ANNEX IV
AGREEMENT OF PURCHASE AND SALE
among
SHOPCO MALLS L.P., the SELLER
and
▇▇▇▇▇▇ PACIFIC GROUP, INC., the BUYER
As of September __, 1999
TABLE OF CONTENTS
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Page
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SALE, PURCHASE PRICE AND CLOSING . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Sale of Asset. . . . . . . . . . . . . . . . . . . . . . 5
Section 2.2 ▇▇▇▇▇▇▇ Money. . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 The Closing . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER . . . . . . . . . . 8
Section 3.1 General Seller Representations and Warranties . . . . . 8
(a) Formation; Existence . . . . . . . . . . . . . . . . . . . 8
(b) Power and Authority . . . . . . . . . . . . . . . . . . . . 8
(c) No Consents . . . . . . . . . . . . . . . . . . . . . . . . 8
(d) No Conflicts . . . . . . . . . . . . . . . . . . . . . . . 8
(e) Foreign Person . . . . . . . . . . . . . . . . . . . . . . 8
Section 3.2 Representations and Warranties of the Seller as to the
Asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(a) Ownership of the Asset . . . . . . . . . . . . . . . . . . 8
(b) Material Contracts . . . . . . . . . . . . . . . . . . . . 9
(c) Space Leases . . . . . . . . . . . . . . . . . . . . . . . 9
(d) Brokerage Commissions . . . . . . . . . . . . . . . . . . . 9
(e) Condemnation . . . . . . . . . . . . . . . . . . . . . . . 9
(f) Litigation . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.3 Covenants of the Seller Prior to Closing . . . . . . . . 10
(a) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) Operation . . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) New Contracts . . . . . . . . . . . . . . . . . . . . . . . 10
(d) New Leases . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) Litigation . . . . . . . . . . . . . . . . . . . . . . . . 11
(f) Sale of Personal Property . . . . . . . . . . . . . . . . . 11
(g) Performance Under Space Leases . . . . . . . . . . . . . . 12
(h) Subordination, Non-Disturbance and Attornment Agreements . . 12
Section 3.4 Survival of Representations and Warranties . . . . . . . 12
ARTICLE IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER . . . . . . . . . . 12
Section 4.1 Representations, Warranties and Covenants of the Buyer. 12
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(a) Formation; Existence . . . . . . . . . . . . . . . . . . . 12
(b) Power; Authority . . . . . . . . . . . . . . . . . . . . . 12
(c) No Consents . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) No Conflicts . . . . . . . . . . . . . . . . . . . . . . . 13
(e) Examination; No Contingencies . . . . . . . . . . . . . . . 13
(f) Good Faith Efforts . . . . . . . . . . . . . . . . . . . . 16
(g) Brokerage Commissions . . . . . . . . . . . . . . . . . . . 16
ARTICLE V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.1 Conditions Precedent To Seller's Obligations. . . . . . 16
Section 5.2 Conditions to the Buyer's Obligations. . . . . . . . . . 18
ARTICLE VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
INSPECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 7.1 Right of Inspection. . . . . . . . . . . . . . . . . . . 21
Section 7.2 Due Diligence Period . . . . . . . . . . . . . . . . . . 22
ARTICLE VIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
TITLE AND PERMITTED EXCEPTIONS . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.1 Permitted Exceptions . . . . . . . . . . . . . . . . . . 22
Section 8.2 Title Report . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.3 Use of Purchase Price to Discharge Title Exceptions . . 23
Section 8.4 Inability to Convey . . . . . . . . . . . . . . . . . . 23
Section 8.5 Rights in Respect of Inability to Convey . . . . . . . . 24
Section 8.6 Voluntary Title Exceptions . . . . . . . . . . . . . . . 24
Section 8.7 The Buyer's Right to Accept Title . . . . . . . . . . . 25
Section 8.8 Cooperation . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE IX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
TRANSACTION COSTS; RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.1 Transaction Costs. . . . . . . . . . . . . . . . . . . . 25
Section 9.2 Risk of Loss. . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.1 Fixed Rents. . . . . . . . . . . . . . . . . . . . . . 27
Section 10.2 Overage Rents. . . . . . . . . . . . . . . . . . . . . 28
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Section 10.3 Taxes and Assessments. . . . . . . . . . . . . . . . . 30
Section 10.4 Water and Sewer Charges. . . . . . . . . . . . . . . . 31
Section 10.5 Utility Charges. . . . . . . . . . . . . . . . . . . . 31
Section 10.6 Material Contracts. . . . . . . . . . . . . . . . . . . 32
Section 10.7 Leasing Costs . . . . . . . . . . . . . . . . . . . . . 32
Section 10.8 Miscellaneous Revenues. . . . . . . . . . . . . . . . . 32
Section 10.9 Supplies. . . . . . . . . . . . . . . . . . . . . . . . 32
Section 10.10 Security Deposits. . . . . . . . . . . . . . . . . . . 33
Section 10.11 Employee Costs. . . . . . . . . . . . . . . . . . . . 33
Section 10.12 Other. . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 10.13 Re-Adjustment . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 11.1 Indemnification by the Seller . . . . . . . . . . . . . 33
Section 11.2 Indemnification by the Buyer . . . . . . . . . . . . . 34
Section 11.3 Survival . . . . . . . . . . . . . . . . . . . . . . . 34
Section 11.4 Indemnification as Sole Remedy . . . . . . . . . . . . 35
ARTICLE XII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
TAX CERTIORARI PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 12.1 Prosecution and Settlement of Proceedings. . . . . . . 35
Section 12.2 Application of Refunds or Savings. . . . . . . . . . . 35
Section 12.3 Survival. . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE XIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 13.1 Default. . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 14.1 Exculpation of Seller. . . . . . . . . . . . . . . . . 36
Section 14.2 Brokers. . . . . . . . . . . . . . . . . . . . . . . . 37
Section 14.3 Confidentiality; Press Release,
IRS Reporting Requirements . . . . . . . . . . . . . 37
Section 14.4 Escrow Provisions . . . . . . . . . . . . . . . . . . 38
Section 14.5 Successors and Assigns; No Third-Party Beneficiaries . 39
Section 14.6 Assignment. . . . . . . . . . . . . . . . . . . . . . 39
Section 14.7 Further Assurances. . . . . . . . . . . . . . . . . . 39
Section 14.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . 40
Section 14.9 Entire Agreement. . . . . . . . . . . . . . . . . . . 41
Section 14.10 Amendments. . . . . . . . . . . . . . . . . . . . . . 41
Section 14.11 No Waiver. . . . . . . . . . . . . . . . . . . . . . . 41
Section 14.12 Governing Law. . . . . . . . . . . . . . . . . . . . . 41
Section 14.13 Submission to Jurisdiction. . . . . . . . . . . . . . 41
Section 14.14 Severability. . . . . . . . . . . . . . . . . . . . . 42
Section 14.15 Section Headings. . . . . . . . . . . . . . . . . . . 42
Section 14.16 Counterparts. . . . . . . . . . . . . . . . . . . . . 42
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Section 14.17 Acceptance of Deed. . . . . . . . . . . . . . . . . . 42
Section 14.18 Construction. . . . . . . . . . . . . . . . . . . . . 42
Section 14.19 Recordation. . . . . . . . . . . . . . . . . . . . . . 42
Section 14.20 Waiver of Jury Trial. . . . . . . . . . . . . . . . . 43
Exhibits
Exhibit A - Assignment of Leases
Exhibit B - Assignment of Contracts
Exhibit C - Tenant Notices
Exhibit D - Special Warranty Deed
Exhibit E - ▇▇▇▇ of Sale
Exhibit F - FIRPTA Certificate
Schedules
Schedule A - Legal Description
Schedule B - Existing Title Policy and Survey
Schedule C - Third Party Loan
Schedule D - Consents
Schedule E - Material Contracts
Schedule F - Space Leases
Schedule F-1 - Temporary Leases
Schedule G - Brokerage Commissions
Schedule H - Litigation
Schedule I - Buyer Consents
Schedule J - Security Deposits Held By the Seller
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AGREEMENT OF PURCHASE AND SALE
------------------------------
AGREEMENT OF PURCHASE AND SALE (this "Agreement"), made as of the
11th day of September, 1999 by and among SHOPCO MALLS L.P., a Delaware
limited partnership ("Seller"), and ▇▇▇▇▇▇ PACIFIC GROUP, INC., a Delaware
corporation ("Buyer"), and FIRST AMERICAN TITLE INSURANCE COMPANY, as escrow
agent ("Escrow Agent")
Background
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A. The Seller is the owner of the land described in Schedule A
attached hereto, together with the buildings and other improvements thereon
(collectively, the "Property"). The Property, together with the Asset-
Related Property (as defined below) with respect to the Property, shall be
referred to herein, collectively, as the "Asset".
B. The Seller desires to sell to the Buyer, and the Buyer desires
to purchase from the Seller, the Asset on the terms and conditions
hereinafter set forth.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.1 Defined Terms. The capitalized terms used herein
will have the following meanings.
"Additional ▇▇▇▇▇▇▇ Money" shall have the meaning assigned thereto
in subsection 2.2(b)(ii).
"Agreement" shall mean this Agreement of Purchase and Sale and all
amendments hereto, together with the exhibits and schedules attached hereto,
as the same may be amended, restated, supplemented or otherwise modified.
"Asset" shall have the meaning assigned thereto in "Background"
paragraph A.
"Asset File" shall mean the materials with respect to the Property
previously delivered to the Buyer or its representatives by or on behalf of
the Seller.
"Asset-Related Property" shall have the meaning assigned thereto in
subsection 2.1(b).
"Assignment of Contracts" shall have the meaning assigned thereto
in Article VI.
"Assignment of Leases" shall have the meaning assigned thereto in
Article VI.
"▇▇▇▇ of Sale" shall have the meaning assigned thereto in Article
VI.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks are authorized or required by law to be closed in
New York City, New York.
"Buyer" shall have the meaning assigned thereto in the Preamble to
this Agreement.
"Closing" shall have the meaning assigned thereto in subsection
2.3(a).
"Closing Date" shall have the meaning assigned thereto in
subsection 2.3(a).
"Condition of the Assets" shall have the meaning assigned thereto
in subsection 4.1(e)(ii).
"Deed" shall have the meaning assigned thereto in Article VI.
"Due Diligence Expiration Date" shall have the meaning assigned
thereto in subsection 7.2(a).
"▇▇▇▇▇▇▇ Money" shall have the meaning assigned thereto in
subsection 2.2(b).
"Escrow Account" shall have the meaning assigned thereto in
subsection 14.5(a).
"Escrow Agent" shall have the meaning assigned thereto in
subsection 2.2(b)(i).
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"Existing Survey" shall mean the survey with respect to the
Property listed on Schedule B attached hereto.
"Existing Title Policy" shall mean the title commitment with
respect to the Property listed on Schedule B attached hereto.
"Fixed Rents" shall have the meaning assigned thereto in subsection
10.1(a).
"Hazardous Materials" shall have the meaning assigned thereto in
subsection 4.1(e)(ii)(A).
"Initial ▇▇▇▇▇▇▇ Money" shall have the meaning assigned thereto in
subsection 2.2(b)(i).
"Insignia" shall mean Insignia/ESG, Inc.
"IRS" shall mean the Internal Revenue Service.
"IRS Reporting Requirements" shall have the meaning assigned
thereto in subsection 14.4(b).
"Lender" shall mean Metropolitan Life Insurance Company.
"Limited Partner Approval" shall mean approval to the transaction
by over 66.66% of the limited partners of Shopco Regional Malls, L.P.
"Material Contracts" shall have the meaning assigned thereto in
subsection 3.2(b).
"Overage Rent" shall have the meaning assigned thereto in
subsection 10.2(a).
"Permitted Exceptions" shall mean (i) the Space Leases and
Temporary Leases affecting the Property and any Space Leases, and Temporary
Leases entered into after the date, and in accordance with the terms, of this
Agreement, (ii) liens for current real estate taxes which are not yet due and
payable, (iii) standard exceptions and provisions contained in forms of title
insurance policies, (iv) subject to the adjustments provided for herein, any
service, installation, connection or maintenance charge due after Closing and
charges for sewer, water, electricity, telephone, cable television or gas,
(v) rights of vendors and holders of security interests on personal property
installed on the Property by tenants and rights of tenants to remove trade
fixtures at the expiration of the term of the Space Leases of such tenants,
(vi) matters contained in the updated title commitment or survey with respect
to the Property obtained by the Buyer as required under Section 8.2 which
matters do not qualify as Permitted Exceptions under one of the other clauses
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of this definition and with respect to which either (A) the Buyer has not
raised an objection within the time period required in Section 8.2 or (B) the
Buyer has raised an objection within the time period required in Section 8.2
and the Seller has not agreed to cause such title exception to be removed
prior to Closing, and (vii) any other restrictions, easements, encumbrances
and other exceptions encumbering the Property which do not individually
materially interfere with the continued use of the relevant Property (the
matters described in clauses (i) through (vi) above, collectively, the
"Permitted Exceptions").
"Person" shall mean a natural person, partnership, limited
partnership, limited liability company, corporation, trust, estate,
association, unincorporated association or other entity.
"Property" shall have the meaning assigned thereto in "Background"
paragraph A.
"Purchase Price" shall have the meaning assigned thereto in
subsection 2.2(a).
"Reporting Person" shall have the meaning assigned thereto in
subsection 14.4(b).
"Seller" shall have the meaning assigned thereto in the Preamble to
this Agreement.
"Seller-Related Entities" shall have the meaning assigned thereto
in subsection 10.2.
"Seller's Knowledge" shall mean the actual knowledge of the Seller
based upon the actual knowledge of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, without any duty on the
part of any such executive officer or other Person to conduct any independent
investigation or make any inquiry of any Person.
"Space Lease" shall have the meaning assigned thereto in subsection
3.2(c).
"Temporary Lease" shall have the meaning assigned thereto in
subsection 3.2(c).
"Tenant Notices" shall have the meaning assigned thereto in Article
VI.
"Third Party Loan" shall mean the loan described on Schedule C
attached hereto.
"TI Costs" shall have the meaning assigned thereto in Section 10.7.
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"Voluntary Title Exceptions" shall mean with respect to the
Property, title exceptions affecting the Property that are knowingly and
intentionally created by the Seller after the date of this Agreement through
the execution by the Seller of one or more instruments creating or granting
such title exceptions; provided, however, that the term "Voluntary Title
Exceptions" as used in this Agreement shall not include the following: (a)
any Permitted Exceptions; (b) Space Leases or Temporary Leases for the
Property or any title exception created pursuant to a Space Lease or a
Temporary Lease for the Property by the tenant thereunder; (c) any title
exceptions that are approved, waived or deemed to have been approved or
waived by the Buyer or that are created in accordance with the provisions of
this Agreement; (d) any title exceptions which, pursuant to a Space Lease or
a Temporary Lease for the Property or otherwise, are to be discharged by a
tenant or occupant of the Property; (e) mechanic's or materialman's liens or
(f) any federal, state county and municipal tax liens.
ARTICLE II
SALE, PURCHASE PRICE AND CLOSING
--------------------------------
Section 2.1 Sale of Asset. (a) On the Closing Date and pursuant
to the terms and subject to the conditions set forth in this Agreement, the
Seller shall sell to the Buyer, and the Buyer shall purchase from the Seller,
the Asset.
(b) The transfer of the Asset to the Buyer shall include the
transfer of all Asset-Related Property with respect to the Asset. For
purposes of this Agreement, "Asset-Related Property" shall mean all of the
Seller's right, title and interest in and to (A) all easements, covenants and
other rights appurtenant to the Property and all right, title and interest of
the Seller, if any, in and to any land lying in the bed of any street, road,
avenue or alley, open or closed, in front of or adjoining the Property and to
the center line thereof, (B) all furniture, fixtures, equipment and other
personal property (except items owned or leased by tenants or which are
leased by the Seller) which are now, or may hereafter prior to the Closing
Date be, placed in or attached to the Property, (C) to the extent they may be
transferred under applicable law, all licenses, permits and authorizations
presently issued in connection with the operation of all or any part of the
Property as it is presently being operated, (D) to the extent assignable, all
warranties, if any, issued to the Seller by any manufacturer or contractor in
connection with construction or installation of equipment or any component of
the improvements included as part of the Property, (E) to the extent
assignable, all service, supply and maintenance contracts (if any) held by
the Seller with respect to the Property and its mechanical equipment,
elevators and other elements, (F) to the extent assignable, all trade names
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and general intangibles relating to the Property and (G) all leases,
licenses, contracts and other agreements, to the extent transferable, for the
use and occupancy of all or any part of the Property and all security and
escrow deposits held by the Seller in connection with any such leases,
licenses, contracts and other agreements.
Section 2.2 ▇▇▇▇▇▇▇ Money. (a) The consideration for the Asset
shall be equal to Thirty-Four Million Six Hundred and Eighty Thousand Dollars
($34,680,000) (the "Purchase Price"), which shall be paid by the Buyer to the
Seller at the Closing by wire transfer of funds, provided that such amount
shall be reduced by the ▇▇▇▇▇▇▇ Money (as defined below) and adjusted for
Closing adjustments as described in Article X below.
(b) The Purchase Price shall be paid to the Seller as follows:
(i) upon execution of this Agreement, the Buyer shall deposit with
Escrow Agent an amount equal to Two Hundred Thousand Dollars ($200,000)
(together with any interest earned thereon, the "Initial ▇▇▇▇▇▇▇ Money")
in immediately available funds by wire transfer to such account as
Escrow Agent shall designate to Escrow Agent.
(ii) on or before the Due Diligence Expiration Date (as
hereinafter defined), unless this Agreement is terminated pursuant to
the terms of Article VII or as may be otherwise provided in this
Agreement, Buyer shall deposit with Escrow Agent by wire transfer of
immediately available funds, an additional downpayment in the amount of
$200,000 (the "Additional ▇▇▇▇▇▇▇ Money"). The Initial ▇▇▇▇▇▇▇ Money
and all interest earned thereon, and, as of the Due Diligence Expiration
Date, the Additional ▇▇▇▇▇▇▇ Money and all interest earned thereon,
shall be hereinafter referred to as the ▇▇▇▇▇▇▇ Money.
The ▇▇▇▇▇▇▇ Money shall be held in escrow in accordance with the
provisions of Section 14.4 and shall be nonrefundable to the Buyer
except if all of the conditions set forth in Section 5.2 have not been
met by the Closing Date or otherwise as set forth in Article VII below.
(iii) on the Closing Date, (A) the Buyer shall deliver the
remainder of the Purchase Price to the Seller in immediately available
funds by wire transfer to such account or accounts that the Seller shall
designate to the Buyer and (B) the Escrow Agent shall deliver the
▇▇▇▇▇▇▇ Money to Seller by wire transfer to such account or accounts
that Seller shall designate to Buyer.
(c) No adjustment shall be made to the Purchase Price except as
explicitly set forth in this Agreement.
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Section 2.3 The Closing. (a) The closing of the sale and purchase
of the Asset (the "Closing") shall take place on (i) the day that is thirty
(30) business days after the Due Diligence Expiration Date or (ii) on an
earlier date suggested by Buyer and reasonably acceptable to Seller (the
"Closing Date").
(b) Seller shall have the right from time to time to extend the
Closing Date for a total of sixty (60) days after the contemplated Closing
Date pending (i) Limited Partner Approval and (ii) Lender's scheduling of a
Closing. Buyer shall have the right from time to time to extend the Closing
Date for a total of sixty (60) days after the contemplated Closing Date if
required by Buyer's lender in connection with Buyer's financing of the
Purchase Price. Notwithstanding the foregoing, in the event the Closing has
not occurred on the date that is ninety (90) after the original Closing Date,
the Closing shall be held on such ninetieth day, TIME BEING OF THE ESSENCE
WITH RESPECT THERETO.
(c) The Closing shall be held on the Closing Date at 10:00 A.M. at
the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York,
New York, or at such other location agreed upon by the parties hereto.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER
-------------------------------------------------------
Section 3.1 General Seller Representations and Warranties. The
Seller hereby represents, warrants and covenants to the Buyer as of the date
hereof and as of the Closing Date as follows:
(a) Formation; Existence. It is a limited partnership, duly
formed, validly existing and in good standing under the laws of the
state of Delaware. Seller either is or as of Closing will be qualified
to do business and be in good standing under the laws of the State of
Maryland.
(b) Power and Authority. It has all requisite power and authority
to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions provided for in this Agreement have been duly authorized by
all necessary action on its part. This Agreement has been duly executed
and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights and
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by general principles of equity (whether applied in a proceeding at law
or in equity).
(c) No Consents. Except (i) as set forth in Schedule D and (ii)
for any consent, license, approval, order, permit, authorization,
registration, filing or declaration, the failure of which to obtain will
not materially adversely effect (A) the Seller's ability to consummate
the transactions contemplated by this Agreement, (B) the ownership of
the Asset or (C) the operation of the Property, no consent, license,
approval, order, permit or authorization of, or registration, filing or
declaration with, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign, is
required to be obtained or made in connection with the execution,
delivery and performance of this Agreement or any of the transactions
required or contemplated hereby.
(d) No Conflicts. To the Seller's Knowledge, the execution,
delivery and compliance with, and performance of the terms and
provisions of, this Agreement, and the sale of the Asset, will not (i)
except with respect to the consent disclosed on Schedule D hereto,
conflict with or result in any violation of its organizational
documents, (ii) except with respect to the consent disclosed on Schedule
D hereto, conflict with or result in any violation of any provision of
any bond, note or other instrument of indebtedness, contract, indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party in its individual capacity, or (iii)
violate any existing term or provision of any order, writ, judgment,
injunction, decree, statute, law, rule or regulation applicable to it or
its assets or properties except, in each case, for any conflict or
violation which (A) will not materially adversely effect (1) the
Seller's ability to consummate the transactions contemplated by this
Agreement, (2) the ownership of the Asset or (3) the operation of the
Property or (B) arises under the documents evidencing or securing the
Third Party Loan (which Third Party Loan documents shall be released on
or before Closing).
(e) Foreign Person. The Seller is not a "foreign person" as
defined in Internal Revenue Code Section 1445 and the regulations issued
thereunder.
Section 3.2 Representations and Warranties of the Seller as to the
Asset. The Seller hereby represents, warrants and covenants to the Buyer as
of the date hereof and as of the Closing Date, as follows:
(a) Ownership of the Asset. It is the owner and holder of the
Asset and the Asset is held by it free and clear of any lien, pledge,
charge, security interest, encumbrance, title retention agreement,
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adverse claim or restriction except for the Permitted Exceptions and
possible security interests which will be terminated prior to the
Closing. It has the right to sell the Asset pursuant to the terms of
this Agreement. Upon transfer of the Property by it to the Buyer and
upon delivery by the Buyer to the Seller of the Purchase Price, the
Buyer will receive the Property free and clear of any encumbrances
(other than the Permitted Exceptions and any encumbrances arising from
acts of the Buyer or its affiliates). It has not prior to the date
hereof sold (or entered into an agreement to sell) the Asset (except for
the possible granting of security interests, all of which will either be
terminated prior to, or taken subject to by Buyer at, the Closing).
(b) Material Contracts. To the Seller's Knowledge, all material
service, maintenance, supply, construction, development and management
contracts ("Material Contracts") affecting the Property are set forth on
Schedule E attached hereto and the same have not been modified or
amended, except as shown in such documents. To Seller's Knowledge, all
Material Contracts are terminable upon thirty days notice.
(c) Space Leases. With respect to the leases listed on Schedule F
attached hereto (the "Space Leases"), to the Seller's Knowledge such
Space Leases constitute all the leases of space for over 1000 square
feet relating to the Property under which the Seller is the holder of
the landlord's interest. True copies of the Space Leases have been
delivered or made available to the Buyer. With respect to the leases
listed on Schedule F-1 attached hereto ("Temporary Leases"), to the
Seller's knowledge, such Temporary Leases constitute all of the leases
of space under 1,000 square feet which the Seller is the holder of
landlord's interest.
(d) Brokerage Commissions. To the Seller's Knowledge, there
are no brokerage commissions or finders' fees payable by the
landlord with respect to the current or any renewal term of any of
the Space Leases or Temporary Leases other than those set forth on
Schedule G attached hereto and the Seller has no agreement with any
broker with respect to any renewal term of any Space Lease or
Temporary Lease except as set forth in Schedule G.
(e) Condemnation. To the Seller's Knowledge, the Seller
knows of no pending condemnation or similar proceedings affecting
the Property, nor does the Seller have knowledge that any such
action is threatened or contemplated.
(f) Litigation. To the Seller's Knowledge, except as
disclosed in Schedule H attached hereto, there are no actions,
suits or proceedings pending against or affecting the Asset in any
court or before or by an arbitration tribunal or regulatory
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commission, department or agency which, if adversely determined,
would materially adversely affect (1) the Seller's ability to
consummate the transactions contemplated by this Agreement, (2) the
ownership of the Asset or (3) the operation of the Property.
Section 3.3 Covenants of the Seller Prior to Closing. Until
Closing, the Seller or the Seller's agents shall:
(a) Insurance. Keep the Property insured against fire and
other hazards covered by the insurance policies maintained by the
Seller on the date of this Agreement.
(b) Operation. Operate and maintain the Property in a
businesslike manner and substantially in accordance with the
Seller's past practices with respect to the Property.
(c) New Contracts. Enter into third party contracts relating
to the Property, provided that, without the prior written consent
of the Buyer, which consent shall not be unreasonably withheld, the
Seller will not enter into any new third party contracts unless any
such contract (i) is necessary as a result of an emergency at the
Property, or (ii) is a contract other than a construction contract
being entered into for improvements contemplated by any proposed
Space Lease or Temporary Lease (not entered into prior to the date
hereof). If the Seller enters into any third party contracts after
the date of this Agreement, then the Seller shall promptly provide
written notice and a copy thereof to the Buyer and unless such
contract required the Buyer's approval pursuant to this paragraph
and such approval was not obtained, the Buyer shall assume such
contract at Closing, such contract shall be deemed added to
Schedule E attached hereto and Schedule E shall be deemed amended
at the Closing to include such contracts. If a new contract
requires the Buyer's approval and the Buyer does not object within
five (5) Business Days after receipt of a copy of such contract,
then the Buyer shall be deemed to have approved such contract.
Additionally, provided that Seller shall be under no obligation to
terminate, or deliver any notice of termination of, any Contracts
prior to the Closing and Seller shall not be required to deliver
any payments to any parties to any Contracts, Seller shall
coordinate with, and assist Buyer in preparing for the termination
of any Contracts Buyer desires to deliver notices of termination
for on the Closing Date.
(d) New Leases. (i) Continue its present rental program and
efforts at the Property to rent vacant space, provided that without
the prior consent of the Buyer, which consent shall not be
unreasonably withheld, the Seller will not execute any new Space
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Lease or Temporary Lease or amend, terminate or accept the
surrender of any existing tenancies or approve any subleases all
with respect to premises except that the Seller is authorized to
(i) accept the termination of Space Leases and Temporary Leases at
the end of their existing terms, (ii) enter into Space Leases and
Temporary Leases with any of the tenants listed on Schedule I with
respect to the specified space in the Property and (iii) amend,
extend or renew any existing Space Lease or Temporary Lease
provided that such amendment, extension or renewal is with any of
the tenants listed on Schedule I. If a new Space Lease or
Temporary Lease or an amendment, renewal or extension of an
existing Space Lease or Temporary Lease requires the Buyer's
consent and the Buyer does not object within five (5) Business Days
after receipt of a copy of such lease, amendment, extension or
renewal, then the Buyer shall be deemed to have approved such Space
Lease or Temporary Lease.
(ii) If Seller enters into any Temporary Leases or any Space
Leases after the date of this Agreement, then (unless Buyer's approval
was required pursuant to this subsection (d) and such approval was not
obtained), the Buyer shall assume such Temporary Leases and such Space
Leases at Closing, such Temporary Leases and such Space Leases shall be
deemed added to Schedule F and Schedule F-1 hereto, as applicable, and
such Schedules shall be deemed amended at the Closing to include such
Temporary Leases and such Space Leases.
(e) Litigation. The Seller will advise the Buyer promptly of
any litigation, arbitration proceeding or administrative hearing
(including condemnation) before any governmental agency which
affects any Asset in any material respect, which is instituted
after the date of this Agreement and which, if adversely
determined, would materially adversely affect (1) the Seller's
ability to consummate the transactions contemplated by this
Agreement, (2) the ownership of the Asset or (3) the operation of
the Property.
(f) Sale of Personal Property. The Seller will not transfer
or dispose of, or permit to be sold, transferred or otherwise
disposed of, any item or group of items constituting personal
property associated with the Property, except for the use and
consumption of inventory, office and other supplies and spare
parts, and the replacement of worn out, obsolete and defective
tools, equipment and appliances, in the ordinary course of
business.
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(g) Performance Under Space Leases. The Seller will perform,
or cause its agents to perform, all obligations of landlord or
lessor under the Temporary Leases and the Space Leases.
(h) Subordination, Non-Disturbance and Attornment Agreements.
Seller shall, prior to Closing, cooperate with Buyer, at no cost or
expense to Seller, in connection with delivering to tenants under
Space Leases and Temporary Leases subordination, non-disturbance
and attornment agreements to be executed in connection with Buyer's
financing of the Purchase Price.
Section 3.4 Survival of Representations and Warranties. The
representations and warranties of Seller contained in Sections 3.1 and 3.2
hereof shall survive the Closing subject to the limitations set forth in
Article XI hereof.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
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Section 4.1 Representations, Warranties and Covenants of the
Buyer. The Buyer hereby represents, warrants and covenants to the Seller as
of the date hereof and as of the Closing Date as follows:
(a) Formation; Existence. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Delaware.
(b) Power; Authority. The Buyer has all requisite power and
authority to enter into this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement, the
purchase of the Asset and the consummation of the transactions
provided for herein have been duly authorized by all necessary
action on the part of the Buyer. This Agreement has been duly
executed and delivered by the Buyer and constitutes the legal,
valid and binding obligation of the Buyer enforceable against the
Buyer in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights and by general
principles of equity (whether applied in a proceeding at law or in
equity).
(c) No Consents. No consent, license, approval, order,
permit or authorization of, or registration, filing or declaration
with, any court, administrative agency or commission or other
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governmental authority or instrumentality, domestic or foreign, is
required to be obtained or made in connection with the execution,
delivery and performance of this Agreement or any of the
transactions required or contemplated hereby.
(d) No Conflicts. The execution, delivery and compliance
with, and performance of the terms and provisions of, this
Agreement, and the purchase of the Asset, will not (a) conflict
with or result in any violation of its organizational documents,
(b) conflict with or result in any violation of any provision of
any bond, note or other instrument of indebtedness, contract,
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party in its individual
capacity, or (c) violate any existing term or provision of any
order, writ, judgment, injunction, decree, statute, law, rule or
regulation applicable to it or its assets or properties.
(e) Examination; No Contingencies. (i) Except as provided
in Article VII below, before entering into this Agreement, the
Buyer has made such examination of the Asset and all other matters
affecting or relating to the transactions contemplated hereunder as
the Buyer has deemed necessary. In entering into this Agreement,
the Buyer has not been induced by and has not relied upon any
written or oral representations, warranties or statements, whether
express or implied, made by the Seller, any partner of Seller, or
any agent, employee, or other representative of any of the
foregoing or by any broker or any other person representing or
purporting to represent the Seller, with respect to the Asset, the
Condition of the Asset or any other matter affecting or relating to
the transactions contemplated hereby, other than those expressly
set forth in this Agreement. The Buyer's obligations under this
Agreement shall not be subject to any contingencies, diligence or
conditions except as expressly set forth in this Agreement. The
Buyer acknowledges and agrees that, except as expressly set forth
herein, the Seller makes no representations or warranties
whatsoever, whether express or implied or arising by operation of
law, with respect to the Asset or the Condition of the Asset. The
Buyer agrees that the Asset will be sold and conveyed to (and
accepted by) the Buyer at the Closing in the then existing
condition of the Asset, AS IS, WHERE IS, WITH ALL FAULTS, AND
WITHOUT ANY WRITTEN OR VERBAL REPRESENTATIONS OR WARRANTIES
WHATSOEVER, WHETHER EXPRESS OR IMPLIED OR ARISING BY OPERATION OF
LAW, other than representations and warranties of the Seller
expressly set forth in this Agreement. Without limiting the
generality of the foregoing, except for the representations and
warranties of the Seller contained in this Agreement, the
transactions contemplated by this Agreement are without statutory,
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express or implied warranty, representation, agreement, statement
or expression of opinion of or with respect to (A) the Condition of
the Asset or any aspect thereof, including, without limitation, any
and all statutory, express or implied representations or warranties
related to the suitability for habitation, merchantability, or
fitness for a particular purpose, (B) the nature or quality of
construction, structural design or engineering of the improvements
included in the Property, (C) the quality of labor or materials
included in the improvements included in the Property, (D) the soil
conditions, drainage, topographical features, flora, fauna, or
other conditions of or which affect the Property, (E) any
conditions at or which affect the Property with respect to a
particular use, purpose, development, potential or otherwise, (F)
areas, size, shape, configuration, location, access, capacity,
quantity, quality, cash flow, expenses, value, condition, make,
model, composition, accuracy, completeness, applicability,
assignability, enforceability, exclusivity, usefulness,
authenticity or amount, (G) any statutory, express or implied
representations or warranties created by any affirmation of fact or
promise, by any description of the Asset or by operation of law,
(H) any environmental, botanical, zoological, hydrological,
geological, meteorological, structural, or other condition or
hazard or the absence thereof heretofore, now or hereafter
affecting in any manner the Property and (I) all other statutory,
express or implied representations or warranties by the Seller
whatsoever. The Buyer acknowledges that the Buyer has knowledge
and expertise in financial and business matters that enable the
Buyer to evaluate the merits and risks of the transactions
contemplated by this Agreement.
(ii) For purposes of this Agreement, the term "Condition of
the Asset" means the following matters:
(A) Physical Condition of the Property. The
quality, nature and adequacy of the physical condition of
the Property, including, without limitation, the quality
of the design, labor and materials used to construct the
improvements included in the Property; the condition of
structural elements, foundations, roofs, glass,
mechanical, plumbing, electrical, HVAC, sewage, and
utility components and systems; the capacity or
availability of sewer, water, or other utilities; the
geology, flora, fauna, soils, subsurface conditions,
groundwater, landscaping, and irrigation of or with
respect to the Property, the location of the Property in
or near any special taxing district, flood hazard zone,
wetlands area, protected habitat, geological fault or
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subsidence zone, hazardous waste disposal or clean-up
site, or other special area, the existence, location, or
condition of ingress, egress, access, and parking; the
condition of the personal property and any fixtures; and
the presence of any asbestos or other Hazardous
Materials, dangerous, or toxic substance, material or
waste in, on, under or about the Property and the
improvements located thereon. "Hazardous Materials"
means (A) those substances included within the
definitions of any one or more of the terms "hazardous
substances," "toxic pollutants", "hazardous materials",
"toxic substances", and "hazardous waste" in the
Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. (as
amended), the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801 et seq., the Resource
Conservation and Recovery Act of 1976 as amended, 42
U.S.C. Section 6901 et seq., Section 311 of the Clean
Water Act and any similar state laws or any regulations
issued under any such laws and (B) petroleum, radon gas,
lead based paint, asbestos or asbestos containing
material and polychlorinated biphenyls.
(B) Adequacy of the Asset. The economic feasibility,
cash flow and expenses of the Asset, and habitability,
merchantability, fitness, suitability and adequacy of the
Property for any particular use or purpose.
(C) Legal Compliance of the Asset. The compliance or
non-compliance of the Seller or the operation of the Property
or any part thereof in accordance with, and the contents of,
(i) all codes, laws, ordinances, regulations, agreements,
licenses, permits, approvals and applications of or with any
governmental authorities asserting jurisdiction over the
Property, including, without limitation, those relating to
zoning, building, public works, parking, fire and police
access, handicap access, life safety, subdivision and
subdivision sales, and Hazardous Materials, dangerous, and
toxic substances, materials, conditions or waste, including,
without limitation, the presence of Hazardous Materials in,
on, under or about the Property that would cause state or
federal agencies to order a clean up of the Property under any
applicable legal requirements and (ii) all agreements,
covenants, conditions, restrictions (public or private),
condominium plans, development agreements, site plans,
building permits, building rules, and other instruments and
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documents governing or affecting the use, management, and
operation of the Property.
(D) Matters Disclosed in the Scheduled Documents and
Asset File. Those matters referred to in this Agreement and
the documents listed on the Schedules attached hereto and the
matters disclosed in the Asset File.
(E) Insurance. The availability, cost, terms and
coverage of liability, hazard, comprehensive and any other
insurance of or with respect to the Property.
(F) Condition of Title. The condition of title to the
Property, including, without limitation, vesting, legal
description, matters affecting title, title defects, liens,
encumbrances, boundaries, encroachments, mineral rights,
options, easements, and access; violations of restrictive
covenants, zoning ordinances, setback lines, or development
agreements; the availability, cost, and coverage of title
insurance; leases, rental agreements, occupancy agreements,
rights of parties in possession of, using, or occupying the
Property; and standby fees, taxes, bonds and assessments.
(f) Good Faith Efforts. The Buyer shall use its good faith
efforts to consummate the Closing and fulfill each of its
obligations hereunder.
(g) Brokerage Commissions. Effective upon the Closing, the
Buyer assumes all obligations of the Seller to pay the brokerage
commissions listed on Schedule G, which obligation shall survive
the Closing and shall be confirmed in writing by the Buyer upon
request by the Seller.
Section 4.2 Survival of Representations and Warranties. The
representations and warranties of Buyer contained in Section 4.1 shall
survive the Closing of this Agreement, subject to the limitations set forth
in Article XI hereof.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
-------------------------------
Section 5.1 Conditions Precedent To Seller's Obligations. The
obligation of the Seller to consummate the transfer of the Asset to the Buyer
on the Closing Date is subject to the satisfaction (or waiver by the Seller)
as of the Closing of the following conditions:
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(a) Each of the representations and warranties made by the
Buyer in this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date as though such
representations and warranties were made on and as of the Closing
Date.
(b) The Buyer shall have performed or complied in all material
respects with each obligation and covenant required by this Agreement to
be performed or complied with by the Buyer on or before the Closing.
(c) No order or injunction of any court or administrative
agency of competent jurisdiction nor any statute, rule, regulation
or executive order promulgated by any governmental authority of
competent jurisdiction shall be in effect as of the Closing which
restrains or prohibits the transfer of the Asset or the
consummation of any other transaction contemplated hereby.
(d) No action, suit or other proceeding shall be pending which
shall have been brought by any person or entity (other than the
parties hereto and their affiliates) (i) to restrain, prohibit or
change in any material respect the purchase and sale of the Asset
or the consummation of any other transaction contemplated hereby or
(ii) seeking material damages with respect to such purchase and
sale or any other transaction contemplated hereby.
(e) The Seller shall have received all of the documents required
to be delivered by the Buyer under Article VI.
(f) The Seller shall have received the Purchase Price in
accordance with subsection 2.2(b) and all other amounts due to the
Seller hereunder.
(g) The Seller shall have received Limited Partner Approval.
Notwithstanding the foregoing, in the event that Seller is unable to
transfer the Asset to Buyer as a result of its failure to obtain Limited
Partner Consent for any reason other than the default of Buyer or the
wilful acts or a misrepresentation of Buyer and Buyer has performed all
of its obligations under this Agreement, then (i) this Agreement (except
for those provisions hereof which by their terms are to survive a
termination of this Agreement) shall be terminated as of the date that
Seller notifies Buyer in writing that it is unable to obtain the Limited
Partner Approval, (ii) the ▇▇▇▇▇▇▇ Money shall be returned to Buyer and
(iii) Seller shall pay to Buyer a break-up fee in an amount equal to
$100,000. Upon a termination of this Agreement as provided for in this
Section 5.1(g), neither party hereto shall have any further rights or
obligations hereunder except for those provisions which expressly
survive the termination hereof.
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Section 5.2 Conditions to the Buyer's Obligations. The obligation of
the Buyer to purchase and pay for the Asset is subject to the satisfaction
(or waiver by the Buyer) as of the Closing of the following conditions:
(a) Each of the representations and warranties made by the
Seller in this Agreement shall be true and correct in all material
respects when made and on and as of the Closing Date as though such
representations and warranties were made on and as of Closing Date.
(b) The Seller shall have performed or complied in all material
respects with each obligation and covenant required by this Agreement to
be performed or complied with by the Seller on or before the Closing.
(c) No order or injunction of any court or administrative
agency of competent jurisdiction nor any statute, rule, regulation
or executive order promulgated by any governmental authority of
competent jurisdiction shall be in effect as of the Closing which
restrains or prohibits the transfer of the Asset or the
consummation of any other transaction contemplated hereby.
(d) No action, suit or other proceeding shall be pending
which shall have been brought by any person or entity (other than
the parties hereto and their affiliates) (i) to restrain, prohibit
or change in any material respect the purchase and sale of the
Asset or the consummation of any other transaction contemplated
hereby or (ii) seeking material damages with respect to such
purchase and sale or any other transaction contemplated hereby.
(e) Title to the Property shall be delivered to the Buyer in the
manner required under Section 8.1.
(f) Seller shall, on or before the Closing Date, acquire from
tenants under Space Leases of over 1000 square feet, which tenants
occupy, in the aggregate, 80% of the square feet of the Property
occupied by all tenants under Space Leases of over 1000 square feet,
tenant estoppel certificates (a) substantially in the form of Exhibit G
attached hereto and made a part hereof or (b) to the extent that any
such tenant is not required to execute an Estoppel Certificate in the
Form of Exhibit G, then either (i) an estoppel certificate from Seller
in the form of Exhibit G or (ii) an estoppel certificate from such
tenant certifying only as to those matters which the tenant is required
to certify to under the terms of its Space Lease (collectively, the
"Tenant Estoppel Certificates"). In the event that any Tenant Estoppel
Certificates are executed by Seller (a "Seller Estoppel"), Seller agrees
to indemnify Buyer and hold Buyer harmless from any and all losses,
liabilities, claims, costs and expenses, including reasonable attorneys'
fees, incurred by Buyer after Closing as a direct result of, and only to
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the extent same directly results from, a false statement made by Seller
in said Seller Estoppel. Seller agrees to use good faith efforts to
acquire tenant Estoppel Certificates from Tenants occupying spaces of
less than 1,000 square feet pursuant to Temporary Space Leases.
ARTICLE VI
CLOSING DELIVERIES
------------------
(a) The Buyer shall deliver the following documents at
Closing:
(i) with respect to the Property:
(A) an assignment and assumption of landlord's interest in
leases (an "Assignment of Leases") duly executed by the Buyer in
substantially the form of Exhibit A hereto;
(B) an assignment and assumption of contracts (an
"Assignment of Contracts") duly executed by the Buyer in
substantially the form of Exhibit B hereto; and
(C) notice letters ("Tenant Notices") duly executed by the
Buyer, in the form of Exhibit C attached hereto. Such notice
letters shall be retained by the Seller and delivered by the Seller
to each tenant and other such entity promptly following Closing.
(ii) with respect to the transactions contemplated hereunder:
(A) such other assignments, instruments of transfer, and
other documents as the Seller may reasonably require in order to
complete the transactions contemplated hereunder or to evidence
compliance by the Buyer with the covenants, agreements,
representations and warranties made by it hereunder, in each case,
duly executed by the Buyer;
(B) a duly executed and sworn Secretary's Certificate
from the Buyer (or the general partners of the Buyer, where
appropriate) certifying that the Buyer has taken all necessary
action to authorize the execution of all documents being
delivered hereunder and the consummation of all of the
transactions contemplated hereby and that such authorization
has not been revoked, modified or amended;
(C) an executed and acknowledged Incumbency Certificate
from the Buyer (or the general partners of the Buyer, where
appropriate) certifying the authority of the officers of the
Buyer (or the general partner of the Buyer, where appropriate)
to execute this Agreement and the other documents delivered by
the Buyer to the Seller at the Closing; and
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(D) all consents, approvals or waivers listed on
Schedule I on terms satisfactory to the Seller.
(b) The Seller shall deliver the following documents at
Closing:
(i) with respect to the Property:
(A) a special warranty deed (a "Deed") in
substantially the form of Exhibit D (with any necessary
modifications in order to conform with the local laws for
recording in the land records in the jurisdiction in
which the Property is located), duly executed by the
Seller, without recourse, which deed, upon proper
recording by the Buyer, shall be sufficient to transfer
and convey to the Buyer whatever rights in the Property
the Seller has acquired subject only to the Permitted
Exceptions;
(B) the Assignment of Leases duly executed by the
Seller, together with copies, and if available, originals
of the Space Leases referred to in such assignment;
(C) a ▇▇▇▇ of sale (a "▇▇▇▇ of Sale") duly executed
by the Seller in substantially the form of Exhibit E
hereto, relating to all fixtures, chattels, equipment and
articles of personal property owned by the relevant
Seller which are currently located upon or attached to
the Property;
(D) the Assignment of Contracts duly executed by
the Seller;
(E) all keys to the Property which are in the Seller's
possession;
(F) an affidavit that the Seller is not a "foreign
person" within the meaning of the Foreign Investment in Real
Property Tax Act of 1980, as amended, in substantially the
form of Exhibit F hereto; and
(G) Tenant Estoppel Certificates and/or Seller Estoppels in
satisfaction of Section 5.2(f) hereof.
(ii) with respect to the transactions contemplated hereunder:
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(A) such other assignments, instruments of transfer, and
other documents as the Buyer may reasonably require in order
to complete the transactions contemplated hereunder or to
evidence compliance by the Seller with the covenants,
agreements, representations and warranties made by it
hereunder;
(B) a duly executed and sworn Secretary's Certificate
from the Seller (or the general partners of the Seller, where
appropriate) certifying that the Seller has taken all
necessary action to authorize the execution of all documents
being delivered hereunder and the consummation of all of the
transactions contemplated hereby and that such authorization
has not been revoked, modified or amended; and
(C) an executed and acknowledged Incumbency Certificate
from the Seller (or the general partners of the Seller, where
appropriate) certifying the authority of the officers of the
Seller (or the general partner of the Seller, where
appropriate) to execute this Agreement and the other documents
delivered by the Seller to the Buyer at the Closing.
(iii) In the event any Asset-Related Property is not assignable
(such as a letter of credit that is not transferable), the Seller
shall use commercially reasonable efforts to provide the Buyer, at
no cost to the Seller, with the economic benefits of such property
by enforcing such property (solely at the Buyer's direction) for
the benefit and at the expense of the Buyer.
ARTICLE VII
INSPECTIONS
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Section 7.1 Right of Inspection. Prior to the Closing, the Buyer
and its agents shall have the right to inspect the Property during business
hours on Business Days, including the right to interview the tenants under
Space Leases, provided that (a) the Buyer shall first give the Seller
reasonable advance notification of its intention to conduct any such
inspection or interview (at least 48 hours), (b) the Buyer shall permit a
representative of the Seller to accompany the Buyer and/or its agents during
any such inspection or interview if the Seller shall make such a
representative available and (c) such inspection or interview shall not
unreasonably impede the normal day-to-day business operation of the Property.
The Buyer's right of inspection of the Property shall be subject to the
rights of tenants. The Buyer hereby indemnifies and agrees to defend and
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hold the Seller harmless from all loss, cost (including, without limitation,
reasonable attorneys' fees), claim or damage arising in connection with or
from any such inspection by the Buyer or its agents. The provisions of this
Article shall survive the Closing.
Section 7.2 Due Diligence Period.
(a) The Buyer confirms to the Seller that the Buyer has conducted
a detailed inspection of the Asset File, has made multiple site visits and in
certain instances consulted with third party professionals in satisfying
itself that the Property is appropriate for the Buyer's acquisition.
Notwithstanding the foregoing, in order to confirm preliminary information
with third party professionals, review materials requested but not delivered,
clarify certain discrepancies, conduct more complete Phase I environmental
and engineering analyses and complete its investigation, the Buyer, for the
period ending the day that is thirty (30) days after the date of this
Agreement (the "Due Diligence Expiration Date"), shall have the right to
conduct or cause to be conducted, at the Buyer's sole cost, risk and expense,
such inspections, tests, examinations and studies of the Property as the
Buyer deems necessary or appropriate; to further examine all applicable
records relating to the income, operation and maintenance of the Property; to
determine compliance of the Property with applicable laws and regulations,
including, without limitation, zoning, building, land use and environmental
protection laws; and to further confirm certain title matters. The
provisions of Section 7.1 above shall apply to any on-site investigations or
inspections to be made by the Buyer.
(b) If the Buyer, in its judgment, does not notify Seller by
written notice on or before 5:00 p.m. (E.D.T.) on the Due Diligence
Expiration Date (TIME BEING OF THE ESSENCE with respect to such notice) that
it is waiving its right to terminate the Agreement, then this Agreement shall
be deemed terminated, the ▇▇▇▇▇▇▇ Money shall be returned to the Buyer and
neither party shall have any further rights or obligations to the other,
except for those expressly stated to survive the termination of this
Agreement.
ARTICLE VIII
TITLE AND PERMITTED EXCEPTIONS
------------------------------
Section 8.1 Permitted Exceptions. The Property shall be sold and
is to be conveyed, and the Buyer agrees to purchase the Property, subject to
the Permitted Exceptions.
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Section 8.2 Title Report. The Buyer has received and/or reviewed
a copy of the Existing Title Policy and the Existing Survey. Promptly after
the date of this Agreement the Seller shall order an updated survey and an
updated title commitment with respect to the Property and the Seller shall
(a) instruct First American Title Insurance Company, as the title agent, and
the surveyor delivering such updated items to furnish copies of all updated
commitments and surveys to Buyer's counsel at the address set forth in
Section 14.9 hereof and (b) (1) with respect to the Existing Title Policy and
Existing Survey, within ten (10) Business Days after receipt of Buyer's
counsel and (2) within five (5) Business Days after issuance of any updated
documents, give notice to the Seller specifying all title exceptions set
forth in such documents which the Buyer claims are not Permitted Exceptions.
In the event Buyer fails to notify Seller within the time periods specified
above that it believes matters disclosed therein are not Permitted
Exceptions, such matters shall be deemed Permitted Exceptions and Buyer shall
be deemed to have waived its right to object thereto.
Section 8.3 Use of Purchase Price to Discharge Title Exceptions.
With respect to the Property, if, at the Closing, there are any title
exceptions applicable to the Property which are not Permitted Exceptions and
which the Seller is obligated by this Agreement or elects to pay and
discharge, the Seller may use any portion of the Purchase Price to satisfy
the same, provided that the Seller shall have delivered to the Buyer at the
Closing instruments in recordable form sufficient to satisfy such title
exceptions of record, together with the cost of any applicable recording or
filing fees. The Buyer, if request is made within a reasonable time prior to
the Closing, agrees to provide at the Closing separate certified or cashier's
checks as requested, aggregating up to the amount of the balance of the
Purchase Price to be delivered at Closing, to facilitate the satisfaction of
any such title exceptions. The existence of any such liens or encumbrances
shall not be deemed objections to title if the Seller shall comply with the
foregoing requirements. Any unpaid liens for taxes, water charges and
assessments applicable to the period prior to the Closing Date shall not be
objections to title, but the amount thereof plus any interest and penalties
thereon shall be deducted from the Cash Balance of the Purchase Price,
subject to the provisions for apportionment of taxes, water charges and
assessments contained in Article X of this Agreement.
Section 8.4 Inability to Convey. Except as expressly set forth in
Section 8.6, nothing contained in this Agreement shall be deemed to require
the Seller to take or bring any action or proceeding or any other steps to
remove any title exception or to expend any moneys therefor, nor shall the
Buyer have any right of action against the Seller, at law or in equity, for
the Seller's inability to convey title subject only to the Permitted
Exceptions.
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Section 8.5 Rights in Respect of Inability to Convey. In the event
that the Seller shall be unable to convey title to the Property, subject only
to the Permitted Exceptions and the Buyer shall not, prior to the Closing
Date (as it may have been adjourned in accordance with this Agreement), give
notice to the Seller that the Buyer is willing to waive objection to each
title exception which is not a Permitted Exception and close this transaction
without abatement of the Purchase Price, credit or allowance of any kind or
any claim or right of action against the Seller for damages or otherwise, the
Seller shall have the right, at the Seller's sole election, to take such
action as the Seller shall deem advisable to discharge each such title
exception which is not a Permitted Exception. In the event the Seller shall
elect to take action to discharge each such title exception which is not a
Permitted Exception, the Seller shall be entitled to one or more adjournments
of the Closing Date for a period not to exceed sixty (60) days in the
aggregate (inclusive of any adjournments made by the Seller pursuant to
Section 8.6 below) and the Closing shall be adjourned to a date specified by
the Seller not beyond such sixty(60) day period. If, for any reason
whatsoever, the Seller shall not have succeeded in discharging each such
title exception at the expiration of such adjournment(s) and if the Buyer
shall not, prior to the expiration of the last of such adjournments, give
notice to the Seller that the Buyer is willing to waive objection to each
such title exception and to close this transaction without abatement of the
Purchase Price, credit or allowance of any kind or any claim or right of
action against the Seller for damages or otherwise, this Agreement shall be
deemed to be terminated as of the last date to which the Closing Date was
adjourned by the Seller pursuant to this Article VIII. Upon any termination
of this Agreement pursuant to this Section, (I) the ▇▇▇▇▇▇▇ Money shall be
refunded to the Buyer and (II) neither party shall have any further rights or
obligations hereunder other than those which expressly survive the
termination of this Agreement. No action taken by the Seller to discharge,
or attempt to discharge, any purported title exception shall be an admission
that any such purported title exception is not a Permitted Exception. The
provisions of this Section 8.5 shall be subject to Seller's and Purchaser's
rights and obligations with respect to Voluntary Title Exceptions set forth
in Section 8.6.
Section 8.6 Voluntary Title Exceptions. If, from time to time
prior to the Closing, the Buyer shall become aware of any Voluntary Title
Exceptions, then the Buyer shall promptly notify the Seller thereof, which
notice shall describe in reasonable detail the Voluntary Title Exceptions(s).
The Seller shall discharge all Voluntary Title Exceptions on or prior to
Closing. The Seller shall be entitled to one or more adjournments of the
Closing Date not to exceed sixty (60) days in the aggregate (inclusive of any
adjournments made by the Seller pursuant to Section 8.5 hereof) to discharge
Voluntary Title Exceptions.
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Section 8.7 The Buyer's Right to Accept Title. Notwithstanding the
foregoing provisions of this Article VIII, the Buyer may, by notice given to
the Seller at any time prior to the Closing Date (as it may have been
adjourned by the Seller pursuant to this Article VIII), elect to accept such
title as the Seller can convey, notwithstanding the existence of any title
exceptions which are not Permitted Exceptions. In such event, this Agreement
shall remain in effect and the parties shall proceed to Closing but, except
to the extent set forth in Section 8.6, the Buyer shall not be entitled to
any abatement of the Purchase Price, any credit or allowance of any kind or
any claim or right of action against the Seller for damages or otherwise by
reason of the existence of any title exceptions which are not Permitted
Exceptions.
Section 8.8 Cooperation. The Buyer and the Seller shall cooperate
with the title company in connection with obtaining title insurance insuring
title to the Property subject only to the Permitted Exceptions. In
furtherance and not in limitation of the foregoing, at or prior to the
Closing, the Buyer and the Seller shall deliver to the title company such
affidavits, certificates and other instruments as are reasonably requested by
such title company and customarily furnished in connection with the issuance
of owner's policies of title insurance, including, without limitation, (i)
evidence sufficient to establish (x) the legal existence of the Buyer and the
Seller and (y) the authority of the respective signatories of the Seller and
the Buyer to bind the Seller and the Buyer, as the case may be, and (ii) a
certificate of good standing of the Seller.
ARTICLE IX
TRANSACTION COSTS; RISK OF LOSS
-------------------------------
Section 9.1 Transaction Costs. In addition to their respective
apportionment obligations hereunder, (a) the Seller and the Buyer shall each
be responsible for the payment of the costs of their respective legal
counsel, advisors and other professionals employed thereby in connection with
the sale of the Asset; b) the Buyer shall be responsible for all costs and
expenses associated with (i) the Buyer's due diligence, (ii) the policy
premiums in respect of any owner's and mortgagee title insurance obtained by
the Buyer (if any) and the costs of any endorsements, coinsurance,
reinsurance or affirmative coverage requested by Buyer or Buyer's lender,
(iii) all costs and expenses of obtaining any financing the Buyer may elect
to obtain (including any fees, financing costs, transfer taxes, mortgage and
recordation taxes and intangible taxes in connection therewith), (iv) all
fees and costs, if any, due as a result of, or in connection with, the
portion of the Purchase Price that is in excess of $34,000,000 and (v) all
other costs which are the responsibility under applicable law for the Buyer
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to pay (including, without limitation, all sales and use taxes due as a
result of the sale of the Asset); and (c) the Seller shall be responsible for
(i) all costs associated with title reports or abstracts with respect to the
Property as well as all survey and search costs and updates related thereto
and (ii) the fee due to Andover Corporation, a California corporation,
licensed as a real estate broker in the state of California(which fee shall
not exceed $680,000). Except with respect to that portion of such charges
and taxes due as a result of the Purchase Price being in excess of
$34,000,000 (which portion of such charges and taxes shall be paid for by
Buyer), Seller and Buyer shall split equally all costs in connection with
delivery and recording of the instruments relating to the transfer of the
Asset and transfer and real estate conveyance taxes chargeable in connection
with this transaction. Each party to this Agreement shall indemnify the
other parties and their respective successors and assigns from and against
any and all loss, damage, cost, charge, liability or expense (including court
costs and reasonable attorneys' fees) which such other party may sustain or
incur as a result of the failure of either party to timely pay any of the
aforementioned taxes, fees or other charges for which it has assumed
responsibility under this Section.
Section 9.2 Risk of Loss. (a) If, on or before the Closing Date,
the Property or any portion thereof shall be (i) damaged or destroyed by fire
or other casualty or (ii) taken or threatened to be taken as a result of any
condemnation or eminent domain proceeding, the Seller shall promptly notify
the Buyer.
(b) As soon as practicable after the occurrence of such casualty
or an actual condemnation, as opposed to a threatened condemnation , Seller
shall notify Buyer of (i) the estimated cost of restoration of the Property
with respect to any casualty as determined by written estimate of an
independent construction contractor chosen by Seller with Buyer's approval
not to be unreasonably withheld or (ii) the estimated loss in value of the
Property as a result of such condemnation as determined by written estimate
of an independent appraisal firm chosen by Seller, with Buyer's approval not
to be unreasonably withheld. If the estimated cost of restoration arising out
of a casualty or estimated loss in value arising out of a condemnation, shall
be $3,500,000 or less, then notwithstanding any provision in this Agreement
to the contrary, the Seller will credit against the Purchase Price payable by
the Buyer (applied to the installment of the Purchase Price due at the
Closing at which the Property that is the subject of the casualty or
condemnation is transferred to Buyer) an amount equal to the net proceeds, if
any, received by the Seller from such casualty or condemnation less any
amounts spent by the Seller or Property Owner prior to Closing with respect
to a restoration of the subject Property. If as of the Closing Date, the
Seller or Property Owner has not received any such insurance or condemnation
proceeds then the parties shall nevertheless consummate on the Closing Date
the conveyance of the relevant Asset (without any deduction for such
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insurance or condemnation proceeds) and the Seller will at Closing assign to
the Buyer all rights of the Seller, if any, to the insurance or condemnation
proceeds and to all other rights or claims arising out of or in connection
with such casualty or condemnation. If the estimated cost of restoration
arising from a casualty or the loss in value of the Property arising from a
condemnation exceeds $3,500,000, then Buyer shall have the option to either
(i) terminate this Agreement and the ▇▇▇▇▇▇▇ Money being held by Escrow Agent
shall be immediately returned to Buyer, and thereupon this Agreement shall
terminate and be of no further force and effect or (ii) accept the Property
"as is" together with an assignment of the insurance or condemnation
proceeds. Notwithstanding the foregoing, in the event that a condemnation or
casualty occurs as more particularly described above, and either (a) the
casualty or condemnation is in excess of $3,500,000 and the Buyer decides to
proceed to Closing, or (b) if the casualty or condemnation is less than
$3,500,000, Seller shall, (i) in the event Seller has not paid the deductible
on the insurance policy, credit to Buyer an amount equal to such deductible
to be paid by Buyer or (ii) in the event Seller has paid the deductible,
Seller shall not deduct such amount from any credits taken by Seller in
connection with monies spent to restore or repair the Property.
ARTICLE X
ADJUSTMENTS
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Unless otherwise provided below, the following are to be adjusted
and prorated between the Sellers and the Buyer as of 11:59 P.M. on the day
preceding the Closing Date, based upon a 365 day year, and the net amount
thereof shall be added to (if such net amount is in the Seller's favor) or
deducted from (if such net amount is in the Buyer's favor) the Purchase Price
payable at Closing:
Section 10.1 Fixed Rents.
(a) Fixed rents (collectively, "Fixed Rents") paid or payable by
tenants under the Space Leases in connection with their occupancy of the
Property shall be adjusted and prorated on an if, as and when collected
basis. Any Fixed Rents collected by the Buyer or the Seller after the
Closing from any tenant who owes Fixed Rents for periods prior to the
Closing, shall be applied (i) first, in payment of Fixed Rents owed by such
tenant for the month in which the Closing Date occurs, (ii) second, in
payment of Fixed Rents owed by such tenant for the period prior to the month
in which the Closing Date occurs but not with respect to any period more than
60 days prior to the Closing Date, (iii) third, after Fixed Rents for all
prior periods have been paid in full, in payment of Fixed Rents owed by such
tenant for the period (if any) after the month in which the Closing Date
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occurs and (iv) fourth, in payment of Fixed Rents owed by such tenant for
periods more than 60 days prior to the Closing Date. Each such amount, less
any costs of collection (including reasonable counsel fees) reasonably
allocable thereto, shall be adjusted and prorated as provided above, and the
party who receives such amount shall promptly pay over to the other party the
portion thereof to which it is so entitled.
(b) The Buyer shall ▇▇▇▇ tenants who owe Fixed Rents for periods
prior to the Closing on a monthly basis for a period of six consecutive
months following the Closing Date and shall use commercially reasonable
efforts to collect such past due Fixed Rents. Notwithstanding the foregoing,
if the Buyer shall be unable to collect such past due Fixed Rents, the Seller
shall have the right, with the prior approval of Buyer, not to be
unreasonably withheld, delayed or conditioned, to pursue tenants to collect
such delinquencies (including, without limitation, the prosecution of one or
more lawsuits), but the Seller shall not be entitled to evict (by summary
proceedings or otherwise) any such tenants. Any payment by a tenant in an
amount less than the full amount of Fixed Rents and Overage Rent (as defined
below) then due and payable by such tenant shall be applied first to Fixed
Rents (in the order of priority as to time periods as is set forth above) to
the extent of all such Fixed Rents then due and payable by such tenant, and
thereafter to Overage Rents (in the order of priority as to time periods as
is set forth in Section 10.2 below).
Section 10.2 Overage Rents.
(a) With respect to any Space Lease that provides for (i) the
payment of additional rent based upon a percentage of the tenant's business
during a specified annual or other period (sometimes referred to as
"percentage rent"), (ii) so-called common area maintenance or "CAM" charges
or (iii) so-called "escalation rent" or additional rent based upon increases
in real estate taxes or operating expenses or labor costs or cost of living
or ▇▇▇▇▇▇'▇ wages or otherwise (such percentage rent, CAM charges, escalation
rent and additional rent being collectively called "Overage Rent"), such
Overage Rent shall be adjusted and prorated on an if, as and when collected
basis.
(b) As to any Overage Rent in respect of an accounting period that
shall have expired prior to the Closing but which shall be paid after the
Closing, the Buyer agrees that it will pay the entire amount over to the
Seller upon receipt thereof, less any costs of collection (including
reasonable counsel fees) reasonably allocable thereto. The Buyer agrees that
it shall (i) promptly render bills for any Overage Rent in respect of an
accounting period that shall have expired prior to the Closing but which
shall be paid after the Closing, (ii) ▇▇▇▇ tenants such Overage Rent
attributable to an accounting period that shall have expired prior to the
Closing on a monthly basis for a period of six consecutive months thereafter
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and (iii) use commercially reasonable efforts to collect Overage Rent.
Notwithstanding the foregoing, if the Buyer shall be unable to collect such
Overage Rent, the Seller shall have the right, upon prior written notice to
the Buyer, to pursue tenants to collect such delinquencies (including,
without limitation, the prosecution of one or more lawsuits), but the Seller
shall not be entitled to evict (by summary proceedings or otherwise) any such
tenants. The Seller shall furnish to the Buyer all information relating to
the period prior to the Closing that is reasonably necessary for the billing
of such Overage Rent and the Buyer will deliver to the Seller, concurrently
with the delivery to tenants, copies of all statements relating to Overage
Rent for a period prior to the Closing. The Buyer shall ▇▇▇▇ tenants for
Overage Rents for accounting periods prior to the Closing in accordance with
and on the basis of such information furnished by the Seller.
(c) If, prior to the Closing, the Seller shall have received any
installments of Overage Rent attributable to Overage Rent for periods from
and after the Closing Date, such sum shall be apportioned at the Closing.
If, after the Closing, the Buyer shall receive any installments of Overage
Rent attributable to Overage Rent for periods prior to the Closing, such sum
(less any costs and expenses (including reasonable counsel fees) incurred by
the Buyer in the collection of such Overage Rent) shall be paid by the Buyer
to the Seller promptly after the Buyer receives payment thereof.
(d) Any payment by a tenant on account of Overage Rent (to the
extent not applied against Fixed Rents due and payable by such tenant in
accordance with subsection 10.1(b) above) shall be applied to Overage Rents
then due and payable in the following order of priority, (i) first, in
payment of Overage Rent for the accounting period in which the Closing Date
occurs, (ii) second, in payment of Overage Rent for the accounting period
preceding the accounting period in which the Closing Date occurs, in the
chronological order in which such payments are due for such accounting period
pursuant to the applicable Space Lease and (iii) third, in payment of Overage
Rent for accounting periods following the Closing Date.
(e) To the extent that any portion of Overage Rent is required to
be paid monthly by tenants on account of estimated amounts for any calendar
year (or, if applicable, any lease year or tax year or any other applicable
accounting period), and at the end of such calendar year (or lease year, tax
year or other applicable accounting period, as the case may be), such
estimated amounts are to be recalculated based upon the actual expenses,
taxes and other relevant factors for that calendar (lease or tax) year or
other applicable accounting period, with the appropriate adjustments being
made with such tenants, then such portion of the Overage Rent shall be
prorated between the Seller and the Buyer at the Closing based on such
estimated payments actually paid by tenants (i.e., with the Seller entitled
to retain all monthly or other periodic installments of such amounts paid by
tenants with respect to periods prior to the calendar month or other
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applicable installment period in which the Closing occurs, the Seller to pay
to the Buyer at the Closing all monthly or other periodic installments of
such amounts theretofore received by the Seller with respect to periods
following the calendar month or other applicable installment period in which
the Closing occurs and the Seller and the Buyer to apportion as of the
Closing Date all monthly or other periodic installments of such amounts paid
by tenants with respect to the calendar month or other applicable installment
period in which the Closing occurs). At the time(s) of final calculation and
collection from (or refund to) each tenant of the amounts in reconciliation
of actual Overage Rent for a period for which estimated amounts paid by such
tenant have been prorated, there shall be a re-proration between the Seller
and the Buyer. If, with respect to any tenant, the recalculated Overage Rent
exceeds the estimated amount paid by such tenant, upon collection from the
tenant, (i) the entire excess shall be paid by the Buyer to the Seller, if
the accounting period for which such recalculation was made expired prior to
the Closing and (ii) such excess shall be apportioned between the Seller and
the Buyer as of the Closing Date (on the basis described in the first
sentence of subsection 10.2 above), if the Closing occurred during the
accounting period for which such recalculation was made, with the Buyer
paying to the Seller the portion of such excess which the Seller is so
entitled to receive. If, with respect to any tenant, the recalculated
Overage Rent is less than the estimated amount paid by such tenant, (1) the
entire shortfall shall be paid by the Seller to the Buyer (or, at the
Seller's option, directly to the tenant in question), if the accounting
period for which such recalculation was made expired prior to the Closing and
(2) such shortfall shall be apportioned between the Seller and the Buyer as
of the Closing Date (on the basis described in the first sentence of
subsection 10.2(c) above), if the Closing occurred during the accounting
period for which such recalculation was made, with the Seller paying to the
Buyer (or, at the Seller's option, directly to the tenant in question) the
portion of such shortfall so allocable to the Seller.
(f) Until such time as all amounts required to be paid to the
Seller by the Buyer pursuant to Section 10.1 and this Section 10.2 shall have
been paid in full, the Buyer shall furnish to the Seller not less frequently
than monthly a reasonably detailed accounting of such amounts payable by the
Buyer, which accounting shall be delivered to the Seller on or prior to the
15th day following the last day of each calendar month from and after the
calendar month in which the Closing occurs. The Seller shall have the right
from time to time following the Closing, on prior notice to the Buyer, during
ordinary business hours on Business Days, to review the Buyer's rental
records with respect to the Property to ascertain the accuracy of such
accountings.
Section 10.3 Taxes and Assessments. Real estate taxes and
assessments payable in the year in which the Closing occurs shall be adjusted
and prorated based on (a) the periods of ownership by the Seller and the
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Buyer during such year and (b) the most current official real property tax
information available from the county assessor's office where the Property is
located or other assessing authorities. If real property tax and assessment
figures for the taxes or assessments to be apportioned between the Buyer and
the Seller pursuant to this Section are not available, real property taxes
shall be prorated based on the most recent assessment, subject to further and
final adjustment when the tax rate and/or assessed valuation for such taxes
and assessments for the Property is fixed. In the event that the Property or
any part thereof shall be or shall have been affected by an assessment or
assessments, whether or not the same become payable in annual installments,
the Seller shall, at the Closing, be responsible for any installments due
prior to the Closing and the Buyer shall be responsible for any installments
due on or after the Closing.
Section 10.4 Water and Sewer Charges. Water rates, water meter
charges, sewer rents and vault charges, if any (other than any such charges,
rates or rents which are payable by tenants of the Property pursuant to such
tenants' Space Leases), shall be adjusted and prorated on the basis of the
fiscal period for which assessed. If there be a water meter, or meters, on
the Property, the Seller agrees that they shall at the Closing furnish a
reading of same to a date not more than 30 days prior to the Closing and the
unfixed meter charges and the unfixed sewer rent thereon for the time
intervening from the date of the last reading shall be apportioned on the
basis of such last reading, and shall be appropriately readjusted after the
Closing on the basis of the next subsequent bills. Unmetered water charges
shall be apportioned on the basis of the charges therefor for the same period
of the preceding calendar year, but applying the current rate thereto. As to
any unpaid water charges or sewer rents payable directly by tenants, the
Buyer shall consummate the Closing subject to such unpaid charges and rents
and any lien resulting therefrom, without credit against the Purchase Price
or any claim or right of action against the Seller.
Section 10.5 Utility Charges. Gas, steam, electricity and other
public utility charges (other than any such charges which are payable by
tenants of the Property pursuant to such tenants' Space Leases) will be paid
by the Seller to the utility company to the Closing Date. The Seller shall
arrange for a final reading of all utility meters (covering gas, water, steam
and electricity) as of the Closing, except meters the charges of which are
payable by tenants of the Property pursuant to such tenants' Space Leases.
The Seller and the Buyer shall jointly execute a letter to each of such
utility companies advising such utility companies of the termination of the
Seller's responsibility for such charges for utilities furnished to the
Property as of the date of the Closing and commencement of the Buyer's
responsibilities therefor from and after such date. If a ▇▇▇▇ is obtained
from any such utility company as of the Closing, the Seller shall pay such
▇▇▇▇ on or before the Closing. If such ▇▇▇▇ shall not have been obtained on
or before the Closing, the Seller shall, upon receipt of such ▇▇▇▇, pay all
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such utility charges as evidenced by such ▇▇▇▇ or bills pertaining to the
period prior to the Closing, and the Buyer shall pay all such utility charges
pertaining to the period thereafter. Any ▇▇▇▇ which shall be rendered which
shall cover a period both before and after the date of Closing shall be
apportioned between the Buyer and the Seller as of the Closing.
Section 10.6 Material Contracts. Charges and payments under all
Material Contracts.
Section 10.7 Leasing Costs. (a) The Buyer will be responsible
for all capital costs, tenant improvement costs, relocation costs, temporary
leasing costs, free rent and rent abatements, leasing commissions, legal,
design and other professional fees, and other expenses ("TI Costs") that
became due and payable on or after the date hereof with respect to all Space
Leases and Temporary Leases executed before, on, or after the date of this
Agreement; provided, however, that Seller shall be responsible for all TI
Costs due and payable within 60 days of the Closing Date with respect to
Space Leases and Temporary Leases entered into before the date hereof.
(b) To the extent that the Seller has paid any of the items
referenced above as Buyer's responsibility prior to Closing, the Purchase
Price will be increased at Closing by the aggregate amount of such
expenditures upon presentation of an invoice therefor. The Buyer will pay
all other costs and expenses described in this Section 10.7 as and when the
same are due.
(c) In the event that Seller executes any new Space Lease or
Temporary Lease after the date of this Agreement in accordance with
subsection 3.3(d) (including, without limitation, Space Leases for The Gap
and Old Navy regardless of (i) whether same are approved by the Buyer either
before or after the date hereof and regardless of whether Seller has already
executed a Letter of Intent with respect thereto), and in either event such
Space Lease requires the construction of capital improvements to the
Property, tenant fixtures or improvements or the payment of leasing or
brokerage commission(s) at the expense of the landlord, the Buyer shall
assume the obligation to pay and/or at Closing to reimburse the Seller for
the paid portion of the cost of such improvements and leasing or brokerage
commission(s) and any other costs associated with such Space Lease.
Section 10.8 Miscellaneous Revenues. Revenues, if any, arising
out of telephone booths, vending machines, or other income-producing
agreements.
Section 10.9 Supplies. Maintenance supplies in unopened
containers based on the Seller's actual cost therefor, including sales and/or
use tax.
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Section 10.10 Security Deposits. The actual amounts of the
security deposits provided for under the Space Leases being held by the
Seller as set forth on Schedule J less the Seller's proportionate share of
administrative fees, if any, to the extent such administrative fees are
allowed by the applicable Space Lease or by law) shall be assigned to the
Buyer by, at the Seller's option, (i) payment of the amount thereof to the
Buyer, (ii) a credit to the Buyer against the balance of the Purchase Price
and/or (iii) assignment to the Buyer of the bank accounts (or other security)
in which same are held, which assignment shall be in form reasonably
acceptable to the depositary bank. Any such tenants' securities in form
other than cash shall be transferred to the Buyer by way of appropriate
instruments of transfer or assignment.
Section 10.11 Employee Costs. All salaries, wages, vacation pay
and other fringe benefits (including, without limitation, payments and
deposits, if any, with respect to social security, unemployment compensation,
employee health, life and disability insurance, sick pay and welfare and
pension fund contributions) of the employees with respect to the Property in
connection with the management, operation or maintenance of the Property
shall be adjusted and prorated between the Seller and the Buyer as of 11:59
P.M. on the day preceding the Closing Date. The Buyer acknowledges that such
employees may be union employees and agrees to be responsible for all
severance pay and other obligations arising as a result of any termination by
the Buyer of any such employees.
Section 10.12 Other. If applicable, the Purchase Price shall be
adjusted at Closing in accordance with Section 9.2 and to reflect the
adjustment of any other item which, under the terms of this Agreement, is to
be apportioned at Closing.
Section 10.13 Re-Adjustment. Except for re-adjustments of Overage
Rent to be made pursuant to subsection 10.2(e), if any such items are not
determinable at the Closing, the adjustment shall be made subsequent to the
Closing when the charge is determined. Any errors or omissions in computing
adjustments at the Closing shall be promptly corrected, provided that the
party seeking to correct such error or omission shall have notified the other
party of such error or omission on or prior to the date that is 60 days
following the Closing Date. The provisions of this Article X shall survive
the Closing.
ARTICLE XI
INDEMNIFICATION
---------------
Section 11.1 Indemnification by the Seller. With respect to the
Asset and Property, the Seller thereof shall indemnify and hold the Buyer,
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its affiliates, members and partners, and the partners, shareholders,
officers, directors, employees, representatives and agents of each of the
foregoing (collectively, "Buyer-Related Entities") harmless from and against
any and all costs, fees, expenses, damages, deficiencies, interest and
penalties (including, without limitation, reasonable attorneys' fees and
disbursements) suffered or incurred by any such indemnified party in
connection with any and all losses, liabilities, claims, damages and expenses
("Losses"), arising out of, or in any way relating to, (i) any breach of any
representation or warranty of the Seller contained in this Agreement or in
any Schedule, certificate, instrument or other document delivered pursuant
hereto, (ii) any breach of any covenant of the Seller contained in this
Agreement, and (iii) matters under any of the Space Leases which arise prior
to the Closing Date, such obligation to survive the Closing subject to
Section 11.3.
Section 11.2 Indemnification by the Buyer. The Buyer shall
indemnify and hold the Sellers, their affiliates, members and partners, and
the partners, shareholders, officers, directors, employees, representatives
and agents of each of the foregoing (collectively, "Seller-Related Entities")
harmless from any and all Losses arising out of, or in any way relating to,
(i) any breach of any representation or warranty by the Buyer contained in
this Agreement or in any Schedule, certificate, instrument or other document
delivered pursuant hereto or in connection herewith, (ii) any breach of any
covenant of the Buyer contained in this Agreement, (iii) matters under any of
the Space Leases which arise from and after the Closing Date and (iv)
Seller's delivery of a notice to prepay the Third Party Loan to the Third
Party lender and, without regard to any other provisions of this Agreement
(including, without limitation, the provisions of Article XIII), Buyer's
default under this Agreement, such obligation to survive the Closing or
termination of this Agreement subject to Section 11.3.
Section 11.3 Survival. The representations and warranties
contained in this Agreement and the indemnification by Seller with respect to
matters arising under any of the Space Leases prior to the Closing Date shall
survive for a period of 90 days after the Closing (the "Survival Period")
provided, any action, suit or proceeding with respect to the representations
and warranties is properly commenced within the Survival Period. The
covenants contained in this Agreement to the extent to be performed prior to
or at Closing shall not survive after the Closing. All other covenants,
indemnities and provisions of this Agreement shall survive the Closing unless
otherwise provided herein. Notwithstanding anything to the contrary
contained herein, Seller's obligation to indemnify Buyer shall terminate and
be null and void unless Buyer files an action, suit or proceeding against
Seller seeking recovery from Seller for its obligations under this Article 11
if properly commenced by Buyer within the appropriate survival period more
particularly set forth in this subsection 11.3.
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Section 11.4 Indemnification as Sole Remedy. If the Closing has
occurred, the sole and exclusive remedy available to a party in the event of
a breach by the other party to this Agreement of any representation,
warranty, covenant or other provision of this Agreement which survives the
Closing shall be the indemnifications provided for under this Article XI.
ARTICLE XII
TAX CERTIORARI PROCEEDINGS
--------------------------
Section 12.1 Prosecution and Settlement of Proceedings. If any
tax reduction proceedings in respect of the Property, relating to any fiscal
years ending prior to the fiscal year in which the Closing occurs, are
pending at the time of the Closing, the Seller reserves and shall have the
right to continue to prosecute and/or settle the same. If any tax reduction
proceedings in respect of the Property, relating to the fiscal year in which
the Closing occurs, are pending at the time of Closing, then the Seller
reserves and shall have the right to continue to prosecute and/or settle the
same; provided, however, that the Seller shall not settle any such proceeding
without the Buyer's prior written consent, which consent shall not be
unreasonably withheld or delayed. The Buyer shall reasonably cooperate with
the Seller in connection with the prosecution of any such tax reduction
proceedings.
Section 12.2 Application of Refunds or Savings. Any refunds or
savings in the payment of taxes resulting from such tax reduction proceedings
applicable to taxes payable during the period prior to the date of the
Closing shall belong to and be the property of the Seller, and any refunds or
savings in the payment of taxes applicable taxes payable from and after the
date of the Closing shall belong to and be the property of the Buyer;
provided, however, that if any such refund creates an obligation to reimburse
any tenants under Space Leases for any rents or additional rents paid or to
be paid, that portion of such refund equal to the amount of such required
reimbursement (after deduction of allocable expenses as may be provided in
the Space Lease to such tenant) shall, at the Seller's election, either (a)
be paid to the Buyer and the Buyer shall disburse the same to such tenants or
(b) be paid by the Seller directly to the tenants entitled thereto. All
attorneys' fees and other expenses incurred in obtaining such refunds or
savings shall be apportioned between the Seller and the Buyer in proportion
to the gross amount of such refunds or savings payable to the Seller and the
Buyer, respectively (without regard to any amounts reimbursable to tenants).
Section 12.3 Survival. The provisions of this Article XII shall
survive the Closing.
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ARTICLE XIII
DEFAULT
-------
Section 13.1 Default. (a) If the Buyer shall default in the
performance of its obligations under this Agreement to purchase the Asset by
the Closing Date, the Seller, as its sole and exclusive remedy hereunder
(except as set forth in the last sentence of this subsection (a)), shall be
entitled, after giving to Buyer seven days prior notice of its intention to
terminate this Agreement (and Buyer shall have failed within said seven days
to have cured the default)to terminate this Agreement, to direct the Escrow
Agent to deliver the ▇▇▇▇▇▇▇ Money to the Seller, and to retain the ▇▇▇▇▇▇▇
Money as liquidated damages, at which time this Agreement shall be terminated
and of no further force and effect except for the provisions which explicitly
survive such termination. The Buyer agrees that the Seller shall have the
right to retain the ▇▇▇▇▇▇▇ Money as liquidated damages without the necessity
of proving actual damages due to the difficulty of proving actual damages
resulting from the Buyer's default hereunder. Nothing in this Section shall
be deemed to limit the Seller's remedies with respect to a breach by the
Buyer of any of its obligations which survive the Closing.
(b) If the Seller shall default in the performance of its
obligations under this Agreement to cause the sale of the Asset by the
Closing Date, the Buyer, as its sole and exclusive remedy, shall be entitled,
after giving to Seller seven days prior notice of its intention to either
terminate this Agreement or seek specific performance hereof (and Seller
shall have failed within said seven day period to have cured the default)at
its option, either (i) to terminate this Agreement, direct Escrow Agent to
deliver the ▇▇▇▇▇▇▇ Money to the Buyer and retain the ▇▇▇▇▇▇▇ Money, at which
time this Agreement shall be terminated and of no further force and effect
except for the provisions which explicitly survive such termination or (ii)
specifically enforce the terms and conditions of this Agreement. Nothing in
this Section shall be deemed to limit the Buyer's remedies with respect to a
breach by the Seller of any of the Seller's obligations which survive the
Closing.
ARTICLE XIV
MISCELLANEOUS
-------------
Section 14.1 Exculpation of Seller. Notwithstanding anything to
the contrary contained herein, the Seller's shareholders, members, partners,
the partners of such partners, the shareholders of such partners, and the
trustees, officers, directors, employees, agents and security holders of the
-36-
Seller and the partners of the Seller assumes no personal liability for any
obligations entered into on behalf of the Seller and its individual assets
shall not be subject to any claims of any person relating to such
obligations. The foregoing shall govern any direct and indirect obligations
of the Seller under this Agreement.
Section 14.2 Brokers. (a) The Seller represents and warrants to
the Buyer that it has dealt with no broker, salesman, finder or consultant
with respect to this Agreement or the transactions contemplated hereby other
than Insignia whose fee Seller shall pay pursuant to the terms of a separate
agreement between Seller and Insignia. The Seller agrees to indemnify,
protect, defend and hold the Buyer harmless from and against all claims,
losses, damages, liabilities, costs, expenses (including reasonable
attorneys' fees and disbursements) and charges resulting from the Seller's
breach of the foregoing representation in this subsection (a). The
provisions of this subsection (a) shall survive the Closing and any
termination of this Agreement.
(b) The Buyer represents and warrants to the Seller that it has
dealt with no broker, salesman, finder or consultant with respect to this
Agreement or the transactions contemplated hereby other than Insignia. The
Buyer agrees to indemnify, protect, defend and hold the Seller harmless from
and against all claims, losses, damages, liabilities, costs, expenses
(including reasonable attorneys' fees and disbursements) and charges
resulting from the Buyer's breach of the foregoing representations in this
subsection (b). The provisions of this subsection (b) shall survive the
Closing and any termination of this Agreement.
Section 14.3 Confidentiality; Press Release; IRS Reporting
Requirements. (a) The Buyer and the Seller shall hold as confidential all
information disclosed in connection with the transaction contemplated hereby
and concerning each other, the Asset, this Agreement and the transactions
contemplated hereby and shall not release any such information to third
parties without the prior written consent of the other parties hereto, except
(i) any information which was previously or is hereafter publicly disclosed
(other than in violation of this Agreement or other confidentiality
agreements to which affiliates of the Buyer are parties), (ii) to their
partners, advisers, underwriters, analysts, employees, affiliates, officers,
directors, consultants, lenders, accountants, legal counsel or other advisors
of any of the foregoing, provided that they are advised as to the
confidential nature of such information and are instructed to maintain such
confidentiality and (iii) to comply with any law, rule or regulation. The
foregoing shall constitute a modification of any prior confidentiality
agreement that may have been entered into by the parties. The provisions of
this Section shall survive the Closing or the termination of this Agreement
for a period of 2 years.
-37-
(b) The Seller or the Buyer may issue a press release with respect
to this Agreement and the transactions contemplated hereby, provided that the
content of any such press release shall be subject to the prior written
consent of the other party hereto and in no event shall any such press
release issued by the Buyer disclose the identity of the Seller's direct or
indirect beneficial owners by name or the consideration paid to the Seller
for the Asset.
(c) For the purpose of complying with any information reporting
requirements or other rules and regulations of the IRS that are or may become
applicable as a result of or in connection with the transaction contemplated
by this Agreement, including, but not limited to, any requirements set forth
in proposed Income Tax Regulation Section 1.6045-4 and any final or successor
version thereof (collectively, the "IRS Reporting Requirements"), the Seller
and the Buyer hereby designate and appoint the Escrow Agent to act as the
"Reporting Person" (as that term is defined in the IRS Reporting
Requirements) to be responsible for complying with any IRS Reporting
Requirements. The Escrow Agent hereby acknowledges and accepts such
designation and appointment and agrees to fully comply with any IRS Reporting
Requirements that are or may become applicable as a result of or in
connection with the transaction contemplated by this Agreement. Without
limiting the responsibility and obligations of the Escrow Agent as the
Reporting Person, the Seller and the Buyer hereby agree to comply with any
provisions of the IRS Reporting Requirements that are not identified therein
as the responsibility of the Reporting Person, including, but not limited to,
the requirement that the Seller and the Buyer each retain an original
counterpart of this Agreement for at least four (4) years following the
calendar year of the Closing.
Section 14.4 Escrow Provisions. (a) The Escrow Agent shall hold
the ▇▇▇▇▇▇▇ Money in escrow in an interest-bearing bank account at [ ]
(the "Escrow Account").
(b) The Escrow Agent shall hold the ▇▇▇▇▇▇▇ Money in escrow in the
Escrow Account until the Closing or sooner termination of this Agreement and
shall hold or apply such proceeds in accordance with the terms of this
paragraph (b). The Seller and the Buyer understand that no interest is
earned on the ▇▇▇▇▇▇▇ Money during the time it takes to transfer into and out
of the Escrow Account. At the Closing, the ▇▇▇▇▇▇▇ Money shall be paid by
the Escrow Agent to, or at the direction of, the Seller. If for any reason
either party makes a written demand upon the Escrow Agent for payment of the
▇▇▇▇▇▇▇ Money, the Escrow Agent shall, within 24 hours give written notice to
the other party of such demand. If the Escrow Agent does not receive a
written objection within five business days after the giving of such notice,
the Escrow Agent is hereby authorized to make such payment. If the Escrow
Agent does receive such written objection within such five day period or if
for any other reason the Escrow Agent in good faith shall elect not to make
-38-
such payment, the Escrow Agent shall continue to hold such amount until
otherwise directed by joint written instructions from the parties to this
Agreement or a final judgment of a court of competent jurisdiction. However,
the Escrow Agent shall have the right at any time to deposit the ▇▇▇▇▇▇▇
Money with the clerk of the court of New York County. The Escrow Agent shall
give written notice of such deposit to the Seller and the Buyer. Upon such
deposit the Escrow Agent shall be relieved and discharged of all further
obligations and responsibilities hereunder.
(c) The parties acknowledge that the Escrow Agent is acting solely
as a stakeholder at their request and for their convenience, that the Escrow
Agent shall not be deemed to be the agent of either of the parties, and the
Escrow Agent shall not be liable to either of the parties for any act or
omission on its part, other than for its gross negligence or willful
misconduct. The Seller and the Buyer shall jointly and severally indemnify
and hold the Escrow Agent harmless from and against all costs, claims and
expenses, including attorneys' fees and disbursements, incurred in connection
with the performance of the Escrow Agent's duties hereunder.
(d) The Escrow Agent has acknowledged its agreement to these
provisions by signing this Agreement in the place indicated following the
signatures of the Seller and the Buyer.
Section 14.5 Successors and Assigns; No Third-Party
Beneficiaries. The stipulations, terms, covenants and agreements contained
in this Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective permitted successors and assigns
(including any successor entity after a public offering of stock, merger,
consolidation, purchase or other similar transaction involving a party
hereto) and nothing herein expressed or implied shall give or be construed to
give to any person or entity, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
Section 14.6 Assignment. This Agreement may not be assigned by
the Buyer without the consent of the prior written consent of the Seller.
The Buyer may designate an affiliate to which the Asset will be assigned at
the Closing, provided that the Buyer will continue to remain primarily liable
under this Agreement notwithstanding any such designation.
Section 14.7 Further Assurances. From time to time, as and when
requested by any party hereto, the other party shall execute and deliver, or
cause to be executed and delivered, all such documents and instruments and
shall take, or cause to be taken, all such further or other actions as such
other party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement.
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Section 14.8 Notices.
(a) To the Seller:
c/▇ ▇▇▇▇▇▇ Brothers Inc.
Three World Financial ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies thereof to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
(b) To the Buyer:
c/o Condor Acquisition Partners LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copies thereof to:
c/o Barker Pacific Group
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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All notices (i) shall be deemed to have been given on the date that the same
shall have been delivered in accordance with the provisions of this Section
and (ii) may be given either by a party or by such party's attorneys. Any
party may, from time to time, specify as its address for purposes of this
Agreement any other address upon the giving of 10 days' notice thereof to the
other parties.
Section 14.9 Entire Agreement. This Agreement, along with the
Exhibits and Schedules hereto contains all of the terms agreed upon between
the parties hereto with respect to the subject matter hereof, and all
understandings and agreements heretofore had or made among the parties hereto
are merged in this Agreement which alone fully and completely expresses the
agreement of the parties hereto.
Section 14.10 Amendments. This Agreement may not be amended,
modified, supplemented or terminated, nor may any of the obligations of the
Seller or the Buyer hereunder be waived, except by written agreement executed
by the party or parties to be charged.
Section 14.11 No Waiver. No waiver by either party of any failure
or refusal by the other party to comply with its obligations hereunder shall
be deemed a waiver of any other or subsequent failure or refusal to so
comply.
Section 14.12 Governing Law. This Agreement shall be governed by,
interpreted under, and construed and enforced in accordance with, the laws of
the State of New York.
Section 14.13 Submission to Jurisdiction. (a) Each of the Buyer
and the Seller irrevocably submits to the jurisdiction of (i) the Supreme
Court of the State of New York, New York County and (ii) the United States
District Court for the Southern District of New York for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of the Buyer and the Seller further
agrees that service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth above shall be
effective service of process for any action, suit or proceeding in New York
with respect to any matters to which it has submitted to jurisdiction as set
forth above in the immediately preceding sentence.
(b) Each of the Buyer and each seller irrevocably and
unconditionally waives trial by jury and agrees that any suit, action or
proceeding with respect to this Agreement or the transactions contemplated
hereby may be brought only in (i) the Supreme Court of the State of New York,
New York County and (ii) the United States District Court for the Southern
-41-
District of New York, and hereby further irrevocably and unconditionally
waives any objection that it may have to the venue of such suit, action or
proceeding in any such court or that such suit or proceeding in such court
was brought in an inconvenient court and agrees not to plead or claim same.
(c) In the event that any decree for specific performance obtained
in the State of New York can be implemented and enforced by a legal action,
if required, in the State of Maryland.
Section 14.14 Severability. If any term or provision of this
Agreement or the application thereof to any person or circumstances shall, to
any extent, be invalid or unenforceable, the remainder of this Agreement or
the application of such term or provision to persons or circumstances other
than those as to which it is held invalid or unenforceable shall not be
affected thereby, and each term and provision of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
Section 14.15 Section Headings. The headings of the various
Sections of this Agreement have been inserted only for purposes of
convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
Section 14.16 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart.
Section 14.17 Acceptance of Deed. The acceptance of the Deed by
the Buyer shall be deemed full compliance by the Seller of all of the
Seller's obligations under this Agreement except for those obligations of the
Seller which are specifically stated to survive the delivery of the Deed
hereunder.
Section 14.18 Construction. The parties acknowledge that the
parties and their counsel have reviewed and revised this Agreement and that
the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any exhibits or amendments hereto.
Section 14.19 Recordation. Neither this Agreement nor any
memorandum or notice of this Agreement may be recorded by any party hereto
without the prior written consent of the other party hereto. The provisions
of this Section shall survive the Closing or any termination of this
Agreement.
-42-
Section 14.20 Waiver of Jury Trial. The Seller and the Buyer
hereby waive trial by jury in any action, proceeding or counterclaim brought
by any party against another party on any matter arising out of or in any way
connected with this Agreement.
-43-
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the day and year first above written.
SELLER:
SHOPCO MALLS L.P.
By: Shopco Regional Malls, L.P.
By: Regional Malls, Inc.
By: ____________________
Name:
Title:
BUYER:
▇▇▇▇▇▇ PACIFIC GROUP, INC.
By: ______________________________
Name:
Title:
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
By: ______________________________
Name:
Title:
-44-
Schedule A
Legal Description
-45-
Schedule B
Existing Title Policy and Survey
First American Title Insurance Company Commitment for Title Insurance
Commitment Number DCC 98024, dated June 1, 1998
-1-
Schedule C
----------
Third Party Loan
----------------
Loan from Metropolitan Life Insurance Company, as successor in interest
to The Mutual Life Insurance Company of New York in the original principal
amount of $31,025,000, evidenced by Promissory Note dated September 6, 1990,
as subsequently assigned, amended and modified.
-2-
Schedule D
----------
Consents
--------
Limited Partner Approval.
-3-
Schedule E
----------
Material Contracts
------------------
-4-
Schedule F
----------
Space Lease
-----------
-5-
Schedule F-1
------------
Temporary Leases
----------------
-6-
Schedule G
----------
Brokerage Commissions
---------------------
THE GAP
OLD NAVY
-7-
Schedule H
----------
Litigation
----------
None
-8-
Schedule I
----------
Buyer Consents
--------------
NONE
-9-
Schedule J
----------
Security Deposits Held By The Seller
------------------------------------
-10-
Exhibit A
---------
ASSIGNMENT AND ASSUMPTION OF LANDLORD'S INTEREST IN LEASES
ASSIGNMENT AND ASSUMPTION OF LANDLORD'S INTEREST IN LEASES dated
_____ __, 199_, between SHOPCO MALLS L.P., a Delaware limited partnership,
having an address at c/▇ ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center,
29th Floor, New York, NY 10285 ("Assignor") and ▇▇▇▇▇▇ PACIFIC GROUP, INC.,
a Delaware corporation, having an address at c/o Condor Acquisition Partners
LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Assignee").
Background
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This Assignment and Assumption of Landlord's Interest in Leases is
being executed and delivered pursuant to that certain Purchase and Sale
Agreement dated as of August _, 1999 (the "Purchase Agreement") among
Assignor, as seller, and Assignee, as buyer. All capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Purchase
Agreement.
Assignment and Assumption
-------------------------
In consideration of Ten ($10.00) Dollars in hand paid by Assignee,
the receipt and sufficiency of which is hereby acknowledged, Assignor does
hereby assign, transfer and set over unto Assignee, all of Assignor's right,
title and interest in and to:
All leases, occupancy agreements, license agreements, rental
agreements, concession agreements and other written agreements entered
into with any tenants relating to the Property and the buildings and
other improvements located thereon, or any portion thereof, including,
without limitation, the leases, occupancy agreements, license
agreements, rental agreements, concession agreements and other written
agreements set forth on Schedule A attached hereto (all of the foregoing
leases, collectively, the "Space Leases"), together with all guaranties,
if any, by any third parties in respect of the Space Leases.
TO HAVE AND TO HOLD, the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions contained in the Space Leases.
Assignee hereby assumes the performance of all of the terms,
covenants and conditions of the Space Leases described on Schedule A attached
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hereto on the Assignor's part to be performed thereunder from and after the
date hereof and will well and truly perform all of the terms, covenants and
conditions of such Leases from and after the date hereof, all with the same
force and effect as though the Assignee had signed such Space Leases as a
party named therein.
Assignee does hereby agree for itself, its legal representatives,
successors and assigns to indemnify, defend and save the Assignor, its legal
representatives, successors and assigns, harmless from and against any and
all claims, losses, suits and expenses (including, but not limited to,
reasonable legal fees and litigation expenses) asserted or arising in
connection with the performance by Assignee under the Space Leases described
on Schedule A attached hereto from and after the date hereof.
IN WITNESS WHEREOF, the Assignor and Assignee have duly executed
this instrument as of the day first above written.
ASSIGNOR:
SHOPCO MALLS L.P.
By: Shopco Regional Malls, L.P.
By: Regional Malls, Inc.
By: ____________________
Name:
Title:
ASSIGNEE:
▇▇▇▇▇▇ PACIFIC GROUP, INC.
By: ___________________________
Name:
Title:
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Exhibit B
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ASSIGNMENT AND ASSUMPTION OF CONTRACTS
ASSIGNMENT AND ASSUMPTION OF CONTRACTS dated _________, 199_,
between SHOPCO MALLS L.P., a Delaware limited partnership, having an address
at c/▇ ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ("Assignor") and ▇▇▇▇▇▇ PACIFIC GROUP, INC., a
Delaware corporation, having an address at c/o Condor Acquisition Partners
LLC, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignee").
Background
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This Assignment and Assumption of Contracts is being executed and
delivered pursuant to that certain Purchase and Sale Agreement dated as of
August __, 1999 (the "Purchase Agreement") among Assignor, as seller, and
Assignee, as buyer. All capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Purchase Agreement.
Assignment and Assumption
-------------------------
In consideration of Ten ($10.00) Dollars in hand paid by Assignee,
the receipt and sufficiency of which is hereby acknowledged, Assignor does
hereby assign, transfer and set over unto Assignee, all of Assignor's right,
title and interest in and to:
(i) All agreements, contracts or understandings of Assignor
relating to ownership, operation, maintenance, and
management of the Property and the buildings and other
improvements located thereon, or any portion thereof,
including, without limitation, the contracts set forth on
Schedule A attached hereto (collectively, the
"Contracts");
(ii) All equipment leases and rental agreements relating to
the equipment, services, vehicles, furniture or other
type of personal property with regard to the Property and
the buildings and other improvements located thereon, or
any portion thereof, including, without limitation, the
leases set forth on Schedule B attached hereto
(collectively, the "Equipment Leases");
(iii) All of Assignor's right, title and interest in and to all
licenses, registrations, certificates, permits, approvals
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and other governmental authorizations relating to the
construction, operation, use or occupancy of the Property
and the buildings and other improvements located thereon,
or any portion thereof (collectively, the "Permits");
(iv) all of Assignor's right, title and interest in and to all
warranties and guarantees, if any, relating to the
personal property located on the Property or in the
buildings and other improvements located thereon,
including, without limitation those listed on Schedule C
hereto (collectively, the "Warranties"; the Contracts,
the Equipment Leases, the Permits and the Warranties are
collectively referred to herein as the "Agreements").
TO HAVE AND TO HOLD, the same unto Assignee, its successors and
assigns, from and after the date hereof, subject to the terms, covenants,
conditions and provisions contained in the Agreements.
Assignee hereby assumes the performance of all of the terms,
covenants and conditions of the Contracts described on Schedule A attached
hereto and the Equipment Leases described on Schedule B attached hereto on
the Assignor's part to be performed thereunder from and after the date hereof
and will perform all of the terms, covenants and conditions of such Contracts
and Equipment Leases arising or accruing from and after the date hereof, all
with the same force and effect as though the Assignee had signed such
Contracts and Equipment Leases as a party named therein.
Assignee does hereby agree for itself, its legal representatives,
and its successors and assigns to indemnify, defend and save the Assignor,
its legal representatives, successors and assigns, harmless from and against
any and all claims, losses, suits and expenses (including, but not limited
to, reasonable legal fees and litigation expenses) asserted or arising in
connection with the performance by Assignee under the Contracts described on
Schedule A attached hereto and the Equipment Leases described on Schedule B
attached hereto from and after the date hereof.
IN WITNESS WHEREOF, the Assignor and Assignee have duly executed
this instrument as of the day first above written.
ASSIGNOR:
SHOPCO MALLS L.P.
By: Shopco Regional Malls, L.P.
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By: Regional Malls, Inc.
By: ____________________
Name:
Title:
ASSIGNEE:
▇▇▇▇▇▇ PACIFIC GROUP, INC.
By: ______________________________
Name:
Title:
Schedules:
---------
Schedule A Contracts
Schedule B Equipment Leases
Schedule C Warranties
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Exhibit C
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____________________
c/o Condor Acquisition Partners LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_____ ___, 199_
BY CERTIFIED MAIL
-----------------
[Name and Address
of Tenant]
Premises: [ ]
Gentlemen and Ladies:
Please be advised that effective the date set forth above, the
Premises have been conveyed by Shopco Malls L.P. to __________________, a
__________________, whose mailing address is shown above. You are hereby
irrevocably and unconditionally directed that, effective immediately, all
future communications, rents and payments are to be directed as follows:
[TBD]
Very truly yours,
___________________________________
By: ______________________________
Name:
Title:
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Exhibit D
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SPECIAL WARRANTY DEED
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Exhibit E
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▇▇▇▇ OF SALE
SHOPCO MALLS L.P., a Delaware limited partnership, whose address is
c/▇ ▇▇▇▇▇▇ Brothers Inc., Three World Financial Center, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Seller"), in consideration of Ten
($10.00) Dollars in hand paid by ▇▇▇▇▇▇ PACIFIC GROUP, INC., a Delaware
corporation, whose mailing address is c/o Condor Acquisition Partners LLC,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred
to as "Buyer"), the receipt and sufficiency of which is hereby acknowledged,
does hereby sell, grant, assign, convey, transfer, set over, and quit-claim
unto Purchaser, its successors and assigns, all of Seller's right, title and
interest in and to any and all fixtures, chattels and articles of personal
property that are attached to or located in or upon the premises described on
Schedule A attached hereto and the buildings and other improvements located
thereon, or any portion thereof (all of the property and interests
hereinbefore described are hereinafter referred to as the "Property").
TO HAVE AND TO HOLD the Property unto Buyer, its successors and
assigns forever.
This ▇▇▇▇ of Sale is made without warranty or representation,
express or implied, by or recourse against Seller of any kind or nature
whatsoever except as set forth in that certain Purchase and Sale Agreement
dated as of July __, 1999 between Seller as seller, and Buyer, as buyer.
This ▇▇▇▇ of Sale has been duly executed by Seller as of the ____
day of _____, 199_.
SHOPCO MALLS L.P.
By: Shopco Regional Malls, L.P.
By: Regional Malls, Inc.
By: ____________________
Name:
Title:
Schedules:
---------
Schedule A Description of Premises
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Exhibit F
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ENTITY TRANSFEROR
FOREIGN INVESTORS REAL PROPERTY
TAX ACT CERTIFICATION AND AFFIDAVIT
Section 1445 of the Internal Revenue Code of 1986, as amended (the
"Code"), provides that a transferee of a U.S. real property interest must
withhold tax if the transferor is a foreign person. To inform ▇▇▇▇▇▇ PACIFIC
GROUP, INC., a Delaware corporation(the "Transferee") that withholding of tax
is not required upon disposition of a U.S. real property interest by SHOPCO
MALLS L.P., a Delaware limited partnership (the "Transferor"), the
undersigned hereby certifies the following on behalf of the Transferor:
(a) Transferor is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as those terms are defined in the Code and
Income Tax Regulations);
(b) The U.S. employer identification number of Transferor is
___________;
(c) Transferor has an address at c/▇ ▇▇▇▇▇▇ Brothers Inc., Three
World Financial ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(d) The address of the subject property is ______________________.
Transferor understands that this Certification may be disclosed to
the Internal Revenue Service by Transferee and that any false statement
contained herein could be punished by fine, imprisonment or both.
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Under penalties of perjury, I declare that I have examined this
Certification and to the best of my knowledge and belief it is true, correct
and complete, and I further declare that I have the authority to sign this
document on behalf of Transferor.
___________ ___, 1999
SHOPCO MALLS L.P.
By: Shopco Regional Malls, L.P.
By: Regional Malls, Inc.
By: ____________________
Name:
Title:
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