EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
MPR PUERTO RICO PORTFOLIO
BETWEEN
MPR DEL NORTE LP, S.E.
MPR ▇▇▇▇ BAJA LP, S.E.
MPR ▇▇▇▇▇▇▇ ▇▇, S.E.
MPR DEL OESTE LP, S.E.
AND
MPR GUYAMA LP, S.E.
COLLECTIVELY,AS SELLER
AND
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AS PURCHASER
NOVEMBER 2, 2004
Table of Contents
Page
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1. DEFINITIONS ................................................................. 1
1.1 Defined Terms .................................................... 1
1.2 Construction ..................................................... 8
2. The Property ................................................................ 8
2.1 Description ...................................................... 8
2.2 "As-Is" Purchase ................................................. 9
2.3 Agreement to Convey .............................................. 10
2.4 All or Nothing Basis ............................................. 10
3. Price and Payment ........................................................... 11
3.1 Purchase Price ................................................... 11
3.2 Payment .......................................................... 11
3.3 Assumption of Existing Financing ................................. 12
3.4 Closing .......................................................... 12
3.5 Escrow Provisions ................................................ 12
3.6 Net Earnout Adjustment ........................................... 13
3.7 Reserve Reimbursement Adjustment ................................. 14
4. Inspections and Approvals ................................................... 15
4.1 Inspections; Access .............................................. 15
4.2 Title and Survey ................................................. 17
4.3 Contracts ........................................................ 18
4.4 Permitted Encumbrances ........................................... 18
4.5 Purchaser's Right to Terminate ................................... 19
4.6 Delivery of Title Policy at Closing .............................. 19
5. SELLERS' COVENANTS FOR PERIOD Prior to Closing .............................. 19
5.1 Insurance ........................................................ 19
5.2 Operation ........................................................ 19
5.3 New Contracts .................................................... 19
5.4 Leases ........................................................... 19
5.5 Other Documents .................................................. 20
5.6 Reports .......................................................... 21
5.7 Additional Encumbrances .......................................... 21
5.8 Employment Agreements ............................................ 21
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Table of Contents
(continued)
Page
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5.9 Notices .......................................................... 21
5.10 Leasing Costs ................................................... 21
5.11 Consents ........................................................ 21
5.12 Books and Records ............................................... 22
5.13 Security Deposits ............................................... 22
5.14 Compliance with Documents ....................................... 22
5.15 Lease Terminations Upon Purchaser's Request ..................... 22
6. Representations and Warranties .............................................. 22
6.1 By Seller ........................................................ 22
6.2 By Purchaser ..................................................... 24
6.3 Mutual ........................................................... 25
6.4 Modifications .................................................... 25
7 Costs and Prorations ........................................................ 26
7.1 Sellers' Costs ................................................... 26
7.2 Purchaser's Costs ................................................ 27
7.3 Prorations of Income and Expenses ................................ 27
7.4 Proration of Taxes ............................................... 30
7.5 Prorations in General ............................................ 31
7.6 Corrections ...................................................... 31
7.7 Draft Statements ................................................. 31
7.8 Purpose and Intent ............................................... 31
8. Damage, Destruction or Condemnation ......................................... 31
8.1 Material Event ................................................... 31
8.2 Immaterial Event ................................................. 32
8.3 Dispute .......................................................... 32
9. Notices .................................................................... 32
10. CONDITIONS TO CLOSING ...................................................... 33
10.1 Purchaser's Conditions .......................................... 33
10.2 Sellers' Conditions ............................................. 35
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Table of Contents
(continued)
Page
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11. Closing and Escrow ......................................................... 35
11.1 Escrow Instructions ............................................. 35
11.2 Sellers' Deliveries ............................................. 36
11.3 Purchaser's Deliveries .......................................... 37
11.4 Possession ...................................................... 37
11.5 Insurance ....................................................... 37
11.6 Notice Letters .................................................. 37
12. Default; Failure of Condition ............................................. 38
12.1 Purchaser Default ............................................... 38
12.2 Seller Default .................................................. 38
12.3 New Defects ..................................................... 38
13. Miscellaneous ............................................................. 39
13.1 Entire Agreement ................................................ 39
13.2 Severability .................................................... 39
13.3 Applicable Law .................................................. 39
13.4 Jurisdiction .................................................... 39
13.5 Assignability ................................................... 40
13.6 Successors Bound ................................................ 40
13.7 Breach .......................................................... 40
13.8 Captions ........................................................ 40
13.9 No Partnership .................................................. 41
13.10 Counterparts ................................................... 41
13.11 Recordation .................................................... 41
13.12 Submission of Agreement ........................................ 41
13.13 Tax Protest .................................................... 41
13.14 Indemnification, Survival and Limitation; Sellers' Knowledge ... 41
13.15 No Processing .................................................. 43
13.16 Calculation of Time Periods .................................... 43
13.17 Section 1031 Exchange .......................................... 43
13.18 Arbitration .................................................... 43
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Table of Contents
(continued)
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13.19 Limitation of Liability ................................................ 44
13.20 Delivery of Financial Statements ....................................... 44
13.21 Time of the Essence .................................................... 45
13.22 Reassignment of Interest Rate Cap ...................................... 45
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LIST OF EXHIBITS
Exhibit 1.1.14 Credit-Worthy Tenants
Exhibit 1.1.20 List of Environmental Reports
Exhibit 1.1.31 Legal Descriptions
Exhibit 1.1.33 Schedules of Leases
Exhibit 1.1.39 List of Loan Documents
Exhibit 1.1.52 Personal Property
Exhibit 1.1.72 Rent Rolls
Exhibit 3.6.1 Vacant Spaces
Exhibit 3.6.2 Capitalization Rates
Exhibit 3.7 Lender Reserves
Exhibit 4.3 Schedules of Service Contracts
Exhibit 4.4.6 Permitted Encumbrances
Exhibit 5.4 Base Rent for Vacant Space
Exhibit 6.1.13 Security Deposits
Exhibit 6.1.14 Lease Defaults
Exhibit 6.1.15 Tenant Termination Notices
Exhibit 6.1.21 Insurance Policies
Exhibits 7.4.2 Tenants That Pay Taxes Directly to ▇▇▇▇
Exhibit 10.1.2 Form of Tenant Estoppel Certificate
Exhibit 10.2.3 Form of Management Agreement
Exhibit 11.2.2 Form of ▇▇▇▇ of Sale
Exhibit 11.2.3 Form of Assignment and Assumption of Leases
Exhibit 11.2.4 Form of Assignment and Assumption of Contracts, Permits
and Warranties
Exhibit 11.2.6 Form of Tenant Notice Letter
Exhibit 13.14.9 Form of Holdback Escrow Agreement
Exhibit 13.20 Letter of Representation
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TERM SHEET
PURCHASER: Developers Diversified Realty Corporation
SELLERS: MPR DEL Norte LP, S.E.
MPR ▇▇▇▇ Baja LP, S.E.
MPR ▇▇▇▇▇▇▇ ▇▇, S.E.
MPR Del Oeste LP, S.E.
MPR Guyama LP, S.E.
PROPERTIES: Plaza del Norte Shopping Center
Plaza ▇▇▇▇▇▇▇
Plaza Del Oeste
Plaza ▇▇▇▇ Baja
Plaza Wal*Mart
$318,355,884.00
EFFECTIVE DATE: November 2,2004
APPROVAL DATE: December 20,2004
CLOSING DATE: January 10,2005, subject to Section 13.21.
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MPR Portfolio
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "Agreement"), dated as of the 2nd
day of November, 2004 (the "Effective Date"), is made by and between MPR DEL
NORTE LP, S.E. ("MPR Del Norte"), MPR ▇▇▇▇ BAJA LP, S.E. ("MPR Veqa Baia"), MPR
▇▇▇▇▇▇▇ ▇▇, S.E. ("MPR Faiardo"), MPR DEL OESTE LP, S.E. ("MPR Del Oeste") and
MPR GUYAMA LP, S.E. ("MPR Guyama"), each a Delaware limited partnership (each A
"Seller" and collectively, the "Sellers"), and DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation ("Purchaser").
R E C I T A L S:
MPR Del Norte owns certain improved real property commonly known as Plaza
del Norte located in Hatillo, Puerto Rico ("Plaza del Norte"); MPR ▇▇▇▇ Baja
Real owns certain improved real property commonly known as Plaza ▇▇▇▇ Baja
located in ▇▇▇▇ Baja, Puerto Rico ("Plaza Veqa Baia"); MPR Fajardo owns certain
improved real property commonly known as Plaza ▇▇▇▇▇▇▇ located in Fajardo,
Puerto Rico ("Plaza Faiardo"); MPR Del Oeste owns certain improved real property
commonly known as Plaza del Oeste located in San German, Puerto Rico ("Plaza del
Oeste"); and MPR Guyama owns certain improved real property commonly known as
Plaza Wal*Mart located in Guyama, Puerto Rico ("Plaza Wal*Mart").
Subject to the terms and conditions contained herein, Sellers desire to
sell, and Purchaser desires to purchase, the Property (as defined below).
NOW, THEREFORE, in consideration of the foregoing, of the covenants,
promises and undertakings set forth herein, and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Sellers and Purchaser agree as follows:
1. DEFINITIONS.
1.1 Defined Terms. Defined terms used in this Agreement shall,
unless the context otherwise requires, have the following meanings:
1.1.1 "Aggregate Income Decrease" means the excess, if any of (a)
the aggregate base rents set forth in the Rent Rolls with respect to the Leases
which are still in effect at Closing over (b) the aggregate base rent under such
Leases as of the Closing Date. For the purposes of determining Aggregate Income
Decease, income from Leases executed, terminated or expired after the date of
the Rent Rolls shall not be taken into account.
1.1.2 "Approval Date" means December 20, 2004.
1.1.3 "Assumed Indebtedness" shall mean the indebtedness consisting
of the outstanding principal balance of the Existing Financing as of the Closing
Date.
1.1.4 "Broker" has the meaning set forth in Section 6.3.
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1.1.5 "business day" means any day other than a Saturday, Sunday or
other day on which commercial banks are authorized to be closed in the State of
New York.
1.1.6 "Cap Rate" has the meaning set forth in Section 3.6.
1.1.7 "Claims" has the meaning set forth in Section 2.2.3.
1.1.8 "Closing has the meaning set forth in Section 3.4.
1.1.9 "Closing Date" means January 10, 2005, subject to Section
13.21.
1.1.10 "Consensual Liens" means any mortgage, deed of trust,
judgment lien or other lien, charge, claim, security interest or pledge
encumbering any of the Property in a specified or readily ascertainable dollar
amount (with the exception of any deeds of mortgage and other Loan Documents
which relate to Existing Financing or any leasehold mortgages granted by any
tenant of the Property or any lien which any tenant of the Property is obligated
to cure under its Lease).
1.1.11 "Construction Obligations" means any and all obligations to
perform on-site or off-site construction required by any Leases, Loan Documents
or Service Contracts.
1.1.12 "CPR Agreement" means that certain Purchase and Sale
Agreement of even date among CPR Del SOL LP, S.E., CPR Escorial LP, S.E., CPR
Cayey LP, S.E., CPR Palma Real LP, S.E., CPR lsabela LP, S.E., CPR San German
LP, S.E. and Purchaser with respect to the CPR Property.
1.1.13 "CPR Property" means, collectively, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ Escorial Shopping Center, Plaza Cayey Shopping Center, Plaza Palma
Real Shopping Center, Plaza Isabela Shopping Center and San German Project, as
more particularly described in the CPR Agreement.
1.1.14 "Credit-Worthy" means a tenant which (a) is currently, or has
been, a tenant at the Property, the CRV Property or the CPR Property (other than
any tenant which has materially breached its lease, is insolvent or is subject
to a bankruptcy or creditor's rights proceeding, or had a history of significant
arrears), (ii) is listed on Exhibit 1.1.14 hereto, or (iii) otherwise satisfies
customary financial criteria required by landlords of similar retail shopping
centers.
1.1.15 "CRV Agreement" means that certain Purchase and Sale
Agreement of even date among CRV Rio Hondo LP, LLLP, CRV Del Atlantico LP, LLLP,
CRV Rexville LP, LLLP, CRV Senorial LP, LLLP and CRV ▇▇▇▇▇▇▇▇ Land Acquisition
LP, LLLP and Purchaser with respect to the CRV Property.
1.1.16 "CRV Property" means, collectively, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
del Atlantico, Rexville Plaza, El Senorial Mall and the ▇▇▇▇▇▇▇▇ Land, as more
particularly described in the CRV Agreement.
1.1.17 "Deposit" has the meaning set forth in Section 3.2.1.
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1.1.18 "Disbursement Notice" has the meaning set forth in Section
3.5.3.
1.1.19 "Environmental Laws" means the following: any federal, state
or local law (including, without limitation, the Commonwealth of Puerto Rico),
statute, ordinance, rule, regulation, guideline, code, license, permit,
authorization, approval, consent, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any governmental entity, relating to
(x) the protection, preservation or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human environmental health or environmental safety, or
(y) the exposure to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or disposal
of Hazardous Materials, including, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act of
1972,the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the federal Solid Waste Disposal Act and the
federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Atomic Energy Act, the Nuclear Waste Policy Act of 1982,the
federal Occupational Safety and Health Act of 1970,the Puerto Rico Public Policy
Environmental Act and regulations promulgated thereunder, each as amended and as
now in effect.
1.1.20 "Environmental Reports" means the environmental reports
prepared for the Sellers in connection with their acquisition of the Property,
as described in Exhibit 1.1.20.
1.1.21 "Escrow Agent" means the Title Company or any other Person
reasonably acceptable to Sellers and Purchaser, to be determined prior to the
Approval Date.
1.1.22 "Existing Financing" means the Existing Mortgage Loan and the
Existing Mezzanine Loan
1.1.23 "Existing Mezzanine Loan" means the loan made by Lender to
MPR Mezzanine Holdings S.E. in the original principal amount of $25,000,000.00.
1.1.24 "Existing Mortgage Loan" means the loan made by Lender to
Sellers in the original principal amount of $175,000,000.00.
1.1.25 "Force Majeure" means the inability of Sellers to perform (or
delay in performance of) any construction required hereunder by reason of
strikes, inability to procure materials, failure of power, riots, insurrection,
war, earthquake, hurricane or tornado (or comparable weather conditions of
unusual severity) or other reasons of a like nature which are beyond the
reasonable control of Sellers.
1.1.26 "Governmental Entity" has the meaning set forth in Section
6.1.7.
1.1.27 "Hazardous Materials" means any substance presently defined,
designated or classified as environmentally hazardous, toxic, radioactive or
dangerous, or otherwise presently regulated as such under any Environmental Law,
whether by type or by quantity, including any substance containing any such
substance as a component. Hazardous Materials includes, without limitation, any
toxic waste, pollutant, contaminant, environmentally hazardous substance, toxic
substance, hazardous waste, special waste, industrial
PURCHASE AND SALE AGREEMENT
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environmentally hazardous or toxic substance or petroleum or any derivative or
by-product thereof, radon, radioactive material, asbestos, asbestos containing
material, urea formaldehyde foam insulation, lead and polychlorinated biphenyl,
and any and all of the following, including mixtures thereof: any
environmentally hazardous substance, pollutant, contaminant, waste, by-product
or constituent presently regulated under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.; oil
and petroleum products and natural gas, natural gas liquids, liquefied natural
gas and synthetic gas usable for fuel; pesticides presently regulated under the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et
seq.; asbestos and asbestos-containing materials, PCBs and other substances
presently regulated under the federal Solid Waste Disposal Act and the federal
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; source material,
special nuclear material, by-product material and any other radioactive
materials or radioactive wastes, however produced, presently regulated under the
Atomic Energy Act or the Nuclear Waste Policy Act of 1982; chemicals subject to
the OSHA Hazard Communication Standard, 29 C.F.R. Section 1910.1200 et seq.; and
industrial process and pollution control wastes, whether or not hazardous within
the meaning of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq.
1.1.28 "Holdback Escrow Agreement" has the meaning set forth in
Section 13.14.9.
1.1.29 "Improvements" means the buildings, parking areas,
improvements, and fixtures now situated on the Land.
1.1.30 "Inspection Period" means the period commencing on the
Effective Date and ending at 5:00 p.m. (New York time) on the Approval Date.
1.1.31 "Land" means certain land described as follows (each A
"Parcel" and collectively, the "Parcels"): (a) land located in Hatillo, Puerto
Rico and more specifically described as Parcel 1 in Exhibit 1.1.31 attached
hereto (the "Plaza del Norte Parcel"), (b) land located in Fajardo, Puerto Rico
and more specifically described as Parcel 2 in Exhibit 1. 1.31 attached hereto
(the "Plaza ▇▇▇▇▇▇▇ Parcel"), (c) land located in San German, Puerto Rico and
more specifically described as Parcel 3 in Exhibit 1. 1.31 attached hereto (the
"Plaza del Oeste Parcel"), (d) land located in ▇▇▇▇ Baja, Puerto Rico and more
specifically described as Parcel 4 in Exhibit 1.1.31 attached hereto (the "Plaza
▇▇▇▇ Baja Parcel"), and (e) land located in Guyama, Puerto Rico and more
specifically described as Parcel 5 in Exhibit 1.1.31 attached hereto (the "Plaza
Wal*Mart Parcel").
1.1.32 "Lease Earnout Amount" has the meaning set forth in Section
3.6.
1.1.33 "Leases" means the leases, lease amendments, improvement
agreements, subleases, assignments, licenses, concessions and other occupancy
agreements, including those in effect on the date of this Agreement which are
identified on Exhibit 1.1.33, and any new leases entered into pursuant to
Section 5.4, which as of the Closing (as hereinafter defined) affect all or any
portion of the Land or Improvements and any lease guaranties in favor of any
Seller with respect to any such Leases.
1.1.34 "Leasing Costs" has the meaning set forth in Section 7.3.1.
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1.1.35 "Lender" means (a) with respect to the Existing Mortgage
Loan, LaSalle Bank N.A., as trustee, in trust for the Holders of COMM 2003-FL9
Commercial Mortgage Pass-Through Certificates and (b) with respect to the
Existing Mezzanine Loan, BREF One, LLC, Series A.
1.1.36 "Lender Reserves" has the meaning set forth in Section 3.7.
1.1.37 "Lender's Consent" has the meaning set forth in Section
10.1.5.
1.1.38 "Liens" means all liens (including, without limitation,
mortgage liens (with the exception of any deeds of mortgage and other Loan
Documents which relate to Existing Financing), deeds of trust, judgement liens,
mechanics' liens, and liens for Taxes which are due and payable), charges,
claims, security interests or pledges affecting the Property.
1.1.39 "Loan Documents" means the documents and instruments
evidencing and securing the Existing Financing, as more particularly described
on Exhibit 1.1.39.
1.1.40 "Losses" has the meaning set forth in Section 13.14.1.
1.1.41 "Management Agreements" has the meaning set forth in Section
10.2.5.
1.1.42 "Manager" has the meaning set forth in Section 10.2.4.
1.1.43 "Maximum Indemnification Amount" has the meaning set forth
in Section 13.14.6.
1.1.44 "Net Earnout Adjustment" has the meaning set forth in Section
3.6.
1.1.45 "Objection Notice" has the meaning set forth in Section
3.5.3.
1.1.46 "Parcel(s)" has the meaning set forth in Section 2.1.1.
1.1.47 "Percentage Rent" means rent in the form of a percentage of a
tenant's gross sales in excess of a predetermined threshold or breakpoint.
1.1.48 "Permits" means, to the extent transferable, all building
permits, use permits, certificates of occupancy and other certificates, permits,
licenses and approvals used in the operation of the Land and/or Improvements.
1.1.49 "Permitted Encumbrances" has the meaning set forth in Section
4.4.
1.1.50 "Permitted Assignee" has the meaning set forth in Section
13.5.
1.1.51 Person" shall mean any natural person, corporation, limited
partnership, limited liability company, limited liability partnership, general
partnership, joint stock company, joint venture, real estate investment trust,
association, company, trust, bank, trust company, land trust, vehicle trust,
business trust or other organization irrespective of whether it is a legal
entity, or any government or agency or political subdivision thereof.
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1.1.52 "Personal Property" means all right, title and interest of
each Seller in and to any personal property used in connection with the
operation, repair and maintenance of the Property, including but not limited to
all furniture, holiday decorations, machinery, apparatus, and equipment
generally described on Exhibit 1.1.52 attached hereto, subject to depletions,
replacements and additions in the ordinary course of each Seller's business.
1.1.53 "Plans" means, to the extent transferable, all plans and
specifications for the Improvements to the extent such plans and specifications
are currently owned by the Sellers and in the possession and control of Sellers,
the Manager or their affiliates.
1.1.54 "Plaza Fajardo" has the meaning set forth in the Recitals to
this Agreement.
1.1.55 "Plaza ▇▇▇▇▇▇▇ Parcel" has the meaning set forth in Section
1.1.31.
1.1.56 "Plaza del Norte" has the meaning set forth in the Recitals
to this Agreement.
1.1.57 "Plaza del Norte Parcel" has the meaning set forth in Section
1.1.31.
1.1.58 "Plaza del Oeste" has the meaning set forth in the Recitals
to this Agreement.
1.1.59 "Plaza del Oeste Parcel" has the meaning set forth in Section
1.1.31.
1.1.60 "Plaza ▇▇▇▇ Baja" has the meaning set forth in the Recitals
to this Agreement.
1.1.61 "Plaza ▇▇▇▇ Baja Parcel" has the meaning set forth in Section
1.1.31
1.1.62 "Plaza Wal*Mart" has the meaning set forth in the Recitals to
this Agreement.
1.1.63 "Plaza Wal*Mart Parcel" has the meaning set forth in Section
1.1.31.
1.1.64 "Portfolio Percentage" means an amount equal to (a) the
square footage in excess of 99% of the aggregate leasable square footage of the
Property, divided by (b) the square footage in excess of 99% of the aggregate
leasable square footage of the Property, the CPR Property and the CRV Property.
1.1.65 "Project(s)" means each Parcel and the portion of the
Property relating to such Parcel.
1.1.66 "Property" has the meaning set forth in Section 2.1.
1.1.67 "Purchase Price" has the meaning set forth in Section 3.1
1.1.68 "Purchaser" has the meaning set forth in the first paragraph
of this Agreement.
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1.1.69 "Purchaser Indemnitees" has the meaning set forth in Section
13.14.1
1.1.70 "Purchaser's Agents" has the meaning set forth in Section
4.1.2.
1.1.71 "Rent Commencement Adjustment" has the meaning set forth in
Section 3.8.
1.1.72 "Rent Rolls" means the Rent Rolls annexed hereto as Exhibit
1.1.72.
1.1.73 "Required Tenant(s)" means any tenant under any Lease which
demises 10,000 square feet or more in any Project.
1.1.74 "Reserve Reimbursement Adjustment" has the meaning set forth
in Section 3.7.
1.1.75 ""Security Deposits" means any security deposits deposited by
Tenants under Leases (whether cash or non-cash), together with any interest
which has accrued thereon as required by the terms of such Lease, but only to
the extent such interest has accrued for the account of the respective Tenant or
as required by law, to the extent not applied to such Tenants' obligations under
the Leases.
1.1.76 "Seller(s)" has the meaning set forth in the first paragraph
of this Agreement.
1.1.77 "Service Contracts" means, subject to Section 4.3, all
contracts and agreements relating to the operation or maintenance of the Land,
Improvements or Personal Property, the terms of which extend beyond midnight of
the day preceding the Closing Date.
1.1.78 "Servicer" means a servicer of Lender, designated by and
acting on behalf of Lender with respect to the Existing Financing. The current
Servicer with respect to the Existing Mortgage Loan is Midland Loan Services and
the current Servicer with respect to the Existing Mortgage Loan is Brascan Real
Estate Finance Partners.
1.1.79 "Survey(s)" has the meaning set forth in Section 4.1.1.
1.1.80 "Survival Period" has the meaning set forth in Section
13.14.1.
1.1.81 "TAX" or "Taxes" means all taxes, fees, levies, or other
assessments, imposed by the United States or any state, commonwealth (including
Puerto Rico), territory, country, local, or foreign government or subdivision or
agency thereof including, without limitation, income, gross receipts, excise,
real and personal property, premiums, municipal, capital, value-added, goods and
services, consumption, sales, transfer, license, payroll, and franchise taxes,
and such term shall include any interest, penalties, or additions to tax
attributable to such taxes, fees, levies, or other assessments.
1.1.82 "Tenant" means each tenant, subtenant, lessee, sublessee,
licensee or other occupant of one or more of the Projects pursuant to a Lease.
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1.1.83 "Terminated Lease Credit Amount" has the meaning set forth in
Section 3.6.
1.1.84 "Termination Notice" has the meaning set forth in Section
4.5.
1.1.85 "Title Commitments" has the meaning set forth in Section 4.2.
1.1.86 "Title Company" means Commonwealth Land Title Insurance
Company.
1.1.87 "Title Policy" has the meaning set forth in Section 4.6.
1.1.88 "Vacant Space" has the meaning set forth in Section 3.6.
1.1.89 "Vacant Space Leases" has the meaning set forth in Section
3.6.
1.1.90 "Warranties" means, to the extent transferable, any unexpired
guarantees, warranties, performance bonds or other bonds and security issued by
third-parties in favor of any Seller relating to the Improvements, the Personal
Property or any Construction Obligations.
1.1.91 "Weighted Average Rent" mean an amount equal to (a) the
aggregate annual base or minimum rent payable during the first lease year
(without taking into account any free-rent period) under all Vacant Space
Leases, divided by (b) the aggregated leasable square feet demised under all
Vacant Space Leases.
1.2 Construction.
1.2.1 As used in this Agreement, the singular shall include the
plural and the masculine gender shall include the feminine and neuter and vice
versa, as the context requires.
1.2.2 Words such as "herein," "hereinafter," "hereof," "hereto" and
"hereunder," when used with reference to this Agreement, refer to this Agreement
as a whole, unless the context otherwise requires.
1.2.3 The Recitals, Schedules and Exhibits annexed hereto, and the
capitalized terms defined therein, are hereby incorporated by reference into the
body of this Agreement as if the same were fully set forth herein.
1.2.4 Whenever used herein, the term "including" shall be construed
to mean "including without limitation."
2. THE PROPERTY.
2.1 Description. Subject to the terms and conditions of this Agreement,
and for the consideration herein set forth, Sellers agree to sell and transfer,
and Purchaser agrees to purchase and acquire (or cause Permitted Assignees to
purchase and acquire), all right, title, and interest in and to the following
(collectively, the "Property"):
2.1.1 The Land;
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 8
2.1.2 The Improvements;
2.1.3 The Personal Property;
2.1.4 To the extent transferable, all streets, alleys, passages,
easements (including, without limitation, reciprocal easement agreements, if
any), rights of way, ways, water, water courses, privileges, licenses,
hereditaments, and any appurtenances and other rights and benefits belonging to
or inuring to the benefit of each Seller and pertaining to the Parcel owned by
such Seller, if any;
2.1.5 The Leases and Security Deposits;
2.1.6 The Service Contracts;
2.1.7 The Warranties;
2.1.8 The Permits;
2.1.9 The Plans;
2.1.10 The Lender Reserves; and
2.1.11 to the extent transferable, all right, title and interest in
and to all utilities, utility lines, utility connections, utility commitments,
and utility capacity, and all reservations therefor and rights therein, relating
to any component of the Projects; and the present and future use of water, water
capacity, water rights, wastewater, wastewater capacity, drainage, and other
utility rights and facilities in connection with or benefiting any component of
the Projects
2.1.12 The names (a) ""Plaza del Norte" with respect to the Plaza
del Norte Project, (b) "Plaza ▇▇▇▇▇▇▇" with respect to the Plaza ▇▇▇▇▇▇▇
Project, (c) "Plaza del Oeste" with respect to the Plaza del Oeste Project, (d)
"Plaza ▇▇▇▇ Baja" with respect to the Plaza ▇▇▇▇ Baja Project, and (e) "Plaza
Wal*Mart" with respect to the Plaza Wal*Mart Project.
2.2 "As-Is" Purchase.
2.2.1 Except as expressly set forth in this Agreement, the Property
is being sold in an "AS IS, WHERE IS" condition and "WITH ALL FAULTS" as of the
date of this Agreement and OF Closing. Except as expressly set forth in this
Agreement, no representations or warranties have been made or are made and no
responsibility has been or is assumed by Sellers or by any partner, officer,
person, firm, agent, attorney or representative acting or purporting to act on
behalf of Sellers as to (i) the condition or state of repair of the Property;
(ii) the compliance or non-compliance of the Property with any applicable laws,
regulations or ordinances (including, without limitation, any applicable zoning,
building or development codes); (iii) the value, expense of operation, or income
potential of the Property; (iv) any other fact or condition which has affected
or might affect the Property or the condition, state of repair, compliance,
value, expense of operation or income potential of the Property or any portion
thereof; or (v) whether the Property contains Hazardous Material or pertaining
to the extent, location or nature of same. Purchaser's sole remedy for any
violation of Environmental Laws which becomes known to Purchaser for the first
time after the end of the Inspection Period and
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 9
prior to Closing is to either (a) terminate this Agreement in its entirety
(except for continuing obligations that survive the Closing or termination of
this Agreement pursuant to the terms of this Agreement (herein called the
"Surviving Obligations")) and to receive a refund of the Deposit, or (b) close
without reduction in the Purchase Price. Except as provided in Section 13.14,
Purchaser expressly waives any claims against Sellers under any Environmental
Law, whether based on statute or common law.
2.2.2 The parties agree that all understandings and agreements
heretofore made between them or their respective agents or representatives are
merged in this Agreement and the Exhibits hereto annexed, which alone fully and
completely express their agreement, and that this Agreement has been entered
into after full investigation, or with the parties satisfied with the
opportunity afforded for full investigation, neither party relying upon any
statement or representation by the other unless such statement or representation
is specifically embodied in this Agreement or the Exhibits annexed hereto.
2.2.3 Except for the obligations of Sellers under Section 13.14 of
this Agreement (which expressly survive Closing) and under Section 12.2,
Purchaser waives its right to recover from, and forever releases and discharges
Sellers, Sellers' affiliates, members, directors, officers, attorneys, and
employees and agents of each of them, and their respective heirs, successors,
personal representatives and assigns (collectively, the "Releasees") from any
and all demands, claims (including, without limitation, causes of action in
tort), legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen (collectively, "Claims"), that may
arise on account of or in any way be connected with the Property, the physical
condition thereof, or any law or regulation applicable thereto (including,
without limitation, claims under the Environmental Laws). Without limiting the
foregoing, Purchaser, upon closing, shall be deemed to have waived, relinquished
and released Sellers and all other Releasees from any and all Claims, matters
arising out of latent or patent defects or physical conditions, violations of
applicable laws (including, without limitation, any Environmental Laws) and any
and all other acts, omissions, events, circumstances or matters affecting the
Property except for the obligations of Sellers under Section 13.14 of this
Agreement and Purchaser acknowledges that Purchaser's sole remedy shall be or a
claim for indemnification under Section 13.14. Purchaser specifically waives,
relinquishes and releases any right of rescission it may have against Sellers
after the Closing by virtue of any breach by Sellers of any representation,
warranty or covenant hereunder or under any closing document.
2.3 Agreement to Convey. Sellers agree to convey, and Purchaser
agrees to accept, title to the Land and Improvements by Deed of Purchase and
Sale in the condition described in Section 4.4 and title to the Personal
Property, by ▇▇▇▇ of Sale, without warranty as to the condition of such
personalty. Sellers agree to convey, and Purchaser agrees to accept and assume,
all of Sellers' right, title, interest and obligations in and under the Leases,
Service Contracts, Permits and Warranties by the appropriate assignment and
assumption agreements; provided that the obligations assumed thereunder shall be
limited to obligations which arise and accrue from and after the Closing Date.
2.4 All or Nothing Basis.
2.4.1 Anything to the contrary in this Agreement notwithstanding, in
the event that Purchaser wishes to terminate this Agreement, such termination
shall apply to all of the
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 10
Property, and Purchaser shall not have the right, under any circumstance, to
purchase less than all of the Property, this transaction being made on an "all
or nothing" basis. In addition, any termination of this Agreement (other than a
termination resulting from Sellers' willful default) shall also automatically
result in a termination of the CRV Agreement and the CPR Agreement, and any
termination of the CRV Agreement (other than a termination (a) resulting from
willful default of the sellers under the CRV Agreement or (b) pursuant to
Sections 4.2, 6.4, 8.1, 10.1.2 or 12.3 of the CRV Agreement) or the CPR
Agreement (other than a termination resulting from willful default of the
sellers under the CPR Agreement) shall also automatically result in a
termination of this Agreement, it being the intent hereof that Purchaser shall
not have the right, under any circumstance other than as specifically set forth
in this Section 2.4 to purchase any of the Property, the CRV Property and/or the
CPR Property if it does not purchase all of the Property and all of the CRV
Property and CPR Property.
2.4.2 Any extension of the Closing Date pursuant to Sections 4.2.2,
6.4, 8.1, 10.1.5, 12.3 and 13.7 of the CRV Agreement or Sections 4.2.2, 6.4,
8.1, 10.1.5, 12.3 and 14.7 of the CPR Agreement shall automatically extend the
Closing Date under this Agreement.
3. PRICE AND PAYMENT.
3.1 Purchase Price. The purchase price for the Property (the "Purchase
Price") is THREE HUNDRED EIGHTEEN MILLION THREE HUNDRED FIFTY-FIVE THOUSAND
EIGHT HUNDRED EIGHTY-FOUR AND NO/100 DOLLARS ($318,355,884.00) U.S., allocated
as follows:
Project Allocation
------- ----------
Plaza del Norte $ 201,689,610.00
Plaza ▇▇▇▇▇▇▇ $ 43,386,292.00
Plaza del Oeste $ 26,970,760.00
Plaza ▇▇▇▇ Baja $ 25,344,953.00
Plaza Wal*Mart $ 20,964,269.00
3.2 Payment. Payment of the Purchase Price is to be made in cash as
follows:
3.2.1 On or before November 4, 2004, Purchaser shall make an ▇▇▇▇▇▇▇
money deposit with the Title Company of EIGHT MILLION THREE HUNDRED FORTY-ONE
THOUSAND ONE HUNDRED SEVENTY-EIGHT AND NO/100 DOLLARS ($8,341,178.00) (the
"Deposit").
3.2.2 The Deposit will be placed with and held in escrow in
accordance with Section 3.5 by the Title Company and invested as directed by
joint written instruction of Sellers and Purchaser. Any interest earned by the
Deposit shall be considered as part of the Deposit.
3.2.3 At Closing, Purchaser (or a Permitted Assignee) shall pay the
Purchase Price by (a) assuming the Assumed Indebtedness and (b) paying the
balance (after crediting the outstanding principal balance of the Assumed
Indebtedness) in cash, subject to adjustment for the prorations as provided
herein and subject further to the Net Earnout Adjustment and the
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 11
Reserve Reimbursement Adjustment under Sections 3.6 and 3.7, to the Title
Company for disbursement to Sellers via wire transfer in immediately available
funds. Notwithstanding the foregoing, at Closing a portion of the Purchase Price
equal to the Maximum Indemnification Amount shall be deposited into escrow with
the Title Company, to be held and disbursed in accordance with the Holdback
Escrow Agreement. The Deposit will be applied to payment of the Purchase Price
in accordance with Section 3.5.
3.2.4 The parties hereto acknowledge and agree that the value of any
Personal Property transferred hereunder is de minimis and no part of the
Purchase Price is allocable thereto.
3.3 Assumption of Existing Financing. The Projects are encumbered by
mortgages securing the Existing Mortgage Loan and the interest in Sellers are
encumbered by the Existing Mezzanine Loan. At Closing, Purchaser shall assume
all of the Assumed Indebtedness and all of Sellers' obligations under the Loan
Documents which arise from and after the Closing Date. Purchaser shall use
commercially reasonable efforts to obtain Lender's Consent and all other
documentation reasonably required by Lender as may be necessary to permit such
assignment and assumption. In the event that Lender or Servicer requires payment
of a deposit or fee in connection with the submission of the request for
Lender's Consent and/or the due diligence to obtain Lender's Consent, Sellers
agree to fund any such deposit or fee. At Closing, the closing costs described
in Section 7.1.4 and Section 7.2.4 shall be adjusted to account for Sellers'
payment of such deposit or fee. In the event that Sellers have paid such deposit
or fee and this Agreement is terminated for any reason other than a default by
Sellers under this Agreement, then Purchaser shall reimburse to Sellers 50% of
the unrefunded amount of such deposit or fee, if any.
3.4 Closing. Payment of the Purchase Price, as adjusted pursuant to the
terms of this Agreement, and the closing hereunder (the "Closing") will take
place on or before the Closing Date at the offices of Sellers' counsel in San
▇▇▇▇, Puerto Rico, or such other location as may be selected by Lender or
Servicer.
3.5 Escrow Provisions. The Deposit shall be held and disbursed by the
Title Company strictly in accordance with the following terms and provisions.
3.5.1 If the Closing occurs, then at Closing, the Deposit shall be
released to Sellers and shall be credited against the Purchase Price.
3.5.2 In the event Purchaser terminates this Agreement pursuant to
Section 4.5, the Title Company shall return the Deposit to Purchaser.
3.5.3 In all other cases, any and all payments made by the Title
Company from the Deposit shall be made in accordance with this Section 3.5.3. If
either Purchaser or Sellers deliver written notice to the Title Company
requesting release of the Deposit ("Disbursement Notice"), the Title Company
shall deliver a copy of such Disbursement Notice to the party who did not
deliver the Disbursement Notice. Unless within five (5) business days after
delivery of such Disbursement Notice by the Title Company, the Title Company
receives from such party a notice objecting to the release of the Deposit from
escrow (an "Objection Notice"), the Title Company shall disburse the Deposit as
set forth in the Disbursement Notice. If an Objection Notice is delivered within
such five (5)business-day period, the Title Company shall continue to hold the
Deposit until otherwise directed by either (i) joint written instructions from
Purchaser
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 12
and Sellers, or (ii) a firm and final court order binding on the Title Company
which has not been stayed, vacated or appealed before disbursement of the
Deposit; provided, however, that notwithstanding the foregoing, the Title
Company shall have the right in the event of such a dispute to deposit the
Deposit with any federal or state court then having jurisdiction over an
interpleader action with respect to the Deposit. The Title Company shall give
written notice of any such deposit to Purchaser and Sellers. Upon such deposit
or other disbursement in accordance with the provisions of this Section, the
Title Company shall be relieved and discharged of all further obligations with
respect to the amounts so deposited or disbursed and all further obligations and
liability to the parties hereto with respect to its obligations under this
Agreement.
3.5.4 The parties acknowledge that the Title Company is acting as a
stakeholder at their request and for their convenience, that the Title Company
shall not be deemed to be the agent of either of the parties, and that the Title
Company shall not be liable to either of the parties for any act or omission on
its part unless taken or suffered in bad faith or in willful or negligent
disregard of this Agreement. Sellers and Purchaser shall jointly and severally
indemnify, defend and hold harmless the Title Company of, from and against any
and all loss, cost, expense (including reasonable attorney's fees), liability,
damages, actions, causes of action, demands or claims incurred in connection
with the faithful performance of the Title Company's duties hereunder.
3.5.5 The Title Company acknowledges its agreement to the provisions
of this Section 3.5 applicable to it by signing on the signature page of this
Agreement.
3.6 Net Earnout Adjustment.
3.6.1 At Closing, the Purchase Price shall be adjusted by an amount
(the "NET Earnout Adjustment") equal to the difference, if any, between (a) the
Lease Earnout Amount and (b) the Terminated Lease Credit Amount. For the
purposes of this Section 3.6, (i) "Lease Earnout Amount" shall mean an amount
equal to (x) the annual base or minimum rent payable during the first lease year
(without taking into account any free-rent period) under any executed leases
("Vacant Space Leases") in effect at Closing for space which is listed as vacant
on Exhibit 3.6.1 hereto or which was subject to a lease shown on the Rent Rolls
but such lease terminated or expired prior to Closing ("Vacant Space"), divided
by (y) the capitalization rate for the Project in which such space is located,
as set forth on Exhibit 3.6.2 hereto (the "Cap Rate"); and (ii) "Terminated
Lease Credit Amount" shall mean an amount equal to (x) the annual base or
minimum rent payable on the Effective Date under any leases which were listed on
the Rent Rolls and (A) which expired or terminated prior to the Closing Date
(excluding any Leases which have been terminated at Purchaser's request pursuant
to Section 5.15), (B) the Tenant under such lease vacated its demised premises
prior to the Closing Date (other than Payless Shoes at the Plaza del Norte
Project), or (C) the Tenant under such lease is subject to a bankruptcy or
insolvency proceeding on the Closing Date, divided by (y) the applicable Cap
Rate.
3.6.2 In the event that the Lease Earnout Amount exceeds the
Terminated Lease Credit Amount, the Purchase Price shall be increased by the Net
Earnout Adjustment. In the event that the Terminated Lease Credit Amount exceeds
the Lease Earnout Amount, the Purchase Price shall be reduced by the Net Earnout
Adjustment. Notwithstanding the foregoing, in the event that the aggregate of
the Terminated Lease Credit Amount under this Agreement and the Terminated Lease
Credit Amounts under the CPR Agreement and the CRV Agreement exceeds the
aggregate of the Lease Earnout Amount under this Agreement and the
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 13
Lease Earnout Amounts under the CPR Agreement and the CRV Agreement, the Net
Earnout Adjustment shall be zero and the Purchase Price shall not be adjusted
under this Section 3.6.
3.6.3 Notwithstanding the foregoing, if at Closing the leasable
square footage demised under all Leases then in effect at the Property, the CPR
Property and the CRV Property exceeds 99% of the aggregate leasable square
footage of the Property, the CPR Property and the CRV Property, then for the
purposes of determining the Net Earnout Adjustment, the Vacant Space Leases (or
portions thereof) demising in excess of such 99% shall be excluded from the
above calculation. In the event that more than one Vacant Space Lease hereunder
and/or under the CPR Agreement and/or the CRV Agreement has been executed, the
rent to be excluded from the calculation of Lease Earnout Amount shall be an
amount equal to the Portfolio Percentage multiplied by the product of (a) the
square footage in excess of 99% of the aggregate leasable square footage of the
Property, the CPR Property and the CRV Property, multiplied by (b) the Weighted
Average Rent payable under all Vacant Space Leases at the Property, the CPR
Property and the CRV Property.
3.6.4 In the event that Purchaser receives a Terminated Lease Credit
Amount with respect to a Tenant who is subject to a bankruptcy or insolvency
proceeding on the Closing Date and thereafter such Tenant assumes the lease for
which Purchaser received the Terminated Lease Credit Amount, Purchaser shall pay
such Terminated Lease Credit Amount to Sellers within ten (10) business days
after the date on which Purchaser receives notice that such Tenant assumes such
lease and such Tenant pays all amounts outstanding under such lease; provided,
however, in the event that the Net Earnout Adjustment would have been zero
pursuant to the second sentence of Section 3.6.2 even if Purchaser had not
received a Terminated Lease Credit Amount for such Tenant (and Terminated Lease
Credit Amounts with respect to any other Tenants for which Purchaser received
Terminated Lease Credit Amounts with respect to bankruptcy or insolvency
proceedings and such Tenants assumed their leases after the Closing and paid all
amounts outstanding), Purchaser shall not be required to pay such Terminated
Lease Credit Amount to Sellers. The provisions of this Section 3.6.4 shall
survive the Closing.
3.6.5 Notwithstanding the foregoing, in the event that Sellers
terminate the Payless Shoes lease at the Plaza del Norte Project without
Purchaser's prior written consent and, as of the Closing Date, the space
occupied by Payless Shoes has not been leased to a new Tenant for at least the
base rent payable by Payless Shoes, then at Closing, the Purchase Price shall be
reduced by an amount equal to (x)the annual base or minimum rent payable on the
Effective Date under the Payless Shoes Lease, as applicable, divided by (y) the
Cap Rate applicable to Plaza del Norte.
3.7 Reserve Reimbursement Adjustment. At Closing, the Purchase Price shall
be increased by an amount (the "Reserve Reimbursement Adjustment") equal to the
full amount of all reserves, deposits and escrows ("Lender Reserves") then held
by Lender or Servicer, to the extent Lender or Servicer certifies such amounts
in writing. The amount of all Lender Reserves held by Lender or Servicer as of
the date hereof is set forth on Exhibit 3.7.
PURCHASE AND SALE AGREEMENT
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4. INSPECTIONS AND APPROVALS.
4.1 Inspections; Access.
4.1.1 Sellers have delivered or, within five (5) days after the
Effective Date, shall deliver to Purchaser copies of all (a) Leases, (b) Service
Contracts, (c) operating and financial statements relating to the period of the
Sellers' ownership of the Property, (d) Loan Documents, (e) Sellers' existing
title policies and all documents and instruments referenced as exceptions in
such title policies to the extent in the possession of Sellers or Manager
("Existing Title Policies"), (f) existing surveys (each, a "Survey" and
collectively, the "Surveys") relating to the Property, and (g) the Environmental
Reports. Thereafter during the Inspection Period, Sellers will provide or make
available to Purchaser, within five ( 5 ) days after written request by
Purchaser, all other documents reasonably requested by Purchaser which are in
the possession and control of Sellers or Manager and Sellers shall provide
Purchaser and Purchaser's employees, agents and representatives with reasonable
access, during normal business hours, to its records regarding the Property kept
by Manager, including, to the extent in Sellers' or Manager's possession and
control: (x) all maintenance and repair records of the Property during Sellers'
period of ownership, (y) tax bills for the Property, and (z) any correspondence
contained in such records to or from (i) any governmental authorities having
jurisdiction over the Property and/or (ii) tenants of the Property; but, shall
specifically exclude any records dealing with appraisals or valuations and
interoffice correspondence.
4.1.2 During the Inspection Period, Sellers agree to allow Purchaser
and Purchaser's engineers, architects, employees, agents and representatives
("Purchaser's Agents") reasonable access, during normal business hours, to the
Projects and to the records, if any, maintained for Sellers by Manager during
normal business hours; provided, however, if Purchaser gives written notice to
Seller on or prior to the Approval Date that Purchaser elects to proceed with
the transactions contemplated by this Agreement, then the access rights
hereunder shall continue after the Approval Date until the earlier to occur of
the Closing Date or termination of this Agreement. Such access shall be solely
for the purposes of (i) reviewing Leases and Service Contracts and any records
relating thereto; (ii) reviewing records relating to operating expenses; and
(iii) inspecting the physical condition of the Projects and conducting
non-intrusive physical or environmental inspections of the Projects. Purchaser
shall not conduct or allow any physically intrusive testing of, on or under any
Project without first obtaining the written consent (which shall not be
unreasonably withheld or delayed if Purchaser's Phase I audit recommends such
invasive testing) of Sellers as to the timing and scope of work to be performed.
4.1.3 Purchaser agrees that, in making any physical or environmental
inspections of the Projects, Purchaser and all of Purchaser's Agents entering
onto the Projects shall carry not less than TWO Million Dollars ($2,000,000)
comprehensive general liability insurance insuring all activity and conduct of
Purchaser and Purchaser's Agents while exercising such right of access and
naming Sellers as additional insureds. Purchaser represents and warrants that it
carries not less than Two Million Dollars ($2,000,000) commercial general
liability insurance with contractual liability endorsement which insures
Purchaser's indemnity obligations hereunder, and will provide Sellers with
written evidence of same prior to entry on any Project.
4.1.4 Purchaser agrees that in exercising its right of access
hereunder, Purchaser will use and will cause Purchaser's Agents to use
reasonable efforts not to interfere
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 15
with the activity of tenants or any persons occupying or providing service at
the Property. Purchaser shall, at least forty-eight (48) hours prior to
inspection, give Sellers written notice of its intention to conduct any
inspections, so that Sellers shall have an opportunity to have a representative
present during any such inspection. During the Inspection Period, Purchaser
shall not contact any current or potential tenants of the Property without the
prior consent of Sellers, which consent shall not be unreasonably withheld.
Sellers expressly reserve the right to have a representative present during any
discussion with any such tenants. Purchaser agrees to cooperate with any
reasonable request by Sellers in connection with the timing of any such
inspection.
4.1.5 Unless the Sellers specifically and expressly otherwise agree
in writing, Purchaser agrees that the results of all inspections, analyses,
studies and similar reports relating to the Property prepared by or for
Purchaser utilizing any information acquired in whole or in part through the
exercise of Purchaser's inspection rights or provided by Sellers or Sellers'
agents or representatives (the "Proprietary Information") shall be subject to
the terms of that certain Exclusive Dealing and Confidentiality Agreement dated
September 28, 2004 between Purchaser and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as amended to the
date hereof (the "Confidentiality Agreement") and shall not be disclosed to any
other person except (i) those assisting Purchaser with the transaction,
potential investors and/or joint venturers, rating agencies and Lender, and then
only in accordance with such Confidentiality Agreement. Further, if the purchase
and sale contemplated hereby fails to close for any reason whatsoever, Purchaser
agrees to return to Sellers, or cause to be returned to Sellers, all Proprietary
Information and any copies thereof made by Purchaser. Notwithstanding any other
term of this Agreement, the provisions of this Section 4.1.5 shall survive the
termination of this Agreement. The provisions of this Section 4.1.5 shall
terminate upon Closing.
4.1.6 Purchaser shall, at its sole cost and expense, promptly
restore any physical damage or alteration of the physical condition of the
Property which results from any inspections conducted by or on behalf of
Purchaser. All inspections shall be conducted at Purchaser's sole cost and
expense and in strict accordance with all requirements of applicable law.
4.1.7 Except as specifically set forth herein, Sellers make no
representations or warranties as to the truth, accuracy, completeness,
methodology of preparation or otherwise concerning any engineering or
environmental reports or any other materials, data or other information supplied
to Purchaser in connection with Purchaser's inspection of the Property (e.g.,
that such materials are complete, accurate or the final version thereof, or that
such materials are all of such materials as are in each Seller's possession).
Except as specifically set forth herein, it is the parties' express
understanding and agreement that any materials which Purchaser is allowed to
review are provided only for Purchaser's convenience in making its own
examination and determination prior to the Approval Date as to whether it wishes
to purchase the Property, and, in doing so, Purchaser shall rely exclusively on
its own independent investigation and evaluation of every aspect of the Property
and not on any materials supplied by Sellers. Except as specifically set forth
herein, Purchaser expressly disclaims any intent to rely on any such materials
provided to it by Sellers in connection with its inspection and agrees that it
shall rely solely on its own independently developed or verified information.
4.1.8 SUBJECT TO SECTION 13.19.2, PURCHASER AGREES TO INDEMNIFY,
DEFEND, AND HOLD SELLERS AND MANAGER FREE AND HARMLESS FROM ANY LOSS, INJURY
(INCLUDING DEATH), DAMAGE, CLAIM, LIEN, COST OR
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 16
EXPENSE, INCLUDING REASONABLE ATTORNEYS' FEES AND COSTS, ARISING OUT OF OR
RELATING TO A BREACH OF THE FOREGOING AGREEMENTS BY PURCHASER IN CONNECTION WITH
THE INSPECTION OF THE PROPERTY, OR OTHERWISE FROM THE EXERCISE BY PURCHASER OR
PURCHASER'S AGENTS OF THE RIGHT OF ACCESS UNDER THIS SECTION 4.1. THIS SECTION
4.1.8 SHALL SURVIVE CLOSING OR THE TERMINATION OF THIS AGREEMENT.
4.1.9 Purchaser shall keep the Property free from any liens arising
out of any work performed, materials furnished or obligations incurred by or on
behalf of Purchaser or Purchaser's Agents with respect to any inspection or
testing of the Property. If any such lien at any time shall be filed, Purchaser
shall cause the same to be discharged of record within thirty (30) days after
notice of same by satisfying the same or, if Purchaser, in its discretion and in
good faith determines that such lien should be contested, by recording a bond.
4.2 Title and Survey.
4.2.1 Sellers have delivered the Existing Title Policies and Surveys
to Purchaser and have ordered, on Purchaser's behalf, (i) a separate commitment
for title insurance on each Project issued by the Title Company and dated after
the Effective Date (each a "Title Commitment" and collectively, the "Title
Commitments") and (ii) an update of each Survey which meets the minimum standard
detail requirements for an ALTA/ACSM Land Title Survey (collectively, the
"Updated Surveys"). Purchaser shall have until the Approval Date to provide
written notice to Sellers (the "Title Notice") of any matters shown by the
Existing Title Policies or Surveys which are not satisfactory to Purchaser;
provided, however, that in the event any new and additional matters or
requirements are taken as exceptions to title by the Title Company in the Title
Commitments or thereafter, then Purchaser shall deliver a Title Notice with
respect to such new matters or requirements to Sellers on or before the later of
(x) fifteen (15) business days after receipt of a Title Commitment raising such
new matter or requirement and (y) the Approval Date.
4.2.2 If any Updated Survey reveals any matter not shown on the
corresponding Survey which is not satisfactory to Purchaser, Purchaser shall
deliver a Title Notice to Sellers within fifteen (15) business days of receipt
of the Updated Survey which shall specify the objection (the objections stated
in any Title Notice given pursuant to Sections 4.2.1 or 4.2.2 are herein
collectively called the "Title Objections"). Sellers shall then have until the
Approval Date, or in the case of a Title Notice relating to a new matter or
requirement given after the Approval Date, a period of ten (10) business days
after receipt of such Title Notice (the "Cure Date") to give written notice (the
"Title Election") to Purchaser as to whether Sellers elect to cure such Title
Objections. Sellers shall have no obligation whatsoever to expend or agree to
expend any funds, to undertake or agree to undertake any obligations or
otherwise to cure or agree to cure any Title Objections, provided that,
notwithstanding the foregoing, if any Title Objections consist of Consensual
Liens, Sellers shall be required to expend the aggregate amount of such
Consensual Liens to remove of record (by payment or bonding) such Consensual
Liens. Sellers shall not be deemed to have any obligation to cure any Title
Objections (other than Consensual Liens) unless Sellers expressly undertake such
an obligation by a written notice to or written agreement with Purchaser given
or entered into on or prior to the relevant Cure Date and which recites that it
is in response to a Title Notice and/or a Survey Notice. If Sellers elect not to
cure any Title Objections (other than Consensual Liens), Purchaser's sole right
shall be to elect within ten (10) business days after receipt of Sellers' Title
Election to either (a) terminate this Agreement (other than Surviving
Obligations) and to receive
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 17
a refund of the Deposit, or (b) accept title in its current condition, without
any adjustment in the Purchase Price (other than any abatement for uncured
Consensual Liens), in which event such Title Objections shall be deemed to have
been waived for all purposes. If Sellers elected to cure any Title Objection and
such cure is not completed by the Closing Date, Sellers have the right to
postpone the Closing for up to thirty (30) days in order to provide Sellers with
an opportunity to cure such Title Objection.
4.2.3 All matters (other than Consensual Liens) shown on the
Existing Title Policies and the Title Commitment and/or Survey and Updated
Survey with respect to which Purchaser fails to give a Title Notice on or before
the last date for so doing, or with respect to which a timely Title Notice is
given but Sellers elect not to cure as provided above, shall be deemed to be
Permitted Encumbrances, subject, however, to Purchaser's termination rights
provided in this Section 4.2 and in Section 4.5 hereof.
4.2.4 Purchaser shall have the right to deliver to Sellers, on or
before the Approval Date, a list of all reciprocal easement agreements ("REAs")
for which Purchaser requests estoppel certificates pursuant to Section 10.1.3.
4.3 Contracts. On or before the Approval Date, Purchaser shall notify
Sellers in writing if Purchaser elects not to assume at Closing any of the
Service Contracts which are identified on Exhibit 4.3 attached hereto. At
Closing, Sellers shall give notice of termination of such disapproved Service
Contract(s); provided, if by the terms of the disapproved contract Sellers have
no right to terminate same on or prior to Closing, of if any fee or other
compensation is due thereunder as a result of such termination, Purchaser shall
be required at Closing to assume all obligations thereunder until the effective
date of the termination and to assume the obligation to pay or to reimburse
Sellers for the payment of the termination charge relating thereto.
4.4 Permitted Encumbrances. Sellers shall deliver the Property to
Purchaser (or its Permitted Assignees) at Closing, free and clear of all Liens
other than:
4.4.1 All exceptions to title shown in the Title Commitments or
matters shown on the Surveys and Updated Surveys which Purchaser has approved or
is deemed to have approved pursuant to Section 4.2 hereof;
4.4.2 All Service Contracts which Purchaser has not elected to
terminate;
4.4.3 All Leases;
4.4.4 The Lien of real and personal property taxes and assessments,
which are not yet due and payable;
4.4.5 Rights of Tenants under the Leases; and
4.4.6 The instruments described in Exhibit 4.4.6 attached hereto.
All of the foregoing are referred to herein collectively as "Permitted
Encumbrances." Notwithstanding the foregoing, Liens that Sellers have expressly
agreed to remove or discharge under this Agreement shall not be Permitted
Encumbrances.
PURCHASE AND SALE AGREEMENT
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PAGE 18
4.5 Purchaser's Right to Terminate. If Purchaser gives written notice
("Termination Notice") to Sellers on or before 5:00 p.m. (New York time) on or
before the Approval Date that Purchaser elects to terminate this Agreement
(which election may be made in Purchaser's sole and absolute discretion), this
Agreement shall be deemed terminated as of the date of such notice and the
Deposit shall be returned to Purchaser, whereupon neither the Sellers nor the
Purchaser shall have any further liability to the other hereunder, except for
Surviving Obligations hereunder. If Purchaser gives written notice to Sellers on
or before the Approval Date that Purchaser elects to proceed with the
transactions contemplated by this Agreement or if Purchaser fails to timely give
the Termination Notice, then this Agreement shall continue in full force and
effect.
4.6 Delivery of Title Policy at Closing. As a condition to Purchaser's
obligation to close, the Title Company shall deliver to Purchaser at Closing an
ALTA Owner's Policy of Title Insurance for each Parcel (each, a "Title Policy"
and collectively, the "Title Policies"), together with all endorsements that
Purchaser may request and that are available with respect to property located in
the Commonwealth of Puerto Rico, issued by the Title Company as of the date and
time of the recording of the Deed of Purchase and Sale for each Parcel, in the
amount of the portion of the Purchase Price allocated to such Parcel, insuring
Purchaser as owner of marketable fee simple title to the Property, and subject
only to the Permitted Encumbrances. Sellers shall execute at Closing an
affidavit in such form as the Title Company shall reasonably require for the
issuance of the Title Policies.
5. SELLERS' COVENANTS FOR PERIOD PRIOR TO CLOSING.
Until Closing or termination of this Agreement, Sellers hereby covenant
and agree with Purchaser:
5.1 Insurance. Sellers shall keep the Projects insured under the current
policies against fire and other hazards covered by extended coverage endorsement
and commercial general liability insurance against claims for bodily injury,
death and property damage occurring in, on or about the Projects.
5.2 Operation. Sellers shall operate and maintain the Projects
substantially in accordance with Sellers' past practices, normal wear and tear
and damage from casualty and condemnation excepted.
5.3 New Contracts. Sellers shall have the right to enter into third-party
Service Contracts which are cancelable on thirty (30) days written notice
without penalty or fee without the prior consent of Purchaser. If any Seller
enters into any such Service Contract, such Seller shall promptly provide
written notice thereof to Purchaser and unless Purchaser, within five (5)
business days thereafter, notifies such Seller in writing of its intention to
not assume such contract, it shall be treated as a Service Contract approved by
Purchaser under Section 4.3 hereof. Seller shall not enter into any other
Service Contract without the prior consent of Purchaser.
5.4 Leases. Prior to the Approval Date, Sellers shall not terminate or
accept the surrender of any existing Leases without the prior consent of
Purchaser unless Sellers enter into a new Lease for the space demised under such
terminated Lease which new Lease provides for an annual base rent in excess of
the annual base rent payable under the terminated Lease. In the event that
Sellers terminate or accept the surrender of any Lease without Purchaser's prior
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 19
written consent pursuant to the foregoing, Sellers shall deliver copies thereof
to Purchaser within five (5) business days after execution thereof.
Notwithstanding the foregoing, any termination of the Payless Shoes Lease at
Plaza del Norte shall be subject to Section 3.6.5. Prior to the Approval Date,
Sellers shall have the right to execute new leases in accordance with Sellers'
past practices without the prior consent of Purchaser; provided that (a) the
base or minimum rent payable for the space demised under such new Lease is not
less than eighty percent (80%) of the base or minimum rent set forth on Exhibit
5.4 for such space, (b) the tenant thereunder is Credit-Worthy, (c) such Lease
will not cause the violation of any exclusive use rights granted under, or
prohibited use clause in, any other Lease at the Property, (d) the term
(including renewal options) thereof shall not exceed ten (10) years in the case
of any outparcel space Lease and five (5) years in the case of any other Lease,
unless (i) in the case of any outparcel space Lease, the base rent as of the
tenth (10th) anniversary of the rent commencement date (and as of each tenth
(10th) anniversary thereafter, if applicable) is at least twenty percent (20%)
more than the base rent payable at the beginning of the immediately preceding
ten (10) year period or (ii) in the case of any other Lease, the base rent as of
the fifth (5th) anniversary of the rent commencement date (and as of each fifth
(5th)anniversary thereafter, if applicable) is at least twenty percent (20%)
more than the base rent payable at the beginning of the immediately preceding
five (5) year period; (e) such new Lease provides that the tenant thereunder
will pay its proportionate share of common area maintenance charges, real estate
taxes and insurance charges for the Project in which such tenant is leasing
space, (f) such new Lease does not require the landlord thereunder to perform
any tenant improvements (other than completion of the building in which the
leased premises are located) or provide any tenant improvement allowance, (g) to
the extent that a Seller is required to obtain the consent of the Lender or
Servicer to such new Lease under the Loan Documents, such consent has been
obtained, and (h) Sellers shall deliver copies thereof to Purchaser within five
(5) business days after execution thereof. Prior to the Approval Date, Sellers
also have the right to renew or amend any existing Leases in accordance with
Sellers' past practices without the prior consent of Purchaser; provided that
(w) any such amendment does not reduce the term of such Lease, (x) the base or
minimum rent payable thereunder is not less than the base or minimum rent
payable by such tenant prior to such renewal or amendment (unless such tenant
has the right to renew its Lease pursuant to the express terms of its Lease),
(y) the renewal term thereof shall not exceed ten (10) years in the case of any
outparcel space and five (5) years in the case of any other Lease (unless such
Lease provides for a longer renewal term as of the date hereof), unless the base
rent payable as of the commencement of each renewal term in excess of five (5)
or ten (10) years increases by not less than twenty percent (20%) over the base
rent payable as of the commencement of the immediately preceding term; and (z)
Sellers shall deliver copies thereof to Purchaser within five (5) business days
after execution thereof. Except as specifically provided in this Section 5.4,
prior to the Approval Date, Sellers shall not execute any new Lease or renew,
amend or terminate any existing Leases (unless a Seller is required to renew,
amend or terminate an existing Lease pursuant to the terms thereof) without the
prior written consent of Purchaser, not to be unreasonably withheld or delayed.
From and after the Approval Date, Sellers shall not execute any new Lease or
renew, amend or terminate any existing Leases (unless a Seller is required to
renew, amend or terminate an existing Lease pursuant to the terms thereof)
without the prior written consent of Purchaser, not to be unreasonably withheld
or delayed. In the event that Purchaser's consent is required to any of the
foregoing, Purchaser will be deemed to have approved any such action if
Purchaser fails to respond to any request for consent within five (5) business
days after receipt of such request for consent.
5.5 Other Documents. Sellers shall not voluntarily take any of the
following actions (where Sellers would have the discretion not to so act)
without the prior written consent of
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 20
Purchaser, not to be unreasonably withheld or delayed (unless such action is
disclosed or contemplated in this Agreement or in the Exhibits attached hereto,
in which case Purchaser's consent shall not be required): (a) amend any Service
Contracts; (b) renew or extend the term of any of its Service Contracts (except
in connection with the exercise by the service providers of options to renew set
forth in such Service Contracts); (c) enter into any new Service Contract
(except as provided in Section 5.3) or cancel or terminate any Service Contract;
(d) modify, amend, assign (except as contemplated herein) or terminate the Loan
Documents; or (e) enter into, extend, modify or terminate any other agreement
affecting the Property, the term of which would extend beyond the Closing. In
the event that Purchaser's consent is required to any of the foregoing,
Purchaser will be deemed to have approved any such action if Purchaser fails to
respond to any request for consent within five (5) business days after receipt
of such request for consent.
5.6 Reports. Subject to the provisions of Section 4.1.5, Sellers shall
deliver to Purchaser copies of monthly operating reports, leasing activity
reports, tenant sales reports, reports regarding changes in Liens, reports on
all litigation (other than litigation covered by insurance) which affects the
Projects or the Sellers, changes in use restrictions, decisions to develop or
build upon any Property and all other material reports and information generated
by Sellers; provided, that Sellers shall deliver such materials as they are
prepared (if applicable) in good faith, in the ordinary course of Sellers'
business and consistent with Sellers' then practice, but Sellers do not and
shall not warrant the completeness or accuracy thereof.
5.7 Additional Encumbrances. Sellers shall not hypothecate, lien, mortgage
or otherwise encumber or voluntarily permit the imposition or creation of any
lien (other than the liens created by the Loan Documents) with respect to the
Property.
5.8 Employment Agreements. Sellers shall not enter into any employment
contract or collective bargaining agreement, written or oral, which would be
binding on Purchaser.
5.9 Notices. Sellers shall deliver to Purchaser copies of (a) all notices
of default sent or received by any Seller to or from any tenant of the Property
and notices received by any Seller of claims asserted against any Seller with
respect to the Leases, (b) all notices of default sent by Lender to any Seller,
(c) all cancellation, termination or surrender notices or notices of any
exercise of any option sent or received by any Seller to or from any tenant of
the Property, (d) all notices of default sent or received by any Seller with
respect to any Service Contract, Permit or Warranty, and (e) all notices of
violations of applicable Laws in connection with the Property. Sellers shall
also deliver notice to Purchaser of (i) any casualty affecting any Property
promptly after the occurrence thereof or (ii) condemnation affecting any
Property promptly after receipt of notice thereof.
5.10 Leasing Costs. Sellers shall pay all Leasing Costs due with respect
to Leases entered into prior to the Closing Date (other than leasing commissions
relating to renewal options that have not been exercised in writing prior to
Closing) and with respect to renewal options if such renewal options have been
exercised in writing and the term thereof has commenced prior to Closing.
5.11 Consents. Sellers shall, at Sellers' expense, use reasonable efforts
to obtain any consents required from Tenants, parties to any Service Contract
and the issuer of any Permit or Warranty if such consents are necessary to
assign Leases, Service Contracts, Permits or Warranties.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 21
5.12 Books and Records. Sellers shall maintain the books and records
relating to the Property in accordance with the accounting principles currently
utilized by Sellers, consistently applied, and not change in any material manner
any of their methods, principles or practices of accounting currently in effect,
except as may be required by applicable Law or GAAP.
5.13 Security Deposits. From and after the Approval Date, Sellers shall
not apply any security deposits to delinquent rentals or other amounts owed by a
Tenant while a Tenant is in possession of the space under its Lease without
Purchaser's written consent.
5.14 Compliance with Documents. Sellers shall continue to comply in all
material respects with the terms and conditions of the Loan Documents, the
Leases, the Service Contracts, the Warranties and the Permits.
5.15 Lease Terminations Upon Purchaser's Request. From and after the
Approval Date, in the event of any monetary default by a Tenant under any Lease,
Sellers shall, within five (5) business days after receipt of written request
from Purchaser, deliver (a) a notice of default to such Tenant if required
pursuant to such Lease and (b) a notice of termination of such Lease if such
Tenant has not cured such default within any applicable notice and cure period.
If such Tenant fails to vacate after the termination of such Lease, Sellers
shall, at Purchaser's expense, take such legal action to remove such Tenant from
occupancy as Purchaser may request in writing.
6. REPRESENTATIONS AND WARRANTIES.
6.1 By Seller. Each Seller represents and warrants to Purchaser (all of
which, as updated pursuant to Section 6.4, shall also be required to be true and
correct in all material respects on and as of the Closing Date) as follows:
6.1.1 Each Seller is duly organized and validly existing as a
limited partnership under the laws of the State of Delaware. Each Seller is
authorized to do business in the Commonwealth of Puerto Rico. The
representatives executing this Agreement on such Seller's behalf have been duly
authorized and are empowered to bind such Seller to this Agreement. This
Agreement is, and as of the Closing each other agreement or instrument
contemplated hereby to which such Seller will be a party will have been, duly
authorized, executed and delivered on such Seller's behalf, and be the legal,
valid and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement thereof or relating to creditors' rights generally and
subject to the availability of equitable remedies and the effect of general
principles of equity. The execution and performance of this Agreement by each
Seller will not violate any material term of such Seller's limited partnership
agreement.
6.1.2 Subject to Lender's Consent, neither the execution of this
Agreement, nor the performance of this Agreement will result in any breach of,
or constitute any default under, or result in the imposition of any lien or
encumbrance under any agreement to which any Seller is a party.
6.1.3 There is no existing or, to Sellers' knowledge, threatened
litigation against any Seller, which, if adversely determined, could have a
material adverse effect on such Person's ability to consummate the transactions
contemplated hereby;
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 22
6.1.4 To the best of Sellers' knowledge, except as set forth in the
Environmental Reports, neither Sellers nor Manager have received any written
notice of violation of any Environmental Laws;
6.1.5 Neither Sellers nor Manager has received written notice from
any Governmental Entity regarding any change to the zoning classification of any
Project, any condemnation proceedings relating to any Project or proceedings to
widen or realign any street or highway adjacent to any Project.
6.1.6 The list of Service Contracts set forth in Exhibit 4.3 is
true, correct and complete as of the Effective Date. No written notice of
default which remains uncured has been given or received by a Seller or Manager
with respect to the Service Contracts. Neither the Sellers nor Manager have
received written notice of any claim asserted against any Seller with respect to
the Service Contracts.
6.1.7 Exhibit 1.1.33 sets forth a true, correct and complete list of
all Leases as of the Effective Date. Sellers have delivered true, correct and
complete copies of the Leases set forth on Exhibit 1.1.33 to Purchaser. As of
the Effective Date, there are no leases or occupancy agreements in effect at the
Projects other than the Leases set forth in Exhibit 1.1.33. None of the Leases
violates any exclusive rights granted to any other tenant or any prohibitions
contained in any other Lease. As of the Closing Date, no Leases shall exist at
the Property other than the Leases set forth in Exhibit 1.1.33 and leases
executed pursuant to Section 5.4. The foregoing does not constitute a
representation or warranty that all of the Leases set forth in Exhibit 1.1.33
will be in effect on the Closing Date.
6.1.8 The list of the Loan Documents contained in Exhibit 1.1.39 is
true and complete. No written notice of default which remains uncured has been
received by a Seller with respect to the Loan Documents.
6.1.9 No Seller is a party to any employment agreements, collective
bargaining agreements, union contracts or similar agreements affecting the
Property by which Purchaser would be bound upon acquisition of the Property.
Sellers have no employees.
6.1.10 No petition in bankruptcy (voluntary or otherwise),
assignment for the benefit of creditors, or petition seeking reorganization or
arrangement or other action under federal or state bankruptcy laws is pending
against any Seller.
6.1.11 To Sellers' knowledge, the Rent Rolls are true, correct and
complete as of the date thereof.
6.1.12 No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state (including Puerto
Rico) or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), is required by or with respect to the Property in
connection with the execution and delivery by Sellers of this Agreement and all
documents contemplated hereunder or the consummation by Sellers of the
transactions contemplated hereunder or thereunder.
6.1.13 Exhibit 6.1.13 is a true, correct and complete list of all
Security Deposits made by each of the tenants under the Leases which have not
been applied as of September
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 23
30, 2004. Except as set forth in Exhibit 6.1.4, neither the Manager nor any
Seller has received any advance payment of base rent (other than for the current
month) on account of any of the Leases.
6.1.14 Except as set forth in Exhibit 6.1.14, no written notice of
default which remains uncured has been given or received by a Seller or Manager
with respect to the Leases. Except as set forth in Exhibit 6.1.14, neither the
Sellers nor Manager have received written notice of any claim asserted against
any Seller with respect to the Leases
6.1.15 Exhibit 6.1.15 sets forth a correct and complete list of all
Tenants listed on the Rent Roll for which any Seller or Manager has received
written notice of any termination or cancellation as of the Effective Date.
6.1.16 Sellers are not lessees under any ground lease at the
Property.
6.1.17 No Person has been granted an option to purchase any of the
Property or has a right of first refusal (or right of first offer) to purchase
any of the Property. No Person has the right to require any Seller pursuant to
any Lease or other agreement being assigned and assumed by Purchaser (or its
Permitted Assignee) to purchase or sell any property
6.1.18 The amount of all Lender Reserves held by Lender or Servicer
as of September 30, 2004 is set forth on Exhibit 3.7.
6.1.19 No written notice of default which remains uncured has been
given or received by a Seller or Manager with respect to the Permits. No written
notice of violation of any laws applicable to any Project which remains uncured
has been received by a Seller or Manager.
6.1.20 Sellers and, to the best of Sellers' knowledge, after having
made diligent inquiry, any beneficial owner of twenty percent (20%) or more of
any Seller: (a) is not currently identified on the OFAC List, and (ii) is not a
Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States.
6.1.21 Exhibit 6.1.21 contains a true, correct and complete list of
all casualty commercial liability and environmental insurance policies
maintained by Sellers with respect to the Projects as of the date of this
Agreement. To Sellers' knowledge, these policies are in full force and effect as
of the date of this Agreement.
6.2 By Purchaser. Purchaser represents and warrants to Sellers (all of
which shall also be required to be true and correct in all material respects on
and as of the Closing Date) as follows:
6.2.1 Purchaser is a corporation, validly existing and in good
standing under the laws of the State of Ohio, is authorized (or will be
authorized at Closing) to do business in the Commonwealth of Puerto Rico, has
duly authorized the execution and performance of this Agreement, and such
execution and performance will not violate any material term of its
organizational documents.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 24
6.2.2 No petition in bankruptcy (voluntary or otherwise), assignment
for the benefit of creditors, or petition seeking reorganization or arrangement
or other action under federal or state bankruptcy laws is pending against or
contemplated by Purchaser.
6.2.3 Purchaser acknowledges that, by the Approval Date, Purchaser
will have had sufficient opportunity to inspect the Property fully and
completely at its expense in order to ascertain to its satisfaction the extent
to which the Property complies with applicable zoning, building, environmental,
health and safety and all other laws, codes and regulations. Purchaser further
acknowledges that, by the Approval Date, Purchaser will have had sufficient
opportunity to review the Leases, Service Contracts, Loan Documents, expenses
and other matters relating to the Property in order to determine, based upon its
own investigations, inspections, tests and studies, whether to purchase the
Property and to assume Seller's obligations under the Leases, Service Contracts
and Loan Documents and otherwise with respect to the Property.
6.2.4 Purchaser and, to the best of Purchaser's knowledge, after
having made diligent inquiry, any beneficial owner of twenty percent (20%) or
more of Purchaser: (a) is not currently identified on the OFAC List, and (ii) is
not a Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition of
United States law, regulation, or Executive Order of the President of the United
States.
Purchaser's representations and warranties pursuant to this Section 6.2
shall survive the Closing for the Survival Period.
6.3 Mutual. Each Seller and Purchaser represents to the other that it has
had no dealings, negotiations, or consultations with any broker, representative,
employee, agent or other intermediary in connection with the Agreement or the
sale of the Property, except for Transwestern Commercial Services ("Broker"),
who will be paid by Purchaser pursuant to the terms of a separate agreement
between Purchaser and Broker. Purchaser shall indemnify, defend and hold Sellers
harmless from any claims for commission or other compensation from Broker.
Sellers and Purchaser agree that each will indemnify, defend and hold the other
harmless from the claims of any other broker(s), representative(s), employee(s),
agent(s) or other intermediary(ies) claiming to have represented Sellers or
Purchaser, respectively, or otherwise to be entitled to compensation in
connection with this Agreement or in connection with the sale of the Property.
The terms and provisions of this paragraph shall survive Closing hereunder.
6.4 Modifications. Anything to the contrary in this Agreement
notwithstanding, each Seller's representations and warranties made in this
Agreement are now, and shall hereafter continue to be, modified, qualified and
limited in all cases by the Exhibits attached to this Agreement, and by all
other provisions of this Agreement, and by all updates hereafter delivered to
Purchaser in accordance with this Agreement. Each Seller shall, within ten (10)
business days after receiving notice or obtaining knowledge that any of its
representations or warranties is or has become untrue, deliver written notice
thereof to Purchaser, updating such representation or warranty. If, prior to
Closing, Purchaser discovers that any representation, warranty or covenant of
any Seller contained in this Agreement is or, as of the Closing Date, will be
untrue in any material respect ("Representation Failure"), then Purchaser shall
promptly give Sellers written notice of its objection thereto and Sellers shall
update their representations and warranties to correct such Representation
Failure. In the event that such updates disclose facts or circumstances which
result in an Aggregate Income Decrease of $1,000,000 or less,
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 25
Purchaser's sole remedy shall be an adjustment to the Purchase Price in an
amount equal to such Aggregate Income Decrease divided by the applicable Cap
Rate(s). If such updates disclose facts or circumstances which result in an
Aggregate Income Decrease of more than $1,000,000, Sellers shall deliver written
notice ("Update Election Notice") to Purchaser setting forth whether or not
Sellers elect to (x) cure such facts or circumstances (if curable) to
Purchaser's reasonable satisfaction prior to Closing (provided, if such cure is
not complete by Closing, Sellers may elect to postpone the Closing for up to
thirty (30) days in order to provide Sellers with an opportunity to complete
such cure), or (y) reduce the Purchase Price by an amount equal to such
Aggregate Income Decrease divided by the applicable Cap Rate(s). If Sellers
elect to cure or reduce the Purchase Price, Purchaser shall not have the right
to terminate this Agreement. If Sellers elect not to cure or reduce the Purchase
Price, Purchaser's sole right shall be to elect within five (5) business days
after receipt of the Update Election Notice to either (a) terminate this
Agreement (other than Surviving Obligations) and to receive a refund of the
Deposit, or (b) close without reduction in the Purchase Price (other than an
adjustment to the Purchase Price in an amount equal to $1,000,000 divided by the
applicable Cap Rate(s)). If such updates disclose facts or circumstances which
result in any additional payment obligations Purchaser would be required to
assume at Closing, Sellers shall deliver written notice ("Cost Election Notice")
to Purchaser setting forth that Sellers elect to (x) cure such facts or
circumstances (if curable) to Purchaser's reasonable satisfaction prior to
Closing (provided, if such cure is not complete by Closing, Sellers may elect to
postpone the Closing for up to thirty (30) days in order to provide Sellers with
an opportunity to complete such cure), (y) reduce the Purchase Price by an
amount equal to such additional payment obligations, or (z) if Sellers are
disputing such additional payment obligations, deposit an amount equal to such
additional payment obligations in escrow with the Title Company and indemnify
Purchaser with respect thereto. Purchaser shall not have the right to terminate
this Agreement as a result of such additional payment obligations. In the event
that Sellers and Purchaser are unable to agree upon the amount of the Aggregate
Income Decrease or the amount of additional payment obligations resulting from
the information disclosed in such updates, the dispute shall be submitted to
arbitration pursuant to Section 13.18 hereof and the determination of the
arbitrator shall be binding on Sellers and Purchaser.
7. COSTS AND PRORATIONS.
7.1 Sellers' Costs. Sellers shall pay the following costs of closing this
transaction:
7.1.1 The fees and disbursements of Seller's counsel;
7.1.2 The cost of all notarial tariffs and internal revenue stamps
required for the original of each Deed of Purchase and Sale to Purchaser (the
notary public shall be selected by Seller);
7.1.3 Fifty percent (50%) of the cost of (a) the Title Policies in
the amount of the Purchase Price, (b) any endorsements to the Title Policies
which are requested by Purchaser and which were obtained by Sellers in
connection with their acquisition of the Property, and (c) the Updated Surveys;
7.1.4 Fifty percent (50%)of any fees and charges imposed by the
Lender or Servicer with respect to Lender's Consent, including legal fees and
disbursements of Lender and/or Servicer;
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
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7.1.5 All costs of obtaining the estoppels required under Sections
10.1.2 and 10.1.3;
7.1.6 Fifty percent (50%)of any and all escrow fees;
7.1.7 Any other expense(s) incurred by Sellers or their
representative(s) in closing this transaction.
7.2 Purchaser's Costs. Purchaser shall pay the following costs of closing
this transaction:
7.2.1 The fees and disbursements of its counsel, inspecting
architect and engineer and any other consultants engaged by Purchaser, if any;
7.2.2 The cost of all internal revenue stamps required for the first
certified copy of each Deed of Purchase and Sale to Purchaser and all stamps and
vouchers and all other costs relating to the recordation of the certified copy
of each such Deed of Purchase and Sale in the Registry of Property;
7.2.3 Fifty percent (50%) of the cost of (a) the Title Policies in
the amount of the Purchase Price, (b) any endorsements to the Title Policies
which are requested by Purchaser and which were obtained by Sellers in
connection with their acquisition of the Property, and (c) the Updated Surveys;
7.2.4 Fifty percent (50%)of any fees and charges imposed by the
Lender or Servicer with respect to Lender's Consent, including legal fees of
Lender and/or Servicer;
7.2.5 Fifty percent (50%) of any and all escrow fees;
7.2.6 All costs of any endorsements to the Title Policies which are
requested by Purchaser and which were not obtained by Sellers in connection with
their acquisition of the Property;
7.2.7 All commission or other compensation due to Broker; and
7.2.8 Any other expense(s) incurred by Purchaser or its
representative(s) in inspecting or evaluating the Property or closing this
transaction.
7.3 Prorations of Income and Expenses.
7.3.1 Sellers and Purchaser agree to adjust the following items:
a) All rents (other than Additional Rents (as hereinafter
defined) and Percentage Rent) billed for the month in which the Closing Date
occurs will be prorated as of 11:59 p.m. on the day immediately preceding the
Closing Date (the "Apportionment Date") based on the actual number of days in
the month during which the applicable Closing Date occurs and Sellers will be
entitled to such rent for the period on and before the Apportionment Date, and
Purchaser will be entitled to such rent for the period after the Apportionment
Date. All rents payable by each Tenant whose Lease commences on or after the
Closing shall belong
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 27
entirely to Purchaser, including any pre-paid rentals received by Sellers.
Should rent be received subsequent to Closing by Purchaser which belongs to
Sellers, it will be promptly remitted to Sellers, and should rent be received
subsequent to Closing by Sellers which belongs to Purchaser, it will promptly be
remitted to Purchaser;
b) An amount equal to all cash Security Deposits, together
with any interest required to be paid thereon, will be credited to Purchaser and
Sellers shall have the right to retain such cash Security Deposits;
c) Personal property taxes, water and sewer charges, utility
charges (utility charges will be prorated based on the last reading of meters
prior to Closing performed at Seller's request, if possible) and the value of
fuel stored at the Property will be prorated at the Sellers' most recent cost
(on the basis of a reading made within 10 days prior to the Closing by the
supplier but subject to Section 7.3.2) as of the Apportionment Date;
d) Amounts owed or paid by the Sellers under the Service
Contracts and Permits assumed by Purchaser will be prorated as of the
Apportionment Date;
e) Sellers shall be responsible for (i) leasing commissions
and tenant improvement allowances and costs (collectively, "Leasing Costs") for
each lease entered into prior to the Closing Date and (ii) Leasing Costs for
each renewal option which has been exercised in writing prior to Closing if such
renewal term commences before Closing. Purchaser shall be responsible for
Leasing Costs for any lease renewals entered into on or after the Closing Date
and for all Leasing Costs for leases entered into after the Closing Date; and
f) Sellers shall be responsible for all interest on the
Existing Financing attributable to the period prior to the Closing Date, and
Purchaser shall be responsible for all interest on the Existing Financing
attributable to periods from and after the Closing Date.
7.3.2 Prorations shall be paid at Closing by Purchaser to Sellers
(if the prorations result in a net credit to Sellers) or by Sellers to Purchaser
(if the prorations result in a net credit to Purchaser) by increasing or
reducing the cash to be delivered by Purchaser in payment of the Purchase Price
at the Closing. If the actual amounts of the items prorated are not known as of
the Closing Date, the prorations will be made at Closing on the basis of the
best evidence then available; thereafter, when actual figures are received,
re-prorations will be made on the basis of the actual figures, and a final cash
settlement will be made between Sellers and Purchaser.
7.3.3 If on the Closing Date, any tenant under a Lease is in arrears
in the payment of rent, then any amount received by Sellers or Purchaser from
any such tenant after the Closing Date (net of reasonable collection costs)
shall be applied in the following order: (1) first, to Sellers for the month in
which the Closing occurred, (2) then to Purchaser for any period after the month
in which the Closing occurred, and (3) then, to Sellers for any period prior to
the month in which the Closing occurred. However, anything in this Agreement to
the contrary notwithstanding, Purchaser and Sellers shall be bound by any
written instructions given or notations made by any such tenant(s) as to what
period(s) they are paying. If any rents received by Sellers or Purchaser after
the Closing Date are payable to the other party by reason of the foregoing, then
the same (net of reasonable out-of-pocket collection costs) shall be promptly
paid to the other party.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 28
7.3.4 Pursuant to the Leases, each Seller bills tenants for
Additional Rents on a calendar year basis, with a reconciliation of amounts
billed and actual amounts incurred made generally within 120 days after the end
of such calendar year. At the Closing, Sellers shall deliver to Purchaser a list
of Additional Rent, however characterized, under each Lease, including without
limitation, common area maintenance charges, real estate taxes, electrical
charges, utility costs and other operating expense or escalation charges
(collectively, "Additional Rents") billed to tenants for the calendar year in
which the Closing occurs (both on a monthly basis and in the aggregate), the
basis on which the monthly amounts are being billed and the amounts incurred by
the Sellers on account of the components thereof for such calendar year. Upon
the reconciliation by Purchaser of the amounts billed to tenants, and the
amounts actually incurred for such calendar year, Sellers and Purchaser shall be
liable for overpayments of Additional Rent ("Lease Overpayments"), and shall be
entitled to payments from tenants ("Lease Reconciliation Payments"), as the case
may be, on a pro-rata basis based upon each party's period of ownership during
such calendar year. Purchaser shall promptly remit to Sellers Sellers' pro-rata
share of Reconciliation Payments received by Purchaser. Sellers shall promptly
remit to Purchaser Sellers' pro-rata share of Overpayments. In addition,
Purchaser agrees that if the reconciliations by the Sellers of Additional Rents
for the calendar year immediately preceding the year in which the Closing occurs
("Prior Year") have not been completed and billed to tenants on or before the
Closing Date, then upon delivery by Sellers to Purchaser of bills to the tenants
for any adjustment ("Prior Year Adjustment") to the Additional Rents for the
Prior Year, Purchaser shall submit such bills to the Tenants. Purchaser shall
promptly remit to Sellers any Prior Year Adjustment payments received by
Purchaser from Tenants. In the event any Tenant pays Additional Rent on an
annual basis (rather than monthly estimated payments), any Additional Rent
collected by Purchaser from such Tenant pertaining to the calendar year in which
the Closing occurs shall be prorated on a per diem basis as and when collected.
Any amounts relating to Sellers' period of ownership shall be paid to Sellers
promptly after receipt by Purchaser.
7.3.5 Percentage Rent, if any, payable under each Lease shall be
prorated with respect to the full lease year or other applicable full period
provided for under the Lease in which the Closing occurs on a per diem basis as
and when collected. The proration of Percentage Rent, if any, shall be based on
aggregate sales for the full lease year or other applicable full period under
the Lease, without attributing tenant's specific sales amount to the period
before the Closing Date or the period from and after the Closing Date. Any
Percentage Rent collected by Purchaser (including any Percentage Rent which is
delinquent) and pertaining to (i) an entire lease year or accounting period of a
tenant under a Lease which ends on a date prior to the date of Closing, and (ii)
that portion of a lease year or accounting period of such tenant covering a
period prior to the date of Closing where such lease year or accounting period
begins prior to the date of Closing and ends thereafter, shall in both cases be
paid to Sellers promptly after receipt by Purchaser. In the event that any
Tenants have prepaid estimated Percentage Rent, such prepaid Percentage Rent
shall be credited to Purchaser at Closing, subject to the prorations required by
the preceding paragraph following the end of the full lease year or other
applicable full period;
7.3.6 Purchaser shall use reasonable efforts using its standard
collection practices during the six (6)month period immediately following
Closing to collect and promptly remit to the applicable Seller rents or other
amounts due from Tenants for the period prior to Closing with respect to the
Project owned by it; provided that Purchaser shall not be required to pursue
legal action to enforce collection of any such amounts. If Purchaser collects
any such amounts, Purchaser shall promptly pay such amounts (after deducting any
out-of-pocket costs
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 29
incurred by Purchaser in collecting same) to Sellers. If Purchaser uses
reasonable efforts to collect such past-due amounts for the first six (6) months
after Closing but is unsuccessful, each Seller shall have the right to commence
legal action to collect delinquent rents thereafter, but in no event shall any
Seller have the right to evict any Tenant or terminate any Tenant's lease.
Sellers agree that any legal action by Sellers to collect such delinquent
amounts shall be commenced within three (3) months after the end of the
foregoing six (6) month period. In the event that Sellers commence legal action
against a Tenant for such delinquent amounts and such Tenant names Purchaser as
a thirty-party defendant or otherwise causes Purchaser to be named in such legal
action, Sellers shall defend Purchaser (except to the extent that any claims by
such Tenant against Purchaser relate to any period after the Closing). In the
event that Sellers commence legal action against a Tenant for such delinquent
amounts, such Tenant withholds rent from Purchaser because of such legal action
and such legal action is determined in favor of such Tenant, Sellers shall
reimburse Purchaser for the rents withheld by such Tenant, to the extent such
Tenant does not pay such rents to Purchaser within one (1) month after such
determination. Notwithstanding the foregoing, if a Tenant against whom Sellers
have commenced legal action was in arrears on the date such action was
commenced, such Tenant shall not be deemed to be withholding rent from Purchaser
because of such legal action, whether or not such Tenant fails to pay rent to
Purchaser after the commencement of such action. The provisions of Section 7.3
shall survive the Closing.
7.3.7 After the Closing Date, within seven (7) days following
Purchaser's (or the Permitted Assignee's) written request, Sellers shall use
commercially reasonable efforts to deliver (or cause to be delivered) to
Purchaser (or its Permitted Assignee) all financial and other data relating to
the operating expenses and/or the Tenant reconciliations specified in the
request (including, but not limited to ▇▇▇▇▇▇▇▇, records and back-up for any
period prior to Closing, together with any spreadsheets or other documentation
showing the method of calculation of the recoveries) so that Purchaser (or its
Permitted Assignee) can reconcile some or all of the operating expenses for the
applicable Tenant or Tenants. After the Closing Date, within seven (7) days
following Seller's written request, Purchaser shall use commercially reasonable
efforts to deliver (or cause to be delivered) to Seller all financial and other
data relating to the operating expenses and/or the Tenant reconciliations
specified in the request (including, but not limited to ▇▇▇▇▇▇▇▇, records and
back-up for that portion of 2005 after Closing, together with any spreadsheets
or other documentation showing the method of calculation of the recoveries) so
that Seller can reconcile some or all of the operating expenses for the
applicable Tenant or Tenants.
7.4 Proration of Taxes.
7.4.1 General real estate taxes and special assessments relating to
the Property payable during the year in which Closing occurs shall be prorated
as of the Closing Date. If Closing shall occur before the actual taxes and
special assessments payable during such year are known, the apportionment of
taxes shall be upon the basis of taxes for the Property payable during the
immediately preceding year, provided that, if the taxes and special assessments
payable during the year in which Closing occurs are thereafter determined to be
more or less than the taxes payable during the preceding year (after any appeal
of the assessed valuation thereof is concluded), Sellers and Purchaser promptly
shall adjust the proration of such taxes and special assessments, and Sellers or
Purchaser, as the case may be, shall pay to the other any amount required as a
result of such adjustment and this covenant shall not merge with the deed
delivered hereunder but shall survive the Closing.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 30
7.4.2 The Tenants listed on Exhibits 7.4.2(A) and (B) pay real
estate and/or personal property taxes directly to the appropriate taxing
authority. In the event that any of such Tenants listed on Exhibit 7.4.2(A) has
not paid such taxes as of the Closing Date, then such Tenant's taxes shall be
prorated as of the Closing Date at the rate set forth in the applicable tax
certificate (without taking into account any discount that may be applicable).
In the event that any of such Tenants listed on Exhibit 7.4.2(B) is in default
under the terms of its Lease and has not paid such taxes as of the Closing Date,
then such Tenant`s taxes shall be prorated as of the Closing Date at the rate
set forth in the applicable tax certificate (without taking into account any
discount that may be applicable). Within ten (10) days after delivery by Sellers
to Purchaser of tax certificates showing that any of the foregoing Tenants paid
such taxes after Closing, Purchaser shall refund to Sellers the prorated portion
of such Tenant's taxes for the period commencing January 1,2005 and ending on
the Closing Date.
7.5 Prorations in General. Any other costs or charges of closing this
transaction not specifically mentioned in this Agreement shall be paid and
adjusted in accordance with local custom in the State of New York.
7.6 Corrections. In the event any prorations, apportionments or
computations shall prove to be incorrect for any reason, then either party shall
be entitled to an adjustment to correct the same, provided that it makes written
demand on the party from which it is entitled to such adjustment within one (1)
year after the Closing Date.
7.7 Draft Statements. Sellers shall deliver to Purchaser a draft of a
settlement statement setting forth the proposed adjustments to the Purchase
Price and prorations of income and expenses at least fifteen (15) business days
prior to Closing.
7.8 Purpose and intent. Except as expressly provided herein, the purpose
and intent as to the provisions of prorations and apportionments set forth in
this Section 7 and elsewhere in this Agreement is that Sellers shall bear all
expenses of ownership and operation of the Property and shall receive all income
therefrom accruing through 11:59 p.m. of the day preceding the Closing Date and
Purchaser shall bear all such expenses and receive all such income accruing
thereafter.
8. DAMAGE, DESTRUCTION OR CONDEMNATION.
8.1 Material Event. If, prior to Closing, (a) the number of parking spaces
on any Project are reduced by casualty or eminent domain below the number of
parking space required to comply with applicable laws or the terms of any Lease,
(b) the Improvements located on any Project are damaged and the cost of repair
exceeds $10,000,000 (as mutually determined by Sellers and Purchaser), (c) more
than five percent (5%) of the aggregate rentable square feet of the Improvements
on the Property are taken under power of eminent domain, or (d) all access to
any Project is destroyed or taken under power of eminent domain and the cost to
repair or replace such access exceeds $10,000,000 (as mutually determined by
Sellers and Purchaser) (each, a "Material Event"), Purchaser may elect to
terminate this Agreement prior to the Closing Date by giving written notice of
its election to Sellers within thirty (30) days after receiving notice from
Sellers of such destruction or taking, which notice from Sellers shall contain
such information as is reasonably necessary for Purchaser to make its election.
In the event that Sellers' notice of the Material Event is received by Purchaser
less than thirty (30) days prior to the scheduled Closing Date, Purchaser shall
have the right to adjourn the Closing to the extent necessary for Purchaser to
have a period of thirty (30) days after receiving Sellers' notice to
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 31
determine whether Purchaser will elect to terminate this Agreement. If Purchaser
does not give such written notice within such thirty (30) day period, (x) this
transaction shall be consummated on the Closing Date without reduction of the
Purchase Price, and (y) the applicable Seller will assign to Purchaser the
physical damage proceeds of any insurance policy(ies) payable to such Seller or
such Seller's portion of any condemnation award (but such Seller shall retain
insurance recoveries or condemnation award reimbursing such Seller for its
expenditures, if any, in making repairs or replacements of any such damage,
destruction or taking), and, if an insured casualty, pay to Purchaser the amount
of any deductible.
8.2 Immaterial Event. If, prior to Closing, any Project is subject to a
casualty or a condemnation event that is not a Material Event, Purchaser shall
close this transaction on the Closing Date without reduction of the Purchase
Price, and the Seller that owns the affected Project will assign to Purchaser
the physical damage proceeds of any insurance policies payable to such Seller,
or such Seller's rights to any portion of any condemnation award (but such
Seller shall retain insurance recoveries or condemnation aware reimbursing such
Seller for its expenditures, if any, in making repairs or replacements of any
such damage, destruction or taking), and, if an insured casualty, pay to
Purchaser the amount of any deductible but not to exceed the amount of the loss.
8.3 Dispute. In the event that Sellers and Purchaser are unable to agree
upon a determination of whether any casualty or condemnation is a Material
Event, Sellers and/or Purchaser shall submit their dispute to arbitration
pursuant to Section 13.18 hereof and the determination of the arbitrator shall
be binding on Sellers and Purchaser.
9. NOTICES.
Any notice required or permitted to be given hereunder shall be deemed to
be given (a) when hand delivered, or (b) one (1) business day after pickup by
Airborne, Federal Express, or similar overnight express service, in each case
addressed to the parties at their respective addresses referenced below:
If to Seller: MPR Del Norte LP, S.E.
MPR ▇▇▇▇ Baja LP, S.E.
MPR ▇▇▇▇▇▇▇ ▇▇, S.E.
MPR Del Oeste LP, S.E.
MPR Guyama LP, S.E.
1120 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
With a copy to: Kronish ▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
If to Purchaser: Developers Diversified Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
CEO and Chairman of the Board
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 32
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President and Secretary
Developers Diversified Realty Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Title Company: Commonwealth Land Title Insurance Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
or in each case to such other address as either party may from time to time
designate by giving notice in writing to the other party. Effective notice will
be deemed given only as provided above.
10. CONDITIONS TO CLOSING.
10.1 Purchaser's Conditions. Purchaser's obligation to purchase the
Property at Closing and to pay the Purchase Price is expressly conditioned upon
the following (unless waived or deemed waived pursuant to the provisions of this
Agreement, or otherwise in a writing signed by Purchaser):
10.1.1 Each Seller's warranties and representations set forth in
Article 6 herein, as updated pursuant to Section 6.4, shall be true and correct
in all material respects as of the date of Closing. Sellers shall have performed
in all material respects all covenants required to be performed by it under this
Agreement at or prior to the Closing Date and Sellers shall not have breached in
any material respect any covenants that prevent Purchaser from fulfilling its
obligations under this Agreement. Seller shall have executed and delivered all
documents and instruments required to be executed and delivered by it under this
Agreement at the Closing.
10.1.2 At Closing, Sellers shall deliver estoppel certificates in
all material respects in the form of Exhibit 10.1.2, dated no earlier than the
Effective Date, from all Required Tenants and from an aggregate of Tenants
representing not less than seventy-five percent (75%) of the rentable square
feet with respect to each Project (exclusive of occupants under temporary
license and concession agreements). Sellers shall use commercially reasonable
efforts to obtain estoppel certificates from all other Tenants ("Other
Estoppels"). Notwithstanding the foregoing sentence, if any tenant estoppel
certificate shall contain or otherwise disclose a material substantive exception
from the form of "clean" estoppel certificate as provided in the form of Exhibit
10.1.2, the same shall still be treated as the delivery of a tenant estoppel
certificate for purposes of this Section 10.1.2, provided that (i) if any such
disclosure evidences a material deviation from the matters set forth in Exhibit
1.1.33 or from the information set forth in the Leases and such deviation is or
results in a specified or readily ascertainable dollar amount, such estoppel
certificate shall be deemed an update of Sellers' representations under Section
6.4 and Sellers and Purchaser shall have the rights, remedies and obligations
set forth in Section 6.4 with respect thereto, or (ii) if any such disclosure
evidences a material deviation from the matters set forth in Exhibit 1.1.33 or
from the information set forth in the Leases and such deviation is not a
specified or readily ascertainable dollar amount, Purchaser shall be entitled to
(a) terminate this Agreement in its entirety and receive the Deposit, or (b)
waive the requirement and close without reduction in the Purchase Price. In the
event Sellers are unable to deliver one hundred percent (100%) of the Other
Estoppels (for this purpose, again excluding
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 33
occupants under temporary license and concession agreements), Sellers shall
furnish Sellers' estoppels (each a "Seller Estoppel Certificate") in the form of
Exhibit 10.1.2, dated as of the Closing Date. A Seller Estoppel Certificate
shall be deemed a representation from Sellers which shall survive Closing for
the Survival Period; provided if after Sellers deliver a Seller Estoppel
Certificate on behalf of a tenant, the applicable tenant delivers an estoppel
certificate (and such estoppel certificate does not state any materially
different information from that set forth in the Seller Estoppel Certificate),
except as set forth in Section 13.14.4, the Seller Estoppel Certificate shall be
of no further force and effect. In the event Sellers are unable to comply with
the preceding provisions of this Section 10.1.2, Purchaser shall be entitled to
(a) terminate this Agreement in its entirety and receive the Deposit, or (b)
waive the requirement and close without reduction in the Purchase Price.
Anything to the contrary herein notwithstanding, Purchaser hereby
acknowledges that many tenants have their own forms of estoppel letter, and
delivery of such alternative forms shall satisfy the conditions of this Section
10.1.2 provided that the tenants using such alternative forms do not disclose
therein (a) the existence of unresolved material claims against a Seller (as
landlord) which shall survive Closing, or (b) matters materially inconsistent
with Seller's' representations set forth in this Agreement or in the Exhibits
attached hereto.
10.1.3 At Closing, Sellers shall deliver estoppel certificates in
all material respects in the form of Exhibit 10.1.3, dated no earlier than the
Approval Date, from each of party to an REA (other than Sellers) for which
Purchaser has requested an estoppel pursuant to Section 4.2.4, provided that if
Sellers are unable to obtain any such estoppel certificates from such parties,
Sellers shall deliver estoppels from Sellers in the form of Exhibit 10.1.3,
dated as of the Closing Date. In the event Sellers are unable to comply with the
preceding provisions of this Section 10.1.3, Purchaser's remedies shall be
limited to (a) terminating this Agreement in its entirety and receiving the
Deposit, or (b) waiving the requirement and closing without reduction in the
Purchase Price.
10.1.4 Subject only to payment of all premiums for same, the Title
Company shall be prepared to issue at Closing (or prepared to unconditionally
commit to issue at Closing, with no "gap" exception) its base title policies in
the required form subject only to the Permitted Exceptions.
10.1.5 Purchaser shall have obtained the written consent of Lender
to the transactions set forth herein ("Lender's Consent"). Promptly after the
date hereof, Sellers and Purchaser shall apply for Lender's Consent and, in
connection therewith, Purchaser shall furnish accurate and complete financial
and background information regarding Purchaser as requested by Lender or
Servicer. If Lender's Consent is not received on or before the Closing Date,
then Sellers or Purchaser shall have the right to adjourn the Closing for up to
ninety (90) days in order for Purchaser to obtain Lender's Consent. If Lender's
Consent is not received within such ninety (90) day period, either Sellers or
Purchaser may, upon ten (10) days' prior written notice, terminate this
Agreement (unless Lender's Consent is received within such ten (10) day period,
in which case, such termination shall be null and void).
10.1.6 No event of default shall exist and be continuing under the
Loan Documents.
10.1.7 Subject to Section 2.4, the closings under the CRV Agreement
and the CPR Agreement shall occur simultaneously with the Closing hereunder.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 34
10.1.8 On or prior to the Closing Date, no Seller shall have (i)
applied for or consented to the appointment of a receiver, trustee or liquidator
for itself or any of its assets unless the same shall have been discharged (with
no right of appeal) prior to the Closing Date, and no such receiver, liquidator
or trustee shall have otherwise been appointed, unless same shall have been
discharged (with no right of appeal) prior to the Closing Date, (ii) been unable
to meet its debts as they became due or admitted in writing an inability to pay
its debts as they mature, (iii) made a general assignment for the benefit OF
creditors, (iv) been adjudicated a bankrupt or insolvent, or had a voluntary or
involuntary petition for reorganization granted with respect to such Person, or
(v) filed a voluntary petition seeking reorganization or an arrangement with
creditors or taken advantage of any bankruptcy, reorganization, insolvency,
readjustment or debt, dissolution or liquidation law or statute, or filed an
answer admitting the material allegations of a petition filed against it in any
proceedings under any such law, or had any voluntary or involuntary petition
filed against it in any proceeding under any of the foregoing laws, in each
case, unless the same shall have been dismissed, canceled or terminated prior to
the Closing Date.
10.1.9 At Closing, Sellers shall have delivered the Management
Agreements executed by Manager.
10.2 Sellers' Conditions. Sellers' obligation to convey the Property at
Closing is expressly conditioned upon the following (unless waived or deemed
waived pursuant to the provisions of this Agreement, or otherwise in a writing
signed by Sellers):
10.2.1 Purchaser's warranties and representations set forth in
Article 6 herein shall be true and correct in all material respects as of the
date of Closing. Purchaser shall have performed in all material respects all
covenants required to be performed by it under this Agreement at or prior to the
applicable Closing Date and Purchaser shall not have breached in any material
respect any covenants that prevent Sellers from fulfilling their obligations
under this Agreement. Purchaser shall have executed and delivered all documents
and instruments required to be executed and delivered by it under this Agreement
at the Closing
10.2.2 Lender shall have given Lender's Consent.
10.2.3 At Closing, Purchaser shall have executed and delivered a
property management agreement with respect to each Project (collectively, the
"Management Agreements") in the form annexed hereto as Exhibit 10.2.3 between
Purchaser and PMI Retail Property Management Corp. ("Manager").
10.2.4 Subject to Section 2.4, the closings under the CPR Agreement
and the CPR Agreement shall occur simultaneously with the Closing hereunder.
10.2.5 At Closing, Purchaser shall have paid the balance of the
Purchase Price (as adjusted pursuant to the terms of this Agreement).
11. CLOSING AND ESCROW.
11.1 Escrow Instructions. Upon execution of this Agreement, the parties
shall deliver an executed counterpart of this Agreement to the Title Company to
serve as the instructions to the Title Company as the escrow holder for
consummation of the transaction contemplated herein. Sellers and Purchaser agree
to execute such additional and supplementary escrow
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 35
instructions as may be appropriate to enable the Title Company to comply with
the terms of this Agreement; provided, however that in the event of any conflict
between the provisions of this Agreement and any supplementary escrow
instructions, the terms of the Agreement shall prevail.
11.2 Sellers' Deliveries. Sellers shall deliver, either at the Closing or
by making available at the Property, as appropriate, the following original
documents, each executed and, if required, acknowledged:
11.2.1 A Deed of Purchase and Sale dated as of the date of delivery,
conveying each Parcel and the Improvements located thereon to Purchaser, subject
only to the Permitted Encumbrances, the form of which shall be agreed upon by
the parties prior to the Approval Date (collectively, the "Deed of Purchase and
Sale").
11.2.2 A ▇▇▇▇ of Sale in the form attached hereto as Exhibit 11.2.2
conveying the Personal Property.
11.2.3 (i) The Leases described in Section 2.1.5 which are still in
effect as of Closing and any new Leases entered into pursuant to Section 5.4;
(ii) a current listing of any tenant Security Deposits and prepaid rents held by
Sellers with respect to the Property; and (iii) an assignment of such Leases,
Security Deposits, and prepaid rents by way of an Assignment and Assumption of
Leases agreement in the form attached hereto as Exhibit 11.2.3.
11.2.4 An assignment of all Service Contracts which Purchaser has
not elected to terminate and all Permits and Warranties to Purchaser by way of
an Assignment and Assumption of Contracts, Permits and Warranties agreement, in
the form attached hereto as Exhibit 11.2.4.
11.2.5 Limited partnership authorizations in form reasonably
satisfactory to the Title Company authorizing the transactions contemplated by
this Agreement.
11.2.6 Letters notifying tenants of the conveyance of the Property
in the form attached hereto as Exhibit 11.2.7.
11.2.7 An affidavit and certificate as to parties in possession and
debts and liens in a form reasonably required by the Title Company and
reasonably acceptable to Seller.
11.2.8 All keys to all Improvements, combinations to any safes
thereon, passwords for all computers thereon and any security devices therein in
such Seller's possession.
11.2.9 All Plans, Tenant correspondence, and other Tenant files.
11.2.10 All Loan Documents relating to any Existing Financing
assumed by Purchaser.
11.2.11 All estoppel certificates referred to in Section 10.1.2 in
the forms required and permitted in said Sections.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
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11.2.12 An assignment of Sellers' right, title and interest in and
to all reserves, deposits and escrow for which Sellers have received the Reserve
Reimbursement.
11.2.13 An assignment of Sellers' right, title and interest in and
to the interest rate caps purchased by the Sellers with respect to the Existing
Financing.
11.2.14 The Holdback Escrow Agreement.
11.2.15 The Management Agreements executed by Manager.
11.2.16 Such other instruments as may be reasonably requested by
Lender or Servicer in connection with Purchaser's assumption of any Existing
Financing, so long as such instruments do not impose any liability on Sellers or
their respective partners.
11.2.17 A "non-foreign person certification" from each Seller in the
form required by Section 1445 of the Internal Revenue Code of 1986, as amended
from time to time.
11.2.18 Such other instruments, affidavits, and tax returns and
certificates as are customarily executed by the seller of an interest in
property in connection with the recording of a deed to land in the Commonwealth
of Puerto Rico.
11.3 Purchaser's Deliveries. At the Closing, Purchaser shall execute,
acknowledge and/or deliver, as applicable, the following:
11.3.1 The Purchase Price.
11.3.2 The documents referred to in Sections 11.2.3(iii), 11.2.4,
11.2.14, and 11.2.15.
11.3.3 A corporate authorization in a form reasonably satisfactory
to the Title Company authorizing the transactions contemplated by this
Agreement.
11.3.4 All documents reasonably required by Lender or Servicer in
connection with the transfer of the Property to the Purchaser, and the
assumption of the obligations under the Loan Documents, so long as such
documents do not increase the financial or other material obligations or
liabilities of the borrowers thereunder.
11.3.5 Such other instruments, affidavits and certificates as are
customarily executed by the purchaser of an interest in property in connection
with the recording of a deed to land in the Commonwealth of Puerto Rico.
11.4 Possession. Purchaser shall be entitled to possession of the Property
upon conclusion of the Closing subject to the rights of Tenants under the
Leases.
11.5 Insurance. Sellers shall terminate their policies of insurance as of
noon on the Closing Date, and Purchaser shall be responsible for obtaining its
own insurance thereafter.
11.6 Notice Letters. At Closing, Sellers shall provide to Purchaser
letters from Sellers to the parties to the Service Contracts and utility
companies serving the Projects, advising them
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 37
to direct to Purchaser all bills for the services provided to the Property on
and after the Closing Date. Sellers shall be entitled to the return of any
deposit(s) posted prior to the Closing with any utility company.
12. DEFAULT; FAILURE OF CONDITION.
12.1 Purchaser Default. If Purchaser shall become in material breach of or
material default under this Agreement and the breach or default continues beyond
the expiration of the cure period, if any, provided in Section 13.7 hereof, the
Deposit shall be retained by Sellers as liquidated damages, and all parties
shall be relieved of and released from any further liability hereunder except
for the Surviving Obligations. Sellers and Purchaser agree that the Deposit is a
fair and reasonable amount to be retained by Sellers as agreed and liquidated
damages in light of Sellers' removal of the Property from the market and the
costs incurred by Sellers and shall not constitute a penalty or a forfeiture.
12.2 Seller Default. If Sellers shall refuse or fail to convey the
Property as herein provided for any reason other than (a) a default by Purchaser
and the expiration of the cure period, if any, provided under Section 13.7
hereof, (b) the existence of a Pending Default (as defined in and contemplated
by Section 13.7), or (c) any other provision of this Agreement which permits
Sellers to terminate this Agreement or otherwise relieves Sellers of the
obligation to convey the Property, Purchaser shall elect as its sole and
exclusive remedy hereunder either to (i) terminate the Agreement and recover the
Deposit; or (ii) enforce Sellers' obligations under this Agreement by filing
suit within thirty (30) days of Sellers' default, provided that no such action
in specific performance shall seek to require Sellers to do any of the
following: (1)change the condition of any of the Projects or restore the same
after any fire or other casualty; (2) subject to Section 12.3, below, expend
money or post a bond to remove a title encumbrance or defect (other than an
Consensual Lien that Sellers are required to cure) or correct any matter shown
on a survey of any of the Projects; or (3) secure any permit, approval, or
consent with respect to the Property or Sellers' conveyance of the Property. In
the event of Sellers' willful refusal to close this transaction or in the event
specific performance is not available as the result of Sellers' willful default
under this Agreement, then Sellers shall reimburse Purchaser on demand for all
commercially reasonable third-party out-of-pocket expenses incurred by Purchaser
in connection with the transactions contemplated by this Agreement (including,
without limitation, any costs of survey, title, environmental or physical
inspections and attorneys' fees) and such reimbursement obligation shall survive
termination of this Agreement. In the event that specific performance is not
available because Sellers have conveyed the Property to a third party, then, in
addition to receiving the Deposit and reimbursement of Purchaser's commercially
reasonable third-party out-of-pocket expenses as aforesaid, Purchaser shall also
be entitled to liquidated damages in the amount of $8,341,178.00. Sellers and
Purchaser each acknowledge that this liquidated damages provision is neither
unconscionable, nor a penalty. Sellers expressly waive any defense that they may
have to the enforcement of this provision on the ground that it represents a
penalty or is excessive or disproportionate to, or an unreasonable estimate of,
Purchaser's damages. Purchaser waives any right to receive any other amounts as
damages as a result of Sellers' refusal or failure to convey the Property.
12.3 New Defects. If, prior to Closing, Purchaser or any Seller discovers
that: (i) title to any Project is subject to defects, limitations or
encumbrances not shown on the Title Commitments or the Updated Surveys and/or
(ii) there is a violation of any Law at any Projects which arose after the
Approval Date (each a "New Defect" and collectively, the "New Defects"),
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 38
then the party who discovered the New Defect shall give the other party on or
before the date which is five (5) business days after its discovery (the "New
Defect Notice Date"), written notice of the New Defect (each a "New Defect
Notice"). In such event, Sellers or Purchaser may elect to postpone the Closing
for up to thirty (30) days in order to provide Sellers with an opportunity to
cure such New Defect. The parties acknowledge and agree that no Seller shall
have any obligation to cure any New Defect unless such New Defect is a
Consensual Lien. Sellers shall give Purchaser written notice (the "Election to
Cure") of whether it intends to cure such New Defect on or before the date which
is five (5) business days after receipt (or delivery) of the New Defect Notice
(the "Cure Election Deadline"). If Sellers fail to deliver the Election to Cure
by the Cure Election Deadline, then Sellers shall be deemed to have elected not
to cure the New Defect. In the event that Sellers fail to cure, elect not to
cure or are deemed to have elected not to cure such New Defect, then Purchaser
shall have the right to elect on or before the date which is five (5) business
days following the Cure Election Deadline (the "New Defect Termination Date") to
terminate this Agreement (which election may be made in Purchaser's sole and
absolute discretion). In the event that Purchaser delivers written notice to
Sellers of its election to terminate on or before the New Defect Termination
Date, then this Agreement shall be deemed terminated as of the date of such
notice and the Deposit shall be returned to Purchaser, whereupon neither the
Sellers nor the Purchaser shall have any further liability to the other
hereunder, except for Surviving Obligations hereunder. In the event that Sellers
fail to cure, elect not to cure or are deemed to have elected not to cure such
New Defect and Purchaser fails to make an election to terminate on or before the
New Defect Termination Date, then all the matters set forth in a New Defect
Notice shall be deemed to be Permitted Encumbrances. The parties agree that the
provisions of this Section 12.3 are not intended to supercede any rights and
remedies Purchaser may have in the event that Sellers breach the covenants set
forth in Section 5.5.
13. MISCELLANEOUS.
13.1 Entire Agreement. This Agreement, together with the Exhibits attached
hereto, all of which are incorporated by reference, is the entire agreement
between the parties with respect to the subject matter hereof, and no
alteration, modification or interpretation hereof shall be binding unless in
writing and signed by both parties.
13.2 Severability. If any provision of this Agreement or application to
any party or circumstances shall be determined by any court of competent
jurisdiction to be invalid and unenforceable to any extent, the remainder of
this Agreement or the application of such provision to such person or
circumstances, other than those as to which it is so determined invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
valid and shall be enforced to the fullest extent permitted by law.
13.3 Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO RULES
RELATING TO THE CONFLICTS OF LAWS.
13.4 Jurisdiction. Any legal action or proceeding with respect to this
Agreement may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York and the appellate courts
of any thereof, and by execution and delivery of this Agreement, each party to
this Agreement hereby accepts, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each party to this Agreement hereby expressly and
irrevocably submits the person of such party to this Agreement to the in
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 39
personam jurisdiction of the foregoing courts in any suit, action or proceeding
arising, directly or indirectly, out of or relating to this Agreement. To the
extent permitted under applicable law, this consent to personal jurisdiction
shall be self-operative and no further instrument or action, other than service
of process in one of the manners specified in this Agreement or as otherwise
permitted by law, shall be necessary in order to confer jurisdiction upon the
person of such party to this Agreement in any such court. To the fullest extent
permitted under applicable law, each party to this Agreement irrevocably waives
and agrees not to assert, by way of motion, as a defense or otherwise, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court referred to in this
Section 13.4, any claim that any such suit, action or proceeding has been
brought in an inconvenient forum, any claim that it is not personally subject to
the jurisdiction of any such court or that this Agreement or the subject matter
hereof may not be enforced in or by such court.
13.5 Assignability. Purchaser shall have the right to assign this
Agreement and all of its rights under this Agreement to an entity ("Permitted
Assignee") in which Purchaser directly or indirectly owns at least ten percent
(10%) of the interests and the balance of such interests are owned by one or
more joint venture partners of institutional quality, including, but not limited
to, Macquarie-DDR Trust, an Australian Listed Property Trust, or to one or more
newly formed and validly existing wholly-owned subsidiaries of Purchaser (or the
Permitted Assignee) upon five (5) days prior written notice to Sellers.
Purchaser shall use reasonable efforts to minimize any delay such assignment may
cause in connection with obtaining Lender's Consent. Except for the foregoing,
Purchaser shall not assign this Agreement. Any assignment in contravention of
this provision shall be void. No assignment shall release the Purchaser herein
named from any obligation or liability under this Agreement. Any assignee shall
be deemed to have made any and all representations and warranties made by
Purchaser hereunder, as if the assignee were the original signatory hereto.
13.6 Successors Bound. This Agreement shall be binding upon and inure to
the benefit of Purchaser and Sellers and their respective successors and
permitted assigns.
13.7 Breach. Should either party be in breach of or default under or
otherwise fail to comply with any of the terms of this Agreement, except as
otherwise provided in this Agreement, the complying party shall have the option
to terminate this Agreement upon ten (10) days written notice to the other party
of the alleged breach, default or failure unless such defaulting party cures
such breach, default or failure within such ten (10) day period. The
non-defaulting party shall promptly notify the defaulting party in writing of
any such alleged breach, default or failure upon obtaining knowledge thereof.
The Closing Date shall be extended to the extent necessary to afford the
defaulting party the full ten-day period within which to cure such breach,
default or failure; provided, however, that the failure or refusal by a party to
perform on the Closing Date (except in respect of a Pending Default by the other
party) shall be deemed to be an immediate default without the necessity of
notice; and provided further, that if the Closing Date shall have been once
extended as a result of default by a party, such party shall be not be entitled
to any further notice or cure rights with respect to that or any other default.
For purposes of this Section 13.7, a "Pending Default" shall be a default for
which (i) written notice was given by the non-defaulting party, and (ii) the
cure period extends beyond the scheduled Closing Date.
13.8 Captions. The captions in this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit or describe
the scope of this Agreement or the scope or content of any of it provisions.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 40
13.9 No Partnership. Nothing contained in this Agreement shall be
construed to create a partnership or joint venture between the parties or their
successors in interest.
13.10 Counterparts. This Agreement may be executed and delivered in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original and all of which shall constitute one and the same instrument.
13.11 Recordation. Purchaser and Sellers agree not to record this
Agreement or any memorandum hereof.
13.12 Submission of Agreement. The submission by Sellers to Purchaser of
this Agreement shall have no binding force and effect, shall not constitute an
option, and shall not confer any rights upon Purchaser or impose any obligations
upon Sellers irrespective of any reliance thereon, change of position or partial
performance. The submission by Sellers of this Agreement for execution by
Purchaser and the actual execution and delivery thereof by Purchaser to Sellers
shall similarly have no binding force and effect on Sellers unless and until
Sellers shall have executed this Agreement and the Deposit shall have been
received by the Title Company and a counterpart thereof shall have been
delivered to Purchaser.
13.13 Tax Protest. If, as a result of any tax protest or otherwise, any
refund is paid or reduction of any real property or other tax or assessment is
made available relating to the Property with respect to any period for which,
under the terms of this Agreement, Sellers are responsible, Sellers shall be
entitled to receive or retain such refund or the benefit of such reduction, less
the equitable prorated costs of collection and any amounts which are required to
be refunded to Tenants pursuant to Leases.
13.14 Indemnification, Survival and Limitation; Sellers' Knowledge.
13.14.1 Sellers shall, indemnify, defend and hold harmless Purchaser
and the Permitted Assignees and their respective officers, directors, employees,
agents and representatives (collectively, the "Purchaser Indemnitees"), from and
against any and all actions, proceedings, costs, damages (excluding
consequential and other indirect damages), claims, losses, liabilities (absolute
and contingent), fines, penalties, payments, costs and expenses (including
reasonable counsel fees, interest, penalties and disbursements) (collectively,
"Losses"), that may be asserted against or suffered or incurred by Purchaser
Indemnitees during the period commencing on the Closing Date and ending on the
day immediately preceding the first anniversary of the Closing Date (the
"Survival Period") arising out of, or relating to, (a) the Property with respect
to any period prior to the Closing Date, except to the extent specifically
assumed by Purchaser herein, (B) all Taxes relating to any period prior to the
Closing (other than taxes and special assessments which are prorated pursuant to
Section 7.4, transfer or recording taxes which are apportioned pursuant to
Sections 7.1 and 7.2 and any Taxes which are the obligation of any Tenant to
pay), (c) all liabilities and obligations relating to the Property which arose
prior to the Closing Date which are not assigned to and assumed by Purchaser at
Closing (excluding any liabilities or obligations which are apportioned herein
and any liabilities or obligations for which any Tenant is obligated), and/or
(d) all liabilities and obligations of Sellers which are not related to the
Property.
13.14.2 Sellers shall, indemnify, defend and hold harmless Purchaser
Indemnitees, from and against any and all Losses, that may be asserted against
or suffered or incurred by Purchaser Indemnitees during the Survival Period
arising out of, or relating to, a
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
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breach of any representation or warranty, covenant or agreement by Sellers made
in this Agreement or any document or instrument delivered pursuant hereto.
13.14.3 12.6 Purchaser Indemnitees shall give prompt written
notification of any claim for Losses to Sellers, provided, however, written
notification of any claim for Losses must be received by Sellers on or before
the expiration of the Survival Period or such claim shall be forever barred and
Sellers shall have no liability with respect thereto.
13.14.4 Notwithstanding anything contained in this Section 13.14 to
the contrary, to the extent any Tenant under a Lease certifies in its estoppel
certificate as to any of the matters which are contained in the representations
and warranties in Section 6.1 of this Agreement, then in the event of any Losses
with respect to such representations and warranties Purchaser covenants that it
will first use commercially reasonable efforts (provided that Purchaser shall
not be required to pursue legal action) to obtain payment of such Losses from
such Tenant before its seeks to recover from Sellers pursuant to the
indemnification under Section 13.14 of this Agreement. In the event that Sellers
receive a notice of a potential claim for Losses against a Tenant on or before
the expiration of the Survival Period, then this notice shall satisfy the
requirements of Section 13.14.3 of this Agreement and the notice requirements
under the Holdback Escrow Agreement and the Escrow Agent shall retain the
amounts required under the Escrow Agreement pending resolution of such Losses.
If such Losses are paid from the amounts held in escrow pursuant to the Holdback
Escrow Agreement, then, upon the request of Sellers, Purchaser shall, at
Sellers' expense, commence litigation against such Tenant with respect to such
Losses using counsel selected by Sellers and continue such litigation as
directed by Sellers; provided, in no event shall Purchaser be obligated to evict
any Tenant or terminate any Tenant's Lease.
13.14.5 If Purchaser discovers (or a Seller discloses) on or prior
to the Closing Date that any of Sellers' representations and warranties in this
Agreement are untrue or incorrect, Purchaser's sole rights and remedies shall be
as set forth in Sections 6.4 and 10.1.2.
13.14.6 The aggregate liability of Sellers for any indemnification
obligations under this Section 13.14 shall not exceed $3,183,558.84 ("Maximum
Indemnification Amount") and recovery of actual Losses up to that amount is
Purchaser's sole and exclusive remedy hereunder provided, however, Sellers shall
have no liability to Purchaser for matters disclosed by Sellers to Purchaser or
discovered by Purchaser prior to Closing.
13.14.7 Whenever a representation or warranty is made in this
Agreement on the basis of the knowledge of Sellers, such representation and
warranty is made solely on the basis of the actual knowledge without inquiry or
investigation of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
and/or ▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "Knowledge Parties"). Purchaser
acknowledges that the Knowledge Parties are named herein solely for the purpose
of defining the scope of the Sellers' knowledge and not for the purpose of
imposing any liability upon or creating any duties running from such Knowledge
Parties to Purchaser. Purchaser agrees that it will bring no action of any kind
against such Knowledge Parties related to or arising out of this Agreement.
13.14.8 All indemnity, defense and/or hold harmless obligations
contained herein shall survive the Closing for the Survival Period. All
indemnity, defense and/or hold harmless obligations of Sellers in favor of
Purchaser shall run to, and be for the benefit of, any Permitted Assignee(s) of
Purchaser.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
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13.14.9 In order to secure the payment by the Sellers of any Losses
pursuant to this Section 13.14, the Sellers shall deposit into escrow with the
Title Company an amount equal to the Maximum Indemnification Amount to be held
and disbursed pursuant to an escrow agreement (the "Holdback Escrow Agreement")
in the form annexed hereto as Exhibit 13.14.9.
13.14.10 Sellers' indemnification obligations set forth in this
Section 13.14 shall run to, and be for the benefit of, the Permitted
Assignee(s).
13.15 No Processing. Without Sellers' prior written consent, until the
Closing, Purchaser shall not make any application to any governmental agency for
any permit, approval, license or other entitlement for the Property or the use
or development thereof, or have any communications with any governmental agency
or official relating to the condition (environmental or otherwise) of the
Property, except that Purchaser (or the Title Company or Purchaser's retained
consultants on Purchaser's behalf) shall have the right to communicate with
governmental agencies or officials in connection with (a) the preparation of the
Title Commitments, Title Policies and Updated Surveys and the delivery of copies
of all items shown as exceptions to title therein; (b) tax searches; (c)
searches to determine whether there are any violations of any laws, rules or
regulations applicable to the Property; and (d) preparation of any Phase I
environmental report relating to the Property.
13.16 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday for national banks in New York, New York, in
which event the period shall run until the end of the next day which is neither
a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. New York, New York time.
13.17 Section 1031 Exchange. Either party may consummate the purchase or
sale (as applicable) of all or any of the Projects as part of a so-called like
kind exchange (an "Exchange") pursuant to Section 1031 of the Code, provided
that: (a) the Closing shall not be delayed or affected by reason of the Exchange
nor shall the consummation or accomplishment of an Exchange be a condition
precedent or condition subsequent to the exchanging party's obligations under
this Agreement, (b) the exchanging party shall effect its Exchange through an
assignment of this Agreement, or its rights under this Agreement, to a qualified
intermediary, (c) neither party shall be required to take an assignment of the
purchase agreement for the relinquished or replacement property or be required
to acquire or hold title to any real property for purposes of consummating an
Exchange desired by the other party; and (d) the exchanging party shall pay any
additional costs that would not otherwise have been incurred by the
non-exchanging party had the exchanging party not consummated the transaction
through an Exchange. Neither party shall by this Agreement or acquiescence to an
Exchange desired by the other party have its rights under this Agreement
affected or diminished in any manner or be responsible for compliance with or be
deemed to have warranted to the exchanging party that its Exchange in fact
complies with Section 1031 of the Code.
13.18 Arbitration. Any matter arising pursuant to any provision hereunder
which specifies that such matter shall be resolved by arbitration shall be
submitted to arbitration in accordance with the provisions of this Section
13.18. The party having the right to submit a matter to arbitration and
exercising its right to do so shall have the right to request an arbitration
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 43
which shall be conducted in accordance with the Rules of Arbitration of the
American Arbitration Association for a single arbitrator arbitration (the
"Rules") in New York, New York, or at such other location as may be agreed
between the parties. The arbitration shall be conducted by a single arbitrator
chosen in accordance with such Rules, provided that such arbitrator shall be a
person having at least ten (10) years experience in real estate. The
determination of the arbitrator shall be made within thirty (30) days following
the appointment of such arbitrator and shall be conclusive and binding upon the
parties and judgment upon the same may be entered in any court having
jurisdiction thereof. Each party shall pay the fees and expenses of the
arbitrator as determined by the arbitrator. The provisions of this Section 13.18
shall survive the Closing.
13.19 Limitation of Liability.
13.19.1 Purchaser hereby acknowledges and agrees that in no event
shall any partner of any Seller ever be liable to Purchaser as a result of a
breach of this Agreement, and Purchaser agrees to look solely to (a) Sellers for
satisfaction of any claim, loss or damage in the event the Closing does not
occur or (b) the Maximum Indemnification Amount then held pursuant to the
Holdback Escrow Agreement for satisfaction of any claim, loss or damage in the
event the Closing occurs.
13.19.2 In no event shall Sellers or any direct or indirect partner,
member, shareholder, owner or affiliate thereof, any officer, member, director,
employee or agent of any of the foregoing or any affiliate or controlling person
thereof be liable to Purchaser in contract, tort or otherwise with respect to
any indirect, consequential, special, exemplary or incidental damages arising
from or relating to this Agreement or any Closing document. In no event will
Purchaser or any direct or indirect partner, member, shareholder, owner or
affiliate thereof, any officer, member, director, employee or agent of any of
the foregoing or any affiliate or controlling person thereof be liable to any
Seller in contract, tort or otherwise with respect to any indirect,
consequential, special, exemplary or incidental damages arising from or relating
to this Agreement or any Closing document.
13.20 Delivery of Financial Statements. Seller agrees that
PricewaterhouseCoopers LLP ("PWC") may review, before or after Closing, the
Project Financial Statements of Sellers and provide to Purchaser, at Purchaser's
expense, such other financial statements and related information as may be
required to be included in public filings made by Purchaser, at the times
required by, and to the extent required by, applicable securities laws or rules
or policies of the NYSE or, as reasonably determined by Purchaser to be
advisable in connection with an offering of its securities, including without
limitation, the so-called "3-14 Review" as of September 30, 2004. Sellers shall
provide to Purchaser or PWC such information in order for PWC to complete its
3-14 Review, which may be completed by December 31, 2004, at the Purchaser's
option. In addition, Sellers shall execute and deliver a Letter of
Representation to PWC in connection with the 3-14 Review in a form attached here
to as Exhibit 14.20. "Project Financial Statements" means, with respect to the
Projects, (i) revenue and expense detail for all Projects prepared on the
accrual basis of accounting identified to be audited by PWC for the period ended
September 30, 2004, and (ii) revenue and expense detail for all Projects with
appropriate accrual basis adjustments as deemed necessary by PWC for the periods
ended September 30, 2004. In addition, the Seller is to deliver to the Purchaser
the audited statements prepared for each Project for the year ended December
31,2004, once complete.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 44
13.21 Time of the Essence. Time is of the essence with respect to Sellers'
and Purchaser's obligations to close on the Closing Date; provided such Closing
Date may be extended pursuant to Sections 2.4.2,4.2.2, 6.4,8.1,10.1.5, 12.3 and
13.7 hereof.
13.22 Reassignment of Interest Rate Cap. Purchaser acknowledges that
Sellers purchased a five (5) year interest rate cap ("Five Year Cap") with
respect to a $35,000,000 portion of the Existing Mortgage Loan, which cap will
be assigned to Purchaser at Closing. In the event that Purchaser pays off the
Existing Mortgage Loan, Purchaser agrees to reassign the Five Year Cap to
Sellers promptly after such refinancing.
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
PAGE 45
IN WITNESS WHEREOF, Purchaser and Sellers have executed this Agreement on
the date set forth below, effective as of the Effective Date.
SELLERS
MPR DEL NORTE LP, S.E. a Delaware
limited partnership
By MPR Del Norte GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
MPR ▇▇▇▇▇▇▇ ▇▇, S.E. a Delaware limited
partnership
By MPR ▇▇▇▇▇▇▇ ▇▇ Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
MPR DEL OESTE LP, S.E. a Delaware
limited partnership
By MPR Del Oeste GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
MPR ▇▇▇▇ BAJA LP, S.E. a Delaware
limited partnership
By MPR ▇▇▇▇ Baja GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
MPR GUYAMA LP, S.E. a Delaware
limited partnership
By MPR Guyama GP Inc., S.E., its
general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO
PURCHASER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
By:_________________________________
Name:
Title:
PURCHASE AND SALE AGREEMENT
MPR PROPERTY
MPR GUYAMA LP, S.E. a Delaware
limited partnership
By MPR Guyama GP Inc., S.E., its
general partner
By:_________________________________
Name:
Title:
PURCHASER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an ohio corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SENIOR VICE PRESIDENT
An original, fully executed copy of this Agreement, together with the
Deposit, has been received by the Title Company this 2nd day of November, 2004,
and by execution hereof the Title Company hereby covenants and agrees to be
bound by the terms of this Agreement.
TITLE INSURANCE COMPANY
COMMONWEALTIH LAND TITLE INSURANCE
COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
JOINDER
The undersigned joins into this Agreement for the sole purpose of: (i) agreeing
to the provisions of Section 6.3 above, and (ii) releasing Sellers from any
claim for commission or other compensation relating to the Agreement or the
transactions contemplated thereby whether the transaction closes or not.
TRANSWESTERN COMMERCIAL SERVICES
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Vice Chairman
PURCHASE AND SALE AGREEMENT
MPR PROPERTY