EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is dated as of August 7, 2001, by and
between ORACLE-XXXXXXX CO., an Arizona limited partnership ("Seller"), and GGP-
TUCSON MALL L.L.C., a Delaware limited liability company ("Purchaser").
R E C I T A L S
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WHEREAS, Seller is the owner of a sixty-seven and one-half percent (67.5%)
interest as a tenant in common in and to the entire ground leasehold interest in
certain real property located in Tucson, Arizona together with all improvements
and fixtures located thereon and commonly known as Tucson Mall, other than the
property owned by the Anchors (as hereinafter defined) at such mall
(collectively hereinafter referred to as "Tucson Mall"); and
WHEREAS, Seller desires to sell to Purchaser substantially all of its
interest in such property, both real and personal, which is related to such
mall, and Purchaser desires to purchase such property, upon the terms and
subject to the conditions contained herein.
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
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1.1 Definitions. For purposes of this Agreement, the following terms shall
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have the meanings indicated below:
"ADA" shall mean the Americans With Disabilities Act, as amended.
"Adjustable Tenant Charges" shall mean common or mall area maintenance
(exterior and interior) charges, real estate taxes and assessments, property
insurance charges and HVAC charges to the extent denominated as such in the
Leases and the REA.
"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.
"Agreement" shall mean this Purchase and Sale Agreement, as amended or
modified from time to time hereafter in accordance with the terms hereof.
"Anchor" shall mean each Person identified in Schedule 1.1-1.
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"Anchor Subleases" shall mean those ground subleases identified in Schedule
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1.1-2.
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"Applicable Closing Fiscal Period" shall mean, with respect to any item
which is prorated under Article VI, the calendar year (or other fiscal period
for which such item is determined or assessed) during which the Closing Date
occurs.
"Assumed Contracts" shall mean all Contracts other than those identified in
writing by Purchaser to Seller not less than five (5) business days prior to the
Closing Date.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3(a).
"Books and Records" shall mean all records, books of account and papers in
the possession or control of Seller relating to the construction, ownership,
management and operations of the Property, including without limitation,
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 the Ground Lease, the Leases, the REA and the Contracts and
correspondence related thereto.
"Casualty" shall mean any damage to or destruction of the Property or any
portion thereof caused by fire or other casualty, whether or not insured.
"Closing" shall have the meaning set forth in Section 5.1.
"Closing Date" shall have the meaning set forth in Section 5.1.
"Closing Documents" shall mean the Seller Closing Documents and Purchaser
Closing Documents, collectively.
"Closing Escrow Agreement" shall mean the escrow agreement for deposit of
the Closing Documents by and among Seller, Purchaser and Escrow Agent, in the
form of Exhibit C attached hereto.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contract Party Consents" shall have the meaning set forth in Section 9.4.
"Contracts" shall mean the service, maintenance and other contracts and
concessions that are currently in effect and to which Seller is a party
respecting the use, maintenance, development, sale or operation of the Property
or any portion thereof (but excluding this Agreement, the Ground Lease, the
Leases, the Permitted Exceptions and the REA) which are listed on Schedule
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7.1(h), together with any additions thereto, modifications thereof or
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substitutions therefor hereafter entered into in accordance with the provisions
of this Agreement.
"Defect" shall mean any Lien, encumbrance, easement, agreement,
restriction, proceeding, lis pendens, notice, covenant, restriction, ordinance,
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code, rule, law, encroachment or exception to title that in Purchaser's sole
opinion adversely affects the title to, value of, or use of the Property.
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"Disapproval Notice" shall have the meaning set forth in Section 3.2.
"Xxxxxxx Money" shall have the meaning set forth in Section 2.2(a).
"Xxxxxxx Money Escrow" shall have the meaning set forth in Section 2.2(a).
"Escrow Agent" shall mean Chicago Title Insurance Company, 000 X. Xxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
"Environmental Laws" shall mean all federal, state and local statutes,
ordinances, codes, rules, regulations, guidelines, 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 or the environment, as any of the same may be amended from time
to time, including but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. (S)9601 et. seq., as
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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. (S) 6901 et seq., as amended by the Hazardous and Solid
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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.
(S)136 et. seq. or any equivalent state or local laws or ordinances; the
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Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.); the
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Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. (S)11001
et. seq. or any equivalent state or local laws or ordinances; the Toxic
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Substance Control Act ("TSCA"), 15 U.S.C. (S)2601 et. seq. or any equivalent
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state or local laws or ordinances; the Atomic Energy Act, 42 U.S.C. (S)2011 et.
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seq., or any equivalent state or local laws or ordinances; the Clean Water Act
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(the "Clean Water Act"), 33 U.S.C. (S)1251 et. seq. or any equivalent state or
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local laws or ordinances; the Clean Air Act (the "Clean Air Act"), 42 U.S.C.
(S)7401 et seq. or any equivalent state or local laws or ordinances; the
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Occupational Safety and Health Act, 29 U.S.C. (S)651 et seq. or any equivalent
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state or local laws or ordinances.
"Estoppels" shall mean the estoppel certificates to be obtained pursuant to
Section 9.3.
"Execution Date" shall mean the date of this Agreement, which shall be the
date that this Agreement, duly executed by Seller, is received by Purchaser.
"Existing Financing" shall mean the loan in the original principal amount
of $75,000,000.00, evidenced and secured by the Existing Loan Documents.
"Existing Lender" shall mean Teachers Insurance and Annuity Association of
America.
"Existing Loan Documents" shall mean the loan documents described on
Exhibit G attached hereto and made a part hereof.
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"Fixed and Other Tenant Charges" shall mean Rent other than Adjustable
Tenant Charges, Sales Based Tenant Charges and advertising, marketing and
promotional contributions.
"Fixed and Other Tenant Charge Arrearages" shall mean Fixed and Other
Tenant Charges due and payable prior to, but unpaid as of, the Closing Date.
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"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.
"Ground Lease" shall mean that certain Ground Lease dated as of January 1,
1978, by and between Ground Lessor, as Landlord, and Seller, as Tenant, as
amended by Ground Lease Amendment No. 1 dated as of June 25, 1980, Ground Lease
Amendment No. 2 dated as of June 25, 1980, Ground Lease Amendment No. 3 dated as
of June 25, 1980, Ground Lease Amendment No. 4 dated as of May 27, 1982, Ground
Lease Amendment No. 5 dated as of December 5, 1985 and Ground Lease Amendment
No. 6 dated as of November 15, 1990, pursuant to which Seller has leased the
Land from Ground Lessor.
"Ground Lessor" shall mean DND Neffson Co., an Arizona general partnership.
"Ground Lessor Consent" shall have the meaning set forth in Section 9.4.
"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 of Arizona, 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 (iv)
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous, or (v) causes a nuisance upon
the Property or to adjacent properties or poses or threatens to pose a hazard to
the health or safety of persons on or about the Property, or (vi) could or does
cause Seller or Purchaser to be liable for trespass. Such term includes,
without limitation, any material or substance which is (1) defined as a
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous 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. (S)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. (S)2011 et. seq.; (14) subject to
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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, structures, fixtures, facilities,
installations, machinery and equipment, in, on, over or under the Land,
including but not limited to the foundations and footings therefor, elevators,
plumbing, air conditioning, heating, ventilating,
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mechanical, electrical and utility systems (except to the extent owned by a
utility company), 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 or leased, in whole or in part, by
Seller, located at, on or affixed to the Land.
"Indemnified Party" shall have the meaning set forth in Section 10.3.
"Indemnified Purchaser Persons" shall have the meaning set forth in Section
10.1.
"Indemnified Seller Persons" shall have the meaning set forth in Section
10.2.
"Indemnifying Party" shall have the meaning set forth in Section 10.3.
"JCP" shall mean JCP Realty, Inc., a Delaware corporation, and a tenant in
common with respect to Tucson Mall.
"Land" shall mean those certain parcels of real estate described on Exhibit
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A.
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"Leases" shall mean those leases, tenancies, concessions, licenses and
occupancy agreements affecting, encumbering or relating to the Property
(including, without limitation, the Anchor Subleases and the Outparcel
Subleases) all of which are listed on Schedule 7.1(g), together with any
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additions thereto, modifications thereof or substitutions therefor hereafter
entered into in accordance with the provisions of this Agreement.
"Liens" shall mean any liens, security interests, judgments or charges that
encumber any part of the Land, the Improvements, or the Personal Property,
including, but not limited to, mortgages, deeds of trust, mechanics,
materialmen, judicial, tax or governmental liens, pledges, options, rights of
first offer or first refusal or other similar items.
"Lien Searches" shall mean a search report by an independent search firm
acceptable to Purchaser 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
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affecting the Property or Seller.
"Losses" shall mean with respect to any obligation to indemnify Seller, the
Indemnified Seller Persons, Purchaser or the Indemnified Purchaser Persons, any
and all claims, actions, suits, demands, losses, damages, liabilities,
obligations, judgments, settlements, awards, penalties, costs or expenses,
including, without limitation, reasonable attorneys' fees and expenses.
"Missing Tenants" shall have the meaning set forth in Section 9.3.
"Option Fee" shall mean the sum of Five Hundred Dollars ($500.00) which has
previously been paid by Purchaser to Seller under the terms of that certain
Option Agreement dated as of April __, 2001, between Seller and Purchaser.
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"Outparcel Subleases" shall mean those ground subleases identified in
Schedule 1.1-3.
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"Party" shall mean a party to the REA, an Anchor Sublease or a Contract (or
the successor or assignee thereof) or a Tenant under a Lease or an Outparcel
Sublease, in each case other than Seller.
"Permitted Exceptions" shall mean the exceptions to title to the Property
listed on Exhibit D attached hereto and made a part hereof.
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"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 Seller and located in or upon or used exclusively in
connection with the operation and maintenance of the Property, including without
limitation fixtures; machinery; equipment; building supplies and materials;
consumables; inventories; names, logos, trademarks, trade names and copyrights;
all assignable licenses, permits and certificates of occupancy; all assignable
guarantees or warranties (including performance bonds obtained by, or for the
benefit of, Seller, pertaining to the ownership, construction or development of
the Real Property or any part thereof); the Books and Records; computer and
peripheral equipment; computer 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 1.1-4.
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Personalty shall not include personal items belonging to Tenants or to employees
of Seller, the rights of Seller in and to the Leases, the Contracts, the REA and
the cash and the cash accounts of Seller (including any cash or cash accounts
constituting the Security Deposits).
"Promotional Association" shall have the meaning set forth in Section
7.1(l).
"Property" shall mean (a) the Real Property, (b) the Personalty, (c) the
rights and interests of Seller in, to and under all Leases, (d) the rights and
interests of Seller in, to and under the REA, and (e) the rights and interests
of Seller in, to and under the Assumed Contracts.
"Purchaser Closing Documents" shall have the meaning set forth in Section
5.3.
"Purchase Price" shall have the meaning set forth in Section 2.2.
"Real Property" shall mean (a) the entire leasehold interest of Seller in
and to the Land, (b) the interest of Seller as ground lessee under the Ground
Lease, (c) the interest of Seller as ground sublessor under the Xxxxx Sublease
and (d) the entire interest of Seller, both fee title and leasehold, in and to
the Improvements, together with all of the estate, right, title and interest of
Seller therein, and in and to: (i) 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; (ii) 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 grade of any such streets, roads or avenues; and (iii) 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, without limitation, all rights of Seller under the TIC Agreement and
the REA).
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"REA" that certain Construction, Operation and Reciprocal Easement
Agreement dated as of June 25, 1980 by and among Seller, as Developer, Xxxxxx
Xxxxxx Xxxx Stores, Inc., X.X. Penney Properties, Inc., Sears, Xxxxxxx and Co.
and Xxxxxx-Xxxxxx Corporation and recorded October 7, 1980 in Book 6380, Page
673, as supplemented and/or amended by (a) that certain Separate Agreement dated
as of June 25, 1980 between Seller and Xxxxxx Xxxxxx Xxxx Stores, as amended by
Amendment No. 1 to Separate Agreement dated as of November 1, 1990, (b) that
certain Supplemental Agreement dated as of June 25, 1980 between Seller and X.X.
Penney Properties, Inc., as amended by Amendment No. 1 to Separate Agreement
dated as of May 27, 1982, as further amended by Amendment No. 2 to Separate
Agreement dated as of November 1, 1990, (c) that certain Separate Agreement
dated as of June 25, 1980 between Seller and Sears, Xxxxxxx and Co., as amended
by Amendment No. 1 to Separate Agreement dated as of November 1, 1990, (d) that
certain Separate Agreement dated as of June 25, 1980 between Seller and Xxxxxx-
Xxxxxx Corporation, as amended by Amendment No. 1 to Separate Agreement dated as
of November 1, 1990 among Seller, Xxxxxxx Department Stores, Inc. and
Construction Developers, Incorporated, collectively successors-in-interest to
Xxxxxx-Xxxxxx Corporation, (e) that certain Separate Agreement dated as of
November 1, 1990 between Seller and The May Department Stores Company, (f) that
certain Separate Agreement dated as of May 27, 1982 between Seller and Mervyn's,
(g) that certain Amendment to and Restatement of Construction, Operation and
Reciprocal Easement Agreement dated as of May 27, 1982 and recorded November 23,
1982 as Instrument No. 105787, Page 654, (h) that certain First Amendment of
Amendment to and Restatement of Construction, Operation and Reciprocal Easement
Agreement dated as of December 31, 1985 and recorded May 30, 1986 in Book 7795,
Page 432, and (i) Third Amendment to and Restatement of Construction, Operation
and Reciprocal Easement Agreement dated as of November 1, 1990 and recorded
November 19, 1990 in Book 8917, Page 1446, together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered into in
accordance with the provisions of this Agreement..
"REA Estoppel" shall have the meaning set forth in Section 9.3.
"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).
"Rental Taxes" shall have the meaning set forth in Section 9.5.
"Rent Roll" shall have the meaning set forth in Section 7.1(e).
"Rents" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and other taxes, and other amounts payable by any Party
under the Leases (including, without limitation, the Outparcel Subleases), the
REA and the Anchor Subleases.
"Required Cure Items" shall have the meaning set forth in Section 3.2.
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"Sales Based Tenant Charges" shall mean Rent consisting of overage or
percentage rent.
"Security Deposits" shall have the meaning set forth in Section 6.8.
"Seller Closing Documents" shall have the meaning set forth in Section 5.2.
"Seller's Liabilities" shall have the meaning set forth in Section 2.3(b).
"Substantial Casualty" or "Substantial Taking" shall mean a Casualty or
Taking, as the case may be, where:
(a) the condemnation award, or the proceeds payable under the
applicable policy or policies of casualty insurance maintained by Seller, are
insufficient, in the reasonable opinion of Purchaser, by more than $500,000 to
fully repair the damage caused by such Casualty or Taking, unless Seller shall
(at its sole option and without any obligation to do so) grant to Purchaser a
credit equal to such deficiency; or
(b) an Anchor shall, by reason of such Casualty or Taking, either
terminate its Lease or its obligations under the REA, or cease operating at the
Property (other than temporarily due to such damage and destruction, remodeling,
renovation or any similar cause), or cease operating at the Property under the
name under which it was operating immediately prior to such Taking or Casualty
(as permitted by the provisions of such Lease or REA); or
(c) the Ground Lease shall, by reason of such Taking, terminate,
whether by its express terms or due to the action of the Ground Lessor or under
the terms of any applicable law, rule, ordinance or regulation; or
(d) the estimated time for repair or restoration, in the reasonable
opinion of Purchaser, shall exceed six (6) months; or
(e) in the case of a Taking, a taking with respect to such portion of
the Real Property as, when so taken would, in the reasonable opinion of
Purchaser, leave remaining a balance of the Real Property, which, due either to
the area taken or the location of the part taken would not, under applicable
zoning laws, building regulations and economic conditions then prevailing or
otherwise, readily accommodate a new or restructured building or buildings of a
type and size generally similar to the building or buildings existing on the
date hereof, or would result in inadequate parking or lack of reasonable access
to public roads.
"Survey" shall mean an Urban ALTA/ACSM Land Title Survey of the Real
Property by a surveyor licensed or registered in the State where the Real
Property is located, made in compliance with and meeting the accuracy standards
under the "Minimum Standard Detail Requirements for ALTA/ACSM Land Surveys"
jointly established by the American Land Title Association and American Congress
on Surveying and Mapping then in effect and containing Table A Optional Survey
Responsibilities and Specifications 1, 2, 3, 4, 6, 7(a), 7(b)(1), 7(c), 8, 9,
10, 11, 13, 14, 15 and 16; shall show the boundaries of each of the Land
parcels; shall show no strips, gores or gaps within the boundaries of the Land;
shall locate all easements created by recorded instruments (to the extent
plottable) or visible on the Real Property and shall disclose
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any encroachment by any of the Improvements, or any other structures located on
the Land, in violation of any such easements; shall contain a legal description
of the Land; shall show the location of any adjacent public streets, disclosing
access, if any, to the Land therefrom; shall show building line(s) and side yard
line(s), if any; shall show the configuration and number of parking spaces on
the Land; shall show the area of the Land; shall state whether the Land is
located in an area designated by HUD as having special flood risks; and shall
contain a certificate of the surveyor attesting to the accuracy of the Survey
and its conformity to the requirements of the aforesaid Minimum Standard Detail
Requirements, which certificate shall be directed to Seller, Purchaser and the
Title Company, and to such other persons having an interest in the Property
which Purchaser, Seller or the Title Company may designate.
"Taking" shall mean a taking of all or any portion of the Land or the Real
Property in condemnation or by exercise of the power of eminent domain or by an
agreement in lieu thereof.
"Tenant Estoppel" shall have the meaning set forth in Section 9.3.
"Tenants" shall mean tenants, concessionaires, licensees and/or occupants
under the Leases.
"Tenant Services" shall mean all services supplied by or on behalf of
Seller to Tenants for which Tenants are separately charged, other than services
in the nature of common area maintenance.
"Third Party Claim" shall have the meaning set forth in Section 10.3.
"TIC Agreement" means that certain Amended and Restated Tenancy in Common
Agreement dated as of April ___, 2001, among Seller, JCP and TMall.
"TIC Parties Consent" shall have the meaning set forth in Section 9.12.
"Title Commitment" shall mean the commitment for title insurance No.
020100628 issued by the Title Company to Purchaser with an effective date of
April __, 2001.
"Title Company" shall mean Chicago Title Insurance Company.
"Title Policy" shall mean an ALTA Form B-1970 Owner's Policy of Title
Insurance issued by the Title Company, dated the date and time of Closing and
with policy coverage in an amount acceptable to Purchaser, insuring Purchaser as
owner of good, marketable and indefeasible leasehold interest in and to the Land
and fee title to the Improvements, subject only to the Permitted Exceptions, and
affirmatively insuring as a part of Schedule A to such Title Policy Purchaser's
rights under the REA or other appurtenant easements that benefit the Real
Property and containing the following endorsements: an extended coverage
endorsement over the general exceptions contained in the policy, an endorsement
insuring against loss of title to the Property or the inability of the owner of
the Property to maintain the improvements now located on the Property by reason
of a violation of a covenant, condition or restriction of record affecting the
Property, a location endorsement insuring the accuracy of the Survey, an
endorsement insuring legal access to the Property from each of the streets
bordering on the Property, and insuring that all such streets are dedicated
public streets, a contiguity endorsement, a zoning 3.1
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endorsement including coverage over parking, a tax parcel endorsement, a utility
facility endorsement and such other endorsements requested by Purchaser.
"TMall" shall mean TMall-WN, L.L.C., an Arizona limited liability company,
and a tenant in common with respect to Tucson Mall.
"Transactions" shall mean the transactions contemplated by this Agreement.
"Xxxxx" shall mean XXXXX, Inc., an Ohio corporation, and the sole general
partner of Seller.
"Xxxxx Sublease" shall mean that certain Ground Sublease dated as of March
1, 2001, between Xxxxx, as Ground Sublessee, and Seller and JCP, collectively as
Ground Sublessor, as supplemented and amended by that certain First Supplement
to Ground Sublease dated as of April 16, 2001, between Xxxxx as Ground
Sublessee, and Seller, JCP and TMall, collectively as Ground Sublessor.
"Underground Storage Tanks" shall mean Underground Storage Tanks as defined
in Section 9001 of RCRA and as used herein, such term shall also include (i) any
farm or residential tank of 1,100 gallons or less capacity used for storing
motor fuel for noncommercial purposes, (ii) any tank used for storing heating
oil for consumption on the premises where stored, (iii) any septic tank and (iv)
any pipes connected to any of the items described in clauses (i) through (iii).
"Utility Deposits" shall have the meaning set forth in Section 6.8.
1.2 References. All references in this Agreement to particular sections or
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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 or article hereof.
ARTICLE II
Sale and Purchase
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2.1 Purchase and Sale Contract. Upon the terms and subject to the
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conditions contained herein, at the Closing, Seller shall sell, assign, transfer
and convey to Purchaser, and Purchaser shall purchase from Seller, all of
Seller's right, title and interest in and to the Property, free and clear of all
Liens other than the Permitted Exceptions.
2.2 Purchase Price. The purchase price for the Property (the "Purchase
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Price") shall be One Hundred Twenty-One Million Five Hundred Thousand and No/100
Dollars ($121,500,000.00) payable as follows:
(a) On the date upon which both parties have received a fully-
executed counterpart of this Agreement and the Xxxxxxx Money Escrow, Purchaser
shall deposit with the
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Escrow Agent the sum of Six Hundred Sixty-Six Thousand and No/100 Dollars
($666,000.00) (the "Xxxxxxx Money") to be held as an xxxxxxx money deposit
pursuant to the escrow agreement in the form of Exhibit B attached hereto and
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made a part hereof (the "Xxxxxxx Money Escrow"). All funds deposited in the
Xxxxxxx Money Escrow shall be invested in interest-bearing or money-market
accounts. Upon and subject to the occurrence of the Closing, all funds on
deposit in the Xxxxxxx Money Escrow shall be transferred to Escrow Agent under
the terms of the Closing Escrow Agreement, such amount to be applied in partial
payment of the Purchase Price. The parties shall issue instructions to the
Escrow Agent to effectuate the provisions of this Section 2.2(a). The provisions
of this Section 2.2(a) shall survive the termination of this Agreement, however
caused.
(b) The balance of the Purchase Price, less the aggregate amount of
the Xxxxxxx Money, less the Option Fee plus or minus applicable prorations
described below, shall be deposited by Purchaser in escrow under the terms of
the Closing Escrow Agreement in immediate, same-day federal funds (all or any
part of which may be the proceeds of a loan) wired for credit into such account
as Escrow Agent may designate on the Closing Date.
2.3 Assumption of Liabilities.
-------------------------
(a) At the Closing, Purchaser shall assume (i) the contractual
liabilities and obligations of Seller arising from and after the Closing Date
under or in respect of the Ground Lease, the Xxxxx Sublease, the Leases
(including any obligation to refund any Security Deposits), the REA, the Anchor
Subleases and the Assumed Contracts (with the liability of Purchaser being
limited in each case to the same extent, if any, as Seller's liability is
limited thereunder), provided, however, that Purchaser shall not assume (and
Seller shall retain) any liabilities and obligations that relate to or arise
from any default, breach or claim which arose, accrued, occurred or existed
prior to the Closing Date and (ii) other liabilities and obligations herein
described to the extent Purchaser has received proration credit therefor. All of
the obligations to be assumed by Purchaser pursuant to this Section 2.3(a) are
hereinafter referred to as the "Assumed Liabilities".
(b) Except as otherwise herein expressly provided, Purchaser is not
assuming and shall not by virtue of the consummation of the Transactions be
deemed to have assumed any liabilities or obligations of Seller, whether or not
the same relate to the Property or were incurred in connection with the
ownership, use, management or operation thereof by Seller or by its agents
(collectively, "Seller's Liabilities"). Without limiting the foregoing, Seller's
Liabilities shall include (i) all federal, state and local taxes of whatever
kind and nature assessed against, incurred by or due from Seller or assessed
against the Property and due and payable prior to the Closing Date (other than
real estate taxes and assessments on real property for which Purchaser has
received credit under Article VI), (ii) liabilities relating to any employees,
employee benefit plans or collective bargaining agreements of Seller, including
without limitation compliance with all applicable laws, rules and regulations in
connection with employment, benefits and labor issues, severance obligations,
and liabilities or expenses relating to the claims disclosed on Schedules
7.1(g), (h), (m) and (bb), and (iii) liabilities with respect to any litigation,
proceedings or claims against Seller.
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ARTICLE III
Title Insurance and Survey
--------------------------
3.1 Delivery of Updated Title Commitment, Lien Searches and Survey.
--------------------------------------------------------------
Purchaser has received the Title Commitment. Within ten (10) days after the
Execution Date, Seller, at Seller's sole cost and expense, shall cause the Title
Company to deliver a current update of the Title Commitment to Purchaser. Within
ten (10) days after the Execution Date, Seller, at Seller's sole cost and
expense, shall deliver the Lien Searches to Purchaser. Within ten (10) days
after the Execution Date, Seller, at Seller's sole cost and expense, shall
deliver the Survey to Purchaser.
3.2 Title Defects. Within fifteen (15) days after receipt by
-------------
Purchaser of the last to be received of the updated Title Commitment, the Lien
Searches and the Survey, Purchaser shall notify Seller in writing (a
"Disapproval Notice") of any Defects other than Permitted Exceptions that are
objected to by Purchaser. With respect to any Defects noted in a Disapproval
Notice, Seller (a) shall cause any such Defects which are monetary liens of a
fixed and ascertainable amount that may be removed solely by the payment of
money, including without limitation, mortgage liens, security interests,
judgment and mechanics' liens (collectively hereinafter referred to as "Required
Cure Items"), to be removed, cured or insured over at or prior to the Closing
and shall deposit with the Title Company releases or other appropriate
instruments, in recordable form, sufficient to cause the removal of such items
from the title (provided, however, that in no event shall Seller be required to
pay more than One Hundred Million Dollars ($100,000,000.00) in the aggregate
with respect to Required Cure Items), and (b) shall notify Purchaser in writing
within ten (10) days after receipt of the Disapproval Notice whether Seller will
cause all or any of such other Defects to be removed, cured or insured over at
or prior to Closing, and Seller shall be deemed to have elected to remove, cure
or insure over all other Defects by Closing if Seller does not notify Purchaser
to the contrary in writing within such ten (10) day period. Any Defect shown on
the Title Commitment, the Survey or the Lien Searches, or on any update of the
Title Commitment, the Survey or the Lien Searches, and not noted by Purchaser in
a Disapproval Notice within the required time period shall be deemed to be a
Permitted Exception. If Seller elects not to remove, cure or insure over all
Defects, Purchaser may elect, in its sole discretion, (i) subject to
satisfaction of the other conditions to Closing, to close the purchase of the
Property, take title subject to the Defect noted in the Disapproval Notice that
Seller elects not to remove, cure or insure over and deduct from the Purchase
Price all costs incurred by Purchaser in connection with Purchaser's cure or
removal of each Required Cure Item up to a maximum of One Hundred Million
Dollars ($100,000,000.00) in the aggregate for all of the Required Cure Items,
or (ii) to terminate this Agreement, in which event the Xxxxxxx Money and all
interest accrued thereon shall be immediately returned to Purchaser. Seller
shall use commercially reasonable efforts to remove, cure or insure over all
Required Cure Items and all Defects that Seller elects, or is deemed to have
elected, to cure, remove or insure over. Seller shall have thirty (30) days to
remove, cure or insure over any Defect that it has elected to remove, cure or
insure over (or is deemed to have elected to remove, cure or insure over). The
Closing Date shall be extended as necessary to permit the parties to exercise
their respective rights and obligations pursuant to this Section 3.2. If any
other update of the Title Commitment, or any update of the Lien Searches or the
Survey at any time discloses any Defects which are not Permitted Exceptions and
which were not previously disclosed, Purchaser shall deliver a Disapproval
Notice to Seller within five (5) business days after receipt
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of such update and thereafter the rights and obligations of Seller and Purchaser
shall be as set forth above in this Section 3.2 with respect to removal or cure
of such new Defects. Notwithstanding anything to the contrary contained in this
Agreement, any insurance obtained by Seller over a Defect or a Required Cure
Item shall be by endorsement to the Title Policy in form and substance
reasonably acceptable to Purchaser.
3.3 Purchaser's Options Upon Failure to Cure. If any Defect that
----------------------------------------
Seller has elected to remove, cure or insure over (or is deemed to have elected
to remove, cure or insure over) has not been removed or cured or insured over,
in each case to Purchaser's reasonable satisfaction, at least five (5) days
prior to Closing (as may be extended pursuant to Section 3.2 hereof), or
provision for its removal, cure or insuring over by Closing has not been made to
Purchaser's reasonable satisfaction, Purchaser may elect, in its sole
discretion: (a) subject to satisfaction of the other conditions to Closing, to
close the purchase of the Property, and take title subject to any Defects that
have not been cured, removed or insured over at or before Closing (provided that
such election shall not release Seller from its obligation to cure, remove or
insure over Defects after the Closing or to provide for such cure, insurance
over or removal by deposit of sufficient funds in an escrow account with the
Title Company, which obligation shall survive the Closing); (b) subject to
satisfaction of the other conditions to Closing, to close the purchase of the
Property, cure or remove any Required Cure Items that have not been cured,
insured over or removed by Seller, and deduct from the Purchase Price all actual
costs incurred by Purchaser in connection with its cure or removal of any
Required Cure Items; or (c) to terminate this Agreement, in which event the
Xxxxxxx Money and all interest accrued thereon shall be immediately returned to
Purchaser.
3.4 Reinsurance. Seller shall cause the Title Company to agree to
-----------
reinsure portions of the risk covered by its title insurance policies with
reinsurance companies reasonably satisfactory to Purchaser under standard ALTA
forms of facultative reinsurance agreements.
ARTICLE IV
Costs and Expenses
------------------
4.1 Costs of the Transactions. Costs in connection with the
-------------------------
Transactions shall be paid as follows:
(a) Seller shall pay the cost of obtaining the Title Commitment,
the updated Title Commitment and the Title Policy and the cost of recording any
documents required to release, cure or remove Defects;
(b) Seller shall pay the cost of obtaining the Survey;
(c) Purchaser shall pay the cost of recording the assignment of
Seller's interest in the Ground Lease to Purchaser and the deed with respect to
Seller's interest in the Improvements and Seller shall pay the cost of recording
any other documents required to vest title to the Property in Purchaser;
(d) Seller shall be solely responsible for the payment of any
real property transfer taxes, gains taxes levied or imposed upon Seller or the
Property as a result of the transfers to Purchaser, sales taxes levied or
imposed upon Seller or the Property as a result of the
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transfers to Purchaser, documentary stamps and other taxes, fees or charges
imposed in connection with the conveyance of the Property or any portion
thereof;
(e) Seller shall pay all filing fees and charges and any
personal property sales taxes in connection with the transfer of the Personalty
to Purchaser; and
(f) Seller shall pay the costs of the Lien Search.
4.2 Escrow Costs. The cost of the escrow created pursuant to the
------------
Xxxxxxx Money Escrow and the cost of the escrow created pursuant to the Closing
Escrow Agreement, including, without limitation, any "New York Style" escrow
fees, shall be divided equally between Seller and Purchaser.
4.3 Other Costs. Seller 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. Purchaser and Seller shall each pay their
respective legal fees incurred in connection with the drafting and negotiation
of this Agreement and the Closing of the Transactions.
ARTICLE V
Closing
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5.1 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 a date
selected by Purchaser and reasonably acceptable to Seller (the "Closing Date")
by written notice to Seller, but in no event later than August 31, 2001.
5.2 Seller Closing Documents. On or prior to the Closing Date, Seller
------------------------
shall deliver, or cause to be delivered, to Purchaser (either directly or under
the terms of the Closing Escrow Agreement) the following documents
(collectively, the "Seller Closing Documents"), duly executed by Seller and the
other parties thereto (other than Purchaser) and in form and substance
reasonably acceptable to Purchaser and to Seller unless the form thereof is
attached hereto:
(a) Assignment of all of Seller's right, title and interest in
and to the Ground Lease and sufficient to vest in Purchaser Seller's insurable
estate and leasehold interest in the Real Property.
(b) Limited Warranty Deed in proper statutory form for
recording, so as to convey the entire fee simple estate of Seller in the
Improvements to Purchaser.
(c) Assignment of all of Seller's right, title and interest
under the Xxxxx Sublease, in form suitable for recording.
(d) Assignment of all of Tusar's right, title and interest under
the Xxxxx Sublease, in form suitable for recording.
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(e) Assignment or assignments of all of Seller's right, title
and interest under the Leases, all of which, to the extent the same relate to
Leases or memoranda thereof which have been recorded in appropriate land
records, shall be in form suitable for recording.
(f) Assignment of all of Seller's right, title and interest in
the REA with respect to the Property in form suitable for recording.
(g) Assignment or assignments of all of Seller's right, title
and interest under the Anchor Subleases, all of which shall be in form suitable
for recording.
(h) Assignment of all of Seller's right, title and interest in
and to the Assumed Contracts.
(i) Xxxx of Sale sufficient to transfer to Purchaser all of
Seller's right, title and interest in and to the Personalty.
(j) 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.
(k) The Estoppels.
(l) An updated Rent Roll in accordance with Section 7.1(e).
(m) Such certificates as Purchaser 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.
(n) A written certificate executed on behalf of Seller and
addressed to Purchaser to the effect that all of the representations and
warranties of Seller herein contained in Section 7.1 are true and correct in all
material respects as of the Closing Date with the same force and effect as
though remade and repeated in full on and as of the Closing Date.
(o) Written notices (i) to the Parties to the REA advising them
of the change of ownership and directing them to pay all charges under the REA
as directed by Purchaser; (ii) to the Tenants advising them of the change of
ownership and directing them to pay Rents and other charges under their
respective Leases as directed by Purchaser; and (iii) to each Party to each of
the Contracts advising of the transfer and assignment of Seller's interest in
the Contracts to Purchaser and directing that future inquiries be made directly
to Purchaser.
(p) Such documents and instruments as shall be reasonably
required to substitute Purchaser for Seller as the plaintiff in legal actions
contemplated by Section 6.9(c).
(q) Certificate issued by the Arizona Secretary of State, dated
not more than twenty (20) days prior to the Closing Date, certifying the good
standing of Seller and a Certificate issued by the Ohio Secretary of State,
dated not more than twenty (20) days prior to the Closing Date, certifying the
good standing of the general partner of Seller.
-15-
(r) Copies of the Certificate of Limited Partnership of Seller
and any amendments thereto, certified by the Secretary of State of Arizona as of
a date not more than twenty (20) days prior to the Closing Date, together with a
certificate of the general partner(s) of Seller, to the effect that the
Certificate of Limited Partnership of Seller, as certified by the Secretary of
State aforesaid has not been further amended, revised, restated, cancelled or
rescinded up to and including the Closing Date and that the attached copy of the
partnership agreement of Seller and amendments thereto is true, accurate and
complete.
(s) Copies of the Articles of Organization of the general
partner of Seller and any amendments thereto, certified by the Ohio Secretary of
State as of a date not more than twenty (20) days prior to the Closing Date,
together with a certificate of an officer of such general partner to the effect
that the Articles of Organization thereof, as certified by the Secretary of
State aforesaid, have not been further amended, revised, restated, cancelled or
rescinded up to and including the Closing Date.
(t) Original, or copies certified by Seller as true and correct,
of the Ground Lease, the Xxxxx Sublease, the TIC Agreement, the Anchor
Subleases, the Leases and the REA, together with all Books and Records.
(u) Keys and combinations to locked compartments under Seller's
control within the Property.
(v) An update of Schedule 7.1(f) showing amounts payable as of
the Closing Date or a date not more than ten (10) days prior thereto.
(w) The schedules referred to in Sections 6.4(b), 6.6 and 6.8.
(x) The Ground Lessor Consent, the TIC Parties Consent and the
Contract Party Consents if required by any Assumed Contracts.
(y) The instruments, documents or certificates as are reasonably
required by the Title Company to be executed or provided by Seller as a
condition to the issuance of the Title Policy at the Closing pursuant to the
Title Commitment, including, without limitation, owner's affidavits and
mechanics' lien affidavits.
(z) Any instruments, documents or certificates reasonably
required to be executed by Seller with respect to any state, county or local
transfer taxes applicable to the conveyance of the Property pursuant to this
Agreement.
(aa) Assignment of all of Seller's right, title and interest in
and to the TIC Agreement.
(bb) Such other documents, instruments or agreements which Seller
is required to deliver to Purchaser pursuant to the other provisions of this
Agreement or which Purchaser or the Title Company reasonably may deem necessary
in order to consummate the Transactions and to better vest in Purchaser title to
the Property; provided, however, that any such other document, instrument or
agreement which Purchaser reasonably deems necessary shall not impose upon
Seller any obligation or liability other than an obligation or liability
expressly imposed upon
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Seller pursuant to the terms of this Agreement or pursuant to the terms of the
other Seller Closing Documents specified in this Section 5.2.
Notwithstanding any provision to the contrary set forth elsewhere in this
Agreement, if after the use of best efforts to do so Seller is unable to deliver
to Purchaser at Closing the Ground Lessor Consent, the TIC Parties Consent, the
Contract Party Consents or the Estoppels, Purchaser shall have the option, as
Purchaser's sole and exclusive right and remedy either (i) to terminate this
Agreement by giving written notice of such termination to Seller on or before
the Closing or (ii) to complete Closing without the delivery of such item or
items and waive the requirement for the delivery of such item or items. If
Purchaser shall terminate this Agreement pursuant to the provisions of this
Section, this Agreement shall be null and void and no party shall have any
further rights or obligations under this Agreement (other than any right or
obligation that expressly survives the termination of this Agreement), and the
Xxxxxxx Money and all interest accrued thereon, net of one-half ( 1/2) of any
fees or costs charged by the Escrow Agent, shall immediately be returned to
Purchaser.
5.3 Purchaser Closing Documents. On or prior to the Closing Date,
---------------------------
Purchaser shall deliver to Seller (either directly or under the terms of the
Closing Escrow Agreement) the following documents (herein referred to
collectively as the "Purchaser Closing Documents"), duly executed by an
authorized officer on behalf of Purchaser and the other parties thereto (other
than Seller) and in form and substance reasonably acceptable to Seller and to
Purchaser unless the form thereof is attached hereto:
(a) An agreement or agreements, in recordable form, to the extent the
same relates to recorded instruments, pursuant to which Purchaser assumes the
obligations of Seller under the Ground Lease, the Xxxxx Sublease, the TIC
Agreement, the Leases, the Anchor Subleases and the REA.
(b) A certificate issued by the Secretary of State of Delaware dated
not earlier than ten (10) days prior to the Closing Date certifying the good
standing of Purchaser as of the date of such certificate.
(c) A written certificate executed on behalf of Purchaser and
addressed to Seller to the effect that all of the representations and warranties
of Purchaser contained in Section 7.2 are true and correct in all material
respects on and as of the Closing Date with the same force and effect as though
remade and repeated in full on and as of the Closing Date.
(d) Any instruments, documents or certificates required to be
executed by Purchaser with respect to any state, county or local transfer taxes
applicable to the conveyance of the Property pursuant to this Agreement.
(e) Such other documents, instruments or agreements which Purchaser
may be required to deliver to Seller pursuant to the other provisions of this
Agreement or which Seller or the Title Company reasonably may deem necessary to
consummate the Transactions; provided, however, that any such other document,
instrument or agreement which Seller reasonably deems necessary shall not impose
upon Purchaser any obligation or liability other than an obligation or
-17-
liability expressly imposed upon Purchaser pursuant to the terms of this
Agreement or pursuant to the terms of the other Purchaser Closing Documents
specified in this Section 5.3.
5.4 Joint Deliveries. Seller and Purchaser shall jointly execute and
----------------
deliver a Closing Statement with respect to the Transactions.
ARTICLE VI
Prorations and Adjustments
--------------------------
6.1 Prorations. Subject to the other provisions of this Article, the items
----------
pertaining to the Property that are identified in this Article shall be prorated
between the parties on a per diem basis (employing the actual number of calendar
days in the period involved and a 365-day year) so that credits and charges with
respect to such items for all days preceding the Closing Date shall be allocated
to Seller, and credits and charges with respect to such items for all days
including and after the Closing Date shall be allocated to Purchaser. Each
payment received shall be attributed to the most recent period for which such a
payment is due. The parties shall make final adjusting payments as provided in
Section 6.10 hereof. All prorations not specifically agreed to herein shall be
made in accordance with customary practice in the county in which the Property
is located. This Article VI shall survive the Closing.
6.2 Items to be Prorated. The following items shall be prorated between
--------------------
Purchaser and Seller as of 11:59 p.m. (local time at the Property) on the day
immediately preceding the Closing Date:
(a) real property taxes and assessments (or installments thereof)
based on the most recent tax bills except those required to be paid directly to
the entity imposing the same by Tenants;
(b) water rents and charges, if any, except those required to be paid
directly to the entity imposing the same by Tenants;
(c) sewer taxes and rents, if any, except those required to be paid
directly to the entity imposing the same by Tenants;
(d) actually accrued interest, if any, required to be paid to a Party
on Security Deposits;
(e) amounts, if any, payable by Seller or owed to Seller under the
REA or the Anchor Subleases;
(f) amounts, including, without limitation, ground rent, payable by
Seller (or Xxxxx) or owed to Seller (or Xxxxx) under the Ground Lease, the Xxxxx
Sublease and the TIC Agreement;
(g) annual permit, license and inspection fees, if any, on the basis
of the fiscal year for which levied, if the rights with respect thereto continue
for the benefit of Purchaser following the Closing;
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(h) fuel oil and liquid propane gas, if any, at the cost per gallon
or cubic foot most recently charged to Seller with respect to the Property,
based on the supplier's measurements thereof, plus sales taxes thereon;
(i) deposits, if any, on account with any utility company servicing
the Property;
(j) deposits on account with any municipality having jurisdiction
over the Property (other than deposits which are in the nature of security for
the performance of work);
(k) amounts paid or payable by or to Seller to or from merchants and
other associations for promotional funds and other similar contributions or
payments;
(l) Rents;
(m) amounts paid or payable by Seller under the Assumed Contracts;
(n) Purchaser shall receive a credit from Seller at Closing for the
funds held by Seller with respect to outstanding gift certificates; and
(o) all other items customarily apportioned in connection with the
sale of similar properties similarly located.
Seller shall prepare and send to Purchaser and Tenants and each REA Party
calculations and tenant xxxxxxxx for periods ending on or prior to the Closing
Date with respect to Adjustable Tenant Charges, Sales Based Tenant Charges and
advertising marketing and promotional contributions. Seller shall cooperate
with Purchaser in the transfer of electricity, gas, water and other utility
services from Seller's name to the name of Purchaser as of the Closing Date.
6.3 Installment Payment of Assessments. In furtherance of Section 6.2, if
----------------------------------
any real property assessment affects the Property at the Closing and such real
property assessment is payable in installments (whether at the election of
Seller or otherwise), the installment relating to, or payable over, the
Applicable Closing Fiscal Period shall be apportioned between Seller and
Purchaser as of 11:59 p.m. local time at the Property on the day immediately
preceding the Closing Date, and the remaining installments shall be the
obligation of Purchaser.
6.4 Adjustable Tenant Charges.
-------------------------
(a) At the Closing, there shall be no adjustment with respect to any
amounts required to be paid as Adjustable Tenant Charges by Tenants which were
due and payable on or before, but remain unpaid on, the Closing Date except as
set forth in Subsection 6.4(b). At the Closing, Seller shall deliver to
Purchaser a true and correct schedule setting forth in reasonable detail and
certifying the amount of Adjustable Tenant Charges collected and expenditures
for such items of expense (and any credits for real estate taxes) made by Seller
for the portion of the Applicable Closing Fiscal Period which precedes the
Closing Date and for any prior fiscal period.
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(b) Any amounts collected by Purchaser after the Closing Date which
relate to Adjustable Tenant Charges payable with respect to any fiscal period
ending prior to the Applicable Closing Fiscal Period shall be remitted to
Seller. Within ninety (90) days following the end of the Applicable Closing
Fiscal Period and from time to time thereafter as amounts are received by
Purchaser from Parties, the aggregate amount of Adjustable Tenant Charges, if
any, collected and retained by Purchaser and Seller with respect to the
Applicable Closing Fiscal Period shall be apportioned and adjusted such that the
total amount of such Adjustable Tenant Charges received by Purchaser, on the one
hand, and Seller, on the other hand, shall be in the same proportion as the
amount of the expense items to which such Adjustable Tenant Charges relate which
each has borne (including without limitation real estate taxes or assessments
for which either party has received credit under Section 6.2), and, to the
extent that either shall have received a greater share of the payments with
respect to Adjustable Tenant Charges, such party or parties shall promptly
settle such excess with the other.
6.5 Fixed and Other Tenant Charge Arrearages. Subject to the provisions of
----------------------------------------
Section 6.7(c), Fixed and Other Tenant Charge Arrearages (which, for purposes of
this Section 6.5, shall include, without limitation, any real estate taxes or
special assessments or other amounts otherwise required to be paid by a Party
directly to the taxing authority but actually paid by Seller to the taxing
authority with respect to the amount of the taxes or special assessments
actually paid), if and when collected, shall be paid to Purchaser as to Fixed
and Other Tenant Charge Arrearages which relate to periods from and after the
Closing Date, and to Seller with respect to all other Fixed and Other Tenant
Charge Arrearages.
6.6 Sales Based Tenant Charges. Sales Based Tenant Charges which are
--------------------------
payable with respect to any period ending prior to the Closing Date or which
have been accrued prior to the Closing Date shall not be apportioned as of the
Closing Date. In lieu thereof, such amounts shall be apportioned, after the
Closing Date, so that the amount thereof under each of the Leases to which
Seller shall be entitled, as finally determined, shall be the entire amount
thereof with respect to any fiscal period ending prior to the Closing Date, and,
for the Applicable Closing Fiscal Period, an amount which bears the same ratio
to the total Sales Based Tenant Charges as the number of days in the Applicable
Closing Fiscal Period which have elapsed prior to the Closing Date bears to the
total number of days in the Applicable Closing Fiscal Period. At the Closing,
Seller shall deliver to Purchaser a true and correct schedule setting forth in
reasonable detail and certifying the amount of Sales Based Tenant Charges
collected for the portion of the Applicable Closing Fiscal Period through the
Closing Date.
6.7 Application of Rent Receipts. Notwithstanding anything to the contrary
----------------------------
contained herein, in determining the adjustments and apportionments pursuant to
Sections 6.4, 6.5 and 6.6, the following shall apply:
(a) Payments of Rents (other than Rents collected pursuant to Section
6.9(b)) shall be deemed to have been made by a Party first in payment of Fixed
and Other Tenant Charges (other than charges for Tenant Services), second in
payment of Sales Based Tenant Charges, third to the payment of charges for
Tenant Services (and designated as such in the Lease), fourth to the payment of
Adjustable Tenant Charges, and last to the payment of all other items of Rent
payable by such Party.
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(b) Any amounts collected by Purchaser as Sales Based Tenant Charges
and Adjustable Tenant Charges, within each category, shall be deemed to have
been paid by the Party, first, on account of amounts then due Purchaser for
periods after the Applicable Closing Fiscal Period, next, on account of amounts
then due for the Applicable Closing Fiscal Period and, next, on account of
amounts then due for all fiscal years prior to the Applicable Closing Fiscal
Period.
(c) If Purchaser shall receive any Fixed and Other Tenant Charges
after the Closing Date from a Party who is delinquent as of the Closing Date in
the payment of Fixed and Other Tenant Charges payable under its Lease or the
REA, as the case may be, such Fixed and Other Tenant Charges shall be deemed to
have been paid by the Party, first, on account of amounts owing to Purchaser,
next, on account of Fixed and Other Tenant Charge Arrearages due to Seller
(after reduction for amounts collected pursuant to Section 6.9(b)), and the
balance remaining thereafter shall be retained by Purchaser.
(d) Notwithstanding anything to the contrary contained in this
Section 6.7, a payment of Rent shall be applied to the payment of the item or
items of Rent designated by the party making such payment or to which such
payment otherwise clearly relates in the good faith judgment of Purchaser.
6.8 Security and Utility Deposits. At the Closing, Seller shall furnish
-----------------------------
Purchaser with a schedule setting forth and certifying, as of the Closing Date,
the unapplied and unreturned portion of any security deposits which have been
deposited with Seller or its agents by any existing Tenants (the "Security
Deposits") and the amount of any deposits on account with any utility company
servicing the Property that will continue for the benefit of Purchaser following
Closing ("Utility Deposits") (currently $0), and Purchaser shall receive a
credit against the Purchase Price payable at Closing in the amount of the
Security Deposits, together with all interest, if any, accrued thereon and
required to be paid to Tenants. Purchaser shall reimburse Seller at Closing for
the amount of the Utility Deposits. To the extent Purchaser receives any
Security Deposits, or credit therefor on the closing statement, Purchaser hereby
agrees to assume liability for the return of such Security Deposit as required
under, and subject to, the terms of the applicable Lease.
6.9 Collection of Rents.
-------------------
(a) For a period of six (6) months after the Closing Date Purchaser
shall use reasonable efforts to collect the Fixed and Other Tenant Charge
Arrearages, Adjustable Tenant Charges, Sales Based Tenant Charges and other
Rents which are payable with respect to the Applicable Closing Fiscal Period and
any prior fiscal period, in a manner consistent with the efforts Purchaser
exercises on its own behalf; provided, however that Purchaser shall not be
required to retain a collection agency, commence litigation or file proofs of
claim or commence an adversary proceeding in a bankruptcy case, or terminate
Leases or the REA in connection with such collection efforts. Purchaser shall
not waive or settle any claims for any such amounts in whole or in part to the
extent such amounts, if collected, would be payable to Seller hereunder other
than in accordance with the policies of Purchaser from time to time as to Rent
delinquencies generally. After the expiration of six (6) months from the Closing
Date, Purchaser shall have no obligation to collect any Rents that may be owed
to Seller. Reasonable collection
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costs shall be charged against amounts collected and charged to the parties
hereto in the proportion in which each is entitled to the proceeds of such
collection.
(b) Seller shall have the right to seek collection of any Fixed and
Other Tenant Charge Arrearages owed to it and not collected by or on behalf of
it within six months following the Closing Date; provided, however, that in
seeking to collect any such Fixed and Other Tenant Charge Arrearages, Seller
shall not be entitled to terminate any Lease or the REA or otherwise seek any
remedy which could materially affect or impact the Property or the ownership or
operation thereof other than a money judgment against the delinquent Party.
Purchaser shall not be required to join in any such actions or proceedings
commenced by Seller unless the provisions of any law, rule or regulation at the
time in effect shall require that such actions or proceedings be brought by
and/or in the name of Purchaser, in which event Purchaser shall join and
cooperate in such actions or proceedings or permit the same to be brought by
Seller in Purchaser's name but Seller shall pay all costs and expenses relating
thereto, including without limitation Purchaser's reasonable legal fees in
reviewing pleadings and other materials filed in connection with such
litigation.
(c) Notwithstanding anything to the contrary contained herein,
Purchaser shall have the right at any time on or after the Closing, and whether
or not its joinder shall be required as a matter of law, to join in, or to be
substituted for Seller in, any proceedings for the eviction of Tenants and/or
the collection of Rent which may have been instituted by Seller either prior to
or after the Closing, if the Tenant in question is still in possession of the
premises covered by its Lease and if, in connection therewith, Purchaser intends
to seek eviction of such Tenant, cancellation of the Lease or repossession of
the premises. If Purchaser joins in, or is substituted for Seller as plaintiff
in any such litigation, Purchaser shall, thereafter, assume sole liability for
all costs and expenses of such litigation, including legal fees and expenses, as
may thereafter be incurred (except as provided below) and shall thereafter
control all aspects of such proceedings, except that Purchaser shall not be
entitled to waive, reduce or otherwise compromise any claims for Rent relating
to any period prior to Closing other than in accordance with the policies of
Purchaser from time to time as to Rent deficiencies generally. Seller in any
event may, at its option, continue to participate in such litigation. In any
event, Seller shall reimburse Purchaser for a pro rata portion of Purchaser's
costs and expenses of such collection in proportion to, but in no event in an
amount greater than, the amount, if any, actually received by Seller after
Closing as a result of such proceedings; provided, however, Seller shall be
entitled to a credit for actual and reasonable legal fees and expenses incurred
by Seller prior to the intervention by Purchaser in connection with the
proceedings previously instituted by Seller in connection with such collection
efforts.
6.10 Settlement of Adjustments.
-------------------------
(a) Seller and Purchaser acknowledge that it may be difficult to
calculate, as of the day immediately preceding the Closing Date, certain of the
adjustments, apportionments and payments to be made pursuant to this Article VI.
Accordingly, Seller and Purchaser hereby agree that any adjustments,
apportionments and payments otherwise required to be made as of the Closing Date
may to the extent necessary or desirable be estimated by Purchaser and Seller
based on the most recent available data, and, as soon as practicable and if
necessary from time to time after the Closing Date, additional adjustments,
apportionments and payments shall be made
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to adjust for any differences between the actual apportionment or adjustment and
the amount thereof estimated as of the Closing Date. Any errors or omissions in
computing apportionments at the Closing shall be corrected promptly after their
discovery.
(b) Except for amounts expressly required to be settled by assignment
of accounts or deposits pursuant to the above provisions, net prorations and
adjustments made pursuant to this Article VI as of the Closing Date and
determined as provided in subsection (a) above shall be settled in cash. From
time to time after the Closing as further adjustments are made as herein
provided, settlement thereon between Seller and Purchaser shall be made in cash.
(c) Purchaser, upon reasonable advance notice, shall provide Seller
with access to its books and records, including back-up calculations and
information, relating to the calculation of the adjustments required to be made
pursuant to this Article VI.
(d) Notwithstanding anything to the contrary contained herein, a
final determination of the amounts owing under this Article VI shall be made as
of the date that is eighteen (18) months after the Closing Date, and the amounts
determined as of such date to be owing settled in cash no later than ten (10)
days thereafter. No further adjustments or payments shall be required to be made
under this Article VI thereafter (except with respect to legal proceedings for
or bankruptcy claims in respect of the collection of Rent which are pending on
such date or legal proceedings or bankruptcy claims brought by Seller under
Section 6.9(b)).
6.11 No other Adjustments. Except as otherwise expressly set forth in this
--------------------
Article VI, no adjustments or apportionments shall be made with respect to the
expense items listed in Section 6.2 hereof (other than real estate taxes and
assessments, as to which adjustment shall be made as set froth in Section 6.2)
for the Applicable Closing Fiscal Period or any fiscal period to the extent such
expense items are payable or reimbursable from funds collected as Adjustable
Tenant Charges. Seller shall be responsible for the payment of all such
expenses incurred by it, and Purchaser shall be responsible for the payment of
all such expenses incurred by it (including without limitation real estate taxes
and assessments for which Purchaser has received credit under Section 6.2).
ARTICLE VII
Representations and Warranties
------------------------------
7.1 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser as follows:
(a) Seller is a limited partnership duly formed, validly existing and
in good standing under the laws of the State of Arizona with full power and
authority to execute, deliver and perform this Agreement. Xxxxx, Inc. is the
sole general partner of Seller and is a corporation duly formed, validly
existing and in good standing under the laws of the State of Ohio, with full
power and authority to execute and deliver this Agreement as the general partner
of Seller.
(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 and by all necessary corporate action on the part of the general
partner of Seller. This Agreement has been, and the Seller Closing Documents
will be, duly executed and delivered by Seller. This Agreement
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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 without
limitation any governmental body, agency or instrumentality) under (i) the
organizational documents of Seller or its general partner or, except with
respect to the terms of the mortgage indebtedness of Seller (which mortgage
indebtedness will be re-paid in full at Closing), any agreement, instrument or
other document to which Seller or its general partner is a party or by which it
is bound or (ii) any judgment, decree, order, statute, injunction, rule,
regulation or the like of a governmental unit applicable to Seller or its
general partner.
(d) [Intentionally Deleted]
(e) Schedule 7.1(e) is a rent roll and schedules for the Property
(the "Rent Roll") as of ____________, 2001 showing the identification of each
rentable space in the Property (including, without limitation, areas leased
under the terms of the Outparcel Subleases), whether leased or not, and for each
such space, the name of the Tenant, the expiration date of the current term of
the Lease, the minimum or fixed monthly rent payable, space location number,
commencement date, square footage, percentage rent rate, sales breakpoint for
computing percentage rent, the unapplied amount of any security deposit held,
and all outstanding rent abatements, tenant allowances or other tenant
concessions and the existence of renewal options. Seller shall deliver an
updated Rent Roll to Purchaser fifteen (15) days prior to the Closing Date. All
information therein is accurate as of its date. Except as set forth to the
contrary on Schedule 7.1(e), no Tenant has paid any rent in advance except for
the current month.
(f) Schedule 7.1(f) is a schedule of Fixed and Other Tenant Charge
Arrearages, together with any other delinquencies in Rent, showing amounts
payable as of the Execution Date by each Party, which schedule sets forth
separately and certifies the items of Rents with respect to which each such
Party is in arrears, the amount of each item and the period of such arrearage.
(g) Schedule 7.1(g) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto (including,
without limitation, side letters) regardless of whether the terms thereof have
commenced, setting forth with respect to each the date thereof and of each
modification thereof and supplement thereto and 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 knowledge of any such assignment). A true and complete
copy of each Lease, together with each written modification thereof and
supplement thereto, has heretofore been furnished to Purchaser for inspection.
Each such Lease constitutes the entire agreement with each Party thereto, and
there are no oral promises or agreements amending, modifying or supplementing
the same.
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(i) There are no leases, licenses, occupancy agreements or
other rights of occupancy or use with respect to any portion of the
Property other than the Leases. Each of the Leases is in full force and
effect, and no Tenant monies or deposits are held by Seller or Seller's
agent, except the deposits described on the Rent Roll and Rents prepaid for
the current month. As of the Closing Date, Seller shall not have assigned
any Rents due under, or any other interest in, any of the Leases to any
party other than Purchaser, or otherwise pledged or encumbered in any way
except for a collateral assignment to Existing Lender securing the Existing
Financing.
(ii) Except as set forth on Schedule 7.1(g), no Tenant has made
any written claim (A) that Seller has defaulted in performing any of its
obligations under any of the Leases which has not heretofore been cured,
(B) 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) Except as set forth on Schedule 7.1(g), Seller has no
actual knowledge that any Tenant is in default under its Lease.
(iv) There are no rent abatements or other tenant concessions or
inducements, including, without limitation, lease assumptions or buy-outs,
applicable to any of the Leases or any options or rights to extend, renew
or terminate any of such Leases, and no Tenant has any rights, options or
rights of first refusal of any kind which are currently in effect, to
purchase or to otherwise acquire the Property or any part thereof or
interest therein, except as set forth in the Leases, the Rent Roll or on
Schedule 7.1(g). All of the improvements to be constructed by the landlord
under each of the Leases, or as required under any collateral agreement,
plans or specifications related to the Leases, have been fully completed
and paid for.
(h) The REA constitutes the only reciprocal easement agreements or
operating agreements encumbering the Property. A true and complete copies of the
REA has heretofore been furnished to Purchaser, together with each written
modification thereof and supplement thereto (including, without limitation, side
letters). The REA constitutes the entire agreement between Seller and each REA
Party thereto, and Seller has not made any oral promises or agreements amending,
modifying or supplementing the same.
(i) The REA is in full force and effect, and no payments or
deposits are held by Seller or Seller's agent, except as shown on Schedule
7.1(h) and the payments prepaid for the current month. As of the Closing
Date, Seller shall not have assigned any payments due Seller under, or any
other interest in, the REA to any party other than Purchaser, or otherwise
pledged or encumbered in any way except for a collateral assignment to
Existing Lender securing the Existing Financing.
(ii) Except as set forth on Schedule 7.1(h), none of the REA
Parties has made any written claim (A) that Seller has defaulted in
performing any of its
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obligations under any of the REAs which has not heretofore been cured, (B)
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 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) Seller has no actual knowledge that any REA Party is in
default under the REA.
(iv) There are no abatements or other concessions or
inducements, including, without limitation, assumptions or buy-outs,
applicable to the REA or any rights to extend, renew or terminate the REA
and none of the REA Parties has any rights, options or rights of first
refusal of any kind which are currently in effect, to purchase or to
otherwise acquire the Property or any part thereof or interest therein,
except as set forth in Schedule 7.1(h). All of the improvements to be
constructed by the developer or owner under the REA, or as required under
any collateral agreement, plans or specifications related to the REA, have
been fully completed and paid for.
(i) Schedule 7.1(i) contains a true and complete list of all
Contracts, including all modifications, amendments and supplements thereto
(including, without limitation, side letters). To Seller's actual knowledge, no
Party to a Contract is in default under such Contract. Seller has not received
written notification of any breach or default from any Party to a Contract.
There has been no material default (without giving effect to any notice and cure
rights) by Seller under any Contract or any claim received by Seller of any such
default by any party thereto, which has not heretofore been cured except as set
forth on Schedule 7.1(i). A true and complete copy of each Contract, together
with any amendments or supplements thereto, has been delivered or made available
to Purchaser. Such documents constitute the entire agreement between Seller and
each Party to the Contracts and Seller has not entered into any oral promises or
agreements amending or modifying the same.
(j) Schedule 7.1(j) contains a list of all permits and licenses
currently maintained by Seller with respect to the Property and within Seller's
possession or control. Seller has not received any written notice of violation
from any federal, state or municipal entity that has not been cured or otherwise
resolved to the satisfaction of such governmental entity. To Seller's actual
knowledge, the permits and licenses listed on Schedule 7.1(j) are all of the
material licenses and permits which are required for the present use of the
Property.
(k) Neither Seller nor, to Seller's actual knowledge, any other
Person has caused or permitted any Hazardous Material to be maintained, disposed
of, stored, released or generated on, under or at the Property or any part
thereof or any real property adjacent thereto except for the storage and use of
substances commonly present at or used in the operation and maintenance of
shopping centers in quantities commonly present at shopping centers and in
compliance with applicable laws, including, without limitation, Environmental
Laws. To Seller's actual knowledge, Seller is in compliance with, and has
heretofore complied with, all Environmental Laws with respect to the Property.
Seller has not received any written notice
-26-
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 actual 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 7.1(k), Seller has not
installed any underground or above ground storage tanks on, under or about the
Property and, to Seller's actual knowledge, no such tanks are located on, under
or about the Property. To Seller's actual knowledge, there is no facility
located on or at the Property that is subject to the reporting requirements of
Section 312 of the Federal Emergency Planning and Community Right to Know Act of
1986 and the federal regulations promulgated thereunder (42 U.S.C. (S)11022).
(l) Except as set forth in the Leases and the REA and on Schedule
7.1(l), Seller is not under any obligation to make contributions or otherwise
provide assistance to any promotional association or promotional fund or has
customarily in the past made or provided any such contributions or assistance.
The promotional association established with respect to the Property (the
"Promotional Association") is an independent association established by and on
behalf of the Tenants, Seller having no ownership, management, fiduciary or
monetary interest of any kind therein. Seller has remitted to the Promotional
Association any amounts received by it from Tenants and other Parties that
constitute contributions to the Promotional Association.
(m) Except as provided in the Title Commitment and on Schedule
7.1(m), 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 actual
knowledge, threatened against Seller relating to the Property or the
Transactions, there are no unsatisfied arbitration awards or judicial orders
against Seller and, to Seller's actual knowledge, there is no basis for any such
arbitration, investigation or other proceeding. Copies of all pleadings and
other documents furnished or made available by Seller to Purchaser with respect
to the litigation described on Schedule 7.1(m) are true, accurate and complete
in all respects.
(n) Seller has received no written notice that any 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 actual
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 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.
(o) Copies of current real estate tax bills with respect to the
Property in Seller's possession and control, 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 Purchaser. No portion of the Property
comprises part of a tax parcel which includes property other than property
comprising all or a portion of the Property. No application or proceeding is
pending with respect to a reduction or an increase of such taxes for the
Property. There are no tax refund proceedings relating to the Property which are
currently pending. Seller has no actual knowledge of any special tax or
assessment to be levied against the Property or any change in the
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tax assessment of the Property other than as may be reflected in the Title
Commitment or Lien Searches.
(p) Seller has not received written notice that there is, and to
Seller's actual 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 Property or any
portion thereof.
(q) Seller has not received (i) any written notice from any
governmental authority having jurisdiction over the Property or from any other
Person of, and to Seller's knowledge there does not exist, (A) any violation of
any law, ordinance, order or regulation (including the Americans with
Disabilities Act) affecting the Property, or any portion thereof, which has not
heretofore been complied with or (B) any other obligation to any such
governmental authority for the performance of any capital improvements or other
work to be performed by Seller in or about the Property or donations of monies
or land (other than general real property taxes) which has not been completely
performed and paid for; 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.
(r) Except for the Ground Lessor Consent, no approval, consent,
waiver, filing, registration or qualification with any third party, including,
but not limited to, any governmental bodies, agencies or instrumentalities is
required to be made, obtained or given for the execution, delivery and
performance by Seller of this Agreement or any of the Seller Closing Documents.
(s) Schedule 7.1(s) contains a true and accurate list of all Seller's
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 been paid in full. Seller has received no written notice that
Seller has not 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 Seller has not received any written notice or request
from any insurance company or Board of Fire Underwriters (or organization
exercising functions similar thereto) canceling or threatening to cancel any of
said policies or denying or disputing coverage thereunder.
(t) Except as set forth in Schedule 7.1(t), to Seller's actual
knowledge, none of the Tenants now occupying any of the Property or having a
current Lease affecting the Property and no Party to the REA is the subject of
any bankruptcy, reorganization, insolvency or similar proceedings or has ceased
or reduced or intends to cease or reduce operations at the Property (other than
temporarily due to casualty, remodeling, renovation or similar cause).
(u) The Ground Lease is in full force and effect, and no rent or
other payments or deposits are held by Ground Lessor, except the rent prepaid
for the current payment period. Ground Lessor has not made any written claim (i)
that Seller has defaulted in performing any of its obligations under the Ground
Lease which has not heretofore been cured, (ii) that any condition exists which
with the passage of time or giving of notice, or both, would constitute any
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such default, or (iii) that Ground Lessor is entitled to cancel the Ground
Lease. Seller has no actual knowledge that any material default exists under the
Ground Lease on the part of the Ground Lessor. Seller is not in default under
the Ground Lease. A true, correct and complete copy of the Ground Lease has been
delivered to Purchaser.
(v) Seller has no employees at the Property. There are no collective
bargaining or union agreements with respect to the employees at Property. Seller
does not maintain or sponsor any employee benefit plan, including, without
limitation, any plans subject to the Employer Retirement Income Security Act of
1974, as amended. There are no pending claims or, to Seller's actual knowledge,
any threatened claim against Seller by any employee or former employee whose
employment related to the Property.
(w) 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 any action or inaction by or on behalf of Seller.
(x) Since June 30, 2000, Seller has conducted its business in the
ordinary course consistent with its past practice.
(y) There are no lease brokerage agreements, leasing commission
agreements or other agreements binding upon Seller or the Property or that would
be binding upon Purchaser after the Closing Date, in each case of which Seller
has actual knowledge, providing for payments by Seller of any amounts for
leasing activities or procuring tenants with respect to the Property.
(z) The Xxxxx Sublease is in full force and effect, and no rent or
other payments or deposits are held by either Seller, JCP or TMall except the
rent prepaid for the current payment period. None of Xxxxx, JCP nor TMall have
made any written claim (i) that either Xxxxx or Seller has defaulted in
performing any of its obligations under the Xxxxx Sublease which has not
heretofore been cured, (ii) that any condition exists which with the passage of
time or giving of notice, or both, would constitute any such default, or (iii)
that either Xxxxx, JCP or TMall is entitled to cancel the Xxxxx Sublease. None
of Xxxxx, JCP, TMall nor Seller are in default under the Xxxxx Sublease. A true,
correct and complete copy of the Xxxxx Sublease has been delivered to Purchaser.
(aa) The TIC Agreement is in full force and effect, and no rent or
other payments or deposits are held by Seller except the rent prepaid for the
current payment period. Neither JCP nor TMall have made any written claim (i)
that Seller has defaulted in performing any of its obligations under the TIC
Agreement which has not heretofore been cured, (ii) that any condition exists
which with the passage of time or giving of notice, or both, would constitute
any such default, or (iii) that either JCP or TMall is entitled to cancel the
TIC Agreement. Seller is not in default under the TIC Agreement. A true, correct
and complete copy of the TIC Agreement has been delivered to Purchaser.
(bb) Schedule 1.1-2 contains a complete and correct list of all
existing Anchor Subleases and modifications thereof and supplements thereto
(including, without limitation, side letters) regardless of whether the terms
thereof have commenced, setting forth with respect to
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each the date thereof and of each modification thereof and supplement thereto
and 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 knowledge of
any such assignment). A true and complete copy of each Anchor Sublease, together
with each written modification thereof and supplement thereto, has heretofore
been furnished to Purchaser for inspection. Each such Anchor Sublease
constitutes the entire agreement with each Party thereto, and there are no oral
promises or agreements amending, modifying or supplementing the same.
(i) Each of the Anchor Subleases is in full force and effect,
and no monies or deposits from any Party thereto are held by Seller or
Seller's agent, except the deposits described on the Rent Roll and Rents
prepaid for the current month. As of the Closing Date, Seller shall not
have assigned any Rents due under, or any other interest in, any of the
Anchor Subleases to any party other than Purchaser, or otherwise pledged or
encumbered in any way except for a collateral assignment to Existing Lender
securing the Existing Financing.
(ii) Except as set forth on Schedule 7.1(bb), no Party to an
Anchor Sublease has made any written claim (A) that Seller has defaulted in
performing any of its obligations under any of the Anchor Subleases which
has not heretofore been cured, (B) that any condition exists which with the
passage of time or giving of notice, or both, would constitute any such
default, (C) that such 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 Party, or (D) that
such Party is entitled to cancel its Anchor Sublease.
(iii) Except as set forth on Schedule 7.1(bb), Seller has no
actual knowledge that any Party is in default under its Anchor Sublease.
(iv) There are no rent abatements or other concessions or
inducements, including, without limitation, lease assumptions or buy-outs,
applicable to any of the Anchor Subleases or any options or rights to
extend, renew or terminate any of such Anchor Subleases, and no Tenant has
any rights, options or rights of first refusal of any kind which are
currently in effect, to purchase or to otherwise acquire the Property or
any part thereof or interest therein, except as set forth in the Anchor
Subleases, the Rent Roll or on Schedule 7.1(bb). All of the improvements to
be constructed by the sublessor under each of the Anchor Subleases, or as
required under any collateral agreement, plans or specifications related to
the Anchor Subleases, have been fully completed and paid for.
7.2 Purchaser Representations and Warranties. Purchaser represents and
----------------------------------------
warrants to Seller as follows:
(a) Purchaser is a limited liability company duly organized, 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 Purchaser of this
Agreement have been duly and validly authorized by all requisite action on the
part of Purchaser. This
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Agreement has been, and the Purchaser Closing Documents will be, duly executed
and delivered by Purchaser. This Agreement constitutes, and when so executed and
delivered the Purchaser Closing Documents will constitute, the legal, valid and
binding obligations of Purchaser, enforceable against it in accordance with
their terms.
(c) None of the execution, delivery or performance of this Agreement
or the Purchaser Closing Documents by Purchaser 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 without limitation any governmental
body, agency or instrumentality) under (i) the organizational documents of
Purchaser or any material agreement, instrument or other document to which
Purchaser is a party or by which Purchaser is bound or (ii) any judgment,
decree, order, statute, injunction, rule, regulation or the like of a
governmental unit applicable to Purchaser.
(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 any action or inaction by or on behalf of Purchaser.
(e) Purchaser has not commenced any proceedings under any state or
federal bankruptcy laws, and no such proceedings have been involuntarily
commenced against Purchaser.
ARTICLE VIII
Conditions to Closing
---------------------
8.1 Conditions to Seller's Obligations. Seller's obligation to close is
----------------------------------
subject to satisfaction of each of the following conditions (any of which may be
waived by Seller in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
-------------------------
covenants and agreements to be complied with or performed by Purchaser under
this Agreement on or before the Closing shall have been complied with or
performed in all material respects.
(b) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties made by Purchaser in this Agreement shall be true and complete in
all material respects on and as of the Closing Date.
(c) No Other Termination. No termination of this Agreement by
--------------------
Purchaser or Seller shall have occurred pursuant to any other provision hereof.
(d) No Litigation. At Closing, there is no litigation, including any
-------------
arbitration, investigation or other proceeding, pending before any court,
arbitrator or governmental or regulatory official, body or authority nor any
decree, order or injunction issued by any such court, arbitrator or governmental
or regulatory official body or authority and remaining in effect which does or
is likely to prevent or hinder the timely consummation of the Closing or
materially and adversely affect the business of Purchaser.
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8.2 Conditions to Purchaser's Obligations. Purchaser's obligation to close
-------------------------------------
is subject to satisfaction of each of the following conditions (any of which may
be waived by Purchaser in its sole discretion):
(a) Compliance with Agreement. On the Closing Date, all of the
-------------------------
covenants and agreements to be complied with or performed by Seller under this
Agreement on or before the Closing shall have been complied with or performed in
all material respects.
(b) Accuracy of Representation and Warranties. The representations
-----------------------------------------
and warranties made by Seller in this Agreement shall be true and complete in
all material respects on and as of the Closing Date.
(c) Estoppels Obtained. The Estoppels shall have been obtained in
------------------
accordance with Section 9.3.
(d) Consents Obtained. The Ground Lessor Consent, the TIC Parties
-----------------
Consent and the Contract Party Consents shall have been obtained.
(e) Issuance of Title Policy. The Title Company shall have issued, or
------------------------
be irrevocably committed to issue, the Title Policy.
(f) No Other Termination. No termination of this Agreement by
--------------------
Purchaser or Seller shall have occurred pursuant to any other provision hereof.
(g) No Litigation. At Closing, there is no litigation, including any
-------------
arbitration, investigation or other proceeding, pending by or before any court,
arbitrator or governmental or regulatory official, body or authority nor any
decree, order or injunction issued by any such court, arbitrator or governmental
or regulatory official, body or authority and remaining in effect which does or
is likely to prevent or hinder the timely consummation of the Closing or
materially adversely affect the Property or the business of Seller.
(h) Closing Under Contract with JCP and TMall. Purchaser shall have
-----------------------------------------
entered into an agreement or agreements with each of JCP and TMall for the
acquisition of their respective interests as tenants-in-common in Tucson Mall
and the transactions contemplated under the terms of that agreement or
agreements shall have closed or be closing simultaneously with the Transactions.
ARTICLE IX
Additional Covenants
--------------------
9.1 Conduct of Business Pending Closing. From the date hereof until the
-----------------------------------
Closing, Seller shall (a) use commercially reasonable efforts to maintain, for
the benefit of Purchaser following the Closing, the goodwill of Tenants,
prospective tenants, vendors and other parties having business relations with
Seller; (b) pay its debts (or in good faith contest the same) and perform its
obligations as they become due; (c) maintain the Property in the same manner and
condition that exists on the date hereof, as such condition shall be altered by
reason of Casualty, Taking and/or normal wear and tear; (d) without the express
written consent of Purchaser and except for licenses or leases which grant to
the landlord or licensor a right of termination upon
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thirty (30) days notice or less, not (i) enter into any new or additional Lease,
or extend, renew or modify, consent to any assignment of or sublease in respect
of, or waive any material right under any Lease, other than renewals or
extensions resulting from the exercise by a Tenant of a currently existing
renewal or extension option, (ii) cancel or terminate any Lease or take any
action to enforce any Lease which would have the effect of canceling or
terminating the same, (iii) enter into a new reciprocal easement or similar
agreement or amend or modify, consent to the assignment of or waive any material
right under the REA, (iv) extend, renew, amend, modify or terminate (or permit
the extension, renewal, amendment, modification or termination of) the Ground
Lease, the Xxxxx Sublease, the TIC Agreement or the Anchor Subleases or assign,
sell, transfer or sublease (or permit the assignment, sale, transfer or sublease
of) Seller's interest under the Ground Lease, the Xxxxx Sublease, the TIC
Agreement, the Anchor Subleases or in or to the Land, (v) make any alterations
to the Property or enter into any new contracts or extend or renew or cancel any
Contract relating to capital expenditures, (vi) enter into any other new
contracts or extend, renew or cancel, consent to the assignment of or waive any
material right under any other Contract, except in the ordinary and usual course
and business and in accordance with Seller's past practices and policies
(provided that any such new, extended or renewed contracts must be terminable
without penalty or payment upon not more than thirty (30) days prior notice),
(vii) except as permitted under (i) above, sell, transfer, exchange, further
encumber or grant interests (including easements) in the Property or any part
thereof or engage in negotiations or discussions with, or otherwise solicit or
assist, any third party relating to the acquisition by such third party of the
Property or the equity interests in Seller, (viii) permit the assignment, sale,
transfer or sublease of Tusar's interest in or to the Xxxxx Sublease, and (ix)
otherwise take any action which could or would render inaccurate any of the
representations or warranties made by Seller in this Agreement; and (e)
otherwise operate the Property in the ordinary course consistent with current
practice. Any request by Seller for Purchaser's consent under the terms of
Section 9.1(d), shall be in writing and shall include a written proposal
containing the business terms of the transaction, the names of the parties
thereto and such other information as is reasonably requested by Purchaser.
Purchaser shall respond to such request within five (5) business days after
receipt thereof and in the event that Purchaser fails to respond within such
five (5) business day period, Purchaser shall be deemed to have approved the
request for consent. Any approval by Purchaser shall constitute Purchaser's
agreement to be bound as the landlord under the terms of such lease or leases
from and after the Closing Date.
9.2 Supplemental Disclosure. From the date hereof through Closing, each of
-----------------------
Seller and Purchaser shall have the continuing obligation to promptly supplement
or amend the Schedules with respect to the representations and warranties made
by it to reflect any material matter hereafter arising or discovered which, if
existing or known at the date hereof, would have been required to be set forth
herein or described thereon. Without limiting the foregoing, if any Leases or
Contracts, or amendments thereto, are hereafter entered into in accordance with
the terms of this Agreement, Seller shall give Purchaser prompt written notice
thereof and the appropriate exhibits or schedules hereto shall be updated and
amended accordingly.
9.3 Estoppel Certificates. On or before the date that is ten (10) days
---------------------
prior to the Closing Date, Seller shall furnish to Purchaser, an estoppel
certificate completed (a) by each Anchor and each Party to the REA and the
Anchor Subleases, (b) by each Party to an Outparcel Sublease, and (c) by not
less than eighty percent (80%) of the Tenants other than the Anchors, the
Parties to the Anchor Subleases and the Parties to the Outparcel Subleases, on
the form
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attached hereto and incorporated herein as Exhibit E-1 for Tenants and for
-----------
Parties to the Outparcel Subleases (a "Tenant Estoppel") and on the form
attached hereto and incorporated herein as Exhibit E-2 for each Party to the REA
-----------
(an "REA Estoppel") and on the form attached hereto and incorporated herein as
Exhibit E-3 for each Party to the Anchor Subleases (an "Anchor Sublease
-----------
Estoppel") (the Tenant Estoppels, the REA Estoppels and the Anchor Sublease
Estoppels are hereinafter collectively referred to as the "Estoppels"), or in
the form as provided in such Tenant's Lease. Seller shall use its commercially
reasonable efforts to obtain and deliver the Estoppels. Estoppels shall only be
acceptable and delivered in satisfaction of this Section 9.3 if there has been
no material deviation, in Purchaser's sole judgment, from the applicable form
required hereunder and the information set forth in each such Estoppel is
consistent with the information provided to Purchaser in connection with
Purchaser's inspection of the Property. If Seller has not obtained a Tenant
Estoppel from all Tenants but has obtained an Estoppel from all Anchors, from
all Parties to the REA and from all Parties to the Anchor Subleases and a Tenant
Estoppel from 80% of all other Tenants (the Tenants from whom Tenant Estoppels
have not been obtained being herein called the "Missing Tenants"), Seller in its
own capacity shall have the right, at Seller's sole option, to satisfy the
condition of this Section 9.3 with respect to the Tenant Estoppel from each
Missing Tenant by executing and delivering to Purchaser at Closing a Tenant
Estoppel for such Missing Tenant in the form prescribed in this Section (with
appropriate changes to such form to reflect that Seller and not such Missing
Tenant is signing such Tenant Estoppel), which Tenant Estoppel will be released
upon delivery of a Tenant Estoppel from such Missing Tenant.
9.4 Ground Lessor and Contract Party Consents. Seller shall obtain from
-----------------------------------------
the Ground Lessor, at Seller's sole cost and expense, a consent to the
assignment of the Ground Lease to Purchaser together with a waiver of Ground
Lessor's right of first refusal as described in Section 29.2 of the Ground Lease
and an estoppel certificate from the Ground Lessor in the form attached hereto
and incorporated herein as Exhibit F (collectively the "Ground Lessor Consent").
---------
Seller shall use commercially reasonable efforts to obtain from each of the
Parties to the Assumed Contracts, if necessary pursuant to such Assumed
Contract, at Seller's sole cost and expense, a consent to the transfer or
assignment of such Contract from Seller to Purchaser (the "Contract Party
Consents").
9.5 Rental Taxes. Seller shall be responsible for payment of all rental,
------------
transaction privilege, business privilege, and similar taxes, imposed by any
state or local taxing authority ("Rental Taxes") upon Seller's receipt of Rents
prior to Closing. Purchaser shall be responsible for payment of all Rental Taxes
based on Rents which it receives after Closing. The amount of Rental Taxes paid
by the party receiving the Rents shall be deducted therefrom in determining
amounts to be prorated or adjusted under Article VI hereof.
9.6 Record Retention. After the Closing, Purchaser shall provide Seller
----------------
with reasonable access to the Books and Records and, at Seller's cost, copies of
all or any portion thereof. Purchaser either shall retain the Books and Records
until the third anniversary of the date hereof or notify Seller of its desire to
dispose of the Books and Records and turn them over to Seller if Seller so
requests.
9.7 Publicity. In no event shall either Seller or Purchaser at any time
---------
prior to the Closing issue any press release or otherwise disclose any non-
public information regarding this
-34-
Agreement, the Financial Statements, the Leases, the Books and Records or
otherwise with respect to the Property, or the Transactions unless the other
party has consented thereto in writing (and Seller and Purchaser agree not
unreasonably to withhold or delay such consent) and to the form and substance of
any such statement or disclosure; 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 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, applicable securities or other laws or regulations or
financial reporting requirements, to obtain the Ground Lessor Consent, the
Contract Party Consents, the Estoppels or financing for the acquisition of the
Property and to assess the Property in connection with Purchaser's due diligence
examination (including without limitation contacting Tenants and other Parties
to the extent and subject to the conditions of this Agreement). Further, either
party may disclose any information regarding this Agreement or the Transactions
to its co-tenants and its direct or indirect constituent partners, members or
shareholders, as the case may be (and to counsel for such co-tenants and
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, Purchaser 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 Purchaser. In the event
that this Agreement is terminated prior to the occurrence of the Closing in
accordance with the terms of this Agreement, Purchaser shall return to Seller
all documents that were delivered by Seller to Purchaser with respect to the
Property and Purchaser shall destroy or delete any electronic or computer data
copies of information delivered by Seller with respect to the Property. The
obligations of Seller and Purchaser under this Section 9.7 shall survive the
termination hereof, however caused.
9.8 Assistance Following Closing. From and after the Closing and through a
----------------------------
period of ninety (90) days following the end of the Applicable Closing Fiscal
Period, Seller shall provide reasonable assistance to Purchaser 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,
including, without limitation, the delivery and preparation of unaudited
financial statements for the Property consisting of a cash flow statement of
actual results of operations for the quarterly periods ended March 31, June 30,
September 30, and December 31, for each of the years 1999, 2000 and 2001 through
the Closing Date and the audited financial statements for 2001. Without limiting
the foregoing, Seller shall, upon the request of Purchaser from time to time in
connection with required securities filings, provide signed representation
letters with respect to revenues and expenses of Seller if required under GAAS
to enable Purchaser's accountants to render an opinion on Purchaser's financial
statements.
9.9 Further Assurances. From and after the Closing Date through the
------------------
ninetieth (90/th/) day following the close of the Applicable Closing Fiscal
Period, each of Seller and Purchaser 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 Purchaser shall be
obligated, pursuant to this Section 9.9 to incur
-35-
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.
9.10 Tenant Inducements and Allowances. On or before the Closing Date,
---------------------------------
Seller shall pay, or shall provide a credit on the closing statement to
Purchaser equal to, the amount of any and all tenant inducements, allowances,
construction costs, rent abatements, and commissions incurred with respect to
any lease executed prior to the Closing Date unless such lease has been approved
by Purchaser in writing or by expiration of the applicable approval period under
Section 9.1 and Purchaser thereby expressly agreed to assume Seller's obligation
for any such cost or amounts.
9.11 Termination of Contracts Not Assumed. Seller, at Seller's sole cost
------------------------------------
and expense, shall terminate any Contracts that are not Assumed Contracts, and
shall pay any and all costs and expenses in connection with such Contracts. The
obligations of this Section 9.11 shall survive the Closing.
9.12 JCP and TMall Consents. Seller shall obtain (a) from Xxxxx, at
----------------------
Seller's sole cost and expense, a consent to the assignment of Seller's interest
in the Xxxxx Sublease to Purchaser and an estoppel certificate and (b) from each
of JCP and TMall, at Seller's sole cost and expense, a consent to the assignment
of Seller's interest in the Xxxxx Sublease to Purchaser, a consent to the
assignment of Tusar's interest in the Xxxxx Sublease to Purchaser, a consent to
the assignment of Seller's interest in the TIC Agreement to Purchaser and an
estoppel certificate from each of JCP and TMall, in each case in the form
attached hereto and incorporated herein as Exhibit H (collectively the "TIC
---------
Parties Consent").
ARTICLE X
Indemnification
---------------
10.1 Indemnification by Seller. From and after the Closing, Seller shall
-------------------------
indemnify, defend and hold harmless Purchaser and its shareholders, directors,
officers, members, partners, employees, representatives and agents, and their
respective successors and assigns (collectively, the "Indemnified Purchaser
Persons") from and against any Losses incurred or suffered by any Indemnified
Purchaser Person that results from, relates to or arises out of (a) the breach
of any representation or warranty made by Seller in this Agreement or the Seller
Closing Documents, (b) the breach by Seller of any of the covenants or
agreements of Seller under this Agreement or the Seller Closing Documents, (c)
claims made by any Tenant or Anchor under the Leases, any Party to the REA under
the REA, the Ground Lessor under the Ground Lease, or by any Party under the
Assumed Contracts, that relate to any actions or events first occurring, or
obligations first accruing, prior to the Closing Date, (d) any event, occurrence
or accident at any time prior to the Closing Date relating to the Property, or
(e) Seller's Liabilities.
10.2 Indemnification by Purchaser. From and after the Closing, Purchaser
----------------------------
shall indemnify, defend and hold harmless Seller and its shareholders,
directors, officers, members, partners employees and agents, and their
respective successors and assigns (collectively the "Indemnified Seller
Persons") from and against any Losses incurred or suffered by any Indemnified
Seller Person that results from, relates to or arises out of (a) the breach of
any representation or warranty made by Purchaser in this Agreement or the
Purchaser Closing
-36-
Documents, (b) the breach by Purchaser of any of the covenants or agreements of
Purchaser under this Agreement or the Purchaser Closing Documents, or (c) claims
made by any Tenant or Anchor under the Leases, any Party to the REA under the
REA, the Ground Lessor under the Ground Lease, or by any Party under the Assumed
Contracts, that relate to any actions or events first occurring, or obligations
first accruing, on or subsequent to the Closing Date, (d) any event, occurrence
or accident at any time on or subsequent to the Closing Date relating to the
Property, or (e)the Assumed Liabilities.
10.3 Indemnification Procedure.
-------------------------
(a) The indemnified party (the "Indemnified Party") shall give the
indemnifying party (the "Indemnifying Party") prompt written notice of any
Losses incurred (or likely to be incurred) by the Indemnified Party with respect
to any claim or assertion of claims by a third party ("Third Party Claim") for
which indemnification is available hereunder and the Indemnifying Party may (i)
prior to the commencement of any proceedings in connection with such Losses,
undertake the negotiation of any resolution of the dispute relating to such
Losses, including without limitation 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.
(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 10.3(e)),
but such negotiations or defense shall be controlled by counsel to the
Indemnifying Party.
(c) The Indemnifying Party shall not be liable for payments relating
to the resolution of any dispute or any settlement of any litigation or
proceeding effected by the Indemnified Party without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld. The
Indemnifying Party shall not, without the Indemnified Party's written consent,
resolve any dispute or settle or compromise any claim regarding 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 an unconditional release by the claimant or the plaintiff of the
Indemnified Party from all liability in respect of any such Losses.
(d) Each party hereto agrees to give the other party prompt notice
of any Losses (or possible Losses) asserted against it which might be Losses for
which indemnity could be sought against the other party, but the failure to give
such notice shall not release the Indemnifying Party of its obligations under
this Section 10.3, except to the extent of the actual harm suffered as a result
thereof.
(e) In the event the Indemnifying Party fails to timely undertake
negotiation of any dispute or defend, contest or otherwise protect against any
claim or suit with respect to a Third Party Claim, and to so notify the
Indemnified Party, the Indemnified Party may, but will
-37-
not be obligated to, defend, contest or otherwise protect against the same, and
make any compromise or settlement thereof and recover the entire costs thereof
from the Indemnifying Party, including reasonable attorneys' and experts' fees,
disbursements and all amounts paid as a result of such claim or suit or the
compromise or settlement thereof; provided, however, that if the Indemnifying
-------- -------
Party undertakes negotiation of any dispute and the defense of such matter in
accordance with and subject to the above terms of this Section 10.3, the
Indemnified Party shall not be entitled to recover from the Indemnifying Party
for its costs incurred thereafter in connection therewith other than the
reasonable costs of investigation undertaken by the Indemnified Party and
reasonable costs of providing assistance prior to the Indemnifying Party taking
action. 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 XI
Condemnation and Destruction
----------------------------
11.1 Casualty or Condemnation in General.
-----------------------------------
(a) If prior to the Closing Date, the Property or the Land shall be
the subject of a Taking or Casualty, Seller shall promptly inform Purchaser of
same.
(b) If prior to the Closing Date the Property or the Land shall be
the subject of a Substantial Taking or a Substantial Casualty, Purchaser may by
written notice delivered to Seller on or before the Closing Date, elect as its
sole remedy on account thereof, either (i) to terminate this Agreement, and the
rights of the parties hereto, in which event this Agreement (other than any
right or obligation that expressly survives the termination of this Agreement)
shall terminate as of the date of delivery of such notice and the Xxxxxxx Money
and all net interest accrued thereon shall be immediately delivered to
Purchaser; or (ii) to continue this Agreement in effect, in which event Seller
(A) shall transfer and assign to Purchaser, at the Closing, its full right,
title and interest in and to any insurance proceeds (and shall pay in cash to
Purchaser all deductibles owing in respect thereof) or condemnation awards with
respect thereto, and shall cooperate in all reasonable respects with Purchaser,
at Purchaser's sole cost and expense, in connection with the collection thereof,
to the extent not collected at the Closing, and (B) to the extent any insurance
proceeds or condemnation awards shall have been received by Seller prior to the
Closing, remit to Purchaser the full amount thereof so collected, less, in each
such case, (1) reasonable costs of collection thereof (other than the cost of
deductibles), and (2) amounts, if any, applied by Seller prior to Closing to the
preservation, repair or restoration of the Property.
(c) If prior to the Closing Date, the Property or the Land, or any
portion thereof, is (i) the subject of a Taking (other than a Substantial
Taking) or (ii) the subject of a Casualty (other than a Substantial Casualty),
this Agreement shall nevertheless remain in full force and effect with no
abatement of the Purchase Price to be delivered to Seller on account thereof and
Purchaser shall nevertheless acquire the Property or remaining balance thereof
pursuant to the provisions hereof. In such event, any insurance proceeds or
condemnation
-38-
awards shall be applied and paid in the same manner and subject to the same
provisions set forth above as are applicable in a case of a Substantial Casualty
or a Substantial Taking as to which Purchaser has elected nevertheless to
continue this Agreement in effect.
11.2 Adjustment of Claims and Condemnation Proceedings. If a Taking or
-------------------------------------------------
Casualty shall occur, Seller shall initiate all actions required to adjust,
compromise and collect the awards payable by the condemning authority or the
proceeds payable under the applicable policy or policies of casualty insurance.
Purchaser shall have the right (but not the obligation) to participate with
Seller in the initiation of all such actions and, in any event, Seller shall
consult with, and keep Purchaser advised of, Seller's progress in connection
therewith. Seller shall not agree to any settlement of the awards or insurance
proceeds payable in connection with any such Taking or Casualty (or enter into
any agreement in lieu of a Taking) without Purchaser's approval, which approval
shall not be unreasonably withheld or delayed.
ARTICLE XII
Default
-------
12.1 Seller's Default. If Seller shall default in the performance of any
----------------
of its obligations under the terms of this Agreement, and if such default is not
cured within fifteen (15) days after written notice to Seller specifying such
default, then Purchaser shall have the right to either: (a) terminate this
Agreement and the Xxxxxxx Money and all interest accrued thereon shall
immediately be returned to Purchaser; or (b) pursue an action for specific
performance of the terms of this Agreement, provided, however, that in the event
that any action or omission by Seller or any agent or representative of Seller
causes the remedy of specific performance to be unavailable or impractical for
any reason, then Purchaser shall have the right to exercise any other rights and
remedies that Purchaser may have at law or in equity, including, without
limitation, an action for damages.
12.2 Purchaser's Default. If Purchaser shall default in the performance
-------------------
of any of its obligations hereunder, and if such default is not cured within
fifteen (15) days after written notice to Purchaser specifying such default,
then Seller, as its sole and exclusive remedy, shall have the right to terminate
this Agreement by written notice to Purchaser and the Xxxxxxx Money shall
thereupon be paid by the Escrow Agent to Seller. Retention by Seller of the
Xxxxxxx Money is intended as full liquidated damages and not as a penalty.
Seller and Purchaser acknowledge and agree that it would be difficult to
ascertain precisely the actual damages suffered by Seller as a result of any
default by Purchaser, that such liquidated damages represent the parties best
estimate of such damages and are a reasonable estimate of such damages.
ARTICLE XIII
Miscellaneous
-------------
13.1 Survival. The covenants, indemnities and agreements of Seller and of
--------
Purchaser set forth herein and in the Closing Documents shall survive Closing
for a period of eighteen (18) months after the Closing. Notwithstanding the
foregoing, the representations and warranties contained herein or the Closing
Documents, including the indemnities to the extent that they relate thereto,
shall survive Closing for a period of eighteen (18) months after the Closing
Date
-39-
except as to Losses of which written notice has been given prior to the
expiration of such eighteen (18) month period in accordance with the provisions
of this Agreement.
13.2 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,
(c) delivered by hand with receipt acknowledged in writing or (d) facsimile, in
each case addressed as follows:
To Purchaser:
GGP-Tucson Mall L.L.C.
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Fax No.: (000)000-0000
with a copy thereof to:
Xxxx, Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx
Fax No.: (000)000-0000
To Seller:
Oracle-Xxxxxxx Co.
c/o Forest City Commercial Group
Terminal Tower
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx
Fax No.: (000)000-0000
with a copy to:
Forest City Commercial Group
Terminal Tower
00 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax No.: (000)000-0000
All notices (i) shall be deemed to be delivered and effective (A) upon personal
delivery to and receipt by the person to whom delivered (or upon refusal to
accept delivery), or (B) upon receipt or refusal to accept delivery, if
deposited in United States registered or certified mail, return receipt
requested, or (C) upon receipt (or upon refusal to accept delivery) if deposited
with an
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overnight express courier for next day delivery, or (D) the date transmitted if
sent by facsimile during business hours at the location to be received so long
as a confirmation report is received from the sending machine 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.
13.3 Counterparts. This Agreement may be executed in two or more
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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.
13.4 Amendments. Except as otherwise provided herein, this Agreement may
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not be changed, modified, supplemented or terminated, except by an instrument
executed by both Seller and Purchaser.
13.5 Waiver. Each party shall have the right exercisable in its sole and
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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.
13.6 Successors and Assigns. Subject to the provisions of Section 13.10,
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the terms, covenants, agreements, indemnities, 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.
13.7 Third Party Beneficiaries. The provisions of this Agreement are made
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for the benefit of the parties hereto (and the Indemnified Purchaser Persons and
the Indemnified Seller Persons with respect to Sections 10.1 and 10.2), and
their respective successors in interest and assigns and are not intended for,
and may not be enforced by, any other person or entity.
13.8 Partial Invalidity. If any term or provision of this Agreement or
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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.
13.9 Governing Law. This Agreement has been made pursuant to and shall be
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governed by the laws of the State of Arizona (without regard to conflicts of law
rules).
13.10 Assignment. This Agreement may not be assigned or delegated by any
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party without the written consent of the other except as provided in Section
13.16 and that Purchaser may assign this Agreement to an Affiliate of Purchaser,
it being acknowledged and agreed by Purchaser that no such assignment shall
relieve Purchaser of its obligations under this Agreement.
13.11 Headings; Exhibits. The headings or captions of the various Articles
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and Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this
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Agreement and shall not be deemed in any manner to modify, explain, expand or
restrict any of the provisions of this Agreement.
13.12 Gender and Number. Words of any gender shall include the other
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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.
13.13 Entire Agreement. This Agreement constitutes the entire agreement
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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.
13.14 Costs of Enforcement. In the event that any action is brought by
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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
(or any successor), as the same may change from time to time, plus four percent.
13.15 Time of the Essence. Time is of the essence with regard to each
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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 Standard Time.
13.16 Seller's 1031 Exchange. Purchaser acknowledges that Seller intends
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to effect the sale of its undivided tenant in common interest in Tucson Mall as
the disposition of "relinquished property" in connection with a multiple party
deferred exchange transaction for other "replacement property" of like-kind and
qualifying use pursuant to Section 1031 of the Code and the Treasury Regulations
thereunder, provided that Seller utilizes the services of a "qualified
intermediary" as defined in Treasury Regulation (S)1.1031(k)-1(g)(4)(iii)
("Intermediary") to effectuate such Section 1031 exchange. Purchaser agrees to
reasonably cooperate in the accomplishment of that purpose, including executing
any and all documents reasonably requested by Seller, provided only that (a)
Purchaser shall not be required to be vested in title to any property other than
the Property, (b) Purchaser shall incur no liability or expense arising out of
or related to the Section 1031 exchange (and shall only incur such liability or
expense expressly contemplated in this Agreement), (c) no such document shall
adversely affect Purchaser in any respect or change any economic terms and
conditions of the transaction with respect to Purchaser and (d) Purchaser shall
not be delayed in the Closing. Seller may assign its rights, but not its
obligations, in this Agreement to an Intermediary on or before the Closing Date
without Purchaser's consent for purposes of effectuating a Section 1031
exchange. To exercise its rights under this Section 13.16 to exchange, rather
than sell, the Property, Seller shall provide Purchaser with a written statement
stating its intent to enter into an exchange at least three (3) business days
prior to the Closing Date. Notwithstanding an assignment to the Intermediary,
Seller agrees to unconditionally perform its representations, warranties,
obligations and undertakings under this Agreement, and in the event of a breach,
Purchaser may proceed directly against Seller without the need to join the
Intermediary. Seller shall indemnify, defend
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and hold Purchaser harmless from and against any and all liabilities,
obligations, causes of action, suits, claims, costs and expenses, including,
without limitation, reasonable attorneys fees and costs, arising from or related
to any such Section 1031 exchange with respect to the Property or any portion
thereof. Furthermore, Seller shall reimburse Purchaser at Closing for all
out-of-pocket expenses incurred by Purchaser in excess of those that would have
been incurred if Seller has not elected to effect a Section 1031 exchange.
Seller acknowledges that Seller is not relying on any representations of
Purchaser or Purchaser's counsel with respect to the federal, state or local
income tax treatment of Seller in connection with a Section 1031 transaction
involving the Property.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
PURCHASER: SELLER:
GGP-TUCSON MALL L.L.C., ORACLE-XXXXXXX CO.,
a Delaware limited liability company an Arizona limited partnership
By: GGP LIMITED PARTNERSHIP, By: XXXXX, INC.,
a Delaware limited partnership, an Ohio corporation,
its sole member its sole general partner
By: GENERAL GROWTH PROPERTIES, INC., By: /s/ Xxxxx XxXxx
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a Delaware corporation, Name: Xxxxx XxXxx
its general partner Title: Vice President
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx
Senior Vice President
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LIST OF EXHIBITS AND SCHEDULES
Exhibits/Schedule Description
Exhibit A Legal Description of the Land
Exhibit B Form of Xxxxxxx Money Escrow Agreement
Exhibit C Form of Closing Escrow Agreement
Exhibit D Permitted Exceptions
Exhibit E-1 Form of Estoppel Letter for Tenants
Exhibit E-2 Form of Estoppel Letter for Parties to the REA
Exhibit E-3 Form of Anchor Sublease Estoppel
Exhibit F Form of Estoppel Certificate for the Ground Lessor
Exhibit G Existing Loan Documents
Exhibit H Form of TIC Parties Consent
Exhibit H-1 Form of Xxxxx Consent and Estoppel Certificate
Schedule 1.1-1 Anchors
Schedule 1.1-2 Anchor Subleases
Schedule 1.1-3 Outparcel Subleases
Schedule 1.1-4 Personalty
Schedule 7.1(e) Rent Roll
Schedule 7.1(f) Schedule of Arrearages
Schedule 7.1(g) Leases and Claims under Leases
Schedule 7.1(h) Claims under REA
Schedule 7.1(i) Contracts
Schedule 7.1(j) Permits and Licenses
Schedule 7.1(k) Location of Underground Storage Tanks
Schedule 7.1(l) Promotional Association Matters
Schedule 7.1(m) Pending or Threatened litigation
Schedule 7.1(s) Insurance Policies
Schedule 7.1(t) Bankruptcy Proceedings and Other Matters Affecting Parties
Schedule 7.1(bb) Claims under Anchor Subleases
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