PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is made as of this 18 day of
February, 1998, by and between (i) PRUBETA-3, a New Jersey general partnership
("Seller"), and (ii) Xxxx-Xxxx Realty Acquisition Corp., a New Jersey
corporation ("Buyer").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements set forth herein the
parties hereto do hereby agree as follows:
ARTICLE 1. - SALE OF PROPERTY
Seller agrees to sell, transfer and assign and Buyer agrees to purchase, accept
and assume, subject to the terms and conditions stated herein, all of Seller's
right, title and interest in and to the following (herein collectively called
the "Property"):
a. Real Property. Those certain parcels of real estate
located in Parsippany, New Jersey, and Hanover, New
Jersey, and legally described in Exhibit A attached
hereto and incorporated herein by this reference,
together with all buildings, improvements and fixtures
located thereon and all rights, privileges and
appurtenances pertaining thereto including all of
Seller's right, title and interest in and to all
rights-of-way, open or proposed streets, alleys,
easements, strips or gores of land adjacent thereto
(herein collectively called the "Real Property"); and
b. Personal Property. All tangible personal property
described in Exhibit A to the Xxxx of Sale attached
hereto as Exhibit F relating to the Real Property
(herein collectively called the "Personal Property"),
which intentionally excludes (i) all appraisals,
budgets, Seller's strategic plans for the Property,
internal analyses, marketing information, computer
software, submissions relating to Seller's obtaining of
corporate authorization, attorney and accountant work
product, or other similar items or information in the
possession or control of Seller or Seller's property
manager which Seller deems proprietary, (ii) all artwork
located on the Real Property and owned by Seller or by
Prudential, and (iii) computers, furniture and other
equipment and items of personal property located in the
Property's management office, except for certain limited
items of office furniture and equipment which Seller
shall leave at the
management office on the Closing Date; and
c. Other Property Rights. (a) Seller's interest as landlord
in all leases encumbering the Real Property on the
Closing Date (as defined in Section 6.1), and Seller's
interest under the documents described under the heading
"PruBeta-3 Sublease at Short Hills" in Exhibit M hereto;
and (b) if and to the extent assignable by Seller, (i)
except to the extent terminated by Seller effective on
or prior to the Closing Date as provided herein, all
service, supply, maintenance, utility and commission
agreements, all equipment leases, and all contracts,
subcontracts and agreements relating to the construction
of any unfinished tenant improvements described in
Exhibit B attached hereto and incorporated herein by
this reference, and (ii) all licenses, permits, zoning
approvals, development rights and entitlements, and
other written authorizations necessary for or utilized
in connection with the use, operation or ownership of
the Real Property or Personal Property and in Seller's
possession or control (the rights and interests of
Seller described in clauses (a) through (b) hereinabove
being herein collectively called the "Other Property
Rights").
ARTICLE 2. - PURCHASE PRICE
The total purchase price to be paid by Buyer for the purchase of the Property is
the sum of ONE HUNDRED FIFTY-SEVEN MILLION THIRTY-TWO THOUSAND AND NO/100
DOLLARS ($157,032,000.00) in immediately available funds (the "Purchase Price").
The Purchase Price shall be paid in the following manner:
a. Deposit Money. Upon the full and final execution of this
Agreement and as a condition precedent to the
effectiveness of this Agreement, Buyer shall deposit the
sum of Three Million Two Hundred Forty Thousand and
no/100 Dollars ($3,240,000.00) in immediately available
funds as a deposit (the "Deposit") with First American
Title Insurance Company whose mailing address is 00
Xxxxx XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxx Xxx Xxxxxxx, as escrow agent
("Escrow Agent"). The Deposit shall be non-refundable
except as provided in this Agreement. The Deposit shall
be held and delivered by Escrow Agent in accordance with
the provisions of the escrow agreement of even date
herewith among Buyer, Seller and Escrow Agent. Any
interest earned on the Deposit shall be added to and
considered a part of the Deposit. Except as expressly
otherwise set forth herein, the Deposit shall be applied
against the Purchase Price on the Closing Date.
2
b. Cash at Closing. On the Closing Date, Buyer shall pay to
Seller an amount equal to the difference between (a) the
Purchase Price, and (b) the amount of the Deposit as of
the Closing Date (the "Balance"), subject to the
prorations and adjustments set forth in Article 5 or as
otherwise provided under this Agreement, plus any other
amounts required to be paid by Buyer at Closing, in
immediately available funds by wire transfer as more
particularly set forth in Section 6.2.
c. Allocation of Purchase Price. Seller and Buyer hereby
agree that the Purchase Price shall be allocated One
Hundred Thirty Million Five Hundred Thirty-Two Thousand
and no/100 Dollars ($130,532,000.00) (the "Developed
Property Purchase Price") to the four (4) improved
portions of the Property, that is (i) 0 Xxxxxx Xxxxx,
(xx) 0 Xxxxxx Xxxxx, (xxx) 8 Campus Drive/7 Sylvan Way,
and (iv) 0 Xxxxxx Xxx, also known as 00 Xxxxxx Xxx
(collectively, the "Developed Property"), and Twenty-Six
Million Five Hundred Thousand Dollars ($26,500,000) (the
"Vacant Property Purchase Price") to the ten (10)
portions of the Property which are vacant parcels of
land, that is (a) 0000 Xxxxx 00, Xxxxx 3401, Xxxx 0 xxx
0, (x) Xxxxxx Xxx, Xxxxx 202, Xxx 0.00, (x) Xxxxxx Xxx,
Xxxxx 000, Xxx 7.01, (d) Sylvan Way, Block 202, Xxx
0.00, (x) Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx 0, (x)
Xxxxxx Way, Block 202, Xxx 0.00, (x) Xxxxx 000, Xxxxx
0000, Xxx 1, and (h) Eastmans Road, Block 3002, Xxx 0,
xxx (x) Xxxxx 000, Xxx 00, xxx Xxxxx 3201, Lot 2
(collectively, the "Vacant Property").
ARTICLE 3. - TITLE MATTERS
a. Title to Real Property. Seller has previously delivered
to Buyer (a) First American Title Insurance Company's
(such company, or such other title insurance company
selected by Buyer which has the ability to perform the
obligations of Title Company hereunder without delay,
the "Title Company") commitments to issue Owner's
Policies of Title Insurance with respect to the Property
(collectively, the "Title Report") identified as Title
Insurance Commitment File Nos. (i) 97-44590), (ii)
97-44591, (iii) 97- 44592, (iv) 97-44594, (v) 97-44625,
(vi) 97-44597, (vi) 97- 44626, (viii) 97-44593, (ix)
97-44595, (x) 00-00000, (xi) 97- 44934, (xii) 97-4624,
and (xiii) 98-46054 (regarding Block 202, Xxx 00, xxx
Xxxxx 0000, Xxx 0), (x) copies of all recorded documents
referred to on Schedule B of the Title Report as
exceptions to coverage (the "Title Documents"), and (c)
the
3
certified boundary surveys of the Property prepared by
Xx Xxxx Associates which accompany the Title Report
(collectively, the "Survey"). Buyer hereby confirms its
approval of the Title Report and Survey. Except as
provided in Section 3.2, Seller shall convey and Buyer
shall accept title to the Property, subject to (i)
applicable zoning and building ordinances and land use
regulations, (ii) such exceptions to title as are listed
on Schedule B of the Title Report, including the Title
Company's standard printed exceptions, (iii) such state
of facts as disclosed in the Survey, (iv) such state of
facts as would be disclosed by a physical inspection of
the Property, (v) the lien of taxes not yet due and
payable, (vi) any exceptions caused by Buyer, its
agents, representatives or employees, (vii) such other
exceptions as the Title Company may raise for judgments
against Prudential, which the Title Company shall commit
to insure over, without any additional cost to Buyer,
whether such insurance is made available in
consideration of payment, bonding, indemnity of Seller
or otherwise, and (viii) the rights of only those
tenants and other occupants of the Developed Property
who occupy space therein pursuant to the Leases (as
defined in Subsection 6.3(c)) (the foregoing exceptions
described in clauses (i) through (viii) being herein
collectively called the "Permitted Exceptions").
b. Title Defects.
i. Certain Exceptions to Title. Buyer shall have the right
to object in writing to any title matters that are not
Permitted Exceptions which may appear on supplemental
title reports or updates to the Title Report issued at
the request of Buyer after the date hereof (herein
collectively called the "Other Liens") within five (5)
days after the receipt thereof by Buyer. Unless Buyer
shall timely object to such Other Liens, all such Other
Liens which are set forth in any such supplemental
reports or updates shall be deemed to constitute
additional Permitted Exceptions. Any mortgage liens and
other consensual liens granted by Seller and listed in
the Title Report, and any exceptions which are timely
objected to by Buyer shall be herein collectively called
the "Title Objections." Seller may elect (but shall not
be obligated) to remove, or cause to be removed at its
expense, any Title Objections, and shall be entitled to
a reasonable adjournment of the Closing (not to exceed
ninety (90) days) for the purpose of such removal.
Seller shall notify Buyer in writing within five (5)
days after receipt of Buyer's notice of Title Objections
whether Seller elects to remove the same.
Notwithstanding the foregoing, Seller shall be obligated
to remove any Title Objections which result from
4
mortgage liens granted by Seller and any other title
exceptions intentionally caused by Seller. If Seller is
unable to remove or endorse over any Title Objections
prior to the Closing, or if Seller elects not to remove
one or more Title Objections, Buyer may elect to either
(a) terminate this Agreement, in which event the Deposit
shall be paid to Buyer, and thereafter, the parties
shall have no further rights or obligations hereunder
except for obligations which expressly survive the
termination of this Agreement, or (b) waive such Title
Objections, in which event such Title Objections shall
be deemed "Permitted Exceptions" and the Closing shall
occur as herein provided without any reduction of or
credit against the Purchase Price.
ii. Discharge of Title Objections. If on the Closing Date
there are any Title Objections which Seller has elected
to pay and discharge, Seller may use any portion of the
Balance to satisfy the same, provided Seller shall
deliver to Buyer at the Closing instruments in
recordable form and sufficient to satisfy such Title
Objections of record, together with the cost of
recording or filing such instruments, or with respect to
judgment liens only, provided that Seller shall cause
the Title Company to insure over the same, without any
additional cost to Buyer, whether such insurance is made
available in consideration of payment, bonding,
indemnity of Seller or otherwise.
c. Title Insurance; Survey. At Closing, the Title Company shall
issue to Buyer, at Buyer's sole cost and expense, one or more
ALTA Owner's Form of title insurance policies in the form of
the Title Report (collectively, the "Owner's Title Policy"),
in the amount of the Purchase Price, insuring that fee simple
title to the Real Property is vested in Buyer subject only to
the Permitted Exceptions. Buyer shall be entitled to request
that the Title Company provide, at Buyer's sole cost and
expense, such endorsements (or amendments) to the Owner's
Title Policy as Buyer may reasonably require, provided that
(a) such endorsements (or amendments) shall be at no cost or
additional liability to Seller, (b) Buyer's obligations under
this Agreement shall not be conditioned upon Buyer's ability
to obtain such endorsements and, if Buyer is unable to obtain
such endorsements, Buyer shall nevertheless be obligated to
proceed to close the transaction contemplated by this
Agreement (the "Transaction") without reduction of or set off
against the Purchase Price, and (c) the Closing shall not be
delayed as a result of Buyer's request. Seller shall pay all
costs incurred in connection with the preparation of the
initial Survey delivered by Seller, and Buyer shall be
required to pay all costs incurred in connection with any
update or modification thereof requested by Buyer.
5
ARTICLE 4. - BUYER'S DUE DILIGENCE/CONDITION OF THE PROPERTY
a. Due Diligence Periods. Buyer acknowledges that commencing
prior to the execution of this Agreement and continuing for a
period which will expire on February 28, 1998 (the "Due
Diligence Period"), Buyer has conducted, and shall continue to
conduct, its examinations, inspections, testing, studies
and/or investigations (herein collectively called the "Due
Diligence") of the Property and information regarding the
Property. Seller has made, and shall continue to make, the
Property files (other than confidential and privileged
materials) relating to the Property available to Buyer for
Buyer's review during the Due Diligence Period. In addition,
Seller applied to the Industrial Site Evaluation Element of
the New Jersey Department of Environmental Protection,
pursuant to the New Jersey Industrial Site Recovery Act, for a
Letter of Non-Applicability, and delivered or shall deliver
the Department's response thereto to Buyer for Buyer's review.
Notwithstanding anything to the contrary contained in this
Agreement, if Buyer in its sole discretion is not satisfied
with the results of its Due Diligence with respect to the
Property, Buyer may elect not to Purchase the Property by
written notice to Seller given in accordance with the
provisions of Section 14.9 hereof before 5:00 p.m. (Eastern
Time) on the last day of the Due Diligence Period, and, in the
event of such election not to purchase the Property, Buyer
shall be entitled to the return of the Deposit. In the event
Buyer fails to elect not to purchase the Property on or before
the last day of the Due Diligence Period, Buyer shall be
deemed to have waived its right to elect not to purchase the
Property. Buyer and Seller each acknowledge and agree that (a)
Buyer shall be permitted to conduct further inspections and
examinations regarding the Property after the expiration of
the Due Diligence Period, but Buyer shall have no additional
time to terminate this Agreement as a result thereof. At
Closing and as a material inducement for Seller to consummate
the Transaction, Buyer will deliver a certification in the
form of Exhibit D attached hereto and incorporated herein by
this reference.
b. Buyer's Acknowledgements. Buyer hereby irrevocably
acknowledges the following matters as of the date hereof, and
agrees that, subject to the provisions of Section 4.1, Buyer
shall not terminate this Agreement or directly or indirectly
request or demand (i) any reduction in the Purchase Price,
(ii) any representations or warranties of Seller other than as
expressly set forth herein, (iii) any modification of the
documents to be
6
delivered to Buyer pursuant to this Agreement, or (iv) any
other concessions or agreements from Seller, any tenant or any
other party as a result of or in connection with any such
matters:
i. Location and Market Conditions. Buyer has reviewed and
approved the location of the Property and market
conditions, including, without limitation, market lease
rates, market operating expenses, market property taxes,
market future revenue and expense growth rates, market
capitalization rates, and market discount rates.
ii. Vacant Property. Except as expressly provided in Section
7.2(d), Buyer has reviewed and approved all matters in
any way relating to the Vacant Property, including,
without limitation, zoning, entitlements, approvals,
licenses, permits, access, easements, permits, impact
fees, traffic issues, environmental matters, flood plain
issues, and wetlands issues (collectively, the "Land
Development Requirements"), including, without
limitation, (i) State of New Jersey Agreement #2585,
dated November 14, 1978, including all exhibits,
amendments and addenda thereto, (ii) Developer's
Agreement between Seller and The Township of
Parsippany-Xxxx Hills, dated September 1, 1992,
including all exhibits, amendments and addenda thereto,
and (iii) Agreement between Seller and The Township of
Hanover, dated [blank], 1994, including all exhibits,
amendments and addenda thereto. Buyer shall assume at
Closing all of Seller's and Prudential's obligations
under the documents and instruments evidencing the Land
Development Requirements, and at Closing Buyer shall
replace all guaranties, bonds, letters of credit, and
cash deposits provided by or on behalf of Seller or
Prudential with respect to the Vacant Property, with
substitute security in accordance with the requirements
of the applicable authority (or if the applicable
authority does not allow such a substitution, at Closing
Buyer shall execute and deliver an indemnity agreement,
in form and substance reasonably satisfactory to Seller,
pursuant to which Buyer indemnifies Seller or
Prudential, as the case may be, for any and all costs,
loss, damages and expenses, of any kind or nature
whatsoever, including reasonable attorneys' fees and
costs, arising out of or resulting from Buyer's failure
to satisfy the Land Development Requirements).
iii. Lintel Condition. Buyer has reviewed and approved the
condition of the lintels at 7 Campus Drive (the "Lintel
Issue"), and shall accept all risk and responsibility of
making any repairs
7
or replacements on account thereof after Closing as may
be required by the tenants or otherwise.
c. Rejected Contracts. Prior to the expiration of the Due
Diligence Period, Buyer shall notify Seller in writing of
those Existing Contracts that Buyer elects not to assume
("Rejected Contracts"). To the extent such Rejected Contracts
are terminable without cost under the terms thereof, Seller
shall terminate all Rejected Contracts, effective as of the
Closing Date, or if a termination notice period is required
and is not waived by the contractor, then effective on such
later date as may be required under the terms of such Existing
Contract.
ARTICLE 5. - ADJUSTMENTS AND PRORATIONS
The following adjustments and prorations shall be made at Closing:
a. Lease Rentals and Expenses.
i. Rents. All collected rents and other payments from
tenants under the leases shall be prorated between
Seller and Buyer as of the day prior to the Closing
Date. Seller shall be entitled to all rents (including
any percentage rent, additional rent and any accrued tax
and operating expense reimbursements and escalations),
charges, and other revenue of any kind attributable to
any period under the Leases prior to but not including
the Closing Date. Buyer shall be entitled to all rents
(including any percentage rent, additional rent and any
accrued tax and operating expense reimbursements and
escalations), charges and other revenue of any kind
attributable to any period under the Leases on and after
the Closing Date. Rents and expense escalations or other
reimbursements due landlord under the Leases not
collected as of the Closing Date shall not be prorated
at the time of Closing, but Buyer shall make a good
faith effort to collect the same on Seller's behalf and
to tender the same to Seller upon receipt (which
obligation of Buyer shall survive the Closing and not be
merged therein); provided, however, that all rents,
escalations and other reimbursements due landlord under
the Leases collected by Buyer on or after the Closing
Date shall first be applied to all amounts due under the
Leases at the time of collection for post- Closing
periods (i.e., current rents and sums due Buyer as the
current owner and landlord) with the balance (if any)
payable to Seller, but only to the extent of amounts
delinquent and actually
8
due Seller. Buyer shall not have an exclusive right to
collect the sums due Seller under the Leases and Seller
hereby retains its rights to pursue any tenant under the
Leases for sums due Seller for periods attributable to
Seller's ownership of the Property ; provided, however,
that Seller shall not be permitted to commence or pursue
any legal proceedings against any tenant seeking
eviction of such tenant or the termination of the
underlying lease. Seller's rights under the immediately
preceding sentence shall survive the Closing and not be
merged therein. Buyer shall receive a credit against the
Purchase Price for pre-paid rentals held by Seller
covering the period post-Closing.
ii. Lease Expenses. At Closing, Buyer shall reimburse Seller
for the Lease Expenses (as defined in Section 13.2) to
the extent required by the terms of Section 13.2.
b. Real Estate and Personal Property Taxes. Real estate and
personal property taxes shall be prorated on a cash
basis for the calendar year in which the Closing occurs,
regardless of the year for which such taxes are
assessed. Such proration shall be calculated based upon
the actual number of days in such calendar year, with
Seller being responsible for that portion of such
calendar year occurring prior to midnight of the day
prior to the Closing Date and Buyer being responsible
for that portion of such calendar year occurring after
midnight of the day prior to the Closing Date. If the
real estate and/or personal property tax rate and
assessments have not been set for the calendar year in
which the Closing occurs, then the proration of such
taxes shall be based upon the rate and assessments for
the preceding calendar year, and such proration shall be
adjusted between Seller and Buyer upon presentation of
written evidence that the actual taxes paid for the
calendar year in which the Closing occurs differ from
the amounts used at Closing and in accordance with the
provisions of Section 5.8. Seller shall pay all
installments of special assessments due and payable
prior to the Closing Date and Buyer shall pay all
installments of special assessments due and payable on
and after the Closing Date; provided, however, that
Seller shall not be responsible for any installments of
special assessments which have not been confirmed or
which relate to projects that have not been completed on
the date hereof. In the event the Property has been
assessed for property tax purposes at such rates as
would result in reassessment (i.e., "escape assessment"
or "roll-back taxes") based upon the change in land
usage or ownership of the Property, Buyer hereby agrees
to pay all such taxes and to indemnify and save Seller
harmless from and
9
against all claims and liability for such taxes. Such
indemnity shall survive the Closing and not be merged
therein.
c. Other Property Operating Expenses. Operating expenses
for the Property shall be prorated as of midnight of the
day prior to the Closing Date. Seller shall pay all
utility charges and other operating expenses
attributable to the Property prior to, but not including
the Closing Date (except for those utility charges and
operating expenses payable by tenants in accordance with
the Leases) and Buyer shall pay all utility charges and
other operating expenses attributable to the Property on
or after the Closing Date. To the extent that the amount
of actual consumption of any utility services is not
determined prior to the Closing Date, a proration shall
be made at Closing based on the last available reading
and post-closing adjustments between Buyer and Seller
shall be made within twenty (20) days of the date that
actual consumption for such pre-closing period is
determined, which obligation shall survive the Closing
and not be merged therein. Seller shall not assign to
Buyer any deposits which Seller has with any of the
utility services or companies servicing the Property.
Buyer shall arrange with such services and companies to
have accounts opened in Buyer's name beginning at 12:01
a.m. on the Closing Date.
d. Closing Costs. Buyer shall pay all premiums and charges
of the Title Company for the Owner's Title Policy
(including endorsements) to be issued pursuant to the
Title Report, the cost of any updates or modifications
to the Survey obtained by Buyer, one-half (1/2) of all
escrow or closing charges, all costs of Buyer's Due
Diligence and any other costs customarily paid by the
buyer pursuant to local practice. Seller shall pay all
recording and filing charges in connection with the
instruments by which Seller conveys the Property, all
transfer taxes applicable to the transfer of the
Property to Buyer, including the New Jersey Realty
Transfer Tax, one-half (1/2) of all escrow or closing
charges and, except as otherwise provided herein, any
other costs customarily paid by the seller pursuant to
local practice. Except as otherwise agreed by the
parties, each party shall pay its own attorneys. The
obligations of the parties to pay applicable escrow or
closing charges shall survive the termination of this
Agreement.
e. Cash Security Deposits. At Closing, Seller shall give
Buyer a credit against the Balance in the aggregate
amount of the
10
unapplied cash security deposits then held by Seller
under the Leases and any interest thereon less, any
administrative or similar charges to which Seller may be
entitled under applicable law.
f. Apportionment Credit. In the event the apportionments to
be made at the Closing result in a credit balance (i) to
Buyer, such sum shall be paid at the Closing by giving
Buyer a credit against the Balance in the amount of such
credit balance, or (ii) to Seller, Buyer shall pay the
amount thereof to Seller at the Closing by wire transfer
of immediately available funds to the account or
accounts to be designated by Seller for the payment of
the Balance.
g. Closing Statement. Seller shall cause its accounting
staff ("Seller's Accountants"), in cooperation with
Buyer's accounting staff ("Buyer's Accountants"), to
make such examinations and audits of the Property, and
of the books and records pertaining to the Property, as
may be necessary to make the adjustments and prorations
required under this Article 5, or under any other
provisions of this Agreement. All such adjustments and
prorations shall be made in accordance with the
provisions of this Agreement and otherwise on a cash
basis in accordance with sound accounting practices.
Based upon the results thereof, Seller's Accountants and
Buyer's Accountants will prepare and deliver to Buyer
and Seller no later than two (2) business days prior to
the Closing a closing statement (the "Closing
Statement"), which shall contain the parties' best
estimate of the amounts of the items requiring the
prorations and adjustments in accordance with this
Agreement. The amounts set forth on the Closing
Statement shall be the basis upon which the prorations
and adjustments provided for herein shall be made at the
Closing. The Closing Statement shall be binding and
conclusive on all parties hereto to the extent of the
items covered by the Closing Statement, except where
this Agreement expressly provides for further adjustment
of such amounts after Closing, and except as otherwise
provided in Section 5.8 below.
h. Delayed Adjustment. If at any time following the Closing
Date, the amount of an item listed in any section of
this Article 5 shall prove to be incorrect (whether as a
result in an error in calculation or a lack of complete
and accurate information as of the Closing), the party
in whose favor the error was made shall promptly pay to
the other party the sum necessary to correct such error
upon receipt of proof of such error, provided that such
proof is delivered to the party from whom payment is
requested
11
on or before one (1) year after Closing. The provisions
of this Section 5.8 shall survive the Closing and not be
merged therein.
ARTICLE 6. - CLOSING
Buyer and Seller hereby agree that the Transaction shall be consummated as
follows:
a. Closing Date. Subject to Seller's right to extend the
Closing as provided in this Agreement, the Transaction
shall close ("Closing") on March 16, 1998 (the "Closing
Date"). Closing shall be by a so-called "New York style"
closing. The Closing shall take place at 10:00 a.m.
Eastern Time in the offices of Seller's or Buyer's
attorneys in New York City, and Buyer and Seller shall
conduct a "pre-closing" on the last business day prior
to the Closing Date with title transfer and payment of
the Purchase Price to be completed on the Closing Date
as set forth in Section 6.2. Time is of the essence with
respect to the Closing Date.
b. Title Transfer and Payment of Purchase Price. Provided
all conditions precedent to Seller's obligations
hereunder have been satisfied, Seller agrees to convey
title to the Real Property to Buyer by a deed from
Seller, upon confirmation of receipt of the Purchase
Price by the Escrow Agent as set forth below. Provided
all conditions precedent to Buyer's obligations
hereunder have been satisfied, Buyer agrees to deliver
the payment specified in Section 2.2 by timely
delivering the same to the Escrow Agent no later than
1:00 p.m. Eastern Time on the Closing Date.
c. Seller's Closing Deliveries. At the Closing, Seller
shall deliver or cause to be delivered to the Escrow
Agent the following:
(1) Deed. A deed in the form of Exhibit E attached
hereto and incorporated herein by this reference,
conveying to Buyer all of Seller's right, title
and interest in and to the Real Property owned by
Seller, subject only to the applicable Permitted
Exceptions (the "Seller Deed"), and a deed in the
form of Exhibit E hereto from The Prudential
Insurance Company of America ("Prudential"),
conveying to Buyer all of Prudential's right,
title and interest in and to the Real Property
owned by Prudential, subject only to the
applicable Permitted Exceptions (the "Prudential
Deed", and collectively, together with the Seller
Deed, the "Deed"). By its signature below
Prudential agrees,
12
subject to all of the terms and conditions set
forth in this Agreement, to execute and deliver
the Prudential Deed to Buyer at Closing.
(2) Xxxx of Sale. A xxxx of sale from Seller, in the
form of Exhibit F attached hereto and incorporated
herein by this reference conveying all of Seller's
right, title and interest in and to the Personal
Property.
(3) Assignment of Tenant Leases. An assignment and
assumption of tenant leases from Seller, in the
form of Exhibit G attached hereto and incorporated
herein by this reference ("Assignment of Leases")
transferring all of Seller's interest in the
tenant space leases encumbering the Property on
the Closing Date and any amendments, guarantees
and other material documents relating thereto
(herein collectively called the "Leases"),
together with all assignable non-cash security
deposits deposited by the tenants thereunder and
not applied by Seller in accordance with the terms
of the Leases.
(4) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. An assignment
and assumption of equipment leases, commission
agreements, service contracts, warranties and
guaranties and the Other Property Rights (to the
extent the same are not transferred by the Deed,
Xxxx of Sale or Assignment of Leases) from Seller,
in the form of Exhibit H attached hereto and
incorporated herein by this reference ("Assignment
of Contracts"), transferring, to the extent
assignable, without liability or expense to
Seller, all of Seller's interest in the equipment
leases and any lease commission agreements in
effect at the Property on the Closing Date, all
uncanceled service contracts encumbering the
Property on the Closing Date, all warranties and
guaranties which remain in effect on the Closing
Date and any Other Property Rights not otherwise
transferred to Buyer, excluding all Rejected
Contracts which are terminated effective on or
before the Closing Date (all of the foregoing
being herein collectively called the "Contracts").
Seller shall not assign any existing management
agreement or any contracts or policies of
insurance for the Property.
(5) Estoppel Letters. In sufficient time for Buyer's
review prior to Closing, executed estoppel letters
from tenants
13
collectively occupying no less than seventy
percent (70%) of the area leased under the Leases,
including from each tenant which occupies 50,000
square feet or more of space in the Developed
Property (such 50,000 square foot or more tenants,
the "Major Tenants"). All of such estoppel letters
shall be dated no earlier than January 1, 1998 and
shall be substantially in the form which such
tenant is required to provide pursuant to the
terms of such tenant's Lease or, if no form is
specified in any of the Leases, substantially in
the form of Exhibit I-1 attached hereto and
incorporated herein by this reference.
Notwithstanding the foregoing, if any Major
Tenants fail to deliver estoppel letters which
contain all of the certifications set forth on
Exhibit C attached hereto and made a part hereof
(the "Required Certifications"), and Seller elects
to deliver a landlord estoppel letter as provided
below with respect to such a Major Tenant, then,
even if such missing certifications are not
required under the terms of such Major Tenants's
Lease, the landlord estoppel letter for that Major
Tenant shall include all of the certifications set
forth on Exhibit C hereto which such Major Tenant
failed to include in its tenant estoppel
certificate. Buyer shall have the right to reject
a tenant estoppel letter if the tenant certifies
that there is a material default under the lease
or raises a material matter which is inconsistent
with its Lease or the applicable information set
forth on Exhibit M attached hereto.
Notwithstanding anything to the contrary set forth
herein, in no event shall a tenant estoppel letter
be rejected, or necessitate a landlord estoppel
letter, on the basis of (i) the tenant inserting a
"best knowledge" limitation therein, or (ii) the
tenant complaining about, asserting a default on
account of, or in any way raising, matters
relating to the Lintel Issue. In the event Seller
cannot for any reason obtain a tenant estoppel
letter which satisfies the foregoing requirements
from a tenant from whom an estoppel letter is
required, Seller, at its option, may deliver to
Buyer a landlord estoppel letter from Seller, in
the form of Exhibit I-2 attached hereto and
incorporated herein by this reference, and, if
applicable with respect to a Major Tenant,
including such of the Required Certifications as
may be required pursuant to the foregoing
provisions of this Section 6.3(e). The liability
of Seller under each landlord estoppel letter
shall expire and be of no further force or effect
on the one hundred eightieth (180th) day
14
following the Closing Date; provided, however,
that if Seller shall obtain an estoppel letter,
which satisfies the foregoing requirements, from
any such tenant after delivery of such landlord
estoppel letter with respect to such tenant, such
landlord estoppel letter shall, as of the date of
such tenant's estoppel letter, be without further
force or effect.
(6) Notice to Tenants. A single form letter from
Seller, in the form of Exhibit J attached hereto
and incorporated herein by this reference to each
tenant under the Leases, duplicate copies of which
would be sent (i) notifying it of the sale of the
Property to Buyer, (ii) advising it that all
future payments of rent and other payments due
under the Leases are to be made to Buyer at an
address designated by Buyer, and (iii) instructing
it to obtain new certificates of insurance naming
Buyer as landlord.
(7) Non-Foreign Status Affidavit. A non-foreign status
affidavit in the form of Exhibit K attached hereto
and incorporated herein by this reference, as
required by Section 1445 of the Internal Revenue
Code, from Seller.
(8) Evidence of Authority. A certificate of an
Assistant Secretary of Prudential, and a
certificate of an authorized officer of Equity
Parsippany Venture ("EPV"), which are the sole
partners in Seller, with respect to the authority
to act on behalf of such entity of the individual
executing on behalf of such entity all documents
to be executed by it pursuant to this Agreement,
and any other evidence of authority, or
partnership or corporate consents required by the
Title Company.
(9) Seller's Certificates. The certificate of Seller
certifying to the truth and accuracy in all
material respects as of the Closing Date of the
matters set forth in Section 8.2.
(10) Property Documents. (i) To the extent in the
possession of Seller or the current manager of the
Property, (A) the original (or, if unavailable, a
copy) of the existing certificate or certificates
of occupancy for the Property, and (B) all
original (or, if unavailable, copies of)
certificates, licenses, permits, authorizations
and approvals issued for or with respect to the
Property by governmental and quasi-governmental
authorities having
15
jurisdiction; and (ii) all non-proprietary books
and records located at the Property or at the
office of Seller's building manager relating to
the Property and the ownership and operation
thereof (the items described in clauses (i) and
(ii) being herein collectively called the
"Property Documents"); it being expressly agreed
that Seller shall have the right to retain copies
of the Property Documents.
(11) Other Documents. Such other documents as may be
reasonably required by the Title Company
(including a seller's affidavit of title in the
form previously agreed upon between Seller and
First American Title Insurance Company) or as may
be agreed upon by Seller and Buyer to consummate
the Transaction, which shall be sufficient to
remove (i) Schedule B-Section I Requirements (b),
(d), (g), (h), and (i), and (ii) Schedule
(B)-Section II, Exceptions (1), (2), (3), (4) and
(6).
(12) Letters of Credit as Tenant Security Deposits.
With respect to any security deposits which are
letters of credit, Seller shall (i) deliver to
Buyer at the Closing such letters of credit, (ii)
execute and deliver such other instruments as the
issuers of such letters of credit shall reasonably
require, and (iii) cooperate with Buyer to change
the named beneficiary under such letters of credit
to Buyer so long as Seller does not incur any
additional liability or expense in connection
therewith.
(13) Keys and Original Documents. Keys to all locks on
the Real Property (in Seller's or Seller's
building manager's possession) and originals or,
if originals are not available, copies, of the
Leases and Contracts (unless canceled as set forth
herein) encumbering the Property on the Closing
Date.
(14) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
(15) Assignment of Casualty and/or Condemnation Awards.
If applicable pursuant to Article 11 or Article 12
below, assignments to Buyer of condemnation awards
or casualty insurance proceeds.
(16) Closing Statement. The Closing Statement.
16
d. Buyer Closing Deliveries. At the Closing, Buyer shall
deliver or cause to be delivered to Seller the
following:
(1) Balance. The Balance, as adjusted for
apportionments and other adjustments required
under this Agreement, plus any other amounts
required to be paid by Buyer at Closing.
(2) Assignment of Leases. The Assignment of Leases
executed and acknowledged by Buyer.
(3) Assignment of Equipment Leases, Commission
Agreements and Service Contracts. The Assignment
of Contracts executed and acknowledged by Buyer.
(4) Buyer's Certificates. The certificate of Buyer
required under Article 4 hereof and a certificate
of Buyer certifying as to the truth and accuracy
in all material respects as of the Closing Date of
the matters set forth in Section 8.1.
(5) Evidence of Authority. Documentation to establish
to Seller's reasonable satisfaction the due
authorization of Buyer's acquisition of the
Property and Buyer's delivery of the documents
required to be delivered by Buyer pursuant to this
Agreement (including, but not limited to, the
organizational documents of Buyer, as they may
have been amended from time to time, resolutions
of Buyer and incumbency certificates of Buyer).
(6) Other Documents. Such other documents as may be
reasonably required by the Title Company or may be
agreed upon by Seller and Buyer to consummate the
Transaction.
(7) Transfer Taxes. If applicable, duly completed and
signed real estate transfer tax returns.
(8) Closing Statement. The Closing Statement.
e. Delivery of Deed. Effective upon delivery of the Deed,
actual and exclusive possession (subject only to the
Permitted Exceptions) and risk of loss to the Property
shall pass from Seller to Buyer.
17
ARTICLE 7. - CONDITIONS TO CLOSING
a. Seller's Obligations. Seller's obligation to close the
Transaction is conditioned on all of the following, any
or all of which may be waived by Seller by an express
written waiver, at its sole option:
(1) Corporate Approval. The unconditional approval of
the Transaction by (i) the Executive Committee of
Seller, (ii) both Prudential's corporate officers
and its Law Department and, if necessary, by the
Finance Committee of Prudential's Board of
Directors, each in their sole discretion (it being
acknowledged by Buyer that if the appropriate
corporate officers do not so approve the
Transaction, then no review will be made by the
Finance Committee, and (iii) EPV's partners and
legal counsel;
(2) Representations True. All representations and
warranties made by Buyer in this Agreement shall
be true and correct in all material respects on
and as of the Closing Date, as if made on and as
of such date except to the extent they expressly
relate to an earlier date;
(3) Buyer's Deliveries Complete. Buyer shall have
delivered the funds required hereunder and all of
the documents to be executed by Buyer set forth in
Section 6.4 and shall have performed all other
covenants, undertakings and obligations, and
complied with all conditions required by this
Agreement, to be performed or complied with by
Buyer at or prior to the Closing; and
(4) Resolution of Clean Water Act Issues. Buyer and
Seller shall have entered into a mutually
satisfactory written agreement in which they
resolve all issues between them relating to Permit
#14741, authorized under Section 404 of the Clean
Water Act, and its impact upon development of the
Vacant Property.
(5) Resolution of GAB Indemnification Issues. On or
before the expiration of the Due Diligence Period,
Buyer and Seller shall have entered into a
mutually satisfactory written agreement in which
they set forth the terms and conditions of
Seller's indemnity of Buyer for matters arising
from GAB Robins North America, Inc. v. PruBeta-3
et al., Docket No. MRS-L-187-98, and the partners
in Seller shall have agreed upon a mutually
18
satisfactory allocation of their respective
responsibilities therefor.
b. Buyer's Obligations. Buyer's obligation to close the
Transaction is conditioned on all of the following, any
or all of which may be expressly waived by Buyer in
writing, at its sole option:
(1) Representations True. Subject to the provisions of
Section 8.3, all representations and warranties
made by Seller in this Agreement, as the same may
be amended as provided in Section 8.3, shall be
true and correct in all material respects on and
as of the Closing Date, as if made on and as of
such date except to the extent that they expressly
relate to an earlier date;
(2) Title Conditions Satisfied. At the time of the
Closing, title to the Property shall be as
provided in Article 3 of this Agreement;
(3) Seller's Deliveries Complete. Seller shall have
obtained the approvals described in Section
7.1(a), shall have delivered all of the documents
and other items required pursuant to Section 6.3,
and shall have performed all other covenants,
undertakings and obligations, and complied with
all conditions required by this Agreement, to be
performed or complied with by Seller at or prior
to the Closing; and
(4) Resolution of Clean Water Act Issues. Buyer and
Seller shall have entered into a mutually
satisfactory written agreement in which they
resolve all issues between them relating to Permit
#14741, authorized under Section 404 of the Clean
Water Act, and its impact upon development of the
Vacant Property.
(5) Resolution of GAB Indemnification Issues. On or
before the expiration of the Due Diligence Period,
Buyer and Seller shall have entered into a
mutually satisfactory written agreement in which
they set forth the terms and conditions of
Seller's indemnity of Buyer for matters arising
from GAB Robins North America, Inc. v. PruBeta-3
et al., Docket No. MRS-L-187-98, and the partners
in Seller shall have agreed upon a mutually
satisfactory allocation of their respective
responsibilities therefor.
19
c. Waiver of Failure of Conditions Precedent. At any time
or times on or before the date specified for the
satisfaction of any condition, Buyer or Seller may elect
in writing to waive the benefit of any such condition
set forth in Section 7.1 or Section 7.2, respectively.
By closing the Transaction, Seller and Buyer shall be
conclusively deemed to have waived the benefit of any
remaining unfulfilled conditions set forth in Section
7.1 and Section 7.2, respectively. In the event any of
the conditions set forth in Sections 7.1 or 7.2 are
neither waived nor fulfilled, Buyer or Seller (as
appropriate) may terminate their obligations to perform
at the Closing and otherwise under this Agreement in
accordance with the provisions of Article 10.
ARTICLE 8. - REPRESENTATIONS AND WARRANTIES
a. Buyer's Representations. Buyer represents and warrants
to, and covenants with, Seller as follows:
i. Buyer's Authorization. Buyer is duly organized, validly
existing and in good standing under the laws of its
State of organization and the State of New Jersey, and
is authorized to consummate the Transaction and fulfill
all of its obligations hereunder and under all documents
contemplated hereunder to be executed by Buyer, and has
all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Buyer, and to perform all of its obligations
hereunder and thereunder. This Agreement and all
documents contemplated hereunder to be executed by
Buyer, have been duly authorized by all requisite
partnership or corporate action on the part of Buyer and
are the valid and legally binding obligation of Buyer,
enforceable in accordance with their respective terms.
Neither the execution and delivery of this Agreement and
all documents contemplated hereunder to be executed by
Buyer, nor the performance of the obligations of Buyer
hereunder or thereunder will result in the violation of
any law or any provision of the articles of
incorporation and by-laws of Buyer or will conflict with
any order or decree of any court or governmental
instrumentality of any nature by which Buyer is bound.
b. Seller's Representations. Seller represents and warrants
to Buyer as follows:
20
i. Seller's Authorization. The sole constituent partners of
Seller are Prudential and EPV. Seller (a) is duly
organized (or formed) and validly existing under the
laws of the State of New Jersey, (b) subject to
obtaining the approvals described in Subsection 7.1(a),
is authorized to consummate the Transaction and fulfill
all of its obligations hereunder and under all documents
contemplated hereunder to be executed by Seller, and (c)
has all necessary power to execute and deliver this
Agreement and all documents contemplated hereunder to be
executed by Seller and to perform its obligations
hereunder and thereunder. Subject to obtaining the
approvals described in Subsection 7.1(a), this Agreement
and all documents contemplated hereunder to be executed
by Seller have been duly authorized by all requisite
corporate action on the part of Seller and are the valid
and legally binding obligation of Seller enforceable in
accordance with their respective terms. Neither the
execution and delivery of this Agreement and all
documents contemplated hereunder to be executed by
Seller nor the performance of the obligations of Seller
hereunder or thereunder will result in the violation of
any law or any provision of the governing agreements of
Seller or will conflict with any order or decree of any
court or governmental instrumentality of any nature by
which Seller is bound.
ii. Seller's Representations Regarding the Property. To
Seller's knowledge (as such term is hereinafter
defined):
(1) Except as listed in Exhibit L attached hereto and
incorporated herein by this reference, Seller has
not received any written notice of pending
litigation, actions, suits, labor disputes, or
other legal proceedings against Seller or the
Property which would, if determined adversely to
Seller, adversely affect the Property.
(2) Seller has not entered into any service, supply,
maintenance, labor or utility contracts affecting
the Property which will be binding upon Buyer
after the Closing other than the Contracts listed
in Exhibit B attached hereto.
(3) Seller has not received any written notice of
default under the terms of any of the Contracts
except as listed in Exhibit L attached hereto.
(4) As of the date of this Agreement, the only tenants
of the
21
Property are the tenants listed in Exhibit M
attached hereto and incorporated herein by this
reference. Exhibit M correctly sets forth a
description of all of the Leases. The Property
Documents made available to Buyer include true and
correct copies of all the Leases.
(5) Except as listed in Exhibit L attached hereto,
Seller has not received any written notice from
any governmental authority of any pending or
threatened annexation or condemnation proceedings,
or any violation of any zoning, building, fire, or
health code, statute, ordinance, rule or
regulation applicable to the Property.
iii. No Other Agreements. Seller has not entered into any
currently effective agreement to sell or dispose of all
of its interest in and to the Property (except for this
Agreement).
c. General Provisions.
i. Definition of "Seller's Knowledge". All references in
this Agreement to "Seller's knowledge" or words of
similar import shall refer only to the actual knowledge
of Xxxx Xxxxxxxxx of Prudential, Xxxxx Xxx of Prudential
and Xxxxxxx Xxxxxxxxxxx of EPV's partner, U S West Real
Estate, Inc. (collectively, the "Designated Employees")
and shall not be construed to refer to the knowledge of
any other officer, agent or employee of Seller, its
partners or any affiliate thereof or to impose or have
imposed upon the Designated Employees any duty to
investigate the matters to which such knowledge, or the
absence thereof, pertains, including, but not limited
to, the contents of the files, documents and materials
made available to or disclosed to Buyer or the contents
of files maintained by the Designated Employees. There
shall be no personal liability on the part of the
Designated Employees arising out of any representations
or warranties made herein.
ii. Seller's Representations Deemed Modified. To the extent
that Buyer knows or is deemed to know prior to the
expiration of the Due Diligence Period that Seller's
representations and warranties are inaccurate, untrue or
incorrect in any way, such representations and
warranties shall be deemed modified to reflect Buyer's
knowledge or deemed knowledge, as the case may be. For
purposes of this Agreement, Buyer shall be "deemed to
know" that a representation or warranty was untrue,
inaccurate or
22
incorrect to the extent that this Agreement, the
Documents, any estoppel certificate executed by any
tenant of the Property and delivered to Buyer, or any
studies, tests, reports, or analyses prepared by or for
Buyer or Xxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxx, or
any of its attorneys (all of the foregoing being herein
collectively called the "Buyer's Representatives") or
otherwise obtained by Buyer or Buyer's Representatives
contains information which is inconsistent with such
representation or warranty.
iii. Notice of Breach; Seller's Right to Cure. If prior to
the Closing, Buyer or any Buyer's Representative obtains
actual knowledge that any of the representations or
warranties made herein by Seller are untrue, inaccurate
or incorrect in any material respect, Buyer shall give
Seller written notice thereof within five (5) business
days of obtaining such knowledge (but, in any event,
prior to the Closing). If at or prior to the Closing,
Seller obtains knowledge that any of the representations
or warranties made herein by Seller are untrue,
inaccurate or incorrect in any material respect, Seller
shall give Buyer written notice thereof within five (5)
business days of obtaining such knowledge (but, in any
event, prior to the Closing). In either such event,
Seller shall have the right to cure, and if the cost to
cure is greater than One Hundred Thousand Dollars
($100,000) but less than Two Hundred Fifty Thousand
Dollars ($250,000) Seller shall have the obligation to
attempt to cure, such misrepresentation or breach and
shall be entitled to a reasonable adjournment of the
Closing (not to exceed ninety (90) days) for the purpose
of such cure. If Seller is unable to so cure any
misrepresentation or breach, then Buyer, as its sole
remedy for any and all such materially untrue,
inaccurate or incorrect material representations or
warranties, shall elect either (a) to waive such
misrepresentations or breaches of warranties and
consummate the Transaction without any reduction of or
credit against the Purchase Price, or (b) to terminate
this Agreement by written notice given to Seller on the
Closing Date, in which event this Agreement shall be
terminated, the Deposit shall be returned to Buyer and,
thereafter, neither party shall have any further rights
or obligations hereunder except as provided in any
section hereof that by its terms expressly provides that
it survives any termination of this Agreement. If any
such representation or warranty is untrue, inaccurate or
incorrect but is not untrue, inaccurate or incorrect in
any material respect, Buyer shall be deemed to waive
such misrepresentation or breach of warranty, and Buyer
shall be required to consummate the Transaction without
any reduction of or credit
23
against the Purchase Price. The untruth, inaccuracy or
incorrectness of a representation or warranty shall be
deemed material only if Buyer's aggregate damages
resulting from the untruth, inaccuracy or incorrectness
of any of the representations or warranties are
reasonably estimated by Buyer to exceed One Hundred
Thousand Dollars ($100,000).
iv. Survival; Limitation on Seller's Liability. The
representations and warranties made by Seller in Section
8.2 shall survive the Closing and not be merged therein
for a period of one (1) year and Seller shall only be
liable to Buyer hereunder for a breach of a
representation and warranty made herein or in any of the
documents executed by Seller at the Closing with respect
to which a claim is made by Buyer against Seller on or
before the one (1) year anniversary of the Closing Date.
Anything in this Agreement to the contrary
notwithstanding, the maximum aggregate liability of
Seller for Seller's breaches of representations and
warranties herein or in any documents executed by Seller
at Closing (including, but not limited to, any Seller
estoppel letters delivered pursuant to Section 6.3(e))
shall be limited as set forth in Section 14.16 hereof.
Notwithstanding the foregoing, however, if the Closing
occurs, Buyer hereby expressly waives, relinquishes and
releases any right or remedy available to it at law, in
equity or under this Agreement to make a claim against
Seller for damages that Buyer may incur, or to rescind
this Agreement and the Transaction, as the result of any
of Seller's representations or warranties being untrue,
inaccurate or incorrect if (a) Buyer knew or is deemed
to know that such representation or warranty was untrue,
inaccurate or incorrect at the time of the Closing, or
(b) Buyer's damages as a result of such representations
or warranties being untrue, inaccurate or incorrect are
reasonably estimated to aggregate less than One Hundred
Thousand Dollars ($100,000).
ARTICLE 9. - COVENANTS
a. Buyer's Covenants. Buyer hereby covenants as follows:
i. Confidentiality. Buyer acknowledges that any information
furnished to Buyer with respect to the Property is and
has been so furnished on the condition that Buyer
maintain the confidentiality thereof. Accordingly, Buyer
shall hold, and shall cause its directors, officers and
other personnel and the other Buyer's Representatives to
hold, in strict confidence, and not disclose to
24
any other person without the prior written consent of
Seller until the Closing shall have been consummated,
any of the information in respect of the Property
delivered to or for the benefit of Buyer whether by
agents, consultants, employees or representatives of
Buyer or by Seller or any of its agents, representatives
or employees, including, but not limited to, any
information obtained by Buyer or any of Buyer's
Representatives in connection with any studies,
inspections, testings or analyses conducted by Buyer as
part of its Due Diligence. In the event the Closing does
not occur and this Agreement is terminated, Buyer shall
promptly return to Seller all copies of documents
containing any of such information without retaining any
copy thereof or extract therefrom. Notwithstanding
anything to the contrary hereinabove set forth, Buyer
may disclose such information (i) on a need-to-know
basis to any institutional lenders providing financing
to it, (ii) on a need-to-know basis to its employees,
officers, directors and shareholders, and to members of
professional firms serving it, (iii) to comply with
applicable securities or other laws, and (iv) as any
governmental agency may require in order to comply with
applicable laws or regulations. The provisions of this
Subsection 9.1.1 shall survive the Closing (and not be
merged therein) or earlier termination of this
Agreement.
ii. Approvals not a Condition to Buyer's Performance. Buyer
acknowledges and agrees that subject to Buyer's right to
terminate this Agreement prior to the expiration of the
Due Diligence Period on and subject to the terms and
conditions set forth in this Agreement, its obligation
to perform under this Agreement is not contingent upon
Buyer's ability to obtain any (a) governmental or
quasi-governmental approval of changes or modifications
in use or zoning, or (b) modification of any existing
land use restriction, or (c) consents to assignments of
any service contracts, management agreements or other
agreements which Buyer requests, or (d) endorsements to
the Title Policy.
iii. Buyer's Indemnity; Delivery of Reports. Buyer hereby
agrees to indemnify, defend, and hold Seller, its
counsel, Broker (as defined below), Broker's sales
agents, and all partners, officers, directors,
employees, agents and attorneys of Seller, its counsel,
Broker, and Broker's sales agents, and any other party
related in any way to any of the foregoing (all of which
parties are herein collectively called the "Seller
Parties"), and the Property free and harmless from and
against any and all costs, loss, damages and expenses,
of any kind or nature whatsoever (including attorneys
25
fees and costs), to the extent arising out of or
resulting from the entry and/or the conduct of
activities upon the Property by Buyer, its agents,
contractors, subcontractors and/or other Buyer's
Representatives in connection with the inspections,
examinations, testings and investigations of the
Property conducted at any time prior to the Closing,
which indemnity shall survive the Closing (and not be
merged therein) or any earlier termination of this
Agreement. If the Closing fails to take place, Buyer
shall deliver promptly to Seller, without recourse,
representation or warranty, copies of all third party
reports commissioned by Buyer evidencing the results of
tests, studies or inspections of the Property, provided
that such documents shall be in Buyer's possession or
subject to its control, and provided further that Buyer
shall have the right to deliver such reports.
iv. Limit on Government Contacts. Notwithstanding any
provision in this Agreement to the contrary, except in
connection with the preparation of a so-called "Phase I"
environmental report with respect to the Property, Buyer
shall not contact any governmental official or
representative regarding Hazardous Materials (as defined
below) on or the environmental condition of the Property
without Seller's prior written consent thereto, which
consent shall not be unreasonably withheld. In addition,
if Seller's consent is obtained by Buyer, Seller shall
be entitled to receive at least five (5) days prior
written notice of the intended contact and to have a
representative present when Buyer has any such contact
with any governmental official or representative. For
purposes of this Agreement, the term "Hazardous
Material" shall mean any substance, chemical, waste or
material that is or becomes regulated by any federal,
state or local governmental authority because of its
toxicity, infectiousness, radioactivity, explosiveness,
ignitability, corrosiveness or reactivity, including,
without limitation, asbestos or any substance containing
more than 0.1 percent asbestos, the group of compounds
known as polychlorinated biphenyls, flammable
explosives, oil, petroleum or any refined petroleum
product.
v. Assumption of CBA Obligations. In the event that Seller
or Seller's managing agent employs any employees at the
Property who are subject to any collective bargaining
agreement (any such employees and collective bargaining
agreements being listed on Exhibit N attached hereto and
incorporated herein by this reference), Buyer shall, on
or before the Closing Date, become, or retain a managing
agent for the Property who is, a member of any required
union or other association and shall assume, or
26
cause such managing agent to assume, all of the
obligations of Seller or its managing agent in
accordance with such collective bargaining agreements
with respect to such employees or any replacements of
such employees.
vi. Use of the Name Prudential Business Campus. Buyer shall
have the nonexclusive, nontransferable right, license,
and privilege (but not any obligation) to use the name
"Prudential Business Campus" (the "Name") for the
Property for a period of twenty four (24) months
commencing on the Closing Date. Buyer shall not use the
Name directly or indirectly on or in connection with, or
in relation to, any property other than the Property,
and shall not otherwise use the name Prudential or any
variant thereof, the "Prudential Rock" logo or any
variant thereof, or any other trademark, logo, name,
likeness, term, phrase or design which is likely to be
confusingly similar to, or a colorable imitation of, a
trademark or other trademark owned by Seller or
Prudential in any manner whatsoever, including but not
limited to any use as part of a company name, property
name or trade name, as a service xxxx, in its
advertising or on Buyer's stationery, business cards or
the like, except as provided herein. No right or license
is granted hereby by implication or otherwise under any
xxxx, trademark, service xxxx or trade name of Seller or
Prudential except as specifically provided herein. No
right to assign, transfer or sublicense is granted or
permitted hereunder; any direct or indirect attempt to
assign, transfer or sublicense any of the rights granted
hereunder in any way shall render null and void Buyer's
right to use the Name.
b. Seller's Covenants. Seller hereby covenants as follows:
i. Service Contracts. Without Buyer's prior consent, which
consent during the Due Diligence Period, shall not be
unreasonably withheld, between the date hereof and the
Closing Date Seller shall not extend, renew, replace or
modify any Contract unless such contract (as so
extended, renewed, replaced or modified) can be
terminated by the owner of the Property without penalty
on not more than thirty (30) days' notice.
ii. Maintenance of Property. Except to the extent Seller is
relieved of such obligations by Article 12 hereof,
between the date hereof and the Closing Date Seller
shall maintain and keep the Property in a manner
consistent with Seller's past practices with respect to
the Property; provided, however, that Buyer hereby
agrees that it shall accept the Property subject to, and
Seller shall have no
27
obligation to cure, (i) all violations of law or
municipal ordinances, orders or requirements and (ii)
all physical conditions which would give rise to
violations existing (collectively, Violations"), which,
with respect to both clauses (i) and (ii), exist on the
last day of the Due Diligence Period. With respect to
Violations which arise after the Due Diligence Period
and prior to the Closing Date, and
(a) if in Seller's reasonable opinion the cost to cure
such Violation would be less than Two Hundred Fifty
Thousand Dollars ($250,000), Buyer shall be required to
close the Transaction on the Closing Date, and at
Seller's election Seller shall either (x) cure the
Violation prior to Closing, or (y) give Buyer a credit
at Closing in the amount of Seller's reasonable estimate
of the cost to cure the Violation, or
(b) if in Seller's reasonable opinion the cost to cure
such Violation would be Two Hundred Fifty Thousand
Dollars ($250,000) or more, at Seller's election Seller
shall either (x) cure the Violation not later than
ninety (90) days after the scheduled Closing Date,
whereupon Buyer shall be required to close the
Transaction within ten (10) days after Seller has
effected a cure of the Violation, or (y) terminate this
Agreement, in which event the Deposit shall be paid to
Buyer and, thereafter, the parties shall have no further
rights or obligations hereunder except for obligations
which expressly survive the termination of this
Agreement.
Between the date hereof and the Closing Date, Seller (a) will
advise Buyer of any written notice Seller receives after the
date hereof from any governmental authority relating to the
violation of any law or ordinance regulating the condition or
use of the Property, and (b) will promptly notify Buyer of any
material change affecting the Property of which Seller has
knowledge.
iii. Access to Property. Between the date hereof and the
Closing Date Seller shall allow Buyer or Buyer's
Representatives access to the Property upon reasonable
prior notice at reasonable times provided (a) such
access does not interfere with the operation of the
Property or the rights of tenants; (b) unless
accompanied by a representative of Seller, Buyer shall
not contact any tenant without Seller's prior written
consent; (c) Seller or its designated representative
shall have the right to pre-approve and be present
during any physical testing of the Property; and (d)
Buyer shall return the Property to the condition
existing prior to such tests
28
and inspections. Prior to such time as Buyer or any of
Buyer's Representatives enter the Property, Buyer shall
obtain policies of general liability insurance which
name Seller as an additional insured and which are with
such insurance companies, provide such coverages and
carry such limits as Seller shall reasonably require.
Promptly after Seller's request therefor, Buyer shall
provide Seller with certificates of insurance evidencing
that Buyer has obtained the aforementioned policies of
insurance.
iv. Information and Audit Cooperation. At Buyer's written
request, at any time within ninety (90) days after the
Closing, Seller agrees to provide or cause its property
manager to provide, to Buyer's designated independent
auditor, access to the books and records of the Property
and all related information regarding the three-year
period for which Buyer is required to have the Property
audited under the regulations of the Securities and
Exchange Commission, and a letter regarding the books
and records of the Property in substantially the same
form as Exhibit O attached hereto and made a part
hereof, or such other form as Seller may submit subject
to the approval of Buyer's independent auditor, which
approval shall not be unreasonably withheld, in
connection with the normal course of auditing the
Property in accordance with generally accepted auditing
standards. At Seller's election, the letter may be
signed by Seller or on behalf of Seller by its property
manager of the Property. Buyer agrees to indemnify and
hold harmless Seller, its property manager, and the
person signing such letter from any claim, damage, loss
or liability to which Seller, the property manager or
such person is at any time subjected by a person who is
not a party to this Agreement as a result of its
compliance with this paragraph, unless due to the
intentional misrepresentation or fraud of such person.
The obligations of Buyer and Seller under this Section
9.2.4 shall survive the Closing and not be merged
therein.
c. Mutual Covenants.
i. Publicity. Seller and Buyer each hereby covenant that
(a) prior to the Closing neither Seller nor Buyer shall
issue any press release or public statement (a
"Release") with respect to the Transaction without the
prior consent of the other, except to the extent
required by law (including any securities laws), and (b)
after the Closing, any Release issued by either Seller
or Buyer shall be subject to the review and approval of
both parties (which approval shall not be unreasonably
withheld). If either Seller or
29
Buyer is required by law to issue a Release, such party
shall, at least two (2) business days prior to the
issuance of the same, deliver a copy of the proposed
Release to the other party for its review.
ii. Broker. Seller and Buyer expressly acknowledge that
Eastdil Realty Company, L.L.C. ("Broker") has acted as
the exclusive broker with respect to the Transaction and
with respect to this Agreement, and that Seller shall
pay any brokerage commission due to Broker in accordance
with the separate agreement between Seller and Broker.
Seller and Buyer each represents and warrants to the
other that it has not dealt with any other broker,
finder or similar person or entity in connection with
the Transaction and each agrees to hold harmless the
other and indemnify the other from and against any and
all damages, costs or expenses (including, but not
limited to, reasonable attorneys' fees and
disbursements) suffered by the indemnified party as a
result of acts of the indemnifying party that would
constitute a breach of its representation and warranty
in this section.
iii. Tax Contests; Tax Refunds and Credits. Seller shall have
the right to continue and control the progress of and to
make all decisions with respect to any contest of the
real estate taxes for the Property due and payable for
the calendar year in which the Closing occurs and all
prior calendar years. Buyer shall have the right to
control the progress of and to make all decisions with
respect to any contest of the real estate taxes for the
Property due and payable for any calendar year
subsequent to the calendar year in which the Closing
occurs. All real estate and personal property tax
refunds and credits received after Closing with respect
to the Property shall be applied in the following order
of priority: first, to pay the costs and expenses
(including reasonable attorneys' fees and expenses)
incurred in connection with obtaining such tax refund or
credit; second, to pay any amounts due to any tenant of
the Property as a result of such tax refund or credit to
the extent required pursuant to the terms of the Leases;
and third, to be apportioned between Buyer and Seller as
follows:
(1) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable in the fiscal year in which
the Closing occurs (regardless of the year for
which such taxes are assessed), such refunds and
credits shall be apportioned between Buyer and
Seller in proportion to the number of days in such
fiscal year that
30
each party owned the Property (with title to the
Property being deemed to have passed as of 12:01
a.m. on the Closing Date);
(2) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable during any period prior to
the fiscal year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Seller shall be entitled to the entire
refunds and credits; and
(3) with respect to any refunds or credits
attributable to real estate and personal property
taxes due and payable during any period after the
fiscal year in which the Closing occurs
(regardless of the year for which such taxes are
assessed), Buyer shall be entitled to the entire
refunds and credits.
iv. Survival. The provisions of this Section 9.3 shall
survive the Closing (and not be merged therein) or
earlier termination of this Agreement.
ARTICLE 10. - FAILURE OF CONDITIONS
a. To Seller's Obligations. If, on or before the Closing
Date, (i) Buyer is in default of any of its obligations
hereunder, or (ii) any of Buyer's representations or
warranties are untrue in any material respect, or (iii)
the Closing otherwise fails to occur by reason of
Buyer's failure or refusal to perform its obligations
hereunder in a prompt and timely manner, then Seller may
elect to (a) terminate this Agreement by written notice
to Buyer, and Seller hereby expressly waives all other
rights and remedies at law, in equity or otherwise
including, without limitation, damages or specific
performance; or (b) waive the condition and proceed to
close the Transaction. If this Agreement is so
terminated, then Seller shall be entitled to the Deposit
as liquidated damages, and thereafter neither party to
this Agreement shall have any further rights or
obligations hereunder other than any arising under any
section herein which expressly provides that it survives
the termination of this Agreement.
b. To Buyer's Obligations. If, at the Closing, (i) Seller
is in default of any of its obligations hereunder, or
(ii) any of Seller's representations or warranties are
untrue in any material respect,
31
or (iii) the Closing otherwise fails to occur by reason
of Seller's failure or refusal to perform its
obligations hereunder in a prompt and timely manner,
Buyer shall have the right, to elect, as its sole and
exclusive remedy, to (a) terminate this Agreement by
written notice to Seller, promptly after which the
Deposit shall be returned to Buyer, or (b) waive the
condition and proceed to close the Transaction, or (c)
seek specific performance of this Agreement by Seller.
ARTICLE 11. - CONDEMNATION
a. Condemnation.
i. Right to Terminate. If, prior to the Closing Date, all
or any significant portion (as hereinafter defined) of
the Property is taken by eminent domain (or is the
subject of a pending taking which has not yet been
consummated), Seller shall notify Buyer in writing of
such fact promptly after obtaining knowledge thereof,
and Buyer shall have the right to terminate this
Agreement by giving written notice to Seller no later
than ten (10) days after the giving of Seller's notice,
and the Closing Date shall be extended, if necessary, to
provide sufficient time for Buyer to make such election.
The failure by Buyer to so elect in writing to terminate
this Agreement within such ten (10) day period shall be
deemed an election not to terminate this Agreement. For
purposes hereof, a "significant portion" of the Property
shall mean such a portion as shall have a value, as
reasonably determined by Seller, and approved by Buyer,
which approval shall not be unreasonably withheld, in
excess of One Million Dollars ($1,000,000). If Buyer
elects to terminate this Agreement as aforesaid, the
provisions of Section 12.3 shall apply.
ii. Assignment of Proceeds. If (a) Buyer does not elect to
terminate this Agreement as aforesaid if all or any
significant portion of the Property is taken, or if (b)
a portion of the Property not constituting a significant
portion of the Property is taken or becomes subject to a
pending taking, by eminent domain, there shall be no
abatement of the Purchase Price; provided, however,
that, at the Closing, Seller shall pay to Buyer the
amount of any award for or other proceeds on account of
such taking which have been actually paid to Seller
prior to the Closing Date as a result of such taking
(less all reasonable, out-of-pocket costs and expenses,
including attorneys' fees and costs, incurred by Seller
32
as of the Closing Date in obtaining payment of such
award or proceeds) and, to the extent such award or
proceeds have not been paid, Seller shall assign to
Buyer at the Closing (without recourse to Seller) the
rights of Seller to, and Buyer shall be entitled to
receive and retain, all awards for the taking of the
Property or such portion thereof.
ARTICLE 12. - DESTRUCTION OR DAMAGE
a. Destruction or Damage. In the event any of the Property
is damaged or destroyed prior to the Closing Date,
Seller shall notify Buyer in writing of such fact
promptly after obtaining knowledge thereof. If any such
damage or destruction (a) is an insured casualty and (b)
would cost less than One Million Dollars ($1,000,000) to
repair or restore, then this Agreement shall remain in
full force and effect and Buyer shall acquire the
Property upon the terms and conditions set forth herein.
In such event, Buyer shall receive a credit against the
Purchase Price equal to the deductible amount applicable
under Seller's casualty policy (less all reasonable,
out-of-pocket costs and expenses, including attorneys'
fees and costs, incurred by Seller as of the Closing
Date in connection with the negotiation and/or
settlement of the casualty claim with the insurer (the
"Realization Costs")), and Seller shall assign to Buyer
all of Seller's right, title and interest in and to all
proceeds of insurance on account of such damage or
destruction. In the event the Property is damaged or
destroyed prior to the Closing Date and the cost of
repair would equal or exceed One Million Dollars
($1,000,000), or the casualty is an uninsured casualty,
then, notwithstanding anything to the contrary set forth
above in this section, Buyer shall have the right, at
its election, to terminate this Agreement. Buyer shall
have thirty (30) days after Seller notifies Buyer that a
casualty has occurred to make such election by delivery
to Seller of a written election notice (the "Election
Notice") and the Closing Date shall be extended, if
necessary, to provide sufficient time for Buyer to make
such election. The failure by Buyer to deliver the
Election Notice within such thirty (30) day period shall
be deemed an election not to terminate this Agreement.
In the event Buyer does not elect to terminate this
Agreement as set forth above, this Agreement shall
remain in full force and effect, Seller shall assign to
Buyer all of Seller's right, title and interest in and
to any and all proceeds of insurance on account of such
damage or destruction, if any, and, if the casualty was
an insured casualty, Buyer shall receive a credit
against the Purchase Price equal to
33
the deductible amount (less the Realization Costs) under
Seller's casualty insurance policy.
b. Insurance. Seller shall maintain the property insurance
coverage currently in effect for the Property through
the Closing Date.
c. Effect of Termination. If this Agreement is terminated
pursuant to Section 11.1 or Section 12.1, Seller
promptly shall direct that the Deposit be refunded to
Buyer. Upon such refund, this Agreement shall terminate
and neither party to this Agreement shall have any
further rights or obligations hereunder other than any
arising under any section herein which expressly
provides that it shall survive the termination of this
Agreement.
d. Waiver. The provisions of Article 11 and this Article 12
supersede the provisions of any applicable statutory or
decisional law with respect to the subject matter of
this Article 11.
ARTICLE 13. - LEASING MATTERS
a. New Leases. After the date hereof, Seller shall not,
without Buyer's prior written consent in each instance,
which consent shall be at Buyer's absolute discretion
after the expiration of the Due Diligence Period, but
which consent shall not be unreasonably withheld during
the Due Diligence Period, and in all events shall be
given or denied with the reasons for such denial
specified in reasonable detail, within five (5) business
days after receipt by Buyer of the information referred
to in the next sentence, enter into a new lease for
space in the Property or renew or extend any Lease;
except that during the Due Diligence Period Seller may
renew, extend or expand existing Leases pursuant to the
exercise by a tenant of a renewal, extension or
expansion option contained in such tenant's Lease.
Seller shall furnish Buyer with all information
regarding any proposed new leases, renewals and
extensions which are subject to Buyer's approval,
reasonably necessary to enable Buyer to make informed
decisions with respect to the advisability of the
proposed action. If Buyer fails to object in writing to
any such proposed new lease, renewal or extension, as
the case may be, within five (5) business days after
receipt of the aforementioned information, Buyer shall
be deemed to have approved the proposed new lease,
renewal or extension, as the case may be. Seller shall
deliver to Buyer a true and complete copy of each such
new lease, renewal and extension
34
agreement, if any, promptly after the execution and
delivery thereof.
b. Lease Expenses. At Closing, Buyer shall reimburse Seller
for any and all fees paid by Seller prior to Closing or
costs and expenses incurred by Seller prior to Closing
(such fees, costs and expenses being herein collectively
called the "Lease Expenses"), arising out of or in
connection with:
(1) any extensions, renewals or expansions under the
Leases exercisable and exercised by any tenant
between the date hereof and the Closing Date; and
(2) provided the same has been approved by Buyer as
provided above, any lease for space at the
Property entered into between the date hereof and
the Closing Date, or any extension, renewal or
expansion of a Lease where such Lease does not
provide for its extension, renewal or expansion,
entered into on or after the date hereof (a "New
Lease").
Lease Expenses shall include, without limitation, (i) brokerage
commissions and fees to effect any such leasing transaction, (ii)
expenses incurred for repairs, improvements, equipment, painting,
decorating, partitioning and other items to satisfy the tenant's
requirements with regard to such leasing transaction, (iii) legal
fees for services in connection with the preparation of documents
and other services rendered in connection with the effectuation of
the leasing transaction, (iv) if there are any rent concessions
covering any period that the tenant has the right to be in
possession of the demised space, the rents that would have accrued
during the period of such concession prior to the Closing Date as if
such concession were amortized over (A) with respect to any
extension or renewal, the term of such extension or renewal, (B)
with respect to any expansion, that portion of the term remaining
under the subject Lease after the date of any expansion, or (C) with
respect to any New Lease, the entire initial term of any New Lease,
and (v) expenses incurred for the purpose of satisfying or
terminating the obligations of a tenant under a New Lease to the
landlord under another lease (whether or not such other lease covers
space in the Property). At the Closing, Buyer shall assume Seller's
obligations to pay, when due (whether on a stated due date or
accelerated) any Lease Expenses unpaid as of the Closing, and Buyer
hereby agrees to indemnify and hold Seller harmless from and against
any and all claims for such Lease Expenses which remain unpaid for
any reason at the time of Closing, which obligations of Buyer shall
survive the Closing and shall not be merged therein. Each party
shall make available to the other all records, bills, vouchers and
other data in such party's control verifying Lease Expenses and the
payment thereof.
35
c. Other Lease Activity. Except as provided in this Section
13.3, without the prior consent of Buyer, which, during
the Due Diligence Period, shall not be unreasonably
withheld (a) no Lease shall be modified or amended in
any material and adverse manner, (b) Seller shall not
consent to any assignment or sublease in connection with
any Lease or New Lease, and (c) Seller shall not remove
any tenant under any Lease or New Lease, whether by
summary proceedings or otherwise, except by reason of a
default of the tenant under the Lease or New Lease. In
furtherance of the foregoing, Seller shall deliver to
Buyer a written notice of each proposed action of the
type described in clauses (a) through (c) above which
require Buyer's consent and which Seller has been asked
or proposes to take, stating, if applicable, whether
Seller is willing to consent to such action and setting
forth the relevant information therefor. Buyer shall
notify Seller in writing whether or not it approves such
action within five (5) business days after delivery to
Buyer of Seller's notice containing the aforementioned
information. If Buyer notifies Seller that it
disapproves such action, Buyer's notice shall state with
specificity the reasons for such disapproval. If Buyer
shall not give written notice of its disapproval of such
action within such five (5) business day period, Buyer
shall be deemed to have approved such action. If any
Lease requires that the landlord's consent be given
under the applicable circumstances (or not be
unreasonably withheld), then Buyer shall be deemed ipso
facto to have approved such action. Subject to its
reimbursement rights pursuant to Section 13.2, Seller
shall perform all of the obligations of the landlord
under the Leases and New Leases which under the terms of
such Leases and New Leases are required to be performed
by the landlord prior to the Closing Date.
d. Lease Enforcement. Subject to the provisions of Section
13.3 above, prior to the Closing Date, Seller shall have
the right, but not the obligation (except to the extent
that Seller's failure to act shall constitute a waiver
of such rights or remedies), to enforce the rights and
remedies of the landlord under any Lease or New Lease,
by summary proceedings or otherwise, and to apply all or
any portion of any security deposits then held by Seller
toward any loss or damage incurred by Seller by reason
of any defaults by tenants.
e. Leasing Commissions on Existing Leases. Seller shall be
responsible for the payment of all brokerage commissions
and
36
fees incurred in effecting all Leases (other than New
Leases), and with respect to any extensions, expansions
or renewals thereof which have been exercised by the
tenants prior to the date hereof. Buyer shall be
responsible for all other brokerage commissions and fees
which may become payable with respect to such Leases.
ARTICLE 14. - MISCELLANEOUS
a. Buyer's Assignment. Buyer shall not assign this
Agreement or its rights hereunder to any individual or
entity without the prior written consent of Seller,
which consent Seller may grant or withhold in its sole
discretion, and any such assignment shall be null and
void. Notwithstanding the foregoing Buyer may, without
Seller's consent, make an assignment prior to Closing to
Xxxx-Xxxx Realty, L.P. ("MCR") or to any entity directly
or indirectly owned or controlled by MCR, in which event
Buyer shall remain liable to Seller to the extent it has
any liability under this Agreement.
b. Designation Agreement. Section 6045(e) of the United
States Internal Revenue Code and the regulations
promulgated thereunder (herein collectively called the
"Reporting Requirements") require an information return
to be made to the United States Internal Revenue
Service, and a statement to be furnished to Seller, in
connection with the Transaction. Title Company ("Agent")
is either (i) the person responsible for closing the
Transaction (as described in the Reporting Requirements)
or (ii) the disbursing title or escrow company that is
most significant in terms of gross proceeds disbursed in
connection with the Transaction (as described in the
Reporting Requirements). Accordingly:
(1) Agent is hereby designated as the "Reporting
Person" (as defined in the Reporting Requirements)
for the Transaction. Agent shall perform all
duties that are required by the Reporting
Requirements to be performed by the Reporting
Person for the Transaction.
(2) Seller and Buyer shall furnish to Agent, in a
timely manner, any information requested by Agent
and necessary for Agent to perform its duties as
Reporting Person for the Transaction.
(3) Agent hereby requests Seller to furnish to Agent
Seller's
37
correct taxpayer identification number. Seller
acknowledges that any failure by Seller to provide
Agent with Seller's correct taxpayer
identification number may subject Seller to civil
or criminal penalties imposed by law. Accordingly,
Seller hereby certifies to Agent, under penalties
of perjury, that Seller's correct taxpayer
identification number is 00-0000000.
(4) Each of the parties hereto shall retain this
Agreement for a period of four (4) years following
the calendar year during which Closing occurs.
c. Survival/Merger. Except for the provisions of this
Agreement which are explicitly stated to survive the
Closing, (a) none of the terms of this Agreement shall
survive the Closing, and (b) the delivery of the Deed
and any other documents and instruments by Seller and
the acceptance thereof by Buyer shall effect a merger,
and be deemed the full performance and discharge of
every obligation on the part of Buyer and Seller to be
performed hereunder.
d. Integration; Waiver. This Agreement, together with the
Schedules and Exhibits hereto, embodies and constitutes
the entire understanding between the parties with
respect to the Transaction and all prior agreements,
understandings, representations and statements, oral or
written, are merged into this Agreement. Neither this
Agreement nor any provision hereof may be waived,
modified, amended, discharged or terminated except by an
instrument signed by the party against whom the
enforcement of such waiver, modification, amendment,
discharge or termination is sought, and then only to the
extent set forth in such instrument. No waiver by either
party hereto of any failure or refusal by the other
party to comply with its obligations hereunder shall be
deemed a waiver of any other or subsequent failure or
refusal to so comply.
e. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of
New Jersey except to the extent its conflict of law
principles would direct the application of the law of a
different state or forum.
f. Captions Not Binding; Schedules and Exhibits. The
captions in this Agreement are inserted for reference
only and in no way define, describe or limit the scope
or intent of this Agreement or of any of the provisions
hereof. All Schedules and Exhibits
38
attached hereto shall be incorporated by reference as if
set out herein in full.
g. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
h. Severability. If any term or provision of this Agreement
or the application thereof to any persons or
circumstances shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement or the
application of such term or provision to persons or
circumstances other than those as to which it is held
invalid or unenforceable shall not be affected thereby,
and each term and provision of this Agreement shall be
valid and enforced to the fullest extent permitted by
law.
i. Notices. Any notice, request, demand, consent, approval
and other communications under this Agreement shall be
in writing, and shall be deemed duly given or made at
the time and on the date when personally delivered as
shown on a receipt therefor (which shall include
delivery by a nationally recognized overnight delivery
service) or three (3) business days after being mailed
by prepaid registered or certified mail, return receipt
requested, to the address for each party set forth
below. Any party, by written notice to the other in the
manner herein provided, may designate an address
different from that set forth below.
IF TO BUYER:
Cali Realty Corporation
00 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxxx and Xxxxx X. Xxxxxx, Esq.
COPY TO:
Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
39
IF TO SELLER:
The Prudential Insurance Company of America
8 Campus Drive, 0xx Xxxxx
Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxx Xxx
COPY TO:
The Prudential Insurance Company of America
8 Campus Drive, 0xx Xxxxx
Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxx, Esq.
AND COPY TO:
BetaWest Properties, Inc.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Vice President, General Counsel
AND COPY TO:
U S West, Inc.
000 Xxxxxxxxx Xxxxx Xxxx
Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President
AND COPY TO:
U S West, Inc.
0000 X. Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Legal
AND COPY TO:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
40
j. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original and all
of which counterparts taken together shall constitute
one and the same agreement.
k. No Recordation. Seller and Buyer each agrees that
neither this Agreement nor any memorandum or notice
hereof shall be recorded and Buyer agrees to indemnify
Seller against all costs, expenses and damages,
including, without limitation, reasonable attorneys'
fees and disbursements, incurred by Seller by reason of
the filing by Buyer of this Agreement or memorandum or
notice. Notwithstanding the foregoing, a notice of
settlement may be recorded.
l. Additional Agreements; Further Assurances. Subject to
the terms and conditions herein provided, each of the
parties hereto shall execute and deliver such documents
as the other party shall reasonably request in order to
consummate and make effective the Transaction; provided,
however, that the execution and delivery of such
documents by such party shall not result in any
additional liability or cost to such party.
m. Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement
and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the
drafting party shall not be employed in the
interpretation of this Agreement or any amendment,
Schedule or Exhibit hereto. Whenever Buyer agrees, in
this Agreement or in any document executed and delivered
by Buyer in connection with the Transaction, to defend,
indemnify and/or hold Seller harmless, Prudential and
EPV jointly, and each of Prudential and EPV, separately,
shall have the right to enforce such obligation against
Buyer.
n. ERISA. To satisfy compliance with ERISA, Buyer
represents and warrants to Seller that, as of the date
hereof and as of the Closing Date:
(a) Buyer's rights under this Agreement do not, and upon its acquisition
by Buyer the Property shall not, constitute "plan assets" within the
meaning of 29 C.F.R. Section 2510.3-101, because one or more of the
following circumstances is true:
(i) Equity interests in Buyer are publicly offered securities,
within the meaning of 29 C.F.R. Section 2510.3-101(b)(2); or
41
(ii) Less than twenty-five (25%) percent of all equity interests in
Buyer are held by "benefit plan investors" within the meaning
of 29 C.F.R. Section 2510.3-101(f)(2); or
(iii) Buyer qualifies as an "operating company", "venture capital
operating company", or a "real estate operating company"
within the meaning of 29 C.F.R. Section 2510.3-101(c), (d) or
(e).
(b) Buyer is not a "governmental plan" within the meaning of Section
3(32) of ERISA and the execution of this Agreement and the purchase
of the Property by Buyer is not subject to state statutes regulating
investments of and fiduciary obligations with respect to
governmental plans.
The representations and warranties of Buyer under this section
shall survive the Closing and shall not be merged therein.
o. Business Day. As used herein, the term "business day"
shall mean any day other than a Saturday, Sunday, or any
Federal, or State of New Jersey holiday. If any period
should expire on a non-Business Day, then the period
shall be extended to the next Business Day.
p. Seller's Maximum Aggregate Liability. Notwithstanding
any provision to the contrary contained in this
Agreement or any documents executed by Seller pursuant
hereto or in connection herewith, the maximum aggregate
liability of Seller, and the maximum aggregate amount
which may be awarded to and collected by Buyer, under
this Agreement (including, without limitation, the
breach of any representations and warranties contained
herein) and any and all documents executed pursuant
hereto or in connection herewith (including, without
limitation, any landlord estoppel letter provided by
Seller in accordance with the terms of Section 6.3(e)
hereof), for which a claim is timely made by Buyer shall
not exceed Four Million Fifty Thousand and No/100
Dollars ($4,050,000). The provisions of this section
shall survive the Closing and shall not be merged
therein.
q. Like-Kind Exchange. Buyer agrees to cooperate reasonably
with Seller in effecting an exchange transaction which
includes the Property, pursuant to Section 1031 of the
United States Internal Revenue Code, provided that any
such exchange transaction, and the related
documentation, shall: (a) be at the sole cost and
expense of Seller, (b) not require Buyer to execute any
contract, make any commitment, or incur any obligations,
contingent or otherwise, to third parties, (c) not cause
Buyer to be liable or
42
potentially liable for any environmental conditions
affecting property other than the Property, (d) not
delay the closing of the Transaction, (e) not include
Buyer's acquiring title to any property other than the
Property or otherwise becoming involved in a transaction
with a third party, and (f) not otherwise be contrary to
or inconsistent with the terms of this Agreement.
Notwithstanding anything to the contrary contained
herein, Buyer is not to incur any, and Seller shall
reimburse, indemnify and hold Buyer harmless from, any
and all costs, expenses and liabilities incurred solely
from Buyer's accommodation of such tax deferred
exchange, including, without limitation, reasonable
attorneys' fees, and any title or escrow fees or
expenses. The obligations of Buyer under this section
shall survive the Closing and shall not be merged
therein.
43
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly
executed on its behalf on the day and year first above written.
PRUBETA-3, a New Jersey general partnership
By: The Prudential Insurance Company of America, as
General Partner of PruBeta-3
By:___________________________________
Name:_________________________________
Its Vice President
By: Equity Parsippany Venture, a Colorado general
partnership, as General Partner of PruBeta-3
By: U S West Real Estate, Inc., a Colorado
corporation, as Managing Partner
By: BetaWest, Inc., a Colorado
corporation formerly known as
BW Acquisition, Inc., as authorized
agent
By:___________________________________
Name:_________________________________
Its:__________________________________
Xxxx-Xxxx Realty Acquisition Corp., a New Jersey
corporation
By:_____________________________________________________
Name:___________________________________________________
Its:____________________________________________________
44
