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Agreement For Purchase And Exchange Dated 03-09-99

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Sectors: Real Estate
Governing Law: California , View California State Laws
Effective Date: March 09, 1999
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Exhibit 10.3


AGREEMENT FOR PURCHASE AND SALE


March 9, 1999 2


TABLE OF CONTENTS


PAGE ARTICLE 1 BASIC DEFINITIONS............................................. 1


ARTICLE 2 PURCHASE AND EXCHANGE......................................... 4


ARTICLE 3 CONDITIONS PRECEDENT.......................................... 12


ARTICLE 4 COVENANTS, WARRANTIES AND REPRESENTATIVES..................... 14


ARTICLE 5 DEPOSIT; DEFAULT.............................................. 23


ARTICLE 6 CLOSING....................................................... 29


ARTICLE 7 MISCELLANEOUS................................................. 39


3


List of Exhibits


* Exhibit A-1 -- Transferors & Properties (Sale Properties) * Exhibit A-2 -- Transferors & Properties (Exchange Properties) * Exhibit B -- Confirmation Letter * Exhibit C -- Disclosure Materials List & Statement * Exhibit D -- Title Allocations * Exhibit E -- Rent Rolls * Exhibit F -- Intentionally Omitted * Exhibit G -- Title Exceptions * Exhibit G-1 -- Excluded Exceptions * Exhibit G-2 -- Title Documents to be Obtained * Exhibit H-1 -- Allocated Price (Sale Properties) * Exhibit H-2 -- Allocated Price (Exchange Properties) * Exhibit I -- Transfer Documents * Exhibit J -- Press Release * Exhibit K -- Title Affidavit * Exhibit L -- Excluded Claims * Exhibit M -- [Intentionally Omitted] * Exhibit N -- Investigation Matters * Exhibit N-1 -- Credit Calculation Example * Exhibit O -- Indemnity Agreements * Exhibit P -- Year 2000 Action * Exhibit Q -- Insured Properties * Exhibit R -- Southwest Pavillion Property * Exhibit S -- Vacant Space * Exhibit T-1 -- Audit Documents * Exhibit T-2 -- Audit Certificate * Exhibit U-1 -- Assigned Insurance Property * Exhibit U-2 -- Assigned Insurance * Exhibit U-3 -- No Further Action Properties * Exhibit U-4 -- Access and Remediation Agreement * Exhibit V -- Agreements * Exhibit W -- Litigation 4
AGREEMENT FOR PURCHASE AND EXCHANGE


THIS AGREEMENT FOR PURCHASE AND EXCHANGE is made and entered into as of March 9, 1999, by and among AMB PROPERTY, L.P., a Delaware limited partnership ("AMBLP"), AMB PROPERTY II, L.P., a Delaware limited partnership ("AMB II" and AMBLP are, collectively, as to the properties described on Exhibit A-2, the "Exchangors," and as to the properties described on Exhibit A-1, the "Sellers" and, together, the "Transferors"), and BPP RETAIL, LLC, a Delaware limited liability company ("Buyer"). Transferors and their respective interests in the Properties (as defined below) are identified more precisely on Exhibit A to this Agreement.


RECITALS


A. The Sellers, either directly or indirectly (with certain Third Parties (as herein defined)), hold ownership of a portfolio of properties listed on Exhibit A-1 to this Agreement and defined below with greater specificity as the "Sale Properties."


B. The Exchangors, either directly or indirectly (with certain Third Parties (as herein defined)), hold ownership of a portfolio of properties listed on Exhibit A-2 to this Agreement and defined below with greater specificity as the "Exchange Properties."


C. Buyer desires to acquire and each of Exchangors desires to transfer, subject to the terms and conditions contained in this Agreement, the entirety of its right, title and interest in the Exchange Properties.


D. Buyer desires to acquire and each of Sellers desires to sell, subject to the terms and conditions contained in this Agreement, the entirety of its right, title and interest in the Sale Properties.


AGREEMENT


NOW, THEREFORE, Buyer and Transferors do hereby agree as follows:


ARTICLE 1
BASIC DEFINITIONS


"Additional Exceptions" shall have the meaning set forth in Section 2.6(a).


"Additional Title Exception Notice" shall have the meaning set forth in Section 2.6(b).


"Allocated Price" shall refer, as to each Sale Property, to the portion of the Sale Purchase Price allocated to such Sale Property as set forth on Exhibit H-1 to this Agreement, and as to each Exchange Property, to the portion of the Exchange Price allocated to such Exchange Property as set forth on Exhibit H-2 to this Agreement.


"Closing Date" shall mean December 1, 1999 (as such date may be deferred with respect to a particular Property pursuant to the terms of this Agreement); provided, that Transferors shall


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have the right to extend the Closing Date for up to twenty (20) days, upon not less than ten (10) business days notice prior to the original Closing Date.


"Confirmation Letter" shall mean the letter in the form attached as Exhibit B to this Agreement to be delivered by Buyer to Transferors on or prior to the close of the prescribed Confirmation Period pursuant to Section 3.2 below.


"Confirmation Period" shall mean the period commencing on the date of this Agreement, and ending at 5:00 p.m., California time on April 8, 1999, provided that the Confirmation Period may end earlier at Buyer's election upon delivery by Buyer to Transferors of the Confirmation Letter (representing the conclusive waiver by Buyer of any further Confirmation Period).


"Contract Period" shall mean the period from the date of this Agreement through and including the Closing Date (as the same may be extended pursuant to this Agreement).


"Contracts" shall mean all maintenance, service and other operating contracts, equipment leases and other arrangements or agreements to which any Transferors is a party affecting the ownership, repair, maintenance, management, leasing or operation of the Properties.


"Deferred Property" shall have the meaning set forth in Section 2.5(d) below.


"Deleted Property" shall have the meaning set forth in Section 2.5(d) below.


"Disclosure Materials" shall mean those materials described in Section A of the Disclosure Materials List & Statement to which Buyer has been afforded access and review rights prior to the date of this Agreement.


"Disclosure Materials List & Statement" shall mean the statement set forth as Exhibit C to this Agreement.


"Exchange Price" shall have the meaning set forth in Section 2.2(b) below.


"Exchange Property" shall mean, with respect to each of the Properties described on Exhibit A-2, the Real Property, the Personal Property and the Intangible Property. Collectively, such Properties shall be referred to as the "Exchange Properties."


"Financial Statements" shall mean the historical income and expense statements for the Properties for calendar years 1997 and 1998 (or such shorter period as Transferors may have owned an applicable Property), which have been provided to Buyer.


"Hazardous Materials" shall mean any substances, materials, wastes, pollutants or contaminants defined or listed in or subject to reporting, investigation, permitting, remediation, licensing or other regulatory requirements under any environmental laws or regulations, including, without limitation, any inflammable explosives, radioactive materials, asbestos, polychlorinated biphenyls, trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents, petroleum products and by-products and other substances with toxic or hazardous characteristics.


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"Improvements" shall mean, as to each of the properties listed on Exhibit A, the right, title and interest of the Transferors in ownership of such property in any and all structures, buildings, facilities, parking areas or other improvements situated on such property's Land and all related fixtures, improvements, building systems and equipment (including, without limitation, HVAC, security and life safety systems).


"Intangible Property" shall mean, as to each Real Property, the right, title and interest of the Transferors in ownership of such Real Property in: (a) any and all permits, entitlements, filings, building plans, specifications and working drawings, certificates of occupancy, operating permits, sign permits, development rights and approvals, certificates, licenses, warranties and guarantees, engineering, soils, pest control, survey, environmental, appraisal, market and other reports relating to such Real Property and associated Personal Property; (b) all trade names, service marks, tenant lists, advertising materials and telephone exchange numbers identified with such Real Property; (c) the Contracts and the Leases; (d) except as set forth on Exhibit L attached hereto (the "Excluded Claims"), claims, awards, actions, remedial rights and judgments, and escrow accounts relating to environmental remediation, to the extent relating to such Real Property and associated Personal Property; (e) all books, records, files and correspondence relating to such Real Property and associated Personal Property; (f) to the extent assignable, the agreements listed on Exhibit V attached hereto, including all purchase options, rights of first refusal or first opportunity to purchase and similar rights contained therein; and (g) all other transferable intangible property, miscellaneous rights, benefits or privileges of any kind or character with respect to such Real Property and associated Personal Property, including, without limitation, under any REAs, provided that the Intangible Property shall not include any Transferor's name or any right to the reference "AMB".


"Investigation Matters" shall have the meaning set forth in Section 2.4(a) below.


"Joint Venture" shall have the meaning set forth in Section 2.7 below.


"Land" shall mean, as to each of the properties listed on Exhibit A, the land component of the property as described with precision in the Title Policies.


"Leases" shall mean, as to each Real Property, all leases, concession agreements, rental agreements or other agreements (including all amendments or modifications thereto) which entitle any person to the occupancy or use of any portion of the Real Property.


"Material Adverse Matters Amount" shall refer, as to any Property, to the amount, if any, as to which Buyer claims a credit against the Price with respect to an Investigation Matter pursuant to Section 2.5 and Exhibit N attached hereto.


"Permitted Exceptions" shall mean the various matters affecting title to the Properties that are approved or deemed approved by Buyer pursuant to Section 2.6 below.


"Personal Property" shall mean, as to each Real Property, all furniture, furnishings, trade fixtures and other tangible personal property directly or indirectly owned by the Transferors in ownership of such Real Property that is located at and used exclusively in connection with the operation of any Real Property.


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"Price" shall mean the Sale Purchase Price and the Exchange Price, collectively.


"Property" shall mean, with respect to each of the properties described on Exhibit A, the Real Property, the Personal Property and the Intangible Property. Collectively, such properties shall be referred to as the "Properties."


"Real Property" shall mean, as to each property listed on Exhibit A, the Land, the Improvements and all of Transferor's right, title and interest in and to the rights, privileges, easements, and appurtenances to the Land or the Improvements, including, without limitation, any air, development, water, hydrocarbon or mineral rights held by any Transferors, all licenses, easements, rights-of-way, claims, rights or benefits, covenants, conditions and servitude and other appurtenances used or connected with the beneficial use or enjoyment of the Land or the Improvements and all rights or interests relating to any roads, alleys or parking areas adjacent to or servicing the Land or the Improvements.


"REAs" shall have the meaning set forth in Section 4.1(b)(viii) below.


"Rent Rolls" shall refer to the information schedules attached as Exhibit E to this Agreement pertaining to the Leases.


"Sale Property" shall mean, with respect to each of the Properties described on Exhibit A-1, the Real Property, the Personal Property and the Intangible Property. Collectively, such Properties shall be referred to as the "Sale Properties."


"Sale Purchase Price" shall have the meaning set forth in Section 2.2(a) below.


"Surveys" shall refer to Transferors' existing surveys with respect to the Properties which have been delivered by Transferors to Buyer.


"Third Party" or "Third Parties" shall have the meaning set forth in Section 2.7 below.


"Title Company" shall mean Chicago Title Company; Attn: Pat Davisson (Telephone: (415) 788-0871).


"Title Policies" shall refer to Transferors' existing title insurance policies with respect to the Properties, complete copies of which have been made available by Transferors to Buyer.


"1031 Exchange" shall have the meaning set forth in Section 6.6 below.


ARTICLE 2
PURCHASE AND EXCHANGE


SECTION 2.1 Purchase and Transfer. Exchangors agree to transfer the Exchange Properties to Buyer by means of one or more 1031 Exchanges, and Buyer agrees to acquire the Exchange Properties upon all of the terms, covenants and conditions set forth in this Agreement. In furtherance of exchange, Buyer agrees to cooperate in such 1031 Exchanges pursuant to and as provided in Section 6.6 below. Sellers agree to sell the Sale Properties to Buyer and Buyer


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agrees to purchase or cause to be purchased the Sale Properties upon all of the terms, covenants and conditions set forth in this Agreement.


SECTION 2.2 Price.


(a) The aggregate purchase price for the Sale Properties (the "Sale Purchase Price") shall be the sum of Twelve Million Seven Hundred Fourteen Thousand Dollars (U.S. $12,714,000), subject to adjustment in accordance with Sections 2.3 [Adjustments], 6.3 [Prorations] and 6.9 [Completion Events] below. The entire amount of the Sale Purchase Price so adjusted shall be payable by Buyer to Sellers in cash on the Closing Date through the escrow described in Section 6.1 below.


(b) The aggregate price for the Exchange Properties (the "Exchange Price") shall be the sum of One Hundred Twelve Million One Hundred Nineteen Thousand Dollars (U.S. $112,119,000), subject to adjustment in accordance with Sections 2.3 [Adjustments], 6.3 [Prorations] and 6.9 [Completion Events] below. The entire amount of the Exchange Price so adjusted shall be payable by Buyer to one or more exchange facilitators selected by Exchangors in their sole discretion, in furtherance of one or more 1031 Exchanges, through payment in cash of the entire balance of the Exchange Price on the Closing Date through one or more escrows described in Section 6.1 below.


SECTION 2.3 Adjustments. In addition to the prorations and credits contemplated by Section 6.3 below, (a) the Price shall be decreased by the aggregate amount of the Allocated Prices of any Deleted Properties, (b) the portion of the Price payable on the Closing Date shall be reduced by the Allocated Price of any Deferred Properties, and (c) the Price shall be decreased by the aggregate amount of any adjustments effected pursuant to Sections 2.5 and 2.6 below.


SECTION 2.4 Buyer's Review and Transferors' Disclaimer.


(a) Buyer acknowledges that Transferors have afforded Buyer and its agents and representatives an opportunity to review all of the Disclosure Materials prior to the date of this Agreement and, subject to the express terms of this Agreement, that Buyer has completed such review to its satisfaction. Buyer has assumed fully the risk that Buyer has failed completely and adequately to review and consider any or all of such materials. But for Buyers' expression of satisfaction with the content of the Disclosure Materials, Buyer would not have entered into this Agreement; but for Buyer's expression of such satisfaction and assumption of any risk as to the character of its review and consideration of the Disclosure Materials, Transferors would not have entered into this Agreement. Nevertheless, during the Confirmation Period, Buyer shall be permitted to make a further review of information relating solely to the matters described on Exhibit N attached hereto (the "Investigation Matters") to determine whether any Material Adverse Matters Amounts exist with respect to the Properties and the extent of any such Material Adverse Matters Amount. Following the Confirmation Period, Buyer shall have no further right of inspection and review with respect to the Properties except solely for the purpose of assisting Buyer in its management transition as provided in Sections 4.2(m) and (o) and Section 6.10. The rights and obligations of the parties arising out of Buyer's determination and assertion prior to the close of the Confirmation Period that such Material Adverse Matters Amounts do exist shall


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be limited and solely governed by the provisions of Section 2.5 below and Exhibit N attached hereto.


(b) Buyer's exercise of the rights of review and confirmation set forth in subsection (a) shall be subject to the following limitations: (i) any entry onto any Property by Buyer, its agents or representatives, shall be during normal business hours, following not less than 24 hours' prior notice to Transferors and, at Transferors' discretion, accompanied by a representative of Transferors; (ii) Buyer shall not conduct any drilling, test borings or other disturbance of any Property for review of soils, compaction, environmental, structural or other conditions without Transferors' prior written consent (which may be withheld in Transferor's sole and absolute discretion); (iii) any discussions or interviews with any third party, any partner of any Transferors, any tenants of a Property or their respective personnel, at Transferors' election, shall be conducted in the presence of Transferors or their representatives; (iv) any discussions or interviews with employees at any Property shall be limited to designated senior employees and, at Transferors' election, shall be conducted in the presence of Transferors or their representatives; (v) Buyer shall exercise reasonable diligence not to disturb the use or occupancy or the conduct of business at any Property; (vi) prior to any entry upon the Property by Buyer or any of its agents, representatives or consultants for the purpose of conducting any inspections, investigations or tests, Buyer shall deliver to Transferors a certificate of insurance evidencing that Buyer carries a liability insurance policy in an amount not less than $5,000,000, which liability insurance policy names each Transferors as an additional insured; and (vii) Buyer shall indemnify, defend and hold Transferors harmless from all loss, cost, and expense relating to personal injury or property damage resulting from any entry or inspections performed by Buyer, its agents or representatives. Subject to the provisions of this Agreement, Transferors shall at all times use all reasonable efforts (but at no material cost to Transferors) to provide Buyer with access or information that Buyer may reasonably request concerning the Properties, but Transferors shall bear no liability if Transferors are not able to afford Buyer such access or information despite such reasonable efforts.


(c) Buyer acknowledges (i) that Buyer has entered into this Agreement with the intention of making and relying upon its own investigation of the physical, environmental, economic and legal condition of the Properties, (ii) that, other than those specifically set forth in Article IV below or in any document to be delivered pursuant to Section 6.1 below, Transferors are not making and have not at any time made any warranty or representation of any kind, expressed or implied, with respect to the Properties, including, without limitation, warranties or representations as to habitability, merchantability, fitness for a particular purpose, title (other than Transferors' limited warranty of title set forth in the Deeds), zoning, tax consequences, latent or patent physical or environmental condition, utilities, operating history or projections, valuation, projections, compliance with law or the truth, accuracy or completeness of the Disclosure Materials, (iii) that other than those specifically set forth in Article IV below or in any document to be delivered pursuant to Section 6.1 below, Buyer is not relying upon and is not entitled to rely upon any representations and warranties made by Transferors or anyone acting or claiming to act on any of Transferors' behalf, (iv) that the Disclosure Materials include soils, environmental and physical reports prepared for Transferors by third parties as to which Buyer has no right of reliance, Buyer has conducted an independent evaluation and Transferors have made no representation whatsoever as to accuracy, completeness or adequacy (provided, however, that nothing herein shall be deemed to limit Buyer's right to seek to obtain from the


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third parties which prepared such reports the right to rely on such reports at no cost to Transferors), and (v) that the Disclosure Materials include economic projections which reflect assumptions as to future market status and future Property income and expense with respect to the Properties which are inherently uncertain and as to which Transferors have not made any guaranty or representation whatsoever. Buyer further acknowledges that it has not received from Transferors any accounting, tax, legal, architectural, engineering, property management or other advice with respect to this transaction and is relying solely upon the advice of its own accounting, tax, legal, architectural, engineering, property management and other advisors. Except as provided in the representations and warranties of Transferors set forth in Article IV below and except as otherwise expressly set forth in this Agreement or in any document to be delivered pursuant to Section 6.1 below, based upon the order of Buyer's familiarity with and due diligence relating to the Properties and pertinent knowledge as to the markets in which the Properties are situated and in direct consideration of Transferors' decision to sell or exchange the Properties to Buyer for the Price and not to pursue available disposition alternatives, Buyer shall purchase the Properties in an "as is, where is and with all faults" condition on the Closing Date and assumes fully the risk that adverse latent or patent physical, environmental, economic or legal conditions may not have been revealed by its investigations. Transferors and Buyer acknowledge that the compensation to be paid to Transferors for the Properties has taken into account that the Property is being sold or exchanged subject to the provisions of this Section 2.4. Transferors and Buyer agree that the provisions of this Section 2.4 shall survive closing.


(d) Consistent with the foregoing and subject solely to the express covenants and indemnities set forth in this Agreement and the representations set forth in Section 4.1 or in any document to be delivered pursuant to Section 6.1 below (as such covenants, indemnities and representations are limited pursuant to Section 4.4 hereof), effective as of the Closing Date, Buyer, for itself and its agents, affiliates, successors and assigns, hereby releases and forever discharges Transferors, their respective members, beneficial owners, agents, affiliates, successors and assigns (collectively, the "Releasees") from any and all rights, claims and demands at law or in equity, whether known or unknown at the time of this agreement, which Buyer has or may have in the future, arising out of the physical, environmental, economic or legal condition of the Properties, including, without limitation, all claims in tort or contract and any claim for indemnification or contribution arising under the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601, et. seq.) or any similar federal, state or local statute, rule or ordinance relating to liability of property owners for environmental matters. Without limiting the foregoing, Buyer, upon closing, shall be deemed to have waived, relinquished and released Transferors and all other Releasees from and against any and all matters arising out of latent or patent defects or physical conditions, violations of applicable laws and any and all other acts, omissions, events, circumstances or matters affecting the Properties, except for breach of the express covenants and indemnities set forth in this Agreement and the representations and warranties set forth in Section 4.1 or in any document to be delivered pursuant to Section 6.1 (as such covenants, indemnities and representations are limited pursuant to Section 4.4 hereof). For the foregoing purposes, Buyer hereby specifically waives the provisions of Section 1542 of the California Civil Code and any similar law of any other state, territory or jurisdiction. Section 1542 provides:


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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.


Buyer hereby specifically acknowledges that Buyer has carefully reviewed this subsection and discussed its import with legal counsel and that the provisions of this subsection are a material part of this Agreement.


________________
Buyer


(e) Subject to the express covenants and indemnities set forth in this Agreement and the representations of Transferors set forth in Section 4.1 or in any document to be delivered pursuant to Section 6.1 (as such covenants, indemnities and representations are limited pursuant to Section 4.4 hereof), Buyer shall indemnify, defend and hold Transferors harmless from and against any and all losses, damages, causes of action, costs and expenses (including without limitation, reasonable attorneys' fees and costs), claims and liabilities in connection with or relating directly or indirectly to the Properties to the extent arising out of or resulting from acts or omissions occurring from and after the Closing Date. Transferors shall indemnify, defend and hold Buyer harmless from and against any and all losses, damages, causes of action, costs and expenses (including, without limitation, reasonable attorneys' fees and costs), claims and liabilities in connection with claims brought by third parties unaffiliated to Buyer (i) for physical injury to persons or physical damage to property to the extent such injury or damage occurred on the Properties and arose out of or resulted from acts or omissions of Transferors that took place prior to the Closing Date, (ii) with respect to acts or omissions of Transferors that took place prior to the Closing Date and that are actually insured under an insurance policy carried by Transferors (and then only to the extent of the proceeds actually paid under such policy, Transferors agreeing to use commercially reasonable efforts to realize such insurance proceeds) and (iii) with respect to each of the matters which are listed on Exhibit W attached hereto as such list may be amended from time to time during the Contract Period by Transferors (and provided to Buyer) to reflect new litigation filed against Transferors during the Contract Period (the foregoing items (i), (ii) and (iii) being collectively referred to as "Claims"); provided t
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