Exhibit
10.43
AGREEMENT
OF SALE AND PURCHASE
between and among
M-C HARSIMUS PARTNERS L.L.C.
and
COLUMBIA DEVELOPMENT COMPANY, L.L.C.,
together, as
Seller
and
iSTAR HARBORSIDE LLC
as Purchaser
Dated: August 12, 2003
TABLE OF CONTENTS
i
ii
iii
TABLE OF CONTENTS
(Continued)
INDEX OF DEFINED TERMS
|
Page
|
8/9 Bifurcated Waterfront Permit
|
22
|
8/9 Transferee
|
4
|
8/9 Transferee Guaranty
|
44
|
Access Agreement
|
15
|
AFE
|
1
|
Affiliate
|
2
|
Agreement
|
1
|
Allocation Letter
|
11
|
Amended Financial Agreement
|
3
|
Amended Leases
|
24
|
Amendment to Ground Lease
|
24
|
Amendment to Sublease
|
24
|
Approvals
|
3
|
Approvals shall have been obtained
|
3
|
Authorities
|
3
|
Broker
|
54
|
Building
|
3
|
Business Day
|
3
|
Certificate as to Foreign Status
|
3, 44
|
Certifying Person
|
3, 11
|
City
|
3
|
Closing
|
3
|
Closing Date
|
3
|
Closing Statement
|
3, 46
|
Closing Surviving Obligations
|
4
|
Code
|
4, 11
|
Columbia
|
1
|
Columbia Documents
|
30
|
Columbia Interest
|
2
|
Confidentiality Agreement
|
4
|
Construction Agreements
|
4
|
Contractor
|
6
|
Contracts
|
32
|
Contribution Agreement
|
4
|
Contribution Amount
|
48
|
Control
|
3
|
CRA
|
4, 26
|
CREA
|
4, 26
|
Dedication
|
4, 25
|
Delinquent
|
47
|
Delinquent Rental
|
4
|
Development Permit
|
22
|
Documents
|
4, 13
|
TABLE OF CONTENTS
(Continued)
|
Page
|
Earnest Money Deposit
|
4, 11
|
Effective Date
|
4
|
Entry Notice
|
12
|
Environmental Laws
|
4
|
Environmental Reports
|
32
|
Environmental Statutes
|
5
|
Escrow Agent
|
5
|
Escrowed Funds
|
56
|
Excluded Real Property
|
5
|
Existing Deed Notice
|
25
|
Existing Survey
|
5
|
Final Closing Statement
|
47
|
Financial Agreement
|
6
|
Financial Statements
|
6
|
GAAP
|
6
|
Governmental
Regulations
|
6
|
Ground Lease
|
1
|
Harsimus
|
1
|
Harsimus Documents
|
28
|
Harsimus Interest
|
2
|
Hazardous Substances
|
6
|
Improvements
|
6
|
Initial Term Schwab
Commissions
|
47
|
IRS
|
6
|
iStar
|
15
|
JCRA Approval
|
6
|
JMB Construction
Contract
|
6
|
JMB Cooling Tower Contract
|
6
|
Leasing Commission
Agreements
|
7
|
Legal Restraints
|
38
|
Licensee Parties
|
7, 12
|
Licenses and Permits
|
7
|
LLC Assignment and
Assumption
|
43
|
Losses
|
7, 62
|
Material Taking
|
50
|
Memorial
|
25
|
MOA
|
25
|
Monetary Objections
|
7, 20
|
NJDEP
|
7
|
Operating Expenses
|
7
|
Ordinance
|
7
|
Outside Closing Date
|
7, 41
|
PECA
|
7
|
Permit Condition
|
22
|
TABLE OF CONTENTS
(Continued)
|
Page
|
Permitted Exceptions
|
7, 19
|
Permitted Outside
Parties
|
7, 13
|
Permitted Transfers
|
7
|
Personal Property
|
7
|
PILOT Service Charge
|
48
|
Plaza IX
|
5
|
Plaza VIII
|
5
|
Plaza X Bifurcated
Waterfront Permit
|
22
|
Post-Transfer AFE
|
22
|
Property
|
8
|
Property Management
Agreement
|
42
|
Property Owner
|
1
|
Proration Items
|
8, 46
|
Proration Time
|
46
|
Purchase Price
|
8, 10
|
Purchaser
|
1
|
Purchaser Documents
|
36
|
Purchaser has actual knowledge
|
8
|
Purchasers Affiliates
|
8
|
Purchasers Costs
|
11
|
Purchasers Information
|
8, 15
|
Purchasers Proposed
Estoppel Certificate
|
39
|
Purchasers Share of
the Contribution Amount
|
48
|
PXLA
|
1
|
PXR
|
1
|
PXURA
|
1
|
Real Property
|
1
|
Redevelopment Agreement
|
8
|
References Exhibits and
Schedules
|
9
|
Renewal Term Schwab
Commissions
|
47
|
Rent Shortfall Credit
|
48
|
Rental
|
8, 47
|
Representation Basket
|
36
|
Representation Cap
|
36
|
Retained Entity
|
2
|
Retained Interest
|
2
|
ROEA
|
26
|
Schedule of Insurance
by Property Owner
|
31
|
Scheduled Closing Date
|
8
|
Schwab
|
2
|
Schwab Lease
|
2
|
Schwab Parties
|
12
|
Schwab Subleases
|
32
|
Schwabs Expansion
Options
|
9
|
TABLE OF CONTENTS
(Continued)
|
Page
|
Seller
|
1
|
Seller Entity
|
1
|
Seller Related Parties
|
62
|
Sellers Affiliates
|
9
|
Sellers LLC Interest
|
2
|
Significant Portion
|
9
|
Sublease
|
1
|
Superfund Act
|
5
|
Survey
|
19
|
Tenant Notice Letters
|
42
|
Termination Surviving
Obligations
|
9
|
Threshold Estoppel
Certificate
|
38
|
Title Company
|
9
|
Title Defect
|
21
|
Title Policy
|
9
|
Title Report
|
9, 19
|
To Columbias Knowledge
|
9
|
To Harsimus Knowledge
|
9
|
To Sellers Knowledge
|
9
|
Transfer Tax Forms
|
42
|
Treasury Regulations
|
9
|
Updated Deed Notice
|
9, 25
|
Walkway Easement
|
27
|
Waterfront Walkway
|
27
|
Work Allowance Credit
|
63
|
THIS AGREEMENT OF SALE AND PURCHASE (Agreement)
is made this 12th day of August, 2003 between and among M-C HARSIMUS PARTNERS L.L.C., a limited liability company
organized under the laws of the State of New Jersey having an address c/o
Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 (Harsimus) and COLUMBIA DEVELOPMENT COMPANY, L.L.C., a limited liability company
organized under the laws of the State of New Jersey having an address at 30
Montgomery Street, 15th Floor, Jersey City, New Jersey 07302 (Columbia, and together with Harsimus,
Seller; Columbia and Harsimus are also
sometimes referred to individually as a Seller
Entity) and iSTAR HARBORSIDE
LLC, a limited liability company organized under the laws of the
State of Delaware having an address at c/o iStar Financial, Inc.,
1114 Avenue of the Americas, New York, New York 10036 (Purchaser)
R
E C I T A L S:
WHEREAS, as of the date
hereof, Columbia and Harsimus are the sole members of, and together own one
hundred percent (100%) of the beneficial ownership interest in, American
Financial Exchange L.L.C., a limited liability company organized under the laws
of the State of New Jersey (AFE);
WHEREAS, AFE is (i) the
owner of that certain parcel or parcels of real property described on the legal
description attached hereto and made a part hereof as Schedule A, together with all of AFEs right,
title and interest, if any, in and to the appurtenances pertaining thereto,
including but not limited to AFEs right, title and interest in and to the
adjacent streets, alleys and right-of-ways, and any easement rights, air
rights, subsurface development rights and water rights (but not including the Excluded Real Property (as hereinafter defined))
(collectively, the Real Property), and (ii) the landlord under that certain Ground Lease dated as
of October 6, 2000 (the Ground Lease),
pursuant to which the Real Property is leased to Plaza X Urban Renewal
Associates L.L.C., a limited liability company organized under the laws of the
State of New Jersey (PXURA);
WHEREAS, AFE is the sole
member of, and owns one hundred percent (100%) of the interest in, Plaza X
Realty L.L.C., a limited liability company organized under the laws of the
State of New Jersey (PXR),
and PXR is the sole member of, and owns one hundred percent (100%) of the
interest in, PXURA;
WHEREAS, PXURA
constructed, and is the owner of, the Building (as hereinafter defined)
constructed upon the Real Property and, as sublandlord, has further sublet the
Real Property and the Building to Plaza X Leasing Associates L.L.C., a limited
liability company organized under the laws of the State of New Jersey (PXLA, and together with PXURA, PXR and
AFE, collectively or individually as the context may require, Property Owner), as subtenant,
pursuant to that certain Lease dated as of October 6, 2000 (the Sublease);
WHEREAS, PXR is the sole
member of, and owns one hundred percent (100%) of the interest in, PXLA;
WHEREAS, via its sole
membership in, and one hundred percent (100%) ownership of, PXR, AFE indirectly
owns all of both PXLA and PXURA;
WHEREAS, PXLA, as
sub-sublandlord, has entered into that certain Amended and Restated Lease dated
as of December 29, 2000, as supplemented and amended, and as is more
particularly described on Schedule 8.3(c)(i)-1
annexed hereto (collectively, the Schwab
Lease), with Charles Schwab & Co., Inc. (Schwab),
as sub-subtenant, for the entire rentable area of the Building, all as is more
particularly set forth in the Schwab Lease;
WHEREAS,
contemporaneously with the Closing (as hereinafter defined), but sequentially
prior to all other actions taken at the Closing, (i) Columbia, pursuant to an
assignment and assumption agreement will assign, transfer and convey a 4%
membership interest in and to AFE pursuant to an assignment and assumption
agreement in substantially the form attached hereto as Exhibit 10.3(a)
(the Retained Interest)
to an entity entirely owned and controlled by certain owners of an indirect
interest in Columbia (the Retained Entity
), and (ii) the Retained Entity
will assign, transfer and convey the Retained Interest to Purchaser pursuant to
an assignment and assumption agreement in substantially the form attached
hereto as Exhibit 10.3(a) (collectively, the Retained Interest
Assignments);
WHEREAS, at Closing, (i)
Harsimus will assign, transfer and convey to Purchaser its entire membership
interest in AFE (the Harsimus Interest)
and (ii) Columbia will assign, transfer and convey to Purchaser its entire
membership interest in AFE (after the assignment, transfer and conveyance of
the Retained Interest, the Columbia
Interest, and together with the Harsimus Interest, sometimes
referred to as Sellers LLC Interest),
all upon and subject to the terms
and conditions set forth in this Agreement; and
WHEREAS, Seller desires
to sell, and Purchaser desires to purchase, Sellers LLC Interest, all upon and subject to the terms and
conditions set forth in this Agreement.
NOW THEREFORE, in
consideration of the mutual promises, covenants, and agreements set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Seller and Purchaser agree as follows:
Section 1.1 Definitions. For purposes of this Agreement, the
following capitalized terms have the meanings set forth in this Section 1.1:
Affiliate means, with respect to any
entity, any other individual or entity which, directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common control
with, such entity first mentioned, and the heirs, administrators, executors,
personal or legal representatives and successors and assigns of any or all of
the foregoing. With respect to any
individual, such individuals parents, spouse, direct lineal or adoptive
descendants, descendants by marriage, and/or one more trusts created for the
benefit of such individual or any
2
such family
members. Control (including the correlative meaning of the terms
controlled by and under the common control with) means the possession,
direct or indirect, of the power to direct or cause the direction of an entity,
whether through the ownership of voting securities, by contract or otherwise.
Amended Financial Agreement means that
certain amendment to the Financial Agreement (as hereinafter defined), entered into in accordance with the
Ordinance (as hereinafter defined),
between PXURA and the City (as hereinafter defined), which form of amendment is
annexed hereto as Exhibit 1.1(a); provided, however, that such form may be
modified to include any non-material changes requested by the City and such
other matters as may be approved by both Purchaser and Seller, which approval
shall not be unreasonably withheld, conditioned or delayed.
Approvals means the collective
reference to the Ordinance (as
hereinafter defined), the Amended Financial Agreement and the approval
by the New Jersey Department of Community Affairs to the amended Certificate of
PXURA, as annexed to the Amended Financial Agreement.
Approvals shall have been obtained
means the occurrence of the following: the Ordinance is obtained, the Amended
Financial Agreement becomes effective, the approval by the New Jersey
Department of Community Affairs to the amended Certificate of PXURA, as annexed
to the Amended Financial Agreement, is obtained and the submission for filing
with the Treasurer of the State of New Jersey of such amended Certificate of
PXURA.
Authorities means the
various federal, state and local governmental and quasi-governmental bodies or
agencies having jurisdiction over the Real Property and Improvements (as
hereinafter defined), or any portion thereof.
Building shall have
the meaning ascribed to such term in the Schwab Lease.
Business Day means
any day other than a Saturday, Sunday or a day on which national banking
associations are authorized or required to close.
Certificate as to Foreign Status
has the meaning ascribed to such term in Section 10.3(d).
Certifying Person has
the meaning ascribed to such term in Section 4.3(a).
City means the City of Jersey City.
Closing means the
consummation of the purchase and sale of the Sellers LLC Interest contemplated
by this Agreement, as provided for in Article X.
Closing Date means
the date on which the Closing of the transaction contemplated hereby actually
occurs.
Closing Statement has
the meaning ascribed to such term in Section 10.4(a).
3
Closing Surviving Obligations
means the rights, liabilities, obligations, covenants, and agreements set forth
in Sections 4.3, 5.3, 5.4, 7.2, 7.3, 7.4,
7.5, 7.6, 8.1, 8.2, 8.3, 8.4, 8.5,
8.6, 10.4, 10.5, 10.6, 10.7, 11.1, 12.1,
15.1, 16.1, Article XIV, Article XVII, Section 18.2,
Article XIX and Article XX,
and any other provisions (including, without limitation, guaranties and
indemnities) which pursuant to their terms survive the Closing hereunder.
Code has the meaning
ascribed to such term in Section 4.3.
Confidentiality Agreement
means that certain Confidentiality Agreement, dated October 2, 2002,
between AFE and iStar Financial Inc.
Construction
Agreements means (i)
the JMB Construction Contract and the JMB Cooling Tower Contract (as such terms
are hereinafter defined), (ii) all other contracts and agreements entered into
by PXURA or any other Property Owner in connection with the construction of the
Building, including, without limitation, all written agreements, if any, with
the architects (including architects drawings), contractors, subcontractors
and product manufacturers that provided services and/or materials in connection
with the construction of the Building, and (iii) any and all warranties or
guarantees issued under or pursuant to the JMB Construction Contract and the
JMB Cooling Tower Contract (such warranties or guarantees, collectively, the Warranties).
Contribution
Agreement means
that certain Contribution Agreement dated November 15, 2000 between AFE
and the City.
CRA has the meaning ascribed to such
term in Section 7.1(k).
CREA has the meaning ascribed to such
term in Section 7.1(j).
Dedication has the meaning ascribed to
such term in Section 7.1(f)(ii).
Delinquent Rental has
the meaning ascribed to such term in Section 10.4(b).
Documents has the
meaning ascribed to such term in Section 5.2(a).
Earnest Money Deposit
has the meaning ascribed to such term in Section 4.1.
Effective Date means
the date of this Agreement.
8/9 Transferee means Plaza VIII &
IX Associates L.L.C., a New Jersey limited liability company, the
successor-in-interest to AFE to the fee title to the Excluded Real Property (as
hereinafter defined).
Environmental Laws
means each and every federal, state, county and municipal statute, ordinance,
rule, regulation, code, order, requirement, directive, binding written
interpretation and binding written policy pertaining to Hazardous Substances
(as hereinafter defined) issued by any Authorities and in effect as of the date
of this Agreement which affects the Real Property or the Improvements (as
hereinafter defined), or any portion thereof, the use,
4
ownership,
occupancy or operation of the Real Property or the Improvements, or any portion
thereof, and as same have been amended, modified or supplemented from time to
time prior to the Effective Date, including but not limited to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. § 9601 et seq.) (the Superfund
Act), the Hazardous Substances Transportation Act (49 U.S.C. §
1802 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. § 6901 et seq.),
as amended by the Hazardous and Solid Wastes Amendments of 1984, the Water
Pollution Control Act (33 U.S.C. § 1251 et seq.), the Safe Drinking Water Act (42
U.S.C. § 300f et seq.), the Clean Water Act (33 U.S.C. § 1321 et seq.),
the Clean Air Act (42 U.S.C. § 7401 et seq.), the Solid Waste Disposal Act (42
U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601
et seq.),
the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. §
11001 et
seq.), the Radon and Indoor Air Quality Research Act (42 U.S.C. §
7401 note, et
seq.), the National Environmental Policy Act (42 U.S.C. § 4321 et seq.),
the Superfund Amendment Reauthorization Act of 1986 (42 U.S.C. § 9601 et seq.),
the Occupational Safety and Health Act (29 U.S.C. § 651 et seq.); the New Jersey
Environmental Rights Act, N.J.S.A. 2A:35A-1 et seq.; the New Jersey Spill Compensation
and Control Act, N.J.S.A. 58:10-23.11 et seq.; the New Jersey Air Pollution
Control Act, N.J.S.A. 26:2C-1 et seq.; the New Jersey Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.;
the Hazardous Substances Discharge: Reports and Notices Act, N.J.S.A. 13:1K-15 et seq.;
the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et seq.; the New Jersey
Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-21 et seq.
(collectively, the Environmental Statutes), and any and
all rules and regulations which have become effective prior to the date of this
Agreement under any and all of the Environmental Statutes.
Escrow Agent means
First American Title Insurance Company, with an office at 633 Third
Avenue, New York, New York 10017.
Excluded Real Property means (i) those
certain parcels of land adjacent to the Real Property and designated as Block
15, Lot 50 commonly referred to as Plaza VIII (Plaza VIII) and
Plaza IX (Plaza IX)
and that certain publicly accessible open space adjacent thereto and designated
as Block 15, Lot 49 at the Harborside Financial Center, Jersey City, New
Jersey, (ii) the portion of Block 15, Lot 18 described on Schedule A-1
attached hereto and (iii) all unutilized air and subsurface development
rights, if any, set forth in the Licenses and Permits (as hereinafter defined)
the Financial Agreement (as hereinafter defined), and the Redevelopment
Agreement (as hereinafter defined); provided, however, if the
Waterfront Development Permit is bifurcated prior to Closing in the manner set
forth in Section 7.1(b)(ii) of this Agreement, then the term Excluded
Real Property shall also include the 8/9 Bifurcated Waterfront Permit, and all
of the rights and privileges granted therein.
In no event shall Excluded Real Property include the development
rights set forth in the Waterfront Development Permit which pertained to the
development of the Building, which development rights are to be set forth in
the Plaza X Bifurcated Waterfront Permit.
Existing Survey means
that certain survey of the Real Property November 23, 2002, updated as of June
24, 2003, prepared by John Zanetakos Associates, Inc.
5
Financial
Agreement means
that certain Financial Agreement, together with all exhibits and schedules
annexed thereto, made as of November 15, 2000 between Plaza X Urban
Renewal Associates, LLC and the City, as amended by the Addendum to Financial
Agreement made as of November 15, 2000.
Financial Statements means the
consolidated financial statements of AFE and its subsidiaries as of and for the
year ended December 31, 2002 and as of and for the six month period ended June
30, 2003, each prepared in accordance with GAAP (as hereinafter defined).
GAAP means United States generally
accepted accounting principles, consistently applied.
Governmental Regulations
means all statutes, ordinances, rules and regulations of the Authorities
applicable to Seller or the use or operation of the Real Property or the
Improvements or any portion thereof.
Hazardous Substances
means (a) asbestos, radon gas and urea formaldehyde foam insulation,
(b) any solid, liquid, gaseous or thermal contaminant, including smoke
vapor, soot, fumes, acids, alkalis, chemicals, petroleum products or
byproducts, PCBs, phosphates, lead or other heavy metals and chlorine,
(c) any solid or liquid waste (including, without limitation, hazardous
waste), hazardous air pollutant, hazardous substance, hazardous chemical
substance and mixture, toxic substance, pollutant, pollution, regulated
substance and contaminant, as such terms are defined in any of the
Environmental Laws, and (d) any other chemical, material or substance, the
use or presence of which, or exposure to the use or presence of which, is
prohibited, limited or regulated by any Environmental Laws.
Improvements means
all buildings (including, without limitation, the Building), structures,
fixtures, parking areas and other improvements, together with the tenements,
hereditaments and appurtenances thereto belonging, located on the Real
Property.
IRS means the Internal Revenue
Service.
JCRA Approval means the issuance of a
Certificate of Substantial Completion from Jersey City Redevelopment Agency, a
New Jersey public body corporate, which confirms that all obligations of the
Redevelopment (as defined in the Redevelopment Agreement (as hereinafter
defined)) under the Redevelopment Agreement have been substantially completed
with respect to the Real Property, and that the Jersey City Redevelopment
Agencys right of reverter with respect to the Real Property has been
terminated.
JMB Construction Contract means that
certain construction agreement between PXURA and Jeffrey M. Brown, Inc. (Contractor), with respect to the
construction of the Building, dated July 15, 2000.
JMB Cooling Tower Contract means that
certain construction agreement between PXURA and Contractor with respect to
construction of the fourth cooling tower at the Building dated
December 11, 2002.
6
Leasing Commission Agreements means
the leasing commission agreements affecting the Property, and which are more
particularly set forth on Schedule 8.3(k) attached hereto.
Licensee Parties has
the meaning ascribed to such term in Section 5.1.
Licenses and Permits
means, collectively, all of the Property Owners right, title and interest, in
and to licenses, permits, certificates of occupancy, approvals, dedications,
zoning approvals, warranties, lien waivers, utility arrangements, subdivision
maps and entitlements now existing or hereafter issued, approved or granted by
the Authorities in connection with the Real Property and the Improvements,
together with all renewals and modifications thereof.
Losses has the meaning ascribed to
such term in Section 17.17.
Monetary Objections
has the meaning ascribed to such term in Section 6.2.
NJDEP means the New Jersey Department
of Environmental Protection.
Operating Expenses
has the meaning ascribed to such term in Section 10.4(c).
Ordinance means a validly adopted,
effective and non-appealable Ordinance of the Municipal Council of the City in
the form annexed hereto as Exhibit 7.3; provided, however,
that such form may be modified to include any non-material changes requested by
the City and such other matters as may be approved by both Purchaser and
Seller, which approval shall not be unreasonably withheld, conditioned or
delayed by either party. The parties
hereto hereby agree that the Ordinance shall be deemed non-appealable after the
expiration of the applicable 45-day appeal period.
Outside Closing Date has the meaning
ascribed to such term in Section 10.1.
PECA means that certain Project
Employment and Contracting Agreement between the City and PXURA, dated as of
November 15, 2000, as amended through the Closing Date.
Permitted Exceptions
has the meaning ascribed to such term in Section 6.2(a).
Permitted Outside Parties
has the meaning ascribed to such term in Section 5.2(b).
Permitted Transfers means transfers,
whether directly or indirectly, of all or any portion of Sellers LLC Interest
between all or any of the Seller Entities and/or Sellers Affiliates; provided,
however, that such transferee (to the extent not already a party hereto)
shall automatically be bound by the provisions of this Agreement to the same
extent as the transferor of its interest.
Personal Property
means that certain equipment, appliances, tools, supplies, machinery, artwork,
furnishings and other tangible personal property attached to, appurtenant to,
located in and used in connection with the ownership or operation of the
Improvements and situated at the Real Property more particularly identified on Schedule B annexed hereto.
7
Property means,
collectively, the following: (i) the
Real Property; (ii) the Improvements and all of the Property Owners
right, title and interest in and to any land lying in the bed of any street,
road, avenue or alley, open or proposed, in front of or adjoining the Land to
the center line thereof, and any strips or gores adjacent to the Real Property,
and all right, title and interest of Property Owner in and to any award made or
to be made for damages by reason of any change in grade of any street; (iii)
the Personal Property; (iv) the Schwab Lease, the Ground Lease and the
Sublease; (v) the Licenses and Permits; (vi) the Leasing Commission
Agreements; (vii) the Construction Agreements; (viii) the Owner Controlled
Insurance Program for the construction of the Building (the OCIP) consisting of the General
Liability Policy issued by St. Paul Fire and Marine Insurance Company, policy
number KG0290072 and the Workers Compensation Policy issued by St. Paul Fire
and Marine Insurance Company under policy number WVW2989000, but specifically
excluding any savings, refunds or other amounts payable under the OCIP; and
(ix) all other plans, specifications, approvals, tax abatements and all other
intangible rights, titles, interests, privileges and appurtenances owned by
Property Owner and related to or used in connection with the ownership, use or
operation of the Real Property or the Improvements, but specifically excluding
any property owned by Tenants or others and the Excluded Real Property.
Proration Items has
the meaning ascribed to such term in Section 10.4(a).
Purchase Price has
the meaning ascribed to such term in Section 3.1.
Purchaser has actual knowledge
(and variations thereon used herein) means the actual (as opposed to
constructive or imputed) knowledge solely of H. Cabot Lodge III, as Executive
Vice President of iStar Financial Inc, Joe Welsh, as Vice President of iStar
Financial Inc., and Christopher Miculis, as Associate of iStar Financial Inc.,
without any independent investigation or inquiry whatsoever, other than the due
diligence conducted by Purchaser in connection with this transaction.
Purchasers Affiliates
means all of the Affiliates of Purchaser.
Purchasers Information
has the meaning ascribed to such term in Section 5.3(c).
Redevelopment Agreement means that
certain Redevelopment Agreement dated as of April 12, 1985 between Jersey
City Redevelopment Agency, a New Jersey public body corporate, and A-S-H
Management Corporation, a Delaware corporation, and recorded in the Hudson
County Register of Deeds on November 27, 1985 in Book 3485, at Page 1, as
subsequently amended, modified, supplemented and assigned.
Rental has the
meaning ascribed to such term in Section 10.4(b), and same are
Delinquent in accordance with the meaning ascribed to such term in Section 10.4(b).
Scheduled Closing Date
means the date that is ten (10) Business Days following the satisfaction, or
waiver in writing of, the conditions set forth in Sections 9.1(j) and (o),
and 9.2(g) hereof, or such later date to which the Closing may be
adjourned in accordance with the express
8
terms of this
Agreement or such earlier or later date to which Purchaser and Seller may
hereafter agree in writing.
Schwabs Expansion Options means the
First Expansion Option (as such term is defined in the Schwab Lease) and Second
Expansion Option (as such term is defined in the Schwab Lease) granted to
Schwab under the Schwab Lease.
Sellers Affiliates
means all of the Affiliates of Seller.
Significant Portion
means, for purposes of the casualty provisions set forth in Article XI
hereof, damage by fire or other casualty to the Real Property and the
Improvements or a portion thereof, such that Schwab is entitled to terminate
the Schwab Lease pursuant to Section 10.05(d) thereof.
Termination Surviving Obligations
means the rights, liabilities and obligations set forth in Sections 5.2,
5.3, 5.4, 12.1, and 16.1, and Articles XIII, XIV
and XVII, and any other provisions
which pursuant to their terms survive any termination of this Agreement.
Title Company means
First American Title Insurance Company and Fidelity National Title Company as
equal co-insurers.
Title Policy means
the title policy, if any, obtained by Purchaser from the Title Company at
Closing.
Title Report has the
meaning ascribed to such term in Section 6.2(a).
To Columbias Knowledge (and
variations thereon used herein) means the present actual (as opposed to
constructive or imputed) knowledge solely of Joseph A. Panepinto, Peter Mangin
and Frank Guarini without any independent investigation or inquiry whatsoever.
To Harsimus Knowledge (and variations thereon used herein)
means the present actual (as opposed to constructive or imputed) knowledge
solely of Mitchell Hersh, as Chief Executive Officer of Mack-Cali Realty
Corporation, Roger Thomas, as General Counsel of Mack-Cali Realty Corporation,
Gary Wagner, as Associate General Counsel of Mack-Cali Realty Corporation, John
Crandall, as Senior Vice President Development of Mack-Cali Realty
Corporation and John Marazzo, as Senior Director Property Management of
Mack-Cali Realty Corporation, without any independent investigation or inquiry
whatsoever.
To Sellers Knowledge
(and variations thereon used herein) means, collectively, To Columbias
Knowledge and To Harsimus Knowledge.
Treasury Regulations means the
regulations prescribed under the Code.
Updated Deed Notice has the meaning
ascribed to such term in Section 7.1(h).
Section 1.2 References: Exhibits and Schedules. Except as otherwise specifically indicated,
all references in this Agreement to Articles or Sections refer to Articles or
Sections of
9
this Agreement, and all references to Exhibits or Schedules
refer to Exhibits or Schedules attached hereto, all of which Exhibits and
Schedules are incorporated into, and made a part of, this Agreement by
reference. The words herein, hereof, hereinafter and words and phrases of
similar import refer to this Agreement as a whole and not to any particular
Section or Article.
ARTICLE II
AGREEMENT OF PURCHASE AND SALE
Section 2.1 Purchase and Sale.
Subject to the conditions and on the terms contained in this Agreement,
Purchaser agrees to purchase and acquire from Seller, and Seller agrees to sell
and transfer to Purchaser, Sellers LLC Interest. By acquiring Sellers LLC Interest pursuant hereto, the Retained
Interest pursuant to the Retained Interest Assignments, Purchaser shall
indirectly own one hundred percent (100%) of the beneficial ownership interest
in and to the Property and Property Owner.
Anything to the contrary contained herein notwithstanding, Seller is not
transferring to Purchaser any bank accounts or funds therein maintained by AFE
or any Property Owner and Seller shall have the right, at any time on or prior
to Closing, to transfer any such bank accounts or withdraw any such funds and
keep the same for its own benefit; provided, that this sentence shall not
affect the pro rations under Section 10.4.
Section 2.2 Indivisible Economic Package. Purchaser has no right to purchase, and
Seller has no obligation to sell, less than all of Sellers LLC Interest, it
being the express agreement and understanding of Purchaser and Seller that, as
a material inducement to Seller and Purchaser to enter into this Agreement,
Purchaser has agreed to purchase, and Seller has agreed to sell, all of
Sellers LLC Interest, subject to and in accordance with the terms and
conditions hereof
Section 2.3 Full Performance. The execution and
delivery of the LLC Assignment and Assumption (as hereinafter defined) and the
other documents to be executed and/or delivered by Seller to Purchaser pursuant
to this Agreement shall be deemed to be a full performance and discharge of
every agreement and obligation on the part of Seller to be performed under this
Agreement, except those agreements, obligations, covenants, representations,
warranties and indemnifications of Seller which are specifically stated to
survive the closing of the transaction contemplated in this Agreement.
Section 3.1 Purchase Price. The purchase price for Sellers LLC Interest
shall be the sum of One Hundred Eighty Six Million One Hundred Ninety Two
Thousand and 00/100 Dollars ($186,192,000.00) all in lawful currency of the
United States of America, payable as provided in Section 3.2, and
subject to adjustments and credits as expressly contemplated by this Agreement
(the Purchase
Price).
10
Section 3.2 Method of Payment of Purchase Price. No later than 1:00 p.m. Eastern Time on the
Scheduled Closing Date, Purchaser shall pay to Escrow Agent (on behalf of
Seller) the Purchase Price (less the Earnest Money Deposit), together with all
other costs and amounts to be paid by Purchaser at the Closing pursuant to the
terms of this Agreement (such other costs and amounts, Purchasers Costs),
by Federal Reserve wire transfer of immediately available funds to the account
of Escrow Agent pursuant to and in accordance with the wiring instructions
supplied by Seller to Purchaser one (1) Business Day prior to the Scheduled
Closing Date. Escrow Agent, following
authorization and instruction by the parties at Closing, shall (i) pay to
each of Harsimus (or its designee) and Columbia (or its designee) by separate
Federal Reserve wire transfers of immediately available funds to the account
designated by each of them, the amount of the Purchase Price, less any costs or
other amounts to be paid by Seller at Closing pursuant to the terms of this
Agreement, to which each of them are entitled, as set forth in a writing
executed by both Harsimus and Columbia (the Allocation Letter) and which shall be furnished to Escrow
Agent, (ii) pay to the appropriate payees out of the proceeds of Closing
payable to Seller all costs and amounts to be paid by Seller at Closing
pursuant to the terms of this Agreement, and (iii) pay Purchasers Costs
to the appropriate payees at Closing pursuant to the terms of this Agreement. A
Closing Statement will be prepared by Seller and submitted to Purchaser in
accordance with the terms of Section 10.4.
ARTICLE IV
EARNEST MONEY DEPOSIT
AND ESCROW INSTRUCTIONS
Section
4.1 The Earnest Money Deposit and
Independent Contract Consideration. Simultaneously with the execution and delivery of this Agreement
by Purchaser, Purchaser shall deposit with the Escrow Agent, by Federal Reserve
wire transfer of immediately available funds, the sum of Two Million and 00/100
Dollars ($2,000,000.00) as the earnest money deposit on account of the Purchase
Price (such amount, together with all interest accrued thereon, the Earnest
Money Deposit).
Section 4.2 Escrow
Instructions. The
Earnest Money Deposit shall be held in escrow by the Escrow Agent in an
interest-bearing account, in accordance with the provisions of
Article XVI. The Earnest Money
Deposit is non-refundable to Purchaser, except as otherwise expressly provided
in this Agreement.
Section 4.3 Designation
of Certifying Person. In
order to assure compliance with the requirements of Section 6045 of
the Internal Revenue Code of 1986, as amended (the Code), and any
related reporting requirements of the Code, the parties hereto agree as
follows:
(a) Provided
the Escrow Agent shall execute a statement in writing (in form and substance
reasonably acceptable to the parties hereunder) pursuant to which it agrees to
assume all responsibilities for information reporting required under Section
6045(e) of the Code, Seller and Purchaser shall designate the Escrow Agent
as the person to be responsible for all information reporting under Section
6045(e)of the Code (the Certifying Person). If the
11
Escrow Agent refuses to execute a statement pursuant
to which it agrees to be the Certifying Person, Seller and Purchaser shall
agree to appoint another third party as the Certifying Person.
(b) Seller
and Purchaser each hereby agree:
(i) to
provide to the Certifying Person all information and certifications regarding
such party, as reasonably requested by the Certifying Person or otherwise
required to be provided by a party to the transaction described herein under Section 6045 of
the Code; and
(ii) to
provide to the Certifying Person such partys taxpayer identification number
and a statement (on Internal Revenue Service Form W-9 or an acceptable
substitute form, or on any other form the applicable current or future Code
sections and regulations might require and/or any form requested by the Certifying
Person), signed under penalties of perjury, stating that the taxpayer
identification number supplied by such party to the Certifying Person is
correct.
ARTICLE V
INSPECTION OF PROPERTY
Section 5.1 Completion
of Due Diligence.
Anything to the contrary contained in this Agreement notwithstanding,
Purchaser acknowledges and agrees that it has completed all of its due
diligence with respect to the Property and Sellers LLC Interests and Purchaser
has no right to terminate this Agreement by reason of any due diligence matters
(but this sentence shall not affect any other termination right of Purchaser
expressly provided herein).
Notwithstanding the foregoing, Purchaser and its authorized agents,
partners, lenders, officers, employees, advisors, attorneys, accountants,
architects, engineers and other representatives (for purposes of this
Article V, the Licensee Parties) shall have the
right, subject to the provisions of this Article V, including, without
limitation, the provisions of Section 5.3, and the rights of Schwab and
its subtenants (Schwab and such subtenants are collectively referred to herein
as, the Schwab Parties),
to enter upon the Real Property at all reasonable times during normal business
hours to perform inspections and to otherwise evaluate the Property, including,
without limitation, physical testing and invasive sampling. Purchaser will provide to Seller notice (for
purposes of this Section 5.1, an Entry Notice) of the intention of
Purchaser or the other Licensee Parties to enter the Real Property at least 24
hours prior to such intended entry and specify the intended purpose therefor
and the inspections and examinations contemplated to be made and with whom any
Licensee Party will communicate. At
Sellers option, Seller may be present for any such entry and inspection. Purchaser shall not communicate with or
contact any of the Schwab Parties or any of the Authorities without the prior
written consent of Seller, which consent shall not be unreasonably withheld,
conditioned (other than to permit Seller or its representative to participate
in any meetings or calls between Schwab and Purchaser) or delayed.
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(a) Notwithstanding
that Purchaser has completed its due diligence review, Purchaser and the
Licensee Parties shall have the continuing right to review and inspect, at
Purchasers sole cost and expense, any and all of the following which, to the
extent the same are in Sellers and/or the Property Owners possession or
control (collectively, the Documents): all final environmental,
engineering or consulting reports and studies of the Real Property that have
been prepared for Property Owner, and/or Seller, real estate tax bills (and all
agreement(s) relating to payments in lieu of real estate taxes), together with
assessments (special or otherwise), ad valorem and personal property tax bills,
covering the period of Property Owners ownership of the Property; the Schwab
Lease and related lease and sublease files; current operating statements; the
Licenses and Permits; the Leasing Commission Agreements; and such other
documents, files and items as Purchaser shall reasonably request, including,
without limitation, all documents relating to Sellers LLC Interests. Such inspections shall occur at a location
reasonably selected by Seller, which may be at the office of Seller, Sellers
counsel, Property Owners property manager, at the Real Property or any of
them. Unless otherwise expressly set
forth herein, Purchaser shall not have the right to review or inspect materials
not directly related to the leasing, maintenance, operation, ownership and/or
management of the Property, including, without limitation, all of Sellers
and/or Property Owners internal memoranda, financial projections, budgets,
appraisals, proposals for work not actually undertaken, and other proprietary
and confidential information.
(b) Purchaser
acknowledges that any and all of the Documents may be proprietary and
confidential in nature and have been provided to Purchaser solely to assist
Purchaser in evaluating the Property, obtaining financing for the transaction
contemplated herein and consummating the transactions contemplated herein. Subject only to the provisions of
Article XII, Purchaser agrees not to disclose the contents of the
Documents or any of the provisions, terms or conditions contained therein, to
any party outside of Purchasers organization other than its attorneys,
partners or other investors, accountants, lenders and lenders advisors, title
agents, or any other Licensee Parties (collectively, the Permitted Outside Parties). Purchaser further agrees that within its
organization, or as to the Permitted Outside Parties, the Documents will be
disclosed and exhibited only to those persons within Purchasers organization
or to those Permitted Outside Parties who are responsible for evaluating the
Property, providing financing for the transaction contemplated herein and
consummating the transaction contemplated hereby or otherwise involved in
performing Purchasers obligations under this Agreement. Purchaser further acknowledges that the
Documents and other information relating to the leasing arrangements between
Seller and the Schwab Parties are proprietary and confidential in nature. Purchaser agrees not to divulge the contents
of such Documents and other information except in accordance with the
confidentiality standards set forth in this Section 5.2 and
Article XII. In permitting
Purchaser and the Permitted Outside Parties to review the Documents and other
information to assist Purchaser, Seller and Property Owner have not waived any
privilege or claim of confidentiality with respect thereto, and no third party
benefits or relationships of any kind, either express or implied, have been
offered, intended or created by Seller and Property Owner, and any such claims
are expressly rejected by Seller and Property Owner and waived by Purchaser and
the Permitted Outside Parties, for
13
whom, by its execution of this Agreement, Purchaser is
acting as an agent for the Permitted Outside Parties with regard to such
waiver.
(c) Purchaser
acknowledges that some of the Documents may have been prepared by third parties
and may have been prepared prior to Property Owners ownership of the Property.
PURCHASER
HEREBY ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH IN SECTIONS 8.1, 8.2 AND 8.3, SELLER OR
SELLER ENTITY HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION OR WARRANTY
REGARDING THE TRUTH, ACCURACY OR COMPLETENESS OF THE DOCUMENTS OR THE SOURCES
THEREOF. SELLER HAS
NOT UNDERTAKEN ANY INDEPENDENT INVESTIGATION AS TO THE TRUTH, ACCURACY OR
COMPLETENESS OF THE DOCUMENTS AND IS PROVIDING THE DOCUMENTS SOLELY AS AN
ACCOMMODATION TO PURCHASER.
Section 5.3 Entry and
Inspection Obligations; Termination of Agreement.
(a) Purchaser
agrees that in entering upon and inspecting or examining the Property,
Purchaser and the other Licensee Parties will not: materially disturb any of
the Schwab Parties, or materially interfere with the use of the Property
pursuant to the Schwab Lease; materially interfere with the operation and
maintenance of the Real Property or Improvements; damage any part of the
Property or any personal property owned or held by any of the Schwab Parties,
or any other person or entity; injure or otherwise cause bodily harm to Seller,
Property Owner or any of the Schwab Parties, or to any of their respective
agents, guests, invitees, contractors and employees, or to any other person or
entity; permit any liens to attach to the Real Property by reason of the
exercise of Purchasers inspection rights under this Article V; or reveal
or disclose any information obtained concerning the Property and the Documents
to anyone outside Purchasers organization, except in accordance with the
confidentiality standards set forth in Section 5.2(b) and
Article XII. Purchaser shall: (i)
maintain (or cause the appropriate Licensee Parties to maintain) comprehensive
general liability (occurrence) insurance on terms and in amounts reasonably
satisfactory to Seller and Workers Compensation insurance in statutory limits,
and if Purchaser or any Licensee Party performs any invasive physical testing
or invasive sampling in accordance with Section 5.1 of this Agreement,
errors and omissions insurance and contractors pollution liability insurance
on terms and in amounts acceptable to Seller, covering any accident or event
arising in connection with the presence of Purchaser or any other Licensee Party
on the Real Property or Improvements, and deliver evidence of insurance
verifying such coverage to Seller prior to entry upon the Real Property or
Improvements; (ii) promptly pay when due the costs of all entry and
inspections and examinations done with regard to the Property; (iii) cause
any inspection to be conducted in accordance with standards customarily
employed in the industry and in compliance with all Governmental Regulations
and the Existing Deed Notice (as such term is hereinafter defined); (iv) furnish
to Seller copies of any studies, reports or test results received by Purchaser
regarding the Property, promptly after such receipt, in connection with such
inspection; and (v) repair any damage to the Real Property and
Improvements caused by any inspection or examination by Purchaser or its
agents. Notwithstanding the foregoing
or subsection (b) below to the contrary, Purchaser shall not be required to
restore nor to be liable for any damage to the Property
14
resulting from the
negligence or willful misconduct of Seller, AFE, PXURA, PXR, PXLA (or any of
their respective members, partners, officers, directors, employees, agents or
other authorized representatives) or any of the Schwab Parties. In addition, Purchaser shall not be liable
to restore any damage to the Real Property or the Improvements to the extent
relating to existing conditions at the Property which are revealed by
Purchasers investigations permitted hereunder.
(b) Except
as stated to the contrary in the last sentence of Section 5.3(a) above,
Purchaser hereby indemnifies, defends and holds Seller and Property Owner and
their respective partners, agents, directors, officers, employees, successors
and assigns (collectively, the Seller Indemnified
Parties) harmless from and against any and all liens, claims,
causes of action, damages, liabilities, demands, suits, and obligations to
third parties, together with all losses, penalties, costs and expenses relating
to any of the foregoing (including but not limited to court costs and
reasonable attorneys fees), arising out of any disclosure(s) of confidential
information in violation of the provisions of Section 5.2(b) and any
inspections, investigations, examinations, sampling or tests conducted by
Purchaser or any of the Licensee Parties, whether prior to or after the date
hereof, pursuant to the provisions of Article V of this Agreement.
(c) Promptly
following the time that this Agreement is terminated for any reason, Purchaser
shall return to Seller all copies Purchaser has made of the Documents and all
copies of any studies, reports or test results regarding any part of the
Property obtained by Purchaser, before or after the execution of this
Agreement, in connection with Purchasers inspection of the Property
(collectively, Purchasers Information). Purchasers Information shall not include
Purchasers internal memoranda, financial projections, budgets, appraisals or
other proprietary and confidential information. Purchasers Information shall be delivered without any
representation or warranty, express or implied, as to the accuracy or
completeness (other than that Purchaser has returned all of the items it is
required to return) of Purchasers Information, or any other representation or
warranty; neither Seller nor any other person or party shall have any right to
rely on Purchasers Information nor shall Purchaser shall have any liability or
obligation with regard to Purchasers Information.
(d) The
terms and provisions of Section 5.3(b) and Section 5.3(c) above
shall supercede, in its entirety, the terms and provisions of that certain
Right of Access Agreement dated November , 2002
(the Access Agreement),
between AFE and iStar Financial Inc. (iStar),
and such agreement shall, from and after the date hereof, be of no further
force and effect and no obligations set forth therein shall survive the
Effective Date; provided, however, if iStar shall have incurred
any liability under the Access Agreement on account of any inspections,
investigations, examinations, sampling or tests conducted prior to the
Effective Date by iStar, Purchaser or any of the Licensee Parties, then any
liability of iStar under the Access Agreement shall survive the Effective Date
but the obligations with respect thereto shall be governed by the provisions of
this Agreement, and not by the provisions of the Access Agreement.
Section 5.4 Sale As Is. THE TRANSACTION CONTEMPLATED BY THIS
AGREEMENT HAS BEEN NEGOTIATED BETWEEN SELLER AND PURCHASER. THIS AGREEMENT
REFLECTS THE MUTUAL AGREEMENT OF SELLER AND
15
PURCHASER,
AND PURCHASER HAS HAD AND HAS THE RIGHT TO CONDUCT ITS OWN INDEPENDENT
EXAMINATION OF THE PROPERTY AND SELLERS LLC INTEREST. OTHER THAN THE MATTERS REPRESENTED IN SECTIONS 8.1, 8.2 AND 8.3 HEREOF AND
ANY CLOSING CERTIFICATION OF SELLER AS TO THE TRUTH AND ACCURACY OF THE
REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE AND THE REPRESENTATIONS
IN SELLERS (AND PROPERTY OWNERS) TITLE AFFIDAVIT, NON-IMPUTATION ENDORSEMENT
AFFIDAVIT AND ALL OTHER CLOSING DOCUMENTS, BY WHICH ALL OF THE FOLLOWING
PROVISIONS OF THIS SECTION 5.4 ARE MODIFIED AND LIMITED AS IF SUCH
EXCEPTION WERE FULLY SET FORTH HEREIN IN EACH INSTANCE, PURCHASER HAS NOT
RELIED UPON AND WILL NOT RELY UPON, EITHER DIRECTLY OR INDIRECTLY, ANY
REPRESENTATION OR WARRANTY OF SELLER OR ANY OF SELLERS AGENTS OR
REPRESENTATIVES, AND PURCHASER HEREBY ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS
OR WARRANTIES HAVE BEEN MADE.
SELLER SPECIFICALLY DISCLAIMS, AND NEITHER SELLER NOR ANY OF
SELLERS AFFILIATES NOR ANY OTHER PERSON (INCLUDING, WITHOUT LIMITATION,
PROPERTY OWNER) IS MAKING, ANY REPRESENTATION, WARRANTY OR ASSURANCE WHATSOEVER
TO PURCHASER, AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER,
EITHER EXPRESS OR IMPLIED, ARE MADE BY SELLER OR ANY OF SELLERS AFFILIATES OR
RELIED UPON BY PURCHASER WITH RESPECT TO THE STATUS OF TITLE TO OR THE
MAINTENANCE, REPAIR, CONDITION, DESIGN OR MARKETABILITY OF THE PROPERTY, OR ANY
PORTION THEREOF, INCLUDING BUT NOT LIMITED TO (a) ANY IMPLIED OR EXPRESS
WARRANTY OF MERCHANTABILITY, (b) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE, (c) ANY IMPLIED OR EXPRESS WARRANTY OF
CONFORMITY TO MODELS OR SAMPLES OF MATERIALS, (d) ANY RIGHTS OF PURCHASER
UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (e) ANY
CLAIM BY PURCHASER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN,
WITH RESPECT TO THE IMPROVEMENTS OR THE PERSONAL PROPERTY, (f) THE
FINANCIAL CONDITION OR PROSPECTS OF THE PROPERTY OR THE PROPERTY OWNER AND
(g) THE COMPLIANCE OR LACK THEREOF OF THE REAL PROPERTY OR THE
IMPROVEMENTS WITH GOVERNMENTAL REGULATIONS, INCLUDING, WITHOUT LIMITATION, ANY
ENVIRONMENTAL LAWS, NOW EXISTING OR HEREINAFTER ENACTED OR PROMULGATED, IT
BEING THE EXPRESS INTENTION OF SELLER AND PURCHASER THAT, EXCEPT AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, THE PROPERTY (THROUGH THE TRANSFER OF SELLERS LLC
INTEREST) WILL BE CONVEYED AND TRANSFERRED TO PURCHASER IN ITS PRESENT CONDITION
AND STATE OF REPAIR, AS IS AND WHERE IS, WITH ALL FAULTS. PURCHASER REPRESENTS THAT IT IS A
KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF REAL ESTATE, AND THAT
IT IS RELYING
16
SOLELY ON ITS OWN EXPERTISE AND THAT
OF PURCHASERS CONSULTANTS IN PURCHASING THE PROPERTY THROUGH THE TRANSFER OF
SELLERS LLC INTEREST. PURCHASER HAS
BEEN GIVEN A SUFFICIENT OPPORTUNITY PRIOR TO THE EFFECTIVE DATE TO CONDUCT AND
HAS CONDUCTED SUCH INSPECTIONS, INVESTIGATIONS AND OTHER INDEPENDENT
EXAMINATIONS OF THE PROPERTY, SELLERS LLC INTEREST AND RELATED MATTERS AS
PURCHASER DEEMS NECESSARY, INCLUDING BUT NOT LIMITED TO THE PHYSICAL AND
ENVIRONMENTAL CONDITIONS THEREOF, AND WILL RELY UPON SAME AND NOT UPON ANY
STATEMENTS OF SELLER OR SELLER ENTITIES (EXCLUDING THE LIMITED MATTERS
REPRESENTED BY SELLER IN SECTIONS 8.1, 8.2 AND 8.3 HEREOF AND
ANY CLOSING CERTIFICATION OF SELLER AS TO THE TRUTH AND ACCURACY OF THE
REPRESENTATIONS AND WARRANTIES AS OF THE CLOSING DATE AND THE REPRESENTATIONS
IN SELLERS (AND PROPERTY OWNERS) TITLE AFFIDAVIT, NON-IMPUTATION ENDORSEMENT
AFFIDAVIT AND ALL OTHER CLOSING DOCUMENTS) NOR OF ANY OFFICER, DIRECTOR,
EMPLOYEE, AGENT OR ATTORNEY OF SELLER. PURCHASER ACKNOWLEDGES THAT ALL INFORMATION
OBTAINED BY PURCHASER WAS OBTAINED FROM A VARIETY OF SOURCES, AND SELLER WILL
NOT BE DEEMED TO HAVE REPRESENTED OR WARRANTED THE COMPLETENESS, TRUTH OR
ACCURACY OF ANY OF THE DOCUMENTS OR OTHER SUCH INFORMATION HERETOFORE OR
HEREAFTER FURNISHED TO PURCHASER.
UPON CLOSING, SUBJECT TO THE EXPRESS PROVISIONS OF THIS AGREEMENT,
PURCHASER WILL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED
TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED
BY PURCHASERS INSPECTIONS AND INVESTIGATIONS. PURCHASER ACKNOWLEDGES AND AGREES THAT,
UPON CLOSING, SELLER WILL SELL AND CONVEY TO PURCHASER, AND PURCHASER WILL
ACCEPT THE PROPERTY THROUGH THE TRANSFER OF SELLERS LLC INTEREST, AS IS, WHERE
IS, WITH ALL FAULTS. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THERE
ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS COLLATERAL TO OR
AFFECTING SELLERS LLC INTEREST OR THE PROPERTY BY SELLER, ANY AGENT OF SELLER
OR ANY THIRD PARTY. SELLER IS NOT
LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR SELLERS LLC
INTEREST FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER
PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH HEREIN. PURCHASER
ACKNOWLEDGES THAT THE PURCHASE PRICE REFLECTS THE AS IS, WHERE
IS NATURE OF THIS SALE AND ANY FAULTS, LIABILITIES, DEFECTS OR OTHER
ADVERSE MATTERS THAT MAY BE ASSOCIATED WITH THE PROPERTY AND SELLERS LLC
INTEREST. PURCHASER,
WITH PURCHASERS COUNSEL, HAS FULLY REVIEWED THE DISCLAIMERS AND WAIVERS SET
FORTH IN THIS AGREEMENT AND UNDERSTANDS THEIR SIGNIFICANCE AND AGREES THAT THE
DISCLAIMERS AND OTHER
17
AGREEMENTS SET FORTH HEREIN ARE AN
INTEGRAL PART OF THIS AGREEMENT, AND THAT SELLER WOULD NOT HAVE AGREED TO SELL
SELLERS LLC INTEREST TO PURCHASER FOR THE PURCHASE PRICE WITHOUT THE
DISCLAIMERS AND OTHER AGREEMENTS SET FORTH IN THIS AGREEMENT.
PURCHASER
AND PURCHASERS AFFILIATES FURTHER COVENANT AND AGREE NOT TO SUE SELLER AND
SELLERS AFFILIATES AND RELEASE SELLER AND SELLERS AFFILIATES OF AND FROM AND
WAIVE ANY CLAIM OR CAUSE OF ACTION, INCLUDING, WITHOUT LIMITATION, ANY STRICT
LIABILITY CLAIM OR CAUSE OF ACTION, THAT PURCHASER OR PURCHASERS AFFILIATES
MAY HAVE AGAINST SELLER OR SELLERS AFFILIATES UNDER ANY ENVIRONMENTAL LAW, NOW
EXISTING OR HEREAFTER ENACTED OR PROMULGATED, RELATING TO ENVIRONMENTAL MATTERS
OR ENVIRONMENTAL CONDITIONS EXISTING AS OF THE CLOSING (WHETHER
KNOWN OR UNKNOWN) IN, ON, UNDER, ABOUT
OR MIGRATING FROM OR ONTO THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT, OR BY
VIRTUE OF ANY COMMON LAW RIGHT (NOW EXISTING OR HEREINAFTER CREATED) RELATED TO
ENVIRONMENTAL CONDITIONS OR ENVIRONMENTAL MATTERS IN, ON, UNDER, ABOUT OR
MIGRATING FROM OR ONTO THE REAL PROPERTY. THE FOREGOING SENTENCE SHALL NOT RELIEVE (A)
SELLER OF ANY LIABILITY IT MAY HAVE WITH RESPECT TO ITS REPRESENTATION MADE IN SECTION 8.3(f)
OF THIS AGREEMENT, SUBJECT, HOWEVER, IN ALL RESPECTS, TO THE PROVISIONS SET
FORTH IN SECTION 8.5 HEREOF, AND (B) 8/9 TRANSFEREE OF ANY LIABILITY IT
MAY HAVE WITH RESPECT TO ANY ENVIRONMENTAL MATTER OR ENVIRONMENTAL CONDITION
IN, ON, UNDER, ABOUT, OR MIGRATING FROM, THE EXCLUDED REAL PROPERTY OR WITH
RESPECT TO THE ACTS OR OMISSIONS OF 8/9 TRANSFEREE AT THE EXCLUDED REAL
PROPERTY.
THE
TERMS AND CONDITIONS OF THIS SECTION 5.4 WILL EXPRESSLY SURVIVE THE
TERMINATION OF THIS AGREEMENT OR THE CLOSING, AS THE CASE MAY BE, AND, IF THE
CLOSING OCCURS, WILL NOT MERGE WITH THE PROVISIONS OF ANY CLOSING DOCUMENTS AND
ARE HEREBY DEEMED INCORPORATED INTO THE LLC ASSIGNMENT AND ASSUMPTION AS FULLY
AS IF SET FORTH AT LENGTH THEREIN.
NOTHING
IN THIS SECTION 5.4 SHALL NEGATE THE PRORATIONS UNDER SECTION 10.4.
Section 5.5 iStar
Financial Guaranty. iStar is
executing this Agreement for the sole purpose of guaranteeing to the Seller
Indemnified Parties any and all liability of Purchaser under Section 5.3(b). By its signature annexed to this Agreement,
iStar acknowledges that its guaranty is a guaranty of payment, and not of
collection.
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ARTICLE VI
TITLE AND SURVEY MATTERS
Section 6.1 Survey. Purchaser acknowledges receipt of the
Existing Survey. Any modification,
update or re-certification of the Existing Survey shall be at Purchasers
election and sole cost and expense. The
Existing Survey together with any re-certification thereof and/or update
Purchaser has elected to obtain, if any, is herein referred to as the Survey .
(a) Purchaser
acknowledges receipt from the Title Company of a current title insurance report
for the Property (the Title Report),
together with copies of the title exceptions listed thereon. All (i) exceptions to title set forth
in the Title Report and/or matters revealed by the Existing Survey,
(ii) matters which are the obligations of Schwab under the Schwab Lease,
(iii) documents and agreements contemplated by this Agreement to be
recorded against the Real Property on or prior to the Closing Date, including,
without limitation, the CREA, the CRA and the Updated Deed Notice, and
(iv) title exceptions caused or created (whether directly or indirectly)
by Purchaser or any Licensee Parties will be referred to herein as Permitted
Exceptions. In no event
shall any of the Permitted Exceptions constitute Title Defects (as hereinafter
defined).
(b) All
taxes, water rates or charges, sewer rents and special assessments, plus interest
and penalties thereon, which on the Closing Date are due and payable and/or are
liens against the Real Property and which the Property Owner is obligated to
pay and discharge will be credited against the Purchase Price (subject to the
provision for apportionment of taxes, water rates and sewer rents herein
contained) and without the need for Purchaser to raise as a Title Defect.
(c) If
on the Closing Date the Real Property shall be affected by any lien which,
pursuant to the provisions of this Agreement, is required to be discharged or
satisfied by Seller, Seller shall not be required to discharge or satisfy the
same of record provided the money necessary to satisfy the lien is retained by
the Title Company at Closing (with authority to pay in the event of enforcement
of such lien), and the Title Company either omits the lien as an exception from
the Title Policy or insures against collection thereof from or out of the Real
Property and/or the Improvements, and a credit is given to Purchaser for the recording
charges for a satisfaction or discharge
of such lien. Seller shall have no
obligation to remove any lien affecting the Real Property which is the
obligation of Schwab to remove pursuant to the provisions of the Schwab Lease.
(d) No
franchise, transfer, inheritance, income, corporate or other tax open, levied
or imposed against Seller, the Property Owner or any former owner of the
Property, that may be a lien against the Property on the Closing Date, shall be
an objection to title if the Title Company insures against collection thereof
from or out of the Real Property and/or the Improvements, and provided further
that Seller deposits with the Title Company a sum reasonably sufficient to
secure a release of the Real Property and/or Improvements from the lien
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thereof (with authority
to pay in the event of enforcement of such lien). If a search of title discloses judgments, bankruptcies, or other
returns against other persons having names the same as or similar to that of
Seller or the Property Owner, Seller will deliver (or cause the Property Owner
to deliver) to the Title Company an affidavit stating that such judgments,
bankruptcies or other returns do not apply to Seller or the Property Owner, as
the case may be, and such search results shall not be deemed Title Defects.
(e) Notwithstanding
anything to the contrary contained herein, except for Permitted Exceptions,
Seller shall be obligated to cure and/or satisfy or cause to be deleted as an
exception to title: (x) any standard
exceptions (to the extent that the Title Company is willing to delete the same
based solely upon receipt of the Survey and a customary affidavit from Seller
or the Property Owner); (y) any of the following exceptions and encumbrances
to the title to the Property as may be disclosed by the Title Report, all of
which shall be referred to herein as Monetary
Objections: (i) any deed
of trust, mortgage, or other security title, assignment of leases, negative
pledge, financing statement or similar security instrument entered into by
Seller, the Property Owner or any of Sellers Affiliates (including, without
limitation, PXR) and encumbering all or any portion of the Property (and
excluding any such instrument placed upon the Property against an interest of
any Schwab Party and which encumbers such Schwab Partys interest therein);
(ii) mechanics liens affecting the Property and (iii) any other liens
affecting the Property which can be satisfied by the payment of a specific,
liquidated amount not to exceed Five Hundred Thousand and 00/100 Dollars
($500,000.00) in the aggregate. To the
extent any Monetary Objection which Seller is obligated to remove has not been
removed at or prior to Closing, Purchaser shall be entitled to apply a portion
of the purchase proceeds reasonably necessary to effectuate such removal (or
withhold such portion as may be reasonably necessary to remove such Monetary
Objection) and Purchaser shall receive a credit against the Purchase Price for
any such amounts so applied or withheld.
Notwithstanding the foregoing to the contrary, if on the Closing Date
there shall be security interests filed against the Property, such items shall
not be Monetary Objections if (A) the personal property covered by such security
interests are no longer in or on the Real Property and will not be conveyed as
part of the Personal Property hereunder, and the Title Company either omits the
lien or security interest as an exception from the Title Policy or insures
against collection thereof from all of the Real Property and improvements
erected thereon, or (B) such personal property is the property of any Schwab
Party and Seller executes and delivers an affidavit to such effect. At Closing, Seller will deliver (or cause to
be delivered by Property Owner) such affidavits as reasonably required by the
Title Company to enable the Title Company to issue a non-imputation endorsement
to the Title Policy, which endorsement is at Purchasers sole cost and expense
and, without limiting the foregoing, any affidavits reasonably required by the
Title Company to omit any exception or provide affirmative insurance for any
mechanics liens in connection with the JMB Construction Contract and the JMB
Cooling Tower Contract. In addition,
Columbia shall cause its affiliates to execute such affidavits and other
documentation reasonably required by Title Company with respect to the Retained
Interest in connection with the issuance of the Title Policy and the
endorsements thereto.
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(a) In
the event Seller receives any written objections to matters disclosed by an
update to the Title Report or an update to the Existing Survey (collectively
and individually, a Title Defect) within the time periods
required under Sections 6.3(b) below, Seller may elect (but shall
not be obligated) to attempt to remove, or cause to be removed at its expense,
any such Title Defect, and shall provide Purchaser with notice, within five (5)
Business Days of its receipt of any such objection, of its intention to cure or
not to cure any such Title Defect. If
Seller elects to attempt to cure any Title Defect, the Scheduled Closing Date
may be extended by written notice from Seller to Purchaser at any time on or
prior to the Scheduled Closing Date, for a period up to but not to exceed sixty
(60) days in the aggregate (but in no event shall Seller have the right to
extend the Scheduled Closing Date beyond the Outside Closing Date), for the
purpose of such removal. In the event
that (i) Seller elects not to attempt to cure any such Title Defect, or (ii)
Seller fails to cure any such Title Defect within the period elected by Seller
but not to exceed sixty (60) days in the aggregate (but in no event shall Seller
have the right to extend the Scheduled Closing Date beyond the Outside Closing
Date), Seller shall so advise Purchaser and Purchaser shall have the right to
terminate this Agreement and receive a refund of the Earnest Money Deposit, or
to waive such Title Defect and proceed to the Closing without any reduction or
abatement of the Purchase Price.
Purchaser shall make such election within ten (10) days of receipt of
Sellers notice. If Purchaser elects to
proceed to the Closing, any Title Defects waived by Purchaser shall be deemed
Permitted Exceptions. This provision is
subject in all respects to Sellers obligations, and Purchasers rights, under Section
6.2(e). In any such event of
termination, Purchaser shall promptly return Purchasers Information to Seller,
after which neither party shall have
any further obligation to the other under this Agreement except for the
Termination Surviving Obligations.
(b) Notwithstanding
the foregoing, in the event further updates are made to the Title Report or
Survey which reveal new matters which are not Permitted Exceptions and are not
shown on the previous version of the Title Report or Survey, Purchaser may give
Seller notice of any such new matters disclosed by such update which Purchaser
deems unacceptable. Purchaser must
object in writing to any such new matters, if at all, before 5:00 p.m.
Eastern Standard Time on the fifth (5th) Business Day after receipt of any such
updated Title Report or Survey first disclosing said new matters. In the event Purchaser so timely notices
Seller, such items shall be subject to the process for Title Defects set forth
above. If Purchaser fails to timely
deliver such notice, all of such new matters shall be deemed Permitted
Exceptions.
ARTICLE VII
INTERIM OPERATING COVENANTS AND POST-CLOSING MATTERS
Section 7.1 Interim
Operating Covenants.
(a) Operations.
From the Effective Date until Closing, Seller shall, and shall cause Property
Owner, to continue to operate, manage and maintain the Real Property, Ground
Lease, Sublease, Improvements and other Property in the ordinary course of its
business and substantially in accordance with its present practice, subject to
ordinary wear and tear and
21
damage caused by any Schwab Party and further subject
to Article XI of this Agreement.
In addition, from the Effective Date until Closing, unless required by
any Authorities or Governmental Regulations, or the Schwab Lease, or in the
case of an emergency or on account of a casualty at the Property (in which case
the provisions of Section 11.1 of this Agreement shall apply), Seller
shall not, and shall cause Property Owner not to, make any capital expenditure
(or commitments therefor) at the Property (x) that aggregate in excess of
$500,000, and (y) the payment for which shall be the obligation of Property
Owner after the Closing.
(b) Compliance with Governmental
Regulations/Waterfront Development Permit.
(i) From the Effective
Date until Closing, Seller shall not, and shall cause Property Owner not to,
knowingly take any action that would result in a failure to comply in all
material respects with all Governmental Regulations applicable to the Property
Ground Lease, Sublease, Schwab Lease, Sellers LLC Interest and with any
covenants, conditions, restrictions, encumbrances and other title exception
documents affecting the Property, it being understood and agreed that prior to
Closing, Seller will have the right to contest any such Governmental
Regulations and any such title exception documents.
(ii) Purchaser
acknowledges that NJDEP has issued that certain Waterfront Development Permit,
issued July 1, 1999, as modified by Modification to Waterfront Development
Permit #0906-92-0005.4 (Modification file #0906-92-0005.5) dated as of December
5, 2000 (the Waterfront Development
Permit), a copy of which Purchaser has reviewed as part of the
Documents, which grants to AFE, and its successors and assigns, the right to
develop the Real Property, Plaza VIII and Plaza IX, in accordance with and pursuant
to the provisions thereof. Purchaser
acknowledges that the Building fully utilizes the development rights
attributable to the Real Property, and that it is the intention of the parties
that all remaining development rights accruing under the Waterfront Development
Permit (as well as any other development rights accruing under all other of the
Documents) are not being transferred to Purchaser on the Closing Date, but are
instead being transferred to 8/9 Transferee as part of the Excluded Real Property. In connection therewith, it is a condition
(the Permit Condition) to
Closing that either (x) the Waterfront Development Permit is bifurcated by
NJDEP prior to Closing such that after such bifurcation there shall be two
permits, one relating to Plaza X (the Plaza
X Bifurcated Waterfront Permit) and one relating to Plazas VIII
and IX (the 8/9 Bifurcated Waterfront
Permit), which permits must also comply with the remaining
provisions of this Section 7.1(b)(ii), or (y) 8/9 Transferee, in
the 8/9 Transferee Guaranty (as hereinafter defined), (I) use commercially
reasonable efforts to obtain such bifurcation following the Closing,
(II) satisfy any obligations of Property Owner (as reconstituted on the
Closing Date with Purchaser as the indirect or direct owner thereof) (Post-Transfer AFE) following the
Closing under the Waterfront Development Permit until such time as the
Waterfront Development Permit is bifurcated in accordance with the provisions
of this Section 7.1(b)(ii), including, without limitation, the
completion of any traffic mitigation studies, but specifically excluding the
maintenance of the Waterfront Walkway located on the Real Property, which shall
from and after the Closing be maintained by Post-Transfer AFE at its sole cost
and expense. If the Waterfront
Development Permit is not bifurcated and 8/9 Transferee is to guaranty the
22
foregoing obligations, then the form of the 8/9
Transferee Guaranty shall be modified (in form reasonably satisfactory to both
Purchaser and Seller) at Closing to reflect the addition of such guaranty, and
provided the 8/9 Transferee Guaranty is executed at Closing, then the Permit
Condition shall be deemed satisfied. If
Seller and Purchaser are unable to reasonably agree upon the modifications to
the 8/9 Transferee Guaranty for the performance of 8/9 Transferees obligations
under this Section 7.1(b)(ii), then such failure shall merely constitute
the failure of a condition precedent to Purchasers obligation to close this
transaction and shall not be deemed a breach or default on the part of
Seller. The provisions of the 8/9
Transferee Guaranty with respect to the Waterfront Development Permit shall
automatically terminate upon the final satisfaction of such obligations and
liabilities. Seller will advise
Purchaser in advance of any meetings or discussions with any applicable agency
involved in the review of the bifurcation of the Waterfront Development Permit
and Purchaser shall have the right to participate in any such conversations or
meetings. Purchaser and Post-Transfer
AFE have no obligation to seek or obtain the bifurcation of the Waterfront
Development Permit from and after the Closing.
In order for the Plaza X Bifurcated Waterfront Permit to comply with the
provisions of this Section 7.1(b)(ii), it shall not contain any
obligation on the part of Post-Transfer AFE to undertake any traffic mitigation
program or impose any new obligations or liabilities on the part of
Post-Transfer AFE other than those that pertain to the Building and the Real
Property (unless Purchaser consents thereto, which consent shall not be
unreasonably withheld), it being acknowledged by Purchaser that the obligation
to maintain the Waterfront Walkway located on the Real Property is not a new
obligation or liability.
(c) Service
Contracts. From the
Effective Date until Closing, Seller shall not, and shall cause Property Owner
to not, amend, modify or renew any existing service contracts or enter into any
new service contracts unless (i) such amended, modified, renewed or new service
contract will expire on or prior to the Closing Date or is terminable on not
more than thirty (30) days notice without penalty or (ii) unless Purchaser
consents thereto in writing, which approval will not be unreasonably withheld,
conditioned or delayed. In addition to
the foregoing, from the Effective Date until Closing, Seller shall provide
Purchaser with notice and copies of any such amendments, modifications or
renewals of any existing service contracts or any new service contracts.
(d) Notices.
From the Effective Date until Closing, to the extent received by Property
Owner, Seller shall, and shall cause Property Owner to, promptly deliver to
Purchaser copies of written default notices, written notices of lawsuits,
arbitrations, administrative proceedings and other material hearings and
written notices of violations affecting the Ground Lease, the Sublease, the
Schwab Lease, Sellers LLC Interest and/or the other Property.
(e) Schwab
Lease, Sublease and Ground Lease. (i) From the Effective Date until Closing,
Seller shall not, and shall cause Property Owner and PXR to not, amend, modify,
extend or terminate the Schwab Lease, the Sublease and the Ground Lease or
enter into any consent or other agreement with respect to the Schwab subleases
(except, in each instance, to the extent required pursuant to the terms of the
applicable document or to the extent that any such required consent sought by
Schwab pursuant to the provisions of any of the foregoing documents must be
given by PXLA prior to the then Scheduled Closing Date, in which case
23
Seller shall consult with Purchaser and provide
Purchaser with copies of the relevant documentation prior to granting such
consent (but Seller shall have the right to grant or deny such consent in its
sole discretion)). Seller hereby
expressly consents to Purchaser, at any time prior to or at Closing,
negotiating and entering into amendments and modifications to the Schwab Lease,
the Sublease and the Ground Lease and to enter into any other consents or other
agreements with respect to such leases so long as any such amendment,
modification, consent or other agreement is not effective unless and until the
Closing occurs, and Seller receives copies of any such amendments,
modifications, consents and other agreements promptly after Purchasers
execution thereof (but in all events prior to or at Closing). Seller will reasonably cooperate in any
escrow arrangements in connection with any amendments and modifications to the
Schwab Lease negotiated by Purchaser in accordance with this Section 7.1(e)(i). The amendment between Purchaser and Schwab
which is in escrow on the date hereof is called the Existing Escrow Schwab
Amendment.
(ii) Attached
hereto as Schedule 7.1(e)(ii) is a true and correct itemization of
Operating Expenses for the partial Operating Years from the Commencement Date
(as such terms are defined in the Schwab Lease) through May 31, 2003.
(f) Standstill.
(i) From
the Effective Date until Closing, Seller
shall not (and Seller shall cause Property Owner not to): (i) market Sellers LLC Interest, the Ground
Lease, the Sublease, the Schwab Lease or the other Property for sale or
disposition to any other party, or sell, encumber, or grant any interest in or
to Sellers LLC Interest, the Ground Lease, Sublease, Schwab Lease or the
Property, (ii) solicit, negotiate or accept offers or otherwise enter
into any binding or non-binding agreement for a purchase, financing or joint
venture involving the Property or any
interest therein with any other person or entity, and (iii) other
than Permitted Transfers, encumber, dispose of, sell, convey, assign or pledge
any interest in the Property or any tax abatement or other tax relief benefits
applicable to the Property, or any interest
therein or otherwise enter into any agreement, other than any Permitted
Exceptions, affecting or encumbering or agreeing to dispose of, sell, convey,
assign or pledge any interest in the Property, the Ground Lease, the Sublease,
the Schwab Lease or any interest therein,
which agreement would be consummated prior to or otherwise the survive the
Closing. Notwithstanding the foregoing,
from and after the date that the Approvals shall have been obtained and after
the conveyance of the Excluded Real Property to 8/9 Transferee, Seller shall
have the right to record (x) an agreement which amends the Ground Lease in the
form annexed hereto as Exhibit 7.1(f)(i)-1
(the Amendment to Ground Lease
) and (y) an agreement which amends the Sublease in the form annexed
hereto as Exhibit 7.1(f)(i)-2 (the
Amendment to Sublease ;
the Amendment to Ground Lease and the Amendment to Sublease are collectively
referred to herein as the Amended Leases
) in order to remove the Excluded Real Property from the scope of the Ground
Lease and the Sublease, and to remove the Ground Lease and the Sublease as
encumbrances upon the Excluded Real Property.
Purchaser hereby consents to the recordation of the Amended Leases against
the Real Property, and acknowledges that the Amended Leases constitute
Permitted Exceptions.
24
(ii) Seller
shall have the right to grant an easement for that portion of the Real
Property, more particularly described on Schedule
7.1(f)(ii) annexed hereto, to the
City (the Dedication). Purchaser hereby consents to the Dedication
in the form annexed hereto as Exhibit
7.1(f)(ii) being recorded against the Real Property, and
acknowledges that the Dedication shall constitute a Permitted Exception.
(iii) Purchaser agrees that (i) Harsimus (and its
Affiliates) shall have the right, at their sole cost and expense, to erect a
memorial upon the Real Property in the location and of a type more particularly
identified and described on Exhibit 7.1(f)(iii)
annexed hereto (the Memorial),
and (ii) the obligation to maintain the Memorial from and after the Closing
Date shall be as is set forth in the CREA.
(iv) Purchaser
agrees that AFE shall have the right to, and shall, transfer all of its right,
title and interest in and to the Excluded Real Property to 8/9 Transferee.
(g) Further
Encumbrances. Except for
the Permitted Exceptions and as may otherwise be permitted pursuant to the
express provisions of this Agreement, Seller shall not (and Seller shall cause Property Owner and PXR to not) voluntarily
alter or encumber in any way Sellers title to Sellers LLC Interest and
Property Owners title to the Property or the Ground Lease or the Sublease or
the Schwab Lease after the Effective Date without the prior written consent of
Purchaser. In addition to the
foregoing, from the Effective Date until Closing, Seller shall provide
Purchaser with notice and copies of any such alterations to or encumbrances on
Sellers title to Sellers LLC Interest and Property Owners title to the
Property or the Ground Lease or the Sublease or the Schwab Lease.
(h) Updated
Deed Notice. Purchaser
acknowledges that a Declaration of Environmental Restrictions, a copy of which
Purchaser has reviewed during its due diligence as part of the Documents, is
currently recorded in the title records of the Real Property (the Existing Deed Notice). The Existing Deed Notice reflects that
contaminated historic fill exists at the Real Property, which must be contained
as provided in the Existing Deed Notice and which cannot be disturbed without
the prior consent of NJDEP. Prior to
the commencement of the construction of the Building, AFE notified the NJDEP
that it intended to disturb the two feet of clean fill acting as an
engineering control (as that term is defined in Environmental Laws) over the
historic fill at the Real Property, in connection with its construction
activities. AFE also sought the consent
of NJDEP to do so. As a condition to
NJDEPs consent to the construction activities and the disturbance of the
engineering control, AFE agreed to record an updated Deed Notice reflecting the
current site conditions after the construction activities have been completed
(the Updated Deed Notice). In order to complete the foregoing, Seller
entered into a Memorandum of Agreement (MOA)
with the NJDEP (a copy of which has been delivered to Purchaser as part of the
Documents) in order to obtain its approval to record the Updated Deed Notice in
the title records of the Real Property and to request a termination of the
Existing Deed Notice and Seller recorded the Updated Deed Notice and
termination of Existing Deed Notice, in the title records of the Real Property
in accordance with N.J.S.A. 58:10B-13.
Purchaser hereby consents to the Updated Deed Notice and termination of
Existing Deed Notice being recorded
25
against the Real Property, and acknowledges that the
Updated Deed Notice and termination of Existing Deed Notice constitutes a
Permitted Exception.
(i) Approvals. From and after the Effective Date, Seller
and Purchaser shall act in good faith and cooperate with each other in
connection with Sellers efforts to timely obtain the Approvals, which shall
include, without limitation, executing documents, providing information as to
the direct and indirect beneficial interest holders in Purchaser, and providing
such other information as the applicable party may request. The costs in connection with obtaining the
Approvals shall be borne in the manner more particularly set forth in Section
10.5 of this Agreement. Purchaser
acknowledges that a Certificate of Substantial Completion will be recorded
against the Real Property and will constitute a Permitted Exception. Seller will use good faith efforts to obtain
such additional consents from JCRA as Purchaser may reasonably request, but
such additional consents shall not be conditions to Purchasers obligation to
close hereunder. Without Purchasers
prior written consent, Seller shall not, and shall cause the Property Owner not
to, (a) amend or modify the Financial Agreement, except as it may be amended by
the Amended Financial Agreement, or (b) negotiate, settle, compromise, or
consent or agree to any change in, the Total Project Cost (as defined in the
Financial Agreement) in any manner that directly or indirectly does or could
increase the Total Project Cost beyond $78,674,777.
(j) CREA.
At the Closing, Seller shall cause that certain cross reciprocal
easement agreement in the form annexed hereto as Exhibit 7.1(j) (CREA)
to be recorded against the Real Property, which will provide for, inter alia, pedestrian easements, view
corridors, certain parking rights, means of access, rights related to
stormwater runoff and access to utilities, all of which shall benefit and
burden the Real Property and the Excluded Real Property, as more particularly
described in the CREA. Purchaser
acknowledges that the CREA will be recorded against the Real Property and
constitutes a Permitted Exception. None
of Seller, Property Owner and 8/9 Transferee shall voluntarily cause to be
placed on the Excluded Real Property any encumbrance which would be superior to
the CREA.
(k) Covenant and Restriction Agreement. Purchaser acknowledges that a certain
Reciprocal Operation and Easement Agreement for the Harborside Financial
Center, dated as of December 4, 1995 (as amended, the ROEA) is currently recorded in the
title records of certain of the other parcels within the Harborside Financial
Center, and that Purchaser has reviewed the ROEA during its due diligence as
part of the Documents. At the Closing,
Seller shall enter in an agreement, in the form annexed hereto as Exhibit 7.1(k) (the CRA), to be recorded against the Real
Property; it being understood that the CRA shall, inter alia, subject the Real Property to certain provisions
of the ROEA and, require the continued use of the name Plaza X and the
Harborside Financial Center at the Real Property. Purchaser acknowledges that the CRA will be recorded against the
Real Property and constitutes a Permitted Exception.
(l) Insurance. From the Effective Date until Closing Seller shall, and shall
cause Property Owner and PXR to, maintain existing insurance policies with
respect to the Property (or replacements or renewals thereof) in full force and
effect.
26
(m) Taxes.
From the period beginning on the Effective Date until Closing, Seller
shall cause Property Owner and PXR to:
(i) pay all real estate taxes and assessments which are due and payable
during such period (subject to proration); and (ii) pay all franchise taxes
(subject to proration) due and payable during such period for each of Seller,
Property Owner and PXR in all jurisdictions where such entity was formed or
where such entity is qualified to transact business.
(n) Zoning. Except as expressly provided in this Agreement, from the
Effective Date until Closing, Seller shall not, and shall cause Property Owner
and PXR not to, initiate any zoning reclassifications or variance order with
respect to the Property, impose or incur any restrictive covenant or execute a
subdivision plat or otherwise voluntarily affect the zoning and permitted uses
of the Property.
(o) Walkway Easement. At or prior to the Closing, Seller shall
cause that certain walkway easement, in the form annexed hereto as Exhibit 7.1(o) (the Walkway Easement ), to be recorded
against the Real Property, which will provide for a thirty (30) foot-wide
pedestrian walkway easement traversing the waterfront portion of the Property
(the Waterfront Walkway)
for use by the general public which shall burden the Real Property, to be more
particularly described in the Walkway Easement. Purchaser acknowledges that the Walkway Easement will be recorded
against the Real Property and constitutes a Permitted Exception.
Section 7.2 JMB Construction Contract and JMB Cooling Tower
Contract. If at Closing,
all amounts required to be paid to JMB under the JMB Construction Contract and
JMB Cooling Tower Contract have not been paid and Seller has not received final
lien waivers from JMB with respect to such contracts and any subcontracts
entered into by JMB under the JMB Construction Contract and JMB Cooling Tower
Contract, Seller shall remain responsible for obtaining such final lien waivers
(but only to the extent that the statutory period for the applicable contractor
to file a lien has not expired) and for paying such remaining amounts and
Purchaser shall cooperate with Seller to accomplish the same.
Section 7.3 Schwab Lease. From and after the Effective Date through and after Closing,
Seller and Property Owner (prior to giving effect to the transfers at Closing)
shall make all commercially reasonably efforts to cooperate with respect to
inquiries and information requests relating to audit rights of amounts included
in the Base Operating Year Expenses provided in the Schwab Lease.
Section 7.4 Excess Net Profits; Fines. To the extent (i) the City audit of the
Property shall conclude that there are any excess net profits payable under the
Financial Agreement with respect to the operation of the Building and the
Property for any period prior to Closing or (ii) any fines are levied
against Property Owner by reason of Sellers failure to perform any of its
obligations under the Financial Agreement or PECA for any period prior to
Closing, Seller shall be responsible for the payment in full of any such excess
net profits or fines, subject to (x) Sellers right to contest the
conclusion of any such audit or the imposition of any such fines, as the case
may be, in the name of Property Owner, provided that Property Owner has been
apprised of such contest and Purchaser, at Purchasers expense, shall have the
right to participate
27
in such contest, and (y) Purchaser cooperating with
Seller as may be reasonably necessary in connection with such contest, and
Sellers obligation to pay such excess net profits or fines shall only be to
the extent the conclusion of such audit or the imposition of such fines, as the
case may be, is final and non-appealable.
From and after Closing, without Sellers prior written consent,
Purchaser shall not, and shall cause the Property Owner not to, (a) amend or
modify the Financial Agreement or PECA in any manner that directly or
indirectly does or could increase the excess net profits or fines which Seller
is responsible for hereunder, or (b) negotiate, settle, compromise, or consent
or agree to any change in, the Financial Agreement or PECA in any manner that
directly or indirectly does or could increase the excess net profits or fines
which Seller is responsible for hereunder.
Section 7.5 OCIP.
Purchaser shall pay to Seller any amounts actually received by Purchaser
or Property Owner from and after Closing under the OCIP, including any refunds
or savings thereunder. Seller shall be
responsible for any payments which may be required to be made by Property Owner
under the OCIP after the Closing.
Section 7.6 EQR Release. Seller shall use commercially reasonable efforts to obtain a
release of AFE from any further obligations under that certain Easement
Agreement dated March 21, 2001 by and among AFE, Cali Harborside (Fee) Associates
L.P. and EQR Lincoln North Pier L.L.C.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Section 8.1 Harsimus Representations and Warranties. Harsimus represents and warrants to
Purchaser the following:
(a) Status.
Harsimus is a limited liability company, duly organized and validly existing
and in good standing under the laws of the State of New Jersey.
(b) Authority. The execution and delivery of this Agreement
and all other documents now or hereafter to be executed and delivered by
Harsimus pursuant to this Agreement (collectively, the Harsimus Documents ) and the
performance of Harsimus obligations hereunder and under the Harsimus Documents
have been duly authorized by all necessary action on the part of Harsimus, and
this Agreement constitutes, and the Harsimus Documents will constitute, the
legal, valid and binding obligation of Harsimus, enforceable in accordance with
their terms, subject to bankruptcy, reorganization and other similar laws
affecting the enforcement of creditors rights generally and except as may be
limited by general equitable principles.
The person signing this Agreement on behalf of Harsimus has been duly
authorized to sign and deliver this Agreement on behalf thereof.
(c) Non-Contravention. The execution and delivery of this Agreement
and the Harsimus Documents by Harsimus and the consummation by Harsimus of the
transactions contemplated hereby will not (i) violate any judgment, order,
injunction, decree, regulation or ruling of any court or Authority having
jurisdiction over Harsimus, (ii) conflict with, result in a
28
breach of, or constitute a default under the
organizational documents of Harsimus, (iii) violate any note or other evidence
of indebtedness, any mortgage, deed of trust or indenture to which Harsimus is
a party or by which it is bound, or (iv) provided the Approvals are
obtained, violate any lease or other material agreement or instrument to which
Harsimus is a party or by which it is bound.
(d) Consents. Other than the receipt of the Approvals, no consent, waiver,
approval or authorization is required from any person or entity (that has not
already been obtained) in connection with the execution and delivery of this
Agreement and the Harsimus Documents by Harsimus or the performance by Harsimus
of the transactions contemplated hereby.
(e) Suits and
Proceedings. Except as
listed on Schedule 8.1(e), there are no legal actions, suits
or similar proceedings pending and served, or, to Harsimuss Knowledge,
threatened in writing against Harsimus, which (i) are not adequately
covered by existing insurance and (ii) if adversely determined, would
materially and adversely affect the value of the Harsimus Interest or Harsimus
ability to consummate the transactions contemplated hereby.
(f) Bankruptcy. Harsimus has not (A) commenced a
voluntary case, or had entered against it a petition, for relief under any
federal bankruptcy act or any similar petition, order or decree under any
federal or state law or statute relative to bankruptcy, insolvency or other
relief for debtors, (B) caused, suffered or consented to the appointment
of a receiver, trustee, administrator, conservator, liquidator or similar
official in any federal, state or foreign judicial or non-judicial proceeding,
to hold, administer and/or liquidate all or substantially all of its assets, or
(C) made an assignment for the benefit of creditors.
(g) Non-Foreign
Entity. Harsimus is not
a foreign person (within the meaning of Section 1445(f)(3) of the
Code).
(h) Harsimus Interest.
Harsimus has good title to the Harsimus Interest and has not
transferred, assigned, sold, conveyed, pledged, mortgaged, granted a security
interest in, or otherwise disposed of the Harsimus Interest or any portion
thereof or interest therein or granted any option to any person or entity to
acquire such interest. The
Harsimus Interest is free and clear of all liens, encumbrances, liabilities,
claims, exceptions, covenants and restrictions of any kind or character,
including but not limited to, any security interests or, any restriction on
sale or assignment or granting of any option, right or agreement for the
purchase or acquisition of the same or any interest in the same.
The provisions of this Section 8.1 are subject
to the limitations on liability with respect to the representations, warranties
and covenants of Harsimus set forth in Section 8.5 of this Agreement.
Section 8.2 Columbia Representations and Warranties. Columbia represents and warrants to
Purchaser the following:
(a) Status.
Columbia is a limited liability company, duly organized and validly existing
and in good standing under the laws of the State of New Jersey.
29
(b) Authority. The execution and delivery of this Agreement
and all other documents now or hereafter to be executed and delivered by
Columbia pursuant to this Agreement (collectively, the Columbia Documents) and the
performance of Columbias obligations hereunder and under the Columbia
Documents have been duly authorized by all necessary action on the part of
Columbia, and this Agreement constitutes, and the Columbia Documents will
constitute, the legal, valid and binding obligation of Columbia, enforceable in
accordance with their terms, subject to bankruptcy, reorganization and other
similar laws affecting the enforcement of creditors rights generally and
except as may be limited by general equitable principles. The person signing this Agreement on behalf
of Columbia has been duly authorized to sign and deliver this Agreement on
behalf thereof.
(c) Non-Contravention. The execution and delivery of this Agreement
and the Columbia Documents by Columbia and the consummation by Columbia of the
transactions contemplated hereby will not (i) violate any judgment, order,
injunction, decree, regulation or ruling of any court or Authority having
jurisdiction over Columbia, (ii) conflict with, result in a breach of, or
constitute a default under the organizational documents of Columbia, (iii)
violate any note or other evidence of indebtedness, any mortgage, deed of trust
or indenture to which Columbia is a party or by which it is bound, or
(iv) provided the Approvals are obtained, violate any lease or other
material agreement or instrument to which Columbia is a party
or by which it is bound.
(d) Consents. Subject to receipt of the Approvals, no consent, waiver, approval
or authorization is required from any person or entity (that has not already
been obtained) in connection with the execution and delivery of this Agreement
and the Columbia Documents by Columbia or the performance by Columbia of the
transactions contemplated hereby
(e) Suits and
Proceedings. Except as
listed on Schedule 8.2(e), there are no legal actions, suits
or similar proceedings pending and served, or, to Columbias Knowledge,
threatened in writing against Columbia, which (i) are not adequately
covered by existing insurance and (ii) if adversely determined, would
materially and adversely affect the value of the Columbia Interest or Columbia
ability to consummate the transactions contemplated hereby.
(f) Bankruptcy. Columbia has not (A) commenced a
voluntary case, or had entered against it a petition, for relief under any
federal bankruptcy act or any similar petition, order or decree under any federal
or state law or statute relative to bankruptcy, insolvency or other relief for
debtors, (B) caused, suffered or consented to the appointment of a
receiver, trustee, administrator, conservator, liquidator or similar official
in any federal, state or foreign judicial or non-judicial proceeding, to hold,
administer and/or liquidate all or substantially all of its assets, or
(C) made an assignment for the benefit of creditors.
(g) Non-Foreign
Entity. Columbia is not
a foreign person (within the meaning of Section 1445(f)(3) of the
Code).
(h) Columbia Interest. Columbia has good title to the Columbia
Interest and has not transferred, assigned, sold, conveyed, pledged, mortgaged,
granted a security interest in,
30
or otherwise disposed of the Columbia Interest or any
portion thereof or interest therein or granted any option to any person or
entity to acquire such interest. The
Columbia Interest is free and clear of all liens, encumbrances, liabilities,
claims, exceptions, covenants and restrictions of any kind or character,
including but not limited to, any security interests or, any restriction on
sale or assignment or granting of any option, right or agreement for the
purchase or acquisition of the same or any interest in the same.
The provisions of
this Section 8.2 are subject to the limitations on liability with
respect to the representations, warranties and covenants of Columbia set forth
in Section 8.5 of this Agreement.
Section 8.3 Sellers
Representations and Warranties.
Seller represents and warrants to Purchaser the following:
(a) Non-Contravention. The consummation of the transactions
contemplated hereby will not, provided the Approvals are obtained, violate any
judgment, order, injunction, decree, regulation or ruling of any court or
Authority having jurisdiction over the Property, the Sellers LLC Interests,
the Seller, the Property Owner or PXR.
(b) Suits and
Proceedings/Insurance.
(i) Except
as listed in Schedule 8.3(b)(i), there are no legal actions,
suits, arbitrations, administrative proceedings or similar proceedings pending
and served, or, to Sellers Knowledge, threatened in writing against Property
Owner, PXR or the Property which (i) are not adequately covered by existing
insurance and (ii) if adversely determined, would materially and adversely
affect the value of the Property (or the continued operations thereof), any
rights to develop the Property or the PILOT, or Sellers ability to consummate
the transactions contemplated hereby.
(ii) Attached
hereto as Schedule 8.3(b)(ii) (the Schedule
of Insurance by Property Owner) is a correct and complete list,
in all material respects, of the types and amounts of insurance coverage
maintained by the Property Owner and in force with respect to the Property,
Ground Lease or Sublease. Property
Owner has not received any notice in writing from the companies issuing such
insurance which threatens to withdraw such coverage or requiring that any work
be performed to preserve such coverage.
All premiums on existing insurance policies which are due and payable
prior to the Closing Date shall be paid.
(c) Leases/Tenants.
(i) As
of the Effective Date, the only tenant (excluding subtenants) at the Building
is Schwab. Schedule 8.3(c)(i)-1 annexed
hereto is a true and complete schedule identifying the Schwab Lease and all
material guarantees, amendments and modifications thereto. Schedule
8.3(c)(i)-2 annexed hereto is a
true and complete schedule identifying the Sublease and all material amendments
and modifications thereto, other than the Amendment to Sublease, which is not
reflected on said schedule. Schedule 8.3(c)(i)-3
annexed hereto is a true and complete schedule identifying the Ground Lease and
all amendments and modifications thereto, other than the Amendment to Ground
Lease, which is not reflected on said schedule.
31
The Documents made available to Purchaser pursuant to Section 5.2
hereof include true and correct copies of (i) the Schwab Lease (as described on
Schedule 8.3(c)(i)-1),
(ii) the Sublease (as described on Schedule
8.3(c)(i)-2), and (iii) the Ground Lease (as described on Schedule 8.3(c)(i)-3).
(ii) Except
as set forth on Schedule 8.3(c)(ii),
no written claim of material default (which remains uncured) under the Schwab
Lease has been given or received by any party thereto prior to the date hereof
and Seller has not received written notice from Schwab claiming any rights of
set-off or counterclaim under the Schwab Lease.
(iii) To Sellers
Knowledge, Schedule 8.3(c)(iii)
is a true and correct list, in all material respects, of subleases under the
Schwab Lease at the Building (collectively, the Schwab Subleases).
To Sellers Knowledge, the Documents made available to Purchaser
pursuant to Section 5.2 hereof include copies of all the Schwab
Subleases in Sellers, AFEs, PXURAs, PXLAs and PXRs possession.
(d) Contracts. Schedule 8.3(d)(1) is a true and
correct list of all material written contracts and agreements (collectively, Contracts ), other than the Ground
Lease, Sublease and the Schwab Lease, which will be binding upon Purchaser
(whether directly or indirectly) and/or the Property after the Closing. The Documents made available to Purchaser
pursuant to Section 5.2 hereof include copies of all of the
Contracts. Except as set forth on Schedule 8.3(d)(2), no written claim of
a material default (which remains uncured) or rights of set-off or counterclaim
under the Contracts has been given or received by any party prior to the date
hereof. Schedule 8.3(d)(3)
sets forth the amount, if any, remaining to be paid under the JMB Contract and
the JMB Cooling Tower Contract. Schedule
8.3(d)(4) is a true and
correct list of all Warranties delivered to Seller under the JMB Contract and
the JMB Cooling Tower Contract, excluding the warranties set forth in such
contracts. To Sellers knowledge, each of the Warranties set forth on Schedule 8.3(d)(4) is in full force and
effect and, except as set forth on Schedule
8.3(d)(5), there are no rights of set-off or counterclaim under
any of such Warranties.
(e) Legal
Compliance. Neither
Seller nor Property Owner has received any written notices or citations of any
violations of any applicable local, state or federal law, municipal ordinance
or regulation, order, rule or requirement of any Federal, State or municipal
department or agency having jurisdiction over or affecting the Property or the
construction, management, ownership, maintenance, operation, use, improvement,
acquisition or sale thereof (including, without limitation, building, health
and environmental laws, regulations and ordinances) which would have a material
adverse effect on a Property as currently owned, occupied and operated. Neither Seller nor Property Owner has received
any written notification from any governmental or public authority that the
Property is in violation of any applicable fire, health, building, use,
occupancy or zoning laws where such violation remains outstanding and, if
unaddressed, would have a material adverse effect on the use of the Property as
currently owned, occupied and operated.
(f) Environmental. Except as may be disclosed in any of the
environmental reports described on Schedule
8.3(f) (collectively, the Environmental Reports ), copies of
32
which have been provided to Purchaser, (i) neither
Seller nor Property Owner has received any written notice of any violation of
any Environmental Law with respect to the Property, and (ii) neither Seller
nor Property Owner has asserted in writing that Schwab has caused any violation
of any Environmental Law with respect to the Property. Seller has caused the Updated Deed Notice
and the termination of the Existing Deed Notice, in accordance with N.J.S.A.
58:10B-13, to be submitted for recording in the title records of the Real
Property in the official land records of the City or the County Recorders
Office of Hudson County, New Jersey.
(g) Bankruptcy. Neither Seller nor Property Owner has
(A) commenced a voluntary case, or had entered against it a petition, for
relief under any federal bankruptcy act or any similar petition, order or
decree under any federal or state law or statute relative to bankruptcy,
insolvency or other relief for debtors, (B) caused, suffered or consented
to the appointment of a receiver, trustee, administrator, conservator,
liquidator or similar official in any federal, state or foreign judicial or
non-judicial proceeding, to hold, administer and/or liquidate all or substantially
all of its assets, or (C) made an assignment for the benefit of creditors.
(h) Financial Matters.
Attached hereto as Exhibit 8.3(h)
are true, correct and complete copies, in all material respects, of the
Financial Statements. The Financial
Statements present fairly in all material respects the financial position of
AFE (together with its consolidated subsidiaries) as of the date thereof in
accordance with GAAP. As of the date of
the Financial Statements, there were no material liabilities, whether accrued,
contingent, absolute, determined, determinable or otherwise, of AFE (together
with its consolidated subsidiaries, including, without limitation, PXURA, PXLA
and PXR) required pursuant to GAAP to be reflected in the Financial Statements
or disclosed in the notes thereto which were not so reflected or
disclosed. Since the date of the
Financial Statements, no material liabilities have been incurred by AFE
(together with its consolidated subsidiaries, including, without limitation,
PXURA, PXLA and PXR) which would be required to be reflected in a balance sheet
of AFE (together with its consolidated subsidiaries, including, without
limitation, PXURA, PXLA and PXR) prepared in accordance with GAAP, other than
liabilities incurred in the ordinary course of AFEs (together with its
consolidated subsidiaries, including, without limitation, PXURA, PXLA and PXR)
business consistent with past practice or as disclosed in the schedules and
liabilities.
(i) Licenses and Permits.
Schedule 8.3(i)
contains a complete and correct list of all material Licenses and Permits
issued by all applicable governmental authorities to the Property Owner with
respect to the ownership, management and operation of the Property. The Documents made
available to Purchaser pursuant to Section 5.2 hereof include
copies of each License and Permit existing on the date hereof. Neither Property Owner nor
PXR has not received written notice that any License and Permit has been or is
threatened to be revoked. The
consummation of the transactions contemplated hereby shall not cause any
License and Permit to be terminated or revoked. Seller has no knowledge of any continuing obligations which will
be binding upon the Property Owner under the Redevelopment Agreement other than
such obligations which are contained in the original Redevelopment Agreement
and the Amendments dated January 7, 1986, April 30, 1991, August 11, 1993,
January 28, 1997, June 10, 1997 and December 19, 2001.
33
(j) Taxes. None of PXLA, PXR, PXURA or AFE has filed an election under
Treasury Regulation Section 301.7701-3 to be classified other than as
provided in Treasury Regulation Section 301.7701-3(b).
(k) Leasing
Commission Agreements.
The Leasing Commission Agreements constitute all of the leasing
agreements to which Property Owner is a party and which affect the
Property. The Documents made available
to Purchaser pursuant to Section 5.2 hereof include copies of all
Leasing Commission Agreements listed on Schedule
8.3(k).
(l) Mortgage Liens. As of the date hereof, there is no
outstanding mortgage lien affecting the Property. Property Owner has not made any assignment, pledge or mortgage
of, or granted any security interest in, any portion of the Property.
(m) Encumbrances. None of AFE, PXR, PXURA and PXLA has entered into any written
contracts for the sale of the Property, Ground Lease, Sublease, PXLAs interest
in the Schwab Lease or Sellers LLC Interests which remain binding on any of
AFE, PXR, PXURA and PXLA and, other than provided in the Schwab Lease, none of
Columbia, Harsimus, AFE, PXR, PXURA and PXLA has granted, directly or
indirectly, any currently effective options to purchase the Property, Ground
Lease, Sublease or PXLAs interest in the Schwab Lease. Other than as set forth in the Schwab Lease,
no person, firm or entity has any rights to acquire an ownership interest in
the Property including, without limitation, any rights of first refusal, rights
of reverter or rights of first offer relating to the Property, Ground Lease,
Sublease or PXLAs interest in the Schwab Lease. Other than in favor of Seller, there are no options to purchase
or rights to acquire an ownership interest, including, without limitation, rights
of first refusal, rights of reverter or rights of first offer, with respect to
the Sellers LLC interests.
(n) Condemnation. In the past two years, none of Seller, Property Owner or PXR has
received written notice of any pending or contemplated condemnation or eminent
domain proceedings affecting the Property, and to Sellers Knowledge, there is
no: (i) pending or contemplated
annexation or condemnation proceeding affecting, or which may affect, all or
any portion of the Property; or (ii) proposed change in road patterns or grades
which may adversely affect access to any roads providing a means of ingress to
or egress from the property.
(o) Employees. None of AFE, PXR, PXURA and PXLA has or has ever had any
employees. None of AFE, PXR, PXURA and
PXLA is a participant in any pension or employee benefit plans subject to the
provisions of the Employee Retirement Security Act of 1974, as amended. None of AFE, PXR, PXURA and PXLA has
officers or directors. Each of AFE,
PXR, PXURA and PXLA is member-managed.
(p) Development Rights. None of AFE, PXR, PXURA and PXLA has sold,
leased, or otherwise encumbered any development rights and/or air rights
related to the Property, it being understood, however, that except as set forth
in the Plaza X Bifurcated Development Permit, as of the Closing Date there will
be no remaining development attributable to the Property and all development
rights under the Development Permit will be transferred on or prior to the
Closing Date to the Excluded Real Property in connection with the transfer of
the Excluded Real Property to 8/9 Transferee.
34
(q) PILOT Matters. Seller has delivered to Purchaser a true,
accurate and complete copy of the Financial Agreement, Contribution Agreement
and the Tax Exemption Application. To
Sellers knowledge, the Financial Agreement is in full force and effect. PXURA has made all payments required to be
paid to date under the Financial Agreement and filed all reports in connection
therewith required to be filed to date.
Neither Seller nor Property Owner has received any written notice that
it has failed to pay or perform any obligation on its part to be paid or
performed under the Financial Agreement (which remains uncured) or that it is
in default (which remains uncured) under the Financial Agreement. To the best of Sellers knowledge, all
representations and warranties of PXURA in the Tax Exemption Application are
true, complete and correct in all material respects. AFE has paid all amounts required to be paid to date under the Contribution
Agreement and the City has not notified AFE in writing of any default with
regard to the Contribution Agreement or prepayment provision of the Financial
Agreement. As of the date hereof, there
is no litigation or proceedings pending or, to Sellers knowledge, threatened
in writing with respect to the Financial Agreement, the Contribution Agreement
or the Tax Exemption Application to which Property Owner or any Seller Entity
is a party.
(r) Property Owner. The statements contained
in the third, fourth, fifth and sixth Recitals to this Agreement are
incorporated in this Section 8.3(r) as representations and
warranties of Seller. AFE owns its
interests in PXR free and clear of all liens, encumbrances, liabilities,
claims, covenants and restrictions of any
kind or character, including but not limited to, any security interests
or, any restriction on sale or assignment or granting of any option, right or
agreement for the purchase or acquisition of the same or any interest in the
same and AFE has not transferred, assigned, sold, conveyed, pledged, mortgaged,
granted a security interest in, or otherwise disposed of any of such interests
or any portion thereof or interest therein or granted any option to any person
or entity to acquire any of such interests.
PXR owns its interests in PXURA and PXLA free and clear of all liens,
encumbrances, liabilities, claims, covenants and restrictions of any kind or
character, including but not limited to, any security interests or, any
restriction on sale or assignment or granting of any option, right or agreement
for the purchase or acquisition of the same or any interest in the same, and
PXR has not transferred, assigned, sold, conveyed, pledged, mortgaged, granted
a security interest in, or otherwise disposed of any of such interest or any
portion thereof or interest therein or granted any option to any person or
entity to acquire any of such interest.
Each of AFE, PXR, PXURA and PXLA is validly existing and in good standing
under the laws of the State of New Jersey.
The provisions of
this Section 8.3 are subject to the limitations on liability set forth
in Section 8.5 of this Agreement.
Section 8.4 Purchasers
Representations and Warranties.
Purchaser represents and warrants to Seller the following:
(a) Status.
Purchaser is a duly organized and validly existing limited liability company
under the laws of the State of Delaware.
35
(b) Authority. The execution and delivery of this Agreement
and all other documents now or hereafter to be executed and delivered by
Purchaser pursuant to this Agreement (collectively, the Purchaser Documents ) and the
performance of Purchasers obligations hereunder and under the Purchaser
Documents have been or will be duly authorized by all necessary action on the
part of Purchaser, and this Agreement constitutes, and the Purchaser Documents
will constitute, the legal, valid and binding obligation of Purchaser,
enforceable in accordance with their terms, subject to bankruptcy, reorganization
and other similar laws affecting the enforcement of creditors rights generally
and except as may be limited by general equitable principles. The person signing this Agreement on behalf
of Purchaser has been duly authorized to sign and deliver this Agreement on
behalf thereof.
(c) Non-Contravention. The execution and delivery of this Agreement
and the Purchaser Documents by Purchaser and the consummation by Purchaser of
the transactions contemplated hereby will not (i) violate any judgment, order,
injunction, decree, regulation or ruling of any court or Authority having
jurisdiction over Purchaser, (ii) conflict with, result in a breach of, or
constitute a default under the organizational documents of Purchaser, (iii)
violate any note or other evidence of indebtedness, any mortgage, deed of trust
or indenture to which Purchaser is a party or by which it is bound, or (iv)
violate any material agreement or instrument to which Purchaser is a
party or by which it is bound.
(d) Consents. No consent, waiver, approval or
authorization is required from any person or entity (that has not already been
obtained) in connection with the execution and delivery of this Agreement by
Purchaser or the performance by Purchaser of the transactions contemplated hereby.
Section 8.5 Survival
of Representations and Warranties. The representations and warranties of Harsimus set forth in Section
8.1, of Columbia set forth in Section 8.2, of Seller set forth in Section 8.3(a)
and 8.3(r) and of Purchaser set forth in Section 8.4, shall
survive the Closing indefinitely and shall not be subject to the Representation
Basket (as hereinafter defined) and the Representation Cap (as hereinafter
defined) set forth below. The
representations and warranties of Seller set forth in Sections 8.3(b)
through 8.3(q) will survive the Closing for a period of twelve (12)
months, after which time they will merge into the LLC Assignment and
Assumption. Purchaser will not have any
right to bring any action against Harsimus, Columbia, or Seller as a result of
any untruth, inaccuracy or breach of any representations and warranties of
Harsimus, Columbia, or Seller, as the case may be, unless and until the
aggregate amount of all liability and losses arising out of all such untruths
exceeds One Hundred Thousand and 00/100 Dollars ($100,000.00)
(the Representation Basket);
and then only to the extent of such excess.
In addition, in no event will Sellers liability for all such breaches
exceed, in the aggregate, the sum of Ten Million 00/100 Dollars
($10,000,000.00) (the Representation Cap). Notwithstanding anything contained herein to
the contrary, Harsimus shall be solely liable for a breach of the
representations and warranties set forth in Section 8.1, Columbia shall
be solely liable for a breach of the representations and warranties set forth
in Section 8.2, and Seller shall be solely liable for a breach of its
representations and warranties set forth in Section 8.3. None of Harsimus, Columbia or Seller shall
have any liability with respect any representation, warranty and covenant
herein which may have been made by any of them,
36
respectively,
if, prior to the Closing, Purchaser has actual knowledge of a breach of such
representation, warranty or covenant by such party and Purchaser nevertheless
consummates the transaction contemplated by this Agreement. The Closing Surviving Obligations will
survive Closing without limitation unless a specified period is otherwise
provided in this Agreement. All other
representations, warranties, covenants and agreements made or undertaken by
Harsimus, Columbia, or Seller under this Agreement, unless otherwise
specifically provided herein, will not survive the Closing Date but will be
merged into the LLC Assignment and Assumption and other Closing documents
delivered at the Closing.
Section 8.6 Updates
and Additional Representation/Warranty Matters.
(a) At
the Closing, each Seller Entity and Seller shall deliver to Purchaser a
certificate (each, an Update Certificate)
updating any or all of the representations and warranties made by each such
party in this Agreement. The updates
contained in the Update Certificate shall in no way affect Purchasers
obligations to close this transaction unless (x) any update reveals a breach on
the part of a Seller Entity or Seller under this Agreement, in which case
Purchaser may pursue its remedies set forth in Section 13.1(a) and (b)
of this Agreement, or (y) any update (or group of updates, in the aggregate)
has a material adverse effect upon the Property or Sellers LLC Interests and
does not reveal a breach on the part of any of Seller or Seller Entity, in
which case Purchaser may either (i) close this transaction without any
adjustment in the Purchase Price, or (ii) terminate this Agreement upon written
notice to Seller, whereupon the Earnest Money Deposit shall be returned to
Purchaser and neither party hereto shall have any further rights under this
Agreement other than with respect to the Termination Surviving
Obligations. Purchaser shall have no
ability to update its representations and warranties set forth in Section
8.4 at Closing, it being agreed that any modification to Purchasers
representations and warranties set forth in this Agreement shall have a material
adverse effect upon Purchasers ability and/or authority to consummate this
transaction.
(b) Notwithstanding
anything in this Agreement to the contrary, including, without limitation, the
provisions of Sections 8.1(c) and (d), Sections 8.2(c) and
(d), Section 8.3(a), Section 9.1(j) and Section 9.2(g),
Purchaser hereby acknowledges that Harsimus, Columbia and Seller have not made,
and are not making, either individually or collectively, any representations or
warranties whatsoever in this Agreement as to whether or not the approval and
consent of the Municipal Council of the City is required in connection with the
consummation of the transactions contemplated by this Agreement.
CONDITIONS
PRECEDENT TO CLOSING
Section 9.1 Conditions
Precedent to Obligation of Purchaser. The obligation of
Purchaser to consummate the transaction hereunder shall be subject to the
fulfillment on or before the Scheduled Closing Date of all of the following
conditions, any or all of which may be waived by Purchaser in its sole
discretion:
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(a) Seller
shall have delivered to Escrow Agent all of the items required to be delivered
to Purchaser pursuant to the terms of this Agreement, including but not limited
to, those provided for in Section 10.3.
(b) Subject
to the provisions of Section 8.6(a), all of the representations and
warranties of each Seller Entity and Seller contained in this Agreement shall
be true and correct in all material respects as of the Closing Date.
(c) Seller
shall have performed and observed, in all material respects, all covenants and
agreements of this Agreement to be performed and observed by Seller as of the
Closing Date.
(d) Schwab
shall not have commenced a voluntary case, or had entered against it a
petition, for relief under any federal bankruptcy act or any similar petition,
order or decree under any federal or state law or statute relative to
bankruptcy, insolvency or other relief for debtors, during the period from the
Effective Date to, and including, the Closing Date.
(e) The
Amended Financial Agreement shall be in full force and effect.
(f) No
temporary restraining order, preliminary or permanent injunction or other order
or decree issued by any court of competent jurisdiction or other legal
restraint or prohibition (collectively, Legal
Restraints) that has the effect of preventing the consummation
of the transaction contemplated hereby shall be in effect.
(g) The
CREA and the CRA shall have been recorded against the Real Property.
(h) Title
to the Real Property and Improvements shall be in the condition required
pursuant to Article VI of this Agreement.
(i) The
Excluded Real Property shall have been, or simultaneously with the Closing
shall be, conveyed to 8/9 Transferee.
(j) The
Approvals shall have been obtained.
(k) The
Permit Condition shall have been satisfied.
(l) The
Retained Entity shall have contributed the Retained Interest to Purchaser
pursuant to the Retained Interest Assignments, and if required, Harsimus shall
have consented thereto.
(m) Purchaser
shall have received an estoppel certificate executed by Schwab certifying as to
the items specified in the first sentence of Section 9.02 of the Schwab
Lease (the Threshold Estoppel Certificate). Notwithstanding the foregoing, Seller agrees
to request an estoppel certificate from Schwab certifying as to the items
specified in the first sentence of Section 9.02 of the Schwab Lease and
such other items concerning the Schwab Lease as
38
Purchaser may reasonably request (Purchasers Proposed Estoppel Certificate),
but it shall only be a condition to Closing that the Threshold Estoppel
Certificate be delivered on the Closing Date.
Promptly following the parties agreement as to the form of the
Purchasers Proposed Estoppel Certificate, Seller will request that Schwab
execute Purchasers Proposed Estoppel Certificate and will otherwise reasonably
cooperate with Purchaser to facilitate Schwabs execution of Purchasers
Proposed Estoppel Certificate including, without limitation, making
introductions and arranging meetings between Purchaser and Schwab, to the
extent reasonably requested by Purchaser (it being understood however, that in
connection with such cooperation Seller shall not be obligated to expend more
than a de minimis amount, nor
shall Seller be obligated to commence any litigation, arbitration or other
proceeding). Seller shall not be in
default of its obligations hereunder if Tenant fails to deliver the Threshold
Estoppel Certificate, it being agreed that such failure shall merely constitute
the failure of a condition precedent to Purchasers obligation to close this
transaction. Anything to the contrary
contained herein notwithstanding, Purchaser obtaining the Threshold Estoppel
Certificate shall only be a condition precedent to Purchasers obligations
hereunder if the Existing Escrow Schwab Amendment does not become effective on
the Closing Date pursuant to the terms of the escrow agreement between Schwab
and Purchaser.
(n) The
Amended Leases shall have been, or simultaneously with the Closing shall be,
recorded against the Real Property.
(o) The
receipt from the Planning Board of the City (the Planning Board) of a
modification of the resolution previously passed by the Planning Board which
authorized the subdivision of Plazas, 8, 9 and 10, which modification expressly
approves the deviations or grants a variance from the yard set-back
requirements for the West and South sides of the Building.
Section 9.2 Conditions
Precedent to Obligations of Seller. The obligation of
Seller to consummate the transaction hereunder shall be subject to the
fulfillment on or before the Scheduled Closing Date of all of the following
conditions, any or all of which may be waived by Seller in it sole discretion:
(a) Seller
shall have received the Purchase Price as adjusted pursuant to, and payable in
the manner provided in, this Agreement (including, without limitation, a credit
against the Purchase Price in the amount of the Earnest Money Deposit).
(b) Purchaser
shall have delivered to Escrow Agent (to the extent directed by Seller to do
so) and/or Seller, as the case may be, all of the items required to be
delivered to Seller pursuant to the terms of this Agreement, including but not
limited to, those provided for in Section 10.2.
(c) All
of the representations and warranties of Purchaser contained in this Agreement
shall be true and correct in all material respects as of the date of Closing.
39
(d) Purchaser
shall have performed and observed, in all material respects, all covenants and
agreements of this Agreement to be performed and observed by Purchaser as of
the Closing Date.
(e) On the
Closing Date, Purchaser shall cause PXLA (as reconstituted on the Closing Date
with Purchaser as the indirect owner thereof) to execute and deliver the
Property Management Agreement (as hereinafter defined).
(f) The
CREA and the CRA shall have been recorded against the Real Property.
(g) The
Approvals shall have been obtained.
(h) No
Legal Restraint that has the effect of preventing the consummation of the
transaction contemplated hereby shall be in effect.
(i) Intentionally
Omitted.
(j) The
Retained Entity shall have contributed the Retained Interest to Purchaser
pursuant to the Retained Interest Assignments, and if required, Harsimus shall
have consented thereto.
(k) MCRLP
and Columbia shall have been released by Schwab from all liability under all
guarantees related to the Schwab Lease and the Right of First Offer and
Expansion Agreements shall have been released by Schwab, all such releases of
guarantees and agreements being attached hereto as Exhibit 9.2(k) (collectively, the
Schwab Release Documents).
(l) The
payment to Harsimus of a termination payment of One Million Six Hundred
Thousand and 00/100 Dollars ($1,600,000) (the Option Termination Payment)
in consideration for the termination of Harsimus right to participate in the
option granted under the Option Agreement.
Section 9.3 Failure of Condition. If, by the Scheduled Closing Date, any of
the conditions set forth in (i) Section 9.1 above are not performed or
satisfied for any reason whatsoever or, alternatively, are not expressly waived
by Purchaser in writing, then, except as
expressly provided below, Purchasers sole remedy shall be to terminate
this Agreement, whereupon the Earnest Money Deposit shall be returned to
Purchaser and neither party hereto shall have any further rights under this
Agreement other than with respect to the Termination Surviving Obligations, and
(ii) Section 9.2 above are not performed or satisfied for any reason
whatsoever or, alternatively, are not expressly waived by Seller in writing,
then, except as expressly provided below, Sellers sole remedy shall be to
terminate this Agreement, whereupon the Earnest Money Deposit shall be returned
to Purchaser and neither party hereto shall have any further rights under this
Agreement other than with respect to the Termination Surviving Obligations. Notwithstanding the foregoing, (x) if any of
the conditions set forth in Section 9.1
40
are not performed or satisfied by the Scheduled
Closing Date by reason of a default by Seller under the other provisions of
this Agreement, then Purchaser shall be entitled to the remedies set forth in Section
13.1(a) below, and (y) if any of the conditions set forth in Section 9.2
are not performed or satisfied by the Scheduled Closing Date by reason of a
default by Purchaser under the other provisions of this Agreement, then Seller
shall be entitled to the remedies set forth in Section 13.2 below.
Section 10.1 Closing. The consummation of the transaction
contemplated by this Agreement by delivery of documents and payments of money
shall take place at 1:00 p.m. Eastern Time on the Scheduled Closing Date at the
offices of Fried, Frank, Harris, Shriver & Jacobson, located at One New
York Plaza, New York, New York.
Notwithstanding anything in this Agreement to the contrary, including,
without limitation, Sellers right to adjourn the Scheduled Closing Date set
forth in Section 6.3(a), the Scheduled Closing Date shall be adjourned
to no later than November 15, 2003 (the Outside Closing Date).
If the Closing does not occur by the Outside Closing Date, this
Agreement shall automatically terminate and shall be of no further force and
effect, whereupon (x) the Earnest Money Deposit shall be returned to Purchaser,
unless the failure of the Closing to occur by the Outside Closing Date is due
to a default by either party, in which event the provisions of Article XIII
shall apply, and (y) neither party hereto shall have any further rights
under this Agreement other than with respect to the Termination Surviving
Obligations. At Closing, the events set
forth in this Article X will occur, it being understood that the
performance or tender of performance of all matters set forth in this
Article X are mutually concurrent conditions which may be waived by the party
for whose benefit they are intended.
The acceptance of the LLC Assignment and Assumption by Purchaser shall
be deemed to be full performance and discharge of each and every agreement and
obligation on the part of Seller to be performed hereunder, other than the
Closing Surviving Obligations. The
acceptance of the Purchase Price by Seller shall be deemed to be full
performance and discharge of each and every agreement and obligation on the
part of the Purchaser to be performed hereunder, other than the Closing
Surviving Obligations. The parties
agree to provide all of the documents required under Sections 10.2 and 10.3
to the Escrow Agent, in escrow, at least one day prior to the Scheduled Closing
Date.
Section 10.2 Purchasers
Closing Obligations. On
the Scheduled Closing Date, Purchaser, at its sole cost and expense, will
deliver (or cause to be delivered) the following items to Seller at Closing as
provided herein (unless the delivery thereof shall have been waived in writing
by Seller):
(a) the
Purchase Price, after all adjustments are made as herein provided (including,
without limitation, a credit against the Purchase Price in the amount of the
Earnest Money Deposit), by Federal Reserve wire transfer of immediately
available funds, in accordance with the timing and other requirements of Section 3.2;
41
(b) documents
evidencing the authority of Purchaser to consummate the transactions
contemplated by this Agreement, including, without limitation, evidence that
the person executing the LLC Assignment and Assumption on behalf of Purchaser
has full right, power and authority to do so;
(c) a
counterpart original of the LLC Assignment and Assumption, duly executed by
Purchaser;
(d) written
notice executed by Purchaser and addressed and delivered to Schwab by Purchaser
in accordance with Section 10.6 herein, (i) acknowledging the
sale of Sellers LLC Interest to Purchaser, (ii) indicating that rent
should thereafter be paid in accordance with the instructions set forth
therein, and (iii) providing a revised address for notice purposes under the
Schwab Lease (the Tenant Notice Letter), in the form
annexed hereto as Exhibit 10.2(d);
(e) a
counterpart original of the Closing Statement, duly executed by Purchaser;
(f) a
property management agreement in the form annexed hereto as Exhibit 10.2(f) (the Property Management Agreement),
executed by PXLA (as reconstituted on the Closing Date with Purchaser as the
indirect owner thereof), pursuant to which Mack-Cali Realty, L.P. (MCRLP) or its designee will be
retained as the management agent for the Property from and after the Closing;
(g) a
certificate, dated as of the date of Closing, stating (i) that the
representations and warranties of Purchaser contained in Section 8.4
are true and correct in all material respects as of the Closing Date;
(h) if
applicable, all transfer and other tax declarations and returns and information
returns as may be required by law in connection with the conveyance of Sellers
LLC Interest to Purchaser, including, but not limited to, IRS Forms
(collectively, Transfer Tax Forms),
duly executed and sworn to by Purchaser;
(i) evidence
of the authorization of the transactions contemplated hereby, including a
Secretarys Certificate certifying to the formation and good standing (or
equivalent thereof) of Purchaser and proof of any required partner or member
consents or approvals, together with such evidence as the Title Company may
reasonably require as to the authority of the persons executing documents on
behalf of Purchaser;
(j) a
counterpart original of the Retained Interest Assignment to Purchaser, duly
executed by Purchaser;
(k) Fully-executed
counterpart originals of the Schwab Release Documents;
42
(l) a
guaranty duly executed by Post-Transfer AFE in the form annexed hereto as Exhibit 10.2(l), pursuant to which
Post-Transfer AFE shall guaranty the Closing Surviving Obligations of Purchaser
(the AFE Guaranty);
(m) an
Amended and Restated Limited Liability Company Agreement of Post-Transfer AFE
dated as of the Closing Date which agreement has been duly executed by
Purchaser (the Reconstituted AFE
Agreement);
(n) an
agreement, duly executed by Purchaser (the Option Agreement), pursuant to which the Retained Entity
shall be granted the right to purchase Purchasers equity interests in Post
Transfer AFE upon the terms and conditions mutually satisfactory to the parties
thereto and more particularly set forth therein;
(o) an
amended and restated limited liability company agreement for Purchaser, duly
executed by the iStar Harborside Member LLC or its affiliate, upon terms and conditions mutually satisfactory
to the parties thereto (the Purchaser LLC
Agreement);
(p) a
guaranty duly executed by iStar in the form annexed hereto as Exhibit 10.2(p) pursuant to which
iStar shall guaranty Purchasers obligations under Article XX.
(q) the
Option Termination Payment shall be paid to Harsimus; and
(r) such
other documents as may be reasonably necessary or appropriate to effect the
consummation of the transaction which is the subject of this Agreement.
Section 10.3 Sellers
Closing Obligations. On
the Scheduled Closing Date, Seller (and/or each of the Seller Entities, as the
case may be) will deliver (or cause Property Owner to deliver) to Purchaser the
following documents (unless the delivery thereof shall have been waived in
writing by Purchaser):
(a) an
assignment and assumption of Sellers LLC Interest in the form annexed hereto
as Exhibit 10.3(a) (the LLC
Assignment and Assumption), free and clear of liens and
encumbrances, duly executed by each of the Seller Entities, conveying to
Purchaser all of Sellers LLC Interest;
(b) the
Tenant Notice Letter, duly executed by PXLA;
(c) (i)
evidence of the authorization of the transactions contemplated hereby
(including without limitation, the transfer of the Sellers LLC Interests,
transfer of the Excluded Real Property to 8/9 Transferee, the Option
Agreement and Purchaser LLC Agreement), including without
limitation, Secretarys or Members Certificates certifying to the
formation and good standing (or equivalent thereof) of each of the Seller
Entities, AFE, PXR, PXURA and PXLA (and Columbias affiliates with respect to
the Retained Interest Assignments, the Option Agreement and Purchaser LLC
Agreement), certifying and annexing all charter documents of all parties
controlling such entities and any and all partner, member or board
consents or approvals required by such charter documents, together with such
other evidence as the Title Company or Purchaser may reasonably require as to
the due authority of the persons executing documents on
43
(d) behalf
of the applicable entities to execute such documents; and (ii) evidence of the
authorization of the transactions contemplated hereby (including without
limitation, the transfer of the Sellers LLC Interests, transfer of the
Excluded Real Property to 8/9 Transferee and the Option Agreement), including,
without limitation, Secretarys or Members certificates certifying to the
formation and good standing (or equivalent thereof) of MCRLP and 8/9
Transferee, certifying and annexing all charter documents of all parties
controlling such entities and any and all partner, member or board
consents or approvals required by such charter documents, together with such
other evidence as the Purchaser may reasonably require as to the due authority
of the persons executing documents on behalf of the applicable entities to
execute such documents;
(e) a
certificate in the form annexed hereto as Exhibit
10.3(d) (Certificate as to Foreign Status)
certifying that each of Seller and Retained Entity is not a foreign person as
defined in Section 1445 of the Code;
(f) the
Personal Property and originals (or if not in Sellers possession, copies) of
the: (v) Construction Agreements, (w) Financial Agreement and the Amended
Financial Agreement (together with all exhibits thereto), (x) Schwab Lease, (y)
Licenses and Permits, and (z) Leasing Commission Agreements, all of which
Licenses and Permits, Leasing Commission Agreements and Personal Property may
remain on site at the Property and need not be delivered to the location of the
Closing;
(g) if
applicable, a counterpart original of the Transfer Tax Forms, duly executed and
sworn to by Seller;
(h) a
counterpart original of the Closing Statement, duly executed by Seller;
(i) copies
of any operating files maintained by Property Owner or its property manager in
connection with the development, leasing, maintenance, and/or management of the
Property, including, without limitation, plans, specifications, operating
agreements, bills, invoices, receipts, real estate tax records and information
and other general records relating to the income and expenses of the Property;
(j) a
guaranty duly executed by 8/9 Transferee (the 8/9 Transferee Guaranty), in the form annexed hereto as Exhibit 10.3(i), pursuant to which 8/9
Transferee shall (in addition to other matters provided in Section
7.1(b)(ii) hereof) guaranty the obligations and liabilities of Seller which
are expressly set forth in (A) Section 8.5 of this Agreement, subject,
however, in all respects, to the provisions of said Section 8.5 of this
Agreement, (B) Article XV of this Agreement, subject, however, in all
respects, to the provisions of said Article XV, (C) Article XIX of this
Agreement, subject, however, in all respects, to the provisions of said Article
XIX, and (D) the Closing Surviving Obligations (collectively, the 8/9 Guaranty Provisions);
(k) a
guaranty duly executed by MCRLP in the form annexed hereto as Exhibit 10.3 (j), pursuant to which
MCRLP shall guaranty Sellers obligations under Section 7.2 and
Article XX;
44
(l) subject
to the provisions of Section 8.6(a), a certificate, dated as of the date
of Closing, stating that all of the representations and warranties of Seller
contained in this Agreement are true and correct in all material respects as of
the Closing Date;
(m) evidence
reasonably satisfactory to Purchaser that 8/9 Transferee is the owner of the
Excluded Real Property on and as of the Closing;
(n) Sellers,
Property Owners or Retained Entitys title affidavit and if not in the title
affidavit, Sellers, Property Owners or Retained Entitys affidavit required
in connection with the Non-Imputation Endorsement, all as reasonably required
by the Title Company and reasonably acceptable to each Seller Entity, Property
Owner and Retained Entity, as the case may be;
(o) Intentionally
Omitted.
(p) the
keys to the Building;
(q) a
counterpart original of the Property Management Agreement, duly executed by
MCRLP or its designee;
(r) a
counterpart original of the Option Agreement, duly executed by the Retained
Entity;
(s) a
counterpart original of the Retained Interest Assignments duly executed by
Columbia and the Retained Entity, as applicable, together with Harsimus
consent thereto if required;
(t) a
counterpart original of the Purchaser LLC Agreement duly executed by the
Retained Entity;
(u) counterpart
originals of the Schwab Release Documents executed by Seller or its affiliates
to the extent required;
(v) the
Amended Leases shall have been, or simultaneously with the Closing shall be, recorded
against the Real Property; and
(w) such
other documents as may be reasonably necessary or appropriate to effect the
consummation of the transaction which is the subject of this Agreement.
(x) At
the Closing, Seller shall deliver to, and certify to, Purchaser a list of
Additional Charges (as such term is defined in the Schwab Lease), under Article
4 of the Schwab Lease (collectively, Operating
Expenses) billed to Schwab for the calendar year in which the
Closing occurs (both on a monthly basis and in the aggregate through the month
prior to the month in which the Closing occurs if the Closing occurs on or
after the fifteenth (15th) day of the month, and if the Closing
occurs prior to the fifteenth (15th) day of the month, through the
month that is two (2) months prior to the month in which the Closing occurs (i.e., if the Closing occurs
45
on November 10, 2003, through September 2003),
the monthly amounts being billed for Operating Expenses and the amounts
incurred by Seller on account of the components of Operating Expenses for such
portion of such calendar year.
(a) Seller
and Purchaser agree to adjust, as of 11:59 p.m. on the day preceding the
Closing Date (the Proration Time), the following
(collectively, the Proration Items):
(i) Rentals,
in accordance with Section 10.4(b) below;
(ii) utility
charges payable by Seller, AFE, PXURA, PXR, PXLA if any, including, without
limitation, electricity, water charges and sewer charges. If there are meters on the Real Property,
Seller will cause readings of all said meters to be performed not more than
five (5) days prior to the Closing Date, and a per diem adjustment shall be
made for the days between the meter reading date and the Closing Date based on
the most recent meter reading;
(iii) all real estate ad valorem and personal
property taxes, including, without limitation, all PILOT Payments (as such term
is defined in the Schwab Lease) sewer rents and charges and other state,
country, school district, municipal and other governmental and
quasi-governmental taxes and charges, due and payable by Seller, AFE, PXURA,
PXR, PXLA for the calendar year in which the Closing occurs;
(iv) Purchasers
Share of the Contribution Amount (as hereinafter defined) and the PILOT Service
Charge (as hereinafter defined), in accordance with Section 10.4(e)
below;
(v) charges
and payments under service contracts owed by Seller, AFE, PXURA, PXR, PXLA to
the extent that the charges and payment refer to periods including the Closing
Date; and
(vi) such other
items of income and expense as are typically prorated at closing similar to the
transaction contemplated by this Agreement.
Seller will be charged
and credited for the amounts of all of the Proration Items relating to the
period up to and including the Proration Time, and Purchaser will be charged
and credited for the amounts of all of the Proration Items relating to the
period after the Proration Time. The
estimated Closing prorations being adjusted pursuant to this Agreement shall be
set forth on a preliminary closing statement to be prepared by Seller and
submitted to Purchaser two (2) days prior to the Closing Date (the Closing
Statement ). The
Closing Statement, once agreed upon, shall be signed by Purchaser and
Seller. The prorations being adjusted
pursuant to this Agreement shall be paid at Closing by Purchaser to Seller (if
the prorations result in a net credit to Seller) or by Seller to Purchaser (if
the prorations result in a net credit to Purchaser) by increasing or reducing
the cash to be delivered by Purchaser in payment of the Purchase Price at the
Closing. If the actual amounts of the
Proration Items are not known as of the Closing Date,
46
the prorations
will be made at Closing on the basis of the best evidence then available;
thereafter, when actual figures are received, re-prorations will be made on the
basis of the actual figures, and a final cash settlement will be made between
Seller and Purchaser. No prorations
will be made in relation to insurance premiums, and Sellers insurance policies
will not be assigned to Purchaser.
Final readings and final billings for utilities will be made if possible
as of the Closing Date, in which event no proration will be made at the Closing
with respect to utility bills. Seller
will be entitled to all deposits presently in effect with the utility
providers, and Purchaser will be obligated to make its own arrangements for any
deposits with the utility providers, but Seller will, if necessary, maintain
such deposits until such time as Purchaser can post its own deposits (but in no
event longer than thirty (30) days after Closing) so that such utility service
will not be discontinued to the Property.
No later than September 30, 2005, Seller and Purchaser will jointly and
in good faith prepare a final closing statement reasonably satisfactory in form
and substance to Seller and Purchaser (the Final Closing Statement) setting forth the final
determination of the adjustments and prorations provided for herein.
(b) Purchaser
will receive a credit on the Closing Statement for the prorated amount (as of
the Proration Time) of all Rental previously paid to or collected by Seller and
attributable to any period following the Proration Time. After the Closing, Seller will cause to be
paid or turned over to Purchaser all Rental, if any, received by Seller after
Closing and attributable to any period following the Proration Time. Rental as used herein means all Rent (as such term is defined in the
Schwab Lease) paid under the Schwab Lease.
Rental is Delinquent when it was due prior to the Closing Date, and payment thereof
has not been made on or before the Proration Time. Delinquent Rental will not be prorated. Purchaser agrees to use good faith collection procedures with
respect to the collection of any Delinquent Rental, but Purchaser will have no
liability for the failure to collect any such amounts and will not be required
to pursue legal action to enforce collection of any such amounts owed to Seller
by any tenant. All sums collected by
Purchaser from and after Closing from Schwab will be applied first to current
amounts owed by Schwab to Purchaser and then to delinquencies owed by Schwab to
PXLA. Any sums due Seller will be
promptly remitted to Seller.
(c) With
respect to specific tenant billings for work orders, special items performed or
provided at the request of Schwab or other specific services, which are
collected by Purchaser after the Closing Date but relate to the foregoing
specific services rendered by Seller prior to the Proration Time, then
notwithstanding anything to the contrary contained herein, Purchaser shall
cause the first amounts collected from Schwab specifically for such special
services (as opposed to regular scheduled rental payments) to be paid to Seller
on account thereof, so long as Seller identifies same prior to Closing.
(d) Seller
shall be liable and solely responsible for the payment of all of the leasing commissions
due and owing with respect to the initial term of the Schwab Lease (the Initial Term Schwab Commissions). Purchaser shall be liable and solely
responsible for all leasing commissions payable under the Leasing Commission
Agreements or otherwise with respect to any renewals or extensions of the
Schwab Lease (the Renewal Term Schwab
Commissions), as well as, subject to the provisions of Section
18.2 of this Agreement, the Work Allowance and the Additional Work
Allowance (as such terms are defined in the Schwab
47
Lease) and all tenant improvement costs or other
expenditures due with respect to any amendments, renewals and/or extensions of
the Schwab Lease first arising, accruing and payable following the Closing
Date, as set forth in the Schwab Lease or in documents provided to Purchaser
prior to Closing and in any documents or pursuant to any agreements (whether
written or oral entered into after the Closing by Purchaser or Property Owner),
and all of the leasing commissions, tenant improvement costs and other
expenditures due and owing with respect to Schwabs exercise of Schwabs
Expansion Options.
(e) Prior
to the Closing Date, Seller (or Property Owner) shall have pre-paid to the
applicable Authority the amount of One Million Five Hundred Seventy-Six
Thousand Four Hundred Nineteen and 00/100 Dollars ($1,576,419.00) (the PILOT Service Charge) as and for the annual service charge
required to be paid in connection with the PILOT. In addition, Purchaser hereby acknowledges that Property Owner
has entered into the Contribution Agreement and in connection therewith, the
amount of Three Hundred Ninety-Nine Thousand Seven Hundred and No/100
($399,700.00) (the Contribution Amount)
has been paid to the City. Seller will
receive a credit on the Closing Statement (x) in an amount equal to fifty
percent (50%) of the Contribution Amount (Purchasers
Share of the Contribution Amount), and (y) in an amount
equal to the PILOT Service Charge less that amount of the PILOT Service Charge,
if any, which was amortized by Seller (and/or Property Owner) prior to the
Closing Date (it being understood that the PILOT Service Charge shall be
amortized on a straight-line basis commencing on the date of the first PILOT
Payment made under the Financial Agreement (excluding the PILOT Service Charge
for purposes of determining such first PILOT Payment)).
(f) At
the Closing, Purchaser shall receive a credit against the Purchase Price in an
amount calculated in accordance with Schedule 10.4(f),
pro-rated for a partial month (the Rent
Shortfall Credit).
(g) The
provisions of this Section 10.4 shall survive the Closing indefinitely.
Section 10.5 Costs of
Title Company and Closing Costs. Costs of the Title Company and other Closing costs incurred in
connection with the Closing will be allocated as follows:
(a) Seller
shall pay (i) all state or county documentary stamps on transfer taxes and
recording fees and changes necessary or required in connection with the LLC Assignment
and Assumption, if any; (ii) Sellers attorneys fees; (iii) one-half
(1/2) of escrow fees, if any; and (iv) any and all fees required to be paid to
the City and/or the Jersey City Redevelopment Authority in connection with
obtaining the Approvals from such party for this transaction, including any
fees required to be paid for its consent to the transaction contemplated by
this Agreement, if such consent is necessary, including any related fees
required by, or increases in the amounts payable under, the Financial Agreement
in order for the tax exemption to remain in full force and effect, including
any fees (or increases in amounts payable under the Financial Agreement)
required for obtaining the approval of the transaction contemplated by this Agreement
by means of the Ordinance.
(b) Purchaser
shall pay (i) the cost of the premium for its Title Policy and customary
title searches, together with all costs of any additional coverage under its
Title Policy
48
or endorsements (including, without limitation, the
Non-Imputation Endorsement) to its Title Policy that are desired by Purchaser;
(ii) all premiums and other costs for any mortgagee policy of title
insurance, if any, including but not limited to any endorsements or deletions;
(iii) Purchasers attorneys fees; (iv) one-half (1/2) of escrow
fees, if any; and (v) the costs of the Survey, as provided for in Section 6.1.
(c) The
provisions of this Section 10.5 shall survive the Closing indefinitely.
Section 10.6 Post-Closing
Delivery of Tenant Notice Letters. Immediately following Closing, Purchaser will deliver to Schwab a
Tenant Notice Letter, as described in Section 10.2(d). The provisions of this Section 10.6
shall survive the Closing indefinitely.
Section 10.7 Like-Kind
Exchange. In
the event that either Seller shall elect to effectuate the Closing as a
like-kind exchange under Section 1031 of the Code, Purchaser agrees to
cooperate and assist such Seller in all reasonable respects (with no adjustment
to the Closing Date hereunder) in order that the exchange so qualifies as a
like-kind exchange under Section 1031 of the Code and the Treasury
Regulations promulgated, or to be promulgated, thereunder; provided, however,
that Seller shall reimburse Purchaser for any reasonable out-of-pocket
attorneys fees (other than incidental, de
minimis expenses and attorneys fees).
CONDEMNATION
AND CASUALTY
Section 11.1 Casualty. If, prior to the Scheduled Closing Date, all
or a Significant Portion of the Real Property and Improvements is destroyed or
damaged by fire or other casualty, Seller will notify Purchaser of such
casualty. Purchaser will have the
option to terminate this Agreement upon notice to Seller given not later than
fifteen (15) days after receipt of Sellers notice. If this Agreement is terminated, the Earnest Money Deposit will
be returned to Purchaser and thereafter neither Seller nor Purchaser will have
any further rights or obligations to the other hereunder except with respect to
the Termination Surviving Obligations.
If Purchaser does not elect to terminate this Agreement or less than a
Significant Portion of the Real Property and Improvements is destroyed or
damaged as aforesaid, neither Seller nor the Property Owner will be obligated
to repair such damage or destruction but (a) Seller will (or will cause
Property Owner to) (i) turn over to Purchaser the insurance proceeds net of
reasonable collection costs (or if such have not been awarded, all of its
right, title and interest therein) payable with respect to such fire or other
casualty and (ii) assign to AFE (as reconstituted on the Closing Date with
Purchaser as the direct or indirect owner therein), without any representation,
warranty or recourse whatsoever, all of Property Owners rights, if any, to any
payments to be made (after the Closing Date) with respect to the Property under
any applicable rental loss insurance policies in effect on the Closing Date,
and (b) the parties will proceed to Closing pursuant to the terms hereof
without abatement of the Purchase Price, except that Purchaser will receive
credit for any insurance deductible amount.
In the event Seller or Property Owner elects to perform any repairs as a
result of a casualty prior to Closing, (i) the performance thereof shall be
subject, except in the case of emergency or to perform repairs required by
applicable law, to Purchasers consent, not to be unreasonably withheld,
conditioned or delayed, and (ii) Seller will
49
be entitled to deduct its costs and expenses from any
amount to which Purchaser is entitled under this Section 11.1,
which right shall survive the Closing.
Neither Seller nor Property Owner will have any right to elect to
perform any repairs after the Closing.
Section 11.2 Condemnation
of Property. In the
event of any condemnation or sale in lieu of condemnation of all or that
portion of the Property which entitles Schwab to terminate the Schwab Lease
pursuant to Section 10.04 thereof (a Material Taking), Purchaser will have the option, to be
exercised within fifteen (15) days after receipt of notice of such condemnation
or sale, of terminating Purchasers obligations under this Agreement, or
electing to have this Agreement remain in full force and effect. In the event that either (i) any
condemnation or sale in lieu of condemnation of the Property is not a Material
Taking, or (ii) Purchaser does not terminate this Agreement pursuant to
the preceding sentence, Seller will (or will cause Property Owner to) turn over
to Purchaser any and all claims for the proceeds of such condemnation or sale
to the extent the same are applicable to the Property, and Purchaser will take
title to the Property subject to such condemnation and without reduction of the
Purchase Price. Should Purchaser elect
to terminate Purchasers obligations under this Agreement under the provisions
of this Section 11.2, the Earnest Money Deposit will be returned to
Purchaser and neither Seller nor Purchaser will have any further obligation
under this Agreement, except for the Termination Surviving Obligations. Purchaser hereby acknowledges and agrees
that the Dedication shall not constitute a Material Taking and Purchaser shall
have no rights whatsoever pursuant to the provisions of this Section 11.2
with respect to the Dedication.
Section 12.1 Confidentiality. Seller and Purchaser each expressly
acknowledge and agree that the transactions contemplated by this Agreement and
the terms and conditions concerning the same will be held in confidence by each
of them and will not be disclosed by either of them except to their respective
legal counsel, accountants, consultants, officers, partners, directors, and
shareholders and municipal officials with the City with whom Purchaser is
permitted to discuss the transaction contemplated herein, or as otherwise
permitted hereunder (including, without limitation, Section 5.2(b)), and
except and only to the extent that such disclosure may be necessary or
advisable for their respective performances hereunder. Purchaser further acknowledges and agrees
that, unless and until the Closing occurs, all information obtained by
Purchaser in connection with the Property will not be disclosed by Purchaser to
any third persons (other than Licensee Parties) without the prior written
consent of Seller, unless such disclosure is required by law, rule or
regulation. Nothing contained in this
Article XII will preclude or limit either party to this Agreement from disclosing
or accessing any information otherwise deemed confidential under this Article
XII or this Agreement in response to lawful process or subpoena or other valid
or enforceable order of a court of competent jurisdiction or any filings with
governmental authorities required by reason of the transactions provided for
herein pursuant to an opinion of counsel. In addition, prior to or as a part of
the Closing, any release to the public of information with respect to the sale
contemplated herein or any matters set forth in this Agreement will be made
only in the form approved by Purchaser and Seller and
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their respective counsel, which approval shall not be
unreasonably withheld or delayed.
Subject to preceding 2 sentences of this Section 12.1,
Seller and/or Sellers Affiliates shall not name Purchaser, Purchasers
Affiliates, iStar or any iStar affiliates in any public statements or
governmental filings related to the transactions contemplated by this Agreement,
including, without limitation, press releases, brochures, marketing materials
or other written, oral, digital or electronic communications; provided,
however, in describing the transactions contemplated by this Agreement, Seller
and Sellers Affiliates may refer to Purchaser, Purchasers Affiliates, iStar
or any iStar affiliates as an institutional real estate buyer. Notwithstanding anything to the contrary
provided herein, in no event shall Seller and/or Sellers Affiliates be liable
under this Section 12.1 for any disclosure of Purchasers, iStars or
any iStar affiliates involvement in the transactions contemplated by this
Agreement to the extent such involvement becomes public knowledge (and only to
the extent of such public knowledge) other than as a result of a disclosure by
Seller and/or Sellers Affiliates. The
provisions of this Article XII will survive the Closing or any termination of
this Agreement. Nothing in this
Article XII will negate, supersede or otherwise affect the obligations of the
parties under the Confidentiality Agreement, and the provisions of this
Article XII will survive the termination of this Agreement, and in the
event of a conflict between the provisions of the Confidentiality Agreement and
this Agreement, the provisions of this Agreement shall govern.
REMEDIES
(a) In
the event the Closing and the transactions contemplated hereby do not occur as
herein provided by reason of any default of Seller under this Agreement, Purchaser
may, as Purchasers sole and exclusive remedy, elect by notice to Seller within
ten (10) Business Days following the Scheduled Closing Date, either of the
following: (i) to terminate this
Agreement, in which event Purchaser will receive from the Escrow Agent the
Earnest Money Deposit, and thereafter Seller and Purchaser will have no further
rights or obligations under this Agreement, except with respect to the
Termination Surviving Obligations; or (ii) seek to enforce specific performance
of Sellers obligation to execute the documents required to convey Sellers LLC
Interest to Purchaser, it being understood and agreed that the remedy of
specific performance shall not be available to enforce any other obligation of
Seller hereunder. Other than as expressly
set forth in Section 13.1(b) below, Purchaser expressly waives its
rights to seek damages in the event that the Closing does not occur by reason
of Sellers default hereunder.
Purchaser shall be deemed to have elected to terminate this Agreement and
receive back the Earnest Money Deposit if Purchaser fails to file suit for
specific performance against Seller in a court having jurisdiction in the
county and state in which the Property is located, on or before ninety (90)
days following the Scheduled Closing Date.
Notwithstanding the foregoing as to the Termination Surviving
Obligations, nothing contained in this Section 13.1 will limit
Purchasers remedies at law, in equity or as herein provided in pursuing
remedies of a breach by Seller of any of the Termination Surviving
Obligations. Purchaser specifically
waives its rights to seek any punitive, speculative, or consequential damages.
51
(b) Notwithstanding
Section 13.1(a) above, if Purchaser terminates this Agreement by reason
of Sellers bad faith, willful default under this Agreement, then, in addition
to the return of the Earnest Money Deposit, Purchaser shall be entitled to be
reimbursed for Purchasers actual out-of-pocket costs related to this
transaction, including, without limitation, reasonable attorneys and third
party fees and reasonable expenses and reasonable due diligence expenses with
respect to the purchase of the Property, the negotiation of this Agreement (and
ancillary agreements) and obtaining the
Title Report and any survey of the Property.
Section 13.2 Default
by Purchaser. In the
event the Closing and the consummation of the transactions contemplated herein
do not occur as provided herein by reason of any default of Purchaser,
Purchaser and Seller agree it would be impractical and extremely difficult to
fix the damages which Seller may suffer.
In such event, Escrow Agent shall pay the Earnest Money Deposit to each
of Harsimus (or its designee) and Columbia (or its designee) by separate Federal Reserve wire transfers of
immediately available funds to the account designated by each of them, the
portion of the Earnest Money Deposit to which each of them is entitled, as set
forth in a writing executed by Harsimus and Columbia and which shall be
furnished to Escrow Agent, and Purchaser and Seller hereby agree that
(a) an amount equal to the Earnest Money Deposit is a reasonable estimate
of the total net detriment Seller would suffer in the event Purchaser defaults
and fails to complete the purchase of the Property, and (b) such amount will be
the full, agreed and liquidated damages for Purchasers default and failure to
complete the purchase of Sellers LLC Interest, and will be Sellers sole and
exclusive remedy (whether at law or in equity) for any default of Purchaser
resulting in the failure of consummation of the Closing, whereupon this
Agreement will terminate and Seller and Purchaser will have no further rights
or obligations hereunder, except with respect to the Termination Surviving
Obligations. The payment of such amount
as liquidated damages is not intended as a forfeiture or penalty but is
intended to constitute liquidated damages to Seller. Notwithstanding the
foregoing, as to the Termination Surviving Obligations, nothing contained
herein will limit Sellers remedies at law, in equity or as herein provided in
the event of a breach by Purchaser of any of the Termination Surviving
Obligations. Seller specifically waives
its rights to seek any punitive, speculative, or consequential damages.
NOTICES
(a) All
notices or other communications required or permitted hereunder shall be in
writing, and shall be given by any nationally recognized overnight delivery
service (using the next business day delivery method) with proof of delivery,
or by facsimile transmission (provided that such facsimile is confirmed by the
sender by expedited delivery service in the manner previously described), sent
to the intended addressee at the address set forth below, or to such other
address or to the attention of such other person as the addressee will have
designated by written notice sent in accordance herewith. Unless changed in
accordance with the preceding sentence, the addresses for notices given pursuant
to this Agreement will be as follows:
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If to Purchaser:
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c/o iStar
Financial Inc.
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1114 Avenue of
the Americas
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New York, NY
10036
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Attn: H. Cabot Lodge III, Executive Vice
President
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Nina B. Matis,
Executive Vice President and General Counsel
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(212) 930-9400
(tele.)
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(212) 930-9494
(fax)
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with a copy to :
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Katten Muchin
Zavis Rosenman
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575 Madison
Avenue
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New York, New
York 10022-2585
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Attn: Ellen L. Shapiro, Esq.
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(212) 940-8800 (tele.)
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(212) 940-8776
(fax)
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If to Seller:
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c/o Mack-Cali
Realty Corporation
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11 Commerce
Drive
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Cranford, New
Jersey 07016
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with separate
notices to the attention of:
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Attn: Mitchell E. Hersh
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(908) 272-8000
(tele.)
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(908) 272-0214
(fax)
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and
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Attn: Roger W. Thomas, Esq.
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(908) 272-2612
(tele.)
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(908) 497-0485
(fax)
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and
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Columbia
Development Company, L.L.C.
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c/o Panepinto
Properties Inc.
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30 Montgomery
Street, 15th Floor
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Jersey City, New
Jersey 07302
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Attn: Joseph A. Panepinto
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(201) 521-9000
(tele.)
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(201) 434-3218
(fax)
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and
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Garden State
Development Inc.
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30 Montgomery
Street, 15th Floor
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Jersey City, New
Jersey 07302
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Attn: Peter G. Mangin
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(201) 521-9000
(tele.)
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(201) 434-3218
(fax)
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with a copy to:
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Fried, Frank,
Harris, Shriver & Jacobson
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One New York
Plaza
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New York, New
York 10004
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Attn: Andrew
Dady, Esq.
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(212) 859-8161
(tele.)
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(212) 859-4000
(fax)
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and
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Greenbaum, Rowe,
Smith, Ravin, Davis & Himmel LLP
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99 Wood Avenue
South
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Woodbridge, New
Jersey 08830
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Attn: Robert
Greenbaum, Esq.
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(732) 549-5600
(tele.)
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(732) 549-1881
(fax)
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If to Escrow Agent:
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First American
Title Insurance Company
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633 Third Avenue
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New York, New
York 10017
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Attn: Anthony Ruggeri
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(212) 922-9700
(tele.)
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(212) 922-0881
(fax)
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(b) Notices
given by (i) overnight delivery service as aforesaid shall be deemed
received and effective on the first Business Day following such dispatch and
(ii) facsimile transmission as aforesaid shall be deemed given at the time
and on the date of machine transmittal provided same is sent and confirmation
of receipt is received by the sender prior to 4:00 p.m. Eastern Standard Time
on a Business Day (if sent later, then notice shall be deemed given on the next
Business Day). Notices may be given by
counsel for the parties described above, and such notices shall be deemed given
by said party, for all purposes hereunder.
Section 15.1 Brokers. Purchaser and Seller represent that they
have not dealt with any brokers, finders or salesmen, in connection with this
transaction, other than The Greenwich Group International LLC (the Broker ). Purchaser and Seller shall each pay one half of any and all fees
and commissions payable to the Broker on account of this transaction up to a
maximum amount of five hundred thousand dollars ($500,000) each. Purchaser and Seller agree to indemnify,
defend and hold each other harmless from and against any and all loss, cost,
damage, liability or expense, including reasonable attorneys fees, which
either party may sustain, incur or be exposed to by reason of any claim for
fees or commissions made through the
54
other party on account of any broker, finder or
salesman with whom they have dealt, including, with respect to Purchasers
indemnity in favor of Seller, any claims made by Broker against Seller with
respect to the transactions contemplated by this Agreement in excess of
$500,000. The provisions of this
Article XV will survive any Closing or termination of this Agreement.
(a) Escrow
Agent will hold the Earnest Money Deposit in escrow in an interest-bearing
account of the type generally used by Escrow Agent for the holding of escrow
funds until the earlier of (i) the Closing, or (ii) the termination
of this Agreement in accordance with any right hereunder. The Earnest Money Deposit shall be
non-refundable to Purchaser, except as otherwise set forth herein, and shall be
credited against the Purchase Price at the Closing. All interest earned on the Earnest Money Deposit shall be paid to
the party entitled to the Earnest Money Deposit. In the event the Closing occurs, the Earnest Money Deposit will
be released to Seller, and Purchaser shall receive a credit against the
Purchase Price in the amount of the Earnest Money Deposit. In all other instances, Escrow Agent shall
not release the Earnest Money Deposit to either party until Escrow Agent has
been requested by Seller or Purchaser to release the Earnest Money Deposit as
follows: (i) if requested by Seller, then upon Sellers written demand
therefore stating that Purchaser defaulted in the performance of Purchasers
obligations to close under this Agreement and the facts and circumstances
forming the basis of such default and (ii) if requested by Purchaser, then upon
Purchasers written demand therefore, stating that Seller defaulted in the
performance of Sellers obligations to close under this Agreement and the facts
and circumstances forming the basis of such default; provided, that, in neither
case shall Escrow Agent release the Earnest Money Deposit until five (5)
Business Days following Escrow Agents delivery of such written demand to the
non-requesting party; provided, further, that if during such five (5) Business
Days period, the non-requesting party shall have delivered to Escrow Agent a
written dispute to the release of the Earnest Money Deposit, Escrow Agent shall
not release the Earnest Money Deposit unless it receives further written
direction signed by Seller and Purchaser.
If no written dispute is so delivered, Escrow Agent shall disburse the
Earnest Money Deposit as directed.
Purchaser represents that its tax identification number, for purposes of
reporting the interest earnings, is 03-0493637. Harsimus represents that its tax identification number, for
purposes of reporting the interest earnings, is 22-3666122, and Columbia represents that its tax identification
number, for purposes of reporting interest earnings, is 22-3571776.
(b) Escrow
Agent shall not be liable to any party for any act or omission, except for bad
faith, gross negligence or willful misconduct, and the parties agree to
indemnify Escrow Agent and hold Escrow Agent harmless from any and all claims,
damages, losses or expenses arising in connection herewith. The parties acknowledge that Escrow Agent is
acting solely as stakeholder for their mutual convenience. In the event Escrow Agent receives written notice
of a dispute between the parties with respect to the Earnest Money Deposit (the
55
Escrowed Funds), Escrow Agent shall
not be bound to release and deliver the Escrowed Funds to either party but may
either (i) continue to hold the Escrowed Funds until otherwise directed in
a writing signed by all parties hereto or (ii) deposit the Escrowed Funds
with the clerk of any court of competent jurisdiction. Upon such deposit, Escrow Agent will be
released from all duties and responsibilities hereunder. Escrow Agent shall have the right to consult
with separate counsel of its own choosing (if it deems such consultation
advisable) and shall not be liable for any action taken, suffered or omitted by
it in accordance with the advice of such counsel.
(c) Escrow
Agent shall not be required to defend any legal proceeding which may be
instituted against it with respect to the Escrowed Funds, the Property or the
subject matter of this Agreement unless requested to do so by Purchaser or
Seller and is indemnified to its satisfaction against the cost and expense of
such defense. Escrow Agent shall not be
required to institute legal proceedings of any kind and shall have no
responsibility for the genuineness or validity of any document or other item
deposited with it or the collectibility of any check delivered in connection
with this Agreement. Escrow Agent shall
be fully protected in acting in accordance with any written instructions given
to it hereunder and believed by it to have been signed by the proper parties.
Section 17.1 Waivers. No waiver of any breach of any covenant or
provisions contained herein will be deemed a waiver of any preceding or
succeeding breach thereof, or of any other covenant or provision contained
herein. No extension of time for
performance of any obligation or act will be deemed an extension of the time
for performance of any other obligation or act.
Section 17.2 TIME OF
THE ESSENCE. TIME IS OF
THE ESSENCE WITH RESPECT TO ALL TIME PERIODS AND DATES FOR PERFORMANCE SET
FORTH IN THIS AGREEMENT.
Section 17.3 Recovery
of Certain Fees. In the
event a party hereto files any action or suit against another party hereto by
reason of any breach of any of the covenants, agreements or provisions
contained in this Agreement, then in that event the prevailing party will be
entitled to have and recover certain fees from the other party including all
reasonable attorneys fees and costs resulting therefrom. For
purposes of this Agreement, the term attorneys fees or attorneys fees and
costs shall mean the fees and expenses of counsel to the parties hereto, which
may include printing, photocopying, duplicating and other expenses, air freight
charges, and fees billed for law clerks, paralegals and other persons not
admitted to the bar but performing services under the supervision of an
attorney, and the costs and fees incurred in connection with the enforcement or
collection of any judgment obtained in any such proceeding. The provisions of this Section 17.3
shall survive the entry of any judgment, and shall not merge, or be deemed to
have merged, into any judgment.
56
Section 17.4 Construction. Headings at the beginning of each
Article and Section are solely for the convenience of the parties and
are not a part of this Agreement.
Whenever required by the context of this Agreement, the singular will
include the plural and the masculine will include the feminine and vice
versa. This Agreement will not be
construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the same. All
exhibits and schedules referred to in this Agreement are attached and
incorporated by this reference, and any capitalized term used in any exhibit or
schedule which is not defined in such exhibit or schedule will have the meaning
attributable to such term in the body of this Agreement. In the event the date on which Purchaser or
Seller is required to take any action under the terms of this Agreement is not
a Business Day, the action will be taken on the next succeeding Business Day.
Section 17.5 Counterparts. This Agreement may be executed in multiple
counterparts, each of which, when assembled to include an original signature
for each party contemplated to sign this Agreement, will constitute a complete
and fully executed original. All such
fully executed original counterparts will collectively constitute a single
agreement.
Section 17.6 Severability. If any term or other provision of this
Agreement is invalid, illegal, or incapable of being enforced by any rule of
law or public policy, all of the other conditions and provisions of this
Agreement will nevertheless remain in full force and effect, so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any adverse manner to either party. Upon such determination that any term or other provision is
invalid, illegal, or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to reflect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
Section 17.7 Entire
Agreement. This
Agreement is the final expression of, and contains the entire agreement
between, the parties with respect to the subject matter hereof, and supersedes
all prior understandings with respect thereto.
This Agreement may not be modified, changed, supplemented or terminated,
nor may any obligations hereunder be waived, except by written instrument,
signed by the party to be charged or by its agent duly authorized in writing,
or as otherwise expressly permitted herein.
Section 17.8 Governing
Law. THIS AGREEMENT WILL
BE CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW JERSEY. SELLER AND PURCHASER
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
SITTING IN THE STATE OF NEW JERSEY IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN A STATE
OR FEDERAL COURT SITTING IN THE STATE OF NEW JERSEY.
Section 17.9 No
Recording. Except to the
extent the Title Company requires a notice of the settlement to be recorded at
Closing against the Real Property, the parties hereto agree that neither this
Agreement nor any affidavit or memorandum concerning it will be recorded and
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unless so required by the Title Company, any recording
of this Agreement or any such affidavit or memorandum by Purchaser will be
deemed a default by Purchaser hereunder.
Section 17.10 Further
Actions. The parties
agree to execute such instructions to the Title Company and such other
instruments and to do such further acts as may be reasonably necessary to carry
out the provisions of this Agreement.
Section 17.11 No
Partnership.
Notwithstanding anything to the contrary contained herein, this
Agreement shall not be deemed or construed to make the parties hereto partners
or joint venturers, it being the intention of the parties to merely create the
relationship of Seller and Purchaser with respect to the Property to be
conveyed as contemplated hereby.
Section 17.12 Limitations
on Benefits. It is the
explicit intention of Purchaser and Seller that no person or entity other than
Purchaser, Purchasers Affiliates, Seller, Sellers Affiliates and their
permitted successors and assigns is or shall be entitled to bring any action to
enforce any provision of this Agreement against any of the parties hereto, and
the covenants, undertakings and agreements set forth in this Agreement shall be
solely for the benefit of, and shall be enforceable only by, Purchaser, Purchasers
Affiliates, Seller and Sellers Affiliates, or their respective successors and
assigns as permitted hereunder. Except
as set forth in this Section 17.12, nothing contained in this
Agreement shall under any circumstances whatsoever be deemed or construed, or
be interpreted, as making any third party a beneficiary of any term or
provision of this Agreement or any instrument or document delivered pursuant
hereto, and Purchaser and Seller expressly reject any such intent, construction
or interpretation of this Agreement.
Section 17.13 Assignment:
Binding Effect. Except
as set forth in this Section 17.13, Purchaser will not have the right to
assign this Agreement; Purchaser may assign all of its rights under this
Agreement to an entity which directly or indirectly controls, is controlled by,
or is under common control with, iStar, including, without limitation, a single
purpose entity created by Purchaser for the purpose of holding title to
Sellers LLC Interest. Purchaser will
notify each Seller of any such assignment.
In the event of any such assignments, whether accomplished as a matter
of right or upon the consent of the other party, the original parties to this
Agreement shall not be released. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section 17.14 Remedies
Cumulative. Except
as provided in Article XIII of this Agreement, all rights, powers and
privileges conferred hereunder upon the parties in any specific Section shall
be cumulative but not restrictive of those given in other Sections of this
Agreement and by law.
Section 17.15 Further
Assurances. At
and after Closing, the parties shall deliver to each other any additional
materials and documents which are necessary or appropriate to further assure,
complete and document the consummation of the purchase and sale contemplated
herein on the terms described herein.
From and after Closing, each party shall afford to the other reasonable
access to any information in its possession concerning Sellers LLC Interest
and the operations of the Property (including the right to copy the same at the
expense of the party
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desiring the copy) for purposes of ascertaining
post-Closing adjustments, tax examinations or audits, or other similar
purposes.
(a) Purchaser acknowledges
that Seller and/or any one or more of its Affiliates may be required by the
Securities and Exchange Commission to file audited financial statements for one
to three years after Closing with regard to the Property. At no cost or liability to Purchaser, after
Closing, Purchaser shall, and shall cause each Property Owner, to reasonably
cooperate with Seller and/or its Affiliate, its counsel, accountants, agents
and representatives, to provide them with reasonable access to Purchasers and
Property Owners books and records with respect to the ownership, management,
maintenance and operation of the Property for the applicable period, and permit
them to copy same. Seller or its
Affiliate agrees to deliver to Purchaser a commercially reasonable
confidentiality agreement in connection with the foregoing prior to any such
access or copying.
(b)(i) Seller and only Seller
shall prepare and file, or cause to be prepared and filed, all tax returns and
reports that are required to be filed by or with respect to each Property Owner
entity for all tax periods ending on or prior to the Closing Date and any
amended tax return or report for any such tax period (any such tax return or
report or amended tax return or report, a Pre-Closing Tax Return). Unless otherwise required by applicable law
or contrary to the reasonable advice of Sellers tax counsel or accountants,
any Pre-Closing Tax Return shall be prepared on a basis consistent with past
practice. Seller shall deliver, or
cause to be delivered (the date of such delivery, the Delivery Date), a
copy of each such Pre-Closing Tax Return to the Purchaser for the Purchasers review. The Purchaser shall have until midnight on
the tenth (10th) day following the Delivery Date of a Pre-Closing
Tax Return to deliver to the Seller any proposed revisions that it may have to
such return, which proposed revisions shall be in writing and shall be set
forth in reasonable detail. Seller may
incorporate (or cause to be incorporated) any one or more of such proposed
revisions but shall be required to incorporate (or cause to be incorporated)
only those proposed revisions: (i) which are not inconsistent with the past
practice in filing such return, except if otherwise required by applicable law
or contrary to the reasonable advice of Sellers tax counsel or accountants;
(ii) in the case of any federal income tax return, which has substantial
authority (within the meaning of Treasury Regulations
Section 1.6662-4(d)(1)) and which would replace a position for which there
is no substantial authority (within the meaning of Treasury Regulations
Section 1.6662-4(d)(1)); and (iii) in the case of any other Pre-Closing
Tax Return, which are correct under applicable law and which would replace a
position which is clearly erroneous; provided, however, that,
notwithstanding anything herein to the contrary, Purchasers prior written
consent (which consent shall not be unreasonably withheld, conditioned or
delayed) shall be required with respect to any position contained on any such
Pre-Closing Tax Return which would reasonably result in an increase in
liability to Purchaser post-Closing (including under the Financial Agreement or
Amended Financial Agreement). Seller,
and only Seller, may prepare and file or cause to be prepared and filed a
Pre-Closing Tax Return, and under no circumstances may a Pre-Closing Tax Return
be filed by Purchaser or any other person without Sellers prior written
consent. Seller, and only Seller, shall control (subject to Purchasers rights
hereunder) any Audit (as defined below) in respect of any
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tax period ending on or prior to the Closing Date (Seller
Audit) and, in connection therewith, Seller shall keep
Purchaser fully and contemporaneously apprised of all material aspects of any
Seller Audit and shall promptly furnish or cause to be promptly furnished to
Purchaser copies of any and all documents, reports, correspondence and other
written materials pertaining to any Seller Audit. Seller shall be authorized to take, or cause to be taken (or not
take, or cause not to be taken) any action with respect to any Seller Audit in
its sole discretion; provided, however, that Seller shall not
take or cause to be taken (or not take, or cause not to be taken) any action
which would reasonably result in an increase in liability to Purchaser
post-Closing (including under the Financial Agreement or Amended Financial
Agreement) without Purchasers prior written consent (which consent shall not
be unreasonably withheld conditioned or delayed). Seller, and only Seller,
shall be entitled to any refund or credit (and/or benefit therefrom) resulting
from the filing of any Pre-Closing Tax Return or arising from or in respect of
any Seller Audit.
(ii) The Purchaser shall
prepare, or cause to be prepared, and timely file, or cause to be timely filed,
all tax returns and reports that are required to be filed by or with respect to
each Property Owner for all tax periods beginning prior to, and ending after,
the Closing Date, as well as any amended tax return or report for any such tax
period (any such return and report or amended return or report, a Straddle
Return). Purchaser
shall deliver, or cause to be delivered a copy of each such Straddle Return to
Seller for Sellers review at least ten (10) prior to the filing thereof. Sellers prior written consent (not to be
unreasonably withheld, conditioned or delayed) shall be required with respect
to any position contained on a Straddle Return which would reasonably result in
an increase in liability to Seller for any pre-Closing period (including under
the Financial Agreement or Amended Financial Agreement), except that no such
consent shall be required if the total liability resulting from such position
is allocable proportionately between Seller and Purchaser and Purchaser is
liable for more than fifty percent (50%) of said liability. Unless otherwise required by applicable law,
any Straddle Return shall be prepared on a basis consistent with past practice
(to the extent of past practice). The Purchaser shall control (subject to
Sellers rights hereunder) and, unless the Seller consents in writing for the
Purchaser to do otherwise, shall diligently pursue and defend (and shall cause
a Property Owner to diligently pursue and defend) any Audit of any Straddle
Period (Straddle Audit); provided, however that, without Sellers
prior written consent (which consent shall not be unreasonably withheld,
conditioned or delayed), Purchaser shall not take or cause or permit to be
taken (or not take, or cause or permit not to be taken) any action which could
reasonably be expected to result in an increase in liability for Seller for any
pre-Closing period (including under the Financial Agreement or Amended
Financial Agreement), except that no such consent shall be required if the
total liability resulting from such action is allocable proportionately between
Seller and Purchaser and Purchaser is liable for more than fifty percent (50%)
of said liability. Purchaser shall keep
the Seller fully and contemporaneously apprised of all material aspects of any
Straddle Audit and shall promptly furnish or cause to be promptly furnished to
the Seller copies of any and all documents, reports, correspondence and other
written materials pertaining to any Straddle Audit. At the reasonable request of Seller, the Purchaser shall use
commercially reasonable efforts to pursue any claim for a refund or credit in
respect of any taxes for any Straddle Period, either by the filing of an
amended Straddle Return or during a Straddle Audit, unless Purchaser reasonably
believes, and is able to establish to the reasonable satisfaction of
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Seller and its tax counsel and accountants, that the
total cost of pursuing such claim would exceed the amount of such refund or
credit. Purchaser shall pay to Seller
Sellers proportionate share of any such refund or credit (i.e., the amount of such
refund or credit multiplied by the fraction the numerator of which is the total
number of days in the Pre-Closing Straddle Period and the denominator of which
is the total number of days in such Straddle Period) and any interest thereon
so obtained promptly after receipt from, or allowance thereof, by the relevant
tax authority, less Sellers proportionate share of the cost thereof. The Seller and Purchaser shall, and Purchaser
shall cause any Property Owner to, fully cooperate in the obtaining of any
refund or credit.
(iii) For purposes of this Section
17.16(b), the term Audit shall mean any audit,
assessment, or other examination or claim by any tax authority and any
judicial, administrative or other proceeding or litigation (including any
appeal of any such judicial, administrative or other proceeding or litigation),
relating to taxes or tax returns or reports.
For purposes of this Section 17.16(b), the term Pre-Closing
Straddle Period shall mean with respect to any Straddle Period,
the portion of such Straddle Period beginning on the first day thereof and
ending on an including the Closing Date.
The Purchaser shall not dispose of any records or documents relevant to
any taxes or Pre-Closing Returns or Straddle Returns prior to the later of six
months after the expiration of the applicable limitations period on assessment
with respect to any such taxes or tax returns, or the final resolution of any
Seller Audit or Straddle Audit initiated prior to the expiration of the
applicable limitations period.
(iv) Seller
and Purchaser shall cooperate fully, to the extent reasonably requested, in
connection with the filing of any tax return (e.g., Pre-Closing Tax Return or
Straddle Tax Return) or the procuring or claiming of any refund or credit for
any overpayment of taxes and with respect to any Audit (e.g., any Seller Audit
or Straddle Audit). Such cooperation
shall include, but shall not be limited to:
(A) subject to any limitations set forth in this Section 17.16, the
taking or making or the declining to take or make (or the causing of any
Property Owner to take or make or to decline to take or make) any action,
position or claim with respect to any Audit or tax return, as directed by the
party authorized under Section 17.16 to prepare, file and/or control such tax
return or Audit (e.g., with respect to Sellers control of any Seller
Audit in accordance with Section 17.16(b)(i)); (B), the prompt furnishing
and/or making available by Seller, Purchaser and any Property Owner of any and
all relevant records, documents, consents, certificates, workpapers and other
information as may be necessary to control and defend any Audit and/or to
prepare and timely file any tax return; and (C) making employees available on a
mutually convenient basis to sign any tax return and/or sign-off on any Audit
and to provide additional information and explanation of any material provided
hereunder.
(c) For purposes of this Section 17.16, and as the
context requires, any reference to Property Owner in this Section 17.16 shall
be deemed to refer to and include any one or more of the Post-Transfer AFE
entities.
Section 17.17 Exculpation. (a) If the Closing shall occur, other than expressly contained
in guaranties, indemnities or agreements entered into at Closing by Seller, 8/9
Transferee and/or MCRLP or Sellers Affiliates for the benefit of Purchaser
(and/or Purchasers
61
Affiliates), Purchaser acknowledges and agrees that
Purchaser shall look solely to Sellers, AFEs, PXURAs, PXLAs and PXRs
interests in the Property, the Ground Lease and the Sublease, and Sellers LLC
Interest, for the recovery of any judgment against Seller arising out of or
relating to this Agreement and the transactions contemplated herein, and no
other property or assets of Seller, Sellers Affiliates or any of Sellers and
Sellers Affiliates direct and indirect shareholders, officers, directors,
partners, principals, members, employees, agents, contractors, and any
successors or assigns of the foregoing (collectively with Seller, Seller Related Parties) shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Purchasers remedies under or with respect to this Agreement. Purchaser agrees to indemnify and hold the
Seller Related Parties harmless from and against any and all losses, costs,
damages, liens, claims, liabilities or expenses (including, but not limited to,
reasonable attorneys fees, court costs and disbursements) (collectively, Losses) incurred by any of the
Sellers Related Parties arising from or by reason of any damage to person or
property caused by Purchasers breach of this Section 17.17(a).
(b) If
the Closing occurs hereunder, then other than expressly contained in
guaranties, indemnities or agreements entered into at Closing by Purchaser,
Post-Transfer AFE, iStar or Purchasers Affiliates for the benefit of Seller
(and/or Sellers Affiliates), Seller acknowledges and agrees that Seller shall
look solely to Purchasers, AFEs, PXURAs, PXLAs and PXRs interests in the
Property, the Ground Lease and the Sublease, and Sellers LLC Interest, for the
recovery of any judgment against Purchaser arising out of or relating to this
Agreement and the transactions contemplated herein, and no other property or
assets of Purchaser, Purchasers Affiliates or any of Purchasers and
Purchasers Affiliates direct and indirect shareholders, officers, directors,
partners, principals, members, employees, agents, contractors, and any
successors or assigns of the foregoing (collectively with Purchaser, Purchaser Related Parties) shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Sellers remedies under or with respect to this Agreement. Seller agrees to indemnify and hold the
Purchaser Related Parties harmless from and against any and all Losses incurred
by any of the Purchasers Related Parties arising from or by reason of any
damage to person or property caused by Sellers breach of this Section
17.17(b).
Section 17.18 Drafts Not an Offer to Enter
into a Legally Binding Contract. The parties hereto agree that
the submission of a draft of this Agreement by one party to another is not
intended by either party to be an offer to enter into a legally binding
contract with respect to the purchase and sale of Sellers LLC Interest or the
Property. The parties shall be legally
bound with respect to the purchase and sale of the Sellers LLC Interest pursuant
to the terms of this Agreement only if and when the parties have been able to
negotiate all of the terms and provisions of this Agreement in a manner
acceptable to each of the parties in their respective sole discretion,
including, without limitation, all of the exhibits hereto, and each of Seller
and Purchaser have fully executed and delivered to each other a counterpart of
this Agreement. Unless and until each
of Seller and Purchaser have fully executed and delivered a counterpart of this
Agreement to the other, neither shall have any obligation whatsoever to the
other, except as set forth in the Confidentiality Agreement.
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(a) As
set forth in Section 7.1(e), Purchaser is permitted to have negotiations
with Schwab regarding the Schwab Lease and related issues.
Section 18.2 Work Allowance and Additional Work Allowance.
(a) Purchaser
acknowledges that (i) pursuant to and in accordance with the provisions of (x) Section
6.02 of the Schwab Lease, PXLA is obligated to pay to Schwab the Work
Allowance, and (y) Section 6.05 of the Schwab Lease, PXLA is obligated
to pay to Schwab the Additional Work Allowance and (ii) the Additional Work
Allowance is repaid to the landlord under the Schwab lease during the term
thereof in accordance with the provisions of Section 6.05(f) of the
Schwab Lease. It is the intention of
the parties that Seller shall provide Purchaser, at Closing, a credit in an
amount equal to any unpaid portion of the Work Allowance (the Work Allowance Credit), and Purchaser
(together with Purchasers Affiliates) shall, from and after the Closing,
assume all obligations and liabilities with respect to the Work Allowance and
Additional Work Allowance, and shall pay to Schwab same as and when due.
(b) Notwithstanding
anything to the contrary in the foregoing, Purchaser shall indemnify, defend
and hold the Seller Related Parties (including, without limitation, MCRLP and
Columbia), harmless from any and all Losses arising or resulting out of
Purchasers failure to pay the Work Allowance (up to, but not to exceed the
amount of the Work Allowance Credit) and the Additional Work Allowance to
Schwab as and when due.
(c) In
the event that it shall be finally determined (whether by settlement or by a
final, non-appealable order issued by a court of competent jurisdiction) that
any Work Allowance payments in excess of the Work Allowance Credit are owed
after the Closing to Schwab under Section 6.02 of the Schwab Lease, then
Seller shall indemnify, defend, and hold Purchaser and the Purchaser Related
Entities harmless from any and all Losses arising on account of such excess
Work Allowance payments.
Section 19.1 Indemnification by Seller. In addition to any other
indemnities expressly provided for in this Agreement, Seller agrees to
indemnify, hold harmless and defend Purchaser from and against:
(a) any
Losses which accrue or which are based upon Sellers failure to comply with its
Closing Surviving Obligations or events which occurred prior to the Closing
Date, except for Losses arising out of matters which are Purchasers liability
under this
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Agreement, all matters which pursuant to Section
5.4 of this Agreement Seller has disclaimed liability or responsibility
for, including, without limitation, the condition of the Property on or prior
to the Closing Date, and matters which are apportioned hereunder;
(b) any
Losses which accrue or which are based upon events related to the Excluded Real
Property which occurred prior to the Closing Date; and
(c) all
reasonable costs and expenses (including reasonable attorneys fees and
expenses) incurred by the Purchaser in connection with any action, suit,
proceeding, demand, assessment or judgment instituted by a third party against
Purchaser or by the Purchaser against Seller or a third party incident to any
of the matters indemnified against in this Section 19.1.
Section 19.2 Indemnification by Purchaser. In addition to any other
indemnities expressly provided for in this Agreement, Purchaser agrees to
indemnify, hold harmless and defend Seller from and against:
(a) any
Losses which accrue or which are based on Purchasers failure to comply with
its Closing Surviving Obligations or events which occurred on or after the
Closing Date, including, without limitation, any failure on the part of
Purchaser to pay (or cause to be paid) the Renewal Term Schwab Commissions and
any failure on the part of Purchaser (and Purchasers Affiliates) to perform as
required under this Agreement and the Schwab Lease (except as the obligations
of performance thereunder is retained by Seller as expressly provided in this
Agreement); and
(b) all
reasonable costs and expenses (including reasonable attorneys fees and
expenses) incurred by the Seller in connection with any action, suit,
proceeding, demand, assessment or judgment instituted by a third party against
Seller or by the Seller against Purchaser or a third party incident to any of the
matters indemnified against in this Section 19.2.
Section 19.3 Survival of Indemnity. The provisions of this Article XIX shall
survive the Closing until the tenth (10th) anniversary of the Closing Date,
unless a shorter statute of limitations shall apply.
ARTICLE XX
8/9 TRANSFEREE DEBT MAINTENANCE COVENANT
Section 20.1 Maintenance Covenant. From the Closing through the second
anniversary of the Closing (the Net Worth
Survival Period), Seller shall cause 8/9 Transferee, and
Purchaser shall cause Post-Transfer AFE, to maintain a Net Worth of not less
than $10,000,000.00. Notwithstanding
anything to the contrary provided herein, each of Seller and Purchaser shall
have the right at any time during the Net Worth Survival Period to provide
Escrow Agent with cash or a Letter of Credit in the amount of $10,000,000, in
which case such
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party providing the cash or Letter of Credit shall
have no further obligations under this Article XX; provided, that if either
party has delivered a Letter of Credit, such party shall have no further
obligations as aforesaid so long as such Letter of Credit remains in effect
through the end of the Net Worth Survival Period or so long as the Escrow Agent
draws on any such Letter of Credit and holds cash proceeds in-lieu of such
Letter of Credit. Any cash or Letter of
Credit delivered to Escrow Agent shall be held by Escrow Agent pursuant to an
escrow agreement in form reasonably satisfactory to the parties. If any party provides cash or a Letter of
Credit hereunder, such cash or Letter of Credit (less any amounts drawn down
under the escrow agreement) shall be refunded to such party at the expiration
of the Net Worth Survival Period. Net
Worth means (a) in the case of Post-Transfer AFE, net worth computed
in accordance with generally accepted accounting principles and (b) in the
case of 8/9 Transferee, the value of the Excluded Real Property and any
improvements now or hereafter built thereon less any debt secured thereby. Letter of Credit means an irrevocable,
unconditional letter of credit, in form approved by the party receiving such
letter of credit (which approval shall not be unreasonably withheld,
conditioned or delayed), naming Escrow Agent as beneficiary, issued by a bank
organized or licensed under the laws of the United States, or any state
thereof, having (i) a net worth computed in accordance with generally
accepted accounting principles in excess of $1,500,000,000 and (ii) a
senior unsecured debt rating of A or better as rated by Standard and Poors or
A-2 or better as rated by Moodys, and providing for draws by sight draft in
New York or New Jersey, having a term of not less than 60 days. Seller agrees to indemnify, defend and hold
harmless Purchaser, Post-Transfer AFE and the other entities constituting
Property Owner (as reconstituted upon Closing) from and against any and all
Losses which any such Persons may incur on account of Sellers failure to cause
8/9 Transferee to comply with Section 20.1. Purchaser agrees to indemnify, defend and
hold harmless the Seller from and against any and all Losses which any such
Persons may incur on account of Purchasers failure to cause Post-Transfer AFE
to comply with Section 20.1.
Section 20.2 Guaranty of Maintenance. At the Closing, MCRLP shall execute a
guaranty pursuant to which MCRLP agrees to guaranty Sellers obligations under
this Article XX. At the Closing,
iStar shall execute a guaranty pursuant to which iStar agrees to guaranty
Purchasers obligations under this Article XX.
[The remainder of this page is
intentionally left blank.]
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IN
WITNESS WHEREOF, Seller and Purchaser have respectively
executed this Agreement as of the Effective Date.
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PURCHASER:
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iSTAR
HARBORSIDE LLC
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By:
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iStar Harborside
Member, LLC, member
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By:
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iStar Financial Inc.,
member
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By:
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/s/ H. CABOT LODGE, III
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Name:
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H. Cabot Lodge, III
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Title:
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Executive Vice
President
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SELLER:
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M-C
Harsimus Partners L.L.C.
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By:
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Mack-Cali Realty, L.P.,
sole member
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By:
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Mack-Cali Realty
Corporation,
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general partner
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By:
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/s/ MITCHELL E. HERSH
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Name:
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Mitchell E. Hersh
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Title:
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Chief Executive Officer
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COLUMBIA DEVELOPMENT COMPANY, L.L.C.
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By:
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Atlantis Charter
Company, L.L.C., member
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By:
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/s/ FRANK GUARINI
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Name:
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Frank Guarini
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Title:
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Member
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and
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By:
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Columbia Charter Group,
L.L.C., member
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By:
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/s/ JOSEPH PANEPINTO
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Name:
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Joseph Panepinto
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Title:
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Member
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[Additional
Signatures on Following Page]
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The undersigned is executing this Agreement for the
sole and exclusive purpose of evidencing its agreement with the matters set
forth in Sections 3.2 and 4.3 and Article XVI of
this Agreement.
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ESCROW
AGENT:
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FIRST AMERICAN TITLE INSURANCE
COMPANY
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By:
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/s/ ANTHONY RUGGERI
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Name:
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Anthony Ruggeri
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Title:
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Vice President
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The undersigned is executing this Agreement for the
sole and exclusive purpose of evidencing its agreement set forth in Section
5.5 of this Agreement.
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iSTAR FINANCIAL INC.
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By:
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/s/ H. CABOT LODGE, III
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Name:
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H. Cabot Lodge, III
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Title:
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Executive Vice President
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