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EXHIBIT 2
PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
by
and
between
SPRING HILL MALL PARTNERSHIP,
an Illinois general partnership,
"SELLER"
and
SPRING HILL MALL L.L.C,
a Delaware limited liability company
"PURCHASER"
Dated as of
August 21, 1998
PROPERTY: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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TABLE OF CONTENTS
Page
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1. IDENTIFICATION OF PARTIES............................................................... 1
2. DESCRIPTION OF THE PROPERTY............................................................. 1
3. THE PURCHASE PRICE; ASSUMPTION OF LIABILITIES........................................... 3
4. TITLE................................................................................... 5
5. PURCHASER'S DUE DILIGENCE............................................................... 7
6. REPRESENTATIONS AND WARRANTIES OF SELLER................................................ 9
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.................................. 12
8. CONFIDENTIALITY......................................................................... 14
9. CONDITIONS PRECEDENT TO CLOSING......................................................... 15
10. COVENANTS OF SELLER..................................................................... 18
11. SELLER'S CLOSING DELIVERIES............................................................. 20
12. PURCHASER'S CLOSING DELIVERIES.......................................................... 22
13. PRORATIONS AND ADJUSTMENTS.............................................................. 23
14. CLOSING................................................................................. 27
15. CLOSING COSTS........................................................................... 28
16. RISK OF LOSS............................................................................ 28
17. DEFAULT................................................................................. 30
18. BROKER'S COMMISSION..................................................................... 31
19. ESCROW.................................................................................. 31
20. MISCELLANEOUS........................................................................... 33
21. MATTERS RELATING TO ▇▇▇▇▇ THEATRES...................................................... 37
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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
1. IDENTIFICATION OF PARTIES
THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(this "AGREEMENT") is entered into as of August 21, 1998, by and between SPRING
HILL MALL L.L.C., a Delaware limited liability company ("PURCHASER"), and SPRING
HILL MALL PARTNERSHIP, an Illinois general partnership ("SELLER").
2. DESCRIPTION OF THE PROPERTY
Seller agrees to sell, assign and convey to Purchaser, and agrees to
purchase from Seller, the following:
(a) That certain real property located in the County of ▇▇▇▇, State
of Illinois, more particularly described on Exhibit A attached hereto (the
"LAND"), together with the improvements, structures and facilities owned by
Seller and located thereon (the "IMPROVEMENTS");
(b) All of Seller's interest as lessor in all leases, licenses and
other occupancy agreements covering the Land and Improvements (said leases,
licenses and other occupancy agreements, together with any and all
amendments, modifications or supplements thereto, are hereinafter referred
to collectively as the "LEASES" and are identified on the Schedule of Leases
attached hereto as Exhibit B);
(c) All of Seller's interest under those certain reciprocal easement
agreements (said reciprocal easement agreements, together with any and all
amendments, modifications or supplements thereto, are hereinafter referred
to collectively as the "REAS") identified on the Schedule of REAs attached
hereto as Exhibit C;
(d) All of Seller's interest in the repurchase right set forth in
Section 6 of that certain Federated Department Stores, Inc., Purchase and
Sale Agreement, Spring Hill Mall, dated as of July 14, 1986 (the "FEDERATED
SALE AGREEMENT") by and between Homart Development Co., a Delaware
corporation ("HOMART"), and Federated Department Stores, Inc., a Delaware
corporation ("FEDERATED"), which relates to certain rights of Seller (as
successor-in-interest to Homart) to repurchase the real property sold by
Homart to Federated under the Federated Sale Agreement (the "REPURCHASE
RIGHT"), which Repurchase Right is evidenced by that certain Memorandum of
Repurchase Right dated as of July 17, 1986 and recorded on July 28, 1986 in
the Official Records of ▇▇▇▇ County, Illinois (the "OFFICIAL RECORDS") as
Document No. 1784184; the Repurchase Right was restated in its entirety
pursuant to that certain Restatement of Purchase Right dated as of March 3,
1989, by and
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between Seller and Mainstreet Retail Stores, Inc., a Delaware corporation
(as successor in-interest to Federated), as evidenced by that certain
Memorandum of Repurchase Right dated as of March 3, 1989 and recorded on
March 17, 1989 in the Official Records as Document No. 1962810;
(e) All of Seller's interest under that certain Development
Agreement-Spring Hill West Subdivision dated November 3, 1986, by and
between Homart and the Village of West Dundee, a municipal corporation duly
incorporated and operating pursuant to the laws of the State of Illinois
(the "VILLAGE"), and recorded in the Official Records on December 10, 1986
as Document No. 1811461, as amended by that certain Addendum to Development
Agreement-Spring Hill West Subdivision dated September 28, 1987, by and
between Homart and the Village, and recorded in the Official Records on
August 14, 1988 as Document No. 1927497 (as amended, the "DEVELOPMENT
AGREEMENT");
(f) All rights, privileges, licenses, easements and appurtenances to
the Land and the Improvements, if any, including, without limitation, all of
Seller's right, title and interest, if any, in and to all mineral and water
rights and all easements, rights-of-way and other appurtenances (including
any land lying in the beds of any streets, roads or avenues, open or
proposed, public or private, in front of or adjoining the Land to the center
lines thereof, and in and to any awards to be made in lieu thereof and in
and to any unpaid awards for damage to the foregoing by reason of the change
of grade of any such streets, roads or avenues, and all strips and gores,
hereditaments and such other real property rights and interests appurtenant
to the Land) used or connected with the beneficial use or enjoyment of the
Land and the Improvements (the Land, the Improvements and all such easements
and appurtenances (including, without limitation, Seller's interest under
the Leases, the REAs, the Development Agreement and to the Repurchase Right)
are sometimes collectively hereinafter referred to as the "REAL PROPERTY");
(g) All personal property and fixtures owned by Seller and located
on the Real Property including, without limitation, any machinery,
equipment, building supplies and materials, consumables, inventories,
computer and peripheral equipment, computer software and data contained in
hard drives and on diskette, the Books and Records (as hereinafter defined),
and advertising materials (all of the foregoing, collectively, the "PERSONAL
PROPERTY"); and
(h) All of Seller's interest in and to any trademarks, trade names,
logos and copyrights used in connection with the Real Property (including,
without limitation, the name "SPRING HILL MALL"), excluding, however,
Seller's name and trademarks or trade names of Seller's affiliated companies
(collectively, the "TRADE NAMES"), together with Seller's interest in and to
any Service Contracts (hereinafter defined), guarantees, licenses,
approvals, certificates, permits and warranties (including any performance
bonds obtained by, or for the benefit of, Seller, pertaining to the
ownership, construction or development of the Real Property or any part
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thereof) and telephone exchange numbers relating to the Property, to the
extent assignable (collectively, the "Intangible Property"). (The Real
Property, the Personal Property, the Trade Names and the Intangible Property
are sometimes collectively hereinafter referred to as the "Property").
3. THE PURCHASE PRICE; ASSUMPTION OF LIABILITIES
The purchase price for the Property is One Hundred Twenty-Four
Million Dollars ($124,000,000) (the "PURCHASE PRICE"), subject to the
adjustments and prorations hereinafter set forth, and shall be paid to
Seller by Purchaser at the Closing (as that term is defined in Section 14
below) as follows:
(a) Within two (2) business days after execution of this Agreement
by all parties, Purchaser shall deposit in escrow with Commonwealth Land
Title Insurance Company ("ESCROW COMPANY") an ▇▇▇▇▇▇▇ money deposit in
immediately available funds in the amount of One Million Dollars
($1,000,000) (the "INITIAL DEPOSIT").
(b) If Purchaser elects to extend the Closing Date until September
15, 1998 pursuant to Section 14, then Purchaser shall deposit in escrow with
the Escrow Company on or before August 31, 1998, an additional ▇▇▇▇▇▇▇ money
deposit in immediately available funds in the amount of Five Hundred
Thousand Dollars ($500,000) (the "ADDITIONAL DEPOSIT"), provided that the
following conditions are satisfied or waived by Purchaser on or before
August 28, 1998:
(i) Purchaser shall not have terminated this Agreement in accordance
with Section 4, Section 16(a) or Section 16(b) herein as of August 28,
1998;
(ii) Purchaser shall have received and reasonably approved, within
two (2) days after the delivery thereof, executed estoppel certificates
substantially in the form of Exhibit D hereto from each of the Tenants
listed on Exhibit E hereto ("MAJOR TENANTS");
(iii) Purchaser shall have received and reasonably approved, within
one (1) day after the delivery thereof, the estoppel certificates and
written assurance described in Section 9(a)(iv) below;
(iv) There shall be no material breach of any of Seller's
representations, warranties or covenants set forth in Section 6 and
Section 10, as of August 28, 1998, and Seller shall have complied, in
all material respects, with the covenants and agreements to be complied
with or performed by Seller on or before such date;
(v) As of August 28, 1998, there shall be no litigation, including
any arbitration, investigation or other proceeding, pending by or
before any court, arbitrator or governmental authority, nor any decree,
order or injunction
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issued by any such court, arbitrator or governmental authority and
remaining in effect, which does or seeks to prevent or hinder the
timely consummation of the Closing or materially and adversely affects
the Property (except the ▇▇▇▇▇ Litigation, as defined in Section 21(a)
below, and any decree, order or injunction entered in connection
therewith).
(vi) The Releases/Directions (as defined in Section 10(f) below)
shall have been obtained, or the ten (10) day period for issuance of
the Releases/Directions under 35 ILCS 120/5j (after which Purchaser is
relieved of liability for tax, penalty or interest owed by Seller)
shall have expired;
(vii) Purchaser shall have received the items set forth in Section
9(a)(ix); and
(viii) No event or condition shall have occurred and continue to exist
as of August 28, 1998 which would materially limit or impair the
availability of utility services to the Property (and temporary
interruptions of utility services for purposes of repairs or
maintenance shall not be considered a material limitation or
impairment).
The Initial Deposit and the Additional Deposit are sometimes hereafter
collectively referred to as the "DEPOSIT."
(c) The Deposit paid by Purchaser pursuant to the terms hereof
shall be held by Escrow Company in an interest bearing account insured by
the federal government in an institution as directed by Purchaser and
reasonably acceptable to Seller. If the purchase and sale of the Property
is consummated as contemplated hereunder, the Deposit plus all interest
accrued thereon shall be paid to Seller at the Closing and credited against
the Purchase Price. If the purchase and sale of the Property is not
consummated because of the failure of any Purchaser's Condition Precedent
(as defined in Section 9 below) or any other reason except for a default
under this Agreement on the part of Purchaser, the Deposit plus all
interest accrued thereon shall be immediately refunded to Purchaser. If the
purchase and sale of the Property is not consummated because of a default
under this Agreement on the part of Purchaser, the Deposit plus all
interest accrued thereon shall be paid to and retained by Seller pursuant
to Section 17(b) below.
(d) The balance of the Purchase Price over and above the amounts
paid by or credited to Purchaser pursuant to Sections 3(a)-(c), inclusive,
above shall be paid to Seller by wire transfer of immediately available
funds at the Closing, net of all prorations as provided herein.
(e) At the Closing, Purchaser shall assume the liabilities and
obligations of Seller arising from and after the Closing Date under or in
respect of the Leases (including any obligation to refund any security
deposits to the extent credited to
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Purchaser), the REAs, the Development Agreement, the documents evidencing
the Repurchase Right, and the Service Contracts (with the liability of
Purchaser being limited to the same extent, if any, as Seller's liability is
limited under such agreements). All of the obligations to be assumed by
Purchaser pursuant to this Section 3(e) are hereinafter referred to as the
"ASSUMED LIABILITIES".
(f) Except as otherwise provided in this Agreement (including,
without limitation, Section 7(g) below) or the documents executed in
connection with the Closing, Purchaser is not assuming and shall not by
virtue of the consummation of the transactions set forth herein be deemed to
have assumed (i) any contractual obligations of Seller under the Leases, the
REAs, the Development Agreement, the documents evidencing the Repurchase
Right, or the Service Contracts arising prior to the date of Closing (except
to the extent that Purchaser receives a credit at the Closing pursuant to
Section 13 for any monetary obligations accruing under the foregoing
agreements for the period prior to the Closing), or (ii) Seller's
liabilities with respect to federal, state and local taxes of whatever kind
and nature (other than real estate taxes and assessments on real property
which are prorated under Section 13) (collectively, "SELLER'S LIABILITIES").
4. TITLE.
(a) Seller has previously delivered to Purchaser a title commitment
pertaining to the Real Property (the "COMMITMENT") prepared by Commonwealth
Land Title Insurance Company ("TITLE COMPANY"), together with copies of all
documents relating to the title exceptions referred to in such Commitment
(the "TITLE DOCUMENTS").
(b) Seller has previously delivered to Purchaser and to Title
Company an Urban ALTA/ACSM Land Title Survey of the Real Property prepared
by a surveyor licensed or registered in the State of Illinois (the
"SURVEY"). Purchaser shall have no right to disapprove or object to the form
of the Survey (as opposed to matters disclosed by such Survey) pursuant to
Section 4(c) or otherwise to the extent the Survey: is made in compliance
with and meeting the accuracy standards under the "Minimum Standard Detail
Requirements for ALTA/ACSM Land Surveys" jointly established by the American
Land Title Association and American Congress on Surveying and Mapping in
effect and contains Table A Optional Survey Responsibilities and
Specifications 1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9, 10, 11 and 13;
shows the boundaries of each of the Land parcels (including without
limitation any easement parcels); discloses whether or not the Land
comprises a single parcel of land with no strips, gores or gaps within its
boundaries; discloses any encroachments of any Improvements located
primarily on the Land onto adjoining premises and public ways (and whether
or not a valid easement for the benefit of the Real Property exists and is
in place with respect to each such encroachment) or onto or over setback or
building lines located on the Real Property or of improvements located
primarily on adjoining premises onto any portion of the Land (and whether or
not a valid
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easement for the benefit of the adjoining premises exists and is in place
with respect to each such encroachment); locates all easements created by
recorded instruments (to the extent plottable) or visible on the Real
Property and discloses any encroachment by any of the Improvements, or any
other structures located on the Land, in violation of any such easements;
contains a legal description of the Land; shows the location of any adjacent
public streets, disclosing access, if any, to the Land therefrom; shows
building line(s) and side yard line(s), if any; shows the configuration and
number of parking spaces on the Land; shows the area of the Land; states
whether the Land is located in an area designated by HUD as having special
flood risks; and contains a certificate of the surveyor attesting to the
accuracy of the Survey and its conformity to the requirements of the
aforesaid Minimum Standard Detail Requirements, which certificate is
directed to Seller, Purchaser and the Title Company, and to such other
persons having an interest in the Property which Purchaser has designated.
(c) Within one (1) business day after the date hereof, shall notify
Seller in writing of any matters in the Commitment or the Survey which
Purchaser disapproves (any such matter, a "DEFECT"). Any such matter not
disapproved in writing within said one (1) business day period shall be
deemed approved by Purchaser, and shall constitute a "PERMITTED EXCEPTION"
hereunder. Purchaser and Seller agree that (i) all non-delinquent property
taxes and assessments, (ii) the rights of the tenants under the Leases (the
"TENANTS"), and (iii) all matters created by or on behalf of Purchaser,
including, without limitation, any documents or instruments to be recorded
as part of any financing for the acquisition of the Property by Purchaser,
shall constitute "PERMITTED EXCEPTIONS". No later than two (2) business days
after receipt of such disapproval, Seller shall notify Purchaser in writing
of any Defects which Seller is unable or unwilling to cause to be removed,
cured or insured against prior to or at Closing (provided, however, that
Seller shall cause any such Defects which are monetary liens of a fixed and
ascertainable amount arising through Seller that may be removed solely by
the payment of money, including without limitation, judgment and mechanics'
liens, to be removed at or prior to the Closing and shall deposit with the
Title Company releases or other appropriate instruments, in recordable form,
sufficient to cause the removal of such items from the Title Policy (as
hereinafter defined)), and Seller's failure to deliver such notice within
said two (2) business day period shall be deemed notice that Seller is
unable or unwilling to remove, cure or insure against the Defects. With
respect to Defects that Seller is unable or unwilling to so remove, cure or
insure against, Purchaser then shall elect, by giving written notice to
Seller and Escrow Company within two (2) business days thereafter, (x) to
terminate this Agreement, or (y) to waive its disapproval of such Defects,
in which case such Defects shall then be deemed to be Permitted Exceptions.
Purchaser's failure to give such notice shall be deemed an election to waive
the disapproval of any such Defect. If Purchaser elects to terminate this
Agreement in accordance with clause (x) above, the Deposit, plus all
interest accrued thereon, shall be immediately refunded to Purchaser, and
neither party shall have any further rights or obligations under this
Agreement, except for those obligations that are to survive the termination
of this Agreement, as expressly set forth elsewhere in this Agreement.
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(d) If Seller has elected to remove or cure any Defects, and
provision for their removal or cure by Closing has not been made to
Purchaser's reasonable satisfaction, Purchaser may elect, in its sole
discretion: (i) subject to satisfaction of the other conditions to Closing,
to close the purchase of the Property, and take title subject to any Defects
that have not been cured or removed at or before Closing (provided that such
election shall not release Seller from its obligation to cure or remove
Defects after the Closing, which obligation shall survive the Closing); (ii)
subject to satisfaction of the other conditions to Closing, to close the
purchase of the Property, cure or remove the Defects that have not been
cured or removed by Seller, and deduct from the Purchase Price all costs
reasonably and actually incurred by Purchaser in connection with its cure or
removal of any Defect that Seller was obligated to cure or remove; or (iii)
to terminate this Agreement, in which event the Deposit and all interest
accrued thereon shall be immediately returned to Purchaser, and neither
party shall have any further rights or obligations under this Agreement,
except for those obligations that are to survive the termination of this
Agreement, as expressly set forth elsewhere in this Agreement.
(e) In the event that reinsurance is required due to the amount of
the Purchase Price, Seller shall cause the Title Company to agree to
reinsure portions of the risk covered by the Title Policy with reinsurance
companies reasonably satisfactory to Purchaser under standard reinsurance
agreements providing, at a minimum, for direct access and enforcement of
rights by the insured party to and against the reinsurer. Any additional
cost or premium incurred to obtain such reinsurance shall be Purchaser's
expense.
5. PURCHASER'S DUE DILIGENCE.
(a) Purchaser acknowledges that as of the date hereof, except
for the condition of title, including matters of survey (which is governed
by Section 4), Purchaser has had the opportunity to investigate all physical
and economic aspects of the Property and to make all inspections and
investigations of the Property which Purchaser deems necessary or desirable
to protect its interests in acquiring the Property, including, without
limitation, the environmental condition of the Property, review of the
Leases (and the rights of the Tenants thereunder), building permits,
certificates of occupancy, investigation of land use and development rights,
development restrictions and conditions that are or may be imposed by
governmental agencies, agreements with associations affecting or concerning
the Property, engineering and structural tests, insurance contracts,
contracts for work in progress, marketing studies, cost-to-complete studies,
governmental agreements and approvals, architectural plans and site plans.
Purchaser has approved the results of the foregoing due diligence matters
and, therefore, shall have no right to terminate this Agreement with respect
to any due diligence matters, except as expressly set forth in Section 4.
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(b) To accommodate and facilitate Purchaser's investigations the
physical and economic aspects of the Property, Seller previously delivered
to Purchaser copies of the following documents relating to the Property (to
the extent the same were in Seller's possession or control):
(i) copies of all outstanding labor, service, equipment,
supply, management, maintenance, concession, utility and operating
contracts, and any amendments thereto, to which Seller is a party
(collectively, the "SERVICE CONTRACTS");
(ii) engineering and physical inspection reports including
hazardous materials and asbestos reports, if any;
(iii) a copy of the tax ▇▇▇▇ issued for the most recent year
for real estate taxes;
(iv) copies of all Leases;
(v) a list of all tenant security deposits and prepayments
(if any) related to the Leases held by or on behalf of Seller;
(vi) copies of all REAs;
(vii) copies of the agreements relating to the Repurchase
Right;
(viii) a copy of the Development Agreement; and
(ix) monthly income and expense statements, balance sheets
and any other financial information (excluding, however, any of Seller's
financial information analyzing the value of the Property) reflecting the
operations of the Property for the prior twelve (12) month period.
The foregoing deliveries were made by Seller to accommodate and
facilitate Purchaser's investigations relating to the Property, and, except
as expressly set forth herein, Seller has not made, and does not make any
representations or warranties of any kind regarding the accuracy or
thoroughness of the information contained in the materials delivered to
Purchaser. Notwithstanding the foregoing provisions of this Section 5(b),
any of the delivery items described above that are in files located at the
on-site management office at the Property, or are otherwise in the
possession of Manager (as hereinafter defined), shall be deemed to have been
delivered to Purchaser.
(c) Purchaser shall indemnify, defend, and hold harmless Seller and
Seller's partners, and each of their respective officers, directors,
shareholders, beneficiaries, members, partners, agents, employees and
attorneys, and their
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respective successors and assigns (collectively, the "Seller Parties"), from
and against all claims, actions, losses, liabilities, damages, costs and
expenses (including, but not limited to, reasonable attorneys' fees and
costs) incurred, suffered by, or claimed against the Seller Parties, or any
of them, by reason of any damage to the Property or injury to persons
proximately caused by Purchaser and/or its agents, representatives or
consultants in connection with any due diligence activities conducted on the
Property by or on behalf of Purchaser prior to the date hereof, but in no
event arising out of or against any condition existing on the Property and
discovered during such inspections and tests (except to the extent, but only
to the extent, such condition was exacerbated by Purchaser and/or its
agents, representations or consultants). The foregoing provisions shall
survive the Closing or any termination of this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the following matters
are true and correct as of the execution of this Agreement and will also be true
and correct as of the Closing:
(a) Seller is a general partnership, duly formed, validly existing
and in good standing under the laws of the State of Illinois. Each partner
of Seller is an entity duly formed or organized (as the case may be),
validly existing, and in good standing under the laws of its state of
formation or incorporation.
(b) This Agreement is, and all the documents executed by Seller
which are to be delivered to Purchaser at the Closing will be, duly
authorized, executed, and delivered by Seller, and is and will be legal,
valid, and binding obligations of Seller enforceable against Seller in
accordance with their respective terms (except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency, moratorium
and other principles relating to or limiting the right of contracting
parties generally), and does not and will not violate any provisions of any
agreement to which Seller is a party or to which it is subject.
(c) To Seller's actual knowledge, except as set forth in the
materials delivered to Purchaser pursuant to Section 5 above, there are no
pending legal proceedings or administrative actions of any kind or character
adversely affecting (or which, if a decision was rendered against Seller,
would adversely affect) Seller, the Property or Seller's interest therein.
In addition, Seller hereby notifies Purchaser of those matters described on
Annex I attached hereto.
(d) Except with respect to Environmental Laws (as defined below),
which are covered by Section 6(f) below, and except as set forth in the
materials delivered to Purchaser pursuant to Section 5 above, Seller has
received no written notice from any city, county, state or other government
authority of any violation of any statute, ordinance, regulation, or
administrative or judicial order or holding, whether or not
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appearing in public records, with respect to the Property, which violation
has not been corrected.
(e) Except as set forth in the materials delivered to Purchaser
pursuant to Section 5 above, Seller has received no written notice from any
city, county, state or other government authority (i) of any order or
directive requiring any work of repair, maintenance or improvement be
performed on the Property, or (ii) relating to defects in the Improvements
or relating to noncompliance with any applicable building code or
restriction that has not been corrected, or relating to any threat of
impending condemnation with respect to the Property.
(f) Except as set forth in the materials delivered to Purchaser
pursuant to Section 5 above, neither Seller nor, to Seller's actual
knowledge, any Tenant during Seller's ownership of the Property, has caused
or knowingly permitted any hazardous substance or material to be maintained,
disposed of, stored, released or generated on, under or at the Property or
any part thereof in violation of Environmental Laws (as hereinafter
defined). Seller has not received written notice from any governmental unit
or other person that it or the Property is not in compliance with any
Environmental Law, or that Seller has any liability with respect thereto.
There are no administrative, regulatory or judicial proceedings pending, and
Seller has received no written notice threatening any such proceeding, with
respect to the Property pursuant to, or alleging any violation of, any
Environmental Law. Except as set forth in the materials delivered to
Purchaser pursuant to Section 5 above, Seller has not installed any
underground or above ground storage tanks on, under or about the Property
and, to Seller's actual knowledge, no such tanks are located on or under the
Property, except that there is an above-ground fuel storage tank of
approximately 250 gallons located behind the maintenance shed on the
Property that was installed by a prior owner of the Property. As used
herein, the term "Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq.,
as amended by the Superfund Amendments and Reauthorization Act; the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as amended by
the Hazardous and Solid Waste Amendments of 1984; the Federal Insecticide,
Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et. seq.; the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 et seq.); the Emergency
Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001 et. seq.;
the Toxic Substance Control Act, 15 U.S.C. Section 2601 et. seq.; the Atomic
Energy Act, 42 U.S.C. Section 2011 et. seq.; the Clean Water Act, 33 U.S.C.
Section 1251 et. seq.; and the Clean Air Act, 42 U.S.C. Section 7401 et
seq.; and any comparable federal or state laws, regulations and ordinances.
Notwithstanding the foregoing representations and warranties, the acts (if
any) of Seller's past or current tenants shall not be imputed to Seller.
(g) To Seller's actual knowledge, and except as set forth in the
tenant estoppel certificates delivered to Purchaser pursuant to Section 9(a)
below, (i) the Leases are in full force and effect and have not been
modified, and (ii) there is no current default in the performance of the
obligations of any party under the Leases,
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except that ▇▇▇▇▇ Theatres has ceased operations in its premises and ceased
paying rent in violation of its Lease (and Seller has or will institute
legal proceedings against such Tenant as a result of such violation in
accordance with Section 21, below). As of the Closing Date, no rents due
under, or any other interest in, any of the Leases will be assigned to any
party other than Purchaser, or otherwise pledged or encumbered in any way.
To Seller's actual knowledge, there are no leases or occupancy agreements
with respect to the Property other than those delivered to Purchaser
pursuant to Section 5 hereof.
(h) To Seller's actual knowledge, and except as shown on the
Commitment, the REAs constitute the only reciprocal easement agreements or
operating agreements encumbering the Property. Each REA constitutes the
entire agreement between Seller and each other party thereto with respect to
the subject matter thereof, and Seller has not made any oral promises or
agreements amending or modifying the same. Except as set forth in the
estoppel certificates described in Section 9(a)(iv) below, the REAs are in
full force and effect and have not been modified, and Seller has received no
written notice alleging that Seller has defaulted in the performance of its
obligations under the REAs (which default has not been cured). As of the
Closing Date, no amounts due to Seller under, or any other interest of
Seller in, any REA will be assigned to any party other than Purchaser, or
otherwise pledged or encumbered in any way.
(i) None of the execution, delivery or performance of this Agreement
by Seller does or will violate, constitute a default under, result in an
acceleration of payments due or creation of any lien upon the Property or
require the approval or waiver of or filing with any governmental body,
agency or instrumentality under (i) the organizational documents of Seller
or its partners, or (ii) any judgment, decree, order, statute, injunction,
rule, regulation or the like of a governmental unit applicable to Seller or
its partners.
(j) To Seller's actual knowledge, and except as set forth in the
materials delivered to Purchaser pursuant to Section 5 above, (i) there have
been no material defaults by Seller or the other party to a Service Contract
which have not heretofore been cured, and (ii) there has been no written
claim received by Seller of any such default which has not heretofore been
cured. Seller has not entered into any oral promises or agreements amending
or modifying any Service Contracts. To Seller's actual knowledge, there are
no service contracts or maintenance agreements with respect to the Property
other than those delivered to Purchaser pursuant to Section 5 hereof.
(k) Seller has not filed or been the subject of any filing of a
petition under the Federal Bankruptcy Law or any federal or state insolvency
laws or laws for composition of indebtedness or for the reorganization of
debtors.
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(l) Seller has not received written notice that there is any uncured
violation of (i) any restriction, condition or agreement contained in any
easement, restrictive covenant or any similar recorded instrument or
agreement affecting the Property or any portion thereof, or (ii) any permit
or license applicable to the Property.
(m) All of the documents and Books and Records that have been
delivered or made available to Purchaser by Seller, are true, correct and
complete copies of the Books and Records in Seller's possession.
As used in this Agreement, the phrase "to Seller's actual knowledge"
or words of similar import shall mean the actual (and not constructive or
imputed) knowledge, without independent investigation or inquiry, of ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (and Seller represents that ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are the individuals with the primary responsibility for the sale
of the Property and for overseeing the management and operation of the
Property). The express representations and warranties made by Seller in this
Agreement shall not merge into any instrument or conveyance delivered at the
Closing; provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of such representations and warranties shall
be commenced, if at all, on or before the date which is one (1) year after the
date of the Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect. Seller shall have no liability with
respect to any of the foregoing representations and warranties to the extent
that, prior to the Closing, Purchaser discovers or learns of information (from
whatever source, including, without limitation, from the Manager, the tenant
estoppel certificates delivered pursuant to Section 9(a) below, as a result of
Purchaser's due diligence tests, investigations and inspections of the Property,
or written disclosure by Seller or Seller's agents and employees) that
contradicts any of the foregoing representations and warranties, or renders any
of the foregoing representations and warranties untrue or incorrect, and
Purchaser nevertheless consummates the transaction contemplated by this
Agreement.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER.
Purchaser represents and warrants to Seller that the following matters
are true and correct as of the execution of this Agreement and will also be true
and correct as of the Closing:
(a) Purchaser is a Delaware limited liability company, duly formed,
validly existing and in good standing under the laws of the State of
Delaware.
(b) This Agreement is, and all the documents executed by Purchaser
which are to be delivered to Seller at the Closing will be, duly authorized,
executed, and delivered by Purchaser, and is and will be legal, valid, and
binding obligations of Purchaser enforceable against Purchaser in accordance
with their respective terms (except to the extent that such enforcement may
be limited by applicable bankruptcy, insolvency, moratorium and other
principles relating to or limiting the right of
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contracting parties generally), and does not and will not violate any
provisions of any agreement to which Purchaser is a party or to which it is
subject.
(c) None of the execution, delivery or performance of this Agreement
by Purchaser does or will violate, constitute a default under, result in
acceleration of payments due or require the approval or waiver of or filing
with any governmental body, agency or instrumentality under (i) the
organizational documents of Purchaser, or (ii) any judgment, decree, order,
statute, injunction, rule, regulation or the like of a governmental unit
applicable to Purchaser.
(d) Except as otherwise expressly set forth in this Agreement, (or,
with respect to the period between the date hereof and Closing, set forth in
another writing made by Seller), (i) neither Seller, nor anyone acting for
or on behalf of Seller, has made any representation, warranty, promise or
statement, express or implied, to Purchaser, or to anyone acting for or on
behalf of Purchaser, concerning the Property or the condition, use or
development thereof, (ii) in entering into this Agreement, Purchaser has not
relied on any representation, warranty, promise or statement, express or
implied, of Seller, or anyone acting for or on behalf of Seller, (iii) all
matters concerning the Property have been or shall be independently verified
by Purchaser prior to the Closing, and Purchaser shall purchase the Property
on Purchaser's own prior investigation and examination of the Property (or
Purchaser's election not to do so); (iv) AS A MATERIAL INDUCEMENT TO THE
EXECUTION AND DELIVERY OF THIS AGREEMENT BY SELLER, PURCHASER IS PURCHASING
THE PROPERTY IN AN "AS IS" PHYSICAL CONDITION AND IN AN "AS IS" STATE OF
REPAIR, WITH ALL FAULTS, and (v) Purchaser waives, and Seller disclaims, all
warranties of any type or kind whatsoever with respect to the Property,
whether express or implied, including, by way of description but not
limitation, those of fitness for a particular purpose and use.
(e) Purchaser is not an employee benefit plan (a "Plan") subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code"), nor a person or entity acting, directly or indirectly, on behalf of
any Plan or using the assets of any Plan to acquire the Property, Purchaser
is not a "party in interest" (as that term is defined in Section 3(14) of
ERISA) with respect to any Plan that is an investor in Seller (as identified
in Exhibit G attached to this Agreement), and Purchaser's acquisition of the
Property will not constitute or result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code.
(f) No financing for this transaction shall be provided by Seller.
(g) Purchaser acknowledges that General Growth Properties, Inc. (an
affiliate of Purchaser) currently is the property manager for the Property
(and since Seller's acquisition of the Property in 1988 certain employees of
Manager have been the individuals responsible for the management of the
Property)(collectively, General
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Growth Properties, Inc. and such employees are herein referred to as the
"Manager"), with an on-site office at the Property. The Manager is and has
been responsible for the day-to-day operations and management of the
Property, including, without limitation, dealing with Tenants and subtenants
under the Leases, collecting rents and other amounts under the Leases,
coordinating maintenance, repairs and capital improvements of the Property
(including tenant improvements under the Leases and overseeing activities
under the Service Contracts), maintaining permits and licenses with respect
to the Property, preparing budgets, operating reports, rent rolls, schedules
and financial reports, and other similar responsibilities. Accordingly,
notwithstanding anything to the contrary set forth in this Agreement, (i)
matters known to the Manager shall not be attributed to Seller, and
Purchaser shall be deemed to have knowledge of all such matters, (ii) errors
in or omissions from any documents, reports or schedules (including, without
limitation, rent rolls or any schedules attached to this Agreement) prepared
by Manager shall not be attributed to Seller, and Seller makes no
representation or warranty with respect to the accuracy or completeness of
any information contained therein, (iii) breaches or defaults under the
Leases, the Service Contracts, the REAs or other documents relating to or
affecting the Property and resulting from the Manager's acts or omissions
shall not be attributable to Seller, and Seller shall have no liability to
Purchaser therefor, and (iv) Seller shall have no liability under this
Agreement with respect to any matter regarding the Property known to the
Manager.
The express representations and warranties made by Purchaser in this
Agreement shall not merge into any instrument or conveyance delivered at the
Closing; provided, however, that any action, suit or proceeding with respect to
the truth, accuracy or completeness of the representations and warranties
contained in Sections 7(a), 7(b), or 7(c) shall be commenced, if at all, on or
before the date which is one (1) year after the date of the Closing and, if not
commenced on or before such date, thereafter shall be void and of no force or
effect.
8. CONFIDENTIALITY.
Purchaser shall keep confidential the information contained in
the materials delivered or provided for inspection by Seller pursuant to Section
5 above and shall not disclose such information to any third parties, except
that Purchaser may provide such information to its lenders, consultants,
attorneys, direct and indirect partners, members or shareholders and prospective
investors in connection with Purchaser's acquisition of the Property (provided
that Purchaser shall instruct the aforesaid parties to maintain the
confidentiality of such information). If the transaction contemplated by this
Agreement is not consummated for any reason, Purchaser promptly shall return to
Seller, and instruct its representatives, consultants, attorneys, and
prospective investors to return to Seller, all copies and originals of
information and materials previously provided for inspection by Seller to
Purchaser. The provisions of this Section 8 shall survive any termination of
this Agreement. This Section 8 shall cease to apply to Purchaser upon the
Closing of the purchase and sale contemplated by this Agreement.
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9. CONDITIONS PRECEDENT TO CLOSING.
(a) The following shall be conditions precedent to Purchaser's
obligation to consummate the purchase and sale transaction contemplated
herein (the "Purchaser's Conditions Precedent"):
(i) Purchaser shall not have terminated this Agreement in
accordance with Section 4, Section 16(a) or Section 16(b) of this Agreement
within the time periods described in said Sections.
(ii) Title Company shall stand ready to issue, at the
Closing, an ALTA Form B 1970 Owner's Policy of Title Insurance (the "Title
Policy"), dated the date and time of Closing and with policy coverage in the
amount of the Purchase Price, insuring Purchaser as owner of good,
marketable and indefeasible fee title to the Property, subject only to the
Permitted Exceptions, and affirmatively insuring as a part of Schedule A to
such title policy Purchaser's rights under the REAs or other appurtenant
easements that benefit the Real Property and containing the following
endorsements: an extended coverage endorsement over the general exceptions
contained in the policy, an endorsement insuring against loss of title to
the Property or the inability of the owner of the Property to maintain the
improvements now located on the Property by reason of a violation of a
covenant, condition or restriction of record affecting the Property, a
location endorsement insuring the accuracy of the Survey, an endorsement
insuring legal access to the Property from each of the streets bordering on
the Property, and insuring that all such streets are dedicated public
streets, a contiguity endorsement, a zoning 3.1 endorsement including
coverage over parking, a tax parcel endorsement, a utility facility
endorsement and such other endorsements reasonably requested by Purchaser.
(iii) Purchaser shall have received and reasonably approved,
within two (2) days after the delivery thereof, executed estoppel
certificates substantially in the form of Exhibit D hereto from each of the
Major Tenants and from Tenants occupying the leasable space in the
Improvements which is leased as of the date of this Agreement; provided,
however, that if the form of estoppel certificate attached hereto as Exhibit
D requests information in addition to or different than that required to be
given pursuant to a Tenant's Lease, this condition will be satisfied for
such Tenant(s) if such Tenant(s) executes an estoppel certificate in the
form required pursuant to its Lease. If Seller is unable to obtain an
estoppel certificate from all Tenants (the Tenants from whom estoppel
certificates have not been obtained, the "Missing Tenants"), but has
obtained an estoppel certificate from all Major Tenants, then, in lieu
thereof, Seller may satisfy this Condition Precedent by providing to
Purchaser a certificate pertaining to each Missing Tenant (each a "Seller's
Certificate"), covering the same matters that would have been set forth in
the Missing Tenant's estoppel certificate (and if, after the Closing, Seller
delivers to Purchaser or Manager obtains a tenant estoppel certificate from
a Missing Tenant for whom Seller executed a Seller's Certificate at the
Closing, then Seller thereafter shall
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be released from said Seller's Certificate). Subject to the preceding
sentence, Seller's liability in connection with any Seller's Certificate
shall not merge into any instrument or conveyance delivered at the Closing;
provided, however, that any action, suit or proceeding with respect to the
truth, accuracy or completeness of any Seller's Certificate shall be
commenced, if at all, on or before the date which is one (1) year after the
date of the Closing and, if not commenced on or before such date, thereafter
shall be void and of no force or effect. Prior to the Closing, Seller shall
reasonably cooperate with Purchaser or Purchaser's lender in Purchaser's
efforts to obtain subordination and non-disturbance agreements ("SNDAs")
from Tenants; provided, however, that Purchaser's (or its lender's) receipt
of such SNDAs shall not be a Condition Precedent to Closing.
(iv) Purchaser shall have received and reasonably approved,
within two (2) days after the delivery thereof, (i) executed estoppel
certificates substantially in the form of Exhibit F hereto from all parties
to the REAs (other than Seller or its predecessors or affiliates), provided,
however, that if the form of estoppel certificate attached hereto as Exhibit
F requests information in addition to or different than that required to be
given pursuant to an REA, this condition will be satisfied if Purchaser
receives an estoppel certificate in the form required pursuant to such REA,
and (ii) a written assurance from ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company ("Field"),
reasonably satisfactory to Purchaser, stating that Field's right of first
refusal granted in that certain Supplement to Operating Agreement and Joint
Improvement Agreement dated April 21, 1981, by and between Homart and Field
shall not apply to the purchase and sale of the Property contemplated herein
or to the acquisition of the Property by Purchaser's lender by foreclosure
or deed in lieu of foreclosure.
(v) There shall be no material breach of any of Seller's
representations, warranties or covenants set forth in Section 6 and Section
10, as of the Closing, and Seller shall have complied, in all material
respects, with the covenants and agreements to be complied with or performed
by Seller on or before Closing.
(vi) Seller shall have delivered to the Escrow Company the
items described in Section 11.
(vii) At Closing, there shall be no litigation, including any
arbitration, investigation or other proceeding, pending by or before any
court, arbitrator or governmental authority, nor any decree, order or
injunction issued by any such court, arbitrator or governmental authority
and remaining in effect, which does or seeks to prevent or hinder the timely
consummation of the Closing or materially and adversely affects the Property
(except for the ▇▇▇▇▇ Litigation and any decree, order or injunction entered
in connection therewith).
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(viii) The Releases/Directions (as hereinafter defined) shall
have been obtained.
(ix) Purchaser, Seller and/or Escrow Company shall have
received a fully executed and acknowledged Broker's Waiver of Lien and
Broker's Affidavit in the form attached hereto as Exhibit H from the
broker(s) identified in Section 18 below.
(x) No event or condition shall have occurred and continue
to exist on the Closing Date which would materially limit or impair the
availability of utility services to the Property (and temporary
interruptions of utility services for purposes of repairs or maintenance
shall not be considered a material limitation or impairment).
The conditions set forth in this Section 9(a) are solely for
the benefit of Purchaser and may be waived only by Purchaser. Purchaser
shall, at all times prior to the termination of this Agreement, have the
right to waive any of these conditions.
(b) The following shall be conditions precedent to Seller's
obligation to consummate the purchase and sale transaction contemplated
herein (the "Seller's Conditions Precedent"):
(i) Purchaser shall not have terminated this Agreement in
accordance with Section 4, Section 16(a) or Section 16(b) of this Agreement
within the time periods described in said Sections.
(ii) Purchaser shall have delivered to Escrow Company, prior
to the Closing, for disbursement as directed hereunder, all cash or other
immediately available funds due from Purchaser in accordance with this
Agreement.
(iii) There shall be no material breach of any of Purchaser's
representations, warranties or covenants set forth in Section 7 as of the
Closing.
(iv) Purchaser shall have delivered to Escrow Company the
items described in Section 12.
(v) On or before five (5) business days after the execution
of this Agreement, Seller shall have obtained final approval of the
transaction contemplated by this Agreement from Seller's Investment
Committee. If Seller notifies Purchaser in writing that it has not received
said approval or if Seller fails to notify Purchaser of said approval, this
Agreement shall terminate and any money or documents in escrow shall be
returned to the party depositing the same, and neither party shall have any
further rights or obligations under this Agreement, except for those
obligations that are to survive the termination of this Agreement, as
expressly set forth elsewhere in this Agreement.
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(vi) Seller shall have received a fully executed letter in
the form attached hereto as Exhibit G from the broker(s) identified in
Section 18 below, which letter Seller covenants to use reasonable efforts to
obtain by not later than fifteen (15) days prior to the Closing.
(vii) Purchaser, Seller and/or Escrow Company shall have
received a fully executed and acknowledged Broker's Waiver of Lien and
Broker's Affidavit in the form attached hereto as Exhibit H from the
broker(s) identified in Section 18 below.
(viii) Seller and/or Escrow Company shall have received a
fully executed and acknowledged Property Manager's Waiver of Lien and
Property Manager's Affidavit from Manager in the form attached hereto as
Exhibit I.
(ix) Purchaser shall have either approved or waived the
Purchaser's Conditions Precedent set forth in Section 9(a)(iii) and Section
9(a)(iv) within the time periods specified therein.
The conditions set forth in this Section 9(b) are solely for the
benefit of Seller and may be waived only by Seller. Seller shall, at all
times prior to the termination of this Agreement, have the right to waive
any of these conditions.
10. COVENANTS OF SELLER.
Seller covenants with Purchaser, as follows:
(a) After the date hereof and prior to the Closing, no part of the
Property, or any interest therein, will be sold, encumbered or otherwise
transferred without Purchaser's consent, nor shall Seller engage in
negotiations or discussions with, or otherwise solicit or assist, any third
party relating to the acquisition by such third party of the Property or the
equity interests in Seller.
(b) After the date hereof and prior to the Closing, Seller shall not
enter into any new Leases, or amend, modify or extend any existing Leases in
any case without the prior written consent of Purchaser (which consent shall
not be unreasonably withheld and shall be granted or denied within five (5)
business days after Seller's request therefor, provided that Seller shall
provide Purchaser with a copy of any such proposed document). Purchaser's
failure to respond within such five (5) business day period shall be deemed
Purchaser's approval of the new lease or amendment, modification or
extension of the existing Lease, as applicable. If Purchaser consents to any
such new Lease, or to the amendment, modification or extension of any
existing Lease, then, if the transaction contemplated by this Agreement is
consummated, Purchaser shall be solely responsible for the payment of all
leasing commissions in connection therewith and any tenant improvement costs
or allowance, move-in allowance and any other payment to the Tenant
thereunder
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(whether coming due prior to the Closing, if the transaction contemplated by
this Agreement closes, in which case any such amount shall be payable to
Seller at Closing, or after the Closing). Nothing in this Section 10(b)
shall affect Seller's right to terminate or permit the assignment of the
▇▇▇▇▇ Lease (as defined in Section 21 below) in accordance with such Section
21.
(c) Until the Closing, Seller shall keep the Property insured
against fire, vandalism and other loss, damage and destruction, provided,
however, that Seller's insurance policies shall not be assigned to Purchaser
at the Closing, and Purchaser shall be obligated to obtain its own insurance
coverage from and after the Closing.
(d) Until the Closing, Seller shall operate and maintain the
Property in the manner being operated and maintained on the date of this
Agreement.
(e) From the date hereof until the Closing, Seller shall (i) pay its
debts (or in good faith contest the same) and perform its obligations with
respect to the Property as they become due; (ii) without the express written
consent of Purchaser (which consent shall not be unreasonably withheld or
delayed), not (A) consent to any assignment of or sublease in respect of, or
knowingly waive any material right under, any Lease, (B) cancel or terminate
any Lease or take any action to enforce any Lease which would have the
effect of cancelling or terminating the same, (C) enter into a new
reciprocal easement or similar agreement or amend or modify, consent to the
assignment of or knowingly waive any material right under the REAs, the
Repurchase Right or the Development Agreement, (D) make any alterations to
the Property (except pursuant to agreements in effect as of the date hereof)
or enter into any new contracts or extend or renew or cancel any contract
relating to capital expenditures, (E) enter into any other new contracts or
extend, renew or cancel, consent to the assignment of or waive any material
right under any other contract, except for contracts executed in the
ordinary and usual course and business and in accordance with past practices
and policies which can be terminated without penalty or payment upon not
more than thirty (30) days prior notice, (F) consent to, authorize or
approve any change in zoning or similar land use classification for the Land
or any part thereof or any special assessments not heretofore confirmed with
respect to the Land, and (G) otherwise take any action which would render
inaccurate any of the representations or warranties made by Seller in this
Agreement; (iii) promptly deliver to Purchaser copies of any notices
received by Seller from any person, firm, corporation or governmental agency
alleging any default on the part of Seller under any Lease, contract or
agreement relating to the Property, or any part thereof, or any violation of
any applicable law or ordinance; and (iv) promptly advise Purchaser in
writing of any pending or threatened litigation, administrative proceeding
or condemnation proceeding brought against Seller or the Property.
(f) If, under applicable law, any notification may be required to be
given to, or a clearance may be required to be obtained from, any state or
local taxing authorities in order to permit the transfer of the Property as
herein contemplated
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without a lien attaching to the assets transferred or liability being
incurred by Purchaser for any state or local taxes required to be paid or
collected by Seller relating to periods prior to the Closing Date, Seller
shall obtain appropriate clearances or releases (and/or statements that no
clearances or releases are required) from the applicable taxing authorities
or, if not available, Seller shall deposit with Purchaser the amount as
directed by the applicable taxing authorities (such clearances or releases
or directions, the "RELEASES/DIRECTIONS"), and Purchaser shall hold such
amount until it receives the release or clearance therefor, whereupon
Purchaser shall pay to Seller such amount; provided, however, if the
delivery of a clearance or release is subject to a demand for payment of all
or a portion of the amount held to any taxing authority, Purchaser shall be
authorized and directed to pay such sums in accordance with the demand and
to pay the balance, if any, to Seller.
(g) Provided that the transaction contemplated by this Agreement is
consummated, Seller agrees that the partners comprising Seller shall
collectively maintain a minimum net worth in the aggregate amount of at
least Three Million Dollars ($3,000,000) until the later to occur of (i)
thirteen (13) months from the date of the Closing, and (ii) the expiration
or satisfaction (as applicable) of all of Seller's obligations under Section
21 below. This covenant shall survive the Closing.
11. SELLER'S CLOSING DELIVERIES.
At least one (1) business day prior to the Closing, Seller shall
deliver or cause to be delivered to the Chicago, Illinois office of the Escrow
Company the following (collectively, the "SELLER CLOSING DOCUMENTS"):
(a) A Special Warranty Deed executed by Seller, in the form of
Exhibit J attached hereto, conveying the Real Property to Purchaser free and
clear of all claims, liens and encumbrances except the Permitted Exceptions
and matters arising by or through Purchaser (the "SPECIAL WARRANTY DEED").
(b) A ▇▇▇▇ of Sale executed by Seller, in the form of Exhibit K
attached hereto, conveying to the Purchaser title to the Personal Property
(the "▇▇▇▇ OF SALE").
(c) An affidavit in the form of Exhibit L attached hereto,
certifying that Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code (the "CERTIFICATE OF NON-FOREIGN STATUS").
(d) An Assignment executed by Seller, in the form of Exhibit M
attached hereto, assigning to Purchaser those Service Contracts which
Purchaser has elected to take an assignment of and any warranties,
guaranties and indemnities relating to the Property, to the extent that such
items are assignable (the "ASSIGNMENT").
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(e) An Assignment or Assignments of Leases executed by Seller, in
the form of Exhibit N attached hereto, assigning to Purchaser all of
Seller's interest under the Leases and the security deposits thereunder (the
"ASSIGNMENT OF LEASES"); provided, however, that to the extent Leases or
memoranda thereof have been recorded in appropriate land records, such
assignment shall be in form suitable for recording.
(f) An Assignment of Reciprocal Easement Agreements executed by
Seller, in the form of Exhibit O attached hereto, assigning to Purchaser all
of Seller's interest under the REAs (the "ASSIGNMENT OF REAS").
(g) An Assignment of Repurchase Right executed by Seller in the
form of Exhibit P attached hereto, assigning to Purchaser all of Seller's
interest in the Repurchase Right (the "ASSIGNMENT OF REPURCHASE RIGHT").
(h) An Assignment of Development Agreement executed by Seller in the
form of Exhibit Q attached hereto, assigning to Purchaser all of Seller's
interest in the Development Agreement (the "ASSIGNMENT OF DEVELOPMENT
AGREEMENT").
(i) A release of the Tenancy in Common Agreement in the form of
Exhibit R.
(j) The Releases/Directions.
(k) Such certificates as Purchaser may reasonably request as to the
authorization on the part of Seller of the execution, delivery and
performance of this Agreement and the authority of the persons executing and
delivering this Agreement and the Seller Closing Documents on behalf of
Seller.
(l) A written certificate executed on behalf of Seller and addressed
to Purchaser to the effect that all of the representations and warranties of
Seller herein contained are true and correct in all material respects as of
the Closing Date with the same force and effect as though remade and
repeated in full on and as of the Closing Date, or stating the specific
respects, if any, in which any of the representations and warranties are
untrue or incorrect.
(m) Written notices (i) to the other parties to the REAs advising
them of the change of ownership and directing them to pay any charges under
the REAs from and after the Closing as directed by Purchaser; (ii) to the
Tenants advising them of the change of ownership and directing them to pay
rent and other charges under their respective Leases from and after the
Closing as directed by Purchaser; (iii) to the other party under each of the
Service Contracts advising of the transfer and assignment of Seller's
interest in the Service Contracts to Purchaser and directing that future
inquiries be made directly to Purchaser; (iv) to the other party to the
documents creating the Repurchase Right advising it of the change of
ownership; and
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(v) to the other party to the Development Agreement advising it of the
change of ownership.
(n) To the extent in Seller's possession, original Leases and the
REAs, together with all records, books of account and papers in Seller's
possession relating to the construction, ownership and operations of the
Property, including without limitation, architect's drawings, blue prints
and as-built plans, maintenance logs, copies of warranties and guaranties,
licenses and permits, instruction books, records and correspondence relating
to insurance claims, financial statements, operating budgets, paper and
electronic media copies of data and other information relating to the
Property available from personal computers, structural, mechanical,
geotechnical or other engineering studies, soil test reports, environmental
reports, underground storage tank reports, feasibility studies, ADA surveys
or reports, asbestos surveys, marketing studies, mall documents and
compilations, lease summaries and originals and/or copies of the Development
Agreement, documents relative to the Repurchase Right and the Service
Contracts and correspondence related thereto (collectively, the "BOOKS AND
RECORDS").
(o) Keys and combinations to locked compartments within the
Property.
(p) The instruments, documents or certificates as are customarily
required by the Title Company to be executed or provided by Seller as a
condition to the issuance of the Title Policy at the Closing pursuant to the
Title Commitment, including, without limitation, owner's affidavits,
mechanics' lien affidavits, personal undertakings and ALTA Statements.
(q) Any instruments, documents or certificates required to be
executed by Seller with respect to any state, county or local transfer taxes
applicable to the conveyance of the Property pursuant to this Agreement.
(r) An Environmental Disclosure Document For Transfer of Real
Property, executed by Seller, in the form provided by the Title Company for
compliance with the Illinois Responsible Property Transfer Act of 1988, 756
ILCS 90/1 et seq. Purchaser acknowledges that it is aware of the purpose and
intent of such document and, pursuant to 756 ILCS 90/4(b), waives its right
to receive such document not less than thirty (30) days prior to the
Closing.
(s) Such other documents, instruments or agreements which Seller is
required to deliver to Purchaser pursuant to the other provisions of this
Agreement or which are reasonably necessary in order to consummate the
transactions set forth herein.
12. PURCHASER'S CLOSING DELIVERIES.
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At least one (1) business day prior to the Closing, Purchaser shall
deliver to the Chicago, Illinois office of the Escrow Company (collectively, the
"PURCHASER CLOSING DOCUMENTS"):
(a) The balance of the Purchase Price, together with such other sums
as Escrow Company shall require to pay Purchaser's share of the Closing
costs, prorations, reimbursements and adjustments as set forth in Sections
13 and 15 herein, in immediately available funds.
(b) Executed counterparts of the Assignment, the Assignment of
Leases, the Assignment of REAs, the Assignment of Repurchase Right and the
Assignment of Development Agreement, whereby Purchaser shall assume the
obligations relating to the matters set forth in such documents.
(c) A certificate stating that, as of the Closing, Purchaser had the
opportunity to investigate all physical and economic aspects of the Property
and to make all inspections and investigations of the Property which
Purchaser deemed necessary or desirable to protect its interests in
acquiring the Property, including, without limitation, review of the Leases
(and the rights of the Tenants thereunder), building permits, certificates
of occupancy, environmental audits and assessments, toxic reports, surveys,
investigation of land use and development rights, development restrictions
and conditions that are or may be imposed by governmental agencies,
agreements with associations affecting or concerning the Property, the
condition of title, soils and geological reports, engineering and structural
tests, insurance contracts, contracts for work in progress, marketing
studies, cost-to-complete studies, governmental agreements and approvals,
architectural plans and site plans; provided that such certification shall
not be deemed to limit any of Seller's express representations and
warranties herein.
(d) Such other documents, instruments or agreements which Purchaser
may be required to deliver to Seller pursuant to the other provisions of
this Agreement or which are reasonably necessary to consummate the
transactions set forth herein.
13. PRORATIONS AND ADJUSTMENTS.
(a) Except as set forth in this Section 13, all items of income and
expense which accrue for the period prior to the Closing Date will be for
the account of Seller and all items of income and expense which accrue for
the period on and after the Closing Date will be for the account of
Purchaser.
(b) For purposes of calculating prorations, Purchaser shall be
deemed to be in title to the Property, and, therefore, entitled to the
income therefrom and responsible for the expenses thereof for the entire day
upon which the Closing occurs. All such prorations shall be made (i) on the
basis of the actual number of days of the month which shall have elapsed as
of the day of the Closing and based upon the
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actual number of days in the month and a three hundred sixty-five (365) day
year, and (ii) using the accrual basis of accounting in accordance with
generally accepted accounting principles. The amount of such prorations
shall be initially performed by Seller and Purchaser at Closing but, except
as set forth below, shall be subject to adjustment in cash after the Closing
outside of escrow as and when complete and accurate information becomes
available, if such information is not available at the Closing. Seller and
Purchaser shall cooperate and use their best efforts to make such
adjustments no later than sixty (60) days after the Closing (except with
respect to real estate taxes prorated pursuant to subsection (i), below,
which shall be adjusted within sixty (60) days after the tax bills for the
applicable period are received). The following shall be prorated and
adjusted between Seller and Purchaser as of the day of the Closing, except
as otherwise specified:
(i) TAXES. General real estate, personal property and ad
valorem taxes and assessments, and any improvement or other bonds
encumbering the Property, accrued but not yet due and payable as of the
Closing. In the event that the actual amount of such taxes is not known
at the Closing, such proration shall initially be based on the most
recently ascertainable taxes and shall be adjusted within sixty (60)
days after the tax bills for the applicable period are received.
(ii) OPERATING EXPENSES.
(A) All utility expenses for gas, water, electricity,
heat, fuel, sewer and other utilities relating to the Property
which accrue through the day before the Closing shall be the
responsibility of Seller, and shall be prorated based on final
readings done as of the day before the Closing. Purchaser shall
be responsible for all such utility expenses accruing on and
after the Closing, and there shall be no other proration of such
utility expenses.
(B) All insurance premiums under Seller's existing
policies relating to the Property shall be Seller's
responsibility through the day before the Closing, and there
shall be no proration of such insurance premiums; none of
Seller's insurance policies (or any proceeds payable thereunder,
except as expressly provided for in Section 16 below) will be
assigned to Purchaser at the Closing, and Purchaser shall be
solely obligated to obtain any and all insurance that it deems
necessary or desirable.
(C) All payments accruing under the Service Contracts
shall be the responsibility of Seller through the last day of
the calendar month in which the Closing occurs, with Purchaser
responsible for all amounts thereafter accruing under the
Service Contracts, and there shall be no other proration of
amounts payable under the Service Contracts.
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(D) Any other expenses associated with operating the
Property shall be prorated as of the Closing based on bills
available as of the Closing, with Seller responsible for those
expenses which accrue for the period prior to the Closing Date,
and Purchaser responsible for those expenses which accrue for
the period on and after the Closing Date, and there shall be no
other proration of such other expenses associated with operating
the Property.
(iii) OPERATING REVENUES. Seller shall receive a credit at
the Closing in an amount equal to the "Pre-Closing Allocable Share" (as
defined below) of:
(A) amounts accruing and payable under the Leases and REAs with
respect to calendar year 1997 as "pass-throughs" or
reimbursements for common area maintenance costs and other
operating expenses relating to the Property (other than taxes
and assessments and insurance premiums), increased by 3%, plus
(B) amounts accruing and payable under the Leases and REAs with
respect to calendar year 1997 as "pass-throughs" or
reimbursements for insurance premiums,
less (in each case) amounts accruing with respect to calendar year 1998
for such matters actually received by Seller as of the Closing.
Thereafter, all amounts received by Purchaser with respect to such
items accruing with respect to calendar year 1998 shall belong to
Purchaser. As used in this Section 13, the "PRE-CLOSING ALLOCABLE
SHARE" will be a fraction, the numerator of which is the number of days
in calendar year 1998 occurring up to but not including the Closing and
the denominator of which is 365. There will be no reconciliation or
adjustment after the Closing for the foregoing matters, other than to
correct any manifest error in the calculation of prorations that is
discovered after the Closing.
(iv) MINIMUM RENT. Fixed minimum rent or payments
("Minimum Rent") under the Leases or REAs (to the extent such monies
have actually been collected by Seller). Minimum Rents which are
delinquent as of the Closing shall not be prorated, and Minimum Rents
received during the "Post Closing Rent Adjustment Period" (as
hereinafter defined) by Purchaser from a Tenant owing such delinquent
Minimum Rent shall be applied (A) first, to Purchaser's actual
out-of-pocket costs of collection incurred with respect to such Tenant;
(B) second, to Minimum Rents due from such Tenant for the month in
which such payment is received by Purchaser; (C) third, to Minimum
Rents attributable to any period after the Closing which are past due
on the date of receipt; and (D) finally, to Minimum Rents delinquent as
of the Closing (and Purchaser promptly shall remit such amounts to
Seller).
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Purchaser agrees that during the Post Closing Rent Adjustment Period,
it shall use commercially reasonable efforts to collect any such
delinquent Minimum Rents (provided, however, that Purchaser shall have
no obligation to institute legal proceedings, including an action for
unlawful detainer, against a tenant owing delinquent Minimum Rents).
Following the expiration of the Post Closing Rent Adjustment Period, if
any Tenant which is no longer in occupancy of its premises at the
Property still owes Minimum Rents relating to the period prior to
Closing, Purchaser shall reassign to Seller the right to collect such
Minimum Rents. As used herein, the term "Post Closing Rent Adjustment
Period" shall mean the period of time commencing on the Closing Date
and expiring on the date on which real estate taxes are reprorated
pursuant to Section 13(b)(i) above.
(v) TAX RECOVERIES. Charges under the Leases or REAs with
respect to the payment of real estate taxes ("Tax Recoveries") accruing
prior to Closing shall be credited to Seller (to the extent such monies
have actually been collected by Seller). Tax Recoveries which are
delinquent as of the Closing shall not be prorated, and Tax Recoveries
received by Purchaser prior to the time real estate taxes are
reprorated between Seller and Purchaser from a Tenant owing such
delinquent Tax Payment shall be applied (A) first, to Purchaser's
actual out-of-pocket costs of collection incurred with respect to such
Tenant; (B) second, to Tax Recoveries due from such Tenant for the
month in which such payment is received by Purchaser; (C) third, to Tax
Recoveries attributable to any period after the Closing which are past
due on the date of receipt; and (D) finally, to Tax Recoveries
delinquent as of the Closing (and Purchaser promptly shall remit such
amounts to Seller). Notwithstanding the foregoing, Seller and Purchaser
acknowledge that invoices with respect to Tax Recoveries for calendar
year 1997 were recently delivered to the Tenants and, therefore, any
amounts paid to Purchaser by any Tenants after the Closing that are
identified as payment of the 1997 Tax Recoveries shall be promptly
remitted by Purchaser to Seller without any deduction or offset.
Purchaser agrees that, prior to the time real estate taxes are
reprorated between Seller and Purchaser, it shall use commercially
reasonable efforts to collect any such delinquent Tax Recoveries
(provided, however, that Purchaser shall have no obligation to
institute legal proceedings, including an action for unlawful detainer,
against a tenant owing delinquent Tax Recoveries). All amounts prorated
under this Section 13(b)(v) shall be reprorated at such time as real
estate taxes are reprorated pursuant to Section 13(b)(i) hereof.
(vi) PERCENTAGE RENTALS. All percentage and overage rentals
under the Leases ("PERCENTAGE RENTALS") accruing for any lease year
ending before the Closing shall be allocated entirely to Seller. With
respect to Percentage Rentals accruing under the Leases for calendar
year 1998, the total amount of Percentage Rentals which accrued for
calendar year 1997 shall be the basis for prorations at the Closing,
with Seller to receive a credit for an amount equal to
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the Pre-Closing Allocable Share of such Percentage Rentals, less the
amount of any estimated or other payments of Percentage Rentals
accruing for calendar year 1998 actually received by Seller as of the
Closing. Purchaser shall be entitled to the balance of Percentage
Rentals accruing for calendar year 1998 not credited to Seller pursuant
to this section. There will be no reconciliation or adjustment after
the Closing for the proration of Percentage Rentals, other than to
correct any manifest error in the calculation of such proration that is
discovered after the Closing.
(vii) SECURITY DEPOSITS. The amount of all unapplied security
deposits under the Leases (together with any interest to be paid
thereon) shall be credited to Purchaser; provided, however, that if any
tenant security deposit is in the form of a letter of credit,
promissory note or similar instrument, Seller shall use its best
efforts to cause such letter of credit, promissory note or other
instrument to be assigned and transferred to Purchaser no later than
sixty (60) days after the Closing, and there shall be no credit against
the Purchase Price at the Closing with respect to any such tenant
security deposit.
(c) Without limiting the generality of the foregoing, Seller and
Purchaser agree that, with respect to any property tax appeals or
reassessments filed by Seller for tax years accruing prior to the year in
which the Closing occurs, Seller shall be entitled to the full amount of any
refund or rebate resulting therefrom (subject to any requirement under the
Leases to pay to the Tenants a share of any such refund or rebate, which
shall be Seller's sole obligation), and with respect to any property tax
appeals or reassessments filed by Seller for the tax year in which the
Closing occurs (which taxes are payable in the year following the year in
which the Closing occurs), Seller and Purchaser shall share the amount of
any rebate or refund resulting therefrom (after first paying to Seller all
costs and expenses incurred by Seller in pursuing such appeal or
reassessment) in proportion to their respective periods of ownership of the
Property for such tax year (with Seller and Purchaser each obligated for any
amount of such refund or rebate required to be paid to the Tenants for its
respective period of ownership of the Property for such tax year).
(d) The provisions of this Section 13 shall survive the Closing.
14. CLOSING.
The purchase and sale contemplated herein shall close (the "CLOSING")
on August 31, 1998 or on such other date mutually agreed to by the parties
(the "CLOSING DATE"). Notwithstanding the foregoing, Purchaser may elect to
extend the Closing Date until September 15, 1998, provided, Purchaser (i)
provides Seller written notice of such election no later than 5:00 p.m.
eastern standard time, August 25, 1998 and (ii) deposits the Additional
Deposit in escrow with the Escrow Company if and when required pursuant to
Section 3(b) above. As used herein, the term "Closing" means the date and
time that Seller's Special Warranty Deed is recorded in the Official
Records.
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15. CLOSING COSTS.
Seller shall pay any documentary transfer tax due in connection with
the consummation of the transaction contemplated herein, the premium for the
Title Policy (including the cost of title curative endorsements which Seller
elects to obtain pursuant to Section 4 above) equal to the amount of a standard
coverage owner's policy, costs of the Survey other than those costs to be paid
by Purchaser pursuant to the immediately following sentence, all costs of
recording any releases and fifty percent (50%) of all other escrow and closing
costs. Purchaser shall pay all costs and expenses incurred in connection with
obtaining any financing for the purchase of the Property, including title,
escrow, documentation and appraisal costs relating thereto, any additional title
insurance premium payable in connection with Purchaser obtaining an extended
coverage owner's policy and any lender's policy of title insurance, the cost of
any title endorsements which are not title curative endorsements pursuant to
Section 4 above (including, without limitation, the endorsements described in
Section 9(a)(ii) above), any reinsurance of the risk covered by the Title
Policy, all costs of the Survey up to $17,100 plus any costs of altering or
updating the Survey to satisfy requirements of Purchaser's lender, the fee for
recording the Special Warranty Deed and any other documents Purchaser elects to
record in the Official Records, and fifty percent (50%) of all other escrow and
closing costs. Each party shall bear the expense of its own counsel. If the sale
of the Property contemplated hereunder does not occur because of a default by
Purchaser, all escrow cancellation and title fees shall be paid by Purchaser; if
the sale of the Property does not occur because of a default by Seller, all
escrow cancellation and title fees shall be paid by Seller; if the sale of the
Property contemplated hereunder does not occur because of the failure of a
Seller's Condition Precedent or a Purchaser's Condition Precedent, in each case
other than due to default, Seller and Purchaser shall each pay one-half of the
escrow cancellation and title fees.
16. RISK OF LOSS.
(a) If prior to the Closing, the Improvements, or any part thereof,
are materially damaged (as set forth in Section 16(d)), Purchaser shall have
the right, exercisable by giving written notice to Seller within twenty (20)
days after receiving written notice of such damage or destruction (but in
any event prior to the Closing), either (i) to terminate this Agreement, in
which case any money (including, without limitation, the Deposit and all
interest accrued thereon) or documents in escrow shall be returned to the
party depositing the same, and neither party shall have any further rights
or obligations under this Agreement, except for those obligations that are
to survive the termination of this Agreement, as expressly set forth
elsewhere in this Agreement, or (ii) to accept the Property in its then
condition and to proceed with the Closing without any abatement or reduction
in the Purchase Price (other than a credit for any deductible or any
insurance proceeds received by Seller prior to Closing, less Seller's actual
out-of-pocket expenses incurred to obtain such insurance proceeds) and
receive an assignment of all of Seller's right to any insurance proceeds
payable by reason of such damage or destruction. A failure by Purchaser to
notify Seller in writing within such twenty (20) day period shall be deemed
an election to proceed
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under clause (ii) above. If Purchaser elects (or is deemed to elect) to
proceed under clause (ii) above, Seller shall not compromise, settle or
adjust any claims to such proceeds without Purchaser's prior written
consent.
(b) If prior to the Closing, all or any material portion (as set
forth in Section 16(d)) of the Property is subject to a taking by public
authority, Purchaser shall have the right, exercisable by giving written
notice to Seller within twenty (20) days after receiving written notice of
such taking (but in any event prior to the Closing), either (i) to terminate
this Agreement, in which case any money (including, without limitation, the
Deposit and all interest accrued thereon) or documents in escrow shall be
returned to the party depositing the same, and neither party shall have any
further rights or obligations under this Agreement, except for those
obligations that are to survive the termination of this Agreement, as
expressly set forth elsewhere in this Agreement, or (ii) to accept the
Property in its then condition, without any abatement or reduction in the
Purchase Price (other than a credit for any award received by Seller prior
to Closing, less Seller's actual out-of-pocket expenses incurred to obtain
such award), and receive an assignment of all of Seller's rights to any
condemnation award payable by reason of such taking. A failure by Purchaser
to notify Seller in writing within such twenty (20) day period shall be
deemed an election to proceed under clause (ii) above. If Purchaser elects
(or is deemed to elect) to proceed under clause (ii) above, Seller shall not
compromise, settle or adjust any claims to such award without Purchaser's
prior written consent. As used in this Section 16, "TAKING" shall mean any
transfer of the Property or any portion thereof to a governmental entity or
other party with appropriate authority, by exercise of the power of eminent
domain.
(c) If prior to the Closing, any non-material portion of the
Property is damaged or subject to a taking, Purchaser shall accept the
Property in its then condition (without any abatement or reduction in the
Purchase Price other than a credit for any deductible or any insurance
proceeds received by Seller prior to Closing, less Seller's actual
out-of-pocket expenses incurred to obtain such insurance proceeds) and
proceed with the Closing, in which case Purchaser shall be entitled to an
assignment of all of Seller's rights to any insurance proceeds or any award
in connection with such taking, as the case may be. If any such non-material
damage or taking occurs, Seller shall not compromise, settle or adjust any
claims to such insurance proceeds or such award, as the case may be, without
Purchaser's prior written consent.
(d) For the purpose of this Section 16, damage to the Property or a
taking of a portion thereof shall be deemed to involve a material portion
thereof if:
(i) the condemnation award, or the proceeds payable under
the applicable policy or policies of casualty insurance maintained by
Seller, are insufficient by more than $100,000 to fully repair the damage
caused by such casualty
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or taking, unless Seller shall (at its sole option and without any
obligation to do so) grant to Purchaser a credit equal to such deficiency;
or
(ii) a Major Tenant shall, by reason of such casualty
or taking, either terminate its Lease or its obligations under any REA, or
cease operating at the Property (other than temporarily due to such damage
and destruction, remodeling, renovation or any similar cause), or have the
right to do any of the foregoing (unless such right shall have expired or
been waived); or
(iii) the estimated time for repair or restoration shall
exceed three (3) months; or
(iv) in the case of a taking, such taking would, in
the reasonable opinion of Purchaser, leave remaining a balance of the Real
Property, which, due either to the area taken or the location of the part
taken would not, under applicable zoning laws or building regulations then
prevailing, readily accommodate a new or restructured building or buildings
of a type and size generally similar to the building or buildings existing
on the date hereof, or would result in inadequate parking or lack of
reasonable access to public roads.
(e) Seller agrees to give Purchaser notice of any taking, damage or
destruction of the Property promptly after Seller obtains knowledge thereof.
If a taking or casualty as set forth in this Section 16 shall occur, Seller
shall initiate all actions required to adjust, compromise and collect the
awards payable by the condemning authority or the proceeds payable under the
applicable policy or policies of casualty insurance. From and after the date
hereof (if Purchaser has not elected to terminate this Agreement as provided
herein), Purchaser shall have the right (but not the obligation) to
participate with Seller in the initiation of all such actions and, in any
event, Seller shall consult with, and keep Purchaser advised of, Seller's
progress in connection therewith.
17. DEFAULT.
(a) If Seller defaults in its obligations under this Agreement,
Purchaser shall be entitled to a return of the Deposit and have all remedies
at law and in equity; provided, however, that in an action for damages,
Purchaser shall be limited to recovering its actual costs and damages but
not any consequential damages.
(b) IF PURCHASER DEFAULTS IN ITS OBLIGATION TO CLOSE THE PURCHASE OF
THE PROPERTY, THE DEPOSIT, PLUS ANY INTEREST ACCRUED THEREON, SHALL BE PAID
TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. THE AMOUNT PAID TO AND
RETAINED BY SELLER AS LIQUIDATED DAMAGES SHALL BE SELLER'S SOLE REMEDY IF
PURCHASER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO
EXPRESSLY AGREE AND
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ACKNOWLEDGE THAT SELLER'S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY
PURCHASER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND
THAT THE AMOUNT OF THE DEPOSIT PLUS ANY INTEREST ACCRUED THEREON REPRESENTS
THE PARTIES' REASONABLE ESTIMATE OF SUCH DAMAGES. NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS SECTION 17(b), THIS LIQUIDATED DAMAGES
PROVISION IS NOT INTENDED AND SHALL NOT BE DEEMED OR CONSTRUED TO LIMIT IN
ANY WAY PURCHASER'S INDEMNITY OBLIGATIONS UNDER SECTION 5.
SELLER'S INITIALS: ----- PURCHASER'S INITIALS: -----
18. BROKER'S COMMISSION.
Purchaser and Seller each represent and warrant to the other that no
brokerage commission, finder's fee or other compensation is due or payable with
respect to the transaction contemplated hereby other than a commission to be
paid to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of Illinois, Inc. pursuant to a separate agreement,
which shall be paid by Seller only upon the Closing of the purchase and sale
contemplated hereby. Purchaser shall indemnify, defend, and hold the Seller
Parties harmless from and against any losses, damages, costs and expenses
(including, but not limited to, reasonable attorneys' fees and costs) incurred
by the Seller Parties, or each of them, by reason of any breach or inaccuracy of
the Purchaser's representations and warranties contained in this Section 18.
Seller shall indemnify, defend, and hold Purchaser harmless from and against any
losses, damages, costs and expenses (including, but not limited to, reasonable
attorneys' fees and costs) incurred by Purchaser by reason of any breach or
inaccuracy of Seller's representations and warranties contained in this Section
18. The provisions of this Section 18 shall survive the Closing.
19. ESCROW.
(a) INSTRUCTIONS. Within two (2) days after execution of this
Agreement, Purchaser and Seller each shall deposit a copy of this Agreement
executed by such party (or either of them shall deposit a copy executed by
both Purchaser and Seller) with Escrow Company. This Agreement, together
with such further instructions, if any, as the parties shall jointly provide
to Escrow Company by written agreement, shall constitute the escrow
instructions. If any requirements relating to the duties or obligations of
Escrow Company hereunder are not acceptable to Escrow Company, or if Escrow
Company requires additional instructions, the parties hereto agree to make
such deletions, substitutions and additions hereto as counsel for Purchaser
and Seller shall mutually approve, which additional instructions shall not
substantially alter the terms of this Agreement unless otherwise expressly
agreed to by Seller and Purchaser.
(b) DEPOSITS INTO ESCROW. Seller shall make its deposits into escrow
in accordance with Section 11. Purchaser shall make its deposits into escrow
in
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accordance with Section 12. Escrow Company is authorized to close the escrow
only if and when: (i) Escrow Company has received all items to be delivered
by Seller and Purchaser pursuant to Sections 11 and 12; and (ii) Title
Company can and will issue the Title Policy concurrently with the Closing.
(c) CLOSE OF ESCROW. Provided that Escrow Company shall not have
received written notice in a timely manner from Purchaser or Seller of the
failure of any condition to the Closing or of the termination of the escrow,
and if and when Purchaser and Seller have deposited into escrow the matters
required by this Agreement and Title Company can and will issue the Title
Policy concurrently with the Closing, Escrow Company shall:
(i) Deliver to Purchaser: (1) the Special Warranty Deed by
causing it to be recorded in the Official Records and immediately upon
recording delivering to Purchaser a conformed copy of the Special Warranty
Deed; (2) the ▇▇▇▇ of Sale; (3) the Certificate of Non-Foreign Status; (4)
the Assignment; (5) the Assignment or Assignments of Leases (and Purchaser
may direct Escrow Company to record certain of the Assignments in the
Official Records); (6) the Assignment of REAs by causing it to be recorded
in the Official Records and immediately upon recording delivering to
Purchaser a conformed copy of the Assignment of REAs; (7) the Assignment of
Repurchase Right by causing it to be recorded in the Official Records and
immediately upon recording delivering to Purchaser a conformed copy of the
Assignment of Repurchase Right; (8) the Assignment of Development Agreement
by causing it to be recorded in the Official Records and immediately upon
recording delivering to Purchaser a conformed copy of the Assignment of
Development Agreement; (9) the Release Agreement by causing it to be
recorded in the Official Records and immediately upon recording delivering
to Purchaser a conformed copy of the Release Agreement; and (10) all other
Seller Closing Documents;
(ii) Deliver to Seller: the Purchase Price, after satisfying
the Closing costs, prorations and adjustments and the broker commission to
be paid by Seller pursuant to Sections 13, 15 and 18, respectively, and the
Purchaser Closing Documents;
(iii) Deliver to Purchaser: any funds deposited by Purchaser,
and any interest earned thereon, in excess of the amount required to be paid
by Purchaser hereunder; and
(iv) Deliver the Title Policy issued by Title Company to
Purchaser.
(d) REAL ESTATE REPORTING PERSON. Escrow Company is designated the
"real estate reporting person" for purposes of section 6045 of title 26 of
the United States Code and Treasury Regulation 1.6045-4 and any instructions
or settlement statement prepared by Escrow Company shall so provide. Upon
the consummation of the transaction contemplated by this Agreement, Escrow
Company shall file Form 1099
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information return and send the statement to Seller as required under the
aforementioned statute and regulation.
20. MISCELLANEOUS.
(a) Each individual and entity executing this Agreement represents
and warrants that he, she or it has the capacity set forth on the signature
pages hereof with full power and authority to bind the party on whose behalf
he, she or it is executing this Agreement to the terms hereof.
(b) This Agreement is the entire Agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements and understandings, whether oral or written, between the parties
with respect to the matters contained in this Agreement. Any waiver,
modification, consent or acquiescence with respect to any provision of this
Agreement shall be set forth in writing and duly executed by or in behalf of
the party to be bound thereby. No waiver by any party of any breach
hereunder shall be deemed a waiver of any other or subsequent breach.
(c) This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken
together shall constitute one and the same instrument. The signature page of
any counterpart may be detached therefrom without impairing the legal effect
of the signature(s) thereon provided such signature page is attached to any
other counterpart identical thereto except having additional signature pages
executed by other parties to this Agreement attached thereto.
(d) Time is of the essence in the performance of and compliance with
each of the provisions and conditions of this Agreement.
(e) Any communication, notice or demand of any kind whatsoever
which either party may be required or may desire to give to or serve upon
the other shall be in writing and delivered by personal service (including
express or courier service), by electronic communication, whether by telex,
telegram or telecopy (if confirmed in writing sent by registered or
certified mail, postage prepaid, return receipt requested), or by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
Purchaser: Spring Hill Mall L.L.C.
c/o General Growth Properties
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇)▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Seller: Spring Hill Mall Partnership
c/o CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investors, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: O'Melveny & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ III, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Escrow Company: Commonwealth Land Title Insurance Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 106
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Title Company: Commonwealth Land Title Insurance Company
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, ext. 106
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change its address for notice by written notice given to the
other in the manner provided in this Section. Any such communication, notice
or demand shall be deemed to have been duly given or served on the date
personally served, if by personal service, on the date of confirmed
dispatch, if by electronic communication, or three (3) days after being
placed in the U.S. Mail, if mailed.
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(f) The parties agree to execute such instructions to Escrow Company
and Title Company as may be reasonably necessary to carry out the provisions
of this Agreement, and, at any time and from time to time after the Closing,
to execute, acknowledge where appropriate and deliver such further
instruments and other documents (and to bear its own costs and expenses
incidental thereto) and to take such other actions as the other of them may
reasonably request in order to carry out the intent and purpose of this
Agreement; provided, however, that neither Seller nor Purchaser shall be
obligated, pursuant to this Section 20(f), to incur any expense of a
material nature and/or to incur any material obligations in addition to
those set forth in this Agreement and/or its respective closing documents.
(g) The making, execution and delivery of this Agreement by the
parties hereto has been induced by no representations, statements,
warranties or agreements other than those expressly set forth herein.
(h) Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be valid under applicable law, but, if
any provision of this Agreement shall be invalid or prohibited thereunder,
such invalidity or prohibition shall be construed as if such invalid or
prohibited provision had not been inserted herein and shall not affect the
remainder of such provision or the remaining provisions of this Agreement.
(i) The language in all parts of this Agreement shall be in all
cases construed simply according to its fair meaning and not strictly for or
against any of the parties hereto. Section headings of this Agreement are
solely for convenience of reference and shall not govern the interpretation
of any of the provisions of this Agreement. References to "Sections" are to
Sections of this Agreement, unless otherwise specifically provided.
(j) This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois.
(k) If any action is brought by either party against the other
party, relating to or arising out of this Agreement, the transaction
described herein or the enforcement hereof, the prevailing party shall be
entitled to recover from the other party reasonable attorneys' fees, costs
and expenses incurred in connection with the prosecution or defense of such
action. For purposes of this Agreement, the term "attorneys' fees" or
"attorneys' fees and costs" shall mean the fees and expenses of counsel to
the parties hereto, which may include printing, photostating, duplicating
and other expenses, air freight charges, and fees billed for law clerks,
paralegals and other persons not admitted to the bar but performing services
under the supervision of an attorney, and the costs and fees incurred in
connection with the appeal, enforcement or collection of any judgment. The
provisions of this Section 20(k) shall survive the entry of any judgment,
and shall not merge, or be deemed to have merged, into any judgment.
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(l) This Agreement shall be binding upon and inure to the benefit of
each of the parties hereto and to their respective transferees, successors,
and assigns. Neither this Agreement nor any of the rights or obligations of
Seller or Purchaser hereunder shall be transferred or assigned by Seller or
Purchaser without the prior written consent of the non-assigning party,
except that Purchaser may assign this Agreement to an affiliate of
Purchaser, provided that no such assignment shall relieve Purchaser of its
obligations under this Agreement, and provided further that the assignee
shall assume for Seller's benefit the obligations of Purchaser under this
Agreement.
(m) Exhibits A through R, inclusive, and Annex I attached hereto are
incorporated herein by reference.
(n) Notwithstanding anything to the contrary contained herein, this
Agreement shall not be deemed or construed to make the parties hereto
partners or joint venturers, or to render either party liable for any of the
debts or obligations of the other, it being the intention of the parties to
merely create the relationship of Seller and Purchaser with respect to the
Property to be conveyed as contemplated hereby.
(o) This Agreement shall not be recorded or filed in the public land
or other public records of any jurisdiction by either party and any attempt
to do so may be treated by the other party as a breach of this Agreement.
(p) Each party agrees that, except as otherwise set forth in this
Agreement or provided by law or unless compelled by an order of a court, it
shall keep the contents of this Agreement and any information related to the
transaction contemplated hereby confidential (except that Purchaser may
disclose such matters in accordance with the provisions of Section 8 above)
and further agrees to refrain from generating or participating in any
publicity statement, press release, or other public notice regarding this
transaction without the prior written consent of the other party unless
required under applicable law or by a court order. The provisions of this
Section 20(p) shall survive the Closing or any termination of this Agreement
and shall not be merged into any instrument or conveyance delivered at the
Closing.
(q) Seller and Purchaser agree that it is their specific intent that
no broker shall be a party to or a third party beneficiary of this Agreement
or the escrow; and further that the consent of a broker shall not be
necessary to any agreement, amendment, or document with respect to the
transaction contemplated by this Agreement.
(r) If any of the dates specified in this Agreement shall fall on a
Saturday, a Sunday, or a holiday, then the date of such action shall be
deemed to be extended to the next business day.
(s) From and after the Closing, for a period of one (1) year, Seller
shall provide reasonable assistance to Purchaser in connection with
Purchaser's preparation of financial statements and bills and the adjustment
of losses and claims and the
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enforcement or settlement of any such claims relating to the Property,
provided that Seller shall not be required to incur any out-of-pocket
expenses in connection with such assistance. Without limiting the foregoing,
for a period of one (1) year after the Closing, Seller shall, upon the
request of Purchaser from time to time, provide signed representation
letters with respect to revenues and expenses of Seller for calendar year
1998 if required under Generally Accepted Auditing Standards as promulgated
by the Auditing Standards Division of the American Institute of Certified
Public Accountants from time to time to enable Purchaser's accountants to
render an opinion on Purchaser's financial statements.
(t) Subject to any limitation of Seller's liability for breach of
representations or warranties set forth in Section 6 (including, without
limitation, the requirement that any claim be brought within one (1) year
after Closing) or Section 7(g), or any limitation of Seller's liability for
any inaccuracy in any Seller's Certificate set forth in Section 9(a)(iii)
(including, without limitation, the requirement that any claim be brought
within one (1) year after Closing), Seller shall indemnify, defend and hold
harmless the Purchaser and Purchaser's members, and each of their respective
officers, directors, shareholders, beneficiaries, members, partners, agents,
employees and attorneys (collectively, the "Purchaser Parties"), from any
losses, damages, costs and expenses (including, but not limited to,
reasonable attorneys' fees and costs) incurred by the Purchaser Parties, or
any of them, by reason of any breach or inaccuracy of any of Seller's
representations and warranties set forth in Section 6 or any breach of
Seller's covenants set forth in Section 10 occurring prior to the Closing,
but discovered by Purchaser after the Closing, or any inaccuracy in any
Seller's Certificate. Purchaser shall indemnify, defend and hold the Seller
Parties harmless from and against any losses, damages, costs and expenses
(including, but not limited to, reasonable attorneys' fees and costs)
incurred by the Seller Parties, or any of them, by reason of any breach or
inaccuracy of Purchaser's representations and warranties under Section 7.
21. MATTERS RELATING TO ▇▇▇▇▇ THEATRES. Reference is made to that
certain lease by and between Homart and ▇▇▇▇▇ Theatres, Inc., a Delaware
corporation ("▇▇▇▇▇"), dated as of January 30, 1980 (the "▇▇▇▇▇ Lease"). The
parties acknowledge that (i) ▇▇▇▇▇ vacated the premises leased by ▇▇▇▇▇ (the
"▇▇▇▇▇ Premises") and ceased paying rent and other charges under the ▇▇▇▇▇ Lease
as of May 1, 1998 (and also has not paid the 1997 tax reconciliation), and (ii)
▇▇▇▇▇ attempted to assign the ▇▇▇▇▇ Lease to Tivoli Enterprises, Inc., without
first obtaining Seller's consent thereto as required by the ▇▇▇▇▇ Lease, and,
upon requesting Seller's consent to such assignment, Seller did not consent to
the assignment. At the Closing, Seller shall assign the ▇▇▇▇▇ Lease to
Purchaser, and Purchaser shall assume the ▇▇▇▇▇ Lease as one of the Assumed
Obligations pursuant to Section 3(e) above; provided, however, the following
provisions shall apply:
(a) If it has not done so prior to the Closing, Seller shall
institute unlawful detainer proceedings against ▇▇▇▇▇ (seeking to terminate the
▇▇▇▇▇ Lease and regain possession of the ▇▇▇▇▇ Premises) for ▇▇▇▇▇'▇ failure to
perform various of its obligations under the ▇▇▇▇▇ Lease, including, without
limitation, the obligation to pay rent and other charges
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under the ▇▇▇▇▇ Lease and an action against ▇▇▇▇▇ for lost rent and other
damages resulting from ▇▇▇▇▇'▇ vacation of the ▇▇▇▇▇ Premises. Such unlawful
detainer action, together with any other claims by Seller or ▇▇▇▇▇ (including a
claim by ▇▇▇▇▇ that Seller wrongfully withheld consent to assignment of the
▇▇▇▇▇ Lease (hereinafter referred to as the "▇▇▇▇▇ Claim")) which share a common
nucleus of operative fact with or are otherwise connected or related to the
unlawful detainer action, are hereinafter referred to as the "▇▇▇▇▇ Litigation".
Seller shall be solely responsible for pursuing and/or defending the ▇▇▇▇▇
Litigation after the Closing in accordance with this Section 21.
(b) Seller shall engage counsel for and otherwise control the
strategy and all other aspects of the ▇▇▇▇▇ Litigation, including whether to
pursue an appeal of any judgment, whether to settle all or any portion of the
▇▇▇▇▇ Litigation, and the terms and conditions of such a settlement (subject to
the provisions of Section 21(e)(iii)), all in Seller's sole discretion. Seller
has not made, and is not making, any representation or warranty regarding the
time necessary to pursue the ▇▇▇▇▇ Litigation to conclusion or settlement, the
merits of the respective claims of Seller and ▇▇▇▇▇ with respect to the subject
matter of the ▇▇▇▇▇ Litigation and, except as expressly set forth in this
Section 21, Seller shall have no liability to Purchaser for any of the
foregoing. Seller shall pursue the ▇▇▇▇▇ Litigation diligently and in good
faith, and shall keep Purchaser promptly apprised of developments in the ▇▇▇▇▇
Litigation. Except as expressly set forth in this Section 21(b), Purchaser shall
have no right to be involved in or informed of litigation strategy, tactics or
decision making (including, without limitation, settlement decisions), nor shall
Purchaser have any right of approval or consent with regard such strategy,
tactics or decision making. Purchaser shall not intervene in the ▇▇▇▇▇
Litigation, nor shall it consent to joinder therein, except that, if Seller's
counsel believes that such intervention or joinder is necessary, then Purchaser
shall do so at Seller's request and expense, and Purchaser shall otherwise
reasonably cooperate with Seller's efforts to litigate to conclusion or settle
the ▇▇▇▇▇ Litigation, all at Seller's expense.
(c) Seller shall indemnify, defend and hold harmless the Purchaser
Parties from and against all claims, losses, liabilities, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred, suffered by or claimed against the Purchaser Parties, or any
of them, in connection with the ▇▇▇▇▇ Litigation, including, without limitation,
the ▇▇▇▇▇ Claim (either as counterclaims or in a separate action); provided,
however, Seller shall have no liability to Purchaser for: (i) any lost rentals
or other amounts payable under the ▇▇▇▇▇ Lease, except as expressly set forth in
Section 21(f) below; (ii) any other economic losses or damages that may be
incurred or suffered by Purchaser as a result of the ▇▇▇▇▇ Premises being vacant
or Purchaser's inability to lease or sell the ▇▇▇▇▇ Premises until the ▇▇▇▇▇
Litigation is settled or concluded (or, if settlement or conclusion of the ▇▇▇▇▇
Litigation does not involve the termination of the ▇▇▇▇▇ Lease, until the ▇▇▇▇▇
Lease expires or is otherwise terminated and ▇▇▇▇▇ or ▇▇▇▇▇'▇ permitted assignee
vacates the ▇▇▇▇▇ Premises); (iii) the condition of the ▇▇▇▇▇ Premises or the
cost of any necessary repairs or upgrades thereto upon the settlement or
conclusion of the ▇▇▇▇▇ Litigation or upon the expiration or termination of the
▇▇▇▇▇ Lease and the vacation of the Premises by ▇▇▇▇▇ or ▇▇▇▇▇'▇ permitted
assignee, it being acknowledged by Purchaser that possession the ▇▇▇▇▇ Premises
will be returned to Purchaser in an "as is" physical condition and an "as is"
state of repair,
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with all faults; or (iv) ▇▇▇▇▇'▇ failure to perform any of its obligations under
any settlement or judgment connected to the ▇▇▇▇▇ Litigation (except that Seller
shall make good faith, commercially reasonable efforts to collect any payments
to be made by ▇▇▇▇▇ pursuant to such settlement or judgment).
(d) If the ▇▇▇▇▇ Litigation (or any portion or claim thereof) is
prosecuted to a final, non-appealable judgment, the following shall apply:
(i) If the judgment is in favor of Seller, any amount actually
collected by Seller for rent or other obligations under the ▇▇▇▇▇ Lease
shall be divided between Seller and Purchaser as follows:
(A) First, to Seller, the amount necessary to fully
reimburse Seller for all of its costs, expenses and losses in
connection with the ▇▇▇▇▇ Litigation (including, without limitation,
any amounts paid by Seller to satisfy any judgment or settlement ▇▇▇▇▇
may obtain in connection with the ▇▇▇▇▇ Claim);
(B) Second, to Purchaser, an amount calculated by
multiplying the remaining proceeds collected by Seller by a fraction,
the numerator of which is the amount of unpaid rent and other charges
owing under the ▇▇▇▇▇ Lease from and after the Closing and for which
Purchaser has not received payment from Seller pursuant to Section
21(f) below, and the denominator of which is the total amount of unpaid
rent and other charges owing under the ▇▇▇▇▇ Lease both before and
after the Closing, including any amounts paid by Seller to Purchaser
pursuant to Section 21(f), below; and
(C) Third, to Seller, the remaining amount of such
proceeds.
(ii) If the judgment is in favor of ▇▇▇▇▇, Seller shall be solely
responsible for the payment of all amounts payable to ▇▇▇▇▇ under such
judgment; provided, however, Seller may apply any amounts collected by
Seller from ▇▇▇▇▇ (either by judgment, settlement or otherwise) towards
payment of such judgment.
(iii) If the judgment does not permit or require the termination of
the ▇▇▇▇▇ Lease, Purchaser shall abide by such judgment and accept ▇▇▇▇▇ or
any assignee required by such judgment as the tenant of the ▇▇▇▇▇ Premises
in accordance with the terms of such judgment.
(e) If the ▇▇▇▇▇ Litigation (or any portion or claim thereof)
settled, the following shall apply:
(i) If the settlement results in the payment of money to Seller,
such money shall be divided between Seller and Purchaser in accordance with
Section 21(d)(i) above.
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(ii) If the settlement involves the payment of money to ▇▇▇▇▇,
Seller shall be solely responsible for such payment; provided, however,
Seller may apply any amounts collected by Seller from ▇▇▇▇▇ (either by
judgment, settlement or otherwise) towards payment of such settlement.
(iii) In connection with, and as a part of any settlement of the ▇▇▇▇▇
Litigation, or any portion thereof, Seller shall have the right to: (A)
terminate the ▇▇▇▇▇ Lease, (B) permit ▇▇▇▇▇ to remain as tenant of the ▇▇▇▇▇
Premises under and in accordance with the terms and conditions of the ▇▇▇▇▇
Lease (i.e., without modifying or altering such terms and conditions) or (C)
permit ▇▇▇▇▇ to assign the ▇▇▇▇▇ Lease in accordance with the terms thereof
(and the decision of whether or not to consent to any proposed assignment by
▇▇▇▇▇ shall be made by Seller, notwithstanding the fact that Purchaser will
be the landlord under the Lease from and after the Closing). Purchaser
agrees that Seller may take any of the foregoing actions in order to resolve
the ▇▇▇▇▇ Litigation, and Purchaser shall execute such documents as are
reasonably necessary to consummate such actions.
(f) From and after the Closing until the earlier of (i) the
termination of the ▇▇▇▇▇ Lease by final, non-appealable judgment or settlement;
(ii) the recommencement of the payment of base rent under the ▇▇▇▇▇ Lease by
▇▇▇▇▇ or ▇▇▇▇▇'▇ permitted assignee pursuant to Section 21(e) above; or (iii)
November 30, 2005 (the expiration of the primary term of the ▇▇▇▇▇ Lease,
without reference to any extension or renewal options), Seller shall pay
Purchaser, as and when due pursuant to the ▇▇▇▇▇ Lease, the amount of base rent
and any property taxes, insurance premiums and common area maintenance charges
payable or reimbursable by ▇▇▇▇▇ under the ▇▇▇▇▇ Lease (but not any percentage
rents or like charges).
(g) Seller's obligations under this Section 21 shall survive the
Closing. Except for Seller's obligations under Section 21(f) (which shall
terminate as set forth therein), Section 21(c), and the obligation to pay to
Purchaser a portion of any collected monetary judgment or settlement in
accordance with Sections 21(d) and 21(e), Seller's obligations under this
Section 21 shall terminate following final resolution of the ▇▇▇▇▇ Litigation by
entry of a final non-appealable judgment (or judgments) or the execution by
Seller and ▇▇▇▇▇ of a settlement agreement resolving all claims in the ▇▇▇▇▇
Litigation.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
SELLER: SPRING HILL MALL PARTNERSHIP,
an Illinois general partnership
By: TCW REALTY FUND VA (ILLINOIS)
HOLDING COMPANY,
a California corporation
By: /s/
------------------------
Its Authorized Signatory
By: /s/
------------------------
Its Authorized Signatory
and
TCW REALTY FUND VB,
a California limited partnership
By: TCW ASSET MANAGEMENT
COMPANY, a California
corporation, a General
Partner
By:/s/
------------------------
Its Authorized Signatory
By:/s/
------------------------
Its Authorized Signatory
[SIGNATURES CONTINUED ON NEXT PAGE]
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By: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ INVESTORS,
L.L.C. (formerly known as
Westmark Realty Advisors,
L.L.C.), a Delaware limited
liability company, a General
Partner
By:/s/
------------------------
Its Authorized Signatory
By:/s/
------------------------
Its Authorized Signatory
as tenants-in-common as to a
general partnership interest
By: TCW REALTY FUND VA HOLDING COMPANY,
a California corporation
By: /s/
---------------------------
Its Authorized Signatory
By: /s/
---------------------------
Its Authorized Signatory
and
[SIGNATURES CONTINUED ON NEXT PAGE]
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TCW REALTY FUND VB,
a California limited partnership
By: TCW ASSET MANAGEMENT COMPANY,
a California corporation,
a General Partner
By: /s/
------------------------
Its Authorized Signatory
By: /s/
------------------------
Its Authorized Signatory
By: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ INVESTORS,
L.L.C. (formerly known as
Westmark Realty Advisors,
L.L.C.), a Delaware limited
liability company, a General
Partner
By:/s/
------------------------
Its Authorized Signatory
By:/s/
------------------------
Its Authorized Signatory
as tenants-in-common as to a
general partnership interest
PURCHASER: SPRING HILL MALL L.L.C.,
a Delaware limited liability company
By: SPRING HILL MALL, INC.,
a Delaware corporation
Its: Managing Member
By:/s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------
Its:
-----------------------------
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