Exhibit 2.2
AGREEMENT OF PURCHASE AND SALE
Among
ECHELON MALL JOINT VENTURE AND ECHELON ACQUISITION, LLC ("Seller"),
and
PR ECHELON LIMITED PARTNERSHIP ("Buyer"),
March 7, 2003
TABLE OF CONTENTS
PAGE
ARTICLE I Defined Terms...........................................................................................1
1.1 Certain Defined Terms.......................................................................1
ARTICLE II Purchase and Sale of Property Assets..................................................................10
2.1 Sale of Property Assets....................................................................10
2.2 Purchase Price.............................................................................12
ARTICLE III Deposits, Assumption of Liabilities; Adjustments and Prorations......................................13
3.1 Deposits...................................................................................13
3.2 Assumption of Liabilities..................................................................14
3.3 Debt Restructure...........................................................................14
3.4 Adjustments and Prorations.................................................................15
3.5 Release of Mortgage........................................................................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....................................................................................26
6.3 Indemnity..................................................................................26
6.4 No Third Party Beneficiaries...............................................................26
ARTICLE VII Buyer Inspections....................................................................................27
7.1 Document and Property Inspection..........................................................27
7.2 Feasibility Period.........................................................................28
7.3 Survey Contingency.........................................................................29
7.4 Title Contingency..........................................................................31
7.5 Property Financial Statements..............................................................31
ARTICLE VIII Conditions to Closing...............................................................................32
8.1 Conditions to Obligations of Seller........................................................32
8.2 Conditions to Obligations of Buyer.........................................................33
TABLE OF CONTENTS (CONT.)
ARTICLE IX Maintenance, Improvement and Leasing of the Property..................................................37
9.1 Maintenance and Improvement................................................................37
9.2 Leasing....................................................................................37
9.3 Service and Maintenance Contracts..........................................................40
9.4 Additional Covenants of Seller.............................................................40
9.5 Management Agreements......................................................................42
9.6 Estoppels and Consent and SNDAs............................................................42
9.7 Existing Debt..............................................................................42
ARTICLE X Representations and Warranties of Seller...............................................................42
10.1 Formation and Authority....................................................................43
10.2 No Conflict................................................................................44
10.3 Consents and Approvals.....................................................................45
10.4 Personal Property..........................................................................46
10.5 Litigation.................................................................................46
10.6 Compliance with Laws.......................................................................46
10.7 Taxes......................................................................................47
10.8 Real Property..............................................................................47
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 Intentionally Omitted......................................................................52
10.15 Employment Matters.........................................................................52
10.16 Limitations on Representations and Warranties..............................................54
10.17 Schedules..................................................................................56
ARTICLE XI Representations and Warranties of Buyer...............................................................56
11.1 Formation and Authority....................................................................56
11.2 No Conflict................................................................................57
11.3 Consents and Approvals.....................................................................57
11.4 Litigation.................................................................................58
11.5 Knowledge of Buyer.........................................................................58
ARTICLE XII Broker...............................................................................................59
ARTICLE XIII Survival; Indemnification...........................................................................59
13.1 Survival of Warranties.....................................................................59
13.2 Indemnification by Seller..................................................................60
13.3 Indemnification by Buyer...................................................................61
13.4 Indemnity - General........................................................................62
13.5 Survival...................................................................................64
ARTICLE XIV Assignment...........................................................................................64
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TABLE OF CONTENTS (CONT.)
ARTICLE XV Notices...............................................................................................65
ARTICLE XVI Expenses.............................................................................................67
ARTICLE XVII Casualty and Condemnation...........................................................................68
17.1 Casualty...................................................................................68
17.2 Condemnation...............................................................................68
17.3 Material Casualty or Condemnation..........................................................69
ARTICLE XVIII Like Kind Exchange.................................................................................69
18.1 Like Kind Exchange.........................................................................69
ARTICLE XIX Miscellaneous........................................................................................70
19.1 Successors and Assigns.....................................................................70
19.2 Gender.....................................................................................71
19.3 Captions...................................................................................71
19.4 Not Construed against Drafter..............................................................71
19.5 Entire Agreement...........................................................................71
19.6 Recording..................................................................................72
19.7 Time of Essence............................................................................72
19.8 Original Document..........................................................................72
19.9 Governing Law..............................................................................72
19.10 Post-Closing Inspection....................................................................73
19.11 Non Compete................................................................................73
19.12 Joint and Several Liability................................................................74
19.13 Other Closings.............................................................................74
ARTICLE XX Confidentiality.......................................................................................75
20.1 Confidentiality Agreement..................................................................75
20.2 Public Announcements.......................................................................75
ARTICLE XXI Further Undertakings.................................................................................76
21.1 Further Assurances.........................................................................76
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TABLE OF CONTENTS (CONT.)
LIST OF EXHIBITS AND SCHEDULES
Exhibits Description
-------- -----------
Exhibit A-1 Description of Owned Land
Exhibit A-2 Description of Lease Land (NONE)
Exhibit B Assumed Debt Loan Documents (NONE)
Exhibit C Personal Property
Exhibit C-1 GE Capital Equipment
Exhibit D Excluded Personal Property
Exhibit E Due Diligence Documents and Information
Exhibit F Intentionally Omitted
Exhibit G Service Contracts
Exhibit H Permitted Encumbrances
Exhibit I Intentionally Omitted
Exhibit J ▇▇▇▇▇ Estoppel
Exhibit K Intentionally Omitted
Exhibit L Transfer Tax Indemnity (NONE)
Exhibit M Guaranty by the ▇▇▇▇▇ Company L.P.
Exhibit N Guaranty by PREIT Associates, L.P.
Exhibit O Anchor Tenant Estoppels
Schedules Description
--------- -----------
Schedule 1.1A Intermediate Entities (NONE)
Schedule 1.1B Anchor Department Stores
Schedule 2.4 Liquor Licenses (NONE)
Schedule 3.4 Adjustments and Prorations
Schedule 5.1 Price Reduction Schedule
Schedule 6.1 Property Employees[Note: Not attached to Contract].
Schedule 8.2 Anchor Tenants
Schedule 10.1(c) Organizational Documents of Owner
Entities and Predecessors
Schedule 10.1(d) Lists Predecessor Entities (NONE)
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 Taxes
Schedule 10.7(a) All Tax Returns Filed (NONE)
All Refunds due to Tenants or
▇▇▇▇▇ parties for prior years
Schedule 10.8(b) Condemnations
Schedule 10.9 Environmental Reports
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TABLE OF CONTENTS (CONT.)
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(b) Claimed Lessor Defaults
Schedule 10.12(c) Tenant Defaults
Schedule 10.12(d) Security Deposits/Construction Deposits
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AGREEMENT OF PURCHASE AND SALE
ECHELON 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
ECHELON MALL JOINT VENTURE, a New Jersey joint venture ("EMJV") and ECHELON
ACQUISITION, LLC, a Maryland limited liability company ("Acquisition")
(collectively "Seller"), and PR ECHELON LIMITED PARTNERSHIP, a Pennsylvania
limited partnership ("Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of certain real property located in
Voorhees, New Jersey and known as Echelon Mall; and
WHEREAS, Seller desires to sell, convey, transfer and assign to Buyer,
and Buyer desires to purchase and acquire from Seller, all of the Property
Assets (hereinafter defined) 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 January 31, 2003
between The ▇▇▇▇▇ Company, an Affiliate of Seller, and PREIT Associates, L.P.
"Additional Matters Objection" is defined in Section 7.3.
"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 Anchor Department Stores
collectively.
"Anchor Department Stores" means those department stores that are
adjacent to the Real Property and are identified on Schedule 1.1.B.
"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.
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"Assumed Property Liabilities" means liabilities arising pursuant to
(a) the Leases, (b) the Permitted Encumbrances, (c) the Assumed Service
Contracts, (d) the Material Contracts and (e) 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).
"Christiana Contract" is defined in Section 19.13.
"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.
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"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
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 $30,000.
"Echelon Mortgage" is defined in Section 3.5.
"Effective Date" is defined in the preamble of this Agreement.
"Employment Period" is defined in Section 6.1.
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"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 Equitable Prime Property Fund.
"ESA" is defined in Section 10.9.
"Exchange Agreement" is defined in Section 18.1.
"Exchanges" is defined in Section 18.1.
"GE Capital Equipment" is defined in Section 2.2.
"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(b).
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"Intermediary" or "Intermediaries" is defined in Section 18.1.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge, without any duty of investigation or inquiry whatsoever, of ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Knowledge of Buyer" means the actual knowledge, without any duty of
investigation or inquiry whatsoever, of ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇.
"Land" is defined in Section 2.1(b).
"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.
"Leases" is defined in Section 2.1(b).
"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.
"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.
"Mall Parcel" is defined in Section 2.1.
"Material Contracts" is defined in Section 10.11.
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"Material Loss" is defined in Section 17.3.
"New Castle" means New Castle Associates, a Pennsylvania limited
partnership.
"New Leases" is defined in Section 9.2(a).
"Non Transferred Employees" is defined in Section 6.1.
"Owner Entity" means the Seller and is used interchangeably with the
term "Seller".
"Penney Parcel" means the land described on Exhibit A-1 as the Echelon
▇. ▇. ▇▇▇▇▇▇ Parcel acquired by Acquisition by deed dated as of February 28,
2003 from ▇. ▇. Penney Properties. Inc.
"Permitted Encumbrances" means those items listed on Exhibit H (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 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
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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 Owner Entity; (h) any matter that is the responsibility of any party other
than Owner Entity (which responsibility of 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.
"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(c).
"Predecessor Entities" means the entities listed on Schedule 10.1(d).
"Property Assets" is defined in Section 2.1(d).
"Property Employees" is defined in Section 6.1.
"Purchase Price" is defined in Section 2.2.
"Real Property" means the Land and Improvements together.
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"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.
"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,
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. Taxes shall also include assessments of the Echelon Common
Facilities Association.l
"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).
"TIAA" is defined in Section 3.5.
"Title Company" means First American Title Insurance Company.
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"Venture Contracts" is defined in Section 19.13(a).
ARTICLE II
PURCHASE AND SALE OF PROPERTY ASSETS
2.1 Sale of Property Assets.
(a) Intentionally Omitted.
(b) Subject to the provisions hereof, Seller hereby agrees to sell,
convey, transfer, assign and deliver to Buyer, and Buyer hereby agrees to
acquire and purchase from Seller,
(i) (A) from EMJV, the fee interest in the land described in
Exhibit A-1, other than the Penney Parcel (herein "Mall Parcel") and (B) from
Acquisition, the fee interest in the Penney Parcel, (the land described on
Exhibit A-1 is herein called the "Land"), and (C) all buildings and other
improvements located on the Land (collectively, the "Improvements"), (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, and (iv) all
easements, if any, benefiting the Land or any part of the Real Property and all
rights and appurtenances pertaining thereto.
(c) (i) Seller shall also convey to Buyer at Closing all of Seller's
rights in the following: all fixtures, equipment, and other personal property
(both tangible and intangible),
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owned or leased (directly or indirectly) by the Owner Entity 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")(1); 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; (ii) the
name "Echelon Mall" and all trademarks associated with such name; and (iii) 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, (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, and (G) claims filed by
Owner Entity pursuant to a voluntary recall program by Central Sprinkler
Company, for which Seller filed a claim dated September 3, 2002 to have
replacements made by Central Sprinkler Company in accordance with the procedures
established for the voluntary recall program as the same are outlined at
▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇. 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.
-------------------
(1) Personal Property -if property of the Merchants Association at the Property
is also scheduled, this is for Buyer's information only. Seller does not own
such property.
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(d) All of the properties and things described in this Section
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
Fifteen Million Five Hundred Thousand Dollars ($15,500,000) to EMJV for the
Property Assets pertaining to the Mall Parcel, and One Million Five Hundred
Thousand Dollars ($1,500,000) to Acquisition for the Property Assets pertaining
to the Penney Parcel, subject to further adjustments pursuant to Sections 3.4
and 9.2(b) of this Agreement or as elsewhere expressly provided in this
Agreement. Seller has advised Buyer that certain of the Personal Property to be
owned by Owner Entity at Closing, currently listed on Exhibit C-1 (the "GE
Capital Equipment") is leased from General Electric Capital. Before Closing
Seller agrees to acquire the GE Capital Equipment listed on Schedule C-1 from GE
Capital, and if Seller is successful, the Purchase Price to Seller shall be
increased by the amount Seller or Owner Entity pays to GE Capital for acquiring
the GE Capital Equipment, which amount shall be approximately the amount set
forth on Schedule C-1. The Purchase Price as adjusted for all of the foregoing
or as elsewhere expressly provided in this Agreement shall be the "Adjusted
Purchase Price".
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ARTICLE III
DEPOSITS, ASSUMPTION OF LIABILITIES; ADJUSTMENTS AND PRORATIONS
3.1 Deposits.
(a) Buyer shall deposit with the Title Company the sum of Sixty
Thousand Dollars ($60,000) referred to hereinafter as the "Deposit." Title
Company shall hold and/or apply the Deposit as provided for elsewhere in this
Agreement.
(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
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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 each 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 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, 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.
3.2 Assumption of Liabilities.
Subject to the terms and conditions of this Agreement and except as
otherwise expressly provided herein, Buyer shall, on the Closing Date, 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.
3.3 Debt Restructure.
If Buyer desires to place any mortgages on the Property Assets, in
order to facilitate a like-kind exchange, provided that such financing would not
create adverse tax consequences for
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Seller, or interfere with Seller's obtaining the release of the Plymouth
Mortgages, 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.
3.5 Release of Mortgage
(a) Buyer acknowledges that as a condition to Seller's obligations to
transfer the Property Assets, Seller must obtain the consent of Teachers
Insurance and Annuity Association ("TIAA"), to accept $18,000,000 as full
payment of the existing mortgage on the Real Property ("Echelon Mortgage") and
to release the Echelon Mortgage. Seller agrees to use diligent good faith
efforts to obtain TIAA's consent to the release and Buyer agrees to cooperate
without expense to Buyer with Seller in such efforts.
ARTICLE IV
FAILURE TO CLOSE
4.1 Buyer's Default.
If Seller and/or 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 (directly or
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indirectly) sell and transfer the Property Assets to Buyer in accordance with
this Agreement and Buyer or its Affiliates or New Castle for any reason fails to
consummate this Agreement in breach of its or Buyer's Affiliates' or New
Castle's 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 and New Castle have complied with all of
the covenants and conditions contained herein and in the Concurrent Contracts
and is ready, willing and able to pay
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the Purchase Price to Seller and consummate the transactions contemplated
hereunder in accordance with this Agreement and Seller or its 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 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 Section 8.1 or elsewhere in this Agreement and the lack of satisfaction
of a condition is not related to Buyer's or Buyer's Affiliates' or New Castle's
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 Section 7.2, 7.3, 7.4
or Section 8.2 or elsewhere in this Agreement, and the lack of satisfaction of a
condition is not related to Buyer's or Buyer's Affiliates' or New Castle's
breach or default hereunder or under any of the Concurrent Contracts, then the
Deposit shall be promptly returned to Buyer.
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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 (the "Closing Date"), or (ii) if Seller is unable to obtain
TIAA's consent to the release of the Echelon Mortgage by April 24, 2003 Seller
may postpone the Closing for up to 180 days in order to pursue the release. In
that event, the Seller shall give Buyer thirty (30) days notice of the postponed
Closing Date. If Seller postpones the Closing beyond April 24, 2003, the
Purchase Price shall be reduced in accordance with Schedule 5.1.
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. Special warranty deeds to the Mall Parcel and the Penney
Parcel from EMJV and Acquisition respectively, duly executed and acknowledged by
each and in proper form for recording, conveying to Buyer fee simple title to
the Real Property on Exhibit A-1 and the Improvements located thereon.
(ii) Intentionally Omitted.
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(iii) ▇▇▇▇ of Sale. A ▇▇▇▇ of sale without warranty for all of the
Personal Property, duly executed by Seller.
(iv) Assignment and Assumption of Leases. An assignment of the
Leases, duly executed and acknowledged by EMJV and in proper form for recording,
assigning Seller's right, title and interest in and to the Leases to Buyer, and
if Acquisition has signed the Firestone Lease (described in Schedule 10.12),
Acquisition shall execute and deliver an assignment and assumption of the
Firestone Lease.
(v) 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.
(vi) 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.
(vii) FIRPTA Affidavit. The affidavit referred to in Section 1445
of the Code with all pertinent information confirming that EMJV and Acquisition
are not a foreign person, trust, estate, corporation or partnership.
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(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
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 members,
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 Acquisition and the partners of EMJV 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
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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.
(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 certificate 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) Intentionally Omitted.
(xix) Guaranty Agreement. A Guaranty Agreement, in the form of
that attached as Exhibit M, duly executed by The ▇▇▇▇▇ Company L.P.
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(xx) 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.
(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) Other Assumption Documents. Counterparts of the documents
described in Section 5.2(a), (iv), (v) and (vi) duly executed and acknowledged
by Buyer and in proper form for recording, assuming all of Seller's obligations
under the Leases, ▇▇▇▇▇▇,
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Developers Agreements, Material Contracts, Assumed Service Contracts and other
material contracts described in Section 10.11(c).
(v) Warranty Certificate. The certificates required by Section
8.1(a) and (b).
(vi) Intentionally Omitted.
(vii) Intentionally Omitted.
(viii) Other Documents and Deliveries. Such other documents or
instruments as may be reasonably required by Seller 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, 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 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
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personnel files and records of the current Property Employees and conduct
personal interviews and background checks of such 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 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." With respect to Hired Employees who have
been identified as bonus eligible under Seller's policies on a Schedule
initialed by the parties ("Bonus Employee"), such employees shall be hired at
their current salary and with the same bonus potential for calendar year 2003
only but shall not be entitled to a vehicle. 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 such 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 including
2002 year bonuses to the Bonus Employees, in accordance with Seller's policies
and any applicable federal, state or local laws, provided that
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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 Period"), and for Bonus Employees,
through the 2003 calendar year ("Bonus Period"), provided that Buyer or its
Affiliates shall be entitled to terminate the employment of any such Hired
Employee (including a Bonus 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. With respect to any Bonus Employees,
Seller shall pay or credit to Buyer at Closing an amount equal to the average
annual bonus paid to each of such employees for calendar years 2000 through 2002
as shown on the schedule initialed by the parties (the "Average Bonus")
multiplied by one-third, and unless such Bonus Employee is terminated for cause,
Buyer shall, with respect to any such employee who meets his or her performance
goals, targets and objectives for 2003 established by Seller and approved by
Buyer (which approval shall not be withheld except in extraordinary
circumstances), pay to such employees, in the first quarter of 2004, a bonus at
least equal to the Average Bonus for such employees. As of January 1, 2004,
Buyer and its Affiliates may in their sole discretion establish bonus objectives
and potentials for the Bonus Employees in accordance with Buyer's policies. If
Buyer or its Affiliates terminate the employment of a Hired Employee other than
for cause before the end of the Employment Period, or terminates the employment
of a Bonus Employee other than for cause before the end of the Bonus Period,
Buyer shall be obligated to indemnify Seller and its Affiliates from and against
any Claim by such Hired Employee (i) for severance
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pay in the amount shown on Schedule 6.1 and (ii) as to Bonus Employees, also for
the amount of such Employee's Average Bonus, 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 or 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.
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.
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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 Columbia, Maryland 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 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.
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
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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.
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
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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) together with The ▇▇▇▇▇ Company, L.P. agree
with Buyer and Buyer's lenders (A) to pay for the remediation if, as and when it
is performed, and (B) to provide guarantees or other assurance reasonably
acceptable to such lenders with respect to such remediation.
7.3 Survey Contingency.
Seller has provided to Buyer a copy of the existing Survey for the Real
Property (the "Existing Survey"). Buyer may, but shall not be obligated to
obtain, at its own expense, an updated survey of the Real Property. If the
updated survey discloses matters affecting title to the
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Real Property not shown on the Existing Survey, 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 obligation before Closing, 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.
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.
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7.4 Title Contingency.
At Closing, Owner Entity's title to the Real Property shall be good and
marketable and 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 is not as required above, Buyer shall
have the option of (a) accepting such title as exists and abating the Purchase
Price to the extent of Encumbrances of an ascertainable amount, or (b) 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, 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.
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
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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 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,
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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 and Deliveries. Buyer shall have duly executed
and delivered to Seller counterparts of each Ancillary Agreement and have made
the deliveries described in Section 5.2(b) 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
Real Property described in Schedules 10.3(a) and 10.3(b) including the consent
of TIAA described in Section 3.5; and
(f) Intentionally Omitted.
(g) Settlement with Equitable Prime Property Fund. New Castle shall
have satisfied the conditions set forth in Section 8.2(a)(viii) of the
Christiana Contract.
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
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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
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;
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(iv) Consents and Estoppels. Buyer shall have received the
following: (A) Intentionally Omitted; (B) Intentionally Omitted; (C) duly
executed Estoppel Certificates substantially in the form attached as Exhibit O
from all tenants listed on Schedule 8.2 (the "Anchor Tenants") and (D) duly
executed Estoppel Certificates substantially in the form attached as Exhibit J
from the parties to any ▇▇▇▇▇; and (E) 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 I, J, K and O, 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 estoppels shall, at a minimum,
confirm that the Ground Lease, 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 Owner Entity (or its Affiliates) or such party pursuant to
such Ground Lease, loan documents, lease or ▇▇▇▇▇ unless, as to any such
default, if such default is capable of cure, Seller agrees with Buyer prior to
Closing to promptly remedy the same at Seller's sole cost and expense, which
obligation shall survive Closing.
(v) Intentionally Omitted.
(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.
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(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. New Castle shall have satisfied the conditions
set forth in Section 8.2(a)(viii) of the Christiana Contract.
(ix) May Company Waiver. Seller shall have delivered to Buyer a
written waiver by the May Company of any rights of first refusal that they hold
to purchase the Real Property as a result of the transaction contemplated by
this Agreement (including the Exchanges if any contemplated by Section 18.1) in
form sufficient to induce the Title Company to affirmatively insure Buyer
against the exercise of such rights for the transaction contemplated by this
Agreement.
(x) Seller shall have obtained estoppels from The May Company and
Boscov's confirming that there are no defaults under any ▇▇▇▇▇ or other
agreement which is binding upon Buyer or the Real Property and that the use of
the Sears Building for retail uses consistent with a shopping center will not
violate any such ▇▇▇▇▇ or other agreement.
(xi) Buyer shall have received from Seller at Closing an agreement
signed by Sears in terms substantially similar to those in that certain draft
"Agreement" dated 2001 (initiated by the parties hereto) between ▇▇▇▇▇▇ ▇▇▇▇▇
Limited Partnership and Sears dealing with the marketing and distribution of
proceeds of the building constructed by Sears on the Land ("Sears Marketing
Agreement"). Seller shall negotiate on behalf of Buyer and shall consult with
Buyer if any of the terms being negotiated with Sears would vary substantially
from those in the draft referenced above. Buyer agrees that if Sears executes
the Sears Marketing
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Agreement, Buyer shall also execute such agreement or assume the obligations of
Seller thereunder as the case may be.
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
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). The Owner Entity shall not 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.
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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 when executed.
From the Effective Date, the Owner Entity 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 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
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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 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.
(ii) 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.
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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, and (b) true, correct and complete copies of such contracts have been
provided to Buyer (the "Service Contracts"). On or before March 15, 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
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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 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.
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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.
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), (D) and (E) 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 or is required to obtain in connection with any
financing that Buyer desires to obtain. Seller shall endeaver to obtain an
Estoppel Certificate, substantially in the form attached as Exhibit J, from
Echelon Common Facilities Association, Inc.
9.7 Existing Debt.
Between the date hereof and the Closing Date, Seller shall not modify
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:
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10.1 Formation and Authority.
(a) (i) EMJV is, and will at Closing be, a joint venture duly formed,
validly existing and in good standing under the laws of the State of New Jersey
and Echelon Holding Company, LLC, and Echelon Mall LLC the only partners of EMJV
are each limited liability companies duly formed, validly existing and in good
standing under the laws of the States of Delaware and Maryland respectively, and
EMJV 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 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 appropriate governing bodies of EMJV and Acquisition.
(ii) Acquisition 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 Maryland and Acquisition 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. Acquisition is, and 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.
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(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 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).
(c) True, correct and complete copies of the organizational documents
of Seller and of any entity that may be deemed a predecessor of Seller 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).
10.2 No Conflict.
Assuming that all consents, approvals, authorizations and other actions
described in Schedules 10.3(a) and (b) and in Section 3.5 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,
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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,
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) and Section 3.5.
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(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.
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 leases of
personal property to be assigned to Seller which are identified on Schedule
10.4.
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.
There is no order, writ, judgment, injunction, decree, determination or award to
which the Seller 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, Seller has not received written notice of the failure to
comply with any Laws of any governmental authority pertaining to the
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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.
Except as described in Schedule 10.7, (i) Seller has 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 for periods prior to Closing, (ii)
all Taxes due with respect to the Seller and Property Assets for periods prior
to Closing have been or will be paid prior to Closing and those payable but not
due which relate to the Property Assets shall be adjusted at Closing, (iii)
Seller has not received from any governmental authority any written notice of
proposed adjustment, deficiency or underpayment of any Taxes pertaining to
Seller or the ownership or operation of the Property Assets, 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, (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.
10.8 Real Property.
(a) EMJV 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
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Seller at Closing, all right, title and interest in and to: (i) the fee interest
in the Mall Parcel and Acquisition presently owns and at Closing shall own free
and clear of Encumbrances other than the Permitted Encumbrances all right, title
and interest in and to the Penney Parcel, and (ii) all Improvements on their
respective parcels. Except as disclosed on Schedule 10.3(b), 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 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.
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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
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
and the Leases constitute all the contracts and agreements that will be assigned
to Buyer and for which Buyer shall assume liability for Seller's obligations.
All applicable ▇▇▇▇▇▇ and all 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.
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(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 or the Seller (the "Developer Agreements") are listed on Schedule
10.11(b). Other than shown 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) All other material agreements of 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 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 disclosed in Schedule 10.11(d) 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.
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10.12 Rent Roll.
(a) Seller has delivered to Buyer rent rolls for the Real Property
dated as of February 1, 2003, February 21, 2003, and February 27, 2003, copies
of which are attached to Schedule 10.12(a) (collectively, the "Rent Roll"). To
the Knowledge of Seller the information on the Rent Roll is true and correct in
all material respects. 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 on Schedule 10.12(a). 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 and on Schedule
10.12(a) constitute all of the leases, licenses and occupancy agreements for the
Real Property.
(b) Except as disclosed in Schedule 10.12(b) 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
Owner Entity is not in default under any Leases.
(c) 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(c) or in
copies of default notices provided to Buyer and listed on Schedule 10.12(c), to
the Knowledge of Seller, there is no material default by any tenant in the
performance of any material obligations under any Lease.
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(d) 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(d) shows
the amounts of all security deposits paid by any tenant under a Lease or
construction deposits paid by a tenant or its contractor, and the amount
currently held by Owner Entity.
(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.
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 Intentionally Omitted.
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) Intentionally Omitted.
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(c) 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, Seller and its Affiliates in all 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, including but not
limited to, the New Jersey Unemployment Compensation Act, the New Jersey Workers
Compensation Act, the New Jersey Wage Payment Act and under any other statute or
regulation of either the State of New Jersey or its political subdivisions 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 are employees at will. There are no
collective bargaining agreements to which Seller or Owner Entity or any of their
respective Affiliates are a party, covering the Property Employees.
(e) Intentionally Omitted.
(f) Seller and its 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 Employee Retirement Income
Security Act, the Multi-Employer Pension Plan Amendments Act, and any other laws
referred to above,
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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 Property Assets 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
SET FORTH IN
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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
the Property Assets, title to the Real Property or upon Buyer's ability to
acquire and finance the Property Assets.
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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 partnership, is duly
formed, validly existing and in good standing under the laws of Pennsylvania 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 partners of Buyer and the
Board of Directors, or similar governing body of PREIT Associates 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
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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.
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
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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 (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).
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.
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.
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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 is provided
in a separate written agreement signed by the parties to this Agreement, 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
Seller or Buyer set forth in this Agreement shall survive the Closing for a
period of one year, provided that written notice of a breach thereof is provided
to the breaching party within one year from the date of Closing.
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13.2 Indemnification by Seller.
(a) Seller shall indemnify, hold harmless and defend Buyer, Buyer's
Affiliates and its 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) intentionally omitted; or
(iii) any Claim by any third Person against the Property Assets or
Buyer arising out of or caused by, directly or indirectly, any act or omission
of the Seller or any Predecessor Entity or its respective members, 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 excluding (A) Claims arising out of the ▇▇▇▇▇▇, 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 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; or
(iv) any Claim by any Property Employee arising out of such
Property Employee's employment by Seller or its Affiliates through the Date of
Closing or the termination of such Property Employee's employment by Seller or
its Affiliates in accordance with Section
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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); or
(v) 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
be an amount net of any insurance proceeds, indemnity payments or similar
payments actually received by Buyer (or any of its Affiliates) 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, Seller's
Affiliates and their respective partners, members, shareholders, owners,
officers, directors, employees and agents
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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 Buyer or its Affiliates, 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, 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 including the Sears
Marketing Agreement. Notwithstanding the foregoing, the indemnification
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
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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 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
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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 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
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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 to New
Castle 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
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:
Buyer:
c/o PREIT-▇▇▇▇▇, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Blank Rome LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: G. ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Seller:
Echelon Mall Joint Venture
Echelon Acquisition, LLC
c/o The ▇▇▇▇▇ Company
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
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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.
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. The parties
shall split any transfer taxes and sales taxes evenly. Buyer shall pay its
survey costs, engineering and expert fees, and any title insurance policy
premium for Buyer, or any lender of Buyer 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.
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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
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
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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
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.
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Buyer intends to structure the purchase of the Real Property as part of
an exchange of like-kind property under Section 1031 of the Internal Revenue
Code of 1986, as amended (the "Exchange"), which will be accomplished pursuant
to the terms of a separate exchange agreement (the "Exchange Agreement") between
Buyer and a qualified intermediary to be engaged by Buyer ("Intermediary").
Seller agrees to cooperate promptly and reasonably (without liability or cost to
Seller) with Buyer and Intermediary in structuring the transfer and conveyance
of the Real Property as part of the Exchange. Such cooperation shall include,
but not be limited to, (i) the consent to the assignment of all of Buyer's
rights (but not its obligations) under this Agreement to Intermediary, and the
acknowledgment of such assignment, (ii) the transfer of the Property Assets
pursuant to a written direction of Intermediary and (iii) the reassignment of
Buyer's rights under this Agreement from Intermediary back to Buyer immediately
following the completion of the Exchange, and the acknowledgment of such
reassignment. Buyer agrees to fully indemnify Seller from any resulting
liability to third parties (including, but not limited to, Intermediary) arising
out of Seller's cooperation with the Exchange for the benefit of Buyer, 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 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.
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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
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.
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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
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 The
▇▇▇▇▇ Company nor Seller nor any Affiliate of either of them 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 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
The ▇▇▇▇▇ Company, Seller and their Affiliates as so curtailed. The parties
acknowledge that no part of the Purchase Price is allocated to this covenant by
Seller.
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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.
19.13 Other Closings.
(a) Seller or Seller'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, to Buyer or Buyer's Affiliates ("Affiliated Contracts"), and
Seller or Seller's Affiliate has contracted to purchase Christiana Mall from New
Castle ("Christiana Contract", and together with the Affiliated Contracts, the
"Concurrent Contracts"). Furthermore, with regard to the Christiana Mall, Seller
or its Affiliate are negotiating agreements for the ownership, operation and
management of the Christiana Mall with New Castle's lender, Equitable ("Venture
Contracts").
(b) Unless the Concurrent Contracts also close at the same time as this
Agreement and the Venture Contracts shall have been fully negotiated at the time
of Closing, Seller may, provided that the failure to close the Concurrent
Contracts at the same time does not result from the breach by Seller or its
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 Affiliate or New Castle pursuant to a Concurrent
Contract, neither party shall have any further obligation to the other except
for the Covenants Surviving Termination and except as provided in Section 4.3.
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(c) It shall be a condition of Buyer's obligation to close on this
Agreement that the Concurrent Contracts (other than the Contract for Plymouth)
also close at the same time, or have previously closed provided that the failure
to close the Concurrent Contracts does not result from the breach by Buyer or
its Affiliates or New Castle of any of their respective obligations pursuant to
such Concurrent Contracts.
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 or upon advice of
counsel to a party (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.
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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
parties' respective rights and obligations hereunder with regard to a specific
item, event, or circumstance.
[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.
ATTEST: SELLER:
ECHELON MALL JOINT VENTURE
By: Echelon Mall, LLC
/s/ [Signature Illegible] By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Executive Vice President
By: Echelon Holding Company, LLC
/s/ [Signature Illegible] By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Executive Vice President
ECHELON ACQUISITION, LLC
/s/ [Signature Illegible] By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Executive Vice President
ATTEST: BUYER:
By:
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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.
First American Title Insurance Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 3/10/03
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Underwriting
Counsel
IN WITNESS WHEREOF the parties hereto have executed this Agreement
effective as of the date first written above.
BUYER:
PR ECHELON LIMITED PARTNERSHIP,
a Pennsylvania limited partnership
By: PR ECHELON LLC, its general partner
By: PREIT Associates, L.P., its sole member
By: Pennsylvania Real Estate Investment Trust,
its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Executive Vice President