UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September , 1997 (August
28, 1997)
THE PRICE REIT, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-13432 52-1746059
(State or Other (Commission File (IRS Employer
Jurisdiction of Number) Identification No.)
Incorporation)
7979 Ivanhoe Avenue, Suite 524 92037
La Jolla, California (Zip Code)
(Address of Principal Executive
Offices)
Registrant's telephone number, including area code: (619) 551-2320
None
(Former Name or Former Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets
On August 28 and August 29, 1997, The Price REIT, Inc., a Maryland corporation
(the "Company"), acquired two properties for an aggregate purchase price of
approximately $53.5 million. The properties are:
Renaissance Centre ("Renaissance") located in Altamonte Spring (Orlando),
Florida was acquired on August 29, 1997. Pursuant to a Contribution Agreement
(the "Contribution Agreement"), dated as of August 28, 1997, between Altamonte
Joint Venture ("AJV") and The Price REIT Renaissance Partnership, L.P. ("PRRP"),
AJV contributed Renaissance to PRRP. The Company is a 99% general partner and
AJV is a 1% limited partner of PRRP pursuant to the Agreement of Limited
Partnership of The Price REIT Renaissance Partnership, L.P., dated as of August
22, 1997, between the Company and AJV. Pursuant to the Contribution Agreement,
in consideration for its limited partnership interest in PRRP, AJV contributed
Renaissance to PRRP subject to a loan (the "Loan") in the amount of $32.2
million secured by, among other things, a mortgage on Renaissance. PRRP reduced
the amount of the Loan to $7 million following the contribution and the Company
then purchased the Loan from the original lender. The Company paid an aggregate
consideration of approximately $33.5 million, including $7 million to purchase
the Loan, for its 99% interest in Renaissance. The aggregate consideration of
$33.5 million was financed with an advance of $13 million from the Company's $75
million unsecured line of credit and the balance with cash. Renaissance
contains approximately 271,000 rentable square feet and is anchored by Uptons,
Ross Stores, Michaels, General Cinema, Barnes & Noble, Portfolio Home
Furnishings and Blockbuster and is 100% leased.
West Farms Shopping Center ("West Farms") located in Farmington, Connecticut was
acquired from Westfarms, L.P. on August 28, 1997. West Farms contains
approximately 185,000 rentable square feet and is anchored by Borders Books, The
Sports Authority, T.J. Maxx, Linens 'N Things, Petco and Fabri-Centers and is
99% leased. The purchase price of West Farms was $20 million. The Company
financed this acquisition by assuming a $14.7 million loan secured by West Farms
and the balance with cash.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Properties Acquired
The Company will file a statement of revenue over specific operating
expenses for the Renaissance Centre property described in this Form 8-K with an
amendment to this Form 8-K as soon as practicable, but not later than 60 days
after the filing of this Form 8-K.
(b) Pro Forma Financial Information
The Company will file pro forma financial information concerning the
acquired properties described in this Form 8-K with an amendment to this Form 8-
K as soon as practicable, but not later than 60 days after the filing of this
Form 8-K.
(c) Exhibits
The following exhibits are filed with this report on Form 8-K:
Exhibit No. Description
----------- -----------
2.1 Contribution Agreement, dated as of August 28,
1997, by and between The Price REIT Renaissance
Partnership, L.P., a California limited
partnership, and Altamonte Joint Venture, a
Florida general partnership
2.2 Agreement of Limited Partnership of The Price
REIT Renaissance Partnership, L.P., dated as of
August 22, 1997, by and among The Price REIT,
Inc. and the Limited Partners named therein
2.3 Agreement of Purchase and Sale, dated as of June
19, 1997, by and between The Price REIT, Inc. and
Westfarms, L.P., a Connecticut limited
partnership, as amended by First Amendment to
Agreement of Purchase and Sale, dated as of July
29, 1997, and Second Amendment to Agreement of
Purchase and Sale, dated as of August 21, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE PRICE REIT, INC.
Date: September , 1997 By: /GEORGE M. JEZEK/
-----------------
George M. Jezek
Chief Financial Officer
Exhibit Index
Exhibit No. Description
----------- -----------
2.1 Contribution Agreement, dated as of August 28,
1997, by and between The Price REIT Renaissance
Partnership, L.P., a California limited
partnership, and Altamonte Joint Venture, a
Florida general partnership
2.2 Agreement of Limited Partnership of The Price
REIT Renaissance Partnership, L.P., dated as of
August 22, 1997, by and among The Price REIT,
Inc. and the Limited Partners named therein
2.3 Agreement of Purchase and Sale, dated as of June
19, 1997, by and between The Price REIT, Inc. and
Westfarms, L.P., a Connecticut limited
partnership, as amended by First Amendment to
Agreement of Purchase and Sale, dated as of July
29, 1997, and Second Amendment to Agreement of
Purchase and Sale, dated as of August 21, 1997
AGREEMENT OF PURCHASE AND SALE
by and between
THE PRICE REIT, INC., a Maryland corporation,
as Purchaser
and
WESTFARMS, L.P., a Connecticut limited partnership,
as Seller
Dated as of June 19, 1997
_________________________________________________________________
Table of Contents
SECTION 1 DEFINITIONS 1
SECTION 2 PURCHASE AND SALE 7
SECTION 3 PAYMENT OF PURCHASE PRICE 7
3.1 Purchase Price 7
3.2 Manner of Delivery 7
SECTION 4 REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 8
4.1 Representations and Warranties of Purchaser
to Seller 8
4.2 Representations and Warranties of Seller 9
4.3 Limitations Period 12
SECTION 5 TITLE REVIEW AND DUE DILIGENCE 13
5.1 Title Review 13
5.2 Due Diligence Review 14
5.3 Deliveries 15
SECTION 6 COVENANTS OF SELLER AND PURCHASER 15
6.1 Covenants 15
6.2 Consents 15
6.3 Liens 16
6.4 Leases 16
6.5 Insurance 16
6.6 New Contracts 16
6.7 Cooperation 16
SECTION 7 CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE 17
7.1 Representations and Warranties at Closing 17
7.2 Compliance with Agreement 17
7.3 Title Policy 17
7.4 Approval of Board of Directors 17
7.5 No Condemnation 17
7.6 Consents Received 17
7.7 No Change in Law 18
7.8 Financial Audit 18
7.9 Bankruptcy and Related Matters 18
7.10 No Prior Termination 18
7.11 Condition of the Property 18
7.12 Estoppels 19
7.13 Existing Loan 19
7.14 Further Assurances 19
SECTION 8 CONDITIONS TO SELLER'S OBLIGATION TO CLOSE 19
8.1 Representations and Warranties True at Closing19
8.2 Compliance with Agreement 19
8.3 No Change in Law 19
8.4 Bankruptcy and Related Matters 20
8.5 No Prior Termination 20
8.6 Existing Loan 20
8.7 Partner Consent 20
8.8 Further Assurances 20
SECTION 9 CLOSING 20
9.1 Time and Place 20
9.2 Earnest Money Deposits 20
9.3 Deposits in Escrow Prior to Closing 21
9.4 Seller's Deliveries to the Title Escrow 21
9.5 Seller's Deliveries Outside the Title Escrow 22
9.6 Purchaser's Deliveries to the Title Escrow 23
9.7 Close of Escrow 23
9.8 Post-Closing Covenants 23
SECTION 10 CLOSING ADJUSTMENTS AND RELATED ITEMS 24
10.1 Closing Costs 24
10.2 Prorations 24
10.3 Title and Escrow Costs 26
10.4 Assumption Fee 26
10.5 Calculations for Closing 26
SECTION 11 FAILURE OF SELLER TO PERFORM; TERMINATION; NO
WAIVER 27
11.1 Purchaser's Remedies 27
11.2 Seller's Remedies 27
11.3 Termination 28
SECTION 12 BROKERS 28
SECTION 13 RISK OF LOSS 28
13.1 Definition of Material Damage 28
13.2 Effect of Non-Material Damage to Improvements 28
13.3 Effect of Material Damage to Improvements 29
13.4 Definition of Material Taking 29
13.5 Effect of Non-Material Taking 29
13.6 Effect of Material Taking 30
13.7 Extension of Outside Closing Date 30
SECTION 14 MISCELLANEOUS 30
14.1 Counterparts 30
14.2 Governing Law 30
14.3 Entire Agreement 30
14.4 Amendment 31
14.5 Waiver 31
14.6 Successors and Assigns 31
14.7 Transfer to Qualified Intermediary 31
14.8 Confidentiality 31
14.9 Time of the Essence 31
14.10 Personal Liability 31
14.11 Attorneys' Fees 32
14.12 Notices 32
14.13 Headings 33
14.14 Severability 33
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and entered into
as of June 19, 1997 by and between THE PRICE REIT, INC., a Maryland corporation
("Purchaser"), and WESTFARMS, L.P., a Connecticut limited partnership
("Seller").
RECITALS
A. Seller owns the real property commonly known as West Farms Shopping Center, a
shopping center containing approximately 184,981 rentable square feet located in
the towns of Farmington and New Britain, Connecticut (such property is referred
to herein as the "Property"), and more particularly described on Exhibit A
attached hereto.
B. Seller desires to, and Purchaser desires Seller to, transfer and assign to
Purchaser, all of Seller's right, title and interest in and to the Property in
exchange for the consideration more particularly described herein, on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing premises, and the
mutual undertakings set forth below, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
TERMS OF AGREEMENT
SECTION 1
Definitions
The following capitalized terms not otherwise defined herein shall have the
following meanings herein:
Additional Earnest Money Deposit. "Additional Earnest Money Deposit" shall have
the meaning set forth in Section 9.2.2 hereof.
Appurtenances. "Appurtenances" shall mean all rights, privileges, interests,
licenses, claims, easements, benefits, covenants, conditions and servitudes of
any type or nature, whether now owned or hereafter acquired, which are
appurtenant to or otherwise benefit the Land, including without limitation, all
minerals, oil, gas and other hydrocarbon substances on or under the Land, to the
extent such rights, privileges, interests, licenses, claims, easements,
benefits, covenants, conditions and servitudes are owned by Seller, as well as
all development rights, air rights, water, water rights and water stock relating
to the Land and any other easements, rights of way or appurtenances owned by
Seller and used in connection with the beneficial operation, use and enjoyment
of the Land, the Improvements and the Intangible Property with respect thereto
or any other appurtenance thereto, together with all rights of Seller in and to
streets, sidewalks, alleys, gores, strips, driveways, parking areas and areas
adjacent thereto or used in connection therewith, and all rights of Seller in
any land lying in the bed of any existing or proposed street adjacent to the
Land.
Assignment of Contracts. The "Assignment of Contracts" shall mean an assignment
of contracts in the form of Exhibit C attached hereto.
Assignment of Leases. The "Assignment of Leases" shall mean an assignment of
leases in the form of Exhibit D attached hereto.
Assumption Agreement. The "Assumption Agreement" shall mean a form of
assumption agreement acceptable to Purchaser in its sole and absolute discretion
pursuant to which Purchaser shall assume the obligations of Seller under the
Existing Loan arising on or after the Closing Date, and the Existing Lender
shall consent to the sale of the Property to Purchaser.
Audit. "Audit" shall have the meaning set forth in Section 7.8 hereof.
Auditor. "Auditor" shall have the meaning set forth in Section 7.8 hereof.
Bill of Sale. The "Bill of Sale" shall mean a bill of sale in the form of
Exhibit E attached hereto.
Charter Documents. "Charter Documents" shall mean the Articles of Amendment and
Restatement and the Amended and Restated Bylaws of Purchaser, as amended and
modified through the date hereof.
Closing. "Closing" shall mean the date and time at which (i) all of the
conditions to the conveyance of the Property have been fully performed and
satisfied or waived pursuant to this Agreement, (ii) Title Company is committed
to issue the Title Policy, and (iii) the Deed has been recorded in the Official
Records.
Closing Date. "Closing Date" shall be the date on which the Closing occurs.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder from time to time.
Contracts. "Contracts" shall mean all written or oral management,
architectural, engineering, leasing, insurance, bonding, construction,
financing, guarantee, indemnity, service, maintenance, operating, repair,
collective bargaining, employment, employee benefit, equipment leasing, supply,
warranty, purchase, consulting, professional service, advertising, promotion,
public relations and other contracts and commitments (excluding the Leases) to
which Seller is a party and which relate in any way to the Real Property or any
part thereof.
Deed. "Deed" shall mean a deed in the form attached hereto as Exhibit B.
Deposits. "Deposits" shall mean, collectively, the Earnest Money Deposit and
the Additional Earnest Money Deposit.
Earnest Money Deposit. "Earnest Money Deposit" shall have the meaning set forth
in Section 9.2.1 hereof.
Environmental Report. "Environmental Report" shall mean, collectively, that
certain Phase I dated April 1995 prepared by TRC Environmental Corp. ("TRC") as
project number 18545; that certain Phase II dated April 1995 prepared by TRC as
project number 18668; that certain letter dated April 30, 1995 from Vancour
Construction Inc. to Seller; and that certain letter dated May 18, 1995 from TRC
to Seller; each as previously delivered by Seller to Purchaser.
Environmental Requirements. "Environmental Requirements" shall mean all
applicable present statutes, regulations, rules, ordinances, codes, licenses,
permits, orders, approvals, plans, authorizations, concessions, franchises and
similar items, of all governmental agencies, departments, commissions, boards,
bureaus or instrumentalities of the United States, states and political
subdivisions thereof and all applicable judicial and administrative and
regulatory decrees, judgments and orders relating to the protection of human
health or the environment, including, without limitation: (i) all requirements,
including but not limited to those pertaining to reporting, licensing,
permitting, investigation and remediation of emissions, discharges, releases or
threatened releases of "Hazardous Materials," chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes whether
solid, liquid or gaseous in nature, into the air, surface water, ground water or
land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials, or wastes, whether
solid, liquid or gaseous in nature; and (ii) all requirements pertaining to the
protection of the health and safety of employees or the public.
Escrow Company. "Escrow Company" shall mean Lawyers Title Insurance
Corporation.
Existing Lender. "Existing Lender" shall mean Massachusetts Mutual Life
Insurance Company, a Massachusetts corporation.
Existing Loan. "Existing Loan" shall mean the existing loan secured by the
Property.
Existing Loan Balance. "Existing Loan Balance" shall mean the outstanding
principal amount of the Existing Loan as of the Closing Date.
Existing Loan Documents. "Existing Loan Documents" shall mean, collectively,
(i) that certain Construction Loan Agreement dated as of June 9, 1995, executed
by and between Seller, as borrower, and Existing Lender, as lender; (ii) that
certain Promissory Note dated June 9, 1997 in the original principal amount of
$15,000,000, executed by Seller and payable to Existing Lender; (iii) that
certain Open-End Construction Mortgage and Security Agreement dated as of
June 9, 1995, executed by Seller, as mortgagor, to Existing Lender, as
mortgagee, recorded in Volume 1200, Page 927 of the official records of Hartford
County, Connecticut, and (iv) that certain Assignment of Leases and Rents dated
as of June 9, 1995, executed by Seller, as assignor, to Existing Lender, as
assignee, recorded in Volume 1200, Page 928 of the official records of Hartford
County, Connecticut.
Existing Loan Estoppel. The "Existing Loan Estoppel" shall mean a written
estoppel statement executed by Existing Lender, in form and substance acceptable
to Purchaser in its reasonable discretion, setting forth the outstanding
principal balance of the Existing Loan, and stating that there are no defaults
(or events, conditions, circumstances or omissions that with the giving of time
or the passage of time or both would constitute defaults) under the Existing
Loan Documents.
FIRPTA Affidavit. "FIRPTA Affidavit" means an affidavit in the form attached
hereto as Exhibit F.
Governmental Approval. "Governmental Approval" shall mean an authorization,
consent or approval of, permit, license or exemption issued by, or registration
or filing with, or report or notice to, any Governmental Authority.
Governmental Authority. "Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government, including without limitation, any government and any
authority, agency, department, board, commission or instrumentality of the
United States of America, any state of the United States or any political
subdivision thereof, and any tribunal or arbitrator of competent jurisdiction.
Hazardous Materials. "Hazardous Materials" shall mean (i) any flammable,
explosive or radioactive materials, hazardous wastes, toxic substances or
related materials including, without limitation, substances defined as
"hazardous substances," "hazardous materials," "toxic substances" or "solid
waste" in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, et seq.; the Toxic Substances
Control Act, 15 U.S.C., Section 2601 et seq.; the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. Section 6901 et seq.; and in the regulations
adopted and publications promulgated pursuant to said laws; (ii) those
substances listed in the United States Department of Transportation Table (49
C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 C.F.R. Part 302 and
amendments thereto); (iii) those substances defined as "hazardous wastes,"
"hazardous substances" or "toxic substances" in any similar federal, state or
local laws or in the regulations adopted and publications promulgated pursuant
to any of the foregoing laws or which otherwise are regulated by any
governmental authority, agency, department, commission, board or instrumentality
of the United States of America, the State of Connecticut or any political
subdivision thereof, (iv) any pollutant or contaminant or hazardous, dangerous
or toxic chemicals, materials, or substances within the meaning of any other
applicable federal, state, or local law, regulation, ordinance, or requirement
(including consent decrees and administrative orders) relating to or imposing
liability or standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended; (v) petroleum or any by-products
thereof; (vi) any radioactive material, including any source, special nuclear or
by-product material as defined at 42 U.S.C. Sections 2011 et seq., as amended,
and in the regulations adopted and publications promulgated pursuant to said
law; (vii) asbestos in any form or condition; and (viii) polychlorinated
biphenyls.
Improvements. "Improvements" shall mean all of Seller's right, title, claim,
interest and estate in, to and under any and all improvements, structures or
fixtures constructed upon the Land including, without limitation, all buildings
and structures presently located on the Land, all apparatus, equipment and
appliances presently located on the Land and used in connection with the
operation or occupancy thereof, such as heating and air conditioning systems and
facilities used to provide any utility services, parking services,
refrigeration, ventilation, garbage disposal, recreation or other services
thereto.
Intangible Property. "Intangible Property" shall mean all of Seller's right,
title, claim, interest and estate in, to and under (i) any and all intangible
personal property owned by Seller which is appurtenant to or used by Seller in
connection with the Real Property or the Improvements or Personal Property with
respect thereto; (ii) any and all Contracts with respect to the Real Property;
(iii) any and all other property, rights in or to property, general intangibles
and contractual rights which Seller may have which are necessary in connection
with, or otherwise affect or relate directly to, the acquisition, development,
improvement, holding, use, operation, maintenance, leasing or sale of the Real
Property or the Improvements or Personal Property with respect thereto,
including, but not limited to, any and all plans, specifications, subdivision
maps and filings with respect thereto, applications, entitlements, Licenses and
Entitlements, subdivision or other bonds, engineering or soil reports, surveys,
maps, inspection reports, management reports, marketing reports, marketing
displays and brochures, all contract rights, warranties from contractors,
architects, engineers and material and labor suppliers whether written or
implied, all books and records, all claims, choses in action, judgments,
remedies, damages and causes of action, all leases, easements, licenses and
rights of way, occupancy or use agreements and all other documents affecting or
relating to the Real Property or the Improvements or Personal Property with
respect thereto; and (iv) any and all other general intangibles, warranties,
guarantees, permits, maps, surveys, entitlements and other intangible rights of
any type or nature relating to any or all of the Real Property, or the
Improvements or Personal Property with respect thereto.
Irrevocable Instructions. "Irrevocable Instructions" shall have the meaning set
forth in Section 9.3 hereof.
Land. "Land" shall mean each separate parcel of real property described in
Exhibit A attached hereto and incorporated herein by this reference and each
reference to the "Land" shall refer to each such separate parcel.
Leases. "Leases" shall mean all leases, occupancy agreements and other similar
agreements to which Seller is a party or by which it or any portion of the
Property is bound, together with all modifications, extensions and renewals
thereof, and any guarantees of any of the foregoing with respect to or demising
any part of the Real Property.
Licenses and Entitlements. "Licenses and Entitlements" shall mean all licenses,
franchises, certifications, authorizations, approvals, rights, privileges,
entitlements and permits issued or approved by any governmental or quasi-
governmental authority or other person or entity having authority over the Real
Property, and all applications, filings and submittals therefor, in each case
relating to the operation, ownership, subdivision, development, use or
maintenance of the Real Property or any part thereof, including, without
limitation, construction permits, grading permits, elevator permits, machinery
permits, business licenses, ingress and egress permits, development agreements,
subdivision, parcel and tract maps and approvals thereof, plans and/or permits
required under the applicable zoning regulations, variances, utility agreements
and commitments, improvement agreements, certificates of occupancy and the like.
Objectionable Matters. "Objectionable Matters" shall have the meaning set forth
in Section 5.1 hereof.
Official Records. "Official Records" shall mean the official records of the
jurisdiction in which the Land is located.
Outside Closing Date. "Outside Closing Date" shall mean the date which is
forty-five (45) days following the final day of the Review Period, or such other
date as may be mutually agreed upon by the parties.
Permitted Exceptions. "Permitted Exceptions" shall mean (i) exceptions to title
approved in writing by Purchaser pursuant to Section 5 hereof, (ii) the Leases,
(iii) all matters that are disclosed on the Survey referred to in Section 5.1
hereof and approved in writing by Purchaser pursuant to Section 5 hereof, and
(iv) the mortgage and the assignment of leases and rents securing the Existing
Loan.
Personal Property. "Personal Property" shall mean and include any and all
tangible personal property located on or about or used in connection with the
Real Property and owned by Seller, including, but not limited to, fixtures,
furniture, furnishings, tools, machinery, appliances and other apparatus and
equipment, plans, specifications, operational handbooks, machinery and/or
equipment, operational instructions and/or specifications, surveys, drawings and
business records.
Property. "Property" shall mean the Real Property, Personal Property and
Intangible Property.
PTR. "PTR" shall have the meaning set forth in Section 5.1 hereof.
Purchase Price. "Purchase Price" shall mean the consideration described in
Section 3 hereof.
Real Property. "Real Property" shall mean the Land, the Appurtenances and the
Improvements with respect thereto.
Recordation. "Recordation" shall mean the act of recording the Deed on the
Closing Date in the Official Records.
Review Period. "Review Period" shall have the meaning set forth in Section 5.1
hereof.
Security Deposits. "Security Deposits" shall mean, collectively, any and all
prepaid rents, refundable deposits, or other security (including letters of
credit) posted or paid by any person under the Leases.
Survey. "Survey" shall have the meaning set forth in Section 5.1 hereof.
Title Company. "Title Company" shall mean Lawyers Title Insurance Corporation.
Title Escrow. "Title Escrow" shall have the meaning set forth in Section 3.2
hereof.
Title Notice. "Title Notice" shall have the meaning set forth in Section 5.1
hereof.
Title Policy. "Title Policy" shall have the meaning set forth in Section 7.3
hereof.
SECTION 2
Purchase and Sale
At the closing of the transactions contemplated by this Agreement, subject to
the terms and conditions of this Agreement, Seller shall assign, transfer,
convey and deliver to Purchaser, and Purchaser shall accept from Seller, the
Property.
SECTION 3
Payment of Purchase Price
3.1. Purchase Price. The Purchase Price is Twenty Million and No/100 Dollars
($20,000,000.00) cash, subject to prorations and adjustment as provided in
Section 10 hereof.
3.2. Manner of Delivery. At the Closing, Purchaser shall cause the Purchase
Price to be paid as follows:
(a) Purchaser shall assume the obligations of Seller under the Existing Loan
Documents with respect to the Existing Loan Balance; and
(b) Purchaser shall cause to be paid into the escrow with the Escrow Company
(the "Title Escrow") by wire transfer of immediately available funds in
accordance with the provisions of Section 9 hereof, an amount equal to the
difference of the Purchase Price less the Existing Loan Balance, less the
Deposits and interest accrued thereon.
SECTION 4
Representations and Warranties; Indemnification
4.1 Representations and Warranties of Purchaser to Seller. Purchaser hereby
represents and warrants to and covenants with Seller as set forth below in this
Section 4.1.
4.1.1 Authority. Purchaser is duly organized, validly existing and in good
standing under the laws of the State of Maryland, is duly qualified and in good
standing as a foreign corporation in the State of California, and has the power
and authority to own all of its properties and assets and to carry on its
business as presently conducted. On or before the Closing Date, the execution,
delivery and performance of this Agreement and all other agreements contemplated
hereby will have been duly and validly authorized by all necessary action of
Purchaser and this Agreement and all other agreements contemplated hereby will
be valid and binding obligations of Purchaser, enforceable against Purchaser in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating
to or affecting generally the enforcement of creditors' rights and general
principles of equity. Purchaser is a "real estate investment trust" as defined
in Section 856 of the Code.
4.1.2 Status of Charter Documents. The Charter Documents are in full force and
effect, a true, complete and correct copy thereof has been delivered to Seller,
and there are no dissolution, termination or liquidation proceedings pending or
contemplated with respect to Purchaser.
4.1.3 No Litigation or Adverse Events. There are no pending or threatened
investigations, actions, suits, proceedings or claims against or affecting
Purchaser, at law or in equity or before or by any federal, state, municipal or
other governmental department, commission, board, agency, or instrumentality,
domestic or foreign which, if determined adversely, would have a material
adverse impact on the financial condition of Purchaser or the transactions
contemplated hereby and, to Purchaser's knowledge, no material investigation,
action, suit, proceeding or claim is threatened against or affecting Purchaser
or the transactions contemplated hereby, at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
agency, or instrumentality, domestic or foreign.
4.1.4 No Default. Neither Purchaser nor, to the best of its knowledge, any
other party is in default under any agreement to which Purchaser is a party, and
no event exists which with the passage of time or the giving of notice or both
will become a default thereunder on the part of Purchaser nor, to the best of
its knowledge, any other party thereto which would have a material adverse
impact on the financial condition of Purchaser.
4.1.5 No Conflict. The execution, delivery and performance by Purchaser of its
obligations under this Agreement and all other agreements contemplated hereby
will not contravene any provision of applicable law, the Charter Documents, any
statute, law, rule or regulation, or any judgment, order or decree of any
Governmental Authority or court having jurisdiction over Purchaser, and no
consent, approval, authorization or order of or qualification with any
Governmental Authority is required for the performance by Purchaser of its
obligations under this Agreement or any other agreement contemplated hereby.
4.2 Representations and Warranties of Seller. Seller hereby represents and
warrants to and covenants with Purchaser as set forth below in this Section 4.2.
As used herein and elsewhere in this Agreement, the term "Seller's actual
knowledge" shall mean the actual knowledge of each of Messrs. Leonard Cotton and
Robert Dorfman after a review of Seller's written files with respect to the
Property. Seller hereby represents and warrants that the foregoing persons are
the persons employed by Seller with executive, managerial or supervisory
responsibility with respect to the Property. Notwithstanding anything to the
contrary provided in this Agreement, in the event Purchaser shall have actual
knowledge as of the time of Closing that any of Seller's representations or
warranties set forth in this Agreement are false or misleading, but shall elect
to proceed to close this transaction notwithstanding such false or misleading
representation or warranty, Purchaser shall be deemed to have waived any claim
it may have against Seller with respect to such misrepresentation or breach of
warranty unless such misrepresentation or breach of warranty was intentional.
4.2.1 Authority. Seller is duly organized and validly existing under the laws
of the jurisdiction of its organization, is duly qualified to conduct business
and own real property in the State of Connecticut, and has all requisite power
to own all of its properties and assets and to carry on its business as
presently conducted. The execution, delivery and performance of this Agreement
and all other agreements contemplated hereby has been duly and validly
authorized by all necessary action of Seller and the Agreement and all other
agreements contemplated thereby are and will be valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting generally
the enforcement of creditors' rights and general principles of equity.
4.2.2 Title. Seller holds fee simple title to the Property, and to Seller's
actual knowledge, such fee simple title is free and clear of all liens,
encumbrances, security interests, charges, adverse claims and other exceptions
to title, except for the Leases, Contracts listed on Schedule 4.2.2, matters of
record, matters disclosed by the Survey and the Permitted Exceptions.
4.2.3 The Leases. A list of the current Leases is set forth in the rent roll
attached hereto as Schedule 4.2.3 (the "Rent Roll"). The Rent Roll is true,
complete and correct in all respects and except for the Leases set forth in the
Rent Roll, there are no other leases, licenses or other agreements affecting the
occupancy of the Property. With respect to each Lease: (i) the Lease is in full
force and effect, and constitutes the valid and binding legal obligation of
Seller and the respective tenant, enforceable against each of them in accordance
with its terms; (ii) there are no understandings, oral or written, between the
parties to the Lease which in any manner vary the obligations or rights of
either party; (iii) except as indicated on the Rent Roll, Seller has received no
written notice of a default by Seller under the Lease and except as indicated on
the Rent Roll and to Seller's actual knowledge, there exists no default by the
tenant under the Lease; and (iv) no rent or additional rent under the Lease has
been paid for more than thirty (30) days in advance of its due date.
4.2.4 No Litigation or Adverse Events. Seller has received no written notice
of, and to Seller's actual knowledge, there are no, pending or threatened
investigations, actions, suits, proceedings or claims against or affecting
Seller, the Property, any tenant, or any adjacent property, at law or in equity
or before or by any federal, state, municipal or other governmental department,
commission, board, agency, or instrumentality, domestic or foreign.
4.2.5 Compliance with Laws. To Seller's actual knowledge, Seller is in
compliance in all material respects with all applicable laws, ordinances, rules
and regulations (including without limitation those relating to zoning and the
Americans With Disabilities Act) applicable to the ownership or operation of the
Property. Seller has not received from any insurance company or Board of Fire
Underwriters any notice, which remains uncured, of any defect or inadequacy in
connection with the Property or its operation.
4.2.6 No Defaults in Other Agreements. To Seller's actual knowledge, neither
Seller nor any other party is in material default under any Contract affecting
the Property, and no event exists which, with the passage of time or the giving
of notice or both, will become a material default thereunder on the part of the
Seller or any other party thereto. To Seller's actual knowledge, Seller is in
compliance in all material respects with the terms and provisions of the
covenants, conditions, restrictions, rights-of-way or easements affecting the
Property.
4.2.7 Eminent Domain. To Seller's actual knowledge, there is no existing or
proposed or threatened eminent domain or similar proceeding, or private purchase
in lieu of such a proceeding which would affect the Property in any material
way.
4.2.8 Licenses, Permits, CO's, Zoning, etc. To Seller's actual knowledge, all
permits, certificates of occupancy, business licenses and all other notices,
licenses, permits, certificates and authority required as of the date hereof and
as of the Closing Date in connection with the use or occupancy of the Property
have been obtained and are in full force and effect and in good standing.
4.2.9 Taxes and Assessments. To Seller's actual knowledge, all real property
taxes, and all Seller's personal property taxes, relating to the Property,
excepting those for the current tax year which are not yet overdue (i.e., which
are still payable without interest or penalty), have been paid in full. To
Seller's actual knowledge, there is no existing or proposed assessment that has
or may become a lien on the Property.
4.2.10 Environment. (i) Seller has not engaged in any operations or activities
upon, or any use or occupancy of the Property, or any portion thereof, for the
purpose of or in any way involving the handling, manufacture, treatment,
storage, use, generation, release, discharge, refining, dumping or disposal of
any Hazardous Materials (whether legal or illegal, accidental or intentional)
on, under, in or about the Property, or transported any Hazardous Materials to,
from or across the Property, except in all cases in material compliance with
Environmental Requirements and only in the course of legitimate business
operations at the Property (which shall not include any business primarily or
substantially devoted to the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of Hazardous
Materials); (ii) to Seller's actual knowledge, no tenant, occupant or user of
the Property, nor any other person, has engaged in or permitted any operations
or activities upon, or any use or occupancy of the Property, or any portion
thereof, for the purpose of or in any material way involving the handling,
manufacture, treatment, storage, use, generation, release, discharge, refining,
dumping or disposal of any Hazardous Materials (whether legal or illegal,
accidental or intentional) on, under, in or about the Property, or transported
any Hazardous Materials to, from or across the Property, except in all cases in
material compliance with Environmental Requirements and only in the course of
legitimate business operations at the Property (which shall not include any
business primarily or substantially devoted to the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of Hazardous Materials); (iii) to Seller's actual knowledge, except as
otherwise disclosed in the Environmental Report, no Hazardous Materials are
presently constructed, deposited, stored, or otherwise located on, under, in or
about the Property except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (iv)
to Seller's actual knowledge, except as otherwise disclosed in the Environmental
Report, no Hazardous Materials have migrated from the Property upon or beneath
other properties; and (v) to Seller's actual knowledge, except as otherwise
disclosed in the Environmental Report, no Hazardous Materials have migrated or
threaten to migrate from other properties upon, about or beneath the Property.
4.2.11 Physical Condition. To Seller's actual knowledge: (i) there are no
material structural defects in the Improvements located on or at the Property;
and (ii) the Improvements and Personal Property (including without limitation
plumbing equipment, HVAC, electric wiring and fixtures, gas distribution system,
water and sewage systems, and security systems) are in good working order and
condition, except for defects or required repairs that are not material.
4.2.12 Employees. Seller has no employees.
4.2.13 Mechanic's Liens. All bills and claims for labor performed and materials
furnished to or for the benefit of the Property currently due and contracted for
by Seller or its manager have been paid in full, and there are no mechanic's or
materialmen's liens (whether or not perfected) on or affecting the Property as a
result of labor performed or materials furnished and contracted for by the
Seller or its manager.
4.2.14 Operating Statements. The financial statements delivered by Seller to
Purchaser fairly present the profit or loss from the management and operation of
the Property for the periods covered thereby and, in all material respects,
accurately reflect all rents and other gross receipts, and all amounts paid by
Seller for electricity, water, sewer, other utility services, insurance, fuel,
maintenance and repairs (whether capitalized or expensed), real estate taxes,
payroll and payroll taxes and all other operating and other expenses associated
with the Property.
4.2.15 Disclosure. No representation or warranty of Seller in this Agreement,
or any information, statement or certificate furnished or to be furnished by
Seller or at Seller's direction pursuant to this Agreement or in connection with
the transactions contemplated hereby, contains or shall contain any materially
untrue statement of a material fact or omits or shall omit to state a material
fact necessary to make the statements contained therein not misleading. To
Seller's actual knowledge, there is no material misstatement or omission in the
copies of contracts, agreements and other documents delivered by Seller in
connection with the transactions contemplated hereby.
4.2.16 No Leases of Property or Assets. No material portion of the Personal
Property or fixtures with respect to the Property (other than fixtures owned or
installed by tenants) is leased by the Seller as lessee.
4.3 Limitations Period.
4.3.1 Written Claim Requirements. Notwithstanding the foregoing, any claim
regarding any breach of any representation or warranty must be asserted in
writing with reasonable specificity by the Indemnified Party (as hereinafter
defined), stating in reasonable detail the nature of the claim:
(i) except as specifically provided in Section 4.3.1(iii), within one (1)
year after the Closing in the case of a claim based upon a breach of the
representations, warranties or covenants of Seller contained in this Agreement,
or in an certificate document or instrument delivered by any Seller pursuant to
this Agreement;
(ii) except as specifically provided in Section 4.3.1(iii), within one (1)
year after the Closing in the case of a claim based upon a breach of any
representation, warranty or covenant of Purchaser contained in this Agreement,
or in any certificate, document or instrument delivered by them pursuant to this
Agreement; and
(iii) until the expiration of the applicable statute of limitations in the
case of a claim based upon a breach of the representation, warranty or covenant
of (a) Seller set forth in Sections 4.2.1, 4.2.2 or 4.2.10, or (b) Purchaser set
forth in Section 4.1.1 of this Agreement.
4.3.2 Survival if Written Claim Submitted in Timely Manner. If so asserted in
writing prior to the applicable expiration date, such claims for indemnification
shall survive until resolved by mutual agreement between the Indemnifying Party
and the Indemnified Party (as hereinafter defined) or by judicial determination.
Any claim for indemnification not so asserted in writing prior to the applicable
expiration date shall not thereafter be asserted and shall forever be waived;
provided, however, that the foregoing shall in no way restrict claims based upon
fraud. Each party who may call upon or obligate another party to make an
indemnity payment hereunder is referred to as an "Indemnified Party." Each
party who may be called upon or obligated to make an indemnity payment hereunder
is referred to as an "Indemnifying Party." All amounts paid by an Indemnifying
Party to an Indemnified Party hereunder shall be paid solely in cash.
SECTION 5
Title Review and Due Diligence
5.1 Title Review. As soon as practicable following the execution of this
Agreement but in no event later than fifteen (15) days after the date of this
Agreement, Seller shall provide Purchaser with a current ALTA survey of the
Property, certified to Purchaser and the Title Company in a form reasonably
required by Buyer (the "Survey"). As soon as practicable following the
execution of this Agreement but in no event later than ten (10) days after the
date of this Agreement, Seller shall cause the Title Company to provide to
Purchaser a current preliminary title report with respect to the Property (the
"PTR"). Purchaser shall have until the date that is thirty (30) business days
after the date hereof (the "Review Period") to examine the PTR and the Survey.
Purchaser shall give a written notice to Seller (the "Title Notice") before the
end of the Review Period, either stating that Purchaser has approved the matters
disclosed in the PTR and Survey or identifying those matters in the PTR and/or
Survey which Purchaser finds objectionable (the "Objectionable Matters"). If
Purchaser fails to give a timely Title Notice, it shall be deemed to have given
a Title Notice on the last day of the Review Period stating that all matters set
forth in the PTR and Survey are Permitted Exceptions. Seller may elect to
attempt to cure or remove any Objectionable Matter by giving Purchaser notice of
such election within ten (10) days following the Title Notice, but shall be
under no obligation to do so (except with respect to liens securing the
obligation to repay borrowed money). If Seller delivers a notice electing to
cure or remove each Objectionable Matter on or before the tenth (10th) day
following the Title Notice (whether or not Seller shall have made a timely
election to attempt to cure), then Seller shall be deemed to have covenanted to
Purchaser to remove each Objectionable Matter on or prior to the Closing Date.
If Seller fails to deliver a notice electing to cure or remove each
Objectionable Matter on or before the tenth (10th) day following the Title
Notice, then Seller shall be deemed to have elected to refuse to cure such
Objectionable Matters. In the event Seller elects not to cure such
Objectionable Matters, or elects to cure such Objectionable Matters and fails or
refuses to cure said Objectionable Matters, Purchaser shall have the option,
which must be exercised within ten (10) days of the earlier to occur of (i)
Purchaser's receipt of Seller's response or deemed response, or (ii) Closing,
(a) to waive Purchaser's objections and purchase the Property as otherwise
contemplated in this Agreement, notwithstanding such Objectionable Matters, in
which event the Objectionable Matters shall be deemed to be Permitted
Exceptions; provided, however, that Seller shall remain obligated to remove all
monetary encumbrances (other than liens securing the obligation to repay
borrowed money) affecting the Property or any portion thereof prior to Closing,
and Seller agrees that no monetary encumbrances (other than liens securing the
obligation to repay borrowed money) shall be deemed to be Permitted Exceptions,
or (b) to terminate this Agreement by written notice to Seller and Escrow
Company, whereupon any and all rights and obligations of Purchaser and Seller
hereunder shall terminate (other than any such obligations which, by their
express terms, survive any termination of this Agreement) and within five (5)
days after Purchaser has provided notice to Escrow Company, Escrow Company shall
deliver to Purchaser the Deposits, together with interest thereon.
5.2 Due Diligence Review. Purchaser shall have the right until the conclusion
of the Review Period to complete a customary due diligence review of the
Property, at the sole cost and expense of Purchaser. Seller shall permit access
to the Property by Purchaser and its agents, and shall afford them the
opportunity to inspect and perform any reasonable and non-intrusive tests upon
the Property that Purchaser deems necessary or appropriate to determine whether
the Property is suitable for Purchaser's purposes; provided that Purchaser shall
not unreasonably interfere with Seller's or any tenant's use of the Property.
Purchaser shall not disturb or disrupt the business activities of Seller at the
Property or of the tenants of the Property. Inspections of the Property shall
be conducted only with the prior consent of Seller's property manager (which
consent Seller shall not be unreasonably withheld or delayed), and only after
Purchaser has provided Seller with evidence reasonably acceptable to Seller of
the availability of adequate public liability insurance with respect to losses
or damages arising out of such inspection. Prior to commencing any tests or
investigations which contemplate the drilling or disturbance of the surface of
the Property or any improvements thereto, Purchaser shall submit to Seller its
operational plans for conducting such inspections and tests, which plans shall
be subject to Seller's prior written approval, which approval shall not be
unreasonably withheld. Purchaser shall pay for, restore or otherwise
appropriately remedy, and shall indemnify, defend and hold Seller harmless from
and against all damages to the Property and any and all claims, losses, liens,
charges, liabilities and expenses arising as a result of any property damage or
injury to individuals caused by the actions of Purchaser or its agents in
connection with any due diligence, inspection or testing performed by them.
Purchaser's due diligence shall include, without limitation, a detailed
inspection and evaluation of (a) the physical condition of the Property
(including, without limitation, HVAC, plumbing, electrical and similar systems),
(b) all other matters concerning the Property (including, without limitation,
zoning, building permits, certificates of occupancy, business licenses and all
other notices, licenses, permits, certificates and governmental approvals),
(c) the books and records of the Property (including, without limitation,
financial operating data) and (d) the environmental condition of the Property.
In the event Purchaser, after conducting in good faith such inspections,
investigations, and tests, determines in its sole discretion that the Property
or any part thereof is not suitable for its purposes, then, at any time on or
prior to expiration of the Review Period, Purchaser may terminate this Agreement
upon written notice to Seller. If Purchaser has not made an affirmative written
election prior to the expiration of the Review Period to terminate this
Agreement, Purchaser shall be deemed to have elected as of the last day of the
Review Period to waive any right to object to matters disclosed by Purchaser's
due diligence review and to terminate this Agreement due to Purchaser's
disapproval thereof. The provisions of this Section 5.2 shall survive the
Closing or a termination of this Agreement for any reason, for a period of one
(1) year.
5.3 Deliveries. On or prior to the date that is five (5) days after the date
hereof, Seller shall provide to Purchaser or its agents, to the extent that such
items are in the possession of, or are reasonably available to, Seller or its
agents, true, complete and correct copies of the following documents with
respect to the Property: (i) all as-built plans and specifications; (ii)
current rent rolls setting forth at least the following information:
(A) tenant's name; (B) space occupied (square feet); (C) commencement date of
Lease; (D) expiration date of Lease; (E) options, if any; (F) actual collections
and scheduled rent; (G) rental concessions (existing or future); (H) security
deposits; and (I) historical percentage rents; (iii) copies of all certificates
of occupancy and all other Licenses and Entitlements; (iv) a list of personnel
working at the Property, their positions and salaries; (v) a list of all capital
improvements completed at the Property over the past 24 months; (vi) copies of
all monthly operating statements for the Property for 1994, 1995 and 1996,
certified as accurate by the managing general partner of Seller, setting forth
all income and expenses; (vii) copies of all utility bills for the past 12
months and the most current tax bill; (viii) a copy of the standard lease
agreement used by all tenants; (ix) copies of all Contracts; (x) copies of all
environmental studies and work product, marketing studies, engineering studies,
appraisals and other studies with respect to the Property; and (xi) all
insurance policies maintained with respect to the Property for the last three
years.
SECTION 6
Covenants of Seller and Purchaser
(A) From and after the date of this Agreement, until the earlier of the
termination of this Agreement or the Closing (provided that nothing in this
sentence shall diminish the survivability of the covenants set forth in this
Section 6), Seller agrees with Purchaser as follows:
6.1 Covenants. Seller shall conduct the business of the Property in the
ordinary course, consistent with past practice, shall make all repairs,
replacements and improvements in the ordinary course and shall not without
Purchaser's prior written consent, which consent shall not be unreasonably
withheld, delayed or conditioned, and except in the ordinary course of business,
amend, modify or terminate any material agreements or other material instruments
relating to the Property which agreements or instruments will remain an
obligation with respect to the Property on or after Closing.
6.2 Consents. Seller shall use its best efforts to obtain any approvals,
waivers or other consents of third parties which are to be obtained by Seller
and are required to consummate the transactions contemplated by this Agreement,
and shall cooperate with Purchaser in obtaining any approvals, waivers or other
consents of third parties required to consummate the transactions contemplated
by this Agreement.
6.3 Liens. Seller shall keep the Land and the Improvements free and clear of
all liens, claims or demands, including, but not limited to, mechanics' liens,
in connection with work performed and materials provided before the Closing, and
if any such lien is filed or levied, Seller secure its release on or prior to
Closing. Seller shall not cause or to allow any encumbrance, lien, deed of
trust or similar financial lien to be placed against the Property, whether or
not recorded, without the prior written consent of Purchaser.
6.4 Leases. Without Purchaser's prior written consent, Seller shall not enter
into any Lease with respect to the Property or modify, terminate or extend any
existing Lease with respect to the Property.
6.5 Insurance. Seller shall maintain all insurance with respect to the Property
in effect on the date hereof.
6.6 New Contracts. Without Purchaser's prior written consent, which consent
shall not be unreasonably withheld, delayed or conditioned, Seller shall not
become a party to any new Contracts that will remain an obligation with respect
to the Property on or after the Closing unless such Contracts are entered into
in the ordinary course of business consistent with Seller's past practice, are
with unaffiliated third parties and are terminable on not more than thirty (30)
days notice without the payment of any termination fee, premium or penalty.
6.7 Cooperation. Sellers shall cooperate fully with Purchaser's inspections and
investigations of the Property, which cooperation shall include making available
at all reasonable times to authorized representatives of Purchaser for
inspection and copying (at Purchaser's expense) any and all files, documents,
correspondence, books, records and other written materials in any way relating
to the Property. Seller shall respond promptly to any inquiry which Purchaser
may make from time to time with respect to the information contained in such
materials, and shall instruct its agents, employees and representatives to give
specific answers to Purchaser's inquiries from time to time relating to the
condition and operation of the Property. Seller shall continue to cooperate
with Purchaser following the Closing with respect to any inquiries made by
Purchaser regarding the Property or Seller including, without limitation,
assisting with the completion of the Audit (as defined in Section 7.8 below).
(B) Survival. The foregoing covenants set forth in this Section 6 shall
survive the Closing for one (1) year, unless prior to such date Purchaser has
given notice to Seller of a breach of any covenant of Seller together with a
reasonably detailed explanation of the alleged breach, in which case the
covenant so identified shall survive without limitation.
SECTION 7
Conditions to Purchaser's Obligation to Close
The obligation of Purchaser to close hereunder shall be subject to the timely
satisfaction of the following conditions unless waived by Purchaser in its sole
and absolute discretion:
7.1 Representations and Warranties True at Closing. The representations and
warranties made by Seller in this Agreement shall be true in all material
respects as of the Closing with the same effect as though such representations
and warranties had been made or given at the Closing.
7.2 Compliance with Agreement. Seller shall have performed and complied in all
respects with its obligations under this Agreement which are to be performed or
complied with by them prior to or at the Closing.
7.3 Title Policy. Purchaser shall have received from the Title Company an
unconditional commitment to issue to Purchaser, an owner's title policy on
standard ALTA Form B (1970) (or equivalent), in form and substance acceptable to
Purchaser with respect to the Property, subject only to the Permitted Exceptions
("Title Policy"). The Title Policy shall include extended coverage and such
endorsements, in form and substance satisfactory to Purchaser, as Purchaser
shall reasonably require. Seller shall deliver to the Title Company such
documents as are reasonable and customary in similar transactions in the
vicinity of the Property, and shall perform such other acts, as the Title
Company shall reasonably require in order to issue the Title Policy.
7.4 Approval of Board of Directors. Purchaser shall have obtained the approval
of the terms of this Agreement by the Board of Directors ("Board") of Purchaser.
Notwithstanding anything in this Agreement to the contrary, should Purchaser
fail to notify Seller of final Board approval on or prior to the expiration of
the Review Period, this Agreement shall terminate and neither Purchaser nor
Seller shall have any further obligation to each other and the Deposits and all
accrued interest thereon shall be returned to Purchaser.
7.5 No Condemnation. Subject to Section 13.1, there shall be no pending or
threatened condemnation or taking of any part of the Real Property or any means
of ingress or egress thereto (other than a minor street widening, or other
immaterial taking, which, in Purchaser's reasonable judgment, does not
materially adversely affect the Real Property) or any parking therefor.
7.6 Consents Received. Purchaser shall have received all required material
third party consents and approvals, including all lender consents and all
required Governmental Approvals, including the approval of any state authorities
in respect of any sale of securities of Purchaser.
7.7 No Change in Law. No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that (i) prohibits the
consummation of the transactions contemplated hereby or (ii) has a material
adverse impact on the Property or the income therefrom, including without
limitation the level of occupancy of the Property, and no litigation or
governmental proceeding seeking such an order shall be pending or threatened.
7.8 Financial Audit. During the period commencing with the execution and
delivery of this Agreement and extending through the Closing Date, Purchaser
may, in its sole and absolute discretion, cause its independent accounting firm
or another accounting firm selected by Purchaser ("Auditor") to perform an audit
of the revenue and operating expenses of the Property for the year ending
December 31, 1996, and the period from January 1, 1997 through the Closing Date
(the "Audit") at Purchaser's sole cost and expense. In connection with the
Audit, Seller shall sign a management representation agreement in customary form
which shall be acceptable in substance to Auditor. Notwithstanding anything
herein to the contrary, Purchaser's acceptance of the results of the Audit shall
not be a condition to Closing after the conclusion of the Review Period, but
Seller's continued cooperation with the completion of the Audit shall be a
condition to Closing through the Closing Date.
7.9 Bankruptcy and Related Matters. At no time on or before the Closing Date
shall any of the following have been done by, against or with respect to Seller
or any general partner therein: (i) the commencement of a case under Title 11 of
the U.S. Bankruptcy Code, as now constituted or hereafter amended, or under any
applicable Federal or state bankruptcy law or similar law; (ii) the appointment
of a trustee or receiver of any property interest; (iii) an assignment for the
benefit of creditors; (iv) an attachment, execution or other judicial seizure of
a substantial property interest; (v) the taking of, failure to take, or
submission to any action indicating an inability to meet its financial
obligations as they accrue; or (vi) a dissolution or liquidation.
7.10 No Prior Termination. This Agreement shall not have previously been
terminated by Seller or Purchaser pursuant to Section 5 hereof or Section 13
hereof.
7.11 Condition of the Property. The physical condition of the Property shall be
in the same condition as on the date of expiration of the Review Period,
ordinary wear and tear excepted. There shall not have occurred between the date
hereof and the Closing Date any material adverse change in the Property
including, without limitation, the level of occupancy of the Property or any
material adverse change in the condition of any tenant under any lease of the
Property. All building permits, certificates of occupancy, business licenses
and all other licenses, permits, certificates and authority required as of the
Closing Date in connection with the construction, use or occupancy of the
Property shall be in full force and effect and in good standing.
7.12 Estoppels. Purchaser shall have received written estoppel statements, in
the form attached hereto as Exhibit G and otherwise in form and substance
acceptable to Purchaser from each tenant or subtenant under a Lease of the
Property demising 7,500 rentable square feet or more of the Property. In
addition, Purchaser shall have received written estoppel statements, in the form
attached hereto as Exhibit G and otherwise in form and substance acceptable to
Purchaser, from 85% of the tenants or subtenants under Leases of the Property
demising less than 7,500 rentable square feet of the Property, or from Seller.
7.13 Existing Loan. Purchaser shall have received and approved the Existing
Loan Documents, the Existing Loan Estoppel and the Assumption Agreement.
7.14 Further Assurances. Seller, at the request of Purchaser, shall have
furnished, executed, and delivered such documents, instruments, certificates,
notices, or other further assurances as Purchaser shall reasonably request as
necessary to effect complete consummation of this Agreement and the transactions
contemplated by this Agreement.
SECTION 8
Conditions to Seller's Obligation to Close
The obligation of Seller to close hereunder shall be subject to satisfaction of
the following conditions in favor of Seller unless waived by Seller:
8.1 Representations and Warranties True at Closing. The representations and
warranties made by Purchaser in this Agreement shall be true in all material
respects as of the Closing with the same effect as though such representations
and warranties had been made or given at the Closing.
8.2 Compliance with Agreement. Purchaser shall have erformed and complied in
all respects with all of its obligations under this Agreement which are to be
performed or complied with prior to or at the Closing.
8.3 No Change in Law. No order, statute, rule, regulation, executive order,
injunction, stay, decree or restraining order shall have been enacted, entered,
promulgated or enforced by any Governmental Authority that prohibits the
consummation of the transactions contemplated hereby (or results in any material
change in the treatment of such transactions for Federal tax purposes), and no
litigation or governmental proceeding seeking such an order shall be pending or
threatened.
8.4 Bankruptcy and Related Matters. At no time on or before the Closing Date
shall any of the following have been done by, against or with respect to
Purchaser: (i) the commencement of a case under Title 11 of the U.S. Bankruptcy
Code, as now constituted or hereafter amended, or under any applicable Federal
or state bankruptcy law or similar law; (ii) the appointment of a trustee or
receiver of any property interest; (iii) an assignment for the benefit of
creditors; (iv) an attachment, execution or other judicial seizure of a
substantial property interest; (v) the taking of, failure to take, or submission
to any action indicating an inability to meet its financial obligations as they
accrue; or (vi) a dissolution or liquidation.
8.5 No Prior Termination. This Agreement shall not have previously been
terminated by Purchaser pursuant to Section 5 hereof or Section 13 hereof.
8.6 Existing Loan. The Existing Lender shall have consented to the transfer of
the Property to, and the assumption of the Existing Loan by, Purchaser, as
contemplated by this Agreement.
8.7 Partner Consent. Seller shall have received the approval of the sale of the
Property in accordance with the terms of this Agreement by its partners as
required by and pursuant to the terms of the agreement of limited partnership of
Seller.
8.8 Further Assurances. Purchaser, at the request of Seller, shall have
furnished, executed, and delivered such documents, instruments, certificates,
notices, or other further assurances as Seller shall reasonably request as
necessary to effect complete consummation of this Agreement and the transactions
contemplated by this Agreement.
SECTION 9
Closing
9.1 Time and Place. The Closing shall take place at the offices of Escrow
Company on the date which is thirty (30) days following after the conclusion of
the Review Period or on such earlier date as may be specified by Purchaser upon
at least five (5) business days, prior written notice to Seller, but in no event
later than the Outside Closing Date.
9.2 Earnest Money Deposits.
9.2.1 Within five (5) days after the execution and delivery of this
Agreement, Purchaser shall deposit in the Title Escrow an earnest money deposit
in the amount of $100,000 (the "Earnest Money Deposit"). Such deposit shall be
deposited in a bank or a money market fund approved by Purchaser in writing and
shall only be forfeitable, non-refundable and released to Seller in the event
Seller performs its obligations under this Agreement and Purchaser fails to do
so. Until such time as the Earnest Money Deposit is returned to Purchaser or
paid to Seller, any interest earned thereon will be for the benefit of
Purchaser.
9.2.2 At the conclusion of the Review Period, provided this Agreement has
not been terminated pursuant to the terms hereof, Purchaser shall deposit in the
Title Escrow a second earnest money deposit of $100,000 (the "Additional Earnest
Money Deposit"). Such deposit shall be deposited in a bank or a money market
fund approved by Purchaser in writing and shall only be forfeitable, non-
refundable and released to Seller in the event Seller performs its obligations
under this Agreement and Purchaser fails to do so. Until such time as the
Additional Earnest Money Deposit is returned to Purchaser or paid to Seller, any
interest thereon will be for the benefit of Purchaser.
9.3 Deposits in Escrow Prior to Closing. Within three (3) business days before
the Closing: (i) Seller shall deposit in the Title Escrow all documents or
instruments to be delivered by or on behalf of Seller at Closing pursuant to
Section 9.4 hereof, together with mutually agreeable, executed irrevocable
escrow instructions (not inconsistent with the terms of this Agreement) as may
be necessary or appropriate to consummate the transactions contemplated by this
Agreement (the "Irrevocable Instructions"); and (ii) Purchaser shall deposit in
the Title Escrow the instruments and documents required by Section 9.6 hereof
(other than the Purchase Price), together with the Irrevocable Instructions
executed by Purchaser.
9.4 Seller's Deliveries to the Title Escrow. Pursuant to the terms hereof,
Seller shall deposit or shall cause to be deposited in the Title Escrow the
following deeds, instruments and documents, in the form attached hereto (or if
no such form is attached hereto, in form and substance reasonably acceptable to
Purchaser):
9.4.1 The Deed, duly executed by Seller in recordable form.
9.4.2 The Assignment of Contracts, duly executed by Seller.
9.4.3 The Assignment of Leases, duly executed by Seller in recordable form.
9.4.4 The Bill of Sale, duly executed by Seller.
9.4.5 Such sums, if any, as may be required, to pay Seller's share of costs
adjustments as described in Section 10.
9.4.6 The written representations and warranties required by Section 6.2
hereof.
9.4.7 The FIRPTA Affidavit.
9.4.8 The Assumption Agreement, duly executed in recordable form by Seller
and Existing Lender.
9.4.9 The Existing Loan Estoppel, duly executed by Existing Lender.
9.4.10 An amount equal to the Security Deposits.
Escrow Company hereby is authorized to use the foregoing documents,
instruments and funds to close the Title Escrow only in compliance with the
Irrevocable Instructions and otherwise only if and when Escrow Company holds for
the account of all Seller the Purchase Price for Seller and all documents to be
delivered by Purchaser through the Title Escrow pursuant to Section 9.6 hereof
and Escrow Company has not received any notice delivered pursuant to Section 9.7
hereof.
9.5 Seller's Deliveries Outside the Title Escrow. At the Closing, Seller shall
deliver or shall cause to be delivered the following, to the extent within the
Seller's or its manager's possession or control, to Purchaser or its designee
outside of the Title Escrow:
9.5.1 Complete originals of the Leases with respect to the Property.
9.5.2 The originals, or if such originals are not in the possession of
Seller, true complete and correct legible copies, of all Contracts and all
Licenses and Entitlements with respect to the Property.
9.5.3 The originals of all records, books of account, ledgers, banking
records, statements and other business records relating to the ownership and
operation of the Property, in whatever mode maintained, including information
contained on computer disks.
9.5.4 A complete set of keys to the Property, appropriately tagged for
identification.
9.5.5 Any other documents, instruments or agreements and items which
Purchaser may reasonably request to carry out the intent of this Agreement.
9.6 Purchaser's Deliveries to the Title Escrow. Pursuant to the terms hereof,
Purchaser shall deposit, one (1) business day prior to Closing, in the Title
Escrow (i) the Purchase Price, (ii) the Assignment of Contracts, duly executed
by Purchaser, (iii) the Assignment of Leases, duly executed by Purchaser in
recordable form, and (iv) the Assumption Agreement, duly executed by Purchaser
in recordable form. Not later than one (1) business day prior to the Closing,
Purchaser shall deliver to the Title Escrow such sums, if any, as may be
necessary to pay Purchaser's share of any of the closing adjustments described
in Section 10. Escrow Company hereby is authorized to use said funds,
instruments and documents to close the Title Escrow only if and when:
(i) Escrow Company holds for Purchaser the items required by Section 9.4 hereof
from Seller, (ii) Title Company has made an unconditional commitment to issue
the Title Policy and (iii) Escrow Company has not received any notice delivered
pursuant to Section 9.7 hereof.
9.7 Close of Escrow. Provided that Escrow Company shall have notified Purchaser
and Seller of its intention to proceed with the Closing and thereafter the
Escrow Company shall have received no written notice from Purchaser or Seller
prior to the Closing of the failure of any condition to the Closing running in
favor of Purchaser or Seller, as the case may be, or of the termination of the
Title Escrow, the Escrow Company shall proceed with the Closing if and when
Purchaser and Seller have deposited into the Title Escrow the items required by
this Agreement and Title Company has made an unconditional commitment to issue
the Title Policy and Escrow Company can and will comply with the Irrevocable
Instructions. Upon the Closing, Escrow Company shall date, as of the Closing,
all undated documents deposited in the Title Escrow and shall:
(a) On behalf of Seller, deliver to Purchaser: (i) the Deed, the
Assignment of Leases and the Assumption Agreement by causing the Deed, the
Assignment of Leases and the Assumption Agreement to be recorded in the Official
Records (and Escrow Company shall cause such Deed, Assignment of Leases and the
Assumption Agreement to be mailed to Purchaser after it has been recorded, and
immediately upon recording, deliver to Purchaser a conformed copy thereof), and
(ii) a fully executed original of each of the items set forth in Section 9.4
hereof (other than the Deed, the Assignment of Leases and the Assumption
Agreement).
(b) On behalf of Purchaser, deliver to Seller the Purchase Price and a
fully executed copy of the Assignment of Leases, the Assumption Agreement and
the Assignment of Contracts.
9.8 Post-Closing Covenants.
(a) After the Closing, each party, at the request of the other party, shall
furnish, execute, and deliver such documents, instruments, certificates,
notices, or other further assurances as such requesting party shall reasonably
request as necessary to effect complete consummation of this Agreement.
(b) Purchaser and Seller shall promptly pay to the party entitled thereto
any sums due as a result of any adjustments to prorations as set forth in
Section 10.2 and Section 10.3 hereof.
SECTION 10
Closing Adjustments and Related Items
10.1 Closing Costs. Unless otherwise specifically provided in this Agreement,
all costs and expenses of the parties in connection with the transactions
contemplated hereby, including, without limitation, all reasonable fees and
expenses of the respective counsel to the parties, shall be borne by the parties
incurring such expenses.
10.2 Prorations. At Closing, the parties shall prorate (with Purchaser being
deemed to be the owner of the Property for the date of the Closing) as of the
date on which the Closing occurs, on the basis of a thirty (30) day month, the
following with respect to the Property:
(a) Rents. All rents and other receipts collected by Seller for the
month in which the Closing occurs shall be prorated as of the Closing. If
any tenant under a Lease is delinquent in such month, such delinquent
rentals shall be pro-rated between Purchaser and Seller at the time they
are actually collected. Purchaser shall use reasonable efforts after the
Closing to collect delinquent rents for the period up to the Closing;
provided, however, that all collections shall be applied first to periods
commencing after the Closing, and then to periods prior to the Closing.
Percentage Rents (if any) shall be prorated by Purchaser reasonably
promptly after receipt thereof by Purchaser, based on twelve thirty (30)
day months.
(b) Common Area Maintenance Charges. All reimbursable expenses shall be
reconciled at Closing, such that if Seller has collected sums in excess of its
reimbursable expenses under the Leases, Seller shall pay such excess to
Purchaser. In the event that such reconciliation shows that Seller has
collected less than its incurred reimbursable expenses under the Leases,
Purchaser shall remit the excess (to the extent, and only to the extent, that
such excess is actually collected by Purchaser, with all payments on arrearages
to be applied first to the period after the Closing Date) to Seller not later
than the expiration of three months after the conclusion of the twelve-month
period then in progress with respect to the budgeting of such expenses under
the Leases.
(c) Taxes. Regardless of whether such items are subject to proration
under subparagraph (b) above, real estate taxes, recurring assessments, and
personal property taxes, if any, on all or any portion of the Property,
based on the regular and supplemental tax bills for the calendar year in
which the Closing occurs (or, if such tax bill has not been issued as of
the date of Closing the regular and supplemental tax bill for the calendar
year preceding that in which the Closing occurs, with such increase thereto
as Purchaser reasonably estimates will occur) shall be prorated as of the
Closing. If any supplemental real estate taxes are levied for any period
preceding the Closing, the parties will, immediately after the Closing or
the issuance of the supplemental real estate tax bill (whichever last
occurs), prorate between themselves, in cash, without interest and to the
date of the Closing Date, the supplemental real estate taxes shown by such
bill. Conveyance taxes due and payable to the State of Connecticut and the
towns of Farmington and New Britain with respect to the transfer of the
Property, in any, in an aggregate amount not to exceed 1.11% of the
aggregate Purchase Price shall be paid by Purchaser; and any conveyance
taxes in excess of such amount shall be paid one-half by Purchaser and one-
half by Seller.
(d) Utilities. Regardless of whether such items are subject to
proration under subparagraph (b) above, all utilities, including gas,
water, sewer, electricity, telephone and other utilities supplied to the
Property shall be read as of the Closing Date. Seller shall pay, prior to
the Closing Date, all such amounts for which a bill has been received or
for which payment is otherwise due prior to the Closing Date, and Purchaser
shall be credited, and Seller shall be debited, with an amount equal to all
utility charges for the period from the date such bills were issued or such
payments were due until the Closing Date. Seller shall be credited for the
amount of any deposits made by Seller for utility services which have not
been refunded to Seller and which are assigned to Purchaser on or prior to
the Closing Date.
(e) Service Contracts. Amounts payable under contracts being assigned
shall be prorated on an accrual basis. Seller shall pay, prior to the
Closing Date, all such amounts for which a bill has been received or for
which payment is otherwise due prior to the Closing Date, and Purchaser
shall be credited, and Seller shall be debited, with an amount equal to all
amounts accrued under such contracts from the date such bills were issued
or such payments were due until the Closing Date. Seller shall deliver to
Escrow Company, for the benefit of Purchaser, evidence of the cancellation
or termination of all contracts other than approved contracts, and Seller
shall be responsible for all such cancellation costs.
(f) Improvement Lien Assessments. All improvement lien assessments
shall be paid in full by Seller at Closing.
(g) Existing Loan. Accrued and unpaid interest under the Existing
Loan shall be prorated as of the Closing Date and Purchaser shall be
credited, and Seller shall be debited, with an amount equal to interest
accrued and unpaid as of the Closing Date. Any and all amounts deposited
or to be deposited into any escrow accounts maintained by the Existing
Lender or otherwise in connection with the Existing Loan shall be prorated
as of the Closing Date. Seller shall pay, prior to the Closing Date, all
amounts due and payable as of the Closing Date with respect to any such
escrows. All amounts deposited in any such escrow as of the Closing shall
be credited to Seller, unless such escrows are terminated in connection
with Purchaser's assumption of the Existing Leases and any such amounts
deposited therein are refunded to Seller by the Existing Lender.
(h) Other Items. All other proratable items, including without
limitation licenses and permits and other income from, and expenses
associated with, the Property shall be prorated between Purchaser and
Seller as of the Closing.
10.3 Title and Escrow Costs. Seller shall pay the title insurance costs of
issuing to Purchaser a standard form owner's policy of title insurance in the
amount of the Purchase Price. Purchaser shall pay the title insurance costs of
an extended coverage policy and any endorsements requested by Purchaser. Seller
shall pay any documentary transfer tax due as a result of the recordation of the
Deed. Escrow fees and costs and recording fees shall be divided equally between
Seller and Purchaser. Seller shall pay the cost of the updated Survey, which is
estimated to be $3,600.00; provided, however, if the purchase and sale
transaction contemplated by this Agreement does not close other than as a result
of a breach of this Agreement by Seller, Purchaser shall pay the cost of the
Survey, and if the purchase and sale transaction does not close as a result of a
breach of this Agreement by Seller, the cost of the Survey shall be paid Seller.
Any apportionments and prorations which are not expressly provided for in this
Section 10 shall be prorated in accordance with the customary practice in the
jurisdiction in which the Land is located.
10.4 Assumption Fee. Seller shall pay any assumption fees or costs of the
Existing Lender incurred in connection with the Assumption Agreement or
otherwise as a result of Purchaser's assumption of the Existing Loan as
contemplated by this Agreement.
10.5 Calculations for Closing. Seller and Purchaser shall provide Title Company
with a preliminary calculation for prorations no later than five (5) business
days prior to Closing with a final calculation no later than one (1) business
day prior to Closing. The final calculation shall be executed by each party and
may be relied upon by Title Company in completing the closing adjustments and
prorations. In the event incomplete information is available, or estimates have
been utilized to calculate prorations as of the date of Closing, any prorations
relating thereto shall be further adjusted and completed outside of Escrow
within ninety (90) days after the Closing Date or as and when complete
information becomes available to Purchaser and Seller. Any adjustments to
initial estimated prorations which are required upon review of such complete
information shall be made by Purchaser and Seller, with due diligence and
cooperation, by prompt cash payment to the party entitled to a credit as a
result of such adjustments. The foregoing obligations of Seller and Purchaser
shall survive the Closing without limitation.
SECTION 11
Failure Of Seller To Perform; Termination; No Waiver
11.1 Purchaser's Remedies. If Seller shall default in the performance of its
obligations under this Agreement to Purchaser, then Purchaser shall have the
right to institute an action for specific performance to enforce Seller's
obligations under this Agreement to convey title to the Property to Purchaser
and for incidental damages; provided that if, but only if, specific performance
is not an available remedy, Purchaser shall have the right to institute an
action against Seller for all damages actually suffered by Purchaser, including
without limitation, the loss of its bargain.
11.2 Seller's Remedies. In the event the Closing does not occur by the Outside
Closing Date for any reason due to Purchaser's or Purchaser's breach under this
Agreement, Seller's sole remedy shall be to (i) terminate this Agreement and
(ii) retain the Deposits as liquidated damages, and not as a penalty.
PURCHASER AND SELLER AGREE THAT IN THE EVENT OF A DEFAULT BY PURCHASER HEREUNDER
OR A CLAIM AGAINST PURCHASER WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED
HEREBY, SELLER'S DAMAGES WOULD BE DIFFICULT OR IMPOSSIBLE TO ASCERTAIN.
THEREFORE, SELLER AND PURCHASER AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL
NET DETRIMENT THAT SELLER WOULD SUFFER IF PURCHASER DEFAULTS HEREUNDER, OR A
CLAIM IS ASSERTED AGAINST PURCHASER WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY, IS AND SHALL BE THE DEPOSITS, AND SELLER SHALL RETAIN THE
DEPOSITS AS ITS SOLE AND EXCLUSIVE REMEDY (WHETHER AT LAW OR IN EQUITY) AND SUCH
AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS
AGREEMENT BY PURCHASER AND FOR ANY CLAIM ARISING OUT OF OR RELATING TO THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING WITHOUT LIMITATION ANY
TORT ARISING OUT OF PURCHASER'S FAILURE TO CLOSE). ALL OTHER CLAIMS TO DAMAGES
OR OTHER REMEDIES RELATING TO A BREACH HEREOF OR OTHERWISE RELATING TO OR
ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY ARE EXPRESSLY WAIVED BY
SELLER.
LC, MS JK
________________ ---------------
(Seller's initials) (Purchaser's initials)
11.3 Termination. If the Closing has not occurred on or prior to the Outside
Closing Date, any party not in default with respect to its obligations hereunder
may terminate this Agreement as it affects such party, and such terminating
party shall no longer have any obligation to any other party to this Agreement,
under this Agreement or any document or instrument executed or delivered in
connection herewith.
SECTION 12
Brokers
Seller represents and warrants to Purchaser that no broker has acted for it
in connection with this Agreement or the transactions contemplated by this
Agreement except Colonial Properties, Incorporated ("Colonial") and Harbour
Realty Advisors, Inc. ("Harbour"). The commission payable to Harbour by Seller
shall be the sole responsibility of Seller and shall be paid pursuant to a
separate agreement between Seller and Harbour. The commission payable to
Colonial by Seller shall be the sole responsibility of Seller and shall be paid
pursuant to a separate agreement between Seller and Colonial. Seller will
indemnify, defend, protect and hold Purchaser harmless from any claim by any
broker, agent or finder purporting to have acted on behalf of Seller. Purchaser
represents and warrants to Seller that no broker has acted for it in connection
with this Agreement or the transactions contemplated by this Agreement except
Colonial, pursuant to a separate agreement between Colonial and Purchaser. The
commission payable to Colonial by Purchaser shall be the sole responsibility of
Purchaser and shall be paid pursuant to such separate agreement. Purchaser will
indemnify, defend, protect and hold Seller harmless from any claim by any
broker, agent or finder purporting to have acted on behalf of Purchaser. The
foregoing indemnifications shall survive the termination of this Agreement for
any reason, including a breach hereof.
SECTION 13
Risk of Loss
13.1 Definition of Material Damage. For the purposes of this Section 13.1,
damage to the Property is material if (i) the actual cost of repairing or
replacing the damaged portions of the Improvements on the Property exceeds
$250,000.00, or (ii) if it would take longer than ninety (90) days to perform
such repair or replacement using reasonably diligent efforts, or (iii) if any
lessee has the right to abate any rent under its Lease as a result of such
damage and there is not full rental interruption coverage with respect thereto
available to Purchaser through and after the Closing Date until the date that is
ninety (90) days beyond the estimated date of reconstruction, or (iv) if any
lessee has a right to terminate its lease as a result of such damage.
13.2 Effect of Non-Material Damage to Improvements. If prior to the Closing the
Improvements on the Property are damaged by casualty and such damage is not
material, (i) this Agreement may not be terminated by reason of such casualty
(provided that this does not waive Purchaser's other termination rights under
this Agreement) and (ii) Seller will, at Purchaser's option, either (a) cause
the damaged portion of the Improvements to be repaired at Seller's sole cost and
expense within ninety (90) days after the date of such damage or (b) reduce the
Consideration by an amount equal to the actual, reasonable and necessary cost of
repairing or replacing the damaged portions of the Improvements in which event
Seller shall retain all insurance proceeds with respect to such damage. Seller
will notify Purchaser within five (5) days (but in any event prior to the
Closing Date) of Seller's receipt of knowledge of any casualty which occurs
after the date of this Agreement and on or prior to the Closing Date.
13.3 Effect of Material Damage to Improvements. If prior to the Closing the
Improvements are damaged by casualty and such damage is material, Seller shall
notify Purchaser in writing of such casualty as soon as practicable. Within ten
(10) days after the occurrence of such casualty, Seller will, as soon as is
practicable, commence restoration of the damaged Improvements, and shall
complete such restoration in compliance with all laws and the representations
and warranties set forth herein and shall restore such Improvements their
condition prior to the occurrence of the casualty promptly (but in no event more
than ninety (90) days thereafter), and the Outside Closing Date shall be
extended (but in no event by more than ninety (90) days) until the restoration
of such damaged Improvements is complete. If Seller does not commence or
complete such restoration within such time period, then Purchaser may elect
pursuant to a writing delivered to Seller and Escrow Holder to (i) continue this
Agreement, provided, however, that Seller shall assign to Purchaser at the
Closing any insurance proceeds to which Seller is entitled with respect to such
damage (in which event the Consideration shall be reduced by the amount of any
deductible with respect thereto); (ii) continue this Agreement, provided,
however, that Seller shall reduce the Consideration by an amount equal to the
reasonable cost of repairing or replacing the damaged portion(s) of the
Improvements reasonably estimated by Purchaser (in which event Seller shall be
entitled to retain any insurance proceeds with respect to such damage), or
(iii) terminate this Agreement, in which case neither party shall have any
further rights and obligations to the other party under this Agreement (but
Purchaser shall retain its rights and remedies against Seller) and Escrow Holder
shall immediately return the Deposits (with interest thereon) to Purchaser.
Purchaser's failure to have elected any of these options within the time
allotted therefor shall be deemed to be an election of option (iii).
13.4 Definition of Material Taking. For the purposes of this Section 13, a
taking or threatened taking by eminent domain or similar proceedings shall be
deemed material if (i) the value of that portion of the Property to be so taken
exceeds $100,000.00, (ii) the portion of the Property taken includes any access
to the Property or any portion of the parking area; (iii) Purchaser determines
that the Property so affected is materially and adversely affected by such
taking or threatened taking, (iv) any lessee has the right to abate any rent
under its Lease as a result of such taking or threatened taking, or (v) any
lessee has the right to terminate its Lease as a result of such taking or
threatened taking.
13.5 Effect of Non-Material Taking. If prior to the Closing there is a taking
or threatened taking of a portion of the Property which is not material,
(i) this Agreement may not be terminated and (ii) Seller will assign to
Purchaser at the Closing all of Seller's rights in and to any condemnation award
with respect to such non-material taking, and there will be no reduction in the
Consideration. Seller will deliver written notice to Escrow Holder and
Purchaser within one (1) day after Seller receives notice of or otherwise
becomes aware of any taking or threatened taking affecting the Property.
13.6 Effect of Material Taking. If prior to the Closing there is a taking or
threatened taking of a material portion of the Property or all of it, Seller
shall notify Purchaser in writing of such taking or threatened taking, and
within ten (10) days after Purchaser's receipt of such notice, Seller and
Purchaser shall endeavor to agree upon whether the Property shall be purchased
by Purchaser, and any reduction in the Consideration, and any assignment of any
condemnation award with respect to such taking. If within such ten (10) day
period Purchaser and Seller have not reached a mutually acceptable agreement as
to those matters, Purchaser within ten (10) days thereafter may elect in writing
to (i) continue this Agreement subject to the taking or threatened taking with
an assignment of all of Seller's rights to condemnation awards, severance
damages, payments-in-lieu thereof or the like; or (ii) terminate this Agreement,
in which case Purchaser and Seller shall have no further rights or obligations
to one another under this Agreement, and Escrow Holder shall immediately return
the Deposits (with interest thereon) to Purchaser. Purchaser's failure to have
elected any of these options within the time period allotted therefor shall be
deemed to be an election of option (ii).
13.7 Extension of Outside Closing Date. Upon the occurrence of any damage to
the Property, the Outside Closing Date shall be extended to the date upon which
Seller is required hereunder to have such damage repaired, but in no event shall
any such extension extend the Outside Closing Date to a date which is more than
ninety (90) days after the date of such damage to the Property.
SECTION 14
MISCELLANEOUS
14.1 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
14.2 Governing Law. This Agreement shall be governed by the internal laws of
the State of Connecticut, without regard to the choice of laws provisions
thereof.
14.3 Entire Agreement. This Agreement (including the exhibits) embodies the
entire agreement and understanding of the parties hereto in respect of the
subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants, or undertakings other than those
expressly set forth or referred to herein. This Agreement supersedes any and
all prior agreements and understandings between the parties with respect to such
subject matter.
14.4 Amendment. This Agreement may be amended only in a writing signed by the
parties to be bound by such amendment.
14.5 Waiver. No waiver shall be effective against a party unless it is in a
writing signed by that party.
14.6 Successors and Assigns. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
14.7 Transfer to Qualified Intermediary. The parties agree that all of the
rights and obligations of Seller under this Agreement may be assigned by Seller
prior to the Closing to a "qualified intermediary" for purposes of enabling
Seller to qualify the exchange of the Property for other property as a tax-free
exchange under Section 1031 of the Internal Revenue Code; provided, however,
that such transfer shall not relieve Seller of any obligation of Seller under
this Agreement. Purchaser agrees to cooperate in connection with any proposed
exchange of the Property; provided, however, (i) the acquisition and exchange of
the Property for designated exchange property shall not impose upon Purchaser
any additional financial obligations; (ii) Purchaser shall have no obligation to
cooperate with any such exchange following the Closing Date; (iii) Seller shall
indemnify and hold Purchaser harmless from any and all liabilities, claims,
losses or actions which Purchaser incurs or to which Purchaser may be exposed as
a result of Purchaser's participation in the contemplated exchange;
(iv) Purchaser shall not be required to take title to any property other than
the Property; and (v) such exchange shall not in any way delay the Closing as
contemplated hereby.
14.8 Confidentiality. Purchaser and Seller each acknowledge and agree that this
Agreement and the terms and conditions set forth herein are to be kept
confidential. Accordingly, until the Closing Date (at which time the parties
may issue a joint press release with respect to the Closing), the parties agree
to keep the pendency of this Agreement (as well as its terms and conditions)
confidential and shall discuss the transaction only with officers, directors,
employees, agents and representatives of such party involved in consummating the
transaction. Notwithstanding the foregoing, Seller understands that Purchaser
is a public entity and Purchaser shall be permitted to disclose any matter
relating to the contemplated transaction as Purchaser may determine in
connection with fulfilling its obligations under state and Federal securities
laws. The foregoing covenants shall survive termination of this Agreement.
14.9 Time of the Essence. Time is of the essence with respect to this
Agreement. Notwithstanding the foregoing, however, whenever action must be
taken under this Agreement during a period of time that ends on a Saturday,
Sunday or Federal or state holiday, then such period shall be extended until the
next day which is not a Saturday, Sunday or such holiday.
14.10 Personal Liability. None of the partners, affiliates, officers,
directors, shareholders, employees, agents, representatives or consultants of
any of Purchaser or Seller shall have any personal liability, directly or
indirectly, under this Agreement, and each of the parties hereto hereby waives
all right to proceed directly against such persons or entities under or in
connection with this Agreement; provided, however, notwithstanding the
foregoing, the partners, affiliates, officers, directors, shareholders,
employees, agents, representatives and consultants of Seller shall be and remain
liable for any liability of Seller hereunder to the extent of any distribution
made to such person.
14.11 Attorneys' Fees. In the event of a dispute arising out of the
interpretation or enforcement of this Agreement, or a declaration of rights
hereunder, or enforcement of any judgment of any judicial or non-judicial body
with respect to the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees and expenses.
14.12 Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and mailed postage prepaid by certified or
registered mail, return receipt requested, sent by personal delivery, overnight
courier or by telecopy (provided a copy of such notice also is delivered by any
of the foregoing means) to the appropriate address or telecopy number specified
below, or at such other place or telecopy number as any party may, from time to
time, designate in a written notice given to the others in the manner specified
herein. Notices or other communications shall be effective when actually
received.
Seller: Harbour Realty Advisors, Inc.
1177 Kane Concourse
Bay Harbour, Florida 33154
Attn.: Robert A. Dorfman
Fax No.: (305)866-8014
with a copy to: Leonard W. Cotton
181 West Hills Road
New Canaan, Connecticut 06840
Fax No.: (203)966-9662
and a copy to: Reid and Riege, P.C.
One State Street
Hartford, Connecticut 06103
Attn.: John E. D'Amico, Esq.
Fax No.: (860)240-1002
Purchaser: The Price REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, California 90036
Attn.: Joseph Kornwasser
Fax No.: (213)937-8175
with a copy to: Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Linday, Esq.
Fax No.: (213)229-7520
14.13 Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
14.14 Severability. The invalidity or unenforceability of any provision of this
Agreement shall not impair the validity or enforceability of any other
provision.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"PURCHASER"
THE PRICE REIT, INC.,
a Maryland corporation
By: /JOSEPH KORNWASSER/
------------------------------
Title: Joseph Kornwasser, President/CEO
"SELLER"
WESTFARMS, L.P., a Connecticut
limited partnership
By: HRA Westfarms, Inc., a
Connecticut corporation, its
managing general partner
By: /LEONARD W. COTTON/
---------------------------
Leonard W. Cotton, President
By: SMS&G Yankee Corp., a
Connecticut corporation, its
general partner
By: /MILTON S. SHAPIRO/
---------------------------
Milton S. Shapiro, President
INDEX TO EXHIBITS AND SCHEDULES
-------------------------------
Exhibit A Legal Description
Exhibit B Form of Grant Deed
Exhibit C Form of Assignment of Contracts, Intangible
Property, Warranties and Guarantees
Exhibit D Form of Assignment and Assumption of Leases
and Rents
Exhibit E Form of Bill of Sale
Exhibit F Form of FIRPTA Affidavit
Exhibit G Form of Tenant Estoppel Certificate
Schedule 4.2.2 Schedule of Contracts
Schedule 4.2.3 Rent Roll
EXHIBIT A
To
Agreement of Purchase and Sale
LEGAL DESCRIPTION
EXHIBIT B
To
Agreement of Purchase and Sale
[FORM SUBJECT TO MODIFICATION BY LOCAL COUNSEL]
WARRANTY DEED
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
WARRANTY DEED
TO ALL PEOPLE TO WHOM THESE PRESENTS SHALL COME, GREETING:
KNOW YE, THAT WESTFARMS LIMITED PARTNERSHIP, a Connecticut limited partnership
having an address of 181 West Hills Road, New Canaan, Connecticut 06840 (the
"Grantor") for One Dollar and other good and valuable consideration received to
its full satisfaction of THE PRICE REIT, INC., a Maryland corporation having an
address of 145 South Fairfax Avenue, Fourth Floor, Los Angeles, California 90036
(the "Grantee"), does give, grant, bargain, sell and confirm unto the said
Grantee, its successors and assigns forever, those two certain pieces or parcels
of land, with the improvements thereon and appurtenances thereto, situated in
the Towns of Farmington and New Britain, County of Hartford and State of
Connecticut, more particularly described on Exhibit A attached hereto and made a
part hereof. Said premises are conveyed subject to those encumbrances set forth
on Exhibit B attached hereto and made a part hereof.
TO HAVE AND TO HOLD the above granted and bargained premises, with the
appurtenances thereof, unto the said Grantee, its successors and assigns
forever, to its and their own proper use and behoof. And also, the said Grantor
does for itself and its successors and assigns, covenant with the said Grantee,
its successors and assigns, that at and until the ensealing of these presents,
it is well seized of the premises, as a good indefeasible estate in Fee Simple;
and has good right to bargain and sell the same in manner and form as is above
written and that the same is free from all encumbrances whatsoever, except as
hereinbefore mentioned.
AND FURTHERMORE, the said Grantor does by these presents bind itself and its
successors and assigns forever to warrant and defend the above granted and
bargained premises to the said Grantee, its successors and assigns, against all
claims and demands whatsoever, except as hereinbefore mentioned.
IN WITNESS WHEREOF, the Grantor has hereunto caused its hand and seal to be set
this _____ day___________ of 1997.
Signed and Delivered in
the present of:
WESTFARMS LIMITED PARTNERSHIP
By: HRA Westfarms, Inc. its general
partner
By:
----------------------------
Leonard W. Cotton, its President
By: SMS&G Yankee Corp., its general
partner
By:
----------------------------
Milton S. Shapiro, its President
STATE OF ____________ )
) ss. ________
COUNTY OF __________ )
On this the ___ day of 199_, before me, the undersigned officer, personally
appeared Leonard W. Cotton, who acknowledged himself to be the President of HRA
Westfarms, Inc., a general partner of Westfarms Limited Partnership, a
Connecticut limited partnership, and that he, as such officer of the general
partner, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the limited partnership by
himself as President of the general partner as his free act and deed.
In witness whereof, I hereunto set my hand.
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
STATE OF _____________ )
) ss. ________
COUNTY OF ___________ )
On this the _____ day of 199_, before me, the undersigned officer, personally
appeared __________________, who acknowledged himself to be the ____________ of
SMS&G Yankee Corp., a general partner of Westfarms Limited Partnership, a
Connecticut limited partnership, and that he, as such officer of the general
partner, being authorized so to do, executed the foregoing instrument for the
purposes therein contained, by signing the name of the limited partnership by
himself as ___________ of the general partner as his free act and deed.
In witness whereof, I hereunto set my hand.
Name:
Commissioner of the Superior Court
Notary Public
My Commission Expires:
EXHIBIT C
To
Agreement of Purchase and Sale
ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES
AND GUARANTEES
THIS ASSIGNMENT OF CONTRACTS, INTANGIBLE PROPERTY, WARRANTIES AND GUARANTIES
(this "Assignment") is made as of the ___ day of ____________, 1997, by
WESTFARMS, L.P., a Connecticut limited partnership ("Assignor"), in favor of THE
PRICE REIT, INC., a Maryland corporation ("Assignee").
RECITALS;
Pursuant to that certain Agreement of Purchase and Sale dated as of __________,
1997 by and between Assignor and Assignee (the "Agreement"), Assignee has this
day acquired from Assignor certain interests in land, buildings and improvements
more particularly described on Exhibit A attached hereto and made a part hereof
(the "Property"). Capitalized terms not otherwise defined herein shall have the
meanings given them in the Agreement.
In consideration of the acquisition of the Property by Assignee and other good
and valuable consideration, the mutual receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
Assignor hereby assigns, transfers and delegates to Assignee all of Assignor's
right, title and interest in and to the following (collectively, the "Assigned
Property"): (i) any and all intangible personal property owned by Seller which
is appurtenant to or used by Seller in connection with the Real Property or the
Improvements or Personal Property with respect thereto; (ii) any and all
Contracts with respect to the Real Property; (iii) any and all other property,
rights in or to property, general intangibles and contractual rights which
Seller may have which are necessary in connection with, or otherwise affect or
relate directly to, the acquisition, development, improvement, holding, use,
operation, maintenance, leasing or sale of the Real Property or the Improvements
or Personal Property with respect thereto, including, but not limited to, any
and all plans, specifications, subdivision maps and filings with respect
thereto, applications, entitlements, Licenses and Entitlements, subdivision or
other bonds, engineering or soil reports, surveys, maps, inspection reports,
management reports, marketing reports, marketing displays and brochures, all
contract rights, warranties from contractors, architects, engineers and material
and labor suppliers whether written or implied, all books and records, all
claims, choses in action, judgments, remedies, damages and causes of action, all
leases, easements, licenses and rights of way, occupancy or use agreements and
all other documents affecting or relating to the Real Property or the
Improvements or Personal Property with respect thereto; and (iv) any and all
other general intangibles, warranties, guarantees, permits, maps, surveys,
entitlements and other intangible rights of any type or nature relating to any
or all of the Real Property, or the Improvements or Personal Property with
respect thereto.
If any litigation between Assignor and Assignee arises out of the obligations of
the parties under this Assignment or concerning the meaning or interpretation of
any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys, fees. Any such attorneys' fees and other expenses
incurred by either party in enforcing a judgment in its favor under this
Assignment shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Assignment and to
survive and not be merged into any such judgment.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
effective as of the date set forth below.
Executed as of the date first above written.
ASSIGNOR:
WESTFARMS, L.P., a Connecticut
limited partnership
By: HRA Westfarms, Inc., a
Connecticut corporation, its
managing general partner
By:
----------------------------
Leonard W. Cotton, President
By: SMS&G Yankee Corp., a
Connecticut corporation, its
general partner
By:
----------------------------
Milton S. Shapiro, President
ASSIGNEE:
THE PRICE REIT, INC.,
a Maryland corporation
By:
-----------------------------
Title:
EXHIBIT "A" TO ASSIGNMENT OF CONTRACTS, INTANGIBLE
PROPERTY, WARRANTIES AND GUARANTEES
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT D
To
Agreement of Purchase and Sale
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
[FORM SUBJECT TO MODIFICATION BY LOCAL COUNSEL]
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, California 90071
Attention: William R. Lindsay
ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, WESTFARMS, L.P., a Connecticut limited partnership ("Assignor"),
hereby assigns, sets over, transfers and delegates to THE PRICE REIT, INC., a
Maryland corporation ("Assignee"), all of the landlord's right, title, interest,
claim and estate in and to all leases, occupancy agreements and similar
agreements, together with all modifications, extensions and renewals thereof,
all security therefor, and all guaranties of any of the foregoing (collectively,
the "Leases") which demise all or any part of, or interest in, the real property
more particularly described on Exhibit A attached hereto and incorporated herein
(the "Land"), together with all income, receipts, funds and revenues of any kind
whatsoever payable under the Leases or otherwise with respect to the Land,
whether heretofore accrued or hereafter arising.
Assignee hereby assumes all of Assignor's obligations under or with respect to
the Leases described on Exhibit B attached hereto, which obligations arise out
of and relate to the period commencing on the date hereof. Assignor hereby
agrees to indemnify, defend, protect and hold Assignee harmless from and against
any and all loss, claim, obligation, cost or expense (including without
limitation reasonable attorneys' fees) relating to or in connection with any
obligations of the landlord under the Leases, which obligations arise out of or
relate to the period prior to the date hereof.
If any litigation between Assignor and Assignee arises out of the obligations of
the parties under this Assignment or concerning the meaning or interpretation of
any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys' fees. Any such attorneys' fees and other expenses
incurred by either party in enforcing a judgment in its favor under this
Assignment shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Assignment and to
survive and not be merged into any such judgment.
This Assignment may be executed and delivered in any number of counterparts,
each of which so executed and delivered shall be deemed to be an original and
all of which shall constitute one and the same instrumen
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement effective
as of this ______ day of _______________, 1997.
ASSIGNOR:
WESTFARMS, L.P., a Connecticut
limited partnership
By: HRA Westfarms, Inc., a
Connecticut corporation, its
managing general partner
By:
----------------------------
Leonard W. Cotton, President
By: SMS&G Yankee Corp., a
Connecticut corporation, its
general partner
By:
----------------------------
Milton S. Shapiro, President
ASSIGNEE:
THE PRICE REIT, INC.,
a Maryland corporation
By:
-----------------------------
Its:
EXHIBIT "A" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT "B" TO ASSIGNMENT AND ASSUMPTION OF LEASES AND RENTS
ASSUMED LEASES
EXHIBIT E
To
Agreement of Purchase and Sale
BILL OF SALE
For valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, WESTFARMS, L.P., a Connecticut limited partnership ("Seller"),
hereby transfers, conveys and assigns to THE PRICE REIT, INC., a Maryland
corporation ("Purchaser"), and its successors and assigns forever, any and all
tangible personal property owned by Seller and located on or about and used in
connection with the real property more particularly described on Exhibit A
attached hereto and made a part hereof (the "Property") or any improvements
thereon, including but not limited to fixtures, furnishings, furniture, tools
machinery and/or equipment, operational instructions and/or specifications,
surveys, drawings, business records and the personal property listed on any
schedule attached hereto, but specifically excluding therefrom any such personal
property owned by any tenant of the Property.
If any litigation between Seller and Purchaser arises out of the obligations of
the parties under this Bill of Sale or concerning the meaning or interpretation
of any provision contained herein, the losing party shall pay the prevailing
party's costs and expenses of such litigation including, without limitation,
reasonable attorneys' fees. Any such attorneys' fees and other expenses
incurred by either party in enforcing a judgment in its favor under this Bill of
Sale shall be recoverable separately from and in addition to any other amount
included in such judgment, and such attorneys' fees obligation is intended to be
severable from the other provisions of this Bill of Sale and to survive and not
be merged into any such judgment.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed and
delivered as of this ______ day of __________, 1997.
WESTFARMS, L.P., a Connecticut
limited partnership
By: HRA Westfarms, Inc., a
Connecticut corporation, its
managing general partner
By:
----------------------------
Leonard W. Cotton, President
By: SMS&G Yankee Corp., a
Connecticut corporation, its
general partner
By:
----------------------------
Milton S. Shapiro, President
EXHIBIT "A" TO BILL OF SALE
DESCRIPTION OF PROPERTY
EXHIBIT F
To
Agreement of Purchase and Sale
CERTIFICATION OF NON-FOREIGN STATUS
(Foreign Investment in Real Property Tax Act)
Internal Revenue Code Section 1445 provides that a transferee of a United States
real property interest must withhold tax if the transferor is a foreign person.
To inform THE PRICE REIT, INC. ("Transferee") that withholding of tax is not
required upon the disposition of a United States real property interest by the
undersigned ("Transferor"), Transferor hereby certifies and declares as follows:
1. Transferor's U.S. tax identification/social security number is: 061170577;
2. Transferor's principal office address is 1177 Kane Concourse, Bay Harbor,
Florida 33154; and
3. Transferor is not a foreign person (foreign corporation, foreign partnership,
foreign trust, foreign estate or non-resident alien), as defined in the Internal
Revenue Code and Income Tax Regulations.
Transferor acknowledges that this certification may be disclosed by Transferee
to the Internal Revenue Service and that any false statement contained in this
certification may be punished by fine or imprisonment or both.
Transferor understands that Transferee is relying on this certification to
determine whether withholding is required by Transferee pursuant to Internal
Revenue Code Section 1445.
Under penalties of perjury, the undersigned signatory declares that: I have
examined this certification, to the best of my knowledge and belief it is true
and complete, and I am duly authorized to execute this certification on behalf
of Transferor.
Dated: , 1997
WESTFARMS, L.P., a Connecticut
limited partnership
By: HRA Westfarms, Inc., a
Connecticut corporation, its
managing general partner
By:
----------------------------
Leonard W. Cotton, President
By: SMS&G Yankee Corp., a
Connecticut corporation, its
general partner
By:
----------------------------
Milton S. Shapiro, President
EXHIBIT G
TENANT ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of _____________,
1997, is executed by ________________________ ("Tenant") in favor of THE PRICE
REIT, INC. ("Buyer").
R E C I T A L S
A. Buyer and WESTFARMS, L.P. ("Landlord") have entered into that certain
Agreement of Purchase and Sale, dated as of ___________, 1997 (the "Purchase
Agreement"), whereby Buyer has agreed to purchase, among other things, the
improved real property located in the Towns of Farmington and New Britain, State
of Connecticut, more particularly described on Exhibit A attached to the
Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease Agreement, dated as
of ________________ (together with all amendments, modifications, supplements,
guarantees and restatements thereof, the "Lease"), for a portion of the
Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of Landlord,
Tenant would execute and deliver an estoppel certificate certifying the status
of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested that Tenant
execute this Certificate.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer as follows:
AGREEMENT
Section 1. Lease.
Attached hereto as Exhibit "A" is a true, correct, and complete copy of the
Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements. guarantees and restatements thereof:
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain Premises (the "Leased
Premises") consisting of approximately ______________________ (______________)
rentable square feet within the Property, as more particularly described in the
Lease. In addition, pursuant to the terms of the Lease, Tenant has the
[non-exclusive] right to use [___________ parking spaces/the parking area]
located on the Property during the term of the Lease. [Cross-out the preceding
sentence or portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease is in full force and effect, has not been terminated, and is
enforceable in accordance with its terms.
Section 4. Complete Agreement
The Lease constitutes the complete agreement between Landlord and Tenant for the
Leased Premises and the Property.
Section 5. Acceptance of Leased Premises.
Tenant has accepted and is currently occupying the Leased Premises.
Section 6. Lease Term.
The term of the Lease commenced on _____________________ and ends on
_______________________, subject to the following options to extend:
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or other
right to purchase all or any portion of the Leased Premises or all or any
portion of the Property, except as follows:
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the Leased
Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other than as
Tenant under the Lease.
Section 9. Rent.
(a) The rent under the Lease is current, and Tenant is not in default in the
performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the amount of
________________________ Dollars ($_________) per month. Tenant has not
received and is not, presently, entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent, or
credits, offsets or reductions in rent, except as follows:
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area charges,
insurance, real estate taxes and administrative and over-head expenses is
___________ percent (______%) and is currently being paid at the rate of
____________________________________ Dollars ($__________) per month, payable to
______________________________________________.
(d) There are no existing defenses or offsets against rent due or to become due
under the terms of the Lease, and there presently is no default or other
wrongful act or omission by Landlord under the Lease or otherwise in connection
with Tenant's occupancy of the Leased Premises, except as
follows:______________________________________________________
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the Lease is
_________________________________ Dollars ($_____________).
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is
__________________________________ Dollars ($_____________), covering the period
from ________ to ________.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the Lease is
presently in effect.
Section 13. Pending Actions.
There are no actions, whether voluntary or otherwise, pending against the Tenant
(or any guarantor of the Tenant's obligations under the Lease) pursuant to the
bankruptcy or insolvency laws of the United States or any state thereof.
Section 14. Landlord's Obligations
As of the date of this Certificate, Landlord has performed all obligations
required of Landlord pursuant to the Lease and no offsets. counterclaims, or
defenses of Tenant under the Lease exist against Landlord. As of the date of
this Certificate, no events have occurred that, with the passage of time or the
giving of notice, would constitute a basis for offsets, counterclaims, or
defenses against the Landlord, except as follows:
(If none, please state "None.")
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or pledge of the
Lease or rentals under the Lease by Landlord.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or any
portion thereof to any sublessee or assignee. No one except Tenant and its
employees will occupy the Leased Premises except as permitted under the Lease.
The address for notices to be sent to Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the generation,
treatment, storage, disposal or release into the environment of any hazardous
materials, regulated materials and/or solid waste, except those used in the
ordinary course of operating a retail store or restaurant (if so permitted by
the Lease) or otherwise used in accordance with all applicable laws.
Section 18. Notification by Tenant.
From the date of this Certificate and continuing through Buyer's acquisition of
title to the Property, Tenant agrees to immediately notify Buyer, in writing, at
the following address, on the occurrence of any event or the discovery of any
fact that would make any representation contained in this Certificate
inaccurate:
The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
Tenant makes this Certificate with the knowledge that it will be relied upon by
Buyer in agreeing to purchase the Property. In the event that Buyer acquires
the Property, nothing in this Section 18 shall limit Tenant's obligations under
the Lease.
Tenant his executed this Certificate as of the date first written above by the
person named below, who is duly authorized to do so.
TENANT
By:
-----------------------
Name:
Its:
SCHEDULE 4.2.2
SCHEDULE OF CONTRACTS
SCHEDULE 4.2.3
RENT ROLL
Attached.
FIRST AMENDMENT TO
AGREEMENT OF PURCHASE AND SALE
THIS FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this "Amendment") is
made as of this 29th day of July, 1997, by and between THE PRICE REIT, INC., a
Maryland corporation ("Purchaser"), and WESTFARMS, L.P., a Connecticut limited
partnership ("Seller"), with reference to the following facts:
A. Purchaser and Seller previously have entered into that certain Agreement
of Purchase and Sale dated as of June 19, 1997 (the "Agreement"), with respect
to the purchase and sale of certain real property located in the towns of
Farmington and New Britain, State of Connecticut.
B. Purchaser and Seller now desire to amend the Agreement as set forth
herein. Capitalized terms used herein without definition shall have the
respective meanings ascribed to such terms in the Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller hereby agree
as follows:
1. Review Period. Notwithstanding anything to the contrary set forth in
the Agreement, Purchaser and Seller hereby agree that the Review Period shall be
extended for an additional period of fourteen (14) days, until August 14, 1997.
2. Reaffirmation. Except as modified hereby, the Agreement is and shall
remain in full force and effect.
3. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Purchaser and Seller have caused this Amendment to be
executed as of the date first above written.
SELLER:
WESTFARMS, L.P., a Connecticut limited
partnership
By: HRA Westfarms, Inc., its general partner
By: /LEONARD W. COTTON/
--------------------------------
Leonard W. Cotton, its President
By: SMS&G Yankee Corp., its general partner
By: /MILTON S. SHAPIRO/
----------------------
Milton S. Shapiro
Its: President
PURCHASER:
THE PRICE REIT, INC., a Maryland corporation
By: /JERALD FRIEDMAN/
--------------------------------
Senior Executive Vice President
SECOND AMENDMENT TO
AGREEMENT OF PURCHASE AND SALE
THIS SECOND AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (this "Amendment")
is made as of this 21st day of August, 1997, by and between THE PRICE REIT,
INC., a Maryland corporation ("Purchaser"), and WESTFARMS LIMITED PARTNERSHIP, a
Connecticut limited partnership ("Seller"), with reference to the following
facts:
A. Purchaser and Seller previously have entered into that certain Agreement
of Purchase and Sale dated as of June 19, 1997 (the "Original Agreement"), with
respect to the purchase and sale of certain real property located in the towns
of Farmington and New Britain, State of Connecticut.
B. In addition, Purchaser and Seller entered into that certain First
Amendment to Agreement of Purchase and Sale dated as of July 29, 1997 (the
"First Amendment"), pursuant to which Purchaser and Seller agreed to amend the
Original Agreement as set forth in the First Amendment. The Original Agreement,
as amended pursuant to the First Amendment, is referred to herein as the
"Agreement."
C. Purchaser and Seller now desire to further amend the Agreement as set
forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller hereby agree
as follows:
1. Prorations. The following paragraph 10.2(i) is hereby added to the
Agreement:
"(i) Capital Expenditures and Maintenance Credit. At Closing, in addition
to any other credits to which Purchaser is entitled under the Agreement,
Purchaser shall receive a credit in the amount of One Hundred Fifty Thousand and
No/100 Dollars ($150,000.00) for capital expenditures to be made and maintenance
to be performed at the Property."
2. Due Diligence Review. Purchaser hereby acknowledges that Purchaser has
completed its due diligence review of the Property as provided in Section 5.2 of
the Agreement, and hereby waives its right to object to matters disclosed by
Purchaser's due diligence review and to terminate the Agreement due to
Purchaser's disapproval thereof as provided in Section 5.2. Notwithstanding the
foregoing, nothing set forth herein shall be deemed a waiver by Purchaser of its
objections to certain matters set forth in the PTR and Survey, and Purchaser
shall retain each and all of its rights under the Agreement with respect the
Objectionable Matters set forth in (i) those certain memoranda dated July 9,
1997 and July 25, 1997 from Celia M. Keller of Gibson, Dunn & Crutcher LLP, on
behalf of Purchaser, to Lawyers Title Insurance Corporation and Seller and
(ii) that certain memorandum dated July 18, 1997 from Celia M. Keller of Gibson,
Dunn & Crutcher LLP, on behalf of Purchaser, to Barakos-Landino Design Group and
Seller (collectively, the "Title and Survey Notices"). In addition to the
matters disclosed in the Title and Survey Notices, Purchaser hereby objects to
the condition of the number of parking stalls at the Property, and reserves its
right to terminate the Agreement in the event that Purchaser does not receive,
on or prior to the Closing, evidence acceptable to Purchaser in its sole
discretion that the parking at the Property complies with all applicable laws.
Nothing set forth in this Section 2 shall waive or be deemed a waiver by either
party of the conditions to Purchaser's or Seller's obligation to close the
transaction as contemplated by the Agreement.
3. Additional Earnest Money Deposit. Seller and Purchaser hereby agree
that Section 9.2.2 of the Agreement is hereby deleted and that, notwithstanding
anything to the contrary set forth in the Agreement, Purchaser shall have no
obligation to deposit the Additional Earnest Money Deposit in the Title Escrow.
All references in the Agreement to the Additional Earnest Money Deposit are
hereby deleted.
4. Reaffirmation. Except as modified hereby, the Agreement is and shall
remain in full force and effect.
5. Defined Terms. Capitalized terms used herein and not otherwise defined
shall have the respective meanings ascribed to such terms in the Agreement.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Purchaser and Seller have caused this Amendment to be
executed as of the date first above written.
SELLER:
WESTFARMS LIMITED PARTNERSHIP, a
Connecticut limited partnership
By: HRA Westfarms, Inc., its general partner
By: /LEONARD W. COTTON/
--------------------------------
Leonard W. Cotton, its President
By: SMS&G Yankee Corp., its general partner
By: /MILTON S. SHAPIRO/
--------------------
Milton S. Shapiro
Its: President
PURCHASER:
THE PRICE REIT, INC., a Maryland corporation
By: /JERALD FRIEDMAN/
--------------------------------
Its: Senior Executive Vice President
CONTRIBUTION AGREEMENT
by and between
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P., a California limited partnership,
And
ALTAMONTE JOINT VENTURE, a Florida general partnership
Dated as of August 28, 1997
Property Location:
Renaissance Centre
355 East Altamonte Drive
Altamonte Springs, Florida
TABLE OF CONTENTS
Page
ARTICLE 1 THE PROPERTY; CONSIDERATION 1
SECTION 1.01. The Property 1
SECTION 1.02. Contribution 3
SECTION 1.03. Lease of Certain Space at the Property by AJV 3
ARTICLE 2 TITLE TO THE PROPERTY 6
SECTION 2.01. Title to the Property 6
ARTICLE 3 CLOSING CONDITIONS AND DELIVERIES 6
SECTION 3.01. Conditions to AJV's Obligations 6
SECTION 3.02. Conditions to PRRP's Obligations 6
SECTION 3.03. AJV's Closing Documents 10
SECTION 3.04. PRRP's Closing Documents 11
SECTION 3.05. Conditions Generally 11
SECTION 3.06. Return of Documents 11
ARTICLE 4 THE CLOSING 11
SECTION 4.01. The Closing 11
SECTION 4.02. Closing Costs 11
SECTION 4.03. Survival 12
SECTION 4.04. Apportionments and Payments 12
SECTION 4.05. Apportionment of Rents 14
SECTION 4.06. Survival 14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES 14
SECTION 5.01. AJV's Representations and Warranties 14
SECTION 5.02. PRRP's Representations and Warranties 18
SECTION 5.03. Certain Limitations on AJV's Representations and
Warranties 18
SECTION 5.04. Survival of Representations and Warranties 19
SECTION 5.05. No Other Representations or Warranties 19
ARTICLE 6 INTENTIONALLY OMITTED 20
ARTICLE 7 COVENANTS OF PRRP 20
SECTION 7.01. Covenants of PRRP 20
ARTICLE 8 INTENTIONALLY OMITTED 21
ARTICLE 9 INDEMNITIES 21
SECTION 9.01. Indemnification Generally 21
ARTICLE 10 BROKER 21
SECTION 10.01. Broker 21
ARTICLE 11 REMEDIES 22
SECTION 11.01. Remedies 22
ARTICLE 12 NOTICES 22
SECTION 12.01. Notices 22
ARTICLE 13 MISCELLANEOUS PROVISIONS 23
SECTION 13.01. Acceptance of the Premises 23
SECTION 13.02. Press Release 23
SECTION 13.03. Assignment 24
SECTION 13.04. Binding Effect 24
SECTION 13.05. Partial Invalidity 24
SECTION 13.06. Recordation of Agreement 24
SECTION 13.07. Entire Agreement 24
SECTION 13.08. Further Assurances 24
SECTION 13.09. Enforcement 24
SECTION 13.10. Amendment 25
SECTION 13.11. Governing Law 25
SECTION 13.12. Exhibits 25
SECTION 13.13. No Waiver 25
SECTION 13.14. Headings; Article, Section and Exhibit
References/Interpretation 25
SECTION 13.15. No Other Parties 25
SECTION 13.16. Relationship 25
SECTION 13.17. Counterparts 25
SECTION 13.18. Time of the Essence 25
SECTION 13.19. Audit Cooperation 25
SECTION 13.20. Radon Gas Disclosure 25
SECTION 13.21. AJV's Waivers and Release 26
EXHIBITS
--------
EXHIBIT A Description of Land
(Section 1.01(a))
EXHIBIT A-2 Consideration
(Section 1.02)
EXHIBIT B Escrow Provisions
(Section 1.02)
EXHIBIT C Investment Representation Letter
(Section 3.02(j))
EXHIBIT D Space Leases
(Section 5.01(e))
EXHIBIT E Security Deposits
(Section 5.01(f))
EXHIBIT F Service Contracts
(Section 5.01(g))
EXHIBIT G Licenses and Permits
(Section 5.01(h))
EXHIBIT H Bill of Sale
(Sections 101(e) and 3.03(b))
EXHIBIT I Assignment and Assumption of Leases
(Sections 101(d) and 3.03(c))
EXHIBIT J Assignment and Assumption of Service Contracts
(Sections 1.01(f) and 3.03(d))
EXHIBIT K Assignment and Assumption of Licenses and Permits
(Sections 1.01(f) and 3.03(e))
EXHIBIT L Assignment of Guarantees and Warranties
(Sections 1.01(f) and 3.03(f))
EXHIBIT M Letter to Tenants
(Section 3.03(h))
EXHIBIT N Special Warranty Deed
(Sections 2.01 and 3.03(a))
EXHIBIT O Insurance Binder
(Section 10.03)
EXHIBIT P Estoppel Certificate
(Section 6.01(d))
EXHIBIT Q Brokerage Agreements
(Section 5.01(f))
EXHIBIT R FIRPTA Affidavit
(Section 3.03(o))
SCHEDULE 1.05 Vanilla Shell Construction Provision
(Section 1.05)
SCHEDULE 4.04 Tax Proration Exceptions
(Section 4.04(i))
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (the "Agreement") dated as of August 28, 1997 (the
"Date Hereof", as used in this Agreement, shall be the date that this Agreement
shall have been executed by PRRP and AJV, or in the event that PRRP and AJV
shall have executed this Agreement on separate dates, the date of the last
execution) is made between ALTAMONTE JOINT VENTURE, a Florida general
partnership, having an office c/o Rida Development Corporation, 5444 Westheimer,
Suite 1605, Houston, Texas 77056 ("AJV"), and THE PRICE REIT RENAISSANCE
PARTNERSHIP, L.P., a California limited partnership, having an office at 145
South Fairfax Avenue, Fourth Floor, Los Angeles, California 90036 ("PRRP").
RECITALS
A. AJV and The Price REIT, Inc., a Maryland corporation, as partners in PRRP
have executed the Agreement of Limited Partnership of The Price REIT Renaissance
Partnership, L.P., dated as of August 22, 1997 (the "Partnership Agreement")
which contains the rights, duties and obligations of the partners.
B. AJV is the owner of certain Property described in Section 1.01 hereof which
is subject to the existing loan (the "Existing Loan") in favor of Barclays Bank
PLC, New York Branch ("Existing Lender"), which Existing Loan is secured by,
among other things, a mortgage on the Property (the "Existing Mortgage"). The
current balance of the Existing Loan as of the date hereof is $32,204,583
("Outstanding Amount of the Barclays Loan").
C. As consideration for its limited partnership interest in PRRP, AJV shall
contribute the Property to PRRP subject to the Existing Loan.
D. PRRP shall then further reduce the total amount outstanding under the
Existing Loan to $7,000,000.
E. PRRP shall cause The Price REIT, Inc., a Maryland corporation, (the "New
Lender") to purchase the Existing Loan from the Existing Lender for $7,000,000.
F. After the New Lender acquires the Existing Loan, the New Lender and PRRP
shall amend the Existing Loan in certain respects and AJV, its partners or its
principals shall guaranty the repayment thereof.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements hereinafter set forth, and subject to the terms and conditions
hereof, AJV and PRRP hereby covenant and agree as follows:
ARTICLE 1
THE PROPERTY; CONSIDERATION
SECTION 1.01. The Property. AJV shall contribute, assign, transfer and convey
to PRRP, and PRRP shall acquire from AJV, upon and subject to the terms and
conditions hereof, the following:
(a) Land. That certain plot, piece and parcel of land located in Altamonte
Springs, Florida and commonly known as Renaissance Centre, as more particularly
described in Exhibit A hereto (the "Land");
(b) Appurtenances. All of AJV's right, title and interest in all rights,
privileges, strips, gores and easements appurtenant to and for the benefit of
the Land, including, without limitation, all minerals, oil, gas and other
hydrocarbon substances on an under the Land, as well as any development rights,
air rights, water, water rights and water stock relating to the Land and any
other easements, rights-of-way or appurtenances owned by AJV and used in
connection with the beneficial operation, use and enjoyment of the Land, the
Space Leases, the Building, the Intangible Property (all as hereinafter
defined), or any other appurtenance, together with all rights of AJV in and to
streets, sidewalks, alleys, driveways, parking areas and areas adjacent thereto
or used in connection therewith, and all rights of AJV in any land lying in the
bed of any street, road or avenue, opened or proposed, public or private, in
front of or adjoining the Land to the center line thereof (all of which are
collectively referred to as the "Appurtenances");
(c) The Building. All of AJV's right, title and interest in all improvements
and fixtures located or to be located on the Land, including, without
limitation, all buildings and structures presently located on the Land or to be
located thereon on the Closing Date, all apparatus, equipment and appliances
presently located on the Land and used in connection with the operation or
occupancy thereof, such as heating and air conditioning systems and facilities
used to provide any utility services, parking services, refrigeration,
ventilation, garbage disposal, recreation or other services thereto, and all
landscaping and leasehold improvements of tenants, if any, which become the
property of the owner of the Land (all of which are collectively referred to as
the "Building");
(d) Leases and Rents. All leases, occupancy agreements and other similar
agreements relating to the Property (as hereinafter defined) to which AJV is a
party or by which it is bound, together with all modifications, extensions and
renewals thereof, (the "Space Leases"), and any guarantees of any of the
foregoing with respect to or demising any part of the Land, Appurtenances or the
Building, all of AJV's right, title and interest in all income, receipts, funds
and revenues of any kind whatsoever payable under the Space Leases or otherwise
with respect to all or any portion of the Land, Appurtenances or the Building
subject to apportionment in accordance with Sections 4.04 and 4.05 hereof (the
"Rents"), all of which Leases and Rents shall be contributed, transferred and
assigned to PRRP pursuant to an instrument in the form of Exhibit I hereto (the
"Assignment and Assumption of Leases and Rents");
(e) Personal Property. All of AJV's right, title and interest in all fixtures,
machinery, equipment and all other tangible personal situated or to be situated
in and used in connection with, the Land and/or the Building (the "Personal
Property"), all of which Personal Property shall be contributed, transferred and
assigned to PRRP pursuant to an instrument in the form of Exhibit H hereto (the
"Bill of Sale");
(f) Intangible Property. All of AJV's right, title and interest in all
intangible personal property which relates to and is reasonably required for the
ownership, operation or functioning of all of or part of the Land, the Building
or Personal Property generally (the "Intangible Property"), including, without
limitation, (i) the name "Renaissance Centre", (ii) any and all contracts, all
of which shall be assigned to PRRP pursuant to one or more (as determined by
PRRP) assignments in the form of Exhibit J hereto (the "Assignment and
Assumption of Service Contracts"), (iii) all licenses and permits, all of which
shall be assigned to PRRP pursuant to one or more (as determined by PRRP)
assignments in the form of Exhibit K hereto (the "Assignment and Assumption of
Licenses and Permits"), and (iv) all warranties and guarantees, all of which
shall be assigned to PRRP pursuant to one or more (as determined by PRRP)
assignments in the forms of Exhibit L hereto (the "Assignment and Assumption of
Guarantees and Warranties").
The Land, the Building, the Space Leases, the Rents, the Personal Property and
the Intangible Property and all other rights, improvements and property
heretofore mentioned being referred to collectively herein as the "Property".
SECTION 1.02. Contribution. At the closing, subject to the terms of this
Agreement, AJV shall contribute the Property to PRRP subject to the Existing
Loan in the amount equal to the Outstanding Amount of the Barclays Loan
(collectively, the "AJV Contribution"). The AJV Contribution shall constitute a
"Capital Contribution" pursuant to Article 4.1 the Partnership Agreement and is
intended to be governed by Section 721(a) of the Internal Revenue Code of 1986,
as amended from time to time, and the regulations promulgated thereunder from
time to time (the "Code"). In exchange for the AJV Contribution, PRRP shall
deliver units of limited partnership interest in PRRP ("Partnership Units"), as
set forth on Exhibit A-2 hereto. In addition and notwithstanding anything to
the contrary contained in this Agreement, at the Closing, PRRP shall be
responsible for (i) reducing the outstanding balance of the Existing Loan to
$7,000,000, (ii) causing the New Lender to purchase the Existing Loan for
$7,000,000 and modify the Existing Loan Documents pursuant to the modification,
(iii) depositing the Pine & Design Rent Portion and the 2000 SF Space Rent
Portion with Escrowee as required by Section 1.05(b) and (c), and (iv) paying
all of the AJV Closing Costs set forth in Section 4.02 and the commission to the
Broker as required under Section 10.01; provided, however, that in the event the
total amount payable by PRRP or New Lender under clauses (i), (ii), (iii) and
(iv) of this Section 1.02 exceeds $33,433,000, AJV shall be responsible for
paying such excess amounts by depositing such amounts with Escrowee prior to the
Closing Date. For purposes of this Agreement, the term "Consideration" means
the amount payable by PRRP or New Lender under clauses (i), (ii), (iii) and (iv)
of this Section provided such amounts are not in excess of $33,433,000. Each
party shall be responsible for depositing its adjustments and prorations
pursuant to Sections 4.04 with Escrowee prior to the Closing Date.
SECTION 1.03. Lease of Certain Space at the Property by AJV.
(a) The parties acknowledge that as of the date hereof there exists at the
Property two (2) spaces which may be vacant at Closing (the "Vacant Space").
The Vacant Space includes the following: (a) 2000 square feet of space that is
now vacant (the "2000 SF Space") and (b) 11,050 square feet of space that was
leased to Pine & Design Furniture, which tenant has stated that it will be
vacating such space (the "Pine & Design Space"). The parties agree that if the
2000 SF Space and/or the Pine & Design Space has not been "Leased" by the
Closing Date in accordance with and subject to Section 6.01 hereof, PRRP, as
landlord, will master lease the unleased Vacant Space to AJV (or any designee of
AJV), as tenant. In the event the 2000 SF Space is master leased to AJV, (the
"2000 SF Master Lease"), such 2000 SF Master Lease will (1) be for a term of one
(1) year, (2) provide that the only monetary obligation of the tenant thereunder
will be to pay base rent in the amount of $40,000 per year, together with its
prorata share of common area maintenance charges, real estate taxes and
insurance expenses (collectively, the "2000 SF Space Rent"), which rent shall be
payable, on the first day of each month, in equal monthly installments,
(3) terminate at such time as PRRP Leases such space and (4) contain such other
terms and provisions as are reasonably acceptable to AJV and PRRP including that
the 2000 SF Space will be surrendered in "Vanilla Shell Condition," as defined
in Schedule 1.05 attached hereto. The term "prorata share" means 0.74% in the
case of the 2000 SF Space. In the event the Pine & Design Space is not Leased
at Closing, PRRP will master lease the Pine & Design Space to AJV (the "Pine &
Design Master Lease"), such lease will (1) be for a term of one (1) year,
(2) provide that the only monetary obligation of the tenant thereunder will be
to pay base rent in the amount of $132,600 per year, together with its prorata
share of common area maintenance charges, real estate taxes and insurance
expenses (collectively, the "Pine & Design Rent"), which rent shall be payable,
on the first day of each month, in equal monthly installments, (3) terminate at
such time as PRRP Leases such space and (4) contain such other terms and
provisions as are reasonably acceptable to AJV and PRRP including that the Pine
& Design Space will be surrendered in Vanilla Shell Condition. The term
"prorata share" means 4.08% in the case of the Pine & Design Space. The term
"Leased" and "Leases" as used in this Section 1.05 shall mean all of the
following shall have occurred: (a) a written lease agreement shall have been
executed by PRRP and a new tenant and (b) the new tenant shall have commenced
paying rent under such new lease and no free or reduced rent shall be applicable
within the first year of the term of such Lease. The forms of the 2000 SF
Master Lease and the Pine & Design Master Lease shall be agreed to between AJV
and PRRP prior to the Closing Date.
(b) If the parties enter into the Pine & Design Master Lease the AJV shall
(unless PRRP is obligated to deposit the Pine & Design Rent Portion with
Escrowee in accordance with Section 1.02 hereof, in which case PRRP shall make
such deposit), on the Closing Date, deposit with Escrowee the sum of $170,617 in
the form of a check or wire transfer (the "Pine & Design Rent Portion"). The
Pine & Design Rent Portion shall be used by Escrowee to pay the monthly Pine &
Design Rent under the Pine & Design Master Lease. Escrowee shall place said sum
in an interest-bearing account with a bank or savings association. All interest
on such sum shall accrue for the benefit of AJV. Until the expiration of the
term of the Pine & Design Master Lease or the earlier termination thereof, the
Escrowee shall on the first day of each month during the term of the lease,
commencing on the first day of the first month following Closing Date, make
payments to PRRP in the amount of $14,218.08 per month. Notwithstanding the
foregoing, if the term of the Pine & Design Master Lease does not commence on
the first day of a month, the parties agree that the Pine & Design Rent payable
during the first and last months of the term shall be prorated. The parties
agree to provide Escrowee with the amount of such prorated payments. If the
Pine & Design Master Lease is terminated prior to the expiration of the term
other than as a result of AJV's default and all of AJV's obligations under the
Pine & Design Master Lease are satisfied, all amounts remaining in the escrow
account shall (subject to proration in accordance with the two preceding
sentences) be returned to AJV.
(c) If the parties enter into the 2000 SF Master Lease the AJV shall (unless
PRRP is obligated to deposit the 2000 SF Space Rent Portion with Escrowee
pursuant to the terms of Section 1.02 hereof, in which case PRRP shall make such
deposit), on the Closing Date, deposit with Escrowee the sum of $46,930 in the
form of a check or wire transfer (the "2000 SF Space Rent Portion"). The
2000 SF Space Rent Portion shall be used by Escrowee to pay the monthly 2000 SF
Space Rent under the 2000 SF Master Lease. Escrowee shall place said sum in an
interest-bearing account with a bank or savings association. All interest on
such sum shall accrue for the benefit of AJV. Until the expiration of the term
of the 2000 SF Master Lease or the earlier termination thereof, the Escrowee
shall on the first day of each month during the term of the 2000 SF Master
Lease, commencing on the first day of the first month following Closing Date,
make payments to PRRP in the amount of $3,910 per month. Notwithstanding the
foregoing, if the term of the 2000 SF Master Lease does not commence on the
first day of a month, the parties agree that the rent payable during the first
and last months of the term shall be prorated. The parties agree to provide
Escrowee with the amount of such prorated payments. If the 2000 SF Master Lease
is terminated prior to the expiration of the term other than as a result of
AJV's default and all of AJV's obligations under the 2000 SF Master Lease are
satisfied, all amounts remaining in the escrow account shall (subject to
proration in accordance with the two preceding sentences and satisfaction of all
requirements of the 2000 SF Master Lease) be returned to AJV.
(d) If the Pine & Design Master Lease and/or the 2000 SF Master Lease is/are
entered into, PRRP shall use commercially reasonable efforts to lease the
2000 SF Space and/or the Pine & Design Space, as applicable. In addition, AJV
may notify PRRP of any proposed tenant that AJV has located for either the
2000 SF Space or the Pine & Design Space. Such notice shall indicate the name
of the proposed tenant, the term of the proposed lease, the rent payable under
the proposed lease, the estimated tenant improvement cost and the brokerage
commission payable in respect of such lease (collectively, the "Terms of the New
Space Lease"). PRRP shall have the right to approve or disapprove (provided
such approval shall not be unreasonably withheld) such proposed tenant and the
Terms of the New Space Lease; provided, however, that PRRP must notify AJV of
its decision within five (5) business days after receipt by PRRP of the AJV's
notice. If PRRP shall not give notice of its disapproval within such five
(5) business day period then, for purposes of this Agreement only, PRRP shall be
deemed to have approved such proposed tenant and the Terms of the New Space
Lease. PRRP hereby approves Golf Superstores as a proposed tenant for the Pine
& Design Space. If PRRP approves or is so deemed to have approved such proposed
tenant and the Terms of the New Space Lease, the Pine & Design Master Lease
and/or the 2000 SF Master Lease, as the case may be, shall terminate as of the
date such space is Leased and Escrowee shall be authorized to return to AJV the
balance of the Pine & Design Portion and/or the 2000 SF Space Portion which is
allocable to the period after such space is Leased (subject to satisfaction of
all requirements of the Pine & Design Master Lease and/or the 2000 SF Master
Lease, as the case may be). PRRP agrees that it shall diligently pursue the
leasing of the Pine & Design Space and the 2000 SF Space and act in good faith
and in a commercially reasonable manner in negotiating a lease for such space
after the Terms of the New Space Lease and the proposed tenant have been
approved or deemed approved. At such time as PRRP fails to diligently pursue
the leasing of such space or fails to act in good faith and in a commercially
reasonable manner in negotiating a lease for such space, AJV shall give written
notice of such failure to PRRP ("AJV's Notice"). PRRP shall have ten (10)
business days following the receipt of AJV's Notice to evidence to AJV its
diligent pursuit of the lease of such space. If PRRP does not do so, provided
the failure to diligently pursue is not due to the actions of the proposed
tenant, AJV may terminate the Pine & Design Master Lease and/or the 2000 SF
Master Lease, as applicable, by notice to PRRP and, upon such termination,
Escrowee shall be authorized to return to AJV the balance of the Pine & Design
Portion and/or the 2000 SF Space Portion which is allocable to the period after
such termination. In addition, for the purposes of this Section 1.05, such New
Space Lease shall not provide for free rent in excess of one month after the
tenant under the New Space Lease has opened for business.
(e) The provisions of this Section 1.05 shall survive the Closing.
ARTICLE 2
TITLE TO THE PROPERTY
SECTION 2.01. Title to the Property. (a) At the Closing, AJV shall contribute
and convey to PRRP marketable and insurable fee simple title to the Property
subject to Permitted Exceptions (as hereinafter defined), pursuant to a special
warranty deed (the "Deed") in the form attached hereto as Exhibit N.
(b) Prior to the Date Hereof, PRRP has made application to Chicago Title
Insurance for the issuance of an ALTA title insurance commitment (the "Title
Commitment") in the name of PRRP insuring PRRP's title to the Property in the
amount of $33,700,000 or such lesser amount as PRRP may determine and containing
endorsements reasonably required by PRRP.
(c) Prior to the Date hereof, PRRP has, at PRRP's cost and expense, ordered a
survey of the Property (the "Updated Survey").
(d) All exceptions to title to, and/or encumbrances against, the Property shown
on the Title Commitment or the Updated Survey but not objected to by PRRP on or
before the Closing Date shall be deemed "Permitted Exceptions".
ARTICLE 3
CLOSING CONDITIONS AND DELIVERIES
SECTION 3.01. Conditions to AJV's Obligations. The obligation of AJV to
contribute the Property to PRRP and to otherwise consummate the transaction
contemplated hereby shall be subject to the satisfaction of the following
conditions precedent on and as of the Closing Date:
(a) all representations and warranties of PRRP contained in Section 5.02 of this
Agreement shall have been true when made and shall be true in all respects at
and as of the Closing Date as if such representations and warranties were made
at and as of the Closing Date, and PRRP shall have performed and complied with
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by PRRP prior to or at the Closing;
(b) AJV shall have received PRRP's Closing Documents (as hereinafter defined);
and
(c) AJV shall have received Partnership Units in accordance with Section 1.02 of
this Agreement, PRRP shall have deposited with Escrowee the amounts that are
payable by it pursuant to the terms of Section 1.02 and Section 4.04 hereof.
(d) AJV shall have received and approved the Guaranty (as hereinafter defined).
(e) PRRP shall have reduced the outstanding amount of the Existing Loan and
thereafter, PRRP shall have caused New Lender to have purchased the Existing
Loan from the Existing Lender for $7,000,000.
SECTION 3.02. Conditions to PRRP's Obligations. PRRP's obligation to deliver
the Consideration, to acquire the Property and otherwise consummate the
transactions contemplated hereby shall be subject to the satisfaction of the
following conditions precedent on and as of the Closing Date:
(a) In connection with PRRP's inspection, review and analysis of the Property
and matters related thereto, AJV shall deliver to PRRP, at AJV's sole cost and
expense, copies of each of the following items to the extent in AJV's possession
or control (collectively, the "Due Diligence Information"):
(i) all Space Leases and proposed Space Leases in effect at the Property;
(ii) a current rent roll specifying the name of each tenant under the
Space Leases, the date of each tenant's Space Lease, the amount of monthly
rental and all other charges payable by each tenant, the amount of any Security
Deposit or prepaid rental, if any, paid by each tenant, the expiration date of
each Space Lease, and the amount and length of option periods, if any, of each
Space Lease.
(iii) the real estate and ad-valorem tax bills relating to the Property for
1994, 1995 and 1996;
(iv) all leasing commission agreements, if any, and all service, supply
and maintenance contracts and agreements relating to and currently in effect at
the Property;
(v) all soils, environmental inspection and hazardous materials reports,
tests, surveys, studies, audits or assessments (including, without limitation,
any reports attesting to the presence (or lack thereof) of Hazardous Materials
(as defined in Section 5.01(n) of this Agreement)), all termite reports,
engineering studies and other reports attesting to the physical and structural
condition of the Property, and all appraisals, maps, studies, analyses with
respect to the Property;
(vi) all insurance policies, including, without limitation, existing fire
and extended coverage and general liability insurance policies, maintained by
the AJV with respect to the Property within the last year;
(vii) all operating statements of the Property for calendar years 1994,
1995, 1996, and the first quarter of 1997;
(viii) all permits and licenses relating to the Property;
(ix) all documents and certificates from appropriate governmental
authorities relating to the zoning, building and platting status of the
Property;
(x) a description of existing and proposed local improvements affecting
the Property, including assessment levels; and
(xi) all plans and construction drawings for all buildings to be
constructed on the Property.
Notwithstanding anything to the contrary herein contained, while AJV shall
deliver to PRRP the Due Diligence Information in the manner provided for in this
Agreement, AJV will not be under any obligation to order or otherwise obtain new
or additional studies or any items that are not within its present control or
possession. At any time prior to the Closing, PRRP shall not contact any of the
Property's tenants regarding any of the transactions contemplated herein without
first allowing AJV to be present either in person or on the telephone during
such contact.
PRRP hereby acknowledges receipt of the Due Diligence Information which AJV
represents is true, correct and complete in all material respects. AJV shall
make available the Due Diligence Information set forth in clauses (x) and (xi)
of this Section 3.02(a) for PRRP's review to the extent in AJV's possession or
control.
(b) Subject to Article 5 of this Agreement, all representations and warranties
of AJV contained in this Agreement shall be true in all material respects at and
as of the Closing Date, and AJV shall have performed and complied in all
material respects with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by AJV prior to or at the Closing
Date;
(c) PRRP shall have received AJV's Closing Documents (as hereinafter defined).
(d) PRRP's review and approval, in its sole and absolute discretion, of all
utility contracts, water and sewer service contracts, Service Contracts (as
hereinafter defined), brokerage contracts, commission contracts, warranties,
permits, soils reports, and other contracts or documents of any nature relating
to the Property or any portion thereof and theretofore disclosed to PRRP;
provided that PRRP's only remedy if it disapproves any such contract(s) shall be
to compel the AJV to terminate such disapproved contract(s) on or prior to the
Closing, which AJV hereby agrees to do at its sole cost and expense if so
requested by PRRP. In the event PRRP fails to notify AJV of its disapproval of
any of the foregoing items prior to or on the Closing Date, such items shall be
deemed approved. As of the Closing Date, there shall be no Service Contracts or
utility contracts other than those approved or deemed approved by PRRP.
(e) PRRP's review and approval, in its sole and absolute discretion on or prior
to the Closing Date, of (a)an environmental assessment (which shall, without
limiting the scope of the report, contain an assessment of asbestos and radon
affecting the Property) by an environmental consultant of PRRP's choice prepared
at PRRP's sole cost and expense (the "Phase I Report"), and (b) the results of
PRRP's physical inspection and testing of the Property, or any portion thereof
(which testing shall be conducted at PRRP's expense, and may include, but shall
not be limited to, testing for the presence of asbestos, PCBs, as defined below,
and other Hazardous Materials, as defined below, including without limitation
the performance of core sampling, drilling and other intrusive testing), of the
structural, mechanical, electrical and other physical or environmental
characteristics of the Property, including any tenant improvements or other
construction installed or to be installed as of the Closing Date. AJV shall
allow PRRP reasonable access to the Property to perform any physical inspection
thereof which PRRP reasonably deems appropriate; provided that: (i) PRRP shall
provide AJV with reasonable advance notice prior to any such physical
inspection, and provided further that AJV shall have the right to accompany (or
have an agent of AJV accompany) PRRP during such physical inspection; and (ii)
PRRP shall not unreasonably disturb any tenant of the Property during any such
physical inspection. PRRP shall keep and maintain comprehensive general
liability insurance in amounts, in forms and with carriers reasonably acceptable
to AJV, and prior to entry on the Property provide AJV with certificates of
insurance evidencing such coverage and naming AJV and its managing agent as
additional insureds. PRRP agrees to indemnify, defend and hold AJV harmless
from any and all loss, liability, damage, claims, costs or expenses, including
attorney's fees, if any, arising or resulting from: (x) any physical damage to
the Property caused by PRRP or its agents during any physical inspection and (y)
any claim made against AJV by any tenant or any third party alleging any
physical injury caused by PRRP or its agents or alleging breach of a lease
caused by PRRP or its agent during such inspection. Notwithstanding the
foregoing, in no event shall PRRP indemnify AJV for any loss, liability, damage,
claims, costs or expenses arising or resulting from the negligence or willful
misconduct of AJV or its agents. The provisions of this indemnity shall survive
the closing or termination of this Agreement.
(f) PRRP shall have confirmed that all governmental permits and approvals with
respect to the Property required for the use or occupancy of the Property or any
portion thereof, are in full force and effect.
(g) PRRP shall have received the fully executed Estoppels referred to in Section
6.01(d) of this Agreement in substantially the form attached hereto as Exhibit P
or as agreed to by tenant and AJV under the terms of tenant's current lease from
all tenants constituting at least five percent (5%) of the total square footage
of the Building and from tenants under the Space Leases constituting at least
eighty-five percent (85%) of the total leased square footage of the Property.
PRRP shall have received an estoppel, executed by AJV, with regard to each Space
Lease for which AJV is unable to obtain an Estoppel executed by the tenant under
such Space Lease.
(h) This Agreement and the transactions contemplated hereby shall have been
approved by the board of directors of PRRP's general partner prior to the
Closing Date.
(j) AJV shall have delivered to PRRP an investment representation letter in the
form of Exhibit C annexed hereto. PRRP shall have no reasonable basis to
believe that the representations made in such letter are not true and correct.
AJV shall execute any additional documents or instruments that are necessary in
order to comply with the Securities Act of 1933, as amended, and the regulations
promulgated thereunder from time to time ("Securities Act") or state securities
or "Blue Sky" laws or that are otherwise reasonably requested by PRRP. PRRP
shall have received all required material third party consents and approvals,
including all lender consents and all required governmental approvals, including
the approval of any state authorities in respect of any sale of securities of
PRRP.
(k) PRRP shall have received and approved all documentation, including without
limitation, notes, mortgages and documentation executed by Existing Lender
confirming the Outstanding Amount of the Barclays Loan, exclusive of loan
agreements, guaranties and title policy ("Existing Loan Documents") which have
been executed on or before the Closing Date in connection with the Existing Loan
and, shall have obtained a beneficiary's demand executed by the Existing Lender
or AJV shall have received a statement to such effect from Existing Lender and
AJV shall in turn represent and warrant same to PRRP ("Existing Lender's
Demand") in form and substance acceptable to PRRP in its sole and absolute
discretion, setting forth the amount demanded by Existing Lender (which shall
not exceed $7,000,000) in order to sell the Existing Loan to New Lender and the
Existing Loan to New Lender. New Lender and PRRP shall have approved (i) the
form of modifications to the note and mortgage of the Existing Loan
(collectively, "Modification") pursuant to which PRRP will assume the
obligations of AJV under the Existing Loan arising on or after the Closing Date
and evidencing that the Outstanding Amount of the Barclays Loan has been reduced
to $7,000,000 and, (ii) the form of a guaranty of the Existing Loan, as modified
pursuant to the Modification, to be executed by AJV, its partners or principals
as of the Closing Date ("Guaranty"). Prior to the Closing Date, (i) PRRP shall
have received an original Modification executed by the New Lender and (ii) the
New Lender shall have received (v) an original Modification executed by PRRP,
(w) an original Guaranty executed by AJV, its partners or its principals, (x)
all original Existing Loan Documents, (y) an allonge, UCC assignments and an
assignment (without recourse, warranty or representation other than that
Existing Lender has not previously sold, assigned, pledged or participated any
of its interest in the Existing Loan) of the Existing Loan Documents, in form
and substance reasonably acceptable to New Lender, which has been originally
executed by Existing Lender ("Assignment of Existing Loan Documents"), and (z)
the irrevocable commitment of the applicable title company to issue a lender's
title policy in form and substance acceptable to New Lender insuring New Lender
as the holder of a first mortgage on the Property, with a liability amount of
$7,000,000 ("New Lender's Title Policy").
(l) AJV shall have deposited with Escrowee the amounts that are payable by it
pursuant to the terms of Section 1.02 hereof, if any.
SECTION 3.03. AJV's Closing Documents. At the Closing, AJV shall deliver to
PRRP the following documents duly executed and, where appropriate, acknowledged
by AJV or its partners or principals and the following other items (the
documents and other items described in this Section 3.03 being collectively
referred to herein as the "AJV's Closing Documents"):
(a) the Deed in the form annexed hereto as Exhibit N;
(b) a Bill of Sale in the form annexed hereto as Exhibit H;
(c) the Assignment and Assumption of Leases in the form annexed hereto as
Exhibit I;
(d) the Assignment and Assumption of Service Contracts in the form annexed
hereto as Exhibit J;
(e) the Assignment and Assumption of Licenses and Permits in the form annexed
hereto as Exhibit K;
(f) an Assignment of Guarantees and Warranties in the form annexed hereto as
Exhibit L;
(g) immediately available funds, in an amount equal to (i) the total of all
security deposits (and any interest thereon) required to be held by the landlord
under the Space Leases (ii) the total amount of the apportionments and payments
due from AJV pursuant to Section 4.04 hereof;
(h) a letter notice to each of the tenants at the property in the form annexed
hereto as Exhibit M;
(i) to the extent the same are in AJV's possession, a complete set of keys for
the Property;
(j) to the extent the same are in AJV's possession, "as-built" building plans,
specifications and drawings for the Property;
(k) to the extent the same are in AJV's possession, the original Licenses and
Permits (as hereinafter defined) to be transferred hereunder, except to the
extent the same are required to be and are affixed at the Property;
(l) to the extent the same are in AJV's possession, original copies of all
guaranties or warranties then in effect in respect of the Property or building
fixtures or equipment comprising part of the Property;
(m) original, executed counterparts of the Service Contracts or, if unavailable,
photocopies thereof certified by AJV as true and complete photocopies thereof;
(n) original, executed counterparts of the Space Leases or, if unavailable,
photocopies thereof certified by AJV as true and complete photocopies thereof;
(o) an affidavit of AJV pursuant to Section 1445(b)(2) of the Internal Revenue
Code of 1986, as amended, in the form attached hereto as Exhibit R stating under
penalty of perjury that AJV is not a foreign person within the meaning of such
Section;
(p) appropriate transfer tax returns of AJV;
(q) a closing statement confirming the Consideration and apportionments required
to be made hereunder; and
(r) the Guaranty.
SECTION 3.04. PRRP's Closing Documents. At the Closing, PRRP shall deliver to
AJV the following documents duly executed and, where applicable, acknowledged by
PRRP (the documents described in this Section 3.04 being collectively referred
to herein as the "PRRP's Closing Documents"):
(a) counterparts of the documents described in Section 3.03 (c), (d), (e), (f)
and (q);
(b) appropriate transfer tax returns of PRRP if applicable;
(c) instructions to Escrowee regarding sums deposited under Section 1.05 hereof;
(d) a receipt for the security deposits transferred to PRRP;
(e) Modification Agreement;
(f) Assignment of Existing Loan Documents; and
(g) the Partnership Units.
SECTION 3.05. Conditions Generally. The foregoing conditions are for the
benefit only of the party for whom they are specified to be conditions precedent
and such party may, in its sole discretion, waive any or all of such conditions
and close title under this Agreement without any increase in, abatement of or
credit against the Consideration.
SECTION 3.06. Return of Documents. PRRP hereby agrees that if the transactions
contemplated herein do not occur for any reason whatsoever, PRRP shall promptly
provide to AJV all documents, surveys, or other written information of whatever
kind or nature in the possession of PRRP which have been delivered by AJV to
PRRP in connection with the contemplated transactions herein.
ARTICLE 4
THE CLOSING
SECTION 4.01. The Closing. The closing of the contribution contemplated by
this Agreement (the "Closing") shall take place at the offices of the Escrowee,
or at such place as AJV or PRRP may mutually designate upon at least two (2)
days' prior notice, at 10:00 A.M. local time not later than August 29, 1997.
The time and date of the Closing are herein referred to as the "Closing Date".
SECTION 4.02. Closing Costs.
(a) Subject to Section 1.02, AJV shall pay the cost of any recording fees,
documentary stamps or transfer taxes imposed with respect to the contribution of
the Property, as well as for AJV's attorneys' fees, legal and accounting fees
relating to the formation of PRRP and the contribution of the Property thereto,
any intangible taxes imposed as a condition of recording the Modification to the
Existing Loan and any premium charged by the applicable title company for the
issuance of the New Lender's Title Policy;
(b) PRRP shall pay for any premiums charged by the title company for the
issuance of the title insurance policy insuring PRRP's title to the Property in
a liability amount equal to $33,700,000, the cost of the Updated Survey, and any
intangible taxes imposed as a condition of recording any mortgage other than a
modification of the Existing Loan;
(c) Subject to Section 1.02, all other Closing costs shall be paid by that party
customarily paying for such costs in the consummation of commercial real estate
transactions in Seminole County, Florida. Any costs in connection therewith to
be paid by PRRP shall be paid at the Closing. Subject to Section 1.02, any
costs in connection therewith to be paid by AJV shall be paid by AJV at the
Closing.
(d) All costs payable under clause (a) of this Section 4.02 together with those
paid by AJV under clause (c) of this Section 4.02 are hereinafter referred to as
"AJV Closing Costs."
SECTION 4.03. Survival. The provisions of Section 4.02 shall survive the
Closing.
SECTION 4.04. Apportionments and Payments. (a) The following shall be
apportioned at the Closing as of the close of business on the earlier of (i) the
day preceding the Closing Date: or (ii) August 28, 1997.
(i) gross real property taxes, on the basis of the fiscal year for which
assessed (other than the prorata share borne by the tenants listed on
Schedule 4.04 attached hereto and incorporated herein by this reference);
(ii) water rates and charges, unless the direct responsibility of any
tenant or subtenant at the Property;
(iii) sewer taxes and rents;
(iv) annual license, permit and inspection fees, if any;
(v) fuel and steam, gas, electricity charges and all other utilities which
are supplied to the Property;
(vi) vault taxes;
(vii) rents and other charges (including cost reimbursement payments)
(collectively, for the purposes of this clause (vii), "rents") payable under the
Space Leases as and when collected; provided, however, that (A) certain amounts
are subject to final computation as provided in Section 4.05 and (B) if any of
the rents under any of the Space Leases shall be accrued and unpaid at the
Closing Date, the rents collected by PRRP on or after the Closing Date shall
first be applied to all rents due at the time of such collection with respect to
the period after the Closing Date with the balance payable to AJV to the extent
of delinquent rents apportioned to AJV as of the Closing Date; and, provided
further, that PRRP shall not be required to institute any proceeding to collect
any rents accrued and unpaid on the Closing Date. If AJV shall not have received
all accrued and unpaid rents due it as of the Closing Date within sixty (60)
days thereafter, AJV, at its sole cost and expense, shall be entitled to bring
such actions or proceedings not affecting possession or enforcing landlords'
liens as AJV shall desire to collect any such accrued and unpaid rents, and PRRP
shall cooperate (without any expense to PRRP) with AJV in any such action;
(viii) all charges and payments under the Service Contracts;
(ix) maintenance and operating supplies stored at the Property and, where
applicable, in unopened containers or in unbroken boxes, at AJV's cost therefor;
(x) all costs incurred in securing Space Leases after the Date Hereof; and
(xi) all other proratable items and other income from and expense relating
to the Property.
(b) AJV shall furnish readings of the water, gas and electric meters located on
the Property, if any, other than meters measuring the computation of utilities
which are the direct responsibility of any tenant, to a date not more than
thirty (30) days prior to the Closing Date and the unfixed water rates and
charges, sewer taxes and rents and gas and electricity charges, if any, based
thereon for the intervening time shall be apportioned on the basis of such last
readings. If such readings are not obtainable by the Closing Date, then, at the
Closing, any water rates and charges, sewer taxes and rents and gas and
electricity charges which are based on such readings shall be prorated based
upon the per diem charges obtained by using the most recent period for which
such readings shall then be available. Upon the taking of subsequent actual
readings, the apportionment of such charges shall be recalculated and AJV or
PRRP, as the case may be, promptly shall make a payment to the other based upon
such recalculation.
(c) The amount of any unpaid real property taxes and assessments, water rates
and charges and sewer taxes and rents which AJV is obligated to pay and
discharge may, at the option of AJV, be deducted by PRRP from the cash balance
of the Consideration, provided that official bills therefor, indicating the
interest and penalties, if any, thereon, are furnished by AJV at the Closing.
(d) if any refund of real property taxes or assessments, water rates and charges
or sewer taxes and rents shall be made after the Closing, the same shall be held
in trust by AJV or PRRP, as the case may be, and shall first be applied to the
unreimbursed costs incurred in obtaining the same, then paid to any tenant at
the Property who is entitled to the same and the balance, if any, shall be paid
to AJV (with respect to the period prior to the Closing Date) and to PRRP (with
respect to the period commencing with the Closing Date).
(e) if at the Closing Date the Property or any part thereof shall be or shall
have been affected by any special or general assessment or assessments of real
property taxes which are or may become payable in installments of which the
first installment is then a charge or lien and has become payable, AJV shall pay
or cause to be paid the unpaid installments of such assessments due prior to the
Closing Date and PRRP shall pay or cause to be paid all installments which are
due on or after the Closing Date. The current installments shall be apportioned
at the Closing.
(f) In the event the apportionments hereinabove provided which are to be made at
the Closing result in a credit balance (i) to PRRP, such sum shall be paid at
the Closing, by giving PRRP a credit against the balance of the Consideration in
the amount of such credit balance or (ii) to AJV, PRRP shall pay the amount
thereof to AJV at the Closing by wire transfer of immediately available funds to
the account or accounts designated by AJV for the balance of the Consideration.
(g) if any proceeding for certiorari or other proceeding to determine the
assessed value of the Property or the real property taxes payable with respect
to the Property shall have been commenced prior to the Date Hereof and be
continuing as of the Closing Date, PRRP shall cooperate with AJV in the
prosecution of such proceeding or proceedings to completion and in the
settlement or compromise of any claim therein. PRRP agrees to cooperate with
AJV and to execute any and all documents reasonably required in furtherance of
the foregoing.
SECTION 4.05. Apportionment of Rents. If any rents (including cost
reimbursement payments) are payable or accruable under the Space Leases on the
basis of estimates or formulae and/or are subject to adjustment or determination
after the Closing Date, such rents shall be apportioned at the Closing to the
extent collected on the basis of the then current charges or accruals, as
applicable, and shall be subject to reapportionment on the basis of the amounts
as finally determined to be owing under the Space Leases. Any reapportionment
shall occur promptly after the final determination of the amount of rents owing
under the Space Leases. Apportionment of escalation rent shall be made on the
basis of a 365 day year and the actual number of days elapsed.
SECTION 4.06. Survival. The obligations of the parties under Section 4.04 and
Section 4.05 shall survive the Closing.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. AJV's Representations and Warranties. As used herein and
elsewhere in this Agreement, the phrases referring to (i) the "actual knowledge"
of AJV shall refer to the actual knowledge of Jacob Mitzner, Ira Mitzner, David
Mitzner or Jim Jarosik (the "Specified Individuals") and the actual knowledge of
any other person or any knowledge which would be imputed to any of those
person[s] or to AJV as a matter of law shall not be deemed to be covered by
those phrases and (ii) AJV not receiving any written notice shall mean that AJV
has not received originals or copies at its offices at 544 Westheimer, Suite
1605 Houston, Texas, 77056, AJV's main mailing address for notices of the
subject matter referred to in the representation or at AJV's office maintained
at the Property. AJV hereby represents and warrants that the Specified
Individuals are the only individuals employed by AJV or any of its affiliates
who have day-to-day management, supervisory and executive authority over the
Property.
AJV hereby represents and warrants to PRRP, subject to Sections 5.04 and 5.05
hereof, that:
(a) AJV is a partnership duly formed and validly existing in good standing under
the laws of the State of Florida.
(b) This Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of AJV and, upon
the assumption that this Agreement constitutes a legal, valid and binding
obligation of PRRP, this Agreement constitutes a legal, valid and binding
obligation of AJV.
(c) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by AJV do not and will not (i) violate or
conflict with the partnership agreement of AJV, (ii) violate or conflict with
any judgment, decree or order of any court applicable to or affecting AJV or the
Property, (iii) breach the provisions of, or constitute a default under, any
contract, agreement, instrument or obligation to which AJV is a party or by
which AJV or the Property is bound, or (iv) to AJV's actual knowledge, violate
or conflict with any law or governmental regulation or permit applicable to AJV
or the Property.
(d) AJV has not received written notice of any, and to AJV's actual knowledge
there is no, pending or threatened condemnation of all or any portion of the
Property.
(e) The Space Leases listed in Exhibit D constitute all of the leases and
occupancy agreements affecting the Property to which AJV is a party in effect on
the Date Hereof and, except as set forth on Exhibit D: (i) the Space Leases
have not been modified or amended, (ii) as of the Date Hereof, the Space Leases
are in force and effect, and constitute the valid and binding legal obligation
of AJV and, to AJV's actual knowledge, the respective tenant under a Space
Lease, are enforceable against each of them in accordance with their respective
terms subject to the effects on such enforceability of bankruptcy, insolvency,
reorganization and similar laws affecting the enforcement of creditor's rights
generally; and, except as previously disclosed to PRRP, AJV has not delivered
written notice to any tenant claiming that the tenant is in default under its
Space Lease, which default remains uncured, (iii) the brokerage agreements noted
on Exhibit Q are the only brokerage agreements related to the Space Leases to
which AJV is a party, and AJV has paid all amounts due thereunder, (iv) AJV has
delivered to PRRP true and complete copies of the Space Leases and brokerage
agreements, (v) AJV has complied with, paid, and performed all of its build-out
and tenant-improvement obligations with respect to the Space Leases, (vi) there
are no understandings, oral or written, between the parties to any Space Lease
which in any manner vary the obligations or rights of either party; and (vii) no
rent or additional rent under a Space Lease has been paid for more than thirty
(30) days in advance of its due date.
(f) No security deposits have been paid to AJV by or on behalf of any of the
tenants except as set forth in Exhibit E.
(g) Attached hereto as Exhibit F is a list of all service, maintenance, supply
and management contracts affecting the Property in effect on the Date Hereof
(the "Service Contracts"), and except as set forth on Exhibit F ,(i) the Service
Contracts have not been modified or amended and are in force and effect, (ii)
AJV has delivered to PRRP true and complete copies of the Service Contracts, and
(iii) AJV is not, and to AJV's actual knowledge the other parties thereto are
not, in default thereunder.
(h) To AJV's actual knowledge, attached hereto as Exhibit G is a list of all
licenses and permits from governmental authorities held by AJV and required as
of the Date Hereof in connection with AJV's ownership and operation of the
Property (collectively, the "Licenses and Permits") and AJV has delivered to
PRRP true and complete copies of the Licenses and Permits that are in AJV's
possession. To AJV's actual knowledge, all Licenses and Permits required as of
the Date Hereof and as of the Closing Date in connection with the use or
occupancy of the Property have been obtained and are in full force and effect
and in good standing.
(i) AJV is not a "foreign person" as defined in the Federal Foreign Investment
in Real Property Tax Act of 1980 and the 1984 Tax Reform Act, as amended.
(j) AJV has received no written notice of, and to AJV's actual knowledge, there
are no, pending or threatened investigations, actions, suits, proceedings or
claims against or affecting AJV or the Property, at law or in equity or before
or by any federal, state, municipal or other governmental department,
commission, board, agency, or instrumentality, domestic or foreign except those
which are covered by insurance.
(k) AJV has not received from any governmental authority any written notice that
AJV is not in compliance in any material respects with all applicable laws,
ordinances, rules and regulations (including without limitation those relating
to zoning and the Americans With Disabilities Act) applicable to the ownership
or operation of the Property. AJV has not received from any insurance company
or Board of Fire Underwriters any written notice, which remains uncured, of any
defect or inadequacy in connection with the Property or its operation.
(l) To AJV's actual knowledge, neither AJV nor any other party is in material
default under any contract or agreement affecting the Property, and no event
exists which, with the passage of time or the giving of notice or both, will
become a material default thereunder on the part of the AJV or any other party
thereto. To AJV's actual knowledge, AJV is in compliance in all material
respects with the terms and provisions of the covenants, conditions,
restrictions, rights-of-way or easements affecting the Property.
(m) All real property taxes, and all AJV's personal property taxes, relating to
the Property, excepting those for the current tax year which are not yet overdue
(i.e., which are still payable without interest or penalty), have been paid in
full. To AJV's actual knowledge, there is no (i) proposed increase in the
assessed valuation of the Property, or (ii) existing or proposed assessment that
has or may become a lien on the Property.
(n) (i) AJV has not engaged in any operations or activities upon, or any use or
occupancy of the Property, or any portion thereof, for the purpose of or in any
material way involving the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of any Hazardous
Materials (whether legal or illegal, accidental or intentional) on, under, in or
about the Property, or transported any Hazardous Materials to, from or across
the Property, except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (ii)
to AJV's actual knowledge, no tenant, occupant or user of the Property, nor any
other person, has engaged in or permitted any operations or activities upon, or
any use or occupancy of the Property, or any portion thereof, for the purpose of
or in any material way involving the handling, manufacture, treatment, storage,
use, generation, release, discharge, refining, dumping or disposal of any
Hazardous Materials (whether legal or illegal, accidental or intentional) on,
under, in or about the Property, or transported any Hazardous Materials to, from
or across the Property, except in all cases in material compliance with
Environmental Requirements and only in the course of legitimate business
operations at the Property (which shall not include any business primarily or
substantially devoted to the handling, manufacture, treatment, storage, use,
generation, release, discharge, refining, dumping or disposal of Hazardous
Materials); (iii) to AJV's actual knowledge, no Hazardous Materials are
presently constructed, deposited, stored, or otherwise located on, under, in or
about the Property except in all cases in material compliance with Environmental
Requirements and only in the course of legitimate business operations at the
Property (which shall not include any business primarily or substantially
devoted to the handling, manufacture, treatment, storage, use, generation,
release, discharge, refining, dumping or disposal of Hazardous Materials); (iv)
to AJV's actual knowledge, no Hazardous Materials have migrated from the
Property upon or beneath other properties; and (v) to AJV's actual knowledge, no
Hazardous Materials have migrated or threaten to migrate from other properties
upon, about or beneath the Property. As used herein: "Environmental
Requirements" shall mean all applicable present statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items, of all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial
and administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment, including, without limitation:
(i) all requirements, including but not limited to those pertaining to
reporting, licensing, permitting, investigation and remediation of emissions,
discharges, releases or threatened releases of "Hazardous Materials," chemical
substances, pollutants, contaminants or hazardous or toxic substances, materials
or wastes whether solid, liquid or gaseous in nature, into the air, surface
water, ground water or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials, or wastes, whether solid, liquid or gaseous in nature; and (ii) all
requirements pertaining to the protection of the health and safety of employees
or the public. "Hazardous Materials" shall mean (i) any flammable, explosive or
radioactive materials, hazardous wastes, toxic substances or related materials
including, without limitation, substances defined as "hazardous substances,"
"hazardous materials," "toxic substances" or "solid waste" in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sec. 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq.; the Toxic Substances Control Act, 15 U.S.C., Section 2601
et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
6901 et seq.; and in the regulations adopted and publications promulgated
pursuant to said laws; (ii) those substances listed in the United States
Department of Transportation Table (49 C.F.R. 172.101 and amendments thereto) or
by the Environmental Protection Agency (or any successor agency) as hazardous
substances (40 C.F.R. Part 302 and amendments thereto); (iii) those substances
defined as "hazardous wastes," "hazardous substances" or "toxic substances" in
any similar federal, state or local laws or in the regulations adopted and
publications promulgated pursuant to any of the foregoing laws or which
otherwise are regulated by any governmental authority, agency, department,
commission, board or instrumentality of the United States of America, the State
of Florida or any political subdivision thereof, (iv) any pollutant or
contaminant or hazardous, dangerous or toxic chemicals, materials, or substances
within the meaning of any other applicable federal, state, or local law,
regulation, ordinance, or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended; (v) petroleum or any by-products thereof; (vi) any radioactive
material, including any source, special nuclear or by-product material as
defined at 42 U.S.C. Sections 2011 et seq., as amended, and in the regulations
adopted and publications promulgated pursuant to said law; (vii) asbestos in any
form or condition; and (viii) polychlorinated biphenyls.
(o) Intentionally deleted.
(p) AJV has no employees who will have any rights to employment at the Property
after Closing.
(q) To AJV's actual knowledge, all bills and claims for labor performed and
materials furnished to or for the benefit of the Property currently due and
contracted for by AJV or its manager have been paid in full.
(r) To AJV's actual knowledge, the financial statements delivered by AJV to
PRRP, in all material respects, accurately reflect all rents and other gross
receipts, and all amounts paid by AJV for electricity, water, sewer, other
utility services, insurance, fuel, maintenance and repairs (whether capitalized
or expensed), real estate taxes, payroll and payroll taxes and all other
operating and other expenses associated with the Property.
(s) To AJV's actual knowledge, no representation or warranty of AJV in this
Agreement, or any information, statement or certificate furnished or to be
furnished by AJV or at AJV's direction pursuant to this Agreement or in
connection with the transactions contemplated hereby, contains or shall contain
any materially untrue statement of a material fact or omits or shall omit to
state a material fact necessary to make the statements contained therein not
misleading in any material respect. To AJV's actual knowledge, there is no
material misstatement or omission in the copies of contracts, agreements and
other documents delivered by AJV in connection with the transactions
contemplated hereby. provided, however, that, with respect solely to any
representation or warranty that is not qualified as being to AJV's "actual
knowledge" (as defined in Section 5.01 of this Agreement) AJV shall have no
liability for any untrue or incorrect representation or warranty of AJV which
survives the Closing unless and until the aggregate amount of PRRP's monetary
damages arising directly out of all such breaches shall exceed One Hundred
Thousand Dollars ($100,000.00).
(t) No material portion of the Personal Property or fixtures with respect to the
Property (other than fixtures owned or installed by tenants) is leased by the
AJV as lessee.
SECTION 5.02. PRRP's Representations and Warranties. PRRP hereby represents
and warrants to AJV that:
(a) PRRP is a limited partnership duly organized and validly existing and in
good standing under the laws of the State of California.
(b) This Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of PRRP and, upon
the assumption that this Agreement constitutes a legal, valid and binding
obligation of AJV, this Agreement constitutes a legal, valid and binding
obligation of PRRP.
(c) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate or conflict
with PRRP's Partnership Agreement, (ii) violate or conflict with any judgment,
decree or order of any court applicable to or affecting PRRP, (iii) breach the
provisions of, or constitute a default under, any contract, agreement,
instrument or obligation to which PRRP is a party or by which PRRP is bound, or
(iv) violate or conflict with any law or governmental regulation or permit
applicable to PRRP.
SECTION 5.03. Certain Limitations on AJV's Representations and Warranties. The
representations and warranties of AJV are set forth in Section 5.01 and are
subject to the following express limitations:
(a) AJV does not represent or warrant that any particular Space Lease or Service
Contract will be in force or effect as of the Closing, or that any tenant or
party, other than AJV, to the Service Contracts, will not be in default under
their respective Space Leases or Service Contracts; and
(b) In the event that any representation or warranty made by AJV in Section 5.01
of this Agreement shall conflict or be inconsistent with any of the written Due
Diligence Information as that AJV has delivered to PRRP pursuant to this
Agreement and the Exhibits referenced in this Agreement then such
representations and warranties shall be deemed modified to conform them to the
provisions of such documents and materials.
SECTION 5.04. Survival of Representations and Warranties.
(a) The only representations, warranties and agreements of AJV hereunder that
will survive the Closing are those that are specifically stated herein to
survive. All of the representations and warranties of AJV set forth in Section
5.01 will survive the Closing, provided, that any claim based upon any alleged
breach thereof must be asserted in writing within six (6) months after the
Closing; provided however, that in the event PRRP makes a written claim against
AJV with respect to any representation or warranty prior to the date which is
six (6) months after the Closing Date, than such representation or warranty
shall survive without limitation as to such written claim.
(b) The only representations, warranties and agreements of PRRP hereunder that
will survive the Closing are those that are specifically stated herein to
survive. All of the representations, warranties and agreements of PRRP set
forth in Section 5.02 of the Agreement will survive the Closing, provided, that
any claim based upon any alleged breach thereof must be asserted in writing
within six (6) months after the Closing; provided however, that in the event AJV
makes a written claim against PRRP with respect to any representation or
warranty prior to the date which is six (6) months after the Closing Date, than
such representation or warranty shall survive without limitation as to such
written claim.
SECTION 5.05. No Other Representations or Warranties. (a) PRRP represents,
warrants and agrees that (i) PRRP has examined the Property and is familiar with
the physical condition thereof and has conducted such investigation of the
affairs of the Property as PRRP has considered appropriate, (ii) neither AJV nor
any of the employees, agents or attorneys of AJV have made any verbal or written
representations, warranties, promises or guaranties whatsoever to PRRP, whether
express or implied, and, in particular, that no such representations,
warranties, promises or guaranties have been made with respect to the physical
condition or operation of Property, the actual or projected revenue and expenses
of the Property, the zoning and other laws, regulations and rules applicable to
the Property or the compliance of the Property therewith, the quantity, quality
or condition of the articles of personal property and fixtures included in the
transactions contemplated hereby, the use or occupancy of the Property or any
part thereof or any other matter or thing affecting or related to the Property
or the transactions contemplated hereby, except as, and solely to the extent,
herein specifically set forth in this Agreement or in any written amendments
hereto and (iii) PRRP has not relied upon any such representations, warranties,
promises or guaranties or upon any statements made in any informational brochure
with respect to the Property and has entered into this Agreement after having
made and relied solely on the representations and warranties set forth herein
and on its own independent investigation, inspection, analysis, appraisal,
examination and evaluation of the facts and circumstances.
(b) Subject to the representations and warranties of AJV set forth explicitly
herein, PRRP agrees to accept the Property "AS IS" in its present condition,
subject to reasonable use, wear, tear and natural deterioration of the Property
between the Date Hereof and the Closing Date and further agrees that AJV shall
not be liable for any latent or patent defects in the Property.
(c) As used herein, references to the "actual knowledge "of PRRP shall refer to
the actual knowledge of Jerald Friedman or Daniel C. Slattery and the actual
knowledge of any other person or any knowledge which would be imputed to any of
those person[s] or to PRRP as a matter of law shall not be deemed to be covered
by the phrase "actual knowledge". PRRP acknowledges that it will inspect all of
the documents referred to in this Agreement as having been delivered or
furnished to PRRP for inspection on or prior to the expiration of the Due
Diligence Period. Notwithstanding anything to the contrary provided in this
Agreement, in the event PRRP shall have actual knowledge as of the time of
Closing that any of AJV's representations or warranties are false or misleading,
but shall elect to proceed to close this transaction notwithstanding such false
or misleading representation or warranty, PRRP shall be deemed to have waived
any claim it may have against AJV with respect to such misrepresentation or
breach of warranty unless such misrepresentation or breach of warranty was
intentional.
ARTICLE 6
Intentionally omitted
ARTICLE 7
COVENANTS OF PRRP
SECTION 7.01. Covenants of PRRP. PRRP acknowledges that all information in
respect of the Property furnished to PRRP is and has been so furnished on the
condition that PRRP maintain the confidentiality thereof. Accordingly, PRRP
shall, and shall cause its directors, officers and other personnel and
representatives to, hold in strict confidence, and not disclose to any other
party without the prior written consent of AJV until the Closing shall have been
consummated, any of the information in respect of the Property delivered to PRRP
by AJV or any of its agents, representatives or employees. In the event the
Closing does not occur and this Agreement is terminated, PRRP shall promptly
return to AJV all copies of all such information without retaining any copy
thereof or extract therefrom. Notwithstanding anything to the contrary
hereinabove set forth, PRRP may disclose such information (i) on a need-to-know
basis to its employees or members of professional firms serving it in connection
with this transaction, (ii) as is requested by a reputable institutional lender
in connection with its financing of the purchase of the Property, and (iii) as
may be required under applicable laws or regulations. Notwithstanding the
foregoing, AJV acknowledges that PRRP is a public company and therefore may
disclose such aspects of the transactions contemplated hereunder as PRRP's
counsel may determine is necessary or appropriate in order to comply with
federal and state securities laws.
ARTICLE 8
intentionally omitted
ARTICLE 9
INDEMNITIES
SECTION 9.01. Indemnification Generally. (a) Whenever it is provided in this
Agreement or in any agreement or document delivered pursuant hereto that a party
shall indemnify another party hereunder against liability or damages, such
phrase and words of similar import shall mean that the indemnifying party hereby
agrees to and does indemnify, defend and hold harmless the indemnified party and
such party's direct and indirect shareholders or partners and their respective
past, present and future officers, directors, employees and agents from and
against any and all claims, damages, losses, liabilities and expenses
(including, without being limited to, reasonable attorneys' fees and
disbursements) to which they or any of them may become subject or which may be
incurred by or asserted against any or all of them attributable to, arising out
of or in connection with the matters provided for in such provision.
(b) If any action, suit or proceeding is commenced, or if any claim, demand or
assessment is asserted in respect of which party is indemnified hereunder or
under any agreement or document delivered pursuant hereto, the indemnified party
shall give notice thereof to the indemnifying party and the indemnifying party
shall be entitled to control the defenses, compromise or settlement thereof, at
its own cost and expense, with counsel reasonably satisfactory to the
indemnified party, and the indemnified party shall cooperate fully and make
available to the indemnifying party such information under its control or in its
possession relating thereto and may, at its own cost and expense, participate in
such defense.
ARTICLE 10
BROKER
SECTION 10.01. Broker. (a) AJV represents and warrants to PRRP that it has
not hired, retained or dealt with any broker, finder, consultant or intermediary
in connection with the negotiation, execution or delivery of this Agreement or
the transaction contemplated hereby other than Sonnenblick Goldman (the
"Broker"). AJV will indemnify PRRP against liability arising out of any claim
that the aforesaid representation and warranty is untrue. AJV shall pay a
commission to the Broker pursuant to a separate agreement between AJV and the
Broker unless PRRP is obligated to pay same pursuant to Section 1.02 hereof, in
which case PRRP shall pay such commission.
(b) PRRP represents and warrants to AJV that it has not hired, retained or dealt
with any broker, finder, consultant or intermediary in connection with the
negotiation, execution or delivery of this Agreement or the transactions
contemplated hereby except the Broker. PRRP will indemnify AJV against
liability arising out of any claim that the aforesaid representation and
warranty is untrue.
(c) In the event of a claim for a broker's fee, finder's fee, commission or
other similar compensation in connection herewith, (i) PRRP, if such claim is
based upon any agreement alleged to have been made by PRRP, hereby agrees to
reimburse AJV for any liability, loss, cost, damage or expense (including
reasonable attorneys' and paralegals' fees and costs) which AJV may sustain or
incur by reason of such claim and (ii) AJV, if such claim is based upon any
agreement alleged to have been made by AJV, hereby agrees to indemnify, defend,
protect and hold PRRP harmless against any and all liability, loss, cost, damage
or expense (including reasonable attorneys' and paralegals' fees and costs)
which PRRP may sustain or incur by reason of such claim.
(d) The provisions of this Section 10.01 shall survive the Closing and any
termination of this Agreement.
ARTICLE 11
REMEDIES
SECTION 11.01. Remedies
Each of the parties hereto shall have such remedies as are provided for under
the terms of this Agreement or available to such party at law or in equity and
the event of a default by the other party in the performance of its obligations
under this Agreement.
ARTICLE 12
NOTICES
SECTION 12.01. Notices. Any and all notices, elections, demands, requests and
responses thereto permitted or required to be given under this Agreement shall
be in writing and personally delivered or sent by United States mail, registered
or certified mail, postage prepaid, return receipt requested, or sent by Federal
Express or similar nationally recognized overnight courier service, and
addressed as follows, and shall be deemed to have been given upon the date of
delivery (or refusal to accept delivery) at if to PRRP:
The Price REIT Renaissance Partnership, L.P.
c/o The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Fax No.: (213) 937-8175
with a copy to:
Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attn: William R. Lindsay, Esq.
Fax No.: (213) 229-6101
if to AJV:
Altamonte Joint Venture
c/o Rida Development Corporation
5444 Westheimer, Suite 1605
Houston, Texas 77056
Attention: Jacob Mitzner, Esq.
Facsimile Number: (713) 961-4969
with a copy to:
Altamonte Joint Venture
c/o Related Retail Corporation
625 Madison Avenue
New York, New York 10022
Attention: James M. Jarosik
Facsimile Number: (212) 593-5794
If to Escrowee:
Chicago Title Company
390 North Orange Avenue
Suite 150
Orlando, Florida 32802
Attention: Linda Wilder
Facsimile Number: (407) 872-1025
or such other address as each respective party may from time to time specify in
writing to the other in the manner aforesaid. Counsel for any party may give
notices to the other party with the same effect as if given by the party.
ARTICLE 13
MISCELLANEOUS PROVISIONS
SECTION 13.01. Acceptance of the Premises. The acceptance of the deed to the
Property by PRRP shall be deemed an acknowledgment by PRRP that AJV has fully
complied with all of its obligations hereunder and that AJV is discharged
therefrom and that AJV shall have no further obligation or liability with
respect to any of the agreements made by AJV in this Agreement, except for those
provisions of this Agreement which expressly provide that an obligation of AJV
shall survive the Closing
SECTION 13.02. Press Release. AJV and PRRP each agrees that it will not issue
any press release, advertisement or other public communication with respect to
this Agreement or the transactions contemplated hereby without the prior written
consent of the other party hereto, except to the extent required by law. If AJV
or PRRP is required by law to issue such a press release or other public
communication, at least one (1) business day prior to the issuance of the same
such party shall deliver a copy of the proposed press release or other public
communication to the other party hereto for its review.
SECTION 13.03. Assignment. Except as provided herein, AJV's interest under
this Agreement may not be assigned, encumbered or otherwise transferred whether
voluntarily, involuntarily, by operation of law or otherwise, in whole or in
part, without the prior written consent of PRRP. Any assignment without such
prior written consent shall be deemed null and void. Notwithstanding, the
foregoing, AJV shall have the right, without obtaining PRRP's consent, to assign
its rights under this Agreement for the purpose of implementing the terms and
provisions contained in Section 13.21. Such assignment may include the transfer
by AJV of its rights under this Agreement together with its ownership of the
Property to one or more existing or newly created entities owned or controlled
by AJV or its general partners or affiliates. Any such transfer of the Property
shall be made subject to this Agreement. Except with respect to a subsidiary of
PRRP, PRRP's interest under this Agreement may not be assigned, encumbered or
otherwise transferred whether voluntarily, involuntarily, by operation of law or
otherwise, in whole or in part, without the prior written consent of AJV.
Except with respect to a subsidiary of PRRP, any assignment without such prior
written consent shall be deemed null and void. Subject to and without limiting
the preceding four sentences, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
SECTION 13.04. Binding Effect. This Agreement does not constitute an offer to
make the contribution contemplated by this Agreement shall not bind AJV unless
and until AJV elects to be bound hereby by executing and delivering to PRRP an
executed original counterpart hereof in accordance with the terms of this
Agreement.
SECTION 13.05. Partial Invalidity. If any term or provision of this Agreement
or the application thereof to any persons or circumstances shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
SECTION 13.06. Recordation of Agreement. Neither AJV nor PRRP may record this
Agreement. The provisions of this Section 13.06 shall survive the termination
of this Agreement.
SECTION 13.07. Entire Agreement. This Agreement, together with the exhibits
hereto, constitutes the entire agreement of the parties regarding the
transaction specifically described herein and supersedes all prior or
contemporaneous agreements, understandings, representations and statements, oral
or written, between the parties hereto relating to the specific subject matter
hereof.
SECTION 13.08. Further Assurances. The parties agree to mutually execute and
deliver to each other, at the Closing, such other and further documents as may
be reasonably required by counsel for the parties to carry into effect the
purposes and intents of this Agreement, provided such documents are customarily
delivered in real estate transactions in the City of Orlando and do not impose
any material obligations upon any party hereunder except as set forth in this
Agreement.
SECTION 13.09. Enforcement. In the event either party hereto fails to perform
any of its obligations under this Agreement or in the event a dispute arises
concerning the meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses reasonably incurred by the other
party in enforcing or establishing its rights hereunder, including, without
being limited to, court costs and reasonable attorneys' fees.
SECTION 13.10. Amendment. This Agreement may not be modified, amended, altered
or supplemented except by a written instrument executed by the party to be
bound.
SECTION 13.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
agreements made and to be performed wholly within said State.
SECTION 13.12. Exhibits. All Exhibits referred to in this Agreement are
incorporated herein and made a part hereof as fully as if set forth herein.
SECTION 13.13. No Waiver. The failure of any party hereto to enforce at any
time any of the provisions of this Agreement shall in no way be construed as a
waiver of any of such provisions, or the right of any party thereafter to
enforce each and every such provision. No waiver of any breach of this Agreement
shall be held to be a waiver of any other or subsequent breach.
SECTION 13.14. Headings; Article, Section and Exhibit
References/Interpretation. The Article and Section headings used herein are for
reference purposes only and do not control or affect the meaning or
interpretation of any term or provision hereof. All reference in this Agreement
to Articles, Sections and Exhibits are to the Articles and Sections hereof and
the Exhibits annexed hereto. Whenever used herein, the term "including" shall
be deemed to be followed by the words "without limitation." Words used in the
singular number shall include the plural, and vice-versa, and any gender shall
be deemed to include each other gender.
SECTION 13.15. No Other Parties. No term or provision of this Agreement is
intended to be, or shall be, for the benefit of any person, firm, organization
or corporation not a party hereto, and no such other person, firm, organization
or corporation shall have any right or cause of action hereunder.
SECTION 13.16. Relationship. It is not intended by this Agreement to, and
nothing contained in this Agreement shall, create any partnership, joint
venture, financing arrangement or other agreement between PRRP and AJV. The
partnership agreement of PRRP, as amended from time to time, shall be the sole
document governing any partnership of the parties thereto.
SECTION 13.17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
SECTION 13.18. Time of the Essence. Time is of the essence in this Agreement
and with respect to all of its terms.
SECTION 13.19. Audit Cooperation. AJV hereby agrees to cooperate with PRRP, at
PRRP's sole cost and expense, in producing audited financial statements for the
Property for such periods as may be requested by PRRP. Such cooperation shall
include, without limitation, the execution and delivery by AJV to PRRP's
auditors of such confirmations and letters as such auditors may reasonably
require.
SECTION 13.20. Radon Gas Disclosure. Radon gas is a naturally occurring
radioactive gas that, when accumulated in a building in sufficient quantities
may present health risks to persons who are exposed to it over a period of time.
Levels of Radon that exceed federal and state guidelines have been found in
buildings in Florida. Additional information regarding Radon and Radon testing
may be obtained from the Seminole County Health Department.
SECTION 13.21. AJV's Waivers and Release. AJV understands and acknowledges
that New Lender is the general partner of PRRP. AJV and its constituent
partners, agents, representatives, and any of their successors and assigns
(collectively, "AJV Parties") forever generally and fully release and discharge
PRRP and New Lender from any and all rights, actions claims, demands, costs
contracts, allegations, liabilities, obligations, damages and causes of action,
whether known or unknown, suspected or unsuspected, whether in law or equity,
which the AJV Parties, and each of them, had or now has or may have against PRRP
or New Lender, from the beginning of time relating to the relationship between
PRRP, AJV Parties and New Lender in respect of the Existing Loan, as amended,
including, without limitation, (i) any right to object to a foreclosure or deed
in lieu of foreclosure on the grounds that New Lender or its successors or
assigns could acquire the Property or (ii) any claims or rights regarding
fiduciary duties which may be owed to AJV or the AJV Parties by the New Lender
by virtue of AJV's acceptance of Partnership Units in PRRP or otherwise
(collectively, "Released Claims").
It is the intention of the parties hereto in executing this Agreement that this
Agreement shall be effective as a bar, as to each and every one of the AJV
Parties, and each of them, with regard to the Released Claims. In furtherance
of this intention, the AJV Parties hereby expressly waive any and all rights and
benefits conferred by the provisions of Section 1542 of the California Civil
Code, and by any similar provision of state or Federal law now in effect or in
effect in the future, and expressly consent that this Agreement shall be given
full force and effect according to each and all of its express terms and
conditions, including those relating to unknown and unsuspected claims, demands
and causes of action specified above. Section 1542 of the California Civil Code
provides:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
The provisions of this Section 13.21 shall survive the Closing and any
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.
PRRP: AJV:
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and a general partner
its general partner therein
By: /JOSEPH KORNWASSER/ By: RIDA Realty Investments of
------------------- Florida, Inc., a Florida
Name: Joseph Kornwasser corporation and a general
Title: President partner therein
By: /IRA MITZNER/
-------------
Name: Ira Mitzner
Title: Vice President
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By: /IRA MITZNER/
-------------
Name: Ira Mitzner
Title: Vice President
Exhibit A
DESCRIPTION OF LAND
Exhibit A-2
CONSIDERATION
The aggregate number of Partnership Units (rounded down to the nearest whole
number) that AJV shall be entitled to receive on the Closing Date shall be
267,000.
Exhibit B
ESCROW PROVISIONS
(a) The parties hereto agree that:
(i) The duties of Escrowee are only as herein specifically provided, and except
for the provisions of Section (c) hereof, are purely ministerial in nature, and
Escrowee shall incur no liability whatever except for its willful misconduct or
gross negligence;
(ii) In the performance of its duties hereunder, Escrowee shall be entitled to
rely upon any document, instrument or signature believed by it to be genuine and
signed by any of the other parties or their successors;
(iii) Escrowee may assume that any person purporting to give notice or
instructions in accordance with the provisions hereof has been duly authorized
to do so;
(iv) Escrowee shall not be bound by any modification, cancellation or rescission
of this Agreement unless in writing and signed by AJV and PRRP;
(v) Except as provided in (i) hereof, AJV and PRRP shall and hereby do jointly
and severally indemnify Escrowee and hold it harmless from and against any loss,
liability, cost or expenses incurred in connection herewith, including without
limitation, reasonable attorneys' fees and disbursements, incurred without
willful misconduct or gross negligence on the part of Escrowee, arising out of
or in connection with its acceptance of, or the performance of its duties and
obligations under, this Agreement, as well as the reasonable costs and expenses
of defending itself against any claim or liability arising out of or relating to
this Agreement; and
(vi) AJV and PRRP each hereby release Escrowee from any liability for or in
connection with any act done or omitted to be done by Escrowee in good faith in
the performance of its duties hereunder without willful misconduct or gross
negligence on the part of Escrowee. Nor shall Escrowee be liable for any loss
or impairment of funds while those funds are in the course of collection or
while those funds are on deposit if such loss or impairment results from the
failure, insolvency or suspension of the financial institution in which the
funds are deposited.
(c) Escrowee is acting as stakeholder only with respect to any escrowed funds.
If there is any dispute as to whether Escrowee is obligated to deliver such
funds or as to whom said funds are to be delivered, Escrowee shall not be
required to make any delivery, but in such event Escrowee may hold the same
until receipt by Escrowee of written authorization signed by AJV and PRRP
directing the disposition of the funds and any interest accrued thereon until a
final determination of the rights of the parties in an appropriate proceeding.
If such written authorization is not given, or proceedings for such
determination are not begun within thirty (30) days after a dispute arises and
diligently continued, Escrowee may, bring an appropriate action or proceeding
for leave to deposit such funds and any interest accrued thereon in a court of
competent jurisdiction pending such determination. Escrowee shall be reimbursed
for all reasonable costs and expenses of such action or proceeding including,
without limitation, attorney's fees and disbursements, by the party determined
not be entitled to such funds, or if such funds are split between the AJV and
PRRP, such costs incurred by Escrowee shall be divided between and paid by AJV
and PRRP in inverse proportion based upon the amount of such funds received by
each. Upon making delivery of such funds and interest accrued thereon in the
manner provided in this Agreement, Escrowee shall have no further liability
hereunder.
Exhibit C
Investment Representation Letter
August , 1997
The Price REIT Renaissance Partnership, L.P.
c/o The PRICE REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
Attn.: Joseph Kornwasser
Ladies and Gentlemen:
The undersigned hereby represents, warrants, covenants, acknowledges and agrees
as follows:
(a) The undersigned is acquiring units of limited partnership (the "Partnership
Units") in The Price REIT Renaissance Partnership, L.P., a California limited
partnership (the "Partnership"), for the undersigned's own account for the
purpose of investment and not as a nominee or agent for any person, and not with
a view to the resale, pledge or distribution thereof.
(b) The Partnership Units have not been registered under the Securities Act of
1933, as amended (the "Securities Act").
(c) Except as otherwise provided in the partnership agreement of the
Partnership, as same may be amended or modified from time to time (the
"Partnership Agreement"), the Partnership Units, or any portion thereof, may
not, directly or indirectly, be offered, transferred, sold, assigned, pledged,
hypothecated or otherwise disposed of (each, a "Transfer") by the undersigned,
other than pursuant to the exchange rights with respect to the Partnership Units
as set forth in the Partnership Agreement.
(d) This letter is being delivered in connection with the that certain
Contribution Agreement dated as of August 28, 1997 by and between the
Partnership and the undersigned (the "Contribution Agreement") and shall be
construed and interpreted consistently therewith. The undersigned has read and
reviewed the information which the Contribution Agreement describes as the
Disclosure Statement. The undersigned acknowledges that the undersigned
understands the restrictions on transfer described in such information.
(e) At the time of issuance or transfer of the Partnership Units to the
undersigned, the undersigned is (check all appropriate boxes):
a partnership, corporation, Massachusetts or similar business trust or an
employee benefit plan that has total assets in excess of $5,000,000 and was not
formed for the purpose of acquiring the Partnership Units; or
a natural person whose individual net worth, or joint net worth with that
person's spouse, exceeds $1,000,000; or
a natural person who had an individual income in excess of $200,000 in each
of the two most recent years or joint income with that person's spouse in excess
of $300,000 in each of those years and has a reasonable expectation of reaching
the same income level in the current year; or
a trust with total assets in excess of $5,000,000, not formed for the
purpose of acquiring the Partnership Units, whose issuance or transfer of such
shares is directed by a sophisticated person as described in Rule 506(b)(2)(ii)
under the Securities Act; or
an entity in which all of the equity owners are persons or entities that
meet the descriptions set forth above.
(f) The undersigned is knowledgeable, sophisticated and experienced in business
and financial matters and fully understands the limitations on transfer of the
Partnership Units described in this letter and the Partnership Agreement. The
undersigned is able to bear the economic risk of holding the Partnership Units
for an indefinite period and is able to afford the complete loss of his or its
investment in the Partnership Units; the undersigned has been given the
opportunity to obtain any additional information or documents and to ask
questions and receive answers about such documents, the Partnership and the
business and prospects of the Partnership which the undersigned deems necessary
to evaluate the merits and risks related to his or its investment in the
Partnership Units.
(g) The undersigned acknowledges that he, she or it has been advised that (i)
except as expressly provided in the Partnership Agreement, the Partnership Units
must be held indefinitely, and the undersigned must continue to bear the
economic risk of the investment in the Partnership Units unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available, (ii) it is not anticipated that there will be any
public market for the Partnership Units, (iii) Rule 144 promulgated under the
Securities Act is not available with respect to the sale of any securities of
the Partnership, and the Partnership has made no covenant to make such Rule
available, (iv) a restrictive legend in the form hereafter set forth shall be
placed on the certificates or instruments representing the Partnership Units,
and (v) a notation shall be made in the appropriate records of the Partnership
indicating that the Partnership Units are subject to restrictions on transfer.
(h) Each certificate or instrument representing Partnership Units shall bear the
following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
WITH THE PROVISIONS OF AN AGREEMENT OF LIMITED PARTNERSHIP, DATED AS OF August
[21], 1997, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME (A COPY OF
WHICH IS ON FILE WITH THE PRICE REIT, INC.). EXCEPT AS OTHERWISE PROVIDED IN
SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1993, AS AMENDED (THE "SECURITIES ACT") OR (B) IF THE OPERATING PARTNERSHIP HAS
BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT AND THE RULES AND
REGULATIONS IN EFFECT THEREUNDER."
(i) The undersigned has reviewed the Partnership Agreement, and understands that
the undersigned will be bound by its terms. The undersigned further confirms
that upon the execution and delivery of the Partnership Agreement or an
amendment thereto, such agreement will be a valid and binding obligation of the
undersigned, enforceable in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or affecting generally the enforcement of creditors' rights and
general principles of equity.
The undersigned acknowledges that any sale, pledge or transfer of the
Partnership Units in violation of this letter will be null and void and the
certificates representing the Partnership Units will bear an appropriate
restrictive legend. The undersigned also acknowledges that it is impossible to
measure in money the damages which will accrue to the Partnership by reason of
a failure of the undersigned to comply with the provisions of this letter.
Therefore, if the Partnership shall institute any action or proceeding to
enforce the provisions hereof, the undersigned agrees that the Partnership shall
be entitled to injunctive relief, and the undersigned waives, and shall not
allege, any claim or defense to such action or proceeding, including, without
limitation, any claim or defense that the undersigned has an adequate remedy at
law.
Very truly yours,
ALTAMONTE JOINT VENTURE,
a Florida general partnership
By: RIDA Renaissance Limited Partnership,
a Florida limited partnership and a general
partner therein
By: RIDA Realty Investments of Florida,
Inc., a Florida corporation and a
general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Exhibit D
SPACE LEASES
301 East Altamonte Drive:
Space No. Lessee
- --------- ------
- - - - Vision Works
303 E. Altamonte Drive:
Space No. Lessee
- --------- ------
1000 Boater's World
1010 Rida Realty Investments of Florida
1040 Leather Center
1100 Dan Howard Maternity
1120 Gingiss Formalwear
1140 Photomagic
1180 Orlando Magic
1200 Upton's
1250 Blockbuster Video
1300 Bookstop
1425 Artizan Hair Salon
1550 Differents
1600 Loudon Jewelers
1700 Factory Brand Shoes
1800 General Cinema
355 East Altamonte Drive:
Space No. Lessee
- --------- ------
1000 Casual Male
1500 Dreyfus
1700 Mrs. McCorvey's Pies
375 East Altamonte Drive:
Space No. Lessee
- --------- ------
1000 Ross Stores
1600 Bell South
1750 Michael's Arts and Crafts
397 East Altamonte Drive:
Space No. Lessee
- --------- ------
1000 Chili's
1200 Bagel Town
1400 Ann's Tailors
1500 Portfolio Furniture
Exhibit E
SECURITY DEPOSITS
TENANT SECURITY DEPOSIT
- ------ ----------------
Ann's Tailors 1,507.50
Artizan Beauty Salon 3,237.50
Bagel Town 3,098.75
BellSouth Mobility - 0 -
Dan Howard Maternity 2,000.00
Differents 2,477.05
Leather Center 9,900.00
Loudoun Jewelers 1,900.00
Mrs. McCorvey's Pies 2,187.00
Orlando Magic/Magic Fanatic 3,875.00
Photo Magic of Altamonte 1,900.00
Yum Yum's Ice Cream 2,980.91
------------
Total Security Deposits $ 35,063.71
Exhibit F
SERVICE CONTRACTS
1. Contract between Altamonte Joint Venture and The Wackenhut Corporation.
2. Contract between Altamonte Joint Venture and Sundown Sweeping Services.
3. Contract between Altamonte Joint Venture and Answer Tel Answering Service.
4. Contract between Altamonte Joint Venture and R & J Associates Landscaping
and Lawncare.
5. Contract between Altamonte Joint Venture and Waste Management of Orlando.
6. Contract between Altamonte Joint Venture and Nutech Engineering.
7. Contract between Altamonte Joint Venture and Fain Pumping Systems.
Exhibit G
LICENSES AND PERMITS
1. Certificates of Occupancy: (Please Note: All Certificates of Occupancy are
held by each of the tenant occupants in its respective names and are not held by
Landlord).
301 East Altamonte Drive: Vision Works
303 E. Altamonte Drive:
Space No. Current Holder
- --------- --------------
1000 Boater's World
1010 Rida Realty Investments of Florida
1040 Leather Center
1100 Dan Howard Maternity
1120 Gingiss Formalwear
1140 Photomagic
1180 Orlando Magic
1200 Upton's
1250 Blockbuster Video
1300 Bookstop
1425 Artizan Hair Salon
1550 Differents
1600 Loudon Jewelers
1700 Factory Brand Shoes
1800 General Cinema
355 East Altamonte Drive:
Space No. Current Holder
- --------- --------------
1000 Casual Male
1500 Dreyfus
1700 Mrs. McCorvey's Pies
375 East Altamonte Drive:
Space No. Current Holder
- --------- --------------
1000 Ross Stores
1600 Bell South
1750 Michael's Arts and Crafts
397 East Altamonte Drive:
Space No. Current Holder
- --------- --------------
1000 Chili's
1200 Bagel Town
1400 Ann's Tailors
1500 Portfolio Furniture
2. Sales Tax License, Certificate Number 69-01-038888-82-2 Issued by Florida
Department of Revenue.
Exhibit H
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that Altamonte Joint Venture, a Florida general
partnership, having an address at c/o Rida Development Corporation, 5444
Westheimer, Suite 1605, Houston, Texas 77056 ("AJV"), for Ten Dollars ($10.00)
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, paid by The Price REIT Renaissance Partnership, L.P., a
California limited partnership, having an address at 145 South Fairfax Avenue,
Fourth Floor, Los Angeles, CA 90036 ("PRRP"), has bargained and sold and by
these presents does contribute, grant and convey unto PRRP without any express
or implied representation or warranty, its successors and assigns, all of AJV's,
right, title and interest in and to the fixtures, equipment and personal
property listed in Schedule 1 attached hereto and made a part hereof and all
right, title and interest of AJV in and to all other fixtures, equipment and
personal property, if any, owned by AJV and Attached to and used in the
operation of certain property known as and located at the Renaissance Centre,
355 East Altamonte Drive, Altamonte Springs, Florida (all of the foregoing being
hereinafter collectively referred to as the "Personal Property").
TO HAVE AND HOLD the Personal Property unto PRRP, its successors and assigns,
forever.
IN WITNESS WHEREOF, AJV has duly executed this Bill of Sale as of the day
of August, 1997.
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and a general partner
its general partner therein
By: By: RIDA Realty Investments of
Name: Florida, Inc., a Florida
Title: corporation and a general
partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1
to
Bill of Sale
Exhibit I
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS AGREEMENT, made this day of August, 1997, by and between Altamonte
Joint Venture, a Florida general partnership ("Assignor"), and The Price REIT
Renaissance Partnership, L.P., a California limited partnership ("Assignee").
W I T N E S S E T H
WHEREAS, by that certain Contribution Agreement (the "Contribution Agreement")
dated as of August 28, 1997, by and between Assignor and Assignee, Assignor has
agreed to contribute to Assignee on the Closing Date (as defined in the
Contribution Agreement), certain property known as the Renaissance Centre
located in Altamonte Springs, Florida, and more particularly described in the
Contribution Agreement; and
WHEREAS, Assignor desires to assign to Assignee as of the Closing Date
Assignor's interest in each and all of those certain leases set forth in
Schedule 1 annexed hereto (the "Leases"), and Assignee desires to accept such
assignment and assume the obligations of the landlord under the Leases as of the
Closing Date;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Assignor hereby assigns, sets over and transfers unto Assignee to have and
to hold from and after the date hereof all of the right, title and interest of
Assignor in, to and under the Leases, including, without limitation, all of the
right, title and interest of Assignor in and to any security deposits, prepaid
rent or other sums held by Assignor as the landlord under any of the Leases, and
Assignee hereby accepts the within assignment and assumes and agrees with
Assignor to perform and comply with and to be bound by all the terms, covenants,
agreements, provisions and conditions of the Leases on the part of the landlord
thereunder to be performed on and after the date hereof, in the same manner with
the same force and effect as if Assignee had originally executed the Leases as
landlord.
2. Assignor hereby unconditionally, absolutely and irrevocably agrees to
indemnify and hold Assignee harmless of, from and against any and all costs,
claims, obligations, damages, penalties, causes of action, losses, injuries,
liabilities and expenses, including, without limitation, reasonable attorneys'
fees, arising out of, in connection with or accruing under the Leases before the
date hereof.
3. Assignee hereby unconditionally, absolutely and irrevocably agrees to
indemnify and hold Assignor harmless of, from and against any and all costs,
claims, obligations, damages, penalties, causes of action, losses, injuries,
liabilities and expenses, including, without limitation, reasonable attorneys'
fees, arising out of, in connection with or accruing under the Leases on and
after the date hereof including, but not limited to, any such liabilities or
expenses arising in connection with any security deposits, prepaid rent or other
sums held by Assignee as the landlord under any of the Leases.
4. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and a general
its general partner partner therein
By: By: RIDA Realty Investments of
Name: Florida, Inc., a Florida
Title: corporation and a general
partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1
to
Assignment and Assumption of Leases
Exhibit J
ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
THIS AGREEMENT, made this day of August, 1997, by and between Altamonte
Joint Venture, a Florida general partnership ("Assignor"), and The Price REIT
Renaissance Partnership, L.P., a California limited partnership ("Assignee").
W I T N E S S E T H
WHEREAS, by that certain Contribution Agreement (the "Contribution Agreement")
dated as of August 28, 1997, by and between Assignor and Assignee, Assignor has
agreed to contribute to Assignee on the Closing Date (as defined in the
Contribution Agreement), certain property known as and located at the
Renaissance Centre located in Altamonte Springs, Florida, and more particularly
described in the Contribution Agreement (the "Property"); and
WHEREAS, Assignor desires to assign to Assignee as of the Closing Date
Assignor's interest in each and all of those certain service, maintenance,
supply and management contracts set forth on Schedule 1 annexed hereto (the
"Service Contracts"), and Assignee desires to accept such assignment and assume
the obligations of Assignor under the Service Contracts as of the Closing Date;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Assignor hereby assigns, sets over and transfers unto Assignee to have and to
hold from and after the date hereof all of the right, title and interest of
Assignor in, to and under the Service Contracts, and Assignee hereby accepts the
within assignment and assumes and agrees with Assignor to perform and comply
with and to be bound by all the terms, covenants, agreements, provisions and
conditions of the Service Contracts on the part of the owner of the Property
thereunder to be performed on and after the date hereof, in the same manner and
with the same force and effect as if Assignee had originally executed the
Service Contracts as the owner of the Property.
2. Assignor hereby unconditionally, absolutely and irrevocably agrees to
indemnify and hold Assignee harmless of, from and against any and all costs,
claims, obligations, damages, penalties, causes of action, losses, injuries,
liabilities and expenses, including, without limitation, reasonable attorneys'
fees, arising out of, in connection with or accruing under the Service Contracts
before the date hereof.
3. Assignee hereby unconditionally, absolutely and irrevocably agrees to
indemnify and hold Assignor harmless of, from and against any and all costs,
claims, obligations, damages, penalties, causes of action, losses, injuries,
liabilities and expenses, including, without limitation, reasonable attorneys'
fees, arising out of, in connection with or accruing under the Service Contracts
on and after the date hereof.
4. This Agreement shall not be construed as an express or implied
representation or warranty by Assignor as to the transferability of the Service
Contracts, and Assignor shall have no liability to Assignee in the event that
any or all of the Service Contracts (i) are not transferable to Assignee or (ii)
are canceled or terminated by reason of this assignment or any acts of Assignee.
5. This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and a general partner
its general partner therein
By: By: RIDA Realty Investments of
Name: Florida, Inc., a Florida
Title: corporation and a general
partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1
to
Assignment and Assumption of Service Contracts
Exhibit K
ASSIGNMENT AND ASSUMPTION OF LICENSES AND PERMITS
THIS AGREEMENT, made this day of August, 1997, by and between Altamonte
Joint Venture, a Florida general partnership ("Assignor"), and The Price REIT
Renaissance Partnership, L.P., a California limited partnership ("Assignee").
W I T N E S S E T H :
WHEREAS, by that certain Contribution Agreement (the "Contribution Agreement")
dated as of August 28, 1997, by and between Assignor and Assignee, Assignor has
agreed to contribute to Assignee on the Closing Date (as defined in the
Contribution Agreement), certain property known as and located at the
Renaissance Centre located in Altamonte Springs, Florida and more particularly
described in the Contribution Agreement; and WHEREAS, Assignor desires to assign
and quitclaim to Assignee as of the Closing Date Assignor's interest in those
certain guaranties and warranties listed on Schedule 1 annexed hereto (the
"licenses and Permits"), and Assignee desires to accept such assignment and
assume the obligations, if any, of the holder, under the Licenses and Permits as
of the Closing Date;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Assignor does hereby assign and quitclaim unto Assignee to have and to hold
from and after the date hereof all of the right, title and interest of Assignor,
if any, in, to and under the Licenses and Permits, and Assignee hereby accepts
the within assignment and assumes the obligations, if any, of the holder under
the Licenses and permits as of the Closing Date.
2. This Agreement shall not be construed as an express or implied
representation or warranty by Assignor as to the transferability of the Licenses
and Permits, and Assignor shall have no liability to Assignee in the event that
any or all of the Licenses or Permits (i) are not transferable to Assignee or
(ii) are canceled or revoked by reason of this Assignment or any acts of
Assignee.
3. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and general partner
its general partner therein
By: By: RIDA Investments of Florida,
Name: Inc., a Florida corporation
Title: and a general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1
to
Assignment and Assumption of Licenses and Permits
Exhibit L
ASSIGNMENT OF GUARANTEES AND WARRANTIES
THIS AGREEMENT, made this day of August, 1997, by and between Altamonte
Joint Venture, a Florida general partnership ("Assignor"), and The Price REIT
Renaissance Partnership, L.P., a California limited partnership ("Assignee").
W I T N E S S E T H :
WHEREAS, by Contribution Agreement (the "Contribution Agreement") dated as of
August 28, 1997, by and between Assignor and Assignee, Assignor has agreed to
contribute to Assignee on the Closing Date (as defined in the Contribution
Agreement), certain property known as the Renaissance Centre located in
Altamonte Springs, Florida and more particularly described in the Contribution
Agreement; and
WHEREAS, Assignor desires to assign and quitclaim to Assignee as of the Closing
Date Assignor's interest in those certain guaranties and warranties listed on
Schedule 1 annexed hereto (the "Guarantees and Warranties") and Assignee desires
to accept such assignment and assume the obligations, if any, of the holder,
under the Guarantees and Warranties as of the Closing Date;
NOW THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agrees as follows:
1. Assignor does hereby assign quitclaim unto Assignee to have and to hold
from and after the date hereof all of the right, title and interest of Assignor,
if any, in, to and under the Guarantees and Warranties, and Assignee hereby
accepts the within assignment and assumes the obligations, if any, of the holder
under the Guarantees and Warranties as of the Closing Date.
2. This Agreement shall not be construed as an express or implied
representation or warranty by Assignor as to the transferability of the
Guarantees and Warranties, and Assignor shall have no liability to Assignee in
the event that any or all of the Guarantees or Warranties (i) are not
transferable to Assignee or (ii) are canceled or revoked by reason of this
assignment or any acts or Assignee.
3. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
The Price REIT Renaissance Partnership, ALTAMONTE JOINT VENTURE,
L.P., a Florida general partnership
a California limited partnership
By: RIDA Renaissance Limited
By: THE PRICE REIT, INC., Partnership, a Florida limited
a Maryland corporation, partnership and a general partner
its general partner therein
By: By: RIDA Realty Investments of
Name: Florida, Inc., a Florida
Title: corporation and a general
partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1
to
Assignment of Guarantees and Warranties
Exhibit M
August , 1997
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Attn:
Re: Renaissance Centre
Gentlemen:
This is to inform you that Altamonte Joint Venture, a Florida general
partnership, has this day contributed the captioned premises to The Price REIT
Renaissance Partnership, L.P., a California limited partnership having an
address at 145 South Fairfax Avenue, Fourth Floor, Los Angeles, CA 90036, and
has transferred to it all leases, security deposits and prepaid rents, if any,
and other matters relating to your tenancy at the captioned premises.
After the date hereof, you should pay all rent and other amounts and direct all
notices and request regarding your tenancy at the captioned premises to The
Price REIT Renaissance Partnership, L.P., c/o The Price REIT, Inc., 145 South
Fairfax Avenue, Fourth Floor, Los Angeles, CA 90036, Attn: Property Management
Department.
Sincerely,
ALTAMONTE JOINT VENTURE,
a Florida general partnership
By: RIDA Renaissance Limited Partnership,
a Florida limited partnership
and a general partner therein
By: RIDA Realty Investments of
Florida, Inc., a Florida corporation
and a general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Exhibit N
SPECIAL WARRANTY DEED
Exhibit O
INSURANCE BINDER
Exhibit P
Estoppel Certificate
Exhibit Q
Brokerage Agreements
None
Exhibit R
FIRPTA Affidavit
NON-FOREIGN STATUS AFFIDAVIT
(Partnership)
To inform The Price REIT Renaissance Partnership, L.P., a California limited
partnership (the "Transferee") that withholding of tax under Section 1445 of the
Internal Revenue Code of 1986, as amended ("Code") will not be required upon the
transfer of certain U.S. real property to the Transferee by Altamonte Joint
Venture, a Florida general partnership (the "Transferor"), the undersigned
hereby certifies the following on behalf of the Transferor:
1. The Transferor is not a foreign person (as that term is defined in Code
Section 1445);
2. The Transferor's U.S. taxpayer identification number is
; and
3. The Transferor has a permanent place of business in .
The Transferor understands that this Certification may be disclosed to the
Internal Revenue Service by the Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.
Under penalty of perjury, I declare that I have examined this Certification and
to the best of my knowledge and belief it is true and correct, and I further
declare that I have authority to sign this document on behalf of the Transferor.
August , 1997.
TRANSFEROR:
ALTAMONTE JOINT VENTURE
a Florida general partnership
By: RIDA Renaissance Limited Partnership,
a Florida limited partnership and
a general partner therein
By: RIDA Realty Investments of
Florida, Inc., a Florida corporation
and a general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
Schedule 1.05
Vanilla Shell Construction Provisions
Schedule 4.04
Tax Proration Exceptions
Tenant Prorata Share of Center
Chili's 2.21%
General Cinema 12.34%
Portfolio Furniture 11.44%
Ross Stores 8.85%
Uptons 22.13%
Vision Works 2.49%
Total Prorata Property Tax 59.46%
Thus, the tax proration is to be calculated on 40.54% of the gross amount of
property taxes due annually.
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
a California limited partnership
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN
FORM AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE
EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION
MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
dated as of August 22, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS 1
ARTICLE 2 ORGANIZATIONAL MATTERS 14
Section 2.1. Organization 14
Section 2.2. Name 14
Section 2.3. Registered Agent; Principal Office 14
Section 2.4. Power of Attorney 14
Section 2.5. Term 16
ARTICLE 3 PURPOSE 16
Section 3.1. Purpose and Business 16
Section 3.2. Powers 16
Section 3.3. Partnership Only for Purposes Specified 16
Section 3.4. Representations and Warranties by the Limited Partners
17
ARTICLE 4 CAPITAL CONTRIBUTIONS 18
Section 4.1. Capital Contributions of the Initial Partners18
Section 4.2. Additional Limited Partners 19
Section 4.3. Loans by Third Parties 19
Section 4.4. Additional Funding and Capital Contributions19
A. General 19
B. Notice of Additional Funds Requirement 19
C. General Partner Loans 19
D. Participating Partner Loans. 20
Section 4.5. No Interest; No Return 20
ARTICLE 5 DISTRIBUTIONS 20
Section 5.1. Requirement and Characterization of Distributions 20
Section 5.2. Distributions in Kind 20
Section 5.3. Amounts Withheld 20
Section 5.4. Distributions Upon Liquidation 21
Section 5.5. Restricted Distributions 21
ARTICLE 6 ALLOCATIONS 21
Section 6.1. Timing and Amount of Allocations of Net Income and Net
Loss 21
Section 6.2. General Allocations 21
Section 6.3. Additional Allocation Provisions 21
A. Regulatory Allocations 21
(a). Minimum Gain Chargeback 21
(b). Partner Minimum Gain Chargeback 22
(c). Nonrecourse Deductions and Partner Nonrecourse
Deductions 22
(d). Qualified Income Offset 22
(e). Gross Income Allocation 22
(f). Limitation on Allocation of Net Loss 23
(g). Section 754 Adjustment 23
(h). Curative Allocations 23
B. Allocation of Excess Nonrecourse Liabilities23
Section 6.4. Tax Allocations 23
A. In General 23
B. Allocations Respecting Section 704(c) Revaluations24
Section 6.5. Other Provisions 24
A. Other Allocations Upon Change in Law 24
B. Consistent Tax Reporting 24
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS 24
Section 7.1. Management 24
Section 7.2. Certificate of Limited Partnership 27
Section 7.3. Restrictions on General Partner's Authority 28
Section 7.4. Reimbursement of the General Partner 29
Section 7.5. Other Business of General Partner 30
Section 7.6. Contracts with Affiliates 31
Section 7.7. Indemnification 31
Section 7.8. Liability of the General Partner 33
Section 7.9. Other Matters Concerning the General Partner34
Section 7.10. Title to Partnership Assets 34
Section 7.11. Reliance by Third Parties 35
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS 35
Section 8.1. Limitation of Liability 35
Section 8.2. Management of Business 35
Section 8.3. Outside Activities of Limited Partners 36
Section 8.4. Return of Capital 36
Section 8.5. Rights of Limited Partners Relating to the Partnership
36
Section 8.6. Intentionally Omitted 37
Section 8.7. Partnership Right to Call Limited Partner Interests 37
Section 8.8. Other Redemptions 37
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS 38
Section 9.1. Records and Accounting 38
Section 9.2. Fiscal Year 38
Section 9.3. Reports 38
ARTICLE 10 TAX MATTERS 39
Section 10.1. Preparation of Tax Returns 39
Section 10.2. Tax Elections 39
Section 10.3. Tax Matters Partner 39
Section 10.4. Withholding 40
ARTICLE 11 TRANSFERS AND WITHDRAWALS 41
Section 11.1. Transfer 41
Section 11.2. Transfer of General Partner's Partnership Interest 41
Section 11.3. Limited Partners' Rights to Transfer 42
A. General 42
(1) General Partner Right of First Refusal 42
(2) Qualified Transferee 42
(3) Minimum Transfer Restriction 42
(4) Transferee Agreement to Effect a Redemption 42
(5) No Further Transfers 43
(6) Exception for Permitted Transfers 43
B. Incapacity 43
C. Opinion of Counsel 43
D. Adverse Tax Consequences 43
Section 11.4. Substituted Limited Partners 44
Section 11.5. Assignees 44
Section 11.6. General Provisions 45
ARTICLE 12 ADMISSION OF PARTNERS 46
Section 12.1. Admission of Successor General Partner 46
Section 12.2. Admission of Additional Limited Partners 47
Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership 47
Section 12.4. Admission of Initial Limited Partners 48
Section 12.5. Limit on Number of Partners 48
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION 48
Section 13.1. Dissolution 48
Section 13.2. Winding Up 49
Section 13.3. Deemed Distribution and Recontribution 50
Section 13.4. Rights of Limited Partners 50
Section 13.5. Notice of Dissolution 50
Section 13.6. Cancellation of Certificate of Limited Partnership 51
Section 13.7. Reasonable Time for Winding-Up 51
ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS;
MEETINGS 51
Section 14.1. Procedures for Actions and Consents of Partners51
Section 14.2. Amendments 51
Section 14.3. Meetings of the Partners 51
ARTICLE 15 GENERAL PROVISIONS 52
Section 15.1. Addresses and Notice 52
Section 15.2. Titles and Captions 52
Section 15.3. Pronouns and Plurals 53
Section 15.4. Further Action 53
Section 15.5. Binding Effect 53
Section 15.6. Waiver 53
Section 15.7. Counterparts 53
Section 15.8. Applicable Law 53
Section 15.9. Entire Agreement 54
Section 15.10. Invalidity of Provisions 54
Section 15.11. Limitation to Preserve REIT Status 54
Section 15.12. No Partition 55
Section 15.13. No Third-Party Rights Created Hereby 55
EXHIBIT A PARTNERS AND ADDRESSES 57
EXHIBIT B 58
EXHIBIT C NOTICE OF REDEMPTION 1
EXHIBIT D FORM OF PARTNER SCHEDULE 1
EXHIBIT E FORM OF PARTNERSHIP UNIT CERTIFICATE 1
AGREEMENT OF LIMITED PARTNERSHIP
OF
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF THE PRICE REIT RENAISSANCE
PARTNERSHIP, L.P., dated as of August 22, 1997 (the "Effective Date"), is
entered into by and among The PRICE REIT, Inc., a Maryland corporation, as the
General Partner, and the Persons whose names are set forth on Exhibit A as
attached hereto, as the Limited Partners, together with any other Persons who
become Partners in the Partnership as provided herein.
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the California Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"Actions" has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.4.A hereof.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 4.2 or Section 4.4.D and Section 12.2
hereof and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:
(a) decrease such deficit by any amounts that such Partner is
obligated to restore pursuant to this Agreement or by operation of law upon
liquidation of such Partner's Partnership Interest or is deemed to be
obligated to restore pursuant to the penultimate sentence of each of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) increase such deficit by the items described in Regulations
Section 1.704-1 (b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of "Adjusted Capital Account Deficit" is intended
to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect
to any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Agreement of Limited Partnership of The Price REIT
Renaissance Partnership, L.P., as it may be amended, supplemented or restated
from time to time.
"Appraisal" means, with respect to any assets, the written opinion of an
independent third party experienced in the valuation of similar assets, selected
by the General Partner in good faith. Such opinion may be in the form of an
opinion by such independent third party that the value for such property or
asset as set by the General Partner is fair, from a financial point of view, to
the Partnership.
"Assignee" means a Person to whom one or more Partnership Units have been
Transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.5
hereof.
"Available Cash" means, with respect to any period for which such
calculation is being made,
(a) the sum, without duplication, of:
(1) the Partnership's Net Income or Net Loss (as the case may
be) for such period,
(2) Depreciation and all other noncash charges to the extent
deducted in determining Net Income or Net Loss for such period,
(3) the amount of any reduction in reserves of the Partnership
referred to in clause (b)(6) below (including, without limitation,
reductions resulting because the General Partner determines such
amounts are no longer necessary),
(4) the excess, if any, of the net cash proceeds from the sale,
exchange, disposition, financing or refinancing of Partnership
property for such period over the gain (or loss, as the case may be)
recognized from such sale, exchange, disposition, financing or
refinancing during such period (excluding Terminating Capital
Transactions), and
(5) all other cash received (including amounts previously
accrued as Net Income and amounts of deferred income) or any net
amounts borrowed by the Partnership for such period that was not
included in determining Net Income or Net Loss for such period;
(b) less the sum, without duplication, of:
(1) all principal debt payments made during such period by the
Partnership,
(2) capital expenditures made by the Partnership during such
period,
(3) investments in any entity (including loans made thereto),
(4) all other expenditures and payments not deducted in
determining Net Income or Net Loss for such period (including amounts
paid in respect of expenses previously accrued),
(5) any amount included in determining Net Income or Net Loss
for such period that was not received by the Partnership during such
period,
(6) the amount of any increase in reserves (including, without
limitation, working capital reserves) established during such period
that the General Partner determines are necessary or appropriate in
its sole and absolute discretion, and
(7) any amount distributed or paid in redemption of any Limited
Partner Interest or Partnership Units pursuant to Section 8.7 or
Section 8.8 hereof, including, without limitation, any Cash Amount
paid.
Notwithstanding the foregoing, Available Cash shall not include (i) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (ii) any Capital Contributions,
whenever received.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in Altamonte Springs, Florida, San Diego, California, Los
Angeles, California or New York, New York are authorized or required by law to
close.
"Call Notice" has the meaning set forth in Section 8.7.
"Capital Account" means, with respect to any Partner, the Capital Account
maintained by the General Partner for such Partner on the Partnership's books
and records in accordance with the following provisions:
(a) To each Partner's Capital Account, there shall be added such
Partner's Capital Contributions, such Partner's distributive share of Net
Income and any items in the nature of income or gain that are specially
allocated pursuant to Section 6.3 hereof, and the principal amount of any
Partnership liabilities assumed by such Partner or that are secured by any
property distributed to such Partner.
(b) From each Partner's Capital Account, there shall be subtracted
the amount of cash and the Gross Asset Value of any property distributed to
such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Net Losses and any items in the nature of expenses or
losses that are specially allocated pursuant to Section 6.3 hereof, and the
principal amount of any liabilities of such Partner assumed by the
Partnership or that are secured by any property contributed by such Partner
to the Partnership.
(c) In the event any interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent that it relates to
the Transferred interest.
(d) In determining the principal amount of any liability for purposes
of subsections (a) and (b) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and
Regulations.
(e) The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Regulations Sections 1.704-
1(b) and 1.704-2, and shall be interpreted and applied in a manner
consistent with such Regulations. If the General Partner shall determine
that it is prudent to modify the manner in which the Capital Accounts are
maintained in order to comply with such Regulations, the General Partner
may make such modification provided that such modification will not have a
material effect on the amounts distributable to any Partner without such
Partner's Consent. The General Partner also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected on
the Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any
appropriate modifications in the event that unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b) or Section 1.704-2.
"Capital Contribution" means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of any Contributed Property that such
Partner contributes to the Partnership pursuant to Section 4.1. Section 4.2 or
Section 4.4 hereof.
"Capitalization Rate" means eleven percent (11%).
"Cash Amount" means an amount of cash determined as follows:
(a) the Net Rent shall be divided by the Capitalization Rate and
(b) the resulting dividend shall be multiplied by the percentage resulting from
dividing the number of Tendered Units by the total number of Partnership Units
outstanding.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed in the office of the Secretary of State of the State of
California, as amended from time to time in accordance with the terms hereof and
the Act.
"Charter" means the Articles of Incorporation of the General Partner filed
with the Maryland State Department of Assessments and Taxation on September 18,
1991, as amended, supplemented or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time or any successor statute thereto, as interpreted by the
applicable Regulations thereunder. Arty reference herein to a specific section
or sections of the Code shall be deemed to include a reference to any
corresponding provision of future law.
"Consent" means the consent to, approval of, or vote on a proposed action
by a Partner given in accordance with Article 14 hereof.
"Consent of the Limited Partners" means the consent of all of the Limited
Partners, which Consent shall be obtained prior to the taking of any action for
which it is required by this Agreement.
"Contributed Property" means each Property or other asset, in such form as
may be permitted by the Act, but excluding cash contributed or deemed
contributed to the Partnership (or deemed contributed to the Partnership on
termination and reconstitution thereof pursuant to Code Section 708).
"Controlled Entity" means, as to any Limited Partner, (a) any corporation
more than fifty percent (50%) of the outstanding voting stock of which is owned
by such Limited Partner or such Limited Partner's Family Members, (b) any trust,
whether or not revocable, of which such Limited Partner or such Limited
Partner's Family Members are the sole beneficiaries, (c) any partnership of
which such Limited Partner is the managing partner and in which such Limited
Partner or such Limited Partner's Family Members hold partnership interests
representing at least twenty-five percent (25%) of such partnership's capital
and profits and (d) any limited liability company of which such Limited Partner
is the manager and in which such Limited Partner or such Limited Partner's
Family Members hold membership interests representing at least twenty-five
percent (25%) of such limited liability company's capital and profits.
"Controlling Person" means any Person, whatever his or her title, who
performs executive or senior management functions for the General Partner or its
Affiliates similar to those of directors, executive management and senior
management, or any Person who either holds a two percent (2%) or more equity
interest in the General Partner or its Affiliates, or has the power to direct or
cause the direction of the General Partner or its Affiliates, whether through
the ownership of voting securities, by contract or otherwise, or, in the absence
of a specific role or title, any Person having the power to direct or cause the
direction of the management-level employees and policies of the General Partner
or its Affiliates. It is not intended that every Person who carries a title
such as vice president, senior vice president, secretary or treasurer be
included in the definition of a Controlling Person.
"Credit Tenants" means, as of the date of delivery of the Call Notice, a
Person which has (i) a net worth of at least one hundred million dollars
($100,000,000.00), or (ii) at least seventy-five (75) retail business locations
then open for business or (iii) a credit rating from Standard & Poor's Rating
Services, Moody's Investors Services, Inc. or Fitch Investors Service of
BBB/Baa3 (or the equivalent) or better.
"Debt" means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.
"Depreciation" means, for each Fiscal Year or other applicable period, an
amount equal to the federal income tax depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that, if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that, if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Designated Parties" means the Persons designated as such on the Partner
Schedules then in effect.
"Effective Date" has the meaning set forth in the preamble to this
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Existing Loan" means the loan secured by a first mortgage on the Property,
in favor of Barclays Bank PLC, New York Branch.
"Family Members" means, as to a Person that is an individual, (a) such
Person's spouse, (b) such Person's ancestors, (c) such Person's descendants
(whether by blood or by adoption), (d) such Person's brothers and sisters, (e)
inter vivos or testamentary trusts of which only such Person and/or his spouse,
ancestors, descendants (whether by blood or by adoption), brothers and/or
sisters are beneficiaries and (f) any partnership or limited liability company
all of whose partners or members, directly or indirectly, consist of such Person
and/or his spouse, ancestors, descendants (whether by blood or by adoption),
brothers and/or sisters and/or inter vivos or testamentary trusts of which only
such Person and/or his spouse, ancestors, descendants (whether by blood or by
adoption), brothers and/or sisters are beneficiaries.
"Fiscal Year" means the fiscal year of the Partnership, which shall be the
calendar year.
"Funding Debt" means any Debt incurred by or on behalf of the General
Partner for the purpose of providing funds to the Partnership.
"Funding Notice" has the meaning set forth in Section 4.4.B hereof.
"General Partner" means The Price REIT, Inc., a Maryland corporation, and
its successors and assigns, as the general partner of the Partnership in their
capacities as general partner of the Partnership.
"General Partner Interest" means the Partnership Interest held by the
General Partner, which Partnership Interest is an interest as a general partner
under the Act. A General Partner Interest may be expressed as a number of
Partnership Units.
"General Partner Loan" has the meaning set forth in Section 4.4.C hereof.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Limited Partner to the Partnership shall be set forth on the Partner
Schedule with respect to such Limited Partner.
(b) The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in clause (1), clause (2),
clause (3), clause (4) or clause (5) hereof shall be adjusted to equal
their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt, as of
the following times:
(1) the acquisition of an additional interest in the Partnership
(other than in connection with the execution of this Agreement but
including, without limitation, acquisitions pursuant to Section 4.4
hereof or contributions or deemed contributions by the General Partner
pursuant to Section 4.4 hereof) by a new or existing Partner in
exchange for more than a de minimis Capital Contribution, if the
General Partner reasonably determines that such adjustment is
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(2) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration for
an interest in the Partnership, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to reflect
the relative economic interests of the Partners in the Partnership;
(3) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);
(4) upon the admission of a successor General Partner pursuant
to Section 12.1 hereof; and
(5) at such other times as the General Partner shall reasonably
determine necessary or advisable in order to comply with Regulations
Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner,
provided that, if the distributee is the General Partner or if the
distributee and the General Partner cannot agree on such a determination,
such gross fair market value shall be determined by Appraisal.
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this subsection (d) to the extent that the General Partner reasonably
determines that an adjustment pursuant to subsection (b) above is necessary
or appropriate in connection with a transaction that would otherwise result
in an adjustment pursuant to this subsection (d).
(e) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset for
purposes of computing Net Income and Net Losses.
"Holder" means either (a) a Partner or (b) an Assignee, owning a
Partnership Unit, that is treated as a member of the Partnership for federal
income tax purposes.
"Incapacity" or "Incapacitated" means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or limited liability company or the revocation
of its charter; (iii) as to any Partner that is a partnership or limited
liability company, the dissolution and commencement of winding up of the
partnership or limited liability company; (iv) as to any Partner that is an
estate, the distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust that is a Partner, the termination
of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner's consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.
"Indemnitee" means (i) any Person made a party to a proceeding by reason of
its status as (A) the General Partner or (B) a director of the General Partner
or an officer or employee of the Partnership or the General Partner and
(ii) such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.
"Initial Limited Partner" means the Limited Partner so designated on the
signature page hereof.
"Interest" means interest, original issue discount and other similar
payments or amounts paid by the Partnership for the use or forbearance of money.
"IRS" means the Internal Revenue Service, which administers the internal
revenue laws of the United States.
"Limited Partner" means any Person named as a Limited Partner in Exhibit A
attached hereto, as such Exhibit A may be amended from time to time, or any
Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Limited Partner Interest" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Limited Partners and includes any and all benefits to which the
holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed
as a number of Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1 hereof.
"Liquidator" has the meaning set forth in Section 13.2.A hereof.
"Majority in Interest of the Limited Partners" means those Limited Partners
(other than any Limited Partner fifty percent (50%) or more of whose equity is
owned, directly or indirectly, by the General Partner) holding in the aggregate
more than fifty percent (50%) of the aggregate Partnership Units of all Limited
Partners (other than any Limited Partner fifty percent (50%) or more of whose
equity is owned, directly or indirectly, by the General Partner).
"Net Income" or "Net Loss" means, for each Fiscal Year of the Partnership,
an amount equal to the Partnership's taxable income or loss for such year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income (or Net
Loss) pursuant to this definition of "Net Income" or "Net Loss" shall be
added to (or subtracted from, as the case may be) such taxable income (or
loss);
(b) Any expenditure of the Partnership described in Code
Section 705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Net Income (or Net Loss) pursuant to this
definition of "Net Income" or "Net Loss," shall be subtracted from (or
added to, as the case may be) such taxable income (or loss);
(c) In the event that the Gross Asset Value of any Partnership asset
is adjusted pursuant to subsection (b) or subsection (c) of the definition
of "Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost recovery
deductions that would otherwise be taken into account in computing such
taxable income or loss, there shall be taken into account Depreciation for
such Fiscal Year;
(f) To the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be
taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of computing Net Income
or Net Loss; and
(g) Notwithstanding any other provision of this definition of "Net
Income" or "Net Loss," any item that is specially allocated pursuant to
Section 6.3 hereof shall not be taken into account in computing Net Income
or Net Loss. The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to Section 6.3
hereof shall be determined by applying rules analogous to those set forth
in this definition of "Net Income" or "Net Loss."
"Net Rent" shall mean:
(i) the annualized amount of base rent due from tenants of the
Property as of the date of delivery of the Call Notice;
(ii) less a management fee equal to three percent (3%) of the amount
determined pursuant to subclause (i) above;
(iii) less a capital expense reserve equal to ten cents ($.10)
multiplied by the number of rentable square feet comprising the
Property as of the date of the Call Notice;
(iv) less a vacancy allowance on non-Credit Tenants equal to five
percent (5%) of the amount of rent in subclause (i) above which
is due from tenants which are not Credit Tenants; provided
however that if the Occupancy Rate as of the date of delivery of
the Call Notice is more than ninety-five percent (95%), the
amount of the reduction pursuant to this clause (iv) shall be
zero (0);
(v) less unrecoverable triple net charges calculated on the greater
of (a) the rentable square feet of the Property which are not
occupied by tenants whose rent is included in subclause (i)
above, or (b) five percent (5%) of the rentable square feet of
the Property occupied by non-Credit Tenants as of the date of the
delivery of the Call Notice.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal
Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption substantially in the
form of Exhibit C attached to this Agreement.
"Occupancy Rate" means the fraction, expressed as a percentage, where the
numerator is the number of rentable square feet occupied by tenants whose rent
is included in subclause (i) of the definition of Net Rent divided by (ii) the
rentable square feet comprising the Property as of the date of delivery of the
Call Notice.
"Original Limited Partners" means the Persons executing a Partner Schedule
together with the General Partner and being admitted to the Partnership either
as an initial Limited Partner or as an Additional Limited Partner; provided,
however, that "Original Limited Partners" does not include any Assignee or other
transferee, including, without limitation, any Substituted Limited Partner
succeeding to all or any part of the Partnership Interest of any such Person.
The initial Original Limited Partners are listed on Exhibit A attached hereto.
"Ownership Limit" means the applicable restriction on ownership of shares
of the General Partner imposed under the Charter.
"Partner" means the General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).
"Partner Schedule" means a schedule, substantially in the form attached
hereto as Exhibit D and executed by the General Partner and a Limited Partner
(including any Original Limited Partner and any Substituted Limited Partner),
that shall set forth, with respect to a Limited Partner to which Partnership
Units are issued pursuant to this Agreement, (a) the Gross Asset Values, as
determined by the General Partner and agreed to by the contributing Limited
Partner, for any Contributed Properties contributed by such contributing Limited
Partner and (b) the initial Partnership Units issued to such Limited Partner.
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of
Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Fiscal Year
shall be determined in accordance with the rules of Regulations Section 1.704-
2(d).
"Partnership Record Date" means the record date established by the General
Partner for the distribution of Available Cash pursuant to Section 5.1 hereof,
which record date shall generally be the same as the record date established by
the General Partner for a distribution to its shareholders of some or all of its
portion of a distribution.
"Partnership Unit" means a fractional share of the Partnership Interests of
all Partners issued pursuant to Section 4.1, Section 4.2 or Section 4.4 hereof,
provided, however, that the General Partner Interest and the Limited Partner
Interests shall have the differences in rights and privileges as specified in
this Agreement. The ownership of Partnership Units may (but need not, in the
sole and absolute discretion of the General Partner) be evidenced by the form of
certificate for Partnership Units attached hereto as Exhibit E.
"Permitted Transfer" has the meaning set forth in Section 11.3.A hereof.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.
"Pledge" has the meaning set forth in Section 11.3.A hereof.
"Primary Offering Notice" has the meaning set forth in Section 8.6.F(4)
hereof.
"Property" means any assets and property of the Partnership such as, but
not limited to, interests in real property and personal property, including,
without limitation, fee interests, interests in ground leases, interests in
limited liability companies, joint ventures or partnerships, interests in
mortgages, and Debt instruments as the Partnership may hold from time to time.
"Qualified Transferee" means an "accredited investor" as defined in Rule
501 promulgated under the Securities Act.
"Qualifying Party" means (a) an Original Limited Partner, (b) an Additional
Limited Partner (unless otherwise provided in the applicable Partner Schedule),
(c) a Designated Party that is either a Substituted Limited Partner or an
Assignee, (d) a Family Member, or a lending institution as the pledgee of a
Pledge, who is the transferee in a Permitted Transfer or (e) with respect to any
Notice of Redemption delivered to the General Partner within the time period set
forth in Section 11.3.A(4) hereof, a Substituted Limited Partner succeeding to
all or part of the Limited Partner Interest of (i) an Original Limited Partner,
(ii) an Additional Limited Partner (unless such Additional Limited Partner was
not a Qualifying Party), (iii) a Designated Party that is either a Substituted
Limited Partner or an Assignee or (iv) a Family Member, or a lending institution
as the pledgee of a Pledge, who is the transferee in a Permitted Transfer.
"Redemption" has the meaning set forth in Section 8.6.A hereof.
"Registrable Shares" has the meaning set forth in Section 8.6.D(2) hereof.
"Regulations" means the applicable income tax regulations under the Code,
whether such regulations are in proposed, temporary or final form, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section 6.3.B(h)
hereof.
"REIT" means a real estate investment trust qualifying under Code
Section 856.
"REIT Partner" means a Partner or Assignee that is, or has made an election
to qualify as, a REIT.
"REIT Payment" has the meaning set forth in Section 15.11 hereof.
"REIT Requirements" has the meaning set forth in Section 5.1 hereof.
"Related Party" means, with respect to any Person, any other Person whose
direct or indirect ownership of shares of the General Partner's capital stock
would be attributed to the first such Person under Code Section 544 (as modified
by Code Section 856(h)(1)(B)).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means tile Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Specified Redemption Date" means the later of the thirtieth (30th)
calendar day (or, if such day is not a Business Day, the next following Business
Day) after (a) the receipt by the General Partner of a Notice of Redemption or
(b) the date such Notice of Redemption was to have been submitted by a Limited
Partner pursuant to Section 8.7; provided, however, that the Specified
Redemption Date, as well as the closing of a Redemption, or an acquisition of
Tendered Units by the General Partner pursuant to Section 8.7 hereof, on any
Specified Redemption Date, may be deferred, in the General Partner's sole and
absolute discretion, for such time (but in any event not more than one hundred
fifty (150) days in the aggregate) as may reasonably be required to effect, as
applicable, (i) any necessary funding arrangements, (ii) compliance with the
Securities Act or other law (including, but not limited to, (a) state "blue sky"
or other securities laws and (b) the expiration or termination of the applicable
waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended) and (iii) satisfaction or waiver of other commercially
reasonable and customary closing conditions and requirements for a transaction
of such nature.
"Subsidiary" means. with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person; provided, however, that, with respect to the
Partnership, "Subsidiary" means solely a partnership or limited liability
company (taxed, for federal income tax purposes, as a partnership and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a member unless the General Partner has received an
unqualified opinion from independent counsel of recognized standing, or a ruling
from the IRS, that the ownership of shares of stock of a corporation or other
entity will not jeopardize the General Partner's status as a REIT, in which
event the term "Subsidiary" shall include the corporation or other entity which
is the subject of such opinion or ruling.
"Substituted Limited Partner" means an Assignee who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof. The term
"Substituted Limited Partner" shall not include any Additional Limited Partner.
"Tax Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered Units" has the meaning set forth in Section 8.7 hereof.
"Tendering Party" has the meaning set forth in Section 8.7 hereof.
"Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Transfer," when used with respect to a Partnership Unit or all or any
portion of a Partnership Interest, means any sale, assignment, bequest,
conveyance, devise, gift (outright or in trust), Pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law; provided,
however, that, when the term is used in Article 11 hereof, Transfer does not
include any redemption of Partnership Units pursuant to Section 8.7 or
Section 8.8 hereof. The terms "Transferred" and "Transferring" have correlative
meanings.
"Twelve-Month Period" means a twelve-month period ending on the day before
the first (1st) anniversary of either (i) the admission of such Qualifying Party
as a Limited Partner in the Partnership or (ii) the Transfer of Partnership
Units to such Qualifying Party, or on the day before a subsequent anniversary
thereof (or, in the case of a period shorter than twelve (12) months, such other
period as may be provided in the relevant Partner Schedule).
"Unitholder" means the General Partner or a Holder of Partnership Units.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1. Organization
The Partnership is a limited partnership organized pursuant to the
provisions of the Act and upon the term and subject to the conditions set forth
in this Agreement. Except as expressly provided herein to the contrary, the
rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
Section 2.2. Name
The name of the Partnership is The Price REIT Renaissance Partnership, L.P.
The Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Partners of such change in the next regular communication to the Partners.
Section 2.3. Registered Agent; Principal Office
The registered agent for service of process on the Partnership in the State
of California is HIQ Corporate Services, Inc., or such other agent as the
General Partner may from time to time designate. The principal office of the
Partnership is located at 145 South Fairfax Avenue, Fourth Floor, Los Angeles,
CA 90036, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of California
as the General Partner deems advisable.
Section 2.4. Power of Attorney
A. Each Limited Partner and each Assignee hereby irrevocably constitutes
and appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorneys-in-fact,
with full power and authority in its name, place and stead to:
(1) execute, swear to, seal, acknowledge, deliver, file and record in
the appropriate public offices (a) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Certificate and all amendments, supplements or restatements thereof) that
the General Partner or the Liquidator deems appropriate or necessary to
form, qualify or continue the existence or qualification of the Partnership
as a limited partnership (or a partnership in which the limited partners
have limited liability to the extent provided by applicable law) in the
State of California and in all other jurisdictions in which the Partnership
may conduct business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its terms;
(c) all conveyances and other instruments or documents that the General
Partner or the Liquidator deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of
this Agreement, including, without limitation, a certificate of
cancellation; (d) all conveyances and other instruments or documents that
the General Partner or the Liquidator deems appropriate or necessary to
reflect the distribution or exchange of assets of the Partnership pursuant
to the terms of this Agreement; (e) all instruments relating to the
admission, withdrawal, removal, substitution or redemption of any Partner
pursuant to, or other events described in, Article 7, Article 11,
Article 12 or Article 13 hereof or the Capital Contribution of any Partner;
and (f) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges relating to
Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole and absolute discretion of the General Partner, to
make, evidence, give, confirm or ratify any vote, consent, approval,
agreement or other action that is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or appropriate or
necessary, in the sole and absolute discretion of the General Partner, to
effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a special power coupled with an interest, in recognition of the fact that
each of the Limited Partners and Assignees will be relying upon the power of the
General Partner to act as contemplated by this Agreement in any filing or other
action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
Transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units or Partnership Interest and shall extend to such Limited
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner, acting in good faith pursuant to
such power of attorney; and each such Limited Partner or Assignee hereby waives
any and all defenses that may be available to contest, negate or disaffirm, the
action of the General Partner, taken in good faith under such power of attorney.
Each Limited Partner or Assignee shall execute and deliver to the General
Partner or the Liquidator, within fifteen (15) days after receipt of the General
Partner's or the Liquidator's request therefor, such further designation, powers
of attorney and other instruments as the General Partner or the Liquidator, as
the case may be, deems necessary to effectuate this Agreement and the purposes
of the Partnership.
C. Nothing contained in this Section 2.4 shall be deemed to give the
General Partner, any Liquidator or the authorized officers and attorneys in fact
the power to act as attorney in fact for any Limited Partner in connection with
such Limited Partners right to approve, consent or vote in any matter for which
the Limited Partners approval or consent is required under this Agreement.
Section 2.5. Term
The term of the Partnership commenced on the Effective Date, the date that
the original Certificate was filed in the office of the Secretary of State of
California in accordance with the Act, and shall continue until January 2, 2010
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 hereof or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1. Purpose and Business
The purpose and nature of the Partnership is to conduct any business,
enterprise or activity permitted by or under the Act relating to (i) conducting
the business of ownership, construction, development, operation and disposition
of the property commonly known as the Renaissance Centre located in Altamonte
Springs, Florida, as more particularly described in Exhibit B attached hereto
and incorporated herein by this reference; and (ii) doing anything necessary or
incidental to the foregoing; provided, however, such business may be limited to
and conducted in such a manner as to permit the General Partner, in its sole and
absolute discretion, at all times to be classified as a REIT.
Section 3.2. Powers
A. The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership.
B. Notwithstanding any other provision in this Agreement, the General
Partner may cause the Partnership to take, or to refrain from taking, any action
that, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT, (ii) could subject the General Partner to any
additional taxes under Code Section 857 or Code Section 4981 or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner, its securities or the Partnership, unless
such action (or inaction) under clause (i), clause (ii) or clause (iii) above
shall have been specifically consented to by the General Partner in writing.
Section 3.3. Partnership Only for Purposes Specified
The Partnership shall be a limited partnership only for the purposes
specified in Section 3.1 hereof, and this Agreement shall not be deemed to
create a company, venture or partnership between or among the Partners with
respect to any activities whatsoever other than the activities within the
purposes of the Partnership as specified in Section 3.1 hereof. Except as
otherwise provided in this Agreement, no Partner shall have any authority to act
for, bind, commit or assume any obligation or responsibility on behalf of the
Partnership, its properties or any other Partner. No Partner, in its capacity
as a Partner under this Agreement, shall be responsible or liable for any
indebtedness or obligation of another Partner, nor shall the Partnership be
responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the terms of this Agreement
and the Act.
Section 3.4. Representations and Warranties by the Limited Partners
A. Each Limited Partner that is an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) the consummation of the transactions
contemplated by this Agreement to be performed by such Limited Partner will not
result in a breach or violation of, or a default under, any material agreement
by which such Limited Partner or any of such Limited Partner's property is
bound, or any statute, regulation, order or other law to which such Limited
Partner is subject, (ii) such Limited Partner is neither a "foreign person"
within the meaning of Code Section 1445(f) nor a "foreign partner" within the
meaning of Code Section 1446(e), (iii) such Limited Partner does not own,
directly or indirectly (including by reason of the constructive ownership rules
of Code Section 856(d)(5)), (a) nine and eight-tenths percent (9.8%) or more of
the total combined voting power of all classes of stock entitled to vote, or
nine and eight-tenths percent (9.8%) or more of the total number of shares of
all classes of stock, of any corporation that is a tenant of either (I) the
General Partner, (II) the Partnership (including any tenant of a property that
will, in connection with the admission of such Limited Partner, become a
Contributed Property) or (III) any partnership, venture or limited liability
company of which the General Partner or the Partnership is a member or (b) an
interest of nine and eight-tenths percent (9.8%) or more in the assets or net
profits of any tenant of either (I) the General Partner, (II) the Partnership or
(including any tenant of a property that will, in connection with the admission
of such Limited Partner, become a Contributed Property) (III) any partnership,
venture or limited liability company of which the General Partner or the
Partnership is a member and (iv) this Agreement is binding upon, and enforceable
against, such Limited Partner in accordance with its terms.
B. Each Limited Partner that is not an individual (including, without
limitation, each Additional Limited Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner or a Substituted Limited
Partner) represents and warrants to the Partnership, the General Partner and
each other Limited Partner that (i) all transactions contemplated by this
Agreement to be performed by it have been duly authorized by all necessary
action, including, without limitation, that of its general partner(s),
committee(s), trustee(s), beneficiaries, directors and/or shareholder(s), as the
case may be, as required, (ii) the consummation of such transactions shall not
result in a breach or violation of, or a default under, its partnership or
operating agreement, trust agreement, charter or bylaws, as the case may be, any
material agreement by which such Limited Partner or any of such Limited
Partner's properties or any of its partners, members, beneficiaries, trustees or
shareholders, as the case may be, is or are bound, or any statute, regulation,
order or other law to which such Limited Partner or any of its partners,
members, trustees, beneficiaries or shareholders, as the case may be, is or are
subject, (iii) such Limited Partner is neither a "foreign person" within the
meaning of Code Section 1445(f) nor a "foreign partner" within the meaning of
Code Section 1446(e), (iv) such Limited Partner does not own, directly or
indirectly (including by reason of the constructive ownership rules of Code
Section 856(d)(5)), (a) nine and eight-tenths percent (9.8%) or more of the
total combined voting power of all classes of stock entitled to vote, or nine
and eight-tenths percent (9.8%) or more of the total number of shares of all
classes of stock, of any corporation that is a tenant of either (I) the General
Partner, (II) the Partnership (including any tenant of a property that will, in
connection with the admission of such Limited Partner, became a Contributed
Property) or (III) any partnership, venture or limited liability company of
which the General Partner or the Partnership is a member or (b) an interest of
nine and eight-tenths percent (9.8%) or more in the assets or net profits of any
tenant of either (I) the General Partner, (II) the Partnership (including any
tenant of a property that will, in connection with the admission of such Limited
Partner, became a Contributed Property) or (III) any partnership, venture or
limited liability company of which the General Partner or the Partnership is a
member and (v) this Agreement is binding upon, and enforceable against, such
Limited Partner in accordance with its terms.
C. Each Limited Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner)
represents, warrants and agrees that it has acquired and continues to hold its
interest in the Partnership for its own account for investment only and not for
the purpose of, or with a view toward, the resale or distribution of all or any
part thereof, nor with a view toward selling or otherwise distributing such
interest or any part thereof at any particular time or under any predetermined
circumstances. Each Limited Partner further represents and warrants that it is
a sophisticated investor, able and accustomed to handling sophisticated
financial matters for itself, particularly real estate investments, and that it
has a sufficiently high net worth that it does not anticipate a need for the
funds that it has invested in the Partnership in what it understands to be a
highly speculative and illiquid investment.
D. The representations and warranties contained in Sections 3.4.A, 3.4.B
and 3.4.C hereof shall survive the execution and delivery of this Agreement by
each Limited Partner (and, in the case of an Additional Limited Partner or a
Substituted Limited Partner, the admission of such Additional Limited Partner or
Substituted Limited Partner as a Limited Partner in the Partnership) and the
dissolution, liquidation and termination of the Partnership. The General
Partner may, in its sole and absolute discretion on behalf of the Partnership
and its Partners, grant waivers and exceptions to the representations and
warranties contained in Sections 3.4.A, 3.4.B and 3.4.C hereof, but any such
waiver or exception must be in writing, must refer to this Section 3.4.D) and
must describe with particularity the representation or warranty as to which such
waiver or exception shall apply.
E. Each Limited Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner) hereby
acknowledges that no representations as to potential profit, tax consequences of
any sort (including, without limitation, the tax consequences resulting from
making a Capital Contribution, being admitted to the Partnership or being
allocated Tax Items), cash flows, funds from operations or yield, if any, in
respect of the Partnership or the General Partner have been made by any Partner
or any employee or representative or Affiliate of any Partner, and that
projections and any other information, including, without limitation, financial
and descriptive information and documentation, that may have been in any manner
submitted to such Limited Partner shall not constitute any representation or
warranty of any kind or nature, express or implied.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1. Capital Contributions of the Initial Partners
At the time of the execution of this Agreement, each initial Limited
Partner shall make the Capital Contribution as set forth in the Partner Schedule
for such Partner, and the General Partner shall make the Capital Contribution
shown on Exhibit A attached hereto. Each initial Limited Partner shall own
Partnership Units in the amount set forth for such Partner in the Partner
Schedule with respect to such Partner, as the same may be amended from time to
time. The General Partner shall initially own Partnership Units in the amount
set forth for the General Partner on Exhibit A attached hereto. Except as
provided in a particular Partner Schedule, by law or in Section 4.4.D or
Section 10.4 hereof, the Partners shall have no obligation or right to make any
additional Capital Contributions or loans to the Partnership.
Section 4.2. Additional Limited Partners
The General Partner is authorized to admit one or more Additional Limited
Partners to the Partnership from time to time, on terms and conditions and for
such Capital Contributions as may established by the General Partner in its sole
and absolute discretion; provided, however, the Partnership may not acquire
additional Properties by means of Capital Contributions by other persons. No
action or consent by the Limited Partners shall be required in connection with
the admission of any Additional Limited Partner.
Section 4.3. Loans by Third Parties
The Partnership may incur or assume Debt, or enter into other similar
credit, guarantee, financing or refinancing arrangements, for any purpose, upon
such terms as the General Partner determines appropriate; provided, however,
that the Partnership shall not incur or assume any Debt under which a breach,
violation or default would be deemed to occur by virtue of the Transfer of any
Limited Partner Interest or General Partner Interest; provided, further, that
any Debt shall be nonrecourse to the General Partner unless the General Partner
otherwise agrees.
Section 4.4. Additional Funding and Capital Contributions
A. General. The General Partner may, at any time and from time to time,
determine that the Partnership requires additional funds ("Additional Funds")
for such purposes as the General Partner may determine. Additional Funds may be
raised by the Partnership, at the election of the General Partner, in any manner
provided in, and in accordance with, the terms of this Section 4.4 or,
alternatively, the terms of Section 4.3 hereof. No Person, including, without
limitation, any Partner or Assignee, shall have any preemptive, preferential,
participation or similar right or rights to subscribe for or acquire any
Partnership Interest.
B. Notice of Additional Funds Requirement. Other than with respect to
the Existing Loan, which is to be acquired by the General Partner upon the
contribution of the Property, the General Partner shall give written notice (the
"Funding Notice") to the Limited Partners of the need for Additional Funds and
the anticipated source(s) thereof.
C. General Partner Loans. If no irrevocable election to Loan its prorata
share of Additional Funds ("Loan Election"), is received by General Partner from
a Limited Partner within five (5) Business Days after the date of the Funding
Notice, the General Partner may enter into a Funding Debt and lend the
Additional Funds to the Partnership (a "General Partner Loan"). If the General
Partner enters into such a Funding Debt, the General Partner Loan will consist
of the net proceeds from such Funding Debt and, to the extent permitted by law,
will be on the same terms and conditions, including interest rate and repayment
schedule, and providing for the reimbursement of costs and expenses, as shall be
applicable with respect to or incurred in connection with such Funding Debt.
The parties hereto agree that the interest rate for a General Partner Loan shall
be equal to eleven percent (11%) per annum (so long as such interest rate is
then permitted under applicable law).
D. Participating Partner Loans. If a Funding Notice is given to the
Limited Partners, and a Loan Election is timely received from a Limited Partner,
the General Partner and Limited Partner may enter into a Funding Debt and lend
the Additional Funds to the Partnership (a "Partner Loan") on a prorata basis.
If the Partners enter into such a Funding Debt, the Partner Loan will consist of
the net proceeds from such Funding Debt and, to the extent permitted by law,
will be on the same terms and conditions, including interest rate and repayment
schedule, and providing for the reimbursement of costs and expenses, as shall be
applicable with respect to or incurred in connection with such Funding Debt.
The parties hereto agree that the interest rate for a Partner Loan shall be
equal to the Capitalization Rate (so long as such interest rate is then
permitted under applicable law).
Section 4.5. No Interest; No Return
No Partner shall be entitled to interest on its Capital Contribution or on
such Partner's Capital Account. Except as provided herein or by law, no Partner
shall have any right to demand or receive the return of its Capital Contribution
from the Partnership.
ARTICLE 5
DISTRIBUTIONS
Section 5.1. Requirement and Characterization of Distributions
The General Partner shall cause the Partnership to distribute quarterly
(or, with respect to a particular Holder of Partnership Units, in installments
upon such other frequency as may be provided in the relevant Partner Schedule)
such portion of Available Cash as the General Partner may determine in its sole
and absolute discretion to the Unitholders on the Partnership Record Date with
respect to such quarter (or other period as the General Partner may in its sole
and absolute discretion determine), (a) ninety-nine percent (99%) to the General
Partner and (b) one percent (1%) to the Limited Partners in proportion to their
Partnership Units as of the Partnership Record Date.
The General Partner in its sole and absolute discretion may distribute to
the Unitholders Available Cash in accordance with foregoing priorities on a more
frequent basis and provide for an appropriate record date. The General Partner
shall take such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the General Partner's qualification as a REIT, to
cause the Partnership to distribute sufficient amounts to enable the General
Partner to pay shareholder dividends that will (a) satisfy the requirements for
qualifying as a REIT under the Code and Regulations (the "REIT Requirements")
and (b) avoid any federal income or excise tax liability of the General Partner.
Section 5.2. Distributions in Kind
No right is given to any Unitholder to demand and receive property other
than cash as provided in this Agreement. The General Partner may determine, in
its sole and absolute discretion, to make a distribution in kind of Partnership
assets to the Unitholders, and, subject to Section 8.8 hereof, such assets shall
be distributed in such a fashion as to ensure that the fair market value is
distributed and allocated in accordance with Articles 5, 6 and 10 hereof.
Section 5.3. Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 10.4 hereof with respect to any allocation, payment or
distribution to any Unitholder shall be treated as amounts paid or distributed
to such Unitholder pursuant to Section 5.1 hereof for all purposes under this
Agreement.
Section 5.4. Distributions Upon Liquidation
Notwithstanding the other provisions of this Article 5, net proceeds from a
Terminating Capital Transaction, and any other cash received or reductions in
reserves made after commencement of the liquidation of the Partnership, shall be
distributed to the Unitholders in accordance with Section 13.2 hereof.
Section 5.5. Restricted Distributions
Notwithstanding any provision to the contrary contained in this Agreement,
neither the Partnership nor the General Partner, on behalf of the Partnership,
shall make a distribution to any Unitholder on account of its Partnership
Interest or interest in Partnership Units if such distribution would violate the
Act or other applicable law.
ARTICLE 6
ALLOCATIONS
Section 6.1. Timing and Amount of Allocations of Net Income and
Net Loss
Net Income and Net Loss of the Partnership shall be determined and
allocated with respect to each Fiscal Year of the Partnership as of the end of
each such year. Except as otherwise provided in this Article 6, and subject to
Section 11.6.C hereof, an allocation to a Unitholder of a share of Net Income or
Net Loss shall be treated as an allocation of the same share of each item of
income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.
Section 6.2. General Allocations
Except as otherwise provided in this Article 6 and subject to Section
11.6.C hereafter, Net Income and Net Loss shall be allocated as follows:
(1) ninety-nine percent (99%) to the General Partner; and
(2) one percent (1%) to the Limited Partners in proportion to their
respective Partnership Units at the end of each Fiscal Year.
Notwithstanding anything to the contrary in this Agreement, the Limited Partners
shall at all times while they are Limited Partners in the Partnership have no
less than one percent (1%) of the income, gain, deduction, loss, and credit of
the Partnership.
Section 6.3. Additional Allocation Provisions
Notwithstanding the foregoing provisions of this Article 6:
A. Regulatory Allocations
(a) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of
Section 6.2 hereof, or any other provision of this Article 6, if there is a
net decrease in Partnership Minimum Gain during any Fiscal Year, each
Unitholder shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal
to such Unitholder's share of the net decrease in Partnership Minimum Gain,
as determined under Regulations Section 1.704-2(g). Allocations pursuant
to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Unitholder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(i)(2). This Section 6.3.B(a) is
intended to qualify as a "minimum gain chargeback" within the meaning of
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.3.B(a) hereof, if there
is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Unitholder who has a share of
the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such
Unitholder's share of the net decrease in Partner Minimum Gain attributable
to such Partner Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall
be made in proportion to the respective amounts required to be allocated to
each General Partner, Limited Partner and other Holder pursuant thereto.
The items to be so allocated shall be determined in accordance with
Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 6.3.B(b) is intended to qualify as a "chargeback of partner
nonrecourse debt minimum gain" within the meaning of Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.
(c) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any
Nonrecourse Deductions for any Fiscal Year shall be specially allocated to
the Holders of Partnership Units in accordance with their Partnership
Units. Any Partner Nonrecourse Deductions for any Fiscal Year shall be
special allocated to the Unitholder(s) who bears the economic risk of loss
with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable, in accordance with Regulations
Section 1.704-2(i).
(d) Qualified Income Offset. If any Unitholder unexpectedly receives
an adjustment, allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4),(5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations Section 1.704-
l(b)(2)(ii)(d), to such Unitholder in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted Capital
Account Deficit of such Unitholder as quickly as possible, provided that an
allocation pursuant to this Section 6.3.B(d) shall be made if and only to
the extent that such Unitholder would have an Adjusted Capital Account
Deficit after all other allocations provided in this Article 6 have been
tentatively made as if this Section 6.3.B(d) were not in the Agreement. It
is intended that this Section 6.3.B(d) qualify and be construed as a
"qualified income offset" within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(e) Gross Income Allocation. In the event that any Unitholder has a
deficit Capital Account at the end of any Fiscal Year that is in excess of
the sum of (i) the amount (if any) that such Unitholder is obligated to
restore to the Partnership upon complete liquidation of such Unitholder's
Partnership Interest and (ii) the amount that such Unitholder is deemed to
be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Unitholder
shall be specially allocated items of Partnership income and gain in the
amount of such excess to eliminate such deficit as quickly as possible,
provided that an allocation pursuant to this Section 6.3.B(e) shall be made
if and only to the extent that such Unitholder would have a deficit Capital
Account in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.3.B(e) and
Section 6.3.B(d) hereof were not in the Agreement.
(f) Limitation on Allocation of Net Loss. To the extent that any
allocation of Net Loss would cause or increase an Adjusted Capital Account
Deficit as to any Holder of Partnership Units, such allocation of Net Loss
shall be reallocated among the other Holders of Partnership Units in
accordance with their respective Partnership Units, subject to the
limitations of this Section 6.3.B(f).
(g) Section 754 Adjustment. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Regulations Section 1.704-
1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be
taken into account in determining Capital Accounts as the result of a
distribution to a Holder of Partnership Units in complete liquidation of
its interest in the Partnership, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be specially allocated to the Holders
in accordance with their Partnership Units in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such
distribution was made in the event that Regulations Section 1.704-
1(b)(2)(iv)(m)(4) applies.
(h) Curative Allocations. The allocations set forth in Sections
6.3.B(a), (b), (c), (d), (e), (f) and (g) hereof (the "Regulatory
Allocations") are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 6.l hereof, the Regulatory
Allocations shall be taken into account in allocating other items of
income, gain, loss and deduction among the Unitholders so that, to the
extent possible without violating the requirements giving rise to the
Regulatory Allocations, the net amount of such allocations of other items
and the Regulatory Allocations to each Unitholder shall be equal to the net
amount that would have been allocated to each such Unitholder if the
Regulatory Allocations had not occurred.
B. Allocation of Excess Nonrecourse Liabilities. For purposes of
determining a Holder's proportional share of the "excess nonrecourse
liabilities" of the Partnership within the meaning of Regulations Section 1.752-
3(a)(3), each Holder's interest in Partnership profits shall be such Holder's
share of Partnership Units.
Section 6.4. Tax Allocations
A. In General. Except as otherwise provided in this Section 6.4, for
income tax purposes under the Code and the Regulations each Partnership item of
income, gain, loss and deduction (collectively, "Tax Items") shall be allocated
among the Unitholders in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3
hereof.
B. Allocations Respecting Section 704(c) Revaluations. Notwithstanding
Section 6.4.A hereof, Tax Items with respect to Property that is contributed to
the Partnership with a Gross Asset Value that varies from its basis in the hands
of the contributing Partner immediately preceding the date of contribution shall
be allocated among the Unitholders, for income tax purposes pursuant to
Regulations promulgated under Code Section 704(c) so as to take into account
such variation. The Partnership shall account for such variation under any
method approved under Code Section 704(c) and the applicable Regulations as
chosen by the General Partner, including, without limitation, the "traditional
method" as described in Regulations Section 1.704-3(b). In the event that the
Gross Asset Value of any Partnership asset is adjusted pursuant to subsection
(b) of the definition of "Gross Asset Value," subsequent allocations of Tax
Items with respect to such asset shall take account of the variation, if any,
between the adjusted basis of such asset and its Gross Asset Value in the same
manner as under Code Section 704(c) and the applicable Regulations.
Section 6.5. Other Provisions
A. Other Allocations Upon Change in Law. In the event that the Code or
any Regulations require allocations of items of income, gain, loss, deduction or
credit different from those set forth in this Article 6, the General Partner is
hereby authorized to make new allocations in reliance on the Code and such
Regulations, such new allocations shall be deemed to be made pursuant to the
fiduciary duty of the General Partner to the Partnership and the other Partners,
and no such new allocation shall give rise to any claim or cause of action by
any Partner.
B. Consistent Tax Reporting. The Partners acknowledge and are aware of
the income tax consequences of the allocations made by this Article 6 and hereby
agree to be bound by the provisions of this Article 6 in reporting their shares
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit for federal, state and local income tax purposes.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management
A. Except as otherwise expressly provided in this Agreement including,
without limitation, Sections 7.3 B and 13.1 hereof, all management powers over
the business and affairs of the Partnership are and shall be exclusively vested
in the General Partner, and no Limited Partner shall have any right to
participate in or exercise control or management power over the business and
affairs of the Partnership. The General Partner may not be removed by the
Partners with or without cause, except with the Consent of the General Partner.
In addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law or that are granted to the General
Partner under any other provision of this Agreement, the General Partner,
subject to the other provisions hereof including Sections 7.3 B and 13.1, shall
have full power and authority to do all things deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all powers set forth
in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including without limitation:
(1) the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing
money to permit the Partnership to make distributions to its Partners in
such amounts as will permit the General Partner (so long as the General
Partner qualifies as a REIT) to avoid the payment of any federal income tax
including, for this purpose, any excise tax pursuant to Code Section 4981)
and to make distributions to its shareholders sufficient to permit the
General Partner to maintain REIT status or otherwise to satisfy the REIT
Requirements), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by deed to secure debt,
mortgage, deed of trust or other lien or encumbrance on the Partnership's
assets) and the incurring of any obligations that it deems necessary for
the conduct of the activities of the Partnership;
(2) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(3) the acquisition, sale, transfer, exchange or other disposition of
any assets of the Partnership (including, but not limited to, the exercise
or grant of any conversion, option, privilege or subscription right or any
other right available in connection with any assets at any time held by the
Partnership) or the merger, consolidation, reorganization or other
combination of the Partnership with or into another entity;
(4) the mortgage, pledge, encumbrance or hypothecation of any assets
of the Partnership (including, without limitation, any Contributed
Property), the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms that it sees fit, including, without limitation,
the financing of the operations and activities of the General Partner, the
Partnership or any of the Partnership's Subsidiaries, the lending of funds
to other Persons (including, without limitation, the Partnership's
Subsidiaries) and the repayment of obligations of the Partnership, its
Subsidiaries and any other Person in which it has an equity investment, and
the making of capital contributions to and equity investments in the
Partnership's Subsidiaries;
(5) the management, operation, leasing, landscaping, repair,
alteration, demolition, replacement or improvement of any Property,
including, without limitation, any Contributed Property, or other asset of
the Partnership or any Subsidiary;
(6) the negotiation, execution and performance of any contracts,
leases, conveyances or other instruments that the General Partner considers
useful or necessary to the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this Agreement,
including contracting with property managers (including, without
limitation, as to any Contributed Property or other Property, contracting
with the contributing or any other Limited Partner or its Affiliates for
property management services), contractors, developers, consultants,
accountants, legal counsel, other professional advisors and other agents
and the payment of their expenses and compensation out of the Partnership's
assets;
(7) the distribution of partnership cash or other Partnership assets
in accordance with this Agreement, the holding, management, investment and
reinvestment of cash and other assets of the Partnership, and the
collection and receipt of revenues, rents and income of the Partnership;
(8) the selection and dismissal of employees of the Partnership or
the General Partner (including, without limitation, employees having titles
or offices such as "president," "vice president," "secretary" and
"treasurer"), and agents, outside attorneys, accountants, consultants and
contractors of the Partnership or the General Partner and the determination
of their compensation and other terms of employment or hiring;
(9) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
(10) the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships,
limited liability companies, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of property to, any Subsidiary and any
other Person in which it has an equity investment from time to time);
provided, however, that, as long as the General Partner has determined to
continue to qualify as a REIT, the General Partner may not engage in any
such formation, acquisition or contribution that would cause the General
Partner to fail to qualify as a REIT;
(11) the control of any matters affecting the rights and obligations
of the Partnership, including the settlement, compromise, submission to
arbitration or any other form of dispute resolution, or abandonment, of any
claim, cause of action, liability, debt or damages, due or owing to or from
the Partnership, the commencement or defense of suits, legal proceedings,
administrative proceedings, arbitrations or other forms of dispute
resolution, and the representation of the Partnership in all suits or legal
proceedings, administrative proceedings, arbitrations or other forms of
dispute resolution, the incurring of legal expense, and the indemnification
of any Person against liabilities and contingencies to the extent permitted
by law;
(12) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Subsidiary or any other
Person (including, without limitation, the contribution or loan of funds by
the Partnership to such Persons);
(13) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of valuation as
it may adopt, provided that such methods are otherwise consistent with the
requirements of this Agreement;
(14) the enforcement of any rights against any Partner pursuant to
representations, warranties, covenants and indemnities relating to such
Partner's contribution of property or assets to the Partnership;
(15) the exercise, directly or indirectly, through any attorney-in-
fact acting under a general or limited power of attorney, of any right,
including the right to vote, appurtenant to any asset or investment held by
the Partnership;
(16) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any
Subsidiary of the Partnership or any other Person in which the Partnership
has a direct or indirect interest, or jointly with any such Subsidiary or
other Person;
(17) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the
Partnership does not have an interest, pursuant to contractual or other
arrangements with such Person;
(18) the making, execution and delivery of any and all deeds, leases,
notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties, indemnities,
waivers, releases or legal instruments or agreements in writing necessary
or appropriate in the judgment of the General Partner for the
accomplishment of any of the powers of the General Partner enumerated in
this Agreement;
(19) the issuance of additional Partnership Units, as appropriate and
in the General Partner's sole and absolute discretion, in connection with
Capital Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereof; and
(20) an election to dissolve the Partnership pursuant to
Section 13.1.C hereof.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement
(except as provided in Section 7.3 hereof), the Act or any applicable law, rule
or regulation. The execution, delivery or performance by the General Partner or
the Partnership of any agreement authorized or permitted under this Agreement
shall not constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the Properties of the Partnership and (ii) liability insurance for
the Indemnitees hereunder.
D. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain working capital and other
reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
E. In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner (including the General Partner) of any action taken by it. The
General Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances as a result of an income tax liability incurred
by such Limited Partner as a result of an action (or inaction) by the General
Partner pursuant to its authority under this Agreement so long as the action or
inaction is taken in good faith.
Section 7.2. Certificate of Limited Partnership
To the extent that such action is determined by the General Partner to be
reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of
California and each other state, the District of Columbia or any other
jurisdiction in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not
be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners have limited
liability to the extent provided by applicable law) in the State of California
and any other state, or the District of Columbia or other jurisdiction in which
the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner's Authority
A. The General Partner may not take any action in contravention of this
Agreement. Specifically (but without limitation), the General Partner may not:
(1) take any action that would make it impossible to carry on the
ordinary business of the Partnership, except as otherwise provided in this
Agreement;
(2) possess Partnership property, or assign any rights in specific
Partnership property, for other than a Partnership purpose except as
otherwise provided in this Agreement;
(3) admit a Person as a Partner, except as otherwise provided in this
Agreement, or
(4) perform any act that would subject a Limited Partner to liability
as a general partner in any jurisdiction or any other liability except as
provided herein or under the Act.
B. The General Partner shall not, without the prior consent of all the
Limited Partners, undertake, on behalf of the Partnership, any of the following
actions or enter into any transaction that would have the effect of such
transactions:
(1) except as otherwise specifically provided in this Agreement,
amend, modify or terminate this Agreement other than to reflect the
admission, substitution, termination or withdrawal of Partners pursuant to
Article 11 or Article 12 hereof;
(2) make a general assignment for the benefit of creditors or appoint
or acquiesce in the appointment of a custodian, receiver or trustee for all
or any part of the assets of the Partnership;
(3) institute any proceeding for bankruptcy on behalf of the
Partnership;
(4) subject to the rights of Transfer provided in Section 11.2
hereof, approve or acquiesce to the Transfer of the Partnership Interest of
the General Partner, or admit into the Partnership any additional or
successor General Partners; or
(5) on or prior to January 2, 2005, sell, convey, contribute or
otherwise transfer the Property or satisfy or pay down the principal of the
$7,000,000 loan secured by the Property; or
(6) after January 2, 2001 sell, convey, contribute or otherwise
transfer the Property or satisfy or pay down the principal of the
$7,000,000 loan secured by the Property unless (i) in General Partner's
reasonable judgment, a material adverse change has occurred in the economic
condition of the Property and (ii) the sale, conveyance or other transfer
is a bona fide transfer to a Person unaffiliated with the General Partner.
C. Notwithstanding Section 7.3.B hereof, the General Partner shall have
the power, without the Consent of the Limited Partners, to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner or surrender any
right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution or withdrawal of Partners
or the termination of the Partnership in accordance with this Agreement,
and to amend Exhibit A in connection with such admission, substitution or
withdrawal;
(3) to reflect a change that is of an inconsequential nature and does
not adversely affect the Limited Partners in any material respect, or to
cure any ambiguity, correct or supplement any provision in this Agreement
not inconsistent with law or with other provisions, or make other changes
with respect to matters, arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement;
(4) to satisfy any requirements, conditions or guidelines contained
in any order, directive, opinion, ruling or regulation of a federal or
state agency or contained in federal or state law;
(5) to reflect such changes as are reasonably necessary for the
General Partner to maintain its status as a REIT or to satisfy the REIT
Requirements; and
(6) to modify the manner in which Capital Accounts are computed (but
only to the extent set forth in the definition of "Capital Account" or
contemplated by the Code or the Regulations).
The General Partner will provide notice to the Limited Partners when any action
under this Section 7.3.C is taken.
D. Notwithstanding Section 7.3.B and 7.3.C hereof, this Agreement shall
not be amended, and no action may be taken by the General Partner, without the
Consent of each Partner adversely affected, if such amendment or action would
(i) convert a Limited Partner Interest in the Partnership into a General Partner
Interest (except as a result of the General Partner acquiring such Partnership
Interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
rights of the Partner to receive distributions pursuant to Article 5 or
Section 13.2.A(4) hereof, or the allocations specified in Article 6 hereof
(except in any case as permitted pursuant to Sections 4.4 and 7.3.C hereof),
(iv) alter or modify the Cash Amount or (v) amend this Section 7.3.D. Further,
no amendment may alter the restrictions on the General Partner's authority set
forth elsewhere in this Section 7.3 without the Consent specified therein. Any
such amendment or action consented to by any Partner shall be effective as to
that Partner, notwithstanding the absence of such consent by any other Partner.
Section 7.4. Reimbursement of the General Partner
A. The General Partner shall not be compensated for its services as
general partner of the Partnership except as provided elsewhere in this
Agreement (including the provisions of Articles 5 and 6 hereof regarding
distributions, payments and allocations to which it may be entitled in its
capacity as the General Partner).
B. Subject to Sections 7.4.C and 15.11 hereof, the Partnership shall be
liable, and shall reimburse the General Partner on a monthly basis (or such
other basis as the General Partner may determine in its sole and absolute
discretion), for all sums expended in connection with the Partnership's
business. Any such reimbursements shall be in addition to any reimbursement of
the General Partner as a result of indemnification pursuant to Section 7.7
hereof. Notwithstanding the foregoing, the Initial Limited Partner agrees that
it shall be liable, and shall reimburse the Partnership on a monthly basis (or
such other basis but not more frequently than monthly as the General Partner may
determine in its sole and absolute discretion), for all sums expended in
connection with the formation and/or maintenance of the Partnership
(noninclusive of sums expended with respect to the management and operation of
the Property, which shall be reimbursable to the General Partner by the
Partnership), including the actual cost of (i) filing fees, (ii) Partnership
accounting, (iii) communications with Partners, (iv) legal services, and (v) tax
services. The Limited Partners further agree that, notwithstanding anything to
the contrary in this Agreement, the General Partner may pay to the Partnership,
from any distributions due to the Limited Partners hereunder, the full amount of
any such reimbursements which have not been paid by the Limited Partners as of
the date of such disbursement.
C. To the extent practicable, Partnership expenses shall be billed
directly to and paid by the Partnership. Subject to Section 15.11 hereof,
reimbursements to the General Partner or any of its Affiliates by the
Partnership shall be allowed for the actual cost to the General Partner or any
of its Affiliates of operating and other expenses of the Partnership, including,
without limitation, the actual cost of goods, materials and administrative
services related to (i) Partnership operations, (ii) Partnership accounting,
(iii) communications with Partners, (iv) legal services, (v) tax services, (vi)
computer services, (vii) risk management, (viii) mileage and travel expenses and
(ix) such other related operational and administrative expenses as are necessary
for the prudent organization and operation of the Partnership. "Actual cost of
goods and materials" means the actual cost to the General Partner or any of its
Affiliates of goods and materials used for or by the Partnership obtained from
entities not affiliated with the General Partner, and "actual cost of
administrative services" means the pro rata cost of personnel (as if such
persons were employees of the Partnership) providing administrative services to
the Partnership. The cost for such services to be reimbursed to the General
Partner or any Affiliate thereof shall be the lesser of the General Partner's or
Affiliate's actual cost, or the amount the Partnership would be required to pay
to independent parties for comparable administrative services in the same
geographic location. Notwithstanding the foregoing, the Partnership shall not
reimburse the General Partner or any Affiliate thereof under this Section 7.4
for:
(1) Any rent, depreciation, utilities or other administrative items
generally constituting the General Partner's or Affiliate's overhead; or
(2) Any of the salaries or fringe benefits incurred or allocated to
any Controlling Person of any General Partner or any Affiliate thereof.
Subject to Section 15.11 hereof, reimbursements to the General Partner or any of
its Affiliates by the Partnership pursuant to this Section 7.4 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
Section 7.5. Other Business of General Partner
The General Partner may engage independently or with others in other
business ventures of every nature and description, including, without
limitation, the ownership of other properties and the making or management of
other investments. Nothing in this Agreement shall be deemed to prohibit the
General Partner or any Affiliate of the General Partner from dealing, or
otherwise engaging in business with, Persons transacting business with the
Partnership, or from providing services related to the purchase, sale,
financing, management, development or operation of real or personal property and
receiving compensation therefor, not involving any rebate or reciprocal
arrangement that would have the effect of circumventing any restriction set
forth herein upon dealings with the General Partner or any Affiliate of the
General Partner. Neither the Partnership nor any Partner shall have any right
by virtue of this Agreement or the Partnership relationship created hereby in or
to such other ventures or activities or to the income or proceeds derived
therefrom, and the pursuit of such ventures, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
Section 7.6. Contracts with Affiliates
A. Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property to
the Partnership, directly or indirectly, except pursuant to transactions that
are determined by the General Partner in good faith to be fair and reasonable.
B. The General Partner is expressly authorized to enter into, in the name
and on behalf of the Partnership, a right of first opportunity arrangement and
other conflict avoidance agreements with various Affiliates of the Partnership
and the General Partner, on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.
Section 7.7. Indemnification
A. To the fullest extent permitted by applicable law, the Partnership
shall indemnify each Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorney's fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that
relate to the operations of the Partnership ("Actions") as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) for willful misconduct or a knowing violation of
the law, (ii) for any transaction for which such Indemnitee received an improper
personal benefit in violation or breach of any provision of this Agreement or
(iii) for its obligation under any guaranty. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary
of the Partnership (including, without limitation, any indebtedness which the
Partnership or any Subsidiary of the Partnership has assumed or taken subject
to), and the General Partner is hereby authorized and empowered, on behalf of
the Partnership, to enter into one or more indemnity agreements consistent with
the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such indebtedness. It is the intention of
this Section 7.7.A that the Partnership indemnify each Indemnitee to the fullest
extent permitted by law. The termination of any proceeding by judgment, order
or settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.7A. The termination
of any proceeding by conviction of an Indemnitee or upon a plea of nolo
contendere or its equivalent by an Indemnitee, or an entry of an order of
probation against an Indemnitee prior to judgment, does not create a presumption
that such Indemnitee acted in a manner contrary to that specified in this
Section 7.7.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and neither the General Partner nor any Limited
Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.
B. To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.7.A has been
met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay
the amount if it shall ultimately be determined that the standard of conduct has
not been met.
C. The indemnification provided by this Section 7.7 shall be in addition
to any other rights to which an Indemnitee or any other Person may be entitled
under any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Person,
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
E. Any liabilities which an Indemnitee incurs as a result of acting on
behalf of the Partnership or the General Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of an
employee benefit plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS, penalties
assessed by the Department of Labor, restitutions to such a plan or trust or
other funding mechanism or to a participant or beneficiary of such plan, trust
or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.7, unless such liabilities arise as a
result of (i) such Indemnitee's intentional misconduct or knowing violation of
the law, (ii) any transaction in which such Indemnitee received a personal
benefit in violation or breach of any provision of this Agreement or applicable
law, or (iii) any obligation under a guaranty.
F. In no event may an Indemnitee subject any of the Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in part
under this Section 7.7 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
I. It is the intent of the Partners that any amounts paid by the
Partnership to the General Partner pursuant to this Section 7.7 shall be treated
as "guaranteed payments" within the meaning of Code Section 707(c).
Section 7.8. Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this Agreement,
neither the General Partner nor any of its directors or officers shall be liable
or accountable in damages or otherwise to the Partnership, any Partners or any
Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or
omission if the General Partner or such director or officer acted in good faith.
B. The Limited Partners expressly acknowledge that the General Partner is
acting for the benefit of the Partnership, the Limited Partners and the General
Partner's shareholders collectively and that the General Partner is under no
obligation to give priority to the separate interests of the Limited Partners or
the General Partner's shareholders (including, without limitation, the tax
consequences to Limited Partners, Assignees or the General Partner's
shareholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions.
C. Subject to its obligations and duties as General Partner set forth in
Section 7.1.A hereof, the General Partner may exercise any of the powers granted
to it by this Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its employees or agents (subject to the
supervision and control of the General Partner). The General Partner shall not
be responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith.
D. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's, and its officers' and directors',
liability to the Partnership and the Limited Partners under this Section 7.8 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.
E. Notwithstanding anything herein to the contrary, except for fraud,
willful misconduct or gross negligence, or pursuant to any express indemnities
given to the Partnership by any Partner pursuant to any other written
instrument, no Partner shall have any personal liability whatsoever, to the
Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership's obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, director or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (i) active and deliberate dishonesty established by a non-
appealable final judgment or (ii) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the General
Partner solely as officers of the same and not in their own individual
capacities.
F. To the extent that, at law or in equity, the General Partner has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Limited Partners, the General Partner shall not be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of the General Partner otherwise
existing at law or in equity, are agreed by the Partners to replace such other
duties and liabilities of such General Partner.
Section 7.9. Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters that the General Partner reasonably believes to be within
such Person's professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty that
is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT, (ii) for the General Partner otherwise to satisfy the REIT
Requirements or (iii) to avoid the General Partner incurring any taxes under
Code Section 857 or Code Section 4981, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
Section 7.10. Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively with other Partners or
Persons, she have any ownership interest in such Partnership assets or any
portion thereof. Title to any or all of the Partnership assets may be held in
the name of the Partnership, the General Partner or one or more nominees, as the
General Partner may determine, including Affiliates of the General Partner. The
General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
Section 7.11. Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without the consent or approval of any
other Partner or Person, to encumber, sell or otherwise use in any manner any
and all assets of the Partnership and to enter into any contracts on behalf of
the Partnership, and take any and all actions on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially,. Each
Limited Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expediency of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1. Limitation of Liability
The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement (including, without limitation,
Section 10.4 hereof) or under the Act.
Section 8.2. Management of Business
No Limited Partner or Assignee (other than the General Partner, any of its
Affiliates or any officer, director, member, employee, partner, agent or trustee
of the General Partner, the Partnership or any of their Affiliates, in their
capacity as such) shall take part in the operations, management or control
(within the meaning of the Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, member,
employee, partner, agent, representative, or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.3. Outside Activities of Limited Partners
Subject to any agreements entered into pursuant to Section 7.6.D hereof and
any other agreements entered into by a Limited Partner or its Affiliates with
the General Partner, the Partnership or a Subsidiary (including, without
limitation, any employment agreement), any Limited Partner and any Assignee,
officer, director, employee, agent, trustee, Affiliate or partner of any Limited
Partner shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities that are in direct or indirect competition
with the Partnership or that are enhanced by the activities of the Partnership.
Neither the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. Subject
to such agreements, none of the Limited Partners nor any other Person shall have
any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner, to the extent expressly provided herein), and such Person shall
have no obligation pursuant to this Agreement, subject to Section 7.6.D hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the General Partner, the Partnership or a Subsidiary, to offer any interest
in any such business ventures to the Partnership, any Limited Partner or any
such other Person, even if such opportunity is of a character that, if presented
to the Partnership, any Limited Partner or such other Person, could be taken by
such Person.
Section 8.4. Return of Capital
No Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein.
Except to the extent provided in Article 6 hereof or otherwise expressly
provided in this Agreement, no Limited Partner or Assignee shall have priority
over any other Limited Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions.
Section 8.5. Rights of Limited Partners Relating to the Partnership
A. In addition to other rights provided by this Agreement or by the Act,
each Limited Partner shall have the right, for a purpose reasonably related to
such Limited Partner's interest as a Limited Partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such
Limited Partner's own expense:
(1) to obtain a copy of (i) the most recent annual and quarterly
reports filed with the SEC by the General Partner pursuant to the Exchange
Act and (ii) each report or other written communication sent to the
shareholders of the General Partner;
(2) to obtain a copy of the Partnership's federal, state and local
income tax returns for each Fiscal Year;
(3) to obtain a current list of the name and last known business,
residence or mailing address of each Partner,
(4) to obtain a copy of this Agreement and the Certificate and all
amendments thereto, together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all amendments
thereto have been executed; and
(5) to obtain true and full information regarding the amount of cash
and a description and statement of any other property or services
contributed by each Partner and that each Partner has agreed to contribute
in the future, and the date on which each became a Partner.
B. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion, any
information that (i) the General Partner believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or the General
Partner or (ii) the Partnership or the General Partner is required by law or by
agreements with unaffiliated third parties to keep confidential.
Section 8.6. Intentionally Omitted
Section 8.7. Partnership Right to Call Limited Partner Interests
Notwithstanding any other provision of this Agreement, after January 2,
2005, the Partnership shall have the right, but not the obligation, from time to
time and at any time to redeem any and all outstanding Limited Partner Interests
by notice to such Limited Partner ("Call Notice") that the Partnership has
elected to exercise its rights under this Section 8.7. Within ten (10) Business
Days after receipt of the Call Notice, the Tendering Party shall deliver to the
General Partner a Notice of Redemption and, on the Specified Redemption Date the
Tendering Party shall sell the Tendered Units to the General Partner in exchange
for the Cash Amount. In such event, the Limited Partner holding the Limited
Partner Interest to be redeemed shall be the "Tendering Party" and the entirety
of such Limited Partner Interest shall be the "Tendered Units." In the event
that Tendering Party fails to deliver a Notice of Redemption to the General
Partner as required above, an executed Notice of Redemption shall be deemed
delivered as of ten (10) Business Days after receipt of the Call Notice, the
Cash Amount shall be paid in a manner consistent with the last distribution to
Tendering Party pursuant to this Agreement and the General Partner may take such
steps as necessary to transfer the Tendered Units to General Partner, including
cancellation and reissuance of the Tendered Units. All Partnership Units
acquired by the General Partner pursuant to this Section 8.7 hereof shall
automatically, and without further action required, be converted into and deemed
to be General Partner Interests comprised of the same number of Partnership
Units.
Section 8.8. Other Redemptions
Nothing in this Agreement shall preclude the redemption of a Limited
Partner Interest or Partnership Units by the Partnership upon such terms and
conditions as may be negotiated between the Limited Partner or Assignee holding
such Limited Partner Interest or Partnership Units, on the one hand, and the
General Partner, on the other hand, in their sole and absolute discretion. Such
a redemption may include, without limitation, the payment of cash by the
Partnership to the Limited Partner or Assignee, in a lump sum or in
installments, or the distribution in kind of Partnership assets to such Limited
Partner or Assignee (which assets may be encumbered), including assets to be
designated by the Limited Partner or Assignee and acquired (with or without debt
financing) by the Partnership. Upon any such redemption, the Partnership Units
and Limited Partner Interest redeemed and the applicable Partner Schedule shall
be canceled and Exhibit A shall be amended as appropriate to reflect such
redemption. In effecting any such redemption by negotiated agreement, none of
the Partnership, the General Partner, the Limited Partner and the Assignee, as
the case may be, shall incur any liability to any other Holder of Partnership
Units or have any duty to offer the same or similar terms for redemption of any
other Limited Partner Interest or Partnership Units.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting
A. The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained
by the Act and other books and records deemed by the General Partner to be
appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5.A or Section 9.3 hereof. Any records maintained by or on behalf
of the Partnership in the regular course of its business may be kept on, or be
in the form of, punch cards, magnetic tape, photographs, micrographics or any
other information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.
B. The books of the Partnership shall be maintained, for financial and
tax reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles, or on such other basis as the General Partner
determines to be necessary or appropriate. To the extent permitted by sound
accounting practices and principles, the Partnership and the General Partner may
operate with integrated or consolidated accounting records, operations and
principles.
Section 9.2. Fiscal Year
The Fiscal Year of the Partnership shall be the calendar year.
Section 9.3. Reports
A. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each Fiscal Year, the General Partner shall cause
to be mailed to each Limited Partner of record as of the close of the Fiscal
Year, an annual report containing financial statements of the Partnership, or of
the General Partner if such statements are prepared solely on a consolidated
basis with the General Partner, for such Fiscal Year, presented in accordance
with generally accepted accounting principles. Such statements of the
Partnership need not be audited if such statements are consolidated with audited
financial statements of the General Partner.
B. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each calendar quarter (except the last calendar
quarter of each year), the General Partner shall cause to be mailed to each
Limited Partner, of record as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership, or of the General
Partner, if such statements are prepared solely on a consolidated basis with the
General Partner, and such other information as may be required by applicable law
or regulation or as the General Partner determines to be appropriate.
ARTICLE 10
TAX MATTERS
Section 10.1. Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing of
all returns with respect to Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes. The
Limited Partners shall promptly provide the General Partner with such
information relating to the Contributed Properties, including tax basis and
other relevant information, as may be reasonably requested by the General
Partner from time to time.
Section 10.2. Tax Elections
Except as otherwise provided herein, the General Partner shall, in its sole
and absolute discretion, determine whether to make any available election
pursuant to the Code, including, but not limited to, the election under Code
Section 754 and the election to use the "recurring item" method of accounting
provided under Code Section 461(h) with respect to property taxes imposed on the
Partnership's Properties; provided, however, that, if the "recurring item"
method of accounting is elected with respect to such property taxes, the
Partnership shall pay the applicable property taxes prior to the date provided
in Code Section 461(h) for purposes of determining economic performance. The
General Partner shall have the right to seek to revoke any such election
(including, without limitation, any election under Code Sections 461(h) and 754)
upon the General Partner's determination in its sole and absolute discretion
that such revocation is in the best interests of the Partners.
Section 10.3. Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. The tax matters partner shall
receive no compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such (including
legal and accounting fees and expenses) shall be borne by the Partnership in
addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services is reasonable. At
the request of any Limited Partner, the General Partner agrees to consult with
such Limited Partner with respect to the preparation and filing of any returns
and with respect to any subsequent audit or litigation relating to such returns;
provided, however, that the filing of such returns shall be in the sole and
absolute discretion of the General Partner.
B. The tax matters partner is authorized, but not required:
(1) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership
items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters partner may
expressly state that such agreement shall bind all Partners, except that
such settlement agreement shall not bind any Partner (i) who (within the
time prescribed pursuant to the Code and Regulations) files a statement
with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner or
(ii) who is a "notice partner" (as defined in Code Section 6231) or a
member of a "notice group" (as defined in Code Section 6223(b)(2));
(2) in the event that a notice of a final administrative adjustment
at the Partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the tax
matters partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the United States
Tax Court or the United States Claims Court, or the filing of a complaint
for refund with the District Court of the United States for the district in
which the Partnership's principal place of business is located;
(3) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(4) to file a request for an administrative adjustment with the IRS
at any time and, if any part of such request is not allowed by the IRS, to
file an appropriate pleading (petition or complaint) for judicial review
with respect to such request;
(5) to enter into an agreement with the IRS to extend the period for
assessing any tax that is attributable to any item required to be taken
into account by a Partner for tax purposes, or an item affected by such
item; and
(6) to take any other action on behalf of the Partners in connection
with any tax audit or judicial review proceeding to the extent permitted by
applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 7.7 hereof shall be fully applicable to the tax
matters partner in its capacity as such.
Section 10.4. Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from or
pay on behalf of or with respect to such Limited Partner any amount of federal,
state, local or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Section 1441, Code Section 1442, Code Section 1445
or Code Section 1446. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner,
which loan shall be repaid by such Limited Partner within fifteen (15) days
after notice from the General Partner that such payment must be made unless
(i) the Partnership withholds such payment from a distribution that would
otherwise be made to the Limited Partner or (ii) the General Partner determines,
in its sole and absolute discretion, that such payment may be satisfied out of
the Available Funds of the Partnership that would, but for such payment, be
distributed to the Limited Partner. Each Limited Partner hereby unconditionally
and irrevocably grants to the Partnership a security interest in such Limited
Partner's Partnership Interest to secure such Limited Partner's obligation to
pay to the Partnership any amounts required to be paid pursuant to this
Section 10.4. In the event that a Limited Partner fails to pay any amounts owed
to the Partnership pursuant to this Section 10.4 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner (including, without limitation, the right to receive
distributions). Any amounts payable by a Limited Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the WALL STREET JOURNAL,
plus four (4) percentage points (but not higher than the maximum lawful rate)
from the date such amount is due (i.e., fifteen (15) days after demand) until
such amount is paid in full. Each Limited Partner shall take such actions as
the Partnership or the General Partner shall request in order to perfect or
enforce the security interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer
A. No part of the interest of a Partner shall be subject to the claims of
any creditor, to the claims of any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be Transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article 11.
Any Transfer or purported Transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void ab initio.
Section 11.2. Transfer of General Partner's Partnership Interest
A. The General Partner may not Transfer any of its General Partner
Interest or withdraw from the Partnership except as provided in Sections 11.2.B
and 11.2.C hereof.
B. The General Partner shall not withdraw from the Partnership and shall
not Transfer all or any portion of its interest in the Partnership (whether by
sale, disposition, statutory merger or consolidation, liquidation or otherwise)
without the Consent of the Limited Partners, which Consent may be given or
withheld in the sole and absolute discretion of the Limited Partners; provided
that no Consent of the Limited Partners shall be necessary (a) after January 2,
2005, nor (b) after January 2, 2001 pursuant to Section 7.3(B)(6), nor (c) if
the General Partner shall Transfer its interest in the Partnership to a Person
who will assume the obligations of General Partner. Upon any Transfer of such a
Partnership Interest pursuant to the Consent of the Limited Partners and
otherwise in accordance with the provisions of this Section 11.2.B, the
transferee shall become a successor General Partner for all purposes herein, and
shall be vested with the powers and rights of the transferor General Partner,
and shall be liable for all obligations and responsible for all duties of the
General Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such
transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Interest so acquired. It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership
Interest, and such Transfer shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of the Limited Partners.
In the event that the General Partner withdraws from the Partnership, in
violation of this Agreement or otherwise, or otherwise dissolves or terminates,
or upon the bankruptcy of the General Partner, a majority in interest of the
remaining Partners may elect to continue the Partnership business by selecting a
successor General Partner in accordance with the Act.
Section 11.3. Limited Partners' Rights to Transfer
A. General. No Limited Partner shall Transfer all or any portion of its
Partnership Interest to any transferee without the consent of the General
Partner, which consent may be withheld in its sole and absolute discretion;
provided, however, that any Limited Partner may, at any time, without the
consent of the General Partner, transfer all or part of its Partnership Interest
to any Designated Party, any Controlled Entity or any Affiliate, provided that
the transferee is, in any such case, a Qualified Transferee (any Transfer
permitted by this proviso is hereinafter referred to as a "Permitted Transfer"),
subject to the provisions of Section 11.6 hereof and to satisfaction of each of
the following conditions:
(1) General Partner Right of First Refusal. The transferring Partner
shall give written notice of the proposed Transfer to the General Partner,
which notice shall state (i) the identity of the proposed transferee and
(ii) the amount, type and timing of consideration proposed to be received
for the Transferred Partnership Units. The General Partner shall have ten
(10) Business Days upon which to give the Transferring Partner notice of
its election to acquire the Partnership Units on the proposed terms. If it
so elects, it shall purchase the Partnership Units on such terms within ten
(10) Business Days after giving notice of such election. If it does not so
elect, the Transferring Partner may Transfer such Partnership Units to a
third party, on terms no more favorable to the transferee than the proposed
terms provided to the General Partner pursuant to clause (ii) above,
subject to the other conditions of this Section 11.3.
(2) Qualified Transferee. Any Transfer of a Partnership Interest
shall be made only to a single Qualified Transferee; provided, however,
that, for such purposes, all Qualified Transferees that are Affiliates, or
that comprise investment accounts or funds managed by a single Qualified
Transferee and its Affiliates, shall be considered together to be a single
Qualified Transferee; provided, further, that each Transfer meeting the
minimum Transfer restriction of Section 11.3.A(3) hereof may be to a
separate Qualified Transferee.
(3) Minimum Transfer Restriction. Any Transferring Partner must
Transfer not less than all of the remaining Partnership Units owned by such
Transferring Partner; provided, however, that, for purposes of determining
compliance with the foregoing restriction, all Partnership Units owned by
Affiliates of a Limited Partner shall be considered to be owned by such
Limited Partner.
(4) Transferee Agreement to Effect a Redemption. Any proposed
transferee shall deliver to the General Partner a written agreement
reasonably satisfactory to the General Partner to the effect that the
transferee will, within six (6) months after consummation of the
Partnership Units Transfer, tender its Partnership Units for Redemption in
accordance with the terms of the Redemption rights provided in Section 8.6
hereof.
(5) No Further Transfers. The transferee (other than a Designated
Party) shall not be permitted to effect any further Transfer of the
Partnership Units, other than to the General Partner.
(6) The proposed transferee shall deliver to the General Partner the
representations in clauses (ii) and (iii) of Section 3.4.A, in the case of
a proposed transferee that is an individual, or clauses (iii) and (iv) of
Section 3.4.B, in the case of any other proposed transferee.
It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is a Permitted Transfer that the transferee assume by operation of
law or express agreement all of the obligations of the transferor Limited
Partner under this Agreement with respect to such Transferred Partnership
Interest, and no such Transfer (other than pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Partner
are assumed by a successor corporation by operation of law) shall relieve the
transferor Partner of its obligations under this Agreement without the approval
of the General Partner, in its sole and absolute discretion. Notwithstanding
the foregoing, any transferee of any Transferred Partnership Interest shall be
subject to any and all ownership limitations contained in the Charter that may
limit or restrict such transferee's ability to exercise its Redemption rights,
including, without limitation, the Ownership Limit. Any transferee, whether or
not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee, whether by a voluntary Transfer, by operation of
law or otherwise, shall have any rights hereunder, other than the rights of an
Assignee as provided in Section 11.5 hereof.
B. Incapacity. If a Limited Partner is subject to Incapacity, the
executor, administrator, trustee, committee, guardian, conservator or receiver
of such Limited Partner's estate shall have all the rights of a Limited Partner,
but not more rights than those enjoyed by other Limited Partners, for the
purpose of settling or managing the estate, and such power as the Incapacitated
Limited Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
C. Opinion of Counsel. In connection with any Transfer of a Limited
Partner Interest, the General Partner shall have the right to receive an opinion
of counsel reasonably satisfactory to it to the effect that the proposed
Transfer may be effected without registration under the Securities Act and will
not otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred. If, in
the opinion of such counsel, such Transfer would require the filing of a
registration statement under the Securities Act or would otherwise violate any
federal or state securities laws or regulations applicable to the Partnership or
the Partnership Units, the General Partner may prohibit any Transfer otherwise
permitted under this Section 11.3 by a Limited Partner of Partnership Interests.
D. Adverse Tax Consequences. No Transfer by a Limited Partner of its
Partnership Interests (including any Redemption, any other acquisition of
Partnership Units by the General Partner or any acquisition of Partnership Units
by the Partnership) may be made to any person if (i) in the opinion of legal
counsel for the Partnership, it would create a material risk of the Partnership
being treated as an association taxable as a corporation, or (ii) such Transfer
is effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" within the meaning of Code
Section 7704.
Section 11.4. Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee
(including any Designated Party or other transferees pursuant to Transfers
permitted by Section 11.3 hereof) as a Limited Partner in its place. A
transferee (including, but not limited to, any Designated Party) of a Limited
Partner may be admitted as a Substituted Limited Partner only with the Consent
of the General Partner, which Consent may be given or withheld by the General
Partner in its sole and absolute discretion. The failure or refusal by the
General Partner to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or the General Partner. Subject to the foregoing, an Assignee
shall not be admitted as a Substituted Limited Partner until and unless it
furnishes to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all the terms, conditions and
applicable obligations of this Agreement, including, without limitation, the
power of attorney granted in Section 2.4 hereof, (ii) a Partner Schedule
executed by such Assignee and (iii) such other documents and instruments as may
be required or advisable, in the sole and absolute discretion of the General
Partner, to effect such Assignee's admission as a Substituted Limited Partner.
B. A transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name and address of such
Substituted Limited Partner and to eliminate, if necessary, the name and address
of the predecessor of such Substituted Limited Partner. In addition, the
Substituted Limited Partner and the General Partner shall execute a Partner
Schedule with respect to such Substituted Limited Partner, which Partner
Schedule shall supersede, to the extent necessary, the Partner Schedule for the
predecessor of such Substituted Limited Partner.
Section 11.5. Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee under Section 11.3 hereof
as a Substituted Limited Partner, as described in Section 11.4 hereof, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions
from the Partnership and the share of Net Income, Net Losses and other items of
income, gain, loss, deduction and credit of the Partnership attributable to the
Partnership Units assigned to such transferee and the rights to Transfer the
Partnership Units provided in this Article 11, but shall not be deemed to be a
holder of Partnership Units for any other purpose under this Agreement (other
than as expressly provided in Section 8.6 hereof with respect to a Qualifying
Party that becomes a Tendering Party), and shall not be entitled to effect a
Consent or vote with respect to such Partnership Units on any matter presented
to the Limited Partners for approval (such right to Consent or vote, to the
extent provided in this Agreement or under the Act, fully remaining with the
transferor Limited Partner). In the event that any such transferee desires to
make a further assignment of any such Partnership Units, such transferee shall
be subject to all the provisions of this Article 11 to the same extent and in
the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.
Section 11.6. General Provisions
A. No Limited Partner may withdraw from the Partnership other than as a
result of a permitted Transfer of all of such Limited Partner's Partnership
Units in accordance with this Article 11, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a Redemption (or
acquisition by the General Partner) of all of its Partnership Units under
Section 8.6 hereof.
B. Any Limited Partner who shall Transfer all of its Partnership Units in
a Transfer (i) permitted pursuant to this Article 11 where the transferee was
admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its
rights to effect a Redemption of all of its Partnership Units under Section 8.6
hereof or (iii) to the General Partner, whether or not pursuant to Section 8.6.B
hereof, shall cease to be a Limited Partner.
C. If any Partnership Unit is Transferred in compliance with the
provisions of this Article 11, or is redeemed by the Partnership or acquired by
the General Partner pursuant to Section 8.6 hereof, on any day other than the
first day of a Fiscal Year, then Net Income, Net Losses, each item thereof and
all other items of income, gain, loss, deduction and credit attributable to such
Partnership Unit for such Fiscal Year shall be allocated to the transferor
Partner or the Tendering Party, as the case may be, and, in the case of a
Transfer or assignment other than a Redemption, to the transferee Partner
(including, without limitation, the General Partner in the case of an
acquisition of Partnership Units pursuant to Section 8.6 hereof) or Assignee, by
taking into account their varying interests during the Fiscal Year in accordance
with Code Section 706(d), using the "daily proration" or "interim closing of the
books" method or another permissible method selected by the General Partner in
its sole and absolute discretion. Solely for purposes of making such
allocations, the General Partner, in its sole and absolute discretion, may
determine that each of such items for the calendar month in which a Transfer
occurs shall be allocated to the transferee Partner or Assignee and none of such
items for the calendar month in which a Transfer or a Redemption occurs shall be
allocated to the transferor Partner or the Tendering Party, as the case may be,
if such Transfer occurs on or after the fifteenth (15th) day of the month;
otherwise such items for such calendar month shall be allocated to the
transferor. All distributions of Available Cash attributable to such
Partnership Unit with respect to which the Partnership Record Date is before the
date of such Transfer, assignment or Redemption shall be made to the transferor
Partner or the Tendering Party, as the case may be, and, in the case of a
Transfer other than a Redemption, all distributions of Available Cash thereafter
attributable to such Partnership Unit shall be made to the transferee Partner or
Assignee.
D. In addition to any other restrictions on Transfer herein contained, in
no event may any Transfer or assignment of a Partnership Interest by any Partner
(including any Redemption, any acquisition of Partnership Units by the General
Partner or any other acquisition of Partnership Units by the Partnership) be
made:
(a) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest;
(b) in violation of applicable law;
(c) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all
other components of a Partnership Interest;
(d) in the event that such Transfer would cause the General Partner
to cease to comply with the REIT Requirements;
(e) if such Transfer would, in the opinion of counsel to the
Partnership or the General Partner, cause a termination of the Partnership,
in either case for federal or state income tax purposes (except as a result
of the Redemption (or acquisition by the General Partner) of all
Partnership Units held by all Limited Partners);
(f) if such Transfer would, in the opinion of legal counsel to the
Partnership, cause the Partnership either (i) to cease to be classified as
a partnership or (ii) to be classified as a publicly traded partnership, in
either case for federal income tax purposes (except as a result of the
Redemption (or acquisition by the General Partner) of all Partnership Units
held by all Limited Partners);
(g) if such Transfer would cause the Partnership to become, with
respect to any employee benefit plan subject to Title I of ERISA, a "party-
in-interest" (as defined in ERISA Section 3(14)) or a "disqualified person"
(as defined in Code Section 4975(c));
(h) if such Transfer would, in the opinion of legal counsel to the
Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of
Labor Regulations Section 2510.2-101;
(i) if such Transfer requires the registration of such Partnership
Interest pursuant to any applicable federal or state securities laws;
(j) if such Transfer would cause the Partnership to have more than
one hundred (100) partners (including as partners those persons indirectly
owning an interest in the Partnership through a partnership, limited
liability company, subchapter S corporation or grantor trust);
(k) if such Transfer causes the Partnership (as opposed to the
General Partner) to become a reporting company under the Exchange Act; or
(1) if such Transfer subjects the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or
ERISA, each as amended.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner
A successor to all of the General Partner's General Partner Interest
pursuant to Section 11.2 hereof who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to such Transfer. Any such successor shall carry on
the business of the Partnership without dissolution. In each case, the
admission shall be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms, conditions and
applicable obligations of this Agreement and such other documents or instruments
as may be required to effect the admission.
Section 12.2. Admission of Additional Limited Partners
A. After the admission to the Partnership of the initial Limited Partners
on the date hereof, a Person (other than an existing Partner) who makes a
Capital Contribution to the Partnership in accordance with this Agreement shall
be admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms, conditions
and applicable of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a Partner Schedule executed by such
Person and (iii) such other documents or instruments as may be required in the
sole and absolute discretion of the General Partner in order to effect such
Person's admission as an Additional Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the Partnership on
any day other than the first day of a Fiscal Year, then Net Income, Net Losses,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Partners and Assignees for such Fiscal Year shall be
allocated among such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests during the Fiscal Year
in accordance with Code Section 706(d), using the "interim closing of the books"
method or another permissible method selected by the General Partner in its sole
and absolute discretion. Solely for purposes of making such allocations, each
of such items for the calendar month in which an admission of any Additional
Limited Partner occurs shall be allocated among all the Partners and Assignees
including such Additional Limited Partner, in accordance with the principles
described in Section 11.6.C hereof. All distributions of Available Cash with
respect to which the Partnership Record Date is before the date of such
admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions of Available Cash thereafter
shall be made to all the Partners and Assignees including such Additional
Limited Partner.
Section 12.3. Amendment of Agreement and
Certificate of Limited Partnership
For the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary and appropriate under the Act to amend the
records of the Partnership and, if necessary, to prepare as soon as practical an
amendment of this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may
for this purpose exercise the power of attorney granted pursuant to Section 2.4
hereof.
Section 12.4. Admission of Initial Limited Partners
The Persons listed on Exhibit A as limited partners of the Partnership
shall be admitted to the Partnership as Limited Partners upon their execution
and delivery of this Agreement.
Section 12.5. Limit on Number of Partners
No Person shall be admitted to the Partnership as a Substituted Limited
Partner or an Additional Limited Partner if the effect of such admission would
be to cause the Partnership to have more than one hundred (100) Partners,
including as Partners for this purpose those Persons indirectly owning an
interest in the Partnership through another partnership, a limited liability
company, a subchapter S corporation or a grantor trust, or otherwise cause the
Partnership to become a reporting company under the Exchange Act.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1. Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership without dissolution. However, the
Partnership shall dissolve, and its affairs shall be wound up, upon the first to
occur of any of the following (each a "Liquidating Event"):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal, as defined in the Act (including, without
limitation, bankruptcy), of the sole General Partner unless, within ninety
(90) days after the withdrawal, a "majority in interest" of the remaining
Partners agree in writing, in their sole and absolute discretion, to
continue the business of the Partnership and to the appointment, effective
as of the date of withdrawal, of a successor General Partner;
C. an election to dissolve the Partnership made by the General
Partner on or after the date of delivery of the Call Notice, in its sole
and absolute discretion, with or without the consent of all the Limited
Partners;
D. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
E. the occurrence of a Terminating Capital Transaction in accordance
with the terms of this Agreement; or
F. the redemption (or acquisition by the General Partner) of all
Partnership Units other than Partnership Units held by the General Partner;
or
G. upon the consent of all the Limited Partners and the General
Partner.
Section 13.2. Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and Partners.
After the occurrence of a Liquidating Event, no Partner shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding
up of the Partnership's business and affairs. The General Partner (or, in the
event that there is no remaining General Partner or the General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate,
any Person elected by a Majority in Interest of the Limited Partners (the
General Partner or such other Person being referred to herein as the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the General Partner) shall be applied and distributed
in the following order:
(1) First, to the satisfaction of all of the Partnership's debts and
liabilities to creditors other than the Partners and their Assignees
(whether by payment or the making of reasonable provision for payment
thereof);
(2) Second, to the satisfaction of all of the Partnership's debts and
liabilities to the General Partner (whether by payment or the making of
reasonable provision for payment thereof), including, but not limited to,
amounts due as reimbursements under Section 7.4 hereof;
(3) Third, to the satisfaction of all of the Partnership's debts and
liabilities to the other Partners and any Assignees (whether by payment or
the making of reasonable provision for payment thereof); and
(4) The balance, if any, to the General Partner, the Limited Partners
and any Assignees in accordance with and in proportion to their positive
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
C. In the event that the Partnership is "liquidated" within the meaning
of Regulations Section 1.704-1 (b)(2)(i)(g), distributions shall be made
pursuant to this Article 13 to the Partners and Assignees that have positive
Capital Accounts in compliance with Regulations Section 1.704- 1(b)(2)(ii)(b)(2)
to the extent of, and in proportion to, positive Capital Account balances. If
any Partner has a deficit balance in its Capital Account (after giving effect to
all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall
have no obligation to make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other Person for any purpose whatsoever. In
the sole and absolute discretion of the General Partner or the Liquidator, a pro
rata portion of the distributions that would otherwise be made to the Partners
pursuant to this Article 13 may be withheld or escrowed to provide a reasonable
reserve for Partnership liabilities (contingent or otherwise) and to reflect the
unrealized portion of any installment obligations owed to the Partnership,
provided that such withheld or escrowed amounts shall be distributed to the
General Partner and Limited Partners in the manner and order of priority set
forth in Section 13.2.A hereof as soon as practicable.
Section 13.3. Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the event that
the Partnership is liquidated within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership's
Property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be treated for federal income tax purposes as
having either (a) distributed the Properties in kind to the Partners and the
Assignees, who shall be deemed to have assumed and taken such Property subject
to all Partnership liabilities, all in accordance with their respective Capital
Accounts, followed by a deemed recontribution of the Partnership Property in
kind to the Partnership, which shall be deemed to have assumed and taken such
Property subject to all such liabilities, or (b) contributed the Properties to a
new partnership in exchange for interests in such new partnership and then
liquidated, distributing the interests in such new Partnership to the Partners
in accordance with their Capital Accounts, as required by the then-applicable
Code and Regulations; provided, however, that nothing in this Section 13.4 shall
be deemed to have constituted any Assignee as a Substituted Limited Partner
without compliance with the provisions of Section 11.4 hereof.
Section 13.4. Rights of Limited Partners
Except as otherwise provided in this Agreement, (a) each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contribution, (b) no Limited Partner shall have the right or power to demand or
receive property other than cash from the Partnership and (c) no Limited Partner
shall have priority over any other Limited Partner as to the return of its
Capital Contributions, distributions or allocations.
Section 13.5. Notice of Dissolution
In the event that a Liquidating Event occurs or an event occurs that would,
but for an election or objection by one or more Partners pursuant to
Section 13.1 hereof, result in a dissolution of the Partnership, the General
Partner shall, within thirty (30) days thereafter, provide written notice
thereof to each of the Partners and, in the General Partner's sole and absolute
discretion or as required by the Act, to all other parties with whom the
Partnership regularly conducts business (as determined in the sole and absolute
discretion of the General Partner), and the General Partner may, or, if required
by the Act, shall, publish notice thereof in a newspaper of general circulation
in each place in which the Partnership regularly conduct business (as determined
in the sole and absolute discretion of the General Partner).
Section 13.6. Cancellation of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership cash and property
as provided in Section 13.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed with the State of California, all
qualifications of the Partnership as a foreign limited partnership or
association in jurisdictions other than the State of California shall be
canceled, and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 13.7. Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
ARTICLE 14
PROCEDURES FOR ACTIONS AND CONSENTS
OF PARTNERS; AMENDMENTS; MEETINGS
Section 14.1. Procedures for Actions and Consents of Partners
The actions requiring consent or approval of Limited Partners pursuant to
this Agreement, including Section 7.3 hereof, or otherwise pursuant to
applicable law, are subject to the procedures set forth in this Article 14.
Section 14.2. Amendments
Amendments to this Agreement may be proposed by the General Partner or by a
Majority in Interest of the Limited Partners. Following such proposal, the
General Partner shall submit any proposed amendment to the Limited Partners.
The General Partner shall seek the written consent of the Limited Partners on
the proposed amendment or shall call a meeting to vote thereon and to transact
any other business that the General Partner may deem appropriate. For purposes
of obtaining a written consent, the General Partner may require a response
within a reasonable specified time, but not less than fifteen (15) days, and
failure to respond in such time period shall constitute a consent that is
consistent with the General Partner's recommendation with respect to the
proposal; provided, however, that an action shall become effective at such time
as requisite consents are received even if prior to such specified time.
Section 14.3. Meetings of the Partners
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
a Majority in Interest of the Limited Partners. The call shall state the nature
of the business to be transacted. Notice of any such meeting shall be given to
all Partners not less than seven (7) days nor more than thirty (30) days prior
to the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of Partners
or may be given in accordance with the procedure prescribed in Section 14.3.B
hereof.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Partners holding a majority of the Partnership
Units (or such other percentage as is expressly required by this Agreement for
the action in question). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of Partners
holding a majority of the Partnership Units (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act for
such Limited Partner by proxy on all matters in which a Limited Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the Limited Partner
or its attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy (or
there is receipt of a proxy authorizing a later date). Every proxy shall be
revocable at the pleasure of the Limited Partner executing it, such revocation
to be effective upon the Partnership's receipt of written notice of such
revocation from the Limited Partner executing such proxy.
D. Each meeting of Partners shall be conducted by the General Partner or
such other Person as the General Partner may appoint pursuant to such rules for
the conduct of the meeting as the General Partner or such other Person deems
appropriate in its sole and absolute discretion. Without limitation, meetings
of Partners may be conducted in the same manner as meetings of the General
Partner's shareholders and may be held at the same time as, and as part of, the
meetings of the General Partner's shareholders.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1. Addresses and Notice
Any notice, demand, request or report required or permitted to be given or
made to a Partner or Assignee under this Agreement shall be in writing and shall
be deemed given or made when delivered in person or when sent by first class
United States mail or by other means of written communication (including by
telecopy, facsimile, or commercial courier service) (i) in the case of a
Partner, to such Partner at the address set forth in Exhibit A (or, if Exhibit A
has not been amended to reflect the address of any such Partner, the Partner
Schedule with respect to such Partner) or such other address of which the
Partner shall notify the General Partner in writing and (ii) in the case of an
Assignee, to the address of which such Assignee shall notify the General Partner
in writing.
Section 15.2. Titles and Captions
All article or section titles or Captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" or
"Sections" are to Articles and Sections of this Agreement.
Section 15.3. Pronouns and Plurals
Whenever the context may requires any pronouns used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa.
Section 15.4. Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
Section 15.6. Waiver
A. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
B. The restrictions, conditions and other limitations on the rights and
benefits of the Limited Partners contained in this Agreement. and the
representations, duties, covenants and other requirements of performance or
notice by the Limited Partners, are for the benefit of the Partnership and,
except for an obligation to pay money to the Partnership, may be waived or
relinquished by the General Partner, in its sole and absolute discretion, on
behalf of the Partnership in one or more instances from time to time and at any
time: provided, however, that any such waiver or relinquishment may not made if
it would have the effect of (i) creating liability for any other Limited
Partner, (ii) causing the Partnership to cease to qualify as a limited
partnership, (iii) reducing the amount of cash otherwise distributable to the
Limited Partners, (iv) resulting in the classification of the Partnership as an
association or publicly traded partnership taxable as a corporation or
(v) violating the Securities Act, the Exchange Act or any state "blue sky" or
other securities laws; provided, further, that any waiver relating to compliance
with the Ownership Limit or other restrictions in the Charter shall be made and
shall be effective only as provided in the Charter.
Section 15.7. Counterparts
This Agreement may be executed in counterparts, all of which together shall
constitute one agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto or upon execution of a Partner Schedule.
Section 15.8. Applicable Law
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of California, without regard to the
principles of conflicts of law. In the event of a conflict between any
provision of this Agreement and any non-mandatory provision of the Act, the
provisions of this Agreement shall control and take precedence.
Section 15.9. Entire Agreement
This Agreement contains all of the understandings and agreements between
and among the Partners with respect to the subject matter of this Agreement and
the rights, interests and obligations of the Partners with respect to the
Partnership.
Section 15.10. Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
Section 15.11. Limitation to Preserve REIT Status
Notwithstanding anything else in this Agreement, to the extent that the
amount paid, credited, distributed or reimbursed by the Partnership to, for or
with respect to any REIT Partner or its officers, directors, employees or
agents, whether as a reimbursement, fee, expense or indemnity (a "REIT
Payment"), would constitute gross income to the REIT Partner for purposes of
Code Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any
other provision of this Agreement, the amount of such REIT Payments, as selected
by the General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced
for any Fiscal Year so that the REIT Payments, as so reduced, to, for or with
respect to such REIT Partner shall not exceed the lesser of:
(a) an amount equal to the excess, if any, of (i) four and nine-
tenths percent (4.9%) of the REIT Partner's total gross income (but
excluding the amount of any REIT Payments) for the Fiscal Year that is
described in subsections (A) through (H) of Code Section 856(c)(2) over
(ii) the amount of gross income (within the meaning of Code
Section 856(c)(2)) derived by the REIT Partner from sources other than
those described in subsections (A) through (H) of Code Section 856(c)(2)
(but not including the amount of any REIT Payments); or
(b) an amount equal to the excess, if any, of (i) twenty-four percent
(24%) of the REIT Partner's total gross income (but excluding the amount of
any REIT Payments) for the Fiscal Year that is described in subsections (A)
through (I) of Code Section 856(c)(3) over (ii) the amount of .gross income
(within the meaning of Code Section 856(c)(3)) derived by the REIT Partner
from sources other than those described in subsections (A) through (I) of
Code Section 856(c)(3) (but not including the amount of any REIT Payments);
provided, however, that REIT Payments in excess of the amounts set forth in
clauses (a) and (b) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts shall not adversely affect the REIT Partner's ability to qualify as a
REIT. To the extent that REIT Payments may not be made in a Fiscal Year as a
consequence of the limitations set forth in this Section 15.11, such REIT
Payments shall carry over and shall be treated as arising in the following
Fiscal Year. The purpose of the limitations contained in this Section 15.11 is
to prevent any REIT Partner from failing to qualify as a REIT under the Code by
reason of such REIT Partner's share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly
from the Partnership, and this Section 15.11 shall be interpreted and applied to
effectuate such purpose.
Section 15.12. No Partition
No Partner nor any successor-in-interest to a Partner shall have the right
while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute to any proceeding at law or in
equity to have such property of the Partnership partitioned, and each Partner,
on behalf of itself and its successors and assigns hereby waives any such right.
It is the intention of the Partners that the rights of the parties hereto and
their successors-in-interest to Partnership property, as among themselves, shall
be governed by the terms of this Agreement, and that the rights of the Partners
and their successors-in-interest shall be subject to the limitations and
restrictions as set forth in this Agreement.
Section 15.13. No Third-Party Rights Created Hereby
The provisions of this Agreement are solely for the purpose of defining the
interests of the Partners, inter se; and no other person, firm or entity (i.e.,
a party who is not a signatory hereto or a permitted successor to such signatory
hereto) shall have any right, power, title or interest by way of subrogation or
otherwise, in and to the rights, powers, title and provisions of this Agreement.
No creditor or other third party having dealings with the Partnership shall have
the right to enforce the right or obligation of any Partner to make Capital
Contributions or loans to the Partnership or to pursue any other right or remedy
hereunder or at law or in equity. None of the rights or obligations of the
Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may any such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or any of
the Partners.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER: INITIAL LIMITED PARTNER:
THE PRICE REIT, INC., ALTAMONTE JOINT VENTURE,
a Maryland corporation a Florida general partnership
By: /JOSEPH KORNWASSER/ By: RIDA Renaissance Limited Partnership,
Name: Joseph Kornwasser a Florida limited partnership and a
Title: President/CEO general partner therein
By: RIDA Realty Investments of Florida,
Inc., a Florida corporation and a
general partner therein
By: /IRA MITZNER/
Name: Ira Mitzner
Title: Vice President
By: Lemac Equities Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By: /IRA MITZNER/
Name: Ira Mitzner
Title: Vice President
EXHIBIT A
PARTNERS AND ADDRESSES
GENERAL PARTNER
The Price REIT, Inc. Initial cash contribution: $26,433,000.00
plus closing costs
145 South Fairfax Avenue Initial Partnership Units: 26,433,000
Fourth Floor
Los Angeles, CA 90036
LIMITED PARTNER
Altamonte Joint Venture Initial cash contribution: 0
c/o Rida Development Corporation Initial Partnership Units: 267,000
5444 Westheimer, Suite 1605
Houston, Texas 77056
EXHIBIT B
LEGAL DESCRIPTION
EXHIBIT C
NOTICE OF REDEMPTION
To: The Price REIT, Inc.
145 South Fairfax Avenue
Fourth Floor
Los Angeles, CA 90036
The undersigned Limited Partner or Assignee hereby irrevocably tenders
Partnership Units in The PRICE REIT Renaissance Partnership, L.P. for redemption
in accordance with the terms of the Agreement of Limited Partnership of The
PRICE REIT Renaissance Partnership, L.P., dated as of August [21], 1997, as
amended (the "Agreement"). The undersigned Limited Partner or Assignee:
(a) undertakes (i) to surrender such Partnership Units and any
certificate therefor on the Specified Redemption Date and (ii) to furnish
to the General Partner, prior to the Specified Redemption Date, the
documentation, instruments and information required under the Agreement;
(b) directs that the certified check representing the Cash Amount
deliverable on the Specified Redemption Date be delivered to the address
specified below;
(c) represents, warrants, certifies and agrees that:
(1) the undersigned Limited Partner or Assignee is a Qualifying
Party,
(2) the undersigned Limited Partner or Assignee has, and on the
Specified Redemption Date will have, good, marketable and unencumbered
title to such Partnership Units, free and clear of the rights or
interests of any other person or entity,
(3) the undersigned Limited Partner or Assignee has, and on the
Specified Redemption Date will have, the full right, power and
authority to tender and surrender such Partnership Units as provided
herein, and
(4) the undermined Limited Partner or Assignee has obtained the
consent or approval of all persons and entities, if any, having the
right to consent to or approve such tender and surrender; and
(d) acknowledges that the undersigned will continue to own such
Partnership Units until such redemption transaction closes.
All capitalized terms used herein and not otherwise defined shall have the
same meaning ascribed to them respectively in the Agreement.
Dated:
Name of Limited Partner
or Assignee:
(Signature of Limited Partner or Assignee)
(Street Address)
(City) (State)
(Zip Code)
Signature Guaranteed by:
Issue Check Payable to:
Please insert social security or identifying number:
EXHIBIT D
FORM OF PARTNER SCHEDULE
[initial or Additional Limited Partner
version]
PARTNER SCHEDULE
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS PARTNER SCHEDULE is executed by The Price REIT, Inc., a Maryland
corporation (the "General Partner"), and the party named below (the "Limited
Partner") in respect of The PRICE REIT Renaissance Partnership, L.P., a
California limited partnership (the "Partnership").
1. Name, Address and Taxpayer Identification Number of Limited Partner
Altamonte Joint Venture
c/o Rida Development Corporation
5444 Westheimer, Suite 1605
Houston, Texas 77056
TIN:
2. Capital Contributions by Limited Partner
Cash contribution: $ 0
Contributed Properties:
Contributed Property Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
- -------------------- ----------------- -------------------- ---------------
Renaissance Center $33,700,000 $33,433,000 $267,000
3. Partnership Units
Partnership Units issued to Limited Partner: 267,000
4. Admission of Limited Partner
The Limited Partner is admitted to the Partnership as a Limited Partner.
The General Partner hereby consents to such admission.
5. Designated Parties
None
6. Agreement
The Limited Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the Partnership.
The Limited Partner specifically confirms (a) the representations and warranties
contained in Section 3.4 of such Agreement of Limited Partnership, as amended,
for the Partnership and (b) the grant of the power of attorney set forth in
Section 2.4 of such Agreement.
7. Additional Terms and Conditions
None
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as of
the date indicated below.
Dated: August , 1997 "General Partner":
THE PRICE REIT, INC., as General Partner of THE
PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
By
"Limited Partner":
ALTAMONTE JOINT VENTURE,
a Florida general partnership
By: RIDA Renaissance Limited Partnership,
a Florida limited partnership and a general
partner therein
By: RIDA Realty Investments of Florida,
Inc., a Florida corporation and a
general partner therein
By:
Name:
Title:
By: Lemac Equities, Ltd.,
a Florida limited partnership
By: Lemac, Inc.,
a Florida corporation
By:
Name:
Title:
[Substituted Limited Partner version]
PARTNER SCHEDULE
THE PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
THIS PARTNER SCHEDULE is executed by The Price REIT, Inc., a Maryland
corporation (the "General Partner"), and the party named below (the "Substituted
Partner") in respect of The PRICE REIT Renaissance Partnership, L.P., a
California limited partnership (the "Partnership").
1. Name, Address and Taxpayer Identification Number of Substituted Partner
TIN:
2. Capital Contributions by Predecessor Partner
The Substituted Partner has succeeded to the following Capital
Contributions made to the Partnership by its predecessor:
Name of Predecessor:
Cash contribution: $
Contributed Properties:
Contributed Property Gross Asset Value Indebtedness Assumed Net Asset Value
or Taken Subject to
3. Partnership Units,
Partnership Units held by Substituted Partner:
4. Admission of Substituted Partner
The Substituted Partner is admitted to the Partnership as a Substituted
Limited Partner. The General Partner hereby consents to such admission.
5. Designated Parties
6. Agreement
The Substituted Partner acknowledges receipt of a copy of, and agrees to be
bound by, the Agreement of Limited Partnership, as amended, for the Partnership.
The Substituted Partner specifically confirms (a) the representations and
warranties contained in Section 3.4 of such Agreement of Limited Partnership, as
amended, for the Partnership and (b) the grant of the power of attorney set
forth in Section 2.4 of such Agreement.
7. Additional Terms and Conditions
IN WITNESS WHEREOF, the parties have executed this Partner Schedule as of
the date indicated below.
Dated: , 199_
"General Partner":
THE PRICE REIT, INC., as General Partner of THE
PRICE REIT RENAISSANCE PARTNERSHIP, L.P.
By
"Substituted Partner":
By
EXHIBIT E
FORM OF PARTNERSHIP UNIT CERTIFICATE
THIS PARTNERSHIP UNIT CERTIFICATE is executed by The Price REIT, Inc., a
Maryland corporation, in respect of The PRICE REIT Renaissance Partnership,
L.P., a California limited partnership (the "Partnership"). Terms with initial
capital letters used but not defined herein have the meanings assigned to them
in the Agreement of Limited Partnership of The PRICE REIT Renaissance
Partnership, L.P. dated as of August 22, 1997, as amended from time to time.
In its capacity as the general partner of the Partnership, The Price REIT,
Inc. hereby certifies to Altamonte Joint Venture that the following is a
complete and accurate representation of the ownership of Partnership Units of
the Partnership as of the date of this Certificate:
Owner Nature of Interest Number of Partnership Units Percentage of
Outstanding
Partnership Units
- ----- ------------------ --------------------------- -----------------
The Price General Partner 26,433,000 99%
REIT, Inc. Interest
Altamonte Limited Partner 267,000 1%
Joint Interest
Venture
-------------------------- ------------------
Total: 26,700,000 Total: 100%
This Certificate is executed as of the ___ day of _________________, 199__.
THE PRICE REIT, INC.,
a Maryland corporation
By:
Name:
Title:
