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EXHIBIT 2.5
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AGREEMENT OF PURCHASE AND SALE
ARROWHEAD CROSSING SHOPPING CENTER
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AND
OPUS SOUTHWEST CORPORATION
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TABLE OF CONTENTS
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1. RECITALS.......................................................... 1
1.01 Definitions.................................................. 1
1.02 Land/Improvements............................................ 1
1.03 Real Property................................................ 1
2. AGREEMENT TO PURCHASE AND SELL.................................... 1
2.01 Purchase/Sale................................................ 1
3. PURCHASE PRICE AND MANNER OF PAYMENT.............................. 2
3.01 Purchase Price............................................... 2
3.02 Purchase Price Portions...................................... 2
4. ESCROW............................................................ 3
4.01 Escrow Agent................................................. 3
4.02 Filings...................................................... 3
5. SITE ANALYSIS..................................................... 3
5.01 Site Analysis Documents...................................... 3
5.02 Access....................................................... 4
5.03 Site Analysis Period......................................... 5
5.04 Cure of Unacceptable Conditions.............................. 5
6. SURVEY AND TITLE INSURANCE........................................ 7
6.01 Survey....................................................... 7
6.02 Title Commitment............................................. 7
6.03 Purchaser's Objections; Seller's Cure........................ 7
6.04 Title Policy................................................. 8
7. SELLER'S CLOSING DOCUMENTS AND ESCROW............................. 8
7.01 Deed......................................................... 9
7.02 Assignment of Leases......................................... 9
7.03 Leases and Tenant Documents.................................. 9
7.04 ▇▇▇▇ of Sale................................................. 9
7.05 Assignment of Contracts...................................... 9
7.06 Violations/Work Orders Affidavit............................. 9
7.07 Keys......................................................... 10
7.08 Plans and Specifications..................................... 10
7.09 Title Insurance Affidavit.................................... 10
7.10 FIRPTA Certificate/Withholding............................... 10
7.11 Form 1099.................................................... 10
7.12 Books and Records............................................ 10
7.13 Letters to Tenants........................................... 10
7.14 Recording Requirements....................................... 10
7.15 Estoppel Certificates........................................ 10
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7.16 Termination of Management and Seller Affiliated Contracts.... 11
7.17 Permits/Guaranties........................................... 11
7.18 Closing Statements........................................... 11
7.19 Escrow Instructions.......................................... 11
7.20 Date Down Certificate........................................ 11
7.21 Agreement Estoppel Certificate............................... 12
7.22 Vacant Space Acknowledgment.................................. 12
7.23 Assignment of REA............................................ 12
7.24 Other Documents.............................................. 12
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS..................... 12
8.01 Assignment of Leases......................................... 12
8.02 Assignment of Contracts...................................... 12
8.03 Closing Statements........................................... 12
8.04 Escrow Instructions.......................................... 12
8.05 Recording Requirements....................................... 13
8.06 Date Down Certificate........................................ 13
8.07 Vacant Space Acknowledgment.................................. 13
8.08 Other Documents.............................................. 13
9. CONDUCT OF BUSINESS PRIOR TO CLOSING.............................. 13
9.01 Affirmative and Negative Covenants........................... 13
9.02 Payments..................................................... 14
9.03 Lien Removal................................................. 15
10. REPRESENTATIONS AND WARRANTIES.................................... 15
10.01 Seller's Representations and Warranties..................... 15
10.02 Purchaser's Representations and Warranties.................. 19
10.03 Intentionally Deleted....................................... 20
10.04 Indemnification............................................. 20
11. SHARED CLOSING COSTS AND OTHER EXPENSES........................... 22
11.01 Expenses.................................................... 22
11.02 Shared Closing Costs........................................ 22
12. CONDITIONS........................................................ 22
12.01 Purchaser's Conditions...................................... 22
12.02 Seller's Conditions......................................... 23
12.03 Rights Upon Failure of a Condition.......................... 23
13. EARN-OUT.......................................................... 23
13.01 Defined Terms............................................... 23
13.02 Closing Date Purchase Price Computation..................... 26
13.03 Lease Assignment Reservation................................ 26
13.04 New Leases.................................................. 27
13.05 Earn-Out Period............................................. 29
13.06 Casualty During Earn-Out Period............................. 29
13.07 Earn-Out Payments........................................... 30
13.08 Footage Payment............................................. 31
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13.09 Intentionally Deleted....................................... 31
13.10 Seller's New Lease Obligations.............................. 31
13.11 Punchlist................................................... 31
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS............................ 32
14.01 Rents....................................................... 33
14.02 Arrears..................................................... 33
14.03 Unknown Rents............................................... 33
14.04 Utilities................................................... 34
14.05 Contracts................................................... 34
14.06 Taxes....................................................... 34
14.07 Assessment Installments..................................... 35
14.08 Permits..................................................... 36
14.09 Security Deposits/Tenant Inducements........................ 36
14.10 Customary Items............................................. 36
15. CLOSING........................................................... 36
15.01 Closing and Closing Date.................................... 36
16. POSSESSION........................................................ 36
16.01 Possession and Post Closing Work............................ 36
17. RISK OF LOSS...................................................... 37
17.01 Risk........................................................ 37
17.02 Damage and Destruction...................................... 37
17.03 Condemnation and Eminent Domain............................. 38
18. DEFAULTS AND REMEDIES............................................. 38
18.01 Seller's Defaults........................................... 38
18.02 Purchaser's Defaults........................................ 39
18.03 Seller's Remedies........................................... 39
18.04 Pre-Closing Purchaser's Remedies............................ 39
18.05. Post Closing Purchaser's Remedies.......................... 40
19. CROSS DEFAULT OBLIGATION.......................................... 40
20. ASSIGNMENT........................................................ 40
21. NOTICES........................................................... 40
22. ATTORNEYS' FEES AND DISBURSEMENTS................................. 42
23. NO CONSEQUENTIAL DAMAGES.......................................... 42
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24. MISCELLANEOUS.....................................................42
24.01 Successors..................................................42
24.02 Modifications/Waivers.......................................42
24.03 Entire Agreement............................................42
24.04 Counterparts................................................42
24.05 Captions....................................................43
24.06 Gender/Singular/Plural......................................43
24.07 Exhibits Incorporated.......................................43
24.08 Governing Law...............................................43
24.09 Severability................................................43
24.10 Date for Performance........................................43
24.11 Further Action..............................................43
24.12 Intentionally Deleted.......................................43
24.13 Confidentiality.............................................43
24.14 Time of the Essence.........................................44
24.15 Construction................................................44
24.16 Interest....................................................44
24.17 Warranty Work...............................................44
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▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ AND SALE
ARROWHEAD CROSSING SHOPPING CENTER
This Agreement of Purchase and Sale (the "Agreement") is made
as of the 2nd day of July, 1996, by and between OPUS SOUTHWEST CORPORATION, a
Minnesota corporation ("Seller"), and DEVELOPERS DIVERSIFIED REALTY CORPORATION,
an Ohio corporation ("Purchaser"). Seller and Purchaser (singularly, a "Party,"
collectively, the "Parties") agree as follows:
1. RECITALS.
1.01 DEFINITIONS. The location of all defined terms used in this Agreement are
set forth in the Glossary of Terms that is attached hereto and made a part
hereof.
1.02 LAND/IMPROVEMENTS. Seller is the sole owner of fee simple title to (i)
certain land (the "Land") situated in the City of Phoenix, State of Arizona,
more particularly described on Schedule 1.02 attached hereto and made a part
hereof, as shown on the site plan attached hereto as Schedule 1.02(a) (the "Site
Plan"); and (ii) all the buildings, structures and improvements (collectively,
the "Improvements") situated on the Land; and
1.03 REAL PROPERTY. Seller desires to sell, and Purchaser desires to purchase,
the Land and Improvements owned by Seller, and all of Seller's right, title and
interest in and to all rights, privileges, options, leases, licenses,
concessions, hereditaments, appurtenances, easements and rights of way in any
manner belonging to or pertaining to the Land and the Improvements, including
without limitation, rights in and to any streets, alleys or other ways adjacent
to the Land, open or proposed, and the fixtures in or upon the Land and the
Improvements owned by Seller. The Land, the Improvements and all of the items
mentioned in this Paragraph 1.03 are hereinafter collectively referred to as the
"Real Property" and are commonly known as "Arrowhead Shopping Center."
2. AGREEMENT TO PURCHASE AND SELL.
2.01 PURCHASE/SALE. Upon and subject to the terms and conditions set forth in
this Agreement, Seller agrees to sell and Purchaser agrees to purchase all of
the following that is hereinafter collectively referred to as the "Project":
(a) The Real Property;
(b) All tangible personal property (the "Personal Property")
owned by Seller that is now or hereafter located upon the Real Property and used
in connection with the ownership, operation, management, or maintenance of the
Real Property and that is set forth on Schedule 2.01(b) attached hereto;
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(c) All intangible personal property (the "Intangible
Property") owned by Seller that is now or is hereafter located upon the Real
Property or is used in connection with the Real Property, including without
limitation, (i) all trade names, logos and telephone numbers, excluding those
tradenames or logos depicting or containing the name or trademark of Opus
Southwest Construction Corporation or its affiliates and excluding telephone
numbers not exclusively used in connection with the Project; (ii) all Guaranties
(as hereinafter defined) given in connection with the construction or repair of
the Improvements or the purchase of any Personal Property to the extent any
Guaranties remain outstanding as of the Closing Date (as hereinafter defined)
that are set forth on Schedule 5.01(g) attached hereto; and (iii) to the extent
transferable by Seller, all of Seller's right, title and interest in
certificates of occupancy (or the local equivalent), permits, licenses,
approvals and authorizations (collectively, the "Permits") issued by any
federal, state, county and municipal governmental or quasi-governmental
authority relating to the Real Property.
3. PURCHASE PRICE AND MANNER OF PAYMENT.
3.01 PURCHASE PRICE. The total sum (the "Purchase Price") to be paid by
Purchaser to Seller for the sale of the Project is the sum of the Closing
Payment and those Footage Payments and Earn-Out Payments, if any (as those terms
are hereinafter defined), computed, in part, in respect to the base rents set
forth in the Rent Roll attached hereto as Schedule 3.01, all as provided in
Section 13 hereof. The actual amount of the Purchase Price is subject to the
computations and elections provided in Section 13 hereof and subject to the
adjustments, if any, provided in Section 14 hereof. Portions of the Purchase
Price will be paid at various times as hereinafter provided.
3.02 PURCHASE PRICE PORTIONS. The Purchase Price shall be paid as follows:
(a) Initial Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Initial Deposit"), which Purchaser deposited with Escrow
Agent (as hereinafter defined) simultaneous with the execution of this Agreement
by Purchaser and Seller.
(b) Second Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Second Deposit") which Purchaser shall deposit with Escrow
Agent on the expiration date of the Site Analysis Period (as hereinafter
defined), if Purchaser elects to proceed with this transaction, as more fully
provided in Paragraph 5.03 below (the Initial Deposit and the Second Deposit are
hereinafter collectively referred to as the "Deposit"). The term "Deposit" shall
be deemed to include all interest accruing on the Deposit during the term of
this Agreement.
(c) Closing Date Price. So much of the Purchase Price computed
in accordance with the provisions of Paragraph 13.02 hereof that is payable as
of the Closing Date, after giving credit for the Deposit and after making the
adjustments, if any, as provided in Section 14 hereof, shall be paid by wired
funds to the Escrow Agent for disbursement on the Closing Date by not later than
2:00 P.M. Central Daylight Savings Time.
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(d) Earn-Out Period Payments. As provided in Paragraph 13.07,
those Earn-Out Payments that are payable during, or in some instances, after the
Earn-Out Period (as hereinafter defined) shall be paid by wired funds to the
Escrow Agent for disbursement to Seller when required by the provisions of
Paragraph 13.07.
(e) Footage Payment. As provided in Paragraph 13.08, if a
Footage Payment (as hereinafter defined) is payable, it shall be paid by wired
funds to the Escrow Agent for disbursement to Seller when required pursuant to
Paragraph 13.08.
4. ESCROW.
4.01 ESCROW AGENT. The Parties hereby designate First American Title Insurance
Company as the escrow agent ("Escrow Agent" or "Title Company"). By execution of
this Agreement, Escrow Agent agrees to be bound by the terms and conditions of
this Agreement which relate to the Escrow Agent and its rights and obligations
hereunder.
4.02 FILINGS. The Parties hereby designate Escrow Agent to serve as "Real Estate
Broker," as defined in Section 6045 of the Internal Revenue Code, as amended,
for the purpose of making such reports and filing such returns as shall be
required thereunder from time to time.
5. SITE ANALYSIS.
5.01 SITE ANALYSIS DOCUMENTS. To the extent not heretofore delivered, promptly
after the execution of this Agreement, Seller agrees (i) to make available for
inspection at reasonable times by Purchaser and its agents any and all
documents, instruments, surveys, reports, plans, permits, approvals, studies,
reviews, analyses, contracts, agreements and other materials relating to the
acquisition, development, construction, ownership and operation of the Project
that are in Seller's possession or under its control, and (ii) to deliver to
Purchaser true and correct copies of the following documents (in respect to
clause (ii) collectively hereafter referred to as "Site Analysis Documents"):
(a) "As-built" survey of the Project showing the location of
all Improvements thereon and any easements encumbering the Project.
(b) Soil, topographical, and other reports relating to the
Project, including the environmental reports set forth on Schedule 5.01(b)
("Environmental Reports") attached hereto.
(c) Operating statements and records sufficient to accurately
show all revenues, income, costs and expenses of operating and maintaining the
Project for the period on and after the opening of the Project for business.
(d) All written contracts for repair, maintenance, garbage
removal, concessions, vending, service contracts, and other services to be
performed with respect to the Project.
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(e) All Leases (as hereinafter defined) and all written
licenses, concessions and tenancies with Tenants (as hereinafter defined)
occupying or having the right to occupy any portion of the Project, and Seller's
written statement of any oral leases, licenses, concessions and tenancies with
tenants, licensees, concessionaires or others occupying or having the right to
occupy or use any portion of the Project, if any.
(f) All architectural drawings, engineering studies, plans and
specifications relating to the original and current construction of the Project
(hereinafter collectively referred to as "Plans").
(g) All warranties and guaranties that remain outstanding as
of the Closing Date that have been given by Seller or any third party
contractors, subcontractors, vendors and suppliers relating to their
performance, quality of workmanship and quality of materials supplied in
connection with the construction, manufacture, development, installation and
operation of the Improvements, Personal Property and any and all fixtures,
equipment and items of personal property comprising all or any part of the
Improvements located in or used in connection with the Project (collectively
hereinafter referred to as "Guaranties"), all of which are set forth on Schedule
5.01(g) attached hereto.
5.02 ACCESS. Seller acknowledges that to enable Purchaser to proceed with this
transaction, Purchaser already has and, during the Site Analysis Period (as
hereinafter defined), may undertake or cause to have undertaken tests and
studies, including, but not limited to, marketing, engineering, environmental,
feasibility and soil that Purchaser, in its reasonable discretion, deems
necessary to determine the feasibility of its acquisition of the Project
(hereinafter collectively referred to as "Tests and Studies"). The Tests and
Studies conducted by or on behalf of Purchaser and the restoration of the
Project in respect thereto as hereinafter provided shall be done in such a
fashion so as to not disrupt the ordinary course of business of Seller or any of
the Tenants, New Tenants (as hereinafter defined) or Seller's contractors or
subcontractors.
Purchaser and its agents, contractors or employees shall have
the right to enter upon the Project for the purpose of performing its Tests and
Studies, provided said activities (i) shall not (y) in any way damage the
Project in such a fashion or to a degree that prevents its restoration by
Purchaser as hereafter provided substantially to the condition of the Project
that existed immediately prior thereto, or (z) void or make voidable any
Guaranties of portions thereof (but in any event subject to Seller's prior
consent that shall not be unreasonably withheld or delayed), and (ii) Seller or
its designated agents have the right to participate in (provided Seller and its
agents do not interfere with) such Tests and Studies. Purchaser shall give
Seller twenty-four (24) hour advance notice before Purchaser and its agents,
contractors or employees enter upon the Project. In the event this Agreement
fails to close for any reason, except for Seller's willful refusal to convey
(absent a material default hereunder by Purchaser) title to the Land as required
hereunder, or Seller acknowledges or it is subsequently determined that Seller
is in material default hereunder ("Restoration Forgiveness"), Purchaser shall
restore the Project to substantially the same condition that existed immediately
prior to such surveying, inspecting and testing that were undertaken by or on
behalf of Purchaser prior to the date of this Agreement or
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during the Site Analysis Period. Except in the instance of a Restoration
Forgiveness, Purchaser shall keep the Project free of all liens in connection
with the Tests and Studies and shall cause all such liens to be removed
immediately upon its being notified of same. Except in the instance of a
Restoration Forgiveness, Purchaser agrees to indemnify, defend and hold Seller
harmless against any liabilities, claims and damages, including, without
limitation, any property damage, personal injury or claim of lien against the
Project resulting from the activities permitted by this Paragraph 5.02
(including, without limitation, reasonable attorneys' fees and expenses paid or
incurred by Seller during litigation, if any), which indemnity shall survive the
Closing Date or the expiration, cancellation or termination of this Agreement.
5.03 SITE ANALYSIS PERIOD. Purchaser shall have the Site Analysis Period in
which to conduct the Tests and Studies and to ascertain whether the Project is
acceptable to Purchaser. "Site Analysis Period" shall mean the period expiring
on June 17, 1996. If the Project is determined to be unacceptable to Purchaser,
for any reason whatsoever, in Purchaser's sole discretion, Purchaser shall have
the right to terminate this Agreement by giving written notice of termination on
or prior to the date of expiration of the Site Analysis Period, in which event
the Deposit shall be returned to Purchaser. In accordance with the provisions of
11.02(b) hereof, Seller and Purchaser shall each pay 50% of the Shared Closing
Costs incurred as of the termination date, and neither Party shall have any
further rights or obligations hereunder, except those specifically provided
herein that survive the termination of this Agreement. A failure to so notify
Seller of Purchaser's election to terminate or proceed with this Agreement as
aforesaid prior to the expiration of the Site Analysis Period shall be deemed as
notice to Seller that Purchaser has elected to terminate this Agreement as
aforesaid.
5.04 CURE OF UNACCEPTABLE CONDITIONS. Any of the Tests and Studies of Purchaser
and/or its agents or representatives conducted during the Site Analysis Period
that discloses that there are (i) any defects or deficiencies of the Project in
respect to its compliance with any and all codes, ordinances, statutes, Permits,
approvals or licenses issued in respect to the Project or promulgated by any
federal, state, county or municipal governmental or quasi-governmental authority
which are required by such governmental or quasi-governmental authority to
correct; (ii) defects in the materials or workmanship of the Project from that
which is required to be in substantial compliance with the Plans, except that
portion thereof, if any, that relates to materials for, or workmanship of
improvements constructed or to be constructed on behalf of Tenants or New
Tenants that form a part of Post Closing Work (as hereinafter defined); or (iii)
a violation of Environmental Laws (as hereinafter defined) not disclosed on the
Environmental Reports that, in respect to clauses (i), (ii) and (iii), can be
corrected and cured for an estimated aggregate cost (in respect to the Project)
not to exceed One Hundred Thousand Dollars ($100,000.00), shall be collectively
hereinafter referred to as "Unacceptable Conditions." It is understood that
regardless of the cost, the Warranty Work obligations set forth in Paragraph
24.17 hereof, shall not be included as an Unacceptable Condition in respect to
the $100,000.00 limitation and the cost of performing Warranty Work shall be in
addition to any cost for curing or correcting Unacceptable Conditions. In the
event Purchaser discovers what it deems to be Unacceptable Conditions as a
result of the Tests and Studies, Purchaser shall notify ("Condition Notice")
Seller, in writing, of the same promptly following Purchaser's discovery
thereof, but in no instance later than three (3) business days following the
expiration of the Site Analysis Period. Such Condition Notice shall
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include a copy of those portions of the Tests and Studies disclosing such
Unacceptable Condition(s). Within ten (10) days following Seller's receipt of
the Condition Notice, if any, Seller shall advise ("Condition Response")
Purchaser, in writing, of Seller's good faith determination and estimate of (1)
those matters contained in the Condition Notice that do not qualify as
Unacceptable Conditions; (2) the time within which the remaining matters
contained in the Condition Notice will be cured or corrected; and (3) the
aggregate cost to Seller of curing and correcting such remaining matters. In the
event the Condition Response is unacceptable to Purchaser, Seller and Purchaser
shall promptly meet and confer, in good faith, to attempt to resolve the
unacceptable aspects to Purchaser of the differences between the Condition
Notice and the Condition Response or the time within which or the aggregate cost
for which Seller estimated in the Condition Response for curing or correcting as
aforesaid. In the event Seller and Purchaser are unable to resolve such
differences, Purchaser may elect to (a) terminate this Agreement, (b) proceed to
Closing in respect to Seller's obligations to cure or correct those matters set
forth in the Condition Response, modified, if at all, as a result of the
aforesaid conference between Purchaser and Seller (provided the estimated
aggregate cost of performing the same does not exceed $100,000.00 or such
greater amount Seller, in its sole discretion, has agreed to expend), or (c)
select those specific line items from the Condition Response that Purchaser
requires to have corrected (provided the estimated aggregate cost of performing
the same does not exceed $100,000.00). Purchaser, within ten (10) business days
after such conference, shall advise Seller, in writing, of Purchaser's election.
If the Condition Notice, Condition Response or the time periods specified above
for elections of Purchaser extend beyond the Closing Date, the Closing Date
shall be extended to the date five (5) business days subsequent to the date
Purchaser elects, if at all, to proceed with the Closing. In the event Purchaser
elects to terminate this Agreement, the Deposit shall be returned to Purchaser,
Purchaser and Seller shall each pay fifty percent (50%) of the Shared Closing
Costs incurred as of the termination date, and neither Party shall have any
further rights or obligations hereunder, except those specifically provided
herein that survive the termination of this Agreement. In the event Purchaser
elects to proceed to Closing pursuant to clause (b) above, the matters contained
in the Condition Response, modified, if at all, by Purchaser's and Seller's
conference and provided the estimated aggregate cost of curing or correcting the
same is One Hundred Thousand and no/100 ($100,000.00) or less (or such greater
amount Seller accepts as aforesaid) shall be deemed to be the Unacceptable
Conditions to which Seller is bound. In the event Purchaser elects to proceed to
Closing pursuant to clause (c) above, the specific line items selected by
Purchaser that are set forth in the Condition Response (provided the estimated
aggregate cost of curing or correcting the same is $100,000.00 or less) shall be
deemed to be the Unacceptable Conditions to which Seller is bound. Thereafter,
Seller shall undertake to cure or correct such Unacceptable Conditions, at its
sole cost and expense (regardless of the actual cost ultimately incurred by
Seller in respect thereto) within the time (subject to Force Majeure, as
hereinafter defined) set forth in the Condition Response. The obligation of
Seller to cure or correct such Unacceptable Conditions shall survive the
Closing. In the event (y) Seller fails to commence the cure of an Unacceptable
Condition(s) on or prior to the time specified in the Condition Response for the
cure thereof, or (z) Seller commences the cure of an Unacceptable Condition(s),
but fails to complete such cure prior to the time specified in the Condition
Response (subject to Force Majeure), Purchaser may off-set so much of any
Earn-Out Payment or Footage Payment subsequently payable by Purchaser hereunder
by the amount of the reasonable costs and
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expenses incurred by Purchaser for undertaking and completing the uncured
Unacceptable Condition(s). The curing or correcting of any Unacceptable
Condition shall be done in accordance with the Plans. However, if such curing or
correcting requires a variance from the Plans, Seller shall not undertake such
variance without obtaining Purchaser's prior written consent, which consent
shall not be unreasonably withheld or delayed.
6. SURVEY AND TITLE INSURANCE.
6.01 SURVEY. Seller shall cause an "as-built" Survey (the "Survey") of the Real
Property to be updated during the Site Analysis Period. The Survey shall be
certified to Seller, Purchaser, and the Title Company. The Survey shall satisfy
all of the requirements set forth on Schedule 6.01 that is attached to and made
a part of the Exhibit Agreement (as hereinafter defined).
6.02 TITLE COMMITMENT. During the Site Analysis Period, to the extent not
theretofore delivered, Seller shall (i) cause the Title Company to issue and
deliver to Purchaser a title insurance commitment for an owner's extended
coverage policy of title insurance, in the amount of that portion of the
Purchase Price then estimated to be payable to Seller on the Closing Date,
committing the Title Company to insure Purchaser as the owner of fee simple
title to the Real Property and all easements appurtenant thereto (the
"Commitment"), and (ii) copies of each document described on Schedule B of the
Commitment.
6.03 PURCHASER'S OBJECTIONS; SELLER'S CURE. Other than those title exceptions
("Permitted Exceptions") set forth in Schedule 6.03 attached hereto and made a
part hereof and exceptions caused by or claimed under or through Seller that
will be removed at Closing (as hereinafter defined) if (i) the Commitment
reveals any other matters or exceptions ("Title Defects"), or (ii) the Survey
reveals any defects which affect the marketability of the Real Property or are
deemed objectionable by Purchaser ("Survey Defects"), Purchaser shall notify
Seller, in writing, of the same within fifteen (15) days following the date of
delivery to Purchaser of the last of the Commitment and Survey ("Defects
Notice"). In the event Purchaser fails to deliver a Defects Notice as aforesaid
Seller shall advise Purchaser of such failure, in writing. If Purchaser fails,
within three (3) business days thereafter to deliver a Defects Notice, it shall
be deemed a notice to Seller that Purchaser has elected to waive such defects,
if any, and to proceed with the transaction contemplated hereby, subject to the
fulfillment of Seller's obligations hereunder. Except for Title Defects or
Survey Defects that are caused by or claimed under or through Seller that can be
removed or discharged by the payment of a sum of money (including, without
limitation, a Mortgage(s), as hereafter defined), Seller shall have no
affirmative obligation to cure or correct any Title Defects or Survey Defects,
except as provided in Seller's Response (as hereinafter defined). Within fifteen
(15) days following Seller's receipt of a Defects Notice, Seller, at its option,
shall notify Purchaser of those Title Defects and Survey Defects that Seller
shall undertake to cure or correct ("Seller's Response"). In the event Seller
(a) elects in Seller's Response not to satisfy a specified Title Defect or
Survey Defect or (b) is unable, within sixty (60) days after Purchaser's receipt
of Seller's Response, to satisfy the Title Defect or Survey Defect which Seller
had elected in Seller's Response to so satisfy, Purchaser may, at its option,
(1) accept title to the Real Property subject to the Title Defects and/or Survey
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Defects raised by Purchaser in which event such Title Defects and Survey Defects
shall be deemed to be Permitted Exceptions, or (2) cancel this Agreement and
receive a full refund of the Deposit, whereupon Seller shall pay all Shared
Closing Costs and this Agreement shall be of no further force and effect, except
for those matters which are specifically set forth in this Agreement as
surviving the expiration or termination of this Agreement. If the Defects
Notice, Seller's Response or the time periods specified above for elections of
Purchaser extend beyond the time specified for the Closing Date, the Closing
Date shall be extended to the date five (5) business days subsequent to the date
Purchaser elects, if at all, to proceed with the Closing.
6.04 TITLE POLICY. It shall be a condition precedent to Purchaser's obligation
to consummate the transaction contemplated by this Agreement that the Title
Company can and will issue an ALTA Owner's Policy of Title Insurance (Form B,
Amended 1987, if available) (the "Title Policy") in the full amount of that
portion of the Purchase Price payable by Purchaser on the Closing Date as
provided in Paragraph 13.02 hereof, insuring Purchaser as the owner in fee
simple of the Project, and all appurtenant easements thereto, free and clear of
all liens and encumbrances, except for the Permitted Exceptions, and without
exception for rights or claims of parties in possession not shown by the public
records, encroachments, overlaps, boundary line disputes, or any other matter
disclosed by the Survey which Purchaser has not waived or approved or is deemed
to have approved pursuant to Paragraph 6.03 hereof, provided, however, that the
Title Policy may show the rights of the Tenants and New Tenants (as hereinafter
defined) under New Leases (as hereinafter defined) that are fully executed prior
to the Closing as parties in possession (or right to possession) as tenants
only. Purchaser shall attempt to cause the Title Company, as part of the Title
Policy, to issue the following endorsements in the form of those set forth in
Schedule 6.04 attached hereto ("Endorsements"): CC&R Endorsement (unless
easements appurtenant to the Project are additionally insured parcels on
Schedule A of the Title Policy), Comprehensive No. 1, Access, Survey, Contiguity
(but only to the extent of contiguous portions of the Land as depicted on
Schedule 1.02 attached hereto), Tax Parcel, Environmental, Encroachment Mineral
Rights and Zoning 3.1 (with parking). Any Survey or physical inspection
requirements imposed as a condition to the issuance of the Title Policy may be
satisfied by Seller as a Shared Closing Cost, except costs and expenses in
respect to correcting Survey Defects which shall be paid by Seller. Seller shall
execute such affidavits and certificates as the Title Company may require as a
condition to the issuance of the Title Policy, and a copy of each such affidavit
or certificate shall be delivered to Purchaser. In addition, as part of the
Shared Closing Costs, Seller shall cause (i) the Title Policy to be dated down
to the date each Earn-Out Payment (as hereinafter defined) is paid during or
after the Earn-Out Period showing no new exceptions, except the Permitted
Exceptions, the subject or previous New Leases, and exception caused, permitted
or claimed by, through or under Purchaser or its successors and assigns; and
(ii) the amount of the Title Policy's coverage to be increased to an amount that
equals the subject Earn-Out Payment.
7. SELLER'S CLOSING DOCUMENTS AND ESCROW.
At Closing, Seller shall execute and deliver the following
documents to Escrow Agent:
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7.01 DEED. A signed special warranty deed in the form and substance (modified
for the subject jurisdiction) attached to the Exhibit Agreement as Schedule 7.01
(the "Deed") conveying to Purchaser, good, indefeasible and insurable title to
the Real Property and the Improvements, free and clear of all liens and
encumbrances of any type whatsoever, except for the Permitted Exceptions. The
Permitted Exceptions shall be specifically, and not categorically, excepted from
the warranty of title in the Deed.
7.02 ASSIGNMENT OF LEASES. An assignment (the "Lease Assignment") in the form
attached to the Exhibit Agreement as Schedule 7.02 of all (except in respect to
the Assignment Reservation as provided in Paragraphs 13.03, 14.01, 14.02 and
14.03 hereof) of the Seller's right, title and interest as lessor under the
leases, tenancies, occupancy agreements, rental agreements, options, licenses
and concessions, and all of the foregoing (hereinafter collectively referred to
as the "Leases") which are described on Schedule 7.02(a) attached hereto, and
all New Leases that are fully executed prior to the Closing, together with all
security deposits, cleaning deposits, key deposits and advance rental payments
(collectively, the "Security Deposits") made by the lessees, tenants, occupants,
optionees, licensees and concessionaires (collectively, the "Tenants") and New
Tenants under the Leases and subject New Leases.
7.03 LEASES AND TENANT DOCUMENTS. All original copies of the Leases and New
Leases that are fully executed prior to Closing, Tenant and the subject New
Tenant financial statements, their sales reports and other Tenant and the
subject New Tenant related documents, and to the extent, if any, that original
copies are not delivered, Seller shall deliver copies which shall be accompanied
by an affidavit sworn to by Seller confirming that the copies delivered are true
and complete copies of the originals.
7.04 ▇▇▇▇ OF SALE. A ▇▇▇▇ of sale in the form attached to the Exhibit Agreement
as Schedule 7.04, transferring and conveying to Purchaser all of Seller's right,
title and interest to the Personal Property and the Intangible Property.
7.05 ASSIGNMENT OF CONTRACTS. An assignment (the "Contract Assignment") in the
form attached to the Exhibit Agreement as Schedule 7.05, of all of Seller's
right, title and interest as the owner of the Project under the service
contracts and agreements, personal property leases and agreements (collectively,
the "Contracts") which are described on Schedule 7.05(a) attached hereto and
which have been approved by Purchaser as being those Contracts that are assigned
to Purchaser pursuant to the Contract Assignment.
7.06 VIOLATIONS/WORK ORDERS AFFIDAVIT. An affidavit, in form and substance of
Schedule 7.06 attached to the Exhibit Agreement, confirming that Seller has
complied with and discharged (or, to the extent Seller has not complied with and
discharged, an explanation of that which remains to be done to cause compliance
and discharge) (i) all notices, if any, that either Seller or its management
agent managing the Real Property received concerning any and all uncured
violations (the "Violations") of any law, statute, ordinance, regulation, rule,
requirement, order, judgment or decree enacted, adopted, imposed, issued,
entered or filed by any governmental authority (concerning or affecting the
Project or any part thereof), and (ii) all work
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orders concerning the Project or any part thereof, if any (the "Work Orders")
issued by any insurance carriers insuring a risk in respect to the Project.
7.07 KEYS. All keys to the Project.
7.08 PLANS AND SPECIFICATIONS. To the extent not delivered prior to Closing Date
as part of the Site Analysis Documents, all Plans.
7.09 TITLE INSURANCE AFFIDAVIT. Any affidavit required by the Title Company to
remove the standard printed exceptions from the Title Policy.
7.10 FIRPTA CERTIFICATE/WITHHOLDING. A certificate in the form and substance
attached to the Exhibit Agreement as Schedule 7.10 ("FIRPTA Affidavit").
7.11 FORM 1099. Any information with respect to Seller in connection with the
conveyance of the Real Property by Seller to Purchaser required by either (i)
IRC Sec. 6045 or Treas. Regs. Sec. 1.6045, or (ii) Treas. Form 1099 or its
instructions. If required thereby, the Escrow Agent shall timely (x) prepare and
file a Form 1099 in accordance with the provisions of Treas. Regs. Sec. 1.6045,
and (y) furnish the Parties with copies.
7.12 BOOKS AND RECORDS. Copies of all accounting books and records relating to
the operation and maintenance of the Project.
7.13 LETTERS TO TENANTS. Letters in the form and substance set forth in Schedule
7.13 that is attached to the Exhibit Agreement (the "Tenant Letters") addressed
to the Tenants and New Tenants of New Leases executed prior to Closing and
signed by Seller, advising the Tenants of the sale of the Project and the
Purchaser's right to receive the Rents (as hereinafter defined) under their
respective Leases.
7.14 RECORDING REQUIREMENTS. All documents and affidavits required of Seller to
record the Deed.
7.15 ESTOPPEL CERTIFICATES. An estoppel certificate in the form and substance
set forth in Schedule 7.15 that is attached to the Exhibit Agreement ("Tenant
Estoppel") showing no material exceptions that is executed (not more than
forty-five (45) days prior to the Closing Date or such earlier date Purchaser
reasonably accepts) by (i) all Tenants or New Tenants of Leases and New Leases
that are Qualified Leases (as hereinafter defined) on or prior to the Closing
Date that have demised to them space in the Project containing 7,500 square feet
or more, and (ii) at least eighty percent (80%) (calculated on a square foot
basis) of all Tenants or New Tenants of Leases or New Leases that are Qualified
Leases on or prior to the Closing Date that have demised to them space in the
Project containing less than 7,500 square feet. To the extent Seller is unable
to deliver to Purchaser Tenant Estoppels from all or any of the remaining
Tenants or New Tenants in the Project under such Qualified Leases in respect to
premises containing less than 7,500 square feet or a Tenant Estoppel in respect
to a premises that is 7,500 square feet or less that contains a material
exception noted by the applicable Tenant or New Tenant, Seller shall
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be entitled to deliver to Purchaser Seller's estoppel certificate ("Seller's
Estoppel") in form and substance reasonably acceptable to Purchaser confirming
the terms and conditions of the Lease or subject New Lease for which a Tenant
Estoppel was not delivered to Purchaser or, if delivered, that contains a
material exception. Such Seller's Estoppel shall be deemed a representation and
warranty by Seller as to the terms and conditions of the subject Lease or New
Lease, and the Seller's Estoppel shall not be subject to the time limitation for
claims set forth in Paragraph 10.04(b) hereof. After the Closing, when and as
Purchaser receives a Tenant Estoppel (without material exception) for which
Seller delivered a Seller's Estoppel, the subject Seller's Estoppel shall be
released by Purchaser and returned to Seller and shall be deemed to be of no
further force and effect.
7.16 TERMINATION OF MANAGEMENT AND SELLER AFFILIATED CONTRACTS. Notwithstanding
any other provision of this Agreement, in respect to any agreements or contracts
that are not to be included as part of the Contract Assignment, agreements
("Termination Agreements") signed by (i) the parties to any management agreement
for the Real Property, and (ii) the parties to all other such agreements or
contracts between the Seller or its predecessors in interest and parties
affiliated with or controlled by Seller or any of Seller's principals, which
Termination Agreements terminate such management agreement and other such
agreements and contracts as of the Closing Date, without any liability or
obligation on the part of the Purchaser or the Project.
7.17 PERMITS/GUARANTIES. Original or copies of Permits and originals of the
Guaranties which, in each instance, Seller agrees to keep in full force and
effect, and to comply with all of the terms and conditions thereof prior to
Closing.
7.18 CLOSING STATEMENTS. Closing Statements executed by Seller.
7.19 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the Closing.
7.20 DATE DOWN CERTIFICATE. A certificate of Seller (the "Seller Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 7.20 certifying that Seller's representations and warranties set forth
in Paragraph 10.01 of this Agreement are true and correct as of the Closing Date
as modified by the Schedules that are attached hereto pursuant to Paragraph
10.01 hereof that are updated to the Closing Date. In the event any updated
Schedules disclose a material deviation from the prior applicable Schedule as
reasonably determined by Purchaser, Purchaser shall have three (3) business days
from the date Purchaser receives a copy of the Seller Date Down Certificate in
which to elect to terminate this Agreement or to proceed with the Closing in
accordance with the updated Schedules. In the event Purchaser fails to notify
Seller, in writing, of Purchaser's election to terminate this Agreement, it
shall act as notice to Seller that Purchaser has elected to terminate this
Agreement. In the event Purchaser elects to terminate this Agreement, the
Deposit shall be refunded to Purchaser, Purchaser and Seller shall each pay
fifty percent (50%) of the Shared Closing Costs, and this Agreement shall be of
no further force and effect, except in respect to those provisions specifically
provided herein as surviving the termination of this Agreement.
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7.21 AGREEMENT ESTOPPEL CERTIFICATE. An estoppel certificate in form and
substance attached hereto as Schedule 7.21 ("Agreement Estoppel") showing no
material exceptions that are executed by each party to those easement agreements
or other agreements or undertakings (including, but not limited to, development
agreements) affecting the Project on and after the Closing Date that require the
performance of obligations by the owner of the Project and the approval of such
performance by the other party to the same that are identified by Purchaser to
Seller, in writing, not less than fifteen (15) days prior to the Closing Date.
To the extent such Agreement Estoppel shows a material exception or the party to
such easement agreements or other agreements or undertakings identified by
Purchaser as aforesaid fails to deliver an Agreement Estoppel, Seller shall be
entitled to deliver its undertaking confirming, in form and substance reasonably
acceptable to Purchaser, the terms and conditions of the Agreement Estoppel to
the extent applicable in the form attached hereto as Schedule 7.21, and such
confirmation by Seller shall not be subject to the time limitation for claims
set forth in Paragraph 10.04(b) hereof. After the Closing, when and as Purchaser
receives an Agreement Estoppel for which Seller delivered its undertaking as
aforesaid, the subject undertaking shall be released by Purchaser and returned
to Seller and shall be deemed to be of no further force and effect.
7.22 VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the location within the
Project of any space that is Vacant Space as of the Closing.
7.23 ASSIGNMENT OF REA. An Assignment of Declaration in the form attached hereto
as Schedule 7.23 assigning to Purchaser Seller's rights under the terms of the
Reciprocal Easement Agreement that is a Permitted Encumbrance.
7.24 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the transaction contemplated by this Agreement.
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS.
At Closing, Purchaser shall execute and deliver the following
to Escrow Agent:
8.01 ASSIGNMENT OF LEASES. The Lease Assignment, acknowledging the assumption by
Purchaser of Seller's obligations under the Leases which accrue after the
Closing Date.
8.02 ASSIGNMENT OF CONTRACTS. The Contract Assignment, acknowledging the
assumption by Purchaser of Seller's obligations under the Contracts which accrue
after the Closing Date.
8.03 CLOSING STATEMENTS. Closing Statements executed by Purchaser.
8.04 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the Closing.
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8.05 RECORDING REQUIREMENTS. All documents and affidavits required of Purchaser
to record the Deed.
8.06 DATE DOWN CERTIFICATE. A certificate of Purchaser (the "Purchaser Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 8.06 certifying that Purchaser's representations and warranties set
forth in Paragraph 10.02 of this Agreement are true and correct as of the
Closing Date.
8.07 VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the location within the
Project of any space that is Vacant Space as of the Closing.
8.08 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the transaction contemplated by this Agreement.
9. CONDUCT OF BUSINESS PRIOR TO CLOSING.
9.01 AFFIRMATIVE AND NEGATIVE COVENANTS. Until Closing, Seller shall or cause
to:
(i) Subject to Casualty or any Taking (as those terms are
hereinafter defined), maintain the Real Property and Personal Property in good
condition and repair and not commit or permit waste;
(ii) Carry on its business in respect to the Project in the
same manner as it has heretofore;
(iii) Keep in full force and effect all insurance coverage
required to be maintained by it pursuant to the Leases, applicable New Leases,
the Mortgages, the Permitted Exceptions, and any easement agreements or other
agreements or undertakings affecting the Project;
(iv) Perform all of its obligations under the Contracts,
Leases, applicable New Leases, Mortgages, Permitted Exceptions and any easement
agreements or other agreements or undertakings affecting the Project;
(v) Maintain and preserve its business organization intact;
(vi) Maintain and preserve its relations with the Tenants, New
Tenants under New Leases that are fully executed prior to the Closing, suppliers
and customers;
(vii) Except as provided in Paragraph 13.04 hereof, not
voluntarily terminate, amend, modify, extend, renew, waive or accept the
surrender of any Lease or New Lease or provision thereof, without Purchaser's
prior consent, which consent shall not be unreasonably withheld or delayed;
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(viii) Not voluntarily terminate, amend, modify, extend,
renew, waive or accept the cancellation of any Contract, Permitted Exception or
any easement agreements or other agreements or undertakings affecting the
Project or any provision of any of them, without the Purchaser's prior consent,
which consent shall not be unreasonably withheld or delayed;
(ix) Except as provided in Paragraph 13.04 hereof, not
voluntarily enter into, accept or consent to any new (a) lease, occupancy
agreement, subtenancy agreement, license agreement, concession agreement, (b)
contract or agreement, personal property lease or agreement, and/or (c) lien,
encumbrance, or security interest (including without limitation, mortgage, deed
of trust, security agreement, assignment of leases or rents, collectively,
"Mortgage") or other title exception or defect (including without limitation,
easement, restriction, dedication), which shall not be terminated on or before
Closing without the Purchaser's prior consent, which consent shall not be
unreasonably withheld or delayed;
(x) Not commence any action or proceeding or petition, apply
for or consent to any action or proceeding, the effect of which may be to change
the zoning of the Project or its assessed valuation (except for entering into
New Leases);
(xi) Not sell, assign or transfer the Project or any part
hereof (except in the instance of New Leases as provided in Paragraph 13.04
hereof), including without limitation, the Intangible Property and the Personal
Property; provided, however, that Seller may remove Personal Property for the
purpose of promptly effecting necessary repairs or immediate replacement with
Personal Property of like character and equal or better quality;
(xii) Not demolish or materially alter the Improvements or any
part thereof or otherwise adversely affect the value of the Project, without
Purchaser's prior consent, which consent shall not be unreasonably withheld or
delayed, except for (1) curing Unacceptable Conditions, Title Defects and Survey
Defects, (2) completing Punchlist Work (as defined and provided in Paragraph
13.11 hereof), (3) constructing tenant improvements for Leases, (4) performing
Seller's New Lease Obligations (as defined and provided in Paragraph 13.10
hereof), and (5) completing, in accordance with the Plans, any incomplete work.
(xiii) Except as provided in Paragraph 9.01(xii) above, not
materially alter the Land or any part thereof, including without limitation, by
mining, excavating, removing topsoil, timbering or changing the grade, without
Purchaser's prior consent, which consent shall not be unreasonably withheld or
delayed.
9.02 PAYMENTS. As more fully set forth in Paragraph 16.01 hereof, (i) Punchlist
Work; (ii) curing Unacceptable Conditions; (ii) constructing tenant improvements
for Leases and New Leases; (iv) all other work to be performed and all payments
to be made by Seller pursuant to the provisions of the Leases, the Contracts,
the Permitted Exceptions, and any insurance policy maintained by Seller
providing coverage for the Project which pertain to obligations that accrue
prior to the Closing; and (v) Warranty Work shall be completely performed and
paid for when due (subject to the right to contest Liens as provided in
Paragraph 9.03 hereof) by Seller and the obligation thereof shall survive the
Closing.
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9.03 LIEN REMOVAL. Except for (i) taxes not yet due and payable as of the
Closing, (ii) installments of special assessments due and payable after the
Closing, and (iii) Liens (as hereinafter defined and provided) that are either
bonded or insured over in a form reasonably satisfactory to Purchaser, all other
liens and encumbrances of ascertainable amounts incurred by Seller or by, for or
on behalf of Seller, except the Permitted Exceptions, shall be removed from the
record by Seller or Seller shall make arrangements satisfactory to the Title
Company for the removal of, or title insurance over (in form reasonably
satisfactory to Purchaser), such liens and encumbrances of record on the Closing
Date. Notwithstanding the foregoing, any liens or encumbrances attaching to the
title of the Real Property as a result of work performed on or material supplied
to the Project by Seller or on behalf of anyone claiming by, through or under
Seller (except Tenants and New Tenants under Qualified Leases, as hereinafter
defined) or as a result of Seller's failure to pay, when due, a Commission
(collectively, "Lien" or "Liens") may be contested by Seller as hereafter
provided. Within thirty (30) days after the recording of a Lien that is recorded
or filed after the Closing, Seller shall, at its election, either (i) bond over
the same, or (ii) cause the Title Company to insure over the same (in form and
substance reasonably satisfactory to Purchaser), in order, in the instances of
either clause (i) or (ii) above, to reasonably protect the Purchaser and the
Project (or any part thereof) from and against the subject Lien. Thereafter, in
the manner elected by Seller, Seller may contest such Lien provided that, within
thirty (30) days following the entry by a court of competent jurisdiction of a
final judgment or decree in favor of the claimant of such Lien, Seller shall pay
and satisfy such Lien and cause it to be released of record. In the event Seller
fails to pay and satisfy any Lien within thirty (30) days following the entry by
a court of competent jurisdiction of a final judgment or decree in favor of the
claimant of such Lien or fails to bond over or insure over a Lien as provided in
this Paragraph 9.03, Purchaser may offset so much of any Earn-Out Payment of
Footage Payment subsequently payable by Purchaser hereunder by the amount
incurred by Purchaser for effectuating the satisfaction and release of the
subject Lien.
10. REPRESENTATIONS AND WARRANTIES.
10.01 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants
to Purchaser that:
(i) Seller is a Minnesota corporation duly created and validly
existing pursuant to the laws of the jurisdiction of its organization and is
duly qualified to do business in the jurisdiction in which the Project is
situated.
(ii) Seller is authorized and empowered to enter into this
Agreement and to perform all of its obligations under this Agreement without any
qualification whatsoever, and no consent or approval of any third party
(including, without limitation, any governmental or quasi-governmental
authority) is or was required by Seller to execute and deliver this Agreement or
consummate this transaction.
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(iii) Upon the signing and delivery of this Agreement, this
Agreement will be legally binding upon Seller in accordance with all of its
provisions, except as such provisions may be qualified or limited by bankruptcy,
creditor's rights and equitable principles.
(iv) The person signing this Agreement on behalf of Seller has
been duly authorized to sign and deliver this Agreement on behalf of Seller.
(v) To the best of its Knowledge (as hereinafter defined),
Seller has not committed any act or permitted any action to be taken which would
materially adversely affect its ability to fulfill all of its obligations under
this Agreement.
(vi) The execution and delivery of this Agreement, and the
performance of Seller's obligations under this Agreement, will not violate or
breach, or conflict with, the terms, covenants or provisions of any agreement,
contract, note, Mortgage, indenture or other document of any kind whatsoever to
which Seller is a party or to which the Project is subject.
(vii) Seller has received no written notice and Seller has no
Knowledge of any uncured Work Order, or unfulfilled requirements or
recommendations issued, imposed or made by any insurers concerning the Project
or any part thereof.
(viii) To the best of its Knowledge, (i) Seller is not in
default of any obligation of Seller under any Mortgage, and (ii) Seller and/or
the Project is in compliance with all terms and conditions of the Permitted
Exceptions, including any easement agreement or other agreement or undertaking
affecting the Project.
(ix) To the best of Seller's Knowledge, the Project was
constructed, and is presently being operated, occupied and used in substantial
accordance with all applicable federal, state and local laws, rules, regulations
and ordinances governing the construction, operation, occupation and use of the
Project, and no variances to any applicable federal, state or local law, rule,
regulation or ordinance were granted in connection with the construction of the
Project.
(x) To the best of Seller's Knowledge, there is (i) no pending
or contemplated Taking affecting the Project or any part thereof, or (ii) no
pending or contemplated public improvement in or about the Real Property which
may in any manner affect access to or from the Project or increase the taxes
assessed against the Project, except in the instance of contemplated special
assessments, (y) a special assessment has been proposed in connection with
improvements to the Skunk River, and (z) there is an agreement with the City of
Peoria, Arizona, to include certain water and sewer tap-in fees as a part of a
contemplated special assessment.
(xi) To the best of Seller's Knowledge, except for the Vacant
Space (as hereinafter defined), Seller is in receipt of all Permits required by
all governmental authorities for the construction currently being prosecuted at
the Project and the operation, occupation and use of the Project as a shopping
center; all Permits are in full force and effect; and all Permits issued to the
Project are described on Schedule 10.01(xi) attached hereto and made a part
hereof.
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(xii) Neither Seller, nor, to the best of Seller's Knowledge
(except as disclosed in the Environmental Reports), any prior owner of the
Project has: (a) caused or permitted the generation, manufacture, refinement,
transportation, treatment, storage, handling, installation, removal, disposal,
transfer, production or processing of Hazardous Substances (as hereinafter
defined) or other dangerous or toxic substances, or solid wastes, except in
strict compliance with all laws; (b) caused or permitted or received any written
notice or have any actual knowledge of the Release (as hereinafter defined) or
existence of any Hazardous Substances on or about the Project or property
surrounding the Project which might affect the Project; (c) caused or permitted
or received any written notice or have any actual knowledge of any substances or
conditions on or about the Project or on property surrounding the Project which
may support a claim or cause of action, whether by any governmental authority or
any other person, under any laws ("Environmental Laws") in effect as of the date
of this Agreement and all rules and regulations promulgated thereunder,
including, but not limited to: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq. (the
"Superfund Act"); the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6921 et seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601
et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Section 136; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et
seq.; the Federal Solid Waste Disposal Act, 42 U.S.C. Sections 6901 et seq.; the
Clean Air Act, 42 U.S.C. Sections 7401 et seq.; or any other law. For the
purposes of this Agreement the terms "Hazardous Substances" and "Release" shall
have the definitions used in the Superfund Act; provided, however, that the
definition of the term "Hazardous Substances" shall also include (if not
included within the definition contained in the Superfund Act), petroleum and
related by products, hydrocarbons, radon, asbestos, urea formaldehyde and
polychlorinated biphenyl compounds.
(xiii) Except for the Permitted Exceptions, Seller is the sole
owner of good, indefeasible and insurable fee simple title to the Land and the
Improvements, and Seller has not executed or entered into any other agreement to
purchase, sell, option, lease or otherwise dispose or alienate all or any
portion of the Project other than this Agreement, the Leases and New Leases.
(xiv) Subject to the right of Seller to contest Liens as
provided in Paragraph 9.03 hereof, all labor and services performed and material
furnished to the Project have been paid for or will be paid for in full by
Seller, and, to the best of Seller's Knowledge, there exists no valid basis for
which a Lien or similar lien can properly be claimed against the Project or any
part thereof.
(xv) As of the date hereof, Schedule 7.02(a) attached hereto
is a complete and correct list of all Leases, and the information disclosed on
Schedule 7.02(a) is accurate with respect to each of the Leases.
(xvi) Leasing commissions or fees that are payable in
connection with any leasing agreement or registration statement to which Seller
is a party or that Seller has accepted, in writing, that pertains to New Leases
(that will be paid by Seller as provided in Paragraph
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13.11 hereof), and the Leases described in Schedule 7.02(a), and commissions
resulting from any other agreement to which Seller is a party relating to the
Project (collectively, "Commissions") will be paid by Seller when due under the
applicable leasing agreement or registration statement.
(xvii) Except as set forth on Schedule 10.01(xvii) attached
hereto, as of the date hereof, (1) none of the Tenants or New Tenants of Leases
and New Leases that are Qualified Leases as of Closing have been granted any
economic or financial concession or inducement (collectively, "Tenant
Inducement") that will not be paid in full by Seller when required in accordance
with the applicable provisions of the subject Leases and New Leases, and (2)
none of the subject Tenants or New Tenants have deposited Security Deposits with
Seller, except those disclosed on Schedule 7.02(a) attached hereto.
(xviii) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xviii) attached hereto, as of the date hereof, no Tenant or
New Tenant of Leases or New Leases that are Qualified Leases as of the Closing
has alleged an event of default on the part of Seller which is presently
outstanding, or that Seller has not fulfilled all of its obligations under the
subject Leases or New Leases which are conditions of the obligations of such
Tenants and New Tenants to pay the Rents, including without limitation, all
work, repairs and improvements required to be furnished by Seller pursuant to
such Leases and New Leases.
(xix) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xix) attached hereto, as of the date hereof, (1) none of the
Tenants or New Tenants under Leases or New Leases that are Qualified Leases as
of the Closing are in default of any of their obligations under their respective
Leases and New Leases, and (2) no event has occurred which, with the giving of
notice, the passage of time, or both, would constitute an event of default by
such Tenant or New Tenant.
(xx) Except as set forth on Schedule 10.01(xx) attached
hereto, as of the date hereof, Seller has no notice and to the best of Seller's
Knowledge, no Tenant or New Tenant under a New Lease that is fully executed
prior to Closing has advised Seller, orally or in writing, that any Tenant or
any subject New Tenant intends to give up physical or legal possession of its
demised premises, including without limitation: assigning its lease; subletting
all or part of its demised premises; vacating its demised premises;
discontinuing the operation of its business at its demised premises;
surrendering possession of its demised premises; or terminating its Lease or
subject New Lease.
(xxi) There are no employees of Seller that are assigned to
the Project for which Purchaser shall have any obligations after the Closing.
(xxii) A description of all Guaranties relating to the
construction and equipment of the Project received by Seller that, by their
terms, are in effect on or after the Closing Date are true, correct and
complete, and all Guaranties issued with respect to the Project that, by their
terms, are in effect on or after the Closing Date are described on Schedule
5.01(g) attached hereto.
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(xxiii) Seller has not dealt with any broker, finder or other
person in connection with this transaction, who is entitled to any Commission,
finder's fee or similar payment as a result of the acts of Seller or its agents,
except (1) as pertains to New Leases, and in such event, all Commissions in
connection therewith shall be paid by Seller as provided in Paragraph 13.11
hereof, and (2) as pertains to Commissions not yet due and payable in respect to
Leases which shall be paid by Seller when required in respect to such Leases.
Seller acknowledges that it has conversed with ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ in connection with this transaction, but that Seller has not agreed to be
obligated to pay any fee or other compensation to either or both of them.
(xxiv) Seller has no actual Knowledge that any of the written
information provided to Purchaser by Seller or on its behalf in connection with
this transaction (including without limitation, the warranties and
representations set forth in this Agreement), is inaccurate or incomplete or
contains any untrue statement of fact.
(xxv) To the best of Seller's Knowledge, copies of documents
furnished or to be furnished to Purchaser by Seller or on its behalf in
connection with this transaction are true and complete copies of the originals.
(xxvi) As of the Closing, Seller's net worth, determined in
accordance with generally accepted accounting principals consistently applied,
is greater than $5,000,000.00, exclusive of goodwill.
The term "Knowledge" when used in the context of "to the best of Seller's
Knowledge" (or any derivative form thereof) shall mean the actual (written or
oral), not imputed, knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ (Seller's Project Manager) or ▇▇▇▇ ▇▇▇▇▇ (Seller's Property
Manager).
10.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants to Seller that:
(i) Purchaser is an Ohio corporation, duly organized and
validly existing pursuant to the law of the jurisdiction of its organization.
(ii) Purchaser is authorized and empowered to enter into this
Agreement and perform all of its obligations under this Agreement without any
qualification whatsoever.
(iii) No consent or approval of any third party (including
without limitation, any governmental or quasi-governmental authority) is or was
required by Purchaser to execute and deliver this Agreement or consummate this
transaction.
(iv) Upon the signing and delivery of this Agreement, it will
be legally binding upon Purchaser in accordance with all of its provisions,
except as such provisions may be qualified or limited by bankruptcy, creditor's
rights and equitable principles.
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(v) The person signing this Agreement on behalf of Purchaser
has been duly authorized to sign and deliver this Agreement on behalf of
Purchaser.
(vi) To the best of Purchaser's Knowledge (as hereinafter
defined) Purchaser has not committed any act or permitted any action to be taken
which would materially adversely affect its ability to perform all of its
obligations under this Agreement.
(vii) The execution and delivery of this Agreement by
Purchaser and Purchaser's performance of it obligations under this Agreement
shall not conflict with any law, statute, ordinance, regulation, order,
directive or decree of any governmental or quasi-governmental authority or any
contract, other agreement or obligation to which Purchaser is a party or is
otherwise bound.
(viii) Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, neither
Purchaser nor its agents have dealt with any broker, finder or other person in
connection with this transaction who is entitled to any Commission or similar
payment as a result of the acts of Purchaser or its agents.
(ix) All copies of documents furnished or to be furnished to
Seller by Purchaser or on its behalf in connection with this transaction are
true and complete copies of the originals.
The term Purchaser's Knowledge, when used in the context of "to the best of
Purchaser's Knowledge" (or any derivative form thereof) shall mean the actual
(written or oral), not imputed, knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
10.03 INTENTIONALLY DELETED.
10.04 INDEMNIFICATION.
(a) Except as limited by the provisions of Paragraph 23
hereof, the Parties shall indemnify and hold each other harmless, from and
against all damages, costs, expenses, liabilities, penalties and fines,
including without limitation, attorneys fees, disbursements, expert witness
fees, paralegal fees, reporters fees, reproduction and printing costs, including
any of the foregoing which are incurred in connection with any appeal, and
amounts paid in settlement of claims (collectively, in respect to the foregoing
inclusion, "Litigation Expenses" ), paid or incurred by the other Party as a
result of any representation or warranty of the respective Party set forth in
this Agreement not being true and correct in all material respects when made. In
addition, the indemnity provisions of this Paragraph 10.04(a) on behalf of the
Purchaser shall pertain to any claims, demands, actions, causes of action,
judgments or decrees made against or entered against Seller in respect to any
Commissions or other compensation claimed or demanded by either ▇▇▇▇▇▇ ▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in connection with the terms of this Agreement.
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(b) Notwithstanding the foregoing, and except as provided in
Paragraph 24.17 hereof in respect to Warranty Work, Seller's and Purchaser's
right to seek or obtain indemnification, damages or other legal recourse against
the other Party hereto (or any successor thereto) with respect to a breach of
any warranty, representation or covenant made in this Agreement or in any
documents, instruments or certificate executed and delivered pursuant hereto
shall terminate, and be of no further force or effect, unless (i) by the date
which is the last to occur of three hundred sixty five (365) days after the
termination of this Agreement and three hundred sixty five (365) days after the
expiration of the Earn-Out Period (as hereinafter defined), the aggrieved Party
shall have notified the other Party, in writing, that the aggrieved Party deems
that any such warranty, representation or covenant was breached in a material
respect when made (as updated or deemed updated) and states therein, with
reasonable particularity, the nature of the alleged breach and the section or
provision of the relevant document which was allegedly breached and (ii) by the
date which is the last to occur of three hundred ninety (390) days after the
termination of this Agreement and three hundred ninety (390) days after the
expiration of the Earn-Out Period, the aggrieved Party files suit against the
other Party seeking legal or equitable recourse as a consequence of such breach.
If the aggrieved Party timely notifies the other Party as called for in the
preceding clause (i) and timely files suit against the other Party as called for
in the preceding clause (ii), then the warranty, representation or covenant at
issue shall not terminate, but rather shall continue until the dispute is
settled between Seller and Purchaser or a final, non-appealable judgment is
issued by a court of competent jurisdiction with respect thereto.
(c) Within ten (10) days after receipt by an indemnified Party
of written notice of any claim or the commencement of any action under this
Paragraph 10.04 by a third party, the indemnified Party shall, if a demand in
respect thereof is to be made against the indemnifying Party pursuant to this
Paragraph 10.04, notify the indemnifying Party in writing of the claim or the
commencement of the action, provided the failure to notify the indemnifying
Party shall not relieve the indemnifying Party from any liability which it may
have to the indemnified Party other than under this Paragraph 10.04. Each
indemnitor shall be entitled, at its cost and expense, to contest any such third
party claim or action by all appropriate legal proceedings, provided that the
indemnitor shall have first notified the indemnitee of the indemnitor's
intention to do so within ten (10) days after the indemnitor's receipt of such
notice from the indemnitee. If the indemnitee joins in any such contest, the
indemnitor shall have full authority to determine all action to be taken with
respect thereto. If, after such opportunity, the indemnitor elects not to
contest any such claim or action, the indemnitor shall be bound by the
resolution of such claim or action obtained by the indemnitee. If required by
the indemnitor, the indemnitee shall cooperate fully with the indemnitor and its
counsel in contesting any such claim or action or, if appropriate, in making any
counterclaim or cross-claim against the subject third party asserting the claim
or bringing the action, but the indemnitor will reimburse the indemnitee for any
out-of-pocket costs and expenses incurred by the indemnitee in so cooperating.
The indemnitor shall pay to the indemnitee, in cash, all amounts to which the
indemnitee may become entitled by reason of the provisions of this Agreement,
such payment to be made within thirty (30) days after such amounts are finally
determined either by mutual agreement or by judgment of a court of competent
jurisdiction.
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11. SHARED CLOSING COSTS AND OTHER EXPENSES.
11.01 EXPENSES.
(a) Seller shall pay any and all fees or costs required to be
paid by Seller to the holder of the Mortgages in connection with the sale of the
Project, including, but not limited to prepayment fees, lender's consent fees or
lender's counsel fees, if any.
(b) Purchaser shall pay the costs and expenses of all Test and
Studies including any environmental audit of the Project and any other
investigations of the Project undertaken by Purchaser and all costs and
expenses, if any, charged by a lender to Purchaser in connection with any
financing or joint venturing of this transaction.
(c) Each Party shall pay its own attorney's fees.
11.02 SHARED CLOSING COSTS.
(a) Except as set forth above in Paragraph 11.01, if Closing
occurs, Seller and Purchaser shall each pay fifty percent (50%) of all of the
cost of the Commitment, the Title Policy (including the Endorsements and the
dating down and increasing the amount of coverage thereof as provided in
Paragraph 6.04 hereof), updating the Survey, transferring all Permits and
Guaranties to Purchaser, all escrow fees, and all transfer, conveyance, revenue,
excise, documentary or other tax or stamps payable as a result of the sale of
the Project (collectively, the "Shared Closing Costs").
(b) Except as provided otherwise in this Agreement, if Closing
does not occur because of the failure of a condition to either Party's
obligation to close this transaction (other than a default by a Party), each
Party shall pay fifty percent (50%) of the Shared Closing Costs.
(c) If Closing does not occur because Seller is in default,
Seller shall pay all of the Shared Closing Costs.
(d) If Closing does not occur and Purchaser is in default,
Purchaser shall pay all Shared Closing Costs.
12. CONDITIONS.
12.01 PURCHASER'S CONDITIONS. Purchaser shall not be obligated to close this
transaction unless and until:
(a) Seller has delivered to the Escrow Agent the pre-closing
and closing documents described in Paragraphs 5, 6 and 7 of this Agreement;
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(b) Title to the Project is delivered in accordance with the
provisions of this Agreement and the Title Company issues the Title Policy to
the Purchaser on the Closing Date, in the amount of that portion of the Purchase
Price computed as of the Closing Date in accordance with Paragraph 13.02 hereof,
insuring that indefeasible fee simple title to the Project is vested in
Purchaser, free and clear of all liens and encumbrances, except for the
Permitted Exceptions;
(c) The Project is delivered in the physical condition
provided for in this Agreement, reasonable wear and tear excepted; and
(d) If Seller is in default in the performance of any of its
obligations under this Agreement and such default has not been cured prior to
Closing or any of the representations or warranties of Seller are untrue or
inaccurate in any material respect when made or on the Closing Date.
12.02 SELLER'S CONDITIONS. Seller shall not be obligated to close this
transaction unless and until:
(a) Purchaser has delivered to the Escrow Agent that portion
of the Purchase Price computed as of the Closing Date in accordance with
Paragraph 13.02 hereof;
(b) Purchaser has delivered the closing documents described in
Paragraph 8 of this Agreement; and
(c) If Purchaser is in default in the performance of any of
its obligations under this Agreement and such default has not been cured by
Purchaser prior to Closing or any of the representations or warranties of
Purchaser is untrue or inaccurate in any material respect when made or on the
Closing Date.
12.03 RIGHTS UPON FAILURE OF A CONDITION. Except in the case of a default by
Seller under Paragraph 12.01(d) or by Purchaser under Paragraph 12.02(c), if a
condition of Closing of either Party is not satisfied as of the Closing Date,
the Party whose condition is not satisfied at Closing shall have the right to
(i) waive such condition and proceed with Closing, (ii) extend the Closing Date
to permit additional time to cause the unsatisfied condition to be satisfied, or
(iii) terminate this Agreement and both Parties shall be released of all rights
and obligations hereunder, except as otherwise specifically provided for herein.
If the failure of the condition is a default, the rights of the parties shall be
governed by Section 18 hereof.
13. EARN-OUT.
13.01 DEFINED TERMS. In addition to the other terms defined elsewhere in this
Agreement, the following terms shall have the following meaning:
(i) "Carry" shall mean the amount of the proportionate share
of real estate taxes and operating expenses for the Project that are (or would
have been) allocable to the
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premises that are the subject of a Lease or New Lease that becomes a Qualified
Lease for the period commencing on the Closing Date and ending on the date on
which the Earn-Out Payment for such Qualified Lease is due and payable
hereunder, reduced by the portion, if any, of such proportionate share for the
subject period that is paid to Purchaser by the Tenant or New Tenant of such
Qualified Lease. To the extent payable but not paid by the subject Tenant or New
Tenant, the portion of Rent from the such Tenant or New Tenant that applies to
the period prior the date the subject Earn-Out Payment is due and payable shall
be deemed Arrears (as hereinafter defined).
(ii) "Closing Payment" shall mean that amount that is equal to
(a) the aggregate sum of those capitalized Net Cash Flows for those Leases set
forth on the Rent Roll attached hereto as Schedule 3.01 that are Qualified
Leases as of the Closing Date (which aggregated sum, as of the date hereof based
on the presumption of which Leases will be Qualified Leases as of the Closing,
is $32,055,754.00); plus (b) the amount by which the annual Base Rent set forth
in said Schedule 3.01 for those Leases that are Qualified Leases as of the
Closing Date increases as verified by the applicable Tenant Estoppel, which
increase shall be capitalized using a rate of ten and 34/100ths percent
(10.34%); minus (c) the amount by which the annual Base Rent set forth in said
Schedule 3.01 for those Leases that are Qualified Leases as of the Closing Date
decreases as verified by the applicable Tenant Estoppel, which decrease shall be
capitalized using a rate of ten and 34/100ths percent (10.34%); and plus or
minus (d) the adjustments provided in Section 14 hereof.
(iii) "Earn-Out Payment" shall mean the amount that is equal
to the Net Cash Flow from those Leases or New Leases that are Qualified Leases
on the date (other than the Closing Date) such Earn-Out Payment is due as
provided in this Section 13 capitalized using a rate of ten and 34/100ths
percent (10.34%), minus (1) the Carry, and minus (2) any unsatisfied right of
offset permitted Purchaser as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof that was not previously credited to Purchaser.
(iv) "Force Majeure" shall mean delays resulting from (a)
labor disputes, (b) material or labor shortages, (c) Casualty, (d) acts of God
or the public enemy, (e) governmental embargo restrictions, (f) actions or
inactions of any governmental authority (including, but not limited to, the
failure to timely process or approve applications for the issuance or transfer
of Permits, licenses or approvals), (g) the adjustment of insurance claims
resulting from Casualty in excess of $1,000,000.00, (h) any other cause beyond
the reasonable control and reasonable anticipation of the applicable Party, but
excluding therefrom reasonable control resulting from monetary deficiency.
(v) "Net Cash Flow" shall mean, in respect to the applicable
Qualified Leases, an amount equal to the aggregate amount of the so-called "base
rent" (but not operating expenses, tax reimbursements, escalations based on a
consumer price index, or other similar Rent adjustments) payable for the full
calendar year on and after the date the subject Qualified Lease became a
Qualified Lease (without reduction for "free" Rent or Rent abatements), less any
non-reimbursable operating expenses and taxes for such calendar year. Purchaser
acknowledges that
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for those Leases set forth on Schedule 7.02(a) attached hereto, there are no
non-reimbursable operating expenses or taxes that shall be a deduction in the
determination of Net Cash Flow.
(vi) "New Lease" shall mean any lease (other than the Leases)
that lets or demises space in the Project and that is entered into by (a) the
Seller subsequent to the date hereof, but prior to the Closing Date, or (b) by
Purchaser or its successor(s) subsequent to the Closing Date, but prior to the
expiration of the Earn-Out Period.
(vii) "New Tenant" shall mean the tenant or lessee under a New
Lease.
(viii) "Other Center" or "Other Centers" shall mean (a) Maple
Grove Crossing, located in Minneapolis, Minnesota, of which Opus Corporation is
the Other Seller; (b) Eastchase Market, located in Forth Worth, Texas, of which
Opus South Corporation is the Other Seller; (c) Highland Grove, located in
Highland, Indiana, of which Opus North Corporation is the Other Seller; and (d)
Tanasbourne Town Center (Phase I), located in Hillsboro, Oregon, of which Bold,
L.L.C. is the Other Seller.
(ix) "Other Sale Agreement" or "Other Sale Agreements" shall
mean, in respect to the Other Centers, those other four Agreements of Purchase
and Sale entered into, effective as of the date hereof, by and between Purchaser
hereunder, as the purchaser thereunder, and, in respect to each Other Sale
Agreement, one of the Other Sellers, as the seller thereunder.
(x) "Other Seller" or "Other Sellers" shall mean any one or
more of the following: Opus South Corporation, a Florida corporation; Opus North
Corporation, an Illinois corporation; Opus Corporation, a Minnesota corporation;
and Bold, L.L.C, a Delaware limited liability company.
(xi) "Qualified Lease" shall mean, on the Closing Date or on
the dates during or after the Earn-Out Period on which an Earn-Out Payment is
required to be paid hereunder, any Lease or New Lease that, pursuant to the
terms thereof:
(a) has been fully executed by either Seller or
Purchaser (or its successor), as lessor, and by the Tenant or New
Tenant, as lessee;
(b) the Tenant or New Tenant (1) has taken possession
of the premises that is the subject of the Lease or New Lease; (2) has
commenced paying Rent thereunder, provided, however, if Seller pays to
Purchaser the amount of (y) any free Rent afforded such Tenant or New
Tenant, or (z) the amount of Rent that would have been payable by such
Tenant or New Tenant, but for a fitting-up or fixturing period afforded
to such Tenant or New Tenant, then the provisions of this clause (2)
shall not apply (provided that in the instance of clauses (y) and (z),
Seller shall not be permitted to pay such Rent for a period greater
than three (3) months); (3) has not terminated its Lease or New Lease
or been terminated by the landlord thereof as a result of a default
thereunder by such Tenant and New Tenant; (4) in the instance of the
Closing Date, if it occurs (i) on or before the fifteenth (15th) of a
month, the Rent payment obligations
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thereunder are not delinquent for a period longer than the month
preceding the month in which the Closing Date occurred, or (ii) after
the fifteenth (15th) of a month, the Rent payment obligations
thereunder are not delinquent for a period longer than the month in
which the Closing Date occurred; and (5) in the instance of an Earn-Out
Payment for the Earn-Out Period, the Rent payment obligations
thereunder are not delinquent for a period longer than the month in
which the Earn-Out Payment is due (in respect to clauses (4) and/or
(5), for any Rent that is past due longer than the period set forth
therein, "Monetary Default");
(c) the Tenant or New Tenant, as of the date an
Earn-Out Payment is required to be paid hereunder in respect thereto,
is not in voluntary or involuntary proceedings filed by or against it
under Section 365 of the U.S. Bankruptcy Code ("Bankruptcy
Proceeding"); and
(d) the Earn-Out Conditions (as hereinafter defined)
therefor have been satisfied.
(xii) "Vacant Space" shall mean space in the Project that is
rentable for commercial purposes and that is not the subject of a Lease, New
Lease or any other occupancy right as of the Closing Date. If a Lease, New Lease
or any other occupancy right that is fully executed prior to the expiration of
the First Segment (as hereinafter defined) is terminated prior to the expiration
of the First Segment (provided Purchaser consents, in its sole discretion, to
such termination), no Closing Payment or Earn-Out Payment has been paid in
respect to such terminated Lease, New Lease or any other occupancy right, and
the subject space is not the subject of a different Lease, New Lease or any
other occupancy right at the expiration of the First Segment, then such space
shall also be deemed to be "Vacant Space" at the expiration of the First
Segment.
13.02 CLOSING DATE PURCHASE PRICE COMPUTATION. On the Closing Date, as part of
the Purchase Price, Purchaser shall pay to Seller the Closing Payment computed
in accordance with the provisions of Paragraph 13.01(ii) hereof.
13.03 LEASE ASSIGNMENT RESERVATION. Notwithstanding any provisions to the
contrary contained in this Agreement, Seller shall be entitled to reserve from
the Lease Assignment ("Assignment Reservation") all of the remedies (but
excluding any eviction actions or summary depossess actions) of the landlord
under the subject Leases or New Leases (that are executed by Seller) that
pertain to (i) an event(s) that occurred prior to the Closing Date, but the
obligation of indemnity by or performance of the subject Tenant or New Tenant in
respect to such event does not arise until on or subsequent to the Closing Date;
(ii) the recovery of Rent that is either due and payable prior to the Closing
Date or due prior to the Closing Date, but not payable until thereafter,
including Unknown Rents (as hereinafter defined); and (iii) the recovery of any
base rent portion of Rent that is due under Leases or New Leases prior to the
date ("Reserved Base Rent Date") that is the first to occur of (y) the date on
which the Earn-Out Payment in respect thereto is paid (if any is required as
hereafter provided), and (z) the date ("Lease Reservation Date") that is five
(5) months subsequent to the date (subject to Force
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Majeure) that is set forth in the subject Lease or New Lease for the
commencement of the term thereof. Because Purchaser is to be the payee of Rent
under Leases and New Leases due on and after the Closing Date, the Lease
Assignment shall not specifically reserve the Assignment Reservation provisions
provided in clause (iii). However, provided Purchaser is not required to make
any out-of-pocket expenditures to third parties and Purchaser applies all Rents
received after the Closing first to Rent then due under the applicable Leases
and New Leases as provided in Paragraph 14.02 hereof, Purchaser agrees to fully
cooperate with Seller in prosecuting against the applicable Tenant or New
Tenants the rights reserved in the Assignment Reservation, provided, further,
however, that prior to the commencement of any action or proceeding against such
Tenant or New Tenant, Seller notifies Purchaser of its intent to commence any
such action or proceeding and affords Purchaser a reasonable period of time to
resolve the matter with such Tenant or New Tenant before Seller commences any
such action or proceeding.
13.04 NEW LEASES. Except for New Leases presented to Purchaser by Seller as
hereafter provided, Purchaser and its successors, during the Earn-Out Period,
shall not enter into any lease, tenancy, occupancy agreement, rental agreement,
option, license or concession for space in the Project (collectively, "Rental
Undertaking"), without first obtaining Seller's prior written consent, which
consent shall not be unreasonably withheld or delayed. If Seller consents as
aforesaid to a Rental Undertaking, such approved Rental Undertaking shall be
deemed a New Lease. During the period commencing on the date hereof and ending
on the expiration of the Earn-Out Period, Seller shall have the exclusive right
to negotiate prospective New Leases, except in the instance of Rental
Undertakings to which Seller has consented as aforesaid. Purchaser agrees to
bind its successors, assigns and their successors and assigns to the provisions
of this Paragraph 13.04.
Seller shall keep Purchaser reasonably advised of the terms,
provisions and conditions of such prospective New Leases as well as the identity
of and the available financial information pertaining to the lessee ("Prospect")
of a proposed New Lease. Purchaser agrees to reasonably cooperate with and
advise Seller whether the credit worthiness of the Prospect is acceptable to
Purchase and of those terms, provisions and conditions proposed for prospective
New Leases that Purchaser approves or disapproves. Purchaser agrees not to
unreasonably withhold or delay its consent and approval of the credit worthiness
of the Prospect or of such terms, provisions and conditions, provided the same
are reasonably consistent with the Leases and New Leases (or does not violate
any provision thereof) in respect to (i) rental rates and proposed Tenant
Inducements for comparable space within the Project for Prospects of comparable
net worth, (ii) duration of lease term, and (iii) exclusive uses proposed for
the Prospect.
Under the provisions of a New Lease, (i) for the period prior
to the Closing Date, Seller shall be the landlord thereof, and (ii) for the
Earn-Out Period, Purchaser shall be the landlord thereof and Seller shall be a
party thereto, as contractor, for the limited purpose of performing the New
Lease Obligations (as hereinafter defined).
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When and as a final draft of a New Lease is prepared, Seller
shall deliver a true and complete copy thereof to Purchaser along with all
financial information pertaining to the Prospect that is in Seller's possession
or under its control that was not theretofore delivered to Purchaser. Purchaser
shall advise Seller, in writing, within ten (10) business days after Purchaser's
receipt of the draft New Lease, whether Purchaser approves or disapproves the
same. If Purchaser notifies Seller as aforesaid of Purchaser's disapproval of a
draft New Lease ("Disapproved Lease"), such notice shall set forth, in
reasonable particularity, the reasons for Purchaser's disapproval. If Purchaser
fails to so notify Seller of whether the draft New Lease is approved or
disapproved as aforesaid, it shall act as notice to Seller that Purchaser has
approved the same. When a prospective New Lease has been approved or is deemed
to have been approved, (i) in the instance of prospective New Leases to be
executed prior to the Closing, Seller shall execute the same as landlord
thereunder, and (ii) in the instance of prospective New Leases to be executed
during the Earn-Out Period, Seller shall promptly thereafter deliver execution
originals of the same to Purchaser that have been executed by the subject
Prospect, as the New Tenant, and by the Seller in respect to the New Lease
Obligations. Within five (5) business days following Purchaser's receipt of
execution originals as aforesaid in clause (ii), Purchaser shall execute and
return the same to Seller. If Purchaser fails to return, when required, said
originals executed by Purchaser as aforesaid, such New Lease ("Unsigned Lease")
shall automatically be deemed a New Lease that is fully executed during the
Earn-Out Segment (as hereinafter defined) in which Seller delivered it to
Purchaser for execution, and shall be deemed a Qualified Lease and the Earn-Out
Conditions in respect thereto satisfied on the sixth (6th) business day after it
was delivered to Purchaser, notwithstanding the provisions of Paragraph
13.01(xi) hereof. As a result, subject to the provisions of the next sentence,
Purchaser shall pay to Seller, on the twenty-fifth (25th) day of the month first
occurring thereafter, the Earn-Out Payment computed in respect to such Unsigned
Lease. However, in the event, after the date an Unsigned Lease became a
Qualified Lease as aforesaid and prior to the date the Prospect thereof
withdraws its signature thereto, Purchaser executes and returns to Seller such
Unsigned Lease, Seller agrees to be bound by and to perform the New Lease
Obligations for such Unsigned Lease.
In the event, at any time prior to the date that is three (3)
months subsequent to the expiration date of the Earn-Out Segment in which there
was a Disapproved Lease, Purchaser (or its successors or assigns) enters into
any Rental Undertaking with the Prospect of such Disapproved Lease, such Rental
Undertaking shall automatically, notwithstanding the provisions of Paragraph
13.01(xi) hereof, be deemed to be a Qualified Lease, and Purchaser shall pay to
Seller, on the twenty-fifth (25th) day of the month first occurring after such
Rental Undertaking was signed by Purchaser, an amount equal to (a) the Earn-Out
Payment computed in respect to the provisions of such Rental Undertaking as a
Qualified Lease, minus (b) the Footage Payment, if any, that was previously paid
by Purchaser in respect to the portion of the Project that is the subject of
such Rental Undertaking, minus, (c) the costs incurred by Purchaser to unrelated
third parties for the construction and completion of tenant improvements and
broker's commissions for the subject Rental Undertaking, but in an amount, in
either instance, not greater than the cost of those tenant improvements and
Commissions provided in the Disapproved Lease, and minus
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(d) any unsatisfied right of offset afforded Purchaser pursuant to Paragraphs
5.04, 9.03, 14.06, 14.07 and 16.01 hereof. The obligations of Purchaser under
the provisions of this grammatical paragraph shall survive the Closing and the
later expiration of the Earn-Out Period.
13.05 EARN-OUT PERIOD. The hereafter provided period of time subsequent to the
Closing Date shall be divided into two segments (respectively, "First Segment,"
and "Second Segment," and generally, "Earn-Out Segment,"). Each Earn-Out Segment
during which Seller has elected, as hereafter provided, to extend the term of
this Agreement shall be for a period of five (5) months or for such longer
period as provided in Section 13.06 hereof. The First Segment shall commence on
the day after the Closing Date, and the Second Segment (if Seller elected or is
deemed to have elected to extend the Earn-Out Period) shall commence on the day
after the expiration of the First Segment. Provided the Closing occurs, Seller
hereby elects to extend the term of this Agreement for the First Segment. Seller
may elect, in its sole discretion, to extend the term of this Agreement for the
Second Segment by delivering to Purchaser Seller's written notice of such
election ("Earn-Out Extension Notice") not less than thirty (30) days prior to
the expiration of the First Segment. If Seller fails to deliver, as aforesaid,
its Earn-Out Extension Notice, it shall act as notice to Purchaser that Seller
has elected not to extend the term of this Agreement for the Second Segment.
However, notwithstanding the preceding sentence, if one or more of the Other
Sellers elect(s), under the provisions of its respective Other Sale Agreement,
to extend for the Second Segment, Seller, regardless of its election hereunder,
shall be deemed to have elected to so extend this Agreement, except that an
election by the Other Seller under the terms of the Other Sale Agreement for
Tanasbourne Town Center (Phase I) to extend for the second segment thereunder
shall not be deemed an election of Seller hereunder to extend the Earn-Out
Period for the Second Segment, if the closing for such Other Center is after the
Closing. The aggregate of the Earn-Out Segments for which Seller has elected or
is deemed to have elected to extend the term hereof shall be referred to as the
"Earn-Out Period."
13.06 CASUALTY DURING EARN-OUT PERIOD. If, during the Earn-Out Period, there is
a Casualty to a Vacant Space, the Earn-Out Period and the applicable Earn-Out
Segment shall be tolled as to the damaged Vacant Space until such time as
Purchaser causes such damaged Vacant Space to be restored to a habitable
condition, exclusive of tenant's improvements. If, during the Earn-Out Period,
there is a Casualty to twenty five percent (25%) or more of the Square Footage
of the Improvements (exclusive of the Vacant Space), the Earn-Out Period and the
applicable Earn-Out Segment shall be tolled until such time as such damaged
Improvements are restored to a condition so that the Tenants or New Tenants
thereof are open and operating their respective businesses therein, except in
respect to those Tenants or New Tenants whose Leases or New Leases were
terminated as a result of the subject Casualty. Purchaser agrees to promptly
notify Seller, in writing, of the occurrence of such a Casualty. Notwithstanding
the foregoing, in the event of such a Casualty, Seller shall deliver to
Purchaser, within ten (10) days following the date of Seller's receipt of
Purchaser's written notification, Seller's written notice ("Casualty Notice") of
its good faith determination that such Casualty is the proper basis for the
tolling of the applicable Earn-Out Segment. If Seller fails to deliver a
Casualty Notice as aforesaid, it shall act as notice to Purchaser that Seller is
not claiming any tolling of the applicable Earn-Out Segment in respect to such
Casualty. Regardless of a Casualty Notice, there will be no tolling of the
Earn-Out Period if Purchaser restores the applicable portion of the Improvements
within thirty (30)
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days following the date of such Casualty. However, if such restoration is not
completed within said thirty (30) days, the Earn-Out Period shall be tolled
commencing on the date of the Casualty and ending on the date provided in the
first two sentences of this Paragraph 13.06. During the Earn-Out Period, subject
to Force Majeure, Purchaser agrees to diligently undertake the restoration of
the applicable portion of the Improvements following a Casualty thereto.
13.07 EARN-OUT PAYMENTS. In respect to Leases or New Leases that are fully
executed prior to the expiration of the Earn-Out Period, on the twenty-fifth
(25th) day of each calendar month after the Closing Date, provided the subject
Lease or New Lease is a Qualified Lease prior to the Lease Reservation Date,
Purchaser shall pay to Seller the Earn-Out Payment computed in respect to those
Leases and New Leases that became, for the first time, Qualified Leases during
the preceding month and for which no Earn-Out Payment had been previously paid
to Seller. In the event a New Lease is executed during the First or Second
Segment, but it does not become a Qualified Lease until after the expiration of
the Earn-Out Period, but prior to the Lease Reservation Date, Purchaser, subject
to the satisfaction of the Earn-Out Conditions, shall pay to Seller at the time
aforesaid, an amount equal to the Earn-Out Payment computed in respect to such
subsequent Qualified Lease. Any Earn-Out Payment shall be subject to any
unsatisfied right of offset as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof.
Notwithstanding the foregoing, the Earn-Out Payment or Closing
Payment in respect to a particular Qualified Lease (excluding those that are
Qualified Leases in respect to an Unsigned Lease or a Rental Undertaking with
the Prospect of a Disapproved Lease as provided in each instance in Paragraph
13.04 hereof) shall not be due and payable by Purchaser to Seller, unless and
until, Seller, prior to the Lease Reservation Date, has delivered or caused to
be delivered to Purchaser, in respect to the subject Qualified Lease, (i) a
fully executed original thereof; (ii) a certificate of occupancy from the
applicable governmental authority authorizing the uninterrupted occupancy by the
subject Tenant or New Tenant of the subject premises; (iii) the applicable
Tenant Estoppel containing no material exceptions or Seller's Estoppel, if in
accordance with the provisions of Paragraph 7.15 hereof; (iv) Schedule
10.01(xvii) from Seller in respect to the subject Lease or New Lease, updated to
the date the Earn-Out Payment is due, setting forth any unsatisfied Tenant
Inducement in respect thereto; (v) evidence, in form and content reasonably
satisfactory to Purchaser, that the portion of Tenant Inducements payable to the
subject Tenant or New Tenant has been paid by Seller; (vi) an original of the
insurance certificates required from the subject New Tenant under the Qualified
Lease; (vii) the date down and increased coverage endorsement for the Title
Policy required pursuant to the provisions of Paragraph 6.04 hereof, provided
Purchaser pays fifty percent (50%) of the Shared Closing Costs in respect
thereto; and (viii) copies of the "as-built" plans and specifications for the
tenant improvements for the subject Qualified Lease (collectively, in respect to
clauses (i) through (viii) above, "Earn-Out Conditions"). The Earn-Out Payment
obligations of this Paragraph 13.07 shall survive the Closing Date and the later
termination of this Agreement. If the Earn-Out Conditions are not satisfied for
the subject Lease or New Lease on or prior to the Lease Reservation Date
therefor, then Purchaser shall have no obligation to make any Earn-Out Payment
in respect thereto.
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13.08 FOOTAGE PAYMENT. In the event Seller elects not to extend the Earn-Out
Period for the Second Segment, Purchaser shall pay to Seller, when hereafter
provided, an amount ("Footage Payment") equal to the Square Footage (as
hereinafter defined) of the Vacant Space existing at the expiration of the First
Segment, multiplied by (i) $55.00 for that portion of the Vacant Space that is
not greater than one hundred feet in depth as measured from the front exterior
surface to the rear exterior surface, and (ii) $45.00 for that portion of the
Vacant Space that is greater than one hundred feet in depth measured as
aforesaid. If Seller elects or is deemed to have elected to extend the term of
the Earn-Out Period for the Second Segment, there will be no Footage Payment.
"Square Footage" shall mean the aggregate number of square feet of the Vacant
Space measured from the front exterior surface to the rear exterior surface and
from the middle of demising walls of such Vacant Space. Within forty-five (45)
days following the date Seller has elected or is deemed to have elected not to
extend the term of the Earn-Out Period for the Second Segment, Seller shall
deliver to Purchaser Seller's computation of the amount of the Footage Payment
("Footage Computation") which will set forth the identity of the Vacant Space,
the depth of the Vacant Space, and the amount of the Square Footage contained
therein. Unless Purchaser notifies Seller within ten (10) business days
following Purchaser's receipt of the Computation Notice that Purchaser disagrees
with the provisions thereof, Purchaser shall pay to Seller, within thirty (30)
days following Purchaser's receipt of the Computation Notice the amount of the
Footage Payment provided therein. If Purchaser does object to the Computation
Notice as aforesaid, Purchaser and Seller shall promptly confer, in good faith,
to resolve the disagreement. When the disagreement is resolved, within ten (10)
business days thereafter, Purchaser shall pay to Seller the resolved Footage
Payment. Any Footage Payment shall be subject to any unsatisfied right of offset
as provided in Paragraphs 5.04, 9.03, 14.06, 14.07 and 16.01 hereof.
13.09 INTENTIONALLY DELETED.
13.10 SELLER'S NEW LEASE OBLIGATIONS. Seller, at its sole cost and expense,
shall (i) apply for and obtain all permits and licenses necessary to construct
all tenant improvements required under New Leases; (ii) subject to Force
Majeure, construct and complete, when required under the provisions of New
Leases, all such tenant improvements; (iii) pay, when due, all Commissions in
respect to New Leases; (iv) provide and undertake the required New Lease
construction and warranty work ("Tenant Warranty"); and (v) provide the
builder's "all risk" and general liability insurance coverage required by the
subject New Lease in respect to such construction (collectively in respect to
clauses (i) through (v), "New Lease Obligations").
13.11 PUNCHLIST. The portion of the Purchase Price payable at Closing as
computed pursuant to the provisions of Paragraph 13.02 hereof and the amount of
each Earn-Out Payment due hereunder shall be reduced by an amount which shall be
held by Purchaser and disbursed as hereafter provided, which amount shall equal
one hundred and twenty five percent (125%) of the reasonably estimated cost of
completing all of the tenant improvements for work for Leases and New Leases
that are Qualified Leases as of the Closing Date and/or Earn-Out date. The
amount of the Footage Payment payable hereunder shall be reduced by an amount
which shall be held by Purchaser and disbursed as hereafter provided, which
amount shall equal one hundred twenty
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five percent (125%) of the reasonably estimated cost of constructing and
completing substantially to those standards for the shell and core portion of
those Improvements comprising the Project that are each set forth on the Shell
and Core List and Standard attached hereto as Schedule 13.11 (collectively, in
respect to the first and second sentences of this Paragraph 13.11, "Punchlist
Holdback"). The Punchlist Holdback shall be compiled in a line item format in
respect to major segments for completing such incomplete items and shall set
forth the reasonable cost of completing each such line item. If Seller and
Purchaser, within fifteen (15) days prior to the Closing Date, are unable to
agree on the scope or amount of each Punchlist Holdback line item, Seller and
Purchaser shall appoint a third party contractor to make such determination, and
the scope and amount so determined by the third party contractor shall be
binding upon the Parties. When the scope and amount of the Punchlist Holdback is
determined as aforesaid, it shall be attached to this Agreement, respectively,
as Schedules 13.11(a)(1), 13.11(a)(2), etc. Thereafter, subject to Force
Majeure, Seller, at its sole cost and expense (regardless of the amount of the
Punchlist Holdback), agrees to diligently prosecute to completion ("Punchlist
Work") all of the items on each Schedule 13.11(a) attached hereto. The
obligation of Seller to complete the Punchlist Work is absolute and
unconditional. Monthly, after the Closing Date, when Punchlist Work pertaining
to various line items on the Punchlist Holdback is complete, Purchaser shall pay
to Seller one hundred percent (100%) of that portion of the Punchlist Holdback
applicable to such completed Punchlist Work (thereby retaining twenty-five
percent (25%) thereof), provided Seller has delivered to Purchaser a Form G704
in the form attached to the Exhibit Agreement as Schedule 13.11(b), executed by
Seller (or its contractor) setting forth that the subject line item of Punchlist
Work has been completed.
When all of the Punchlist Work has been completed and the
Forms G704 therefor have been delivered to the Purchaser, Purchaser shall pay to
Seller the remaining twenty-five percent (25%) of the Punchlist Holdback,
provided Seller has delivered to the Purchaser the following documents:
(a) Evidence that all payment in the manner required by the applicable
contract, agreement or undertaking is paid in full in respect to the subject
Punchlist Work;
(b) Lien waivers required by (and that are reasonably satisfactory to)
the Title Company from the Seller and its contractor and subcontractors that are
necessary to insure over Liens in respect to the Punchlist Work; and
(c) In respect to the portion(s) of Punchlist Work for incomplete
tenant improvements under a Lease or New Lease, an acknowledgment from the
subject Tenant or New Tenant, in form and substance reasonably acceptable to
Purchaser, setting forth the applicable Tenant's or New Tenant's acceptance of
completion of the subject tenant improvements.
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS.
All of the items of income and expense mentioned in this
Section 14 shall be apportioned or adjusted between Seller and Purchaser as of
12:01 A.M., local time of the Project, as of the Closing Date. Except as
provided in the instance of Unknown Rents as provided in
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Paragraph 14.03 hereof, all apportionments and adjustments shall be made as of
the Closing Date. To the extent that the apportionments and adjustments, at the
Closing, are based upon any errors or omissions in the calculation or
determination thereof, promptly after notice of such errors or omissions, the
Parties shall readjust or reapportion and make the payment required as a result
thereof.
14.01 RENTS. The fixed and minimum rents and all additional rents, escalation
charges, common area maintenance charges, imposition charges, heating and
cooling charges, insurance charges, charges for utilities, percentage rent, and
all other rents, charges and commissions (collectively, the "Rents") payable by
the Tenants under the Leases and New Leases that are Qualified Leases as of the
Closing Date, to the extent collected by Seller on or prior to the Closing Date
and which represent payments of Rents applicable to a period of time subsequent
to the Closing Date. Notwithstanding the foregoing, Seller shall be permitted
the rights against Tenants and New Tenants as provided in the Assignment
Reservation set forth in Paragraph 13.03 hereof.
14.02 ARREARS. Any of the Rents that are due and payable by the Tenants and New
Tenants on or prior to the Closing Date, but which have not been collected by
the Seller on or prior to the Closing Date, or payment of which has been
deferred until after the Closing Date ("Arrears"), to the extent applicable to
any period of time on or prior to the Closing Date, and which are paid after the
Closing Date shall, subject to the terms below, be paid to Seller and be the
subject of the Assignment Reservation, and if the Arrears are received by
Purchaser, Purchaser shall pay the Arrears to Seller after collection by
Purchaser, provided, however, that if any Arrears exist on the Closing Date, all
Rents, received and collected by Purchaser after the Closing Date shall be
applied first to payment of all Rents due Purchaser and second to all Arrears
due Seller. Purchaser shall have no obligation to collect any Arrears or to
commence any action to enforce the obligation of Tenants to pay the Arrears, but
Purchaser agrees to cooperate with Seller in the collection of such Arrears, but
only as provided in Paragraph 13.03 hereof. In the event Purchaser elects to
commence any action or proceeding against any Tenant and as a result thereof
collects any Arrears which Purchaser is required to remit to Seller, Purchaser
shall be entitled to deduct and retain a portion of the amount collected which
is equal to the Pro Rata Share (as hereinafter defined) of the Litigation
Expenses incurred by Purchaser in connection with the collection of the Arrears.
Notwithstanding anything to the contrary, Seller, as a result of the Assignment
Reservation, shall have the right, after delivery of prior written notice to
Purchaser, to commence any action or proceeding, except a summary depossess or
any eviction actions, against any Tenant for Seller's portion of any Arrears.
14.03 UNKNOWN RENTS. Any Rents which have accrued but are not due and payable on
the Closing Date because the applicable Lease or New Lease year or other fiscal
period for which such Rents are to be computed has not yet expired (including by
way of example only, escalation charges and percentage rents) or if it has
expired but cannot for any other reason be calculated by the Parties on the
Closing Date ("Unknown Rents"), shall be apportioned promptly after (i) the
expiration of the applicable Lease or New Lease year or other fiscal period, and
(ii) the receipt and collection of the Unknown Rents. Purchaser shall make
reasonable efforts to ascertain the amount of the Unknown Rents (but, shall not
be obligated to commence any action
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or proceeding to collect Unknown Rents, except that Purchaser shall reasonably
cooperate with Seller in respect to the Assignment Reservation as provided in
Paragraph 13.03 hereof), and when the amounts of the Unknown Rents are
ascertained, received and collected by Purchaser, Purchaser shall promptly pay
to Seller a portion (the "Pro Rata Share") of the Unknown Rents determined by
multiplying the Unknown Rents collected by a fraction, the numerator of which is
the number of days in the applicable Lease or New Lease year or other fiscal
period up to but excluding the Closing Date and the denominator of which is the
number of days in the applicable Lease or New Lease year or other fiscal period,
less any monies Seller has previously received on account of the Unknown Rents
and Seller's Pro Rata Share of the Litigation Expenses incurred by Purchaser in
the collection of the Unknown Rents. In the event it is determined after Closing
that the amount of the Unknown Rents received by Seller exceeds the Seller's Pro
Rata Share, Seller shall promptly pay such excess to Purchaser upon demand.
Notwithstanding anything to the contrary, Seller shall have the right to
commence any action or proceeding, except a summary depossess or an eviction
action, against any Tenant for Seller's portion of any Unknown Rents.
14.04 UTILITIES. To the extent not payable by Tenants or New Tenants, the actual
or estimated charges for utilities accrued and payable by Seller prior to the
Closing Date, provided Purchaser is required by law or elects to assume Seller's
account. Deposits for utilities (the "Utility Deposits"), plus any interest on
the Utility Deposits to which Seller is or will be entitled, held by the
provider of the utilities and which are freely transferable to Purchaser, shall,
at the election of the Purchaser, be assigned by Seller to Purchaser and
Purchaser shall pay Seller the full amount thereof at Closing, in addition to
the applicable portion of the Purchase Price. Seller shall retain the right to
obtain a refund of any Utility Deposits which are not required to be assigned to
Purchaser and Purchaser will cooperate with Seller in obtaining any refund. With
respect to water, sewer, electric and gas charges, Seller shall make reasonable
efforts to obtain a reading of the meter or other consumption measuring device
as of the Closing Date. If the Seller is unable to obtain such a reading, Seller
shall furnish a reading as of a date not more than thirty (30) days prior to the
Closing Date and the unknown charges shall be apportioned on the basis of an
estimate computed by utilizing such reading and the most recent ▇▇▇▇ from the
utility provider, computed on an equal per diem basis.
14.05 CONTRACTS. Prepaid charges, payments and accrued charges under the
Contracts set forth in Schedule 7.05(a) attached hereto, to the extent not paid
by Tenants or New Tenants. However, if paid by Tenants or New Tenants, Seller
shall credit Purchaser with the amount thereof received by Seller from such
Tenants or New Tenants, to the extent not applied to the payment obligations
under the Contracts.
14.06 TAXES. Seller shall cause all real estate taxes for 1995 and prior years
to have been paid as of the Closing Date. The 1996 real estate taxes for the
Project shall be pro-rated as of the Closing Date. Seller's pro-rata share of
such real estate taxes shall be calculated based upon the number of days
elapsing from January 1, 1996 to, but not including, the Closing Date in
relation to 365 days in the year 1996. Purchaser shall be responsible for the
remaining portion of such real estate taxes, commencing with the Closing Date
and continuing through December 31, 1996. In the event the statement for the
total 1996 real estate taxes is
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not available as of the Closing Date, the Parties shall make the pro-ration
provided for herein on the basis of the estimated budget for 1996 prepared by
Seller's Property Manager for the Project for purposes of establishing Real
Estate Tax Rent (as hereinafter defined) for Tenants and New Tenants occupying
space in the Project, and shall thereafter make such adjustments as may be
necessary at such time as the tax statement for the total real estate taxes for
1996 becomes available. The Closing Payment shall be reduced by the amount of
Seller's pro-rata share of the 1996 real estate taxes; provided, however, that
Seller shall be entitled to a reduction in such pro-rata share in an amount
equal to any portion of the 1996 real estate taxes paid by Seller on or before
Closing Date. Notwithstanding the foregoing, at the Closing, to the extent there
are Tenants or New Tenants that pay their Real Estate Tax Rent on a lump sum
basis, Seller shall not be required to credit Purchaser with that portion of the
pro-rata share of 1996 real estate taxes for the period from January 1 to the
Closing Date for which such lump sum paying Tenants and New Tenants are
responsible ("Lump Sum Non-Credit"). However, if any such Tenant or New Tenant
fails to pay their respective lump sum portion of Real Estate Tax Rent when due
that is applicable to the period from January 1, 1996, to the Closing Date,
Purchaser shall notify Seller of the same, in writing, and Seller shall pay such
unpaid amount within five (5) business days and such amount so paid by Seller
shall be deemed Arrears. In the event Seller fails to pay such amount, Purchaser
shall be permitted to offset any Footage Payment, Earn-Out Payment or other sum
payable by Purchaser to Seller hereunder that is thereafter due. To the extent
there are insufficient future payments due Seller from Purchaser against which
to make such offset, Purchaser shall have the remedy against Seller as provided
in Paragraph 18.05 hereof.
The portion of the Rent under Leases and New Leases that pertains to
the obligations of Tenants and New Tenants to pay their respective pro-rata
share of real estate taxes (or special assessments provided in Paragraph 14.07
hereof) shall be called "Real Estate Tax Rent." Certain Tenants and New Tenants
pay their Real Estate Tax Rent in a lump sum(s) and others pay their Real Estate
Tax Rent on a monthly basis. The portion of Real Estate Tax Rent that pertains
to the period prior to the Closing Date and which was paid to Seller by those
Tenants and New Tenants who pay the same on a monthly or lump sum basis shall be
retained by Seller. Any Real Estate Tax Rent received by Seller prior to the
Closing Date that pertains to the period on or subsequent to the Closing Date
shall be credited to Purchaser at the Closing. Any Real Estate Tax Rent received
by Purchaser after the Closing that pertains to the period prior to the Closing
Date (except that which is a Lump Sum Non-Credit) shall be paid by Purchaser to
Seller. The Real Estate Tax Rent retained by Seller shall be subject to
adjustment (increases or decreases) at such time as Purchaser reconciles the
estimated payment of Real Estate Tax Rent with the amount of the actual real
estate taxes paid for 1996.
14.07 ASSESSMENT INSTALLMENTS. If, as of the Closing Date, the Project is
encumbered or otherwise affected by any assessment (whether or not a lien) which
becomes payable in installments, for the installment that is due in payable in
1996, Seller shall credit Purchaser with the pro-rata portion of such
installment from January 1, 1996 to the Closing Date, except for an amount that
would be equal to the Lump Sum Non-Credit. Such pro-
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ration shall be made on the basis that the number of days from January 1,1996
to, but excluding, the Closing Date bears to three hundred and sixty five (365)
days. The portion of Real Estate Tax Rent applicable to the installment of
assessment payable in 1996 that pertains to the period prior to the Closing Date
and which was paid to Seller by Tenants or New Tenants shall be retained by
Seller. Any Real Estate Tax Rent applicable to such installment or assessment
that was received by Seller prior to the Closing Date that pertains to the
period on or subsequent to the Closing Date shall be credited to Purchaser at
such Closing. Any Real Estate Tax applicable to such installment of assessment
received by Purchaser after the Closing Date that pertains to the period prior
to the Closing Date (except that which is a Lump Sum Non-Credit) shall be paid
by Purchaser to Seller. If any Tenant or New Tenant who pays their respective
Real Estate Tax Rent on a lump sum basis and for whom a Lump Sum Non-Credit was
provided, Seller shall remain responsible for the Lump Sum Non-Credit as
provided in Paragraph 14.06.
14.08 PERMITS. The (i) Vault taxes and rents, if any, due and payable in 1996
(to the extent not the obligation of Tenants or New Tenants to pay), (ii) Permit
fees to the extent transferable, and (iii) government inspection fees shall be
apportioned as of the Closing Date.
14.09 SECURITY DEPOSITS/TENANT INDUCEMENTS. Purchaser shall receive a credit
against the portion of the Purchase Price payable on the Closing Date in an
amount equal to the sum of (i) the Security Deposits, if any, which Seller is
holding pursuant to the Leases and New Leases and as set forth in Schedule
7.02(a) attached hereto, plus (ii) all costs, expenses and losses (including
without limitation, reductions in Rent) which will be incurred by Purchaser
after the Closing as a result of all Tenant Inducements given on or before the
Closing Date which are not paid in full as of Closing in respect to Qualified
Leases as of the Closing Date.
14.10 CUSTOMARY ITEMS. Any other items of income and expense not specifically
mentioned in this Section 14 which are customarily apportioned in real property
transactions of the character contemplated by this Agreement.
15. CLOSING.
15.01 CLOSING AND CLOSING DATE. The closing of this transaction ("Closing")
shall be held at the office of the Opus Properties on June 27, 1996 (the
"Closing Date"), subject to extensions pursuant to Paragraphs 5.04, 6.03, 7.20,
and 12.03.
16. POSSESSION.
16.01 POSSESSION AND POST CLOSING WORK. Purchaser shall be entitled to
possession on the Closing Date, subject only to the Leases, New Leases,
Assignment Reservation and the Permitted Exceptions. Notwithstanding the
foregoing, subsequent to the Closing Date, Seller and Seller's agents,
contractors and subcontractors shall have access to such portions of the Project
necessary and convenient to commence and/or complete (i) the Punchlist Work;
(ii) Unacceptable Conditions; (iii) Seller's New Lease Obligations; (iv)
incomplete tenant improvement work under Leases; (v) Warranty Work; and (vi)
Tenant Inducements (collectively
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in respect to clauses (i) through (vi), "Post Closing Work"). All Post Closing
Work shall be done (a) at Seller's sole cost and expense, (b) in a fashion to
reasonably minimize, taking into account the scope and nature of the Post
Closing Work, the disruption to Tenants and New Tenants and to the operation and
management of the Project by Purchaser and Purchaser's agents, (c) in compliance
with Environmental Laws, and (d) in any event, subject to Force Majeure, with
diligence. The obligation of Seller to complete the Post Closing Work and to pay
Commissions and pay all financial obligations of Seller hereunder is absolute
and unconditional, and Seller agrees to indemnify, defend and hold Purchaser and
its successors and assigns and the Project harmless (including Litigation
Expenses) from and against any and all (except as provided in Paragraph 23
hereof) loss, damage, claim, demand, liability, Lien, action, cause of action,
judgment or decree as a result of (A) damage or destruction to property,
including title to the Project, (B) personal injury, or (C) loss of Rent
resulting from the performance or non-performance of the Post Closing Work by
Seller (except that which is caused, in whole or in part, by the negligence,
willful misconduct or breach of contract by Purchaser or its successors and
assigns or their respective agents, employees, contractors or subcontractors),
and resulting from Seller's failure to pay Commissions or to pay all financial
obligations of Seller hereunder. In the event Seller fails to perform the Post
Closing Work, pay Commissions or pay all financial obligations of Seller
hereunder, Purchaser may deduct from the next succeeding Earn-Out Payment
payable hereunder after the event of Seller's failure as aforesaid, the cost and
expense incurred by Purchaser in completing such incomplete Post Closing Work,
paying such unpaid Commissions or paying all financial obligations of Seller
hereunder. During the performance of any Post Closing Work, Seller shall
maintain commercial public liability insurance in an amount and issued by
carriers that are reasonably satisfactory to Purchaser naming Purchaser and
those other persons or entities reasonably designated by Purchaser as additional
insureds.
17. RISK OF LOSS.
17.01 RISK. Except as provided in Paragraphs 17.02 and 17.03, the risk of loss
or damage (the "Loss") to the Project by (i) condemnation, eminent domain or
similar actions or proceedings or threat thereof (collectively, "Taking"), or
(ii) fire or other casualty (collectively, a "Casualty") shall be borne by
Seller through the date and time that the applicable portion of the Purchase
Price payable on the Closing Date is paid to Seller and thereafter shall be
borne by Purchaser.
17.02 DAMAGE AND DESTRUCTION. In the event all or any portion of the Project is
materially damaged by any cause whatsoever prior to the Closing Date, Seller
shall so advise Purchaser and Purchaser shall have the right, at its sole
option, to either: (a) proceed with Closing with no reduction in the Purchase
Price, provided, however, Purchaser shall receive from Seller (i) all proceeds
of any casualty insurance maintained by Seller and payable with respect to such
damage, and (ii) an amount equal to the deductible on such casualty insurance;
or (b) terminate this Agreement by giving written notice of termination to
Seller within ten (10) business days of the date Purchaser is advised by Seller
of such damage, in which event the Deposit shall be refunded to Purchaser,
Seller and Purchaser shall each pay 50% of the Shared Closing Costs as of the
date this Agreement is terminated by Purchaser, and Seller and Purchaser shall
have no further rights or obligations under this Agreement, except those rights
and obligations
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specifically set forth herein as surviving such termination. The Seller
represents and warrants to Purchaser that the Improvements (except any Tenant's
or New Tenant's trade fixtures therein) are insured to the full replacement
value thereof with a deductible of not more than $5,000.00, which insurance
Seller agrees to keep in full force and effect until the Closing.
17.03 CONDEMNATION AND EMINENT DOMAIN. If, prior to the Closing Date, the
Project shall be subjected to a Taking, either total or partial, or if any
notice of intent of Taking or sale in lieu of Taking that materially affects the
Project is received by Seller or Purchaser, Purchaser shall have the right to
either: (a) proceed with Closing, in which event Purchaser shall be entitled to
participate in any such condemnation or eminent domain proceedings and, after
payment to Seller of the cash portion of the Purchase Price payable on the
Closing Date, to receive all of the proceeds of such Taking, or (b) terminate
this Agreement by giving written notice of termination to Seller, in which event
the Deposit shall be returned to Purchaser, Seller and Purchaser shall each pay
50% of the Shared Closing Costs, and Purchaser and Seller shall have no further
rights or obligations under this Agreement, except those rights and obligations
specifically set forth herein as surviving such termination. Seller and
Purchaser each agree to promptly forward to the other any notice of intent
received pertaining to a Taking of all or a portion of the Project.
18. DEFAULTS AND REMEDIES.
18.01 SELLER'S DEFAULTS. In respect to the remedies afforded Purchaser pursuant
to Paragraph 18.04 hereof, Seller shall be deemed to be in default under this
Agreement in the event (i) Seller fails, for any reason (other than a default by
Purchaser), to perform any of its material obligations under this Agreement that
arise on or prior to the Closing within the time limits and in the manner
provided for in this Agreement, (ii) any representation or warranty made by
Seller in this Agreement is untrue or inaccurate in a material respect when made
or as of the Closing Date, (iii) any Other Seller under the applicable Other
Sale Agreement fails, for any reason (other than a default by Purchaser), to
perform any of its material obligations under the subject Other Sale Agreement
that arise on or prior to the Closing within the time limits and in the manner
provided for in such Other Sale Agreement, or (iv) any representation or
warranty made by any Other Seller in the applicable Other Sale Agreement is
untrue or inaccurate in a material respect when made or as of the Closing Date.
Notwithstanding the provisions of clauses (iii) and (iv) above, if Purchaser
closes this transaction, any default or any inaccurate representation or
warranty by any Other Seller under the terms of the applicable Other Sale
Agreement shall be deemed waived in respect to this Agreement and it shall not
be construed as a default by Seller hereunder. In respect to the remedies
afforded Purchaser pursuant to Paragraph 18.05 hereof, Seller shall be deemed to
be in default under this Agreement in the event Seller fails, for any reason
(other than a default by Purchaser), to perform any of its material obligations
under this Agreement that arise subsequent to the Closing within the time limits
and in the manner provided for in this Agreement or any representation or
warranty made by Seller in this Agreement is untrue or inaccurate in a material
respect when made or as of the Closing Date. If Closing does not occur and
Seller is in default, Seller shall pay all of the Shared Closing Costs.
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18.02 PURCHASER'S DEFAULTS. Purchaser shall be deemed to be in default under
this Agreement in the event Purchaser fails, for any reason (other than a
default by Seller), to perform any of its material obligations under this
Agreement or any or all of the Other Sale Agreements within the time limits and
in the manner provided for, as applicable, in this Agreement and the Other Sale
Agreements, or any representation or warranty made by the Purchaser in this
Agreement or any or all of the Other Sale Agreements is untrue or inaccurate in
a material respect when made or as of the Closing Date. If Closing does not
occur and Purchaser is in default, Purchaser shall pay all of the Shared Closing
Costs.
18.03 SELLER'S REMEDIES. If Purchaser is in material default under this
Agreement of its obligation to close this transaction and Seller is not in
material default, the sole and exclusive remedy of Seller shall be to terminate
this Agreement by notice given to Purchaser and in such event Purchaser shall be
liable to Seller for liquidated damages in the amount equal to one percent (1%)
of $32,055,754.00 plus Litigation Expenses incurred by Seller in enforcing the
collection of such liquidated damages . The Parties recognize and agree that the
foregoing remedy for liquidated damages is a reasonable amount in the context of
this transaction in which the accurate measurement of damages is not feasible or
convenient. Notwithstanding the foregoing, if Purchaser (i) violates the
Recording Restriction (as hereinafter defined), (ii) fails to indemnify, defend
or hold Seller and the Project harmless in respect to Tests and Studies as
provided in Paragraph 5.02 hereof, or (iii) fails to bind its successors and
assigns as provided in Paragraph 13.04 hereof, Seller, in addition to the
aforesaid liquidated damages in respect to Purchaser's failure to close this
transaction, shall be entitled (subject to the limitations contained in
Paragraph 23 hereof) to recover from Purchaser monetary damages in the amount
actually suffered by Seller as a result of the events set forth in clauses (i),
(ii), or (iii). If Purchaser fails to pay, when due, the Earn-Out Payments
and/or Footage Payments required hereunder, Seller shall only be entitled to
recover from Purchaser such Earn-Out Payments or Footage Payments, plus interest
thereon as provided in Paragraph 24.16 hereof, plus Litigation Expenses.
18.04 PRE-CLOSING PURCHASER'S REMEDIES. If Seller, in respect to its obligations
to close this transaction, is in material default under this Agreement on or
before the Closing Date and Purchaser is not in material default, Purchaser may,
as Purchaser's sole and exclusive remedies, elect to either (i) terminate this
Agreement, in which event the Deposit shall be refunded to Purchaser, and
neither Party shall have any further rights or obligations hereunder, except
those specifically provided herein as surviving such termination, or (ii) seek
and enforce the specific performance of Seller's obligations hereunder in which
event Purchaser shall also be permitted to recover Litigation Expenses that it
incurred as a result of such proceeding. Notwithstanding the foregoing, in no
instance shall Purchaser or anyone claiming by, through or under Purchaser (over
whom Purchaser has control) record or file in the public records in the
jurisdiction of the Project any memorandum or other indicia of Purchaser's
rights or Seller's obligations hereunder, except in the single instance of a
recording or filing that is concurrently done at the time of the filing of a
complaint by Purchaser, with a court of competent jurisdiction, for the relief
of specific performance of Seller's obligations hereunder, but then only after
Purchaser has given Seller three (3) business days written notice prior to such
recording or filing ("Recording Restriction").
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18.05 POST CLOSING PURCHASER'S REMEDIES. If Seller is in material default under
this Agreement in respect to any of its obligations hereunder that arise
subsequent to the Closing Date, subject to the limitation provided in Paragraph
23 hereof, Purchaser may recover from Seller all out-of-pocket monetary damages
incurred by Purchaser that have not been satisfied by the offset permitted
Purchaser pursuant to Paragraphs 5.04, 9.03, 14.06, 14.07 and 16.01 hereof. In
addition, Purchaser shall be permitted to recover Litigation Expenses that it
incurs as a result of enforcing Purchaser's right to recover monetary damages as
aforesaid.
19. CROSS DEFAULT OBLIGATION. If Purchaser or its permitted
successors and assigns elects to terminate any of the Other Sale Agreements for
any reason other than Casualty to or Taking in respect to any of the Other
Centers, it shall act as an election of Purchaser under this Agreement to
concurrently terminate this Agreement, and this Agreement thereupon shall
terminate, Purchaser and Seller shall each pay fifty percent (50%) of the Shared
Closing Costs, and neither Purchaser and Seller shall have any further rights or
obligations hereunder, except those specifically provided herein as surviving
such termination.
20. ASSIGNMENT
Seller shall not assign or transfer any of its rights under
this Agreement without first obtaining Purchaser's prior written consent which
consent shall not be unreasonably withheld or delayed. Prior to the Closing,
Purchaser shall not assign any of its rights under this Agreement without first
obtaining Seller's prior written consent which consent shall not be unreasonably
withheld or delayed. At or subsequent to the Closing, Purchaser may assign its
rights under this Agreement provided such assignee and Purchaser are jointly and
severally liable for the obligations of Purchaser hereunder and such assignee
assumes such obligations, in writing, in form and content reasonably acceptable
to Seller.
21. NOTICES.
Any notice, demand, request, approval, consent or other
communication (collectively, a "Notice") concerning this Agreement or the
Project or any matter arising in connection with this Agreement or the Project
shall be in writing. Seller hereby appoints Opus Properties, L.L.C., a Delaware
limited liability company ("Opus Properties") as Seller's duly authorized and
empowered agent to give and receive any and all Notices required or permitted to
be given by Purchaser or Seller hereunder. Any Notice received by Opus
Properties under the terms of this Agreement shall be deemed received and
binding on Seller. Any Notice given by Opus Properties to Purchaser shall be
deemed a Notice given by and binding on Seller. All Notices shall be addressed
as follows:
If to Seller to: Opus Properties, L.L.C.
700 Opus Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇. ▇▇▇▇
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Opus, U.S., L.L.C.
700 Opus Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: O'Brien, ▇'▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser to: DEVELOPERS DIVERSIFIED REALTY
CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq,
Developers Diversified Realty Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent to: First American Title Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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Any Notice shall be given by either (i) personal delivery, in which event it
shall be deemed given on the date of delivery; (ii) certified mail return
receipt requested, in which event it shall be deemed given three (3) business
days after the date postmarked; or (iii) next or second business day delivery by
nationally recognized overnight courier, in which event it shall be deemed given
on the next or second (whichever is applicable) business day immediately
following receipt by the courier. Any Party may change any address for the
delivery of Notice to such Party, by giving Notice in accordance with the
provisions of this Paragraph 21.
22. ATTORNEYS' FEES AND DISBURSEMENTS.
In the event that any Party shall engage an attorney in
connection with any action or proceeding to enforce or construe this Agreement,
the prevailing Party in such action or proceeding shall be entitled to recover
its Litigation Expenses to the extent permitted by law. In the event different
Parties are the prevailing Parties on different issues, the Litigation Expenses
shall be apportioned in proportion to the value of the issues decided for and
against the Parties.
23. NO CONSEQUENTIAL DAMAGES.
Notwithstanding any term, provision or covenant contained in
this Agreement to the contrary, no Party hereto shall be entitled to recover
from the other Party consequential, exemplary or punitive damages, all such
damages are hereby expressly waived and released.
24. MISCELLANEOUS.
24.01 SUCCESSORS. The rights and obligations of the Parties under this Agreement
shall inure to the benefit of and be binding upon the Parties and all persons
who are permitted hereunder to succeed to their respective rights and
obligations.
24.02 MODIFICATIONS/WAIVERS. This Agreement cannot be changed nor can any
provision of this Agreement, or any right or remedy of any Party, be waived
orally. Changes and waivers can only be made in writing and the change or waiver
must be signed by the Party against whom the change or waiver is sought to be
enforced. Any waiver of any provision of this Agreement, or any right or remedy,
given on any one or more occasions shall not be deemed a waiver with respect to
any other occasion.
24.03 ENTIRE AGREEMENT. This Agreement is signed by the Parties as a final
expression of all of the terms, covenants and conditions of their agreement and
as a complete and exclusive statement of its terms, covenants and conditions.
24.04 COUNTERPARTS. This Agreement may be signed in one or more counterparts or
duplicate signature pages with the same force and effect as if all required
signatures were contained in a single original instrument.
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24.05 CAPTIONS. The captions contained in this Agreement were inserted for the
convenience of reference only. They do not in any manner define, limit or
describe the provisions of this Agreement or the intentions of the Parties.
24.06 GENDER/SINGULAR/PLURAL. Whenever masculine, feminine, neuter, singular,
plural, conjunctive or disjunctive terms are used in this Agreement, they shall
be construed to read in whatever form is appropriate to make this Agreement
applicable to all the Parties and all circumstances, except where the context of
this Agreement clearly dictates otherwise.
24.07 EXHIBITS INCORPORATED. The exhibits attached to this Agreement are hereby
incorporated by reference in their entirety with the same force and effect as if
they were set forth at length in this Agreement. Concurrently with the execution
of this Agreement, Seller, Purchaser and all of the Other Sellers entered into
that certain Exhibit Agreement ("Exhibit Agreement") pursuant to the terms of
which the exhibits attached thereto are certain of the schedules referenced in
this Agreement that are also common to all of the Other Sale Agreements.
Therefore, the exhibits attached to the Exhibit Agreement are hereby
incorporated by reference in their entirety in this Agreement with the same
force and effect as if they were set forth at length in this Agreement.
24.08 GOVERNING LAW. In the event of any dispute concerning or arising out of
this Agreement, the laws of the State in which the Project is located shall
govern and control the construction and enforcement of this Agreement.
24.09 SEVERABILITY. If one or more provisions of this Agreement or the
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions or any
other application thereof shall in no way be affected or impaired.
24.10 DATE FOR PERFORMANCE. If the date for performance of any act under this
Agreement falls on a Saturday, Sunday or federal holiday, the date for such
performance shall automatically be extended to the first succeeding business
which is not a federal holiday.
24.11 FURTHER ACTION. The Parties shall at any time, and from time to time on
and after the Closing Date, upon the request of the other Party, do, execute,
acknowledge and deliver all such further acts, deeds, assignments and other
instruments as may be reasonably required for the consummation of this
transaction and are reasonably acceptable in scope, form and content to the
Party whose act, signature, acknowledgment or delivery is requested.
24.12 INTENTIONALLY DELETED.
24.13 CONFIDENTIALITY. Without the prior written consent of Purchaser, neither
Seller nor any of Seller's representatives will disclose to any person any of
the terms, conditions or other facts with respect to this Agreement or the
Exhibit Agreement, including the status thereof, provided, that Seller or any of
Seller's representatives may make such disclosure if Seller has first received
the written opinion of counsel acceptable to Purchaser that such disclosure must
be
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made by Seller in order that Seller does not commit a violation of law. Without
the prior written consent of Seller, neither Purchaser nor any of Purchaser's
representatives will disclose to any person any of the terms, conditions or
other facts with respect to this Agreement or the Exhibit Agreement, including
the status thereof and any of the terms, provisions or conditions of the Site
Analysis Documents or of any of the Studies and Reports, provided, that
Purchaser or any of Purchaser's representatives may make such disclosure if
Purchaser has first received the written opinion of counsel acceptable to Seller
that such disclosure must be made by Purchaser in order that Purchaser does not
commit a violation of law. The obligation of Seller and Purchaser pursuant to
the provisions of this Paragraph 24.13 shall survive the termination of this
Agreement.
24.14 TIME OF THE ESSENCE. Time is of the essence in this transaction.
24.15 CONSTRUCTION. This Agreement shall not be construed more strictly against
one Party than against the other merely by virtue of the fact that it may have
been prepared by counsel for one of the Parties, it being recognized that both
Seller and Purchaser have contributed substantially and materially to the
preparation of this Agreement. The headings of various Section and Paragraphs in
this Agreement are for convenience only, and are not to be utilized in
construing the content or meaning of the substantive provisions hereof.
24.16 INTEREST. Any payment obligation of a Party hereto to the other Party
shall bear interest at the rate of two percent (2%) plus the corporate base rate
of interest from time to time charged by Citibank, N.A., commencing on the date
that is five (5) business days subsequent to the date such payment is due, until
paid.
24.17 WARRANTY WORK. For the period ("Warranty Period") (i) that is provided in
each Lease or New Lease in respect to the applicable Tenant Warranty for tenant
improvements, and (ii) of one (1) year subsequent to the date each of the
Improvements (exclusive of tenant improvements that are the subject of the
applicable Tenant Warranty) is substantially complete in accordance with the
Plans, Seller agrees, at its sole cost and expense, to promptly (subject to
Force Majeure) correct any defects in the tenant improvements or other
Improvements due to (a) the failure thereof to substantially comply with the
plans for the subject tenant improvements or the Plans in respect to the rest of
the Improvements, or (b) faulty, improper or inferior materials or workmanship
(collectively, "Warranty Work"). If Warranty Work is the subject of a Lease or
New Lease, the provisions of such Lease or New Lease shall control in the
determination of the scope of the Warranty Work. If Warranty Work is not the
subject a Lease or New Lease, then the provisions of this Paragraph 24.17 shall
control in the determination of the scope of the Warranty Work. However,
Warranty Work shall not in any way include routine and appropriate maintenance
or Warranty Work directly resulting from (but only to the extent resulting from)
the failure to perform routine and appropriate maintenance of the tenant
improvements or other Improvements. Promptly during the Warranty Period (but in
any event prior to the expiration of the Warranty Period), Purchaser shall give
Seller written notice ("Warranty Notice") of any defect in the Project that
Purchaser, in good faith, determines to require Warranty Work. Except as
hereafter provided, Seller shall promptly undertake and complete, subject to
Force Majeure, the Warranty Work that is the subject of the Warranty Notice.
However, if Seller objects, in good faith, within
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ten (10) business days following receipt of a Warranty Notice, it shall notify
Purchaser, in writing of the same. Thereafter, they shall promptly confer, in
good faith, to resolve any disagreement in respect to Warranty Work. If within
fifteen (15) days after conferring Purchaser and Seller are unable to agree on
the scope of Warranty Work that is not the subject of a Lease or New Lease, they
shall appoint a third party contractor to make such determination, and the scope
so determined by the third party contractor shall be binding on the Parties.
When the Warranty Work is agreed to by the Parties or determined by the third
party contractor as aforesaid, such Warranty Work shall be undertaken and
completed as aforesaid. The Warranty Work obligation hereunder shall only
pertain to the Warranty Work for which a Warranty Notice was delivered to Seller
prior to the expiration of the Warranty Period or that was delivered by a Tenant
or a New Tenant in accordance with the provisions of the Tenant Warranty, and in
such event the Warranty Work obligation of Seller in respect thereto shall not
terminate at the expiration of the Warranty Period or the Tenant Warranty, but
rather shall continue until such Warranty Work is completed by Seller.
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IN WITNESS WHEREOF, the Parties have signed this Agreement as
of the date set forth in the first paragraph of this Agreement.
SELLER: PURCHASER:
OPUS SOUTHWEST CORPORATION, DEVELOPERS DIVERSIFIED
a Minnesota corporation REALTY CORPORATION,
an Ohio corporation
By: /s/ [Signature Illegible] By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------ ------------------------------
Its: President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- -------------------------
Executive Vice President
Seller's Federal Taxpayer Purchaser's Federal Taxpayer
Identification No.: Identification No.:
▇▇-▇▇▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
For purposes only of acting as the Escrow Agent as provided in this Agreement,
First American Title Insurance Company
By: /s/ [Signature Illegible]
------------------------------------
Its: Commercial Manager
--------------------------------
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SCHEDULES ATTACHED TO THIS AGREEMENT OR
THE EXHIBIT AGREEMENT
1.02 Legal Description
1.02(a) Site Plan
2.01(b) Personal Property
3.01 Rent Roll
5.01(b) Environmental Reports
5.01(g) Guaranties
6.01 Survey Requirements and Certifications (attached to the Exhibit
Agreement)
6.03 Permitted Exceptions
6.04 Endorsements
7.01 Deed (attached to the Exhibit Agreement)
7.02 Assignment of Leases (attached to the Exhibit Agreement)
7.02(a) Description of Leases and Security Deposits
7.04 ▇▇▇▇ of Sale (attached to the Exhibit Agreement)
7.05 Assignment of Contracts (attached to the Exhibit Agreement)
7.05(a) Description of Contracts to be Assigned at Closing
7.06 Affidavit of Seller Concerning Violations/Work Orders (attached to the
Exhibit Agreement)
7.10 FIRPTA Affidavit (attached to the Exhibit Agreement)
7.13 Tenant Letter (attached to the Exhibit Agreement)
7.15 Tenant Estoppel (attached to the Exhibit Agreement)
7.20 Seller Date Down Certificate (attached to the Exhibit Agreement)
7.21 Agreement Estoppel
7.23 Assignment of Declaration
8.06 Purchaser Date Down Certificate (attached to the Exhibit Agreement)
10.01(xi) Permits
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10.01(xvii) Tenant Inducements
10.01(xviii) Alleged Seller Defaults Under the Leases
10.01(xix) Tenant Defaults Under the Leases
10.01(xx) Tenant's Notice of Vacating, Assigning or Subletting
13.11 Shell and Core List and Standard
13.11(a)(1), etc. Punchlist Holdback
13.11(b) Form G704 Certificate of Completion (attached to the Exhibit
Agreement)
54
GLOSSARY OF TERMS
Term Where Defined
---- -------------
Agreement 1st Paragraph
Agreement Estoppel 7.21
Arrears 14.02
Assignment Reservation 13.03
Bankruptcy Proceeding 13.01(xi)(c)
Carry 13.01(i)
Casualty 17.01
Casualty Notice 13.06
Closing 15.01
Closing Date 15.01
Closing Payment 13.01(ii)
Commissions 10.01(xvi)
Condition Notice 5.04
Condition Response 5.04
Commitment 6.02
Contract Assignment 7.05
Deed 7.01
Defects Notice 6.03
Deposit 3.02(b)
Disapproved Lease 13.04
Earn-Out Conditions 13.07
Earn-Out Extension Notice 13.05
Earn-Out Payment 13.01(iii)
Earn-Out Period 13.05
Earn-Out Segment 13.05
Endorsements 6.04
Environmental Laws 10.01(xii)
Environmental Reports 5.01(b)
Escrow Agent 4.01
Exhibit Agreement 24.07
FIRPTA Affidavit 7.10
First Segment 13.05
Footage Computation 13.08
Footage Payment 13.08
Force Majeure 13.01(iv)
Guaranties 5.01(g)
Hazardous Substances 10.01(xii)
Improvements 1.02
Initial Deposit 3.02(a)
Intangible Property 2.01(c)
i
55
GLOSSARY OF TERMS
Term Where Defined
---- -------------
Knowledge 10.01
Land 1.02
Lease Assignment 7.02
Lease Reservation Date 13.03
Leases 7.02
Lien(s) 9.03
Litigation Expenses 10.04(a)
Loss 17.01
Lump Sum Non-Credit 14.06
Monetary Default 13.01(xi)(b)
Mortgage 10.01(ix)
Net Cash Flow 13.01(v)
New Lease 13.01(vi)
New Lease Obligations 13.10
New Tenant 13.01(vii)
Notice 21
Opus Properties 21
Other Center(s) 13.01(viii)
Other Sale Agreement(s) 13.01(ix)
Other Seller(s) 13.01(x)
Party(ies) 1st Paragraph
Permits 2.01(c)
Permitted Exceptions 6.03
Personal Property 2.01(b)
Plans 5.01(f)
Post Closing Work 16.01
Pro Rata Share 14.03
Project 2.01
Prospect 13.04
Punchlist Holdback 13.11
Punchlist Work 13.11
Purchase Price 3.01
Purchaser 1st Paragraph
Purchaser Date Down Certificate 8.06
Purchaser's Knowledge 10.02
Qualified Lease 13.01(xi)
Real Estate Broker 4.02
Real Estate Tax Rent 14.06
Real Property 1.03
Recording Restriction 18.04
Release 10.01(xii)
ii
56
GLOSSARY OF TERMS
Term Where Defined
---- -------------
Rental Undertaking 13.04
Rents 14.01
Reserved Base Rent Date 13.03
Restoration Forgiveness 5.02
Second Deposit 3.02(b)
Second Segment 13.05
Security Deposits 7.02
Seller 1st Paragraph
Seller Date Down Certificate 7.20
Seller's Estoppel 7.15
Seller's Response 6.03
Shared Closing Costs 11.02(a)
Site Analysis Documents 5.01
Site Analysis Period 5.03
Square Footage 13.08
Superfund Act 10.01(xii)
Survey 6.01
Survey Defects 6.03
Taking 17.01
Tenant Estoppel 7.15
Tenant Inducement 10.01(xvii)
Tenant Letters 7.13
Tenant Warranty 13.10
Tenants 7.02
Termination Agreements 7.16
Tests and Studies 5.02
Title Company 4.01
Title Defects 6.03
Title Policy 6.04
Unacceptable Conditions 5.04
Unknown Rents 14.03
Unassigned Lease 13.04
Utility Deposits 14.04
Vacant Space 13.01(xii)
Violations 7.06
Warranty Notice 24.17
Warranty Period 24.17
Warranty Work 24.17
Work Orders 7.06
iii