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EXHIBIT 10.2
USC - CENTURY CITY SHOPPING CENTER AND MARKETPLACE
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT made and entered into, as of the "Effective Date" (as
hereinafter defined in Paragraph 8.21 below), by and USC CENTURY, INC., a
Delaware corporation (hereinafter collectively referred to as "Purchaser") and
RREEF USA FUND-II, a California group trust (hereinafter referred to as
"Seller").
WHEREAS:
A. Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, a 90.3865785% undivided interest in the "Property"
described below (the "USC Interest"), which Property consists of a shopping
center commonly known as Century City Shopping Center and Marketplace.
B. Concurrently with the execution of this Agreement by both parties,
Seller shall enter into a purchase agreement with CENTURY CITY MALL, LLC, a
Delaware limited liability company ("CCM") (the "Other Sale Agreement"), whereby
Seller shall sell to USC and USC shall purchase from Seller, a 9.6134125%
undivided interest in the Property (the "CCM Interest").
C. Said Century City Shopping Center and Marketplace also includes
department stores commonly known as Macy's and Bloomingdale's (the "Department
Stores").
D. The parties desire to set forth their agreement as to the matters
herein set forth.
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged, the parties hereto do hereby agree
as follows:
1. Sale of Property; Purchase Price.
1.1 Sale of Property. On the terms and conditions hereinafter set
forth, Purchaser agrees to purchase, and Seller agrees to sell, a 90.3865785%
undivided interest only in all of the following (collectively, the "Property"):
1.1.1 That certain real property owned by Seller located in the
City of Los Angeles, County of Los Angeles, State of California, as more
particularly described on EXHIBIT A, together with all and singular, the
tenements, hereditaments, easements, rights-of-way and appurtenances belonging
or in anywise appertaining to the same and owned by Seller, and all right, title
and interest of Seller, if any, in and to any land lying in the bed of any
street, road or avenue open or proposed, public or private, in front of or
adjoining the Land, to the centerline thereof, and all right, title and interest
of Seller, if any, in and to any award hereafter made in lieu thereof and in and
to any award for damage to the Property by reason of a change of
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grade of any street hereafter occurring, but excluding any oil, gas and other
minerals and rights incident thereto previously reserved or conveyed (the
"Land");
1.1.2 All improvements, structures and fixtures owned by Seller
now or on the Closing Date (as defined below) located upon the Land (the
"Improvements") subject to those terms and conditions contained in that certain
ground lease, as amended, by and between Seller's predecessor in interest,
Century City, Inc. and Federated Department Stores, Inc. dated December 31,
1974;
1.1.3 All tangible personal property owned by Seller now or on
the Closing Date located on or about the Land or the Improvements described in
SCHEDULE 1.1.3 attached hereto and made a part hereof (the "Personal Property")
and excluding the personal property in the Manager's office described in
SCHEDULE 1.1.3A; and
1.1.4 All intangible property owned by Seller now or on the
Closing Date owned or held in connection with the Land, the Improvements or the
Personal Property, or any business or businesses owned by Seller now or
hereafter conducted thereon or in connection with the use thereof (other than
those businesses conducted by tenants under Leases (as defined in Paragraph
5.1.10 below) in their capacity as tenants and those assets owned by Seller's
management company) including, without limitation, all leases, prepaid rent,
security deposits, guaranties of leases, mineral rights, air rights, contract
rights and agreements (including the Leases, and any service or equipment
leasing contracts with respect to or affecting the Property), operating,
maintenance and other records, building and trade names and logos used by Seller
in connection with the Property (including the name "Century City Shopping
Center and Marketplace" but not including the name "RREEF," however, Seller
provides no warranty that Seller has any rights with respect to ownership or use
of such trade names or logos, licenses (excluding computer software), written
authorizations necessary for the use, operation or ownership of the Property,
warranties (including those relating to construction or fabrication), utility
contracts, telephone exchange numbers, advertising materials, studies or other
materials related to the marketing of the Property to the public and prospective
tenants and other occupants of the Property, including leasing brochures and
tenant data sheets, plans and specifications, governmental approvals, permits
and development rights related to the Land, the Improvements or the Personal
Property or any part thereof but excluding (i) the rights to rents and other
sums due for any period of time prior to Closing, as defined below, (ii) any
claims of Seller against third parties for delinquent rents and other sums
payable under the Leases (as defined below), relating to any period of time
prior to Closing, (iii) any claims arising out of or related to any rights and
claims against Seller by third parties for any period of time prior to Closing
(including, without limitation, any claims related to the obligations of Seller
set forth in Paragraph 7.2(b) herein) and including, without limitation, all
rights and claims against: (w) Federated Department Stores, Inc. ("Federated's")
regarding supplemental taxes associated with Federated's acquisition of the
space occupied by Bloomingdale's and the space occupied by Macy's for the period
prior to Closing; (x) any other tenants regarding supplemental taxes or
mechanic's liens for the period prior to Closing; (y) Broadway Stores, Inc.
("Broadway's") regarding recovery of rental premium insurance fees; (z) Fast
Frame, a former tenant for monthly payments in the amount of $208.33 until
January 2000 for past rent due to Seller; and (aa) AMC regarding the
installation of
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a new underground storage tank more fully described in Section 8.29 herein (the
"AMC Tank Issue") (all items referred to in this clause (iii) are defined as
"Reserved Claims") (provided however, Seller's rights hereunder shall in no way
limit Purchaser's rights for any claims for matters arising from and after the
Closing), (iv) any bank accounts or similar accounts and (v) Seller's rights
pursuant to Paragraph 8.26 herein (the "Intangible Property"). All items of the
Property which are not real property shall constitute part of the Intangible
Property and Personal Property.
1.2 Purchase Price. The purchase price for the CCM Interest
("Purchase Price") is Two Hundred Forty Five Million Eight Hundred Fifty One
Thousand Five Hundred Eighteen and No/100 Dollars ($245,851,518.00), payable at
Closing as defined in Paragraph 7.1 pursuant to the terms set forth herein.
Purchaser shall pay a portion of the Purchase Price by assuming the Xxxxxx Loan
(as defined in Section 4.2 below) and there shall be a credit against the
Purchase Price in the amount that Seller actually receives and retains in excess
of Twenty Two Million Nine Hundred Fifty Three Thousand Six Hundred Twenty Eight
and No/100 Dollars ($22,953,628.00) under the Xxxxxx Loan, provided there shall
be no other credit against the Purchase Price with respect to any principal,
interest or other amounts outstanding under the Xxxxxx Loan or distributed under
the Xxxxxx Loan. Purchaser shall pay the remainder of the Purchase Price by wire
transfer in immediately available funds.
2. Intentionally Deleted.
3. Review of the Property.
3.1 Prior to the Effective Date, Seller has provided Purchaser and
its agents or consultants with access to the Property to inspect each and every
part thereof to determine its present condition and to conduct such physical and
environmental studies (including a mechanical and roof study and Phase I
environmental assessment) as it deemed appropriate.
3.2 Prior to the Effective Date, Seller has delivered to Purchaser,
or made copies available to Purchaser at the Property, all to the extent in the
possession of Seller or its managing agent:
3.2.1 a copy of any existing occupancy and equipment leases,
service contracts and maintenance or other contracts pertaining to the
operations of the Property that will survive Closing, copies of all real estate
tax bills for the years 1996, 1997 and 1998 and through the period ending June
30, 1999, both inclusive, and unaudited operating statements for the Property
for the years 1996, 1997 and 1998, and for the first three months of 1999.
3.2.2 a copy of any environmental reports relating to the
Property prepared by third party consultants.
3.2.3 a copy of all current franchises, business or other
licenses, bonds, permits, certificates, authorizations and other evidences of
consent, approval, authorization or permission relating to or affecting the
Property of or from any person, including any governmental authority, held by
Seller, including any pending applications.
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3.2.4 a copy of all material third party warranties and
guaranties, if any, which are in effect with respect to the Property.
3.2.5 a copy of those other materials set forth on SCHEDULE
3.2.5.
3.2.6 as-built plans and specifications for the improvements on
the Property, including the plans and specifications for and a complete
description of all existing renovations to the Property and the leasable space
therein, if available.
3.2.7 as-built drawings of underground utilities (including
sewer, water, gas, telephone and electrical service cables) located under the
Land, if available.
3.3 Purchaser agrees that any information obtained by Purchaser or
its authorized agents in the conduct of its due diligence will be treated as
confidential pursuant to Paragraph 8.17.
3.4 As and when Seller obtains updated or new information, which, if
presently in Seller's possession, would have been delivered to Purchaser
pursuant to Paragraph 3.2 (including additional monthly reports on the
Property), Seller shall deliver such updated and new information to Purchaser.
4. Title.
4.1 Purchaser hereby agrees to acquire title to the USC Interest
subject to those exceptions (collectively, the "Acceptable Exceptions") set
forth on the Pro Form Title Policy (the "Pro Forma") issued by Title Insurer
attached hereto as SCHEDULE 4.1. If any other recorded or unrecorded exception
to title is discovered after the Effective Date which would prevent the Title
Insurer from issuing a title policy in the form of the Pro Forma, and Purchaser
does not elect to waive such exception, upon the first to occur of (a) the
Closing Date or (b) seven (7) days after being notified of such exception, and
to proceed with the consummation of the Closing, Seller will have fifteen (15)
days after the expiration of said seven (7) day period (and Closing will be
delayed if necessary, so that it occurs not earlier than twenty-two (22) days
after Purchaser is notified of such exception) after notifying Purchaser of such
discovery in which to use commercially reasonable efforts to eliminate or to
induce the Title Insurer to insure over (subject to Purchaser's approval, not to
be unreasonably withheld) such exception, and if such exception is not
eliminated or insured over as aforesaid within said 15-day period, Purchaser may
either: (1) terminate this Agreement and neither party will have any further
rights or obligations hereunder except as provided in Paragraphs 8.8, 8.15 and
8.17 or (2) close the sale subject to such exception without deduction or setoff
as to the Purchase Price and without any other rights against Seller with
respect thereto. Notwithstanding the foregoing, Seller shall discharge any
monetary lien that arises after the Effective Date and prior to Closing due to
any act of Seller to enter into a deed of trust or mortgage evidencing such lien
except for the lien of the Xxxxxx Loan.
4.2 Xxxxxx Loan Documents. Solely and exclusively as an
accommodation to Purchaser and CCM, Seller will borrow the amount of One Hundred
Sixty Million and 00/100
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Dollars ($160,000,000) (the "Xxxxxx Loan") from Xxxxxx Brothers Holdings Inc., a
Delaware corporation, doing business as Xxxxxx Capital, a division of Xxxxxx
Brothers Holdings Inc. ("Xxxxxx"), to be secured by, among other things, by a
nonrecourse mortgage which will encumber the Property (said Mortgage along with
all other documents evidencing or securing the Xxxxxx Loan or to be executed in
connection therewith are referred to herein collectively as the "Xxxxxx Loan
Documents"). Concurrently with Closing, Purchaser and CCM pursuant to the Other
Sale Agreement, collectively shall assume all of the obligations under the
Xxxxxx Loan and the Xxxxxx Loan Documents and Seller shall be completely
released of any and all obligations under the Xxxxxx Loan and the Xxxxxx Loan
Documents. Purchaser shall execute a release and assumption agreement with
respect to the Xxxxxx Loan in a form satisfactory to Seller in Seller's sole
discretion (the "Release and Assumption Agreement"). The Xxxxxx Loan Documents
must be in form and substance acceptable to Seller in Seller's sole discretion.
From and after the Closing Date, Seller will have no responsibility in any way
for any payment, obligation, liability, debt and claim arising out of the Xxxxxx
Loan or the Xxxxxx Loan Documents. Purchaser shall, at its sole cost and
expense, protect, defend, indemnify, release and hold harmless Seller from and
against any and all claims, suits, liabilities (including, without limitation,
strict liabilities), actions, proceedings, obligations, debts, damages, losses,
costs, expenses, fines, penalties, charges, fees, expenses, judgments, awards,
and amounts paid in settlement, of whatever kind of nature whatsoever, and
whether known or unknown, foreseeable or unforeseeable (including, but not
limited to, attorneys' fees and other costs of defense) imposed upon or incurred
by or asserted against Seller and directly or indirectly arising out of or in
any way relating to the Xxxxxx Loan or the Xxxxxx Loan Documents. The
obligations of Purchaser under this Paragraph 4.2 shall survive the Closing.
5. Representations and Warranties.
5.1 Representations and Warranties of Seller. Subject to the
provisions of Section 5.3 below, Seller hereby makes the following
representations and warranties with respect to the Property, provided that
Seller makes no representations or warranties with respect to the matters
disclosed in SCHEDULE 5.1 (the "Disclosure Schedule") or with respect to the
matters described or referred to in that certain letter from Xxxx Xxxx of
Purchaser to Seller dated March 19, 1999 and the attached memorandum from Xxxx
Xxxx to Seller dated March 19, 1999 (said letter and memorandum are collectively
referred to herein as "Purchaser's Due Diligence Letter"). Notwithstanding
anything to the contrary contained herein or in any document delivered in
connection herewith, except as specifically set forth in the following sentence
with respect to the dispute between Federated's and Seller, Seller shall have no
liability with respect to the items disclosed, described or referred to in the
Disclosure Schedule. Notwithstanding the foregoing, with respect to the matters
described in Paragraph A11 (such matters referred to herein as
"Broadway/Federated Insurance Dispute") of Purchaser's Due Diligence Letter,
Seller shall be responsible after Closing for any sums owed by Seller to
Federated's for pass-through charges paid by such tenant for rental income
coverage insurance and taxes prior to Closing and Seller shall indemnify
Purchaser and hold harmless and defend Purchaser from and against 9.6134125% of
all claims, damages, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees) arising out of the Broadway/Federated
Insurance Dispute with respect to sums, if any, that Seller may owe to such
tenant for the period prior to Closing.
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As used in this Paragraph 5.1 and elsewhere in this Agreement, the phrase "to
the knowledge of Seller" or phrases of similar import mean and are limited to
the actual knowledge of Seller's portfolio manager, Xxxxx Xxxx, Seller's local
manager having ongoing management responsibility with respect to the Property,
Xxxx Xxxxxx and Xxx Xxxxxxxxx, and not to any constructive knowledge of any of
the foregoing individuals or of Seller or any investment advisor to Seller, any
entity that is a partner or member in such investment advisor, or any affiliates
of any thereof, or to any trustee, beneficiary, member, officer, agent,
representative, or employee of Seller or such investment advisor, any such
constituent partner or member of any such affiliate. Purchaser hereby
acknowledges that Seller has named Xxxxx Xxxx, Xxxx Xxxxxx and Xxx Xxxxxxxxx as
those representatives constituting Seller's knowledge, in good faith, without
intent as to deceive Purchaser or to withhold information from Purchaser and
that Xxxxx Xxxx, Xxxx Xxxxxx and Xxx Xxxxxxxxx are familiar with the Property
and its operations. In addition, as used in this Paragraph 5.1 and elsewhere in
this Agreement, Seller's receipt of any written notice shall mean the actual
receipt of any written notice by Xxxxx Xxxx, Xxxx Xxxxxx and Xxx Xxxxxxxxx, or
by any officer of RREEF America L.L.C., a Delaware limited liability company
holding the position of Vice President or higher in the corporate headquarters
of Seller located in Chicago, Illinois. Seller hereby warrants and represents to
Purchaser as follows:
5.1.1 Pending Proceedings. With the exception of the items set
forth in the Disclosure Schedule or the Proforma Policy, Seller has received no
written notice of special assessment, condemnation, environmental, zoning or
other land use regulation proceedings, either pending or planned to be
instituted, with respect to the Property or any part thereof.
5.1.2 Status of Seller and Closing Documents. This Agreement has
been, and all the documents to be delivered by Seller to Purchaser at Closing
are or will be, duly authorized, executed, and delivered by Seller, are legal,
valid, and binding obligations of Seller, are enforceable in accordance with
their respective terms, and do not violate any provisions of any agreement to
which Seller or the Property is subject or bound. Seller is duly organized and
validly existing or duly qualified to transact business in the State in which
the Property is located.
5.1.3 Non-Foreign Status. Seller is not a "foreign person"
within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended, and that Seller will furnish to Purchaser, prior to Closing, an
affidavit in form satisfactory to Purchaser confirming the same.
5.1.4 Compliance with Laws. With the exception of the items set
forth in the Disclosure Schedule, Seller has received no governmental notice,
not heretofore corrected, alleging that the Property or its current uses are in
violation of any zoning, building, health, traffic, environmental, flood control
or all other applicable rules, regulations, codes, ordinances, or statutes of
any local, state and federal authorities and any other governmental authority
(collectively, the "Laws") asserting jurisdiction over the Property.
5.1.5 Service Contracts. With the exception of the equipment
leases and the Schindler service contract for passenger elevators listed in
SCHEDULE 5.1.5 attached hereto
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(which leases and contract Purchaser shall assume at Closing), and the items set
forth in the Disclosure Schedule or in Purchaser's Due Diligence Letter, the
service agreements and service contracts affecting the Property (including,
without limitation, any management, leasing, brokerage, services or maintenance
agreements) listed on SCHEDULE 5.1.5 are terminable at will by Seller without
further liability, upon not more than 30 days' prior written notice and which
shall be binding on Purchaser. With the exception of the items set forth in the
Disclosure Schedule or in Purchaser's Due Diligence Letter, Seller has received
no written notice of, and Seller has no knowledge of, any defaults by Seller or
any other party with respect to such service agreements, service contracts and
equipment leases affecting the Property.
5.1.6 No Default. The execution and delivery of this Agreement,
and consummation of the transaction described in this Agreement, does not and
will not constitute a default under any contract, lease, or agreement to which
Seller is a party or by which Seller is bound.
5.1.7 No Suits. Except as set forth in the Disclosure Schedule
or in Purchaser's Due Diligence Letter, and except for personal injury or
property damage actions for which there is adequate insurance coverage and where
the insurance carrier has accepted the tender of the defense without
reservation, there is no action, suit or proceeding pending or, to Seller's
knowledge, threatened, in writing against or affecting the Property or any
portion thereof, or relating to or arising out of the ownership, management or
operation of the Property, in any court or before or by any federal, state, or
municipal department, commission, board, bureau or agency or other governmental
instrumentality.
5.1.8 Environmental Condition. Each of the following
representations contained in this Paragraph 5.1.8 is wholly qualified and
limited by (a) any matters disclosed in any materials made available or
delivered to Purchaser by Seller pursuant to Paragraph 3 above or otherwise, (b)
any matters disclosed in any environmental reports or studies obtained by
Purchaser, and (c) any other matters of which Purchaser has actual knowledge or
obtains actual knowledge. Subject to the foregoing, Seller represents:
5.1.8.1 With the exception of items described or referred
to in the Disclosure Schedule or in Purchaser's Due Diligence Letter, and except
(i) in amounts customarily found in retail uses and in the other uses for which
the Property is suited and used and (ii) in compliance with applicable law, to
Seller's knowledge, Seller has not released, generated or handled Hazardous
Materials on the Property, and Seller has no knowledge of any release,
generation or handling of Hazardous Materials on the Property in violation of
applicable law. For the purposes hereof, "Hazardous Material" means any
substance, chemical, waste or other material which is listed, defined or
otherwise identified as "hazardous" or "toxic" under any federal, state, local
or administrative agency ordinance or law, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U. S.C.
xx.xx. 9601 et seq. and the Resource Conservation and Recovery Act, 42 U. S.C.
xx.xx. 6901 et seq., or any regulation, order, rule or requirement adopted
hereunder, as well as any formaldehyde, urea, polychlorinated biphenyls,
petroleum, petroleum product or by-product, crude oil, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel or mixture
thereof,
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radon, asbestos, and "source," "special nuclear" and "by-product" material as
defined in the Atomic Energy Act of 1985, 42 U. S.C. xx.xx. 3011 et seq.
5.1.8.2 Seller has not received any summons, citation,
directive, letter or other communication, written or oral, from the United
States Environmental Protection Agency or the State environmental protection
agency having jurisdiction over the Property.
5.1.9 Options. Except as disclosed in the Disclosure Statement
or the Other Sale Agreement, Seller has granted no options or rights of first
refusal to acquire any fee simple interest in the Property and no such options
are contained in the tenant leases delivered to Purchaser or in documents of
record disclosed in the title commitment.
5.1.10 Rent Roll. The information set forth on the rent roll
dated as of May 29, 1999 and attached hereto as SCHEDULE 5.1.10 is true and
accurate in all material respects and is complete with respect to the existence
of any and all occupancy arrangements and leases (including all amendments) (the
"Leases"). Seller has delivered to Purchaser true, complete and correct copies
of all the Leases (including all amendments). Seller certifies that attached
hereto as EXHIBIT B are the true, complete and correct copies of the Leases for
the following four tenants: (a) Macy's, (b) Bloomingdale's, (c) Gelson's Market
and (d) AMC.
5.1.11 Tenant Rights. There are no termination, extension,
cancellation, or expansion rights under any occupancy arrangements with respect
to the Property except as contained in the Leases. With the exception of items
described or referred to in the Disclosure Schedule or in Purchaser's Due
Diligence Letter, as of May 25, 1999, Seller has not received nor given any
written notice of, and Seller has no knowledge of, any defaults by any party
with respect to such Leases.
5.1.12 Leasing Commissions. Except as set forth in SCHEDULE
5.1.12, all leasing commissions due and payable as of the date hereof by Seller
have been paid or will have been paid on or before Closing, or Seller will
remain liable therefor.
5.1.13 Defects. With the exception of items listed in the
Disclosure Schedule or in Purchaser's Due Diligence Letter, Seller has not
received any written notice of any claims by tenants of the Property with
respect to any material defects in the Improvements.
5.1.14 No Employees. Purchaser has no obligation to hire, or to
cause any property management company engaged by Purchaser to hire, any person
presently employed in connection with the Property. Seller is not a party to any
collective bargaining agreement with respect to the Property.
5.1.15 Ownership of Personal Property. Seller owns the Personal
Property, free and clear of all liens and encumbrances except for the security
interests and other liens and interests created by the Xxxxxx Loan and the
Xxxxxx Loan Documents.
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5.1.16 Tenant Improvement Work. There is no tenant improvement
work scheduled to be performed by Seller, as landlord, six (6) months or more
after the Closing Date except as set forth in SCHEDULE 5.1.16 attached hereto
and made a part hereof.
5.1.17 Outstanding Leasing Commissions. There are no outstanding
leasing commissions in connection with existing Leases relating to renewal or
expansion options exercisable after the Closing Date.
5.1.18 Operating Statements. To Seller's knowledge and subject
to the items described or referred to in Purchaser's Due Diligence Letter, the
year-end cash and accrual operating statements for 1996, 1997 and 1998 delivered
pursuant to Paragraph 3.2.1 are true and correct in all material respects.
5.1.19 QPAM. Subject to Purchaser's representation set forth in
Section 5.2.2.3, Seller is acting as a Qualified Professional Asset Manager in
accordance with U. S. Department of Labor Prohibited Transaction Class Exemption
("PTCE") No. 84-14.
5.2 Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller as follows:
5.2.1 Status of Purchaser and Closing Documents. This Agreement
has been, and all the documents to be delivered by Purchaser to Seller at
Closing will be duly authorized, executed, and are or will be legal, valid, and
binding obligations of Purchaser, are or will be enforceable in accordance with
their respective terms, and do not and will not at Closing violate any
provisions of any agreement to which Purchaser is subject.
5.2.2 ERISA. The following representations and warranties with
respect to the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and the Internal Revenue Code of 1986, as amended ("Code") are
required to ensure that the purchase of the Property by Purchaser from Seller
will not, in and of itself, violate either Section 406(a)(1)(A) through (F) of
ERISA or Section 4975(c)(1)(A) through (E) of the Code. Notwithstanding anything
contained herein to the contrary, the representations and warranties contained
in this Paragraph 5.2.2 are made as of the date of this Agreement, will be
deemed to be remade by Purchaser, and to be true in all material respects, as of
Closing, and will survive the Closing. Accordingly, Purchaser hereby represents
and warrants the following:
5.2.2.1 No asset of the Purchaser constitute "plan assets"
and at the sale of the Property, the Property will not be a "plan asset," within
the meaning of U. S. Department of Labor Regulations Section 2510.3-101, with
respect to any "employee benefit plan" (within the meaning of Section 3(3) of
ERISA) which is subject to ERISA.
5.2.2.2 There is no employee benefit plan (within the
meaning of Section 3(3) of and subject to ERISA) that is invested in Seller and
with respect to which Purchaser is, or, within the last twelve (12) months, was
an appointing authority (as described in Section I(a) of PTCE 84-14).
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5.3 Limitations. Each of the representations and warranties of
Seller contained in Section 5.1: (i) is made as of the date of this Agreement;
(ii) will be deemed to be remade by Seller, and to be true in all material
respects, as of Closing (except that the representations made in the first
sentence of Section 5.1.10 and in the second sentence of Section 5.1.11 will be
made only as of the dates stated therein), subject to (a) any Exception Matters
(as defined below), (b) any matters described or referred to in the Disclosure
Schedule or in Purchaser's Due Diligence Letter, and (c) other matters expressly
permitted in this Agreement or otherwise specifically approved in writing by
Purchaser; and (iii) will survive for a period of one (1) year after the Closing
Date, as defined in Paragraph 7.1. Any claim that Purchaser may have at any time
against Seller for a breach of any such representation or warranty, whether
known or unknown, which is not asserted by notice from Purchaser to Seller
within such one (1) year period will not be valid or effective, and Seller will
have no liability with respect thereto, nor will Seller have any liability to
Purchaser for a breach of any representation or warranty unless such valid
claims for such breaches aggregate to the amount of Two Hundred Fifty Thousand
Dollars ($250,000), in which event the maximum amount of such valid claims shall
be actionable up to the aggregate amount of Two Million Seven Hundred Eleven
Thousand Five Hundred Ninety Seven and 63/100 ($2,711,597.63). The foregoing
maximum aggregate liability of Seller hereunder of Two Million Seven Hundred
Eleven Thousand Five Hundred Ninety Seven and 63/100 ($2,711,597.63)shall apply
to liabilities for breaches of representations and warranties hereunder and any
claims made under the Deed, the Xxxx of Sale, the Lease Assignment, Contracts
Assignment, Intangibles Assignment (all as hereinafter defined in Paragraph
7.6), and any and all other documents executed pursuant to Paragraph 7.6 or
otherwise pursuant to this Agreement and to any liabilities to Purchaser arising
out of or in any way related to this Agreement or the Property, whether known or
unknown, but not to the proration obligations of Seller under Paragraphs 7.2 and
8.26. Seller shall retain assets at the time of Closing (excluding the Nine
Hundred Sixty Thousand Dollars ($960,000) referred to in Paragraph 8.26 herein
and the liabilities to which it relates and the Fifty Thousand Dollars ($50,000)
referred to in Paragraph 8.29 and the liabilities to which it relates)
sufficient to give it a net worth of Three Million Dollars ($3,000,000) at the
time of Closing and shall not distribute those assets to Seller's beneficiaries
for a period of one (1) year after Closing; provided however, if Purchaser makes
a claim in written notice delivered to Seller as a result of a breach of Seller
under its obligations under this Agreement during such one (1) year period, then
Seller shall retain a reasonable amount of said assets beyond such one (1) year
period to cover the claim alleged by Purchaser until such claim is resolved. The
continued accuracy in all material respects of the aforesaid representations and
warranties is a condition precedent to Purchaser's obligation to close. As used
herein, the term "Exception Matter" shall refer to a matter disclosed to
Purchaser in writing or discovered by Purchaser before the Closing that would
make any of said representations and warranties of Seller untrue or incorrect in
all material respects at the time the same is made or as of Closing, including,
without limitation, matters disclosed to Purchaser by Seller or by any other
person, provided that Seller had no actual knowledge of such inaccuracy, as such
actual knowledge is defined in Paragraph 5.1, when the representation or
warranty was made on the execution of this Agreement. If a representation or
warranty becomes inaccurate because of an Exception Matter or if such warranty
or representation becomes inaccurate on or prior to Closing other than by reason
of Seller's default hereunder, Purchaser may, upon being notified of such
occurrence on or prior to Closing either (a) terminate this
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Agreement and neither party shall have any further rights or obligations
hereunder except as provided in Paragraphs 8.8, 8.15 and 8.17 below, or (b)
waive such matter and proceed to Closing, by notice to Seller given within ten
(10) days after Purchaser is notified of such occurrence, but in no event later
than Closing, which made any representations or warranties inaccurate, in which
event Seller shall have no liability with respect thereto. If Purchaser fails to
give any notice on or before the Closing Date, Purchaser will be deemed to have
elected to waive such matter and to proceed to Closing.
5.4 Condition of Property. Except as expressly set forth in this
Agreement, Seller has not made and does not hereby make any representations,
warranties or other statements as to the condition of the Property and Purchaser
acknowledges that at Closing it is purchasing the Property on an "AS IS, WHERE
IS" basis and without relying on any representations and warranties of any kind
whatsoever, express or implied, from Seller, its agents or brokers as to any
matters concerning the Property. Except as expressly set forth in this
Agreement, no representations or warranties have been made or are made and no
responsibility has been or is assumed by Seller or by any partner, officer,
person, firm, agent or representative acting or purporting to act on behalf of
Seller as to the condition or repair of the Property or the value, expense of
operation, or income potential thereof or as to any other fact or condition
which has or might affect the Property or the condition, repair, value, expense
of operation or income potential of the Property or any portion thereof. The
parties agree that all understandings and agreements heretofore made between
them or their respective agents or representatives are merged in this Agreement
and the Schedules and Exhibits hereto annexed, which alone fully and completely
express their agreement, and that this Agreement has been entered into after
full investigation, or with the parties satisfied with the opportunity afforded
for investigation, neither party relying upon any statement or representation by
the other unless such statement or representation is specifically embodied in
this Agreement or the Exhibits annexed hereto. Purchaser acknowledges that
Seller has requested Purchaser to inspect fully the Property and investigate all
matters relevant thereto and, with respect to the condition of the Property, to
rely solely upon the results of Purchaser's own inspections or other information
obtained or otherwise available to Purchaser, rather than any information that
may have been provided by Seller to Purchaser.
6. Closing Conditions. Purchaser's obligation to proceed to Closing is
conditioned upon Seller's performance of the following obligations and
satisfaction of the following conditions, in addition to all of its other
obligations and conditions contained in this Agreement, provided that Purchaser
may in its sole discretion elect to waive failure by Seller to perform any
particular obligation and proceed to close hereunder without deduction or offset
to the Purchase Price, or terminate this Agreement by written notice to Seller.
The failure of any of the conditions set forth in Paragraphs 6.1, 6.2 and 6.7
shall not constitute a default by the Seller for purposes of this Agreement. In
addition, if the condition set forth in Paragraph 6.3 is not satisfied by reason
of a change in facts or circumstances for which Seller is not at fault or
because of an Exception Matter, such failure of the condition shall not
constitute a default by the Seller for purposes of this Agreement. Purchaser's
sole remedy for such failure of the condition set forth in Paragraph 6.3 is set
forth in Paragraph 5.3.
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6.1 The Title Insurer is prepared to issue a policy of title
insurance in the form of the Pro Forma.
6.2 Seller has delivered to Purchaser not later than the date of
Closing, estoppel letters substantially in the forms of SCHEDULE 6.2 ("Required
Estoppel Form") or in form otherwise reasonably acceptable to Purchaser or
required by the tenant's lease, prepared by Seller and addressed to Purchaser,
from all Major Tenants (defined as all tenants occupying at least 5,000 rentable
square feet of the Property) and from other tenants, who together with the Major
Tenants from whom Seller has received estoppel letters occupy at least 80% of
the rentable square feet of the Property under lease as of the date hereof. All
estoppel letters must be dated no earlier than forty-five (45) days prior to the
Closing. An estoppel letter form, even though not in the Required Estoppel Form,
will be deemed reasonably acceptable to Purchaser if said letter is in the form
required by the tenant lease or if it contains the following information:
confirming rent and all other charges, security deposit, square footage and
termination date; that no rent has been paid more than one month in advance;
that the lease is in full force and effect and that a true and correct copy of
the lease with all amendments and modifications is attached; that the tenant has
no right of termination or extension other than as shown on the rent roll; and
that all work to be performed by Landlord has been performed and that the tenant
has no knowledge of any Landlord default. Notwithstanding anything to the
contrary contained herein, Purchaser acknowledges and agrees that the condition
contained in this Section 6.2 has been satisfied.
6.2.1 If Seller is unable to obtain the requisite estoppel
letters as described above, Seller may (but is not required to) substitute for
any unsigned estoppel letter an estoppel letter in the form attached as SCHEDULE
6.2.1, which may be completed, executed and delivered by Seller and warranted
and represented by Seller, provided that Seller may not substitute or provide
its own estoppel for any Major Tenants. Seller's representations and warranties
in the certificates will survive the Closing, subject to the dollar limitations
of Paragraph 5.3, until the earlier to occur of: (a) four (4) years after the
date of Closing, (b) the termination of the lease with respect to which the
estoppel executed by Seller was delivered, or (c) the substitution for the
Seller estoppel of an estoppel letter executed by the respective Tenant
substantially in the form required under Section 6.2. In the event that,
following the Closing Date, Seller obtains an estoppel letter complying with the
requirements of Paragraph 6.2 with respect to any lease for which Seller
delivered a substituted estoppel letter, Seller will deliver such estoppel
letter to Purchaser and, upon such delivery, Seller will be automatically
released from any liability or obligation under the substituted estoppel letter
previously delivered by Seller with respect to such lease.
6.2.2 If Seller is unable to obtain and deliver sufficient
tenant estoppel certificates as required under Paragraph 6.2, or if the letters
received under Paragraph 6.2 or substituted estoppels permitted under Paragraph
6.2.1 contain information or omissions unacceptable to Purchaser in its
reasonable discretion, then Seller will not be in default by reason thereof, but
Purchaser may, by notice given to Seller before the Closing, elect (i) to waive
said conditions and proceed with the Closing or (ii) to terminate this Agreement
and neither party shall have any further rights or obligations hereunder except
as provided in Paragraphs 8.8, 8.15 and 8.17 below. Seller hereby acknowledges
that the Purchaser's determination of whether
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information or omissions contained in the estoppels are unacceptable will be
reasonable if such incorrect information or omissions relate to rent, square
footage, or other key provisions of the lease which have an economic effect.
6.3 All of Seller's representations and warranties made pursuant to
Paragraph 5.1 remain true and correct in all material respects.
6.4 Seller has delivered all of the documents and other items
required pursuant to Paragraph 7.6 and has performed all other covenants,
undertakings and obligations required by this Agreement, to be performed or
complied with by Seller at or prior to Closing.
6.5 Seller has not voluntarily filed a petition under federal
bankruptcy law nor has an involuntary petition alleging an act of bankruptcy
been filed against Seller under federal bankruptcy law.
6.6 Intentionally Deleted.
6.7 That there has been no material adverse change with respect to
the Property (including, but not limited to, the bankruptcy of any of AMC,
Bloomingdale's, Macy's or Gelson's Market or the closing of any of the
Department Stores) from the Effective Date through the date of the Closing.
7. Closing.
7.1 Closing of Sale. The purchase and sale contemplated herein shall
close (herein referred to as the "Closing") at the office of Chicago Title
Company, or unless otherwise mutually agreed, on June 10, 1999, except as
otherwise extended pursuant to Paragraph 4.1 of this Agreement (the "Closing
Date"), time being of the essence. Seller and Purchaser have agreed that this
Agreement shall be executed and delivered concurrently with the Closing and upon
execution and delivery, Purchaser acknowledges and agrees that Purchaser has
reviewed and approved all matters with respect to the Property and that all of
Purchaser's conditions to Closing will be satisfied. Seller will deliver to
Purchaser a Grant Deed ("Deed") in the form of SCHEDULE 7.6.1 and other closing
documents required hereunder and Purchaser will cause payment of the Purchase
Price, subject to the prorations, credits and adjustments set forth in the
Closing Statement delivered pursuant to Paragraph 7.8.1.
7.2 Prorations, Adjustments.
(a) The parties will prorate taxes and assessments, annual license
and permit fees for permits that are assigned, interest on security deposits of
tenants, payments made under service contracts or equipment leases, rental and
other income (including, but not limited to, all contributions by tenants for
expenses and taxes and assessments), and operating or other expenses (including,
but not limited to, all contributions made by Seller to the Century City
Shopping Center Merchants Association (the "Association")) of the Property as of
12:01 a.m. on the date of Closing (i.e., Purchaser is entitled to the income and
responsible for the expenses of the day of Closing and thereafter with Seller
being entitled to the income and being responsible
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for the expenses prior to Closing); provided, however, that in the event the
Purchaser has not authorized release of the Purchase Price to Seller prior to
Noon California time on the date of Closing, then such prorations shall be made
as of 12:01 a.m. on the date after Closing and Seller will be entitled to the
income and shall be responsible for the expenses of the day of Closing.
Notwithstanding the foregoing and anything else to the contrary contained
herein, the prorations and adjustments in Paragraphs 7.2(a), 7.2(b), 7.2.1,
7.2.2 and 7.2.3 and Purchaser's rights and obligations with respect thereto and
other rights under said paragraphs shall be based upon Purchaser having a
90.3865875% undivided interest with respect thereto and shall be adjusted
accordingly. The parties intend that Purchaser's rights and obligations with
respect thereto when added to the rights and obligations of CCM pursuant to the
Other Sale Agreement shall equal and not exceed a 100% undivided interest
therein. Without limiting the foregoing, Seller and Purchaser have agreed that
solely with respect to base rental income received for the month of June,
initial estimated prorations for the date of Closing will be made on the Closing
Date for all such rental income received as of 12:01 a.m. of June 2, 1999. On or
before June 15, 1999, each party will deliver to the other party such other
party's share of base rental income received through June 13, 1999 and on or
before July 2, 1999, each party will deliver to the other party such other
party's share of base rental income received through June 30, 1999. All income
will be prorated on the basis of income actually received by Seller, as opposed
to income which is due or for which Seller has rendered invoices. Real estate
taxes and assessments, shall be prorated on an accrual basis. Seller hereby
agrees to be liable for all escape assessments of property taxes applicable to
the period prior to Closing, if any, (the "Escape Assessments") made during the
period within two (2) years after the Closing Date, provided Seller retains the
right to obtain appropriate reimbursement from the tenants of the Property
therefore. Seller agrees that any claim made by Purchaser with respect to Escape
Assessments shall not be subject to the monetary limitations set forth in
Section 5.3 herein. Any expenses, other than real estate taxes and assessments,
of the Property for any period prior to Closing which are payable directly by
tenants of the Property, will reduce the credit to Purchaser for such items
(i.e., no credit to Purchaser for expenses, other than real estate taxes and
assessments, payable directly by tenants). To the extent that the taxes or
assessments to be prorated are not known with certainty, such proration will be
based upon the most recent tax xxxx or county estimate, to be re-prorated upon
issuance of final bills. Seller also agrees to give Purchaser a credit against
the Purchase Price for all security deposits held pursuant to the leases and all
interest due thereon and shall assign to Purchaser any other tenant deposits
held by Seller. Security deposits in the form of letters of credit or
certificates of deposit shall either be reissued in the name of Purchaser at
Closing, or Seller will assign its rights therein to Purchaser at Closing, and
will reasonably cooperate with Purchaser post Closing, at no expense to Seller,
to facilitate the transfer to Purchaser. Seller shall use reasonable efforts to
cause all security deposits in the form of letters of credit or certificates of
deposit to be amended or reissued in the name of Purchaser as soon as possible
after the Closing, and Purchaser shall cooperate with Seller in such efforts.
Until delivery to Purchaser of the reissued or amended letters of credit or
certificates of deposit, in the event of an occurrence of an event of default
pursuant to the lease for which a letter of credit or certificate of deposit was
issued and upon delivery by Purchaser to Seller of a written statement
certifying on behalf of Purchaser that an event of default has occurred and said
event has not been cured or waived, then in that event, Seller will take all
commercially reasonable steps required under the original letter of credit or
certificate of deposit to claim all such amounts as Seller is entitled to claim
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thereunder as a result of said event of default. Seller will thereafter deliver
to Purchaser any and all sums paid by the issuer of the original letter of
credit or certificate of deposit pursuant to the original letter of credit or
certificate of deposit as a result of Seller taking such steps. Upon delivery to
Purchaser of the reissued or amended letter of credit or certificate of deposit,
Seller's obligations with respect to such letter of credit or certificate of
deposit shall immediately terminate, and, from and after such delivery of the
reissued or amended letter of credit or certificate of deposit, Purchaser shall
indemnify Seller and hold harmless and defend Seller from and against any and
all claims, damages, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) arising out of the letter of credit or
certificate of deposit. Seller and Purchaser agree that Seller will receive a
payment at Closing from Purchaser and CCM jointly in the amount of One Hundred
Twenty Five Thousand and 00/100 Dollars ($125,000) for the turnover of expansion
space pursuant to the lease by and between Seller and Pottery Barn if Seller has
not been previously paid such amount by Pottery Barn prior to Closing. Purchaser
will pay all amounts subsequently received by it from tenants attributable to
Seller's period of ownership, but not collected as of the date of Closing, to
Seller within twenty (20) days after the end of the calendar month in which
Purchaser receives the same; provided that amounts received from tenants by
Purchaser will be first applied to Purchaser's cost of collection, then to
current charges, and the balance will be applied to payments due to Seller. To
the extent Seller has received amounts from tenants for 1999 operating expenses
and taxes which are known as of the date of Closing to be in excess of amounts
paid by Seller with respect to such expenses and taxes, Seller will credit such
excess to Purchaser at Closing, and Seller will provide adequate backup
information in connection with such credit.
(b) With respect to the matter described in B2 ("Credit Allocation
Agreement") of Purchaser's Due Diligence Letter, Purchaser shall, at Closing:
(i) assume all obligations with respect thereto for the period from and after
Closing, and Seller shall have no further obligations or liabilities with
respect to such matter for the period from and after Closing and (ii) except for
any sums owing to the tenant with respect to the period of Seller's ownership of
the Property, Purchaser shall indemnify Seller and hold harmless and defend
Seller from and against 90.3865875% of any and all claims, damages, liabilities,
losses, costs and expenses (including, without limitation, reasonable attorneys'
fees) arising out of such matter from and after the Closing Date. With respect
to claims of Xxxxxxx Xxxx against Century City Shopping Center (as set forth in
Case No.: SCO52340, Los Angeles County Superior Court), Seller shall indemnify
Purchaser and hold harmless and defend Purchaser from and against 90.3865875% of
any and all claims, damages, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees) arising out of such claims. With
respect to potential claims against Purchaser by Carlton Hair International, a
tenant of the Property alleging unfair competition by Kristy's, another tenant
of the Property, Seller shall indemnify Purchaser and hold harmless and defend
Purchaser from and against 90.3865875% of any and all claims, damages,
liabilities, losses, costs and expenses (including, without limitation
reasonable attorneys' fees) arising out of such claims to the extent arising out
of facts and circumstance alleged to have occurred during the period of Seller's
ownership of the Property. With respect to the matters described in B3 (entitled
"Gelson's Recapture of Valet Costs") of the Purchaser's Due Diligence Letter,
Purchaser shall assume all pre- and post-Closing obligations of the Seller, and
indemnify Seller and hold harmless and defend Seller from and against
90.3865875% of any and all claims,
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damages, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) arising out of such matters, and Seller
shall have no further obligations or liabilities with respect to such matter
from and after Closing. With respect to the matters described in Paragraph A8
(entitled "Recovery Methodology") and A9 (entitled "Garage Expenses through
CAM") of the Purchaser's Due Diligence Letter, (i) Seller shall remain
responsible for obligations with respect thereto relating to the period of
Seller's ownership of the Property, and Seller shall indemnify Purchaser and
hold harmless and defend Purchaser from and against 90.3865875% of all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) arising out of such matters prior to the date of
Closing, and (ii) Purchaser shall assume all obligations with respect thereto
for the period from and after the Closing and Seller shall have no further
obligations or liabilities with respect to such matters from and after Closing,
and Purchaser shall indemnify Seller and hold harmless and defend Seller from
and against 90.3865875 of any and all claims, damages, liabilities, losses,
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of such matters. The provisions of this Paragraphs 7.2(a) and (b)
shall survive Closing.
7.2.1 The following is the general principle under which Seller
and Purchaser shall allocate between each other the amounts collected from
tenants for taxes and assessments and other expenses incurred during 1999: such
amounts collected from tenants shall be allocated between Seller and Purchaser
in the ratio of the 1999 expenses which were borne by Seller and Purchaser,
respectively. For example, if twenty-five percent of the electricity expenses
for 1999 are incurred during Seller's period of ownership of the Property during
1999, then Seller shall be allocated twenty-five percent of the amounts
collected from tenants for such electricity expenses, regardless of the actual
time period that Seller owned the Property during 1999. Similarly, if a tenant
overpays for such 1999 expenses, Purchaser and Seller shall be responsible to
pay the refund to the tenant (and to make such payments to each other) in such
amounts as will leave Purchaser and Seller each in the position of having
received collections from the tenant equal to, and not exceeding, such expenses
borne by Purchaser or Seller, as the case may be. Seller and Purchaser hereby
agree to use their reasonable efforts to calculate prorations (including real
estate tax and assessments prorations) so as to permit settlement thereof on the
Closing Date, provided, however, that if any of such prorations cannot be
calculated accurately on the Closing Date, then the same will be calculated as
soon as reasonably practicable after the Closing Date, but in no event later
than the "Due Date" which is the later to occur of (i) thirty (30) days after
Seller receives its final audited cost certification for the year in which
Closing occurs, (ii) March 31 of the year following the year in which Closing
occurs, or (iii) as to the real estate tax and assessments, prorations, thirty
(30) days after the issuance of the final tax and assessment bills, and either
party owing the other party a sum of money based on such subsequent proration(s)
shall promptly pay said sum to the other party, together with interest thereon
at the rate of two percent (2%) per annum over the "prime rate" (as announced
from time to time in the Wall Street Journal) from the Due Date to the date of
payment if payment is not made within thirty (30) days after delivery of a xxxx
therefor together with reasonable back-up documentation. In the event tenants of
the Property are billed for their proportionate share of taxes and assessments
or expenses for amounts in excess of amounts previously paid by such tenants
which are attributable to the period of Seller's ownership of the Property,
Purchaser shall, to the extent such xxxxxxxx are actually collected, remit a
portion
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thereof to Seller in accordance with the principles of proration set forth
herein. To the extent such real estate taxes and assessments payable directly by
tenants and prorated at Closing are paid by such tenants, upon evidence of such
taxes and assessments paid directly by tenants, such taxes and assessments
prorated at Closing shall be remitted to Seller. The obligations of the parties
under this Paragraph 7.2.1 will survive Closing.
7.2.2 In the event that any tenant of the Property is obligated
to pay percentage rent based upon any period (whether monthly, quarterly,
annually, or otherwise) in which the date of Closing occurs, Purchaser shall,
within the later of (a) thirty (30) days after receipt of such payment with
respect to such period, or (b) March 31, 2000, remit to Seller that portion
which is equal to the number of days which elapsed between the commencement date
of the period in question for each such tenant, and the Closing Date, and the
total number of days in such period, less a pro rata share of any collections by
Seller for such period based on estimated payments by a tenant. If Seller has
received payments of percentage rent based on any period in which the date of
Closing occurs, in excess of Seller's share as calculated as set forth above in
this Paragraph 7.2.2, it shall promptly pay such excess to Purchaser. Seller
retains the right to collect any delinquent rents or other sums from tenants
after Closing, provided that Seller shall not have right to terminate any lease
after Closing or exercise any other remedy except xxx for damages from such
tenants. The obligations of the parties under this Paragraph 7.2.2 will survive
Closing.
7.3 Proration of Service Charges. To the extent Seller, as opposed
to tenants, is responsible for payment of utility charges, Seller will attempt
to have utility meters read as of the Closing Date. To the extent that this is
not possible and to the extent that any other obligation for continuing services
is incurred, and statements are rendered for such services covering periods both
before and after the Closing Date, the amount will be estimated and prorated on
the Closing Date on a per-diem basis. Seller will forward any such statements
which it receives to Purchaser and Purchaser will pay the same. If the estimated
proration made on the Closing Date under this Paragraph 7.3 is incorrect based
on the actual statements received for utility charges, the Purchaser or the
Seller, as the case may be, shall make a corrective payment to the other on the
Due Date. Purchaser acknowledges that certain tenants have the right, under the
Leases, to audit the books and records of the Property with respect to taxes,
utilities, common area charges, and other related charges relating to the period
of Seller's ownership of the Property. Accordingly, as set forth in Section 8.25
herein, Purchaser agrees to allow Seller the right to audit the books and
records related to the period of Seller's ownership of the Property after the
Closing Date and further agrees to cooperate with Seller, to the fullest extent
possible, in order for Seller to settle any claims or discrepancies with respect
to such charges. The provisions of this Paragraph 7.3 shall survive the Closing.
7.3.1 Employees. As set forth in Paragraph 5.1.14, Purchaser has
no obligation to hire, or to cause any property management company engaged by
Purchaser to hire, any person presently employed in connection with the
Property. All employees of any affiliate of Seller performing services at the
Property shall be terminated by Seller on or prior to the Closing Date and
Seller shall fully pay such employees prior to the Closing Date all accrued
salaries, wages, bonuses and benefits (including vacation, personal days and
sick pay) pursuant
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to Seller's normal procedures with respect to such payments, and neither
Purchaser nor the management company engaged by Purchaser shall be obligated to
rehire such employees or to be responsible or obligated for any such salaries,
wages, bonuses and benefits. However, if the management company engaged by
Purchaser elects to hire any such employee, notifies Seller thereof prior to the
Closing Date, and subsequently terminates such employee within ninety (90) days
after the Closing, Seller shall, within thirty (30) days after Purchaser's
notice of such employee termination, pay to any such employee in accordance with
Seller's normal operating procedures, the severance pay with respect to base
salary which such employee would have received if the management company
employed by Purchaser did not hire the employee; provided, however, Seller shall
be under no obligation to (i) provide Consolidated Omnibus Budget
Reconsideration Act (COBRA) coverage for such employees, or (ii) make any other
payment to or provide any other benefits to any such employee.
7.4 Closing Costs. Purchaser shall pay (i) all of the Title
Insurer's escrow and/or closing fees (including any payment to the closing
officer of the Title Insurer as may be the local custom at the Closing), (ii)
the incremental costs of obtaining the ALTA title insurance policy, extended
coverage, (iii) the cost of any endorsements to the title policy required by
Purchaser, (iv) all costs of Purchaser's physical inspections of the Property
(environmental, engineering) and other due diligence activities, (v) the cost of
the survey and (vi) any recording charges or other charges in connection with
the Xxxxxx Loan. Seller shall pay (i) all transfer taxes and recording fees
applicable to the sale and (ii) the costs of obtaining a CLTA title insurance
policy. Except as otherwise provided herein or in Paragraph 8.9, each party is
responsible for its own attorneys' and other professional fees. All other
closing costs shall be payable by the Purchaser. Seller and Purchaser shall
agree upon a closing statement reflecting the prorations and adjustments set
forth herein to be made at Closing. The obligation of Seller to pay the transfer
taxes set forth herein shall survive Closing.
7.5 Possession. Subject to the rights of tenants pursuant to leases
of the Property delivered to Purchaser and the other exceptions to title shown
on the Proforma Policy, Seller will deliver possession of a 90.3865875%
undivided interest in the Property and of any conveyed 90.3865875% undivided
interest in the personal property to the Purchaser on the date of Closing and
Seller will thereupon deliver to Purchaser, to the extent in Seller's
possession, the originals of all leases for tenants of the Property, all
correspondence with tenants, tenant/lease files, operating statements, plans and
specifications, supplies and advertising materials, booklets, keys, and other
items used in connection with operation of the Property.
7.6 Seller's Closing Documents. At the Closing, Seller will deliver
to Purchaser:
7.6.1 a Deed for the CCM Interest in the form of SCHEDULE 7.6.1;
7.6.2 an affidavit in customary form that Seller is not a
"foreign person" within the meaning of Section 1445(e) of the Internal Revenue
Code of 1986, in the form of SCHEDULE 7.6.2;
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7.6.3 such affidavits as are customarily required by Title
Insurer and reasonably approved by Seller in connection with issuance of the
owner's title insurance policy;
7.6.4 an assignment of leases in the form of SCHEDULE 7.6.4
("Lease Assignment");
7.6.5 an assignment of contracts and warranties in the form of
SCHEDULE 7.6.5 ("Contracts Assignment");
7.6.6 an assignment of intangibles in the form of SCHEDULE
7.6.6 ("Intangibles Assignment");
7.6.7 letters, in form to be supplied by Purchaser and
reasonably approved by Seller, to the tenants at the Property, instructing the
tenants to pay rent to Purchaser and to recognize Purchaser as landlord under
their leases; and letters, in form to be supplied by Purchaser and reasonably
approved by Seller, to such other persons and entities as may be determined by
Purchaser, giving notification of the sale to Purchaser including, without
limitation, notices to vendors under the service contracts;
7.6.8 a xxxx of sale conveying all personal property of Seller,
if any, located at the Property and used in connection with the maintenance or
operation thereof, in the form of SCHEDULE 7.6.8;
7.6.9 [Intentionally Deleted];
7.6.10 [Intentionally Deleted];
7.6.11 estoppel certificates, to the extent obtained pursuant to
Paragraph 6.2 herein;
7.6.12 evidence of Seller's authority to enter into and
consummate all of the transactions contemplated in this Agreement;
7.6.13 all keys in Seller's possession or control (including
keys held by any property manager or security service engaged by Seller) with
respect to the Property; and originals, to the extent in Seller's possession or
control (including those held by any property manager engaged by Seller), of
Leases and any services contracts assigned to and accepted by Purchaser;
7.6.14 all books and records with respect to the Property,
including, but not limited to, leasing files and records with respect to common
area maintenance charges and tax charges; provided, however, that Seller may
retain copies of such books and records for its own files;
7.6.15 all other documents, instruments or writings which may be
reasonably required to consummate the transactions contemplated herein; and
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7.6.16 California 590 Certificate.
7.7 Purchaser's Closing Documents. As part of the Closing, Purchaser
will deliver to Seller:
7.7.1 good federal funds in an amount equal to the Purchase
Price plus or minus prorations as provided herein and plus funds sufficient to
pay Purchaser's closing costs hereunder;
7.7.2 such affidavits, with respect to Purchaser's own
activities in connection with the Property, as are customarily required by Title
Insurer in connection with issuance of the owner's title insurance policy;
7.7.3 executed counterpart of the Lease Assignment;
7.7.4 executed counterpart of the Contracts Assignment;
7.7.5 executed counterpart of the Intangibles Assignment;
7.7.6 Natural Hazard Disclosure Statements in the forms
delivered by Seller's broker and Seller; and
7.7.7 all other documents, instruments or writings which may be
reasonably required to consummate the transactions contemplated herein.
7.8 Joint Deliveries. At the Closing, Seller and Purchaser will
execute and deliver to each other the following documents in proper form:
7.8.1 Closing Statement;
7.8.2 City, county and state transfer tax declarations or
similar instruments;
7.8.3 All other documents, instruments or writings which may be
reasonably required to consummate the transactions contemplated herein; and
7.8.4 The Release and Assumption Agreement.
8. Miscellaneous.
8.1 Modifications. This Agreement can be amended only in writing
signed by both of the parties.
8.2 Casualty and Condemnation. Seller agrees to keep its customary
replacement cost insurance covering the Property in effect until the Closing. If
between the Effective Date and the Closing the improvements on the Property are
destroyed or damaged to the extent that repairs cost in excess of One Million
and No/100 Dollars ($1,000,000) in the
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estimate of an architect or contractor selected by Seller and reasonably
acceptable to Purchaser, or if condemnation proceedings are commenced against
the Property, Purchaser may (i) terminate this Agreement and neither party shall
have any further rights or obligations hereunder except as provided in
Paragraphs 8.8, 8.15 and 8.17, or (ii) elect to accept a 90.3865875% undivided
interest in the Property in its then condition, in which event Seller will pay
or assign to Purchaser at Closing a 90.3865875% interest in all proceeds of
insurance (plus the applicable deductible) or condemnation awards payable to
Seller by reason of such damage or condemnation. In the event Purchaser makes
neither election by the earlier of (a) Closing or (b) ten (10) days after being
advised of such casualty or condemnation, Purchaser will be deemed to have
elected to accept a 90.3865875% undivided interest in the Property in its then
condition. In the event of any other damage to the Property, Seller may either
repair the damage or give Purchaser a reduction in the Purchase Price equal to
the cost of repairing such damage, as certified by an architect or contractor
selected by Seller and reasonably acceptable to Purchaser. In the event of any
damage where Purchaser does not have the right to terminate and Seller elects to
repair such damage, then Purchaser may elect to either: (x) have the Closing
Date delayed for the number of days required to repair the damage, which Seller
agrees to do in accordance with all Laws and in a good and workmanlike manner,
or (z) proceed to Closing without Seller performing such repairs in which event
Seller will assign to Purchaser at Closing a 90.3865875% interest in all
proceeds of insurance (and credit Purchaser for the amount of the applicable
deductible). At all times from the Effective Date through the Closing Date,
Seller shall, at its expense, maintain its existing casualty insurance and
rental income loss insurance with respect to the Property, with such changes
thereto that Seller is making on its blanket insurance coverage for other
properties.
8.3 Time of Essence. Time (including, without limitation, the date
specified as the Closing Date) is of the essence of this Agreement.
8.4 Notices. All notices required or permitted hereunder must be in
writing and shall be served on the parties at the following address with the
understanding by both parties that the telephone numbers stated herein are for
the purpose of convenience only and do not constitute a sufficient form of
providing notice:
If to Purchaser: Urban Shopping Centers, L. P.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxx and
Xxxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000 (Xxxx)
(000) 000-0000 (Xxxxxxx)
Facsimile: (000) 000-0000
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with a copy to: Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Seller: RREEF USA FUND-II
c/o The RREEF Funds
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The RREEF Funds
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Mr. Xxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The RREEF Funds
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx Bittman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to: Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notices may be sent by (a) a nationally recognized overnight courier,
in which case notice will be deemed delivered one business day after deposit
with such courier; (b) facsimile transmission, in which case notice will be
deemed delivered upon electronic verification that transmission to recipient was
completed, provided that notices sent by facsimile transmission on a day other
than a business day shall be deemed given on the first business day following
the date of transmission; or (c) personal delivery. The above addresses and
facsimile numbers may be changed by notice to the other party; provided that no
notice of a change of address or facsimile number will be effective until actual
receipt of such notice.
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8.5 Parties Bound. Neither party may assign this Agreement
without the prior written consent of the other, and any such prohibited
assignment shall be void. Subject to the foregoing, this Agreement is binding
upon and inures to the benefit of the respective legal representatives,
successors, assigns, heirs, and devisees of the parties. For the purposes of
this Paragraph, the term "Affiliate" means (a) an entity that directly or
indirectly controls, is controlled by or is under common control with the
Purchaser; or (b) an entity at least fifty percent (50%) of whose economic
interest is owned by Purchaser; and the term "control" means the power to direct
the management of such entity through voting rights, ownership or contractual
obligations. No such assignment permitted pursuant to this Paragraph 8.5 shall
excuse or relieve Purchaser from full performance of its obligations hereunder.
8.6 Governing Law. The performance and interpretation of this
Agreement is controlled by the law of the State in which the Property is
located.
8.7 Continuation Until Closing, Leasing.
8.7.1 Between the Effective Date and the Closing, Seller agrees
to keep and perform all of the obligations to be performed by landlord under any
Leases and Laws, provided that Seller shall have no obligation to make any
capital repairs or replacements to the Property. Seller agrees to operate the
Property in the same manner as before the making of this Agreement, the same as
though Seller were retaining the Property, provided that Seller shall have no
obligation to make any capital repairs or replacements to the Property. After
the Effective Date, Seller agrees not to convey the Property, nor to grant any
liens or easements with respect thereto.
8.7.2 After the Effective Date, Seller agrees not to permit or
consent to any new leases, amendments, extensions, renewals (other than pursuant
to tenant renewal options, if any), assignments of Leases or subleases without
first submitting them to Purchaser for Purchaser's approval, which approval
Purchaser agrees not to unreasonably withhold or delay. Purchaser will have five
(5) business days to notify Seller of its disapproval of such leases,
amendments, extensions, renewals, assignments or subleases, and in the event
that Purchaser does not so notify Seller, the leases, amendments, extensions,
renewals, assignments or subleases, as the case may be, will be deemed approved.
Notwithstanding the foregoing, Seller may continue its ongoing operations with
respect to seasonal cart and kiosk rentals and promotions without Purchaser's
approval.
8.8 Brokers. Except as provided in Paragraph 8.11 below, Seller
represents and warrants to Purchaser, and Purchaser represents and warrants to
Seller, that no broker or finder has been engaged by it, respectively, in
connection with the transaction contemplated by this Agreement. In the event of
a claim for broker's or finder's fees or commissions in connection with the
transaction contemplated by this Agreement, then Seller shall protect and hold
harmless Purchaser from the same if it shall be based upon any agreement alleged
to have been made by Seller, and Purchaser shall protect and hold harmless
Seller from the same if it shall be based upon any agreement alleged to have
been made by Purchaser. The
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indemnification obligations under this Paragraph 8.8 shall survive the Closing
or any earlier termination of this Agreement.
8.9 Attorneys' Fees. Notwithstanding any limitation on remedies or
amounts recoverable set forth elsewhere herein, if any action is brought by
either party against the other party, the party in whose favor final judgment is
entered will be entitled to recover court costs incurred and reasonable
attorneys' fees at trial, upon appeal and on any petition for review.
8.10 Remedies for Non-Performance. Purchaser's remedies regarding
breach of warranty or representation by Seller are governed by Paragraph 5.3
hereof. Notwithstanding anything to the contrary contained herein, if the
Closing does not occur on or before June 10, 1999, neither party shall have any
further rights or obligations hereunder and this Agreement shall be null and
void.
8.11 Brokers Commission. If the Closing occurs, Seller agrees to pay
the brokerage commission due CB Xxxxxxx Xxxxx, pursuant to a separate agreement.
8.12 Survival of Representations and Warranties, Covenants. Seller's
representations and warranties contained herein and not specifically described
in Paragraph 5.1 and claims, damages or injury for the breach thereof will
survive the Closing for a period of one (1) year. Purchaser must give Seller
written notice of any claim it may have against Seller for any breach within one
(1) year after the date of Closing. Any claim which Purchaser may have which is
not asserted within the one (1) year period will not be valid or effective and
Seller will have no liability with respect thereto. All covenants hereunder
which, by their terms, are intended to survive Closing will survive Closing
hereunder. Otherwise, all other covenants hereunder shall not survive Closing.
8.13 Merger of Prior Agreements. This Agreement constitutes the
entire agreement between the parties with respect to the purchase and sale of a
90.3865875% undivided interest in the Property and supersedes all prior
agreements and understandings between the parties hereto relating to the subject
matter of this Agreement.
8.14 Invalidity of Provisions. In the event any provisions of this
Agreement are declared invalid or are unenforceable for any reason, such
provisions shall be deleted from such document and shall not invalidate any
other provision.
8.15 Entry and Indemnity. In connection with any entry by Purchaser,
or its agents, employees, consultants, investors, advisors, affiliates or
contractors (collectively "Purchaser's Disclosees") onto the Property, Purchaser
shall give Seller reasonable advance notice of such entry and shall conduct such
entry and any inspections in connection therewith so as to minimize, to the
greatest extent possible, interference with Seller's business and the business
of Seller's tenants and otherwise in a manner reasonably acceptable to Seller.
Without limiting the foregoing, prior to any entry to perform any on-site
testing, Purchaser shall give Seller notice thereof, including the identity of
the company or persons who will perform such testing and the proposed scope of
the testing. Seller shall approve or disapprove the scope and methodology of
such proposed testing within two (2) business days after receipt of such notice,
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such approval may be given or withheld in Seller's sole discretion. Seller's
failure to notify Purchaser of its approval or disapproval shall be deemed to be
Seller's disapproval thereof. If Purchaser or Purchaser's Disclosees take any
sample from the Property in connection with any such approved testing, upon
Seller's request, Purchaser shall provide to Seller a portion of such sample
being tested to allow Seller, if it so chooses, to perform its own testing.
Seller or its representative may be present to observe any testing or other
inspection performed on the Property. Upon Seller's request, Purchaser shall
promptly deliver to Seller copies of any reports relating to any testing or
other inspection of the Property performed by Purchaser or Purchaser's
Disclosees. Purchaser shall maintain, and shall assure that its contractors
maintain, public liability and property damage insurance in amounts (public
liability in a combined single limit of not less than $5,000,000) and in form
and substance adequate to insure against all liability of Purchaser and
Purchaser's Disclosees arising out of any entry or inspections of the Property
pursuant to the provisions hereof, and Purchaser shall provide Seller with
evidence of such insurance coverage upon request by Seller including evidence
that Seller is an additional insured on the public liability policy. Purchaser
shall protect, defend and hold Seller harmless from and against any costs,
damages, liabilities, losses, expenses, liens or claims (including, without
limitation, reasonable attorney's fees) arising out of or relating to any liens
or claims of liens or to damage to property or injury to persons on account of
any entry on the Property by Purchaser and Purchaser's Disclosees in the course
of performing the inspections, testings or inquiries provided for in this
Agreement, including without limitation damage to the Property or release of
hazardous substances or materials onto the Property, excluding, however, any
costs incurred by Seller in supervising Purchaser's testing. The foregoing
provisions contained in this Paragraph 8.15 are collectively herein referred to
as the "Protection Provision." The foregoing Protection Provision shall survive
beyond the Closing, or if the sale is not consummated, beyond the termination of
this Agreement.
8.16 Release. Except to the extent of the representations and
warranties of Seller expressly set forth in this Agreement and except for
Seller's obligations set forth in Paragraphs 7.2(b), 8.26 and 8.29, but
otherwise notwithstanding any other provision of this Agreement to the contrary,
Purchaser, on behalf of itself and its successors and assigns, waives its right
to recover from, and forever releases and discharges, Seller, Seller's
affiliates, Seller's investment manager, the partners, trustees, shareholders,
beneficiaries, members, directors, officers, employees and agents of each of
them, and their respective heirs, successors, personal representatives and
assigns (collectively, the "Seller Related Parties"), from any and all demands,
claims, legal or administrative proceedings, losses, liabilities, damages,
penalties, fines, liens, judgments, costs or expenses whatsoever (including,
without limitation, attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, which may arise on account of or in
any way be connected with (i) those items described or referred to in
Purchaser's Due Diligence Letter, or (ii) the physical condition of the
Property, including, without limitation, the environmental condition thereof, or
any law or regulation applicable thereto, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (42 U. S.C. Sections 9601 et seq.), the Resources Conservation and
Recovery Act of 1976 (42 U. S.C. Section 6901 et seq.), the Clean Water Act (33
U. S.C. Section 466 et seq.), the Safe Drinking Water Act (14 U. S.C. Sections
1401-1450), the Hazardous Materials Transportation Act (49 U. S.C. Section 1801
et seq.), the
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Toxic Substance Control Act (15 U. S.C. Sections 2601-2629), the California
Hazardous Waste Control Law (California Health and Safety Code Section 25100, et
seq.), the Xxxxxx-Cologne Water Quality Control Act (California Water Code
Section 13000, et seq.), and the Safe Drinking Water and Toxic Enforcement Act
of 1986 (California Health and Safety Code Section 25249.5, et seq.) and any
other applicable federal, state or local laws. Notwithstanding the foregoing,
Purchaser acknowledges and agrees that the release contained in this Paragraph
8.16 is binding on the Purchaser. However, Seller acknowledges that Purchaser
makes no representation or warranties as to whether this release is in fact
binding upon any third parties who subsequently purchase the Property from the
Purchaser. Notwithstanding anything contained herein to the contrary, if a third
party (including a governmental agency) asserts an obligation or liability
against Purchaser arising out of matters (x) described in clause (ii) of this
Paragraph and not described or referred to in Purchaser's Due Diligence Letter,
and (y) arising out of events occurring during Seller's period of ownership of
the Property, as to which such third party would also have a claim against
Seller, then Purchaser may seek to join Seller in any administrative or legal
proceeding relating to such third party claim.
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In connection with Section 8.16 above, Purchaser expressly waives the
benefits of Section 1542 of the California Civil Code, which provides as
follows: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
____________ Purchaser's Initials.
The provisions of this Paragraph 8.16 shall survive the Closing.
8.17 Confidential Information. Purchaser hereby acknowledges
and agrees that all information furnished by Seller to Purchaser or obtained by
Purchaser in the course of Purchaser's investigation of the Property, or in any
way arising from or relating to any and all studies or entries upon the Property
or in any way relating to Seller and the transactions contemplated by the
parties shall be treated as confidential by Purchaser, and Purchaser shall
instruct Purchaser's Disclosees that such information is confidential. Purchaser
understands, acknowledges and agrees not to disclose any of the contents or
information contained in any information provided by Seller, any reports or
studies made in connection with Purchaser's investigation of the Property or
results thereof, in any form whatsoever (including, but not limited to, any oral
information received by Purchaser during the course of Purchaser's inspection of
the Property), to any party other than Seller, Seller's agents or
representatives, Purchaser's Disclosees (inclusive for purposes of this
Paragraph of CCM, Purchaser's members, directors, officers, employees,
representatives, attorneys, consultants, advisors, partners or potential equity
investors or institutional lenders) Purchaser's assignees or the agents of such
assignees, without the prior express written consent of Seller, except as may be
required by law or court order. Without limiting the generality of the
foregoing, any press release or other public disclosure regarding this Agreement
or any transactions contemplated herein, and the wording of same, must be
approved in advance by both parties. The parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to Purchaser's Disclosees, or as required by law. No party will
make any public disclosure of the specific terms of this Agreement, except as
required by law. In connection with the negotiation of this Agreement and the
preparation for the consummation of the transactions contemplated hereby, each
party acknowledges that it will have access to confidential information relating
to the other party. Each party shall treat such information as confidential,
preserve the confidentiality thereof, and not duplicate or use such information,
except to Purchaser's Disclosees. In the event of the termination of this
Agreement for any reason whatsoever, Purchaser will return to Seller, at
Seller's request, all documents, work papers, and other material (including all
copies thereof) obtained from Seller in connection with the transactions
contemplated hereby, and each party shall use its good faith efforts, including
instructing its employees and others who have had access to such information, to
keep confidential and not to use any such information. The provisions of this
Paragraph 8.17 will survive any termination of this Agreement, and will not be
subject to the limitation set forth in Paragraph 8.12. Notwithstanding the
foregoing, if the Closing occurs, Purchaser and Seller shall be under no further
obligations under this Paragraph 8.17.
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8.18 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event,
after which the designated period of time begins to run, is not to be included
and the last day of the period so computed is to be included, unless such last
day is a Saturday, Sunday or legal holiday, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday (i.e., a day on which federally chartered banks are not open for
business in Los Angeles, California). The last day of any period of time
described herein shall be deemed to end at 5 p.m. Los Angeles, California time
on the last day of such period of time. All days other than Saturdays, Sundays
and legal holidays in which national banks are closed in Los Angeles, California
are business days hereunder.
8.19 Facsimile Signatures. Executed facsimile copies of this
Agreement or any amendments hereto shall be binding upon the parties, and
facsimile signatures appearing hereon or on any amendments hereto shall be
deemed to be original signatures.
8.20 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by Seller to
Purchaser at Closing, Seller agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of a 90.3865875% undivided interest in the
Property to Purchaser.
8.21 Effective Date. Delivery by a party of a copy of the
fully-executed Agreement by facsimile transmission, followed by a
manually-signed copy thereof delivered the next business day after transmission
of such copy, shall constitute acceptance by such party as of the date of the
facsimile transmission. The date on which a fully-executed copy of this
Agreement is delivered by both Seller and Purchaser is referred to herein as the
"Effective Date."
8.22 Seller's Exculpation Clause. The obligations of Seller
contained herein are intended to be binding only on the property of the trust
party to this Agreement of Purchase and Sale and shall not be personally binding
upon, nor shall any resort be had to the private properties of, any of the
trustees, beneficiaries, shareholders, partners, members, managers, directors,
officers, employees or agents of Seller or any affiliates thereof, or any
trustees, beneficiaries, investment managers, any general partners thereof, or
any employees or agents of the trustees or investment managers. All documents to
be executed by Seller shall also contain the foregoing exculpation.
8.23 Purchaser's Exculpation Clause. The obligations of Purchaser
contained herein are intended to be binding only on the property of Purchaser
and shall not be personally binding upon, nor shall any resort be had to the
private properties of, any of the trustees, beneficiaries, shareholders,
partners, members, managers, directors, officers, employees or agents of
Purchaser or any affiliate thereof, or any trustees, beneficiaries, investment
managers, or any employees or agents of the trustees or investment managers. All
documents to be executed by
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Purchaser shall also contain the foregoing exculpation. USC and CCM shall be
jointly and severally liable for the obligations of Purchaser hereunder.
8.24 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
8.25 Right of Access to Records. Purchaser and Seller acknowledge
and agree that each party may require access after the Closing Date to
personnel, employment, financial, engineering, tenant and other documents,
books, records or items with respect to the Property and under the other party's
control. Each of Purchaser and Seller agree that each party retain all such
records and shall have the ability from time to time during normal business
hours after giving advance notice of one (1) full business day to the other
party, to review any and all such items relating to the Property and its
operations in such party's possession during Seller's period of ownership. This
obligation of each party to provide the other party with access pursuant to this
Section shall survive for a period of eighty four (84) months from the Closing
Date.
8.26 Credit Allocation Agreement. (a) Seller and Purchaser
acknowledge and agree that Seller presently is liable for any and all amounts
due to Bloomingdale's or Macy's with respect to the period prior to the date of
Closing pursuant to that certain Credit Allocation Agreement by and among
Seller, Bloomingdale's, Inc. ("Bloomingdale's") and Macy's Primary Real Estate,
Inc. ("Macy's"), dated as of July 1996 (the "Credit Allocation Agreement"). In
connection with such amounts due to Bloomingdale's and Macy's pursuant to the
Credit Allocation Agreement, upon Closing, Seller shall open an interest bearing
escrow account (the "Escrow Account") with Chicago Title Insurance Company (the
"Title Company") and Seller shall place in such Escrow Account the amount of
Nine Hundred Sixty Thousand Dollars ($960,000) (the "Holdback") under
instructions that the Title Company shall hold and disburse the Holdback as
provided in this Paragraph 8.26. After Closing, Seller, along with Macy's or
Bloomingdale's, as applicable, shall attempt to reach final settlement for the
amounts owed to Macy's or Bloomingdale's pursuant to the Credit Allocation
Agreement for the period prior to Closing ending with the end of the lease year
immediately prior to the lease year in which the Closing occurs (the "Prior
Lease Year"). Seller may use the Holdback to pay to Bloomingdale's or Macy's any
such funds owed to either of them upon final settlement as mutually agreed upon
by Seller and Macy's or Bloomingdale's, as applicable, provided, that Seller has
also paid to Purchaser and CCM any "Rent Offset" (as hereinafter defined)
theretofore incurred by Purchaser or CCM. Seller shall provide Purchaser with
prior written notice of the final settlement, together with written evidence
executed by such tenants of such final settlement, at least five (5) business
days before the funds are to be disbursed by the Title Company. At the end of
the fifth (5th) business day after said notice and deliveries have been sent by
Seller to Purchaser or CCM, the Title Company shall disburse such funds to
Seller upon Seller's unilateral request therefor to make such payments. After
Seller has used such funds to make the payments due to Bloomingdale's and
Macy's, any sums remaining in the Escrow Account shall be disbursed to Seller
upon Seller's unilateral request therefor to the Title Company. If either Macy's
or Bloomingdale's withholds rent or other payments as a result of funds due to
either of them for
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the period prior to Closing ending with the end of the Prior Lease Year,
pursuant to the Credit Allocation Agreement ("Rent Offset") during the four (4)
month period after the Closing Date and Seller has failed to pay such amounts to
Purchaser pursuant to Paragraph 8.26(b) below, then after said four (4) month
period, Purchaser and CCM shall have the right to use the Holdback to cover such
Rent Offset by delivering to Seller written notices from either Bloomingdale's
or Macy's (or other written evidence reasonably satisfactory to Seller),
confirming that the Rent Offset is a result of funds owed to either tenant for
the period prior to Closing ending with the end of the Prior Lease Year, under
the Credit Allocation Agreement; the foregoing is not a limitation on the
obligations of the Seller under the provisions of Paragraph 8.26(b) below. At
the end of the fifth (5th) business day after said notice and deliveries have
been sent to Seller by Purchaser or CCM, then the funds being requested by
Purchaser or CCM for the Rent Offset shall be disbursed to Purchaser or CCM upon
Purchaser's or CCM's unilateral request to the Title Company. After such four
(4) month period until Seller has reached final settlement with such tenants and
has paid such sums due to such tenants, if either Bloomingdale's or Macy's uses
a Rent Offset, Purchaser shall have the right monthly to use the Holdback to
cover such Rent Offset by delivering to Seller written notices from either
Bloomingdale's or Macy's confirming that the Rent Offset is a result of funds
owed to either tenant for the period prior to Closing under the Credit
Allocation Agreement; the foregoing is not a limitation on the obligations of
the Seller under the provisions of Paragraph 8.26(b) below. At the end of the
fifth (5th) business day after said notice and deliveries have been sent to
Seller by Purchaser or CCM, then the funds being requested by Purchaser or CCM
for the Rent Offset shall be disbursed to Purchaser or CCM upon Purchaser's or
CCM's unilateral request to the Title Company. If any funds in the Holdback are
used for Rent Offset, then, to the extent that the funds so used exceed the
amount owing under the Credit Allocation Agreement for the period prior to the
Closing ending with the end of the Prior Lease Year, Seller reserves all rights
and remedies against Macy's or Bloomingdale's to recover such funds (provided
that Seller shall not have the right to terminate any lease or exercise any
other remedy except to xxx to recover such funds). Seller's share of the amount
owing under the Credit Allocation Agreement for the period of time after the end
of the Prior Lease Year to the day before the Closing Date will be handled
between Seller and Purchaser through normal post-closing prorations as provided
in Paragraph 7.2(a). If Seller is unable to agree with Bloomingdale's and Macy's
as to the amounts owed to them under the Credit Allocation Agreement for the
period prior to Closing ending with end of the Prior Lease Year on or before the
date which is six (6) months after the Closing Date, then within a reasonable
period of time (but not later than 30 days) after Seller's receipt of written
request therefor from Purchaser, Seller shall bring a declaratory relief action
to determine such amount.
(b) Seller shall indemnify Purchaser and hold harmless and defend
Purchaser from and against 90.3865875% of all claims, damages, liabilities,
losses, costs and expenses (including, without limitation, reasonable attorneys'
fees) arising out of any sums owed by Seller to Macy's or Bloomingdale's
pursuant to the Credit Allocation Agreement with respect to the period prior to
the date of Closing ending with end of the Prior Lease Year.
(c) Purchaser may assign its rights under this Paragraph 8.26
(including but not limited to, the right of indemnification and the right to
receive the funds for reimbursement from the Rent Offset) to Xxxxxx to the
extent of a 90.3865875% interest in the Property. The
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provisions of this Paragraph 8.26 shall survive Closing.
8.27 Purchaser Approval of Conditions. Notwithstanding anything to
the contrary contained herein, Purchaser acknowledges that Purchaser has
approved the Property and all matters related thereto, including, without
limitation, all of the documents, books, records, reports and other items
described or referred to in Section 3 hereof, and that all of the conditions to
Purchaser's obligations hereunder have been satisfied except the conditions
which will be satisfied at the Closing.
8.28 Gift Certificates / Advertising Agency Agreement. Purchaser
acknowledges that all gift certificates with respect to the Property are the
responsibility of the Association and that Seller currently has, and after
Closing shall have, no obligations or liabilities with respect to such gift
certificates. Seller has agreed to give Purchaser a credit in the amount of
Eighteen Thousand Nine Hundred Eighty-One and 18/100 Dollars ($18,981.18) at
Closing for a portion of unredeemed gift certificates. Purchaser shall indemnify
Seller and hold harmless and defend Seller from and against any and all claims,
damages, liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) to the extent of any payment obligations pursuant to
such gift certificates and Seller shall have no further obligations or
liabilities with respect to such matter. Purchaser further acknowledges receipt
of a copy of the written notice issued by the Association necessary to terminate
that certain letter agreement dated October 28, 1998 with advertising agency
Fattal and Xxxxxxx, and that Seller currently has, and after Closing shall have,
no obligations or liabilities with respect to such agreement. The provisions of
this Paragraph 8.28 shall survive the Closing.
8.29 AMC Tank. Upon Closing, Seller shall open an interest bearing
account with the Title Company (the "AMC Account") and Seller shall place in the
AMC Account the amount of Fifty Thousand Dollars ($50,000) (the "AMC Holdback").
During the period of twelve (12) months following Closing, Seller, Purchaser and
USC shall jointly use reasonable best efforts to have AMC install and bear all
costs and expenses for a new underground storage tank in accordance with all
current applicable law. If after such twelve (12) month period, AMC has failed
to agree to bear the costs and responsibility for the installation of the new
underground storage tank (the "UST Installation"), Purchaser, to the extent of
its 90.3865875% interest in the Property, may use the AMC Holdback to cover all
reasonable out-of-pocket third-party costs of the UST Installation incurred by
Purchaser by delivering to the Title Company, copies of all invoices submitted
by Purchaser's contractor, subcontractors and materialmen marked "paid." Within
two (2) business days of receipt of any such demand together with the applicable
documents described herein, the Title Company shall notify the Seller in writing
of the same and forward to Seller copies of all Purchaser's deliveries. At the
end of the fifth (5th) business day after said notice and deliveries have been
sent to Seller, and provided that the Title Company has not been notified of any
objection to the disbursement by Seller, then the funds being held for the UST
Installation requested by Purchaser shall be disbursed to Purchaser.
Notwithstanding the foregoing, if the installation costs for UST Installation
(a) exceed the amount of the AMC Holdback, Seller shall not be liable for any
amounts in excess of such amount; or (b) is less than the amounts allocated for
such installation as set forth herein Seller shall be reimbursed the funds
remaining in the Escrow Account after Purchaser has been paid. Seller, however,
shall reserve
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all rights and remedies against AMC related to the UST Installation. The
provisions of this Section 8.29 shall survive Closing.
8.30 Concurrent Closings. As an accommodation to Purchaser, Seller
has agreed to enter into this Agreement and the Other Sale Agreement to
facilitate Purchaser purchasing the USC Interest and CCM purchasing the CCM
Interest concurrently in a single closing. Seller would not have entered into
this Agreement and the Other Sale Agreement without receiving assurances from
Purchaser and CCM that the sale of the USC Interest and the CCM Interest would
close concurrently. Consequently, Purchaser acknowledges and agrees that if for
any reason whatsoever, (i) either this Agreement or the Other Sale Agreement is
terminated, or (ii) the closing of sale of the USC Interest and the CCM Interest
will not take place concurrently pursuant to the terms of this Agreement and the
Other Sale Agreement, then Seller may, at its option, elect to terminate this
Agreement after Seller is informed either that this Agreement or the Other Sale
Agreement has been terminated or that the sale of the USC Interest and the CCM
Interest will not close concurrently.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the dates set forth below.
SELLER: PURCHASER:
RREEF USA FUND-II, USC CENTURY, INC.,
a California group trust a Delaware corporation
By: RREEF AMERICA L.L.C.,
a Delaware limited liability company By: /s/ Xxxxxxx Xxxxxxx
Its: Investment Manager ---------------------------
Name: Xxxxxxx Xxxxxxx
-------------------------
Title: Senior Vice President
By: /s/ Xxxx X. Xxxxxxx ------------------------
--------------------------------
Name: Xxxx X. Xxxxxxx Dated: June 10, 1999
Title: Authorized Representative
Dated: June 10, 1999
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.1.3 Personal Property
Schedule 1.1.3A Excluded Personal Property
Schedule 3.2.5 Additional Due Diligence Materials
Schedule 4.1 Pro Forma Title Policy
Schedule 5.1 Disclosure Schedule
Schedule 5.1.5 List of Service Contracts and Equipment Leases
Schedule 5.1.10 Rent Roll
Schedule 5.1.12 Leasing Commissions Due and Payable
Schedule 5.1.16 Tenant Improvement Work
Schedule 6.2 Form of Tenant Estoppel Letter
Schedule 6.2.1 Seller Estoppel Letter
Schedule 7.6.1 Form of Grant Deed
Schedule 7.6.2 FIRPTA Certificate
Schedule 7.6.4 Assignment and Assumption of Leases
Schedule 7.6.5 Assignment and Assumption of Contracts and Warranties
Schedule 7.6.6 Assignment of Intangibles
Schedule 7.6.8 Xxxx of Sale
EXHIBITS
Exhibit A Legal Description of Property
Exhibit B Leases of Major Tenants
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