EXHIBIT - 10.66
REAL ESTATE SALE AND LEASE TERMINATION AGREEMENT
[1600 Technology Drive, San Jose, California]
THIS REAL ESTATE SALE AND LEASE TERMINATION AGREEMENT (this
"AGREEMENT") is made effective as of November 18, 2003 (the "EFFECTIVE DATE"),
by and between EOP-Skyport I, L.L.C., a Delaware limited liability company
("SELLER"), and Brocade Communications Systems, Inc., a Delaware corporation
("PURCHASER"). In consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:
1. PURCHASE AND SALE OF PROPERTY. Subject to and in accordance
with the terms and conditions set forth in this Agreement, Purchaser shall
purchase from Seller and Seller shall sell to Purchaser a certain parcel of real
estate (the "REAL PROPERTY") in the City of San Jose, County of Santa Clara,
State of California, which parcel is more particularly described in attached
EXHIBIT A, and upon which is located an office building commonly known as "1600
Technology Drive," together with (a) all buildings and improvements owned by
Seller, and any and all of Seller's rights, easements, licenses and privileges
presently thereon or appertaining thereto (the "IMPROVEMENTS"), (b) Seller's
right, title and interest, to the extent transferable, in and to (i) the right
to use the names "1600 Technology Drive", (ii) all licenses and permits relating
solely to the Property, (iii) any blueprints, plans, specifications, maps or
drawings relating solely to the Property (it being agreed that Seller shall be
obligated to deliver possession of the foregoing only to the extent in Seller's
possession or control), and (iv) any guaranties or warranties relating to the
Improvements; and (c) all rights to be conveyed pursuant to the agreements set
forth in Section 4.1 below (all of the foregoing, collectively referred to in
this Agreement as the "PROPERTY"); provided, however, the term "Property"
expressly excludes all property listed on EXHIBIT B attached hereto.
2. CONSIDERATION. The total consideration to be paid by Purchaser
to Seller for the purchase of the Property and termination of the Lease (as
defined in Section 4.3.2 below) is ONE HUNDRED SIX MILLION EIGHT HUNDRED
THOUSAND and No/100 Dollars ($106,800,000) (the "CONSIDERATION").
2.1 At Closing, Purchaser shall pay to Seller the
Consideration, plus or minus the prorations described in this Agreement
(such amount, as adjusted, being referred to as the "CASH BALANCE").
Purchaser shall pay the Cash Balance by federal funds wire transferred
to Chicago Title Insurance Company located in Chicago, Illinois
("ESCROW AGENT") .
3. EVIDENCE OF TITLE. Seller has heretofore caused to be
delivered to Purchaser (a) a current commitment for an ALTA Owner's Title
Insurance Policy (the "TITLE COMMITMENT") covering the property to be described
in the Subdivision Map (as defined below), in the amount of the Consideration
(or such portion thereof as Purchaser may elect), issued by Chicago Title
Insurance Company (the "TITLE INSURER"), (b) available copies of all title
exception documents referred to in the Title Commitment, and (c) any existing
surveys of the
Real Property and the Improvements in Seller's possession, if any (the
"SURVEY"). At Closing, as a condition precedent to Purchaser's obligations
hereunder, Title Insurer shall issue an ALTA Owner's Title Insurance Policy in
the form of, and subject only to those exceptions (the "PERMITTED EXCEPTIONS")
which are included in, the pro forma title policy attached hereto as EXHIBIT E.
4. CLOSING. The payment of the Consideration, the transfer of
title to the Property, the recordation of the Subdivision Map (defined below)
and the satisfaction of all other terms and conditions of the transaction
contemplated by this Agreement (the "CLOSING") shall occur at 11 a.m., San Jose,
California time on the date hereof (such day being sometimes referred to as the
"CLOSING DATE"), through escrow at the San Jose office of the Title Insurer.
4.1 Seller's Closing Deliveries. At Closing, Seller shall
execute (as necessary), or cause to be executed, and deliver to
Purchaser (either through escrow or as otherwise provided below) each
of the documents described below: (a) one original Grant Deed, in form
of EXHIBIT F, subject to the exceptions listed in such form and the
Permitted Exceptions; (b) Seller's non-foreign affidavit, in the form
attached hereto as EXHIBIT I; (c) two original counterparts of the
Closing Statement (as defined in Section 4.3 below); (d) such transfer
tax forms as are required by law ("TRANSFER DOCUMENTS"); (e) two
original counterparts of a property management agreement between
Purchaser and Property Manager, in the form attached hereto as EXHIBIT
K (the "PROPERTY MANAGEMENT AGREEMENT") if any; (f) two original
counterparts of a sixth amendment to that certain lease agreement dated
as of December 17, 1999 by and between CA - The Concourse Limited
Partnership (an affiliate of Seller) and Purchaser for the property
located at 1745 Technology Drive, San Jose, California, in the form
attached hereto as EXHIBIT L (the "CONCOURSE VI LEASE AMENDMENT"); (g)
two original counterparts of the Declaration by and between Purchaser
and Seller, in the form attached hereto as EXHIBIT M (the
"DECLARATION"); (h) one original Certification of Fourth Amendment to
Skyport Plaza Declaration of Common Easements, Covenants, Conditions
and Restrictions, in the form attached hereto as EXHIBIT N
("CERTIFICATION OF CCR AMENDMENT"); (i) two original counterparts of
the Fourth Amendment to Skyport Plaza Declaration of Common Easements,
Covenants, Conditions and Restrictions, in the form attached hereto as
EXHIBIT O (the "CCR AMENDMENT"); (j) one original Termination of Lease,
in the form attached hereto as EXHIBIT P (the "LEASE TERMINATION"); (k)
the original letter of credit under the Lease (defined below), (l)
Right of First Offer ("ROFO") in favor of Purchaser, in the form
attached hereto as EXHIBIT Q, (m) an Assignment of Intangibles (the
"ASSIGNMENT OF INTANGIBLES") from Seller to Purchaser in the form
attached hereto as EXHIBIT G, and (n) a License Agreement (the "LICENSE
AGREEMENT") from Seller to Purchaser in the form attached hereto as
EXHIBIT H. The Closing Statement may be signed in facsimile
counterparts on the Closing Date. To the extent available, Seller shall
leave all of the original plans and specifications, licenses and
permits pertaining to the Property at the premises.
4.2 Purchaser's Closing Deliveries. At Closing, Purchaser
shall deliver or cause to be delivered to Seller executed counterparts
of the Closing Statement, the Property Management Agreement, the
Concourse VI Lease Amendment, the Declaration,
the Assignment of Intangibles, the Lease Termination, the ROFO, the
Transfer Documents, and the License Agreement together with the Cash
Balance described in Section 2.1 above, and such evidence of
Purchaser's power and authority as Seller or Title Insurer may
reasonably request.
4.3 Closing Prorations and Adjustments. The provisions of
this Section 4.3 shall survive the Closing. Seller shall prepare a
statement of the prorations and adjustments required by this Agreement
(the "CLOSING STATEMENT"), and submit it to Purchaser for approval at
least one (1) business day prior to the Closing Date. The items listed
below are to be equitably prorated or adjusted as of the close of
business on the Closing Date, except as provided otherwise below, it
being understood that for purposes of prorations and adjustments,
Seller shall be deemed the owner of the Property on such day and
Purchaser shall be deemed the owner of the Property as of the day after
the Closing Date.
4.3.1 Taxes. Taxes and assessments for tax year
2003-2004 (the fiscal tax year in which Closing occurs) are
currently assessed against the Property and other property
owned by Seller (such other property hereinafter referred to
as the "REMAINDER PROPERTY" and such taxes and assessments for
both the Property and the Remainder Property, the "COMBINED
TAXES"). The Property and the Remainder Property are
collectively referred to in this Section 4.3.1 as "ADJUSTED
PARCEL II". Combined Taxes for the tax year 2003-2004 for
Adjusted Parcel II have been paid by Seller in order to cause
the recordation of the Subdivision Map. Seller shall receive a
credit at Closing equal to (i) 32% of the Combined Taxes, plus
interest at seven percent (7%) per annum for the period
beginning on the date of Closing through and including the
date such taxes are actually due, on 68% of the Combined
Taxes.
4.3.2 Rent. The "minimum" or "base" rent payable
by Purchaser, as tenant (Purchaser in such capacity is
hereinafter referred to as "TENANT") under that certain lease
for the Property dated as of December 1, 2000, with Seller,
successor-in-interest to MV Golden State San Jose, LLC, as
landlord, as amended by First Amendment to Lease dated as of
January 16, 2001 (as amended, the "LEASE"), for the calendar
month in which the Closing occurs shall be prorated on the
basis of the number of days of such month the Property will
have been owned by Purchaser and Seller, respectively.
Purchaser shall give Seller a credit for any delinquent
"minimum" or "base" rent as of the date of Closing, and Seller
shall give Purchaser a credit for any overpayment of "minimum"
or "base" rent as of the date of Closing.
4.3.3 Utility Deposits. Seller shall be entitled
to recover any and all deposits with respect to the Property
held by any utility company as of the Closing Date.
4.3.4 Utilities. Water, electric, telephone and
all other utility and fuel charges, fuel on hand (at cost plus
sales tax), and any other payments to utility
companies shall be prorated to the extent not paid by
Purchaser as additional rent under the Lease. If possible,
utility prorations will be handled by final meter readings on
the Closing Date. If final readings are not possible, or if
any such charges are not separately metered, such charges will
be prorated based on the most recent period for which costs
are available.
4.4 Tenant Reimbursements. Purchaser, as the tenant under
the Lease is currently paying Seller, as landlord under the Lease,
certain amounts (referred to herein as "TENANT REIMBURSEMENTS") based
on Seller's estimates for real estate taxes and assessments, common
area maintenance, operating expenses and similar expenses
(collectively, "TENANT REIMBURSABLE EXPENSES"). Tenant Reimbursements
shall not be prorated at Closing but, rather, shall be reconciled
pursuant to Section 11 of the Lease Termination.
4.5 Reservation of Rights to Contest. Notwithstanding
anything to the contrary contained in this Agreement, Seller reserves
the exclusive right to meet with governmental officials and to contest
any reassessment or assessment of the Property and Remaining Property
or any portion thereof and to attempt to obtain a refund for any taxes
previously paid. Subject to the last sentence of this Section 4.5,
Seller shall retain all rights with respect to any refund of taxes
applicable to any period prior to the Closing Date. Purchaser shall
cooperate with Seller, at Seller's reasonable request and at Seller's
expense, if necessary in connection with any such contest or
reassessment, which cooperation may include executing applications or
other documents. Notwithstanding the foregoing, Seller shall pay to
Purchaser 32% of any such refund actually received (less 32% of costs
incurred in connection therewith) to the extent relating to either the
term of the Lease or Purchaser's period of ownership.
4.6 Transaction Costs. Except as otherwise specifically
set forth in this Agreement, the closing costs and other costs incurred
in connection with the transactions contemplated by this Agreement
shall be paid as follows: (a) Seller shall pay (i) the base premium
payable to the Title Company in connection with the issuance of an CLTA
standard owner's title policy, (ii) all recording fees for title
clearance documents, (iii) county transfer taxes, (iv) one-half of city
transfer taxes, (v) all legal fees payable to attorneys retained by
Seller and Seller's internal costs incurred in connection with
satisfaction of the Subdivision Condition and the cost to make any
alterations to the physical conditions of, or to correct non-compliance
with legal requirements applicable to, any real property owned by
Seller (but specifically excluding the cost of any alterations or
corrections of non-compliance which are Tenant's obligation to pay
and/or perform under the terms of the Lease) to the extent such
alterations or corrective actions are required to satisfy the
Subdivision Condition, and (vi) one-half of all escrow fees payable to
the Escrow Agent; and (b) Purchaser shall pay for (i) title insurance
costs and fees for the ALTA extended owner's coverage (except those
expressly the responsibility of Seller as provided above), including
fees for extended coverage, endorsements, coinsurance or reinsurance,
and any loan policy charges, (ii) one-half of the city transfer taxes,
(iii) recording charges (except those expressly the responsibility of
Seller as provided above), (iv) costs incurred in connection with
obtaining any survey of the
Property that Purchaser elects to obtain, (v) to the extent not paid as
of Closing pursuant Section 8.3(a) and whether or not Closing occurs,
all costs in connection with the satisfaction of the Subdivision
Condition (except those expressly the responsibility of Seller as
provided above) incurred through Closing or any earlier termination of
this Agreement, including without limitation all invoices from Kier &
Wright Civil Engineers & Surveyors, Inc. and Kenneth Rodrigues and
Partners (provided such amounts described in this Clause (v) may be
paid after Closing), and (vi) one-half of all escrow fees payable to
Escrow Agent. All other closing and other transaction costs shall be
allocated according to customary practice in San Jose, California.
Seller and Purchaser shall, however, be responsible for the fees of
their respective attorneys. The provisions of this Section 4.6 shall
survive any termination of this Agreement.
4.7 Reprorations. Notwithstanding anything contained
herein to the contrary, all reprorations contemplated by this Agreement
shall be completed within one (1) year of Closing (subject to extension
solely as necessary due to the unavailability of final information, but
in no event to exceed two (2) years after Closing). The provisions of
this Section 4.7 shall survive the Closing.
5. [Intentionally Deleted]
6. BROKERAGE. Purchaser agrees to pay upon Closing (but not
otherwise) a brokerage commission due to Cornish and Carey Commercial for
services rendered in connection with the sale and purchase of the Property.
Seller and Purchaser shall each indemnify and hold the other harmless from and
against any and all claims of all other brokers and finders claiming by, through
or under the indemnifying party and in any way related to the sale and purchase
of the Property, this Agreement or otherwise, including, without limitation,
attorneys' fees and expenses incurred by the indemnified party in connection
with such claim.
7. DEFAULT AND REMEDIES.
7.1 Purchaser's Remedies. Notwithstanding anything to the
contrary contained in this Agreement, if Closing does not occur due to
a Seller default, then, as Purchaser's sole and exclusive remedy
hereunder and at Purchaser's option, either (a) Purchaser may terminate
this Agreement; or (b) upon notice to Seller not more than ten (10)
days after Purchaser becomes aware of such failure, and provided an
action is filed within thirty (30) days thereafter, Purchaser may seek
specific performance of this Agreement but not damages. Purchaser's
failure to seek specific performance as aforesaid shall constitute its
election to proceed under clause (a) above.
7.2 Seller's Remedies. Purchaser and Seller acknowledge
that it would be extremely impractical and difficult to ascertain the
actual damages which would be suffered by Seller if Purchaser fails to
consummate the purchase and sale contemplated herein for any reason
other than Seller's default hereunder in any material respect or the
failure of condition precedent to Purchaser's obligation to close
hereunder. Purchaser and Seller have considered carefully, the expenses
of Seller incurred in connection with the preparation of this Agreement
and Seller's performance hereunder, and the other
damages, general and special, which Purchaser and Seller realize and
recognize Seller will sustain but which Seller cannot at this time
calculate with absolute certainty. Based on all those considerations,
Purchaser and Seller have agreed that the damage to Seller in such
event would reasonably be expected to be equal to the sum of Four
Million Dollars ($4,000,000). Accordingly, if Purchaser fails to
consummate the purchase of the Property in accordance with the terms of
this Agreement solely as a result of a default by Purchaser, then
Seller shall have the right to recover Four Million Dollars
($4,000,000) as full and complete liquidated damages.
THE PARTIES FURTHER ACKNOWLEDGE AND AGREE THAT (A) PURCHASER SEEKS TO
LIMIT ITS LIABILITY UNDER THIS AGREEMENT TO THE AMOUNT OF FOUR MILLION
DOLLARS IN THE EVENT THIS AGREEMENT IS TERMINATED AND THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT DOES NOT CLOSE DUE TO A DEFAULT OF
PURCHASER UNDER THIS AGREEMENT, AND (B) THE PAYMENT OF SUCH LIQUIDATED
DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING
OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL
CODE SECTIONS 1671, 1676 AND 1677.
SELLER: __________ PURCHASER: ___________
7.3 Post-Closing Remedies. After Closing, Seller and
Purchaser shall, subject to the terms and conditions of this Agreement,
have such rights and remedies as are available at law or in equity,
except that neither Seller nor Purchaser shall be entitled to recover
from the other consequential or special damages.
8. CONDITIONS PRECEDENT.
8.1 Due Diligence. Prior to the Effective Date, Purchaser
has inspected the Property, obtained any necessary internal approvals
to the transaction, and satisfied itself as to all matters relating to
the Property, including, but not limited to, environmental,
engineering, structural, financial, title and survey matters. Prior to
the Effective Date, Seller has delivered to Purchaser, or otherwise
made available to Purchaser for Purchaser's review and approval, the
following documents and materials to the extent in Seller's actual
possession or control (excluding internal reports, appraisals,
valuations and communications prepared by or for Seller): all final
architectural drawings, final building plans and specifications,
structural reviews and engineering, soils, seismic, geologic and
architectural reports, studies and certificates relating to the
Property; all warranties, permits and certificates of occupancy
relating to the Property; and such other non-privileged or otherwise
non-proprietary books, records and files of Seller relating to the
Property as may be reasonably requested by Purchaser (all of the
foregoing collectively, "DUE DILIGENCE ITEMS").
8.2 Subdivision Condition.
(a) As a condition to Purchaser's obligation to
close hereunder, the final parcel map attached hereto as
EXHIBIT R (the "SUBDIVISION MAP") evidencing that the Property
has become a separately subdivided parcel shall have been
approved (collectively, the "SUBDIVISION CONDITION"). Seller
agrees to use reasonable and diligent efforts to pursue
satisfaction of the Subdivision Condition on or prior to the
Closing Date. Purchaser agrees to reasonably and diligently
cooperate with Seller as may be reasonably necessary for
Seller to satisfy the Subdivision Condition by the Closing
Date. Purchaser and Seller acknowledge that Purchaser has
engaged Kier & Wright Civil Engineers & Surveyors, Inc. and
Kenneth Rodrigues and Partners to create such plats and
surveys as may be required for the Subdivision Condition to be
satisfied, and Purchaser shall pay all invoices from such
third parties in connection with such work as the invoices are
received, provided all payments outstanding as of Closing
shall be paid by Purchaser at Closing.
(b) If the Subdivision Condition has not been
satisfied as of the Closing Date, then (i) this Agreement
shall be deemed automatically terminated and of no further
force and effect, and neither party shall have any further
rights or obligations under this Agreement except those which
expressly survive termination hereof and (ii) Purchaser and
Seller shall cease any efforts to satisfy the Subdivision
Condition, provided, however, Seller may, at its sole option
and (at its sole cost and expense as to costs and expenses
incurred thereafter in connection with the Subdivision Map),
continue such efforts.
8.3 Accuracy of Seller's Representations and
Warranties. As a condition to the obligations of Purchaser to
close hereunder, each of Seller's representations and
warranties set forth in Section 9.1 below shall be materially
true and correct as of the Closing.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS.
9.1 Seller's Representations and Warranties.
Subject to Section 9.3 below, Seller hereby represents and
warrants to Purchaser as to the following matters, as of the
date of this Agreement:
9.1.1 Organization and Authority. Seller
is duly organized and in good standing under the laws
of the state of its organization. Seller has the
power and authority under its organizational
documents to sell, transfer, convey and deliver the
Property to be sold and purchased hereunder, and all
action and approvals required thereunder have been
duly taken and obtained.
9.1.2 No Conflict. The execution and
delivery of this Agreement, the consummation of the
transactions provided for herein and the fulfillment
of the terms hereof will not result in a breach of
any of the terms or provisions of, or constitute a
default under, any provision of Seller's
organizational documents.
9.1.3 Condemnation. Seller has not received from
any governmental authority any written notice of any pending
or threatened condemnation of the Property or any part
thereof.
9.1.4 Litigation. Seller has not been served with
any litigation which is still pending against Seller with
respect to its ownership or operation of the Property.
9.1.5 Compliance. Seller has not received from any
governmental authority any written notice of any current
violation by the Property of any municipal, state and federal
and other governmental statutes, rules, requirements,
regulations, laws and ordinances, including zoning ordinances
and regulations, and covenants, easements and restrictions of
record governing and relating to use (as general office and
administrative, and communications laboratory purposes),
occupancy or possession of the Property, or to the use,
storage generation or disposal of hazardous or toxic materials
or substances (all of the foregoing collectively,
"REGULATIONS") applicable to the Property, except with respect
to violations resulting from acts or omissions of Purchaser,
its employees or agents, copies of which have been provided to
Purchaser. Except with respect to violations resulting from
acts or omissions of Purchaser (copies of which have been
provided to Purchaser), its employees or agents, Seller is in
compliance with any past notices of past violations of
Regulations.
9.1.6 No Leases. There are no leases, licenses or
occupancy agreement in effect with respect to the Property
(excluding any by, through or under Purchaser) other than the
Lease.
9.1.7 Due Diligence Items. To Seller's Knowledge:
all Due Diligence Items in Seller's possession or control
which disclose information that materially affects the
Property have been provided to Purchaser, all of the Due
Diligence Items provided as copies are correct and complete
copies of the original of such items, and none of the Due
Diligence Items provided to Buyer has been amended, modified
or terminated by Seller except as disclosed in writing to
Purchaser.
When used in this Agreement, the term "Seller's
Knowledge" shall mean and be limited to the actual (and not
constructive) knowledge of Jonel Porta and John Petersen,
without inquiry other than a review of Seller's files with
respect to the Property.
9.1.8 Contracts. There are no contracts or
agreements relating to the ownership, operation and
maintenance of the Property that will be binding upon
Purchaser after the Closing.
9.2 Purchaser's Representations and Warranties. Subject
to Section 9.5 below, Purchaser represents and warrants that:
9.2.1 ERISA. Purchaser's rights under this
Agreement, the assets it shall use to acquire the Property
and, upon its acquisition by Purchaser, the Property itself,
do not and shall not constitute plan assets within the meaning
of 29 C.F.R. Section 2510.3-101, and Purchaser is not a
"governmental plan" within the meaning of section 3(32) of the
Employee Retirement Income Security Act of 1974, as amended,
and the execution of this Agreement and the purchase of the
Property by Purchaser is not subject to state statutes
regulating investments of and fiduciary obligations with
respect to governmental plans.
9.2.2 Organization and Authority. Purchaser is
duly organized and in good standing under the laws of the
state of its organization. Purchaser has the power and
authority under its organizational documents to perform its
obligations hereunder, and all action and approvals required
thereunder have been duly taken and obtained.
9.2.3 No Conflict. The execution and delivery of
this Agreement, the consummation of the transactions provided
for herein and the fulfillment of the terms hereof will not
result in a breach of any of the terms or provisions of, or
constitute a default under, any provision of Purchaser's
organizational documents.
9.2.4 No Bankruptcy Purchaser has not (i) made a
general assignment for the benefit of creditors, (ii) filed
any voluntary petition in bankruptcy or suffered the filing of
any involuntary petition by Purchaser's creditors, (iii)
suffered the appointment of a receiver to take possession of
all, or substantially all, of Purchaser's assets, (iv)
suffered the attachment or other judicial seizure of all, or
substantially all, of Purchaser's assets, (v) admitted in
writing its inability to pay its debts as they come due, or
(vi) made an offer of settlement, extension or composition to
its creditors generally.
9.3 Survival. Purchaser's right to enforce the
representations and warranties set forth in Section 9.1, shall survive
the Closing, but only as to claims of which Purchaser notifies Seller
in writing within six (6) months after Closing and brings legal action
to enforce within one (1) year of Closing, and not otherwise. Seller's
right to enforce the representations and warranties set forth in
Section 9.2 shall survive the Closing, provided Subsections 9.2.2 and
9.2.3 shall only survive the Closing as to claims of which Seller
notifies Purchaser in writing within six (6) months after Closing, and
brings legal action to enforce within one (1) year and not otherwise.
10. LIMITATION OF LIABILITY. Notwithstanding anything to the
contrary contained herein, if the Closing shall have occurred (and Purchaser
shall not have waived, relinquished or released any applicable rights in further
limitation), the aggregate liability of Seller arising pursuant to or in
connection with the representations, warranties, indemnifications, covenants or
other obligations (whether express or implied) of Seller under this Agreement
(or any document executed or delivered in connection herewith) shall not exceed
Four Million Dollars ($4,000,000.00) (the "LIABILITY LIMITATION"). No
constituent partner or member in or agent of Seller, nor any advisor, trustee,
director, officer, member, partner, employee,
beneficiary, shareholder, participant, representative or agent of any entity
that is or becomes a constituent partner or member in Seller or an agent of
Seller (including, but not limited to, EOP Operating Limited Partnership, Equity
Office Properties Trust and Equity Office Management L.L.C.) ("SELLER'S
AFFILIATES") shall have any personal liability, directly or indirectly, under or
in connection with this Agreement or any agreement made or entered into under or
pursuant to the provisions of this Agreement, or any amendment or amendments to
any of the foregoing made at any time or times, heretofore or hereafter, and
Purchaser and its successors and assigns and, without limitation, all other
persons and entities, shall look solely to Seller's assets for the payment of
any claim or for any performance, and Purchaser, on behalf of itself and its
successors and assigns, hereby waives any and all such personal liability
Notwithstanding anything to the contrary contained in this Agreement, neither
the negative capital account of any constituent partner or member in Seller, nor
any obligation of any constituent partner or member in any entity owning an
interest (directly or indirectly) in Seller to restore a negative capital
account or to contribute capital to Seller (or any entity owning an interest,
directly or indirectly, in any other constituent partner or member of Seller),
shall at any time be deemed to be the property or an asset of Seller or any such
other partner or member (and neither Purchaser nor any of its successors or
assigns shall have any right to collect, enforce or proceed against or with
respect to any such negative capital account of such party's obligations to
restore or contribute). No advisor, trustee, director, officer, member, partner,
employee, beneficiary, shareholder, participant, representative or agent of
Purchaser or of any entity that is or becomes a member or an agent of Purchaser
("PURCHASER'S AFFILIATES") shall have any personal liability, directly or
indirectly, under or in connection with this Agreement or any agreement made or
entered into under or pursuant to the provisions of this Agreement, or any
amendment or amendments to any of the foregoing made at any time or times,
heretofore or hereafter, and Seller and its successors and assigns and, without
limitation, all other persons and entities, shall look solely to Purchaser's
assets for the payment of any claim or for any performance, and Seller, on
behalf of itself and its successors and assigns, hereby waives any and all such
personal liability. The provisions of this Section 10 shall survive the Closing
and any termination of this Agreement.
11. MISCELLANEOUS.
11.1 Entire Agreement. All understandings and agreements
heretofore had between Seller and Purchaser with respect to the
Property are merged in this Agreement, which, together with the
exhibits hereto and that certain Confidentiality Agreement dated as of
August 8, 2003, by and between Seller and Brocade Communications
Systems, Inc. (the "CONFIDENTIALITY AGREEMENT"), fully and completely
expresses the agreement of the parties. Purchaser acknowledges that it
has inspected the Property and that it accepts the same in its "as is"
condition subject to use, ordinary wear and tear and natural
deterioration. Purchaser further acknowledges that, except as expressly
provided in this Agreement, neither Seller nor any agent or
representative of Seller has made, and Seller is not liable for or
bound in any manner by, any express or implied warranties, guaranties,
promises, statements, inducements, representations or information
pertaining to the Property.
11.2 Assignment. Except as provided in Section 11.12
below, neither this Agreement nor any interest hereunder shall be
assigned or transferred by Purchaser
without Seller's consent; provided, however, that no such consent shall
be required with respect to Purchaser's assignment of its right to
purchase the Property under this Agreement to an entity wholly owned,
directly or indirectly, by Purchaser; provided that upon any such
assignment permitted hereunder, the Purchaser named herein shall not be
released from liability to Seller for the performance of "Purchaser's"
obligations hereunder. Seller may assign or otherwise transfer its
interest under this Agreement. As used in this Agreement, the term
"SELLER" shall be deemed to include any assignee or other transferee of
any Seller. Upon any such transfer by a Seller, such Seller shall be
relieved of any subsequently accruing liability under this Agreement.
Subject to the foregoing, this Agreement shall inure to the benefit of
and shall be binding upon Seller and Purchaser and their respective
successors and assigns.
11.3 Modifications. This Agreement shall not be modified
or amended except in a written document signed by Seller and Purchaser.
11.4 Time of Essence. Time is of the essence of this
Agreement. In the computation of any period of time provided for in
this Agreement or by law, the day of the act or event from which the
period of time runs shall be excluded, and the last day of such period
shall be included, unless it is a Saturday, Sunday, or legal holiday,
in which case the period shall be deemed to run until the end of the
next day which is not a Saturday, Sunday, or legal holiday.
11.5 Governing Law. This Agreement shall be governed and
interpreted in accordance with the laws of the state in which the
Property is located.
11.6 Notices. All notices, requests, demands or other
communications required or permitted under this Agreement shall be in
writing and delivered personally, by facsimile transmission with
confirmed receipt, or by overnight courier (such as Federal Express),
addressed as follows below. All notices given in accordance with the
terms hereof shall be deemed given when received or upon refusal of
delivery. Either party hereto may change the address for receiving
notices, requests, demands or other communication by notice sent in
accordance with the terms of this Section 11.6.
If to Seller:
c/o Equity Office Properties Trust
Two North Riverside Plaza, Suite 2100
Chicago, Illinois 60606
Attention: Ross Satterwhite
Telephone: 312/466-3522
Facsimile: 312/559-5095
With a copy to:
c/o Equity Office Properties Trust
Two North Riverside Plaza, Suite 2100
Chicago, Illinois 60606
Attention: Jeff Arnold
Telephone: 312/466-3225
Facsimile: 312/559-5209
and
Neal, Gerber & Eisenberg, LLP
2 North LaSalle Street, Suite 2100
Chicago, Illinois 60602
Attention: Douglas J. Lubelchek, Esq.
Telephone: 312/269-5255
Facsimile: 312/269-1747
If to Purchaser:
Real Estate & Facilities
Brocade Communications, Inc.
1745 Technology Service
San Jose, California 95110
Attention: Wendi Pauli
Telephone: 408/333-8759
Facsimile: 408/333-5955
With a copy to:
Ellman, Burke, Hoffman & Johnson
One Ecker Building, Suite 200
San Francisco, California 94105
Attention: Jodi B. Fedor
Telephone: 415/777-2727
Facsimile: 415/495-7587
11.7 "AS IS" SALE. ACKNOWLEDGING PURCHASER'S PRIOR
OCCUPANCY OF THE PROPERTY AS A TENANT AND PURCHASER'S OPPORTUNITY TO
INSPECT THE PROPERTY, BUT SUBJECT TO THE EXPRESS REPRESENTATIONS AND
WARRANTIES PROVIDED BY SELLER IN THIS AGREEMENT, PURCHASER AGREES TO
TAKE THE PROPERTY "AS-IS," "WHERE-IS," AND WITH ALL FAULTS AND
CONDITIONS THEREON. ANY INFORMATION, REPORTS, STATEMENTS, DOCUMENTS OR
RECORDS (COLLECTIVELY, THE "DISCLOSURES") PROVIDED OR MADE TO PURCHASER
OR ITS CONSTITUENTS BY SELLER OR ANY OF SELLER'S AFFILIATES CONCERNING
THE CONDITION OF THE PROPERTY SHALL NOT BE REPRESENTATIONS OR
WARRANTIES. PURCHASER SHALL NOT RELY ON SUCH DISCLOSURES, BUT RATHER,
PURCHASER SHALL RELY ONLY ON ITS OWN INSPECTION OF THE PROPERTY.
PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN
THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY
DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS,
AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR
WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT
TO (A) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (B) THE INCOME TO BE
DERIVED FROM THE PROPERTY, (C) THE SUITABILITY OF THE PROPERTY FOR ANY
AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY CONDUCT THEREON, (D)
THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS,
RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY; (E) THE HABITABILITY, MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OF THE PROPERTY; OR (F) ANY OTHER MATTER WITH
RESPECT TO THE PROPERTY, AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS
REGARDING TERMITES OR WASTES, AS DEFINED BY THE U.S. ENVIRONMENTAL
PROTECTION AGENCY REGULATIONS AT 40 C.F.R., OR ANY HAZARDOUS SUBSTANCE,
AS DEFINED BY THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND
LIABILITY ACT OF 1980 ("CERCLA"), AS AMENDED, AND REGULATIONS
PROMULGATED THEREUNDER. PURCHASER, ITS SUCCESSORS AND ASSIGNS, HEREBY
WAIVE, RELEASE AND AGREE NOT TO MAKE ANY CLAIM OR BRING ANY COST
RECOVERY ACTION OR CLAIM FOR CONTRIBUTION OR OTHER ACTION OR CLAIM
AGAINST SELLER OR SELLER'S AFFILIATES, AND BASED ON (A) ANY FEDERAL,
STATE, OR LOCAL ENVIRONMENTAL OR HEALTH AND SAFETY LAW OR REGULATION,
INCLUDING CERCLA OR ANY STATE EQUIVALENT, OR ANY SIMILAR LAW NOW
EXISTING OR HEREAFTER ENACTED, (B) ANY DISCHARGE, DISPOSAL, RELEASE, OR
ESCAPE OF ANY CHEMICAL, OR ANY MATERIAL WHATSOEVER, ON, AT, TO OR FROM
THE PROPERTY, OR (C) ANY ENVIRONMENTAL CONDITIONS WHATSOEVER ON OR
UNDER THE PROPERTY, OTHER THAN ENVIRONMENTAL CONDITIONS RESULTING FROM
MIGRATION OR MATERIALS FROM OTHER PROPERTY OWNED OR OPERATED BY SELLER
OR SELLER'S AFFILIATES AND FIRST BEING PRESENT ON OR UNDER THE PROPERTY
AFTER CLOSING. PURCHASER REPRESENTS TO SELLER THAT, SUBJECT TO THE
EXPRESS REPRESENTATIONS AND WARRANTIES PROVIDED BY SELLER IN THIS
AGREEMENT, PURCHASER HAS CONDUCTED, OR WILL CONDUCT PRIOR TO CLOSING,
SUCH INVESTIGATIONS OF THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, THE
PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS PURCHASER DEEMS
NECESSARY OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE
PROPERTY AND THE EXISTENCE OR NONEXISTENCE OR CURATIVE ACTION TO BE
TAKEN WITH RESPECT TO ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR
DISCHARGED FROM THE PROPERTY, AND WILL RELY SOLELY UPON SAME AND NOT
UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF SELLER OR ITS AGENTS
OR EMPLOYEES WITH RESPECT THERETO. UPON CLOSING, PURCHASER SHALL ASSUME
THE RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO,
CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL AND
ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY PURCHASER'S
INVESTIGATIONS, AND PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE
WAIVED, RELINQUISHED AND RELEASED SELLER AND SELLER'S AFFILIATES FROM
AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING
CAUSES OF ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND
EXPENSES (INCLUDING ATTORNEYS' FEES) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR
ALLEGED AGAINST SELLER AND SELLER'S AFFILIATES AT ANY TIME BY REASON OF
OR ARISING OUT OF ANY LATENT OR PATENT CONSTRUCTION DEFECTS OR PHYSICAL
CONDITIONS AT THE PROPERTY, VIOLATIONS OF ANY APPLICABLE LAWS AND ANY
AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS
REGARDING THE PROPERTY, PROVIDED SUCH RELEASE SHALL NOT APPLY TO
CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF ACTION IN TORT),
LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS'
FEES) AGAINST SELLER OR SELLER'S AFFILIATES EITHER (i) PURSUANT TO OR
ARISING OUT OF ANY SEPARATE AGREEMENT WITH PURCHASER OR (ii) IN THEIR
CAPACITY AS OWNER OR OPERATOR OF PROPERTY OTHER THAN THE PROPERTY, TO
THE EXTENT SUCH CLAIMS, DEMANDS, CAUSES OF ACTION (INCLUDING CAUSES OF
ACTION IN TORT), LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES
(INCLUDING ATTORNEYS' FEES) RELATE TO ENVIRONMENTAL CONDITIONS FIRST
BEING PRESENT ON OR UNDER THE PROPERTY AFTER CLOSING.
TO THE EXTENT OF PURCHASER'S RELEASE OF SELLER
PURSUANT TO THIS AGREEMENT, PURCHASER EXPRESSLY WAIVES ALL
RIGHTS UNDER CALIFORNIA CIVIL CODE SECTION 1542, AS AMENDED OR
MODIFIED, 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."
PURCHASER HEREBY SPECIFICALLY ACKNOWLEDGES THAT
PURCHASER HAS CAREFULLY REVIEWED THIS SUBSECTION, AND
DISCUSSED ITS IMPORT WITH LEGAL COUNSEL, IS FULLY AWARE OF ITS
CONSEQUENCES, AND THAT THE PROVISIONS OF THIS SUBSECTION ARE A
MATERIAL PART OF THIS AGREEMENT; PROVIDED, HOWEVER, SUCH
RELEASE, WAIVER OR DISCHARGE SHALL NOT APPLY AND SHALL BE OF
NO
FORCE OR EFFECT FOR ANY CLAIMS ARISING OUT OF SELLER'S FRAUD.
___________________________ ___________________________
SELLER'S INITIALS PURCHASER'S INITIALS
THE PROVISIONS OF THIS SECTION 11.7 SHALL SURVIVE THE CLOSING AND ANY
TERMINATION OF THIS AGREEMENT.
11.8 Trial by Jury. In any lawsuit or other proceeding
initiated by Purchaser under or with respect to this Agreement,
Purchaser waives any right it may have to trial by jury. In addition,
Purchaser waives any right to seek rescission of the transaction
provided for in this Agreement.
11.9 Confidentiality. Except as may be required in
connection with the satisfaction of the Subdivision Condition and the
other matters contemplated by this Agreement, without the prior written
consent of the other party, both Purchaser and Seller shall comply with
the Confidentiality Agreement, except that the provisions of Paragraph
19 of the Confidentiality Agreement shall apply equally to both Seller
and Purchaser. The Confidentiality Agreement and the terms and
conditions thereof shall survive a termination of this Agreement
without Closing but shall terminate upon a Closing.
11.10 Reports. If for any reason Purchaser does not
consummate the Closing (other than due to a Seller default), then
Purchaser shall, upon Seller's written request, assign and transfer to
Seller all of its right, title and interest in and to any and all
studies, reports, surveys and other information, data and/or documents
relating to the physical condition of the Property or any part thereof
prepared by third parties at the request of Purchaser, its employees
and agents, and shall deliver to Seller copies of all of the foregoing
upon Seller's reimbursement to Purchaser of all costs paid by Purchaser
to third parties who prepared any such items; provided, however, that
the foregoing shall not apply to any internal studies, reports, budgets
or projections, nor to any other information or documentation
determined by Purchaser to be confidential or privileged.
11.11 Reporting Person. Seller and Purchaser hereby
designate Escrow Agent to act as and perform the duties and obligations
of the "reporting person" with respect to the transaction contemplated
by this Agreement for purposes of 26 C.F.R. Section 1.6045-4(e)(5)
relating to the requirements for information reporting on real estate
transaction closed on or after January 1, 1991. In this regard, Seller
and Purchaser each agree to execute at Closing, and to cause Escrow
Agent to execute at Closing, a Designation Agreement, designating
Escrow Agent as the reporting person with respect to the transaction
contemplated by this Agreement.
11.12 Section 1031 Exchange. Either party may structure the
disposition or acquisition of the Property, as the case may be, as a
like-kind exchange under Internal Revenue Code Section 1031 at the
exchanging party's sole cost and expense, provided that the time
periods provided in this Agreement (including, without limitation, the
Closing Date) shall not be delayed or otherwise affected. The other
party shall reasonably cooperate therein, provided that such other
party shall incur no material costs, expenses or liabilities in
connection with the exchanging party's exchange. If either party uses a
qualified intermediary to effectuate an exchange, any assignment of the
rights or obligations of such party hereunder shall not relieve,
release or absolve such party of its obligations to the other party.
The exchanging party shall indemnify, defend and hold harmless the
other party from all liability in connection with the indemnifying
party's exchange, and the indemnified party shall not be required to
take title to or contract for the purchase of any other property. The
provisions of this Section 11.12 shall survive the Closing.
11.13 Press Releases. The parties hereto shall not issue
any press releases with respect to the transactions contemplated hereby
or consummated in accordance with the terms hereof except as required
by law (including, without limitation, in connection with SEC
requirements and filings) or upon the mutual agreement of the parties
as to the form and content of such press release (with consent not to
be unreasonably withheld or delayed by either party).
11.14 Counterparts. This Agreement may be executed in any
number of identical counterparts, any or all of which may contain the
signatures of less than all of the parties, and all of which shall be
construed together as but a single instrument.
11.15 Construction. This Agreement shall not be construed
more strictly against Seller merely by virtue of the fact that the same
has been prepared by Seller or its counsel, it being recognized both of
the parties hereto have contributed substantially and materially to the
preparation of this Agreement.
11.16 Attorneys' Fees. In the event of legal proceedings
between the parties with respect to this Agreement or the transaction
contemplated hereby, the prevailing party therein shall be entitled to
recover from the losing party all of its costs of enforcement and such
legal proceedings, including, but not limited to, its reasonable
attorneys' and paralegal fees, witness fees, court reporters' fees and
other costs of suit.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized representatives as of the date first above written.
SELLER: EOP-Skyport I, L.L.C., a Delaware limited liability
company
By: EOP Operating Limited Partnership, a
Delaware limited partnership, its sole member
By: Equity Office Properties Trust, a Maryland
real estate investment trust, its general
partner
By: /s/ Jeffrey S. Arnold
--------------------------------------
Name: Jeffrey S. Arnold
Title: Vice President - Legal
PURCHASER: Brocade Communications Systems, Inc.,
a Delaware corporation
By: /s/ Antonio Canova
----------------------------------------------
Name: Antonio Canova
Title: CFO