EXHIBIT 2.3
PURCHASE AND SALE AGREEMENT
CPR PUERTO RICO PORTFOLIO
BETWEEN
CPR DEL SOL LP, S.E.
CPR ESCORIAL LP, S.E.
CPR CAYEY LP, S.E.
CPR PALMA REAL LP, S.E.
CPR ISABELA LP, S.E.
AND
CPR SAN GERMAN LP, S.E.
COLLECTIVELY, AS SELLER
AND
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AS PURCHASER
NOVEMBER 2, 2004
Table of Contents
Page
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1. DEFINITIONS ........................................................ 1
1.1 Defined Terms ............................................... 1
1.2 Construction ................................................ 11
2. The Property ....................................................... 11
2.1 Description ................................................. 11
2.2 "AS-Is" Purchase ............................................ 12
2.3 Agreement to Convey ......................................... 13
2.4 All or Nothing Basis ........................................ 13
3. Price and Payment .................................................. 14
3.1 Purchase Price .............................................. 14
3.2 Payment ..................................................... 14
3.3 Assumption of Existing Financing ............................ 15
3.4 Closing ..................................................... 15
3.5 Escrow Provisions ........................................... 15
3.6 Net Earnout Adjustment ...................................... 16
3.7 Reserve Reimbursement Adjustment ............................ 17
3.8 Rent Commencement Adjustment ................................ 18
3.9 Surface Rights Lease Adjustment ............................. 18
3.10 Construction Costs Adjustment ............................... 19
4. Inspections and Approvals .......................................... 19
4.1 Inspections; Access ......................................... 19
4.2 Title and Survey ............................................ 21
4.3 Contracts ................................................... 22
4.4 Permitted Encumbrances ...................................... 22
4.5 Purchaser's Right to Terminate .............................. 23
4.6 Delivery of Title Policy at Closing ......................... 23
5. SELLERS' COVENANTS FOR PERIOD Prior to Closing ..................... 23
5.1 Insurance ................................................... 23
5.2 Operation ................................................... 23
5.3 New Contracts ............................................... 23
5.4 Leases ...................................................... 24
5.5 Other Documents ............................................. 25
PURCHASE AND SALE AGREEMENT - PAGE i
CPR PROPERTY
Table of Contents
(continued)
Page
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5.6 Reports ..................................................... 25
5.7 Additional Encumbrances ..................................... 25
5.8 Employment Agreements ....................................... 25
5.9 Notices ..................................................... 25
5.10 Cayey Construction .......................................... 25
5.11 Escorial Construction ....................................... 26
5.12 Del Sol Construction ........................................ 27
5.13 Leasing Costs ............................................... 28
5.14 Consents .................................................... 28
5.15 Recording of Deed ........................................... 28
5.16 Books and Records ........................................... 28
5.17 Security Deposits ........................................... 28
5.18 Compliance with Documents ................................... 28
5.19 Lease Terminations Upon Purchaser's Request ................. 28
6. Representations and Warranties ..................................... 29
6.1 By Seller ................................................... 29
6.2 By Purchaser ................................................ 31
6.3 Mutual ...................................................... 32
6.4 Modifications ............................................... 32
7. Costs and Prorations ............................................... 33
7.1 Sellers' Costs .............................................. 33
7.2 Purchaser's Costs ........................................... 33
7.3 Prorations of Income and Expenses ........................... 34
7.4 Proration of Taxes .......................................... 38
7.5 Prorations in General ....................................... 38
7.6 Corrections ................................................. 38
7.7 Draft Statements ............................................ 38
7.8 Purpose and Intent .......................................... 38
8. Damage, Destruction or Condemnation ................................ 39
8.1 Material Event .............................................. 39
PURCHASE AND SALE AGREEMENT - PAGE ii
CPR PROPERTY
Table of Contents
(continued)
Page
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8.2 Immaterial Event ............................................ 39
8.3 Dispute ..................................................... 39
9. Notices ............................................................ 39
10. CONDITIONS TO CLOSING ............................................. 40
10.1 Purchaser's Conditions ...................................... 40
10.2 Sellers' Conditions ......................................... 43
11. Closing and Escrow ................................................ 43
11.1 Escrow Instructions ......................................... 43
11.2 Sellers' Deliveries ......................................... 43
11.3 Purchaser's Deliveries ...................................... 45
11.4 Possession .................................................. 46
11.5 Insurance ................................................... 46
11.6 Notice Letters .............................................. 46
12. Default; Failure of Condition ..................................... 46
12.1 Purchaser Default ........................................... 46
12.2 Seller Default .............................................. 46
12.3 New Defects ................................................. 47
13. RELEASES OF PORTIONS OF THE PROPERTY .............................. 47
13.1 Cayey Theater Parcel ........................................ 47
13.2 San German Condemnation ..................................... 48
13.3 Additional Existing Obligations ............................. 48
13.4 Survival .................................................... 49
14. Miscellaneous ..................................................... 49
14.1 Entire Agreement ............................................ 49
14.2 Severability ................................................ 50
14.3 Applicable Law .............................................. 50
14.4 Jurisdiction ................................................ 50
14.5 Assignability ............................................... 50
14.6 Successors Bound ............................................ 50
14.7 Breach ...................................................... 51
PURCHASE AND SALE AGREEMENT - PAGE iii
CPR PROPERTY
Table of Contents
(continued)
Page
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14.8 Captions ................................................... 51
14.9 No Partnership ............................................. 51
14.10 Counterparts ............................................... 51
14.11 Recordation ................................................ 51
14.12 Submission of Agreement .................................... 51
14.13 Tax Protest ................................................ 51
14.14 Indemnification, Survival and Limitation; Sellers' Knowledge 51
14.15 No Processing .............................................. 53
14.16 Calculation of Time Periods ................................ 53
14.17 Section 1031 Exchange ...................................... 54
14.18 Arbitration ................................................ 54
14.19 Limitation of Liability .................................... 54
14.20 Delivery of Financial Statements ........................... 55
14.21 Time of the Essence ........................................ 55
PURCHASE AND SALE AGREEMENT - PAGE iv
CPR PROPERTY
LIST OF EXHIBITS
Exhibit 1.1.12 Cayey Outparcel Space
Exhibit 1.1.19 Construction Documents
Exhibit 1.1.27 Credit-Worthy Tenants
Exhibit 1.1.32 Del Sol Parking Deck
Exhibit 1.1.37 List of Environmental Reports
Exhibit 1.1.41 Escorial Outparcel Space
Exhibit 1.1.57 Legal Descriptions
Exhibit 1.1.59 Schedules of Leases
Exhibit 1.1.65 List of Loan Documents
Exhibit 1.1.80 Personal Property
Exhibit 1.1.103 Rent Rolls
Exhibit 3.6.1 Vacant Spaces
Exhibit 3.6.2 Capitalization Rates
Exhibit 3.7 Lender Reserves
Exhibit 4.3 Schedules of Service Contracts
Exhibit 4.4.6 Permitted Encumbrances
Exhibit 5.4 Base Rent for Vacant Space
Exhibit 5.10.1 Cayey Construction Contracts/Plans
Exhibit 5.10.2 Cayey Budget
Exhibit 5.11.1 Escorial Construction Contracts/Plans
Exhibit 5.11.2 Escorial Budget
Exhibit 5.12.1 Del Sol Construction Contracts/Plans
Exhibit 5.12.2 Del Sol Budget
Exhibit 6.1.14 Security Deposits
Exhibit 6.1.15 Lease Defaults
Exhibit 6.1.17 Tenant Termination Notices
Exhibit 6.1.21 Insurance Policies
Exhibit 7.3.1 Leasing Commissions
Exhibits 7.4.2 Tenants That Pay Taxes Directly to ▇▇▇▇
Exhibit 10.1.2 Form of Tenant Estoppel Certificate
Exhibit 10.1.3 Form of REA Estoppel Certificate
Exhibit 10.1.7 Form of Income Support Agreement
Exhibit 10.1.8 Form of Income Support Escrow Agreement
Exhibit 10.2.4 Form of Management Agreement
Exhibit 11.2.2 Form of ▇▇▇▇ of Sale
Exhibit 11.2.3 Form of Assignment and Assumption of Leases
Exhibit 11.2.4 Form of Assignment and Assumption of Contracts, Permits
and Warranties
Exhibit 11.2.5 Form of Assignment and Assumption of REA
Exhibit 11.2.7 Form of Tenant Notice Letter
Exhibit 13.1 Theater LOI
Exhibit 13.2 Expropriation Parcel
Exhibit 13.3 Existing Post-Closing Agreement
Exhibit 14.14.10 Form of Holdback Escrow Agreement
Exhibit 14.20 Letter of Representation
PURCHASE AND SALE AGREEMENT - PAGE v
CPR PROPERTY
TERM SHEET
PURCHASER: Developers Diversified Realty Corporation
SELLERS: CPR Del Sol LP, S.E.
CPR Escorial LP, S.E.
CPR Cayey LP, S.E.
CPR Palma Real LP, S.E.
CPR Isabela LP, S.E.
CPR San German LP, S.E.
PROPERTIES: ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ Escorial Shopping Center
Plaza Cayey Shopping Center
Plaza Palma Real Shopping Center
Plaza Isabela Shopping Center
San German Project
PURCHASE PRICE: $569,216,739.00
EFFECTIVE DATE: November 2, 2004
APPROVAL DATE: December 20, 2004
CLOSING DATE: January 10, 2005, subject to Section 14.21
PURCHASE AND SALE AGREEMENT - PAGE vi
CPR PROPERTY
CPR Portfolio
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of the 2nd
day of November, 2004 (the "Effective Date"), is made by and between CPR DEL SOL
LP, S.E. ("CPR Del Sol"), CPR ESCORIAL LP, S.E. ("CPR Escorial"), CPR CAYEY LP,
S.E. ("CPR cayey"), CPR PALMA REAL LP, S.E. ("CPR Palma Real"), CPR ISABELA LP,
S.E. ("CPR Isabela"), and CPR SAN GERMAN LP, S.E. ("CPR San German"), each a
Delaware limited partnership (each a "Seller" and collectively, the "Sellers"),
and DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation
("Purchaser").
RECITALS:
CPR Del Sol owns certain improved real property commonly known as Plaza
del Sol located in Bayamon, Puerto Rico ("Plaza del Sol"); CPR Palma Real owns
certain improved real property commonly known as Plaza Palma Real located in
Humacao, Puerto Rico ("Plaza Palma Real") CPR Isabela owns certain improved real
property commonly known as Plaza Isabela located in Isabela, Puerto Rico ("Plaza
Isabela"); CPR Escorial owns certain improved real property commonly known as
Plaza Escorial located partially in San ▇▇▇▇ and partially in Carolina, Puerto
Rico ("Plaza Escorial"); CPR cayey owns certain improved real property commonly
known as Plaza cayey Centro located in cayey, Puerto Rico ("Plaza cayey"); and
CPR San German owns two parcels of improved real property located in San German,
Puerto Rico (the "San German Project"), a portion of one of which is leased to a
tenant operating a Pep Boys, and the other of which is leased to tenants
operating, respectively, a cinema, a Pollo Tropical restaurant and a Burger King
restaurant.
Subject to the terms and conditions contained herein, Sellers desire to
sell, and Purchaser desires to purchase, the Property (as defined below).
NOW, THEREFORE, in consideration of the foregoing, of the covenants,
promises and undertakings set forth herein, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Sellers and Purchaser agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. Defined terms used in this Agreement shall, unless the
context otherwise requires, have the following meanings:
1.1.1 "Aggregate Income Decrease" means the excess, if any of (a)
the aggregate base rents set forth in the Rent Rolls with respect to the Leases
which are still in effect at Closing over (b) the aggregate base rent under such
Leases as of the Closing Date. For the purposes of determining Aggregate Income
Decease, income from Leases executed, terminated or expired after the date of
the Rent Rolls shall not be taken into account, nor shall any difference in the
rent payable by the Tenant under the BB&B Lease, if such Tenant is paying an
alternative rent as a result of the Del Sol Parking Deck Work or construction of
the Surface Rights Space.
PURCHASE AND SALE AGREEMENT - PAGE 1
CPR PROPERTY
1.1.2 "Approval Date" means December 20, 2004.
1.1.3 "Assumed Indebtedness" shall mean the indebtedness consisting
of the outstanding principal balance of the Existing Financing as of the Closing
Date.
1.1.4 "BB&B Lease means that certain Lease dated October 6, 2000
between BY Ventures S.E. and Bed, Bath & Beyond, Inc.
1.1.5 "Best Buy Costs" means the costs of any tenant improvement
work to be performed by the landlord under any lease entered into for the
Surface Rights Space between CPR Del Sol or Purchaser and Best Buy Company, Inc.
or any replacement tenant and any costs payable by such landlord with respect to
the recording of any deed for the purposes of recording the structure
constructed by Best Buy Company, Inc. or any replacement tenant as a part of its
work under the such lease; provided, that if such lease is executed after the
Closing, such costs shall not exceed the costs payable by landlord under the
draft of the Best Buy lease delivered to Purchaser prior to the Effective Date.
1.1.6 "Broker" has the meaning set forth in Section 6.3.
1.1.7 "business day" means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to be closed in the State of
New York.
1.1.8 "Cap Rate" has the meaning set forth in Section 3.6.
1.1.9 "cayey Construction Adjustment" has the meaning set forth in
Section 5.10.
1.1.10 "cayey Construction Contracts" has the meaning set forth in
Section 5.10.
1.1.11 "cayey Outparcel Lease" means any lease for all or any
portion of the cayey Outparcel Space.
1.1.12 "cayey Outparcel Space" means the one story, 9,800 leasable
square foot building to be constructed at Plaza cayey in the location shown on
Exhibit 1.1.12, together with appurtenant improvements, if any.
1.1.13 "cayey Plans" has the meaning set forth in Section 5.10.
1.1.14 "Claims" has the meaning set forth in Section 2.2.3.
1.1.15 "Closing" has the meaning set forth in Section 3.4.
1.1.16 "Closing Date" means January 10, 2005, subject to Section
14.21.
1.1.17 "Consensual Liens" means any mortgage, deed of trust,
judgment lien or other lien, charge, claim, security interest or pledge
encumbering any of the Property in a specified or readily ascertainable dollar
amount (with the exception of any deeds of mortgage and other Loan Documents
which relate to Existing Financing or any leasehold mortgages
PURCHASE AND SALE AGREEMENT - PAGE 2
CPR PROPERTY
granted by any tenant of the Property or any lien which any tenant of the
Property is obligated to cure under its Lease).
1.1.18 "Construction Costs Adjustment" means the sum of the Del Sol
Parking Deck Adjustment, the cayey Construction Adjustment and the Escorial
Construction Adjustment.
1.l.19 "Construction Documents" means the documents, instruments,
agreements and other items described in Exhibit 1.1.19.
1.1.20 "Construction Obligations" means any and all obligations to
perform on- site or off-site construction required by any Leases, REAs, Loan
Documents or Service Contracts.
1.1.21 "CPR cayey" has the meaning set forth in the first paragraph
of this Agreement.
1.1.22 "CPR Del Sol" has the meaning set forth in the first
paragraph of this Agreement.
1.1.23 "CPR Escorial" has the meaning set forth in the first
paragraph of this Agreement.
1.1.24 "CPR Isabela" has the meaning set forth in the first
paragraph of this Agreement.
1.1.25 "CPR Palma Real" has the meaning set forth in the first
paragraph of this Agreement.
1.1.26 "CPR San German" has the meaning set forth in the first
paragraph of this Agreement.
1.1.27 "Credit-Worthy" means a tenant which (a) is currently, or has
been, a tenant at the Property, the CRV Property or the MPR Property (other than
any tenant which has materially breached its lease, is insolvent or is subject
to a bankruptcy or creditor's rights proceeding, or had a history of significant
arrears), (ii) is listed on Exhibit 1.1.27 hereto, or (iii) otherwise satisfies
customary financial criteria required by landlords of similar retail shopping
centers.
1.1.28 "CRV Agreement" means that certain Purchase and Sale
Agreement of even date among CRV Rio Hondo LP, LLLP, CRV Del Atlantico LP, LLLP,
CRV Rexville LP, LLLP, CRV Senorial LP, LLLP and CRV ▇▇▇▇▇▇▇▇ Land Acquisition
LP, LLLP and Purchaser with respect to the CRV Property.
1.1.29 "CRV Property" means, collectively, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
del Atlantico, Rexville Plaza, EI Senorial Mall and the ▇▇▇▇▇▇▇▇ Land, as more
particularly described in the CRV Agreement.
1.1.30 "Del Sol Construction Contracts" has the meaning set forth
in Section 5.11.
PURCHASE AND SALE AGREEMENT - PAGE 3
CPR PROPERTY
1.1.31 "Del Sol Parking Deck Adjustment" has the meaning set forth
in Section 5.11.
1.1.32 "Del Sol Parking Deck Work" means the additional one story to
be constructed on the existing parking deck at Plaza del Sol in the location
shown on Exhibit 1.1.32.
1.1.33 "Del Sol Plans" has the meaning set forth in Section 5.12.
1.1.34 "Deposit" has the meaning set forth in Section 3.2.1.
1.1.35 "Disbursement Notice" has the meaning set forth in Section
3.5.3.
1.1.36 "Environmental Laws" means the following: any federal, state
or local law (including, without limitation, the Commonwealth of Puerto Rico),
statute, ordinance, rule, regulation, guideline, code, license, permit,
authorization, approval, consent, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any governmental entity, relating to
(x) the protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human environmental health or environmental safety, or
(y) the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Materials, including, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act of
1972, the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the federal Solid Waste Disposal Act and the
federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Atomic Energy Act, the Nuclear Waste Policy Act of 1982,
the federal Occupational Safety and Health Act of 1970, the Puerto Rico Public
Policy Environmental Act and regulations promulgated thereunder, each as amended
and as now in effect.
1.1.37 "Environmental Reports" means the environmental reports
prepared for the Sellers in connection with their acquisition of the Property,
as described in Exhibit 1.1.37.
1.1.38 "Escorial Construction Adjustment" has the meaning set forth
in Section 5.11.
1.1.39 "Escorial Construction Contracts" has the meaning set forth
in Section 5.11.
1.1.40 "Escorial Outparcel Lease" means any lease for all or any
portion of the Escorial Outparcel Space.
1.1.41 "Escorial Outparcel Space" means the one story, 3,100
leasable square foot building to be constructed at Plaza Escorial in the
location shown on Exhibit 1.1.41 together with appurtenant improvements, if any.
1.1.42 "Escorial Plans" has the meaning set forth in Section 5.11.
PURCHASE AND SALE AGREEMENT - PAGE 4
CPR PROPERTY
1.1.43 "Escrow Agent" means the Title Company or any other Person
reasonably acceptable to Sellers and Purchaser, to be determined prior to the
Approval Date.
1.1.44 "Existing Financing" means the loan made by Lender to the
Sellers in the original principal amount of $365,000,000.00.
1.1.45 "Existing Post Closing Agreement" has the meaning set forth
in Section 13.3.
1.1.46 "Force Majeure" means the inability of Sellers to perform (or
delay in performance of) any construction required hereunder by reason of
strikes, inability to procure materials, failure of power, riots, insurrection,
war, earthquake, hurricane or tornado (or comparable weather conditions of
unusual severity) or other reasons of a like nature which are beyond the
reasonable control of Sellers.
1.1.47 "Governmental Entity" has the meaning set forth in Section
6.1.7.
1.1.48 "Hazardous Materials" means any substance presently defined,
designated or classified as environmentally hazardous, toxic, radioactive or
dangerous, or otherwise presently regulated as such under any Environmental Law,
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Materials includes, without limitation, any
toxic waste, pollutant, contaminant, environmentally hazardous substance, toxic
substance, hazardous waste, special waste, industrial environmentally hazardous
or toxic substance or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material, urea formaldehyde
foam insulation, lead and polychlorinated biphenyl, and any and all of the
following, including mixtures thereof: any environmentally hazardous substance,
pollutant, contaminant, waste, by-product or constituent presently regulated
under the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601 et seq.; oil and petroleum products and natural gas,
natural gas liquids, liquefied natural gas and synthetic gas usable for fuel;
pesticides presently regulated under the Federal Insecticide, Fungicide, and
Rodenticide Act, 7 U.S.C. Section 136 et seq.; asbestos and asbestos-containing
materials, PCBs and other substances presently regulated under the federal Solid
Waste Disposal Act and the federal Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; source material, special nuclear material, by-product
material and any other radioactive materials or radioactive wastes, however
produced, presently regulated under the Atomic Energy Act or the Nuclear Waste
Policy Act of 1982; chemicals subject to the OSHA Hazard Communication Standard,
29 C.F.R. Section 1910.1200 et seq.; and industrial process and pollution
control wastes, whether or not hazardous within the meaning of the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.
1.1.49 "Holdback Escrow Agreement" has the meaning set forth in
Section 14.14.10.
1.1.50 "Home Depot" means Home Depot Puerto Rico, Inc.
1.1.51 "Improvements" means the buildings, parking areas,
improvements, and fixtures now situated on the Land.
PURCHASE AND SALE AGREEMENT - PAGE 5
CPR PROPERTY
1.1.52 "Income Support Agreement" has the meaning set forth in
Section 10.1.7.
1.1.53 "Income Support Escrow Agreement" has the meaning set forth
in Section 10.1.8.
1.1.54 "Income Support Payments" has the meaning set forth in the
Income Support Agreement.
1.1.55 "Income Support Term" has the meaning set forth in the Income
Support Agreement.
1.1.56 "Inspection Period" means the period commencing on the
Effective Date and ending at 5:00 p.m. (New York time) on the Approval Date.
1.1.57 "Land" means certain land described as follows (each a
"Parcel" and collectively, the "Parcels"): (a) land located in Bayamon, Puerto
Rico and more specifically described as Parcel 1 in Exhibit 1.1.57 attached
hereto (the "Plaza Del Sol Parcel"), (b) land located in Humacao, Puerto Rico
and more specifically described as Parcel 2 in Exhibit 1.1.57 attached hereto
(the "Plaza Palma Real Parcel"), (c) land located in Isabela, Puerto Rico and
more specifically described as Parcel 3 in Exhibit 1.1.57 attached hereto (the
"Plaza Isabela Parcel"), (d) land located in partially in San ▇▇▇▇ and partially
in Carolina, Puerto Rico and more specifically described as Parcel 4 in Exhibit
1.157 attached hereto (the "Plaza Escorial Parcel"), (e) land located in Cayey,
Puerto Rico and more specifically described as Parcel 5 in Exhibit 1.1.57
attached hereto (the "Plaza Cayey Parcel") and (f) land located in San German,
Puerto Rico and more specifically described as Parcel 6 in Exhibit 1.1.57
attached hereto (the "San German Parcel"); excluding the land and buildings, if
any, specifically identified as either "not included" or "not owned" by Sellers
on Exhibit 1.157.
1.1.58 "Lease Earnout Amount" has the meaning set forth in Section
3.6.
1.1.59 "Leases" means the leases, lease amendments, improvement
agreements, subleases, assignments, licenses, concessions and other occupancy
agreements, including those in effect on the date of this Agreement which are
identified on Exhibit 1.159, and any new leases entered into pursuant to Section
5.4, which as of the Closing (as hereinafter defined) affect all or any portion
of the Land or Improvements and any lease guaranties in favor of any Seller with
respect to any such Leases.
1.1.60 "Leasing Costs" has the meaning set forth in Section 7.3.1.
1.1.61 "Lender" means.
1.1.62 "Lender Reserves" has the meaning set forth in Section 3.7.
1.1.63 "Lender's Consent" has the meaning set forth in Section
10.1.5.
1.1.64 "Liens" means all liens (including, without limitation,
mortgage liens (with the exception of any deeds of mortgage and other Loan
Documents which relate to Existing
PURCHASE AND SALE AGREEMENT - PAGE 6
CPR PROPERTY
Financing), deeds of trust, judgement liens, mechanics' liens, and liens for
Taxes which are due and payable), charges, claims, security interests or pledges
affecting the Property.
1.1.65 "Loan Documents" means the documents and instruments
evidencing and securing the Existing Financing, as more particularly described
on Exhibit 1.1.65.
1.1.66 "Losses" has the meaning set forth in Section 14.14.1.
1.1.67 "Management Agreements" has the meaning set forth in Section
10.2.5.
1.1.68 "Manager" has the meaning set forth in Section 10.2.4.
1.1.69 "Maximum Indemnification Amount" has the meaning set forth in
Section 14.14.6.
1.1.70 "MPR Agreement" means that certain Purchase and Sale
Agreement of even date among MPR Del Norte LP, S.E., MPR ▇▇▇▇ Baja LP, S.E., MPR
▇▇▇▇▇▇▇ ▇▇, S.E., MPR Del Oeste LP, S.E., MPR Guyama LP, S.E. and Purchaser with
respect to the MPR Property.
1.1.71 "MPR Property" means, collectively, Plaza del Norte, Plaza
▇▇▇▇▇▇▇, Plaza Del Oeste, Plaza ▇▇▇▇ Baja and Plaza Wal*Mart, as more
particularly described in the MPR Agreement.
1.1.72 "Net Earnout Adjustment" has the meaning set forth in Section
3.6.
1.1.73 "Objection Notice" has the meaning set forth in Section
3.5.3.
1.1.74 "Parcel(s)" has the meaning set forth in Section 2.1.1.
1.1.75 "Percentage Rent" means rent in the form of a percentage of a
tenant's gross sales in excess of a predetermined threshold or breakpoint.
1.1.76 "Permits" means, to the extent transferable, all building
permits, use permits, certificates of occupancy and other certificates, permits,
licenses and approvals used in the operation of the Land and/or Improvements.
1.1.77 "Permitted Encumbrances" has the meaning set forth in Section
4.4.
1.1.78 "Permitted Assignee" has the meaning set forth in Section
14.5.
1.1.79 "Person" shall mean any natural person, corporation, limited
partnership, limited liability company, limited liability partnership, general
partnership, joint stock company, joint venture, real estate investment trust,
association, company, trust, bank, trust company, land trust, vehicle trust,
business trust or other organization irrespective of whether it is a legal
entity, or any government or agency or political subdivision thereof.
1.1.80 "Personal Property" means all right, title and interest of
each Seller in and to any personal property used in connection with the
operation, repair and maintenance of the
PURCHASE AND SALE AGREEMENT - PAGE 7
CPR PROPERTY
Property, including but not limited to all furniture, holiday decorations,
machinery, apparatus, and equipment generally described on Exhibit 1.1.80
attached hereto, subject to depletions, replacements and additions in the
ordinary course of each Seller's business.
1.1.81 "Plans" means, to the extent transferable, all plans and
specifications for the Improvements to the extent such plans and specifications
are currently owned by the Sellers and in the possession and control of Sellers,
the Manager or their affiliates.
1.1.82 "Plaza Cayey" has the meaning set forth in the Recitals to
this Agreement.
1.1.83 "Plaza Cayey Parcel" has the meaning set forth in Section
2.1.1.
1.1.84 "Plaza del Sol" has the meaning set forth in the Recitals to
this Agreement.
1.1.85 "Plaza del Sol Parcel" has the meaning set forth in Section
2.1.1.
1.1.86 "Plaza Escorial" has the meaning set forth in the Recitals to
this Agreement.
1.1.87 "Plaza Escorial Parcel" has the meaning set forth in Section
2.1.1.
1.1.88 "Plaza Isabela" has the meaning set forth in the Recitals to
this Agreement.
1.1.89 "Plaza Isabela Parcel" has the meaning set forth in Section
2.1.1.
1.1.90 "Plaza Palma Real" has the meaning set forth in the Recitals
to this Agreement.
1.1.91 "Plaza Palma Real Parcel" has the meaning set forth in
Section 2.1.1.
1.1.92 "Portfolio Percentage" means an amount equal to (a) the
square footage in excess of 99% of the aggregate leasable square footage of the
Property, divided by (b) the square footage in excess of 99% of the aggregate
leasable square footage of the Property, the MPR Property and the CRV Property.
1.1.93 "Prior Owners" means BY Ventures, S.E., Palma Real
Associates, S.E., Plaza Isabela Development, S.E., Plaza Escorial Partners,
S.E., San German Commercial Developers, S.E. and Cayey Developers, S.E.
1.1.94 "Project(s)" means each Parcel and the portion of the
Property relating to such Parcel.
1.1.95 "Proper" has the meaning set forth in Section 2.1.
1.1.96 "Purchase Price" has the meaning set forth in Section 3.1.
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1.1.97 "Purchaser" has the meaning set forth in the first paragraph
of this Agreement.
1.1.98 "Purchaser Indemnitees" has the meaning set forth in Section
14.14.1.
1.1.99 "Purchaser's Agents" has the meaning set forth in Section
4.1.2. 1.1.100 "REA Parties" means the parties to the REAs other than Sellers.
1.1.101 "REAs" means, collectively, (i) that certain Deed of
Easements with Covenants and Restrictions Affecting Land, Number 264 executed
before Notary Public ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ on December 24th, 1997, by and
among Wal-Mart Puerto Rico, Inc., Plaza Escorial Partners, S.E. ("PEPSE") and
Home Depot, presented for and pending recording at Entry 276 of Volume 190 of
the Book of Daily Entries of the Registry of Property of Puerto Rico, Second
Section of Carolina; (ii) that certain Deed of Constitution of Easements and
Restrictive Covenants, Number 16 executed before Notary Public ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ on December 24th, 1997, by and between PEPSE and Home Depot, presented
for and pending recording at Entry 277 of Volume 190 of the Book of Daily
Entries of the Registry of Property of Puerto Rico, Second Section of Carolina;
(iii) that certain Deed of Constitution of Easements and Restrictive Covenants,
Number 6 executed before Notary ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ on June 4, 1998, by
and between By Ventures, S.E. and Home Depot, presented for and pending
recording at entry 211 of volume 242 of the Book of Daily Entries of the
Registry of Property of Puerto Rico, Third Section of Bayamon; and (iv) that
certain Deed of Easements with Covenants and Restrictions Affecting Land Number
13, executed before Notary Public ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Valldejuli on October 3, 2000,
by and among Cayey Developers, S.E. and Wal-Mart Puerto Rico, Inc., pending
presentation at the Registry of Property of Puerto Rico.
1.1.102 "Rent Commencement Adjustment" has the meaning set forth in
Section 3.8.
1.1.103 "Rent Rolls" means the Rent Rolls annexed hereto as Exhibit
1.1.103.
1.1.104 "Required Tenant(s)" means any tenant under any Lease which
demises 10,000 square feet or more in any Project.
1.1.105 "Reserve Reimbursement Adjustment" has the meaning set forth
in Section 3.7.
1.1.106 "San German Parcel" has the meaning set forth in Section
2.1.1
1.1.107 "San German Project" has the meaning set forth in the
Recitals to this Agreement.
1.1.108 "Security Deposits" means any security deposits deposited by
Tenants under Leases (whether cash or non-cash), together with any interest
which has accrued thereon as required by the terms of such Lease, but only to
the extent such interest has accrued for the account of the respective Tenant or
as required by law, to the extent not applied to such Tenants' obligations under
the Leases.
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1.1.109 "Seller(s)" has the meaning set forth in the first paragraph
of this Agreement.
1.1.110 "Service Contracts" means, subject to Section 4.3, all
contracts and agreements relating to the operation or maintenance of the Land,
Improvements or Personal Property, the terms of which extend beyond midnight of
the day preceding the Closing Date.
1.1.111 "Servicer" means a servicer of Lender, designated by and
acting on behalf of Lender with respect to the Existing Financing. The current
Servicer is GMAC Commercial Mortgage Corporation.
1.1.112 "Surface Rights Lease" means any lease of the Surface Rights
Space.
1.1.113 "Surface Rights Lease Adjustment" has the meaning set forth
in Section 3.9.
1.1.114 "Surface Rights Rent" has the meaning set forth in Section
3.9.
1.1.115 "Surface Rights Space" means the area above the existing
Bed, Bath & Beyond store at Plaza del Sol.
1.1.116 "Survey(s)" has the meaning set forth in Section 4.1.1.
1.1.117 "Survival Period" has the meaning set forth in Section
14.14.1.
1.1.118 "Tax" or "Taxes" means all taxes, fees, levies, or other
assessments, imposed by the United States or any state, commonwealth (including
Puerto Rico), territory, country, local, or foreign government or subdivision or
agency thereof including, without limitation, income, gross receipts, excise,
real and personal property, premiums, municipal, capital, value-added, goods and
services, consumption, sales, transfer, license, payroll, and franchise taxes,
and such term shall include any interest, penalties, or additions to tax
attributable to such taxes, fees, levies, or other assessments.
1.1.119 "Tenant" means each tenant, subtenant, lessee, sublessee,
licensee or other occupant of one or more of the Projects pursuant to a Lease.
1.1.120 "Terminated Lease Credit Amount" has the meaning set forth
in Section 3.6.
1.1.121 "Termination Notice" has the meaning set forth in Section
4.5.
1.1.122 "Theater Consideration" has the meaning set forth in Section
13.1.
1.1.123 "Theater LOI" has the meaning set forth in Section 13.1.
1.1.124 "Title Commitments" has the meaning set forth in Section
4.2.
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1.1.125 "Title Company" means Commonwealth Land Title Insurance
Company.
1.1.126 "Title Policy" has the meaning set forth in Section 4.6.
1.1.127 "Vacant Space" has the meaning set forth in Section 3.6.
1.1.128 "Vacant Space Leases" has the meaning set forth in Section
3.6.
1.1.129 "Warranties" means, to the extent transferable, any
unexpired guarantees, warranties, performance bonds or other bonds and security
issued by third-parties in favor of any Seller relating to the Improvements, the
Personal Property or any Construction Obligations.
1.1.130 "Weighted Average Rent" mean an amount equal to (a) the
aggregate annual base or minimum rent payable during the first lease year
(without taking into account any free-rent period) under all Vacant Space
Leases, divided by (b) the aggregated leasable square feet demised under all
Vacant Space Leases.
1.2 Construction.
1.2.1 As used in this Agreement, the singular shall include the
plural and the masculine gender shall include the feminine and neuter and vice
versa, as the context requires.
1.2.2 Words such as "herein," "hereinafter," "hereof," "hereto" and
"hereunder," when used with reference to this Agreement, refer to this Agreement
as a whole, unless the context otherwise requires.
1.2.3 The Recitals, Schedules and Exhibits annexed hereto, and the
capitalized terms defined therein, are hereby incorporated by reference into the
body of this Agreement as if the same were fully set forth herein.
1.2.4 Whenever used herein, the term "including" shall be construed
to mean "including without limitation."
2. THE PROPERTY.
2.1 Description. Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Sellers agree to sell and transfer,
and Purchaser agrees to purchase and acquire (or cause Permitted Assignees to
purchase and acquire), all right, title, and interest in and to the following
(collectively, the "Property"):
2.1.1 The Land;
2.1.2 The Improvements;
2.1.3 The Personal Property;
PURCHASE AND SALE AGREEMENT - PAGE 11
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2.1.4 To the extent transferable, all streets, alleys, passages,
easements (including, without limitation, reciprocal easement agreements, if
any), rights of way, ways, water, water courses, privileges, licenses,
hereditaments, and any appurtenances and other rights and benefits belonging to
or inuring to the benefit of each Seller and pertaining to the Parcel owned by
such Seller, if any;
2.1.5 The Leases and Security Deposits;
2.1.6 The REAs;
2.1.7 The Service Contracts;
2.1.8 The Warranties;
2.1.9 The Permits;
2.1.10 The Plans;
2.1.11 The Lender Reserves; and
2.1.12 to the extent transferable, all right, title and interest in
and to all utilities, utility lines, utility connections, utility commitments,
and utility capacity, and all reservations therefor and rights therein, relating
to any component of the Projects; and the present and future use of water, water
capacity, water rights, wastewater, wastewater capacity, drainage, and other
utility rights and facilities in connection with or benefiting any component of
the Projects
2.1.13 The names (a) ""Plaza Del Sol" with respect to the Plaza Del
Sol Project, (b) "Plaza Palma Real" with respect to the Plaza Palma Real
Project, (c) "Plaza Isabela" with respect to the Plaza lsabela Project,
(d) "Plaza Escorial" with respect to the Plaza Escorial Project, and (e) "Plaza
Cayey Centro" with respect to the Plaza Cayey Project.
2.2 "As-Is" Purchase.
2.2.1 Except as expressly set forth in this Agreement, the Property
is being sold in an "AS IS, WHERE IS" condition and "WITH ALL FAULTS" as of the
date of this Agreement and of Closing. Except as expressly set forth in this
Agreement, no representations or warranties have been made or are made and no
responsibility has been or is assumed by Sellers or by any partner, officer,
person, firm, agent, attorney or representative acting or purporting to act on
behalf of Sellers as to (i) the condition or state of repair of the Property;
(ii) the compliance or non-compliance of the Property with any applicable laws,
regulations or ordinances (including, without limitation, any applicable zoning,
building or development codes); (iii) the value, expense of operation, or income
potential of the Property; (iv) any other fact or condition which has affected
or might affect the Property or the condition, state of repair, compliance,
value, expense of operation or income potential of the Property or any portion
thereof; or (v) whether the Property contains Hazardous Material or pertaining
to the extent, location or nature of same. Purchaser's sole remedy for any
violation of Environmental Laws which becomes known to Purchaser for the first
time after the end of the Inspection Period and prior to Closing is to either
(a) terminate this Agreement in its entirety (except for continuing obligations
that survive the Closing or termination of this Agreement pursuant to the terms
of
PURCHASE AND SALE AGREEMENT - PAGE 12
CPR PROPERTY
this Agreement (herein called the "Surviving Obligations")) and to receive a
refund of the Deposit, or (b) close without reduction in the Purchase Price.
Except as provided in Section 14.14, Purchaser expressly waives any claims
against Sellers under any Environmental Law, whether based on statute or common
law.
2.2.2 The parties agree that all understandings and agreements
heretofore made between them or their respective agents or representatives are
merged in this Agreement and the Exhibits hereto annexed, which alone fully and
completely express their agreement, and that this Agreement has been entered
into after full investigation, or with the parties satisfied with the
opportunity afforded for full investigation, neither party relying upon any
statement or representation by the other unless such statement or representation
is specifically embodied in this Agreement or the Exhibits annexed hereto.
2.2.3 Except for the obligations of Sellers under Section 14.14 of
this Agreement (which expressly survive Closing) and under Section 12.2,
Purchaser waives its right to recover from, and forever releases and discharges
Sellers, Sellers' affiliates, members, directors, officers, attorneys, and
employees and agents of each of them, and their respective heirs, successors,
personal representatives and assigns (collectively, the "Releasees") from any
and all demands, claims (including, without limitation, causes of action in
tort), legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen (collectively, "Claims"), that may
arise on account of or in any way be connected with the Property, the physical
condition thereof, or any law or regulation applicable thereto (including,
without limitation, claims under the Environmental Laws). Without limiting the
foregoing, Purchaser, upon closing, shall be deemed to have waived, relinquished
and released Sellers and all other Releasees from any and all Claims, matters
arising out of latent or patent defects or physical conditions, violations of
applicable laws (including, without limitation, any Environmental Laws) and any
and all other acts, omissions, events, circumstances or matters affecting the
Property except for the obligations of Sellers under Section 14.14 of this
Agreement and Purchaser acknowledges that Purchaser's sole remedy shall be or a
claim for indemnification under Section 14.14. Purchaser specifically waives,
relinquishes and releases any right of rescission it may have against Sellers
after the Closing by virtue of any breach by Sellers of any representation,
warranty or covenant hereunder or under any closing document. Nothing contained
in this Section shall be deemed to modify or limit Sellers' obligations with
respect to Income Support Payments.
2.3 Agreement to Convey. Sellers agree to convey, and Purchaser agrees to
accept, title to the Land and Improvements by Deed of Purchase and Sale in the
condition described in Section 4.4 and title to the Personal Property, by ▇▇▇▇
of Sale, without warranty as to the condition of such personalty. Sellers agree
to convey, and Purchaser agrees to accept and assume, all of Sellers' right,
title, interest and obligations in and under the Leases, Service Contracts, the
REAs, Permits and Warranties by the appropriate assignment and assumption
agreements; provided that the obligations assumed thereunder shall be limited to
obligations which arise and accrue from and after the Closing Date.
2.4 All or Nothing Basis.
2.4.1 Anything to the contrary in this Agreement notwithstanding, in
the event that Purchaser wishes to terminate this Agreement, such termination
shall apply to all of the Property, and Purchaser shall not have the right,
under any circumstance, to purchase less than
PURCHASE AND SALE AGREEMENT - PAGE 13
CPR PROPERTY
all of the Property, this transaction being made on an "all or nothing" basis.
In addition, any termination of this Agreement (other than a termination
resulting from Sellers' willful default) shall also automatically result in a
termination of the CRV Agreement and the MPR Agreement, and any termination of
the CRV Agreement (other than a termination (a) resulting from willful default
of the sellers under the CRV Agreement or (b) pursuant to Sections
4.2,6.4,8.1,10.1.2 or 12.3 of the CRV Agreement) or the MPR Agreement (other
than a termination resulting from willful default of the sellers under the MPR
Agreement) shall also automatically result in a termination of this Agreement,
it being the intent hereof that Purchaser shall not have the right, under any
circumstance other than as specifically set forth in this Section 2.4 to
purchase any of the Property, the CRV Property and/or the MPR Property if it
does not purchase all of the Property and all of the CRV Property and MPR
Property.
2.4.2 Any extension of the Closing Date pursuant to Sections 4.2.2,6.4,
8.1, 10.15,12.3 and 13.7 of the CRV Agreement or the MPR Agreement shall
automatically extend the Closing Date under this Agreement.
3. PRICE AND PAYMENT.
3.1 Purchase Price. The purchase price for the Property (the "Purchase
Price") is FIVE HUNDRED SIXTY-NINE MILLION TWO HUNDRED SIXTEEN THOUSAND SEVEN
HUNDRED THIRTY-NINE AND NO/100 DOLLARS ($569,216,739.00) U.S., allocated as
follows:
Project Allocation
------- ----------
Plaza Del Sol $277,957,350.00
Plaza Palma Real $ 90,697,173.00
Plaza lsabela $ 46,867,042.00
Plaza Escorial $105,589,783.00
Plaza Cayey $ 44,852,194.00
San German Parcel $ 3,253,197.00
3.2 Payment. Payment of the Purchase Price is to be made in cash as
follows:
3.2.1 On or before November 4, 2004, Purchaser shall make an ▇▇▇▇▇▇▇
money deposit with the Title Company of FOURTEEN MILLION NINE HUNDRED FOURTEEN
THOUSAND AND NO/100 DOLLARS ($14,914,000.00) (the "Deposit").
3.2.2 The Deposit will be placed with and held in escrow in
accordance with Section 3.5 by the Title Company and invested as directed by
joint written instruction of Sellers and Purchaser. Any interest earned by the
Deposit shall be considered as part of the Deposit.
3.2.3 At Closing, Purchaser (or a Permitted Assignee) shall pay the
Purchase Price by (a) assuming the Assumed Indebtedness and (b) paying the
balance (after crediting the outstanding principal balance of the Assumed
Indebtedness) in cash, subject to adjustment for the prorations as provided
herein and subject further to the Net Earnout Adjustment, the Reserve
Reimbursement Adjustment, the Construction Cost Adjustment, the Rent
PURCHASE AND SALE AGREEMENT - PAGE 14
CPR PROPERTY
Commencement Adjustment and the Surface Rights Lease Adjustment under Sections
3.6 through 3.10, to the Title Company for disbursement to Sellers via wire
transfer in immediately available funds. Notwithstanding the foregoing, at
Closing (x) a portion of the Purchase Price equal to the Maximum Indemnification
Amount shall be deposited into escrow with the Title Company, to be held and
disbursed in accordance with the Holdback Escrow Agreement and (y) to the extent
applicable, a portion of the Purchase Price equal to the Income Support Payments
for the Income Support Term shall be deposited into escrow with the Escrow
Agent, to be held and disbursed in accordance with the Income Support Escrow
Agreement. The Deposit will be applied to payment of the Purchase Price in
accordance with Section 3.5.
3.2.4 The parties hereto acknowledge and agree that the value of any
Personal Property transferred hereunder is de minimis and no part of the
Purchase Price is allocable thereto.
3.3 Assumption of Existing Financing. The Projects are encumbered by
mortgages securing the Existing Financing. At Closing, Purchaser shall assume
all of the Assumed Indebtedness and all of Sellers' obligations under the Loan
Documents which arise from and after the Closing Date. Purchaser shall use
commercially reasonable efforts to obtain Lender's Consent and all other
documentation reasonably required by Lender as may be necessary to permit such
assignment and assumption. In the event that Lender or Servicer requires payment
of a deposit or fee in connection with the submission of the request for
Lender's Consent and/or the due diligence to obtain Lender's Consent, Sellers
agree to fund any such deposit or fee. At Closing, the closing costs described
in Section 7.1.4 and Section 7.2.4 shall be adjusted to account for Sellers'
payment of such deposit or fee. In the event that Sellers have paid such deposit
or fee and this Agreement is terminated for any reason other than a default by
Sellers under this Agreement, then Purchaser shall reimburse to Sellers 50% of
the unrefunded amount of such deposit or fee, if any.
3.4 Closing. Payment of the Purchase Price, as adjusted pursuant to the
terms of this Agreement, and the closing hereunder (the "Closing") will take
place on or before the Closing Date at the offices of Sellers' counsel in San
▇▇▇▇, Puerto Rico, or such other location as may be selected by Lender or
Servicer.
3.5 Escrow Provisions. The Deposit shall be held and disbursed by the
Title Company strictly in accordance with the following terms and provisions.
3.5.1 If the Closing occurs, then at Closing, the Deposit shall be
released to Sellers and shall be credited against the Purchase Price.
3.5.2 In the event Purchaser terminates this Agreement pursuant to
Section 4.5, the Title Company shall return the Deposit to Purchaser.
3.5.3 In all other cases, any and all payments made by the Title
Company from the Deposit shall be made in accordance with this Section 3.5.3. If
either Purchaser or Sellers deliver written notice to the Title Company
requesting release of the Deposit ("Disbursement Notice"), the Title Company
shall deliver a copy of such Disbursement Notice to the party who did not
deliver the Disbursement Notice. Unless within five (5) business days after
delivery of such Disbursement Notice by the Title Company, the Title Company
receives from such party a notice objecting to the release of the Deposit from
escrow (an "Objection Notice"), the Title Company shall disburse the Deposit as
set forth in the Disbursement Notice. If an Objection
PURCHASE AND SALE AGREEMENT - PAGE 15
CPR PROPERTY
Notice is delivered within such five (5) business-day period, the Title Company
shall continue to hold the Deposit until otherwise directed by either (i) joint
written instructions from Purchaser and Sellers, or (ii) a firm and final court
order binding on the Title Company which has not been stayed, vacated or
appealed before disbursement of the Deposit; provided, however, that
notwithstanding the foregoing, the Title Company shall have the right in the
event of such a dispute to deposit the Deposit with any federal or state court
then having jurisdiction over an interpleader action with respect to the
Deposit. The Title Company shall give written notice of any such deposit to
Purchaser and Sellers. Upon such deposit or other disbursement in accordance
with the provisions of this Section, the Title Company shall be relieved and
discharged of all further obligations with respect to the amounts so deposited
or disbursed and all further obligations and liability to the parties hereto
with respect to its obligations under this Agreement.
3.5.4 The parties acknowledge that the Title Company is acting as a
stakeholder at their request and for their convenience, that the Title Company
shall not be deemed to be the agent of either of the parties, and that the Title
Company shall not be liable to either of the parties for any act or omission on
its part unless taken or suffered in bad faith or in willful or negligent
disregard of this Agreement. Sellers and Purchaser shall jointly and severally
indemnify, defend and hold harmless the Title Company of, from and against any
and all loss, cost, expense (including reasonable attorney's fees), liability,
damages, actions, causes of action, demands or claims incurred in connection
with the faithful performance of the Title Company's duties hereunder.
3.5.5 The Title Company acknowledges its agreement to the provisions
of this Section 3.5 applicable to it by signing on the signature page of this
Agreement.
3.6 Net Earnout Adjustment.
3.6.1 At Closing, the Purchase Price shall be adjusted by an amount
(the "Net Earnout Adjustment") equal to the difference, if any, between (a) the
Lease Earnout Amount and (b) the Terminated Lease Credit Amount. For the
purposes of this Section 3.6,(i) "Lease Earnout Amount" shall mean an amount
equal to (x) the annual base or minimum rent payable during the first lease year
(without taking into account any free-rent period) under any executed leases
("Vacant Space Leases") in effect at Closing for space which is listed as vacant
on Exhibit 3.6.1 hereto or which was subject to a lease shown on the Rent Rolls
but such lease terminated or expired prior to Closing ("Vacant Space"),
excluding any Surface Rights Lease, Cayey Outparcel Leases and/or Escorial
Outparcel Leases, divided by (y) the capitalization rate for the Project in
which such space is located, as set forth on Exhibit 3.6.2 hereto (the "Cap
Rate"); and (ii) "Terminated Lease Credit Amount" shall mean an amount equal to
(x) the annual base or minimum rent payable on the Effective Date under any
leases which were listed on the Rent Rolls and (A) which expired or terminated
prior to the Closing Date (excluding any Leases which have been terminated at
Purchaser's request pursuant to Section 5.19), (B) the Tenant under such lease
vacated its demised premises prior to the Closing Date (other than Outback
Steakhouse and Payless Shoes at the Plaza del Sol Project), or (C) the Tenant
under such lease is subject to a bankruptcy or insolvency proceeding on the
Closing Date, divided by (y) the applicable Cap Rate.
3.6.2 In the event that the Lease Earnout Amount exceeds the
Terminated Lease Credit Amount, the Purchase Price shall be increased by the Net
Earnout Adjustment. In the event that the Terminated Lease Credit Amount exceeds
the Lease Earnout Amount, the
PURCHASE AND SALE AGREEMENT - PAGE 16
CPR PROPERTY
Purchase Price shall be reduced by the Net Earnout Adjustment. Notwithstanding
the foregoing, in the event that the aggregate of the Terminated Lease Credit
Amount under this Agreement and the Terminated Lease Credit Amounts under the
MPR Agreement and the CRV Agreement exceeds the aggregate of the Lease Earnout
Amount under this Agreement and the Lease Earnout Amounts under the MPR
Agreement and the CRV Agreement, the Net Earnout Adjustment shall be zero and
the Purchase Price shall not be adjusted under this Section 3.6.
3.6.3 Notwithstanding the foregoing, if at Closing the leasable
square footage demised under all Leases then in effect at the Property, the MPR
Property and the CRV Property exceeds 99% of the aggregate leasable square
footage of the Property, the MPR Property and the CRV Property, then for the
purposes of determining the Net Earnout Adjustment, the Vacant Space Leases (or
portions thereof) demising in excess of such 99% shall be excluded from the
above calculation. In the event that more than one Vacant Space Lease hereunder
and/or under the MPR Agreement and/or the CRV Agreement has been executed, the
rent to be excluded from the calculation of Lease Earnout Amount shall be an
amount equal to the Portfolio Percentage multiplied by the product of (a) the
square footage in excess of 99% of the aggregate leasable square footage of the
Property, the MPR Property and the CRV Property, multiplied by (b) the Weighted
Average Rent payable under all Vacant Space Leases at the Property, the MPR
Property and the CRV Property.
3.6.4 In the event that Purchaser receives a Terminated Lease Credit
Amount with respect to a Tenant who is subject to a bankruptcy or insolvency
proceeding on the Closing Date and thereafter such Tenant assumes the lease for
which Purchaser received the Terminated Lease Credit Amount, Purchaser shall pay
such Terminated Lease Credit Amount to Sellers within ten (10) business days
after the date on which Purchaser receives notice that such Tenant assumes such
lease and such Tenant pays all amounts outstanding under such lease; provided,
however, in the event that the Net Earnout Adjustment would have been zero
pursuant to the second sentence of Section 3.6.2 even if Purchaser had not
received a Terminated Lease Credit Amount for such Tenant (and Terminated Lease
Credit Amounts with respect to any other Tenants for which Purchaser received
Terminated Lease Credit Amounts with respect to bankruptcy or insolvency
proceedings and such Tenants assumed their leases after the Closing and paid all
amounts outstanding), Purchaser shall not be required to pay such Terminated
Lease Credit Amount to Sellers. The provisions of this Section 3.6.4 shall
survive the Closing.
3.6.5 Notwithstanding the foregoing, in the event that Sellers
terminate the Outback Steakhouse and/or Payless Shoes leases at the Plaza del
Sol Project without Purchaser's prior written consent and, as of the Closing
Date, the space occupied by Outback Steakhouse and/or Payless Shoes has not been
leased to a new Tenant for at least the base rent payable by Outback Steakhouse
and/or Payless Shoes, as applicable, then at Closing, the Purchase Price shall
be reduced by an amount equal to (x) the annual base or minimum rent payable on
the Effective Date under the Outback Steakhouse Lease and/or Payless Shoes
Lease, as applicable, divided by (y) the Cap Rate applicable to Plaza del Sol.
3.7 Reserve Reimbursement Adjustment. At Closing, the Purchase Price shall
be increased by an amount (the "Reserve Reimbursement Adjustment") equal to the
full amount of all reserves, deposits and escrows ("Lender Reserves") then held
by Lender or Servicer, to the extent Lender or Servicer certifies such amounts
in writing. The amount of all Lender Reserves held by Lender or Servicer as of
the date hereof is set forth on Exhibit 3.7.
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3.8 Rent Commencement Adjustment. In the event that any Surface Rights
Lease, Cayey Outparcel Leases and/or the Escorial Outparcel Leases have been
executed prior to the Closing Date, then at Closing the Purchase Price shall be
decreased by an amount (the "Rent Commencement Adjustment") equal to the sum of
(a) the product of (i) annual base or minimum rent payable during the first
lease year (without taking into account any free-rent period) under any Surface
Rights Lease multiplied by (ii) a fraction, the numerator of which is the number
of days during the period commencing on the Closing Date and ending on the day
immediately preceding the rent commencement date set forth in such Surface
Rights Lease and the denominator of which is 365;(b) with respect to each Cayey
Outparcel Lease, the product of (i) the annual base or minimum rent payable
during the first lease year (without taking into account any free-rent period)
under such Cayey Outparcel Lease multiplied by (ii) a fraction, the numerator of
which is the number of days during the period commencing on the Closing Date and
ending on the day immediately preceding the date on which the Tenant under such
Cayey Outparcel Lease commences paying base rent and the denominator of which is
365;and (c) with respect to each Escorial Outparcel Lease, the product of (i)
the annual base or minimum rent payable during the first lease year (without
taking into account any free-rent period) under such Escorial Outparcel Lease
multiplied by (ii) a fraction, the numerator of which is the number of day
during the period commencing on the Closing Date and ending on the day
immediately preceding the date on which the Tenant under such Cayey Outparcel
Lease commences paying base rent and the denominator of which is 365. If the
Surface Rights Lease does not set forth an actual calendar date as the rent
commencement date of such lease, then not later than ten (10) days prior to the
Closing Date, Sellers and Purchaser shall mutually agree upon a date to be
deemed the rent commencement date thereunder. Not later than ten (10) days prior
to the Closing Date, Sellers and Purchaser shall mutually agree upon a good
faith estimate of the dates on which it is anticipated that the Tenant(s) under
the Cayey Outparcel Leases and Escorial Outparcel Leases will commence paying
base rent. If Sellers and Purchaser are unable to agree upon such dates within
such time periods, Sellers and/or Purchaser shall submit their dispute to
arbitration pursuant to Section 14.18 hereof and the determination of the
arbitrator of the deemed rent commencement date of the Surface Rights Lease
and/or the anticipated date that a Tenant will commence paying base rent under
the Cayey Outparcel Leases and Escorial Outparcel Leases shall be binding on
Sellers and Purchaser. Within ten (10) business days after any of such Tenant(s)
under the Cayey Outparcel Leases and Escorial Outparcel Leases commences paying
base rent, Purchaser shall give Sellers notice thereof and Sellers and Purchaser
shall readjust the portion of the Rent Commencement Adjustment applicable to
such Cayey Outparcel Lease or Escorial Outparcel Lease (but not the portion of
the Rent Commencement Adjustment applicable to the Surface Rights Lease) if such
date is not the estimated date on which Sellers and Purchaser based such portion
of the Rent Commencement Adjustment. The provisions of the immediately preceding
sentence shall survive the Closing.
3.9 Surface Rights Lease Adjustment. In the event that the Surface Rights
Lease has been executed prior to the Closing Date and the annual base or minimum
rent payable during the first lease year (without taking into account any
free-rent period) thereunder (the "Surface Rights Rent") is greater or less than
$700,000.00 per annum, the Purchase Price shall be adjusted (the "Surface Rights
Lease Adjustment) as set forth immediately below. If the Surface Rights Rent
exceeds $700,000.00 (and provided that the base rent stated in such Surface
Rights Lease does not decrease in any of the lease years following such first
lease year), the Purchase Price shall be increased by an amount equal to (x) the
amount by which the Surface Rights Rent exceeds $700,000.00, divided by (y) the
Cap Rate applicable to Plaza del Sol. If the Surface Rights Rent is less than
$700,000.00, the Purchase Price shall be decreased
PURCHASE AND SALE AGREEMENT - PAGE 18
CPR PROPERTY
by an amount equal to (x) the amount by which $700,000.00 exceeds the Surface
Rights Rent, divided by (y) the Cap Rate applicable to Plaza del Sol.
3.10 Construction Costs Adjustment. In the event that the Del Sol Parking
Deck Work, the Cayey Outparcel Construction and/or the Escorial Outparcel
Construction have not been completed and/or the costs thereof have not been paid
in full, then at Closing, the Purchase Price shall be reduced by an amount equal
to the Construction Costs Adjustment.
4. INSPECTIONS AND APPROVALS.
4.1 Inspections; Access.
4.1.1 Sellers have delivered or, within five (5) days after the
Effective Date, shall deliver to Purchaser copies of all (a) Leases, (b) Service
Contracts, (c) operating and financial statements relating to the period of the
Sellers' ownership of the Property, (d) Loan Documents, (e) Sellers' existing
title policies and all documents and instruments referenced as exceptions in
such title policies to the extent in the possession of Sellers or Manager
("Existing Title Policies"), (f) existing surveys (each, a "Survey" and
collectively, the "Surveys") relating to the Property, and (g) the Environmental
Reports. Thereafter during the Inspection Period, Sellers will provide or make
available to Purchaser, within five (5) days after written request by Purchaser,
all other documents reasonably requested by Purchaser which are in the
possession and control of Sellers or Manager and Sellers shall provide Purchaser
and Purchaser's employees, agents and representatives with reasonable access,
during normal business hours, to its records regarding the Property kept by
Manager, including, to the extent in Sellers' or Manager's possession and
control: (x) all maintenance and repair records of the Property during Sellers'
period of ownership, (y) tax bills for the Property, and (z) any correspondence
contained in such records to or from (i) any governmental authorities having
jurisdiction over the Property and/or (ii) tenants of the Property; but, shall
specifically exclude any records dealing with appraisals or valuations and
interoffice correspondence.
4.1.2 During the Inspection Period, Sellers agree to allow Purchaser
and Purchaser's engineers, architects, employees, agents and representatives
("Purchaser's Agents") reasonable access, during normal business hours, to the
Projects and to the records, if any, maintained for Sellers by Manager during
normal business hours; provided, however, if Purchaser gives written notice to
Seller on or prior to the Approval Date that Purchaser elects to proceed with
the transactions contemplated by this Agreement, then the access rights
hereunder shall continue after the Approval Date until the earlier to occur of
the Closing Date or termination of this Agreement. Such access shall be solely
for the purposes of (i) reviewing Leases and Service Contracts and any records
relating thereto; (ii) reviewing records relating to operating expenses; and
(iii) inspecting the physical condition of the Projects and conducting
non-intrusive physical or environmental inspections of the Projects. Purchaser
shall not conduct or allow any physically intrusive testing of, on or under any
Project without first obtaining the written consent (which shall not be
unreasonably withheld or delayed if Purchaser's Phase I audit recommends such
invasive testing) of Sellers as to the timing and scope of work to be performed.
4.1.3 Purchaser agrees that, in making any physical or environmental
inspections of the Projects, Purchaser and all of Purchaser's Agents entering
onto the Projects shall carry not less than Two Million Dollars ($2,000,000)
comprehensive general liability
PURCHASE AND SALE AGREEMENT - PAGE 19
CPR PROPERTY
insurance insuring all activity and conduct of Purchaser and Purchaser's Agents
while exercising such right of access and naming Sellers as additional insureds.
Purchaser represents and warrants that it carries not less than Two Million
Dollars ($2,000,000) commercial general liability insurance with contractual
liability endorsement which insures Purchaser's indemnity obligations hereunder,
and will provide Sellers with written evidence of same prior to entry on any
Project.
4.1.4 Purchaser agrees that in exercising its right of access
hereunder, Purchaser will use and will cause Purchaser's Agents to use
reasonable efforts not to interfere with the activity of tenants or any persons
occupying or providing service at the Property. Purchaser shall, at least
forty-eight (48) hours prior to inspection, give Sellers written notice of its
intention to conduct any inspections, so that Sellers shall have an opportunity
to have a representative present during any such inspection. During the
Inspection Period, Purchaser shall not contact any current or potential tenants
of the Property without the prior consent of Sellers, which consent shall not be
unreasonably withheld. Sellers expressly reserve the right to have a
representative present during any discussion with any such tenants. Purchaser
agrees to cooperate with any reasonable request by Sellers in connection with
the timing of any such inspection.
4.1.5 Unless the Sellers specifically and expressly otherwise agree
in writing, Purchaser agrees that the results of all inspections, analyses,
studies and similar reports relating to the Property prepared by or for
Purchaser utilizing any information acquired in whole or in part through the
exercise of Purchaser's inspection rights or provided by Sellers or Sellers'
agents or representatives (the "Proprietary Information") shall be subject to
the terms of that certain Exclusive Dealing and Confidentiality Agreement dated
September 28, 2004 between Purchaser and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as amended to the
date hereof (the "Confidentiality Agreement") and shall not be disclosed to any
other person except (i) those assisting Purchaser with the transaction,
potential investors and/or joint venturers, rating agencies and Lender, and then
only in accordance with such Confidentiality Agreement. Further, if the purchase
and sale contemplated hereby fails to close for any reason whatsoever, Purchaser
agrees to return to Sellers, or cause to be returned to Sellers, all Proprietary
Information and any copies thereof made by Purchaser. Notwithstanding any other
term of this Agreement, the provisions of this Section 4.1.5 shall survive the
termination of this Agreement. The provisions of this Section 4.1.5 shall
terminate upon Closing.
4.1.6 Purchaser shall, at its sole cost and expense, promptly
restore any physical damage or alteration of the physical condition of the
Property which results from any inspections conducted by or on behalf of
Purchaser. All inspections shall be conducted at Purchaser's sole cost and
expense and in strict accordance with all requirements of applicable law.
4.1.7 Except as specifically set forth herein, Sellers make no
representations or warranties as to the truth, accuracy, completeness,
methodology of preparation or otherwise concerning any engineering or
environmental reports or any other materials, data or other information supplied
to Purchaser in connection with Purchaser's inspection of the Property (e.g.,
that such materials are complete, accurate or the final version thereof, or that
such materials are all of such materials as are in each Seller's possession).
Except as specifically set forth herein, it is the parties' express
understanding and agreement that any materials which Purchaser is allowed to
review are provided only for Purchaser's convenience in making its own
examination and determination prior to the Approval Date as to whether it wishes
to purchase
PURCHASE AND SALE AGREEMENT - PAGE 20
CPR PROPERTY
the Property, and, in doing so, Purchaser shall rely exclusively on its own
independent investigation and evaluation of every aspect of the Property and not
on any materials supplied by Sellers. Except as specifically set forth herein,
Purchaser expressly disclaims any intent to rely on any such materials provided
to it by Sellers in connection with its inspection and agrees that it shall rely
solely on its own independently developed or verified information.
4.1.8 SUBJECT TO SECTION 14.19.2, PURCHASER AGREES TO INDEMNIFY,
DEFEND, AND HOLD SELLERS AND MANAGER FREE AND HARMLESS FROM ANY LOSS, INJURY
(INCLUDING DEATH), DAMAGE, CLAIM, LIEN, COST OR EXPENSE, INCLUDING REASONABLE
ATTORNEYS' FEES AND COSTS, ARISING OUT OF OR RELATING TO A BREACH OF THE
FOREGOING AGREEMENTS BY PURCHASER IN CONNECTION WITH THE INSPECTION OF THE
PROPERTY, OR OTHERWISE FROM THE EXERCISE BY PURCHASER OR PURCHASER'S AGENTS OF
THE RIGHT OF ACCESS UNDER THIS SECTION 4.1. THIS SECTION 4.1.8 SHALL SURVIVE
CLOSING OR THE TERMINATION OF THIS AGREEMENT.
4.1.9 Purchaser shall keep the Property free from any liens arising
out of any work performed, materials furnished or obligations incurred by or on
behalf of Purchaser or Purchaser's Agents with respect to any inspection or
testing of the Property. If any such lien at any time shall be filed, Purchaser
shall cause the same to be discharged of record within thirty (30) days after
notice of same by satisfying the same or, if Purchaser, in its discretion and in
good faith determines that such lien should be contested, by recording a bond.
4.2 Title and Survey.
4.2.1 Sellers have delivered the Existing Title Policies and Surveys
to Purchaser and have ordered, on Purchaser's behalf, (i) a separate commitment
for title insurance on each Project issued by the Title Company and dated after
the Effective Date (each a "Title Commitment" and collectively, the "Title
Commitments") and (ii) an update of each Survey which meets the minimum standard
detail requirements for an ALTA/ACSM Land Title Survey (collectively, the
"Updated Surveys"). Purchaser shall have until the Approval Date to provide
written notice to Sellers (the "Title Notice") of any matters shown by the
Existing Title Policies or Surveys which are not satisfactory to Purchaser;
provided, however, that in the event any new and additional matters or
requirements are taken as exceptions to title by the Title Company in the Title
Commitments or thereafter, then Purchaser shall deliver a Title Notice with
respect to such new matters or requirements to Sellers on or before the later of
(x) fifteen (15) business days after receipt of a Title Commitment raising such
new matter or requirement and (y) the Approval Date.
4.2.2 If any Updated Survey reveals any matter not shown on the
corresponding Survey which is not satisfactory to Purchaser, Purchaser shall
deliver a Title Notice to Sellers within fifteen (15) business days of receipt
of the Updated Survey which shall specify the objection (the objections stated
in any Title Notice given pursuant to Sections 4.2.1 or 4.2.2 are herein
collectively called the "Title Objections"). Sellers shall then have until the
Approval Date, or in the case of a Title Notice relating to a new matter or
requirement given after the Approval Date, a period of ten (10) business days
after receipt of such Title Notice (the "Cure Date") to give written notice (the
"Title Election") to Purchaser as to whether Sellers elect to cure such Title
Objections. Sellers shall have no obligation whatsoever to expend or agree to
expend any funds, to undertake or agree to undertake any obligations or
otherwise to cure or agree to cure any Title Objections, provided that,
notwithstanding the foregoing, if any Title
PURCHASE AND SALE AGREEMENT - PAGE 21
CPR PROPERTY
Objections consist of Consensual Liens, Sellers shall be required to expend the
aggregate amount of such Consensual Liens to remove of record (by payment or
bonding) such Consensual Liens. Sellers shall not be deemed to have any
obligation to cure any Title Objections (other than Consensual Liens) unless
Sellers expressly undertake such an obligation by a written notice to or written
agreement with Purchaser given or entered into on or prior to the relevant Cure
Date and which recites that it is in response to a Title Notice and/or a Survey
Notice. If Sellers elect not to cure any Title Objections (other than Consensual
Liens), Purchaser's sole right shall be to elect within ten (10) business days
after receipt of Sellers' Title Election to either (a) terminate this Agreement
(other than Surviving Obligations) and to receive a refund of the Deposit, or
(b) accept title in its current condition, without any adjustment in the
Purchase Price (other than any abatement for uncured Consensual Liens), in which
event such Title Objections shall be deemed to have been waived for all
purposes. If Sellers elected to cure any Title Objection and such cure is not
completed by the Closing Date, Sellers have the right to postpone the Closing
for up to thirty (30) days in order to provide Sellers with an opportunity to
cure such Title Objection.
4.2.3 All matters (other than Consensual Liens) shown on the
Existing Title Policies and the Title Commitment and/or Survey and Updated
Survey with respect to which Purchaser fails to give a Title Notice on or before
the last date for so doing, or with respect to which a timely Title Notice is
given but Sellers elect not to cure as provided above, shall be deemed to be
Permitted Encumbrances, subject, however, to Purchaser's termination rights
provided in this Section 4.2 and in Section 4.5 hereof.
4.3 Contracts. On or before the Approval Date, Purchaser shall notify
Sellers in writing if Purchaser elects not to assume at Closing any of the
Service Contracts which are identified on Exhibit 4.3 attached hereto. At
Closing, Sellers shall give notice of termination of such disapproved Service
Contract(s); provided, if by the terms of the disapproved contract Sellers have
no right to terminate same on or prior to Closing, of if any fee or other
compensation is due thereunder as a result of such termination, Purchaser shall
be required at Closing to assume all obligations thereunder until the effective
date of the termination and to assume the obligation to pay or to reimburse
Sellers for the payment of the termination charge relating thereto.
4.4 Permitted Encumbrances. Sellers shall deliver the Property to
Purchaser (or its Permitted Assignees) at Closing, free and clear of all Liens
other than:
4.4.1 All exceptions to title shown in the Title Commitments or
matters shown on the Surveys and Updated Surveys which Purchaser has approved or
is deemed to have approved pursuant to Section 4.2 hereof;
4.4.2 All Service Contracts which Purchaser has not elected to
terminate;
4.4.3 All Leases;
4.4.4 The Lien of real and personal property taxes and assessments,
which are not yet due and payable;
4.4.5 Rights of Tenants under the Leases; and
4.4.6 The instruments described in Exhibit 4.4.6 attached hereto.
PURCHASE AND SALE AGREEMENT - PAGE 22
CPR PROPERTY
All of the foregoing are referred to herein collectively as "Permitted
Encumbrances." Notwithstanding the foregoing, Liens that Sellers have expressly
agreed to remove or discharge under this Agreement shall not be Permitted
Encumbrances.
4.5 Purchaser's Right to Terminate. If Purchaser gives written notice
("Termination Notice") to Sellers on or before 5:00 p.m. (New York time) on or
before the Approval Date that Purchaser elects to terminate this Agreement
(which election may be made in Purchaser's sole and absolute discretion), this
Agreement shall be deemed terminated as of the date of such notice and the
Deposit shall be returned to Purchaser, whereupon neither the Sellers nor the
Purchaser shall have any further liability to the other hereunder, except for
Surviving Obligations hereunder. If Purchaser gives written notice to Sellers on
or before the Approval Date that Purchaser elects to proceed with the
transactions contemplated by this Agreement or if Purchaser fails to timely give
the Termination Notice, then this Agreement shall continue in full force and
effect.
4.6 Delivery of Title Policy at Closing. As a condition to Purchaser's
obligation to close, the Title Company shall deliver to Purchaser at Closing an
ALTA Owner's Policy of Title Insurance for each Parcel (each, a "Title Policy"
and collectively, the "Title Policies"), together with all endorsements that
Purchaser may request and that are available with respect to property located in
the Commonwealth of Puerto Rico, issued by the Title Company as of the date and
time of the recording of the Deed of Purchase and Sale for each Parcel, in the
amount of the portion of the Purchase Price allocated to such Parcel, insuring
Purchaser as owner of marketable fee simple title to the Property, and subject
only to the Permitted Encumbrances. Sellers shall execute at Closing an
affidavit in such form as the Title Company shall reasonably require for the
issuance of the Title Policies.
5. SELLERS' COVENANTS FOR PERIOD PRIOR TO CLOSING.
Until Closing or termination of this Agreement, Sellers hereby covenant
and agree with Purchaser:
5.1 Insurance. Sellers shall keep the Projects insured under the current
policies against fire and other hazards covered by extended coverage endorsement
and commercial general liability insurance against claims for bodily injury,
death and property damage occurring in, on or about the Projects.
5.2 Operation. Sellers shall operate and maintain the Projects
substantially in accordance with Sellers' past practices, normal wear and tear
and damage from casualty and condemnation excepted.
5.3 New Contracts. Sellers shall have the right to enter into third-party
Service Contracts which are cancelable on thirty (30) days written notice
without penalty or fee without the prior consent of Purchaser. If any Seller
enters into any such Service Contract, such Seller shall promptly provide
written notice thereof to Purchaser and unless Purchaser, within five (5)
business days thereafter, notifies such Seller in writing of its intention to
not assume such contract, it shall be treated as a Service Contract approved by
Purchaser under Section 4.3 hereof. Seller shall not enter into any other
Service Contract without the prior consent of Purchaser.
PURCHASE AND SALE AGREEMENT - PAGE 23
CPR PROPERTY
5.4 Leases. Prior to the Approval Date, Sellers shall not terminate or
accept the surrender of any existing Leases without the prior consent of
Purchaser unless Sellers enter into a new Lease for the space demised under such
terminated Lease which new Lease provides for an annual base rent in excess of
the annual base rent payable under the terminated Lease. In the event that
Sellers terminate or accept the surrender of any Lease without Purchaser's prior
written consent pursuant to the foregoing, Sellers shall deliver copies thereof
to Purchaser within five (5) business days after execution thereof.
Notwithstanding the foregoing, any termination of the Outback Steakhouse Lease
and/or the Payless Shoes Lease at Plaza del Sol shall be subject to Section
3.6.5. Prior to the Approval Date, Sellers shall have the right to execute new
leases in accordance with Sellers' past practices without the prior consent of
Purchaser; provided that (a) the base or minimum rent payable for the space
demised under such new Lease is not less than eighty percent (80%) of the base
or minimum rent set forth on Exhibit 5.4 for such space, (b) the tenant
thereunder is Credit-Worthy, (c) such Lease will not cause the violation of any
exclusive use rights granted under, or prohibited use clause in, any other Lease
at the Property or any REA's, (d) the term (including renewal options) thereof
shall not exceed ten (10) years in the case of any outparcel space Lease and
five (5) years in the case of any other Lease, unless (i) in the case of the
proposed Surface Rights Lease with Best Buy Company, Inc., the base rents are
not less than the base rents set forth in the draft of such lease delivered to
Purchaser prior to the Effective Date, (ii) in the case of any outparcel space
Lease, the base rent as of the tenth(10th) anniversary of the rent commencement
date (and as of each tenth (10th) anniversary thereafter, if applicable) is at
least twenty percent (20%) more than the base rent payable at the beginning of
the immediately preceding ten (10) year period or (iii) in the case of any other
Lease, the base rent as of the fifth (5th)anniversary of the rent commencement
date (and as of each fifth (5th) anniversary thereafter, if applicable) is at
least twenty percent (20%) more than the base rent payable at the beginning of
the immediately preceding five (5) year period; (e) such new Lease provides that
the tenant thereunder will pay its proportionate share of common area
maintenance charges, real estate taxes and insurance charges for the Project in
which such tenant is leasing space, (f) such new Lease does not require the
landlord thereunder to perform any tenant improvements (other than completion of
the building in which the leased premises are located) or provide any tenant
improvement allowance, (g) to the extent that a Seller is required to obtain the
consent of the Lender or Servicer to such new Lease under the Loan Documents,
such consent has been obtained, and (h) Sellers shall deliver copies thereof to
Purchaser within five (5) business days after execution thereof. Prior to the
Approval Date, Sellers also have the right to renew or amend any existing Leases
in accordance with Sellers' past practices without the prior consent of
Purchaser; provided that (w) any such amendment does not reduce the term of such
Lease, (x) the base or minimum rent payable thereunder is not less than the base
or minimum rent payable by such tenant prior to such renewal or amendment
(unless such tenant has the right to renew its Lease pursuant to the express
terms of its Lease), (y) the renewal term thereof shall not exceed ten (10)
years in the case of any outparcel space and five (5) years in the case of any
other Lease (unless such Lease provides for a longer renewal term as of the date
hereof), unless the base rent payable as of the commencement of each renewal
term in excess of five (5) or ten (10) years increases by not less than twenty
percent (20%) over the base rent payable as of the commencement of the
immediately preceding term; and (z) Sellers shall deliver copies thereof to
Purchaser within five (5) business days after execution thereof. Except as
specifically provided in this Section 5.4, prior to the Approval Date, Sellers
shall not execute any new Lease or renew, amend or terminate any existing Leases
(unless a Seller is required to renew, amend or terminate an existing Lease
pursuant to the terms thereof) without the prior written consent of Purchaser,
not to be unreasonably withheld or delayed. From and after the Approval Date,
Sellers shall not execute any new Lease or renew, amend or terminate any
existing Leases
PURCHASE AND SALE AGREEMENT - PAGE 24
CPR PROPERTY
(unless a Seller is required to renew, amend or terminate an existing Lease
pursuant to the terms thereof) without the prior written consent of Purchaser,
not to be unreasonably withheld or delayed. In the event that Purchaser's
consent is required to any of the foregoing, Purchaser will be deemed to have
approved any such action if Purchaser fails to respond to any request for
consent within five (5) business days after receipt of such request for consent.
5.5 Other Documents. Sellers shall not voluntarily take any of the
following actions (where Sellers would have the discretion not to so act)
without the prior written consent of Purchaser, not to be unreasonably withheld
or delayed (unless such action is disclosed or contemplated in this Agreement or
in the Exhibits attached hereto, in which case Purchaser's consent shall not be
required): (a) amend any Service Contracts or REAs; (b) renew or extend the term
of any of its Service Contracts (except in connection with the exercise by the
service providers of options to renew set forth in such Service Contracts); (c)
enter into any new Service Contract (except as provided in Section 5.3) or REA
or cancel or terminate any Service Contract or REA; (d) modify, amend, assign
(except as contemplated herein) or terminate the Loan Documents; or (e) enter
into, extend, modify or terminate any other agreement affecting the Property,
the term of which would extend beyond the Closing. In the event that Purchaser's
consent is required to any of the foregoing, Purchaser will be deemed to have
approved any such action if Purchaser fails to respond to any request for
consent within five (5) business days after receipt of such request for consent.
5.6 Reports. Subject to the provisions of Section 4.1.5, Sellers shall
deliver to Purchaser copies of monthly operating reports, leasing activity
reports, tenant sales reports, reports regarding changes in Liens, reports on
all litigation (other than litigation covered by insurance) which affects the
Projects or the Sellers, changes in use restrictions or REAs, decisions to
develop or build upon any Property and all other material reports and
information generated by Sellers; provided, that Sellers shall deliver such
materials as they are prepared (if applicable) in good faith, in the ordinary
course of Sellers' business and consistent with Sellers' then practice, but
Sellers do not and shall not warrant the completeness or accuracy thereof.
5.7 Additional Encumbrances. Sellers shall not hypothecate, lien, mortgage
or otherwise encumber or voluntarily permit the imposition or creation of any
lien (other than the liens created by the Loan Documents) with respect to the
Property.
5.8 Employment Agreements. Sellers shall not enter into any employment
contract or collective bargaining agreement, written or oral, which would be
binding on Purchaser.
5.9 Notices. Sellers shall deliver to Purchaser copies of (a) all notices
of default sent or received by any Seller to or from any tenant of the Property
and notices received by any Seller of claims asserted against any Seller with
respect to the Leases, (b) all notices of default sent by Lender to any Seller,
(c) all cancellation, termination or surrender notices or notices of any
exercise of any option sent or received by any Seller to or from any tenant of
the Property, (d) all notices of default sent or received by any Seller with
respect to any Service Contract, Permit, Warranty or REA, and (e) all notices of
violations of applicable Laws in connection with the Property. Sellers shall
also deliver notice to Purchaser of (i) any casualty affecting any Property
promptly after the occurrence thereof or (ii) condemnation affecting any
Property promptly after receipt of notice thereof.
5.10 Cayey Construction. CPR Cayey has commenced, and shall have the right
and obligation (subject to Force Majeure) to continue, construction of the Cayey
Outparcel Space. In
PURCHASE AND SALE AGREEMENT - PAGE 25
CPR PROPERTY
connection therewith, CPR Cayey has entered into the contracts described in
Exhibit 5.10.1 annexed hereto (the "Cayey Construction Contracts"). The Cayey
Outparcel Space shall be built substantially in accordance with the plans and
specifications described in Exhibit 5.10.1 ("Cayey Plans") and the budget
annexed hereto as Exhibit 5.10.2. CPR Cayey shall not modify the Cayey
Construction Contracts or the Cayey Plans without the prior written consent of
Purchaser, which consent shall not be unreasonably withheld, conditioned or
delayed. In the event that Purchaser's consent is required to any of the
foregoing, Purchaser will be deemed to have approved any such action if
Purchaser fails to respond to any request for consent within five (5) business
days after receipt of such request for consent. In the event that CPR Cayey
shall not have completed the Cayey Outparcel Space by the Closing Date, then at
Closing, (a) the Purchase Price shall be reduced by an amount (the "Cayey
Construction Adjustment") equal to the sum of the outstanding amount necessary
to complete the Cayey Outparcel Space including any unpaid amounts due under the
Cayey Construction Contracts (provided, if CPR Cayey is disputing any such
unpaid amounts with the contractors, CPR Cayey shall have the right to deposit
such disputed amounts with the Title Company pending resolution of such dispute
in lieu of reducing the Purchase Price); (b) CPR Cayey shall assign the Cayey
Construction Contracts and Cayey Plans to Purchaser, (c) CPR Cayey shall deliver
to Purchaser the applicable Construction Documents relating to the construction
of the Cayey Outparcel Space, and (d) Purchaser shall assume all of CPR Cayey's
rights and obligations under the Cayey Construction Contracts and Cayey Plans.
Purchaser shall indemnify, defend and hold harmless Sellers of, from and against
any and all loss, cost, expense (including reasonable attorney's fees),
liability, damages, actions, causes of action, demands or claims with respect to
Purchaser's failure to perform any of such obligations so assumed by Purchaser.
CPR Cayey shall indemnify, defend and hold harmless Purchaser of, from and
against any and all loss, cost, expense (including reasonable attorney's fees),
liability, damages, actions, causes of action, demands or claims with respect to
CPR Cayey's failure to pay to contractors any amounts CPR Cayey is disputing;
provided that Purchaser shall give notice to CPR Cayey within three (3) business
days after any event for which Purchaser is entitled to indemnification under
this Section arises and CPR Cayey shall have the right, at its election to pay
the disputed amount to such contractor from the amounts deposited with the Title
Company and thereafter commence legal proceedings to recover such sums from such
contractor. In the event that CPR Cayey shall have completed the Cayey Outparcel
Space by the Closing Date, then CPR Cayey shall deliver to Purchaser at Closing
the applicable Construction Documents relating to the completion of the Cayey
Outparcel Space. The provisions of this Section 5.10 shall survive the Closing.
5.11 Escorial Construction. CPR Escorial has commenced, and shall have the
right and obligation (subject to Force Majeure) to continue, construction of the
Escorial Outparcel Space. In connection therewith, CPR Escorial has entered into
the contracts described in Exhibit 5.11.1 annexed hereto (the "Escorial
Construction Contracts"). The Escorial Outparcel Space shall be built
substantially in accordance with the plans and specifications described in
Exhibit 5.11.1 ("Escorial Plans") and the budget annexed hereto as Exhibit
5.11.2. CPR Escorial shall not modify the Escorial Construction Contracts or the
Escorial Plans without the prior written consent of Purchaser, which consent
shall not be unreasonably withheld, conditioned or delayed. In the event that
Purchaser's consent is required to any of the foregoing, Purchaser will be
deemed to have approved any such action if Purchaser fails to respond to any
request for consent within five (5) business days after receipt of such request
for consent. In the event that CPR Escorial shall not have completed the
Escorial Outparcel Space by the Closing Date, then at Closing, (a) the Purchase
Price shall be reduced by an amount (the "Escorial Construction Adjustment")
equal to the sum of the outstanding amount necessary to
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CPR PROPERTY
complete the Escorial Outparcel Space including any unpaid amounts due under the
Escorial Construction Contracts (provided, if CPR Escorial is disputing any such
unpaid amounts with the contractors, CPR Escorial shall have the right to
deposit such disputed amounts with the Title Company pending resolution of such
dispute in lieu of reducing the Purchase Price); (b) CPR Escorial shall assign
the Escorial Construction Contracts and Escorial Plans to Purchaser, (c) CPR
Escorial shall deliver to Purchaser the applicable Construction Documents
relating to the construction of the Escorial Outparcel Space, and (d) Purchaser
shall assume all of CPR Escorial's rights and obligations under the Escorial
Construction Contracts and Escorial Plans. Purchaser shall indemnify, defend and
hold harmless Sellers of, from and against any and all loss, cost, expense
(including reasonable attorney's fees), liability, damages, actions, causes of
action, demands or claims with respect to Purchaser's failure to perform any of
such obligations so assumed by Purchaser. CPR Escorial shall indemnify, defend
and hold harmless Purchaser of, from and against any and all loss, cost, expense
(including reasonable attorney's fees), liability, damages, actions, causes of
action, demands or claims with respect to CPR Escorial's failure to pay to
contractors any amounts CPR Escorial is disputing; provided that Purchaser shall
give notice to CPR Escorial within three (3) business days after any event for
which Purchaser is entitled to indemnification under this Section arises and CPR
Escorial shall have the right, at its election to pay the disputed amount to
such contractor from the amounts deposited with the Title Company and thereafter
commence legal proceedings to recover such sums from such contractor. In the
event that CPR Escorial shall have completed the Escorial Outparcel Space by the
Closing Date, then CPR Escorial shall deliver to Purchaser at Closing the
applicable Construction Documents relating to the completion of the Escorial
Outparcel Space. The provisions of this Section 5.11 shall survive the Closing.
5.12 Del Sol Construction. CPR Del Sol has commenced, and shall have the
right and obligation (subject to Force Majeure) to continue, construction of the
Del Sol Parking Deck Work. In connection therewith, CPR Del Sol has entered into
the contracts described in Exhibit 5.12.1 annexed hereto (the "Del Sol
Construction Contracts"). The Del Sol Parking Deck Work shall be built
substantially in accordance with the plans and specifications described in
Exhibit 5.12.1 ("Del Sol Plans") and the budget annexed hereto as Exhibit
5.12.2. CPR Del Sol shall not modify the Del Sol Construction Contracts or the
Del Sol Plans without the prior written consent of Purchaser, which consent
shall not be unreasonably withheld, conditioned or delayed. In the event that
Purchaser's consent is required to any of the foregoing, Purchaser will be
deemed to have approved any such action if Purchaser fails to respond to any
request for consent within five (5) business days after receipt of such request
for consent. In the event that CPR Del Sol shall not have completed the Del Sol
Parking Deck Work by the Closing Date, then at Closing, (a) the Purchase Price
shall be reduced by an amount (the "Del Sol Parking Deck Adjustment") equal to
the sum of the outstanding amount necessary to complete the Del Sol Parking Deck
Work including any unpaid amounts due under the Del Sol Construction Contracts
(provided, if CPR Del Sol is disputing any such unpaid amounts with the
contractors, CPR Del Sol shall have the right to deposit such disputed amounts
with the Title Company pending resolution of such dispute in lieu of reducing
the Purchase Price); (b) CPR Del Sol shall assign the Del Sol Construction
Contracts and Del Sol Plans to Purchaser, (c) CPR Del Sol shall deliver to
Purchaser the applicable Construction Documents relating to the Del Sol Parking
Deck Work, and (d) Purchaser shall assume all of CPR Del Sol's rights and
obligations under the Del Sol Construction Contracts and Del Sol Plans.
Purchaser shall indemnify, defend and hold harmless Sellers of, from and against
any and all loss, cost, expense (including reasonable attorney's fees),
liability, damages, actions, causes of action, demands or claims with respect to
Purchaser's failure to perform any of such obligations so assumed by Purchaser.
CPR Del Sol shall indemnify, defend and hold harmless Purchaser of, from and
against any and all loss, cost,
PURCHASE AND SALE AGREEMENT - PAGE 27
CPR PROPERTY
expense (including reasonable attorney's fees), liability, damages, actions,
causes of action, demands or claims with respect to CPR Del Sol's to pay to
contractors any amounts CPR Del Sol is disputing; provided that Purchaser shall
give notice to CPR Del Sol within three (3) business days after any event for
which Purchaser is entitled to indemnification under this Section arises and CPR
Del Sol shall have the right, at its election to pay the disputed amount to such
contractor from the amounts deposited with the Title Company and thereafter
commence legal proceedings to recover such sums from such contractor. In the
event that CPR Del Sol shall have completed the Del Sol Parking Deck Work by the
Closing Date, then CPR Del Sol shall deliver to Purchaser at Closing the
applicable Construction Documents relating to the completion of the Del Sol
Parking Deck Work. The provisions of this Section 5.12 shall survive the
Closing.
5.13 Leasing Costs. Sellers shall pay all Leasing Costs due with respect
to Leases entered into prior to the Closing Date (other than leasing commissions
relating to renewal options that have not been exercised in writing prior to
Closing) and with respect to renewal options if such renewal options have been
exercised in writing and the term thereof has commenced prior to Closing.
5.14 Consents. Sellers shall, at Sellers' expense, use reasonable efforts
to obtain any consents required from Tenants, REA parties, parties to any
Service Contract and the issuer of any Permit or Warranty if such consents are
necessary to assign Leases, REAs, Service Contracts, Permits or Warranties.
5.15 Recording of Deed. On or before the Closing Date, CPR Del Sol have
submitted for recording, at CPR Del Sol's expense, a deed for the purposes of
recording the structure currently occupied by BB&B.
5.16 Books and Records. Sellers shall maintain the books and records
relating to the Property in accordance with the accounting principles currently
utilized by Sellers, consistently applied, and not change in any material manner
any of their methods, principles or practices of accounting currently in effect,
except as may be required by applicable Law or GAAP.
5.17 Security Deposits. From and after the Approval Date, Sellers shall
not apply any security deposits to delinquent rentals or other amounts owed by a
Tenant while a Tenant is in possession of the space under its Lease without
Purchaser's written consent.
5.18 Compliance with Documents. Sellers shall continue to comply in all
material respects with the terms and conditions of the Loan Documents, the
Leases, the REAs, the Service Contracts, the Warranties and the Permits.
5.19 Lease Terminations Upon Purchaser's Request. From and after the
Approval Date, in the event of any monetary default by a Tenant under any Lease,
Sellers shall, within five (5) business days after receipt of written request
from Purchaser, deliver (a) a notice of default to such Tenant if required
pursuant to such Lease and (b) a notice of termination of such Lease if such
Tenant has not cured such default within any applicable notice and cure period.
If such Tenant fails to vacate after the termination of such Lease, Sellers
shall, at Purchaser's expense, take such legal action to remove such Tenant from
occupancy as Purchaser may request in writing.
PURCHASE AND SALE AGREEMENT - PAGE 28
CPR PROPERTY
6. REPRESENTATIONS AND WARRANTIES.
6.1 by Seller. Each Seller represents and warrants to Purchaser (all of
which, as updated pursuant to Section 6.4, shall also be required to be true and
correct in all material respects on and as of the Closing Date) as follows:
6.1.1 Each Seller is duly organized and validly existing as a
limited partnership under the laws of the State of Delaware. Each Seller is
authorized to do business in the Commonwealth of Puerto Rico. The
representatives executing this Agreement on such Seller's behalf have been duly
authorized and are empowered to bind such Seller to this Agreement. This
Agreement is, and as of the Closing each other agreement or instrument
contemplated hereby to which such Seller will be a party will have been, duly
authorized, executed and delivered on such Seller's behalf, and be the legal,
valid and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement thereof or relating to creditors' rights generally and
subject to the availability of equitable remedies and the effect of general
principles of equity. The execution and performance of this Agreement by each
Seller will not violate any material term of such Seller's limited partnership
agreement.
6.1.2 Subject to Lender's Consent, neither the execution of this
Agreement, nor the performance of this Agreement will result in any breach of,
or constitute any default under, or result in the imposition of any lien or
encumbrance under any agreement to which any Seller is a party.
6.1.3 There is no existing or, to Sellers' knowledge, threatened
litigation against any Seller, which, if adversely determined, could have a
material adverse effect on such Person's ability to consummate the transactions
contemplated hereby;
6.1.4 To the best of Sellers' knowledge, except as set forth in the
Environmental Reports, neither Sellers nor Manager have received any written
notice of violation of any Environmental Laws;
6.1.5 Except as set forth in Section 13.2, neither Sellers nor
Manager has received written notice from any Governmental Entity regarding any
change to the zoning classification of any Project, any condemnation proceedings
relating to any Project or proceedings to widen or realign any street or highway
adjacent to any Project.
6.1.6 The list of Service Contracts set forth in Exhibit 4.3 is
true, correct and complete as of the Effective Date. No written notice of
default which remains uncured has been given or received by a Seller or Manager
with respect to the Service Contracts. Neither the Sellers nor Manager have
received written notice of any claim asserted against any Seller with respect to
the Service Contracts.
6.1.7 Exhibit 1.1.59 sets forth a true, correct and complete list of
all Leases as of the Effective Date. Sellers have delivered true, correct and
complete copies of the Leases set forth on Exhibit 1.1.59 to Purchaser. As of
the Effective Date, there are no leases or occupancy agreements in effect at the
Projects other than the Leases set forth in Exhibit 1.1.59. None of the Leases
violates any exclusive rights granted to any other tenant or any prohibitions
contained in any other Lease. As of the Closing Date, no Leases shall exist at
the Property
PURCHASE AND SALE AGREEMENT - PAGE 29
CPR PROPERTY
other than the Leases set forth in Exhibit 1.1.59 and leases executed pursuant
to Section 5.4. The foregoing does not constitute a representation or warranty
that all of the Leases set forth in Exhibit 1.1.59 will be in effect on the
Closing Date.
6.1.8 The list of the Loan Documents contained in Exhibit 1.1.67 is
true and complete. No written notice of default which remains uncured has been
received by a Seller with respect to the Loan Documents.
6.1.9 No Seller is a party to any employment agreements, collective
bargaining agreements, union contracts or similar agreements affecting the
Property by which Purchaser would be bound upon acquisition of the Property.
Sellers have no employees.
6.1.10 No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under federal or state bankruptcy laws is pending
against any Seller.
6.1.11 To Sellers' knowledge, the Rent Rolls are true, correct and
complete as of the date thereof.
6.1.12 No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state (including Puerto
Rico) or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the Property in
connection with the execution and delivery by Sellers of this Agreement and all
documents contemplated hereunder or the consummation by Sellers of the
transactions contemplated hereunder or thereunder.
6.1.13 Exhibit 6.1.4 is a true, correct and complete list of all
Security Deposits made by each of the tenants under the Leases which have not
been applied as of September 30, 2004. Except as set forth in Exhibit 6.1.4,
neither the Manager nor any Seller has received any advance payment of base rent
(other than for the current month) on account of any of the Leases.
6.1.14 Except as set forth in Exhibit 6.1.15, no written notice of
default which remains uncured has been given or received by a Seller or Manager
with respect to the Leases. Except as set forth in Exhibit 6.1.15, neither the
Sellers nor Manager have received written notice of any claim asserted against
any Seller with respect to the Leases.
6.1.15 No written notice of default which remains uncured has been
given or received by a Seller or Manager with respect to the REAs. Neither the
Sellers nor Manager have received written notice of any claim asserted against
any Seller with respect to the REAs.
6.1.16 Exhibit 6.1.17 sets forth a correct and complete list of all
Tenants listed on the Rent Roll for which any Seller or Manager has received
written notice of any termination or cancellation as of the Effective Date.
6.1.17 Sellers are not lessees under any ground lease at the
Property.
6.1.18 Except as set forth in Article 13, no Person has been granted
an option to purchase any of the Property or has a right of first refusal (or
right of first offer) to purchase any
PURCHASE AND SALE AGREEMENT - PAGE 30
CPR PROPERTY
of the Property. Except as set forth in Article 13, no Person has the right to
require any Seller pursuant to any Lease or other agreement being assigned and
assumed by Purchaser (or its Permitted Assignee) to purchase or sell any
property
6.1.19 The amount of all Lender Reserves held by Lender or Servicer
as of September 30, 2004 is set forth on Exhibit 3.7.
6.1.20 No written notice of default which remains uncured has been
given or received by a Seller or Manager with respect to the Permits. No written
notice of violation of any laws applicable to any Project which remains uncured
has been received by a Seller or Manager.
6.1.21 Sellers and, to the best of Sellers' knowledge, after having
made diligent inquiry, any beneficial owner of twenty percent (20%) or more of
any Seller: (a) is not currently identified on the OFAC List, and (ii) is not a
Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States.
6.1.22 Exhibit 6.1.21 contains a true, correct and complete list of
all casualty commercial liability and environmental insurance policies
maintained by Sellers with respect to the Projects as of the date of this
Agreement. To Sellers' knowledge, these policies are in full force and effect as
of the date of this Agreement.
6.2 By Purchaser. Purchaser represents and warrants to Sellers (all of
which shall also be required to be true and correct in all material respects on
and as of the Closing Date) as follows:
6.2.1 Purchaser is a corporation, validly existing and in good
standing under the laws of the State of Ohio, is authorized (or will be
authorized at Closing) to do business in the Commonwealth of Puerto Rico, has
duly authorized the execution and performance of this Agreement, and such
execution and performance will not violate any material term of its
organizational documents.
6.2.2 No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or arrangement
or other action under federal or state bankruptcy laws is pending against or
contemplated by Purchaser.
6.2.3 Purchaser acknowledges that, by the Approval Date, Purchaser
will have had sufficient opportunity to inspect the Property fully and
completely at its expense in order to ascertain to its satisfaction the extent
to which the Property complies with applicable zoning, building, environmental,
health and safety and all other laws, codes and regulations. Purchaser further
acknowledges that, by the Approval Date, Purchaser will have had sufficient
opportunity to review the Leases, Service Contracts, REAs, Loan Documents,
expenses and other matters relating to the Property in order to determine, based
upon its own investigations, inspections, tests and studies, whether to purchase
the Property and to assume Seller's obligations under the Leases, Service
Contracts, REAs and Loan Documents and otherwise with respect to the Property.
PURCHASE AND SALE AGREEMENT - PAGE 31
CPR PROPERTY
6.2.4 Purchaser and, to the best of Purchaser's knowledge, after
having made diligent inquiry, any beneficial owner of twenty percent (20%) or
more of Purchaser: (a) is not currently identified on the OFAC List, and (ii) is
not a Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States.
Purchaser's representations and warranties pursuant to this Section 6.2 shall
survive the Closing for the Survival Period.
6.3 Mutual. Each Seller and Purchaser represents to the other that it has
had no dealings, negotiations, or consultations with any broker, representative,
employee, agent or other intermediary in connection with the Agreement or the
sale of the Property, except for Transwestern Commercial Services ("Broker"),
who will be paid by Purchaser pursuant to the terms of a separate agreement
between Purchaser and Broker. Purchaser shall indemnify, defend and hold Sellers
harmless from any claims for commission or other compensation from Broker.
Sellers and Purchaser agree that each will indemnify, defend and hold the other
harmless from the claims of any other broker(s), representative(s), employee(s),
agent(s) or other intermediary(ies) claiming to have represented Sellers or
Purchaser, respectively, or otherwise to be entitled to compensation in
connection with this Agreement or in connection with the sale of the Property.
The terms and provisions of this paragraph shall survive Closing hereunder.
6.4 Modifications. Anything to the contrary in this Agreement
notwithstanding, each Seller's representations and warranties made in this
Agreement are now, and shall hereafter continue to be, modified, qualified and
limited in all cases by the Exhibits attached to this Agreement, and by all
other provisions of this Agreement, and by all updates hereafter delivered to
Purchaser in accordance with this Agreement. Each Seller shall, within ten (10)
business days after receiving notice or obtaining knowledge that any of its
representations or warranties is or has become untrue, deliver written notice
thereof to Purchaser, updating such representation or warranty. If, prior to
Closing, Purchaser discovers that any representation, warranty or covenant of
any Seller contained in this Agreement is or, as of the Closing Date, will be
untrue in any material respect ("Representation Failure"), then Purchaser shall
promptly give Sellers written notice of its objection thereto and Sellers shall
update their representations and warranties to correct such Representation
Failure. In the event that such updates disclose facts or circumstances which
result in an Aggregate Income Decrease of $1,000,000 or less, Purchaser's sole
remedy shall be an adjustment to the Purchase Price in an amount equal to such
Aggregate Income Decrease divided by the applicable Cap Rate(s). If such updates
disclose facts or circumstances which result in an Aggregate Income Decrease of
more than $1,000,000, Sellers shall deliver written notice ("Update Election
Notice") to Purchaser setting forth whether or not Sellers elect to (x) cure
such facts or circumstances (if curable) to Purchaser's reasonable satisfaction
prior to Closing (provided, if such cure is not complete by Closing, Sellers may
elect to postpone the Closing for up to thirty (30) days in order to provide
Sellers with an opportunity to complete such cure), or (y) reduce the Purchase
Price by an amount equal to such Aggregate Income Decrease divided by the
applicable Cap Rate(s). If Sellers elect to cure or reduce the Purchase Price,
Purchaser shall not have the right to terminate this Agreement. If Sellers elect
not to cure or reduce the Purchase Price, Purchaser's sole right shall be to
elect within five (5) business days after receipt of the Update Election Notice
to either (a) terminate this Agreement (other than Surviving Obligations) and to
receive a refund of the Deposit, or (b) close without reduction in the Purchase
Price (other than an
PURCHASE AND SALE AGREEMENT - PAGE 32
CPR PROPERTY
adjustment to the Purchase Price in an amount equal to $1,000,000 divided by the
applicable Cap Rate(s)). If such updates disclose facts or circumstances which
result in any additional payment obligations Purchaser would be required to
assume at Closing, Sellers shall deliver written notice ("Cost Election Notice")
to Purchaser setting forth that Sellers elect to (x) cure such facts or
circumstances (if curable) to Purchaser's reasonable satisfaction prior to
Closing (provided, if such cure is not complete by Closing, Sellers may elect to
postpone the Closing for up to thirty (30) days in order to provide Sellers with
an opportunity to complete such cure),, (y) reduce the Purchase Price by an
amount equal to such additional payment obligations, or (z) if Sellers are
disputing such additional payment obligations, deposit an amount equal to such
additional payment obligations in escrow with the Title Company and indemnify
Purchaser with respect thereto. Purchaser shall not have the right to terminate
this Agreement as a result of such additional payment obligations. In the event
that Sellers and Purchaser are unable to agree upon the amount of the Aggregate
Income Decrease or the amount of additional payment obligations resulting from
the information disclosed in such updates, the dispute shall be submitted to
arbitration pursuant to Section 14.18 hereof and the determination of the
arbitrator shall be binding on Sellers and Purchaser.
7. COSTS AND PRORATIONS.
7.1 Sellers' Costs. Sellers shall pay the following costs of closing this
transaction:
7.1.1 The fees and disbursements of Seller's counsel;
7.1.2 The cost of all notarial tariffs and internal revenue stamps
required for the original of each Deed of Purchase and Sale to Purchaser (the
notary public shall be selected by Seller);
7.1.3 Fifty percent (50%) of the cost of (a) the Title Policies in
the amount of the Purchase Price, (b) any endorsements to the Title Policies
which are requested by Purchaser and which were obtained by Sellers in
connection with their acquisition of the Property, and (c) the Updated Surveys;
7.1.4 Fifty percent (50%) of any fees and charges imposed by the
Lender or Servicer with respect to Lender's Consent, including legal fees and
disbursements of Lender and/or Servicer;
7.1.5 All costs of obtaining the estoppels required under Sections
10.1.2 and 10.1.3;
7.1.6 Fifty percent (50%) of any and all escrow fees;
7.1.7 Any other expense(s) incurred by Sellers or their
representative(s) in closing this transaction.
7.2 Purchaser's Costs. Purchaser shall pay the following costs of closing
this transaction:
7.2.1 The fees and disbursements of its counsel, inspecting
architect and engineer and any other consultants engaged by Purchaser, if any;
PURCHASE AND SALE AGREEMENT - PAGE 33
CPR PROPERTY
7.2.2 The cost of all internal revenue stamps required for the first
certified copy of each Deed of Purchase and Sale to Purchaser and all stamps and
vouchers and all other costs relating to the recordation of the certified copy
of each such Deed of Purchase and Sale in the Registry of Property;
7.2.3 Fifty percent (50%) of the cost of (a) the Title Policies in
the amount of the Purchase Price, (b) any endorsements to the Title Policies
which are requested by Purchaser and which were obtained by Sellers in
connection with their acquisition of the Property, and (c) the Updated Surveys;
7.2.4 Fifty percent (50%) of any fees and charges imposed by the
Lender or Servicer with respect to Lender's Consent, including legal fees of
Lender and/or Servicer;
7.2.5 Fifty percent (50%) of any and all escrow fees;
7.2.6 All costs of any endorsements to the Title Policies which are
requested by Purchaser and which were not obtained by Sellers in connection with
their acquisition of the Property;
7.2.7 All commission or other compensation due to Broker; and
7.2.8 Any other expense(s) incurred by Purchaser or its
representative(s) in inspecting or evaluating the Property or closing this
transaction.
7.3 Prorations of Income and Expenses.
7.3.1 Sellers and Purchaser agree to adjust the following items:
a) All rents (other than Additional Rents (as hereinafter
defined) and Percentage Rent) billed for the month in which the Closing Date
occurs will be prorated as of 11:59 p.m. on the day immediately preceding the
Closing Date (the "Apportionment Date") based on the actual number of days in
the month during which the applicable Closing Date occurs and Sellers will be
entitled to such rent for the period on and before the Apportionment Date, and
Purchaser will be entitled to such rent for the period after the Apportionment
Date. All rents payable by each Tenant whose Lease commences on or after the
Closing shall belong entirely to Purchaser, including any pre-paid rentals
received by Sellers. Should rent be received subsequent to Closing by Purchaser
which belongs to Sellers, it will be promptly remitted to Sellers, and should
rent be received subsequent to Closing by Sellers which belongs to Purchaser, it
will promptly be remitted to Purchaser;
b) An amount equal to all cash Security Deposits, together
with any interest required to be paid thereon, will be credited to Purchaser and
Sellers shall have the right to retain such cash Security Deposits;
c) Personal property taxes, water and sewer charges, utility
charges (utility charges will be prorated based on the last reading of meters
prior to Closing performed at Seller's request, if possible) and the value of
fuel stored at the Property will be prorated at the Sellers' most recent cost
(on the basis of a reading made within 10 days prior to the Closing by the
supplier but subject to Section 7.3.2) as of the Apportionment Date;
PURCHASE AND SALE AGREEMENT - PAGE 34
CPR PROPERTY
d) Amounts owed or paid by the Sellers under the Service
Contracts and Permits assumed by Purchaser will be prorated as of the
Apportionment Date;
e) Sellers shall be responsible for (i) leasing commissions
and tenant improvement allowances and costs (collectively, "Leasing Costs") for
each lease entered into prior to the Closing Date, (ii)with respect to any
Surface Rights Space, Cayey Outparcel Space and/or Escorial Outparcel Space
which is not leased at Closing, for leasing commissions, not to exceed the
amounts set forth in Exhibit 7.3.1, with respect to the first lease of each
portion of such Surface Rights Space, Cayey Outparcel Space and/or Escorial
Outparcel Space executed during the Income Support Term, (iii) the Best Buy
Costs, and (iv) Leasing Costs for each renewal option which has been exercised
in writing prior to Closing if such renewal term commences before Closing.
Purchaser shall be responsible for Leasing Costs for any lease renewals, the
term of which commences on or after the Closing Date and for all Leasing Costs
(other than for leases of Surface Rights Space, Cayey Outparcel Space and/or
Escorial Outparcel Space as specifically set forth in subclauses (ii) and (iii)
of this Section 7.3.l(e)) for leases entered into after the Closing Date; and
f) Sellers shall be responsible for all interest on the
Existing Financing attributable to the period prior to the Closing Date, and
Purchaser shall be responsible for all interest on the Existing Financing
attributable to periods from and after the Closing Date.
7.3.2 Prorations shall be paid at Closing by Purchaser to Sellers
(if the prorations result in a net credit to Sellers) or by Sellers to Purchaser
(if the prorations result in a net credit to Purchaser) by increasing or
reducing the cash to be delivered by Purchaser in payment of the Purchase Price
at the Closing. If the actual amounts of the items prorated are not known as of
the Closing Date, the prorations will be made at Closing on the basis of the
best evidence then available; thereafter, when actual figures are received,
re-prorations will be made on the basis of the actual figures, and a final cash
settlement will be made between Sellers and Purchaser.
7.3.3 If on the Closing Date, any tenant under a Lease is in arrears
in the payment of rent, then any amount received by Sellers or Purchaser from
any such tenant after the Closing Date (net of reasonable collection costs)
shall be applied in the following order: (1) first, to Sellers for the month in
which the Closing occurred, (2) then to Purchaser for any period after the month
in which the Closing occurred, and (3)then, to Sellers for any period prior to
the month in which the Closing occurred. However, anything in this Agreement to
the contrary notwithstanding, Purchaser and Sellers shall be bound by any
written instructions given or notations made by any such tenant(s) as to what
period(s) they are paying. If any rents received by Sellers or Purchaser after
the Closing Date are payable to the other party by reason of the foregoing, then
the same (net of reasonable out-of-pocket collection costs) shall be promptly
paid to the other party.
7.3.4 Pursuant to the Leases, each Seller bills tenants for
Additional Rents on a calendar year basis, with a reconciliation of amounts
billed and actual amounts incurred made generally within 120 days after the end
of such calendar year. At the Closing, Sellers shall deliver to Purchaser a list
of Additional Rent, however characterized, under each Lease, including without
limitation, common area maintenance charges, real estate taxes, electrical
charges, utility costs and other operating expense or escalation charges
(collectively, "Additional Rents") billed to tenants for the calendar year in
which the Closing occurs (both on a monthly
PURCHASE AND SALE AGREEMENT - PAGE 35
CPR PROPERTY
basis and in the aggregate), the basis on which the monthly amounts are being
billed and the amounts incurred by the Sellers on account of the components
thereof for such calendar year. Upon the reconciliation by Purchaser of the
amounts billed to tenants, and the amounts actually incurred for such calendar
year, Sellers and Purchaser shall be liable for overpayments of Additional Rent
("Lease Overpayments"), and shall be entitled to payments from tenants ("Lease
Reconciliation Payments"), as the case may be, on a pro-rata basis based upon
each party's period of ownership during such calendar year. Purchaser shall
promptly remit to Sellers Sellers' pro-rata share of Reconciliation Payments
received by Purchaser. Sellers shall promptly remit to Purchaser Sellers'
pro-rata share of Overpayments. In addition, Purchaser agrees that if the
reconciliations by the Sellers of Additional Rents for the calendar year
immediately preceding the year in which the Closing occurs ("Prior Year") have
not been completed and billed to tenants on or before the Closing Date, then
upon delivery by Sellers to Purchaser of bills to the tenants for any adjustment
("Prior Year Adjustment") to the Additional Rents for the Prior Year, Purchaser
shall submit such bills to the Tenants. Purchaser shall promptly remit to
Sellers any Prior Year Adjustment payments received by Purchaser from Tenants.
In the event any Tenant pays Additional Rent on an annual basis (rather than
monthly estimated payments), any Additional Rent collected by Purchaser from
such Tenant pertaining to the calendar year in which the Closing occurs shall be
prorated on a per diem basis as and when collected. Any amounts relating to
Sellers' period of ownership shall be paid to Sellers promptly after receipt by
Purchaser.
7.3.5 Percentage Rent, if any, payable under each Lease shall be
prorated with respect to the full lease year or other applicable full period
provided for under the Lease in which the Closing occurs on a per diem basis as
and when collected. The proration of Percentage Rent, if any, shall be based on
aggregate sales for the full lease year or other applicable full period under
the Lease, without attributing tenant's specific sales amount to the period
before the Closing Date or the period from and after the Closing Date. Any
Percentage Rent collected by Purchaser (including any Percentage Rent which is
delinquent) and pertaining to (i) an entire lease year or accounting period of a
tenant under a Lease which ends on a date prior to the date of Closing, and (ii)
that portion of a lease year or accounting period of such tenant covering a
period prior to the date of Closing where such lease year or accounting period
begins prior to the date of Closing and ends thereafter, shall in both cases be
paid to Sellers promptly after receipt by Purchaser. In the event that any
Tenants have prepaid estimated Percentage Rent, such prepaid Percentage Rent
shall be credited to Purchaser at Closing, subject to the prorations required by
the preceding paragraph following the end of the full lease year or other
applicable full period;
7.3.6 Common area maintenance expenses and charges ("REA CAM")
payable by or to the Sellers under or in connection with the REA, if any, shall
be prorated for the calendar year in which the Closing Date occurs. Sellers
shall be responsible for all such REA CAM incurred prior to Closing, and
Purchaser shall be responsible for the same on and subsequent to the Closing
Date. At the Closing, Sellers shall deliver to Purchaser a list of such REA CAM
billed under each REA for the calendar year in which the Closing occurs (both on
a monthly basis and in the aggregate), the basis on which the monthly amounts
are being billed and the amounts incurred by the Sellers on account of the
components thereof for such calendar year. Upon the reconciliation by Purchaser
of the amounts billed to REA Parties, and the amounts actually incurred for such
calendar year, Sellers and Purchaser shall be liable for overpayments of REA CAM
("REA Overpayments"), and shall be entitled to payments from REA Parties ("REA
Reconciliation Payments"), as the case may be, on a pro-rata basis based upon
each party's period of ownership during such calendar year. Purchaser shall
promptly remit to
PURCHASE AND SALE AGREEMENT - PAGE 36
CPR PROPERTY
Sellers Sellers' pro-rata share of REA Reconciliation Payments received by
Purchaser. Sellers shall promptly pay to Purchaser Sellers' pro-rata share of
REA Overpayments. In addition, Purchaser agrees that if the reconciliations by
Sellers of REA CAM for the Prior Year have not been completed and billed to REA
Parties tenants on or before the Closing Date, then upon delivery by Sellers to
Purchaser of bills for any adjustment to such REA CAM ("Prior Year REA
Adjustment") for the Prior Year, Purchaser shall submit such bills to the REA
Parties. Purchaser shall promptly remit to Sellers any Prior Year REA Adjustment
payments received by Purchaser.
7.3.7 Purchaser shall use reasonable efforts using its standard
collection practices during the six (6) month period immediately following
Closing to collect and promptly remit to the applicable Seller rents or other
amounts due from Tenants and REA Parties for the period prior to Closing with
respect to the Project owned by it; provided that Purchaser shall not be
required to pursue legal action to enforce collection of any such amounts. If
Purchaser collects any such amounts, Purchaser shall promptly pay such amounts
(after deducting any out-of-pocket costs incurred by Purchaser in collecting
same) to Sellers. If Purchaser uses reasonable efforts to collect such past-due
amounts for the first six (6)months after Closing but is unsuccessful, each
Seller shall have the right to commence legal action to collect delinquent rents
or REA CAM thereafter, but in no event shall any Seller have the right to evict
any Tenant or terminate any Tenant's lease or any REA. Sellers agree that any
legal action by Sellers to collect such delinquent amounts shall be commenced
within three (3)months after the end of the foregoing six (6) month period. In
the event that Sellers commence legal action against a Tenant for such
delinquent amounts and such Tenant names Purchaser as a thirty-party defendant
or otherwise causes Purchaser to be named in such legal action, Sellers shall
defend Purchaser (except to the extent that any claims by such Tenant against
Purchaser relate to any period after the Closing). In the event that Sellers
commence legal action against a Tenant for such delinquent amounts, such Tenant
withholds rent from Purchaser because of such legal action and such legal action
is determined in favor of such Tenant, Sellers shall reimburse Purchaser for the
rents withheld by such Tenant, to the extent such Tenant does not pay such rents
to Purchaser within one (1) month after such determination. Notwithstanding the
foregoing, if a Tenant against whom Sellers have commenced legal action was in
arrears on the date such action was commenced, such Tenant shall not be deemed
to be withholding rent from Purchaser because of such legal action, whether or
not such Tenant fails to pay rent to Purchaser after the commencement of such
action. The provisions of Section 7.3 shall survive the Closing.
7.3.8 After the Closing Date, within seven (7) days following
Purchaser's (or the Permitted Assignee's) written request, Sellers shall use
commercially reasonable efforts to deliver (or cause to be delivered) to
Purchaser (or its Permitted Assignee) all financial and other data relating to
the operating expenses and/or the Tenant reconciliations specified in the
request (including, but not limited to ▇▇▇▇▇▇▇▇, records and back-up for any
period prior to Closing, together with any spreadsheets or other documentation
showing the method of calculation of the recoveries) so that Purchaser (or its
Permitted Assignee) can reconcile some or all of the operating expenses for the
applicable Tenant or Tenants. After the Closing Date, within seven (7) days
following Seller's written request, Purchaser shall use commercially reasonable
efforts to deliver (or cause to be delivered) to Seller all financial and other
data relating to the operating expenses and/or the Tenant reconciliations
specified in the request (including, but not limited to ▇▇▇▇▇▇▇▇, records and
back-up for that portion of 2005 after Closing, together with any spreadsheets
or other documentation showing the method of calculation of the recoveries) so
that Seller can reconcile some or all of the operating expenses for the
applicable Tenant or Tenants.
PURCHASE AND SALE AGREEMENT - PAGE 37
CPR PROPERTY
7.4 Proration of Taxes.
7.4.1 General real estate taxes and special assessments relating to
the Property payable during the year in which Closing occurs shall be prorated
as of the Closing Date. If Closing shall occur before the actual taxes and
special assessments payable during such year are known, the apportionment of
taxes shall be upon the basis of taxes for the Property payable during the
immediately preceding year, provided that, if the taxes and special assessments
payable during the year in which Closing occurs are thereafter determined to be
more or less than the taxes payable during the preceding year (after any appeal
of the assessed valuation thereof is concluded), Sellers and Purchaser promptly
shall adjust the proration of such taxes and special assessments, and Sellers or
Purchaser, as the case may be, shall pay to the other any amount required as a
result of such adjustment and this covenant shall not merge with the deed
delivered hereunder but shall survive the Closing.
7.4.2 The Tenants listed on Exhibits 7.4.2(A) and (B) pay real
estate and/or personal property taxes directly to the appropriate taxing
authority. In the event that any of such Tenants listed on Exhibit 7.4.2(A) has
not paid such taxes as of the Closing Date, then such Tenant's taxes shall be
prorated as of the Closing Date at the rate set forth in the applicable tax
certificate (without taking into account any discount that may be applicable).
In the event that any of such Tenants listed on Exhibit 7.4.2(B) is in default
under the terms of its Lease and has not paid such taxes as of the Closing Date,
then such Tenant's taxes shall be prorated as of the Closing Date at the rate
set forth in the applicable tax certificate (without taking into account any
discount that may be applicable). Within ten (10) days after delivery by Sellers
to Purchaser of tax certificates showing that any of the foregoing Tenants paid
such taxes after Closing, Purchaser shall refund to Sellers the prorated portion
of such Tenant's taxes for the period commencing January 1, 2005 and ending on
the Closing Date.
7.5 Prorations in General. Any other costs or charges of closing this
transaction not specifically mentioned in this Agreement shall be paid and
adjusted in accordance with local custom in the State of New York.
7.6 Corrections. In the event any prorations, apportionments or
computations shall prove to be incorrect for any reason, then either party shall
be entitled to an adjustment to correct the same, provided that it makes written
demand on the party from which it is entitled to such adjustment within one (1)
year after the Closing Date.
7.7 Draft Statements. Sellers shall deliver to Purchaser a draft of a
settlement statement setting forth the proposed adjustments to the Purchase
Price and prorations of income and expenses at least fifteen (15) business days
prior to Closing.
7.8 Purpose and Intent. Except as expressly provided herein, the purpose
and intent as to the provisions of prorations and apportionments set forth in
this Section 7 and elsewhere in this Agreement is that Sellers shall bear all
expenses of ownership and operation of the Property and shall receive all income
therefrom accruing through 11:59 p.m. of the day preceding the Closing Date and
Purchaser shall bear all such expenses and receive all such income accruing
thereafter.
PURCHASE AND SALE AGREEMENT - PAGE 38
CPR PROPERTY
8. DAMAGE, DESTRUCTION OR CONDEMNATION.
8.1 Material Event. If, prior to Closing, (a) the number of parking spaces
on any Project are reduced by casualty or eminent domain below the number of
parking space required to comply with applicable laws or the terms of any Lease
or REA, (b) the Improvements located on any Project are damaged and the cost of
repair exceeds $10,000,000 (as mutually determined by Sellers and Purchaser),
(c) more than five percent (5%) of the aggregate rentable square feet of the
Improvements on the Property are taken under power of eminent domain, or (d) all
access to any Project is destroyed or taken under power of eminent domain and
the cost to repair or replace such access exceeds $10,000,000 (as mutually
determined by Sellers and Purchaser) (each, a "Material Event"), Purchaser may
elect to terminate this Agreement prior to the Closing Date by giving written
notice of its election to Sellers within thirty (30) days after receiving notice
from Sellers of such destruction or taking, which notice from Sellers shall
contain such information as is reasonably necessary for Purchaser to make its
election. In the event that Sellers' notice of the Material Event is received by
Purchaser less than thirty (30) days prior to the scheduled Closing Date,
Purchaser shall have the right to adjourn the Closing to the extent necessary
for Purchaser to have a period of thirty (30) days after receiving Sellers'
notice to determine whether Purchaser will elect to terminate this Agreement. If
Purchaser does not give such written notice within such thirty (30) day period,
(x) this transaction shall be consummated on the Closing Date without reduction
of the Purchase Price, and (y) the applicable Seller will assign to Purchaser
the physical damage proceeds of any insurance policy(ies) payable to such Seller
or such Seller's portion of any condemnation award (but such Seller shall retain
insurance recoveries or condemnation award reimbursing such Seller for its
expenditures, if any, in making repairs or replacements of any such damage,
destruction or taking), and, if an insured casualty, pay to Purchaser the amount
of any deductible.
8.2 Immaterial Event. If, prior to Closing, any Project is subject to a
casualty or a condemnation event that is not a Material Event, Purchaser shall
close this transaction on the Closing Date without reduction of the Purchase
Price, and the Seller that owns the affected Project will assign to Purchaser
the physical damage proceeds of any insurance policies payable to such Seller,
or such Seller's rights to any portion of any condemnation award (but such
Seller shall retain insurance recoveries or condemnation aware reimbursing such
Seller for its expenditures, if any, in making repairs or replacements of any
such damage, destruction or taking), and, if an insured casualty, pay to
Purchaser the amount of any deductible but not to exceed the amount of the loss.
8.3 Dispute. In the event that Sellers and Purchaser are unable to agree
upon a determination of whether any casualty or condemnation is a Material
Event, Sellers and/or Purchaser shall submit their dispute to arbitration
pursuant to Section 14.18 hereof and the determination of the arbitrator shall
be binding on Sellers and Purchaser.
9. NOTICES.
Any notice required or permitted to be given hereunder shall be deemed to
be given (a) when hand delivered, or (b) one (1) business day after pickup by
Airborne, Federal Express, or similar overnight express service, in each case
addressed to the parties at their respective addresses referenced below:
PURCHASE AND SALE AGREEMENT - PAGE 39
CPR PROPERTY
If to Seller: CPR Del Sol LP, S.E.
CPR Escorial LP, S.E.
CPR Cayey LP, S.E.
CPR Palma Real LP, S.E.
CPR lsabela LP, S.E.
CPR San German LP, S.E.
1120 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to: Kronish ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Purchaser: Developers Diversified Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CEO and Chairman of the Board
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President and Secretary
Developers Diversified Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Title Company: Commonwealth Land Title Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
or in each case to such other address as either party may from time to time
designate by giving notice in writing to the other party. Effective notice will
be deemed given only as provided above.
10. CONDITIONS TO CLOSING.
10.1 Purchaser's Conditions. Purchaser's obligation to purchase the
Property at Closing and to pay the Purchase Price is expressly conditioned upon
the following (unless waived or deemed waived pursuant to the provisions of this
Agreement, or otherwise in a writing signed by Purchaser).
10.1.1 Each Seller's warranties and representations set forth in
Article 6 herein, as updated pursuant to Section 6.4, shall be true and correct
in all material respects as of the date of Closing. Sellers shall have performed
in all material respects all covenants required to be performed by it under this
Agreement at or prior to the Closing Date and Sellers shall not have breached in
any material respect any covenants that prevent Purchaser from fulfilling its
obligations under this Agreement. Seller shall have executed and delivered all
documents and instruments required to be executed and delivered by it under this
Agreement at the Closing.
PURCHASE AND SALE AGREEMENT - PAGE 40
CPR PROPERTY
10.1.2 At Closing, Sellers shall deliver estoppel certificates in
all material respects in the form of Exhibit 10.1.2, dated no earlier than the
Effective Date, from all Required Tenants and from an aggregate of Tenants
representing not less than seventy-five percent (75%) of the rentable square
feet with respect to each Project (exclusive of the Surface Rights Parcel, Cayey
Outparcel and Escorial Outparcel and occupants under temporary license and
concession agreements). Sellers shall use commercially reasonable efforts to
obtain estoppel certificates from all other Tenants ("Other Estoppels").
Notwithstanding the foregoing sentence, if any tenant estoppel certificate shall
contain or otherwise disclose a material substantive exception from the form of
"clean" estoppel certificate as provided in the form of Exhibit 10.1.2, the same
shall still be treated as the delivery of a tenant estoppel certificate for
purposes of this Section 10.1.2, provided that (i) if any such disclosure
evidences a material deviation from the matters set forth in Exhibit 1.1.61 or
from the information set forth in the Leases and such deviation is or results in
a specified or readily ascertainable dollar amount, such estoppel certificate
shall be deemed an update of Sellers' representations under Section 6.4 and
Sellers and Purchaser shall have the rights, remedies and obligations set forth
in Section 6.4 with respect thereto, or (ii) if any such disclosure evidences a
material deviation from the matters set forth in Exhibit 1.1.61 or from the
information set forth in the Leases and such deviation is not a specified or
readily ascertainable dollar amount, Purchaser shall be entitled to (a)
terminate this Agreement in its entirety and receive the Deposit, or (b) waive
the requirement and close without reduction in the Purchase Price. In the event
Sellers are unable to deliver one hundred percent (100%) of the Other Estoppels
(for this purpose, again excluding occupants under temporary license and
concession agreements), Sellers shall furnish Sellers' estoppels (each a "Seller
Estoppel Certificate") in the form of Exhibit 10.1.2, dated as of the Closing
Date. A Seller Estoppel Certificate shall be deemed a representation from
Sellers which shall survive Closing for the Survival Period; provided if after
Sellers deliver a Seller Estoppel Certificate on behalf of a tenant, the
applicable tenant delivers an estoppel certificate (and such estoppel
certificate does not state any materially different information from that set
forth in the Seller Estoppel Certificate), except as set forth in Section
14.14.4, the Seller Estoppel Certificate shall be of no further force and
effect. In the event Sellers are unable to comply with the preceding provisions
of this Section 10.1.2, Purchaser shall be entitled to (a) terminate this
Agreement in its entirety and receive the Deposit, or (b) waive the requirement
and close without reduction in the Purchase Price.
Anything to the contrary herein notwithstanding, Purchaser hereby
acknowledges that many tenants have their own forms of estoppel letter, and
delivery of such alternative forms shall satisfy the conditions of this Section
10.1.2 provided that the tenants using such alternative forms do not disclose
therein (a) the existence of unresolved material claims against a Seller (as
landlord) which shall survive Closing, or (b) matters materially inconsistent
with Seller's' representations set forth in this Agreement or in the Exhibits
attached hereto.
10.1.3 At Closing, Sellers shall deliver estoppel certificates in
all material respects in the form of Exhibit 10.1.3, dated no earlier than the
Approval Date, from each of the REA Parties, provided that if Sellers are unable
to obtain any such estoppel certificates from the REA Parties, Sellers shall
deliver estoppels from Sellers in the form of Exhibit 10.1.3, dated as of the
Closing Date. In the event Sellers are unable to comply with the preceding
provisions of this Section 10.1.3, Purchaser's remedies shall be limited to (a)
terminating this Agreement in its entirety and receiving the Deposit, or (b)
waiving the requirement and closing without reduction in the Purchase Price.
PURCHASE AND SALE AGREEMENT - PAGE 41
CPR PROPERTY
10.1.4 Subject only to payment of all premiums for same, the Title
Company shall be prepared to issue at Closing (or prepared to unconditionally
commit to issue at Closing, with no "gap" exception) its base title policies in
the required form subject only to the Permitted Exceptions.
10.1.5 Purchaser shall have obtained the written consent of Lender
to the transactions set forth herein ("Lender's Consent"). Promptly after the
date hereof, Sellers and Purchaser shall apply for Lender's Consent and, in
connection therewith, Purchaser shall furnish accurate and complete financial
and background information regarding Purchaser as requested by Lender or
Servicer. If Lender's Consent is not received on or before the Closing Date,
then Sellers or Purchaser shall have the right to adjourn the Closing for up to
ninety (90) days in order for Purchaser to obtain Lender's Consent. If Lender's
Consent is not received within such ninety (90) day period, either Sellers or
Purchaser may, upon ten (10) days' prior written notice, terminate this
Agreement (unless Lender's Consent is received within such ten (10) day period,
in which case, such termination shall be null and void).
10.1.6 No event of default shall exist and be continuing under the
Loan Documents.
10.1.7 On the Closing Date, if the Surface Rights Space and/or any
of the Cayey Outparcel Space and/or Escorial Outparcel Space is not subject to a
lease at Closing, and/or the average base rent payable per square foot under any
executed Cayey Outparcel Leases and Escorial Outparcel Leases is less than
$31.00 per square foot, the applicable Sellers shall enter into an agreement
with Purchaser (the "Income Support Agreement") in the form annexed hereto as
Exhibit 10.1.7.
10.1.8 At Closing, the applicable Sellers shall, to the extent
applicable, deposit into escrow with the Escrow Agent the aggregate Income
Support Payments payable under the Income Support Agreement and shall enter into
an agreement with Purchaser and Escrow Agent (the "Income Support Escrow
Agreement") substantially in the form annexed hereto as Exhibit 10.1.8.
10.1.9 Subject to Section 2.4, the closings under the CRV Agreement
and the MPR Agreement shall occur simultaneously with the Closing hereunder.
10.1.10 On or prior to the Closing Date, no Seller shall have (i)
applied for or consented to the appointment of a receiver, trustee or liquidator
for itself or any of its assets unless the same shall have been discharged (with
no right of appeal) prior to the Closing Date, and no such receiver, liquidator
or trustee shall have otherwise been appointed, unless same shall have been
discharged (with no right of appeal) prior to the Closing Date, (ii) been unable
to meet its debts as they became due or admitted in writing an inability to pay
its debts as they mature, (iii) made a general assignment for the benefit of
creditors, (iv) been adjudicated a bankrupt or insolvent, or had a voluntary or
involuntary petition for reorganization granted with respect to such Person, or
(v) filed a voluntary petition seeking reorganization or an arrangement with
creditors or taken advantage of any bankruptcy, reorganization, insolvency,
readjustment or debt, dissolution or liquidation law or statute, or filed an
answer admitting the material allegations of a petition filed against it in any
proceedings under any such law, or had any voluntary or involuntary petition
filed against it in any proceeding under any of the foregoing laws, in each
case, unless the same shall have been dismissed, canceled or terminated prior to
the Closing Date.
PURCHASE AND SALE AGREEMENT - PAGE 42
CPR PROPERTY
10.1.11 At Closing, Sellers shall have delivered the Management
Agreements executed by Manager.
10.2 Sellers' Conditions. Sellers' obligation to convey the Property at
Closing is expressly conditioned upon the following (unless waived or deemed
waived pursuant to the provisions of this Agreement, or otherwise in a writing
signed by Sellers):
10.2.1 Purchaser's warranties and representations set forth in
Article 6 herein shall be true and correct in all material respects as of the
date of Closing. Purchaser shall have performed in all material respects all
covenants required to be performed by it under this Agreement at or prior to the
applicable Closing Date and Purchaser shall not have breached in any material
respect any covenants that prevent Sellers from fulfilling their obligations
under this Agreement. Purchaser shall have executed and delivered all documents
and instruments required to be executed and delivered by it under this Agreement
at the Closing
10.2.2 Lender shall have given Lender's Consent.
10.2.3 At Closing, Purchaser shall have executed and delivered a
property management agreement with respect to each Project (collectively, the
"Management Agreements") in the form annexed hereto as Exhibit 10.2.4 between
Purchaser and PMI Retail Property Management Corp. ("Manager").
10.2.4 Subject to Section 2.4, the closings under the CPR Agreement
and the MPR Agreement shall occur simultaneously with the Closing hereunder.
10.2.5 At Closing, Purchaser shall have paid the balance of the
Purchase Price (as adjusted pursuant to the terms of this Agreement).
11. CLOSING AND ESCROW.
11.1 Escrow Instructions. Upon execution of this Agreement, the parties
shall deliver an executed counterpart of this Agreement to the Title Company to
serve as the instructions to the Title Company as the escrow holder for
consummation of the transaction contemplated herein. Sellers and Purchaser agree
to execute such additional and supplementary escrow instructions as may be
appropriate to enable the Title Company to comply with the terms of this
Agreement; provided, however that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of the Agreement shall prevail.
11.2 Sellers' Deliveries. Sellers shall deliver, either at the Closing or
by making available at the Property, as appropriate, the following original
documents, each executed and, if required, acknowledged:
11.2.1 A Deed of Purchase and Sale dated as of the date of delivery,
conveying each Parcel and the Improvements located thereon to Purchaser, subject
only to the Permitted Encumbrances, the form of which shall be agreed upon by
the parties prior to the Approval Date (collectively, the "Deed of Purchase and
Sale").
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CPR PROPERTY
11.2.2 A ▇▇▇▇ of Sale in the form attached hereto as Exhibit 11.2.2
conveying the Personal Property.
11.2.3 (i)The Leases described in Section 2.1.5 which are still in
effect as of Closing and any new Leases entered into pursuant to Section 5.4;
(ii) a current listing of any tenant Security Deposits and prepaid rents held by
Sellers with respect to the Property; and (iii) an assignment of such Leases,
Security Deposits, and prepaid rents by way of an Assignment and Assumption of
Leases agreement in the form attached hereto as Exhibit 11.2.3.
11.2.4 An assignment of all Service Contracts which Purchaser has
not elected to terminate and all Permits and Warranties to Purchaser by way of
an Assignment and Assumption of Contracts, Permits and Warranties agreement, in
the form attached hereto as Exhibit 11.2.4.
11.2.5 An assignment of all REAs to Purchaser by way of an
Assignment and Assumption of REA agreement, in the form attached hereto as
Exhibit 11.2.5.
11.2.6 Limited partnership authorizations in form reasonably
satisfactory to the Title Company authorizing the transactions contemplated by
this Agreement.
11.2.7 Letters notifying tenants of the conveyance of the Property
in the form attached hereto as Exhibit 11.2.7.
11.2.8 An affidavit and certificate as to parties in possession and
debts and liens in a form reasonably required by the Title Company and
reasonably acceptable to Seller.
11.2.9 All keys to all Improvements, combinations to any safes
thereon, passwords for all computers thereon and any security devices therein in
such Seller's possession.
11.2.10 All Plans, Tenant correspondence, and other Tenant files.
11.2.11 All Loan Documents relating to any Existing Financing
assumed by Purchaser.
11.2.12 All estoppel certificates referred to in Sections 10.1.2 and
10.1.3 in the forms required and permitted in said Sections.
11.2.13 An assignment of Sellers' right, title and interest in and
to all reserves, deposits and escrow for which Sellers have received the Reserve
Reimbursement.
11.2.14 An assignment of Sellers' right, title and interest in and
to the interest rate caps purchased by the Sellers with respect to the Existing
Financing.
11.2.15 To the extent applicable, the Income Support Agreement.
11.2.16 To the extent applicable, the Income Support Escrow
Agreement.
11.2.17 The Holdback Escrow Agreement.
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CPR PROPERTY
11.2.18 The Management Agreements executed by Manager.
11.2.19 To the extent applicable, assignments and assumptions of the
Cayey Construction Contracts, Cayey Plans, Escorial Construction Contracts,
Escorial Plans, Del Sol Construction Contracts and Del Sol Plans.
11.2.20 To the extent applicable, an assignment and assumption of
the Theater LOI.
11.2.21 To the extent applicable, an assignment and assumption of
the San German Expropriation.
11.2.22 To the extent applicable, an assignment and assumption of
the Existing Post-Closing Agreement, together with a written acknowledgement
from the Prior Owners that Sellers are not in default under such Existing
Post-Closing Agreement.
11.2.23 Such other instruments as may be reasonably requested by
Lender or Servicer in connection with Purchaser's assumption of any Existing
Financing, so long as such instruments do not impose any liability on Sellers or
their respective partners.
11.2.24 Such notice to the REA Parties regarding the change in
ownership as may be required by the REAs or as Purchaser may otherwise
reasonably request.
11.2.25 A "non-foreign person certification" from each Seller in the
form required by Section 1445 of the Internal Revenue Code of 1986, as amended
from time to time.
11.2.26 Such other instruments, affidavits, and tax returns and
certificates as are customarily executed by the seller of an interest in
property in connection with the recording of a deed to land in the Commonwealth
of Puerto Rico.
11.3 Purchaser's Deliveries. At the Closing, Purchaser shall execute,
acknowledge and/or deliver, as applicable, the following:
11.3.1 The Purchase Price.
11.3.2 The documents referred to in Sections 11.2.3(iii), 11.2.4,
11.2.13, 11.2.14, 11.2.15, 11.2.16, 11.2.17, 11.2.18, 11.2.19, 11.2.20, 11.2.21
and 11.2.22.
11.3.3 A corporate authorization in a form reasonably satisfactory
to the Title Company authorizing the transactions contemplated by this
Agreement.
11.3.4 All documents reasonably required by Lender or Servicer in
connection with the transfer of the Property to the Purchaser, and the
assumption of the obligations under the Loan Documents, so long as such
documents do not increase the financial or other material obligations or
liabilities of the borrowers thereunder.
11.3.5 Such other instruments, affidavits and certificates as are
customarily executed by the purchaser of an interest in property in connection
with the recording of a deed to land in the Commonwealth of Puerto Rico.
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CPR PROPERTY
11.4 Possession. Purchaser shall be entitled to possession of the Property
upon conclusion of the Closing subject to the rights of Tenants under the
Leases.
11.5 Insurance. Sellers shall terminate their policies of insurance as of
noon on the Closing Date, and Purchaser shall be responsible for obtaining its
own insurance thereafter.
11.6 Notice Letters. At Closing, Sellers shall provide to Purchaser
letters from Sellers to the parties to the Service Contracts and utility
companies serving the Projects, advising them to direct to Purchaser all bills
for the services provided to the Property on and after the Closing Date. Sellers
shall be entitled to the return of any deposit(s) posted prior to the Closing
with any utility company.
12. DEFAULT; FAILURE OF CONDITION.
12.1 Purchaser Default. If Purchaser shall become in material breach of or
material default under this Agreement and the breach or default continues beyond
the expiration of the cure period, if any, provided in Section 14.7 hereof, the
Deposit shall be retained by Sellers as liquidated damages, and all parties
shall be relieved of and released from any further liability hereunder except
for the Surviving Obligations. Sellers and Purchaser agree that the Deposit is a
fair and reasonable amount to be retained by Sellers as agreed and liquidated
damages in light of Sellers' removal of the Property from the market and the
costs incurred by Sellers and shall not constitute a penalty or a forfeiture.
12.2 Seller Default. If Sellers shall refuse or fail to convey the
Property as herein provided for any reason other than (a) a default by Purchaser
and the expiration of the cure period, if any, provided under Section 14.7
hereof, (b) the existence of a Pending Default (as defined in and contemplated
by Section 14.7), or (c) any other provision of this Agreement which permits
Sellers to terminate this Agreement or otherwise relieves Sellers of the
obligation to convey the Property, Purchaser shall elect as its sole and
exclusive remedy hereunder either to (i) terminate the Agreement and recover the
Deposit; or (ii) enforce Sellers' obligations under this Agreement by filing
suit within thirty (30) days of Sellers' default, provided that no such action
in specific performance shall seek to require Sellers to do any of the
following: (1) change the condition of any of the Projects or restore the same
after any fire or other casualty; (2) subject to Section 12.3, below, expend
money or post a bond to remove a title encumbrance or defect (other than an
Consensual Lien that Sellers are required to cure) or correct any matter shown
on a survey of any of the Projects; or (3) secure any permit, approval, or
consent with respect to the Property or Sellers' conveyance of the Property. In
the event of Sellers' willful refusal to close this transaction or in the event
specific performance is not available as the result of Sellers' willful default
under this Agreement, then Sellers shall reimburse Purchaser on demand for all
commercially reasonable third-party out-of-pocket expenses incurred by Purchaser
in connection with the transactions contemplated by this Agreement (including,
without limitation, any costs of survey, title, environmental or physical
inspections and attorneys' fees) and such reimbursement obligation shall survive
termination of this Agreement. In the event that specific performance is not
available because Sellers have conveyed the Property to a third party, then, in
addition to receiving the Deposit and reimbursement of Purchaser's commercially
reasonable third-party out-of-pocket expenses as aforesaid, Purchaser shall also
be entitled to liquidated damages in the amount of $14,914,000.00. Sellers and
Purchaser each acknowledge that this liquidated damages provision is neither
unconscionable, nor a penalty. Sellers expressly waive any defense that they may
have to the enforcement of this provision on the ground that it represents a
penalty or
PURCHASE AND SALE AGREEMENT - PAGE 46
CPR PROPERTY
is excessive or disproportionate to, or an unreasonable estimate of, Purchaser's
damages. Purchaser waives any right to receive any other amounts as damages as a
result of Sellers' refusal or failure to convey the Property.
12.3 New Defects. If, prior to Closing, Purchaser or any Seller discovers
that: (i) title to any Project is subject to defects, limitations or
encumbrances not shown on the Title Commitments or the Updated Surveys and/or
(ii) there is a violation of any Law at any Projects which arose after the
Approval Date (each a "New Defect" and collectively, the "New Defects"), then
the party who discovered the New Defect shall give the other party on or before
the date which is five (5) business days after its discovery (the "New Defect
Notice Date"), written notice of the New Defect (each a "New Defect Notice"). In
such event, Sellers or Purchaser may elect to postpone the Closing for up to
thirty (30) days in order to provide Sellers with an opportunity to cure such
New Defect. The parties acknowledge and agree that no Seller shall have any
obligation to cure any New Defect unless such New Defect is a Consensual Lien.
Sellers shall give Purchaser written notice (the "Election to Cure") of whether
it intends to cure such New Defect on or before the date which is five (5)
business days after receipt (or delivery) of the New Defect Notice (the "Cure
Election Deadline"). If Sellers fail to deliver the Election to Cure by the Cure
Election Deadline, then Sellers shall be deemed to have elected not to cure the
New Defect. In the event that Sellers fail to cure, elect not to cure or are
deemed to have elected not to cure such New Defect, then Purchaser shall have
the right to elect on or before the date which is five (5) business days
following the Cure Election Deadline (the "New Defect Termination Date") to
terminate this Agreement (which election may be made in Purchaser's sole and
absolute discretion). In the event that Purchaser delivers written notice to
Sellers of its election to terminate on or before the New Defect Termination
Date, then this Agreement shall be deemed terminated as of the date of such
notice and the Deposit shall be returned to Purchaser, whereupon neither the
Sellers nor the Purchaser shall have any further liability to the other
hereunder, except for Surviving Obligations hereunder. In the event that Sellers
fail to cure, elect not to cure or are deemed to have elected not to cure such
New Defect and Purchaser fails to make an election to terminate on or before the
New Defect Termination Date, then all the matters set forth in a New Defect
Notice shall be deemed to be Permitted Encumbrances. The parties agree that the
provisions of this Section 12.3 are not intended to supercede any rights and
remedies Purchaser may have in the event that Sellers breach the covenants set
forth in Section 5.5.
13. RELEASES OF PORTIONS OF THE PROPERTY.
13.1 Cayey Theater Parcel. Pursuant to that certain letter of intent dated
March 28, 2003 (the "Theater LOI") between Cayey Developers, S.E. (the "Prior
Cayey Owner") and Cayey Cinema Corporation ("CCC")), a copy of which is annexed
hereto as Exhibit 13.1, CPR Cayey is obligated to terminate that certain lease
dated December 9, 1997 (the "CCC Lease") between the Prior Cayey Owner and CCC
and to convey the property described in the Theater LOI ("Theater Parcel") to
CCC for a purchase price of $1,000,000 ("Theater Consideration") upon
satisfaction of certain conditions. In connection therewith, CPR Cayey and CCC
will enter into a reciprocal easement agreement (the "ECR")as more particularly
described in the Theater LOI. Purchaser shall have the right to approve the ECR,
such approval not to be unreasonably withheld or delayed, and Purchaser will be
deemed to have approved such ECR if Purchaser fails to respond to any request
for approval within five (5) business days after delivery of such request for
approval. In the event that the conditions precedent to such lease termination
and property conveyance are satisfied prior to Closing, CPR Cayey shall have the
right to terminate the CCC Lease, convey the Theater Parcel to CCC, enter into
the ECR and receive the Theater
PURCHASE AND SALE AGREEMENT - PAGE 47
CPR PROPERTY
Consideration. In such event, Seller shall be entitled to retain the Theater
Consideration and the Purchase Price shall be reduced by an amount equal to the
Theater Consideration. If the conditions precedent to such lease termination and
property conveyance are not satisfied prior to Closing, CPR Cayey shall assign
and Purchaser shall assume the rights and obligations of CPR Cayey with respect
to the Theater LOI. Purchaser shall indemnify, defend and hold harmless Sellers
of, from and against any and all loss, cost, expense (including reasonable
attorney's fees), liability, damages, actions, causes of action, demands or
claims with respect to Purchaser's failure to perform any of such obligations so
assumed by Purchaser.
13.2 San German Condemnation. Sellers and Purchaser acknowledge that CPR
San German has received a notification and/or disposition for forced
expropriation (the "Expropriation") of the portion of the San German Parcel
shown on Exhibit 13.2 hereto (the "Expropriated Parcel"). Prior to Closing, CPR
San German shall control any action or proceeding relating to the Expropriation
but shall not enter into a settlement agreement relating to the compensation to
be paid for the Expropriated Parcel ("Expropriation Proceeds") without the prior
written consent of Purchaser, which shall not be unreasonably withheld or
delayed. In the event that the Expropriation has not been completed prior to
Closing, Purchaser shall control any such action or proceeding after the Closing
but shall not enter into a settlement agreement relating to the compensation to
be paid for the Expropriated Parcel ("Expropriation Proceeds") without the prior
written consent of CPR San German, which shall not be unreasonably withheld or
delayed. Upon receipt by CPR San German or Purchaser, the Expropriation Proceeds
shall be distributed (i) first, to pay the costs of obtaining such Expropriation
Proceeds, relocating any pylon signs and/or restoring any Improvements (or to
reimburse CPR San German or Purchaser for any such costs paid by CPR San German
or Purchaser) and (ii) fifty percent (50%) of the remaining Expropriation
Proceeds to CPR San German and fifty percent (50%) to Purchaser; provided,
however, if the Expropriation Proceedings (a) reduce the number of parking
spaces at the San German Parcel below the number of spaces required pursuant to
any Planning Board Regulation such that Purchaser would be unable to rebuild the
existing buildings on the San German Parcel to their current size, (b)
materially adversely affects access to the San German Parcel, or (c) reduce the
number of parking spaces at the San German Parcel to the extent that the
landlord under any of the Leases at the San German Project would be in default
of any parking requirement set forth in such Leases, then Purchaser shall be
entitled to 100% of the Expropriation Proceeds (after payment or reimbursement
of costs of obtaining such Expropriation Proceeds). Notwithstanding anything to
the contrary contained herein, the rights of CPR San German and/or Purchaser to
prosecute any action, enter into any settlement and/or receive any Expropriation
Proceeds shall be subject to rights of Lender under the Loan Documents.
13.3 Additional Existing Obligations.
13.3.1 At the closing of Sellers' acquisition of the Property,
Sellers entered into a certain Post Closing Agreement between Sellers, CPR
Property Holdings LP, S.E. and the Prior Owners, a copy of which is annexed
hereto as Exhibit 13.3 (the "Existing Post-Closing Agreement").
13.3.2 Sellers represent and warrant to Purchaser that Sellers have
performed the obligations set forth in Sections 1 and 2 of the Existing
Post-Closing Agreement.
13.3.3 Sellers represent and warrant to Purchaser that, as of the
date hereof, (a) Sellers have not performed the obligations set forth in Section
3 of the Existing Post-Closing
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CPR PROPERTY
Agreement, (b) Sellers are not in default of their obligations under Section 3
of the Existing Post-Closing Agreement, and (c) Sellers have not received the
notice from ▇▇ ▇▇ Corp. referenced in Section 3(a).
13.3.4 Sellers represent and warrant to Purchaser that, as of the
date hereof, (a) Sellers have not performed the obligations set forth in Section
4 of the Existing Post-Closing Agreement, (b) Sellers are not in default of
their obligations under Section f of the Existing Post-Closing Agreement of the
Existing Post-Closing Agreement, and (c) Sellers have not received notice from
the Prior Owners that the conditions precedent to Sellers' obligations under
Section 4 of the Existing Post-Closing Agreement have been satisfied.
13.3.5 Sellers represent and warrant to Purchaser that, as of the
date hereof, (a) Sellers have not performed the obligations set forth in Section
5 of the Existing Post-Closing Agreement, (b) Sellers are not in default of
their obligations under Section 5 of the Existing Post-Closing Agreement, (c)
Sellers and Prior Owners are in the process of drafting the Deed of Restriction
referenced in Section 5 of the Existing Post-Closing Agreement, and (d) Sellers
have not given or received any notice of any claim for indemnification under
Section 5 of the Existing Post-Closing Agreement.
13.3.6 Sellers represent and warrant to Purchaser that, as of the
date hereof, (a) Sellers have not performed the obligations set forth in Section
6 of the Existing Post-Closing Agreement, (b) Sellers are not in default of
their obligations under Section 6 of the Existing Post-Closing Agreement, and
(c) Sellers have not received any notice of any claim for indemnification under
Section 6 of the Existing Post-Closing Agreement.
13.3.7 Prior to Closing, Sellers shall have the right to perform
their obligations under Section 3 through 6 of the Existing Post-Closing
Agreement if required to do so pursuant to the terms thereof. Sellers agree that
Sellers shall deliver Purchaser written notice of any such performance and
Sellers shall obtain Purchaser's prior written consent, not to be unreasonably
withheld or delayed, to any document or instrument to be executed by Sellers
pursuant to Section 4 through 6 of the Existing Post-Closing Agreement. In the
event that Purchaser's consent is required hereunder, Purchaser will be deemed
to have approved any such document or instrument if Purchaser fails to respond
to any request for consent within five (5)business days after receipt of such
request for consent.
13.3.8 In the event that Sellers have not performed any of the
obligations set forth in Sections 3 through 6 of the Existing Post-Closing
Agreement, Purchaser shall assume such obligations at Closing. Purchaser shall
also assume the indemnification obligations of Sellers thereunder with respect
to the period from and after the Closing. Purchaser shall indemnify, defend and
hold harmless Sellers of, from and against any and all loss, cost, expense
(including reasonable attorney's fees), liability, damages, actions, causes of
action, demands or claims with respect to Purchaser's failure to perform any of
such obligations so assumed by Purchaser.
13.4 Survival. The provisions of this Article 13 shall survive the
Closing.
14. MISCELLANEOUS.
14.1 Entire Agreement. This Agreement, together with the Exhibits attached
hereto, all of which are incorporated by reference, is the entire agreement
between the parties with
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CPR PROPERTY
respect to the subject matter hereof, and no alteration, modification or
interpretation hereof shall be binding unless in writing and signed by both
parties.
14.2 Severability. If any provision of this Agreement or application to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
14.3 Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO RULES
RELATING TO THE CONFLICTS OF LAWS.
14.4 Jurisdiction. Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York and the appellate courts
of any thereof, and by execution and delivery of this Agreement, each party to
this Agreement hereby accepts, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each party to this Agreement hereby expressly and
irrevocably submits the person of such party to this Agreement to the in
personam jurisdiction of the foregoing courts in any suit, action or proceeding
arising, directly or indirectly, out of or relating to this Agreement. To the
extent permitted under applicable law, this consent to personal jurisdiction
shall be self-operative and no further instrument or action, other than service
of process in one of the manners specified in this Agreement or as otherwise
permitted by law, shall be necessary in order to confer jurisdiction upon the
person of such party to this Agreement in any such court. To the fullest extent
permitted under applicable law, each party to this Agreement irrevocably waives
and agrees not to assert, by way of motion, as a defense or otherwise, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court referred to in this
Section 14.4, any claim that any such suit, action or proceeding has been
brought in an inconvenient forum, any claim that it is not personally subject to
the jurisdiction of any such court or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
14.5 Assignability. Purchaser shall have the right to assign this
Agreement and all of its rights under this Agreement to an entity ("Permitted
Assignee") in which Purchaser directly or indirectly owns at least ten percent
(10%) of the interests and the balance of such interests are owned by one or
more joint venture partners of institutional quality, including, but not limited
to, Macquarie-DDR Trust, an Australian Listed Property Trust, or to one or more
newly formed and validly existing wholly-owned subsidiaries of Purchaser (or the
Permitted Assignee) upon five (5)days prior written notice to Sellers. Purchaser
shall use reasonable efforts to minimize any delay such assignment may cause in
connection with obtaining Lender's Consent. Except for the foregoing, Purchaser
shall not assign this Agreement. Any assignment in contravention of this
provision shall be void. No assignment shall release the Purchaser herein named
from any obligation or liability under this Agreement. Any assignee shall be
deemed to have made any and all representations and warranties made by Purchaser
hereunder, as if the assignee were the original signatory hereto.
14.6 Successors Bound. This Agreement shall be binding upon and inure to
the benefit of Purchaser and Sellers and their respective successors and
permitted assigns.
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CPR PROPERTY
14.7 Breach. Should either party be in breach of or default under or
otherwise fail to comply with any of the terms of this Agreement, except as
otherwise provided in this Agreement, the complying party shall have the option
to terminate this Agreement upon ten (10) days written notice to the other party
of the alleged breach, default or failure unless such defaulting party cures
such breach, default or failure within such ten (10) day period. The
non-defaulting party shall promptly notify the defaulting party in writing of
any such alleged breach, default or failure upon obtaining knowledge thereof.
The Closing Date shall be extended to the extent necessary to afford the
defaulting party the full ten-day period within which to cure such breach,
default or failure; provided, however, that the failure or refusal by a party to
perform on the Closing Date (except in respect of a Pending Default by the other
party) shall be deemed to be an immediate default without the necessity of
notice; and provided further, that if the Closing Date shall have been once
extended as a result of default by a party, such party shall be not be entitled
to any further notice or cure rights with respect to that or any other default.
For purposes of this Section 14.7, a "Pending Default" shall be a default for
which (i) written notice was given by the non-defaulting party, and (ii) the
cure period extends beyond the scheduled Closing Date.
14.8 Captions. The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Agreement or the scope or content of any of it provisions.
14.9 No Partnership. Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between the parties or their
successors in interest.
14.10 Counterparts. This Agreement may be executed and delivered in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original and all of which shall constitute one and the same instrument.
14.11 Recordation. Purchaser and Sellers agree not to record this
Agreement or any memorandum hereof.
14.12 Submission of Agreement. The submission by Sellers to Purchaser of
this Agreement shall have no binding force and effect, shall not constitute an
option, and shall not confer any rights upon Purchaser or impose any obligations
upon Sellers irrespective of any reliance thereon, change of position or partial
performance. The submission by Sellers of this Agreement for execution by
Purchaser and the actual execution and delivery thereof by Purchaser to Sellers
shall similarly have no binding force and effect on Sellers unless and until
Sellers shall have executed this Agreement and the Deposit shall have been
received by the Title Company and a counterpart thereof shall have been
delivered to Purchaser.
14.13 Tax Protest. If, as a result of any tax protest or otherwise, any
refund is paid or reduction of any real property or other tax or assessment is
made available relating to the Property with respect to any period for which,
under the terms of this Agreement, Sellers are responsible, Sellers shall be
entitled to receive or retain such refund or the benefit of such reduction, less
the equitable prorated costs of collection and any amounts which are required to
be refunded to Tenants pursuant to Leases.
14.14 Indemnification, Survival and Limitation: Sellers' Knowledge.
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CPR PROPERTY
14.14.1 Sellers shall, indemnify, defend and hold harmless Purchaser
and the Permitted Assignees and their respective officers, directors, employees,
agents and representatives (collectively, the "Purchaser Indemnitees"), from and
against any and all actions, proceedings, costs, damages (excluding
consequential and other indirect damages), claims, losses, liabilities (absolute
and contingent), fines, penalties, payments, costs and expenses (including
reasonable counsel fees, interest, penalties and disbursements) (collectively,
"Losses"), that may be asserted against or suffered or incurred by Purchaser
Indemnitees during the period commencing on the Closing Date and ending on the
day immediately preceding the first anniversary of the Closing Date (the
"Survival Period") arising out of, or relating to, (a) the Property with respect
to any period prior to the Closing Date, except to the extent specifically
assumed by Purchaser herein, (b) all Taxes relating to any period prior to the
Closing (other than taxes and special assessments which are prorated pursuant to
Section 7.4, transfer or recording taxes which are apportioned pursuant to
Sections 7.1 and 7.2 and any Taxes which are the obligation of any Tenant or REA
Party to pay), (c) all liabilities and obligations relating to the Property
which arose prior to the Closing Date which are not assigned to and assumed by
Purchaser at Closing (excluding any liabilities or obligations which are
apportioned herein and any liabilities or obligations for which any Tenant or
REA Party is obligated), and/or (d) all liabilities and obligations of Sellers
which are not related to the Property.
14.14.2 Sellers shall, indemnify, defend and hold harmless Purchaser
Indemnitees, from and against any and all Losses, that may be asserted against
or suffered or incurred by Purchaser Indemnitees during the Survival Period
arising out of, or relating to, a breach of any representation or warranty,
covenant or agreement by Sellers made in this Agreement or any document or
instrument delivered pursuant hereto.
14.14.3 Purchaser Indemnitees shall give prompt written notification
of any claim for Losses to Sellers, provided, however, written notification of
any claim for Losses must be received by Sellers on or before the expiration of
the Survival Period or such claim shall be forever barred and Sellers shall have
no liability with respect thereto.
14.14.4 Notwithstanding anything contained in this Section 14.14 to
the contrary, to the extent any Tenant under a Lease certifies in its estoppel
certificate as to any of the matters which are contained in the representations
and warranties in Section 6.1 of this Agreement, then in the event of any Losses
with respect to such representations and warranties Purchaser covenants that it
will first use commercially reasonable efforts (provided that Purchaser shall
not be required to pursue legal action) to obtain payment of such Losses from
such Tenant before its seeks to recover from Sellers pursuant to the
indemnification under Section 14.14 of this Agreement. In the event that Sellers
receive a notice of a potential claim for Losses against a Tenant on or before
the expiration of the Survival Period, then this notice shall satisfy the
requirements of Section 14.14.3 of this Agreement and the notice requirements
under the Holdback Escrow Agreement and the Escrow Agent shall retain the
amounts required under the Escrow Agreement pending resolution of such Losses.
If such Losses are paid from the amounts held in escrow pursuant to the Holdback
Escrow Agreement, then, upon the request of Sellers, Purchaser shall, at
Sellers' expense, commence litigation against such Tenant with respect to such
Losses using counsel selected by Sellers and continue such litigation as
directed by Sellers; provided, in no event shall Purchaser be obligated to evict
any Tenant or terminate any Tenant's Lease.
PURCHASE AND SALE AGREEMENT - PAGE 52
CPR PROPERTY
14.14.5 If Purchaser discovers (or a Seller discloses) on or prior
to the Closing Date that any of Sellers' representations and warranties in this
Agreement are untrue or incorrect, Purchaser's sole rights and remedies shall be
as set forth in Sections 6.4 and 10.1.2.
14.14.6 The aggregate liability of Sellers for any indemnification
obligations under this Section 14.14 shall not exceed $5,692.1 67.39 ("Maximum
Indemnification Amount") and recovery of actual Losses up to that amount is
Purchaser's sole and exclusive remedy hereunder provided, however, Sellers shall
have no liability to Purchaser for matters disclosed by Sellers to Purchaser or
discovered by Purchaser prior to Closing.
14.14.7 Whenever a representation or warranty is made in this
Agreement on the basis of the knowledge of Sellers, such representation and
warranty is made solely on the basis of the actual knowledge without inquiry or
investigation of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
and/or ▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "Knowledge Parties"). Purchaser
acknowledges that the Knowledge Parties are named herein solely for the purpose
of defining the scope of the Sellers' knowledge and not for the purpose of
imposing any liability upon or creating any duties running from such Knowledge
Parties to Purchaser. Purchaser agrees that it will bring no action of any kind
against such Knowledge Parties related to or arising out of this Agreement.
14.14.8 All indemnity, defense and/or hold harmless obligations
contained herein shall survive the Closing for the Survival Period. All
indemnity, defense and/or hold harmless obligations of Sellers in favor of
Purchaser shall run to, and be for the benefit of, any Permitted Assignee(s) of
Purchaser.
14.14.9 In order to secure the payment by the Sellers of any Losses
pursuant to this Section 14.14, the Sellers shall deposit into escrow with the
Title Company an amount equal to the Maximum Indemnification Amount to be held
and disbursed pursuant to an escrow agreement (the "Holdback Escrow Agreement")
in the form annexed hereto as Exhibit 14.14.9.
14.14.10 Sellers' indemnification obligations set forth in this
Section 14.14 shall run to, and be for the benefit of, the Permitted
Assignee(s).
14.15 No Processing. Without Sellers' prior written consent, until the
Closing, Purchaser shall not make any application to any governmental agency for
any permit, approval, license or other entitlement for the Property or the use
or development thereof, or have any communications with any governmental agency
or official relating to the condition (environmental or otherwise) of the
Property, except that Purchaser (or the Title Company or Purchaser's retained
consultants on Purchaser's behalf) shall have the right to communicate with
governmental agencies or officials in connection with (a) the preparation of the
Title Commitments, Title Policies and Updated Surveys and the delivery of copies
of all items shown as exceptions to title therein; (b) tax searches; (c)
searches to determine whether there are any violations of any laws, rules or
regulations applicable to the Property; and (d) preparation of any Phase
I environmental report relating to the Property.
14.16 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday for national banks in New
PURCHASE AND SALE AGREEMENT - PAGE 53
CPR PROPERTY
York. New York, in which event the period shall run until the end of the next
day which is neither a Saturday, Sunday, or legal holiday. The last day of any
period of time described herein shall be deemed to end at 500 p.m. New York, New
York time.
14.17 Section 1031 Exchange. Either party may consummate the purchase or
sale (as applicable) of all or any of the Projects as part of a so-called like
kind exchange (an "Exchange") pursuant to Section 1031 of the Code, provided
that: (a) the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of an Exchange be a condition
precedent or condition subsequent to the exchanging party's obligations under
this Agreement, (b) the exchanging party shall effect its Exchange through an
assignment of this Agreement, or its rights under this Agreement, to a qualified
intermediary, (c) neither party shall be required to take an assignment of the
purchase agreement for the relinquished or replacement property or be required
to acquire or hold title to any real property for purposes of consummating an
Exchange desired by the other party; and (d) the exchanging party shall pay any
additional costs that would not otherwise have been incurred by the
non-exchanging party had the exchanging party not consummated the transaction
through an Exchange. Neither party shall by this Agreement or acquiescence to an
Exchange desired by the other party have its rights under this Agreement
affected or diminished in any manner or be responsible for compliance with or be
deemed to have warranted to the exchanging party that its Exchange in fact
complies with Section 1031 of the Code.
14.18 Arbitration. Any matter arising pursuant to any provision hereunder
which specifies that such matter shall be resolved by arbitration shall be
submitted to arbitration in accordance with the provisions of this Section
14.18. The party having the right to submit a matter to arbitration and
exercising its right to do so shall have the right to request an arbitration
which shall be conducted in accordance with the Rules of Arbitration of the
American Arbitration Association for a single arbitrator arbitration (the
"Rules") in New York, New York, or at such other location as may be agreed
between the parties. The arbitration shall be conducted by a single arbitrator
chosen in accordance with such Rules, provided that such arbitrator shall be a
person having at least ten (10) years experience in real estate. The
determination of the arbitrator shall be made within thirty (30) days following
the appointment of such arbitrator and shall be conclusive and binding upon the
parties and judgment upon the same may be entered in any court having
jurisdiction thereof. Each party shall pay the fees and expenses of the
arbitrator as determined by the arbitrator. The provisions of this Section 14.18
shall survive the Closing.
14.19 Limitation of Liability.
14.19.1 Purchaser hereby acknowledges and agrees that in no event
shall any partner of any Seller ever be liable to Purchaser as a result of a
breach of this Agreement, and Purchaser agrees to look solely to (a) Sellers for
satisfaction of any claim, loss or damage in the event the Closing does not
occur or (b) the Maximum Indemnification Amount then held pursuant to the
Holdback Escrow Agreement for satisfaction of any claim, loss or damage in the
event the Closing occurs.
14.19.2 In no event shall Sellers or any direct or indirect partner,
member, shareholder, owner or affiliate thereof, any officer, member, director,
employee or agent of any of the foregoing or any affiliate or controlling person
thereof be liable to Purchaser in contract, tort or otherwise with respect to
any indirect, consequential, special, exemplary or incidental damages arising
from or relating to this Agreement or any Closing document. In no event will
PURCHASE AND SALE AGREEMENT - PAGE 54
CPR PROPERTY
Purchaser or any direct or indirect partner, member, shareholder, owner or
affiliate thereof, any officer, member, director, employee or agent of any of
the foregoing or any affiliate or controlling person thereof be liable to any
Seller in contract, tort or otherwise with respect to any indirect,
consequential, special, exemplary or incidental damages arising from or relating
to this Agreement or any Closing document.
14.20 Delivery of Financial Statements. Seller agrees that
PricewaterhouseCoopers LLP ("PWC) may review, before or after Closing, the
Project Financial Statements of Sellers and provide to Purchaser, at Purchaser's
expense, such other financial statements and related information as may be
required to be included in public filings made by Purchaser, at the times
required by, and to the extent required by, applicable securities laws or rules
or policies of the NYSE or, as reasonably determined by Purchaser to be
advisable in connection with an offering of its securities, including without
limitation, the so-called "3-14 Review" as of September 30, 2004. Sellers shall
provide to Purchaser or PWC such information in order for PWC to complete its
3-14 Review, which may be completed by December 31, 2004, at the Purchaser's
option. In addition, Sellers shall execute and deliver a Letter of
Representation to PWC in connection with the 3-14 Review in a form attached here
to as Exhibit 14.20. "Project Financial Statements" means, with respect to the
Projects, (i)revenue and expense detail for all Projects prepared on the accrual
basis of accounting identified to be audited by PWC for the period ended
September 30, 2004, and (ii) revenue and expense detail for all Projects with
appropriate accrual basis adjustments as deemed necessary by PWC for the periods
ended September 30, 2004. In addition, the Seller is to deliver to the Purchaser
the audited statements prepared for each Project for the year ended December
31,2004, once complete.
14.21 Time of the Essence. Time is of the essence with respect to Sellers'
and Purchaser's obligations to close on the Closing Date; provided such Closing
Date may be extended pursuant to Sections 2.4.2, 4.2.2, 6.4, 8.1, 10.1.5, 12.3
and 14.7 hereof.
PURCHASE AND SALE AGREEMENT - PAGE 55
CPR PROPERTY
IN WITNESS WHEREOF, Purchaser and Sellers have executed this Agreement on
the date set forth below, effective as of the Effective Date.
SELLERS
CPR DEL SOL LP, S.E. a Delaware limited
partnership
By CPR Del Sol GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
CPR ESCORIAL LP, S.E. a Delaware limited
partnership
By CPR Escorial GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
CPR CAYEY LP, S.E. a Delaware limited
partnership
By CPR Cayey GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
CPR PALMA REAL LP, S.E. a Delaware
limited partnership
By CPR Palma Real GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
PURCHASE AND SALE AGREEMENT
CPR PROPERTY
CPR ISABELA LP, S.E. a Delaware limited
partnership
By CPR lsabela GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
CPR SAN GERMAN LP, S.E. a Delaware
limited partnership
By CPR San German GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
PURCHASER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
By:_____________________________________
Name:
Title:
PURCHASE AND SALE AGREEMENT
CPR PROPERTY
CPR ISABELA LP, S.E.a Delaware Limited
partnership
By CPR Isabela GP Inc., S.E., its
general partner
By:_______________________________
Name:
Title:
CPR SAN GERMAN LP, S.E. a Delaware
limited partnership
By CPR San German GP Inc., S.E., its
general partner
By:_______________________________
Name:
Title:
PURCHASER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
An original, fully executed copy of this Agreement, together with the
Deposit, has been received by the Title Company this 2nd, day of November, 2004,
and by execution hereof the Title Company hereby covenants and agrees to be
bound by the terms of this Agreement.
TITLE INSURANCE COMPANY
COMMONWEALTH LAND TITLE INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
JOINDER
The undersigned joins into this Agreement for the sole purpose of: (i) agreeing
to the provisions of Section 6.3 above, and (ii) releasing Sellers from any
claim for commission or other compensation relating to the Agreement or the
transactions contemplated thereby whether the transaction closes or not.
TRANSWESTERN COMMERCIAL SERVICES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Vice Chairman
PURCHASE AND SALE AGREEMENT
CPR PROPERTY