PURCHASE AND SALE AGREEMENT
by and between
14L ASSOCIATES
(as Seller)
and
MACK-CALI REALTY ACQUISITION CORP.
(as Purchaser)
Dated: June 1, 1998
TABLE OF CONTENTS
Page
1. Definitions............................................................1
2. Sale of the Property...................................................6
3. Matters to Which the Sale is Subject...................................6
4. Purchase Price and Payment.............................................6
4.1 Amount...........................................................6
4.2 Deposit..........................................................6
4.3 Payment..........................................................7
4.4 Disposition of Deposit...........................................8
4.5 Interpleader.....................................................8
4.6 Escrow Agent as Stakeholder......................................8
5. Closing Adjustments and Prorations.....................................9
5.1 General..........................................................9
5.2 Rent and Security Deposits.......................................9
5.3 Taxes and Assessments...........................................11
5.4 Operating Expenses..............................................12
5.5 Utility Deposits................................................13
5.6 Tenant-related expenses.........................................13
5.7 Final Closing Adjustment........................................13
6. Closing Date and Costs................................................15
6.1 Closing Date....................................................15
6.2 Closing Costs and Transfer Taxes................................15
7. Closing Documents.....................................................16
7.1 Seller's Deliveries.............................................16
7.2 Purchaser's Deliveries..........................................17
7.3 Delivery in Escrow..............................................18
8. Obligations Pending Closing...........................................18
8.1 Continued Care and Maintenance..................................18
8.2 Other Covenants.................................................19
9. Conditions to Closing.................................................20
9.1 Inspection Period...............................................20
9.2 Title or Survey Exceptions......................................21
9.3 Encumbrances Subsequent to Inspection Period....................22
9.4 Representations and Warranties True.............................23
9.5 Estoppel Certificates...........................................24
9.6 Other Conditions to Closing.....................................25
9.7 Approvals and Permits not a Condition to
Purchaser's Performance.........................................25
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10. Brokerage.............................................................25
11. Risk of Casualty and Condemnation Pending Closing.....................26
12. Notices and Other Communications......................................28
12.1 Manner of Giving Notice........................................28
12.2 Addresses for Notices..........................................28
13. Default and Remedies..................................................28
13.1 Purchaser......................................................28
13.2 Seller.........................................................29
13.3 Legal Fees.....................................................29
13.4 Documents......................................................29
14. Environmental Condition...............................................29
15. Seller's Representations and Warranties...............................30
15.1 United States Person...........................................30
15.2 Management Agreement...........................................30
15.3 Condemnation...................................................30
15.4 Litigation.....................................................30
15.5 Seller's Authority.............................................30
15.6 Leases.........................................................31
15.7 Service Contracts..............................................31
15.8 Notices of Violations..........................................31
15.9 No Remediation Programs........................................32
16. Purchaser's Authority.................................................32
17. Third Party Beneficiaries.............................................33
18. Further Assurances....................................................33
19. No Assignment.........................................................33
20. Confidentiality.......................................................33
21. Assumption or Cancellation of Service Contracts.......................34
22. Exclusivity...........................................................34
23. Miscellaneous.........................................................34
23.1 Captions and Execution.........................................34
23.2 Press Release..................................................35
23.3 Recording......................................................35
23.4 Amendment and Merger...........................................35
23.5 Binding........................................................35
23.6 Governing Law and Limitation Date..............................35
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23.7 Entire Agreement...............................................36
23.8 Time of Essence................................................36
23.9 No Waiver......................................................36
23.10 Partial Invalidity.............................................36
23.11 Waiver of Jury Trial...........................................36
23.12 No Cross Default...............................................36
23.13 Soil Characteristics...........................................37
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TABLE OF SCHEDULES AND EXHIBITS
-------------------------------
Schedules
- ---------
A Legal Description
B Leases and Security Deposits
C Service Contracts
D Permitted Encumbrances
E Intentionally Omitted
F Pending Litigation
5.2(b) Delinquency Report
5.6 New Leases, Lease Amendments and Commission
Agreements
Exhibits
- --------
A Form of Deed
B Form of Assignment and Assumption of Leases and
Service Contracts
C Form of Assignment of Intangible Property and
Warranties
D Form of Notice to Tenants
E Form of Affidavit
F Form of Estoppel Certificate
G Form of Escrow Agreement
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into this ___ day of June, 1998 (the "Effective Date"), by and between 14L
ASSOCIATES, a District of Columbia limited partnership ("Seller") and MACK-CALI
REALTY ACQUISITION CORP., a Delaware corporation ("Purchaser").
RECITALS
A. Seller owns a certain parcel of land and the improvements thereon,
located at 1400 L Street, N. W., Washington, D. C.
B. Seller has agreed to sell to Purchaser, and Purchaser has agreed to
purchase from Seller, all land, improvements, furniture, furnishings, fixtures,
equipment and other tangible and intangible assets and properties owned by
Seller and used by it in connection with the management, operation, maintenance
and repair of such land and improvements.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
The terms defined in this Section 1 shall have the respective meanings
stated in this Section 1 for all purposes of this Agreement. For purposes of
this Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in this Section 1 shall include the
plural as well as the singular, and the use of any gender herein shall be deemed
to include the other gender; (ii) accounting terms not otherwise defined herein
shall have the meanings assigned to them in accordance with generally accepted
accounting principles; (iii) references herein to "Sections" and other
subdivisions without reference to a document shall be to designated Sections and
other subdivisions of this Agreement; (iv) a reference to an Exhibit or a
Schedule without a further reference to the document to which the Exhibit or
Schedule is attached shall be a reference to an Exhibit or Schedule to this
Agreement; (v) the words "herein," "hereof," "hereunder" and other words of
similar import shall refer to this Agreement as a whole and not to any
particular provision; and (vi) the word "including" shall mean "including, but
not limited to."
1.1 Additional Rent shall mean all reimbursements of Operating
Expenses and administrative charges, common area
maintenance charges, reimbursements of real estate taxes, rent escalations based
on increases in the consumer price index or any other measures of inflation,
retroactive rent escalations, insurance cost reimbursements, parking charges,
antenna rents, license fees and all other amounts and charges payable by Tenants
to Seller, as landlord, under their Leases (other than Basic Rent), but shall
not include security deposits under the Leases.
1.2 Affiliate shall mean, with respect to any entity, any natural
person or firm, corporation, partnership, association, trust or other entity
that controls, is controlled by, or is under common control with, the subject
entity; a natural person or entity that controls an Affiliate under the
foregoing shall also be deemed to be an Affiliate of such entity. For purposes
hereof, the term "control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of any
such entity, or the power to veto major policy decisions of any such entity,
whether through the ownership of voting securities, by contract or otherwise.
1.3 AS IS CONDITION WITH ALL FAULTS shall mean as is, with all
faults, including defects seen and unseen and all conditions natural and
artificial without right of set-off or reduction in the Purchase Price and
without representation or warranty of any kind, express or implied, except for
such representations or warranties as are expressly provided for herein.
1.4 Basic Rent shall mean all base rent or basic rent payable in
fixed installments and fixed amounts for stated periods by Tenants under their
Leases.
1.5 Building shall mean collectively all of the buildings and
structures now or on the Closing Date erected or situated upon the Land,
including all improvements and fixtures, appurtenant to or used in connection
therewith, that are owned by Seller presently or on the Closing Date and any
interest of Seller in and to alterations and installations in the buildings and
structures that may now or hereafter, by lease or operation of law, become the
property of Seller.
1.6 Business Day shall mean those days of the week that are not a
Saturday, Sunday or a federal holiday.
1.7 Closing shall have the meaning set forth in Section 4.3.
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1.8 Closing Date shall mean the Effective Date.
1.9 Closing Statement shall have the meaning set forth in Section
5.1.
1.10 Delinquent Rent shall mean rent that is due and payable by a
Tenant on or before the Closing Date but that has not been paid by the Closing
Date.
1.11 Deposit. No deposit is required of Purchaser hereunder. All
references to a "Deposit" under this Agreement, and all provisions of this
Agreement dealing with a "Deposit", shall be deemed to be inoperative and of no
force or effect.
1.12 Effective Date shall be the date set forth in the preamble to
this Agreement.
1.13 End of the Inspection Period shall mean the Effective Date.
1.14 Escrow Agent shall mean Commercial Settlements, Inc.
1.15 Final Closing Adjustment shall have the meaning set forth in
Section 5.7.
1.16 Inspection Period shall have the meaning set forth in Section
9.1.
1.17 Intangible Property shall mean the contract rights, licenses,
permits, certificates of occupancy, guaranties, warranties, approvals, rights to
use trademarks, any name by which the Property is commonly known, trade names,
telephone numbers in use at the Property by Seller or its managing agent, logos,
designs, graphics or artwork, architectural drawings and as-built plans, and all
similar items, each to the extent owned by Seller and to the extent they are in
Seller's possession and used in connection with the operation of the Property,
but shall not include bank accounts or cash held in the name of Seller or its
managing agent.
1.18 Land shall mean that certain parcel of land situate and lying
in the District of Columbia, as more particularly described in Schedule A.
1.19 Leases shall mean the leases of space in the Building as
described in Schedule B and any other leases or occupancy agreements to which
Seller is a party, with amendments
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and guaranties thereof and other amendments permitted by this Agreement or
otherwise agreed to by Purchaser.
1.20 Operating Expenses shall mean all costs, expenses, charges and
fees relating to the ownership, management, operation, maintenance and repair of
the Property, including electricity, gas, water and sewer charges, telephone and
other public utilities, common area maintenance charges, vault charges, personal
property taxes, and periodic charges payable under Service Contracts, but not
including any costs, expenses, charges or fees that are the direct
responsibility of a Tenant under a Lease.
1.21 Other Seller Interests shall mean all of the right, title and
interest of Seller pertaining to the Land, including all hereditaments and
appurtenances thereunto belonging or in any way appertaining, including the
following:
(a) all of the right, title and interest of Seller in and to
any easements, privileges, grants of right or other agreements affecting the
Property or comprising the Permitted Encumbrances, including any structures or
improvements erected pursuant to such easements, grants of right or other
agreements whether or not situated upon the Land;
(b) all of the right, title and interest of Seller in and to
any land lying in the bed of any street, road or avenue, opened or proposed, in
front of or adjoining the Property, to the center line thereof, and to any
strips or gores adjoining the Property or any part thereof, and all right, title
and interest of Seller in and to any award made or to be made in lieu thereof,
and in and to any unpaid award for damages to the Property by reason of change
of grade of any street;
(c) all of the right, title and interest of Seller in and to
any mineral and water rights, if any; and
(d) tenant data, leasing material and forms, past and current
rent rolls, tenant files, and other similar information and materials used by
Seller in the use and operation of the Property, all to the extent in Seller's
possession, with the exception of appraisals, forecasts and other owner-oriented
or confidential information.
1.22 Permitted Encumbrances shall mean those items or matters
affecting title to the Property which are set forth on Schedule D attached
hereto, and those items or matters otherwise
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deemed to be Permitted Encumbrances pursuant to the provisions of this
Agreement.
1.23 Personal Property shall mean all personal property, fixtures,
equipment and inventory owned by Seller and located at the Building.
1.24 Property shall mean collectively the Land, the Site
Improvements, the Building, the Personal Property, the landlord's rights under
the Leases, the Seller's rights under the Service Contracts, the Intangible
Property and the Other Seller Interests.
1.25 Purchase Price shall mean the purchase price for the Property
specified in Section 4.1.
1.26 Service Contracts shall mean all of the service, operation,
maintenance, labor and similar agreements entered into by Seller in respect of
the Property that are described in Schedule C; provided, however, that Service
Contracts shall not include any management contracts or exclusive agency
agreements for leasing of office and/or retail space in the Building.
1.27 Site Improvements shall mean the parking garage, driveway
pavings, access cuts, lighting, bumpers, drainage systems and landscaping
situated upon the Land.
1.28 Tenant shall mean the holder of any right to occupy, possess,
or use all or any part of the Property pursuant to a Lease.
1.29 Title Commitment shall have the meaning set forth in Section
9.2.
1.30 Title Company shall mean Lawyers Title Insurance Corporation.
At Purchaser's election, Purchaser may cause the Title Commitment to be issued
by an abstract agency writing for Purchaser's title company. In addition,
Purchaser shall have the right to cause the Title Commitment to be issued by one
or more title companies.
2. Sale of the Property.
Upon and subject to the terms and conditions contained in this
Agreement, Seller agrees to sell the Property to Purchaser, and Purchaser agrees
to purchase the Property from Seller.
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3. Matters to Which the Sale is Subject.
The sale of the Property shall be subject to each and all of the
following:
(a) all laws, ordinances, statutes, orders, requirements and
regulations to which the Property is subject, including zoning, building and
environmental laws and requirements;
(b) any state of facts that a new or updated survey or physical
inspection of the Property might disclose;
(c) the Permitted Encumbrances;
(d) all covenants, encumbrances or restrictions approved (or deemed
approved) by Purchaser;
(e) all terms, provisions and conditions of the Leases; and
(f) the Service Contracts and any other agreements affecting the
Property that Purchaser assumes pursuant to Section 21 hereof.
4. Purchase Price and Payment.
4.1 Amount. The purchase price for the Property shall be the sum of
Forty Million Dollars ($40,000,000) (the "Purchase Price"), which shall be
payable all in cash at the Closing. No part of the Purchase Price is allocable
to the Personal Property.
4.2 Deposit. Purchaser shall place the Deposit in escrow with the
Escrow Agent simultaneously with Purchaser's execution of this Agreement. The
Deposit shall be subject to disposition as provided for elsewhere in this
Agreement. If the Deposit is in cash or is converted into cash in accordance
with this Section, Escrow Agent shall promptly after receipt invest the Deposit
in an interest-bearing account in a commercial bank acceptable to both Purchaser
and Seller. If Purchaser elects to deliver a letter of credit ("LOC") as the
Deposit, the LOC shall be (i) unconditional and irrevocable, (ii) issued to
Escrow Agent as beneficiary by a commercial bank acceptable to Seller, (iii) for
a term of not less than one year from the date of issuance, and (iv) otherwise
acceptable to Seller in all respects. In the event that the Deposit is in the
form of an LOC and there is any dispute between Seller and Purchaser regarding
the disposition of
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the Deposit, Seller shall have the unilateral right, at its sole discretion, to
instruct Escrow Agent to cash the LOC and to hold the proceeds of the LOC as a
cash deposit under the provisions of this Agreement. Purchaser agrees that if
Seller so instructs Escrow Agent, Purchaser will not interpose any objection to
such instruction and will permit Escrow Agent to cash the LOC pursuant to such
instruction.
4.3 Payment. On the Closing Date, and subject to the terms and
conditions of this Agreement, Purchaser shall pay the Purchase Price to, or for
the account of, Seller in the manner provided for in this Section 4.3, subject
to the adjustments and prorations set forth in Section 5. Not later than 11:00
a.m. Eastern Time on the Closing Date, Purchaser shall effect a wire transfer of
federal funds to the Title Company's designated escrow account in an amount
equal to the sum of (i) the Purchase Price and (ii) the net amount (if any) of
the costs, expenses, prorations and adjustments payable by Purchaser under this
Agree ment. The amount of the funds to be wired to the Title Company's account
shall be reduced by the Deposit, if the Deposit is in cash. After the Title
Company's receipt of the wire transfer of funds in the amount required by this
Agreement, and immediately following Purchaser's confirmation that all
conditions precedent to Purchaser's obligation to close hereunder have been
satisfied, Purchaser or its counsel shall instruct the Title Company to (i)
disburse to Seller an amount equal to the Purchase Price, reduced by the net
amount of the costs, expenses, prorations and adjustments payable by Seller
under this Agreement; (ii) deliver to Purchaser all other documents and
instruments received by the Title Company that, in accordance with the terms of
this Agreement, are to be delivered by Seller to Purchaser at the closing of the
purchase and sale of the Property (the "Closing"); and (iii) deliver to Seller
all other documents and instruments received by the Title Company that, in
accordance with the terms of this Agreement, are to be delivered by Purchaser to
Seller at the Closing. Simultaneously with giving the instruction set forth in
the previous sentence, Purchaser shall instruct Escrow Agent to disburse the
Deposit to Seller. If the Deposit is in the form of an LOC, Seller shall
instruct Escrow Agent to deliver the LOC to Purchaser promptly after completion
of the Closing, and Escrow Agent shall execute a release of Seller and Purchaser
(in the customary form) relating to the performance by Escrow Agent of its
obligations hereunder.
4.4 Disposition of Deposit. If this Agreement is terminated pursuant
to Section 13 and thereafter either Seller or Purchaser makes a demand on the
Escrow Agent for the return of the Deposit (if the demand is made by Purchaser)
or for the
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payment of the Deposit (if the demand is made by Seller), the Escrow Agent shall
give notice of such demand to the other party. If the Escrow Agent does not
receive an objection from the other party to the proposed payment or return of
the Deposit within ten (10) days after the giving of such notice, the Escrow
Agent shall pay the Deposit to the party making the demand. If the Escrow Agent
receives an objection from the other party within the ten (10)-day period, the
Escrow Agent shall continue to hold the Deposit until otherwise directed by
instructions from Seller and Purchaser or until otherwise directed by a court of
competent jurisdiction. If a demand is made for either the return or payment of
the Deposit and if the Deposit is in the form of a LOC, and the Escrow Agent
continues to hold the Deposit, either of the Seller or the Purchaser may, by
notice in writing to the Escrow Agent, require the Escrow Agent to cash the LOC
and hold the proceeds in accordance with the terms of this Agreement. If the
Deposit is in the form of an LOC, Escrow Agent shall effect any payment of the
Deposit to Seller by cashing the LOC and paying the proceeds to Seller.
4.5 Interpleader. In the event of a dispute concerning the
disposition of the Deposit, the Escrow Agent shall have the right at any time to
deposit any cash funds held by it under this Agreement, or the LOC (in the event
Seller has not instructed Escrow Agent to cash the LOC in accordance with the
provisions of Sections 4.2 or 4.4 hereof), with the clerk of the court having
jurisdiction. The Escrow Agent shall give notice of such deposit to Seller and
Purchaser. Upon such deposit, the Escrow Agent shall be relieved and discharged
of all further obligations and responsibilities hereunder.
4.6 Escrow Agent as Stakeholder. The parties acknowledge that the
Escrow Agent is acting solely as a stakeholder at their request and for their
convenience; that the Escrow Agent shall not be deemed to be the agent of either
of the parties; and that the Escrow Agent shall not be liable to either of the
parties for any act or omission on its part unless taken or suffered in bad
faith, in willful disregard of this Agreement or involving gross negligence.
Seller and Purchaser shall jointly and severally indemnify and hold the Escrow
Agent harmless from and against all costs, claims, and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of the
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or suffered by the Escrow Agent in bad faith, in willful disregard of this
Agreement or involving gross negligence on the part of the Escrow Agent.
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5. Closing Adjustments and Prorations.
5.1 General. All Additional Rent, Basic Rent, and other rentals,
revenues and other income generated by the Property ("Rent") and all utilities,
real estate taxes, maintenance charges and other Operating Expenses incurred in
connection with the ownership, management and operation of the Property shall be
paid or shall be prorated between Seller and Purchaser in accordance with the
provisions of this Section 5. For purposes of the prorations and adjustments to
be made pursuant to this Section 5, Purchaser shall be deemed to own the
Property and therefore be entitled to any revenues and be responsible for any
expenses for the entire day upon which the Closing occurs. Any apportionments
and prorations that are not expressly provided for in this Section 5 shall be
made in accordance with the customary practice in the metropolitan Washington
D.C. area. Seller and Purchaser shall cause their accountants to prepare a
schedule of prorations (the "Closing Statement") in draft form to be finalized
on the Business Day immediately prior to the Closing Date. Any net adjustment in
favor of Purchaser shall be credited against the Purchase Price at the Closing.
Any net adjustment in favor of Seller shall be paid in cash at the Closing by
Purchaser to Seller.
5.2 Rent and Security Deposits. Rent shall be prorated at the
Closing in accordance with the following provisions:
(a) Basic and Additional Rent. Subject to Section 5.2(b),
Seller shall be entitled to all Basic Rent and Additional Rent that accrues
before the Closing Date and Purchaser shall be entitled to all Basic Rent and
Additional Rent that accrues on and after the Closing Date. Basic Rent and
Additional Rent that Seller has collected for the month in which Closing occurs
shall be prorated between Seller and Purchaser as of the Closing Date based on
the actual number of days in the month during which the Closing Date occurs. For
purposes hereof, Additional Rent shall be prorated as of the Closing Date based
on Seller's current estimates thereof which have been collected from Tenants and
shall be readjusted in the Final Closing Adjustment.
(b) Delinquent Rent. Delinquent Rent, after reasonable, actual
expenses of collection, shall be promptly paid by Purchaser to Seller as
provided in the balance of this paragraph if, as and when actually collected by
Purchaser after the Closing, it being understood and agreed that Purchaser shall
be obligated only to use commercially reasonable efforts to collect Delinquent
Rent on behalf of Seller, and shall not be
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obligated to commence litigation or to terminate a Tenant's Lease in order to
collect Delinquent Rent. Purchaser hereby agrees that Seller or its agents may
attempt to collect Delinquent Rent at Seller's expense, including commencing
litigation to collect such Delinquent Rent, but Seller agrees that after the
Closing Date it shall not (i) initiate any action that would terminate a
Tenant's Lease or affect such Tenant's right to occupy the premises or use the
parking spaces leased under its Lease, or (ii) seek to apply such Tenant's
security deposit against the Delinquent Rent of such Tenant. If a Tenant has 60
days or less of Delinquent Rent which is Basic Rent ("Delinquent Basic Rent"),
Rent collected by Purchaser after the Closing Date in respect of such Tenant
shall be applied first to Delinquent Basic Rent to the extent of thirty (30)
days of Delinquent Basic Rent attributable to the thirty (30)-day period
immediately preceding the Closing Date, then to Rent currently due (including
unpaid Rent accruing after the Closing Date), and then to any other unpaid
Delinquent Rent. If a Tenant has more than 60 days of Delinquent Basic Rent,
Rent collected by Purchaser after the Closing Date in respect of such Tenant
shall be applied first to Rent currently due (including unpaid Rent accruing
after the Closing Date), and then to Delinquent Rent. All Rent received by
Purchaser which is required to be applied as a credit to, or for the benefit of,
Seller pursuant to this Agreement shall be promptly paid by Purchaser to Seller
upon Purchaser's receipt of the same. Attached as Schedule 5.2(b) is a schedule
of Delinquent Rent compiled as of May 29, 1998 (it being understood that Seller
makes no representation or warranty concerning the accuracy of such delinquency
report). Schedule 5.2(b) attached hereto shall be the basis of making the
payments referred to in this Section, absent manifest error.
(c) Security Deposits. Purchaser shall receive, as a credit
against the Purchase Price, an amount equal to all cash security deposits set
forth in the Leases, together with interest required to be paid thereon, to the
extent not applied by Seller, as landlord, under such Leases on or prior to the
Effective Date, and any prepaid Rent. The security deposits held by Seller as of
the Effective Date are set forth on Schedule B attached hereto (it being
understood and agreed that Seller makes no representation or warranty concerning
such security deposits or the accuracy of Schedule B regarding such security
deposits). At Closing, Schedule B shall be the basis of making the credit to
Purchaser referred to in this Section, absent manifest error.
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5.3 Taxes and Assessments.
(a) Proration of Taxes at Closing. All non-delinquent real
estate taxes and special assessments, if any, assessed against the Property
shall be prorated between Seller and Purchaser as of the Closing Date in the
customary fashion, based upon the actual current tax bill. If the most recent
tax bill received by Seller before the Closing Date is not the actual current
tax bill, then Seller and Purchaser shall initially prorate the real estate
taxes at the Closing by applying the tax rate indicated on the most recent tax
bill received by Seller to the latest assessed valuation, and shall re-prorate
the real estate taxes retroactively at the Final Closing Adjustment. All real
estate taxes accruing before the Closing Date shall be the obligation of Seller
and all real estate taxes accruing on and after the Closing Date shall be the
obligation of Purchaser. Any delinquent real estate taxes assessed against the
Property shall be paid (together with any interest and penalties) by Seller at
the Closing. Any general or special assessments, if any, assessed against the
Property for work which has been completed prior to the Closing shall be paid
for in full by Seller at or prior to the Closing; provided, however that if any
such assessment is payable in installments, Seller shall pay all of such
installments due through the day prior to the Closing, and Purchaser shall be
responsible for the balance of such installments. All other assessments shall be
paid by Purchaser when due (and if due prior to Closing, shall be paid at or
prior to Closing).
(b) Post-Closing Supplemental Taxes. If, after the Closing
Date, any additional or supplemental real estate taxes are assessed against the
Property by reason of back assessments, corrections of previous tax bills or
other events (including, without limitation, imposition of any special
assessments) occurring before the Closing Date, Seller and Purchaser shall
re-prorate the real estate taxes within thirty (30) days after the final
determination thereof, but in no event later than at the Final Closing
Adjustment.
(c) Post-Closing Refunds of Taxes. Any refunds of real estate
taxes made after the Closing shall first be applied to the reasonable
unreimbursed costs incurred in obtaining the refund (including, but not limited
to, any legal fees paid by Seller or Purchaser), then paid to any Tenants who
are entitled to the same, and the balance, if any, shall be paid (within thirty
(30) days after the final determination of such amount) to Seller (with respect
to real estate taxes for the period prior to the Closing Date) and to Purchaser
(with respect
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to real estate taxes for the period commencing on and after the Closing Date).
The parties understand and agree that there are pending claims and/or
proceedings pursuant to which Seller is pursuing a reduction in the assessed
valuation of the Property for real estate tax purposes or a claim for refund of
real estate taxes. Seller agrees that, without obtaining the prior consent of
Purchaser (not to be unreasonably withheld), Seller will not make any
commitments to the taxing authority regarding real estate taxes for periods
after the Closing Date in connection with the resolution of such pending claims
and/or proceedings.
5.4 Operating Expenses. Seller shall be responsible for all
Operating Expenses attributable to the period before the Closing Date and
Purchaser shall be responsible for all Operating Expenses attributable to the
period on and after the Closing Date. All Operating Expenses shall be prorated
between Seller and Purchaser in the customary fashion as of the Closing Date,
based on the actual number of days in the month during which the Closing Date
occurs for monthly expenses, and based on a 365-day year for annual expenses. To
the extent commercially reasonable and practicable, Seller shall obtain final
billings for meter readings made as of the Business Day preceding the Closing
Date, and Seller shall pay such final billings when Seller receives the same. If
Seller is able to obtain final meter readings and billings, there shall be no
adjustment at Closing for the costs, expenses, charges or fees shown thereon. If
billings or meter readings as of the Business Day preceding the Closing Date are
not available for any utility service, the charges therefor shall be adjusted at
the Closing on the basis of the per diem charges for the most recent prior
period for which bills were issued, and shall be further adjusted within thirty
(30) days after receipt of the necessary bills or meter readings, but in no
event later than at the Final Closing Adjustment on the basis of the actual
bills for the current period.
5.5 Utility Deposits. Seller shall be entitled to retain any or all
utility deposits and all interest accrued thereon. If any utility deposit is not
refundable to Seller without replacement by Purchaser, Purchaser shall deliver
the requisite replacement utility deposit to the utility company on or before
the Closing Date.
5.6 Tenant-related expenses.
(a) Leasing Commissions. Purchaser shall be responsible for
the payment of all leasing commissions due in respect of (i) new Leases of space
in the Building or amendments to existing Leases approved by Purchaser, which
new leases and
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amendments are listed on Schedule 5.6 attached hereto, and (ii) renewals of
Leases or expansions of the space leased by Tenants under Leases, which renewals
and expansions are to be effective after the date hereof, so long as and to the
extent that any leasing commissions covered by this clause (ii) are not in
excess of market rate commissions. All other leasing commissions shall be paid
by Seller. It is understood and agreed that Seller makes no representation or
warranty concerning the amount of leasing commissions payable by Purchaser under
this Section 5.6(a). The agreements pursuant to which leasing commissions are
owing on the new Leases and/or amendments to Leases referenced in clause (i)
above are listed on Schedule 5.6.
(b) Other Lease Costs. Purchaser shall be responsible for the
payment and performance of any tenant improvements to be paid for and/or
performed by landlord under Leases from and after the date hereof (including but
not limited to tenant improvements to be made under new Leases of space in the
Building or amendments to existing Leases approved by Purchaser that are listed
on Schedule 5.6 attached hereto). Purchaser shall also accept (and shall not
seek compensation from Seller by reason of) any rental abatements provided for
in Leases or in the new Leases or amendments to Leases listed on Schedule 5.6.
It is understood and agreed that Seller makes no representation or warranty
concerning the amount of tenant improvements to be paid for by Purchaser under
this Section 5.6(b). Seller shall be responsible for the payment of all tenant
improvements not to be paid for by Purchaser under the provisions of this
Section 5.6(b).
5.7 Final Closing Adjustment. No later than April 30, 1999, Seller
and Purchaser shall make a final adjustment to the prorations made pursuant to
this Section 5 (the "Final Closing Adjustment"). The Final Closing Adjustment
shall be made in the following manner:
(a) General. Subject to Section 5.7(b) and (c) hereof, all
adjustments or prorations that could not be determined at the Closing because of
the lack of actual statements, bills or invoices for the current period, or any
other reason shall be made within thirty (30) days after the receipt of the
applicable statement, bill or invoice, but in no event later than as a part of
the Final Closing Adjustment. Any net adjustment in favor of Purchaser shall be
paid in cash by Seller to Purchaser no later than thirty (30) days after said
adjustment is made, but in no event later than thirty (30) days after the Final
Closing Adjustment. Any net adjustment in favor of Seller shall be paid in cash
by Purchaser to Seller no later
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than thirty (30) days after said adjustment is made, but in no event later than
thirty (30) days after the Final Closing Adjustment. The parties shall correct
any manifest error in the prorations and adjustments made at Closing promptly
after such error is discovered (but in no event later than April 30, 1999).
(b) Additional Rent Adjustment. Seller and Purchaser shall
prorate the actual amount of Additional Rent paid by each Tenant for the 1998
calendar year as follows (it being understood and agreed that all Tenants are on
a calendar year basis of accounting with respect to Additional Rent payments):
(1) Seller shall be entitled to the portion of the
actual amount of Additional Rent for calendar year 1998 paid by the Tenant equal
to the product obtained by multiplying such amount by a fraction, the numerator
of which is the number of days in 1998 preceding the Closing Date and the
denominator of which is 365; and
(2) Purchaser shall be entitled to the balance of the
Additional Rent paid by the Tenant.
If a Tenant has made payments of Additional Rent on an estimated basis during
1998, such estimated payments shall be taken into account in prorating
Additional Rent under this Section 5.7(b). Seller shall pay any Tenant, as
required under its Lease, from any Additional Rent adjustment made in Seller's
favor under this Section, any overpayment of Additional Rent such Tenant may
have made for periods prior to the Closing Date. In order to assure Purchaser
that there will be sufficient cash to repay Tenants any overpayments of
Additional Rent such Tenants may have made for the period during 1998 prior to
the Closing Date, Seller will establish an escrow at Closing in accordance with
the provisions of the Escrow Agreement attached hereto as Exhibit G. Purchaser
shall pay any Tenant, as required under its Lease, from any Additional Rent
adjustment made in Purchaser's favor under this Section, any overpayment of
Additional Rent such Tenant may make for periods on or after the Closing Date.
(c) No Further Adjustments. Except for: (i) additional or
supplemental real estate taxes, real estate tax credits or rebates, or other
adjustments to real estate taxes due to back assessments, corrections to
previous tax bills or real estate tax appeals or contests or (ii) manifest
errors, the Final Closing Adjustment shall be conclusive and binding upon Seller
and Purchaser, and Seller and Purchaser hereby waive any right to contest after
the Final Closing Adjustment any prorations, apportionments or adjustments to be
made pursuant to this Section
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5. In no event shall Purchaser have the right to recover any adjustments not
brought to Seller's attention in writing prior to April 30, 1999.
6. Closing Date and Costs.
6.1 Closing Date. The Closing shall take place at the offices of
Arent Fox Kintner Plotkin & Kahn, 1050 Connecticut Avenue, Washington D.C.
20036, at 10:00 a.m., Eastern Daylight Time, on the Closing Date.
6.2 Closing Costs and Transfer Taxes. All District of Columbia
transfer and recordation taxes, and other recording charges, payable in
connection with the recording of the special warranty deed (whether imposed in
the form of transfer taxes, documentary stamps or otherwise), and any charges of
the Escrow Agent for holding the Deposit, shall be divided equally between
Seller and Purchaser. Purchaser shall pay for all expenses of examination of
title, the cost of an owner's title insurance policy, survey, and all other
Closing expenses. Each party shall pay its own legal fees and other expenses
incurred by it prior to Closing. Seller shall pay all costs incurred in
connection with the repayment or satisfaction of any liens on the Property
except for any liens caused by the acts of Purchaser or any of its agents or
representatives. The provisions of this Section 6.2 shall survive the Closing
Date.
7. Closing Documents.
7.1 Seller's Deliveries. Seller shall execute and/or deliver to
Purchaser on the Closing Date the following:
(a) a special warranty deed in the form attached hereto as
Exhibit A;
(b) an assignment and assumption of leases and service
contracts in the form attached hereto as Exhibit B;
(c) an assignment of all Intangible Property and warranties
related to the Property in the form attached hereto as Exhibit C;
(d) letters in the form attached hereto as Exhibit D to each
Tenant under the Leases;
(e) an affidavit in the form attached hereto as Exhibit E;
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(f) an owner's affidavit signed by Seller, addressed to the
Title Company designated by Purchaser, with respect to the absence of claims
caused by Seller that would give rise to mechanics' liens, the absence of
parties in possession of the Property other than Tenants under the Leases (and
other than subtenants of Tenants) and the absence of unrecorded easements
granted by Seller, in the form reasonably required by the Title Company to
eliminate the exceptions for those matters from Purchaser's title insurance
policy;
(g) the Closing Statement referred to in Section 5.1 signed by
Seller;
(h) all keys to the Property, if any, that are in Seller's
possession;
(i) Intentionally Omitted;
(j) Tenant estoppel certificates in accordance with the
provisions of Section 9.5;
(k) such additional documents as Seller and Purchaser shall
mutually agree are necessary to consummate the sale of the Property to
Purchaser;
(l) to the extent in Seller's possession, all original Leases,
together with any guarantees thereof and any other amendments permitted to be
executed pursuant to this Agreement or otherwise used in connection the use and
operation of the Property;
(m) such evidence of authority of the parties executing any
closing documents on behalf of Seller, as reasonably requested by the Title
Company;
(n) to the extent in Seller's possession, all plans and
specifications with respect to the initial construction of the Property and any
subsequent changes or authorization thereto, all manuals, guarantees, security
codes and other information with respect to operating any of the equipment at
the Property or which was provided at the time such equipment was purchased or
installed, and all maintenance records, in all cases to the extent in Seller's
possession;
(o) a computer diskette containing this Purchase Agreement as
finally agreed to and executed by the parties; and
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(p) a certificate stating that the representations and
warranties made by Seller in Section 15 hereof are true, correct and complete in
all material respects as of the Closing, subject to changes therein caused by
changed circumstances since the Effective Date.
In addition to the foregoing, Seller shall make available to Purchaser at
Seller's offices any books and records relating to the Property in Seller's
possession should Purchaser require such access in connection with any review or
audit of the income and expenses of the Property for any period of Seller's
ownership thereof; provided, however, that any such review and/or audit shall be
made at Purchaser's sole expense, with the least disruption possible to Seller's
business, and upon not less than seven (7) days' written notice; and provided,
further, that Seller shall not be required to make available to Purchaser any
such books or records which are more than three (3) years old. The provisions of
this paragraph shall survive Closing for a period of three (3) years.
7.2 Purchaser's Deliveries. Purchaser shall execute and deliver to
Seller on the Closing Date the following:
(a) an assignment and assumption of leases and service
contracts in the form attached hereto as Exhibit B;
(b) the Closing Statement referred to in Section 5.1 signed by
Purchaser; and
(c) all documents reasonably required by Seller's attorneys or
the Title Company to determine that Purchaser is authorized to buy the Property
and to execute all documents in connection therewith.
7.3 Delivery in Escrow. The delivery to the Title Company of the
Purchase Price, the executed special warranty deed described in Section 7.1(a)
and all other documents and instruments required to be delivered by either party
to the other by the terms of this Agreement, and the performance by all parties
to this Agreement of all material obligations to be so performed, shall be
deemed to be a good and sufficient tender of performance of the terms hereof.
Seller shall be deemed to have delivered voluminous or cumbersome materials
(such as the items described in Sections 7.1(l) and 7.1(n)) by making them
available at the office of the managing agent for the Property.
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8. Obligations Pending Closing.
8.1 Continued Care and Maintenance. During the period between the
Effective Date and the Closing Date, Seller agrees to operate and maintain the
Property in the ordinary course of business and use reasonable efforts to
reasonably preserve for Purchaser the relationships between Seller and the
Tenants, suppliers, managers, employees and others having ongoing relationships
with the Property. Further, during the period between the Effective Date and the
Closing Date, Seller agrees: (i) not to change, amend or modify the Leases, or
any of the instruments affecting, or with respect to, the title to the Property
except as required by law or the document involved (provided, however, that the
Seller may, at its option, eliminate any financing and/or other encumbrances
which are not Permitted Encumbrances); (ii) not to change, amend or modify,
except in a de minimis respect, any of the Service Contracts or other rights,
obligations or agreements related to use, ownership or operation of the Property
without Purchaser's prior approval, where such changes, amendments or
modifications would (x) materially increase Seller's obligations, liability or
expenses thereunder, (y) modify in any respect Purchaser's obligations,
liability or expenses as set forth in such Service Contracts or other rights,
obligations or agreements as they exist as of the date hereof (except in
emergency situations) or (z) result in such Service Contracts or other rights,
obligations or agreements not being cancelable upon thirty (30) days' notice or
only being cancelable upon payment of a fee or penalty, or both; (iii) not to
make alterations or changes to the Property other than de minimis alterations or
changes or ordinary and necessary maintenance and repairs, without Purchaser's
prior approval (provided, however, that Seller may make any alterations or
changes to the Property that are required by any Lease or applicable law without
Purchaser's prior approval), Seller agreeing that it shall give Purchaser notice
of any alterations or changes made to the Property on or about the date it
performs same, whether or not Purchaser's prior approval is necessary; (iv) to
maintain in effect all policies of casualty and liability insurance or similar
policies of insurance, with no less than the limits of coverage now carried with
respect to the Property; and (v) to cure all material violations of law
affecting the Property for which a written notice of violation was issued by the
local governmental authorities prior to the Effective Date (provided, however,
that the cost to cure such violations shall not exceed $25,000 in the aggregate,
or if such violations are not cured prior to the Closing Date, at Closing
Purchaser shall be entitled to a credit not to exceed $25,000 and shall not be
entitled to refuse to close on account of the existence of any such
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violations). Where an approval of Purchaser is required under the foregoing
provisions, Purchaser agrees not to unreasonably withhold or delay any such
approval, and such approval shall be deemed given if Purchaser has not objected
in writing within five (5) days after notice of the matter on which Purchaser's
approval is sought, which notice is to include notification from Seller that
Purchaser's failure to so approve as provided in this Section 8.1 shall be
deemed an approval. Nothing contained herein shall prevent Seller from acting to
prevent loss of life, personal injury or property damage in emergency
situations, or prevent Seller from performing any act with respect to the
Property that may be required by any Lease, applicable law, rule or governmental
regulations.
8.2 Other Covenants. In addition to the matters set forth in Section
8.1, during the period between the Effective Date and the Closing Date, Seller
agrees: (a) that, at any time prior to Closing, it shall terminate, at its own
cost and expense, any and all management agreements and any exclusive leasing
agency agreements for the Property, subject, however in the case of leasing
agreements, to the provisions of Section 5.6 hereof); (b) that it shall not
terminate any Lease, apply any security deposits posted thereunder, or accept
the surrender of any Lease, or grant any concession, rebate, allowance or free
rent thereunder (except pursuant to the provisions of a Lease in existence on
the Effective Date or approved or deemed approved by Purchaser); (c) not to
mortgage or transfer the Property, or any interest therein; (d) to permit
Purchaser and its representatives to continue to inspect the Property as more
particularly provided in Section 9.1 below notwithstanding the termination of
the Inspection Period; and (e) to deliver to Purchaser any notice of violation
of law Seller may receive from any governmental agency having jurisdiction over
the Property. Seller will give Purchaser notice (promptly after Seller becomes
aware of the same) of any liens placed on the Property by a Tenant or a creditor
of a Tenant, but Seller shall not be obligated to remove or caused to be removed
any such liens.
9. Conditions to Closing.
9.1 Inspection Period.
(a) Seller shall provide or make available to Purchaser all
information related to the Property in Seller's possession, except for
confidential and proprietary information concerning the partnership that owns
the Property, the financing of the Property, and confidential and proprietary
information belonging to any third party (including the property manager).
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In addition to the foregoing, Seller shall provide a copy of or make available
all Leases and Lease amendments and Service Contracts in its possession, leasing
commission agreements, test borings, environmental reports, surveys, title
materials and engineering and architectural data and the like relating to the
Property that are in Seller's possession. Purchaser agrees that Seller and
Seller's agents make no warranty or representation, either express or implied,
concerning the matters disclosed in such information, including the completeness
or accuracy thereof.
(b) During the period prior to the Effective Date (such period
being hereinafter called the "Inspection Period"), Purchaser has made, or caused
to be made, at Purchaser's own risk and expense, such investigation of the
Property as it elected, including physical inspections of the Property, review
of the Leases, Service Contracts, laws and ordinances, and approval of survey
and condition of title. Purchaser agrees that it has investigated the Property
and that any further investigation of the Property by Purchaser will not disrupt
normal operations of the Property or any Tenant's quiet enjoyment of its demised
premises. Purchaser shall not undertake any structural, physical, mechanical,
environmental or other testing which will cause damage to the Property, or
undertake any other invasive testing of the Property. Subject to the foregoing,
Purchaser has conducted studies on the Property to determine the environmental
condition of the Property. By Purchaser's execution of this Agreement, Purchaser
shall be deemed to have accepted the Property at Closing in an AS IS CONDITION
WITH ALL FAULTS, subject to the provisions of Section 11 hereof. Seller makes no
representations or warranties as to the physical condition of the Property, and
specifically Seller does not warrant against latent defects or defects of any
kind or nature.
(c) Purchaser hereby indemnifies and holds Seller harmless
from any loss, damage, cost or expense incurred by Seller and arising (directly
or indirectly) out of the activities at the Property by Purchaser or its
designated representatives, including any loss, damage, cost or expense arising
out of damage to the Property or personal injury. Notwithstanding the foregoing,
Purchaser shall not indemnify Seller nor hold Seller harmless on account of any
existing environmental matters discovered as a result of Purchaser's due
diligence. This indemnity shall survive Closing and any termination of this
Agreement prior to Closing. Purchaser agrees that all information received from
Seller is Seller's confidential work product unless otherwise indicated in
writing, unless the Closing occurs, or unless such information is already
public, and
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Purchaser agrees that it will maintain the confidentiality of all information
received as set forth in Section 20 hereof.
9.2 Title or Survey Exceptions. Purchaser, at its own cost and
expense, has ordered, received and reviewed, and delivered to Seller, a title
commitment covering the Property (the "Title Commitment"), and an updated survey
on the Property prior to the Effective Date. Simultaneously with Purchaser's
execution hereof, Purchaser shall notify Seller of such objections as Purchaser
may have to anything contained on the survey or in the Title Commitment. Such
objections shall not include any exceptions to title set forth in Schedule B -
Section 2 to the Title Commitment which are set forth on Schedule D annexed
hereto. Any title or survey matter so objected to by Purchaser are herein
referred to as "Objections." If there are Objections by Purchaser, Seller shall
have the option, at its sole discretion, to satisfy them prior to the Closing
Date and, if Seller so elects and so notifies Purchaser, to adjourn the Closing
Date for up to 60 days to attempt to do so. If Seller elects to satisfy the
Objections, it shall be a condition precedent to Closing that such Objections
are satisfied, which condition precedent Purchaser shall have the right to
waive. If Seller elects not to satisfy the Objections, or if Seller is not
successful in satisfying such Objections, as the case may be, then Seller shall
deliver as soon as practicable written notice of such circumstance to Purchaser
and Purchaser shall, within five (5) Business Days after receipt thereof, either
(i) waive the Objections and accept such title as Seller is able to convey and
by such waiver of the Objections Purchaser shall be deemed to have waived any
and all claims and/or causes of action against Seller for damages or any other
remedies relating to the Objections or any other matter relating to title to the
Property, or (ii) terminate this Agreement, in which event the Deposit shall be
returned to Purchaser and the parties hereto shall be released of further
liability hereunder except as otherwise provided herein. Any Objections waived
by Purchaser under the foregoing provisions shall be deemed to be Permitted
Encumbrances. Notwithstanding any provision of this Section 9.2 to the contrary,
Seller shall be required to remove prior to the Closing Date any Objection that
is a monetary lien placed on the Property by Seller or any judgment lien against
Seller (either by payment, by causing the Title Company to insure over such
matter or by posting a bond in an amount to cover the estimated cost of removing
the same).
9.3 Encumbrances Subsequent to Inspection Period. In the event that,
during the period between the End of the Inspection Period and the Closing Date,
title to the Property
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should become affected by any encumbrance, lien, outstanding interest or
question of title that is not a Permitted Encumbrance, that is not disclosed by
the Title Commitment or survey described in Section 9.2 and that is not created
or caused to be created by Purchaser or by any Tenant (a "New Objection"), then,
provided that the New Objection is capable of being satisfied by the payment of
a sum certain (i.e., determinable with certainty by Seller), Seller may (but
shall not be obligated to) elect (by notice to Purchaser) to remove such New
Objection either by payment on or prior to Closing, by causing the Title Company
to insure over such encumbrance or by posting a bond in an amount to cover the
estimated cost of removing the same, and Seller shall be entitled, for such
purpose, to postpone the Closing Date for a reasonable period of time. In the
event that Seller elects not to remove such New Objection, Seller shall so
notify Purchaser as soon as practicable, whereupon Purchaser shall elect, by
giving Seller notice thereof within five (5) days of receiving Seller's notice,
either (i) waive the New Objection and accept such title as Seller can convey
notwithstanding the existence of any such New Objection, or (ii) terminate this
Agreement. In the event that Seller elects to remove such New Objection but is
unable to do so within sixty (60) days after the End of the Inspection Period,
then either party hereto may elect to terminate this Agreement by giving the
other party written notice thereof; provided, however, that if Seller elects to
terminate this Agreement under this sentence, Purchaser shall have the right to
nullify such election by notifying Seller (within five (5) Business Days after
receipt of such termination notice from Seller) that Purchaser will accept any
such New Objection and close hereunder. If this Agreement is terminated pursuant
to the provisions of this Section 9.3, then the Deposit shall be returned to
Purchaser and the parties hereto shall be released of any further liability
hereunder except as otherwise provided herein. Any title matter waived by
Purchaser under this Section 9.3 shall be deemed a Permitted Encumbrance.
Notwithstanding any provision of this Section 9.3 to the contrary, Seller shall
be required to remove prior to the Closing Date any New Objection that is a
monetary lien placed on the Property by Seller or any judgment lien against
Seller (either by payment, by causing the Title Company to insure over such New
Objection or by posting a bond in an amount to cover the estimated cost of
removing the same).
9.4 Representations and Warranties True. It shall be a condition of
Purchaser's obligation to close hereunder that Seller's representations and
warranties set forth in Section 15 shall be true and correct in all material
respects on the Closing Date. In the event that Purchaser believes that Seller's
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representations and warranties set forth in Section 15 are not true and correct
in all material respects on or prior to the Closing Date, Purchaser may deliver
notice thereof to Seller, which notice shall (i) specify which representation
and warranty is believed not to be true and (ii) provide evidence of the untruth
of the representation and warranty and of its materiality. Seller shall have
five (5) days from its receipt of Purchaser's notice described in the preceding
sentence to notify Purchaser that Seller (a) will attempt to cure such failed
representation or warranty within a period not to exceed sixty (60) days, in
which event the Closing Date shall be extended by sixty (60) days or such lesser
period of time as may be elected by Seller, or (b) does not elect to cure such
alleged failed representation or warranty. In the event that Seller either (x)
elects to cure pursuant to the provisions of clause (a) of the preceding
sentence but has not effected such cure on or before the extended Closing Date
or (y) does not elect to cure pursuant to the provisions of clause (b) of the
preceding sentence, then Purchaser may terminate this Agreement by giving notice
thereof to Seller within five (5) Business Days after Purchaser receives notice
of either (x) or (y) above, in which event the Deposit shall be returned to
Purchaser and the parties hereto shall be relieved of any further liability
hereunder except as otherwise provided herein. Notwithstanding any provision to
the contrary herein, if Purchaser proceeds to Closing and David Parisier, as
Purchaser's representative, has actual knowledge of any uncured breach of a
representation and warranty made by Seller in Section 15, Purchaser shall be
deemed to have waived any remedy for Seller's breach of such representation or
warranty.
9.5 Estoppel Certificates. Seller shall use reasonable efforts to
obtain from each Tenant an estoppel certificate, dated no earlier than April 10,
1998, substantially in the form of Exhibit F hereto, it being agreed that
Purchaser will accept as conforming to Exhibit F an estoppel certificate in the
form (or containing the statements) contemplated under each Tenant's Lease or as
may required by law or regulation (as, for example, in the case of a
governmental tenant) ("Estoppel Certificate"). It shall be a condition of
Purchaser's obligation to close hereunder that Seller deliver at Closing
Estoppel Certificates signed by Tenants occupying at least seventy-five percent
(75%) of the leased office space in the Building (the "Required Tenants"). If a
Tenant occupies less than 5,000 square feet of office space in the Property and
such Tenant delivers an Estoppel Certificate not conforming to the requirements
of this Section because of statements in the Estoppel Certificate relating to
the operation or physical condition of the Building, then such Tenant shall
nevertheless be included in the
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calculation of the foregoing 75% threshold of leased office space in the
Building. Furthermore, an Estoppel Certificate shall be deemed to conform to the
requirements of this Section if the facts set forth therein are substantially
consistent with the terms of such Tenant's Lease and there is no statement
asserting a material default (not relating to the operation or physical
condition of the Building) on the part of the Seller, as landlord, under such
Lease. If Seller is not able to obtain Estoppel Certificates consistent with the
foregoing from the Required Tenants prior to the Closing Date, the Closing Date
may, at Seller's or Purchaser's option, be adjourned for thirty (30) days in
order to give Seller the opportunity to acquire Estoppel Certificates consistent
with the foregoing from the Required Tenants. Seller does not warrant or
represent that any particular Tenant will be a tenant of the Property on the
Closing Date, and it shall not be a condition of Closing that all Tenants of the
Property on the Effective Date shall continue to be tenants on the Closing Date;
provided, however, that if Tenants occupying (in the aggregate) more than 15,000
square feet of office space in the Building as of the Effective Date vacate
their demised premises prior to the Closing Date in violation of their Leases
and are in default in the payment of Basic Rent under their Leases, Purchaser
shall not be obligated to close. To the extent that a statement in an Estoppel
Certificate delivered to Purchaser at Closing covers a subject matter that is
the same as the subject matter of a representation or warranty of Seller
hereunder, such representation or warranty of Seller shall be deemed superceded
by such Estoppel Certificate and shall have no further force or effect. A
failure to obtain Estoppel Certificates consistent with the provisions of this
Section from the Required Tenants shall not be deemed a default of Seller's
obligations hereunder and will not give rise to the remedies of Purchaser
contained in clauses (ii) or (iii) of Section 13.1. In the event that an
Estoppel Certificate does not conform to the requirements of this Section,
Seller shall have a reasonable period to cure the defect or defects therein (not
to exceed thirty (30) days), and the Closing Date shall be extended in order to
allow Seller time to effectuate such cure.
9.6 Other Conditions to Closing. It shall be a further condition of
Purchaser's obligation to close hereunder (which condition may be waived by
Purchaser) as follows:
(a) Seller shall have performed all covenants and obligations
undertaken by Seller herein in all material respects.
(b) Seller shall have delivered to Purchaser all of the
documents provided herein for said delivery.
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9.7 Approvals and Permits not a Condition to Purchaser's
Performance. Purchaser's duty to perform is expressly not contingent upon
Purchaser's ability to obtain (i) any governmental or quasi-governmental
approval as to changes or modifications in use or zoning or modification to any
existing land use restriction, (ii) service provider consents to assignments of
any Service Contracts or (iii) financing of any portion of the Purchase Price
from any source.
10. Brokerage.
Seller and Purchaser expressly acknowledge that Cassidy &
Pinkard/Sonnenblick Goldman (the "Broker") is due a commission for this
transaction upon the consummation of the sale of the Property in accordance with
this Agreement, and the same shall be paid by Seller in accordance with the
provisions of a separate agreement between Seller and the Broker. Purchaser
represents that it has not engaged any brokers in this transaction. As to any
broker other than the Broker, Seller and Purchaser agree to hold each other
harmless and indemnify each other from and against any and all claims, demands,
loss or damage (including reasonable attorneys' fees, court costs and amounts
paid in settlement of any claims) arising out of a claim or demand for any
brokerage commission, fee or other compensation due or alleged to be due as a
result of the indemnifying party's actions in connection with the transaction
contemplated by this Agreement. The provisions of this Section 10 shall survive
the Closing Date or termination of this Agreement prior to the Closing Date for
any reason whatsoever.
11. Risk of Casualty and Condemnation Pending Closing.
(a) If, prior to the Closing Date, all or part of the Property is
damaged by fire or by any other cause whatsoever, Seller shall promptly give
Purchaser written notice of such damage and shall thereafter (to the extent
practical) give Purchaser written notice of its estimated cost of repairing such
damage (such notice to be given as soon as practicable) and advising Purchaser
that based upon such cost, Purchaser shall be obligated to make an election as
provided in this Section 11. If the cost of repairing such damage is less than
Three Hundred Thousand Dollars ($300,000) (as determined by Seller's independent
insurer), then (i) Purchaser shall at Closing receive, to the extent such sums
have not been expended on repair work, the amount of the deductible plus all
insurance proceeds payable as a result of such loss; (ii) this Agreement shall
continue in full force and effect with no reduction in the
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Purchase Price and (iii) Seller shall have no obligation to repair such damage.
If the cost of repairing damage from such casualty is Three Hundred Thousand
Dollars ($300,000) or more (as determined by Seller's independent insurer), then
Purchaser shall have the right, for a period of ten (10) days from the date of
notice of the amount of damage caused by the casualty, to terminate this
Agreement by giving written notice of termination to Seller within such period.
Upon such termination, the Deposit shall be returned to Purchaser and the
parties hereto shall be released of any further liability hereunder except as
otherwise provided herein. If Purchaser fails to notify Seller within such
period of Purchaser's exercise of its right to terminate this Agreement, then
Purchaser shall be deemed to have terminated this Agreement, in which event the
foregoing provisions of this Section 11(a) regarding a termination by Purchaser
shall apply. If the cost of repairing damage from such casualty is Three Hundred
Thousand Dollars ($300,000) or more (as determined by Seller's independent
insurer), and Purchaser notifies Seller (within a period of ten (10) days from
the date of notice of the amount of damage caused by the casualty) that
Purchaser elects to continue this Agreement, then the parties shall proceed to
Closing and, to the extent such sums have not been expended on repair work
performed upon Purchaser's consent, not to be unreasonably withheld, all
insurance proceeds received by Seller as a result of such casualty loss plus the
amount of the deductible shall be paid to Purchaser at Closing. If such proceeds
have not yet been received by Seller, then Seller's rights to such proceeds
shall be assigned to Purchaser at Closing upon payment of the full Purchase
Price to Seller by Purchaser, less the amount of Seller's deductible, and Seller
shall have no obligation to repair such damage.
(b) If, prior to the Closing Date, any condemnation or eminent
domain proceedings shall be threatened in writing or commenced by any competent
public authority against the Property, Seller shall promptly give Purchaser
written notice thereof. Within ten (10) Business Days after receipt of notice of
the written threat or commencement of any such proceedings from Seller and in
the event that the taking of such property shall materially interfere with the
operation of the Property, Purchaser shall have the right to terminate this
Agreement by giving written notice to Seller to that effect within ten (10)
Business Days from the date Purchaser receives notice of the proceedings or
written threat. If this Agreement is terminated by Purchaser as aforesaid, then
the Deposit shall be returned to Purchaser and the parties hereto shall have no
further liability hereunder except as otherwise provided herein. In the event
Purchaser fails to notify Seller within such period of
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Purchaser's exercise of its right to terminate this Agreement, then Purchaser
shall be deemed to have terminated this Agreement, in which event the foregoing
provisions of this Section 11(b) regarding a termination by Purchaser shall
apply. Purchaser shall also have the right, in the circumstance described above
in this Section 11(b), to accept the Property (by notice to Seller given within
the ten (10)-Business Day period aforesaid) subject to the condemnation
proceedings or written threat without abatement of the Purchase Price. In the
event that Purchaser elects to accept the Property in accordance with the
foregoing provisions of this Section 11(b), or the taking of a portion of the
Property shall not materially interfere with the operation of the Property,
Purchaser shall accept the Property subject to the proceedings or written threat
of condemnation without abatement of the Purchase Price, whereupon any award
(minus any reasonable legal fees incurred by Seller in connection therewith)
shall be paid to Purchaser and Seller shall deliver to Purchaser at Closing all
assignments and other documents reasonably requested by Purchaser to vest such
award in Purchaser. For purposes of this Section 11(b), a taking shall be deemed
to materially interfere with the operation of the Property if the Building or
any portion thereof shall be taken, if the taking shall have any material effect
on any ingress or egress, or if a portion of the parking for the Property shall
be taken such that the remaining parking area does not comply with applicable
building or zoning law.
12. Notices and Other Communications.
12.1 Manner of Giving Notice. Each notice, request, demand, consent,
approval, objection or other communication (hereafter in this Section 12
referred to collectively as "notices" and referred to singly as a "notice")
which Seller, Purchaser or Escrow Agent is required or permitted to give
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given if hand delivered with receipt therefor, or sent by Federal Express
or other overnight courier service. Any such notice shall be deemed given when
received or when delivery is refused. The records of the courier service shall
be conclusive with respect to the date of receipt or refusal of delivery.
12.2 Addresses for Notices. All notices shall be addressed to the
parties at the following addresses:
(1) if to Purchaser: 11 Commerce Drive, Cranford, New Jersey
07016, with separate notice to the attention of Roger W. Thomas, Esq. and David
Parisier, with an additional separate
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notice to go to Pryor, Cashman, Sherman and Flynn, 410 Park Avenue, New York, NY
10022, Attention: Andrew S. Levine, Esq.
(2) if to Seller: c/o Quadrangle Development Corporation, 1001
G Street, N.W., Suite 700, Washington, D.C. 20001, Attention: Legal Department,
with a copy to: The Taylor Simpson Group, One Rockefeller Plaza, Twenty-Third
Floor, New York, New York 10020, Attention: Paul E. Taylor III and Jeffrey
Feldman, Esq.
Either party may, by notice given pursuant to this Section 12,
change the person or persons and/or address or addresses, or designate an
additional person or persons or an additional address or addresses, for its
notices.
13. Default and Remedies.
13.1 Purchaser. If Seller fails to perform any of its obligations or
agreements contained herein in any material respect and if Purchaser is not then
in default of any of its obligations and agreements contained herein, then
Purchaser may elect one of the following as Purchaser's sole and exclusive
remedy: either (i) terminate this Agreement by giving notice of termination and
the reasons therefor to Seller, in which event neither Seller nor Purchaser
shall have any further obligations or liabilities one to the other except as
otherwise provided herein and the Deposit shall be returned to Purchaser; or
(ii) hereby waiving all other actions, rights or claims for damages, Purchaser
may bring an equitable action for specific performance of the terms of this
Agreement for conveyance of the Property to Purchaser; or (iii) in the event
Seller wilfully and intentionally conveys title to a third party in violation of
this Agreement, in lieu of the remedy of specific performance, Purchaser, upon
proper proof, may assert a claim or claims for compensatory damages in an amount
not to exceed Three Hundred Eighty-five Thousand Dollars ($385,000) in the
aggregate.
13.2 Seller. If Purchaser fails to close on the purchase of the
Property when required to do so under the provisions hereof, and Seller is not
then in default of any of its obligations or agreements contained herein in any
material respect, then Seller's sole remedy hereunder shall be to terminate this
Agreement and to receive the Deposit as liquidated damages, and thereafter
Seller and Purchaser shall have no further obligations or liabilities one to the
other except as otherwise provided herein. Seller's right to receive the Deposit
as liquidated damages is agreed to due to the difficulty, inconvenience and
uncertainty of ascertaining actual damages for
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such breach by Purchaser, and Purchaser agrees that the same is a reasonable and
fair estimate of damages.
13.3 Legal Fees. In any action or proceeding brought to enforce a
party's remedies under this Agreement, the prevailing party shall be entitled to
reimbursement of its reasonable legal fees and expenses.
13.4 Documents. Within five (5) Business Days after any termination
of this Agreement in accordance with the foregoing provisions of this Section
13, or pursuant to any other provision of this Agreement, Purchaser shall
deliver to Seller, without charge, all documents or studies prepared by third
party environmental, structural and mechanical engineers whose reports are not
otherwise confidential or proprietary, and all documents provided to Purchaser
by Seller or Seller's agents.
14. Environmental Condition.
In addition to, and not by way of limitation of, the sale of the
Property on an AS IS CONDITION WITH ALL FAULTS basis under this Agreement,
Purchaser agrees that Seller makes no representations or warranties whatsoever
to Purchaser regarding the presence or absence of hazardous or toxic materials
or chemicals in, at, or under the Property, except as otherwise provided in
Section 15.9 hereof. During the Inspection Period, Purchaser has made such
studies and investigations, conducted such tests and surveys and engaged such
specialists as Purchaser deemed appropriate (and in the manner described in
Section 9.1 hereof) to fairly evaluate the Property and its environmental risks.
By its execution of this Agreement, Purchaser hereby releases Seller from any
and all liability to Purchaser and Purchaser's successors in interest
attributable to the presence, discovery, or removal of any hazardous or toxic
materials or chemicals in, at, or under the Property, subject to the provisions
of Section 15.9 hereof. Notwithstanding anything herein to the contrary, the
agreements of Purchaser set forth in this Section 14 shall survive the Closing
and shall be enforceable at any time.
15. Seller's Representations and Warranties
Seller hereby represents and warrants to Purchaser the following:
15.1 United States Person. Seller is a "United States person" within
the meaning of Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code
of 1986, as amended.
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15.2 Management Agreement. On the Closing Date, there will be no
agreement in effect for the management of the Property nor will there be any
exclusive leasing agency agreement applicable to the Property.
15.3 Condemnation. To the best of Seller's knowledge, Seller has not
received notice of any actual or threatened condemnation proceeding or special
assessment with regard to the Property.
15.4 Litigation. To the best of Seller's knowledge, there are no
actions, suits or other litigation (including governmental proceedings) pending
or threatened in writing against Seller that would materially and adversely
affect the Property, or its continued operation, or that would materially and
adversely affect the ability of Seller to perform its obligations under this
Agreement, except as set forth on Schedule F.
15.5 Seller's Authority.
As of the Closing Date:
(a) Seller has the full right, power and authority and
has taken all requisite action to enter into this Agreement, to sell the
Property and to carry out its obligations as set forth hereunder.
(b) No consent or approval of any person, entity or
governmental agency or authority is required with respect to the execution and
delivery of this Agreement by Seller or the consummation by Seller of the
transaction contemplated hereby or the performance by Seller of its obligations
hereunder.
(c) There are no attachments, executions, assignments
for the benefit of creditors, receiverships, conservatorship or voluntary or
involuntary proceedings in bankruptcy or pursuant to any debtor relief laws
filed by Seller or against Seller.
(d) Seller is the sole owner of the Property.
15.6 Leases. To Seller's knowledge, Schedule B attached hereto sets
forth a true, correct and complete list of all Leases as of the Effective Date.
Copies of such Leases have been initialed by the parties and delivered to
Purchaser. To
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Seller's knowledge, the Leases constitute all of the leases, tenancies or
occupancies affecting the Building on the Effective Date to which Seller is a
party, and, except as provided in the Leases or as may be contained in any
Permitted Encumbrance, there are no agreements to which Seller is a party which
confer on any Tenant or any other person or entity any rights of possession with
respect to the Property. To Seller's knowledge, Seller has not received, within
the two hundred seventy (270)-day period prior to the Effective Date, written
notice from any Tenant asserting that Seller, as landlord, is in default under
such Tenant's Lease, which default remains substantially uncured as of the
Effective Date.
15.7 Service Contracts. To Seller's knowledge, there are no service
contracts affecting the Property or the operation thereof, except the Service
Contracts.
15.8 Notices of Violations. To Seller's knowledge, within the two
hundred seventy (270)-day period prior to the Effective Date, Seller has not
received a notice of any material violations, or of any notices, suits,
investigations or judgments relating to any material violations, of any laws,
ordinances or regulations affecting the Property. If Seller receives any such
notice after the Effective Date, Seller will promptly deliver a copy of such
notice to Purchaser.
15.9 No Remediation Program. To Seller's knowledge, no clean-up or
remediation program that may have been required by any environmental law
applicable to the Property is ongoing in respect of the Property.
All references in this Agreement to the "knowledge" of Seller shall refer only
to actual knowledge of the Designated Employees (as hereinafter defined) and
shall not be construed to refer to the knowledge of any other officer, agent or
employee of Seller or any Affiliate thereof or to impose upon such Designated
Employees any duty to investigate the matter to which such actual knowledge, or
the absence thereof, pertains, including the contents of the files, documents
and materials made available to or disclosed to Purchaser. Seller affirmatively
states that neither it nor the Designated Employees has reviewed such files,
documents, or materials and that Seller's representations and warranties
hereunder are not based on the contents of any such files, documents, materials.
For purposes of this Agreement, the term "Designated Employees" shall refer only
to Christopher D. Gladstone.
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16. Purchaser's Authority.
Purchaser hereby represents and warrants to Seller that the
following statements are true and correct as of the date hereof and shall be
true and correct as of the Closing Date:
(a) Purchaser has the full right, power and authority and has
taken all requisite action to enter into this Agreement, to purchase the
Property and to carry out its obligations as set forth hereunder.
(b) Unless otherwise provided herein, no consent or approval
of any person, entity or governmental agency or authority is required with
respect to the execution and delivery of this Agreement by Purchaser or the
consummation by Purchaser of the transaction contemplated hereby or the
performance by Purchaser of its obligations hereunder.
(c) There are no attachments, executions, assignments for the
benefit of creditors, receiverships, conservatorship or voluntary or involuntary
proceedings in bankruptcy or pursuant to any debtor relief laws filed by
Purchaser or against Purchaser.
17. Third Party Beneficiaries.
Nothing in this Agreement is intended or shall be construed to
confer upon or to give to any person, firm or corporation other than the parties
hereto any right, remedy, or claim under or by reason of this Agreement. All
terms and conditions in this Agreement shall be for the sole and exclusive
benefit of the parties hereto. This Section 17 shall survive the Closing or
termination of this Agreement prior to the Closing Date for any reason
whatsoever.
18. Further Assurances.
Purchaser and Seller each agree to execute and deliver to the other
such further documents or instruments as may be reasonable and necessary in
furtherance of the performance of the terms, covenants and conditions of this
Agreement; provided, however, that no such documents or instruments shall
contain any warranty or representation from, or recourse to, Seller. This
Section 18 shall survive the Closing Date.
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19. No Assignment.
Purchaser shall not assign its rights or delegate its duties under
this Agreement, in whole or in part, without the prior consent of Seller, which
Seller may withhold in its sole and absolute discretion. Consent by Seller to
any assignment or delegation of Purchaser's rights or duties under this
Agreement shall not relieve Purchaser of its obligations under this Agreement,
regardless of whether such assignment includes an assumption of liability by
Purchaser's assigns. Notwithstanding the foregoing, Purchaser shall have the
right to assign this Agreement to Mack-Cali Realty, L.P. (which is the entity
which controls Mack-Cali Realty Acquisition Corp.), or any other entity which is
controlled by Mack-Cali Realty, L.P., directly or indirectly, provided that
Purchaser provides Seller with evidence that the assignee is such a controlled
entity.
20. Confidentiality
Prior to Closing and except as may reasonably be required in
connection with the consummation of the transactions contemplated hereby, or as
required by law or opinion of counsel, each party shall keep confidential the
details of the transactions contemplated hereby and all documents and other
information provided to the other party, and will not identify Purchaser or
Seller of the Property without the prior consent of the other. Each party shall
instruct all of its employees, officers, Affiliates, professionals and others
engaged by it in connection with the transactions contemplated hereby to abide
by the foregoing confidentiality provisions.
21. Assumption or Cancellation of Service Contracts.
Purchaser has notified Seller in writing as to which of the Service
Contracts Purchaser desires to assume. Any Service Contracts that are assignable
and that Purchaser has elected to assume shall be included in the assignment and
assumption described in Section 7.1(b) and any costs or fees charged by the
service provider in connection with such assignment shall be paid by Purchaser
at or prior to Closing. Any Service Contract that Purchaser does not elect to
assume shall be terminated by Seller on or before the Closing Date if such
termination may be accomplished without payment of any fee therefor. Seller
shall have no obligation to terminate any Service Contract that is not
terminable by its terms on or before the Closing Date without payment and Seller
shall have no obligation to pay any fees in respect of contract termination. If
Purchaser elects to terminate any Service Contract whose termination causes
payment
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therefor, Seller shall obtain a credit at closing for the full amount of such
payment. If any Service Contract is to be terminated by Seller under the
foregoing provisions, Seller shall give the service provider a termination
notice as soon possible after receiving notice from Purchaser that Purchaser
does not elect to assume such Service Contract. If, because of the termination
provisions in such Service Contract, it cannot be terminated prior to the
Closing Date, Purchaser shall assume such Service Contract at Closing, but only
in respect of any period that may remain on such Service Contract after the
delivery of such termination notice by Seller.
22. Exclusivity.
So long as this Agreement has not been terminated, Seller agrees not
to negotiate with, discuss or further pursue any other offers or proposals
relating to the sale of the Property with any party other than Purchaser.
23. Miscellaneous.
23.1 Captions and Execution. The captions in this Agreement are
inserted for convenience of reference only and in no way define, describe or
limit the scope or intent of this Agreement or any of the provisions hereof.
This Agreement shall not be binding or effective until properly executed and
delivered by Seller and Purchaser. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same Agreement, and it shall not be necessary
that each party to this Agreement execute each counterpart.
23.2 Press Release. Seller and Purchaser each agrees that before the
Closing Date it will not issue any press release, advertisement or other public
communication with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party hereto, except to the extent
required by law. If Seller or Purchaser is required by law to issue such a press
release or other public communication before the Closing Date, at least one
Business Day before the issuance of the same such party shall deliver a copy of
the proposed press release or other public communication to the other party
hereto for its review and approval, which approval shall not be unreasonably
withheld or delayed.
23.3 Recording. This Agreement shall not be recorded in any office
legally established for the purpose of giving public notice of real estate
records. If Purchaser records or
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causes this Agreement to be recorded, Purchaser shall be in default hereunder,
giving Seller the right to terminate this Agreement, to retain the Deposit and
collect liquidated damages according to the terms of Section 13.2 hereof, or to
exercise any other rights and remedies available by reason of Purchaser's
default. Purchaser hereby appoints Seller as its true and lawful attorney in
fact for the purpose of executing any form of release or termination required to
remove this Agreement from public record.
23.4 Amendment and Merger. This Agreement may not be changed or
terminated orally. This Agreement shall be deemed to merge with the conveyance
of title and all covenants, agreements, indemnities, representations and
warranties shall not survive the Closing except as may be otherwise specifically
provided herein.
23.5 Binding. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, their respective successors, personal
representatives, heirs and permitted assigns.
23.6 Governing Law and Limitation Date. This Agreement shall be
governed by and construed in accordance with the laws of the District of
Columbia. Purchaser and Seller agree that any claim or litigation arising out of
this Agreement, or the transaction contemplated hereby, shall be made or brought
no later than December 31, 1998 ("Limitation Date"), and that any litigation
shall be brought in the courts of the District of Columbia or in the courts of
the United States for the District of Columbia, Seller and Purchaser consenting
to the venue of such courts. The warranties, representations and agreements of
Seller and Purchaser set forth herein shall survive until the Limitation Date,
and no action based thereon shall be commenced after the Limitation Date.
Notwithstanding the foregoing, (i) Section 14 (Environmental Condition) shall
survive both the Closing and the Limitation Date and shall not merge into the
special warranty deed delivered pursuant to Section 7.1(a), but shall be
enforceable at any time by Seller, and (ii) the obligations of the parties under
Section 5.7 hereof shall survive until April 30, 1999.
23.7 Entire Agreement. This Agreement contains the entire agreement
between the parties and any and all prior understandings and agreements are
merged herein and any agreement hereafter made shall be ineffective to change,
modify, or discharge this Agreement in whole or in part unless such agreement
hereafter made is in writing and signed by the parties hereto.
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23.8 Time of Essence. Purchaser and Seller each agree that time is
of the essence with respect to this Agreement.
23.9 No Waiver. Except as otherwise provided in this Agreement,
failure by Purchaser or Seller to insist upon or enforce any rights herein shall
not constitute a waiver thereof.
23.10 Partial Invalidity. 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 enforceable to the
fullest extent permitted by law.
23.11 Waiver of Jury Trial. Seller and Purchaser waive trial by jury
in any action, proceeding or counterclaim brought by either of them against the
other on any matter arising out of or in any way connected with this Agreement.
23.12 No Cross-Default. If Purchaser, or any Affiliate, is also the
purchaser under a Purchase and Sale Agreement (this Agreement and such Purchase
and Sale Agreement being collectively referred to as the "Agreements") with 1709
L.P., then (i) any default by the seller under such other Agreement shall not be
a default hereunder, (ii) any default by Seller hereunder shall not be a default
under such other Agreement, (iii) any default by Purchaser and Purchaser's
failure to close under either of the Agreements shall be deemed a default under
both of the Agreements and Purchaser shall forfeit its Deposit and the deposits
under both Agreements, at Seller's option, (iv) if there is any default and
failure to close by Seller under either one of the Agreements, Purchaser shall
still have the right (but not the obligation) to close on the Agreement not
involved in Seller's default and failure to close, and (v) if either one of the
Agreements is terminated by virtue of a failure of a condition precedent or a
casualty giving a right of termination under one of the Agreements, the
obligations of Seller and Purchaser under the Agreement where the failed
condition is not applicable or the casualty has not so occurred shall not be
affected.
23.13 Soil Characteristics. The characteristics of the soil of the
Property, as described by the Soil Conservation Service of the U.S. Department
of Agriculture in the Soil Survey Book of the District of Columbia (Area 11),
published in July, 1976, and as shown on the soil maps of the District of
Columbia
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at the back of that publication is Urban Land. For further information,
Purchaser may contact the Soil Testing Laboratory, the District of Columbia
Department of Environmental Services, or the Soil Conservation Service of the
U.S. Department of Agriculture. The foregoing is set forth pursuant to the
District of Columbia Code and is not intended as, and should not be construed
as, limiting the conditions set forth herein with respect to Purchaser's
investigations, tests and studies and the absence of representations and
warranties by Seller with respect to the condition of the Property.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
SELLER:
14L ASSOCIATES
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By /s/ Christopher D. Gladstone,
------------------------------
Christopher D. Gladstone,
President
PURCHASER:
MACK-CALI REALTY ACQUISITION CORP.
By /s/ [ILLEGIBLE]
--------------------------------
Name:
Title:
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SCHEDULE A
Legal Description
Lot numbered Fifty-two (52) in Square numbered Two Hundred Seventeen
(217), as per Plat recorded in the Office of the Surveyor for the District of
Columbia in Liber 176 at folio 157.
SCHEDULE B
Leases and Security Deposits
1. Gourmet Deli and Salad. Inc. -- Retail Lease dated November 27, 1990;
First Amendment dated February 25, 1991; Second Amendment dated as of
February 17, 1998. This lease includes 537 square feet of storage space.
2. Bishop, Cook Purcell & Reynolds -- Office Lease dated August 14, 1987;
First Amendment dated January 27, 1988; Second Amendment dated February
2, 1988; Third Amendment dated March 14, 1989; Fourth Amendment dated
September 3, 1997. Tenant is now known as Winston & Strawn.
3. Winston & Strawn -- Storage Space Lease dated April 1, 1996 (3,042 square
feet); Storage Space Lease dated April 1, 1996 (56 square feet); Storage
Space Lease dated March 2, 1988 (655 square feet); and Storage Space Lease
dated May 15, 1997 (787 square feet).
4. General Services Administration -- Office Lease dated May 11, 1994:
Supplemental Lease Agreement No.1 dated April 12, 1995; Supplemental Lease
Agreement No. 2 dated May 6, 1996; Supplemental Lease Agreement No. 3
dated April 3, 1997 (signed by Tenant only).
5. William Duvall -- Retail Lease dated April 15, 1994; First Amendment dated
November 22, 1994.
6. District of Columbia Retirement Board -- Office Lease dated June 29, 1990.
7. Shane Floral, Inc. -- Retail Lease dated July 10, 1989; Addendum dated
July 10, 1989; First Amendment dated December 12, 1989; Second Amendment
dated April 17, 1996; Third Amendment to Lease dated April 12, 1996; and
Consent to Assignment and Agreement dated February 27, 1998 assigning the
lease from Florescence.
8. Dow Jones & Company, Inc. -- Office Lease dated July 23, 1994; First
Amendment dated August 31, 1994; Second Amendment dated December 29, 1994;
and Assignment of Lease dated May 17, 1994 assigning the lease to Dow
Jones Telerate, Inc.; Third Amendment to Lease dated July 31, 1996; and a
Rooftop License Agreement dated August 28, 1995.
9. ERISA Industry Committee -- Office Lease dated September 28, 1990; First
Amendment dated June 11, 1995.
10. ERISA Industry Committee -- Storage Space Lease dated April 23, 1997.
11. Ripley Communications, Inc. -- Office Lease dated October 28, 1992; First
Amendment dated November 5, 1996; Second Amendment dated November 5, 1996.
12. Sin Ae Kim, Daniel Chae K. Park and Yong 0. Park -- Retail Lease dated May
25, 1990; Consent to Assignment and Agreement assigning lease from
Extremeties dated December 30, 1993.
13 United Parcel Service -- Commercial Lease dated October 1, 1987; First
Amendment dated February 23, 1988; Second Amendment dated February 28,
1992; Third Amendment dated March 2, 1998.
14. U.S. Postal Service -- Lease dated August 1, 1989.
15. U.S. ASEAN Council for Business and Technology, Inc. -- Office Lease dated
May 19, 1992; First Amendment dated August 24, 1992; Second Amendment to
Lease, undated, that has not yet been signed by Landlord or Tenant.
16. Exercise Facility -- Lease dated November 25, 1988. (TO BE TERMINATED)
17. OuikPark -- Lease dated January 1, 1989
NOTE: The above list does not include Guarantees
Security Deposits as of May 28, 1998:
Less
Principal Accrued Amounts Ending
Tenant Amount Interest Applied Balance
------ ------ -------- ------- -------
1. Extremities $9,578.10 $0.00 $0.00 $9,578.10
2. ERISA Industry $8,453.96 $0.00 $0.00 $8,453.96
3. Gourmet Deli $7,017.50 $0.00 $0.00 $7,017.50
4. US ASEAN Council $8,707.50 $0.00 $0.00 $8,707.50
5. Shane Floral, Inc. $3,000.00 $0.00 $0.00 $3,000.00
6. Ripley Communications $1,210.00 $0.00 $0.00 $1,210.00
7. William V. Duvall $6,060.00 $0.00 $5,035.72 $1,024.28
SCHEDULE C
Service Contracts
Date of
Contractor Services Rendered Contract
- ---------- ----------------- --------
ARC Water treatment January 1, 1998
Browning-Ferris Industries Trash Removal January 1, 1998
Cliffhanger Retail canopy cleaning January 30, 1998
Empire Recycling Recycling January 1, 1998
Fitness Industries Exercise equipment maintenance January 1, 1998
Home Paramount Pest control January 1, 1998
Kastle Systems Electronic security January 1, 1998
Lerch, Bates Elevator inspections January 1, 1998
Oneil M. Banks Air quality surveys January 1, 1998
Positive Services Partners Night cleaning January 1, 1998
Rentokil, Inc. Indoor landscaping January 1, 1998
Schindler Elevator Co. Elevator maintenance April 1, 1998
Service Machine Shop Vane axial fan maintenance January 1, 1998
Valcourt Building Services Window cleaning January 1, 1998
Vance Uniformed Protection
Services Lobby Host October 1, 1998
SCHEDULE D
Permitted Encumbrances
1. Taxes subsequent to March 31, 1998, not yet due and payable.
2. Water rent and sewer service charges subsequent to the closing date, a
lien, not yet due and payable.
3. Agreement(s) with the District of Columbia relating to projection of
sub-surface vaults into public space abutting the property as set forth in
instrument recorded September 11, 1985, as Instrument No. 33520.
4. Specifications of the National Capital Planning Commission Downtown Urban
Renewal Plan/Area recorded April 29, 1969 as Instrument No. 8043 in Liber
12987 at folio 621, among the Land Records of the District of Columbia, as
amended.
5. Rights of parties in possession as commercial tenants only as set forth on
Schedule B.
6. Projections as shown on Plat of Survey of Bernard F. Locraft dated
December 4, 1987, last revised May 13, 1998:
a. Awnings into L Street N.W. and 14th Street, N.W.
b. Minor building projections into L Street, N.W.
SCHEDULE F
Pending Litigation
No pending litigation.
SCHEDULE 5.2(b)
034201 14L Associates Page - 1
14L Associates Detailed Accounts Receivable Date - 5/29/98
As of - 05/29/98
...Address.... .....Document Reference.... .......Balance..... Discount Remark
Number Name Co Ty Number Inv Date Original Open
- ---------- ----------------------- --- -- ------------- -------- -------------- -------------- -------- ---------------------------
22808 DC Retirement Board
073 RD 114387 001 05/01/98 19,995.35 19,995.35 Base Rent - Office
073 RD 114387 002 05/01/98 890.00 890.00 Est. Ep - Office
-------------- ----------- --------
22808 District of Columbia 20,885.35 20,885.35
54148 Enterprise Leasing
073 RI 114602 000 05/01/98 34.36 34.36 3/98 WATER USE-14L GARAGE
-------------- ----------- --------
54148 Enterprise Leasing 34.36 34.36
23018 ERISA
073 RD 114388 003 05/01/98 4.70 4.70 Base Rent - Storage Space
-------------- ----------- --------
23018 The ERISA Industry Commit 4.70 4.70
14138 GEN. SVCS ADMIN.-EEOC
073 RD 114383 001 05/01/98 24,061.42 24,061.42 Base Rent Office
073 RD 114383 002 05/01/98 663.11 663.11 Est EP - Office
-------------- ----------- --------
14138 General Services Administ 24,724.53 24,724.53
25048 GOURMET DELI & SALAD, INC
073 RD 114391 001 05/01/98 989.00 252.02 Est EP - Retail
-------------- ----------- --------
25048 GOURMET DELI & SALAD, INC. 989.00 252.02
37719 Ripley Communications, Inc.
073 RD 107221 001 11/01/97 440.84 12.50 Base Rent - Storage Space
073 RD 111392 001 03/01/98 440.84 .84 Base Rent - Storage Space
-------------- ----------- --------
37719 Mr. Chris Styga 881.68 13.34
14066 Shane Floral, Inc.
073 RD 114382 001 05/01/98 1,485.46 1,485.46 Base Rent - Retail
073 RD 114382 002 05/01/98 35.00 35.00 Est Ep - Retail
-------------- ----------- --------
14066 Shane Floral, Inc. 1,520.46 1,520.46
14774 UNITED PARCEL SERVICE
073 RD 111383 002 03/01/98 1,812.00 25.45 Base Rent - Retail
073 RD 112586 001 04/01/98 18.00 18.00 Est Ep - Retail
073 RD 112586 002 04/01/98 1,812.33 7.78 Base Rent - Retail
073 RD 114384 001 05/01/98 18.00 18.00 Est Ep - Retail
-------------- ----------- --------
14744 UNITED PARCEL SERVICE 3,660.33 69.23
14841 UNITED STATES POSTAL SERVICE
073 RD 114385 001 05/01/98 11,638.67 11,638.67 Base Rent - Retail
073 RD 114385 002 05/01/98 1,354.00 1,354.00 Est Ep - Retail
-------------- ----------- --------
14841 United States Postal Serv 12,992.67 12,992.67
034201 14L Associates Page - 2
14L Associates Detailed Accounts Receivable Date - 5/29/98
As of - 05/29/98
...Address.... .....Document Reference.... .......Balance..... Discount Remark
Number Name Co Ty Number Inv Date Original Open
- ---------- ----------------------- --- -- ------------- -------- -------------- -------------- -------- ---------------------------
24862 Winstron & Strawn
073 RN 114852 001 05/06/98 212.50 212.50 EXTRA HVAC 4/27
073 RN 114853 001 05/06/98 100.00 100.00 EXTRA HVAC 4/27
073 RN 114853 002 05/06/98 100.00 100.00 EXTRA HVAC 4/28
073 RN 114853 003 05/06/98 100.00 100.00 EXTRA HVAC 4/29
073 RN 114888 001 05/06/98 100.00 100.00 EXTRA HVAC 4/25
073 RN 114888 002 05/06/98 250.00 250.00 EXTRA HVAC 4/26
-------------- ----------- --------
24862 Winston & Strawn 862.50 862.50
-------------- ----------- --------
073 14L Associates 66,555.58 61,359.16
-------------- ----------- --------
Grand Total - 66,555.58 61,359.16
SCHEDULE 5.6
New Leases, Amendments to Leases and Broker Commission Agreements
U.S. Asean Council for Business and Technology, Inc. -- A Second Amendment to
Lease has been sent to the Tenant for review and signature, but tenant has not
yet signed the amendment.
Gourmet Deli and Salad, Inc. -- Second Amendment to Lease dated as of February
17, 1998.
Broker Commission Agreement between 14L Associates and The Rome Group for U.S.
ASEAN Council for Business and Technology, Inc. dated May 8, 1998.
EXHIBIT A
DEED
AFTER RECORDING,
PLEASE RETURN TO:
Andrew S. Levine, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
DEED
THIS DEED is made and entered into on this ____ day of June, 1998, by and
between 14L ASSOCIATES, a District of Columbia limited partnership ("Grantor"),
whose address is c/o Quadrangle Development Corporation, 1001 G Street, N.W.,
Washington, D.C. 20001, and MACK-CALI REALTY ACQUISITION CORP., a Delaware
corporation ("Grantee"), whose address is 11 Commerce Drive, Cranford, New
Jersey 07016.
W I T N E S S E T H:
For Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
GRANT, BARGAIN, SELL and CONVEY, with Special Warranty, unto Grantee, its
successors and assigns, in fee simple, the parcel of land located in the
District of Columbia, described on Exhibit A attached hereto.
TOGETHER with all buildings, fixtures and other improvements located in or
on such parcel of land; and
TOGETHER with all easements, rights-of-way, appurtenances, licenses and
privileges belonging or appurtenant to such land; and
TOGETHER with all mineral, gas, oil and water rights, sewer rights, other
utility rights, and development rights now or hereafter allocated or allocable
to such land; and
TOGETHER with all right, title and interest of Grantor in and to any land
lying in the bed of any street, road, avenue or alley, open or closed, adjacent
to such land, to the center line thereof.
TO HAVE AND TO HOLD all of the aforesaid property (the "Property") unto
the use and benefit of Grantee, its successors and assigns, in fee simple
forever.
This conveyance is expressly made subject to easements, covenants,
conditions, agreements, and restrictions of record.
Grantor covenants that it has the right to convey the Property to Grantee
and that Grantor will execute such further assurances of the Property as may be
required.
IN WITNESS WHEREOF, Grantor has caused this Deed to be executed by its
general partner, Q 1400 L.L.C., which has caused this Deed to be executed by its
Managing Member, Quadrangle Development Corporation, which has caused this Deed
to be executed by Christopher D. Gladstone, its President, and its corporate
seal to be affixed hereto, and does hereby constitute and appoint Christopher D.
Gladstone its true and lawful attorney-in-fact for it and in its name to
acknowledge and deliver said Deed on behalf of Quadrangle Development
Corporation, the managing member of Q 1400 L.L.C., the general partner of
Grantor.
GRANTOR:
14L ASSOCIATES
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
----------------------------
Christopher D. Gladstone,
President
-2-
)
) ss:
)
I, ____________________________, a Notary Public for the jurisdiction
aforesaid, do certify that Christopher D. Gladstone, who is personally well
known to me as (or proved by the oath of credible witnesses to be) the person
named as attorney-in-fact in the foregoing and annexed Deed bearing date on the
___ day of June, 1998, personally appeared before me in said jurisdiction and as
attorney-in-fact as aforesaid, and by virtue of the authority vested in him as
aforesaid, acknowledged the same to be the true act and deed of Quadrangle
Development Corporation, the managing member of Q 1400 L.L.C., in its capacity
as the general partner of the Grantor therein.
Given under my hand and official seal on this ___ day of June, 1998.
____________________________________
Notary Public
My Commission Expires:________________
-3-
EXHIBIT B
ASSIGNMENT AND ASSUMPTION OF LEASES AND SERVICE CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SERVICE CONTRACTS (this
"Assignment") is entered into on this ____ day of June, 1998, between 14L
ASSOCIATES, a District of Columbia limited partnership ("Assignor"), whose
address is c/o Quadrangle Development Corporation, 1001 G Street, N.W.,
Washington, D.C. 20001, and MACK-CALI REALTY ACQUISITION CORP., a Delaware
corporation ("Assignee"), whose address is 11 Commerce Drive, Cranford, New
Jersey 07016.
1. Reference to Purchase Agreement. Reference is made to a Purchase and
Sale Agreement dated June ___, 1998 between Assignor, as seller, and Assignee,
as purchaser, pursuant to which Assignor has agreed to sell to Assignee, and
Assignee has agreed to purchase from Assignor, the improved real property and
other assets described therein (the "Purchase Agreement"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings set forth
in the Purchase Agreement.
2. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
grants, transfers and assigns to Assignee all right, title and interest of
Assignor (i) in and to each of the contracts listed on Exhibit A attached hereto
(the "Accepted Contracts"), to the extent assignable, (ii) as landlord in and to
each of the leases listed on Exhibit B attached hereto, including any amendments
and guaranties thereof (the "Leases"), (iii) any and all licenses to occupy
space at the Property and (iv) the security deposits held by landlord under the
Leases. Assignor is not assigning any right to receive Delinquent Rent, and any
Delinquent Rent as of the date hereof shall be collected and paid to Seller to
the extent and in the manner provided by the Purchase Agreement.
3. Assumption. Assignee hereby assumes, and agrees to be bound by, all of
the covenants, agreements and obligations of Assignor (i) under the Accepted
Contracts, and (ii) as landlord under the Leases, that shall arise or be
incurred, or that are required to be performed, on and after the date of this
Assignment, and Assignee further assumes all liability of Assignor for the
proper refund or return of the security deposits actually delivered or credited
to Assignee on the date hereof and held under the Leases if, when and as
required by the Leases or otherwise by law.
4. Indemnity. Assignee agrees to indemnify, defend and hold harmless
Assignor from any loss, cost, claim, liability,
expense or demand of whatever nature under the Leases and Accepted Contracts
arising or accruing as a result of any acts which occur on or after the date
hereof. Assignor agrees to indemnify, defend and hold harmless Assignee from any
loss, cost, claim, liability, expense or demand of whatever nature under the
Leases and Accepted Contracts arising or accruing prior to the date hereof, but
only in respect of any claim under the indemnity contained in this sentence made
by Assignee prior to April 30, 1999.
5. Binding Effect. This Assignment shall inure to the benefit of, and be
binding upon, each of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on
the day and year first above written.
ASSIGNOR:
14L ASSOCIATES
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
----------------------------
Christopher D. Gladstone,
President
ASSIGNEE:
MACK-CALI REALTY ACQUISITION CORP.
By
--------------------------------
Name:
Title:
-2-
EXHIBIT C
ASSIGNMENT OF INTANGIBLE PROPERTY AND WARRANTIES
THIS ASSIGNMENT OF INTANGIBLE PROPERTY AND WARRANTIES (this "Assignment")
is entered into on this ____ day of June, 1998, by 14L ASSOCIATES, a District of
Columbia limited partnership ("Assignor"), whose address is c/o Quadrangle
Development Corporation, 1001 G Street, N.W., Washington, D.C. 20001, for the
benefit of MACK-CALI REALTY ACQUISITION CORP., a Delaware corporation
("Assignee"), whose address is 11 Commerce Drive, Cranford, New Jersey 07016.
1. Reference to Purchase Agreement. Reference is made to a Purchase and
Sale Agreement dated June ___, 1998 between Assignor, as seller, and Assignee,
as purchaser, pursuant to which Assignor has agreed to sell to Assignee, and
Assignee has agreed to purchase from Assignor, the improved real property and
other assets described therein (the "Purchase Agreement"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings set forth
in the Purchase Agreement.
2. Assignment. For good and valuable consideration received by Assignor,
the receipt and sufficiency of which are hereby acknowledged, Assignor hereby
grants, transfers and assigns, without any warranty, representation, or recourse
of any kind, to Assignee all right, title and interest of Assignor in and to (i)
the Intangible Property, and (ii) all warranties or guaranties presently in
effect from contractors, suppliers or manufacturers of personal property
installed in or used in connection with the Property or any work performed or
improvements included as a part of the Property (the "Warranties"). This
Assignment shall not be effective as to any Intangible Property or Warranty
that, by its terms or as a matter of law, cannot be assigned.
3. Binding Effect. This Assignment shall inure to the benefit of, and be
binding upon, each of the parties hereto and their respective successors and
assigns.
[The signature of Assignor is set forth on the next page.]
IN WITNESS WHEREOF, Assignor has executed this Assignment effective as of
the day and year first above written.
ASSIGNOR:
14L ASSOCIATES
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
----------------------------
Christopher D. Gladstone,
President
-2-
EXHIBIT D
NOTICE TO TENANTS
________________, 1998
[Name and Notice Address of Tenant]
RE: Notice of Change of Ownership of
[address]
Dear [Name of Tenant Contact]:
You are hereby notified as follows:
(1) That as of the date hereof, 14L Associates has transferred,
sold, assigned, and conveyed all of its interest in and to
1400 L Street, N. W. (the "Property") to Mack-Cali Realty
Acquisition Corp. (the "New Owner").
(2) Future rental payments with respect to your lease premises at the
Property should be made to the New Owner in accordance with your lease
terms at the following address:
Your security deposit in the amount of $__________ has been transferred to
the New Owner and as such the New Owner shall be responsible for holding the
same in accordance with the terms of your lease.
We have appreciated the opportunity to work with you and serve your space
needs over the years.
Very truly yours,
14L Associates
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
-------------------------
Christopher D. Gladstone,
President
-2-
EXHIBIT D
Notice to Tenants
14L Associates
c/o Quadrangle Development Corporation
1001 G Street, N.W.
Washington, DC 20001
May ___, 1998
Tenant Name
Tenant Address
Re: Sale of 1400 L Street, N.W., Washington, DC
Dear Tenant:
Please be advised that, as of the date hereof, 14L Associates has sold the
referenced premises to M-C Capitol Associates L.L.C. In connection with such
sale, 14L Associates has assigned all of its right, title and interest as
landlord under your lease to M-C Capitol Associates L.L.C. Your security
deposit, if any, has also been assigned to M-C Capitol Associates L.L.C.
You are instructed to pay all rents, additional rents and all other charges and
payments due under your lease as follows:
M-C Capitol Associates L.L.C.
P.O. Box 23229
Newark, New Jersey 07189
You will receive from M-C Capitol Associates L.L.C. monthly invoices for all
rents due under your lease. In order for M-C Capitol Associates L.L.C. to
process your payments quickly and accurately, kindly return the payment stub
attached to each invoice.
In addition, all correspondence relating to the monthly billings should be sent
to Alicia Friedman, M-C Capitol Associates L.L.C., 11 Commerce Drive, Cranford,
New Jersey 07016.
I am please to inform you that, for the immediate future, QDC Property
Management, Inc. is remaining as property manager for the building. We have
appreciated the chance to work with you and serve your space needs over the
years.
Very truly yours,
14L ASSOCIATES
By: Q 1400 L.L.C.,
general partner
By: Quadrangle Development
Corporation, managing member
By:
--------------------------
Christopher D. Gladstone
President
EXHIBIT E
AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of a
United States real property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding of tax is not required
upon the disposition of a United States real property interest by 14L
Associates, a District of Columbia limited partnership ("the Partnership"), the
undersigned hereby certifies the following on behalf of the Partnership:
1. The Partnership is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations); and
2. The Partnership's U.S. employer tax identification number is
52-1398693; and
3. The Partnership's office address is 1001 G Street, N.W., Suite 700,
Washington, D.C. 20001.
The Partnership understands that this certification may be disclosed to
the Internal Revenue Service by transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
The undersigned officer of the Partnership declares that he has examined
this certification and to the best of his knowledge and belief it is true,
correct and complete, and he further declares that he has authority to sign this
document on behalf of the Partnership.
Dated: June ___, 1998.
14L Associates
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
-------------------------
Christopher D. Gladstone,
President
EXHIBIT F
TENANT ESTOPPEL CERTIFICATE
TENANT ESTOPPEL CERTIFICATE
______________, 1998
Mack-Cali Realty Acquisition Corp.
c/o Mack-Cali Realty Corporation
11 Commerce Drive
Cranford, New Jersey 07016
14 L Associates ("Landlord")
c/o Quadrangle Development Corporation
1001 G Street, N.W.
Suite 700W
Washington, DC 20001
Premises: 1400 L Street, N.W., Washington, DC (the "Property")
Ladies and Gentlemen:
The undersigned, as Tenant under that certain lease dated_________________
(the "Lease"), made with 14L ASSOCIATES does hereby certify to Landlord,
Mack-Cali Realty Acquisition Corp. and its assigns and successors (the
"Purchaser") and to any lender or mortgagee of Purchaser with respect to
Purchaser's acquisition of the property of which the Demised Premises (as
hereinafter defined) form a part:
1. That the premises leased by Tenant (the "Demised Premises") pursuant to
the Lease are described as _____ square feet on the _____ floor at the Premises;
2. That the Lease has not been modified, changed, altered or amended in
any respect, except as set forth below, and is the only Lease or agreement
between the undersigned and the Lessor affecting the Demised Premises. If none,
state "none." A true and complete copy of the Lease, together with any and all
modifications, amendments and/or assignments thereto, are annexed hereto as
Exhibit A. There are no subleases for any of the Demised Premises, except
___________;
3. That the full name and current mailing address for Tenant, and the
address for all notices to Tenant, are set forth below:
4. That the Demised Premises have been completed in accordance with the
terms of the Lease and that Tenant has accepted possession of the Demised
Premises. All improvements,
alterations or additions to be constructed on the Demised Premises by Landlord
pursuant to the Lease have been completed and accepted by Tenant. All
contributions now or previously required from Landlord for improvements to the
Demised Premises have been paid in full to Tenant;
5. That the original Lease term began on ____________________ and will
expire on ______________________; that Tenant has paid rent through
____________________; that no rent has been paid by Tenant for more than one
month in advance; that the rent payable under the Lease is the amount of fixed
rent provided thereunder, which is annual fixed rent payable to Landlord of
$____________; that as of the date hereof, additional rent of
$__________________ is payable to Landlord on account of utility costs, real
estate taxes and operating expenses; that the base year for such additional rent
is _______, which has a base amount of $________________ [or the expense stop
for such additional rent is $______/SF]; that there is no claim or basis for an
adjustment thereto; and that the amount of additional rent has been paid through
____________;
6. That Tenant has not given Landlord any notice of any claim arising
under the Lease nor any notice of a default on the part of Landlord under the
Lease which have not been cured. To Tenant's knowledge, there are no defaults by
Landlord under the Lease as of the date hereof. As of the date hereof, the
undersigned is entitled to no credit, no free rent and no offset, counterclaim
or deduction in rent, except _________________;
7. That the Lease is now in full force and effect and has not been
amended, modified or assigned except as may be indicated above; the Lease is the
only agreement between Landlord and the undersigned regarding the Demised
Premises; and, to Tenant's knowledge, Tenant is not in default under the Lease;
8. That Tenant has paid to Landlord a security deposit of $ ____________,
and Tenant has no knowledge of any claim made by Landlord against the security
deposit;
9. That Tenant has _________ option(s) to renew the Lease for a period of
_____ years upon the terms set forth in the Lease, and that none of such options
have been exercised except ___________________;
10. That, except as set forth in the Lease, Tenant has no (i) option to
expand into additional space in the Property; (ii) right of first refusal of any
space in the Property; or (iii) option to acquire all or any part of the
Property in which the Demised Premises are located;
11. That no actions, whether voluntary or otherwise, are pending against
the undersigned under the bankruptcy laws of the United States or any State
thereof.
(tenant's signature on next page)
2
Dated: _________________, 1998
TENANT:
[TENANT NAME]
a
By:
--------------------------
Name:
Title:
Address:
3
EXHIBIT A
(Copy of the Lease to be attached, including all
amendments, modifications, assignments, etc.)
4
EXHIBIT G
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into on this ___ day of May,
1998 by and among (i) 14L ASSOCIATES, a District of Columbia limited partnership
("Seller"), (ii) M-C CAPITOL ASSOCIATES L.L.C., a Delaware limited liability
company ("Purchaser") and (iii) LAWYERS TITLE INSURANCE CORPORATION ("Escrow
Agent").
RECITALS:
A. Seller and a predecessor of Purchaser have entered into a Purchase and
Sale Agreement dated June __, 1998 (the "Purchase Agreement") with respect to
the sale by Seller to Purchaser of certain improved real property located at
1400 L Street, N. W., Washington, D. C. (the "Property").
B. The Purchase Agreement contemplates that Seller and Purchaser shall
execute this Escrow Agreement at the Closing on the sale of the Property to
Purchaser under the provisions of the Purchase Agreement. Capitalized terms used
herein and not otherwise defined herein shall have the meanings set forth in the
Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein contained and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties hereto, Seller, Purchaser and Escrow Agent hereby covenant and agree
as follows:
1. Appointment of Escrow Agent. Seller and Purchaser hereby designate and
appoint Escrow Agent as escrow agent, and Escrow Agent hereby accepts such
designation and appointment.
2. Escrow. On the date hereof, Seller has placed in escrow a portion of
the proceeds from the sale of the Property in the amount of Fifty-Three Thousand
Dollars ($53,000) (the "Escrow Amount") in cash with Escrow Agent, as escrowee,
to secure Seller's obligations under Section 5.7(b) of the Purchase Agreement,
relating to Seller's undertaking to repay to Tenants any overpayments of
Additional Rent such Tenants may have made in calendar year 1998 that is
attributable to periods prior to the Closing Date ("Overpayments"). Escrow Agent
shall hold the Escrow Amount pursuant to the terms of this Escrow Agreement. The
Escrow Amount shall be held and maintained by Escrow Agent in an
interest-bearing account approved by Seller and Purchaser. Neither Seller nor
Purchaser shall have the right to substitute another escrow agent for Escrow
Agent or to cause the Escrow Amount to be held or controlled by any other person
or party except by mutual agreement of Seller and Purchaser.
3. Earned Interest. All interest which accrues on the Escrow Amount shall
be paid by Escrow Agent to Seller on the termination of this Escrow Agreement.
4. Disbursement of Escrow. At such time as a determination is made
(pursuant to the provisions of Section 5.7 of the Purchase Agreement) that a
Tenant has made an Overpayment, Seller shall so notify Escrow Agent (with a copy
to Purchaser), stating in such notice the name and address of the Tenant and the
amount to be reimbursed to such Tenant. Within five (5) days after receipt of
such notice, Escrow Agent shall make the requested payment to the Tenant
specified in Seller's notice out of the Escrow Amount.
5. Termination of Escrow. This Escrow Agreement and the escrow created
hereby shall terminate on the earlier to occur of (i) disbursement of the entire
Escrow Amount pursuant to the provisions hereof, or (ii) May 31, 1999. If the
entire Escrow Amount has not been disbursed prior to May 31, 1999, then on and
as of such date Escrow Agent shall disburse to Seller any remaining funds in the
Escrow Amount, whereupon this escrow shall terminate.
6. Notices. Each notice, request, demand, consent, approval, objection or
other communication (hereafter in this Section 6 referred to collectively as
"notices" and referred to singly as a "notice") which Seller, Purchaser or
Escrow Agent is required or permitted to give pursuant to this Agreement shall
be in writing and shall be deemed to have been duly given if hand delivered with
receipt therefor, or sent by Federal Express or other overnight courier service.
Any such notice shall be deemed given when received or when delivery is refused.
The records of the courier service shall be conclusive with respect to the date
of receipt or refusal of delivery. All notices shall be addressed to the parties
at the following addresses:
(a) if to Purchaser: 11 Commerce Drive, Cranford, New Jersey 07016,
with separate notice to the attention of Roger W. Thomas, Esq. and David
Parisier, with an additional separate notice to go to Pryor, Cashman, Sherman
and Flynn, 410 Park Avenue, New York, NY 10022, Attention: Andrew S. Levine,
Esq.
(b) if to Seller: c/o Quadrangle Development Corporation, 1001 G
Street, N.W., Suite 700, Washington, D.C. 20001, Attention: Legal Department,
with a copy to: The Taylor Simpson Group, One Rockefeller Plaza, Twenty-Third
Floor, New York, New York 10020, Attention: Paul E. Taylor III and Jeffrey
Feldman, Esq.
(c) if to Escrow Agent: 708 Third Avenue, New York, New York 10017,
Attention: Kathryn Andriko
-2-
Any party may, by notice given pursuant to this Section 6, change the person or
persons and/or address or addresses, or designate an additional person or
persons or an additional address or addresses, for its notices.
7. Assignment. Neither Seller, Purchaser nor Escrow Agent shall have any
right, power, or authority to transfer, sell, hypothecate, assign or otherwise
convey any of its rights or obligations under this Escrow Agreement. However,
Escrow Agent shall have the right to resign as escrow agent hereunder. If Escrow
Agent does resign, Seller and Purchaser shall promptly appoint a substitute
escrow agent approved by each of them, such approval not to be unreasonably
withheld.
8. Indemnity. Seller and Purchaser hereby indemnify and hold Escrow Agent
harmless from and against any loss, damage, cost or expense incurred by Escrow
Agent in connection with or in any way related to Escrow Agent's performance of
its obligations hereunder, unless such loss, damage, cost or expense results
from Escrow Agent's negligence, fraud or dishonest conduct.
9. Liability of Escrow Agent. It is understood and agreed that in no event
shall Escrow Agent be liable for any loss or damage resulting from:
(a) Any defaults, error, action or omission of any other party;
(b) Any loss or impairment of funds deposited in escrow in the
course of collection or while on deposit with a commercial bank resulting from
failure, insolvency or suspension of such institution;
(c) Escrow Agent's compliance with any and all legal process, writs,
orders, judgments and decrees of any court where issued with or without
jurisdiction, and whether or not subsequently vacated, modified, set aside or
reversed;
(d) Any good faith act or forbearance by Escrow Agent as long as
such act or forbearance is reasonable and consistent with Escrow Agent's
ordinary course of business; or
(e) Escrow Agent's asserting or failing to assert any cause of
action or defense in any judicial, administrative or other proceeding either in
Escrow Agent's own interest or in the interest of any other party.
10. Remedies Cumulative. The Escrow Amount is intended as security for the
payment by Seller to Tenants of any Overpayments by such Tenants. This Escrow
Agreement is not a limit on Seller's liability to such Tenants for any such
Overpayments, and Seller shall make such payments as may be due Tenants for any
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Overpayments made by them in accordance with the provisions of such Tenants'
Leases and the Purchase Agreement.
11. Entire Agreement. This Escrow Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof, and there
are no agreements or understandings among them with respect to the subject
matter hereof other than as set forth herein and in the Purchase Agreement.
12. Escrow Agent's Fee. Escrow Agent shall not charge any fee in
connection with the services to be performed by it under this Escrow Agreement.
13. Miscellaneous. This Escrow Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns. This Escrow Agreement shall be governed by the laws of the District of
Columbia.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the day and year first above-written.
SELLER.
14L ASSOCIATES
By: Q 1400 L.L.C., General Partner
By: Quadrangle Development
Corporation, Managing Member
By
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Christopher D. Gladstone,
President
PURCHASER:
M-C CAPITOL ASSOCIATES L.L.C.
By: Mack-Cali Property Trust, its Member
By
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Name:
Title:
ESCROW AGENT:
LAWYERS TITLE INSURANCE CORPORATION
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By:
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