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Title: |
Purchase and Sale Agreement |
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Entities: |
BRE Properties, Inc.; Chase Manhattan Bank; Northwestern Mutual Life Insurance Co.; VelocityHSI, Inc.; Blank Rome LLP; Latham & Watkins |
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Date: |
2000 |
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Size: |
Preview shows 21KB of 130KB total |
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Price: |
$72 |
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ID: |
#334250 |
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PURCHASE AND SALE AGREEMENT
ARTICLE 1.
PROPERTY/PURCHASE PRICE
1.1 Certain Basic Terms.
-------------------
(a) Purchaser and Notice Address:
----------------------------
G & I III Residential One LLC, a Delaware limited
liability company ("Purchaser")
220 East 42nd Street, 27th Floor
New York, New York 10017
Attn: Ben Friedman
Telephone: (212) 697-4740
Facsimile: (212) 697-7403
With a copy to: Blank Rome Comisky & McCauley LLP
One Logan Square
Philadelphia, Pennsylvania 19103-6998
Attn: David Lebor, Esq.
Telephone: (215) 569-5658
Facsimile: (215) 569-5692
and
---
Blank Rome Tenzer Greenblatt LLP
405 Lexington Avenue
New York, New York 10174
Attn: Martin Luskin, Esq.
Telephone: (212) 885-5311
Facsimile: (212) 885-5003
(b) Sellers and Notice Address:
--------------------------
BRE Properties, Inc., a Maryland corporation ("BRE")
---
44 Montgomery Street, Suite 3600
San Francisco, California 94111
Attn: Lee Carlson
Telephone: (415) 445-6500
Facsimile: (415) 445-6505
BRE Properties Investors LLC, a Delaware limited
liability company ("DownREIT")
--------
44 Montgomery Street, Suite 3600
San Francisco, California 94111
Attn: Lee Carlson
{PAGE}
Telephone: (415) 445-6500
Facsimile: (415) 445-6505
With a copy to: Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, California 94111
Attn: Jeffrey T. Pero, Esq.
Telephone: (415) 395-8208
Facsimile: (415) 395-8095
(c) Date of this Agreement: July 10, 2000
----------------------
(d) Purchase Price: $280,000,000.
--------------
(e) Existing Indebtedness: The obligations listed on Exhibit A
--------------------- ---------
attached hereto.
(f) Deposit: Cash in the amount of $1,500,000, all
------- of which has been released to BRE.
(g) Closing Date: September 6, 2000, provided that
------------ Purchaser may accelerate the Closing
Date to a business day on or after
August 1, 2000 by delivery of notice
to Sellers at least seven (7) days
prior to such accelerated Closing
Date.
(h) Termination: This Agreement will automatically
----------- terminate if the Closing shall not
have occurred by 5:00 p.m. Eastern
Standard Time on September 6, 2000
except as may be required in order to
enable Purchaser to enforce its right
to specific performance pursuant to
Section 8.2 of this Agreement.
(i) Title Company: First American Title Insurance Company.
-------------
1.2 Properties.
----------
(a) Subject to the terms of this Purchase and Sale Agreement (the
"Agreement"), each Seller agrees to sell to Purchaser, and Purchaser agrees to
----------
purchase from each Seller, the real property set forth opposite such Seller's
name in Exhibit B attached hereto, together with all improvements located
---------
thereon and all appurtenances thereto, including all of such Seller's right,
title and interest in and to the land lying within any street or roadway or any
vacated or hereafter vacated street or roadway adjoining such real property
(each a "Property" and collectively the "Properties"). The term "Properties"
-------- ---------- ----------
shall include any and all of the right, title and interest of BRE or DownREIT,
as applicable, in and to all tangible personal property located upon its
respective Properties, including without limitation any and all appliances, gym
2
{PAGE}
equipment, golf carts, furniture, carpeting, draperies and curtains, tools and
supplies owned by BRE or DownREIT and listed on Exhibit C attached hereto, but
---------
excluding the personal property owned by VelocityHSI, Inc. listed on Exhibit C-1
-----------
attached hereto. BRE and DownREIT shall convey such tangible personal property
at Closing by a Bill of Sale in the form of Exhibits D-1 and D-2 attached
------------ ---
hereto, respectively.
(b) The conveyance of the Properties shall include any and all of the
right, title and interest of each Seller, and shall be subject to the respective
obligations of each Seller, in, to and under all intangible property in any way
related to such Seller's Properties or any part thereof including, without
limitation, the agreements or documents listed on Exhibit E attached hereto, all
---------
leases, and all business licenses, warranties (including, but not limited to,
those relating to the construction of such Properties or any portion thereof),
utility contracts, telephone exchange numbers, plans and specifications,
governmental approvals and development rights, and property names. To the extent
assignable, BRE and DownREIT shall assign, and Purchaser shall assume, such
rights, titles, interests, and obligations at Closing by the execution and
delivery of (i) an Assignment of Contracts in the form of Exhibits F-1 and F-2
------------ ---
attached hereto, respectively, and (ii) an Assignment of Leases in the form of
Exhibits G-1 and G-2 attached hereto, respectively.
------------ ---
(c) Purchaser shall purchase the Properties subject to the Existing
Indebtedness and, at Closing, shall assume all obligations under the such
Existing Indebtedness outstanding or arising from and after the Closing Date.
Sellers shall obtain any consents required under the Existing Indebtedness and
shall pay and be liable for all assumption and other fees charged or imposed by
the holders of the Existing Indebtedness.
1.3 Deposit. Concurrently with the execution of this Agreement, Purchaser
-------
has paid the Deposit to BRE, evidencing Purchaser's good faith to perform its
obligations under this Agreement. Subject to Section 8.1 hereof, the Deposit
-----------
(plus interest from the date of this Agreement to the Closing Date at the prime
rate announced from time to time by Chase Manhattan Bank, New York, New York)
shall be credited toward the Purchase Price at Closing. The Deposit shall not be
refundable to Purchaser except as expressly provided in Section 8.3 hereof.
-----------
1.4 Master LLC and Master LLC Agreement. Purchaser shall have the right to
-----------------------------------
assign all of its rights and obligations under this Agreement to a limited
liability company (the "Master LLC") governed by a limited liability company
----------
agreement (the "Master LLC Agreement") substantially in the form of the Master
--------------------
LLC Agreement attached hereto as Exhibit H, with such changes as may be required
---------
by local law or Purchaser's lenders (provided, however, that any such changes
shall be subject to the approval of each of the parties hereto, which approval
will not be unreasonably withheld). If Purchaser does not so assign all of its
rights and obligations under this Agreement to the Master LLC, Purchaser shall
contribute the Properties to the Master LLC. Simultaneously with Sellers'
transfer of the Properties to Purchaser (or the applicable Subsidiary LLC,
pursuant to Section 1.5 below), but as part of the Closing on the Closing Date,
-----------
in exchange for a pro rata number of membership units in the Master LLC, BRE
agrees to contribute the lesser of (i) cash in the amount of 15% of the
difference between the Purchase Price and the debt encumbering the Properties at
the time of such contribution and (ii) $12,750,000 (the "Contribution") to the
Master LLC.
3
{PAGE}
1.5 Direct Transfer to Subsidiary LLCs. Purchaser, on its own behalf or as
----------------------------------
the managing member of the Master LLC, as appropriate shall have the right to
direct Sellers to deed the Properties and transfer its other interests in the
Properties directly to one or more limited liability companies wholly-owned by
the Master LLC (each a "Subsidiary LLC" and collectively the "Subsidiary LLCs")
-------------- ---------------
and governed by a limited liability company agreement substantially in the form
of the limited liability company agreement (the "Subsidiary LLC Agreement")
------------------------
attached hereto as Exhibit I, with such changes as may be required by local law
---------
or Purchaser's lenders (provided, however, that any such changes shall be
subject to the approval of each of the parties hereto, which approval will not
be unreasonably withheld).
ARTICLE 2.
INSPECTIONS
2.1 Property Information. Prior to the Date of this Agreement, each
--------------------
Seller has made available to Purchaser true, accurate and complete copies of all
documents which relate in any manner to such Seller's Properties or the
operation thereof and which, to such Seller's knowledge, are in such Seller's
possession or control, including, without limitation, the following
(collectively, the "Property Information"):
--------------------
(a) All operating agreements and service contracts;
(b) All surveys, plats or maps;
(c) All construction drawings and plans and specifications for
improvements;
(d) All warranties and guaranties;
(e) All environmental reports;
(f) All engineering and physical inspection reports;
(g) All approvals, permits, certificates or statements of occupancy;
(h) All operating and maintenance records and books, and real estate
tax bills and statements of assessed value;
(i) Utility bills, including electric, gas and water bills;
(j) All leases together with all amendments and modifications thereof;
and
(k) A current rent roll and delinquency report, including a list of
tenant renewals and notices of termination.
Neither Seller makes any representation or warranty as to the accuracy
of the Property Information or suitability for reliance thereon by Purchaser. To
each Seller's knowledge, such Seller has not failed to provide to Purchaser any
document which Purchaser has requested which relates in any manner to such
Seller's Properties or the operation thereof and which, to such Seller's
knowledge, is in such Seller's possession or control.
4
{PAGE}
2.2 Confidentiality. The Property Information and all other information
---------------
relating to the Properties, other than matters of public record or matters
generally known to the public or which become known to the public other than as
a result of a breach of this Section 2.2 or the Confidentiality Agreement,
-----------
furnished to, or obtained through inspection of the Properties by, Purchaser and
its affiliates, lenders, employees, attorneys, accountants and other agents, (a)
shall be treated by Purchaser and its affiliates, lenders, employees, attorneys,
accountants and agents, as confidential in accordance with the terms of the
Confidentiality Agreement by and between BRE and Purchaser dated January 20,
2000 (the "Confidentiality Agreement"), (b) may only be disclosed to Purchaser's
-------------------------
consultants, affiliates, investors, lenders, employees, attorneys and
accountants who agree to maintain the confidentiality of such information in
accordance with the Confidentiality Agreement, and (c) with respect to the
Property Information, shall be returned to Sellers by Purchaser if Closing with
respect to such Property does not occur. The provisions of this Section 2.2
-----------
shall survive Closing or the earlier termination of this Agreement.
2.3 Inspections in General. Subject to Section 2.4 hereof, during the
---------------------- -----------
pendency of this Agreement, Purchaser and its agents and employees shall have
the right to enter upon the Properties for the purpose of making inspections at
Purchaser's sole risk, cost and expense. Before any such entry, Purchaser shall
provide the appropriate Seller with a certificate of insurance naming such
Seller as an additional insured, issued by an insurer and including such
insurance limits and coverages as may be reasonably satisfactory to such Seller.
All entries upon the Properties shall be at reasonable times during normal
business hours and after at least 48 hours prior notice to the appropriate
Seller, and such Seller or its agent shall have the right to accompany Purchaser
during any activities performed by Purchaser on such Property. If any
inspection or test disturbs any Property, Purchaser shall restore such Property
to the same condition as existed before the inspection or test. Purchaser shall
indemnify, defend and hold harmless each Property and each Seller and its
respective directors, officers, agents, contractors and employees, from and
against any and all losses, costs (including attorneys' fees), damages, claims,
or liabilities, including but not limited to mechanic's and materialmen's liens,
arising out of Purchaser's actions in connection with Purchaser's inspection of
the Properties as allowed herein. The provisions of this Section 2.3 shall
-----------
survive Closing or the earlier termination of this Agreement.
2.4 Environmental Inspections. Prior to the date hereof, Purchaser has
-------------------------
conducted all environmental inspections of the Properties it wished to conduct.
2.5 PURCHASER'S RELIANCE ON ITS INVESTIGATIONS. PURCHASER REPRESENTS AND
------------------------------------------
WARRANTS THAT IT IS A KNOWLEDGEABLE, EXPERIENCED AND SOPHISTICATED PURCHASER OF
REAL ESTATE AND THAT, IN PURCHASING THE PROPERTIES, IT HAS RELIED AND SHALL RELY
ON (A) ITS OWN EXPERTISE AND THE EXPERTISE OF ITS OWN CONSULTANTS AND ADVISORS
AND (B) ITS OWN INVESTIGATIONS AND INSPECTIONS OF THE PROPERTIES, EXCEPT AS
EXPRESSLY PROVIDED IN THIS AGREEMENT. PRIOR TO THE DATE HEREOF, PURCHASER HAS
CONDUCTED SUCH INSPECTIONS AND INVESTIGATIONS OF THE PROPERTIES AS PURCHASER
DEEMED OR SHALL DEEM NECESSARY, INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND
ENVIRONMENTAL CONDITIONS THEREOF, AND SHALL RELY UPON SAME. PURCHASER IS NOT NOW
RELYING, AND WILL NOT LATER RELY,
5
{PAGE}
UPON ANY REPRESENTATION OR WARRANTY MADE BY ANY SELLER OR ANYONE ACTING OR
CLAIMING TO ACT, BY, THROUGH OR UNDER ANY SELLER OR ON ANY SELLER'S BEHALF
CONCERNING ANY PROPERTY, EXCEPT FOR SUCH SELLER'S WARRANTIES (AS DEFINED BELOW).
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND EXCEPT FOR EACH
SELLER'S REPRESENTATIONS AND WARRANTIES IN THIS AGREEMENT AND ANY WARRANTIES
CONTAINED IN THE DEEDS OR OTHER DOCUMENTS DELIVERED AT CLOSING ("SELLER'S
--------
WARRANTIES"), THIS SALE IS MADE AND WILL BE MADE WITHOUT REPRESENTATION OR
----------
WARRANTY OF ANY KIND (WHETHER EXPRESS, IMPLIED, OR, TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, STATUTORY) BY ANY SELLER. AS A MATERIAL PART OF THE
CONSIDERATION FOR THIS AGREEMENT, PURCHASER AGREES TO ACCEPT THE PROPERTIES ON
AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS, AND WITHOUT ANY REPRESENTATION
OR WARRANTY, ALL OF WHICH EACH SELLER HEREBY DISCLAIMS, EXCEPT FOR EACH SELLER'S
WARRANTIES. EXCEPT FOR EACH SELLER'S WARRANTIES, NO WARRANTY OR REPRESENTATION
IS MADE BY ANY SELLER AS TO FITNESS FOR ANY PARTICULAR PURPOSE, ENTITLEMENTS,
DEVELOPMENT APPROVALS, MERCHANTABILITY, MARKETABILITY, DESIGN, QUALITY,
CONDITION, OPERATION, INCOME, COMPLIANCE WITH DRAWINGS OR SPECIFICATIONS,
ABSENCE OF DEFECTS, ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES (INCLUDING
ASBESTOS), ABSENCE OF FAULTS, FLOODING, WETLANDS, OR COMPLIANCE WITH LAWS,
ORDINANCES, OR REGULATIONS (INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO
HEALTH, SAFETY, AND THE ENVIRONMENT). PURCHASER ACKNOWLEDGES THAT PURCHASER HAS
ENTERED INTO THIS AGREEMENT WITH THE INTENTION OF MAKING AND RELYING UPON ITS
OWN INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL, ECONOMIC, USE, COMPLIANCE, AND
LEGAL CONDITION OF THE PROPERTIES AND THAT PURCHASER IS NOT NOW RELYING, AND
WILL NOT LATER RELY, UPON ANY REPRESENTATION OR WARRANTY MADE BY ANY SELLER OR
ANYONE ACTING OR CLAIMING TO ACT, BY, THROUGH OR UNDER ANY SELLER OR ON ANY
SELLER'S BEHALF CONCERNING ANY PROPERTY, EXCEPT FOR EACH SELLER'S WARRANTIES.
FURTHER, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, PURCHASER
ACKNOWLEDGES THAT NEITHER SELLER MAKES ANY REPRESENTATION OR WARRANTY WITH
RESPECT TO ANY PROPERTY INFORMATION OR ANY DOCUMENTS MADE AVAILABLE TO PURCHASER
OR ITS ADVISORS AND CONSULTANTS CONCERNING THE FINANCIAL, PHYSICAL, OR
ENVIRONMENTAL CONDITION OF ANY PROPERTY, THE USE TO WHICH ANY PROPERTY MAY BE
PUT, OR ANY OTHER MATTER RELATED TO ANY PROPERTY, EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT.
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