<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (date of earliest event reported): November 6, 1996
CARRAMERICA REALTY CORPORATION
(formerly Carr Realty Corporation)
(Exact name of registrant as specified in its charter)
Maryland 1-11706 52-1796339
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identification No.)
1700 Pennsylvania Avenue, N.W., Washington, D.C. 20006
(Address of principal executive offices)
Registrant's telephone number, including area code: (202) 624-7500
<PAGE> 2
FORM 8-K
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On November 6, 1996, CarrAmerica Realty Corporation purchased 21
suburban office buildings located in Silicon Valley for approximately $124
million. As part of the purchase price, the Company assumed approximately $41
million in debt that bears interest at an annual rate of 8.25% and matures in
2001. The balance of the purchase price was funded through a draw on the
Company's line of credit. The properties, referred to as the NELO/Orchard
portfolio, were built between 1979 and 1985, contain a total of approximately 1
million square feet of office space and consist of the following value office
properties: the San Jose Orchard Business Park (A), a 2-building, 68,000 square
foot office project; the San Jose Orchard Business Park (B), a 6-building,
167,000 square foot office project; Orchard Centre, a 2-building, 102,000
square foot office project; Orchard Office Centre, a 2-building, 69,000 square
foot office project; Orchard Centre II, a 4-building, 212,000 square foot
office project; Orchard Rincon Centre, a 3-building, 201,000 square foot office
project and Orchard Bayshore Centre, a 2-building, 195,000 square foot office
project.
On October 24, 1996, the Company filed a Current Report on Form 8-K
with the Commission providing (a) the additional information required because
the aggregate book value of the buildings constituting the NELO/Orchard
portfolio is in excess of 10% of the Company's total assets and (b) the
historical financial statements relating to the NELO/Orchard portfolio required
by Item 7(a) of Form 8-K.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
The historical financial statements relating to the NELO/Orchard
portfolio required by Item 7(a) of Form 8-K were filed with the Commission on a
Current Report on Form 8-K on October 24, 1996.
(b) Pro forma financial information.
It is impracticable at this time to file the pro forma financial
information relating to the NELO/Orchard portfolio required by Item 7(b) of
Form 8-K. The Company will file such pro forma financial statements with the
Commission as soon as they are available but not later than January 19, 1997.
(c) Exhibits
10.1 Purchase and Sale Agreement dated as of August 27, 1996
relating to the acquisition of the NELO/Orchard portfolio, as
amended (without exhibits).
10.2 Agreement of Purchase and Sale dated as of September 5,
1996 with respect to the acquisition of Spalding Ridge (without
exhibits) and Agreement of Purchase and Sale dated as of
September 5, 1996 with respect to the acquisition of the Dekalb
Chase, L.P. portfolio (without exhibits), the form of which is
substantially similar to the form of Agreement of Purchase and
Sale used to acquire the other properties in the Peterson
portfolio, which transaction was reported on a Quarterly Report
on Form 10-Q filed with the Commission on November 5, 1996.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
<PAGE> 4
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 hereto duly authorized.
Date: November 15, 1996
CARRAMERICA REALTY CORPORATION
By: /s/ Brian K. Fields
-----------------------------
Brian K. Fields
Chief Financial Officer
<PAGE> 5
EXHIBIT INDEX
Exhibit 10.1 Purchase and Sale Agreement dated as of
August 27, 1996 relating to the acquisition of the
NELO/Orchard portfolio, as amended (without exhibits).
Exhibit 10.2 Agreement of Purchase and Sale dated as of
September 5, 1996 with respect to the acquisition of Spalding
Ridge (without exhibits) and Agreement of Purchase and Sale
dated as of September 5, 1996 with respect to the acquisition
of the Dekalb Chase, L.P. portfolio (without exhibits), the
form of which is substantially similar to the form of
Agreement of Purchase and Sale used to acquire the other
properties in the Peterson portfolio, which transaction was
reported on a Quarterly Report on Form 10-Q filed with the
Commission on November 5, 1996.
<PAGE> 1
EXHIBIT 10.1
THE NELO/ORCHARD PORTFOLIO
--------------------------
PURCHASE AND SALE AGREEMENT
AMONG
ORCHARD INVESTMENT COMPANY NUMBER 315,
ORCHARD INVESTMENT COMPANY NUMBER 510,
ORCHARD INVESTMENT COMPANY NUMBER 606,
ORCHARD INVESTMENT COMPANY NUMBER 607,
ORCHARD INVESTMENT COMPANY NUMBER 609,
ORCHARD INVESTMENT COMPANY NUMBER 751,
and
ORCHARD INVESTMENT COMPANY NUMBER 901,
each a California general partnership,
AS SELLERS,
AND
CARRAMERICA REALTY CORPORATION,
a Maryland corporation,
AS BUYER
As of August 27, 1996
<PAGE> 2
PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") is entered into
as of the 27th day of August, 1996 among (i) ORCHARD INVESTMENT COMPANY NUMBER
315, a California general partnership ("OIC 315"), ORCHARD INVESTMENT COMPANY
NUMBER 510, a California general partnership, ("OIC 510"), ORCHARD INVESTMENT
COMPANY NUMBER 606, a California general partnership, ("OIC 606"), ORCHARD
INVESTMENT COMPANY NUMBER 607, a California general partnership, ("OIC 607"),
ORCHARD INVESTMENT COMPANY NUMBER 609, a California general partnership, ("OIC
609"), ORCHARD INVESTMENT COMPANY NUMBER 751, a California general partnership,
("OIC 751"), and ORCHARD INVESTMENT COMPANY NUMBER 901, a California general
partnership, ("OIC 901") (collectively, the "Sellers"), each with an address
c/o New England Mutual Life Insurance Company ("TNE"), 501 Boylston Street,
Boston, Massachusetts 02116-3700 and (ii) CARRAMERICA REALTY CORPORATION, a
Maryland corporation with an address of 1700 Pennsylvania Avenue, NW,
Washington, DC 20006 ("Buyer") with reference to the following facts:
RECITALS
A. OIC 315 is the owner of certain property commonly referred
to as San Jose Orchard Business Park (Project No. 315) and more particularly
described herein;
B. OIC 510 is the owner of certain property commonly referred
to as San Jose Orchard Business Park (Project No. 510) and more particularly
described herein;
C. OIC 606 is the owner of certain property commonly referred
to as Orchard Centre (Project No. 606) and more particularly described herein;
D. OIC 607 is the owner of certain property commonly referred
to as Orchard Office Centre (Project No. 607/608) and more particularly
described herein;
E. OIC 609 is the owner of certain property commonly referred
to as Orchard Centre II (Project No. 609) and more particularly described
herein;
F. OIC 751 is the owner of certain property commonly referred
to as Orchard Rincon Centre (Project No. 751) and more particularly described
herein;
2
<PAGE> 3
G. OIC 901 is the owner of certain property commonly referred to
as Orchard Bayshore Centre (Project No. 901) and more particularly described
herein; and
H. Buyer desires to purchase from the Sellers and the Sellers
desires to sell to Buyer the property described herein on the terms and
conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the foregoing and the mutual
agreements herein set forth, and other valuable consideration, receipt of which
is hereby acknowledged, the Sellers and Buyer agree as follows:
ARTICLE I
The Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from the Sellers, subject to the terms and conditions
set forth herein, the following:
1.1 Land. That certain land (the "Land") described in the form
of Grant Deed attached as Exhibit 1.1 hereto (the "Deed") and all rights,
privileges and easements respectively owned by the Sellers and appurtenant
thereto.
1.2 Improvements. All improvements and fixtures located on the
Land (all of which are collectively referred to as (the "Improvements");
1.3 Personal Property. All items of personal property owned by
the Sellers (the "Personal Property") described in the form of Bill of Sale
attached as Exhibit 1.3 hereto (the "Bill of Sale");
1.4 Service Contracts and Intangibles. All of the agreements
and contracts (the "Service Contracts") and intangibles, including, without
limitation, Seller's right, title and interest in and to (i) all trade names
and marks (in common with any others entitled thereto), (ii) all warranties and
guaranties, and (iii) all permits and licenses (to the extent assignable) (the
"Intangibles"), all as described in the form of Assignment of Contracts and
Intangibles attached as Exhibit 1.4 hereto (the "Assignment of Contracts and
Intangibles"); and
1.5 Leases. All of the right, title and interest of the Sellers
as landlord in and to the rental agreements and other leases of space in the
Improvements, together with any guaranties and/or other security delivered to
landlord thereunder (the "Leases") in effect on the Closing Date pursuant to an
assignment in the form of Exhibit 1.5 hereto (the "Assignment of
3
<PAGE> 4
Leases"), provided that the Sellers shall be entitled to delete from the copy
of the Assignment of Leases that will be recorded in Santa Clara County Records
any rent roll information as the Sellers reasonably deem to be confidential.
1.6 "Property" and "Real Property" Defined. All of the items
described in Sections 1.1, 1.2, 1.3, 1.4 and 1.5 above are hereinafter
collectively referred to as the "Property." The items described in Sections
1.1, 1.2 and 1.5 are hereinafter referred to as the "Real Property."
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price; NYLICO Loans. The purchase price (the
"Purchase Price") for the Property shall be the sum of One Hundred Twenty
Million Dollars ($120,000,000.00), it being agreed that the Property is being
conveyed subject to the five outstanding loans held by New York Life Insurance
Company ("NYLICO"), as more particularly set forth on Exhibit 2.1 attached
hereto ("NYLICO Loans"). Sellers have informed Buyer that as of July, 1996 the
NYLICO Loans had an amortized balance of approximately $41,000,000.00.
Accordingly, by way of example, if the same balance were outstanding on the
date of closing, the Purchase Price due to Seller would be Seventy Nine Million
Dollars ($79,000,000.00). Buyer shall be responsible for any transfer or
assignment fee up to 1% of the then outstanding unamortized balance of the
NYLICO Loans as of the Closing Date, plus any title insurance, legal fees and
expenses charged by NYLICO in connection with the transfer.
(a) Allocation of Purchase Price. Buyer and the Sellers
acknowledge that the Purchase Price shall be allocated among the Sellers as
follows:
OIC 315 $ 6,750,000.00
OIC 510 $ 15,900,000.00
OIC 606 $ 11,000,000.00
OIC 607 $ 10,550,000.00
OIC 609 $ 23,900,000.00
OIC 751 $ 21,400,000.00
OIC 901 $ 30,500,000.00
Total: $120,000,000.00
4
<PAGE> 5
2.2 Payment of Purchase Price. The Purchase Price shall be paid
as follows:
(a) Upon the execution and delivery of this Agreement,
Buyer shall deliver to Chicago Title Insurance Company, 110 West Taylor Street,
San Jose, CA 95110 Attn: Sharman McKenna, (v) (408-292-4212) (fax)
(408-993-8604) ("Escrow Holder") the sum of One Million Two Hundred Thousand
Dollars ($1,200,000.00) as a deposit towards the Purchase Price (the "First
Deposit"). Buyer and the Sellers acknowledge that Escrow Holder has been
selected by Buyer. Such amount shall be paid by wire transfer or cashier's or
certified check drawn upon a bank whose main office is within the continental
United States.
(b) On the Approval Date, Buyer shall deliver to Escrow
Holder the additional sum of One Million Two Hundred Thousand Dollars
($1,200,000.00) (the "Second Deposit"), such amount shall be paid by wire
transfer or cashier's or certified check drawn upon a bank whose main office is
within the continental United States. The First Deposit and the Second Deposit
in the aggregate amount of Two Million Four Hundred Thousand Dollars
($2,400,000.00) together with any interest thereon are hereinafter referred to
as the "Deposit". From and after the Approval Date, Buyer shall have no right
to withdraw the Deposit under any circumstances whatsoever, and the Deposit may
not be refunded to Buyer under any circumstances whatsoever except as
hereinafter specifically provided in this Agreement, including, without
limitation, the failure of a condition to Closing or the default of Sellers
hereunder.
(c) On the Closing Date, a sum equal to the Purchase Price,
adjusted by payment of the Deposit to Seller, prorations, and costs of escrow
as provided in Sections 7.6, 7.7, 7.8, 7.9 and 7.10 will be paid by Buyer by
wire transfer in immediately available Federal funds as set forth in Section
7.11.
2.3 Investment of Deposit. The Deposit shall be invested in
Permitted Investments (as defined on Exhibit 2.3) having maturities not later
than the Closing Date, in accordance with instructions issued by Buyer. All
interest on the Deposit shall accrue for the benefit of Buyer until the Closing
Date (as defined in Section 7.2); provided, however, that in any event of any
default by Buyer hereunder continuing beyond an applicable period of notice and
cure (if any), all interest earned thereon shall accrue for the benefit of the
Sellers. On and after the Closing Date, all interest on the Deposit shall
accrue for the benefit of the Sellers.
2.4 Deposit as Liquidated Damages. FROM AND AFTER THE DATE
HEREOF, IN THE EVENT THE SALE OF THE PROPERTY AS CONTEMPLATED HEREUNDER
5
<PAGE> 6
IS NOT CONSUMMATED BY REASON OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
BUYER, THE DEPOSIT (INCLUDING ALL INTEREST EARNED FROM THE INVESTMENT THEREOF)
PLUS ANY SELLERS' ATTORNEYS FEES AND COSTS PURSUANT TO SECTION 12.9 SHALL BE
PAID TO AND RETAINED BY THE SELLERS AS LIQUIDATED DAMAGES. THE PARTIES
ACKNOWLEDGE THAT THE SELLERS' ACTUAL DAMAGES IN THE EVENT THAT THE SALE IS NOT
CONSUMMATED WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE.
THEREFORE, BY SEPARATELY EXECUTING THIS SECTION 2.4 BELOW, THE PARTIES
ACKNOWLEDGE THAT THE DEPOSIT HAS BEEN AGREED UPON, AFTER NEGOTIATION, AS THE
PARTIES REASONABLE ESTIMATE OF THE SELLERS' DAMAGES AND AS THE SELLERS' SOLE
AND EXCLUSIVE REMEDY AGAINST BUYER IN THE EVENT THE CLOSING DOES NOT OCCUR BY
REASON OF THE DEFAULT OF BUYER, AND AS THE SELLERS' SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER ARISING FROM SUCH FAILURE OF THE SALE TO CLOSE. THE PAYMENT OF
SUCH DEPOSIT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY
WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3364, BUT IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA
CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS
OF CALIFORNIA CIVIL CODE SECTION 3389. NOTWITHSTANDING THE FOREGOING, IN NO
EVENT SHALL THIS SECTION 2.4 LIMIT THE DAMAGES RECOVERABLE BY THE SELLERS
AGAINST BUYER DUE TO BUYER'S OBLIGATION TO INDEMNIFY SUCH PARTY AS EXPRESSLY
SET FORTH IN THIS AGREEMENT, OR THIRD PARTY CLAIMS AGAINST ANY OF THE SELLERS
ARISING OUT OF SECTION 3.2. IN ADDITION, BUYER SHALL PAY ALL TITLE, SURVEY AND
ESCROW CANCELLATION CHARGES. BY THEIR SEPARATELY EXECUTING THIS SECTION 2.4
BELOW, BUYER AND THE SELLERS ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE
ABOVE PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS
REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS LIQUIDATED
DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED.
Buyer: Sellers:
CarrAmerica Realty Corporation OIC 315, OIC 510, OIC 606,
OIC 607, OIC 609, OIC 751
and OIC 901
6
<PAGE> 7
By: By their sole general partner
--------------------- New England Mutual Life
Its: Insurance Company
-------------------
By:
------------------------
Its:
-----------------------
ARTICLE III
"AS-IS" SALE: INSPECTION
3.1 "As-Is" Sale. Pursuant to this Agreement, Buyer and its
representatives (including environmental consultants, architects, and
engineers) have been or will be afforded the right and opportunity to enter
upon the Property and to make such inspections of the Property and matters
related thereto, including the conduct of soil, environmental and engineering
tests, as Buyer and its representatives desire. Buyer and the Sellers
acknowledge that notwithstanding any prior or contemporaneous oral or written
representations, statements, documents or understandings, this Agreement
constitutes the entire understanding of the parties with respect to the subject
matter hereof and supersedes any such prior or contemporaneous oral or written
representations, statements, documents or understandings. Buyer further
acknowledges that, except as expressly set forth in this Agreement or in the
documents delivered by Sellers at the Closing, (i) neither any of the Sellers,
nor any principal, agent, attorney, employee, broker or other representative of
any of the Sellers has made any representations or warranties of any kind
whatsoever, either express or implied, with respect to the Property or any of
such related matters, and (ii) Buyer is not relying on any warranty,
representation, or covenant, express or implied, with respect to the Property
except as expressly set forth in this Agreement or in the documents delivered
by Sellers at the Closing, and that Buyer is acquiring the Property in an
"as-is" condition with all faults. In particular, but without limitation,
except as expressly set forth in this Agreement or in the documents delivered
by Sellers at the Closing, none of the Sellers makes any representation or
warranty with respect to the use, condition (including without limitation the
condition of the soils or groundwaters of the Property and the presence or
absence of toxic materials or hazardous substances on or under the Property),
occupation or management of the Property, compliance with applicable statutes,
laws, codes, ordinances, regulations or requirements relating to leasing,
zoning, subdivision, planning, building, fire, safety, health or environmental
matters, compliance with covenants, conditions and restrictions (whether or not
of record), other local,
7
<PAGE> 8
municipal, regional, state or federal requirements, or other statutes, laws,
codes, ordinances, regulations or requirements. Buyer acknowledges receipt of
the Work Product, as defined in Section 3.3 below, and fully understands (i)
the contents thereof, and (ii) that the matters disclosed in the Work Product
may affect Buyer's ability to use, sell, lease, finance or otherwise dispose of
or encumber the Property. Buyer acknowledges that it is knowledgeable in real
estate matters, and that having completed the inspections contemplated by this
Article III, Buyer will have made all of the investigations and inspections
Buyer deems necessary in connection with its purchase of the Property, and that
approval by Buyer of such inspections pursuant to this Agreement will be deemed
approval by Buyer without reservation of all aspects of this transaction,
including but not limited to the physical condition of the Property, the use,
the Leases, the NYLICO Loans, the Service Contracts, the title, and the
physical and financial aspects of the operation of the Property. Except for
(i) the warranties, if any, expressly set forth herein, and (ii) the
warranties, if any, expressly set forth in the documents delivered by Seller at
the Closing, Buyer for itself and any assignee permitted by Section 12.3,
hereby waives, relinquishes and releases any and all rights, claims and causes
of action which Buyer may have or may be entitled to assert against the Sellers
under or with respect to the Property or the condition thereof, including
without limitation any and all rights, claims and causes of action under or
with respect to California Health & Safety Code Section 25359.7(a) and Title 42
of the United States Code, Section 9601 et seq., or both. Buyer expressly
understands and acknowledges that it is possible that unknown losses or claims
exist or that present losses may have been underestimated in amount or
severity, and Buyer explicitly took that into account in determining the
consideration for the execution of this Agreement, and a portion of said
consideration, having been bargained for between the parties with the knowledge
of the possibility of such unknown losses or claims, was given in exchange for
a full accord, satisfaction and discharge of all such losses or claims.
Consequently, Buyer expressly waives all rights under California Civil Code
Section 1542, which provides that:
"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."
Notwithstanding the foregoing, it is understood and agreed that by
virtue of the foregoing release, Buyer has not (i) waived the rights, if any,
against Sellers of any third party (other than its permitted assignee under
Section 12.3) and any other third party controlled by Buyer, including any
third party purchaser of the Property from Buyer in the future, or (ii) agreed
to indemnify Sellers with respect to any of such third party claims against
Sellers with respect to the matters which are the subject of the foregoing
release.
8
<PAGE> 9
3.2 Inspection. (a) Upon execution of this Agreement, the
Sellers hereby grant to Buyer and its representatives (including architects,
surveyors and engineers) a license to enter upon, survey and conduct
non-invasive inspections of the Property, but such inspections and tests shall
not damage the Property in any material respect and shall be conducted only
after giving telephonic or written notice to the applicable Seller. Any entry
by Buyer onto the Property shall be subject to and conducted in accordance with
any leases affecting the Property and in such a manner as to minimize
interference with the operation and occupancy of the Property. Buyer shall
promptly restore the Property to its condition prior to any such inspections
and/or tests, and the Sellers reserve the right to accompany Buyer during any
inspection of the Property. Buyer hereby indemnifies and agrees to protect and
hold the Sellers harmless against any and all claims, liability, loss, damage,
costs or expense (including without limitation reasonable attorneys' fees)
which the Sellers may sustain or incur by reason of or in connection with any
such entry, inspections or tests. Buyer shall deliver to the Sellers, without
charge therefor, the results and copies of any and all surveys, reports, tests
or studies made by or for Buyer with respect to the Property, unless
contractually prevented from doing so in accordance with Buyer's ordinary
course of operations, it being understood that Sellers may not rely thereon
without the consent of the person who prepared such survey, report, test or
study. Buyer agrees that prior to the Closing, the Sellers shall make all
legally required notifications to government agencies concerning the Property
and Buyer shall not disclose information concerning the Property to government
agencies or public officials except to the extent reasonably necessary for
Buyer to conduct its investigation of the Property or if required by judicial
order or in connection with an enforceable request for information from a
government agency or otherwise required by law.
(b) Buyer shall be permitted to perform or conduct Tests
only pursuant to the Sellers' standard form of License Agreement. For purposes
of this Agreement, "Tests" shall mean any one or more of the following: (a)
collecting samples of or testing materials contained in the Improvements, (b)
gaining access to portions of the Improvements that are not accessible by
doors, panels, hatches or windows that may be unlocked and opened readily and
without damage to the Improvements, (c) drilling of boring holes, (d)
performance of engineering or structural tests at the Property, or (e)
performing any investigations or tests which are invasive or intrusive with
respect to the Land or the Improvements.
3.3 Work Product. Buyer acknowledges that it has previously
received from the Sellers certain non-privileged and non-confidential
information concerning the Property contained in (i) the marketing package
entitled "The Nelo/Orchard Portfolio" prepared by B.T. Commercial Real Estate
dated July, 1996, and (ii) the materials transmitted with an August 8,
9
<PAGE> 10
1996 cover letter from Laurence Blickman of B.T. Commercial to Joseph D.
Wallace of CarrAmerica (collectively the "Work Product"). Buyer specifically
acknowledges and agrees that the Sellers make no representations or warranties
of any kind whatsoever, either expressed or implied with respect to any of such
items.
3.4 Permits and Entitlements. Buyer acknowledges that Seller
has no responsibility for obtaining any permits, approvals, zoning clearance
certificates or other authorizations or entitlements required by any federal,
state or local government for Buyer's use of the Property.
ARTICLE IV
TITLE TO PROPERTY
4.1 Title. At the Closing, the Sellers shall convey to Buyer
fee simple title to the Land and the Improvements, by execution and delivery of
the Deeds. Evidence of delivery of fee simple title shall be the issuance by
Chicago Title Insurance Company, 700 South Flower Street, Suite 920, Los
Angeles, CA 90017 (v) 213-488-4346, (fax) 213-891-0834 Attention: Frank
Jansen (the "Title Company") of an ALTA Owner's Policy of Title Insurance with
liability in the amount of the Purchase Price (the "Title Policy"). The Title
Policy shall include (i) an extended coverage endorsement and (ii) such other
endorsements as the Title Company may issue at the request of Buyer prior to
the Approval Date, insuring fee simple title to the Land and the Improvements
in Buyer, subject only to those exceptions to title approved by Buyer pursuant
to Section 5.1 below, and with such reinsurance as Buyer may elect. Buyer and
the Sellers acknowledge that Buyer has selected the Title Company.
4.2 Title to Personal Property, Contracts and Leases. At the
Closing, the Sellers shall transfer all of their right, title and interest in
and to (a) the Personal Property pursuant to the Bill of Sale, (b) the Service
Contracts and Intangibles pursuant to the Assignment of Contracts, and (c) the
Leases pursuant to the Assignment of Leases.
ARTICLE V
BUYER'S CONDITIONS TO CLOSING
The following conditions are conditions precedent to Buyer's
obligation to purchase the Property, each of which may be waived by Buyer in
its sole discretion:
5.1 Approval of Title.
10
<PAGE> 11
5.1.1 General. Buyer shall have until September 26, 1996 (the
"Approval Date") to review and approve the following:
(a) a current preliminary title report on the Real
Property, accompanied by copies of all documents referred to in the report
other than encumbrances to be discharged by the Sellers on or before the
Closing;
(b) copies of the most recent property tax bills for the
Property; and
(c) a survey of the Real Property by a licensed surveyor
or engineer hired by Buyer, and
(d) UCC searches.
5.1.2 Preliminary Title Report.
Buyer shall notify the Sellers as of the Approval Date what
exceptions to title, if any, will not be accepted by Buyer. Without limiting
the foregoing, Buyer shall take title to the Property subject to any and all
assessments and bonds on the Property not due and payable as of Closing set
forth in the preliminary title report issued by the Title Company and any
supplement thereto approved by Buyer (the "Preliminary Title Report").
5.1.2 Unpermitted Exceptions
Any title exceptions arising on or prior to the Closing Date, other
than those approved or deemed approved by Buyer as pursuant to Section 5.1.1
above, shall be "Unpermitted Exceptions" hereunder. Any Unpermitted Exception
voluntarily executed and delivered by a Seller (except for the NYLICO Loans)
shall be a "Voluntary Unpermitted Exception" hereunder and any other
Unpermitted Exception shall be an "Involuntary Unpermitted Exception". The
Sellers covenant and agree to remove, at the cost and expense of Sellers, any
Voluntary Unpermitted Exception, whether occurring before or after the Approval
Date.
5.1.3 Buyer Objections
If Buyer fails to notify the Sellers of its disapproval of any of
the aforesaid items by the Approval Date, Buyer shall be deemed to have
approved the condition of title to the Real Property as shown in the
Preliminary Title Report. If Buyer objects to any exceptions to title, the
Sellers shall have three (3) business days after receipt of Buyer's objections
to notify
11
<PAGE> 12
Buyer: (i) that the Sellers will remove any objectionable exceptions from title
and provide Buyer with evidence reasonably satisfactory to Buyer of such
removal, or provide Buyer with evidence reasonably satisfactory to Buyer that
said exceptions will be removed on or before the Closing (in either of which
event, the Sellers may extend the Closing Date for such period as shall be
required to effect such cure, but not beyond thirty (30) days); or (ii) that
the Sellers elects not to cause such exceptions (other than Voluntary
Unpermitted Encumbrances) to be removed. The procurement by the Sellers of a
commitment for the issuance of the Title Policy or an indorsement thereto in
form reasonably acceptable to Buyer insuring Buyer against any title exception
which was disapproved pursuant to this Section 5.1 shall be deemed a cure by
the Sellers of such disapproval, unless such exception is a lien or encumbrance
in an amount greater than $500,000. If the Sellers give Buyer notice under
clause (ii), Buyer shall have three (3) business days in which to notify the
Sellers that Buyer will nevertheless proceed with the purchase and take title
to the Property subject to such exceptions, or that Buyer will terminate this
Agreement. If this Agreement is terminated pursuant to the provisions of this
paragraph, then neither party shall have any further rights or obligations
hereunder except for any indemnity obligations of either party pursuant to the
other provisions of this Agreement, the Deposit shall be returned to Buyer and
each party shall bear its own costs incurred hereunder. All escrow cancellation
charges shall be paid by Buyer and the Sellers equally. If Buyer shall fail to
notify the Sellers of its election within said three (3) business day period,
Buyer shall be deemed not to have elected to proceed with the purchase, in
which event this Agreement will terminate. Notwithstanding any of the
foregoing, Buyer shall be deemed to have approved property taxes, assessments
and bonds not delinquent as of Closing.
12
<PAGE> 13
5.1.4 Involuntary Unpermitted Exceptions after Approval Date
If an Involuntary Unpermitted Exception shall arise after the date
of this Agreement, and Buyer objects to such Involuntary Unpermitted Exception,
then Buyer shall, promptly upon becoming aware of such Involuntary Unpermitted
Exception, provide Sellers with notice of such objection pursuant to the
procedures set forth in Section 5.1.3 above, and Buyer and Sellers shall have
the response options and termination rights respecting such Involuntary
Unpermitted Exception as set forth in Section 5.1.3.
5.2 Review of Other Matters. Buyer shall have until the
Approval Date to review and approve the physical condition of the Property in
Buyer's sole discretion, as determined by inspections and tests performed by
Buyer and its representatives in accordance with Section 3.2 herein, and to
review and approve the following items as of the Approval Date in Buyer's sole
discretion: whether the consummation of this transaction will result in a
violation by Buyer of ERISA, as defined in Section 8.1 below, the Leases, a
detailed rent roll, operating statements, delinquency reports, commission
schedules and agreements, lease administration records, maintenance and repair
records, the Service Contracts, an inventory of all furnishings, fixtures,
equipment and other personal property constituting a part of the Property,
certificates of occupancy, strata surveys, architectural renderings, "as-built"
plans and specifications, engineering plans, marketing studies, environmental
studies and reports, floor plans and other similar plans, diagrams and studies,
if any and all other documentation and materials in the Work Product or
otherwise made available to Buyer pursuant hereto.
If Buyer fails to notify the Sellers by the Approval Date
that Buyer disapproves of the physical condition of the Property or of any of
the items specified above, Buyer shall be deemed to have approved the same. If
Buyer disapproves any items, then this Agreement shall be terminated and
neither party shall have any further rights or obligations hereunder except for
any indemnity obligations of either party pursuant to the other provisions of
this Agreement, the Deposit shall be returned to Buyer and each party shall
bear its own costs incurred hereunder. All escrow cancellation charges shall
be paid by Buyer and the Sellers equally.
5.3 Review of NYLICO Loans. Buyer shall have until the Approval
Date to review and approve the NYLICO loans in Buyer's sole discretion,
including, without limitation, any transferability or prepayment provisions,
outstanding balances, and any other matter deemed relevant by Buyer. Buyer and
the Sellers acknowledge that Buyer may, at Buyer's sole election, or as a
requirement of NYLICO in connection with the transfer, negotiate and enter into
a comfort agreement with NYLICO ("NYLICO Comfort Agreement"), which NYLICO
13
<PAGE> 14
Comfort Agreement shall be acceptable to Buyer in its sole discretion.
Buyer and Seller further agree that Buyer may, by written notice to any Seller,
request such Seller's approval of or joinder in the NYLICO Comfort Agreement,
which approval shall be granted or withheld in the sole discretion of such
Seller, it being agreed that unless such approval is confirmed in writing
within five (5) days after request, such approval shall be deemed denied, in
any event, Sellers shall be furnished a copy of the approved form of NYLICO
Comfort Agreement on or before the Approval Date.
If Buyer fails to notify the Sellers by the Approval Date
that Buyer disapproves of the NYLICO Loans or the proposed NYLICO Comfort
Agreement in any respect, then Buyer shall be deemed to have approved the same
in all respects. If Buyer disapproves the NYLICO Loans or proposed NYLICO
Comfort Agreement, then this Agreement shall be terminated and neither party
shall have any further rights or obligations hereunder except for any indemnity
obligations of either party pursuant to the other provisions of this Agreement,
the Deposit shall be returned to Buyer and each party shall bear its own costs
incurred hereunder. All escrow cancellation fees shall be paid by Buyer and
the Sellers equally.
Buyer covenants and agrees to use reasonable efforts to
cause NYLICO to permit the transfer of the Property in accordance with the
terms of the NYLICO Loans.
5.4 Termination of Management and Service Contracts. Seller
shall terminate any and all management, brokerage and/or leasing agent
agreements, and all employees employed at the Property, on or prior to Closing,
without liability to Buyer; and Buyer shall have no liability under any
multi-employer pension plan or otherwise as a result of termination of any such
employees. By not later than the Approval Date, Buyer shall deliver to each of
the Sellers a listing of the service contracts which Buyer desires to be
terminated as of the Closing (the "Service Contract Terminations"), it being
agreed that any costs, fees or expenses arising out of such termination shall
be at the sole cost and expense of the Buyer and such Service Contract
Terminations shall be effected by Seller on or prior to Closing.
5.5 Review of Estoppels. Within five (5) days following the
Approval Date, the Sellers shall deliver to each tenant of the Property an
estoppel certificate in the form of Exhibit 5.5 attached hereto (the "Estoppel
Certificates"), which Estoppel Certificate shall have been prepared by the
Sellers' property manager in consultation with and in a manner reasonably
acceptable to Buyer, and the Sellers shall endeavor in good faith to cause the
tenants to complete and sign the Estoppel Certificates and return them to the
Sellers. Buyer and the Sellers mutually acknowledge that the tenants may not
be obligated under their respective leases to execute the Estoppel Certificates
in the form attached as Exhibit 5.5 and that Estoppel
14
<PAGE> 15
Certificates in the form required by each respective tenant's applicable lease
shall be deemed to be a form complying with all requirements of this Agreement.
For purposes of this agreement, an "Qualifying Estoppel
Certificate" shall mean an estoppel certificate which (i) does not indicate a
monetary default by the applicable tenant except as permitted below as to an
aggregate of 30,000 rentable square feet of space, (ii) does not indicate any
other material monetary or non-monetary default by such tenant, and (iii) is
otherwise consistent with the rent roll which was included in the Work Product,
as most recently updated prior to the Approval Date.
It shall be a condition precedent to Buyer's performance that
Seller deliver to Buyer, at Closing, Qualifying Estoppel Certificates from (i)
all the "Major Tenants" (i.e., those tenants leasing more than 50,000 square
feet) and (ii) tenants which, together with the Major Tenants, lease at least
85% of the total square footage in each building comprising the Property; and
(iii) which together with all other estoppel certificates do not indicate
monetary defaults affecting in the aggregate 30,000 rentable square feet of
space.
5.6 Review of Environmental Matters. Buyer shall have until
October 11, 1996 ("Environmental Approval Date") to review and approve the
environmental condition of the Property as determined by inspections and tests
performed by Buyer and its representatives in accordance with Section 3.2
herein. For purposes of this agreement, a "Recognized Environmental Condition"
shall be as defined in the "American Society for Testing and Materials Standard
Practice for Environmental Site Assessments: Phase I Site Assessment Process
(E 1527-93)", as - "the presence or likely presence of any hazardous substances
or petroleum products on a property under conditions that indicate an existing
release, a past release, or a material threat of a release of any hazardous
substances or petroleum products into structures on the property or into the
ground, groundwater, or surface water of the property," including hazardous
substances or petroleum products even under conditions in compliance with laws.
In no event, however, shall the term include de minimis conditions that
generally do not present a material risk of harm to public health or the
environment and that generally would not be the subject of an enforcement
action if brought to the attention of appropriate governmental agencies.
If Buyer fails to notify the Sellers by the Environmental Approval
Date that its environmental consultants have concluded or suspect that a
Recognized Environmental Condition exists (accompanied by copies of any
supporting documentation), Buyer shall be deemed to have approved the
environmental condition of the Property in all respects. If Buyer timely so
notifies Sellers of a Recognized Environmental Condition, then this Agreement
shall
15
<PAGE> 16
be terminated and neither party shall have any further rights or obligations
hereunder except for any indemnity obligations of either party pursuant to the
other provisions of this Agreement, the Deposit shall be returned to Buyer and
each party shall bear its own costs incurred hereunder. All escrow
cancellation charges shall be paid by Buyer and the Sellers equally.
5.7 Approval by Committee. Buyer's obligation to acquire the
Property is contingent upon the approval of this Agreement by the Board of
Directors of Buyer by on or before the Approval Date. If Buyer gives the
Sellers written notice, by not later than the Approval Date, that such board
has failed to approve this Agreement, this Agreement shall terminate and
neither party shall have any further rights or obligations hereunder except for
any indemnity obligations of either party pursuant to the other provisions of
this Agreement, the Deposit shall be returned to Buyer, and each party shall
bear its own costs hereunder. All escrow cancellation charges shall be paid by
Buyer and the Sellers equally.
5.8 Compliance by the Sellers. The Sellers shall have complied
with each and every condition and covenant of this Agreement to be kept or
complied with by the Sellers, including, without limitation, the deliveries
required by Section 7.3; and all of Sellers' representations and warranties
hereunder shall be true and correct in all material respects.
5.9 Commitment to Issue Title Policy. The Title Company shall
be unconditionally obligated to issue the Title Policy in form approved or
deemed approved by Buyer containing no closing conditions other than those
consistent with standard industry practice.
5.10 Consent and Compliance by NYLICO. NYLICO shall have
consented to the conveyance of the Property subject to the NYLICO Loans.
5.11 Material Adverse Change in Key Leases. With respect to the
leases to Boston Scientific and Clarify more particularly set forth on Exhibit
7.6 (d) ("Key Leases"), (i) each Key Lease shall be in full force and effect in
accordance with its terms, (ii) there shall be no material default under any
Key Lease and (iii) no event shall have occurred respecting any Key Lease which
would entitle the tenant thereunder to terminate such Key Lease in accordance
with its terms. Sellers may extend the Closing Date up to 30 days in order to
meet this condition.
ARTICLE VI
THE SELLERS' CONDITIONS TO CLOSING
16
<PAGE> 17
The following conditions are conditions precedent to the
Sellers' obligation to sell the Property:
6.1 Compliance by Buyer. Buyer shall have complied with each
and every condition of this Agreement to be kept or complied with by Buyer,
including, without limitation, the deliveries required by Section 7.4; and all
of Buyer's representations and warranties hereunder shall be true and correct
in all material respects.
ARTICLE VII
CLOSING
7.1 Deposit With Escrow Holder. Upon execution of this
Agreement by the parties and upon Escrow Holder' execution of the
acknowledgment and agreement set forth at the end of this Agreement, Buyer
shall make the Deposit with Escrow Holder, and this instrument shall serve as
the instructions to Escrow Holder with respect to the Deposit. The Sellers and
Buyer agree (i) to cause the Escrow Holder to comply with the terms of this
Agreement with respect to the Deposit, and (ii) to execute such additional and
supplementary escrow instructions as may be reasonably appropriate to enable
the Escrow Holder to comply with the terms of this Agreement.
7.2 Closing. The closing hereunder (the "Closing") shall be held
and delivery of all items to be made at the Closing under the terms of this
Agreement shall be made through the Escrow Holder by mail or overnight courier,
to the extent possible, but if an "in-person" closing is required, the Closing
shall occur at the offices of the Sellers. The execution and exchange of
documents shall take place at the Closing on November 4, 1996, as may be
extended by Sellers pursuant to Section 5.11, subject to the recording of
documents and disbursement of funds on the next business day (such next
business day shall be the "Closing Date"). All documents shall be deemed
delivered on the date the Deed is recorded. The Closing may occur on such
earlier date as Buyer and the Sellers may agree but such dates may not be
extended without the written approval of both the Sellers and Buyer, except as
otherwise expressly provided herein.
7.3 Delivery by the Sellers. At the Closing, each Seller shall
deliver the following to Escrow Holder or to Buyer outside of Escrow, at such
Seller's election:
17
<PAGE> 18
(a) The Deed duly executed and acknowledged by the Seller,
in recordable form, and ready for recordation on the Closing Date;
(b) Four counterparts of the Bill of Sale, duly executed
by the Seller;
(c) Four counterparts of the Assignment of Contracts and
Intangibles, duly executed by the Seller;
(d) Five counterparts of the Assignment of Leases duly
executed and acknowledged by the Seller in recordable form and ready for
recordation on the Closing Date;
(e) Notices to the tenants of the respective portions of
the Property in the form of Exhibit 7.3(e) hereto (the "Tenant Notices"), duly
executed by the Sellers;
(f) All executed Estoppel Certificates from tenants;
(g) A fully completed California Franchise Tax Board Form
590;
(h) Termination Notices for each of the property
management contracts and Service Contract Terminations if not previously
delivered;
(i) Such title affidavits and authority documents
supporting the Title Policy and its endorsements as are either required by law
or uniform local custom;
(j) A date down certificate respecting the representations
and warranties of Sellers pursuant to Section 8.2;
(k) A FIRPTA affidavit in customary form;
(l) Lien waivers from any manager or broker, to the extent
required by applicable law;
(m) all original permits, approvals, warranties,
guaranties, Leases and Service Contracts, books and records, but only to the
extent within the possession and control of such Sellers or their agents; and
(n) Any other documents or instruments called for
hereunder which have not previously been delivered.
18
<PAGE> 19
Notwithstanding anything to the contrary contained elsewhere
in this Agreement, Buyer, in its sole discretion, may waive the Sellers'
obligation to deliver at the Closing any of the items described above in this
Section 7.3, but such waiver shall only be effective if it is in writing,
executed by Buyer, and delivered to the Sellers at or prior to the Closing.
7.4 Delivery by Buyer.Prior to the Closing Date, Buyer shall
deliver to Escrow Holder the Purchase Price, as adjusted pursuant to Sections
7.6, 7.7, 7.8, 7.9 and 7.10 to close escrow. Prior to the Closing Date, Buyer
shall further deposit with Escrow Holder or to each Seller outside of Escrow,
at such Seller's election, the following:
(a) Four counterparts of Bill of Sale, duly executed by
Buyer;
(b) Four counterparts of the Assignment of Contracts and
Intangibles, duly executed by Buyer;
(c) Five counterparts of the Assignment of Leases duly
executed and acknowledged by Buyer, in recordable form and ready for
recordation on the Closing Date;
(d) Any other documents or instruments called for
hereunder which have not been previously delivered.
Notwithstanding anything to the contrary elsewhere in this
Agreement, each Seller, in its sole discretion, may waive Buyer's obligation to
deliver at the Closing any of the items described above in this Section 7.4,
but such waiver shall only be effective if it is in writing, executed by such
Seller, and delivered to Buyer at or prior to the Closing.
7.5 Other Instruments.The Sellers and Buyer shall each deposit
such other instruments as are reasonably required by Escrow Holder or otherwise
required to close the escrow and consummate the purchase of the property in
accordance with the terms hereof.
7.6 Prorations and Apportionments.
(a) All revenues and all expenses of the Property shall be
prorated and apportioned as of 12:01 a.m. on the Closing Date, so that the
Sellers bear all expenses with respect to the Property and shall have the
benefit of all income with respect to the Property through and including the
period preceding the Closing Date. Any revenue or expense amount
19
<PAGE> 20
which is not otherwise specified herein and cannot be ascertained with
certainty as of Closing shall be prorated on the basis of the parties'
reasonable estimates of such amount, and shall be the subject of a final
proration ninety (90) days after Closing and with respect to taxes when final
tax bills are available. A statement setting forth such agreed prorations
shall be delivered to Escrow Holder. Escrow Holder shall not be required to
calculate any prorations.
(b) Rents under Leases shall be prorated on a per diem
basis to the extent collected from tenants for the month in which the Closing
occurs. Prepaid rents under the Leases shall be credited to Buyer. All other
accrued rent in arrears as of the Closing Date will be paid to the Sellers only
if collected by Buyer and if the applicable Lease is then current and only net
of Buyer's actual out-of-pocket costs of collection. The Sellers shall have
the right to pursue any amounts owing to the Sellers by tenants (and Buyer
shall have no obligation to do so), but in doing so the Sellers shall not cause
any such tenant to terminate its Lease, nor shall the Sellers cause any such
tenant to be evicted from the Property.
(c) Expenses to be prorated on a per diem basis shall
include taxes for the applicable tax period in which the Closing falls
regardless of when such taxes are due and payable (including personal property
taxes on Personal Property), water rates and sewer rents, if any, payments
under any Service Contracts assumed by Buyer, gas, electricity and other
utility charges, any unfixed meter charges (apportioned on the basis of the
last meter reading), license and permit fees and other expenses customarily
prorated.
(d) Buyer and the Sellers acknowledge that certain of the
brokerage expenses and tenant fit up costs in connection with the leases set
forth on Exhibit 7.6(d) hereto ("Sellers' Lease Up Costs") will remain
outstanding at the time of Closing. Not less than ten (10) days prior to the
time of Closing, Buyer and the Sellers shall meet to reasonably estimate the
outstanding amount of Sellers' Lease Up Costs as of the Closing Date. Buyer
shall receive a credit against the Purchase Price at the Closing in the amount
of such Sellers' Lease Up Costs, after which all responsibility for such
Sellers' Lease Up Costs, shall be borne by Buyer, except that, notwithstanding
the foregoing, the Sellers' Lease Up Costs under the Boston Scientific and
Clarify leases shall not be subject to a final proration ninety (90) days after
Closing.
(e) The costs of any Service Contract Terminations shall
be credited to the Sellers to the extent paid by the Sellers on or prior to
Closing.
20
<PAGE> 21
(f) Interest under the NYLICO loans shall be prorated on a
per diem basis. Sellers shall receive a credit for any tax and/or insurance
escrow deposits held by NYLICO (and any such deposits shall be assigned to
Buyer at Closing).
7.7 Computation of Certain Prorations.
(a) Final proration of percentage rents, operation cost
pass-throughs, other expenses, additional rents, rent escalations and similar
apportionable items which are estimated at Closing shall be accomplished as
follows: the parties shall await the expiration of the specified interval to
determine the items and then prorate the item on an accrual basis over the
applicable period and any appropriate adjusting payment shall be made between
the parties. The Sellers shall have the right to pursue any such amounts owing
to the Sellers by tenants, but in doing so the Sellers shall not cause any such
tenant to terminate its lease, nor shall the Sellers cause any such tenant to
be evicted from the Property.
(b) If the Sellers collected estimated prepayments of
operation cost pass-throughs in excess of any tenant's (tenants under leases in
place as of Closing) share of such expenses, then if the excess can be
determined by the Closing, Buyer shall receive a credit for the excess. The
Sellers shall receive a credit at Closing for estimated underpayments by
tenants with respect to Operation Cost Pass-throughs for those tenants under
leases in place and free of default as of Closing. If the excess payment or
under-payment cannot be determined at Closing, Buyer or the Sellers, as
applicable, shall receive a credit based upon an estimate, and the parties
shall make an adjusting payment between them when the correct amount can be
determined. In either event, Buyer shall be responsible for crediting or
repaying those amounts to the appropriate tenants. If the Sellers collected
estimated prepayments of Operating Cost Pass-throughs attributable to any
period after Closing, the Sellers shall pay or credit any such amounts to Buyer
at Closing.
7.8 Payment of Adjustments to Proration. Either party owing the
other party a sum of money based on adjustments made to prorations after the
Closing Date shall promptly pay that sum to the other party, together with
interest thereon at the rate of twelve percent (12%) per annum (or, if less,
the maximum rate then permitted by law to be contracted for by the parties)
from the date of demand therefor to the date of payment, if payment is not made
within ten (10) days after delivery of a statement therefor.
7.9 Costs and Expenses. Buyer shall receive a credit against
the Purchase Price for the total sum of any security deposits paid to the
Sellers by tenants under any Leases less any security deposits applied by the
Sellers in accordance with Seller's standard practices to rents
21
<PAGE> 22
in arrears or other sums due the Sellers. The cost of Santa Clara County
transfer taxes applicable to the sale shall be paid by each Seller, and the
cost of City of San Jose transfer taxes shall be shared equally by Buyer and
each Seller. The premium for a ALTA title policy, to the extent it exceeds the
cost of a comparable CLTA policy, shall be borne by the Buyer, and the
remaining balance of the premium for the title policy shall be borne by the
Sellers. Buyer shall pay a reasonable work charge to Santa Clara Title Company
in connection with its work on the issuance of a preliminary title report prior
to the date hereof (except to the extent that Chicago Title agrees to reduce
its premium by such amount) and the cost of all surveying work contracted for
by Buyer and all costs of inspecting the Property, and fees and costs related
to any financing obtained by Buyer in connection with the purchase (subject to
Section 2.1 above). Buyer and the Sellers shall share equally the Escrow
Holder's fee, and all other costs and charges of the escrow for the sale;
provided, however that Buyer and the Sellers shall each pay their own legal
(including attorneys' fees and costs) and accounting fees.
7.10 Insurance; Utilities. Buyer acknowledges that the Sellers
will cause its policies of casualty and liability insurance to be terminated as
of the end of business on the Closing Date, and Buyer shall be responsible for
obtaining its own insurance as of the Closing Date and thereafter. In the
alternative, Buyer may elect to assume the Sellers' insurance policies by
giving the Sellers' notice of such election by the Approval Date. Any deposits
for utilities made by the Sellers shall be refunded to the Sellers and Buyer
shall arrange for any required replacements thereof. In the alternative, Buyer
may elect to keep the utility deposits in place for Buyers' benefit and the
Sellers shall be given a credit adjustment on the Purchase Price.
7.11 Close of Escrow. Provided that all conditions precedent
have been met or waived, and Buyer and the Sellers deliver to Escrow Holder the
documents and funds described in Sections 7.3, 7.4, and 7.5 hereof, and the
Title Company has issued or is unconditionally prepared and committed to issue
to Buyer the Title Policy, the parties shall instruct Escrow Holder by 11:00
a.m. (P.S.T.) on the Closing Date to:
(a) Deliver the Purchase Price (less the Sellers' share of
prorations and costs of escrow) to the Sellers by internal bank transfer to the
bank account or accounts to be designated by the Sellers not less than ten (10)
days prior to the Closing Date, and advise the Sellers by telephone of the
transfer number or numbers provided,
(b) Record the Deed and the Assignment of Leases and
immediately thereafter Escrow Holder shall record such documents with the Santa
Clara County Office Records;
22
<PAGE> 23
(c) Assemble and deliver at least one fully executed
counterpart of the Bill of Sale, the Assignment of Contracts and the Assignment
of Leases to both Buyer and the Sellers; and
(d) Deliver the Tenant Notices and all Estoppel
Certificates to Buyer.
ARTICLE VIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Buyer's Representations. Buyer represents and warrants to the
Sellers as follows:
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of Maryland and is qualified in California
with full power and authority to enter into and comply with the terms of this
Agreement;
(b) Subject to Section 5.7, this Agreement and all
documents executed by Buyer which are to be delivered to the Sellers at the
Closing are or at the time of Closing will be duly authorized, executed, and
delivered by Buyer and this Agreement and such documents are or will be valid
binding obligations of Buyer, and do not and at the time of Closing will not
violate any provisions of any agreement or judicial order to which Buyer is a
party or to which Buyer is subject;
(c) Neither Buyer's execution and delivery of this
Agreement nor Buyer's performance of all obligations hereunder require the
consent or approval of any person other than Buyer. Such execution, delivery
and performance will not result in a breach of or constitute a default under
any indenture, loan or credit agreement, deed of trust, mortgage or other
agreement; and
(d) (1) As of the date of sale, (i) Buyer will not be an
employee benefit plan, as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), which is subject to Title I
of ERISA, nor a plan as defined in Section 4975 of the Internal Revenue Code of
1986, as amended (each of the foregoing are hereinafter referred to
collectively as "Plan"), and (ii) the assets of Buyer used to purchase the
Property will not constitute plan assets of one or more such Plans within the
meaning of Department of Labor ("DOL") Regulation Section 2510.3-101.
23
<PAGE> 24
(2) As of the date of sale, if Buyer is a
"governmental plan" as defined in Section 3(32) of ERISA, the Closing will not
constitute or result in a violation of state or local statutes regulating
investments of fiduciary obligations with respect to governmental plans.
(3) As of the date of sale, Buyer will be acting on
its own behalf and not on account of or for the benefit of any Plan.
(4) Buyer has no present intent to transfer the
Property to any entity, person or Plan which will cause a violation of ERISA.
(5) Buyer shall not assign its interest under this
Agreement to any entity, person or Plan which will cause a violation of ERISA.
8.2 The Sellers' Representations. The Sellers represent and
warrant to Buyer as follows:
(a) the Sellers are general partnerships duly organized,
validly existing and in good standing under the laws of the State of
California. TNE is the sole general partner and 99% owner of each the Sellers.
Sellers have informed Buyer that (i) TNE has entered into a certain Agreement
and Plan of Merger dated as of August 16, 1995 (as amended) with Metropolitan
Life Insurance Company, a New York corporation ("MetLife") pursuant to which
TNE will be merged with and into MetLife as of the Effective Date (as defined
in the Merger Agreement), and MetLife will by operation of law succeed to all
assets and liabilities of TNE ("Metlife Merger), and (ii) accordingly the
documents attached hereto as exhibits and to be delivered pursuant to Section
7.3 may, if the Closing occurs after the Effective Date, be executed by MetLife
instead of TNE;
(b) This Agreement and all documents executed by the
Sellers which are to be delivered to Buyer at the Closing are or shall have
been duly authorized, executed and delivered by the Sellers and this Agreement
and such documents are valid and binding obligations of the Sellers;
(c) Each of the accounts to which the Property is allocated
by Sellers either (i) does not hold assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA which is subject to Title I of ERISA or any
"plan" as defined in Section 4975(c)(1) of the Internal Revenue Code of 1986,
as amended; (ii) is an insurance company general account with respect to which
the requirements of the Prohibited Transaction Class Exemption 95-60, 60 Fed.
Reg.
24
<PAGE> 25
35925 (1995), will be satisfied with respect to acquisition of the property by
the Buyer; or (iii) is an insurance company separate account with respect to
which the requirements of either Prohibited Transaction Class Exemption 84-14,
49 Fed. Reg. 9494 (1984), or 90-1, 55 Fed. Reg. 2891 (1990), will be satisfied
with respect to the acquisition of the Property by the Buyer;
(d) the execution and delivery of this Agreement does not,
and the performance by Sellers of their obligations hereunder will not,
conflict with or result in a breach of or constitute a default under any of the
material terms, conditions or provisions of any material agreement or
instrument to which such Seller is a party or by which such Seller is bound, or
any order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over such Seller;
(e) no consent, approval, order or authorization of or
declaration or filing with any governmental authority remains to be obtained in
connection with the execution and delivery of this Agreement or for the
performance of the transaction herein contemplated by the respective parties
hereto, and no further consents or authorizations are required, except pursuant
to the NYLICO Loans;
(f) there is no litigation ongoing or threatened that would
interfere with the Sellers' ability to carry out the terms of this Agreement or
result in a lien against the Property; and
(g) Sellers represent and warrant to Buyer that Sellers
have expressly directed their asset and property managers to deliver or
otherwise make available to Buyer upon request all materials relating to the
Property in (or hereafter coming into) their possession (whether prior to or
after the Approval Date).
ARTICLE IX
POSSESSION
Possession of the Property shall be delivered to Buyer on
the Closing Date, subject to the rights of any tenants under written Leases.
25
<PAGE> 26
ARTICLE X
OPERATION OF THE PROPERTY
The Sellers shall not, after the date hereof and prior to the Closing
Date or any earlier termination of this Agreement, enter into or terminate any
lease or amendment of lease pertaining to the Property or any service contract
or amendment thereto extending beyond the Closing Date without in each case
obtaining Buyer's prior written consent thereto, which consent Buyer shall not
withhold or delay except in the exercise of sound business judgment and which
shall be deemed given unless denied in writing within three (3) business days
after request therefor. After the date hereof and prior to the Closing Date,
the Sellers shall operate the Property substantially in the manner in which
property operations have been administered by the Sellers during the six (6)
months preceding the date hereof, and make all payments due under the NYLICO
Loans. Sellers shall reasonably cooperate with the efforts of Buyer to obtain
updated or additional property information respecting the subject matter of the
Work Product, but in no event shall any Seller be deemed in default of this
Agreement in any respect whatsoever for failure to deliver such additional
information. After the date hereof and prior to the Closing Date the Sellers
shall not directly or indirectly list any portion of the Property for sale, and
none of the Property shall be conveyed, disposed of, or removed without the
prior written consent of Buyer, except for immaterial items of tangible
personal property in the ordinary course of operations.
Buyer and the Sellers mutually covenant and agree to reasonably
cooperate with each other to cause their commercial general liability insurers
to add the other party, respectively, as an additional insured for incidents
occurring during the time of ownership of the named insured, provided, however,
that no party shall be obligated to expend additional funds for endorsement
cost or insurer indemnity in connection therewith.
ARTICLE XI
LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION
11.1 Damage or Destruction.
(a) In the event that the Improvements are damaged or
destroyed by fire or other casualty prior to the Closing Date and such damage
or destruction is estimated to cost $500,000 or less in the aggregate to repair
or replace (as verified by an architect or contractor reasonably selected by
Buyer and the Sellers) then the Closing Date shall occur as scheduled
26
<PAGE> 27
without any reduction in the Purchase Price notwithstanding such damage or
destruction, and all proceeds of insurance payable to the Sellers by reason of
such damage or destruction shall be paid or assigned to Buyer along with a
payment to Buyer from the Sellers in the amount of the Sellers' deductible, it
being agreed that in such event the Sellers shall have no obligation to repair
or restore the Property.
(b) In the event that any of the Improvements are damaged
or destroyed by fire or other casualty prior to the Closing Date, and such
damage or destruction is estimated to cost more than $500,000 in the aggregate
to repair or replace (as verified by an architect or contractor reasonably
selected by Buyer and the Sellers), then Buyer shall have the option to
terminate this Agreement by written notice to the other within five (5) days
after receipt of notice of the cost of the repair of the damage or destruction.
In the event of such termination, then neither Buyer nor the Sellers shall
thereafter have any obligations or liabilities hereunder except for any
indemnity obligations of either party pursuant to the other provisions of this
Agreement, the Deposit shall be returned to Buyer and each party shall bear its
own costs incurred hereunder. All escrow cancellation charges shall be paid by
Buyer and the Sellers equally. In the event Buyer does not terminate this
Agreement in accordance with this Section 11.1(b), the Closing Date shall occur
as scheduled without any reduction in the Purchase Price notwithstanding such
damage or destruction, and all proceeds of insurance payable to the Sellers by
reason of such damage or destruction shall be paid or assigned to Buyer along
with a payment to Buyer from the Sellers in the amount of the Sellers'
deductible, it being agreed that in such event the Sellers shall have no
obligation to repair or restore the Property.
(c) The Sellers agree to reasonably cooperate with Buyer in
obtaining insurance proceeds from the insurance carrier under Sections 11.1 (a)
and (b) above.
11.2 Condemnation. In the event that prior to the Closing Date, a
governmental entity shall commence any eminent domain proceeding to take any
material portion of the Property, then Buyer shall have the option to elect
either of the following:
(a) Terminate this Agreement by written notice to the Sellers
within five (5) days after its receiving notice of such action of condemnation,
in which event, neither Buyer nor the Sellers shall thereafter have any
obligations or liabilities hereunder except for any indemnity obligations of
either party pursuant to the other provisions of this Agreement, the Deposit
shall be returned to Buyer and each party shall bear its own costs incurred
hereunder. All escrow cancellation charges shall be paid by Buyer and the
Sellers equally; or
(b) Elect to proceed with the transaction, in which case the
Purchase Price shall not be reduced and Buyer shall be entitled to the net
award paid to the Sellers for such taking,
27
<PAGE> 28
if any, and the Sellers shall assign and transfer to Buyer all right, title and
interest in and to any awards, it being expressly agreed that in such event the
Sellers shall have no obligation to repair or restore the Property or any
portion thereof. In the event Buyer and the Sellers agree to proceed with the
transaction, the Sellers shall reasonably cooperate with Buyer so as to
optimize the net award to be paid to Buyer.
If prior to the Closing Date any eminent domain proceeding is commenced
to take any portion of the Property which is not material, then Buyer shall be
entitled to any net award with respect thereto, and Sellers shall assign and
transfer to Buyer all right, title and interest in and to any such awards at
Closing.
ARTICLE XII
DEFAULTS AND REMEDIES
12.1 BUYER'S DEFAULTS AND SELLERS' REMEDIES.
(a) It shall be a default by Buyer under this Agreement (a "Buyer's
Default") if Buyer shall fail to perform its obligations at Closing in
accordance herewith.
(b) If a Buyer's Default with respect to Section 12.1(a) occurs then
the Sellers may, as their sole and exclusive remedy, by giving notice to Buyer,
terminate this Agreement, in which event Buyer shall return all Work Product
materials and any updates thereto to the Sellers and the Sellers shall have the
right to retain the Deposit and all earnings thereon, as liquidated damages
hereunder in accordance with Section 2.4 above. In such event, except as
expressly provided otherwise herein, this Agreement shall be of no further
force and effect and neither Buyer nor the Sellers shall have any further
rights, obligations or liabilities hereunder.
12.2 THE SELLERS' DEFAULT AND BUYER'S REMEDIES.
(a) It shall be a default by Sellers under this Agreement (a "Sellers'
Default") if the Sellers shall fail to perform their obligations at
Closing in accordance herewith.
(b) Buyer's Remedies for the Sellers' Default. If a Sellers' Default
occurs then Buyer may either (as its sole and exclusive remedy in either
case) by giving notice to the Sellers:
28
<PAGE> 29
(x) terminate this Agreement, in which event Buyer shall
return all work product materials and any updates
thereto to the Sellers and Buyer shall be entitled to
the immediate return of the Deposit and all earnings
thereon. In such event, this Agreement shall be of no
further force and effect and neither Buyer nor the
Sellers shall have any further rights, obligations or
liabilities hereunder; or in lieu of the foregoing
right of termination,
(y) the right to bring an action in specific performance
to compel the Sellers to perform this Agreement.
Under no circumstances shall Buyer be entitled to
recover any damages, whether direct, indirect or
consequential unless specific performance is not
available to Buyer because of the intentional conduct
of the Sellers.
ARTICLE XIII
MISCELLANEOUS
13.1 Notices. Any notice required or permitted hereunder shall be in
writing and shall be deemed delivered when sent by a recognized private courier
company or by United States registered or certified mail, one (1) day after
deposit with such courier, postage prepaid, return receipt requested, or if
sent by telecopy shall be deemed delivered when a confirmation of receipt is
received by, and shall be addressed as follows:
If to the Sellers: New England Life Insurance Company
- ----------------- 501 Boylston Street
Boston, MA 02117
Attention: Thomas J. Lunny, Asset Manager
with a copy to: Metropolitan Life Insurance Company
303 Perimeter Center N
Suite 600
Atlanta, GA 30346
Attention: Mark Wilsmann, Assistant Vice President
Real Estate Investments
29
<PAGE> 30
and to: Richard S. Novak, Esq.
Rackemann, Sawyer & Brewster
One Financial Center, 29th Floor
Boston, MA 02111
If to Buyer: Joseph D. Wallace
- ----------- Vice President - Due Diligence
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue, NW
Washington, DC 20006
Jeffrey A. Usow, Esq.
Mayer, Brown & Platt
190 South LaSalle St.
Chicago, IL 60603-3441
or such other address as either party may from time to time specify in writing
to the other in the manner aforesaid.
13.2 Brokers and Finders. In connection with the transaction
contemplated by this Agreement, the Sellers have agreed to pay and shall pay a
brokerage commission to Laurence Blickman of BT Commercial Real Estate pursuant
to separate agreement. In the event of a claim for broker's fee, finder's fee,
commission or other similar compensation in connection herewith other than as
set forth above, Buyer, if such claim is based upon any agreement alleged to
have been made by Buyer, hereby agrees to protect and indemnify the Sellers
against and hold the Sellers harmless from any and all damages, liabilities,
costs, expenses and losses (including, without limitation, reasonable
attorneys' fees and costs) which the Sellers may sustain or incur by reason of
such claim, and the Sellers, if such claim is based upon any agreement alleged
to have been made by the Sellers, hereby agrees to protect and indemnify Buyer
against and hold Buyer harmless from any and all damages, liabilities, costs,
expenses and losses (including, without limitation, reasonable attorneys' fees
and costs) which Buyer may sustain or incur by reason of such claim. The
provisions of this Section shall survive the termination of this Agreement or
the Closing.
30
<PAGE> 31
13.3 Successors and Assigns. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns, except that (i) Buyer's interest under this
Agreement may be assigned, encumbered or otherwise transferred, whether
voluntarily, involuntarily, by operation of law or otherwise, only to an entity
controlled by or under common control with Buyer and (ii) Sellers' interest
hereunder may not be assigned, encumbered or otherwise transferred whether
voluntary, involuntarily, by operation of law, or otherwise, except pursuant to
the MetLife Merger.
13.4 Amendments. This Agreement may be amended or modified only by a
written instrument executed by the party asserted to be bound thereby.
13.5 Continuation and Survival of Representations and Warranties. All
indemnifications, representations and warranties by the respective parties
contained herein shall survive the execution and delivery of this Agreement,
the delivery of the Deed and transfer of title, or the termination of this
Agreement for a period of one year.
13.6 Interpretation. Words used in the singular number shall include
the plural, and vice-versa, and any gender shall be deemed to include each
other gender. The captions and headings of the Articles and Sections of this
Agreement are for convenience of reference only, and shall not be deemed to
define or limit the provisions hereof.
13.7 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
13.8 Merger of Prior Agreements. This Agreement and the exhibits
hereto constitute the entire agreement between the parties with respect to the
purchase and sale of the Property and supersedes all prior and contemporaneous
agreements and understandings between the parties hereto relating to the
subject matter hereof.
13.9 Attorneys' Fees. In the event either Buyer or the Sellers brings
any suit or other proceeding with respect to the subject matter or enforcement
of this Agreement, the prevailing party (as determined by the court, agency or
other authority before which such suit or proceeding is commenced) shall, in
addition to such other relief as may be awarded, be entitled to recover
attorneys' fees, expenses and costs of investigation as actually incurred
(including without limitation court costs, expert witness fees, costs and
expenses of investigation, and all attorneys' fees, costs and expenses in any
such suit or proceeding, including without limitation in any action or
participation in or in connection with any case or proceeding under Chapters 7,
11, or 13 of the Bankruptcy Code, 11 United States Code
31
<PAGE> 32
Sections 101 et seq., or any successor statutes, in establishing or enforcing
the right to indemnification, in appellate proceedings, or in connection with
the enforcement or collection of any judgment obtained in any such suit or
proceeding). The parties hereto expressly agree that (i) all fees, costs and
expenses, including without limitation, attorneys' fees, costs and expenses, as
actually incurred in connection with the enforcement or collection of any
judgment obtained in any such suit or proceeding shall be recoverable as a
separate item and such right of recovery shall be severable from the right to
recover other items under this Section, and (ii) the provisions of this
sentence shall survive the entry of any judgment in any such suit or proceeding
or the termination of this Agreement and shall not merge or be deemed to have
merged into any such judgment.
13.10 Time of the Essence. Time is of the essence of this Agreement.
13.11 Confidentiality. All information, studies and reports relating
to the Property obtained by Buyer, either by the observations and examinations
of its agents and representatives or as disclosed to it by the Sellers, shall
remain confidential and if the transaction contemplated herein fails to close
for any reason, Buyer shall deliver to the Sellers, at Buyer's actual and
reasonable cost of duplication, all such information, reports and studies and
Buyer shall make no further distributions or disclosures of any such
information, reports and studies. Buyer and the Sellers agree that, to the
extent reasonably practical, they shall keep the contents of this Agreement
confidential and that no publicity or press release to the general public with
respect to this transaction shall be made prior to the Closing by either party
without the prior written consent of the other party. Buyer may disclose the
aforesaid information to its affiliates, advisors, consultants and permitted
assigns and may make such disclosures as required by law. Notwithstanding the
foregoing, after the Closing, Buyer may issue a press release regarding the
transaction, provided that no disclosure will be made of the economic terms of
the transaction or the identity of the Sellers, except as expressly required by
law.
13.12 No Waiver. No waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provisions, whether
or not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
13.13 Further Acts. Each party shall, at the request of the other,
execute, acknowledge (if appropriate) and deliver whatever additional
documents, and do such other acts, as may be reasonably required in order to
accomplish the intent and purposes of this Agreement.
32
<PAGE> 33
13.14 Agreement Not to Benefit Third Parties. This Agreement is made
for the sole benefit of the Sellers and Buyer, and no other person shall be
deemed to have any privity of contract under this Agreement nor any right to
rely on this Agreement to any extent for any purpose whatsoever, nor have any
right of action of any kind on this Agreement nor be deemed to be a third party
beneficiary under this Agreement.
13.15 Severability. If any provision of this Agreement or its
application to any person or circumstance shall be invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provisions to other persons or circumstances, other than those to which it is
held invalid, shall not be affected thereby and shall be enforced to the
furthest extent permitted by law; provided, that the invalidity of such
provision does not materially adversely affect the benefits accruing to any
party hereunder.
13.16 Facsimile Signatures. Buyer and the Sellers each (i) has agreed
to permit the use, from time to time and where appropriate, of telecopied
signatures in order to expedite the transaction contemplated by this Agreement,
(ii) intends to be bound by its respective telecopied signature, (iii) is aware
that the other will rely on the telecopied signature, and (iv) acknowledges
such reliance and waives any defenses to the enforcement of the documents
affecting the transaction contemplated by this Agreement based on the fact that
a signature was sent by telecopy.
13.17 Form 1099-S. For the purpose of complying with Section 6045 of
the Internal Revenue Code of 1986, as amended, Escrow Holder shall be deemed
the "person responsible for closing the transaction," and shall be responsible
for obtaining information necessary to file with the Internal Revenue Service
Form 1099-S (Statement for Recipients of Proceeds From Real Estate, Broker and
Barter Exchange Transactions.)
13.18 Audits. The Sellers covenant and agree to reasonably cooperate,
at the expense of Buyer, with the efforts of Buyer and Buyer's auditors in
connection with audits conducted not later than one year after the Closing
Date, provided, however, that all such information shall be expressly subject
to the disclaimers of Article III above, which shall survive the Closing.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
33
<PAGE> 34
Buyer:
- ------
CARRAMERICA REALTY CORPORATION,
a Maryland corporation
By /s/ Robert Stuckey
-------------------------------
Its
--------------------------
Escrow Holder: CHICAGO TITLE INSURANCE COMPANY
- -------------
By /s/
-------------------------------
Its
----------------------------
Sellers: ORCHARD INVESTMENT COMPANY
-------- NUMBER 315, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
34
<PAGE> 35
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
ORCHARD INVESTMENT COMPANY
NUMBER 510, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
35
<PAGE> 36
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS, a
California general partnership, by its general
partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
ORCHARD INVESTMENT COMPANY
NUMBER 606, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
36
<PAGE> 37
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS, a
California general partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
ORCHARD INVESTMENT COMPANY
NUMBER 607, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
37
<PAGE> 38
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS, a
California general partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
ORCHARD INVESTMENT COMPANY
NUMBER 609, a California
general partnership, by its general
38
<PAGE> 39
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS,a
California general partnership, by its general
partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J. Lunny
--------------------
Thomas J. Lunny
Asset Manager
39
<PAGE> 40
ORCHARD INVESTMENT COMPANY
NUMBER 751, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS, a
California general partnership, by its general
partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
40
<PAGE> 41
Thomas J. Lunny
Asset Manager
ORCHARD INVESTMENT COMPANY
NUMBER 901, a California
general partnership, by its general
partners:
NELO, L.P., a California limited partnership,
by its general partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
By: /s/ Thomas J.Lunny
-------------------
Thomas J. Lunny
Asset Manager
CONSOLIDATED ORCHARD INVESTORS, a
California general partnership, by its general
partner:
NEW ENGLAND MUTUAL LIFE
INSURANCE COMPANY, a
Massachusetts corporation
By: /s/ Robert Y. Tsien
--------------------
Robert Y. Tsien
Second Vice President
41
<PAGE> 42
42
<PAGE> 43
EXHIBITS INTENTIONALLY OMITTED
43
<PAGE> 44
FIRST AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT ("First
Amendment") is made and entered into as of this __th day of September, 1996
among (i) ORCHARD INVESTMENT COMPANY NUMBER 315, a California general
partnership ("OIC 315"), ORCHARD INVESTMENT COMPANY NUMBER 510, a California
general partnership, ("OIC 510"), ORCHARD INVESTMENT COMPANY NUMBER 606, a
California general partnership, ("OIC 606"), ORCHARD INVESTMENT COMPANY NUMBER
607, a California General partnership ("OIC 607"), ORCHARD INVESTMENT COMPANY
NUMBER 609, a California general partnership, ("OIC 609"), ORCHARD INVESTMENT
COMPANY NUMBER 751, a California general partnership, ("OIC 751"), and ORCHARD
INVESTMENT COMPANY NUMBER 901, a California general partnership, ("OIC 901")
(collectively, the "Sellers"), each with an address c/o New England Life
Insurance Company, 501 Boylston Street, Boston, Massachusetts 02116-3700 and
(ii) CARRAMERICA REALTY CORPORATION, a Maryland corporation with an address of
1700 Pennsylvania Avenue, NW, Washington, DC 20006 ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller and Buyer entered into a certain Purchase and Sale
Agreement dated as of August 27, 1996 ("Purchase and Sale Agreement"); and
WHEREAS, Seller and Buyer mutually desire to modify and amend the
Purchase and Sale Agreement as set forth below.
AGREEMENT:
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer hereby agree as follows:
1. All capitalized words and phrases in this Amendment not otherwise
defined herein, shall have the same meanings herein as defined in the
Purchase and Sale Agreement.
2. Section 8.1(d)(3) of the Purchase and Sale Agreement is hereby deleted
and replaced by the following:
(d)(3) As of the date of sale, Buyer will be acting on
its own behalf and for its own accounts.
<PAGE> 45
Except as expressly modified hereby, all of the terms, conditions and
provisions of the Purchase and Sale Agreement remain unchanged and are hereby
ratified and confirmed as being in full force and effect.
WITNESS the execution hereof under seal as of the date above first
written.
Buyer: CARRAMERICA REALTY CORPORATION,
- -----
a Maryland corporation
By /s/ Robert Stuckey
----------------------------------------
Its
--------------------------------------
Sellers: ORCHARD INVESTMENT COMPANY
- ------- NUMBER 315, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
-----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
------------------------------------
Mark Wilsmann
Its Assistant Vice President
2
<PAGE> 46
Sellers: ORCHARD INVESTMENT COMPANY
- ------- NUMBER 510, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
--------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
-------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 606, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
-------------------------------
Mark Wilsmann
Its Assistant Vice President
3
<PAGE> 47
Sellers: CONSOLIDATED ORCHARD INVESTORS,
- ------- a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 607, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
4
<PAGE> 48
Sellers: ORCHARD INVESTMENT COMPANY
- ------- NUMBER 609, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
Sellers: ORCHARD INVESTMENT COMPANY
- ------- NUMBER 751, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
5
<PAGE> 49
Sellers: CONSOLIDATED ORCHARD INVESTORS,
- ------- a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 901, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
---------------------------------
Mark Wilsmann
Its Assistant Vice President
6
<PAGE> 50
SECOND AMENDMENT TO
PURCHASE AND SALE AGREEMENT
This SECOND AMENDMENT TO PURCHASE AND SALE AGREEMENT ("Second
Amendment") is made and entered into as of this 26th day of September, 1996
among (i) ORCHARD INVESTMENT COMPANY NUMBER 315, a California general
partnership ("OIC 315"), ORCHARD INVESTMENT COMPANY NUMBER 510, a California
general partnership, ("OIC 510"), ORCHARD INVESTMENT COMPANY NUMBER 606, a
California general partnership, ("OIC 606"), ORCHARD INVESTMENT COMPANY NUMBER
607, a California General partnership ("OIC 607"), ORCHARD INVESTMENT COMPANY
NUMBER 609, a California general partnership, ("OIC 609"), ORCHARD INVESTMENT
COMPANY NUMBER 751, a California general partnership, ("OIC 751"), and ORCHARD
INVESTMENT COMPANY NUMBER 901, a California general partnership, ("OIC 901")
(collectively, the "Sellers"), each with an address c/o New England Life
Insurance Company, 501 Boylston Street, Boston, Massachusetts 02116-3700 and
(ii) CARRAMERICA REALTY CORPORATION, a Maryland corporation with an address of
1700 Pennsylvania Avenue, NW, Washington, DC 20006 ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller and Buyer entered into a certain Purchase and Sale
Agreement dated as of August 27, 1996 ("August Purchase and Sale Agreement");
WHEREAS, Seller and Buyer entered into a certain First Amendment to
Purchase and Sale Agreement dated as of September __, 1996 ("First Amendment")
amending the August Purchase and Sale Agreement ( as so amended, the "Purchase
and Sale Agreement");
WHEREAS, the Purchase and Sale Agreement established September 26,
1996 as the Approval Date (as defined in the Purchase and Sale Agreement);
WHEREAS, Buyer has (i) not yet completed certain items of due
diligence ("Extended Due Diligence Items") expressly set forth in a certain
letter from Joseph D. Wallace to Thomas J. Lunny dated September 25, 1996
(excluding items 17 and 18), a copy of which is attached hereto ("Wallace
Letter") and (ii) raised with the Sellers the possibility of a Recognized
Environmental Condition (as defined in the Purchase and Sale Agreement) having
occurred with respect to the portion of the Land owned by OIC 609 located at
2688-2712 Orchard Parkway, San Jose, California ("Kaiser Parcel") and
WHEREAS, Seller and Buyer mutually desire to further modify and amend
the Purchase and Sale Agreement as set forth below.
<PAGE> 51
AGREEMENT:
In consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Buyer hereby agree as follows:
3. All capitalized words and phrases in this Amendment not otherwise
defined herein, shall have the same meanings as defined in the
Purchase and Sale Agreement.
4. Solely for the purposes of defining the date for making the Second
Deposit under Section 2.2(b) of the Purchase and Sale Agreement, the
Approval Date shall be October 4, 1996.
5. Solely as to the Extended Due Diligence Items, each of which shall be
satisfactory to and approved by Buyer in its sole discretion (it being
agreed that such discretion shall in no event encompass disapproval
based on items other than Extended Due Diligence Items ("Regular Due
Diligence Items")), the Approval Date shall be October 4, 1996, it
being agreed that the Approval Date for all Regular Due Diligence
Items shall be September 26, 1996 (except as expressly otherwise set
forth in the Purchase and Sale Agreement or herein), with all rights
of termination on account of such Regular Due Diligence Items being
irrevocably waived by Buyer simultaneously with the execution and
delivery hereof. To the extent that certain of the Extended Due
Diligence Items constitute title matters ("Extended Title Matters")
which would otherwise be the subject of a title notice under Section
5.1.2 of the Purchase and Sale Agreement, the Approval Date for such
Extended Title Matters shall be October 4, 1996 and the title notice
and response provisions of Article V shall be applicable thereto.
4. Solely as to the Kaiser Parcel, the Environmental Approval Date under
Section 5.6 of the Purchase and Sale Agreement shall be October 17,
1996, it being expressly agreed that (i) the standard for
environmental approval or disapproval of the Kaiser Parcel shall be
approval in the sole discretion (it being agreed that such discretion
shall in no event encompass disapproval based on items other than the
environmental condition of the Kaiser Parcel) of Buyer, regardless of
the existence of a Recognized Environmental Condition, and (ii) the
standard for environmental approval for all portions of the Land other
than the Kaiser Parcel shall be a Recognized Environmental Condition
(as more particularly set forth in said Section 5.6) with an
Environmental Approval Date of October 11, 1996.
5. If Buyer disapproves the Extended Due Diligence Items or the
environmental condition of the Kaiser Parcel in accordance with
paragraph 3 or 4 above, respectively, then the Purchase and Sale
Agreement shall be terminated and neither party shall have any further
rights or obligations hereunder except for any indemnity obligations
of either party pursuant to the other provisions of the Purchase and
Sale Agreement, the Deposit shall be returned to Buyer and each party
shall bear its own costs incurred hereunder. All escrow cancellation
fees shall be paid by Buyer and the Sellers equally.
2
<PAGE> 52
6. This Agreement may be executed in multiple counterparts, all of which
will constitute one (1) original document.
Except as expressly modified hereby, all of the terms, conditions and
provisions of the Purchase and Sale Agreement remain unchanged and are hereby
ratified and confirmed as being in full force and effect.
WITNESS the execution hereof under seal as of the date above first
written.
Buyer: CARRAMERICA REALTY CORPORATION,
- ----- a Maryland corporation
By /s/ Robert Stuckey
---------------------------
Its
-----------------------------
Sellers: ORCHARD INVESTMENT COMPANY
- ------- NUMBER 315, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
3
<PAGE> 53
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 510, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 606, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
4
<PAGE> 54
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 607, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
5
<PAGE> 55
ORCHARD INVESTMENT COMPANY
NUMBER 609, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 751, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
6
<PAGE> 56
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
ORCHARD INVESTMENT COMPANY
NUMBER 901, a California general
partnership, by its general partners:
NELO, L.P., a California limited
partnership, by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
----------------------------------
Mark Wilsmann
Its Assistant Vice President
CONSOLIDATED ORCHARD INVESTORS,
a California general partnership,
by its general partner:
METROPOLITAN LIFE INSURANCE
COMPANY, a New York corporation
By: /s/ Mark Wilsmann
---------------------------------
Mark Wilsmann
Its Assistant Vice President
7
<PAGE> 57
CARRAMERICA REALTY CORPORATION
1700 PENNSYLVANIA AVENUE
WASHINGTON, D.C. 20006
October 4, 1996
VIA FACSIMILE
New England Life Insurance Company
501 Boylston Street
Boston, MA 02117
Attention: Thomas J. Lunny
Asset Manager
RE: THE NELO/ORCHARD PORTFOLIO
Dear Mr. Lunny:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 27, 1996 (as amended, the "Agreement"), among (i) Orchard Investment
Company Number 315 ("OIC 315"), Orchard Investment Company Number 510 ("OIC
510"), Orchard Investment Company Number 606 ("OIC 606"), Orchard Investment
Company Number 607 ("OIC 607"), Orchard Investment Company Number 609 ("OIC
609"), Orchard Investment Company Number 751 ("OIC 751"), and Orchard
Investment Company Number 901 ("OIC 901") (collectively, the "Sellers"), and
(ii) CarrAmerica Realty Corporation ("Buyer"). All defined terms used herein
not otherwise defined herein shall have the same meanings as they have in the
Agreement.
The Agreement established September 26, 1996 as the Approval Date.
The Approval Date was extended with respect to certain items (the "Extended Due
Diligence Items") to October 4, 1996, pursuant to that certain Second Amendment
to Purchase and Sale Agreement dated September 26, 1996 (the "Second
Amendment"). This letter sets forth below certain agreements of Sellers and
Buyer amending and modifying the Agreement.
It is Buyer's understanding that the Agreement shall be modified and
amended as follows, upon execution by Sellers as aforesaid:
1. Solely as to the Extended Due Diligence Items set forth as
Item Nos. 2, 3 and 8 in the "Wallace Letter" (as defined in the Second
Amendment), which shall be satisfactory and approved by Buyer in its sole
discretion (it being agreed that such discretion shall in no event encompass
disapproval based on the other Extended Due Diligence Items), the Approval Date
<PAGE> 58
shall be October 11, 1996, it being agreed that the Approval Date for all other
Extended Due Diligence Items shall be October 4, 1996 (except as expressly
otherwise set forth in Agreement or herein), with all rights of termination on
account of such other Extended Due Diligence Items being waived by Buyer
simultaneously with the execution and delivery of this letter by Sellers and
expressly in consideration of the Purchase Price adjustment in paragraph 2
below. To the extent that title matters may arise in connection with the
remaining due diligence items, as set forth above, the Approval Date for such
title matters shall be October 11, 1996, and the title notice and response
provisions of Article V shall be applicable thereto. The approval dates with
respect to environmental matters shall not be affected hereby.
2. In consideration of all of the agreements of Sellers herein,
the Purchase Price for the Property shall be reduced by the sum of $655,000
(which shall be allocated among the Projects in a manner reasonably acceptable
to Sellers and Buyer) to $119,345,000. Further, with respect to that certain
Lease dated May 17, 1996 between OIC 609 and Boston Scientific Corporation (the
"Boston Scientific Lease"), if the parties reasonably determine that the tenant
thereunder likely will not commence the payment of rent on (i) Phase I as of
November 15, 1996 and (ii) Phase II as of January 7, 1997, as a result of the
acts or omissions of sellers or their agents, an amount equal to $69,418 for
Phase I and $55,854 for Phase II under the Boston Scientific Lease shall be
withheld from the Purchase Price and deposited in escrow with the Escrow
Holder, to be disbursed to satisfy any such non-payment (or less than full
payment) of rent by such tenant. The parties agree to (i) meet no later than
five days prior to Closing to make the foregoing determination and (ii) execute
and deliver to the Escrow Holder at Closing such supplemental escrow
instructions as may be reasonably necessary to effectuate the foregoing. To
the extent that such holdback amount is not disbursed or required to be
disbursed to pay rent to Buyer as aforesaid, it shall be disbursed to Sellers
by not later than (i) for Phase I, the earlier of the day after the rent
commencement date or December 16, 1996, or (ii) for Phase II, the earlier of
the day after the rent commencement date or February 8, 1997.
3. At the Closing, Sellers shall execute and deliver (i) an
Owner's Declaration substantially in the form attached to the Memorandum dated
October 1, 1996 of James A. Parker to Laura A. Miller and Richard S. Novak, as
supplemented as provided herein, and a Statement of transfer tax due and
request that transfer tax declaration not be made a part of the permanent
record in the office of the county recorded (pursuant to section 11932 R&T)
code, substantially in the form submitted to Mr. Novak in Mr. Parker's
September 20, 1996 letter. Buyer also will execute the foregoing Statement of
transfer tax due.
4. It shall be a mutual condition to the respective closing
obligations of Buyer and the Sellers that at the Closing, the other shall
execute and deliver an Assignment and Assumption of Construction Contract, in
substantially the form submitted to Mr. Novak in Mayer, Brown & Platt's
September 27, 1996 letter (but incorporating disclaimer provisions similar to
those contained in Paragraph 1 of Exhibit 1.4 to the Agreement), for the
construction contracts for the construction under the Boston Scientific Lease
and the Lease dated August 8, 1996 with Clarify, Inc. (the "Clarify Lease"),
and any other construction contracts entered into (and approved by Buyer
pursuant to the Agreement) which are to be assigned to and assumed by Buyer at
Closing, in connection with the leases (the Other Leases") with Solitron and
Silicon Valley Shelving, It shall be a further condition of Buyer's obligation
to close that Buyer receive (i) a Consent and
2
<PAGE> 59
Acknowledgement (substantially in the form attached to the foregoing
Assignment) from each such contractor, provided, however, that Buyer's
obligation to close shall not be conditioned (except with respect to the Boston
Scientific leasehold work) upon receipt of a contractor's consent to such
assignment if the applicable contract is assignable by its terms, and (ii) a
proper lien waiver from the contractor performing construction work in
connection with the Boston Scientific Lease, evidencing payment through
Closing. The Sellers agree to use reasonable efforts to obtain such consents
and waivers.
5. It shall be a mutual condition to the respective closing
obligations of Buyer and the Sellers that at the Closing, the other shall
execute and deliver to Buyer an Assignment and Assumption of Consulting
Contract, substantially in the form submitted to Mr. Novak in Mayer Brown &
Platt's September 27, 1996 letter (but incorporating disclaimer provisions
similar to those contained in Paragraph 1 of Exhibit 1.4 to the Agreement), for
the architect's agreements in connection with the construction under the Boston
Scientific Lease and the Clarify Lease, together with any architect's or
consulting contracts entered into (and approved by Buyer pursuant to the
Agreement), which are to be assigned to and assumed by Buyer at Closing, in
connection with the Other Leases referred to above. It shall be a further
condition of Buyer's obligation to close that Buyer receive a Consent and
Acknowledgement (substantially in the form attached to the foregoing
Assignment) from each such architect or consultant, provided, however, that
Buyer's obligation to close shall not be conditioned upon receipt of an
architect's or consultant's consent to such assignment if the applicable
contract is assignable by its terms. The Sellers agree to use reasonable
efforts to obtain such consents.
6. It shall be a condition to Buyer's obligation to close that at
the Closing, Sellers shall cause to be executed and delivered to Buyer (i)
assignments of the declarant and/or developer rights under or pursuant to the
Declarations of Restrictions affecting Project Nos. 510, 606, 607/608, 609 and
901, each assignment to be substantially in the form attached and (ii)
Certificates of Compliance from the declarants under the Declarations of
Restrictions affecting Project No. 510, 606, 607/608, 609 and 901,
substantially in the forms attached (but modified such that any certification
made by Sellers or their constituent partners shall be limited to the actual
knowledge of Thomas J. Lunny). Further, it shall be a condition to Buyer's
obligation to close that at the Closing, Sellers cause Orchard Properties, Inc.
("Orchard") to be removed as "Approving Agent" under the Declarations of
Restrictions applicable to Project Nos. 606, 607/608, 609 and 901, and further
shall cause to be dissolved the "Novell Property Committee" established under
the Declarations of Restrictions applicable to Project No. 901. Sellers will
use their reasonable efforts to cause Orchard to execute the Certificates of
Compliance as "Declarant" or "Approving Agent" substantially in the forms
attached hereto, and to obtain the other Estoppel Certificates and Certificates
of Compliance from third parties substantially in the form attached hereto. It
shall be a condition of Buyer's obligation to close that Buyer shall receive
Certificate of Compliance from each of the declarants, and executed by the
"Approving Agent" where applicable, under the Declarations of Restrictions
applicable to all of the Projects (other than Project 751).
7. Sellers will use their reasonable efforts obtain written
confirmation from Orchard of its approval as "Approving Agent" of the Boston
Scientific Lease and the Clarify Lease. It
3
<PAGE> 60
shall be a condition to Buyer's obligation to close that such confirmation is
received on or before the Closing.
8. Sellers agree to deliver to Buyer no later than five (5)
business days prior to Closing all information necessary to permit Sellers and
Buyer to agree on a proration adjustment for CAM charges in accordance with the
Agreement. The parties agree that Sellers will give a credit to Buyer at
Closing for an amount representing the difference, if any, between (i) the
recoverable capital expenditures set forth in the projections previously
submitted by Sellers to Buyer and (ii) the actual expenditures so made.
9. With respect to the "Kaiser Parcel" (as defined in the Second
Amendment), in the event that certain monitoring wells located on said parcel
are not closed by the Closing, the Sellers shall assign to the Buyer all of
their rights to cause Kaiser to complete such closure. Sellers agree to
reasonably cooperate to permit the former tenant to have access to the Kaiser
Parcel to perform such work.
10. Sellers acknowledge that in the original Agreement (and first
and second amendments thereto), on of the general partners of each of the
Sellers is referred to as Consolidated Orchard Investors, a California general
partnership, rather than COI, Ltd., a California limited partnership ("COI").
By its execution hereof, COI, in its capacity as general partner of each
Seller, hereby confirms and ratifies, and agrees to be bound by, the Agreement,
as heretofore amended.
11. Sellers hereby acknowledge and agree that, in order to satisfy
certain legal requirements in connection with a filing with the Securities and
Exchange Commission, consistent with Section 13.11 of the Agreement, Buyer may
disclose information and documentation relating to the transaction contemplated
by the Agreement, including, without limitation, the terms of the Agreement,
the identity of the Sellers, and rental and operating information, to the
extent Buyer may be required to make such disclosure.
12. For purposes hereof, the "reasonable efforts" of Sellers shall
mean the timely exercise of diligent efforts, including the assertion of
contractual rights possessed by the Sellers, but only to the extent Thomas J.
Lunny is now aware or subsequently becomes informed of such rights. The term
shall not, however, include any obligation of any seller to incur any current
or future liability, expend any monies, or waive or surrender any right or
privilege deemed (in the sole discretion of the applicable Seller) desirable or
valuable.
13. With respect to those conditions to buyer's obligations to
close referenced in Paragraphs 4, 5 and 6 above, which contemplate the
execution and delivery of documents by Sellers or its constituent partners at
Closing, Sellers shall have no liability to Buyer if such deliveries are not
made, and Buyer's sole recourse shall be to terminate the Agreement and recover
its Deposit, unless Sellers or its constituent partners willfully and in bad
faith refuse to execute and deliver such documents at Closing.
14. For purposes of Section 2.2(b) of the Agreement, the Second
Deposit shall be timely made if received by the Escrow Holder on October 7,
1996.
4
<PAGE> 61
15. It shall be a condition to Buyer's obligation to close that
the Title Company not have taken any exception with respect to any rights of
David J. Brown ("Brown") or Golden Triangle Acquisition Co., L.L.C. ("Golden
Triangle").
[Signature Page Follows]
5
<PAGE> 62
If you are in agreement with the foregoing, please sign this letter below.
Very truly yours,
CARRAMERICA REALTY CORPORATION
By:
---------------------------
cc: Mark Wilsmann (via facsimile)
Richard S. Novak (via facsimile)
Jeffrey A. Usow (via facsimile)
AGREED TO AND ACCEPTED
this ______ day of October, 1996
OIC 315, OIC 51O, OIC 606, OIC 607,
OIC 609, OIC 751 and OIC 901
By: NELO, L.P., a California limited
partnership, its general partner
By: Metropolitan Life Insurance
Company, a New York
corporation
By:
--------------------------
Its:
-------------------------
By: COI, Ltd., a California limited partnership
By: Metropolitan Life Insurance
Company, a New York
corporation
By:
--------------------------
Its:
-------------------------
6
<PAGE> 63
NEW ENGLAND LIFE INSURANCE COMPANY
501 BOYLSTON STREET
BOSTON, MA 02117
October 11, 1996
VIA FACSIMILE
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue
Washington, D.C. 20006
Attention: Joseph D. Wallace, Vice President
RE: THE NELO/ORCHARD PORTFOLIO: NYLICO CONSENT AND SIGN EASEMENT
Dear Mr. Wallace:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 27, 1996 (as amended, the "Agreement"), among (i) Orchard Investment
Company Number 315 ("OIC 315"), Orchard Investment Company Number 510 ("OIC
510"), Orchard Investment Company Number 606 ("OIC 606"), Orchard Investment
Company Number 607 ("OIC 607"), Orchard Investment Company Number 609 ("OIC
609"), Orchard Investment Company Number 751 ("OIC 751"), and Orchard
Investment Company Number 901 ("OIC 901") (collectively, the "Sellers"), and
(ii) CarrAmerica Realty Corporation ("Buyer"). All defined terms used herein
not otherwise defined herein shall have the same meanings as they have in the
Agreement.
The Agreement established September 26, 1996 as the Approval Date.
The Approval Date was extended with respect to certain items (the "Extended Due
Diligence Items") to October 4, 1996, pursuant to that certain Second Amendment
to Purchase and Sale Agreement dated September 26, 1996 (the "Second
Amendment"). The Approval Date for the Extended Due Diligence Items set forth
as Item Nos. 2, 3 and 8 in the "Wallace Letter" (as defined in the Second
Amendment) (the "October 11 Items") was further extended to October 11, 1996,
pursuant to that certain letter agreement between the Buyer and the Sellers
dated October 4, 1996 ("October 4 Letter").
The Sellers have agreed with the Buyer as follows:
<PAGE> 64
1. WAIVER OF EXTENDED DUE DILIGENCE ITEMS. Subject to the items
expressly set forth in the Agreement (as amended through the Second Amendment)
and the October 4 Letter, Buyer hereby approves and waives the Extended Due
Diligence Items and all items to be reviewed and approved under Agreement other
than (i) as expressly set forth in paragraph 4 of Second Amendment and (ii) as
to the follow up environmental testing reports by ATC Environmental, Inc. for
OIC 510 (dated September 23, 1996) and OIC 609 dated (October 10 1996)
("510/609 Follow Up Reports"). The Environmental Approval Date for the 510/609
Follow Up Reports shall be October 17, 1996, it being expressly agreed that (i)
the standard for disapproval of the 510/609 Follow Up Reports shall be whether
such reports are consistent in all material respects with the prior
environmental reports for such properties and (ii) such disapproval shall in no
event encompass disapproval based on items other than the 510/609 Follow Up
Reports.
2. SIGN EASEMENT. If so requested by Buyer and Orchard
Properties, Sellers shall execute and deliver to Buyer at the Closing an
amendment to the sign easement referred to in the October 11 Items (in the form
attached hereto as Exhibit A), and at the Closing Sellers shall pay the
consideration payable to Orchard Properties in respect of its execution of the
Amendment up to, but not more than, the amount of Forty Thousand Dollars
($40,000).
3. NYLICO LOANS The Buyer has obtained from NYLICO a letter
dated October 11, 1996, ("NYLICO Consent"). Conditioned upon the Buyer making
all payments referred to in the NYLICO Consent as set forth in Section 2.1 of
the Agreement or reimbursing Sellers for any such payments made by Sellers, the
Sellers hereby agree to (i) deliver an acceptance of the NYLICO Consent
substantially in the form attached hereto as Exhibit B, provided that such
acceptance shall expressly disclaim any obligation of any Seller to incur any
current or future liability, expend any monies, or waive or surrender any right
or privilege deemed (in the sole discretion of the applicable Seller) desirable
or valuable and (ii) to use reasonable efforts, as defined herein to assist
Buyer in consummating the transactions contemplated by the NYLICO Consent. For
purposes hereof, the "reasonable efforts" of Sellers shall mean the timely
exercise of diligent efforts, including the assertion of contractual rights
possessed by the Sellers, but only to the extent Thomas J. Lunny is now aware
or subsequently becomes informed of such rights. The term shall not, however,
include any obligation of any seller to incur any current or future liability,
expend any monies, or waive or surrender any right or privilege deemed (in the
sole discretion of the applicable Seller) desirable or valuable.
2
<PAGE> 65
Your continued cooperation in connection with this matter is appreciated.
Very truly yours,
OIC 315, OIC 51O, OIC 606, OIC 607,
OIC 609, OIC 751 and OIC 901
By: NELO, L.P., a California limited
partnership, its general partner
By: Metropolitan Life Insurance
Company, a New York
corporation
By: /s/ Mark Wilsmann
-------------------------------
Its: Assistant Vice President
-----------------------------
By: COI, Ltd., a California
limited partnership
By: Metropolitan Life Insurance
Company, a New York
corporation
By/s/ Mark Wilsmann
--------------------------------
Its:Assistant Vice President
3
<PAGE> 66
NEW ENGLAND LIFE INSURANCE COMPANY
501 BOYLSTON STREET
BOSTON, MA 02117
November 4, 1996
VIA FACSIMILE
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue
Washington, D.C. 20006
Attention: Joseph D. Wallace, Vice President
RE: THE NELO/ORCHARD PORTFOLIO: EXTENSION OF CLOSING DATE TO
NOVEMBER 5, 1996
Dear Mr. Wallace:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 27, 1996 (as amended, the "Agreement"), among (i) Orchard Investment
Company Number 315 ("OIC 315"), Orchard Investment Company Number 510 ("OIC
510"), Orchard Investment Company Number 606 ("OIC 606"), Orchard Investment
Company Number 607 ("OIC 607"), Orchard Investment Company Number 609 ("OIC
609"), Orchard Investment Company Number 751 ("OIC 751"), and Orchard
Investment Company Number 901 ("OIC 901") (collectively, the "Sellers"), and
(ii) CarrAmerica Realty Corporation ("Buyer"). All defined terms used herein
not otherwise defined herein shall have the same meanings as they have in the
Agreement.
The Agreement establishes November 4, 1996 as the Closing Date.
Notwithstanding the efforts of the Sellers and Buyer, however, a number of
outstanding closing conditions remain unresolved as of the date hereof.
Accordingly, the Buyer and the Sellers mutually hereby extend the
Closing Date from November 4, 1996 to November 5, 1996. In all other respects,
the Agreement is ratified and confirmed as being in full force and effect.
If this letter accurately reflects the understanding between us,
please execute a counterpart where indicated below.
Very truly yours,
<PAGE> 67
OIC 315, OIC 51O, OIC 606, OIC 607,
OIC 609, OIC 751 and OIC 901
By: NELO, L.P., a California limited
partnership, its general partner
By: Metropolitan Life Insurance
Company, a New York
corporation
By: /s/ Mark Wilsmann
-------------------------------
Its:Assistant Vice President
-------------------------------
By: COI, Ltd., a California
limited partnership
By: Metropolitan Life Insurance
Company, a New York
corporation
ACCEPTED AND AGREED TO By: /s/ Mark Wilsmann
this 4th day of November, 1996 -------------------------------
CARRAMERICA REALTY CORPORATION Its: Assistant Vice President
------------------------------
By: /s/ Robert Stuckey
-----------------------
Its:
------------------------------
2
<PAGE> 68
NEW ENGLAND LIFE INSURANCE COMPANY
501 BOYLSTON STREET
BOSTON, MA 02117
November 5, 1996
VIA FACSIMILE
CarrAmerica Realty Corporation
1700 Pennsylvania Avenue
Washington, D.C. 20006
Attention: Joseph D. Wallace, Vice President
RE: THE NELO/ORCHARD PORTFOLIO: EXTENSION OF CLOSING DATE TO
NOVEMBER 6, 1996
Dear Mr. Wallace:
Reference is made to that certain Purchase and Sale Agreement dated as
of August 27, 1996 (as amended, the "Agreement"), among (i) Orchard Investment
Company Number 315 ("OIC 315"), Orchard Investment Company Number 510 ("OIC
510"), Orchard Investment Company Number 606 ("OIC 606"), Orchard Investment
Company Number 607 ("OIC 607"), Orchard Investment Company Number 609 ("OIC
609"), Orchard Investment Company Number 751 ("OIC 751"), and Orchard
Investment Company Number 901 ("OIC 901") (collectively, the "Sellers"), and
(ii) CarrAmerica Realty Corporation ("Buyer"). All defined terms used herein
not otherwise defined herein shall have the same meanings as they have in the
Agreement.
The Agreement establishes November 5, 1996 as the Closing Date.
Notwithstanding the efforts of the Sellers and Buyer, however, a number of
outstanding closing conditions remain unresolved as of the date hereof.
Accordingly, the Buyer and the Sellers mutually hereby extend the
Closing Date from November 5, 1996 to November 6, 1996. In all other respects,
the Agreement is ratified and confirmed as being in full force and effect.
If this letter accurately reflects the understanding between us,
please execute a counterpart where indicated below.
Very truly yours,
<PAGE> 69
OIC 315, OIC 51O, OIC 606, OIC 607,
OIC 609, OIC 751 and OIC 901
By: NELO, L.P., a California limited
partnership, its general partner
By: Metropolitan Life Insurance
Company, a New York
corporation
By: /s/ Mark Wilsmann
----------------------------
Its: Assistant Vice President
--------------------------
By: COI, Ltd., a California
limited partnership
By: Metropolitan Life Insurance
Company, a New York
corporation
ACCEPTED AND AGREED TO By: /s/ Mark Wilsmann
this 5th day of November, 1996 ----------------------------
Its:Assistant Vice President
---------------------------
CARRAMERICA REALTY CORPORATION
By:/s/ Robert Stuckey
-------------------------------
Its
-------------------------------
2
<PAGE> 1
EXHIBIT 10.2
AGREEMENT OF PURCHASE AND SALE
[SPALDING RIDGE]
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and
entered into by SPALDING RIDGE, L.L.C., a Georgia limited liability company
("Seller") and CARRAMERICA REALTY CORPORATION, a Maryland corporation
("Purchaser") under the following circumstances:
A. Contemporaneously herewith, Purchaser is entering into four
other Agreements of Purchase and Sale, one with Holcomb Place, L.P., a Georgia
limited partnership (the "Holcomb Agreement"), one with Dekalb Chase, L.P., a
Georgia limited partnership (the "Dekalb Chase Agreement"), two with Boca
Corners, L.P., a Georgia limited partnership (the "Boca Corners Agreements")
and one with AOP, L.P., a Georgia limited partnership (the "AOP Agreement")
(the foregoing agreements are sometimes hereinafter collectively called the
"Related Purchase Agreements").
B. Pursuant to the Holcomb Agreement, the Dekalb Chase
Agreement and the Boca Corners Agreements (sometimes hereinafter collectively
referred to as the "Boca Corners Portfolio Agreements"), for an aggregate
purchase price of $71,300,000 and upon and subject to the terms and conditions
therein set forth, Purchaser has agreed to purchase, and the above referenced
partnerships entering into such agreement (collectively, the "Boca Corners
Sellers") have agreed to sell to Purchaser, the six office and office/service
properties located in Atlanta, Georgia and the one office/service property
located in Boca Raton, Florida described in such agreements (the "Boca Corners
Properties").
C. Pursuant to the AOP Agreement, for a purchase price of
$43,200,000 and upon and subject to the terms and conditions therein set forth,
Purchaser has agreed to purchase from the above referenced limited partnership
entering into such agreement (the "AOP Seller") the five office and
office/service properties located in Atlanta, Georgia described in such
agreement (the "AOP Properties").
D. Contemporaneously herewith, Purchaser is also entering into
that certain Asset Purchase Agreement (the "Asset Purchase Agreement") with
Peterson Management Company, a Georgia corporation ("Peterson Management")
pursuant to which, for a purchase price of $10,500,000 and upon and subject to
the terms and conditions therein set forth, Purchaser has agreed (i) to acquire
and Peterson Management has agreed to sell to Purchaser, substantially all of
the assets of Peterson Management, including the accounts receivable,
personalty, management and leasing agreements, and other contract rights more
particularly described therein (the "Management Assets"), and (ii) that it will
enter into an employment agreement (the "Employment Agreement") and a
non-complete agreement (the "Non-Compete Agreement") with Robert Peterson, all
as therein provided for, upon the consummation of the transactions contemplated
under such agreement, as well as those contemplated under this Agreement and
the other agreements hereinbefore described (other than the Spalding Ridge
Agreement).
<PAGE> 2
E. It is the intention of the parties to this Agreement and the
above agreements that the transactions provided for under such agreements be
interdependent, and that none of such transactions shall proceed unless all of
such transactions proceed.
NOW THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, Purchaser and Seller hereby agree as follows:
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Seller Notice Address:
c/o Peterson Properties
Attn: Robert E. Peterson
Suite 700
2849 Paces Ferry Road
Atlanta, Georgia 30339
Telephone: 770-432-3200
Facsimile: 770-431-0782
With a copy to: King & Spalding
191 Peachtree Street
Suite 4800
Atlanta, Georgia 30303
Attn: Scott J. Arnold
Telephone: 404/572-4600
Facsimile: 404/572-5148
(b) Purchaser Notice Address:
CARRAMERICA REALTY CORPORATION
Attention: Robert G. Stuckey and
Joseph D. Wallace
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Telephone: 202/624-7500
Facsimile: 202/638-0102
With a copy to: Mayer, Brown & Platt
Attn: Caroline Brower
141 East Palace Avenue
Santa Fe, New Mexico 87501
Telephone: 505/820-8186
Facsimile: 505/820-7334
(c) Date of this Agreement: The later date of execution by the
Seller and the Purchaser, as
indicated on the signature page.
(d) Purchase Price: $5,236,040.
<PAGE> 3
(e) Earnest Money: $100,000.
(f) Due Diligence Period: The period ending 60 days after the
Date of this Agreement.
(g) Closing Date: As designated by the Purchaser upon not less
than 5 days' prior notice to Seller, but no
later than 10 days after the expiration of
the Due Diligence Period, as such date may be
extended pursuant to any express provision of
this Agreement.
(h) Title Company: Chicago Title Insurance Company
Attn: Frank Jansen
700 South Flower Street, Suite 920
Los Angeles, California 90017
Telephone: 213/488-4346
Facsimile: 213/891-0834
(i) Escrow Agent: Chicago Title Insurance Company
Attn: Erica Meinhardt
5775-C Peachtree Dunwoody Road
Suite 200
Atlanta, Georgia 30342
Telephone: 404/303-6300
Facsimile: 404/303-6302
1.2 Property. Subject to the terms and conditions of this
Agreement of Purchase and Sale (the "Agreement"), Seller agrees to sell to
Purchaser, and Purchaser agrees to purchase from Seller, the following property
(collectively, the "Property"):
(a) The "Real Property," being the land described in Exhibit A
attached hereto; all improvements and fixtures (other than fixtures owned by
tenants pursuant to the Leases) located thereon, including but not limited to
the office building and related improvements under construction on such land
(collectively, the "Improvements"); all and singular the rights, benefits,
privileges, easements, tenements, hereditaments, and appurtenances thereon or
in anywise appertaining to such real property; and all right, title, and
interest of Seller in and to all strips and gores and any land lying in the bed
of any street, road or alley, open or proposed, adjoining such real property.
(b) The landlord's interest in the "Leases," being all leases of
space or other occupancy agreements affecting the Improvements, including
leases or occupancy agreements which may be made by Seller after the date
hereof and before Closing as permitted by this Agreement, and all amendments
and supplements thereto, together with any and all guaranties and security
received by the landlord in connection therewith.
<PAGE> 4
(c) The "Personal Property," being all right, title and interest
of Seller in and to all tangible personal property now or hereafter used in
connection with the operation, ownership, maintenance, management, or occupancy
or improvement of the Real Property, including without limitation: equipment;
machinery; furniture; art work; furnishings; office equipment and supplies;
and, whether stored on or offsite, all tools, supplies, and construction and
finish materials not incorporated in the Improvements and held for repairs and
replacements. The term "Personal Property" also shall include any and all
deposits, bonds or other security deposited or delivered by Seller with or to
any and all governmental bodies, utility companies or other third parties in
connection with the operation, ownership, maintenance, management, occupancy or
improvement of the Real Property.
(d) The "Project Agreements" being all right, title and interest
of Seller in and to all contracts and agreements for design, engineering,
consulting, equipment, supply, furnishing and construction services provided or
to be provided in connection with the Land and/or the Improvements, and all
change orders, amendments or modifications thereto and all guaranties, bonds
and security received in connection therewith.
(e) The "Intangible Property," being all, right, title and
interest of Seller in and to all intangible personal property now or hereafter
used in connection with the design, construction, operation, ownership,
maintenance, management, or occupancy of the Real Property, including without
limitation: all construction plans, drawings and specifications for the
Improvements, including without limitation all landscaping plans (the "Plans
and Specifications"), which Plans and Specifications are itemized in Exhibit B
hereto, and all development plans, shop drawings and other submittals; all
bonds, security instruments, letters of credit and/or cash or other collateral
posted by Seller with any governmental entity to secure Seller's completion of
any of the Improvements as well as any bonds or security received by Seller
from any contractor or subcontractor under any of the Project Agreements; all
trade names and trade marks associated with the Real Property, including
without limitation the name of the building comprising a part of the
Improvements; all construction and building permits, approvals and licenses and
applications for any of the foregoing; warranties; indemnities; claims against
third parties; applications, permits, approvals and licenses (to the extent
assignable); insurance proceeds and condemnation awards or claims thereto to be
assigned to Purchaser hereunder; and all books and records relating to the
Property.
1.3 Earnest Money. Within 5 business days after the execution of
this Agreement, Purchaser shall deposit the Earnest Money with the Escrow
Agent. The Escrow Agent shall pay the Earnest Money to Seller at and upon the
Closing, or otherwise, to the party entitled to receive the Earnest Money in
accordance with this Agreement and that certain Earnest Money Escrow Agreement
entered into contemporaneously herewith by the parties and the Escrow Agent
(the "Earnest Money Escrow Agreement"). The Earnest Money shall be held and
disbursed by the Escrow Agent pursuant the Earnest Money Escrow Agreement. In
addition to any other right or remedy of Purchaser under this Agreement, the
Earnest Money shall promptly be returned to Purchaser pursuant to the Earnest
Money Escrow Agreement if Seller is in default under this Agreement, or
Peterson Management or any of the Related Sellers are in default under the
Asset Purchase Agreement or any of the Related Purchase Agreements, as
<PAGE> 5
applicable, and Purchaser elects to terminate this Agreement pursuant to
Paragraph 1.5, or if this Agreement is terminated for any reason other than
Purchaser's default hereunder.
1.4 Remedies. Seller's sole remedy in the event of Purchaser's
default in its obligation to close this transaction shall be to terminate this
Agreement and to retain as liquidated damages the Earnest Money, Seller waiving
all other rights or remedies in the event of such default by Purchaser. The
parties acknowledge that Seller's actual damages in the event of a default by
Purchaser under this Agreement will be difficult to ascertain, and that such
liquidated damages represent the parties' best estimate of such damages. In
the event of a Seller default hereunder, if such default is willful or
intentional, Purchaser may elect to terminate this Agreement and receive a
refund of the Earnest Money, or to pursue such other remedies as may be
available to Purchaser at law or in equity, including specific performance.
If, however, Seller's default is not willful or intentional, and if the remedy
of specific performance is available to Purchaser, the remedy of specific
performance shall be Purchaser's sole and exclusive remedy hereunder, Purchaser
hereby waiving the right to sue Seller for monetary damages, or for any
remedies available at law or in equity other than the right of specific
performance. If, however, Seller shall default hereunder and the equitable
remedy of specific performance is not available, then Purchaser shall have the
right to seek recovery from Seller of Purchaser's direct damages, but hereby
waives any right to recover any consequential, speculative or other special
damages in such event. For purposes of this provision, specific performance
shall be considered not available to Purchaser if the court declines to grant
the remedy of specific performance or if the nature of Seller's default or
other conditions then existing are such that upon obtaining specific
performance Purchaser would receive materially less than Purchaser bargained
for in this Agreement.
1.5 Interdependent Transactions. Seller and Purchaser agree
that:
(i) Purchaser's obligations under this Agreement are
expressly contingent upon Seller, the Boca Corners Sellers and the AOP Seller
(the "Related Sellers") performing their obligations under the Related Purchase
Agreements and Peterson Management performing its obligations under the Asset
Purchase Agreement;
(ii) Seller's obligations under this Agreement are expressly
contingent upon Purchaser performing its obligations under the Related Purchase
Agreements and the Asset Purchase Agreement;
(iii) The Closing under this Agreement and the closings under
the Related Purchase Agreements, and the Asset Purchase Agreement shall occur
simultaneously and Seller and Purchaser shall cooperate with one another in so
scheduling the Closing. Any extension of the closing date under any of the
Related Purchase Agreements or the Asset Purchase Agreement pursuant to any
express provision therein set forth (but not if by subsequent mutual agreement)
shall automatically result in an extension of the Closing Date under this
Agreement;
(iv) In the event any of the Related Sellers or Peterson
Management default in their obligations under the Related Purchase Agreements
<PAGE> 6
or the Asset Purchase Agreement and Purchaser elects to endeavor to obtain
specific performance of the subject agreement(s), Purchaser may proceed with
the Closing hereunder on the date scheduled as the Closing Date or, so long as
Purchaser is not in default hereunder; adjourn the Closing hereunder for such
period of time as may be necessary for Purchaser (not to exceed 120 days),
proceeding with reasonable diligence and in good faith, to obtain such remedy.
If Purchaser has elected to adjourn the Closing hereunder, and if the remedy of
specific performance is not available to Purchaser or the aforesaid 120 day
period expires prior to obtain relief satisfactory to Purchaser, then Purchaser
may, by delivering written notice to Seller, proceed with the Closing hereunder
or terminate this Agreement, in which event the Earnest Money shall be returned
to Purchaser and neither party shall have any further rights or obligations
hereunder, except pursuant to any provisions which by their terms survive any
termination of this Agreement. For purposes of this provision, specific
performance shall be considered not available to Purchaser if the court
declines to grant the remedy of specific performance or if the nature of the
applicable party's default is such that upon obtaining specific performance
Purchaser would receive materially less than Purchaser bargained for in the
subject agreement;
(v) In the event Purchaser terminates any of the Related
Purchase Agreements or the Asset Purchase Agreement pursuant to any express
right therein granted, for reasons other than a default of the applicable
Related Sellers or Peterson Management thereunder, this Agreement shall
automatically terminate concurrently therewith and Purchaser shall receive a
refund of all earnest money deposited hereunder and thereunder; and
(vi) Any default by Purchaser under any of the Related
Purchase Agreements and/or the Asset Purchase Agreement shall constitute a
default by Purchaser under this Agreement.
ARTICLE 2: INSPECTION
2.1 Seller's Delivery of Specified Documents. To the extent such
items are in Seller's possession or control and have not heretofore been
provided to Purchaser, Seller shall provide to Purchaser or give Purchaser, and
its representatives full access to, at all reasonable times, within 5 business
days after the Date of this Agreement, the following with respect to the
Property, as well as such other information as Purchaser may reasonably request
(the "Property Information"):
(a) Rent Roll. A current rent roll and delinquency report,
including outstanding tenant concessions, tenant improvement reimbursements,
leasing commissions or fees, and outstanding landlord obligations for tenant
improvements (collectively for all Projects, the "Rent Rolls") certified by a
representative of Seller satisfactory to Purchaser;
(b) Tax Statements. Copies or a summary of ad valorem tax
statements relating for the current year or other current tax period (if
available);
(c) Leases. Copies of all Leases (and any and all guaranties or
other security in connection therewith);
<PAGE> 7
(d) Commission Schedule and Agreements. A schedule (the
"Commission Schedule") and copies of all commission agreements related to the
Leases or the Property;
(e) Tenant Information. Copies of financial statements of all
tenants under Leases;
(f) Project Agreements. A list together with copies of all
Project Agreements;
(g) Leasing Materials. All lease files, proposals, leasing
brochures and other materials relating to the marketing of the Property;
(h) Reports. Any environmental, soil, structural engineering,
drainage and other physical inspection reports, assessments, audits and surveys
related to the Property;
(i) Plans and Specifications. The Plans and Specifications,
together with any Construction Change Directives, Addenda, Modifications,
approved Change Orders and any pending Change Orders (as such items are defined
in the documents prepared by the American Institute of Architects) or change
order requests or other requests or demands for an extension of time for
performance and/or additional compensation under any of the Project Agreements;
copies of all payment and/or performance bonds or other security received from
any contractor or subcontractor under any of the Project Agreements; copies of
all bonds, security instruments, letters of credit or other collateral posted
by Seller with any governmental authority to secure Seller's obligation to
complete any of the Improvements; project meeting minutes, project logs, cash
flow reports, applications for payment, payment certifications, construction
schedules and updates of same; inspection reports from any governmental entity;
pending requests for information or clarifications; lien waivers, any stop work
notices, or claims for mechanics' liens; all books, records, notices,
correspondence and files relating to the design, engineering and construction
of the Improvements; all shop drawings and other submittals and any space
planning plans, workletters, drawings and specifications relating to any tenant
space (collectively the "Project Documents");
(j) Insurance. Copies of Seller's certificates of insurance for
the Property and any notices received from insurance carriers as well as
certificates of the insurance required from all contractors, engineers, and
architects providing services in connection with the Improvements;
(k) Proceedings. Copies of any documents or materials relating to
any litigation, investigation, condemnation, or proceeding of any kind pending
or threatened affecting the Property or the ability of Seller to consummate the
transaction contemplated by this Agreement; and
(l) Existing Title and Survey Documents. Copy of Seller's
existing title insurance policy and any existing surveys of the Property.
At such time as the last item of Property Information shall have been
delivered or made available to Purchaser, Seller shall deliver to Purchaser a
written notice (the "Property Information Notice") certifying that all such
deliveries have been completed together with an itemization of the matters
delivered or made available to Purchaser. Seller shall have the continuing
<PAGE> 8
obligation during the pendency of this Agreement to provide Purchaser with any
document described above and coming into Seller's possession or produced by
Seller after the initial delivery of the Property Information.
2.2 Due Diligence. Purchaser shall have through the last day of
the Due Diligence Period in which to examine, inspect, and investigate the
Property and, in Purchaser's sole and absolute judgment and discretion, to
determine whether the Property is satisfactory to Purchaser and to obtain
appropriate internal approval to proceed with this transaction. Purchaser may
terminate this Agreement pursuant to this Paragraph 2.2 by giving notice of
termination to Seller on or before the last day of the Due Diligence Period.
This Agreement shall continue in full force and effect if Purchaser does not
give the notice of termination. Upon such termination, the Earnest Money shall
be refunded to Purchaser immediately upon request, and all further rights and
obligations of the parties under this Agreement shall terminate, except
pursuant to any provisions which by their terms survive a termination of this
Agreement.
Purchaser shall have reasonable access to the Property and all books
and records for each Project that are in Seller's or its property manager's
possession or control for the purpose of conducting surveys, architectural,
engineering, geotechnical and environmental inspections and tests (including
intrusive inspection and sampling with Seller's prior written consent not to be
unreasonably withheld or delayed), and any other inspections, studies, or tests
reasonably required by Purchaser. During the pendency of this Agreement,
Purchaser and its agents, employees, and representatives shall have a
continuing right of reasonable access to the Property and any offices where the
records of the Property are kept for the purpose of examining and making copies
of all books and records and other materials relating to the Property in
Seller's or its property manager's possession or control. In the course of its
investigations, Purchaser may make inquiries to third parties, including,
without limitation, tenants, any lender providing construction financing for
the Improvements, contractors, subcontractors, architects, engineers, and other
parties to the Project Agreements and municipal, local and other government
officials and representatives, and Seller consents to such inquiries.
Purchaser shall keep the Property free and clear of any liens arising by,
through or under Purchaser, and will indemnify, defend, and hold Seller
harmless from all claims asserted by third parties against Seller to recover
for personal injury or property damage as a result of Purchaser's entry onto
the Property. If any inspection or test disturbs the Property, Purchaser will
restore the Property to its condition before any such inspection or test. The
obligations of Purchaser under the preceding two sentences shall survive the
Closing or termination of this Agreement.
2.3 Tenant Estoppels. Seller shall endeavor to secure and deliver
to Purchaser, no later than 2 business days before the Closing Date, estoppel
certificates from tenants under all Leases in the form of Exhibit C attached
hereto (the "Tenant Estoppels"). The Tenant Estoppels shall be delivered to
Purchaser no later than 10 days prior to the expiration of the Due Diligence
Period. Seller shall provide Purchaser with copies of the Tenant Estoppels for
Purchaser's review and comment before delivering the Tenant Estoppels to
tenants. Purchaser's obligation to close this transaction is subject to the
condition that (i) as of Closing Purchaser shall have received a Tenant
Estoppel in the form set forth as Exhibit C from each tenant that has then
<PAGE> 9
executed a Lease, (ii) each such Lease shall be in full force and effect
subject only to satisfaction of the landlord's obligations to be performed
prior to the commencement date of the term, and (iii) no tenant under any
Leases shall have initiated or had initiated against it any insolvency,
bankruptcy, receivership or other similar proceeding.
If Seller is unable to obtain all the Tenant Estoppels in the
required form above, Purchaser shall have the option, as its sole and exclusive
remedy, of either terminating this Agreement and receiving a refund of the
Earnest Money, or proceeding with the Closing.
ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Purchaser shall
cause to be prepared (and shall deliver copies to Seller and its counsel) (i) a
current, effective commitment for title insurance (the "Title Commitment")
issued by the Title Company, in the amount of the Purchase Price with Purchaser
as the proposed insured, and accompanied by true, complete, and legible copies
of all documents referred to in the Title Commitment, (ii) a current ALTA-ACSM
Urban survey of the Property (the "Survey"), including a certification
addressed to Purchaser, in the form attached hereto as Exhibit D; and (iii)
copies of Uniform Commercial Code searches in the name of Seller, any manager
of Seller, and the Property issued by the Title Company or a search company
acceptable to Purchaser ("UCC Searches").
3.2 Title Review and Cure. During the Due Diligence Period,
Purchaser shall review title to the Property as disclosed by the Title
Commitment, the Survey and UCC Searches. Purchaser shall be entitled to object
to any title matters shown on the Title Commitment, Survey or UCC Searches, in
its sole discretion, by a written notice of objections delivered to Seller on
or before the expiration of the Due Diligence Period. Seller will cooperate
with Purchaser, at no expense to Seller, in curing any objections Purchaser may
have to title to the Property. Seller shall have no obligation to cure title
objections except liens and security interests created by, under or through
Seller, all of which liens and security interests Seller shall cause to be
released at the Closing. Seller agrees to remove such exceptions or
encumbrances to title which arise after the Date of this Agreement to the
extent created by, through or under Seller. As to any other exceptions or
objections raised by Purchaser, Seller shall have, without any obligations to
do so, 14 days from the receipt of Purchaser's notice of objections either to
have such exceptions or objections removed or, if acceptable to Purchaser, to
provide affirmative title insurance protection for such exceptions satisfactory
to Purchaser in Purchaser's sole discretion. If Seller fails either to provide
for the removal of such exceptions or objections or to obtain affirmative title
insurance protection for such exceptions or objections satisfactory to
Purchaser in Purchaser's sole discretion within such 14 day period, then
Purchaser may elect to terminate this Agreement by delivering written notice to
Seller within 14 days following such period. Upon delivery of such termination
notice by Purchaser, this Agreement shall automatically terminate, the parties
shall be released from all further obligations under this Agreement except
pursuant to any provisions which by their terms survive a termination of this
Agreement, and the Earnest Money shall be immediately returned to the
Purchaser. If after the expiration of
<PAGE> 10
the Due Diligence Period the Title Company revises the Title Commitment, or the
surveyor revises the Survey to add or modify exceptions, or to add or modify
the conditions to obtaining any endorsement requested by Purchaser during the
Due Diligence Period, then Purchaser may terminate this Agreement and receive a
refund of the Earnest Money if provision for their removal or modification
satisfactory to Purchaser is not made. Purchaser shall have been deemed to
have approved any title exception that Seller is not obligated to remove and to
which either Purchaser did not object as provided above, or to which Purchaser
did object, but with respect to which Purchaser did not terminate this
Agreement. If there are exceptions or objections raised by Purchaser, the
Closing Date shall be extended to the extent necessary to permit Seller and
Purchaser to exercise their rights as provided above.
3.3 Delivery of Title Policy at Closing. As a condition to
Purchaser's obligation to close, the Title Company shall deliver to Purchaser
at Closing an ALTA Owner's Policy (Revised 10-17-70 and 10-17-84) (or other
form if required by state law) of title insurance, with extended coverage
(i.e., with ALTA General Exceptions 1 through 5 deleted, or with corresponding
deletions if the Property is located in a non-ALTA state), issued by the Title
Company as of the date and time of the recording of the Deed (as defined
below), in the amount of the Purchase Price, containing the Purchaser's
Endorsements, insuring Purchaser as owner of good, marketable and indefeasible
fee simple title to the Property, and subject only to the Permitted Exceptions
(the "Title Policy"). "Permitted Exceptions" means exceptions approved by
Purchaser pursuant to this Agreement and real estate taxes not yet due and
payable. "Purchaser's Endorsements" shall mean, to the extent such
endorsements are available under the laws of the state in which the Property is
located: (1) owner's comprehensive; (2) access; (3) survey (accuracy of
survey); and (4) location (survey legal matches title legal). Seller shall
execute at Closing an ALTA Statement (Owner's Affidavit) and any other
documents, undertakings or agreements required by the Title Company to issue
the Title Policy at Closing in accordance with the provisions of this
Agreement.
3.4 Title and Survey Costs. Purchaser shall pay for the cost of
the Survey, including any revisions necessary to make the Survey conform to the
requirements of this Agreement, the cost of the premium for the Title Policy,
including the premium for extended coverage and Purchaser's Endorsements and
the cost of the UCC Searches.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this Agreement:
(a) Construction of Improvements. During the pendency of this
Agreement, Seller shall continue, in its capacity as "Owner" under the Project
Agreements, to cause the construction of the Improvements to proceed in
accordance with the requirements of such Project Agreements and in substantial
accordance with the Plans and Specifications and shall enforce the requirements
of the Project Agreements, and shall otherwise continue in conformity with its
past practices and procedures, the administration and management of the
construction of the Improvements. Seller shall keep Purchaser apprised of the
status of construction, shall provide copies to
<PAGE> 11
Purchaser, as and when received by Seller, of: (i) all requests for
information; (ii) prior to making payment in respect thereof, applications for
payment and invoices for payment under the Project Agreements together with
supporting documentation and certificates for payment; (iii) prior to agreeing
thereto, proposed Change Orders, Construction Change Directives, Addenda, and
Modifications; (iv) project meeting minutes; (v) inspection certifications and
correspondence relating thereto; (vi) any claims for additional compensation or
an extension in time for performance under any of the Project Agreements; (vii)
any notices of any violations of any legal or regulatory requirements
applicable to the performance of the work; (viii) any schedule modifications;
(ix) all shop drawings and other submittals; and (x) any other material matters
relating to the completion of the Improvements.
(b) Maintenance of Insurance. Seller shall continue to carry its
existing insurance and require that all parties to the Project Agreements
maintain the insurance therein required through the Closing Date, and shall not
allow any breach, default, termination or cancellation of such insurance
policies or agreements to occur or exist.
(c) Change Orders, Modifications, New Contracts. From and after
the Date of this Agreement through the date which is 10 days prior to the
expiration of the Due Diligence Period, if Seller intends enter into or amend,
terminate, waive any default under, or grant concessions regarding, any Project
Agreements, or any other contract or agreement that will be an obligation
affecting the Property or binding on the Purchaser after the Closing, or if
Seller desires to execute and Change Order or Construction Change Directive or
otherwise agree to or permit any change in the work provided for in the Plans
and Specifications, Seller shall first provide Purchaser with at least 3
business days' prior written notice of such action, and shall with such notice,
deliver to Purchaser a copy of any contract, amendment, Change Order,
Construction Change Directive, modification to the Plans and/or Specifications
and/or any other document or agreement to be executed in connection therewith.
From and after the date which is 10 days prior to the expiration of the Due
Diligence Period, and thereafter until the Closing hereunder has occurred or
this Agreement has otherwise been terminated, Seller will not amend, terminate,
waive any default under, or grant concessions regarding, any Project Agreements
or any contract or agreement that will be an obligation affecting the Property
or binding on the Purchaser after the Closing or agree to any Change Order,
Construction Change Directive or any other modification to the Plans and/or
Specifications, without in each instance the prior written consent of
Purchaser, which consent will not be unreasonably withheld or delayed.
(d) Listings and Other Offers. Seller will not list the Property
with any broker or otherwise solicit or make or accept any offers to sell the
Property, engage in any discussions or negotiations with any third party with
respect to the sale or other disposition of any of the Property, or enter into
any contracts or agreements (whether binding or not) regarding any disposition
of any of the Property.
(e) Leasing Arrangements. From and after the Date of this
Agreement through the date which is 10 days prior to the expiration of the Due
Diligence Period, if Seller intends to amend, terminate, waive any default
under, grant any concession regarding, enter into, or incur any obligation for
leasing
<PAGE> 12
commissions in connection with, any Lease, Seller shall first provide Purchaser
with at least 3 business days' prior written notice of such action, and shall
with such notice, deliver to Purchaser a copy of any Lease, document or
agreement to be executed in connection therewith. From and after the date
which is 10 days prior to the expiration of the Due Diligence Period, and
thereafter until the Closing hereunder has occurred or this Agreement has
otherwise been terminated, Seller will not amend, terminate, waive any default
under, grant concessions regarding, enter into, or incur any obligation for
leasing commissions in connection with, any Lease without Purchaser's prior
written consent in each instance.
(f) Maintenance of Permits. Seller shall maintain in existence
all licenses, permits and approvals necessary or reasonably appropriate to the
ownership or improvement of the Property and the construction of the
Improvements.
4.2 Damage. Seller shall promptly give Purchaser written notice of
any damage to the Property, describing such damage, whether such damage is
covered by insurance and the estimated cost of repairing such damage. If such
damage is not material, then (1) Seller shall, to the extent possible, begin
repairs prior to the Closing out of any insurance proceeds received by Seller
for the damage, (2) at Closing Purchaser shall receive all insurance proceeds
not applied to the repair of any such Property prior to the Closing (including
rent loss insurance applicable to any period from and after the Closing Date)
due to Seller for the damage, (3) any uninsured damage or deductible (including
rent abatement not covered by rent loss insurance), as reasonably estimated by
Purchaser, shall be credited to Purchaser at Closing, and (4) Purchaser shall
assume the responsibility for the repair after the Closing. If such damage is
material, Purchaser may elect by notice to Seller given within 14 days after
Purchaser is notified of such damage (and the Closing shall be extended, if
necessary, to give Purchaser such 14 day period to respond to such notice) to
proceed in the same manner as in the case of damage that is not material or
terminate this Agreement, in which event the Earnest Money shall be immediately
returned to Purchaser. Damage as to any one or multiple occurrences is material
if the cost to repair the damage, as reasonably estimated by Purchaser, plus
the cost of rent abatement after Closing resulting from the damage, exceeds
$500,000 or entitles tenants whose Leases cover, in the aggregate, in excess of
20,000 rentable square feet to terminate their Leases.
4.3 Condemnation. Seller shall promptly give Purchaser written
notice of any eminent domain proceedings that are contemplated, threatened or
instituted with respect to the Property. By notice to Seller given within 14
days after Purchaser receives notice of any such proceedings in eminent domain,
and if necessary the Closing Date shall be extended to give Purchaser the full
14 day period to make such election, Purchaser may terminate this Agreement or
proceed under this Agreement, in which event Seller shall, at the Closing,
assign to Purchaser its entire right, title and interest in and to any
condemnation award, and Purchaser shall have the sole right during the pendency
of this Agreement to negotiate and otherwise deal with the condemning authority
in respect of such matter.
<PAGE> 13
ARTICLE 5: CLOSING
5.1 Closing and Escrow. The consummation of the transaction
contemplated herein ("Closing") shall occur on the Closing Date at the offices
of King and Spalding. Closing shall occur through an escrow with the Escrow
Agent. Funds shall be deposited into and held by Escrow Agent in a closing
escrow account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and deliveries, the
parties shall direct the Escrow Agent to immediately record and deliver the
closing documents to the appropriate parties and make disbursements according
to the closing statements executed by Seller and Purchaser. The Escrow Agent
shall agree in writing with Seller and Purchaser that (1) recordation of the
Deeds constitutes its representation that it is holding the closing documents,
closing funds and closing statement and is prepared and irrevocably committed
to disburse the closing funds in accordance with the closing statements and (2)
release of funds to the Seller shall irrevocably commit it to issue the Title
Policy in accordance with this Agreement. Provided such supplemental escrow
instructions are not in conflict with this Agreement as it may be amended in
writing from time to time, Seller and Purchaser agree to execute such
supplemental escrow instructions as may be appropriate to enable Escrow Agent
to comply with the terms of this Agreement.
5.2 Conditions to the Parties' Obligations to Close. In addition
to all other conditions set forth herein, the obligation of Seller, on the one
hand, and Purchaser, on the other hand, to consummate the transactions
contemplated hereunder shall be contingent upon the following:
(a) The other party's representations and warranties contained
herein shall be true and correct as of the date of this Agreement and the
Closing Date;
(b) As of the Closing Date, the other party shall have performed
its obligations hereunder and all deliveries to be made by the other party at
Closing have been tendered;
(c) As of the Closing Date, no action or proceeding by or before
any governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement, other than an action or proceeding instituted or threatened by
such party;
(d) Any other condition set forth in this Agreement to such
party's obligation to close is not satisfied by the applicable date;
(e) The Related Purchase Agreements and the Asset Purchase
Agreement shall be in full force and effect; and
(f) As a condition to Purchaser's obligation to close, at Closing
Seller shall not be in default under any agreement to be assigned to, or
obligation to be assumed by, Purchaser under this Agreement and no material
default by any other party to any of the Project Agreements shall then be
continuing.
<PAGE> 14
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with the Closing hereunder has not been
satisfied as of the Closing Date or other applicable date, such party may, in
its sole discretion, terminate this Agreement by delivering written notice to
the other party on or before the Closing Date or other applicable date, or
elect to close, notwithstanding the non-satisfaction of such condition, in
which event such party shall be deemed to have waived any such condition except
for breach by a party of a covenant in which case the Closing shall not relieve
such breaching party from any liability it would otherwise have hereunder.
5.3 Seller's Deliveries in Escrow. Seller shall deliver in escrow
to the Escrow Agent the following:
(a) Deed. A limited warranty deed for the Property warranting
title against any party claiming by, through or under Seller (the "Deed");
(b) Bill of Sale and Assignment of Leases and Contracts. A Bill
of Sale and Assignment of Leases and Contracts in the form of Exhibit E
attached hereto (the "Assignment"), executed and acknowledged by Seller,
vesting in Purchaser good title to the property described therein free of any
claims, except for the Permitted Exceptions to the extent applicable, together
with such consents to such assignment as Purchaser may reasonably require from
the contractors, engineers, architects and other consultants who are parties to
the Project Agreements;
(c) Certificate. A certificate from Seller that each of the
representations and warranties contained in Paragraph 7.1 hereof is true and
correct as set forth herein as of the Closing Date modified to correct any
change arising from and after the Date of this Agreement. Such certificate
shall contain an updated certified Rent Roll, list of Plans and Specifications
and Project Agreements (including any modifications agreed to since the Date of
this Agreement) which Seller shall certify to be true and correct as of
Closing;
(d) Insurance. An assignment of Seller's right, title and
interest in and to any builder's risk insurance maintained by Seller and
certificates of insurance from all other parties obligated to maintain
insurance under the Project Agreements evidencing that such insurance is in
full force and effect and naming Purchaser, to the extent appropriate, as an
additional insured under such policies;
(e) Contractor Bonds. An assignment to Purchaser of Seller's
right, title and interest in and under all payment and/or performance bonds
delivered by any contractor or subcontractor in connection with the completion
of the Improvements and the consent of the applicable sureties to such
assignment;
(f) Seller Bonds. An assignment to Purchaser of any bonds or
other security posted with any governmental authority by Seller to secure
Seller's obligation to complete any of the Improvements, together with the
consent to such assignment from the surety or other issuer and the applicable
governmental authority;
<PAGE> 15
(g) Notice to Tenants. A notice to each tenant in the form of
Exhibit F attached hereto;
(h) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
real property;
(i) FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit executed by Seller. If Seller fails to provide the necessary
affidavit and/or documentation of exemption on the Closing Date, Purchaser may
proceed in accordance with the withholding provisions in such Act;
(j) Tenant Estoppels. Estoppel certificates satisfying the
conditions in Paragraph 2.3, dated not earlier than 30 days before the Closing
Date;
(k) Lien Waivers. Lien waivers from all parties having lien
rights under the Project Agreements, as well as their subcontractors and
sub-subcontractors, of any lien rights they may have with respect to services
provided and paid for prior to the Closing Date;
(l) Authority. Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to Purchaser, the Escrow Agent and the
Title Company, including an opinion of counsel satisfactory to Purchaser in its
reasonable judgment;
(m) Other Deliveries. Any other Closing deliveries required to be
made by or on behalf of Seller hereunder.
5.4 Purchaser's Deliveries in Escrow. Purchaser shall deliver in
escrow to the Escrow Agent the following:
(a) Purchase Price. The Purchase Price, less the Earnest Money
that is applied to the Purchase Price, plus or minus applicable prorations,
deposited by Purchaser with the Escrow Agent in immediate, same-day federal
funds wired for credit into the Escrow Agent's escrow account;
(b) Bill of Sale and Assignment of Leases and Contracts. The
Assignment, executed by Purchaser;
(c) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
real property;
(d) Authority. Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to Seller, the Escrow Agent and
the Title Company, including an opinion of counsel satisfactory to Seller in
its reasonable judgment; and
(e) Other Deliveries. Any other Closing deliveries required to be
made by or on behalf of Purchaser hereunder.
5.5 Closing Statements/Escrow Fees. Seller and Purchaser shall
deposit with the Escrow Agent executed closing statements consistent with this
<PAGE> 16
Agreement in the form required by the Escrow Agent. The Escrow Agent's escrow
fee, closing charges, and any cancellation fee shall be divided equally between
and paid by Seller and Purchaser. If Seller and Purchaser cannot agree on the
closing statement to be deposited as aforesaid because of a dispute over the
prorations and adjustments set forth therein, the Closing nevertheless shall
occur, and the amount in dispute shall be withheld from the Purchase Price and
placed in an escrow with the Title Company, to be paid out upon the joint
direction of the parties or pursuant to court order upon resolution or other
final determination of the dispute.
5.6 Sales, Transfer, and Documentary Taxes. Seller shall pay all
sales, gross receipts, compensating, stamp, excise, documentary, transfer, deed
or similar taxes and fees imposed in connection with this transaction under
applicable state or local law.
5.7 Possession. At the time of Closing, Seller shall deliver to
Purchaser possession of the Property subject only to the Permitted Exceptions.
5.8 Delivery of Books and Records. Immediately after the Closing,
Seller shall deliver to the offices of Purchaser's property manager: the
original Leases and Project Agreements; copies or originals of all Project
Documents and any other books and records of account, contracts, copies of
correspondence with tenants and suppliers, receipts for deposits, unpaid bills
and other papers or documents which pertain to the Property; all permits and
warranties; all advertising materials, booklets, keys and other items, if any,
used in the operation of the Property; and, if in Seller's possession or
control, original copies of the Plans and Specifications; all other available
plans and specifications and all operation manuals. Seller shall cooperate
with Purchaser after Closing to transfer to Purchaser any such information
stored electronically.
ARTICLE 6: PRORATIONS AND ADJUSTMENTS
6.1 Prorations. Not less than 3 business days prior to Closing,
Seller shall provide to Purchaser such information and verification reasonably
necessary to support the prorations and adjustments under this Article 6. The
items in subparagraphs (a) through (e) of this Paragraph 6.1 shall be prorated
between Seller and Purchaser as of the close of the day immediately preceding
the Closing Date, the Closing Date being a day of income and expense to
Purchaser:
(a) Taxes and Assessments. Purchaser shall receive a credit for
any accrued but unpaid real estate taxes and assessments (including without
limitation any assessments imposed by private covenant) applicable to any
period before the Closing Date, even if such taxes and assessments are not yet
due and payable. If the amount of any such taxes have not been determined as
of Closing, such credit shall be based on the most recent ascertainable taxes
and shall be reprorated upon issuance of the final tax bill. Purchaser shall
receive a credit for any special assessments which are levied or charged
against the Property, whether or not then due and payable. Any attorneys fees
incurred by either Seller or Purchaser in connection with the reduction of real
estate taxes benefitting each of Seller's and Purchaser's period of ownership,
respectively, also shall be prorated as of the Closing Date.
<PAGE> 17
(b) All amounts paid by Seller from and after the Date of this
Agreement pursuant to, and in accordance with the terms and provisions of, the
Project Agreements shall be reimbursed by Purchaser at Closing, and, subject to
Seller's complying with the limitations on changes and modifications set forth
in Paragraph 4.1(b), Purchaser shall assume responsibility for all amounts due
and owing under the Project Agreements subsequent to the Closing.
(c) Utilities. To the extent utility are not being paid by the
general contractor, Seller shall cause the meters, if any, for utilities to be
read the day on which the Closing Date occurs and to pay the bills rendered on
the basis of such readings. If any such meter reading for any utility is not
available, then adjustment therefor shall be made on the basis of the most
recently issued bills therefor which are based on meter readings no earlier
than 30 days before the Closing Date; and such adjustment shall be reprorated
when the next utility bills are received.
6.2 Post-Closing Adjustments. Either party shall be entitled to a
post-Closing adjustment for any incorrect proration or adjustment. No other
expense related to the ownership or operation of the Property shall be charged
to or paid or assumed by Purchaser, whether allocable to any period before or
after the Closing, other than those obligations expressly assumed by Purchaser.
6.3 Leasing Commissions. Purchaser shall assume, in writing, the
obligation to pay any leasing commissions due after the Closing Date, but only
to the extent such leasing commissions are identified in the Commission
Schedule or approved by Purchaser after the Date of this Agreement.
6.4 Tenant Improvements and Allowances. Purchaser shall assume at
Closing landlord's obligation for tenant improvement expenses (including all
hard and soft construction costs, whether payable to the contractor or the
tenant), tenant allowances, rent abatement, moving expenses and other
out-of-pocket costs which are the obligation of the landlord under Leases in
place as of the Date of this Agreement or Leases or amendments entered into
during the pendency of this Agreement in conformity with the requirements of
Paragraph 4.1(c) or renewals or expansion rights properly exercised after the
Date of this Agreement and any change orders or additions to tenant
improvements or changes in the scope of work or specifications agreed to by
Seller in conformity with the following provisions.
From and after the Date of this Agreement through the date which is
10 days prior to the expiration of the Due Diligence Period, if Seller intends
to agree to any change orders or additions to tenant improvements or changes in
the scope of work or specifications with respect to tenant improvement
obligations, Seller shall first provide Purchaser with at least 3 business
days' prior written notice of such action, and shall with such notice, deliver
to Purchaser a copy of any change order or other document or agreement to be
executed in connection therewith. From and after the date which is 10 days
prior to the expiration of the Due Diligence Period, and thereafter until the
Closing hereunder has occurred or this Agreement has otherwise been terminated,
Seller shall not agree to any change orders or additions to tenant improvements
or changes in the scope of work or specifications with respect to any tenant
improvement obligations without Purchaser's prior written approval.
<PAGE> 18
6.5 Tenant Deposits. All tenant security deposits (and interest
thereon if required by law or contract to be earned thereon) shall be
transferred or credited to Purchaser at Closing. As of the Closing, Purchaser
shall assume Seller's obligations related to tenant security deposits, but only
to the extent they are properly credited and transferred to Purchaser.
6.6 Wages. Purchaser shall not be liable for any wages, fringe
benefits, payroll taxes, unemployment insurance contributions, accrued vacation
pay, accrued pay for unused sick leave, accrued severance pay and other
compensation accruing before Closing for employees at the Property or arising
from the termination of such employees at or prior to Closing. Purchaser shall
not be liable for any obligations accruing before Closing under any union
contract applicable to any such employees or arising from the termination of
any such employees or prior to Closing.
6.7 Utility Deposits. Seller shall receive a credit for the
amount of deposits, if any, with utility companies that are transferable and
that are assigned to Purchaser at the Closing.
6.8 Sales Commissions. Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales
person or finder in connection with this transaction. In the event of any
claim for broker's or finder's fees or commissions in connection with the
negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby, each party shall indemnify and hold harmless the other
party from and against any such claim based upon any statement, representation
or agreement of such party.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material
inducement to Purchaser to execute this Agreement and consummate this
transaction, subject to any conflicting or inconsistent information contained
in the Property Information, Seller represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized, is
validly existing, and is in good standing as a Georgia limited liability
company. Seller is in good standing and is qualified to do business in the
state in which the Real Property is located. Seller has the full right and
authority and has obtained any and all consents required to enter into this
Agreement and to consummate or cause to be consummated the transactions
contemplated hereby. This Agreement has been, and all of the documents to be
delivered by Seller at the Closing will be, authorized and properly executed
and constitute, or will constitute, as appropriate, the valid and binding
obligations of Seller, enforceable in accordance with their terms.
(b) Conflicts and Pending Actions or Proceedings. There is no
agreement to which Seller is a party or, to Seller's knowledge, binding on
Seller which is in conflict with this Agreement, or which challenges or impairs
Seller's ability to execute or perform its obligations under this Agreement.
There is not now pending or, to the best of Seller's knowledge, threatened, any
action, suit or proceeding before any court or governmental
<PAGE> 19
agency or body against the Seller that would prevent Seller from performing its
obligations hereunder or against or with respect to the Property. To Seller's
knowledge, no condemnation, eminent domain or similar proceedings are pending
or threatened with regard to the Property. Seller has not received any notice
and has no knowledge of any pending or threatened liens, special assessments,
impositions or increases in assessed valuations to be made against the
Property.
(c) Leases. The documents constituting the Leases that are
delivered to Purchaser pursuant to Paragraph 2.1 are true, correct and complete
copies of all of the Leases affecting the Property, including any and all
amendments or supplements thereto, and guaranties or other security in
connection therewith. Except as set forth in the Commission Schedule, there
are no leasing or other fees or commissions due, nor will any become due, in
connection with any Lease or any renewal or extension or expansion of any
Lease, and, to the best of Seller's knowledge, no understanding or agreement
with any party exists as to payment of any leasing commissions or fees
regarding future leases or as to the procuring of tenants. To the best of
Seller's knowledge, except as disclosed in the Property Information, no tenants
have asserted nor are there any defenses or offsets to rent accruing after the
Closing Date and no default or breach exists on the part of any tenant. Seller
has not received any notice of any default or breach on the part of the
landlord under any Lease.
(d) Project Agreements. The list of Project Agreements delivered
to Purchaser pursuant to this Agreement is true, correct, and complete as of
the date of its delivery. The documents constituting the Project Agreements
delivered to Purchaser are true, correct and complete copies of all of the
Project Agreements relating to the Property, or any portion thereof. Neither
Seller nor, to Seller's knowledge, any other party is in default under any of
the Project Agreements.
(e) Environmental. Seller has no knowledge of any violation of
Environmental Laws related the Property or the presence or release of Hazardous
Materials on or from the Property except as disclosed in the Property
Information. Neither Seller nor, to Seller's knowledge, any tenant or other
occupant, has manufactured, introduced, released or discharged from or onto any
of the Projects any Hazardous Materials or any toxic wastes, substances or
materials (including, without limitation, asbestos), and neither Seller nor, to
Seller's knowledge, any tenant or other occupant, has used any Project or any
part thereof for the generation, treatment, storage, handling or disposal of
any Hazardous Materials, in violation of any Environmental Laws. The term
"Environmental Laws" includes without limitation the Resource Conservation and
Recovery Act and the Comprehensive Environmental Response Compensation and
Liability Act and other federal laws governing the environment as in effect on
the date of this Agreement, together with their implementing regulations,
guidelines, rules or orders as of the date of this Agreement, and all state,
regional, county, municipal and other local laws, regulations, ordinances,
rules or orders that are equivalent or similar to the federal laws recited
above or that purport to regulate Hazardous Materials. The term "Hazardous
Materials" includes petroleum, including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquified natural gas, or synthetic gas
usable for fuel (or mixtures of natural gas or such synthetic
<PAGE> 20
gas), and any substance, material, waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Law.
(f) Withholding Obligation. Seller's sale of the Property is not
subject to any federal, state or local withholding obligation of Purchaser
under the tax laws applicable to Seller or the Property.
(g) ERISA. Seller is not and is not acting on behalf of an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, a "plan" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended, or an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of any such employee benefit plan or plans.
(h) Plans and Specifications and Project Documents. To the best
of Seller's knowledge, the Plans and Specifications and Project Documents
delivered or made available to Purchaser constitute all of the Plans and
Specifications and Project Documents applicable to the Property and are true,
accurate and complete copies of same.
(i) Compliance of Improvements. To Seller's actual knowledge, the
Improvements have been constructed, to the extent completed, in substantial
compliance with the Plans and Specifications therefor and applicable law.
(j) Sufficiency of Contract Sums. Seller has no reason to believe
that the undisbursed balance of the construct sums under the contracts for
construction for the Improvements will not be sufficient to pay for all costs
and expenses associated with the lien free completion of the Improvements in
accordance with the Plans and Specifications and applicable legal requirements
within the time provided under the current construction schedule delivered to
Purchaser during the Inspection Period.
(k) Approvals. Seller and to Seller's knowledge Seller's general
contractor, has obtained all permits, licenses and approvals required under
applicable laws, codes, rules and regulations and private covenants for the
construction of the Improvements, all such permits, licenses and approvals are
in full force and effect, and Seller has not received any notice of a pending
or threatened revocation of or notice of any violation under any such permits,
licenses or approvals.
(l) Disputes with Contractors There are no material pending
claims or disputes with Seller's general contractor for the Improvements, or,
to Seller's knowledge, with any subcontractor, or any other party under any of
the Project Agreements, for additional compensation and/or an extension of time
for performance.
7.2 Purchaser's Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction,
Purchaser represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized
and is validly existing as a Maryland corporation. in good standing in the
State of Maryland, and will be qualified to do business in the state in which
the Real Property is located on the Closing Date. Subject only to obtaining
<PAGE> 21
certain internal approvals on or before the expiration of the Due Diligence
Period, Purchaser has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser's knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or,
to Purchaser's knowledge, threatened against Purchaser which challenges or
impairs Purchaser's ability to execute or perform its obligations under this
Agreement.
7.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Article 7 are made as of the
Date of this Agreement and are remade as of the Closing Date and shall not be
deemed to be merged into or waived by the instruments of Closing, but shall
survive the Closing for a period of 1 year. Seller and Purchaser shall have
the right to bring an action thereon only if Seller or Purchaser, as the case
may be, has given the other party written notice of the circumstances giving
rise to the alleged breach within such 1-year period, provided Purchaser agrees
that any action brought by it for a breach of any of Seller's representations
and warranties shall only be brought against the manager of Seller, and
Purchaser shall not seek recovery from, and hereby waives any cause of action
it may have against, any of the limited partners of Seller on account of any
breach of Seller's representations and warranties. Any representations and
warranties of Seller pertaining to information contained in estoppel
certificates obtained from tenants shall, as to such tenants, expire as of the
later of receipt of such estoppel certificate or the Closing Date. To the
extent Purchaser obtains actual knowledge of any breach or inaccuracy in any
representation or warranty of Seller prior to Closing and Purchaser
nevertheless proceeds with Closing, Purchaser shall be deemed to have waived
any right, claim or cause of action arising out of the breach or inaccuracy in
any such representation or warranty.
7.4 Seller's Knowledge. For purposes hereof, "to the best of
Seller's knowledge" or words of like effect shall mean the actual knowledge and
belief, without investigation beyond files or materials in the possession of
Peterson Management Company of Robert Peterson and Earl Yancey, and "to
Purchaser's knowledge" or words of like effect means the actual knowledge and
belief, without investigation beyond the matters delivered or made available to
Purchaser as part of the Property Information or disclosed in any Tenant
Estoppels, of Joseph Wallace and Robert Stuckey.
7.5 Except as specifically set forth in this Agreement, Seller
hereby specifically disclaims and Purchaser hereby waives any warranty,
guaranty or representation, oral or written, past, present or future of, as to,
or concerning: (i) the nature and condition of the Property, including but not
by way of limitation, the water, soil and geology, and the suitability thereof
and of the Property for any and all activities and uses which Purchaser may
wish to conduct thereon; (ii) the manner, construction, condition and state of
<PAGE> 22
repair or lack of repair of any improvements located thereon; (iii) the nature
and extent of any right-of-way, lease, possession, lien, encumbrance, license,
reservation, condition or otherwise, except for any warranties contained in
Seller's deed; (iv) compliance of the Property or its operation with any laws,
rules, ordinances or regulations of any government or other body or with any
covenants, conditions or restrictions of record that may affect the Property;
or (v) the presence or absence of any toxic or hazardous materials at the
Property. THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN
"AS-IS, WHERE-IS" BASIS AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT IN
CONSIDERATION OF THE AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED
HEREIN, SELLER MAKES AND HAS MADE NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING BUT IN NO WAY LIMITED TO ANY
WARRANTY OF OWNERSHIP, EXISTENCE, QUALITY, QUANTITY, VALUE, CONDITION,
HABITABILITY, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE
PROPERTY, INCLUDING WITHOUT LIMITATION THE PERSONALTY. THIS DISCLAIMER DOES
NOT EFFECT AN ASSUMPTION OF ANY LIABILITY BY PURCHASER AND IT SHALL NOT BE
CONSTRUED TO WAIVE ANY RIGHTS OF CONTRIBUTION OR INDEMNITY OR OTHERWISE AFFECT
THE LIABILITIES OF THE PARTIES TO EACH OTHER OR TO THIRD PARTIES UNDER
ENVIRONMENTAL LAWS.
ARTICLE 8: MISCELLANEOUS
8.1 Parties Bound. Neither party may assign this Agreement without
the prior written consent of the other, and any such prohibited assignment
shall be void; provided, however, that Purchaser may assign this Agreement
without Seller's consent to an Affiliate. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the respective
legal representatives, successors, assigns, heirs, and devisees of the parties.
For the purposes of this paragraph, the term "Affiliate" means (a) an entity
that directly or indirectly controls, is controlled by or is under common
control with the Purchaser or (b) an entity at least a majority of whose
economic interest is owned by Purchaser; and the term "control" means the power
to direct the management of such entity through voting rights, ownership or
contractual obligations.
8.2 Headings. The article and paragraph headings of this Agreement
are for convenience only and in no way limit or enlarge the scope or meaning of
the language hereof.
8.3 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereunder, including all legal and accounting fees
and disbursements.
8.4 Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the
remainder of this Agreement shall be deemed valid and operative, and, to the
greatest extent legally possible, effect shall be given to the intent
manifested by the portion held invalid or inoperative. The failure by either
party to enforce against the other any term or provision of this Agreement
shall not be deemed to be a waiver of such party's right to enforce against the
other party the same or any other such term or provision in the future.
<PAGE> 23
8.5 Governing Law. This Agreement shall, in all respects, be
governed, construed, applied, and enforced in accordance with the law of the
state in which the Real Property is located.
8.6 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing shall survive the Closing and shall not be deemed to
be merged into or waived by the instruments of Closing.
8.7 No Third Party Beneficiary. This Agreement is not intended to
give or confer any benefits, rights, privileges, claims, actions, or remedies
to any person or entity as a third party beneficiary, decree, or otherwise.
8.8 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all before agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against
whom enforcement is sought.
8.9 Time of the Essence. Time is of the essence in the performance
of this Agreement.
8.10 Confidentiality. Seller shall make no public announcement or
disclosure of any information related to this Agreement to outside brokers or
third parties, before or after the Closing, without the specific prior written
consent of Purchaser, except for such disclosures to Seller's lenders,
creditors, officers, employees and agents as may be necessary to permit Seller
to perform its obligations hereunder.
8.11 Attorneys' Fees. Should either party employ attorneys to
enforce any of the provisions hereof, the party against whom any final judgment
is entered agrees to pay the prevailing party all reasonable costs, charges,
and expenses, including reasonable attorneys' fees, expended or incurred by the
prevailing party in connection therewith.
8.12 Notices. All notices required or permitted hereunder shall be
in writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either (1) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier, (2) sent by
telefax, in which case notice shall be deemed delivered upon transmission of
such notice, or (3) sent by personal delivery, in which case notice shall be
deemed delivered upon receipt or refusal of delivery. A party's address may be
changed by written notice to the other party; provided, however, that no notice
of a change of address shall be effective until actual receipt of such notice.
Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice.
8.13 Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
<PAGE> 24
8.14 Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and, except as otherwise expressly provided shall not
preclude the assertion or exercise of any other rights or remedies available by
law, in equity or otherwise.
8.15 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event
after which the designated period of time begins to run is not to be included
and the last day of the period so computed is to be included at, unless such
last day is a Saturday, Sunday or legal holiday for national banks in the
location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday. The last day of any period of time described herein shall be deemed
to end at 6 p.m. Atlanta, Georgia time.
8.16 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
and all of such counterparts shall constitute one Agreement. To facilitate
execution of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages.
8.17 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, on or
after the Closing any further actions, documents, and will obtain such
consents, as may be reasonably necessary or as may be reasonably requested to
fully effectuate the purposes, terms and conditions of this Agreement or to
further perfect the conveyance, transfer and assignment of the Property to
Purchaser.
8.18 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE> 25
[SIGNATURE PAGE FOLLOWS]
<PAGE> 26
SIGNATURE PAGE TO
AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
SPALDING RIDGE, L.L.C.
AND
CARRAMERICA REALTY CORPORATION
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SPALDING RIDGE, L.L.C.
By: AOP, L.P., its manager
By: Peterson Management Company,
Inc., its sole general partner
By: : /s/ Robert E. Peterson
--------------------------------
Robert E. Peterson,
President
Dated:
--------------------
"Seller"
CARRAMERICA REALTY CORPORATION
By: : /s/ Robert E. Stuckey
-----------------------------------
Name: Robert E. Stuckey
-----------------------------------
Title:
----------------------------------
Dated:
--------------------
"Purchaser"
<PAGE> 27
EXHIBITS INTENTIONALLY OMITTED
<PAGE> 28
AGREEMENT OF PURCHASE AND SALE
[DEKALB CHASE, L.P. PORTFOLIO]
THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and
entered into by DEKALB CHASE, L.P., a Georgia limited partnership ("Seller"),
and CARRAMERICA REALTY CORPORATION, a Maryland corporation ("Purchaser"), under
the following circumstances:
A. Contemporaneously herewith, Purchaser is entering into four
other Agreements of Purchase and Sale, one with AOP, L.P., a Georgia limited
partnership (the "AOP Agreement"), one with Holcomb Place, L.P., a Georgia
limited partnership (the "Holcomb Place Agreement"), and two with Boca Corners,
L.P., a Georgia limited partnership (the "Boca Corners Agreements") (the
foregoing agreements are sometimes hereinafter collectively called the "Related
Purchase Agreements" and the partnerships entering into such agreements are
referred to herein as the "Related Sellers").
B. Pursuant to this Agreement and the Related Purchase
Agreements other than the AOP Agreement, for an aggregate purchase price of
$71,300,000 and upon and subject to the terms and conditions therein set forth,
Purchaser has agreed to purchase, and the above referenced partnerships
entering into such agreements have agreed to sell to Purchaser, the six office
and office/service properties located in Atlanta, Georgia and the one
office/service property located in Boca Raton, Florida described in such
agreements.
C. Pursuant an Agreement of Purchase and Sale with Spalding
Ridge, L.L.C., a Georgia limited liability company (the "Spalding Ridge
Agreement"), for a purchase price of $5,236,040 and upon and subject to the
terms and conditions therein set forth, Purchaser has agreed to purchase from
the above referenced limited liability company entering into such agreement
(the "Spalding Seller") the office building currently under construction by the
Spalding Seller, located in Atlanta, Georgia and described in such agreement
(the "Spalding Ridge Property").
D. Contemporaneously herewith, Purchaser is also entering into
that certain Asset Purchase Agreement (the "Asset Purchase Agreement") with
Peterson Management Company, a Georgia corporation ("Peterson Management")
pursuant to which, for a purchase price of $10,500,000 and upon and subject to
the terms and conditions therein set forth, Purchaser has agreed (i) to acquire
and Peterson Management has agreed to sell to Purchaser, substantially all of
the assets of Peterson Management, including the accounts receivable,
personalty, management and leasing agreements, and other contract rights more
particularly described therein (the "Management Assets"), and (ii) that it will
enter into an employment agreement (the "Employment Agreement") and a
non-complete agreement (the "Non-Compete Agreement") with Robert Peterson, all
as therein provided for, upon the consummation of the transactions contemplated
under such agreement, as well as those contemplated under this Agreement and
the other agreements hereinbefore described (other than the Spalding Ridge
Agreement).
<PAGE> 29
E. It is the intention of the parties to this Agreement and the
above agreements that the transactions provided for under such agreements
(other than the Spalding Ridge Agreement) be interdependent, and that none of
the transactions under the balance of such agreements shall proceed unless all
of such transactions proceed.
NOW THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, Purchaser and Seller hereby agree as follows:
ARTICLE 1: PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
(a) Seller Notice Address:
c/o Peterson Properties
Attn: Robert E. Peterson
Suite 700
2849 Paces Ferry Road
Atlanta, Georgia 30339
Telephone: 770-432-3200
Facsimile: 770-431-0782
With a copy to: King & Spalding
191 Peachtree Street
Suite 4800
Atlanta, Georgia 30303
Attn: Scott J. Arnold
Telephone: 404/572-4600
Facsimile: 404/572-5148
(b) Purchaser Notice Address:
CARRAMERICA REALTY CORPORATION
Attention: Robert G. Stuckey and
Joseph D. Wallace
1700 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Telephone: 202/624-7500
Facsimile: 202/638-0102
With a copy to: Mayer, Brown & Platt
Attn: Caroline Brower
141 East Palace Avenue
Santa Fe, New Mexico 87501
Telephone: 505/820-8186
Facsimile: 505/820-7334
(c) Date of this Agreement: The later date of execution by the
Seller and the Purchaser, as
indicated on the signature page.
<PAGE> 30
(d) Purchase Price: $8,058,000.00.
(e) Earnest Money: $57,000.
(f) Due Diligence Period: The period ending 60 days after the
Date of this Agreement.
(g) Closing Date: As designated by the Purchaser upon not less
than 5 days' prior notice to Seller, but no
later than 10 days after the expiration of
the Due Diligence Period, as such date may be
extended pursuant to any express provision of
this Agreement.
(h) Title Company: Chicago Title Insurance Company
Attn: Frank Jansen
700 South Flower Street, Suite 920
Los Angeles, California 90017
Telephone: 213/488-4346
Facsimile: 213/891-0834
(i) Escrow Agent: Chicago Title Insurance Company
Attn: Erica Meinhardt
5775-C Peachtree Dunwoody Road
Suite 200
Atlanta, Georgia 30342
Telephone: 404/303-6300
Facsimile: 404/303-6302
1.2 Property. Subject to the terms and conditions of this
Agreement of Purchase and Sale (the "Agreement"), Seller agrees to sell to
Purchaser, and Purchaser agrees to purchase from Seller, the following property
(collectively, the "Property"):
(a) The "Real Property," being the land described in Exhibit A
attached hereto; all improvements and fixtures (other than fixtures owned by
tenants pursuant to the Leases) located thereon, including but not limited to
the office building located on such land (collectively, the "Improvements");
all and singular the rights, benefits, privileges, easements, tenements,
hereditaments, and appurtenances thereon or in anywise appertaining to such
real property; and all right, title, and interest of Seller in and to all
strips and gores and any land lying in the bed of any street, road or alley,
open or proposed, adjoining such real property.
(b) The landlord's interest in the "Leases," being all leases of
space or other occupancy agreements affecting the Improvements, including
leases or occupancy agreements which may be made by Seller after the date
hereof and before Closing as permitted by this Agreement, and all amendments
and supplements thereto, together with any and all guaranties and security
received by the landlord in connection therewith.
<PAGE> 31
(c) The "Personal Property," being all right, title and interest
of Seller in and to all tangible personal property now or hereafter used in
connection with the operation, ownership, maintenance, management, or occupancy
or improvement of the Real Property, including without limitation: equipment;
machinery; furniture; art work; furnishings; office equipment and supplies;
and, whether stored on or offsite, all tools, supplies, and construction and
finish materials not incorporated in the Improvements and held for repairs and
replacements. The term "Personal Property" also shall include any and all
deposits, bonds or other security deposited or delivered by Seller with or to
any and all governmental bodies, utility companies or other third parties in
connection with the operation, ownership, maintenance, management, occupancy or
improvement of the Real Property.
(d) The "Intangible Property," being all, right, title and
interest of Seller in and to all intangible personal property now or hereafter
used in connection with the operation, ownership, maintenance, management, or
occupancy of the Real Property, including without limitation: all trade names
and trade marks associated with the Real Property, including without limitation
the name of the building comprising a part of the Improvements; the plans and
specifications for the Improvements; warranties; indemnities; claims against
third parties; all contract rights related to the construction, operation,
ownership or management of the Real Property that are expressly assumed by
Purchaser pursuant to this Agreement; applications, permits, approvals and
licenses (to the extent assignable); insurance proceeds and condemnation awards
or claims thereto to be assigned to Purchaser hereunder; and all books and
records relating to the Property.
1.3 Earnest Money. Within 5 business days after the execution of
this Agreement, Purchaser shall deposit the Earnest Money with the Escrow
Agent. The Escrow Agent shall pay the Earnest Money to Seller at and upon the
Closing, or otherwise, to the party entitled to receive the Earnest Money in
accordance with this Agreement and that certain Earnest Money Escrow Agreement
entered into contemporaneously herewith by the parties and the Escrow Agent
(the "Earnest Money Escrow Agreement"). The Earnest Money shall be held and
disbursed by the Escrow Agent pursuant the Earnest Money Escrow Agreement. In
addition to any other right or remedy of Purchaser under this Agreement, the
Earnest Money shall promptly be returned to Purchaser pursuant to the Earnest
Money Escrow Agreement if Seller is in default under this Agreement, or
Peterson Management or any of the Related Sellers are in default under the
Asset Purchase Agreement or any of the Related Purchase Agreements, as
applicable, and Purchaser elects to terminate this Agreement pursuant to
Paragraph 1.5, or if this Agreement is terminated for any reason other than
Purchaser's default hereunder.
1.4 Remedies. Seller's sole remedy in the event of Purchaser's
default in its obligation to close this transaction shall be to terminate this
Agreement and to retain as liquidated damages the Earnest Money, Seller waiving
all other rights or remedies in the event of such default by Purchaser. The
parties acknowledge that Seller's actual damages in the event of a default by
Purchaser under this Agreement will be difficult to ascertain, and that such
liquidated damages represent the parties' best estimate of such damages. In the
event of a Seller default hereunder, if such default is willful or
intentional, Purchaser may elect to terminate this Agreement and receive a
refund of the Earnest Money, or to pursue such other remedies as may
<PAGE> 32
be available to Purchaser at law or in equity, including specific performance.
If, however, Seller's default is not willful or intentional, and if the remedy
of specific performance is available to Purchaser, the remedy of specific
performance shall be Purchaser's sole and exclusive remedy hereunder, Purchaser
hereby waiving the right to sue Seller for monetary damages, or for any
remedies available at law or in equity other than the right of specific
performance. If, however, Seller shall default hereunder and the equitable
remedy of specific performance is not available, then Purchaser shall have the
right to seek recovery from Seller of Purchaser's direct damages, but hereby
waives any right to recover any consequential, speculative or other special
damages in such event. For purposes of this provision, specific performance
shall be considered not available to Purchaser if the court declines to grant
the remedy of specific performance or if the nature of Seller's default or
other conditions then existing are such that upon obtaining specific
performance Purchaser would receive materially less than Purchaser bargained
for in this Agreement.
1.5 Interdependent Transactions. Seller and Purchaser agree
that:
(i) Purchaser's obligations under this Agreement are
expressly contingent upon Seller and the Related Sellers performing their
obligations under the Related Purchase Agreements and Peterson Management
performing its obligations under the Asset Purchase Agreement;
(ii) Seller's obligations under this Agreement are expressly
contingent upon Purchaser performing its obligations under the Related Purchase
Agreements and the Asset Purchase Agreement;
(iii) The Closing under this Agreement and the closings under
the Related Purchase Agreements, and the Asset Purchase Agreement shall occur
simultaneously and Seller and Purchaser shall cooperate with one another in so
scheduling the Closing. Any extension of the closing date under any of the
Related Purchase Agreements or the Asset Purchase Agreement pursuant to any
express provision therein set forth (but not if by subsequent mutual agreement)
shall automatically result in an extension of the Closing Date under this
Agreement;
(iv) In the event any of the Related Sellers or Peterson
Management default in their obligations under the Related Purchase Agreements
or the Asset Purchase Agreement and Purchaser elects to endeavor to obtain
specific performance of the subject agreement(s), Purchaser may proceed with
the Closing hereunder, on the date scheduled as the Closing Date or, so long as
Purchaser is not in default hereunder, adjourn the Closing hereunder for such
period of time as may be necessary for Purchaser (not to exceed 120 days),
proceeding with reasonable diligence and in good faith, to obtain such remedy.
If Purchaser has elected to adjourn the Closing hereunder, and if the remedy of
specific performance is not available to Purchaser or the aforesaid 120 day
period expires prior to Purchaser obtaining relief satisfactory to Purchaser,
then Purchaser may, by delivering written notice to Seller, proceed with the
Closing hereunder or terminate this Agreement, in which event the Earnest Money
shall be returned to Purchaser and neither party shall have any further rights
or obligations hereunder, except pursuant to any provisions which by their
terms survive any termination of this Agreement. For purposes of this
provision, specific performance shall be considered not available to
<PAGE> 33
Purchaser if the court declines to grant the remedy of specific performance or
if the nature of the applicable party's default is such that upon obtaining
specific performance Purchaser would receive materially less than Purchaser
bargained for in the subject agreement;
(v) In the event Purchaser terminates any of the Related
Purchase Agreements or the Asset Purchase Agreement pursuant to any express
right therein granted, for reasons other than a default of the applicable
Related Sellers or Peterson Management thereunder, this Agreement shall
automatically terminate concurrently therewith and Purchaser shall receive a
refund of all Earnest Money deposited hereunder and thereunder; and
(vi) Any default by Purchaser under any of the Related
Purchase Agreements and/or the Asset Purchase Agreement shall constitute a
default by Purchaser under this Agreement.
ARTICLE 2: INSPECTION
2.1 Seller's Delivery of Specified Documents. To the extent such
items are in Seller's possession or control and have not heretofore been
provided to Purchaser, Seller shall provide to Purchaser or give Purchaser, and
its representatives full access to, at all reasonable times, within 5 business
days after the Date of this Agreement, the following with respect to the
Property, as well as such other information as Purchaser may reasonably request
(the "Property Information"):
(a) Rent Roll. A current rent roll and delinquency report,
including outstanding tenant concessions, tenant improvement reimbursements,
leasing commissions or fees, and outstanding landlord obligations for tenant
improvements (the "Rent Roll") certified by a representative of Seller
satisfactory to Purchaser;
(b) Operating Statements. Operating statements for the Property
for the 36 months preceding this Agreement (the "Operating Statements");
(c) Tax Statements. Copies or a summary of ad valorem tax
statements for the current year or other current tax period (if available) and
for the 24 months preceding the Date of this Agreement;
(d) Leases. Copies of all Leases (and any and all guaranties or
other security in connection therewith);
(e) Commission Schedule and Agreements. A schedule (the
"Commission Schedule") and copies of all commission agreements related to the
Leases or the Property;
(f) Tenant Information. Copies of financial statements of all
tenants under Leases covering the two years prior to this Agreement, and any
information relative to tenant payment history;
(g) Service Contracts. A list together with copies of all
management, service, supply, equipment rental, construction and other contracts
related to
<PAGE> 34
the operation, improvement or taxation of the Property (the "Service
Contracts");
(h) Maintenance Records. All available maintenance work orders
for the Property for the 12 months preceding this Agreement;
(i) List of Capital Improvements. A list of all capital
improvements known to the Seller and performed on the Property within the 24
months preceding this Agreement;
(j) Reports. Any environmental, soil, structural engineering,
drainage and other physical inspection reports, assessments, audits and surveys
related to the Property;
(k) Plans and Specifications. All construction plans and
specifications relating to the original development of the Property and any
major capital repairs or tenant improvements;
(l) Insurance. Copies of Seller's certificates of insurance for
the Property and any notices received from insurance carriers;
(m) Proceedings. Copies of any documents or materials relating to
any litigation, investigation, condemnation, or proceeding of any kind pending
or threatened affecting the Property or the ability of Seller to consummate the
transaction contemplated by this Agreement; and
(n) Existing Title and Survey Documents. Copy of Seller's
existing title insurance policy and any existing surveys of the Property.
At such time as the last item of Property Information shall have been
delivered or made available to Purchaser, Seller shall deliver to Purchaser a
written notice (the "Property Information Notice") certifying that all such
deliveries have been completed together with an itemization of the matters
delivered or made available to Purchaser. Seller shall have the continuing
obligation during the pendency of this Agreement to provide Purchaser with any
document described above and coming into Seller's possession or produced by
Seller after the initial delivery of the Property Information.
2.2 Due Diligence. Purchaser shall have through the last day of
the Due Diligence Period in which to examine, inspect, and investigate the
Property and, in Purchaser's sole and absolute judgment and discretion, to
determine whether the Property is satisfactory to Purchaser and to obtain
appropriate internal approval to proceed with this transaction. Purchaser may
terminate this Agreement pursuant to this Paragraph 2.2 by giving notice of
termination to Seller on or before the last day of the Due Diligence Period.
This Agreement shall continue in full force and effect if Purchaser does not
give the notice of termination. Upon such termination, the Earnest Money shall
be refunded to Purchaser immediately upon request, and all further rights and
obligations of the parties under this Agreement shall terminate, except
pursuant to any provisions which by their terms survive a termination of this
Agreement.
Purchaser shall have reasonable access to the Property and all books
and records relating to the Property that are in Seller's or its property
<PAGE> 35
manager's possession or control for the purpose of conducting surveys,
architectural, engineering, geotechnical and environmental inspections and
tests (including intrusive inspection and sampling with Seller's prior written
consent not to be unreasonably withheld or delayed), and any other inspections,
studies, or tests reasonably required by Purchaser. During the pendency of
this Agreement, Purchaser and its agents, employees, and representatives shall
have a continuing right of reasonable access to the Property and any offices
where the records of the Property are kept for the purpose of examining and
making copies of all books and records and other materials relating to the
Property in Seller's or its property manager's possession or control. In the
course of its investigations, Purchaser may make inquiries to third parties,
including, without limitation, tenants, the Lender, contractors, property
managers, parties to Service Contracts and municipal, local and other
government officials and representatives, and Seller consents to such
inquiries. Purchaser shall keep the Property free and clear of any liens and
will indemnify, defend, and hold Seller harmless from all claims asserted by
third parties against Seller to recover for personal injury or property damage
as a result of Purchaser's entry onto the Property. If any inspection or test
disturbs the Property, Purchaser will restore the Property to its condition
before any such inspection or test. The obligations of Purchaser under the
preceding two sentences shall survive the Closing or termination of this
Agreement.
2.3 Tenant Estoppels. Seller shall endeavor to secure and deliver
to Purchaser, no later than 2 business days before the Closing Date, estoppel
certificates from tenants under all Leases in the form of Exhibit C attached
hereto (the "Tenant Estoppels"). The Tenant Estoppels shall be delivered to
Purchaser no later than 10 days prior to expiration of the Due Diligence
Period. Seller shall provide Purchaser with copies of the Tenant Estoppels for
Purchaser's review and comment before delivering the Tenant Estoppels to
tenants. Purchaser's obligation to close this transaction is subject to the
condition that as of Closing (1) estoppel certificates for all Leases with any
tenant who occupies 10% or more of the rentable area of the Property ("Material
Leases") and for Leases with tenants occupying 85% of the balance of the
rentable area within the Property, in the form of Exhibit C and consistent with
the Rent Roll and the representations of Seller in Paragraph 7.1 shall have
been delivered to Purchaser; (2) the Material Leases shall be in full force and
effect and no material default or claim by landlord or tenant shall exist or
have arisen under any Material Leases that was not specifically disclosed in
the Rent Rolls included in the initial delivery of the Property Information;
and (3) no tenant under any Material Leases shall have initiated or had
initiated against it any insolvency, bankruptcy, receivership or other similar
proceeding.
If Seller is unable to obtain all the Tenant Estoppels in the
required form above, Purchaser shall have the option, as its sole and exclusive
remedy, of either terminating this Agreement and receiving a refund of the
Earnest Money, or proceeding with the Closing.
2.4 Service Contracts. During the Due Diligence Period, Purchaser
shall notify Seller as to which Service Contracts Purchaser will assume and
which Service Contracts must be terminated by Seller at Closing. Purchaser
will assume the obligations arising from and after the Closing Date under those
Service Contracts that are not in default as of the Closing Date and
<PAGE> 36
which cannot be cancelled without penalty on 30 days notice. Seller shall
terminate at Closing all Service Contracts that are not so assumed. In the
event Peterson Management defaults in its obligations under the Asset Purchase
Agreement, Seller and Purchaser acknowledge and agree that Purchaser shall have
no obligation to accept an assignment of, and Seller shall terminate at
closing, any leasing and/or management agreement presently in effect between
Seller and Peterson Management.
ARTICLE 3: TITLE AND SURVEY REVIEW
3.1 Delivery of Title Commitment and Survey. Purchaser shall cause
to be prepared (and shall deliver copies to Seller and its counsel) (i) a
current, effective commitment for title insurance (the "Title Commitment")
issued by the Title Company, in the amount of the Purchase Price with Purchaser
as the proposed insured, and accompanied by true, complete, and legible copies
of all documents referred to in the Title Commitments, (ii) a current ALTA-ACSM
Urban survey of the Property (the "Survey"), including a certification
addressed to Purchaser, in the form attached hereto as Exhibit D; and (iii)
copies of Uniform Commercial Code searches in the name of Seller, any general
partner or manager of Seller, and the Property issued by the Title Company or a
search company acceptable to Purchaser ("UCC Searches").
3.2 Title Review and Cure. During the Due Diligence Period,
Purchaser shall review title to the Property as disclosed by the Title
Commitment, the Survey and UCC Searches. Purchaser shall be entitled to object
to any title matters shown on the Title Commitment, Survey or UCC Searches, in
its sole discretion, by a written notice of objections delivered to Seller on
or before the expiration of the Due Diligence Period. Seller will cooperate
with Purchaser, at no expense to Seller, in curing any objections Purchaser may
have to title to the Property. Seller shall have no obligation to cure title
objections except liens and security interests created by, under or through
Seller, all of which liens and security interests Seller shall cause to be
released at the Closing. Seller agrees to remove such exceptions or
encumbrances to title which arise after the Date of this Agreement to the
extent created by, through or under Seller. As to any other exceptions or
objections raised by Purchaser, Seller shall have, without any obligations to
do so, 14 days from the receipt of Purchaser's notice of objections either to
have such exceptions or objections removed or, if acceptable to Purchaser, to
provide affirmative title insurance protection for such exceptions satisfactory
to Purchaser in Purchaser's sole discretion. If Seller fails either to provide
for the removal of such exceptions or objections or to obtain affirmative title
insurance protection for such exceptions or objections satisfactory to
Purchaser in Purchaser's sole discretion within such 14 day period, then
Purchaser may elect to terminate this Agreement by delivering written notice to
Seller within 14 days following such period. Upon delivery of such termination
notice by Purchaser, this Agreement shall automatically terminate, the parties
shall be released from all further obligations under this Agreement except
pursuant to any provisions which by their terms survive a termination of this
Agreement, and the Earnest Money shall be immediately returned to the
Purchaser. If after the expiration of the Due Diligence Period the Title
Company revises any of the Title Commitment, or the surveyor revises the Survey
to add or modify exceptions, or to add or modify the conditions to obtaining
any endorsement requested by
<PAGE> 37
Purchaser during the Due Diligence Period, then Purchaser may terminate this
Agreement and receive a refund of the Earnest Money if provision for their
removal or modification satisfactory to Purchaser is not made. Purchaser shall
have been deemed to have approved any title exception that Seller is not
obligated to remove and to which either Purchaser did not object as provided
above, or to which Purchaser did object, but with respect to which Purchaser
did not terminate this Agreement. If there are exceptions or objections raised
by Purchaser, the Closing Date shall be extended to the extent necessary to
permit Seller and Purchaser to exercise their rights as provided above.
3.3 Delivery of Title Policy at Closing. As a condition to
Purchaser's obligation to close, the Title Company shall deliver to Purchaser
at Closing an ALTA Owner's Policy (Revised 10-17-70 and 10-17-84) (or other
form if required by state law) of title insurance, with extended coverage
(i.e., with ALTA General Exceptions 1 through 5 deleted, or with corresponding
deletions if the Property is located in a non-ALTA state), issued by the Title
Company as of the date and time of the recording of the Deed (as defined
below), in the amount of the Purchase Price, containing the Purchaser's
Endorsements, insuring Purchaser as owner of good, marketable and indefeasible
fee simple title to the Property, and subject only to the Permitted Exceptions
(the "Title Policy"). "Permitted Exceptions" means exceptions approved by
Purchaser pursuant to this Agreement; real estate taxes not yet due and
payable; and tenants in possession as tenants only under the Leases without any
option to purchase or acquire an interest in the Property. "Purchaser's
Endorsements" shall mean, to the extent such endorsements are available under
the laws of the state in which the Property is located: (1) owner's
comprehensive; (2) access; (3) survey (accuracy of survey); and (4) location
(survey legal matches title legal). Seller shall execute at Closing an ALTA
Statement (Owner's Affidavit) and any other documents, undertakings or
agreements required by the Title Company to issue the Title Policy at Closing
in accordance with the provisions of this Agreement.
3.4 Title and Survey Costs. Purchaser shall pay for the cost of
the Surveys, including any revisions necessary to make the Surveys conform to
the requirements of this Agreement, the cost of the premium for the Title
Policy, including the premium for extended coverage and Purchaser's
Endorsements and the cost of the UCC Searches.
ARTICLE 4: OPERATIONS AND RISK OF LOSS
4.1 Ongoing Operations. During the pendency of this Agreement:
(a) Preservation of Business. Seller shall cause the Property to
be operated only in the ordinary and usual course of business and consistent
with past practice, shall preserve intact the Property, preserve the good will
and advantageous relationships of Seller with customers, suppliers, independent
contractors, employees and other persons or entities material to the operation
of its business, shall perform its obligations under Leases and other
agreements affecting the Property and shall not deliberately take any action or
omission which would cause any of the representations or warranties of Seller
contained herein to become inaccurate or any of the covenants of Seller to be
breached.
<PAGE> 38
(b) Maintenance of Insurance. Seller shall continue to carry its
existing insurance through the Closing Date, and shall not allow any breach,
default, termination or cancellation of such insurance policies or agreements
to occur or exist.
(c) New Contracts. From and after the Date of this Agreement
through the date which is 10 days prior to the expiration of the Due Diligence
Period, if Seller intends enter into or amend, terminate, waive any default
under, or grant concessions regarding, any contract or agreement that will be
an obligation affecting the Property or binding on the Purchaser after the
Closing, Seller shall first provide Purchaser with at least 3 business days'
prior written notice of such action, and shall with such notice, deliver to
Purchaser a copy of any contract or other document or agreement to be executed
in connection therewith. From and after the date which is 10 days prior to the
expiration of the Due Diligence Period, and thereafter until the Closing
hereunder has occurred or this Agreement has otherwise been terminated, Seller
will not amend, terminate, waive any default under, or grant concessions
regarding, any contract or agreement that will be an obligation affecting the
Property or binding on the Purchaser after the Closing, without in each
instance the prior written consent of Purchaser, which consent will not be
unreasonably withheld or delayed.
(d) Listings and Other Offers. Seller will not list the Property,
or any portion thereof, with any broker or otherwise solicit or make or accept
any offers to sell the Property, engage in any discussions or negotiations with
any third party with respect to the sale or other disposition of any of the
Property, or enter into any contracts or agreements (whether binding or not)
regarding any disposition of any of the Property.
(e) Leasing Arrangements. From and after the Date of this
Agreement through the date which is 10 days prior to the expiration of the Due
Diligence Period, if Seller intends to amend, terminate, waive any default
under, grant any concession regarding, enter into, or incur any obligation for
leasing commissions in connection with, any Lease, Seller shall first provide
Purchaser with at least 3 business days' prior written notice of such action,
and shall with such notice, deliver to Purchaser a copy of any Lease, document
or agreement to be executed in connection therewith. From and after the date
which is 10 days prior to the expiration of the Due Diligence Period, and
thereafter until the Closing hereunder has occurred or this Agreement has
otherwise been terminated, Seller will not amend, terminate, waive any default
under, grant concessions regarding, enter into, or incur any obligation for
leasing commissions in connection with, any Lease without Purchaser's prior
written consent in each instance.
(f) Removal and Replacement of Tangible Personal Property. Seller
will not remove any Tangible Personal Property unless it is replaced with a
comparable item of equal quality and quantity as existed as of the time of such
removal.
(g) Maintenance of Permits. Seller shall maintain in existence all
licenses, permits and approvals necessary or reasonably appropriate to the
ownership, operation or improvement of the Property.
<PAGE> 39
4.2 Damage. Seller shall promptly give Purchaser written notice of
any damage to the Property, describing such damage, whether such damage is
covered by insurance and the estimated cost of repairing such damage. If such
damage is not material, then (1) Seller shall, to the extent possible, begin
repairs prior to the Closing using any insurance proceeds received by Seller
for the damage, (2) at Closing Purchaser shall receive all insurance proceeds
not applied to the repair of any such Property prior to the Closing (including
rent loss insurance applicable to any period from and after the Closing Date)
due to Seller for the damage, (3) any uninsured damage or deductible (including
rent abatement not covered by rent loss insurance), as reasonably estimated by
Purchaser, shall be credited to Purchaser at Closing, and (4) Purchaser shall
assume the responsibility for the repair after the Closing. If such damage is
material, Purchaser may elect by notice to Seller given within 14 days after
Purchaser is notified of such damage (and the Closing shall be extended, if
necessary, to give Purchaser such 14 day period to respond to such notice) to
proceed in the same manner as in the case of damage that is not material or
terminate this Agreement, in which event the Earnest Money shall be immediately
returned to Purchaser. Damage as to any one or multiple occurrences is material
if the cost to repair the damage, as reasonably estimated by Purchaser, plus
the cost of rent abatement after Closing resulting from the damage, exceeds
$50,000 or entitles tenants whose Leases cover, in the aggregate, in excess of
15% of the rentable square feet of the Property to terminate their Leases.
4.3 Condemnation. Seller shall promptly give Purchaser written
notice of any eminent domain proceedings that are contemplated, threatened or
instituted with respect to the Property. By notice to Seller given within 14
days after Purchaser receives notice of any such proceedings in eminent domain,
and if necessary the Closing Date shall be extended to give Purchaser the full
14 day period to make such election, Purchaser may terminate this Agreement or
proceed under this Agreement, in which event Seller shall, at the Closing,
assign to Purchaser its entire right, title and interest in and to any
condemnation award, and Purchaser shall have the sole right during the pendency
of this Agreement to negotiate and otherwise deal with the condemning authority
in respect of such matter.
ARTICLE 5: CLOSING
5.1 Closing and Escrow. The consummation of the transaction
contemplated herein ("Closing") shall occur on the Closing Date at the offices
of King and Spalding. Closing shall occur through an escrow with the Escrow
Agent. Funds shall be deposited into and held by Escrow Agent in a closing
escrow account with a bank satisfactory to Purchaser and Seller. Upon
satisfaction or completion of all closing conditions and deliveries, the
parties shall direct the Escrow Agent to immediately record and deliver the
closing documents to the appropriate parties and make disbursements according
to the closing statements executed by Seller and Purchaser. The Escrow Agent
shall agree in writing with Seller and Purchaser that (1) recordation of the
Deeds constitutes its representation that it is holding the closing documents,
closing funds and closing statement and is prepared and irrevocably committed
to disburse the closing funds in accordance with the closing statements and (2)
release of funds to the Seller shall irrevocably commit it to issue the Title
Policy in accordance with this Agreement. Provided such supplemental
<PAGE> 40
escrow instructions are not in conflict with this Agreement as it may be
amended in writing from time to time, Seller and Purchaser agree to execute
such supplemental escrow instructions as may be appropriate to enable Escrow
Agent to comply with the terms of this Agreement.
5.2 Conditions to the Parties' Obligations to Close. In addition
to all other conditions set forth herein, the obligation of Seller, on the one
hand, and Purchaser, on the other hand, to consummate the transactions
contemplated hereunder shall be contingent upon the following:
(a) The other party's representations and warranties contained
herein shall be true and correct as of the date of this Agreement and the
Closing Date;
(b) As of the Closing Date, the other party shall have performed
its obligations hereunder and all deliveries to be made by the other party at
Closing have been tendered;
(c) As of the Closing Date, no action or proceeding by or before
any governmental authority shall have been instituted or threatened (and not
subsequently dismissed, settled or otherwise terminated) which is reasonably
expected to restrain, prohibit or invalidate the transactions contemplated by
this Agreement, other than an action or proceeding instituted or threatened by
such party;
(d) Any other condition set forth in this Agreement to such
party's obligation to close is not satisfied by the applicable date;
(e) The Related Purchase Agreements and Asset Purchase Agreement
shall be in full force and effect; and
(f) As a condition to Purchaser's obligation to close, at Closing
Seller shall not be in default under any agreement to be assigned to, or
obligation to be assumed by, Purchaser under this Agreement.
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with the Closing hereunder has not been
satisfied as of the Closing Date or other applicable date, such party may, in
its sole discretion, terminate this Agreement by delivering written notice to
the other party on or before the Closing Date or other applicable date, or
elect to close, notwithstanding the non-satisfaction of such condition, in
which event such party shall be deemed to have waived any such condition except
for breach by a party of a covenant in which case the Closing shall not relieve
such breaching party from any liability it would otherwise have hereunder.
5.3 Seller's Deliveries in Escrow. Seller shall deliver in escrow
to the Escrow Agent the following:
(a) Deed. A limited warranty deed warranting title against any
party claiming by, through or under Seller (the "Deeds");
(b) Bill of Sale and Assignment of Leases and Contracts. A Bill
of Sale and Assignment of Leases and Contracts in the form of Exhibit E
attached
<PAGE> 41
hereto (the "Assignment"), executed and acknowledged by Seller, vesting in
Purchaser good title to the property described therein free of any claims,
except for the Permitted Exceptions to the extent applicable;
(c) Certificate. A certificate from Seller that each of the
representations and warranties contained in Paragraph 7.1 hereof is true and
correct as set forth herein as of the Closing Date modified to correct any
change arising from and after the Date of this Agreement. Such certificate
shall contain an updated certified Rent Roll and list of Service Contracts
which Seller shall certify to be true and correct as of Closing;
(d) Notice to Tenants. A notice to each tenant in the form of
Exhibit F attached hereto;
(e) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
real property;
(f) FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit executed by Seller. If Seller fails to provide the necessary
affidavit and/or documentation of exemption on the Closing Date, Purchaser may
proceed in accordance with the withholding provisions in such Act;
(g) Tenant Estoppels. Estoppel certificates satisfying the
conditions in Paragraph 2.3, dated not earlier than 30 days before the Closing
Date;
(h) Terminations. Terminations, effective no later than Closing,
of those Service Contracts which Purchaser has elected not to assume or is not
required to assume;
(i) Lien Waiver. If applicable under local law, a waiver of any
lien rights by Peterson Management in connection with its management services
provided to the Property;
(j) Authority. Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to Purchaser, the Escrow Agent and the
Title Company, including an opinion of counsel satisfactory to Purchaser in its
reasonable judgment;
(k) Other Deliveries. Any other Closing deliveries required to be
made by or on behalf of Seller hereunder.
5.4 Purchaser's Deliveries in Escrow. Purchaser shall deliver in
escrow to the Escrow Agent the following:
(a) Purchase Price. The Purchase Price, less the Earnest Money
that is applied to the Purchase Price, plus or minus applicable prorations,
deposited by Purchaser with the Escrow Agent in immediate, same-day federal
funds wired for credit into the Escrow Agent's escrow account;
(b) Bill of Sale and Assignment of Leases and Contracts. The
Assignment, executed by Purchaser;
<PAGE> 42
(c) State Law Disclosures. Such disclosures and reports as are
required by applicable state and local law in connection with the conveyance of
real property;
(d) Authority. Evidence of the existence, organization and
authority of Purchaser and of the authority of the persons executing documents
on behalf of Purchaser reasonably satisfactory to Seller, the Escrow Agent and
the Title Company, including an opinion of counsel satisfactory to Seller in
its reasonable judgment; and
(e) Other Deliveries. Any other Closing deliveries required to be
made by or on behalf of Purchaser hereunder.
5.5 Closing Statements/Escrow Fees. Seller and Purchaser shall
deposit with the Escrow Agent executed closing statements consistent with this
Agreement in the form required by the Escrow Agent. The Escrow Agent's escrow
fee, closing charges, and any cancellation fee shall be divided equally between
and paid by Seller and Purchaser. If Seller and Purchaser cannot agree on the
closing statement to be deposited as aforesaid because of a dispute over the
prorations and adjustments set forth therein, the Closing nevertheless shall
occur, and the amount in dispute shall be withheld from the Purchase Price and
placed in an escrow with the Title Company, to be paid out upon the joint
direction of the parties or pursuant to court order upon resolution or other
final determination of the dispute.
5.6 Sales, Transfer, and Documentary Taxes. Seller shall pay all
sales, gross receipts, compensating, stamp, excise, documentary, transfer, deed
or similar taxes and fees imposed in connection with this transaction under
applicable state or local law.
5.7 Possession. At the time of Closing, Seller shall deliver to
Purchaser possession of the Property subject only to the Permitted Exceptions.
5.8 Delivery of Books and Records. Immediately after the Closing,
Seller shall deliver to the offices of Purchaser's property manager: the
original Leases and Service Contracts; copies or originals of all books and
records of account, contracts, copies of correspondence with tenants and
suppliers, receipts for deposits, unpaid bills and other papers or documents
which pertain to the Property; all permits and warranties; all advertising
materials, booklets, keys and other items, if any, used in the operation of the
Property; and, if in Seller's possession or control, the original "as-built"
plans and specifications; all other available plans and specifications and all
operation manuals. Seller shall cooperate with Purchaser after Closing to
transfer to Purchaser any such information stored electronically.
ARTICLE 6: PRORATIONS AND ADJUSTMENTS
6.1 Prorations. Not less than 3 business days prior to Closing,
Seller shall provide to Purchaser such information and verification reasonably
necessary to support the prorations and adjustments under this Article 6. The
items in subparagraphs (a) through (e) of this Paragraph 6.1 shall be prorated
between Seller and Purchaser as of the close of the day immediately preceding
<PAGE> 43
the Closing Date, the Closing Date being a day of income and expense to
Purchaser:
(a) Taxes and Assessments. Purchaser shall receive a credit for
any accrued but unpaid real estate taxes and assessments (including without
limitation any assessments imposed by private covenant) applicable to any
period before the Closing Date, even if such taxes and assessments are not yet
due and payable. If the amount of any such taxes have not been determined as
of Closing, such credit shall be based on the most recent ascertainable taxes
and shall be reprorated upon issuance of the final tax bill. Purchaser shall
receive a credit for any special assessments which are levied or charged
against the Property, whether or not then due and payable. Any attorneys fees
incurred by either Seller or Purchaser in connection with the reduction of real
estate taxes benefitting each of Seller's and Purchaser's period of ownership,
respectively, also shall be prorated as of the Closing Date.
(b) Collected Rent. Purchaser shall receive a credit for any rent
and other income (and any applicable state or local tax on rent) under Leases
collected by Seller before Closing that applies to any period after Closing.
Uncollected rent and other uncollected income shall not be prorated at Closing.
After Closing, Purchaser shall apply all rent and income collected by Purchaser
from a tenant, unless the tenant properly identifies the payment as being for a
specific item, first to such tenant's monthly rental for the month in which the
Closing occurred and then to arrearages in the reverse order in which they were
due, remitting to Seller, after deducting collection costs, any rent properly
allocable to Seller's period of ownership. Purchaser shall bill and attempt to
collect such rent arrearages in the ordinary course of business, but shall not
be obligated to engage a collection agency or take legal action to collect any
rent arrearages. Seller shall not have the right to seek collection of any
rents or other income applicable to any period before the Closing. Any rent or
other income received by Seller after Closing which are owed to Purchaser shall
be held in trust and remitted to Purchaser promptly after receipt.
(c) Operating Expense Pass-throughs. Seller, as landlord under
the Leases, is currently collecting from tenants under the Leases additional
rent to cover taxes, insurance, utilities, maintenance and other operating
costs and expenses (collectively, "Operating Expense Pass-throughs") incurred
by Seller in connection with the ownership, operation, maintenance and
management of the Property. If at Closing it can be determined whether the
estimated prepayments of Operating Expense Pass-throughs collected by Seller
prior to Closing were in excess of or less than any tenant's share of such
expenses actually incurred by Seller, then Purchaser shall receive a credit
equal to the amount of any such excess, or if applicable, Seller shall receive
a credit equal to the amount of any such underpayment. If the actual under- or
overpayments received by Seller for Operating Expense Pass-throughs cannot be
determined at Closing, then the parties shall perform their prorations, and
make adjusting payments, when the correct amount owed to or from Seller for
payments collected prior to Closing in respect of Operating Expense
Pass-throughs can be determined as provided in Paragraph 6.3. In either event,
Purchaser shall be responsible for crediting or repaying those amounts to the
appropriate tenants. If Seller collected estimated prepayments of Operating
Expense Pass-throughs attributable to any period after Closing, Seller shall
pay or credit any such amounts to Purchaser at Closing.
<PAGE> 44
(d) Service Contracts. Seller or Purchaser, as the case may be,
shall receive a credit for regular charges under Service Contracts assumed by
Purchaser pursuant to this Agreement paid and applicable to Purchaser's period
of ownership or payable and applicable to Seller's period of ownership,
respectively.
(e) Utilities. Seller shall cause the meters, if any, for
utilities to be read the day on which the Closing Date occurs and to pay the
bills rendered on the basis of such readings. If any such meter reading for
any utility is not available, then adjustment therefor shall be made on the
basis of the most recently issued bills therefor which are based on meter
readings no earlier than 30 days before the Closing Date; and such adjustment
shall be reprorated when the next utility bills are received.
6.2 Tenant Reconciliations and Post-Closing Adjustments. After
year-end (or other applicable period) adjustments with tenants under Leases for
Operating Expense Pass-throughs and receipt of final tax and other bills,
Purchaser shall prepare and present to Seller a calculation of the reproration
of such Operating Expense Pass-throughs, taxes and other items, based upon the
actual amount of such items charged to or received by the parties for the year
or other applicable fiscal period. The parties shall make the appropriate
adjusting payment between them within 30 days after presentment to Seller of
Purchaser's calculation. Seller may inspect Purchaser's books and records
related to the Property to confirm the calculation. Either party shall be
entitled to a post-Closing adjustment for any incorrect proration or
adjustment. No other expense related to the ownership or operation of the
Property shall be charged to or paid or assumed by Purchaser, whether allocable
to any period before or after the Closing, other than those obligations
expressly assumed by Purchaser.
6.3 Leasing Commissions and Management Fees. Purchaser shall
receive a credit equal to all management fees due to Peterson Management for
the period during the month of Closing prior to Closing, and for any prior
month, if not theretofore paid. Purchaser shall assume, in writing, the
obligation to pay any leasing commissions due under Leases after the Closing
Date, but only to the extent such leasing commissions are identified in the
Commission Schedules or approved by Purchaser after the Date of this Agreement.
At Closing, Purchaser shall also assume leasing commissions expressly
identified in the Commission Schedules which may become due as a result of the
renewal or expansion of any Lease as a result of the exercise of such right
after the Date of this Agreement.
6.4 Tenant Improvements and Allowances. Tenant improvement
expenses (including all hard and soft construction costs, whether payable to
the contractor or the tenant), tenant allowances, rent abatement, moving
expenses and other out-of-pocket costs which are the obligation of the landlord
under Leases shall be allocated between the parties according to whether such
obligations arise in connection with (1) Leases in place as of the date of this
Agreement other than with respect to renewal or expansion rights under such
Leases properly exercised after the date of this Agreement (collectively,
"Existing TI Obligations"), or (2) Leases or amendments entered into during the
pendency of this Agreement in conformity with the requirements of
<PAGE> 45
Paragraph 4.1(e) or renewals or expansion rights properly exercised after the
date of this Agreement ("New TI Obligations"):
(a) Existing TI Obligations. If, by Closing, Seller has not
completed and paid in full Existing TI Obligations, then such costs as
reasonably agreed by Purchaser and Seller shall be withheld from the Purchase
Price at Closing, placed in an escrow with the Title Company, and Purchaser
shall be responsible for completing and paying such Existing TI Obligations.
Any funds held in the escrow shall be released to Purchaser without any
requirement for the consent of Seller and shall be used by Purchaser to pay the
landlord's share of such tenant improvements and allowances. If there are any
funds remaining in the escrow after payment of such Existing TI Obligations,
such excess shall be paid to Seller; but if the amount in escrow is
insufficient for such purpose, Seller shall reimburse Purchaser for such
deficiency upon demand. Alternatively, if landlord's obligation is a fixed
amount or capable of exact quantification, Purchaser may elect as to any such
Existing TI obligations to receive a credit, equal to the landlord's obligation
in respect of same, without any obligation to place such funds in escrow, and
Purchaser shall assume landlord's responsibility for such Existing TI
Obligations.
(b) New TI Obligations. At Closing, Purchaser shall reimburse
Seller for the cost for New TI Obligations properly performed and paid for by
Seller to the extent such obligations were expressly approved in writing by
Purchaser, and Purchaser shall assume the obligation to perform and pay for
such New TI Obligations.
(c) Change Orders. From and after the Date of this Agreement
through the date which is 10 days prior to the expiration of the Due Diligence
Period, if Seller intends to agree to any change orders or additions to tenant
improvements or changes in the scope of work or specifications with respect to
Existing TI Obligations or New TI Obligations, Seller shall first provide
Purchaser with at least 3 business days' prior written notice of such action,
and shall with such notice, deliver to Purchaser a copy of any change order or
other document or agreement to be executed in connection therewith. From and
after the date which is 10 days prior to the expiration of the Due Diligence
Period, and thereafter until the Closing hereunder has occurred or this
Agreement has otherwise been terminated, Seller shall not agree to any change
orders or additions to tenant improvements or changes in the scope of work or
specifications with respect to Existing TI Obligations or New TI Obligations
without Purchaser's prior written approval.
(d) Evidence of Payment. At Closing, Seller shall provide lien
waivers, payment affidavits, certificates of completion, Tenant Estoppels and
other evidence reasonably necessary to confirm Seller's compliance with its
obligations pursuant to this Paragraph 6.4, and, to the extent such coverage is
available, shall provide such indemnity or other assurance to enable the Title
Company to insure against any claims against the Property arising from work
performed before the Closing.
6.5 Tenant Deposits. All tenant security deposits (and interest
thereon if required by law or contract to be earned thereon) shall be
transferred or credited to Purchaser at Closing. As of the Closing, Purchaser
shall assume Seller's obligations related to tenant security deposits, but only
to the extent they are properly credited and transferred to Purchaser.
<PAGE> 46
6.6 Wages. Purchaser shall not be liable for any wages, fringe
benefits, payroll taxes, unemployment insurance contributions, accrued vacation
pay, accrued pay for unused sick leave, accrued severance pay and other
compensation accruing before Closing for employees at the Property or arising
from the termination of such employees at or prior to Closing. Purchaser shall
not be liable for any obligations accruing before Closing under any union
contract applicable to any such employees or arising from the termination of
any such employees or prior to Closing.
6.7 Utility Deposits. Seller shall receive a credit for the
amount of deposits, if any, with utility companies that are transferable and
that are assigned to Purchaser at the Closing.
6.8 Sales Commissions. Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales
person or finder in connection with this transaction. In the event of any
claim for broker's or finder's fees or commissions in connection with the
negotiation, execution or consummation of this Agreement or the transactions
contemplated hereby, each party shall indemnify and hold harmless the other
party from and against any such claim based upon any statement, representation
or agreement of such party.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES
7.1 Seller's Representations and Warranties. As a material
inducement to Purchaser to execute this Agreement and consummate this
transaction, subject to any conflicting or inconsistent information contained
in the Property Information, Seller represents and warrants to Purchaser that:
(a) Organization and Authority. Seller has been duly organized, is
validly existing, and is in good standing as a Georgia limited partnership.
Seller is in good standing and is qualified to do business in the state in
which the Real Property is located. Seller has the full right and authority
and has obtained any and all consents required to enter into this Agreement and
to consummate or cause to be consummated the transactions contemplated hereby.
This Agreement has been, and all of the documents to be delivered by Seller at
the Closing will be, authorized and properly executed and constitute, or will
constitute, as appropriate, the valid and binding obligations of Seller,
enforceable in accordance with their terms.
(b) Conflicts and Pending Actions or Proceedings. There is no
agreement to which Seller is a party or, to Seller's knowledge, binding on
Seller which is in conflict with this Agreement, or which challenges or impairs
Seller's ability to execute or perform its obligations under this Agreement.
There is not now pending or, to the best of Seller's knowledge, threatened, any
action, suit or proceeding before any court or governmental agency or body
against the Seller that would prevent Seller from performing its obligations
hereunder or against or with respect to the Property. To Seller's knowledge,
no condemnation, eminent domain or similar proceedings are pending or
threatened with regard to the Property. Seller has not received any notice and
has no knowledge of any pending or threatened liens, special
<PAGE> 47
assessments, impositions or increases in assessed valuations to be made against
the Property.
(c) Leases and Rent Roll. The documents constituting the Leases
that are delivered to Purchaser pursuant to Paragraph 2.1 are true, correct and
complete copies of all of the Leases affecting the Property, including any and
all amendments or supplements thereto, and guaranties or other security in
connection therewith. To the best of Seller's knowledge, all information set
forth in the Rent Roll is true, correct, and complete in all material respects
as of its date. Except as set forth in the Rent Roll, there are no leasing or
other fees or commissions due, nor will any become due, in connection with any
Lease or any renewal or extension or expansion of any Lease, and, to the best
of Seller's knowledge, no understanding or agreement with any party exists as
to payment of any leasing commissions or fees regarding future leases or as to
the procuring of tenants. To the best of Seller's knowledge, except as
disclosed in the Property Information, no tenants have asserted nor are there
any defenses or offsets to rent accruing after the Closing Date and no default
or breach exists on the part of any tenant. Seller has not received any notice
of any default or breach on the part of the landlord under any Lease.E Except
as set forth in the Rent Roll, to the best of Seller's knowledge, all of the
landlord's obligations to construct tenant improvements or reimburse the
tenants for tenant improvements under the Leases have been paid and performed
in full and all concessions (other than any unexpired rent abatement set forth
in the Leases) from the landlord under the Leases have been paid and performed
in full.
(d) Service Contracts. The list of Service Contracts delivered to
Purchaser pursuant to this Agreement is true, correct, and complete as of the
date of its delivery. The documents constituting the Service Contracts
delivered to Purchaser are true, correct and complete copies of all of the
Service Contracts affecting the Property, or any portion thereof. Neither
Seller nor, to Seller's knowledge, any other party is in default under any
Service Contract.
(e) Environmental. Seller has no knowledge of any violation of
Environmental Laws related to the Property or the presence or release of
Hazardous Materials on or from the Property except as disclosed in the Property
Information. Neither Seller nor, to Seller's knowledge, any tenant or other
occupant, has manufactured, introduced, released or discharged from or onto the
Property any Hazardous Materials or any toxic wastes, substances or materials
(including, without limitation, asbestos), and neither Seller nor, to Seller's
knowledge, any tenant or other occupant, has used the Property or any part
thereof for the generation, treatment, storage, handling or disposal of any
Hazardous Materials, in violation of any Environmental Laws. The term
"Environmental Laws" includes without limitation the Resource Conservation and
Recovery Act and the Comprehensive Environmental Response Compensation and
Liability Act and other federal laws governing the environment as in effect on
the date of this Agreement, together with their implementing regulations,
guidelines, rules or orders as of the date of this Agreement, and all state,
regional, county, municipal and other local laws, regulations, ordinances,
rules or orders that are equivalent or similar to the federal laws recited
above or that purport to regulate Hazardous Materials. The term "Hazardous
Materials" includes petroleum, including crude oil or any fraction thereof,
natural gas, natural gas liquids, liquified natural gas, or
<PAGE> 48
synthetic gas usable for fuel (or mixtures of natural gas or such synthetic
gas), and any substance, material, waste, pollutant or contaminant listed or
defined as hazardous or toxic under any Environmental Law.
(f) Withholding Obligation. Seller's sale of the Property is not
subject to any federal, state or local withholding obligation of Purchaser
under the tax laws applicable to Seller or the Property.
(g) ERISA. Seller is not and is not acting on behalf of an
"employee benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, a "plan" within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended, or an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. Section 2510.3-101
of any such employee benefit plan or plans.
7.2 Purchaser's Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction,
Purchaser represents and warrants to Seller that:
(a) Organization and Authority. Purchaser has been duly organized
and is validly existing as a Maryland corporation. in good standing in the
State of Maryland, and will be qualified to do business in the state in which
the Real Property is located on the Closing Date. Subject only to obtaining
certain internal approvals on or before the expiration of the Due Diligence
Period, Purchaser has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
(b) Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser's knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or,
to Purchaser's knowledge, threatened against Purchaser which challenges or
impairs Purchaser's ability to execute or perform its obligations under this
Agreement.
7.3 Survival of Representations and Warranties. The
representations and warranties set forth in this Article 7 are made as of the
Date of this Agreement and are remade as of the Closing Date and shall not be
deemed to be merged into or waived by the instruments of Closing, but shall
survive the Closing for a period of 1 year. Seller and Purchaser shall have
the right to bring an action thereon only if Seller or Purchaser, as the case
may be, has given the other party written notice of the circumstances giving
rise to the alleged breach within such 1-year period, provided Purchaser agrees
that any action brought by it for a breach of any of Seller's representations
and warranties shall only be brought against the general partner of Seller, and
Purchaser shall not seek recovery from, and hereby waives any cause of action
it may have against, any of the limited partners of Seller on account of any
breach of Seller's representations and warranties. Any representations and
warranties of Seller pertaining to information contained in estoppel
<PAGE> 49
certificates obtained from tenants shall, as to such tenants, expire as of the
later of receipt of such estoppel certificate or the Closing Date. To the
extent Purchaser obtains actual knowledge of any breach or inaccuracy in any
representation or warranty of Seller prior to Closing and Purchaser
nevertheless proceeds with Closing, Purchaser shall be deemed to have waived
any right, claim or cause of action arising out of the breach or inaccuracy in
any such representation or warranty.
7.4 Seller's Knowledge. For purposes hereof, "to the best of
Seller's knowledge" or words of like effect shall mean the actual knowledge and
belief, without investigation beyond files or materials in the possession of
Peterson Management Company of Robert Peterson and Reynolds Thompson, and "to
Purchaser's knowledge" or words of like effect means the actual knowledge and
belief, without investigation beyond the matters delivered or made available to
Purchaser as part of the Property Information or disclosed in any Tenant
Estoppels, of Joseph Wallace and Robert G. Stuckey.
7.5 Except as specifically set forth in this Agreement, Seller
hereby specifically disclaims and Purchaser hereby waives any warranty,
guaranty or representation, oral or written, past, present or future of, as to,
or concerning: (i) the nature and condition of the Property, including but not
by way of limitation, the water, soil and geology, and the suitability thereof
and of the Property for any and all activities and uses which Purchaser may
wish to conduct thereon; (ii) the manner, construction, condition and state of
repair or lack of repair of any improvements located thereon; (iii) the nature
and extent of any right-of-way, lease, possession, lien, encumbrance, license,
reservation, condition or otherwise, except for any warranties contained in
Seller's deed; (iv) compliance of the Property or its operation with any laws,
rules, ordinances or regulations of any government or other body or with any
covenants, conditions or restrictions of record that may affect the Property;
or (v) the presence or absence of any toxic or hazardous materials at the
Property. THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN
"AS-IS, WHERE-IS" BASIS AND PURCHASER EXPRESSLY ACKNOWLEDGES THAT IN
CONSIDERATION OF THE AGREEMENTS OF SELLER HEREIN, EXCEPT AS OTHERWISE SPECIFIED
HEREIN, SELLER MAKES AND HAS MADE NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, OR ARISING BY OPERATION OF LAW, INCLUDING BUT IN NO WAY LIMITED TO ANY
WARRANTY OF OWNERSHIP, EXISTENCE, QUALITY, QUANTITY, VALUE, CONDITION,
HABITABILITY, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OF THE
PROPERTY, INCLUDING WITHOUT LIMITATION THE PERSONALTY. THIS DISCLAIMER DOES
NOT EFFECT AN ASSUMPTION OF ANY LIABILITY BY PURCHASER AND IT SHALL NOT BE
CONSTRUED TO WAIVE ANY RIGHTS OF CONTRIBUTION OR INDEMNITY OR OTHERWISE AFFECT
THE LIABILITIES OF THE PARTIES TO EACH OTHER OR TO THIRD PARTIES UNDER
ENVIRONMENTAL LAWS.
ARTICLE 8: MISCELLANEOUS
8.1 Parties Bound. Neither party may assign this Agreement without
the prior written consent of the other, and any such prohibited assignment
shall be void; provided, however, that Purchaser may assign this Agreement
without Seller's consent to an Affiliate. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the respective
legal representatives, successors, assigns, heirs, and devisees of the parties.
For the purposes of this paragraph, the term "Affiliate" means (a) an entity
that
<PAGE> 50
directly or indirectly controls, is controlled by or is under common control
with the Purchaser or (b) an entity at least a majority of whose economic
interest is owned by Purchaser; and the term "control" means the power to
direct the management of such entity through voting rights, ownership or
contractual obligations.
8.2 Headings. The article and paragraph headings of this Agreement
are for convenience only and in no way limit or enlarge the scope or meaning of
the language hereof.
8.3 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereunder, including all legal and accounting fees
and disbursements.
8.4 Invalidity and Waiver. If any portion of this Agreement is
held invalid or inoperative, then so far as is reasonable and possible the
remainder of this Agreement shall be deemed valid and operative, and, to the
greatest extent legally possible, effect shall be given to the intent
manifested by the portion held invalid or inoperative. The failure by either
party to enforce against the other any term or provision of this Agreement
shall not be deemed to be a waiver of such party's right to enforce against the
other party the same or any other such term or provision in the future.
8.5 Governing Law. This Agreement shall, in all respects, be
governed, construed, applied, and enforced in accordance with the law of the
state in which the Real Property is located.
8.6 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing shall survive the Closing and shall not be deemed to
be merged into or waived by the instruments of Closing.
8.7 No Third Party Beneficiary. This Agreement is not intended to
give or confer any benefits, rights, privileges, claims, actions, or remedies
to any person or entity as a third party beneficiary, decree, or otherwise.
8.8 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all before agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against
whom enforcement is sought.
8.9 Time of the Essence. Time is of the essence in the performance
of this Agreement.
8.10 Confidentiality. Seller shall make no public announcement or
disclosure of any information related to this Agreement to outside brokers or
third parties, before or after the Closing, without the specific prior written
consent of Purchaser, except for such disclosures to Seller's lenders,
creditors, officers, employees and agents as may be necessary to permit Seller
to perform its obligations hereunder.
<PAGE> 51
8.11 Attorneys' Fees. Should either party employ attorneys to
enforce any of the provisions hereof, the party against whom any final judgment
is entered agrees to pay the prevailing party all reasonable costs, charges,
and expenses, including reasonable attorneys' fees, expended or incurred by the
prevailing party in connection therewith.
8.12 Notices. All notices required or permitted hereunder shall be
in writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either (1) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier, (2) sent by
telefax, in which case notice shall be deemed delivered upon transmission of
such notice, or (3) sent by personal delivery, in which case notice shall be
deemed delivered upon receipt or refusal of delivery. A party's address may be
changed by written notice to the other party; provided, however, that no notice
of a change of address shall be effective until actual receipt of such notice.
Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice.
8.13 Construction. The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.
8.14 Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and, except as otherwise expressly provided shall not
preclude the assertion or exercise of any other rights or remedies available by
law, in equity or otherwise.
8.15 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event
after which the designated period of time begins to run is not to be included
and the last day of the period so computed is to be included at, unless such
last day is a Saturday, Sunday or legal holiday for national banks in the
location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday. The last day of any period of time described herein shall be deemed
to end at 6 p.m. Atlanta, Georgia time.
8.16 Information and Audit Cooperation. At Purchaser's request, at
any time before or after the Closing, Seller shall provide to Purchaser's
designated independent auditor access to the books and records of the Property,
and all related information regarding the period for which Purchaser is
required to have the Property audited under the regulations of the Securities
and Exchange Commission, and Seller shall provide to such auditor a
representation letter regarding the books and records of the Property, in
substantially the form of Exhibit G attached hereto, in connection with the
normal course of auditing the Property in accordance with generally accepted
auditing standards.
8.17 Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original,
and
<PAGE> 52
all of such counterparts shall constitute one Agreement. To facilitate
execution of this Agreement, the parties may execute and exchange by telephone
facsimile counterparts of the signature pages.
8.18 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, on or
after the Closing any further actions, documents, and will obtain such
consents, as may be reasonably necessary or as may be reasonably requested to
fully effectuate the purposes, terms and conditions of this Agreement or to
further perfect the conveyance, transfer and assignment of the Property to
Purchaser.
8.19 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
[SIGNATURE PAGE FOLLOWS]
<PAGE> 53
SIGNATURE PAGE TO
AGREEMENT OF PURCHASE AND SALE
BY AND BETWEEN
DEKALB CHASE, L.P.
AND
CARRAMERICA REALTY CORPORATION
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
DEKALB CHASE, L.P.
By: Peterson Boca Corners Two, L.P., its
sole general partner
By: /s/ Robert E. Peterson
-----------------------------------------
Robert E. Peterson, its sole
general partner
Dated:
------------------
"Seller"
CARRAMERICA REALTY CORPORATION
By:/s/ Robert E. Stuckey
---------------------------------------
Name: Robert E. Stuckey
-------------------------------------
Title:
------------------------------------
Dated:
------------------
"Purchaser"
<PAGE> 54
EXHIBITS INTENTIONALLY OMITTED
