Exhibit 99.1
AGREEMENT FOR SALE
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THIS AGREEMENT FOR SALE ("Agreement") is dated as of March 15, 2002
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(the "Effective Date"), by and between MOUNT PLEASANT KPT LLC, a Delaware
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limited liability company ("Seller"), and DRA ADVISORS, INC., a Delaware
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corporation ("Buyer").
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IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer agree as follows:
1. Property Included in Sale. Seller hereby agrees to sell and convey
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to Buyer, and Buyer hereby agrees to purchase from Seller, subject to the terms
and conditions set forth herein, all of Seller's right, title and interest in
and to the following:
(a) That certain land located in Xxxxx Xxxxxxxx, Xxxxxxxxxx Xxxxxx,
Xxxxx Xxxxxxxx, more particularly described on Exhibit A-1 and Exhibit A-2
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attached hereto; and all rights, privileges and easements appurtenant thereto
(collectively, the "Land").
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(b) The ground lessee's interest in that certain Lease Agreement
between Xxxxxx Xxxxxx XxXxxxxxx ("XxXxxxxxx") and ASJ Partnership Group, a South
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Carolina general partnership ("ASJ"), as the original lessee, dated May 19,
1995, as evidenced by a certain Memorandum of Lease for Recording, dated or even
date therewith and recorded on May 24, 1995 in the RMC Office for Charleston
County, South Carolina (the "RMC Office") in Book S-255 at Page 255, ASJ's
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interest in which was assigned to AJS Group, LLC, a South Carolina limited
liability company ("AJS"), by a certain Assignment of Ground Lease dated as of
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November 3, 1997, and amended by that certain Amendment to Ground Lease dated
November 21, 1997 and recorded on November 25, 1997 in the RMC Office in Book
N-293 at Page 458 and that certain Amendment to Memorandum of Lease for
Recording dated April 9, 1998 and recorded on April 10, 1998 in the RMC Office
in Book T-300 at Page 618, and that certain Third Amendment to Ground Lease
dated June 14, 1999 and recorded on June 23, 1999 in the RMC Office, AJS's
interest in which was assigned to Seller by that certain Assignment of Ground
Lease dated April 9, 1998, and amended by that certain Fourth Amendment to
Memorandum of Lease for Recording dated August 6, 1999 and recorded on August
27, 1999 in Book J-333 at page 386 (as amended and assigned, the "Ground
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Lease"), relating to that certain real property more particularly described on
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Exhibit A-3 attached hereto (collectively, the "Ground Lease Land").
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Together with all improvements on the Land and the Ground Lease
Land, including, without limitation, the multi-story shopping center commonly
known as the Mount Pleasant Towne Centre (collectively, the "Improvements"), and
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all easements, rights of way, appurtenances and all other benefits attached to
and running with the Land and the Ground Lease Land (the "Benefits"). The Land,
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the Improvements, the Benefits and all of Seller's right, title and interest in
and to the Ground Lease Land are sometimes collectively referred to as the "Real
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Property".
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(c) The landlord's interest in all Leases (as more particularly
described in Section 4(b) below) relating to occupancy of the Real Property by
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anyone other than Seller.
(d) All equipment, machinery, keys, furniture, furnishings, supplies
and other tangible personal property owned by Seller, and Seller's interests in
any such property leased by Seller,
located on and used exclusively in connection with the Real Property and listed
on Exhibit Q (collectively, the "Tangible Personal Property").
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(e) To the extent assignable, and to the extent Seller's obligations
thereunder are expressly assumed by Buyer pursuant to this Agreement, all
service, supply, equipment rental and other contracts, leases, and other
obligations relating to the operation of the Property (collectively, the
"Contracts")
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(f) To the extent assignable, all intangible personal property owned
by Seller, if any, and related to the Real Property, including, without
limitation: all trade names and trade marks associated with the Real Property,
including Seller's rights and interests, if any, in the name "Mount Pleasant
Towne Centre"; all warranties and guarantees related to the Real Property and
listed on Exhibit R, the Improvements or the Tangible Personal Property;
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governmental permits, approvals and licenses; all rights of Seller under that
certain Agreement dated December 19, 2000 between AJS Group, LLC and Seller
(including specifically the rights of Seller under Section 10(n) thereof); and
all rights to files relating to the ownership and operation of the Property
following the Closing Date (collectively, the "Intangible Property").
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All of the items referred to in Sections 1(a) through (f) above are
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hereinafter collectively referred to as the "Property."
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2. Purchase Price; Loan Assumption.
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(a) The purchase price for the Property is Fifty-Five Million Two
Hundred Fifty Thousand Dollars ($55,250,000.00) (the "Purchase Price"), subject
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to the credits, adjustments and prorations provided for in this Agreement.
(i) The Purchase Price shall be paid at Closing by (i)
assumption by Buyer of the "Existing Mortgage", as more particularly provided in
Section 5(d), below, and (ii) payment of the balance of the Purchase Price, as
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adjusted (the "Cash Portion") as more particularly provided in Section 6(c)(i),
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below.
3. Deposit.
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(a) Within two (2) business days following the execution and delivery
of this Agreement by Buyer, Buyer shall deliver to TSNY of New York City, Inc.,
Xxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000 (the "Title Company") in escrow
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the sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) (the "Deposit").
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The Deposit shall be held and released by the Title Company in accordance with
the provisions of this Agreement and the escrow provisions attached as Exhibit
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B. The Title Company shall designate, by written notice to Buyer and Seller, an
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agent in the locality of the Property to serve as custodian of all documents to
be delivered into escrow pursuant to this Agreement and to handle the
recordation of all documents to be admitted to record. At the election of Buyer,
the Deposit may be in the form of an irrevocable, unconditional letter of credit
in a form and issued by an institution approved by Seller, and payable to the
order of Seller. Contemporaneously with the execution and delivery of this
Agreement by Buyer, Buyer shall cause the Title Company to deliver to Seller a
letter from Fidelity National Title Insurance Company of New York, in form and
substance acceptable to Seller, insuring the fidelity of and the performance of
this Agreement by Title Company.
(b) All cash sums constituting the Deposit shall be held in an
interest-bearing account or in investments approved by Seller and Buyer and
interest accruing thereon shall be for the
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account of Buyer. All interest earned on the Deposit shall be considered a
portion of the Deposit. In the event the sale of the Property as contemplated
hereunder is consummated, the Deposit shall be applied to the Purchase Price at
Closing (as hereinafter defined) in accordance with the provisions of this
Agreement. In the event this Agreement is terminated by either party or the
Closing does not otherwise take place, the disposition of the Deposit shall be
governed by the applicable provisions of this Agreement and the escrow
provisions attached as Exhibit B.
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(c) Notwithstanding the foregoing, all funds to be deposited with
the Title Company pursuant to this Agreement shall be made payable to the order
of and deposited in escrow accounts in the name of Fidelity National Title
Insurance Company of New York, to be held and disbursed in accordance with the
provisions of this Agreement.
4. Review Period.
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4.1 During the period commencing on the Effective Date and ending on
April 8, 2002 (the "Review Period"), Buyer, at its sole risk, cost and expense,
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shall have the right to examine, inspect and investigate the Property, and to
determine, in Buyer's sole and absolute discretion, whether to consummate the
purchase of the Property, subject to the limitations contained in this Section
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4. Buyer's investigations may include, without limitation, the following:
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(a) Review and approval of title to the Property. In furtherance
thereof, Buyer shall obtain at Buyer's expense:
(i) a title insurance commitment for the Real Property (the
"Commitment"), issued by the Title Company, accompanied by copies of all
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documents referred to in the Commitment. The Commitment shall evidence the Title
Company's agreement to issue an Owner's Policy of Title Insurance ("Title
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Policy"), in the full amount of the Purchase Price.
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(ii) an ALTA survey of the Real Property by a licensed
surveyor or civil engineer, certified to, Buyer and in sufficient detail to
provide the basis for the Title Policy (the "Survey").
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Buyer acknowledges that, prior to the Effective Date, Buyer has
reviewed the Owner's Policy of Title Insurance No. 85-01-514251dated November
10, 1998 issued by Lawyers Title Insurance Company, the Leasehold Owner's Policy
of Title Insurance No. 000-00-000000 dated August 27, 1999 issued by Lawyers
Title Insurance Company, the Owner's Policy of Title Insurance No. 00-00-000000
dated May 12, 1999, issued by Lawyers Title Insurance Company, and the Loan
Policy of Title Insurance No.41-0023-08-0000752 dated December 20, 2000 issued
by Chicago Title Insurance Company (collectively, "Seller's Title Policy"), and
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the ALTA/ACSM Land Title Survey of the Real Property dated November 22, 2000
prepared by Xxxxxx & Xxxxxx Engineering Co. ("Seller's Survey") as a part of the
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Initial Due Diligence Materials (as hereinafter defined).
(b) Review and approval of all leases and rental agreements
relating to the Property, and any guarantees applicable thereto, in effect as of
the Effective Date (the "Leases").
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(c) Review and approval of copies and a list of all Contracts and
all operating statements and other financial records and reports relating to the
operation of the Property as Buyer may reasonably request (collectively, the
"Reports").
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(d) Review and approval of the notes, mortgages or deeds of trust, and
other documents (collectively, the "Mortgage Documents") evidencing, securing or
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otherwise relating to that certain deed of trust loan (the "Existing Mortgage")
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secured by, among other things, a certain Deed of Trust for the benefit of GMAC
Commercial Mortgage Corporation ("Lender") and encumbering the Property, having
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an outstanding principal balance of approximately $45,900,000 as of March 1,
2002. The Existing Mortgage proceeds have been fully disbursed, but Lender has
retained from those proceeds the sum of $1,000,000 as a collateral reserve
escrow (the "Collateral Reserve Escrow"), as more particularly described in the
Mortgage Documents.
(e) Review and approval of that certain Declaration of Covenants,
Conditions and Restrictions Market Center dated April 27, 1997 by AJS, as
Declarant, and recorded in the RMC Office in Book E-283 at Page 433, as amended
(as amended, the "Market Center Declaration"). At Closing, Buyer shall accept an
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assignment of and assume all of Seller's duties and obligations as "Declarant"
under the Market Center Declaration accruing from and after the Closing.
(f) Review and approval of the documents evidencing or otherwise
relating to the Market Center Association, Inc. (the "Association"). At Closing,
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Buyer shall accept an assignment of and assume all of Seller's duties and
obligations relating to the Association accruing from and after the Closing.
(g) Entry upon the Property to make and perform physical and other
non-invasive inspections and investigations of the Property. Buyer shall be
permitted to enter the Property at reasonable times during normal business hours
from time to time during the Review Period (and thereafter until the Closing
Date if this Agreement remains in effect) following not less than one (1) day's
prior written or oral notice to Xxxx Xxxxx or Xxxxx Xxxxxxxx (collectively, the
"Seller Representatives") to conduct its inspections and investigations. Buyer
agrees not to unreasonably interfere with the operations of Seller or any
tenants of Seller. Buyer agrees to indemnify and hold Seller harmless against
any claims for bodily injury, property damage and mechanics' liens, and Seller's
attorneys' fees arising out of any actions of Buyer or its agents or
representatives on the Property in the course of such activities. If any
inspection or test disturbs the Property, Buyer shall restore the Property to
substantially the same condition as existed prior to any such inspection or
test. At Seller's request, Buyer shall provide Seller with evidence of insurance
reasonably acceptable to Seller in an amount not less than $1,000,000 per
occurrence, naming Seller as an additional insured, to insure against Buyer's
activities under this paragraph. Buyer shall not contact any tenants of the
Property without first providing one or more Seller Representatives with written
or oral notice and, if Seller has provided prior written notice as to such
tenant to Buyer in writing, a reasonable opportunity for a person designated by
Seller to participate in such discussions. At Buyer's request, Seller shall
schedule tenant interviews at which a representative of Seller may be present.
(h) Identify and confirm the availability from all applicable private
and governmental authorities of all zoning, platting, site plan, and other
applicable approvals, permits, licenses and easements. Buyer shall not contact
any governmental authority having jurisdiction over the Property without first
providing one or more Seller Representatives with written or oral notice and a
reasonable opportunity to participate in such discussions. Notice to Seller
shall not be required with respect to a customary code compliance review of
public records.
(i) Review and determine the existence, availability and sufficiency
of connections to electricity, gas, telephone, cable, sewer, water, storm drain
facilities and all other utilities to service the Property.
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(j) Review of the Tangible Personal Property.
(k) As a condition of Buyer's obligation to proceed beyond the
expiration of the Review Period, at least one business day prior to the
expiration of the Review Period, Seller shall have delivered to Buyer an
agreement executed by New England Audio Co., Inc. ("NEAC") or Tweeters Home
Entertainment Group, Inc. ("Tweeters"), unconditionally (except as hereinafter
provided) committing to lease space currently occupied by Xxxxxx Xxxxxxx,
substantially in accordance with the terms reflected in the draft lease
delivered to Buyer prior to the Effective Date (Seller agreeing to use good
faith efforts to incorporate comments to such draft provided by Buyer), such
lease to be subject to and conditioned upon the termination of the Xxxxxx
Xxxxxxx lease, and such lease to be guaranteed by Tweeters if NEAC is the
designated tenant; provided, however, that if Seller is unable following good
faith efforts to obtain such agreement at least three days prior to the
expiration of the Review Period, Seller shall have the right to extend the
period for delivery of such agreement until the date which is three (3) business
days prior to the Closing Date by delivery of written notice of its election at
least one day prior to the expiration of the Review Period, in which event the
delivery of such agreement shall be a condition to Buyer's obligation to close
in accordance with the provisions of Section 5, below.
(l) Review of all warranties and guarantees to be assigned to Buyer at
Closing and all certificates of occupancy for the Property.
4.2 Seller has previously made available to Buyer or Buyer has obtained,
directly or through access to Seller's "DocuShare" service, copies of Seller's
Title Policy (and all exceptions to title noted therein), Seller's Survey, the
Commitment dated December 21, 2001, and copies of all Leases and Mortgage
Documents, copies of all Contracts and Reports, copies of the documents relating
to the organization of the Association, and other materials more particularly
set forth on Exhibit L attached hereto (collectively, the "Initial Due Diligence
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Materials"). Following the Effective Date, copies of all other relevant
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documents relating to the Property which Buyer may reasonably request shall be
made available to Buyer at the Property or at Seller's principal place of
business, as applicable, upon reasonable prior notice during normal business
hours. Subject to the representations and warranties contained in Section 8,
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below, Seller makes no representations or warranties, express or implied,
regarding the adequacy, accuracy, truth, completeness, or content of any
document, instrument, agreement, report, correspondence, or other information,
written or oral, concerning the Property delivered or made available to Buyer by
Seller or any person acting on Seller's behalf.
4.3 Prior to the expiration of the Review Period, Buyer shall, by written
notice to Seller, (A) accept or waive any objections to its reviews and
inspections, in which event, the parties shall proceed to Closing in accordance
with the terms of this Agreement (such notice, a "Continuation Notice"), (B)
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advise Seller in writing of its objections, and request that Seller remedy such
objections prior to the Closing Date (an "Objection Notice"), or (C) elect to
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terminate this Agreement (a "Termination Notice"). Failure by Buyer to deliver a
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Termination Notice, Continuation Notice or an Objection Notice prior to the
expiration of the Review Period shall be considered for all purposes under this
Agreement to constitute Buyer's election to accept or waive any objections and
proceed to Closing, subject to the remaining terms of this Agreement. In the
event Buyer delivers an Objection Notice, Seller shall, by written notice to
Buyer within five (5) days following delivery of the Objection Notice, elect to
remedy all, some or none of Buyer's objections described in the Objection Notice
("Seller's Election Notice"). Within five (5) days following delivery of
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Seller's Election Notice, Buyer shall deliver to Seller either a Continuation
Notice or (but only if Seller does not agree to remedy all of Buyer's
objections) a Termination Notice; failure to deliver a Termination Notice shall
be deemed to be Buyer's election to proceed to Closing, subject to Seller's
compliance with the elections set forth in Seller's Election Notice.
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4.4 Buyer acknowledges that, prior to the Effective Date, Buyer has been
provided with an opportunity to review the Initial Due Diligence Materials.
Notwithstanding anything to the contrary contained in this Agreement, Buyer
hereby waives any right to object to, or deliver an Objection Notice or a
Termination Notice as a result of, any matter disclosed in the Initial Due
Diligence Materials, and all such materials are hereby deemed approved and
accepted except to the extent that, following the Effective Date, Buyer receives
new, additional information which (i) materially and adversely affects the value
of the Property, and (ii) was not expressly disclosed in the Initial Due
Diligence Materials. For purposes of this Agreement, unless otherwise expressly
provided, a matter "materially and adversely" affects the value of the Property
if the disclosure of such matter is reasonably likely to result in a decrease in
the fair market value of the Property or require expenditures to correct of more
than $350,000 in the aggregate.
5. Conditions to Closing. In addition to any express conditions of Closing
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located elsewhere in this Agreement, the following are conditions precedent to
the obligations of Buyer, on the one hand, and Seller, on the other hand (or, if
so provided, of Buyer only), to consummate the transactions hereunder and the
purchase of the Property:
(a) As a condition of each party's obligation to close, all of the
other party's representations and warranties contained in or made pursuant to
this Agreement shall have been true and correct in all material respects as of
the Effective Date and, subject to the Initial Due Diligence Materials or any
other supplemental information delivered to Buyer by Seller, or otherwise
obtained by Buyer (as evidenced by the actual receipt by Xxxxxx Xxxxx or Xxxxx
Xxxx), prior to the expiration of the Review Period (collectively, the "Due
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Diligence Materials"), as of the Closing Date.
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(b) As a condition of each party's obligation to close, the other party
shall have performed its obligations hereunder in all material respects and
shall have tendered all deliveries to be made by it on or before the Closing
Date or as otherwise required under this Agreement.
(c) As a condition of Buyer's obligation to close, at least three (3)
business days prior to the Closing Date, there shall have been delivered to
Buyer estoppel certificates (the "Tenant Estoppels") substantially in the form
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attached hereto as Exhibit C or, as to each Major Tenant (as hereinafter
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defined) and each national "credit" tenant (such as The Gap and other national
chains), such form as may be required under the applicable Leases or as may be
customarily provided by such tenant, from Belks, Xxxxxx & Noble, Old Navy, Bed
Bath & Beyond and Consolidated Theatres (collectively, the "Major Tenants"), and
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from tenants whose premises aggregate at least seventy percent (70%) of the
remaining leased rentable square footage of the Improvements and the buildings
located on land which is ground leased to tenants, excluding Xxxxxx Xxxxxxx
(from whom no Tenant Estoppel shall be required) (it being agreed by Seller that
it will request that all tenants with the exception of Major Tenants execute
Tenant Estoppels in the form of Exhibit C). The Tenant Estoppels must not
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disclose facts or information (including claims of any default by Seller) which
(A) was not disclosed or contradicts facts or information which was disclosed in
the Due Diligence Materials or constitutes a material misrepresentation by
Seller under this Agreement, and (B) materially and adversely affects the value
of the Property. Notwithstanding the foregoing, Buyer agrees to accept a Tenant
Estoppel from Consolidated Theatres, so long as such Tenant Estoppel is
substantially in the form of Exhibit C-2 and does not indicate a material and
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adverse variance from the Lease delivered or made available to Buyer other than
as described in Exhibit C-2, and Seller obtains the joinder of the guarantor of
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the applicable Lease. Buyer agrees to provide Seller with written notice of any
Tenant Estoppels which do not satisfy the condition described in this Section
5(c), and any Tenant Estoppels for which such notice is not delivered within
three (3) business days after receipt shall be deemed satisfactory and approved.
From and after the Effective Date, Seller shall use reasonable diligence and
good faith to request tenants to provide the required Tenant Estoppels at least
three (3) business days prior to the Closing Date, and shall use reasonable
diligence and
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good faith to request that such tenants cause any lease guarantor to join in the
applicable Tenant Estoppel; provided, however, that the failure of any guarantor
(other than under the Consolidated Theatres lease) to join in any Tenant
Estoppel shall not be considered a failure of any condition or a breach of any
provision of this Agreement. Seller shall promptly deliver to Buyer any Tenant
Estoppels received by Seller under this provision, even if such Tenant Estoppels
are incomplete or subject to further modification.
(d) As a condition of each parties obligation to close, at least three
(3) days prior to the Closing Date, Lender shall have executed and delivered to
Title Company in escrow an agreement acceptable to Lender and reasonably
acceptable to Buyer and Seller (the "Assumption Agreement") providing for (i)
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Lender's consent to the sale of the Property to Buyer, (ii) the assumption by
Buyer of the obligations of the borrower and any guarantor/indemnitor under the
Mortgage Documents from and after the Closing, and the release of Seller from
any continuing liability thereunder (to the extent expressly permitted by the
Mortgage Documents), (iii) approval of KPT Properties, L.P., or an affiliated
entity, to act as Buyer's property management and leasing agent with respect to
the Property in accordance with the Management Agreement (as hereinafter
defined), and (iv) to the extent required under the Mortgage Documents, Lender's
consent to any agreement contemplated under Sections 4(k), 7(c), 7(d), or 7(e).
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From and after the Effective Date, Buyer shall use reasonable diligence and good
faith to obtain Lender's approval, negotiate the Assumption Agreement and to
satisfy all conditions and requirements of Lender in connection therewith prior
to the Closing Date. In addition, at least one (1) business day prior to
Closing, Lender shall have delivered to Buyer Lender's written acknowledgement
of the outstanding balance due under the Mortgage Documents, the outstanding
balance of the Collateral Reserve Fund described in the Mortgage Documents
(which shall be not less than $1,000,000.00) and any additional collateral
deposits, escrows or holdbacks retained by Lender, and the absence (to Lender's
knowledge) of any defaults by Seller under the Mortgage Documents, either in the
form of a provision incorporated in the Assumption Agreement or a separate
instrument provided by Lender. From and after the Effective Date, Seller shall
use reasonable diligence and good faith to assist Buyer in obtaining Lender's
approval, negotiating the Assumption Agreement and, to the extent required by
the Assumption Agreement or otherwise reasonably required by Lender, satisfying
all conditions and requirements of Lender in connection therewith prior to the
Closing Date. Notwithstanding the foregoing, Buyer agrees to use reasonable
efforts to satisfy this condition on or before April 8, 2002.
(e) As a condition of Buyer's obligation to close, at least three (3)
business days prior to the Closing Date, there shall have been delivered to
Buyer an estoppel certificate executed by the ground lessor under the Ground
Lease in the form of Exhibit C-3 attached hereto. From and after the Effective
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Date, Seller shall use reasonable diligence and good faith to request such
ground lessor to provide the required estoppel certificate prior to the Closing
Date.
(f) As a condition of Buyer's obligation to close, the Title Company
shall have agreed (subject only to the performance by such party of its
obligations hereunder) to issue the Title Policy, insuring fee and leasehold
title to the Real Property vested in Buyer, subject only to the following
exceptions (the "Permitted Exceptions"): (i) matters shown in Seller's Title
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Policy or Seller's Survey, (ii) matters disclosed in the Commitment, and (iii)
the Ground Lease and the Existing Mortgage. The Title Policy shall include such
endorsements as are reasonably requested by Buyer and customarily issued in the
State of South Carolina, as confirmed by Buyer during the Review Period. The
Title Company shall also have agreed to issue an endorsement to Lender's
mortgagee title insurance policy if requested by Lender.
(g) As a condition to Buyer's obligation to close, prior to the Closing
Date, no Lease for any Major Tenant shall have been terminated nor shall any
Major Tenant have vacated its premises
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nor announced publicly or by a written notice delivered to Seller its intention
to vacate its premises prior to the expiration date specified in the
applicable lease.
(h) As a condition of Buyer's obligation to close, at least three (3)
days prior to the Closing Date, there shall have been delivered to Buyer an
estoppel certificate executed by the Association in the form of Exhibit M
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attached hereto. Seller shall use reasonable diligence and good faith to provide
the required estoppel certificate at least three (3) days prior to the Closing
Date.
So long as a party is not in default hereunder, if any condition to such
party's obligation to close described in this Section 5 has not been satisfied
as of the Closing Date, such party may, in its sole discretion, (A) terminate
this Agreement by delivering written notice to the other party on or before the
Closing Date, in which event the Deposit shall be returned to Buyer, or (B)
elect to consummate the transactions notwithstanding the non-satisfaction of
such condition, in which event such party shall be deemed to have waived any
such condition. Notwithstanding the foregoing, the failure of a condition due to
the breach of a party shall not relieve such breaching party from any liability
it would otherwise have hereunder.
6. Closing and Escrow.
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(a) Upon execution of this Agreement, the parties shall deposit an
executed counterpart of this Agreement with the Title Company and this
instrument shall serve as the instructions to the Title Company as the escrow
holder for consummation of the purchase and sale contemplated hereby. Seller and
Buyer agree to execute such additional and supplementary escrow instructions as
may be appropriate to enable the escrow holder to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control.
(b) The closing ("Closing") hereunder shall be held and delivery of all
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items to be made at the Closing under the terms of this Agreement shall be made
at the office of Title Company, on or before 2:00 p.m. EST on April 12, 2002
(the "Closing Date"); provided, however, that Seller shall extend the Closing
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Date on or more times for a period of up to thirty (30) days in the aggregate in
order to satisfy any of the conditions set forth in Section 5, above, which have
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not been satisfied at least three (3) days prior to the then-scheduled Closing
Date.
(c) Prior to 1:00 p.m. EST on the Closing Date, Buyer shall deliver the
following into escrow with the Title Company:
(i) The Cash Portion of the Purchase Price, reduced by the amount
of the Deposit, subject to the credits, adjustments and prorations described in
this Agreement, in the form of a wire transfer of good federal funds.
(ii) A counterpart of an Assignment and Assumption of Ground Lease
in the form attached hereto as Exhibit D, duly executed by Buyer.
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(iii) A counterpart of the Assumption Agreement, duly executed by
Buyer and Lender, and such other documents and deliveries as may be required by
Lender to achieve lender's consent to or otherwise effect conveyance of the
Property subject to the Existing Mortgage.
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(iv) A counterpart of the Assignment and Assumption of Leases in
the form attached hereto as Exhibit E (modified, if applicable, to the extent of
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any agreements reached pursuant to Sections 4(k)or 7(c) - (e) hereof), duly
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executed by Buyer.
(v) A counterpart of the Assignment and Assumption of Service
Contracts, Warranties and Guaranties and Other Intangible Property in the form
attached hereto as Exhibit F, duly executed by Buyer. This agreement will
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include provision for the assignment to and assumption of all rights and
obligations of Seller under the Contracts listed on Exhibit N (the "Assumed
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Contracts"), and the Market Center Declaration and other covenants, conditions
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and restrictions of record, from and after the Closing Date.
(vi) A counterpart of the Property Management and Leasing
Agreement between Buyer and KPT Properties, L.P., (the "Management Agreement"),
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duly executed by Buyer. Buyer and Seller agree to negotiate in good faith so as
to agree upon a commercially reasonable Management Agreement, substantially in
the form attached hereto as Exhibit J, reflecting terms customary in the
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geographical area where the Property is located for property management
agreements pertaining to first class shopping centers similar to the Property,
prior to the expiration of the Review Period.
(vii) Such documents as may be necessary or appropriate to
evidence the assignment and assumption of all of Seller's right, title, interest
and obligations arising from and after the Closing Date (A) as the "Declarant"
under the Marker Center Declaration, and (B) in and with respect to the
Association.
(viii) Such resolutions, authorizations, or other trust documents
or agreements relating to Buyer and its beneficiaries and trustee(s) as shall be
reasonably required in connection with this transaction.
(ix) A counterpart of the Closing Statement identifying the funds
to be received and disbursed in accordance with the provisions of this
Agreement, duly executed by Buyer.
(x) A document wherein Buyer confirms as of the Closing Date
that all representations and warranties of Buyer set forth in Section 9 are
true, correct and complete in all material respects with the exception of (A)
matters disclosed in such document, and (B) any other supplemental information
obtained by Seller (as evidenced by the actual receipt by Xxxxxx X. Xxxxx III),
prior to the Closing, duly executed by Buyer.
(xi) Any other documents, instruments, records, correspondence or
agreements called for hereunder or reasonably requested by the Title Company and
the Lender which have not previously been delivered.
Seller may waive compliance on Buyer's part under any of the foregoing
items by an instrument in writing.
(d) On the Closing Date, Seller shall deliver the following into escrow
with the Title Company:
(i) A special warranty deed (the "Deed"), in the form that is
----
customary in the state where the Property is located and reasonably acceptable
to the Title Company, duly executed and
9
acknowledged by Seller, conveying to Buyer fee simple title to the
Land and the Improvements located thereon, subject only to the Permitted
Exceptions.
(ii) A counterpart of the Assignment and Assumption of Ground
Lease in the form attached hereto as Exhibit D, duly executed and acknowledged
---------
by Seller.
(iii) A duly executed Xxxx of Sale in the form attached hereto
as Exhibit G (the "Xxxx of Sale"), duly executed by Seller.
--------- ------------
(iv) A duly executed counterpart of the Assignment and
Assumption of Leases in the form attached hereto as Exhibit E (modified, if
---------
applicable, to the extent of any agreements reached pursuant to Sections 4(k) or
-------------
7(c) - (e) hereof).
---- --
(v) A duly executed counterpart of the Assignment and
Assumption of Service Contracts, Warranties and Guaranties and Other Intangible
Property in the form attached hereto as Exhibit F.
---------
(vi) A counterpart of the Assumption Agreement, duly executed
by Seller.
(vii) Counterparts of the documents described in Section
-------
6(c)(vii), above, duly executed by Seller.
---------
(viii) A duly executed Notice to Tenants for each tenant of the
Property in the form attached hereto as Exhibit H.
---------
(ix) A counterpart of the Management Agreement, duly executed
by KPT Properties, L.P.
(x) An updated Tenant List (as defined in Section 8(g),
below) for the Property, certified to be true, correct and complete, as well as
a schedule of income and expenses to be prorated, adjusted or credited in
accordance with Section 6(f), below, a list of all security deposits, and a
schedule of all tenant arrearages, each certified to be true, correct and
complete in all material respects.
(xi) An affidavit that Seller is not a "foreign person" within
--------------
the meaning of Section 1445(e)(3) of the Internal Revenue Code of 1986, as
amended (the "Code") in the form attached hereto as Exhibit I.
---- ---------
(xii) A duly executed affidavit or certificate, in favor of the
Title Company, in the form customarily provided by Seller and its affiliates or
otherwise reasonably acceptable to Seller, sufficient to remove the exceptions
from the Title Policy for mechanic's lien and parties in possession (other than
the tenants shown on the Tenant List).
(xiii) A counterpart of the Closing Statement, duly executed by
Seller.
(xiv) A document wherein Seller confirms as of the Closing Date
that all representations and warranties of Seller set forth in Section 8 are
true, correct and complete in all material respects with the exception of (A)
matters disclosed in such document, (B) matters disclosed in the Due Diligence
Materials, and (C) any other supplemental information delivered to Buyer by
Seller, or otherwise obtained by Buyer (as evidenced by the actual receipt by
Xxxxxx Xxxxx or Xxxxx Xxxx), prior to the Closing, duly executed by Seller.
10
(xv) Any other documents, instruments, records,
correspondence or agreements called for hereunder or reasonably requested by the
Title Company or the Lender which have not previously been delivered.
Buyer may waive compliance on Seller's part under any of the foregoing
items by an instrument in writing.
(e) Upon receipt of all the funds and documents described in
Sections 6(c) and 6(d), above, and provided the Title Company is in a position
------------- ----
to issue the Title Policy, the Title Company shall (i) record the Deed and
record or deliver the other documents delivered into escrow by Seller and Buyer,
as appropriate, and (ii) disburse the Purchase Price, as adjusted, in accordance
with the Closing Statement, and deliver the documents from escrow to the party
entitled to receive the same.
(f) Real estate taxes and assessments and all rents, common
area maintenance charges, and other items of income and expense relating to the
operation of the Property shall be adjusted and prorated as of the Closing Date,
based on a 365-day year, so that Seller shall retain all income earned and be
responsible for all expenses incurred for periods prior to the Closing Date, and
Buyer shall be entitled to retain all income earned and be responsible for all
expenses incurred for periods commencing with and following the Closing Date, as
follows:
(i) Base rents actually collected prior to the Closing
shall be prorated as of the Closing Date. Rent received by Buyer after Closing
shall be first applied to all unpaid rent accruing after the Closing Date, then
to the month in which the Closing occurs, and then to periods prior to the
Closing Date.
(ii) To the extent possible, percentage rents collected
prior to the Closing shall be prorated at Closing as if received ratably
throughout the year.
(iii) Additional rent collected from tenants under the
Leases to cover taxes, insurance, utilities, maintenance, marketing and other
operating costs and expenses shall be prorated as of the Closing Date for the
calendar year 2002. In addition, Buyer is entitled to a credit in the amount of
any credits due as of the Closing Date to tenants of the Property as a result of
such additional rent collected in calendar year 2001 and 2002 in excess of
applicable expenditures for such period; provided, however, that Seller shall
retain any such credit amounts to the extent that the tenant otherwise due such
credit is delinquent in the payment of rent or other charges due and outstanding
to Seller as of the Closing Date.
(iv) Rent due or paid on account of the Ground Lease
shall be prorated as of the Closing Date.
(v) Real estate taxes and assessments accrued for the
current year shall be prorated, whether or not due and payable. If real estate
taxes for the current year cannot be ascertained, those for the previous year
shall be utilized without allowance for any discount allowed by law. Seller
shall be responsible for all assessments and bonds that constitute a lien
against the Property and are due and payable as of the Closing Date.
(vi) Costs and expenses associated with insurance,
utilities, maintenance, marketing and other operating costs and expenses, and
charges associated with each of the Contracts, shall be prorated as of the
Closing Date.
11
(vii) All security deposits delivered to Seller and not
otherwise applied in accordance with the provisions of the applicable Lease
shall be credited to Buyer at Closing.
(viii) All assumable utility deposits shall be transferred
and assigned to Buyer, and credited to Seller, at Closing.
To the extent that delinquent rents, percentage rents, tenant
reimbursements and other uncollected amounts due Seller prior to the Closing
Date are not prorated or credited at Closing, subject to the provisions of
Sections 7(c) - (e), below, Seller retains the right to pursue collection of
------------- ---
such amounts following the Closing Date.
(g) At the end of each calendar quarter for a period of one
(1) year following the Closing, Buyer shall, not less frequently than within
thirty (30) days following the end of each calendar quarter, prepare and present
to Seller a recalculation of any and all amounts due under Section 6(f), above,
------------
taking into consideration such matters as receipt of current year tax bills and
receipt of subsequent payments from tenants on account of base rent, percentage
rent and common area maintenance charges. The parties shall make the appropriate
adjusting payment between them within 30 days of delivery of any such
recalculation. Notwithstanding anything to the contrary contained in this
Agreement, the parties acknowledge and agree that recalculation and payment of
amounts due under this Section 6(f) shall not be subject to the requirement that
------------
the amount in controversy materially and adversely affect the Property as a
prerequisite to the enforcement thereof.
(h) Buyer shall pay the premium for the Title Policy, the cost
of the Commitment and all costs associated with the Survey. The cost of any
transfer and recordation taxes (including documentary stamps) applicable to the
Deed shall be paid by Seller, and recording fees shall be paid by Seller. The
Title Company's fees for escrow services shall be divided equally between Buyer
and Seller. Any title insurance premiums or transfer or recordation taxes
associated with the assumption of the Existing Mortgage shall be borne
exclusively by Buyer.
(i) Buyer shall pay or reimburse Seller at Closing for any and
all assumption fees, mortgage assumption taxes, attorneys fees and other costs
assessed by Lender or the applicable rating agencies and their respective
counsel in connection with the assumption of the Existing Mortgage, or any and
all prepayment fees, attorneys fees and other costs assessed by Lender in
connection with the prepayment and satisfaction of the Mortgage, if Buyer shall
elect to prepay the Existing Mortgage. At Closing, Buyer shall receive a credit
for interest accrued through the Closing Date and not yet due and payable, and
Seller shall receive a credit for all escrows, holdbacks, additional collateral
and other funds held by Lender in connection with the Existing Mortgage, with
the exception that, with respect to the Collateral Reserve Fund (as defined in
the Mortgage Documents), Seller's credit shall be limited to 25% of the amount
by which such Fund (together with accrued interest) exceeds $1,000,000.00.
(j) At Closing, Buyer shall pay any leasing commissions, shall
reimburse Seller for any costs incurred or concessions granted and shall assume
all obligations outstanding with respect to any new Leases entered into in
accordance with Section 7, below.
(k) Possession of the Property shall be delivered to Buyer at
Closing, and originals or copies of all Leases, Mortgage Documents, Contracts
and other documents relating to the ownership and operation of the Property
following the Closing in Seller's possession shall be delivered to Buyer at the
Property or such other location as the parties shall agree. To the extent Seller
delivers copies rather than originals of any Leases, Mortgage Documents or
Contracts, Seller shall certify to Buyer that such
12
documents are true, correct and complete copies of the originals. Any breach of
such certification shall be subject to the provisions of Section 11, below.
7. Covenants of Seller.
-------------------
(a) During the pendency of this Agreement and for so long as
Buyer is not in default hereunder, Seller shall not enter into any new Lease
without the prior written approval of Buyer, which shall not be unreasonably
withheld, conditioned or delayed; provided, however, that following the
expiration of the Review Period, Buyer's approval may be granted or withheld in
Buyer's sole and absolute discretion. Buyer agrees to provide Seller with
written notice of its reasonable objections to any new Leases submitted to Buyer
for approval pursuant to this Section 7(a), and any new Leases for which such
------------
notice is not delivered within three (3) business days shall be deemed
satisfactory and approved. At Closing, Buyer shall pay to Seller a commission of
$2.50 per rentable square foot for any new Lease (other than Tweeters or NEAC)
entered into by Seller following Effective Date which was approved by Buyer, and
at Closing, Buyer shall reimburse Seller and/or assume all obligations with
respect to each such new Lease, including any obligations for tenant
improvements or other concessions, as appropriate.
(b) Until the Closing Date, Seller shall exercise good faith
to operate and maintain the Property in the ordinary course of business, and to
comply with the material provisions of the Leases and applicable law,
regulations and agreements, consistent with past practices.
(c) Buyer and Seller acknowledge that Seller is currently
negotiating with Consolidated Theatres and its lender the form of a landlord's
waiver, whereby landlord will agree to waive or subordinate any and all claims
it may now or in the future have with respect to such tenant's personal property
in and improvements to its premises to the extent pledged as collateral for a
loan to such tenant, provided that such pledge is consistent with Section 11(j)
of Consolidated Theatre's lease. From and after the Effective Date, Seller
agrees to use reasonable efforts to negotiate a provision in the waiver document
which would give Seller and its successors the right to step into the tenant's
interests with respect to collateral provided that Seller agrees to cure any
outstanding defaults under the loan secured by such collateral. However, the
successful negotiation of such a provision is not a condition of Buyer's
obligations hereunder, and a failure to obtain such a provision shall not
constitute a breach of or default under any provision of this Agreement. Seller
agrees not to enter into any waiver or other agreement with Consolidated
Theatres or its lender which would be binding on Buyer following the Closing and
would adversely modify or restrict any of the rights of Buyer as successor
landlord of under the applicable lease without the prior written consent of
Buyer, which consent shall not be unreasonably withheld, conditioned or delayed,
and which consent shall be deemed granted if not expressly withheld by written
notice delivered within five (5) business days following delivery of a request
by Seller.
(d) Buyer and Seller acknowledge that Consolidated Theatres is
currently delinquent in the payment of or disputes certain construction-related
charges due Seller pursuant to its lease. From and after the Effective Date and
until Closing, Seller is hereby authorized and permitted to enter into an
agreement resolving such dispute provided that (i) Seller shall then be
obligated to deliver a Tenant Estoppel on account of Consolidated Theatres which
no longer contains reference to the claims described regarding this dispute as
reflected on the addendum attached to Exhibit C-2, and (ii) the obligations of
-----------
Consolidated Theatres as tenant under the Lease from and after the Closing shall
not be reduced or otherwise adversely affected. However, the successful
negotiation of such an agreement is not a condition of Buyer's obligations
hereunder. Although a failure to obtain such an agreement shall not constitute a
breach of or default under any provision of this Agreement, should Seller fail
to obtain such an agreement prior to Closing, then at Closing, Seller shall
assign and quitclaim to Buyer any and all
13
rights to collect such delinquent amounts due from Consolidated Theatres as of
the Closing Date. The parties acknowledge that this provision is subject to the
confidentiality provisions of Section 12(l).
(e) Buyer and Seller acknowledge that Xxxxxx Xxxxxxx is
currently delinquent in the payment of rent and/or other charges due Seller
pursuant to its lease. From and after the Effective Date and until Closing,
Seller is hereby authorized and permitted to enter into an agreement resolving
such dispute provided that: (i) such resolution includes an agreement that the
applicable lease may be terminated upon the giving of written notice of not less
than 30 nor more than 90 days by the landlord, or such lesser period as may be
agreed by the parties, or by the giving of written notice by Xxxxxx Xxxxxxx on
or before the date thirty (30) days following the Closing, (ii) so long as the
applicable lease remains in effect, the obligations of Xxxxxx Xxxxxxx as tenant
under the Lease from and after the Closing shall not be reduced or otherwise
adversely affected, and Buyer shall have the right to pursue any rent
delinquency occurring from and after the Closing. Except as expressly set forth
herein, Seller shall not enter into any settlement agreement with Xxxxxx Xxxxxxx
without the prior written consent of Buyer, which consent shall not be
unreasonably withheld, conditioned or delayed, and which consent shall be deemed
granted if not expressly withheld by written notice delivered within five (5)
business days following delivery of a request by Seller. However, the successful
negotiation of such an agreement is not a condition of Buyer's obligations
hereunder. Although a failure to obtain such an agreement shall not constitute a
breach of or default under any provision of this Agreement, should Seller fail
to obtain such an agreement prior to Closing, then at Closing, Seller shall
assign and quitclaim to Buyer any and all rights to collect delinquent amounts
due from Xxxxxx Xxxxxxx as of the Closing Date. Buyer and Seller also agree that
(i) Seller shall be permitted to collect and retain for its own account all
funds collected from Xxxxxx Xxxxxxx prior to Closing up to an aggregate sum
equal to rent due for the month of March, 2002, and the balance of any tax,
insurance and common area maintenance contributions due from Xxxxxx Xxxxxxx for
calendar year 2001, (ii) amounts collected during the month of April, 2002,
shall next be applied to rent due for the month of April and such amounts shall
be prorated in accordance with the provisions of Section 6(f), and (iii) all
additional amounts collected prior to or after Closing and attributable to other
delinquent amounts due from Xxxxxx Xxxxxxx for period preceding the Closing
shall, notwithstanding the provisions of Section 6(f), be paid to or retained by
Buyer, 75%, and Seller, 25%. The parties acknowledge that this provision is
subject to the confidentiality provisions of Section 12(l).
8. Representations and Warranties of Seller. Seller hereby
----------------------------------------
represents and warrants to Buyer as follows:
(a) Seller is a limited liability company duly organized and
validly existing under the laws of the State of Delaware, and Seller is
authorized to conduct its business in the State of South Carolina. Seller has
the requisite power and authority to enter into this Agreement and perform its
obligations and consummate the transactions contemplated under this Agreement.
(b) This Agreement and all documents executed and delivered by
Seller are or at the time of Closing will be: duly authorized, executed, and
delivered by Seller; the legal, valid, and binding obligations of Seller. Such
documents do not violate any provisions of or cause a default under any
agreement, instrument or judicial order to which Seller is a party or by which
Seller or the Property is bound.
(c) The Mortgage Documents listed on Exhibit N are all
---------
material loan documents and instruments in effect with respect to the Existing
Mortgage, including any and all amendments and supplements thereto, and true,
accurate and complete copies thereof have been delivered or made available to
Buyer as part of the Due Diligence Materials. Seller has not received written
notice that Seller is in default under any of the Mortgage Documents, which
default remains uncured. The holder of
14
the Existing Mortgage has disbursed, and Seller has received, the funds
previously held by such holder which are described as the "Earnout Reserve"
under the Mortgage Documents.
(d) Except as disclosed in the Initial Due Diligence
Materials, Seller has received no written notice of any violation of applicable
laws, statutes or ordinances, or any existing, pending or threatened litigation,
action, suit or other proceeding (including condemnation), judicial or
administrative, by any person or any governmental authority, against Seller or
arising in connection with the Property, including any action to rescind any
certificates of occupancy or operating permits related to the Property.
(e) Except as disclosed in the Initial Due Diligence
Materials, Seller has not received written notice from any governmental
authority or agency having jurisdiction over the Property of any violation of
Environmental Laws related to the Property or the presence or release of
Hazardous Materials on or from the Property, and to Seller's knowledge, Seller
has not caused or permitted the presence or release of Hazardous Materials on or
from the Property during Seller's since the date title to the Property was
conveyed to Seller. The term "Environmental Laws" includes without limitation
------------------
the Resource Conservation and Recovery Act and the Comprehensive Environmental
Response Compensation and Liability Act and other federal laws governing the
environment as in effect on the date of this Agreement together with their
implementing regulations and guidelines as of the Effective Date, and all state,
regional, county, municipal and other local laws, regulations and ordinances
that are equivalent or similar to the federal laws recited above or that purport
to regulate Hazardous Materials. The term "Hazardous Materials" includes
-------------------
petroleum, including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of
natural gas or such synthetic gas), asbestos and any substance, material waste,
pollutant or contaminant listed or defined as hazardous or toxic under any
Environmental Law.
(f) Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code.
(g) There are no leases, rental agreements or other rights to
occupy or conduct business at the Property by persons claiming through Seller
except under the Leases described in the list attached hereto as Exhibit K (the
---------
"Tenant List"). The copies of the Leases and applicable guarantees delivered by
-----------
Seller to Buyer are true, correct and complete in all materials respects. Except
as disclosed in the Initial Due Diligence Materials, the Leases are in full
force and effect, and Seller has not received written notice that Seller is in
default under any of the Leases, which default remains uncured. The
leasing/tenant files delivered or made available to Buyer are complete and
contain all material correspondence and relevant to the applicable Lease.
(h) There are no Contracts which will be binding on Buyer
following the Closing except the Assumed Contracts described in the list
attached hereto as Exhibit O. The copies of the Assumed Contracts delivered or
---------
made available by Seller to Buyer are true, correct and complete in all material
respects. Except as disclosed in the Initial Due Diligence Materials, the
Assumed Contracts are in full force and effect, and Seller has not received
written notice that Seller is in default under any of the Assumed Contracts,
which default remains uncured.
(i) The Ground Lease and related information contained in the
Initial Due Diligence Materials provided to Buyer by Seller represents true,
accurate and complete copies of all material ground lease documents and
instruments in effect with respect to the Ground Lease, including any and all
amendments and supplements thereto. Seller has not received written notice that
Seller is in default under the Ground Lease, which default remains uncured.
15
(j) Seller has not received written notice that it is in default under
the Market Center Declaration.
(k) Neither Seller nor any entity affiliated with Seller owns or has
the right to acquire real property within a quarter-mile of the Real Property.
(l) Except as disclosed in the Initial Due Diligence Materials or
expressly provided in this Agreement, or except as may arise with respect to the
proposed lease with Tweeters or NEAC (including amounts which may be due to
Interface Realty Corporation), Buyer shall not be obligated with respect to any
leasing commissions or other compensation payable to any real estate broker or
agent in relation to any of the Leases for the current term, and Seller agrees
to pay any such amounts which are found to be outstanding at or prior to Closing
(provided, however, that any commission which may be due to Xxx Xxxxxx with
respect to the proposed lease with Tweeters or NEAC if consummated will be borne
by Seller). Except as disclosed in the Initial Due Diligence Materials or
expressly provided in this Agreement, or except as may arise with respect to the
proposed lease with Tweeters or NEAC, Buyer shall not be obligated with respect
to any tenant improvements or any allowances or reimbursements on account
thereof for the current term of any of the Leases (exclusive of the proposed
lease), and Seller agrees to pay any such amounts which are found to be
outstanding at or prior to Closing (exclusive of amounts on account of the
proposed lease).
(m) Except as disclosed in the Initial Due Diligence Materials, no
person has any right, option or other agreement which will be binding on Buyer
following the Closing to purchase all or any portion of the Property.
(n) Seller has no employees at the Property.
(o) To Seller's knowledge, the Property does not rely on any other
property to comply with any zoning, building or similar law, ordinance or
regulation.
(p) Except as disclosed in the Initial Due Diligence Materials, Seller
has not received any written notice from the lender under the Existing Mortgage
or its insurance company requiring any repairs or alterations to the Property
which has not been performed or otherwise provided for under the Mortgage
Documents.
(q) There are no proceedings relating to real estate tax or assessment
reduction with respect to the Property other than as described on Exhibit P, and
---------
no such proceedings shall be initiated by Seller following the Effective Date
and prior to the Closing Date without the prior written consent of Buyer, which
consent shall not be unreasonably withheld or delayed. At the request of Buyer,
Seller shall assign to Buyer and Buyer shall assume all rights and obligations
with respect to such proceedings, and the expenses relating to and proceeds from
such proceedings (after deducting or adding amounts due to or from tenants)
shall be prorated between Buyer and Seller in accordance with the provisions of
Section 6(f), with such expenses being deemed to be incurred proportionately
over the period for which the applicable tax reduction is sought.
For purposes of this Agreement, "Seller's knowledge", "known by Seller",
---------
"discovered by Seller" or words of similar import refer to the current, actual
knowledge of Xxxxxx X. Xxxxx III or Xxxxx X. Xxxxxxxx, without any duty of
inquiry or investigation and without imputation of the knowledge of any other
person. Seller's warranties and representations are qualified by and deemed to
be modified to include any information contained in the Initial Due Diligence
Materials, and to the extent that the obligations of Buyer are conditioned upon
the truth, correctness or completeness of any warranties and
16
representations as of the Closing Date or the Closing, such representations and
warranties are deemed to be modified to include exception for any information
contained in the Due Diligence Materials prior to the expiration of the Review
Period. Should Buyer discover information which indicates that any of Seller's
representations or warranties are untrue, incorrect or incomplete in any
material respect prior to the Closing, Buyer shall provide written notice of
such information to Seller within five (5) days following receipt thereof (but
in any event, prior to Closing) and permit Seller a reasonable opportunity to
elect whether or not to agree to correct any breach of its representations and
warranties in a commercially reasonable manner and, if appropriate, to extend
the Closing Date for a period of up to thirty (30) days to correct such breach.
Should Seller elect not to cure such breach, or should Seller fail to cure such
breach in the time period provided, Buyer's sole relief or remedy on account
thereof shall be to elect either (A) to terminate this Agreement, in which event
the Deposit shall be returned to Buyer and neither party shall incur any further
liability hereunder, or (B) to waive such breach, in which event the parties
shall proceed to Closing; provided, however, that notwithstanding anything to
the contrary contained in this Agreement, Buyer hereby waives any right to
object to, or deliver any written notice with respect to, or to terminate this
Agreement on account of, any alleged breach, untruth, inaccuracy or
incompleteness of any representation or warranty unless the alleged breach (i)
materially and adversely affects the value of the Property, and (ii) was not
disclosed in the Due Diligence Materials; and provided further, that in the
event such breach, untruth, inaccuracy or incompleteness results from the
willful or intentional misrepresentation or fraud by Seller, and Seller fails to
correct the alleged breach, in addition to the return of the Deposit, Seller
shall reimburse Buyer for all out-of-pocket expenses actually incurred by Buyer
in connection with the negotiation of this Agreement and the performance of
Buyer's obligations hereunder, including due diligence costs.
AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, BUYER AGREES TO
ACCEPT THE PROPERTY ON AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS. EXCEPT
FOR THOSE WARRANTIES AND REPRESENTATIONS, IF ANY, SPECIFICALLY MADE BY SELLER IN
THIS AGREEMENT, NO WARRANTY OR REPRESENTATION IS MADE BY SELLER WITH RESPECT TO
THE PROPERTY AS TO (I) FITNESS FOR ANY PARTICULAR PURPOSE, (II) MERCHANTABILITY,
(III) CONDITION, (IV) ABSENCE OF DEFECTS OR FAULTS, (V) ABSENCE OF HAZARDOUS OR
TOXIC SUBSTANCES, (VI) FLOODING, OR (VII) COMPLIANCE WITH LAWS AND REGULATIONS,
INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE
ENVIRONMENT, AS THEY MAY APPLY TO THE CURRENT CONDITION OF THE PROPERTY OR
BUYER'S INTENDED DEVELOPMENT, CONSTRUCTION OR USE, OR FOR ANY OTHER PURPOSE.
BUYER ACKNOWLEDGES THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITH THE INTENTION
OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL,
ECONOMIC USE, COMPLIANCE, AND LEGAL CONDITION OF THE PROPERTY AND THAT BUYER IS
NOT NOW RELYING, AND WILL NOT LATER RELY, UPON ANY REPRESENTATIONS AND
WARRANTIES MADE BY SELLER OR ANYONE ACTING OR CLAIMING TO ACT, BY, THROUGH OR
UNDER OR ON SELLER'S BEHALF CONCERNING THE PROPERTY. THE PROVISIONS OF THIS
PARAGRAPH SHALL SURVIVE INDEFINITELY ANY CLOSING OR TERMINATION OF THIS
AGREEMENT AND SHALL NOT BE MERGED INTO ANY DOCUMENTS, EXECUTED OR DELIVERED AT
CLOSING.
9. Representations and Warranties of Buyer. Buyer hereby represents and
---------------------------------------
warrants to Seller as follows: Buyer is a corporation, duly organized and
validly existing under the laws of the State of Delaware, and Buyer is or will
on the Closing Date be authorized to conduct business in the State of South
Carolina. Buyer has the power and authority to enter into this Agreement and
perform its obligations and consummate the transactions contemplated under this
Agreement without the joinder of any other person or entity, including delivery
of the funds and other items required for Closing. This
17
Agreement and all documents executed by Buyer which are to be delivered at the
Closing are or at the time of Closing will be duly authorized, executed, and
delivered by Buyer, and are or at the Closing will be legal, valid, and binding
obligations of Buyer, and do not and at the time of Closing will not violate any
provisions of any agreement or judicial order to which Buyer is a party or to
which it is subject.
10. Loss by Fire or Other Casualty; Condemnation.
--------------------------------------------
(a) Risk of loss up to and including the Closing Date shall be borne by
Seller. In the event of any material damage to or destruction of the Property or
any portion thereof, Buyer may, at its option, by notice to Seller given within
10 days after Seller notifies Buyer of such damage or destruction (and if
necessary the Closing Date shall be extended to give Buyer the full 10-day
period to make such election): (i) terminate this Agreement and the Deposit
shall be immediately returned to Buyer, or (ii) proceed under this Agreement,
receive any insurance proceeds (including any rent loss insurance applicable to
any period on and after the Closing Date) due Seller as a result of such damage
or destruction and assume responsibility for such repair, and Buyer shall
receive a credit at Closing for any deductible, uninsured or coinsured amount
under said insurance policies. If Buyer elects (ii) above, Buyer may extend the
Closing Date for up to an additional 10 day period in which to obtain insurance
settlement agreements with Seller's insurers, and Seller will assign all
insurance awards at Closing and cooperate with Buyer in obtaining the insurance
proceeds and such agreements from Seller's insurers. If the Property is not
materially damaged, then Buyer shall not have the right to terminate this
Agreement, but Seller shall, at its cost, repair the damage before the Closing
in a manner reasonably satisfactory to Buyer or if repairs cannot be completed
before the Closing, credit Buyer at Closing for the reasonable cost to complete
the repair. "Material damage" and "materially damaged" means damage which (i)
--------------- ------------------
represents a covered loss under applicable insurance policies and is reasonably
estimated to exceed $557,000 to repair, or is reasonably estimated to take more
than 120 days to repair, (ii) represents an uninsured or underinsured loss and
is reasonably estimated to result in out-of-pocket costs or loss of rent to
Buyer in excess of applicable insurance proceeds (including the deductible, if
any) exceeding $250,000, (iii) entitles a Major Tenant to terminate its Lease
(unless such Major Tenant waives it right to terminate), (iv) entitles Lender to
accelerate the Existing Mortgage (unless Lender waives its right to accelerate),
or (v) permanently affects parking, ingress or egress in a manner which reduces
the value of the Property by more than $250,000 in excess of the insurance
proceeds provided therefore.
(b) In the event any proceedings in eminent domain are instituted by
any body having the power of eminent domain with respect to the Property, the
Improvements or any material portion thereof, and such condemnation action (i)
is reasonably estimated to result in out-of-pocket costs or loss of rent to
Buyer in excess of applicable condemnation proceeds exceeding $250,000, (iii)
entitles a Major Tenant to terminate its Lease (unless such Major Tenant waives
it right to terminate), (iv) entitles Lender to accelerate the Existing Mortgage
(unless Lender waives its right to accelerate), or (iii) permanently affects
parking, ingress or egress in a manner which reduces the value of the Property
by more than $250,000 in excess of the compensation provided therefore, Buyer
may, at its option, by notice to Seller given within 10 days after Seller
notifies Buyer of such proceedings (and if necessary the Closing Date shall be
extended to give Buyer the full 10 day period to make such election): (i)
terminate this Agreement and the Deposit shall be immediately returned to Buyer,
(ii) proceed under this Agreement, in which event Seller shall, at the Closing,
assign to Buyer its entire right, title and interest in and to any condemnation
award, and Buyer shall have the sole right during the pendency of this Agreement
to negotiate and otherwise deal with the condemning authority in respect of such
matter.
11. Default; Remedies.
-----------------
18
(a) If Buyer should default in any material respect in the performance
of any of Buyer's obligations under this Agreement or if any of Buyer's
representations or warranties shall be untrue in any material respect and such
default or breach is discovered prior to Closing, Seller shall be entitled to
terminate this Agreement and receive the Deposit as liquidated damages and as
Seller's sole and exclusive remedy for any such default, with Seller hereby
waiving any rights it might otherwise have to xxx for damages or seek specific
performance, injunctive relief or any other equitable remedy on account of a
default by Buyer. Buyer and Seller agree that in the event of Buyer's default,
Seller's damages would be difficult to ascertain and the Deposit represents a
reasonable estimate of such damages under the circumstances. If Seller should
default in the performance of any of Seller's obligations in this Agreement or
if any of Seller's representations or warranties shall be untrue and such
default or breach is discovered prior to Closing, subject to the limitations
contained in Section 8 and provided that such default or breach materially and
adversely affects the value of the Property and provided that Buyer has duly and
timely performed all of its obligations and is not in default hereunder, as
Buyer's sole and exclusive remedy, Buyer may either (i) terminate this Agreement
and request the return of the Deposit, or (ii) bring an action for specific
performance of this Agreement; provided, however, in the event of a material
default by Seller which is not cured within a reasonable time after receipt of
written notice from Buyer, if such default results from the willful or
intentional misconduct or fraud by Seller, and Buyer elects to terminate this
Agreement, in addition to the return of the Deposit, Seller shall reimburse
Buyer for all out-of-pocket expenses actually incurred by Buyer in connection
with the negotiation of this Agreement and the performance of Buyer's
obligations hereunder. In either event, Seller shall not be liable to Buyer for
any actual, direct, incidental, special, consequential, punitive or other
damages on account thereof.
(b) If Buyer should default in any material respect in the performance
of any of Buyer's obligations under this Agreement or any of the documents to be
delivered by Buyer at Closing pursuant to Section 6(c), or if any of Buyer's
-----------
representations or warranties shall be untrue in any material respect and such
default or breach is not discovered until following the Closing, Seller shall be
entitled to exercise any and all rights it might otherwise has to xxx for
damages or seek other remedies on account of such default by Buyer. If Seller
should default in the performance of any of Seller's obligations in this
Agreement or any of the documents to be delivered by Seller at Closing pursuant
to Section 6(d), or if any of Seller's representations or warranties shall be
-----------
untrue in any respect and such default or breach is nor discovered until
following the Closing, subject to the limitations contained in Section 8 and
provided that such default or breach materially and adversely affects the value
of the Property, if such default is not cured within a reasonable time after
receipt of written notice from Buyer, Buyer shall be entitled to exercise any
and all rights it might otherwise have to xxx for damages or seek other remedies
on account of such default by Seller, provided, however, that Seller shall not
be liable to Buyer for any incidental, consequential, punitive or other special
damages on account thereof, and provided, further, in the event of a material
default by Seller which results from willful or intentional misconduct or fraud
by Seller, the condition that such default materially and adversely affect the
value of the Property shall not apply.
(c) Except as expressly provided in this Section 11, Seller shall not
----------
be liable to Buyer or any other person, in damages or otherwise, for any default
in the performance of any of Seller's obligations in this Agreement or any of
the documents to be delivered by Seller at Closing pursuant to Section 6(d), or
-----------
any breach or failure of any representation or warranty provided in this
Agreement or such documents. In no event shall Seller be liable following the
Closing for any default in the performance of any of Seller's obligations in
this Agreement or any breach or failure of any representation or warranty , in
either case discovered by Buyer prior to Closing.
19
(d) The provisions of this Section 11 shall survive the Closing and
----------
the delivery of the Deed and the Assignment and Assumption of Ground Lease and
any other documents to be delivered pursuant to Section 6.
---------
12. Miscellaneous.
-------------
(a) Notices. Unless otherwise provided herein, any notice required or
-------
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given the day after such notice was deposited with a
nationally-recognized overnight delivery service, or the date sent by confirmed
telecopy and addressed as follows:
If to Buyer: DRA Advisors, Inc.
-----------
000 Xxxx 00/xx/ Xxxxxx
00/xx/ Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxx
Fax No: (000) 000-0000
Copy to: Blank Rome Xxxxxx Xxxxxxxxxx LLP
-------
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Fax No: (000) 000-0000
If to Seller: Mount Pleasant KPT LLC
------------
c/o Konover Property Trust, Inc.
0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Legal Department
Fax No: (000) 000-0000
Copy to: Xxxxx, Xxxxx & Xxxxx
-------
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxxxx
Fax No: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
(b) Brokers and Finders. Neither party has had any contact or dealings
-------------------
regarding the Property, or any communication in connection with the subject
matter of this transaction, through any licensed real estate broker or other
person who can claim a right to a commission or finder's fee as a procuring
cause of the sale contemplated herein, except for Credit Suisse First Boston
Corporation ("Broker"), whose commission or fee shall be paid by Seller pursuant
------
to a separate agreement. Buyer shall indemnify, save harmless and defend Seller
from any liability, cost, or expense (including reasonable attorneys' fees)
arising out of or connected with any claim for any commission or compensation
made by any person or entity claiming to have been retained or contacted by
Buyer in connection with this transaction, other than Broker. Seller shall
indemnify, save harmless and defend Buyer from any liability, cost, or expense
(including reasonable attorneys' fees) arising out of or connected with any
claim for any commission or compensation made by any person or entity claiming
to
20
have been retained or contacted by Seller in connection with this transaction,
including Broker. The provisions of this paragraph shall survive the Closing and
any termination of this Agreement.
(c) Successors and Assigns. Neither party may assign this Agreement
----------------------
without the prior written consent of the other, and any such prohibited
assignment shall be void; provided, however, that Buyer may, at Closing, assign
its rights to purchase the Property to a limited partnership or limited
liability company in which DRA Advisors, Inc. (or its principals or an entity
directly or indirectly controlled by DRA Advisors, Inc.) is the sole general
partner (if a limited partnership) or manager (if a limited liability company),
or a real estate investment trust in which DRA Advisors, Inc. (or its principals
or an entity directly or indirectly controlled by DRA Advisors, Inc.) is the
sole trustee or otherwise controls the decision-making of such trust; and
provided, further, that following such assignment, DRA Advisors, Inc. shall be
released from any further liability under this Agreement from and after the
Closing so long as the Closing actually occurs and the sale of the Property to
the proposed assignee is consummated in accordance with the provisions of this
Agreement. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties.
(d) Amendments. Except as otherwise provided herein, this Agreement
----------
may be amended or modified only by a written instrument executed by Seller and
Buyer.
(e) Continuation and Survival. All representations and warranties by
-------------------------
the respective parties contained herein or made in writing pursuant to this
Agreement shall survive the execution and delivery of this Agreement, the
delivery of the Deed and transfer of title for a period ending on the later of
six (6) months following the Closing or December 15, 2002, except as otherwise
expressly provided in this Agreement. In addition, the provisions of this
Agreement that contemplate performance after the Closing and the obligations of
the parties not fully performed at the Closing shall survive the Closing and
shall not be deemed to be merged into or waived by the instruments of Closing.
(f) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of South Carolina.
(g) Merger of Prior Agreements. This Agreement, including the exhibits
--------------------------
hereto, constitutes the entire agreement between the parties with respect to the
purchase and sale of the Property and supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter hereof.
(h) Enforcement. In the event either party hereto fails to perform any
-----------
of its obligations under this Agreement or in the event a dispute arises
concerning the meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all costs and expenses incurred by the other party in
enforcing or establishing its rights hereunder, including, without limitation,
court costs and reasonable attorneys' fees.
(i) Time of the Essence. Time is of the essence in the performance of
-------------------
this Agreement.
(j) 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. To facilitate execution of
this Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages.
21
(k) Calculation of Time Periods. Unless otherwise specified, in
---------------------------
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday for national banks in the location where the
Property is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday, or legal holiday. The last day of
any period of time described herein shall be deemed to end at 6:00 p.m. North
Carolina time.
(l) Confidentiality.
---------------
(i) Buyer and Seller agree to keep all details of the
transaction contemplated hereby confidential until Closing, absent the prior
written consent of the other party.
(ii) The foregoing shall not preclude Buyer from (A)
discussing the substance or any relevant details of this transaction with any of
its attorneys, accountants, professional consultants, lenders, partners,
investors, or any prospective lender, partner or investor, as the case may be,
(B) engaging in its usual and customary business activities relating to the
ownership, management and operation of the Property following the Closing, and
shall not preclude either party (Y) from complying with laws, rules, regulations
and court orders, including without limitation, governmental, regulatory, or
stock exchange disclosure, tax and reporting requirements, or (Z) from
disclosing such information as may otherwise be a matter of public record.
(iii) In addition to any other remedies available to a party,
each party shall have the right to seek equitable relief, including without
limitation injunctive relief or specific performance, against the other party
in order to enforce the provisions of this Section 12(l).
-------------
(iv) Buyer shall not record this Agreement or any affidavit or
memorandum of this Agreement or any document to which this Agreement is
attached.
(m) Further Assurances. In addition to the acts and deeds recited
------------------
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Buyer.
[signature page follows]
22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
BUYER: DRA ADVISORS, INC.,
a Delaware corporation
By: ________________________________
Name:
Title:
SELLER: MOUNT PLEASANT KPT LLC,
a Delaware limited liability company
By: MOUNT PLEASANT FORMATION INC., a
Delaware Corporation,
its Managing Member
By: ________________________________
Name: ______________________________
Title: _____________________________
23
LIST OF EXHIBITS
----------------
Exhibits A-1 - A-3 Legal Descriptions of Property
Exhibit B Escrow Provisions
Exhibit C-1 Form of Tenant Estoppel Certificate
Exhibit C-2 Consolidated Theatres Estoppel
Exhibit C-3 Ground Lease Estoppel
Exhibit D Form of Assignment and Assumption of Ground Lease
Exhibit E Form of Assignment and Assumption of Leases
Exhibit F Form of Assignment of Service Contracts, Warranties
and Guaranties, and Other Intangible Property
Exhibit G Form of Xxxx of Sale
Exhibit H Form of Notice to Tenants
Exhibit I Form of FIRPTA Certificate
Exhibit J Form of Management Agreement
Exhibit K Tenant List
Exhibit L Initial Due Diligence Materials
Exhibit M Association Estoppel Certificate
Exhibit N Mortgage Documents
Exhibit O Assumed Contracts
Exhibit P Tax-Related Proceedings
Exhibit Q Tangible Personal Property
Exhibit R Warranties and Guarantees
24
