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Exhibit 99.2
PURCHASE AND SALE AGREEMENT
BETWEEN
MARATHON U.S. REALTIES, INC., AS SELLER
AND
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS, AS PURCHASER
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS........................................... -1-
1.1 Definitions.......................................... -1-
1.2 Gender and Number.................................... -13-
1.3 References........................................... -14-
1.4 Illustrative Terms................................... -14-
ARTICLE 2 AGREEMENT TO SELL..................................... -14-
2.1 Agreement............................................ -14-
2.2 Purchase Price....................................... -14-
2.3 Deposit.............................................. -14-
ARTICLE 3 LENDER/PARTNER APPROVALS.............................. -15-
3.1 Assumption........................................... -15-
3.2 Loan Balances........................................ -15-
3.3 Contingency for Lender Approval...................... -15-
3.4 Partner Approvals.................................... -16-
ARTICLE 4 INSPECTIONS BY PURCHASER.............................. -17-
4.1 Purchaser's Inspection Period........................ -17-
4.2 Termination Right.................................... -18-
4.3 Extensions of Inspection Period...................... -18-
4.4 Indemnification by Purchaser......................... -18-
4.5 Limitations on Purchaser's Inspections............... -19-
4.6 Condition of Property................................ -19-
ARTICLE 5 TITLE AND SURVEYS..................................... -19-
5.1 Title and Survey..................................... -19-
5.2 Liens................................................ -20-
5.3 Approval/Disapproval of Title Review................. -20-
5.4 Purchaser's Options.................................. -20-
5.5 Escrow and Title Costs............................... -21-
ARTICLE 6 CLOSING............................................... -22-
6.1 Closing.............................................. -22-
6.2 Seller Closing Documents............................. -22-
6.3 Purchaser Closing Documents.......................... -24-
6.4 Occurrence of Closing................................ -26-
6.5 Title to Purchaser's Nominee......................... -26-
6.7 Further Assurances................................... -26-
6.8 FIRPTA Withholdings.................................. -27-
ARTICLE 7 APPORTIONMENTS AND PAYMENTS........................... -27-
7.1 Prorations........................................... -27-
7.2 Adjustments.......................................... -31-
7.3 Collection........................................... -31-
7.4 Closing and Final Proration Statements............... -32-
7.5 Utilities............................................ -32-
7.6 Reserves and Deposits................................ -32-
7.7 Construction Allowances.............................. -33-
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7.8 Proration of Temple and Alexandria................... -33-
7.9 Survival............................................. -33-
ARTICLE 8 ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER......... -33-
8.1 Conduct of Business Prior to Closing Date............ -33-
8.2 Leasing.............................................. -35-
8.3 Insurance Policies................................... -36-
8.4 Management Office and Employees...................... -36-
8.5 Possession........................................... -37-
8.6 Management Information Systems....................... -37-
8.7 Mortgage Releases.................................... -37-
8.8 Lease/Estoppel Certificates.......................... -37-
8.9 Guaranty............................................. -37-
ARTICLE 9 REPRESENTATIONS AND WARRANTIES........................ -38-
9.1 Seller's Representations and Warranties.............. -38-
9.2 Seller's Knowledge Defined........................... -44-
9.3 Purchaser's Representations and Warranties........... -44-
9.4 Survival of Representations and Warranties........... -45-
ARTICLE 10 DAMAGE OR DESTRUCTION - CONDEMNATION................. -45-
10.1 Notice.............................................. -45-
10.2 Non-Material Damage................................. -46-
10.3 Loss Adjustments.................................... -46-
ARTICLE 11 CONDITIONS TO CLOSING................................ -47-
11.1 Conditions to Seller's Obligations.................. -47-
11.2 Conditions to Purchaser's Obligations............... -47-
ARTICLE 12 DEFAULT.............................................. -49-
12.1 Seller's Default.................................... -49-
12.2 Purchaser's Default................................. -49-
12.3 Liquidated Damages.................................. -49-
12.4 Closing is a Waiver................................. -49-
ARTICLE 13 BROKERAGE COMMISSIONS................................ -50-
ARTICLE 14 NOTICES.............................................. -50-
14.1 Notices............................................. -50-
14.2 Change of Address................................... -51-
ARTICLE 15 INDEMNIFICATION...................................... -51-
15.1 Purchaser Indemnification........................... -51-
15.2 Seller Indemnification.............................. -52-
15.3 Indemnification Procedure........................... -52-
ARTICLE 16 MISCELLANEOUS........................................ -53-
16.1 Parties Bound....................................... -53-
16.2 Headings; Exhibits.................................. -53-
(ii)
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16.3 Invalidity.......................................... -54-
16.4 Governing Law....................................... -54-
16.5 No Third Party Beneficiary.......................... -54-
16.6 Entirety and Amendments............................. -54-
16.7 Execution in Counterparts........................... -54-
16.8 Extension of Performance............................ -54-
16.9 Time................................................ -54-
16.10 Assignment......................................... -54-
16.11 Confidentiality.................................... -55-
16.12 Trustee Approval................................... -55-
16.13 No Solicitation.................................... -55-
16.14 Limit of Trustees' Liability....................... -55-
16.15 Exhibits........................................... -55-
(iii)
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (the "AGREEMENT") is made as
of this ____ day of June, 1996 (the "EFFECTIVE DATE"), by and between MARATHON
U.S. REALTIES, INC., a Delaware corporation and FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS, an Ohio business trust.
W I T N E S S E T H:
In consideration of and in reliance upon the covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. Except as may otherwise be expressly provided
herein, and in addition to other defined terms contained herein, the following
terms, for all purposes of this Agreement, have the respective meanings set
forth below:
"ADDITIONAL CHARGES" means all charges (other than Rents)
payable to an Owner by any Party under a Lease or Specialty License Agreement or
by a Party under a Reciprocal Easement Agreement, including, without limitation,
advertising and promotional fees, common area maintenance charges, charges for
electricity or other utilities and HVAC charges, real estate taxes, insurance
premiums and other amounts payable to the extent denominated in such Lease or
Reciprocal Easement Agreement as a separate charge (as opposed to being included
in a stated gross or base rent).
"ADJUSTMENTS" shall have the meaning set forth in Section 7.2
hereof.
"ADMINISTRATIVE FEES" shall have the meaning set forth in
Section 7.1(c) hereof.
"AFFILIATE" means, with respect to either Seller or Purchaser,
as the case may be in each instance, any entity (a) that controls Seller or
Purchaser, (b) that is controlled by Seller or Purchaser, (c) that is under
common control with Seller or Purchaser, (d) into which Seller or Purchaser is
merged or consolidated or (e) as to Purchaser, the Joint Venture. FUMI shall be
deemed to be an "Affiliate" of Purchaser, even though it is not controlled by,
or under common control with, Purchaser.
"ALEXANDRIA" means Alexandria Mall Company, a Louisiana
general partnership, established pursuant to that certain Restatement of
Partnership Agreement of Alexandria Mall Company dated as of ________________,
as amended by Modification of Partnership dated as of January 27, 1978 (said
Restatement of Partnership Agreement, as amended, is hereinafter referred to as
the "ALEXANDRIA PARTNERSHIP AGREEMENT"), in which Seller owns a ninety percent
(90%) general partnership interest, which owns the regional mall
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commonly known as Alexandria Mall located in Alexandria, Louisiana, more
particularly described in EXHIBIT A1 attached hereto ("ALEXANDRIA MALL").
"ALEXANDRIA INTEREST" means Seller's 90% general partnership
interest in Alexandria.
"AMENDMENTS TO PARTNERSHIP CERTIFICATES" means the amendments
to the partnership agreement and all partnership certificates or other filings,
to the extent such amendments, certificates or filings are required to be filed
under any Law, applicable to the Partnership Interests, evidencing or reflecting
in the public records the transfer of the respective Partnership Interests to
Purchaser, to be executed by Purchaser, Seller and each partner of the
applicable Partnership.
"ANCHOR STORE" means those retail stores listed on EXHIBIT
9.1(c) attached hereto.
"ASSIGNMENT OF CONTRACTS" means an assignment in the form of
EXHIBIT 6.2(g) attached hereto, to be executed and acknowledged by Seller and
Purchaser, pursuant to which Seller assigns to Purchaser, and Purchaser assumes,
all of Owner's right, title and interest under the Contracts relating to a
Seller-Owned Mall.
"ASSIGNMENT OF LEASES" means an assignment in the form of
EXHIBIT 6.2(f) attached hereto, to be executed and acknowledged by Seller and
Purchaser, pursuant to which Seller assigns to Purchaser, and Purchaser assumes,
all right, title and interest of the Seller under the Leases and the Specialty
License Agreements relating to a Seller-Owned Mall.
"ASSIGNMENT OF OFFICE AND EQUIPMENT LEASES" means an
assignment in the form of EXHIBIT 6.2(q) attached hereto, to be executed and
acknowledged by MRML and Purchaser or FUMI, pursuant to which MRML assigns, and
Purchaser or FUMI assumes, all right, title and interest of MRML under the
Office and Equipment Leases.
"ASSIGNMENT OF PARTNERSHIP INTERESTS" means an assignment in
the form of EXHIBIT 6.2(e) attached hereto, to be executed and acknowledged by
Seller and Purchaser, pursuant to which Seller assigns to Purchaser, and
Purchaser assumes, all of Seller's right, title and interest in and to the
respective Partnership Interests.
"ASSIGNMENT OF RECIPROCAL EASEMENT AGREEMENTS" means an
assignment in the form of EXHIBIT 6.2(h) attached hereto, to be executed and
acknowledged by Seller and Purchaser pursuant to which Seller assigns, and
Purchaser assumes, all of the Seller's right, title and interest in and to a
Reciprocal Easement Agreement relating to a Seller-Owned Mall.
"BALANCE OF THE PURCHASE PRICE" means the Purchase Price (a)
less the Deposit and (b) plus or minus the net sum of the prorations,
allocations, charges, credits, withholdings and other adjustments as provided in
this Agreement.
"BENEFIT PLAN" means any agreement, plan or arrangement for
employee benefits, including any bonus, deferred compensation, severance,
disability, sick pay, salary continuation, death benefit, vacation, stock
purchase or stock option, hospitalization or other
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medical, life or other insurance, supplemental unemployment benefit,
profit-sharing, pension or retirement plan or arrangement maintained or
contributed to by Seller or any Seller Affiliate in connection with any Mall or
with respect to any of the Employees.
"BILLS OF SALE" means the bills of sale to be executed and
delivered by Seller and MRML, pursuant to which Seller and MRML transfer and
assign, and Purchaser or Purchaser's Nominee accepts, the title of Seller and
MRML in and to any Personality and Other Assets owned by Seller and MRML,
respectively, and used in connection with the management and operation of the
Malls.
"BRAZOS MALL" means that certain regional mall located in Lake
Jackson, Texas, more particularly described in EXHIBIT A2 attached hereto.
"BROKER" means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of Texas, Inc., ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, #▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
legal holiday in the State of Texas.
"CENTRIXX" means Centrixx Realty Holdings Limited, a Canadian
corporation and an Affiliate of Seller.
"CLOSING" means the transfer of title to the Property to
Purchaser and the related transactions required by the terms of this Agreement
to occur contemporaneously therewith.
"CLOSING DATE" means the date that is fifteen (15) days after
the expiration of the Inspection Period, unless such date is not a Business Day,
in which event the Closing Date shall be the next Business Day thereafter, but
in no event later than September 30, 1996, subject to extension to the extent
expressly provided in accordance with the terms of this Agreement.
"CLOSING DOCUMENTS" means the Seller Closing Documents and the
Purchaser Closing Documents without distinction between them.
"CLOSING STATEMENT" shall have the meaning set forth in
Section 7.4(a) hereof.
"COBRA" means the requirements of Section 4980B of the Code,
Proposed Treasury Regulation Section 1.162-26 and Part 6 of Subtitle B of Title
I of ERISA.
"CODE" means the Internal Revenue Code of 1986, as amended,
and all rules and regulations promulgated thereunder.
"COMMON AREA EXPENSES" shall have the meaning set forth in
Section 7.1(c) hereof.
"CONFIDENTIAL INFORMATION" means the terms of this Agreement
and all information or documentation reviewed or received by either party hereto
in connection with this
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Agreement or the Property, including, specifically, information regarding
Purchaser's financing plans, but excluding any information that is obtained from
a third-party or is publicly available.
"CONTRACTS" means all (a) management, service, maintenance,
operating and repair contracts (excluding the Leases, the Specialty License
Agreements and recorded documents evidencing the Permitted Exceptions) relating
to the Malls and to which an Owner is a party, and (b) equipment leases to which
an Owner is a party and all rights and options of an Owner thereunder, including
rights to renew or extend the term or purchase the leased equipment, relating to
equipment or property located in or upon the Malls or used in connection
therewith.
"CUTOFF DATE" means 11:59 p.m. on the day preceding the
Closing Date.
"DAMAGE NOTICE" shall have the meaning set forth in Section
10.1 hereof.
"DAMAGES" means any and all actual losses, costs, claims,
liabilities, damages, obligations, judgments, settlements, awards, offsets, fees
and expenses (including, without limitation, reasonable attorneys' fees and
expenses), fines, penalties, and charges, incurred as a result of administrative
and judicial proceedings and orders, judgments, remedial actions and
requirements thereof, but expressly excluding punitive damages.
"DELINQUENCIES" shall have the meaning set forth in Section
7.3 hereof.
"DEPOSIT" shall mean the sum of Three Million One Hundred
Sixty Thousand and No/100 Dollars ($3,160,000.00).
"DISAPPROVAL NOTICE" means a written notice of Purchaser
identifying any title matter related to any of the Malls which Purchaser
disapproves (a "DISAPPROVED TITLE MATTER").
"EFFECTIVE DATE" shall have the meaning set forth in the first
sentence of this Agreement.
"EMPLOYEES" means the on-site employees of MRML at each of the
Malls and the employees of MRML located at the Dallas, Texas and Houston, Texas
offices of MRML as of the Effective Date.
"EQUITY FUNDS" means that portion of the Purchase Price to be
paid by Purchaser out of Purchaser's own funds, or funds of the other party to
the Joint Venture, and excluding any portion of the Purchase Price which is
financed.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ESCROW" shall have the meaning set forth in Section 6.2
hereof.
"ESCROW AGREEMENT" means the escrow agreement by and among
Seller, Purchaser and Escrowee, in the form of EXHIBIT 2.3 attached hereto,
executed by the parties thereto as of the Effective Date. This Agreement shall
not be merged into the Escrow
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Agreement, but the Escrow Agreement shall be deemed auxiliary to this Agreement
and, as between the parties hereto, if there is any conflict between the Escrow
Agreement and this Agreement, the provisions of this Agreement shall govern and
control.
"ESCROWEE" means First American Title Insurance Company, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or any other nationally recognized
title insurance company designated by Seller and approved by Purchaser.
"ESTOPPEL CERTIFICATES" means the Lease Estoppel Certificates,
the REA Estoppel Certificates, the Lender Estoppel Certificates, the Partnership
Estoppel Certificates and the Seller Lease Estoppel Certificate.
"FILING DOCUMENTS" shall have the meaning set forth in Section
6.4 hereof.
"FINAL PRORATION STATEMENT" shall have the meaning set forth
in Section 7.4(b) hereof.
"FINANCIAL STATEMENTS" means profit and loss statements for
each Mall dated as of December 31, 1994 and as of December 31, 1995, and the
Interim Financial Statements, certified by Seller's Director of Finance.
"FUMI" means First Union Management, Inc., a Delaware
corporation and an Affiliate of Purchaser.
"GAAP" means generally accepted accounting principles in
Canada as in effect on the date hereof, as the same may be amended from time to
time, applied on a consistent basis.
"HAZARDOUS SUBSTANCE" means any hazardous, toxic or dangerous
waste, substance or material, pollutant or contaminant, as defined for purposes
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. Section 9601 et seq.), as amended, or the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.), as amended, or any substance
which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyls (PCB's), radon gas, urea formaldehyde, asbestos or
lead.
"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 15.3(a) hereof.
"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 15.3(a) hereof.
"INITIAL SURVEY DELIVERY DATE" SHALL HAVE THE MEANING SET
FORTH IN SECTION 5.1(a).
"INSPECTION PERIOD" means the period of time from the
Effective Date through and including the date that is sixty (60) days after the
Effective Date and all extensions of such time period pursuant hereto.
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"INSURANCE POLICIES" means the liability and property damage
insurance policies for each Mall listed in EXHIBIT 8.3 attached hereto.
"INTERIM FINANCIAL STATEMENTS" means unaudited profit and loss
statements for each Mall as of May 31, 1996, certified by Seller's Director of
Finance.
"JOINT VENTURE" means the joint venture to be formed by
Purchaser as part of Purchaser's equity funding for this transaction.
"KILLEEN MALL" means that certain regional mall located in
Killeen, Texas, more particularly described in EXHIBIT A3 attached hereto.
"LAWS" means all applicable laws, ordinances, rules,
regulations, codes, orders and requirements of any federal, state or local
governmental authority, including, without limitation, the Americans With
Disabilities Act of 1990 (the "ADA"), and regulations promulgated thereunder.
"LEASE ESTOPPEL CERTIFICATE" means the estoppel certificate in
the form of EXHIBIT 6.2(j)(i) attached hereto.
"LEASE PROPOSAL" shall have the meaning set forth in Section
8.2(b) hereof.
"LEASE YEAR" shall have the meaning set forth in Section
7.1(e) hereof.
"LEASES" means all leases, subleases, licenses, concessions
and other agreements relating to the use or occupancy of any portion of the
Malls, other than the Specialty License Agreements or Contracts, including those
and any amendments, modifications or work letters related thereto that may be
entered into by an Owner after the Effective Date and prior to Closing in
accordance with the terms of this Agreement.
"LENDER ESTOPPEL CERTIFICATES" means the estoppel certificates
in the form of EXHIBIT 6.2(j)(iv) attached hereto.
"LENDERS" means TIAA and NML.
"LIEN SEARCH" means a search of the Secretary of State
records, county recorder records, local court records (federal, state, county
and municipal) and such other official public records with respect to each Mall
that would disclose the presence of any Liens, bankruptcy proceedings, lis
pendens or other matters affecting a Mall or an Owner.
"LIENS" means any liens and/or security interests that
encumber any part of the Real Property, Personalty or Other Assets owned by
Alexandria, Temple or Seller, including, but not limited to, mortgages, deeds of
trust, mechanics, materialmens, judicial, tax or governmental liens, pledges,
options, rights of first offer or first refusal or other similar items relating
to the Real Property, Personalty or Other Assets of any nature whatsoever.
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"MALL ASSETS" means with respect to the Seller-Owned Malls,
(i) the Real Property, (ii) the Other Assets, (iii) the Personalty, (iv) the
Leases, (v) the Specialty License Agreements, (vi) the Reciprocal Easement
Agreements and (vii) the Contracts.
"MALL INFORMATION" means the following existing information,
wherever located, with respect to each Mall: books and records, financial
statements, operating budgets, structural, mechanical, geotechnical or other
engineering studies, Plans, soil test reports, environmental reports,
feasibility studies, appraisals, ADA surveys or reports, OSHA asbestos surveys,
marketing studies, Mall documents and compilations, Lease summaries, the Leases,
the Contracts, the Specialty License Agreements, the Reciprocal Easement
Agreements and all other contracts, agreements and/or documents relating to the
Malls that have been prepared at an Owner's request and are within Seller's
possession or control.
"MALLS" means ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ Mall,
Mesilla Valley Mall, Park Plaza, Pecanland Mall, Shawnee Mall, Temple Mall and
▇▇▇▇▇ ▇▇▇▇▇ Mall.
"MATERIAL CONTRACTS" means any (a) contracts or other
agreements (but excluding Specialty License Agreements and Leases) that would
require performance (in whole or in part) by Purchaser on or after the Closing
Date of any expenditures that, in the aggregate with respect to each such
contract or agreement, would exceed Two Hundred Fifty Thousand Dollars
($250,000.00) in any calendar year); (b) any agreement for the sale of land
parcels that may comprise all or any portion of the Real Property; or (c)
Reciprocal Easement Agreements.
"MATERIAL LEASE" means any Lease or Specialty License
Agreement that either (a) covers more than ten thousand (10,000) square feet of
space or (b) provides for a construction allowance or other landlord
expenditures of more than One Hundred Fifty Thousand Dollars ($150,000.00).
"MESILLA VALLEY MALL" means that certain regional mall located
in Las Cruces, New Mexico, more particularly described in EXHIBIT A4 attached
hereto.
"MORTGAGE LOAN ASSIGNMENT AND ASSUMPTION AGREEMENT" means the
mortgage loan assignment and assumption agreement to be executed by and among
Purchaser, Seller and TIAA in the form of EXHIBIT 6.2(i) attached hereto or such
other form approved by Purchaser, Seller and TIAA.
"MORTGAGE LOAN DOCUMENTS" means those mortgages, deeds of
trust, promissory notes, financing statements, and other loan documents, and all
amendments, modifications and supplements thereto, securing or evidencing either
the Pecanland Loan or Temple Loan.
"MRML" means Marathon Realty Management Limited, a Delaware
corporation and an Affiliate of Seller.
"MUSRI LOAN" means the existing loan in the amount of Two
Million Two Hundred Thousand and No/100 Dollars ($2,200,000.00) from Seller to
Temple relating to the Temple Mall.
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"MUSRI LOAN DOCUMENTS" means all promissory notes, mortgages,
deeds of trust, financing statements and other loan documents evidencing or
securing the MUSRI Loan, and all amendments, modifications and supplements
thereto.
"NEW CONTRACT" means any Contract or agreement entered into
after the expiration of the Inspection Period, having a term that expires after
the Closing Date and relating to the use, maintenance and operation of any Mall,
or any portion thereof.
"NEW LEASE" means any Lease entered into after the expiration
of the Inspection Period but excluding any of the foregoing that has a term that
expires prior to the Closing Date or is terminated by the Owner or the Tenant
thereunder on or prior to the Closing Date pursuant to a termination right
granted thereunder.
"NEW SPECIALTY LICENSE AGREEMENTS" means any Specialty License
Agreement entered into after the expiration of the Inspection Period but
excluding any of the foregoing that has a term that expires prior to the Closing
Date or is terminated by the Owner or the Tenant thereunder on or prior to the
Closing Date pursuant to a termination right granted thereunder.
"NML" means Northwestern Mutual Life Insurance Company.
"OFFICE AND EQUIPMENT LEASES" means the Dallas, Texas and
Houston, Texas office leases of MRML and the other office and/or equipment
leases of Seller or MRML used in connection with the management or operation of
the Malls, all of which leases are listed and described on EXHIBIT 9.1(f)
attached hereto.
"OTHER ASSETS" means all tangible and intangible assets of any
nature owned by Seller or Centrixx, as the case may be relating to the Malls
other than the Personalty, the Real Property, the Leases, the Specialty License
Agreements and the Contracts, including, without limitation, (a) all warranties
on the Personalty or Real Property, (b) all plans, specifications, engineering
drawings and prints relating to the construction of the buildings or other
improvements that comprise the Malls, (c) all copyrights, logos, designs,
trademarks, trade names, service marks and all goodwill associated with the
Malls (including, without limitation, those listed on EXHIBIT D attached
hereto), but excluding (i) those that are owned by a Tenant or a Party, (ii) the
name "Marathon," the Marathon logo and any similar or derivative names, (iii)
the HRIS software and system owned by ▇.▇. ▇▇▇▇▇▇▇ and (iv) the name "Centrixx"
and any similar or derivative names and (d) all claims and causes of action
arising out of or in connection with the Mall that Purchaser expressly agrees to
assume (other than claims for delinquent Rents and tenant obligations accruing
prior to the Closing Date for which Seller has received no credit pursuant to
Article 7).
"OWNER" means (a) with respect to ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
(▇) with respect to Temple Mall, Temple, (c) with respect to ▇▇▇▇▇ ▇▇▇▇▇ Mall,
Centrixx, and (d) with respect to all Seller-Owned Malls other than ▇▇▇▇▇ ▇▇▇▇▇
Mall, Seller.
"PARK PLAZA" means that certain regional mall located in
Little Rock, Arkansas, more particularly described in EXHIBIT A5 attached
hereto.
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"PARTNERSHIP AGREEMENTS" means the Alexandria Partnership
Agreement and the Temple Partnership Agreement.
"PARTNERSHIP CONSENTS" means the ▇▇▇▇▇▇▇ Consent and the White
Consents.
"PARTNERSHIP ESTOPPEL CERTIFICATES" means the Temple
Partnership Estoppel Certificate and the Alexandria Partnership Estoppel
Certificate both in the form of EXHIBIT 6.2(j)(v) attached hereto.
"PARTNERSHIP FINANCIAL STATEMENTS" means the financial
statements of the Partnerships audited by Price Waterhouse LLP and dated as of
December 31, 1995, and the Rent Roll and the Updated Rent Roll applicable to the
Partnership Sites.
"PARTNERSHIP INTERESTS" means the Alexandria Interest and the
Temple Interest.
"PARTNERSHIP SITES" means Alexandria Mall and Temple Mall.
"PARTNERSHIPS" means Alexandria and Temple.
"PARTY" means TIAA or NML, a party to a Reciprocal Easement
Agreement, a Specialty License Agreement, a Material Contract, an Office or
Equipment Lease or a Lease, in each case other than an Owner or its predecessors
in title with respect to any Mall.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PECANLAND LOAN" means the existing mortgage loan encumbering
the Pecanland Mall payable to TIAA.
"PECANLAND MALL" means that certain regional mall located in
Monroe, Louisiana, more particularly described in EXHIBIT A6 attached hereto.
"PERMITTED EXCEPTIONS" means (a) real estate taxes and
assessments not yet due and payable, (b) exceptions to title that are approved
or deemed approved by Purchaser pursuant to Section 5.3, (c) the Liens securing
the Pecanland Loan or Temple Loan, as the case may be, and (d) any matters or
encumbrances arising by or through Purchaser or its agents, employees or
representatives.
"PERSON" shall mean an individual, a partnership, a
corporation, a trust, an unincorporated organization, a government or any
department or agency thereof or any other entity.
"PERSONALTY" means all moveable equipment, appliances,
machinery, furniture, furnishings, supplies, computer hardware and peripherals,
disks (including backup tapes and data), proprietary databases and programs and
other personal property located on or used in connection with the operation,
ownership or management of any Mall and owned by Seller or MRML.
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"PLANS" means the as-built drawings and specifications for all
buildings and improvements comprising any portion of the Real Property,
including, without limitation, the plans and specifications for all existing
renovations and improvements to any Mall and all rentable space and common areas
therein, any off-site improvements related to the Malls and as-built drawings
for all underground utilities.
"PRIOR SURVEY" means a survey of each Mall complying with the
requirements set forth in the definition of "Survey" set forth in this Section
1.1, except that it shall be dated within one (1) year prior to the Effective
Date and shall be subject to the provisos set forth in the first sentence of
Section 5.1(a) of this Agreement.
"PROPERTY" means (i) the Partnership Interests and (ii) the
Mall Assets.
"PURCHASE PRICE" means Three Hundred Sixteen Million and
No/100 Dollars ($316,000,000.00).
"PURCHASE PRICE ALLOCATION" means the portion of the Purchase
Price allocated to each Seller-Owned Mall or Partnership Interest as set forth
in the Schedule of Purchase Price Allocations attached hereto as EXHIBIT B.
"PURCHASER" means First Union Real Estate Equity and Mortgage
Investments, an Ohio business trust, having its business offices at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
"PURCHASER AFFILIATE" means any Affiliate of Purchaser.
"PURCHASER CLOSING DOCUMENTS" shall have the meaning set forth
in Section 6.3 hereof.
"PURCHASER INDEMNITEE" means each Purchaser Affiliate and each
agent, officer, director, trustee, servant or employee of either Purchaser or
any Purchaser Affiliate.
"PURCHASER'S NOMINEE" means such person as Purchaser shall
designate to receive title to any of the Mall Assets in accordance with Section
6.5, which conveyance shall occur simultaneously with or immediately after the
Closing as part of Purchaser's equity financing for the purchase of the
Property.
"PURCHASER'S POST-CLOSING COVENANTS" shall have the meaning
set forth in Section 12.4(b) hereof.
"REAL PROPERTY" means all of that certain land comprising the
Malls and any development tracts, outparcels or outlots relating to such Malls
owned or leased by any Owner, including the buildings and all other
improvements, structures, fixtures, parking area, facilities, installations,
non-movable machinery or equipment on the real property or used in connection
with the occupancy thereof (except to the extent of trade fixtures and equipment
owned by Tenants under the Leases or the Specialty License Agreements or owned
by other third parties), together with all easements, rights-of-way, strips and
gores, tenements, hereditaments and appurtenances, thereunto belonging or
appertaining and all right, title and interest of an Owner in and to any
streets, alleys, passages, common areas and other rights-of-
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way or appurtenances included in, adjacent to and used in connection with such
real property, before or after the vacation thereof, including, without
limitation, the easements, access rights and other rights provided in the
Reciprocal Easement Agreements.
"REA ESTOPPEL CERTIFICATE" means the estoppel certificate in
the form of EXHIBIT 6.2(j)(iii) attached hereto.
"RECIPROCAL EASEMENT AGREEMENTS" means all reciprocal easement
agreements, together with all modifications, amendments and supplements thereof
benefitting and/or burdening a Mall.
"RENT ROLL" means the rent roll for each Mall in the form set
forth in EXHIBIT C attached hereto, together with schedule(s), also set forth in
EXHIBIT C, setting forth (i) security deposits and (ii) minimum rent, breakpoint
and percentage rent factor for each Lease.
"RENTS" means all rents, including, without limitation, fixed,
minimum, percentage and overage rents, payable to Seller by any Party under a
Lease or Specialty License Agreement, but excluding Additional Charges.
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, the holder of the remaining
ten percent (10%) general partnership interest in Alexandria.
"▇▇▇▇▇▇▇ CONSENT" means the written consent of ▇▇▇▇▇▇▇ to the
transfer of the Alexandria Interest to Purchaser or Purchaser's Nominee.
"▇▇▇▇▇▇▇ INTEREST" means the ten percent (10%) general
partnership interest of ▇▇▇▇▇▇▇ in Alexandria.
"SELLER" means (a) with respect to ▇▇▇▇▇ ▇▇▇▇▇ Mall, Centrixx,
having a business address at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇; (b) for all other purposes, Marathon U.S. Realties,
Inc., a Delaware corporation, having its business offices at One Galleria Tower,
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇- 6678.
"SELLER AFFILIATE" means any Affiliate of Seller.
"SELLER CLOSING DOCUMENTS" shall have the meaning set forth in
Section 6.2 hereof.
"SELLER LEASE ESTOPPEL CERTIFICATE" means the Seller's
estoppel certificate in the form of EXHIBIT 6.2(j)(ii) attached hereto.
"SELLER INDEMNITEE" means each Seller Affiliate and each
agent, officer, director, partner, servant or employee of Seller or any Seller
Affiliate.
"SELLER-OWNED MALLS" shall mean Brazos Mall, Killeen Mall,
Mesilla Valley Mall, Park Plaza, Pecanland Mall, Shawnee Mall and ▇▇▇▇▇ ▇▇▇▇▇
Mall.
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"SELLER'S POST-CLOSING COVENANTS" shall have the meaning set
forth in Section 12.4(a) hereof.
"SHAWNEE MALL" means that certain regional mall located in
Shawnee, Oklahoma, more particularly described in EXHIBIT A7 attached hereto.
"SPECIALTY LICENSE AGREEMENTS" means all agreements or
licenses for a term of one (1) year or less for occupancy of space within a
Mall, but generally terminable at the Owner's option upon not more than sixty
(60) days notice, and any amendments, modifications or work letters related
thereto including those that may be made by an Owner after the Effective Date
but prior to Closing in accordance with the terms of this Agreement.
"SURVEY" means a survey of each Mall dated within sixty (60)
days prior to the Effective Date, prepared by a surveyor or civil engineer duly
licensed in the jurisdiction in which the Mall is located in accordance with the
standards adopted by the American Land Title Association and the American
Congress on Surveying and Mapping in 1992 known as the "Minimum Standard Detail
Requirements of Land Title Surveys", including Table A Optional Survey
Responsibilities and Specifications 1 through 4, 6, 8, 9, 10, 11 and 13. The
Surveyor's certification of the Survey shall run to Seller, the Partnership
(with respect to the Partnership Sites), Purchaser, Purchaser's Nominee, Title
Insurer and any lenders to Purchaser that Purchaser may designate in writing to
Seller not less than thirty (30) days prior to the Closing Date.
"TAXES" shall have the meaning set forth in Section 7.1(a)
hereof.
"TEMPLE" means Temple Mall Company, a Texas general
partnership, established pursuant to that certain Agreement of Partnership dated
October 19, 1973, as amended by Amendment No. 1 to Partnership Agreement dated
April 11, 1974, as further amended by Amendment No. 2 to Partnership Agreement
dated December 28, 1978, as further amended by Amendment No. 3 to Partnership
Agreement dated January 20, 1984, (said Agreement of Partnership, as amended, is
hereinafter referred to as the "TEMPLE PARTNERSHIP AGREEMENT"), in which Seller
owns a fifty percent (50%) general partnership interest, and which owns the
regional mall commonly known as Temple Mall located in Temple, Texas more
particularly described on Exhibit A8 of ("Temple Mall").
"TEMPLE INTEREST" means Seller's 50% general partnership
interest in Temple.
"TEMPLE LOAN" the existing mortgage loan encumbering the
Temple Mall payable to NML.
"TENANTS" means tenants, subtenants, concessionaires,
licensees and/or occupants under the Leases.
"THIRD PARTY CLAIM" shall have the meaning set forth in
Section 15.3(a) hereof.
"TIAA" means Teachers Insurance and Annuity Association.
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"TITLE COMMITMENT" means an ALTA Commitment issued by the
Title Insurer committing to the issuance of a Title Policy.
"TITLE INSURER" means First American Title Insurance Company,
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or any other nationally recognized title
insurance company designated by Seller and approved by Purchaser.
"TITLE POLICY" means a current ALTA Owner's Policy of Title
Insurance (Form B, 1992) or such other comparable form as is available in the
applicable jurisdiction issued by Title Insurer for each Mall dated the date and
time of Closing and with liability in the amount specified in Section 5.1,
insuring Purchaser or Purchaser's Nominee as owner of fee title to the
Seller-Owned Mall, Alexandria as owner of fee title to Alexandria Mall and
Temple as owner of fee title to Temple Mall (and with respect to the Partnership
Sites, showing Purchaser or Purchaser's Nominee as the named insured, with a
proportionate reduction exception as to the existing policies for Temple and
Alexandria) and with affirmative insurance as to all appurtenant easements
benefiting the Real Property, including, without limitation, those granted under
the Reciprocal Easement Agreement, subject only to the Permitted Exceptions
applicable to the Mall covered by such policy. Each Title Policy shall (a)
delete the standard or general exceptions from coverage (but may include an
exception relating to parties in possession under unrecorded Leases), (b)
contain a contiguity endorsement for each Mall that is comprised of more than
one parcel if available, (c) affirmatively insure the Purchaser's rights under
any Reciprocal Easement Agreements or other appurtenant easements that benefit
the Real Property, (d) contain a survey endorsement if available, (e) if such
endorsement is available, contain a zoning endorsement in the form of ALTA
Endorsement Form 3.1 (or equivalent endorsement approved by Purchaser), (f)
provide at Purchaser's expense for such coinsurance and direct access and such
other endorsements as Purchaser shall require, (g) as to Alexandria Mall and
Temple Mall, if Purchaser acquires the Partnership Interests therein rather than
fee title, contain a non-imputation endorsement if available, and (h) contain a
vehicular access endorsement if available.
"UPDATED RENT ROLL" means a rent roll (in the form of the Rent
Roll) certified for each Mall as true and correct by Seller as of a date not
later than ten (10) Business Days prior to the Closing Date.
"UPDATED SURVEY" shall have the meaning set forth in Section
5.1(b) hereof.
"▇▇▇▇▇ ▇▇▇▇▇ MALL" means that certain regional mall located in
Santa Fe, New Mexico, more particularly described in EXHIBIT A9 attached hereto.
"WHITE CONSENTS" means the written consent of the trustees
under the White Trusts to the transfer of the Temple Interest to Purchaser or
Purchaser's Nominee.
"WHITE INTERESTS" means the fifty percent (50%) general
partnership interest of the White Trusts in Temple.
"WHITE TRUSTS" means those certain related trusts that
collectively hold the remaining fifty percent (50%) general partnership interest
in Temple.
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"WITHHOLDING CERTIFICATE" shall have the meaning set forth in
Section 6.8.
1.2 GENDER AND NUMBER. Words of any gender shall include the
other gender and the neuter. Whenever the singular is used, the same shall
include the plural wherever appropriate, and whenever the plural is used, the
same shall also include the singular wherever appropriate. Without limiting the
generality of the foregoing, the plural form of any term that is defined in the
singular shall mean collectively all items so defined and the singular form of
any term that is defined in the plural shall mean singly each item so defined.
1.3 REFERENCES. All references in this Agreement to particular
sections, subsections or articles shall, unless expressly otherwise provided, or
unless the context otherwise requires, be deemed to refer to the specific
sections or articles in this Agreement. The words "herein", "hereof",
"hereunder", "hereinafter", "hereinabove" and other words of similar import
refer to this Agreement as a whole and not to any particular section, subsection
or article hereof.
1.4 ILLUSTRATIVE TERMS. Whenever the word "including",
"includes" or any variation thereof is used herein, such term shall be construed
as a term of illustration and not a term of limitation. For example, the term
"including" shall be deemed to mean "including, without limitation", and the
term "includes" shall be deemed to mean "includes, without limitation".
ARTICLE 2
AGREEMENT TO SELL
2.1 AGREEMENT. Upon and subject to the terms and conditions
contained in this Agreement, Seller agrees to sell (or cause to be sold) and
Purchaser agrees to purchase from Seller, the Property.
2.2 PURCHASE PRICE. The Purchase Price for the Property shall
be payable as follows:
(a) Within one (1) Business Day after the Effective Date,
Purchaser shall deposit with Escrowee the Deposit, by wire transfer of
immediately available funds, which, along with all interest or other earnings
accrued on such sum, shall serve as ▇▇▇▇▇▇▇ money for this transaction.
(b) The Balance of the Purchase Price shall be deposited by
Purchaser in escrow on or prior to the Closing Date in immediate, same-day
federal funds wired for credit into the escrow account established by Escrowee
for this transaction.
2.3 DEPOSIT. The Deposit shall be held by Escrowee pursuant to
the terms of the Escrow Agreement in the form of Exhibit 2.3 and shall be
invested by Escrowee in short term obligations of the U.S. Treasury. The
interest earned on the Deposit shall accrue to the benefit of the party to this
Agreement entitled to receive the interest on the Deposit pursuant to the terms
of this Agreement or the Escrow Agreement.
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ARTICLE 3
LENDER/PARTNER APPROVALS
3.1 ASSUMPTION. Subject to the terms and conditions of this
Agreement, including without limitation the provisions of this Article 3 and of
Article 11 relating to Lender and Partner Approvals and Purchaser's rights to
terminate under Article 4 and 5, the Mortgage Loan Documents that secure the
Pecanland Loan and the Temple Loan, respectively, shall be deemed to be
Permitted Exceptions. Seller shall assign its rights to Purchaser or Purchaser's
Nominee, and Purchaser or Purchase's Nominee shall assume Seller's obligations,
as to the Pecanland Loan pursuant to the terms and conditions of the Mortgage
Loan Assignment and Assumption Agreement.
3.2 LOAN BALANCES. Not less than fifty-five (55) days after
the Effective Date, Seller shall deliver to Purchaser a Lender Estoppel
Certificate from each Lender. In addition to the other requirements of the form
of Lender Estoppel Certificate attached hereto as EXHIBIT 6.2(j)(iv), the Lender
Estoppel Certificate shall include a statement of (i) the then outstanding
balance of each of the Pecanland Loan or the Temple Loan, as the case may be,
together with the amount of interest accrued thereon but not then paid, (ii) the
amount of all deposits or reserves referred to in Section 7.6 hereof held by
such Lender, if any, and (iii) the per diem interest charge for the period up to
and including the Closing Date. Notwithstanding the foregoing, in the event that
the Pecanland Mall is excluded from this transaction, no Lender Estoppel
Certificate shall be required for such Mall.
3.3 CONTINGENCY FOR LENDER APPROVAL. (a) The obligations of
the parties under this Agreement shall be contingent upon Seller obtaining, not
less than one (1) Business Day prior to the expiration of the Inspection Period,
written consent from TIAA to the transfer of Pecanland Mall to Purchaser or
Purchaser's Nominee and the assumption of the Pecanland Loan by Purchaser or
Purchaser's Nominee. If Seller is unable to obtain such written consent from
TIAA by such deadline, then Purchaser shall have the right, at its election
exercisable by written notice given within one Business Day after expiration of
the Inspection Period, to participate for an additional thirty (30) days after
such exercise, in further discussions or negotiations with TIAA to obtain such
consent, in which case the Closing Date shall be correspondingly extended. If
TIAA has not consented to the transfer and assumption by the Closing Date, as
extended, the Mall Assets with respect to Pecanland Mall shall be excluded from
the Property to be conveyed as part of the Closing, this Agreement shall not
terminate and the parties shall proceed to close on the sale of the remaining
Mall Assets and the Partnership Interests with a reduction in the Purchase Price
by an amount equal to the Purchase Price Allocation for Pecanland Mall.
Notwithstanding the foregoing, the parties shall continue in good faith to seek
consent from TIAA for a period of six (6) months after the Closing Date, and if
so obtained, Purchaser or Purchaser's Nominee shall purchase the Mall Assets
with respect to Pecanland Mall for the purchase price equal to the Purchase
Price Allocation applicable to Pecanland Mall, less the then outstanding
principal amount of the Pecanland Loan, but otherwise on the same terms and
conditions as are applicable to the other Seller-Owned Malls under this
Agreement. The closing of such purchase shall occur not more than thirty (30)
days after the parties obtain TIAA's consent to the transfer. In addition, if
TIAA does not consent to the transfer and assumption of Pecanland Mall by the
Closing Date, Seller agrees to enter into an agreement with Purchaser engaging
Purchaser or Purchaser's designated manager to manage and lease Pecanland Mall
on terms and conditions mutually acceptable to Purchaser and Seller, but such
management and leasing agreement shall be cancelable on thirty (30) days notice
by either
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party and shall be subject to the consent of TIAA. The provisions of this
Section 3.3(a) shall survive the Closing. As used in this Section 3.3(a) only,
the Inspection Period shall mean the initial sixty (60) day Inspection Period
without any extension as permitted under Section 4.3.
(b) The obligations of the parties under this Agreement shall
be contingent upon Seller obtaining written consent from NML to the transfer of
the Temple Interest to Purchaser or Purchaser's Nominee or, as the case may be,
the conveyance of the Temple Mall to Purchaser or Purchaser's Nominee as set
forth in Section 3.4(c) hereof. If Seller is unable to obtain such written
consent from NML prior to the Closing Date (or any extended Closing Date agreed
to by Purchaser and Seller), either Seller or Purchaser shall have the right to
exclude the Temple Interest from the Property to be transferred as part of the
Closing, this Agreement shall not terminate and the parties shall proceed to
close on the sale of the remaining Malls with a reduction in the Purchase Price
by an amount equal to the Purchase Price Allocation applicable to the Temple
Interest.
3.4 PARTNER APPROVALS. (a) The parties' obligations under this
Agreement with respect to the sale of the Alexandria Interest and the Temple
Interest are subject to Seller obtaining the Partnership Consents.
(b) As an alternative to obtaining the applicable Partnership
Consent, Seller may obtain the written agreement of ▇▇▇▇▇▇▇ and/or the White
Trusts for the purchase on the Closing Date by Seller of the ▇▇▇▇▇▇▇ Interest or
the White Interests, respectively. Purchaser agrees to cooperate with Seller in
negotiating any such agreements and in consummating any transaction agreed to by
Seller, Purchaser, and the seller(s) of such interest. Notwithstanding the
foregoing, the purchase price for the ▇▇▇▇▇▇▇ Interest shall not exceed Three
Million One Hundred Sixty-Seven Thousand and No/100 Dollars ($3,167,000.00) and
the purchase price for the White Interests shall not exceed Twelve Million Four
Hundred Thousand and No/100 Dollars ($12,400,000.00) less fifty percent (50%) of
the outstanding principal balance of the NML Loan on the Closing Date. The
purchase price for the ▇▇▇▇▇▇▇ Interest or the White Interests shall be in cash
unless Purchaser, Seller and the seller(s) of such interest mutually agree on
another form of consideration, such as, at Purchaser's option, shares of
Purchaser having a value equal to the applicable purchase price. If Purchaser
elects to permit the payment of the purchase price by issuing shares of
Purchaser's stock, such shares shall be issued on such terms and conditions as
Purchaser shall require, including, without limitation, the terms and conditions
contained in the form of the Shareholder Agreement attached as EXHIBIT 3.4(B)
hereto.
(c) In the event that ▇▇▇▇▇▇▇ and/or the White Trusts agree to
the sale of the ▇▇▇▇▇▇▇ Interest and/or the White Interests, Purchaser shall
purchase the ▇▇▇▇▇▇▇ Interest and/or the White Interests from Seller on the
Closing Date at a purchase price determined in the manner described in Section
3.4(b), or Purchaser shall have the right to elect to purchase, as part of the
Closing, the Mall Assets with respect to Alexandria Mall and/or the Mall Assets
with respect to Temple Mall directly from Alexandria or Temple, respectively,
rather than acquiring the Alexandria Interest and the ▇▇▇▇▇▇▇ Interest or the
Temple Interest and the White Interests, as the case may be. The parties
obligations with respect to the sale of the Mall Assets with respect to Temple
Mall and Purchaser's right to purchase the Mall Assets with respect to Temple
Mall shall be subject to Seller obtaining NML's written consent to the transfer
of the Temple Mall to Purchaser or Purchaser's Nominee prior to the Closing
Date. In the event that Purchaser makes such an election, (i) the Closing
Documents shall be modified so that documents identical in form to those
conveying the other Mall Assets are delivered with respect
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to the Mall Assets with respect to Alexandria Mall and/or Temple Mall, as
applicable, with the conveyance running to Purchaser or Purchaser's Nominee;
(ii) Seller shall assign Seller's rights, and Purchaser or Purchaser's Nominee
shall assume, Seller's obligations under the Temple Loan, which assignment and
assumption shall be in a form substantially similar to the Mortgage Loan
Assignment and Assumption and as approved by NML; and (iii) the Purchase Price
shall be increased by the purchase price for the White Interests or ▇▇▇▇▇▇▇
Interest, as the case may be, established pursuant to Section 3.4(b) hereof.
(d) In the event that Seller is unable to obtain both the
▇▇▇▇▇▇▇ Consent and the White Consents by the thirtieth (30th) day after the
Effective Date, then Purchaser shall have the right, at its election exercisable
by written notice given on or before the expiration of the Inspection Period, to
participate during the balance of the Inspection Period in further discussions
or negotiations with ▇▇▇▇▇▇▇ and/or the White Trusts to obtain such consent. If
both the ▇▇▇▇▇▇▇ Consent and the White Consents have not then been obtained,
Purchaser shall have the option, exercisable at any time during the Inspection
Period by written notice to Seller, to terminate this Agreement or, subject to
satisfaction of the other conditions to Closing, to proceed to Closing with all
of the Partnership Interests excluded from the sale of the Property, in which
event, the Purchase Price shall be reduced by the Purchase Price Allocation
applicable to the Partnership Interests. If Purchaser fails to notify Seller
during the Inspection Period that Purchaser elects to terminate, this Agreement
shall continue in full force and effect and Purchaser shall purchase the Mall
Assets on the Closing Date. If either the ▇▇▇▇▇▇▇ Consent or the White Consents
is obtained during the Inspection Period, the parties, subject to satisfaction
of the other conditions to Closing, shall proceed to Closing, with the
Partnership Interest as to which consent has not been obtained excluded from the
sale of the Property, and the Purchase Price shall be reduced by the Purchase
Price Allocation applicable to the excluded interest.
(e) If the White Consents are obtained during the Inspection
Period, but the trustees under the White Trusts do not elect to sell the White
Interests, then, in such event, Purchaser and Seller agree that the Purchase
Price Allocation applicable to the Temple Interest shall be increased by One
Million One Hundred Thousand and No/100 Dollars ($1,100,000.00) and Seller, at
Closing, shall assign to Purchaser or Purchaser's Nominee all of Seller's right,
title and interest and Purchaser or Purchaser's Nominee shall assume all of
Seller's obligations in, to and under the MUSRI Loan Documents pursuant to a
loan assignment and assumption agreement in a form and substance acceptable to
Seller and Purchaser.
3.5 PURCHASER'S NOMINEE. For purposes of the approvals by the
Lenders or the Partnership Consents referred to in this Article 3, Purchaser's
Nominee shall be the Joint Venture. Each request by Seller for such an approval
shall contemplate a transfer of the Property to either Purchaser or such Joint
Venture as Purchaser's Nominee.
ARTICLE 4
INSPECTIONS BY PURCHASER
4.1 PURCHASER'S INSPECTION PERIOD. Purchaser and its
engineers, surveyors, appraisers, attorneys, auditors and other agents or
representatives shall have the right during the Inspection Period at Purchaser's
sole cost and expense to inspect, examine, analyze, audit, survey, obtain
engineering inspections, conduct soil tests, environmental tests and inspections
of the Malls, examine, review and copy all Mall Information, the Office and
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Equipment Leases, examine, review and copy all records or files relating to the
Employees, the Benefit Plans or other employment matters relating to MRML, and
conduct such other tests, studies, reviews and inspections as Purchaser may
reasonably elect. Seller shall cooperate with Purchaser in conducting the
foregoing inspections and Seller shall make available to Purchaser at Seller's
Dallas, Texas office, all Mall Information reasonably requested by Purchaser.
Upon not less than twenty-four (24) hours prior written notice, Purchaser shall
have reasonable access to the Malls and the Mall Information wherever located
and shall be permitted to duplicate all or so much of the Mall Information
Purchaser deems appropriate. Seller shall cooperate with Purchaser and
facilitate Purchaser's inspection of the Malls and Mall Information and
Purchaser shall reimburse Seller for any reasonable out-of-pocket expenses
incurred by Seller, at Purchaser's request, in connection with Purchaser's due
diligence investigations. Prior to Closing, Seller shall deliver all Mall
Information to Purchaser at MRML's Dallas office and/or at the Malls, as the
case may be.
4.2 TERMINATION RIGHT. Notwithstanding anything in this
Agreement to the contrary, Purchaser may, in its sole discretion, elect to
terminate this Agreement during the Inspection Period if Purchaser is not
satisfied with the results of its due diligence review for any reason
whatsoever. Without limiting the foregoing, and notwithstanding any other
provision of this Agreement relating to Purchaser's presumed acceptance of the
Pecanland Loan or the Temple Loan as a Permitted Encumbrance, Purchaser may
elect to terminate this Agreement during the Inspection Period if it objects to
the terms and conditions of any Mortgage Loan Document, including, without
limitation, any modification thereto required as a condition to or in connection
with any consent to the transactions contemplated hereby that is required to be
obtained from a Lender pursuant to the terms of any Mortgage Loan Document. Such
election to terminate shall be exercisable by Purchaser's delivery to Seller of
a written notice of termination on or prior to the expiration of the Inspection
Period, as it may be extended pursuant to Section 4.3 hereof. The failure of
Purchaser to deliver to Seller the written notice of termination on or prior to
the expiration of the Inspection Period shall be deemed a waiver of Purchaser's
right to terminate this Agreement pursuant to this Section 4.2.
4.3 EXTENSIONS OF INSPECTION PERIOD. (a) The Inspection Period
shall also be extended, day-for-day, for each day that passes after the tenth
(10th) day after the Effective Date in which Purchaser has not received any
Survey, the Title Commitments or a copy of any matter of record reflected in the
Title Commitments, as and subject to the exceptions and provisos set forth in
Section 5.1.
(b) Purchaser shall have the right to further extend the
Inspection Period, as may be extended by Section 4.3(a) hereof, by an additional
period of thirty (30) days. The foregoing right to extend the Inspection Period
shall be exercisable by Purchaser's delivery to Seller of a written notice
electing to so extend the Inspection Period on or prior to the expiration of the
Inspection Period, as it may be extended by Section 4.3(a) hereof. If Purchaser
so elects to extend the Inspection Period, then the sum of One Million and
No/100 Dollars ($1,000,000.00) of the Deposit shall be non-refundable to
Purchaser in the event of termination of this Agreement for any reason other
than default by Seller.
4.4 INDEMNIFICATION BY PURCHASER. Purchaser agrees to repair
any material damage to the Malls, or to any office, room or other location owned
or leased by Seller or Seller's agents or representatives, caused by the entry
of Purchaser or any of Purchaser's agents, engineers, surveyors and other
representatives upon the Malls, or in any office, room
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or other location owned or leased by Seller or Seller's agents or
representatives, and Purchaser shall indemnify, defend and hold Seller and
Seller's Affiliates harmless from and against any and all Damages caused by or
resulting from any inspection, surveys, acts or omissions of Purchaser, its
agents, engineers, surveyors and other representatives while at the Malls or
while in any office, room or other location owned or leased by Seller or
Seller's agents or representatives. The provisions of this Section 4.4 shall
survive the Closing.
4.5 LIMITATIONS ON PURCHASER'S INSPECTIONS. Inspections of the
Malls by Purchaser and its agents shall in each case be subject to the
applicable Leases and Specialty License Agreements and conducted so as not to
unreasonably interfere with any Tenant's or licensee's quiet enjoyment of,
access to, use of, or business operations in, the Malls. Any inspections may be
observed by Seller or Seller's agents, including the Broker.
4.6 CONDITION OF PROPERTY. Purchaser acknowledges that neither
Seller nor any of its officers, directors, general or limited partners,
shareholders, agents, representatives or employees, nor the Broker, has made any
representation or warranty concerning the Property or the Partnership Sites
other than those representations and warranties of Seller expressly set forth in
this Agreement.
ARTICLE 5
TITLE AND SURVEYS
5.1 TITLE AND SURVEY. (a) Seller shall furnish to Purchaser,
for each Mall, a Survey (subject to 5.1(b)), a Title Commitment and copies of
matters of record reflected in each Title Commitment within ten (10) days after
the Effective Date (the "INITIAL SURVEY DELIVERY DATE"), subject to extension
due to delay on the part of the Title Insurer or surveyor; provided, however,
that Seller shall not be deemed to have failed to satisfy the foregoing Survey
delivery deadline if the sole omission from a Survey is the identification of
adjoining property owners or if any Purchaser Nominee or lender(s) to Purchaser
are not identified in the Survey certification; provided, further, however, that
the Inspection Period shall be extended due to any delay in providing such
adjoining property information beyond the thirtieth (30th) day after the
Effective Date and that Surveys certified to any such Purchaser Nominee or to
any such lender(s) shall be provided not later than the Closing Date. On the
Closing Date, Seller shall cause to be delivered to Purchaser the Title Policies
in the respective insured amount equal to the Purchase Price Allocation
applicable to each Seller-Owned Mall, and Partnership Interest and otherwise in
the form approved by the Purchaser pursuant to its review of title matters as
set forth below.
(b) Notwithstanding the provisions of Section 5.1(a),
Purchaser acknowledges that within ten (10) days after the Effective Date Seller
shall furnish to Purchaser a Prior Survey for each Mall, together with a
certification by Seller that there have been no material changes to the Real
Property relating to the Mall since the date of the Prior Survey that would
require a modification to the Prior Survey. Within thirty (30) days after the
Effective Date, Seller shall furnish to Purchaser a Survey as to each Mall
(subject to the provisions set forth in Section 5.1(a) hereof regarding
deliveries of Surveys certified to certain parties not later than the Closing
Date) (the "UPDATED SURVEY"). If one or more Updated Surveys discloses any title
matter that is not shown on the corresponding Prior Survey and that has a
material adverse effect on the title to or use of the Mall shown thereon, then
the Inspection Period shall be
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extended, day-for-day, for each day between the Initial Survey Delivery Date and
the date on which the last to be delivered of the Updated Surveys with a
discrepancy was delivered.
5.2 LIENS. Seller shall remove at or before Closing all Liens
on any of the Property, other than the Permitted Exceptions and the liens of the
Mortgage Loan Documents relating to the Pecanland Loan or the Temple Loan,
including, without limitation (a) all delinquent taxes, bonds and assessments
and interest and penalties thereon that are a Lien on the real property and (b)
all other Liens, whether or not shown on the Title Commitment, that are not
Permitted Exceptions. Seller shall be fully responsible for any fees, prepayment
premiums or penalties incurred in connection with the removal of all such Liens.
5.3 APPROVAL/DISAPPROVAL OF TITLE REVIEW. Purchaser has the
right to approve or disapprove the Title Commitments, the Surveys, the Lien
Searches and all items shown or referenced in any of them that are not Permitted
Exceptions, in the exercise of Purchaser's sole discretion, on or before the
expiration of the Inspection Period. If Purchaser disapproves any such condition
of title, Purchaser shall deliver to Seller a Disapproval Notice. If Purchaser
fails to give Seller a Disapproval Notice by the expiration of the Inspection
Period, Purchaser shall be deemed to have approved the Title Commitments, the
Lien Searches, the Surveys and all matters shown or referenced in any of them.
With respect to any Disapproved Title Matters, Seller shall notify Purchaser in
writing within ten (10) days after receipt of the Disapproval Notice whether
Seller will cause all or any Disapproved Title Matters to be removed or cured at
or prior to Closing, and Seller shall be deemed to have elected to remove or
cure all Disapproved Title Matters by Closing if Seller does not notify
Purchaser to the contrary in writing within such ten (10) day period. If Seller
elects not to remove or cure all Disapproved Title Matters with respect to any
particular Mall, Purchaser may elect, in its sole discretion, (a) subject to
satisfaction of the other conditions to Closing, to close the purchase of the
Mall in question, take title subject to the Disapproved Title Matter(s) that
Seller elects not to remove or cure and deduct from the respective Purchase
Price Allocation otherwise payable to Seller at Closing for the affected
Property(ies) all actual and direct costs incurred by Purchaser in connection
with its cure or removal up to a maximum of Fifty Thousand Dollars ($50,000.00)
as to each Disapproved Title Matter, (b) to terminate this Agreement only with
respect to such Mall, with the Purchase Price reduced by an amount equal to the
Purchase Price Allocation applicable to the Mall excluded or (c) to terminate
this Agreement, in which event the Deposit shall be returned to Purchaser. If
Seller elects to cure or remove any Disapproved Title Matter, then it thereafter
shall be obligated to do so as long as this Agreement is in effect. Seller shall
have thirty (30) days to remove or cure any Disapproved Title Matters that it
has elected to remove or cure (or deemed to have elected to remove or cure),
subject to extensions of such thirty (30)-day period as Purchaser, in its sole
discretion, may elect to grant to Seller. The Closing Date shall be extended as
necessary to permit the parties to exercise their respective rights and
obligations pursuant to this Section 5.3.
5.4 PURCHASER'S OPTIONS. If any Disapproved Title Matters that
Seller has elected to remove or cure (or deemed to have elected to remove or
cure) have not been removed at least five (5) days prior to Closing (as may be
extended pursuant to Section 5.3 hereof), or provision for their removal or cure
by Closing has not been made to Purchaser's satisfaction, Purchaser may elect,
in its sole discretion: (a) subject to satisfaction of the other conditions to
Closing, to close the purchase of the Mall in question, and take title subject
to any Disapproved Title Matters that have not been cured or removed at or
before Closing (provided that such election shall not release Seller from its
obligation to cure or remove Disapproved Title
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Matters after the Closing, which obligation shall survive the Closing); (b)
subject to satisfaction of the other conditions to Closing, to close the
purchase of the Mall in question, cure or remove the Disapproved Title Matters
that have not been cured or removed by Seller, and deduct from the respective
Purchase Price Allocation otherwise payable to Seller at Closing for the
affected Property(ies) all actual and direct costs, up to a maximum of Fifty
Thousand and No/100 ($50,000.00) as to each Disapproved Title Matter, incurred
by Purchaser in connection with its cure or removal of any Disapproved Title
Matters that Seller was obligated to cure or remove; (c) to terminate this
Agreement only with respect to such Mall and the Purchase Price shall be reduced
by an amount equal to the Purchase Price Allocation applicable to the Mall
excluded; or (d) to terminate this Agreement, in which event the Deposit shall
be returned to Purchaser.
5.5 ESCROW AND TITLE COSTS. Title insurance, survey and escrow
charges, transfer taxes and other closing costs shall be paid as follows, except
as otherwise expressly provided in this Agreement:
(a) The fees charged by Escrowee shall be divided equally
between Seller and Purchaser.
(b) Seller shall pay the cost of the Surveys, the cost of
securing the Title Commitments and the premium cost for the Title Policies
(including, as to endorsements, only the cost of the endorsements required
under the definition of Title Policy in Section 1.1 other than clause (f)
thereof).
(c) Purchaser shall pay the cost of any endorsements to the
Title Policies requested by Purchaser in addition to those required to be
provided by Seller pursuant to the definition of Title Policy in Section
1.1 including any costs arising under clause (f) thereof.
(d) Seller shall be solely responsible for the payment of any
real property transfer taxes, gains taxes levied or imposed upon Seller or
the Property as a result of the transfers to Purchaser or Purchaser's
Nominee, sales taxes levied or imposed upon Seller or the Property as a
result of the transfers to Purchaser or Purchaser's Nominee, documentary
stamps and other taxes, fees or charges imposed in connection with the
conveyance of any Mall Assets or the transfer of any Partnership Interests
but excluding any mortgage taxes or documentary taxes as to any of
Purchaser's financing documents and excluding any transfer taxes, gains
taxes, sales taxes, documentary stamps and other taxes arising from a
transfer to Purchaser's Nominee that would otherwise not be due upon a
transfer to Purchaser. Seller shall be required to pay any recording fees
or charges with respect to any instruments recorded in order to eliminate
Liens (except Permitted Exceptions) or Disapproved Title Matters, but
otherwise Purchaser, and not Seller, shall be responsible for the payment
of any other recording fees or charges. Purchaser shall pay the costs of
the Lien Search.
(e) At the Closing, and in addition to the delivery of any
required Closing Documents, Seller and Purchaser shall execute,
acknowledge and deliver such returns, questionnaires, certificates,
affidavits, declarations and other documents that may be required in
connection with the payment of transfer taxes, gains taxes, documentary
stamps, sales taxes and other taxes, fees or charges
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imposed by any governmental agency in connection with the transactions
contemplated hereby.
ARTICLE 6
CLOSING
6.1 CLOSING. Provided all conditions set forth in Sections
11.1 and 11.2 hereof have been either satisfied or waived, the Closing shall
take place on the Closing Date at the office of Seller, or such other date or
place as the parties shall agree.
6.2 SELLER CLOSING DOCUMENTS. On or before the Closing Date,
or, if a deadline is specified below, by such deadline, Seller shall deliver,
or, in the case of the Office and Equipment Leases, cause MRML to deliver,
directly to Purchaser or to the Escrowee, as is specified in Section 6.4 hereof,
two (2) executed originals (or four (4) counterparts, as the case may be, but
only one (1) executed original of each deed) of each of the following documents
for each Partnership Interest or for the Mall Assets with respect to each
Seller-Owned Mall, as the case may be (collectively, the "SELLER CLOSING
DOCUMENTS"):
(a) A resolution of the Board of Directors of each Seller,
certified by their respective Secretaries, authorizing the execution and
delivery of this Agreement, the Seller Closing Documents and the
consummation of the transactions contemplated hereby.
(b) An incumbency certificate certifying the authority of the
officers of each Seller executing this Agreement or any Seller Closing
Documents.
(c) Limited or Special Warranty Deeds transferring to
Purchaser or Purchaser's Nominee fee simple title to the Real Property
comprising each Seller-Owned Mall, subject only to the Permitted
Exceptions, in the form of the attached EXHIBIT 6.2(c).
(d) Bills of Sale, with limited warranty covenants,
transferring to Purchaser or Purchaser's Nominee all of the Personalty and
the Other Assets with respect to each Seller-Owned Mall and with respect
to any Personalty owned by MRML, in the form of EXHIBIT 6.2(d) attached
hereto.
(e) As to each Partnership Interest, four (4) counterparts of
the Assignment of Partnership Interests and of an Amendment to Partnership
Certificate.
(f) As to each Seller-Owned Mall, four (4) counterparts of the
Assignment of Leases.
(g) As to each Seller-Owned Mall, four (4) counterparts of the
Assignment of Contracts.
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(h) As to each Seller-Owned Mall, four (4) counterparts of the
Assignment of Reciprocal Easement Agreements.
(i) Four (4) counterparts of each Mortgage Loan Assignment and
Assumption Agreement, including, without limitation, any UCC filings
required in connection therewith.
(j) Except as otherwise provided below, not later than fifty
(50) days after the Effective Date, (i) Lease Estoppel Certificates from
the tenant under each Lease for an Anchor Store, and, in the case of each
Mall, from Tenants occupying at least eighty percent (80%) of all
non-anchor rented area of the Mall, subject to the last sentence of this
Section 6.2(j) (such non-anchor rented area for each Mall as of the
Effective Date being listed on EXHIBITS A-1 through A-9); (ii) a Seller
Lease Estoppel Certificate if and as provided in the last sentence of this
Section ; (iii) a REA Estoppel Certificates from each Party to a
Reciprocal Easement Agreement; (iv) a Lender Estoppel Certificate, not
later than fifty-five (55) days after the Effective Date, from each
Lender; and (v) a Partnership Estoppel Certificate executed by each
partner in the respective Partnerships other than Seller and having
attached thereto a set of the same partnership documents provided to
Purchaser by Seller pursuant to Section 6.2(l). A Seller Lease Estoppel
Certificate with respect to any Tenant shall expire and be of no force or
effect upon Purchaser's receipt of the Lease Estoppel Certificate from the
applicable Tenant consistent with the information set forth on the Rent
Roll and the Seller Estoppel Certificate. An Estoppel Certificate shall be
deemed to be in form and substance satisfactory to Purchaser if it is
executed by the applicable Tenant or other Party with the information
consistent with that set forth in the Rent Roll and if it is dated not
more than sixty (60) days before the Closing Date, provided that if
Purchaser extends the Inspection Period under Section 4.3(b), the
foregoing sixty (60) day limitation shall be extended to ninety (90) days.
If and to the extent that, despite Seller's compliance with Section 8.8
hereof, Seller does not obtain Lease Estoppel Certificates from Tenants
occupying at least eighty percent (80%) of all non-anchor rented area of
each Mall, and provided that Seller has delivered Tenant Estoppel
Certificates from Tenants occupying at least sixty percent (60%) of all
non-anchor rented area of the Mall, then Seller may satisfy the
requirements of Section 6.2(j)(ii) by delivering to Purchaser, not later
than fifty-five (55) days after the Effective Date, a Seller Lease
Estoppel Certificate as to Leases identified by Purchaser (which
identification Purchaser shall provide to Seller by fifty-two (52) days
after the Effective Date) and sufficient to result in Purchaser having
received Lease Estoppel Certificates plus Seller Lease Estoppel
Certificates as to eighty percent (80%) of such non-anchor rented area of
each Mall.
(k) Not later than five (5) Business Days before the Closing
Date, the Updated Rent Roll.
(l) Not later than five (5) Business Days before the Closing
Date, the execution copies of the Partnership Agreements or copies
thereof, certified by an officer of Seller.
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(m) A FIRPTA Affidavit, executed by Marathon U.S. Realties,
Inc.
(n) A Form 1099S, executed by Marathon U.S. Realties, Inc..
(o) All consents and approvals of the Lenders necessary
pursuant to Section 3.3, the Partnership Consents and all consents listed
on EXHIBIT 9.1(m).
(p) Legal opinion of Seller's counsel relating to the matters
set forth in Sections 9.1(g), (h) and (o)(i).
(q) Four (4) counterparts of each Assignment of Office and
Equipment Lease.
(r) Four (4) counterparts of the written notices (i) to each
Party to any Reciprocal Easement Agreement affecting the Seller-Owned
Malls advising it of the change of ownership and directing it to pay all
charges under its Reciprocal Easement Agreement for all periods from and
after the Closing Date as directed by Purchaser; (ii) to each Tenant in
the Seller-Owned Malls advising it of the change of ownership and
directing it to pay Rent and other charges under its Lease for all periods
from and after the Closing Date as directed by Purchaser; (iii) a general
notice to any Party to the Contracts relating to the Seller-Owned Malls
advising of the transfer and assignment of Seller's interest in the
Contracts to Purchaser and directing that future inquiries be made
directly to Purchaser; and (iv) to each landlord under an Office and
Equipment Lease advising of the transfer and directing that future
invoices and other notices be given directly to Purchaser.
(s) GAP Undertaking from Seller to the Title Company; subject
to the provisions of Section 8.7 hereof, any documentation required to be
executed by Seller and/or any other party in order to remove all Liens
required to be removed by Seller pursuant to the terms of this Agreement,
together with any fees, prepayment premiums, penalties or other funds
needed to accomplish such removal (the net proceeds of the Balance of the
Purchase Price payable to Seller pursuant to the Closing Statement may be
applied for this purpose); and any documentation required to be executed
by Seller with respect to any state, county, or local transfer taxes or
documentary taxes applicable to the conveyance of the Property pursuant to
this Agreement.
(t) Such other documents, instruments or agreements that
Seller may reasonably be required to execute and/or deliver on or prior to
Closing pursuant to any provision of this Agreement.
In addition, at or prior to the Closing, Seller shall also
deliver to, or at the direction of, Purchaser all keys, codes, files, computer
disks and software included in the Personalty, books, records, Lease files,
marketing materials, surveys, plans, specifications, or other written
information or documents relating to any of the Malls in Seller's possession and
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control and all security codes relating to any Property and any other Personal
Property or other Assets.
6.3 PURCHASER CLOSING DOCUMENTS. On or before the Closing
Date, Purchaser shall deliver, or cause FUMI to deliver, as applicable, directly
to Seller or to the Escrowee, as is specified in Section 6.4 hereof, two (2)
executed originals (or four (4) counterparts, as the case may be) of each of the
following documents for each Mall or Partnership Interest, as the case may be
(collectively, as the "PURCHASER CLOSING DOCUMENTS"):
(a) A resolution of the Board of Trustees of Purchaser,
certified by its Secretary, authorizing the execution and delivery of this
Agreement, the Purchaser Closing Documents and the consummation of the
transactions contemplated by this Agreement and a Resolution of the Board
of Directors of FUMI authorizing the execution and delivery of the
Documents to be executed and delivered by FUMI as contemplated by the
terms of this Agreement.
(b) Incumbency certificates certifying the authority of the
officers of Purchaser executing and delivering this Agreement or any
Purchaser Closing Documents, and of FUMI executing and delivering any
Purchaser Closing Documents, as applicable.
(c) Four (4) counterparts of the Assignment of Partnership
Interests and of an Amendment to Partnership Certificate.
(d) Four (4) counterparts of the Assignment of Leases.
(e) Four (4) counterparts of the Assignment of Contracts.
(f) Four (4) counterparts of the Assignment of Reciprocal
Easement Agreement.
(g) Four (4) counterparts of the Mortgage Loan Assignment and
Assumption Agreement, including, without limitation, any UCC filings
required in connection therewith.
(h) Legal opinion of Purchaser's counsel relating to the
matters set forth in Sections 9.3(a), (b) and (c).
(i) Four (4) counterparts of each Assignment of Office and
Equipment Lease.
(j) Four (4) counterparts of the written notices (i) to each
Party to any Reciprocal Easement Agreement affecting the Seller-Owned
Malls advising it of the change of ownership and directing it to pay all
charges under its Reciprocal Easement Agreement for all periods from and
after the Closing Date as directed by Purchaser; (ii) to each Tenant in
the Seller-Owned Malls advising it of the change of ownership and
directing it to pay Rent and other charges under its Lease for all periods
from and after the Closing Date as directed by Purchaser; (iii) a general
notice to any party to the Contracts assigned to Purchaser advising
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of the transfer and assignment of Purchaser's interest in the Contracts to
Purchaser and directing that future inquiries be made directly to
Purchaser; and (iv) to each landlord under an Office and Equipment Lease
advising of the transfer and directing that future invoices and other
notices be given directly to FUMI.
(k) Any documentation required to be executed by Purchaser
with respect to any state, county, or local transfer taxes or documentary
taxes applicable to the conveyance of the Property pursuant to this
Agreement.
(l) Such other documents, instruments or agreements that
Purchaser may reasonably be required to execute and/or deliver on or prior
to Closing pursuant to any provision of this Agreement.
6.4 OCCURRENCE OF CLOSING. Seller and Purchaser shall deposit
jointly with the Escrowee counterpart executed copies of the Limited or Special
Warranty Deeds, the Assignments of Leases, the Assignments of Reciprocal
Easement Agreements, the Mortgage Loan Assignment and Assumption Agreement and
any documentation required to be executed by Seller or Purchaser pursuant to
Section 6.2(s) or Section 6.3(k) and to be filed with any governmental office in
connection with the recording of any of the foregoing (the "FILING DOCUMENTS"),
and any funds required to be deposited by Seller pursuant to Section 6.2(s)
hereof (which may be by credit against the Balance of the Purchase Price),
accompanied by joint filing instructions setting forth the order of recording.
As provided in Section 2.2(b), Purchaser also shall deposit the Balance of the
Purchase Price with the Escrowee. The Closing shall be deemed to have occurred
upon the completion of the following:
(a) Delivery of the Filing Documents to the Escrowee;
(b) Delivery of the other Seller Closing Documents to
Purchaser and of the other Purchaser Closing Documents to Seller;
(c) Delivery by the Title Insurer to Purchaser of either (at
Purchaser's option) "proforma" policies of title insurance or "▇▇▇▇-ups"
of the Title Commitments, in either case, conforming to the requirements
of the Title Policies described in Section 1.1 hereof and having an
effective date of insurance as of the date of recording of the Filing
Documents to the Escrowee; and
(d) Delivery of the Balance of the Purchase Price by the
Escrowee to Seller.
6.5 TITLE TO PURCHASER'S NOMINEE. Purchaser may elect to have
title to any one or more Properties conveyed to any one or more of Purchaser's
Nominees. In each such instance, Purchaser shall, on or before the date that is
five (5) Business Days before the Closing Date, deliver to Seller a written
notice setting forth the name, tax mailing address, state of incorporation and
other relevant information regarding each such Purchaser's Nominee for a
particular Property. Any such Purchaser's Nominee shall agree in writing to be
bound by the terms and conditions of this Agreement as they relate to such
Property, but Purchaser shall in no event be released from any of its
obligations or liabilities hereunder.
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6.6 CLOSING COSTS. Closing costs shall be paid in accordance
with the provisions of Section 5.5 hereof.
6.7 FURTHER ASSURANCES. Seller and Purchaser agree that the
intent and purpose of the Closing Documents is to convey all of the right, title
and interest of Seller or any Seller Affiliate in any Property to Purchaser. In
addition to the acts and deeds recited herein and contemplated to be performed,
executed and/or delivered by Seller to Purchaser, Seller and Purchaser agree to
perform, execute and/or deliver or cause to be delivered, executed and/or
delivered at the Closing or after the Closing any and all further acts, deeds
and assurances as may be necessary to consummate the transactions contemplated
hereby and carry out the intent and purpose of this Agreement. The provisions of
this Section 6.7 shall survive the Closing.
6.8 FIRPTA WITHHOLDINGS. Purchaser shall withhold 10% of the
amount realized on the disposition of all Real Property owned by Centrixx, and
Purchaser shall remit such amount to the Internal Revenue Service in accordance
with Code Section 1445 and the Treasury Regulation thereunder, unless Centrixx
establishes to the reasonable satisfaction of Purchaser that no withholding or a
reduced amount of withholding is required under Code Section 1445 and Treasury
Regulations thereunder, in which case Purchaser shall withhold and remit to the
Internal Revenue Service, or if the Purchaser already has withheld, shall remit
to the Internal Revenue Service such amounts as set forth in a withholding
certificate for the Real Property of Centrixx transferred hereunder issued by
the Internal Revenue Service or the United States Secretary of the Treasury
("WITHHOLDING CERTIFICATE"). To the extent Purchaser has withheld an amount in
excess of that set forth in the Withholding Certificate, Purchaser shall remit
such excess amount to Centrixx .
ARTICLE 7
APPORTIONMENTS AND PAYMENTS
7.1 PRORATIONS. Subject to the provisions of Section 7.3
below, the items pertaining to the Malls that are identified in this Section
shall be prorated between the parties on a per diem basis (employing the actual
number of calendar days in the period involved and a 365-day year) so that
credits and charges with respect to such items for all days preceding and
including the Cutoff Date shall be allocated to Seller, and credits and charges
with respect to such items for all days after the Cutoff Date shall be allocated
to Purchaser. Each payment received shall be attributed to the most recent
period for which such a payment is due. On or before May 1, 1997, Purchaser
shall prepare and submit to Seller the Final Proration Statement, and the
parties shall make final adjusting payments indicated thereon, all as provided
in Section 7.4(b) hereof.
(a) UNREIMBURSED REAL ESTATE TAXES. Real estate taxes and
assessments, both general and special, that are levied or assessed upon the Real
Property as such taxes may be increased or decreased following Closing
("TAXES"), excluding (i) Taxes paid directly to the taxing authority by Tenants
or Parties to a Reciprocal Easement Agreement or Specialty License Agreement,
and (ii) Taxes reimbursable to the Owner of the Real Property by Tenants thereof
or Parties to a Reciprocal Easement Agreement or Specialty License Agreement
with respect thereto, shall be prorated as of the Cutoff Date. If the Cutoff
Date occurs prior to issuance of the tax ▇▇▇▇ for the fiscal tax year in which
the Cutoff Date occurs, Purchaser and Seller shall
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initially prorate Taxes for such tax year based upon the most recently received
tax ▇▇▇▇, and subsequently adjust such proration when the Taxes for such tax
year are officially determined.
(b) FIXED RENT AND FIXED CHARGES. Rents, other than percentage
or overage rents, together with other fixed or separately invoiced charges
thereunder and/or pursuant to the Reciprocal Easement Agreements, shall be
prorated as of the Cutoff Date.
(c) COMMON AREA CHARGES. Certain of the Leases and Specialty
License Agreements provide for reimbursement to the landlord thereunder of
certain expenses relating to common areas ("COMMON AREA EXPENSES"), including,
but without limitation, the expenses of operating and maintaining certain
improvements located on the Real Property, including exterior parking, roadways,
landscaping, sidewalks and other areas provided for the common use or benefit of
Tenants, Parties to Specialty License Agreements and their patrons, as well as
insurance, real estate taxes, heating and cooling charges, and various services
with respect thereto including the management and administration thereof, which
may be computed as a percentage of other costs of operating and maintaining the
common areas (the "ADMINISTRATIVE FEES"). Common Area Expenses are determined on
an annual basis, but the anticipated amount thereof may be estimated and paid in
monthly or other installments of the estimated amount during the course of the
year with a final adjustment made after the close of the year when such costs
and expenses have been finally determined. Seller and Purchaser have agreed as
follows with respect to Common Area Expenses:
(i) Except as hereinafter provided, Seller shall be
responsible for all Common Area Expenses through the Cutoff Date, and
shall be entitled to retain reimbursements thereof collected through the
Cutoff Date and to receive reimbursements therefor collected after the
Cutoff Date, up to the aggregate amount of such Common Area Expenses for
which Seller is responsible. Purchaser shall be responsible for all Common
Area Expenses after the Cutoff Date and shall be entitled to receive and
retain all remaining reimbursements of Common Area Expenses collected from
Tenants or Parties to Specialty License Agreements with respect thereto
after payment to Seller of reimbursements for periods prior to the Cutoff
Date.
(ii) Upon issuance of the Final Proration Statement referred
to in Section 7.4(b) hereof:
(Y) Seller shall pay to Purchaser the amounts (if any)
received by Seller on account of Common Area Expenses that is in
excess of those amounts to be paid by Seller as Common Area Expenses
as hereinabove provided; and/or
(Z) Purchaser shall pay to Seller any deficiency in the
reimbursement of Common Area Expenses to which Seller is entitled as
hereinabove provided.
(iii) The Final Proration Statement referred to in Section
7.4(b) hereof, shall show the total Common Area Expenses for the year in
which the Cutoff Date occurs, the amount thereof paid by Seller and by
Purchaser, respectively, and the reimbursements thereof received by Seller
and Purchaser, respectively, all as hereinabove provided, with a separate
computation showing the amount of the Administrative Fees
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allocable to Purchaser and Seller. Seller shall be entitled to that
portion of the total Administrative Fees actually collected for such year
as is determined by multiplying such total by a fraction the numerator of
which shall be the Common Area Expenses incurred by Seller with respect to
such year, and the denominator of which shall be the total Common Area
Expenses for such year. Purchaser shall be entitled to the remaining
portion of the Administrative Fees.
(d) REIMBURSED TAXES AND INSURANCE. Taxes or insurance
premiums that are reimbursed by Tenants under their Leases and/or by Parties to
Specialty License Agreements or under Reciprocal Easement Agreements shall be
prorated in the same manner as is provided in Section 7.1(c)(i) and (ii) above
with respect to Common Area Expenses.
(e) PERCENTAGE RENT. Percentage rent payable under the Leases
and Specialty License Agreements shall be prorated as of the Cutoff Date as
follows:
(i) Any percentage rent which is attributable to a lease year
as defined in each Lease or Specialty License Agreement (a "LEASE YEAR")
ending on or before the Cutoff Date shall be retained by Seller or
promptly paid over to the Seller if received by Purchaser.
(ii) Percentage rent payable with respect to a Lease Year
during which the Cutoff Date occurs, shall be apportioned between
Purchaser and Seller as and when received for such Lease Year as follows:
(Y) For Tenants or Parties to Specialty License Agreements
that report sales on a monthly basis, Seller shall be entitled
to that part of their percentage rent that is the aggregate
of:
(1) the sum determined by multiplying the total percentage
rent for such Lease Year by a fraction, the numerator of which
is the total sales prior to the month in which the Cutoff Date
occurs, and the denominator of which is the total sales for
such Lease Year, and
(2) for the month in which the Cutoff Date occurs, the sum
obtained by multiplying the percentage rent due for such month
by a fraction, the numerator of which is the number of days in
such month through and including the Cutoff Date, and the
denominator of which is the number of days in such month.
Purchaser shall be entitled to the remainder of such
percentage rent.
(Z) For Tenants or Parties to Specialty License Agreements that
report sales only on an annual basis, Seller shall be entitled to
percentage rent determined by multiplying the total percentage rent
for such Lease Year by a fraction, the numerator of which shall be
the total number of days in such Lease Year through and including
the Cutoff Date, and the denominator of which shall be the number of
days in such Lease Year. Purchaser shall be entitled to the
remainder of such percentage rent.
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The final amount of the foregoing allocations of percentage rent to Seller shall
be paid by Purchaser to Seller as provided in Section 7.4(b) hereof. Purchaser
agrees, upon Seller's request, to provide Seller with those statements of
monthly or annual gross sales received from Tenants or Parties to Specialty
License Agreements with respect to any Lease Year in which the Cutoff Date
occurs.
(f) VENDOR LICENSE PAYMENTS. All amounts collected or payable
for the admission to or use of any facilities comprising the Property, including
but not limited to the operation of storage, vending or other coin-operated
machines, shall be prorated as of the Cutoff Date.
(g) [Intentionally omitted]
(h) SALES TAXES. Sales, excise and similar taxes that have
been collected by Seller but that will be payable in whole or in part to
governmental authorities by Purchaser after Closing (other than such taxes, if
any, as result from the transfer of any part of the Property to Purchaser upon
Closing), shall be prorated as of the Cutoff Date.
(i) FUELS AND UTILITIES. To the extent not covered under
Section 7.1(c), utility and fuel charges, including, without limitation, charges
for water, electricity, gas, gasoline, steam, oil and telephones used in
connection with the heating, cooling, lighting, maintenance and operation of the
Property, shall be prorated as of the Cutoff Date.
(j) MERCHANT ASSOCIATION FUNDS AND EXPENSES. Contributions
held by an Owner for or as, or to be made by an Owner to, any merchants'
association or promotional fund established with respect to any Mall, and the
cost to such Owner of providing services to any such association or fund, shall
be prorated as of the Cutoff Date.
(k) PROMOTIONAL EXPENSE. Prepaid costs incurred by an Owner
for advertising and promotion of a Mall that has not yet occurred, to the extent
reimbursement therefor is not to be received from Tenants, shall be prorated as
of the Cutoff Date.
(l) PERMIT AND LICENSE FEES. Annual or other periodic fees for
permits and licenses required in connection with the operation of any part of
the Property shall be prorated as of the Cutoff Date to the extent that
Purchaser succeeds Seller as the permittee or licensee thereunder and is not
required to obtain new permits and/or licenses in its own name.
(m) CONTRACTS. Except to the extent reimbursable by Tenants or
by Parties to Specialty License Agreements or Reciprocal Easement Agreements,
payments to be made under any Contract that is to be assigned to and assumed by
Purchaser upon Closing shall be prorated as of the Cutoff Date.
(n) INTEREST EXPENSE. Current interest payable under the
Temple Loan and the Pecanland Loan shall be prorated as of the Cutoff Date.
Seller shall pay all past due interest, and all other fees, penalties and other
charges or costs due to each Lender, whether in connection with a Lender's
consent to the transfer of the Mall, or the transfer of the Temple Interest or
otherwise.
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(o) RECIPROCAL EASEMENT AGREEMENTS. Charges and payments, if
any, under the Reciprocal Easement Agreements not otherwise covered under
Section 7.1(a), (b) and (d) shall be prorated as of the Cutoff Date. Seller
shall pay all past due amounts required to be paid by a Seller under any
Reciprocal Easement Agreement. If any amount currently due to or payable by
Seller under a Reciprocal Easement Agreement is not known as of the Closing
Date, then a proration shall be made by the parties based on a reasonable
estimate of such amount and the parties shall adjust the proration when the
actual amount becomes known.
(p) [Intentionally omitted]
(q) OTHER EXPENSES. Except to the extent reimbursable by
Tenants or Parties to Reciprocal Easement Agreements or Specialty License
Agreements, or the subject of other express provision of this Agreement, all
other reasonable and necessary expenses, customary in connection with the
operation and maintenance of the Property and requiring payments for any period
in which the Cutoff Date occurs shall be prorated between Seller and Purchaser
as of the Cutoff Date.
(r) NO PRORATION OF CERTAIN TAXES. The parties have agreed
that Seller will not give Purchaser a credit for those Taxes that any Tenant or
Party to a Specialty License Agreement or Reciprocal Easement Agreement is
obligated by its Lease, Specialty License Agreement or Reciprocal Easement
Agreement to pay directly to the taxing authority.
7.2 ADJUSTMENTS. The following amounts, if any (the
"Adjustments"), without duplication, shall be paid or credited by Seller to
Purchaser upon Closing:
(a) SECURITY DEPOSITS. Tenant Security deposits which are held
by Seller as of the Closing Date. The Updated Rent Roll for each Mall shall
include a schedule setting forth the unapplied portion of any security deposits
relating to such Mall. To the extent such security deposits have been paid or
credited to Purchaser, Purchaser agrees to indemnify and hold Seller harmless
from any claim by the depositing Tenant for the return thereof.
(b) DEPOSITS FOR SPACE PREPARATION. Payments made to Seller by
or on behalf of any Tenant for the preparation or alteration of any space to be
occupied by such Tenant.
7.3 COLLECTION. To the extent that any sum to be received
pursuant to any Lease, Specialty License Agreement a Reciprocal Easement
Agreement, whether as Rent, percentage rent, or as reimbursement of Common Area
Expenses or any other item to be reimbursed thereunder, is past due on the
Cutoff Date (hereinafter collectively referred to as "DELINQUENCIES"), then (i)
Seller shall receive no credit therefor at Closing, and (ii) all payments, of
any kind, received by Purchaser after Closing from Tenants or Parties to
Specialty License Agreements or Reciprocal Easement Agreements with
Delinquencies still outstanding shall, as between Purchaser and Seller, be
applied first to installments of Rent, Common Area Expenses, Taxes and/or
percentage rent due from such Tenant or Parties to Specialty License Agreements
or Reciprocal Easement Agreements for any period following Closing, next to the
reasonable costs, if any, incurred by Purchaser in collecting payments of
Delinquencies from such Tenant or from Parties to Specialty License Agreements
or Reciprocal Easements Agreements and last paid to Seller with respect to the
Delinquencies due from such Tenant or Party to Specialty License Agreements or
Reciprocal Easement Agreements. Purchaser shall
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promptly remit to Seller all sums received by Purchaser after Closing to which
Seller is entitled pursuant to the foregoing provisions. Purchaser shall use
reasonable efforts to collect the Delinquencies; provided, however, that
Purchaser may, but shall not be obligated to, commence any litigation against
any Tenant or other Party from whom Delinquencies are due, incur any expenses
(other than the expense of routine billing), or terminate a Lease, Specialty
License Agreement or Reciprocal Easement Agreement. Purchaser shall not be
liable to Seller for any Delinquencies (unless collected) and shall not have any
obligation to collect any Delinquencies. Reasonable collection costs, including,
without limitation, reasonable attorneys' fees, shall be charged against the
amount of any Delinquencies that are collected.
7.4 CLOSING AND FINAL PRORATION STATEMENTS. In connection with
the foregoing prorations and adjustments, Seller and Purchaser shall prepare or
cause to be prepared, the following statements:
(a) CLOSING STATEMENT. Seller shall prepare and deliver on the
Closing Date a proration statement in reasonable detail showing each item
prorated, allocated or adjusted in accordance with this Article 7, in such form
as fairly reflects such prorations, allocations and adjustments to the
reasonable satisfaction of Purchaser and Seller, such form to be agreed upon by
Purchaser and Seller within forty-five (45) days following the Effective Date
(the "CLOSING STATEMENT"). The Closing Statement delivered at Closing shall be
certified by an officer of Seller as being accurate and complete and in
accordance with the provisions of this Article 7, and to correctly present the
prorations, allocations and adjustments to be made in accordance with the
requirements of this Article 7.
(b) FINAL PRORATION STATEMENT. On or before May 1, 1997,
Purchaser shall submit to Seller a final proration statement consistent with the
form of the Closing Statement, prepared as of the Cutoff Date but employing
information available as of April 1, 1997, and certified by an officer of
Purchaser as being accurate and complete and in accordance with the provisions
of this Article 7, and to correctly present the final prorations and adjustments
to be made in accordance with the requirements of this Article 7, and as to any
amounts for which final information is not available as of April 1, 1997,
employing an estimate agreed to by Purchaser and Seller in their reasonable
judgment (the "FINAL PRORATION STATEMENT"). Upon issuance of the Final Proration
Statement, the parties shall make such final proration payments as are thereby
indicated to be due. Following the Seller's receipt of the Final Proration
Statement, Purchaser agrees to allow Seller, its accountants and
representatives, to examine those books and records in the possession and
control of Purchaser which relate to the Final Proration Statement for a period
of one (1) year following issuance thereof, at the place or places where they
are then regularly maintained, during regular business hours and upon reasonable
prior notice to Purchaser, and to discuss the subject matter thereof with
Purchaser's employees and accountants. Purchaser agrees to retain such books and
records for one (1) year following issuance of the Final Proration Statement,
and in the event of an examination thereof that is commenced during such period
by Seller, then for such additional period as is reasonably necessary to permit
completion thereof and the resolution of any dispute in connection therewith.
7.5 UTILITIES. Seller shall cooperate with Purchaser in the
transfer of electricity, gas, water, sewer and other utility services for the
Seller-Owned Malls from the name of the current Owner to the name of Purchaser
as of the Closing Date. Seller shall also assign to Purchaser any deposits held
by a utility company with respect to any such utility services for the
Seller-Owned Malls and Purchaser shall pay to Seller the amount of any deposits
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so assigned. Seller shall pay or cause to be paid all utility bills for charges
that have been rendered for any Mall prior to the Cutoff Date.
7.6 RESERVES AND DEPOSITS. Purchaser shall pay to Seller the
amount of any reserves, escrow deposits or accruals made with, or held by, a
Lender or any insurance carrier for capital repair or replacement reserves, real
property taxes and assessments, insurance premiums, excess retention escrows
with any insurance carriers, and/or other items. As of the Closing, and
contingent upon the occurrence of the Closing, Seller hereby assigns to
Purchaser all of Seller's right, title and interest in and to any such reserves,
escrow deposits and accruals if any.
7.7 CONSTRUCTION ALLOWANCES. Responsibility for construction
allowances and other tenant inducements and for leasing commissions shall be
allocated as provided in Section 8.1.
7.8 PRORATION OF TEMPLE AND ALEXANDRIA. If a Partnership
Interest is transferred to Purchaser pursuant to the provisions of Section 3.4
hereof, the net prorations and adjustments calculated pursuant to this Article 7
for Alexandria Mall shall be multiplied by ninety percent (90%), and those for
Temple Mall shall be multiplied by fifty percent (50%).
7.9 SURVIVAL. The provisions of this Article 7 shall survive
the Closing.
ARTICLE 8
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
8.1 CONDUCT OF BUSINESS PRIOR TO CLOSING DATE. Prior to
Closing, Seller covenants and agrees as follows:
(a) Seller shall comply with (or cause to be complied with)
all material terms of all Leases, Contracts, Specialty License Agreements,
Partnership Agreements, Reciprocal Easement Agreements, Office and
Equipment Leases and any other agreements, instruments and easements
applicable to the Malls, and timely pay (or cause to be paid) all taxes,
assessments, utility charges and other costs and expenses relating to the
Malls.
(b) Seller shall operate and manage (or cause to be operated
and managed) each Mall in the ordinary course of business in accordance
with Seller's past practice, but subject to the terms of this Agreement,
and in accordance with all applicable permits, licenses, approvals or
Laws, maintain in full force and effect through the Closing Date all
material licenses, all permits (including, without limitation, all
building permits and occupancy permits) and all easements and
rights-of-way that are required in order to continue the present use of
each Mall and ensure adequate vehicular and pedestrian ingress and egress
to each Mall, such that on the Closing Date, each Mall shall be in at
least as good a state of condition and repair as on the Effective Date,
reasonable wear and tear and damage by fire or other casualty excepted,
subject to the provisions of Article 10. Without limiting the generality
of the foregoing, Seller shall spend, at a minimum, such amounts for
repair and maintenance as are consistent with its
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prior practice. Seller shall promptly advise Purchaser in writing of any
significant repair or improvement required to keep a Mall in such
condition. During the Inspection Period, Seller shall not make any
alterations to any Mall which would materially adversely affect the Mall.
After the expiration of the Inspection Period, Seller shall not make any
material alterations to any Mall, or remove any of the Personalty
therefrom, without Purchaser's prior written consent, unless such
Personalty so removed is simultaneously replaced with new Personalty of
similar quality and utility.
(c) Seller shall, at its sole reasonable cost and expense, and
upon request from Purchaser given by the end of the Inspection Period,
terminate any Contracts identified by Purchaser to be terminated, which
termination shall be effected on or prior to the Closing Date to the
extent feasible and, if such termination cannot be effected on or prior to
the Closing Date by reason of the terms of any Contract which require
advance notice, Seller shall deliver notice of termination, which
termination shall become effective as early as possible under the terms of
the applicable Contract. Except with Purchaser's prior written consent,
Seller shall not enter into any Material Contract that will be an
obligation affecting Purchaser or any Mall subsequent to the Closing,
except for arms-length, market rate Contracts with unaffiliated parties in
the ordinary course of business that can be terminated upon not more than
sixty (60) days notice.
(d) Except with Purchaser's prior written consent, Seller
shall not, nor permit MRML or any other Seller Affiliate to, (i) enter
into any contract of employment with any Employee; (ii) grant any
increases in the rates of pay, salaries, or other compensation of any
Employees or any increase in the other benefits to which such Employees
are presently entitled, other than scheduled increases for management
employees consistent with Seller's compensation policies, regular wage
increases for employees paid on an hourly basis made in the ordinary
course of business, as required by law and/or consistent with prior
practice; or (iii) defer any portion of the compensation of any Employee
beyond the date such compensation would have been paid in the ordinary
course of business and consistent with prior practice.
(e) Prior to the Closing, Seller shall pay, or otherwise
provide for the payment of, in a manner reasonably acceptable to
Purchaser, all obligations for leasing commissions,construction allowances
and other tenant inducements incurred in connection with Leases and
Specialty License Agreements for which Seller has issued approval prior to
the date of this Agreement. Purchaser shall be responsible for and shall
pay in full, on the Closing Date, without credit from Seller, all leasing
commissions with respect to Leases and Specialty License Agreements which
are approved or deemed approved, or for which approval is not required
under the terms of this Agreement, subsequent to the date of this
Agreement and in accordance with the terms of this Agreement including
Purchaser's right to approve any Lease during the Inspection Period
pursuant to Section 8.2. Purchaser shall be responsible for and shall pay,
on or after the Closing Date, without credit from Seller, construction
allowances and other tenant inducements owed to Tenants under Leases or
Specialty License Agreements which Purchaser has approved or is deemed to
have approved pursuant to
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Section 8.2 of this Agreement, or for which approval is not required under
the terms of this Agreement.
(f) All federal, state, county and municipal taxes and
assessments and other governmental or quasi governmental levies of any
kind that relate to the Property or the operation of the Malls that are
required to be paid prior to the Cutoff Date shall be paid through the
Cutoff Date either in cash or by credit in favor of Purchaser as otherwise
provided in Article 7 hereof.
8.2 LEASING.
(a) Prior to the expiration of the Inspection Period, Seller
shall not enter into, amend, terminate or waive any rights under any Material
Leases or Material Contracts without Purchaser's prior written consent, which
consent shall not be unreasonably withheld or delayed. If and to the extent that
Purchaser does not deny a request for such consent by notice given to Seller
within two (2) Business Days after Purchaser's receipt of Seller's request
therefor, Purchaser shall be deemed to have provided such consent. In any event,
copies of the foregoing shall be provided to Purchaser prior to expiration of
the Inspection Period. Notwithstanding the foregoing, Seller shall have the
right at any time to exercise any or all of its legal remedies against any
Tenant who is in default under its Lease or Specialty License Agreement
(including, without limitation, the right to commence unlawful detainer or
eviction actions), provided Seller shall not following the expiration of the
Inspection Period seek to terminate any Lease or Specialty License Agreement or
any tenant's right of possession under any Lease or Specialty License Agreement
without Purchaser's written consent, which consent may be withheld in
Purchaser's sole discretion, and which shall be deemed given if Purchaser does
not deny a request for such consent by notice given to Seller within two (2)
Business Days after Purchaser's receipt of Seller's written request therefor.
(b) After the expiration of the Inspection Period, Seller
shall not enter into any New Lease, New Contract or New Specialty License
Agreement or amend, modify, terminate or waive any rights under any existing
Lease, Contract or Specialty License Agreement without Purchaser's prior written
consent, which consent may be withheld in Purchaser's sole discretion. Purchaser
shall review, and in Purchaser's sole discretion, either approve or disapprove
in writing, a written proposal from Seller for a New Lease or New Specialty
License Agreement (a "LEASE PROPOSAL") or for termination of an existing Lease
or Specialty License Agreement (a "TERMINATION PROPOSAL") within four (4)
Business Days after receipt of such Lease Proposal or Termination Proposal. If
Purchaser fails to deny a request for such consent to a Lease Proposal or
Termination Proposal within four (4) Business Days after receipt thereof,
Purchaser shall be deemed to have approved such Lease Proposal or Termination
Proposal. With respect to each Lease or Specialty License Agreement, Seller
shall utilize the standard form lease, specialty license agreement or lease
modification, as the case may be, then in use at the Mall provided, however,
that without Purchaser's consent Seller shall have the right to make such
modifications in said standard form which are consistent with modifications
generally made by Seller in the ordinary course of leasing space at the Malls.
Following approval or deemed approval of any Lease Proposal, Purchaser shall
have the right to review and approve any final form of Lease, Specialty License
Agreement or lease modification that Seller intends to execute; provided,
however, that Purchaser shall not be permitted to reject any Lease, Specialty
License Agreement or lease modification for which Purchaser approved the Lease
Proposal and which is prepared on the standard form lease,
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specialty license agreement or lease modification, as the case may be, then in
use at the Mall with only such modifications in said standard form which are
consistent with modifications generally made by Seller in the ordinary course of
leasing space at the Malls.
(c) Not later than the earlier of four (4) Business Days after
entering into same or two (2) days prior to the Closing Date, Seller shall
provide Purchaser with copies of all Leases, Specialty License Agreements and
lease amendments, modifications or terminations executed by Seller after the
Effective Date and prior to the Closing Date.
(d) Any request for a consent under this Section 8.2 shall
include a copy of all proposed actions and a statement of all material facts
relating thereto (including, without limitation, the amount of the leasing
commissions payable with respect thereto).
8.3 INSURANCE POLICIES. EXHIBIT 8.3 attached hereto is a
schedule of all insurance policies currently in effect with respect to any Mall.
Seller agrees to maintain or cause to be maintained the Insurance Policies in
effect through the Closing Date. Purchaser shall secure its own insurance with
respect to the Property and Seller shall have the right to terminate the
Insurance Policies effective on the Closing Date. Any unearned premiums and the
unabsorbed portions of any deposits with respect to the Insurance Policies shall
belong solely to the Seller. Seller shall have the right, at its sole cost and
expense, to renew or replace insurance policies that expire prior to the Closing
Date, provided that the policy limits are the same as, or greater than, those
set forth in EXHIBIT 8.3.
8.4 MANAGEMENT OFFICE AND EMPLOYEES. (a) Seller or MRML, as
the case may be, shall assign, and Purchaser shall cause FUMI to assume, the
obligations of Seller or MRML, as the case may be, under the Office and
Equipment Leases. Purchaser shall cause FUMI to enter into an agreement
concerning the employees of MRML in the form attached hereto as EXHIBIT 8.4.
(b) Effective as of the Closing Date, Seller shall cause MRML
to terminate the Employees, all of whom are employees of MRML.
(c) Notwithstanding the provisions of Section 8.4(b), in the
event that an Employee who accepts an offer of employment from FUMI ceases to be
employed by FUMI or a Purchaser Affiliate during the three (3) month period
beginning on the Closing Date under circumstances which would otherwise entitle
him to a severance benefit under the terms of either the Marathon Realty
Management Limited Special Severance Program (Salaried Employees) or the
Marathon Realty Management Limited Special Severance Program (Hourly Employees)
(as in effect as of the Effective Date of this Agreement) if he were then
employed by MRML and had not been employed by FUMI or a Purchaser Affiliate,
Seller shall or shall cause MRML to pay such severance benefit to such Employee.
In the event such an Employee who accepts an offer of employment from FUMI
ceases to be employed by FUMI or a Purchaser Affiliate after the three (3) month
period beginning on the Closing Date, but before the end of the six (6) month
period beginning on the Closing Date, Purchaser shall cause FUMI to pay any
severance benefit due to such Employee under the foregoing benefit programs, and
in the event such an Employee ceases to be employed by FUMI or a Purchaser
Affiliate after the six (6) month period beginning on the Closing, Date,
Purchaser shall cause FUMI to pay any severance benefit as shall be determined
under arrangements then maintained in effect by FUMI. The provisions of this
Section 8.4(c) shall survive the Closing.
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(d) Notwithstanding any provision of this Agreement to the
contrary, nothing in this Agreement shall confer upon any Employee the right to
continue for any definite term in the employ of FUMI or any Purchaser Affiliate
or, subject to any existing employment contracts, understandings or other
agreements expressly assumed by FUMI, shall interfere with or restrict in any
way the rights of FUMI to discharge any Employee at any time for any reason,
with or without cause. Seller shall pay, or cause to be paid, all wages,
salaries and benefits, including, but not limited to, amounts reflecting accrued
vacation owed by Seller or any Seller Affiliate to the Employees at the Closing
Date and in compliance with applicable laws. The provisions of this Section
8.4(d) shall survive the Closing.
(e) Seller shall provide or cause MRML to provide health plan
continuation coverage in accordance with and if required by COBRA with respect
to Employees who do not accept an offer of employment from FUMI and those former
employees of Seller or MRML and other qualified beneficiaries who are entitled
to such continuation coverage by reason of events prior to the Closing Date. The
provisions of this Section 8.4(e) shall survive the Closing.
8.5 POSSESSION. Seller shall deliver possession of the
Property to Purchaser upon the completion of the Closing, subject to the rights
of Tenants under the Leases and licensees under the Specialty License
Agreements.
8.6 MANAGEMENT INFORMATION SYSTEMS. Purchaser agrees that
Seller shall retain all software licenses necessary to comply with licensing
requirements. Following the Closing Date, Seller agrees to use its best efforts
to provide to Purchaser access to the data contained in Seller's management
information systems on disk form or otherwise permit access to Seller's software
for the purpose of the conversion of such data to Purchaser's management
information systems. Purchaser acknowledges that Seller's parent currently
outsources the management information system through an IBM subsidiary and that
Purchaser shall pay the reasonable costs of continuing such service post-Closing
until Purchaser completes its conversion of such data.
8.7 MORTGAGE RELEASES. Seller covenants and agrees to obtain
the release of any mortgages or other security instruments affecting the Malls,
other than Temple and Pecanland. Prior to the Closing, Seller shall request that
the parties holding such mortgage or other security interests deposit releases
of such instruments into escrow with the Escrowee. With respect to any releases
not so received prior to Closing, Seller shall secure the same and cause the
same to be recorded within one hundred and twenty (120) days following the
Closing Date.
8.8 LEASE/ESTOPPEL CERTIFICATES. Seller agrees to request the
Lease Estoppel Certificates from each of the Tenants or other parties
contemplated thereby as soon as reasonably possible following the Effective Date
and to use its best efforts to obtain the Lease Estoppel Certificates within the
time frame set forth in Section 6.2(j), and shall deliver copies of the Lease
Estoppel Certificates directly to Purchaser by telecopy on the day they are
respectively received by Seller, with copies delivered by overnight express
courier transmission to Purchaser at least once each week. For purposes of this
Section 8.8, best efforts shall not require commencement of litigation or
payments of money to secure estoppels.
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8.9 GUARANTY. Seller agrees to cause 2685752 CANADA, INC., a
Canadian corporation (the "Guarantor") which is an affiliate of Seller, to
deliver to Purchaser, simultaneously with the execution and delivery of this
Agreement, a Guaranty in the form attached to this Agreement. The parties agree
that, in any instance in which this Agreement terminates by its terms, with a
distribution of the Deposit pursuant to its terms, the Guaranty likewise shall
be returned to the Guarantor. In addition, within five (5) Business Days after
the Effective Date, Seller shall deliver to Purchaser a pro forma balance sheet
and operating statement of the Guarantor, the review of which shall be included
in Purchaser's due diligence.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 SELLER'S REPRESENTATIONS AND WARRANTIES. Seller makes the
following representations and warranties for the benefit of Purchaser, with the
understanding that such representations and warranties are material and are
being relied upon by Purchaser in entering into this Agreement.
(a) REAL PROPERTY. The Owners do not own any land in addition
to the land described on EXHIBITS A1 through A9 which is contiguous to any Mall
or located in the immediate vicinity of any Mall (e.g., located across a public
roadway) or otherwise related to any Mall. Seller has not entered into, and to
Seller's best knowledge, no predecessor in interest or title to Seller has
entered into, any unrecorded or undisclosed easement, liens or option agreements
that would have a material adverse effect on title to the Property.
(b) CONTRACTS. EXHIBIT 9.1(b) contains a description of all
Contracts entered into by or on behalf of an Owner in connection with the
management, maintenance or operation of such Mall. Except for the Contracts,
there are no other agreements to which an Owner is party or, to Seller's best
knowledge, by which it or any Mall or the Property is bound that may affect the
current use, operation or enjoyment of any Mall. Each Owner has performed all
the material obligations required to be performed by it under the Contracts, and
to Seller's best knowledge, no other parties to any of the Contracts are in
default of a material term thereunder. Except as set forth on EXHIBIT 9.1(b),
all of the Contracts can be terminated by the Owner who is a party thereto at
its option upon not more than thirty (30) days' prior written notice without
premium or penalty of any kind.
(c) LEASES. The information contained in the Rent Roll and
Updated Rent Roll is true, correct and complete, Seller has delivered to
Purchaser true, correct and complete copies of all of the Leases and the
Specialty License Agreements and there are no leases, occupancies, tenancies,
licenses or, to Seller's best knowledge, written subleases, in effect pertaining
to any portion of a Mall, and no persons, tenants, licensees or entities occupy
space in the Property, except as stated in the Rent Roll or the Updated Rent
Roll. There are no options or rights to renew, extend or terminate the Leases or
the Specialty License Agreements, or expand any leased or licensed premises,
except as shown in the Rent Roll or the Updated Rent Roll or as set forth in the
Leases or Specialty License Agreements. Except as disclosed by the Rent Roll,
the Updated Rent Roll or EXHIBIT 9.1(c): (i) the Leases and the Specialty
License Agreements and any guaranties thereof are in full force and effect and
no Rents or other payments, or other deposits, are held by an Owner except the
security deposits described on the
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Rent Roll or Updated Rent Roll and prepaid Rent for the current month; (ii) each
Owner is the sole owner of the landlord's or licensor's interest in the Leases
and the Specialty License Agreements; (iii) as of the Closing Date, except for
the Pecanland Loan and the Temple Loan, no Rents due under, or other interest
in, any of the Leases or the Specialty License Agreements will have been
assigned to any party other than Purchaser or otherwise pledged or encumbered in
any way; (iv) neither the landlord nor, to Seller's best knowledge, any Tenant
or licensee is in default under any Lease or Specialty License Agreement, nor,
except as disclosed in EXHIBIT 9.1(c), has Seller received any written notice
from any Tenant or licensee of any default under its Lease or Specialty License
Agreement or of any Tenant or licensee's termination of its Lease or Specialty
License Agreement in advance of the scheduled expiration date of its Lease or
Specialty License Agreement (except as disclosed in the Lease Estoppel
Certificates); (v) all of the improvements to be constructed by an Owner, if
any, contemplated under the Leases or the Specialty License Agreements or as
required therein or in any collateral agreement, plans or specifications
respecting the Leases or Specialty License Agreements have been fully completed
and paid for; and (vi) to Seller's knowledge, the Partnerships have no business
relationship with any Tenant or licensee other than that of landlord and Tenant
or licensee and no Partner owns ten percent (10%) or more of any Tenant or
licensee. EXHIBIT 9.1(c)(i) includes a list of all retail stores located within
a Mall having a floor area in excess of twenty thousand (20,000) square feet,
and including any combination of retail stores at a single Mall owned or
controlled by the same parent company and having an aggregate floor area in
excess of such amount which is under a single Lease.
(d) RECIPROCAL EASEMENT AGREEMENTS. The Reciprocal Easement
Agreements are in full force and effect. Each Owner is in compliance with all
its material obligations under all such agreements. To Seller's best knowledge,
all other parties to the Reciprocal Easement Agreements are in compliance with
all of their material obligations under the respective agreements.
(e) PERSONAL PROPERTY OTHER ASSETS; AND OFFICE AND EQUIPMENT
LEASES. Each Owner owns good title to the Personalty and Other Assets relating
to its Mall, free and clear of all Liens other than the Permitted Exceptions. To
Seller's knowledge, except as listed on EXHIBIT 9.1(e), Owner owns no material
Personal Property or Other Assets which are either located within or used in
connection with the Mall.
(f) OFFICE AND EQUIPMENT LEASES. EXHIBIT 9.1(f) contains a
description of all Office and Equipment Leases entered into by or on behalf of
Seller or MRML connection with the management, operation, leasing or maintenance
of any Mall. Except for the Office and Equipment Leases, there are no other
office and/or equipment leases to which Seller or MRML is a party that is
currently utilized in the management or operation of any Mall. Neither Seller,
MRML nor, to Seller's best knowledge, any party is in default under the terms of
any Office and Equipment Lease.
(g) SELLER'S AND AFFILIATES' AUTHORITY. Seller has been duly
formed and is validly existing and Seller has the full right and authority and,
subject to Section 9.1(m) hereof, has obtained any and all corporate consents
required to enter into this Agreement, consummate or cause to be consummated the
sale and make or cause to be made transfers and assignments contemplated herein;
the persons signing this Agreement on behalf of Seller are authorized to do so;
and this Agreement and all of the documents to be delivered by Seller at
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the Closing have been authorized and properly executed and will constitute the
valid and binding obligations of Seller, enforceable against Seller in
accordance with their terms.
(h) PENDING ACTIONS. Except as set forth in EXHIBIT 9.1(h),
Seller has not received written notice of any suit, action or proceeding pending
against Seller or any part of the Malls, and to the best of Seller's knowledge,
there are no suits, actions or proceedings threatened against Seller or any part
of the Malls which, if determined adversely to Seller, would have a material
adverse affect on any Mall.
(i) CONDEMNATION. Except as set forth on EXHIBIT 9.1(i)
attached hereto, Seller has not received written notice of any pending or
proposed condemnation or eminent domain proceedings affecting the Malls.
(j) PHYSICAL CONDITION OF THE IMPROVEMENTS. To Seller's best
knowledge, except as disclosed on EXHIBIT 9.1(j), there are no material
structural defects in the buildings located on the Real Property. Seller has
made available to Purchaser all Plans commissioned by Seller and all other Plans
in Seller's possession or control.
(k) LICENSES. The Owner of each Mall has all material
licenses, permits (including, without limitation, all building permits and
occupancy permits), easements and rights-of-way which are required for the
present use of the Mall.
(l) [Intentionally omitted.]
(m) CONSENTS/BULK SALES NOTICE. Except as set forth on EXHIBIT
9.1(m), and except for the Lender consents pursuant to Section 3.3 and the
Partnership Consents, no approval, consent, waiver, filing, registration or
qualification with any third party, including, but not limited to, any
governmental bodies, agencies or instrumentalities is required to be made,
obtained or given for the execution, delivery and performance of this Agreement
or any of the Closing Documents by Seller. To Seller's knowledge, there is no
bulk sales notice required in connection with the transfer to Purchaser of the
Property. Without limiting the foregoing, the Seller and Purchaser agree to
waive the applications of all bulk sales laws; provided, further, that Seller
indemnifies and holds Purchaser harmless from and against any actual and direct
loss, cost, expenses, and liabilities from failing to comply with any bulk sales
law.
(n) LOANS. EXHIBIT 9.1(n) attached hereto sets forth the
outstanding principal balance of each of the MUSRI Loan, the Temple Loan and the
Pecanland Loan and contains a complete list of the MUSRI Loan Documents and the
Mortgage Loan Documents. Seller or Temple, as the case may be, is in compliance
with their respective material obligations under the Mortgage Loan Documents. To
Seller's best knowledge, the Lenders under the Mortgage Loan Documents and the
borrower and lender under the MUSRI Loan Documents each are in compliance with
all of their respective material obligations thereunder.
(o) NO VIOLATION. Except for consent requirements under the
Partnership Agreements and the Mortgage Loan Documents, none of the execution,
delivery or performance of this Agreement by Seller does or will, (i) violate,
conflict with or constitute a default under any term or condition of (A) the
organizational documents of Seller or the Partnerships or any other agreement to
which Seller or the Partnerships is a party or by which they are bound, or (B)
any terms or provision of any judgment, decree, order, statute, injunction, rule
or regulation
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of a governmental unit applicable to Seller or the Partnerships or any agreement
to which Seller or the Partnerships is a party or by which they or their assets
are bound; or (ii) result in the creation of any Lien or other encumbrance upon
the Partnership Interests, the assets or properties of Seller or the
Partnerships, except as created by this Agreement.
(p) PARTNERSHIPS:
(i) ORGANIZATION; AUTHORITY. Each Partnership is a general
partnership duly formed and existing under the laws of the
jurisdiction of its formation.
(ii) OWNERSHIP OF THE PARTNERSHIP INTERESTS. The Partnership
Interests constitute Seller's entire and only ownership interest in
the Partnerships. Seller is the legal and beneficial owner of the
Partnership Interests free and clear of all mortgages, liens,
options, rights of first refusal, claims, encumbrances and other
security arrangements or restrictions of any kind. Seller has not
granted any outstanding rights to purchase the Partnership Interests
and Seller is not a party to any agreement, arrangement or
understanding restricting or otherwise relating to the transfer or
voting of the Partnership Interests, except for agreements in the
Partnership Agreements and the Mortgage Loan Documents.
(iii) ABSENCE OF UNDISCLOSED LIABILITIES AND CONTRACTUAL
OBLIGATIONS. Except for liabilities disclosed in the Partnership
Financial Statements or arising in the ordinary course of business
since the date of the Partnership Financial Statements, the
Partnerships have no material undisclosed liabilities of any nature,
whether matured or unmatured, fixed or contingent, regardless of
whether the disclosure thereof would otherwise be required by GAAP,
under circumstances whereby any such liabilities could or would
following the Effective Date hereof remain with such Partnership and
that would have, individually or in the aggregate, a material
adverse effect upon such Partnership, except for the Leases, the
Temple Loan, the MUSRI Loan, the Reciprocal Easement Agreements, the
Contracts, and/or the Specialty License Agreements and any other
disclosed liabilities.
(iv) [Intentionally omitted]
(v) LITIGATION. Except as disclosed in EXHIBIT 9.1(p)(v),
there are no actions, suits, proceedings, judgments, orders, decrees
or investigations pending, or, to the Seller's best knowledge,
threatened in writing before any court, governmental unit or any
arbitrator with respect to any of the Partnerships or their assets
that, if adversely determined, could adversely affect the
Partnerships, the Partnership Interests, or the purchase of the
Partnership Interests by Purchaser.
(vi) TRANSFER TAXES. To Seller's knowledge, there are no
transfer taxes payable, accruing or otherwise arising out of the
transfer of the Partnership Interests to the Purchaser.
(q) TAXES. There are no pending real estate tax challenges,
complaints or actions with respect to real estate or personal property taxes or
assessments for any of the
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Malls except as set forth on EXHIBIT 9.1(q) attached hereto. To Seller's
knowledge there are no outstanding or unpaid federal, state or local taxes or
tax assessments that relate to the Property which are delinquent against any
Owner that could become a lien against any of the Property.
(r) LAWS. Except as disclosed in EXHIBIT 9.1(r), to Seller's
knowledge, the buildings and improvements located upon the Malls and the current
use and operation thereof are in material compliance with all Laws, and, to
Seller's knowledge, the buildings and improvements located upon the Malls are in
material compliance with all covenants, conditions, or restrictions affecting
the Malls. Seller has not received written notice alleging any violation of
applicable zoning or subdivision laws, and Seller has not applied for and has
not received written notice of any application for rezoning or other change in
applicable land use laws, ordinances or resolutions that could adversely affect
the use, operation or enjoyment of any Mall. There are no agreements between an
Owner and any governmental authorities, agencies, utilities or
quasi-governmental entities that affect the Malls, except those agreements that
are identified in the Title Commitment, disclosed by the Survey or described in
EXHIBIT 9.1(r).
(s) UTILITIES. To Seller's knowledge, all utility services,
water supply, storm and sanitary sewer facilities, telephone lines and fire
protection facilities required by law or for the normal operation of the Malls
are (i) available at the property lines of the Real Property from public
rights-of-way, (ii) connected to the Malls with valid permits, and (iii) in good
working order and repair.
(t) FINANCIAL STATEMENTS. The Financial Statements, the Rent
Roll and the Updated Rent Roll furnished to Purchaser in connection with or
pursuant to this Agreement (i) accurately reflect the financial condition of the
Malls or Seller, as the case may be, as of the date thereof, (ii) were prepared
on behalf of Seller in accordance with GAAP and in the ordinary course of
business, (iii) the Financial Statements do not fail to state any material
liability contingent or otherwise, the omission of which would be misleading or
material in nature as of the Closing Date and (iv) there have been no material
adverse changes in the financial condition of the Property or Seller from that
shown in the Interim Financial Statements.
(u) ENVIRONMENTAL. Except as disclosed to Purchaser in those
certain environmental reports listed on EXHIBIT 9.1(u): (i) to Sellers'
knowledge, no underground storage tanks have ever been or are located in any
part of the Property; (ii) other than standard office and janitorial supplies
and pesticides used in landscaping, all of which are stored at the Malls by
Seller only in such amounts as are customary for such uses, to Seller's
knowledge, no Hazardous Substances have been introduced by Seller or are present
at the Malls; (iii) to Seller's knowledge, the Property has been used in
compliance with all environmental laws and requirements imposed by any
applicable governmental authority and Owner has not brought onto the Malls any
Hazardous Substance; (iv) to Seller's knowledge there are no lawsuits or other
proceedings initiated by any governmental agency or any other entity regarding
the environmental condition of the Malls or the presence or disposal of
Hazardous Substances at the Malls and neither Seller, any Owner nor, to Seller's
best knowledge, any Tenant of a Mall has received any written notice of
violation issued pursuant to any Law pertaining to environmental conditions with
respect to a Mall or any use or condition thereof.
(v) EMPLOYEE BENEFITS. Attached hereto as EXHIBIT 9.1(v) is an
Employee Benefits List that identifies each Benefit Plan. Except as identified
in the Employee Benefit List,
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none of the Benefit Plans is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA. All of the Benefit Plans and related trusts, if any, are
in form and have been administered in substantial compliance with all Laws,
including, without limitation, ERISA, the Code and COBRA. Except as described in
the Employee Benefits List, Seller and its Affiliates are not obligated to pay
any additional amounts to or pursuant to any Benefit Plan or related trust. No
employees of Seller or MRML participate in any "multiemployer pension plan"
within the meaning of the Multiemployer Pension Plan Amendment Act of 1980, as
amended, and Seller and MRML do not have any liability under ERISA for any
complete or partial withdrawal from any such multiemployer plan. None of the
Property is currently subject to any lien or pledge as security, whether
perfected or unperfected, in favor of the PBGC, the Internal Revenue Service, or
any Benefit Plan arising under Title IV of ERISA, Section 306 of ERISA, or
Section 412 of the Code, and to Seller's best knowledge, no facts or
circumstances exist which would subject the Property to any such lien or pledge
in the future. The consummation of the transactions contemplated by this
Agreement do not present a material risk to Seller or MRML of incurring a
liability under such Title IV other than liability for premiums due the PBGC.
Except as described on the Employee Benefits List, no Benefit Plan provides
benefits, including without limitation, death or medical benefits (whether or
not insured), with respect to Employees beyond their retirement or other
termination of service (other than (i) coverage mandated by applicable law, (ii)
death benefits or retirement benefits under any "employee pension benefit plan,"
as that term is defined in Section 3(2) of ERISA or (iii) benefits the full cost
of which is borne by the Employee (or his or her beneficiary)). Except as
described on the Employee Benefits List, the consummation of the transaction
contemplated by this Agreement will not (i) entitle any Employee to severance
pay, unemployment compensation, or any other payment, benefit, or award, or (ii)
accelerate or modify the time of payment or vesting, or increase the amount of
any benefit, award, or compensation due any Employee. No "leased employee," as
that term is defined in Section 414(n) of the Code, performs services for Seller
or MRML. Seller will make available to Purchaser as part of the Mall Information
true and correct copies of, and included in EXHIBIT 9.1(v) is a listing of, all
of the Employee Benefit Plans, the most recent determination letters from the
Internal Revenue Service with respect thereto, the most recent annual reports
(Form 5500 and the schedules thereto), the most recent summary plan descriptions
and the most recent actuarial valuations, if any.
(w) EMPLOYEES. EXHIBIT 9.1(w) contains a complete and correct
list of the names of all of the current Employees (including Employees on
authorized leaves of absences), including their titles and their date of hire,
and Seller has delivered to Purchaser's general counsel a certificate stating
their salaries or hourly compensation and any bonuses received or granted in the
last twelve (12) months. None of such Employees has a contract of employment for
a definite term. There are no collective bargaining agreements or other
agreements or arrangements of any kind with, or recognition of, a union or
employee association of any kind with respect to any of the Employees. There are
no government contracts or subcontracts to which Seller or any Seller Affiliate
is subject that impose affirmative action obligations upon Seller or any Seller
Affiliate with respect to employment practices. With respect to any Employee,
there are: (i) no actions at law, suits in equity, administrative claims,
charges or complaints or investigations, pending or to Seller's knowledge
threatened, against Seller, any Seller Affiliate or MRML arising under any laws
governing employment, the employer employee relationship, the terms and
conditions of employment or employment practices; (ii) no matters, including but
not limited to investigations, hearings or appeals, involving Seller, any Seller
Affiliate or MRML are pending or to Seller's knowledge threatened before the
National Labor Relations Board, the Equal Employment Opportunity Commission, the
United
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States Department of Labor or any state or federal agency charged with
responsibility for labor or civil rights standards or violations; (iii) no
citations, fines or penalties heretofore have been asserted or are pending
against Seller or MRML relating to health and safety in its work places and to
Seller's knowledge none is threatened; and (iv) no matters involving Seller, any
Seller Affiliate or MRML are currently before any arbitrator, mediator or
conciliator in respect to the employer employee relationship or any of its
employees or former employees, except as set forth on EXHIBIT 9.1(w) hereto.
(x) DOCUMENTS. To Seller's knowledge, all of the documents and
Mall Information that have been delivered or made available to Purchaser by or
on behalf of Seller, (a) are true, correct and complete copies of what they
purport to be and (b) have not been modified, except as set forth therein.
(y) [Intentionally omitted]
(z) ALL ASSETS. The Property constitutes all of the assets
used by Owner to operate its Mall in the manner in which it is currently being
operated.
9.2 SELLER'S KNOWLEDGE DEFINED. Whenever the terms "Seller's
knowledge," "Seller's best knowledge" or terms of similar import are used in
this Agreement, they shall mean (a) the actual knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇, the
Senior Vice President of Seller; ▇▇▇▇▇▇ ▇▇▇, the Vice President, Property
Operations; ▇▇▇▇▇ ▇▇▇▇▇▇, Regional Manager; ▇▇▇▇ ▇▇▇▇▇▇▇, Regional Manager; and
▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate Facilities Manager; whom Seller represents and warrants
are individuals who have the requisite knowledge regarding the condition,
management, leasing and operation of the Malls, after making an independent,
diligent investigation of all matters that are the subject of the
representations and warranties made by Seller in this Agreement. In order to
meet the criteria of an independent, diligent investigation as of the Effective
Date, the named individuals shall review all necessary or appropriate files, and
review and discuss the contents of all of Seller's representations and
warranties with appropriate officers and employees of Seller (but without any
obligation to hire any third party experts or consultants). In order to meet the
criteria of an independent, diligent investigation as of the Closing Date, the
named individuals shall review and discuss the contents of all of Seller's
representations and warranties with the persons described in the immediately
preceding sentence and property managers and Mall managers not more than five
(5) days before the Closing Date, and shall perform such additional and
follow-up inspections and inquiries as they deem reasonably necessary.
9.3 PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser
makes the following representations and warranties for the benefit of Seller
with the understanding that such representations and warranties are material and
are being relied upon by Seller in entering into this Agreement.
(a) PURCHASER'S AUTHORITY. Purchaser has been duly formed, is
validly existing and is in good standing (to the extent applicable), and
Purchaser has the full right and authority and has obtained any and all
corporate consents required to enter into this Agreement, consummate or cause to
be consummated the purchase and accept the transfers and assignments
contemplated herein; the persons signing this Agreement on behalf of Purchaser
are authorized to do so; and this Agreement and all of the documents to be
delivered by Purchaser at the
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Closing have been or will be authorized and properly executed and will
constitute the valid and binding obligations of Purchaser, enforceable against
Purchaser in accordance with their terms.
(b) PENDING ACTIONS. There is no action or proceeding pending
against Purchaser, and to Purchaser's knowledge, there are no actions or
proceedings threatened against Purchaser which, if determined adversely to
Purchaser, would have a material adverse affect on Purchaser or Purchaser's
ability to consummate the transactions contemplated under the terms of this
Agreement.
(c) NO VIOLATION. None of the execution, delivery or
performance of this Agreement by Purchaser does or will violate, conflict with
or constitute a default under any term or condition of (i) the organizational
documents of Purchaser or any other agreement to which Purchaser is a party or
by which they are bound, or (ii) any terms or provisions of any judgment,
decree, order, statute, injunction, rule or regulation of a governmental unit
applicable to Purchaser or any agreement to which Purchaser is a party or by
which they or their assets are bound.
(d) CLOSING FUNDS. Purchaser has available sufficient funds or
financing commitments, in combination with the Equity Funds, to close the
transaction contemplated in this Agreement, or will arrange for sufficient funds
on or prior to the Closing Date, so as to permit the Closing of this
transaction. Purchaser acknowledges that Purchaser's obligation to close this
transaction is not contingent upon Purchaser obtaining such financing.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by Seller and Purchaser in this Agreement
shall be deemed to be remade as of the Closing Date and shall survive the
Closing for a period of eighteen (18) months after the Closing Date, and there
shall be no liability for breach of any representation or warranty in this
Agreement unless written notice of a claim specifying in reasonable detail the
claimed breach is delivered to the other party within such eighteen (18)-month
period. The foregoing limitations shall not apply to the warranties and
covenants as to title and ownership set forth in the limited or special warranty
deeds or bills of sale relating to any of the Real Property, the Personalty or
the Other Assets.
ARTICLE 10
DAMAGE OR DESTRUCTION - CONDEMNATION
10.1 NOTICE. (a) In the event of any damage to or destruction
or condemnation of any Mall or any portion thereof prior to Closing that Seller
reasonably believes would require repairs at a cost in excess of Fifty Thousand
Dollars ($50,000.00), Seller shall send written notice to Purchaser of such
occurrence within five (5) days after the date of such occurrence (the "DAMAGE
NOTICE"). Not later than fifteen (15) days after Seller's delivery to Purchaser
of the Damage Notice, Purchaser shall determine, and shall notify Seller in
writing, whether a Material Part of the Mall has been damaged, or whether such
taking or threatened taking has affected or will affect a Material Part of the
Mall. For purposes of this Article 10, Purchaser may determine that a "Material
Part" of the Mall has been damaged or taken if:
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(i) An Anchor Store would have the right to terminate any
Reciprocal Easement Agreement or its Lease, as applicable, as a result
thereof;
(ii) Tenants occupying an aggregate twenty percent (20%) or
more of the total net rentable area of the Mall not occupied by an Anchor
Tenant would have the right to terminate their Leases as a result thereof;
or
(iii) The estimated cost of repairing the damage (whether or
not insured), or restoring the Mall after the taking, will in Purchaser's
reasonable judgment equal or exceed One Million Dollars ($1,000,000.00).
(b) If Purchaser determines that a Material Part of the Mall
has been damaged, or that a Material Part of the Mall has been or will be
affected by the taking or threatened taking, Purchaser may elect, by written
notice delivered to Seller within fifteen (15) days after giving Seller notice
of such determination, to terminate this Agreement, in which event the Deposit
shall be returned to Purchaser, or to terminate this Agreement as to the Mall
only (or as to the applicable Partnership Interest, as the case may be), with
the Purchase Price reduced by the Purchase Price Allocation applicable to the
affected Mall or Partnership Interest.
If Purchaser does not so terminate, then:
(i) In the case of damage to a Material Part of a Seller-Owned
Mall, Seller shall (A) deliver to Purchaser at Closing all insurance
proceeds received on account of such damage, (B) assign to Purchaser
at Closing its right to recover under any insurance policies
covering such damage and (C) pay to Purchaser by credit to the
Purchase Price at Closing the amount of the deductible, if any;
provided, however, that the foregoing assignment of insurance policy
rights and proceeds shall not include those relating to business
interruption loss for the period prior to the Closing;
(ii) In the case of a threatened or actual taking of a
Material Part of a Seller-Owned Mall, Seller shall (A) deliver to
Purchaser at Closing all condemnation awards and other proceeds
received in connection with the taking and (B) assign to Purchaser
at Closing Seller's entire right, title and interest in all awards
and other proceeds connected with the taking; and
(iii) In the case of damage to or threatened or actual taking
of a material part of Temple or Alexandria, the Partnership shall
continue to own all rights to or under insurance policies or
condemnation on awards on proceeds.
10.2 NON-MATERIAL DAMAGE. If any Mall suffers damage to other
than a Material Part, the Closing Date shall not be extended, and, in the case
of a Seller-Owned Mall, Seller shall (A) deliver to Purchaser at Closing all
insurance or condemnation proceeds received on account of such damage or taking
(other than those relating to business interruption loss for the period prior to
the Closing) and (B) assign to Purchaser at Closing Seller's right to recover
under any insurance policies covering such damage and (C) shall pay to Purchaser
by credit to the Purchase Price at Closing the amount of the deductible, if any.
The provisions of
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Section 10.1(b)(iii) shall apply to any damage to other than a Material Part of
Temple Mall or Alexandria Mall.
10.3 LOSS ADJUSTMENTS. The Closing Date shall be extended as
necessary to permit Purchaser and Seller to exercise their rights within the
time periods set forth in this Article 10. In connection with any claim with
respect to insurance or condemnation proceeds pursuant to this Article 10,
Seller shall not settle or approve settlement of any claim after expiration of
the Inspection Period without Purchaser's prior written consent which consent
shall not be unreasonably withheld and Purchaser and Seller shall fully
cooperate with each other in prosecuting diligently the recovery of any such
claim(s). To the extent necessary, Purchaser shall give Seller reasonable access
after the Closing to the Mall and any records pertaining to the damaged or
condemned Mall. The provisions of this Section 10.3 shall survive the Closing.
ARTICLE 11
CONDITIONS TO CLOSING
11.1 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of
Seller under this Agreement are subject to the satisfaction on or prior to the
Closing Date of the conditions set forth in this Section 11.1. Each condition is
solely for the benefit of Seller and may be waived in whole or in part by Seller
in its sole discretion by written notice to Purchaser:
(a) Purchaser's representations and warranties made in this
Agreement are true on the Closing Date in all material respects as though
such representations and warranties were made on the Closing Date, subject
to factual modifications due to third-party events (such as, for example,
filing of a lawsuit by third-party) which do not have a material adverse
effect.
(b) Purchaser has performed and complied with all of its
obligations under this Agreement that are to be performed or complied with
by Purchaser prior to or on the Closing Date.
(c) Seller shall have received all third-party consents and
approvals, if any, required to permit the Closing.
(d) Neither Purchaser or Seller, as applicable, have
terminated this Agreement pursuant to any right of termination set forth
herein.
(e) Purchaser has delivered the Purchaser Closing Documents
and the balance of the Purchase Price.
(f) On or prior to the Closing Date, (i) Purchaser shall not
have applied for or consented to the appointment of a receiver, trustee or
liquidator for itself or any of its assets unless the same shall have been
discharged prior to the Closing Date, and no such receiver, liquidator or
trustee shall have otherwise been appointed, unless the same shall not
have admitted in writing an inability to pay its debts as they mature,
(ii) Purchaser shall not have admitted in writing an
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inability to pay its debts as they mature, (iii) Purchaser shall not have
made a general assignment for the benefit of creditors, (iv) Purchaser
shall not have been adjudicated bankrupt or insolvent, or had a petition
for reorganization granted with respect to Purchaser, or (v) Purchaser
shall not have filed a voluntary petition seeking reorganization or an
arrangement with creditors or taken advantage of any bankruptcy,
reorganization, insolvency, readjustment or debt, dissolution or
liquidation law or statute, or filed an answer admitting the material
allegations of a petition filed against it in any proceedings under any
such law, or had any petition filed against it in any proceeding under any
of the foregoing laws unless the same shall have been dismissed, cancelled
or terminated prior to the Closing Date.
11.2 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of
Purchaser under this Agreement are subject to the satisfaction on or prior to
the Closing Date of the conditions set forth in this Section 11.2. Each
condition is solely for the benefit of Purchaser and may be waived in whole or
in part by Purchaser in its sole discretion by written notice to Seller:
(a) Seller's representations and warranties made in this
Agreement are true on the Closing Date in all material respects as though
such representations and warranties were made on the Closing Date, subject
to factual modifications due to third-party events (such as, for example,
filing of a lawsuit by a third party or receipt of a notice of default
from a Tenant) which do not have a material adverse effect.
(b) Seller has performed and complied with all of its
obligations under this Agreement that are to be performed or complied with
by Seller prior to or on the Closing Date.
(c) Purchaser shall have received copies of the consent of the
Lenders, the Partnership Consents and any other consents set forth in
EXHIBIT 9.1(m) required in Section 9.1(m).
(d) Neither Purchaser nor Seller, as the case may be, shall
have terminated this Agreement pursuant to any right of termination set
forth herein.
(e) Seller shall have delivered the Seller Closing Documents.
(f) On or prior to the Closing Date, (i) Seller shall not have
applied for or consented to the appointment of a receiver, trustee or
liquidator for itself or any of its assets unless the same shall have been
discharged prior to the Closing Date, and no such receiver, liquidator or
trustee shall have otherwise been appointed, unless the same shall have
been discharged prior to the Closing Date, (ii) Seller shall not have
admitted in writing an inability to pay its debts as they mature, (iii)
Seller shall not have made a general assignment for the benefit of
creditors, (iv) Seller shall not have been adjudicated bankrupt or
insolvent, or had a petition for reorganization granted with respect to
Seller, or (v) Seller shall
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not have filed a voluntary petition seeking reorganization or an
arrangement with creditors or taken advantage of any bankruptcy,
reorganization, insolvency, readjustment or debt, dissolution or
liquidation law or statute, or filed an answer admitting the material
allegations of a petition filed against it in any proceedings under any
such law, or had any petition filed against it in any proceeding under any
of the foregoing laws unless the same shall have been dismissed, cancelled
or terminated prior to the Closing Date.
ARTICLE 12
DEFAULT
12.1 SELLER'S DEFAULT. If Seller shall fail to perform any of
its obligations hereunder, and if such failure is not cured within ten (10) days
after written notice to Seller specifying such failure, Purchaser shall have the
right to elect either to (a) proceed to Closing without any reduction or
abatement of the Purchase Price and without any claim against Seller with
respect to such failure, (b) seek specific performance of Seller's obligations
under this Agreement, or (c) terminate this Agreement, in which event the
Deposit shall be promptly returned to Purchaser, and Purchaser shall have the
right to bring an action for actual Damages against Seller; provided, however,
in any action by Purchaser against Seller for actual Damages due to Seller's
failure to close this transaction, Purchaser's right of recovery shall be
limited to an amount equal to Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00), and in no event shall Purchaser be entitled to collect Damages
from Seller in excess of Seven Hundred Fifty Thousand and 00/100 Dollars
($750,000.00).
12.2 PURCHASER'S DEFAULT. If Purchaser shall default in the
performance of any of its obligations hereunder including, without limitation,
Purchaser's failure to close due to insufficient funds, and if such default is
not cured within ten (10) days after written notice to Purchaser specifying such
default, Seller shall have the right at its election either to (a) waive such
default and proceed to Closing notwithstanding such default by Purchaser, or (b)
terminate this Agreement in which event the Deposit shall be promptly paid to
Seller as full and complete liquidated damages (and not as a penalty or
forfeiture) in lieu of any and all other legal and equitable rights and remedies
that Seller may have hereunder or at law or in equity.
12.3 LIQUIDATED DAMAGES. Purchaser and Seller acknowledge
that, in the event that Purchaser shall fail or default in its obligation to
close the purchase and sale contemplated by this Agreement after expiration of
the applicable notice and cure periods, Seller will suffer damages. The exact
amount of such damages are and will be difficult to ascertain with certainty,
and, accordingly, Purchaser and Seller agree that the Deposit shall constitute
liquidated damages for Purchaser's default in its obligations to close the
purchase and sale contemplated by this Agreement after expiration of the
applicable notice and cure periods. Notwithstanding that Seller's actual damages
would be uncertain and difficult to ascertain, Purchaser and Seller agree that
the Deposit is reasonable and bears a relationship to the damages that Seller
might sustain in the event of Purchaser's default under this Agreement.
Purchaser and Seller agree that the Deposit is not intended to be, and in no
event should be construed to be, a penalty, but is intended as fixed damages
agreed to by the parties as settlement of damages
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in advance. Seller hereby agrees that its receipt of the Deposit in the event of
Purchaser's failure or default in its obligation to close under this Agreement
is the sole and exclusive right or remedy that Seller has, or may be entitled to
exercise or pursue, against Purchaser, whether at law or in equity, as to such
failure or default.
12.4 CLOSING IS A WAIVER. (a) In the event that Closing shall
actually occur, then the occurrence of such Closing shall be deemed a complete
waiver by Purchaser of all of its rights to make any claim for Seller's failure
to perform any of its obligations under this Agreement required to be performed
prior to or on the Closing Date; provided, however, that such waiver shall not
apply to or affect Seller's liability with respect to any breach of Seller's
representations and warranties made as of the Closing Date contained in this
Agreement or of any obligations or covenants to be performed by Seller following
the Closing Date or that expressly survive the Closing ("SELLER'S POST-CLOSING
COVENANTS").
(b) In the event that Closing shall actually occur, then the
occurrence of such Closing shall be deemed a complete waiver by Seller of all of
its rights to make any claim for Purchaser's failure to perform any of its
obligations under this Agreement required to be performed prior to or on the
Closing Date; provided, however, that such waiver shall not affect Purchaser's
liability with respect to any breach of Purchaser's representations and
warranties made as of the Closing Date contained in this Agreement or of any
obligations or covenants to be performed by Purchaser following the Closing Date
or that expressly survive the Closing ("PURCHASER'S POST-CLOSING COVENANTS").
ARTICLE 13
BROKERAGE COMMISSIONS
Seller and Purchaser represent and warrant, each to the
other, that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than the Broker and no other
person initiated or participated in the negotiation of this Agreement or showed
the Property to Purchaser, and to the knowledge of Seller and Purchaser, except
for Seller's obligation to the Broker, there are no real estate brokerage
commissions, finder's fees, or other similar fees due any person or entity on
account of or as a result of this transaction, except as set forth herein.
Seller and Purchaser each agree to indemnify, defend and hold the other harmless
from and against any loss, cost, liability or expense suffered or incurred by
the other party as a result of a claim or claims for brokerage commissions,
finder's fees or other similar fees from any party or firm that is based on the
act or omission of the party in breach of the above warranty. Seller shall pay
all commissions, finder's fees or other similar expenses or fees of the Broker.
ARTICLE 14
NOTICES
14.1 NOTICES. Any notice, request, demand, instruction or
other document to be given or served hereunder or under any document or
instrument executed pursuant hereto shall be in writing and shall be deemed to
be delivered (a) upon personal delivery to and receipt
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by the person to whom delivered (including without limitation delivery to and/or
receipt by telecopy), or (b) four (4) days after deposit in United States
registered or certified mail, return receipt requested, or (c) one (1) Business
Day after deposit with a nationally recognized overnight express courier for
next day delivery, in each case, addressed to the parties at their respective
addresses or telecopy numbers (as applicable) set forth below:
If to Purchaser: First Union Real Estate Equity and Mortgage
Investments
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ P.L.L.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller: Marathon U.S. Realties, Inc.
One Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Marathon Realty Company Limited
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇, Gerber & ▇▇▇▇▇▇▇▇▇
Two ▇. ▇▇▇▇▇▇▇ Street
21st Floor
Chicago, Illinois 60602
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
14.2 CHANGE OF ADDRESS. A party may change its address and
telecopy number for receipt of notices by service of a notice of such change in
accordance herewith.
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ARTICLE 15
INDEMNIFICATION
15.1 PURCHASER INDEMNIFICATION. Purchaser hereby indemnifies
and agrees to hold harmless and defend Seller and each Seller Indemnitee from
and against all Damages imposed upon, suffered or incurred by Seller or any
Seller Indemnitee, (a) by reason of claims made by any Lender, Tenants under the
Leases, or other Parties under the Reciprocal Easement Agreements or Specialty
License Agreements or under those Contracts assigned to Purchaser, or by any
Partner or other party with respect to the Partnership Interests, or arising
under the Partnership Agreement or against the Partnership, that relate to any
actions or events first occurring, or obligations first accruing, on or after
the Closing Date; (b) by reason of an event or accident occurring at any time on
or after the Closing Date relating to the Property, except in each case those
obligations of Seller under this Agreement or the Seller Closing Documents that
expressly survive the Closing and those claims that constitute a breach of
warranties or representations of Seller hereunder or under any of the Seller
Closing Documents; (c) the breach of any representation or warranty made by
Purchaser under this Agreement; or (d) the failure by Purchaser to perform any
of Purchaser's Post-Closing Covenants.
15.2 SELLER INDEMNIFICATION. Seller hereby indemnifies and
agrees to hold harmless and defend Purchaser and each Purchaser Indemnitee from
and against all Damages imposed upon, suffered or incurred by Purchaser or any
Purchaser Indemnitee, (a) by reason of claims made by any Lender under the
Mortgages, Tenants under the Leases, or other Parties under the Reciprocal
Easement Agreements or the Specialty License Agreements or under those Contracts
assigned to Purchaser, or by any Partner or other party with respect to the
Partnership Interests, or arising under the Partnership Agreements or against
the Partnership, that relate to any actions or events first occurring, or
obligations first accruing, prior to the Closing Date; (b) by reason of an event
or accident occurring, at any time prior to the Closing Date relating to the
Malls, except in each case those obligations of Purchaser under this Agreement
or Purchaser Closing Documents that expressly survive the Closing and those
claims that constitute a breach of warranties or representations of Purchaser
hereunder or under any of the Purchaser Closing Documents; (c) the breach of any
representation or warranty made by Seller under this Agreement; or (d) the
failure by Seller to perform any of Seller's Post-Closing Covenants.
15.3 INDEMNIFICATION PROCEDURE.
(a) The indemnified party (the "INDEMNIFIED PARTY") shall give
the indemnifying party (the "INDEMNIFYING PARTY") prompt notice of any Damages
incurred (or likely to be incurred) by the Indemnified Party with respect to any
claim or assertion of claims by a third party ("THIRD PARTY CLAIM") for which
indemnification is available hereunder and the Indemnifying Party may (i) prior
to the commencement of any proceedings in connection with such Damages,
undertake the negotiation of any resolution of the dispute relating to such
Damages, including without limitation any settlement, release or remediation
(subject to Section 15.3(c)) or (ii) undertake the defense of any proceeding
(including any alternative dispute resolution proceeding) regarding such Damages
by selecting legal counsel who shall be reasonably acceptable to the Indemnified
Party.
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(b) Provided the Indemnifying Party shall have undertaken the
Indemnified Party's defense of a Third Party Claim with legal counsel reasonably
acceptable to the Indemnified Party, and shall have so notified the Indemnified
Party, the Indemnified Party shall be entitled to participate at its own expense
in the aforesaid negotiation or defense of any claim relating to such Damages
(subject to reimbursement to the limited extent provided in Section 15.3(e)),
but such negotiations or defense shall be controlled by counsel to the
Indemnifying Party.
(c) The Indemnifying Party shall not be liable for payments
relating to the resolution of any dispute or any settlement of any litigation or
proceeding effected without the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. The Indemnifying Party shall not,
without the Indemnified Party's written consent, resolve any dispute or settle
or compromise any claim regarding Damages from a Third Party Claim or consent to
entry of any judgment which would impose an injunction or other equitable relief
upon the Indemnified Party or which does not include as an unconditional term
thereof the release by the claimant or the plaintiff of the Indemnified Party
from all liability in respect of any such Damages.
(d) Each party hereto agrees to give the other party prompt
notice of any Damages (or possible Damages) asserted against it which might be
Damages for which indemnity could be sought against the other party, but the
failure to give such notice shall not release the Indemnifying Party of its
obligations under this Section 15.3, expect to the extent of the actual harm
suffered thereby.
(e) In the event the Indemnifying Party fails to timely
undertake negotiation of any dispute or defend, contest or otherwise protect
against any claim or suit with respect to a Third Party Claim, and to so notify
the Indemnified Party, the Indemnified Party may, but will not be obligated to,
defend, contest or otherwise protect against the same, and make any compromise
or settlement thereof and recover the entire costs thereof from the Indemnifying
Party, including reasonable attorneys' and experts' fees, disbursements and all
amounts paid as a result of such claim or suit or the compromise or settlement
thereof; provided, however, that if the Indemnifying Party undertakes
negotiation of any dispute and the defense of such matter in accordance with and
subject to the above terms of this Section 15.3, the Indemnified Party shall not
be entitled to recover from the Indemnifying Party for its costs incurred
thereafter in connection therewith other than the reasonable costs of
investigation undertaken by the Indemnified Party and reasonable costs of
providing assistance. The Indemnified Party shall cooperate and provide such
assistance as the Indemnifying Party may reasonably request in connection with
the negotiation of any dispute and the defense of the matter subject to
indemnification and the Indemnifying Party shall reimburse the Indemnified
Party's reasonable costs incurred thereafter in connection with such cooperation
and assistance.
ARTICLE 16
MISCELLANEOUS
16.1 PARTIES BOUND. Subject to the provisions of Section 16.10
of this Agreement, all provisions hereof, including, without limitations, all
representations and
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warranties made hereunder, shall extend to, be obligatory upon and inure to the
benefit of the respective heirs, devisees, legal representatives, successors,
assigns and beneficiaries of the parties hereto.
16.2 HEADINGS; EXHIBITS. The headings of the various Articles
and Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement. All Schedules and Exhibits annexed hereto are made a part hereof. All
terms defined herein shall have the same meanings in the Schedules and Exhibits,
except as otherwise provided therein.
16.3 INVALIDITY. If any term, provision or condition of this
Agreement is found to be or is rendered invalid or unenforceable, it shall not
affect the remaining terms, provisions and conditions of this Agreement, and
each and every other term, provision and condition of this Agreement shall be
valid and enforceable to the fullest extent permitted by law.
16.4 GOVERNING LAW. This Agreement shall, in all respects, be
governed, construed, applied and enforced in accordance with the laws of the
State of Texas.
16.5 NO THIRD PARTY BENEFICIARY. This Agreement is not
intended to give or confer any benefits, rights, privileges, claims, actions or
remedies to any person or entity as a third party beneficiary under any
statutes, laws, codes, ordinances, rules, regulations, orders, decrees or
otherwise.
16.6 ENTIRETY AND AMENDMENTS. This Agreement contains the
entire agreement among the parties hereto with respect to its subject matter and
supersedes all negotiations, prior discussions, agreements, letters of intent
and understandings (whether written or oral) relating to the subject matter of
this Agreement, including, without limitation, that certain letter of intent
dated May 14, 1996 from Purchaser to Seller. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought. This Agreement has been drafted through a joint effort of
the parties and, therefore, shall not be construed in favor of or against either
of the parties, but shall be construed in accordance with its fair meaning.
16.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
and all of such counterparts shall constitute one Agreement. Signature pages may
be detached from the counterparts and attached to a single copy of this
Agreement to physically form one document.
16.8 EXTENSION OF PERFORMANCE. Whenever under the terms of
this Agreement the time for performance of a covenant or condition falls upon a
Saturday, Sunday or legal holiday in the state of Texas, such time for
performance shall be extended to the next Business Day. Otherwise, unless a
provision of this Agreement specifically refers to Business Days, all references
in this Agreement to days shall mean calendar days.
16.9 TIME. Time is of the essence in the performance of each
and every term, condition and covenant contained in this Agreement.
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16.10 ASSIGNMENT. The rights and obligations of either party
under this Agreement may be assigned by either party to an Affiliate of such
party without the prior consent of, but with written notice to, the other party,
provided that (a) such Affiliate assumes the obligations of the assigning party,
(b) no such assignment will release the assigning party from any of its
obligations or liabilities under this Agreement, (c) such assignment shall not
delay the Closing, and (d) such assignment shall not require the non-assigning
party to obtain any additional or revised third party consents, certificates or
approvals. Except as provided in this Section , this Agreement may not be
assigned by either Seller or Purchaser without the prior written consent of the
other party.
16.11 CONFIDENTIALITY. The Confidential Information shall be
treated as confidential, and shall be maintained confidential, by the other
party and its employees, agents, contractors, attorneys, representatives and
such other parties as are reasonably deemed necessary by Seller or Purchaser,
any such disclosure to non-parties in all events to be subject to this
confidentiality provision, except as required by S.E.C. or NYSE regulations.
Each party agrees to use such Confidential Information only for the purpose of
this transaction, and for no other purpose. Seller acknowledges that possession
of Confidential Information relating to Purchaser may impose upon it and all
others to whom such Confidential Information is disclosed the status of
"Insider" as defined under the securities law of the United States, with respect
to securities of Purchaser governed by such laws, and Seller and such others
shall not engage in any transactions in such securities during the term of this
Agreement, nor thereafter, for a period of three (3) years from the Effective
Date.
16.12 TRUSTEE APPROVAL. Purchaser's obligations hereunder are
specifically contingent upon approval by Purchaser's Board of Trustees by no
later than the expiration of the Inspection Period.
16.13 NO SOLICITATION. From the Effective Date until the
Closing Date or the earlier termination of this Agreement, neither Seller nor
its officers, directors, employees and agents shall directly or indirectly, (a)
take any action to solicit or entertain any Acquisition Proposal (as defined
below), (b) disclose any nonpublic information relating to the Property and
designed to facilitate the sale of the Property or afford access to the
Property, books or records of the Seller to any Person (other than Purchaser) in
connection with soliciting or entertaining an Acquisition Proposal, or (c)
engage or participate in negotiations or enter into agreements with any Person
(other than Purchaser) with respect to an Acquisition Proposal. For purposes of
this Agreement, "ACQUISITION PROPOSAL" means any offer or proposal for (i) a
business combination involving the Seller and any Person (other than Purchaser)
or (ii) an acquisition by any Person (other than Purchaser) of any of the
Properties, in one or more transactions.
16.14 LIMIT OF TRUSTEES' LIABILITY. Notwithstanding anything
contained herein to the contrary, this Agreement is made and executed on behalf
of First Union Real Estate Equity and Mortgage Investments, a business trust
organized under the laws of the State of Ohio, by its officer(s) on behalf of
the trustees thereof, and none of the trustees or any additional or successor
trustee hereafter appointed, or any beneficiary, officer, employee or agent of
Purchaser shall have any liability in his personal or individual capacity, but
instead, all parties shall look solely to the property and assets of Purchaser
for satisfaction of any Damages of any nature in connection with this Agreement.
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16.15 EXHIBITS. The parties acknowledge that Seller's intent
is to sell and Purchaser's intent is to purchase the Property, but that (i) the
various exhibits setting forth the form of Closing Documents (excluding, for
purposes of this Section 16.15, any exhibits to be attached to Closing
Documents, such as legal descriptions) are subject to further review and
proposed modification by Seller and Purchaser during the ten (10)-day period
commencing on the Effective Date, provided that any such proposed modifications
must be acceptable to Seller and Purchaser, (ii) the other exhibits hereto are
subject to further review and modification by Seller during the ten (10)-day
period commencing on the Effective Date and (iii) such other exhibits hereto are
subject to further review by Purchaser, including, without limitation, as a part
of Purchaser's due diligence during the Inspection Period. Seller shall deliver
to Purchaser not later than the tenth (10th) day after the Effective Date any
modifications made by Seller to such other exhibits hereto, whereupon such
modifications shall be deemed to have been made as of the Effective Date for
purposes of Seller's representations and warranties hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the Effective Date.
SELLER: PURCHASER:
MARATHON U.S. REALTIES, INC., FIRST UNION REAL ESTATE EQUITY
a Delaware corporation AND MORTGAGE INVESTMENTS, an Ohio
business trust
By:___________________________ By:_________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Title: President and Chief Executive Officer
By:_________________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Investment Officer
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JOINDER:
The undersigned, as owner of the ▇▇▇▇▇ ▇▇▇▇▇ Mall, hereby
joins in the execution of this Agreement in order to bind itself to the terms
and provisions of this Agreement that relate to the undersigned and/or the ▇▇▇▇▇
▇▇▇▇▇ Mall and hereby confirms all representations, warranties and covenants
contained in this Agreement with respect to ▇▇▇▇▇ ▇▇▇▇▇ Mall.
CENTRIXX REALTY HOLDINGS LIMITED
By:____________________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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LIST OF EXHIBITS
A - Legal Description of Real Property and Non-Anchor Rented Area of Each Mall
A1 - Alexandria Mall
A2 - Brazos Mall
A3 - Killeen Mall
A4 - Mesilla Valley Mall
A5 - Park Plaza
A6 - Pecanland
A7 - Shawnee Mall
A8 - Temple Mall
A9 - ▇▇▇▇▇ ▇▇▇▇▇ Mall
B -Schedule of Purchase Price Allocations
C -Rent Roll by Mall
D -Schedule of Tradenames, Servicemarkers, etc.
2.3 -Form of Escrow Agreement
3.2 -Loan Balances
3.4(b) -Form of Shareholder Agreement
6.2(c) -Form of Limited or Special Warranty Deeds
6.2(d) -Form of ▇▇▇▇ of Sale
6.2(e) -Form of Assignment of Partnership Interests
6.2(f) -Form of Assignment of Leases
6.2(g) -Form of Assignment of Contracts
6.2(h) -Form of Assignment of Reciprocal Easement Agreements
6.2(i) -Form of Mortgage Loan Assignment and Assumption Agreement
6.2(j)(i) -Form of Lease Estoppel Certificate
6.2(j)(ii) -Form of Seller Estoppel Certificate
6.2(j)(iii) -Form of REA Estoppel Certificate
6.2(j)(iv) -Form of Lender Estoppel Certificate
6.2(j)(v) -Form of Partnership Estoppel Certificate
6.2(q) -Form of Assignment of Office Leases and Equipment
8.3 -Schedule of Insurance Policies
8.4 -FUMI Employee Agreement
9.1(b) -Schedule of (i) Defaults under Contracts and (ii) Contracts Not
Terminable on 30 Days' Notice
9.1(c) -Schedule of Defaults under Leases
9.1(c)(i) -List of Anchor Stores
9.1(e) -Schedule of Personal Property and Other Assets
9.1(f) -Schedule of Office and Equipment Leases
9.1(h) -Schedule of Pending Litigation
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9.1(i) -Schedule of Condemnation Disclosures
9.1(j) -Schedule of Mall Defects
9.1(m) -Schedule of Required Consents
9.1(n) -Schedule of Mortgage Loan Documents and MUSRI Loan Documents [with
outstanding principal balances]
9.1(p)(v) -Schedule of Partnership Litigation
9.1(q) -Pending Real Estate Tax Challenges, Complaints or Actions
9.1(r) -Schedule of Government Agreements
9.1(u) -Schedule of Environmental Reports
9.1(v) -Employee Benefits List
9.1(w) -List of Employees
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AMENDMENT TO PURCHASE AND SALE AGREEMENT
THIS AMENDMENT TO PURCHASE AND SALE AGREEMENT (the
"Amendment"), made and entered into as of the 12th day of August, 1996 (the
"Amendment Effective Date"), by and between MARATHON U.S. REALTIES, INC., a
Delaware corporation, and FIRST UNION REAL ESTATE EQUITY AND MORTGAGE
INVESTMENTS, an Ohio business trust ("Purchaser").
W I T N E S S E T H:
WHEREAS, Marathon U.S. Realties, Inc. and Purchaser
have entered into that certain Purchase and Sale Agreement (the "Agreement"),
dated as of June 12, 1996, which Agreement was also executed by Centrixx Realty
Holdings Limited ("Centrixx") pursuant to the joinder clause contained in the
Agreement (Marathon U.S. Realties, Inc. and Centrixx are hereinafter referred to
as "Seller" in accordance with the provisions of Section 1.1 of the Agreement);
and
WHEREAS, Seller and Purchaser desire to amend the
Agreement to reflect the parties' understanding with respect to any Ground
Leases (as hereinafter defined in this Amendment) affecting the Real Property
(as defined in the Agreement) and to reflect certain other changes agreed to by
Seller and Purchaser.
NOW, THEREFORE, in consideration of and in reliance
upon the covenants herein contained, and for good and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINED TERMS. Except as may otherwise be
expressly provided herein, or unless the context clearly requires a different
meaning, the capitalized words and phrases used in this Amendment shall have the
same meanings ascribed to such words and phrases in the Agreement.
2. AMENDMENTS. The Agreement is hereby amended, as of
the Amendment Effective Date, as follows:
A. DEFINITIONS. (i) The following defined terms are
hereby added to Section 1.1 of the Agreement:
"ASSIGNMENT OF GROUND LEASES" means an assignment in
the form of EXHIBIT 6.2(u) attached hereto, to be executed and acknowledged by
Seller and Purchaser, pursuant to which Seller assigns, and Purchaser assumes,
all right, title and interest of Seller under the Ground Leases relating to the
Seller-Owned Malls.
66
"GROUND LEASES" means all ground leases affecting or
relating to all or any portion of the Real Property as to which an Owner is the
ground lessee, including all amendments or modifications related thereto entered
into by an Owner prior to the Effective Date.
"GROUND LEASE ESTOPPEL CERTIFICATE" means the
estoppel certificate in the form of EXHIBIT 6.2(j)(vi) attached hereto.
(i) The defined terms "Closing Date", "Inspection
Period", "Leases", "Mall Information", "Party", "Purchase Price", "Real
Property" and "Title Policy", each contained in Section 1.1 of the
Agreement, are each deleted in their entirety and replaced with the
respective definitions set forth below:
"CLOSING DATE" means September 27, 1996, subject to
extension to the extent expressly provided in Sections 5.3 and 10.3 of this
Agreement.
"INSPECTION PERIOD" means the period ending September
6, 1996; provided, however, that such Inspection Period shall extend,
day-for-day, but in no event past September 13, 1996, for each day that passes
after August 23, 1996 in which Purchaser has not received, for each Mall, a
Survey, a Title Commitment (together with copies of matters of record reflected
in each Title Commitment) and the Estoppel Certificates required by Section
6.2(j) of this Agreement.
"LEASES" means all leases, subleases, licenses,
concessions and other agreements relating to the use or occupancy of any portion
of the Malls to which an Owner is a party, other than the Ground Leases,
Specialty License Agreements or Contracts, including those and any amendments,
modifications or work letters related thereto that may be entered into by an
Owner after the Effective Date and prior to Closing in accordance with the terms
of this Agreement.
"MALL INFORMATION" means the following existing
information, wherever located, with respect to each Mall: books and records,
financial statements, operating budgets, structural, mechanical, geotechnical or
other engineering studies, Plans, soil test reports, environmental reports,
feasibility studies, appraisals, ADA surveys or reports, OSHA asbestos surveys,
marketing studies, Mall documents and compilations, Lease summaries, the Leases,
the Ground Leases, the Contracts, the Specialty License Agreements, the
Reciprocal Easement Agreements and all other contracts, agreements and/or
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67
documents relating to the Malls that have been prepared at an Owner's request
and are within Seller's possession or control.
"PARTY" means TIAA or NML, a party to a Reciprocal
Easement Agreement, a Ground Lease, a Specialty License Agreement, a Material
Contract, an Office or Equipment Lease or a Lease, in each case other than an
Owner or its predecessors in title with respect to any Mall.
"PURCHASE PRICE" means Three Hundred Eight Million
Five Hundred Thousand and 00/100 Dollars ($308,500,000.00). Without waiving
Purchaser's right of termination pursuant to Section 4.2, it is the parties'
intention that there shall be no further reductions in the Purchase Price for
matters relating to Purchaser's due diligence investigations, or for any other
matter, except as expressly set forth in the Agreement.
"REAL PROPERTY" means all of that certain land
comprising the Malls and any development tracts, outparcels or outlots relating
to such Malls owned or leased by any Owner (including, without limitation,
pursuant to any Ground Lease), including the buildings and all other
improvements, structures, fixtures, parking area, facilities, installations,
non-movable machinery or equipment on the real property or used in connection
with the occupancy thereof (except to the extent of trade fixtures and equipment
owned by Tenants under the Leases or the Specialty License Agreements or owned
by other third parties), together with all easements, rights-of-way, strips and
gores, tenements, hereditaments and appurtenances, thereunto belonging or
appertaining and all right, title and interest of an Owner in and to any
streets, alleys, passages, common areas and other rights-of-way or appurtenances
included in, adjacent to and used in connection with such real property, before
or after the vacation thereof, including, without limitation, the easements,
access rights and other rights provided in the Reciprocal Easement Agreements.
"TITLE POLICY" means, with respect to Real Property
owned in fee simple by an Owner, a current ALTA Owner's Policy of Title
Insurance (Form B, 1992), and with respect to Real Property leased by an Owner
pursuant to a Ground Lease, a current ALTA Leasehold Owner's Policy (10-17-92),
or, in each case, such other comparable form as is available in the applicable
jurisdiction issued by Title Insurer for each Mall dated the date and time of
Closing and with liability in the amount specified in Section 5.1, insuring
Purchaser or Purchaser's Nominee as owner of fee title to the Seller-Owned Mall
and Alexandria Mall (or owner of a good and valid leasehold estate pursuant to a
Ground Lease, as the case may be) and Temple as owner of fee title to Temple
Mall (or owner of a good and valid leasehold estate pursuant to a Ground Lease,
as the case may be). With respect to the Partnership Sites, each Title Policy
shall
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show Purchaser or Purchaser's Nominee as the named insured, with a proportionate
reduction exception as to the existing policy for Temple, if available in Texas.
Each Title Policy shall contain affirmative insurance as to all appurtenant
easements benefiting the Real Property, including, without limitation, those
granted under the Reciprocal Easement Agreement, subject only to the Permitted
Exceptions applicable to the Mall covered by such policy, and shall (a) delete
the standard or general exceptions from coverage (but may include an exception
relating to parties in possession under unrecorded Leases), (b) contain a
contiguity endorsement for each Mall that is comprised of more than one parcel
if available, (c) affirmatively insure the Purchaser's rights under any
Reciprocal Easement Agreements or other appurtenant easements that benefit the
Real Property, (d) contain a survey endorsement if available, (e) if such
endorsement is available, contain a zoning endorsement in the form of ALTA
Endorsement Form 3.1 (or equivalent endorsement approved by Purchaser), (f)
provide at Purchaser's expense for such reinsurance and direct access and such
other endorsements as Purchaser shall require, (g) as to Alexandria Mall and
Temple Mall, if Purchaser acquires the Partnership Interests therein rather than
fee title, contain a non-imputation endorsement if available, and (h) contain a
vehicular access endorsement if available.
B. CONTINGENCY FOR LENDER APPROVAL. (i) The first
three sentences of Section 3.3(a) of the Agreement shall be deleted in their
entirety and replaced with the following:
The obligations of the parties under this Agreement shall be contingent upon
Seller obtaining, not less than five (5) days prior to the Closing Date, written
consent from TIAA to the transfer of Pecanland Mall to Purchaser or Purchaser's
Nominee and the assumption of the Pecanland Loan by Purchaser or Purchaser's
Nominee. Seller and Purchaser acknowledge and agree that Purchaser is
participating in discussions with TIAA to obtain such consent. If TIAA has not
consented to the transfer and assumption by the Closing Date, the Mall Assets
with respect to Pecanland Mall shall be excluded from the Property to be
conveyed as part of the Closing, this Agreement shall not terminate and the
parties shall proceed to close on the sale of the remaining Mall Assets and the
Partnership Interests with a reduction in the Purchase Price by an amount equal
to the Purchase Price Allocation for Pecanland Mall.
(i) Section 3.3(b) is hereby amended by adding the
phrase ", not less than five (5) days prior to the Closing Date," before the
words "written consent" in the first sentence of Section 3.3(b) and by deleting
the phrase "prior to the Closing Date (or any extended Closing Date agreed to by
Seller and Purchaser)" in the second sentence of Section 3.3(b) and replacing it
with the words "by such deadline".
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C. PARTNER APPROVALS. The first three (3) sentences
of Section 3.4(d) are hereby deleted in their entirety and replaced with the
following sentence: "Purchaser shall have the right to continue to participate
during the Inspection Period in discussions or negotiations with the White
Trusts to obtain the White Consents."
D. OPERATING AGREEMENT. The following provision is
added as Section 3.6 of the Agreement:
3.6 DELIVERY OF TERMS OF OPERATING AGREEMENT.
Purchaser shall deliver to TIAA, NML and the White Trusts (or the attorney for
the White Trusts) a synopsis of the salient terms of the Operating Agreement of
Purchaser's Nominee responsive to inquiries of such parties, respectively. Such
responses shall be provided from time to time with reasonable promptness and
copies thereof shall be delivered to Seller.
E. EXTENSIONS OF INSPECTION PERIOD. Section 4.3 of
the Agreement is hereby deleted in its entirety.
F. TITLE AND SURVEY. Notwithstanding anything in the
Agreement to the contrary, Seller shall, on or before August 23, 1996, deliver
to Purchaser, for each Mall, a Survey, a Title Commitment and copies of matters
of record reflected in each Title Commitment. In Section 5.1(a) of the
Agreement, the following language shall be deleted from the first sentence
thereof: "the Inspection Period shall be extended due to any delay in providing
such adjoining property information beyond the thirtieth (30th) day after the
Effective Date and that". The last sentence of Section 5.1(b) shall be deleted
in its entirety.
G. CLOSING. Section 6.1 is hereby amended by adding
the following as the last sentence to Section 6.1: "The parties agree that the
closing proceedings shall commence on September 24, 1996, and the parties shall
continue such proceedings with diligence so that the Closing can occur on or
before the Closing Date."
H. SELLER CLOSING DOCUMENTS. (i) Section 6.2(j) is
amended by deleting the word "and" before the number "(v)" and adding the
following at the end of the first sentence thereof:
and (vi) a Ground Lease Estoppel Certificate from each Party to a Ground Lease.
(i) Notwithstanding anything in the Agreement to the
contrary, Seller shall deliver to Purchaser, on or before August 23, 1996, all
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Estoppel Certificates required by Section 6.2(j) of the Agreement. In addition,
in the last sentence of Section 6.2(j), delete the phrase "fifty-five (55) days
after the Effective Date" and replace with the date "September 3, 1996", and
delete the phrase "fifty-two (52) days after the Effective Date" and replace
with the date "August 28, 1996".
(ii) The following is added as a new subsection (u)
of Section 6.2 of the Agreement:
(u) Four (4) counterparts of each Assignment of
Ground Leases.
I. PURCHASER CLOSING DOCUMENTS. The following is
added as a new subsections (m) and (n) of Section 6.3:
(m) Four (4) counterparts of each Assignment of
Ground Leases.
(n) A resolution of the members of Purchaser's
Nominee (and a resolution of any such corporate member) authorizing the
execution and delivery of the Purchaser Closing Documents.
J. APPORTIONMENT AND PAYMENTS. The phrase
"[Intentionally omitted]" is deleted from Section 7.1(p) of the Agreement and is
replaced with the following:
(p) GROUND LEASES. Rent and, without duplication of
their proration pursuant to other provisions of this Section, all other costs,
charges, reimbursements and other expenses payable pursuant to each Ground Lease
by an Owner as the lessee thereunder, shall be prorated as of the Cutoff Date.
K. CONDUCT OF BUSINESS PRIOR TO CLOSING DATE. The
following is added as a new subsection (g) to Section 8.1 of the Agreement:
(g) Prior to Closing, Seller shall not enter into,
amend, terminate or waive any rights under any Ground Leases without Purchaser's
prior written consent, which consent may be withheld in Purchaser's sole
discretion.
L. SELLER'S REPRESENTATIONS AND WARRANTIES. (i)
Section 9.1(a) of the Agreement is hereby amended by adding the phrase "or
lease" after the word "own" in the first sentence.
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(i) Delete the phrase "and paid for" at the end of
clause (v) of Section 9.1(c) and replace with the following: ", or are under
construction and Seller has reserved sufficient funds to pay for all costs of
construction required to be paid or otherwise provided for by Seller prior to
Closing in accordance with the terms of this Agreement".
(iii) The phrase "[Intentionally omitted]" is deleted
from Section 9.1(l) of the Agreement and is replaced with the following:
(l) GROUND LEASES. Other than the Ground Leases
affecting the Alexandria Mall described in EXHIBIT 9.1(l), there are no other
Ground Leases affecting any portion of the Real Property. Seller has delivered
to Purchaser true, correct and complete copies of all of the Ground Leases. The
Ground Leases are in full force and effect. Neither the ground lessee nor, to
Seller's knowledge, any other Party to any Ground Lease is in default thereunder
and Seller has not received notice of any default pursuant to any Ground Lease,
except in each case as disclosed in EXHIBIT 9.1(l). All the improvements that an
Owner is obligated to construct as the lessee pursuant to any Ground Lease have
been completed except as disclosed in EXHIBIT 9.1(l).
M. SELLER INDEMNIFICATION. Section 15.2 of the
Agreement is hereby amended by deleting the word "or" before clause (d) and
adding a new clause (e) as follows immediately before the period ending Section
15.2:
; or (e) by reason of any labor, employment, employee benefit or other claim
that arises out of an employment relationship and that relates to any action
or events first occurring, or obligations first accruing, prior to the
Closing Date and that is made by or relating to any Employee or former
employee of Seller, MRML or any Affiliate of Seller, or by such Employee's
or former employee's successor(s), assign(s) or estate or any other person
claiming through such Employee or former employee, including, but not
limited to, any such claim relating to compensation, workers' compensation
or any benefit
N. EXHIBITS. (i) The List of Exhibits attached to the
Agreement is hereby amended to add the following:
6.2(j)(vi) -Form of Ground Lease Estoppel Certificate
9.1(l) -Description of Alexandria Ground Leases and List of Defaults
6.2(u) -Form of Assignment of Ground Leases
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(i) EXHIBIT B to the Purchase Agreement entitled
"Schedule of Purchase Price Allocations" is hereby deleted and replaced with
EXHIBIT B attached to this Amendment and made a part hereof.
3. EFFECTIVE DATE OF AGREEMENT. The parties hereby
confirm that the Effective Date of the Agreement is June 12, 1996.
4. RATIFICATION OF AGREEMENT. This Amendment shall be
deemed to form a part of and be construed in connection with and as part of the
Agreement. Except as herein expressly amended, all of the other terms, covenants
and conditions contained in the Agreement shall continue to remain unchanged and
in full force and effect and are hereby ratified and confirmed.
5. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts, each of which shall be deemed an
original and all of such counterparts shall constitute one Amendment. Signature
pages may be attached from the counterparts and attached to a single copy of the
Amendment to physically form one document.
6. PARTIES BOUND. Subject to the provisions of
Section 16.10 of the Agreement, all provisions hereof, including, without
limitation, all representations and warranties made hereunder, shall extend to,
be obligatory upon and inure to the benefit of the respective heirs, devisees,
legal representatives, successors, assigns and beneficiaries of the parties
hereto.
7. HEADINGS/EXHIBITS. The headings of the various
Articles and Sections of this Amendment have been inserted solely for purposes
of convenience, are not part of this Amendment and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Amendment. All Schedules and Exhibits annexed hereto are made a part hereof. All
terms defined herein shall have the same meanings in the Schedules and Exhibits,
except as otherwise provided therein.
8. LIMIT OF TRUSTEES' LIABILITY. Notwithstanding
anything contained herein to the contrary, this Amendment is made and executed
on behalf of First Union Real Estate Equity and Mortgage Investments, a business
trust organized under the laws of the State of Ohio, by its officer(s) on behalf
of the trustees thereof, and none of the trustees or any additional or successor
trustee hereafter appointed, or any beneficiary, officer, employee or agent of
Purchaser shall have any liability in his personal or individual capacity, but
instead, all parties shall look solely to the property and assets of Purchaser
for satisfaction of any Damages of any nature in connection with this Amendment.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the Amendment Effective Date.
SELLER: PURCHASER:
MARATHON U.S. REALTIES, INC., FIRST UNION REAL ESTATE EQUITY
a Delaware corporation AND MORTGAGE INVESTMENTS,
an Ohio business trust
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------ -----------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President Title: President and
Chief Executive Officer
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Investment Officer
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JOINDER:
The undersigned, as owner of the ▇▇▇▇▇ ▇▇▇▇▇ Mall,
hereby joins in the execution of this Amendment in order to bind itself to the
terms and provisions of this Amendment that relate to the undersigned and/or the
▇▇▇▇▇ ▇▇▇▇▇ Mall and hereby confirms all representations, warranties and
covenants contained in the Amendment with respect to ▇▇▇▇▇ ▇▇▇▇▇ Mall.
CENTRIXX REALTY HOLDINGS
LIMITED
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
The undersigned, as Guarantor pursuant to that
certain Guaranty dated as of June 12, 1996, delivered in connection with the
Agreement, hereby joins in the execution of this Amendment for the purpose of
evidencing its consent to the terms and provisions thereof.
2685752 CANADA, INC.,
a Canadian corporation
By:▇.▇. ▇▇▇▇▇▇
---------------------------------
Name:
-------------------------------
Title:Vice President and Treasurer
------------------------------
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September 26, 1996
(▇▇▇) ▇▇▇-▇▇▇▇
Marathon U.S. Realties, Inc.
One Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
RE: Purchase and Sale Agreement between
Marathon U.S. Realties, Inc. ("Seller")
and First Union Real Estate Equity and
Mortgage Investments ("Purchaser")
dated June 12, 1996, as amended (as so
amended, the "Purchase Agreement")
Gentlemen:
As you are aware, pursuant to Paragraph 3.3 of the
Purchase Agreement, in the event that Seller does not obtain the TIAA consent as
contemplated therein by the Closing Date, the parties shall continue in good
faith to seek consent from TIAA for a period of six months after the Closing
Date. This letter is intended to amend the Purchase Agreement by allowing
additional time to obtain such consent. Terms capitalized herein and not
otherwise defined herein shall have the meaning set forth in the Purchase
Agreement.
Accordingly, this is to confirm our agreement that in
the event that, at the end of such initial six month period, TIAA has not
granted its consent, the parties shall, at Purchaser's election, exercisable by
delivering written notice to Seller, continue in good faith to seek the consent
from TIAA for an additional, period of six months thereafter, and further, that
in the event that the TIAA consent has still not been granted by the expiration
of such second six month period, then the parties shall, at Purchaser's
election, again exercisable by delivering written notice to Seller, continue in
good faith to seek the consent from TIAA for an additional
77
Page 2
period of six months thereafter; provided, that (a) the extension rights
provided for above shall be exercisable only so long as the Pecanland Escrow
Agreement (referenced below) remains in effect, and (b) the cancellation right
with respect to the management agreement referred to in Paragraph 3.3 of the
Purchase Agreement shall not be exercisable by Seller so long as the Pecanland
Escrow Agreement (referenced below) remains in effect. In connection with the
Closing, the parties further agree to enter into the Pecanland Escrow Agreement
in the form of Exhibit A attached hereto and made a part hereof.
Please confirm your agreement to the foregoing by
executing below and returning a copy of this letter to the undersigned.
Very truly yours,
First Union Real Estate Equity
and Mortgage Investments
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Marathon U.S. Realties, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Its: Vice President
------------------------
cc: ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇ P.L.L.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
78
September 27, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Equity
and Mortgage Investments
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Re: Purchase and Sale Agreement between Marathon U.S. Realties, Inc.
("Seller") and First Union Real Estate Equity and Mortgage
Investments ("Purchaser") dated as of June 12, 1996, as amended
(as so amended, the "Purchase Agreement")
Gentlemen:
This letter will amend the Purchase Agreement in the manner described
herein. Capitalized terms not otherwise defined herein shall have the same
meaning in this letter as defined in the Purchase Agreement.
1. Proration of Real Estate Taxes. Notwithstanding anything to the
contrary contained in the Purchase Agreement, including, without limitation,
Article 7 thereof, Seller will pay on the Closing Date the discounted present
value of Seller's prorata share of the tax expenses for the Property which are
reimbursed by tenants. The tax expenses are to be based on the actual 1995 taxes
discounted at five percent (5%) from the due date of such taxes. For the final
reproration on the Final Proration Statement, the actual tax expenses will be
prorated and Seller will pay or receive credit for the actual versus the
undiscounted amount paid on the Closing Date. The revenue will be prorated based
upon actual expenses.
2. Temple Mall Flume and Drain Easement. Seller has provided an
indemnification to First American Title Insurance Company ("First American") in
order to cause First American to remove the exception for the encroachment of
the flumes and drains at Temple Mall. In accordance with the terms of said
indemnification, within sixty (60) days after the Closing Date, Seller shall
cause the abandonment of the encroachments labeled "A" and "C" on the survey of
Temple Mall, and either (a) obtain an easement from ▇▇▇▇▇▇▇ & Associates, LLC
and Lowe's with respect to the encroachment labeled "D" on the survey of Temple
Mall in the form previously approved by Purchaser or (b) relocate the drainage
pipe for the encroachment labeled "D" on the survey of Temple Mall in order to
eliminate the encroachment and tie into the storm drainage system of the City of
Temple, Texas in accordance with plans approved by Purchaser. The encroachment
noted at "B" is located on a platted road. Seller shall provide an original
executed copy of the easement agreement to Purchaser.
3. Vehicle Titles. Seller shall cooperate with Purchaser after the
Closing Date to cause the transfer of all vehicle titles owned by Seller or its
predecessors in interest to be properly transferred to Purchaser within sixty
(60) days after the Closing Date. Such vehicles include those listed on Exhibit
A and identified as "to be transferred". Such cooperation shall include, without
limitation, execution of assignments of title or leases, transfers of registered
title or such other documents reasonably required to transfer such vehicle
titles. Seller agrees to maintain
79
First Union Real Estate Equity
and Mortgage Investments
September 27, 1996
Page 2
insurance on all vehicles at the levels set forth in Exhibit B hereto until such
time as they have been transferred to Purchaser.
4. Pecanland Escrow. Purchaser and Seller acknowledge that a Lender
Estoppel Certificate has not been received from TIAA, and therefore the Escrow
Agreement between Purchaser, Seller, Southwest Shopping Centers Co. I, L.L.C.
and First American with respect to Pecanland Mall is hereby amended to the
extent necessary to acknowledge that such Lender Estoppel Certificate has not
been obtained and that it must be obtained by Seller and delivered to Purchaser
prior to the Closing as to Pecanland Mall.
5. Not later than Tuesday, October 1, 1996, Seller shall obtain and
deliver to Purchaser the original executed copy of the Ground Lessor Estoppel
Certificate and Consent from the ▇▇▇▇▇▇▇▇.
Please confirm your agreement to the foregoing by executing below and
returning a copy of this letter to the undersigned.
Very truly yours,
MARATHON U.S. REALTIES, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice-President
FIRST UNION REAL ESTATE EQUITY
AND MORTGAGE INVESTMENTS
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
Vice-President
Title:
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cc: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇