not have a material adverse effect on the operation of the
Property.
(xix) Owner has not received written notice that it
is not in compliance in all material respects with all applicable laws, and to
Owner's Knowledge, no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or written notice has been filed with or commenced
before any governmental authority against it alleging any failure so to comply.
(xx) The Special Committee has been duly authorized
by Owner to act with all authority of the Board of Directors of Owner with
respect to the negotiation of this Agreement on behalf of such Board of
Directors and to recommend this Agreement to the Board of Directors.
(xxi) Except for the Existing Loan, the ISDA Master
Agreement, dated as of December 13, 1999, by and between 1290 Partners and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Derivative Products, Inc. (the "Swap"), the Contracts and the
Tenant Improvements and Leasing Commissions, or as set forth on Owner's
consolidated financial statements filed with the SEC, neither the Owner nor 1290
Partners have any financial liabilities or obligations other than trade debt
incurred in the ordinary course of operating the Property, all of which
obligations and liabilities shall be paid, liquidated and/or discharged promptly
after the Closing.
(xxii) No capital improvements are currently being
made at the Property.
(xxiii) As of the date hereof, there are no pending
Rent Audits, and to Owner's Knowledge no threatened Rent Audits.
(xxiv) To Owner's Knowledge, none of the Third
Party Information described in Section 33(c) below contains any material
misstatements or omissions or is misleading in any material manner.
The representations and warranties of Owner contained in this Section 10(a), as
the same may be continued by the Owner Closing Certification, shall survive the
Closing until December 30, 2002 (the "Limitation Period"). Sections 3(c), 3(d),
13, 20, 21, 22, 23, 24, 25, 26, 27, 29, 30, 31, 32 and 33 hereof shall survive
the Closing and/or termination of this Agreement until the expiration of the
Limitation Period. Sections 7, 8, 14, 18 and 28 hereof shall survive the Closing
until the expiration of the Limitation Period. Each representation and warranty
of Owner contained in this Section 10(a), and each post closing obligation of
Owner set forth herein, shall automatically be null and void and of no further
force and effect on the last day of the Limitation Period unless, on or prior to
the last day of the Limitation Period, Purchaser shall in good faith have
provided Owner with a written notice alleging that Owner shall be in breach of
such representation, warranty or obligation, and specifying in reasonable detail
the nature of such breach.
27
Purchaser shall allow Owner thirty (30) days after its notice within which to
cure such breach. If Owner fails to cure such breach after written notice
thereof, Purchaser's sole remedy shall be to commence a legal proceeding for
damages against Owner alleging that Owner shall be in breach of such
representation, warranty or obligation and that Purchaser shall have suffered
actual damages ("Damages") as a result thereof (a "Proceeding"), which
Proceeding must be commenced, if at all, within thirty (30) days after the
expiration of the Limitation Period; provided, however, that Owner shall have no
liability to Purchaser or any of its successors or assigns with respect to a
breach or breaches of its representations, warranties, obligations or otherwise
hereunder if Purchaser had actual knowledge prior to the Closing Date of such
breach, breaches or other liability relating to such Damages regardless of the
amount of such Damages resulting from such breach, breaches or other liability;
provided, however, that Owner shall have no liability to Purchaser or any of its
successors or assigns hereunder for Damages in excess of $10,000,000 (less any
amounts paid or payable by Owner in accordance with the terms of this Agreement
following the Closing Date). In consideration for such limitation on liability,
Owner agrees that following Closing, Owner (or any successor entity) shall
maintain a tangible net worth of at least $10,000,000 (less any amounts paid or
payable by Owner in accordance with the terms of this Agreement following the
Closing Date) until the later of (A) December 31, 2002, if no Proceedings have
been commenced by December 30, 2002; or (B) the final settlement of all
Proceedings, if any Proceedings have been commenced and remain unresolved by
December 30, 2002; provided, however, that if a dispute arises under Section
7(i) hereof with respect to the Reconciliation Statement, and such dispute is
not resolved by December 31, 2002, then Owner will maintain until the date of
final resolution of such dispute a tangible net worth equal to the disputed
amount plus a reasonable sum necessary to pay any fees or expenses it may owe
under Section 7(i). Notwithstanding the foregoing, Owner shall be relieved of
any liability hereunder with respect to representations made by Owner in Section
10(a)(ii) concerning any tenant's Lease to the extent that such tenant
independently confirms the content of such representation in a tenant estoppel
certificate delivered to Purchaser on or prior to the Closing.
(b) Purchaser hereby represents and warrants to Owner as
of the date hereof and shall be deemed to have remade such representations and
warranties as of the Closing Date that:
(i) Purchaser is a Delaware limited partnership and
has full power and authority to enter into and perform this Agreement in
accordance with its terms and those executing this Agreement on its behalf are
authorized to do so and thereby bind Purchaser to the terms hereof. This
Agreement and all documents executed by Purchaser which are to be delivered at
the Closing are, and at the time of the Closing will be, duly authorized,
executed and delivered by Purchaser and at the time of the Closing will be the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors generally.
(ii) Purchaser is not acquiring the Property with
the assets of an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or, if
plan assets will be used to acquire the Property, Purchaser will deliver to
Owner at the Closing a certificate containing such factual representations as
shall permit Owner and its counsel to conclude that no prohibited transaction
would result from the consummation of the transactions contemplated by this
Agreement. Purchaser is not a "party in interest" within the meaning of Section
3(3) of ERISA with respect to any beneficial owner of Owner.
28
(iii) This Agreement and all documents to be
executed by Purchaser at the Closing do not and will not contravene with any
provision of the organizational and formation documents of Purchaser, constitute
a default under any written obligation of Purchaser or violate any judicial
order to which Purchaser is subject or bound, except where such default or
violation would not have a material adverse effect on Purchaser's ability to
perform its obligations hereunder or thereunder.
(iv) There are no actions, suits, litigations,
hearings or administrative proceedings pending or to Purchaser's Knowledge,
threatened to which Purchaser or any of its partners is a party before any court
or other governmental authority which would have a material adverse effect on
the transactions contemplated hereby. For purposes of this Agreement,
"Purchaser's Knowledge" shall mean the actual knowledge of the following
individuals: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, who are
the individuals most likely to know of the matters to which such Knowledge is
referenced.
(v) Purchaser has sufficient cash on hand or
enforceable financial commitments from credible sources to allow it to pay the
Purchase Price, consummate the transactions contemplated hereby, and pay all
related fees and expenses as set forth herein.
(vi) Purchaser hereby acknowledges that Purchaser
may have to bear the economic risk of its investment in the Property for an
indefinite period of time.
(vii) Purchaser understands that an investment in
the Property involves substantial risks. Purchaser understands the risks of, and
other considerations relating to, the acquisition of the Property. Purchaser, by
reason of its business and financial experience, together with the business and
financial experience of those persons, if any, retained by it to represent or
advise it with respect to its investment in the Property, (i) has such
knowledge, sophistication and experience in financial and business matters and
in making investment decisions of this type that it is capable of evaluating the
merits and risks of an investment in the Property and of making an informed
investment decision; (ii) is capable of protecting its own interest or has
engaged representatives or advisors to assist it in protecting its interests;
and (iii) is capable of bearing the economic risk of such investment.
(viii) Purchaser need not give any notice to, make
any filing with, or obtain any authorization, consent, or approval of any person
in connection with the consummation of the transactions contemplated by this
Agreement.
(ix) The representations and warranties of Purchaser
contained in this Section 10(b), as the same may be continued by the Purchaser
Closing Certification, shall survive the Closing until December 30, 2002.
29
11. DAMAGE AND DESTRUCTION.
(a) If all or any part of the Building is damaged by fire
or other casualty occurring following the date hereof and prior to the Closing
Date, then:
(i) if there is not Material Damage, neither party
shall have the right to terminate this Agreement and the parties shall
nonetheless consummate this transaction in accordance with this Agreement,
without any abatement of the Purchase Price or any liability or obligation on
the part of Owner by reason of said destruction or damage. In such event, Owner,
upon receipt of the insurance proceeds referred to in Section 11(a)(ii) below,
shall commence and proceed with any repair or restoration work necessary to
perform repairs and/or rebuild the Building to substantially the same condition
as it existed prior to the occurrence of any fire or other casualty to the
Property.
(ii) Owner has the right to make a claim for, settle
and retain any casualty insurance proceeds received under the casualty insurance
policies in effect with respect to the Property, in connection with the work
contemplated under the preceding sentence, subject to Purchaser's reasonable
approval of any such settlement. Any contracts entered into by Owner in
accordance with the work contemplated hereunder pursuant to the terms hereof
shall be deemed to be "Contracts" for purposes of this Agreement. If any such
casualty occurs prior to the Closing and the insurance claim with respect
thereto has not been settled or if settled the work has not been completed as of
the Closing, Owner shall be relieved of the obligation to repair, restore and/or
rebuild the Building and the Closing Statement shall reflect the following
credits in favor of Owner and Purchaser: (x) in favor of Purchaser, the amount
of the deductible on any casualty insurance policy in effect with respect to the
Property (but in no event in excess of the amount of the loss), (y) if Owner
shall have actually received on or prior to the Closing Date any insurance
proceeds in connection with such casualty, in favor of Purchaser the amount of
any such insurance proceeds actually received by Owner in connection with such
casualty under any such casualty insurance policy less the reasonable expenses
incurred by Owner in collecting such proceeds and performing the repair or
restoration work and (z) in favor of Owner, an amount equal to the reasonable
expenses incurred by Owner prior to the Closing Date in collecting the insurance
proceeds and performing the repair or restoration work in connection with such
casualty, to the extent not previously reimbursed to Owner from insurance
proceeds. Any insurance proceeds not received by Owner and not expended for
repairs or restoration work will be assigned to Purchaser at Closing.
(iii) if there is Material Damage, Purchaser shall
have the option, exercisable within ten (10) business days after the
determination of the cost of repair or restoration pursuant to subsections (c)
and (d) below, to terminate this Agreement by delivering notice thereof to
Owner, whereupon the Deposit shall be returned to Purchaser and this Agreement
shall be deemed canceled and of no further force or effect, and neither party
shall have any further rights or liabilities against or to the other except for
such provisions which are expressly provided in this Agreement to survive the
termination hereof. If a fire or other casualty described in this clause (iii)
shall occur and Purchaser shall not timely elect to terminate this Agreement,
then Purchaser and Owner shall consummate this transaction in accordance with
this Agreement, without any abatement of the Purchase Price or any liability or
obligation on the part of Owner by reason of said destruction or damage and, in
such event, the casualty shall be deemed not to have caused Material Damage and
the provisions of paragraphs (i) and (ii) above shall govern.
30
(b) As used herein the term "Material Damage" shall mean
damage the estimated cost of repair or restoration of which exceeds Fifteen
Million Dollars ($15,000,000).
(c) The estimated cost to repair and/or restore
contemplated in Section 11(a) above shall be established by written estimates
obtained by Owner from independent contractors and completed within thirty (30)
days from the date of casualty and Owner shall promptly provide Purchaser with
any such estimates upon its receipt thereof. The Closing Date may be extended by
either Purchaser or Owner up to a maximum extension of ninety (90) days or as
reasonably required to obtain such estimates (including the resolution of any
arbitration required pursuant to Section 11(d) hereof), determine the
availability and amount of insurance proceeds and give the notices required
under this Section 11; provided, however, that rather than extend the Closing
Date, Purchaser shall have the option to consummate the transactions
contemplated hereby and assume the obligation to repair and restore such
damages, in which event the provisions of the last two sentences of Section
11(a)(ii) shall be applicable. Owner and Purchaser shall cooperate and exercise
due diligence to promptly obtain damage estimation and insurance proceeds.
(d) The provisions of this Section 11 supersede any law
applicable to the Property governing the effect of fire or other casualty in
contracts for the purchase and sale of real property or interests therein. Any
disputes under this Section 11 as to the cost of repair or restoration shall be
resolved by expedited arbitration before a single arbitrator acceptable to both
Owner and Purchaser in their reasonable judgment in accordance with the rules of
the American Arbitration Association; provided, that if Owner and Purchaser fail
to agree on an arbitrator within five days after a dispute arises, then either
party may request the American Arbitration Association office in New York to
designate an arbitrator. Such arbitrator shall be an independent architect or
engineer having at least ten (10) years of experience in the construction of
office buildings in New York. The determination of the arbitrator shall be
conclusive and binding upon the parties. The costs and expenses of such
Arbitrator shall be borne by the non-prevailing party.
12. CONDEMNATION.
(a) If, prior to the Closing Date, any part of the
Property is taken (other than a temporary taking), or if Owner shall receive an
official notice from any governmental authority having eminent domain power over
the Property of its intention to take, by eminent domain proceeding, any part of
the Property (a "Taking"), then:
(i) if there is not a Material Taking, neither party
shall have any right to terminate this Agreement, and the parties shall
nonetheless consummate this transaction in accordance with this Agreement,
without any abatement of the Purchase Price or any liability or obligation on
the part of Owner by reason of such Taking; provided, that (x) if Owner shall
have actually received on or prior to the Closing Date any award or other
proceeds of such Taking, Purchaser shall be entitled to a credit at Closing in
an amount equal to the proceeds actually collected by Owner as a result of such
Taking less the reasonable expenses incurred by Owner in connection with such
Taking and (y) Owner shall be entitled to a credit at Closing equal to the
reasonable expenses incurred by Owner prior to the Closing Date in connection
with such Taking, to the extent not previously reimbursed from any award or
proceeds actually collected by Owner on or prior to the Closing Date.
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(ii) if there is a Material Taking, Purchaser shall
have the option, exercisable within ten (10) days after receipt of notice of
such Taking, time being of the essence, to terminate this Agreement by
delivering notice thereof to Owner, whereupon the Deposit shall be returned to
Purchaser and this Agreement shall be deemed canceled and of no further force or
effect, and neither party shall have any further rights or liabilities against
or to the other except pursuant to the provisions of this Agreement which are
expressly provided to survive the termination hereof. If a Taking described in
this clause (ii) shall occur and Purchaser shall not within such ten (10) period
elect to terminate this Agreement, then Purchaser and Owner shall consummate
this transaction in accordance with this Agreement without any abatement of the
Purchase Price or any liability or obligation on the part of Owner by reason of
such Taking and the proviso in clause (i) above shall govern the amount credited
at Closing.
(b) As used herein the term "Material Taking" shall mean
a Taking, the estimated cost of repair or restoration of which exceeds Fifteen
Million Dollars ($15,000,000).
(c) The provisions of this Section 12 supersede any law
applicable to the Property governing the effect of condemnation in contracts for
the purchase and sale of real property or interests therein. Any disputes under
this Section 12 as to whether the Taking is a Material Taking shall be resolved
by expedited arbitration before a single arbitrator acceptable to both Owner and
Purchaser in their reasonable judgment in accordance with the rules of the
American Arbitration Association; provided that if Owner and Purchaser fail to
agree on an arbitrator within five days after a dispute arises, then either
party may request the American Arbitration Association office in New York to
designate an arbitrator. Such arbitrator shall be an independent architect
having at least ten (10) years of experience in the construction of office
buildings in New York. The costs and expenses of such Arbitrator shall be borne
by non-prevailing party.
13. BROKERS AND ADVISORS.
(a) Purchaser represents and warrants to Owner that it
has not dealt or negotiated with, or engaged on its own behalf or for its
benefit, any broker, finder, consultant, advisor, or professional in the
capacity of a broker or finder (each a "Broker") in connection with this
Agreement or the transactions contemplated hereby. Purchaser hereby agrees to
indemnify, defend and hold Owner and the other Owner Related Parties harmless
from and against any and all claims, demands, causes of action, losses, costs
and expenses (including reasonable attorneys' fees, court costs and
disbursements) arising from any claim for commission, fees or other compensation
or reimbursement for expenses made by a Broker engaged by or claiming to have
dealt with Purchaser in connection with this Agreement or the transactions
contemplated hereby.
(b) Except as set forth on Schedule P, Owner represents
and warrants to Purchaser that Owner has not dealt or negotiated with, or
engaged on their own behalf or for their benefit, any Broker in connection with
this Agreement or the transactions contemplated hereby. Owner hereby agrees to
indemnify, defend and hold Purchaser and its direct and indirect shareholders,
officers, directors, trustees, partners, principals, members, employees, agents,
contractors and any successors or assigns of the foregoing, harmless from and
against any and all claims, demands, causes of action, losses, costs and
expenses (including reasonable attorneys' fees, court costs and disbursements)
arising from any claim for commission, fees or other compensation or
reimbursement for expenses made by any Broker engaged by or claiming to have
dealt with Owner in connection with this Agreement or the transactions
contemplated hereby.
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14. TRANSACTION COSTS.
(a) Owner shall be responsible for (i) payment in full of
the Existing Loan and all amounts secured by the Existing Loan Documents,
including without limitation all prepayment costs incurred in the prepayment of
the Existing Loan and all costs of terminating the Swap; (ii) the costs of
Owner's legal counsel, advisors and other professionals employed by it in
connection with the purchase and sale of the Property and the other transactions
contemplated by this Agreement; (iii) any recording fees relating to its
obligations to remove Title Objections; and (iv) all conveyance closing costs,
including state and local transfer, stamp or deed taxes.
(b) Purchaser shall be responsible for (i) the costs and
expenses associated with its due diligence, (ii) the costs and expenses of its
legal counsel, advisors and other professionals employed by it in connection
with the sale of the Property and the other transactions contemplated by this
Agreement, (iii) all mortgage recording taxes due in connection with Purchaser's
financing and costs of the owner's and lender's policies of title insurance, and
other endorsements and (iv) any additional attorneys' fees and other related
costs incurred by Owner with respect to preparing and finalizing the SEC
Disclosure Documents, including, without limitation, revisions thereto required
in order to respond to any review by, and comments of, the SEC to the extent
such additional fees and costs relate to AP-1290 being a partner of the
Purchaser.
15. DELIVERIES TO BE MADE ON THE CLOSING DATE.
(a) Owner Deliveries. It is contemplated that this
transaction shall be closed by means of a so-called New York Style Closing, with
the concurrent delivery of the documents of title, transfer of interest,
delivery of the marked-up title commitment, and the payment of the Purchase
Price. At Closing, Owner shall deliver to Purchaser the following:
(i) bargain and sale deed without covenant against
grantor's acts, duly executed and acknowledged by Owner, in proper statutory
form for recording, so as to convey to Purchaser fee simple title to the
Property, subject to and in accordance with the provisions of this Agreement;
(ii) a good certified check to the order of the New
York City Department of Finance in the amount of the Real Estate Transfer Tax,
if any, due in connection with the delivery of the Deed in accordance with
Article 31 of the New York State Tax Law, and a return, if any be required, duly
executed and acknowledged by Owner; and Purchaser also agrees to execute and
acknowledge said return and to cause the check and the return to be delivered to
the Register of the City of New York promptly after the Closing;
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(iii) a good certified check to the order of the New
York City Department of Finance for the amount of the Real Property Transfer
Tax, if any, in accordance with Title 11 of Chapter 21 of the Administrative
Code of the City of New York and the return required by the said statute and the
regulations issued pursuant to the authority thereof, duly executed and
acknowledged by Owner; and Purchaser agrees to execute and acknowledge said
return and to cause the check and the return to be delivered to the Register of
the City of New York promptly after the Closing;
(iv) A ▇▇▇▇ of sale for the Personalty from Owner,
duly executed by Owner.
(v) An assignment and assumption of Leases from
Owner, duly executed and acknowledged by Owner.
(vi) An assignment by Owner of all warranties and
permits affecting the Property, duly executed by Owner.
(vii) An assignment and assumption of Contracts from
Owner, duly executed by Owner.
(viii) All architectural and engineering drawings
and specifications, utilities layout plans, topographical plans and the like in
Owner's possession and owned by Owner used in the construction, improvement,
alteration or repair of the Building.
(ix) Original counterparts of all Leases and
Contracts, and all other books, records and files maintained by Owner's property
manager relating to the construction, leasing, operation and maintenance of the
Property.
(x) A notice to each tenant, executed by Owner,
advising of the sale of the Property and directing that rent and other payments
thereafter be sent to Purchaser at the address provided by Purchaser at Closing.
(xi) Such affidavits or letters of indemnity as
Purchaser's title insurer shall require in order to issue, without extra charge,
an owner's policy of title insurance free of any exceptions for unfiled
mechanics' or materialmen's liens for work performed by Owner prior to Closing,
or for rights of parties in possession other than pursuant to the Leases, and
such documents, certificates, resolutions and other evidences of authority as
Purchaser's title insurer may require as a condition to the issuance of a title
insurance policy.
(xii) A nonforeign affidavit as required by the
Foreign Investment in Real Property Tax Act ("FIRPTA"), as amended, duly
executed by Owner.
(xiii) The Owner Closing Certification, duly
executed by Owner.
(xiv) Evidence of the authorization of the
transactions contemplated hereby, including a Secretary of State certified copy
of Owner's limited partnership certificate, a certificate of good standing from
such Secretary of State and any required partnership consents to the
transactions contemplated hereby.
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(xv) The Closing Statement, duly executed by Owner.
(xvi) With respect to the Security Deposits,
Purchaser shall receive a credit against the Purchase Price in an amount equal
to any cash Security Deposits, together with any interest due thereon to the
Closing Date. All non-cash Security Deposits shall be transferred to Purchaser
at Closing and Seller shall cooperate with Purchaser in effectuating a valid
assignment and transfer of any letters of credit and other securities and
guaranties constituting a part of the Security Deposits.
(xvii) All other instruments and documents
reasonably required to effectuate this Agreement and the transactions
contemplated thereby.
(b) Purchaser Deliveries. At Closing, Purchaser shall
deliver to Owner the following:
(i) In accordance with Owner's instructions, a wire
transfer in the amount of the Purchase Price (subject to the adjustments
provided for in this Agreement), transferred to the order or account of Owner or
to such other person or persons as Owner shall designate in writing no later
than two (2) business days prior to the Closing.
(ii) The Purchaser Closing Certification.
(iii) The assignment and assumption of Leases
referred to in Section 15(a) above, duly executed and acknowledged by Purchaser.
(iv) The assignment and assumption of Contracts
referred to in Section 15(a) above, duly executed and acknowledged by Purchaser.
(v) The assignment and assumption of the Tenant
Improvements and Leasing Commissions referred to in Section 4 above, duly
executed and acknowledged by Purchaser.
(vi) A joint direction letter to the Escrow Agent
authorizing the release of the Deposit to Owner.
(vii) All other instruments and documents reasonably
required to effectuate this Agreement and the transactions contemplated thereby.
16. CLOSING DATE.
(a) The transactions contemplated by this Agreement (the
"Closing") shall occur, on a date selected by Purchaser by giving no fewer than
three (3) business days notice to Owner, which date shall be designated by
Purchaser following approval of the transactions contemplated herein by not less
than 66 2/3 % of the outstanding shares of Owner Common Stock, and:
35
(x) shall not be later than July 15, 2002 if the SEC shall
have notified Owner that it will not review and comment upon
the SEC Disclosure Documents; and
(y) shall not be later than August 28, 2002 if the SEC shall
have notified Owner that it will review and comment upon the
SEC Disclosure Documents.
at 10:00 a.m. (such date, or the date set for the Closing if Purchaser shall
elect to extend this date pursuant to the terms of this Agreement, the
"Scheduled Closing Date"; the actual date of the Closing, the "Closing Date"),
at the offices of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇ LLP in New York, New York,
or such other place as Purchaser and Owner shall mutually agree. Each of
Purchaser and Owner shall have the right to extend the Scheduled Closing Date
for a period or periods not to exceed five (5) business days in addition to the
extension rights set forth in Sections 16(b) and 16(c) below.
(b) Purchaser Right to Extend Closing. Purchaser shall
have the right to extend the deadline for the Closing Date to August 31, 2002 if
the SEC shall have notified Owner that it will not review and comment upon the
SEC Disclosure Documents, by giving written notice to Owner (the "Purchaser
Extension Notice") within three (3) business days following delivery by Owner of
written notice to Purchaser that the SEC has determined not to review and
comment upon the SEC Disclosure Documents, and, simultaneously with the delivery
of such Purchaser Extension Notice, Purchaser shall deliver the sum of
($15,000,000) Fifteen Million Dollars to Escrow Agent, as an addition to the
Deposit, to be governed pursuant to the terms of Article 4 hereof
(c) Owner Right to Extend Closing. Owner shall have the
right to extend the deadline for the Closing Date:
(i) to July 22, 2002, if the SEC shall have notified Owner
that it will not review and comment upon the SEC Disclosure
Documents, by giving written notice to Purchaser on or before
June 27, 2002;
(ii) to a date not later than October 7, 2002, on a
day-for-day corresponding basis to the extent it shall take
the SEC more than fifty (50) days after it has notified the
Public Company that it intends to review and comment upon the
SEC Disclosure Documents
(d) Convene Meeting of Stockholders. Owner agrees that it
shall, as promptly as practicable, give notice of, convene, and hold a meeting
of its stockholders entitled to vote on the adoption of this Agreement in
accordance with applicable law, for the purpose of obtaining the approval, by
the stockholders of the Owner, of this agreement and Owner's performance of the
obligations set forth herein.
17. NOTICES.
Notwithstanding anything to the contrary which may be
contained in this Agreement, all notices, demands, requests or other
communications (collectively, "Notices") required to be given or which may be
given hereunder shall be in writing and shall be sent by (a) certified or
registered mail, return receipt requested, postage prepaid, or (b) national
overnight delivery service, or (c) facsimile transmission (provided that the
original shall be simultaneously delivered by national overnight delivery
service or personal delivery), or (d) personal delivery, addressed as follows:
36
(i) If to Owner or 1290 Partners, to:
Oaktree Capital Management, LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
with a copy to (which shall not constitute
notice):
Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Purchaser, to:
Jamestown 1290 Partners
Two Paces West, Suite 1600
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
King & Spalding
1185 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
Holland & Knight LLP
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇ ▇▇▇ III, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
37
Any Notice so sent by certified or registered mail, national
overnight delivery service or personal delivery shall be deemed given on the
date of receipt or refusal as indicated on the return receipt, or the receipt of
the national overnight delivery service or personal delivery service. Any Notice
sent by facsimile transmission shall be deemed given when received as confirmed
by the telecopier electronic confirmation receipt. A Notice may be given either
by a party or by such party's attorney. Owner or Purchaser may designate, by not
less than five (5) business days' notice given to the others in accordance with
the terms of this Section 17, additional or substituted parties to whom Notices
should be sent hereunder.
18. DEFAULT BY PURCHASER OR OWNER.
(a) If, other than as a result of Owner's default under
Section 18(b) hereof or the permitted termination of this Agreement by either
party hereto, Purchaser shall default in any material respect in the performance
of any of its other obligations to be performed on or prior to the Closing Date
and such default shall continue for five (5) business days after written notice
to Purchaser, Owner's sole remedy by reason thereof shall be to terminate this
Agreement and, upon such termination, Owner, with respect to such default, shall
be entitled to retain the Deposit as liquidated damages for Purchaser's default
hereunder, it being agreed that the damages by reason of Purchaser's default are
difficult, if not impossible, to ascertain.
Notwithstanding anything herein to the contrary, in no
event shall the failure of Purchaser to consummate the transactions contemplated
herein as a result of the failure of one or more conditions to Purchaser's
obligation to close contained in Section 9(a) constitute a default by Purchaser
hereunder.
(b) If other than as a result of Purchaser's default
under Section 18(a) hereof, pursuant to Section 8(c), or the permitted
termination of this Agreement by either party hereto, Owner shall default in any
material respect in any of its obligations to be performed on or prior to the
Closing Date, and such default shall continue for five (5) business days after
written notice to Owner, Purchaser as its sole remedy by reason thereof (in lieu
of prosecuting an action for damages or proceeding with any other legal course
of conduct, the right to bring such actions or proceedings being expressly and
voluntarily waived by Purchaser to the extent legally permissible) shall have
the right subject to the other provisions of this Section 18(b) to seek to
obtain specific performance of Owner's obligations hereunder, provided that any
action for specific performance shall be commenced within thirty (30) days after
such default, and if Purchaser prevails thereunder, Owner shall reimburse
Purchaser for all reasonable legal fees, court costs and other reasonable
out-of-pocket costs arising from such default; provided, however, that if a
court of competent jurisdiction determines in a non-appealable order that
specific performance against Owner is not an available remedy to Purchaser,
Purchaser shall be entitled to receive a return of the Deposit, and, if a court
of competent jurisdiction determines in a non-appealable order that specific
performance against Owner is not an available remedy to Purchaser as a direct
result of the willful misconduct or bad faith of Owner, to pursue a claim
against Owner for actual damages incurred by Purchaser as a result of such
default.
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(c) Notwithstanding anything herein to the contrary, in
no event shall the failure of Owner to consummate the transactions contemplated
herein as a result of the failure of one or more conditions to Owner's
obligation to close contained in Section 9(b) constitute a default by Owner
hereunder.
19. FIRPTA COMPLIANCE.
Owner shall comply with the provisions of FIRPTA. Owner
acknowledges that Section 1445 of the Internal Revenue Code provides that a
transferee of a United States real property interest must withhold tax if the
transferor is a foreign person. To inform Purchaser that withholding of tax is
not required upon the disposition of a United States real property interest by
Owner, Owner hereby represents and warrants that Owner is not a foreign person
as that term is defined in the Internal Revenue Code and Income Tax Regulations.
On the Closing Date, Owner shall deliver to Purchaser a certification as the
non-foreign status of Owner in the form of Exhibit 7, and shall comply with any
temporary or final regulations promulgated with respect thereto and any relevant
revenue procedures or other officially published announcements of the Internal
Revenue Service of the U.S. Department of the Treasury in connection therewith.
20. ENTIRE AGREEMENT.
This Agreement and the Confidentiality Agreement contains all
of the terms agreed upon between Owner and Purchaser with respect to the subject
matter hereof, and all prior agreements (including, without limitation, the
Original Purchase and Sale Agreement), understandings, representations and
statements, oral or written, between Owner and Purchaser are merged into this
Agreement.
21. AMENDMENTS.
This Agreement may not be changed, modified or terminated,
except by an instrument executed by Owner and Purchaser.
22. WAIVER.
No waiver by either party of any failure or refusal by the
other party to comply with its obligations shall be deemed a waiver of any other
or subsequent failure or refusal to so comply.
23. PARTIAL INVALIDITY.
If any term or provision of this Agreement or the application
thereof to any person or circumstance 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 shall be enforced to the fullest
extent permitted by law.
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24. SECTION HEADINGS.
The headings of the various sections of this Agreement have
been inserted only for the purposes of convenience, and are not part of this
Agreement and shall not be deemed in any manner to modify, explain, expand or
restrict any of the provisions of this Agreement.
25. GOVERNING LAW; SUBMISSION TO JURISDICTION.
This Agreement shall be governed by the laws of the State of
New York without giving effect to conflict of laws principles thereof. Purchaser
submits to the jurisdiction of any state or federal court sitting in New York,
New York, in any action arising out of or relating to this Agreement and agrees
that all claims in respect of the action may be heard and determined in any such
court. Purchaser also agrees not to bring any action arising out of or relating
to this Agreement in any other court. Purchaser agrees that a final judgment in
any action so brought will be conclusive and may be enforced by action on the
judgment or in any other manner provided at law or in equity. Purchaser waives
any defense of inconvenient forum to the maintenance of any action so brought
and waives any bond, surety, or other security that might be required of any
other party with respect thereto.
26. PARTIES; ASSIGNMENT AND RECORDING.
(a) This Agreement and the various rights and obligations
arising hereunder shall inure to the benefit of and be binding upon Owner and
Purchaser and their respective successors and permitted assigns.
(b) Purchaser may not assign or otherwise transfer this
Agreement or any of its rights or obligations hereunder (or any of the direct or
indirect ownership interests in Purchaser if the primary purpose of such
transfer is to transfer Purchaser's rights under this Agreement), without first
obtaining Owner's consent thereto; provided, that Purchaser may assign this
Agreement to one or more Persons (as defined below); provided, that, such Person
shall be an Eligible Assignee (as defined below) and such Person assumes all of
Purchaser's obligations hereunder and agree to be bound by all of the terms and
conditions hereof and pay any transfer taxes payable in connection with such
assignment.
(c) Neither this Agreement nor any memorandum hereof may
be recorded without first obtaining Owner's consent thereto.
(d) As used herein:
(i) the term "Persons" shall mean a corporation, an
association, a partnership (general or limited), a joint venture, an estate, a
trust, a limited liability company, a limited liability partnership, any other
legal entity, or an individual;
(ii) the term "Eligible Assignee" shall mean (A)
with respect to Purchaser, any Persons Controlled by at least one or more of the
following individuals: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and (B) any other
person or entity in tenancy in common with Purchaser or a Person described in
clause (A) above; provided, however, that notwithstanding any assignment
pursuant to subclause (B), Purchaser shall remain solely responsible for all of
its rights, obligations, agreements and covenants hereunder; and
40
(iii) the term "Control" and "Controlled by" shall
mean the ability, directly or indirectly, whether through the ownership of
voting securities, by contract, or otherwise (including by being the general
partner, managing member, officer or director of the Person in question), to (i)
direct or cause the direction of the management and policies of an entity, or
(ii) conduct the day-to-day business operations of a Person. A Person or Persons
shall be deemed to direct or cause the direction of the management and policies
of a Person (and accordingly satisfy clause (i) of the foregoing test for
"Control") if the consent or approval of such Person(s) shall be required with
respect to major decisions concerning such entity.
27. CONFIDENTIALITY AND PRESS RELEASES.
(a) Until the Closing, Purchaser and its partners,
members, attorneys, agents, employees and consultants will treat the information
disclosed to it by Owner, or otherwise gained through Purchaser's access to the
Property and Owner's books and records, as confidential, giving it the same care
as Purchaser's own confidential information, and make no use of any such
disclosed information not independently known to Purchaser except in connection
with the transactions contemplated hereby or as required by law. Owner
acknowledges that Purchaser will incorporate information relating to the
Property in one or more prospectuses or other offering memoranda and related
supporting materials to be distributed to potential investors and filed with
various governmental agencies. Purchaser acknowledges that any information
contained in any such prospectuses, memoranda or other materials shall not be
materially inconsistent with any of the information contained the SEC Disclosure
Documents.
(b) In the event of a termination of this Agreement,
Purchaser shall promptly return copies of all such confidential information in
its possession to Owner and will use commercially reasonable efforts to cause
other persons to whom it has delivered copies of such confidential information
to return the same to Owner. The parties agree that the Confidentiality Letter
Agreement, dated December 10, 2001, between Purchaser and Owner, is hereby
superceded by the terms and conditions of this Agreement. Owner is entitled (i)
to issue a press release related to the transactions contemplated by this
Agreement (a copy of which shall be delivered to Purchaser for its review prior
to such issuance) and (ii) to disclose information related to the transactions
contemplated by this Agreement to the extent required (in the determination of
counsel to Owner) by the SEC or otherwise by applicable law.
(c) The parties acknowledge and agree that irreparable
damage would occur if any provision of this Section 27 was not performed in
accordance with the terms hereof and that the parties shall be entitled to the
remedy of specific performance of the terms hereof, in addition to any other
remedy at law or equity.
28. FURTHER ASSURANCES.
Owner and Purchaser will do, execute, acknowledge and deliver
all and every such further acts, conveyances, assignments, notices, transfers
and assurances as may be reasonably required by the other party, for the better
assuring, conveying, assigning, transferring and confirming unto Purchaser the
Property and for carrying out the intentions or facilitating the consummation of
this Agreement.
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29. THIRD PARTY BENEFICIARY.
This Agreement is an agreement solely for the benefit of Owner
and Purchaser (and their permitted successors and/or assigns). No other person,
party or entity shall have any rights hereunder nor shall any other person,
party or entity be entitled to rely upon the terms, covenants and provisions
contained herein.
30. WAIVER OF TRIAL BY JURY.
Owner and Purchaser hereby irrevocably and unconditionally
waive any and all right to trial by jury in any action, suit or counterclaim
arising in connection with, out of or otherwise relating to this Agreement.
31. MISCELLANEOUS.
(a) This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and together constitute
one and the same instrument.
(b) Any consent or approval to be given hereunder
(whether by Owner or Purchaser) shall not be effective unless the same shall be
in writing. Except as otherwise expressly provided herein, any consent or
approval requested of Owner or Purchaser may be withheld by Owner or Purchaser
in its sole and absolute discretion.
32. ATTORNEYS' FEES.
In the event of any litigation between the parties hereto to
enforce any of the provisions of this Agreement or any right of either party
hereto, the unsuccessful party to such litigation agrees to pay to the
successful party all costs and expenses, including reasonable attorneys' fees
and disbursements, incurred herein by the successful party in and as part of the
judgment rendered in such litigation.
33. DISCLAIMERS.
(a) Except as otherwise expressly provided in this
Agreement, Purchaser agrees to accept the Property on an "as-is, where-is and
with all faults" basis. Nothing contained in this Section 33(a) or in any other
provision of this Section 35 shall have the effect of negating, overriding or
limiting any of the express representations and warranties of Owner contained in
this Agreement.
(b) This Agreement, as written, contains all the terms of
the agreement between the parties as of the date hereof, and Purchaser
acknowledges that neither Owner, nor any of their respective affiliates
(including, without limitation, their respective directors, officers,
shareholders, partners or members), nor any of their respective employees,
agents or representatives, has made any representations or held out any
inducements to Purchaser, and Owner hereby specifically disclaims any
representation, oral or written, past, present or future, other than those
expressly set forth in this Agreement. Without limiting the generality of the
foregoing, Purchaser has not relied, and will not be relying, on any
representations or warranties other than those specifically set forth in this
Agreement, and neither Owner nor any of Owner's affiliates (including, without
limitation, their respective directors, officers, shareholders, partners or
members), nor any of their respective employees, agents or representatives, has
or is willing to make any representations or warranties, express or implied,
other than as may be expressly set forth herein.
42
(c) Purchaser acknowledges and agrees that (i) some of
the information relating to the Property (including without limitation the
information listed in Section 3(b) hereof) that has been or will be delivered or
made available to Purchaser and Purchaser's Representatives by Owner or Owner
affiliates (including, without limitation, their respective directors, officers,
shareholders, partners or members), and any of their respective employees,
agents or representatives, may have been prepared by third parties and may not
be the work product of Owner and/or any of Owner's affiliates (such information
referred to as the "Third Party Information"); (ii) neither Owner nor any of
Owner's affiliates (including, without limitation, their respective directors,
officers, shareholders, partners or members), nor any of their respective
employees, agents or representatives has made any independent investigation or
verification of, or has any knowledge of, the accuracy or completeness of, the
Third Party Information; (iii) the Third Party Information delivered or made
available to Purchaser and Purchaser's Representatives is furnished to them at
the request, and for the convenience of, Purchaser; (iv) Purchaser is relying
solely on its own investigations, examinations and inspections of the Property
and those of Purchaser's Representatives and on the representations of Owner
contained herein and is not relying in any way on the Third Party Information
furnished by Owner or any of Owner's affiliates (including, without limitation,
their respective directors, officers, shareholders, partners or members), or any
of their respective employees, agents or representatives; and (v) except as set
forth in Section 10(a) above, Owner disclaims any representations or warranties
with respect to the accuracy or completeness of the Third Party Information and
Purchaser hereby releases Owner and Owner's affiliates (including, without
limitation, their respective directors, officers, shareholders, partners or
members), and any of their respective employees, agents or representatives, from
any and all liability with respect thereto.
(d) Purchaser and anyone claiming by, through or under
Purchaser, hereby fully and irrevocably releases Owner and Owner's affiliates
(including, without limitation, their respective directors, officers,
shareholders, partners or members), and any of their respective employees,
agents or representatives, from any and all claims that it may now have or
hereafter acquire against Owner or Owner's affiliates, or their officers,
directors, employees, agents or representatives, for any cost, loss, liability,
damage, expense, action or cause of action, whether foreseen or unforeseen,
arising from or related to any construction defects, errors or omissions on or
in the Property, the presence of environmentally hazardous, toxic or dangerous
substances, or any other conditions (whether patent, latent or otherwise)
affecting the Property, except for claims against Owner based upon any
representations, obligations and liabilities of Owner expressly provided in this
Agreement.
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IN WITNESS WHEREOF, this instrument has been executed under
seal by the parties hereto as of the day and year first above written.
OWNER:
METROPOLIS REALTY TRUST, INC.
By:
---------------------------
Name:
Title:
PURCHASER:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, L.P.
By: JT 1290 Corp., its General Partner
By:
---------------------------
Name:
Title:
1290 PARTNERS:
The undersigned agrees to transfer its
interest in the Property at Closing
subject to and in accordance with the
terms hereof.
1290 PARTNERS, L.P.
By: 1290 GP Corp., its General Partner
By:
---------------------------
Name:
Title:
44
ESCROW AGENT:
The undersigned acknowledges that it
has reviewed and agrees to be bound by
the provisions of Article 4 hereof.
FIDELITY NATIONAL TITLE INSURANCE
COMPANY
By:
---------------------------
Name:
Title:
45
Schedule D
List of Major Tenants
---------------------
Equitable Life
Warner Music
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
The Bank of New York/GMAC
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Deutsche Bank
46