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EXHIBIT 2.3
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AGREEMENT OF PURCHASE AND SALE
EASTCHASE MARKET SHOPPING CENTER
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AND
OPUS SOUTH CORPORATION
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TABLE OF CONTENTS
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1. RECITALS-------------------------------------------------------------1
1.01 Definitions-----------------------------------------------------1
1.02 Land/Improvements-----------------------------------------------1
1.03 Real Property---------------------------------------------------1
2. AGREEMENT TO PURCHASE AND SELL---------------------------------------1
2.01 Intentionally Deleted-------------------------------------------1
2.02 Purchase/Sale---------------------------------------------------2
3. PURCHASE PRICE AND MANNER OF PAYMENT---------------------------------2
3.01 Purchase Price--------------------------------------------------2
3.02 Purchase Price Portions-----------------------------------------2
4. ESCROW---------------------------------------------------------------3
4.01 Escrow Agent----------------------------------------------------3
4.02 Filings---------------------------------------------------------3
5. SITE ANALYSIS--------------------------------------------------------3
5.01 Site Analysis Documents-----------------------------------------3
5.02 Access----------------------------------------------------------4
5.03 Site Analysis Period--------------------------------------------5
5.04 Cure of Unacceptable Conditions---------------------------------6
6. SURVEY AND TITLE INSURANCE-------------------------------------------8
6.01 Survey----------------------------------------------------------8
6.02 Title Commitment------------------------------------------------8
6.03 Purchaser's Objections; Seller's Cure---------------------------8
6.04 Title Policy----------------------------------------------------9
7. SELLER'S CLOSING DOCUMENTS AND ESCROW-------------------------------10
7.01 Deed-----------------------------------------------------------10
7.02 Assignment of Leases-------------------------------------------10
7.03 Leases and Tenant Documents------------------------------------11
7.04 ▇▇▇▇ of Sale---------------------------------------------------11
7.05 Assignment of Contracts----------------------------------------11
7.06 Violations/Work Orders Affidavit-------------------------------11
7.07 Keys-----------------------------------------------------------11
7.08 Plans and Specifications---------------------------------------11
7.09 Title Insurance Affidavit--------------------------------------11
7.10 FIRPTA Certificate/Withholding---------------------------------11
7.11 Form 1099------------------------------------------------------11
7.12 Books and Records----------------------------------------------12
7.13 Letters to Tenants---------------------------------------------12
7.14 Recording Requirements-----------------------------------------12
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7.15 Estoppel Certificates------------------------------------------12
7.16 Termination of Management and Seller Affiliated Contracts------12
7.17 Permits/Guaranties---------------------------------------------13
7.18 Closing Statements---------------------------------------------13
7.19 Escrow Instructions--------------------------------------------13
7.20 Date Down Certificate------------------------------------------13
7.21 Agreement Estoppel Certificate---------------------------------13
7.22 Pad and Phase II Covenant--------------------------------------14
7.23 Vacant Space Acknowledgment------------------------------------14
7.24 Allocable Share Agreement.-------------------------------------14
7.25 Other Documents------------------------------------------------14
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS-----------------------14
8.01 Assignment of Leases-------------------------------------------14
8.02 Assignment of Contracts----------------------------------------14
8.03 Closing Statements---------------------------------------------14
8.04 Escrow Instructions--------------------------------------------14
8.05 Recording Requirements-----------------------------------------14
8.06 Date Down Certificate------------------------------------------15
8.07 Phase I and II Covenant----------------------------------------15
8.08 Allocable Share Agreement--------------------------------------15
8.09 Vacant Space Acknowledgment------------------------------------15
8.10 Other Documents------------------------------------------------15
9. CONDUCT OF BUSINESS PRIOR TO CLOSING--------------------------------15
9.01 Affirmative and Negative Covenants-----------------------------15
9.02 Payments-------------------------------------------------------16
9.03 Lien Removal---------------------------------------------------17
10. REPRESENTATIONS AND WARRANTIES--------------------------------------17
10.01 Seller's Representations and Warranties-----------------------17
10.02 Purchaser's Representations and Warranties--------------------21
10.03 Survival Agreement--------------------------------------------22
10.04 Indemnification-----------------------------------------------22
11. SHARED CLOSING COSTS AND OTHER EXPENSES-----------------------------23
11.01 Expenses------------------------------------------------------23
11.02 Shared Closing Costs------------------------------------------24
12. CONDITIONS----------------------------------------------------------24
12.01 Purchaser's Conditions----------------------------------------24
12.02 Seller's Conditions-------------------------------------------25
12.03 Rights Upon Failure of a Condition----------------------------25
13. EARN-OUT------------------------------------------------------------25
13.01 Defined Terms-------------------------------------------------25
13.02 Closing Date Purchase Price Computation-----------------------28
13.03 Lease Assignment Reservation----------------------------------28
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13.04 New Leases----------------------------------------------------28
13.05 Earn-Out Period-----------------------------------------------30
13.06 Casualty During Earn-Out Period-------------------------------31
13.07 Earn-Out Payments---------------------------------------------31
13.08 Footage Payment-----------------------------------------------32
13.09 Intentionally Deleted-----------------------------------------33
13.10 Seller's New Lease Obligations--------------------------------33
13.11 Punchlist-----------------------------------------------------33
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS------------------------------34
14.01 Rents---------------------------------------------------------34
14.02 Arrears-------------------------------------------------------34
14.03 Unknown Rents-------------------------------------------------35
14.04 Utilities-----------------------------------------------------36
14.05 Contracts-----------------------------------------------------36
14.06 Taxes---------------------------------------------------------36
14.07 Assessment Installments---------------------------------------37
14.08 Permits-------------------------------------------------------37
14.09 Security Deposits/Tenant Inducements--------------------------37
14.10 Customary Items-----------------------------------------------37
14.11 Apportionment Between Phases----------------------------------37
15. CLOSING-------------------------------------------------------------37
15.01 Closing and Closing Date--------------------------------------38
16. POSSESSION----------------------------------------------------------38
16.01 Possession and Post Closing Work------------------------------38
17. RISK OF LOSS--------------------------------------------------------38
17.01 Risk----------------------------------------------------------39
17.02 Damage and Destruction----------------------------------------39
17.03 Condemnation and Eminent Domain-------------------------------39
18. DEFAULTS AND REMEDIES-----------------------------------------------40
18.01 Seller's Defaults---------------------------------------------40
18.02 Purchaser's Defaults------------------------------------------40
18.03 Seller's Remedies---------------------------------------------40
18.04 Pre-Closing Purchaser's Remedies------------------------------41
18.05 Post Closing Purchaser's Remedies-----------------------------41
19. CROSS PERFORMANCE OBLIGATION----------------------------------------42
20. ASSIGNMENT----------------------------------------------------------42
21. NOTICES-------------------------------------------------------------42
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22. ATTORNEYS' FEES AND DISBURSEMENTS-----------------------------------44
23. NO CONSEQUENTIAL DAMAGES--------------------------------------------44
24. MISCELLANEOUS-------------------------------------------------------44
24.01 Successors----------------------------------------------------44
24.02 Modifications/Waivers-----------------------------------------44
24.03 Entire Agreement----------------------------------------------44
24.04 Counterparts--------------------------------------------------44
24.05 Captions------------------------------------------------------44
24.06 Gender/Singular/Plural----------------------------------------44
24.07 Exhibits Incorporated-----------------------------------------45
24.08 Governing Law-------------------------------------------------45
24.09 Severability--------------------------------------------------45
24.10 Date for Performance------------------------------------------45
24.11 Further Action------------------------------------------------45
24.12 Survival------------------------------------------------------45
24.13 Confidentiality-----------------------------------------------45
24.14 Time of the Essence-------------------------------------------46
24.15 Construction--------------------------------------------------46
24.16 Interest------------------------------------------------------46
24.17 Warranty Work-------------------------------------------------46
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AGREEMENT OF PURCHASE AND SALE
EASTCHASE MARKET SHOPPING CENTER
This Agreement of Purchase and Sale (the "Agreement") is
made as of the 2nd day of July, 1996, by and between OPUS SOUTH CORPORATION, a
Florida corporation ("Seller"), and DEVELOPERS DIVERSIFIED REALTY CORPORATION,
an Ohio corporation ("Purchaser"). Seller and Purchaser (singularly, a "Party,"
collectively, the "Parties") agree as follows:
1. RECITALS.
1.01 DEFINITIONS. The location of all defined terms used in this Agreement are
set forth in the Glossary of Terms that is attached hereto and made a part
hereof.
1.02 LAND/IMPROVEMENTS. Seller is the sole owner of fee simple title to (i)
certain land (the "Land") situated in the City of Fort Worth, State of Texas,
more particularly described on Schedule 1.02 attached hereto and made a part
hereof which shall include all residual land and outlots, except Pads 1 and 3
(collectively, "Pads") as shown on the site plan attached hereto as Schedule
1.02(a) (the "Site Plan"); and (ii) all the buildings, structures and
improvements (collectively, the "Improvements") situated on the Land. The Land
shall be conveyed as herein provided, in two phases ("Phase I," "Phase II," and
generally, "Phase" or "Phases"). The Phases are as shown on the Site Plan. Pads
1 and 3 are hereby reserved unto Seller from all Phases; and
1.03 REAL PROPERTY. Seller desires to sell, and Purchaser desires to purchase,
the Land and Improvements owned by Seller, and all of Seller's right, title and
interest in and to all rights, privileges, options, leases, licenses,
concessions, hereditaments, appurtenances, easements and rights of way in any
manner belonging to or pertaining to the Land and the Improvements, including
without limitation, rights in and to any streets, alleys or other ways adjacent
to the Land, open or proposed, and the fixtures in or upon the Land and the
Improvements owned by Seller. The Land, the Improvements and all of the items
mentioned in this Paragraph 1.03 are hereinafter collectively referred to as the
"Real Property" and are commonly known as "Eastchase Market Shopping Center."
The Real Property shall be deemed divided as applicable to each Phase and unless
specifically noted to the contrary herein, "Real Property" shall mean, as the
context requires, the Real Property applicable to the subject Phase or the Land
as a whole, exclusive of the Pads; and
2. AGREEMENT TO PURCHASE AND SELL.
2.01 INTENTIONALLY DELETED.
2.02 PURCHASE/SALE. Upon and subject to the terms and conditions set forth in
this Agreement, Seller agrees to sell and Purchaser agrees to purchase all of
the following that is hereinafter collectively referred to as the "Project":
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(a) The Real Property;
(b) All tangible personal property (the "Personal Property")
owned by Seller that is now or hereafter located upon the Real Property and used
in connection with the ownership, operation, management, or maintenance of the
Real Property and that is set forth on Schedule 2.02(b) attached hereto;
(c) All intangible personal property (the "Intangible
Property") owned by Seller that is now or is hereafter located upon the Real
Property or is used in connection with the Real Property, including without
limitation, (i) all trade names, logos and telephone numbers, excluding those
tradenames or logos depicting or containing the name or trademark of Opus South
Corporation or its affiliates and excluding telephone numbers not exclusively
used in connection with the Project; (ii) all Guaranties (as hereinafter
defined) given by Seller or any third party contractors, subcontractors, vendors
and suppliers relating to their performance, quality of workmanship and quality
of materials supplied in connection with the construction or repair of the
Improvements or the purchase or any Personal Property to the extent any
Guaranties remain outstanding as of the applicable Closing Date (as hereinafter
defined) that are set forth on Schedule 5.01(g) attached hereto, and (iii) to
the extent transferable by Seller, all of Seller's right, title and interest in
certificates of occupancy (or the local equivalent), permits, licenses,
approvals and authorizations (collectively, the "Permits") issued by any
federal, state, county and municipal governmental or quasi-governmental
authority relating to the Real Property.
3. PURCHASE PRICE AND MANNER OF PAYMENT.
3.01 PURCHASE PRICE. The total sum (the "Purchase Price") to be paid by
Purchaser to Seller for the sale of the Project is the sum of the Closing
Payments and those Footage Payments and Earn-Out Payments, if any (as those
terms are hereinafter defined), computed, in part, in respect to the base rents
set forth in the Rent Roll attached hereto as Schedule 3.01, all as provided in
Section 13 hereof. The actual amount of the Purchase Price is subject to the
computations and elections provided in Section 13 hereof and subject to the
adjustments, if any, provided in Section 14 hereof. Portions of the Purchase
Price will be paid at various times as hereinafter provided.
3.02 PURCHASE PRICE PORTIONS. The Purchase Price shall be paid as follows:
(a) Initial Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Initial Deposit"), which Purchaser deposited with Escrow
Agent (as hereinafter defined) simultaneous with the execution of this Agreement
by Purchaser and Seller.
(b) Second Deposit. Twenty-Five Thousand and 00/100 Dollars
($25,000.00) (the "Second Deposit") which Purchaser shall deposit with Escrow
Agent on the expiration date of the Site Analysis Period (as hereinafter
defined), if Purchaser elects to proceed with this
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transaction, as more fully provided in Paragraph 5.03 below (the Initial Deposit
and the Second Deposit are hereinafter collectively referred to as the
"Deposit"). The term "Deposit" shall be deemed to include all interest accruing
on the Deposit during the term of this Agreement.
(c) Closing Date Price. So much of the Purchase Price computed
in accordance with the provisions of Paragraph 13.02 hereof that is payable as
of the applicable Closing Date, after giving credit for the Deposit in respect
to the Phase I Closing Date (as hereinafter defined) and after making the
adjustments, if any, as provided in Section 14 hereof, shall be paid by wired
funds to the Escrow Agent for disbursement to Seller on the applicable Closing
Date by not later than 2:00 P.M. Central Daylight Savings Time in respect to
Phase I, and 2:00 P.M. Central Standard Time in respect to Phase II.
(d) Earn-Out Period Payments. As provided in Paragraph 13.07,
those Earn-Out Payments that are payable during, or in some instances, after the
Earn-Out Period (as hereinafter defined) shall be paid by wired funds to the
Escrow Agent for disbursement to Seller when required by the provisions of
Paragraph 13.07.
(e) Footage Payment. As provided in Paragraph 13.08, if a
Footage Payment (as hereinafter defined) is payable, it shall be paid by wired
funds to the Escrow Agent for disbursement to Seller when required pursuant to
Paragraph 13.08.
4. ESCROW.
4.01 ESCROW AGENT. The Parties hereby designate First American Title Insurance
Company as the escrow agent ("Escrow Agent" or "Title Company"). By execution of
this Agreement, Escrow Agent agrees to be bound by the terms and conditions of
this Agreement which relate to the Escrow Agent and its rights and obligations
hereunder.
4.02 FILINGS. The Parties hereby designate Escrow Agent to serve as "Real Estate
Broker," as defined in Section 6045 of the Internal Revenue Code, as amended,
for the purpose of making such reports and filing such returns as shall be
required thereunder from time to time.
5. SITE ANALYSIS.
5.01 SITE ANALYSIS DOCUMENTS. To the extent not heretofore delivered, promptly
after the execution of this Agreement, Seller agrees (i) to make available for
inspection at reasonable times by Purchaser and its agents any and all
documents, instruments, surveys, reports, plans, permits, approvals, studies,
reviews, analyses, contracts, agreements and other materials relating to the
acquisition, development, construction, ownership and operation of the Project
that are in Seller's possession or under its control, and (ii) to deliver to
Purchaser true and correct copies of the following documents (in respect to
clause (ii) collectively hereafter referred to as "Site Analysis Documents"):
(a) "As-built" survey of the Project showing the location of
all Improvements thereon and any easements encumbering the Project.
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(b) Soil, topographical, and other reports relating to the
Project, including the environmental reports set forth on Schedule 5.01(b)
("Environmental Reports") attached hereto.
(c) Operating statements and records sufficient to accurately
show all revenues, income, costs and expenses of operating and maintaining the
Project for the period on and after the opening of the Project for business.
(d) All written contracts for repair, maintenance, garbage
removal, concessions, vending, service contracts, and other services to be
performed with respect to the Project.
(e) All Leases (as hereinafter defined) and all written
licenses, concessions and tenancies with Tenants (as hereinafter defined)
occupying or having the right to occupy any portion of the Project, and Seller's
written statement of any oral leases, licenses, concessions and tenancies with
tenants, licensees, concessionaires or others occupying or having the right to
occupy or use any portion of the Project, if any.
(f) All final, as-built architectural drawings, engineering
studies, plans and specifications relating to the original and current
construction of the Project (hereinafter collectively referred to as "Plans").
(g) All warranties and guaranties that remain outstanding as
of the applicable Closing Date that have been given by Seller or any third party
contractors, subcontractors, vendors and suppliers relating to their
performance, quality of workmanship and quality of materials supplied in
connection with the construction, manufacture, development, installation and
operation of the Improvements, Personal Property and any and all fixtures,
equipment and items of personal property comprising all or any part of the
Improvements located in or used in connection with the Project (collectively
hereinafter referred to as "Guaranties"), all of which are set forth on Schedule
5.01(g) attached hereto.
5.02 ACCESS. Seller acknowledges that to enable Purchaser to proceed with this
transaction, Purchaser already has had and, during the Site Analysis Period (as
hereinafter defined), may require further access to the Project to undertake or
cause to have undertaken further tests and studies, including, but not limited
to, marketing, engineering, environmental, feasibility and soil that Purchaser,
in its reasonable discretion, deems necessary to determine the feasibility of
its acquisition of the Project (hereinafter collectively referred to as "Tests
and Studies"). The Tests and Studies conducted by or on behalf of Purchaser and
the restoration of the Project in respect thereto as hereinafter provided shall
be done in such a fashion so as to not disrupt the ordinary course of business
of Seller or any of the Tenants, New Tenants (as hereinafter defined) or
Seller's contractors or subcontractors.
Purchaser and its agents, contractors or employees shall have
the right to enter upon the Project (both Phase I and Phase II) for the purpose
of performing its Tests and Studies, provided said activities (i) shall not (y)
in any way damage the Project in such a fashion or to a
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degree that prevents its restoration by Purchaser as hereafter provided
substantially to the condition of the Project that existed immediately prior
thereto, or (z) void or make voidable any Guaranties of portions thereof (but in
any event subject to Seller's prior consent that shall not be unreasonably
withheld or delayed), and (ii) Seller or its designated agents have the right to
participate in (provided Seller and its agents do not interfere with) such Tests
and Studies. Purchaser shall give Seller twenty-four (24) hour advance notice
before Purchaser and its agents, contractors or employees enter upon the
Project. In the event this Agreement fails to close for any reason, except for
Seller's willful refusal to convey (absent a material default hereunder by
Purchaser) title to the Land as required hereunder, or Seller's acknowledged or
subsequently determined material default hereunder ("Restoration Forgiveness"),
Purchaser shall restore the Project to substantially the same condition that
existed immediately prior to such surveying, inspecting and testing that were
undertaken by or on behalf of Purchaser prior to the date of this Agreement or
during the Site Analysis Period. Except in the instance of a Restoration
Forgiveness, Purchaser shall keep the Project free of all liens in connection
with the Tests and Studies and shall cause all such liens to be removed
immediately upon its being notified of same. Except in the instance of a
Restoration Forgiveness, Purchaser agrees to indemnify, defend and hold Seller
harmless against any liabilities, claims and damages, including, without
limitation, any property damage, personal injury or claim of lien against the
Project resulting from the activities permitted by this Paragraph 5.02
(including, without limitation, reasonable attorneys' fees and expenses paid or
incurred by Seller during litigation, if any), which indemnity shall survive the
Closing Date or the expiration, cancellation or termination of this Agreement.
5.03 SITE ANALYSIS PERIOD. Purchaser shall have the Site Analysis Period in
which to conduct the Tests and Studies and to ascertain whether the Project is
acceptable to Purchaser. "Site Analysis Period" shall mean the period expiring
on June 17, 1996. The Site Analysis Period shall also include that thirty (30)
day period on and after the Phase II Notice Date (as hereinafter defined) for
those Tests and Studies on Phase II Purchaser chooses to conduct in respect to
those Improvements completed on Phase II after June 17, 1996. If the Project is
determined to be unacceptable to Purchaser, for any reason whatsoever, in
Purchaser's sole discretion, Purchaser shall have the right to terminate this
Agreement (in respect to all Phases, but not in respect to one Phase and not the
other) by giving written notice of termination on or prior to June 17, 1996, in
which event the Deposit shall be returned to Purchaser. In accordance with the
provisions of 11.02(b) hereof, Seller and Purchaser shall each pay 50% of the
Shared Closing Costs incurred as of the termination date, and neither Party
shall have any further rights or obligations hereunder, except those
specifically provided herein that survive the termination of this Agreement. A
failure to so notify Seller of Purchaser's election to terminate or proceed with
this Agreement as aforesaid prior to June 17, 1996, shall be deemed as notice to
Seller that Purchaser has elected to terminate this Agreement as aforesaid. In
addition, not less than forty-five (45) days (nor more than sixty (60) days)
prior to the date on which Seller reasonably believes the Phase II Closing Date
will occur (if at all), Seller shall advise Purchaser, in writing ("Phase II
Notice Date"), of the date on which Seller anticipates the Phase II Closing to
occur as provided in Paragraph 15.01 hereof. For the period of thirty (30) days
on and subsequent to the Phase II Notice Date, Purchaser may conduct those
additional Tests and Studies on or in respect to Phase II pertaining to (i) any
defects or deficiencies of Phase II in respect to its compliance with any and
all codes, ordinances, statutes, Permits, approvals or licenses issued in
respect to
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Phase II or promulgated by any federal, state, county or municipal government or
quasi-governmental authority which are required by such governmental or
quasi-government authority to correct, (ii) any other defects in the materials
or workmanship of Phase II from that which is required to be in substantial
compliance with the Plans, except that portion thereof, if any, that relates to
materials for, or workmanship of improvements constructed or to be constructed
on behalf of Tenants or New Tenants that form a part of the Phase II Post
Closing Work (as that term is hereinafter defined), (iii) violations of
Environmental Laws (as hereinafter defined), or (iv) conditions determined in
good faith that are existing on-site or off-site of Phase II (except on Phase I)
that if not corrected may, in the future, become violations of Environmental
Laws in respect to Phase II which in the instance of clauses (i), (ii), (iii)
and (iv) did not exist as of June 17, 1996. If Purchaser, in its reasonable
discretion, determines in respect to clauses (i) through (iv) above that there
does exist defects, deficiencies, violations or the existence of conditions that
are unacceptable to Purchaser, Purchaser shall have the right to terminate this
Agreement in respect to Phase II by giving written notice of termination on or
prior to the expiration of said thirty (30) day period in which event Seller and
Purchaser shall each pay fifty percent (50%) of the Share Closing Costs incurred
in respect to Phase II, and neither party shall have any further rights or
obligations hereunder in respect to Phase II, except those specifically provided
herein that survive the termination of this Agreement. Except for Restoration
Forgiveness, Purchaser shall cause Phase II to be restored to substantially the
same condition that existed immediately prior to any Tests and Studies performed
by Purchaser subsequent to the Phase II Notice Date, which obligation shall
survive the termination of this Agreement.
5.04 CURE OF UNACCEPTABLE CONDITIONS. Any of the Tests and Studies of Purchaser
and/or its agents or representatives conducted during the Site Analysis Period
that discloses in respect to Phase I that there are (i) any defects or
deficiencies of Phase I in respect to its compliance with any and all codes,
ordinances, statutes, Permits, approvals or licenses issued in respect to
Phase I or promulgated by any federal, state, county or municipal governmental
or quasi-governmental authority which are required by such governmental or
quasi-governmental authority to correct; (ii) any defects in the materials or
workmanship of the Project from that which is required to be in substantial
compliance with the Plans, except that portion thereof, if any, that relates to
materials for, or workmanship of improvements constructed or to be constructed
on behalf of Tenants or New Tenants that form a part of Post Closing Work (as
hereinafter defined); or (iii) a violation of Environmental Laws, in respect to
clauses (i), (ii) and (iii), can be corrected and cured for an estimated
aggregate cost (in respect to Phase I) not to exceed One Hundred Thousand
Dollars ($100,000.00), shall be collectively hereinafter referred to as
"Unacceptable Conditions." In respect to Phase II, an Unacceptable Condition(s)
shall mean the same as defined in clauses (i), (ii) and (iii) above in respect
to Phase I, except, in the instance of Phase II, the estimated aggregate cost of
correcting and curing the same shall not exceed Fifty Thousand Dollars ($50,000)
plus One Hundred Thousand Dollars ($100,000) minus the estimated aggregate cost
of correcting and curing the Phase I Unacceptable Conditions agreed to by the
Parties or elected by Purchaser as hereafter provided ("Phase II Unacceptable
Condition Limitation"). It is understood that regardless of the cost, the
Warranty Work obligations set forth in Paragraph 24.17 hereof shall not be
included as an Unacceptable Condition in respect to the estimated $100,000.00
limitation for Phase I or the Phase II Unacceptable Conditions Cost Limitation,
and the cost of performing Warranty Work shall be in addition to any cost
associated
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with either Phase in respect to any Unacceptable Condition. In the event
Purchaser discovers what it deems to be Unacceptable Conditions as a result of
the Tests and Studies, Purchaser shall notify ("Condition Notice") Seller, in
writing, of the same promptly following Purchaser's discovery thereof, but in no
instance later than three (3) business days following the expiration of the Site
Analysis Period applicable to the entire Project or just Phase II as provided in
Paragraph 5.04 above. Such Condition Notice shall include a copy of those
portions of the Tests and Studies disclosing such Unacceptable Condition(s).
Within ten (10) days following Seller's receipt of the Condition Notice, if any,
Seller shall advise ("Condition Response") Purchaser, in writing, of Seller's
good faith determination and estimate of (1) those matters contained in the
Condition Notice that do not qualify as Unacceptable Conditions; (2) the time
within which the remaining matters contained in the Condition Notice will be
cured or corrected; and (3) the aggregate cost to Seller of curing and
correcting such remaining matters. In the event the Condition Response is
unacceptable to Purchaser, Seller and Purchaser shall promptly meet and confer,
in good faith, to attempt to resolve the unacceptable aspects to Purchaser of
the differences between the Condition Notice and the Condition Response or the
time within which or the aggregate cost for which Seller estimated in the
Condition Response for curing or correcting as aforesaid. In the event Seller
and Purchaser are unable to resolve such differences, Purchaser may elect to (a)
terminate this Agreement in respect to the applicable Phase (provided, if
Purchaser elects a termination in respect to Phase I, it shall act as
Purchaser's election to terminate in respect to all Phases), (b) proceed to each
of the Phase Closings in respect to Seller's obligations to cure or correct
those matters set forth in the Condition Response, modified, if at all, as a
result of the aforesaid conference between Purchaser and Seller (provided the
estimated aggregate cost of performing the same does not exceed $100,000.00 in
respect to Phase I, the Phase II Unacceptable Condition Cost Limitation in
respect to Phase II, or such greater amount Seller, in its sole discretion, has
agreed to expend), or (c) proceed to each of the Phase Closings and select those
specific line items from the Condition Response that Purchaser requires to have
corrected (provided the estimated aggregate cost of performing the same does not
exceed $100,000.00 in respect to Phase I, and the Phase II Unacceptable
Condition Cost Limitation in respect to Phase II). Purchaser, within ten (10)
business days after such conference, shall advise Seller, in writing, of
Purchaser's election. If the Condition Notice, Condition Response or the time
periods specified above for elections of Purchaser extend beyond the applicable
Closing Date, such Closing Date shall be extended to the date five (5) business
days subsequent to the date Purchaser elects, if at all, to proceed with the
applicable Closing. In the event Purchaser elects to terminate this Agreement,
in respect to Phase I, the Deposit shall be returned to Purchaser, Purchaser and
Seller shall each pay fifty percent (50%) of the Shared Closing Costs incurred
as of the termination date, and neither Party shall have any further rights or
obligations hereunder, except those specifically provided herein that survive
the termination of this Agreement. In the event Purchaser elects to proceed to
each of the Phase Closings pursuant to clause (b) above, the matters contained
in the Condition Response, modified, if at all, by Purchaser's and Seller's
conference and provided the estimated aggregate cost of curing or correcting the
same is One Hundred Thousand Dollars ($100,000.00) or less in respect to Phase
I, or equal to or less than the Phase II Unacceptable Condition Cost Limitation
in respect to Phase II, (or such greater amount Seller accepts as aforesaid)
shall be deemed to be the Unacceptable Conditions to which Seller is bound. In
the event Purchaser elects to proceed to each of the Phase Closings pursuant to
clause (c) above, the specific line items selected by
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Purchaser that are set forth in the Condition Response (provided the estimated
aggregate cost of curing or correcting the same is in the amounts as aforesaid
in respect to Phase I and Phase II) shall be deemed to be the Unacceptable
Conditions to which Seller is bound. Thereafter, in respect to the applicable
Phase, Seller shall undertake to cure or correct such Unacceptable Conditions,
at its sole cost and expense (regardless of the actual cost ultimately incurred
by Seller in respect thereto) within the time (subject to Force Majeure, as
hereinafter defined) set forth in the Condition Response. The obligation of
Seller to cure or correct such Unacceptable Conditions shall survive the
Closing. In the event (y) Seller fails to commence the cure of an Unacceptable
Condition(s) on or prior to the time specified in the Condition Response for the
completed cure thereof, or (z) Seller commences the cure of an Unacceptable
Condition(s), but fails to complete such cure prior to the time specified in the
Condition Response (subject to Force Majeure), Purchaser may off-set so much of
any Earn-Out Payment or Footage Payment subsequently payable by Purchaser
hereunder by the amount of the reasonable costs and expenses incurred by
Purchaser for undertaking and completing the uncured Unacceptable Condition(s).
The curing or correcting of any Unacceptable Condition shall be done in
accordance with the Plans. However, if such curing or correcting requires a
variance from the Plans, Seller shall not undertake such variance without
obtaining Purchaser's prior written consent, which consent shall not be
unreasonably withheld or delayed.
6. SURVEY AND TITLE INSURANCE.
6.01 SURVEY. Seller shall cause an "as-built" Survey (the "Survey") of the Phase
I and Phase II Real Property to be updated during the applicable Site Analysis
Period. The Survey for each Phase shall be certified to Seller, Purchaser, and
the Title Company. The Survey for each Phase shall satisfy all of the
requirements set forth on Schedule 6.01 that is attached to and made a part of
the Exhibit Agreement (as hereinafter defined).
6.02 TITLE COMMITMENT. During the Site Analysis Period for each Phase, to the
extent not theretofore delivered, Seller shall (i) cause the Title Company to
issue and deliver to Purchaser a title insurance commitment for the applicable
Phase for an owner's extended coverage policy of title insurance, in the amount
of that portion of the Purchase Price applicable to the subject Phase then
estimated to be payable to Seller on the applicable Closing Date, committing the
Title Company to insure Purchaser as the owner of fee simple title to all of the
Phase Real Property, as applicable, and all easements appurtenant thereto (the
"Commitment"), and (ii) copies of each document described on Schedule B of the
Commitment.
6.03 PURCHASER'S OBJECTIONS; SELLER'S CURE. Other than those title exceptions
("Permitted Exceptions") applicable to Phase I and Phase II set forth in
Schedule 6.03 attached hereto and made a part hereof, which shall include the
Allocable Share Agreement set forth in Paragraph 7.24 and 8.08 hereof, and
exceptions caused by or claimed under or through Seller that will be removed at
the applicable Phase Closing (as hereinafter defined) if (i) the Commitment
reveals any other matters or exceptions ("Title Defects"), or (ii) the Survey
reveals any defects which affect the marketability of the applicable Phase or
are deemed objectionable by Purchaser ("Survey Defects"), Purchaser shall notify
Seller, in writing, of the same within fifteen (15) days following the date of
delivery to Purchaser of the last of the Commitment and Survey ("Defects
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Notice") for the subject Phase. In the event Purchaser fails to deliver a
Defects Notice as aforesaid, Seller shall advise Purchaser of such failure, in
writing. If Purchaser fails, within three (3) business days thereafter to
deliver a Defects Notice, it shall be deemed a notice to Seller that Purchaser
has elected to waive such defects, if any, and to proceed with the transaction
contemplated hereby, subject to the fulfillment of Seller's obligations
hereunder. Except for Title Defects or Survey Defects that are caused by or
claimed under or through Seller that can be removed or discharged by the payment
of a sum of money (including, without limitation, a Mortgage(s), as hereinafter
defined), Seller shall have no affirmative obligation to cure or correct any
Title Defects or Survey Defects, except as provided in Seller's Response (as
hereinafter defined). Within fifteen (15) days following Seller's receipt of a
Defects Notice, Seller, at its option, shall notify Purchaser of those Title
Defects and Survey Defects that Seller shall undertake to cure or correct
("Seller's Response"). In the event Seller (a) elects in Seller's Response not
to satisfy a specified Title Defect or Survey Defect or (b) is unable, within
sixty (60) days after Purchaser's receipt of Seller's Response, to satisfy the
Title Defect or Survey Defect which Seller had elected in Seller's Response to
so satisfy, Purchaser may, at its option, (1) accept title to the applicable
Phase subject to the Title Defects and/or Survey Defects raised by Purchaser in
which event such Title Defects and Survey Defects shall be deemed to be
Permitted Exceptions for such Phase, or (2) cancel this Agreement and receive a
full refund of the Deposit (if the cancellations is in respect to Phase I),
whereupon Seller shall pay all Shared Closing Costs and this Agreement shall be
of no further force and effect, except for those matters which are specifically
set forth in this Agreement as surviving the expiration or termination of this
Agreement. If Purchaser elects to accept Title and/or Survey Defects in respect
to Phase I, it shall be deemed to have elected to accept the same Title and/or
Survey Defects in respect to Phase II, to the extent the same affect Phase II.
In the event Purchaser elects to terminate this Agreement in respect to Phase I,
it shall act as Purchaser's election to terminate this Agreement in respect to
Phase II. If the Defects Notice, Seller's Response or the time periods specified
above for elections of Purchaser extend beyond the time specified for the
applicable Closing Date, such Closing Date shall be extended to the date five
(5) business days subsequent to the date Purchaser elects, if at all, to proceed
with the applicable Closing.
6.04 TITLE POLICY. It shall be a condition precedent to Purchaser's obligation
to consummate the Phase transactions contemplated by this Agreement that the
Title Company can and will issue an Owner's Policy of Title Insurance in the
standard form available in the State of Texas (the "Title Policy") for each
Phase in the full amount of that portion of the Purchase Price payable by
Purchaser on each of the Closing Dates as provided in Paragraph 13.02 hereof,
insuring Purchaser as the owner in fee simple of the applicable Phase, and all
appurtenant easements thereto, free and clear of all liens and encumbrances,
except for the Permitted Exceptions, and without exception for rights or claims
of parties in possession not shown by the public records, encroachments,
overlaps, boundary line disputes, or any other matter disclosed by the Survey
which Purchaser has not waived or approved or is deemed to have approved
pursuant to Paragraph 6.03 hereof, provided, however, that the Title Policy may
show the rights of the Tenants and New Tenants (as hereinafter defined) under
New Leases that are fully executed prior to the applicable Closing as parties in
possession (or right to possession) as tenants only. Purchaser shall attempt to
cause the Title Company, as part of the Title Policy, to issue the
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following endorsements in the form of those set forth in Schedule 6.04 attached
hereto ("Endorsements"): CC&R Endorsement, if available (unless easements
appurtenant to the applicable Phase are additionally insured parcels on Schedule
A of the Title Policy), Survey and Encroachment. Any Survey or physical
inspection requirements imposed as a condition to the issuance of each Title
Policy may be satisfied by Seller as a Shared Closing Cost, except costs and
expenses in respect to correcting Survey Defects which shall be paid by Seller.
Seller shall execute such affidavits and certificates as the Title Company may
require as a condition to the issuance of each Title Policy, and a copy of each
such affidavit or certificate shall be delivered to Purchaser. In addition, as
part of the Shared Closing Costs, Seller shall cause (i) the applicable Title
Policy to be dated down to the date each Earn-Out Payment (as hereinafter
defined) is paid during or after the Earn-Out Period showing no new exceptions,
except the Permitted Exceptions, the subject or previous New Leases, and
exception caused, permitted or claimed by, through or under Purchaser or its
successors and assigns; and (ii) the amount of the Title Policy's coverage to be
increased to an amount that equals the subject Earn-Out Payment.
7. SELLER'S CLOSING DOCUMENTS AND ESCROW.
At each Phase Closing, Seller shall execute and deliver the
following documents to Escrow Agent:
7.01 DEED. A signed special warranty deed in the form and substance (modified
for the subject jurisdiction) attached to the Exhibit Agreement as Schedule 7.01
(the "Deed") conveying to Purchaser, good, indefeasible and insurable title to
the applicable Phase and the Improvements thereon, free and clear of all liens
and encumbrances of any type whatsoever, except for the Permitted Exceptions.
The Permitted Exceptions shall be specifically, and not categorically, excepted
from the warranty of title in the Deed.
7.02 ASSIGNMENT OF LEASES. For the applicable Phase, an assignment (the "Lease
Assignment") in the form attached to the Exhibit Agreement as Schedule 7.02 of
all (except in respect to the Assignment Reservation as provided in Paragraphs
13.03, 14.01, 14.02 and 14.03 hereof) of the Seller's right, title and interest
as lessor under the leases, tenancies, occupancy agreements, rental agreements,
options, licenses and concessions, and all of the foregoing (hereinafter
collectively referred to as the "Leases") which are described on Schedule
7.02(a) attached hereto, and all New Leases that are fully executed prior to the
applicable Closing, together with all security deposits, cleaning deposits, key
deposits and advance rental payments (collectively, the "Security Deposits")
made by the lessees, tenants, occupants, optionees, licensees and
concessionaires (collectively, in respect to the applicable Phase, the
"Tenants") and New Tenants under the Leases and subject New Leases.
7.03 LEASES AND TENANT DOCUMENTS. All original copies of the applicable Phase
Leases and New Leases that are fully executed prior to applicable Closing,
Tenant and the subject New Tenant financial statements, their sales reports and
other Tenant and the subject New Tenant related documents, and to the extent, if
any, that original copies are not delivered,
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Seller shall deliver copies which shall be accompanied by an affidavit sworn to
by Seller confirming that the copies delivered are true and complete copies of
the originals.
7.04 ▇▇▇▇ OF SALE. A ▇▇▇▇ of sale in the form attached to the Exhibit Agreement
as Schedule 7.04, transferring and conveying to Purchaser all of Seller's right,
title and interest to the applicable Phase Personal Property and the Intangible
Property.
7.05 ASSIGNMENT OF CONTRACTS. An assignment (the "Contract Assignment") in the
form attached to the Exhibit Agreement as Schedule 7.05, of all of Seller's
right, title and interest as the owner of the applicable Phase under the service
contracts and agreements, personal property leases and agreements (collectively,
the "Contracts") which are described on Schedule 7.05(a) attached hereto and
which have been approved by Purchaser as being those Contracts that are assigned
to Purchaser pursuant to the Contract Assignment.
7.06 VIOLATIONS/WORK ORDERS AFFIDAVIT. An affidavit, in form and substance of
Schedule 7.06 attached to the Exhibit Agreement, confirming that Seller has
complied with and discharged (or, to the extent Seller has not complied with and
discharged, an explanation of that which remains to be done to cause compliance
and discharge) (i) all notices, if any, that either Seller or its management
agent managing the Real Property received concerning any and all uncured
violations (the "Violations") of any law, statute, ordinance, regulation, rule,
requirement, order, judgment or decree enacted, adopted, imposed, issued,
entered or filed by any governmental authority (concerning or affecting the
Project or any part thereof), and (ii) all work orders concerning the Project or
any part thereof, if any (the "Work Orders") issued by any insurance carriers
insuring a risk in respect to the Project.
7.07 KEYS. All keys to the applicable Phase.
7.08 PLANS AND SPECIFICATIONS. To the extent not delivered prior to the Phase I
or Phase II Closing Date as part of the Site Analysis Documents, all Plans.
7.09 TITLE INSURANCE AFFIDAVIT. Any affidavit required by the Title Company to
remove the standard printed exceptions from the applicable Title Policy.
7.10 FIRPTA CERTIFICATE/WITHHOLDING. A certificate in the form and substance
attached to the Exhibit Agreement as Schedule 7.10 ("FIRPTA Affidavit").
7.11 FORM 1099. Any information with respect to Seller in connection with the
conveyance of the applicable Phase Real Property by Seller to Purchaser required
by either (i) IRC Sec. 6045 or Treas. Regs. Sec. 1.6045, or (ii) Treas. Form
1099 or its instructions. If required thereby, the Escrow Agent shall timely (x)
prepare and file a Form 1099 in accordance with the provisions of Treas. Regs.
Sec. 1.6045, and (y) furnish the Parties with copies.
7.12 BOOKS AND RECORDS. Copies of all accounting books and records relating to
the operation and maintenance of the applicable Phase.
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7.13 LETTERS TO TENANTS. Letters in the form and substance set forth in Schedule
7.13 that is attached to the Exhibit Agreement (the "Tenant Letters") addressed
to the applicable Phase Tenants and New Tenants of New Leases executed prior to
the applicable Closing and signed by Seller, advising the Tenants and New
Tenants of the sale of the applicable Phase and the Purchaser's right to receive
the Rents (as hereinafter defined) under their respective Leases.
7.14 RECORDING REQUIREMENTS. All documents and affidavits required of Seller to
record the Deed.
7.15 ESTOPPEL CERTIFICATES. An estoppel certificate in the form and substance
set forth in Schedule 7.15 that is attached to the Exhibit Agreement ("Tenant
Estoppel") showing no material exceptions that is executed (not more than
forty-five (45) days prior to the applicable Closing Date or such earlier date
Purchaser reasonably accepts) by (i) all Tenants or New Tenants of the
applicable Phase Leases and New Leases that are Qualified Leases on or prior to
the applicable Closing Date that have demised to them space in the applicable
Phase containing 7,500 square feet or more, and (ii) at least eighty percent
(80%) (calculated on a square foot basis) of all Tenants or New Tenants of the
applicable Phase Leases or New Leases that are Qualified Leases on or prior to
the applicable Closing Date that have demised to them space in the applicable
Phase containing less than 7,500 square feet. To the extent Seller is unable to
deliver to Purchaser Tenant Estoppels from all or any of the remaining Tenants
or New Tenants in the applicable Phase under such Qualified Leases in respect to
premises containing less than 7,500 square feet or a Tenant Estoppel in respect
to a premises that is 7,500 square feet or less that contains a material
exception noted by the applicable Tenant or New Tenant, Seller shall be entitled
to deliver to Purchaser Seller's estoppel certificate ("Seller's Estoppel") in
form and substance reasonably acceptable to Purchaser confirming the terms and
conditions of the Lease or subject New Lease for which a Tenant Estoppel was not
delivered to Purchaser or, if delivered, that contains a material exception.
Such Seller's Estoppel shall be deemed a representation and warranty by Seller
as to the terms and conditions of the subject Lease or New Lease, and the
Seller's Estoppel shall not be subject to the time limitation for claims set
forth in Paragraph 10.04(b) hereof. After the applicable Closing, when and as
Purchaser receives a Tenant Estoppel (without material exception) for which
Seller delivered a Seller's Estoppel, the subject Seller's Estoppel shall be
released by Purchaser and returned to Seller and shall be deemed to be of no
further force and effect.
7.16 TERMINATION OF MANAGEMENT AND SELLER AFFILIATED CONTRACTS. Notwithstanding
any other provision of this Agreement, in respect to any agreements or contracts
that are not to be included as part of the Contract Assignment, agreements
("Termination Agreements") signed by (i) the parties to any management agreement
for the applicable Phase, and (ii) the parties to all other such agreements or
contracts for the applicable Phase between the Seller or its predecessors in
interest and parties affiliated with or controlled by Seller or any of Seller's
principals, which Termination Agreements terminate such management agreement and
other such agreements and contracts as of the applicable Closing Date, without
any liability or obligation on the part of the Purchaser or the applicable
Phase.
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7.17 PERMITS/GUARANTIES. Original or copies of applicable Phase Permits and
originals of the applicable Phase Guaranties which, in each instance, Seller
agrees to keep in full force and effect, and to comply with all of the terms and
conditions thereof prior to the applicable Closing.
7.18 CLOSING STATEMENTS. Closing Statements executed by Seller.
7.19 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the applicable
Closing.
7.20 DATE DOWN CERTIFICATE. A certificate of Seller (the "Seller Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 7.20 certifying that Seller's representations and warranties set forth
in Paragraph 10.01 of this Agreement are true and correct as of the applicable
Closing Date as modified by the Schedules that are attached hereto pursuant to
Paragraph 10.01 hereof that are updated to the applicable Closing Date. In the
event any updated Schedules disclose a material deviation from the prior
applicable Schedule as reasonably determined by Purchaser, Purchaser shall have
three (3) business days from the Date Purchaser receives a copy of the Seller
Date Down Certificate in which to elect to terminate this Agreement or to
proceed with the Closing in accordance with the updated Schedules. In the event
Purchaser fails to notify Seller, in writing, of Purchaser's election to
terminate this Agreement, it shall act as notice to Seller that Purchaser has
elected to terminate this Agreement in respect to the applicable and subsequent
Closing. In the event Purchaser elects to terminate this Agreement, the Deposit
shall be refunded to Purchaser (in respect to Phase I only), Purchaser and
Seller shall each pay fifty percent (50%) of the Shared Closing Costs, and this
Agreement shall be of no further force and effect, except in respect to those
provisions specifically provided herein as surviving the termination of this
Agreement. In the event Purchaser elects to terminate this Agreement as
aforesaid in respect to Phase I, it shall act as Purchaser's election to
terminate this Agreement in respect to Phase II.
7.21 AGREEMENT ESTOPPEL CERTIFICATE. An estoppel certificate in form and
substance attached hereto as Schedule 7.21 ("Agreement Estoppel") showing no
material exceptions that are executed by each party to those easement agreements
or other agreements or undertakings (including, but not limited to, development
agreements) affecting the Project on and after the Closing Date that require the
performance of obligations by the owner of the Project and the approval of such
performance by the other party to the same that are identified by Purchaser to
Seller, in writing, not less than fifteen (15) days prior to the applicable
Closing Date. To the extent such Agreement Estoppel shows a material exception
or the party to such easement agreements or other agreements or undertakings
identified by Purchaser as aforesaid fails to deliver an Agreement Estoppel,
Seller shall be entitled to deliver its undertaking confirming, in form and
content reasonably acceptable to Purchaser, the terms and conditions of the
Agreement Estoppel to the extent applicable in the form attached hereto as
Schedule 7.21, and such confirmation by Seller shall not be subject to the time
limitation for claims set forth in Paragraph 10.04(b) hereof. After the Closing,
when and as Purchaser receives an Agreement Estoppel for which Seller delivered
its undertaking as aforesaid, the subject undertaking shall be
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released by Purchaser and returned to Seller and shall be deemed to be of no
further force and effect.
7.22 PAD AND PHASE II COVENANT.A declaration encumbering title to the Pads and
Phase II in respect to the exclusion of uses thereon that violate any of the
exclusive uses permitted under Leases or New Leases for Phase I as of the Phase
I Closing Date, in form and content reasonably acceptable to Seller and
Purchaser.
VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the
location within the applicable Phase of any space that is Vacant Space as of the
applicable Closing.
7.24 ALLOCABLE SHARE AGREEMENT. The agreement by the Parties in the form
attached hereto as Schedule 7.24 that sets forth the approvals of the Parties
under the terms of the Operation and Easement Agreement that is a Permitted
Encumbrance.
7.25 ASSIGNMENT OF DECLARATION. An Assignment of Declaration in the form
attached hereto as Schedule 7.25 assigning to Purchaser Seller's rights under
the terms of the Operation and Easement Agreement that is a Permitted
Encumbrance.
7.26 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the applicable Phase transaction contemplated by this Agreement.
8. PURCHASER'S PRE-CLOSING AND CLOSING DOCUMENTS.
At each Phase Closing, Purchaser shall execute and deliver the
following to Escrow Agent:
8.01 ASSIGNMENT OF LEASES. The Lease Assignment, acknowledging the assumption by
Purchaser of Seller's obligations under the Leases which accrue after the
applicable Closing Date.
8.02 ASSIGNMENT OF CONTRACTS. The Contract Assignment, acknowledging the
assumption by Purchaser of Seller's obligations under the Contracts which accrue
after the applicable Closing Date.
8.03 CLOSING STATEMENTS. Closing Statements executed by Purchaser.
8.04 ESCROW INSTRUCTIONS. Signed escrow instructions, reasonably satisfactory to
Escrow Agent, in form and substance sufficient to carry out the applicable
Closing.
8.05 RECORDING REQUIREMENTS. All documents and affidavits required of Purchaser
to record the Deed.
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8.06 DATE DOWN CERTIFICATE. A certificate of Purchaser (the "Purchaser Date Down
Certificate") in form and substance attached to the Exhibit Agreement as
Schedule 8.06 certifying that Purchaser's representations and warranties set
forth in Paragraph 10.02 of this Agreement are true and correct as of the
applicable Closing Date.
8.07 PHASE I COVENANT. At the Phase I Closing, a declaration encumbering title
to Phase I in respect to the exclusion of uses thereon that violate any of the
exclusive uses permitted under Leases or New Leases in Phase II or the Pads, in
form and content reasonably acceptable to Seller and Purchaser.
8.08 ALLOCABLE SHARE AGREEMENT. The agreement by the Parties in the form
attached hereto as Schedule 7.24 that sets forth the approvals of the Parties
under the terms of the Operation and Easement Agreement that is a Permitted
Encumbrance.
8.09 VACANT SPACE ACKNOWLEDGMENT. The acknowledgment of the location within the
applicable Phase of that space that is Vacant Space as of the applicable Closing
8.10 SIGN EASEMENT AGREEMENT. The Sign Easement Agreement in the form attached
hereto as Schedule 8.10.
8.11 OTHER DOCUMENTS. Such other documents as may be reasonably required to
close the applicable Phase transaction contemplated by this Agreement.
9. CONDUCT OF BUSINESS PRIOR TO CLOSING.
9.01 AFFIRMATIVE AND NEGATIVE COVENANTS. Until the applicable Closing, in
respect to the applicable Phase, Seller shall or cause to:
(i) Subject to Casualty or any Taking (as those terms are
hereinafter defined), maintain the applicable Phase and Phase Personal Property
in good condition and repair and not commit or permit waste;
(ii) Carry on its business in respect to the Project in the
same manner as it has heretofore;
(iii) Keep in full force and effect all insurance coverage
required to be maintained by it pursuant to the Leases, applicable New Leases,
the Mortgages, the Permitted Exceptions, and any easement agreements or other
agreements or undertakings affecting the Project;
(iv) Perform all of its obligations under the Contracts,
Leases, applicable New Leases, Mortgages, Permitted Exceptions and any easement
agreements or other agreements or undertakings affecting the Project;
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(v) Maintain and preserve its business organization intact;
(vi) Maintain and preserve its relations with the Tenants, New
Tenants under New Leases that are fully executed prior to the Closing, suppliers
and customers;
(vii) Except as provided in Paragraph 13.04 hereof, not
voluntarily terminate, amend, modify, extend, renew, waive or accept the
surrender of any Lease or New Lease or provision thereof, without Purchaser's
prior consent, which consent shall not be unreasonably withheld or delayed;
(viii) Not voluntarily terminate, amend, modify, extend,
renew, waive or accept the cancellation of any Contract, Permitted Exception or
any easement agreements or other agreements or undertakings affecting the
applicable Phase or any provision of any of them, without the Purchaser's prior
consent, which consent shall not be unreasonably withheld or delayed;
(ix) Except as provided in Paragraph 13.04 hereof, not
voluntarily enter into, accept or consent to any new (a) lease, occupancy
agreement, subtenancy agreement, license agreement, concession agreement, (b)
contract or agreement, personal property lease or agreement, and/or (c) lien,
encumbrance, or security interest (including without limitation, mortgage, deed
of trust, security agreement, assignment of leases or rents, collectively,
"Mortgage") or other title exception or defect (including without limitation,
easement, restriction, dedication), which shall not be terminated on or before
the applicable Closing without the Purchaser's prior consent, which consent
shall not be unreasonably withheld or delayed;
(x) Not commence any action or proceeding or petition, apply
for or consent to any action or proceeding, the effect of which may be to change
the zoning of the Project or its assessed valuation (except for entering into
New Leases);
(xi) Not sell, assign or transfer the Project or any part
hereof (except in the instance of New Leases as provided in Paragraph 13.04
hereof), including without limitation, the Intangible Property and the Personal
Property; provided, however, that Seller may remove applicable Phase Personal
Property for the purpose of promptly effecting necessary repairs or immediate
replacement with Personal Property of like character and equal or better
quality;
(xii) Not demolish or materially alter the Improvements or any
part thereof or otherwise adversely affect the value of the Project, without
Purchaser's prior consent, which consent shall not be unreasonably withheld or
delayed, except for (1) curing Unacceptable Conditions, Title Defects and Survey
Defects, (2) completing Punchlist Work (as defined and provided in Paragraph
13.11 hereof), (3) constructing tenant improvements for Leases, (4) performing
Seller's New Lease Obligations (as defined and provided in Paragraph 13.10
hereof), and (5) completing, in accordance with the Plans, any incomplete work.
(xiii) Except as provided in Paragraph 9.01(xii) above, not
materially alter the applicable Phase or any part thereof, including without
limitation, by mining, excavating,
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removing topsoil, timbering or changing the grade, without Purchaser's prior
consent, which consent shall not be unreasonably withheld or delayed.
9.02 PAYMENTS. As more fully set forth in Paragraph 16.01 hereof, (i) Punchlist
Work; (ii) curing Unacceptable Conditions; (iii) constructing tenant
improvements for Leases and New Leases; (iv) all other work to be performed and
all payments to be made by Seller pursuant to the provisions of the Leases, the
Contracts, the Permitted Exceptions, and any insurance policy maintained by
Seller providing coverage for the Project which pertain to obligations that
accrue prior to the applicable Closing; and (v) Warranty Work shall be
completely performed and paid for when due (subject to the right to contest
Liens as provided and defined in Paragraph 9.03 hereof) by Seller and the
obligation thereof shall survive the Closing.
9.03 LIEN REMOVAL. Except for (i) taxes not yet due and payable as of the
applicable Closing, (ii) installments of special assessments due and payable
after the applicable Closing, and (iii) Liens that are either bonded or insured
over in a form reasonably satisfactory to Purchaser, all other liens and
encumbrances of ascertainable amounts incurred by Seller or by, for or on behalf
of Seller, except the Permitted Exceptions, shall be removed from the record by
Seller or Seller shall make arrangements satisfactory to the Title Company for
the removal of, or title insurance over (in form reasonably satisfactory to
Purchaser), such liens and encumbrances of record on the applicable Closing
Date. Notwithstanding the foregoing, any liens or encumbrances attaching to the
title of the applicable Phase as a result of work performed on or material
supplied to the applicable Phase by Seller or on behalf of anyone claiming by,
through or under Seller (except Tenants and New Tenants under Qualified Leases,
as hereinafter defined) or as a result of Seller's failure to pay, when due, a
Commission (collectively, "Lien" or "Liens") may be contested by Seller as
hereafter provided. Within thirty (30) days after the recording of a Lien that
is recorded or filed after the applicable Closing and that affects the closed
Phase, Seller shall, at its election, either (i) bond over the same, or (ii)
cause the Title Company to insure over the same (in form and substance
reasonably satisfactory to Purchaser), in order, in the instances of either
clause (i) or (ii) above, to reasonably protect the Purchaser and the applicable
Phase (or any part thereof) from and against the subject Lien. Thereafter, in
the manner elected by Seller, Seller may contest such Lien provided that, within
thirty (30) days following the entry by a court of competent jurisdiction of a
final judgment or decree in favor of the claimant of such Lien, Seller shall pay
and satisfy such Lien and cause it to be released of record. In the event Seller
fails to pay and satisfy any Lien within thirty (30) days following the entry by
a court of competent jurisdiction of a final judgment or decree in favor of the
claimant of such Lien or fails to bond over or insure over a Lien as provided in
this Paragraph 9.03, Purchaser may offset so much of any Earn-Out Payment or
Footage Payment subsequently payable by Purchaser hereunder by the amount
incurred by Purchaser for effectuating the satisfaction and release of the
subject Lien.
10. REPRESENTATIONS AND WARRANTIES.
10.01 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to
Purchaser that:
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(i) Seller is a Florida corporation duly created and validly
existing pursuant to the laws of the jurisdiction of its organization and is
duly qualified to do business in the jurisdiction in which the Project is
situated.
(ii) Seller is authorized and empowered to enter into this
Agreement and to perform all of its obligations under this Agreement without any
qualification whatsoever, and no consent or approval of any third party
(including, without limitation, any governmental or quasi-governmental
authority) is or was required by Seller to execute and deliver this Agreement or
consummate this transaction.
(iii) Upon the signing and delivery of this Agreement, this
Agreement will be legally binding upon Seller in accordance with all of its
provisions, except as such provisions may be qualified or limited by bankruptcy,
creditor's rights and equitable principles.
(iv) The person signing this Agreement on behalf of Seller has
been duly authorized to sign and deliver this Agreement on behalf of Seller.
(v) To the best of its Knowledge (as hereinafter defined),
Seller has not committed any act or permitted any action to be taken which would
materially adversely affect its ability to fulfill all of its obligations under
this Agreement.
(vi) The execution and delivery of this Agreement, and the
performance of Seller's obligations under this Agreement, will not violate or
breach, or conflict with, the terms, covenants or provisions of any agreement,
contract, note, Mortgage, indenture or other document of any kind whatsoever to
which Seller is a party or to which the Project is subject.
(vii) Seller has received no written notice and Seller has no
Knowledge of any uncured Work Order, or unfulfilled requirements or
recommendations issued, imposed or made by any insurers concerning the Project
or any part thereof.
(viii) To the best of its Knowledge, (i) Seller is not in
default of any obligation of Seller under any Mortgage, and (ii) Seller and/or
the Project is in compliance with all terms and conditions of the Permitted
Exceptions, including any easement agreement or other agreement or undertaking
affecting the Project.
(ix) To the best of Seller's Knowledge, the Project was
constructed, and is presently being operated, occupied and used in substantial
accordance with all applicable federal, state and local laws, rules, regulations
and ordinances governing the construction, operation, occupation and use of the
Project, and no variances to any applicable federal, state or local law, rule,
regulation or ordinance were granted in connection with the construction of the
Project.
(x) To the best of Seller's Knowledge, there is (i) no pending
or contemplated Taking affecting the Project or any part thereof, or (ii) no
pending or contemplated public
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improvement in or about the Real Property which may in any manner affect access
to or from the Project or increase the taxes assessed against the Project.
(xi) To the best of Seller's Knowledge, except for the Vacant
Space (as hereinafter defined), Seller is in receipt of all Permits required by
all governmental authorities for the construction currently being prosecuted at
the Project and the operation, occupation and use of the Project as a shopping
center; all Permits are in full force and effect; and all Permits issued to the
Project are described in respect to each Phase on Schedule 10.01(xi) attached
hereto and made a part hereof.
(xii) Neither Seller, nor, to the best of Seller's Knowledge
(except as disclosed in the Environmental Reports), any prior owner of the
Project has: (a) caused or permitted the generation, manufacture, refinement,
transportation, treatment, storage, handling, installation, removal, disposal,
transfer, production or processing of Hazardous Substances (as hereinafter
defined) or other dangerous or toxic substances, or solid wastes, except in
strict compliance with all laws; (b) caused or permitted or received any written
notice or have any actual knowledge of the Release (as hereinafter defined) or
existence of any Hazardous Substances on or about the Project or property
surrounding the Project which might affect the Project; (c) caused or permitted
or received any written notice or have any actual knowledge of any substances or
conditions on or about the Project or on property surrounding the Project which
may support a claim or cause of action, whether by any governmental authority or
any other person, under any laws ("Environmental Laws") in effect as of the date
of this Agreement and all rules and regulations promulgated thereunder,
including, but not limited to: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq. (the
"Superfund Act"); the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Sections 6921 et seq.; the Toxic Substances Control Act, 15 U.S.C. Sections 2601
et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Section 136; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et
seq.; the Federal Solid Waste Disposal Act, 42 U.S.C. Sections 6901 et seq.; the
Clean Air Act, 42 U.S.C. Sections 7401 et seq.; or any other law. For the
purposes of this Agreement the terms "Hazardous Substances" and "Release" shall
have the definitions used in the Superfund Act; provided, however, that the
definition of the term "Hazardous Substances" shall also include (if not
included within the definition contained in the Superfund Act), petroleum and
related by products, hydrocarbons, radon, asbestos, urea formaldehyde and
polychlorinated biphenyl compounds.
(xiii) Except for the Permitted Exceptions, Seller is the sole
owner of good, indefeasible and insurable fee simple title to the Land and the
Improvements, and Seller has not executed or entered into any other agreement to
purchase, sell, option, lease or otherwise dispose or alienate all or any
portion of the Project other than this Agreement, the Leases and New Leases.
(xiv) Subject to the right of Seller to contest Liens as
provided in Paragraph 9.03 hereof, all labor and services performed and material
furnished to the Project have been paid for or will be paid for in full by
Seller, and, to the best of Seller's Knowledge, there exists no
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valid basis for which a Lien or similar lien can properly be claimed against the
Project or any part thereof.
(xv) As of the date hereof, Schedule 7.02(a) attached hereto
is a complete and correct list of all Leases for each Phase, and the information
disclosed on Schedule 7.02(a) is accurate with respect to each of the Leases.
(xvi) Leasing commissions or fees that are payable in
connection with any leasing agreement or registration statement to which Seller
is a party or that Seller has accepted, in writing, that pertains to New Leases
(that will be paid by Seller as provided in Paragraph 13.11 hereof), and the
Leases described in Schedule 7.02(a), and commissions resulting from any other
agreement to which Seller is a party relating to the Project (collectively,
"Commissions") will be paid by Seller when due under the applicable leasing
agreement or registration statement.
(xvii) Except as set forth on Schedule 10.01(xvii) attached
hereto, as of the date hereof, (1) none of the Tenants or New Tenants of Leases
and New Leases that are Qualified Leases as of the applicable Closing have been
granted any economic or financial concession or inducement (collectively,
"Tenant Inducement") that will not be paid in full by Seller when due in
accordance with the applicable provisions of the subject Leases and New Leases,
and (2) none of the subject Tenants or New Tenants have deposited Security
Deposits with Seller, except those disclosed on Schedule 7.02(a) attached
hereto.
(xviii) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xviii) attached hereto, as of the date hereof, no Tenant or
New Tenant of Leases or New Leases that are Qualified Leases as of the
applicable Closing has alleged an event of default on the part of Seller which
is presently outstanding, or that Seller has not fulfilled all of its
obligations under the subject Leases or New Leases which are conditions of the
obligations of such Tenants and New Tenants to pay the Rents, including without
limitation, all work, repairs and improvements required to be furnished by
Seller pursuant to such Leases and New Leases.
(xix) To the best of Seller's Knowledge, except as set forth
on Schedule 10.01(xix) attached hereto, as of the date hereof, (1) none of the
Tenants or New Tenants under Leases or New Leases that are Qualified Leases as
of the applicable Closing are in default of any of their obligations under their
respective Leases and New Leases, and (2) no event has occurred which, with the
giving of notice, the passage of time, or both, would constitute an event of
default by such Tenant or New Tenant.
(xx) Except as set forth on Schedule 10.01(xx) attached
hereto, as of the date hereof, Seller has no notice and to the best of Seller's
Knowledge, no Tenant or New Tenant under a New Lease that is fully executed
prior to applicable Closing has advised Seller, orally or in writing, that any
Tenant or any subject New Tenant intends to give up physical or legal possession
of its demised premises, including without limitation: assigning its lease;
subletting all or part of its demised premises; vacating its demised premises;
discontinuing the operation of its business at its demised premises;
surrendering possession of its demised premises; or terminating its Lease or
subject New Lease.
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(xxi) There are no employees of Seller that are assigned to
the Project for which Purchaser shall have any obligations after the applicable
Closing.
(xxii) A description of all Guaranties relating to the
construction and equipment of the Project received by Seller that, by their
terms, are in effect on or after the applicable Closing Date are true, correct
and complete, and all Guaranties issued with respect to the Project that, by
their terms, are in effect on or after the applicable Closing Date are described
in respect to each Phase on Schedule 5.01(g) attached hereto.
(xxiii) Seller has not dealt with any broker, finder or other
person in connection with this transaction, who is entitled to any Commission,
finder's fee or similar payment as a result of the acts of Seller or its agents,
except (1) as pertains to New Leases, and in such event, all Commissions in
connection therewith shall be paid by Seller as provided in Paragraph 13.11
hereof, and (2) as pertains to Commissions not yet due and payable in respect to
Leases which shall be paid by Seller when required in respect to such Leases.
Seller acknowledges that it has conversed with ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ in connection with this transaction, but that Seller has not agreed to be
obligated to pay any fee or other compensation to either or both of them.
(xxiv) Seller has no actual Knowledge that any of the written
information provided to Purchaser by Seller or on its behalf in connection with
this transaction (including without limitation, the warranties and
representations set forth in this Agreement), is inaccurate or incomplete or
contains any untrue statement of fact.
(xxv) To the best of Seller's Knowledge, copies of documents
furnished or to be furnished to Purchaser by Seller or on its behalf in
connection with this transaction are true and complete copies of the originals.
(xxvi) As of the applicable Closing, Seller's net worth,
determined in accordance with generally accepted accounting principals
consistently applied, is greater than $5,000,000.00, exclusive of goodwill.
The term "Knowledge" when used in the context of "to the best of Seller's
Knowledge" (or any derivative form thereof) shall mean the actual (written or
oral), not imputed, knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Seller's Project Manager) or ▇▇▇▇▇ ▇▇▇▇▇▇ (Seller's Development
Manager).
10.02 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser represents and
warrants to Seller that:
(i) Purchaser is an Ohio corporation, duly organized and
validly existing pursuant to the law of the jurisdiction of its organization.
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(ii) Purchaser is authorized and empowered to enter into this
Agreement and perform all of its obligations under this Agreement without any
qualification whatsoever.
(iii) No consent or approval of any third party (including
without limitation, any governmental or quasi-governmental authority) is or was
required by Purchaser to execute and deliver this Agreement or consummate this
transaction.
(iv) Upon the signing and delivery of this Agreement, it will
be legally binding upon Purchaser in accordance with all of its provisions,
except as such provisions may be qualified or limited by bankruptcy, creditor's
rights and equitable principles.
(v) The person signing this Agreement on behalf of Purchaser
has been duly authorized to sign and deliver this Agreement on behalf of
Purchaser.
(vi) To the best of Purchaser's Knowledge (as hereinafter
defined), Purchaser has not committed any act or permitted any action to be
taken which would materially adversely affect its ability to perform all of its
obligations under this Agreement.
(vii) The execution and delivery of this Agreement by
Purchaser and Purchaser's performance of it obligations under this Agreement
shall not conflict with any law, statute, ordinance, regulation, order,
directive or decree of any governmental or quasi-governmental authority or any
contract, other agreement or obligation to which Purchaser is a party or is
otherwise bound.
(viii) Except for ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, neither
Purchaser nor its agents have dealt with any broker, finder or other person in
connection with this transaction who is entitled to any Commission or similar
payment as a result of the acts of Purchaser or its agents.
(ix) All copies of documents furnished or to be furnished to
Seller by Purchaser or on its behalf in connection with this transaction are
true and complete copies of the originals.
The term Purchaser's Knowledge, when used in the context of "to the best of
Purchaser's Knowledge" (or any derivative form thereof) shall mean the actual
(written or oral), not imputed, knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
10.03 Intentionally Deleted
10.04 INDEMNIFICATION.
(a) Except as limited by the provisions of Paragraph 23
hereof, the Parties shall indemnify and hold each other harmless, from and
against all damages, costs, expenses, liabilities, penalties and fines,
including without limitation, attorneys fees, disbursements, expert witness
fees, paralegal fees, reporters fees, reproduction and printing costs, including
any of the
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foregoing which are incurred in connection with any appeal, and amounts paid in
settlement of claims (collectively, in respect to the foregoing inclusion,
"Litigation Expenses" ), paid or incurred by the other Party as a result of any
representation or warranty of the respective Party set forth in this Agreement
not being true and correct in all material respects when made. In addition, the
indemnity provisions of this Paragraph 10.04(a) on behalf of the Purchaser shall
pertain to any claims, demands, actions, causes of action, judgments or decrees
made against or entered against Seller in respect to any Commissions or other
compensation claimed or demanded by either ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in
connection with the terms of this Agreement.
(b) Notwithstanding the foregoing, and except as provided in
Paragraph 24.17 hereof in respect to Warranty Work, Seller's and Purchaser's
right to seek or obtain indemnification, damages or other legal recourse against
the other Party hereto (or any successor thereto) with respect to a breach of
any warranty, representation or covenant made in this Agreement or in any
documents, instruments or certificate executed and delivered pursuant hereto
shall terminate, and be of no further force or effect, unless (i) by the date
which is the last to occur of three hundred sixty five (365) days after the
termination of this Agreement and three hundred sixty five (365) days after the
expiration of the Earn-Out Period (as hereinafter defined), the aggrieved Party
shall have notified the other Party, in writing, that the aggrieved Party deems
that any such warranty, representation or covenant was breached in a material
respect when made (as updated or deemed updated) and states therein, with
reasonable particularity, the nature of the alleged breach and the section or
provision of the relevant document which was allegedly breached and (ii) by the
date which is the last to occur of three hundred ninety (390) days after the
termination of this Agreement and three hundred ninety (390) days after the
expiration of the Earn-Out Period, the aggrieved Party files suit against the
other Party seeking legal or equitable recourse as a consequence of such breach.
If the aggrieved Party timely notifies the other Party as called for in the
preceding clause (i) and timely files suit against the other Party as called for
in the preceding clause (ii), then the warranty, representation or covenant at
issue shall not terminate, but rather shall continue until the dispute is
settled between Seller and Purchaser or a final, non-appealable judgment is
issued by a court of competent jurisdiction with respect thereto.
(c) Within ten (10) days after receipt by an indemnified Party
of written notice of any claim or the commencement of any action under this
Paragraph 10.04 by a third party, the indemnified Party shall, if a demand in
respect thereof is to be made against the indemnifying Party pursuant to this
Paragraph 10.04, notify the indemnifying Party in writing of the claim or the
commencement of the action, provided the failure to notify the indemnifying
Party shall not relieve the indemnifying Party from any liability which it may
have to the indemnified Party other than under this Paragraph 10.04. Each
indemnitor shall be entitled, at its cost and expense, to contest any such third
party claim or action by all appropriate legal proceedings, provided that the
indemnitor shall have first notified the indemnitee of the indemnitor's
intention to do so within ten (10) days after the indemnitor's receipt of such
notice from the indemnitee. If the indemnitee joins in any such contest, the
indemnitor shall have full authority to determine all action to be taken with
respect thereto. If, after such opportunity, the indemnitor elects not to
contest any such claim or
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action, the indemnitor shall be bound by the resolution of such claim or action
obtained by the indemnitee. If required by the indemnitor, the indemnitee shall
cooperate fully with the indemnitor and its counsel in contesting any such claim
or action or, if appropriate, in making any counterclaim or cross-claim against
the subject third party asserting the claim or bringing the action, but the
indemnitor will reimburse the indemnitee for any out-of-pocket costs and
expenses incurred by the indemnitee in so cooperating. The indemnitor shall pay
to the indemnitee, in cash, all amounts to which the indemnitee may become
entitled by reason of the provisions of this Agreement, such payment to be made
within thirty (30) days after such amounts are finally determined either by
mutual agreement or by judgment of a court of competent jurisdiction.
11. SHARED CLOSING COSTS AND OTHER EXPENSES.
11.01 EXPENSES.
(a) Seller shall pay any and all fees or costs required to be
paid by Seller to the holder of the Mortgages in connection with the sale of the
Project, including, but not limited to prepayment fees, lender's consent fees or
lender's counsel fees, if any.
(b) Purchaser shall pay the costs and expenses of all Test and
Studies including any environmental audit of the Project and any other
investigations of the Project undertaken by Purchaser and all costs and
expenses, if any, charged by a lender to Purchaser in connection with any
financing or joint venturing of this transaction.
(c) Each Party shall pay its own attorney's fees.
11.02 SHARED CLOSING COSTS.
(a) Except as set forth above in Paragraph 11.01, if each
Closing occurs, Seller and Purchaser shall each pay fifty percent (50%) of all
of the cost of the applicable Phase Commitment, Title Policy (including the
Endorsements and the dating down and increasing the amount of coverage thereof
as provided in Paragraph 6.04 hereof), updating the Survey, transferring all
Permits and Guaranties to Purchaser, all escrow fees, and all transfer,
conveyance, revenue, excise, documentary or other tax or stamps payable as a
result of the sale of each Phase (collectively, the "Shared Closing Costs").
(b) Except as provided otherwise in this Agreement, if each
Closing does not occur because of the failure of a condition to either Party's
obligation to close each Phase transaction (other than a default by a Party),
each Party shall pay fifty percent (50%) of the Shared Closing Costs.
(c) If each Closing does not occur because Seller is in
default, Seller shall pay all of the Shared Closing Costs for the applicable
Phase.
(d) If each Closing does not occur and Purchaser is in
default, Purchaser shall pay all Shared Closing Costs for the applicable Phase.
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12. CONDITIONS.
12.01 PURCHASER'S CONDITIONS. Purchaser shall not be obligated to close a Phase
transaction unless and until:
(a) Seller has delivered to the Escrow Agent the pre-closing
and closing documents described in Paragraphs 5, 6 and 7 of this Agreement;
(b) Title to the applicable Phase is delivered in accordance
with the provisions of this Agreement and the Title Company issues the
applicable Phase Title Policy to the Purchaser on the applicable Closing Date,
in the amount of that portion of the Purchase Price computed as of the
applicable Closing Date in accordance with Paragraph 13.02 hereof, insuring that
indefeasible fee simple title to the applicable Phase is vested in Purchaser,
free and clear of all liens and encumbrances, except for the Permitted
Exceptions;
(c) The applicable Phase is delivered in the physical
condition provided for in this Agreement, reasonable wear and tear excepted; and
(d) If Seller is in default in the performance of any of its
obligations under this Agreement and such default has not been cured prior to
the applicable Closing or any of the representations or warranties of Seller are
untrue or inaccurate in any material respect when made or on the applicable
Closing Date.
12.02 SELLER'S CONDITIONS. Seller shall not be obligated to close a Phase
transaction unless and until:
(a) Purchaser has delivered to the Escrow Agent that portion
of the Purchase Price computed as of the applicable Closing Date in accordance
with Paragraph 13.02 hereof;
(b) Purchaser has delivered the closing documents described in
Paragraph 8 of this Agreement; and
(c) If Purchaser is in default in the performance of any of
its obligations under this Agreement and such default has not been cured by
Purchaser prior to the applicable Closing or any of the representations or
warranties of Purchaser is untrue or inaccurate in any material respect when
made or on the applicable Closing Date.
12.03 RIGHTS UPON FAILURE OF A CONDITION. Except in the case of a default by
Seller under Paragraph 12.01(d) or by Purchaser under Paragraph 12.02(c), if a
condition of a Phase Closing of either Party is not satisfied as of the
applicable Closing Date, the Party whose condition is not satisfied at such
Closing shall have the right to (i) waive such condition and proceed with the
Phase Closing, (ii) extend the Phase Closing Date to permit additional time to
cause the unsatisfied condition to be satisfied, or (iii) terminate this
Agreement in respect to all Phases if the Phase I Closing has not already
occurred, or terminate the Phase II Closing, if the
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Phase I Closing has occurred and both Parties shall be released of all rights
and obligations hereunder in respect to the Phase that has not yet closed,
except as otherwise specifically provided for herein. If the failure of the
condition is a default, the rights of the parties shall be governed by Section
18 hereof.
13. EARN-OUT.
13.01 DEFINED TERMS. In addition to the other terms defined elsewhere in this
Agreement, the following terms shall have the following meaning:
(i) "Carry" shall mean the amount of the proportionate share
of real estate taxes and operating expenses for Phase I that is (or would have
been) allocable to the premises that are the subject of a Lease or New Lease
that becomes a Qualified Lease for the period commencing on the Phase I Closing
Date and ending on the date on which (but not including) the Earn-Out Payment
for such Qualified Lease is due and payable hereunder, reduced by the portion,
if any, of such proportionate share for the subject period that is paid to
Purchaser by the Tenant or New Tenant of such Qualified Lease. To the extent
payable but not paid by the subject Tenant or New Tenant, the portion of Rent
from the such Tenant or New Tenant that applies to the period prior the date the
subject Earn-Out Payment is due and payable shall be deemed Arrears (as
hereinafter defined).
(ii) "Closing Payment" shall mean that amount (a) that is
equal to (y) for Phase I, the aggregate sum of those capitalized Net Cash Flows
for those Leases set forth on the Rent Roll attached hereto as Schedule 3.01
that are Qualified Leases as of the Phase I Closing Date (which aggregated sum,
as of the date hereof based on the presumption of which Leases will be Qualified
Leases as of the Phase I Closing, is $11,588,297.00), plus or minus the amount
by which the annual Base Rent set forth in said Schedule 3.01 for those Leases
that are Qualified Leases as of the Phase I Closing Date increases or decreases
as verified by the applicable Tenant Estoppel, which increase or decrease shall
be capitalized using a rate of ten and 34/100ths percent (10.34%), and (z) for
Phase II, the aggregate sum of the Net Cash Flows for those Phase II Qualified
Leases as of the Phase II Closing Date that is capitalized using a rate of ten
and 34/100ths percent (10.34%); and plus or minus (b) the adjustments for the
applicable Phase that are provided in Section 14 hereof.
(iii) "Earn-Out Payment" shall mean the amount that is equal
to the Net Cash Flow from those Leases or New Leases that are Qualified Leases
on the date (other than any Closing Date) such Earn-Out Payment is due as
provided in this Section 13 capitalized using a rate of ten and 34/100ths
percent (10.34%), minus (1) the Carry, and minus (2) any unsatisfied right of
offset permitted Purchaser as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof that was not previously credited to Purchaser.
(iv) "Force Majeure" shall mean delays resulting from (a)
labor disputes, (b) material or labor shortages, (c) Casualty, (d) acts of God
or the public enemy, (e) governmental embargo restrictions, (f) actions or
inactions of any governmental authority (including, but not
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limited to, the failure to timely process or approve applications for the
issuance or transfer of Permits, licenses or approvals), (g) the adjustment of
insurance claims resulting from Casualty in excess of $1,000,000.00, (h) any
other cause beyond the reasonable control and reasonable anticipation of the
applicable Party, but excluding therefrom reasonable control resulting from
monetary deficiency.
(v) "Net Cash Flow" shall mean, in respect to the applicable
Qualified Leases, an amount equal to the aggregate amount of the so-called "base
rent" (but not operating expenses, tax reimbursements, escalations based on a
consumer price index, or other similar Rent adjustments) payable for the full
calendar year on and after the date the subject Qualified Lease became a
Qualified Lease (without reduction for "free" Rent or Rent abatements), less any
non-reimbursable operating expenses and taxes for such calendar year. Purchaser
acknowledges that for those Leases set forth on Schedule 7.02(a) attached
hereto, there are no non-reimbursable operating expenses or taxes that shall be
a deduction in the determination of Net Cash Flow.
(vi) "New Lease" shall mean any lease (other than the Leases)
that lets or demises space in the Project and that is entered into by (a) the
Seller subsequent to the date hereof, but prior to the Phase I Closing Date, or
(b) by Purchaser or its successor(s) subsequent to the Phase I Closing Date, but
prior to the expiration of the Earn-Out Period.
(vii) "New Tenant" shall mean the tenant or lessee under a New
Lease.
(viii) "Other Center" or "Other Centers" shall mean (a)
Arrowhead Crossing, located in Phoenix, Arizona, of which Opus Southwest
Corporation is the Other Seller; (b) Highland Grove, located in Highland,
Indiana, of which Opus Corporation is the Other Seller; (c) Maple Grove
Crossing, located in Minneapolis, Minnesota, of which Opus Corporation is the
Other Seller; and (d) Tanasbourne Town Center (Phase I), located in Hillsboro,
Oregon, of which Bold, L.L.C. is the Other Seller.
(ix) "Other Sale Agreement" or "Other Sale Agreements" shall
mean, in respect to the Other Centers, those other four Agreements of Purchase
and Sale entered into, effective as of the date hereof, by and between Purchaser
hereunder, as the purchaser thereunder, and, in respect to each Other Sale
Agreement, one of the Other Sellers, as the seller thereunder.
(x) "Other Seller" or "Other Sellers" shall mean any one or
more of the following: Opus North Corporation, an Illinois corporation; Opus
Southwest Corporation, a Minnesota corporation; Opus Corporation, a Minnesota
corporation; and Bold, L.L.C., a Delaware limited liability company.
(xi) "Qualified Lease" shall mean, on the applicable Closing
Date or on the dates during or after the Earn-Out Period for Phase I on which an
Earn-Out Payment is required to be paid hereunder, any Lease or New Lease that,
pursuant to the terms thereof:
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(a) has been fully executed by either Seller
or Purchaser (or its successor), as lessor, and by the Tenant
or New Tenant, as lessee;
(b) the Tenant or New Tenant (1) has taken
possession of the premises that is the subject of the Lease or
New Lease; (2) has commenced paying Rent thereunder, provided,
however, if Seller pays to Purchaser the amount of (y) any
free Rent afforded such Tenant or New Tenant, or (z) the
amount of Rent that would have been payable by such Tenant or
New Tenant, but for a fitting-up or fixturing period afforded
to such Tenant or New Tenant, then the provisions of this
clause (2) shall not apply (provided that in the instance of
clauses (y) and (z), Seller shall not be permitted to pay such
Rent for a period greater than three (3) months); (3) has not
terminated its Lease or New Lease or been terminated by the
landlord thereof as a result of a default thereunder by such
Tenant and New Tenant; (4) in the instance of the applicable
Closing Date, if it occurs (i) on or before the fifteenth
(15th) of a month, the Rent payment obligations thereunder are
not delinquent for a period longer than the month preceding
the month in which the applicable Closing Date occurred, or
(ii) after the fifteenth (15th) of a month, the Rent payment
obligations thereunder are not delinquent for a period longer
than the month in which the applicable Closing Date occurred;
and (5) in the instance of an Earn-Out Payment for the
Earn-Out Period, the Rent payment obligations thereunder are
not delinquent for a period longer than the month in which the
Earn-Out Payment is due (in respect to clauses (4) and/or (5),
for any Rent that is past due longer than the period set forth
therein, "Monetary Default");
(c) the Tenant or New Tenant, as of the date
an Earn-Out Payment is required to be paid hereunder in
respect thereto, is not in voluntary or involuntary
proceedings filed by or against it under Section 365 of the
U.S. Bankruptcy Code ("Bankruptcy Proceeding"); and
(d) the Earn-Out Conditions (as hereinafter
defined) therefor have been satisfied.
(xii) "Vacant Space" shall mean space in the Project that is
rentable for commercial purposes and that is not the subject of a Lease, New
Lease or any other occupancy right as of the Phase I Closing Date. If a Lease,
New Lease or any other occupancy right that is fully executed prior to the
expiration of the First Segment (as hereinafter defined) is terminated prior to
the expiration of the First Segment (provided Purchaser consents, in its sole
discretion, to such termination), no Closing Payment or Earn-Out Payment has
been paid in respect to such terminated Lease, New Lease or any other occupancy
right, and the subject space is not the subject of a different Lease, New Lease
or any other occupancy right at the expiration of the First Segment, then such
space shall also be deemed to be "Vacant Space" at the expiration of the First
Segment.
13.02 CLOSING DATE PURCHASE PRICE COMPUTATION. On the applicable Closing Date,
as part of the Purchase Price, Purchaser shall pay to Seller the applicable
Closing Payment computed in accordance with the provisions of Paragraph
13.01(ii) hereof.
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13.03 LEASE ASSIGNMENT RESERVATION. Notwithstanding any provisions to the
contrary contained in this Agreement, Seller shall be entitled to reserve from
the Lease Assignment ("Assignment Reservation") all of the remedies (but
excluding any eviction actions or summary depossess actions) of the landlord
under the subject Leases or New Leases (that are executed by Seller) that
pertain to (i) an event(s) that occurred prior to the applicable Closing Date,
but the obligation of indemnity by or performance of the subject Tenant or New
Tenant in respect to such event does not arise until on or subsequent to such
Closing Date; (ii) the recovery of Rent that is either due and payable prior to
the applicable Closing Date or due prior to the applicable Closing Date, but not
payable until thereafter, including Unknown Rents (as hereinafter defined); and
(iii) the recovery of any base rent portion of Rent that is due under Leases or
New Leases prior to the date ("Reserved Base Rent Date") that is the first to
occur of (y) the date on which the Earn-Out Payment in respect thereto is paid
(if any is required as hereafter provided), and (z) the date ("Lease Reservation
Date") that is five (5) months subsequent to the date (subject to Force Majeure)
that is set forth in the subject Lease or New Lease for the commencement of the
term thereof. Because Purchaser is to be the payee of Rent under Leases and New
Leases due on and after the Closing Date, the Lease Assignment shall not
specifically reserve the Assignment Reservation provisions provided in clause
(iii). However, provided Purchaser is not required to make any out-of-pocket
expenditures to third parties and Purchaser applies all Rents received after the
applicable Closing first to Rent then due under the applicable Leases and New
Leases as provided in Paragraph 14.02 hereof, Purchaser agrees to fully
cooperate with Seller in prosecuting against the applicable Tenant or New
Tenants the rights reserved in the Assignment Reservation, provided, further,
however, that prior to the commencement of any action or proceeding against such
Tenant or New Tenant, Seller notifies Purchaser of its intent to commence any
such action or proceeding and affords Purchaser a reasonable period of time to
resolve the matter with such Tenant or New Tenant before Seller commences any
such action or proceeding. .
13.04 NEW LEASES. Except for New Leases presented to Purchaser by Seller as
hereafter provided, Purchaser and its successors, during the Earn-Out Period,
shall not enter into any lease, tenancy, occupancy agreement, rental agreement,
option, license or concession for space in the Project (collectively, "Rental
Undertaking"), without first obtaining Seller's prior written consent, which
consent shall not be unreasonably withheld or delayed. If Seller consents as
aforesaid to a Rental Undertaking, such approved Rental Undertaking shall be
deemed a New Lease. During the period commencing on the date hereof and ending
on the expiration of the Earn-Out Period, Seller shall have the exclusive right
to negotiate prospective New Leases, except in the instance of Rental
Undertakings to which Seller has consented as aforesaid. Purchaser agrees to
bind its successors, assigns and their successors and assigns to the provisions
of this Paragraph 13.04.
Seller shall keep Purchaser reasonably advised of the terms,
provisions and conditions of such prospective New Leases as well as the identity
of and the available financial information pertaining to the lessee ("Prospect")
of a proposed New Lease. Purchaser agrees to
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reasonably cooperate with and advise Seller whether the credit worthiness of the
Prospect is acceptable to Purchaser and of those terms, provisions and
conditions proposed for prospective New Leases that Purchaser approves or
disapproves. Purchaser agrees not to unreasonably withhold or delay its consent
and approval of the credit worthiness of the Prospect or of such terms,
provisions and conditions, provided the same are reasonably consistent with the
Leases and New Leases (or does not violate any provision thereof) in respect to
(i) rental rates and proposed Tenant Inducements for comparable space within the
Project for Prospects of comparable net worth, (ii) duration of lease term, and
(iii) exclusive uses proposed for the Prospect.
Under the provisions of a New Lease, (i) for the period prior
to the applicable Closing Date, Seller shall be the landlord thereof, and (ii)
for the Earn-Out Period in respect to Phase I, Purchaser shall be the landlord
thereof and Seller shall be a party thereto, as contractor, for the limited
purpose of performing the New Lease Obligations (as hereinafter defined).
When and as a final draft of a New Lease is prepared, Seller
shall deliver a true and complete copy thereof to Purchaser along with all
financial information pertaining to the Prospect that is in Seller's possession
or under its control that was not theretofore delivered to Purchaser. Purchaser
shall advise Seller, in writing, within ten (10) business days after Purchaser's
receipt of the draft New Lease, whether Purchaser approves or disapproves the
same. If Purchaser notifies Seller as aforesaid of Purchaser's disapproval of a
draft New Lease ("Disapproved Lease"), such notice shall set forth, in
reasonable particularity, the reasons for Purchaser's disapproval. If Purchaser
fails to so notify Seller of whether the draft New Lease is approved or
disapproved as aforesaid, it shall act as notice to Seller that Purchaser has
approved the same. When a prospective New Lease has been approved or is deemed
to have been approved, (i) in the instance of prospective New Leases to be
executed prior to the applicable Closing Date, Seller shall execute the same as
Landlord thereunder, and (ii) in the instance of prospective New Leases to be
executed during the Earn-Out Period for Phase I, Seller shall promptly
thereafter deliver execution originals of the same to Purchaser that have been
executed by the subject Prospect, as the New Tenant, and by the Seller in
respect to the New Lease Obligations. Within five (5) business days following
Purchaser's receipt of execution originals as aforesaid in clause (ii),
Purchaser shall execute and return the same to Seller. If Purchaser fails to
return, when required, said originals executed by Purchaser as aforesaid, such
New Lease ("Unsigned Lease") shall automatically be deemed a New Lease that is
fully executed during the Earn-Out Segment (as hereinafter defined) in which
Seller delivered it to Purchaser for execution, and shall be deemed a Qualified
Lease and the Earn-Out Conditions in respect thereto satisfied on the sixth
(6th) business day after it was delivered to Purchaser, notwithstanding the
provisions of Paragraph 13.01(xi) hereof. As a result, subject to the provisions
of the next sentence, Purchaser shall pay to Seller, on the twenty-fifth (25th)
day of the month first occurring thereafter, the Earn-Out Payment computed in
respect to such Unsigned Lease. However, in the event, after the date an
Unsigned Lease became a Qualified Lease as aforesaid and prior to the date the
Prospect thereof withdraws its signature thereto, Purchaser executes and returns
to Seller such Unsigned Lease, Seller agrees to be bound by and to perform the
New Lease Obligations for such Unsigned Lease.
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In the event, at any time prior to the date that is three (3)
months subsequent to the expiration date of the Earn-Out Segment in which there
was a Disapproved Lease, Purchaser (or its successors or assigns) enters into
any Rental Undertaking with the Prospect of such Disapproved Lease, such Rental
Undertaking shall automatically, notwithstanding the provisions of Paragraph
13.01(xi) hereof, be deemed to be a Qualified Lease and Purchaser shall pay to
Seller, on the twenty-fifth (25th) day of the month first occurring after such
Rental Undertaking was signed by Purchaser, an amount equal to (a) the Earn-Out
Payment computed in respect to the provisions of such Rental Undertaking as a
Qualified Lease, minus (b) the Footage Payment, if any, that was previously paid
by Purchaser in respect to the portion of the Project that is the subject of
such Rental Undertaking, minus (c) the costs incurred by Purchaser to unrelated
third parties for the construction and completion of tenant improvements and
broker's commissions for the subject Rental Undertaking, but in an amount, in
either instance, not greater than the cost of those tenant improvements and
Commissions provided in the Disapproved Lease, and minus (d) any unsatisfied
right of offset afforded Purchaser pursuant to Paragraphs 5.04, 9.03, 14.06,
14.07 and 16.01 hereof. The obligations of Purchaser under the provisions of
this grammatical paragraph shall survive the applicable Closing and the later
expiration of the Earn-Out Period.
13.05 EARN-OUT PERIOD. The hereafter provided period of time subsequent to the
Phase I Closing Date shall be divided into two segments (respectively, "First
Segment," and "Second Segment," and generally, "Earn-Out Segment,"). Each
Earn-Out Segment during which Seller has elected, as hereafter provided, to
extend the term of this Agreement for Phase I shall be for a period of five (5)
months or for such longer period as provided in Section 13.06 hereof. The First
Segment for Phase I shall commence on the day after the Phase I Closing Date,
and the Second Segment for Phase I (if Seller elected or is deemed to have
elected to extend the Earn-Out Period) shall commence on the day after the
expiration of the First Segment for Phase I. Provided the Phase I Closing
occurs, Seller hereby elects to extend the term of this Agreement for the Phase
I First Segment. Seller may elect, in its sole discretion, to extend the term of
this Agreement for the Second Segment for Phase I by delivering to Purchaser
Seller's written notice of such election ("Earn-Out Extension Notice") not less
than thirty (30) days prior to the expiration of the Phase I First Segment. If
Seller fails to deliver, as aforesaid, its Earn-Out Extension Notice, it shall
act as notice to Purchaser that Seller has elected not to extend the term of
this Agreement for the Phase I Second Segment, but such election or deemed
election of Seller in respect to Phase I shall not affect the obligations of the
Parties in respect to the Phase II Closing. However, notwithstanding the
preceding sentence, if one or more of the Other Sellers elect(s), under the
provisions of its respective Other Sale Agreement, to extend for the Second
Segment, Seller, regardless of its election hereunder, shall be deemed to have
elected to so extend this Agreement for the Second Segment for Phase I, except
that an election by the Other Seller under the terms of the Other Sale Agreement
for Tanasbourne Town Center (Phase I) to extend for the second segment
thereunder shall not be deemed an election of Seller hereunder to extend the
Earn-Out Period for the Second Segment of Phase I, if the closing for such Other
Center is after the Phase I Closing. The aggregate of the Earn-Out Segments for
which Seller has elected or is deemed to have elected to extend the term hereof
for Phase I shall be referred to as the "Earn-Out Period." The Parties
acknowledge that, notwithstanding any
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provision or interpretation of any provision contained in this Agreement, there
will be no Earn-Out Period or Earn-Out Payments in respect thereto for Phase II.
Therefore, any reference to Earn-Out Period shall only mean the Earn-Out Period
applicable to Phase I.
13.06 CASUALTY DURING EARN-OUT PERIOD. If, during the Earn-Out Period for Phase
I, there is a Casualty to a Vacant Space in Phase I, the Earn-Out Period and the
applicable Earn-Out Segment shall be tolled as to the damaged Vacant Space until
such time as Purchaser causes such damaged Vacant Space to be restored to a
habitable condition, exclusive of tenant's improvements. Except as hereafter
provided, if, during the Earn-Out Period for Phase I, there is a Casualty to
twenty five percent (25%) of the Square Footage of the entire Project (as
opposed to a particular Phase) Improvements (exclusive of the Vacant Space), the
Earn-Out Period and the applicable Earn-Out Segment shall be tolled until such
time as such damaged Improvements are restored to a condition so that the
Tenants or New Tenants thereof are open and operating their respective
businesses therein, except in respect to those Tenants or New Tenants whose
Leases or New Leases were terminated as a result of the subject Casualty.
Purchaser agrees to promptly notify Seller, in writing, of the occurrence of
such a Casualty. Notwithstanding the foregoing, in the event of such a Casualty,
Seller shall deliver to Purchaser, within ten (10) days following the date of
Seller's receipt of Purchaser's written notification, Seller's written notice
("Casualty Notice") of its good faith determination that such Casualty is the
proper basis for the tolling of the applicable Earn-Out Segment. If Seller fails
to deliver a Casualty Notice as aforesaid, it shall act as notice to Purchaser
that Seller is not claiming any tolling of the applicable Earn-Out Segment in
respect to such Casualty. Regardless of a Casualty Notice, there will be no
tolling of the Earn-Out Period if Purchaser restores the applicable portion of
the Improvements in the Phase(s) that has been closed within thirty (30) days
following the date of such Casualty. However, if such restoration is not
completed within said thirty (30) days, the Earn-Out Period shall be tolled
commencing on the date of the Casualty and ending on the date provided in the
first two sentences of this Paragraph 13.06. During the Earn-Out Period,
following a Casualty, Purchaser agrees to diligently (subject to Force Majeure)
undertake the restoration of the applicable portion of the Improvements in the
Phase(s) that has then closed.
13.07 EARN-OUT PAYMENTS. In respect to Leases or New Leases that are fully
executed prior to the expiration of the Earn-Out Period, on the twenty-fifth
(25th) day of each calendar month after the Phase I Closing Date, provided the
subject Lease or New Lease is a Qualified Lease prior to the Lease Reservation
Date in respect to Phase I on and after the Phase I Closing Date, Purchaser
shall pay to Seller the Earn-Out Payment computed in respect to those Leases and
New Leases that became, for the first time, Qualified Leases during the
preceding month and for which no Earn-Out Payment had been previously paid to
Seller. In the event a New Lease is executed during the Phase I First or Second
Segment, but it does not become a Qualified Lease until after the expiration of
the Earn-Out Period, but prior to the Lease Reservation Date, Purchaser, subject
to the satisfaction of the Earn-Out Conditions, shall pay to Seller at the time
aforesaid, an amount equal to the Earn-Out Payment computed in respect to such
subsequent Qualified Lease. Any Earn-Out Payment shall be subject to any
unsatisfied right of offset as provided in Paragraphs 5.04, 9.03, 14.06, 14.07
and 16.01 hereof.
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Notwithstanding the foregoing, the Earn-Out Payment or Closing
Payment in respect to a particular Qualified Lease (excluding those that are
Qualified Leases in respect to an Unsigned Lease or a Rental Undertaking with
the Prospect of a Disapproved Lease as provided in each instance in Paragraph
13.04 hereof) shall not be due and payable by Purchaser to Seller, unless and
until, Seller, prior to the Lease Reservation Date, has delivered or caused to
be delivered to Purchaser, in respect to the subject Qualified Lease, (i) a
fully executed original thereof; (ii) a certificate of occupancy from the
applicable governmental authority authorizing the uninterrupted occupancy by the
subject Tenant or New Tenant of the subject premises; (iii) the applicable
Tenant Estoppel containing no material exceptions or Seller's Estoppel, if in
accordance with the provisions of Paragraph 7.15 hereof; (iv) Schedule
10.01(xvii) from Seller in respect to the subject Lease or New Lease, updated to
the date the Earn-Out Payment is due, setting forth any unsatisfied Tenant
Inducement in respect thereto; (v) evidence, in form and content reasonably
satisfactory to Purchaser, that the portion of Tenant Inducements payable to the
subject Tenant or New Tenant has been paid by Seller; (vi) an original of the
insurance certificates required from the subject New Tenant under the Qualified
Lease; (vii) the date down and increased coverage endorsement for the Title
Policy required pursuant to the provisions of Paragraph 6.04 hereof, provided
Purchaser pays fifty percent (50%) of the Shared Closing Costs in respect
thereto; and (viii) copies of the "as-built" plans and specifications for the
tenant improvements for the subject Qualified Lease (collectively, in respect to
clauses (i) through (viii) above, "Earn-Out Conditions"). The Earn-Out Payment
obligations of this Paragraph 13.07 shall survive each Closing Date and the
later termination of this Agreement. If the Earn-Out Conditions are not
satisfied for the subject Lease or New Lease on or prior to the Lease
Reservation Date therefor, then Purchaser shall have no obligation to make any
Earn-Out Payment in respect thereto.
13.08 FOOTAGE PAYMENT. In the event Seller elects not to extend the Earn-Out
Period for the Second Segment, Purchaser shall pay to Seller, when hereafter
provided, an amount ("Footage Payment") equal to the Square Footage (as
hereinafter defined) of the Vacant Space in Phase I existing at the expiration
of the First Segment, multiplied by (i) $55.00 for that portion of the Vacant
Space that is not greater than one hundred feet in depth as measured from the
front exterior surface to the rear exterior surface, and (ii) $45.00 for that
portion of the Vacant Space that is greater than one hundred feet in depth
measured as aforesaid. If Seller elects or is deemed to have elected to extend
the term of the Earn-Out Period for the Second Segment, there will be no Footage
Payment. "Square Footage" shall mean the aggregate number of square feet of the
Vacant Space measured from the front exterior surface to the rear exterior
surface and from the middle of demising walls of such Vacant Space. Within
forty-five (45) days following the date Seller has elected or is deemed to have
elected not to extend the term of the Earn-Out Period for the Second Segment,
Seller shall deliver to Purchaser Seller's computation of the amount of the
Footage Payment ("Footage Computation") which will set forth the identity of the
Vacant Space, the depth of the Vacant Space, and the amount of the Square
Footage contained therein. Unless Purchaser notifies Seller within ten (10)
business days following Purchaser's receipt of the Computation Notice that
Purchaser disagrees with the provisions thereof, Purchaser shall pay to Seller,
within thirty (30) days following Purchaser's receipt of the Computation Notice
the amount of the Footage Payment provided therein. If Purchaser does object to
the Computation
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Notice as aforesaid, Purchaser and Seller shall promptly confer, in good faith,
to resolve the disagreement. When the disagreement is resolved, within ten (10)
business days thereafter, Purchaser shall pay to Seller the resolved Footage
Payment. Any Footage Payment shall be subject to any unsatisfied right of offset
as provided in Paragraphs 5.04, 9.03, 14.06, 14.07 and 16.01 hereof.
13.09 INTENTIONALLY DELETED.
13.10 SELLER'S NEW LEASE OBLIGATIONS. Seller, at its sole cost and expense,
shall (i) apply for and obtain all permits and licenses necessary to construct
all tenant improvements required under New Leases; (ii) subject to Force
Majeure, construct and complete, when required under the provisions of New
Leases, all such tenant improvements; (iii) pay, when due, all Commissions in
respect to New Leases; (iv) provide and undertake the required New Lease
construction and warranty work ("Tenant Warranty"); and (v) provide the
builder's "all risk" and general liability insurance coverage required by the
subject New Lease in respect to such construction (collectively in respect to
clauses (i) through (v), "New Lease Obligations").
13.11 PUNCHLIST. The portion of the Purchase Price payable at each Closing as
computed pursuant to the provisions of Paragraph 13.02 hereof and the amount of
each Earn-Out Payment due hereunder shall be reduced by an amount which shall be
held by Purchaser and disbursed as hereafter provided, which amount shall equal
one hundred and twenty five percent (125%) of the reasonably estimated cost of
completing all of the tenant improvements work for Leases and New Leases that
are Qualified Leases in the applicable Phase as of the applicable Closing Date
and/or Phase I Earn-Out Payment date. The amount of the Footage Payment payable
hereunder shall be reduced by an amount which shall be held by Purchaser and
disbursed as hereafter provided, which amount shall equal one hundred twenty
five percent (125%) of the reasonably estimated cost of constructing and
completing substantially to those standards for the shell and core portions of
the Improvements for Phase I that are set forth on the Shell and Core List and
Standard attached hereto as Schedule 13.11 (collectively, in respect to the
first and second sentences of this Paragraph 13.11, "Punchlist Holdback"). The
Punchlist Holdback shall be compiled in a line item format in respect to major
segments for completing such incomplete items and shall set forth the reasonable
cost of completing each such line item. If Seller and Purchaser, within fifteen
(15) days prior to the date the foregoing payments hereunder are due, are unable
to agree on the scope or amount of each applicable Punchlist Holdback line item,
Seller and Purchaser shall appoint a third party contractor to make such
determination, and the scope and amount so determined by the third party
contractor shall be binding upon the Parties. When the scope and amount of the
applicable Punchlist Holdback is determined as aforesaid, it shall be attached
to this Agreement, respectively, as Schedules 13.11(a)(1), 13.11(a)(2) etc.
Thereafter, subject to Force Majeure, Seller, at its sole cost and expense
(regardless of the amount of the Punchlist Holdback), agrees to diligently
prosecute to completion ("Punchlist Work") all of the items on each 13.11(a)(3)
attached hereto. The obligation of Seller to complete the Punchlist Work is
absolute and unconditional. Monthly, after the Punchlist Holdback is established
as aforesaid, when Punchlist Work pertaining to various line items on the
applicable Punchlist Holdback is complete, Purchaser shall pay to Seller one
hundred percent (100%) of that portion of the applicable Punchlist Holdback
applicable to such completed Punchlist Work
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(thereby retaining twenty-five percent (25%) thereof), provided Seller has
delivered to the Purchaser a Form G704 in the form attached to the Exhibit
Agreement as Schedule 13.11(b), executed by Seller (or its contractor) setting
forth that the subject line item of such Punchlist Work has been completed.
When all of the Punchlist Work in respect to the applicable
Punchlist Holdback has been completed in respect to the applicable Phase and the
Forms G704 therefor have been delivered to Purchaser, Purchaser shall pay to
Seller the remaining twenty-five percent (25%) of the subject Punchlist
Holdback, provided Seller has delivered to Purchaser the following documents:
(a) Evidence that all payment in the manner required by the
applicable contract, agreement or undertaking is paid in full in respect to the
subject Phase Punchlist Work;
(b) Lien waivers required by (and that are reasonably
satisfactory to) the Title Company from the Seller and its contractor and
subcontractors that are necessary to insure over Liens in respect to the subject
Punchlist Work; and
(c) In respect to the portion(s) of the subject Punchlist Work
that pertains to incomplete tenant improvements under a Lease or New Lease, an
acknowledgment from the subject Tenant or New Tenant, in form and substance
reasonably acceptable to Purchaser, setting forth the applicable Tenant's or New
Tenant's acceptance of completion of the subject tenant improvements.
14. CLOSING ADJUSTMENTS AND APPORTIONMENTS.
All of the items of income and expense mentioned in this
Section 14 shall be apportioned or adjusted between Seller and Purchaser as of
12:01 A.M., local time of the Project, as of the applicable Closing Date. Except
as provided in the instance of Unknown Rents as provided in Paragraph 14.03
hereof, all apportionments and adjustments shall be made as of the applicable
Closing Date. To the extent that the apportionments and adjustments, at the
applicable Closing, are based upon any errors or omissions in the calculation or
determination thereof, promptly after notice of such errors or omissions, the
Parties shall readjust or reapportion and make the payment required as a result
thereof.
14.01 RENTS. The fixed and minimum rents and all additional rents, escalation
charges, common area maintenance charges, imposition charges, heating and
cooling charges, insurance charges, charges for utilities, percentage rent, and
all other rents, charges and commissions (collectively, the "Rents") payable by
the Tenants under the Leases and New Leases that are Qualified Leases for the
applicable Phase as of the applicable Closing Date, to the extent collected by
Seller on or prior to such Closing Date and which represent payments of Rents
applicable to a period of time subsequent to such Closing Date. Notwithstanding
the foregoing, Seller shall be permitted the rights against Tenants and New
Tenants as provided in the Assignment Reservation set forth in Paragraph 13.03
hereof.
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14.02 ARREARS. Any of the Rents that are due and payable by the Tenants and New
Tenants of the applicable Phase on or prior to the applicable Closing Date, but
which have not been collected by the Seller on or prior to such Closing Date, or
payment of which has been deferred until after such Closing Date ("Arrears"), to
the extent applicable to any period of time on or prior to the Closing Date, and
which are paid after such Closing Date shall, subject to the terms below, be
paid to Seller and be the subject of the Assignment Reservation, and if the
Arrears are received by Purchaser, Purchaser shall pay the Arrears to Seller
after collection by Purchaser, provided, however, that if any Arrears exist on
such Closing Date, all Rents, received and collected by Purchaser after such
Closing Date shall be applied first to payment of all Rents due Purchaser and
second to all Arrears due Seller. Purchaser shall have no obligation to collect
any Arrears or to commence any action to enforce the obligation of Tenants to
pay the Arrears, but Purchaser agrees to cooperate with Seller in the collection
of such Arrears, but only as provided in Paragraph 13.03 hereof. In the event
Purchaser elects to commence any action or proceeding against any Tenant and as
a result thereof collects any Arrears which Purchaser is required to remit to
Seller, Purchaser shall be entitled to deduct and retain a portion of the amount
collected which is equal to the Pro Rata Share (as hereinafter defined) of the
Litigation Expenses incurred by Purchaser in connection with the collection of
the Arrears. Notwithstanding anything to the contrary, Seller, as a result of
the Assignment Reservation, shall have the right, after delivery of prior
written notice to Purchaser, to commence any action or proceeding, except a
summary depossess or any eviction actions, against any Tenant for Seller's
portion of any Arrears.
14.03 UNKNOWN RENTS. Any Rents which have accrued but are not due and payable on
the applicable Closing Date because the applicable Lease or New Lease year or
other fiscal period for the subject Phase for which such Rents are to be
computed has not yet expired (including by way of example only, escalation
charges and percentage rents) or if it has expired but cannot for any other
reason be calculated by the Parties on such Closing Date ("Unknown Rents"),
shall be apportioned promptly after (i) the expiration of the applicable Lease
or New Lease year or other fiscal period, and (ii) the receipt and collection of
the Unknown Rents. Purchaser shall make reasonable efforts to ascertain the
amount of the Unknown Rents (but, shall not be obligated to commence any action
or proceeding to collect Unknown Rents, except that Purchaser shall reasonably
cooperate with Seller in respect to the Assignment Reservation as provided in
Paragraph 13.03 hereof), and when the amounts of the Unknown Rents are
ascertained, received and collected by Purchaser, Purchaser shall promptly pay
to Seller a portion (the "Pro Rata Share") of the Unknown Rents determined by
multiplying the Unknown Rents collected by a fraction, the numerator of which is
the number of days in the applicable Lease or New Lease year or other fiscal
period up to but excluding the applicable Closing Date and the denominator of
which is the number of days in the applicable Lease or New Lease year or other
fiscal period, less any monies Seller has previously received on account of the
Unknown Rents and Seller's Pro Rata Share of the Litigation Expenses incurred by
Purchaser in the collection of the Unknown Rents. In the event it is determined
after the applicable Closing that the amount of the Unknown Rents received by
Seller exceeds the Seller's Pro Rata Share, Seller shall promptly pay such
excess to Purchaser upon demand. Notwithstanding anything to the contrary,
Seller shall have the right to commence any action or proceeding, except a
summary depossess or an eviction action, against any Tenant for Seller's portion
of any Unknown Rents.
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14.04 UTILITIES. To the extent not payable by Tenants or New Tenants, the actual
or estimated charges for utilities accrued and payable by Seller prior to the
applicable Closing Date, provided Purchaser is required by law or elects to
assume Seller's account. Deposits for utilities (the "Utility Deposits"), plus
any interest on the Utility Deposits to which Seller is or will be entitled,
held by the provider of the utilities and which are freely transferable to
Purchaser, shall, at the election of the Purchaser, be assigned by Seller to
Purchaser and Purchaser shall pay Seller the full amount thereof at the
applicable Closing, in addition to the applicable portion of the Purchase Price.
Seller shall retain the right to obtain a refund of any Utility Deposits which
are not required to be assigned to Purchaser and Purchaser will cooperate with
Seller in obtaining any refund. With respect to water, sewer, electric and gas
charges, Seller shall make reasonable efforts to obtain a reading of the meter
or other consumption measuring device as of the applicable Closing Date. If the
Seller is unable to obtain such a reading, Seller shall furnish a reading as of
a date not more than thirty (30) days prior to the applicable Closing Date and
the unknown charges shall be apportioned on the basis of an estimate computed by
utilizing such reading and the most recent ▇▇▇▇ from the utility provider,
computed on an equal per diem basis.
14.05 CONTRACTS. Prepaid charges, payments and accrued charges under the
Contracts set forth in Schedule 7.05(a) attached hereto, to the extent not paid
by Tenants or New Tenants. However, if paid by Tenants or New Tenants, Seller
shall credit Purchaser with the amount thereof received by Seller from such
Tenants or New Tenants, to the extent not applied to the payment obligations
under the Contracts.
14.06 TAXES. Seller shall cause all real estate taxes for 1995 and prior years
to have been paid as of the Phase I Closing Date, and all real estate taxes for
the years prior to the year in which the Phase II Closing occurs to have been
paid as of the Phase II Closing Date. The real estate taxes for calendar year in
which the applicable Closing Date occurs for the applicable Phase shall be
pro-rated as of such Closing Date. Seller's pro-rata share of such real estate
taxes shall be calculated based upon the number of days elapsing from January 1,
of the subject year to, but not including, the subject Closing Date in relation
to 365 days in such year. Purchaser shall be responsible for the remaining
portion of such real estate taxes, commencing with the applicable Closing Date
and continuing through December 31, of the subject year. Notwithstanding the
foregoing, at each Closing, to the extent there are Tenants or New Tenants that
pay their Real Estate Tax Rent (as hereinafter defined) on a lump sum basis,
Seller shall not be required to credit Purchaser with that portion of the
pro-rata share of the real estate taxes for the year in which the applicable
Closing occurs for the period from January 1 to the date of the applicable
Closing for which such lump sum paying Tenants and New Tenants are responsible
("Lump Sum Non-Credit"). However, if any such Tenant or New Tenant fails to pay
their respective lump sum portion of Real Estate Tax Rent when due that is
applicable to the period from January 1 to the applicable Closing Date,
Purchaser shall notify Seller of the same, in writing, and Seller shall pay such
unpaid amount within five (5) business days and such amount so paid by Seller
shall be deemed Arrears. In the event Seller fails to pay such amount, Purchaser
shall be permitted to offset any Closing Payment, Footage Payment, Earn-Out
Payment or other sum payable by Purchaser to Seller hereunder that is
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thereafter due. To the extent there are insufficient future payments due Seller
from Purchaser against which to make such offset, Purchaser shall have the
remedy against Seller as provided in Paragraph 18.05 hereof. In the event the
statement for the total real estate taxes for the year in which the subject
Closing occurs is not available as of such Closing Date, the Parties shall make
the pro-ration provided for herein on the basis of the estimated budget for 1996
prepared by Seller's Property Manager for the Project for purposes of collecting
Real Estate Tax Rent for Tenants or New Tenants occupying space in the Project,
and shall thereafter make such adjustments as may be necessary at such time as
the tax statement for real estate taxes for the year in which the applicable
Closing occurs becomes available. The Closing Payment for each Closing shall be
reduced by the amount of Seller's pro-rata share of the real estate taxes for
the year of the applicable Closing, exclusive of the Lump Sum Non-Credit,
provided, however, that Seller shall be entitled to a reduction in such pro-rata
share in an amount equal to any portion of such year's real estate taxes paid by
Seller on or before such Closing Date.
The portion of the Rent under Leases and New Leases that pertains to
the obligations of Tenants and New Tenants to pay their respective pro-rata
share of real estate taxes (or special assessments provided in Paragraph 14.07
hereof) shall be called "Real Estate Tax Rent." Certain Tenants and New Tenants
pay their Real Estate Tax Rent in a lump sum(s) and others pay their Real Estate
Tax Rent on a monthly basis. The portion of Real Estate Tax Rent that pertains
to the period prior to the applicable Closing Date and which was paid to Seller
by those Tenants and New Tenants who pay the same on a monthly or lump sum basis
shall be retained by Seller. Any Real Estate Tax Rent retained by Seller prior
to the applicable Closing Date that pertains to the period on or subsequent to
such Closing Date shall be credited to Purchaser at such Closing. Any Real
Estate Tax Rent received by Purchaser after the applicable Closing that pertains
to the period prior to such Closing Date (except that which is a Lump Sum
Non-Credit) shall be paid to Seller by Purchaser. The Real Estate Tax Rent
retained by Seller shall be subject to adjustment (increases or decreases) at
such time as Purchaser reconciles the estimated payment of Real Estate Tax Rent
with the amount of the actual real estate taxes paid for 1996.
14.07 ASSESSMENT INSTALLMENTS. If, as of the applicable Closing Date, the
subject Phase is encumbered or otherwise affected by any assessment (whether or
not a lien) which becomes payable in installments, for the installment that is
due in payable in the year in which the applicable Closing occurs, Seller shall
credit Purchaser with the pro-rata portion of such installment from January 1 of
the year of such Closing to the applicable Closing Date, except for an amount
that would be equal to the Lump Sum Non-Credit. Such pro-ration shall be made on
the basis that the number of days from January 1 of the year of the applicable
Closing to, but excluding, the applicable Closing Date bears to three hundred
and sixty five (365) days. The portion of Real Estate Tax Rent applicable to the
installment of assessment payable in the year of the applicable Closing that
pertains to the period prior to the applicable Closing and which was paid to
Seller by Tenants or New Tenants shall be retained by Seller. Any Real Estate
Tax Rent applicable to such installment or assessment that was received by
Seller prior to the applicable Closing Date that pertains to the period on or
subsequent to such
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Closing Date shall be credited to Purchaser at such Closing. Any Real Estate Tax
applicable to such installment of assessment received by Purchaser after the
applicable Closing Date that pertains to the period prior to such Closing Date
(except that which is a Lump Sum Non-Credit) shall be paid by Purchaser to
Seller. If any Tenant or New Tenant who pays their respective Real Estate Tax
Rent on a lump sum basis and for whom a Lump Sum Non-Credit was provided, Seller
shall remain responsible for Lump Sum Non-Credit as provided in Paragraph 14.06.
14.08 PERMITS. The (i) Vault taxes and rents, if any, due and payable in the
calendar year in which the applicable Closing Date occurs (to the extent not the
obligation of the applicable Tenants or New Tenants to pay), (ii) Permit fees to
the extent transferable, and (iii) government inspection fees shall be
apportioned as of the applicable Closing Date.
14.09 SECURITY DEPOSITS/TENANT INDUCEMENTS. Purchaser shall receive a credit
against the portion of the Purchase Price payable on the applicable Closing Date
in an amount equal to the sum of (i) the Security Deposits, if any, which Seller
is holding pursuant to the Leases and New Leases in the subject Phase and as set
forth in Schedule 7.02(a) attached hereto, plus (ii) all costs, expenses and
losses (including without limitation, reductions in Rent) which will be incurred
by Purchaser after the applicable Closing as a result of all Tenant Inducements
given on or before the applicable Closing Date which are not paid in full as of
such Closing in respect to Qualified Leases in the subject Phase as of the
applicable Closing Date.
14.10 CUSTOMARY ITEMS. Any other items of income and expense not specifically
mentioned in this Section 14 which are customarily apportioned in real property
transactions of the character contemplated by this Agreement.
14.11 APPORTIONMENT BETWEEN PHASES. For the purpose of determining the
pro-rations provided in this Section 14, on each Phase Closing Date, Purchaser
and Seller shall attempt, in good faith, to the extent reasonably practicable,
to apportion among the Phases in the proportion attributable to such Phases of
the pro-rations provided in this Section 14.
15. CLOSING.
15.01 CLOSING AND CLOSING DATE. The closing of Phase I of this transaction
("Phase I Closing") shall be held at the office of Opus Properties on June 27,
1996 (the "Phase I Closing Date").
The closing of Phase II of this transaction ("Phase II Closing") shall
also be held at the office of Opus Properties. Provided the UA Lease and
Childcare Lease are each Qualified Leases (as those terms are hereinafter
defined) on or before December 15, 1997 ("Qualification Date"), subject to the
Extension Election (as hereinafter defined), the Phase II Closing shall occur on
the date ("Phase II Closing Date") that is fifteen (15) days subsequent to the
date the UA Lease and Childcare Lease both become Qualified Leases. Seller shall
deliver written notice to Purchaser not less than fifteen (15) days nor more
than thirty (30) days prior to the date on which Seller,
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in good faith, reasonably believes both the UA Lease and Childcare Lease will
become Qualified Leases. However, if Seller reasonably believes the UA Lease or
the Childcare Lease will not become a Qualified Lease before January 1, 1998,
Seller, on or before December 1, 1997, shall advise Purchaser of the same, in
writing ("Qualification Notice"). The Qualification Notice shall set forth with
reasonable particularity the reasons why Seller believes the UA Lease or
Childcare Lease, as the case may be, will not become a Qualified Lease by the
December 15, 1997. Within ten (10) business days subsequent to the date
Purchaser receives the Qualification Notice, Purchaser shall advise Seller, in
writing, of whether Purchaser elects (i) to terminate those aspects of this
Agreement pertaining to Phase II, including, but not limited to Purchaser's
right to buy and Seller's obligation to sell Phase II, or (ii) to extend, in
Purchaser's sole discretion, the Qualification Date to June 15, 1998 ("Extension
Election"). If Purchaser fails to notify Seller, in writing, of whether
Purchaser chose to terminate as aforesaid or chose the Extension Election, it
shall act as notice to Seller that Purchaser chose the Extension Election.
However, if the UA Lease and Childcare Lease are not both Qualified Leases on or
before the Qualification Date (December 15, 1997 or June 15, 1998, as applicable
as a result of the Extension Election), the Agreement shall automatically
terminate in respect to Phase II as aforesaid, Purchaser and Seller shall each
pay 50% of the Shared Closing Costs applicable to Phase II, and this Agreement
in respect to Phase II shall be of no further force and effect. As of the date
hereof, Phase II is the subject of two Leases. One is between Seller and United
Artists ("UA Lease"), and the other is between Seller and Childcare ("Childcare
Lease"). For the purposes of this Agreement the UA Lease or the Childcare Lease
shall mean the leases set forth, respectively, in the preceding sentence or any
replacement New Lease therefor that has been approved by Purchaser in accordance
with the provisions of Paragraph 13.04 hereof.
Each of the Phase Closing Dates are subject to extensions pursuant to
Paragraphs 5.04, 6.03, 7.20, 12.03 and 17.02 hereof.
16. POSSESSION.
16.01 POSSESSION AND POST CLOSING WORK. Purchaser shall be entitled to
possession of the applicable Phase on the subject Closing Date, subject only to
such Phase's Leases, New Leases, Assignment Reservation and the Permitted
Exceptions. Notwithstanding the foregoing, subsequent to the applicable Closing
Date, Seller and Seller's agents, contractors and subcontractors shall have
access to such portions of the Project necessary and convenient to commence
and/or complete (i) the Punchlist Work; (ii) Unacceptable Conditions; (iii)
Seller's New Lease Obligations; (iv) incomplete tenant improvement work under
Leases; (v) Warranty Work; and (vi) Tenant Inducements (collectively in respect
to clauses (i) through (vi), "Post Closing Work"). All Post Closing Work shall
be done (a) at Seller's sole cost and expense, (b) in a fashion to reasonably
minimize, taking into account the scope and nature of the Post Closing Work, the
disruption to Tenants and New Tenants and to the operation and management of the
subject Phase(s) by Purchaser and Purchaser's agents, (c) in compliance with
Environmental Laws, and (d) in any event, subject to Force Majeure, with
diligence. The obligation of Seller to complete the Post Closing Work and to pay
Commissions and pay all financial obligations of
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Seller hereunder is absolute and unconditional, and Seller agrees to indemnify,
defend and hold Purchaser and its successors and assigns and the Project
harmless (including Litigation Expenses) from and against any and all (except as
provided in Paragraph 23 hereof) loss, damage, claim, demand, liability, Lien,
action, cause of action, judgment or decree as a result of (A) damage or
destruction to property, including title to the Project, (B) personal injury, or
(C) loss of Rent resulting from the performance or non-performance of the Post
Closing Work by Seller (except that which is caused, in whole or in part, by the
negligence, willful misconduct or breach of contract by Purchaser or its
successors and assigns or their respective agents, employees, contractors or
subcontractors), and resulting from Seller's failure to pay Commissions or to
pay all financial obligations of Seller hereunder. In the event Seller fails to
perform the Post Closing Work, pay Commissions or pay all financial obligations
of Seller hereunder, Purchaser may deduct from the next succeeding Earn-Out
Payment payable hereunder after the event of Seller's failure as aforesaid, the
cost and expense incurred by Purchaser in completing such incomplete Post
Closing Work, paying such unpaid Commissions or paying all financial obligations
of Seller hereunder. During the performance of any Post Closing Work, Seller
shall maintain commercial public liability insurance in an amount and issued by
carriers that are reasonably satisfactory to Purchaser naming Purchaser and
those other persons or entities reasonably designated by Purchaser as additional
insureds thereunder.
17. RISK OF LOSS.
17.01 RISK. Except as provided in Paragraphs 17.02 and 17.03, the risk of loss
or damage (the "Loss") to the subject Phase by (i) condemnation, eminent domain
or similar actions or proceedings or threat thereof (collectively, "Taking"), or
(ii) fire or other casualty (collectively, a "Casualty") shall be borne by
Seller through the date and time that the applicable portion of the Purchase
Price payable on the applicable Closing Date is paid to Seller and thereafter
shall be borne by Purchaser.
17.02 DAMAGE AND DESTRUCTION. In the event all or any portion of Phase I is
materially damaged by any cause whatsoever prior to the Phase I Closing Date,
Seller shall so advise Purchaser and Purchaser shall have the right, at its sole
option, to either: (a) proceed with the Phase I Closing with no reduction in the
Purchase Price, provided, however, Purchaser shall receive from Seller on the
Phase I Closing Date (i) all proceeds of any casualty insurance maintained by
Seller and payable with respect to such damage, and (ii) an amount equal to the
deductible on such casualty insurance which, in the instance of clauses (i) and
(ii), are applicable to Phase I; or (b) terminate this Agreement by giving
written notice of termination to Seller within ten (10) business days of the
date Purchaser is advised by Seller of such damage, in which event the Deposit
shall be refunded to Purchaser, Seller and Purchaser shall each pay 50% of the
Shared Closing Costs as of the date this Agreement is terminated by Purchaser,
and Seller and Purchaser shall have no further rights or obligations under this
Agreement, except those rights and obligations specifically set forth herein as
surviving such termination. The Seller represents and warrants to Purchaser that
the Improvements (except any Tenant's or New Tenant's trade fixtures therein)
for the entire Project are insured to the full replacement value thereof with a
deductible of not more than $5,000.00, which insurance Seller agrees to keep in
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full force and effect until the applicable Closing in respect to that Phase(s)
that has not yet closed.
In the event all or any portion of Phase II is materially damaged by
any cause whatsoever prior to the Phase II Closing Date, Seller shall so advise
Purchaser and Purchaser shall have the right, at its sole option, to either (1)
proceed with the Phase II Closing with no reduction in the Purchaser Price,
provided, however, Purchaser shall receive from Seller (y) all proceeds of any
casualty insurance maintained by Seller and payable with respect to such damage,
and (z) an amount equal to the deductible for such casualty insurance which, in
the instance of clauses (y) and (z), are applicable to Phase II; or (2) permit
Seller the opportunity to restore the damage to Phase II as hereafter provided.
If Purchaser elects to permit Seller to restore as provided in clause (2) above,
Seller shall promptly undertake, with diligence (but subject to Force Majeure),
the restoration of Phase II and the Phase II Closing Date shall be postponed
until the date that is the earlier to occur of six (6) months subsequent to the
date of the Casualty to Phase II and the date Phase II is fully restored.
17.03 CONDEMNATION AND EMINENT DOMAIN. If, prior to the Phase I Closing Date,
the Project shall be subjected to a Taking, either total or partial, or if any
notice of intent of Taking or sale in lieu of Taking that materially affects the
Project is received by Seller or Purchaser, Purchaser shall have the right to
either: (a) proceed with Phase I Closing, in which event Purchaser shall be
entitled to participate in any such Taking proceedings that are applicable to
Phase I, and if applicable to Phase II, Purchaser shall be entitled to so
participate after the Phase II Closing, and, after payment to Seller of the cash
portion of the Purchase Price payable on the applicable Closing Date, to receive
all of the proceeds of such Taking that are applicable to Phase I, after the
Phase I Closing, and that are applicable to Phase II, after the Phase II
Closing, or (b) terminate this Agreement by giving written notice of termination
to Seller, in which event the Deposit shall be returned to Purchaser, Seller and
Purchaser shall each pay 50% of the Shared Closing Costs, and Purchaser and
Seller shall have no further rights or obligations under this Agreement, except
those rights and obligations specifically set forth herein as surviving such
termination. Seller and Purchaser each agree to promptly forward to the other
any notice of intent received pertaining to a Taking of all or a portion of the
Project.
18. DEFAULTS AND REMEDIES.
18.01 SELLER'S DEFAULTS. In respect to the remedies afforded Purchaser pursuant
to Paragraph 18.04 hereof, Seller shall be deemed to be in default under this
Agreement in the event (i) Seller fails, for any reason (other than a default by
Purchaser), to perform any of its material obligations under this Agreement that
arise on or prior to the Phase I Closing within the time limits and in the
manner provided for in this Agreement, (ii) any representation or warranty made
by Seller in this Agreement is untrue or inaccurate in a material respect when
made or as of the Phase I Closing Date, (iii) any Other Seller under the
applicable Other Sale Agreement fails, for any reason (other than a default by
Purchaser), to perform any of its material obligations under the subject Other
Sale Agreement that arise on or prior to the Phase I Closing within the time
limits and in the manner provided for in such Other Sale Agreement, or (iv) any
representation or warranty made by any Other Seller in the applicable Other Sale
Agreement is untrue or
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inaccurate in a material respect when made or as of the Phase I Closing Date.
Notwithstanding the provisions of clauses (iii) and (iv) above, if Purchaser
closes the Phase I portion of this transaction, any default or any inaccurate
representation or warranty by any Other Seller under the terms of the applicable
Other Sale Agreement shall be deemed waived in respect to this Agreement and it
shall not be construed as a default by Seller hereunder. In respect to the
remedies afforded Purchaser pursuant to Paragraph 18.05 hereof, Seller shall be
deemed to be in default under this Agreement in the event Seller fails, for any
reason (other than a default by Purchaser), to perform any of its material
obligations under this Agreement that arise subsequent to the Phase I Closing
(excluding the obligations of Seller to close this transaction in respect to
subsequent Phase Closing, in which event the remedies afforded Purchaser
pursuant to Paragraph 18.04 shall only apply) within the time limits and in the
manner provided for in this Agreement or any representation or warranty made by
Seller in this Agreement is untrue or inaccurate in a material respect when made
or as of the applicable Closing Date. If the applicable Closing does not occur
and Seller is in default, Seller shall pay all of the Shared Closing Costs.
18.02 PURCHASER'S DEFAULTS. Purchaser shall be deemed to be in default under
this Agreement in the event Purchaser fails, for any reason (other than a
default by Seller), to perform any of its material obligations under this
Agreement or any or all of the Other Sale Agreements within the time limits and
in the manner provided for, as applicable, in this Agreement and the Other Sale
Agreements, or any representation or warranty made by the Purchaser in this
Agreement or any or all of the Other Sale Agreements is untrue or inaccurate in
a material respect when made or as of the applicable Closing Date. If the
applicable Closing does not occur and Purchaser is in default, Purchaser shall
pay all of the Shared Closing Costs.
18.03 SELLER'S REMEDIES. If Purchaser is in material default under this
Agreement of its obligation to close each Phase and Seller is not in material
default, the sole and exclusive remedy of Seller shall be to terminate this
Agreement by notice given to Purchaser and in such event Purchaser shall be
liable to Seller for liquidated damages in respect to Phase I in the amount
equal to one percent (1%) of $11,588,297.00, and in respect to Phase II the
amount equal to one percent (1%) of Phase II Closing Payment, plus, in each
instance, Litigation Expenses incurred by Seller in enforcing the collection of
such liquidated damages. The Parties recognize and agree that the foregoing
remedy for liquidated damages is a reasonable amount in the context of this
transaction in which the accurate measurement of damages is not feasible or
convenient. Notwithstanding the foregoing, if Purchaser (i) violates the
Recording Restriction (as hereinafter defined), (ii) fails to indemnify, defend
or hold Seller and the Project harmless in respect to Tests and Studies as
provided in Paragraph 5.02 hereof, or (iii) fails to bind its successors and
assigns as provided in Paragraph 13.04 hereof, Seller, in addition to the
aforesaid liquidated damages in respect to Purchaser's failure to close this
transaction, shall be entitled (subject to the limitations contained in
Paragraph 23 hereof) to recover from Purchaser monetary damages in the amount
actually suffered by Seller as a result of the events set forth in clauses (i),
(ii), or (iii). If Purchaser fails to pay, when due, the Earn-Out Payments
and/or Footage Payments required hereunder, Seller shall only be entitled to
recover from Purchaser such Earn-Out Payments or Footage Payments, plus interest
thereon as provided in Paragraph 24.16 hereof, plus Litigation Expenses.
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18.04 PRE-CLOSING PURCHASER'S REMEDIES. If Seller in respect to its obligations
to close an applicable Phase, is in material default under this Agreement on or
before the applicable Closing Date and Purchaser is not in material default,
Purchaser may, as Purchaser's sole and exclusive remedies, elect to either (i)
terminate this Agreement, in which event the Deposit (but only in respect to
Phase I) shall be refunded to Purchaser, and neither Party shall have any
further rights or obligations hereunder, except those specifically provided
herein as surviving such termination, or (ii) seek and enforce the specific
performance of Seller's obligations hereunder in which event Purchaser shall
also be permitted to recover Litigation Expenses that it incurred as a result of
such proceeding. Notwithstanding the foregoing, in no instance shall Purchaser
or anyone claiming by, through or under Purchaser (over whom Purchaser has
control) record or file in the public records in the jurisdiction of the Project
any memorandum or other indicia of Purchaser's rights or Seller's obligations
hereunder, except in the single instance of a recording or filing that is
concurrently done at the time of the filing of a complaint by Purchaser, with a
court of competent jurisdiction, for the relief of specific performance of
Seller's obligations hereunder, but then only after Purchaser has given Seller
three (3) business days written notice prior to such recording or filing
("Recording Restriction").
18.05 POST CLOSING PURCHASER'S REMEDIES. If Seller is in material default under
this Agreement in respect to any of its obligations hereunder pertaining to an
applicable Phase that arise on or subsequent to the applicable Closing Date,
subject to the limitation provided in Paragraph 23 hereof, Purchaser may recover
from Seller all out-of-pocket monetary damages incurred by Purchaser that have
not been satisfied by the offset permitted Purchaser pursuant to Paragraphs
5.04, 9.03, 14.06, 14.07 and 16.01 hereof. In addition, Purchaser shall be
permitted to recover Litigation Expenses that it incurs as a result of enforcing
Purchaser's right to recover monetary damages as aforesaid.
19. CROSS PERFORMANCE OBLIGATION. If Purchaser or its
permitted successors and assigns elects to terminate any of the Other Sale
Agreements for any reason other than a Casualty to or Taking in respect to any
of the Other Centers prior to the Phase I Closing Date, it shall act as an
election of Purchaser under this Agreement to concurrently terminate this
Agreement and this Agreement shall thereupon terminate, Purchaser and Seller
shall each pay fifty percent (50%) of the Shared Closing Costs, and neither
Purchaser nor Seller shall have any further rights or obligations hereunder,
except those specifically provided herein as surviving such termination.
However, if the Phase I Closing shall have occurred, the termination of any
Other Sale Agreements with respect to a subsequent phase under any such Other
Sale Agreement shall not result in the automatic termination of this Agreement
in respect to Phase II.
20. ASSIGNMENT
Seller shall not assign or transfer any of its rights under
this Agreement without first obtaining Purchaser's prior written consent which
consent shall not be unreasonably
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withheld or delayed. Prior to the Phase I Closing, Purchaser shall not assign
any of its rights under this Agreement without first obtaining Seller's prior
written consent which consent shall not be unreasonably withheld or delayed. At
or subsequent to the Phase I Closing, Purchaser may assign its rights under this
Agreement provided such assignee and Purchaser are jointly and severally liable
for the obligations of Purchaser hereunder and such assignee assumes such
obligations, in writing, in form and content reasonably acceptable to Seller.
21. NOTICES.
Any notice, demand, request, approval, consent or other
communication (collectively, a "Notice") concerning this Agreement or the
Project or any matter arising in connection with this Agreement or the Project
shall be in writing. Seller hereby appoints Opus Properties, L.L.C., a Delaware
limited liability company ("Opus Properties") as Seller's duly authorized and
empowered agent to give and receive any and all Notices required or permitted to
be given by Purchaser or Seller hereunder. Any Notice received by Opus
Properties under the terms of this Agreement shall be deemed received and
binding on Seller. Any Notice given by Opus Properties to Purchaser shall be
deemed a Notice given by and binding on Seller. All Notices shall be addressed
as follows:
If to Seller to: Opus Properties, L.L.C.
700 Opus Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN.: ▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Opus, U.S., L.L.C.
700 Opus Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN.: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: O'Brien, ▇'▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser to: DEVELOPERS DIVERSIFIED REALTY
CORPORATION
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ATTN.: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Executive Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq,
Developers Diversified Realty Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
3200 National City Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
ATTN.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent to: First American Title Insurance Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any Notice shall be given by either (i) personal delivery, in which event it
shall be deemed given on the date of delivery; (ii) certified mail return
receipt requested, in which event it shall be deemed given three (3) business
days after the date postmarked; or (iii) next or second business day delivery by
nationally recognized overnight courier, in which event it shall be deemed given
on the next or second (whichever is applicable) business day immediately
following receipt by the courier. Any Party may change any address for the
delivery of Notice to such Party, by giving Notice in accordance with the
provisions of this Paragraph 21.
22. ATTORNEYS' FEES AND DISBURSEMENTS.
In the event that any Party shall engage an attorney in
connection with any action or proceeding to enforce or construe this Agreement,
the prevailing Party in such action or proceeding shall be entitled to recover
its Litigation Expenses to the extent permitted by law. In the event different
Parties are the prevailing Parties on different issues, the Litigation Expenses
shall be apportioned in proportion to the value of the issues decided for and
against the Parties.
23. NO CONSEQUENTIAL DAMAGES.
Notwithstanding any term, provision or covenant contained in
this Agreement to the contrary, no Party hereto shall be entitled to recover
from the other Party consequential, exemplary or punitive damages, all such
damages are hereby expressly waived and released.
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24. MISCELLANEOUS.
24.01 SUCCESSORS. The rights and obligations of the Parties under this Agreement
shall inure to the benefit of and be binding upon the Parties and all persons
who are permitted hereunder to succeed to their respective rights and
obligations.
24.02 MODIFICATIONS/WAIVERS. This Agreement cannot be changed nor can any
provision of this Agreement, or any right or remedy of any Party, be waived
orally. Changes and waivers can only be made in writing and the change or waiver
must be signed by the Party against whom the change or waiver is sought to be
enforced. Any waiver of any provision of this Agreement, or any right or remedy,
given on any one or more occasions shall not be deemed a waiver with respect to
any other occasion.
24.03 ENTIRE AGREEMENT. This Agreement is signed by the Parties as a final
expression of all of the terms, covenants and conditions of their agreement and
as a complete and exclusive statement of its terms, covenants and conditions.
24.04 COUNTERPARTS. This Agreement may be signed in one or more counterparts or
duplicate signature pages with the same force and effect as if all required
signatures were contained in a single original instrument.
24.05 CAPTIONS. The captions contained in this Agreement were inserted for the
convenience of reference only. They do not in any manner define, limit or
describe the provisions of this Agreement or the intentions of the Parties.
24.06 GENDER/SINGULAR/PLURAL. Whenever masculine, feminine, neuter, singular,
plural, conjunctive or disjunctive terms are used in this Agreement, they shall
be construed to read in whatever form is appropriate to make this Agreement
applicable to all the Parties and all circumstances, except where the context of
this Agreement clearly dictates otherwise.
24.07 EXHIBITS INCORPORATED. The exhibits attached to this Agreement are hereby
incorporated by reference in their entirety with the same force and effect as if
they were set forth at length in this Agreement. Concurrently with the execution
of this Agreement, Seller, Purchaser and all of the Other Sellers entered into
that certain Exhibit Agreement ("Exhibit Agreement") pursuant to the terms of
which the exhibits attached thereto are certain of the schedules referenced in
this Agreement that are also common to all of the Other Sale Agreements.
Therefore, the exhibits attached to the Exhibit Agreement are hereby
incorporated by reference in their entirety in this Agreement with the same
force and effect as if they were set forth at length in this Agreement.
24.08 GOVERNING LAW. In the event of any dispute concerning or arising out of
this Agreement, the laws of the State in which the Project is located shall
govern and control the construction and enforcement of this Agreement.
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24.09 SEVERABILITY. If one or more provisions of this Agreement or the
application thereof shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions or any
other application thereof shall in no way be affected or impaired.
24.10 DATE FOR PERFORMANCE. If the date for performance of any act under this
Agreement falls on a Saturday, Sunday or federal holiday, the date for such
performance shall automatically be extended to the first succeeding business
which is not a federal holiday.
24.11 FURTHER ACTION. The Parties shall at any time, and from time to time on
and after the Phase I Closing Date, upon the request of the other Party, do,
execute, acknowledge and deliver all such further acts, deeds, assignments and
other instruments as may be reasonably required for the consummation of this
transaction and are reasonably acceptable in scope, form and content to the
Party whose act, signature, acknowledgment or delivery is requested.
24.12 Intentionally Deleted.
24.13 CONFIDENTIALITY. Without the prior written consent of Purchaser, neither
Seller nor any of Seller's representatives will disclose to any person any of
the terms, conditions or other facts with respect to this Agreement or the
Exhibit Agreement, including the status thereof, provided, that Seller or any of
Seller's representatives may make such disclosure if Seller has first received
the written opinion of counsel acceptable to Purchaser that such disclosure must
be made by Seller in order that Seller does not commit a violation of law.
Without the prior written consent of Seller, neither Purchaser nor any of
Purchaser's representatives will disclose to any person any of the terms,
conditions or other facts with respect to this Agreement or the Exhibit
Agreement, including the status thereof and any of the terms, provisions or
conditions of the Site Analysis Documents or of any of the Studies and Reports,
provided, that Purchaser or any of Purchaser's representatives may make such
disclosure if Purchaser has first received the written opinion of counsel
acceptable to Seller that such disclosure must be made by Purchaser in order
that Purchaser does not commit a violation of law. The obligation of Seller and
Purchaser pursuant to the provisions of this Paragraph 24.13 shall survive the
termination of this Agreement.
24.14 TIME OF THE ESSENCE. Time is of the essence in this transaction.
24.15 CONSTRUCTION. This Agreement shall not be construed more strictly against
one Party than against the other merely by virtue of the fact that it may have
been prepared by counsel for one of the Parties, it being recognized that both
Seller and Purchaser have contributed substantially and materially to the
preparation of this Agreement. The headings of various Section and Paragraphs in
this Agreement are for convenience only, and are not to be utilized in
construing the content or meaning of the substantive provisions hereof.
24.16 INTEREST. Any payment obligation of a Party hereto to the other Party
shall bear interest at the rate of two percent (2%) plus the corporate base rate
of interest from time to time
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charged by Citibank, N.A., commencing on the date that is five (5) business days
subsequent to the date such payment is due, until paid.
24.17 WARRANTY WORK. For the period ("Warranty Period") (i) that is provided in
each Lease or New Lease in respect to the applicable Tenant Warranty for tenant
improvements, and (ii) of one (1) year subsequent to the date each of the
Improvements (exclusive of tenant improvements that are the subject of the
applicable Tenant Warranty) is substantially complete in accordance with the
Plans, Seller agrees, at its sole cost and expense, to promptly (subject to
Force Majeure) correct any defects in the tenant improvements or other
Improvements due to (a) the failure thereof to substantially comply with the
plans for the subject tenant improvements or the Plans in respect to the rest of
the Improvements, or (b) faulty, improper or inferior materials or workmanship
(collectively, "Warranty Work"). If Warranty Work is the subject of a Lease or
New Lease, the provisions of such Lease or New Lease shall control in the
determination of the scope of the Warranty Work. If Warranty Work is not the
subject a Lease or New Lease, then the provisions of this Paragraph 24.17 shall
control in the determination of the scope of the Warranty Work. However,
Warranty Work shall not in any way include routine and appropriate maintenance
or Warranty Work directly resulting from (but only to the extent resulting from)
the failure to perform routine and appropriate maintenance of the tenant
improvements or other Improvements. Promptly during the Warranty Period (but in
any event prior to the expiration of the Warranty Period), Purchaser shall give
Seller written notice ("Warranty Notice") of any defect in the Project that
Purchaser, in good faith, determines to require Warranty Work. Except as
hereafter provided, Seller shall promptly undertake and complete, subject to
Force Majeure, the Warranty Work that is the subject of the Warranty Notice.
However, if Seller objects, in good faith, within ten (10) business days
following receipt of a Warranty Notice, it shall notify Purchaser, in writing of
the same. Thereafter, they shall promptly confer, in good faith, to resolve any
disagreement in respect to Warranty Work. If within fifteen (15) days after
conferring Purchaser and Seller are unable to agree on the scope of Warranty
Work that is not the subject of a Lease or New Lease, they shall appoint a third
party contractor to make such determination, and the scope so determined by the
third party contractor shall be binding on the Parties. When the Warranty Work
is agreed to by the Parties or determined by the third party contractor as
aforesaid, such Warranty Work shall be undertaken and completed as aforesaid.
The Warranty Work obligation hereunder shall only pertain to the Warranty Work
for which a Warranty Notice was delivered to Seller prior to the expiration of
the Warranty Period or that was delivered by a Tenant or a New Tenant in
accordance with the provisions of the Tenant Warranty, and in such event the
Warranty Work obligation of Seller in respect thereto shall not terminate at the
expiration of the Warranty Period or the Tenant Warranty, but rather shall
continue until such Warranty Work is completed by Seller.
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IN WITNESS WHEREOF, the Parties have signed this Agreement as
of the date set forth in the first paragraph of this Agreement.
SELLER: PURCHASER:
DEVELOPERS DIVERSIFIED
OPUS SOUTH CORPORATION REALTY CORPORATION
a Florida corporation an Ohio corporation
By: ▇▇▇▇ RAUENNORST By:
--------------------------- --------------------------------
Its: President & CEO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
Seller's Federal Taxpayer Purchaser's Federal Taxpayer
Identification No.: Identification No.:
▇▇-▇▇▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
For purposes only of acting as the Escrow Agent as provided in this Agreement,
First American Title Insurance Company
By: [SIG]
-----------------------------
Its: Commercial Manager
56
IN WITNESS WHEREOF, the Parties have signed this Agreement as
of the date set forth in the first paragraph of this Agreement.
SELLER: PURCHASER:
DEVELOPERS DIVERSIFIED
OPUS SOUTH CORPORATION REALTY CORPORATION
a Florida corporation an Ohio corporation
By: By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------- --------------------------------
Its: President & CEO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Executive Vice President
Seller's Federal Taxpayer Purchaser's Federal Taxpayer
Identification No.: Identification No.:
▇▇-▇▇▇▇▇▇▇ ▇▇-▇▇▇▇▇▇▇
For purposes only of acting as the Escrow Agent as provided in this Agreement,
First American Title Insurance Company
By:
-----------------------------
Its:
------------------------
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SCHEDULES ATTACHED TO THIS AGREEMENT OR
THE EXHIBIT AGREEMENT
1.02 Legal Description of Land
1.02(a) Site Plan
2.02(b) Personal Property
3.01 Rent Roll
5.01(b) Environmental Reports
5.01(g) Guaranties
6.01 Survey Requirements and Certifications (attached to the Exhibit
Agreement)
6.03 Permitted Exceptions
6.04 Endorsements
7.01 Deed (attached to the Exhibit Agreement)
7.02 Assignment of Leases (attached to the Exhibit Agreement)
7.02(a) Description of Leases and Security Deposits
7.04 ▇▇▇▇ of Sale (attached to the Exhibit Agreement)
7.05 Assignment of Contracts (attached to the Exhibit Agreement)
7.05(a) Description of Contracts to be Assigned at Closing
7.06 Affidavit of Seller Concerning Violations/Work Orders (attached
to the Exhibit Agreement)
7.10 FIRPTA Affidavit (attached to the Exhibit Agreement)
7.13 Tenant Letter (attached to the Exhibit Agreement)
7.15 Tenant Estoppel (attached to the Exhibit Agreement)
7.20 Seller Date Down Certificate (attached to the Exhibit Agreement)
7.21 Agreement Estoppel
7.22 Declaration of Excluded Uses
7.24 Agreement Re Allocable Share
7.25 Assignment of Declaration
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8.06 Purchaser Date Down Certificate (attached to the Exhibit
Agreement)
8.10 Sign Easement Agreement
10.01(xi) Permits
10.01(xvii) Tenant Inducements
10.01(xviii) Alleged Seller Defaults Under the Leases
10.01(xix) Tenant Defaults Under the Leases
10.01(xx) Tenant's Notice of Vacating, Assigning or Subletting
13.11 Shell and Core List and Standard
13.11(a)(1), Punchlist Holdback(s)
etc.
13.11(b) Form G704 Certificate of Completion (attached to the Exhibit
Agreement)
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GLOSSARY OF TERMS
Term Where Defined
---- -------------
Agreement 1st Paragraph
Agreement Estoppel 7.21
Arrears 14.02
Assignment Reservation 13.03
Bankruptcy Proceeding 13.01(xi)(c)
Carry 13.01(i)
Casualty 17.01
Casualty Notice 13.06
Childcare Lease 15.01
Closing 15.01
Closing Date(s) 15.01
Closing Payment 13.01(ii)
Commissions 10.01(xvi)
Condition Notice 5.04
Condition Response 5.04
Commitment 6.02
Contract Assignment 7.05
Deed 7.01
Defects Notice 6.03
Deposit 3.02(b)
Disapproved Lease 13.04
Earn-Out Conditions 13.07
Earn-Out Extension Notice 13.05
Earn-Out Payment 13.01(iii)
Earn-Out Period 13.05
Earn-Out Segment 13.05
Endorsements 6.04
Environmental Laws 10.01(xii)
Environmental Reports 5.01(b)
Escrow Agent 4.01
Exhibit Agreement 24.07
Extension Election 15.01
FIRPTA Affidavit 7.10
First Segment 13.05
Footage Computation 13.08
Footage Payment 13.08
Force Majeure 13.01(iv)
Guaranties 5.01(g)
Hazardous Substances 10.01(xii)
Improvements 1.02
Initial Deposit 3.02(a)
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GLOSSARY OF TERMS
Term Where Defined
---- -------------
Intangible Property 2.02(c)
Knowledge 10.01
Land 1.02
Lease Assignment 7.02
Lease Reservation Date 13.03
Leases 7.02
Lien(s) 9.03
Litigation Expenses 10.04(a)
Loss 17.01
Lump Sum Non-Credit 14.06
Monetary Default 13.01(xi)(b)
Mortgage 10.01(ix)
Net Cash Flow 13.01(v)
New Lease 13.01(vi)
New Lease Obligations 13.10
New Tenant 13.01(vii)
Notice 21
Opus Properties 21
Other Center(s) 13.01(viii)
Other Sale Agreement(s) 13.01(ix)
Other Seller(s) 13.01(x)
Pads 1.02
Party(ies) 1st Paragraph
Permits 2.02(c)
Permitted Exceptions 6.03
Personal Property 2.02(b)
Phase I 1.02
Phase I Closing 15.01
Phase I Closing Date 15.01
Phase I Holdback 13.11
Phase II 1.02
Phase II Closing 15.01
Phase II Closing Date 15.01
Phase II Holdback 13.11
Phase II Notice Date 5.03
Phase II Unacceptable Condition Cost Limitation 5.04
Plans 5.01(f)
Phase(s) 1.02
Post Closing Work 16.01
Pro Rata Share 14.03
ii
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GLOSSARY OF TERMS
Term Where Defined
---- -------------
Project 2.01
Prospect 13.04
Punchlist Holdback 13.11
Punchlist Work 13.11
Purchase Price 3.01
Purchaser 1st Paragraph
Purchaser Date Down Certificate 8.06
Purchaser's Knowledge 10.02
Qualification Date 15.01
Qualification Notice 15.01
Qualified Lease 13.01(xi)
Real Estate Broker 4.02
Real Estate Tax Rent 14.06
Real Property 1.03
Recording Restriction 18.04
Release 10.01(xii)
Rental Undertaking 13.04
Rents 14.01
Reserved Base Rent Date 13.03
Restoration Forgiveness 5.02
Second Deposit 3.02(b)
Second Segment 13.05
Security Deposits 7.02
Seller 1st Paragraph
Seller Date Down Certificate 7.20
Seller's Estoppel 7.15
Seller's Response 6.03
Shared Closing Costs 11.02(a)
Site Analysis Documents 5.01
Site Analysis Period 5.03
Square Footage 13.08
Superfund Act 10.01(xii)
Survey 6.01
Survey Defects 6.03
Taking 17.01
Tenant Estoppel 7.15
Tenant Inducement 10.01(xvii)
iii
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GLOSSARY OF TERMS
Term Where Defined
---- -------------
Tenant Letters 7.13
Tenant Warranty 13.10
Tenants 7.02
Termination Agreements 7.16
Tests and Studies 5.02
Title Company 4.01
Title Defects 6.03
Title Policy 6.04
UA Lease 15.01
Unacceptable Conditions 5.04
Unknown Rents 14.03
Unassigned Lease 13.04
Utility Deposits 14.04
Vacant Space 13.01(xii)
Violations 7.06
Warranty Notice 24.17
Warranty Period 24.17
Warranty Work 24.17
Work Orders 7.06
iv
