CONTRIBUTION AND EXCHANGE AGREEMENT
among
FOREST AVENUE SHOPPING LLC,
PHILIPS FREEPORT ASSOCIATES, L.P.,
XXXXXXX SHOPPING ASSOCIATES,
SP AVENUE U ASSOCIATES, L.P.,
ENFIELD SHOPPING L.L.C.,
BRANHAVEN PLAZA L.L.C.,
PALM SPRINGS MILE ASSOCIATES, LTD. AND ITS PARTNERS,
FOXBOROUGH SHOPPING L.L.C. AND ITS MEMBERS,
DELRAN SHOPPING L.L.C. AND ITS MEMBERS,
and
NATIONAL PROPERTIES INVESTMENT TRUST,
and
XXXXX XXXXX, XXX XXXXXXX, XXXXXX XXXXXXXXX,
and
PHILIPS INTERNATIONAL REALTY, L.P.
and
PHILIPS INTERNATIONAL REALTY CORP.
Date: August 11, 1997
TABLE OF CONTENTS
Page
----
INDEX OF DEFINED TERMS.............................................iii
INDEX OF SCHEDULES AND EXHIBITS....................................vii
CONTRIBUTION AND EXCHANGE AGREEMENT................................ 1
RECITALS........................................................... 2
1. SUBJECT OF CONVEYANCE.............................................. 2
2. CONTRIBUTION TERMS; UNITS.......................................... 6
3. RIGHTS OF INSPECTION............................................... 7
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT....................... 8
5. REPRESENTATIONS AND WARRANTIES OF THE
PROPERTY PARTNERSHIPS AND THE PARTNERS............................. 11
6. REPRESENTATIONS AND WARRANTIES OF
NATIONAL AND NEW REIT.............................................. 22
7. REPRESENTATIONS AND WARRANTIES OF PRLP............................. 33
8. COVENANTS OF THE PROPERTY PARTNERSHIPS,
THE PARTNERS AND NATIONAL.......................................... 35
9. INTENTIONALLY DELETED.............................................. 39
10. ESTOPPEL CERTIFICATES.............................................. 39
11. CLOSING............................................................ 39
12. ADJUSTMENTS........................................................ 49
13. CONDITIONS PRECEDENT TO CLOSING.................................... 50
i
14. LEASING COMMISSIONS AND
TENANT IMPROVEMENT OBLIGATIONS..................................... 54
15. ASSIGNMENT......................................................... 55
16. BROKER............................................................. 55
17. CASUALTY LOSS...................................................... 56
18. CONDEMNATION....................................................... 56
19. TRANSFER RESTRICTIONS.............................................. 57
20. LIMITED GUARANTY................................................... 58
21. TAX MATTERS........................................................ 58
22. PUBLICATION........................................................ 59
23. TERMINATION........................................................ 60
24. REMEDIES........................................................... 60
25. NOTICE............................................................. 61
26. INDEMNITY.......................................................... 62
27. ANCILLARY AGREEMENTS............................................... 63
28. MISCELLANEOUS...................................................... 64
ii
INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
Act............................................................ ss.5.2
Additional Rents............................................... ss.12.2
Agreement...................................................... Preface
Asset Contributing Property Partnership........................ Preface
Asset Contributing Property Partnerships....................... Preface
Building....................................................... ss.1.4(b)
Buildings...................................................... ss.1.4(b)
Casualty....................................................... ss.17.2
Casualty Notice................................................ ss.17.2
CERCLA......................................................... ss.5.1(t)(x)(A)
Closing........................................................ ss.11.1
Closing Date................................................... ss.11.1
Code........................................................... ss.5.1(q)(ii)
Common Stock................................................... ss.2.2(a)
Competing Offer................................................ ss.8.5
Contaminants................................................... ss.5.1(t)(x)(A)
Delran Member.................................................. Preface
Delran Members................................................. Preface
Discharge...................................................... ss.5.1(t)(x)(B)
Documents...................................................... ss.1.4(l)
Environmental Documents........................................ ss.5.1(t)(x)(C)
Environmental Laws............................................. ss.5.1(t)(x)(D)
ERISA.......................................................... ss.5.1(q)(ii)
Estoppel Certificates.......................................... ss.10.1
Exchange Act................................................... ss.5.2(b)
Expenses....................................................... ss.3.3
FIRPTA Affidavits.............................................. ss.5.3(e)
GAAP........................................................... ss.5.1(p)
Governmental Authorities....................................... ss.5.1(j)
Governmental Authorities....................................... ss.6.1(v)
Improvements................................................... ss.1.4(c)
Insurance Policies............................................. ss.17.1
Intangible Property............................................ ss.1.4(k)
Interest Assignment............................................ ss.1.3
Interest Contributing Property Partnership..................... Preface
Interest Contributing Property Partnerships.................... Preface
Land........................................................... ss.1.4(a)
Leases......................................................... ss.1.4(f)
Management Agreement........................................... ss.27.3
iii
Management Company............................................. ss.27.3
National....................................................... Preface
National Building.............................................. ss.1.2(a)
National Documents............................................. ss.1.2(g)
National Improvements.......................................... ss.1.2(a)
National Intangible Property................................... ss.1.2(f)
National Land.................................................. ss.1.2(a)
National Lease................................................. ss.1.4(f)
National Leases................................................ ss.1.2(d)
National Permits and Licenses.................................. ss.1.2(f)
National Personal Property..................................... ss.1.2(c)
National Plans................................................. ss.6.1(ee)
National Property.............................................. ss.1.2(h)
National Real Property......................................... ss.1.2(b)
National Rent Roll............................................. ss.6.1(p)
National Security Deposit...................................... ss.1.2(d)
National Service Contracts..................................... ss.1.2(f)
National Shares................................................ ss.2.2
National Shareholder Approval.................................. ss.6.1(c)
National Tradenames............................................ ss.1.2(e)
New Reit....................................................... Preface
Non-Competition Agreement...................................... ss.27.4
Palm Springs Partner........................................... Preface
Palm Springs Partners.......................................... Preface
Parties........................................................ ss.1.4(n)
Party.......................................................... ss.1.4(n)
Partner........................................................ Preface
Partners....................................................... Preface
Partnerships' Reports.......................................... ss.5.1(s)
PCB Items...................................................... ss.5.1(t)(vi)
PCBs........................................................... ss.5.1(t)(vi)
Permits........................................................ ss.5.1(t)(vii)
Permits and Licenses........................................... ss.1.4(i)
Permitted Assignee............................................. ss.15.1
Permitted Designees............................................ ss.26.1
Permitted Encumbrances......................................... ss.4.1
Personal Property.............................................. ss.1.4(e)
Phase I Reports................................................ ss.3.3
Phase II Reports............................................... ss.3.3
Preferred Stock................................................ ss.6.2(g)
PRLP........................................................... Preface
PRLP Agreement................................................. ss.5.2(a)
Property....................................................... ss.1.4(m)
iv
Property Financials............................................ ss.5.1(p)
Property Financials............................................ ss.6.1(dd)
Property Partnership........................................... Preface
Property Partnership Lease..................................... ss.1.4(f)
Property Partnerships.......................................... Preface
Property Partnerships' Building................................ ss.1.1(a)
Property Partnerships' Certificates............................ ss.2.3(a)
Property Partnerships' Deeds................................... ss.11.2(a)
Property Partnerships' Documents............................... ss.1.1(g)
Property Partnerships' Improvements............................ ss.1.1(a)
Property Partnerships' Intangible Property..................... ss.1.1(f)
Property Partnerships' Land.................................... ss.1.1(a)
Property Partnerships' Leases.................................. ss.1.1(d)
Property Partnerships' Permits and Licenses.................... ss.1.1(f)
Property Partnerships' Personal Property....................... ss.1.1(c)
Property Partnership's Plans................................... ss.5.1(q)(i)
Property Partnerships' Property................................ ss.1.1(h)
Property Partnerships' Real Property........................... ss.1.1(b)
Property Partnerships' Rent Roll............................... ss.5.1(d)
Property Partnerships' Security Deposit........................ ss.1.1(d)
Property Partnerships' Service Contracts....................... ss.1.1(f)
Property Partnerships' Tradenames.............................. ss.1.1(e)
Property Partnerships' Unit Holders............................ ss.2.1
Property Partnership's Units................................... ss.2.3(a)
Property Partnerships' Units................................... ss.2.3(a)
Prudential..................................................... ss.27.2(a)
Prudential Fee................................................. ss.27.2(a)
Prudential Note................................................ ss.27.2(a)
Real Property.................................................. ss.1.4(d)
Registration Rights Agreements................................. ss.27.5
Registration Statements........................................ ss.3.4
Reit........................................................... Preface
REIT........................................................... ss.6.1(l)(i)
Service Contracts.............................................. ss.1.4(j)
SEC Documents.................................................. ss.5.2(b)
Security Deposits.............................................. ss.1.4(g)
Taxes.......................................................... ss.21.5
Tenant......................................................... ss.4.1(b)
Tenants........................................................ ss.4.1(b)
Title Commitments.............................................. ss.4.2
Title Company.................................................. ss.4.2
Title Policy................................................... ss.4.2
Tradenames..................................................... ss.1.4(h)
v
Transfer....................................................... ss.5.2(a)
Transferred.................................................... ss.19.1
Trustees....................................................... Preface
Trustees Shares................................................ ss.27.1(a)
Trustees Warrants.............................................. ss.27.1(b)
Units.......................................................... ss.2.3(a)
vi
SCHEDULES
Schedule A Palm Springs Partners, Foxborough Members, Delran Members
Schedule 1.1(a) Property Partnerships' Land
Schedule 1.1(c) Property Partnerships' Personal Property
Schedule 1.1(e) Property Partnerships' Tradenames
Schedule 1.2(a) National Land
Schedule 1.2(c) National Personal Property
Schedule 2.3(a) Property Partnership's Units
Schedule 4.1(c) Property Partnership's Matters Affecting Title
Schedule 4.1(e) Property Partnership's Surveys of Real Property
Schedule 5.1(a) Property Partnership's Organizational Information
Schedule 5.1(c) Property Partnership's New Leases and Lease Renewals Currently out
for Signature
Schedule 5.1(d) Property Partnerships' Rent Roll
Schedule 5.1(e) Property Partnership's Tenants Work
Schedule 5.1(f) Property Partnership's Employment Agreements
Schedule 5.1(g) Property Partnership's Actions, Suits, Labor Disputes Currently Pending
Schedule 5.1(h) Property Partnership's Condemnation Proceedings
Schedule 5.1(i)-1 Property Partnership's Debt
Schedule 5.1(i)-2 Property Partnership's Indemnities and Guarantees
Schedule 5.1(j) Property Partnership's Violations affecting the Property
Schedule 5.1(k) Property Partnership's Leasing Commission Obligations
Schedule 5.1(m) Property Partnership's Encumbered Personal Property
Schedule 5.1(n) Property Partnership's Management Agreements that are Not
Terminable
Schedule 5.1(o) Property Partnership's Reprimands and Recommendations of Insurance
Companies or Fire Underwriters
Schedule 5.1(q)(i)-1 Property Partnership's Plans
Schedule 5.1(q)(i)-2 Palm Springs Mile Associates Ltd. Employees
Schedule 5.1(r) Property Partnership's Welfare and Pension Benefits
Schedule 5.1(s) Partnerships' Reports
Schedule 5.1(u) Property Partnership's Audits by Governmental Authorities
Schedule 5.3(a) Partner's Organization Information
Schedule 5.3(c) Encumbrances on Partnership Interests
Schedule 6.1(i) National Extraordinary Business
Schedule 6.1(j) National Material Liabilities or Obligations
Schedule 6.1(l)(ii) National Tax Audits or Proceedings
Schedule 6.1(l)(iv) National Individuals under I.R.C.
Schedule 6.1(o) National Schedule of Leases
Schedule 6.1(o)-2 National New Leases and Lease Renewals Currently out for Signature
Schedule 6.1(p) National Rent Roll
vii
Schedule 6.1(q) National Tenants Work
Schedule 6.1(r) National Service Contracts
Schedule 6.1(s) National Actions, Suits, Labor Disputes Currently Pending
Schedule 6.1(t) National Condemnation Proceedings
Schedule 6.1(u) National Third Party Reports
Schedule 6.1(v) National Violations Affecting the Real Property
Schedule 6.1(w) National Leasing Commission Obligations
Schedule 6.1(y) Security Interests on National Personal Property
Schedule 6.1(z) National Management Agreements that are Not Terminable
Schedule 6.1(aa)-1 National Debt
Schedule 6.1(aa)-2 National Indemnities and Guaranties
Schedule 6.1(bb) National Storage Tanks or Vessels
Schedule 6.1(ee)(i) National Plans
Schedule 6.1(ff) National Welfare and Pension Benefits
Schedule 6.1(gg)(ii) National Environmental Discharges
Schedule 6.1(gg)(iv) National Environmental Violations
Schedule 6.1(gg)(v) National Asbestos
Schedule 6.1(gg)(vi) National PCB Items
Schedule 6.1(gg)(vii) National Environmental Permit Violations
Schedule 6.1(hh) Adjusted Basis of National Real Property
Schedule 6.1(jj) National Record Owners
Schedule 12.5 Capital Improvements
Schedule 21.4 Reduction of Property Value Proceedings
viii
EXHIBITS
Exhibit 1.3 Partnership Interest Assignment and Assumption Agreement
Exhibit 5.2(a) PRLP Agreement
Exhibit 27.1 Trustees Warrants
Exhibit 27.3 Management Agreement
Exhibit 27.4 Non-Competition Agreement
Exhibit 27.5 Registration Rights Agreements
ix
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (the "Agreement") made as of this
11th day of August, 1997 among FOREST AVENUE SHOPPING LLC, a New York limited
liability company, having an address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, PHILIPS FREEPORT ASSOCIATES, L.P., a Delaware limited
partnership, having an address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, XXXXXXX SHOPPING ASSOCIATES, a New York general partnership, having
an address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, SP AVENUE
U ASSOCIATES, L.P., a New York limited partnership, having an address at 000
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ENFIELD SHOPPING L.L.C., a
New York limited liability company, having an address at 000 Xxxxx Xxxxxx, Xxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and BRANHAVEN PLAZA LLC, a New York limited
liability company, having an address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (collectively, the "Asset Contributing Property Partnerships" and
each individually an "Asset Contributing Property Partnership"), PALM SPRINGS
MILE ASSOCIATES, LTD., a Florida limited partnership, having an address at 000
Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and its Partners set forth
on Schedule A (collectively, the "Palm Springs Partners" and each individually a
"Palm Springs Partner"), FOXBOROUGH SHOPPING L.L.C., a New York limited
liability company, and its members set forth on Schedule A (collectively, the
"Foxborough Members" and each individually, a "Foxborough Member"), having an
address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, and DELRAN
SHOPPING L.L.C, a New York limited liability company, and its members set forth
on Schedule A (collectively, the "Delran Members" and each individually a
"Delran Member"), having an address at 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (collectively, the "Interest Contributing Property Partnerships"
and each individually an "Interest Contributing Property Partnership") (the
Asset Contributing Property Partnerships and the Interest Contributing Property
Partnerships are collectively referred to herein as the "Property Partnerships"
and each individually a "Property Partnership" and the Palm Springs Partners,
the Foxborough Members and the Delran Members are collectively referred to
herein as the "Partners" and each individually a "Partner"), NATIONAL PROPERTIES
INVESTMENT TRUST ("National"), a Massachusetts business trust electing to be
taxed as a real estate investment trust (a "Reit") under the Internal Revenue
Code of 1986, as amended (the "Code") and having an address at 00 Xxxxxx Xxxx,
Xxxxxx Xxxxxx, XX 00000, XXXXX XXXXX, having an address at 00 Xxxxxx Xxxx,
Xxxxxx Xxxxxx, XX 00000, XXX XXXXXXX, having an address at 00 Xxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxxxx, and XXXXXX XXXXXXXXX, having an address at 000 Xxxxxx
Xxxxxx, Xxxxxx, XX 00000 (collectively, the "Trustees") PHILIPS INTERNATIONAL
REALTY, L.P. ("PRLP"), a Delaware limited partnership having an address c/o
Philips International, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and PHILIPS
INTERNATIONAL REALTY CORP. ("New Reit"), a Maryland corporation which will elect
to be taxed as a Reit under the Code and which initially will be the
non-managing general partner of PRLP, and having an address c/o Philips
International, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
RECITALS
A. The Property Partnerships own various retail shopping center properties
located throughout New York, New Jersey, Connecticut, Massachusetts and Florida.
National owns one retail shopping center property located in Florida.
B. The Property Partnerships, PRLP and National have determined that it is
in the best interests of the parties' long term strategic growth to combine
their respective properties and related assets. In order to effectuate this
combination, (i) the Asset Contributing Property Partnerships have agreed to
contribute certain properties and other assets owned or controlled by the Asset
Contributing Property Partnerships to PRLP; (ii) the Partners have agreed to
contribute to PRLP all of their rights, title and interests in the Interest
Contributing Property Partnerships; (iii) National has agreed to transfer the
property and other assets owned or controlled by National to New Reit; and (iv)
New Reit has agreed to transfer the property and other assets acquired from
National to PRLP.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, do hereby agree as follows:
1. SUBJECT OF CONVEYANCE.
1.1 In accordance with the terms and conditions of this Agreement and
subject to PRLP's and National's performance and satisfaction of the conditions,
covenants and obligations contained herein, the Asset Contributing Property
Partnerships agree to contribute to PRLP at Closing the assets set forth in
paragraphs (a) through (h) of this Section 1.1 and the Partners have agreed to
contribute to PRLP at Closing the partnership or membership interests of the
Interest Contributing Property Partnership as set forth in Section 1.3:
(a) that certain real property situate, lying and being in the States
of New York, New Jersey, Connecticut, Massachusetts and Florida and being
more particularly described on Schedule 1.1(a) (the "Property Partnerships'
Land"), which Schedule 1.1(a) sets forth the property addresses and blocks
and lots for each parcel and all of the improvements located on the
Property Partnerships' Land (individually, the "Property Partnerships'
Building" and collectively, the "Property Partnerships' Improvements");
(b) all rights, privileges, grants and easements appurtenant to the
Property Partnerships' interest in the Property Partnerships' Land and the
Property Partnerships' Improvements, including without limitation, all of
the Property Partnerships' right, title and interest in and to all land
lying in the bed of any public street, road or alley, all mineral and water
rights and all easements, licenses, covenants and rights-of -way or other
appurtenances used in connection with the beneficial use and enjoyment of
the Property Partnerships' Land and the Property Partnerships' Improvements
(the Property Partnerships' Land, the Property
2
Partnerships' Improvements and all such rights, privileges, easements,
grants and appurtenances are sometimes referred to herein as the "Property
Partnerships' Real Property");
(c) except as set forth on Schedule 1.1(c), all personal property,
fixtures, equipment, inventory and computer programming and software owned
or licensed by the Property Partnerships and located on any of the Property
Partnerships' Real Property or used at any of the management and corporate
offices of the Property Partnerships (the "Property Partnerships' Personal
Property");
(d) all leases and other agreements with respect to the use and
occupancy of the Property Partnerships' Real Property, together with all
amendments and modifications thereto and any guaranties provided thereunder
(the "Property Partnerships' Leases"), and rents, additional rents,
reimbursements, profits, income, receipts and the amount deposited (the
"Property Partnerships' Security Deposit") under any Lease in the nature of
security for the performance of the Tenant's obligations under such Lease;
(e) the tradenames set forth on Schedule 1.1(e), and any trademark
applicable thereto, and/or any name by which any of the Property
Partnerships' Real Property is commonly known, and all goodwill, if any,
related to said names (collectively, the "Property Partnerships'
Tradenames");
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the Property Partnerships' Real Property and the
Property Partnerships' Personal Property (collectively, the "Property
Partnerships' Permits and Licenses"), all of the Property Partnerships'
right, title and interest in and to those contracts and agreements for the
servicing, maintenance and operation of the Property Partnerships' Real
Property (the "Property Partnerships' Service Contracts") and telephone
numbers in use at any of the Property Partnerships' Real Property or the
management offices and corporate headquarters of the Property Partnerships'
(together with the Property Partnerships' Permits and Licenses and the
Property Partnerships' Service Contracts, the "Property Partnerships'
Intangible Property");
(g) all promotional material, tenant data, leasing material and forms,
current rent rolls, property files and statements, market studies, keys,
plans, specifications, reports, tests and other materials of any kind owned
by or in the possession of the Property Partnerships which are or may be
used by the Property Partnerships in the use and operation of the Property
Partnerships' Real Property or the Property Partnerships' Personal Property
(collectively, the "Property Partnerships' Documents"); and
(h) all other rights, privileges and appurtenances owned by the
Property Partnerships, if any, and in any way related to the rights and
interests described above in this Section.
The Property Partnerships' Real Property, the Property Partnerships'
Personal Property, the Property Partnerships' Leases, the Property Partnerships'
Tradenames, the Property Partnerships' Intangible Property, the Property
Partnerships' Documents and the other property
3
interests being conveyed hereunder are hereinafter collectively referred to as
the "Property Partnerships' Property".
1.2 In accordance with the terms and conditions of this Agreement and
subject to New Reit's, PRLP's, the Partners' and the Property Partnerships'
performance and satisfaction of the conditions and obligations contained herein
and subject to the approval of the beneficial owners of National's interests as
contemplated by Sections 6.1(c), National agrees to transfer to New Reit at
Closing and New Reit agrees to transfer to PRLP the property and assets set
forth in paragraph (a) through (h) of this Section 1.2:
(a) that certain real property situate, lying and being in the State
of Florida and being more particularly described on Schedule 1.2(a) (the
"National Land"), which Schedule 1.2(a) sets forth the property address and
block and lot for each parcel and all of the improvements located on the
Land (individually, a "National Building" and collectively, the "National
Improvements");
(b) all rights, privileges, grants and easements appurtenant to
National's interest in the National Land and the National Improvements,
including without limitation, all of National's right, title and interest
in and to all land lying in the bed of any public street, road or alley,
all mineral and water rights and all easements, licenses, covenants and
rights-of -way or other appurtenances used in connection with the
beneficial use and enjoyment of the National Land and the National
Improvements (the National Land, National Improvements, and all such
rights, privileges, easements, grants and appurtenances are sometimes
referred to herein as the "National Real Property");
(c) except as set forth on Schedule 1.2(c), all personal property,
fixtures, equipment, inventory and computer programming and software owned
or licensed by National and located on any of the National Real Property or
used at any of the management and corporate offices of National (the
"National Personal Property");
(d) all leases and other agreements with respect to the use and
occupancy of the National Real Property, together with all amendments and
modifications thereto and any guaranties provided thereunder (the "National
Leases"), and rents, additional rents, reimbursements, profits, income,
receipts and the amount deposited (the "National Security Deposit") under
any Lease in the nature of security for the performance of the Tenant's
obligations under such Lease;
(e) any name by which any of the National Real Property is commonly
known, and all goodwill, if any, related to said names (collectively, the
"National Tradenames");
(f) all permits, licenses, guaranties, approvals, certificates and
warranties relating to the National Real Property and the National Personal
Property (collectively, the "National Permits and Licenses"), all of
National's right, title and interest in and to those contracts and
agreements for the servicing, maintenance and operation of the
4
National Real Property ("National Service Contracts") (together with the
National Permits and Licenses and the National Service Contracts, the
"National Intangible Property");
(g) copies of all books, records, promotional material, tenant data,
leasing material and forms, current rent rolls, files, statements, tax
returns, market studies, keys, plans, specifications, reports, tests and
other materials of any kind owned by or in the possession of National which
are or may be used by National in the use and operation of the National
Real Property or National Personal Property (collectively, the "National
Documents"); provided, however, that National shall retain all originals of
same for a minimum of five (5) years after the Closing; and
(h) all other rights, privileges and appurtenances owned by National,
if any, and in any way related to the rights and interests described above
in this Section.
The National Real Property, the National Personal Property, the National
Leases, the National Tradenames, the National Intangible Property, the National
Documents and the other property interests being conveyed hereunder are
hereinafter collectively referred to as the "National Property".
1.3 The Partners shall contribute to PRLP all of their rights, title and
interests, including without limitation, all of their interests in the capital,
profits and losses of the Interest Contributing Property Partnership or any
property distributable therefrom, so as to transfer one hundred (100%) percent
of the entity. The Interest Contributing Property Partnership shall take such
action, obtain such consents and approvals, and cause the execution of such
documents as may be required by PRLP in furtherance of the exchange of the
entire interest of each Partner, including without limitation, the execution and
delivery of the Partnership Interest Assignment and Assumption Agreement (the
"Interest Assignment"), substantially in the form of Exhibit 1.3 annexed hereto
and made a part hereof.
1.4 (a) The Property Partnerships' Land and the National Land are
hereinafter collectively referred to as the "Land" and each individually, a
"Land."
(b) The Property Partnerships' Buildings and the National Buildings are
hereinafter collectively referred to as the "Buildings" and each individually, a
"Building."
(c) The Property Partnerships' Improvements and the National Improvements
are hereinafter collectively referred to as the "Improvements."
(d) The Property Partnerships' Real Property and the National Real Property
are hereinafter collectively referred to as the "Real Property" and each
individually, a "Real Property."
(e) The Property Partnerships' Personal Property and the National Personal
Property are hereinafter collectively referred to as the "Personal Property."
5
(f) The Property Partnerships' Leases and the National Leases are
hereinafter collectively referred to as the "Leases" and each individually, a
"Property Partnership Lease" or a "National Lease."
(g) The Property Partnerships' Security Deposits and the National Security
Deposits are hereinafter collectively referred to as the "Security Deposits."
(h) The Property Partnerships' Tradenames and the National Tradenames are
hereinafter collectively referred to as the "Tradenames."
(i) The Property Partnerships' Permits and Licenses and the National
Permits and Licenses are hereinafter collectively referred to as the "Permits
and Licenses."
(j) The Property Partnerships' Service Contracts and the National Service
Contracts are hereinafter collectively referred to as the "Service Contracts."
(k) The Property Partnerships' Intangible Property and the National
Intangible Property are hereinafter collectively referred to as the "Intangible
Property."
(l) The Property Partnerships' Documents and the National Documents are
hereinafter collectively referred to as the "Documents."
(m) The Property Partnerships' Property and the National Property are
hereinafter collectively referred to as the "Property" and each individually, a
"Property."
(n) The Property Partnerships and National are from time to time
collectively referred to herein as the "Parties" and each a "Party."
2. CONTRIBUTION TERMS; UNITS.
At Closing, and upon satisfaction of the terms and conditions provided
herein, each Asset Contributing Property Partnership agrees to contribute the
Property Partnership's Property and each Partner agrees to contribute its entire
interest as set forth in Section 1.3, to PRLP or its Permitted Assignees and
PRLP agrees (a) to accept the Property Partnerships' Property or the assignments
of the Partner's interest in the Property Partnership, and (b) to issue the
Property Partnerships' Units (as hereinafter defined) to the Asset Contributing
Property Partnerships or Partners that contribute their interest in the Interest
Contributing Property Partnerships (collectively the "Property Partnerships'
Unit Holders" and each individually, the "Property Partnership's Unit Holders").
The Property Partnerships' Units shall initially constitute approximately 98% of
the outstanding Units in PRLP, and shall be as allocated to each Property
Partnership or Partner as set forth in Schedule 2.3(a).
6
2.2 (a) At Closing, and upon satisfaction of the terms and conditions
provided herein, including without limitation, the receipt of the National
Shareholder Approval (as defined in Section 6.1(c)), National agrees to transfer
the National Property to New Reit or its designee and New Reit agrees (a) to
accept the National Property and (b) to issue 32,000 shares of common stock of
New Reit, $.01 par value per share (the "Common Stock") to National (the
"National Shares"), 3,744 shares of which will immediately be dividended to the
National Shareholders on a pro-rata basis in calendar year 1997 and 20,256
shares of which will be dividended to the National Shareholders on a pro-rata
basis in January 1998. Such shares of Common Stock of New Reit are based on the
assumption that there will be a pro forma net asset value of the Property of
$74,100,000 for which a total of 1,482,000 shares of the Common Stock (or
interests redeemable therefor) of New Reit will be issued.
(b) At Closing, New Reit agrees to transfer the National Property to PRLP
and, in consideration therefor and certain other cash consideration, PRLP agrees
to admit to PRLP, New Reit as a General Partner holding a 3.2 % ownership
interest in PRLP.
2.3 Simultaneous with PRLP accepting the Property Partnerships' Property or
the assignment of the Partners' interests, as the case may be, PRLP agrees to
issue to the Property Partnerships' Unit Holders units of limited partnership
interests in PRLP ("Units") in the aggregate amount of 1,450,000 (collectively,
the "Property Partnerships' Units"), which Property Partnerships' Units will be
evidenced by certificates (the "Property Partnerships' Certificates") containing
the legend set forth in Section 5.5 and which Property Partnerships' Units will
be allocated to each Property Partnership (or their respective Partners) as set
forth in Schedule 2.3(a) (the "Property Partnership's Units").
3. RIGHTS OF INSPECTION
3.1 PRLP, the Property Partnerships and National, at their sole cost and
expense, may perform, or cause to be performed, tests, investigations and
studies of or related to the National Property and the Property Partnerships'
Property, respectively, including, but not limited to, soil tests and borings,
ground water tests and investigations, percolator tests, surveys, architectural,
engineering, subdivision, environmental, access, financial, development studies
and other tests, investigations or studies as said party, in its sole
discretion, determines is necessary or desirable in connection with the Property
of the other Party and may inspect the physical (including environmental) and
financial condition of the Property of the other Party, including but not
limited to the other Party's Leases, Service Contracts, copies of the other
Party's tax returns and the other Party's Property Financials as of and for the
years ending December 31, 1994, 1995, 1996 and the interim statements to the
extent available, engineering and environmental reports, permits and approvals,
which inspection shall be satisfactory to each Party in its sole discretion. The
Parties agree to cooperate with each other and with PRLP in such review and
inspection and to the extent not yet delivered, shall deliver said documents and
information to each other.
7
3.2 Each Party, PRLP, their agents and contractors, shall have reasonable
access to the other Party's Property and other information pertaining thereto in
the possession or within the control of the other Party for the purpose of
performing such studies, tests, borings, investigations and inspections for the
purposes described in Section 3.1 above. Such right of inspection and the
exercise of such right shall not constitute a waiver by any Party of the breach
of any representation or warranty of another Party which might, or should, have
been disclosed by such inspection. The Parties shall cooperate with each other
in facilitating each other's due diligence inquiry and shall obtain, and use
commercially reasonable efforts to obtain, any consents that may be necessary in
order for the other party to perform same. In addition, each Party shall notify
the other Party and PRLP of any dangerous conditions on its Real Property of
which said Party has knowledge, including, without limitation, conditions which
due to the nature of the borings, studies, investigations, inspections or
testing to be performed by or on behalf of the other party may pose a dangerous
condition to said party or its agents and contractors.
3.3 The Property Partnerships shall each bear the costs of Phase I
environmental studies (the "Phase I Reports"), Phase II environmental studies,
if necessary, (the "Phase II Reports") and all Expenses affecting its Real
Property. The Property Partnerships shall also bear the costs of Phase I
Reports, Phase II Reports and all Expenses of National, pari passu. "Expenses"
shall mean all reasonable costs of the Property Partnerships and National
(including legal fees, accounting fees, travel fees, filing fees, printing fees,
transfer taxes and due diligence costs), related to all matters contemplated by
this Agreement.
3.4 The Property Partnerships shall provide National with access to any of
its books, records, Property Partnerships' Documents and such other information
as is necessary and required for National to complete its proxy
statement/registration statement on Form S-4 (the "Registration Statement").
National agrees, and agrees to cause all parties who are required to have access
to the aforesaid documents to agree, to keep all such information strictly
confidential and not to disclose such information to third parties except to the
extent that disclosure is required pursuant to SEC rules and regulations.
4. TITLE; MATTERS TO WHICH THIS SALE IS SUBJECT.
4.1 The Property is to be contributed to PRLP subject to the following
(collectively, the "Permitted Encumbrances"):
(a) The liens of real estate taxes, personal property taxes, water
charges, and sewer charges provided same are not due and payable, but
subject to adjustment as provided herein;
(b) the rights of those parties occupying space at any of the
Improvements (collectively, "Tenants" and each a "Tenant"), as tenants
only;
8
(c) those restrictions, covenants, agreements, easements, matters and
things affecting title to the Real Property as of the date hereof and more
particularly described in Schedule 4.1(c) annexed hereto and by this
reference made a part hereof and such other easements, covenants and
restrictions which are entered into with the consent of PRLP after the date
hereof, such consent not to be unreasonably withheld, delayed or
conditioned and any additional items not objected to by PRLP in accordance
with Section 4.2 below;
(d) any and all laws, statutes, ordinances, codes, rules, regulations,
requirements, or executive mandates affecting the Real Property including,
without limitation, those related to zoning and land use, as of the date
hereof;
(e) the state of facts shown on the surveys described on Schedule
4.1(e) for each of the individual properties comprising the Real Property,
and any other state of facts which a recent and accurate survey of the Real
Property would actually show, provided same do not impair the use of the
Real Property as it is currently being used and do not render title
uninsurable at standard rates;
(f) the Service Contracts;
(g) any installment not yet due and payable of assessments imposed
after the date hereof and affecting the Real Property or any portion
thereof;
(h) any utility company rights, easements and franchises to maintain
poles, lines, wires, cables, pipes, boxes and other fixtures and facilities
in, over, under or upon the Real Property, provided same do not impair in
other than a de minimus manner the present use of the Real Property;
(i) prohibition against the interference with the natural and
unobstructed flow of any applicable brook crossing the Real Property or
other riparian rights, provided same does not impair the use of the Real
Property as it is currently being used and do not render title uninsurable
at standard rates;
(j) such matters as the Title Company shall be willing, without
special premium, to omit as exceptions to coverage including minor
variations between record lines and tax lot lines; and
(k) the lien of any mortgage being assumed by PRLP on those parcels of
Real Property encumbered by such mortgage as of the date hereof (but on the
terms and conditions of this Agreement) which mortgages are set forth on
Schedules 5.1(i) and 6.1(aa).
4.2 PRLP has directed Royal Abstract Corporation or such other or
additional title insurance companies as may be selected by PRLP (collectively,
the "Title Company") to prepare title insurance searches and commitments for
owner's title insurance policies for the Real Property (the "Title
Commitments"). Subject to Section 1.3, it shall be a condition to Closing that
National and each of the Asset Contributing Property Partnerships convey, and
that the Title
9
Company insure, title to each of its Real Property in an amount designated by
PRLP (at a standard rate for such insurance) in the name of PRLP or its
designee, after delivery of the Deeds, by a standard 1992 ALTA Owners Policy,
with such ALTA endorsements as are available in each applicable state where the
Real Property is located and as required by the other party attached, free and
clear of all liens, encumbrances and other matters, other than the Permitted
Encumbrances (the "Title Policy"). The Title Company shall provide affirmative
insurance that any (i) Permitted Encumbrances have not been violated, and that
any future violation thereof will not result in a forfeiture or reversion of
title; (ii) PRLP's contemplated use of the Real Property will not violate the
Permitted Encumbrances; and (iii) the exception for taxes shall apply only to
the current taxes not yet due and payable. Each Party shall provide such
affidavits and undertakings as the Title Company insuring title to said party's
Real Property may reasonably require. If any defects, objections or exceptions
in the title to the Real Property appear in the Title Policies (other than the
Permitted Encumbrances) which PRLP is not required to accept under the terms of
this Agreement, the party owning said Real Property may, at its election,
undertake to eliminate such unacceptable defects, objections or exceptions, it
being agreed that other than (i) judgments against the party owning said Real
Property, (ii) mortgages or other liens which can be satisfied by payment of a
liquidated amount, and (iii) defects, objections or exceptions which can be
removed by payments not to exceed Forty Thousand ($40,000.00) Dollars for each
Real Property, and except as provided below, the party owning said Real Property
shall have no obligation to incur any expense in connection with curing such
defects, objections or exceptions. Any party in its discretion, may adjourn the
Closing for up to sixty (60) days in order to eliminate unacceptable defects,
objections or exceptions on its Real Property. Other than the items described in
(i)-(iii) of the preceding sentence, which each Party agrees to cure at its sole
cost and expense without regard to the cost thereof (other than as expressly set
forth in item (iii)), if, after complying with the foregoing requirements, the
Party is unable to eliminate all unacceptable defects, objections or exceptions
in accordance with the terms of this Agreement on or before such adjourned date
for the Closing, PRLP shall elect either (w) to terminate this Agreement only
with respect to the obligations of the Party hereunder by notice given to the
owner of the Real Property in which event the provisions of Section 23 shall
apply, or (x) to accept title subject to such unacceptable defects, objections
or exceptions and receive no credit against or reduction of the consideration to
be given hereunder for the Property. The words "insurable title" and "insurable"
as used in this Agreement are hereby defined to mean title which is insurable at
standard rates (without special premium) by the Title Company without exception
other than the Permitted Encumbrances, and standard printed policy and survey
exceptions.
4.3 Any unpaid taxes, water charges, sewer rents and assessments, together
with the interest and penalties thereon to a date not less than seven (7)
business days following the Closing Date (in each case subject to any applicable
apportionment), and any mortgages or other liens created by a Party which said
Party is obligated to pay and discharge pursuant to the terms of this Agreement,
together with the cost of recording or filing of any instruments necessary to
discharge such liens and such judgments, shall be paid at the Closing by said
Party. Each Party shall deliver to PRLP, on the Closing Date, instruments in
recordable form sufficient to discharge any such mortgages or other liens which
said Party is obligated to pay and discharge pursuant to the terms of this
Agreement.
10
4.4 If the Title Commitments disclose judgments, bankruptcies or other
returns against other persons having names the same as or similar to that of a
Party hereto or its Partners, said Party, on request, shall deliver to the Title
Company affidavits showing that such judgments, bankruptcies or other returns
are not against it, its Partners or any affiliates. Upon request by PRLP, a
Party shall deliver any affidavits and documentary evidence as are reasonably
required by the Title Company to eliminate the standard or general exceptions on
the ALTA form Owner's Policy.
5. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY PARTNERSHIPS AND THE
PARTNERS.
5.1 In order to induce National, New Reit and PRLP to perform as required
hereunder, each Property Partnership hereby warrants and represents the
following only with respect to itself and its Property:
(a) The Property Partnership is a duly organized and validly existing
entity as set forth on Schedule 5.1 (a) annexed hereto, organized under the
laws of the State set forth opposite its name on Schedule 5.1 (a), is duly
authorized to transact business in said State, has all requisite power and
authority to execute and deliver this Agreement and all other documents and
instruments to be executed and delivered by it hereunder and to perform its
obligations hereunder and under such other documents and instruments in
order to contribute its Property in accordance with the terms and
conditions hereof. All necessary actions of the Property Partnership to
confer such power and authority upon the persons executing this Agreement
and all documents which are contemplated by this Agreement on its behalf
have been taken.
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of the Property Partnership and
enforceable in accordance with its terms. The performance by the Property
Partnership and the Partner of its duties and obligations under this
Agreement and the documents and instruments to be executed and delivered by
it hereunder will not conflict with, or result in a breach of, or default
under, any provision of any of its organizational documents or any
agreements, instruments, decrees, judgments, injunctions, orders, writs,
laws, rules or regulations, or any determination or award of any court or
arbitrator, to which it is a party or by which its assets are or may be
bound.
(c) (i) The Property Partnerships' Leases as of June 30, 1997 are set
forth in the Property Partnership Rent Roll annexed hereto in Schedule
5.1(d). The Property Partnerships' Leases are valid and bona fide
obligations of the landlord of its Real Property and, to the Property
Partnership's knowledge, the tenants thereunder and are in full force and
effect. Annexed hereto as Schedule 5.1(c) is a true, complete and correct
schedule of all new leases and lease renewals currently out for signature
to tenants, which Schedule 5.1(c) sets forth the terms and conditions of
such new leases or renewals; true, complete and correct copies of such new
leases and renewals have been provided to PRLP.
11
(ii) To the Property Partnership's knowledge, except as set forth on
Schedule 5.1(d): no defaults remain uncured pursuant to notices of default
sent to any Tenants and no condition exists which, solely with the passage
of time or the giving of notice or both, will become a default; the
Property Partnerships' Leases constitute all of the leases, tenancies or
occupancies affecting the Property Partnership's Real Property on the date
hereof; all Tenants have commenced occupancy; there are no agreements which
confer upon any Tenant or any other person or entity any rights with
respect to acquiring all or a portion of the Property Partnership's
Property, nor has any claim been asserted by any Tenant in writing for an
offset to its rent, nor is any Tenant currently asserting, in writing, a
concession, rebate, allowance or free rent.
(d) Annexed hereto as Schedule 5.1(d) is a listing (the "Property
Partnerships' Rent Roll") of the following as of June 30, 1997, which is
true, complete and correct in all material respects for the Property
Partnership's Buildings: (i) the name of each Tenant; (ii) the fixed rent
being billed; (iii) the expiration date or status of each Lease (including
all rights or options to renew); (iv) the Property Partnerships' Security
Deposits, if any; (v) whether there is any guaranty of a Tenant's
obligations from a third party; (vi) the base year(s) and base year amounts
for all items of rent or additional rent billed to each Tenant on that
basis; (vii) any arrearages of any Tenant beyond thirty (30) days; and
(viii) any exceptions to be set forth as required pursuant to Section
5.1(c)(ii).
(e) To the knowledge of the Property Partnership, it has performed all
of the material obligations and observed all of the covenants required of
each landlord under the terms of the Property Partnership's Lease with each
Tenant. Except as set forth on Schedule 5.1(e) annexed hereto, all work,
alterations, improvements or installations required to be made for or on
behalf of all Tenants by the Property Partnership pursuant to agreement
with Tenants have in all respects been carried out, performed and complied
with, and there is no agreement with any Tenant for the performance of any
work to be done in the future other than that which is required pursuant to
its lease. Except as set forth on Schedule 5.1(e), no work has been
performed at any of the Property Partnership's Buildings which would
require an amendment to the certificate of occupancy for such building for
which an amendment has not been obtained, and any and all work performed at
the Property Partnership's Real Property to the date hereof and to the
Closing Date has been and will be in accordance with the rules, laws and
regulations of all applicable authorities. All undisputed bills and claims
for labor performed and materials furnished to or for the benefit of the
Property Partnership's Property arising prior to the Closing Date will be
paid in full by the Property Partnership within customary time periods, not
to exceed ninety (90) days from the receipt of an invoice by the Property
Partnership. To the extent any bills and claims for labor performed and
materials furnished to or for the benefit of the Property Partnership's
Real Property prior to the Closing Date are disputed, the Property
Partnership shall commence any actions related to such bills and claims
promptly, such commencement being no later than ninety (90) days from the
receipt of an invoice by the Property Partnership, and shall diligently
prosecute same to its conclusion.
12
(f) There are no service contracts, equipment leases, union contracts,
employment agreements or other agreements affecting the Property
Partnership's Property or the operation thereof, except the contracts set
forth on Schedule 5.1(f) annexed hereto. To the Property Partnership's
knowledge with respect to its Property, all of the Property Partnerships'
Service Contracts are and will on the Closing Date be unmodified (except in
the ordinary course of business) and in full force and effect without any
material default or claim of material default by the Property Partnership.
All sums presently due and payable by the Property Partnership under the
Property Partnerships' Service Contracts applicable to its Property have
been fully paid and all sums which become due and payable between the date
hereof and the Closing Date shall be fully paid by the Property Partnership
within customary time periods, not to exceed ninety (90) days from the
receipt of an invoice by the Property Partnership.
(g) Except as set forth on Schedule 5.1(g) annexed hereto and except
as covered by insurance, as of July 31, 1997 there are no actions, suits,
labor disputes, litigation or proceedings currently pending or, to the
knowledge of the Property Partnership, threatened against or related to the
Property Partnership (with respect to the Property Partnership's Property
being sold) or to all or any part of the Property Partnership's Property or
the environmental condition thereof, or the operation thereof nor has the
Property Partnership received any notices of default from a Tenant under a
Property Partnership Lease. The Property Partnership shall be permitted to
continue to prosecute suits set forth on Schedule 5.1(g) and may initiate
suits or actions against former or current tenants.
(h) Except as set forth on Schedule 5.1(h) annexed hereto, the
Property Partnership has received no written notice and has no knowledge of
(i) any pending or contemplated annexation or condemnation proceedings, or
private purchase in lieu thereof, affecting or which may affect the
Property Partnership's Real Property, or any part thereof, (ii) any
proposed or pending proceeding to change or redefine the zoning
classification of all or any part of the Property Partnership's Real
Property, (iii) any proposed or pending special assessments affecting the
Property Partnership's Real Property or any portion thereof, (iv) any
penalties or interest due with respect to real estate taxes assessed
against the Property Partnership's Real Property and (v) any proposed
change(s) in any road or grades with respect to the roads providing a means
of ingress and egress to the Property Partnership's Real Property. The
Property Partnership agrees to furnish PRLP with a copy of any such notice
received within two (2) business days after receipt.
(i) Annexed hereto as Schedule 5.1(i)-1 is a true and correct list of
the existing mortgage debt on the Property Partnership's Real Property
which will be assumed by PRLP. No other mortgage debt exists on the
Property Partnership's Real Property. Annexed hereto as Schedule 5.1(i)-2
is a true and correct list of the existing indemnities and guarantees made
in connection with the mortgage debt on the Property Partnership's Real
Property, which indemnities and guarantees will be assumed by PRLP. To the
extent that the beneficiary of any indemnity or guaranty does not release
an indemnitor or guarantor from its obligations thereunder, PRLP agrees to
indemnify said indemnitor or guarantor against any claims, damages, losses,
costs and expenses incurred by said indemnitor or guarantors in connection
with said indemnities and guarantees after the Closing Date.
13
(j) Except as set forth on Schedule 5.1(j) annexed hereto, the
Property Partnership has no knowledge of any notices, suits, or judgments
relating to any violations (including environmental) of any laws,
ordinances or regulations affecting the Property Partnership's Real
Property, or any violations or conditions that may give rise thereto, and
has no reason to believe that any agency, board, bureau, commission,
department or body of any municipal, county, state or federal governmental
unit, or any subdivision thereof, having, asserting or acquiring
jurisdiction over all or any part of the Property Partnership's Real
Property or the management, operation, use or improvement thereof
(collectively, the "Governmental Authorities") contemplates the issuance
thereof, and there are no outstanding orders, judgments, injunctions,
decrees or writ of any Governmental Authorities against or involving the
Property Partnership or its Real Property.
(k) Annexed hereto as Schedule 5.1(k) is a schedule of all leasing
commission obligations affecting the Property Partnership's Property. The
respective obligations of the Property Partnership and PRLP with respect to
said commissions are set forth in Section 14.
(l) The Property Partnership has not currently: made a general
assignment for the benefit of creditors; filed any voluntary petition in
bankruptcy or suffered the filing of any involuntary petition by its
creditors; suffered the appointment of a receiver to take possession of
all, or substantially all, of its assets; suffered the attachment or other
judicial seizure of all, or substantially all, of its assets; admitted in
writing its inability to pay its debts as they come due; or made an offer
of settlement, extension or composition to its creditors generally.
(m) Except as set forth on Schedule 5.1(m), the Property Partnership's
Personal Property will on the Closing Date be owned by the Property
Partnership free and clear of any conditional bills of sale, chattel
mortgages, security agreements or financing statements or other security
interests of any kind, other than liens created by PRLP.
(n) Except as set forth on Schedule 5.1(n), all leasing and management
agreements as of the date hereof to which the Property Partnership is a
party are terminable by the Property Partnership upon thirty (30) days
notice.
(o) Except as set forth on Schedule 5.1(o), the Property Partnership
has no knowledge of outstanding requirements or recommendations by (i) the
insurance company(s) currently insuring the Property Partnership's
Property; (ii) any board of fire underwriters or other body exercising
similar functions, or (iii) the holder of any mortgage encumbering any of
the Property Partnership's Property, which require or recommend any repairs
or work to be done on the Property Partnership's Property of a material
nature.
(p) The combined financial statements including the income and expense
statements and the balance sheets of the Property Partnership, excluding
only those assets, liabilities and operations not contemplated to be
contributed pursuant to this Agreement
14
relating to the ownership and operation of the Property Partnership's
Property and the related combined statement of income, partners' capital
and cash flows, including the footnotes thereto (the "Property Financials")
as of and for the years ending December 31, 1994, 1995 and 1996 and the
interim statement for the period ending March 31, 1997 fairly present the
combined financial position of the Property Partnership relating to the
Property Partnership's Property as at such dates and the combined results
of operations and combined cash flows of the Property Partnership relating
to the ownership and operation of the Property Partnership's Property for
such respective periods, and except as expressly provided otherwise, in
each case in accordance with generally accepted accounting principles
("GAAP") consistently applied for the periods covered thereby.
(q) (i) Annexed hereto as Schedule 5.1(q)(i)-1 is a true and complete
list of all collective bargaining agreements, employment and consulting
agreements, executive compensation plans, bonus plans, directors' fee
arrangements, deferred compensation agreements, employee pension plans or
retirement plans, employee profit sharing plans, 401(k) savings plans,
multiemployer plans, employee stock purchase and stock option plans,
employee welfare plans, severance plans, group life insurance,
hospitalization insurance or other similar plans or arrangements (either
written or oral, but only to the extent an oral plan provides material
benefits) providing for benefits to current employees of the Property
Partnership (the "Property Partnership's Plans"). Annexed hereto as
Schedule 5.1(q)(i)-2 is a true and complete list of all employees of Palm
Springs Mile Associates, Ltd. There are no other persons employed by any
other Property Partnership.
(ii) The Property Partnership has complied and currently is in
compliance in all material respects, both as to form and operation, with
the applicable provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and the Internal Revenue Code of 1986, as
amended (the "Code"), with respect to each Property Partnership's Plan.
(iii) Notwithstanding anything else set forth herein, other than
routine claims for benefits (i) there are no pending claims, threatened
litigation (which has been communicated to the Property Partnership in
writing), administrative actions or proceedings involving any of the
Property Partnership's Plans by any participant in such plan or by any
other person, including, without limitation, any governmental agency, and
(ii) the Property Partnership has not incurred any material liability with
respect to any of the Property Partnership's Plans that is currently due
and owing and has not yet been satisfied, including, without limitation,
under ERISA, the Code or other applicable law, and no event has occurred,
and, to the knowledge of the Property Partnership, there exists no
condition or set of circumstances (other than liability for benefits under
the normal terms of any of the Property Partnership's Plans), that could
result in the imposition of any material liability on the Property
Partnership with respect to any of the Property Partnership's Plans,
including, without limitation, under ERISA, the Code or other applicable
law with respect to any of the Property Partnership's Plans or pursuant to
which PRLP may incur liability or have liability attributed to it under any
Federal, state or local law as a result of the transactions contemplated by
this Agreement. To the knowledge of the Property Partnership, there are no
facts or circumstances that could subject any of the Property
15
Partnership's Plans, related trusts, trustees, administrators or
fiduciaries of any of the Property Partnership's Plans, or PRLP or any
person dealing with any of the Property Partnership's Plans to any
penalties or excise taxes under Section 4971 through 4980B (inclusive) of
the Code.
(r) Except as required by applicable law or provided in any insurance
policy listed in Schedule 5.1(r) hereto, the Property Partnership has not
committed itself, orally (but only to the extent an oral commitment has
been made to provide a material benefit) or in writing, (A) to provide or
cause to be provided to any employee of the Property Partnership any
payments or provision of any material "welfare" or "pension" benefits (as
defined in Sections 3(1) and 3(2) of ERISA) in addition to, or in lieu of,
those payments or benefits set forth under any of the Property
Partnership's Plans, (B) to continue the payment of, or accelerate the
payment of, benefits under any of the Property Partnership's Plans, except
as expressly set forth thereunder, or (C) to provide or cause to be
provided any severance or other post-employment benefit, salary
continuation, termination, disability, death, retirement, health or medical
benefit to any employee of the Property Partnership, except as set forth
under any of the Property Partnership's Plans or as may be required by law.
In addition, except as required by applicable law, the Property Partnership
does not have any obligations for post-retirement or post-employment
benefits under any of the Property Partnership's Plans that cannot be
terminated upon no more than sixty (60) days notice without incurring any
liability thereunder.
(s) To the knowledge of the Property Partnership, there are no
aboveground or underground storage tanks or vessels which contain any
Contaminants at the Property Partnership's Real Property regardless of
whether such tanks or vessels are regulated tanks or vessels or not, except
as set forth in the environmental reports listed on Schedule 5.1(s) (the
"Partnerships' Reports").
(t) (i) The Property Partnership does not own or operate any property
which must be remediated under Environmental Laws.
(ii) Except as set forth in the Partnerships' Reports, to the Property
Partnership's knowledge, there has not been any Discharge of Contaminants
at any of Property Partnership's Real Property.
(iii) To the knowledge of the Property Partnership, no information
request or notice of potential liability has been received by the Property
Partnership issued pursuant to CERCLA on comparable state law, with respect
to the Property Partnership's Real Property.
(iv) To the knowledge of the Property Partnership, all pre-existing
aboveground and underground storage tanks and vessels, if any, at the
Property Partnership's Real Property have been removed any associated
Discharge has been remediated in accordance with and pursuant to all
applicable Environmental Laws, except as set forth in the Partnerships'
Reports.
16
(v) To the knowledge of the Property Partnership, there is no asbestos
or asbestos-containing material located at any of the Property
Partnership's Real Property, except as set forth in the Partnerships'
Reports.
(vi) Except as set forth in the Partnership Reports and to the
knowledge of the Property Partnership, there is no electrical equipment
containing polychlorinated biphenyls ("PCBs"), located on or affecting the
Property Partnership's Real Property.
(vii) To the knowledge of the Property Partnership, the Property
Partnership and the businesses operating on the Property Partnership's Real
Property, have obtained all certificates, licenses and permits (the
"Permits") required to operate the Property Partnership's Real Property
under Environmental Laws, except as set forth in the Partnerships' Reports.
To the Property Partnership's knowledge, there is no violation of any
Environmental Laws with respect to any Permits, all Permits are in full
force and effect, all permits issued to the Property Partnership are
transferable with the Property Partnership's Real Property, without
additional payment by PRLP, and shall, upon closing, be transferred to PRLP
by the Property Partnership.
(viii) Deleted prior to execution.
(ix) To the knowledge of the Property Partnership, the Property
Partnership's Real Property is in full compliance with Environmental Law.
The Property Partnership has not, and shall not knowingly permit any person
or entity to engage in any activity on the Property Partnership's Real
Property, in violation of Environmental Laws.
(x) For purposes of this Agreement, the following words shall have the
respective meaning set forth below:
(A) "Contaminants" shall include, without limitation, any
regulated substance, toxic substance, hazardous substance, hazardous
waste, pollutant or contaminant, as defined or referred to in the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901
et seq.; the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. ss.9601 et seq. ("CERCLA"); the
Water Pollution and Control Act, 33 U.S.C. ss.1251 et seq.; the Clean
Air Act, 42 U.S.C. 7401 et seq.; together with any amendments thereto,
regulations promulgated thereunder and all substitutions thereof, as
well as words of similar purport or meaning referred to in any other
applicable federal, state, county or municipal environmental statute,
ordinance, rule or regulation, including, without limitation,
asbestos, polychlorinated biphenyls, urea formaldehyde and petroleum
products and petroleum based derivatives.
(B) "Discharge" shall mean the releasing, spilling, leaking,
leaching, disposing, pumping, pouring, emitting, emptying, treating or
dumping of Contaminants at, into, onto or from the Property,
regardless of whether the result of an intentional or unintentional
action or omission.
17
(C) "Environmental Documents" shall mean all environmental
documentation in the possession or under the control of a party hereto
concerning its Property, or their environs, including, without
limitation, all sampling plans, cleanup plans, preliminary assessment
plans and reports, site investigation plans and reports, remedial
investigation plans and reports, remedial action plans and reports, or
the equivalent, sampling results, sampling result reports, data,
diagrams, charts, maps, analysis, conclusions, quality
assurance/quality control documentation, correspondence to or from any
Governmental Authority, submissions to any Governmental Authority and
directives, orders, approvals and disapprovals issued by any
Governmental Authority.
(D) "Environmental Laws" means each and every applicable federal,
state, county or municipal statute, ordinance, rule, regulation,
order, code, directive or requirement of any Governmental Authority
which impose liability or establish standards of conduct for
protection of the environment.
(u) Each Property Partnership and its affiliated entities, if any, has
paid all Taxes due and payable prior to the Closing and timely filed all
returns and reports required to be filed prior to the Closing with respect
to the ownership and operation of the Property Partnership's Real Property
and (by it or any predecessor entity) for which PRLP could be held liable
or a claim made against the acquired property. Each such tax return or
report is true and correct in all material respects. Each Property
Partnership and its affiliated entities have paid or provided for a reserve
for all Taxes related to the period ending on the Closing Date but required
to be paid after the Closing Date with respect to the operation of the
Property Partnership's Real Property (by it or any predecessor entity) for
which PRLP could be held liable or a claim made against the acquired
property. Each Property Partnership has provided or will provide PRLP with
a copy of all returns and reports filed for its 1994, 1995 and 1996 taxable
year and, if any, returns or reports filed in 1997, prior to Closing.
Except as set forth in Schedule 5.1(u), there are no audits or other
proceedings by any Governmental Authorities pending or, to the knowledge of
the Property Partnership and each of its affiliated entities, threatened
with respect to the Taxes resulting from the ownership and operation of the
Property Partnership's Real Property (by it or any predecessor entities)
for which PRLP could be held liable or a claim made against the acquired
property and no agreement extending the period for assessment and
collection has been executed with respect thereto. To the knowledge of each
Property Partnership and its affiliated entities, no assessment of Taxes is
proposed against the Property Partnership (including any predecessor
entities) or the Property Partnership's Real Property. The Property
Partnership is not party to, and has no liability under (including
liability with respect to a predecessor entity), any indemnification,
allocation or sharing agreement with respect to Taxes. True and complete
copies of all federal, state and local income or franchise tax returns
filed by the Property Partnerships for 1993, 1994, 1995 and 1996 and all
communications thereto will be delivered to PRLP or have been or will
hereafter promptly be made available to representatives of PRLP.
(v) No representation or warranty made by the Property Partnership or
the Partner contained in this Agreement, and no statement contained in any
document, certificate, Schedule or Exhibit furnished or to be furnished by
or on behalf of the
18
Property Partnership to National or PRLP or any of its designees or
affiliates pursuant to this Agreement contains or will contain any untrue
statement of a material fact (taking into account any knowledge,
materiality or other similar qualifiers contained therein) or omits or will
omit to state any material fact necessary, in light of the circumstances
under which it was or will be made, in order to make the statements herein
or therein not misleading or necessary in order to fully and fairly provide
the information required to be provided in any such document, certificate,
Schedule or Exhibit.
5.2 In order to induce PRLP to issue the Property Partnerships' Units, the
Property Partnerships and each Partner hereby acknowledge their understanding
that the issuance of the Property Partnerships' Units is intended to be exempt
from registration under the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations in effect thereunder. In furtherance thereof, each
Property Partnership with respect to itself and its Property Partnership's Unit
Holders only and each Partner with respect to itself only, represents and
warrants to National, New Reit and to PRLP as follows:
(a) The Property Partnership and the Property Partnership's Unit
Holders are acquiring the Property Partnership's Units solely for their own
account for the purpose of investment and not as a nominee or agent for any
other person and not with a view to, or for offer or sale in connection
with, any distribution of any thereof other than to its Partners. The
Property Partnership and the Property Partnership's Unit Holders agrees and
acknowledges that it is not permitted to offer, transfer, sell, assign,
pledge, hypothecate or otherwise dispose of ("Transfer") any of the
Property Partnership's Units except as provided in this Agreement and the
Agreement of Limited Partnership of PRLP (the "PRLP Agreement"), a copy of
which is annexed hereto as Exhibit 5.2(a).
(b) The Property Partnership and the Property Partnership's Unit
Holders are knowledgeable, sophisticated and experienced in business and
financial matters; the Property Partnership and the Property Partnership's
Unit Holders fully understand the limitations on transfer described in this
Agreement and the PRLP Agreement. The Property Partnership and the Property
Partnership's Unit Holders are able to bear the economic risk of holding
the Property Partnership's Units for an indefinite period and are able to
afford the complete loss of their investment in the Property Partnership's
Units; the Property Partnership and the Property Partnership's Unit Holders
have received and reviewed the PRLP Agreement and copies of the documents
filed by National since its inception under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and all registration statements and
related prospectuses and supplements filed by National and declared
effective under the Act since its inception (collectively, the "SEC
Documents") and have been given the opportunity to obtain any additional
information or documents and to ask questions and receive answers about
such documents, National, New Reit and PRLP and the business and prospects
of New Reit and PRLP which the Property Partnership and the Property
Partnership's Unit Holders deem necessary to evaluate the merits and risks
related to its investment in the Property Partnership's Units; and the
Property Partnership and the Property Partnership's Unit Holders understand
and have taken cognizance of all risk factors related to the purchase of
the Property Partnership's Units.
19
(c) The Property Partnership and the Property Partnership's Unit
Holders acknowledge that they have been advised that (i) the Property
Partnership's Units must be held indefinitely, and the Property Partnership
and the Property Partnership's Unit Holders will continue to bear the
economic risk of the investment in the Property Partnership's Units, unless
they are redeemed pursuant to the PRLP Agreement or are subsequently
registered under the Act or an exemption from such registration is
available, (ii) it is not anticipated that there will be any public market
for the Property Partnership's Units at anytime, (iii) Rule 144 promulgated
under the Act is not available with respect to the sale of any securities
of PRLP (and that upon redemption of the Property Partnership's Units in
PRLP for shares of Common Stock of New Reit a new holding period under Rule
144 may commence), and PRLP has made no covenant, and makes no covenant, to
make Rule 144 available with respect to the sale of any securities of PRLP
(although New Reit and PRLP have agreed to register the Common Stock
pursuant to the Registration Rights Agreement), (iv) a restrictive legend
as set forth in Section 5.4(a) below shall be placed on the certificates or
instruments representing the Property Partnership's Units, and (v) a
notation shall be made in the appropriate records of PRLP indicating that
the Property Partnership's Units are subject to restrictions on transfer.
(d) The Property Partnership and the Property Partnership's Unit
Holders also acknowledge that (i) the redemption of the Property
Partnership's Units for shares of Common Stock is subject to certain
restrictions contained in the PRLP Agreement; and (ii) the shares of said
Common Stock which may be received upon such a redemption may, under
certain circumstances, be restricted securities and be subject to
limitations as to transfer, and therefore subject to the risks referred to
in Section 5.2(c) above. Notwithstanding anything herein or in the PRLP
Agreement to the contrary, the Property Partnership hereby acknowledges and
agrees that it and all the Property Partnership's Unit Holders may not
exercise the Redemption Rights (as defined in the PRLP Agreement) until
after the date which is one year from the Closing Date.
(e) The Property Partnership and each of the Property Partnership's
Unit Holders is an "accredited investor" (as such term is defined in Rule
501 (a) of Regulation D under the Act).
5.3 In order to induce National, the Property Partnerships, New Reit and
PRLP to perform as required hereunder, each Partner hereby represents the
following only with respect to itself and its interest in the Interest
Contributing Property Partnership:
(a) The Partner, where applicable, is a duly organized and validly
existing entity as set forth on Schedule 5.3 (a) annexed hereto, organized
under the laws of the State set forth opposite its name on Schedule 5.3
(a), is duly authorized to transact business in said State, has all
requisite power and authority to execute and deliver this Agreement and all
other documents and instruments to be executed and delivered by it
hereunder and to perform its obligations hereunder and under such other
documents and instruments in order to contribute its interest in accordance
with the terms and conditions hereof. All necessary actions of the Partner
to confer such power and authority upon the persons executing this
Agreement and all documents which are contemplated by this Agreement on its
behalf have been taken.
20
(b) This Agreement, when duly executed and delivered, will be the
legal, valid and binding obligation of the Partner and enforceable in
accordance with its terms. The performance by the Partner of its duties and
obligations under this Agreement and the documents and instruments to be
executed and delivered by it hereunder will not conflict with, or result in
a breach of, or default under, any provision of any of its organizational
documents, where applicable, or any agreements, instruments, decrees,
judgments, injunctions, orders, writs, laws, rules or regulations, or any
determination or award of any court or arbitrator, to which it is a party
or by which its assets are or may be bound.
(c) The Partner is, and immediately prior to the Closing will be, the
owner of all of its right, title and interest in the Interest Contributing
Property Partnership and at Closing said right, title and interest shall be
free and clear of any mortgage, pledge, lien, encumbrance, security
interest, option, charges, claim or right of interest of any third party of
any nature whatsoever, except as set forth on Schedule 5.3(c).
(d) The Partner's interest in the Interest Contributing Property
Partnership is validly issued and fully paid and has been issued in
compliance with applicable securities, partnership, limited liability
company and other law. There are no rights, subscriptions, warrants,
options, rights of first refusal, conversion rights, preemptive rights or
agreements of any kind outstanding to purchase or to otherwise acquire the
Partner's interest which have not been waived in connection with the
transactions contemplated hereby.
(e) The Partner is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as defined in the Code), and is,
therefore, not subject to the provisions of Sections 897(a) or 1445 of the
Code related to the withholding of sales proceeds to foreign persons. The
Partner shall execute at Closing such certificates or affidavits reasonably
necessary to document the inapplicability of the Code sections referred to
above ("FIRPTA Affidavits").
5.4 Except as expressly provided herein, the representations and warranties
made by the Property Partnerships and the Partners in this Agreement shall not
survive the Closing Date and shall be merged in the delivery of the Deed and the
Interest Assignment. Notwithstanding the foregoing, (a) to the extent that an
anchor Tenant shall not deliver an Estoppel Certificate, the representations and
warranties made in Section 5.1(d) of this Agreement by the Property Partnerships
having entered into a Lease with said anchor Tenant shall survive the Closing
Date for a period of six (6) months as to any matters contained in the form of
Estoppel Certificate agreed to by the parties and (b) the representations and
warranties made in Sections 5.2 and 5.3 shall survive the Closing. The Property
Partnership agrees to indemnify and defend PRLP, and to hold PRLP harmless from
and against any and all claims, liabilities, losses, deficiencies and damages as
well as reasonable expenses (including attorney's, consulting and engineering
fees), and interest and penalties related thereto, incurred by PRLP, by reason
of or resulting from any breach, of the representations and warranties of the
Property Partnership contained in Section 5.1(d) that survive the closing. The
foregoing notwithstanding, PRLP shall not have a right to bring a claim against
the Property Partnership or any Partner by virtue of any of the representations
or warranties being false or misleading unless (i) such claim is brought on
21
or prior to the date through which such representation or warranty survives, and
(ii) until notice of the false or misleading representation or warranty has been
given to the Property Partnership or the Partner and the Property Partnership or
the Partner has had a reasonable opportunity to cure same. The Property
Partnerships and the Partners shall be severally liable for any damages
hereunder; provided, however, the liability of the Property Partnership and the
Property Partnerships' Unit Holders shall be limited to the Property
Partnership's Units only, and the Property Partnerships and the Property
Partnerships' Unit Holders shall have no liability for any sum exceeding such
Units and shall have no liability whatsoever for any money damages.
5.5 The Property Partnerships and the Partners hereby acknowledge that each
Certificate representing the Property Partnerships' Units shall bear the
following legend:
"THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES
WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT DATED AS OF _____________, 1997
(A COPY OF WHICH IS ON FILE WITH THE PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED
IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR (B) IF THE OPERATING PARTNERSHIP HAS BEEN
FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER THAT SUCH
TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT
FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN
EFFECT THEREUNDER. IN ADDITION, THE UNITS ARE SUBJECT TO THE PROVISIONS OF
SECTION 19.1 OF A CERTAIN CONTRIBUTION AND EXCHANGE AGREEMENT DATED AUGUST 11,
1997 (A COPY OF WHICH IS ON FILE WITH THE PARTNERSHIP)."
6. REPRESENTATIONS AND WARRANTIES OF NATIONAL AND NEW REIT.
6.1 In order to induce the Property Partnerships, the Partners, New Reit
and PRLP to perform as required hereunder, National hereby warrants and
represents the following:
(a) National is a duly organized and validly existing business trust
organized and in good standing under the laws of the State of
Massachusetts, has all requisite power and authority to execute and deliver
this Agreement and all other documents and instruments to be executed and
delivered by it hereunder, and to perform its obligations hereunder and
under such other documents and instruments in order to permit PRLP to
acquire the National Property in accordance with the terms and conditions
hereof. All necessary actions of the trustees of National to confer such
power and authority upon the persons executing this
22
Agreement have been taken and all documents which are contemplated by this
Agreement on its behalf have been taken or will be taken prior to Closing.
(b) This Agreement and the agreements and other documents to be
executed and delivered by National hereunder, when duly executed and
delivered, will be the legal, valid and binding obligation of National,
enforceable in accordance with the terms of this Agreement. The execution
and delivery of this Agreement and the performance by National of each of
its duties and obligations under this Agreement and the documents and
instruments to be executed and delivered by each of them hereunder will not
conflict with, or result in a breach of, or default under, any provision of
any of the organizational documents of National or any agreements,
instruments, decrees, judgments, injunctions, orders, writs, laws, rules or
regulations, or any determination or award of any court or arbitrator, to
which National is a party or by which each of its assets are or may be
bound.
(c) National shall use its best efforts to seek, obtain and deliver
the consent and approval to the transactions contemplated hereby, including
(i) the affirmative vote of the holders of a majority of the issued and
outstanding shares of beneficial interest of National entitled to vote,
(ii) the affirmative vote of a plurality of votes cast by unaffiliated
shareholders of National and (iii) the amendment of certain provisions of
the Restated Declaration of Trust of National to permit the transactions
contemplated hereby (collectively, the "National Shareholder Approval").
(d) National has caused to be delivered to PRLP copies of the SEC
Documents and will cause to be delivered to PRLP copies of such additional
documents as may be filed by National pursuant to the Act or the Exchange
Act on or prior to the Closing Date. The SEC Documents were, and those
additional documents filed between the date hereof and the Closing will be,
prepared and filed in compliance with the rules and regulations promulgated
by the SEC, and do not and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein in order to make the statements contained therein, in light of the
circumstances under which they were made or will be made, not misleading.
(e) The consolidated financial statements included in the SEC
Documents have been prepared in accordance with GAAP applied on a
consistent basis during the period involved (except as may be indicated in
the notes thereto or, in the case of the unaudited statements, as permitted
by Form 10-Q) and present fairly (subject, in the case of the unaudited
statements, to normal, recurring year-end audit adjustments) the
consolidated financial position of National at the dates thereof and the
consolidated results of operations and cash flows for the periods then
ended.
(f) No action, suit, claim, investigation or proceeding, whether legal
or administrative or in mediation or arbitration, is pending or, to the
best of National's knowledge, threatened, at law or in equity, against
National before or by any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality which would prevent National from performing its
obligations pursuant to this Agreement. There are no judgments, decrees or
orders entered on a suit or proceeding against National, an adverse
23
decision which might, or which judgment, decree or order does, adversely
affect National 's ability to perform its obligations pursuant to, or the
Property Partnerships' or PRLP's rights under, this Agreement, or which
seeks to restrain, prohibit, invalidate, set aside, rescind, prevent or
make unlawful this Agreement or the carrying out of this Agreement or the
transactions contemplated hereby.
(g) The execution and delivery of this Agreement and the performance
by National of its obligations hereunder do not and will not conflict with
or violate any law, rule, judgment, regulation, order, writ, injunction or
decree of any court or governmental or quasi-governmental entity with
jurisdiction over National, including, without limitation, the United
States of America, or any decision or ruling of any arbitrator to which
National is a party or by which National is bound or affected.
(h) National has no Subsidiaries and no interests or investments in
any partnership, trust or other entity or organization. For purposes of
this Agreement, the terms "Subsidiary" and "Subsidiaries" shall mean (i)
any entity of which National (or other specified entity) shall own directly
or indirectly through a subsidiary, a nominee arrangement or otherwise (x)
at least a majority of the outstanding capital stock (or other shares of
beneficial interest) or (y) at least a majority of the partnership, joint
venture or similar interests, and (ii) any entity in which National (or
another specified entity) is a general partner or joint partner.
(i) Except as disclosed in the SEC Documents filed with the SEC prior
to the date hereof or in Schedule 6.1(i), National has conducted its
business only in the ordinary course of such business and has not (i) sold
or acquired any real estate or (ii) leased all or substantially all of any
property or (iii) entered into any financing arrangements in connection
therewith or (iv) granted an option to purchase or lease all or
substantially all of any property or (v) entered into a contract, letter of
intent, term sheet or other similar instrument to do any of the foregoing
and there has not been any change, circumstance or event that has resulted
in a material adverse effect on the business properties, results of
operations or financial condition of National, taken as a whole.
(j) Except as set forth on Schedule 6.1(j), National does not have any
material liabilities or obligations of any nature (whether absolute,
accrued, contingent or otherwise) except for (i) liabilities or obligations
reflected or reserved against in its June 30, 1997 unaudited consolidated
balance sheet, (ii) liabilities and obligations relating to outstanding
leases that are not required to be disclosed under GAAP and (iii) current
liabilities incurred in the ordinary course of business since the date of
such balance sheet.
(k) As of the date hereof: (A) the authorized capital stock of
National consists of an unlimited number of shares, (B) all of the
outstanding shares of capital stock of National have been duly and validly
issued and are fully paid and non-assessable.
(l) (i) National (A) has filed its federal income tax return for the
tax year that ended on December 31, 1996 as a real estate investment trust
within the meaning of Sections 856 and 857 of the Code ("REIT"), (B) has
complied with all applicable provisions of
24
the Code relating to a REIT for 1991, 1992, 1993, 1994, 1995 and 1996, (C)
has operated, and intends to continue to operate, in such a manner as to
qualify as a REIT through the Closing Date and (D) has not taken or omitted
to take any action which would reasonably be expected to result in a
challenge to its status as a REIT, and no such challenge is pending or, to
National's knowledge, threatened.
(ii) National has timely filed with the appropriate taxing authorities
all tax returns required to be filed by it or has timely requested
extensions and any such request has been granted and has not expired. Each
such tax return is complete and accurate in all material respects. All
Taxes shown as owed by National on any tax return have been paid or
accrued, except for taxes being contested in good faith and for which
adequate reserves have been taken. National has not executed or filed with
the Internal Revenue Service or any other taxing authority any agreement
now in effect extending the period for assessment or collection of any Tax.
Except as set forth in Schedule 6.1(l)(ii), National is not a party to any
audit, material pending action or proceedings by any taxing authority for
assessment or collection of any Tax, and no material claim for assessment
or collection of any Tax has been asserted against it. True and complete
copies of all federal, state and local income or franchise tax returns and
reports filed by National for 1993, 1994, 1995 and 1996 and all
communications relating thereto will be delivered to the Property
Partnerships and PRLP or have been or will hereafter promptly be made
available to representatives of the Property Partnerships and PRLP. No
claim has been made by an authority in a jurisdiction where National does
not file tax returns that it is or may be subject to taxation by the
jurisdiction. Except as set forth in Schedule 6.1(l)(ii), there is no
material dispute or claim concerning any Tax liability of National, (A)
claimed or raised by any taxing authority in writing or (B) as to which
National has knowledge, and National has not entered into nor intends to
enter into any agreements with any taxing authority, including but not
limited to closing, indemnification, allocation, sharing or similar
agreements.
(iii) To its knowledge, as of the date hereof, National is a
"domestically-controlled" REIT within the meaning of Code Section
897(h)(4)(B).
(iv) To its knowledge, except as set forth in Schedule 6.1(l)(iv), no
person or entity which would be treated as an "individual" for purposes of
Section 542(a)(2) of the Code (as modified by Section 856(h) of the Code)
owns or would be considered to own (taking into account the ownership
attribution rules under Section 544 of the Code, as modified by Section
856(h) of the Code) in excess of 9.8% of the value of the outstanding
equity interest in National.
(v) Each corporation or association which is taxable as a corporation
for federal income tax purposes and in which National has a direct or
indirect interest is either (i) a "qualified REIT subsidiary", as such term
is defined in Code Section 856(i), or (ii) a corporation of which less than
ten (10%) percent of the voting securities are owned by National and of
which the total securities owned by National represent less than five
percent of the value of the total assets of National, within the meaning of
Code Section 856(c)(5).
25
(m) National is not in default under, or in violation of, any
provision of its organizational documents.
(n) All of National's real property and other material assets are
owned by National directly.
(o) Annexed hereto as Schedule 6.1(o) is a true, complete and correct
schedule of all of the National Leases as of June 30, 1997. The National
Leases are valid and bona fide obligations of the landlord and, to
National's knowledge, the tenants thereunder and are in full force and
effect. To National's knowledge, except as set forth on Schedule 6.1(o): no
defaults remain uncured pursuant to notices of default sent to any Tenants
and no condition exists which, solely with the passage of time or the
giving of notice or both, will become a default; National has not received
any notices of default under the National Leases; the National Leases
constitute all of the leases, tenancies or occupancies affecting the
National Real Property on the date hereof; all Tenants have commenced
occupancy; there are no agreements which confer upon any Tenant or any
other person or entity any rights with respect to acquiring all or a
portion of the National Property, nor has any claim been asserted by any
Tenant in writing for an offset to its rent, nor is any Tenant currently
asserting, in writing, a concession, rebate, allowance or free rent.
Annexed hereto as Schedule 6.1(o)-2 is a true, complete and correct
schedule of all new leases and lease renewals currently out for signature
to tenants, which Schedule 6.1(o)-2 sets forth the terms and conditions of
such new leases or renewals; true, complete and correct copies of such new
leases and renewals have been provided to the Property Partnerships.
(p) Annexed hereto as Schedule 6.1(p) is a listing (the "National Rent
Roll") of the following as of June 30, 1997, which is true, complete and
correct in all material respects for each National Building: (i) the name
of each Tenant; (ii) the fixed rent actually being billed; (iii) the
expiration date or status of each Lease (including all rights or options to
renew); (iv) the National Security Deposit, if any; (v) whether there is
any guaranty of a Tenant's obligations from a third party, and if so the
nature of said guaranty; (vi) arrangements under which any Tenant is
occupying space on the date hereof or will in the future, occupy such
space; (vii) any written notices given by any Tenant of an intention to
vacate space in the future; (viii) the base year(s) and base year amounts
for all items of rent or additional rent billed to each Tenant on that
basis; and (ix) any arrearages of any Tenant beyond thirty (30) days.
(q) To the knowledge of National, National has performed all of the
material obligations and observed all of the covenants required of the
landlord under the terms of the National Leases. Except as set forth on
Schedule 6.1(q) annexed hereto, all work, alterations, improvements or
installations required to be made for or on behalf of all Tenants under the
National Leases have in all respects been carried out, performed and
complied with, and there is no agreement with any Tenant for the
performance of any work to be done in the future other than that which is
required pursuant to its Lease. Except as set forth on Schedule 6.1(q), no
work has been performed at any National Building which would require an
amendment to the certificate of occupancy for such National Building for
which an amendment has not been obtained, and any and all work performed at
the National Real Property to the date hereof and to the Closing Date has
been and will be in accordance with the rules, laws and
26
regulations of all applicable authorities. All undisputed bills and claims
for labor performed and materials furnished to or for the benefit of the
National Property arising prior to the Closing Date will be paid in full by
National within customary time periods, not to exceed ninety (90) days from
the receipt of an invoice by National. To the extent any bills and claims
for labor performed and materials furnished to or for the benefit of the
National Real Property prior to the Closing Date are disputed, National
shall commence any actions related to such bills and claims promptly, such
commencement being no later than ninety (90) days from the receipt of an
invoice by National, and shall diligently prosecute same to its conclusion.
(r) There are no service contracts, equipment leases, union contracts,
employment agreements or other agreements affecting the National Property
or the operation thereof, except the National Service Contracts and the
contracts set forth on Schedule 6.1(r) annexed hereto. To National 's
knowledge, all of the National Service Contracts are and will on the
Closing Date be unmodified (except in the ordinary course of business) and
in full force and effect without any material default or claim of material
default by National. All sums presently due and payable by National under
the Service Contracts have been fully paid and all sums which become due
and payable between the date hereof and the Closing Date shall be fully
paid by National within customary time periods, not to exceed ninety (90)
days from the receipt of an invoice by National.
(s) Except as set forth on Schedule 6.1(s) annexed hereto and except
as covered by insurance, there are no actions, suits, labor disputes,
litigation or proceedings currently pending or, to the knowledge of
National, threatened against or related to National (with respect to the
National Property being sold) or to all or any part of the National
Property or the environmental condition thereof, or the operation thereof.
National shall be permitted to continue to prosecute suits set forth on
Schedule 6.1(s) and may initiate suits or actions against former or current
tenants.
(t) Except as set forth on Schedule 6.1(t) annexed hereto, National
has received no written notice and has no knowledge of (i) any pending or
contemplated annexation or condemnation proceedings, or private purchase in
lieu thereof, affecting or which may affect the National Real Property, or
any part thereof, (ii) any proposed or pending proceeding to change or
redefine the zoning classification of all or any part of the National Real
Property, (iii) any proposed or pending special assessments affecting the
National Real Property or any portion thereof, (iv) any penalties or
interest due with respect to real estate taxes assessed against the
National Real Property and (v) any proposed change(s) in any road or grades
with respect to the roads providing a means of ingress and egress to the
National Real Property. National agrees to furnish the Property
Partnerships with a copy of any such notice received within two (2)
business days after receipt.
(u) National has provided PRLP with the reports set forth on Schedule
6.1(u) annexed hereto, which constitute all third-party reports in
National's possession or under its control related to the physical
condition of the National Real Property which have been prepared within the
last four (4) years.
27
(v) Except as set forth on Schedule 6.1(v) annexed hereto, National
has no knowledge of any notices, suits, or judgments relating to any
violations (including environmental) of any laws, ordinances or regulations
affecting the National Real Property, or any violations or conditions that
may give rise thereto, and has no reason to believe that any agency, board,
bureau, commission, department or body of any municipal, county, state or
federal governmental unit, or any subdivision thereof, having, asserting or
acquiring jurisdiction over all or any part of the National Real Property
or the management, operation, use or improvement thereof (collectively, the
"Governmental Authorities") contemplates the issuance thereof, and there
are no outstanding orders, judgments, injunctions, decrees or writ of any
Governmental Authorities against or involving National or the National Real
Property.
(w) Annexed hereto as Schedule 6.1(w) is a schedule of all leasing
commission obligations affecting the National Property. The respective
obligations of National and the Property Partnerships with respect to said
commissions are set forth in Section 13.
(x) National has not made a general assignment for the benefit of
creditors, filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by National's creditors, suffered the
appointment of a receiver to take possession of all, or substantially all,
of such National's assets, suffered the attachment or other judicial
seizure of all, or substantially all, of such National's assets, admitted
in writing its inability to pay its debts as they come due or made an offer
of settlement, extension or composition to its creditors generally.
(y) Except as set forth on Schedule 6.1(y), the National Personal
Property will on the Closing Date be owned by National free and clear of
any conditional bills of sale, chattel mortgages, security agreements or
financing statements or other security interests of any kind, other than
liens created by PRLP.
(z) Except as set forth on Schedule 6.1(z), all leasing and management
agreements as of the date hereof to which National is a party are
terminable by National upon thirty (30) days notice.
(aa) Annexed hereto as Schedule 6.1(aa)-1 is a true and correct list
of the existing mortgage debt encumbering the National Real Property which
is to be assumed by PRLP. No other mortgage debt exists on the National
Real Property. Annexed hereto as Schedule 6.1(aa)-2 is a true and correct
list of the existing indemnities and guaranties made in connection with the
mortgage debt on the National Real Property, which indemnities and
guarantees will be assumed by PRLP. To the extent that the beneficiary of
any indemnity or guaranty does not release an indemnitor or guarantor from
its obligations thereunder, PRLP agrees to indemnify said indemnitor or
guarantor against any claims, damages, losses, costs and expenses incurred
by said indemnitor or guarantor in connection with said indemnities or
guarantees after the Closing Date.
(bb) To the knowledge of National, there are no aboveground or
underground storage tanks or vessels which contain any Contaminants at the
National Real
28
Property regardless of whether such tanks or vessels are regulated tanks or
vessels or not, except as set forth on Schedule 6.1(bb).
(cc) National has no knowledge of outstanding requirements or
recommendations by (i) the insurance company(s) currently insuring the
National Property; (ii) any board of fire underwriters or other body
exercising similar functions, or (iii) the holder of any mortgage
encumbering any of the National Property, which require or recommend any
repairs or work to be done on the National Property of a material nature.
(dd) The combined financial statements, including the income and
expense statements and the balance sheets of National and its affiliates,
excluding only those assets, liabilities and operations not contemplated to
be contributed pursuant to this Agreement relating to the ownership and
operation of the National Property and the related combined statement of
income, partners' capital and cash flows, including the footnotes thereto
(the "Property Financials") as of and for the years ending December 31,
1994, 1995, 1996 and the interim for the period ending March 31, 1997,
which shall be reviewed by the Accountant, fairly present the combined
financial position of National relating to the National Property as at such
dates and the combined results of operations and combined cash flows of
National LLC relating to the ownership and operation of the National
Property for such respective periods, in each case, except as may be
expressly provided to the contrary, in accordance with GAAP consistently
applied for the periods covered thereby.
(ee) (i) Annexed hereto as Schedule 6.1(ee)(i) is a true and complete
list of all collective bargaining agreements, employment and consulting
agreements, executive compensation plans, bonus plans, directors' fee
arrangements, deferred compensation agreements, employee pension plans or
retirement plans, employee profit sharing plans, 401(k) savings plans,
multiemployer plans, employee stock purchase and stock option plans,
employee welfare plans, severance plans, group life insurance,
hospitalization insurance or other similar plans or arrangements (either
written or oral, but only to the extent an oral plan provides material
benefits) providing for benefits to current employees of National (the
"National Plans").
(ii) National has complied and currently is in compliance in all
material respects, both as to form and operation, with the applicable
provisions of ERISA and the Code with respect to each National Plan.
(iii) Notwithstanding anything else set forth herein, other than
routine claims for benefits (i) there are no pending claims, threatened
litigation (which has been communicated to National in writing),
administrative actions or proceedings involving any of the National Plans
by any participant in such plan or by any other person, including, without
limitation, any governmental agency, and (ii) National has not incurred any
material liability with respect to any of the National Plans that is
currently due and owing and has not yet been satisfied, including, without
limitation, under ERISA, the Code or other applicable law, and no event has
occurred and, to the knowledge of the current partners of National, there
exists no condition or set of circumstances (other than liability for
benefits under the normal terms of any of the National Plans) that could
result in the imposition of any material liability on National
29
with respect to any of the National Plans, including, without limitation,
under ERISA, the Code or other applicable law with respect to any of the
National Plans or pursuant to which PRLP may incur liability or have
liability attributed to it under any Federal, state or local law as a
result of the transactions contemplated by this Agreement. To the knowledge
of National, there are no facts or circumstances that could subject any of
the National Plans, related trusts, trustees, administrators or fiduciaries
of any of the National Plans, or PRLP or any person dealing with any of the
National Plans to any penalties or excise taxes under Section 4971 through
4980B (inclusive) of the Code.
(ff) Except as required by applicable law or provided in any insurance
policy listed in Schedule 6.1(ff) hereto, National has not committed
itself, orally (but only to the extent an oral commitment has been made to
provide a material benefit) or in writing, (A) to provide or cause to be
provided to any employee of National any payments or provision of any
material "welfare" or "pension" benefits (as defined in Sections 3(l) and
3(2) of ERISA) in addition to, or in lieu of, those payments or benefits
set forth under any of the National Plans, (B) to continue the payment of,
or accelerate the payment of, benefits under any of the National Plans,
except as expressly set forth thereunder, or (C) to provide or cause to be
provided any severance or other post-employment benefit, salary
continuation, termination, disability, death, retirement, health or medical
benefit to any employee of National, except as set forth under any of the
National Plans or as may be required by law. In addition, except as
required by applicable law, National does not have any obligations for
post-retirement or post-employment benefits under any of the National Plans
that cannot be terminated upon no more than sixty (60) days notice without
incurring any liability thereunder.
(gg) (i) National does not own or operate any property which must be
remediated under Environmental Laws.
(ii) Except as disclosed in Schedule 6.1(gg)(ii), to National's
knowledge, there has not been any Discharge of Contaminants at the National
Real Property.
(iii) To the knowledge of National, no information request or notice
of potential liability has been received by National issued pursuant to
CERCLA or comparable state laws, with respect to the National Real
Property.
(iv) To the knowledge of National, all pre-existing aboveground and
underground storage tanks and vessels, if any, at the National Real
Property have been removed and any associated Discharge has been remediated
in accordance with and pursuant to all applicable Environmental Laws,
except as set forth on Schedule 6.1(gg)(iv).
(v) To the knowledge of National, there is no asbestos or asbestos
containing material located at any of the National Real Property except as
set forth on Schedule 6.1(gg)(v).
30
(vi) Except as set forth in Schedule 6.1(gg)(vi), to the knowledge of
National, there is no electrical equipment containing PCBS located on or
affecting the National Real Property.
(vii) To the knowledge of National, National and all the businesses
operating on the National Real Property have obtained all Permits required
to operate the National Real Property under Environmental Laws, except as
set forth in Schedule 6.1(gg)(vii). To National's knowledge, there is no
violation of any Environmental Laws with respect to any Permits, all
Permits are in full force and effect, all Permits issued to National are
transferable with the National Real Property , without additional payment
by PRLP, and shall, upon closing, be transferred to PRLP by National.
(viii) Deleted prior to execution.
(ix) To the knowledge of National, The National Real Property is in
full compliance with Environmental Laws. National has not, and shall not
knowingly permit any person or entity to engage in any activity on the
National Real Property, in violation of Environmental Laws.
(hh) Annexed hereto as Schedule 6.1(hh) is a listing of the following,
which is true, complete and correct in all material aspects for each Real
Property contributed to PRLP: (i) its adjusted basis as of June 30, 1997;
(ii) the date placed in service; (iii) the depreciation method; and (iv)
the remaining useful life.
(ii) No representation or warranty made by National contained in this
Agreement, and no statement contained in any document, certificate,
Schedule or Exhibit furnished or to be furnished by or on behalf of
National to the Property Partnerships or PRLP or any of its designees or
affiliates pursuant to this Agreement contains or will contain any untrue
statement of a material fact (taking into account any knowledge,
materiality or other similar qualifiers contained therein) or, to
National's knowledge, omits or will omit to state any material fact
necessary, in light of the circumstances under which it was or will be
made, in order to make the statements herein or therein not misleading or
necessary in order to fully and fairly provide the information required to
be provided in any such document, certificate, Schedule or Exhibit.
(jj) Annexed hereto as Schedule 6.1(jj) is a true and accurate copy of
all the record owners of National and, except as set forth on said Schedule
6.1(jj), no individual owns more than five (5%) percent of the stock of
National.
The representation and warranties made by National in this Agreement shall
not survive the Closing Date.
6.2 In order to induce the Property Partnerships, the Partners, National
and PRLP to perform as required hereunder, New Reit represents and warrants to
the Property Partnerships, the Partners, National and PRLP as follows:
31
(a) New Reit is a duly organized and validly existing corporation
organized and in good standing under the laws of the State of Maryland, has
all requisite powers and authority to execute and deliver this Agreement
and all other documents and instruments to be executed and delivered by it
hereunder, and to perform its obligations hereunder and under such other
documents and instruments. All necessary actions of the corporate offices
of New Reit to confer such power and authority upon the persons executing
this Agreement and all documents which are contemplated by this Agreement
on its behalf have been taken. New Reit is a newly formed corporation which
has not engaged in any activities other than in connection with the
transactions contemplated hereby.
(b) This Agreement and the agreements and other documents to be
executed and delivered by New Reit hereunder, when duly executed and
delivered, will be the legal, valid and binding obligation of New Reit,
enforceable in accordance with the terms of this Agreement. The execution
and delivery of this Agreement and the performance by New Reit of its
duties and obligations under this Agreement and the documents and
instruments to be executed and delivered by New Reit hereunder will not
conflict with, or result in a breach of , or default under, any provision
of any of the organizational documents of New Reit or any agreements,
instruments, decrees, judgments, injunctions, orders, writs, laws, rules or
regulations, or any determination or award of any court or arbitrator, to
which New Reit is a party or by which its assets are or may be bound.
(c) No action suit, claim, investigation or proceeding, whether legal
or administrative or in mediation or arbitration, is pending or, to the
best of New Reit's knowledge, threatened, at law or in equity, against New
Reit's before or by any court or federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality which would prevent New Reit's from performing its
obligations pursuant to this Agreement. There are no judgments, decrees or
orders entered on a suit or proceeding against New Reit, an adverse
decision which might, or which judgment, decree or order does, adversely
affect New Reit's ability to perform its obligations pursuant to, or any
party's rights under, this Agreement, or which seeks to restrain, prohibit,
invalidate, set aside, rescind, prevent or make unlawful this Agreement or
the carrying out of this Agreement or the transactions contemplated hereby.
(d) The execution and delivery of this Agreement and the performance
by New Reit of its obligations hereunder do not and will not conflict with
or violate any law, rule, judgment, regulation, order, writ, injunction or
decree of any court or governmental or quasi-governmental entity with
jurisdiction over New Reit, including, without limitation, the United
States of America, the State of Maryland or any political subdivision of
any of the foregoing, or any decision or ruling of any arbitrator to which
New Reit is a party or by which it is bound or affected.
(e) New Reit has not made a general assignment for the benefit of
creditors, filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by its creditors, suffered the
appointment of a receiver to take possession of all, or substantially all,
of its assets, suffered the attachment or other judicial seizure of all, or
32
substantially all, of its assets, admitted in writing its inability to pay
its debts as they come due or made an offer of settlement, extension or
composition to its creditors generally.
(f) The shares of Common Stock to be issued by New Reit upon
redemption of the Property Partnerships' Units are duly authorized and
reserved for issuance and upon issuance, will be validly issued, fully paid
and non-assessable, free and clear of any mortgage, pledge, lien,
encumbrance, security interest, claim or rights of interest of any third
party of any nature whatsoever.
(g) As of the date hereof: (A) the authorized capital stock of New
Reit consists of 100,000,000 shares of its Common Stock and 30,000,000
shares of preferred stock, par value $.01 per share (the "Preferred
Stock"); (B) the issued and outstanding shares of capital stock of New Reit
consists of 47,660 shares of Common Stock; (C) no shares of Preferred Stock
were outstanding; and (D) all the outstanding shares of capital stock of
New Reit have been duly and validly issued and are fully paid and
non-assessable. All of the outstanding capital stock of New Reit is owned
by National. No preferred stock will be issued at Closing.
(h) New Reit agrees to elect to be taxed as a REIT in its first
federal income tax return, and shall be in compliance with all applicable
laws, rules and regulations, including the Code, necessary to permit it to
be taxed as a REIT. The provisions of this Section 6.2(h) shall survive the
Closing.
The representations and warranties made by New Reit in this Agreement shall
not survive the Closing Date, except as otherwise set forth herein.
7. REPRESENTATIONS AND WARRANTIES OF PRLP.
7.1 In order to induce the Property Partnerships, the Partners and National
to perform as required hereunder, PRLP hereby warrants and represents the
following:
(a) PRLP is a duly organized and validly existing limited partnership
organized and in good standing under the laws of the State of Delaware, has
all requisite power and authority to execute and deliver this Agreement and
all other documents and instruments to be executed and delivered by it
hereunder, and to perform its obligations hereunder and under such other
documents and instruments in order to acquire the Property in accordance
with the terms and conditions hereof. All necessary actions of the partners
of PRLP to confer such power and authority upon the persons executing this
Agreement and all documents which are contemplated by this Agreement on its
behalf have been taken.
(b) This Agreement and the agreements and other documents to be
executed and delivered by PRLP hereunder, when duly executed and delivered,
will be the legal, valid and binding obligation of PRLP, enforceable in
accordance with the terms of this Agreement. The performance by PRLP of its
duties and obligations under this Agreement and
33
the documents and instruments to be executed and delivered by PRLP
hereunder will not conflict with, or result in a breach of, or default
under, any provision of any of the organizational documents of PRLP or any
agreements, instruments, decrees, judgments, injunctions, orders, writs,
laws, rules or regulations, or any determination or award of any court or
arbitrator, to which PRLP is a party or by which its assets are or may be
bound.
(c) The Units to be issued hereunder are duly authorized and, when
issued by PRLP, will be fully paid and non-assessable, free and clear of
any mortgage, pledge, lien, encumbrance, security interest, claim or rights
of interest of any third party of any nature whatsoever, other than any
claim or rights of any third party resulting from the action or inaction of
the holder of the Units.
(d) PRLP has furnished to the Property Partnerships and National a
true and complete copy of the PRLP Agreement, as amended to date.
(e) No action, suit, claim, investigation or proceeding, whether legal
or administrative or in mediation or arbitration, is pending or, to the
best of PRLP's knowledge, threatened, at law or in equity, against PRLP
before or by any court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality which
would prevent PRLP from performing its obligations pursuant to this
Agreement. There are no judgments, decrees or orders entered on a suit or
proceeding against PRLP, an adverse decision which might, or which
judgment, decree or order does, adversely affect PRLP's ability to perform
its obligations pursuant to, or any party's rights under, this Agreement,
or which seeks to restrain, prohibit, invalidate, set aside, rescind,
prevent or make unlawful this Agreement or the carrying out of this
Agreement or the transactions contemplated hereby.
(f) The execution and delivery of this Agreement and the performance
by PRLP of its obligations hereunder do not and will not conflict with or
violate any law, rule, judgment, regulation, order, writ, injunction or
decree of any court or governmental or quasi-governmental entity with
jurisdiction over PRLP, including, without limitation, the United States of
America, the States of Delaware, New York, Florida, Massachusetts,
Connecticut and New Jersey or any political subdivision of any of the
foregoing, or any decision or ruling of any arbitrator to which PRLP is a
party or by which it is bound or affected.
(g) PRLP has not made a general assignment for the benefit of
creditors, filed any voluntary petition in bankruptcy or suffered the
filing of any involuntary petition by its creditors, suffered the
appointment of a receiver to take possession of all, or substantially all,
of its assets, suffered the attachment or other judicial seizure of all, or
substantially all, of its assets, admitted in writing its inability to pay
its debts as they come due or made an offer of settlement, extension or
composition to its creditors generally.
7.2 The representations and warranties made by PRLP in this Agreement shall
not survive the Closing Date.
34
8. COVENANTS OF THE PROPERTY PARTNERSHIPS, THE PARTNERS AND NATIONAL.
8.1 Each of the Property Partnerships and National covenant and agree that
between the date hereof and the Closing Date each shall perform or observe the
following with respect to its Real Property only:
(a) Each Party will operate and maintain its Real Property in the
ordinary course of business and use reasonable efforts to reasonably
preserve for PLRP its relationships with each of its Tenants, suppliers,
managers, employees and others having on-going relationships with its Real
Property. The Parties will not defer taking any actions or spending any
funds, or otherwise manage their Real Property differently, due to the
transaction contemplated by this Agreement.
(b) The Parties as landlords, will not enter into any new leases with
respect to their Property, or renew or modify any Lease, without PRLP's
prior written consent; provided, however that the Parties shall be
permitted to enter into new leases, renewals or modifications upon prior
notice to, but without the prior written consent of, PRLP so long as such
lease, renewal or modification is on market terms and conditions with bona
fide third parties and is the type of transaction which the Party currently
enters into in the ordinary course of its business.
(c) None of the Parties shall:
(i) Enter into any agreement requiring it to do work for any
Tenant after the Closing Date without first obtaining the prior
written consent of PRLP unless such agreement, in the Party's
reasonable opinion, is on market terms and conditions with bona fide
third parties and is the type of agreement which the Party currently
enters into in the ordinary course of its business, in which case no
consent of PRLP will be required; or
(ii) Accept the surrender of any Service Contract or Lease, or
grant any concession, rebate, allowance or free rent, except in its
ordinary course of business on market terms, with bona fide third
parties and upon prior written notice to PRLP; or
(iii) Establish, adopt or amend any employee benefit plans
(severance or otherwise) or collective bargaining agreement, grant any
options, or increase in any manner the compensation or fringe benefits
of any director, officer or employee or other personnel (whether
employees or independent contractors) or pay any benefit not payable
under any existing agreement or plan, except (A) in the ordinary
course of business and consistent with past practices and as required
by law, provided that, before entering into any employment agreement
or increasing or agreeing to increase the compensation, bonuses or
other benefits of any employee in the ordinary course of business and
as required by law, said Party shall first have consulted in good
faith with PRLP with respect to the terms of any such employment
agreement or increase in compensation, bonuses or other benefits; or
(B) in connection with the transactions contemplated by this Agreement
for which PRLP would not have any liability.
35
(d) The Parties shall not, between the date hereof and the Closing
Date, apply any Security Deposits with respect to any Tenant in occupancy
on the Closing Date, except in its ordinary course of business.
(e) Between the date hereof and the Closing Date, the Parties will not
renew, extend or modify any of the Service Contracts without the prior
written consent of PRLP unless such is done by in the ordinary course of
its business and such Service Contracts contain a right to terminate on
thirty (30) days' notice with no material cost to exercise such right, in
which case no consent of PRLP will be required.
(f) The Parties shall not remove any of their Personal Property
located in or on its Real Property, except as may be required for repair
and replacement. All replacements shall be free and clear of liens and
encumbrances except to the extent the original Personal Property was so
encumbered and shall be of quality at least equal to the replaced items and
shall be deemed included in this sale, without cost or expense to PRLP,
other than expressly provided herein.
(g) The Parties shall, upon request of PRLP at any time after the date
hereof, assist PRLP in its preparation of audited financial statements,
statements of income and expense, and such other documentation as PRLP may
reasonably request, covering the period of the Parties' ownership of the
Real Property.
(h) Between the date hereof and the Closing Date, the Parties will
make all required payments under any mortgage affecting their Real Property
(other than payments due at stated maturity) within any applicable grace
period, but without reimbursement by PRLP therefor. The parties shall also
comply with all other material terms covenants, and conditions of any
mortgage on the Real Property.
(i) The Parties shall not cause or permit their Real Property, or any
interest therein, to be alienated, mortgaged, licensed, encumbered or
otherwise be transferred without the consent of PRLP.
(j) The Parties agrees to maintain and keep in full force and effect
the hazard, liability and casualty insurance policies they are currently
maintaining.
(k) The Parties shall permit each other Party and PRLP and its and
their respective authorized representatives to inspect the Documents of its
operations at all reasonable times upon reasonable notice.
(l) Each Party shall:
(i) promptly notify PLRP of, and promptly deliver to PRLP, a
certified true and complete copy of any notice said Party may receive,
on or before the Closing
36
Date, from any Governmental Authority, concerning a violation of
Environmental Laws or Discharge of Contaminants.
(ii) contemporaneously with the signing and delivery of this
Agreement, and subsequently promptly upon receipt by said Party or its
representatives, deliver to PRLP a certified true and complete copy of
all Environmental Documents.
(m) The Parties shall diligently pursue obtaining waivers of any
rights of first refusal for the Property presently held by any third
parties at no cost to PRLP, and shall provide PRLP with copies of all
requests for such waivers.
(n) Each Party at its sole cost and expense, shall complete all work
under construction at its Real Property, including the work shown on
Schedules 5.1(e) and 6.1(s), in accordance with the obligation giving rise
to such work having to be performed, and shall obtain and deliver to PRLP,
as soon as practical, all final certificates of completion and occupancy,
or other documentation reasonably satisfactory to PRLP, evidencing the
acceptance of said work by all appropriate governmental authorities having
jurisdiction thereover and the party for whom the work is being so
performed; said obligations shall survive Closing.
8.2 The Property Partnerships and National have each delivered to PRLP
Property Financials certified by Ernst & Young LLP and Xxxxxxxx, Xxxxx & Xxxx,
L.L.C., respectively, for the calendar years 1994, 1995 and 1996, and reviewed
by such accountants for any interim period during the period from January 1,
1997 through March 31, 1997, in all instances prepared in accordance with the
standards and presenting the type of information as described in Sections 5.1(p)
and 6.1(dd). The Property Partnerships and National shall each deliver to PRLP
unaudited Property Financials for the interim period from April 1, 1997 through
September 30, 1997, five (5) days prior to the Closing, or earlier if required
pursuant to the Registration Statement.
8.3 The Parties covenant and agree that they shall timely provide each
other with drafts of any pertinent documentation in connection with leasing
matters, Service Contracts and agreements for work to be done on behalf of
tenants and shall keep each other informed of all substantive negotiations and
discussions with respect to the foregoing matters on an on-going basis.
8.4 National covenants and agrees to take such action and execute and
deliver such other documents (including without limitation the filing of a proxy
statement and/or a registration statement with the Securities and Exchange
Commission) to effectuate the consummation of the transactions contemplated by
this Agreement. The Property Partnerships covenant and agree to cooperate and
provide such information as is reasonably necessary to assist National in its
delivery of the aforesaid documents.
8.5 National shall not, and National shall cause its trustees, advisors,
officers, employees, agents and affiliates, or any investment banker engaged by
it not to, directly or indirectly, solicit or initiate the submission of
proposals or offers from, or solicit, encourage,
37
entertain or enter into any agreement, arrangement or understanding with, or
solicit or initiate any discussions with, or furnish any information to, any
corporation, partnership, person or other entity or group, other than the
Property Partnerships or a representative thereof, with respect to the transfer
of all or any part of the National Property, or with respect to a merger,
acquisition, tender offer, exchange offer, consolidation or similar transaction
involving any purchase of all or any significant portion of the assets or equity
securities of National; provided, however, that National may furnish information
concerning its business, properties or assets to a corporation, partnership,
person or other entity or group which has made an unsolicited bona fide offer to
National to acquire its assets and, following receipt of such an offer, may
negotiate and take any of the actions otherwise prohibited by this Section 8.5
with respect to such corporation, partnership, person or other entity or group
if counsel to National advises the Board of Trustees of National that the
failure to furnish such information or negotiate with such corporation,
partnership, person or other entity or group might subject National's trustees
to liability for breach of their fiduciary duties under applicable law. In the
event that National shall receive an offer of the type referred to in this
Section 8.5 (a "Competing Offer"), it shall promptly inform PRLP and the
Property Partnerships as to any such offer.
8.6 National shall remain in existence as a REIT and shall not adopt any
plan of liquidation or dissolution or revoke its REIT status (if such REIT
status is permitted or unless required as a result of the transactions
contemplated by this Agreement) for a minimum of one (1) year from the Closing.
8.7 Each of the Partners, with respect to itself only, covenant and agree
that between the date hereof and the Closing Date it shall not:
(a) Sell or transfer any portion of its interest in the Interest
Contributing Property Partnership; or
(b) Place any mortgage, pledge, lien, encumbrance, security interest,
option, charge, claim or right of interest in any third party of any nature
whatsoever on its interest in the Interest Contributing Property
Partnership.
8.8 National shall dividend a portion of the National Shares to the
National Shareholders on a pro-rata basis as follows: 3,744 shares in calendar
year 1997 and 20,256 shares in January 1998. The provisions of this Section 8.8
shall survive the Closing.
8.9 National covenants and agrees that it shall timely file income tax
returns from the date hereof through and including December 31, 1998.
38
9. INTENTIONALLY DELETED.
10. ESTOPPEL CERTIFICATES.
10.1 Each Party agrees to deliver to each of the anchor Tenants at its Real
Property, no later than thirty (30) days after the date hereof, an estoppel
certificate in form reasonably satisfactory to the Parties for Tenant's
execution, completed to reflect the Tenant's particular Lease status. The
Parties agree to use commercially reasonable efforts to obtain from all anchor
Tenants the estoppel certificates in such form; provided, however, that (a)
estoppel certificates from Tenants dated on or after January 1, 1997 shall be
deemed acceptable for purposes of this Agreement and (b) if any anchor Tenant
shall refuse to execute an estoppel letter in such form, the Parties shall
nevertheless use commercially reasonable efforts to obtain estoppel certificates
in the form in which each anchor Tenant is obligated to deliver same as provided
in its Lease. The Parties agree to deliver to PRLP copies of all estoppel
letters received by Tenants in the form received by such Party. The estoppel
certificates required to be obtained pursuant to this Section 9 are collectively
referred to as the "Estoppel Certificates".
11. CLOSING.
11.1 The consummation of the transactions contemplated hereunder (the
"Closing") shall take place at the offices of Pryor, Cashman, Xxxxxxx & Xxxxx,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 three (3) business days after the
receipt of the National Shareholder Approval (the "Closing Date").
11.2 On the Closing Date, the Property Partnerships, at their sole cost and
expense, will deliver or cause to be delivered to PRLP the following documents,
fully executed by all parties thereto other than PRLP or parties claiming by,
through or under PRLP:
(a) With respect to the Asset Contributing Property Partnerships,
Bargain and Sale Deeds or similar type deeds in the appropriate
jurisdictions (collectively, the "Property Partnerships' Deeds") with
covenant in proper statutory form for recording so as to convey to PRLP
good and marketable title to the Property Partnerships' Land, free and
clear of all liens and encumbrances, except the Permitted Encumbrances. The
delivery of each Property Partnerships' Deed shall also be deemed to
constitute a transfer of the Property Partnerships' Personal Property
associated with the Property Partnerships' Land conveyed by the Property
Partnerships' Deed; the delivery of all of the Property Partnerships' Deeds
shall be deemed to constitute a transfer of the balance of the Property
Partnerships' Personal Property to PRLP. No portion of the fair market
value is attributable to the Property Partnerships' Personal Property.
(b) All original Property Partnerships' Leases and all other documents
pertaining thereto, and certified copies of such the Property Partnerships'
Leases or other
39
documents where the Property Partnership, using its best efforts, is unable
to deliver originals of same.
(c) All other original documents or instruments referred to herein,
including without limitation the Property Partnerships' Service Contracts,
the Property Partnerships' Licenses and Permits and the Property
Partnerships' Documents, and certified copies of same where the Property
Partnership, using its best efforts, is unable to deliver originals.
(d) A letter to Tenants advising the Tenants of the transaction
hereunder and directing that rent and other payments thereafter be sent to
PRLP or its designee, as PRLP shall so direct.
(e) Duly executed and acknowledged assignment and assumption of all
the Property Partnerships' Leases, the Property Partnerships' Rents and the
Property Partnerships' Security Deposits substantially in the form to be
agreed to by the Parties.
(f) Duly executed and acknowledged Omnibus Assignment.
(g) An affidavit, and such other document or instruments required by
the Title Company, executed by the Property Partnerships certifying (i)
against any work done or supplies delivered to the Property Partnerships'
Real Property which might be grounds for a materialman's or mechanic's lien
under or pursuant to applicable Lien Law, in form sufficient to enable the
Title Company to affirmatively insure PRLP against any such lien, (ii) that
the signatures on the Deed are sufficient to bind the Property Partnerships
and convey the Property Partnerships' Property to PRLP and (iii) the
Property Partnerships' Rent Roll.
(h) Affidavits and other instruments, including but not limited to all
organizational documents of the Property Partnerships and the Property
Partnerships' general partner or manager, as applicable, including
operating agreements, filed copies of limited liability certificates,
articles of organization, and good standing certificates, reasonably
requested by PRLP and the Title Company evidencing the power and authority
of the Property Partnerships to enter into this Agreement and any documents
to be delivered hereunder, and the enforceability of same.
(i) The original Estoppel Certificates required hereunder relating to
the Property Partnerships' Real Property.
(j) A list of all cash security deposits and all non-cash security
deposits (including letters of credit) delivered by Tenants under the
Property Partnerships' Leases, together with other instruments of
assignment, transfer or consent as may be necessary to permit PRLP to
realize upon same.
40
(k) A certificate indicating that the representations and warranties
of the Property Partnerships made in this Agreement are true and correct in
all material respects as of the Closing Date, or if there have been any
changes, a description thereof.
(l) A Rent Roll for each Real Property, current as of the Closing
Date, certified by the Property Partnerships as being true and correct in
all material respects.
(m) All proper instruments as shall be reasonably required for the
conveyance to PRLP of all right, title and interest, if any, of the
Property Partnerships in and to any award or payment made, or to be made,
(i) for any taking in condemnation, eminent domain or agreement in lieu
thereof of land adjoining all or any part of the Property Partnerships'
Improvements, (ii) for damage to the Property Partnerships' Land or the
Property Partnerships' Improvements or any part thereof by reason of change
of grade or closing of any such street, road, highway or avenue, and (z)
for any taking in condemnation or eminent domain of any part of the
Property Partnerships' Land or the Property Partnerships' Improvements.
(n) In order to avoid the imposition of the withholding tax payment
pursuant to Section 1445 of the Code, a certificate signed by an officer of
the Property Partnerships to the effect that the Property Partnerships is
not a "foreign person" as that term is defined in Section 1445(f)(3) of the
Code.
(o) All such transfer and other tax declarations and returns and
information returns, duly executed and sworn to by the Property
Partnerships as may be required of the Property Partnerships by law in
connection with the conveyance of the Property Partnerships' Property to
PRLP, including but not limited to, Internal Revenue Service forms.
(p) A statement setting forth all adjustments and prorations.
(q) A Tradenames Assignment Agreement substantially in the form
previously agreed to by the parties.
(r) Deleted prior to execution.
(s) Deleted prior to execution.
(t) Waivers of rights of first refusal, or evidence of the lapse of
said rights, in form reasonable satisfactory to PRLP, with respect to any
of the Property Partnerships' Property which is subject to said rights.
(u) To the extent not previously delivered, the Property Financials
for the years ending December 31, 1994, 1995, 1996 and for the period
commencing January 1, 1997 to the Closing except to the extent a Property
was acquired after such date, certified by an officer, general partner or
member of the Property Partnerships.
(v) Evidence of compliance with the Connecticut Transfer Act.
41
(w) Duly executed counterpart of the PRLP Agreement, executed by the
Property Partnerships' Unit Holders.
(x) Duly executed counterpart of the Registration Rights Agreements,
executed by the Property Partnerships' Unit Holders.
(y) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
11.3 On the Closing Date, National will deliver or cause to be delivered to
New Reit the following documents, fully executed by all parties thereto other
than New Reit or parties claiming by, through or under New Reit:
(a) Special Warranty Deed with covenant in proper statutory form for
recording so as to convey to New Reit or its designee good and marketable
title to the National Land, free and clear of all liens and encumbrances,
except the Permitted Encumbrances. The delivery of the Deed shall also be
deemed to constitute a transfer of the National Personal Property
associated with the National Land conveyed by the National Deed; the
delivery of the National Deed shall be deemed to constitute a transfer of
the balance of the National Personal Property to New Reit. No portion of
the fair market value is attributable to the National Personal Property.
(b) All original National Leases and all other documents pertaining
thereto, and certified copies of such National Leases or other documents
where National, using its best efforts, is unable to deliver originals of
same.
(c) All other original documents or instruments referred to herein,
including without limitation the National Service Contracts, National
Licenses and Permits and National Documents, and certified copies of same
where National, using its best efforts, is unable to deliver originals.
(d) A letter to Tenants advising the Tenants of the transaction
hereunder and directing that rent and other payments thereafter be sent to
New Reit or its designee, as New Reit shall so direct.
(e) Duly executed and acknowledged assignment and assumption of all
National Leases, National Rents and National Security Deposits
substantially in the form to be agreed to by the parties.
(f) Duly executed and acknowledged Omnibus Assignment.
(g) An affidavit, and such other document or instruments required by
the Title Company, executed by National certifying (i) against any work
done or supplies delivered to the National Real Property which might be
grounds for a materialman's or
42
mechanic's lien under or pursuant to applicable Florida law, in form
sufficient to enable the Title Company to affirmatively insure PRLP against
any such lien, (ii) that the signatures on the Deed are sufficient to bind
National and convey the National Property to New Reit and (iii) the
National Rent Roll.
(h) Affidavits and other instruments, including but not limited to all
organizational documents of National, as applicable, including articles of
incorporation, by-laws, and good standing certificates, reasonably
requested by New Reit and the Title Company evidencing the power and
authority of National to enter into this Agreement and any documents to be
delivered hereunder, and the enforceability of same.
(i) The original Estoppel Certificates relating to the National Real
Property.
(j) A list of all cash security deposits and all non-cash security
deposits (including letters of credit) delivered by Tenants under the
National Leases, together with other instruments of assignment, transfer or
consent as may be necessary to permit New Reit to realize upon same.
(k) A certificate indicating that the representations and warranties
of National made in this Agreement are true and correct in all material
respects as of the Closing Date, or if there have been any changes, a
description thereof.
(l) A Rent Roll for each Real Property, current as of the Closing
Date, certified by National as being true and correct in all material
respects.
(m) All proper instruments as shall be reasonably required for the
conveyance to New Reit of all right, title and interest, if any, of
National in and to any award or payment made, or to be made, (i) for any
taking in condemnation, eminent domain or agreement in lieu thereof of land
adjoining all or any part of the National Improvements, (ii) for damage to
the National Land or the National Improvements or any part thereof by
reason of change of grade or closing of any such street, road, highway or
avenue, and (z) for any taking in condemnation or eminent domain of any
part of the National Land or National Improvements.
(n) In order to avoid the imposition of the withholding tax payment
pursuant to Section 1445 of the Code, a certificate signed by an officer of
National to the effect that National is not a "foreign person" as that term
is defined in Section 1445(f)(3) of the Code.
(o) All such transfer and other tax declarations and returns and
information returns, duly executed and sworn to by National as may be
required of National by law in connection with the conveyance of the
National Property to New Reit, including but not limited to, Internal
Revenue Service forms.
(p) A statement setting forth all adjustments and prorations.
43
(q) A Tradenames Assignment Agreement substantially in the form
previously agreed to by the parties.
(r) Legal opinion of Xxxxxxx, Xxxx & Xxxxx, counsel to National, in
form satisfactory to New Reit for the benefit of New Reit and PRLP.
(s) Deleted prior to execution.
(t) Waivers of rights of first refusal, or evidence of the lapse of
said rights, in form reasonable satisfactory to New Reit, with respect to
any of the National Property which is subject to said rights.
(u) To the extent not previously delivered, the Property Financials
for the years ending December 31, 1994, 1995, 1996 and for the period
commencing January 1, 1997 to the Closing, certified by the chief financial
officer of National.
(v) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
11.4 On the Closing Date, PRLP its sole cost and expense, will deliver or
cause to be delivered to the Parties the following documents, fully executed by
all parties thereto other than the Parties or parties claiming by, through or
under the Parties:
(a) The Property Partnership Certificates.
(b) Duly executed and acknowledged assignment and assumption of all
Leases, Rents and Security Deposits.
(c) Duly executed and acknowledged Omnibus Assignment.
(d) A certificate indicating that the representations and warranties
of PRLP made in this Agreement are true and correct as of the Closing Date,
or if there have been any changes, a description thereof.
(e) Affidavits and other instruments, including but not limited to all
organizational documents of PRLP including limited partnership agreements,
filed copies of limited partnership certificates, articles of organization,
and good standing certificates, reasonably requested by the Property
Partnerships and National evidencing the power and authority of PRLP to
enter into this Agreement and any documents to be delivered hereunder, and
the enforceability of same.
(f) Duly executed counterpart of PRLP Agreement.
(g) Duly executed counterpart of Management Agreement.
44
(h) Duly executed counterpart of Non-Competition Agreement.
(i) Duly executed counterpart of Interest Assignments with respect to
each of the Partners.
(j) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
11.5 On the Closing Date, New Reit, at its sole cost and expense, will
deliver or cause to be delivered to PRLP the following documents, fully executed
by all parties thereto other than PRLP or parties claiming by, through or under
PRLP:
(a) Duly executed counterpart of the PRLP Agreement.
(b) Duly executed counterpart of the Registration Rights Agreements.
(c) Duly executed counterpart of Non-Competition Agreement.
(d) Duly executed counterpart of Management Agreement.
(e) Duly executed Prudential Note.
(f) Either the Special Warranty Deed set forth in Section 11.3(a)
designating PRLP as transferee or Quitclaim Deed in proper statutory form
for recording so as to convey to PRLP title to the National Land, free and
clear of all liens and encumbrances, except the Permitted Encumbrances. The
delivery of the Special Warranty Deed or Quitclaim Deed shall also be
deemed to constitute a transfer of the National Personal Property
associated with the National Land conveyed by the National Deed; the
delivery of the Special Warranty Deed or Quitclaim Deed shall be deemed to
constitute a transfer of the balance of the National Personal Property to
PRLP. No portion of the fair market value is attributable to the National
Personal Property.
(g) All original National Leases and all other documents pertaining
thereto, and certified copies of such National Leases or other documents
where National, using its best efforts, is unable to deliver originals of
same.
(h) All other original documents or instruments referred to herein,
including without limitation the National Service Contracts, National
Licenses and Permits and National Documents, and certified copies of same
where National, using its best efforts, is unable to deliver originals.
(i) A letter to Tenants advising the Tenants of the transaction
hereunder and directing that rent and other payments thereafter be sent to
PRLP or its designee, as PRLP shall so direct.
45
(j) Duly executed and acknowledged assignment and assumption of all
National Leases, National Rents and National Security Deposits
substantially in the form to be agreed to by the parties.
(k) Duly executed and acknowledged Omnibus Assignment.
(l) An affidavit, and such other document or instruments required by
the Title Company, executed by New Reit certifying that the signatures on
the Deed are sufficient to bind New Reit and convey the National Property
to PRLP.
(m) Affidavits and other instruments, including but not limited to all
organizational documents of New Reit, as applicable, including articles of
incorporation, by-laws, and good standing certificates, reasonably
requested by PRLP and the Title Company evidencing the power and authority
of New Reit to enter into this Agreement and any documents to be delivered
hereunder, and the enforceability of same.
(n) The original Estoppel Certificates relating to the National Real
Property.
(o) A list of all cash security deposits and all non-cash security
deposits (including letters of credit) delivered by Tenants under the
National Leases, together with other instruments of assignment, transfer or
consent as may be necessary to permit PRLP to realize upon same.
(p) A Rent Roll for each Real Property, current as of the Closing
Date, certified by National as being true and correct in all material
respects.
(q) All proper instruments as shall be reasonably required for the
conveyance to PRLP of all right, title and interest, if any, of New Reit in
and to any award or payment made, or to be made, (i) for any taking in
condemnation, eminent domain or agreement in lieu thereof of land adjoining
all or any part of the National Improvements, (ii) for damage to the
National Land or the National Improvements or any part thereof by reason of
change of grade or closing of any such street, road, highway or avenue, and
(z) for any taking in condemnation or eminent domain of any part of the
National Land or National Improvements.
(r) In order to avoid the imposition of the withholding tax payment
pursuant to Section 1445 of the Code, a certificate signed by an officer of
New Reit to the effect that New Reit is not a "foreign person" as that term
is defined in Section 1445(f)(3) of the Code.
(s) All such transfer and other tax declarations and returns and
information returns, duly executed and sworn to by New Reit as may be
required of New Reit by law in connection with the conveyance of the
National Property to PRLP, including but not limited to, Internal Revenue
Service forms.
(t) A statement setting forth all adjustments and prorations.
46
(u) A Tradenames Assignment Agreement substantially in the form
previously agreed to by the parties.
(v) Deleted prior to execution.
(w) Waivers of rights of first refusal, or evidence of the lapse of
said rights, in form reasonable satisfactory to PRLP, with respect to any
of the National Property which is subject to said rights.
(x) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
11.6 On the Closing Date, New Reit, at its sole cost and expense, will
deliver or cause to be delivered to National the following documents, fully
executed by all parties thereto other than National or parties claiming by,
through or under National:
(a) The Trustees Warrants.
(b) The National Shares.
(c) The Trustees Shares.
(d) Legal opinion of Pryor, Cashman, Xxxxxxx & Xxxxx, counsel to New
Reit, in form satisfactory to National for the benefit of National.
(e) The New Reit Indemnity.
(f) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
11.7 On the Closing Date, each of the Partners, at their sole cost and
expense, will deliver or cause to be delivered to PRLP the following documents,
fully executed by all parties thereto other than PRLP or parties claiming by,
through or under PRLP:
(a) A duly executed counterpart of its Interest Assignment.
(b) A FIRPTA Affidavit.
(c) A duly executed counterpart of its Registration Rights Agreement.
(d) Such other documents as may be reasonably required or appropriate
to effectuate the consummation of the transactions contemplated by this
Agreement.
47
11.8 All transfer taxes and expenses on the Deeds and any state or county
documentary stamps or transfer taxes on the Deeds shall be paid by the party
transferring the Real Property which is the subject of each Deed. Said party
shall also pay all customary recordation charges, clerk's fees, taxes, transfer
and recording charges. PRLP shall pay all title insurance premiums, title
examination fees and survey costs. Each party shall be responsible for its own
attorney's fees, except as otherwise expressly provided herein. The provisions
of this Section 11.8 shall survive the Closing.
11.9 The Closing shall be consummated without compliance with bulk sales
laws. If by reason of any applicable bulk sales law, any claims are asserted by
creditors of any of the Parties related to periods prior to the Closing, such
claims shall be the responsibility of such Party, and such Party shall
indemnify, defend and hold harmless PRLP (and their respective directors,
officers, employees, affiliates, successors and assigns) from and against all
losses or liabilities, if any, based upon, arising out of or otherwise in
respect of the failure to comply with such bulk sales laws.
11.10 (a) PRLP acknowledges and agree that, except as set forth in this
Agreement, PRLP is acquiring the Property in its "as is" condition "subject to
all faults" and specifically and expressly without any warranties,
representations or guarantees, either express or implied, of any kind, nature,
or type whatsoever from or on behalf of the Property Partnerships or National.
PRLP acknowledges that, except as set forth in this Agreement, and except for
documents, reports and information related to the environmental integrity of the
Real Property, PRLP has not relied and is not relying on any information,
document, reports, sales brochure or other literature, maps or sketches,
financial information, projections, proformas or statements, that may have been
given by or made by or on behalf of the Property Partnerships or National. PRLP
further acknowledges that, except as otherwise set forth herein, all materials
relating to the Property which have been provided by the Property Partnerships
or National have been provided without any warranty or representation, expressed
or implied as to their content, suitability for any purpose, accuracy,
truthfulness or completeness and PRLP shall not have any recourse against the
Property Partnerships, National or their counsel, advisors, agents, officers,
directors or employees for any information in the event of any errors therein or
omissions therefrom.
(b) PRLP hereby acknowledges and agrees that, except as set forth herein,
it is not entitled to, and does not, rely on the Property Partnerships or
National or its agents as to (i) the quality, nature, adequacy or physical
condition, whether latent or patent, of the Property including, but not limited
to, the structural elements, foundation, roof, appurtenances, access,
landscaping parking facilities or the electrical, mechanical, HVAC, plumbing,
sewage or utility system, facilities or appliances at or in connection with the
Real Property, if any; (ii) the existence, quality, nature, adequacy, physical
condition, or location of any utilities serving the Real Property; (iii) the
development potential of the Real Property, its habitability, merchantability or
fitness, suitability or adequacy of the Property for any particular purpose;
(iv) the zoning or other legal status of the Real Property or the potential use
of the Property; (v) the Real Property's or its operations' compliance with any
applicable codes, laws, building codes, fire codes, regulations, statutes,
ordinances, covenants, conditions or restrictions of, or agreements with any
governmental or quasi-governmental entity or of any other person or
48
entity; (vi) the quality of any labor or materials relating in any way to the
Real Property; or (vii) the condition of title to the Real Property or the
nature, status and extent of any right, encumbrance, license, reservation,
covenant, condition, restriction or any other matter affecting title to the Real
Property.
12. ADJUSTMENTS.
12.1 The following items under (a) through (g) with respect to the Real
Property are to be apportioned as of midnight on the date preceding the Closing:
(a) Rents, escalation charges and percentage rents payable by Tenants
as and when collected. All moneys received from Tenants from and after the
Closing shall belong to PRLP and shall be applied by PRLP to current rents
and other charges under the Leases. After application of such moneys to
current rents and charges, PRLP agrees to adjust the number of Units to be
received by the transferor of each Real Property to reflect any excess
amounts paid by a Tenant of such Real Property to the extent that such
Tenant was in arrears in the payment of rent prior to the Closing, but
subject to the provisions of Section 12.2 with respect to Additional Rents.
(b) Upon sufficient advance notice, a cashier's or certified check or
wire transfer to the order of PRLP in the amount of all cash Security
Deposits and any prepaid rents, together with interest required to be paid
thereon.
(c) Utility charges payable by the transferors of the Real Property,
including, without limitation, electricity, water charges and sewer
charges. If there are meters on the Real Property, the transferor of each
Real Property will cause readings of all said meters to be performed not
more than ten (10) days prior to the Closing Date. To the extent said
meters are not read prior to Closing, PRLP will cause same to be read
promptly thereafter and a pro-rata adjustment shall be made upon said
reading.
(d) Amounts payable under the Service Contracts other than those
Service Contracts which PRLP has elected not to assume.
(e) Real estate taxes due and payable for the calendar year or fiscal
year, as applicable. If the Closing Date shall occur before the tax rate is
fixed, the apportionment of real estate taxes shall be upon the basis of
the tax rate for the preceding year applied to the latest assessed
valuation. If subsequent to the Closing Date, real estate taxes (by reason
of change in either assessment or rate or for any other reason) for the
Real Property should be determined to be higher or lower than those that
are apportioned, a new computation shall be made, and the transferor of
each Real Property agrees to pay PRLP any increase shown by such
recomputation and vice versa.
(f) The value of fuel stored at any of the Real Property, at said Real
Property owner's most recent cost, including taxes, on the basis of a
reading made within fifteen
49
(15) days prior to the Closing by said Real Property owner's supplier. To
the extent said reading is not made prior to Closing, PRLP will cause same
to be read promptly thereafter and a pro-rata adjustment shall be made upon
said reading.
(g) Such other items as may be agreed to by the parties.
12.2 Promptly following request by PRLP, each of the transferors shall
deliver to PRLP a list of additional rent, however characterized, under a Lease
at its Real Property, including without limitation, real estate taxes,
electrical charges, utility costs and operating expenses (collectively,
"Additional Rents") billed to Tenants and accruing after the Closing Date (both
on a monthly basis and in the aggregate), the basis for which the monthly
amounts are being billed and the amounts incurred by such transferor on account
of the components of Additional Rent for calendar year 1997. PRLP shall be
entitled to all monies and payments on account of Additional Rents accruing
after the Closing Date and same shall be reflected by an adjustment in the
number of Units to be received by each transferor.
12.3 If, on the Closing Date, any Property or any part thereof shall be or
shall have been affected by an assessment or assessments which are or may become
payable in annual installments, all the unpaid installments of any such
assessment due and payable on or prior to the Closing Date shall be paid and
discharged by the party transferring such Property.
12.4 Notwithstanding anything to the contrary contained herein, (a) any
amounts to be apportioned pursuant to this Section 12 in favor of National shall
be distributed among the Property Partnerships pari passu in reimbursement of
Expenses; and (b) any amounts to be apportioned pursuant to this Section 12
between the Property Partnerships and PRLP shall be reflected in the allocation
of Units to be held by the Property Partnerships' Unit Holders as set forth in
Schedule 2.3(a).
12.5 The Property Partnerships shall receive a cash reimbursement from PRLP
for certain capital expenditures made within the twenty-four (24) month period
prior to the Closing, which reimbursements as of July 31, 1997 are as set forth
on Schedule 12.5.
12.6 Except as otherwise provided in this Agreement, the adjustments shall
be made in accordance with the customs in respect to title closings in the State
of New York.
12.7 Any errors in calculations or adjustments shall be corrected or
adjusted as soon as practicable after the Closing.
12.8 The provisions of this Section 12 shall survive the Closing Date.
13. CONDITIONS PRECEDENT TO CLOSING.
13.1 The obligations of the Asset Contributing Property Partnerships to
deliver title to the Property Partnerships' Real Property and the obligations of
the Partners to contribute
50
its interests in the Interest Contributing Property Partnerships as set forth in
Section 1.3, and to perform the other covenants and obligations to be performed
by the Property Partnerships or the Partners on the Closing Date shall be
subject to the following conditions (all or any of which may be waived, in whole
or in part, by the Property Partnerships or the Partners):
(a) The representations and warranties made by National, New Reit and
PRLP herein shall be true and correct in all material respects with the
same force and effect as though such representations and warranties had
been made on and as of the Closing Date; provided, however, that a failure
of any representations or warranties to be true and correct in all material
respects shall not give rise to a claim by the Property Partnerships
hereunder so long as such matters do not have a material adverse effect on
the transactions contemplated herein.
(b) National, New Reit and PRLP shall have executed and delivered to
the Property Partnerships all of the documents provided herein for said
delivery, including without limitation, the Registration Rights Agreement
and the PRLP Agreement.
(c) National, New Reit and PRLP shall have performed all covenants and
obligations undertaken by National, New Reit and PRLP herein in all
respects and complied with all conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
(d) National shall have elected to be taxed as a REIT in its most
recent federal income tax return, and shall be in compliance with all
applicable laws, rules and regulations, including the Code, necessary to
permit it to be taxed as a REIT. National shall not have taken any action
or have failed to take any action which would reasonably be expected to,
alone or in conjunction with any other factors, result in the loss of its
status as a REIT for federal income tax purposes.
(e) The National Shareholder Approval shall have been obtained.
13.2 The obligations of National to deliver title to the National Real
Property and to perform the other covenants and obligations to be performed by
National on the Closing Date shall be subject to the following conditions (all
or any of which may be waived, in whole or in part, by National):
(a) The representations and warranties made by the Property
Partnerships, New Reit, the Partners and PRLP herein shall be true and
correct in all material respects with the same force and effect as though
such representations and warranties had been made on and as of the Closing
Date; provided, however, that a failure of any representations or
warranties to be true and correct in all material respects shall not give
rise to a claim by National hereunder so long as such matters do not have a
material adverse effect on the Property Partnerships as a whole.
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(b) The Property Partnerships, New Reit and PRLP shall have executed
and delivered to National all of the documents provided herein for said
delivery on or prior to Closing.
(c) The Property Partnerships, the Partners, New Reit and PRLP shall
have performed all covenants and obligations undertaken by the Property
Partnerships, New Reit, the Partners and PRLP herein in all material
respects and complied in all material respects with all conditions required
by this Agreement to be performed or complied with by them on or before the
Closing Date.
(d) The National Shareholder Approval shall have been obtained.
(e) No governmental entity or federal or state court shall have issued
any injunction or other order which restrains or prohibits the consummation
of the transactions contemplated hereby.
(f) The Registration Statement shall have been declared effective by
the Securities and Exchange Commission and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act and no proceedings therefor shall have been initiated or threatened
by the Securities and Exchange Commission.
(g) Prudential Securities Incorporated, or another investment banking
firm reasonably acceptable to PRLP, shall have issued an opinion to the
effect that the consideration to be paid to National for the National
Property is fair to National from a financial point of view.
(h) The Expenses shall have been paid by the Property Partnerships.
13.3 The obligations of PRLP to accept title to the Property and PRLP's
obligation to perform the other covenants and obligations to be performed by
PRLP on the Closing Date shall be subject to the following conditions (all or
any of which may be waived, in whole or in part, by PRLP):
(a) The representations and warranties made by the Property
Partnerships, the Partners, New Reit and National herein shall be true and
correct in all material respects with the same force and effect as though
such representations and warranties had been made on and as of the Closing
Date; provided, however, that a failure of a representation or warranty to
be true and correct in all material respects shall not give rise to a claim
by PRLP hereunder so long as such matters do not have a material adverse
effect on the transactions contemplated herein.
(b) The Property Partnerships, the Partners, New Reit and National,
respectively, shall each have performed all covenants and obligations
undertaken by them herein in all material respects and complied in all
material respects with all conditions required by this Agreement to be
performed or complied with by it on or before the Closing Date.
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(c) The Title Company is unconditionally prepared to issue to New Reit
and PRLP a Title Policy meeting the requirements set forth in Section 4
hereof for an "insurable title".
(d) All rights of first refusals with respect to the Property shall
have been waived, either pursuant to a specific waiver executed by the
beneficiary thereof or by the lapse of time as provided in the instrument
setting forth such right. If the waiver is based upon the lapse of time,
the transferor of said Property shall certify compliance with the relevant
instrument.
(e) The Property Partnerships, the Partners and National shall have
executed and delivered to PRLP all of the documents, assignments, approvals
and consents provided for herein for said delivery.
(f) The National Shareholder Approval shall have been obtained.
(g) No governmental entity or federal or state court shall have issued
any injunction or other order which restrains or prohibits the consummation
of the transactions contemplated hereby.
(h) All authorizations, waivers or consents required to be obtained in
order to consummate the transactions contemplated hereby shall have been
obtained.
(i) The Registration Statement shall have been declared effective by
the Securities and Exchange Commission and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act and no proceedings therefor shall have been initiated or threatened
by the Securities and Exchange Commission.
(j) Prudential Securities Incorporated, or another investment banking
firm reasonably acceptable to PRLP, shall have issued an opinion to the
effect that the consideration to be paid to National for the National
Property is fair to National from a financial point of view.
13.4 The obligations of New Reit to accept title to the National Property
and to perform the covenants and obligations to be performed by New Reit on the
Closing Date shall be subject to the following conditions (all or any of which
may be waived, in whole or in part, by New Reit):
(a) The National Shareholder Approval shall have been obtained.
(b) No governmental entity or federal or state court shall have issued
any injunction or other order which restrains or prohibits the consummation
of the transactions contemplated hereby.
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(c) All authorizations, waivers or consents required to be obtained in
order to consummate the transactions contemplated hereby shall have been
obtained.
(d) The Registration Statement shall have been declared effective by
the Securities and Exchange Commission and no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the Act and no proceedings therefor shall have been initiated or threatened
by the Securities and Exchange Commission.
(e) The representations and warranties made by the Property
Partnerships, the Partners, National and PRLP herein shall be true and
correct in all material respects with the same force and effect as though
such representations and warranties had been made on and as of the Closing
Date; provided, however, that a failure of any representations or
warranties to be true and correct in all material respects shall not give
rise to a claim by New Reit hereunder so long as such matters do not have a
material adverse effect on the transactions contemplated herein.
(f) The Property Partnerships, the Parties, National and PRLP,
respectively, shall each have performed all covenants and obligations
undertaken by them herein in all material respects and complied in all
material respects with all conditions required by this Agreement to be
performed or complied with by them on or before the Closing Date.
(g) Prudential Securities Incorporated, or another investment banking
firm reasonably acceptable to New Reit, shall have issued an opinion to the
effect that the consideration to be paid to National for the National
Property is fair to National from a financial point of view.
14. LEASING COMMISSIONS AND TENANT IMPROVEMENT OBLIGATIONS.
14.1 All leasing commissions and tenant improvement obligations for which
PRLP shall receive a credit at Closing (which shall be set forth on a schedule
to be annexed to the schedule of adjustments and prorations done at Closing),
and all leasing commissions and tenant improvement obligations on account of
extensions, renewals or amendments (including expansions) of Leases made after
the Closing (other than commissions and tenant improvement obligations due on
account of the leases described on Schedules 5.1(c) and 6.1(o)-2 for which PRLP
does not receive a credit at Closing) shall be the responsibility of PRLP. All
leasing commissions due on account of the original term of all Leases made
before the date of this Agreement and extensions and renewals which are
presently effective, tenant improvement obligations which were to have been
performed, completed or paid for prior to the Closing, and commissions and
tenant improvement obligations due on account of the leases described on
Schedules 5.1(c) and 6.1(o)-2, in each instance for which PRLP does not receive
a credit at Closing, shall be the obligation of the Party transferring title to
the related Real Property.
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14.2 The parties hereto agree to proceed in good faith in establishing all
of the amounts to be adjusted pursuant to Section 14.1, including the cost of
all tenant improvement obligations with respect to the Property which were to
have been performed, completed and paid for prior to the Closing and the cost of
the tenant improvement obligations for the leases described on Schedules 5.1(c)
and 6.1(o)-2.
14.3 The provisions of this Section 14 shall survive the Closing.
15. ASSIGNMENT.
This Agreement may not be assigned by PRLP except to a directly or
indirectly wholly-owned subsidiary or subsidiaries of PRLP, or to a partnership
in which any such wholly-owned subsidiary or subsidiaries owns, either directly
or indirectly, one hundred (100%) percent of the profits, losses and cash flow
thereof and controls the management of the affairs of such partnership (any such
entity, a "Permitted Assignee") and any other assignment or attempted assignment
by PRLP shall constitute a default by PRLP hereunder and shall be deemed null
and void and of no force and effect. Notwithstanding anything to the contrary
contained herein, PRLP may assign the right to purchase individual portions of
the Property to various entities provided that each of such entities is a
Permitted Assignee. A copy of any assignment permitted hereunder, together with
an agreement of the assignee assuming all of the terms and conditions of this
Agreement to be performed by PRLP with respect to the portion of the applicable
Real Property, in form reasonably satisfactory to counsel for the Property
Partnerships and National shall be delivered to the attorneys for the Property
Partnerships and National prior to the Closing, and in any event no such
assignment shall relieve PRLP from their obligations under this Agreement.
16. BROKER.
16.1 The Property Partnerships, National, New Reit and PRLP represent that
they have not dealt with any brokers, finders or salesmen, in connection with
this transaction, except that certain fees shall be payable by PRLP to
Prudential Securities Incorporated, as financial advisors to National at
Closing. The Property Partnerships, National, New Reit, and PRLP agree to
indemnify, defend and hold each other harmless from and against any and all
loss, cost, damage, liability or expense, including reasonable attorneys' fees,
which they may sustain, incur or be exposed to by reason of any claim for fees
or commissions, other than Prudential Securities Incorporated. The provisions of
this Section shall survive the Closing or other termination of this Agreement.
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17. CASUALTY LOSS.
17.1 Each Party shall continue to maintain, in all material respects, the
fire and extended coverage insurance policies with respect to its Property (the
"Insurance Policies") which are currently in effect, through the date that said
coverage currently expires or the Closing, whichever is later, which obligation
shall survive the Closing.
17.2 If at any time prior to the Closing Date all or any portion of its
Property is destroyed or damaged as a result of fire or any other casualty (a
"Casualty"), the Property Partnerships shall promptly give written notice
("Casualty Notice") thereof to National and PRLP. National and PRLP shall not
have the right to terminate this Agreement, unless (a) the Casualty gives rise
to a material adverse change in the Property Partnerships taken as a whole; and
(b) in the Property Partnerships' reasonable determination, the Casualty can not
be repaired prior to Closing.
17.3 If at any time prior to the Closing Date all or any portion of the
National Property is destroyed or damaged as a result of a Casualty, National
shall promptly give a Casualty Notice thereof to the Property Partnerships and
PRLP. The Property Partnerships and PRLP shall not have the right to terminate
this Agreement, provided that there is no liability to PRLP as a result of the
Casualty.
17.4 If a Property is the subject of a Casualty but this Agreement is not
terminated pursuant to the provisions of this Section, then the Party owning the
Property shall prior to the Closing Date cause all temporary repairs to be made
to the Property as shall be required to prevent further deterioration and damage
to the Property and to protect public health and safety, provided, the cost of
any such repairs shall not exceed the amount of proceeds made available to said
Party. Said Party shall have the right to be reimbursed from the proceeds of any
insurance with respect to the Property for the cost of such temporary repairs.
18. CONDEMNATION.
18.1 In the event that a material portion of the Property Partnerships'
Property is the subject of any proceedings, judicial, administrative or
otherwise, giving rise to a material adverse change in the Property Partnerships
taken as a whole, then PRLP or National shall have the right, at their sole
option, to either (a) terminate this Agreement by giving the Property
Partnerships written notice to such effect at any time after its receipt of
written notification of any such occurrence, or (b) accept title to the
remainder of the Property without reduction of any consideration given
hereunder. Should PRLP or National so terminate this Agreement in accordance
with this Section, the Parties and PRLP shall not have any further liability or
obligations to the other. In the event PRLP and National shall not elect to
cancel this Agreement, the owner of the subject Property shall, subject to the
rights of the holder of any existing mortgage, assign all proceeds of such
taking to PRLP, and same shall be PRLP's sole property, and PRLP shall have the
sole right to settle any claim in connection with the Property.
56
18.2 In the event that the National Property is the subject of any
proceedings, judicial, administrative or otherwise, PRLP and the Property
Partnerships shall have the right, at their sole option, to either (a) terminate
this Agreement by giving the National written notice to such effect at any time
after its receipt of written notification of any such occurrence, or (b) accept
title to the remainder of the Property without reduction of any consideration
given hereunder. Should PRLP or the Property Partnerships so terminate this
Agreement in accordance with this Section, the Parties and PRLP shall have any
further liability or obligations to the other. In the event PRLP and the
Property Partnerships shall not elect to cancel this Agreement, the owner of the
subject Property shall, subject to the rights of the holder of any existing
mortgage, assign all proceeds of such taking to PRLP, and same shall be PRLP's
sole property, and PRLP shall have the sole right to settle any claim in
connection with the Property.
19. TRANSFER RESTRICTIONS
19.1 The Property Partnerships hereby agree that the Property Partnerships'
Units may not be sold, assigned, transferred, pledged, encumbered or in any
manner disposed of (collectively, "Transferred") or redeemed for shares of
Common Stock except in accordance with the terms of the PRLP Agreement.
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20. LIMITED GUARANTY
In order to allow Property Partnerships' Unit Holders to defer the
recognition of gain for Federal income tax purposes resulting from the
contribution of property to PRLP, at Closing, or at any time subsequent thereto
in accordance with the terms hereof, PRLP and its affiliates will permit the
Property Partnerships' Unit Holders to execute a deficit restoration obligation
with PRLP or to guarantee or indemnify PRLP or New Reit for, the "bottom
portion" (i.e., the least risky portion) of any debt incurred by PRLP, New Reit
and their Subsidiaries and affiliates (together with Permitted Assignees). The
individual members of the Property Partnerships' Unit Holders shall be entitled
to guarantee or indemnify a portion of the aggregate amount of liabilities of
PRLP, New Reit and their Subsidiaries and affiliates (together with Permitted
Assignees), to the extent that debt is available, pro rata, in pari passu, to
the aggregate amounts required by all of such members to defer recognition of
gain for federal income tax purposes resulting from the contribution of property
to PRLP. PRLP, New Reit and their Subsidiaries and affiliates (together with
Permitted Assignees) agree, to the extent possible, to maintain an amount of
liabilities of PRLP, New Reit and their Subsidiaries and affiliates (together
with Permitted Assignees) for the Property Partnerships' Unit Holders to
guarantee or indemnify, as the case may be, in order to allow the Property
Partnerships' Unit Holders to continue to defer recognition of gain for Federal
income tax purposes. Notwithstanding the foregoing, it is expressly understood
and agreed that PRLP, New Reit and their Subsidiaries and affiliates (together
with Permitted Assignees) are under no obligation to incur or maintain a
specific amount of liabilities. PRLP and New Reit agree to take any and all
action reasonably necessary so that the execution of each guarantee or indemnity
by the Property Partnerships' Unit Holders results in basis for the Property
Partnerships' Unit Holders for Federal income tax purposes.
21. TAX MATTERS.
21.1 The Property Partnerships and National will pay or provide for payment
of all Taxes due and payable on or after the Closing and will file all returns
and reports required to be filed on or after the Closing with respect to Taxes
imposed in connection with the ownership and operation of the Property for all
taxable periods (or portions thereof) ending on or prior to the Closing. The
Property Partnerships' Unit Holders and National shall provide PRLP with a copy
of all such returns at least thirty (30) days prior to the date for filing such
returns with the extensions.
21.2 The Property Partnerships and National shall pay any and all Taxes
including, without limitation, Taxes imposed with respect to the ownership or
operation of the Property for all taxable periods (or portions thereof) ending
on or prior to the Closing, imposed upon PRLP based, in whole or in part, upon
the failure to comply with the bulk sales laws.
21.3 PRLP will file any and all tax returns and reports required to be
filed after the Closing. However, in connection with Taxes for any taxable
period (or part thereof)
58
beginning prior to Closing and ending after Closing, such Taxes shall be pro
rated between the parties for the period of time National, the Property
Partnerships and PRLP, as the case may be, owned the Property.
21.4 PRLP is hereby authorized to continue the proceeding or proceedings
now pending for the reduction of the assessed valuation of the Property as set
forth on Schedule 21.4 and to litigate or settle the same in PRLP's discretion.
PRLP is hereby authorized in PRLP's sole discretion, to file any applicable
proceeding for the 1997 tax roll for the reduction of the assessed valuation of
the Property. The net refund of taxes, if any, for any tax year for which the
Parties or PRLP shall be entitled to share in the refund shall be divided
between the Properties and PRLP in accordance with the apportionment of taxes
pursuant to the provisions hereof. All expenses in connection therewith,
including counsel fees, shall be borne by the Parties and PRLP in proportion to
their ownership period of the asset in question.
21.5 "Taxes" mean all federal, state, county, local, foreign and other
taxes of any kind whatsoever (including, without limitation, income, profits,
premium, estimated, excise, sales, use, occupancy, gross receipts, franchise, ad
valorem, severance, capital levy, production, transfer, license, stamp,
environmental, withholding, employment, unemployment compensation, payroll
related and property taxes, import duties and other governmental charges or
assessments), whether or not measured in whole or in part by net income, and
including deficiencies, interest, additions to tax or interest, and penalties
with respect thereto, and including expenses associated with contesting any
proposed adjustment related to any of the foregoing.
21.6 The general partner of PRLP, covenants and agrees that PRLP and its
affiliates will use the "traditional method" (as defined in Treas. Reg. Section
1.704-3(b)) of allocating income, gain, loss and deduction to account for the
variation between the fair market value and adjusted basis of the Property for
Federal income tax purposes with respect to (i) the contribution of the
Property, and (ii) any revaluation of the Property in accordance with the
provisions of Treas. Reg. Sections 1.704-1(b)(2)(iv)(f), 1.704-1(b)(2)(iv)(g)
and 1.704-3(a)(6).
21.7 The provisions of this Section shall survive the Closing Date.
22. PUBLICATION.
22.1 PRLP shall have the right to make such public announcements or filings
with respect to the transaction contemplated herein as it may deem reasonably
prudent. National shall be entitled only to make such filings or announcements
in connection with the transaction contemplated herein as may be necessary or
required by law upon advice by counsel.
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23. TERMINATION.
23.1 This Agreement may be terminated at any time prior to the Closing by
the mutual written consent of the Property Partnerships, New Reit, PRLP and
National.
23.2 This Agreement may be terminated by National, New Reit, PRLP or the
Property Partnerships in the event that (a) National's proxy statement is not
filed with the Securities and Exchange Commission by August 12, 1997 (provided,
however, that New Reit shall be entitled to extend said date to September 30,
1997, in its sole discretion); (b) the Closing has not occurred by December 31,
1997, or (c) the Closing has not occurred within fourteen (14) days of obtaining
the National Shareholder Approval; provided, however, that the party terminating
this Agreement pursuant to this Section 23.2 (i) shall not have been responsible
for delaying the occurrence of the event resulting in such termination, and (ii)
must exercise their right to terminate this Agreement within ten (10) days of
the occurrence of the event resulting in such termination.
23.3 This Agreement may be terminated by National in the event that (a) its
counsel advises its Board of Trustees in writing that National's failure to
transfer the National Property to another entity or group making a Competing
Offer as provided in Section 8.5 of this Agreement might subject National's
trustees to liability for breach of their fiduciary duties under applicable law,
or (b) New Reit, PRLP or the Property Partnerships are not ready, willing and
able to perform their obligations hereunder on the Closing Date, or PRLP, New
Reit or the Property Partnerships willfully default or willfully breach any
material representation, warranty, covenant or agreement set forth herein.
23.4 This Agreement may be terminated by New Reit, PRLP or the Property
Partnerships in the event that National is not ready, willing and able to
perform its obligations hereunder on the Closing Date or National willfully
defaults or willfully breaches any material representation, warranty, covenant
or agreement set forth herein.
23.5 Termination of this Agreement as set forth in this Section 23 shall be
subject to the provisions of Section 24 below.
24. REMEDIES.
24.1 In the event that this Agreement is terminated pursuant to Sections
23.1, 23.2, 23.3(b) or 23.4 (except is set forth in Section 24.3), the
terminating party shall give notice to the other parties hereto, following which
the parties shall thereafter have no further obligations under this Agreement.
However, except as provided in Sections 24.2 and 24.3, the Property Partnerships
shall pay the Expenses.
24.2 In the event that this Agreement is terminated pursuant to Section
23.3(a), National shall pay to the Property Partnerships a break-up fee in the
amount of $750,000,
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together with the payment by National of all Expenses, following which the
parties shall thereafter have no further obligations under this Agreement.
24.3 In the event that this Agreement is terminated pursuant to Section
23.4 and such termination resulted from the willful action after the date of
this Agreement of National and/or the Trustees, National shall pay to the
Property Partnerships a break-up fee in the amount of $500,000, together with
the payment by National of all Expenses, following which the parties shall
thereafter have no further obligations under this Agreement.
24.4 In the event that this Agreement is not terminated pursuant to Section
23.4, the Property Partnerships may, at the Property Partnerships' election,
seek specific performance against National (without National's obligation to
cure any willful breach or willful default referenced in Section 23.4),
provided, however, if specific performance is not granted, the Property
Partnerships shall be entitled to the remedy granted pursuant to Section 23.4
24.5 The acceptance of the Deeds by PRLP and New Reit shall be deemed a
full performance and discharge of every agreement and obligation of National,
New Reit and the Property Partnerships to be performed under this Agreement;
provided, however, that any agreements and obligations of National, PRLP, New
Reit and the Property Partnerships to each other which are specifically stated
in this Agreement to survive the Closing or which by their terms are to be, or
may only be, performed after the Closing, shall survive the Closing. The
provisions of this Section 24.4 shall survive Closing.
25. NOTICE.
All notices, demands, requests, or other writings in this Agreement
provided to be given or made or sent, or which may be given or made or sent, by
any party hereto to another, shall be in writing and shall be delivered by
depositing the same with any nationally recognized overnight delivery service,
or by telecopy or fax machine, in either event with all transmittal fees
prepaid, properly addressed, and sent to the following addresses:
If to the Property Partnerships: c/o Philips International Holding Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
with a copy to: Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
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If to National: 00 Xxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Attn.: Xxxxx Xxxxx
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
with a copy to: Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn.: Xxxxxx X. Xxxx, Esq.
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
If to PRLP: c/o Philips International Holding Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
with a copy to: Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Esq.
(000) 000-0000 (tele.)
(000) 000-0000 (fax)
or to such other address as any party may from time to time designate by written
notice to the others. Notices given by (i) overnight delivery service as
aforesaid shall be deemed received and effective on the first business day
following such dispatch and (ii) telecopy or fax machine shall be deemed given
at the time and on the date of machine transmittal provided same is sent prior
to 4:00 p.m. on a business day (if sent later, then notice shall be deemed given
on the next business day) and if the sending party receives a written send
confirmation on its machine and forwards a copy thereof by regular mail
accompanied by such notice or communication. Notices may be given by counsel for
the parties described above, and such Notices shall be deemed given by said
party, for all purposes hereunder.
26. INDEMNITY
New Reit agrees to indemnify, defend and hold harmless the Trustees from
and against all actual claims, damages, losses, costs and expenses incurred by
the Trustees in connection with any litigation arising out of the transactions
contemplated hereby; provided, however, that in no event shall this indemnity
extend to, include or relate to actions or inactions on the part of Messrs.
Xxxxx and Xxxxxxx taken or not taken, as the case may be, which are unrelated to
the
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negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby.
27. ANCILLARY AGREEMENTS
27.1 New Reit and National agree that in consideration of the assistance of
Messrs. Xxxxx and Xxxxxxx in connection with, among other things, the execution
of this Agreement and the consummation of the transactions set forth herein,
their assistance in obtaining the National Shareholder Approval and their
agreement to vote their shares in favor of the transactions contemplated herein,
at the Closing, New Reit shall issue to Messrs. Xxxxx and Xxxxxxx:
(a) an aggregate of 5,000 shares of Common Stock of New Reit (the
"Trustees Certificates") based upon the agreed upon pro forma net asset
value of Fifty ($50.00) Dollars per share of New Reit Common Stock and
assuming a total pro forma net asset value of $74,100,000 for the Property;
and
(b) warrants substantially in the form of Exhibit 27.1 (collectively,
the "Trustees Warrants") to purchase an aggregate of up to 8,000 shares of
Common Stock of New Reit at an exercise price equal to Twenty-five ($25.00)
Dollars per share, based also on the net asset value described in Section
27.1(a).
27.2 (a) At the Closing, New Reit shall pay to Prudential Securities
Incorporated ("Prudential") a fee for its services (the "Prudential Fee"), which
Prudential Fee shall be equal to One Million Nine Hundred and Forty Thousand
($1,940,000) Dollars. The Prudential Fee shall be payable by New Reit by its
delivery to Prudential, at Closing, of a promissory note (the "Prudential Note")
bearing interest at a rate of nine (9%) percent per annum and interest only
payable quarterly, and maturing on the earlier to occur of (i) the first
anniversary of the date of issuance of the Prudential Note and (ii) the closing
of New Reit's first equity offering, whether public or private. The Prudential
Note shall provide for other terms and conditions more particularly set forth
therein.
(b) New Reit further agrees that Prudential shall have the right to act as
lead manager of New Reit's first public offering or as exclusive sales agent for
New Reit's first private offering in excess of $25,000,000, upon terms and
conditions to be agreed upon by the parties.
(c) At the Closing, New Reit shall execute an agreement (the "New Reit
Indemnity"), providing that New Reit shall assume the indemnification
obligations between National and Prudential related to Prudential's capacity as
financial advisor in connection with the transactions contemplated hereby.
27.3 At Closing, PRLP shall enter into a management agreement with Philips
International Holding Corp., a New York corporation and an affiliate of certain
of the Property Partnerships (the "Management Company") substantially in the
form of Exhibit 27.2 (the "Management Agreement"), pursuant to which, among
other things, the Management Company
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shall be responsible for the day-to-day leasing, development, acquisition,
property and portfolio management and related administrative functions.
27.4 At Closing, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxx and the Management Company
shall enter into a non-competition agreement with PRLP and New Reit,
substantially in the form of Exhibit 27.4 (the "Non-Competition Agreement"),
pursuant to which, among other things, Xx. Xxxxxxxx, Xx. Xxxxxx, the Management
Company and certain of their respective affiliates will agree that all future
acquisitions and/or development of retail shopping center properties will be
consummated through PRLP and/or New Reit.
27.5 At Closing, New Reit shall enter into a registration rights agreement
with each of the Property Partnerships' Unit Holders, substantially in the form
of Exhibit 27.5 (the "Registration Rights Agreements"), pursuant to which, among
other things, the Property Partnerships' Unit Holders shall be granted certain
customary demand and "piggyback" registration rights with respect to the shares
of Common Stock which underly the Units received in connection with the
transactions contemplated hereby.
28. MISCELLANEOUS
28.1 If any instrument or deposit is necessary in order to obviate a defect
in or objection or exception to title, the following shall apply: (i) any such
instrument shall be in such form and shall contain such terms and conditions as
may be required by the Title Company to omit any defect, objection or exception
to title, (ii) any such deposit shall be made with the Title Company, and (iii)
the Property Partnerships and National agree to acknowledge and deliver any such
instrument and to make any such deposit.
28.2 This Agreement constitutes the entire agreement between the parties
and incorporates and supersedes all prior negotiations and discussions between
the parties. This Agreement shall be binding upon and inure solely to the
benefit of each party hereto and their successors and assigns, and nothing in
the Agreement express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
28.3 This Agreement cannot be amended, waived or terminated orally, but
only by an agreement in writing signed by the party to be charged.
28.4 This Agreement shall be interpreted and governed by the laws of the
State of New York and shall be binding upon the parties hereto and their
respective successors and assigns.
28.5 The caption headings in this Agreement are for convenience only and
are not intended to be part of this Agreement and shall not be construed to
modify, explain or alter any of the terms, covenants or conditions herein
contained.
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28.6 If any term, covenant or condition of this Agreement is held to be
invalid, illegal or unenforceable in any respect, this Agreement shall be
construed without such provision.
28.7 Prior to and after the Closing, each party shall, from time to time,
execute, acknowledge and deliver such further instruments, in recordable form,
if necessary, and perform such additional acts, as the other party may
reasonably request in order to effectuate the intent of this Agreement, within
thirty (30) days of the request. Nothing contained in this Agreement shall be
deemed to create any rights or obligations of partnership, joint venture or
similar association between the parties. This Agreement shall be given a fair
and reasonable construction in accordance with the intentions of the parties
hereto, and without regard to or aid of canons requiring construction against
the parties or the party whose counsel drafted this Agreement. The provisions of
this Section 28.7 shall survive the Closing.
28.8 This Agreement shall not be effective or binding until such time as it
has been executed and delivered by all parties hereto. This Agreement may be
executed by the parties hereto in counterparts, all of which together shall
constitute a single Agreement.
28.9 All references herein to any Section or Exhibit shall be to the
Sections of this Agreement and to the Exhibits annexed hereto unless the context
clearly dictates otherwise. All of the Exhibits annexed hereto are, by this
reference, incorporated herein.
28.10 In the event of any litigation or alternative dispute resolution
between the parties hereto in connection with this Agreement or the transaction
contemplated herein, the non-prevailing party in such litigation or alternative
dispute resolution shall be responsible for payment of all expenses and
reasonable attorneys' fees incurred by the prevailing party. The provisions of
this Section 28.10 shall survive the Closing.
28.11 Whenever used herein, the singular number shall include the plural,
the plural shall include the singular, and the use of any gender shall be
applicable to all genders.
28.12 A copy of the Agreement and Declaration of Trust of National is on
file with the Secretary of State of The Commonwealth of Massachusetts and notice
is hereby given that this Agreement has been executed on behalf of National by a
trustee of National as a trustee and not individually and the obligations of
National arising out of this Agreement are not binding upon any of the trustees,
officers or shareholders of National individually but are binding only upon the
assets and property of National.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FOREST AVENUE SHOPPING LLC
By: /s/ Xxxxxx Xxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Managing Member
PHILIPS FREEPORT ASSOCIATES, L.P.
By: Philips Freeport Development Corporation,
its general partner
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: President
XXXXXXX SHOPPING ASSOCIATES
By: Xxxxxxx Holiday Limited Partnership,
a general partner
By: Xxxxxxx Holiday Corp., general partner
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: President
By: Xxxxxxx Equities L.P., a general partner
By: The Xxxxxxx Corporation, general partner
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
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SP AVENUE U ASSOCIATES, L.P.
By: SP Avenue U Corp., its general partner
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
ENFIELD SHOPPING L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Managing Member
BRANHAVEN PLAZA L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Member
PALM SPRINGS MILE ASSOCIATES, LTD.
By: Palm Mile Corp., its General Partner
By: /s/ Xxxxxx Xxxxxx
__________________________________________
Name: Xxxxxx Xxxxxx
Title: President
PARTNERS OF PALM SPRINGS MILE
ASSOCIATES, LTD.:
PALM MILE CORP.
By: /s/ Xxxxxx Xxxxxx
__________________________________________
Name: Xxxxxx Xxxxxx
Title: President
00
XX XXXX XXXXXXX L.P.
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: General Partner
/s/ Xxxxxx Xxxxxxxx
________________________________________________
Xxxxxx Xxxxxxxx
FOXBOROUGH SHOPPING L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
_________________________________
Name: Xxxxxx Xxxxxxxx
Title: Managing Member
MEMBERS OF FOXBOROUGH SHOPPING L.L.C.
/s/ Xxxxxx Xxxxxxxx
________________________________________________
Xxxxxx Xxxxxxxx
XXXXXX REALTY CO.
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
CENTURY REALTY INC.
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
/s/ Xxxxxx Xxxxxxxx
________________________________________________
Xxxxxx Xxxx, by Xxxxxx Xxxxxxxx,
Attorney-in-Fact
68
ESTATE OF XXXXX XXXX
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
DELRAN SHOPPING L.L.C.
By: /s/ Xxxxxx Xxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Managing Member
MEMBERS OF DELRAN SHOPPING L.L.C.
/s/ Xxxxxx Xxxxxxxx
________________________________________________
Xxxxxx Xxxxxxxx
XXXXXX REALTY CO.
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
CENTURY REALTY INC.
By: /s/ Xxxxxx Xxxxxxxx
__________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
/s/ Xxxxxx Xxxxxxxx
________________________________________________
Xxxxxx Xxxx, by Xxxxxx Xxxxxxxx,
Attorney-in-Fact
69
ESTATE OF XXXXX XXXX
By: /s/ Xxxxxx Xxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Attorney-in-Fact
NATIONAL PROPERTIES INVESTMENT TRUST
By: /s/ Xxxxx Xxxxx
________________________________________________
Name: Xxxxx Xxxxx
Title: Trustee
By: /s/ Xxx Xxxxxxx
________________________________________________
Name: Xxx Xxxxxxx
Title: Trustee
By: /s/ Xxxxxx Xxxxxxxxx
________________________________________________
Name: Xxxxxx Xxxxxxxxx
Title: Trustee
PHILIPS INTERNATIONAL REALTY, L.P.
By: Philips International Realty Corp.,
its General Partner
By: /s/ Xxxxxx Xxxxxxxx
_________________________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
PHILIPS INTERNATIONAL REALTY CORP.
By: /s/ Xxxxxx Xxxxxxxx
_________________________________
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
70
With respect to Sections 26
and 27.1 only:
/s/ Xxxxx Xxxxx
________________________________________________
Xxxxx Xxxxx
/s/ Xxx Xxxxxxx
________________________________________________
Xxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxxx
________________________________________________
Xxxxxx Xxxxxxxxx
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