Exhibit 10.62
CONTRACT OF SALE
THIS CONTRACT OF SALE ("Agreement") made as of this 20th day of
April, 1999 between XXXXXX FURNITURE CORPORATION, a Florida corporation,
and the various subsidiaries set forth on Exhibit 1 (hereinafter,
collectively "Seller") and XXXXX REALTY, LP, a Delaware limited partnership
("Xxxxx"), XXXXXX-XXXXX CAPITAL REAL ESTATE FUND II, L.P. ("LA1"), a
Delaware limited partnership, XXXXXX-XXXXX REAL ESTATE FUND II, L.P.
("LA2"), a Delaware limited partnership and XXXXXX-XXXXX PARALLEL FUND II,
L.P. ("LA3"), a Delaware limited partnership (Xxxxx, XX0, XX0 and LA3 are
hereinafter, collectively "Purchaser").
W I T N E S S E T H:
WHEREAS:
1. The Seller filed for protection from its creditors under Chapter
11 of the Bankruptcy Code (as defined below) on September 5, 1997. The
Seller's Chapter 11 case is currently pending before the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in
In re Xxxxxx Furniture Incorporated et al, a Delaware corporation, Case No.
97-1842 (the "Bankruptcy Cases").
2. Seller represents it owns (a) fee simple title to those certain
parcels of real estate (hereinafter collectively referred to as the "Fee
Parcels" and individually as a "Fee Parcel") located and described as set
forth in Exhibit 2; and (b) the tenant's entire right, title and interest
in and to certain leases for locations described in Exhibit 3 (hereinafter
collectively referred to as the "Leased Parcels" and individually as a
"Leased Parcel"), on each of which it currently operates or formerly
operated a Xxxxxx retail store. Each of such Fee Parcels and Leased Parcels
is sometimes hereinafter individually referred to as a "Parcel"; and all of
same are hereinafter collectively referred to as the "Parcels."
3. Seller wishes to sell and Purchaser wishes to purchase Seller's
fee and leasehold interests in and to such Parcels.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. DEFINITIONS. For this Agreement, the following expressions shall
have the meanings hereinafter set forth.
1.1 "Auction" shall have the meaning set forth in Section 15.3
------- ------------
hereof.
1.2 "Bankruptcy Code" means Title 11 and applicable portions of
Titles 18 and 28 of the United States Code, as amended from time to time.
1.3 "Breakup Fee" means a fee of One Million Three Hundred
Thousand Dollars ($1,300,000.00) payable by Seller to Purchaser under the
circumstances and in the manner set forth in Section 15.4 hereof.
1.4 "Business day" means any day that is not a Saturday, Sunday
or legal holiday in the Commonwealth of Pennsylvania, State of Illinois or
the State of New York.
1.5 "Closing Date" means the date referred to in Section 9.1.
"Closing" means the event whereby title to all of the Properties is
actually conveyed by Seller to Purchaser in accordance with the provisions
of this Agreement and the Purchase Price, as adjusted pursuant to the
provisions of this Agreement, paid by Purchaser and received by Seller in
accordance with Section 3.
1.6 "Cost Reimbursement" shall mean the cost reimbursement
referred to in Section 14.3 which shall, except as provided in Section
15.1, be approved by the Bankruptcy Court by entry of the Procedures Order,
substantially in the form of Exhibit 4.
1.7 "EBITDA" shall mean earnings before interest, taxes,
depreciation and amortization expenses, as determined in accordance with
generally accepted accounting principles consistently applied.
1.8 "Environmental Law" means any applicable statute,
regulation, rule, ordinance, code, license or order of any Governmental
Authority (as such term is hereinafter defined) and all applicable judicial
and administrative and regulatory decrees, judgments and orders, relating
to the protection of public health, public safety or the environment,
including, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Sections 9601 et seq., as amended by
the Superfund Amendments and Reauthorization Act of 1986; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the Clean
Air Act, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution
Control Act, 42 U.S.C. Sections 1251 et seq.; the National Environmental
Policy Act, 42 U.S.C. Sections 4321 et seq.; the Refuse Act, 33 U.S.C.
Sections 401 et seq.; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Sections 136 et seq.; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. Sections 11001 et seq.; the Occupational
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; the Hazardous
Materials Transportation Act, as amended by the Hazardous Materials
Transportation Authorization Act of 1994, 49 U.S.C. Sections 5101 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.; the Oil
Pollution Act of 1990, 33 U.S.C. Sections 2701 et seq.; as each of these
may be amended from time to time; and any state or local analogues to any
of these statutes.
1.9 "Final Order" means an order of the Bankruptcy Court which
(a) has not been reversed or stayed and as to which the time to appeal has
expired and as to which no appeal or petition for review, rehearing,
reconsideration or certiorari is pending; or (b) with respect to which any
appeal has been finally decided and no further appeal or petition for
certiorari can be taken or granted.
1.10 "Governmental Authority": Any municipal, county, state,
federal or foreign governments, agencies, departments, authorities, both
public and quasi-public, courts, boards, bureaus, commissions and officers
of any of the foregoing.
1.11 "Hazardous Substance": Any material, substance, compound,
solid, liquid or gas, or any radiation, emission or release of energy in
any form, whether naturally occurring, man-made or the product of any
process (1) which is or may under certain conditions be toxic, harmful,
hazardous or acutely hazardous to public health, public safety or the
environment, (2) which is or may be defined or regulated as a "hazardous
waste," "hazardous substance," "toxic substance," pollutant or contaminant
under any Environmental Law, (3) the use, handling, management, release,
treatment, storage, transportation or disposal of which is or may be
regulated under any Environmental Law or (4) the removal, remediation or
abatement of which is required under any Environmental Law. Hazardous
Substances include asbestos, polychlorinated biphenyls, mercury, lead,
petroleum and petroleum products and derivatives, urea formaldehyde foam
insulation and radon and other radioactive materials.
1.12 "Xxxxxx Lease" means the Unitary Lease, in form and
substance attached hereto as Exhibit 5 and made a part hereof, to be
entered into at Closing between Purchaser or Purchaser's Designee, as
landlord, and Seller, as tenant.
1.13 "Xxxxxx Store" means, with respect to any Parcel, that
portion thereof currently or formerly being occupied and used by Xxxxxx as
a Xxxxxx retail store.
1.14 "Xxxxxxxxx" means any lease between a fee owner (or lessee
or ground lessee) as landlord and Seller as tenant, covering or with
respect to any Leased Parcel. All Overleases as of the date hereof are
listed on Exhibit 6.
1.15 "Permitted Exceptions" means, with respect to each Parcel:
(a) the lien of real estate taxes not yet due and payable; and (b) all
easements and other matters of record identified on Exhibit 7. Mortgages,
judgments and other monetary liens (except for mortgages on the fee
interest of landlords under Overleases where: (i) the lien of such mortgage
is subordinate to the leasehold estate created by the Xxxxxxxxx; or (ii) by
agreement of the mortgagee under such mortgage, the foreclosure of such
mortgage shall not result in a termination of the Xxxxxxxxx (each, a
"Permitted Mortgage")); and leases, other than the Space Leases, shall not
be Permitted Exceptions.
1.16 "Personal Property" means, with respect to each Parcel,
the relevant working files (other then records of Seller's business) which
are in the possession of Seller and are required for the efficient
operation of the Real Estate, including sepias, drawings, surveys, plans
and specifications; (unless required by law to be maintained by Seller
solely in its capacity as an operator of a Xxxxxx Store on such Parcel) all
licenses, permits, certificates of occupancy (or local equivalent) in the
possession of or available to Seller; the real estate records, statements,
invoices (including real property tax invoice and statements); engineering
reports and environmental reports; all guarantees and warranties related to
all Real Estate; and all tangible personal property (other than inventory
and stock in the trade) located on any Parcel and used in connection with
the operation and maintenance of any Real Estate (but, for purposes of
clarification, excluding any personal property used exclusively or
primarily for retail operations (e.g. cash registers) or storage of
furniture (e.g. furniture racking system)).
1.17 "Procedures Order" shall mean an order of the Bankruptcy
Court: (a) approving the procedures for the Auction set forth in Section
15.3 hereof; (b) approving the Breakup Fee to Purchaser set forth in
Section 15.4 hereof; and (c) approving the Cost Reimbursement set forth in
Sections 14.3 hereof, which shall, except as provided in Section 15.1, be
in the form of Exhibit 4.
1.18 "Property" means, with respect to each Parcel,
collectively all of Seller's rights, title and interest in the Real Estate
and all the other assets described in Section 2. "Properties" means each
and every Property, collectively.
1.19 "Purchaser Designee" means any limited partnership,
limited liability company or corporation owned in whole or part, directly
or indirectly, by Xxxxxx Xxxxx and/or Xxxx
X. Xxxxx.
1.20 "Real Estate" means, with respect to each Parcel, Seller's
entire right, title and interest in and to the land described on Exhibits 2
and 3 and all of the buildings, buildings systems, building equipment,
building fixtures (including pylon structures but excluding the furniture
racking system), and other real property improvements constructed thereon.
1.21 "Sale Motion" shall mean a motion filed by Seller within
the time frame required by Section 15.1 seeking approval of the matters set
forth in Section 15.1 and 15.2.
1.22 "Sale Order" shall mean an order of the Bankruptcy Court:
(a) authorizing the Seller to execute this Agreement, and approving this
Agreement, the sale of the Properties to Purchaser pursuant to this
Agreement, and the Xxxxxx Lease, which shall, except as provided in Section
15.2, be in the form of Exhibit 8: or (b) if Purchaser is not the
successful bidder, approving the sale of the Properties to the successful
bidder, and which shall, except as provided in Section 15.2, be in the form
of Exhibit 8.
1.23 "Space Lease(s)" means all tenant ground lease(s), space
lease(s), license(s), concessions or other occupancy or use agreements
where Seller is the landlord, sublandlord or licensor, including all
modifications, addenda and supplements thereto and guarantees thereof,
applicable to any part of the Real Estate, including all Transferred
Leases. However, "Space Leases" does not include license, concession or
other occupancy or use agreements for departments of any Xxxxxx Stores
("Concession Agreements") which would not in any event be binding upon or
required to be recognized by Purchaser by reason of termination or closing
of the Xxxxxx Store or otherwise. All existing Space Leases and Concession
Agreements as of the date hereof are listed on Exhibits 9 and 10
respectively.
1.24 "Transferred Leases" means those Space Leases listed on
Exhibit 11.
2. SALE AND PURCHASE.
2.1 Seller agrees to sell, convey, assign and transfer to
Purchaser (or, at Purchaser's option, to a Purchaser Designee), and
Purchaser agrees to purchase and acquire from Seller (or, with regard to
any Parcel at Purchaser's option, Purchaser agrees to cause a Purchaser
Designee to purchase and acquire), free and clear of all liens, claims and
encumbrances other than the Permitted Exceptions:
(a) With regard to all Fee Parcels, all of Seller's
right, title and interest in and to: (i) the Real Estate; (ii) land lying
in the bed of any street, road or avenue, opened or proposed, if any, in
front of or adjoining the Real Estate, strips or gores adjoining the Real
Estate, if any; (iii) all appurtenances and hereditaments appertaining to
the Real Estate, including without limitation any easements; (iv) all
awards made or to be made to Seller for the Parcels or any part thereof by
reason of a taking by eminent domain or in lieu thereof, except as
otherwise set forth in the Xxxxxx Lease; (v) except as otherwise set forth
in the Xxxxxx Lease, any unpaid award for damages to the Real Estate by
reason of change of grade of any street (Seller hereby agreeing to execute
and deliver to Purchaser, on the Closing Date or thereafter, all proper
instruments for collection of any such award); (vi) any Personal Property,
and (vii) any Transferred Leases.
(b) With regard to all Leased Parcels, all of Seller's
right, title and interest in and to: (i) the Overleases and any
appurtenances pertaining thereto, including without limitation any
easements; (ii) any Personal Property; and (iii) any Transferred Leases.
2.2 Except as otherwise provided in this Agreement, the
Properties shall be conveyed to Purchaser "As Is" and "Where Is" in the
same condition as it exists as of the date of this Agreement, normal wear
and tear excepted, and subject to warehouse renovations, store remodelings
and other work approved by Purchaser as set forth on Exhibit 12 attached
hereto.
3. PURCHASE PRICE. The "Purchase Price" for all of the Properties
shall be SEVENTY MILLION ONE HUNDRED EIGHTY-EIGHT THOUSAND DOLLARS
($70,188,000.00), as adjusted pursuant to the terms of this Agreement;
which shall be and be deemed allocated among the Parcels for all purposes
(including without limitation payment of any and all Transfer Taxes (as
hereinafter defined) and amounts of title insurance premiums) as set forth
in Exhibit 13 hereto. The Purchase Price shall be payable as follows:
3.1 The sum of Three Million Seven Hundred Thousand Dollars
($3,700,000.00) (the "Deposit") shall be payable on the next business day
after the date of this Agreement by wire transfer of immediately available
federal funds to First American Title Insurance Company of New York, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, XX (the "Escrow Agent"), to be held by Escrow
Agent in escrow for delivery at Closing or as otherwise provided herein, in
one or more federally insured interest bearing escrow accounts. If
Purchaser fails to deliver the Deposit within three (3) business days after
the date of this Agreement, then this Agreement shall terminate and be void
and no party shall have any rights or obligations pursuant hereto. All
interest accruing on the Deposit shall become a part of same and shall be
distributed in accordance with the terms hereof.
3.2 The balance of the Purchase Price, as adjusted pursuant to
the provisions of this Agreement, by wire transfer of immediately available
federal funds to Seller's account, at Closing.
3.3 In the event Purchaser is entitled to and does exercise the
right to terminate this Agreement as hereinafter provided, or any of the
conditions precedent to Closing under Section 11 are not timely satisfied
and not waived by Purchaser in writing, Escrow Agent shall promptly release
and deliver to Purchaser the Deposit, together with all accrued interest
and all other monies paid on account of the Purchase Price.
4. ADJUSTMENTS AND PRORATIONS.
4.1 As hereinafter set forth, at Closing, Purchaser as landlord
and Seller as tenant shall enter into the Xxxxxx Lease for all Parcels
pursuant to which Seller as tenant will continue to be responsible for all
real estate taxes, insurance, utilities, Xxxxxxxxx rent and all other
expenses regarding each Parcel (except as expressly otherwise set forth in
the Xxxxxx Lease). In view of the foregoing, there shall be no proration at
Closing of any of said items of income or expenses if and to the extent
same would not be appropriate.
4.2 Notwithstanding the foregoing, at Closing Seller shall pay
(or Purchaser at its option may take a credit against the Purchase Price
for) the following amounts with respect to each Parcel (or all Parcels, as
the case may be):
(a) Rent under the Xxxxxx Lease for the balance of the
month in which Closing occurs;
(b) All payments required to be made to Landlord under
the Xxxxxx Lease for periods through and including the last day of the
month in which Closing occurs;
(c) All of the following expenses paid or incurred by
Purchaser in connection with the transaction contemplated hereby for all
Parcels: any and all sales, transfer, conveyance, deed, recording and/or
documentary stamp taxes, fees and similar costs and charges relating to, or
with respect to, the conveyance and transfer of the Properties, and the
execution and/or recordation of the Xxxxxx Lease or any sublease from a
Purchaser Designee to Purchaser (hereinafter collectively referred to as
"Transfer Taxes"); all title insurance premiums, fees and charges for
owners or leasehold title policies in the aggregate amount of the Purchase
Price, in form acceptable to Purchaser, including all title endorsements
listed on Exhibit 14; all survey costs for survey preparation, update,
inspection and/or recertification; and all costs of environmental and/or
physical consultant and/or inspections prepared by ATC Associates, Inc. at
the request of Seller; provided, however, if Purchaser is the successful
bidder at the Auction and Purchaser desires that the aforesaid
environmental audits be certified to Purchaser and/or Purchaser's lender,
then Purchaser shall pay Seller Twenty-Eight Thousand Dollars ($28,000.00)
towards the costs of such environmental audits.
4.3 Further notwithstanding the foregoing, all rent and
additional rent under the Transferred Leases shall be pro-rated and
apportioned on the Closing Date, as of 11:59 P.M. of the day immediately
preceding Closing, in accordance with the following provisions:
(a) Purchaser shall receive a credit at Closing for base
or minimum rent and any monthly escalation or pass-through payments
(whether collected on an estimated basis or otherwise) for taxes, CAM
Charges (as hereinafter defined), etc., due under all Transferred Leases
for the period from the Closing Date through and including the last day of
the month in which Closing occurs. Seller may retain all base or minimum
rent and such monthly escalation payments under all Transferred Leases for
the month in which Closing occurs (collectively "Closing Month Rents") it
may have heretofore collected or may hereafter receive; and Purchaser shall
promptly pay over to Seller the entire amount of any Closing Month Rents
Purchaser may hereafter receive;
(b) Real estate tax payments (other than those included
in Closing Month Rents) due under Transferred Leases shall be prorated on a
per diem basis as and when collected. Purchaser shall not be obligated to
make any payment or give any credit to Seller on account of or by reason of
any rental or other payments which are unpaid as of the date of Closing,
but shall be required to turn over Seller's share of the same within thirty
(30) days if, as and when received by Purchaser after the Closing (subject
to Section 4.4). Purchaser shall not be required to institute any action or
proceeding to collect any rent delinquencies;
(c) Percentage rent (i.e., that portion of the rent
payable to the landlord by the tenant under a Transferred Lease which is a
percentage of the amount of sales or of the dollar amount of sales of such
tenant), if any, payable under each Transferred Lease shall be prorated
with respect to the lease year thereunder in which the Closing occurs on a
per diem basis as and when collected. Any percentage rent collected by
Purchaser including any percentage rent which is delinquent and pertaining
to: (i) an entire lease year or accounting period of a tenant under a
Transferred Lease which ends on a date prior to the date of Closing; and
(ii) that portion of a lease year or accounting period of such tenant
covering a period prior to the date of Closing where such lease year or
accounting period begins prior to the date of Closing and ends thereafter
shall in both cases (subject to Section 4.4) be paid to Seller within
thirty (30) days of receipt by Purchaser. Purchaser shall not be required
to institute any action or proceeding to collect any delinquent percentage
rent;
(d) Common area maintenance expenses and charges relating
to Transferred Leases ("CAM Charges") shall be prorated. Seller shall be
responsible for all CAM Charges incurred prior to Closing, and Purchaser
shall be responsible for CAM Charges subsequent to Closing (subject to the
relevant provisions of the Xxxxxx Lease). All CAM Charge payments made by
each tenant under its Transferred Lease for the entire lease year during
which the Closing occurs, including end-of-year adjustments, if any, shall
be prorated between Seller and Purchaser in the following manner: Prior to
Closing, Seller shall deliver to Purchaser, with regard to each Transferred
Lease where the tenant is required to pay CAM Charges under its lease, a
detailed computation showing all CAM Charge expenses incurred by Seller for
the period from the beginning of each such tenant's then current billing
period for CAM Charges (e.g., calendar year, lease year, etc.) through the
Closing Date, any CAM Charge monthly escalation or pass through payments
theretofore collected by Seller (whether on an estimated basis or
otherwise) relating to such tenant (hereinafter referred to as the "CAM
Payments"), and a xxxx for the tenant's pro rata share of CAM Charges
(i.e., for CAM Charges through the Closing Date net of any such CAM
Payments), together with all invoices and other evidence documenting such
CAM Charges in detail required by such tenant's lease. Purchaser, at its
option, may either:
(i) elect to send any such bills to tenants
promptly following Closing, in which event such tenant shall pay any amount
shown due directly to Seller, and Purchaser shall have no responsibility to
collect same; or
(ii) elect to incorporate any bills prepared by
Seller into a single post-closing (as and when Purchaser deems appropriate
for annual reconciliation or other billing of CAM charges for any tenant)
xxxx for CAM Charges to such tenant, in which event such single xxxx, as
and when paid, shall be apportioned between Seller and Purchaser based on
the ratio of pre-and post-Closing CAM Charges (taking into account any CAM
Payments retained by Seller at Closing); or
(iii) elect, post-Closing (as and when Purchaser
deems appropriate for annual reconciliation or other billing of CAM Charges
for any tenant) to send two bills to such tenant (i.e., one for pre-Closing
CAM Charges as prepared by Seller and one for post-Closing CAM Charges),
with such tenant to pay Seller directly for unpaid pre-Closing CAM Charges,
if any.
Notwithstanding Purchaser's election above set forth, any CAM
Payments for any tenant shall be retained by Seller up to the amount of the
pre-Closing CAM Charges payable by such tenant as evidenced by such bills
and computations delivered by Seller at Closing, and any excess shall be
paid or credited to Purchaser at Closing. If, based upon an annual
reconciliation of CAM Charges, Purchaser determines that tenants under
Transferred Leases are owed refunds with respect to the pre- Closing
period, then then Seller shall pay such refund to Purchaser within thirty
(30) days after notice, and this obligation shall survive the Closing.
4.4 In the event that there remains any unpaid base or minimum
rent under any Transferred Lease for a period prior to the month of
Closing, all payments of base or minimum rent received from such tenant
shall be applied to sums owed Purchaser before any part thereof shall be
treated as belonging to Seller. In the event that there remains any unpaid
tenant receivable other than base or minimum rent (including without
limitation any tax, CAM Charges, insurance or percentage rent payments) for
any period prior to the Closing under any such lease, all payments received
from any tenant in arrears shall be applied to any sums owed Purchaser from
such tenant (whether base or minimum rent or any other amount) before any
part thereof shall be treated as belonging to Seller. If at the time of
Closing any tenants under any Transferred Leases owe Seller any money,
Seller shall have the right, subsequent to the Closing, to collect such
sums directly from the tenants including bringing lawsuits against the
tenants (at Seller's sole expense) for such collection; provided, however,
Seller agrees that any such legal action or collection shall not include
any disturbance of the possession, use or occupancy by the tenants of this
space under any Transferred Lease or any right to evict the tenants,
whether pursuant to the lease provisions or otherwise, and Purchaser shall
not be obligated to join in any lawsuit or in any other way to participate
or cooperate with Seller in its collection attempts, unless required to by
law for Seller to maintain its action, and in such event, Purchaser will
(at Seller's expense) join in such a lawsuit or action only if the same
does not include, require or result in disturbance of the possession, use
or occupancy by any tenants, as aforesaid.
4.5 All brokerage and leasing commissions or other compensation
due or accrued prior or subsequent to the date of Closing to any broker,
agent, or other person in connection with any Parcel for brokerage or other
services rendered to Seller or any predecessor of Seller in connection with
the management and/or leasing of the Parcel (including without limitation
any that may or could be due at Closing or in the future, attributable to
the execution or renewal of any Space Lease) shall be credited to Purchaser
to the extent not paid by Seller prior to Closing (it being agreed that
payment of all of the foregoing shall be the sole responsibility of
Seller).
4.6 All prepaid rentals, other prepaid payments, security
deposits, electric, gas, sewer and water deposits deposited with Seller by
tenants, (including all accrued interest on all of the foregoing, unless
Seller is entitled to retain the benefit thereof) under any Transferred
Leases shall all belong to Purchaser and all shall be assigned and
delivered to Purchaser at the Closing. At Purchaser's option, Purchaser may
take a cash credit in the amount of all security deposits and other amounts
to be delivered to Purchaser at Closing pursuant to this Section 4.6, and
Seller may retain same. Purchaser shall indemnify Seller against liability
with respect to such security deposits to the extent of such security
deposit credit.
4.7 If, following Closing, a claim should be made by any
entity, party or authority that it is entitled to receive unpaid or
additional Transfer Taxes, Seller shall be responsible for and hereby
agrees to pay any such claim as and when made (including any interest
and/or penalties thereon or in connection therewith). Seller shall have the
right to contest any such claim, provided it deposits the amount claimed in
escrow with Purchaser for payment if such contest is unsuccessful. Seller
shall and hereby agrees to defend, indemnify and hold Purchaser harmless
from and against any claim, cost, loss or liability arising from or related
to non-payment of any Transfer Taxes.
4.8 The parties recognize that the roofs of the St. Xxxx, MN,
Burnsville, MN and Woodbridge, NJ Xxxxxx Stores, among others, are in need
of repair, replacement and/or snow bracing, as more fully described in
Exhibits 15 and 18 attached hereto (the "Roof Work"), which Roof Work must
be completed by Seller at Seller's sole cost and expense. Seller shall
cause the Roof Work to be performed in a good and workmanlike manner, in
accordance with all applicable laws and to Purchaser's reasonable
satisfaction. Any Roof Work shall be performed using such materials and
techniques as will assure at least a twenty (20) year useful life for the
roofs. Within sixty (60) days after Closing and every sixty (60) days
thereafter until the Roof Work is fully completed, the Seller shall provide
Purchaser with a written report which shall describe the Roof Work that
Seller has completed since Closing or during the sixty (60) day period
preceding the report. All such Roof Work shall be completed within eighteen
(18) months after Closing; provided, however if the Roof Work is not
completed prior to the date of confirmation of a plan of reorganization
under Chapter 11 of the Bankruptcy Code in the Bankruptcy Cases (the "Plan
of Reorganization"), then the Plan of Reorganization shall expressly
provide that Purchaser shall have an allowed super-priority administrative
expense claim, which shall have priority over any and all administrative
expenses of the kind specified in Sections 503(b) or 507(b) of the
Bankruptcy Code, equal to Nine Hundred Eighty-Five Thousand Dollars
($985,000.00) less the value of all Roof Work performed and paid for by
Seller to the date the Plan of Reorganization is confirmed, which amount
shall be funded on the effective date of such confirmed Plan of
Reorganization and placed in one or more segregated, federally insured,
interest bearing escrow accounts designated by Purchaser (the "Roof Work
Account") to pay for the cost of the Roof Work. Alternatively, Seller may
post a letter of credit in the aforesaid amount, issued by a bank and
otherwise in form and substance, acceptable to Purchaser. All interest
earned on the funds in the Roof Work Account shall be added to and become a
part of the Roof Work Account. Prior to the disbursement of any funds in
the Roof Work Account or a draw on the letter of credit, as the case may
be, Seller shall provide to Purchaser: (a) a budget for the completion of
the Roof Work, setting forth in reasonable detail line items for the
significant portions of the Roof Work; and (b) a copy of each executed
construction contract for the Roof Work. The funds in the Roof Work Account
shall be disbursed or the letter of credit may be drawn in the following
manner: On or before the 15th day of each month during the course of the
construction of the Roof Work, Seller shall deliver to Purchaser a
statement certified by Seller setting forth the costs of Roof Work incurred
by Seller for the preceding calendar month, accompanied by AIA form G702
(or such other voucher or form reasonably prescribed by Purchaser or its
lender), and which shall provide for retainage of ten percent (10%) until
the Roof Work is fifty percent (50%) completed, at which time the retainage
shall be reduced to five percent (5%) ("Seller's Maintenance Draw").
Purchaser shall pay or cause to be disbursed Seller's Maintenance Draw
within thirty (30) days thereafter. If the actual cost of performing the
Roof Work is greater than the balance in the Roof Work Account or if it
exceeds the amount of the letter of credit, then Seller will pay the
difference on demand, and if the actual costs are less, then Purchaser will
promptly refund the difference to Seller. The Roof Work is in addition to
any maintenance, repairs and replacements that Seller is obligated to
perform pursuant to the Xxxxxx Lease. The provisions of this Section 4.8
shall survive the Closing.
4.9 The parties acknowledge that Xxxxxxxx-Xxxxx Associates, Inc
has reviewed certain environmental reports prepared by ATC Associates, Inc.
with respect to the Real Estate, and has issued a report (the
"Environmental Report Summary") which sets forth certain environmental
conditions described in Exhibit 16 (which, together with any other
environmental conditions identified pursuant to clause (a) below, are
hereinafter called "Environmental Conditions") and recommends that certain
action be taken in response to the Environmental Conditions, including the
performance of additional environmental investigation and testing. Between
the date of this Agreement and the date of Closing, Seller shall, at
Seller's sole cost and expense: (a) perform all additional environmental
investigation and testing recommended by the Environmental Report Summary;
and (b) prepare and submit to Purchaser for Purchaser's approval, an
environmental remediation plan (the "Remediation Plan") which shall set
forth, among other things, the scope of work, estimated cost, contractors
and consultants to be engaged and time frame within which Seller will cause
the Environmental Conditions to be remediated; provided, however, if Seller
reasonably determines that the individual cost of remediating the
Environmental Conditions at any individual Parcel of Real Estate exceeds
fifty percent (50%) of the liquidation value of such Parcel as allocated in
Exhibit 13 (each, a "High Remediation Cost Property"), then Seller may
elect to withdraw such High Remediation Cost Property from this transaction
by providing Purchaser with written notice ("Withdrawal Notice") expressing
Seller's desire to withdraw any High Remediation Cost Property, such
Withdrawal Notice to be given, if at all, at least ten (10) business days
prior to the date of the Auction. If Seller timely provides a Withdrawal
Notice, then: (a) the Purchase Price set forth in Section 3 of this
Agreement shall be reduced by the liquidation value assigned to the High
Remediation Cost Property so withdrawn as set forth in Exhibit 13; provided
further, however, Purchaser may negate a Withdrawal Notice relating to a
High Remediation Cost Property if Purchaser agrees to limit Seller's
remediation liability to fifty percent (50%) of the liquidation value of
such High Remediation Cost Property as set forth in Exhibit 13. Except as
provided in the prior sentence, Seller shall cause the Environmental
Conditions to be remediated in a good and workmanlike manner and in
accordance with all applicable laws and the Remediation Plan. Within sixty
(60) days after Closing and every sixty (60) days thereafter until the
Environmental Conditions are fully remediated, the Seller shall provide
Purchaser with a written report which shall describe the Environmental
Conditions that Seller has remediated since Closing or during the sixty
(60) day period preceding the report. All above ground remediation shall be
completed within nine (9) months after Closing, and any underground
remediation shall be completed within thirty-six (36) months after Closing;
provided, however, Seller need not remove as part of the remediation
required by this Section (as distinguished from any remediation that Seller
is obligated to perform pursuant to the Xxxxxx Lease) any: (a) non-friable
asbestos containing material in any vinyl composition floor tile; or (b)
non-friable nonspray-on asbestos pipe wrap insulation. If Seller has not
completed the remediation of the Environmental Conditions in accordance
with the Remediation Plan prior to the date of confirmation of the Plan of
Reorganization in the Bankruptcy Cases, then the Plan of Reorganization
shall expressly provide that Purchaser shall have an allowed super-priority
administrative expense claim, which shall have priority over any and all
administrative expenses of the kind specified in Sections 503(b) or 507(b)
of the Bankruptcy Code, equal to seventy-five percent (75%) of the budget
for completing the Remediation Plan; provided, however, the budget amount
for any given Property for purposes of calculating the super-priority claim
shall not exceed the lesser of Four Hundred Thousand Dollars ($400,000.00)
or fifteen percent (15%) of the liquidation value assigned to such Property
in Exhibit 13; and such amount shall be funded on the effective date of any
such confirmed Plan of Reorganization and placed in one or more segregated,
federally insured, interest bearing escrow accounts designated by Purchaser
(the "Environmental Remediation Account") to pay for the cost of
remediating the Environmental Conditions. Alternatively, Seller may post a
letter of credit in the aforesaid amount, issued by a bank and otherwise in
form and substance, acceptable to Purchaser. All interest earned on the
funds in the Environmental Remediation Account shall be added to and become
a part of the Environmental Remediation Account. Prior to the disbursement
of any funds in the Environmental Remediation Account or a draw on the
letter of credit, as the case may be, Seller shall provide to Purchaser a
copy of each executed construction contract for the remediation. The funds
in the Environmental Remediation Account shall be disbursed in the
following manner: (i) On or before the 15th day of each month during the
course of the remediation, Seller shall deliver to Purchaser a statement
certified by Seller setting forth the costs of remediation incurred by
Seller for the preceding calendar month, accompanied by AIA form G702 (or
such other voucher or form reasonably prescribed by Purchaser or its
lender), and which shall provide for retainage of ten percent (10%) until
the remediation is fifty percent (50%) completed, at which the retainage
shall be reduced to five percent (5%) ("Seller's Environmental Draw").
Purchaser shall pay or cause to be disbursed Seller's Environmental Draw or
the letter of credit may be drawn within thirty (30) days thereafter. If
the actual cost of performing the remediation is greater than the balance
in the Environmental Remediation Account or the amount of the letter of
credit, as the case may be, then Seller will pay the difference on demand,
and if the actual costs are less, then Purchaser will promptly refund the
difference to Seller. The provisions of this Section 4.9 shall survive the
Closing.
4.10 At Closing, Purchaser shall deliver to the Escrow Agent an
amount equal to One Million Dollars ($1,000,000.00), which amount is in
addition to the Purchase Price and shall be held by the Escrow Agent in a
federally insured interest bearing escrow account (the "Purchase Price
Adjustment Account") until such funds are required to be distributed as
provided in this Section 4.10 Alternatively, Purchaser may post a letter of
credit in the aforesaid amount issued by a bank and otherwise in form and
substance, acceptable to Seller. All interest accruing on the funds in the
Purchase Price Adjustment Account shall become a part of same and shall
likewise be distributed in accordance with the terms of this Section 4.10.
If: (a) the Bankruptcy Court enters an order which becomes a Final Order on
or before December 31, 1999 either: (i) approving Seller's Plan of
Reorganization; or (ii) converting all of the Seller's Chapter 11
Bankruptcy Cases to Bankruptcy Cases under Chapter 7 of the Bankruptcy
Code; and (b) no event has occurred or failed to occur which, with the
giving of notice or passage of time or both, would constitute a default
under this Agreement or the Lease; then the funds in the Purchase Price
Adjustment Account shall be distributed to Seller, or in the case of a
letter of credit, the letter of credit may be drawn and the proceeds
distributed to Seller. If the Bankruptcy Court does not enter an order
which becomes a Final Order on or before December 31, 1999 consistent with
either clause (a)(i) or (ii) or an event has occurred or failed to occur
which, with the giving of notice or passage of time or both, constitutes a
default under this Agreement or the Lease, then the funds in the Purchase
Price Adjustment Account shall be distributed to Purchaser, or in the case
of a letter of credit, the letter of credit shall be returned to Purchaser.
The provisions of this Section 4.10 shall survive the Closing.
4.11 Purchaser shall not employ and shall not be responsible
for any charges, salaries, vacation pay or fringe benefits of employees of
Seller prior to or following the Closing and none of the foregoing shall be
prorated.
5. TITLE.
5.1 Seller shall convey to Purchaser at Closing good,
marketable, valid and insurable fee (or leasehold, as the case may be)
title to each Parcel, subject only to the Space Leases and the Permitted
Exceptions.
5.2 If at Closing there shall exist on any Parcel a mortgage or
other lien of a specified or readily ascertainable dollar amount on
Seller's interest (other than Permitted Mortgages), Seller shall be
required to remove the same by payment, by bonding, or causing the Title
Company to insure over the same or otherwise.
5.3 It shall be a condition to Purchaser's obligation to close
that Purchaser shall be able to obtain at Closing (at Seller's expense as
aforesaid) a title insurance policy from First American Title Insurance
Company (or such other reputable and nationally known title insurance
company reasonably acceptable to both parties hereto) for each Parcel, in
the amount of the Purchase Price allocated thereto, subject only to the
Permitted Exceptions and otherwise in form acceptable to Purchaser
(including all title endorsements listed on Exhibit 14 and/or such
affirmative insurance as Purchaser's mortgage lender deems appropriate in
its reasonable judgment).
6. HAZARDOUS SUBSTANCES. Seller represents and warrants (and it shall
be a condition precedent to Purchaser's obligation to close) that, except
as otherwise disclosed in written reports delivered to Purchaser prior to
the date hereof by Seller or by Purchaser's environmental consultants as
set forth in Exhibit 17, as of the date of Closing: all Real Estate is in
compliance with and does not violate any provisions of any Environmental
Law; and that Seller has never used the Properties for the dumping or
storage of any Hazardous Substances and knows of no such use by any other
party and that there does not exist on, in or under any Property any
Hazardous Substances, except for Hazardous Substances existing on the Real
Estate that are used in the ordinary course of business of Purchaser and
are not in violation of any Environmental Law. The provisions of this
Section 6 shall survive the Closing.
7. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER. In order to
induce Purchaser to enter into the transaction herein set forth, Seller
covenants, represents and warrants to Purchaser the following, all of which
shall be required to be true and correct in all material respects on the
date hereof and as of the Closing Date (except with respect to matters
disclosed on Exhibit 18 attached hereto) as a condition precedent to
Purchaser's obligations hereunder, and all of which shall survive the
Closing:
7.1 Xxxxxx Furniture Corporation: (a) is a corporation, duly
organized, validly existing and in good standing under the laws of the
State of Florida, and is duly qualified as a foreign corporation and is in
good standing in each jurisdiction where a Parcel owned or leased by Xxxxxx
Furniture Corporation is located; and (b) subject to Bankruptcy Court
approval, has the requisite corporate power and authority and the legal
right to own, pledge, mortgage and operate its properties, to sell (or
assign leasehold interest in) the Properties, to enter into this Agreement
and to enter into the Xxxxxx Lease. Each of the subsidiaries identified on
Exhibit 1: (i) is a corporation, duly organized, validly existing and in
good standing under the laws of the State set forth in Exhibit 1 opposite
such subsidiaries name, and is duly qualified as a foreign corporation and
is in good standing in each jurisdiction where any Parcel owned or leased
by such subsidiary is located; and (ii) subject to Bankruptcy Court
approval, has the requisite corporate power and authority and the legal
right to own, pledge, mortgage and operate its properties, to sell (or
assign leasehold interest in) the Properties, to enter into this Agreement
and to enter into the Xxxxxx Lease.
7.2 The execution, delivery and performance by Seller of each
of the documents consummating the herein referenced sale to which it is a
party are within the corporate powers of Seller, have been duly authorized
by all necessary corporate action and, on the Closing Date will have been
approved by the Bankruptcy Court, and do not: (a) contravene the charter or
by-laws of Seller; (b) to Seller's knowledge, violate any law (including,
without limitation, the Securities Exchange Act of 1934) or regulation, or
any order or decree of any court or governmental instrumentality; (c)
conflict with or result in a breach of, or constitute a default under
(except to the extent waived by any lender), any material indenture, loan
agreement, mortgage or deed of trust or any material lease, agreement or
other instrument binding on Seller or any of its properties; or (d) result
in or require the creation or imposition of any lien upon any of the
property of Seller (other than the Xxxxxx Lease). This Agreement has been
duly executed and delivered by Seller and each person who is a signatory to
this Agreement has full power and authority to bind Seller subject to
Bankruptcy Court approval.
7.3 Seller has good, marketable and insurable fee or leasehold
title to all of the Real Estate (subject only to the Permitted Exceptions)
as specified on Exhibit 2 and Exhibit 3, and to Seller's knowledge, there
are no monetary liens (including liens or retained security interests of
conditional vendors) of any nature whatsoever on any of the Real Estate
(except for Permitted Mortgages). Seller is not a party to any contract,
agreement, lease or instrument, the performance of which, either
unconditionally or upon the happening of an event, will result in or
require the creation of a lien on any of the Properties or otherwise result
in a violation of this Agreement, except as expressly permitted hereunder.
7.4 It is Seller's intent to use the proceeds of the sale of
the Properties in accordance with the provisions of the Sale Order for
repayment of debt and/or general working capital purposes; and such
proceeds shall not be used in any manner by Seller which will result in a
breach or a default under any existing agreement between Seller and any of
its creditors.
7.5 Except as otherwise set forth herein (and subject to the
entry of the Sale Order), no consent from any person or entity is required
as a condition to the execution and delivery of this Agreement or the
Xxxxxx Lease, or any other document or instrument to be executed and
delivered by any Seller pursuant to the terms hereof, or the performance by
Seller hereunder, or under any of the other documents or instruments to be
executed and delivered by any Seller hereunder.
7.6 Except as set forth on Exhibit 18 attached hereto, Seller
has filed or caused to be filed all tax returns in which the liability for
taxes in the aggregate is in excess of Fifty Thousand Dollars ($50,000.00)
and which to Seller's knowledge are required to be filed to date, and has
paid all taxes shown to be due and payable before delinquency on said
returns or on any assessments made (other than those being contested in
good faith by appropriate proceedings for which adequate reserves have been
provided on the books of Seller), and no tax liens have been filed and, to
Seller's knowledge, no claims are being asserted by any taxing authority
with respect to any taxes that would become a lien on the Properties or any
portion thereof.
7.7 Seller has been represented by counsel in connection with
the negotiation and drafting of this Agreement and all related agreements,
including the Xxxxxx Lease, and Seller has undertaken its own independent
investigation and review and, based upon such investigation and review, and
based on Seller's current financial condition and its business plan, has
determined in the exercise of its business judgment that the transactions
contemplated in this Agreement (including without limitation the amount of
the Purchase Price and the terms of the Xxxxxx Lease) are fair and are in
the best interests of Seller and its shareholders and creditors.
7.8 Except as set forth on Exhibit 18 attached hereto, Seller
has not received written notice from any Governmental Authority, mortgagee,
tenant, insurer or other party with respect to any of the Properties: (a)
that either the Properties or the use or operation of the improvements
thereon is currently in violation of any zoning, environmental or other
land use regulations; (b) that Seller is currently in violation or with the
passage of time will be in material violation of the requirements of any
ordinance, law or regulation or order of any government or any agency, body
or subdivision thereof (including, without limitation, the local building
department) or the requirements of any insurance carrier of Seller
respecting the Properties or Board of Fire Underwriters affecting any of
the Properties, or that any investigation has been commenced, or is
contemplated, regarding any such possible violation; or (c) asserting that
Seller is required to perform work at any Property and to Seller's
knowledge no such notice has been issued.
7.9 Except as set forth on Exhibit 19 attached hereto, there is
no pending material litigation brought by or against Seller affecting any
Property (including, without limitation, the Real Estate, the Overleases,
and the Space Leases) or the operation of any Property. Seller has no
knowledge of any other such threatened material litigation which affects
any Property. The provisions of this Section shall not apply to any
litigation involving personal injury or property damage that is fully
covered by Seller's liability insurance (subject to any deductible).
7.10 The Space Leases described in Exhibit 9 comprise all the
Space Leases presently existing for any Property and each is in full force
and effect; no Space Lease has been modified or supplemented except (if at
all) as set forth on Exhibit 9; Seller has delivered to Purchaser true,
correct and complete copies of each instrument constituting any Space
Lease; no rent has been paid more than one month in advance by any tenant,
and no tenant is entitled to any current defense, credit, allowance or
offset against rental; the information set forth in Exhibit 9 is true,
correct and complete. To Seller's knowledge, there is no default of either
landlord or any default of tenant under any of the Space Leases, and to
Seller's knowledge, no state of facts which with notice and/or the passage
of time would ripen into a default. There are no persons or entities (other
than Seller) entitled to possession of any Real Estate other than those
listed on Exhibit 9 and or pursuant to the Concession Agreements listed in
Exhibit 10. No work or installations are required of Seller under any Space
Lease, and Seller has fully completed all tenant improvements specified in
any Space Lease to be the responsibility of the landlord and has paid all
tenant construction allowances. There are no leasing commissions due nor
will any become due in connection with any Space Lease, or the renewal
thereof and no understanding or agreement exists in regard to payment of
any leasing commissions or fees for future Space Leases. No Space Lease
tenant is entitled to any free rent in lieu of a tenant improvement
allowance or otherwise. To Seller's knowledge, Seller has no obligations
with respect to contributing for or paying dues or charges to a tenant's
merchant's association. Seller is the holder of the entire lessor's
interest under each Space Lease and has not assigned, transferred, pledged
or encumbered same.
7.11 To Seller's knowledge, the Concession Agreements described
in Exhibit 10 comprise all the Concession Agreements presently existing for
any Property and each is in full force and effect; no Concession Agreement
has been modified or supplemented except (if at all) as set forth on
Exhibit 10. Seller has delivered to Purchaser true, correct and complete
copies of each instrument constituting any Concession Agreement, and no
rent has been paid more than one month in advance by any licensee under a
Concession Agreement, and, to Seller's knowledge, no licensee is entitled
to any current defense, credit, allowance or offset against rental. To
Seller's knowledge, the information set forth in Exhibit 10 is true,
correct and complete. To Seller's knowledge, there is no default of either
Seller or any default of licensee under any of the Concession Agreements,
and to Seller's knowledge, no state of facts which with notice and/or the
passage of time would ripen into a default.
7.12 To Seller's knowledge, there is no default by any party
under any reciprocal easement agreement, covenant or restriction, or other
agreement of record affecting any Real Estate (hereinafter collectively the
"Title Agreements"), and no state of facts which with notice or the passage
of time would constitute such a default. In amplification of the foregoing,
to Seller's knowledge, it has paid all amounts, satisfactorily performed
all work, and otherwise complied with all provisions required to be paid,
performed or complied with by the owner (or occupant) of all of the Real
Estate under all Title Agreements. Seller has delivered or caused to be
delivered to Purchaser true, correct and complete copies of each instrument
constituting any Title Agreement.
7.13 Seller will pay all general, special and betterment
assessments on any Property which are due and payable (i.e., prior to
delinquency) prior to the date of Closing.
7.14 To Seller's knowledge, there are not now and will not be
on the date of Closing any agreements or understandings relating to any
Property which would be binding on Purchaser, except for Title Agreements,
Overleases, and Space Leases. No alterations, amendments or waivers
pertaining to the foregoing will be made by Seller except with Purchaser's
written approval prior to the date of Closing.
7.15 To Seller's knowledge, all permits and authorizations
necessary with respect to each Property for its use, operation and
occupancy are now in effect and will be in full force and effect as of the
date of Closing.
7.16 Except as set forth on Exhibit 18 hereof, to Seller's
knowledge, no property other than each Parcel is included in the tax
assessment of each Parcel, and there are no unpaid assessments for utility
installations.
7.17 There are no on-site employees or hired persons in
connection with the management, operation or maintenance of any Property
for which Purchaser will have any responsibility. Purchaser shall have no
obligation, liability or responsibility with respect to charges, salaries,
vacation pay, fringe benefits or like items subsequent to Closing, nor with
any management or employment agreements with respect to any Property.
7.18 Except as set forth on Exhibit 18 hereof, Seller has no
knowledge of any structural defects in the improvements situated upon each
Parcel, and the roofs over such improvements are free of leaks, except to
the extent any such roof problem would not materially impair normal store
operation.
7.19 To Seller's knowledge, there is presently adequate parking
at each Parcel to comply with the requirements of all of the Space Leases,
Title Agreements and the applicable zoning laws (both individually and in
the aggregate), as modified by any variances in place, for the present use
of the Property.
7.20 Except as set forth in the Leases, no tenant under a Space
Lease, landlord under an Xxxxxxxxx, party to a Title Agreement, or other
person has any
option, right of first refusal,
redemption right, or other right to purchase any of the Real Estate or any
part thereof or interest therein. No landlord under an Xxxxxxxxx has any
right to cancel or terminate same or increase the rent payable thereunder
by reason of any of the transactions set forth in this Agreement.
7.21 To Seller's knowledge, each Property has adequate drainage
systems and easements in place so that water freely runs off it and does
not pool or collect on any portion thereof in a manner that would
materially impair the use and occupancy of such Property; and such run-off
does not violate the rights of any owners of adjacent property.
7.22 To Seller's knowledge, all construction and/or maintenance
work required by the terms of any Xxxxxxxxx, Space Lease, or Title
Agreement, or by any building, zoning or other law, ordinance or regulation
affecting any Property, including without limitation any roadway and
utility line construction on the Properties and/or adjacent property, has
been completed and there are and will be no charges, liens or assessments
against any Property or Purchaser for any of same.
7.23 Seller knows of no pending or threatened eminent domain
proceedings against or affecting any Property.
7.24 The Overleases described in Exhibit 6 comprise all the
Overleases presently existing for any of the Real Estate and each is in
full force and effect; no Xxxxxxxxx has been modified or supplemented,
except (if at all) as set forth on Exhibit 6; Seller has delivered to
Purchaser true, correct and complete copies of each instrument constituting
any Xxxxxxxxx; no rent has been paid more than one (1) month in advance by
Seller, and all rent and/or additional rent due to date under any Xxxxxxxxx
has been paid; the information set forth in Exhibit 6 is true, correct and
complete. To Seller's knowledge, there is no default of either the landlord
or any material default of Seller under any of the Overleases, and to
Seller's knowledge, no state of facts exists which with notice and/or the
passage of time would ripen into a material default other than as stated in
the Sale Order. No work or installations are required of Seller except as
specified (if at all) in the Overleases, and in any case Seller has fully
completed all improvements specified in any Xxxxxxxxx to be the
responsibility of the tenant. There are no leasing commissions due nor will
any become due by Seller in connection with any Xxxxxxxxx. To Seller's
knowledge, Seller has no obligations with respect to contributing for or
paying dues or charges to a tenant's merchant's association. Seller has not
assigned, hypothecated, encumbered or conveyed its interest under the
Overleases.
7.25 Following the execution of this Agreement and prior to the
Closing Date, except as set forth on Exhibit 12 hereof, Seller shall
maintain, repair, replace and operate the Properties in the same manner as
Seller is presently operating and maintaining the Properties, including,
without limitation, the provision of security to the Properties. Following
the date of execution and delivery of this Agreement, Seller shall not
sell, assign, lease or create any right, title or interest in the
Properties, or any part thereof, or create, or permit to exist, any lien or
encumbrance thereon, without the prior consent of Purchaser, which consent
may be withheld in Purchaser's sole discretion. Seller shall operate and
maintain the Properties in compliance with all applicable laws, ordinances,
codes, statutes and regulations shall not delay or defer any repair or
maintenance item, and shall pay all bills and obligations arising from any
Property as payment becomes due. Seller shall not make any alterations to
or upon any Property, other than alterations required in connection with
Seller's repair maintenance and replacement obligations hereunder, except
with purchaser's prior written consent, which consent may be withheld in
Purchaser's sole discretion. Seller shall not make or permit any change,
amendment, cancellation, termination or extension to any Xxxxxxxxx, Space
Lease, Title Agreements, Permitted Exceptions, contracts, or any of the
other documents or agreements of which it is a party and shall not make any
other agreement concerning any Property, in any case which is not
terminable upon thirty (30) days' notice, without premium or penalty,
without Purchaser's prior written consent, which consent may be withheld in
Purchaser's sole discretion. Seller shall promptly notify Purchaser in
writing of any inquiries, notices, demands, requests, discussions, or
correspondence with any landlords, tenants, subtenants, licensees or
occupants with respect to any existing or future Xxxxxxxxx, Space Lease,
Concession Agreement, or Title Agreement. Seller shall diligently comply
with its obligations under all Overleases, Space Leases, Concession
Agreements and Title Agreements. Seller shall not make application to any
governmental or quasi-governmental or municipal authority with respect to
any permits or other approvals (except for the extension thereof in the
ordinary course of business) or any other change in the zoning or otherwise
affecting any Property, except in each case with Purchaser's prior written
consent, which may be withheld in Purchaser's sole discretion.
Notwithstanding anything above contained, Seller shall not be deemed
to be in breach or default of or under any representation or warranty set
forth in Sections 6, 7.4, 7.9, 7.12, 7.13, 7.14, 7.19, 7.22, 7.23, or 7.25
if and to the extent the fact, event, circumstance or condition causing or
resulting in any such breach of a representation or warranty would: (a)
constitute a default under the Xxxxxx Lease; and (b) is fully cured by
Seller (as tenant under the Xxxxxx Lease) within the applicable grace
period therein set forth; provided, however, nothing contained in this
paragraph shall be deemed to limit Section 11 hereof or any other condition
to Purchaser's obligation to close or otherwise require Purchaser to close
in the event of any breach by Seller of any of its representations,
warranties or covenants hereunder.
If any of the representations of Seller set forth in this Section 7
are made to "Seller's knowledge," such phase shall mean the joint and
several knowledge of: (a) Xxxxxxx XxXxxxxx (Seller's VP & CFO); (b) Xxxxxx
Xxxxxx (Seller's General Counsel); and/or (c) Xxxxxx Xxxx (Seller's
in-house architect).
All of the representations, warranties and covenants made by Seller
in this Agreement exclude and except those matters referred to in Exhibit
18.
8. COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER.
In order to induce Seller to enter into the transaction herein set
forth, Purchaser covenants, represents and warrants to Seller the
following, all of which shall be required to be true and correct in all
material respects on and as of the Closing Date as a condition precedent to
Seller's obligations hereunder, and all of which shall survive the Closing:
8.1 Xxxxx is: (a) is a limited partnership, duly organized,
validly existing and in good standing under the laws of Delaware and is
duly qualified as a foreign limited partnership in each other jurisdiction
where a Parcel is located and where the failure to so qualify would have a
material adverse effect on the financial condition, operations, business,
properties or assets of Xxxxx; (b) has the requisite power and authority
and the legal right to own and operate its properties, to buy the Parcels,
to enter into the Xxxxxx Lease and to conduct its business as now or
currently proposed to be conducted. XX0, XX0 and LA3: (a) each are limited
partnerships, duly organized, validly existing and in good standing under
the laws of Delaware and are duly qualified as foreign limited partnerships
in each other jurisdiction where a Parcel is located and where the failure
to so qualify would have a material adverse effect on the financial
condition, operations, business, properties or assets of XX0, XX0 and LA3;
(b) each has the requisite power and authority and the legal right to own
and operate its properties, to buy the Parcels, to enter into the Xxxxxx
Lease and to conduct its business as now or currently proposed to be
conducted.
8.2 The execution, delivery and performance by Purchaser of
each of the documents to which it is a party are within the partnership
powers of Purchaser, have been duly authorized by all necessary partnership
action, including the consent of all general partners where required, and
do not: (a) contravene the partnership agreement of Purchaser; (b) to
Purchaser's best knowledge, violate any law (including, without limitation,
the Securities Exchange Act of 1934) or regulation, or any order or decree
of any court or governmental instrumentality; or (c) conflict with or
result in a breach of, or constitute a default under, any material
agreement or other instrument binding on Purchaser or any of its
properties.
9. THE CLOSING.
9.1 The Closing of the sale and purchase of the Properties
shall be held at the Philadelphia, PA offices of Purchaser's counsel,
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx, at 9:00 A.M. on the first
business day after: (a) all conditions precedent to Closing have been
fulfilled or waived; and (b) the Sale Order becomes a Final Order, provided
that Purchaser can waive such required Final Order and require Closing to
occur at any time prior thereto upon three (3) business days written notice
to Seller.
9.2 At Closing, Purchaser shall pay the Purchase Price adjusted
in accordance with the relevant provisions of this Agreement; and Purchaser
shall execute and/or deliver partnership resolutions authorizing the
transaction herein contemplated. Purchaser shall also deliver
organizational documents, signed counterparts of the Xxxxxx Lease and a
memorandum thereof, if any, and other assignment documents required under
this Agreement.
9.3 At Closing, Seller shall execute and/or deliver to
Purchaser the following:
(a) A special warranty deed (or the equivalent thereof)
for each Fee Parcel in proper recordable form, duly executed and
acknowledged by Seller, and sufficient to convey to Purchaser or at
Purchaser's option to a Purchaser Designee, fee simple absolute ownership
of the Real Estate free and clear of all liens, encumbrances and leases
except for the Space Leases and Permitted Exceptions.
(b) An Assignment of Lease for each Xxxxxxxxx, in proper
recordable form, duly executed and acknowledged by Seller, and sufficient
to assign to Purchaser or at Purchaser's option to a Purchaser Designee,
Seller's entire right, title and interest in and to each Xxxxxxxxx, free
and clear of all liens, encumbrances (other than Permitted Exceptions) and
leases except for the Space Leases.
(c) An Assignment of Lease for each Transferred Lease, in
proper recordable form, duly executed and acknowledged by Seller, and
sufficient to convey to Purchaser or at Purchaser's option to a Purchaser
Designee, Seller's entire right, title and interest in and to each
Transferred Lease.
(d) An Estoppel Certificate for each Transferred Lease,
substantially in the form of Exhibit 20.
(e) Notices to Xxxxxxxxx landlords, Space Tenants and
other parties to Reciprocal Easement Agreements (in each case in compliance
with any relevant requirements of any such document) affecting any Property
advising them of the transfer of the Property to Purchaser and the Xxxxxx
Lease.
(f) A Xxxx of Sale, duly executed and acknowledged by
Seller, and sufficient to convey to Purchaser or at Purchaser's option to a
Purchaser Designee, Seller's entire right, title and interest in and to the
Personal Property, free and clear of all liens, encumbrances and leases.
(g) The corporate resolutions of Seller authorizing the
transaction contemplated hereby.
(h) All forms and returns required in connection with
payment of Transfer Taxes and/or recording the deeds.
(i) The Xxxxxx Lease. At Seller's request, Purchaser and
Seller shall also execute and deliver at Closing copies of recordable
memoranda of the Xxxxxx Lease for recordation respecting each Parcel.
(j) FIRPTA affidavit in form reasonably satisfactory to
Purchaser to the effect that Seller is not a "foreign person."
(k) Copies of all documents constituting Personal
Property (which copies may be delivered within ten (10) days following
Closing).
(l) Originals of all other documentation, instruments,
plans, specifications, or otherwise, in the possession of Seller or owned
by Seller which could be used by Purchaser in connection with the
Properties and which Seller has not previously delivered to Purchaser and
which are not needed by Seller to run its business in accordance with the
Xxxxxx Lease (which originals may be delivered within thirty (30) days
following Closing).
(m) Such other affidavits, indemnities, certificates,
instruments or documents as may be reasonably requested by Purchaser or its
title insurance company, or as may be required to comply with any
applicable law, including any bonds or deposits as may be required to
comply with any applicable law.
(n) A copy of the Sale Order which has been certified by
the Bankruptcy Court.
(o) A certificate of Seller reaffirming the continuing
accuracy as of the Closing Date of the representations and warranties of
Seller set forth in this Agreement.
(p) A list containing the names, addresses and telephone
numbers of all individuals and entities who, within the nine (9) month
period preceding the Closing, have contacted Seller or its agents and
expressed interest in leasing and/or purchasing the Properties or any
portion thereof.
(q) Letters from the appropriate local Governmental
Authority certifying as to the zoning of each Property and indicating
whether there are any outstanding notices of uncorrected code violations
relating to such Property.
10. ACCESS BY PURCHASER.
10.1 Immediately from and after the date of execution of this
Agreement and up until the Closing Date, Purchaser shall have the right to
conduct, or cause to be conducted, such due diligence investigations,
reviews, studies, tests, examinations and analyses of the Properties and
Seller as Purchaser shall deem necessary or desirable, in the sole
discretion of Purchaser, including, but not limited to, zoning, permits,
approvals, contracts, soils analysis, title, survey, financials, leasing,
engineering and environmental status of the Properties. Seller shall
deliver to Purchaser or, at Purchaser's request, make available to
Purchaser or its designees, for inspection and copying, at any time during
regular business hours and upon reasonable notice to Seller, all
information, documents, materials, instruments, agreements, and contracts
relating to the Properties or Seller, to the extent available, including,
but not limited to, title commitments and policies, as-built surveys,
engineering reports, building and occupancy permits, licenses and
inspections, Overleases, Space Leases, insurance policies, environmental
reports, tests and other information concerning the Properties and books
and records relating to the Properties in Seller's possession. During such
period, Purchaser and its designees shall have free access to the
Properties during regular business hours and upon reasonable notice of not
less than twenty-four (24) hours to Seller for the purpose of conducting
any such due diligence investigations. Seller hereby authorizes Purchaser
and its designees to consult with governmental agencies concerning the
Properties.
10.2 Purchaser shall obtain appropriate insurance coverage for
damage to property and injury to persons in connection with any pre-Closing
examination or inspection of the Real Estate.
10.3 Purchaser agrees to repair any damage to the Properties
caused by its investigation of the Properties and to indemnify and hold
Seller harmless from and against any expense, claim, loss, cost and
liability (including reasonable attorneys' fees) caused by Purchaser in
connection with Purchaser's investigations or any other entry by Purchaser
on the Properties. Anything contained herein to the contrary
notwithstanding, the foregoing indemnity and hold harmless agreement shall
survive the termination of this Agreement for a period of six (6) months.
11. CONDITIONS PRECEDENT TO CLOSING. The obligations of Purchaser
under this Agreement are subject to the fulfillment prior to or at the
Closing of each of the following conditions, any of which may be waived by
Purchaser in writing: (a) the performance and compliance by Seller of all
agreements and conditions required or contemplated by this Agreement to be
performed or complied with by Seller prior to or at the Closing including
delivery of all items and documents in accordance with the provisions of
Section 9 hereof; (b) each of the representations and warranties made by
Seller in connection with the transactions contemplated hereby, shall have
been true and correct on and as of the Closing Date as if such
representations or warranties were made originally on and as of that time;
(c) there shall have been no material adverse change in the Properties
since the date hereof; (d) to the extent any governmental permits including
any licenses, authorizations or permits held by any Seller with respect to
the Properties are not assignable or transferrable, Purchaser has either
obtained licenses, authorization and permits on substantially the same
terms as such licenses, authorizations and permits were originally issued
to such Seller or has obtained binding commitments from the applicable
authorities to issue such licenses, authorizations and permits to Purchaser
following the Closing; (e) no suit, proceeding, inquiry or investigation
shall have been commenced or threatened, or order entered, by any
Governmental Authority or other person on any grounds to restrain, enjoin
or hinder, or to seek damages on account of, the consummation of the
transactions herein contemplated; (f) the Sale Order shall have been
entered by the Bankruptcy Court in form and substance satisfactory to
Purchaser; and (g) , unless waived by Purchaser, the Sale Order shall have
become a Final Order.
12. ASSIGNMENT. No party hereto may assign or transfer its rights or
delegate its duties or obligations hereunder without the prior written
consent of the other party; and any document, instrument or act for which
consent has not been obtained purporting to effect any such assignment,
transfer or delegation shall be void ab initio. Notwithstanding the
foregoing, Purchaser shall have the right to assign all or any portion of
this Agreement to any affiliate or to any lender providing any financing
which is secured in whole or in part by all or any portion of the
Properties; provided, however, in the case of any assignment to an
affiliate, (a) such affiliate executes and delivers to Seller an instrument
pursuant to which the affiliate assumes and agrees to pay and perform all
covenants and agreements to be paid and performed by Purchaser hereunder
and (b) Purchaser shall remain liable hereunder for all of Purchaser's
obligations hereunder.
13. INSURANCE AND RISK OF LOSS.
13.1 Seller shall maintain fire and extended coverage insurance
on each of the Properties until Closing, in an amount not less than
Seller's existing policies with respect to Properties in effect on the date
hereof.
13.2 Loss or damage to the Properties as a result of the
exercise of the power of eminent domain or as a result of fire or casualty
between the date of this Agreement and the time of Closing shall be at the
risk of Seller. Seller shall use any insurance proceeds received to restore
the Properties to substantially similar condition prior to such loss or
damage. If there is any material loss of any Property as a result of the
exercise of the power of eminent domain, or any material loss to any
Property as a result of fire or casualty, that cannot be or is not repaired
or restored prior to Closing, then Purchaser may, at Purchaser's option:
(a) withdraw the Property or Properties so affected by the condemnation,
fire or casualty and proceed to Closing on the balance of the Properties,
in which event the Purchase Price set forth in Section 3 of this Agreement
shall be reduced by the liquidation value assigned to the Property or
Properties so withdrawn as set forth on Exhibit 13; or (b) proceed to
Closing on all the Properties, in which event Seller, upon completing
Closing, shall deliver to Purchaser any eminent domain award or other
compensation and the proceeds of any insurance received by Seller on
account of any loss or damage (and Purchaser shall be entitled to a credit
against the Purchase Price in the amount of any deductibles associated with
such loss or damage), which have not been used by Seller to restore the
Properties, and shall assign all claims to such compensation, proceeds or
awards, even if such award, compensation or proceeds shall exceed the
Purchase Price. Seller shall execute and deliver to Purchaser any and all
documents required before or after Closing for payment of the aforesaid
compensation, proceeds and awards by Purchaser.
13.3 A "material loss" shall be any loss or damage of all or
any portion of a Property by: (a) fire or any other casualty whatsoever
where the cost of restoring such damage exceeds twenty percent (20%) of the
liquidation value assigned to such Property in Exhibit 13; or (b)
condemnation or eminent domain proceedings by any public authority or if a
notice of any such prospective condemnation or taking is given by any
public authority.
14. DEFAULT.
14.1 If Purchaser shall breach or fail to perform and comply
with any of the terms, covenants, provisions, representations or warranties
of this Agreement, after three (3) days' prior written notice to Purchaser
(except that no written notice shall be required for a breach or failure to
perform on the Closing Date), Seller shall have as its sole and exclusive
remedy the right to retain the Deposit together with accrued interest, as
assessed and liquidated damages and not as a penalty, whereupon this
Agreement shall be null and void, and, except as otherwise set forth in
this Agreement, neither party shall have any further rights, duties or
obligations under this Agreement, and Seller shall have no other remedy
against Purchaser. Notwithstanding the foregoing, Seller shall continue to
maintain its rights with respect to indemnification as set forth in Section
10 hereof.
14.2 Prior to the entry of the Procedures Order, if Seller
shall breach or fail to perform or comply with any of the terms, covenants,
provisions, representations or warranties of this Agreement, after three
(3) days' prior written notice to Seller (except that no written notice
shall be required for a breach or failure to perform on the Closing Date),
Purchaser shall have the right to terminate this Agreement, in which case
the Deposit, together with all interest accrued thereon, shall be promptly
returned to Purchaser.
14.3 Notwithstanding anything to the contrary contained herein,
if Purchaser shall be the successful bidder at the Auction (as hereinafter
defined), but the Bankruptcy Court fails to enter the Sale Order, then the
Deposit, together with all interest earned thereon, shall be promptly
returned to Purchaser and, in addition, Seller shall, promptly upon written
request by Purchaser (together with reasonable evidence of the following,
which may include bills and invoices) reimburse Purchaser, in an amount
equal to one hundred ten percent (110%) of Purchaser's reasonable out of
pocket expenses incurred in connection with the negotiation of that certain
letter of intent between the parties hereto dated February 11, 1999, the
preparation and negotiation of this Agreement and the Xxxxxx Lease,
Purchaser's due diligence and Purchaser's seeking of the Bankruptcy Court's
approval in connection herewith, but in no event shall such reimbursement
exceed Six Hundred Fifty Thousand Dollars ($650,000.00) ("Cost
Reimbursement"). Expenses shall include, but not be limited to, attorney's
fees and expenses, consultant's fees and expenses, and travel costs. The
Sale Motion seeking approval of the sale procedures and Breakup Fee shall,
as a separate matter, expressly seek the Bankruptcy Court's approval of the
Cost Reimbursement.
14.4 After the Sale Order is entered approving Purchaser as the
successful bidder, if Seller shall breach or fail to perform or comply with
any of the terms, covenants, provisions, representations or warranties of
this Agreement, after three (3) days' prior written notice to Seller
(except that no written notice shall be required for a breach or failure to
perform on the Closing Date), Purchaser shall have the right, in its sole
discretion, to either: (a) terminate this Agreement, in which case the
Deposit, together with all interest accrued thereon, shall be promptly
returned to Purchaser and Seller shall pay Purchaser Cost Reimbursement
under Section 14.3; or (b) exercise any and all remedies available to it
under law and/or in equity, including an action for specific performance.
15. BANKRUPTCY COURT APPROVALS/BREAK UP FEE/PAYMENT OF
COSTS/OVERBID PROCEDURES.
15.1 Filing of Sale Motion; Entry of Procedures Order. Within
five (5) business days after execution of this Agreement, Seller shall file
a motion (the "Sale Motion") with the Bankruptcy Court seeking an order
approving and authorizing: (a) the procedures for the Auction set forth in
Section 15.3 hereof; (b) the Breakup Fee set forth in Section 15.4 hereof;
and (c) the Cost Reimbursement set forth in Sections 14.3 hereof (the
"Procedures Order"). The Procedures Order shall be in the form of Exhibit
4. Seller shall use its best efforts to obtain entry of the Procedures
Order. If the Sale Motion has not been filed within five (5) business days
after the execution of this Agreement or the Procedures Order has not been
entered within twenty (20) days after filing of the Sale Motion, Purchaser
shall have the right to terminate its obligations under this Agreement by
written notice to Seller, in which event the provisions of Section 14.2
shall apply and none of the parties hereto shall have any obligation to the
others, except for those covenants which by their express terms survive the
termination of this Agreement.
15.2 Entry of Sale Order. The Sale Motion shall also seek
approval of the Sale Order. The Sale Order shall be in the form of Exhibit
8, and Seller shall use its best efforts to obtain entry of the Sale Order;
provided, however, in the event the Bankruptcy Court enters a modified Sale
Order and the only effect of such modified Sale Order is that Seller's
interest in the Leased Parcels would not be conveyed to Purchaser free and
clear of any claims or interests which could restrict the use or transfer
of Purchaser's interest in the Leased Parcels subsequent to the leaseback
to Seller as contemplated by the Xxxxxx Lease, then: (a) Seller shall be
deemed to have delivered a satisfactory Sale Order, and (b) Purchaser shall
receive a credit against the Purchase Price equal to the maximum Cost
Reimbursement that would have been due Purchaser if Section 14.3 had been
applicable. If the Procedures Order has been entered but the Sale Order is
not entered within thirty (30) days after filing of the Sale Motion,
Purchaser shall have the right to terminate its obligations under this
Agreement by written notice to Seller, in which event the provisions of
Section 14.3 shall apply and none of the parties hereto shall have any
obligation to the others, except for those covenants which by their express
terms survive the termination of this Agreement.
15.3 The Auction. An auction (the "Auction") for the sale of
the Properties shall be held in Delaware, on a date and at a place
specified in the Procedures Order. At the Auction, bids for all of the
Properties on a global basis (as distinguished from a sale of each
individual Property or groups of less than all of the Properties, which
shall not be permitted) may be submitted only by Purchaser and by a person
or entity who has, prior to the opening of bidding, deposited with Seller a
cashier's check or a certified check payable to Seller in the amount of
Three Million Seven Hundred Thousand Dollars ($3,700,000.00). Any bid for
the Properties must be for "all cash." All bids shall constitute an offer
by the bidder to purchase the Properties from Seller on substantially the
same terms as are set forth in this Agreement and to lease the Properties
to Seller on substantially the same unitary lease terms as are set forth in
the Xxxxxx Lease; provided, however, provisions applicable to the Breakup
Fee shall not apply with respect to any person other than Purchaser.
The initial minimum overbid at the Auction shall be not less
than One Million Seven Hundred Thousand Dollars ($1,700,000.00) in excess
of the Purchase Price. Subsequent additional overbids shall be in
increments of Four Hundred Thousand Dollars ($400,000.00). If Purchaser
shall enter an overbid, Purchaser shall be entitled to a credit equal to
the amount of the Breakup Fee (i.e. One Million Three Hundred Thousand
Dollars ($1,300,000.00)). To illustrate the foregoing, assume another
bidder bids One Million Seven Hundred Thousand Dollars ($1,700,000.00) in
excess of the Purchase Price, Purchaser then bids Two Million One Hundred
Thousand Dollars ($2,100,000.00) in excess of the Purchase Price, and no
other bids are received. The price at which Purchaser shall acquire the
Properties shall be the Purchaser Price plus Eight Hundred Thousand Dollars
($800,000.00), being the Two Million One Hundred Thousand Dollar
($2,100,000.00) overbid less the One Three Hundred Thousand Dollar
($1,300,000.00) credit. Seller shall be required to accept the highest bid
made at the auction by a qualified bidder.
If a bidder other than Purchaser shall be the successful
bidder, Seller shall retain such bidder's Three Million Seven Hundred
Thousand Dollars ($3,700,000.00) cashier's check or certified check
deposited with Seller prior to the Auction as the "Deposit" pursuant to
Section 3 of this Agreement. Seller shall be entitled to retain such amount
as liquidated damages if such bidder fails to close the sale of the
Properties. If a bidder other than Purchaser shall be the successful
bidder, Seller shall promptly cause Purchaser's Deposit to be returned to
Purchaser.
If a bidder other than Purchaser shall be the successful bidder
at the Auction, and the sale to such other bidder or to any other bidder
whose bid was higher than Purchaser's shall fail to close for any reason,
Seller shall promptly notify Purchaser of such failure and Purchaser shall
then have the right (but not the obligation), within seven (7) days of
Purchaser's receipt of such notice, to elect to purchase the Properties
pursuant to this Agreement for the Purchase Price. If Purchaser shall elect
to do so, the sale of the Properties shall close in accordance with the
terms of this Agreement within ninety (90) days of Purchaser's election.
15.4 Breakup Fee. Seller agrees to pay to Purchaser a Breakup
Fee of One Million Three Hundred Thousand Dollars ($1,300,000.00) if the
sale to Purchaser pursuant to this Agreement is not consummated by reason
of another successful bidder purchasing the Properties. The Breakup Fee
shall be payable upon the consummation of the sale of the Properties to
such other bidder from the proceeds of such transaction.
16. BROKERS. Except as provided in the last sentence of this Section
16, Purchaser and Seller each represents and warrants that it dealt with no
broker or finder in connection with this transaction; and each agrees to
defend, indemnify and hold the other harmless from and against any and all
loss, liability and expense, including reasonable attorney's fees, the
indemnified party may incur arising by reason of the above representations
being false. The provisions of this Article 16 shall survive Closing. The
parties acknowledge that Seller has retained The Blackstone Group as a
consultant in connection with this transaction, and Seller shall be solely
responsible for, and shall indemnify, defend and hold Purchaser harmless
from and against any fees, charges, expenses or commissions that may be due
The Blackstone Group in connection with this transaction.
17. NOTICES. All notices, demands, requests, consents, approvals or
other communications (for the purpose of this Section collectively called
"Notices") required or permitted to be given hereunder or which are given
with respect to this Agreement shall be valid only if in writing and sent
by registered or certified United States mail, return receipt requested,
postage prepaid, or delivered by Federal Express or UPS courier service,
addressed as follows:
To Purchaser: Xxxxx Realty, L.P.
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxxx
and
Xxxxxx-Xxxxx Real Capital Real Estate Fund II, X.X.
Xxxxxx-Xxxxx Real Estate Fund II, X.X.
Xxxxxx-Xxxxx Parallel Fund II, L.P.
000 Xxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xx. Xxxx Xxxxx
Copy to (if given before 7/4/99):
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
Copy to (if given after 7/4/99):
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esquire
To Seller: Xxxxxx Furniture Corporation
0000 X. Xxxxxxx Xxxxxxx
Xxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, General Counsel
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
18. ENTIRE AGREEMENT. This Agreement (including the Exhibits attached
hereto) contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior or contemporaneous
understandings, if any, with respect thereto. This Agreement may not be
canceled, modified, changed or supplemented, nor may any obligation
hereunder be waived, except by written instrument signed by the party to be
charged or by its agent duly authorized in writing or except as otherwise
expressly provided herein. The parties do not intend to confer any benefit
hereunder on any person, firm or corporation other than the parties hereto
and their respective successors or assigns.
19. SURVIVAL. This Agreement, and all provisions hereof, shall
survive the Closing and continue in full force and effect thereafter.
20. TITLES AND HEADINGS. Titles and headings of Articles and Sections
of this Agreement are for convenience of reference only and shall not
affect the construction of any provision of this Agreement. All references
to "Sections" and "Articles" shall be deemed to be references to Sections
and Articles of this Agreement unless otherwise indicated or unless the
context otherwise requires.
21. ATTACHMENTS. Each of the Exhibits and Schedules referred to
herein and attached hereto is an integral part of this Agreement and is
hereby incorporated in this Agreement by this reference.
22. FURTHER ASSURANCES. Seller and Purchaser each agree to do such
further acts and things and to execute and deliver such additional
agreements and instruments as the other may reasonably require to
consummate, evidence or confirm the sale or any other agreement contained
herein in the manner contemplated hereby.
23. BINDING EFFECT. This Agreement is and each of the other documents
to which Seller is or will be a party, when delivered, will be a legal,
valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms, subject to Bankruptcy Court approval. This
Agreement has been duly executed and delivered by Purchaser. This Agreement
is and each of the other documents to which Purchaser is or will be a
party, when delivered, will be a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms.
Subject to the provisions of Section 12 hereof, this Agreement shall extend
to and be binding upon the legal representatives, heirs, executors,
administrators, successors and assigns of the parties hereto.
24. RULES OF CONSTRUCTION. The provisions of this Agreement shall be
construed, in all respects, without reference to any rule or canon
requiring or permitting the construction of provisions of documents against
the interest of the party responsible for the drafting of the same, it
being the intention and agreement of the parties that this Agreement be
conclusively deemed to be the joint product of both parties and their
counsel.
25. TIME OF THE ESSENCE. All times provided for in this Agreement
shall be of the essence, and each extension of any such time or times shall
continue to be of the essence of this Agreement.
26. POST-CLOSING INSPECTION. Following Closing, Seller shall, upon
request, give Purchaser access to Seller's books and records with respect
to the operation of the Parcels for the calendar year in which Closing
occurs and for the previous calendar year, for purposes of verifying
collections and remittances and the preparation by Purchaser of financial
statements and reports with respect to the Parcels. Such books and records
shall be made available to Purchaser at reasonable times and upon
reasonable advance notice to Seller, and without any expense to Seller or
charge to Purchaser. The provisions of this Section 26 shall survive the
Closing.
27. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
taken together shall constitute a single agreement.
28. JOINT AND SEVERAL LIABILITY. If Seller consists of more than one
person or entity, the obligations of such persons and entities hereunder
shall be joint and several. A separate action may be brought or prosecuted
against any such person or entity comprising Seller, regardless of whether
the action is brought or prosecuted against the other persons or entities
comprising Seller, or whether such persons or entities are joined in the
action. Purchaser may compromise or settle with any one or more of the
persons or entities comprising Seller for such sums, if any, as it may see
fit and may in its discretion release any one or more of such persons or
entities from any further liability to Purchaser without impairing,
affecting or releasing the right of Purchaser to proceed against any one or
more of the persons or entities not so released.
29. NO WAIVER. The waiver by one party of the performance of any
covenant or condition hereunder shall not invalidate this Agreement, nor
shall it be considered to be a waiver by such party of any other covenant
or condition hereunder. The waiver by any or all of the parties of the time
for performing any action shall not constitute a waiver of the time for
performing any other act or identical act required to be performed at a
later time. The exercise of any remedy provided by law and the provisions
of this Agreement for any remedy shall not exclude other remedies unless
they are expressly excluded.
30. LIMITATION ON SELLER'S DEBT. Seller hereby covenants that during
the two (2) year period (the "Restriction Period) following the date (the
"Reorganization Date") the Bankruptcy Court's order approving the Plan of
Reorganization becomes a Final Order, the Seller shall not incur, through
the Plan of Reorganization or otherwise, unsecured funded debt ("Unsecured
Debt") in excess of Fifty Million Dollars ($50,000,000.00) (the "Unsecured
Debt Limit"); provided, however, in the event of a merger or consolidation
between Seller and another company (the "Other Company") which does not
result in a reduction in the pro forma audited tangible net worth of the
company that survives the merger or consolidation (the "Surviving Company")
(which pro forma audited tangible net worth shall be computed according to
generally accepted accounting principles consistently applied) relative to
Seller's audited tangible net worth immediately prior to the merger or
consolidation (which audited tangible net worth shall be computed according
to generally accepted accounting principles consistently applied), the
Unsecured Debt Limit of the Surviving Company shall be increased, but only
to the extent that the ratio between the Surviving Company's EBITDA and
interest expense (which interest expense shall include any new interest
expense that, according to generally accepted accounting principles
consistently applied, must be reflected on the Surviving Company's
financial statements), both of which shall be calculated on a pro-forma
basis for the effects of the merger or consolidation (including any
interest on any incremental debt that is acquired or proposed), for the
twelve (12) month period immediately preceding the merger or consolidation
would exceed 2:1. Seller further covenants that neither the Plan of
Reorganization nor any loan documents evidencing the Unsecured Debt shall:
(i) obligate the Seller or the Surviving Company to repay any principal
with respect to the Unsecured Debt during the three (3) year period
following the Reorganization Date; or (ii) obligate the Seller or the
Surviving Company to pay interest at a rate in excess of thirteen percent
(13%) per annum; or (iii) obligate the Seller or the Surviving Company to
pay any interest during the first six (6) months of the Restriction Period.
Seller further covenants that neither Seller nor the Surviving Company
shall pay any dividends on any of its capital stock during the Restriction
Period, other than any existing dividend obligations of the Other Company
that are retained by the Surviving Company. For purposes of this Section
30, Unsecured Debt shall not include Seller's secured working capital
facility or Seller's obligations under capital leases (other than the
Xxxxxx Lease). The provisions of this Section 30 shall survive the Closing.
31. WITHDRAWAL OF FOUR PROPERTIES. Seller shall have the right to
withdraw from this transaction any of the Properties located at
Farmingdale, NY, Willowbrook, NJ, San Dimas, CA and San Leandro, CA (each,
a "Withdrawable Property" and collectively the "Withdrawable Properties")
if Seller provides Purchaser with a Withdrawal Notice at least five (5)
business days prior to the date of the Auction. If Seller timely provides a
Withdrawal Notice, then: (a) the Purchase Price set forth in Section 3 of
this Agreement shall be reduced by the liquidation value assigned to the
Withdrawable Property so withdrawn as set forth in Exhibit 13; and (b) (i)
if Purchaser shall be the successful bidder at the Auction and all
preconditions to Closing set forth in Section 11 of this Agreement shall
have occurred, then at Closing Purchaser shall receive a credit against the
Purchase Price equal to Three Hundred Fifty Thousand Dollars ($350,000.00);
and (ii) if Purchaser shall be the successful bidder at the Auction but
Closing does not occur and circumstances are such that Purchaser is
entitled to Cost Reimbursement, then the amount of Cost Reimbursement shall
be increased by Three Hundred Fifty Thousand Dollars ($350,000.00); and
(iii) if Purchaser shall not be the successful bidder at the Auction and
circumstances are such that Purchaser is entitled to the Breakup Fee, then
the amount of the Breakup Fee shall be increased by Three Hundred Fifty
Thousand Dollars ($350,000.00).
32. ACQUISITION OF JBAN'S INTEREST IN THE BEST PRODUCTS PROPERTY. If
Purchaser exercises the right of first refusal set forth in Section 28.5 of
the Agreement of Sublease dated as of June 2, 1982 (the "Best/Xxxxxx
Sublease") between Xxxxxx Furniture Company of the Pacific, Inc. ("LFCPI"),
as tenant, and JBAN LLC (by virtue of various assignments) ("JBAN"), as
landlord, with respect to JBAN's interest in and to the "Noridge Lease" (as
defined in the Best/Xxxxxx Sublease) located at Northridge, CA, or if
Purchaser otherwise acquires JBAN's (or its successors' or assigns')
interest in and to the Noridge Lease, then commencing on the date Purchaser
acquires JBAN's (or its successors' or assigns') interest in and to the
Noridge Lease and ending on the fifth (5th) anniversary of such acquisition
date, Purchaser shall receive an abatement of all sums that may be due
Seller pursuant to: (a) the Paying Agency Agreement dated as of June 2,
1982 by and among LFCPI, JBAN (by virtue of various assignments) and
Manufacturers Hanover Trust Co.; and (b) the Agreement to Assign dated as
of November 20, 1981 between LFCI and JBAN (by virtue of various
assignments). The provisions of this Section 32 shall survive the Closing.
[THIS SPACE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Seller and Purchaser have executed this Agreement
as of the day and year first above written.
WITNESSES/ATTEST: PURCHASER:
XXXXX REALTY, LP, a Delaware limited
partnership
By: Xxxxx Realty, Limited, an Illinois
corporation
By: /s/ Xxxxxx Xxxxx
__________________________
Name: Xxxxxx Xxxxx
Title: President
XXXXXX-XXXXX CAPITAL REAL ESTATE FUND
II, L.P., a Delaware limited partnership
By: Xxxxxx-Xxxxx Group, LLC, a Delaware
limited liability company
By: /s/ Xxxx X. Xxxxx
____________________________
Xxxx X. Xxxxx, President
XXXXXX-XXXXX REAL ESTATE FUND II, L.P., a
Delaware limited partnership
By: Xxxxxx-Xxxxx Group, LLC, a Delaware
limited liability company
By: /s/ Xxxx X. Xxxxx
_____________________________
Xxxx X. Xxxxx, President
XXXXXX-XXXXX PARALLEL FUND II, L.P., a
Delaware limited partnership
By: Xxxxxx-Xxxxx Group, LLC, a Delaware
limited liability company
By: /s/ Xxxx X. Xxxxx
____________________________
Xxxx X. Xxxxx, President
WITNESSES/ATTEST: SELLER:
XXXXXX FURNITURE CORPORATION, a Florida
Corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: Vice President
[corporate seal]
XXXXXX FURNITURE REALTY
CORPORATION, a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: President
[corporate seal]
XXXXXX FURNITURE COMPANY OF THE
MIDWEST, INC., a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: Vice President
[corporate seal]
XXXXXX FURNITURE COMPANY OF THE
PACIFIC, INC., a California corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: Vice President
[corporate seal]
XXXXXX FURNITURE COMPANY OF
WASHINGTON, INC., a Washington corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: Vice President
[corporate seal]
XXXXXX FURNITURE COMPANY OF
WASHINGTON REALTY, INC., a Washington
corporation
By: /s/ Xxxxxx X. Xxxxxx
________________________________
Name: Name: Xxxxxx X. Xxxxxx
Title: Title: President
[corporate seal]
SCHEDULE OF EXHIBITS
Exhibit 1 List of Xxxxxx' Subsidiaries
Exhibit 2 Description of Fee Parcels
Exhibit 3 Description of Leased Parcels
Exhibit 4 Procedures Order
Exhibit 5 Xxxxxx Lease
Exhibit 6 List of Overleases
Exhibit 7 List of Permitted Exceptions
Exhibit 8 Sale Order
Exhibit 9 List of Space Leases
Exhibit 10 List of Concession Agreements
Exhibit 11 List of Transferred Leases
Exhibit 12 List of Warehouse Renovations, Store Remodelings and other work
approved by Purchaser
Exhibit 13 Purchase Price Allocation
Exhibit 14 List of Title Endorsements
Exhibit 15 List of Roof Work
Exhibit 16 List of Environmental Conditions
Exhibit 17 Environmental Disclosures
Exhibit 18 Seller Disclosures
Exhibit 19 List of Litigation
Exhibit 20 Form of Estoppel Certificate
Exhibit 1
List of Xxxxxx' Subsidiaries
Xxxxxx Furniture Realty Corporation, a Florida corporation Xxxxxx Furniture
Company of the Midwest, Inc., a Colorado corporation Xxxxxx Furniture
Company of the Pacific, Inc., a California corporation Xxxxxx Furniture
Company of Washington, Inc., a Washington corporation Xxxxxx Furniture
Company of Washington Realty, Inc., a Washington corporation
Exhibit 2
Description of Fee Parcels
Group #1 Redevelopment Properties:
o Portland, 00000 X. X. Xxxxxxx Xx., Xxxxxxxxx, XX 00000-0000
Group #2 Redevelopment Properties:
o Hartford, 00 Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000-0000
o Oxnard, 0000 X. Xxxxxx Xxxx., Xxxxxx, XX 00000-0000
Group #3 Redevelopment Properties:
o Modesto, 0000 Xxxx Xx., Xxxxxxx, XX 00000-0000
o Seattle 2, 00000 00 Xxx. Xxxx, Xxxxxxxx, XX 00000-0000
Non-Redevelopment Properties:
o St. Xxxx, 0000 Xxxxxxx Xx., Xx Xxxx, XX 00000-0000
o Portland 2, 0000 X. X. Xxxxxxx Xxxxx Xx., Xxxxxx,
XX 00000-0000
o Paramus, 000 Xxxxx 00 Xxxxx, Xxxxxxx, XX 00000-0000
Exhibit 3
Description of Leased Parcels
Group #1 Redevelopment Properties:
o Woodbridge, 000 Xxxxx 0 Xxxxx, Xxxxxx,
XX 00000-0000 06489-1594
o Fresno, 0000 Xxxx Xxxx Xxx., Xxxxxx, XX 00000-0000
Group #2 Redevelopment Properties:
o Cherry Hill, 0000 Xxxxxx Xxxx, Xxxxxx Xxxx, XX 00000-0000
o Northridge, 00000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000-0000
Group #3 Redevelopment Properties:
o Roosevelt Field, 000 Xxxx Xxxx Xxxx., Xxxxxx Xxxx X, XX
00000-0000
o Minneapolis, 00000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, XX
00000-0000
o Redondo Beach, 0000 Xxxxxxxxx Xxx., Xxxxxxx Xxxxx, XX
00000-0000
o San Francisco, 000 Xxxxxxx Xxx., Xxx Xxxxxxxxx, XX 00000-0000
Non-Redevelopment Properties:
o Farmingdale, 00 Xxxxx Xxxxxxx, Xxxxxxxxxxx, XX 00000-0000
o Willowbrook, 000 Xxxxx 00, Xxxxxxxxx, XX 00000-0000
o Langhorne, 0000 X. Xxxxxxx Xxx., Xxxxxxxxx, XX 00000-0000
o Mesa, 000 Xxxxx Xxxxxx Xxxx, Xxxx, XX 00000-0000
o San Dimas, 000 X. Xxxxxx Xxx., Xxx Xxxxx, XX 00000-0000
o San Leandro, 0000 Xxxxxxxx Xx., Xxx Xxxxxxx, XX 00000-0000
o Sacramento, 0000 Xxxx Xxx., Xxxxx Xxxxxxxxx, XX 00000-0000
o La Xxxxxx, 00000 X. Xxxxxxxxx Xx., Xxxx xx Xxxxxxxx, XX
00000-0000
Exhibit 14
List of Title Endorsements
1. Removal of "Gap" Exception
2. Removal of all pre-printed exceptions (e.g., mechanics liens, parties
in possession, survey, etc.). Client should approve cost of premium
for survey coverage
3. Comprehensive Endorsement (ALTA 9 or equivalent) restrictions,
encroachments, etc.
4. Contiguity Endorsement (if applicable) if legal is comprised of more than
one parcel
5. Public Street Access Endorsement
6. Separate Tax Lot Endorsement
7. Access
8. Affirmative Coverage (as to encroachments of Xxxxxx' improvements into
setback or adjacent
properties)
TABLE OF CONTENTS
PAGE
1. DEFINITIONS........................................................1
2. SALE AND PURCHASE..................................................5
3. PURCHASE PRICE.....................................................5
4. ADJUSTMENTS AND PRORATIONS.........................................6
5. TITLE.............................................................13
6. HAZARDOUS SUBSTANCES..............................................13
7. COVENANTS, REPRESENTATIONS AND WARRANTIES OF SELLER...............13
8. COVENANTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER............19
9. THE CLOSING.......................................................20
10. ACCESS BY PURCHASER...............................................22
11. CONDITIONS PRECEDENT TO CLOSING...................................22
12. ASSIGNMENT. ......................................................23
13. INSURANCE AND RISK OF LOSS........................................23
14. DEFAULT...........................................................24
15. BANKRUPTCY COURT APPROVALS/BREAK UP FEE/PAYMENT OF
COSTS/OVERBID PROCEDURES..........................................25
16. BROKERS...........................................................27
17. NOTICES...........................................................27
18. ENTIRE AGREEMENT..................................................28
19. SURVIVAL..........................................................28
20. TITLES AND HEADINGS...............................................28
21. ATTACHMENTS.......................................................29
22. FURTHER ASSURANCES................................................29
23. BINDING EFFECT....................................................29
24. RULES OF CONSTRUCTION.............................................29
25. TIME OF THE ESSENCE...............................................29
26. POST-CLOSING INSPECTION...........................................29
27. COUNTERPARTS......................................................29
28. JOINT AND SEVERAL LIABILITY.......................................29
29. NO WAIVER.........................................................30
30. LIMITATION ON SELLER'S DEBT.......................................30
31. WITHDRAWAL OF FOUR PROPERTIES.....................................31
32. ACQUISITION OF SCHOTTENSTEIN PROPERTY.............................31
CONTRACT OF SALE
by and between
XXXXXX FURNITURE CORPORATION
AND THE VARIOUS SUBSIDIARIES SET FORTH ON
EXHIBIT "1" ATTACHED HERETO
(collectively, "Seller")
and
XXXXX REALTY, XX
XXXXXX-XXXXX CAPITAL REAL ESTATE FUND II, X.X.
XXXXXX-XXXXX REAL ESTATE FUND II, L.P. AND XXXXXX-
XXXXX PARALLEL FUND II, L.P.
(collectively, "Purchaser")
Dated: As of April 20, 1999
