Ex-10.53
SEVENTH AMENDMENT TO
PURCHASE AND SALE AGREEMENT
THIS SEVENTH AMENDMENT TO PURCHASE AND SALE (this "Amendment") made this
fourth day of December, 2001 between THE PRIME OUTLETS AT BIRCH RUN, L.L.C., a
Delaware limited liability company; THE PRIME OUTLETS AT WILLIAMSBURG, L.L.C., a
Delaware limited liability company; and OUTLET VILLAGE OF HAGERSTOWN LIMITED
PARTNERSHIP, a Delaware limited partnership (herein collectively called
"Seller"), with an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, telecopier number ▇▇▇-▇▇▇-▇▇▇▇; and
▇▇▇▇ TRIPLE OUTLET, L.C., a Florida limited liability company (hereinafter
called the "Buyer"), with an address c/o Estein & Associates USA, Ltd., ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, telecopier number ▇▇▇-▇▇▇-▇▇▇▇;
WITNESSETH
A. WHEREAS, Buyer and Seller have entered into a certain Purchase and Sale
Agreement dated August 6, 1999 as amended by an Amendment dated September 27,
1999, a letter agreement dated September 28, 1999, an Amendment to Purchase and
Sale Agreement dated November 18, 1999, a Third Amendment to Purchase and Sale
Agreement dated February 24, 2000, a Fourth Amendment to Purchase and Sale
Agreement dated April 14, 2000, a Fifth Amendment to Purchase and Sale Agreement
dated May 1, 2000, and a Sixth Amendment to Purchase and Sale Agreement dated
June 30, 2000 (as so amended, the "Agreement") for the purchase and sale of
certain factory outlet shopping centers and other property more fully described
therein; and
B. WHEREAS, pursuant to a Settlement Agreement and Agreement Regarding
Birch Run Refinancing dated as of August 15, 2001 (the "Settlement Agreement")
OUTLET VILLAGE OF HAGERSTOWN LIMITED PARTNERSHIP ("H'TOWN") was released from
its obligations under the Agreement and other agreements executed by H'TOWN in
favor of Buyer, TRIPLE OUTLET WORLD, LTD., TRIPLE OUTLET WORLD JOINT VENTURE,
BIRCH RUN OUTLETS, L.L.C. and WILLIAMSBURG OUTLETS, L.L.C. (collectively the
"Other Obligations"); and
C. WHEREAS, Buyer and Seller desire to revive and reinstate H'TOWN's
obligations under the Agreement as well as the Other Obligations of H'TOWN and
desire to amend the Agreement in the manner hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual entry into this
Amendment by the parties hereto and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Seller and Buyer do
agree as follows:
1. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Agreement.
2. Buyer is entitled to retain and keep as its sole and exclusive property,
and without setoff or charge therefore, the entire amounts previously paid to
Buyer under Section 8 of the Settlement Agreement and otherwise as a result of
closing of the purchase and sale of the Project not occurring under the
Agreement notwithstanding reinstatement hereunder of H'TOWN's obligations under
the Agreement and its Other Obligations in accordance with the provisions
hereof.
3. Effective as of the execution of this Amendment, all of the obligations
from which H'TOWN was released under the terms of the Settlement (i.e., its
obligations under the Agreement and its Other Obligations) are hereby reinstated
and remain in full force and effect, as modified by this Amendment. If Buyer
should terminate this Amendment for any reason or default in its obligations
hereunder resulting in termination hereof by Seller, then H'TOWN's obligations
under the Agreement shall again terminate and be of no further force or effect.
4. The Agreement remains in full force and effect with respect to the Birch
Run Project and the Williamsburg Project, except as it may have been modified as
to either of such Projects by the Settlement and/or by an Agreement Regarding
Williamsburg Refinancing dated as of October 17, 2001, and except to the extent
that the provisions thereof may have expired pursuant to their terms. The
existing provisions of the Agreement pertaining to the Hagerstown Project are of
no force or effect. The Agreement is hereby amended and restated, beginning with
Article 1, with respect to the Hagerstown Project only to read as follows:
ARTICLE 1
DEFINITIONS
The following terms as used in this Amendment shall have the meanings
ascribed to them below:
1.1 "Agreement". The Agreement as described in WHEREAS Clause A above.
1.2 "Amendment". This Seventh Amendment to Purchase and Sale Agreement.
1.3 "Bonds". ▇▇▇▇▇▇▇▇ Special Taxing District Bonds issued in connection
with development of the Project and described on Exhibit I.
1.4 "Borrowing Entity". Prime Retail Finance VI, LLC, the borrower under the
Mercantile Loan.
1.5 "BRWH". BRWH, L.L.C., one of the members of the Joint Venture.
1.6 "Effective Date". The date when this Amendment has been executed and
delivered by Buyer and Seller.
1.7 "Escrow Agent". Chicago Title Insurance Company.
1.8 "Investigation Period". A period of time commencing on the Effective
Date and ending the earlier of (i) notice from Buyer to Seller that the
Investigation Period is over, or (ii) forty-five (45) days after the
Effective Date.
1.9 "Joint Venture". Triple Outlet World Joint Venture, a Florida joint
venture, which was formed by TOWL and BRWH.
1.10 "Key Property Materials". That part of the Property Materials
consisting of: existing as-built surveys of the Real Property; current
title commitment for the Real Property and existing title policy;
existing most recent environmental studies or reports of the Project;
current detailed rent roll of the Project; copies of operating
statements for the Project for partial year 1998, all of 1999 and 2000
and year to date 2001 (through October 31, 2001) reflecting all income
and expenses of the Project and copies of all federal, state and local
tax returns of H'TOWN for such periods; copies of the Bond
documentation (including copies of the Bonds); to the extent Seller has
them in its possession, copies of certificates of occupancy or other
evidence that all space in the Project may be lawfully occupied; copies
of all current tax bills and special assessment notices for the
Project; copies of the Agreement of Limited Partnership of H'TOWN and
all amendments thereto certified to be true, correct and complete by
Seller and copies of all Leases in effect on the date hereof for space
in the Project.
1.11 "Leases". Leases for space in the Project with tenants which are
identified on the Rent Roll attached as Exhibit II, together with any
and all other leases which may be executed by Seller with tenants for
the vacant spaces in the Project.
1.12 "Lender". The lender or lenders which agree(s) to make the Loans
to be arranged by Seller pursuant to Section 1.13.
1.13 "Loans". There are two loans which make up the Loans, as described
below:
A. "Mercantile Loan". An indemnity deed of trust loan in the present
principal amount of $49,062,000 and which at closing will be paid by
Selling Partners out of the proceeds of closing down to the principal
amount of $46,862,000 in favor of Mercantile Bank, the salient terms of
which are set forth on Exhibit III; and
B. "Permanent Loan". A loan to be secured by a deed of trust encumbering
the Property which will refinance the Mercantile Loan at or prior to its
maturity and will be in an amount not exceeding the principal balance of
the Mercantile Loan as of the date of closing hereunder.
The Mercantile Loan is to remain in effect after the time of closing
hereunder. All other financing on the Project other than the Bonds will be
paid and satisfied in full by H'TOWN or Selling Partners prior to closing
hereunder being effective. Prime Retail, L.P. shall remain a guarantor of
the Mercantile Loan but the Mercantile Loan documents are to be modified to
provide that any insolvency, bankruptcy or other change in financial
condition of Prime Retail, L.P. or any affiliate thereof (except H'TOWN,
the Borrowing Entity and the Property Entity) shall not constitute a
default under the Mercantile Loan. The Mercantile Loan is to be
non-recourse to the Joint Venture and its Venturers except for customary
carve-outs.
Seller will be responsible for refinancing the Mercantile Loan by
obtaining the Permanent Loan at or prior to its maturity. Buyer and the
Joint Venture will be obligated to fully cooperate with and use
commercially reasonable efforts to identify, assist with and cause the
Permanent Loan to be obtained and closed. All terms and conditions of the
Mercantile Loan will be reviewed by Buyer during the Investigation Period
and if they are not satisfactory to Buyer, Buyer's sole remedy shall be to
terminate this Amendment pursuant to Section 4.3. The Permanent Loan shall
be subject to the approval of both venturers in the Joint Venture. Subject
to the terms of the next sentence, the difference between the actual
principal amount of the Permanent Loan and the then principal balance of
the Mercantile Loan, will be paid by the Joint Venture through capital
calls in the ratio of 30% by BRWH and 70% by TOWL. Notwithstanding the
above, if the principal amount of the Permanent Loan is less than
$44,000,000, Seller will loan the Joint Venture the difference between
$44,000,000 and the principal amount of the Permanent Loan at an interest
rate of 7.75%, with a maturity date the same as that for the Permanent
Loan and with the same amortization period as that for the Permanent Loan
(the "Seller Loan"). The Seller Loan will be secured by a pledge of all
distributions from the Joint Venture, and monthly payments under the
Seller Loan will be paid prior to any distributions by the Joint
Venture. Seller and Buyer agree that the Permanent Loan will have a
maturity date inclusive of extension options (or at ▇▇▇▇ ▇ ▇ prepayment
period in which the Permanent Loan can be prepaid at par without penalty)
of no earlier than June 1, 2009 and no later than ten (10) years after
Closing hereunder. The Permanent Loan may be either fixed or variable
rate debt, and shall be non recourse except for customary carve-outs
(which, if required, shall be guaranteed by the joint venturers of the
Joint Venture). BRWH will pledge its entire Joint Venture interests to
secure Seller's obligation to refinance the Mercantile Loan and the
Pledge and Escrow Agreement dated November 18, 1999 executed at the closing
of the purchase and sale of the Birch Run Project (the "Pledge Agreement")
will be amended to add this obligation as one that is secured by such
Pledge Agreement. Once the Permanent Loan is closed, the Pledge Agreement
will no longer secure the obligations to refinance the Mercantile Loan, but
an extension and/or modification of the Mercantile Loan that does not meet
all the requirements for the Permanent Loan shall not be deemed a Permanent
Loan. Prior to obtaining the Permanent Loan at the current maturity date of
the Mercantile Loan, Seller may elect to extend the maturity date of the
Mercantile Loan, at Seller's sole expense, and, to the extent Seller wishes
to cause an extension of the Mercantile Loan by means of a principal
paydown (the "Principal Reduction Payment") of such loan, Seller will have
the right to do so and have the Principal Reduction Payment treated as a
Seller Loan. Notwithstanding the above, if a Seller Loan results from a
Principal Reduction Payment, any amortization of the associated Seller Loan
will be deferred until and paid at the time of closing of the Permanent
Loan. If Seller so elects to extend the maturity of the Mercantile Loan,
then Seller shall continue to be obligated to obtain the Permanent Loan as
herein provided upon the maturity of the Mercantile Loan as so extended.
Seller shall, at least fifteen (15) days prior to the maturity of the
Mercantile Loan as it may be extended in accordance with the terms of this
Section, either (i) cause the closing of the Permanent Loan, or (ii)
provide a commitment letter (or other evidence reasonably acceptable to
Buyer) for the Permanent Loan which provides for closing of such loan on or
before the maturity of the Mercantile Loan (as extended). If the Permanent
Loan is actually closed prior to June 1, 2004 to satisfy this obligation,
Buyer agrees that the "June 1, 2009" date referenced above in this Section
1.13 will be changed to a date which is five (5) years from the Permanent
Loan closing date.
To the extent the interest rate on either the Mercantile Loan or the
Permanent Loan is less than 7.75%, Seller will receive 100% of the savings
as a Buyer Interest Savings Payment; to the extent the interest rate on the
Mercantile Loan or the Permanent Loan exceeds 7.75%, Seller will pay 100%
of the excess as a Seller Interest Subsidy Payment. The Buyer Interest
Savings Payment and the Seller Interest Subsidy Payment shall be payable
and secured as set forth in Section 3.3 of the Agreement which Section is
hereby revived and made applicable to the Project and is incorporated
herein by reference, except however, that the Buyer Interest Savings
Payment and Seller Interest Subsidy Payment with respect to H'TOWN shall be
based solely on the interest rate differential and not on any payment
differential. BRWH will pledge its Joint Venture interests as security
for the obligation to pay the Seller Interest Subsidy Payment.
Seller and Selling Partners shall be responsible for all costs
associated with assumption of the Mercantile Loan (excluding Buyer's
attorneys fees) and shall be responsible for all costs associated with the
origination and closing of the Permanent Loan, including reasonable
attorneys fees of Buyer's attorneys and attorneys for the Property Entity
and Joint Venture. If for any reason the Mercantile Loan does not remain
structured as an indemnity deed of trust loan, Seller will not be obligated
to proceed to closing provided that Seller has notified Buyer of its
decision not to close on or before December 10, 2001; but failure to
provide such notice will not affect the provisions of Section 11.3. All
reserves, escrows and other deposits required under either of the Loans
will be paid by the Joint Venture (or, in the case of the Mercantile Loan,
if already held by the Lender thereunder, H'TOWN shall be reimbursed such
amounts at closing by the Joint Venture).
At closing of the Permanent Loan, the parties shall execute mutual
indemnification agreements similar to those executed at the time of the
refinancings of the Birch Run and Williamsburg Projects. The obligation to
execute such indemnification agreements shall survive closing until the
Permanent Loan is closed.
1.14 "Management Agreement". A Management and Leasing Agreement to be
entered into between an entity designated by Seller and Buyer at the
time of closing providing for Seller's designated entity to manage and
lease the Project for and on behalf of Buyer. The Management Agreement
will be in form similar to those for the Birch Run and Williamsburg
Projects except that the Base Management Fee is to be reduced only if
the reimbursement for home office accounting costs exceeds $6,000.00 in
any month. The term of the Management Agreement will end on the earlier
of maturity of the Permanent Loan (or earlier prepayment thereof), if
the Permanent Loan in fact closes, or thirty (30) days after maturity
of the Mercantile Loan without a Permanent Loan having closed. At
closing, the existing management agreements for Birch Run and
Williamsburg will be extended to end the earlier of maturity of the
respective loan on each of the respective Projects or prepayment of the
loans on those Projects.
1.15 "Net Operating Income". For purposes of Sections 10.2 Net Operating
Income is aggregate net cash flow from operations of the Project based
upon the rentals reflected on Exhibit II (but excluding revenues from
insurance or condemnation proceeds, refinancings and other
non-operation revenues) before payment of capital expenditures, leasing
commissions and tenant allowances and principal and interest payments
on indebtedness for borrowed money.
1.16 "Partnership Interests". One hundred percent of the ownership interests
in H'TOWN consisting of all limited and general partner interests in
H'TOWN.
1.17 "Personal Property". H'TOWN'S 100% membership interest in Borrowing
Entity, the Bonds, all plans, drawings, permits, governmental
authorizations, contracts, documents, surveys, site plans, engineering
reports, soil and environmental studies, leases, construction and
manufacturer warranties, supplies and all other tangible personal
property located on, the Real Property and intangible property arising
from ownership and/or operation thereof exclusive of accounts
receivable for any period prior to the closing date and exclusive of
the right of use of the name of the Project, which will be licensed to
Buyer pursuant to Section 15.2. The Personal Property shall not include
bonds (exclusive of the Bonds), bank accounts, accounts receivable
letters of credit, deposits and other sureties placed by Seller with
governmental authorities or utility companies in connection with the
construction (but excluding such items as utility deposits required to
remain in place for the operation of the Project) ("Construction
Security"), all of which shall remain the property of Prime Retail,
L.P. If, however, the Construction Security is required or is otherwise
in the name of the Buyer, then, Buyer agrees to fully cooperate with
Seller in obtaining the return of the Construction Security and upon
any return of the Construction Security, Buyer shall immediately
deliver the Construction Security to Seller to the extent received by
Buyer.
1.18 "Project". That commercial real estate Prime Outlet Center located on
and encompassing the Real Property.
1.19 "Property". All of the Real Property and the Personal Property.
1.20 "Property Entity". The entity which will own the Partnership Interests
and which, after closing, along with H'TOWN, shall be a "Property
Entity" as described in the Joint Venture Agreement of Joint Venture.
1.21 "Property Entity Subsidiary". A company to be formed as determined by
TOWL and BRWH which will be wholly owned by the Property Entity.
1.22 "Property Materials". All instruments, documents, leases, contracts,
surveys, plats, plans, specifications, reports, studies, permits,
applications, authorizations, approvals, proposals, applicable
copyright and trademark materials, estoppel letters from all tenants in
form of Exhibit IV and as may be requested by Lender, and other
materials owned by or within Seller's control or possession which
consist of the Personal Property or which in any way pertain to the
Real Property or Personal Property. The following enumerated items are
included in the definition of "Property Materials" but are not intended
to constitute a complete or comprehensive list thereof: as-built
surveys; existing title policies and exceptions to title; site plan;
Leases; copies of any lease proposals not yet finalized; soil tests;
environmental studies; rent roll; service and utility letters, proposals
and contracts; construction bids and contracts; copies of documents
regarding joint use and/or maintenance of roads, parking areas and
ingress and egress easements; zoning authorizations; copies of all
Leases in effect on the date hereof for space in the Project; lease
summaries and abstracts (but Seller does not represent or warrant the
accuracy of such lease abstracts and lease summaries except for the
information to be provided pursuant to Section 4.2); existing
certificates of occupancy and other governmental approvals and permits;
title insurance commitment and legible copies of all exceptions listed
thereon to be issued pursuant to Section 6.1; copies of the Bond
documents (including copies of the Bonds); copies of real property tax
bills and special assesment notices for the Project; copies of all
contracts to which H'TOWN is a party; copies of operating statements for
the Project; H'TOWN local, state and federal tax returns of every kind
for the years 1998, 1999, 2000 and, when filed, 2001; and copies of the
agreement of limited partnership of H'TOWN and organizational documents
of Borrowing Entity.
1.23 "Real Property". That parcel or parcels on which the Project is
located, which is or are legally described on Exhibit V. Included
within the term Real Property is all of Seller's right, title and
interest in and to:
A. Any land lying in the bed of any highway, street, road
or avenue, open or proposed, in front of or abutting or
adjoining the Real Property.
B. All riparian rights.
C. All appurtenances, hereditaments, tenements and air
rights appertaining to the Real Property.
D. All improvements located on or affixed to the Real
Property.
1.24 "Title Insurance Company". Chicago Title Insurance Company, through
its National Business Unit in Washington, D.C. Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇▇.
1.25 "TOWL". Triple Outlet World, Ltd., the managing venturer of the Joint
Venture.
1.26 "Selling Partners". Prime Retail, L.P., the sole general partner and
Prime Retail, Inc., the sole limited partner of H'TOWN.
ARTICLE 2
SALE OF PARTNERSHIP INTERESTS
2.1. Subject to the terms and provisions herein contained, Selling
Partners agree to sell to Buyer and Buyer agrees to purchase from
Selling Partners all the Partnership Interests. Buyer will assign its
rights under this Amendment to the Property Entity to acquire the
general partner's 99% Partnership Interests and will assign its rights
to acquire the limited partner's 1% Partnership Interest to the
Property Entity Subsidiary (the assignees being sometimes called the
Property Entity herein in either case for ease of reference), which will
acquire the respective Partnership Interests. As in the case of the
Birch Run and Williamsburg Projects, Prime Retail, L.P.'s 30%
participation allocable to the purchase of the Project (in this case,
the purchase of the Partnership Interests) under the Joint Venture
Agreement of the Joint Venture will be contributed in the form of a
credit to the buying entity.
ARTICLE 3
PURCHASE PRICE
3.1. Price. The purchase price to b e paid for the Partnership
Interests is $80,500,000.00.
3.2. Deposits. The first component of the purchase price is payment
of a $250,000.00 ▇▇▇▇▇▇▇ money deposit to the Escrow Agent within two
business days after the Effective Date. An additional ▇▇▇▇▇▇▇ money
deposit will be due and payable by Buyer to Escrow Agent in the amount
of $250,000.00 within one business day following the end of the
Investigation Period, unless Buyer has terminated this Amendment
as provided in Article 4. At the time of payment of the purchase price,
the Deposit shall be credited to the purchase price. The ▇▇▇▇▇▇▇ money
deposits of $250,000.00 initially and $500,000.00 in the aggregate
will be placed in an interest-bearing investment approved by Buyer and
Seller, which approval will not be unreasonably withheld, with interest
to be paid to Buyer unless Buyer shall default hereunder and Seller
shall become entitled to the ▇▇▇▇▇▇▇ money deposit(s), in which case
all such interest shall be paid to Seller. All references in this
Amendment to return of the ▇▇▇▇▇▇▇ money deposit(s) hereunder to Buyer
shall be deemed to include interest earned thereon. Interest on the
▇▇▇▇▇▇▇ money deposits will be allocated for tax purposes to the party
receiving it.
3.3. Loans. A portion of the purchase price in the amount of
$46,862,000.00 will be paid by the Mercantile Loan remaining in place
as provided in Section 1.13.
3.4. Balance. The balance of the purchase price shall be payable to
the Escrow Agent at closing by wired funds or certified check drawn on a
United States bank; subject, however, to prorations and adjustments as
provided in Section 13.1. Notwithstanding the foregoing, the portion of
the cash purchase price which would otherwise be required to be
provided by BRWH as a 30% joint venture partner under the Joint Venture
Agreement of the Joint Venture shall be contributed by crediting such
amount against the cash portion of the purchase price due to Selling
Partners.
3.5. Allocation. Buyer and Seller agree that the purchase price will
be allocated separately among various components of the Property
including the Bonds, land, buildings, mechanical systems and Personal
Property, to the Covenant Not To Compete being provided pursuant to
Section 16.3 hereof , and to the License to be granted by Seller under
Section 16.2 hereof in accordance with Exhibit IV. The portion of the
price allocable to the Bonds will be paid directly to Prime Retail, L.P.
ARTICLE 4
INVESTIGATION
4.1. Buyer Investigation Rights. During the Investigation Period
and upon prior reasonable notice and subject to the provisions of
Section 4.4, Buyer and Buyer's agents, professionals and independent
contractors shall have the right of access to the Property and to
Seller's records in Baltimore, Maryland at any reasonable time during
the Investigation Period to conduct tests; take measurements; complete
surveys; review bids; review Leases, contracts, correspondence, tax
returns and other records; conduct conversations with Seller and
Seller's agents, employees (which shall mea Executive Vice
President of Finance, Executive Vice President and Chief Financial
Officer, Senior Vice President for Operations and their respective
seconds in command at Prime Retail, L.P., as well as Prime Retail, L.P.
senior staff members in Baltimore, Maryland, applicable regional
operations individuals and local site employees, provided meetings with
the local site employees will be arranged by senior staff in
Baltimore) and independent contractors, and with tenants and prospective
tenants (provided meetings with tenants and prospective tenants will be
arranged by the senior staff of Prim e Retail, L.P. in Baltimore,
Maryland), governmental officials, utility company representatives and
all other parties having anything to do with the Property; and examine
and investigate the Property, and Property Materials in any reasonable
way for all other purposes consistent with evaluation of and potential
ownership, development and operation of the Property and ownership of
the Partnership Interests. Seller agrees to reasonably cooperate with
Buyer in Buyer's investigation.
4.2. Costs. The cost and expense of delivering the Property
Materials shall be borne by Seller. The cost and expense of all other
aspects of Buyer's investigations shall be borne by Buyer. However,
Seller shall, to the extent Seller has them in its control or possession
deliver to Buyer as soon as possible after the Effective Date that
portion of the Property Materials comprising all of the following, but
only to the extent same are changed or updated since delivery of such
Property Materials pursuant to the Agreement: soil tests, environmental
tests, engineering studies, feasibility studies, traffic studies,
surveys (including as-built surveys), plans and specifications,
leases, rent roll and Key Property Materials not otherwise listed in
this Section. If there is an extra charge to Seller for obtaining
such certification or letter and such charge is reasonable and
customary, Buyer will bear the cost thereof. Seller will not be
obligated to obtain any new tests or studies for Buyer. Anything in
this Amendment to the contrary notwithstanding, Seller will deliver to
Buyer within six (6) business days of the Effective Date a list of all
leases containing most favored nation or other similar clauses which
might allow tenants to pay rentals at rates lower than those reflected
on Exhibit II (along with a summary of the particular clause(s) in each
such Lease) and a new rent roll reflecting such clauses and their impact
(collectively the "Supplemental Lease Materials").
4.3. Right of Termination. If Buyer, in Buyer's sole discretion,
shall determine for any reason that Buyer is not entirely satisfied with
the results of Buyer's inspections or that Buyer no longer desires to
acquire the Partnership Interests, Buyer shall have the right to
terminate this Amendment by giving notice to Seller and Escrow Agent
hereunder at or prior to the expiration of the Investigation Period,
in which case, Buyer will be entitled to return of its ▇▇▇▇▇▇▇ money
deposit. If Buyer does not terminate this Amendment as provided in
the preceding sentence, Buyer shall pay the additional $250,000.00
▇▇▇▇▇▇▇ money deposit in accordance with Section 3.2. Upon the
expiration of the Investigation Period without Buyer having terminated
this Amendment, all of the ▇▇▇▇▇▇▇ money deposits shall, subject to the
provisions of this Amendment, be at risk.
4.4. Insurance, Repair and Indemnity. Prior to entry onto any of
the Real Property to perform studies, tests, investigations or surveys,
Buyer (or each contractor performing such services for Buyer) will
provide a certificate of insurance to Seller naming Seller as an
additional insured in amounts and form reasonably acceptable to Seller.
Buyer agrees to repair, at Buyer's cost and expense, any damage caused
to the Project caused by any of the studies performed by or for Buyer.
Buyer also agrees all of its studies will be performed in a manner that
will not unreasonably interfere with operation of the Project or tenants
operating within the Project. Buyer will indemnify and hold H'TOWN and
the Selling Partners harmless from and against any cost, expense, damage
or liability incurred by H'TOWN as a result of Buyer or its agents or
independent contractors entering the Real Property, and/or performing
work or conducting studies thereon, which indemnification and hold
harmless will survive closing hereunder or termination or this
Amendment.
4.5 Delivery of Loan Documents. Promptly upon Seller's receipt of
any Loan documents for either of the Loans, Seller shall provide copies
thereof to Buyer to enable Buyer to confirm that the Loans and Loan
documents satisfy the requirements of this Amendment.
ARTICLE 5
TITLE
5.1. Permitted Exceptions. At closing, the Real Property is to be
subject only to the following:
A. Real estate taxes and special assessments for the year in which
the closing shall occur.
B. Zoning and/or restrictions and prohibitions imposed by
governmental authorities, none of which shall prevent use of the
Real Property as a factory outlet mall as presently configured.
C. Restrictions, reservations and easements recorded in the Public
Records of the county where the Project is located, none of
which s hall interfere with the use of the Real Property for its
intended purposes, contain any rights of reverter, or render the
title unmarketable in the opinion of Buyer's attorney as
determined during the title insurance review period set forth in
Section 6.1, and all of which shall be subject to the reasonable
approval of Buyer's attorney as provided in Section 6.1.
D. Rights of tenants under the Leases, none of whom will have any
option to purchase or rights of first refusal to purchase any
portion of the Property.
E. The deed of trust and other documents securing the Mercantile
Loan and the Bonds.
F. The Declaration(s) of Easements and Restrictions referred to in
Section 16.5.
G. Other matters agreed to pursuant to Section 6.1.
ARTICLE 6
TITLE INSURANCE
6.1. Commitment. Seller shall, within ten (10) days after the
Effective Date, deliver to Buyer an update to Chicago Title Insurance
Company Commitment No. 4500-41977 (with an effective date of 5/31/00)
together with legible copies of all exceptions shown on the update
that did not appear on the original commitment. If the title insurance
commitment, as updated, shall disclose any defects in title not
disclosed in the 5/31/00 Commitment, Buyer shall so notify Seller in
writing within ten (10) days after receipt thereof. The update will
acknowledge that the existing title policy of H'TOWN will be endorsed
to (i) delete those items which Buyer has objected to hereunder
and which Seller has agreed or is obligated to cure, (ii) increase the
amount of insurance to the amount of $80,500,000.00, (iii) bring the
effective date to the date of closing, (iv) add a Fairways Endorsement,
non-imputation endorsement and endorsements per Section 6.2 and (v)
state the policy will be issued in connection with a purchase and sale
of the Partnership Interests. Unless specifically withdrawn, any
objections made by Buyer to the status of title during Buyer's previous
review of title under the Agreement, shall be deemed to be included in
any such writing whether or not specifically mentioned, and any matter
not so objected to as part of Buyer's prior review of title shall be
deemed to be approved by Buyer. Within ten (10) days after receipt of
Buyer's notice of objection to any title matter, Seller will notify
Buyer if Seller will undertake to attempt to cure the objectionable
title matter. If Seller elects not to cure the objectionable matter,
Buyer shall, by notice to Seller given within ten (10)days after receipt
of Seller's notice, either terminate this Amendment or waive all such
title objections which Seller has not agreed to cure. If Seller elects
to cure the objectionable matter but is unable to do so after thirty
(30) days, Buyer can elect to give Seller an additional 15 days to cure
or terminate this Amendment. If after such additional period, the
defect is still not cured, Seller or Buyer can terminate this
Amendment. Any termination pursuant to this Section shall result
in return of the ▇▇▇▇▇▇▇ money deposit(s) to Buyer. Seller has no
obligation to cure any title defects disclosed by the title commitment,
but Seller agrees it will keep title to the Real Property in the same
condition (except for (i) defects which Seller may elect to cure, and
(ii) Leases entered into by Seller in accordance with the Agreement and
this Amendment). H'TOWN shall be permitted to convey to Prime Retail,
L.P. or an affiliate thereof title to any real property owned by H'TOWN
but not included in the Real Property. The Title Insurance Company
shall obtain reinsurance in such amounts and with such companies as are
approved by Buyer, whose approval will not be unreasonably withheld.
Buyer is to be given the right of direct access to any one or more
reinsurers at its election.
6.2. Policies. The title insurance commitment shall be brought down
to a current date at the time of closing, and at closing it shall be
marked down or endorsed by the Title Insurance Company. Buyer and
Seller shall each provide such copies of their documents of formation,
resolutions and good standing certificates as required of them in
Schedule B-I of the title commitments. The final title policy is not to
contain the standard printed exceptions normally contained in title
policies. The "gap" will be deleted from the commitment at closing as
will all items listed in Schedule B-I. Seller shall pay all costs
and expenses for issuance of the title insurance commitment,
endorsement of the owner's title insurance policy as provided herein
and any endorsements and/or title policies required by the Lender.
In the event the title insurance commitment is issued by a title
insurance agent rather than a branch office of the Title Insurance
Company, a title insurance protection letter issued by the Title
Insurance Company and addressed to Buyer will be supplied. The final
policy will contain affirmative insurance endorsements, insuring that
none of the restrictions applicable to the real Properties has been
violated to date and that a future violation will not result in a
reversion or forfeiture of title and shall contain all the endorsements
contained in Title Commitment No. 4500-41977. However, the providing of
such insurance shall not, in and of itself, render acceptable any
otherwise objectionable restriction hereunder.
ARTICLE 7
SURVEY
7.1. Existing Surveys and Updates. As part of the Property
Materials, Seller has delivered to Buyer an existing as-built survey of
the Real Property under seal of a surveyor licensed in Maryland. Seller
shall have the survey updated or redone by the same or another surveyor
under current date so that the standard survey exceptions are removed
from the title policy. If the updated survey shows any encroachment on
the Real Property surveyed, or that improvements located on the Real
Property surveyed in fact encroach on lands of others or violate any of
the applicable setbacks or restrictive covenants, or that there is not
access to the Real Property surveyed from a public road, or that there
are any gaps, gores, hiatuses, or overlaps, the same shall be treated
as a title defect, and the provisions and conditions of Section 6.1
shall govern any obligation of Seller to cure the title defect and any
rights of Buyer.
ARTICLE 8
PARTNERSHIP INTERESTS
8.1. Purchase and Sale. Anything in this Amendment to the
contrary notwithstanding, the purchase and sale hereunder shall be
structured as a purchase by Buyer of all the Partnership Interests of
the Selling Partners in lieu of a purchase of the Property, as provided
in Section 2.1. The ownership structure when closing is complete is
depicted on Exhibit V, subject to Lender approval. At closing, the
agreement of limited partnership of H'TOWN shall be amended as
determined by Prime Retail, L.P. and TOWL and approved by the Lender.
8.2. Agreement with Respect to Partnership Interests. Upon closing of
the purchase and sale of the Partnership Interests, and as a condition
thereof, the following will be provided to Buyer:
A. If and when requested by Buyer, an election on the part of
H'TOWN under Section 754 of the Internal Revenue Code, but
only if required by Buyer.
B. Indemnification from Prime Retail, L.P. in form and content
reasonably satisfactory to Buyer indemnifying H'TOWN and its
new partners from and against any and all claims that may be
asserted by creditors of H'TOWN or other third parties making
any claim against H'TOWN or its new partners for any alleged
obligation or liability claimed to exist prior to closing except
those which Buyer has specifically agreed pursuant to this
Amendment are to remain in place and be assumed by Buyer. Such
indemnification shall be secured for a period of twenty-four
(24) months after closing by a right of set off against the
management fees payable pursuant to the Management Agreement
(as defined in this Amendment) and pursuant to the Management
Agreements executed pursuant to the Agreement with The Prime
Outlets of Birch Run, L.L.C. and The Prime Outlets at
Williamsburg, L.L.C. The "Owners" under each of the aforesaid
Management Agreements (including the Management Agreement)
shall have the right to set off against management fees and
leasing commissions payable pursuant to any and all such
Management Agreements all costs, expenses, attorneys fees,
and liabilities of every kind and nature incurred as the result
of assertion of any claim indemnified against under this
Section 8.2B; provided, however, that Prime Retail, L.P.
is given reasonable notice of each claim for which a set off is
sought and opportunity to pay, defend or contest such claim.
C. Evidence of the authority and certificates of good standing in
the states of organization (and Maryland, if they are required
to register to transact business there) of all Selling Partners
who are not individuals to sell their Partnership Interests and
corporate resolutions, trust resolutions, limited liability
company resolutions or partnership resolutions authorizing the
actions of any corporate, trust, limited liability company and
partnership Selling Partners and, if applicable, their general
partners, trustees, members and managers.
D. A certified copy of the Certificate of Limited Partnership
of H'TOWN filed in Delaware and the qualification documents
filed in Maryland.
8.3. Tax Returns. H'TOWN and Selling Partners agree that they
will file H'TOWN's tax return for the year 2001 up to the date of
closing on or before the time prescribed by applicable law as well
as a final tax return for H'TOWN up to the date of closing; and all
of the Selling Partners will pay when due any taxes which may be due or
owing for all periods prior to closing as a result of their having been
partners of H'TOWN. The indemnification contained in Section 8.2(B)
shall apply with equal force to breach of any agreements pursuant to
this Section 8.3, which agreements shall survive closing.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1. Representations and Warranties of Seller. H'TOWN and Prime
Retail, L.P. (collectively "Selling Parties") and the other parties
comprising Seller hereby represent and warrant all of following to
Buyer, which are true and correct as of the Effective Date and will be
true and correct as of the closing date, and all of such representations
and warranties shall survive closing for a period of 18 months:
A. Each of the parties comprising Seller, BRWH, Selling Partners
and Borrowing Entity is a duly formed and validly existing
limited partnership, limited liability company, corporation or
trust as the case may be, under the laws of the State of
formation, and each is, if required by law, duly qualified to
transact business in the State in which the Project it owns is
located. All appropriate resolutions and authorizations
precedent to such parties' authority and power to execute this
Amendment and perform their obligations hereunder have been
properly and duly taken.
B. Other than the Bonds or as reflected in financial information
provided, real property tax bills, and special assessment
notices, if any, there are no impact fees or hook up fees which
will be due or payable by Buyer or H'TOWN after closing
hereunder to any utility company or supplier, or governmental or
quasi-governmental authority as a result of or in connection
with development of any portion of the Project.
C. To Selling Parties' and Seller's knowledge, the legal
description which is attached to this Amendment as Exhibit VII
describes the Real Property fully and does not omit any portion
thereof. The Project contains the approximate acreage and square
footage reflected on Exhibit VIII.
D. To Selling Parties' and Seller's knowledge, (i) there are no
violations by Seller of any copyrights or trademarks with
respect to any of the Personal Property, and (ii) no claims have
been asserted against use of the name "Prime Outlets at
Hagerstown". Seller has full right, power and authority to
authorize Buyer to utilize said name and will defend same
against all third party claims.
E. To Selling Parties' and Seller's knowledge, all of the Property
Materials delivered or to be delivered to Buyer (other than
lease abstracts and lease summaries as to which no
representations or warranties are made except for the
Supplemental Lease Materials to be delivered to Buyer pursuant
to Section 4.2) are true, correct and complete with no
misstatements and with no material omissions. Notwithstanding
anything to the contrary contained in this Amendment, (i) no
representations or warranties are made with respect to the
financial condition of any tenant, including The Home Company,
of the Project or as to the accuracy or completeness of any
financial information on any tenant of the Project, including
The Home Company, provided to Buyer, and (ii) income statements,
operating statements and rent rolls (other than the rent roll to
be provided as part of the Supplemental Lease Materials) may not
take into account various rights of certain tenants under their
leases to pay reduced rental charges under so-called most
favored nations clauses or similar clauses and no party
comprising Seller or Selling Partners shall have any liability
to Buyer on account of any inaccuracy in such materials
resulting therefrom.
F. All service contracts, leases (other than tenant Leases) and
other contracts of any kind or nature are for $10,000.00 or less
per contract or are terminable on 30 days' notice or less
(except as may be listed on Exhibit IX or disclosed in the title
insurance commitment or e xcept as permitted in Section 10.2)
which will be binding upon Buyer or H'TOWN after the closing
date.
G. Except as set forth on Exhibit X, H'TOWN has received no notice
of any violations of any portion of the Project from any
governmental agency or authority and to Selling Parties'
knowledge a ll permits and governmental authorizations which are
appropriate or necessary for construction and operation of the
Project have been duly issued, are in full force and effect.
H. To Selling Parties' and Seller's knowledge, except as disclosed
in H'TOWN's existing environmental reports delivered or to be
delivered by H'TOWN to Buyer hereunder, there is (i) no
contaminant, pollutant or toxic or hazardous waste, substance or
gas in, on, under, over or affecting any part of the Real
Property or its water supplies and (ii) no adverse environmental
condition or violation of any local, state or federal
environmental law with respect to the Property or any part
thereof.
I. No brokerage commission or compensation of any kind is due or
will be due from Buyer, H'TOWN or the Project or the rents
therefrom for the leasing of any space in the Project (except
for leasing commissions that may be payable pursuant to the
Management Agreement for leases entered into after closing).
Leasing commissions for Leases e ntered into after the date
hereof shall be governed by the provisions of Section 10.2
hereof.
J. Selling Parties and Seller have no knowledge of any pending or
contemplated condemnation or eminent domain proceeding or of any
moratorium affecting any portion of the Project.
K. To Selling Parties' and Seller's knowledge, there are no third
party claims pertaining to or affecting the Property or H'TOWN
except for rights of tenants arising under the Leases, rights of
the Lender under the Mercantile Loan documents, rights of
parties under contracts listed on Exhibit IX and contracts
referred to in paragraph F above, tort and similar claims
covered by insurance maintained by Seller, rights of parties
that will be reflected in the title insurance commitment
delivered by Seller to Buyer hereunder, and those matters set
forth on Exhibit XI.
L. Except for leasing or financing arrangements entered into in
the ordinary course of business and taken into account in the
operating expenditures of the Project in the financial
information delivered by Seller to Buyer or entered into after
the Effective Date in accordance with the provisions of Section
10.2 hereof, and except for rights of architects and engineers
in the plans and specifications, H'TOWN is the owner of the
Personal Property (other than the Bonds, ownership of which
shall be transferred to H'TOWN by Prime Retail, L.P. at or
prior to closing, subject to the provisions of Article 22,
subject to the lien securing the Mercantile Loan) free and
clear of all liens, third party claims and encumbrances except
for security interests therein incident to existing
financing for the Project (which will be released prior to
closing except those pertaining to the Mercantile Loan) and the
Mercantile Loan.
M. To Selling Parties' and Seller's knowledge and to the extent
needed, all electricity, telephone, drinking water, irrigation
water, water for fire purposes, sanitary sewage and storm
drainage capacity in sufficient quantity to service the
Project and its tenants adequately is available to the Real
Property and is fully hooked up and operable without payment by
Buyer, H'TOWN or the Project after closing h ereunder of any
impact or connection fees, and all necessary and appropriate
approvals for same have been obtained. The only fees payable by
Buyer or H'TOWN in connection with such utilities after closing
shall be normal usage fees, unless otherwise disclosed in the
real property tax bills, special assessment notices, title
commitments or financial information provided to Buyer in
connection herewith.
N. To Selling Parties' and Seller's knowledge and unless otherwise
disclosed in the real property tax bills, special assessment
notices or title commitment, all entrances and curb cuts for the
Real Property reflected on the as-built survey have been
approved by all governmental and quasi-governmental bodies
having jurisdiction thereover, and any road construction or
installation of traffic signals or similar off-site improvements
which were required as a result of construction or operation of
the Project has been fully completed and paid for.
O. Unless otherwise disclosed in the title commitment, Selling
Parties and Seller have no knowledge of any pending governmental
or quasi-governmental assessment liens or of any planned
improvements that might result in any assessments being levied
by a governmental or quasi-governmental authority against the
Project, other than the existing assessments levied in
connection with the Bonds.
P. There are no collective bargaining or union agreements with any
employee of H'TOWN, and no employee contracts or relationships
exist which will be binding upon H'TOWN or Buyer after closing.
Q. The Rent Roll attached as Exhibit II is a true, correct and
complete depiction of those terms set forth on the Rent Roll for
all Leases for the Project as of the date of such Rent Roll,
all of which are in full force and effect with no known
defaults thereunder by the Landlord or Tenant, except as
disclosed on Exhibit XII. To Selling Parties' and Seller's
knowledge, except as set forth on Exhibit XII, all Leases are
valid and enforceable in accordance with their terms. Except
as disclosed in the Leases, no tenant will be entitled to any
concession or rebate after Closing. No tenant improvement funds
or allowances will be due from Buyer or H'TOWN after closing as
to any Lease in effect as of Closing except for tenant
improvement payments which are credited to Buyer at Closing and
placed by Buyer in escrow to be used solely to pay tenant
improvements. To Selling Parties' and Seller's knowledge, all
spaces within the Project may legally be occupied for the
purposes for which they are leased.
R. Except as disclosed on Exhibit XI, H'TOWN has received no notice
of any actions or claims filed or threatened by anyone against
the Real Property or Personal Property, Seller or Seller's
agents in connection with any personal injury or property damage
sustained by reason of the development, use, occupancy or
operation of the Project.
S. All appropriate resolutions and authorizations precedent to each
of the Selling Partner's authority to sell its Partnership
Interest and to perform its obligations in connection herewith
have been properly and duly taken, except for government
approvals required to transfer the Bonds to H'TOWN, which Seller
shall, subject to the provisions of Article 22, obtain prior to
closing.
T. H'TOWN has not had any employees during its existence to or for
whom there will be any obligations after the closing date
(except for the furnishing of W-2 forms, and payments of final
paychecks, benefits and withholding, all of which will be done
timely by the Selling Partners and at their cost and expense),
including, without limitation, obligations for compensation,
withholding taxes, ERISA and employee benefits.
U. At closing, there will be no third-party claims pertaining to or
affecting any of the Partnership Interests being sold, all of
which will vest in Buyer free and clear of all third-party
liens, claims and encumbrances.
V. Borrowing Entity is 100% owned by H'TOWN. Borrowing Entity has
no liabilities except in connection with the Mercantile Loan.
W. All income taxes, withholding taxes, franchise taxes and all
other liabilities of every kind and nature of H'TOWN except
those being expressly assumed pursuant to this Amendment and
claims fully covered by insurance will, upon conclusion of the
closing, be fully paid and there shall be no sums due or owing
to any third parties whatsoever except to the extent same are
fully disclosed to Buyer at or prior to closing and covered by
the indemnification under Section 8.2.B.
X. The copy of the Agreement of Limited Partnership of H'TOWN
attached as Exhibit XIII is a true, correct and complete copy of
the original which is in full forc e and effect and is not
modified or amended except as indicated on Exhibit XIII. There
are no general partners of H'TOWN except Prime Retail, L.P. and
no limited partners of H'TOWN except Prime Retail, Inc. Each of
the Selling Partners owns and will convey its Partnership
Interest pursuant to this Amendment free and clear of all third
party liens, claims and encumbrances of every kind.
Y. The copy of the letter from Mercantile Bank attached as Exhibit
XIV is a true, correct and complete copy of the original which
remains in full force and effect according to its terms and
which is unamended and unmodified.
Z. The Mercantile Loan is current and in good standing with no
defaults thereunder by H'TOWN or any borrower, obligor or
guarantor thereunder and all representations and warranties made
by all of such parties in connection with the Mercantile Loan
are true and correct except that representations and warranties
regarding the financial condition of Selling Partners may not be
accurate.
9.2. Update. At the time of closing, Seller and Prime Retail, L.P.
will update the representations and warranties contained in Section
9.1(G), (H), (J), (K), (L), (M), (O), (Q) and (R) if they can
truthfully do so. If they cannot do so as to any such paragraphs, then
Seller and Selling Parties shall be in default hereunder unless the
inability to update a representation and warranty is the result of
actions of H'TOWN permitted pursuant to Section 10.2 or if the inability
to update arises from any event beyond the reasonable control of Seller
or Selling Parties or from any act or omission of a third party
unrelated to S ▇▇▇▇▇ or Selling Parties and which cannot be timely
corrected by Seller or Selling Parties by an expenditure of funds which
in the aggregate will not exceed $250,000; provided, however, if there
has been a notice of violation of the kind encompassed by paragraph (G),
and if the cost to rectify same in Buyer's reasonable estimation will
not exceed $250,000 [in the aggregate if there is more than one
(1) violation], then Seller or Selling Parties shall not be in default
but shall agree with Buyer to rectify the violation at Selling Partners'
sole cost and expense. To secure Selling Partners' obligation to
rectify the violation Selling Partners will deposit a sum equal to one
hundred thirty percent (130%) of the estimated cost to complete
rectification of the violation in escrow with the Escrow Agent which
shall be released from escrow only when the violation(s) has (have)
been rectified and final lien waivers are delivered from all parties
supplying work and/or materials in connection therewith. The amount
placed in escrow will not be the limit of Selling Partners' liability
under this Section if the costs of rectification exceed the estimate
plus thirty percent (30%) thereof.
9.3. Indemnification. Seller and Prime Retail, L.P. hereby agree
to indemnify and hold Buyer free and harmless from and against all
claims, costs and expenses incurred by Buyer as a result of a material
breach of or the material falsity of any of the representations or
warranties pursuant to Sections 9.1 and 9.2 and, in the event Buyer is
made a party to any arbitration, mediation or litigation as a result
of such breach or falsity, Seller and Prime Retail, L.P. will pay all
the costs and expenses thereof including reasonable attorneys' fees.
The provisions of this Section 9.3 will survive the closing as to any
claim hereunder asserted by Buyer within eighteen (18) months after
closing hereunder. If Buyer has actual knowledge of representations
and warranties being incorrect and then closes, breach of the
warranty is deemed waived.
9.4. Representations and Warranties of Buyer. Buyer hereby represents
and warrants all of following to Seller and Selling Partners, which are
true and correct as of the Effective Date and will be true and correct
as of the closing date, and all of such representations and warranties
shall survive closing for a period of 18 months:
A. Buyer is a duly formed and validly existing limited liability
company under the laws of the State of Florida, and is or, prior
to Closing, will be duly qualified to transact business in the
State in which the Project is located, if such qualification is
required by applicable law. All appropriate resolutions and
authorizations precedent to Buyer's authority and power to
execute this Amendment and perform its obligations hereunder
have been properly and duly taken.
ARTICLE 10
OPERATING COVENANT
10.1. Maintenance and Operations. Seller and Selling Parties agree
and covenant that H'TOWN will during the term of this Amendment operate,
manage and maintain the Project in its present condition, normal wear
and tear excepted, and at least to the same standards which H'TOWN has
operated, managed and maintained the Project prior to the Effective
Date. H'TOWN shall comply with all material obligations of the landlord
under the Leases and all other material agreements and contractual
arrangements affecting the Project by which H'TOWN is bound. H'TOWN
shall provide written notice to Buyer of any notice from any party
alleging that H'TOWN is in material default in its obligations under any
of the Leases or under any permit, agreement or Loan document affecting
the Property or any portion or portions thereof as well as any other
notices pertaining to or affecting the Project in any material way
received from any governmental or quasi-governmental body, utility
supplier or fire underwriter.
10.2. Contracts and Leasing. No contract out of the ordinary course
of business for or on behalf of or affecting H'TOWN or the Project
shall be negotiated or entered into which is in excess of $10,000.00 or
cannot be terminated on 30 days' or less notice unless Buyer shall have
approved same, which approval will not be unreasonably withheld. Any
and all new Leases and renewals other than those renewals of existing
Leases (the terms of which are contained in the Leases provided to
Buyer as part of the Property Materials) entered into from and after
the Effective Date shall be subject to Buyer's prior approval, which
approval shall not be unreasonably withheld or delayed (and shall be
deemed given if written objection is not made within eight (8) business
days after receipt). All of such Leases and renewals shall be in the
ordinary course of H'TOWN's business and shall be for a use which is
consistent with the present operations of the Project. Notwithstanding
anything to the contrary in this Amendment, H'TOWN may modify Leases
during the Investigation Period in order to resolve any issues that
may have arisen with tenants thereunder with respect to most favored
nation and other provisions of such Leases that may permit the tenants
thereunder to pay reduced rental charges. Such modifications may be
made, however, if, but only if, either (i) there is negligible adverse
impact on Net Operating Income or (ii) Buyer has consented thereto,
such consent not to be unreasonably ithheld. Copies of all Leases and
modifications entered into by H'TOWN after the Effective Date shall be
delivered to Buyer promptly after complete execution thereof. All
leasing commissions, including leasing commissions to third party
brokers, and tenant improvement allowances for Leases entered into after
the Effective Date and prior to closing in accordance with the
provisions of this Section 10.2 shall be paid by Selling Parties prior
to closing hereunder (except for tenant improvement allowances not then
payable which shall be credited to Buyer and escrowed as provided in
Section 9.1.Q), and neither Seller nor any affiliate of Seller shall be
entitled to any leasing commissions as to such Leases under the
Management Agreement. H'TOWN will not enter into any new personal
property leasing or financing arrangements on or after the Effective
Date except in the ordinary course of business where impact on Net
Operating Income is negligible.
10.3. Liabilities. Except to the extent closing adjustments and
prorations have taken into account any obligations, expenses, costs,
liabilities or claims accruing for periods before the closing date and
in any way pertaining to or arising from the ownership or operation
of either H'TOWN or the Project, Selling Parties shall be responsible
to pay the same when due. Prime Retail, L.P. agrees to indemnify and
save Buyer and H'TOWN free and harmless from all of such claims.
This Section 10.3 will survive closing. Buyer shall pay all such
obligations, expenses, costs, liabilities and claims first arising for
periods after the closing date pertaining to or arising from the
ownership or operation of either H'TOWN or the Project and shall
indemnify and save Selling Partners free and harmless from all of such
claims, unless such claims arise from a breach by Seller or Selling
Parties of a representation and warranty under this Amendment of which
Seller is given notice prior to the expiration of such representation
or warranty. Anything in this Amendment to the contrary notwithstanding
there shall not be any time limit on Buyer's ability to assert a claim
against Selling Partners for any unpaid taxes of H'TOWN arising or
attributable to the period of time prior to closing hereunder.
ARTICLE 11
CONDITIONS PRECEDENT
11.1. Buyer's Preconditions. The following are conditions precedent
to Buyer's obligations under this Amendment and in the event any one
or more of such conditions in subparagraphs A, D, E, F, or G below are
not met on or before the dates set forth (or the closing date if no
other date is set forth), Buyer shall have the unqualified right
(which, if such failure of condition also constitutes a default by
Seller or Selling Partners, shall be in addition to the other remedies
available to Buyer on account of Seller's or Selling Partners' default),
to terminate this Amendment and obtain from Escrow Agent a refund of
its ▇▇▇▇▇▇▇ money deposits. If one or more of the conditions precedent
in subparagraphs B, C, or H is not met, Buyer's sole remedy shall be
to extend the closing date one time only for a period not to exceed
thirty (30) days, to see if the condition can then be met or to
terminate this Amendment (on the applicable extended closing date if
the condition is still not met, at Buyer's election) and obtain a
refund of its ▇▇▇▇▇▇▇ money deposit(s) from Escrow Agent:
A. The representations and warranties of Seller and Selling
Parties shall be true and correct in all material respects as of
the closing date and Selling Partners, Seller and Prime Retail,
L.P. shall have performed all of their material obligations
hereunder to be performed at or prior to the closing.
B. H'TOWN will have obtained and delivered to Buyer estoppel
letters addressed to Buyer substantially in the form attached
hereto as Exhibit VI from tenants occupying at least 70% of the
leasable space in the Project. To the extent estoppel letters
are not required hereunder and not obtained, H'TOWN will deliver
to Buyer Selling Partners' affidavit as to such Leases
containing the same information that the estoppel letters
contain.
C. There shall not be any local insurrection, war, disaster,
moratorium preventing tenants from operating, or other event
(other than a matter covered by Article 14 hereof) preventing
the Real Property from being occupied by a material number of
tenants with concurrent right to tenants not to pay rent.
D. Any and all loans made by any Selling Partners to H'TOWN will
have been paid in full and will have been cancelled.
E. A balance sheet dated as of the date of closing for H'TOWN shall
be delivered to Buyer reflecting that the only assets of H'TOWN
are the Property, the Leases pertaining thereto, the contracts
referred to in this Amendment and rights under this Amendment.
No liabilities are to be reflected on the balance sheet other
than liabilities that are being assumed pursuant to this
Amendment and those that will be paid and satisfied in full or
fully reserved and escrowed for or fully insured against at the
time of closing in the same manner as provided in Section
9.1(W).
F. H'TOWN will have delivered to Buyer a certified copy of its
Certificate of Limited Partnership filed in Delaware and the
qualification documents filed in Maryland for H'TOWN.
G. UCC tax lien and judgment searches on H'TOWN and all Selling
Partners will be delivered to Buyer reflecting the absence of
any liens, security interests or encumbrances against H'TOWN,
the Partnership Interests or the Personal Property except for
(i) security interests against H'TOWN incident to and securing
the Mercantile Loan, (ii) equipment and other Personal Property
leases otherwise permitted under this Amendment and (iii) those
that will be released at closing.
H. A certificate addressed to H'TOWN, the Borrowing Entity and the
Property Entity (the "Certificate") will be delivered by
Mercantile-Safe Deposit and Trus Company stating that the
remaining principal balance of the Mercantile Loan (after
payment of $2,200,000.00 principal at closing) is
$46,862,000.00. (Seller and Prime Retail, L.P. will exercise
commercially reasonable efforts to have the certificate also
state that the Mercantile Loan is current and in good standing
with no known defaults thereunder but such additional statement
is not a precondition hereunder, nor shall a failure to obtain
such additional statement constitute a default hereunder.)
11.2. Seller's Preconditions. The following are preconditions to
Seller's obligations under this Amendment and in the event the condition
in subparagraph A below is not met on or before the closing date, Buyer
shall be in default hereunder and Seller shall be entitled to avail
itself of the remedy provided in Article 17:
A. The representations and warranties of Buyer shall be true and
correct as of the closing date and Buyer shall have performed
all of its material obligations hereunder to be performed at or
prior to the closing.
11.3 Mutual Precondition. The following is a precondition to the obligations
of all parties to this Amendment and, if not met, will entitle any party
hereto to terminate this Amendment, in which case the ▇▇▇▇▇▇▇ money
deposits paid by Buyer will be refunded to Buyer: Mercantile-Safe
Deposit and Trust Company will hav e consented to the transfer of the
Partnership Interests and continuation of the Mercantile Loan on the
terms set forth in this Amendment pursuant to documents reasonably
satisfactory to Buyer and Seller.
ARTICLE 12
CLOSING
12.1. Place, Time, Etc. Subject to satisfaction or waiver of the conditions
precedent to closing set forth in Article 11 above and the other
provisions of this Amendment, closing shall take place in Orlando,
Florida at the office of the Title Insurance Company or the office of
Buyer, or at such other place as the parties may mutually agree on that
date which is thirty (30) days after expiration of the Investigation
Period.
12.2. Documents, etc. by Seller. H'TOWN, Selling Partners and/or Seller, as
appropriate, shall cause copies of the form of all closing documents
that are to be prepared by them to be delivered to Buyer for review at
least five(5) days prior to closing. The documents and other materials
to be executed (where applicable) and delivered (where applicable) by
Seller for closing include:
A. Closing Statement.
B. Intentionally omitted.
C. Intentionally omitted.
D. Intentionally omitted.
E. Notices to tenants of the Project, if applicable.
F. License Agreement of right of use of the name "Prime Outlets at
Hagerstown" per Section 16.2.
G. Seller's Affidavit typically required by the Title Insurance
Company.
H. FIRPTA Affidavits from all Selling Partners.
I. Certificate updating representations and warranties in
accordance with Section 9.2.
J. Evidence of the authority of the Seller, H'TOWN, Selling
Partners and, if applicable, the constituent partners of Selling
Partners to act and corporate (or other entity, if applicable)
resolutions authorizing the actions of any such party.
K. Certificates of good standing of the corporate (or other entity,
if applicable) general and limited partners of H'TOWN and, if
applicable, the constituent partners of Selling Partners in the
states of their organization and, if required by law, to qualify
to do business in the State of Maryland.
L. Delivery of all original permits, licenses, leases, contracts,
approvals, plans, specifications, surveys, certifications,
warranties, and authorizations referred to herein and all items
of Personal Property (including evidence of transfer of the
Bonds, subject to the provisions of Article 22), including
originals of the Property Materials in Seller's possession or
control. Included within the term "warranties" are all of
H'TOWN's and Prime Retail, L.P.'s rights, if any, pertaining
to the Project against Seller's architects, engineers, other
professionals, contractors, manufacturers, suppliers and other
third parties.
M. Amendment to Pledge Agreement in accordance with Section 1.13.
N. Estoppel letters from tenants (and affidavits of Seller per
Section 11.1.(B) if applicable).
O. Management Agreement.
P. Mercantile Loan assumption documents (as soon as possible after
the Lender has provided same).
Q. Amendment of Joint Venture Agreement as provided under Article
16.
R. Assignments of Partnership Interests b y the Selling Partners
with warranties of title.
S. All documents appropriate or necessary in connection with
assignment of the Bonds from Prime Retail, L.P. to H'TOWN,
including endorsement thereof and required consents to the
transfer, subject to the provisions of Article 22.
T. Covenant Not To Compete per Section 16.3.
U. Articles of Organization, Operating Agreement and certificate of
good standing of the Property Entity and the Property Entity
Subsidiary.
V. Original Agreement of Limited Partnership of H'TOWN and original
and current Certificate of Limited Partnership.
W. Indemnification agreements and all other instruments, documents
and materials required pursuant to this Amendment including
Sections 9.2, 9.3 and 1.13.
X. Declaration(s) of Easements and Restrictions pursuant to
Section 16.5.
Y. Documents to change the bank account or signatories on the
present bank account where rents from the Project are deposited.
Z. Documents required pursuant to Section 22.2, if applicable.
12.3. Documents, etc. By Buyer. Buyer shall cause copies of documents that are
to be delivered by Buyer to Seller at closing to be delivered to Seller
for review at least five (5) days prior to closing. The documents and
materials to be executed (where applicable) and/or delivered (where
applicable) by Buyer for closing include:
A. Evidence of the good standing and qualification to transact
business in the State of Florida and in the state of Maryland,
for Buyer, if required by applicable law.
B. Evidence of authority of Buyer to act and resolution authorizing
the actions of the general partner signing on behalf of the
Buyer.
C. Sufficient funds to the Title Insurance Company escrow account
to complete the closing. (The funds need not be delivered until
the day of closing.)
D. Covenant Not to Compete.
E. Management Agreement.
F. Articles of Organization and Operating Agreements of Property
Entity and Property Entity Subsidiary. .
G. Mercantile Loan Modification Documents.
H. Amendment to Joint Venture Agreement as provided under Article
16.
I. The License Agreement referred to in Section 16.2.
J. Declaration(s) of Restrictions pursuant to Section 16.5.
K. Amendment to H'TOWN agreement of limited partnership.
12.4. Further Documents. Buyer and Seller each agree to
execute all the documents contemplated by this Amendment to
be executed by them to complete closing hereunder and such
further documents and instruments and to deliver to each other
such further materials in their possession at closing (or
thereafter if forgotten at closing or if the need did not become
apparent until after closing) as may be necessary or appropriate
to accomplish the purpose and intent hereof. All documents are
subject to the approval of Seller, Selling Partners and Buyer,
which approval will not be unreasonably withheld or delayed.
Under no circumstances shall any deed or other instrument of
conveyance of the Real Property be executed, delivered or
recorded in connection with the transactions contemplated by
this Amendment.
ARTICLE 13
CLOSING ADJUSTMENTS AND PRORATIONS
13.1. The following items are to be apportioned at closing in an
equitable manner as of 11:59 p.m. on the last day immediately preceding
the day on which the closing occurs ("the Adjustment Date") so that the
income and expense items with respect to the period on and prior to the
Adjustment Date will be for the account of Selling Partners and the
income and expense items with respect to the period after the Adjustment
Date will be for Buyer's account in the same manner as if the sale and
purchase were of the Property instead of the Partnership Interests.
A. Rents as and when collected. If at the time of the Adjustment
Date there are basic rents owed by tenants that have not been
collected by H'TOWN and are applicable to any period of time
prior to the Adjustment Date, Seller shall deliver to Buyer a
schedule of such uncollected rents, and Buyer agrees that such
rents, if and when collected, shall be paid by Buyer to Selling
Partners. Rents collected by Buyer shall be applied first to
then current rents on a tenant by tenant basis, and only after
they have been paid will application be made to past-due rents
and then in reverse order of accrual.
Any percentage rentals received after the closing date and
attributable entirely or in part to a period before the closing
date shall be allocated between Buyer and Seller such that
Seller's share with respect to each tenant shall be an amount
equal to the total percentage rentals received for such tenant's
lease year, multiplied by a fraction equal to that portion of
such tenant's lease year preceding the closing date. Prorated
percentage rentals will be paid by the party receiving the
percentage rentals from the tenants within ten days after
receipt, as and when received.
Payments of utility, common area, sprinkler, insurance, and
other charges (including, without limitation, sewer charges and
insurance, but excluding marketing fund or promotion fund
charges) from tenants shall be apportioned in an equitable
manner. Marketing fund or promotion fund charges and the costs
expenses paid or to be paid with such charges shall be treated
as a fund, which shall not be adjusted at Closing. Instead, the
fund balance, whether positive or negative at Closing, shall be
transferred to the manager under the Management Agreement who
shall continue to collect all marketing fund and promotion fund
charges and pay any marketing or promotion fund expenses after
Closing through the end of the then fiscal year for the
marketing or promotion fund. The Manager shall not be obligated
to expend for marketing and advertising expenses in such fiscal
year more than the marketing and promotion fund charges received
after Closing plus or minus (if the fund has a negative balance)
the balance in the fund delivered to the Manager at Closing.
After the expiration of the then fiscal year of the marketing or
advertising fund, the Manager shall deliver any excess moneys
remaining in the fund to the Buyer or, at Buyer's discretion,
retain such excess, in either case for application to marketing
and promotion fund expenses subsequently incurred.
B. Real estate taxes and annual installments of special
assessments, and other state, county or city taxes or
assessments, if any, on the basis of the fiscal year for which
assessed. If the closing date shall occur before the tax rate or
assessment is fixed, the apportionment of such real estate taxes
at the closing shall be upon an estimate of the taxes for the
year of closing; provided, however, that readjustment will be
made based upon the actual tax amount, when determined.
C. Amounts paid or payable in respect of any service contracts
that remain in effect and all costs and expenses incurred in
common area maintenance charges, or insurance charges; provided,
however that Buyer shall have no liability on account of any of
the foregoing (other than costs and expenses included in common
area maintenance charges), unless included in the operating
budgets, or income and expense statements provided by Seller to
Buyer prior to the execution hereof. Following issuance of any
annual reconciliations to the tenants of the Project and receipt
of any reconciliation payments due from the tenants, Buyer and
Seller shall readjust the items under this paragraph C and the
corresponding income items under paragraph A.
D. Personal property taxes, if any, on the basis of the fiscal
year for which assessed. However, a readjustment shall be made
based upon the actual tax amount effective for the Adjustment
Date, when determined.
E. Water, electricity, oil, gas, steam, telephone, sewer and other
utilities based on actual charges when final meter readings have
been obtained or actual expenses determined. Seller, to the
extent current readings are available, shall endeavor to furnish
readings made on or immediately prior to the Adjustment Date.
F. Wages and payroll taxes, vacation pay and fringe benefits for
employees of Seller, if any, to be hired by Buyer.
G. Such other apportionments and adjustments as are customarily
apportioned upon the transfers of property similar to the
Project.
H. Interest on the Mercantile Loan and any revenues, escrows and
other deposits (exclusive of deposits which may secure potential
liabilities of H'TOWN which arose prior to closing hereunder,
which deposits shall be paid by Selling Partners and, if
refunded, shall belong to them) held under the Mercantile Loan.
I. Tenant security deposits.
J. Interest and principal on the Bonds, but the adjustment shall be
paid as and when payments thereof are received. Principal and
interest are both payable in arrears, interest being payable
semi-annually and principal being payable annually.
13.2. Liens. Notwithstanding the foregoing, certified, confirmed and
ratified special assessment liens as of the date of closing are to be
paid by Seller unless (a) the Leases provide for the tenants to pay them
under their Leases or (b) such assessment liens were disclosed in the
real property tax bills, special assessment notices or title commitments
delivered to Buyer, or (c) the proceeds of the special assessments
are used to pay principal and interest on the Bonds. Pending special
assessments which have not yet been assessed against the Project as of
the date of closing shall be assumed by Buyer, provided, however, that
where the improvement has been substantially completed or where Seller
or Selling Partners had knowledge of the proposed improvement on or
before the date of Closing, such pending lien shall be considered as
certified, confirmed or ratified and Selling Partners shall, at Closing,
be charged an amount equal to the last estimate by the appropriate
public body of the assessment for the improvement unless (a) the Leases
provide for the tenants to pay same or (b) the proceeds of the special
assessments are used to pay principal and interest on the Bonds, in
which case such special assessments shall be adjusted between Buyer and
Selling Partners as provided in Section 13.1 and paid thereafter by
Buyer.
ARTICLE 14
RISK OF LOSS
14.1. Damage. If the improvements at the Project are damaged by fire
or other casualty prior to closing, then the following provisions shall
apply. Seller shall promptly notify Buyer of the occurrence of the fire
or other casualty. If the cost of restoring the damage, as reasonably
estimated by the contractor selected by Seller to perform the
restoration, is less than $5,000,000, then, unless the Lender then
holding the Mercantile Loan requires that the insurance proceeds be
applied to the Mercantile Loan and Seller does not elect to provide its
own funds for such purpose (provided, however, that if the amount of
insurance proceeds applied to the Mercantile Loan exceeds $500,000,
Seller may not make such election without Buyer's written consent),
Seller shall proceed to restore the Project at Seller's expense and
closing shall occur as scheduled hereunder. If the Lender holding
the Mercantile Loan applies the insurance proceeds to the Mercantile
Loan and the Seller does not elect to provide its own funds for such
purpose, or, if the insurance proceeds so applied exceed $500,000
and Buyer does not approve of Seller providing its own funds for such
purpose within 15 days after a request therefor from Seller, then
Seller shall terminate this Amendment. If restoration cannot be
completed within 120 days after the closing date set forth herein, as
reasonably estimated by the contractor selected by Seller to perform
the restoration, Buyer may terminate this Amendment by giving written
notice to Seller within 30 days after Seller notifies Buyer of such
casualty and of the estimated time and cost of restoration. If the cost
of restoring the damage is $5,000,000.00 or more, as reasonably
estimated by the contractor selected by Seller to perform the
restoration, either Seller or Buyer may terminate this Amendment.
14.2. Taking. In the event there shall be a threatened, pending or
completed exercise of the power of eminent domain or deed in lieu
thereof of any material or substantial portion of the Project, Buyer
shall have the option, to be exercised within 30 days after Buyer is
given written notice thereof, (a) if the amount of proceeds from the
condemnation has not yet been determined, to postpone the date of
closing for a period of up to 30 days, or (b) to complete closing
hereunder and take an assignment of the proceeds paid or to be paid
therefore, or (c) either at such time or prior to the expiration of the
extension period as provided in (a) above, to terminate this Amendment.
14.3. Termination. Upon any termination under this Article 14, Buyer
shall be refunded its entire ▇▇▇▇▇▇▇ money deposit(s) and neither party
shall have any further liability to the other under this Amendment,
except that the indemnification and repair obligations of Buyer under
Section 4.4 shall survive.
ARTICLE 15
EXPENSES
15.1. Seller's Expenses. Subject to the provisions of Sections 1.13
and 12.4, Selling Partners shall pay all documentary stamps and/or
transfer or recording taxes, if any, (provided, however, that any
document which triggers liability for Florida documentary stamps will
not be signed in Florida) the cost of the title insurance commitment
and the owner's title insurance policy premiums; all costs of recording
documents which may be necessary to deliver good and marketable title to
Partnership Interests and the Property and of clearing title to the
Property; any escrow fee charged by the Title Insurance Company;
Seller's attorney's fees; all other costs and expenses necessary to
deliver the Property Materials and title to the Property and the
Partnership Interests to Buyer as required by the terms of this
Amendment; the costs of updating the survey and of any title premiums
for updating or endorsing the mortgagee title policies held by Lender;
any transfer taxes in connection with assignment of the Partnership
Interests; charges assessed in connection with transfer of the Bonds;
and all costs and expenses associated with continuation of the
Mercantile Loan and consent to the transfer of the Partnership Interests
to Buyer by Mercantile (excluding Buyer's attorneys' fees).
15.2. Buyer's Expenses. Buyer shall pay the cost of recording any
amendments to the certificate of limited partnership of H'TOWN and
Buyer's attorney's fees and any of Buyer's Investigation Period studies
and tests.
ARTICLE 16
MANAGEMENT AGREEMENT; COVENANT NOT TO
COMPETE; JOINT VENTURE AGREEMENT
AND DECLARATION OF RESTRICTIONS
16.1. Management Agreement. As an inducement to Buyer and to Seller
to enter into this Amendment, Buyer and Seller have agreed that the
Project will be managed on behalf of Buyer in accordance with the terms
of the Management Agreement.
16.2. Use of Name. Buyer and any successor to Buyer shall have a
license to use the name "Prime Outlets at Hagerstown" until the final
expiration or termination, as provided for therein, of the Management
Agreement. If the Management Agreement is terminated in accordance with
its terms for "good cause", such license shall simultaneously terminate,
which termination shall require the immediate and permanent cessation of
usage of such names. The form of the licensing agreement will be the
same as for the Birch Run and Williamsburg Projects. "Good cause" for
termination of the Management Agreement is defined in the Management
Agreement.
16.3. Covenant Not to Compete. Prime Retail, L.P., the Prime Outlets
at Birch Run, L.L.C. and the Prime Outlets at Williamsburg, L.L.C. will
enter into a Covenant Not To Compete in form similar to that signed
at the closing of the Birch Run Project except that no individual will
join therein.
16.4. Joint Venture Agreement. The Joint Venture Agreement was
entered into in accordance with Section 15.4 of the Agreement and
subsequently amended. At closing, the Joint Venture Agreement will be
further amended to provide:
A. The purchase option for the Project only will be timed to allow
either party time to close on the purchase of the Project after
expiration of the prepayment premium under the Permanent Loan,
with all deposits posted in connection with the exercise of the
purchase option to be applied to the purchase price at the time
that closing on the purchase of the last of the three Projects
has occurred.
B. Sale by the Joint Venture of the Bonds; all capital calls
(except those provided for by the terms of this Amendment),
operating and other budgets; dissolution of H'TOWN and the terms
of the Permanent Loan will require approval of both Joint
Venturers.
C. Operating Distributions to TOWL under Section 8A(v)(a) of the
Agreement of Joint Venture of the Joint Venture will be 11% per
annum (in lieu of 10% per annum) of the amounts stated in such
Section to the extent applicable to the Project only (and will
remain at 10% per annum with respect to the Birch Run and
Williamsburg Projects).
D. Capital calls in the ratio of 30% BRWH and 70% TOWL will be made
to make up any difference between the actual amount of the
Permanent Loan to the extent it is at least $44,000,000.00 and
the then principal amount of the Mercantile Loan at the time of
closing the Permanent Loan and, if necessary, to provide funds
for reserves required by the Lender making the Permanent Loan.
16.5. Declaration(s) of Easements and Restrictions. H'TOWN or other
affiliates of Prime Retail, L.P. own parcels of vacant land which are
adjacent to the Real Property and which, if owned by H'TOWN, will be
transferred to other entities prior to closing. At closing, H'TOWN and
the owners of such parcels will enter into (a) Declaration(s) of
Easements and Restrictions. Such restrictions shall include those
matters listed on Exhibit XIII. The Declaration(s) of Easements and
Restrictions shall be recorded.
ARTICLE 17
DEFAULT
17.1. If Buyer shall default in Buyer's obligations under this Amendment in
any material manner, the ▇▇▇▇▇▇▇ money deposit(s) paid to date by Buyer
together with any interest that may have been earned thereon, shall be
paid to Seller as full, complete and liquidated damages in full
settlement of any and all claims hereunder, whereupon all parties
shall be released of all obligations under this Amendment, except for
those obligations of Buyer which, pursuant to specific provisions of
this Amendment, survive any termination of this Amendment. If Seller
or any of Selling Partners shall default in any of their obligations
under this Amendment in any material manner, Buyer may elect as its
sole and exclusive remedies to (i) terminate this Amendment and obtain
a refund of its deposit(s) or (ii) Buyer may avail itself of specific
performance, and, in either case, recover actual damages in a maximum
amount equal to the amount of the ▇▇▇▇▇▇▇ money deposits then being held
pursuant to this Amendment.
ARTICLE 18
BROKERAGE COMMISSION
18.1. No Broker. Seller, Selling Partners and Buyer each represent
and warrant one to the other, that they have dealt with no broker,
finder or similar individual or entity in connection with this
transaction. Seller and Selling Partners hereby agree to hold Buyer
free and harmless from all brokerage or similar claims made by any
entity claiming through or as a result of dealings with them. Buyer
hereby agrees to hold Seller and Selling Partners free and harmless from
all brokerage or similar claims made by any entity claiming through or
as a result of dealings with Buyer including ▇▇▇▇ Enterprises and its
employees. The provisions of this Section shall survive closing
hereunder and shall survive any termination of this Amendment.
ARTICLE 19
SURVIVAL OF CERTAIN PROVISIONS
19.1. Wherever in this Amendment obligations of any party are stated
to survive closing hereunder, such obligations shall survive closing and
delivery of the closing documents, subject to any limitations on the
period of survival set forth in this Amendment.
ARTICLE 20
NOTICES
20.1. How Given. All notices hereunder shall be written and shall be
deemed given upon receipt thereof or, if receipt is refused, upon the
date of refusal. Notices shall be valid if delivered by any of the
following means: certified mail, return receipt requested; telecopier;
hand delivery or delivery by bonded courier, reputable overnight
delivery services, or telegram.
20.2. Notices to Seller and Selling Partners shall be sent to Seller at the
address set forth at the beginning of this Amendment with copies to:
R. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Prime Retail, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. 410/234-1761
20.3. To Buyer. Notices to Buyer shall be sent to Buyer at the address
set forth at the beginning of this Amendment with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇ Ciklin ▇▇▇▇▇▇ Martens ▇▇▇▇▇▇ & ▇'▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. 561/820-0389
20.4. Change. Any party may change its address or telecopier number
for notices by giving due notice of such change to the other party
hereto.
ARTICLE 21
ESCROW AGENT
The following provisions apply to the Escrow Agent, but only in
its capacity as such and not in its capacity as a title insurer or
otherwise:
21.1. Exculpation. Escrow Agent is hereby released and exculpated of
all liability whatsoever arising out of or in connection with its
activities as Escrow Agent hereunder, except to the extent of loss or
damage caused by Escrow Agent's misconduct or negligence.
21.2. Reliance. Escrow Agent may rely and shall be protected in acting
upon any paper or other document which may be submitted to it in
connection with its duties hereunder and which is believed by it to be
genuine and to have been signed or presented by the proper party or
parties.
21.3. Standard of Duty. Except to the extent caused by Escrow Agent's
misconduct or negligence, the Buyer, Seller, and Selling Partners
jointly and severally promise and agree to indemnify and save Escrow
Agent harmless from any claims, liabilities, judgments, reasonable
attorneys' fees and other expenses of every kind and nature which may
be incurred by Escrow Agent by reason of its acceptance of, and
performance under, this instrument.
21.4. Compensation. Escrow Agent shall not be entitled to any fee or
other compensation for acting as Escrow Agent hereunder. If Escrow Agent
shall be required to interplead any escrow funds or shall become
involved in litigation over the ▇▇▇▇▇▇▇ money deposit(s) or any portion
thereof, then Escrow Agent shall be entitled to the costs, expenses and
attorneys' fees incurred in such action.
21.5. Disputes. Escrow Agent assumes no liability hereunder except
that of a stakeholder. If there is any dispute as to whether Escrow
Agent is obligated to deliver any funds or documents, or as to whom the
funds or documents are to be delivered, Escrow Agent will not be
obligated to make any delivery, but in such event may hold the funds or
documents until receipt by Escrow Agent of an authorization in writing
signed by all of the persons having an interest in such dispute,
directing the disposition of any escrow funds or documents held by
Escrow Agent. In the absence of such authorization, Escrow Agent may
hold the deposit or documents until the final determination of the
rights of the parties in an appropriate proceeding. If such written
authorization is not given, or proceedings for such determination are
not begun and diligently continued, Escrow Agent may, but is not
required, to bring an appropriate action or proceeding for leave to
place the deposit or documents with the court, pending such
determination. Once Escrow Agent has tendered into the registry or
custody of any court of competent jurisdiction all money and/or
documents in its possession under this Amendment, or has made delivery
of the deposit in any other manner provided for herein, Escrow Agent
shall be discharged from all duties and shall have no further liability
hereunder as Escrow Agent.
21.6. Investigation Period. Anything to the contrary in this Article
21 notwithstanding, if Buyer delivers notice to the Escrow Agent (and
reflects that a copy thereof has also been provided to Seller) to
terminate this Amendment within the time period and as set forth in
Section 4.3, Escrow Agent will return the ▇▇▇▇▇▇▇ money deposit to Buyer
without requiring any confirmation from Seller or Selling Partners and
notwithstanding any contrary request or demand from Seller and/or
Selling Partners.
ARTICLE 22
SPECIAL PROVISIONS REGARDING BONDS
22.1. Conveyance at Closing. It is the intention of the parties that
the Bonds be conveyed to H'TOWN or the Property Entity at closing as
elsewhere provided in this Amendment. Buyer agrees to cooperate with
Prime Retail, L.P. in its efforts to convey the Bonds by signing
documents reasonably requested by the issuer of the Bonds and/or bond
counsel (provided same are subject to Buyer's approval which will not be
unreasonably withheld or delayed), including certifications that Buyer
is a sophisticated investor who is acquiring the Bonds for its own
account and not with the intent of re-selling them. Prime Retail, L.P.
agrees to use its commercially reasonable efforts prior to closing and
its best efforts after closing to obtain the requisite governmental and
other approvals required for transfer of the Bonds and to obtain
transfer of the Bonds (the "Approvals and Transfers") by the time of
closing.
22.2. Absence of Approvals and Transfers. If the Approvals and
Transfers are not obtained at or prior to closing then the following
shall apply:
A. If it reasonably appears to Buyer that all of the Approvals and
Transfers will never be forthcoming, Buyer shall have the right to
terminate this Amendment. In such case, if Prime Retail, L.P. has
exercised its commercially reasonable efforts to obtain the Approvals
and Transfers, Buyer's ▇▇▇▇▇▇▇ money deposits will be refunded; if Prime
Retail, L.P. has not exercised its commercially reasonable efforts to
obtain the Approvals and Transfers, Seller, and Prime Retail, L.P. shall
be in default hereunder.
B. If it reasonably appears to Buyer that all the Approvals and
Transfers will be forthcoming in the future, closing will occur without
the Approvals and Transfers with no reductions in or escrow of the
purchase price, subject to all of the following:
(i) Prime Retail, L.P. will exercise its best efforts to
obtain all the Approvals and Transfers and will deliver the
Approvals and Transfers and fully complete transfer of the Bonds
on or before May 1, 2002.
(ii) A bond power transferring the Bonds will be executed and
delivered to Buyer by Prime Retail, L.P. along with such other
documents that are necessary or appropriate for transfer of the
Bonds that are possible to be executed and delivered in the
absence of the Approvals and Transfers.
(iii) Prime Retail, L.P. will execute a trust agreement
acknowledging that it holds bare legal title to the Bonds for
and on behalf of Buyer, who ha s full equitable title thereto,
full rights to all interest and principal on the Bonds (subject
to the adjustment therefor provided for in Section 13.1), full
power and authority to make all decisions pertaining to the
Bonds and the right to direct the trustee in all matters
pertaining to the Bonds. Prime Retail, L.P. will serve in its
capacity as trustee without compensation.
(iv) BRWH will pledge one third (1/3rd) of its ownership
interests (including all right to vote such interests and
receive distributions with respect thereto), in the Joint
Venture to Buyer to secure Prime Retail, L.P.'s obligation to
complete conveyance of legal title to the Bonds with all
requisite Approvals. Such pledge will be pursuant to a pledge
agreement similar in form to the Pledge Agreement. UCC financing
statements will be recorded with respect to such pledge.
ARTICLE 23
MISCELLANEOUS
23.1. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their successors and permitted
assigns. Except for assignment by Buyer to the Joint Venture, the
Property Entity or the Property Entity Subsidiary no party hereto may
assign this Amendment without the prior written consent of the other
parties, which, except as otherwise expressly provided herein, may be
withheld in the sole discretion of the non-assigning party. This
Amendment may be executed in multiple counterparts and, when executed
by all parties, shall constitute one agreement effective and binding on
all parties. No persons or entities other than the parties hereto and
their respective successors and permitted assigns shall be deemed
beneficiaries of any of the provisions of this Amendment.
23.2. Severability. In the event of the invalidity of any provision
hereof, same shall be deemed stricken from this Amendment, which shall
continue in full force and effect as if the offending provision were
never a part hereof.
23.3. Pronouns. Use of pronouns or nouns in any form where they
appear in this Amendment shall be read as either masculine, feminine or
neuter and either singular or plural wherever the context and facts
permit.
23.4. Headings and Exhibits. Article, Section and paragraph headings
are inserted solely for ease of reference and shall not be construed to
enlarge, modify or limit the provisions hereof. References to numbered
or lettered Articles, Sections or paragraphs refer to Articles, Sections
and paragraphs of this Amendment unless specified to the contrary.
References to Exhibits are to the Exhibits attached hereto which are, by
this reference, made a part hereof.
23.5. Time of the Essence. Time is of the essence hereunder. However,
if any due date hereunder falls on a Saturday, Sunday or
nationally-recognized holiday, the due date shall be the first day
thereafter which is not a Saturday, Sunday or holiday.
23.6. Attorneys' Fees. In the event of any litigation arising out of
this Amendment, the prevailing party shall be entitled to reimbursement
of the costs and expenses thereof from the other party or parties,
including reasonable attorneys' fees and including such costs, expenses
and fees incurred on appeals of such litigation.
23.7. Construction of Agreement. The parties agree that this
Amendment was prepared jointly by them and shall be construed on a
parity as between the parties. There shall be no canon of construction
for or against any party by reason of the physical preparation of this
instrument.
23.8. Effect of Words. Wherever the word "including" appears in this
Amendment, it shall be deemed to mean "including, without limitation" if
the context permits.
23.9. No Amendment. No amendment, modification, change or alteration
of this Amendment shall be valid or binding unless in writing and signed
by all the parties.
23.10. No Agency. Nothing in this Amendment shall be deemed to create
an agency relationship between Seller and Buyer. The relationship of the
parties is strictly that of a seller and a buyer.
23.11. Governing Law. All matters involving this Amendment shall be
governed by and construed in accordance with Maryland law.
23.12. Entire Agreement. Except for a Confidentiality Agreement among
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Associates USA, Ltd. and Prime Retail, L.P.
dated December 3, 2001, the Agreement and the Settlement Agreement,
which all shall survive execution hereof, this Amendment is the only
agreement among the parties and/or their affiliates pertaining to the
Project and all prior negotiations and agreements with respect thereto
(except those specifically mentioned above) are merged herein.
23.13. Faxes. Faxed signatures hereon shall be binding as if they were
originals.
23.14. Obligations. All obligations of Seller, Selling Partners,
Selling Parties, H'TOWN and/or Prime Retail, L.P. hereunder are joint
and several on the part of the parties who are named with respect to
any particular obligation, except that (i) Prime Retail, Inc. shall be
liable for covenants, representations and warranties and for
indemnifications hereunder solely in its capacity as general partner
of Prime Retail, L.P. and not as a Selling Partner or Selling Party
(except Prime Retail, Inc. is directly responsible with respect to
its obligation to convey its 1% Partnership Interest pursuant to this
Amendment and for representations and warranties pertaining to its
ownership thereof free and clear of all third party liens, claims and
encumbrances); and (ii) any and all liabilities and obligations of the
Prime Outlets at Birch Run, L.L.C. and of the Prime Outlets of
Williamsburg, L.L.C. under this Amendment (but not otherwise) shall
be of no force or effect unless and until closing occurs under this
Amendment. All obligations of Seller under this Amendment shall,
once closing has occurred, be obligations of the Prime Outlets at
Birch Run, L.L.C. and of the Prime Outlets at Williamsburg, L.L.C.
and not of H'TOWN.
NO FURTHER TEXT - SIGNATURE PAGES FOLLOW.
In the Presence of: SELLER:
THE PRIME OUTLETS AT BIRCH RUN, L.L.C.,
a Delaware limited liability company
By: PRIME RETAIL, L.P.,
its managing member
BY: PRIME RETAIL, INC.,
its general partner
--------------------------
By:
-------------------------- -----------------------------
Printed Name:______________________
Title:______________________
THE PRIME OUTLETS AT WILLIAMSBURG, L.L.C.,
a Delaware limited liability company
By: PRIME RETAIL, L.P.,
its managing member
BY: PRIME RETAIL, INC.,
its general partner
--------------------------
By:
-------------------------- -----------------------------
Printed Name:______________________
Title:______________________
OUTLET VILLAGE OF HAGERSTOWN LIMITED PARTNERSHIP,
a Delaware limited partnership
By: PRIME RETAIL, L.P.,
its general partner
BY: PRIME RETAIL, INC.,
its general partner
--------------------------
By:
-------------------------- -----------------------------
Printed Name:______________________
Title:______________________
BUYER:
▇▇▇▇ TRIPLE OUTLET, L.C.,
a Florida limited liability company
--------------------------
By:
-------------------------- -----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Manager and
Chief Executive Officer
JOINDER
Prime Retail, L.P. joins in this Amendment for the purpose of agreeing to
be bound by the provisions of Section 1.13 pertaining to its guarantee of the
Mercantile Loan and indemnification obligations under such Section.
PRIME RETAIL, L.P.
By: Prime Retail, Inc., general partner
By: --------------------------------------------
JOINDER
The Escrow Agent joins in this Amendment in its capacity as Escrow Agent
only to acknowledge its agreement to the provisions of Article 21 and its
agreement to hold the ▇▇▇▇▇▇▇ money deposit(s) pursuant hereto.
CHICAGO TITLE INSURANCE COMPANY, Escrow Agent
By: --------------------------------------------
JOINDER
Triple Outlet World, Ltd. joins in this Amendment for the purpose of
agreeing to be bound by the provisions hereof pertaining to amendment of the
Agreement of Joint Venture of the Joint Venture.
TRIPLE OUTLET WORLD, LTD.
By: ▇▇▇▇ TRIPLE OUTLET, L.C.
By: --------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇, Manager
and Chief Executive Officer
JOINDER BY SELLING PARTNERS
The undersigned, comprising all of the Selling Partners join in this
Amendment for the purpose of agreeing to be bound by its provisions and to
evidence their (i) agreement to sell their respective Partnership Interests
pursuant to this Amendment; (ii) their consent to the transfer by all other
Selling Partners of the transfer of their respective Partnership Interests
pursuant to this Amendment; and (iii) their agreement that Prime Retail, L.P. be
jointly and severally responsible with Seller for all obligations of Seller,
H'TOWN and Selling Partners under this Agreement.
PRIME RETAIL, L.P.,
By: PRIME RETAIL, INC.
By: ---------------------------------------
PRIME RETAIL, INC.
By: --------------------------------------------
JOINDER BY BRWH, LLC
BRWH, LLC joins in this Amendment for the purpose of agreeing to be bound
by the provisions hereof pertaining to its pledge of its interest in the Joint
Venture and amendment of the Agreement of Joint Venture of the Joint Venture.
BRWH, LLC
By: --------------------------------------------
SCHEDULE OF
EXHIBITS
▇. ▇▇▇▇▇
▇▇. Rent Roll
III. Mercantile Loan Terms
IV. Allocation of Price
V. Ownership Structure
VI. Estoppel Certificate
VII. Legal Description
VIII. Acreage & Square Footage
IX. Contracts over $10,000 Not Terminable on 30 days' or Less Notice
X. Notices of Violations
XI. Third Party Claims
XII. Defaults under Tenant Leases
XIII. H'TOWN Agreement of Limited Partnership
XIV. Mercantile Letter Regarding Loan Assumption
XV. Restrictions and Easements to be Included in Declaration(s) of Easements
and Restrictions
EXHIBIT I
1. Series 1998 SPECIAL OBLIGATION BONDS in the face principal amount of
$3,100,000.00.
2. Series 1998 (B) SPECIAL OBLIGATION BONDS in the face principal amount of
$1,517,000,00.
3. Series 2000 SPECIAL OBLIGATION BONDS in the face principal amount of
$2,454,000.00.
EXHIBIT III
Basic Terms of Mercantile Loan
Approximate Principal Balance as of 11/6/01: $49,062,000.00
Approximate Principal Balance as of Closing $46,862,000.00
Interest Rate: LIBOR plus 150 basis points
Payments: Monthly payments of interest only until the Maturity
Date.
Maturity Date: June 1, 2004
Secured By: First Indemnity Deed of Trust on the Project and
pledge of the ▇▇▇▇▇▇▇▇ Special Taxing District Bonds
Guaranteed By: Prime Retail, L.P.
Assumption Fee: 1% to be paid by Selling Partners
EXHIBIT VI
TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant"), as tenant, has entered into a certain Agreement
of Lease dated _______________________ (the "Lease"), with , __________________
a ______________________ partnership, as landlord ("Landlord"), covering certain
premises more particularly described in the Lease, and located in Space No. ____
(the "Demised Premises") in the Prime Outlets at Hagerstown shopping center,
Hagerstown, Maryland (the "Shopping Center"). Tenant, for good and valuable
consideration, hereby certifies to Landlord, to _______________________, the
prospective purchaser of the Shopping Center ("Purchaser"), and to
_________________________ ("Lender"), which will be making a loan to Purchaser
secured by a mortgage covering the Shopping Center, and to their respective
successors and assigns that:
1. The Lease is in full force and effect. There have been no amendments,
modifications or supplements to the Lease, except as set forth below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________________________________.
2. The term of the Lease commenced on _____________________ and full rental
is now accruing thereunder. The term of the Lease shall expire
on ___________________________ unless sooner terminated or extended in
accordance with the terms of the Lease. Tenant has no option to extend
or renew the Lease, except as set forth below:
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
3. The current minimum annual rent payable under the Lease is
$____________________. Tenant is also obligated to pay as additional
rent the items checked below:
9 Percentage Rent of: ______________________;
9 Common Area Maintenance
9 Real Estate Taxes
9 Marketing Fund
9 Insurance
9 Other - _______________________________.
4. All rentals and other charges due and payable under the Lease by Tenant
have been paid up to __________________________. No rent or other sums
due under the Lease have been prepaid more than thirty (30) days in
advance.
5. Tenant has accepted possession and is in occupancy of the Demised
Premises. All items of an executory nature have been completed under
the terms of the Lease, and all improvements required to be made by or
paid for by Landlord have been completed or paid for by Landlord in
accordance with the Lease and to the satisfaction of Tenant.
6. Tenant has no offsets, deductions or defenses to its obligations under
the Lease and Tenant is not entitled to any free rent or other rent
concessions after the date hereof, except as follows:
_______________________________________________________________________,
(if the preceding space is left blank, there are none).
7. Tenant is not in default in the performance of any of its obligations
under the Lease, and Tenant has not received any notice of a default by
Tenant under the Lease which has not been cured.
8. Tenant has not given the Landlord any notice of a default on the part
of the Landlord under the Lease which has not been cured, and there are
no defaults or conditions which with the giving of notice or the passage
of time or both, will become a default by Landlord or under any of the
terms or provisions of the Lease, except as follows:
_______________________________________________________________________,
(if the preceding space is left blank, there are none).
9. Landlord is holding a security deposit under the Lease in the amount of
$_______________ (if the preceding is left blank, there is no security
deposit).
10. Tenant has no purchase options, rights to purchase, rights of first
refusal to purchase, or first offer rights to purchase with respect to
the Shopping Center or any part thereof or any interest therein, except
as follows:____________________________________________________________.
11. There are currently no actions, whether voluntary or otherwise, pending
against Tenant under the bankruptcy laws of the United States or any
other state thereof.
12. This Certificate is being executed and delivered by Tenant with the
understanding that this Certificate may be relied upon by the parties
identified above and their respective successors and assigns.
13. Tenant acknowledges that Purchaser has assigned or will assign to Lender
all of its rights in the Lease, including the right to collect rents and
any other payments from Tenant, and that Lender will waive its right to
collect such payments until such time as Purchaser is in default under
the mortgage. In consideration of Lender making its loan to the
Purchaser, Tenant shall make all such payments to Lender, its successors
or assigns upon receiving written notice from Lender that Purchaser is
in default under the mortgage loan.
14. Tenant has paid in full all sums due or owing in connection with tenant
improvements made to the Demised Premises by or on behalf of Tenant and
there are no mechanics' or materialmen lien rights with respect thereto.
15. The signatory to this Certificate has full and complete authority to
sign on behalf of Tenant.
16. Faxed signatures hereon shall be binding as originals.
TENANT:
___________________________________(Name)
By:________________________________
Title:
Date:______________________________
__________________________, the Purchaser hereby joins in this Agreement
for the purpose of consenting to the provisions of paragraph 13 hereof.
PURCHASER:
___________________________________
By: ______________________________
By: ______________________________
EXHIBIT VIII
Description of Project
Approximately 485,471 square feet of gross leasable area and approximately 2,720
parking spaces situated on 61.635 acres.
EXHIBIT XV
RESTRICTIONS TO BE INCLUDED IN DECLARATIONS(S) OF RESTRICTIONS AND EASEMENTS
1. Reasonable Signage Limitations
2. Height Limitations on Buildings
3. Architectural and Design Harmony with the Project, Including
Landscaping.
4. No use for discount or off price retail, including, without limitation,
flea markets and factory outlets
5. No use with excessive parking requirements such as theaters, bingo
halls, houses of worship, etc.
6. The outparcels will be provided with appropriate easements for access,
utilities, etc. subject to reasonably appropriate controls to assure
that there is no material adverse impact on the Project and the owners
of the outparcels agree to share maintenance of the easement areas on
an appropriate basis with H'TOWN.
7. Such other provisions as are reasonably acceptable to both parties.
All holders of mortgages or deeds of trust on the properties which are
subject to the Declaration(s) of Restrictions must subordinate their
rights to the Declaration(s). The form of the Declarations(s) of
Easements and Restrictions is to be agreed upon by Buyer and Seller
during the Investigative Period.
EXHIBIT IV
ALLOCATION OF PURCHASE PRICE
An amount equal to the remaining principal balance of the Bonds (the "Bond
Amount"), as prorated in accordance with Article 13, shall be allocated to the
Bonds.
The following components will be allocated the following dollar amounts:
Covenant Not To Compete $1,250,000
Use of Name $1,500,000
The total of the Bond Amount and the two items listed above will be
subtracted from $80,500,000, with the remainder being called "Remaining Price"
in this Exhibit. Each of the following components will be allocated its
designated percentage of the Remaining Price:
Component Percent of Remaining Price
Land 7.35%
Land Improvements 11.00%
Building & Improvements 80.70%
Furniture & Fixtures .95%
-------
Total 100.00%