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EXHIBIT 2.8
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is dated as of November 10, 1999, by and
between GGP LIMITED PARTNERSHIP, a Delaware limited partnership ("SELLER"), and
GGP/HOMART II L.L.C., a Delaware limited liability company (the "COMPANY").
R E C I T A L S
WHEREAS, Seller owns a 99.999% interest as a limited partner in
Stonebriar Mall Limited Partnership, a Delaware limited partnership (the
"EXISTING VENTURE");
WHEREAS, Seller owns 100% of the membership interests in Stonebriar
Mall L.L.C., a Delaware limited liability company ("SMLLC"), the owner of the
remaining .001% interest as a general partner in the Existing Venture;
WHEREAS, the Existing Venture is the owner of the real property
commonly known as Stonebriar Centre, Frisco, Texas which is more particularly
described on EXHIBIT A attached hereto, other than the property owned by the
Anchors (as hereinafter defined) at such mall; and
WHEREAS, Seller desires to contribute to the capital of the Company all
of its partnership and membership interests in SMLLC and the Existing Venture,
and the Company desires to acquire such interests.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
"ADA" shall mean the Americans With Disabilities Act, as amended.
"ADJUSTMENT DATE" shall mean November 30, 1999.
"ADJUSTMENT DATE COST SCHEDULE" shall have the meaning set forth in
Section 5.1.
"AFFILIATE" shall mean a Person that directly or indirectly through one
or more intermediaries controls, is controlled by, or is under common control
with the Person specified. The term "control" as used in the immediately
preceding sentence, means (a) the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
controlled entity or (b) the ownership (directly or indirectly) of not less than
50% of the voting stock of a corporation or not less than 50% of the aggregate
legal and equitable interest in a limited liability company, a partnership or
other business entity.
"AGREEMENT" shall mean this Contribution Agreement, as amended or
modified from time to time hereafter in accordance with the terms hereof.
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"ANCHOR" shall mean each Person identified in SCHEDULE 1.1-1.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section
2.3(a).
"AUDITOR" shall have the meaning set forth in Section 5.2(b).
"BOOKS AND RECORDS" shall mean all records, books of account and papers
of the Existing Venture relating to the construction, ownership and operations
of the Property, including architect's drawings, blue prints and as-built plans,
maintenance logs, copies of warranties and guaranties, licenses and permits,
instruction books, employee manuals, records and correspondence relating to
insurance claims, financial statements, operating budgets, paper and electronic
media copies of data and other information relating to the Property available
from personal computers, structural, mechanical, geotechnical or other
engineering studies, soil test reports, environmental reports, underground
storage tank reports, feasibility studies, appraisals, ADA surveys or reports,
OSHA asbestos surveys, marketing studies, mall documents and compilations, lease
summaries and originals and/or copies of Leases, the REA and the Contracts and
correspondence related thereto.
"BUDGET" shall mean the budget attached hereto as EXHIBIT D.
"CLOSING" shall have the meaning set forth in Section 4.1.
"CLOSING DATE" shall have the meaning set forth in Section 4.1.
"CLOSING DOCUMENTS" shall mean the Seller Closing Documents and the
Company Closing Documents, collectively.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY CLOSING DOCUMENTS" shall have the meaning set forth in Section
4.3.
"CONTRACTS" shall mean all construction contracts, architectural
agreements, development agreements (including the Development Agreement),
equipment leases and all service, maintenance and other contracts and
concessions that are currently in effect and to which the Existing Venture is a
party respecting the construction, use, maintenance, development, sale or
operation of the Property or any portion thereof (but excluding this Agreement,
the Leases, the Permitted Exceptions and the REA) including those which are
listed on SCHEDULE 6.1(G), together with any additions thereto, modifications
thereof or substitutions therefor hereafter entered into in accordance with the
provisions of this Agreement.
"CONTRIBUTION AMOUNT" shall have the meaning set forth in Section 2.2.
"COST SCHEDULE SETTLEMENT DATE" shall have the meaning set forth in
Section 5.1.
"DEVELOPMENT AGREEMENT" shall mean the Mall Development Agreement dated
June 4, 1996, between the City of Frisco and General Growth Properties, Inc., as
amended by First Amendment to Mall Development Agreement dated April 20, 1999,
among the City of Frisco, Frisco Economic Development Corporation, Frisco
Community Development Corporation and the Existing Venture.
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"DEFECT" shall mean any Lien, encumbrance, easement, agreement,
restriction, proceeding, lis pendens, notice, encroachment or exception to title
other than a Permitted Exception that materially and adversely affects the title
to or use of the Property.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local statutes,
ordinances, codes, rules, regulations, orders and decrees regulating, relating
to or imposing liability or standards concerning or in connection with Hazardous
Materials, underground storage tanks or the protection of human health, natural
resources or the environment, as any of the same may be amended from time to
time, including the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. ss.9601 et. seq., as amended by the
Superfund Amendments and Reauthorization Act or any equivalent state or local
laws or ordinances; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. ss. 6901 et seq., as amended by the Hazardous and Solid Waste Amendments
of 1984, or any equivalent state or local laws or ordinances; the Federal
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. ss.136 et. seq.
or any equivalent state or local laws or ordinances; the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.); the Emergency Planning and
Community Right-to-Know Act ("EPCRA"), 42 U.S.C. ss.11001 et. seq. or any
equivalent state or local laws or ordinances; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. ss.2601 et. seq. or any equivalent state or local laws or
ordinances; the Atomic Energy Act, 42 U.S.C. ss.2011 et. seq., or any equivalent
state or local laws or ordinances; the Clean Water Act (the "Clean Water Act"),
33 U.S.C. ss.1251 et. seq. or any equivalent state or local laws or ordinances;
the Clean Air Act (the "Clean Air Act"), 42 U.S.C. ss.7401 et seq. or any
equivalent state or local laws or ordinances; the Occupational Safety and Health
Act, 29 U.S.C. ss.651 et seq. or any equivalent state or local laws or
ordinances.
"EXISTING MANAGER" shall mean General Growth Management, Inc.
"EXISTING VENTURE" shall mean Stonebriar Mall Limited Partnership, a
Delaware limited partnership.
"EXECUTION DATE" shall mean the date of this Agreement.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated
by the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state or local
government, court, department, commission, board and office having jurisdiction
over the Property, Seller, the Existing Venture or the Company, or any other
body exercising functions similar to those of any of the foregoing.
"HAZARDOUS MATERIALS" shall mean any substance, material, waste, gas or
particulate matter which (i) is now, or at any future time may be, regulated by
the United States Government, the state in which the Real Property is located,
any other state with jurisdiction, or any local governmental authority, or (ii)
the exposure to, or manufacture, possession, presence, use generation, storage,
transportation, treatment, release, disposal, abatement, cleanup, removal,
remediation or handling of is prohibited, controlled or regulated by any
Environmental Law, or (iii) requires investigation or remediation under any
Environmental Law or common law, or (iv) is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous. Such term includes any material or substance which is (1) defined as
a "hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous
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waste," "restricted hazardous waste" or any like or similar term under any
applicable Environmental Law; (2) oil and petroleum products; (3) asbestos or
asbestos-containing material as defined in the regulations of the Occupational
Safety and Health Administration at 29 C.F.R. ss.1910.1001; (4) polychlorinated
biphenyls; (5) radioactive material; (6) designated as a "toxic pollutant" or a
"hazardous substance" pursuant to Sections 307 or 311 of the Clean Water Act;
(7) defined as a "hazardous waste" pursuant to Section 1004 of RCRA; (8) defined
as a "hazardous substance" pursuant to Section 101 of CERCLA; (9) designated as
a "hazardous chemical" substance or mixture pursuant to TSCA; (10) designated as
an "extremely hazardous" substance under Section 302 of EPCRA; (11) designated
as a "priority pollutant" or "hazardous air pollutant" pursuant to the Clean Air
Act; (12) designated as a hazardous chemical under the Occupational Safety and
Health Act; (13) radon gas or other radioactive source material, including
special nuclear material, and byproduct materials regulated under the Atomic
Energy Act, 42 U.S.C. ss.2011 et. seq.; (14) subject to regulation under FIFRA;
(15) natural gas, natural gas liquids, liquefied natural gas, and synthetic gas
usable for fuel; or (16) infectious wastes or materials and pathogenic bacteria
or other pathogenic microbial agents.
"IMPROVEMENTS" shall mean improvements, buildings, structures,
fixtures, facilities, installations, machinery and equipment, in, on, over or
under the Land, whether under construction or completed, including the
foundations and footings therefor, elevators, plumbing, air conditioning,
heating, ventilating, mechanical, electrical and utility systems (except to the
extent owned by a utility company) and any other similar systems, signs and
light fixtures (except to the extent of trade fixtures and equipment owned by
tenants under the Leases), doors, windows, fences, parking lots, walks and
walkways and each and every other type of physical improvement to the extent
owned, in whole or in part, by the Existing Venture, located at, on or affixed
to the Land, to the full extent such items constitute or are or can or may be
construed as realty under the laws of the state in which the Real Property is
located.
"INDEMNIFIED COMPANY PERSONS" shall have the meaning set forth in
Section 8.1.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 8.3.
"INDEMNIFIED SELLER PERSONS" shall have the meaning set forth in
Section 8.2.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 8.3.
"LAND" shall mean those certain parcels of real estate described on
EXHIBIT A.
"LEASES" shall mean all leases, tenancies, concessions, licenses and
occupancy agreements currently in effect and to which the Existing Venture or
any of its predecessors in title is a party affecting or relating to the
Property including those which are listed on SCHEDULE 6.1(E), together with any
additions thereto, modifications thereof or substitutions therefor hereafter
entered into in accordance with the provisions of this Agreement.
"LEGAL REQUIREMENTS" shall mean any laws, ordinances, orders, rules,
regulations and requirements of any Governmental Authority which may be
applicable to the Property, the Existing Venture or Seller.
"LIENS" shall mean any mortgages, deeds of trust, security interests,
judgments or charges, pledges, options, rights of first offer or first refusal,
liens of any type, restrictions, claims and other encumbrances of any nature
whatsoever.
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"LIEN SEARCHES" shall mean a search report by an independent search
firm reasonably acceptable to the Company 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 the Property
that would disclose the presence of any Liens, bankruptcy proceedings, lis
pendens or other matters affecting the Property, the Existing Venture or Seller.
"LOSSES" shall mean any and all claims, actions, suits, proceedings,
demands, losses, damages, liabilities, obligations, judgments, settlements,
awards, penalties, costs or expenses, including reasonable attorneys', experts'
and consultants' fees and expenses.
"OPERATING AGREEMENT" shall mean that certain Operating Agreement among
the Company, Seller and the New York State Common Retirement Fund dated as of
the date hereof.
"PARTY" shall mean a party to the REA or a Contract (or the successor
or assignee thereof) or a Tenant under a Lease, in each case other than the
Existing Venture or its predecessors in title with respect to the Property.
"PERMITTED EXCEPTIONS" shall mean the exceptions to title to the
Property listed on EXHIBIT B attached hereto and made a part hereof.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity of
any type.
"PERSONALTY" shall mean all of the personal property, both tangible and
intangible, owned by the Existing Venture (and the Existing Venture's interest
in any of the following) and located in or upon or used in connection with the
operation or maintenance of the Property, including machinery; equipment;
building supplies and materials; consumables; inventories; names, logos,
trademarks, trade names and copyrights; all assignable licenses, permits,
approvals, authorizations, variances, consents and certificates of occupancy;
all assignable guarantees or warranties (including performance bonds obtained
by, or for the benefit of, the Existing Venture, pertaining to the ownership,
construction or development of the Real Property or any part thereof); the Books
and Records; computer and peripheral equipment; computer software and data
contained in hard drives and on diskette; advertising materials; and telephone
exchange numbers. Without limiting the foregoing, "Personalty" shall include the
property listed on SCHEDULE 1.1-2. Personalty shall not include personal items
belonging to Tenants or to employees of the Existing Venture, the rights of the
Existing Venture in and to the Leases, the REA and the Contracts.
"PRECLOSING COST SCHEDULE" shall have the meaning set forth in Section
4.2(j).
"PROPERTY" shall mean (a) the Real Property, (b) the Personalty, (c)
the rights and interests of the Existing Venture in, to and under all Leases,
(d) the rights and interests of the Existing Venture in, to and under the REA,
and (e) the rights and interests of the Existing Venture in, to and under the
Contracts.
"REAL PROPERTY" shall mean the Land and the Improvements, together with
all of the estate, right, title and interest of the Existing Venture therein,
and in and to (a) any land lying in the beds of any streets, roads or avenues,
open or proposed, public or private, in front of or adjoining the Land to the
center lines thereof, and in and to any awards to be made in lieu thereof and in
and to any unpaid awards for damage to the foregoing by reason of the change of
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grade of any such streets, roads or avenues; and (b) all easements, rights,
licenses, privileges, rights-of-way, strips and gores, hereditaments and such
other real property rights and interests appurtenant to the foregoing (including
all rights of the Existing Venture under the REA).
"REA" shall mean that certain Construction, Operation and Reciprocal
Easement Agreement dated as of November 20, 1998 by and among GGP Limited
Partnership, Nordstrom, Inc., X.X. Xxxxxx Properties, Inc., Sears, Xxxxxxx and
Co., and Macy's West, Inc., as supplemented by Supplemental Agreement dated as
of November 20, 1998, between the Existing Venture and Sears, Xxxxxxx and Co.,
Supplement to Construction, Operation and Reciprocal Easement Agreement dated as
of November 20, 1998, between the Existing Venture and Nordstrom, Inc.,
Supplement to Construction, Operation and Reciprocal Easement Agreement dated as
of November 20, 1998, between the Existing Venture and X. X. Penney Properties,
Inc. and Amended and Restated Supplement to Construction, Operation and
Reciprocal Easement Agreement dated as of October 22, 1999, between the Existing
Venture and Macy's Texas, Inc.
"REGULATIONS" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"SELLER CLOSING DOCUMENTS" shall have the meaning set forth in Section
4.2.
"SELLER'S INTEREST" shall mean the entire membership interest of Seller
in SMLLC, together with all rights, obligations and powers of Seller as a member
of SMLLC, together with the entire interest of Seller as a limited partner in
the Existing Venture, together with all rights, obligations and powers of Seller
as a limited partner in the Existing Venture.
"SELLER'S LIABILITIES" shall have the meaning set forth in Section
2.3(b).
"SMLLC" shall mean Stonebriar Mall L.L.C., a Delaware limited liability
company.
"SURVEY" shall mean the Urban ALTA/ACSM Land Title Survey of the
Property by P. B. S. & J., Project #87097.30, last revised July 28, 1999.
"TENANTS" shall mean tenants, concessionaires, licensees and/or
occupants under the Leases.
"THIRD PARTY CLAIM" shall have the meaning set forth in Section 8.3(a).
"TITLE COMMITMENT" shall mean the Commitment for Title Insurance No. 44
008 80 30647 issued by the Title Company to the Company effective as of August
23, 1999, together with copies of all documents underlying all exceptions to
title and all encumbrances on and other matters of record affecting the Real
Property.
"TITLE COMPANY" shall mean Chicago Title Insurance Company.
"TITLE POLICY" shall mean Owner's Policy of Title Insurance No. 44 0042
100 00007795 issued by Title Company and effective August 30, 1996, insuring the
Existing Venture as owner of good, marketable and indefeasible fee title to the
Property, subject only to the Permitted Exceptions.
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"TRANSACTIONS" shall mean the transactions contemplated by this
Agreement.
1.2 References. All references in this Agreement to particular sections
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, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the exhibits annexed hereto and, by such reference,
be made a part hereof. 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, paragraph or article
hereof. The words "include", "includes" and "including" shall be deemed in each
case to be followed by the phrase "without limitation".
1.3 Terms Generally. Definitions in this Agreement apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.
ARTICLE II
Contribution
2.1 Contribution of Seller's Interest. Upon the terms and subject to
the conditions contained herein, at the Closing, Seller shall contribute to the
Company, and the Company shall acquire, Seller's Interest, free and clear of all
Liens. The Seller's Interest shall be deemed to have a fair market value of
$65,376,468 (the "CONTRIBUTION AMOUNT").
2.2 Consideration. In consideration for the contribution of Seller's
Interest and certain other property being contributed to the capital of the
Company by Seller, and in addition to the assumption of liabilities and
adjustments as hereinafter provided, on the Closing Date Seller shall receive
units of membership interest in the Company pursuant to the Operating Agreement.
2.3 Assumption of Liabilities. The Existing Venture shall continue to
be liable and responsible for, or hereby assumes, (a) any and all liabilities
and obligations of the Existing Venture and the Property, and (b) any and all
liabilities and obligations of Seller with respect to the Property and the
construction and development at the Property, whether arising prior to or after
the Closing Date. All of the obligations described in the immediately preceding
sentence of this Section 2.3 are hereinafter referred to as the "ASSUMED
LIABILITIES". Nothing contained in this 2.3 shall impair the rights of the
Company for a breach of any representation or warranty contained herein or in
the Seller Closing Documents.
ARTICLE III
Costs and Expenses
3.1 Title and Survey Costs. Title and Survey costs shall be paid as
follows:
(a) The Company shall pay the cost of obtaining the Title
Commitment and the cost of recording any documents required to release, cure or
remove Defects;
(b) The Company shall pay the cost of obtaining the Survey;
(c) The Company shall pay the cost of recording any other
documents;
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(d) Subject to any separate agreement between Seller and the
Company, the Company shall be solely responsible for the payment of any real
property transfer taxes levied or imposed upon Seller or the Property as a
result of the transfers to the Company, gains taxes levied or imposed upon
Seller or the Property as a result of the transfers to the Company, sales taxes
levied or imposed upon Seller or the Property as a result of the transfers to
the Company and documentary stamps and other taxes, fees or charges imposed in
connection with the transfer of the Seller's Interest or any portion thereof;
(e) The Company shall pay all filing fees and charges and any
personal property sales taxes in connection with the indirect transfer of the
Personalty to the Company; and
(f) The Company shall pay the costs of the Lien Search.
3.2 Other Costs. Except for expenses and costs related to the
termination of any existing management agreement and the termination of any
employees, the Company shall pay any and all costs or expenses in connection
with the termination of any Contracts to be terminated in accordance with the
terms of this Agreement. The Company shall pay the legal fees of its counsel and
Seller shall pay the legal fees of Xxxx, Xxxxxx & Xxxxxxxxx incurred in
connection with the drafting and negotiation of this Agreement and the Closing
of the Transactions.
ARTICLE IV
Closing
4.1 Closing. The closing of the Transactions (the "CLOSING") shall take
place at the offices of Xxxx, Gerber & Xxxxxxxxx, Xxx Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, commencing at 10:00 a.m., local time, on the date
hereof (the "CLOSING DATE").
4.2 Seller Closing Documents. On or prior to the Closing Date, Seller
shall deliver, or cause to be delivered, to the Company the following documents
(collectively, the "SELLER CLOSING DOCUMENTS"), duly executed by Seller and the
other parties thereto (other than the Company) and in form and substance
reasonably acceptable to the Company and to Seller unless the form thereof is
attached hereto:
(a) Assignment or assignments of membership interest with respect
to SMLLC, together with an assignment of Seller's interest as a limited partner
in the Existing Venture, assigning Seller's Interest from Seller to the Company.
(b) An affidavit of Seller stating its U.S. taxpayer
identification number and that it is a "United States person", as defined by
Sections 1445(f)(3) and 7701(b) of the Code.
(c) Such certificates as the Company may reasonably request as to
the authorization on the part of Seller of the execution, delivery and
performance of this Agreement and the authority of the Persons executing and
delivering this Agreement and the Seller Closing Documents on behalf of Seller.
(d) Certificates issued by the Delaware Secretary of State, dated
not more than ten (10) days prior to the Closing Date, certifying the good
standing of Seller and the general partner(s) of Seller, respectively.
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(e) Originals or certified copies of the organizational documents
for the Existing Venture and SMLLC, including partnership agreements, operating
agreements, articles of organization, by-laws, minute books and records of
meetings, including all amendments thereof.
(f) Original, or copies certified by Seller as true, complete and
correct, of each of the Leases and the REA, together with all Books and Records
including current real estate tax bills, water, sewer and utility bills and all
Tenant correspondence.
(g) Keys and combinations to locked compartments within the
Property.
(h) Any instruments, documents or certificates required to be
executed by Seller with respect to any state, county or local transfer taxes
applicable to the conveyance of Seller's Interest pursuant to this Agreement.
(i) A schedule listing all costs incurred through the Closing
Date (the "PRECLOSING COST SCHEDULE" for which the Company is to reimburse
Seller, in the form attached hereto as EXHIBIT E.
(j) The Budget.
(k) Such other documents, instruments or agreements which Seller
is required to deliver to the Company pursuant to the other provisions of this
Agreement or which the Company reasonably may deem necessary or desirable in
order to consummate the Transactions in accordance with the terms hereof.
4.3 Company Closing Documents. On or prior to the Closing Date, the
Company shall deliver to Seller the following documents (herein referred to
collectively as the "COMPANY CLOSING DOCUMENTS"), duly executed by an authorized
officer on behalf of the Company and the other parties thereto (other than
Seller) and in form and substance reasonably acceptable to Seller and to the
Company unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which the Company
accepts assignment of Seller's Interest.
(b) A duly executed and acknowledged Secretary's Certificate,
certifying that the members of the Company have duly adopted resolutions
authorizing the consummation of the Transactions and certifying the authority of
the respective authorized signatories of the Company executing and delivering
this Agreement and the Company Closing Documents in their capacities as officers
of the Company.
(c) A certificate issued by the Secretary of State of Delaware
dated not earlier than ten (10) days prior to the Closing Date certifying the
existence and good standing of the Company as of the date of such certificate.
(d) Copies of the Certificate of Formation of the Company and any
amendments thereto, as of the Closing Date certified by the Secretary of State
of the State of Delaware as of a date not more than twenty (20) days prior to
the Closing Date, together with a certificate of an officer of the Company to
the effect that the Certificate of Formation of the Company, as certified by the
Secretary of State of Delaware, has not been further amended, revised, restated,
cancelled or rescinded up to and including the Closing Date.
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(e) Any instruments, documents or certificates required to be
executed by the Company with respect to any state, county or local transfer
taxes applicable to the conveyance of Seller's Interest pursuant to this
Agreement.
(f) Such other documents, instruments or agreements which the
Company may be required to deliver to Seller pursuant to the other provisions of
this Agreement or which Seller reasonably may deem necessary or desirable to
consummate the Transactions; provided, however, that any such other document,
instrument or agreement which Seller reasonably deems necessary or desirable
shall not impose upon the Company any obligation or liability other than an
obligation or liability expressly imposed upon the Company pursuant to the terms
of this Agreement or pursuant to the terms of the other the Company Closing
Documents specified in this Section 4.3.
4.4 Joint Deliveries. Seller and the Company shall jointly execute and
deliver the Preclosing Cost Schedule.
ARTICLE V
Prorations and Adjustments
5.1 Adjustment of Costs. The Contribution Amount reflects all income,
expense and other items with respect to the Existing Venture and the Property
through the Closing Date. The parties have agreed upon the Preclosing Cost
Schedule prepared as of October 31, 1999; provided, however, that items totaling
$279,706.64 (the "REVIEW ITEMS") as shown on the Preclosing Cost Schedule have
been deducted from the total amount shown on the Preclosing Cost Schedule
pending further review by Clarion Partners, the advisor to The New York State
Common Retirement Fund. Seller shall continue to fund costs, expenses and
construction draws for the construction of the Improvements and with respect to
the Property from November 1, 1999 through the Adjustment Date. No later than
sixty (60) days after the Closing Date, Seller shall cause to be prepared and
delivered to the Company (including to Clarion Partners as advisor to the New
York State Common Retirement Fund) a revised cost schedule with respect to the
Property for the period from November 1, 1999 through the Adjustment Date (the
"ADJUSTMENT DATE COST SCHEDULE"), showing all costs, expenses and construction
draws for the construction of the Improvements and with respect to the Property
from the Closing Date through the Adjustment Date. The Adjustment Date Cost
Schedule shall be prepared in a manner consistent with that utilized in the
preparation of the Preclosing Cost Schedule. No later than sixty (60) days after
the Closing Date, Seller and the Company shall use reasonable efforts to
determine whether the Review Items, or any portion of them, are to be included
in the Adjustment Date Cost Schedule for payment to Seller. The Company will, no
later than the later of (i) sixty-one (61) days following the delivery of the
Adjustment Date Cost Schedule or (ii) five (5) business days following the
resolution of a dispute with respect to the Review Items or an item on the
Adjustment Date Cost Schedule as set forth in subsection 5.2 hereof (the "COST
SCHEDULE SETTLEMENT DATE"), pay to Seller the amount shown on the Adjustment
Date Cost Schedule by wire transfer of immediately available funds to an account
designated by Seller.
5.2 Resolution of Disputes on Adjustment Date Cost Schedule.
(a) If the Company (including Clarion Partners as advisor to the
New York State Common Retirement Fund) disagrees with any item on the Adjustment
Date Cost Schedule, including the inclusion of any of the Review Items, the
Company shall notify Seller in writing of such disagreement within sixty (60)
days after the Company's receipt of the Adjustment Date Cost Schedule. Such
notice shall set forth the basis for such disagreement in
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reasonable detail. During such sixty (60) day period, Seller shall afford the
Company and its duly designated representatives (including Clarion Partners as
advisor to the New York State Common Retirement Fund) access to all of Seller's
books and records with respect to the Property and the construction of the
Improvements, in each case solely for the purposes of resolving such
disagreement. The Company and Seller shall thereafter negotiate in good faith to
resolve any such disagreements, provided that the Company shall promptly pay to
Seller the amount determined pursuant to Section 5.1 that is not subject to
dispute.
(b) If the Company and Seller are unable to resolve any such
disagreements within thirty (30) days after the expiration of the sixty (60) day
period referred to in Section 5.2(a), the Company and Seller shall cause Ernst &
Young LLP (the "AUDITOR") to resolve all disagreements on the disputed items as
soon as practicable, provided that the Auditor shall be bound by the provisions
of Section 5.1 and may not assign a value to any item greater than the greatest
value for such item claimed by either party or less than the smallest value for
such item claimed by either party. Each of the Company and Seller shall permit
the Auditor to have full access to its books, records, key employees and
independent accountants in order to resolve any such disagreements. The
resolution of such disagreements by the Auditor shall be final and binding on
the Company and Seller. The fees and expenses of the Auditor shall be paid by
the party whose position is most at variance with the decision of the Auditor.
5.3 Adjustment of Costs. Except as set forth in this Article V, there
shall be no proration, adjustment or reproration of any income, expense or other
items with respect to the Existing Venture, the Property or the construction and
development at the Property.
ARTICLE VI
Representations and Warranties
6.1 Seller's Representations and Warranties. Seller represents and
warrants to the Company as follows:
(a) Seller is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of Delaware with full power and
authority to execute, deliver and perform this Agreement. Seller has delivered
to the Company true, correct and complete copies of its limited partnership
agreement and all amendments and modifications thereto.
(b) The execution, delivery and performance of this Agreement by
Seller have been duly and validly authorized by all necessary action on the part
of Seller. This Agreement has been, and the Seller Closing Documents will be,
duly executed and delivered by Seller. This Agreement constitutes, and when so
executed and delivered the Seller Closing Documents will constitute, the legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms.
(c) None of the execution, delivery or performance of this
Agreement by Seller does or will, with or without the giving of notice, lapse of
time or both, violate, conflict with, constitute a default, result in a loss of
rights, acceleration of payments due or creation of any Lien upon the Property
or require the approval or waiver of or filing with any Person (including any
governmental body, agency or instrumentality) under (i) the organizational
documents of Seller or its general partner or, any agreement, instrument or
other document to which Seller or its general partner is a party or by which it
is bound, (ii) any judgment, decree, order, statute, injunction, rule,
regulation or the like of a governmental unit applicable to the Property, Seller
or
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its general partner (other than notification of ownership change or transfer or
reissuance of permits as may be required under Environmental Laws), or (iii) any
contract or agreement by which Seller or the Existing Venture may be bound.
(d) Seller has good and marketable title to Seller's Interest
free and clear of Liens and, upon execution and delivery of the Seller Closing
Documents, the Company will have good and marketable title to Seller's Interest
free and clear of Liens other than Liens created by, under or through the
Company. No other property (other than the Real Property and property owned by
any Anchor) comprises "Stonebriar Centre".
(e) Schedule 6.1(e) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto regardless of
whether the terms thereof have commenced, setting forth with respect to each (i)
the date thereof and of each modification thereof and supplement thereto and
(ii) the names of the Parties thereto (including the name of the current
assignee, if any, but only if and to the extent Seller has actual notice of any
such assignment). A true and complete copy of each Lease demising space in
excess of 10,000 square feet, together with each modification thereof and
supplement thereto, has heretofore been furnished to the Company for inspection
and has been delivered to the Company on the date hereof. Each Lease constitutes
the entire agreement between the Existing Venture and each Party thereto, and
the Existing Venture has not made any oral promises or agreements amending or
modifying the same. No Person is using or occupying (or is entitled to use or
occupy) the Real Property except under a Lease or the REA.
(i) There are no leases executed by the Existing Venture or other
rights of occupancy or use granted by the Existing Venture or, to
Seller's knowledge, its predecessors in title of any portion of the
Property other than the Leases. Each of the Leases is valid and
subsisting and in full force and effect.
(ii) Except as set forth on Schedule 6.1(e), no Tenant has made
any written claim which has been received by Seller or the Existing
Venture or, to Seller's knowledge, has any other claim, whether or not
in writing (A) that the Existing Venture has defaulted in performing
any of its obligations under any of the Leases which has not heretofore
been cured, (B) except for any requirement to complete construction of
the Improvements, that any condition exists which with the passage of
time or giving of notice, or both, would constitute any such default,
(C) that such Tenant is entitled to any reduction in, refund of, or
counterclaim or offset against, or is otherwise disputing, any rents or
other charges paid, payable or to become payable by such Tenant, or (D)
that such Tenant is entitled to cancel its Lease or to be relieved of
its operating covenants thereunder.
(iii) No material default exists under any of the Leases on the
part of the Tenant thereto and Seller has no knowledge of any
condition, which, with the passage of time, or giving of notice, would
constitute a default under any Lease. The Existing Venture is not in
default under the Leases. The Existing Venture has not delivered any
default notices to any Tenant under any Lease which has not been cured.
(iv) There are no rent abatements, offset rights, "free rent
periods" or other tenant concessions or inducements, including lease
assumptions or buy-outs, applicable to any of the Leases or any rights
to extend or renew any of such Leases, in either case except as set
forth in the Leases. There are no expansion rights, options or rights
to renew, extend or terminate the Leases, except as set forth in the
Leases. Neither Seller
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nor the Existing Venture have granted any rights, options or rights of
first refusal of any kind to any Tenant or otherwise, which are
currently in effect, to purchase or to otherwise acquire the Property
or any part thereof or interest therein. The option to repurchase held
by Xxxxxxx Properties, Inc. has expired.
(v) Except for any requirement to complete construction of the
Improvements, no condition exists that would permit any Party to any
Lease or REA to cancel or terminate such Lease or REA, be released from
liability from such Lease or REA or reduce its obligations under any
Lease or REA.
(f) The REA constitutes the only reciprocal easement agreements
or operating agreements encumbering the Property. A true and complete copy of
the REA has heretofore been furnished to Buyer, together with each written
modification thereof and supplement thereto. The REA constitutes the entire
agreement between the Existing Venture and each REA Party thereto, and neither
Seller nor the Existing Venture have made any oral promises or agreements
amending or modifying the same.
(i) The REA is valid and in full force and effect.
(ii) Except as set forth on Schedule 6.1(f), none of the REA
Parties has made any written claim which has been received by Seller,
the Existing Venture or, to Seller's knowledge, has any other claim,
whether or not in writing (A) that the Existing Venture has defaulted
in performing any of its obligations under any of the REAs which has
not heretofore been cured, (B) except for any requirement to complete
construction of the Improvements, that any condition exists which with
the passage of time or giving of notice, or both, would constitute any
such default, (C) that such REA Party is entitled to any reduction in,
refund of, or counterclaim or offset against, or is otherwise
disputing, any rents or other charges paid, payable or to become
payable by such REA Party, (D) that such REA Party is entitled to
cancel its REA or to be relieved of its operating covenants thereunder,
or (E) that there is a violation of any of the covenants, conditions or
restrictions contained in such REA.
(iii) No material default exists under the REA on the part of the
REA Parties thereto and Seller has no knowledge of any condition which,
with the passage of time or giving of notice, would constitute a
default under any REA. The Existing Venture is not in default under the
REA. The Existing Venture has not delivered any default notices to any
party under the REA which has not been cured.
(iv) There are no rent abatements, offset rights, "free rent
periods" or other concessions or inducements, including lease
assumptions or buy-outs, applicable to the REA or any rights to extend
or renew the REA except as set forth in Schedule 6.1(f) or the REA.
There are no options or rights to renew, extend, expand or terminate
the REA, except as set forth in Schedule 6.1(f). Except as set forth in
Schedule 6.1(f), neither Seller nor the Existing Venture have granted
any rights, options or rights of first refusal of any kind to any of
the REA Parties, which are currently in effect, to purchase or to
otherwise acquire the Property or any part thereof or interest therein.
No party to any REA has given notice that it has ceased or that it
intends to cease operating its store or other property that it is
required to operate under the REA.
(g) Schedule 6.1(g) contains a true and complete list of all
Contracts other than contracts and agreements relating to the construction and
development of the Property,
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including all modifications thereof. Each of the Contracts is in full force and
effect. To Seller's knowledge, there have been no material defaults by any Party
to a Contract which have not heretofore been cured. Except for unpaid amounts
under construction contracts or material supply contracts, there has been no
material default (without giving effect to any notice and cure rights) by the
Existing Venture under any Contract or any claim received by Seller or the
Existing Venture of any such default by any party thereto, which has not
heretofore been cured except as set forth on Schedule 6.1(g).
(h) Schedule 6.1(h) contains a list of all permits,
authorizations, approvals and licenses currently maintained with respect to the
Property and all such permits, authorizations, approvals and licenses are in
full force and effect. Neither Seller nor the Existing Venture have received any
written notice of violation from any federal, state or municipal entity with
respect to the Property or in connection with the operations conducted thereon
that has not been cured or otherwise resolved to the satisfaction of such
governmental entity. To Seller's knowledge, except as set forth on Schedule
6.1(h), the permits, authorizations, approvals and licenses listed on Schedule
6.1(h) are all of the licenses and permits which are required for the present
use of and construction on the Property.
(i) Except as set forth on Schedule 6.1(i), neither Seller, the
Existing Venture nor any other Person has caused or permitted any Hazardous
Material to be maintained, disposed of, stored, treated, recycled, brought upon,
transported over or generated on, under or at the Property or any part thereof
or any real property adjacent thereto, except for the presence, storage,
maintenance, use or transportation of substances commonly present or stored at
or used in the ordinary construction, operation and maintenance of shopping
centers in ordinary quantities commonly present, stored or used at shopping
centers during construction or operation thereof and in compliance with
applicable laws, including Environmental Laws. There has been no release or
threatened release of any Hazardous Materials at, on or under the Property or
any part thereof that will give rise to any obligation or liability to conduct
or pay for any investigation, removal, remediation, monitoring, closure, or
post-closure care at, on or under the Property or any part thereof, nor has
there been any release or threatened release of Hazardous Materials with respect
to any offsite location to which Hazardous Materials have, or are alleged to
have, migrated or been transported from the Property. Except as set forth on
Schedule 6.1(i), Seller and the Existing Venture are in compliance with, and
have heretofore complied with, all applicable Environmental Laws with respect to
the Property and as of the date hereof there are no violations of applicable
Environmental Laws at the Property which have not been remediated in accordance
with applicable Environmental Laws. Except as set forth on Schedule 6.1(i),
neither Seller nor the Existing Venture have received any written notice from
any governmental unit or other person that it or the Property is not in
compliance with any Environmental Law or that it has any liability with respect
thereto and there are no administrative, regulatory or judicial proceedings
pending or, to the knowledge of Seller, threatened with respect to the Property
pursuant to, or alleging any violation of, or liability under any Environmental
Law. Except as set forth on Schedule 6.1(i), neither Seller nor the Existing
Venture have installed any underground or above ground storage tanks on, under
or about the Property and no such tanks are located on, under or about the
Property.
(j) Except as provided in Schedule 6.1(j), there is no
litigation, including any arbitration, investigation or other proceeding by or
before any court, arbitrator or governmental or regulatory official, body or
authority which is pending or, to Seller's knowledge, threatened against Seller
or the Existing Venture relating to the Property, Seller's Interest or the
Transactions, there are no unsatisfied arbitration awards or judicial orders
against the Existing Venture and, to Seller's knowledge, there is no basis for
any such arbitration, investigation or
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other proceeding. Copies of all pleadings and other documents furnished or made
available by Seller to the Company with respect to the litigation described on
Schedule 6.1(j) are true, accurate and complete in all respects.
(k) No condemnation proceeding or other proceeding or action in
the nature of eminent domain is pending with respect to all or any part of the
Property, and, to Seller's knowledge, no condemnation proceeding or other
proceeding or action in the nature of eminent domain is pending with respect to
any property owned by a Party to the REA which is the subject of such REA and to
Seller's knowledge no Taking is threatened with respect to all or any part of
the Property, or any property owned by a Party to the REA which is the subject
of such REA.
(l) True, correct and complete copies of current real estate tax
bills with respect to the Property, other than tax bills sent to Tenants who
have the obligation to pay such taxes to the collecting authority, have been
delivered or made available to the Company. No application or proceeding is
pending with respect to a reduction or an increase of such taxes. There are no
tax refund proceedings relating to the Property which are currently pending and
neither Seller nor the Existing Venture, nor any Affiliate thereof has applied
for any such reduction.
(m) Except as set forth on Schedule 6.1(m), neither Seller nor
the Existing Venture have received (i) any written notice from any governmental
authority having jurisdiction over the Property of, and to Seller's knowledge
there does not exist, any violation of any law, ordinance, order or regulation
(including the ADA) affecting the Property, or any portion thereof, which has
not heretofore been complied with; or (ii) any written notice from any insurance
company, insurance rating organization or Board of Fire Underwriters requiring
any alterations, improvements or changes at the Property, or any portion
thereof, which has not heretofore been complied with.
(n) No approval, consent, waiver, filing, registration or
qualification with any third party, including 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 Seller
Closing Documents by Seller or the consummation of the Transactions (other than
notification of ownership change or transfer or reissuance of permits as may be
required under Environmental Laws).
(o) The Existing Venture is a limited partnership duly formed,
validly existing and in good standing under the laws of the State of Delaware
with full power and authority to own the Property and conduct the business now
being conducted by it.
(p) SMLLC is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware with full
power and authority to own the interest owned by it in the Existing Venture and
conduct the business now being conducted by it. SMLLC owns a .001% interest as a
general partner in the Existing Venture free and clear of all Liens and no
Person has any option or other right to acquire said interest or any portion
thereof, any other equity interest in SMLLC or the Existing Venture or any
security or instrument convertible into any such equity interest.
(q) Schedule 6.1(q) contains a true, complete and accurate list
including the amounts thereof of all policies of insurance with respect to the
Property, which policies are and will be kept in full force to and including the
Closing Date. All premiums for such insurance have
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been paid in full. To Seller's knowledge, neither Seller nor the Existing
Venture have performed, permitted or suffered any act or omission which would
cause the insurance coverage provided in said policies to be reduced, cancelled,
denied or disputed and neither Seller nor the Existing Venture have received (or
have knowledge of) any notice or request from any insurance company or Board of
Fire Underwriters (or organization exercising functions similar thereto)
cancelling or threatening to cancel any of said policies or denying or disputing
coverage thereunder.
(r) Neither Seller nor, to Seller's knowledge, the Existing
Venture has received notice that there is, and, to Seller's knowledge, there
does not now exist, any violation of any restriction, condition or agreement
contained in any easement, restrictive covenant or any similar instrument or
agreement affecting the Real Property or any portion thereof.
(s) The Existing Venture has no employees. The Existing Venture
does not maintain or sponsor any employee benefit plan, including any plans
subject to the Employer Retirement Income Security Act of 1974, as amended.
There are no pending claims or, to Seller's knowledge, any threatened claim
against the Existing Venture by any employee whose employment related to the
Property.
(t) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the Existing Venture's acquisition of the Property. No broker, finder,
investment banker or other person is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Seller.
(u) [Intentionally Deleted].
(v) All material documents and Books and Records have been
delivered or have been made available to the Company. All of the documents and
Books and Records that have been delivered or made available to the Company by
or on behalf of Seller, are true, correct and complete copies of what they
purport to be and have not been modified or amended, except as specifically
noted therein. All information set forth in the exhibits and schedules to this
Agreement is true, correct and complete in all material respects and not
misleading. Seller does not have any knowledge of any significant adverse fact
or condition relating to the Property, which has not been specifically disclosed
in writing by Seller to the Company.
(w) To Seller's knowledge, there are no lease brokerage
agreements, leasing commission agreements or other agreements providing for
payments of any amounts for leasing activities or procuring tenants (including
renewing leases at expanding spaces) with respect to the Property other than as
disclosed in Schedule 6.1(w).
(x) Except as set forth in Schedule 6.1(x) attached hereto,
neither Seller, nor any Affiliate of Seller (other than the Existing Venture),
owns (i) any right or interest in any real property adjacent to or neighboring
the Real Property including any outparcel or (ii) any right or interest in any
easement, right of way, development right, water or mineral right or any other
right which in any way affects the Real Property.
(y) All water, storm sewer/sanitary sewer, gas, electricity,
telephone and other utility lines or pipes necessary in order to operate the
Real Property as a first class regional shopping center (collectively, the
"Utility Equipment") are in existence at the boundary
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to the Real Property. All contemplated utility hook-up charges and fees are
included in the Budget.
(z) The Real Property has not suffered any casualty or other
material damage that has not been fully repaired.
(aa) Neither Seller nor the Existing Venture, has received written
notice from any Governmental Authority, from any Party to any REA, any Tenant or
any party to any other agreement or document, or otherwise has knowledge, that
the number of parking spaces at the Real Property is required under any Legal
Requirement, any Lease, or the REA, to be increased above the number of parking
spaces proposed on the date hereof.
(bb) The Existing Venture has (i) filed all tax returns required
to be filed under applicable Legal Requirements and (ii) timely paid all taxes
shown to be due and payable on such tax returns.
(cc) Except for mechanic liens which will be released or bonded
over in the ordinary course of construction, Seller has no knowledge of any
defects, liens, encumbrances, adverse claims or other matters insured against
under the Title Policy (collectively, the "Insured Matters") that could result
in the issuer of the Title Policy denying its liability to the Company on the
grounds that the Existing Venture or the Company had knowledge of any such
Insured Matters solely by reason of notice thereof imputed to it as a matter of
law through either Seller, the Existing Venture or any Affiliate thereof.
(dd) Except as set forth on Schedule 6.1(dd), neither Seller nor
the Existing Venture has received any written notice with respect to the Real
Property of any violation of law or municipal ordinances, orders or
requirements, that have been noted in or issued by any federal, state or
municipal department having jurisdiction, and which have not been fully remedied
and discharged of record.
(ee) To Seller's knowledge, Seller has provided the Company with
access to any and all certificates, licenses, permits, leases, ground leases,
operating agreements, books, records, documents and information relating to the
Real Property and the ownership and operation thereof which are in the
possession and control of Seller or the Existing Venture.
(ff) Seller is the owner of 100% of the interests in SMLLC. Seller
owns 100% of the Seller's Interest and Seller's Interest represents 100% of the
ownership interests in the Existing Venture.
6.2 Company Representations and Warranties. The Company represents and
warrants to Seller as follows:
(a) The Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Company of
this Agreement have been duly and validly authorized by all requisite action on
the part of the Company. This Agreement has been, and the Company Closing
Documents will be, duly executed and delivered by the Company. This Agreement
constitutes, and when so executed
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and delivered the Company Closing Documents will constitute, the legal, valid
and binding obligations of the Company, enforceable against it in accordance
with their terms.
(c) None of the execution, delivery or performance of this
Agreement or the Company Closing Documents by the Company does or will, with or
without the giving of notice, lapse of time or both, violate, conflict with,
constitute a default or result in a loss of rights under or require the approval
or waiver of or filing with any Person (including any governmental body, agency
or instrumentality) under (i) the organizational documents of the Company or any
material agreement, instrument or other document to which the Company is a party
or by which the Company is bound or (ii) any judgment, decree, order, statute,
injunction, rule, regulation or the like of a governmental unit applicable to
the Company, other than notification of ownership change or transfer or
reissuance of permits as may be required under Environmental Laws. (d) No
broker, finder, investment banker or other person is entitled to any brokerage,
finder's or other fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of the Company.
6.3 No Other Representations. Neither Seller nor any officer, director,
shareholder, member, agent, partner, employee, or representative of Seller (or
any officer, director, partner or employee of any agent of Seller) has made any
representation whatsoever regarding the Property or any part thereof, or
anything relating to the subject matter of this Agreement, including that the
Improvements and other construction on the Property can be completed for the
amounts set forth in the Budget, except as expressly set forth in this
Agreement, and the Company, in executing, delivering and performing this
Agreement, has not and does not rely upon any statement, information, or
representation to whomsoever made or given, whether to the Company or others,
and whether directly or indirectly, verbally or in writing, made by any person,
firm or corporation, except as expressly set forth in this Agreement or in the
Seller Closing Documents.
6.4 Knowledge Defined. For the purposes of this Agreement, "knowledge"
(including "actual knowledge" and other similar terms) with respect to Seller
and the Existing Venture shall mean matters as to which any of the following
individuals have actual knowledge without any duty or responsibility to make any
inquiry, review or investigation: (i) Xxxx Xxxxxxxxx, (ii) Xxxxxx X. Xxxxxxxx,
(iii) Xxxx Xxxxx, (iv) Xxxxxxx Xxxxxxxx, (v) Xxx Xxxxxxxx, (vi) Xxxxxx Xxxxx and
(vii) Xxxxx Xxxxxx. Actual knowledge shall not be deemed to exist merely by
assertion by the Company or Seller of a claim that any of the foregoing persons
should have known of such facts or circumstances, if such person did not have
actual knowledge thereof. Seller hereby represents and warrants that the
foregoing individuals are the individuals with the primary responsibility for
overseeing the sale, management, and operation of the Property at the level of
vice president and above.
ARTICLE VII
Additional Covenants
7.1 Record Retention. Until three (3) years after the Closing, the
Company shall provide Seller upon prior written notice and during normal
business hours with reasonable access to the Books and Records and, at Seller's
cost, copies of all or any portion thereof. The Company either shall retain such
Books and Records until the third anniversary of the date hereof or notify
Seller of its desire to dispose of such Books and Records pertaining to any
period prior to the Closing which have been delivered to the Company and turn
them over to Seller if Seller so requests. Seller agrees to keep, and to
instruct its agents, employees and representatives to keep, confidential such
Books and Records (and any information contained
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therein) and any information discovered in any such examinations and
inspections, except in connection with any legal proceedings or to the extent
required by law. Upon the Company's request, for a period of three (3) years
after the Closing, Seller shall make all of Seller's records with respect to the
Property which are in the possession or control of Seller available to the
Company for inspection, copying and audit by the Company's designated
accountants. The provisions of this Section 7.1 shall survive Closing.
7.2 Publicity. In no event shall either Seller or the Company issue any
press release or otherwise disclose any non-public information regarding this
Agreement or the Transactions unless the other party has consented thereto in
writing and to the form and substance of any such statement or disclosure (and
Seller and the Company agree not unreasonably to withhold, condition or delay
such consent); provided, however, that nothing herein shall be deemed to limit
or impair in any way any party's ability to disclose the details of or
information concerning this Agreement, the Transactions or the Property to the
extent necessary to such party's attorneys, accountants or other advisors or to
the extent such party reasonably deems necessary or desirable pursuant to any
court or governmental order or applicable securities laws or regulations or
financial reporting requirements. Further, to the extent necessary, either party
may disclose any information regarding this Agreement or the Transactions to its
direct or indirect constituent partners, members or shareholders, as the case
may be (and to counsel for such constituent partners, members and shareholders)
and as otherwise necessary to comply with the terms of this Agreement. Any
disclosure by a party's advisors or direct or indirect constituent partners,
members or shareholders shall be deemed a breach hereof by such party. If for
any reason this Transaction is not consummated, the Company will promptly return
to Seller all originals and copies of documents, reports and financial and other
information relating to the Property and to Seller which Seller has furnished to
the Company. The obligations of Seller and the Company under this Section 7.2
shall survive the termination hereof, however caused.
7.3 Assistance Following Closing. From and after the Closing, Seller at
the Company's reasonable expense shall provide reasonable assistance to the
Company in connection with the preparation of financial statements and bills and
the adjustment of losses and claims and the enforcement or settlement of any
such claims. Without limiting the foregoing, Seller shall, upon the reasonable
request of the Company from time to time, provide signed representation letters
with respect to revenues and expenses of Seller if required under GAAS to enable
the Company's accountants to render an opinion on the Company's financial
statements.
7.4 Further Assurances. Each of Seller and the Company agree, at any
time and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and other documents (and to
bear its own costs and expenses incidental thereto) and to take such other
actions as the other of them may reasonably request in order to carry out the
intent and purpose of this Agreement; provided, however, that neither Seller nor
the Company shall be obligated, pursuant to this Section 7.4 to incur any
expense of a material nature and/or to incur any material obligations in
addition to those set forth in this Agreement and/or its respective Closing
Documents.
7.5 Post-Closing Environmental Matters. Within forty-five (45) days of
Closing, or such shorter time necessary to avoid any fines or penalties, Seller
shall cause a qualified environmental consultant to develop, and shall
implement, a written Storm Water Pollution Prevention Plan ("SWPP PLAN") that
meets all applicable requirements of the stormwater construction general permit
(no. TXR101V28) covering the Property. If the SWPP is developed
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by an environmental consultant other than Law Engineering and Environmental
Services, Inc. ("LAW ENGINEERING") then upon completion, Seller shall submit the
SWPP Plan to Law Engineering, or such other qualified environmental consultant
reasonably acceptable to the Company (the "ENVIRONMENTAL CONSULTANT"), for
review. Seller shall promptly implement any provisions reasonably recommended by
the Environmental Consultant.
ARTICLE VIII
Indemnification
8.1 Indemnification by Seller. From and after the Closing, Seller shall
indemnify, defend and hold harmless the Company and its members, officers,
directors, managers, employees, representatives and agents, and any direct or
indirect partner, shareholder, officer, director or member of any member of the
Company, and their respective successors and assigns (collectively, the
"INDEMNIFIED COMPANY PERSONS") from and against any Losses asserted against,
incurred or suffered by any Indemnified Company Person that results from,
relates to or arises out of (a) the breach or inaccuracy of any representation
or warranty made by Seller in this Agreement or the Seller Closing Documents, or
(b) the breach or non-fulfillment by Seller of any of the covenants or
agreements of Seller under this Agreement or the Seller Closing Documents.
8.2 Indemnification by the Company. From and after the Closing, the
Company shall indemnify, defend and hold harmless Seller and its direct or
indirect shareholders, directors, officers, members, partners, employees and
agents, and their respective successors and assigns (collectively the
"INDEMNIFIED SELLER PERSONS") from and against any Losses asserted against,
incurred or suffered by any Indemnified Seller Person that results from, relates
to or arises out of (a) the breach or inaccuracy of any representation or
warranty made by the Company in this Agreement or the Company Closing Documents,
(b) the breach or non-fulfillment by the Company of any of the covenants or
agreements of the Company under this Agreement or the Company Closing Documents,
or (c) the Assumed Liabilities.
8.3 Indemnification Procedure.
(a) Subject to Section 8.3(d), the indemnified party (the
"INDEMNIFIED PARTY") shall give the indemnifying party (the "INDEMNIFYING
PARTY") prompt notice of any Losses (or potential Losses) which may be covered
under this Article VIII and such notice shall state the basis for the claim,
action or proceeding and the amount thereof (to the extent such amount is
determinable at the time when such notice is given). In the event the notice
relates to a claim, assertion, action, suit or proceeding by a thirty party
("THIRD PARTY CLAIM") for which indemnification is provided hereunder, the
Indemnified Party shall permit the Indemnifying Party (or its insurance company)
to assume the defense of such claim, action or proceeding and the Indemnifying
Party (or its insurance company) may (i) prior to the commencement of any
proceedings in connection with such Losses, undertake the negotiation of any
resolution of the dispute relating to such Losses, including in accordance with
the terms hereof any settlement or release, or (ii) undertake the defense of any
proceeding (including any alternative dispute resolution proceeding) regarding
such Losses by selecting legal counsel who shall be reasonably acceptable to the
Indemnified Party. Failure of the Indemnifying Party to notify an Indemnified
Party of its election to undertake the Indemnified Party's defense of a Third
Party Claim within a reasonable time, but in no event more than thirty (30) days
after notice thereof shall have been given to the Indemnifying Party, shall be
deemed a waiver by the Indemnifying Party of its right to undertake the defense
of such Third Party Claim. Xxxxxxx Xxxx & Xxxxxxxxx,
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Xxxx, Gerber & Xxxxxxxxx and counsel for the Indemnifying Party's insurance
company shall be deemed reasonably acceptable to the Indemnified Party.
(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 Losses
(subject to reimbursement to the limited extent provided in Section 8.3(e)), but
such negotiations or defense shall be controlled by counsel to the Indemnifying
Party.
(c) Except as provided in Section 8.3(e), 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, conditioned or delayed. The Indemnifying Party shall not, in the
defense of any such Third Party Claim, consent to the entry of any judgment or
award, or enter into any settlement, except in either event with the prior
consent of each Indemnified Party, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent any Indemnified Party declines
to consent to a bona fide offer of settlement or compromise, the Indemnifying
Party shall continue to defend, but the amount of such offer shall be the limit
of the Indemnifying Party's liability with respect to such claim, action or
proceeding with respect to the Indemnified Party that declined such offer.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
Indemnified Party's written consent (which consent may be withheld in the sole
and absolute discretion of the Indemnified Party) resolve any dispute or settle
or compromise any claim regarding Losses 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 Losses.
(d) The failure to give notice of a claim under this Article VIII
shall not release the Indemnifying Party of its obligations under this Article
VIII, except to the extent of the actual harm suffered thereby.
(e) In the event the Indemnifying Party fails after notice from
the Indemnified Party 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. 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 IX
Miscellaneous
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9.1 Survival. Except for the representations and warranties of Seller
set forth in Section 6.1(i), which representations and warranties and the
indemnification provisions relating thereto shall survive Closing indefinitely,
all other representations, warranties, covenants and agreements of Seller and of
the Company set forth in this Agreement shall survive until the Company ceases
to exist under the terms of the Operating Agreement.
9.2 Notices. Notices must be in writing and sent to the party to whom
or to which such notice is being sent, by (a) certified or registered mail,
postage prepaid and return receipt requested, (b) commercial overnight courier
service, or (c) delivered by hand with receipt acknowledged in writing, as
follows:
To the Company:
GGP/Homart II L.L.C.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
with a copy thereof to:
The Comptroller of the State of New York,
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Deputy Comptroller --
Investments and Cash Management
and
The Comptroller of the State of New York,
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Counsel
and
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
and
Clarion Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
To Seller:
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GGP Limited Partnership
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxx, Gerber & Xxxxxxxxx
Two North LaSalle Street, Suite 2200
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
All notices (i) shall be deemed given when received if delivered by hand or
overnight courier service or, if mailed as described above with appropriate
postage, after 5 business days and (ii) may be given either by a party or by
such party's attorneys. The cost of delivery shall be borne by the party
delivering the notice.
9.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute a single document when at least one counterpart has been executed and
delivered by each party hereto.
9.4 Amendments. Except as otherwise provided herein, this Agreement may
not be changed, modified, supplemented or terminated, except by an instrument
executed by the party hereto which is or will be affected by the terms of such
change, modification, supplement or termination.
9.5 Waiver. Each party shall have the right exercisable in its sole and
absolute discretion, but under no circumstances shall be obligated, to waive or
defer compliance by any other party with its obligations hereunder or to waive
satisfaction of any conditions contained herein for its benefit. No waiver by
any party of a breach of any covenant or a failure to satisfy any condition
shall be deemed a waiver of any other or subsequent breach or failure to satisfy
any other condition. All waivers of any term, breach or condition hereof must be
in writing.
9.6 Successors and Assigns. Subject to the provisions of Section 9.10,
the terms, covenants, agreements, conditions, representations and warranties
contained in this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
9.7 Third Party Beneficiaries. The provisions of this Agreement are
made for the benefit of the parties hereto, and their respective successors in
interest and assigns and are not intended for, and may not be enforced by, any
other person or entity.
9.8 Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
9.9 Governing Law. This Agreement has been made pursuant to and shall
be governed by the laws of the State of Delaware (without regard to conflicts of
law rules).
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9.10 Assignment. This Agreement may not be assigned or delegated by any
party without the written consent of the other except that the Company may
assign this Agreement to an Affiliate of the Company, it being acknowledged and
agreed by the Company that no such assignment shall relieve the Company of its
obligations under this Agreement.
9.11 Headings; Exhibits. The headings or captions 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.
9.12 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 also
shall include the singular where appropriate.
9.13 Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes any
prior written or oral understandings and/or agreement among them with respect
thereto.
9.14 Costs of Enforcement. In the event that any action is brought by
any party or parties to this Agreement against any other party or parties to
enforce rights under this Agreement, the prevailing party's or parties' costs in
such action, including reasonable attorneys' fees, shall be paid by the other
party or parties. Any amounts owing hereunder which are not paid when due shall
bear interest at the per annum rate equal to the prime rate of Bank of America,
N.A. (or any successor), as the same may change from time to time, plus four
percent.
9.15 Time of the Essence. Time is of the essence with regard to each
provision of this Agreement. If the final date of any period provided for herein
for the performance of an obligation or for the taking of any action falls on a
Saturday, Sunday or banking holiday, then the time of that period shall be
deemed extended to the next day which is not a Sunday, Saturday or banking
holiday. Each and every day described herein shall be deemed to end at 5:00 p.m.
Central Time.
9.16 Indemnification Against Broker Claims. Seller shall indemnify,
defend and hold harmless the Company from and against all loss, liability,
damages, costs and expenses (including reasonable counsel fees) resulting from
any claim that may be made by any broker or other person claiming to have dealt
with Seller in connection with the Transactions, for a commission, fee or other
compensation by reason of the Transactions including any loss, liability, costs
and expenses (including reasonable counsel fees) incurred in enforcing this
indemnity. The Company shall indemnify, defend and hold harmless Seller from all
loss, liability, costs and expenses (including reasonable counsel fees)
resulting from any claim that may be made by any broker or other person claiming
a commission, fee or other compensation by reason of having dealt with the
Company in connection with the Transactions, including any loss, liability,
costs and expenses (including reasonable counsel fees) incurred in enforcing
this indemnity. The provisions of this Section 9.16 shall survive the Closing or
termination of this Agreement.
9.17 Arbitration. In the event of any dispute in connection with the
terms and provisions of this Agreement, the parties agree to submit such dispute
to arbitration in accordance with the provisions of Section 14.13 of the
Operating Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto on the day and year first above written.
SELLER: COMPANY:
GGP LIMITED PARTNERSHIP, GGP/HOMART II L.L.C.,
a Delaware limited partnership a Delaware limited liability company
By: GENERAL GROWTH PROPERTIES, INC.
a Delaware corporation,
its general partner By: /s/ Xxxx Xxxxx
------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
By: /s/ Xxxx Xxxxx
---------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
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LIST OF EXHIBITS AND SCHEDULES
Exhibits/Schedule Description
Exhibit A Legal Description of the Land
Exhibit B Permitted Exceptions
Exhibit C [Intentionally Deleted]
Exhibit D Budget
Exhibit E Schedule of Costs
Schedule 1.1-1 Anchors
Schedule 1.1-2 Personalty
Schedule 6.1(e) Leases
Schedule 6.1(f) Claims under REA
Schedule 6.1(g) List of all Contracts
Schedule 6.1(h) Permits and Licenses
Schedule 6.1(i) Environmental Disclosure
Schedule 6.1(j) Pending or Threatened litigation
Schedule 6.1(m) Notices for Governmental Authorities
Schedule 6.1(q) Insurance Policies
Schedule 6.1(w) Lease Brokerage Agreements
Schedule 6.1(x) Seller's Rights in Neighboring Properties
Schedule 6.1(dd) Notices of Uncured Violations
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