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EXHIBIT 2.7
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is dated as of November 10, 1999, by and
between GGP LIMITED PARTNERSHIP, a Delaware limited partnership ("SELLER"), and
GGP/HOMART II L.L.C., a Delaware limited liability company (the "COMPANY").
R E C I T A L S
WHEREAS, Seller owns 100% of the common shares of GGP-Natick Trust, a
Massachusetts business trust ("NATICK Trust"), the owner of a 99.999% interests
as a limited partner in General Growth Properties-Natick Limited Partnership, a
Delaware limited partnership (the "EXISTING VENTURE");
WHEREAS, Natick Trust owns 100% of the stock of General Growth
Properties-Natick II, Inc., a Delaware corporation ("NATICK II"), the owner of
the remaining .001% interest as a general partner the Existing Venture;
WHEREAS, the Existing Venture is the owner of the real property
commonly known as Natick Mall, Natick, Massachusetts which is more particularly
described on EXHIBIT A attached hereto, other than the property owned by the
Anchors (as hereinafter defined) at such mall; and
WHEREAS, Seller desires to contribute to the capital of the Company all
of the common shares of Natick Trust, and the Company desires to acquire such
common shares.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
Definitions
1.1 Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
"ADA" shall mean the Americans With Disabilities Act, as amended.
"AFFILIATE" shall mean a Person that directly or indirectly through one
or more intermediaries controls, is controlled by, or is under common control
with the Person specified. The term "control" as used in the immediately
preceding sentence, means (a) the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
controlled entity or (b) the ownership (directly or indirectly) of not less than
50% of the voting stock of a corporation or not less than 50% of the aggregate
legal and equitable interest in a limited liability company, a partnership or
other business entity.
"AGREEMENT" shall mean this Contribution Agreement, as amended or
modified from time to time hereafter in accordance with the terms hereof.
"ANCHOR" shall mean each Person identified in SCHEDULE 1.1-1.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section
2.3(a).
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"AUDITOR" shall have the meaning set forth in Section 5.2(b).
"BALANCE SHEET SETTLEMENT DATE" shall have the meaning set forth in
Section 5.1(c.
"BOOKS AND RECORDS" shall mean all records, books of account and papers
of the Existing Venture relating to the construction, ownership and operations
of the Property, including architect's drawings, blue prints and as-built plans,
maintenance logs, copies of warranties and guaranties, licenses and permits,
instruction books, employee manuals, records and correspondence relating to
insurance claims, financial statements, operating budgets, paper and electronic
media copies of data and other information relating to the Property available
from personal computers, structural, mechanical, geotechnical or other
engineering studies, soil test reports, environmental reports, underground
storage tank reports, feasibility studies, appraisals, ADA surveys or reports,
OSHA asbestos surveys, marketing studies, mall documents and compilations, lease
summaries and originals and/or copies of Leases, the REA and the Contracts and
correspondence related thereto.
"CLOSING" shall have the meaning set forth in Section 4.1.
"CLOSING BALANCE SHEETS" shall have the meaning set forth in Section
5.1(a).
"CLOSING DATE" shall have the meaning set forth in Section 4.1.
"CLOSING DOCUMENTS" shall mean the Seller Closing Documents and the
Company Closing Documents, collectively.
"CLOSING NET EQUITY" shall mean, in the case of the Preliminary
Proration Date Balance Sheet or Proration Date Balance Sheet, the excess of the
book value of the assets reflected on such balance sheet over the liabilities
reflected thereon.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY CLOSING DOCUMENTS" shall have the meaning set forth in Section
4.3.
"CONTRACTS" shall mean all equipment leases and all service,
maintenance and other contracts and concessions that are currently in effect and
to which the Existing Venture is a party respecting the use, maintenance,
development, sale or operation of the Property or any portion thereof (but
excluding this Agreement, the Leases, the Permitted Exceptions and the REA)
including those which are listed on SCHEDULE 6.1(I), together with any additions
thereto, modifications thereof or substitutions therefor hereafter entered into
in accordance with the provisions of this Agreement.
"CONTRIBUTION AMOUNT" shall have the meaning set forth in Section 2.2.
"DEFECT" shall mean any Lien, encumbrance, easement, agreement,
restriction, proceeding, lis pendens, notice, encroachment or exception to title
other than a Permitted Exception that materially and adversely affects the title
to or use of the Property.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local statutes,
ordinances, codes, rules, regulations, orders and decrees regulating, relating
to or imposing liability or standards concerning or in connection with Hazardous
Materials, underground storage tanks or the protection of human health, natural
resources or the environment, as any of the same may
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be amended from time to time, including the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. ss.9601 et. seq.,
as amended by the Superfund Amendments and Reauthorization Act or any equivalent
state or local laws or ordinances; the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. ss. 6901 et seq., as amended by the Hazardous and Solid
Waste Amendments of 1984, or any equivalent state or local laws or ordinances;
the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C.
ss.136 et. seq. or any equivalent state or local laws or ordinances; the
Hazardous Materials Transportation Act (49 U.S.C. ss. 1801 et seq.); the
Emergency Planning and Community Right-to-Know Act ("EPCRA"), 42 U.S.C. ss.11001
et. seq. or any equivalent state or local laws or ordinances; the Toxic
Substance Control Act ("TSCA"), 15 U.S.C. ss.2601 et. seq. or any equivalent
state or local laws or ordinances; the Atomic Energy Act, 42 U.S.C. ss.2011 et.
seq., or any equivalent state or local laws or ordinances; the Clean Water Act
(the "Clean Water Act"), 33 U.S.C. ss.1251 et. seq. or any equivalent state or
local laws or ordinances; the Clean Air Act (the "Clean Air Act"), 42 U.S.C.
ss.7401 et seq. or any equivalent state or local laws or ordinances; the
Occupational Safety and Health Act, 29 U.S.C. ss.651 et seq. or any equivalent
state or local laws or ordinances.
"EXISTING INDEBTEDNESS" shall mean the loans listed on Schedule 6.1(x).
"EXISTING INDEBTEDNESS DOCUMENTS" shall have the meaning set forth in
Section 6.1(x).
"EXISTING LENDER" shall mean the holder or holders of the Existing
Indebtedness as specified on Schedule 6.1(x).
"EXISTING MANAGER" shall mean General Growth Management, Inc.
"EXISTING VENTURE" shall mean General Growth Properties-Natick Limited
Partnership, a Delaware limited partnership.
"EXECUTION DATE" shall mean the date of this Agreement.
"FINANCIAL STATEMENTS" shall have the meaning set forth in Section
6.1(v).
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated
by the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state or local
government, court, department, commission, board and office having jurisdiction
over the Property, Seller, Existing Venture or the Company, or any other body
exercising functions similar to those of any of the foregoing.
"HAZARDOUS MATERIALS" shall mean any substance, material, waste, gas or
particulate matter which (i) is now, or at any future time may be, regulated by
the United States Government, the state in which the Real Property is located,
any other state with jurisdiction, or any local governmental authority, or (ii)
the exposure to, or manufacture, possession, presence, use generation, storage,
transportation, treatment, release, disposal, abatement, cleanup, removal,
remediation or handling of is prohibited, controlled or regulated by any
Environmental
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Law, or (iii) requires investigation or remediation under any Environmental Law
or common law, or (iv) is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous. Such term includes
any material or substance which is (1) defined as a "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste,"
"restricted hazardous waste" or any like or similar term under any applicable
Environmental Law; (2) oil and petroleum products; (3) asbestos or
asbestos-containing material as defined in the regulations of the Occupational
Safety and Health Administration at 29 C.F.R. ss.1910.1001; (4) polychlorinated
biphenyls; (5) radioactive material; (6) designated as a "toxic pollutant" or a
"hazardous substance" pursuant to Sections 307 or 311 of the Clean Water Act;
(7) defined as a "hazardous waste" pursuant to Section 1004 of RCRA; (8) defined
as a "hazardous substance" pursuant to Section 101 of CERCLA; (9) designated as
a "hazardous chemical" substance or mixture pursuant to TSCA; (10) designated as
an "extremely hazardous" substance under Section 302 of EPCRA; (11) designated
as a "priority pollutant" or "hazardous air pollutant" pursuant to the Clean Air
Act; (12) designated as a hazardous chemical under the Occupational Safety and
Health Act; (13) radon gas or other radioactive source material, including
special nuclear material, and byproduct materials regulated under the Atomic
Energy Act, 42 U.S.C. ss.2011 et. seq.; (14) subject to regulation under FIFRA;
(15) natural gas, natural gas liquids, liquefied natural gas, and synthetic gas
usable for fuel; or (16) infectious wastes or materials and pathogenic bacteria
or other pathogenic microbial agents.
"IMPROVEMENTS" shall mean improvements, buildings, structures,
fixtures, facilities, installations, machinery and equipment, in, on, over or
under the Land, including the foundations and footings therefor, elevators,
plumbing, air conditioning, heating, ventilating, mechanical, electrical and
utility systems (except to the extent owned by a utility company) and any other
similar systems, signs and light fixtures (except to the extent of trade
fixtures and equipment owned by tenants under the Leases), doors, windows,
fences, parking lots, walks and walkways and each and every other type of
physical improvement to the extent owned, in whole or in part, by the Existing
Venture, located at, on or affixed to the Land, to the full extent such items
constitute or are or can or may be construed as realty under the laws of the
state in which the Real Property is located.
"INDEMNIFIED COMPANY PERSONS" shall have the meaning set forth in
Section 8.1.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 8.3.
"INDEMNIFIED SELLER PERSONS" shall have the meaning set forth in
Section 8.2.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 8.3.
"LAND" shall mean those certain parcels of real estate described on
EXHIBIT A.
"LANDLORD WORK" shall mean all work, improvements, fixtures, fittings
and equipment (other than normal repairs, maintenance or replacements) that are
required (or may in the future be required) to be furnished or provided to
Tenants or REA Parties or paid for by landlord or developer under the terms of
the Leases or the REA, as in effect on the date hereof.
"LEASES" shall mean all leases, tenancies, concessions, licenses and
occupancy agreements currently in effect and to which the Existing Venture or
any of its predecessors in title is a party affecting or relating to the
Property including those which are listed on SCHEDULE 6.1(G), together with any
additions thereto, modifications thereof or substitutions therefor hereafter
entered into in accordance with the provisions of this Agreement.
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"LEGAL REQUIREMENTS" shall mean any laws, ordinances, orders, rules,
regulations and requirements of any Governmental Authority which may be
applicable to the Property, the Existing Venture or Seller.
"LIENS" shall mean any mortgages, deeds of trust, security interests,
judgments or charges, pledges, options, rights of first offer or first refusal,
liens of any type, restrictions, claims and other encumbrances of any nature
whatsoever other than the Existing Indebtedness Documents.
"LIEN SEARCHES" shall mean a search report by an independent search
firm reasonably acceptable to the Company of the Secretary of State records,
county recorder records, local court records (federal, state, county and
municipal) and such other official public records with respect to the Property
that would disclose the presence of any Liens, bankruptcy proceedings, lis
pendens or other matters affecting the Property, the Existing Venture or Seller.
"LOSSES" shall mean any and all claims, actions, suits, proceedings,
demands, losses, damages, liabilities, obligations, judgments, settlements,
awards, penalties, costs or expenses, including reasonable attorneys', experts'
or consultants' fees and expenses.
"NATICK II" shall mean General Growth Properties-Natick II, Inc., a
Delaware corporation.
"NATICK TRUST" shall mean GGP-Natick Trust, a Massachusetts business
trust.
"OPERATING AGREEMENT" shall mean that certain Operating Agreement among
the Company, Seller and the New York State Common Retirement Fund dated as of
the date hereof.
"PARTY" shall mean a party to the REA, a Contract or Permitted
Exception Document (or the successor or assignee thereof) or a Tenant under a
Lease, in each case other than the Existing Venture or its predecessors in title
with respect to the Property.
"PERMITTED EXCEPTION DOCUMENT" shall have the meaning set forth in
Section 2.3(b).
"PERMITTED EXCEPTIONS" shall mean the exceptions to title to the
Property listed on EXHIBIT B attached hereto and made a part hereof.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity of
any type.
"PERSONALTY" shall mean all of the personal property, both tangible and
intangible, owned by the Existing Venture (and the Existing Venture's interest
in any of the following) and located in or upon or used in connection with the
operation or maintenance of the Property, including machinery; equipment;
building supplies and materials; consumables; inventories; names, logos,
trademarks, trade names and copyrights; all assignable licenses, permits,
approvals, authorizations, variances, consents and certificates of occupancy;
all assignable guarantees or warranties (including performance bonds obtained
by, or for the benefit of, the Existing Venture, pertaining to the ownership,
construction or development of the Real Property or any part thereof); the Books
and Records; computer and peripheral equipment; computer software and data
contained in hard drives and on diskette; advertising materials; and telephone
exchange numbers. Without limiting the foregoing, "Personalty" shall include the
property listed
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on SCHEDULE 1.1-2. Personalty shall not include personal items belonging to
Tenants or to employees of the Existing Venture and the rights of the Existing
Venture in and to the Leases, the REA and the Contracts.
"PRELIMINARY PRORATION DATE BALANCE SHEET" shall have the meaning set
forth in Section 5.1(a).
"PROMOTIONAL ASSOCIATION" shall have the meaning set forth in Section
6.1(l).
"PROPERTY" shall mean (a) the Real Property, (b) the Personalty, (c)
the rights and interests of the Existing Venture in, to and under all Leases,
(d) the rights and interests of the Existing Venture in, to and under the REA,
(e) the rights and interests of the Existing Venture in, to and under the
Contracts to the extent assignable, (f) the rights and interests of the Existing
Venture in, to and under the Existing Indebtedness Documents.
"PRORATION DATE" shall mean November 30, 1999.
"PRORATION DATE BALANCE SHEET" shall have the meaning set forth in
Section 5.1(a).
"REAL PROPERTY" shall mean the Land and the Improvements, together with
all of the estate, right, title and interest of the Existing Venture therein,
and in and to (a) any land lying in the beds of any streets, roads or avenues,
open or proposed, public or private, in front of or adjoining the Land to the
center lines thereof, and in and to any awards to be made in lieu thereof and in
and to any unpaid awards for damage to the foregoing by reason of the change of
grade of any such streets, roads or avenues; and (b) all easements, rights,
licenses, privileges, rights-of-way, strips and gores, hereditaments and such
other real property rights and interests appurtenant to the foregoing (including
all rights of the Existing Venture under the REA).
"REA" shall mean (i) that certain Memorandum Of Operating Agreement
dated as of May 1, 1964 by and among Federated Department Stores, Inc., and
Sears, Xxxxxxx and Co., as supplemented and/or amended by (a) that certain First
Amendment to Operating Agreement dated as of May 1, 1964 between Federated
Department Stores, Inc., and Sears, Xxxxxxx and Co., (c) that certain Second
Amendment to Operating Agreement dated as of October 5, 1964 by and among
Federated Department Stores, Inc., and Sears, Xxxxxxx and Co., (d) that certain
Third Amendment to Operating Agreement dated as of July 29, 1965 by and among
Federated Department Stores, Inc., and Sears, Xxxxxxx and Co., (e) that
Supplemental Operating Agreement dated as of August 5, 1965 by and among Sears,
Xxxxxxx and Co. and Natick Mall, Inc., (f) that Fourth Amendment to Operating
Agreement dated as of May 4, 1966 by and among Federated Department Stores,
Inc., Sears, Xxxxxxx and Co., Worchester-Natick Properties, Inc., and Xxxxxxx X.
Xxxx, (g) that Assignment and Assumption of Operating Agreement dated as of
April 30, 1988 by and among Federated Department Stores, Inc., and The May
Department Stores Company and (h) as affected by Affidavit of Termination of
Operating Agreement dated September 22, 1993 and (ii) that certain Construction,
Operation and Reciprocal Easement Agreement dated as of September 22, 1993 by
and among Homart Development Co., The May Department Stores Company (in its
capacity as lessee of the Filene's parcel) and The May Department Stores Company
(in its capacity as lessee of the Lord & Taylor's parcel) .
"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).
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"RENT ROLL" shall have the meaning set forth in Section 6.1(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 any other taxes, and other amounts payable by any
Party under the Leases and the REA.
"RETAINED DEBT" shall have the meaning set forth in the Operating
Agreement.
"SELLER CLOSING DOCUMENTS" shall have the meaning set forth in Section
4.2.
"SELLER'S INTEREST" shall mean 100% of the common shares of Natick
Trust
"SELLER'S LIABILITIES" shall have the meaning set forth in Section
2.3(b).
"SURVEY" shall mean the Urban ALTA/ACSM Land Title Survey of the
Property by Guerriere & Xxxxxx, Project #F-2307, last revised August 16, 1999.
"TENANTS" shall mean tenants, concessionaires, licensees and/or
occupants under the Leases.
"TENANT SERVICES" shall mean all services supplied by or on behalf of
the Existing Venture 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 8.3(a).
"TITLE COMMITMENT" shall mean the Commitment for Title Insurance No.
9951-25264 issued by the Title Company to the Company effective as of August 12,
1999, together with copies of all documents underlying all exceptions to title
and all encumbrances on and other matters of record affecting the Real Property.
"TITLE COMPANY" shall mean Chicago Title Insurance Company.
"TITLE POLICY" shall mean Owner's Policy of Title Insurance No.
0000-00000-00 issued by Title Company and effective as of January 22, 1996,
insuring the Existing Venture as owner of good, marketable and indefeasible fee
title to the Property, subject only to the Permitted Exceptions.
"TRANSACTIONS" shall mean the transactions contemplated by this
Agreement.
"UTILITY DEPOSITS" shall have the meaning set forth in Section 5.8.
1.2 References. All references in this Agreement to particular sections
or articles shall, unless expressly otherwise provided, or unless the context
otherwise requires, be deemed to refer to the specific sections or articles in
this Agreement, and any references to "Exhibit" shall, unless otherwise
specified, refer to one of the exhibits annexed hereto and, by such reference,
be made a part hereof. The words "herein", "hereof", "hereunder", "hereinafter",
"hereinabove" and other words of similar import refer to this Agreement as a
whole and not to
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any particular section, subsection, paragraph or article hereof. The words
"include", "includes" and "including" shall be deemed in each case to be
followed by the phrase "without limitation".
1.3 Terms Generally. Definitions in this Agreement apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.
ARTICLE II
Contribution
2.1 Contribution of Seller's Interest. Upon the terms and subject to
the conditions contained herein, at the Closing, Seller shall contribute to the
Company, and the Company shall acquire, Seller's Interest, free and clear of all
Liens. The Seller's Interest shall be deemed to have a fair market value equal
to $300,000,000.00, which represents the fair market value of the Property, plus
or minus Closing Net Equity as set forth on the Preliminary Proration Date
Balance Sheet (such amount, as the same is adjusted as hereinafter provided, the
"Contribution Amount").
2.2 Consideration. In consideration for the contribution of Seller's
Interest and certain other property being contributed to the capital of the
Company by Seller, and in addition to the assumption of liabilities and
adjustments as hereinafter provided, on the Closing Date, Seller shall receive
units of membership interest in the Company pursuant to the Operating Agreement.
2.3 Liabilities.
(a) The Existing Venture shall continue to be liable and
responsible for all liabilities and obligations of the Existing Venture other
than the Seller's Liabilities (the "Assumed Liabilities"). Without limiting the
foregoing, Assumed Liabilities shall include all liabilities and obligations
relating to the Existing Indebtedness (other than Seller's Retained Debt)
notwithstanding any joint and several or other liability of Seller under the
Existing Indebtedness. Further without limiting the foregoing, Assumed
Liabilities shall include all leasing costs, allowances, concessions, rent
abatements, build-out costs, other leasing inducements and leasing commissions
with respect to (i) all leases executed on or after September 1, 1999, and (ii)
all leases identified on Schedule 2.3(b) attached hereto without regard to the
date of execution thereof, including commissions due to Existing Manager.
(b) Seller shall be responsible for all of the following
liabilities or obligations of the Existing Venture, Seller or any predecessor of
any of them (collectively, the "SELLER PARTIES") or other Person specified below
(collectively, the "Seller's Liabilities"): (i) any liability or obligation that
is not related to the Property, (ii) any liability or obligation that arises
from contracts or agreements other than the Leases, the Contracts, the REA, the
Existing Indebtedness Documents or the instruments or agreements constituting
the Permitted Exceptions (a "PERMITTED EXCEPTION DOCUMENT") (except to the
extent the Existing Venture accepts the benefits thereof), (iii) any tort
liability arising from any accident, injury, event, circumstance, action or
omission occurring prior to the Closing Date (except to the extent of the
insurance proceeds received by the Existing Venture in connection therewith),
whether or not asserted before or after the Closing, (iv) any liability or
obligation to a Party for breach of, or other payment obligation under, a Lease,
REA, Contract or Permitted Exception Document (including any claimed overcharge
of common area maintenance or other similar charges but excluding the items
covered in clause (v)), to the extent that the liability or obligation relates
to
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the period or accrued prior to the Closing Date, whether or not asserted before
or after the Closing, (v) all leasing costs, costs of Landlord Work (net of the
value of any additional revenues that are to be received by the Existing Venture
and are directly attributable to the Landlord Work), allowances, concessions,
rent abatements, build-out costs, other leasing inducements and leasing
commissions, with respect to all leases executed prior to September 1, 1999
(except with respect to the leases identified on Schedule 2.3(b) attached hereto
which are included in Assumed Liabilities as set forth in Section 2.3(a) above),
(vi) any fine, penalty or other amount that is imposed or assessed by or which
was payable to (including any installment thereof) a Governmental Authority for
the period prior to the Closing Date, whether or not imposed or assessed before
or after the Closing, (vii) all federal, state and local taxes of any Seller
Party of whatever kind and nature relating to the period prior to Closing,
(viii) liabilities and obligations relating to any employees (current or
former), employee benefit plans or collective bargaining agreements of the
Existing Manager or any Seller Party that accrued, relate to or arise from any
incident, event, circumstance, action or omission occurring during the period
through the Closing Date, including severance pay and accrued vacation pay
obligations and other liabilities of the Existing Manager, any Seller Party, the
Company or others relating to the termination of any of such employees prior to
the Closing or as the result of the consummation of the Transactions, (ix) any
liability or obligation to pay for work performed at, or materials supplied or
delivered to, the Property prior to the Closing, (x) any liability or obligation
relating to litigation that is commenced by Persons other than Parties or
Governmental Authorities and that relates to incidents, events, circumstances,
actions or omissions occurring during the period prior to Closing, whether or
not asserted before or after the Closing and (xi) any other costs or liabilities
imposed on Seller hereunder or under the Operating Agreement, including the
obligations of Seller thereunder as to the Retained Debt. Notwithstanding
anything to the contrary contained herein, Seller's Liabilities shall not
include (i) any liabilities or obligations to the extent that the Company has
received a credit therefor under the provisions of Article V and (ii) subject to
the provisions of Section 2.3(c), the cost of repair, remediation or correction
of any physical defect in the Property (but do include damages, fines or other
amounts owing to Parties, Governmental Authorities or others on account of any
such physical defect to the extent that such damages, fines or other amounts are
not for the cost of repair, remediation or correction thereof).
(c) Nothing contained in this Section 2.3 shall impair the
rights of the Company for a breach of any representation or warranty contained
herein or in the Seller Closing Documents.
ARTICLE III
Costs and Expenses
3.1 Title and Survey Costs. Title and Survey costs shall be paid
as follows:
(a) The Company shall pay the cost of obtaining the Title
Commitment and the cost of recording any documents required to release, cure or
remove Defects;
(b) The Company shall pay the cost of obtaining the Survey;
(c) The Company shall pay the cost of recording any other
documents;
(d) Subject to any separate agreement between Seller and the
Company, the Company shall be solely responsible for the payment of any real
property transfer taxes levied
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or imposed upon Seller or the Property as a result of the transfers to the
Company, gains taxes levied or imposed upon Seller or the Property as a result
of the transfers to the Company, sales taxes levied or imposed upon Seller or
the Property as a result of the transfers to the Company, and documentary stamps
and other taxes, fees or charges imposed in connection with the conveyance of
Seller's Interest or any portion thereof;
(e) The Company shall pay all filing fees and charges and any
personal property sales taxes in connection with the indirect transfer of the
Personalty to the Company; and
(f) The Company shall pay the costs of the Lien Search.
3.2 Other Costs. Except for expenses and costs related to the
termination of any existing management agreement and the termination of any
employees, the Company shall pay any and all costs or expenses in connection
with the termination of any Contracts to be terminated in accordance with the
terms of this Agreement. The Company shall pay the legal fees of its counsel and
Seller shall pay the legal fees of Xxxx, Xxxxxx & Xxxxxxxxx incurred in
connection with the drafting and negotiation of this Agreement and the Closing
of the Transactions.
ARTICLE IV
Closing
4.1 Closing. The closing of the Transactions (the "CLOSING") shall take
place at the offices of Xxxx, Gerber & Xxxxxxxxx, Xxx Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, commencing at 10:00 a.m., local time, on the date
hereof (the "CLOSING DATE").
4.2 Seller Closing Documents. On or prior to the Closing Date, Seller
shall deliver, or cause to be delivered, to the Company the following documents
(collectively, the "SELLER CLOSING DOCUMENTS"), duly executed by Seller and the
other parties thereto (other than the Company) and in form and substance
reasonably acceptable to the Company and to Seller unless the form thereof is
attached hereto:
(a) Stock powers or assignments separate from certificate
transferring 100% of the common shares of Natick Trust to the Company, thereby
assigning Seller's Interest from Seller to the Company.
(b) An affidavit of Seller stating its U.S. taxpayer
identification number and that it is a "United States person", as defined by
Sections 1445(f)(3) and 7701(b) of the Code.
(c) Such certificates as the Company may reasonably request
as to the authorization on the part of Seller of the execution, delivery and
performance of this Agreement and the authority of the Persons executing and
delivering this Agreement and the Seller Closing Documents on behalf of Seller.
(d) Certificates issued by the Delaware Secretary of State,
dated not more than ten (10) days prior to the Closing Date, certifying the good
standing of Seller and the general partner(s) of Seller, respectively.
(e) Originals or certified copies of the organizational
documents for the Existing Venture, Natick Trust and Natick II, including
partnership agreements, operating
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agreements, articles of organization, by-laws, minute books and records of
meetings, including all amendments thereof.
(f) Original, or copies certified by Seller as true, complete
and correct, of each of the Leases and the REA, together with all Books and
Records including current real estate tax bills, water, sewer and utility bills
and all Tenant correspondence.
(g) Keys and combinations to locked compartments within the
Property.
(h) The Existing Indebtedness Documents.
(i) Any instruments, documents or certificates required to be
executed by Seller with respect to any state, county or local transfer taxes
applicable to the conveyance of Seller's Interest pursuant to this Agreement.
(j) Such other documents, instruments or agreements which
Seller is required to deliver to the Company pursuant to the other provisions of
this Agreement or which the Company reasonably may deem necessary or desirable
in order to consummate the Transactions in accordance with the terms hereof.
4.3 Company Closing Documents. On or prior to the Closing Date,
the Company shall deliver to Seller the following documents (herein referred to
collectively as the "COMPANY CLOSING DOCUMENTS"), duly executed by an authorized
officer on behalf of the Company and the other parties thereto (other than
Seller) and in form and substance reasonably acceptable to Seller and to the
Company unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which the Company
accepts assignment of Seller's Interest.
(b) A duly executed and acknowledged Secretary's Certificate,
certifying that the members of the Company have duly adopted resolutions
authorizing the consummation of the Transactions and certifying the authority of
the respective authorized signatories of the Company executing and delivering
this Agreement and the Company Closing Documents in their capacities as officers
of the Company.
(c) A certificate issued by the Secretary of State of
Delaware dated not earlier than ten (10) days prior to the Closing Date
certifying the existence and good standing of the Company as of the date of such
certificate.
(d) Copies of the Certificate of Formation of the Company and
any amendments thereto, as of the Closing Date certified by the Secretary of
State of the State of Delaware as of a date not more than twenty (20) days prior
to the Closing Date, together with a certificate of an officer of the Company to
the effect that the Certificate of Formation of the Company, as certified by the
Secretary of State of Delaware, has not been further amended, revised, restated,
cancelled or rescinded up to and including the Closing Date.
(e) Any instruments, documents or certificates required to be
executed by the Company with respect to any state, county or local transfer
taxes applicable to the conveyance of Seller's Interest pursuant to this
Agreement.
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(f) Such other documents, instruments or agreements which the
Company may be required to deliver to Seller pursuant to the other provisions of
this Agreement or which Seller reasonably may deem necessary or desirable to
consummate the Transactions; provided, however, that any such other document,
instrument or agreement which Seller reasonably deems necessary or desirable
shall not impose upon the Company any obligation or liability other than an
obligation or liability expressly imposed upon the Company pursuant to the terms
of this Agreement or pursuant to the terms of the other the Company Closing
Documents specified in this Section 4.3.
4.4 Joint Deliveries. Seller and the Company shall jointly
execute and deliver the Preliminary Proration Date Balance Sheet.
ARTICLE V
Net Equity Adjustment
5.1 Net Equity Adjustment.
(a) At or prior to Closing, Seller shall prepare and deliver
to the Company a balance sheet with respect to the Property and the Existing
Venture (the "PRELIMINARY PRORATION DATE BALANCE SHEET") prepared as of the last
day of the month prior to the Closing Date, or, if the data as of such date are
unavailable, the last day of the second month prior to the Closing Date. No
later than one hundred twenty (120) days after the Closing Date, the Company
shall cause to be prepared and delivered to Seller an unaudited balance sheet
with respect to the Property and the Existing Venture as of the Proration Date
(the "PRORATION DATE BALANCE SHEET" and, together with the Preliminary Proration
Date Balance Sheet, the "CLOSING BALANCE SHEETS"), showing Closing Net Equity.
The Closing Balance Sheets shall be prepared on an accrual basis in accordance
with GAAP applied in a manner consistent with that utilized in the preparation
of the financial statements for General Growth Properties, Inc. without regard
to any special provisions relating to its REIT status, provided however, that
the following rules shall be employed:
(i) the following assets shall be excluded or
eliminated: deferred rent receivables; deferred financing, leasing and
other costs; tenant lease incentives; prepaid expenses to the extent
the full amount thereof could not reasonably be expected to inure to
the benefit of the Existing Venture (including but not limited to
prepaid insurance premiums);
(ii) no amount shall be recorded under the
classification "Building & Improvements", "Fixtures & Equipment",
"Tenant Improvements" and "Land";
(iii) net carrying amounts for or in respect of the
following shall be eliminated, with such elimination to be done, in
each case net of accumulated amortization and depreciation, allowances
for bad debts and other contra accounts: building and improvements,
fixtures and equipment, land, capitalized taxes, tangible personal
property and goodwill;
(iv) the following assets shall be included (and
shall be deemed to be part of the assets of the Existing Venture and
transferred to the Company): all cash in the Existing Venture;
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(v) the following liabilities shall be excluded or
eliminated: Retained Debt, deferred revenues and income tax accounts;
(vi) at Seller's election, a liability may be
excluded to the extent that it is a Seller's Liability and any reserves
or other assets relating to such excluded liability shall be excluded
or distributed to Seller;
(vii) there shall be excluded from assets an amount
equal to proceeds from condemnation awards (or payments in lieu
thereof), casualty insurance or the termination of any Lease, in each
case received after the date hereof;
(viii) reserves for billed accounts receivable,
including Rent and all other tenant charges, shall be calculated so
that (A) accounts receivable from Tenants in bankruptcy shall utilize a
reserve of 100%, (B) accounts receivable that are 90 days (but less
than 120 days) past due shall utilize a reserve of 25%, and (C)
accounts receivable that are more than 120 days past due shall utilize
a reserve of 50%, and in each case accounts receivable shall also
include a reserve of five percent (5%) for unbilled tenant charges, and
an accrual shall be recorded for insurance deductibles based upon
insurance company estimates; and
(ix) any distributions made by Existing Venture
during November shall be treated as though not made.
(b) If, based on the Preliminary Proration Date Balance
Sheet, Closing Net Equity exceeds zero, the Contribution Amount will be
increased by the amount of such excess. If, based on the Preliminary Proration
Date Balance Sheet, Closing Net Equity is less than zero, the Company will
receive a credit against the Contribution Amount equal to the amount of such
shortfall.
(c) If, based on the Proration Date Balance Sheet, Closing
Net Equity, adjusted for the amount of any adjustment made pursuant to Section
5.1(b), exceeds zero, the Company will, no later than the later of (i) sixty-one
(61) days following the delivery of the Proration Date Balance Sheet or (ii)
five (5) business days following the resolution of a dispute with respect to an
item on the Proration Date Balance Sheet as set forth in subsection 5.2 hereof
(the "BALANCE SHEET SETTLEMENT DATE"), pay to Seller the amount of such excess
by wire transfer of immediately available funds to an account designated by
Seller. If Closing Net Equity, adjusted for the amount of any adjustment made
pursuant to Section 5.1(b), is less than zero, Seller will pay to the Company no
later than the Balance Sheet Settlement Date the amount of such shortfall by
wire transfer of immediately available funds to an account designated by the
Company.
5.2 Resolution of Disputes on Proration Date Balance Sheet.
(a) If Seller disagrees with any item on the Proration Date
Balance Sheet, Seller shall notify the Company in writing of such disagreement
within sixty (60) days after Seller's receipt of the Proration Date Balance
Sheet. Such notice shall set forth the basis for such disagreement in reasonable
detail. During such sixty (60) day period, the Company shall afford Seller and
its duly designated representatives access to all of the Existing Venture's
books and records, in each case solely for the purposes of resolving such
disagreement. The Company and Seller shall thereafter negotiate in good faith to
resolve any such disagreements, provided that Seller shall promptly pay to the
Company, or the Company shall promptly pay to
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Seller, as the case may be, the amount determined pursuant to Section 5.1(c)
that is not subject to dispute.
(b) If the Company and Seller are unable to resolve any such
disagreements within thirty (30) days after the expiration of the sixty (60) day
period referred to in Section 5.2(a), or, if the Company and Seller are unable
to resolve a dispute concerning the final adjustments to the Contribution
Amount, the Company and Seller shall cause Ernst & Young LLP (the "AUDITOR") to
resolve all disagreements on the disputed items as soon as practicable, provided
that the Auditor shall be bound by the provisions of Section 5.1 and may not
assign a value to any item greater than the greatest value for such item claimed
by either party or less than the smallest value for such item claimed by either
party. Each of the Company and Seller shall permit the Auditor to have full
access to its books, records, key employees and independent accountants in order
to resolve any such disagreements. The resolution of such disagreements by the
Auditor shall be final and binding on the Company and Seller. The fees and
expenses of the Auditor shall be paid by the party whose position is most at
variance with the decision of the Auditor.
ARTICLE VI
Representations and Warranties
6.1 Seller's Representations and Warranties. Seller represents and
warrants to the Company as follows:
(a) Seller is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware with full
power and authority to execute, deliver and perform this Agreement. Seller has
delivered to the Company true, correct and complete copies of its limited
partnership agreement and all amendments and modifications thereto.
(b) The execution, delivery and performance of this Agreement
by Seller have been duly and validly authorized by all necessary action on the
part of Seller. This Agreement has been, and the Seller Closing Documents will
be, duly executed and delivered by Seller. This Agreement constitutes, and when
so executed and delivered the Seller Closing Documents will constitute, the
legal, valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms.
(c) None of the execution, delivery or performance of this
Agreement by Seller does or will, with or without the giving of notice, lapse of
time or both, violate, conflict with, constitute a default, result in a loss of
rights, acceleration of payments due or creation of any Lien upon the Property
or require the approval or waiver of or filing with any Person (including any
governmental body, agency or instrumentality) under (i) the organizational
documents of Seller or its general partner or, any agreement, instrument or
other document to which Seller or its general partner is a party or by which it
is bound, (ii) any judgment, decree, order, statute, injunction, rule,
regulation or the like of a governmental unit applicable to the Property, the
Existing Venture, Seller or its general partner (other than notification of
ownership change or transfer or reissuance of permits as may be required under
Environmental Laws), or (iii) any contract or agreement by which Seller or the
Existing Venture may be bound.
(d) Seller has good and marketable title to Seller's Interest
free and clear of Liens and, upon execution and delivery of the Seller Closing
Documents, the Company will have good and marketable title to Seller's Interest
free and clear of Liens other than Liens created by,
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under or through the Company. No other property (other than the Real Property
and property owned by any Anchor) comprises "Natick Mall".
(e) Schedule 6.1(e) is a true, correct and complete copy of
the rent roll of the Property (the "RENT ROLL") as of November 1, 1999, prepared
in the format prescribed by the MRI software reporting system currently in place
at the Property. All information therein is accurate as of its date. Except as
set forth to the contrary on Schedule 6.1(e), no Tenant has paid any rent in
advance except for the current month.
(f) Schedule 6.1(f) is a true, correct and complete schedule
of delinquencies in Rent, common area maintenance and other similar charges,
showing amounts payable as of November 1, 1999 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 6.1(g) contains a complete and correct list of
all existing Leases and modifications thereof and supplements thereto regardless
of whether the terms thereof have commenced, setting forth with respect to each
(i) the date thereof and of each modification thereof and supplement thereto and
(ii) the names of the Parties thereto (including the name of the current
assignee, if any, but only if and to the extent Seller has actual notice of any
such assignment). A true and complete copy of each Lease demising space in
excess of 10,000 square feet, together with each modification thereof and
supplement thereto, has heretofore been furnished to the Company for inspection
and has been delivered to the Company on the date hereof. Each Lease constitutes
the entire agreement between the Existing Venture and each Party thereto, and
the Existing Venture has not made any oral promises or agreements amending or
modifying the same. No Person is using or occupying (or is entitled to use or
occupy) the Real Property except under a Lease or the REA.
(i) There are no leases executed by the Existing Venture or
other rights of occupancy or use granted by the Existing Venture or, to
Seller's knowledge, its predecessors in title of any portion of the
Property other than the Leases. Each of the Leases is valid and
subsisting and in full force and effect, and no Rents or other payments
or deposits are held by Seller, the Existing Venture or the Existing
Venture's agent, except the security deposits (together with the amount
of accrued and unpaid interest thereon) described on the Rent Roll and
Rents prepaid for the current month. As of the Closing Date, no Rents
due under, or any other interest in, any of the Leases will be assigned
to any party other than the Existing Lender, or are otherwise pledged
or encumbered in any way. All Security Deposits are being, and have
been, held in compliance with all Legal Requirements.
(ii) Except as set forth on Schedule 6.1(g), no Tenant has
made any written claim which has been received by Seller or the
Existing Venture or, to Seller's knowledge, has any other claim,
whether or not in writing (A) that the Existing Venture has defaulted
in performing any of its obligations under any of the Leases which has
not heretofore been cured, (B) 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.
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(iii) With the exception of delinquencies in the payment of
Rents which are set forth on Schedule 6.1(f), no material default
exists under any of the Leases on the part of the Tenant thereto and
Seller has no knowledge of any condition, which, with the passage of
time, or giving of notice, would constitute a default under any Lease.
With the exception of any requirement to repair any physical defects in
the Property, the Existing Venture is not in default under the Leases.
The Existing Venture has not delivered any default notices to any
Tenant under any Lease which has not been cured.
(iv) There are no rent abatements, offset rights, "free rent
periods" or other tenant concessions or inducements, including lease
assumptions or buy-outs, applicable to any of the Leases or any rights
to extend or renew any of such Leases except as set forth in the
Leases. There are no expansion rights, options or rights to renew,
extend or terminate the Leases, except as set forth in the Leases.
Neither Seller nor the Existing Venture have granted any rights,
options or rights of first refusal of any kind to any Tenant or
otherwise, which are currently in effect, to purchase or to otherwise
acquire the Property or any part thereof or interest therein. 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 in
accordance with the terms thereof and have been paid for.
(v) No condition exists that would permit any Party to any
Lease or REA to cancel or terminate such Lease or REA, be released from
liability from such Lease or REA or reduce its obligations under any
Lease or REA.
(vi) Neither Seller nor the Existing Venture or any Affiliate
of any of the foregoing, has made a loan or otherwise extended any
credit to any Tenant.
(h) The REA constitutes the only reciprocal easement
agreements or operating agreements encumbering the Property. A true and complete
copy of the REA has heretofore been furnished to the Company, together with each
written modification thereof and supplement thereto. The REA constitutes the
entire agreement between the Existing Venture and each REA Party thereto, and
neither Seller nor the Existing Venture have made any oral promises or
agreements amending or modifying the same.
(i) The REA is valid and in full force and effect, and no
Rents or other payments or deposits are held by Seller, the Existing
Venture or Seller's agent, except the Rents prepaid for the current
month. As of the Closing Date, no Rents due under, or any other
interest in, the REA will be assigned to any party other than the
Existing Lender, or are otherwise pledged or encumbered in any way.
(ii) Except as set forth on Schedule 6.1(h), none of the REA
Parties has made any written claim which has been received by Seller,
the Existing Venture or, to Seller's knowledge, has any other claim,
whether or not in writing (A) that the Existing Venture has defaulted
in performing any of its obligations under any of the REAs which has
not heretofore been cured, (B) that any condition exists which with the
passage of time or giving of notice, or both, would constitute any such
default, (C) that such REA Party is entitled to any reduction in,
refund of, or counterclaim or offset against, or is otherwise
disputing, any Rents or other charges paid, payable or to become
payable by such REA Party, (D) that such REA Party is entitled to
cancel its REA or to be relieved of its operating covenants thereunder,
or (E) that there is a violation of any of the covenants, conditions or
restrictions contained in such REA.
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(iii) With the exception of delinquencies in the payment of
Rents which are set forth on Schedule 6.1(f), no material default
exists under the REA on the part of the REA Parties thereto and Seller
has no knowledge of any condition which, with the passage of time or
giving of notice, would constitute a default under any REA. With the
exception of any requirement to repair any physical defects in the
Property, the Existing Venture is not in default under the REA. The
Existing Venture has not delivered any default notices to any party
under the REA which has not been cured.
(iv) There are no rent abatements, offset rights, "free rent
periods" or other concessions or inducements, including lease
assumptions or buy-outs, applicable to the REA or any rights to extend
or renew the REA except as set forth in Schedule 6.1(h) or the REA.
There are no options or rights to renew, extend, expand or terminate
the REA, except as set forth in Schedule 6.1(h). Except as set forth in
Schedule 6.1(h), neither Seller nor the Existing Venture have granted
any rights, options or rights of first refusal of any kind to any of
the REA Parties, which are currently in effect, to purchase or to
otherwise acquire the Property or any part thereof or interest therein.
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 in
accordance with the terms thereof and paid for. No party to any REA has
given notice that it has ceased or that it intends to cease operating
its store or other property that it is required to operate under the
REA.
(i) Each of the Contracts is in full force and effect. To
Seller's knowledge, there have been no material defaults by any Party to a
Contract which have not heretofore been cured. There has been no material
default (without giving effect to any notice and cure rights) by the Existing
Venture under any Contract or any claim received by Seller or the Existing
Venture of any such default by any party thereto, which has not heretofore been
cured except as set forth on Schedule 6.1(i)(a). Except as set forth on Schedule
6.1(i)(b), all of the Contracts are terminable upon notice given sixty (60) days
or less before any such termination, without penalty, fee or cost. A true and
complete copy of each Contract listed on Schedule 6.1(i)(b), together with any
modifications, amendments or supplements thereto, has been delivered or made
available to the Company.
(j) Schedule 6.1(j) contains a list of all permits,
authorizations, approvals and licenses currently maintained with respect to the
Property and all such permits, authorizations, approvals and licenses are in
full force and effect. Neither Seller nor the Existing Venture have received any
written notice of violation from any federal, state or municipal entity with
respect to the Property or in connection with the operations conducted thereon
that has not been cured or otherwise resolved to the satisfaction of such
governmental entity. To Seller's knowledge, the permits, authorizations,
approvals and licenses listed on Schedule 6.1(j) are all of the licenses and
permits which are required for the present use of the Property.
(k) Except for non-friable asbestos and as set forth on
Schedule 6.1(k), neither Seller, the Existing Venture nor any other Person has
caused or permitted any Hazardous Material to be maintained, disposed of,
stored, treated, recycled, brought upon, transported over or generated on, under
or at the Property or any part thereof, except for the presence, maintenance,
storage, use or transportation of substances commonly present or stored at or
used in the ordinary operation and maintenance of shopping centers in ordinary
quantities commonly present, stored or used at shopping centers and in
compliance with applicable laws, including Environmental Laws. There has been no
release or threatened release of any Hazardous Materials at, on or under the
Property or any part thereof that will give
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rise to any obligation or liability to conduct or pay for any investigation,
removal, remediation, monitoring, closure, or post-closure care at, on or under
the Property or any part thereof, nor has there been any release or threatened
release of Hazardous Materials with respect to any offsite location to which
Hazardous Materials have, or are alleged to have, migrated or been transported
from the Property. Seller and the Existing Venture are in compliance with, and
have heretofore complied with, all applicable Environmental Laws with respect to
the Property and as of the date hereof there are no violations of applicable
Environmental Laws at the Property which have not been remediated in accordance
with all applicable Environmental Laws. Neither Seller nor the Existing Venture
have received any written notice from any governmental unit or other person that
it or the Property is not in compliance with any Environmental Law or that it
has any liability with respect thereto and there are no administrative,
regulatory or judicial proceedings pending or, to the knowledge of Seller,
threatened with respect to the Property pursuant to, or alleging any violation
of, or liability under any Environmental Law. Except as set forth on Schedule
6.1(k), neither Seller nor the Existing Venture have installed any underground
or above ground storage tanks on, under or about the Property and no such tanks
are located on, under or about the Property.
(l) Except as set forth on Schedule 6.1(l), the Existing
Venture is under no obligation to make contributions or otherwise provide
assistance to any promotional association or promotional fund and has not
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 and the Existing Venture having no ownership,
management, fiduciary or monetary interest of any kind therein. Seller and/or
the Existing Venture has remitted to the Promotional Association any amounts
received by it from Tenants and other Parties that constitute contributions to
the Promotional Association. Seller and/or the Existing Venture, as the case may
be, has made all required payments to any such Promotional Association or fund,
if any.
(m) Except as provided in Schedule 6.1(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 knowledge, threatened against Seller
or the Existing Venture relating to the Property, Seller's Interest or the
Transactions, there are no unsatisfied arbitration awards or judicial orders
against the Existing Venture and, to Seller's knowledge, there is no basis for
any such arbitration, investigation or other proceeding. Copies of all pleadings
and other documents furnished or made available by Seller to the Company with
respect to the litigation described on Schedule 6.1(m) are true, accurate and
complete in all respects.
(n) No condemnation proceeding or other proceeding or action
in the nature of eminent domain is pending with respect to all or any part of
the Property, and, to Seller's knowledge, no condemnation proceeding or other
proceeding or action in the nature of eminent domain is pending with respect to
any property owned by a Party to the REA which is the subject of such REA and to
Seller's knowledge no Taking is threatened with respect to all or any part of
the Property, or any property owned by a Party to the REA which is the subject
of such REA.
(o) True, correct and complete copies of current real estate
tax bills with respect to the Property, other than tax bills sent to Tenants who
have the obligation to pay such taxes to the collecting authority, have been
delivered or made available to the Company. No portion of the Property comprises
part of a tax parcel which includes property other than
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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.
There are no tax refund proceedings relating to the Property which are currently
pending and neither Seller nor the Existing Venture, nor any Affiliate thereof
has applied for any such reduction. Seller has no knowledge of any special tax
or assessment to be levied against the Property or any change in the tax
assessment of the Property other than the annual assessment. Neither Seller nor
the Existing Venture has received written notice of any, or has any knowledge of
any special assessments currently affecting the Property.
(p) Neither Seller nor the Existing Venture have received
(i) any written notice from any governmental authority having jurisdiction over
the Property of, and to Seller's knowledge there does not exist, (A) any
violation of any law, ordinance, order or regulation (including the ADA)
affecting the Property, or any portion thereof, which has not heretofore been
complied with or (B) any other obligation to any such governmental authority for
the performance of any capital improvements or other work to be performed by
Seller or the Existing Venture 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.
(q) No approval, consent, waiver, filing, registration or
qualification with any third party, including any governmental bodies, agencies
or instrumentalities is required to be made, obtained or given for the
execution, delivery and performance of this Agreement or any of the Seller
Closing Documents by Seller or the consummation of the Transactions (other than
notification of ownership change or transfer or reissuance of permits as may be
required under Environmental Laws).
(r) The Existing Venture is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to own the Property and conduct the
business now being conducted by it.
(s) Natick II is a corporation duly formed, validly existing
and in good standing under the laws of the State of Delaware with full power and
authority to own the interest owned by it in the Existing Venture and conduct
the business now being conducted by it. Natick II owns a .001% interest as a
general partner in the Existing Venture and no Person has any option or other
right to acquire said interest or portion thereof, any other equity interest in
the Existing Venture or any security or instrument convertible into any such
equity interest.
(t) Natick Trust is a business trust duly formed, validly
existing and in good standing under the laws of the State of Massachusetts with
full power and authority to own the interest owned by it in the Existing Venture
and conduct the business now being conducted by it. Natick Trust owns a 99.999%
interest as a limited partner in the Existing Venture and no Person has any
option or other right to acquire said interest or portion thereof, any other
equity interest in the Existing Venture or any security or instrument
convertible into any such equity interest.
(u) Natick Trust owns 100% of the common stock of Natick II
and no Person has any option or other right to acquire said interest or portion
thereof, any other equity interest in Natick II or any security or instrument
convertible into any such equity interest.
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(v) Seller has furnished the Company with the financial
statements of the Existing Venture (consisting of balance sheets and income
statements) as of, and for the calendar years ended, December 31, 1997 and
December 31, 1998 (the "FINANCIAL STATEMENTS"). The Financial Statements are
consistent with the books and records and accounts of the Existing Venture and
fairly present the financial condition and results of the Existing Venture as of
the dates thereof and for the periods referred to therein, and the Financial
Statements have been prepared in accordance with generally accepted accounting
principles, consistently applied throughout the periods indicated. Since
December 31, 1998, the Existing Venture has conducted its business in the
ordinary course consistent with past practice and there have been no material
adverse changes in the financial condition of the business, and Seller has no
knowledge of any circumstance or event which, insofar as can be reasonably
foreseen, is likely to result in any such material adverse change.
(w) [Intentionally Deleted].
(x) Schedule 6.1(x) accurately sets forth (i) a true,
correct and complete list of all instruments, agreements and other documents
relating to the Existing Indebtedness and all modifications or amendments
thereof and supplements thereto (including guaranties, indemnity agreements and
side letters) (the "EXISTING INDEBTEDNESS Documents"), (ii) the date of the
Existing Indebtedness Documents and of each modification or amendment thereof
and supplement thereto, (iii) the name of the holders of the Existing
Indebtedness as of the date hereof, (iv) the unpaid balances (including any
accrued interest thereon) thereof as of the date hereof, (v) the security
therefor as of the date hereof and (vi) the amount of any deposits or escrows
held or established in connection therewith. The Existing Indebtedness Documents
are in full force and effect, neither Seller nor the Existing Venture has
received or delivered any notice of default under any Existing Indebtedness
Document which default has not been cured, and, to the knowledge of Seller, no
default on the part of the Existing Venture or any other Party thereto exists
thereunder (without regard to notice and cure provisions). A true and complete
copy of the Existing Indebtedness Documents, including each written modification
thereof and supplement thereto, have heretofore been furnished to the Company.
Such documents constitute the entire agreement between the Existing Venture and
each Party thereto, and there are no oral promises or agreements amending or
modifying the same.
(y) Schedule 6.1(y) contains a true, complete and accurate
list including the amounts thereof of all policies of insurance with respect to
the Property, which policies are and will be kept in full force to and including
the Closing Date. All premiums for such insurance have been paid in full. To
Seller's knowledge, neither Seller nor the Existing Venture have performed,
permitted or suffered any act or omission which would cause the insurance
coverage provided in said policies to be reduced, cancelled, denied or disputed
and neither Seller nor the Existing Venture have received (and has no knowledge
of) any 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.
(z) To Seller's knowledge, there are no material structural
or other material physical defects in the Improvements or any component or
system of the Improvements and all such Improvements are in good condition and
repair.
(aa) Neither Seller nor, to Seller's knowledge, the Existing
Venture has received notice that there is, and, to Seller's knowledge, there
does not now exist, any violation
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of any restriction, condition or agreement contained in any easement,
restrictive covenant or any similar instrument or agreement affecting the Real
Property or any portion thereof.
(bb) The Existing Venture has no employees. There are no
collective bargaining or union agreements with respect to the employees at
Property or to which Seller or the Existing Venture is bound. The Existing
Venture does not maintain or sponsor any employee benefit plan, including any
plans subject to the Employer Retirement Income Security Act of 1974, as
amended. There are no pending claims or, to Seller's knowledge, any threatened
claim against the Existing Venture by any employee whose employment related to
the Property.
(cc) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Seller.
(dd) [Intentionally Deleted].
(ee) All material documents and Books and Records have been
delivered or have been made available to the Company. All of the documents and
Books and Records that have been delivered or made available to the Company by
or on behalf of Seller, are true, correct and complete copies of what they
purport to be and have not been modified or amended, except as specifically
noted therein. All information set forth in the exhibits and schedules to this
Agreement is true, correct and complete in all material respects and not
misleading. Seller does not have any knowledge of any significant adverse fact
or condition relating to the Property, which has not been specifically disclosed
in writing by Seller to the Company.
(ff) There are no lease brokerage agreements, leasing
commission agreements or other agreements providing for payments of any amounts
for leasing activities or procuring tenants (including renewing leases at
expanding spaces) with respect to the Property other than as disclosed in
Schedule 6.1(ff).
(gg) Schedule 1.1-2 attached hereto contains a true, correct
and complete description of the Personalty (including the name "Natick Mall"),
and except as disclosed on said Schedule 1.1-2, the Existing Venture has good
title to the Personalty free and clear from Liens and other encumbrances other
than the lien of the Existing Indebtedness Documents and the Permitted
Exceptions. The Personalty is all of the personal property that is necessary in
order to operate and maintain the Real Property as a first class regional
shopping center. The Existing Venture has taken all steps necessary in order to
protect its exclusive right to use the name "Natick Mall" in connection with the
Real Property.
(hh) As of October 15, 1999, (i) gift certificates having an
aggregate value of $1,777,941.55 have been sold, and (ii) gift certificates
having an aggregate value of $232,520.00 are outstanding.
(ii) Except as set forth in Schedule 6.1(ii) attached hereto,
neither Seller, nor any Affiliate of Seller (other than the Existing Venture),
owns (i) any right or interest in any real property adjacent to or neighboring
the Real Property including any outparcel or (ii) any right or interest in any
easement, right of way, development right, water or mineral right or any other
right which in any way affects the Real Property.
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(jj) Except for routine work in the ordinary course of
operating the Real Property that will be paid when due, no work has been
performed by Seller or is in progress at Seller's request at the Real Property,
and no materials or supplies have been delivered to the Real Property at
Seller's request, that has resulted in the imposition of, or might provide the
basis for the imposition of, mechanics', materialmen's or other liens against
the Real Property.
(kk) The sales reports heretofore furnished by Seller to the
Company for calendar years 1996,1997 and 1998, and the rolling twelve (12)
months sales report from March 1999, disclose the sales by Tenants at the Retail
Property as reported to Seller by such Tenants.
(ll) All water, storm sewer/sanitary sewer, gas, electricity,
telephone and other utility lines, pipes and other equipment necessary in order
to operate the Real Property as a first class regional shopping center
(collectively, the "UTILITY EQUIPMENT") presently serve the Real Property and,
to Seller's knowledge, are in good working order. Neither Seller nor the
Existing Venture, has any outstanding unpaid obligation to pay the cost of
connection of any utility lines, pipes or other equipment serving the Real
Property.
(mm) The Real Property has not suffered any casualty or other
material damage that has not been fully repaired.
(nn) To Seller's knowledge, all HVAC, electric, gas,
fire-safety, plumbing, mechanical and other systems at the Real Property are in
good, working condition and no portion of same presently require replacement or
significant repair (i.e., repairs which are ordinarily capitalized under
generally accepted accounting principles).
(oo) Except as disclosed on Schedule 6.1(oo) attached hereto,
no capital work is currently in progress or contemplated.
(pp) Neither Seller nor the Existing Venture, has received
written notice from any Governmental Authority, from any Party to any REA, any
Tenant or any party to any other agreement or document, or otherwise has
knowledge, that the number of parking spaces at the Real Property is required
under any Legal Requirement, any Lease, or the REA, to be increased above the
number of parking spaces existing on the date hereof.
(qq) The Existing Venture has (i) filed all tax returns
required to be filed by it under applicable Legal Requirements and (ii) timely
paid all taxes shown to be due and payable on such tax returns.
(rr) Except as shown on the Title Commitment, from and after
the date of the Title Policy no additional Defect has occurred, which if not
cured, would have a material and adverse effect on the marketability of title to
the Real Property. Seller has no knowledge of any defects, liens, encumbrances,
adverse claims or other matters insured against under the Title Policy
(collectively, the "INSURED MATTERS") that could result in the issuer of the
Title Policy denying its liability to the Company on the grounds that the
Existing Venture or the Company had knowledge of any such Insured Matters solely
by reason of notice thereof imputed to it as a matter of law through either
Seller, the Existing Venture or any Affiliate thereof.
(ss) Except as set forth on Schedule 6.1(ss), neither Seller
nor the Existing Venture has received any written notice with respect to the
Real Property of any violation of law or municipal ordinances, orders or
requirements, that have been noted in or issued by any
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federal, state or municipal department having jurisdiction, and which have not
been fully remedied and discharged of record.
(tt) To Seller's knowledge, Seller has provided the Company
with access to any and all certificates, licenses, permits, leases, ground
leases, operating agreements, books, records, documents and information relating
to the Real Property and the ownership and operation thereof which are in the
possession and control of Seller or the Existing Venture.
(uu) Seller is the owner of 100% of the common shares of
Natick Trust. Seller owns 100% of the Seller's Interest and Seller's Interest
represents 100% of the ownership interests in the Existing Venture. No Person
has any option or other right to acquire Seller's Interest, any portion thereof
or any other equity interest in Seller's Interest or any security or instrument
convertible into any such equity interest.
Notwithstanding anything to the contrary contained herein, (a)
Seller shall have no liability under this Agreement for the cost of repair,
remediation or correction of any physical defect in the Property except as a
result of a breach of the representations and warranties contained in Sections
6.1(k), (z), (mm) and (nn)) (but nothing contained in this paragraph shall limit
Seller's liability for damages, fines or other amounts owing to Parties,
Governmental Authorities or others on account of any such physical defect to the
extent that such damages, fines or other amounts are not for the cost of repair,
remediation or correction thereof) and (b) Seller shall have no liability for a
breach of representation or warranty contained herein or in the Closing
Documents to the extent that the Company has received a credit therefor under
the provisions of Article V.
6.2 Company Representations and Warranties. The Company represents
and warrants to Seller as follows:
(a) The Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Company
of this Agreement have been duly and validly authorized by all requisite action
on the part of the Company. This Agreement has been, and the Company Closing
Documents will be, duly executed and delivered by the Company. This Agreement
constitutes, and when so executed and delivered the Company Closing Documents
will constitute, the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their terms.
(c) None of the execution, delivery or performance of this
Agreement or the Company Closing Documents by the Company does or will, with or
without the giving of notice, lapse of time or both, violate, conflict with,
constitute a default or result in a loss of rights under or require the approval
or waiver of or filing with any Person (including any governmental body, agency
or instrumentality) under (i) the organizational documents of the Company or any
material agreement, instrument or other document to which the Company is a party
or by which the Company is bound or (ii) any judgment, decree, order, statute,
injunction, rule, regulation or the like of a governmental unit applicable to
the Company, other than notification of ownership change or transfer or
reissuance of permits as may be required under Environmental Laws.
(d) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of the
Company.
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6.3 No Other Representations. Neither Seller nor any officer,
director, shareholder, member, agent, partner, employee, or representative of
Seller (or any officer, director, partner or employee of any agent of Seller)
has made any representation whatsoever regarding the Property or any part
thereof, or anything relating to the subject matter of this Agreement, except as
expressly set forth in this Agreement, and the Company, in executing, delivering
and performing this Agreement, has not and does not rely upon any statement,
information, or representation to whomsoever made or given, whether to the
Company or others, and whether directly or indirectly, verbally or in writing,
made by any person, firm or corporation, except as expressly set forth in this
Agreement or in the Seller Closing Documents.
6.4 Knowledge Defined. For the purposes of this Agreement,
"knowledge" (including "actual knowledge" and other similar terms) with respect
to Seller and the Existing Venture shall mean matters as to which any of the
following individuals have actual knowledge without any duty or responsibility
to make any inquiry, review or investigation: (a) Xxxx Xxxxxxxxx, (b) Xxxxxx X.
Xxxxxxxx, (c) Xxxx Xxxxx, (d) Xxxxxxx Xxxxxxxx and (e) Xxxxx Xxxxxxxxxx. Actual
knowledge shall not be deemed to exist merely by assertion by the Company of a
claim that any of the foregoing persons should have known of such facts or
circumstances, if such person did not have actual knowledge thereof. Seller
hereby represents and warrants that the foregoing individuals are the
individuals with the primary responsibility for overseeing the sale, management,
and operation of the Property at the level of vice president and above.
ARTICLE VII
Additional Covenants
7.1 Record Retention. Until three (3) years after the Closing, the
Company shall provide Seller upon prior written notice and during normal
business hours with reasonable access to the Books and Records and, at Seller's
cost, copies of all or any portion thereof. The Company either shall retain such
Books and Records until the third anniversary of the date hereof or notify
Seller of its desire to dispose of such Books and Records pertaining to any
period prior to the Closing which have been delivered to the Company and turn
them over to Seller if Seller so requests. Seller agrees to keep, and to
instruct its agents, employees and representatives to keep, confidential such
Books and Records (and any information contained therein) and any information
discovered in any such examinations and inspections, except in connection with
any legal proceedings or to the extent required by law. Upon the Company's
request, for a period of three (3) years after the Closing, Seller shall make
all of Seller's records with respect to the Property which are in the possession
or control of Seller available to the Company for inspection, copying and audit
by the Company's designated accountants. The provisions of this Section 7.1
shall survive Closing.
7.2 Publicity. In no event shall either Seller or the Company
issue any press release or otherwise disclose any non-public information
regarding this Agreement or the Transactions unless the other party has
consented thereto in writing as to the form and substance of any such statement
or disclosure (and Seller and the Company agree not unreasonably to withhold,
condition or delay such consent); provided, however, that nothing herein shall
be deemed to limit or impair in any way any party's ability to disclose the
details of or information concerning this Agreement or the Transactions to the
extent necessary to such party's attorneys, accountants or other advisors or to
the extent such party reasonably deems necessary or desirable pursuant to any
court or governmental order or applicable securities laws or regulations or
financial reporting requirements, or to obtain the Existing Indebtedness Consent
Documents. Further, to the extent necessary, either party may disclose any
information regarding this Agreement or the Transactions to its direct or
indirect constituent partners,
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members or shareholders, as the case may be (and to counsel for such constituent
partners, members and shareholders) and as otherwise necessary to comply with
the terms of this Agreement. Any disclosure by a party's advisors or direct or
indirect constituent partners, members or shareholders shall be deemed a breach
hereof by such party. If for any reason this Transaction is not consummated, the
Company will promptly return to Seller all originals and copies of documents,
reports and financial and other information relating to the Property and to
Seller which Seller has furnished to the Company. The obligations of Seller and
the Company under this Section 7.2 shall survive the termination hereof, however
caused.
7.3 Assistance Following Closing. From and after the Closing,
Seller at the Company's reasonable expense shall provide reasonable assistance
to the Company in connection with the preparation of financial statements and
bills and the adjustment of losses and claims and the enforcement or settlement
of any such claims. Without limiting the foregoing, Seller shall, upon the
reasonable request of the Company from time to time, provide signed
representation letters with respect to revenues and expenses of Seller if
required under GAAS to enable the Company's accountants to render an opinion on
the Company's financial statements.
7.4 Further Assurances. Each of Seller and the Company agree, at
any time and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and other documents (and to
bear its own costs and expenses incidental thereto) and to take such other
actions as the other of them may reasonably request in order to carry out the
intent and purpose of this Agreement; provided, however, that neither Seller nor
the Company shall be obligated, pursuant to this Section 7.4 to incur any
expense of a material nature and/or to incur any material obligations in
addition to those set forth in this Agreement and/or its respective Closing
Documents.
7.5 No Intercompany Accounts. Prior to the Closing Seller shall
pay, distribute, release or otherwise eliminate any and all intercompany debt or
accounts between the Existing Venture and Seller or any Affiliate of Seller.
ARTICLE VIII
Indemnification
8.1 Indemnification by Seller. From and after the Closing, Seller
shall indemnify, defend and hold harmless the Company and its members, officers,
directors, managers, employees, representatives and agents, and any direct or
indirect partner, shareholder, officer, director or member of any member of the
Company, and their respective successors and assigns (collectively, the
"INDEMNIFIED COMPANY PERSONS") from and against any Losses asserted against,
incurred or suffered by any Indemnified Company Person that results from,
relates to or arises out of (a) the breach or inaccuracy of any representation
or warranty made by Seller in this Agreement or the Seller Closing Documents,
(b) the breach or non-fulfillment by Seller of any of the covenants or
agreements of Seller under this Agreement or the Seller Closing Documents, or
(c) Seller's Liabilities.
8.2 Indemnification by the Company. From and after the Closing,
the Company shall indemnify, defend and hold harmless Seller and its direct or
indirect shareholders, directors, officers, members, partners, employees and
agents, and their respective successors and assigns (collectively the
"INDEMNIFIED SELLER PERSONS") from and against any Losses asserted against,
incurred or suffered by any Indemnified Seller Person that results from, relates
to or arises out of (a) the breach or inaccuracy of any representation or
warranty made by the
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Company in this Agreement or the Company Closing Documents, (b) the breach or
non-fulfillment by the Company of any of the covenants or agreements of the
Company under this Agreement or the Company Closing Documents, or (c) the
Assumed Liabilities.
8.3 Indemnification Procedure.
(a) Subject to the provisions of Section 8.3(d), the
indemnified party (the "INDEMNIFIED PARTY") shall give the indemnifying party
(the "INDEMNIFYING PARTY") prompt notice of any Losses (or potential Losses)
which may be covered under this Article VIII and such notice shall state the
basis for the claim, action or proceeding and the amount thereof (to the extent
such amount is determinable at the time when such notice is given). In the event
the notice relates to a claim, assertion, action, suit or proceeding by a third
party ("THIRD PARTY CLAIM") for which indemnification is provided hereunder, the
Indemnified Party shall permit the Indemnifying Party (or its insurance company)
to assume the defense of such claim, assertion, action, suit or proceeding and
the Indemnifying Party (or its insurance company) may (i) prior to the
commencement of any proceedings in connection with such Losses, undertake the
negotiation of any resolution of the dispute relating to such Losses, including
in accordance with the terms hereof any settlement or release, or (ii) undertake
the defense of any proceeding (including any alternative dispute resolution
proceeding) regarding such Losses by selecting legal counsel who shall be
reasonably acceptable to the Indemnified Party. Failure of the Indemnifying
Party to notify an Indemnified Party of its election to undertake the
Indemnified Party's defense of a Third Party Claim within a reasonable time, but
in no event more than thirty (30) days after notice thereof shall have been
given to the Indemnifying Party, shall be deemed a waiver by the Indemnifying
Party of its right to undertake the defense of such Third Party Claim. Xxxxxxx
Xxxx & Gallagher, Neal, Gerber & Xxxxxxxxx and counsel for the Indemnifying
Party's insurance company shall be deemed reasonably acceptable to the
Indemnified Party.
(b) Provided the Indemnifying Party shall have undertaken
the Indemnified Party's defense of a Third Party Claim with legal counsel
reasonably acceptable to the Indemnified Party, and shall have so notified the
Indemnified Party, the Indemnified Party shall be entitled to participate at its
own expense in the aforesaid negotiation or defense of any claim relating to
such Losses (subject to reimbursement to the limited extent provided in Section
8.3(e)), but such negotiations or defense shall be controlled by counsel to the
Indemnifying Party.
(c) Except as provided in Section 8.3(e), the Indemnifying
Party shall not be liable for payments relating to the resolution of any dispute
or any settlement of any litigation or proceeding effected without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed. The Indemnifying Party shall not, in the
defense of any such Third Party Claim, consent to the entry of any judgment or
award, or enter into any settlement, except in either event with the prior
consent of each Indemnified Party, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent any Indemnified Party declines
to consent to a bona fide offer of settlement or compromise, the Indemnifying
Party shall continue to defend, but the amount of such offer shall be the limit
of the Indemnifying Party's liability with respect to such claim, action or
proceeding with respect to the Indemnified Party that declined such offer.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
Indemnified Party's written consent (which consent may be withheld in the sole
and absolute discretion of the Indemnified Party) resolve any dispute or settle
or compromise any claim regarding Losses from a Third Party Claim or consent to
entry of any judgment which would impose an injunction or other equitable relief
upon the Indemnified Party
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or which does not include as an unconditional term thereof the release by the
claimant or the plaintiff of the Indemnified Party from all liability in respect
of any such Losses.
(d) The failure to give notice of a claim under this Article
VIII shall not release the Indemnifying Party of its obligations under this
Article VIII, except to the extent of the actual harm suffered thereby.
(e) In the event the Indemnifying Party fails after notice
from the Indemnified Party to timely undertake negotiation of any dispute or
defend, contest or otherwise protect against any claim or suit with respect to a
Third Party Claim, and to so notify the Indemnified Party, the Indemnified Party
may, but will not be obligated to, defend, contest or otherwise protect against
the same, and make any compromise or settlement thereof and recover the entire
costs thereof from the Indemnifying Party, including reasonable attorneys' and
experts' fees, disbursements and all amounts paid as a result of such claim or
suit or the compromise or settlement thereof. The Indemnified Party shall
cooperate and provide such assistance as the Indemnifying Party may reasonably
request in connection with the negotiation of any dispute and the defense of the
matter subject to indemnification and the Indemnifying Party shall reimburse the
Indemnified Party's reasonable costs incurred thereafter in connection with such
cooperation and assistance.
(f) Notwithstanding anything to the contrary contained
herein, neither Seller nor the Company shall be entitled to indemnification
hereunder for any Losses to the extent it has received a credit therefor
pursuant to Article V.
ARTICLE IX
Miscellaneous
9.1 Survival. Except for the representations and warranties of
Seller set forth in Section 6.1(k), which representations and warranties and the
indemnification provision relating thereto shall survive Closing indefinitely,
all other representations, warranties, covenants and agreements of Seller and of
the Company set forth in this Agreement shall survive until the Company ceases
to exist under the terms of the Operating Agreement.
9.2 Notices. Notices must be in writing and sent to the party to
whom or to which such notice is being sent, by (a) certified or registered mail,
postage prepaid and return receipt requested, (b) commercial overnight courier
service, or (c) delivered by hand with receipt acknowledged in writing, as
follows:
To the Company:
GGP/Homart II L.L.C.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
with a copy thereof to:
The Comptroller of the State of New York,
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
-00-
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Deputy Comptroller --
Investments and Cash Management
and
The Comptroller of the State of New York,
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Counsel
and
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
and
Clarion Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
To Seller:
GGP Limited Partnership
000 X. Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx
Attention: Xxxxxx X. Xxxxxxxx
with a copy to:
Xxxx, Gerber & Xxxxxxxxx
Two North LaSalle Street, Suite 2200
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
All notices (i) shall be deemed given when received if delivered by hand or
overnight courier service or, if mailed as described above with appropriate
postage, after 5 business days and (ii) may be given either by a party or by
such party's attorneys. The cost of delivery shall be borne by the party
delivering the notice.
9.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute a single document when at least one counterpart has been executed and
delivered by each party hereto.
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9.4 Amendments. Except as otherwise provided herein, this
Agreement may not be changed, modified, supplemented or terminated, except by an
instrument executed by the party hereto which is or will be affected by the
terms of such change, modification, supplement or termination.
9.5 Waiver. Each party shall have the right exercisable in its
sole and absolute discretion, but under no circumstances shall be obligated, to
waive or defer compliance by any other party with its obligations hereunder or
to waive satisfaction of any conditions contained herein for its benefit. No
waiver by any party of a breach of any covenant or a failure to satisfy any
condition shall be deemed a waiver of any other or subsequent breach or failure
to satisfy any other condition. All waivers of any term, breach or condition
hereof must be in writing.
9.6 Successors and Assigns. Subject to the provisions of Section
9.10, the terms, covenants, agreements, conditions, representations and
warranties contained in this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
9.7 Third Party Beneficiaries. The provisions of this Agreement
are made for the benefit of the parties hereto, and their respective successors
in interest and assigns and are not intended for, and may not be enforced by,
any other person or entity.
9.8 Partial Invalidity. If any term or provision of this Agreement
or the application thereof to any person or circumstance shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
9.9 Governing Law. This Agreement has been made pursuant to and
shall be governed by the laws of the State of Delaware (without regard to
conflicts of law rules).
9.10 Assignment. This Agreement may not be assigned or delegated by
any party without the written consent of the other except that the Company may
assign this Agreement to an Affiliate of the Company, it being acknowledged and
agreed by the Company that no such assignment shall relieve the Company of its
obligations under this Agreement.
9.11 Headings; Exhibits. The headings or captions of the various
Articles and Sections of this Agreement have been inserted solely for purposes
of convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
9.12 Gender and Number. Words of any gender shall include the other
gender and the neuter. Whenever the singular is used, the same shall include the
plural wherever appropriate, and whenever the plural is used, the same also
shall include the singular where appropriate.
9.13 Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes any prior written or oral understandings and/or agreement among them
with respect thereto.
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9.14 Costs of Enforcement. In the event that any action is brought
by any party or parties to this Agreement against any other party or parties to
enforce rights under this Agreement, the prevailing party's or parties' costs in
such action, including reasonable attorneys' fees, shall be paid by the other
party or parties. Any amounts owing hereunder which are not paid when due shall
bear interest at the per annum rate equal to the prime rate of Bank of America,
N.A. (or any successor), as the same may change from time to time, plus four
percent.
9.15 Time of the Essence. Time is of the essence with regard to
each provision of this Agreement. If the final date of any period provided for
herein for the performance of an obligation or for the taking of any action
falls on a Saturday, Sunday or banking holiday, then the time of that period
shall be deemed extended to the next day which is not a Sunday, Saturday or
banking holiday. Each and every day described herein shall be deemed to end at
5:00 p.m. Central Time.
9.16 Indemnification Against Broker Claims. Seller shall indemnify,
defend and hold harmless the Company from and against all loss, liability,
damages, costs and expenses (including reasonable counsel fees) resulting from
any claim that may be made by any broker or other person claiming to have dealt
with Seller in connection with the Transactions, for a commission, fee or other
compensation by reason of the Transactions including any loss, liability, costs
and expenses (including reasonable counsel fees) incurred in enforcing this
indemnity. The Company shall indemnify, defend and hold harmless Seller from all
loss, liability, costs and expenses (including reasonable counsel fees)
resulting from any claim that may be made by any broker or other person claiming
a commission, fee or other compensation by reason of having dealt with the
Company in connection with the Transactions, including any loss, liability,
costs and expenses (including reasonable counsel fees) incurred in enforcing
this indemnity. The provisions of this Section 9.16 shall survive the Closing or
termination of this Agreement.
9.17 Arbitration. Except as otherwise provided herein, in the event
of any dispute in connection with the terms and provisions of this Agreement,
the parties agree to submit such dispute to arbitration in accordance with the
provisions of Section 14.13 of the Operating Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto on the day and year first above written.
SELLER: COMPANY:
GGP LIMITED PARTNERSHIP, GGP/HOMART II L.L.C.,
a Delaware limited partnership a Delaware limited liability company
By: GENERAL GROWTH PROPERTIES, INC.
a Delaware corporation,
its general partner By: /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
By: /s/ Xxxx Xxxxx
-------------------------------
Name: Xxxx Xxxxx
Title: Senior Vice President
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31
LIST OF EXHIBITS AND SCHEDULES
Exhibits/Schedule Description
Exhibit A Legal Description of the Land
Exhibit B Permitted Exceptions
Exhibit C [Intentionally Deleted]
Schedule 1.1-1 Anchors
Schedule 1.1-2 Personalty
Schedule 2.3(b) List of Approved Leases
Schedule 6.1(e) Rent Roll
Schedule 6.1(f) Schedule of Arrearages
Schedule 6.1(g) Leases
Schedule 6.1(h) Claims under REA
Schedule 6.1(i)(a) List of all Material Defaults Under Contracts
Schedule 6.1(i)(b) List of all Contracts not terminable on 60 days or less
notice
Schedule 6.1(j) Permits and Licenses
Schedule 6.1(k) Environmental Disclosure
Schedule 6.1(l) Promotional Association Matters
Schedule 6.1(m) Pending or Threatened litigation
Schedule 6.1(x) List of Existing Indebtedness Documents
Schedule 6.1(y) Insurance Policies
Schedule 6.1(ff) Lease Brokerage Agreements
Schedule 6.1(ii) Seller's Rights in Neighboring Properties
Schedule 6.1(oo) Capital Expenditures in Progress or Contemplated
Schedule 6.1(ss) Notices of Uncured Violations
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