Exhibit 10.72
AGREEMENT OF PURCHASE AND SALE
Between
NEW CASTLE ASSOCIATES
("Seller"),
and
CHRISTIANA MALL, LLC
("Buyer"),
March 7, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I Defined Terms...........................................................................................2
1.1 Certain Defined Terms.......................................................................2
ARTICLE II Purchase and Sale of Property Assets and Interests....................................................10
2.1 Sale of Property Assets....................................................................10
2.2 Purchase Price.............................................................................12
ARTICLE III Deposits, Assumption of Liabilities; Adjustments and Prorations......................................12
3.1 Deposits...................................................................................12
3.2 Assumption of Liabilities..................................................................14
3.3 Debt Restructure...........................................................................15
3.4 Adjustments and Prorations.................................................................15
ARTICLE IV Failure to Close......................................................................................15
4.1 Buyer's Default............................................................................15
4.2 Seller's Default...........................................................................16
4.3 Disposition of Deposit upon Termination and Lack of Satisfaction of Conditions.............17
ARTICLE V Closing; Deliveries at Closing.........................................................................18
5.1 Closing....................................................................................18
5.2 Deliveries to be Made on the Closing Date..................................................18
ARTICLE VI Employment Matters....................................................................................23
6.1 Employees..................................................................................23
6.2 Vesting....................................................................................25
6.3 Indemnity..................................................................................25
6.4 No Third Party Beneficiaries...............................................................26
ARTICLE VII Buyer Inspections....................................................................................26
7.1 Document and Property Inspection..........................................................26
7.2 Feasibility Period.........................................................................27
7.3 Survey Contingency.........................................................................29
7.4 Title Contingency..........................................................................30
7.5 Property Financial Statements..............................................................31
ARTICLE VIII Conditions to Closing...............................................................................31
8.1 Conditions to Obligations of Seller........................................................31
8.2 Conditions to Obligations of Buyer.........................................................33
TABLE OF CONTENTS (CONT.)
ARTICLE IX Maintenance, Improvement and Leasing of the Property..................................................35
9.1 Maintenance and Improvement................................................................35
9.2 Leasing....................................................................................36
9.3 Service and Maintenance Contracts..........................................................38
9.4 Additional Covenants of Seller.............................................................39
9.5 Management Agreements......................................................................40
9.6 Estoppels and Consent and SNDAs............................................................40
9.7 Existing Debt..............................................................................41
ARTICLE X Representations and Warranties of Seller...............................................................41
10.1 Formation and Authority....................................................................41
10.2 No Conflict................................................................................44
10.3 Consents and Approvals.....................................................................44
10.4 Personal Property..........................................................................45
10.5 Litigation.................................................................................45
10.6 Compliance with Laws.......................................................................46
10.7 Taxes......................................................................................46
10.8 Real Property..............................................................................48
10.9 Environmental, Health and Safety Matters...................................................48
10.10 Insurance..................................................................................49
10.11 Material Contracts.........................................................................49
10.12 Rent Roll..................................................................................51
10.13 Knowledge..................................................................................52
10.14 Ownership of Owner Entity..................................................................52
10.15 Employment Matters.........................................................................53
10.16 Limitations on Representations and Warranties..............................................55
10.17 Schedules..................................................................................57
ARTICLE XI Representations and Warranties of Buyer...............................................................57
11.1 Formation and Authority....................................................................57
11.2 No Conflict................................................................................58
11.3 Consents and Approvals.....................................................................58
11.4 Litigation.................................................................................59
11.5 Knowledge of Buyer.........................................................................59
ARTICLE XII Broker...............................................................................................60
ARTICLE XIII Survival; Indemnification...........................................................................60
13.1 Survival of Warranties.....................................................................60
13.2 Indemnification by Seller..................................................................61
13.3 Indemnification by Buyer...................................................................63
13.4 Indemnity - General........................................................................64
13.5 Survival...................................................................................66
ARTICLE XIV Assignment...........................................................................................66
ARTICLE XV Notices...............................................................................................66
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TABLE OF CONTENTS (CONT.)
ARTICLE XVI Expenses.............................................................................................68
ARTICLE XVII Casualty and Condemnation...........................................................................68
17.1 Casualty...................................................................................68
17.2 Condemnation...............................................................................69
17.3 Material Casualty or Condemnation..........................................................69
ARTICLE XVIII Like Kind Exchange.................................................................................70
18.1 Like Kind Exchange.........................................................................70
ARTICLE XIX Miscellaneous........................................................................................71
19.1 Successors and Assigns.....................................................................71
19.2 Gender.....................................................................................71
19.3 Captions...................................................................................72
19.4 Not Construed against Drafter..............................................................72
19.5 Entire Agreement...........................................................................72
19.6 Recording..................................................................................72
19.7 Time of Essence............................................................................73
19.8 Original Document..........................................................................73
19.9 Governing Law..............................................................................73
19.10 Post-Closing Inspection....................................................................73
19.11 Non Compete................................................................................74
19.12 Joint and Several Liability................................................................74
19.13 Other Closings.............................................................................74
19.14 Settlement With Equitable..................................................................76
ARTICLE XX Confidentiality.......................................................................................76
20.1 Confidentiality Agreement..................................................................76
20.2 Public Announcements.......................................................................77
ARTICLE XXI Further Undertakings.................................................................................77
21.1 Further Assurances.........................................................................77
21.2 Sale of Interests..........................................................................78
ARTICLE XXII Equitable Option Agreement..........................................................................78
22.1 Option Agreement Representations...........................................................78
LIST OF EXHIBITS AND SCHEDULES
------------------------------
Exhibits Description
-------- -----------
Exhibit A-1 Description of Seller's Owned Land
Exhibit A-2 Description of Access Parcel
Exhibit A-3 Description of Adjacent Parcel
Exhibit B Assumed Debt Loan Documents
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TABLE OF CONTENTS (CONT.)
Exhibit C Personal Property
Exhibit D Excluded Personal Property
Exhibit E Due Diligence Documents and Information
Exhibit F Intentionally Deleted
Exhibit G Service Contracts
Exhibit H Intentionally Deleted
Exhibit I Permitted Encumbrances
Exhibit J Form of ▇▇▇▇▇ Estoppel
Exhibit K Form of Lender Estoppel and Consent
Exhibit L Intentionally Deleted
Exhibit M Intentionally Deleted
Exhibit N Intentionally Deleted
Exhibit O Intentionally Deleted
Exhibit P Form of Anchor Tenant Estoppels
Exhibit Q Escrow Investment Instructions/Agreement
Schedules Description
--------- -----------
Schedule 3.4 Adjustments and Prorations
Schedule 6.1 Property Employees
Schedule 8.2(a)(iv) Anchors
Schedule 10.1(c) Organizational Documents of Owner Entity
Schedule 10.3(a) Government Consents - Seller
Schedule 10.3(b) Third Party Consents - Seller
Schedule 10.4 Leases of Personal Property to be assigned
Schedule 10.5 Litigation, Bankruptcies
Schedule 10.6 Compliance with Laws
Schedule 10.7(b) All Refunds due to Tenants or
▇▇▇▇▇ parties for prior years
Schedule 10.8(b) Condemnations
Schedule 10.9 Environmental Reports
Schedule 10.10 Insurance in Place
Schedule 10.11(a) Material Contracts - ▇▇▇▇▇▇
Schedule 10.11(b) Material Contracts - Developer Agreements
Schedule 10.11(c) Other Material Contracts
Schedule 10.11(d) Material Contract Exceptions
Schedule 10.12(a) Leases - Rent Roll
Schedule 10.12(c) Claimed Lessor Defaults
Schedule 10.12(d) AAR Report / Notices of Tenant Defaults
Schedule 10.12(f) Security Deposits
Schedule 10.15(b) Pension or Benefit Plan Liabilities
Schedule 10.15(d) Employees Not At Will/Collective Bargaining Agreements
Schedule 11.3(a) Government Consents Required - Buyer
Schedule 11.3(b) Third Party Consents - Buyer
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AGREEMENT OF PURCHASE AND SALE
CHRISTIANA MALL
THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made and entered
into as of the 7th day of March, 2003, (the "Effective Date") by and between NEW
CASTLE ASSOCIATES, a Pennsylvania limited partnership ("Seller"), and CHRISTIANA
MALL, LLC, a Delaware limited liability company ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of approximately 75.07 acres of real
property together with certain buildings and improvements located thereon,
situated in New Castle County, Delaware and forming a part of Christiana Mall,
as more fully described in this Agreement; and
WHEREAS, Seller owns all of the capital stock of CMA Corporation
("Owner Entity"), and Owner Entity is the owner of approximately 10.04 acres of
real property together with certain improvements located thereon situated in New
Castle County, Delaware and forming a part of the Christiana Mall, as more fully
described in the Agreement; and
WHEREAS, Seller desires to sell, convey, transfer and assign to Buyer,
and Buyer desires to purchase and acquire from Seller, all of the Seller's
ownership interests in the Christiana Mall and the Owner Entity pursuant to the
terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Seller and Buyer agree as follows:
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ARTICLE I
DEFINED TERMS
1.1 Certain Defined Terms.
----------------------
As used in this Agreement, the following terms shall have the following
meanings:
"Access Agreement" means the Access Agreement dated February 13, 2003
between the Seller and The ▇▇▇▇▇ Company, an affiliate of Buyer.
"Access Parcel" means the land described on Exhibit A-2.
"Additional Matters Objection" is defined in Section 7.3.
"Adjacent Parcel" means the land described on Exhibit A-3.
"Adjusted Purchase Price" is defined in Section 2.2.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such specified
Person.
"Affiliated Contracts" is defined in Section 19.13(a).
"Agreement" means this Agreement of Purchase and Sale, including,
without limitation, the Schedules and Exhibits hereto, as the same may be
amended pursuant to the terms hereof.
"Anchors" means the Anchor Tenants and the Anchor Department Stores
collectively.
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"Anchor Department Stores" means those department stores that
constitute a part of Christiana Mall and are identified in Schedule 8.2(a)(iv).
"Anchor Tenant" is defined in Section 8.2(a)(iv).
"Ancillary Agreements" means the agreements and documents to be
executed at Closing as specified in this Agreement, including the Loan
Assumption Documents and the documents described in Section 5.2(a)(iii), (iv)
and (v).
"Assumed Debt" means the existing secured mortgage debt on the Property
Assets (other than the Adjacent Parcel), as evidenced and secured by the Assumed
Debt Loan Documents which are listed on Exhibit B, the outstanding balance of
which as of April 1, 2003 will be approximately the amount set forth on Exhibit
B.
"Assumed Debt Loan Documents" means the documents listed on Exhibit B.
"Assumed Property Liabilities" means liabilities arising pursuant to
(a) the Assumed Debt Loan Documents, (b) the Leases, (c) the Permitted
Encumbrances (other than the Assumed Debt Loan Documents), (d) the Assumed
Service Contracts, (e) the Material Contracts and (f) any other obligation,
contract or agreement that Buyer has expressly agreed in writing to assume.
"Assumed Service Contracts" is defined in Section 9.3.
"Business Day" means a day other than a Saturday, Sunday or National
holiday or state holiday in the state in which the Property Assets are located
or in which Closing is to occur.
"Buyer's Deliveries" is defined in Section 5.2(b).
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"Claim" means any claim, demand, suit, action, litigation,
investigation, arbitration, administrative hearing or other proceedings of any
nature.
"Closing" is defined in Section 5.1.
"Closing Date" is defined in Section 5.1.
"Concurrent Contracts" is defined in Section 19.13(a).
"Confidentiality Agreement" means those certain confidentiality
agreements dated May 30, 2002, January 2, 2003 and January 29, 2003 between
Pennsylvania Real Estate Investment Trust ("PREIT") and The ▇▇▇▇▇ Company.
"Contract" means contract, agreement, lease, sublease, purchase or sale
order, license, permit, franchise, instrument, undertaking, commitment and other
binding arrangement.
"▇▇▇▇▇▇" means the documents listed on Schedule 10.11(a).
"Covenants Surviving Termination" means the indemnification or other
obligations of Seller or Buyer that survive the termination of this Agreement as
contained in Section 3.1(a)(iii), Section 7.1 or Article XII or the Access
Agreement.
"Deposit" is defined in Section 3.1.
"Developer Agreements" is defined in Section 10.11(b)
"Due Diligence Expense" mean the reasonable and documented third party
expenses incurred by Buyer with respect to its contemplated acquisition of the
Property Assets, including but not limited to attorneys' fees (including fees
4
and expenses incurred in negotiating this Agreement), engineering fees, title
and survey charges, lender fees, and all other reasonable and documented third
party expenses related to this transaction. In no event shall Due Diligence
Expenses payable hereunder exceed $365,000.
"Effective Date" is defined in the preamble of this Agreement.
"Employment Period" is defined in Section 6.1.
"Encumbrance" means any lien, superlien, security interest, pledge,
right of first refusal, mortgage, covenant, restriction, reservation,
conditional sale, prior assignment or other encumbrance, Claim, burden or charge
of any nature.
"Environmental Law" means any Law relating to pollution or protection
of the environment, health, safety or natural resources from Hazardous
Materials, including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
"Equitable" means The Equitable Life Assurance Society of the United
States acting solely through its Prime Property Fund being advised by Lend Lease
Real Estate Investments, Inc.
"ERISA" is defined in Section 10.15(b).
"ESA" is defined in Section 10.9.
"Exchange Agreement" is defined in Section 18.1.
5
"Exchanges" is defined in Section 18.1.
"Hazardous Materials" means (a) petroleum and petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials and polychlorinated biphenyls and (b) any other chemicals, materials
or substances that are regulated as to disposal, storage, use or quantity or
identified as toxic or hazardous or as a pollutant, contaminant or waste under
any applicable Environmental Law.
"Hired Employees" is defined in Section 6.1.
"Improvements" is defined in Section 2.1(a).
"Interests" is defined in Section 2.1(a).
"Intermediary" or "Intermediaries" is defined in Section 18.1.
"Knowledge of Buyer" means the actual knowledge, without any duty of
investigation or inquiry whatsoever, of ▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge, without any duty of investigation or inquiry whatsoever, of ▇▇▇▇▇▇
▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Land" is defined in Section 2.1(a).
"Law" means any federal, state, local or foreign statute, law
(including common law), ordinance, regulation, rule, code, order, judgment or
decree, and any judicial or administrative interpretation thereof, and any other
requirement or rule of law.
6
"Leases" is defined in Section 2.1(a).
"Lender" shall mean the holder of the Assumed Debt.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any Law or any Contract.
"Loan Assumption Documents" is defined in Section 3.2.
"Losses" of a Person means any and all losses, liabilities, damages,
claims, awards, judgments, costs and expenses (including, without limitation,
reasonable attorneys' fees) actually suffered or incurred by such Person.
"Material Contracts" is defined in Section 10.11.
"Material Loss" is defined in Section 17.3.
"Non-Transferred Employees" is defined in Section 6.1.
"New Leases" is defined in Section 9.2(a).
"Option Agreement" means a certain Option Agreement dated as of June
27, 1988 among Seller, each of its partners, Equitable, and joined in by
Obermayer, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hippel and Blank, Rome, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇.
"Option Representations" is defined in Section 22.1.
"Owner Entity" is defined in the Recitals.
7
"Permitted Encumbrances" means those items listed on Exhibit I (except
those marked "Remove"), plus (a) inchoate mechanic, construction and materialmen
liens for completed construction or construction in progress not contracted for
by Owner Entity or Seller or their respective Affiliates; (b) all Leases and New
Leases and leases not listed on the rent roll attached as Schedule 10.12(a) but
executed before the Effective Date of this Agreement and previously disclosed to
Buyer; (c) building restrictions and zoning and other regulations, resolutions
and ordinances and any amendments thereto in effect on the date of this
Agreement or hereafter adopted; (d) any state of facts that a survey would show
(other than matters covered by an Additional Matters Objection); (e) liens for
any unpaid real estate tax, water charge, sewer rent and assessment, provided
the same are adjusted at the Closing; (f) liens or encumbrances encumbering the
Real Property (other than the Assumed Debt Loan Documents) as to which Seller
shall deliver to either Buyer, or to the Title Company, at or prior to the
Closing, proper instruments, in recordable form, canceling such liens or
encumbrances, together with any other instruments necessary thereto and the cost
of recording and canceling the same, or causing the Title Company to insure over
such lien or encumbrance (but only if the Title Company insures over such lien
or encumbrance at no expense to Buyer and only if Buyer agrees to accept the
same in Buyer's commercially reasonable discretion); (g) any matter that is the
responsibility of any tenant under any Lease of the Real Property but only if
limited to such tenant's leasehold interest and does not affect the interest of
Seller; (h) any matter that is the responsibility of any party (other than
Seller or Owner Entity, which responsibility of Seller or Owner Entity shall be
fully complied with as of Closing and insured as such by Title Company) to any
reciprocal easement agreement affecting the Real Property; (i) all ▇▇▇▇▇▇
described in Schedule 10.11(a), and (j) matters created by or with the written
consent of Buyer.
8
"Person" means any individual, partnership, firm, corporation, limited
liability company, association, trust, unincorporated organization or other
entity, any governmental authority, and any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
"Personal Property" is defined in Section 2.1(a).
"Property Assets" is defined in Section 2.1(b).
"Property Employees" is defined in Section 6.1.
"Purchase Price" is defined in Section 2.2.
"Real Property" means the Land and Improvements together.
"Rent Roll" is defined in Section 10.12(a).
"Seller's Deliveries" is defined in Section 5.2(a).
"Service Contracts" is defined in Section 9.3.
"Substitute Agreement" is defined in Section 22.1.
"Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind whatsoever (together with any
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any federal, state, local or foreign governmental or
taxing authority, including, without limitation, taxes or other charges on or
with respect to income, franchises, windfall or other profits, gross receipts,
9
occupancy, personal property, intangible property, sales, use, capital stock,
payroll, employment, social security, workers' compensation, unemployment
compensation, or net worth; taxes or other charges in the nature of excise,
withholding, ad valorem, stamp, transfer, value added, or gains taxes; license,
registration and documentation fees; and customs duties, tariffs and similar
charges; and any deficiency, interest or penalty imposed with respect to any of
the foregoing.
"Tax Return" means any return, form or other report required to be
filed with respect to Taxes, including any declaration of estimated tax and
information return.
"Threshold Amount" is defined in Section 13.2(b).
"Title Company" means Chicago Title Insurance Company.
"Venture Contracts" is defined in Section 19.13(a).
ARTICLE II
PURCHASE AND SALE OF PROPERTY ASSETS AND
INTERESTS
2.1 Sale of Property Assets.
------------------------
(a) At Closing, subject to the provisions hereof, Seller hereby agrees
to sell, convey, transfer, assign and deliver to Buyer, free and clear of
Encumbrances (other than Permitted Encumbrances), and Buyer hereby agrees to
acquire and purchase from Seller the following: (i) all of Seller's right, title
and interest in and to: (A) the fee interest in the land described in Exhibits
A-1 and A-3 (the land described on both Exhibits A-1 and A-3 are together, the
"Land"), (B) all buildings and other improvements located on the Land
10
(collectively, the "Improvements"), and (C) one hundred percent (100%) of the
capital stock in the Owner Entity (the "Interests"); (ii) to the extent in
effect at Closing, all presently existing tenant leases listed on Schedule
10.12(a) together with all New Leases as defined in Section 9.2(a) hereof
(collectively the "Leases" and individually a "Lease"), together with all
amounts payable thereunder with respect to periods from and after Closing and
security deposits, (iii) all licenses, parking and other occupancy agreements
relating to the Improvements that are Permitted Encumbrances, (iv) all
easements, if any, benefiting the Land or any part of the Real Property and all
rights and appurtenances pertaining thereto; (v) all fixtures, equipment, and
other personal property (both tangible and intangible), owned or leased
(directly or indirectly) by the Seller as of the Effective Date, located on or
in the Improvements and exclusively used for the operation of the Real Property,
and specifically including the items listed on Exhibit C (the "Personal
Property"); provided that the Personal Property shall not include the items
listed on Exhibit D and the interest in any leased personal property shall be
transferred only if permitted by the lessor thereof; (vi) the name "Christiana
Mall" and all trademarks associated with such name; and (vii) all other property
and property rights (both tangible and intangible), if any, used in connection
with the operation of the Real Property owned by the Seller (directly or
indirectly) as of the Effective Date and related to the Real Property including
without limitation, (A) water and other riparian rights, (B) air rights, (C)
development rights, (D) permits, licenses and other governmental approvals, (E)
casualty insurance or condemnation proceeds as set forth in Section 17.1 and
17.2 hereof, and (F) real estate records and tenant files located at the Real
Property (including sepias, drawings, surveys, plans and specifications), and
all licenses, permits, certificates of occupancy to the extent the foregoing are
not excluded by Exhibit D. Seller agrees to cooperate with Buyer's reasonable
requests after Closing to produce other real estate records not located at the
Real Property but that are in Seller's possession or control.
11
(b) All of the properties and things described in this Section 2.1 to
be transferred and sold to Buyer are sometimes referred to herein collectively
as the "Property Assets".
2.2 Purchase Price.
---------------
In consideration of the Property Assets to be sold to Buyer as
described herein, Buyer agrees to pay to Seller at Closing, in cash or other
immediately available funds, the purchase price (the "Purchase Price") of
Forty-Four Million Dollars ($44,000,000), subject to further adjustments
pursuant to Sections 3.3, 3.4 and 9.2(b) of this Agreement or as elsewhere
expressly provided in this Agreement. Buyer shall also assume the amount of the
Assumed Debt outstanding as of the Closing Date, subject to all of the terms of
the Assumed Debt Loan Documents. The Purchase Price as adjusted for all of the
foregoing or as elsewhere expressly provided in this Agreement shall be the
"Adjusted Purchase Price".
ARTICLE III
DEPOSITS, ASSUMPTION OF LIABILITIES; ADJUSTMENTS AND PRORATIONS
3.1 Deposits.
---------
(a) On the Effective Date, Buyer shall deposit with the Title Company
the sum of $725,000 referred to hereinafter as the "Deposit." Title Company
shall hold and/or apply the Deposit as provided for elsewhere in this Agreement.
12
(i) Title Company, by signing this Agreement at the end hereof where
indicated, signifies its agreement to hold the Deposit for the purposes
contained in this Agreement. Title Company shall hold the Deposit in an interest
bearing bank account (or other investment agreed to by the parties) and the
interest thereon shall become part of the Deposit. Title Company shall not incur
any liability by reason of any action or non-action taken by it in good faith
and in accordance with this Agreement or pursuant to the judgment or order of a
court of competent jurisdiction. Title Company shall have the right to rely upon
the genuineness of all signatures, certificates, notices and instruments
delivered to it pursuant to this Article III.
(ii) Title Company shall not deliver the Deposit to any party unless
written demand is made therefor and a copy of such written demand is delivered
to the other party. If Title Company does not receive a written objection from
the other party to the proposed payment or delivery within three (3) Business
Days after such demand is served by personal delivery on such party, Title
Company is hereby authorized and directed to make such payment or delivery. If
Title Company does receive such written objection within such three (3) Business
Day period, Title Company shall forward a copy of the objections to the other
party and continue to hold the Deposit unless otherwise directed by joint
written instructions from the parties to this Agreement or by a judgment of a
court of competent jurisdiction.
(iii) If a dispute arises as to the Deposit pursuant to this Article
III, Buyer and Seller shall be responsible to reimburse Title Company, upon
demand, for one-half of the reasonable costs and expenses incurred by Title
Company in connection with acting in its capacity as escrow agent under this
Article III. In the event of litigation relating to the Deposit, whichever of
13
Seller or Buyer is not the prevailing party shall reimburse the prevailing party
for the costs and fees paid by the prevailing party on its own behalf.
(b) At Closing, the Title Company shall return the Deposit to Buyer in
cash or immediately available funds. The Deposit shall be non-refundable except
as provided in Sections 4.2 and 4.3 hereof or as otherwise expressly provided in
this Agreement. The terms and conditions of the Escrow Agreement attached hereto
as Exhibit Q are incorporated herein.
3.2 Assumption of Liabilities.
--------------------------
(a) Subject to the terms and conditions of this Agreement and except as
otherwise expressly provided herein, Buyer shall, on the Closing Date (either
directly or by virtue of acquiring the interests in the Owner Entity), assume
and agree to pay, perform, fulfill, and discharge when due the Assumed Property
Liabilities (except for Claims for which Seller is obligated to indemnify Buyer
pursuant to this Agreement) with respect to the Property Assets sold and
transferred (directly or indirectly) to Buyer.
(b) From the Effective Date until the Closing, Seller and Buyer shall
cooperate and use commercially reasonable efforts to obtain releases of Seller,
and if applicable, any of its Affiliates from liabilities pursuant to the
Assumed Debt Loan Documents arising out of or caused by any act or omission
occurring at any time from and after the Closing Date. At the Closing, Buyer or
an Affiliate of Buyer acceptable to the Lender shall assume and/or be
substituted for Seller or its Affiliates as guarantor or indemnitor, and Buyer
or such Affiliate shall execute such assumption or other documentation
reasonably requested by the Lender (and agreed to with Buyer no later than five
(5) days prior to the Closing Date) to effectuate the aforesaid release of
Seller or its Affiliates and to evidence the assumption ("Loan Assumption
14
Documents"). Notwithstanding the foregoing, Buyer shall not be obligated to pay
any fee or charge or to provide any additional collateral in order to obtain
such releases from the holder of the Assumed Debt.
3.3 Debt Restructure.
-----------------
If Buyer desires to place any mortgages on the Property Assets (other
than the Assumed Debt), in order to facilitate a like-kind exchange, provided
that such financing would not create adverse tax consequences for Seller, Seller
shall on request of Buyer cooperate with Buyer and take reasonable steps to
accommodate such request, including without limitation, execution of documents
to accomplish the same, and assistance with the estoppels referenced in Section
9.6 provided that Seller shall have no liability for any such financing or by
executing any such documents.
3.4 Adjustments and Prorations.
---------------------------
At Closing, Seller and Buyer shall make adjustments and prorations in
the manner set forth in Schedule 3.4.
ARTICLE IV
FAILURE TO CLOSE
4.1 Buyer's Default.
----------------
If Seller and/or PREIT and/or PREIT's Affiliates have complied with all
of the covenants and conditions contained herein and in the Concurrent Contracts
and Seller is ready, willing and able to (directly or indirectly) sell and
transfer the Property Assets to Buyer in accordance with this Agreement and
15
Buyer or its Affiliates for any reason fails to consummate this Agreement in
breach of its or Buyer's Affiliates obligations to do so hereunder or under the
Concurrent Contracts, then the parties hereto agree as follows:
SELLER MAY, BY WRITTEN NOTICE TO BUYER AND TITLE COMPANY, AS ITS SOLE
REMEDY TERMINATE THIS AGREEMENT AND RECEIVE THE DEPOSIT AS SELLER'S LIQUIDATED
DAMAGES AND AS SELLER'S SOLE AND EXCLUSIVE REMEDY FOR THE BREACH OF THIS
AGREEMENT BY BUYER. IT IS EXPRESSLY UNDERSTOOD AND AGREED BETWEEN SELLER AND
BUYER THAT SELLER'S ACTUAL DAMAGES FOR ANY SUCH BREACH BY BUYER HEREUNDER WOULD
BE SUBSTANTIAL BUT EXTREMELY DIFFICULT TO ASCERTAIN.
Thereafter, neither party shall have any further rights or obligations
with respect to the other under this Agreement, except for Buyer's or its
Affiliates' indemnification obligations under the Covenants Surviving
Termination. The parties agree that the Deposit amount bears a reasonable
relationship to the potential injury likely to be sustained in the event of such
a breach and that such amount is intended by the parties to provide just
compensation in the event of such a breach and is not intended to compel
performance or to constitute a penalty for nonperformance.
4.2 Seller's Default.
-----------------
If Buyer and its Affiliates have complied with all of the covenants and
conditions contained herein and in the Concurrent Contracts and is ready,
willing and able to pay the Purchase Price to Seller and consummate the
transactions contemplated hereunder in accordance with this Agreement and Seller
16
or PREIT and/or PREIT's Affiliates for any reason fails to consummate this
Agreement or any of the Concurrent Contracts in breach of its obligations to do
so, Buyer may as its sole and exclusive remedy terminate this Agreement
whereupon the Deposit shall be promptly returned to Buyer and Seller shall
promptly reimburse Buyer for its Due Diligence Expense and any and all costs and
expenses incurred in recovering the Deposit and the Due Diligence Expense,
including without limitation legal fees and court costs. Buyer shall not be
entitled to the remedy of specific performance. Upon termination of this
Agreement and the payment to Buyer of the Deposit and its Due Diligence Expense
(and costs of recovery) as provided above, neither party shall have any further
rights or obligations with respect to the other under this Agreement, except for
the Covenants Surviving Termination.
4.3 Disposition of Deposit upon Termination and Lack of Satisfaction of
Conditions.
--------------------------------------------------------------------
If Seller terminates this Agreement as a result of the lack of
satisfaction of any one or more of the conditions to Seller's obligations set
forth in Sections 8.1, 19.13 or elsewhere in this Agreement and the lack of
satisfaction of a condition is not related to Buyer's or Buyer's Affiliates
breach or default hereunder or under any of the Concurrent Contracts, or Buyer
terminates this Agreement as a result of the lack of satisfaction of any one or
more of the conditions to Buyer's obligations set forth in Sections 7.2, 7.3,
7.4, 8.2 or 19.13 or elsewhere in this Agreement, and the lack of satisfaction
of a condition is not related to Buyer's or Buyer's Affiliates breach or default
hereunder or under any of the Concurrent Contracts, then the Deposit shall be
promptly returned to Buyer.
17
ARTICLE V
CLOSING; DELIVERIES AT CLOSING
5.1 Closing.
--------
Subject to the terms of this Agreement, closing of the transaction
contemplated by this Agreement (the "Closing") shall take place at the offices
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
at 10:00 a.m., eastern time, on (i) April 24, 2003, time being of the essence,
or (ii) such earlier date as is agreed to in writing by Seller and Buyer (the
"Closing Date").
5.2 Deliveries to be Made on the Closing Date.
------------------------------------------
(a) Seller's Deliveries: Seller shall deliver or cause to be delivered
to Buyer on the Closing Date the following documents (collectively, "Seller
Deliveries"):
(i) Deed. A special warranty deed to the Real Property, duly
executed and acknowledged by Seller and in proper form for recording, conveying
fee simple title to the Real Property to Buyer.
(ii) ▇▇▇▇ of Sale. A ▇▇▇▇ of sale for all of the Personal Property,
duly executed by Seller.
(iii) Assignment and Assumption of Leases. An assignment of the
Leases, duly executed and acknowledged by Seller and in proper form for
recording, assigning Seller's right, title and interest in and to the Leases to
Buyer.
18
(iv) Assignment and Assumption of ▇▇▇▇▇▇ and Developer Agreements.
An assignment of the ▇▇▇▇▇▇ and Developer Agreements, duly executed and
acknowledged by Seller and in proper form for recording, assigning Seller's
right, title and interest in and to the ▇▇▇▇▇▇ and Developer Agreements to
Buyer.
(v) Assignment and Assumption of Material Contracts, Assumed
Service Contracts and Other Contracts. An assignment of the Material Contracts,
Assumed Service Contracts and other contracts identified on Schedule 10.11(c),
duly executed and acknowledged by Seller and in proper form for recording,
assigning Seller's right, title and interest in and to the Material Contracts,
Assumed Service Contracts and other contracts identified on Schedule 10.11(c) to
Buyer.
(vi) Transfer of Interests. The original stock certificate
evidencing the Interests, duly endorsed in blank or with stock powers annexed
thereto duly executed in blank by Seller, in proper form for transfer of the
Interests to Buyer upon delivery and a resignation of the directors and officers
of the Owner Entity.
(vii) FIRPTA Affidavit. The affidavit referred to in Section 1445
of the Code with all pertinent information confirming that Seller and the Owner
Entity are not foreign persons, trusts, estates, corporations or partnerships.
(viii) Termination Agreements. Executed termination agreements for
any and all management contracts then in existence with respect to the Real
Property.
(ix) Seller's Authority. Such proof and evidence of Seller's
authority and authorization to enter into the transactions contemplated hereby,
and such proof of the power and authority of the individual(s) executing and/or
19
delivering any instruments, documents or certificates on behalf of any entity to
act for and bind such entity, as may be reasonably required by the Title Company
or Buyer, including, without limitation, any and all consents of any
shareholders, directors, partners, limited partners or other persons whose
consent to the transactions contemplated hereby is required.
(x) Good Standing Certificates. Good standing certificates (or
analogous documents) with respect to the Owner Entity and Seller from the
Secretary of State or state taxing authority of the state in which each such
entity is organized and authorized to conduct business.
(xi) Tenant Notices. Notices to tenants, in form reasonably
acceptable to Buyer, advising them of the transfer and directing payment of rent
and other charges to a designated representative of Buyer.
(xii) Possession. Possession of the Property Assets, subject only
to the Permitted Encumbrances and possessory rights of tenants under Leases,
with all keys, combinations, passes, and codes to all locks and security
devices.
(xiii) Documents. Original signed instruments of all Leases and
Service Contracts, and to the extent in the possession and control of Seller or
its Affiliates, all records and files relating to the operation and maintenance
of the Property Assets, including real estate records, tenant files, permits,
licenses, sepias, drawings, plans and specifications, tenant correspondence,
current tax and utility bills, billing records, repair and maintenance records,
and other documents, records and personal property included within Property
Assets.
20
(xiv) COREA Notices. Such notice to the other parties to the ▇▇▇▇▇▇
reflecting the change in ownership and such other matters as may be required by
the ▇▇▇▇▇ or as Buyer may otherwise reasonably request. Buyer shall prepare the
notices and submit them to Seller for signature.
(xv) Title Certification. Such certificates and/or indemnities as
may be reasonably required by the Title Company in order to insure title to the
Real Property as required by this Agreement provided such certificates do not
expand or increase Seller's liability hereunder, including, but not limited to,
title affidavits customary in similar transactions.
(xvi) Warranty Certificate. The certificates required by Section
8.2(a)(i) and (ii).
(xvii) Rent Roll. A Rent Roll updated to within five (5) days of
the date of Closing and certified by Seller to be true and correct and complete.
(xviii) Organizational Documents. Originals (or if not available,
copies) certified by Seller to be complete and correct, of all organizational
documents of Owner Entity and of any entity that may be deemed a predecessor of
Owner Entity (including, but not limited to, certificates of formation or
incorporation, operating agreements, by-laws and articles of merger).
(xix) Other Documents and Deliveries. Such other documents or
instruments as may be reasonably required by Buyer or the Title Company to
effectuate the Closing, provided such documents or instruments shall not expand
or increase Seller's liability hereunder.
21
(b) Buyer's Deliveries. Buyer shall deliver or cause to be delivered to
Seller on the Closing Date the following documents (collectively, "Buyer's
Deliveries"):
(i) Purchase Price. At Closing, Buyer shall pay the Adjusted
Purchase Price to Seller by wire transfer in the manner directed by Seller.
(ii) Buyer's Authority. Such proof and evidence of Buyer's
authority and authorization to enter into the transaction contemplated hereby,
and such proof of the power and authority of the individual(s) executing and/or
delivering any instruments, documents or certificates on behalf of any entity to
act for and bind such entity, as may be reasonably required by the Title Company
or Seller, including, without limitation, any and all consents of any members,
directors, partners, limited partners or other persons whose consent to the
transactions contemplated hereby is required in accordance with Buyer's internal
organizational structure.
(iii) Good Standing Certificates. Good standing Certificates (or
analogous documents) of Buyer from the Secretary of State or state taxing
authority of the state in which such entity is organized and authorized to
conduct business.
(iv) Loan Assumption Documents. Executed copies of the Loan
Assumption Documents.
(v) Other Assumption Documents. Counterparts of the documents
described in Section 5.2(a)(iii), (iv) and (v), duly executed and acknowledged
by Buyer and in proper form for recording, assuming all of Seller's obligations
under Leases, ▇▇▇▇▇▇, Developers Agreements, Material Contracts, Assumed Service
Contracts and other material contracts described in Section 10.11(c).
22
(vi) Warranty Certificate. The certificates required by Section
8.1(a) and (b).
(vii) [Intentionally Deleted]
(viii) Other Documents and Deliveries. Such other documents or
instruments as may be reasonably required by Seller, the Lender, or the Title
Company to effectuate Closing, provided such documents or instruments shall not
expand or increase Buyer's or Owner Entity's liability hereunder.
ARTICLE VI
EMPLOYMENT MATTERS
6.1 Employees.
----------
As used in this Agreement, the term "Property Employees" shall mean all
employees of Owner Entity, all employees of Seller, all employees of any
management company having a contract with Seller who perform services and are
located at the Real Property, and all employees of one or more Affiliates of
Seller working at or for the Real Property. Seller has provided Buyer with
Schedule 6.1 attached hereto, and the parties have initialed the same, showing
all Property Employees as of the date of this Agreement together with their
current salaries, their years of service, and certain other information
including severance payable pursuant to Seller's policies as of the anticipated
Closing Date. From and after the Effective Date, Seller shall cooperate with
Buyer so that Buyer may review the personnel files and records of the current
Property Employees and conduct personal interviews and background checks of such
23
Property Employees. Except for those Property Employees who do not satisfy
Buyer's customary criminal history, credit and right to work investigations, and
except for those Property Employees identified by Seller or Buyer to the other
in writing before the Effective Date ("Non-Transferred Employees"), Buyer or its
Affiliate shall make an offer to employ all Property Employees in comparable
positions to those held by the Property Employees in accordance with Buyer's or
its Affiliates customary terms of employment, except that Buyer shall offer to
employ such Property Employees at the same salary or wage rate (without regard
to benefits) that they are presently paid by Seller or its Affiliates as shown
on Schedule 6.1 and with the same employee benefits as are customarily provided
by Buyer to its own employees in comparable positions. All current Property
Employees to whom Buyer or its Affiliate makes an offer of employment and who
accept Buyer's offer are referred to herein as the "Hired Employees." Effective
at midnight on the Date of Closing, Seller and its Affiliates shall terminate
the employment by Seller or its Affiliates of all Property Employees and Buyer
or its Affiliates shall hire all Hired Employees so there is no gap in any
employees' employment. Seller hereby agrees to pay in full or to cause to be
paid in full to all Property Employees, all accrued wages, vacation pay,
bonuses, notice pay, severance pay and other benefits, entitlements and expenses
owed to the Property Employees as a result of their employment by Seller and its
Affiliates in accordance with Seller's policies and any applicable federal,
state or local laws, provided that Seller's position is that no severance pay or
notice pay is due to any Hired Employee. Seller shall be responsible for any
benefit claims of Property Employees made with respect to treatments, expenses,
covered services and/or benefits rendered or received by or with respect to
Property Employees prior to the Date of Closing under Seller's Flexible Spending
Account Plan. Buyer or its Affiliates shall continue to employ all Hired
Employees for at least six (6) months after the Date of Closing ("Employment
24
Period"), provided that Buyer or its Affiliates shall be entitled to terminate
the employment of any such Hired Employee for cause as determined in accordance
with Buyer's policies and any applicable state or federal law in the reasonable
discretion of Buyer or its Affiliates. If Buyer terminates the employment of a
Hired Employee other than for cause before the end of the Employment Period,
Buyer shall be obligated to indemnify Seller and its Affiliates from and against
any Claim by such Hired Employee for severance pay in the amount shown on
Schedule 6.1 together with Seller's costs of defense, including attorney's fees
incurred in defending against any such claim.
6.2 Vesting.
--------
To the extent that service is relevant for purposes of eligibility or
vesting under any employee 401(k) plan or health insurance plan or other
employee benefit plan established or maintained by Buyer or its Affiliates for
the benefit of Buyer's employees on or after the Closing Date, such plan shall
credit the Hired Employees with a period of service equal to that shown as the
"years of service" for such Hired Employee on Schedule 6.1.
6.3 Indemnity.
----------
Notwithstanding any provision contained in this Agreement to the
contrary, Seller and Buyer shall indemnify, reimburse and hold harmless each
other and their respective Affiliates and any of their respective directors,
officers, agents and employees from and against any and all Losses arising out
of or otherwise in respect of any failure of Seller or Buyer or their respective
Affiliates to discharge its obligations under this Article VI. The provisions of
this Article VI shall survive the Closing.
25
6.4 No Third Party Beneficiaries.
-----------------------------
Seller and Buyer do not intend that any Property Employees or Hired
Employees be third party beneficiaries or entitled to enforce the provisions of
this Agreement.
ARTICLE VII
BUYER INSPECTIONS
7.1 Document and Property Inspection.
---------------------------------
Seller has provided certain materials concerning the Property Assets to
Buyer and has made and shall make available at the Real Property or at Seller's
offices in Philadelphia, Pennsylvania for Buyer's inspection or review and
copying the leases, the tenant files, and other documents and other items
relating to the Property Assets as shown on the attached Exhibit E. Seller has
also made its environmental files available for review by Buyer's environmental
consultants.
Seller has made and shall make the Property Assets available for
inspection by Buyer and Buyer has and shall, at Buyer's risk, conducted such
engineering and/or market and economic feasibility studies of the Property
Assets and undertaken such physical inspections of the Property Assets as Buyer
has deemed appropriate.
Buyer agrees to comply with the Confidentiality Agreement and the
Access Agreement with respect to the foregoing materials and further agrees that
if for any reason the Closing is not consummated, Buyer will immediately return
to Seller all materials furnished to Buyer by Seller and its Affiliates pursuant
to the Confidentiality Agreement or this Section 7.1.
26
Except for the warranties expressly set forth in this Agreement, Seller
makes no representations or warranties as to the truth, accuracy or completeness
of any materials, data or other information supplied to Buyer in connection with
Buyer's inspection of the Property Assets (e.g., that such materials are
complete, accurate or the final version thereof, or that all such materials are
in Seller's possession). It is the parties' express understanding and agreement
that such materials are provided only for Buyer's convenience in making its own
examination and determination concerning the Property Assets, and, in doing so,
except as expressly set forth in this Agreement, Buyer has relied exclusively on
its own independent investigation and evaluation of every aspect of the Property
Assets and not on any materials supplied by Seller or its Affiliates. Except as
expressly set forth in this Agreement, Buyer expressly disclaims any intent to
rely on any such materials provided to it by Seller or its Affiliates in
connection with its inspection other than the warranties set forth in this
Agreement and agrees that it shall rely solely on its own independently
developed or verified information.
In connection with any entry by Buyer or its agents or contractors on
the Real Property prior to Closing, Buyer agrees to indemnify Seller, Owner
Entity, and their Affiliates as provided in the Access Agreement.
Buyer acknowledges that notwithstanding Buyer's continuing feasibility
studies, Buyer shall not have the right to terminate this Agreement as a result
thereof except as provided in this Agreement.
27
7.2 Feasibility Period.
-------------------
In the event that Buyer's environmental consultants have determined in
their reasonable judgment before the Effective Date that there is a need for a
Phase II Environmental Site Assessment ("Phase II ESA") of the Real Property,
and Buyer has notified Seller thereof together with the reasons therefor, then
subject to the provisions of the Access Agreement, Buyer shall be permitted
until March 20, 2003 to conduct its Phase II ESA (the "Feasibility Period"). On
or before the last day of the Feasibility Period, if, but only if, (a) the Phase
II ESA discloses evidence of any one or more "Releases" (as such term is defined
by Environmental Law) of Hazardous Materials or a recognized environmental
condition on or affecting the Real Property in violation of Law, for which the
cost to Buyer of remediation would exceed $100,000 in the aggregate and (b) the
Release is not described in the ESAs and information provided to Buyer and
listed on Schedule 10.9, Buyer may terminate this Agreement by providing a
written notice to Seller so stating together with a copy of the Phase II ESA and
an estimate of the remediation costs. Upon receipt of such notice, unless Seller
nullifies the termination as described below, this Agreement shall terminate and
the Deposit shall be returned to Buyer and, neither party shall have any
obligation to the other, except for the Covenants Surviving Termination. If
Buyer fails to provide such notice of termination on or before the last day of
the Feasibility Period, Buyer shall be deemed to have waived its right to
terminate this Agreement pursuant to this Section 7.2 and this Agreement shall
remain in full force and effect. If Buyer terminates this Agreement in
accordance with this Section 7.2, Seller shall be able to nullify such
termination by notifying Buyer on or before March 31, 2003, that Seller shall
either: (1) reduce the Purchase Price by the estimated remediation cost, or (2)
agree with Buyer and Buyer's lenders to: (A) pay for the remediation if, as and
when it is performed, and (B) provide guarantees or other assurances reasonably
acceptable to such lenders with respect to such remediation.
28
7.3 Survey Contingency.
-------------------
Buyer may, but shall not be obligated to obtain, at its own expense, a
survey of the Real Property. If the survey discloses matters affecting title to
the Real Property that are not part of the Permitted Encumbrances and not
readily apparent from a physical inspection of the Real Property that are
objectionable to Buyer ("Additional Matters Objection"), Buyer shall notify
Seller of such objection, in writing, on or before March 20, 2003. This
contingency shall be deemed satisfied or waived if Seller has not received
written notice of Buyer's Additional Matters Objection on or before March 20,
2003. Any such written notice shall state all of Buyer's objections with
specificity and shall be limited to matters that currently or in the future may
materially interfere with the operation or development of the Real Property as a
shopping mall. Upon receipt of such notice, Seller may, but shall not be
obligated to, if curable, elect to cure any such objections by giving notice of
such election to Buyer within ten (10) Business Days after receipt of Buyer's
notice. Failure of Seller to give such notice shall mean Seller has elected not
to cure. If Seller cures such objection before Closing, then this Agreement
shall continue in full force and effect. If Seller elects to cure such
objections and if such objections are curable but not cured on or before
Closing, this Agreement shall nevertheless continue in force and effect, and if
the Closing shall take place Seller shall agree in writing with Buyer to
continue such cure after the Closing. If Seller chooses not to cure such
objections, Buyer may elect to terminate this Agreement by written notice given
within ten (10) Business Days after Seller notifies (or is deemed to have
notified) of its election not to cure, in which event the Deposit shall be
returned to Buyer, and neither party shall have any further obligations
hereunder except for the Covenants Surviving Termination.
29
If requested by Seller, Buyer will confirm in writing whether this
survey contingency has been satisfied and, if so, the date on which it was
satisfied.
7.4 Title Contingency.
------------------
At Closing Seller's title to the Real Property and Owner Entity's title
to the Access Parcel shall be good and marketable, subject only to the Permitted
Encumbrances. Seller shall cooperate with Buyer and Title Company and take all
actions reasonably necessary to induce Title Company to issue a title insurance
policy in accordance with the foregoing but Seller shall not be obligated to
incur any additional liability as result thereof. Except for equipment leases to
be assigned, Seller agrees to remove or discharge prior to Closing any
Encumbrance created by Seller or Owner Entity or imposed against the Property
Assets (or any of them) which is not a Permitted Encumbrance or at Seller's
option (and with Buyer's approval in Buyer's reasonable judgment), cause the
Title Company to insure over such Encumbrance. If title to the Real Property or
Access Parcel is not as required above, Buyer shall have the option of accepting
such title as exists and abating the Purchase Price to the extent of
Encumbrances of an ascertainable amount, or if the Encumbrance is of a nature
that it would materially interfere with the use, development or value of the
Real Property as a shopping mall or with Buyer's ability to obtain financing
with respect thereto, of terminating this Agreement, whereupon the Deposit shall
be returned to Buyer, Seller shall pay Buyer the Due Diligence Expenses, and
neither party shall have any obligation to the other except for the Covenants
Surviving Termination.
30
7.5 Property Financial Statements.
------------------------------
Seller has delivered to Buyer prior to the Effective Date such audited
separate property financial statements with respect to the Property as are
sufficient to satisfy the requirements of SEC Regulation S-X ss.210.3-14 as may
be in Seller's possession. To the extent Seller does not have such audited
financial statements, Seller shall cooperate with Buyer to facilitate the
preparation at Buyer's sole expense, prior to Closing (or at Buyer's election
thereafter) of such financial statements as are necessary in order for Buyer to
satisfy the requirements of SEC Regulation S-X ss.210.3-14.
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions to Obligations of Seller.
------------------------------------
The obligations of Seller to consummate the transactions contemplated
by this Agreement shall be subject to the satisfaction or written waiver by
Seller, at or prior to the Closing, of each of the following conditions, and if
any of such conditions are not satisfied or waived in writing by Seller at or
prior to Closing, Seller may terminate this Agreement:
(a) Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement that are qualified as to
materiality shall be true and correct as of the Closing Date (other than such
representations and warranties made as of a certain date, which shall be true
and correct as of such certain date) and those that are not so qualified shall
be true and correct in all material respects as of the Closing Date (other than
such representations and warranties as are made as of a certain date, which
31
shall be true and correct in all material respects as of such certain date), and
Seller shall have received a certificate of Buyer to such effect signed by a
duly authorized officer of Buyer;
(b) Covenants. All covenants contained in this Agreement to be
complied with by Buyer on or before the Closing shall have been complied with in
all material respects, and Seller shall have received a certificate of Buyer to
such effect signed by a duly authorized officer of Buyer;
(c) No Order. No governmental authority or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, injunction or other order (whether temporary,
preliminary or permanent) that is in effect and has the effect of making the
transactions contemplated by this Agreement illegal or otherwise restraining or
prohibiting consummation of such transactions;
(d) Ancillary Agreements. Buyer shall have duly executed and
delivered to Seller counterparts of each Ancillary Agreement and any other
agreement, document or certificate it is required to execute and deliver by this
Agreement;
(e) Consents. Seller shall have received the consents to transfer
the Property Assets described in Schedules 10.3(a) and 10.3(b).
(f) Consent of Limited Partners. Seller shall have obtained such
limited partner consents as may be necessary ratifying the execution of this
Agreement (provided that this condition shall be deemed waived unless Seller
notifies Buyer in writing on or before March 15, 2003, that such consents have
not be obtained).
32
(g) Equitable. Lender shall have consented in writing to the
conveyance of the Property Assets to Buyer or its Affiliate and shall have
agreed in writing to the release of Seller from all liability under the Assumed
Debt Loan Documents without condition, except for the settlement of the dispute
between Equitable and Seller referenced in Section 19.14.
(h) Other Closings. The conditions described in Section 19.13(a)
and (b) shall have been satisfied or waived by Seller.
(i) Buyer Deliveries. Seller shall have made all of the Seller
Deliveries set forth in Section 5.2(b) hereof or required by other provisions of
this Agreement.
8.2 Conditions to Obligations of Buyer.
-----------------------------------
(a) The obligations of Buyer to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction or written
waiver by Buyer, at or prior to the Closing, of each of the following
conditions, and if any of such conditions are not satisfied or waived in writing
by Buyer at or prior to Closing, Buyer may terminate this Agreement:
(i) Representations and Warranties. The representations and
warranties of Seller contained in this Agreement that are qualified as to
materiality shall be true and correct as of the Closing Date (other than such
representations and warranties which are made as of a certain date, which shall
be true and correct as of such certain date), and the representations and
warranties of Seller contained in this Agreement that are not so qualified shall
be true and correct in all material respects as of the Closing Date (other than
such representations and warranties made as of a certain date, which shall be
33
true and correct in all material respects as of such certain date), and Buyer
shall have received a certificate of Seller to such effect signed by a duly
authorized officer thereof;
(ii) Covenants. All covenants contained in this Agreement to be
complied with by Seller or the Seller Affiliates on or before the Closing shall
have been complied with in all material respects, and Buyer shall have received
a certificate of Seller to such effect signed by a duly authorized officer
thereof;
(iii) No Order. No governmental authority or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, injunction or other order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making the
transactions contemplated by this Agreement, illegal or otherwise restraining or
prohibiting consummation of such transactions;
(iv) Consents and Estoppels. Buyer shall have received the
following: (A) a duly executed Estoppel Certificate in the form attached as
Exhibit K from the Lender; (B) duly executed Estoppel Certificates substantially
in the form attached as Exhibit P from all tenants listed on Schedule 8.2(a)(iv)
(the "Anchor Tenants"); (C) duly executed Estoppel Certificates substantially in
the form attached as Exhibit J from the parties to any ▇▇▇▇▇; and (D) consents
or waivers in form reasonably satisfactory to Buyer from the parties to the
documents identified on Schedules 10.3(a) and 10.3(b). Notwithstanding the
reference to the forms attached as Exhibits J, K and P, if the party from whom
the estoppel is sought submits an estoppel in the form customarily used by such
party, then the fact that the referenced form is not used shall not, in itself,
cause such estoppel to fail to satisfy this condition, provided that such
34
estoppel shall, at a minimum, confirm that the loan documents, lease or ▇▇▇▇▇
which is the subject of the estoppel has not been modified or amended in any
material respect other than as heretofore disclosed by Seller to Buyer and, that
there is no material default by Seller (or its Affiliates) or such party
pursuant to such loan documents, lease or ▇▇▇▇▇ unless, as to such default, if
such default is capable of cure, Seller agrees with Buyer prior to Closing to
promptly remedy same at Seller's sole cost and expense which obligation shall
survive Closing.
(v) Other Closings. The conditions described in Section
19.13(a) and (c) shall have been satisfied or waived by Buyer.
(vi) Seller Deliveries. Seller shall have made all of the
Seller Deliveries set forth in Section 5.2(a) hereof or required by other
provisions of this Agreement.
(vii) Ancillary Agreements. Seller shall have duly executed and
delivered to Buyer counterparts of any Ancillary Agreements as required under
Section 5.2.
(viii) Equitable. Lender shall have consented in writing to the
conveyance of the Property Assets to Buyer or its Affiliate and shall have
agreed in writing to the release of Seller from all liability under the Assumed
Debt Loan Documents without condition, except for the settlement of the dispute
between Equitable and Seller referenced in Section 19.14.
ARTICLE IX
MAINTENANCE, IMPROVEMENT AND LEASING OF THE PROPERTY
9.1 Maintenance and Improvement.
----------------------------
Between the Effective Date and the Closing Date, Seller or the Owner
Entity shall maintain the Real Property and Personal Property in the same state
as it currently exists, reasonable wear and tear excepted, and subject to the
35
provisions of Section 9.2 hereof, shall comply with and perform all work
required to be done under the terms of any lease or agreement or requirement of
Law relating to the Real Property, and shall timely make all necessary repairs,
maintenance and replacements of equipment the same as though Seller were not
entering into the transactions contemplated hereby and shall keep the Real
Property fully insured against fire and such other risks as are customarily
insured by extended coverage (which insurance shall be cancelled at Closing at
Seller's expense). Neither the Seller nor the Owner Entity shall enter into any
new contract relating to the operation or maintenance of the Real Property or
modify the terms of any such existing contract without Buyer's consent, which
consent shall not be unreasonably withheld or delayed, unless the same may be
canceled without penalty or cost on thirty days' or less notice, in which event
no Buyer consent shall be required provided a copy thereof is given to Buyer
before the same is signed and a fully executed counterpart is delivered to Buyer
within five (5) days after signing but no later than three (3) Business Days
prior to Closing.
9.2 Leasing.
--------
(a) Approval. From the Effective Date until the Closing, Seller
shall keep Buyer informed of the terms and conditions of any proposed new leases
to be entered into after the Effective Date hereof or modifications or
extensions to Leases, shall seek Buyer's input regarding the feasibility and
structure of the proposed lease arrangements and any leasing commissions payable
as a result thereof, and shall provide copies of all such documents to Buyer
36
when executed. From the Effective Date, the Seller shall not enter into any new
leases or modifications or extensions to Leases with terms of more than three
(3) months without the prior written approval of Buyer, which approval shall not
be unreasonably withheld or delayed. The essential business terms thereof shall
be reviewed and approved or rejected by Buyer within five (5) Business Days
after receipt thereof by Buyer. Failure to approve or reject such proposed lease
terms within such period shall be deemed approval by Buyer. "New Leases" is
defined as leases (or modifications or extensions) executed after the Effective
Date that have been approved or deemed approved by Buyer as provided in this
Section 9.2(a). When submitting any lease or document to Buyer for approval or
information pursuant to this Section 9.2(a), Seller shall submit together with
such lease or document all available and relevant tenant information together
with all leasing commission obligations and an itemization of all tenant
improvement costs and concessions applicable thereto.
(b) Tenant Improvements and Commissions.
(i) If Closing is consummated, Buyer shall assume the
obligation for: (a) all tenant improvement costs, tenant allowances and
unrelated third party leasing commissions with regard to any New Leases, and (b)
the modification, extension or renewal of any Lease on or after the Effective
Date, provided that with regard to any modification or extension not required by
the terms of the Lease, the same shall have been approved by Buyer to the same
extent as would be required pursuant to Section 9.2(a); and provided further,
that to the extent Seller receives prior to Closing lease payments for the
Leases giving rise to such tenant improvement costs, tenant allowances or third
party leasing commissions, such tenant improvement costs, tenant allowances and
37
third party leasing commissions shall be shared pro rata by Seller and Buyer
based upon the ratio that the base rent received by Seller bears to the
aggregate base rent payable during the original lease term (and if Seller's
share is not paid prior to Closing, the Purchase Price shall be reduced by the
amount thereof). In the event Seller or the Seller Affiliates have paid prior to
Closing any such tenant improvement costs, tenant allowances or leasing
commissions which are the obligation of Buyer under this Section or Section
9.2(b)(ii), then the Purchase Price hereto shall be increased by such amount at
Closing.
(i) Except as provided in Section 9.2(b)(i) above, Seller shall be
responsible for the payment of all tenant improvement costs, tenant allowances
and leasing commissions due under any Lease or modification, extension or
renewal of any Lease; provided however, if Closing is consummated and a tenant
improvement cost, tenant allowance or unrelated third party leasing commission
is not then currently due and the obligation to pay such cost, allowance or
commission shall arise only as the result of a tenant foregoing an option to
terminate its Lease or a tenant exercising a right to extend the Lease or expand
the premises subject to the Lease, then such tenant improvement costs, tenant
allowance or unrelated third party leasing commission shall be Buyer's
obligation (but only to the extent allocable to a Lease term subsequent to
Closing). The provisions of this Section 9.2(b)(ii) shall survive Closing
hereunder.
9.3 Service and Maintenance Contracts.
----------------------------------
Seller represents and warrants to Buyer that (a) attached hereto as
Exhibit G is a list of all service and maintenance contracts applicable to the
Property Assets, and (b) true, correct and complete copies of such contracts
have been provided to Buyer (the "Service Contracts"). On or before March 15,
38
2003, Buyer shall identify to Seller which of such contracts Buyer desires to
assume and which of such contracts Buyer desires, if possible, to have
terminated prior to Closing. Without being obligated to incur any liability,
Seller shall use diligent efforts to have terminated prior to Closing or as soon
thereafter as may be effected in accordance with the terms thereof, all Service
Contracts that Buyer identifies for termination. As part of the Assumed Property
Liabilities, the Buyer shall assume the obligations under all Service Contracts
which (i) Buyer does not identify for termination and (ii) even if so
identified, nevertheless cannot be terminated prior to Closing in accordance
with their terms (collectively the "Assumed Service Contracts"). Notwithstanding
the foregoing, Seller shall terminate all Service Contracts with a Seller
Affiliate at Seller's sole cost and expense, and no such Service Contract shall
be or become an Assumed Service Contract.
9.4 Additional Covenants of Seller.
-------------------------------
Except as otherwise provided in Sections 9.1 and 9.2(a) and 9.3:
(a) after the Effective Date, Seller and the Owner Entity shall (i)
not terminate or amend or modify any Leases, Service Contracts or Material
Contracts in any material respect, including waiving any material rights of
Seller or the Owner Entity or granting any material consents or approvals under
Leases, Service Contracts or Material Contract without the prior written consent
of Buyer, which consent shall not be unreasonably withheld; provided that, if
Buyer has failed to respond within five (5) Business Days after receipt of a
request therefor by Buyer, then Buyer's consent shall be deemed to have been
given and further provided that Seller and the Owner Entity shall be entitled
without Buyer's consent in the ordinary course of business to enforce any of
39
their rights under the Leases and Service Contracts in the event of a default
thereunder, provided that Seller and Owner Entity shall not terminate any Lease
of over 10,000 square feet without Buyer's prior written consent, which consent
shall not be unreasonably withheld; and
(b) after the Effective Date, Seller and the Owner Entity shall (i)
not sell or otherwise dispose of any part of the Property Assets, provided that
items of Personal Property may be replaced by assets of equal value; (ii) not
consent to any changes in zoning or land use classification; (iii) not market
the Property Assets for sale or enter into discussions or negotiations with
respect to the sale of the Property Assets; (iv) within five (5) Business Days
from the receipt thereof, send Buyer copies of all notice of violations of law
received with respect to the Property Assets from any governmental authority,
all default notices received from any tenant or party to a Material Contract in
connection with the Property Assets, and all written notices of claims, actions,
proceedings or investigations pending or threatened against Seller or the Owner
Entity related to the Property Assets; and (v) concurrently with the giving
thereof by Seller, send Buyer copies of any default notice given by the Owner
Entity to any tenant or party to a Material Contract in connection with the
Property Assets.
9.5 Management Agreements.
----------------------
At or prior to Closing, Seller shall cause to be terminated and
canceled any property management agreement relating to the Real Property.
40
9.6 Estoppels and Consent and SNDAs.
--------------------------------
Seller shall endeavor to obtain and deliver to Buyer, no later than
five Business Days prior to the Closing Date, the estoppel certificates
specified in Sections 8.2(a)(iv)(A), (B), (C) and (D) hereof. Seller shall
assist Buyer in endeavoring to obtaining prior to Closing at Buyer's expense any
estoppel certificates and subordination, non-disturbance and attornment
agreements that Buyer desires to obtain in connection with any financing that
Buyer desires to obtain.
9.7 Existing Debt.
--------------
Between the date hereof and the Closing Date, Seller shall not modify
the Assumed Debt Loan Documents or the ▇▇▇▇▇ or place any further Encumbrances
against the Property Assets without the prior written consent of Buyer.
ARTICLE X
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as of the date hereof and as of
Closing as follows:
10.1 Formation and Authority.
------------------------
(a) Seller is, and will at Closing be, a limited partnership duly
formed, validly existing and in good standing under the laws of the Commonwealth
of Pennsylvania, and Owner Entity will at Closing be, a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and Seller has, and will at Closing have, all necessary power and
authority to enter into this Agreement and each Ancillary Agreement to which it
is to be a party, to carry out its obligations hereunder and thereunder and to
consummate or cause to be consummated, as applicable, the transactions
contemplated hereby and thereby. The execution and delivery by Seller of this
41
Agreement and each Ancillary Agreement to which it is to be a party, the
performance by Seller of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and thereby have
been approved by all necessary action of the partners or similar governing body
of Seller. Seller will at Closing be, duly qualified or registered to do
business in the State where the Real Property is located and in good standing in
such State.
(b) This Agreement is and, at Closing, each Ancillary Agreement
delivered at Closing to which Seller is a party will be, duly executed and
delivered by such party, and (assuming due authorization, execution and delivery
by Buyer of this Agreement and of each Ancillary Agreement) this Agreement and
such Ancillary Agreements constitute or will constitute, as the case may be,
legal, valid and binding obligations of Seller enforceable against Seller each
in accordance with their respective terms, subject as to enforceability to the
effect of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(c) True, correct and complete copies of the organizational
documents of Owner Entity and of any entity that may be deemed a predecessor of
Owner Entity have been delivered to Buyer and are listed on Schedule 10.1(c)
(including, but not limited to, all certificates of formation or incorporation,
operating agreements, by-laws and articles of merger).
(d) Owner Entity does not, and will not at Closing, own any
securities of any corporation or any interest in any Person. Owner Entity has
not, and will not at Closing, have acquired or succeeded to all or any portion
42
of the assets or business of any other Person, and there is no other Person that
may be deemed a predecessor of Owner Entity.
(e) [Intentionally Deleted]
(f) [Intentionally Deleted]
(g) As of the Effective Date and as of the date of Closing, all
offerings, sales and issuances of stock or other securities in Owner Entity or
any of its predecessors have been and will have been conducted in compliance
with all applicable federal and state securities laws and all other applicable
laws.
43
10.2 No Conflict.
------------
Assuming that all consents, approvals, authorizations and other actions
described in Schedules 10.3(a) and (b) have been obtained and all filings and
notifications listed in Schedule 10.3(a) and (b) have been made, and except as
may result from any facts or circumstances relating solely to Buyer, the
execution, delivery and performance of this Agreement and each Ancillary
Agreement by Seller do not and at Closing will not (a) violate or conflict with
the organizational documents of Seller or the Owner Entity, (b) conflict with or
violate any Law applicable to Seller, Owner Entity or the Real Property, or (c)
result in any breach of, or constitute a default (or event that, with the giving
of notice or lapse of time, or both, would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of any Encumbrance on the Real Property pursuant to any
contract relating to the Real Property to which Seller or Owner Entity is a
party or by which the Real Property is bound.
10.3 Consents and Approvals.
-----------------------
(a) The execution and delivery of this Agreement and each Ancillary
Agreement by Seller does not or will not, as the case may be, and the
performance of this Agreement and each Ancillary Agreement by Seller will not,
require any consent, approval, authorization or other action by, or filing with
or notification to, any governmental authority, except (i) as described in
Schedule 10.3(a), (ii) where failure to obtain such consent, approval,
authorization or action, or to make such filing or notification (I) would not
have a material adverse effect on Buyer or the value of the Real Property, or
the Leases, or with Buyer's ability to obtain financing with respect thereto,
44
and (II) would not have a material adverse effect on the ability of Seller to
consummate or cause to be consummated the transactions contemplated by this
Agreement or the Ancillary Agreements or to perform or cause to be performed any
of Seller's material obligations hereunder or thereunder, or (iii) as may be
necessary as a result of any facts or circumstances relating solely to Buyer.
(b) The execution and delivery of this Agreement and each Ancillary
Agreement by Seller does not or will not, as the case may be, and the
performance of this Agreement and each Ancillary Agreement by Seller will not,
require any third-party consents, approvals, authorizations or actions, except
as described in Schedule 10.3(b).
(c) There are no attachments, executions, assignments for the
benefit of creditors or voluntary or involuntary proceedings under the laws or
statutes of any jurisdiction relating to bankruptcy, insolvency, reorganization,
debt adjustment, arrangement, receivership, dissolution, fraudulent conveyance
or liquidation pending, contemplated or, to Seller's Knowledge, threatened by or
against Seller or Owner Entity.
10.4 Personal Property.
------------------
At Closing, the Seller will own, lease or have the legal right to use
all Personal Property free and clear of all Encumbrances, except Encumbrances in
connection with the Assumed Debt created by the Assumed Debt Loan Documents and
leases of personal property to be assigned to Seller which are identified on
Schedule 10.4.
45
10.5 Litigation.
-----------
As of the Effective Date, except as described in Schedule 10.5, there
are no claims, actions, proceedings or investigations pending or, to the
Knowledge of Seller, threatened against Seller relating to the Property Assets
or against Owner Entity. There is no order, writ, judgment, injunction, decree,
determination or award to which the Owner Entity is subject or to the Knowledge
of Seller which relates to the Property Assets.
10.6 Compliance with Laws.
---------------------
Except as described in Schedule 10.6 or in the Environmental Site
Assessments and documents described in Section 10.9 of this Agreement or
obtained by Buyer as part of the due diligence conducted by Buyer with respect
to the Property Assets, neither Seller nor Owner Entity has received written
notice of the failure to comply with any Laws of any governmental authority
pertaining to the ownership, use or occupancy of any Property Assets which
notice has not been complied with, or if not currently complied with is in the
process of being complied with as of the date hereof (and which shall be
completed promptly at Seller's expense), such obligation to survive Closing.
10.7 Taxes.
------
(a) [Intentionally Deleted]
(b) Except as described in Schedule 10.7(b), (i) Seller and the
Owner Entity have filed or will file all Tax Returns required to be filed with
respect to Taxes pertaining to the ownership or operation of the Property Assets
and the Owner Entity for periods prior to Closing, (ii) all Taxes due with
respect to the Property Assets and Owner Entity for periods prior to Closing
have been or will be paid prior to Closing and those payable but not due which
46
relate to Owner Entity or the Property Assets shall be adjusted at Closing,
(iii) neither Seller nor the Owner Entity has received from any governmental
authority any written notice of proposed adjustment, deficiency or underpayment
of any Taxes pertaining to the ownership or operation of the Property Assets or
Owner Entity, which notice has not been satisfied by payment or been withdrawn,
and to the Knowledge of Seller, there are no claims with respect thereto that
have been asserted or threatened against, or which may be owing by, Seller, or
the Owner Entity, (iv) there are no agreements for the extension of time for the
assessment of any such Taxes, (v) there are no pending audits or appeals of any
Taxes, nor any levies, fines, liens or other encumbrances relating to such
Taxes, and (vi) no Tenant or party under a ▇▇▇▇▇ is entitled to any refund of
any tax or other payment by reason of tax reduction proceedings affecting
current or prior years.
(c) Owner Entity has and will at Closing have no liability for the
Taxes of any Person as a transferee or successor, by contract or otherwise.
(d) Seller and Buyer shall fully cooperate with each other both
before and after Closing so that tax returns for Taxes (other than real estate
taxes and realty transfer taxes) for the applicable fiscal years in which
Closing occurs for the Owner Entity may be timely filed, and Seller shall pay
all such Taxes accruing with respect to periods prior to Closing, Buyer shall
pay all such Taxes accruing with respect to periods from and after Closing, and
Seller and Buyer shall each pay one-half of the charges of the accountants for
preparation of the returns for such Taxes.
(e) Seller will file any required final tax returns for the Owner
Entity for the period ending on the Closing Date.
47
10.8 Real Property.
--------------
(a) The Seller presently owns and at Closing shall own, free of all
Encumbrances other than the Permitted Encumbrances and other than those
Encumbrances to be satisfied by Seller at Closing, all right, title and interest
in and to the fee interest in the Real Property (other than the Access Parcel,
which is owned by Owner Entity, and any improvements constructed by Anchor
Tenants using their own funds). Except as disclosed on Schedule 10.3(b), in the
Assumed Debt Loan Documents or in any Lease with an Anchor Tenant, no Person has
or will at Closing have the right or option to purchase any interest in any of
the Real Property.
(b) Except as described in Schedule 10.8(b), no proceeding is
pending or, to the Knowledge of Seller, threatened for the taking or
condemnation of all or any part of any Real Property.
10.9 Environmental, Health and Safety Matters.
-----------------------------------------
Seller has provided Buyer with copies of the Environmental Site
Assessments and information described in Schedule 10.9 ("ESAs") concerning the
Real Property and Buyer or its agents have been permitted access to inspect the
Real Property and to review Seller's environmental files with respect to the
Real Property. Seller has not intentionally withheld from Buyer any information
pertaining to environmental matters that would materially affect the value of
the Real Property.
Seller makes no representations or warranties with respect to the
accuracy or completeness, methodology of preparation or otherwise concerning the
contents of the ESA's. To the Knowledge of Seller there are no Hazardous
Materials in, on, under, about or migrating from or to the Real Property not
disclosed in the ESA's or other information disclosed on Schedule 10.9.
48
Subject to the provisions of Section 13.2 hereof, Buyer hereby waives
and releases Seller and its Affiliates from any present or future claims arising
out of matters disclosed by the ESA's or other information disclosed on Schedule
10.9.
The terms and provisions of this Section 10.9 shall survive Closing or
any termination of this Agreement.
10.10 Insurance.
----------
Insurance policies or binders of insurance or programs of
self-insurance in the types and amounts listed in Schedule 10.10 are valid and
currently in effect. Seller, the Seller Affiliates or the Owner Entity have
paid, or caused to be paid, all premiums due under such policies and to the
Knowledge of Seller, Seller, the Seller Affiliates and the Owner Entity are not
in default with respect to their obligations under any such policies in any
material respect.
10.11 Material Contracts.
-------------------
(a) As of the date of Closing, the Assumed Service Contracts, the
Assumed Debt Loan Documents, the Construction, Operation and Easement Agreements
listed on Schedule 10.11(a) ("▇▇▇▇▇▇"), the Developer Agreements and the other
contracts listed on Schedule 10.11(c) (collectively, the "Material Contracts")
and any Permitted Encumbrances will be the only contracts and agreements that
will be binding upon Buyer or Owner Entity from and after Closing, except for
any agreements entered into by Buyer. All applicable ▇▇▇▇▇▇ and all
49
modifications and supplements thereto are listed on Schedule 10.11(a), and to
the extent not of record, complete copies of the same have been delivered by
Seller to Buyer. The Assumed Debt Loan Documents listed on Exhibit B to this
Agreement constitute all the written agreements with Lender relating to the
Assumed Debt.
(b) All material agreements with governmental authorities or
material agreements with civic organizations, neighborhood associations or
similar groups, and all amendments, modifications and supplements thereto
binding the Property, the Seller or the Owner Entity (the "Developer
Agreements") are listed on Schedule 10.11(b). All construction, improvement and
contribution obligations under the Developer Agreements have been fully
completed and paid for and all other obligations under the Developer Agreements
through the Closing will have been fully performed by the Date of Closing.
(c) To the extent not already disclosed elsewhere in this
Agreement, all other material agreements of Seller or Owner Entity with third
parties are listed on Schedule 10.11(c).
(d) True and complete copies of the Material Contracts have been
given to Buyer or produced to Buyer by the Title Company. Except as disclosed in
Schedule 10.11(d), each Material Contract is valid and binding on the respective
parties thereto and is in full force and effect. Upon consummation of the
transactions contemplated by this Agreement, except to the extent that any
consents set forth in Schedule 10.3(b) are not obtained, and except for any loan
paid at Closing and assuming consents are obtained to assignments of certain
contracts listed on Schedule 10.11(c) each Material Contract shall continue in
full force and effect without penalty or other adverse consequence. Except as
50
disclosed in Schedule 10.11(b) Seller and the Owner Entity have not received a
written notice of default with respect to any Material Contract. Seller and
Owner Entity have not delivered a written notice of default to any other party
to a Material Contract.
10.12 Rent Roll.
----------
(a) Seller has delivered to Buyer a rent roll for the Real Property
dated as of January 31, 2003, a copy of which is also attached hereto as
Schedule 10.12(a) (the "Rent Roll"). To the Knowledge of Seller the information
on the Rent Roll is true and correct in all material respects.
(b) As of the date of the Rent Roll, all of the leases reflected in
the Rent Roll are in full force and effect except as specifically identified in
the Rent Roll or Schedules 10.12(c) or (d). Seller has made available to Buyer,
for Buyer's inspection, true, correct and complete copies of all Leases and
amendments to such Leases and guarantees of Leases executed before the Effective
Date. The Leases identified on the Rent Roll constitute all of the leases,
licenses and occupancy agreements for the Real Property.
(c) Except as disclosed in Schedule 10.12(c) or in the tenant lease
files made available to Buyer for inspection, no tenant has delivered written
notice (not heretofore substantially complied with in all material respects or
withdrawn) asserting any material claim or basis for any reduction, deduction,
or set-off against the rent under any Lease and to the Knowledge of Seller, the
Seller is not in default under any Leases.
(d) As of the date of the Rent Roll, except as disclosed in the
Rent Roll, in the Aged Account Receivable Reports attached to Schedule 10.12(d)
or in copies of default notices provided to Buyer and listed on Schedule
51
10.12(d), to the Knowledge of Seller, there is no material default by any tenant
in the performance of any material obligations under any Lease.
(e) Except as may be set forth in any Lease or ▇▇▇▇▇ with an
Anchor, no Person has an option, right of refusal or other contractual right to
purchase all or any portion of Real Property, except that a tenant under a pad
site Lease may have an option, right of first refusal or other contractual right
to purchase its own demised premises and related easement rights.
(f) No tenant under any Lease has prepaid any rent or other sums
due under such Lease for more than one (1) month in advance. Schedule 10.12(f)
shows the amounts of all security deposits paid by any tenant under a Lease or
construction deposits paid by a tenant or its contractors, and the amount
currently held by Seller.
10.13 Knowledge.
----------
The persons listed in the definition of the term "Knowledge of Seller"
are the persons most likely to have knowledge of the matters relating to the
Property addressed in this Agreement.
10.14 Ownership of Owner Entity.
--------------------------
Seller owns and will at Closing own all the Interests in the Owner
Entity, free and clear of all Encumbrances of any type or nature. No Person has
or will at Closing have any right or option to acquire the Interests (other than
pursuant to the ▇▇▇▇▇▇). All Interests in the Owner Entity have been issued in
compliance with Laws. Other than Seller, no Person has or will at Closing have
52
any right to receive any distributions from Owner Entity or have allocated any
profits or losses thereof. There are and will at Closing be no rights,
subscriptions, warrants, options, rights of first refusal, conversion rights or
agreements of any kind to purchase or otherwise acquire any Interests or other
securities or participation interests convertible into any Interests in Owner
Entity, except as provided in the ▇▇▇▇▇▇. Owner Entity has and will at Closing
have no subsidiaries and does not and will not at Closing own an interest in any
other entity.
10.15 Employment Matters.
-------------------
(a) All accrued wages, accrued vacation pay, bonuses, and other
accrued employee benefit expenses, except for severance pay and notice pay, due
to any of the Property Employees as of the Date of Closing have been or will be
paid in full by Seller or its Affiliates.
(b) Other than those liabilities incurred in the ordinary course of
business and for which Seller will remain solely responsible post Closing, as of
the Date of Closing, neither Seller nor Owner Entity nor any of their respective
Affiliates shall have any liability, whether contingent, liquidated or
unliquidated, to any pension or other benefit plan, including, but not limited
to any bonus, deferred compensation, pension, profit sharing, retirement, stock
option, group insurance, health benefit, welfare, or other fringe benefit plan,
including, but not limited to, plans defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), respecting the Property
Employees.
(c) Other than those liabilities incurred in the ordinary course of
business and for which Seller will remain responsible post Closing, as of the
Date of Closing, Seller and Owner Entity and their respective Affiliates in all
53
material respects shall have satisfied any and all obligations existing as of
the Closing Date regarding the Property Employees imposed on them under
applicable Law, but excluding any obligations relating to severance pay or
notice pay arising out of or relating to the termination of the employment of
the Hired Employees.
(d) All Property Employees other than those identified in Schedule
10.15(d) are employees at will. Other than those identified in Schedule
10.15(d), there are no collective bargaining agreements to which Seller or Owner
Entity or any of their respective Affiliates area party, covering the Property
Employees.
(e) No liability to the Pension Benefit Guaranty Corporation, or to
any multi-employer pension plan, exists as of the Effective Date, or will exist
as of the Closing Date, against Seller or Owner Entity or any of their
respective Affiliates on account of any termination, partial termination,
suspension, or freezing of benefits of any employee pension benefit plan
covering the Property Employees that is subject to Title IV of ERISA, or on
account of any withdrawal from a multi-employer pension plan covering the
Property Employees that is subject to Title IV of ERISA.
(f) Seller and Owner Entity and their respective Affiliates are and
will at Closing be in compliance with all federal, state and local laws and
regulations respecting the employment of the Property Employees, including
employment practices, the terms and conditions of employment, the payment of
wages, plant closings and the governance of pension and employee welfare benefit
plans, including, but not limited to, the Worker Adjustment and Retraining
Notification Act, the Consolidated Omnibus Budget Reconciliation Act, the
54
Employee Retirement Income Security Act, the Multi-Employer Pension Plan
Amendments Act and any other Laws referred to above, except where failure to
comply would not have a material adverse effect on their business, operations or
financial condition.
10.16 Limitations on Representations and Warranties.
----------------------------------------------
Buyer hereby agrees and acknowledges that, except as set forth in
Sections 10.1 through 10.15 above, or elsewhere in this Agreement specifically
provided, neither Seller nor its Affiliates nor any agent, attorney, employee or
representative of Seller or its Affiliates has made any representation
whatsoever regarding the subject matter of this transaction, or any part
thereof, including (without limiting the generality of the foregoing)
representations as to the physical nature or physical or environmental condition
of the Real Property or the capabilities thereof, and that Buyer, in executing,
delivering and/or performing this Agreement, does not rely upon any statement
and/or information to whomever made or given, directly or indirectly, orally or
in writing, by any individual, firm or corporation unless such statement or
information is expressly incorporated in this Agreement. Buyer agrees that
except as expressly set forth in this Agreement, its purchase of the Property
Assets shall be "as is, where is" as of the date hereof, reasonable wear and
tear excepted.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES AS TO THE PHYSICAL CONDITION OF THE PROPERTY
ASSETS OR THE SUITABILITY THEREOF FOR ANY PURPOSE. EXCEPT AS EXPRESSLY SET FORTH
IN THIS AGREEMENT, SELLER HEREBY EXPRESSLY DISCLAIMS ANY WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE AND EXCEPT AS EXPRESSLY
55
SET FORTH IN THIS AGREEMENT, SELLER DISCLAIMS ANY OTHER WARRANTIES OR
REPRESENTATIONS AS TO THE PHYSICAL CONDITION OF THE PROPERTY ASSETS. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, BUYER, BY EXECUTION OF THIS AGREEMENT AND
THE ANCILLARY AGREEMENTS AGREES THAT IT HAS INSPECTED THE PROPERTY ASSETS AND
THAT BUYER SHALL ACCEPT SAME "AS IS" AND "WITH ALL FAULTS".
Buyer understands that, except as may otherwise be expressly provided
in this Agreement, any financial statements and data, including, without
limitation, gross rental income, operating expenses and cash flow statements
made, or to be made available by Seller or Seller's Affiliates to Buyer have
been and will be unaudited financial statements and data or abstracts not
prepared or reviewed by independent public accountants, and that except as
expressly set forth in this Agreement, Seller makes no representation as to the
accuracy or completeness thereof.
Buyer acknowledges that this Agreement has been entered into after full
investigation, or with Buyer's satisfaction with the opportunity afforded for
investigation. The terms and provisions of this Section 10.16 shall survive
Closing or any termination of this Agreement. Seller shall not be considered to
have breached a representation or warranty hereunder if Seller in good faith
discovers additional information after the full execution and delivery hereof
and not less than ten (10) days prior to the Closing supplements the Schedules
or updates the representations and warranties made herein immediately upon such
discovery, provided that such additional information does not have in the
context of the subject transaction a material adverse effect upon the value of
56
the Property Assets, title to the Real Property or upon Buyer's ability to
acquire and finance the Property Assets.
10.17 Schedules.
----------
A disclosure of a particular item, fact or circumstance (e.g.,
contract, default, required consent, violation of law, etc.) on any Schedule
attached to this Agreement shall not be limited in its application to a
particular representation or warranty hereunder but shall be deemed to be
disclosure of such item, fact or circumstance to Buyer for all purposes in
satisfaction of all of Seller's disclosure obligations under this Agreement.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
11.1 Formation and Authority.
------------------------
Buyer is, and will at Closing be, a limited liability company, duly
formed, validly existing and in good standing under the laws of the State of
Delaware and has, and will at Closing have, all necessary power and authority to
enter into this Agreement and each Ancillary Agreement to which it is to be a
party, to carry out its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by
Buyer of this Agreement and each Ancillary Agreement to which it is to be a
party, the performance by Buyer of its obligations hereunder and thereunder and
the consummation by Buyer of the transactions contemplated hereby and thereby
have been approved by all necessary action of the members of Buyer and the Board
57
of Directors, or similar governing body of The ▇▇▇▇▇ Company, L.P. This
Agreement has been, and, at Closing, each Ancillary Agreement delivered at such
Closing be, duly executed and delivered by Buyer, and (assuming due
authorization, execution and delivery by Seller of this Agreement and of such
Ancillary Agreements and all other parties thereto other than Buyer) this
Agreement and such Ancillary Agreements constitute or will constitute, as the
case may be, legal, valid and binding obligations of Buyer enforceable against
Buyer in accordance with their respective terms, and subject, as to
enforceability to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
11.2 No Conflict.
------------
Except as may result from any facts or circumstances relating solely to
Seller or the Owner Entity, the execution, delivery and performance by Buyer of
this Agreement and by Buyer of the respective Ancillary Agreements to which it
is a party do not and at Closing will not (a) violate or conflict with the
organizational documents of Buyer, (b) conflict with or violate any Law
applicable to Buyer, or (c) result in any breach of, or constitute a default (or
event which, with the giving of notice or lapse of time, or both, would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Encumbrance
on, any of the assets or properties of Buyer pursuant to, any contract relating
to such assets or properties to which Buyer is a party or by which any of such
assets or properties is bound.
58
11.3 Consents and Approvals.
-----------------------
(a) The execution and delivery by Buyer of this Agreement and each
Ancillary Agreement to which it is to be a party does not or will not, as the
case may be, and the performance by Buyer of this Agreement and each Ancillary
Agreement to which it is to be a party will not, require any consent, approval,
authorization or other action by, or filing with or notification to, any
governmental authority, except (i) as described in Schedules 10.3(a) or (b) or
11.3(a) or (b), or (ii) as may be necessary as a result of any facts or
circumstances relating solely to Seller or the Owner Entity.
(b) The execution and delivery by Buyer of this Agreement and the
Ancillary Agreements to which it is to be a party do not or will not, as the
case may be, and the performance by Buyer of this Agreement and the Ancillary
Agreements to which it is to be a party will not, require any third-party
consents, approvals, authorizations or actions, except as described in Schedules
10.3(a) or (b) or Schedules 11.3(a) or (b).
11.4 Litigation.
-----------
As of the Effective Date, there are no claims, actions, proceedings or
investigations pending or, to the Knowledge of Buyer, threatened against Buyer
or its Affiliates that seek to delay or would delay, if adversely determined, or
prevent the consummation of the transactions contemplated by this Agreement or
the Ancillary Agreements to which it is a party or which would materially
adversely affect the ability of Buyer to consummate the transactions
contemplated hereby or thereby or to perform any of its material obligations
hereunder or thereunder.
59
11.5 Knowledge of Buyer.
-------------------
The persons listed in the definition of the term "Knowledge of Buyer"
are the persons most likely to have Knowledge of the matters relating to Buyer
addressed in this Agreement.
ARTICLE XII
BROKER
Buyer and Seller represent to each other that, other than ▇▇▇▇▇ ▇.
▇▇▇▇▇ who will receive a finders fee upon the Closing, and whose fee shall be
paid pursuant to a separate written agreement signed by the parties to this
Agreeement, they have dealt with no agent or broker who in any way has
participated as a procuring cause of the sale or the entering into of the
transactions contemplated hereby. Buyer and Seller each agree to defend,
indemnify and hold harmless the other for any and all judgments, costs of suit,
attorneys' fees, and other reasonable expenses which the other may incur by
reason of any action or claim against the other by any other broker, agent, or
finder with whom the indemnifying party has dealt arising out of this Agreement
in violation of the foregoing representation and warranty. The provisions of
this Article XII shall survive the Closing and any termination of this
Agreement.
ARTICLE XIII
SURVIVAL; INDEMNIFICATION
13.1 Survival of Warranties.
-----------------------
The representations and warranties set forth in Section 10.8 shall not
survive the Closing. The representations and warranties contained in Sections
10.1, 10.5, 10.7 and 10.14 shall survive the Closing forever, subject to the
applicable statute of limitations. All other representations and warranties of
60
Seller or Buyer set forth in this Agreement shall survive the Closing for a
period of one (1) year, provided that written notice of a breach thereof is
provided to the breaching party within one (1) year from the date of Closing.
13.2 Indemnification by Seller.
--------------------------
(a) Seller shall indemnify, hold harmless and defend Buyer and
Owner Entity and their respective partners, members, shareholders, owners,
officers, directors, employees and agents and their respective personal
representatives, successors and assigns, from and against any Losses arising out
of or caused by:
(i) the breach by Seller of any representation or warranty made
by Seller in this Agreement; or
(ii) any liability for Taxes of Owner Entity or any Person
other than Owner Entity for whom Owner Entity has liability as a transferee or
successor, by contract or otherwise, for periods on or prior to the Closing; or
(iii) any Claim by any third Person against the Property Assets
or Buyer or Owner Entity arising out of or caused by, directly or indirectly,
any act or omission of the Seller or its partners, managers, officers,
directors, employees, agents or representatives in connection with operation or
ownership of the Property Assets occurring at any time on or before the Closing
Date or any acts or omissions of Owner Entity or its shareholders, managers,
officers, directors, employees, agents or representatives occurring at any time
on or before the Closing Date excluding (A) Claims arising out of the COREAs,
the Leases and the Assumed Property Liabilities (except for Claims for which
Seller is obligated to indemnify Buyer pursuant to this Agreement other than
pursuant to this Section 13.2(a)(iii)), (B) Claims for which a specific
61
adjustment or apportionment was made between Seller and Buyer at Closing and (C)
Claims based on obligations expressly assumed in writing by Buyer other than the
Assumed Property Liabilities;
(iv) any Claim by any Property Employee arising out of such
Property Employee's employment by Owner Entity, Seller or their respective
Affiliates through the Date of Closing or the termination of such Property
Employee's employment by Owner Entity, Seller or their respective Affiliates in
accordance with Section 6.1, including, without limitation, any Claim for
severance pay, notice pay or pension or other employee benefits (subject to
Buyer's indemnification obligations pursuant to Sections 6.1 or 6.3);
(v) any Claim by the Lender with respect to the Assumed Debt
Loan Documents arising out of or caused by any act or omission by Seller, Owner
Entity or their respective Affiliates occurring at any time prior to the Closing
Date; or
(vi) any Claim by any tenant pursuant to a Lease alleging an
overpayment or overcharge of rent or additional rent to the extent relating to
periods prior to Closing, including, without limitation, the Claims identified
on Schedule 10.12(b), or any Claim by a party to the ▇▇▇▇▇ alleging overpayment
or overcharge of amounts due under the ▇▇▇▇▇ to the extent relating to periods
prior to Closing.
(b) Notwithstanding the foregoing, the indemnification obligations
of Seller pursuant to Section 13.2(a) (i) shall not be paid except to the extent
the aggregate dollar amount of Losses that would otherwise be indemnified
pursuant to Section 13.2(a)(i) exceeds one percent (1%) of the Purchase Price
(the "Threshold Amount"). In calculating the amount of Losses, such amount shall
62
be an amount net of any insurance proceeds, indemnity payments or similar
payments actually received by Buyer (or any of its Affiliates) or (after
transfer to Buyer) the Owner Entity from any third parties, provided Buyer shall
not have any obligation to pursue collection of any amounts from any third
parties, nor shall Seller's obligation hereunder be suspended or delayed pending
efforts to collect from third parties. Buyer shall cooperate with Seller, at no
expense to the Buyer, in Seller's efforts to collect payments from third parties
on account of any Losses.
13.3 Indemnification by Buyer.
-------------------------
Buyer shall indemnify, hold harmless and defend Seller and Seller's
partners, members, shareholders, owners, officers, directors, employees and
agents and their respective personal representatives, successors and assigns,
from and against any Losses arising out of or caused by, (a) the breach or
failure of any representation or warranty made by Buyer contained in this
Agreement, and (b) any Claim by a third Person against Seller arising out of or
caused by, directly or indirectly any act or omission of the Owner Entity or
Buyer or any of their respective members, managers, officers, directors,
employees, agents or representatives in connection with the operation or
ownership of the Property Assets occurring at any time after the Closing Date or
actions or omissions of the Owner Entity occurring at any time after the Closing
Date, including but not limited to (i) Claims arising out of the Assumed
Property Liabilities (except for Claims for which Seller is obligated to
indemnify Buyer pursuant to this Agreement), and (ii) Claims based on any
obligations expressly assumed in writing by Buyer other than the Assumed
Property Liabilities. Notwithstanding the foregoing, the indemnification
63
obligations of Buyer pursuant to Section 13.3(a) shall not be paid except to the
extent the aggregate dollar amount of Losses that otherwise would be paid
pursuant to Section 13.3(a) exceeds the Threshold Amount.
13.4 Indemnity - General.
--------------------
The following provisions shall apply to any claim for
indemnification made by a party ("Indemnified Party") of another ("Indemnitor").
(a) An Indemnified Party shall give Indemnitor written notice of
any claim, assertion, event or proceeding by or in respect of a third party as
to which such Indemnified Party may request indemnification hereunder or as to
which the Threshold Amount may be applied as soon as is practicable and in any
event within sixty (60) days of the time that such Indemnified Party learns of
such claim, assertion, event or proceeding; provided, however, that the failure
to so notify Indemnitor shall not affect rights to indemnification hereunder
except to the extent that Indemnitor is actually prejudiced by such failure.
(b) Indemnitor shall have the right by notice given to the
Indemnified Party within sixty (60) days of receipt of notice of the claim to
direct, through counsel of its own choosing reasonably acceptable to the
Indemnified Party, the defense or settlement of any such claim or proceeding at
its own expense, provided that Indemnitor shall not settle any such claim or
proceeding without arranging for the release of the Indemnified Party and the
partners, members, shareholders or other owners of the Indemnified Party. If
Indemnitor elects to assume the defense of any such claim or proceeding,
Indemnitor shall consult with the Indemnified Party and the Indemnified Party
may participate in such defense, but in such case the expenses of the
Indemnified Party shall be paid by the Indemnified Party. The Indemnified Party
64
shall provide Indemnitor with access to its records and personnel relating to
any such claim, assertion, event or proceeding during normal business hours and
shall otherwise cooperate with Indemnitor in the defense or settlement thereof,
and Indemnitor shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith. If Indemnitor elects to direct
the defense of any such claim or proceeding, the Indemnified Party shall not
pay, or permit to be paid, any part of any claim or demand arising from such
asserted liability unless Indemnitor consents in writing to such payment or
unless a final judgment from which no appeal may be taken by or on behalf of
Indemnitor is entered against the Indemnified Party for such liability. If
Indemnitor fails to defend or if, after commencing or undertaking any such
defense, Indemnitor fails to diligently prosecute or withdraws from such
defense, the Indemnified Party shall have the right to undertake the defense or
settlement thereof, at Indemnitor's expense and in that event the Indemnified
Party may settle such claim or proceeding prior to a final judgment thereon or
elect to forego any appeal with respect thereto.
(c) All amounts owed by the Indemnitor to the Indemnified Party
shall be paid in full within ten (10) Business Days after a final judgment
(without further right of appeal) determining the amount owed is rendered, or
after a final settlement or agreement as to the amount owed is executed. If the
amounts owed by the Indemnitor to the Indemnitee are not paid when due, interest
shall accrue on such amount at the rate of ten percent (10%) per annum
compounded until paid in full.
(d) Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
65
rise to any right on the part of any party, after the consummation of the
transactions contemplated hereby, to rescind this Agreement or any of the
transactions contemplated hereby.
13.5 Survival.
---------
The indemnification obligations of Seller and Buyer set forth in this
Article XIII shall survive the Closing forever, subject to the applicable
statute of limitations, provided that nothing in this Section 13.5 is intended
to modify the provisions of Section 13.1.
ARTICLE XIV
ASSIGNMENT
This Agreement may not be assigned or transferred by Seller except to
an Affiliate of Seller or as contemplated by Article XVIII, provided however
that no such assignment shall relieve Seller of any of its obligations under
this Agreement. This Agreement may be assigned or transferred by Buyer to an
Affiliate of Buyer or as contemplated by Article XVIII; provided however that no
such assignment shall relieve Buyer of any of its obligations under this
Agreement. Other than as set forth above, neither this Agreement nor the
obligations arising under or as a result of this Agreement may be assigned.
ARTICLE XV
NOTICES
All notices hereunder or required by law shall be sent via facsimile,
United States Mail, postage prepaid, certified mail, return receipt requested,
or via any nationally recognized commercial overnight carrier with return
66
receipt requested, charges prepaid, addressed to the parties hereto at their
respective addresses set forth below or as they have theretofore specified by
written notice delivered in accordance herewith:
Seller:
New Castle Associates
c/o PREIT-▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Buyer:
c/o The ▇▇▇▇▇ Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
c/o The ▇▇▇▇▇ Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be deemed served when actually evidenced by a signed
receipt or rejected. Notwithstanding the foregoing provisions of this Section,
notices served by facsimile shall be deemed given upon receipt if received at or
prior to 5:00 P.M. on a Business Day and on the next Business Day if received
after 5:00 P.M. on a Business Day or at any time on a non-Business Day.
67
ARTICLE XVI
EXPENSES
Except as specifically set forth herein each party shall pay its own
attorney's fees and expenses in connection with this transaction. Buyer shall
pay its survey costs, engineering and expert fees, and any title insurance
policy premium for Buyer, the Owner Entity or any lender of Buyer or the Owner
Entity and any other of its own costs and expenses. All costs and expenses of
placing any new debt on the Real Property including lender's attorneys fees,
Seller's attorney's fees, application fees, and any other fees, costs or
expenses shall be the responsibility of Buyer. Buyer and Seller each shall pay
one-half of any realty transfer taxes and sales taxes imposed with respect to
this transaction.
ARTICLE XVII
CASUALTY AND CONDEMNATION
17.1 Casualty.
---------
Except as otherwise provided in Section 17.3 hereof, in the event of
any damage or destruction with respect to any portion of the Real Property,
occurring on or after the Effective Date and prior to Closing, (a) Buyer may not
terminate this Agreement; (b) the Purchase Price shall not be adjusted to
reflect the damage or destruction except that the Purchase Price shall be
reduced by the amount of any loss not covered by casualty insurance or as to
which coverage is denied by any insurance company; and (c) Seller and/or the
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Owner Entity shall pay to Buyer proceeds received and assign to Buyer at the
Closing all insurance proceeds or awards not yet received by Seller and/or the
Owner Entity in respect of such damage or destruction net of any proceeds or
awards or used by Seller and/or the Owner Entity to rebuild or protect the Real
Property and shall pay to Buyer the amount of any deductible or self-insured
retention not applied towards such rebuilding or protection.
17.2 Condemnation.
-------------
Except as otherwise provided in Section 17.3 hereof, in the event of
any condemnation with respect to any portion of the Real Property, occurring on
or after the Effective Date and prior to Closing, (a) Buyer may not terminate
this Agreement; (b) the Purchase Price shall not be adjusted to reflect the
condemnation; and (c) Seller and/or the Owner Entity shall assign to Buyer at
the Closing all condemnation proceeds or awards received by Seller and/or the
Owner Entity in respect of such condemnation (and any rights to receive same)
net of any costs incurred by Seller and/or the Owner Entity in obtaining such
proceeds or awards or used by Seller and/or the Owner Entity to restore the Real
Property or to integrate the balance of the Real Property into a functional
unit.
17.3 Material Casualty or Condemnation.
----------------------------------
In the case of a casualty or condemnation which results a Material Loss
with respect to the Real Property occurring on or after the Effective Date and
prior to Closing, Buyer may at its sole discretion elect to terminate this
Agreement in which event the Deposit shall be returned to Buyer and neither
party shall have any further obligations hereunder except for the Covenants
Surviving Termination. A "Material Loss" is a casualty that results as of the
69
Closing Date in the termination or announced termination of a Lease for an
Anchor Tenant or the cessation or announced cessation of business by an Anchor
Department Store with no plans to reopen, or the termination of other Leases
aggregating more than twenty percent (20%) of leasable area of the Real Property
(excluding for these purposes space covered by Leases for Anchor Tenants), or a
condemnation or taking which materially and adversely affects access to or from
the Real Property on a permanent basis or results in the permanent loss of more
than five percent (5%) of the existing leasable area of the Real Property or
which will result in the termination of any Lease for an Anchor Tenant.
ARTICLE XVIII
LIKE KIND EXCHANGE
18.1 Like Kind Exchange.
-------------------
Seller and Buyer intend to structure the purchase and sale of the
Property Assets and certain other property described in the Concurrent Contracts
as a transfer of property in an exchange of like-kind property under Section
1031 of the Internal Revenue Code of 1986, as amended (the "Exchanges"), which
will be accomplished pursuant to the terms of separate exchange agreements (the
"Exchange Agreements") between Seller and Buyer and qualified intermediaries to
be engaged by Seller and Buyer, respectively (each an "Intermediary" and
collective, the "Intermediaries"). Each party agrees to cooperate promptly and
reasonably with the other (without liability or cost to the other) and the
other's Intermediary in structuring the transfer and conveyance of the Property
Assets and such other property described in the Concurrent Contracts as part of
the Exchange. Such cooperation shall include, but not be limited to, (i) consent
70
to the assignment of all of a party's rights (but not its obligations) under
this Agreement to Intermediary, and the acknowledgment of such assignment, (ii)
the delivery of the net purchase price for the Property Assets by Buyer to the
Seller's Intermediary in accordance with the joint instructions of the Seller
and its Intermediary, (iii) the transfer of the Property Assets pursuant to a
written direction of the Buyer's Intermediary and (iv) the reassignment of a
party's rights under this Agreement from its Intermediary to the original
assignor immediately following the completion of the Exchanges, and the
acknowledgment by the other party of such reassignments. Each party agrees to
fully indemnify the other from any resulting liability to third parties
(including, but not limited to, the Intermediaries) arising out of its
cooperation with the Exchanges for the benefit of the other party, which
indemnity shall be effective from and after the date of this Agreement and shall
survive the Closing of the transactions contemplated hereunder.
ARTICLE XIX
MISCELLANEOUS
19.1 Successors and Assigns.
-----------------------
All of the terms and conditions of this Agreement are hereby made
binding upon the executors, heirs, administrators, successors and permitted
assigns of the respective parties hereto, subject to the provisions of Article
XIV.
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19.2 Gender.
-------
Words of any gender used in this Agreement shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, and vice versa, unless the context requires otherwise.
19.3 Captions.
---------
The captions in this Agreement are inserted only for the purpose of
convenient reference and in no way define, limit or prescribe the scope or
intent of this Agreement or any part hereof.
19.4 Not Construed against Drafter.
------------------------------
No provision of this Agreement shall be construed by any court or other
judicial authority against any party hereto by reason of such party's being
deemed to have drafted or structured such provisions.
19.5 Entire Agreement.
-----------------
This Agreement, the Access Agreement, the Confidentiality Agreement and
the Exhibits and Schedules attached hereto constitute the entire contract
between the parties hereto and there are no other oral or written promises,
conditions, representations, understandings or terms of any kind as conditions
or inducements to the execution hereof and none have been relied upon by either
party.
19.6 Recording.
----------
The parties agree that this Agreement shall not be recorded in any
office for the recording of real property records. Except in connection with a
lawful lis pendens action filed by Buyer, if Buyer causes this Agreement or any
72
notice or memorandum thereof to be recorded in any office for the recording of
real property records, this Agreement shall be null and void at the option of
Seller.
19.7 Time of Essence.
----------------
Time is of the essence in this transaction. If any of the dates
contemplated herein shall not fall on a Business Day, such deadline or
expiration date shall be deemed to fall upon the next Business Day.
19.8 Original Document.
------------------
This Agreement may be executed by the parties in counterparts in which
event each shall be deemed an original, but all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Agreement by facsimile shall be effective as delivery of an original.
19.9 Governing Law.
--------------
This Agreement shall be construed, and the rights and obligations of
the parties hereto, shall be determined in accordance with the laws of the State
where the Real Property is located.
19.10 Post-Closing Inspection.
------------------------
Following Closing, each party shall, upon request, give the other party
or cause its Affiliates to give the other party access to books and records with
respect to the operation of the Property for the calendar year in which Closing
occurs, for the previous calendar year and for any earlier periods for which
73
Seller or Buyer is obligated to have financial statements for the Property, for
purposes of verifying collections and remittances and the preparation by the
parties of financial statements and reports (including audited financial
statements) with respect to the Property. Such books and records shall be made
available to the parties at reasonable times and upon reasonable advance notice
to the other party and without any expense to the other party. This Section
19.10 shall survive the Closing.
19.11 Non Compete.
------------
For a period of five (5) years from and after Closing, neither Seller
nor any Affiliate of Seller shall directly or indirectly develop or construct
any property which consists (in part or in whole) of an enclosed mall primarily
being used for retail sales and which is located within five (5) miles of the
Real Property. Seller and Buyer agree that Buyer shall be entitled to seek
temporary and injunctive relief without the necessity of proving actual damages.
If any of the provisions of Section 19.11 are deemed invalid in part, it shall
be curtailed as to time, location or scope, to the minimum extent required for
its validity under the Law and will be binding on Seller and its Affiliates as
so curtailed. The parties acknowledge that no part of the Purchase Price is
allocated to this covenant by Seller.
19.12 Joint and Several Liability.
----------------------------
The liability pursuant to this Agreement of each of the parties
comprising the Seller shall be joint and several.
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19.13 Other Closings.
---------------
(a) Buyer's Affiliates have entered into certain other contracts of
even date herewith for the transfer of other properties in the Philadelphia area
or interests in such properties, such properties being ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ Meeting Mall, the Gallery at Market East, and Exton
Mall and Echelon Mall, to Seller or Seller's Affiliates ("Affiliated Contracts",
and together with this Agreement, the "Concurrent Contracts"). Furthermore, with
regard to this Agreement, Buyer or its Affiliate are negotiating agreements for
the ownership, operation and management of the Christiana Mall with Equitable
("Venture Contracts").
(b) Unless the Concurrent Contracts (other than the Concurrent
Contracts for the Plymouth Meeting Mall and/or Echelon Mall) also close at the
same time as this Agreement, Seller may, provided that the failure to close the
Concurrent Contracts (other than the Concurrent Contracts for the Plymouth
Meeting Mall and/or Echelon Mall) at the same time does not result from the
breach by Seller or PREIT and/or PREIT's Affiliates of any of their respective
obligations pursuant to such Concurrent Contracts, terminate this Agreement and
unless the failure is caused by the breach of Buyer or Buyer's Affiliates
pursuant to this Agreement or the Concurrent Contracts, neither party shall have
any further obligation to the other except for the Covenants Surviving
Termination and except as provided in Section 4.3.
(c) It shall be a condition of Buyer's obligation to close on this
Agreement that the Concurrent Contracts (other than the Concurrent Contracts for
the Plymouth Meeting Mall and/or Echelon Mall) also close at the same time and
the Venture Contracts shall have been fully negotiated at the time of Closing,
provided that the failure to close the Concurrent Contracts at the same time
does not result from the breach by Buyer or its Affiliates of any of their
respective obligations pursuant to such Concurrent Contracts.
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19.14 Settlement With Equitable
-------------------------
Seller shall use its best efforts to settle the Claim by Equitable
regarding Equitable's share of the "cash flow" (as such term is defined in the
Assumed Debt Loan Documents) from the Christiana Mall required to be paid
pursuant to the Assumed Debt Loan Documents. If Seller is unable to settle the
dispute described in the prior sentence prior to the Closing Date, then Seller
shall place into escrow with the Title Company (or such other escrow agent as
may be acceptable to Equitable) the amount claimed by Equitable and any
additional amount sufficient to satisfy Equitable that its claim as it relates
to calendar year 2002 and that part of 2003 ending on the Closing Date will also
be included in the escrowed amount together, if applicable, with the estimated
amount of Equitable's attorneys' fees in connection with the Claim that would be
due to Equitable under the Assumed Debt Loan Documents in order to cause
Equitable to waive, as to Buyer, any Claims under the Assumed Debt Loan
Documents arising through the date of Closing. Buyer hereby agrees that Seller
shall be deemed to have satisfied Seller's obligations under this Section 19.14
if Seller escrows with the Title Company at least $1,200,000.
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ARTICLE XX
CONFIDENTIALITY
20.1 Confidentiality Agreement.
--------------------------
Buyer and Seller agree to comply with the Confidentiality Agreement
which shall remain in full force and effect until the Closing at which time it
shall terminate. In the event this Agreement is terminated prior to Closing, the
Confidentiality Agreement shall remain in full force and effect in accordance
with its terms.
20.2 Public Announcements.
---------------------
Except as required by Law or the rules of any securities exchange on
which the securities of either party hereto may be traded (in which case the
disclosing party shall use all reasonable efforts to provide prior notification
to the other party), no party to this Agreement shall make any public
announcement in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without obtaining the prior
consent of the other party, and the parties shall each consult with the other as
to the timing and contents of any such announcement.
ARTICLE XXI
FURTHER UNDERTAKINGS
21.1 Further Assurances.
-------------------
Each of the parties hereto shall, acting in good faith, use its
commercially reasonable efforts to take or cause to be taken all appropriate
action, do or cause to be done all things necessary, proper or advisable, and
execute and deliver such documents and other papers, as may be required to carry
out the provisions of this Agreement and consummate and make effective the
transactions contemplated by this Agreement. Such efforts shall include the
parties' execution of such amendments to this Agreement as may be necessary in
order to effectuate the overall intent of this Agreement, and to clarify the
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parties' respective rights and obligations hereunder with regard to a specific
item, event, or circumstance.
21.2 Sale of Interests.
------------------
Notwithstanding anything contained in this Agreement to the contrary,
the sale of the Interest in the Owner Entity is subject to the ▇▇▇▇▇▇. If the
parties to the COREAs exercise their respective options to purchase the Interest
or the Access Parcel subject the ▇▇▇▇▇▇, then the obligation of the Seller to
sell the Interest to Buyer pursuant to this Agreement shall be null and void,
but all other obligations of the parties hereto shall continue in full force and
effect.
ARTICLE XXII
EQUITABLE OPTION AGREEMENT
22.1 Option Agreement Representations.
---------------------------------
It is acknowledged that Buyer shall assume Seller's obligations as
"Transferor" (as defined in the Option Agreement) under the Option Agreement. It
is contemplated that Buyer and Equitable may enter into an amendment to the
Option Agreement or a new agreement in substitution for the Option Agreement
(the "Substitute Agreement"). Seller acknowledges that to the extent Buyer is
obligated under the Option Agreement or the Substitute Agreement to make to
Equitable any or all of the representations and warranties (the "Option
Representations") which are required to be made by the Transferor pursuant to
Section 7 of the Option Agreement, Buyer shall be relying on the truthfulness
and accuracy of the Option Representations as of Closing. Accordingly, for the
limited purpose of this Article XXII Seller shall be deemed to have warranted to
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Buyer the truthfulness and accuracy, as of the Closing Date, of all of the
Option Representations.
Seller shall indemnify, hold harmless and defend Buyer and its
respective partners, members, shareholders, owners, officers, directors and
agents and their respective personal representatives, successors and assigns,
from and against any losses arising out of or caused by any claim by Equitable
against Buyer pursuant to the Option Agreement or Substitute Agreement as the
result of any of the Option Representations, as deemed having been made by
Seller to Buyer, being untrue, inaccurate or misleading as of the Closing Date.
A claim may only be made by Buyer against Seller on account of the
Option Representations to the extent that Option Holder brings a claim against
Buyer.
The indemnification set forth in this Section 22.1 shall survive the
Closing Date and shall remain in effect so long as Buyer may have liability to
Equitable on account of the Option Representations.
[signatures appear on the next page]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of the date first written above.
SELLER:
-------
NEW CASTLE ASSOCIATES, a Pennsylvania limited
partnership
By: Pan American Associates, its general partner
By: Pan American Office Investments, LP,
its general partner
By: Pan American Office Investments-GP,
Inc., a Pennsylvania corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ATTEST: BUYER:
------
CHRISTIANA MALL, LLC
/s/ [Signature Illegible] By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------- ----------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Executive Vice President
The undersigned hereby executes this Agreement for the purpose of
agreeing to act as Escrow Agent for the Deposit as provided in Article III.
Chicago Title Insurance Company
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Business Development Manager
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President