EXHIBIT 10.1
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
THE ▇▇▇▇▇ LIMITED PARTNERSHIP
("PURCHASER")
AND
SIMON PROPERTY GROUP, L.P.,
M.S. MANAGEMENT ASSOCIATES, INC.,
SIMON PROPERTY GROUP (TEXAS), L.P., AND
SPG REALTY CONSULTANTS, L.P.
("SELLER")
TABLE OF CONTENTS
PAGE
Article I. INCORPORATION OF RECITALS...................................................................3
Section 1.01 Incorporation of Recitals..............................................................3
Article II. PURCHASE AND SALE OF SIMON INTERESTS........................................................3
Section 2.01 Purchase and Sale......................................................................3
Article III. PURCHASE PRICE AND OTHER ECONOMIC CONSIDERATION.............................................3
Section 3.01 Purchase Price.........................................................................3
Section 3.02 Payment of Purchase Price..............................................................3
Section 3.03 Other Economic Consideration...........................................................4
Article IV. REPRESENTATIONS AND WARRANTIES..............................................................4
Section 4.01 Seller's Representations and Warranties................................................4
Section 4.02 Purchaser's Representations and Warranties.............................................5
Section 4.03 Pre-Closing Disclosure.................................................................6
Section 4.04 Survival...............................................................................6
Article V. CONDITIONS PRECEDENT........................................................................6
Section 5.01 Purchaser's Conditions Precedent.......................................................6
Section 5.02 Seller's Conditions Precedent..........................................................7
Section 5.03 Mutual Cooperation.....................................................................8
Section 5.04 Simultaneous Closings..................................................................8
Section 5.05 Approval Deadline; Termination........................................................10
Section 5.06 Waivers of Conditions Precedent.......................................................11
Section 5.07 Failure of Conditions Precedent Not A Default.........................................11
Article VI. CLOSING....................................................................................11
Section 6.01 Closing Date..........................................................................11
Section 6.02 Closing Documents.....................................................................11
Section 6.03 Credits, Prorations and Post-Closing Payments.........................................14
Section 6.04 Closing Costs.........................................................................16
Section 6.05 Post-Closing Payment..................................................................16
Article VII. INTERIM OPERATIONS.........................................................................16
Section 7.01 Interim Operations....................................................................16
Article VIII. CASUALTY AND CONDEMNATION..................................................................17
Section 8.01 Casualty and Condemnation.............................................................17
Article IX. CLOSING DOES NOT OCCUR; DEFAULTS AND REMEDIES..............................................17
Section 9.01 Seller Default Prior to Closing.......................................................17
Section 9.02 Purchaser Default.....................................................................18
Section 9.03 No Tender Required....................................................................18
Section 9.04 Special Termination Payment...........................................................18
Section 9.05 Rights after Closing..................................................................18
Article X. MISCELLANEOUS..............................................................................18
Section 10.01 Assignment............................................................................18
Section 10.02 Entire Agreement......................................................................18
Section 10.03 Time..................................................................................19
Section 10.04 Notices...............................................................................19
Section 10.05 Governing Law.........................................................................20
Section 10.06 Counterparts..........................................................................20
Section 10.07 Waiver................................................................................20
Section 10.08 Severability..........................................................................20
Section 10.09 Jury..................................................................................20
Section 10.10 Further Assurances....................................................................21
Section 10.11 Attorneys' Fees.......................................................................21
Section 10.12 No Third-Party Beneficiaries..........................................................21
Section 10.13 No Disclosure.........................................................................21
Section 10.14 Public Notices........................................................................21
Section 10.15 Schedules and Exhibits................................................................21
Section 10.16 Interpretation........................................................................21
EXHIBITS
Exhibit A - The Venture Companies
Exhibit B - Organizational Documents
Exhibit C - Ownership Chart
Exhibit D - Form of Promissory Note - G-2 Site
Exhibit E - Allocation of Purchase Price
Exhibit F - Form of Kan Am Assumption Agreements
Exhibit G - Schedule of Mortgage Debt
Exhibit H - Form of Houston/Interfin Modification Documents
Exhibit H-1 - Form of Houston/Interfin Restrictive Covenant
Exhibit H-2 - Form of Second Amended and Restated Limited Partnership Agreement of Houston
Development I, Limited Partnership
Exhibit H-3 - Form of Amendment to ▇▇▇▇ ▇▇▇▇▇ Department Store Restriction
Exhibit I - Schedule of ▇▇▇▇▇ ▇▇▇ Am Guaranties
Exhibit J - Form of Assignment and Assumption of Partnership Interests
Exhibit K - Form of Assignment and Assumption of Membership Interests
Exhibit L - Form of Stock Power
Exhibit M - Form of Master Agreement Termination
Exhibit N - Form of Non-Compete Agreement
SCHEDULES
Schedule 6.03(A) - Adjustments to Distributable Cash
Schedule 6.03(B) - Adjustments for Tenant Improvement Costs
Schedule 6.03(C) - Budgeted Distributable Cash and Revenues
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "AGREEMENT") is made and entered
into as of the 29th day of April, 2002 (the "EFFECTIVE DATE"), by and between
(A) THE ▇▇▇▇▇ LIMITED PARTNERSHIP, a Delaware limited partnership, as purchaser
("PURCHASER") on its own behalf and on behalf of the ▇▇▇▇▇ Interest Holders
(defined below), and (B) SIMON PROPERTY GROUP, L.P., a Delaware limited
partnership, M.S. MANAGEMENT ASSOCIATES, INC., a Delaware corporation, SIMON
PROPERTY GROUP (TEXAS), L.P., a Texas limited partnership, and SPG REALTY
CONSULTANTS, L.P., a Texas limited partnership, collectively as seller
("SELLER").
R E C I T A L S:
---------------
A. Purchaser and Seller are parties to two separate letter agreements
dated August 16, 1995 and November 30, 1995 (collectively, the "MASTER
AGREEMENT"), pursuant to which Purchaser and Seller developed and currently own
interests, directly or indirectly, in the following shopping centers:
(i) Arizona ▇▇▇▇▇, Tempe, Arizona ("ARIZONA ▇▇▇▇▇");
(ii) Arundel Mills, Hanover, Maryland ("ARUNDEL ▇▇▇▇▇");
(iii) Concord ▇▇▇▇▇, Concord, North Carolina ("CONCORD ▇▇▇▇▇");
(iv) Grapevine ▇▇▇▇▇, Grapevine, Texas ("GRAPEVINE ▇▇▇▇▇"); and
(v) ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("ONTARIO ▇▇▇▇▇").
Arizona ▇▇▇▇▇, Arundel ▇▇▇▇▇, Concord ▇▇▇▇▇, Grapevine ▇▇▇▇▇ and Ontario ▇▇▇▇▇
are sometimes referred to individually as a "PROJECT" or collectively as the
"PROJECTS." In addition, pursuant to the Master Agreement, Purchaser and its
affiliates (collectively, "▇▇▇▇▇") and Seller and its affiliates (collectively,
"SIMON") have jointly pursued certain additional developments and other
opportunities (the "POTENTIAL DEVELOPMENTS"), including without limitation, a
potential project in San Francisco, California known as "CANDLESTICK ▇▇▇▇▇".
B. Separate and apart from the Master Agreement, Simon owns a
controlling interest and ▇▇▇▇▇ owns a non-controlling interest in (i) Houston
Development I Limited Partnership, a Texas limited partnership, and (ii) its
general partner, Houston Development LLC, a Texas limited liability company
(collectively, the "INTERFIN DEVELOPMENT COMPANIES"). Houston Development I,
Limited Partnership owns a parcel of land that is located in ▇▇▇▇▇▇ County,
Texas and is known by the parties and referred to herein as the
"HOUSTON/INTERFIN SITE." The Houston/Interfin Site is not included within the
terms "PROJECT" or "POTENTIAL DEVELOPMENT" hereunder.
C. The ownership interests of ▇▇▇▇▇ and ▇▇▇▇▇ in the Projects consist
of the interests identified on EXHIBIT A attached hereto and by this reference
made a part hereof in certain
limited partnerships (collectively, the "PARTNERSHIPS"), limited liability
companies (collectively, the "LLCS") and corporations (collectively, the
"CORPORATIONS") (the Partnerships, the LLCs and the Corporations are sometimes
referred to collectively as the "VENTURE COMPANIES"). EXHIBIT A identifies the
Project to which each Venture Company relates, and the role of the Venture
Company in connection therewith. The Venture Companies for a given Project are
sometimes referred to herein collectively by the name of the Project, as for
example the "ARIZONA ▇▇▇▇▇ VENTURE COMPANY." Each entity (including the entities
comprising Seller) that owns a direct interest in a Venture Company and which is
directly or indirectly owned or controlled by Seller or Simon, is referred to
herein as a "SIMON INTEREST HOLDER." Each entity that owns a direct interest in
a Venture Company and which is directly or indirectly owned or controlled by
Purchaser or by ▇▇▇▇▇ is referred to herein as a "▇▇▇▇▇ INTEREST HOLDER." The
term "VENTURE COMPANIES" does not include the Interfin Development Companies.
D. The organizational documents for the Venture Companies are identified
on EXHIBIT B attached hereto and by this reference made a part hereof (the
"ORGANIZATIONAL DOCUMENTS"). In connection with the management and operation of
the Venture Companies, the ▇▇▇▇▇ Interest Holders and the Simon Interest Holders
are parties to the applicable limited liability company operating agreements
("OPERATING AGREEMENTS"), limited partnership agreements (collectively, the
"PARTNERSHIP AGREEMENTS") or shareholder agreements (collectively the
"SHAREHOLDER AGREEMENTS") identified on EXHIBIT B.
E. Attached hereto as EXHIBIT C is a chart depicting the ownership
structure for each of the Projects and the ownership interests of ▇▇▇▇▇ and
▇▇▇▇▇ in each of the Venture Companies.
F. The right, title and interest of each Simon Interest Holder in a
Venture Company is referred to herein as a "SIMON OWNERSHIP INTEREST." The term
"SIMON OWNERSHIP INTEREST" specifically excludes any ownership interests in the
Interfin Development Companies. The Simon Ownership Interests in the Venture
Companies for a given Project are sometimes referred to herein collectively by
the name of the Project, as for example the "ARIZONA ▇▇▇▇▇ ▇▇▇▇▇ OWNERSHIP
INTERESTS." The rights and interests of Seller in and to the Master Agreement
are referred to herein collectively as the "SIMON MASTER AGREEMENT RIGHTS."
G. Purchaser desires to buy all of the Simon Ownership Interests and the
Simon Master Agreement Rights from Seller and the Simon Interest Holders, and
Seller desires to sell (or cause the Simon Interest Holders to sell) all of the
Simon Ownership Interests, terminate the Master Agreement and extinguish the
Simon Master Agreement Rights, on the terms set forth in this Agreement.
▇. ▇▇▇▇▇ and ▇▇▇▇▇ have agreed to modify the organizational documents of
the Interfin Development Companies at the Closing hereunder, as set forth below.
I. Pursuant to a letter agreement dated March 27, 2002 between ▇▇▇▇▇ and
Simon (the "G-2 LETTER Agreement"), on March 29, 2002 (the "G-2 CLOSING DATE"),
▇▇▇▇▇ purchased a portion of Arundel ▇▇▇▇▇, known as the "G-2 BLOCK," and
compensated Simon by: (i) paying 20% of Simon's share of the purchase price to
Simon in cash on March 29, 2002, and
2
(ii) delivering to Simon a promissory note (the "G-2 NOTE") for the balance of
the purchase price, a copy of which is attached hereto as EXHIBIT D.
NOW, THEREFORE, in consideration of the mutual agreements set forth in
this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree
as follows:
ARTICLE I.
INCORPORATION OF RECITALS
SECTION 1.01 INCORPORATION OF RECITALS. The foregoing Recitals are
incorporated herein by this reference as though set forth fully hereinbelow.
ARTICLE II.
PURCHASE AND SALE OF SIMON INTERESTS
SECTION 2.01 PURCHASE AND SALE. Seller shall sell, assign, transfer and convey
(or cause the applicable Simon Interest Holder to sell, assign, transfer and
convey) to Purchaser or Purchaser's designee the Simon Ownership Interests, and
Purchaser or Purchaser's designee shall acquire the Simon Ownership Interests,
all on the terms set forth in this Agreement.
ARTICLE III.
PURCHASE PRICE AND OTHER ECONOMIC CONSIDERATION
SECTION 3.01 PURCHASE PRICE. The total consideration to be paid by Purchaser
for the Simon Ownership Interests is One Hundred Seventy-Five Million Dollars
($175,000,000) (the "PURCHASE PRICE"), allocated among the respective Projects
as set forth on EXHIBIT E attached hereto and by this reference made a part
hereof. The portion of the Purchase Price that is allocated to the Simon
Ownership Interests relative to a particular Project is referred to herein as
the "PROJECT PURCHASE PRICE" for such Project.
SECTION 3.02 PAYMENT OF PURCHASE PRICE. At each "CLOSING" (as such term is
defined in Section 6.01), Purchaser shall pay to Seller an amount equal to the
aggregate of the Project Purchase Prices for the Projects with respect to which
the Closing is occurring (as such amount may be adjusted pursuant to Section
6.03 hereof), such amount to be paid by Purchaser by federal funds wire
transferred to Seller or Seller's designee pursuant to wire instructions which
Seller agrees to furnish to Purchaser not less than two (2) business days prior
to the Closing Date (as such term is defined in Section 6.01), subject, however,
to such adjustments as are required by this Agreement (such amount, as adjusted
for each Closing, being referred to herein as the "CASH BALANCE").
3
SECTION 3.03 OTHER ECONOMIC CONSIDERATION.
(a) On the earlier to occur of October 1, 2002 or the Closing Date with
respect to Arundel ▇▇▇▇▇, Purchaser shall pay Seller the sum of
$67,500.00 (the "G-2 COMMISSION"), as payment in full of the brokerage
commission owed to Simon with respect to ▇▇▇▇▇'▇ purchase of the G-2
Block, in accordance with the G-2 Letter Agreement.
(b) At the Closing with respect to Grapevine ▇▇▇▇▇, Purchaser, pursuant to
an Assignment and Assumption Agreement in the form attached hereto as
EXHIBIT F (a "KAN AM ASSUMPTION AGREEMENT"), shall assume Simon's
obligations under Paragraph 2(A) of that certain Amended and Restated
Side Letter re: Preferences, Distributions and Other Items dated
October 31, 2001 by and among the Grapevine ▇▇▇▇▇ Venture Companies,
certain ▇▇▇▇▇ entities, certain Simon entities and Kan Am USA XV
Limited Partnership.
(c) At the Closing with respect to Ontario ▇▇▇▇▇, Purchaser, pursuant to a
Kan Am Assumption Agreement, shall assume Simon's obligations under
Paragraph 2(A) of that certain Second Amended and Restated Side Letter
re: Preferences, Distributions and Other Items effective as of March
23, 2001 but entered into as of February 8, 2002, by and among the
Ontario ▇▇▇▇▇ Venture Companies and Kan Am USA XIV Limited Partnership,
as joined by Purchaser and Seller.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser that as of the date of this Agreement:
(a) Seller and each of the other Simon Interest Holders is a limited
liability company, limited partnership or corporation, as applicable,
duly organized, validly existing and in good standing under the laws
of the state in which said entity was formed. Seller has the full
power and lawful authority under its respective organizational
documents to execute, deliver and perform this Agreement and all
documents which are contemplated to be delivered at Closing pursuant
to this Agreement, and each of the Simon Interest Holders has the full
power and lawful authority to execute, deliver and perform all
instruments and agreements contemplated by this Agreement to be
delivered by said entity. All actions necessary to confer such power
and authority upon the persons executing this Agreement (and all
documents which are contemplated by this Agreement to be executed by
the respective Simon Interest Holders) have been taken. Seller's
execution, delivery and performance of this Agreement, and each Simon
Interest Holder's execution, delivery and performance of any of the
documents contemplated to be executed and delivered at closing
pursuant to this Agreement, will not result in any violation of, or
default under, or require any notice or consent under, any of the
organizational documents of said entity.
4
(b) All of the Simon Ownership Interests are owned by Seller or, as the
case may be, the applicable Simon Interest Holder, free and clear of
any and all security agreements, financing statements, liens
(including federal, state or local tax liens and any liens arising
pursuant to state bulk sales or bulk transfer laws), encumbrances,
security interests or other claims of any kind (collectively,
"LIENS"). The Simon Ownership Interests are not subject to any option,
right of first refusal, purchase agreement, put, call or other right
to purchase (collectively, "PRE-EMPTIVE RIGHTS"), other than (i) this
Agreement (ii) the Pre-Emptive Rights of third parties expressly set
forth in the Venture Companies' Organizational Documents. The
applicable Simon Ownership Interests shall be transferred to Purchaser
upon the consummation of each Closing free and clear of all Liens and
Pre-Emptive Rights.
(c) LITIGATION. No litigation or proceedings are pending, or to the best of
Seller's knowledge, threatened against Seller or any of the Simon
Interest Holders which have or will have a material adverse effect on
the ability of Seller or any Simon Interest Holder to perform its
obligations (or to enter into the agreements contemplated to be entered
into by it) under this Agreement.
(d) FIRPTA. Neither Seller nor any of the Simon Interest Holders is a
foreign entity for purposes of Section 1445 of the Internal Revenue
Code of 1986, as amended.
(e) ERISA. None of the Simon Ownership Interests constitute "Plan Assets"
of any employee benefit plan, subject to the Employee Retirement Income
Security Act of 1974 ("ERISA") within the meaning of 29 CFR
Section 2510.3-101.
For purposes of this Agreement, any representations and warranties made
to the "best of Seller's knowledge" (or terms of similar import) shall be deemed
to mean the actual knowledge of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇, after reasonable inquiry within Seller's organization, but without
inquiry of unaffiliated third parties.
SECTION 4.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents
and warrants to Seller that as of the date of this Agreement:
(a) Purchaser is a Delaware limited partnership, duly organized and validly
existing and in good standing under the laws of the State of Delaware,
and has full power and lawful authority under Purchaser's
organizational documents to enter into and carry out the terms and
provisions of this Agreement and to execute and deliver all documents
which are contemplated by this Agreement. All actions necessary to
confer such power and authority upon the persons executing this
Agreement (and all documents which are contemplated by this Agreement
to be executed by Purchaser) have been taken. Purchaser's execution,
delivery and performance of this Agreement, and the documents
contemplated to be executed and delivered at closing pursuant to this
Agreement, will not result in any violation of, or default under, or
require any notice or consent under, any of the organizational
documents of Purchaser.
5
(b) ERISA. Purchaser shall not utilize "Plan Assets," within the meaning of
ERISA, to acquire the Simon Ownership Interests or the Simon Master
Agreement Rights.
SECTION 4.03 PRE-CLOSING DISCLOSURE. As of each Closing, Purchaser and Seller
shall each be deemed to remake and restate the representations set forth in this
Article 4, except as may be disclosed by either party to the other in writing on
or before said Closing (any such disclosure being referred to herein as a
"PRE-CLOSING DISCLOSURE"), and except for any representation or warranties
relating solely to Projects with respect to which Closing has previously
occurred.
SECTION 4.04 SURVIVAL. The representations and warranties set forth in
Sections 4.01 and 4.02, subject to modifications thereto pursuant to
Section 4.03, shall survive each Closing forever.
ARTICLE V.
CONDITIONS PRECEDENT
SECTION 5.01 PURCHASER'S CONDITIONS PRECEDENT. Purchaser's obligations under
this Agreement are subject to the satisfaction of the following conditions, the
failure of any of which as of the then-applicable "Approval Deadline" (as such
term is defined in Section 5.05(i)), shall have the consequences set forth in
Section 5.05:
(a) REPRESENTATIONS. Each and every representation and warranty set forth
in Section 4.01 shall be materially true and correct as of Closing, as
modified by any Pre-Closing Disclosures. If a representation of Seller
is limited to Seller's knowledge, and the factual matter represented
to (as modified by any Pre-Closing Disclosures) is not true and
correct in all material respects, then there shall be a failure of
this condition precedent. Notwithstanding the foregoing, if Seller
makes any material Pre-Closing Disclosure (i.e., any Pre-Closing
Disclosure which would render the representations and warranties of
Seller set forth in this Agreement false or misleading in any material
respect) to Purchaser, then Purchaser shall have the right to
terminate this Agreement, with the consequences described above in
this Section 5.01, by delivering written notice thereof to Seller on
or before (i) the Closing or (ii) the fifth (5th) business day after
Purchaser receives written notice of such Pre-Closing Disclosure (and
if such day is after the scheduled Closing Date, Closing shall be
extended accordingly). If Purchaser does not terminate this Agreement
pursuant to its rights under this Section 5.01(a), then such
representations and warranties shall be deemed modified to conform
them to the Pre-Closing Disclosures; provided, however, that if a
Pre-Closing Disclosure shall be caused by or reflect a fraudulent
misrepresentation, breach of representation or breach of Seller's
obligations under this Agreement, then in addition to its right to
terminate this Agreement, Purchaser shall be entitled to the remedies
available to it under Section 9.01.
(b) LENDER CONSENTS/APPROVALS. With respect to each Project, all "Project
Lenders" (as such term is defined below) who, by the terms of the
applicable loan documents, have the right to approve or consent to the
transactions contemplated by this Agreement (or the right to declare a
default if such approval or consent is not obtained), shall have
furnished such approvals and consents, including (if required) rating
agency approvals and/or so-called
▇
"▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇" (collectively, the "LENDER CONSENTS"). Attached
hereto as EXHIBIT G is a schedule identifying (i) the mortgage debt
applicable to each Project (each such debt obligation being referred
to herein as a "MORTGAGE LOAN"), the original principal amount of each
Mortgage Loan, the holders thereof and any servicers and agents with
respect thereto (collectively, the "PROJECT LENDERS") and (ii) any
instruments entered into by Simon (excluding the Venture Companies
themselves) in favor of the Project Lenders, which impose any recourse
obligations (including indemnities, guaranties or other pecuniary
obligations) on Simon that would survive the Closing hereunder in the
absence of the releases contemplated hereunder (the "SIMON LOAN
GUARANTIES").
(c) KAN AM CONSENTS. If and to the extent that Kan Am Realty and its
affiliates (collectively, "KAN AM") have the right to approve or
consent to the transfer of the Simon Ownership Interests to ▇▇▇▇▇
pursuant to the applicable Organizational Documents, Kan Am shall have
consented to such transfer in writing (such consents are referred to
herein as the "KAN AM CONSENTS").
(d) HOUSTON/INTERFIN SITE. Simon shall have executed and delivered, at
Closing, the documents in the form attached hereto as EXHIBIT H
(collectively, the "HOUSTON/INTERFIN MODIFICATION DOCUMENTS") (i)
amending or supplementing the venture agreements between Simon and
▇▇▇▇▇ with respect to the Houston/Interfin Site, and (ii) modifying
the restrictions under an existing agreement relative to the sale or
lease of property at a shopping center owned by ▇▇▇▇▇ and known as
"▇▇▇▇ ▇▇▇▇▇," all as set forth more particularly in EXHIBIT H. In
addition, Simon shall have caused the entity that owns the
Houston/Interfin Site to execute and deliver to ▇▇▇▇▇ a restrictive
covenant restricting certain uses of the Houston/Interfin Site, (the
"HOUSTON/INTERFIN RESTRICTIVE COVENANT"), in the form of EXHIBIT H-1
attached hereto, which shall be recorded against the land comprising
the Houston/Interfin Site at Closing.
(e) UCC SEARCHES. Purchaser (at its sole cost and expense) shall have
obtained UCC and such other searches as Purchaser may reasonably
require, dated as close as possible to the Closing, confirming that the
Simon Ownership Interests are owned by the applicable Simon Interest
Holder free and clear of all Liens.
(f) NO DEFAULT. Seller shall not be in default of any of its material
obligations in any material respect.
SECTION 5.02 SELLER'S CONDITIONS PRECEDENT. The obligations of Seller under
this Agreement are contingent upon any one or more of the following, the failure
of any of which as of the then-applicable "Approval Deadline" (as such term is
defined in Section 5.05(i) shall have the consequences set forth in
Section 5.05.
(a) REPRESENTATIONS. Each and every representation and warranty set forth
in Section 4.02 shall be true and correct in all material respects as
of Closing.
7
(b) SIMON LOAN GUARANTIES. With respect to each of the Simon Loan
Guaranties, the applicable Project Lender shall have terminated the
Simon Loan Guaranty or released Simon from all further obligations and
liabilities arising thereunder (said releases are referred to herein
collectively as the "SIMON LOAN RELEASES").
(c) ▇▇▇▇▇ ▇▇▇ AM GUARANTIES. EXHIBIT I identifies certain guaranties and
indemnities made by Seller and its affiliates in favor of Kan Am
(collectively, the "▇▇▇▇▇ ▇▇▇ AM GUARANTIES") in connection with the
Venture Companies. With respect to each of the ▇▇▇▇▇ ▇▇▇ Am Guaranties,
the applicable Kan Am entities (as identified on EXHIBIT I) shall have
terminated the ▇▇▇▇▇ ▇▇▇ Am Guaranty or released Simon from all further
obligations and liabilities arising thereunder (said releases are
referred to herein collectively as the "▇▇▇▇▇ ▇▇▇ AM RELEASES").
(d) NO DEFAULT. Purchaser shall not be in default of any of its material
obligations in any material respect.
SECTION 5.03 MUTUAL COOPERATION. Seller and Purchaser will cooperate
diligently and in good faith to satisfy the foregoing conditions precedent,
including using commercially reasonable efforts to obtain the Lender Consents,
the Kan Am Consents, the Simon Loan Releases, the ▇▇▇▇▇ ▇▇▇ Am Releases and the
other consents and approvals set forth in Sections 5.01 and 5.02, as soon as
possible after the Effective Date hereof and, in any event, on or before the
Approval Deadline (defined below); PROVIDED, however, that Purchaser shall not
be required to (i) pay any fees to obtain the Lender Consents or the Simon Loan
Releases, other than (x) fees expressly required to be paid by the terms of the
existing documents evidencing or securing the Mortgage Loans (collectively, the
"LOAN DOCUMENTS"), which shall be shared equally by Seller and Purchaser as
provided in Section 6.04 below and (y) out-of-pocket expenses required to be
reimbursed to Project Lenders (including rating agencies) for counsel fees and
the like, which also shall be shared equally by Purchaser and Seller as provided
in Section 6.04 below, (ii) accept any modification of any Loan Document that
may be requested or required by any Project Lender as a condition to furnishing
a Lender Consent or a Simon Loan Release, or (iii) pay any fees to obtain the
Kan Am Consents or the Kan Am Releases (other than out-of-pocket expenses
required to be reimbursed to Kan Am for counsel fees and the like, which also
shall be shared equally by Purchaser and Seller as provided in Section 6.04
below) or accept any modification of any Organizational Documents that may be
requested or required by Kan Am as a condition of furnishing the Kan Am Consents
or the ▇▇▇▇▇ ▇▇▇ Am Releases. Notwithstanding the foregoing, if Purchaser (in
its sole and absolute discretion) elects to refinance any Mortgage Loan at
Closing, Seller shall cooperate in advance with such refinancing if it is
structured so that Simon will not be required to furnish any guaranties or
indemnities in connection therewith, and in that case (subject to the closing of
said refinancing) the requirement of obtaining a Simon Loan Release with respect
to the Mortgage Loan that is being refinanced shall be deemed satisfied.
SECTION 5.04 SIMULTANEOUS CLOSINGS. Except as expressly provided below in this
Section 5.04, (i) it shall be an additional condition precedent to the Closing
hereunder that the Closing shall occur simultaneously with respect to all
Projects, and (ii) neither Seller nor Purchaser shall have
8
any right or obligation to proceed to Closing with respect to any Project unless
the Closings for all other Projects have already occurred or are occurring
simultaneously.
(a) POSTPONEMENT OF ARIZONA ▇▇▇▇▇ CLOSING FOR TAUBMAN PURCHASE RIGHTS.
Purchaser and Seller acknowledge that Taubman Realty Group, L.P.
("TRG") has the right to purchase one-half of the Arizona ▇▇▇▇▇ ▇▇▇▇▇
Ownership Interests pursuant to certain rights (collectively, the "PRO
RATA PURCHASE RIGHTS") set forth in Section 11.3 of the Amended and
Restated Limited Liability Company Agreement of Arizona ▇▇▇▇▇, L.L.C.,
Section 10.3 of the Limited Liability Company Agreement of Arizona
▇▇▇▇▇ II, L.L.C., and Section 10.3 of the Amended and Restated Limited
Liability Company Agreement of MTS Services of Tempe, L.L.C
(collectively, the "PRO-RATA PURCHASE PROVISIONS"). On March 27, 2002,
Seller notified TRG of TRG's right to exercise the Pro Rata Purchase
Rights with respect to the Arizona ▇▇▇▇▇ ▇▇▇▇▇ Ownership Interests. If
TRG exercises the Pro Rata Purchase Rights in accordance with the
Pro-Rata Purchase Provisions, then, provided all other conditions
precedent to the Closing have been satisfied or waived, (i) Purchaser
shall be obligated to purchase (and at Closing shall purchase) only
one-half of the Arizona ▇▇▇▇▇ ▇▇▇▇▇ Ownership Interests, and the other
one-half of the Arizona ▇▇▇▇▇ ▇▇▇▇▇ Ownership Interests will be
transferred or assigned to TRG or its designee in accordance with the
Pro-Rata Purchase Provisions, (ii) the Purchase Price for the Arizona
▇▇▇▇▇ Ownership Interests purchased by Purchaser shall be reduced
proportionately, and (iii) if necessary, in order to permit the
simultaneous closing with TRG under the Pro-Rata Purchase Provisions
and the Closing of Purchaser's acquisition of one-half of the Arizona
▇▇▇▇▇ ▇▇▇▇▇ Ownership Interests under this Agreement, the Closing Date
with respect to Arizona ▇▇▇▇▇ shall be the later of (x) the initial
Closing Date with respect to the other Projects hereunder, or (y) the
date provided for the closing under the Pro-Rata Purchase Provisions
(i.e., sixty (60) days after the date TRG exercises the Pro-Rata
Purchase Rights). Specifically, if TRG exercises its Pro-Rata Purchase
Rights, then the Project Purchase Price payable by Purchaser for the
Arizona ▇▇▇▇▇ ▇▇▇▇▇ Ownership Interests (subject to adjustment as
contemplated under Section 6.03) will be $14,022,500 and the aggregate
Purchase Price will be reduced accordingly.
The postponement of the Arizona ▇▇▇▇▇ Closing as provided in
this Section 5.04(a) shall not affect the Closing Date of the other
Projects.
(b) POSTPONEMENT OF CLOSING OF A SINGLE PROJECT. In addition to the
possible postponement of Closing with respect to Arizona ▇▇▇▇▇ as
provided in Section 5.04(a) above, the Closing with respect to not
more than one (1) Project (the "DELAYED PROJECT") may be postponed to
a date after the Closing with respect to the other Projects (excluding
the Arizona ▇▇▇▇▇ Closing, if postponed as provided above) (the
"INITIAL CLOSING") as provided in this Section 5.04(b) if the
conditions precedent to the Closing with respect to the Delayed
Project are not satisfied or waived on or before the Approval
Deadline. In such event, (i) the Approval Deadline will be extended as
provided in Section 5.05 with respect to the Delayed Project only, and
(ii) the Initial Closing will occur on the scheduled Closing Date with
respect to all Projects other than (x) the Delayed Project and (y) if
and only if applicable under Section 5.04(a), Arizona ▇▇▇▇▇, and (iii)
the Closing with respect to the
9
Delayed Project will occur on the date that is the first to occur of
the Outside Closing Date (defined below) or five (5) business days
after the conditions precedent to the closing of the Delayed Project
are satisfied or waived.
Unless the conditions precedent to the Closing of four (4) or
more Projects are satisfied on or before the Approval Deadline, then
the Approval Deadline shall be extended as provided in Section 5.05,
but not beyond the Outside Approval Deadline (defined below), and the
Closing with respect to all of the Projects will be likewise postponed.
Arizona ▇▇▇▇▇ may be the Delayed Project, if there are
conditions precedent to the Arizona ▇▇▇▇▇ Closing (other than the
postponement pursuant to Section 5.04(a) above) that are not satisfied
or waived by the Approval Deadline. The conditions precedent to the
Arizona ▇▇▇▇▇ Closing shall be deemed to be satisfied for purposes of
this Section 5.04(b) and Section 5.05(a) below, if the Arizona ▇▇▇▇▇
Closing is postponed pursuant to Section 5.04(a) above but all other
conditions precedent to the Arizona ▇▇▇▇▇ Closing are satisfied.
SECTION 5.05 APPROVAL DEADLINE; TERMINATION. The term "APPROVAL DEADLINE"
shall mean June 1, 2002, as the same may be extended pursuant to this Section
5.05. If the conditions precedent to Closing of any of the Projects (other than
the postponement of Closing with respect to Arizona ▇▇▇▇▇ pursuant to Section
5.04(a) above) are not satisfied or waived on or before the Approval Deadline
(as theretofore extended), then Purchaser and Seller shall each have the right
to extend the Approval Deadline for two (2) successive one-month periods (i.e.
first to July 1, 2002 and then to August 1, 2002), by furnishing notice thereof
to the other party on or before the then applicable Approval Deadline, PROVIDED
however that said notice shall only be effective if the condition or conditions
in question are not satisfied or waived on or before the Approval Deadline that
was in effect prior to said proposed extension and (y) neither party shall have
the right to extend the Approval Deadline beyond August 1, 2002 (the "OUTSIDE
APPROVAL DEADLINE"); and PROVIDED FURTHER, however, that (x) if there is just
one (1) Delayed Project, as provided in Section 5.04(b) above, then the
extension of the Approval Deadline shall apply only to such Delayed Project and
the parties will proceed to the Closing with respect to the other Projects as if
the Approval Deadline had not been extended, and (y) otherwise, the extension of
the Approval Deadline shall apply to all Projects and the Closing with respect
to all Projects will be likewise postponed.
(a) TERMINATION WITH RESPECT TO ALL PROJECTS. Unless the conditions
precedent to the Closing of four (4) or more Projects are satisfied on
or before the Approval Deadline (as the same may be extended), then
upon written notice from either party to the other, this Agreement
shall be terminated with respect to all of the Projects.
(b) TERMINATION WITH RESPECT TO DELAYED PROJECT ONLY. If the conditions
precedent to the Closing of a single Delayed Project (only) are not
satisfied or waived on or before the Approval Deadline (as the same may
be extended), then upon written notice from either party to the other,
this Agreement shall be terminated with respect to the Delayed Project
only.
10
SECTION 5.06 WAIVERS OF CONDITIONS PRECEDENT. Any condition precedent to the
Closing hereunder may be waived by the party (or in the case of the joint
conditions contained in Section 5.03, all parties) for whose benefit such
condition exists (such election being at the sole and absolute discretion of
such party), with any such condition being deemed waived in the event that the
Closing occurs and provided further that in such event the other party shall
have no liability to the waiving party related to the matter or matters so
waived.
SECTION 5.07 FAILURE OF CONDITIONS PRECEDENT NOT A DEFAULT. Subject to the
provisions of Article IX, the failure of any of the conditions precedent to
Closing set forth in this Article V shall not, solely by virtue of such failure,
constitute a default by either Purchaser or Seller. Subject to the provisions of
Article IX, in the event that a condition precedent to either or both of
Seller's or Purchaser's obligation to close the transaction has not been
satisfied as of Closing (as the same may be adjourned pursuant to Section 5.05
or otherwise provided in this Agreement), the party whose condition has not been
satisfied may terminate this Agreement by written notice to the other party as
provided in Sections 5.05, as applicable.
ARTICLE VI.
CLOSING
SECTION 6.01 CLOSING DATE. The "CLOSING" of the transactions contemplated by
this Agreement (that is the payment of the Purchase Price, the transfer of the
Simon Ownership Interests, and the satisfaction of all other terms and
conditions of this Agreement) shall occur on the date (the "CLOSING DATE") which
is the first business day after the Approval Deadline (i.e., June 3, 2002 if the
Approval Deadline is not extended; July 2, 2002 if the Approval Deadline is
extended for only one month; and August 2, 2002 if the Approval Deadline is
extended for two months), at the office of Purchaser in Arlington, Virginia, or
at such other time and place as Seller and Purchaser shall agree in writing. If,
pursuant to Section 5.04, the Initial Closing occurs with respect to fewer than
all of the Projects, or shall occur in separate stages, then (i) the Closing
with respect to a given Project shall be deemed to mean the execution and
delivery of all of the documents contemplated under Sections 6.02 that relate
solely to said Project, the Venture Companies for said Project or the Simon
Ownership Interests for said Project, and the payment of the Cash Balance
applicable to said Closing, subject to adjustment as provided in Section 6.03,
all as provided in this Article VI, and (ii) the term "Closing Date," as it
relates to any Project, shall be the date on which the Closing with respect to
said Project is required to occur, subject to the satisfaction of all the terms
and conditions of this Agreement.
SECTION 6.02 CLOSING DOCUMENTS.
(a) SELLER'S CLOSING DELIVERIES. On the business day prior to each Closing
Date, Seller shall deposit (or shall cause the applicable Simon
Interest Holder to deposit) with Chicago Title Insurance Company (or
another national title insurance company approved by both Seller and
Purchaser), as escrowee (the "ESCROWEE") for delivery to Purchaser on
the Closing Date each of the following (duly executed by Seller or the
applicable Simon Interest Holder), with respect to all Projects and
Venture Companies that are the subject
11
of said Closing, provided that the documents described in Sections
6.02(a)(iv), 6.02(a)(xii), and 6.02(a)(xiii) shall be delivered at the
time of the first Closing to occur:
(i) Two (2) counterparts of an Assignment and Assumption of Partnership
Interests with respect to each Venture Company that is a limited
partnership, in the form attached hereto as EXHIBIT J (each, an
"ASSIGNMENT OF PARTNERSHIP INTERESTS").
(ii) Two (2) counterparts of an Assignment and Assumption of Membership
Interests, with respect to each Venture Company that is a limited
liability company, in the form attached hereto as EXHIBIT K (each, an
"ASSIGNMENT OF MEMBERSHIP INTERESTS")
(iii) Original stock certificates evidencing said entities shares of stock
in each of the Venture Companies that is a corporation, together with
stock transfer powers in the form attached hereto as EXHIBIT L,
executed by the applicable Simon Interest Holder.
(iv) Two (2) counterparts of a Termination and Mutual Release Agreement,
in the form attached hereto as EXHIBIT M, with respect to the Master
Agreement (the "MASTER AGREEMENT TERMINATION").
(v) Such filings, in the appropriate public records, as may be
appropriate to evidence the change in composition of the Venture
Companies (including, without limitation, amendments to partnership
certificates and certificates of existence for limited liability
companies).
(vi) Such instruments as may be necessary or appropriate to reflect the
resignation of all persons affiliated with or designated by Seller,
as officers, directors, managers or other officials of any of the
Venture Companies.
(vii) Such instruments, if any, as may be required to be filed with any
financial institution so as to extinguish any rights on the part of
Seller or its officers, directors, or employees or affiliates to
withdraw funds of the Venture Company from any bank account or
similar financial account owned by any of the Venture Companies.
(viii) A certificate updating Seller's representations and warranties under
Section 4.01.
(ix) Evidence of Seller's authority (and the authority of each of the
Simon Interest Holders) to consummate the transactions contemplated
herein (such as certified resolutions from the board of directors of
Simon Property Group, Inc.), in a form reasonably satisfactory to
Purchaser.
(x) All other documents reasonably and customarily required in order to
perfect the conveyance, transfer and assignment of the Simon
Ownership Interests to Purchaser.
(xi) With respect to each entity transferring Simon Interests to
Purchaser, an affidavit stating, as required under Section 1445,
Seller's U.S. tax payer identification number and that Seller is not
a foreign person within the meaning of Section 1445 of the Internal
Revenue Code.
12
(xii) Two (2) counterparts of the applicable Kan Am Assumption Agreement,
as and when required pursuant to Section 3.03(b) or 3.03(c), as the
case may be.
(xiii) Two (2) counterparts of the Houston/Interfin Modification Documents,
and two (2) original executed copies of the Houston/Interfin
Restrictive Covenant in recordable form.
(xiv) Such assignment and assumption documents relating to the loan
documents as reasonably requested by Purchaser or Seller consistent
with Section 5.03; provided, however, that such documents shall not
impose any greater obligations on Seller or take away any rights from
Seller then provided under this Agreement.
(xv) An assignment from Simon Property Group (Texas), L.P. to ▇▇▇▇▇ Texas
Acquisitions Limited Partnership of a (0.25%) limited partner
interest in Houston Development I, Limited Partnership. With respect
to the assignments and other transfer documents identified above, the
assignee, or transferee, shall be the corresponding ▇▇▇▇▇ Interest
Holder in the applicable Venture Company, unless otherwise designated
by Purchaser to Seller in writing not less than (3) business days
prior to the Closing.
(xvi) A separate non-compete agreement, in the form attached hereto as
EXHIBIT N (each, a "NON-COMPETE AGREEMENT"), for each Project with
respect to which a Closing is then occurring.
(b) PURCHASER'S CLOSING DELIVERIES. Except as otherwise provided below, on
the business day prior to each Closing Date, Purchaser shall deposit
with the Escrowee for delivery to Purchaser on the Closing Date each of
the following (duly executed by Purchaser, if applicable), with respect
to all Projects and Venture Companies that are the subject of said
Closing, provided that the documents described in Sections 6.02(b)(iv),
(ix) and (x) shall be delivered at the time of the first Closing to
occur:
(i) the Cash Balance, which shall be deposited with the Escrowee on the
Closing Date;
(ii) Two (2) counterparts of an Assignment of Partnership Interests with
respect to each of the Venture Companies that is a limited
partnership;
(iii) Two (2) counterparts of an Assignment of Membership Interests, with
respect to each Venture Company that is a limited liability company;
(iv) Two (2) counterparts of the Master Agreement Termination;
(v) Such filings, in the appropriate public records, as may be
appropriate to evidence the change in composition of the Venture
Companies (including, without limitation, amendments to partnership
certificates, certificates of existence for limited liability
companies);
(vi) A certificate updating Purchaser's representations and warranties
under Section 4.02;
13
(vii) Evidence of Purchaser's authority (and the authority of each of the
▇▇▇▇▇ Interest Holders) to consummate the transactions contemplated
herein, in a form reasonably satisfactory to Seller;
(viii) Such assignment and assumption documents relating to the loan
documents as reasonably requested by Purchaser or Seller consistent
with Section 5.04; provided, however, that such documents shall not
impose any greater obligations on Seller or take away any rights from
Seller then provided under this Agreement;
(ix) Two (2) counterparts of the applicable Kan Am Assumption Agreement,
as and when required pursuant to Sections 3.03(b) or 3.03(c), as the
case may be;
(x) Two (2) counterparts of the Houston/Interfin Modification Documents;
(xi) An assignment from ▇▇▇▇▇ Texas Acquisitions Limited Partnership to
Simon Property Group (Texas), L.P., of a 50% membership interest in
Houston Development, L.L.C.
(xii) Two (2) counterparts of a Non-Compete Agreement for each Project with
respect to which a Closing is then occurring; and
(xiii) The original Simon Loan Releases and the original ▇▇▇▇▇ ▇▇▇ Am
Releases, together with photocopies of the Lender Consents and the
Kan Am Consents.
(c) JOINT CLOSING DELIVERIES. At each Closing, Purchaser and Seller shall
deliver to the other duly executed counterparts of a closing statement
prepared in accordance with Section 6.03.
SECTION 6.03 CREDITS, PRORATIONS AND POST-CLOSING PAYMENTS.
(a) PRORATIONS. There shall be no prorations, adjustments or
apportionments of any items of income or expense with respect to the
Projects, the Venture Companies or the Simon Ownership Interests,
except as provided in Section 6.03(b) below. In particular, there
shall be no proration of any matter customarily prorated in connection
with a real estate closing. At Closing, except as expressly provided
below, all assets and liabilities of each Venture Company (including,
without limitation, accounts payable, accounts receivable, trademarks,
tradenames and cash (including security deposits, reserves, and any
amounts required to be maintained on deposit with Project Lenders))
shall remain the property of (or, as the case may be, an obligation
of) the applicable Venture Company, with no adjustment or credit to
Seller.
(b) DISTRIBUTIONS. At the Closing, Seller shall be entitled to the
following cash distributions with respect to the operations of the
Venture Companies:
(i) To the extent not previously paid or otherwise paid prior to Closing,
distributable cash from the operation of the Venture Companies for
the fiscal quarter ending March 31, 2002 will be calculated and
distributed to Simon in the same manner as distributable cash for
fiscal year 2001 was calculated and distributed (i.e., adjusted funds
from
14
operations, or FFO based on actual first quarter results), with
the following additional adjustments: (u) adjustment for net
recoveries as set forth in the FY2002 Project budgets, allocated
monthly on a straight-line basis, (v) deduction of the annual rent
abatement as set forth in the FY2002 Project budgets as set forth in
SCHEDULE 6.03(e) attached hereto, allocated monthly on a
straight-line basis, (w) adjustment for percentage rent as set forth
on SCHEDULE 6.03(d) attached hereto, (x) deduction for bad debt
reserves as normally determined, but including an additional amount
to reserve one hundred percent (100%) of litigation receivables,
(y) deduction for property capital expenditures as set forth on
SCHEDULE 6.03(a) attached hereto, and (z) adjustment for budgeted
tenant improvement costs and other tenant capital costs, based on the
applicable percentage(s) of minimum rents specified in the FY2002
Project budgets, as set forth on SCHEDULE 6.03(b) attached hereto.
(ii) To the extent not otherwise paid prior to Closing, at Closing Simon
will receive distributions with respect to the period of April, 1,
2002 through the Closing Date in accordance with budgeted
distributable cash specified in the FY2002 Project budgets, as set
forth on SCHEDULE 6.03(c) attached hereto. Such amounts shall not be
adjusted (upward or downward) on account of positive or negative
variances between budgeted and actual results. For the purpose of
calculating the distributions payable to Seller under this Section
6.03(b)(ii), if the Closing occurs on the first day of a calendar
month then distributions payable to Simon will be calculated through
the preceding calendar month and if the Closing occurs on a day other
than the first day of a calendar month then the distributions for
such month will be prorated on a per diem basis and the actual number
of days in such month, with Simon receiving the amount attributable
to the period from the first day of such month through and including
the day immediately preceding the Closing.
(iii) Distributable cash otherwise payable to Simon pursuant to this
Agreement shall not be reduced by the amount of any payments of
distributable cash from fiscal year 2001, even if such payments were
made during fiscal year 2002. Distributions actually paid to Simon
(whenever paid) on account of the fiscal quarter ending March 31,
2002 or on account of subsequent periods, including payments of
Simon's "preferential return" under the Organizational Documents,
shall be credited against the amounts otherwise due to Simon under
Section 6.03(b)(i) or Section 6.03(b)(ii), respectively.
(iv) Notwithstanding anything to the contrary set forth in the
Organizational Documents, the distributions and other amounts payable
to Simon under Section 6.03(b)(i) and Section 6.03(b)(ii), shall be
final at Closing and shall not be subject to post-Closing
reproration, reconciliation or adjustment based on actual operating
results or otherwise.
(c) ASSET MANAGEMENT FEE. The applicable Venture Companies will continue
to pay the asset management fees payable to Simon pursuant to the
Master Agreement through the Closing, based on budgeted revenues set
forth in SCHEDULE 6.03(c) (rather than actual revenues); PROVIDED,
however, if the Closing occurs on the first day of a calendar month
then the asset management fee payable to Simon will be calculated
through the preceding calendar month and if the Closing occurs on a
day other than the first day of a calendar
15
month then the asset management fee for such month will be prorated on
a per diem basis and the actual number of days in such month, with
Simon receiving the amount attributable to the period from the first
day of such month through and including the day immediately preceding
the Closing.
SECTION 6.04 CLOSING COSTS.
(a) THIRD PARTY CONSENTS. The costs and expenses of obtaining requisite
governmental and other third party consents and approvals (including
administrative fees and similar costs payable to governmental agencies,
Project Lenders, rating agencies and other parties to the
organizational documents who may have approval rights) will be paid 50%
by Purchaser and 50% by Seller.
(b) RECORDING FEES, ETC. Recording fees, transfer taxes and similar
Closing costs and expenses (if any) that may be payable in connection
with the transactions contemplated under this Agreement shall be paid
50% by Purchaser and 50% by Seller. The parties will cooperate to
minimize such costs and expenses.
(c) OTHER COSTS AND EXPENSES. Except as provided above, Purchaser and
Seller shall each be responsible for its own costs and expenses in
connection with this transaction, including the fees of its respective
attorneys and advisors.
SECTION 6.05 POST-CLOSING PAYMENT.
(a) CANDLESTICK ▇▇▇▇▇. If, at any time prior to or after the Closing, ▇▇▇▇▇
abandons pursuit of the Candlestick ▇▇▇▇▇ Potential Development and
records on its books related pursuit costs of $2,500,000 or more as a
loss or expense, then, within thirty (30) days thereafter (or at the
first Closing, if ▇▇▇▇▇ records such costs as a loss or expense prior
to the first Closing), Seller shall reimburse ▇▇▇▇▇ for up to Five
Hundred Thousand Dollars ($500,000.00) of pursuit costs incurred with
respect to the Candlestick ▇▇▇▇▇ Potential Development over and above
such pursuit costs giving rise to the loss or expense recorded by ▇▇▇▇▇
on its books. This obligation shall survive the Closing in perpetuity.
ARTICLE VII.
INTERIM OPERATIONS
SECTION 7.01 INTERIM OPERATIONS. Each Project and the Venture Companies
relative to said Project shall continue to be operated in the ordinary course of
business through the Closing with respect to said Project, in accordance with
the terms of the applicable Organizational Documents and historical budgets and
operations (including, without limitation, maintenance and use of reserves, and
frequency of distributions); provided, however, that (i) the proposed leases to
"Casual Corner" at Ontario ▇▇▇▇▇ and to "Comp USA" at Grapevine ▇▇▇▇▇ shall be
deemed approved and shall not require Simon's further consent or approval under
the applicable Organizational Documents, and (ii) from and after the
satisfaction of the conditions precedent with respect to any Project, Simon
shall promptly approve any new lease for such Project if such
16
approval is requested by Purchaser; provided that Simon shall have no liability
or obligation thereunder, and (iii) with respect to the Arundel ▇▇▇▇▇ G-2 Block,
Simon shall cooperate with ▇▇▇▇▇ in connection with the transfer of the G-2
Block to ▇▇▇▇▇ or its designee and/or the financing of the G-2 Block, including
(without limitation) executing any deeds or consents that may be reasonably
required, provided that Simon shall not incur any liabilities, costs or expenses
as a consequence thereof, and provided further that ▇▇▇▇▇ will indemnify Simon
from any and all liabilities, costs and expenses which arise therefrom.
ARTICLE VIII.
CASUALTY AND CONDEMNATION
Section 8.01 Casualty and Condemnation. The rights and obligations of
Purchaser and Seller under this Agreement shall not be affected by the
occurrence of any fire or other casualty with respect to any Project, or the
occurrence of any pending or threatened condemnation proceeding with respect to
any Project; PROVIDED, however, if as consequence of any such casualty or
condemnation proceeding the applicable Project Lender accelerates the applicable
Mortgage Loan or does not allow the borrower to apply the proceeds to the repair
and restoration of the applicable Project, then Purchaser shall have the right
to terminate this Agreement with respect to such Project, upon notice to Seller
within thirty (30) days after notice from the Project Lender that it intends to
take such action, and, if applicable, at Purchaser's election the Closing Date
with respect to such Project shall be adjourned to the date which is thirty (30)
days after the Project Lender notifies the borrower that it intends to take such
action . To the extent that casualty or condemnation proceeds are received by
any Venture Company prior to Closing, said proceeds shall remain the property of
said Venture Company and shall not be distributed to (and Seller shall not
receive a credit for) the amount of any such proceeds.
ARTICLE IX.
CLOSING DOES NOT OCCUR; DEFAULTS AND REMEDIES
SECTION 9.01 SELLER DEFAULT PRIOR TO CLOSING. Notwithstanding anything to the
contrary contained in this Agreement, if (i) Seller is in material default or
material breach of its obligations under this Agreement and (ii) Purchaser is
not otherwise in material default or material breach hereunder then, at
Purchaser's sole discretion, Purchaser may (a) terminate this Agreement upon
written notice to Seller (and upon such termination, this Agreement shall be
null and void as to any Projects with respect to which the Closing has not
previously occurred, and as to such Projects neither party shall have any rights
or obligations under this Agreement except those that specifically survive such
termination) it being agreed that any such termination shall be in addition to
and shall not limit or preclude any other remedies that Purchaser may have at
law or in equity as consequence of Seller's default, and/or (b) Purchaser may
pursue any and all remedies at law or in equity, including but not limited to
damages (including, without limitation, costs and expenses incurred by Purchaser
in connection with the financing of the Purchase Price, if applicable) and
specific performance, singly, successively, cumulatively or in any combination
that may be available to Purchaser at law or in equity.
17
SECTION 9.02 PURCHASER DEFAULT. Notwithstanding anything to the contrary
contained in this Agreement, if (i) Purchaser is in material default or material
breach of its obligations under this Agreement and (ii) Seller is not otherwise
in material default or material breach hereunder, then at Seller's sole
discretion, Seller may (a) terminate this Agreement upon not less than thirty
(30) days prior written notice to Purchaser, provided that Purchaser shall not
cure said default within said period of time (and upon such termination, this
Agreement shall be null and void as to any Projects with respect to which a
Closing has not previously occurred, and as to such Projects neither party shall
have any rights or obligations under this Agreement except those that
specifically survive such termination), it being agreed that any such
termination shall be in addition to and shall not limit or preclude any other
remedies that Seller may have at law or in equity as consequence of Purchaser's
default, and/or (b) pursue any and all remedies at law or in equity, including
without limitation damages and specific performance, singly, successively,
cumulatively or in any combination that may be available to Seller at law or in
equity.
SECTION 9.03 NO TENDER REQUIRED. If Seller is in material default or breach of
its obligations hereunder, Purchaser is not in material default or breach of its
obligations hereunder and Purchaser is otherwise prepared to pay the Purchase
Price, Purchaser may exercise its remedies pursuant to Section 9.01 without
tendering the Cash Balance.
SECTION 9.04 SPECIAL TERMINATION PAYMENT. If this Agreement is terminated
prior to Closing for any reason other than the default of Seller, then within
ten (10) business days after such termination Purchaser shall pay to Simon the
amount of Three Hundred Nine Thousand Dollars ($309,000.00) (the "TERMINATION
FEE"), (i.e., the increased proceeds that would have been payable to Simon in
connection with the sale of the G-2 Block to ▇▇▇▇▇ if the purchase price for the
G-2 Block were increased by $1,000,000, as originally requested by Simon). No
Termination Fee shall be due or payable to Simon if this Agreement is terminated
as a consequence of Seller's default hereunder. Purchaser's obligation to pay
the Termination Fee to Simon under the conditions stated above shall survive the
termination of this Agreement.
SECTION 9.05 RIGHTS AFTER CLOSING. After Closing, Seller and Purchaser shall,
subject to the terms and conditions of this Agreement, have such rights and
remedies as are available at law or in equity.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 ASSIGNMENT. Neither this Agreement nor any interest hereunder
shall be assigned or transferred by Purchaser or Seller (it being understood
that Purchaser may take title to any Simon Ownership Interest in a separate
affiliate or related entity).
SECTION 10.02 ENTIRE AGREEMENT. This Agreement (together with the other
agreements expressly referred to herein) constitutes the entire agreement
between Seller and Purchaser with respect to the sale of the Simon Ownership
Interests. This Agreement shall not be modified or amended except in a written
document signed by Seller and Purchaser. Any prior agreement or
18
understanding between Seller and Purchaser concerning the sale of the Simon
Ownership Interests is hereby rendered null and void.
SECTION 10.03 TIME. Time is of the essence of this Agreement. In the
computation of any period of time provided for in this Agreement or by law, the
day of the act or event from which the period of time runs shall be excluded,
and the last day of such period shall be included, unless it is a Saturday,
Sunday, or legal holiday, in which case the period shall be deemed to run until
the end of the next day which is not a Saturday, Sunday, or legal holiday.
SECTION 10.04 NOTICES. All notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and delivered (i)
personally, (ii) by certified mail, return receipt requested, postage prepaid,
(iii) by overnight courier (such as Federal Express) or (iv) by facsimile
transmission (with a copy sent via (i), (ii), or (iii)), addressed as follows:
1. If to Seller:
c/o Simon Property Group, Inc
Merchants Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(telecopy number ▇▇▇ ▇▇▇ ▇▇▇▇)
With a copy to:
c/o Simon Property Group, Inc
Merchants Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
(telecopy number ▇▇▇ ▇▇▇ ▇▇▇▇)
2. If to Purchaser:
The ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ R Parent, Exec. VP and CFO
(telecopy number 703/526-5344)
With a copy to:
The ▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Exec. VP and General Counsel
(telecopy number 703/526-5198)
and a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(telecopy number 312/236-7516)
Either party hereto may change the address for receiving notices,
requests, demands or other communication by notice sent in accordance with the
terms of this Section 10.04. All notices given in accordance with the terms
hereof shall be deemed received (1) when delivered, if personally delivered, (2)
upon delivery or refusal of delivery, if sent by certified mail, return receipt
requested, postage prepaid, (3) the next business day after deposit with the
courier company, if sent by overnight courier, and (4) on the day sent, if sent
by facsimile transmission prior to 5:00 P.M. in the recipient's time zone on any
given business day and on the next business day, if received after said time.
SECTION 10.05 GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware
without regard to Delaware law regarding choice of laws..
SECTION 10.06 COUNTERPARTS. This Agreement may be executed in any number of
identical counterparts, any or all of which may contain the signatures of fewer
than all of the parties but all of which shall be taken together as a single
instrument.
SECTION 10.07 WAIVER. The failure by either party to enforce against the other
any term of this Agreement shall not be deemed a waiver of such party's right to
enforce against the other party the same or any other term in the future.
SECTION 10.08 SEVERABILITY. If any one or more of the provisions hereof shall
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision were not herein contained.
SECTION 10.09 JURY. THE PARTIES HERETO WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM BROUGHT BY EITHER OF THE PARTIES AGAINST THE OTHER REGARDING
ANY MATTERS ARISING OUT OF THIS AGREEMENT.
20
SECTION 10.10 FURTHER ASSURANCES. Each party agrees to perform, execute and
deliver, on and after the Closing, such further actions and documents as may be
reasonably necessary or requested to more fully effectuate the purposes, terms
and intent of this Agreement and the conveyances contemplated herein.
SECTION 10.11 ATTORNEYS' FEES. If either Purchaser or Seller or their
respective successors or assigns file suit to enforce the obligations of, or
remedy against, the other party under this Agreement, the prevailing party shall
be entitled to recover from the non-prevailing party the reasonable fees and
expenses of its attorneys and its court costs.
SECTION 10.12 NO THIRD-PARTY BENEFICIARIES. This Agreement shall benefit only
Purchaser and Seller and no other person or entity shall have any rights
hereunder.
ECTION 10.13 NO DISCLOSURE. Except as may be required by law, without the
prior written consent of the other party, neither Purchaser nor Seller shall
disclose to any third party the existence of this Agreement or any term or
condition thereof, subject to Section 10.14 and provided that the terms of this
Agreement may be disclosed by either Purchaser or Seller to their respective
directors and management teams, their respective employees and outside
attorneys, auditors and advisors who have been engaged to work on the subject
transaction, and to the extent required or appropriate, lenders and other third
parties who may have consent or approval rights with respect to the subject
transactions, including the Project Lenders and the parties' respective
financing sources.
SECTION 10.14 PUBLIC NOTICES. Any press release and other public notice to be
released by either party hereto disclosing the transactions contemplated hereby
and/or the consummation thereof shall first be submitted to the other party for
review and comment, and each party shall reasonably cooperate in addressing the
concerns of the other with respect to the nature and content of such disclosure
(except and to the extent any such disclosure may be required by law).
SECTION 10.15 SCHEDULES AND EXHIBITS. All Schedules and Exhibits attached to
this Agreement are an integral part of this Agreement and the term "Agreement"
shall include all such Schedules and Exhibits.
SECTION 10.16 INTERPRETATION.
(a) The headings and captions herein are inserted for the convenience of
reference only and the same shall not limit or construe the paragraphs
or Sections to which they apply or otherwise affect the interpretation
hereof.
(b) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any
similar terms shall refer to this Agreement, and the term "hereafter"
shall mean after, and the term "heretofore" shall mean before, the date
of this Agreement.
(c) Words of the masculine, feminine or neuter gender shall mean and
include the correlative words of other genders, and words importing the
singular number shall mean and include the plural number and vice
versa.
21
(d) Words importing persons shall include firms, associations, partnerships
(including limited partnerships), limited liability companies, trusts,
corporations and other legal entities, including public bodies, as well
as natural persons.
(e) The terms "include," "including" and similar terms shall be construed
as if followed by the phrase "without being limited to."
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.]
22
IN WITNESS WHEREOF, Purchaser and Seller have executed and delivered
this Agreement as of the date set forth above.
PURCHASER: SELLER:
THE ▇▇▇▇▇ LIMITED PARTNERSHIP SIMON PROPERTY GROUP, L.P.
By: THE ▇▇▇▇▇ CORPORATION, general partner By: SIMON PROPERTY GROUP, INC., general partner
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Its: Chairman of the Board of Its: Chief Executive Officer
Directors, Chief Executive Officer
M.S. MANAGEMENT ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Its: Chief Executive Officer
SIMON PROPERTY GROUP (TEXAS), L.P.
By: SIMON PROPERTY GROUP, INC., general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Its: Chief Executive Officer
SPG REALTY CONSULTANTS, L.P.
By: SIMON PROPERTY GROUP, INC., general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Its: Chief Executive Officer
23
DEFINED TERMS
AGREEMENT.........................................................................................................3
APPROVAL DEADLINE................................................................................................12
ARIZONA ▇▇▇▇▇.....................................................................................................3
ARIZONA ▇▇▇▇▇ ▇▇▇▇▇ OWNERSHIP INTERESTS...........................................................................4
ARIZONA ▇▇▇▇▇ VENTURE COMPANY.....................................................................................4
ARUNDEL ▇▇▇▇▇.....................................................................................................3
ASSIGNMENT OF MEMBERSHIP INTERESTS...............................................................................14
ASSIGNMENT OF PARTNERSHIP INTERESTS..............................................................................14
BACK-UP INDEMNITY................................................................................................10
CANDLESTICK ▇▇▇▇▇.................................................................................................3
CASH BALANCE......................................................................................................6
CLOSING..........................................................................................................13
CLOSING DATE.....................................................................................................14
CONCORD ▇▇▇▇▇.....................................................................................................3
CORPORATIONS......................................................................................................4
DELAYED PROJECT..................................................................................................12
ERISA.............................................................................................................7
ESCROWEE.........................................................................................................14
G-2 BLOCK.........................................................................................................5
G-2 CLOSING DATE..................................................................................................5
G-2 COMMISSION....................................................................................................6
G-2 LETTER AGREEMENT..............................................................................................5
G-2 NOTE..........................................................................................................5
GRAPEVINE ▇▇▇▇▇...................................................................................................3
HOUSTON/INTERFIN MODIFICATION DOCUMENTS...........................................................................9
HOUSTON/INTERFIN RESTRICTIVE COVENANT.............................................................................9
HOUSTON/INTERFIN SITE.............................................................................................3
INITIAL CLOSING..................................................................................................12
INTERFIN DEVELOPMENT COMPANIES....................................................................................4
KAN AM............................................................................................................9
KAN AM ASSUMPTION AGREEMENT.......................................................................................6
KAN AM CONSENTS...................................................................................................9
▇▇▇▇ ▇▇▇▇▇........................................................................................................9
LENDER CONSENTS...................................................................................................9
LIENS.............................................................................................................7
LOAN DOCUMENTS...................................................................................................11
MASTER AGREEMENT..................................................................................................3
MASTER AGREEMENT TERMINATION.....................................................................................14
▇▇▇▇▇.............................................................................................................3
▇▇▇▇▇ INTEREST HOLDER.............................................................................................4
MORTGAGE LOAN.....................................................................................................9
NON-COMPETE AGREEMENT............................................................................................15
ONTARIO ▇▇▇▇▇.....................................................................................................3
1
OPERATING AGREEMENTS..............................................................................................4
ORGANIZATIONAL DOCUMENTS..........................................................................................4
OUTSIDE APPROVAL DEADLINE........................................................................................13
PARTNERSHIP AGREEMENTS............................................................................................4
PARTNERSHIPS......................................................................................................4
POTENTIAL DEVELOPMENTS............................................................................................3
PRE-CLOSING DISCLOSURE............................................................................................8
PRE-EMPTIVE RIGHTS................................................................................................7
PRO RATA PURCHASE RIGHTS.........................................................................................11
PROJECT...........................................................................................................3
PROJECT LENDERS...................................................................................................9
PROJECT PURCHASE PRICE............................................................................................5
PROJECTS..........................................................................................................3
PRO-RATA PURCHASE PROVISIONS.....................................................................................11
PURCHASE PRICE....................................................................................................5
PURCHASER.........................................................................................................3
SELLER............................................................................................................3
SHAREHOLDER AGREEMENTS............................................................................................4
SIMON.............................................................................................................3
▇▇▇▇▇ ▇▇▇ AM GUARANTIES..........................................................................................10
▇▇▇▇▇ ▇▇▇ AM RELEASES............................................................................................10
SIMON LOAN GUARANTIES.............................................................................................9
SIMON LOAN RELEASES..............................................................................................10
SIMON MASTER AGREEMENT RIGHTS.....................................................................................4
SIMON OWNERSHIP INTEREST..........................................................................................4
TRG..............................................................................................................11
VENTURE COMPANIES.................................................................................................4
2