EXHIBIT 10.1
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CONFIDENTIAL
AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
HOUSTON GALLERIA
City of Houston
County of Xxxxxx
State of Texas
SELLERS:
Galleria Limited
Post Oak Associates Limited
GDHI Limited Partnership
Post Oak Associates III, Limited
Hines Group II Limited Partnership
PURCHASER:
HG Shopping Centers, L.P.
South Alabama Development, X.X.
Xxxxxx Houston Galleria Hotels, X.X.
Xxxxxx Houston Galleria Office, L.P.
AS OF
September 17, 1999
TABLE OF CONTENTS
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Page
ARTICLE I Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.2. Definitions Generally. . . . . . . . . . . . . . . . . 10
ARTICLE II Agreement to Sell and Purchase . . . . . . . . . . . . . . . . 10
SECTION 2.1. The Project. . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III Purchase Price, Deposits and Escrow . . . . . . . . . . . . . 10
SECTION 3.1. Aggregate Purchase Price . . . . . . . . . . . . . . . 10
SECTION 3.2. INTENTIONALLY OMITTED. . . . . . . . . . . . . . . . . 11
SECTION 3.3. Payment. . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.4. Copies of Agreement. . . . . . . . . . . . . . . . . . 11
SECTION 3.5. Liability of Escrow Agent. . . . . . . . . . . . . . . 12
ARTICLE IV Failure to Close . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.1. Purchaser's Default. . . . . . . . . . . . . . . . . . 12
SECTION 4.2. Sellers' Default . . . . . . . . . . . . . . . . . . . 12
SECTION 4.3. Survival . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V Closing and Transfer of Title . . . . . . . . . . . . . . . . . 13
SECTION 5.1. Closing. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2. Closing Procedure. . . . . . . . . . . . . . . . . . . 14
SECTION 5.3. Purchaser's Performance. . . . . . . . . . . . . . . . 18
SECTION 5.4. Evidence of Authority: Miscellaneous . . . . . . . . . 18
SECTION 5.5. Conditions to Closing. . . . . . . . . . . . . . . . . 18
ARTICLE VI Prorations of Rents, Taxes and Other Expenses. . . . . . . . . 19
SECTION 6.1. Rents: Rents as and when Collected . . . . . . . . . . 19
SECTION 6.2. Additional Items . . . . . . . . . . . . . . . . . . . 23
SECTION 6.3. Employee Matters . . . . . . . . . . . . . . . . . . . 25
ARTICLE VII Loss Due to Casualty or Condemnation. . . . . . . . . . . . . 25
SECTION 7.1. Loss due to Condemnation . . . . . . . . . . . . . . . 25
SECTION 7.2. Loss Due to Casualty . . . . . . . . . . . . . . . . . 26
ARTICLE VIII Operation of the Project . . . . . . . . . . . . . . . . . . 26
SECTION 8.1. Ordinary Operations. . . . . . . . . . . . . . . . . . 26
SECTION 8.2. Leasing and Amendments to Project Documents. . . . . . 26
SECTION 8.3. Cooperation between Seller and Purchaser . . . . . . . 27
ARTICLE IX Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE X Representations and Warranties. . . . . . . . . . . . . . . . . 28
SECTION 10.1. Representations and Warranties of Seller. . . . . . 28
SECTION 10.2.A. Representations and Warranties of Urban . . . . . . 32
SECTION 10.2.B. Representations and Warranties of Xxxxxx. . . . . . 32
SECTION 10.3. No Implied Representations. . . . . . . . . . . . . 33
SECTION 10.4. "As-Is" Purchase. . . . . . . . . . . . . . . . . . 33
SECTION 10.5. No Independent Investigation. . . . . . . . . . . . 34
SECTION 10.6. Effect of Estoppels . . . . . . . . . . . . . . . . 34
SECTION 10.7. Survival of Seller's Warranties, etc. . . . . . . . 34
SECTION 10.8. Surviving Covenants . . . . . . . . . . . . . . . . 35
ARTICLE XI Indemnification; Joint and Several Liability . . . . . . . . . 35
SECTION 11.1. Seller's Indemnification. . . . . . . . . . . . . . . 35
SECTION 11.2. Purchaser's Indemnification . . . . . . . . . . . . . 35
SECTION 11.3. Joint and Several Liability . . . . . . . . . . . . . 35
SECTION 11.4. Surviving Covenants . . . . . . . . . . . . . . . . . 35
SECTION 11.5. No Limitations. . . . . . . . . . . . . . . . . . . . 36
Page
ARTICLE XII Inspection Period . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 12.1. Inspections . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE XIII Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XIV Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE XV Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE XVI Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 16.1. Successors and Assigns . . . . . . . . . . . . . . . 39
SECTION 16.2. Gender . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 16.3. Captions . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 16.4. Construction . . . . . . . . . . . . . . . . . . . . 39
SECTION 16.5. Entire Agreement . . . . . . . . . . . . . . . . . . 40
SECTION 16.6. Original Document. . . . . . . . . . . . . . . . . . 40
SECTION 16.7. Governing Law. . . . . . . . . . . . . . . . . . . . 40
SECTION 16.8. No Third Party Beneficiary . . . . . . . . . . . . . 40
SECTION 16.9. Exculpation. . . . . . . . . . . . . . . . . . . . . 40
SECTION 16.10. No Recording: Confidentiality. . . . . . . . . . . . 40
SECTION 16.11. Waiver of Trial by Jury. . . . . . . . . . . . . . . 40
SECTION 16.12. Post-Closing Arbitration . . . . . . . . . . . . . . 41
SECTION 16.13. Further Assurances . . . . . . . . . . . . . . . . . 41
SECTION 16.14. Exclusivity. . . . . . . . . . . . . . . . . . . . . 41
SECTION 16.15. Non-Business Days. . . . . . . . . . . . . . . . . . 41
SECTION 16.16. Incorporation of Exhibits. . . . . . . . . . . . . . 41
LIST OF EXHIBITS
A-1 Plot Plan
A-2 GL Land
A-3 POAL Land
X-0 XX Xxxx
X-0 Xxxxx Xxxxxxx Development Property Land
A-6 Northwest Development Property
A-7 Future Development Site
B Owner Title Commitment
C [Intentionally Omitted]
D-1 List of GL Loan Documents
D-2 List of POAL Loan Documents
D-3 List of WT Loan Documents
E Form of Special Warranty Deed
E-1 Form of Special Warranty Deed for Future Development Site
F Form of Xxxx of Sale
G PP Permitted Encumbrances
H Personal Property
I-1 Form of Assignment and Assumption of Leases
I-2 Form of Assignment and Assumption of Lessee's Interest
J-1 Form of Assignment and Assumption of Operating Agreements
J-2 Form of Assignment and Assumption of Other Agreements
J-3 Form of General Assignment
K-1 List of Management Agreements
K-2 List of Operating Agreements
K-3 List of Other Agreements
L Form of FIRPTA Affidavit
M-1 Form of Tenant Estoppel Certificate-Retail
M-2 Form of Tenant Estoppel Certificate-Office
M-3 Form of Westin Estoppel Certificate
M-4 Form of Westin Seller Estoppel
N-1 Rent Roll
N-2 Delinquency Report
N-3 Notices from Tenants as to Landlord Default
N-4 List of Material Non-Monetary Defaults by Tenants
N-5 List of Leases
N-6 List of Audits by Tenants
P Form of Agreement Regarding Office Tower
Q Current Tenant Audits
R Special Assessments
S List of Litigation
T Title and Survey Matters
U-1 List of Capital Expenditures
U-2 List of Commissions and Tenant Inducement Costs
U-3 Leases in Process
V Description of Financial Operating Statements
W Form of Tenant Notice
X List of Actions against Tenants
Y Form of Contract re: Park Agreement and Driveway Cost
Agreement
Z Telephone Numbers
AA Environmental Reports
BB Form of Amendment of HILP Lease
CC Galleria Trademarks
DD Zoopa Termination Agreement
EE Prohibited Legal Actions
FF Employee Matters
GG Limitations Regarding Seller's Post Closing Liability
THIS AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT (this
"Agreement") is made as of September 17, 1999 (the "Effective Date") by and
among GALLERIA LIMITED, a Texas limited partnership ("GL"), POST OAK
ASSOCIATES LIMITED, a Texas limited partnership ("POAL"), GDHI LIMITED
PARTNERSHIP, a Texas limited partnership ("GDHI") (formerly known as
Xxxxxx X. Xxxxx Interests, Ltd.), POST OAK ASSOCIATES III, LIMITED, a Texas
limited partnership ("Associates") and HINES GROUP II LIMITED PARTNERSHIP,
a Delaware limited partnership ("Hines Group II") (GL, POAL, GDHI,
Associates and Hines Group II being sometimes herein collectively referred
to as "Sellers" or individually as a "Seller") and HG SHOPPING CENTERS,
L.P., a Delaware limited partnership and SOUTH ALABAMA DEVELOPMENT, L.P., a
Delaware limited partnership (collectively, "Urban") and XXXXXX XXXXXXX
GALLERIA HOTELS, L.P., a Delaware limited partnership and XXXXXX XXXXXXX
GALLERIA OFFICE, L.P., a Delaware limited partnership (collectively,
"Xxxxxx") (Urban and Xxxxxx being sometimes herein collectively referred to
as "Purchaser"); this Agreement amends and restates that certain Purchase
and Sale Agreement (the "Original Agreement") made as of September 17, 1999
by and among Sellers and Purchaser.
RECITALS:
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A. GL and POAL are fee and/or leasehold owners of separate
portions of a mixed use center in Houston, Texas, known as the Houston
Galleria, which is more particularly described in this Agreement.
B. GL and GDHI are leasehold owners of a retail center in Houston,
Texas, known as the Westheimer Triangle, which is more particularly
described in this Agreement.
C. Associates and Hines Group II are fee owners of separate
portions of certain real property in Houston, Texas, known as the South
Alabama Development Property, which is more particularly described in this
Agreement.
X. Xxxxxxx desire to sell their respective interests in the
Houston Galleria, the Westheimer Triangle and the South Alabama Development
Property to Purchaser, and Purchaser desires to purchase such interests
from Sellers, subject to and upon all the terms, covenants and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings in this Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1. Definitions. Wherever used in this Agreement, the
following terms shall have the meanings set forth in this Article I unless
the context of this Agreement clearly requires another interpretation:
"2700 Post Oak" means the office building project constructed on a
portion of the GL Property described on Exhibit A-2, as more particularly
shown on the Plot Plan.
"Adjustment Point" shall have the meaning set forth in the
introduction to Article VI.
"Agreement re: Office Tower" means that agreement in the form
attached hereto as Exhibit P.
"Affiliate" of any specified person means any other person
controlling, controlled by or under common control with such specified
person. "Control" when used with respect to any specified person means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities or other
beneficial interests, by contract or otherwise, and the terms "controls,"
"controlling" and "controlled" have the meanings correlative to the
foregoing.
"Assignment and Assumption of Leases" has the meaning ascribed to
such term in Section 5.02.
"Assignment and Assumption of Lessee's Interest" has the meaning
ascribed to such term in Section 5.02.
"Assignment and Assumption of Operating Agreements" has the meaning
ascribed to such term in Section 5.02.
"Assignment and Assumption of Other Agreements" has the meaning
ascribed to such term in Section 5.02.
"Bankruptcy/Dissolution Event" means the occurrence of any of the
following: (a) the commencement of a case under Title 11 of the U.S. Code,
as now constituted or hereafter amended, or under any other applicable
federal or state bankruptcy law or other similar law; (b) the appointment
of a trustee or receiver of any property interest; (c) an assignment for
the benefit of creditors; (d) an attachment, execution or other judicial
seizure of a substantial property interest; (e) the taking of, failure to
take, or submission to any action indicating an inability to meet its
financial obligations as they accrue; or (f) a dissolution or liquidation,
death or incapacity.
"Xxxx of Sale" has the meaning ascribed to such term in Section 5.02.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which national banking institutions in Houston, Texas are authorized or
required to close.
"Central Plant Agreement" means the Central Plant Agreement by and
between GL and POAL dated ________, 1986.
"Closing" means the closing of the sale of the Project by Sellers to
Purchaser provided for in Article V.
"Closing Date" means October 20, 1999; provided that such date may be
extended until a later date not earlier than November 7, 1999 and not later
than November 15, 1999 upon the request of Seller or Purchaser.
"Caloudas Lease" means that Lease dated July 1, 1970, executed by and
between Xxxxx X. Xxxxxxxx and wife, Xxxxxxx X. Xxxxxxxx, Lessors and Post
Oak Associates Limited, Lessee, filed for record under Clerk's File No.
E 296961, corrected and refiled under Clerk's File No. E 298374 of the
Official Public Records of Real Property of Xxxxxx County, Texas. Said
Lease being amended by instrument dated July 26, 1979, filed for record
under Clerk's File No. G 198033 of the Official Public Records of Real
Property of Xxxxxx County, Texas. Lessor's interest in said lease is now
held by Post Oak Associates Limited by instrument dated as of July 15,
1998, filed under Clerk's File No. T170402 of the Official Public Records
of Real Property of Xxxxxx County, Texas.
"Contract re: Park Agreement and Driveway Cost Agreement" means that
contract in the form attached hereto as Exhibit Y.
"Xxxxxx Ground Lease" means that certain Lease dated May 1, 1966,
executed by and between Xxx. Xxxx X. Xxxxxx and Xxxx X. Xxxxxx, Lessors and
Post Oak Associates Limited, Lessee, recorded in Volume 2188, Page 466 of
the Contract Records of Xxxxxx County, Texas, as amended by instrument
dated August 12, 1997, filed for record under Clerk's File No. F 331616 of
the Official Public Records of Real Property of Xxxxxx County, Texas.
Lessee's interest in said Lease is now held by Galleria Limited by
instrument filed under County Clerk's File No. E667870 of the Official
Public Records of Real Property of Xxxxxx County, Texas. Lessor's interest
in said Lease is now held by Galleria Limited by instruments filed under
County Clerk's File No. K738920 & K738921 of the Official Public Records or
Real Property of Xxxxxx County, Texas.
"Delinquency Report" means the report of delinquency in Rents under
Leases attached hereto as Exhibit N-2 and as updated for Closing pursuant
to the terms hereof.
"Deposit" has the meaning ascribed to such term in Section 3.03.
"Designee" is defined in Section 5.01(b)(i).
"Escrow Agent" means Charter Title Company, 000 Xxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
"Excepted Items" means: (i) all items of personal property owned by
the Managing Agent (including all personal property located in Suite 875 of
the Galleria Financial Center other than that property listed as
"Management Office Property" on Exhibit H), Tenants, subtenants, hotel
operator, skating rink operator, independent contractors, business invitees
and utilities; and (ii) subject to Article VI, all cash on hand, checks,
money orders, prepaid postage in postage meters and accounts receivable.
"Future Development Site" means that parcel of land owned by
Associates containing 4.711 acres, more or less, as more particularly
described at Exhibit A-7.
"Galleria Financial Center" means the office building project
constructed on a portion of the GL Property described on Exhibit A-2, as
more particularly shown on the Plot Plan.
"Galleria Hotel Leases" means (i) that certain Lease Agreement dated
April 25, 1969, by and between GL (as the successor in interest to POAL),
as landlord, and Westin, as tenant, as amended, and (ii) that certain Lease
Agreement dated January 26, 1976, by and between GL (as the successor in
interest to POAL), as landlord, and Westin, as tenant, as amended.
"Galleria I" means a certain tract of land in Houston, Texas, owned
by GL, containing 19.404 acres, more or less, as more particularly
described on Exhibit A-2 and more particularly shown on the Plot Plan.
"Galleria II" means a certain tract of land in Houston, Texas, owned
by GL, containing 9.149 acres, more or less, as more particularly described
on Exhibit A-2 and more particularly shown on the Plot Plan.
"Galleria III" means a certain tract of land in Houston, Texas, owned
by POAL, containing 9.451 acres, more or less, as more particularly
described on Exhibit A-3 and more particularly shown on the Plot Plan.
"Galleria Trademarks" are listed at Exhibit CC.
"General Assignment" has the meaning ascribed to such term in
Section 5.02.
"GL Loan" means the $159,999,999.00 mortgage loan to GL by
Connecticut General Life Insurance Company, New York State Teachers'
Retirement System and Principal Mutual Life Insurance Company evidenced by
the GL Loan Documents.
"GL Loan Documents" means the loan documents evidencing the GL Loan,
as more particularly described on Exhibit D-1.
"GL Property" means a certain tract of land in Houston, Texas, owned
by GL, consisting of Galleria I and Galleria II and containing 28.553
acres, more or less, as more particularly described on Exhibit A-2 and more
particularly shown on the Plot Plan, together with the portion of the
Shopping Center Building constructed on Galleria I and Galleria II,
Galleria Financial Center, 2700 Post Oak, Post Oak Tower, the Hotels and
all other improvements constructed thereon and all other right, title and
interest of GL with respect to the property described in this definition.
"Governmental Authorities" means all agencies, bureaus, departments
and officials of Federal, state, county, municipal and local governments
and public authorities having jurisdiction over the Project or any part
thereof.
"Hazardous Materials" means (i) toxic wastes, hazardous materials,
hazardous substances or other substances which are defined, prohibited or
regulated by, or listed in, any Federal, state or local law or regulation
addressing environmental protection or pollution control matters,
(ii) asbestos in friable condition or otherwise posing a threat to human
health, (iii) polychlorinated biphenyls (PCBS) and (iv) oil, petroleum and
their by-products.
"HILP Amendment" means that amendment to the HILP Lease in the form
attached hereto as Exhibit BB.
"HILP Lease" means that Lease dated July 1, 1996 by GL, as landlord,
and Managing Agent, as tenant, covering Suite 875 of Galleria Financial
Center.
"Hotel Company" means any corporation, partnership, trust or
individual which, at the time of Closing, owns or controls not less than
twenty (20) hotels, but expressly excluding any corporation, partnership,
trust or individual which owns or controls twenty (20) or more hotels but
whose primary business is the lending of money or investing on an equity
basis in real estate projects as opposed to actively operating hotels or
motels.
"Hotels" means (i) the property commonly known as the Westin Oaks
Hotel and (ii) the property commonly known as the Westin Galleria Hotel,
each constructed on a portion of the GL Property and more particularly
shown on the Plot Plan.
"Houston Galleria" means the mixed use development in Houston, Texas
known as the "Houston Galleria", bounded by Sage Road, West Alabama Road,
Post Oak Boulevard and Westheimer Road and consisting of the GL Property
and the POAL Property.
"Impositions" means all real estate and personal property taxes,
general and special assessments, water and sewer charges and rents, vault
taxes, license fees and other fees and charges assessed or imposed by
Governmental Authorities upon the Project and/or Personal Property.
"Independent Contract Consideration" has the meaning ascribed to such
term in Section 3.03(c).
"Inspection Period" shall have the meaning set forth in Article XII.
"Intangible Property" means all intangible property now or on the
Closing Date owned by Sellers in connection with its ownership and
operation of the Project, including without limitation, (i) all warranties
and guarantees of manufacturers, suppliers and contractors, (ii) all
permits and approvals of Governmental Authorities, and licenses and
approvals of private utilities and others, required for or necessary to the
operation and maintenance of the Project, (iii) all development rights
relating to the Project, (iv) all Utility Capacity, (v) all cash security
deposits held by any utility with respect to the Project (together with any
interest accrued thereon), (vi) all site plans, surveys, plans or
specifications and floor plans relating to the Project, (vii) all
architectural and engineering plans (whether "as built" or design), (viii)
all catalogues, booklets, manuals, files, logs, records, correspondence,
tenant lists, tenant prospect lists, tenant histories, tenant files,
brochures, materials and advertisements, (ix) the telephone exchange
numbers used in connection with the Project listed at Exhibit Z attached
hereto and (x) Sellers' financial and accounting records related to the
Project. Notwithstanding the foregoing, Intangible Property shall exclude
all financial and accounting records of Sellers' constituent partners, all
Hines organization training manuals and all computer software used in
connection with the Project.
"knowledge" or "notice" when used in respect of Seller means, without
independent investigation, the actual knowledge of or written notice
received by Xxxxx X. Xxxxx, Xxxxxx X. XxXxxxx, Xxx Xxxxx XxXxxxxx, Xxxx
Xxxxxxxx and Xxxxx Xxxx.
"Leases" means all leases, licenses, concessions and other forms of
agreement, written or oral, however denominated, wherein any of the Sellers
(as a party named therein or the successor thereto) grants to any party or
parties, other than the Managing Agent, the right of use or occupancy of
any portion of the Project, and all renewals, modifications, amendments and
guaranties affecting the same, but expressly excluding the Operating
Agreements and Other Agreements.
"Leaseback Agreement" means that certain Lease dated April 4, 1973,
executed by and between Associated Dry Goods Corporation, Lessor and Post
Oak Associates Limited, Lessee, as evidenced by Short Form of Leaseback
Agreement and Correction Short Form of Leasehold Leaseback Agreement
recorded under Clerk's File Nos. E029348 and E081987, of the Official
Public Records of Real Property of Xxxxxx County, Texas. Lessee's interest
in said Lease assigned by Post Oak Associates Limited to Galleria Limited
by Confirmation and Ratification Agreement dated July 1, 1997 by and
between Galleria Limited and Post Oak Associates Limited. (Affecting a
1.666 portion of Galleria II.)
"Legal Requirements" means all statutes, laws, ordinances, rules,
regulations, executive orders and requirements of all Governmental
Authorities which are applicable to the Project or any part thereof or the
use or manner of use thereof, or to the owners, Tenants or occupants
thereof in connection with such ownership, occupancy or use.
"Lord & Xxxxxx" means The May Department Stores Company (successor by
merger to Associated Dry Goods Corporation).
"Lord & Xxxxxx Ground Lease" means that certain Lease dated April 4,
1973, executed by and between Post Oak Associates Limited, Lessor and Phase
II North Limited, Lessee, as evidenced by Short Form Ground Lease and
Correction Short Form Ground Lease recorded under Clerk's File Nos. E029346
and E081985, of the Official Public Records of Real Property of Xxxxxx
County, Texas. Lessee's interest in said Lease was assigned to Post Oak
Associates Limited by Assignment filed under County Clerk's File No.
E123832 of the Official Public Records of Real Property of Xxxxxx County,
Texas. Lessee's interest in said Lease further assigned by Post Oak
Associates Limited to Galleria Limited by Confirmation and Ratification
Agreement dated July 1, 1997 by and between Galleria Limited and Post Oak
Associates Limited. Lessor's interest in said Lease is now held by
Galleria Limited by instrument filed under County Clerk's File No. E667870
of the Official Public Records of Real Property of Xxxxxx County, Texas.
(Affecting a 1.666 acre portion of Galleria II.)
"Lord & Xxxxxx Lease" means the lease between GL, as landlord, and
Lord & Xxxxxx, as tenant, dated April 4, 1973, as amended.
"Losses" shall have the meaning set forth in Section 11.01.
"Macy's" means Macy's Texas, Inc.
"Macy's Lease" means the lease between POAL, as landlord, and Macy's,
as tenant, dated November 28, 1984, as amended.
"Major Tenant" means (i) Macy's as to the Macy's Lease, Neiman Marcus
as to the Neiman Marcus Lease, Lord & Xxxxxx as to the Lord & Xxxxxx Lease
and Saks as to the Saks Lease, (ii) any other retail Tenant in the Shopping
Center Building or the WT Property leasing an amount of space in excess of
10,000 square feet of contiguous net rentable area, and (iii) any Tenant in
Galleria Financial Center, Post Oak Tower or 2700 Post Oak leasing an
amount of space in excess of the lesser of (x) one full floor or more or
(y) 15,000 square feet of net rentable area.
"Mall Entertainment" means Mall Entertainment Limited Partnership, a
Texas limited partnership (successor in interest to Mall Entertainment,
Inc.)
"Mall Entertainment Lease" is defined at Section 5.02(y).
"Mall Entertainment Management Agreement" means that Management
Agreement dated January 1, 1992 by and between GL and Mall Entertainment
for the management of the ice skating rink in the Shopping Center Building.
"Management Agreements" means those certain Management Agreements for
separate portions of the Project set forth in Exhibit K-1.
"Managing Agent" means Xxxxx Interests Limited Partnership, a
Delaware limited partnership.
"Neiman Marcus" means The Xxxxxx-Xxxxxx Group, Inc., a Delaware
corporation.
"Neiman Marcus Lease" means the lease between GL, as landlord, and
Neiman Marcus, as tenant, dated January 27, 1969, as amended.
"Northwest Development Property" means the surface parking lot
located on the northwest corner of the POAL Property, as shown at Exhibit
A-6.
"Operating Agreements" means the REA, and the other agreements with
respect to operation of the Project, as identified in Exhibit K-2, to which
one or more Sellers is a party.
"Other Agreements" means all contracts and agreements relating to the
Project, as identified in Exhibit K-3, to which any Seller (or its
predecessor in interest) shall be, at Closing, a party and by which any
Seller is bound and which Purchaser is obligated to assume hereunder, other
than the Operating Agreements and Leases. Exhibit K-3 also includes the
contracts of Mall Entertainment; however if the Mall Entertainment Lease is
executed at Closing, such contracts will not be assigned to Purchaser at
Closing.
"Owner Title Commitment" means those certain commitments for title
insurance issued by the Title Agent on behalf of the Title Company,
effective September 6, 1999, covering all real property interests included
as part of the Project, copies of which are attached hereto as Exhibit B.
"PP Permitted Encumbrances" means the encumbrances of the Personal
Property more particularly described in Exhibit G.
"Personal Property" means all apparatus, machinery, devices,
appurtenances, equipment, furniture, furnishings and other items of
personal property (other than the Excepted Items) owned by any of the
Sellers and located at and used in connection with the ownership, operation
or maintenance of the portion of the Project owned by each such Seller, and
shall include the items listed in Exhibit H. Personal Property also
includes certain items of personal property owned by Setec and listed on
Exhibit H (but does not include any other personal property of Setec).
"Plot Plan" means the plan of the Project attached hereto as
Exhibit A-1.
"POAL Loan" means that $25,000,000 loan to POAL from Teacher
Retirement System of Texas evidenced by the POAL Loan Documents.
"POAL Loan Documents" means the loan documents evidencing the POAL
Loan, as more particularly described on Exhibit D-2.
"POAL Property" means a certain tract of land in Houston, Texas,
owned by POAL, consisting of Galleria III and containing 9.451 acres, more
or less, as more particularly described on Exhibit A-3 and more
particularly shown on the Plot Plan, together with the portion of the
Shopping Center Building constructed on Galleria III and all other
improvements constructed thereon and all right, title and interest of POAL
with respect to the property described in this definition.
"Post Oak Tower" means the office building constructed on a portion
of the GL Property described on Exhibit A-2 and more particularly shown on
the Plot Plan.
"Project" means the Houston Galleria, the WT Property and the South
Alabama Development Property.
"RP Permitted Encumbrances" means, as to the GL Property, the POAL
Property, the WT Property and the South Alabama Development Property, the
standard printed exceptions (other than those that relate to mortgagee, as
opposed to owner's title policies) and the exceptions on Schedule B of the
Owner Title Commitment burdening the portion of the Project in question,
subject to satisfaction of the Title and Survey Matters.
"REA" means that certain Declaration of Reciprocal Easements dated
September 24, 1973, by and between Post Oak Associates Limited and New
England Mutual Life Insurance Company filed for record under Clerk's File
No. 3992916 of the Official Public Records of Real Property of Xxxxxx
County, Texas; ratified by agreement dated March 28, 1974, filed for record
under County Clerk's File No. E274627; and Supplemental Declaration of
Reciprocal Easements dated June 15, 1979, executed by Galleria Limited and
Post Oak Associates Limited, filed for record under Clerk's File No.
G349516 of the Official Public Records of Real Property of Xxxxxx County,
Texas; as corrected by that certain Correction to Supplemental Declaration
of Reciprocal Easements dated as of July 1,1997, by and between Galleria
Limited and Post Oak Associates Limited, joined in by Transco Tower Limited
and Post Oak Associates III Limited, filed under Clerk's File No. S521150
of the Official Public Records of Real Property of Xxxxxx County, Texas;
and as amended by that certain Amendment to Supplemental Declaration of
Reciprocal Easements dated as of July 1, 1997 filed under Clerk's File No.
S521151 of the Official Public Records of Real Property of Xxxxxx County,
Texas.
"Rent Roll" means the rent roll attached hereto as Exhibit N-1 and as
updated for Closing pursuant to the terms hereof.
"Rents" means all fixed, minimum, additional, percentage, overage and
escalation rents, common area and/or mall maintenance charges, advertising
and promotional charges, insurance charges, rubbish removal charges,
sprinkler charges, shoppers aid charges, water charges, utility charges,
HVAC charges and other amounts payable under the Leases or the Operating
Agreements.
"Saks" means Saks Fifth Avenue of Texas Inc., a Delaware corporation.
"Saks Lease" means the lease between POAL, as landlord, and Saks (as
successor in interest to Xxxxxxxx Xxxxx & Company), as tenant, dated
September 1, 1978, as amended.
"Seller Estoppel" shall have the meaning specified in subsection
5.02.
"Setec" means Setec Protection Service, Inc.
"Setec Leases" mean that (i) Lease Agreement dated December 19, 1989
between GL and Setec, as amended by that First Amendment dated May 23,
1995, covering approximately 3,091 s.f. of net rentable area on level 6W in
the Galleria Financial Center and (ii) that Lease Agreement dated May 8,
1998 between GL and Setec covering the Cencomm Center.
"Shopping Center Building" means the retail portion of the Houston
Galleria, together with adjacent surface and structured parking, a portion
of which is located on and a part of the GL Property and a portion of which
is located on and a part of the POAL Property.
"Skybridge Agreement" means that certain Skybridge Agreement, dated
September 22, 1981 by and between Post Oak/Alabama Partnership, Tower
Limited and GL, recorded under Xxxxxx County Xxxxx'x File No. H211093.
"Skybridge Ordinance" means that certain City of Houston Ordinance
81-2289 (passed on November 12, 1981) granting the right, privilege,
license and permission to construct and maintain a pedestrian bridge across
West Alabama Street between South Post Oak and Sage Roads, connecting the
Transco Tower/Galleria Parking Garage to the Transco II Parking Garage.
"Special Warranty Deed" has the meaning ascribed to such term in
Section 5.02.
"South Alabama Development Property" means a certain tract of land in
Houston, Texas consisting of (i) a parcel owned by Associates containing
7.3208 acres (which includes the Future Development Site), more or less, as
more particularly described on Exhibit A-5, (ii) a parcel owned by Xxxxx
Group II containing 4.194 acres, more or less, as more particularly
described on Exhibit A-5, and (iii) a parcel owned by Xxxxx Group II
containing 2.901 acres, more or less, as more particularly described on
Exhibit A-5 , together with any improvements constructed thereon and all
right, title and interest of Associates and Xxxxx Group II with respect to
the property described in this definition.
"Substantial Portion" has the meaning ascribed to such term in
Section 7.01.
"Substantial Loss or Damage" has the meaning ascribed to such term in
Section 7.02.
"Surviving Covenants" means any covenant contained in this Agreement
that by its terms survives the Closing.
"Tenants" means the tenants, licensees, concessionaires or other
users or occupants under Leases.
"Tenant Notices" shall have the meaning specified in subsection
5.02(i).
"Title Agent" means Charter Title Company as agent for the Title
Company.
"Title Company" means Chicago Title Insurance Company.
"Title and Survey Matters" means that list of title and survey
matters set forth at Exhibit T.
"Trademark and Service Xxxx Assignment" means that Trademark and
Service Xxxx Assignment by Galleria, Inc. to Purchaser or its designee, in
a form agreed upon by the parties hereto (and which the parties shall use
good faith efforts to agree upon before October 1, 1999, and which shall
provide for, among other things, the assignment of all ongoing litigation
relating to the use of the Galleria Trademarks in Houston and Galleria
Inc.'s obligation to pay all legal fees accruing prior to the Closing
Date).
"Utility Capacity" shall mean all present and future use, if any, of
wastewater treatment capacity, drainage capacity, water and water capacity
or other utility facilities relating to the Project, and all reservations
of, commitments for, and letters covering any such use, whether or not the
same are being currently used to the fullest extent available.
"Violations" means violations of Legal Requirements existing with
respect to the Project or any portion thereof.
"Westin" means Post Oak Westin Hotel Company, a Delaware corporation
(formerly known as Post Oak Western Hotels, Incorporated).
"WT Lease" means that Lease dated August 1, 1964, executed by and
between Xxxx Xxxxxx Xxxxxxx, Individually and as Trustee under the Will of
Wm. X. Xxxxxx, Lessor, and Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xx. and
Xxxx X. Xxxxxx, Lessee, recorded in Volume 1807, Page 371 of the Contract
Records of Xxxxxx County, Texas. Said lease assigned by instruments filed
for record under County Clerk's File No(s). E667870 and K095016 of the
Official Public Records of Real Property of Xxxxxx County, Texas.
"WT Loan" means that $1,125,000 loan to GDHI and GL by Berkshire Life
Insurance Company evidenced by the WT Loan Documents.
"WT Loan Documents" means the loan documents evidencing the WT Loan,
as more particularly described on Exhibit D-3.
"WT Property" means a leasehold interest existing pursuant to the WT
Lease covering a certain tract of land in Houston, Texas commonly known as
the "Westheimer Triangle", a fifty percent (50%) undivided interest in
which leasehold is owned by GL and a fifty percent (50%) undivided interest
in which leasehold is owned by GDHI, containing 3.799 acres, more or less,
as more particularly described at Exhibit A-4, together with the retail
center and all other improvements constructed thereon and all right, title
and interest of GL and GDHI with respect to the interest described in this
definition.
"Zoopa Termination Agreement" means the First Amendment of Lease
attached hereto as Exhibit DD.
SECTION 1.2. Definitions Generally. Definitions in this Agreement
apply equally to both the singular and plural forms of the defined terms.
The words "include" and including" shall be deemed to be followed by the
phrase "without limitation" when such phrase does not otherwise appear.
The terms "herein", "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
section, paragraph or subdivision. The article and section titles appear
as a matter of convenience only and shall not affect the interpretation of
this Agreement. All article, section, paragraph, clause, exhibit or
schedule references not attributed to a particular document shall be
references to such parts of this Agreement.
ARTICLE II
AGREEMENT TO SELL AND PURCHASE
------------------------------
SECTION 2.1. The Project. Upon and subject to the terms and
conditions of this Agreement, GL, POAL, GDHI, Associates and Xxxxx Group II
agree to sell and convey all of their respective right, title and interest
in and to the GL Property, the POAL Property, the WT Property and the South
Alabama Development Property, including without limitation, all right,
title and interest in the Personal Property and the Intangible Property, to
Purchaser and Purchaser agrees to purchase all of GL's, POAL's, GDHI's,
Associates' and Xxxxx Group II's respective right, title and interest in
and to the GL Property, the POAL Property, the WT Property and the South
Alabama Development Property, including without limitation, all right,
title and interest in the Personal Property and the Intangible Property.
Sellers shall convey and Purchaser shall accept fee simple title (or the
lessee's interest under leases, as the case may be) to Sellers' respective
portions of the Project in accordance with the terms of this Agreement,
subject to the RP Permitted Encumbrances. Sellers shall convey and
Purchaser shall accept all right, title and interest of Sellers in and to
the Personal Property, subject to the PP Permitted Encumbrances.
ARTICLE III
PURCHASE PRICE, DEPOSITS AND ESCROW
-----------------------------------
SECTION 3.1. Aggregate Purchase Price. The aggregate purchase price
which the Purchaser agrees to pay and Sellers agree to accept for the
Project shall be the sum of FIVE HUNDRED TWENTY-SIX MILLION FOUR HUNDRED
SEVENTY-FIVE THOUSAND AND NO/100 Dollars ($526,475,000.00) (hereinafter
referred to as the "Purchase Price"). The Purchase Price is inclusive of a
$6,000,000 purchase price for the assignment of the rights to the Galleria
Trademarks.
SECTION 3.2. INTENTIONALLY OMITTED.
SECTION 3.3. Payment. Payment of the Purchase Price is to be made
in cash as follows:
(a) Not later than two (2) business days following the
execution of this Agreement, Purchaser shall make an xxxxxxx money deposit
of Five Million Dollars ($5,000,000.00) (the "Deposit").
(b) The Deposit shall be placed with and shall be held in
escrow by Escrow Agent, in immediately available funds, in an
interest-bearing account or an investment account at Chase Bank of Texas,
National Association as directed by Purchaser. Any interest earned by the
Deposit shall be considered as part of the Deposit. Except as otherwise
provided in this Agreement, the Deposit will be applied to the Purchase
Price at Closing. If for any reason the Closing does not occur and either
party makes a written demand upon the Escrow Agent for payment of the
Deposit, the Escrow Agent shall deliver written notice to the other party
of such demand. If the Escrow Agent does not receive a written objection
from the other party to the proposed payment within ten (10) days after the
delivery of such notice, the Escrow Agent is hereby authorized to make such
payment. If the Escrow Agent does receive such written objection within
such period, the Escrow Agent shall continue to hold such amount until
otherwise directed by written instructions signed by Seller and Purchaser
or a final judgment of a court or arbitration.
(c) Prior to or contemporaneous with the execution hereof by
Purchaser and Sellers, Purchaser has paid to Sellers One Hundred and No/100
Dollars ($100.00) (the "Independent Contract Consideration"), which amount
Sellers and Purchaser bargained for and agreed to as consideration for
Sellers' execution and delivery of this Agreement. The Independent
Contract Consideration is non-refundable and in addition to any other
payment or deposit required by this Agreement, and Sellers shall retain the
Independent Contract Consideration notwithstanding any other provision of
this Agreement to the contrary.
(d) At Closing, Purchaser shall pay (directly or through the
Title Agent) to each of the Sellers its share of the Purchase Price, less
the amount of the Deposit which shall be applied thereto and subject to
adjustment for the prorations as provided herein, to a bank account
designated by each of the Sellers via wire transfer in immediately
available funds.
(e) At Closing, the GL Loan shall be repaid and Purchaser
shall be obligated to pay any prepayment fee required under the GL Loan
Documents. At Closing, the POAL Loan and the WT Loan shall also be repaid,
and Purchaser and Seller shall each bear one-half of any prepayment fee
payable under the POAL Loan Documents and WT Loan Documents, respectively.
(g) Upon the repayment of the GL Loan at Closing, GL shall
terminate the Xxxxxx Ground Lease. Upon the repayment of the POAL Loan at
Closing, POAL shall terminate the Caloudas Lease. In each case, the
applicable Lease will be removed as an RP Permitted Encumbrance.
SECTION 3.4. Copies of Agreement. In addition to the Deposit,
Purchaser shall deposit five (5) fully executed copies of this Agreement
with the Escrow Agent immediately after both parties have executed it. The
Escrow Agent shall retain one copy of this Agreement and deliver two copies
hereof to each of Sellers and Purchaser.
SECTION 3.5. Liability of Escrow Agent. The parties acknowledge
that (i) Escrow Agent is acting solely as a stakeholder at their request
and for their convenience, (ii) Escrow Agent shall not be deemed to be the
agent of either of the parties and (iii) Escrow Agent shall have no
liability to any party on account of its failure to disburse the Deposit
(beyond disbursing the Deposit, including any earnings thereon, in
accordance with the terms of this Agreement, as directed by the parties
hereto or as directly a court of competent jurisdiction). As between
Escrow Agent on the one hand, and Sellers and Purchaser on the other hand,
Sellers and Purchaser shall jointly and severally indemnify and hold Escrow
Agent harmless from and against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of
Escrow Agent's duties hereunder, except with respect to actions or
omissions taken or permitted by Escrow Agent in disregard of this Agreement
or involving bad faith or negligence on the part of the Escrow Agent. As
between Sellers and Purchaser, the prevailing party in any dispute
concerning the Deposit shall be indemnified and held harmless from payments
due to the Escrow Agent under the preceding sentence.
ARTICLE IV
FAILURE TO CLOSE
----------------
SECTION 4.1. Purchaser's Default.
(a) If Sellers have complied with all of the covenants and
conditions contained herein in all material respects and Purchaser fails to
consummate this Agreement and take title by reason of a default on
Purchaser's part, which default has not been cured within five (5) business
days after the date of written notice of default from Sellers to Purchaser
(which notice describes such default), then Sellers, as their sole and
exclusive remedy, may terminate this Agreement and retain the Deposit as
liquidated damages; and after payment of the Deposit to Seller, neither
party shall have any further rights or obligations with respect to the
other under this Agreement, except for the Surviving Covenants. In the
event such notice of default is given to Purchaser within five (5) business
days of the scheduled Closing Date, then the Closing Date shall be extended
to the date that is five (5) business days after the giving of such notice
of default.
(b) If the Closing occurs and thereafter (i) Purchaser is in
default in the payment of any monetary obligation hereunder which continues
for more than ten (10) days or (ii) is in default in the performance of any
other obligation hereunder which continues for more than forty-five (45)
days, then Sellers may seek damages (but excluding consequential and
punitive damages) from Purchaser.
SECTION 4.2. Sellers' Default.
(a) In the event that Purchaser has complied with all of the
covenants and conditions contained herein in all material respects and is
ready, willing and able to close in accordance with this Agreement, and
Seller defaults in performance of its obligations in any material respect
hereunder and fails to consummate this Agreement, then Purchaser may, as
its sole and exclusive remedy, either (i) obtain specific performance of
this Agreement or (ii) terminate this Agreement, in which event Purchaser
shall be entitled to a return of the Deposit (together with any interest
earned thereon) and to recover from Sellers the amount of its out-of-pocket
third-party costs incurred in connection with this Agreement up to a
maximum of $1,000,000.00. Subject to the preceding
sentence, Purchaser hereby waives any right to xxx any Seller for
damages (including consequential and punitive damages) for any default by
Sellers hereunder. If the Closing occurs, such waiver shall not apply to
damages (but excluding consequential and punitive damages) to which
Purchaser may be entitled hereunder by reason of any breach by any Seller
of any of the warranties, representations or covenants hereunder which
survive the Closing, the remedies therefor being set forth in Section 10.07
and Section 11.01.
(b) Notwithstanding anything to the contrary contained
herein, the inability of Sellers to obtain and deliver to Purchaser at
Closing the items described in Section 5.02(j) (excluding Seller Estoppels)
and 5.02(v) shall not constitute a default of Sellers under this Agreement,
but shall be a condition precedent to Purchaser's obligations to perform
its undertakings as provided herein.
SECTION 4.3. Survival. The provisions of this Article IV shall be
Surviving Covenants.
ARTICLE V
CLOSING AND TRANSFER OF TITLE
-----------------------------
SECTION 5.1. Closing.
(a) The parties hereto agree to conduct the Closing at
11:00 a.m. Houston, Texas time on the Closing Date at the offices of
Xxxxx & Xxxxx, L.L.P. in Houston, Texas. Time shall be of the essence with
respect to the Closing Date, and this Agreement shall terminate if for any
reason the Closing does not occur on the Closing Date, unless otherwise
extended by the mutual agreement of Sellers and Purchaser.
(b) At Closing, the properties to be conveyed hereunder shall
be transferred to the entities comprising Purchaser, as follows:
(i) The GL Property and the POAL Property (excluding
the Northwest Development Property) shall be conveyed to a partnership
consisting solely of Xxxxxx and Urban ("Designee") and designated by Xxxxxx
and HG Shopping Centers, L.P. to take title to the GL Property and the POAL
Property (excluding the Northwest Development Property) on their behalf.
The appointment of the Designee shall be made in writing and delivered to
Sellers by Xxxxxx and HG Shopping Centers, L.P. at least ten (10) Business
Days prior to Closing. Notwithstanding the appointment of such Designee,
Xxxxxx and HG Shopping Centers, L.P. shall retain all of their respective
rights and obligations, whether pre-Closing or post-Closing, under this
Agreement. Designee shall also be required to make the representations and
warranties set forth in Section 10.02A in a certificate delivered to
Sellers at Closing.
(ii) The Northwest Development Property shall be
conveyed to HG Shopping Centers, L.P. at Closing.
(iii) The South Alabama Development Property shall be
conveyed to South Alabama Development, L.P. at Closing.
(iv) The WT Property shall be conveyed to HG Shopping
Centers, L.P. at Closing.
SECTION 5.2. Closing Procedure. Each of the Sellers specified below
shall execute and deliver or cause to be delivered to Purchaser on or
before the Closing the document specified below to be delivered or caused
to be delivered by each of such Sellers:
(a) Deed. Each of GL, POAL, Associates and Xxxxx Group II,
as to the portion of the Project owned by each: a Special Warranty Deed, in
the form attached hereto as Exhibit E (except that the Future Development
Site shall be conveyed by deed in the form attached hereto as Exhibit E-1),
dated as of the Closing Date, proper for recording, conveying the
respective interest of each of the Sellers in and to the Project to the
appropriate Purchaser (as provided in Section 5.01(b)), subject, however,
to the RP Permitted Encumbrances encumbering such portion of the Project;
(b) Xxxx of Sale. Each of GL, POAL, GDHI, Associates and
Xxxxx Group II, as to the portion of the Project owned by each: a Xxxx of
Sale in the form attached hereto as Exhibit F, dated as of the Closing Date
transferring the Personal Property to the appropriate Purchaser (as
provided in Section 5.01(b)), which xxxx of sale shall contain no
warranties, express or implied, by Sellers except that Sellers own the
Personal Property transferred thereby, free and clear of all liens or
encumbrances;
(c) Assignment and Assumption of Leases. Each of GL, POAL
and GDHI, as to the portion of the Project owned by each: an Assignment and
Assumption of Leases in the form attached hereto as Exhibit I-1, dated as
of the Closing Date, assigning all of the Sellers' right, title and
interest as landlord in and to any Leases of their respective portions of
the Project;
(d) Assignment and Assumption of Lessee's Interest. Each of
GL and GDHI, as to the lessee's interests held by each: an Assignment and
Assumption of Lessee's Interest in the form attached hereto as Exhibit I-2,
dated the Closing Date, assigning (i) the Lord and Xxxxxx Ground Lease and
the Leaseback Agreement; and (ii) all of GL's and GDHI's interests as
lessee in the WT Lease.
(e) Assignment and Assumption of Operating Agreements. Each
of GL, POAL, GDHI, Associates and Xxxxx Group II, as to the portion of the
Project owned by each: an Assignment and Assumption of Operating
Agreements in the form attached hereto as Exhibit J-1, dated as of the
Closing Date, assigning all of Sellers' right, title and interest in, to
and under the Operating Agreements;
(f) Assignment and Assumption of Other Agreements. Each of
GL, POAL, GDHI, Associates and Xxxxx Group II, as to the portion of the
Project owned by each: an Assignment and Assumption of Other Agreements in
the form attached hereto as Exhibit J-2, dated as of the Closing Date,
assigning to the appropriate Purchaser (as provided in Section 5.01(b)) all
of Sellers' right, title and interest in, to and under the Other Agreements
and the items on Exhibit G with respect to their respective portions of the
project (and if the Mall Entertainment Lease is not executed at Closing, GL
shall cause Mall Entertainment to execute the Assignment and Assumption of
Other Agreements with respect to the agreements to which it is a party);
(g) General Assignment. Each of GL, POAL, GDHI, Associates
and Xxxxx Group II, as to the portion of the Project owned by each: a
"General Assignment" in the form annexed hereto as Exhibit J-3, dated as of
the Closing Date, of all of Sellers' right, title and interest in and to,
to the extent assignable, the Intangible Property;
(h) Tenant Notices. Each of GL, POAL and GDHI, as to the
portion of the Project owned by each: Tenant notification agreements (the
"Tenant Notices") in the form attached hereto as Exhibit W, dated as of the
Closing Date, executed by Sellers, and complying with applicable statutes
in order to relieve Sellers of liability for tenant security deposits
(provided the security deposits are paid or otherwise transferred to
Purchaser), notifying the Tenants that the Project has been sold to
Purchaser and directing the Tenants to pay future rentals to Purchaser (or
Purchaser's designated agent);
(i) Owner Title Policy. Each of the Sellers: a form T-1
owner's policy of title insurance issued by the Title Company with respect
to the Project, dated as of the Closing Date in the amount of the Purchase
Price, showing fee simple title or an insured leasehold or easement
interest, as the case may be, to the Project to be vested in each of the
Purchasers (or, at Purchaser's election, the premium for the owner's policy
can be applied toward a policy issued in connection with a condominium
association created by Purchaser if a declaration providing therefor is
filed simultaneously with the transfer of title, but in no event shall
Sellers be obligated or responsible for any documents which may be required
in connection with the creation of said condominium association), subject
to the RP Permitted Encumbrances, the Contract re: Park Agreement and
Driveway Cost Agreement and any other closing documents provided for herein
which encumber the Project and containing the following deletions and
revisions: (i) deletion of the arbitration provision; (ii) if Purchaser
pays the premium therefor as provided in Article XV hereof, revision of
the standard survey exception to read "shortages in area" only; (iii)
revision of the standard rights of tenants in possession exception to
include "as tenants only under unrecorded leases, none of which contain any
options to purchase or rights of first option or first refusal;" (iv)
revision of the standard exception relating to standby fees, taxes and
assessments for the current and subsequent years and prior years to
eliminate any such taxes "for prior years." In addition, if mineral rights
were reserved, then endorsements against damage to the Property or
improvements as a result of the exercise of any right of access must be
included.
(j) Tenant Estoppels. Each of GL, POAL and GDHI, as to the
portions of the Project owned by each: tenant estoppel certificates as
described below which shall be dated not more than forty-five (45) days
prior to the Closing Date:
(i) tenant estoppel certificates executed by each Major
Tenant (A) in the appropriate form attached hereto as Exhibit M-1 (as to
retail tenants in the Project), or M-2 (as to office tenants in the
Project) or (B) in the form and/or with the substance provided for in the
Lease; plus
(ii) tenant estoppel certificates executed by at least
75% of the retail Tenants (by gross leasable area) having greater than
5,000 and fewer than 10,000 square feet of gross leasable area in the
Shopping Center Building or the WT Property (A) in the form attached hereto
as Exhibit M-1 or (B) in the form and/or with the substance provided for in
the Lease; plus
(iii) tenant estoppel certificates from 75% of the
remaining retail tenants (i.e., those with fewer than 5,000 square feet) in
the Shopping Center Building and the WT Property (by gross leasable area)
and 75% of the remaining office tenants (by net rentable area), such
certificates to be (A) in the appropriate form attached hereto as
Exhibit M-1 or M-2 (as the case may be) or (B) in the form and/or with the
substance provided for in the Lease, provided that to the extent that a
tenant described in this paragraph (iii) fails to provide the estoppel
certificate required to be delivered hereunder, the applicable Seller may,
at its election, deliver an estoppel certificate from Seller certifying the
substance of the matters set forth (A) in the form attached hereto as
Exhibit M-1 or M-2, as the case may be or (B) in the form and/or with the
substance provided for in the Lease (the "Seller Estoppel") except that
Seller shall only have the right to deliver Seller Estoppels for up to 15%
of such remaining retail and office tenants (by gross leasable area as to
retail tenants and by net rentable area as to other tenants); plus
(iv) a tenant estoppel certificate from Westin in the
form attached hereto as Exhibit M-3, provided that if such estoppel
certificate is not delivered, Seller shall deliver a Seller Estoppel with
respect thereto in the form attached as Exhibit M-4 updated to the Closing
Date. .
Notwithstanding anything to the contrary contained herein, the
certification by (i) a retail tenant of the matters set forth in
paragraph15 (audit rights) and/or paragraph 18 (hazardous materials) of the
form set forth at Exhibit M-1 or (ii) an office tenant of the matters set
forth in paragraph 12 (audit rights) of the form set forth at Exhibit M-2
shall not be a condition to Purchaser's obligations to close hereunder, nor
shall it constitute a default by Sellers hereunder.
The term "Tenants", as used in this Section 5.02(j), shall not
include licensees under license or concession agreements which have fixed
terms of less than six (6) months or tenants under storage agreements. Any
limitations on the amount of liability of Sellers contained in this
Agreement shall not apply to claims or rights against Sellers under or
based upon any Seller Estoppel (the objective being that no limitation of
liability should apply to a Seller Estoppel that would not have applied if
the same estoppel certificate had been received by Purchaser from the
applicable tenant).
(k) Rent Roll and Delinquency Report. Each of GL, POAL and
GDHI, as to the portion of the Project owned by each: an updated Rent Roll
and Delinquency Report, in the forms of Exhibits N-1 and N-2, respectively,
dated within five (5) business days of the date of the Closing;
(l) Project Documents. Each of GL, POAL, GDHI, Associates
and Xxxxx Group II, as to the portions of the Project owned by each such
party: to the extent in Sellers' possession, the originals of all Leases,
record construction plans and specifications, Operating Agreements, Other
Agreements, all engineering and maintenance records related to the Project
and all licenses, permits and certificates of occupancy for the Project;
(m) FIRPTA Affidavit. Each Seller: an affidavit that such
Seller is not a "foreign person" in the form attached as Exhibit L;
(n) Keys. Each of GL, POAL, GDHI, Associates and Xxxxx Group
II, as to the portion of the Project owned by each: all keys for all locks
in the Project;
(o) Terminations. Each Seller as to the portion of the
Project owned by each such party: evidence of termination of the Management
Agreements, the Central Plant Agreement, the Mall Entertainment Management
Agreement (if the Mall Entertainment Lease is executed), the Xxxxxx Lease
and the Caloudas Lease, and all other agreements encumbering the Project
other than the Leases, the Operating Agreements and the Other Agreements;
(p) Closing Statement. Each Seller as to the portion of the
Project owned by each such party: an executed original of the closing
statement in form and substance mutually agreeable to each such Seller and
Purchaser;
(q) Certificate as to Representations and Warranties. Each
Seller as to the portion of the Project owned by each such party: a
certificate ("Closing Certificate") certifying to Purchaser that, subject
to Sections 10.06 and 10.07, the representations and warranties of such
Seller set forth in Section 10.01 hereof are true and correct in all
material respects as of the Closing Date as if made on such date;
(r) Trademark and Service Xxxx Assignment: GL shall cause
Galleria, Inc. to execute the Trademark and Service Xxxx Assignment;
(s) Agreement: re: Office Tower: GL shall execute the
Agreement re: Office Tower and shall cause Managing Agent or an affiliate
thereof, in either case having a net worth reasonably satisfactory to
Xxxxxx, to join the Agreement re: Office Tower;
(t) Notice of Restrictions: Each Seller: a notice to
Purchaser in compliance with City of Houston Ordinance No. 80-1312, which
lists the restrictions on the Project and the rights of the City of Houston
to enforce such restrictions;
(u) Utility Capacity. Xxxxx Group II and Associates: a
"Wastewater Capacity Reservation Transfer Authorization Form" in the form
promulgated by the City of Houston, Texas for the Future Development Site
and the 2.901 acre tract of land owned by Hines Group II. Purchaser and
Sellers agree that if the capacity for the South Alabama Development
Property is combined with any property adjacent thereto, the capacity shall
be allocated among the properties in proportion to the acreage of each;
(v) Skybridge Ordinance. GL shall obtain (i) City Council
ratification or approval of its assignment of the Skybridge Ordinance to
Purchaser (as well as any prior assignment to Seller), (ii) an estoppel
certificate from the appropriate department of the City of Houston, in form
reasonably satisfactory to Purchaser, confirming that all obligations under
the Skybridge Ordinance have been met and that there is no default
thereunder and (iii) an estoppel certificate from Transco Tower Limited
certifying that, to its knowledge, there is no default by GL under the
Skybridge Agreement;
(w) HILP Lease. GL: the HILP Amendment;
(x) Contract re: Park Agreement and Driveway Cost Agreement.
Associates shall execute the Contract re: Park Agreement and Driveway Cost
Agreement and shall cause Managing Agent or an entity affiliated with
Managing Agent, in either case having a net worth reasonably satisfactory
to Urban, to join the Contract re: Park Agreement and Driveway Cost
Agreement;
(y) Mall Entertainment Lease. GL shall cause Mall
Entertainment to execute a lease covering the ice rink, in a form
satisfactory to HG Shopping Centers, L.P. and Sellers (the "Mall
Entertainment Lease"); provided that if a mutually satisfactory form of
Mall Entertainment Lease is not agreed upon by the parties prior to
Closing, Purchaser and Sellers agree that Mall Entertainment shall continue
to manage the ice skating rink pursuant to the terms of the Mall
Entertainment Management Agreement on a month-to-month basis (and, if
necessary, GL shall cause the Mall Entertainment Management Agreement to be
amended accordingly);
(z) Setec Lease Amendments. GL shall cause Setec to execute
the Setec Lease Amendments, in a form reasonably acceptable to Purchaser
and Sellers, providing that the Setec Leases shall terminate if and when
Setec is no longer providing security services to the Houston Galleria; and
(aa) an estoppel letter from the lessor under the WT Lease
certifying that there is no default by Sellers under the WT Lease.
SECTION 5.3. Purchaser's Performance. At the Closing, Purchaser
will cause the Purchase Price to be paid to Sellers, will execute and
deliver to each appropriate Seller the Assignment and Assumption of Leases,
the Assignment and Assumption of Lessee's Interest, the Assignment and
Assumption of Other Agreements, the Assignment and Assumption of Operating
Agreements, the Xxxx of Sale, the Trademark and Service Xxxx Assignment,
the Contract re: Park Agreement and Driveway Cost Agreement, the HILP
Amendment, the Agreement re: Office Tower, the Setec Lease Amendments, the
Mall Entertainment Lease (if applicable), the closing statement and the
certificate described in the last sentence of Section 10.04. It is a
condition to Purchaser's obligations hereunder that on the Closing Date all
of Sellers' representations and warranties shall be true and correct in all
material respects.
SECTION 5.4. Evidence of Authority: Miscellaneous. Sellers and
Purchaser will deliver to the Title Company and each other such evidence or
documents as may reasonably be required by the Title Company or either
party hereto evidencing the power and authority of Sellers and Purchaser
and the due authority of, and execution and delivery by, any person or
persons who are executing any of the documents required hereunder in
connection with the sale of the Project. Sellers and Purchaser will
execute and deliver such other documents as are reasonably required to
effect the intent of this Agreement.
SECTION 5.05. Conditions to Closing
(a) Seller's Conditions to Closing. In addition to the
conditions provided in other provisions of this Agreement, Seller's
obligations to perform its undertakings provided in this Agreement
(including its obligation to sell the Project) are conditioned on the
following:
(i) Performance by Purchaser. The due performance by
Purchaser of each and every undertaking and agreement to be performed by it
hereunder in all material respects (including, without limitation, the
delivery to Seller of the items specified to be delivered by Purchaser in
Section 5.03 hereof) and the truth of each representation and warranty made
by Purchaser in this Agreement in all material respects at the time as of
which the same is made and as of the Closing Date as if made on and as of
the Closing Date.
(ii) No Bankruptcy or Dissolution. That at no time on
or before the Closing Date shall any Bankruptcy/Dissolution Event have
occurred with respect to Purchaser, and if Purchaser is a partnership, any
general partners of Purchaser.
(iii) Title and Survey Matters. The resolution of all
Title and Survey Matters to the satisfaction of Seller.
(b) Purchaser's Conditions to Closing. In addition to the
conditions provided in other provisions of this Agreement, Purchaser's
obligations to perform its undertakings provided in this Agreement
(including its obligation to purchase the Project) are conditioned on the
following:
(i) Performance by Seller. The due performance by
Seller of each and every undertaking and agreement to be performed by it
hereunder in all material respects (including, without limitation, the
delivery to Purchaser of the items specified to be delivered by Seller in
Section 5.02 hereof), and the truth of each representation and warranty
made by Seller in this Agreement in all material respects at the time as of
which the same is made and as of the Closing Date as if made on and as of
the Closing Date. Without limitation on the foregoing, there shall be no
material defaults or exceptions noted in the Closing Certificate.
(ii) No Bankruptcy or Dissolution. That at no time on
or before the Closing Date shall a Bankruptcy/Dissolution Event have
occurred with respect to Seller or any of the general partners of Seller.
(iii) Estoppels. Purchaser shall have received, at least
five (5) business days prior to the Closing Date, each of the estoppel
certificates required pursuant to Section 5.02 hereof, in form and content
reasonably acceptable to Purchaser.
(iv) Title and Survey Matters. The resolution of all
Title and Survey Matters to the satisfaction of Purchaser.
ARTICLE VI
PRORATIONS OF RENTS, TAXES AND OTHER EXPENSES
---------------------------------------------
At the Closing (except where a later date is specifically provided
for in this Article), the parties hereto shall adjust and prorate the items
set forth below as of 11:59 p.m. on the day preceding the Closing Date (the
"Adjustment Point"), unless otherwise expressly provided, and the net
amount thereof shall be paid by Purchaser to Seller, or credited by Seller
to Purchaser, as the case may be, at the Closing. At least three (3)
business days prior to Closing, Seller shall deliver to Purchaser all
information needed to calculate the prorations and compile the closing
statement.
SECTION 6.1. Rents: Rents as and when Collected. Any Rents
collected by Purchaser subsequent to the Closing (whether due and payable
prior to or subsequent to the Adjustment Point) shall be adjusted as of the
Adjustment Point, and any portion thereof properly allocable to periods
prior to the Adjustment Point shall be paid by Purchaser to the appropriate
Seller pursuant to the procedures outlined in Section 6.1.8 after the
collection thereof by Purchaser. If prior to the Closing any Seller shall
have collected, or if subsequent to the Closing any Seller shall collect,
any Rents which are properly allocable in whole or in part to periods
subsequent to the Adjustment Point, the portion thereof so allocable to
periods subsequent to the Adjustment Point shall be credited to Purchaser
by such Seller at the Closing or, if collected after the Closing, remitted
by such Seller to Purchaser pursuant to the procedures outlined in Section
6.1.8.
6.1.1. One week prior to the Closing each Seller shall deliver
to Purchaser a revised Delinquency Report, showing all Tenants which are
delinquent in payment of Rents as of such date, which list shall set forth
the amount of each such delinquency, whether such delinquency is (i) thirty
(30) days or less, (ii) between thirty-one (31) days and sixty (60) days,
(iii) between sixty-one (61) days and ninety (90) days or (iv) over ninety
(90) days. All amounts collected by Purchaser or Seller after the Closing
Date from each delinquent Tenant shall be deemed to be in payment of Rents
(or the specific components of Rents) then due and payable pursuant to the
terms of the applicable lease on account of each month after the month in
which the Closing occurs, next in payment of Rents (or the specific
components of Rents) due for the month in which the Closing occurs and
finally in payment of delinquent Rents (or the specific components of
Rents) which are in arrears as of the first day of the month in which the
Closing occurs, as set forth on the aforesaid list. Any amounts collected
by Purchaser after the Closing Date from each delinquent Tenant which, in
accordance with the preceding sentence, are allocable to the month in which
the Closing occurs (as adjusted as of the Adjustment Point) or any prior
month shall be paid by Purchaser to the appropriate Seller pursuant to the
procedures outlined in Section 6.1.8.
6.1.2 Purchaser shall use commercially reasonable efforts to xxxx and
collect any delinquencies set forth on the list delivered by Sellers
pursuant to subsection 6.1.1 for a period ending on expiration of the
fourth full calendar quarter after the Closing and the amount thereof, as,
when and to the extent collected by Purchaser, shall be paid by Purchaser
to such Seller, after the collection thereof by Purchaser pursuant to the
procedures outlined in Section 6.1.8. Sellers shall provide reasonable
assistance to Purchaser in such collection efforts. In no event shall
Purchaser be obligated to institute any actions or proceedings or to seek
the eviction of any Tenant in order to collect any such delinquencies.
6.1.3 Nothing contained in this Section 6.01 shall be deemed to
prohibit any Seller, at its own expense, from instituting after the Closing
any actions or proceedings in its own name against any Tenant that is
delinquent in the payment of $5,000 or more to Seller in order to collect
the amount of any delinquencies due in whole or in part to Seller from such
Tenant; provided, however, that in no event shall (1) Seller be entitled in
any such action or proceeding to seek to evict any Tenant or to recover
possession of its space or (2) Seller be entitled to initiate any
involuntary bankruptcy or similar proceeding against any Tenant. Purchaser
agrees not to waive or settle any delinquency owed in whole or in part to
any Seller without the prior written consent of such Seller, which consent
may be granted or withheld in such Seller's sole discretion.
Notwithstanding the foregoing, each Seller shall be permitted to continue
to pursue actions already instituted against any Tenant (or against those
who are no longer Tenants), a schedule describing all such actions is
attached hereto as Exhibit X. Seller shall also retain any original notes
from Tenants with respect to delinquencies arising prior to Closing, a copy
of which shall be given to Purchaser at Closing. Notwithstanding the
foregoing, Sellers shall be prohibited from instituting any action with
respect to matters more particularly described on Exhibit EE attached
hereto.
6.1.4 With respect to that portion of the Rents which constitute
percentage or overage rents, or other amounts payable by Tenants based upon
the sales or gross receipts of such entities, the following shall apply:
(i) at the Closing and/or, in the case of percentage or overage rents which
are in arrears or are payable in other than monthly installments,
subsequent to the Closing, percentage or overage rents shall be apportioned
as provided in the other subsections of this Section 6.01 in the case of
Rents generally; and (ii) following the end of the lease year on account of
which such percentage or overage rents are payable by each Tenant and
receipt by Purchaser of any final payment on account thereof due from such
Tenant (including, without limitation, any amount due as a result of an
audit conducted by any Seller or Purchaser), Purchaser shall pay to Seller
the excess, if any, of (x) the amount of percentage or overage rents paid
by such Tenant on account of such entire lease year multiplied by a
fraction, the numerator of which is the number of months (including any
fraction of a month expressed as a fraction) of such lease year prior to
the Adjustment Point and the denominator of which is 12 or, if such lease
expires prior to the end of the lease year, such lesser number of months
(including any fraction of a month expressed as a fraction) as may have
elapsed in such lease year prior to the expiration of the Lease in question
over (y) all amounts theretofore received by Seller on account of the
percentage or overage rents in question for such lease year. If in any
case the amount provided for in (y) above exceeds the amount provided for
in (x) above, Seller shall pay the amount of such excess to Purchaser. All
such post-Closing adjustments shall be made pursuant to the provisions of
Section 6.1.8. If on the Closing Date Seller shall be conducting any
audits of payments of percentage or overage rents previously made by
Tenants for lease years prior to the ones in effect on the Closing Date,
Seller shall have the right to continue all such audits until completion
thereof and to collect and retain any amounts payable to Seller hereunder
by reason thereof. A schedule of all such audits in progress at the date
hereof is annexed hereto as Exhibit Q. In addition, any Seller shall have
the right to initiate any such audit (as well as an audit for the lease
year in which Closing occurs) within six months subsequent to the Closing.
6.1.5 With respect to that portion of Rents which are payable on an
annual, semi-annual or other non-monthly basis, Purchaser shall use
commercially reasonable efforts to xxxx and collect all such payments which
become due after the Closing, which payments, to the extent allocable to
periods prior to the Adjustment Period, shall be paid by Purchaser to
Seller promptly after receipt thereof. With respect to that portion of
Rents that are attributable to payment of expenses such as common area/mall
maintenance charges, Impositions, utility charges, merchants, or other
association charges or advertising and promotional charges, such Rents
shall be apportioned based upon which party paid or will pay the
correlating expenses for the relevant period. Purchaser shall be entitled
to receive at Closing in the form of a credit to Purchaser, the excess of
(A) any amounts paid by Tenants as of the Closing Date to any Seller during
1999 for common area/mall maintenance charges and utility charges, over
(B) the cumulative amount expended by Sellers during 1999 as of the Closing
Date with respect to such items. Seller shall provide Purchaser with
adequate back-up information in connection with such credit. With respect
to that portion of Rents which are billed on an index-based formula or on
an estimated basis during the fiscal or other period for which paid, at the
end of such fiscal or other period Purchaser shall determine whether the
items in question have been overbilled or underbilled. If Purchaser
determines that there has been an overbilling and an overbilled amount has
been received, the appropriate Seller shall, after request by Purchaser
pursuant to the procedures set forth in Section 6.1.8, pay to Purchaser the
portion of such overbilled amount which is allocable (as provided for such
Rent in this Section 6.01) to the period prior to the Adjustment Point, and
promptly thereafter Purchaser shall reimburse the entire overbilled amount
to the Tenants which paid the same. If Purchaser determines that there has
been an underbilling, the additional amount shall be billed by Purchaser to
the Tenants, and any amount received by Purchaser to the extent allocable
(as provided for such Rent in this Section 6.01) to periods prior to the
Adjustment Point shall be paid by Purchaser to the appropriate Seller
pursuant to the procedures set forth in Section 6.1.8.
6.1.6 Each Seller (with respect to its portion of the Project) shall
be entitled to receive, and Purchaser shall pay to each such Seller after
the receipt thereof (i) all amounts payable by Tenants on account of
Impositions for which Seller has provided Purchaser with a credit pursuant
to the terms of Section 6.02, which amounts shall be apportioned between
each Seller and Purchaser in the same manner as the Impositions to which
they relate and (ii) all amounts payable by Tenants on account of utilities
for which Seller has provided Purchaser with a credit pursuant to the terms
of Section 6.02, which amounts shall be apportioned between Sellers and
Purchaser in the same manner as the utilities to which they relate.
6.1.7 Any advance rental deposits or payments held by any Seller on
the Closing Date and applicable to periods of time subsequent to the
Adjustment Point, and any security deposits held by any Seller on the
Closing Date, together with interest thereon, if any, which, under the
terms of the applicable Leases, is payable to the Tenants thereunder, shall
be paid or credited to Purchaser at the Closing. Any non-cash deposits or
letters of credit shall either be reissued in the name of Purchaser at
Closing, or Seller shall assign its rights therein to Purchaser at Closing,
and will reasonably cooperate with Purchaser post Closing to facilitate the
transfer to Purchaser. Seller shall use reasonable efforts to cause all
security deposits in the form of letters of credit to be amended or
reissued in the name of Purchaser as soon as possible after the Closing,
and Purchaser shall cooperate with Seller in such efforts. Until delivery
to Purchaser of the reissued or amended letters of credit, in the event of
an occurrence of an event of default pursuant to the lease for which a
letter of credit was issued and upon delivery by Purchaser to Seller of a
written statement certifying on behalf of Purchaser that an event of
default has occurred and said event has not been cured or waived, then in
that event, Seller shall take all commercially reasonable steps required
under the original letter of credit to claim all such amounts as Seller is
entitled to claim thereunder as a result of said event of default. Seller
will thereafter immediately deliver to Purchaser any and all sums paid by
the issuer of the original letter of credit pursuant to the original letter
of credit as a result of Seller taking such steps. Upon delivery to
Purchaser of the reissued or amended letter of credit, Seller's obligations
with respect to such letter of credit shall immediately terminate.
6.1.8 Following the Closing, Purchaser shall submit or cause to be
submitted to Sellers (i) on the 15th day after Closing, (ii) on the 45th
day after Closing, and (iii) within thirty (30) days after the end of each
calendar quarter up to and including the fourth full calendar quarter
following Closing, a statement (for each portion of the Project) which sets
forth all (a) Rents collected by Purchaser during the preceding quarter
(but following Closing) and subject to proration pursuant to the provisions
of this Section 6.01 and (b) all amounts collected or incurred during the
preceding quarter (but following Closing) subject to proration pursuant to
the provisions of Section 6.02. Sellers shall submit or cause to be
submitted, at the same time(s) as Purchaser is obligated to deliver its
statement, a statement (for each portion of the Project) showing amounts
collected after Closing during such period and allocable to periods
subsequent to the Adjustment Point, as outlined in the first paragraph of
Section 6.01 above. Within fifteen (15) days following delivery of such
statements, the parties shall make such adjustments among themselves as
shall be necessary to carry out the post-Closing apportionment provisions
of Sections 6.01 and 6.02. Each Seller, at its expense, shall have the
right from time to time following the Closing until ninety (90) days after
receipt by Sellers of the last quarterly statement required hereunder to
examine and audit so much of the books and records of Purchaser as relate
to such items in order to verify the collections and expenses reported by
Purchaser in such quarterly statements.
SECTION 6.2. Additional Items. At the Closing, the following
additional items shall be apportioned between the parties hereto as of the
Adjustment Point and credits provided to Purchaser or Seller, as the case
may be, unless otherwise expressly provided, with the applicable Seller to
be obligated for or entitled to amounts apportioned to the period through
the Adjustment Point and Purchaser to be obligated for or entitled to
amounts apportioned to the period following the Adjustment Point:
6.2.1 Impositions in respect of the calendar year 1999 which are
payable after the Closing Date regardless of the valuation date or lien
affixation date associated with such payments. In the case of special
assessments payable in installments specified in Exhibit R attached hereto,
the installment for the fiscal year in which the Closing Date occurs shall
be apportioned as of the Adjustment Point and Purchaser shall be
responsible for paying all subsequent installments thereof. If any Tenant
in occupancy at the Closing Date is obligated to pay any Impositions
directly to the applicable taxing authority, such Impositions shall not be
apportioned. Any refund obtained by any Seller or Purchaser of real estate
taxes for which an apportionment is made pursuant to this subsection 6.2.1,
net of the costs of obtaining such refund and the amount thereof payable to
Tenants, shall be apportioned as of the Adjustment Point. If Closing
occurs on a date on which the tax rates, valuations or assessments for the
calendar year of Closing are not yet fixed, Impositions will be prorated on
the latest tax statements. Such Imposition prorations shall be adjusted
following final determination of the same after Closing pursuant to the
procedures set forth in Section 6.1.8.
6.2.2 Water and sewer charges, if any, payable by Sellers on the
basis of the period or periods for which the same are payable. If there
are water meters at the Project, Sellers shall furnish readings to a date
not more than five (5) Business Days prior to the Closing Date. Such
charges shall be adjusted following determination as of the Adjustment
Point pursuant to the procedures set forth in Section 6.1.8. Any water and
sewer charges payable by Tenants in occupancy on the Closing Date directly
to entities furnishing such services shall not be apportioned.
6.2.3 Utilities and fuel payable by Sellers, including without
limitation electricity and gas. Each Seller shall endeavor to have the
meters for such utilities read not more than five (5) Business Days prior
to Closing. Such charges shall be adjusted following determination as of
the Adjustment Point pursuant to the procedures set forth in Section 6.1.8.
If any Seller does not obtain such a meter reading with respect to any such
utility, the adjustment therefor shall be made on the basis of the most
recently issued bills therefor. Each Seller will receive a credit in the
full amount of cash security deposits, if any, held by any utility
companies (with interest thereon, if any, in the amount accrued on such
security deposits) and shall assign to Purchaser at the Closing all of such
Seller's right, title and interest in and to such security deposits.
Purchaser will make its own arrangements for any security bonds required by
any utility companies by Closing and Seller will be entitled to cancel any
bonds previously furnished. Charges for any utilities payable by Tenants
in occupancy on the Closing Date directly to the utility companies
furnishing the same shall not be apportioned.
6.2.4 Charges payable by any Seller under the Operating Agreements
and any Other Agreements.
6.2.5 Contributions payable by any Seller to merchants' and other
associations, and to promotional activities at the Project. Purchaser shall
be entitled to receive a credit at Closing of the excess of (A) any amounts
paid by Tenants as of the Closing Date to any Seller during 1999 for
promotional activities benefitting the Project or for merchants' or other
associations, over (B) the cumulative amount expended by Sellers for such
promotional activities during 1999. The obligation of any Seller to
contribute funds for such promotional activities or for merchants' or other
associations shall be apportioned as of the Adjustment Point based upon the
corresponding amounts contributed by Tenants at such time. GL shall also
assign to Purchaser the Galleria Gold Gift Certificate account at the
Laredo National Bank; and on and after the Closing Date, Purchaser shall
assume the obligation to fund the reimbursement requests of Tenants with
respect to Galleria Gold Gift Certificates issued prior to the Closing Date
out of such account (but only to the extent that the amount in such account
is sufficient to fund such requests).
6.2.6 The cost of capital expenditures, with Sellers being obligated
to pay all capital expenditures due and payable on or prior to the
Adjustment Point and Purchaser being obligated to pay all capital
expenditures due and payable after the Adjustment Point, provided that
Purchaser shall be obligated to pay for capital expenditures contracted for
by Sellers prior to Closing only if such expenditures (i) are set forth on
Exhibit U-1 hereto, or (ii) are specifically approved by Purchaser. The
foregoing provision shall not apply to capital expenditures described in
Section 6.2.7 which shall be adjusted, if applicable, as provided therein,
and capital expenditures funded with any condemnation or casualty proceeds
received by Sellers.
6.2.7 The cost of any leasing commissions and Tenant Inducement Costs
(as defined below), with Purchaser being obligated to pay (i) any leasing
commissions to third party brokers and Tenant Inducement Costs which are
payable in connection with a Lease, amendment to a Lease or renewal of a
Lease entered into or renewed, as the case may be, prior to the Effective
Date and which are set forth as "Commissions and Inducements to be paid" in
Section I of Exhibit U-2, and (ii) any leasing commissions to third party
brokers and Tenant Inducement Costs which are payable in connection with a
Lease, amendment to a Lease or renewal of a Lease entered into after the
Effective Date (and which has been approved (or deemed approved) by
Purchaser as provided in Section 8.02(b) hereof) (collectively, "Purchaser
Items"). Seller shall be responsible for (i) any leasing commissions and
third party costs listed in Section II of Exhibit U-2 and (ii) the payment
of all leasing commissions and Tenant Inducement Costs for leases executed
prior to the Effective Date which are not Purchaser Items. To the extent
that any Purchaser Items have been paid by Seller prior to Closing, Seller
will receive a credit at Closing. To the extent that any items listed in
Section II of Exhibit U-2 have not been paid by Seller before Closing,
Purchaser shall receive a credit at Closing. Notwithstanding the
foregoing, with respect to the Air Liquide lease in 2700 Post Oak, in the
event Air Liquide leases additional space in 2700 Post Oak prior to October
1, 2000, and there are aggregate brokerage commissions due and payable in
connection therewith in excess of six percent (6%) of rental due for such
expansion space by virtue of agreements in existence as of the Closing Date
(such incremental excess being herein referred to as the "Excess
Commission"), then Seller shall be responsible for the payment of the
Excess Commission. "Tenant Inducement Costs" means any payments required
under a Lease to be paid by the landlord thereunder to or for the benefit
of the tenant thereunder which is in the nature of a tenant inducement,
including but not limited to tenant improvement costs, tenant allowances,
lease buyout costs, and moving, design, and refurbishment costs as a
condition for the tenant's occupancy of its leased premises.
Purchaser shall be entitled to any payments made by Zoopa under the
Zoopa Termination Agreement, and any amounts received by Seller prior to
Closing shall be credited to Purchaser at Closing. If Zoopa does not pay
any installment of the Settlement Fee (as defined in the Zoopa Termination
Agreement), Seller shall pay each such installment to Purchaser within
fifteen (15) days of the date that such installment was due under the Zoopa
Termination Agreement, and in such event, Purchaser shall assign its rights
to collect any such delinquent installment from Zoopa to Seller. If, after
such payment by Seller, Purchaser recovers any installment payments from
Zoopa, Purchaser shall promptly reimburse Seller.
6.2.8 Any other items of income or expense of the Project, which, in
accordance with generally accepted business practices, should be
apportioned between Sellers and Purchaser.
All prorated items that are not subject to an exact determination
shall be estimated by the parties with prorations adjusted to actual
pursuant to the procedures set forth in Section 6.1.8. The provisions of
this Article VI shall be Surviving Covenants.
SECTION 6.3. Employee Matters. Certain agreements between Seller
and Purchaser with respect to the employees of Seller are set forth on
Exhibit FF attached hereto.
ARTICLE VII
LOSS DUE TO CASUALTY OR CONDEMNATION
------------------------------------
SECTION 7.1. Loss due to Condemnation. In the event of a
condemnation of all or a Substantial Portion (as hereinafter defined) of
the Project which condemnation shall render a Substantial Portion of the
Project untenantable or results in the Project not having sufficient
parking to comply with applicable law or the specific requirement of any
Operating Agreement, Purchaser may, upon written notice to Sellers given
within ten (10) days of receipt of notice of such event, cancel this
Agreement, in which event the Escrow Holder at Purchaser's request shall
return the Deposit plus all interest earned thereon, this Agreement shall
terminate and neither party shall have any rights or obligations hereunder
except for the Surviving Covenants. In the event that Purchaser does not
elect to terminate, or if the condemnation affects less than a Substantial
Portion and does not affect the parking capacity in the manner described
above, then this Agreement shall remain in full force and effect, the
Purchase Price shall not be reduced and Purchaser shall be entitled to an
assignment of all of Sellers' share of the condemnation award (net of (1)
the costs of collection incurred by Sellers, if any, and (2) if the
condemnation is temporary, the portion of such award, if any, attributable
to the period prior to the Adjustment Point, which amounts shall be
retained by Sellers). Notwithstanding the foregoing, Sellers shall be
entitled to receive or retain out of such condemnation award any reasonable
amounts expended by any such Seller to restore or protect the Project. In
no event shall Sellers be obligated to repair or restore the Project. For
purposes of this Section 7.01, a Substantial Portion shall mean a
condemnation of the Project in excess of $5,000,000 in value of the
Project.
SECTION 7.2. Loss Due to Casualty. In the event of Substantial Loss
or Damage (as hereinafter defined) to the Project by fire or other
casualty, Purchaser, upon written notice to Sellers given within thirty
(30) days of receipt of notice of such event, may cancel this Agreement in
which event the Escrow Holder at Purchaser's request shall return the
Deposit (including all interest earned thereon) to Purchaser and this
Agreement shall terminate and no party shall have any rights or obligations
hereunder except for the Surviving Covenants. In the event that Purchaser
elects not to terminate, or if the casualty results in less than
Substantial Loss or Damage, then this Agreement shall remain in full force,
the Purchase Price shall be reduced by the amount of any deductible or
co-payment amount under the related insurance policy or the amount of any
uninsured Loss (but the reduction on account of any uninsured Loss shall
not exceed $5,000,000), Purchaser shall be entitled to an assignment of all
of the proceeds of Sellers' fire or other casualty insurance and Sellers
shall have no obligation to repair or restore the Project. Notwithstanding
the foregoing, Sellers shall be entitled to receive or retain (i) out of
such casualty insurance proceeds, any reasonable amounts expended by
Sellers to restore or protect the Project and (ii) in the case of rental or
business interruption proceeds allocable to periods prior to the Adjustment
Point (apportioned consistent with Article VI), loss of rents by reason of
the fire or other casualty suffered by Sellers prior to the closing, which
entitlement shall survive the Closing. For purposes of this Section 7.02
"Substantial Loss or Damage" shall mean loss or damage to the Project the
cost for repair of which exceeds $5,000,000 of the value of the Project.
ARTICLE VIII
OPERATION OF THE PROJECT
------------------------
SECTION 8.1. Ordinary Operations. Between the date of this
Agreement and the Closing, Sellers shall operate and maintain the Project
(or cause the Project to be operated and maintained) in the ordinary course
of business and consistent with past procedures and practices heretofore
followed in connection with the operation and maintenance of the Project.
Without limiting the foregoing, Sellers shall maintain all current
insurance covering the Project and any portion thereof. At Closing,
Sellers shall be required to terminate all existing property management
(other than hotel management) and leasing agreements for the Project to
which any Seller is a party, at Sellers' sole cost, effective as of the
Closing. With respect to any tenant estoppels obtained by Sellers, Seller
shall advise Purchaser of any changes (of which Seller is aware) to the
matters set forth in such estoppel.
SECTION 8.2. Leasing and Amendments to Project Documents.
(a) Between the date of this Agreement and the Closing,
Sellers shall not intentionally cause any lien or other encumbrances to
attach to the Project, other than the lien for taxes not yet due and
payable or any liens which Seller is contesting in good faith (provided
that all liens are released of record or are adequately insured by
Closing).
(b) Commencing upon the date of this Agreement, Sellers shall
not (i) lease any portion of the Project, (ii) terminate any Lease, (iii)
amend any Lease, (iv) terminate or amend any Operating Agreement, or (v)
enter into, terminate or amend any other contract or agreement that would
be binding on Purchaser after the Closing, in each case without first
obtaining Purchaser's prior approval, which approval shall not be
unreasonably denied or delayed. For purposes of this Section 8.02(b), any
matters to be approved shall be set forth in a written notice and delivered
in accordance with Section 14 hereof. Any matters not approved by one of
said representatives within five (5) Business Days of the delivery of such
notice shall be deemed approved. Notwithstanding the foregoing, Purchaser
shall be deemed to have approved (i) any leases or amendments to leases
being circulated for signature on the Effective Date and (ii) any letters
of intent executed prior to the Effective Date, all of which are identified
in Exhibit U-3. The parties expressly agree to abide by the
confidentiality provisions of this Agreement with respect to all leasing
and other matters communicated to Purchaser's representatives.
SECTION 8.3. Cooperation between Seller and Purchaser. Sellers
agree to reasonably cooperate with Purchaser in connection with
(i) Purchaser's request for the platting of the Northwest Development
Property and the South Alabama Development Property as unrestricted
reserves, (ii) the preparation and filing of a Form 8K by Urban with
respect to the transactions described herein following the Closing
(including execution of an "agreed upon procedures letter" in a form
reasonably satisfactory to Sellers), (iii) the preparation and delivery of
any Subordination, Non-Disturbance and Attornment Agreements required by
Purchaser's lenders in connection with the closing of the transaction
described herein and (iv) delivery to Purchaser's lenders of complete
copies of the final 1997 and 1998 audited statements of cash flow and
unaudited operating statements for the retail and office portions of the
Project and such other financial information as Purchaser's lenders shall
reasonably request.
ARTICLE IX
BROKER
------
Seller and Purchaser each represent to the other that it has not
engaged any agent or broker in connection with the sale of the Project or
any portion thereof except Xxxxxx Xxxxxxx Realty Incorporated (whom Sellers
shall be responsible to compensate). Each party agrees to defend,
indemnify and hold harmless the other party for any and all judgments,
costs of suit, reasonable attorneys' fees, and other reasonable expenses
which the other may incur by reason of any action or claim against such
party or the Project by any broker, agent, or finder based upon any
statement or agreements alleged to have been made by the indemnifying
party. The provisions of this Article IX shall be Surviving Covenants
hereunder and shall survive the Closing and any termination of this
Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 10.1. Representations and Warranties of Seller. Each Seller
makes the following representations and warranties with respect to the
portion of the Project owned by such Seller (unless a specific Seller is
hereinafter named, in which event the representation shall be deemed made
solely by the particular Seller named, as to the portion of the Project
owned by such Seller) and agrees that Purchaser's obligations under this
Agreement are conditioned upon the truth and accuracy of such
representations and warranties in all material respects, both as of this
date and as of the date of the Closing, subject to those limitations set
forth in this Article X or otherwise in this Agreement:
(a (i) The Seller is not a party to, subject to or bound by
any agreement, contract, permit or other restriction of any nature, or any
judgment, order, statute, rule or regulation of any court, governmental
body, administrative agency or arbitrator, or any legal proceeding which
would prevent or be violated by, or under which there would be a default,
or which would result in creation of or claim of any lien, charge, or
encumbrance upon any part of the Project as a result of any of the items
set forth below; and (ii) no registration or consent of, or payment of any
premium, fee or penalty to, any governmental authority or any other person
or entity, which has not been obtained or paid, is required for or will
arise out of any of the items set forth below:
(1) the execution, delivery and performance of this
Agreement or any other agreements, obligations or instruments referred to
herein or contemplated hereby; and
(2) the transfer and assignment to the Purchaser in
accordance with this Agreement of the Project and any agreements and
liabilities to which the Purchaser is taking subject or assuming pursuant
to this Agreement.
(b Each of GL, POAL, GDHI and Associates is a limited
partnership organized and existing under the laws of the State of Texas,
and has all power and authority to conduct the business of the portion of
the Project which it owns and to enter into and perform its obligations
hereunder under the laws of the State of Texas.
(c Xxxxx Group II is a limited partnership organized and
existing under the laws of the State of Delaware, is qualified to transact
business in the State of Texas and has all power and authority to conduct
the business of the portion of the Project which it owns and to enter into
and perform its obligations hereunder under the laws of the State of
Delaware and the State of Texas.
(d The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly
authorized by all necessary parties and no other proceedings on the part of
Seller are necessary in order to permit it to consummate the transaction
contemplated hereby. This Agreement has been duly executed and delivered
by Seller and (assuming valid execution and delivery by the Purchaser) is a
valid and binding obligation of Seller enforceable against it in accordance
with its terms.
(e With respect to the Leases which encumber the portion of
the Project owned by the particular Seller:
(i There are no Leases other than those listed in
Exhibit N-5 and true, correct and complete copies of the Leases (including
all amendments and supplements thereto) listed on Exhibit N-5 have
heretofore been made available and/or delivered to Purchaser for review;
(ii The Rent Roll annexed hereto as Exhibit N-1 is
true, correct and complete in all material respects as of the Effective
Date.
(iii The Delinquency Report annexed hereto as
Exhibit N-2 contains a complete list in all material respects of Tenants
that are delinquent in the payment of Rents as of the Effective Date, which
schedule sets forth the information specified in Section 6.1.1; and
(iv Each of the Leases is in full force and effect as
of the date hereof. Seller is not in default thereunder and Seller has
received no written notice from any Tenant under a Lease which is still
outstanding (x) that Seller has defaulted in performing any of its material
obligations under such Lease or (y) that such Tenant is entitled to any
reduction in, refund of or counterclaim or offset against, or is otherwise
disputing, any Rents paid, payable or to become payable by such Tenant
thereunder or is entitled to cancel or terminate such Lease or to be
released of any of its material obligations thereunder, except as set forth
in Exhibit N-3. With the exception of the delinquencies in the payment of
Rents specified in the Delinquency Report to the knowledge of the
particular Seller who owns the portion of the Project encumbered by such
Lease, no material default exists under any Lease by the Tenant thereunder
except as outlined in Exhibit N-4. To the knowledge of the particular
Seller who owns the portion of the Project encumbered by such Lease, all
tenants who have requested audits and have not completed such audits and/or
have outstanding audit claims are listed on Exhibit N-6. For purposes of
this Section 10.01(e)(iv) the term "Lease" does not include licenses and
concession agreements which have fixed terms of less than six (6) months or
storage agreements.
(f With respect to the Operating Agreements encumbering the
portion of the Project owned by such Seller, all as identified on
Exhibit K-2:
(i Exhibit K-2 annexed hereto is a true, correct and
complete list in all material respects of all documents which comprise all
of the Operating Agreements, setting forth the date of each such Operating
Agreement and each amendment or supplement thereto and the names of the
parties thereto;
(ii True, correct and complete copies of the Operating
Agreements and all amendments and supplements thereto have heretofore been
made available and/or delivered to Purchaser for review;
(iii Each Operating Agreement is in full force and
effect as of the date hereof;
(iv None of the Operating Agreements have been
modified, amended or supplemented (whether orally or in writing) in any
material respect except as set forth in Exhibit K-2; and
(v Seller is not in default under any Operating
Agreement and Seller has received no written notice from any party to an
Operating Agreement which is still in effect (x) that Seller has defaulted
in performing any of its obligations under such Operating Agreement or (y)
that such party is entitled to any reduction in, refund of or counterclaim
or offset against, or is otherwise disputing, any Rents or other sums paid,
payable or to become payable thereunder by such party or is entitled to
cancel or terminate such Operating Agreement or to be released of any of
its material obligations thereunder, except as set forth in Exhibit K-2.
Except as set forth on Exhibit K-2, to the knowledge of the particular
Seller who owns the portion of the Project encumbered by such Operating
Agreement, no material default exists under any Operating Agreement on the
part of the other parties thereto.
(g With respect to the Other Agreements encumbering the
portion of the Project owned by the particular Seller:
(i Exhibit K-3 annexed hereto is a true, correct and
complete list in all material respects as of the date hereof of all Other
Agreements, setting forth, with respect to such Other Agreements, the date
thereof and of each amendment or supplement thereto, the name of each party
thereto and a brief description of the services provided thereunder or
property covered thereby. Except as specifically identified in
Exhibit K-3, each Other Agreement can be terminated by Purchaser on not
more than thirty (30) days' notice without penalty;
(ii True, correct and complete copies of the Other
Agreements, and all amendments and supplements thereto, have heretofore
been made available and/or delivered to Purchaser for review;
(iii Each of the Other Agreements is in full force and
effect on the date hereof, and Seller is not in default under any Other
Agreement and Seller has received no written notice from any party to any
Other Agreement which is still outstanding that Seller has defaulted in
performing any of its obligations under such Other Agreement, except as set
forth in Exhibit K-3. None of the Other Agreements listed on Exhibit K-3
has heretofore been amended or supplemented (whether orally or in writing)
in all material respects, except as set forth on Exhibit K-3; and
(iv None of the Other Agreements are binding on the
Hotels. There are no service agreements to which Seller is a party that
are binding on the landlord of the Hotels.
(h To Seller's knowledge, there is no condemnation
proceeding pending with regard to all or any part of the Project and there
is no such proceeding threatened or contemplated by any governmental
authority.
(i Seller has not received written notice from any
governmental agency or authority of any violation of building, health,
safety, pollution control, fire or similar law, ordinance, order or
regulation respecting the Project which has not heretofore been complied
with.
(j There are no pending litigations or other proceedings
against Seller affecting the Project or any other portion of the Project
conveyed hereunder in respect of which Seller has been served with process
or otherwise received written notice except for (i) claims for death,
personal injury, property damage or worker's compensation for which the
insurance carrier has been notified on a timely basis and which are
adequately covered by valid and binding insurance and (ii) other
litigations or proceedings, all as shown on Exhibit S annexed hereto.
Seller has no knowledge of any threatened litigation or proceedings against
Seller affecting the Project except litigation of the nature described in
clause (i) above.
(k Seller is not a "foreign person" as defined in the
Federal Foreign Investment in Real Property Tax Act of 1980 and the 1984
Tax Reform Act, as amended.
(l The 1998 audited statements of cash flow prepared by
Xxxxxx Xxxxxxxx L.L.P. previously delivered by Sellers to Purchaser and the
1999 financial operating statements identified in Exhibit V hereto
accurately and correctly reflect in all material respects the operation of
the Project for the periods covered thereby.
(m No Seller has filed any assignments for the benefit of
creditors, insolvency, bankruptcy or reorganization proceedings and no such
proceedings have been filed against any Seller. No Seller has commenced
any dissolution proceedings.
(n Seller has no employees.
(o Seller's rights under this Agreement and Project do not
constitute plan assets subject to Title I of the Employee Retirement Income
Security Act of 1974 within the meaning of 29 C.F. R. 2510.3-101.
(p There are no leasing brokerage agreements, leasing
commission agreements or other agreements providing for the payment of any
amounts for leasing activities with respect to the Project for leases
executed prior to the Effective Date except as set forth on Exhibit U-2
and there are no leasing commissions which could become payable by the
owner of the Project except as set forth on Exhibit U-2 and U-3. There are
no Tenant Inducement Costs which may become due except as expressly set
forth in this Agreement.
(q Seller has obtained or will have obtained as of the
closing, all consents and approvals required in order for it to consummate
the sales and transfers and other transactions contemplated hereby
(including any consents to assignment of the Other Agreements).
(r) The persons having the knowledge that is most relevant to
the transactions contemplated herein are Xxxxx X. Xxxxx, Xxxxxx X. XxXxxxx,
Xxx Xxxxx XxXxxxxx, Xxxx Xxxxxxxx and Xxxxx Xxxx.
(s) There are no pending real estate tax appeals relating to
the Project or, to the knowledge of Seller, any tax refunds owed with
respect to the Project.
(t) The Personal Property constitutes all of the personal
property used by Sellers to operate the Project.
(u) Sellers do not hold any liquor license with respect to
the Project; such liquor licenses are held directly by Westin, or other
tenants serving alcoholic beverages on their respective premises, as the
case may be.
(v) There is no escrow account or other account available to
Sellers, and to Sellers' knowledge, no such account exists with respect to
monies payable by The University Club to GL in the event that The
University Club does not expend the requisite amounts for capital
improvements set forth in its lease(s).
(w) Seller is not in default under the WT Lease.
SECTION 10.2.A. Representations and Warranties of Urban. Each of
the entities comprising Urban makes the following representations and
warranties and agrees that Sellers' obligations under this Agreement are
conditioned upon the truth and accuracy of such representations and
warranties in all material respects, both as of this date and as of the
date of Closing:
(a Each of the entities comprising Urban is a limited
partnership organized, existing and in good standing under the laws of the
State of Delaware and has all power and authority to conduct the business
of the Project and to enter into and perform its obligations hereunder
under the laws of the State of Delaware.
(b The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly
authorized by all necessary parties and no other proceedings on the part of
any of the entities comprising Urban are necessary in order to permit them
to consummate the transaction contemplated hereby. This Agreement has been
duly executed and delivered by each of the entities comprising Urban and
(assuming valid execution and delivery by the Sellers) is a legal, valid
and binding obligation of each of the entities comprising Urban enforceable
against them in accordance with its terms.
(c None of the entities comprising Urban is a Hotel Company.
At Closing, Urban shall also represent and warrant that it is qualified to
transact business in the State of Texas.
SECTION 10.2.B. Representations and Warranties of Xxxxxx. Each of
the entities comprising Xxxxxx makes the following representations and
warranties and agrees that Sellers' obligations under this Agreement are
conditioned upon the truth and accuracy of such representations and
warranties in all material respects, both as of this date and as of the
date of Closing:
(a Each of the entities comprising Xxxxxx is a limited
partnership organized, existing and in good standing under the laws of the
State of Delaware and has all power and authority to conduct the business
of the Project and to enter into and perform its obligations hereunder
under the laws of the State of Delaware and the State of Texas.
(b The execution and delivery of this Agreement and the
consummation of the transaction contemplated hereby have been duly
authorized by all necessary parties and no other proceedings on the part of
any of the entities comprising Xxxxxx are necessary in order to permit them
to consummate the transaction contemplated hereby. This Agreement has been
duly executed and delivered by each of the entities comprising Xxxxxx and
(assuming valid execution and delivery by the Sellers) is a legal, valid
and binding obligation of each of the entities comprising Xxxxxx
enforceable against them in accordance with its terms.
(c None of the entities comprising Xxxxxx is a Hotel
Company.
At Closing, Xxxxxx shall also represent and warrant that it is qualified to
transact business in the State of Texas.
SECTION 10.3. No Implied Representations. PURCHASER ACKNOWLEDGES
THAT, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DOCUMENTS
AND INSTRUMENTS DELIVERED BY SELLERS TO PURCHASER AT CLOSING, NEITHER
SELLERS NOR ANY AGENT OR REPRESENTATIVE OR PURPORTED AGENT OR
REPRESENTATIVE OF SELLERS HAS MADE, AND SELLERS ARE NOT LIABLE FOR OR BOUND
IN ANY MANNER BY, ANY EXPRESS OR IMPLIED WARRANTIES, GUARANTEES, PROMISES,
STATEMENTS, INDUCEMENTS, REPRESENTATIONS OR INFORMATION (INCLUDING ANY
INFORMATION SET FORTH IN OFFERING MATERIALS HERETOFORE FURNISHED TO
PURCHASER) PERTAINING TO THE PROJECT OR ANY PART THEREOF, THE PHYSICAL
CONDITION THEREOF, ENVIRONMENTAL MATTERS, INCOME, EXPENSES OR OPERATION
THEREOF OR OF THE PERSONAL PROPERTY, THE USES WHICH CAN BE LAWFULLY MADE OF
THE SAME UNDER APPLICABLE ZONING OR OTHER LAWS OR ANY OTHER MATTER OR THING
WITH RESPECT THERETO, INCLUDING, WITHOUT LIMITATION, ANY EXISTING OR
PROSPECTIVE LEASES, OPERATING AGREEMENTS OR OTHER AGREEMENTS. WITHOUT
LIMITING THE FOREGOING, PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT AND IN THE DOCUMENTS AND INSTRUMENTS
DELIVERED BY SELLERS AT THE CLOSING, SELLERS ARE NOT LIABLE FOR OR BOUND BY
(AND PURCHASER HAS NOT RELIED UPON) ANY VERBAL OR WRITTEN STATEMENTS,
REPRESENTATIONS, OFFERING MATERIALS OR ANY OTHER INFORMATION RESPECTING THE
PROJECT FURNISHED BY SELLERS OR ANY BROKER, EMPLOYEE, AGENT, CONSULTANT OR
OTHER PERSON REPRESENTING OR PURPORTEDLY REPRESENTING SELLERS. NOTHING
CONTAINED IN THIS SECTION 10.03 SHALL BE DEEMED TO IMPAIR, LIMIT OR
OTHERWISE AFFECT PURCHASER'S RIGHTS UNDER THIS AGREEMENT OR THE DOCUMENTS
DELIVERED PURSUANT HERETO, IN RESPECT OF THE REPRESENTATIONS, WARRANTIES
AND COVENANTS OF SELLERS SET FORTH IN THIS AGREEMENT AND THE OTHER
PROVISIONS HEREOF BINDING UPON SELLERS.
SECTION 10.4. "As-Is" Purchase. PURCHASER REPRESENTS THAT IT HAS
INSPECTED THE PROJECT, THE PHYSICAL AND ENVIRONMENTAL CONDITION AND THE
USES THEREOF AND THE FIXTURES, EQUIPMENT AND PERSONAL PROPERTY INCLUDED IN
THIS SALE TO ITS SATISFACTION, THAT IT HAS INDEPENDENTLY INVESTIGATED,
ANALYZED AND APPRAISED THE VALUE AND PROFITABILITY THEREOF, THE
CREDITWORTHINESS OF TENANTS AND THE PRESENCE OF HAZARDOUS MATERIALS, IF
ANY, IN OR ON THE PROJECT, THAT IT HAS RECEIVED COPIES OF AND/OR HAS
REVIEWED THE LEASES, THE OPERATING AGREEMENTS, THE OTHER AGREEMENTS AND ALL
OTHER DOCUMENTS REFERRED TO HEREIN, THAT IT IS THOROUGHLY ACQUAINTED WITH
ALL OF THE FOREGOING AND THAT PURCHASER, IN PURCHASING THE PROJECT, WILL
RELY UPON ITS OWN INVESTIGATIONS, ANALYSES, STUDIES AND APPRAISALS AND NOT
UPON ANY INFORMATION PROVIDED TO PURCHASER BY OR ON BEHALF OF SELLERS WITH
RESPECT THERETO (EXCEPT IN EACH CASE TO THE EXTENT COVERED BY ANY
WARRANTIES OR REPRESENTATIONS OF SELLERS SET FORTH IN THIS AGREEMENT, A
SELLER ESTOPPEL OR IN ANY OTHER DOCUMENT OR INSTRUMENT DELIVERED BY SELLERS
IN CONNECTION WITH THE CLOSING). AS A MATERIAL PART OF THE CONSIDERATION
FOR THIS AGREEMENT, PURCHASER AGREES TO ACCEPT THE PROJECT "AS IS," "WITH
ALL FAULTS" AND IN ITS CONDITION AS OF THE CLOSING DATE, WITH REASONABLE
WEAR AND TEAR AND DAMAGE BY FIRE OR OTHER CASUALTY (SUBJECT TO THE
PROVISIONS OF ARTICLE VII) BETWEEN THE DATE HEREOF AND THE CLOSING DATE
EXCEPTED, AND PURCHASER SHALL ASSUME THE RISK THAT ADVERSE MATTERS,
INCLUDING, BUT NOT LIMITED TO, CONSTRUCTION DEFECTS AND ADVERSE PHYSICAL
AND ENVIRONMENTAL CONDITIONS MAY NOT HAVE BEEN REVEALED BY PURCHASER'S
INVESTIGATIONS. PURCHASER, UPON CLOSING, SHALL BE DEEMED TO HAVE WAIVED,
RELINQUISHED AND RELEASED SELLERS FROM AND AGAINST ANY AND ALL CLAIMS,
DEMANDS, CAUSES OF ACTION, LOSSES, DAMAGES, LIABILITIES, COSTS AND EXPENSES
(INCLUDING ATTORNEYS, FEES AND COURT COSTS) OF ANY AND EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, WHICH PURCHASER MIGHT HAVE ASSERTED OR ALLEGED
AGAINST SELLERS BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT
CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF APPLICABLE LAWS
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LAWS) AND ANY AND ALL OTHER
ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS WITH RESPECT TO THE
PROJECT (INCLUDING CONDITION OF THE PERSONAL PROPERTY, HABITABILITY,
MERCHANTABILITY, MARKETABILITY, FINANCEABILITY OR FITNESS FOR A PARTICULAR
PURPOSE), SUBJECT, HOWEVER, TO PURCHASER'S RIGHTS AND REMEDIES PROVIDED FOR
IN THIS AGREEMENT IN THE EVENT OF THE BREACH OF ANY OF SELLERS' WARRANTIES,
REPRESENTATIONS OR COVENANTS CONTAINED HEREIN, IN SELLERS' ESTOPPEL
CERTIFICATE OR IN ANY OTHER DOCUMENT OR INSTRUMENT DELIVERED BY ANY SELLER
IN CONNECTION WITH THE CLOSING. PURCHASER WILL RECONFIRM THE MATTERS SET
FORTH IN SECTIONS 10.03 AND 10.04 IN A CERTIFICATE DATED AS OF THE CLOSING
DATE.
SECTION 10.5. No Independent Investigation. All representations and
warranties made herein by Sellers which are based on Sellers' knowledge are
made, and are hereby acknowledged by the Purchaser to be made, without
independent investigation regarding the facts contained therein, other than
due inquiry of the Managing Agent for the portion of the Project involved,
and are otherwise limited as provided in the definition of "knowledge" or
"notice."
SECTION 10.6. Effect of Estoppels. If, prior to the Closing, a
Tenant or any other party provides to Purchaser an estoppel letter
addressed to Purchaser and delivered in response to a request made pursuant
to this Agreement which sets forth information with respect to any item as
to which any Seller has made a representation or warranty or is otherwise
set forth in the Seller Estoppel, then such Seller's representation and
warranty in respect of such information shall be deemed modified at Closing
to the extent inconsistent with such information.
SECTION 10.7. Survival of Seller's Warranties, etc. (a) All of
Sellers' representations and warranties contained in this Article X as
remade as of the Closing as provided in Section 10.07(c) and subject to any
modifications thereof made in any certificate provided for in said Section
or deemed made pursuant to Section 10.06, and all certifications,
representations and warranties made by any Seller in the Seller Estoppel,
shall survive the Closing and all deliveries herein provided; provided,
however, that except for the representations and warranties set forth in
subsection (a) through (d) and subsection (k) of Section 10.01 hereof
(which representations and warranties shall survive indefinitely), all
certifications, representations and warranties set forth in this Article X
shall survive only until one (1) year after the date of the Closing and all
certifications, representations and warranties made in any Seller Estoppel
shall survive only until two (2) years after the Closing Date; provided,
however, that a Seller's liability for any breach of such warranties,
representations and certifications shall not expire as to any breach or
alleged breach thereof if notice of such breach or alleged breach is given
by Purchaser to such Seller prior to one (1) year (or two years in the case
of a Seller Estoppel) after the date of the Closing and, if such notice is
given, legal proceedings are instituted in respect of such breach or
alleged breach within one year after such notice is given.
(b) Notwithstanding anything to the contrary set forth in
this Agreement, the post-Closing liability of Sellers, collectively, to
Purchaser for breach of any warranty and representation set forth in this
Article X or for breach by any Seller of any of its agreements set forth in
Article VI (and expressly excluding the liability of GL under the Agreement
re: Office Tower) shall be subject to the limitations set forth on Exhibit
GG attached hereto.
(c) All of Seller's representations and warranties set forth
in this Article X shall be deemed to have been remade on and as of the
Closing Date, subject, however, to the provisions of Section 10.06 and
facts disclosed on the updated Exhibits to this Agreement which are to be
delivered by Seller to Purchaser at the Closing pursuant to Article V
(which updated Exhibits, upon their delivery by Seller to Purchaser, shall
for all purposes of this Agreement constitute the indicated Exhibit or a
part thereof as of the Closing Date); provided, however, that if any matter
or event shall have occurred between the date hereof and the date of the
Closing which makes any warranty or representation made on the Effective
Date by Seller untrue in any material respect as of the Effective Date or
Closing Date, Seller shall have the right to deliver a certificate to
Purchaser at or prior to the Closing which discloses such matter or event,
and if Seller does so, Purchaser shall have the rights set forth in Section
4.02, but if Purchaser chooses to proceed to Closing, Seller shall not be
liable to Purchaser following the Closing for the breach of the warranty or
representation in question which results from the occurrence of such matter
or thing.
(d) Notwithstanding anything to the contrary set forth in
this Article X or elsewhere in this Agreement, if prior to the Closing
Purchaser has or obtains knowledge that any of Sellers' warranties or
representations set forth in this Article X or Sellers' certifications,
warranties or representations made in any Seller Estoppel, is untrue in any
respect, and Purchaser nevertheless proceeds with the Closing, then the
breach by any Seller of the warranties, representations or certifications
as to which Purchaser shall have such knowledge shall automatically be
deemed waived by Purchaser and no Seller shall have any liability to
Purchaser or its successors or assigns in respect thereof. For the
purposes of this Section 10.07(d), Purchaser shall be deemed to have or to
have obtained knowledge of any such matter or thing only if such matter or
thing (i) is set forth in any Lease, Operating Agreements, Other Agreement
or estoppel certificate which (or a copy of which) is stated in this
Agreement to have been delivered to and/or made available for review by
Purchaser, (ii) was contained in any written studies or reports furnished
to Purchaser by any third party consultants retained by it or (iii) was
actually known (without independent investigation) by, or was contained in
a written notice received by Xxxxxx Xxxxx or Xxxx Xxxx.
SECTION 10.8. Surviving Covenants. The provisions of this Article X
shall be Surviving Covenants.
ARTICLE XI
INDEMNIFICATION; JOINT AND SEVERAL LIABILITY
--------------------------------------------
SECTION 11.1. Seller's Indemnification. Each Seller, as to the
portion of the Project owned by such Seller, hereby indemnifies Purchaser
(and its affiliates) for, and defends and holds Purchaser (and its
affiliates) harmless from and against, all costs, losses, damages,
penalties, liabilities and expenses, including without limitation
reasonable attorneys, fees and disbursements (collectively, "Losses")
actually imposed upon or incurred by Purchaser (or any affiliate thereof)
by reason of claims accruing prior to the Closing Date that are made by any
person or entity and are relating to the portion of the Project owned by
such Seller. The documents delivered by the parties at Closing (except for
the Agreement re: Office Tower) shall not supersede, alter or modify the
indemnification provisions set forth in this Section 11.01.
SECTION 11.2. Purchaser's Indemnification. Purchaser hereby
indemnifies each Seller (and its affiliates) for, and defends and holds
each Seller (and its affiliates) harmless from and against, all Losses
actually imposed upon or incurred by such Seller (or any affiliate thereof)
by reason of claims accruing on or after the Closing Date made by any
person or entity relating to the Project. The documents delivered by the
parties at Closing (except for the Agreement re: Office Tower) shall not
supersede, alter or modify the indemnification provisions set forth in this
Section 11.02.
SECTION 11.3. Joint and Several Liability. Notwithstanding anything
herein contained to the contrary, each Seller shall be jointly and
severally liable with each other Seller for performance of the obligations
hereunder and for breach of any representation and warranty, and each
Purchaser shall be jointly and severally liable with each other Purchaser
for the performance of the obligations hereunder and for breach of any
representation or warranty.
SECTION 11.4. Surviving Covenants. The provisions of this Article
XI shall be Surviving Covenants.
SECTION 11.5. No Limitations. Except as specifically limited
herein, nothing contained in this Article XI is in any way intended to
limit the rights of Sellers or Purchaser to pursue any remedies as may
exist at law or in equity against any unrelated third parties with respect
to any liabilities covered by this Article XI.
ARTICLE XII
INSPECTION PERIOD
-----------------
SECTION 12.1. Inspections.
(a Sellers have delivered or otherwise made available to
Purchaser copies of the following documents relating to the Project:
(i the most current survey or surveys;
(ii the most recent title insurance policy or policies
or title commitments, including copies of exception documents;
(iii all Leases, Operating Agreements and Other
Agreements which will be Purchaser's obligation after the Closing;
(iv the most recent tax and utility bills and appraisal
or valuation reports submitted in connection with real estate tax
assessment challenges;
(v to the extent available and in Sellers' possession,
building permits, certificates of occupancy or other documentation
indicative of compliance with applicable governmental requirements;
(vi operating, easement and cost sharing agreements to
which Sellers are a party;
(vii to the extent available and in Sellers' possession,
permits, licenses or other agreements relating to the operation of the
Project and the right to undertake additional construction;
(viii Westin's 1999 Budget and Marketing Plan for
the Hotels to the extent available and in Sellers' possession;
(ix the 1997, 1998 and 1999 year-to-date operating
statements for the Hotels, to the extent available and in Sellers'
possession;
(x rent roll as of September 14, 1999;
(xi capital expenditure history for 1997, 1998 and 1999
year-to-date and capital expenditure budget for 1999;
(xii aged receivables report as of September 14, 1999;
(xiii environmental reports listed at Exhibit AA;
(xiv plans and specifications for the Project;
(xv schedule of outstanding insurance claims as of
September 14, 1999; and
(xvi 1997 and 1998 audited statements of cash flow and
unaudited operating statements for the retail and office portions of the
Project.
(b Purchaser has had until the date hereof (the "Inspection
Period") to inspect the Project and to review the materials listed above
and all other relevant documentation. During the Inspection Period and
thereafter through Closing, Purchaser and its agents, engineers, surveyors,
appraisers, auditors and other representatives have had the right to enter
upon the Project to inspect, examine, survey, obtain engineering
inspections, test, appraise and otherwise do that which, in the opinion of
Purchaser, was necessary to determine the suitability of the Project for
the uses intended by Purchaser (including, without limitation, inspect,
review and copy any and all documents in the possession or control of
Seller, its agents, contractors or employees, and which pertain to the
construction, ownership, use, occupancy or operation of the Project or any
part thereof). Seller has cooperated with Purchaser in arranging meetings
with Tenants and others. During the Inspection Period, and thereafter
through Closing, Seller shall make all of Seller's books, files and records
relating in any way to the Project and which are relevant to Purchaser's
acquisition of the Project, excluding the working papers of Seller's
independent auditors relating to the operation of the Project, available
for examination by Purchaser and Purchaser's agents and representatives,
who shall have the right to make copies of such books, files and records
and to extract therefrom such information as they may desire, and who shall
have the right to audit and have certified all income and expenses, profits
and losses, and operational results of the Project for the three (3)
calendar years prior to the date of Closing and for the current calendar
year to date. Sellers shall provide such cooperation as is customarily
required in connection with any such audit requested by Purchaser prior to
Closing, or any such audit required by Purchaser after Closing in order to
enable Purchaser to comply with any financial reporting requirements
applicable to Purchaser.
(c) Purchaser has reviewed the following surveys: (i) survey of
4.711 acres (Galleria 4) dated September 14, 1999; (ii) survey of
Parcels I, II and III dated May 1, 1998, last revised August 9, 1999;
(iii) survey of Galleria I, Galleria II and Galleria III dated May 21,
1997, last revised September 15, 1999; and (iv) survey of 3.799 acres dated
May 1, 1998, last revised June 25, 1999 (the "Surveys") and the Owner Title
Commitment. Purchaser has no objections to the Surveys or Owner Title
Commitment, except as set forth on Exhibit T.
ARTICLE XIII
ASSIGNMENT
----------
Upon written notice to Sellers received a minimum of ten (10)
business days prior to the Closing Date, each of the entities comprising
Urban and Xxxxxx shall be entitled to assign this Agreement and its rights
and obligations hereunder in whole (but not in part) to any one Affiliate
thereof, respectively, provided that the Affiliate is not a Hotel Company.
Except as provided in the preceding sentence, Purchaser must obtain the
written consent of Seller prior to any assignment of this Agreement.
ARTICLE XIV
NOTICE
------
All notices hereunder or required by law shall be (i) sent via United
States Mail, postage prepaid, certified mail, return receipt requested,
(ii) via any nationally recognized commercial overnight carrier with
provisions for receipt or via personal delivery, (iii) personally delivered
or (iv) sent by facsimile machine which automatically generates a
transmission report that states the date and time of the transmission, the
length of the document transmitted and the telephone number of the
recipient's facsimile machine (with a copy thereof sent in accordance with
clause (i) or (ii) on the same business day). All notices shall be
addressed to the parties hereto at their respective addresses set forth
below or as they have theretofore specified by written notice delivered in
accordance herewith:
Purchaser:
Urban Shopping Centers, Inc.
000 Xxxxx Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxx
Xxxxxxx Xxxxxxx
Facsimile No.: 312/915-2001
and
Xxxxxx Street Capital, L.L.C.
000 Xxxxx Xxxxxxxx Xxxxxx; Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Facsimile No.: 312/915-2881
with a copy to:
Pircher, Xxxxxxx & Xxxxx
1999 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile No.: 310/201-8902
and a copy to:
Pircher, Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxxxx Xxxxxx; Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile No.: 312/915-3348
Sellers:
Xxxxx Interests Limited Partnership
0000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile No.: 713/966-2053
with a copy to:
Xxxxx & Xxxxx, L.L.P.
000 Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxx
Facsimile No.: 713/229-1522
Delivery will be deemed complete upon (i) receipt following deposit
in U.S. Mail with respect to mailed notices, (ii) one business day
following deposit with a nationally recognized commercial overnight carrier
with respect to notices transmitted in that manner, (iii) the date of
transmission with respect to facsimile delivery, if so transmitted before
5:30 p.m. (local time of the recipient) on a business day, or on the next
business day, if so transmitted on or after 5:30 p.m. (local time of the
recipient) on a business day or if transmitted on a day other than a
business day. In all events, notice shall be deemed complete upon actual
receipt or refusal to accept delivery. Any notice that is required or
permitted to be given by either party may be given by such party or its
legal counsel identified in this notice provision, who are hereby
authorized to do so on the party's behalf.
ARTICLE XV
EXPENSES
--------
At Closing, Seller shall credit Purchaser with the cost of one Texas
standard owner's title insurance policy (without modification or
endorsement) covering the entire Project (excluding any premiums or costs
that may be incurred in connection with any mortgage financing or the
creation of any condominium association). Such credit may be applied, at
Seller's election, to the cost of an insurance policy issued in connection
with the creation of a condominium association by Purchaser concurrently
with the Closing. Sellers shall also pay their own attorney's fees, the
cost of a Category 1A, Condition II survey, all recording fees for the
deeds and other documents to be recorded by Sellers pursuant hereto and all
currently accrued and unpaid impact fees, capital recovery charges,
transfer fees and other fees and charges relating to the Utility Capacity.
Purchaser shall pay its due diligence expenses, including, but not limited
to, the cost of any environmental or engineering studies, its own
attorney's fees and any title policy premium or other costs (including the
cost of modification of the survey exception in the owner's title policy to
read "shortages in area") to the extent in excess of the amount credited by
Seller, and the cost of upgrading the surveys from a Category 1A, Condition
II Survey to an ALTA survey in accordance with Exhibit T.
ARTICLE XVI
MISCELLANEOUS
-------------
SECTION 16.1. Successors and Assigns. All the terms and conditions
of this Agreement are hereby made binding upon the executors, heirs,
administrators, successors and permitted assigns of both parties hereto.
SECTION 16.2. Gender. Words of any gender used in this Agreement
shall be held and construed to include, any other gender, and words in the
singular number shall be held to include the plural, and vice versa, unless
the context requires otherwise.
SECTION 16.3. Captions. The captions in this Agreement are inserted
only for the purpose of convenient reference and in no way define, limit or
prescribe the scope or intent of this Agreement or any part hereof.
SECTION 16.4. Construction. No provision of this Agreement shall be
construed by any Court or other judicial authority against any party hereto
by reason of such party's being deemed to have drafted or structured such
provisions.
SECTION 16.5. Entire Agreement. This Agreement constitutes the
entire contract between the parties hereto and there are no other oral or
written promises, conditions, representations, understandings or terms of
any kind as conditions or inducements to the execution hereof and none have
been relied upon by either-party.
SECTION 16.6. Original Document. This Agreement my be executed by
both parties in counterparts in which event each shall be deemed an
original.
SECTION 16.7. Governing Law. This Agreement shall be construed, and
the rights and obligations of Seller and Purchaser hereunder, shall be
determined in accordance with the laws of the State of Texas.
SECTION 16.8. No Third Party Beneficiary. The parties hereto do not
intend to confer any benefit hereunder on any person, firm, corporation or
other entity other than the parties hereto and their permitted assigns.
SECTION 16.9. Exculpation. Subject to Section 10.07(e), all persons
dealing with Sellers shall look solely to the assets of the general or
limited partnership constituting Sellers hereunder for the payment of any
claims hereunder or for the performance hereof. In no event whatsoever
shall recourse be had or liability asserted against any Sellers' partners
or employees or agents or any directors, officers, employees, shareholders
or agents of any partner of Sellers. All persons dealing with Purchasers
shall look solely to the assets of the limited partnerships constituting
Purchasers hereunder for the payment of any claims hereunder or for the
performance hereof. In no event whatsoever shall recourse be had or
liability asserted against any Purchasers' partners or employees or agents
or any directors, officers, employees, shareholders or agents of any
partner of Purchasers.
SECTION 16.10. No Recording: Confidentiality. (a) The parties agree
that neither this Agreement nor any memorandum or notice hereof shall be
recorded or filed in any public records. If Purchaser violates the terms
of this Article, Sellers, in addition to any other rights or remedies they
may have, may immediately terminate this Agreement by giving notice to
Purchaser of its election so to do.
(b) Subject to disclosure obligations required by law, none
of Sellers, Purchaser and their respective affiliates shall issue any press
release or otherwise make public any information with respect to this
Agreement or the transaction contemplated hereby prior to the Closing Date
without the prior written consent of the other party. None of Sellers,
Purchaser and their respective affiliates shall discuss or disclose the
existence of the transaction contemplated hereby, the terms of this
Agreement or the identity of the parties hereto with any other person,
except for those employees, prospective lenders, advisors, attorneys,
consultants and other professionals required to implement the terms of this
Agreement or to assist in Purchaser's due diligence and who have agreed to
maintain the confidentiality of the transaction and the information they
receive, and except to the extent required by law.
SECTION 16.11. Waiver of Trial by Jury. Seller and Purchaser waive
any right to trial by jury of any claim arising under or with respect to
this Agreement, whether now existing or hereafter arising. Seller and
Purchaser hereby agree that any such claim shall be decided by a court
trial without a jury and that any party hereto may file an original
counterpart or a copy of this Section with any court as written evidence of
the consent of the other party hereto to waiver of its right to trial by
jury.
SECTION 16.12. Post-Closing Arbitration. Any dispute arising out of
or in connection with Surviving Covenants following Closing shall be
exclusively processed as follows. First, the dispute shall be discussed by
the parties thereto in an attempt to reach an amicable solution. If such
attempt fails within ninety (90) days from the first written notice by one
party to the other party that a dispute exists, either party may institute
arbitration proceedings in accordance with the following provisions:
(a) The dispute may be submitted to binding arbitration in
accordance with the rules of the American Arbitration Association
applicable to commercial arbitrations (the "Rules") in effect at the time
of the dispute. The proceedings will be held in Houston, Texas, unless the
parties agree otherwise. The dispute shall be arbitrated in accordance
with the substantive laws of Texas.
(b) The number of arbitrators shall be three (3). The three
(3) member arbitration panel shall select a chairman. The parties and the
arbitrators shall hold the proceedings and any confidential information in
confidence. Notwithstanding the foregoing, in any arbitration involving a
dispute arising out of Article VI matters, the arbitrator shall be Xxxxxx
Xxxxxxxx & Company.
(c) Prompt and cost effective resolution of the dispute is
important to the parties. Discovery and other procedures shall be limited
and streamlined to allow for prompt resolution of the dispute.
(d) Pending resolution of any dispute between the parties,
whether discussed, mediated or arbitrated, the parties shall continue to
perform their respective obligations under this Agreement.
(e) The parties to the arbitration shall each bear half
(1/2) of the cost and expenses of the arbitrators.
(f) The provisions of Article VI constitute a Surviving
Covenant.
SECTION 16.13. Further Assurances. Each party agrees to execute,
acknowledge and deliver such further instruments and documents, and do all
such other acts and things as may be required by law, or as may be required
to carry out the purposes and intent of this Agreement. The provisions of
this Section 16.13 constitute a Surviving Covenant.
SECTION 16.14. Exclusivity. For so long as this Agreement is in
effect, Sellers shall not either directly or indirectly, through its agents
or representatives, show the Project or entertain negotiations for or
accept any offers for the purchase of the Project or any part thereof from
any other party.
SECTION 16.15. Non-Business Days. Whenever action must be taken
(including the giving of notice or the delivery of documents) under this
Agreement during a certain period of time (or by a particular date) that
ends (or occurs) on a non-Business Day, then such period (or date) shall be
extended until the immediately following Business Day.
SECTION 16.16. Incorporation of Exhibits. All exhibits referenced
in this Agreement are hereby incorporated herein as if a part of this
Agreement. Exhibits A through DD shall be deemed to be the exhibits
attached to the Original Agreement without the necessity of attaching them
to this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
SELLERS:
GALLERIA LIMITED
By: Galleria Inc., its general partner
By:
------------------------------
Xxxxx X. Xxxxx
Vice President
POST OAK ASSOCIATES LIMITED
By: GDHI Limited Partnership, its general partner
By: Hines Consolidated Investments, Inc.,
its general partner
By:
------------------------------
Xxxxx X. Xxxxx
Executive Vice President
GDHI LIMITED PARTNERSHIP
By: Hines Consolidated Investments, Inc.,
its general partner
By:
------------------------------
Xxxxx X. Xxxxx
Executive Vice President
POST OAK ASSOCIATES III, LIMITED
By: GDHI Limited Partnership, its general partner
By: Hines Consolidated Investments, Inc.,
its general partner
By:
------------------------------
Xxxxx X. Xxxxx
Executive Vice President
HINES GROUP II LIMITED PARTNERSHIP
By: GDHI Limited Partnership, its general partner
By: Hines Consolidated Investments, Inc.,
its general partner
By:
------------------------------
Xxxxx X. Xxxxx
Executive Vice President
PURCHASERS:
HG SHOPPING CENTERS, L.P.,
a Delaware limited partnership
By: Galleria Partners LLC,
a Delaware limited liability company,
its general partner
By: USC Houston, Inc.,
a Delaware corporation,
its managing member
By:
--------------------
Name: Xxxx Xxxx
Its: Executive Vice President
Tax Identification Number: 00-0000000
SOUTH ALABAMA DEVELOPMENT, L.P.,
a Delaware limited partnership
By: Galleria Developers LLC,
a Delaware limited liability company,
its general partner
By: USC Developers, Inc.,
a Delaware corporation,
its managing member
By:
--------------------
Name: Xxxx Xxxx
Its: Executive Vice President
Tax Identification Number: 00-0000000
XXXXXX XXXXXXX GALLERIA HOTELS, L.P.,
a Delaware limited partnership
By: Xxxxxx Xxxxxxx Galleria Holdings, L.L.C.,
its general partner
By: Xxxxxx Street Real Estate
Fund II, L.P., a managing member
By: Xxxxxx Street Managers II, L.P.,
its general partner
By: WSC Managers II, Inc.,
its general partner
By:
--------------------
Name: Xxxxxxx X. Xxxxxx
Its: Authorized Signatory
Tax Identification Number: 00-0000000
XXXXXX XXXXXXX GALLERIA OFFICE, L.P.,
a Delaware limited partnership
By: Xxxxxx Xxxxxxx Galleria Office Holdings,
L.L.C., its general partner
By: Xxxxxx Street Real Estate Fund II,
L.P., a managing member
By: Xxxxxx Street Managers II, L.P.,
its general partner
By: WSC Managers II, Inc.,
its general partner
By:
--------------------
Name: Xxxxxxx X. Xxxxxx
Its: Authorized Signatory
Tax Identification Number: 00-0000000
ESCROW AGENT'S JOINDER
----------------------
The undersigned Escrow Agent named in the foregoing Agreement
hereby acknowledges receipt of a fully executed copy of said Agreement and
agrees to hold and disburse the Deposit received by it in accordance with
the terms of the Agreement and perform the duties of Escrow Agent set forth
in the foregoing Agreement. Escrow Agent shall invest the xxxxxxx money in
short term U.S. treasury bonds, commercial paper rated A-1/P-1 or other
obligations of or instruments guaranteed by the U.S. Government, as
directed by Purchaser. While the Escrow Agent holds the Deposit in escrow,
the Escrow Agent hereby agrees, if requested in writing to do so by
Purchaser, (i) to invest the Deposit in a United States Government
repurchase agreement or other financial instrument specified by Purchaser
and (ii) to pay Purchaser promptly upon Purchaser's request all interest
which shall accrue on the Deposit while in escrow and/or so invested.
Date: September 29, 1999 CHARTER TITLE COMPANY,
as Escrow Agent
By:
------------------------------
Xxxxx Xxxx
Executive Vice President
JOINDER
-------
Galleria Inc., a Texas corporation, joins in this Purchase and Sale
Agreement for the purpose of evidencing its agreement to execute the
Trademark and Service Xxxx Agreement at Closing.
GALLERIA INC.
By:
------------------------------
Xxxxx X. Xxxxx
Vice President
