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EXHIBIT 2.11
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT is dated as of November 10, 1999, by and
between THE COMPTROLLER OF THE STATE OF NEW YORK AS TRUSTEE OF THE COMMON
RETIREMENT FUND, ("SELLER"), and GGP/HOMART II L.L.C., a Delaware limited
liability company (the "COMPANY").
RECITALS
WHEREAS, Seller owns 100% of the Stock of Acquiport Five Corporation, a
Delaware corporation, (the "ORIGINAL VENTURE");
WHEREAS, the Original Venture is the owner of the real property commonly
known as Montclair Plaza, Montclair, California ("MONTCLAIR PLAZA") which is
more particularly described on Exhibit A attached hereto, other than the
property owned by the Anchors (as hereinafter defined) at such mall;
WHEREAS, Seller intends to cause the Original Venture to convey fee
title to Montclair Plaza to Montclair Plaza, L.L.C. ("MPLCC"), a Delaware
limited liability company (a wholly owned subsidiary of the Company) together
with all leases, operating agreements, contracts and other assets
WHEREAS, Seller desires to contribute to the capital of the Company by
causing the Seller's Interest (as hereinafter defined) to be transferred to
MPLLC, and the Company desires to acquire such interests in MPLCC.
NOW, THEREFORE, in consideration of the mutual covenants, conditions and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows::
ARTICLE I.
DEFINITIONS
1.1. For purposes of this Agreement, the following terms shall have the
meanings indicated below:
"ADA" shall mean the Americans With Disabilities Act, as amended.
"AFFILIATE" shall mean a Person that directly or indirectly through one
or more intermediaries controls, is controlled by, or is under common control
with the Person specified. The term "control" as used in the immediately
preceding sentence, means (a) the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
controlled entity or (b) the ownership (directly or indirectly) of not less than
50% of the voting stock of a corporation or not less than 50% of the aggregate
legal and equitable interest in a limited liability company, a partnership or
other business entity.
"AGREEMENT" shall mean this Contribution Agreement, as amended or
modified from time to time hereafter in accordance with the terms hereof.
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"ANCHOR" shall mean each Person identified in SCHEDULE 1.1-1.
"ASSUMED LIABILITIES" shall have the meaning set forth in
Section 2.3(a).
"AUDITOR" shall have the meaning set forth in Section 5.2(b).
"BALANCE SHEET SETTLEMENT DATE" shall have the meaning set forth in
Section 5.1(c).
"BOOKS AND RECORDS" shall mean all records, books of account and papers
of the Original Venture relating to the construction, ownership and operations
of the Property, including architect's drawings, blue prints and as-built plans,
maintenance logs, copies of warranties and guaranties, licenses and permits,
instruction books, employee manuals, records and correspondence relating to
insurance claims, financial statements, operating budgets, paper and electronic
media copies of data and other information relating to the Property available
from personal computers, structural, mechanical, geotechnical or other
engineering studies, soil test reports, environmental reports, underground
storage tank reports, feasibility studies, appraisals, ADA surveys or reports,
OSHA asbestos surveys, marketing studies, mall documents and compilations, lease
summaries and originals and/or copies of Leases, the REA and the Contracts and
correspondence related thereto.
"CLOSING" shall have the meaning set forth in Section 4.1.
"CLOSING BALANCE SHEETS" shall have the meaning set forth in
Section 5.1(a).
"CLOSING DATE" shall have the meaning set forth in Section 4.1 .
"CLOSING DOCUMENTS" shall mean the Seller Closing Documents and the
Company Closing Documents, collectively.
"CLOSING NET EQUITY" shall mean, in the case of the Preliminary
Proration Date Balance Sheet or Proration Date Balance Sheet, the excess of the
book value of the assets reflected on such balance sheet over the liabilities
reflected thereon.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMPANY CLOSING DOCUMENTS" shall have the meaning set forth in
Section 4.3.
"CONTRACTS" shall mean all equipment leases and all service, maintenance
and other contracts and concessions that are currently in effect and to which
the Original Venture is a party respecting the use, maintenance, development,
sale or operation of the Property or any portion thereof (but excluding this
Agreement, the Leases, the Permitted Exceptions and the REA) including those
which are listed on SCHEDULE 6.1(I), together with any additions thereto,
modifications thereof or substitutions therefor hereafter entered into in
accordance with the provisions of this Agreement.
"CONTRIBUTION AMOUNT" shall have the meaning set forth in Section 2.2.
"DEFECT" shall mean any Lien, encumbrance, easement, agreement,
restriction, proceeding, lis pendens, notice, encroachment or exception to title
other than a Permitted Exception that materially and adversely affects the title
to or use of the Property.
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"ENVIRONMENTAL LAWS" shall mean all federal, state and local statutes,
ordinances, codes, rules, regulations, orders and decrees regulating, relating
to or imposing liability or standards concerning or in connection with Hazardous
Materials, underground storage tanks or the protection of human health, natural
resources or the environment, as any of the same may be amended from time to
time, including the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. ss.9601 et. seq., as amended by the
Superfund Amendments and Reauthorization Act or any equivalent state or local
laws or ordinances; the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. ss. 6901 et seq., as amended by the Hazardous and Solid Waste Amendments
of 1984, or any equivalent state or local laws or ordinances; the Federal
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. ss.136 et. seq.
or any equivalent state or local laws or ordinances; the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.); the Emergency Planning and
Community Right-to-Know Act ("EPCRA"), 42 U.S.C. ss.11001 et. seq. or any
equivalent state or local laws or ordinances; the Toxic Substance Control Act
("TSCA"), 15 U.S.C. ss.2601 et. seq. or any equivalent state or local laws or
ordinances; the Atomic Energy Act, 42 U.S.C. ss.2011 et. seq., or any equivalent
state or local laws or ordinances; the Clean Water Act (the "Clean Water Act"),
33 U.S.C. ss.1251 et. seq. or any equivalent state or local laws or ordinances;
the Clean Air Act (the "Clean Air Act"), 42 U.S.C. ss.7401 et seq. or any
equivalent state or local laws or ordinances; the Occupational Safety and Health
Act, 29 U.S.C. ss.651 et seq. or any equivalent state or local laws or
ordinances.
"EXISTING INDEBTEDNESS" shall mean the loans listed on Schedule 6.1(X).
"EXISTING INDEBTEDNESS DOCUMENTS" shall have the meaning set forth in
Section 6.1(X).
"EXISTING LENDER" shall mean the holder or holders of the Existing
Indebtedness as specified on Schedule 6.1(X).
"EXISTING MANAGER" shall mean Xxxxxxx Xxxxxxxx.
"EXECUTION DATE" shall mean the date of this Agreement.
"FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 6.1(v).
"GAAP" Shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"GAAS" shall mean Generally Accepted Auditing Standards as promulgated
by the Auditing Standards Division of the American Institute of Certified Public
Accountants from time to time.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state or local
government, court, department, commission, board and office having jurisdiction
over the Property, Seller, Original Venture or the Company, or any other body
exercising functions similar to those of any of the foregoing.
"HAZARDOUS MATERIALS" shall mean any substance, material, waste, gas or
particulate matter which (i) is now, or at any future time may be, regulated by
the United States Government, the state in which the Real Property is located,
any other state with jurisdiction, or
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any local governmental authority, or (ii) the exposure to, or manufacture,
possession, presence, use generation, storage, transportation, treatment,
release, disposal, abatement, cleanup, removal, remediation or handling of is
prohibited, controlled or regulated by any Environmental Law, or (iii) requires
investigation or remediation under any Environmental Law or common law, or (iv)
is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous. Such term includes any material
or substance which is (1) defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste," "restricted hazardous waste"
or any like or similar term under any applicable Environmental Law; (2) oil and
petroleum products; (3) asbestos or asbestos-containing material as defined in
the regulations of the Occupational Safety and Health Administration at 29
C.F.R. ss.1910.1001; (4) polychlorinated biphenyls; (5) radioactive material;
(6) designated as a "toxic pollutant" or a "hazardous substance" pursuant to
Sections 307 or 311 of the Clean Water Act; (7) defined as a "hazardous waste"
pursuant to Section 1004 of RCRA; (8) defined as a "hazardous substance"
pursuant to Section 101 of CERCLA; (9) designated as a "hazardous chemical"
substance or mixture pursuant to TSCA; (10) designated as an "extremely
hazardous" substance under Section 302 of EPCRA; (11) designated as a "priority
pollutant" or "hazardous air pollutant" pursuant to the Clean Air Act; (12)
designated as a hazardous chemical under the Occupational Safety and Health Act;
(13) radon gas or other radioactive source material, including special nuclear
material, and byproduct materials regulated under the Atomic Energy Act, 42
U.S.C. ss.2011 et. seq.; (14) subject to regulation under FIFRA; (15) natural
gas, natural gas liquids, liquefied natural gas, and synthetic gas usable for
fuel; or (16) infectious wastes or materials and pathogenic bacteria or other
pathogenic microbial agents.
"IMPROVEMENTS" shall mean improvements, buildings, structures, fixtures,
facilities, installations, machinery and equipment, in, on, over or under the
Land, including the foundations and footings therefor, elevators, plumbing, air
conditioning, heating, ventilating, mechanical, electrical and utility systems
(except to the extent owned by a utility company) and any other similar systems,
signs and light fixtures (except to the extent of trade fixtures and equipment
owned by tenants under the Leases), doors, windows, fences, parking lots, walks
and walkways and each and every other type of physical improvement to the extent
owned, in whole or in part, by the Original Venture, located at, on or affixed
to the Land, to the full extent such items constitute or are or can or may be
construed as realty under the laws of the state in which the Real Property is
located.
"INDEMNIFIED COMPANY PERSONS" shall have the meaning set forth in
Section 8.1.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 8.3.
"INDEMNIFIED SELLER PERSONS" shall have the meaning set forth in
Section 8.2.
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 8.3.
"LAND" shall mean those certain parcels of real estate described on
EXHIBIT A.
"LANDLORD WORK" shall mean all work, improvements, fixtures, fittings
and equipment(other than normal repairs, maintenance or replacements) that are
required (or may in the future be required to be furnished or provided to
Tenants or REA Parties or paid for or by landlord or developer under the terms
of the Leases or the REA, as in effect on the date hereof.
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"LEASES" shall mean all leases, tenancies, concessions, licenses and
occupancy agreements currently in effect and to which the Original Venture or
any of its predecessors in title is a party affecting or relating to the
Property including those which are listed on SCHEDULE 6.1(G), together with any
additions thereto, modifications thereof or substitutions therefor hereafter
entered into in accordance with the provisions of this Agreement.
"LEGAL REQUIREMENTS" shall mean any laws, ordinances, orders, rules,
regulations and requirements of any Governmental Authority which may be
applicable to the Property, the Original Venture or Seller.
"LIENS" shall mean any mortgages, deeds of trust, security interests,
judgments or charges, pledges, options, rights of first offer or first refusal,
liens of any type, restrictions, claims and other encumbrances of any nature
whatsoever other than the Existing Indebtedness Documents.
"LIEN SEARCHES" shall mean a search report by an independent search firm
reasonably acceptable to the Company of the Secretary of State records, county
recorder records, local court records (federal, state, county and municipal) and
such other official public records with respect to the Property that would
disclose the presence of any Liens, bankruptcy proceedings, lis pendens or other
matters affecting the Property, the Original Venture or Seller.
"LOSSES" shall mean any and all claims, actions, suits, proceedings,
demands, losses, damages, liabilities, obligations, judgments, settlements,
awards, penalties, costs or expenses, including reasonable attorneys', experts'
or consultants' fees and expenses.
"OPERATING AGREEMENT" shall mean that certain Operating Agreement among
the Company, Seller and GGP Limited Partnership, dated as of the date hereof.
"ORIGINAL VENTURE" shall mean Acquiport Five Corporation, a Delaware
corporation.
"PARTY" shall mean a party to the REA, a Contract or Permitted Exception
Document (or the successor or assignee thereof) or a Tenant under a Lease, in
each case other than the Original Venture or its predecessors in title with
respect to the Property.
"PERMITTED EXCEPTION DOCUMENT" shall have the meaning set forth in
Section 2.3(b).
"PERMITTED EXCEPTIONS" shall mean the exceptions to title to the
Property listed on EXHIBIT B attached hereto and made a part hereof.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, governmental unit or agency, trust, estate or other entity of
any type.
"PERSONALTY" shall mean all of the personal property, both tangible and
intangible, owned by the Original Venture (and the Original Venture's interest
in any of the following) and located in or upon or used in connection with the
operation or maintenance of the Property, including machinery; equipment;
building supplies and materials; consumables; inventories; names, logos,
trademarks, trade names and copyrights; all assignable licenses, permits,
approvals, authorizations, variances, consents and certificates of occupancy;
all assignable guarantees or warranties (including performance bonds obtained
by, or for the benefit of, the Original Venture, pertaining to the ownership,
construction or development of the Real Property
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or any part thereof); the Books and Records; computer and peripheral equipment;
computer software and data contained in hard drives and on diskette; advertising
materials; and telephone exchange numbers. Without limiting the foregoing,
"Personalty" shall include the property listed on SCHEDULE 1.1-2. Personalty
shall not include personal items belonging to Tenants or to employees of the
Original Venture and the rights of the Original Venture or AMLLC in and to the
Leases, the REA and the Contracts.
"PRELIMINARY PRORATION DATE BALANCE SHEET" shall have the meaning set
forth in Section 5.1(a).
"PROMOTIONAL ASSOCIATION" shall have the meaning set forth in
Section 6.1(l).
"PROPERTY" shall mean (a) the Real Property, (b) the Personalty, (c) the
rights and interests of the Original Venture in, to and under all Leases, (d)
the rights and interests of the Original Venture in, to and under the REA, (e)
the rights and interests of the Original Venture in, to and under the Contracts
to the extent assignable, (f) the rights and interests of the Original Venture
in, to and under the Existing Indebtedness Documents.
"PRORATION DATE" shall mean November 30, 1999.
"PRORATION DATE BALANCE SHEET" shall have the meaning set forth in
Section 5.1(a).
"REAL PROPERTY" shall mean the Land and the Improvements, together with
all of the estate, right, title and interest of the Original Venture therein,
and in and to (a) any land lying in the beds of any streets, roads or avenues,
open or proposed, public or private, in front of or adjoining the Land to the
center lines thereof, and in and to any awards to be made in lieu thereof and in
and to any unpaid awards for damage to the foregoing by reason of the change of
grade of any such streets, roads or avenues; and (b) all easements, rights,
licenses, privileges, rights-of-way, strips and gores, hereditaments and such
other real property rights and interests appurtenant to the foregoing (including
all rights of the Original Venture under the REA).
"REA" shall mean that certain Declaration of Restrictions, Easements,
Agreements and Covenants dated October 15, 1968, which declaration was recorded
on November 8, 1968 in Book 7127, page 315, Official Records and amended by
Amendment No. 1, recorded August 6, 1970 in Book 7493, page 577, Official
Records and amended by Amendment No. 2, recorded September 26, 1995 as
Instrument No. 95-332627, Official Records; that certain Construction, Operation
and Reciprocal Easement Agreement dated as of the 29th day of March, 1966,
recorded April 1,1966, in Book 6600, Page 1 through 200, inclusive, Official
Records, as amended by First Amendment, recorded September 8, 1967 in Book 6886,
Page(s) 928, Official Records, as amended by Second Amendment, recorded November
15, 1967, in Book 6924, Page 525, Official Records,and as amended by Third
Amendment, recorded August 6, 1970, in Book 7493, Page 548, Official Records;
and as amended by Fourth Amendment Amendment to and Restatement of Construction,
Operation and Reciprocal and Restatement of Construction, Operation and
Reciprocal Easement Agreement, dated as of October 1, 1985, by and between
Homart Development Corporation ("Developer"), Xxxxxx Xxxxxx Xxxx Stores, Inc.
("Broadway"), Sears Xxxxxxx Co. ("Sears"), X.X. Xxxxxx Company, Inc. ("Penney"),
May Department Stores Company ("May") and Nordstrom, Inc. ("Nordstrom") recorded
June 30, 1987 as Instrument No. 87-222844, as supplemented by that certain (i)
Separate Agreement dated October 31, 1985, by and between Developer and
Broadway, (ii) Separate Agreement
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dated October 31, 1985 by and between Developer and May, (iii) Separate
Agreement dated __________, 198_ by and between Developer and Sears, and (iv)
Supplemental Agreement dated __________, 198_ by and between Developer and
Nordstrom, Inc. together with any additions thereto, modifications thereof or
substitutions therefor hereafter entered into in accordance with the provisions
of this Contribution Agreement.
"REGULATIONS" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"RENT ROLL" shall have the meaning set forth in Section 6.1(e).
"RENTS" shall mean fixed, minimum, additional, percentage and overage
rents, common area maintenance charges, advertising and promotional fees,
insurance charges, rubbish removal charges, sprinkler charges, shoppers aid
charges, water charges, utility charges, HVAC charges, amounts payable with
respect to real estate and any other taxes, and other amounts payable by any
Party under the Leases and the REA.
"RETAINED DEBT" shall have the meaning set forth in the Operating
Agreement.
"SELLER CLOSING DOCUMENTS" shall have the meaning set forth in
Section 4.2.
"SELLER'S INTEREST" shall mean all right title and interest of the
Original Venture in the Property.
"SELLER'S LIABILITIES" shall have the meaning set forth in
Section 2.3(b).
"SURVEY" shall mean the Urban ALTA/ACSM Land Title Survey of the
Property by Xxxxx X. XxxXxxxxx, Job #990128-1, last revised 10/5/99.
"TENANTS" shall mean tenants, concessionaires, licensees and/or
occupants under the Leases.
"TENANT SERVICES" shall mean all services supplied by or on behalf of
the Original Venture to Tenants for which Tenants are separately charged, other
than services in the nature of common area maintenance.
"THIRD PARTY CLAIM" shall have the meaning set forth in Section 8.3(a).
"TITLE COMMITMENT" shall mean the Proforma Policy of Title Insurance No.
6008399 issued by the Title Company to MPLLC dated November 4, 1999, together
with copies of all documents underlying all exceptions to title and all
encumbrances on and other matters of record affecting the Real Property.
"TITLE COMPANY" shall mean Commonwealth Land Title Insurance Company.
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"TITLE POLICY" shall mean Owner's Policy of Title Insurance to be issued
by Title Company and effective as of the date hereof, insuring MPLLC as owner of
good, marketable and indefeasible fee title to the Property, subject only to the
Permitted Exceptions.
"TRANSACTIONS" shall mean the transactions contemplated by this
Agreement.
"UTILITY DEPOSITS" shall have the meaning set forth in Section 5.8.
1.2. References. All references in this Agreement to particular
sections or articles shall, unless expressly otherwise provided, or unless the
context otherwise requires, be deemed to refer to the specific sections or
articles in this Agreement, and any references to "Exhibit" shall, unless
otherwise specified, refer to one of the exhibits annexed hereto and, by such
reference, be made a part hereof. The words "herein", "hereof", "hereunder",
"hereinafter", "hereinabove" and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection, paragraph or
article hereof. The words "include", "includes" and "including" shall be deemed
in each case to be followed by the phrase "without limitation".
1.3. Terms Generally. Definitions in this Agreement apply equally to
both the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.
ARTICLE II.
CONTRIBUTION
2.1. Contribution of Seller's Interest. Upon the terms and subject to
the conditions contained herein, at the Closing, Seller shall contribute to the
Company, and the Company shall acquire, Seller's Interest, free and clear of all
Liens. The Seller's Interest shall be deemed to have a fair market value equal
to $160,000,000.00, which represents the fair market value of the Property, plus
or minus Closing Net Equity as set forth on the Preliminary Proration Date
Balance Sheet (such amount, as the same is adjusted as hereinafter provided, the
"CONTRIBUTION AMOUNT").
2.2. Consideration. In consideration for the contribution of Seller's
Interest and certain other property being contributed to the capital of the
Company by Seller, and in addition to the assumption of liabilities and
adjustments as hereinafter provided, on the Closing Date, Seller shall receive
units of membership interest in the Company pursuant to the Operating Agreement.
2.3. Liabilities.
(a) MPLLC shall be liable and responsible for all liabilities and
obligations of the Original Venture other than the Seller's Liabilities (the
"ASSUMED LIABILITIES"). Without limiting the foregoing, Assumed Liabilities
shall include all liabilities and obligations relating to the Existing
Indebtedness (other than Seller's Retained Debt) notwithstanding any joint and
several or other liability of Seller under the Existing Indebtedness Documents.
Further, without limiting the foregoing, Assumed Liabilities shall include all
leasing costs, allowances, concessions, rent abatements, build-out costs, other
leasing inducements and leasing commissions with respect to all leases executed
on or after September 1, 1999, provided,
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however, that with respect to any leases executed on or after January 1, 2000
the Company shall only pay commissions due to General Growth Management, Inc.
and Seller shall remain liable for and shall pay commissions due to Existing
Manager.
(b) The Seller shall be responsible for all of the following
liabilities or obligations of the Original Venture, Seller or any predecessor of
any of them (collectively, the "SELLER PARTIES")or other Person specified below
(collectively, the "SELLER'S LIABILITIES"): (i) any liability or obligation that
is not related to the Property, (ii) any liability or obligation that arises
from contracts or agreements other than the Leases, the Contracts, the REA, the
Existing Indebtedness Documents or the instruments or agreements constituting
the Permitted Exceptions (a "PERMITTED EXCEPTION DOCUMENT"), (iii) any tort
liability arising from any accident, injury, event, circumstance, action or
omission occurring prior to the Closing Date (except to the extent of the
insurance proceeds received by the Original Venture in connection therewith),
whether or not asserted before or after the Closing, (iv) any liability or
obligation to a Party for breach of, or other payment obligation under, a Lease,
REA, Contract or Permitted Exception Document (including any claimed overcharge
of common area maintenance or other similar charges but excluding the items
covered in clause (v)) to the extent that the liability or obligation relates to
the period or accrued prior to the Closing Date, whether or not asserted before
or after the Closing, (v) all leasing costs, costs of Landlord Work (net of the
value of any additional revenues that are to be received by MPLLC and are
directly attributable to the Landlord Work), allowances, concessions, rent
abatements, build-out costs, other leasing inducements and leasing commissions,
with respect to all leases executed prior to September 1, 1999, (vi) any fine,
penalty or other amount that is imposed or assessed by or which was payable to
(including any installment thereof) a Governmental Authority for the period
prior to the Closing Date, whether or not imposed or assessed before or after
the Closing, (vii) all federal, state and local taxes of any Seller Party of
whatever kind and nature relating to the period prior to Closing, (viii)
liabilities and obligations relating to any employees (current or former),
employee benefit plans or collective bargaining agreements of the Existing
Manager or any Seller Party that accrued, relate to or arise from any incident,
event, circumstance, action or omission occurring during the period through the
effective termination date of the management agreement with the Existing
Manager, including severance pay and accrued vacation pay obligations and other
liabilities of the Existing Manager, any Seller Party, the Company or others
relating to the termination of any of such employees prior to the effective
termination date of the management agreement with the Existing Manager or as the
result of the consummation of the Transactions, (ix) any liability or obligation
to pay for work performed at, or materials supplied or delivered to, the
Property prior to the Closing, (x) any liability or obligation relating to
litigation that is commenced by Persons other than Parties or Governmental
Authorities and that relates to incidents, events, circumstances, actions or
omissions occurring during the period prior to Closing, whether or not asserted
before or after the Closing, (xi) any liability or obligation arising out of the
termination of the management agreement with the Existing Manager, (xii) any
commissions due to Existing Manager with respect to leases executed on or after
January 1, 2000, (xiii) any obligation, liability, cost or expense related to
any requirement, obligation or demand to construct or provide additional parking
or a parking deck for the benefit of Macy's or any affiliate of Macy's, and
(xiv) any other costs or liabilities imposed on Seller hereunder or under the
Operating Agreement, including the obligations of Seller thereunder as to the
Retained Debt. Notwithstanding anything to the contrary contained herein,
Seller's Liabilities shall not include (i) any liabilities or obligations to the
extent that the Company has received a credit therefor under the provisions of
Article V and (ii) subject to the provisions of Section 2.3(c), the cost of
repair, remediation or correction of any
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physical defect in the Property (but do include damages, fines or other amounts
owing to Parties, Governmental Authorities or others on account of any such
physical defect to the extent that such damages, fines or other amounts are not
for the cost of repair, remediation or correction thereof).
(c) Nothing contained in this Section 2.3 shall impair the rights
of the Company for a breach of any representation or warranty contained herein
or in the Seller Closing Documents.
ARTICLE III.
COSTS AND EXPENSES
3.1. Title and Survey Costs. Title and Survey costs shall be paid
as follows:
(a) The Company shall pay the cost of obtaining the Title
Commitment and the cost of recording any documents required to release, cure or
remove Defects;
(b) The Company shall pay the cost of obtaining the Survey;
(c) The Company shall pay the cost of recording any other
documents;
(d) Subject to any separate agreement between Seller and the
Company, the Company shall be solely responsible for the payment of any real
property transfer taxes levied or imposed upon Seller, MPLLC, the Original
Venture or the Property as a result of the transfers to MPLLC or the Company,
gains taxes levied or imposed upon Seller, MPLLC or the Original Venture as a
result of the transfers to MPLLC or the Company, sales taxes levied or imposed
upon Seller, MPLLC, or the Original Venture or the Property as a result of the
transfers to MPLLC or the Company and documentary stamps and other taxes, fees
or charges imposed in connection with the conveyance of the Seller's Interest or
any portion thereof;
(e) The Company shall pay all filing fees and charges and any
personal property sales taxes in connection with the indirect transfer of the
Personalty to the Company; and
(f) The Company shall pay the costs of the Lien Search.
3.2. Other Costs. Except for expenses and costs related to the
termination of any existing management agreement and the termination of any
employees, the Company shall pay any and all costs or expenses in connection
with the termination of any Contracts, other than the termination of management
contracts (which shall be at the cost and expense of Seller), to be terminated
in accordance with the terms of this Agreement. The Company shall pay the legal
fees of its counsel and Seller shall pay the legal fees of Xxxxxxx Xxxx &
Xxxxxxxxx incurred in connection with the drafting and negotiation of this
Agreement and the Closing of the Transactions.
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ARTICLE IV.
CLOSING
4.1. Closing. The closing of the Transactions (the "CLOSING") shall
take place at the offices of Xxxx, Gerber & Xxxxxxxxx, Xxx Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, commencing at 10:00 a.m., local time, on the date
hereof (the "CLOSING DATE").
4.2. Seller Closing Documents. On or prior to the Closing Date, Seller
shall deliver, or cause to be delivered, to the Company the following documents
(collectively, the "SELLER CLOSING DOCUMENTS"), duly executed by Seller and the
other parties thereto (other than the Company) and in form and substance
reasonably acceptable to the Company and to Seller unless the form thereof is
attached hereto:
(a) Grant Deed and Assignments conveying the Seller's Interest to
MPLLC.
(b) An affidavit of the Original Venture stating its U.S. taxpayer
identification number and that it is a "United States person", as defined by
Sections 1445(f)(3) and 7701(b) of the Code.
(c) Certificates issued by the Delaware Secretary of State, dated
not more than ten (10) days prior to the Closing Date, certifying the good
standing of Original Venture.
(d) Originals or certified copies of the organizational documents
for the Original Venture, including articles of organization, by-laws, minute
books and records of meetings, including all amendments thereof.
(e) Original, or copies certified by Seller as true, complete and
correct, of each of the Leases and the REA, together with all Books and Records
including current real estate tax bills, water, sewer and utility bills and all
Tenant correspondence.
(f) Any instruments, documents or certificates required to be
executed by the Original Venture with respect to any state, county or local
transfer taxes applicable to the conveyance of Seller's Interest pursuant to
this Agreement.
(g) Keys and combinations to locked compartments within the
Property.
(h) The Existing Indebtedness Documents.
(i) Such other documents, instruments or agreements which Seller
or the Original Venture is required to deliver to the Company pursuant to the
other provisions of this Agreement or which the Company reasonably may deem
necessary or desirable in order to consummate the Transactions in accordance
with the terms hereof.
(j) Any Tenant security deposits in Seller's or the Original
Venture's possession or control.
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4.3. Company Closing Documents. On or prior to the Closing Date, the
Company shall deliver to Seller the following documents (herein referred to
collectively as the "COMPANY CLOSING DOCUMENTS"), duly executed by an authorized
officer on behalf of the Company and the other parties thereto (other than
Seller) and in form and substance reasonably acceptable to Seller and to the
Company unless the form thereof is attached hereto:
(a) An agreement or agreements pursuant to which MPLLC accepts
assignment of Seller's Interest.
(b) Duly executed and acknowledged Secretary's Certificates,
certifying that the members of both the Company and of MPLLC have duly adopted
resolutions authorizing the consummation of the Transactions and certifying the
authority of the respective authorized signatories of the Company and MPLLC,
respectively, executing and delivering, as applicable, this Agreement and the
Company Closing Documents in their capacities as officers of the Company and
MPLLC, respectively.
(c) A certificate issued by the Secretary of State of Delaware
dated not earlier than ten (10) days prior to the Closing Date certifying the
existence and good standing of the Company as of the date of such certificate.
(d) Copies of the Certificates of Formation of the Company and
MPLCC and any amendments thereto, as of the Closing Date certified by the
Secretary of State of the State of Delaware as of a date not more than twenty
(20) days prior to the Closing Date, together with a certificate of an officer
of the Company to the effect that the Certificates of Formation of the Company,
as certified by the Secretary of State of Delaware, has not been further
amended, revised, restated, canceled or rescinded up to and including the
Closing Date.
(e) Any instruments, documents or certificates required to be
executed by the Company and MPLLC with respect to any state, county or local
transfer taxes applicable to the conveyance of Seller's Interest pursuant to
this Agreement.
(f) Such other documents, instruments or agreements which the
Company and/or MPLLC may be required to deliver to Seller pursuant to the other
provisions of this Agreement or which Seller reasonably may deem necessary or
desirable to consummate the Transactions; provided, however, that any such other
document, instrument or agreement which Seller reasonably deems necessary or
desirable shall not impose upon the Company any obligation or liability other
than an obligation or liability expressly imposed upon the Company pursuant to
the terms of this Agreement or pursuant to the terms of the other the Company
Closing Documents specified in this Section 4.3.
4.4. Joint Deliveries. Seller and the Company shall jointly execute and
deliver a Preliminary Proration Date Balance Sheet.
ARTICLE V.
Net Equity Adjustment
5.1 Net Equity Adjustment.
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(a) At or prior to Closing, Seller shall prepare and deliver to
the Company a balance sheet with respect to the Property and the Original
Venture (the "PRELIMINARY PRORATION DATE BALANCE SHEET") prepared as of the last
day of the month prior to the Closing Date, or, if the data as of such date are
unavailable, the last day of the second month prior to the Closing Date. No
later than one hundred twenty (120) days after the Closing Date, the Company
shall cause to be prepared and delivered to Seller an unaudited balance sheet
with respect to the Property and MPLLC as of the Proration Date (the "PRORATION
DATE BALANCE SHEET" and, together with the Preliminary Proration Date Balance
Sheet, the "CLOSING BALANCE SHEETS"), showing Closing Net Equity. The Closing
Balance Sheets shall be prepared on an accrual basis in accordance with GAAP
applied in a manner consistent with that utilized in the preparation of the
financial statements for General Growth Properties, Inc., without regard to any
special provisions relating to its REIT status, provided however, that the
following rules shall be employed:
(i) The following assets shall be excluded or eliminated:
deferred rent receivables; deferred financing, leasing and other costs;
tenant lease incentives; prepaid expenses to the extent the full amount
thereof could not reasonably be expected to inure to the benefit of the
MPLLC and/or the Original Venture (including but not limited to prepaid
insurance premiums);
(ii) no amount shall be recorded under the classification
"Building & Improvements", "Fixtures & Equipment", "Tenant Improvements"
and "Land;"
(iii) net carrying amounts for or in respect of the following
shall be eliminated, with such elimination to be done, in each case net
of accumulated amortization and depreciation, allowances for bad debts
and other contra accounts: building and improvements, fixtures and
equipment, land, capitalized taxes, tangible personal property and
goodwill;
(iv) the following assets shall be included (and shall be
deemed to be part of the assets of the Original Venture and transferred
to the Company): all cash in the Original Venture;
(v) the following liabilities shall be excluded or
eliminated: Retained Debt, deferred revenues and income tax accounts;
(vi) at Seller's election, a liability may be excluded to
the extent that it is a Seller's Liability and any reserves or other
assets relating to such excluded liability shall be excluded or
distributed to Seller;
(vii) there shall be excluded from assets an amount equal to
proceeds from condemnation awards (or payments in lieu thereof),
casualty insurance or the termination of any Lease, in each case
received after the date hereof;
(viii) reserves for billed accounts receivable, including Rent
and all other tenant charges, shall be calculated so that (A) accounts
receivable from Tenants in bankruptcy shall utilize a reserve of 100%,
(B) accounts receivable that are 90 days (but less than 120 days) past
due shall utilize a reserve of 25%, and (C) accounts receivable that are
more than 120 days past due shall utilize a reserve of 50%, and in each
case
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accounts receivable shall also include a reserve of five percent (5%)
for unbilled tenant charges, and an accrual shall be recorded for
insurance deductibles based upon insurance company estimates; and
(ix) any distribution made by the Original Venture or MPLLC
during November shall be treated as though not made.
(b) If based on the Preliminary Proration Date Balance Sheet,
Closing Net Equity exceeds zero, the Contribution Amount will be increased by
the amount of such excess. If, based on the Preliminary Proration Date Balance
Sheet, Closing Net Equity is less than zero, the Company will receive a credit
against the Contribution Amount equal to the amount of such shortfall.
(c) If, based on the Proration Date Balance Sheet, Closing Net
Equity, adjusted for the amount of any adjustment made pursuant to Section
5.1(b), exceeds zero, the Company will, no later than the later of (i) sixty-one
(61) days following the delivery of the Proration Date Balance Sheet or (ii)
five (5) business days following the resolution of a dispute with respect to an
item on the Proration Date Balance Sheet as set forth in subsection 5.2 hereof
(the "Balance Sheet Settlement Date"), pay to Seller the amount of such excess
by wire transfer of immediately available funds to an account designated by
Seller. If Closing Net Equity, adjusted for the amount of any adjustment made
pursuant to Section 5.1(b), is less than zero, Seller will pay to the Company no
later than the Balance Sheet Settlement Date the amount of such shortfall by
wire transfer of immediately available funds to an account designated by the
Company.
(d) Seller shall use reasonable efforts to cause Existing Manager
to cooperate with and assist the Company in the preparation of the Proration
Date Balance Sheet.
5.2 Resolution of Disputes on Proration Date Balance Sheet.
(a) If Seller disagrees with any item on the Proration Date
Balance Sheet, Seller shall notify the Company in writing of such disagreement
within sixty (60) days after Seller's receipt of the Proration Date Balance
Sheet. Such notice shall set forth the basis for such disagreement in reasonable
detail. During such sixty (60) day period, the Company shall afford Seller and
its duly designated representatives access to all of the Original Venture's
books and records, in each case solely for the purposes of resolving such
disagreement. The Company and Seller shall thereafter negotiate in good faith to
resolve any such disagreements, provided that Seller shall promptly pay to the
Company, or the Company shall promptly pay to Seller, as the case may be, the
amount determined pursuant to Section 5.1(c) that is not subject to dispute.
(b) If the Company and Seller are unable to resolve any such
disagreements within thirty (30) days after the expiration of the sixty (60) day
period referred to in Section 5.2(a), or, if the Company and Seller are unable
to resolve a dispute concerning the final adjustments to the Contribution
Amount, the Company and Seller shall cause Ernst & Young LLP (the "AUDITOR") to
resolve all disagreements on the disputed items as soon as practicable, provided
that the Auditor shall be bound by the provisions of Section 5.1 and may not
assign a value to any item greater than the greatest value for such item claimed
by either party or less than the smallest value for such item claimed by either
party. Each of the Company and Seller
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shall permit the Auditor to have full access to its books, records, key
employees and independent accountants in order to resolve any such
disagreements. The resolution of such disagreements by the Auditor shall be
final and binding on the Company and Seller. The fees and expenses of the
Auditor shall be paid by the party whose position is most at variance with the
decision of the Auditor.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
6.1. Seller's Representations and Warranties. Seller represents and
warrants to the Company as follows:
(a) Seller is an instrumentality of the State of New York, validly
existing under the laws of the State of New York with full power and authority
to execute, deliver and perform this Agreement.
(b) The execution, delivery and performance of this Agreement by
Seller have been duly and validly authorized by all necessary action on the part
of Seller. This Agreement has been, and the Seller Closing Documents will be,
duly executed and delivered by Seller or the Original Venture, as applicable.
This Agreement constitutes, and when so executed and delivered the Seller
Closing Documents will constitute, the legal, valid and binding obligations of
Seller or the Original Venture, as applicable, enforceable against Seller or the
Original Venture, as applicable, in accordance with their respective terms.
(c) None of the execution, delivery or performance of this
Agreement by or the Original Venture does or will, with or without the giving of
notice, lapse of time or both, violate, conflict with, constitute a default,
result in a loss of rights, acceleration of payments due or creation of any Lien
upon the Property or require the approval or waiver of or filing with any Person
(including any governmental body, agency or instrumentality) under (i) the
organizational documents of Seller or the Original Venture, any agreement,
instrument or other document to which Seller or the Original Venture is a party
or by which it is bound, (ii) any judgment, decree, order, statute, injunction,
rule, regulation or the like of a governmental unit applicable to the Property,
the Original Venture, or Seller (other than notification of ownership change or
transfer or reissuance of permits as may be required under Environmental Laws),
or (iii) any contract or agreement by which Seller or the Original Venture may
be bound.
(d) All right, title and interest of the Original Venture in and
to the Property have been conveyed to MPLLC. No other property (other than the
Real Property and property owned by any Anchor) comprises "Montclair Plaza".
(e) Schedule 6.1(e) is a true, correct and complete copy of the
rent roll of the Property (the "RENT ROLL") as of November 1, 1999, prepared in
the format prescribed by the MRI software reporting system currently in place at
the Property. All information therein is accurate as of its date. Except as set
forth to the contrary on Schedule 6.1(e), no Tenant has paid any rent in advance
except for the current month.
(f) Schedule 6.1(f) is a true, correct and complete schedule of
delinquencies in Rent, common area maintenance and other similar charges,
showing amounts
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payable as of November 1, 1999 by each Party, which schedule sets forth
separately and certifies the items of Rents with respect to which each such
Party is in arrears, the amount of each item and the period of such arrearage.
(g) Schedule 6.1(g) contains a complete and correct list of all
existing Leases and modifications thereof and supplements thereto regardless of
whether the terms thereof have commenced, setting forth with respect to each (i)
the date thereof and of each modification thereof and supplement thereto and
(ii) the names of the Parties thereto (including the name of the current
assignee, if any, but only if and to the extent Seller has actual notice of any
such assignment). A true and complete copy of each Lease demising space in
excess of 10,000 square feet, together with each modification thereof and
supplement thereto, has heretofore been furnished to the Company for inspection
and has been delivered to the Company on the date hereof. Each Lease constitutes
the entire agreement between the Original Venture and each Party thereto, and
the Original Venture has not made any oral promises or agreements amending or
modifying the same. No Person is using or occupying (or is entitled to use or
occupy) the Real Property except under a Lease or the REA.
(i) There are no leases executed by the Original Venture or
other rights of occupancy or use granted by the Original Venture or, to Seller's
knowledge, its predecessors in title of any portion of the Property other than
the Leases. Each of the Leases is valid and subsisting and in full force and
effect, and no Rents or other payments or deposits are held by Seller, the
Original Venture or the Original Venture's agent, except the security deposits
(together with the amount of accrued and unpaid interest thereon) described on
the Rent Roll and Rents prepaid for the current month. As of the Closing Date,
no Rents due under, or any other interest in, any of the Leases will be assigned
to any party other than the MPLLC, or are otherwise pledged or encumbered in any
way. All Security Deposits are being, and have been, held in compliance with all
Legal Requirements.
(ii) Except as set forth on Schedule 6.1(g), no Tenant has
made any written claim which has been received by Seller or the Original Venture
or, to Seller's knowledge, has any other claim, whether or not in writing (A)
that the Original Venture has defaulted in performing any of its obligations
under any of the Leases which has not heretofore been cured, (B) that any
condition exists which with the passage of time or giving of notice, or both,
would constitute any such default, (C) that such Tenant is entitled to any
reduction in, refund of, or counterclaim or offset against, or is otherwise
disputing, any Rents or other charges paid, payable or to become payable by such
Tenant, or (D) that such Tenant is entitled to cancel its Lease or to be
relieved of its operating covenants thereunder.
(iii) With the exception of delinquencies in the payment of
Rents which are set forth on Schedule 6.1(f), no material default exists under
any of the Leases on the part of the Tenant thereto and Seller has no knowledge
of any condition, which, with the passage of time, or giving of notice, would
constitute a default under any Lease. With the exception of any requirement to
repair any physical defects in the Property, the Original Venture is not in
default under the Leases. The Original Venture has not delivered any default
notices to any Tenant under any Lease which has not been cured.
(iv) There are no rent abatements, offset rights, "free rent
periods" or other tenant concessions or inducements, including lease assumptions
or buy-outs, applicable to any of the Leases or any rights to extend or renew
any of such Leases except as
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set forth in the Leases. There are no expansion rights, options or rights to
renew, extend or terminate the Leases, except as set forth in the Leases.
Neither Seller nor the Original Venture have granted any rights, options or
rights of first refusal of any kind to any Tenant or otherwise, which are
currently in effect, to purchase or to otherwise acquire the Property or any
part thereof or interest therein. All of the improvements to be constructed by
the landlord under each of the Leases, or as required under any collateral
agreement, plans or specifications related to the Leases, have been fully
completed in accordance with the terms thereof and have been paid for.
(v) No condition exists that would permit any Party to any
Lease or REA to cancel or terminate such Lease or REA, be released from
liability from such Lease or REA or reduce its obligations under any Lease or
REA.
(vi) Neither Seller nor the Original Venture or any
Affiliate of any of the foregoing, has made a loan or otherwise extended any
credit to any Tenant.
(h) The REA constitutes the only reciprocal easement agreements or
operating agreements encumbering the Property. A true and complete copy of the
REA has heretofore been furnished to the Company, together with each written
modification thereof and supplement thereto. The REA constitutes the entire
agreement between the Original Venture and each REA Party thereto, and neither
Seller nor the Original Venture have made any oral promises or agreements
amending or modifying the same.
(i) The REA is valid and in full force and effect, and no
Rents or other payments or deposits are held by Seller, the Original Venture or
Seller's agent, except the Rents prepaid for the current month. As of the
Closing Date, no Rents due under, or any other interest in, the REA will be
assigned to any party other than the Existing Lender, or are otherwise pledged
or encumbered in any way.
(ii) Except as set forth on Schedule 6.1(h), none of the REA
Parties has made any written claim which has been received by Seller, the
Original Venture or, to Seller's knowledge, has any other claim, whether or not
in writing (A) that the Original Venture has defaulted in performing any of its
obligations under any of the REAs which has not heretofore been cured, (B) that
any condition exists which with the passage of time or giving of notice, or
both, would constitute any such default, (C) that such REA Party is entitled to
any reduction in, refund of, or counterclaim or offset against, or is otherwise
disputing, any Rents or other charges paid, payable or to become payable by such
REA Party, (D) that such REA Party is entitled to cancel its REA or to be
relieved of its operating covenants thereunder, or (E) that there is a violation
of any of the covenants, conditions or restrictions contained in such REA.
(iii) With the exception of delinquencies in the payment of
Rents which are set forth on Schedule 6.1(f), no material default exists under
the REA on the part of the REA Parties thereto and Seller has no knowledge of
any condition which, with the passage of time or giving of notice, would
constitute a default under any REA. With the exception of any requirement to
repair any physical defects in the Property, the Original Venture is not in
default under the REA. The Original Venture has not delivered any default
notices to any party under the REA which has not been cured.
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(iv) There are no rent abatements, offset rights, "free rent
periods" or other concessions or inducements, including lease assumptions or
buy-outs, applicable to the REA or any rights to extend or renew the REA except
as set forth in Schedule 6.1(h) or the REA. There are no options or rights to
renew, extend, expand or terminate the REA, except as set forth in Schedule
6.1(h). Except as set forth in schedule 6.1(h), neither Seller nor the Original
Venture have granted any rights, options or rights of first refusal of any kind
to any of the REA Parties, which are currently in effect, to purchase or to
otherwise acquire the Property or any part thereof or interest therein. All of
the improvements to be constructed by the developer or owner under the REA, or
as required under any collateral agreement, plans or specifications related to
the REA, have been fully completed in accordance with the terms thereof and paid
for. No party to any REA has given notice that it has ceased or that it intends
to cease operating its store or other property that it is required to operate
under the REA.
(i) Each of the Contracts is in full force and effect. To Seller's
knowledge, there have been no material defaults by any Party to a Contract which
have not heretofore been cured. There has been no material default (without
giving effect to any notice and cure rights) by the Original Venture under any
Contract or any claim received by Seller or the Original Venture of any such
default by any party thereto, which has not heretofore been cured except as set
forth on Schedule 6.1(i)(a). Except as set forth on Schedule 6.1(i)(b), all of
the Contracts are terminable upon notice given sixty (60) days or less before
any such termination, without penalty, fee or cost. A true and complete copy of
each Contract listed on Schedule 6.1(i)(b), together with any modifications,
amendments or supplements thereto, has been delivered or made available to the
Company.
(j) Schedule 6.1(j) contains a list of all permits,
authorizations, approvals and licenses currently maintained with respect to the
Property and all such permits, authorizations, approvals and licenses are in
full force and effect. Neither Seller nor the Original Venture have received any
written notice of violation from any federal, state or municipal entity with
respect to the Property or in connection with the operations conducted thereon
that has not been cured or otherwise resolved to the satisfaction of such
governmental entity. To Seller's knowledge, the permits, authorizations,
approvals and licenses listed on Schedule 6.1(j) are all of the licenses and
permits which are required for the present use of the Property.
(k) Except as disclosed in the Phase I Environmental Assessment
delivered to the Company, and except for non-friable asbestos and as set forth
on Schedule 6.1(k), neither Seller, the Original Venture nor to Seller's
knowledge, any other Person has caused or permitted any Hazardous Material to be
maintained, disposed of, stored, treated, recycled, brought upon, transported
over, released or generated on, under or at the Property or any part thereof or
any real property adjacent thereto, except for the presence, maintenance,
storage, use or transportation of substances commonly present or stored at or
used in the ordinary operation and maintenance of shopping centers in ordinary
quantities commonly present, stored or used at shopping centers and in
compliance with applicable laws, including Environmental Laws. There has been no
release or threatened release of any Hazardous Materials at the Property or any
part thereof that will give rise to any actual or alleged obligation or
liability to conduct or pay for any investigation, removal, remediation,
monitoring, closure, or post-closure care at, on or under the Property or any
part thereof, nor has any release or threatened release of Hazardous Material
at, on or under the Property or any part thereof or
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with respect to any offsite location to which Hazardous Material have, or are
alleged to have, migrated or been transported from the Property or any part
thereof. Except as disclosed in the Phase I Environmental Assessment delivered
to the Company, Seller and the Original Venture are in compliance with, and have
heretofore complied with, all applicable Environmental Laws with respect to the
Property, and as of the date hereof there are no violations of applicable
Environmental Laws at the Property which have not been remediated in accordance
with all applicable Environmental Laws. Neither Seller nor the Original Venture
have received any written notice from any governmental unit or other person that
it or the Property is not in compliance with any Environmental Law or that it
has any liability with respect thereto and there are no administrative,
regulatory or judicial proceedings pending or, to the knowledge of Seller,
threatened with respect to the Property pursuant to, or alleging any violation
of, or liability under any Environmental Law. Except as set forth on Schedule
6.1(k), neither Seller nor the Original Venture have installed any underground
or above ground storage tanks on, under or about the Property and no such tanks
are located on, under or about the Property.
(l) Except as set forth on Schedule 6.1(l), the Original Venture
is under no obligation to make contributions or otherwise provide assistance to
any promotional association or promotional fund and has not customarily in the
past made or provided any such contributions or assistance. The promotional
association established with respect to the Property (the "PROMOTIONAL
ASSOCIATION") is an independent association established by and on behalf of the
Tenants, Seller and the Original Venture having no ownership, management,
fiduciary or monetary interest of any kind therein. Seller and/or the Existing
Venture has remitted to the Promotional Association any amounts received by it
from Tenants and other Parties that constitute contributions to the Promotional
Association. Seller and/or the Original Venture, as the case may be, has made
all required payments to any such Promotional Association or fund, if any.
(m) Except as provided in Schedule 6.1(m), there is no litigation,
including any arbitration, investigation or other proceeding by or before any
court, arbitrator or governmental or regulatory official, body or authority
which is pending or, to Seller's knowledge, threatened against Seller or the
Original Venture relating to the Property, Seller's Interest or the
Transactions, there are no unsatisfied arbitration awards or judicial orders
against the Original Venture and, to Seller's knowledge, there is no basis for
any such arbitration, investigation or other proceeding. Copies of all pleadings
and other documents furnished or made available by Seller to the Company with
respect to the litigation described on Schedule 6.1(m) are true, accurate and
complete in all respects.
(n) No condemnation proceeding or other proceeding or action in
the nature of eminent domain is pending with respect to all or any part of the
Property, and, to Seller's knowledge, no condemnation proceeding or other
proceeding or action in the nature of eminent domain is pending with respect to
any property owned by a Party to the REA which is the subject of such REA and to
Seller's knowledge no Taking is threatened with respect to all or any part of
the Property, or any property owned by a Party to the REA which is the subject
of such REA.
(o) True, correct and complete copies of current real estate tax
bills with respect to the Property, other than tax bills sent to Tenants who
have the obligation to pay such taxes to the collecting authority, have been
delivered or made available to the Company. No portion of the Property comprises
part of a tax parcel which includes property other than
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property comprising all or a portion of the Property. No application or
proceeding is pending with respect to a reduction or an increase of such taxes.
There are no tax refund proceedings relating to the Property which are currently
pending and neither Seller nor the Original Venture, nor any Affiliate thereof
has applied for any such reduction. Seller has no knowledge of any special tax
or assessment to be levied against the Property or any change in the tax
assessment of the Property other than the annual assessment. Neither Seller nor
the Existing Venture has received written notice of any, or has any knowledge of
any special assessments currently affecting the Property.
(p) Neither Seller nor the Original Venture have received (i) any
written notice from any governmental authority having jurisdiction over the
Property of, and to Seller's knowledge there does not exist, (A) any violation
of any law, ordinance, order or regulation (including the ADA) affecting the
Property, or any portion thereof, which has not heretofore been complied with or
(B) any other obligation to any such governmental authority for the performance
of any capital improvements or other work to be performed by Seller or the
Original Venture in or about the Property or donations of monies or land (other
than general real property taxes) which has not been completely performed and
paid for; or (ii) any written notice from any insurance company, insurance
rating organization or Board of Fire Underwriters requiring any alterations,
improvements or changes at the Property, or any portion thereof, which has not
heretofore been complied with.
(q) No approval, consent, waiver, filing, registration or
qualification with any third party, including any governmental bodies, agencies
or instrumentalities is required to be made, obtained or given for the
execution, delivery and performance of this Agreement or any of the Seller
Closing Documents by Seller, the Original Venture or the consummation of the
Transactions (other than notification of ownership change or transfer or
reissuance of permits as may be required under Environmental Laws).
(r) The Original Venture is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware with full
power and authority to own the Property and conduct the business now being
conducted by it.
(s) [Intentionally Deleted]
(t) [Intentionally Deleted]
(u) [Intentionally Deleted]
(v) Seller has furnished the Company with the financial statements
of the Original Venture (consisting of balance sheets and income statements) as
of, and for the calendar years ended December 31, 1997 and December 31, 1998
(the "FINANCIAL STATEMENTS"). The Financial Statements are consistent with the
books and records and accounts of the Original Venture and fairly present the
financial condition and results of the Original Venture as of the dates thereof
and for the periods referred to therein, and the Financial Statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods indicated. Since December 31, 1998,
the Original Venture has conducted its business in the ordinary course
consistent with past practice and there have been no material adverse changes in
the financial condition of the
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business, and Seller has no knowledge of any circumstance or event which,
insofar as can be reasonably foreseen, is likely to result in any such material
adverse change.
(w) [Intentionally Deleted]
(x) Schedule 6.1(x) accurately sets forth (i) a true, correct and
complete list of all instruments, agreements and other documents relating to the
Existing Indebtedness and all modifications or amendments thereof and
supplements thereto (including guaranties, indemnity agreements and side
letters) (the "EXISTING INDEBTEDNESS DOCUMENTS"), (ii) the date of the Existing
Indebtedness Documents and of each modification or amendment thereof and
supplement thereto, (iii) the name of the holders of the Existing Indebtedness
as of the date hereof, (iv) the unpaid balances (including any accrued interest
thereon) thereof as of the date hereof, (v) the security therefor as of the date
hereof and (vi) the amount of any deposits or escrows held or established in
connection therewith. The Existing Indebtedness Documents are in full force and
effect, neither Seller nor the Original Venture has received or delivered any
notice of default under any Existing Indebtedness Document which default has not
been cured, and, to the knowledge of Seller, no default on the part of the
Original Venture or any other Party thereto exists thereunder (without regard to
notice and cure provisions). A true and complete copy of the Existing
Indebtedness Documents, including each written modification thereof and
supplement thereto, have heretofore been furnished to the Company. Such
documents constitute the entire agreement between the Original Venture and each
Party thereto, and there are no oral promises or agreements amending or
modifying the same.
(y) Schedule 6.1(y) contains a true, complete and accurate list
including the amounts thereof of all policies of insurance with respect to the
Property, which policies are and will be kept in full force to and including the
Closing Date. All premiums for such insurance have been paid in full. To
Seller's knowledge, neither Seller nor the Original Venture have performed,
permitted or suffered any act or omission which would cause the insurance
coverage provided in said policies to be reduced, cancelled, denied or disputed
and neither Seller nor the Original Venture have received (and has no knowledge
of) any notice or request from any insurance company or Board of Fire
Underwriters (or organization exercising functions similar thereto) canceling or
threatening to cancel any of said policies or denying or disputing coverage
thereunder.
(z) To Seller's knowledge, there are no material structural or
other material physical defects in the Improvements or any component or system
of the Improvements and all such Improvements are in good condition and repair.
(aa) Neither Seller nor, to Seller's knowledge, the Original
Venture has received notice that there is, and, to Seller's knowledge, there
does not now exist, any violation of any restriction, condition or agreement
contained in any easement, restrictive covenant or any similar instrument or
agreement affecting the Real Property or any portion thereof.
(bb) The Original Venture has no employees. There are no
collective bargaining or union agreements with respect to the employees at
Property or to which Seller or the Original Venture is bound. The Original
Venture does not maintain or sponsor any employee benefit plan, including any
plans subject to the Employer Retirement Income Security Act of 1974, as
amended. There are no pending claims or, to Seller's knowledge, any
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threatened claim against the Original Venture by any employee whose employment
related to the Property.
(cc) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of Seller.
(dd) [Intentionally Deleted]
(ee) All material documents and Books and Records have been
delivered or have been made available to the Company. All of the documents and
Books and Records that have been delivered or made available to the Company by
or on behalf of Seller, are true, correct and complete copies of what they
purport to be and have not been modified or amended, except as specifically
noted therein. All information set forth in the exhibits and schedules to this
Agreement is true, correct and complete in all material respects and not
misleading. Seller does not have any knowledge of any significant adverse fact
or condition relating to the Property, which has not been specifically disclosed
in writing by Seller to the Company.
(ff) There are no lease brokerage agreements, leasing commission
agreements or other agreements providing for payments of any amounts for leasing
activities or procuring tenants (including renewing leases at expanding spaces)
with respect to the Property other than as disclosed in Schedule 6.1(ff).
(gg) Schedule 1.1-2 attached hereto contains a true, correct and
complete description of the Personalty (including the name "Montclair Plaza"),
and except as disclosed on said Schedule 1.1-2, the Original Venture has good
title to the Personalty free and clear from Liens and other encumbrances other
than the lien of the Existing Indebtedness Documents and the Permitted
Exceptions. The Personalty is all of the personal property that is necessary in
order to operate and maintain the Real Property as a first class regional
shopping center. The Original Venture has taken all steps necessary in order to
protect its exclusive right to use the name "Montclair Plaza" in connection with
the Real Property.
(hh) As of November 1, 1999, gift certificates having an aggregate
value of $183,360.00 are outstanding.
(ii) Except as set forth in Schedule 6.1(ii) attached hereto,
neither Seller, nor any Affiliate of Seller (other than the Original Venture),
owns (i) any right or interest in any real property adjacent to or neighboring
the Real Property including any outparcel or (ii) any right or interest in any
easement, right of way, development right, water or mineral right or any other
right which in any way affects the Real Property.
(jj) Except for routine work in the ordinary course of operating
the Real Property that will be paid when due, no work has been performed by
Seller or is in progress at Seller's request at the Real Property, and no
materials or supplies have been delivered to the Real Property at Seller's
request, that has resulted in the imposition of, or might provide the basis for
the imposition of, mechanics', materialmen's or other liens against the Real
Property.
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(kk) The sales reports heretofore furnished by Seller to the
Company for calendar years 1996, 1997 and year 1998, and the rolling twelve (12)
months sales report from March 1999, disclose the sales by Tenants at the Retail
Property as reported to Seller by such Tenants.
(ll) All water, storm sewer/sanitary sewer, gas, electricity,
telephone and other utility lines, pipes and other equipment necessary in order
to operate the Real Property as a first class regional shopping center
(collectively, the "Utility Equipment") presently serve the Real Property and to
Seller's knowledge, are in good working order. Neither Seller nor the Original
Venture, has any outstanding unpaid obligation to pay the cost of connection of
any utility lines, pipes or other equipment serving the Real Property.
(mm) The Real Property has not suffered any casualty or other
material damage that has not been fully repaired.
(nn) To Seller's knowledge, all HVAC, electric, gas, fire-safety,
plumbing, mechanical and other systems at the Real Property are in good, working
condition and no portion of same presently require replacement or significant
repair (i.e., repairs which are ordinarily capitalized under generally accepted
accounting principles).
(oo) Except as disclosed on Schedule 6.1(oo) attached hereto, no
capital work is currently in progress or contemplated.
(pp) Neither Seller nor the Original Venture, has received written
notice from any Governmental Authority, from any Party to any REA, any Tenant or
any party to any other agreement or document, or otherwise has knowledge, that
the number of parking spaces at the Real Property is required under any Legal
Requirement, any Lease, or the REA, to be increased above the number of parking
spaces existing on the date hereof.
(qq) The Original Venture has (i) filed all tax returns required
to be filed by it under applicable Legal Requirements and (ii) timely paid all
taxes shown to be due and payable on such tax returns.
(rr) Seller has no knowledge of any defects, liens, encumbrances,
adverse claims or other matters to be insured against under the Title Policy
(collectively, the "Insured Matters") that could result in the issuer of the
Title Policy denying its liability to the Company on the grounds that the
Original Venture or the Company had knowledge of any such Insured Matters solely
by reason of notice thereof imputed to it as a matter of law through either
Seller, the Original Venture or any Affiliate thereof.
(ss) Except as set forth on Schedule 6.1(ss), neither Seller nor
the Original Venture has received any written notice with respect to the Real
Property of any violation of law or municipal ordinances, orders or
requirements, that have been noted in or issued by any federal, state or
municipal department having jurisdiction, and which have not been fully remedied
and discharged of record.
(tt) To Seller's knowledge, Seller has provided the Company with
access to any and all certificates, licenses, permits, leases, ground leases,
operating agreements, books, records, documents and information relating to the
Real Property and the
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ownership and operation thereof which are in the possession and control of
Seller or the Original Venture.
(uu) [Intentionally Deleted]
Notwithstanding anything to the contrary contained herein, (a)
Seller shall have no liability under this Agreement for the cost of repair,
remediation or correction of any physical defect in the Property except as a
result of a breach of the representations and warranties contained in Sections
6.1(k), (z), (mm) and (nn)) (but nothing contained in this paragraph shall limit
Seller's liability for damages or fines or other amounts owing to Parties,
Governmental Authorities or others on account of any such physical defect to the
extent that such damages, fines or other amounts are not for the cost of repair,
remediation or correction thereof) and (b) Seller shall have no liability for a
breach of representation or warranty contained herein or in the Closing
Documents to the extent that the Company has received a credit therefor under
the provisions of Article V.
6.2. Company Representations and Warranties. The Company represents and
warrants to Seller as follows:
(a) The Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Delaware
with full right, power and authority to execute, deliver and perform this
Agreement.
(b) The execution, delivery and performance by the Company of this
Agreement have been duly and validly authorized by all requisite action on the
part of the Company. This Agreement has been, and the Company Closing Documents
will be, duly executed and delivered by the Company. This Agreement constitutes,
and when so executed and delivered the Company Closing Documents will
constitute, the legal, valid and binding obligations of the Company, enforceable
against it in accordance with their terms.
(c) None of the execution, delivery or performance of this
Agreement or the Company Closing Documents by the Company does or will, with or
without the giving of notice, lapse of time or both, violate, conflict with,
constitute a default or result in a loss of rights under or require the approval
or waiver of or filing with any Person (including any governmental body, agency
or instrumentality) under (i) the organizational documents of the Company or any
material agreement, instrument or other document to which the Company is a party
or by which the Company is bound or (ii) any judgment, decree, order, statute,
injunction, rule, regulation or the like of a governmental unit applicable to
the Company, other than notification of ownership change or transfer or
reissuance of permits as may be required under Environmental Laws.
(d) No broker, finder, investment banker or other person is
entitled to any brokerage, finder's or other fee or commission in connection
with the Transactions based upon arrangements made by or on behalf of the
Company.
6.3. No Other Representations. Neither Seller nor any officer,
director, shareholder, member, agent, partner, employee, or representative of
Seller (or any officer, director, partner or employee of any agent of Seller)
has made any representation whatsoever regarding the Property or any part
thereof, or anything relating to the subject matter of this Agreement, except
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as expressly set forth in this Agreement, and the Company, in executing,
delivering and performing this Agreement, has not and does not rely upon any
statement, information, or representation to whomsoever made or given, whether
to the Company or others, and whether directly or indirectly, verbally or in
writing, made by any person, firm or corporation, except as expressly set forth
in this Agreement or in the Seller Closing Documents.
6.4. Knowledge Defined. For the purposes of this Agreement, "knowledge"
(including "actual knowledge" and other similar terms) with respect to Seller
and the Original Venture shall mean matters as to which any of the following
individuals have actual knowledge without any duty or responsibility to make any
inquiry, review or investigation: (i) Xxxxxxx Xxxxxxx, (ii) Xxxxxx X. Xxxxxxx,
Xx., (iii) Xxxxx Xxxxxxxx, (iv) Xxxxx Xxxx, (v) Xxxxxxxx Xxxxx and (vi) Xxxxxx
Xxxxxx. Actual knowledge shall not be deemed to exist merely by assertion by the
Company of a claim that any of the foregoing persons should have known of such
facts or circumstances, if such person did not have actual knowledge thereof.
Seller hereby represents and warrants that the foregoing individuals are the
individuals with the primary responsibility for overseeing the sale, management,
and operation of the Property at the level of vice president and above.
ARTICLE VII.
ADDITIONAL COVENANTS
7.1. Record Retention. Until three (3) years after the Closing, the
Company shall provide Seller upon prior written notice and during normal
business hours with reasonable access to the Books and Records and, at Seller's
cost, copies of all or any portion thereof. The Company either shall retain such
Books and Records until the third anniversary of the date hereof or notify
Seller of its desire to dispose of such Books and Records pertaining to any
period prior to the Closing which have been delivered to the Company and turn
them over to Seller if Seller so requests. Seller agrees to keep, and to
instruct its agents, employees and representatives to keep, confidential such
Books and Records (and any information contained therein) and any information
discovered in any such examinations and inspections, except in connection with
any legal proceedings or to the extent required by law. Upon the Company's
request, for a period of three (3) years after the Closing, Seller shall make
all of Seller's records with respect to the Property which are in the possession
or control of Seller available to the Company for inspection, copying and audit
by the Company's designated accountants. The provisions of this Section 7.1
shall survive Closing.
7.2. Publicity. In no event shall either Seller or the Company issue
any press release or otherwise disclose any non-public information regarding
this Agreement or the Transactions unless the other party has consented thereto
in writing as to the form and substance of any such statement or disclosure (and
Seller and the Company agree not unreasonably to withhold, condition or delay
such consent); provided, however, that nothing herein shall be deemed to limit
or impair in any way any party's ability to disclose the details of or
information concerning this Agreement or the Transactions to the extent
necessary to such party's attorneys, accountants or other advisors or to the
extent such party reasonably deems necessary or desirable pursuant to any court
or governmental order or applicable securities laws or regulations or financial
reporting requirements, or to obtain the Existing Indebtedness Consent
Documents. Further, to the extent necessary, either party may disclose any
information regarding this Agreement or the Transactions to its direct or
indirect constituent partners,
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members or shareholders, as the case may be (and to counsel for such constituent
partners, members and shareholders) and as otherwise necessary to comply with
the terms of this Agreement. Any disclosure by a party's advisors or direct or
indirect constituent partners, members or shareholders shall be deemed a breach
hereof by such party. If for any reason this Transaction is not consummated, the
Company will promptly return to Seller all originals and copies of documents,
reports and financial and other information relating to the Property and to
Seller which Seller has furnished to the Company. The obligations of Seller and
the Company under this Section 7.2 shall survive the termination hereof, however
caused.
7.3. Assistance Following Closing. From and after the Closing, Seller
at the Company's reasonable expense shall provide reasonable assistance to the
Company in connection with the preparation of financial statements and bills and
the adjustment of losses and claims and the enforcement or settlement of any
such claims. Without limiting the foregoing, Seller shall, upon the reasonable
request of the Company from time to time, provide signed representation letters
with respect to revenues and expenses of Seller if required under GAAS to enable
the Company's accountants to render an opinion on the Company's financial
statements.
7.4. Further Assurances. Each of Seller and the Company agree, at any
time and from time to time after the Closing, to execute, acknowledge where
appropriate and deliver such further instruments and other documents (and to
bear its own costs and expenses incidental thereto) and to take such other
actions as the other of them may reasonably request in order to carry out the
intent and purpose of this Agreement; provided, however, that neither Seller nor
the Company shall be obligated, pursuant to this Section 7.4 to incur any
expense of a material nature and/or to incur any material obligations in
addition to those set forth in this Agreement and/or its respective Closing
Documents.
7.5. No Intercompany Accounts. Prior to the Closing, Seller shall pay,
distribute, release or otherwise eliminate any and all intercompany debt or
accounts between the Original Venture and Seller or any Affiliate of Seller.
ARTICLE VIII.
INDEMNIFICATION
8.1. Indemnification by Seller. From and after the Closing, Seller
shall indemnify, defend and hold harmless the Company and its members, officers,
directors, managers, employees, representatives and agents, and any direct or
indirect partner, shareholder, officer, director or member of any member of the
Company, and their respective successors and assigns (collectively, the
"INDEMNIFIED COMPANY PERSONS") from and against any Losses asserted against,
incurred or suffered by any Indemnified Company Person that results from,
relates to or arises out of (a) the breach or inaccuracy of any representation
or warranty made by Seller in this Agreement or the Seller Closing Documents,
(b) the breach or non-fulfillment by Seller of any of the covenants or
agreements of Seller under this Agreement or the Seller Closing Documents, or
(c) Seller's Liabilities.
8.2. Indemnification by the Company. From and after the Closing, the
Company shall indemnify, defend and hold harmless Seller and its direct or
indirect shareholders, directors, officers, members, partners employees and
agents, and their respective successors and assigns (collectively the "
INDEMNIFIED SELLER PERSONS") from and against any Losses asserted
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against, incurred or suffered by any Indemnified Seller Person that results
from, relates to or arises out of (a) the breach or inaccuracy of any
representation or warranty made by the Company in this Agreement or the Company
Closing Documents, (b) the breach or non-fulfillment by the Company of any of
the covenants or agreements of the Company under this Agreement or the Company
Closing Documents, or (c) the Assumed Liabilities.
8.3. Indemnification Procedure.
(a) Subject to the provisions of Section 8.3(d), the indemnified
party (the "INDEMNIFIED PARTY") shall give the indemnifying party (the
"INDEMNIFYING PARTY") prompt notice of any Losses (or potential Losses) which
may be covered under this Article VIII and such notice shall state the basis for
the claim, action or proceeding and the amount thereof (to the extent such
amount is determinable at the time when such notice is given). In the event the
notice relates to a claim, assertion, action, suit or proceeding by a
third-party ("THIRD PARTY CLAIM") for which indemnification is provided
hereunder, the Indemnified Party shall permit the Indemnifying Party (or its
insurance company) to assume the defense of such claim, assertion, action, suit
or proceeding and the Indemnifying Party (or its insurance company) may (i)
prior to the commencement of any proceedings in connection with such Losses,
undertake the negotiation of any resolution of the dispute relating to such
Losses, including in accordance with the terms hereof any settlement or release,
or (ii) undertake the defense of any proceeding (including any alternative
dispute resolution proceeding) regarding such Losses by selecting legal counsel
who shall be reasonably acceptable to the Indemnified Party. Failure of the
Indemnifying Party to notify an Indemnified Party of its election to undertake
the Indemnified Party's defense of a Third Party Claim within a reasonable time,
but in no event more than thirty (30) days after notice thereof shall have been
given to the Indemnifying Party, shall be deemed a waiver by the Indemnifying
Party of its right to undertake the defense of such Third Party Claim. Xxxxxxx
Xxxx & Gallagher, Neal, Gerber & Xxxxxxxxx and counsel for the Indemnifying
Party's insurance company shall be deemed reasonably acceptable to the
Indemnified Party.
(b) Provided the Indemnifying Party shall have undertaken the
Indemnified Party's defense of a Third Party Claim with legal counsel reasonably
acceptable to the Indemnified Party, and shall have so notified the Indemnified
Party, the Indemnified Party shall be entitled to participate at its own expense
in the aforesaid negotiation or defense of any claim relating to such Losses
(subject to reimbursement to the limited extent provided in Section 8.3(e)), but
such negotiations or defense shall be controlled by counsel to the Indemnifying
Party.
(c) Except as provided in Section 8.3(e), the Indemnifying Party
shall not be liable for payments relating to the resolution of any dispute or
any settlement of any litigation or proceeding effected without the written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld, conditioned or delayed. The Indemnifying Party shall not, in the
defense of any such Third Party Claim, consent to the entry of any judgment or
award, or enter into any settlement, except in either event with the prior
consent of each Indemnified Party, which consent shall not be unreasonably
withheld, conditioned or delayed. To the extent any Indemnified Party declines
to consent to a bona fide offer of settlement or compromise, the Indemnifying
Party shall continue to defend, but the amount of such offer shall be the limit
of the Indemnifying Party's liability with respect to such claim, action or
proceeding with respect to the Indemnified Party that declined such offer.
Notwithstanding the foregoing, the Indemnifying Party shall not, without the
Indemnified Party's written consent, (which consent
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may be withheld in the sole and absolute discretion of the Indemnified Party)
resolve any dispute or settle or compromise any claim regarding Losses from a
Third Party Claim or consent to entry of any judgment which would impose an
injunction or other equitable relief upon the Indemnified Party or which does
not include as an unconditional term thereof the release by the claimant or the
plaintiff of the Indemnified Party from all liability in respect of any such
Losses.
(d) The failure to give notice of a claim under this Article VIII
shall not release the Indemnifying Party of its obligations under this Article
VIII, except to the extent of the actual harm suffered thereby.
(e) In the event the Indemnifying Party fails after notice from
the Indemnified Party to timely undertake negotiation of any dispute or defend,
contest or otherwise protect against any claim or suit with respect to a Third
Party Claim, and to so notify the Indemnified Party, the Indemnified Party may,
but will not be obligated to, defend, contest or otherwise protect against the
same, and make any compromise or settlement thereof and recover the entire costs
thereof from the Indemnifying Party, including reasonable attorneys' and
experts' fees, disbursements and all amounts paid as a result of such claim or
suit or the compromise or settlement thereof. The Indemnified Party shall
cooperate and provide such assistance as the Indemnifying Party may reasonably
request in connection with the negotiation of any dispute and the defense of the
matter subject to indemnification and the Indemnifying Party shall reimburse the
Indemnified Party's reasonable costs incurred thereafter in connection with such
cooperation and assistance.
(f) Notwithstanding anything to the contrary contained herein,
neither Seller nor the Company shall be entitled to indemnification hereunder
for any Losses to the extent it has received a credit therefor pursuant to
Article V.
ARTICLE IX.
MISCELLANEOUS
9.1. Survival. Except for the representations and warranties of Seller
set forth in Section 6.1(k) which representations and warranties and the
indemnification provisions relating thereto shall survive Closing indefinitely,
all other warranties, representations, covenants and agreements of Seller and of
the Company set forth in this Agreement shall survive until the Company ceases
to exist under the terms of the Operating Agreement.
9.2. Notices. Notices must be in writing and sent to the party to whom
or to which such notice is being sent, by (a) certified or registered mail,
postage prepaid and return receipt requested, (b) commercial overnight courier
service, or (c) delivered by hand with receipt acknowledged in writing, as
follows:
To the Company:
GGP/Homart II L.L.C.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
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with a copy thereof to:
The Comptroller of the State of New York
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Deputy Comptroller
Investments and Cash Management
and
The Comptroller of the State of New York
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Counsel
and
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
and
Clarion Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
and
Xxxx, Gerber & Xxxxxxxxx
Two North LaSalle Street, Suite 2200
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxx
To Seller:
The Comptroller of the State of New York
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Deputy Comptroller
Investments ans Cash Management
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with a copy to
The Comptroller of the State of New York
as Trustee of the Common Retirement Fund
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Assistant Counsel
and
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
and
Clarion Partners
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
All notices (i) shall be deemed given when received if delivered by hand or
overnight courier service or, if mailed as described above with appropriate
postage, after 5 business days and (ii) may be given either by a party or by
such party's attorneys. The cost of delivery shall be borne by the party
delivering the notice.
9.3. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute a single document when at least one counterpart has been executed and
delivered by each party hereto.
9.4. Amendments. Except as otherwise provided herein, this Agreement
may not be changed, modified, supplemented or terminated, except by an
instrument executed by the party hereto which is or will be affected by the
terms of such change, modification, supplement or termination.
9.5. Waiver. Each party shall have the right exercisable in its sole
and absolute discretion, but under no circumstances shall be obligated, to waive
or defer compliance by any other party with its obligations hereunder or to
waive satisfaction of any conditions contained herein for its benefit. No waiver
by any party of a breach of any covenant or a failure to satisfy any condition
shall be deemed a waiver of any other or subsequent breach or failure to satisfy
any other condition. All waivers of any term, breach or condition hereof must be
in writing.
9.6. Successors and Assigns. Subject to the provisions of Section 9.10,
the terms, covenants, agreements, conditions, representations and warranties
contained in this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
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9.7. Third Party Beneficiaries. The provisions of this Agreement are
made for the benefit of the parties hereto, and their respective successors in
interest and assigns and are not intended for, and may not be enforced by, any
other person or entity.
9.8. Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
9.9. Governing Law. This Agreement has been made pursuant to and shall
be governed by the laws of the State of Delaware (without regard to conflicts of
law rules).
9.10. Assignment. This Agreement may not be assigned or delegated by any
party without the written consent of the other except that the Company may
assign this Agreement to an Affiliate of the Company, it being acknowledged and
agreed by the Company that no such assignment shall relieve the Company of its
obligations under this Agreement.
9.11. Headings; Exhibits. The headings or captions of the various
Articles and Sections of this Agreement have been inserted solely for purposes
of convenience, are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
9.12. Gender and Number. Words of any gender shall include the other
gender and the neuter. Whenever the singular is used, the same shall include the
plural wherever appropriate, and whenever the plural is used, the same also
shall include the singular where appropriate.
9.13. Entire Agreement. This Agreement constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes any
prior written or oral understandings and/or agreement among them with respect
thereto.
9.14. Costs of Enforcement. In the event that any action is brought by
any party or parties to this Agreement against any other party or parties to
enforce rights under this Agreement, the prevailing party's or parties' costs in
such action, including reasonable attorneys' fees, shall be paid by the other
party or parties. Any amounts owing hereunder which are not paid when due shall
bear interest at the per annum rate equal to the prime rate of Bank of America,
N.A. (or any successor), as the same may change from time to time, plus four
percent.
9.15. Time of the Essence. Time is of the essence with regard to each
provision of this Agreement. If the final date of any period provided for herein
for the performance of an obligation or for the taking of any action falls on a
Saturday, Sunday or banking holiday, then the time of that period shall be
deemed extended to the next day which is not a Sunday, Saturday or banking
holiday. Each and every day described herein shall be deemed to end at 5:00 p.m.
Central Time.
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9.16. Indemnification Against Broker Claims. Seller shall indemnify,
defend and hold harmless the Company from and against all loss, liability,
damages, costs and expenses (including reasonable counsel fees) resulting from
any claim that may be made by any broker or other person claiming to have dealt
with Seller in connection with the Transactions, for a commission, fee or other
compensation by reason of the Transactions including any loss, liability, costs
and expenses (including reasonable counsel fees) incurred in enforcing this
indemnity. The Company shall indemnify, defend and hold harmless Seller from all
loss, liability, costs and expenses (including reasonable counsel fees)
resulting from any claim that may be made by any broker or other person claiming
a commission, fee or other compensation by reason of having dealt with the
Company in connection with the Transactions, including any loss, liability,
costs and expenses (including reasonable counsel fees) incurred in enforcing
this indemnity. The provisions of this Section 9.16 shall survive the Closing or
termination of this Agreement.
9.17. Arbitration. Except as otherwise provided herein, in the event of
any dispute in connection with the terms and provisions of this Agreement, the
parties agree to submit such dispute to arbitration in accordance with the
provisions of Section 14.13 of the Operating Agreement.
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33
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto on the day and year first above written.
SELLER: COMPANY:
THE COMPTROLLER OF THE STATE GGP/HOMART II L.L.C.,
OF NEW YORK AS TRUSTEE OF a Delaware limited
THE COMMON RETIREMENT FUND liability company
By: /s/ Xxxx X. Xxxx By: /s/ Xxxx Xxxxx
------------------------- ------------------------------
Name: Xxxx X. Xxxx Name: Xxxx Xxxxx
Title: Deputy Comptroller of Title: Senior Vice President
Investments & Cash Management
34
LIST OF EXHIBITS AND SCHEDULES
Exhibits/Schedule Description
Exhibit A Legal Description of the Land
Exhibit B Permitted Exceptions
Schedule 1.1-1 Anchors
Schedule 1.1-2 Personalty
Schedule 6.1(e) Rent Roll
Schedule 6.1(f) Schedule of Arrearages
Schedule 6.1(g) Leases
Schedule 6.1(h) Claims under REA
Schedule 6.1(i) (a) List of all Contracts
Schedule 6.1(i) (b) List of all Contracts not terminable on 60 days or
less notice
Schedule 6.1(j) Permits and Licenses
Schedule 6.1(k) Environmental Disclosure
Schedule 6.1(l) Promotional Association Matters
Schedule 6.1(m) Pending or Threatened litigation
Schedule 6.1(x) List of Existing Indebtedness Documents
Schedule 6.1(y) Insurance Policies
Schedule 6.1(ff) Lease Brokerage Agreements
Schedule 6.1(ii) Seller's Rights in Neighboring Properties
Schedule 6.1(oo) Capital Expenditures in Progress or Contemplated
Schedule 6.1(ss) Notices of Uncured Violations
