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PURCHASE AND SALE AGREEMENT
by and between
CHALLENGER SOUTH MONACO, L.L.C.,
a Delaware limited liability company,
as Seller
and
CAPLEASE, LP,
a Delaware limited partnership
Invesco Funds Corporate Campus
4340/4350/4346 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
January 27, 2006
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 27, 2006 by and between CHALLENGER SOUTH MONACO, L.L.C., a
Delaware limited liability company ("SELLER") and CAPLEASE, LP, a Delaware
limited partnership ("PURCHASER").
WHEREAS, Seller is the owner of the real estate and related assets
hereinafter described; and
WHEREAS, Seller desires to sell, and Purchaser desires to buy, the real
estate and related assets hereinafter described, at the price and on the terms
and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the recitals, the mutual covenants
hereafter set forth, and other good and valuable considerations, the receipt and
sufficiency of which are mutually acknowledged, it is agreed by and between the
parties as follows:
1. Defined Terms. Capitalized terms used in this Agreement shall have the
meanings ascribed to them in the Glossary of Defined Terms attached hereto as
Exhibit A.
2. Sale and Conveyance; Survey. (a) Seller agrees to sell and convey the
Property to Purchaser, and Purchaser agrees to buy the Property from Seller, at
the price and upon the other terms and conditions hereinafter set forth.
(b) The Personal Property, if any, shall be conveyed to Purchaser by the
▇▇▇▇ of Sale.
(c) Pursuant to the Assignment of Lease, the Service Contracts, the IFG
Lease and the Intangible Personal Property shall be assigned by Seller to
Purchaser, and Purchaser shall assume (i) those obligations of Seller under the
Service Contracts (if any) which relate to periods from and after Closing and
which Purchaser has elected to assume, and (ii) any of Seller's monetary
obligations under the Service Contracts which relate to periods prior to Closing
to the extent Purchaser receives a credit therefor at Closing.
(d) Seller has heretofore delivered to Purchaser a survey of the Real
Property, prepared by Flatirons Surveying, Inc., dated November 26, 2002 (the
"SURVEY"). Prior to the Closing Purchaser, at its expense, may obtain an updated
version of the Survey.
(e) The Property is currently encumbered by that certain loan (the "LOAN")
in the original principal amount of $39,000,000 payable to the order of
Prudential Mortgage Capital Company, LLC, together with its successors and
assigns (collectively, "LENDER") secured by a first lien against the Property.
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3. Purchase Price; ▇▇▇▇▇▇▇ Money. The purchase price for the Property
shall be the Purchase Price, payable by Purchaser to Seller as follows:
(a) Concurrently with the execution of this Agreement, Purchaser shall
deposit into a strict joint order escrow trust established with the Title
Company, as ▇▇▇▇▇▇▇ money hereunder, the cash sum of One Million Dollars
($1,000,000.00) (the "INITIAL ▇▇▇▇▇▇▇ MONEY DEPOSIT").
(b) If Purchaser does not timely exercise its right to terminate this
Agreement prior to the expiration of the Inspection Period in accordance with
Section 9(f), Purchaser shall, on or before the last day of the Inspection
Period, deposit into the escrow trust established with the Title Company as set
forth above the additional cash sum of Two Million Dollars ($2,000,000) (the
"SECOND ▇▇▇▇▇▇▇ MONEY DEPOSIT"; the Initial ▇▇▇▇▇▇▇ Money Deposit and the Second
▇▇▇▇▇▇▇ Money Deposit, or so much thereof as has been deposited by Purchaser
from time to time, collectively constitute the "▇▇▇▇▇▇▇ MONEY"). The ▇▇▇▇▇▇▇
Money shall at all times prior to the Closing be invested in United States
treasury obligations or such other interest bearing accounts or securities as
are approved by Purchaser and Seller in writing; all interest earned on the
▇▇▇▇▇▇▇ Money shall be deemed to constitute part of the ▇▇▇▇▇▇▇ Money, and shall
be administered and paid in the same manner as the ▇▇▇▇▇▇▇ Money. At the
Closing, Purchaser shall receive a credit against the Purchase Price for the
▇▇▇▇▇▇▇ Money. Time is of the essence for the delivery of the ▇▇▇▇▇▇▇ Money
under this Agreement.
(c) Each of Seller and Purchaser agree to direct the Title Company, as
escrowee, to administer and pay the ▇▇▇▇▇▇▇ Money in accordance with the terms
and provisions of this Agreement.
(d) The Purchase Price, less a credit for the ▇▇▇▇▇▇▇ Money, and plus or
minus prorations and adjustments as set forth in Section 16 hereof, shall be
paid by Purchaser (or caused by Purchaser to be released by the Title Company)
to Seller by wire transfer of immediately available federal funds prior to 12:00
p.m. Eastern Time on the Closing Date.
(e) Purchaser shall deliver the Purchase Price, as adjusted pursuant to
Section 3(d) above, to the Title Company at least one (1) business day prior to
the Closing Date, time being of the essence. Purchaser acknowledges that timely
delivery of the Purchase Price to the Title Company by Purchaser as set forth
herein is required in order to purchase the Defeasance Collateral (as defined in
the Debt Documents), and that in the event Purchaser does not timely deliver the
sums required hereunder Seller may terminate this Agreement and declare this
Agreement to be of no further force or effect (except to the extent that any
right, obligation or liability set forth herein expressly survives termination
of this Agreement), and in which event the ▇▇▇▇▇▇▇ Money shall promptly be paid
to Seller and Seller shall have no liability to Purchaser hereunder by reason
thereof.
4. Seller's Representations, Warranties and Covenants. As a material
inducement to Purchaser to execute this Agreement and consummate this
transaction, Seller hereby represents and warrants to Purchaser, and covenants
with Purchaser, as follows:
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(a) Organization and Authority. Seller has been duly organized and is
validly existing as a Delaware limited liability company. Seller has the full
right and authority, and has obtained all necessary consents required, to enter
into this Agreement, consummate or cause to be consummated the sale of the
Property and make or cause to be made the conveyances, transfers and assignments
contemplated herein. Seller is duly qualified to do business in the State of
Colorado to the extent such qualification is required under Colorado law. The
persons signing this Agreement on behalf of Seller are authorized to do so. This
Agreement and all of the documents to be delivered by Seller at the Closing have
been or will be duly authorized and properly executed and constitute or will
constitute the valid and binding obligations of Seller, enforceable against
Seller in accordance with their terms.
(b) Conflicts. There is no agreement to which Seller is a party or, to
Seller's Knowledge, binding on Seller or the Property which is in conflict with
this Agreement or which would limit or restrict the timely performance by Seller
of its obligations pursuant to this Agreement, other than the DTC ROFO and the
Debt Documents.
(c) Documents and Records. Seller has provided (or shall provide within
three (3) business days following the date hereof) Purchaser with, or has made
available to Purchaser, true, correct and complete copies of the items scheduled
in Exhibit C attached hereto which are in Seller's possession or control (all of
the foregoing collectively the "PROPERTY INFORMATION"); provided, however, that
with respect to any operating statements or other financial statements prepared
by or for Seller, Seller warrants that the statements delivered to Purchaser are
the statements prepared by or for Seller in the ordinary course of business, but
does not warrant the accuracy of the contents of any such statements.
Notwithstanding the foregoing, Seller shall use commercially reasonable efforts
to provide to Purchaser copies of any additional items reasonably requested by
Purchaser promptly following such request; provided, that such requests shall
relate solely to the Property (as distinguished from Seller's internal or
structuring matters), and that in no event shall Seller be required to provide
any appraisals or financial projections.
(d) Litigation. To Seller's Knowledge, there is no action, suit or
proceeding pending which (i) if adversely determined, would materially and
adversely affect the Property, or (ii) which challenges or impairs Seller's
ability to execute, deliver or perform this Agreement or consummate the
transaction contemplated hereby.
(e) Lease. Exhibit D sets forth, for the IFG Lease, (i) the name of the
tenant thereunder, (ii) the number of rentable square feet demised by such
Lease, and (iii) the expiration date of the initial term of such Lease (or if
such Lease has previously been renewed or extended, the present renewal or
extension term). Except as scheduled in Exhibit D, and except for the MDC
Sublease (as hereinafter defined) to which Seller is not a party, (w) there are
no leases (written or oral) affecting the Property or any part thereof, (x)
Seller has not given IFG a written notice of default which has not been remedied
or cured to the satisfaction of Seller, (y) Seller has not received a written
notice of default from IFG which has not been remedied or cured to the
satisfaction of such tenant, and (z) to Seller's Knowledge as of the date of
this Agreement, the IFG Lease is in full force and effect, and no default now
exists thereunder. The IFG Lease is with a tenant in possession (or with a right
to possession, it being acknowledged by Purchaser that IFG has entered into a
sublease with M.D.C. Holdings, Inc. with respect to one of the buildings
comprising the Improvements, and Seller has consented to such sublease (the "MDC
SUBLEASE")) of the demised premises, and (together with the landlord's consent
to sublease set forth on Exhibit D) sets forth the entire agreement between the
landlord and tenant under the IFG Lease.
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(f) Service Contracts; Management Agreement. As set forth on Exhibit E,
there are no Service Contracts presently outstanding with respect to the
Property entered into by Seller. Seller is not a party to the Management
Agreement; Purchaser acknowledges that Property Manager currently manages the
Property pursuant to the Management Agreement between IFG and Property Manager,
and that Property Manager takes direction from IFG with respect to the
management of the Property pursuant to the terms of the Management Agreement, a
copy of which has been provided to Purchaser. The terms of the Management
Agreement and IFG's direction to Property Manager may conflict with the terms of
Section 9 of this Agreement, and Purchaser acknowledges that Property Manager is
not bound by the terms of such section or any other provision of this Agreement.
(g) Notice of Violations. Seller has received no written notice that
either the Property or the use thereof violates any laws, rules and regulations
of any federal, state, city or county government or any agency, body, or
subdivision thereof having any jurisdiction over the Property that have not been
resolved to the satisfaction of the issuer of the notice. To Seller's Knowledge,
neither the Property nor the use thereof violates any laws, rules and
regulations of any federal, state, city or county government or any agency,
body, or subdivision thereof having any jurisdiction over the Property in any
material respect.
(h) Withholding Obligation. The sole member of Seller is not a "foreign
person" within the meaning of Section 1445 of the Internal Revenue Code.
(i) Condemnation. To Seller's Knowledge, there are no pending or
threatened condemnation or similar proceedings affecting the Property or any
part thereof.
(j) Leasing Brokerage Agreements/Tenant Improvements. Except as set forth
in the IFG Lease or in Exhibit D, Seller has not entered into any leasing
brokerage agreements or leasing commission agreements respecting leasing
activities at the Property. Seller has paid all tenant improvement and other
construction costs required to be paid by the landlord under the IFG Lease. Any
potential liability of Seller under the foregoing sentence regarding tenant
improvement and construction costs shall be released by Purchaser at Closing to
the extent such costs are confirmed by the Tenant Estoppel.
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(k) Bankruptcy. Seller (i) has not admitted in writing its inability to
pay its debts as they mature, and (ii) has not been adjudicated a bankrupt or
filed a petition in voluntary bankruptcy or a petition or answer seeking
reorganization or an arrangement with creditors under the Federal bankruptcy
laws or any similar law or statute of the United States or any state and no such
petition has been filed against Seller.
(l) Covenants. Seller covenants and agrees that during the Contract
Period:
(1) Seller will timely pay and perform its obligations
under the IFG Lease and the Service Contracts to be assumed by
Purchaser pursuant hereto.
(2) Seller shall provide Purchaser with prompt notice
and copies of all new leases, lease amendments and lease
extensions ("NEW LEASES") and lease terminations occurring
during the Contract Period. Seller shall solicit input from
Purchaser regarding, and keep Purchaser informed of the status
of, proposed New Leases, and will provide Purchaser with
copies of drafts, proposals, letters of intent and other
similar documentation pertaining to such proposed New Leases.
Prior to the expiration of the Inspection Period or the
earlier termination of this Agreement, Seller shall not enter
into any New Leases or lease terminations without obtaining
Purchaser's prior written consent, which shall not be
unreasonably conditioned, delayed or withheld and shall be
deemed given if Purchaser does not reject the same within five
(5) business days after notice thereof from Seller. Following
the expiration of the Inspection Period and prior to the
Closing or the earlier termination of this Agreement, Seller
shall not enter into any New Leases or lease terminations
without obtaining Purchaser's prior written consent, which
consent may be withheld in Purchaser's sole discretion, but
which shall be deemed given if Purchaser does not reject the
same within five (5) business days after notice thereof from
Seller. In no event shall this covenant be construed to limit
the ability of IFG under the IFG Lease to enter into any
proposed subleases, nor shall it be construed to require that
Seller disapprove of any such proposed sublease or otherwise
take or omit to take any action in connection with any such
proposed sublease, but prior written notice of any of the
foregoing shall be given to Purchaser to the extent known to
Seller.
(3) From and after the date hereof, Seller will not
enter into any contract (other than New Leases and lease
terminations as provided in the foregoing subsection (2)) that
will be an obligation affecting the Property subsequent to the
Closing Date except contracts entered into in the ordinary
course of business that are terminable without cause and
without payment of a penalty on not more than 30-days' notice.
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(4) Seller will not remove any Personal Property from
the Real Property except as may be required for necessary
repair or replacement, and in the event of such replacement,
the replacement shall be of equal or better quality and
quantity as existed as of the time of its removal.
(5) Seller will continue to operate and maintain the
Property in accordance with past practices and will not make
any material alterations or changes thereto; provided,
however, that notwithstanding past practices Seller shall not
be required to make any capital expenditures in maintaining
and operating the Property except as otherwise expressly
provided in this Agreement.
(6) Seller will maintain (or will use reasonable efforts
to cause IFG to maintain) all-risk casualty insurance of a
level and type consistent with the insurance maintained by
Seller or IFG prior to the execution of this Agreement in
force with respect to the Property in an amount equal to the
full replacement cost of the Property.
(7) Within five (5) business days after the date of this
Agreement, Seller will send a Tenant Estoppel to IFG and will
use commercially reasonable efforts to obtain and deliver an
executed Tenant Estoppel to Purchaser at least five (5)
business days prior to Closing from IFG. In the event that the
Tenant Estoppel delivered to Purchaser shall contain any
statement of fact, information or other matter which is
inconsistent with the matters stated in Seller's
representations in this Section 4, the Tenant Estoppel shall
control and Seller shall have no liability for any claim based
upon a breach of representation regarding such statement of
fact, information or other matter contained in the Tenant
Estoppel.
(8)(A) Purchaser may, at its option, prepare and submit
to Seller and Seller's counsel for their review and approval a
form of guarantor estoppel which Purchaser proposes to be
executed by AMVESCAP, PLC, as guarantor under the IFG Lease
(the "GUARANTOR ESTOPPEL"). If Seller fails to deliver any
comments to such form within three (3) business days following
receipt, such form will be deemed approved by Seller and its
counsel. Within five (5) business days after the date of the
approval, or deemed approval, of the Guarantor Estoppel,
Seller shall send such Guarantor Estoppel to IFG and/or
AMVESCAP, PLC and will use commercially reasonable efforts to
obtain and deliver an executed Guarantor Estoppel to Purchaser
at least five (5) business days prior to Closing from
AMVESCAP, PLC. Purchaser acknowledges and agrees that
execution and delivery of the Guarantor Estoppel by AMVESCAP,
PLC, and Purchaser's receipt of same, shall not under any
circumstances constitute a condition to Purchaser's
obligations under this Agreement, and that the failure to
obtain the Guarantor Estoppel shall not constitute a default
by Seller under this Agreement. Purchaser further agrees that
it will accept any Guarantor Estoppel without regard to any
qualifications, deletions or modifications thereto made by
AMVESCAP, PLC, and that no such qualifications, deletions or
modifications shall entitle Purchaser to terminate this
Agreement.
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(B) Purchaser may, at its option, prepare and submit to
Seller and Seller's counsel for their review and approval one
or more forms of estoppel certificates which Purchaser
proposes to be executed by third parties with respect to any
reciprocal easement agreement or like instrument appearing on
the Title Report (the "REA ESTOPPELS"). If Seller fails to
deliver any comments to such form(s) within three (3) business
days following receipt, such form will be deemed approved by
Seller and its counsel. Within five (5) business days after
the date of the approval, or deemed approval, of the REA
Estoppels, Seller shall send such REA Estoppel to the party
from which such REA Estoppel is requested and will use
commercially reasonable efforts to obtain and deliver an
executed REA Estoppel to Purchaser at least five (5) business
days prior to Closing. Purchaser acknowledges and agrees that
execution and delivery of any REA Estoppels, and Purchaser's
receipt of same, shall not under any circumstances constitute
a condition to Purchaser's obligations under this Agreement,
and that the failure to obtain any requested REA Estoppels
shall not constitute a default by Seller under this Agreement.
Purchaser further agrees that it will accept any REA Estoppels
without regard to any qualifications, deletions or
modifications thereto made by the party from which such REA
Estoppel is requested, and that no such qualifications,
deletions or modifications shall entitle Purchaser to
terminate this Agreement.
(9) Seller shall not do anything, nor authorize anything
to be done, which would materially adversely affect the
condition of title as shown on the Title Commitment.
(10) Seller shall notify Purchaser promptly upon
receiving written notice during the Contract Period of any
violation of any law, ordinance or regulation which affects
the Property or any portion thereof. Seller shall provide
Purchaser with copies of any notice of default given or
received by or on behalf of Seller with respect to any Lease
to be assumed by Purchaser pursuant to this Agreement.
(11) If requested by Purchaser at any time during the
Contract Period, Seller will use commercially reasonable
efforts, but at Purchaser's sole cost and expense, to cause
any roof, HVAC and other warranties held by Seller and given
by third parties with respect to the Property to be
transferred to Purchaser at Closing.
(12) Unless Purchaser delivers a Termination Notice or
this Agreement is otherwise terminated prior to the expiration
of the Inspection Period, Seller will send a notice to Lender
promptly following the expiration of the Inspection Period
pursuant to which Seller shall request that Lender grant the
Loan Defeasance Approval as soon as possible consistent with
the terms of this Agreement.
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(m) Required Colorado Disclosure. Seller hereby makes the following
specific disclosure to Purchaser:
SPECIAL TAXING DISTRICTS MAY BE SUBJECT TO GENERAL
OBLIGATION INDEBTEDNESS THAT IS PAID BY REVENUES PRODUCED FROM
ANNUAL TAX LEVIES ON THE TAXABLE PROPERTY WITHIN SUCH
DISTRICTS. PROPERTY SELLERS IN SUCH DISTRICTS MAY BE PLACED AT
RISK FOR INCREASED MILL LEVIES AND EXCESSIVE TAX BURDENS TO
SUPPORT THE SERVICING OF SUCH DEBT WHERE CIRCUMSTANCES ARISE
RESULTING IN THE INABILITY OF SUCH A DISTRICT TO DISCHARGE
SUCH INDEBTEDNESS WITHOUT SUCH AN INCREASE IN MILL LEVIES.
PURCHASERS SHOULD INVESTIGATE THE DEBT FINANCING REQUIREMENTS
OF THE AUTHORIZED GENERAL OBLIGATION INDEBTEDNESS OF SUCH
DISTRICTS, EXISTING MILL LEVIES OF SUCH DISTRICT SERVICING
SUCH INDEBTEDNESS, AND THE POTENTIAL FOR AN INCREASE IN SUCH
MILL LEVIES.
(n) Notice of Violations of Environmental Laws. To Seller's Knowledge,
Seller has not received any written notice from the United States Environmental
Protection Agency or any other federal, state or local governmental authority,
any tenant of the Property, any adjacent landowner or any other party alleging
that the Property is presently in violation of any applicable laws concerning
Hazardous Materials.
5. Purchaser's Representations and Warranties. As a material inducement to
Seller to execute this Agreement and consummate this transaction, Purchaser
hereby represents and warrants to Seller, and covenants with Seller, as follows:
(a) Organization and Authority. Purchaser has been duly organized and is
validly existing as a Delaware limited partnership. Purchaser has the full right
and authority, and has obtained all necessary consents required, to enter into
this Agreement and consummate or cause to be consummated the acquisition of the
Property. The persons signing this Agreement on behalf of Purchaser are
authorized to do so. This Agreement and all of the documents to be delivered by
Purchaser at the Closing have been authorized and properly executed and will
constitute the valid and binding obligations of Purchaser, enforceable against
Purchaser in accordance with their terms.
(b) Conflicts. There is no agreement to which Purchaser is a party or to
Purchaser's knowledge binding on Purchaser which is in conflict with this
Agreement.
(c) ERISA. Purchaser is not acquiring any of the Property with the "plan
assets" (as defined in 29 C.F.R. 2510.3-101) of (i) any "employee benefit plan"
subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (ii) any "plan" subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "CODE") or (iii) any other plan or
retirement arrangement subject to applicable law that is substantially similar
to Section 406 of ERISA or Section 4975 of the Code.
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(d) Defeasance. Purchaser shall cooperate reasonably with Seller and
Lender in connection with obtaining the Loan Defeasance Approval; provided, that
Purchaser shall not be required to pay any costs to Seller or Lender in
connection with such cooperation.
6. As Is Sale; Release.
(a) By closing this transaction, Purchaser acknowledges and agrees that it
has been given a full opportunity to inspect and investigate each and every
aspect of the Property, either independently or through agents of Purchaser's
choosing, including, without limitation:
(1) All matters relating to title, together with all governmental
and other legal requirements such as taxes, assessments, zoning, use permit
requirements and building codes;
(2) The physical condition of the Property, including, without
limitation, the interior, the exterior, the structure, the paving, the
utilities, the floor slabs, and all other physical and functional aspects of the
Property. Purchaser's examination of the physical condition of the Property has
included such inspection for the presence or absence of Hazardous Materials as
Purchaser has deemed necessary or desirable in its sole discretion and expense;
(3) Any easements and/or access rights affecting the Property;
(4) The IFG Lease and all matters in connection therewith,
including, without limitation, the ability of the tenant thereunder to pay the
rent;
(5) The Service Contracts (if any) and any other documents or
agreements of significance affecting the Property and furnished to Purchaser;
and
(6) The Floor Slab Reports and all matters in connection therewith.
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(b) WITHOUT LIMITING THE GENERALITY OF SECTION 6(A) ABOVE, PURCHASER
SPECIFICALLY ACKNOWLEDGES AND AGREES THAT, SUBJECT TO THE EXPRESS PROVISIONS OF
SECTION 4, SELLER IS CONVEYING AND PURCHASER IS ACQUIRING THE PROPERTY ON AN "AS
IS, WHERE IS" AND "WITH ALL FAULTS" BASIS AND THAT, EXCEPT AS EXPRESSLY PROVIDED
IN SECTION 4, PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF
ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, FROM SELLER, ITS AGENTS, OR BROKERS AS
TO ANY MATTERS CONCERNING THE PROPERTY OR ANY PART THEREOF, INCLUDING WITHOUT
LIMITATION: (I) THE QUALITY, NATURE, ADEQUACY AND PHYSICAL CONDITION OF THE
PROPERTY, INCLUDING, BUT NOT LIMITED TO THE STRUCTURAL ELEMENTS, FLOOR SLABS,
FOUNDATION, ROOF, APPURTENANCES, ACCESS, LANDSCAPING, PARKING FACILITIES AND THE
ELECTRICAL, MECHANICAL, HVAC, PLUMBING, SEWAGE, AND UTILITY SYSTEMS, FACILITIES
AND APPLIANCES, (II) THE QUALITY, NATURE, ADEQUACY, AND PHYSICAL CONDITION OF
SOILS, GEOLOGY AND ANY GROUNDWATER, (III) THE EXISTENCE, QUALITY, NATURE,
ADEQUACY AND PHYSICAL CONDITION OF UTILITIES SERVING THE PROPERTY, (IV) THE
DEVELOPMENT POTENTIAL OF THE PROPERTY, AND THE PROPERTY'S USE, HABITABILITY,
MERCHANTABILITY, OR FITNESS, SUITABILITY, VALUE OR ADEQUACY OF THE PROPERTY FOR
ANY PARTICULAR PURPOSE, (V) THE ZONING OR OTHER LEGAL STATUS OF THE PROPERTY OR
ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON USE OF THE PROPERTY, (VI) THE
COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE CODES, LAWS,
REGULATIONS, STATUTES, ORDINANCES, COVENANTS, CONDITIONS AND RESTRICTIONS OF ANY
GOVERNMENTAL OR QUASI-GOVERNMENTAL ENTITY OR OF ANY OTHER PERSON OR ENTITY,
(VII) THE PRESENCE OF HAZARDOUS MATERIALS ON, UNDER OR ABOUT THE PROPERTY OR THE
ADJOINING OR NEIGHBORING PROPERTY, (VIII) THE QUALITY OF ANY LABOR AND MATERIALS
USED IN ANY IMPROVEMENTS, (IX) THE CONDITION OF TITLE TO THE PROPERTY, (X) THE
IFG LEASE, THE SERVICE CONTRACTS OR OTHER AGREEMENTS AFFECTING THE PROPERTY AND
FURNISHED TO PURCHASER, AND (XI) THE ECONOMICS OF THE OPERATIONS OF THE
PROPERTY.
(c) WITHOUT LIMITING THE ABOVE, PURCHASER ON BEHALF OF ITSELF AND ITS
SUCCESSORS AND ASSIGNS WAIVES ITS RIGHT TO RECOVER FROM, AND FOREVER RELEASES
AND DISCHARGES THE SELLER RELATED PARTIES, AND EACH OF THEM, FROM ANY AND ALL
DEMANDS, CLAIMS, LEGAL OR ADMINISTRATIVE PROCEEDINGS, LOSSES, LIABILITIES,
DAMAGES, PENALTIES, FINES, LIENS, JUDGMENTS, COSTS OR EXPENSES WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND COSTS), WHETHER
DIRECT OR INDIRECT, KNOWN OR UNKNOWN, FORESEEN OR UNFORESEEN, THAT MAY ARISE ON
ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED (42 U.S.C. SECTION
6901, ET SEQ.), THE RESOURCES CONVERSATION AND RECOVERY ACT OF 1976 (42 U.S.C.
SECTION 6901, ET SEQ.), THE CLEAN WATER ACT (33 U.S.C. SECTION 1251, ET SEQ.),
THE SAFE DRINKING WATER ACT (14 U.S.C. SECTION 1401, ET SEQ.), THE HAZARDOUS
MATERIALS TRANSPORTATION ACT (49 U.S.C. SECTION 1801, ET SEQ.), THE TOXIC
SUBSTANCE CONTROL ACT (15 U.S.C. SECTION 2601, ET SEQ.), AND ANY SIMILAR
ENVIRONMENTAL STATE OR LOCAL STATUTES, REGULATIONS, RULES OR REQUIREMENTS. THE
PROVISIONS OF THIS SECTION SHALL SURVIVE CLOSING; PROVIDED, HOWEVER, THAT
NOTHING IN THIS SECTION 6(C) SHALL RELEASE SELLER FROM ANY LIABILITY ARISING OUT
OF (X) ANY INACCURACY OR BREACH OF ANY OF THE REPRESENTATIONS AND WARRANTIES
MADE BY SELLER IN SECTION 4, OR PRECLUDE PURCHASER FROM THE EXERCISE OF ANY
RIGHT OR REMEDY AVAILABLE UNDER THIS AGREEMENT BY REASON OF ANY INACCURACY OR
BREACH OF SUCH REPRESENTATIONS AND WARRANTIES, (Y) THE IMPROPER RELEASE OR
DISPOSAL OF HAZARDOUS MATERIALS AT THE REAL PROPERTY BY SELLER OR ITS AUTHORIZED
AGENTS OR EMPLOYEES, AND (Z) ANY FRAUD OR INTENTIONAL MISREPRESENTATION BY
SELLER.
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7. Representations, Warranties and Covenants Prior to Closing.
(a) The continued validity in all material respects of the foregoing
representations and warranties shall be a condition precedent to the obligation
of the party to whom the representation and warranty is given to close this
transaction.
(b) If Purchaser acquires knowledge that any of Seller's representations
and warranties are or shall not be true and correct in any material respect at
any time on or before the Closing Date, and such breach of representation or
warranty remains uncured for a period of fifteen (15) days after notice thereof
from Purchaser to Seller, then Purchaser may, at Purchaser's option, exercised
by written notice to Seller, either (i) proceed with this transaction, accepting
the applicable representation and warranty as being modified by such subsequent
matters or knowledge and waiving any right relating thereto, if any, or (ii)
terminate this Agreement and declare this Agreement to be of no further force
and effect and in which event the ▇▇▇▇▇▇▇ Money shall promptly be returned to
Purchaser and Seller shall have no liability to Purchaser hereunder by reason
thereof; provided, however, that if the breach of any representation or warranty
of Seller hereunder results from the willful and intentional act of Seller,
Purchaser shall have the rights and remedies available to Purchaser hereunder
upon a default hereunder or breach hereof by Seller.
(c) Seller shall provide written notice to Purchaser if Seller acquires
knowledge that any of Seller's representations and warranties are or shall not
be true and correct in any material respect at any time on or before the Closing
Date. If any such notice is delivered by Seller to Purchaser prior to the end of
the Inspection Period and Purchaser does not terminate this Agreement as set
forth herein prior to the end of the Inspection Period, then the applicable
representation and warranty shall be deemed to have been modified by such notice
and Purchaser shall be deemed to have waived any right relating thereto.
8. Survival of Representations and Warranties After Closing; Limitation of
Seller's Liability.
(a) All representations and warranties of Seller herein shall survive the
Closing for a period of one (1) year (THE "LIMITATION PERIOD").
(b) Purchaser shall provide written notice to Seller of any breach of any
of Seller's warranties or representations of which Purchaser acquires knowledge
at any time after the Closing Date but prior to the expiration of the Limitation
Period, and shall allow Seller thirty (30) days within which to cure such
breach, or, if such breach is susceptible of cure but cannot reasonably be cured
within thirty (30) days, an additional reasonable time period required to effect
such cure so long as such cure has been commenced within such thirty (30) days
and diligently pursued to completion within ninety (90) days from the date of
receipt of Purchaser's notice of such breach. If Seller fails to cure such
breach after written notice and within such cure period (as extended),
Purchaser's sole remedy shall be an action at law for damages as a consequence
thereof, which must be commenced, if at all, within thirty (30) days after the
expiration of the Limitation Period.
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(c) Notwithstanding anything in this Section 8 to the contrary, (i)
Purchaser shall not be entitled to make a claim against Seller for a violation
of the representations, warranties, and covenants unless the amount of damages
to Purchaser equals or exceeds Fifty Thousand Dollars ($50,000) in any one
instance and (ii) the cumulative, maximum amount of liability that Seller shall
have to Purchaser for breaches of the representations, warranties and covenants
under this Agreement and in any document executed by Seller pursuant to this
Agreement shall not exceed Two Million Dollars ($2,000,000).
(d) Purchaser agrees that none of the partners, trustees, shareholders,
members, directors, officers, employees or agents of Seller or any affiliate of
Seller shall have any liability to Purchaser arising under or in connection with
this Agreement or the transaction contemplated hereby, all such liability being
expressly limited to Seller and its assets.
9. Inspections.
(a) During the Inspection Period, Purchaser may review the Property
Information and any additional information delivered or made available to
Purchaser pursuant to Section 4(c) above, and examine, inspect, and investigate
the Property to determine whether, in Purchaser's sole judgment and discretion,
Purchaser wishes to proceed to acquire the Property.
(b) Purchaser shall have reasonable access to the Property (subject to and
consistent with the rights of IFG and its subtenants under the IFG Lease) for
the purpose of conducting such surveys, architectural, engineering, geotechnical
and environmental inspections and tests, and any other inspections, studies, or
tests reasonably required by Purchaser in connection with the transaction
contemplated by this Agreement ("Inspections"). Purchaser shall give Seller not
less than 24 hours prior written notice before entering onto the Property to
perform inspections or tests, and in the case of tests (i) Purchaser shall
specify to Seller the precise nature of the test to be performed, (ii) invasive
testing shall require the prior advance written consent of Seller, in its sole
discretion, and (iii) Purchaser or Purchaser's contractor shall maintain public
liability and other appropriate insurance. Any inspections and testing shall be
performed in accordance with law and only by appropriately qualified and, where
applicable, licensed personnel. Purchaser shall keep the Property free and clear
of any liens arising out of its Inspections. If any inspection or test disturbs
the Property, Purchaser will restore the Property to substantially the same
condition as existed prior to any such inspection or test.
(c) Purchaser and its agents, employees, and representatives may, upon not
less than 24 hours prior notice to Seller, examine and make copies of the
Property Information, and all books and records and other materials delivered or
made available to Purchaser pursuant to Section 4(c) above relating to the
physical condition of the Property in the possession of Seller or Property
Manager at the office of Seller in Boston, Massachusetts or the office of
Property Manager in Denver, Colorado where such records are maintained, except
to the extent Seller or Property Manager is required by agreement or applicable
law to keep such books and records confidential.
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(d) Notwithstanding anything contained herein to the contrary, Seller
shall have the right, in its sole discretion, to have an employee of Seller or
any other party designated by Seller (including Seller's property manager)
present during any such Inspection and to approve any inquiries (including any
written correspondence) Purchaser may make to any tenants, property management
employees, parties to Service Contracts, or any governmental officials or
representatives. Purchaser shall give Seller not less that two (2) business
days' prior written notice of any proposed meeting with any tenant, property
management employee, party to a Service Contract, or any governmental officials
or representatives with regard to the Property; provided proper notice was
given, Purchaser may proceed with any such meeting despite the failure of Seller
to have its employee or representative present.
(e) Purchaser shall indemnify and defend Seller against and hold Seller
harmless from any and all loss, cost, claim, liability and expense (including
reasonable attorneys' fees) arising out of Purchaser's activities on the Real
Property or relating to Purchaser's Inspections.
(f) Purchaser may terminate this Agreement for any reason (or no reason)
on or before the end of the Inspection Period by delivering a written notice to
Seller (the "TERMINATION NOTICE") to such effect. If Purchaser fails, for any
reason, to timely deliver the Termination Notice to Seller on or prior to the
end of the Inspection Period, Purchaser's right to terminate this Agreement as
set forth in this Section 9(f) shall automatically lapse and be of no further
force or effect, and the ▇▇▇▇▇▇▇ Money shall become non-refundable to Purchaser
(subject to the provisions of Section 17(b)).
(g) The obligations of Purchaser under this Section 9 shall survive the
termination of the Agreement.
10. Closing.
(a) The Closing shall be accomplished through the escrow referred to in
subsection (c), and shall take place on (i) the later of (y) the fifth (5th) day
following the expiration of the Inspection Period or (z) the receipt of the Loan
Defeasance Approval, or (ii) such earlier date as Seller and Purchaser may
mutually select, or (iii) such later date to which Closing is extended in
accordance with the provisions of this Agreement, provided that (A) all
conditions precedent to the Closing have been fulfilled or have been waived in
writing by the respective party entitled to waive same, and (B) such date shall
in any case be a Payment Date (as defined in the Debt Documents), and if such
scheduled date does not constitute a Payment Date the date of the Closing shall
be extended until the next following Payment Date unless the Lender shall waive
the requirement set forth in the Debt Documents that the defeasance of the Loan
be completed only on a Payment Date. Purchaser and Seller shall use commercially
reasonable efforts to cause the Loan Defeasance Approval to be received and the
Closing to be completed as soon as practicable.
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(b) In the event that Seller fails to timely obtain the required Tenant
Estoppel pursuant to Section 11(a)(3), Seller may, unless Purchaser waives the
need for such Tenant Estoppel, elect to unilaterally extend the Closing for a
period not exceeding fifteen (15) days, to permit Seller to attempt to obtain
such Tenant Estoppels; provided, that if the extended Closing date determined in
accordance with this sentence does not constitute a Payment Date (as defined in
the Debt Documents), the extended date of the Closing shall be further extended
until the next following Payment Date unless the Lender shall waive the
requirement set forth in the Debt Documents that the defeasance of the Loan be
completed only on a Payment Date. Any such election shall be made by Seller by
notice to Purchaser not later than two (2) business days prior to the date set
for Closing hereunder.
(c) At least three (3) days prior to the date set for Closing under this
Agreement, the parties shall establish a deed and money escrow with Title
Company. Counsel for the respective parties are hereby authorized to execute the
escrow trust instructions, as well as any amendments thereto. In the event of
any conflict between the escrow trust instructions and the provisions of this
Agreement, as between the parties hereto the provisions of this Agreement shall
control.
(d) Any provision of this Section 10 to the contrary notwithstanding, in
no event shall the Closing Date occur more than one hundred fifty (150) days
following the expiration of the Inspection Period (the "OUTSIDE CLOSING DATE").
In the event that the Closing does not occur on or before the Outside Closing
Date, within five (5) days after the Outside Closing Date the Title Company
shall, unless it is notified by either of the parties hereto to the contrary,
return to the depositor thereof items which have been deposited with the Title
Company pursuant to this Agreement and pay the ▇▇▇▇▇▇▇ Money to the party
entitled thereto under the terms of this Agreement. No such return or payment of
the ▇▇▇▇▇▇▇ Money shall relieve either party hereto of any liability it may have
for its breach of this Agreement or its wrongful failure to close the
transaction contemplated by this Agreement.
11. Conditions to Purchaser's Obligation to Close.
(a) Purchaser shall not be obligated to proceed with the Closing unless
and until each of the following conditions has been either fulfilled or waived
in writing by Purchaser:
(1) This Agreement shall not have been previously
terminated pursuant to any other provision hereof.
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(2) Seller shall be prepared to deliver or cause to be
delivered to Purchaser all instruments and documents to be
delivered to Purchaser at the Closing pursuant to Section 14
or any other provision of this Agreement.
(3) Seller shall have delivered to Purchaser a Tenant
Estoppel dated not earlier than the date of this Agreement
from IFG. The Tenant Estoppel shall not (A) assert the
existence of a material default by the landlord under the IFG
Lease, (B) assert the existence of a material agreement
between the landlord and IFG not reflected in the IFG Lease,
or (C) disclose any other matter which materially and
adversely affects the Property, unless in each case, prior to
Closing, Seller shall have submitted to Purchaser written
evidence reasonably acceptable to Purchaser indicating that
any such unpermitted matter has been resolved. The completed
form of Tenant Estoppel shall be prepared by Seller and
submitted to Purchaser and Purchaser's counsel for their
review and approval prior to distribution to IFG. If Purchaser
fails to deliver any comments to such form within two (2)
business days following receipt, such form will be deemed
approved by Purchaser and its counsel. Purchaser agrees that
it will accept any Tenant Estoppel which contains language
which qualifies the statements set forth therein as being
within the "knowledge", "best knowledge", "actual knowledge"
or any words of similar import or effect of the party that
executes and delivers such Tenant Estoppel.
(4) Lender has consented to the defeasance of the Loan
and Seller and Lender have negotiated and agreed to, each in
their sole absolute discretion, the terms of appropriate
instruments evidencing same (such instruments, including
without limitation a pledge agreement, a defeasance security
agreement, an instruction letter, a comfort letter, and such
other certificates, opinions, documents or instruments as are
required in connection therewith, are referred to herein
collectively as the "LOAN DEFEASANCE DOCUMENTS").
(5) DTC West Land Venture ("DTC") shall have waived in
writing, by execution and delivery of a Certificate of Waiver
or other instrument reasonably satisfactory to Purchaser, the
DTC ROFO.
(b) In the event that any of the foregoing conditions shall not have been
fulfilled on or before the time for Closing hereunder, then subject to the
provisions of Section 17(b) hereof, Purchaser may elect, upon notice to Seller,
to terminate this Agreement, in which event the ▇▇▇▇▇▇▇ Money shall be returned
to Purchaser, and neither party shall have any further liability or obligation
to the other except for the provisions of this Agreement that expressly survive
Closing or early termination.
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12. Conditions to Seller's Obligation to Close.
(a) Seller shall not be obligated to proceed with the Closing unless and
until each of the following conditions has been fulfilled or waived in writing
by Seller:
(1) Purchaser shall be prepared to pay to Seller all
amounts to be paid to it at or prior to Closing pursuant to
the provisions of this Agreement;
(2) Purchaser shall be prepared to deliver to Seller all
instruments and documents to be delivered to Seller at the
Closing pursuant to Section 15 or any other provision of this
Agreement; and
(3) This Agreement shall not have been previously
terminated pursuant to any other provision hereof.
(4) Lender has consented to the defeasance of the Loan
and Seller and Lender have negotiated and agreed to, each in
their sole absolute discretion, the terms of the Loan
Defeasance Documents, including without limitation appropriate
instruments releasing Seller from any liability in connection
with the Loan which may arise from and after the Closing.
(5) DTC shall have waived in writing, by execution and
delivery of a Certificate of Waiver or other instrument
reasonably satisfactory to Seller, the DTC ROFO.
(b) In the event that any of the foregoing conditions shall not have been
fulfilled on or before the time for Closing hereunder, then subject to the
provisions of Section 17(a) hereof, Seller may elect, upon notice to Purchaser,
to terminate this Agreement, in which event the ▇▇▇▇▇▇▇ Money shall be returned
to Purchaser, and neither party shall have any further liability or obligation
to the other except for the provisions of this Agreement that expressly survive
Closing or early termination.
13. Title Insurance.
(a) Purchaser, at its sole expense, shall cause the Title Report to be
delivered to Purchaser within ten (10) days after the date of this Agreement,
and shall cause a copy of the Title Report to be delivered to Seller.
(b) During the Inspection Period, Purchaser shall review title to the
Property as disclosed by the Title Commitment and the Survey (and any updated
Survey), and satisfy itself as to the availability from the Title Company of the
ALTA extended coverage owner's policy of title insurance (including any required
endorsements) required by Purchaser at Closing (the "TITLE POLICY").
(c) Seller shall have no obligation to remove or cure title objections,
except for (i) liens of an ascertainable amount created by Seller, which liens
Seller shall cause to be released at the Closing or affirmatively insured over
by the Title Company, (ii) any exceptions or encumbrances to title which are
created by Seller after the date of this Agreement without Purchaser's consent,
which exceptions or encumbrances Seller shall cause to be released at the
Closing or affirmatively insured over by the Title Company and (iii) any
judgment or mechanics' liens or other encumbrances secured by any deeds of
trust, mortgages or other loan documents set forth in the Title Report and the
removal or curing of which are not otherwise the responsibility of IFG under the
IFG Lease, which liens Seller shall cause to be released at the Closing or
affirmatively insured over by the Title Company.
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(d) Purchaser may terminate this Agreement and receive a refund of the
▇▇▇▇▇▇▇ Money if the Title Company revises the Title Commitment after the date
of this Agreement to add exceptions created by Seller after the date of this
Agreement if such additional exceptions are not acceptable to Purchaser and are
not removed or affirmatively insured over by the Title Company by the Closing
Date. If Purchaser terminates this Agreement as set forth in this Section 13(c),
the ▇▇▇▇▇▇▇ Money shall promptly be returned to Purchaser and Seller shall not
have any liability to Purchaser hereunder by reason thereof and neither party
hereto shall have any liability to the other except to the extent that any
right, obligation or liability set forth herein expressly survives termination
of this Agreement.
(e) "PERMITTED EXCEPTIONS" shall mean: (i) any exception arising out of an
act of Purchaser or its representatives, agents, employees or independent
contractors; (ii) zoning ordinances and regulations; (iii) the specific
exceptions in the Title Commitment that the Title Company has not agreed to
insure over or remove from the Title Commitment as of date hereof and that
Seller is not required to remove as provided above; (iv) items shown on the
Survey or any updated Survey of the Real Property which have not been removed as
of date hereof; (v) real estate Taxes not yet due and payable; (vi) rights of
tenants, as tenants only, under the Leases; (vii) liens or claims of lien for
work or materials performed or supplied by or on behalf of a tenant; (viii)
local, state and federal laws, ordinances or governmental regulations now or
hereafter in effect relating to the Property; and (ix) such easements and other
agreements reasonably required in connection with the Light Rail Condemnation
Proceeding that do not materially and adversely affect the Real Property.
14. Seller's Closing Deposits. At Closing, Seller shall deliver or cause
to be delivered to Purchaser each of the following instruments and documents:
(a) the Deed, duly executed and acknowledged by Seller;
(b) a counterpart Assignment of Lease, duly executed and acknowledged by
Seller;
(c) the ▇▇▇▇ of Sale, duly executed and acknowledged by Seller;
17
(d) the FIRPTA Certificate, duly executed and acknowledged by the sole
member of Seller;
(e) original copies of any required real estate transfer tax declarations
executed by Seller or any other similar documentation required to evidence the
payment of any tax imposed by the state, county and city on the transaction
contemplated hereby;
(f) original copies (or photocopies certified by Seller as true, correct
and complete) of the IFG Lease and all Service Contracts in the possession of
Seller or its property manager;
(g) a Closing Statement for the transaction contemplated hereby, duly
executed and acknowledged by Seller;
(h) a Seller's ALTA Statement, duly executed and acknowledged by Seller,
in such form as is required by the Title Company to issue the Title Policy and
obtain extended coverage, provided that Seller shall not be obligated to retain
any liabilities or execute any indemnification other than as required by Section
13(c) of this Agreement;
(i) a duly executed notice to IFG in the form attached hereto as Exhibit
K;
(j) a certificate updating Seller's representations and warranties set
forth in Section 4;
(k) all master keys in Seller's possession to all locks on the Property;
(l) the Loan Defeasance Documents;
(m) the Floor Slab Holdback Agreement, duly executed by Seller or the
Seller Support Party;
(n) the DTC ROFO;
(o) the original Tenant Estoppel received by Seller from IFG;
(p) the original Guarantor Estoppel received by Seller from AMVESCAP, PLC
(if any);
(q) the original REA Estoppel(s) received by Seller (if any);
(r) a GAP indemnity in the standard form required by the Title Company in
order to issue the Title Policy and reasonably acceptable to Seller; and
(s) such other documents and instruments as may be required by any other
provision of this Agreement or as may reasonably be required to carry out the
terms and intent of this Agreement.
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15. Purchaser's Closing Deposits. At Closing, Purchaser shall deliver or
cause to be delivered to Seller each of the following instruments, documents and
amounts:
(a) the balance of the Purchase Price, plus sufficient cash to pay
Purchaser's share of all escrow costs, prorations and closing expenses as set
forth herein;
(b) a counterpart Assignment of Lease, duly executed and
acknowledged by Purchaser;
(c) original copies of any required real estate transfer tax
declarations executed by Purchaser or any other similar documentation required
to evidence the payment of any tax imposed by the state, county and city on the
transaction contemplated hereby.
(d) a Closing Statement for the transaction contemplated hereby,
duly executed and acknowledged by Purchaser;
(e) a certificate updating Purchaser's representations and
warranties set forth in Section 5;
(f) the Floor Slab Holdback Agreement, duly executed by Purchaser;
and
(g) such other documents and instruments as may be required by any
other provision of this Agreement or as may reasonably be required to carry out
the terms and intent of this Agreement.
16. Prorations and Adjustments.
(a) Subject to the provisions of Section 16(h)(2) below, the items in
subsections (1) through (4) of this Section 16(a) shall be prorated between
Seller and Purchaser as of the close of business on the day immediately
preceding the Closing Date, the Closing Date being a day of income and expense
to Purchaser:
(1) Taxes and Assessments. Real estate taxes assessed against the
Real Property ("Taxes") and special assessments against the Real Property
("ASSESSMENTS").
(2) Collected Rent. Purchaser shall receive a credit for any rent
and other income (and any applicable state or local tax on rent) under the IFG
Lease collected by Seller before Closing that applies to any period after
Closing.
(3) Utilities. Gas, electricity and other utility charges for which
Seller is liable, if any, such charges to be apportioned at Closing on the basis
of the most recent meter reading occurring prior to Closing or, if unmetered, on
the basis of a current ▇▇▇▇ for each such utility.
19
(4) Operating Expenses. Any other operating expenses or other items
pertaining to the Property which are customarily prorated between a purchaser
and a seller in the area in which the Property is located.
(b) Intentionally Omitted.
(c) Tenant Obligations. Seller shall be responsible for the payment of all
Tenant Obligations relating to the current term of IFG under the IFG Lease
scheduled on Exhibit M attached hereto, if any. With respect to Tenant
Obligations arising under Leases not set forth in Exhibit M, including any New
Leases which have been entered into in accordance with Section 4(l)(2) above,
such Tenant Obligations shall be amortized on a straight line basis over the
initial term of any such Lease and prorated between Seller and Purchaser based
on the number of days that each of Seller and Purchaser were the landlord under
any such Lease. If, as of the Closing Date, Seller shall have paid any Tenant
Obligations for which Purchaser is responsible pursuant to the forgoing
provisions, Purchaser shall reimburse Seller therefor at Closing. If, as of the
Closing Date, Seller shall not have paid any Tenant Obligations for which Seller
is responsible, Purchaser shall be entitled to receive such amounts from Seller
at the Closing.
(d) Tenant Deposits. All unapplied tenant security deposits (and interest
thereon if required by law or contract to be earned thereon) under the IFG
Lease, as reflected in the IFG Lease and confirmed in the Tenant Estoppel, shall
be transferred to Purchaser at Closing. As of the Closing, Purchaser shall
assume Seller's obligations related to tenant security deposits, but only to the
extent they are properly transferred to Purchaser. Any letters of credit held as
substitutes for security deposits shall be transferred to Purchaser at Closing,
if transferable, otherwise Seller shall hold the same on Purchaser's behalf (and
draw on the same at Purchaser's direction) pending Purchaser's receipt of a
replacement letter of credit payable to Purchaser and approved by Purchaser as
to its form. If Purchaser directs Seller to draw on any letter of credit, then
Purchaser shall indemnify, protect, defend and hold Seller harmless from and
against any loss, cost, damage, liability, claim or expense (including
reasonable attorneys' fees and court costs) arising from or relating to Seller's
having drawn upon any such letter of credit. The provisions of this Section
16(d) shall survive the Closing of the transactions contemplated by this
Agreement.
(e) Utility Deposits. Seller shall retain the deposits, if any, with
utility companies. If Seller has paid utilities no more than 30 days in advance
in the ordinary course of business, then Purchaser shall be charged its portion
of such payment at Closing. Purchaser shall be responsible for making any
security deposits required by utility companies providing service to the Real
Property.
(f) Seller Deposits. Seller shall be entitled to the return of all bonds,
deposits, letters of credit, set aside letters or other similar items, if any,
that are outstanding with respect to the Real Property that have been provided
by Seller or any of its affiliates to any governmental agency, public utility,
or similar entity (collectively, "SELLER DEPOSITS"). Purchaser shall replace
such Seller Deposits and obtain the release of Seller (or its affiliates) from
any obligations under such Seller Deposits. To the extent that any funds are
released as a result of the termination of any Seller Deposits for which Seller
did not get a credit, such funds shall be delivered to Seller immediately upon
their receipt.
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(g) Indemnity. Purchaser hereby agrees to indemnify, protect, defend and
hold Seller harmless from and against each obligation of Seller for which, and
to the extent that, credit has been given to Purchaser at the time of Closing.
Seller hereby agrees to indemnify, protect, defend and hold Purchaser harmless
from and against each obligation of Purchaser for which, and to the extent that,
credit has been given to Seller at the time of Closing. The provisions of this
Section 16(g) shall survive the Closing and shall remain in effect until the
expiration of the Limitation Period.
(h) Notwithstanding anything contained in the foregoing provisions:
(1) Any Taxes paid at or prior to Closing shall be
prorated based upon the amount actually paid. If Taxes and
Assessments for the current year have not been paid at or
prior to Closing, Seller shall be charged at Closing an amount
equal to that portion of such Taxes and Assessments which
relates to the period before Closing and Purchaser shall pay
the Taxes and Assessments prior to their becoming delinquent.
Any such apportionment made with respect to a tax year for
which the tax rate or assessed valuation, or both, have not
yet been fixed shall be based upon the tax rate and/or
assessed valuation last fixed.
(2) Charges referred to in Section 16(a) above which are
payable by tenants to a third party pursuant to Leases shall
not be apportioned hereunder, and Purchaser shall accept title
subject to any of such charges unpaid and Purchaser shall look
solely to tenants therefor for the payment of the same. If
Seller shall have paid any of such charges on behalf of a
tenant, and shall not have been reimbursed therefor by the
time of Closing, Purchaser shall pay same to Seller at Closing
on account of such charges so paid by Seller.
(3) Seller shall receive the entire advantage of any
discounts for the prepayment by it of any Taxes, Assessments,
water rates or sewer rents.
(4) As to gas, electricity and other utility charges
referred to in Section 16(a) above, Seller may on written
notice to Purchaser elect to pay at or prior to Closing one or
more of all of said items accrued to the date hereinabove
fixed for apportionment directly to the person or entity
entitled thereto, and to the extent Seller so elects, such
item shall not be apportioned hereunder.
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(5) Unpaid and delinquent rent collected by Seller or
Purchaser after the date of Closing shall be delivered as
follows: (a) if Seller collects any unpaid or delinquent rent
for the Property, Seller shall, within five (5) business days
after the receipt thereof, deliver to Purchaser any such rent
which Purchaser is entitled to hereunder relating to the date
of Closing and any period thereafter, and (b) if Purchaser
collects any unpaid or delinquent rent from the Property,
Purchaser shall, within five (5) business days after the
receipt thereof, deliver to Seller any such rent which Seller
is entitled to hereunder relating to the period prior to the
date of Closing. Seller and Purchaser agree that all rent
received by Seller or Purchaser after the Closing shall be
applied first to current rentals and then to delinquent
rentals, if any, in inverse order of maturity, remitting to
Seller, after deducting collection costs, any rent properly
allocable to Seller's period of ownership. Purchaser will make
a reasonable good faith effort after Closing to collect all
delinquent rents in the usual course of Purchaser's operation
of the Property, but Purchaser will not be obligated to
declare a lease default, engage a collection agency or take
legal action or other collection procedures to collect
delinquent rents. In the event that there shall be any rents
or other charges under the Lease which, although relating to a
period prior to Closing, do not become due and payable until
after Closing or are paid prior to Closing but are subject to
adjustment after Closing (such as year end common area expense
reimbursements and the like), then any rents or charges of
such type received by Purchaser or its agents or Seller or its
agents subsequent to Closing shall be prorated between Seller
and Purchaser as of Closing and Seller's portion thereof shall
be remitted promptly to Seller by Purchaser and Purchaser's
portion thereof shall be credited to Purchaser; provided, that
such rents or charges shall be reapportioned as soon as
practicable after the date of Closing. Upon any such
re-apportionment, a settlement in cash shall be made by the
party whose date of Closing tentative apportionment exceeded
the amount to which it is entitled on the basis of the final
apportionment to the other party.
(6) The portion of rents consisting of escalation rents,
real estate taxes and assessments, insurance, utilities and
other operating costs and expenses which are shared by tenants
of the Property on a pro rata basis, which are payable or
which have been accrued with respect to a period prior to the
date of Closing (but which are not susceptible of calculation
and verification until subsequent to the date of Closing)
shall be prorated for the month of Closing to the extent
collected. Such items shall be reapportioned, as soon as
practicable after the date of Closing, on the same fiscal
basis as such rents are calculated under the Lease, so that
the amount thereof under the Lease to which Seller shall be
entitled, as finally determined, shall be the entire amount
thereof with respect to any fiscal period ending prior to the
date of Closing, and, for the then current fiscal period, an
amount which bears the same ratio to the total escalation
rents and real estate taxes and assessments and all other
amounts paid thereunder for the current fiscal period as the
number of days in said current fiscal period which shall have
elapsed prior to the date of Closing bears to the total number
of days in said current fiscal period. Upon any such
re-apportionment, a settlement in cash shall be made by the
party whose date of Closing apportionment exceeded the amount
to which it is entitled on the basis of the final
apportionment to the other party.
22
(i) Floor Slab Repair Credit. During the course of its Inspections and its
examination of the floor slabs of the Property, Purchaser has caused to be
prepared that certain Independent Structural Evaluation by JR Engineering dated
January 18, 2006 (the "INDEPENDENT FLOOR SLAB EVALUATION"). The section of the
Independent Floor Slab Evaluation entitled "Potential Repair Costs" notes
certain existing damage to the Property observed during a site visit on January
12, 2006 (the "CURRENT FLOOR SLAB REPAIR ITEMS"), the estimated cost of
repairing which Current Floor Slab Repair Items as set forth in the Independent
Floor Slab Evaluation is Fifty One Thousand Dollars ($51,000). At the Closing,
Purchaser shall receive a credit against the Purchase Price in the amount of
Fifty One Thousand Dollars ($51,000), less the estimated cost of any of the
Current Floor Slab Repair Items repaired by Seller prior to the Closing. Without
limiting the generality of the provisions of Section 6 above or Section 21
below, Purchaser or anyone claiming by, through or under Purchaser hereby fully
waives its right to recover from, and forever releases and discharges, the
Seller Related Parties, and each of them, from any and all demands, claims,
legal or administrative proceedings, losses, liabilities, damages, penalties,
fines, liens, judgments, costs or expenses whatsoever (including, without
limitation, reasonable attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the Current Floor Slab Repair Items, and Purchaser hereby
expressly assumes all risks, liabilities, claims, damages and costs (and agrees
that Seller shall not be liable for any special, direct, indirect,
consequential, or other damages) resulting or arising from or related to the
Current Floor Slab Repair Items. The provisions of this Section 16(i) shall
survive Closing.
17. Default; Termination.
(a) If Purchaser defaults hereunder, then provided Seller is not in
default, Seller's sole and exclusive remedy shall be to terminate this Agreement
by giving written notice thereof to Purchaser, whereupon the ▇▇▇▇▇▇▇ Money shall
be retained by Seller as liquidated damages as Seller's sole and exclusive
remedy, and neither party shall have any further liability or obligation to the
other except for those liabilities and obligations that expressly survive
Closing or early termination of this Agreement. The parties acknowledge and
agree that Seller's actual damages in the event of Purchaser's default are
uncertain in amount and difficult to ascertain and that said amount of
liquidated damages was reasonably determined.
(b) If Seller defaults hereunder prior to Closing, then provided Purchaser
is not in default, Purchaser may, at its sole election, either:
23
(1) Terminate this Agreement, whereupon the ▇▇▇▇▇▇▇
Money shall be promptly returned to Purchaser and neither
party shall have any further liability or obligation to the
other except for those liabilities or obligations that
expressly survive Closing or early termination of this
Agreement; provided, that Seller shall reimburse Purchaser for
its out-of-pocket expenses incurred to third parties in
connection with the transaction contemplated by this Agreement
up to a maximum reimbursement obligation of Fifty Thousand
Dollars ($50,000.00), to be reimbursed following delivery to
Seller of paid receipts for same certified by Purchaser to
Seller to be true, correct and complete.
(2) Assert and seek judgment against Seller for specific
performance; provided, however, if the remedy of specific
performance is not legally available to Purchaser by reason of
Seller's transfer of the Property to a third party, Purchaser
shall be entitled to the prompt return of the ▇▇▇▇▇▇▇ Money,
and to pursue the actual damages sustained by Purchaser as a
result of such breach;
provided that (x) the foregoing shall be Purchaser's sole and exclusive
remedies, and the exercise of one of such remedies by Purchaser shall be deemed
an election of remedies, and shall preclude Purchaser from the exercise of the
other such remedy, and (y) subject to Section 8 hereof, nothing in this
subsection be shall limit any right or remedy available to Purchaser after
Closing in connection with any inaccuracy or breach of any of Seller's
warranties and representations set forth in Section 4.
18. Expenses.
(a) Seller and Purchaser shall each pay one-half of the escrow fee charged
by Title Company.
(b) Purchaser shall pay (i) the cost of the premium charges for the Title
Policy and any lender's title policy(ies) and for any endorsements requested by
Purchaser to the Title Policy or to any lender's title policy, (ii) all state,
county and municipal real estate transfer taxes due on the transfer of the
Property from Seller to Purchaser; (iii) all recording costs for this
transaction; and (iv) the cost of the updated Survey, if any.
(c) Seller shall pay (i) any costs and expenses charged by Lender in
connection with the purchase of the Defeasance Collateral and the release of the
Debt Documents (including, if applicable, any fees that may be assessed by
Lender and the cost of any attorney's fees incurred by Lender), and (ii) all
monetary obligations under the Service Contracts which have accrued prior to the
Closing Date.
(d) Other closing costs shall be allocated among Seller and Purchaser as
expressly provided in this Agreement, or in the absence of such provision, as is
customary in connection with commercial real estate transactions in Denver,
Colorado. Each party shall pay its own attorneys' costs, expenses and fees.
19. Intermediaries.
(a) Seller represents to Purchaser, and Purchaser represents to Seller,
that, other than Broker, there is no broker, finder, or intermediary of any kind
with whom such party has dealt in connection with this transaction.
24
(b) Seller agrees to indemnify and hold harmless Purchaser against and
from all claims, demands, causes of action, judgments, and liabilities which may
be asserted or recovered for fees, commissions, or other compensation claimed to
be due to any party with whom Seller may have dealt in connection with this
transaction, including costs and reasonable attorneys' fees incident thereto.
(c) Purchaser agrees to indemnify and hold harmless Seller against and
from all claims, demands, causes of action, judgments, and liabilities which may
be asserted or recovered for fees, commissions, or other compensation claimed to
be due to any party with Purchaser may have dealt in connection with this
transaction, including costs and reasonable attorneys' fees incident thereto,
except for any brokerage fees due from Seller to Broker pursuant to a separate
written agreement between Seller and Broker.
20. Destruction of Improvements.
(a) If prior to Closing Material Damage shall occur with respect to the
Improvements, or a condemnation proceeding is commenced or threatened in writing
by a governmental or quasi-governmental agency with the power of eminent domain
("CONDEMNATION"), then:
(1) Purchaser may elect, within fourteen (14) days from
and after the date Purchaser receives notice of said damage or
destruction, or notice of such Condemnation, by written notice
to Seller, to terminate this Agreement, in which event the
▇▇▇▇▇▇▇ Money shall be returned to Purchaser and, except for
the provisions of this Agreement that expressly survive
Closing or earlier termination of this Agreement, this
Agreement shall be void and of no further force and effect,
and neither party shall have any liability to the other by
reason hereof; or
(2) In the event Purchaser does not timely elect to
terminate pursuant to subsection (1), the transaction
contemplated hereby shall be closed without a reduction in the
Purchase Price, and Seller shall assign to Purchaser Seller's
rights in any insurance proceeds or Condemnation award to be
paid to Seller in connection with such Material Damage or
Condemnation, and, in the case of Material Damage, Seller
shall pay to Purchaser an amount equal to the deductible under
Seller's policy of casualty insurance and Seller shall execute
and deliver to Purchaser all required proofs of loss,
assignments of claims and other similar items. In such event,
any title exception arising by reason of said damage,
destruction or Condemnation shall be deemed a Permitted
Exception.
(b) If, prior to Closing, any of the Improvements are damaged or destroyed
and such damage is not Material Damage, Purchaser shall remain obligated to
close hereunder with no abatement in the Purchase Price. At Closing Seller shall
assign to Purchaser Seller's rights in any insurance proceeds to be paid to
Seller in connection with such damage or destruction, and at Closing Purchaser
shall receive a credit against the Purchase Price in an amount equal to the
deductible amount under Seller's casualty insurance policy.
25
21. Floor Slab.
(a) Without limiting the provisions of Section 6 above, Purchaser
acknowledges that it has reviewed the Floor Slab Reports and all matters in
connection therewith, including without limitation the potential costs of
correcting any known or unknown defects or movement in, or caused by the
movement of, the floor slabs of the Property, any expansive soil problems and
any moisture movement (the "FLOOR SLAB DEFECTS"), and that Seller has agreed to
make available the maximum sum of Five Hundred Thousand Dollars ($500,000) to
Purchaser as set forth herein to reimburse Purchaser for reasonable costs
incurred by Purchaser during the Holdback Limitation Period to correct the Floor
Slab Defects.
(b) At the Closing, Escrow Agent, Purchaser and Seller or an affiliate of
Seller (the "SELLER SUPPORT PARTY") shall enter into a Holdback Escrow Agreement
(the "FLOOR SLAB HOLDBACK AGREEMENT") in the form attached hereto as EXHIBIT N,
which Floor Slab Holdback Agreement shall establish an escrow account (the
"FLOOR SLAB HOLDBACK ESCROW") to be maintained with the Escrow Agent and into
which Seller or the Seller Support Party shall deposit the sum of Five Hundred
Thousand Dollars ($500,000). The Floor Slab Holdback Agreement shall provide,
among other things, that any funds remaining in the Floor Slab Holdback Escrow
at the expiration of the Holdback Limitation Period shall then be refunded to
Seller or the Seller Support Party, as applicable; provided that, if there
exists as of the expiration of the Holdback Limitation Period a good faith
dispute between Purchaser and Seller or the Seller Support Party with respect to
an earlier withdrawal requested by Purchaser, the amount in dispute shall remain
in the Floor Slab Holdback Escrow pending the resolution of the dispute
consensually or by judicial proceeding.
(c) Purchaser agrees that any and all liability of Seller and the Seller
Support Party under this Section 21 or otherwise with respect to the Floor Slab
Defects shall be limited exclusively to the funds available from time to time in
the Floor Slab Holdback Escrow.
(d) Any provision of this Agreement to the contrary notwithstanding, in
the event that the Seller Support Party enters into the Floor Slab Holdback
Agreement to be delivered at Closing and deposits into the Floor Slab Holdback
Escrow the funds required to be deposited therein, Purchaser agrees that the
entry into such agreement and the deposit of such funds by such affiliate shall
automatically serve as a novation of Seller hereunder. Accordingly, subject to
Seller Support Party's compliance with the terms of this Section 21 and the
Floor Slab Holdback Agreement, in such event Purchaser agrees that any and all
liabilities and obligations of Seller under this Section 21 and the Floor Slab
Holdback Agreement (to the extent that such liabilities and obligations survive
the Closing) shall instead be liabilities and obligations of such Seller Support
Party, and Seller shall not have any liability hereunder, all such liability
being waived and released by Purchaser and its successors and assigns to the
full extent allowed by law.
26
(e) Without limiting the generality of the provisions of Section 6 above,
upon execution by Seller or the Seller Support Party of the Floor Slab Holdback
Agreement and the deposit of the Security Amount (as defined in the Floor Slab
Holdback Agreement) Purchaser and anyone claiming by, through or under Purchaser
hereby fully waives its right to recover from, and forever releases and
discharges, the Seller Related Parties, and each of them, from any and all
demands, claims, legal or administrative proceedings, losses, liabilities,
damages, penalties, fines, liens, judgments, costs or expenses whatsoever
(including, without limitation, reasonable attorneys' fees and costs), whether
direct or indirect, known or unknown, foreseen or unforeseen, that may arise on
account of or in any way be connected with the floor slabs or floor levels of
the Property, and Purchaser hereby expressly assumes all risks, liabilities,
claims, damages and costs (and agrees that Seller shall not be liable for any
special, direct, indirect, consequential, or other damages) resulting or arising
from or related to the condition of the floor slabs or the floor levels of the
Property. The provisions of this Section 21 shall survive Closing.
22. General Provisions.
(a) This written Agreement, including all Exhibits attached hereto and
documents to be delivered pursuant hereto, shall constitute the entire agreement
and understanding of the parties, and there are no other prior or
contemporaneous written or oral agreements, undertakings, promises, warranties,
or covenants not contained herein.
(b) This Agreement may be amended only by a written memorandum
subsequently executed by all of the parties hereto.
(c) No waiver of any provision or condition of this Agreement by any party
shall be valid unless in writing signed by such party. No such waiver shall be
taken as a waiver of any other or similar provision or of any future event, act,
or default.
(d) Time is of the essence of this Agreement. In the computation of any
period of time provided for in this Agreement or by law, any date falling on a
Saturday, Sunday or legal holiday shall be deemed to refer to the next day which
is not a Saturday, Sunday, or legal holiday.
(e) In the event that any provision of this Agreement shall be
unenforceable in whole or in part, such provision shall be limited to the extent
necessary to render the same valid, or shall be excised from this Agreement, as
circumstances require, and this Agreement shall be construed as if said
provision had been incorporated herein as so limited, or as if said provision
has not been included herein, as the case may be.
(f) Headings of sections are for convenience of reference only, and shall
not be construed as a part of this Agreement.
(g) This Agreement shall be binding upon and shall inure to the benefits
of the parties hereto, and their respective heirs, executors, personal
representatives, successors, and assigns, provided, however, that (x) this
Agreement may not be assigned by Purchaser without the prior express written
consent of Seller, (y) Purchaser may, without the prior express written consent
of Seller, designate an Affiliate of Purchaser to take title to the Property by
written notice to Seller at least five (5) Business Days prior to Closing, and
(z) Purchaser may, without the prior express written consent of Seller, assign
the rights of Purchaser under this Agreement to an Affiliate of Purchaser by
written notice to Seller at least five (5) Business Days prior to Closing,
provided that no such designation or assignment shall release or discharge
Purchaser from any liability arising pursuant to this Agreement.
27
(h) All notices and other communications required or permitted hereunder
shall be in writing and shall be mailed, hand delivered, or sent by Federal
Express, UPS or other recognized overnight courier service, to the parties as
follows:
In the case of notices directed to Seller:
▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇
Challenger America, Inc.
c/o Barrington Capital Partners, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Mayer, Brown, ▇▇▇▇ & Maw LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and in the case of notices directed to Purchaser:
Caplease, LP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
Wolf, Block, ▇▇▇▇▇▇ and ▇▇▇▇▇-▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
or to such additional or other persons, at such other address or addresses as
may be designated by notice from Purchaser or Seller, as the case may be, to the
other. Notices by mail shall be sent by United States certified or registered
mail, return receipt requested, postage prepaid, and shall be deemed given and
effective two (2) business days following posting in the United States mails.
Notices by hand delivery shall be deemed given and effective upon the delivery
thereof. Notices by overnight courier shall be deemed given and effective on the
first business day following the delivery thereof to Federal Express, UPS or
another recognized overnight courier service.
28
(i) This Agreement shall be governed in all respects by the internal laws
of the State of Colorado.
(j) This Agreement may be executed in any number of identical
counterparts, any or all of which may contain the signatures of less than all of
the parties, and all of which shall be construed together as but a single
instrument.
(k) In the event of any action or proceeding brought by either party
against the other under this Agreement, the prevailing party shall be entitled
to recover, and the non-prevailing party shall pay, all costs and expenses
including its attorneys' fees in such action or proceeding in such amount as the
court may adjudge reasonable. The prevailing party shall be determined by the
court based upon an assessment of which party's major arguments made or
positions taken in the proceedings could fairly be said to have prevailed over
the other party's major arguments or positions on major disputed issues in the
court's decision. If the party which shall have commenced or instituted the
action, suit or proceeding shall dismiss or discontinue it without the
concurrence of the other party, such other party shall be deemed the prevailing
party.
(l) This Agreement shall not be construed more strictly against Seller
merely by virtue of the fact that the same has been prepared by Seller or its
counsel, it being recognized both of the parties hereto have contributed
substantially and materially to the preparation of this Agreement. All words
herein which are expressed in the neuter gender shall be deemed to include the
masculine, feminine and neuter genders and any word herein which is expressed in
the singular or plural shall be deemed, whenever appropriate in the context, to
include the plural and the singular.
(m) Seller and Purchaser hereby designate the Title Company to act as and
perform the duties and obligations of the "reporting person" with respect to the
transaction contemplated by this Agreement for purposes of 26 C.F.R. Section
1.6045-4(e)(5) relating to the requirements for information reporting on real
estate transaction closed on or after January 1, 1991. Seller, Purchaser and
Title Company shall execute at Closing a Designation Agreement designating the
Title Company as the reporting person with respect to the transaction
contemplated by this Agreement.
(n) Neither this Agreement nor any memorandum or evidence hereof shall be
recorded in any public records by Purchaser; provided, however, that the
foregoing shall not preclude the recording of a lis pendens notice upon the
filing of an action by Purchaser for specific performance of this Agreement. If
this Agreement or a memorandum hereof is recorded by Purchaser in violation of
this Section 22(n), this Agreement shall be deemed ipso facto canceled and
terminated, the ▇▇▇▇▇▇▇ Money shall thereupon be forfeited to Seller, and
Purchaser shall have no further interest in the Property, pursuant to this
Agreement or otherwise.
29
(o) Until the Closing, Purchaser and its representatives shall hold in
strictest confidence all data and information obtained with respect to the
operation and management of the Property, whether obtained before or after the
execution and delivery hereof, and shall not use such data or information for
purposes unrelated to this Agreement or disclose the same to others except as
expressly permitted hereunder. The preceding sentence shall not be construed to
prevent Purchaser from disclosing to its beneficiaries, prospective lenders or
investors, or to its officers, directors, attorneys, accountants, architects,
engineers and consultants to perform their designated tasks in connection with
Purchaser's inspection of the Property, provided Purchaser advises any such
party of the confidential nature of the information disclosed. However, neither
party shall have this obligation concerning information which: (a) is published
or becomes publicly available through no fault of either the Purchaser or
Seller; (b) is rightfully received from a third party; or (c) is required to be
disclosed by law. In the event this Agreement is terminated or Purchaser fails
to perform hereunder, Purchaser shall promptly return to Seller any statements,
documents, schedules, exhibits or other written information obtained from Seller
in connection with this Agreement or the transactions contemplated hereby. In
the event of a breach or threatened breach by Purchaser or its agents,
consultants and/or lenders of this paragraph, Seller shall be entitled to an
injunction restraining Purchaser from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting
Seller from pursuing any other available remedy at law or in equity for such
breach or threatened breach.
(p) Prior to Closing neither Seller nor Purchaser shall make any public
announcement or disclosure of any information related to this Agreement to
outside brokers or third parties without the prior written specific consent of
the other; provided, however, that Seller and Purchaser may make disclosure of
this Agreement to its lenders, creditors, officers, managers, members, employees
and agents as necessary to perform its obligations hereunder and to others as
required by law or by any regulatory body having jurisdiction over Seller or
Purchaser or their respective Affiliates. After Closing, either party may
announce or disclose the fact that the transaction contemplated by this
Agreement was closed. In the event of a breach or threatened breach by Seller,
Purchaser or their agents, consultants and/or lenders of this Section, then in
addition to any other remedy available hereunder the nonbreaching party shall be
entitled to an injunction restraining the breaching party from disclosing, in
whole or in part, such confidential information. Notwithstanding the foregoing,
either party may, following the end of the Inspection Period and prior to
Closing and without the prior written consent of the other party, announce or
disclose the transaction contemplated by this Agreement; provided, that such
announcements or disclosures shall be limited to the location of the Property,
the identity of the tenant, and the Purchase Price.
[Signature page follows]
30
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
SELLER: CHALLENGER SOUTH MONACO, L.L.C., a Delaware limited liability
company
By: CHALLENGER REIT NUMBER 1 LIMITED, a Maryland
corporation, its sole member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Authorized Signatory
--------------------------------------
PURCHASER: CAPLEASE, LP, a Delaware limited partnership
By: CLF OP General Partner, LLC, a Delaware limited
iability company, its general partner
By: Capital Lease Funding, Inc., a Maryland
corporation, its sole member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
GLOSSARY OF DEFINED TERMS
AFFILIATE means, with respect to any entity, (a) an entity that directly
or indirectly controls, is controlled by or is under common control with the
entity in question or (b) an entity whose economic interest is owned and
controlled by such entity. For purposes of the foregoing definition, "controls"
(and its correlative terms "controlled by" and "under common control with")
means possession by the applicable entity of the power to direct or cause the
direction of the management and policies thereof, whether through the ownership
of voting securities, by contract, or otherwise.
ASSESSMENTS has the meaning set forth in Section 16 hereof.
ASSIGNMENT OF LEASE means an assignment by Seller and assumption by
Purchaser of Seller's interest in the IFG Lease, the Service Contracts,
applicable warranties and guaranties and other intangible property affecting or
related to the Property as of the Closing Date in the form attached to this
Agreement as Exhibit G and incorporated herein by this reference.
▇▇▇▇ OF SALE means a ▇▇▇▇ of sale in the form attached to this Agreement
as Exhibit H and incorporated herein by this reference.
BROKER means CB ▇▇▇▇▇▇▇ ▇▇▇▇▇.
CLOSING means the close of escrow hereunder on the Closing Date.
CLOSING DATE means the date upon which the Closing occurs.
CLOSING STATEMENT means a closing statement of adjustments and prorations
prepared by Title Company and approved by Purchaser and Seller at or prior to
the Closing.
CONDEMNATION has the meaning set forth in Section 20 hereof.
CONTRACT PERIOD means the period from the date of this Agreement through
and including the Closing Date.
DEBT DOCUMENTS means the instruments evidencing, securing and pertaining
to the Loan, which instruments are described on Exhibit F attached hereto and
incorporated by this reference.
DEED means a Special Warranty Deed of the Real Property, subject to the
Permitted Exceptions, in the form attached to this Agreement as Exhibit I and
incorporated herein by this reference.
DOLLARS OR $ means the legal currency of the United States of America.
DTC has the meaning set forth in Section 11 hereof.
DTC ROFO means DTC's right to purchase the Property pursuant to the right
of first offer set forth in that certain Special Warranty Deed from DTC to USAA
Real estate Company dated June 30, 2000 and recorded in the office of the Denver
County Clerk and Recorder on July 5, 2000 as Document Number 20000-93979.
▇▇▇▇▇▇▇ MONEY has the meaning set forth in Section 3 hereof.
FIRPTA CERTIFICATE means a certificate, in the form attached to this
Agreement as Exhibit J and incorporated herein by this reference, certifying the
information required by 1445 of the Internal Revenue Code and the regulations
issued thereunder to establish, for the purposes of avoiding Purchaser's tax
withholding obligations, that the sole member of Seller is not a "foreign
person" as defined in Internal Revenue Code 1445(f)(3).
FLOOR SLAB DEFECTS has the meaning set forth in Section 21. hereof.
FLOOR SLAB HOLDBACK AGREEMENT has the meaning set forth in Section 21.
hereof.
FLOOR SLAB HOLDBACK ESCROW has the meaning set forth in Section 21 hereof.
FLOOR SLAB REPORTS means, collectively, that certain letter report
prepared by Structural Consultants Incorporated dated April 21, 2004 (identified
as SCI #03-380); that certain letter report from CTL/▇▇▇▇▇▇▇▇ Incorporated dated
April 30, 2004 (identified as CTL Job No. 38,143); that certain letter report
prepared by Structural Consultants Incorporated dated July 20, 2004 (identified
as SCI #03-380); that certain draft status letter report prepared by Structural
Consultants Incorporated dated March 8, 2005 (identified as SCI #03-380 01);
that certain building movement summary prepared by Structural Consultants
Incorporated dated June 28, 2005; that certain field report prepared by
Structural Consultants Incorporated dated September 19, 2005 (identified as SCI
#03-380); that certain field report prepared by Structural Consultants
Incorporated dated November 1, 2005 (identified as SCI #03-380); that certain
letter report from CTL/▇▇▇▇▇▇▇▇ Incorporated dated January 13, 2006 (identified
as CTL Project No. DN38,143-145); and the Independent Floor Slab Evaluation, and
each of the other drawings, reports, observations, surveys, documents,
investigations and analyses referenced or contained in any of the foregoing.
HAZARDOUS MATERIALS means and includes any hazardous, toxic or dangerous
waste substance or material defined as a "hazardous waste", "hazardous
material", "hazardous substance", "extremely hazardous waste", "restricted
hazardous waste" or similar in or for purposes of (i) any provision of Colorado
law; (ii) the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Sec. 6903 et seq.); (iii) the Clean Water Act (33 U.S.C. 1251 et
seq.); (iv) any so-called "Superfund" or "Superlien" law; or (v) any other
federal, state or local statute, law, ordinance, code, rule, regulation, order,
decree or other requirement of any governmental authority regulating, relating
to, or imposing liability or standards of conduct concerning, any hazardous,
toxic or dangerous waste, substance or material, as now or at any time hereafter
in effect.
HOLDBACK LIMITATION PERIOD has the meaning set forth in the Floor Slab
Holdback Agreement attached hereto as Exhibit N.
IFG means Invesco Funds Group, Inc.
IFG LEASE means that certain Master Lease Agreement dated as of June 30,
2000 by and between Seller (as successor to USAA Real Estate Company), as
landlord, IFG, as tenant and AMVESCAP, PLC, as guarantor.
IMPROVEMENTS has the meaning set forth in the definition of Real Property
below.
INDEPENDENT FLOOR SLAB EVALUATION has the meaning set forth in Section
16(i) hereof.
INSPECTIONS has the meaning set forth in Section 9 hereof.
INSPECTION PERIOD means the period commencing on December 23, 2005 and
ending at 5:00 p.m. Eastern Time on February 3, 2006 or such earlier date as
Purchaser may select by written notice to Seller.
INTANGIBLE PROPERTY means all of Seller's rights and interests in and to
all non-proprietary and non-confidential, as reasonably determined by Seller,
assignable intangible property related to the Real Property and the
Improvements, including, without limitation: (a) any governmental licenses,
permits and approvals held by Seller relating to the occupancy or use of the
Real Property, (b) any existing warranties held by Seller and given by third
parties with respect to the Real Property, (c) trade names and trade marks
associated with the Real Property and the Improvements, but specifically
excluding any right or interest in the name "Challenger" or any variant or
derivative thereof; (d) the plans and specifications and other architectural and
engineering drawings for the Improvements; (e) non-governmentally issued
licenses, telephone exchanges and other identifying material relating to the
Property, including street addresses, telephone numbers and goodwill associated
with the Property; and (f) all other records relating to the Property.
LEASES means all leases and/or rental agreements for occupancy of any
portion of the Real Property, as amended and modified from time to time.
LENDER has the meaning set forth in Section 2(e) hereof.
LIGHT RAIL CONDEMNATION PROCEEDING means that certain condemnation
proceeding which includes a portion of the Property and which is captioned case
No. 01 CV 3689 in the Denver County, Colorado, District Court (Department of
Transportation, State of Colorado v. USAA Real Estate Company, et al. The Light
Rail Condemnation Proceeding has been concluded by the entry of that certain
Rule and Order dated September 29, 2005 in the Denver County, Colorado, District
Court.
LIMITATION PERIOD has the meaning set forth in Section 8 hereof.
LOAN has the meaning set forth in Section 2(e) hereof.
LOAN DEFEASANCE APPROVAL means Lender's approval of Seller's defeasance of
the Loan and the approval of the Loan Defeasance Documents by Seller and Lender.
LOAN DEFEASANCE DOCUMENTS has the meaning set forth in Section 11(a)(4).
MANAGEMENT AGREEMENT means the Property Management Services Agreement
dated as of June 30, 2000 between Invesco Funds Group, Inc. and USAA Real Estate
Management Company d/b/a USAA Realty Company of Colorado relating to the
Property.
MATERIAL DAMAGE means damage (a) which is reasonably estimated to exceed
One Million Dollars ($1,000,000) to repair, or (b) that would permit IFG to
terminate its Lease.
NEW LEASES has the meaning set forth in Section 4 hereof.
PERMITTED EXCEPTIONS has the meaning set forth in Section 13 hereof.
PERSONAL PROPERTY means Seller's interest, if any, in the furniture,
fixtures, machinery, appliances, equipment, tenant improvements, supplies, and
other personal property of every nature and description, and all replacements
thereof, located on the Real Property, excluding the interest of Seller and its
affiliates in any furniture, fixtures, machinery, appliances, equipment, tenant
improvements, supplies.
PROPERTY means the Real Property, the Leases (excluding Seller's rights
otherwise expressly retained hereunder, such as to rents and liabilities
accruing prior to closing), Service Contracts (but only to the extent Seller's
obligations thereunder are expressly assumed by Purchaser pursuant to this
Agreement), Personal Property and the Intangible Property.
PROPERTY INFORMATION has the meaning set forth in Section 4(c) hereof.
PROPERTY MANAGER means USAA Real estate Management Company, d/b/a/ USAA
Real estate Company of Colorado.
PURCHASE PRICE means Sixty Nine Million Three Hundred Thousand and No/100
Dollars ($69,300,000.00).
REAL PROPERTY means that certain real property described on Exhibit B
attached to this Agreement and incorporated herein by this reference (as the
same may be revised to reflect an updated survey and any grants, easements or
similar agreements entered into by Seller in connection with the Light Rail
Condemnation Proceeding that do not materially and adversely affect such real
property), together with (a) all of the buildings, structures, fixtures and
other improvements located on such real property not owned by any of the tenants
under the Leases ("IMPROVEMENTS"), including, without limitation, any and all
plumbing, air conditioning, heating, ventilating, mechanical, electrical and
other utility systems, (b) all right, title and interest of Seller in and to the
rights, benefits, privileges, easements, tenements, hereditaments, and
appurtenances thereon or anywise appertaining to such real property, and (c) all
right, title, and interest of Seller in and to all strips and gores and any land
lying in the bed of any street, road or alley, open or proposed, adjoining such
real property or anywise appertaining to such real property, all of which is
commonly known as 4340/4350/4346 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
SELLER DEPOSITS has the meaning set forth in Section 16 hereof.
SELLER'S KNOWLEDGE means the actual knowledge of ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, and shall not be construed, by imputation or otherwise, to refer to
the knowledge of any other officer, director, agent, manager, member,
representative, employee or advisor of Seller, or impose upon Seller any duty to
inquire into or investigate the matter to which such actual knowledge, or
absence thereof, pertains.
SELLER RELATED PARTIES means Seller, Seller's Affiliates, Barrington
Capital Partners, LLC, and the partners, trustees, shareholders, members,
directors, officers, employees and agents of each of them.
SELLER SUPPORT PARTY has the meaning set forth in Section 21 hereof.
SERVICE CONTRACTS means any and all service contracts to which Seller is a
party or by which Seller is bound pertaining to the construction, operation and
ownership of the Real Property, as amended and modified from time to time.
Service Contracts expressly exclude the Management Agreement and any other
leasing or management agreement affecting the Real Property.
SURVEY has the meaning set forth in Section 2 hereof.
TAXES has the meaning set forth in Section 16 hereof.
TENANT ESTOPPEL means an estoppel certificate substantially in the form
attached to this Agreement as Exhibit L and incorporated herein by this
reference (or such other form as may be attached to or required in IFG's Lease)
from IFG.
TENANT OBLIGATIONS means tenant improvement expenses (including all hard
and soft construction costs, whether payable to the contractor or the tenant),
tenant allowances, rent abatement, moving expenses, leasing commissions and
other out-of-pocket costs, that are the obligation of the landlord under the
Leases, net of fees payable therefrom to Seller or its Affiliates.
TITLE COMMITMENT means a Commitment for Title Insurance with respect to
the Property issued by Title Company, in the full amount of the Purchase Price,
with Purchaser named as the proposed insured thereunder.
TITLE COMPANY means First American Title Insurance Company of NY, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
TITLE POLICY has the meaning set forth in Section 13 hereof.
TITLE REPORT means the Title Commitment and all documents, instruments and
agreements listed therein.
