CONTRIBUTION AND SALE AGREEMENT AMONG THE EQUITY ONE PARTIES DESCRIBED HEREIN AND TEXAS RETAIL INVEST, LLC
EXHIBIT
99.3
AMONG
THE
EQUITY ONE PARTIES
DESCRIBED
HEREIN
AND
TEXAS
RETAIL INVEST, LLC
TABLE
OF CONTENTS
8
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1.1
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Closing
Date
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8
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1.2
|
Formation
of New Entities.
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8
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1.3
|
Contribution
and Sale of Properties
|
9
|
|
1.4
|
Consideration
to be Received for the Properties
|
10
|
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1.5
|
Contribution
of Cash by Investcorp, New Mortgage Financing.
|
10
|
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1.6
|
Shortfall
Guaranty
|
11
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1.7
|
Management
Agreement.
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12
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|
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1.8
|
Construction
of New Space at Xxxxxx, Creekside, Xxxxxxxxxxx and Xxxxx Park; Potential
Green Oaks transaction; Tenant Improvements for Ski Shop, Catherine’s and
The Scrap Book.
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12
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1.9
|
Title
to Properties
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14
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ARTICLE
II - CERTAIN COVENANTS AND CONDITIONS TO CLOSING
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15
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2.1
|
Certain
Covenants and Conditions to Investcorp’s Obligations
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15
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2.2
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Conditions
to the Obligations of the Equity One Parties.
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19
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ARTICLE
III - REPRESENTATIONS AND WARRANTIES, CERTAIN COVENANTS
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20
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3.1
|
Representations
and Warranties of the Transferors; Certain Covenants of the
Transferors.
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20
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3.2
|
Representations
and Warranties of Investcorp.
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23
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3.3
|
No
Liability for Known Facts.
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24
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3.4
|
Representations
Deemed Modified.
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24
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3.5
|
No
Other Representations and Warranties Outside Agreement and Related
Agreements.
|
25
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3.6
|
Survival;
Limitation of Liability
|
27
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3.7
|
Release
of Equity One Parties.
|
27
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(i)
ARTICLE
IV - COVENANTS
|
28
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4.1
|
Availability
of Records.
|
28
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4.2
|
Tenant
Estoppels.
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28
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4.3
|
Operation
Prior to Closing.
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31
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4.4
|
Leases
Prior to Closing.
|
31
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ARTICLE
V - CLOSING ADJUSTMENTS
|
32
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5.1
|
Prorations
Generally.
|
32
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5.2
|
Real
Estate Taxes and Assessments.
|
32
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|
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5.3
|
Utilities.
|
33
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|
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|||
5.4
|
Rent
and Other Tenant Charges.
|
33
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5.5
|
Prepaid
Items.
|
34
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5.6
|
Declaration
Assessments
|
35
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|||
5.7
|
Service
Contracts
|
35
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5.8
|
Special
Closing Credit
|
35
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5.9
|
Leasing
Commissions and Leasing Costs
|
35
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5.10
|
Survey
Costs, Title Premiums, Transfer Taxes, Legal Fees.
|
36
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5.11
|
Fees
and Expenses Related to Financing.
|
36
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5.12
|
Closing
Statements; Year-End Reconciliations.
|
36
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5.13
|
Survival
|
37
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ARTICLE
VI - FIRE OR CASUALTY
|
37
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6.1
|
Casualty.
|
37
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ARTICLE
VII - CONDEMNATION
|
38
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ARTICLE
VIII - DEFAULT
|
39
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8.1
|
Transferors’
Default.
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39
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8.2
|
Investcorp
Default.
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41
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(ii)
ARTICLE
IX - MISCELLANEOUS
|
41
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9.1
|
Brokers.
|
41
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9.2
|
Entire
Agreement; No Amendment.
|
41
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9.3
|
Notices.
|
42
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9.4
|
No
Assignment.
|
43
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9.5
|
Governing
Law; Waiver of Jury Trial.
|
43
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9.6
|
Multiple
Counterparts.
|
44
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9.7
|
Further
Assurances.
|
44
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9.8
|
Miscellaneous.
|
44
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9.9
|
Invalid
Provisions.
|
45
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9.10
|
Confidentiality;
Publicity.
|
45
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9.11
|
No
Recording
|
45
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|
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9.12
|
OFAC
Policy
|
45
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9.13
|
Limitation
of Liability
|
45
|
(iii)
Exhibits:
Exhibit A
SCHEDULE
OF TRANSFERORS AND PROPERTIES
Exhibit A-1
AGREED
FAIR MARKET VALUES
Exhibit B
LIST
OF
TITLE COMMITMENTS AND SURVEYS CONTAINING LEGAL DESCRIPTIONS OF LAND
Exhibit C
EXISTING
MORTGAGE DEBT AND MORTGAGED PROPERTIES
Exhibit D
FORM
OF
SHORTFALL GUARANTY
Exhibit E
INTENTIONALLY
OMITTED
Exhibit F
LIST
OF
TRANSFERORS’ PERSONAL PROPERTY RELATING TO THE PROPERTIES
Exhibit G-1
FORM
OF
DEED
Exhibit G-2
FORM
OF
XXXX OF SALE
Exhibit H
FORM
OF
ASSIGNMENT OF LEASES
Exhibit I
FORM
OF
PROPERTY MANAGEMENT AND LEASING AGENCY AGREEMENT
Exhibit J-1
TRANSFERORS’
RENT ROLL
Exhibit J-2
FORM
OF
ASSIGNMENT AND ASSUMPTION OF CONTRACTS, WARRANTIES, GUARANTEES AND OTHER
INTANGIBLE PROPERTY.
Exhibit K
INVENTORY
OF DILIGENCE MATERIALS
(iv)
Exhibit L
FORM
OF
TENANT ESTOPPEL
Exhibit
M
FORM
OF
INTERMEDIATE PARTNERSHIP AGREEMENT
Exhibit
N
FORM
OF
JV PARTNERSHIP AGREEMENT
Exhibit
O
FORM
OF
INTERMEDIATE GP OPERATING AGREEMENT
Exhibit
P
FORM
OF
ESCROW AGREEMENT (Deposit)
Exhibit
Q
FORM
OF
POST-CLOSING ESCROW AGREEMENT (Equity One Improvement Holdback LC)
Exhibit
R
FORM
OF
INDEMNITY (Section 1.3 Transfers)
Exhibit
S
FORM
OF
ESTOPPEL CURE ESCROW AGREEMENT
Exhibit
T
FORM
OF
TRANSFEROR ESTOPPEL
Exhibit
U
FORM
OF
ENVIRONMENTAL INDEMNITY FOR XXXXXXXX, FORESTWOOD AND MARKET AT FIRST
COLONY
Exhibit
V
FORM
OF
INDEMNITY AGREEMENT REGARDING SPECIFIED TITLE ISSUES
Schedules:
Schedule
1
LIST
OF
CONTRACTS
Schedule
1.2(a)
NAMES
OF
PROPERTY OWNING SUBSIDIARIES AND PROPERTY GPS
Schedule
1.2(b)
OWNERSHIP
STRUCTURE CHART
Schedule
1.3
CURRENT
OWNERSHIP CHART
(v)
Schedule
1.5(a)
PREPAYMENT
FEES FOR WESTGATE DEBT AND FORESTWOOD DEBT
Schedule
1.5(b)
COPY
OF
TERM SHEET (New Mortgage Financing)
Schedule
1.6
SCHEDULE
OF 2006 PROJECTED NOI
Schedule
1.8(a)
DESCRIPTION
OF PLANS AND SPECIFICATIONS FOR CONSTRUCTION WORK
Schedule
1.9
TITLE
OBJECTIONS AND LIST OF TITLE COMMITMENTS AND SURVEYS FOR EACH PROPERTY REVIEWED
BY INVESTCORP PRIOR TO DATE HEREOF
Schedule
2.1(a)
REQUESTED
ENDORSEMENTS
Schedule
3.1(b)
CONSENTS
Schedule
3.1(d)
LITIGATION
Schedule
3.1(e)
CONDEMNATION
Schedule
3.1(f)
LEASING
COMMISSIONS, TENANT IMPROVEMENT ALLOWANCES AND BROKERAGE AGREEMENTS AS OF
CONTRACT DATE
Schedule
3.1(g)
LEASES
Schedule
3.1(k)
ENVIRONMENTAL
REPORTS
Schedule
3.1(p)
TAX
APPEAL PROSECUTIONS
Schedule
3.4(b)
RETAINER
LETTERS
(vi)
This
CONTRIBUTION AND SALE AGREEMENT (this “Agreement”)
is
entered into as of this 24th
day of
March, 2006, by the direct and indirect wholly-owned subsidiaries of Equity
One,
Inc., a Maryland corporation (“Equity
One”),
described on Exhibit
A
(each of
the direct and indirect subsidiaries of Equity One described on Exhibit A being
referred to sometimes herein as a “Transferor”
and
collectively as “Transferors”
or
“Equity
One Parties”),
each
having an address at c/o Equity One, Inc., 0000 X.X. Xxxxx Xxxxxx Xxxxx, Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000; and Texas Retail Invest, LLC, a Delaware limited
liability company having an address at c/o Investcorp International Realty,
Inc., 000 Xxxx Xxxxxx, 00xx
xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (“Investcorp”).
As
used herein the term “Transferor”
refers
to each of the Equity One Parties with the express understanding that the
obligations herein of each Transferor with respect to covenants, representations
or warranties shall be joint and several.
RECITALS
WHEREAS,
Transferors and Investcorp wish to form a new joint venture to acquire and
recapitalize the Properties (as defined below);
WHEREAS,
each Transferor owns the Property or Properties set forth opposite such
Transferor’s name on Exhibit
A-1;
WHEREAS,
Transferors wish to transfer the Properties to the JV (as defined below) in
exchange for a combination of equity interests in the JV and cash
consideration;
WHEREAS,
upon Closing, the JV will purchase an undivided interest in each of the
Properties and accept contribution of an undivided interest in each of the
Properties;
WHEREAS,
Investcorp has received, had access to and/or reviewed the Diligence Materials
(as defined below) provided and made available by the Transferors;
WHEREAS,
at Closing, Transferors will repay the existing mortgage debt (the “Existing
Mortgage Debt”) which encumbers one or more of the Properties and, at Closing,
the Property Owning Subsidiaries (as defined below), as borrowers or
co-borrowers, shall obtain non-recourse financing (the “New
Mortgage Financing”)
in the
approximate principal amount of $323,400,000 and on terms otherwise acceptable
to the JV, to be secured by a mortgage or mortgages encumbering all of the
Properties; and
WHEREAS,
each of the parties hereto has been advised by the other parties and
acknowledges that the parties hereto would not be entering into this Agreement
without the representations, warranties and covenants which are being made
and
agreed to herein by each party hereto and that each party is entering into
this
Agreement in reliance on such representations, warranties and other
covenants.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, and in reliance on all representations,
warranties and covenants made by each of the parties hereto, Transferors and
Investcorp hereby agree as follows:
DEFINITIONS
The
following terms as used in this Agreement will have the meanings attributed
to
them as set forth below unless the context clearly requires another meaning.
The
terms set forth below do not constitute all defined terms set forth in this
Agreement. Such other defined terms shall have the meanings ascribed to them
elsewhere in this Agreement.
“Action”
shall
mean any claim, suit, litigation, mediation, labor dispute, arbitration,
condemnation proceeding, investigation or other action or
proceeding.
“Affiliate”
means,
with respect to any Person, any Person that directly or indirectly through
one
or more intermediaries, controls, or is controlled by or is under common control
with the Person specified. As used herein, “control” or “controlling” shall mean
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, by management agreement or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
“Agreed
Fair Market Value”
means,
for each Property, the amount indicated on Exhibit A-1
as the
Agreed Fair Market Value for such Property, which amount represents such
Property’s allocable share of the aggregate gross value of the
Properties.
“Agreement”
means
this Contribution and Sale Agreement, as it may be amended, modified and/or
supplemented from time to time.
“Appurtenances”
has
the
meaning set forth within the definition of Real Property.
“Assigned
Contracts”
means
all Contracts not terminated at or prior to the Closing.
“Authority”
means
a
governmental body or agency having jurisdiction over a Transferor or a Property,
as applicable.
“Business
Day”
means
any weekday that is not an official holiday in the States of New York, Florida
or Texas.
“Ceiling”
has
the
meaning set forth in Section
3.6.
“Centrefund”
has
the
meaning set forth in Section
1.3(a).
“Closing”
and
“Closing
Date”
have
the meanings set forth in Section
1.1.
“Closing
Statement”
has
the
meaning set forth in Section 5.12.
“Code”
means
the Internal Revenue Code of 1986, as amended, and applicable rules and
regulations thereunder. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
“Colony”
has
the
meaning set forth in Section
1.3(a).
2
“Contracts”
means,
subject to the terms of this definition below, all contracts, undertakings,
commitments, agreements, obligations, guarantees and warranties as of the date
of this Agreement (i) relating to a Property, and (ii) to which a
Transferor is a party or by which a Transferor is bound. “Contracts” includes,
without limitation, utility contracts, management contracts, maintenance and
service contracts, parking contracts, employment contracts, equipment leases
and
brokerage and leasing agreements, but excludes the Leases and the documents
evidencing, governing or securing the Existing Mortgage Debt. All Contracts
that
are not cancelable by Transferors on 30 days (or less) notice, without payment
of premiums or penalty, are described on Schedule
1
hereto.
“DCRP
Properties”
has
the
meaning set forth in Section
3.1(k).
“Deeds”
has
the
meaning set forth in Section
1.3(e).
“Deposit”
means
the sum of $10,000,000 in cash, deposited by Investcorp in escrow pursuant
to
that certain Escrow Agreement of even date herewith by and among Investcorp,
Transferors and the Title Company which is attached hereto as Exhibit
P.
“Diligence
Materials”
means
the items described on Exhibit
K.
“Dropped
Asset”
or
“Dropped
Assets”
have
the meanings set forth in Section
8.1(b).
“Dropped
Assets Cap”
has
the
meaning set forth in Section
8.1(c).
“Dropped
Property Notice”
has
the
meaning set forth in Section
8.1(b).
“Equity
One”
has
the
meaning set forth in the Preamble.
“Equity
One Improvement Holdback LC”
has
the
meaning set forth in Section
1.8(a).
“Equity
One Manager”
has
the
meaning set forth in Section
1.7.
“Equity
One Parties”
has
the
meaning set forth in the Introductory Paragraph of this Agreement.
“EQY”
has
the
meaning set forth in Section
1.3(a).
“Estoppels”
has
the
meaning set forth in Section
4.2.
“Estoppel
Cure Deposit”
has
the
meaning set forth in Section
4.2(b).
“Estoppel
Cure Escrow Agreement”
has
the
meaning set forth in Section
4.2(b).
“Excess
New Mortgage Financing”
means
an amount equal to the excess of the principal amount of the New Mortgage
Financing, as set forth in Section
1.5(b),
over
the aggregate amount of the Existing Mortgage Debt.
“Existing
Environmental Reports”
has
the
meaning set forth in Section
3.1(k).
3
“Existing
Lender”
means
each mortgagee with respect to the Existing Mortgage Debt.
“Existing
Mortgage Debt”
means
certain mortgage indebtedness secured by one or more of the Properties, the
original principal amount and the outstanding balance of which, as of the date
of this Agreement (including any accrued interest), is described in Exhibit C.
“Expense
Reimbursements”
has
the
meaning set forth in Section 5.4.
“Final
Statement”
has
the
meaning set forth in Section
5.12(c).
“Floor”
has
the
meaning set forth in Section
3.6.
“GAAP”
means
generally accepted accounting principles, consistently applied.
“Gross
Income from Operations”
has
the
meaning set forth in Section
1.6.
“Hazardous
Substances”
and
“Hazardous
Wastes”
have
the meanings set forth in Section 3.1(k).
“Highland”
has
the
meaning set forth in Section
1.3(a).
“Improvements”
has
the
meaning set forth within the definition of Real Property.
“Intangibles”
means
all intangible property owned or used by any Transferor in connection with
the
ownership, use, operation or development of any Property, including, without
limitation: (i) any right the Transferor may have to use the name currently
used with respect to such Property and any other trade name by which such
Property is known; (ii) the Assigned Contracts; (iii) the Leases, all
guaranties of the Leases, all security deposits under the Leases (unless
Transferors elect instead to have them credited to the JV at Closing), all
other
security, if any, under the Leases and any rent prepaid under the Leases; and
(iv) all licenses and any warranties, guaranties and other rights relating
to the ownership, use, operation or development of the Property to the extent
transferable.
“Intermediate
GP”
has
the
meaning set forth in Section
1.2(b).
“Intermediate
GP Operating Agreement”
means
the operating agreement of Intermediate GP, in the form of Exhibit
O.
“Intermediate
LP”
has
the
meaning set forth in Section
1.2(c).
“Intermediate
LP Partnership Agreement”
means
the limited partnership agreement, in the form of Exhibit
M.
“Investcorp”
has
the
meaning set forth in the Introductory Paragraph of this Agreement.
“JV”
has
the
meaning set forth in Section
1.2(a).
“JV
Partnership Agreement”
means
the limited liability company agreement of the JV, in the form of Exhibit
N.
4
“Land”
has
the
meaning set forth within the definition of Real Property.
“Law”
or
“Laws”
means
any applicable federal, state or local law, statute, rule, regulation,
ordinance, order, decree, requirement, code, notice of violation or rule of
common law, now or hereafter in effect, and in each case as amended, and any
judicial or administrative interpretation thereof by an Authority or otherwise,
including any judicial or administrative order, determination, consent decree
or
judgment.
“Leases”
means
all leases, including all amendments, modifications, supplements, extensions,
renewals and written waivers thereto, any assignments thereof and any guarantees
of the tenants’ or other occupants’ obligations thereunder, and, if expressly
consented to or acknowledged in writing by the applicable Transferor during
the
period of its ownership of such Property, all tenancies, subleases, licenses
or
other arrangements under which any party has any right to occupy all or any
part
of a Property.
“Loss”
or
“Losses”
means
any and all claims, losses, damages, costs, liabilities, obligations, causes
of
action and expenses, including, without limitation, reasonable attorneys’ fees
and disbursements of a party. In no event shall a Loss include a party’s
incidental or consequential damages.
“Material
Adverse Deviation(s)”
has
the
meaning as set forth in Section
4.2(b).
“Major
Tenants”
means
those Tenants who occupy more than 10,000 square feet of rentable space in
a
Property.
“Mortgaged
Property”
or
“Mortgaged
Properties”
means
one or all, as applicable, of the Properties set forth on Exhibit C
which
currently serve as security for the Existing Mortgage Debt.
“Net
Equity Value”
means
the excess of the Agreed Fair Market Value of a Property, as adjusted pursuant
to Article
V,
over
the allocable portion of the New Mortgage Financing encumbering such Property
as
of Closing.
“Net
Operating Income”
has
the
meaning set forth in Section
1.6.
“New
Lender”
means
the lender of the New Mortgage Financing.
“New
Mortgage Financing”
has
the
meaning set forth in the Recitals of this Agreement.
“New
Space”
has
the
meaning set forth in Section
1.8(a).
“New
Title Objections”
has
the
meaning set forth in Section
1.9(a).
“Non
Objectionable Encumbrances”
has
the
meaning set forth in Section
1.9(a).
“Operating
Expenses”
has
the
meaning set forth in Section
1.6.
5
“Permitted
Exceptions”
means,
with respect to a Property, (i) subject to Section
1.9
hereof,
all matters listed as exceptions in the Title Commitment or pro forma title
policy delivered by the Title Company to Investcorp and Equity One prior to
the
date hereof (including, without limitation, all standard preprinted exclusions
and exceptions in Form T-1: Owner Policy of Title Insurance promulgated by
the
Texas Department of Insurance other than exceptions relating to
(a) so-called creditors’ rights, mechanics’ liens or parties in possession
(other than tenants under the Leases or parties’ claims under them),
(b) unrecorded easements, or claims to easements, (c) liens for
delinquent real estate taxes, including special assessments, with respect to
such Property, (d) the liens of the Existing Mortgage Debt (it being understood
that such Existing Mortgage Debt shall be repaid at Closing as set forth in
Section
1.5(a)),
(e)
any lien or encumbrance voluntarily created by any Transferor in violation
of
this Agreement after the date hereof, (f) for purposes of the Deeds, standard
preprinted exceptions 3, 4, and 6 in Form T-1: Owner Policy of Title Insurance
promulgated by the Texas Department of Insurance, (g) any mortgage, deed of
trust, judgment lien, mechanic’s and materialmen’s liens and (h) other liens and
encumbrances against the Property (other than liens for taxes and assessments
which are not delinquent) which either secure indebtedness or can be removed
as
a title exception by the payment of a liquidated amount (except, in the case
of
clauses
(g)
and
(h),
for any
of such items which a tenant under a Lease is obligated to cure and remove),
(ii) subject to Section
1.9
hereof,
matters shown on any survey of such Property provided by any Transferor or
otherwise obtained by Investcorp or the JV, in each case prior to the date
hereof, (iii) all title matters reflecting the existence or terms of Leases
shown on the Rent Roll, and all liens and encumbrances which tenants under
Leases are obligated to cure and remove and (iv) zoning, building, fire,
health, environmental and pollution control laws and other land use laws,
ordinances, rules and regulations.
“Person”
means
any individual, corporation, partnership, joint venture, association,
joint-stock company, business trust, limited liability company, trust,
unincorporated organization or government or a political subdivision, agency
or
instrumentality thereof or other entity or organization of any
kind.
“Personal
Property”
means
all tangible personal property owned by any Transferor and located on or in
or
used in connection with the respective Real Property, including, without
limitation, all equipment, building systems and appliances owned by any
Transferor and relating to the Real Property and other items listed in
Exhibit F.
“Portfolio
Investor”
has
the
meaning set forth in Section
1.3(b).
“Property”
means
each of the properties listed on Exhibit
A
and
commonly known by the applicable name set forth on Exhibit
A,
including the applicable Real Property and all Personal Property and Intangibles
related thereto, and “Properties”
shall
mean all such properties collectively, including all applicable Real Property,
Personal Property and Intangibles.
“Property
GP”
and
“Property
GPs”
have
the meanings set forth in Section
1.2(d).
“Property
Owning Subsidiary”
and
“Property
Owning Subsidiaries”
have
the meanings set forth in Section
1.2(c).
6
“Property
Management and Leasing Agency Agreement”
has
the
meaning set forth in Section
1.7.
“Real
Property”
means
the land legally described in those certain title commitments and pro forma
title policies identified on Exhibit B
hereto
with respect to each Property, as the same may be modified from time to time
to
conform the land surveys identified on Exhibit
B
hereto
(the parcels of land so described being referred to herein as the “Land”),
together with all rights, licenses, privileges and easements appurtenant
thereto, including, without limitation, all minerals, oil, gas and other
hydrocarbon substances on and under and that may be produced from the Land,
as
well as all development rights, land use entitlements and rights in off-site
facilities and amenities servicing the Land or any improvements located thereon,
including, without limitation, air rights, water, water rights and riparian
rights relating to the Land and any rights-of-way or other appurtenances used
in
connection with the beneficial use and enjoyment of the Land and all of each
Transferor’s right, title and interest in and to all roads, easements, rights of
way, strips or gores and alleys adjoining or servicing the Land (collectively,
the “Appurtenances”)
and
all improvements and fixtures which are affixed to the Land or the Appurtenances
or which are otherwise integral to the occupancy of the Land or the operation
of
the buildings, structures or other improvements thereon (other than trade
fixtures of tenants which, by the terms of the applicable Leases, are owned
by
such tenants and may be removed by such tenants upon the expiration of such
Leases) including, without limitation, the building(s) located on the Land
and
all fixtures and equipment used in connection with the operation or occupancy
of
the Land, such improvements or the Appurtenances, including, without limitation,
heating and air conditioning systems and facilities used to provide any services
on the Land or the Appurtenances or for the improvements, and all parking and
related facilities and amenities (collectively, the “Improvements”).
“Related
Agreements”
means,
collectively, all documents to be executed and delivered in connection with
this
Agreement.
“Rent
Roll”
has
the
meaning set forth in Section 3.1(g).
“Response
Notice”
has
the
meaning set forth in Section
1.9(a).
“Schedule
5.9 Leases”
has
the
meaning set forth in Section
5.9(a).
“Seller”
and
“Sellers”
have
the meaning set forth in the Introductory Paragraph of this
Agreement.
“Section
4.4 Leases”
has
the
meaning set forth in Section
5.9(b).
“Shortfall
Guaranty”
has
the
meaning set forth in Section
1.6.
“Subsidiaries”
means
the entities directly and indirectly owned by the JV, including the
Property-Owning Subsidiaries.
“Tenant”
means
any Person who occupies or has a right to occupy space at a Property pursuant
to
a Lease.
7
“Texas
Equity Holdings”
has
the
meaning set forth in Section
1.3(a).
“Title
Charges”
has
the
meaning set forth in Section
5.10.
“Title
Commitment”
means
the extended coverage preliminary title report on each Real Property and the
commitment to issue the Title Policy obtained from the Title Company and
delivered to the JV, together with all documents referred to in such preliminary
title report or title commitment.
“Title
Company”
means
Chicago Title Insurance Company.
“Title
Issues Indemnity”
means
the Indemnity Agreement Regarding Specified Title Issues in the form annexed
hereto as Exhibit
V.
“Title
Objections”
has
the
meaning set forth in Section
1.9(a).
“Title
Policy”
or
“Title
Policies”
shall
have the meanings set forth in Section 2.1(a).
“Transferor”
has
the
meaning set forth in the Introductory Paragraph of this Agreement.
“Twelve-Month
Portfolio NOI Shortfall”
has
the
meaning set forth in Section
1.6.
“Unfunded
Leasing Expenses”
has
the
meaning set forth in Section
5.9(a).
“Westgate/Forestwood
Debt”
means
(a) that certain loan in the original principal amount of $30,240,000 made
by
Xxxxx Fargo Bank, National Association to Fry Road Retail, Ltd. and (b) that
certain loan in the original principal amount of $7,425,000 made by Principal
Life Insurance Company to Forestwood Equity Partners, L.P.
ARTICLE
I -
FORMATION OF NEW ENTITIES;
CONTRIBUTION
AND SALE OF PROPERTIES
1.1 Closing
Date.
The
closing of the transactions contemplated by this Agreement (the “Closing”)
shall
occur on or about April 19, 2006 (the “Scheduled
Closing Date”).
Either Transferors, in order to perform any covenant or satisfy any condition
precedent to Investcorp’s obligation to proceed to Closing, or Investcorp, but
only in order to satisfy any conditions of New Lender to the closing of the
New
Mortgage Financing to be advanced at Closing, shall have the right in their
respective sole and absolute discretion to extend the Scheduled Closing Date,
if
necessary, from time to time by notice to the other party delivered on or prior
to the date then set for Closing (for a maximum extension period (served
coterminously) not to exceed thirty (30) days in the aggregate) (the
“Extended
Closing Date”;
the
Scheduled Closing Date, the Extended Closing Date or such other date as the
parties hereto mutually agree to close shall hereinafter be referred to as
the
“Closing
Date”).
1.2 Formation
of New Entities.
Prior
to
Closing, the following new entities shall be formed:
8
(a) a
Delaware limited liability company named “EQYINVEST TEXAS, LLC” (the
“JV”);
(b) a
Delaware limited liability company named “EQYINVEST TEXAS GP, LLC” (the
“Intermediate
GP”)
which
shall be the sole general partner of the Intermediate LP;
(c) a
Delaware limited partnership named “EQYINVEST TEXAS, LP” (the “Intermediate
LP”)
which
shall be the sole limited partner of each of the Property Owning
Subsidiaries;
(d) one
or
more Texas limited liability partnerships as may be determined by Investcorp
having the respective names set forth on Schedule
1.2(a)
(each, a
“Property
Owning Subsidiary”
and
collectively, the “Property
Owning Subsidiaries”),
the
limited partnership interests in each of which shall be wholly-owned by the
Intermediate LP;
(e) one
or
more Delaware limited liability companies having the respective names set forth
on Schedule
1.2(a)
(each, a
“Property
GP”
and
collectively, the “Property
GPs”),
each
of which shall be the sole general partner of the corresponding Property Owning
Subsidiary and each of which shall be wholly-owned by the Intermediate
LP.
A
chart
showing the JV, the Intermediate LP, the Intermediate GP, the Property Owning
Subsidiaries, the Property GPs and their ownership structure is annexed hereto
as Schedule
1.2(b).
1.3 Contribution
and Sale of Properties.
(a) The
current ownership structure of the Properties is shown on Schedule
1.3.
(b) Immediately
prior to Closing, the Properties shall be deemed transferred to a “Qualified
Intermediary” within the meaning of Treas. Reg. Section 1.1031(k)-1(g)(4) chosen
by Equity One, and the Qualified Intermediary shall transfer each Property
to
the appropriate Property Owning Subsidiary in exchange for consideration as
set
forth below (provided that such transfers by the Qualified Intermediary to
the
Property Owning Subsidiaries shall be deemed to have been made first to the
JV,
which shall thereafter be deemed to transfer undivided interests in each of
the
Properties to the respective Subsidiaries which directly and indirectly own
the
beneficial interests in the respective Property Owning Subsidiaries, which
Subsidiaries shall thereafter be deemed to transfer such undivided interests
to
the respective Property Owning Subsidiaries, in the appropriate percentages
set
forth in each of the Property Owning Subsidiaries’ respective organizational
documents).
(c) To
evidence all of such transfers, each Transferor shall execute and deliver a
deed
with respect to its Property in the form of Exhibit G-1, properly completed
(collectively, the “Deeds”),
and
convey fee title to the corresponding Property Owning Subsidiary at Closing,
subject only to the Permitted Exceptions, whereupon all of such transfers shall
be deemed to occur.
9
(d) At
Closing, the Equity One JV Interest (as hereinafter defined) shall be delivered
by the Qualified Intermediary, upon receipt, to Transferors, and immediately
deemed distributed by Transferors to Equity One (via any necessary intermediate
distributions) and then contributed by Equity One to EQY Texas Portfolio
Investor LLC (“Portfolio
Investor”),
a
newly formed Florida limited liability company, wholly owned by Equity One,
Inc.
1.4 Consideration
to be Received for the Properties.
At
Closing, the
Qualified Intermediary shall receive on behalf of the Transferors (1) a 20%
member interest
in
the JV (the “Equity
One JV Interest”),
(2)
cash in the amount of 80% of the aggregate Net Equity Value of the Properties,
and (3) the net proceeds of the New Mortgage Financing remaining after repayment
of the sum of (i) the outstanding principal balance of the Existing Mortgage
Debt immediately prior to Closing plus (ii) any prepayment fees and other
charges due to the lenders in connection with the repayment of the Existing
Mortgage Debt (other than prepayment fees for the Westgate/Forestwood Debt,
as
set forth on Schedule
1.5(a)
hereof,
which shall be paid by the JV).
1.5 Contribution
of Cash by Investcorp, New Mortgage Financing.
(a) At
Closing, Investcorp shall contribute to the XX xxxx in an amount equal to the
sum of (x) 80% of the excess of the aggregate Agreed Fair Market Value (as
adjusted at Closing pursuant to Article
V)
of all
Properties over the net proceeds (i.e., after payment of all costs incurred
in
connection with obtaining the New Mortgage Financing) of the New Mortgage
Financing and (y) 80% of any prepayment fees required to be paid to the lenders
in connection with the prepayment of the Westgate/Forestwood Debt as set forth
on Schedule
1.5(a)
hereof,
in exchange for an 80% member interest in the JV. The cash so contributed by
Investcorp shall be contributed by the JV to the respective Property Owning
Subsidiaries and applied by them at Closing to pay the cash consideration owed
in respect of the acquisition of the Properties as set forth in Section
1.4,
and to
pay any prepayment fees due to the Existing Lenders in connection with the
prepayment of the Westgate/Forestwood Debt as more particularly set forth on
Schedule
1.5(a)
hereof.
(b) Investcorp
shall arrange for the New Mortgage Financing on behalf of the JV and the
Property Owning Subsidiaries. The New Mortgage Financing shall (i) have terms
consistent with that certain term sheet annexed hereto as Schedule
1.5(b)
(the
“Term
Sheet”),
with
such modifications, amendments and changes to such Term Sheet (other than any
changes to the existing provisions thereof with respect to any guaranty,
indemnity or other liability of any Equity One affiliate, which shall require
the approval of Transferors) as Investcorp deems reasonably necessary or
appropriate in order to consummate the New Mortgage Financing, (ii) be in an
aggregate principal amount not exceeding $323,400,000.00 and (iii) be fully
advanced at Closing. The proceeds of the New Mortgage Financing shall be applied
by Transferors to pay the full outstanding principal balance of the Existing
Mortgage Debt plus any prepayment fees and other charges due to the lenders
in
connection with the repayment of the Existing Mortgage Debt (other than
prepayment fees in respect of the Westgate/Forestwood Debt as set forth on
Schedule
1.5(a)
hereof),
with the net proceeds remaining thereafter being retained by the Qualified
Intermediary on behalf of the Transferors.
10
1.6 Shortfall
Guaranty.
At
Closing, Transferors shall enter into a shortfall guaranty (the “Shortfall
Guaranty”)
with
the JV, in the form annexed hereto as Exhibit
D,
pursuant to which Transferors will deposit either cash or a letter of credit
in
the amount of $2,089,191 (the “NOI
Escrow”)
and
agree to pay to the JV an amount not in excess of the NOI Escrow in respect
of
the Twelve-Month Portfolio NOI Shortfall, if any, within thirty (30) days after
the same is finally determined. In the event that at the end of the NOI
Measuring Period, the Twelve-Month Portfolio NOI Shortfall is equal to or less
than zero, then the NOI Escrow shall be released and disbursed to Transferors.
In the event that at the end of the NOI Measuring Period, the Twelve-Month
Portfolio NOI Shortfall is greater than zero, then (i) an amount equal to the
Twelve-Month Portfolio NOI Shortfall shall be distributed from the NOI Escrow
to
the members of the JV in accordance with the terms and conditions of the JV
Partnership Agreement and (ii) any remaining balance of the NOI Escrow shall
be
distributed to Transferors. The JV shall not be entitled to receive from
Transferors any additional or supplemental funds in the event that the
Twelve-Month Portfolio NOI Shortfall exceeds the NOI Escrow.
“Twelve-Month
Portfolio NOI Shortfall”
means
the positive difference, if any, of (a) the Target NOI minus (b) the actual
Net
Operating Income for all of the Properties acquired by the Property Owning
Subsidiaries at Closing for the first 12 full calendar months (the “NOI
Measuring Period”)
after
the month in which Closing occurs, as determined by agreement of the parties
hereto, pursuant to calculations in accordance with the methodology used by
Equity One in generating the 2006 Budgets to be provided by Equity One Manager
within forty-five (45) days after the last day of the NOI Measuring Period,
and
if the parties hereto fail to agree on such determination within seventy-five
(75) days after the last day of the NOI Measuring Period, such determination
shall be made within ninety (90) days after the last day of the NOI Measuring
Period by an independent “big four” public accounting firm retained by the JV,
in accordance with the methodology used by Equity One in generating the 2006
Budgets. Solely for purposes of determining the Twelve-Month Portfolio NOI
Shortfall pursuant to the provisions of this Section
1.6,
the
2006 Budgets shall be deemed to have been adopted by the JV and in effect for
the entire NOI Measuring Period.
“Target
NOI”
means
$30,840,437, which is the aggregate sum of the projected Net Operating Income
(the “2006
Projected NOI”)
for
each Property as set forth in the 2006 budgets (the “2006
Budgets”)
annexed hereto as Schedule
1.6,
provided
that (a)
in the event a Property is a Dropped Asset, Target NOI shall be reduced by
the
2006 Projected NOI for such Property; and (b) if a Property, or any portion
thereof (including, without limitation, any portion of the Green Oaks Property)
is sold during the NOI Measuring Period, Target NOI shall be reduced by the
pro-rata portion of the 2006 Projected NOI for such Property allocable on a
per-diem basis (and otherwise in accordance with the methodology used by Equity
One in generating the 2006 Budgets) to the period remaining in the NOI Measuring
Period commencing on the date such Property (or portion thereof) is
sold.
“Net
Operating Income”
means
the amount obtained by subtracting Operating Expenses from Gross Income from
Operations.
11
“Gross
Income from Operations”
shall
mean all income, computed in accordance with the methodology used by Equity
One
in generating the 2006 Budgets and properly allocable to the NOI Measuring
Period, derived from the ownership and operation of the Properties from whatever
source, including, but not limited to, rents, percentage rents, utility charges,
escalations, “common area maintenance” and real estate tax reconciliations for
the year not yet paid or received, forfeited security deposits, interest on
credit accounts, service fees or charges, license fees, parking fees, rent
concessions or credits, other required pass throughs and interest on reserve
funds, but excluding sales, use and occupancy or other taxes on receipts
required to be collected by the Property Owning Subsidiary for remittance to
any
governmental authority, refunds and uncollectible accounts, sales of furniture,
fixtures and equipment, insurance proceeds (other than business interruption
or
other loss of income insurance), condemnation awards, unforfeited security
deposits, utility and other similar deposits.
“Operating
Expenses”
shall
mean the total of all expenditures, computed in accordance with the methodology
used by Equity One in generating the 2006 Budgets, and properly allocable to
the
NOI Measuring Period, of whatever kind relating to the operation, maintenance
and management of the Properties that are incurred on a regular monthly or
other
periodic basis, including without limitation, utilities, ordinary repairs and
maintenance, insurance premiums, license fees, property taxes and assessments,
advertising expenses, management fees equal to 4% of the Base Rent Income (as
defined in the 2006 Budgets) of each Property, payroll and related taxes,
computer processing charges, operational equipment lease payments, and other
similar costs, but excluding depreciation, debt service, leasing fees and tenant
improvement costs and allowances, other capital expenditures and contributions
to reserve funds.
1.7 Management
Agreement.
At
Closing, the Property Owning Subsidiaries and Equity One Manager shall execute
and deliver one or more Management Agreements (collectively, the “Property
Management and Leasing Agency Agreement”)
in the
form of Exhibit
I.
“Equity
One Manager”
means
Equity One Realty & Management Texas LP., a Texas limited partnership; the
wholly-owned indirect subsidiary of Equity One, Inc. that will enter into the
Property Management and Leasing Agent Agreement at Closing.
1.8 Construction
of New Space at Xxxxxx, Creekside, Xxxxxxxxxxx and Xxxxx Park; Potential Green
Oaks transaction; Tenant Improvements for Ski Shop, Catherine’s and The Scrap
Book.
12
(a) Cost
of Certain Base Building Work.
Equity
One has commenced and is performing the following work, all as more particularly
described in the plans and specifications described on Schedule
1.8(a)
(the
“Construction
Work”):
(i)
construction and expansion work to complete certain base building improvements
(the “New
Space”)
at the
Properties known as Xxxxxx, Creekside, Xxxxxxxxxxx and Xxxxx Park and (ii)
construction work to perform certain façade renovations to the Property known as
Hedwig. Transferors have undertaken and have the obligation to continue the
Construction Work after the Closing Date, if not theretofore completed. With
respect to the Construction Work at Xxxxxx and at Hedwig, Transferors shall
deposit a letter of credit in the amount of $3,000,000 (the “Equity
One Improvement Holdback LC”)
with
the Title Company at Closing pursuant to that certain Post-Closing Escrow
Agreement attached hereto as Exhibit
Q.
Transferors shall complete the Construction Work at their cost and expense
in
accordance with the ordinary course of business of the JV and the applicable
Property Owning Subsidiaries, and upon completion of the Construction Work
with
respect to Xxxxxx and Xxxxxx, the Equity One Improvement Holdback LC shall
be
released to Transferors. If the JV determines, by reason of entering into a
lease with HEB or otherwise, not to complete all of the Construction Work in
respect of Xxxxxx, the Equity One Improvement Holdback LC may, at Transferor’s
direction, be reduced by an amount equal to the cost of the portion of the
Construction Work so determined not to be completed. If the JV has not directed
Transferors to complete all of the Construction Work at Xxxxxx within three
years after the date hereof, the Equity One Improvement Holdback LC may, at
Transferor’s direction, be reduced by an amount equal to the cost of the portion
of the Construction Work that Transferors have not been directed to complete.
Upon completion of the Construction Work with respect to Hedwig, the Equity
One
Improvement Holdback LC may, at Transferor’s direction, be reduced by an amount
equal to the cost of such Construction Work. If Transferors fail, after 60
days
notice from Investcorp (or such longer period as may be necessary, with due
diligence, to cure any such failure), to perform the Construction Work with
respect to Xxxxxx or Xxxxxx in a timely manner, substantially in accordance
with
Schedule
1.8(a)
and
otherwise in the ordinary course of business of the JV and the applicable
Property Owning Subsidiaries, Investcorp may direct the Title Company to draw
the Equity One Improvement Holdback LC, or such portion thereof as is required
to cure each failure by Transferors, and apply the proceeds of such draw to
cause the applicable Construction Work at Xxxxxx or Xxxxxx to be performed.
(b) Intentionally
Omitted.
(c) Transferors
shall perform and pay for the tenant improvement work, leasing commissions
and
other tenant costs with respect to the initial term of the proposed Lease with
the Tenant known as the “Ski Shop” located at the “Hedwig” Property (if such
Lease is entered into) and the initial term of the existing Leases with the
Tenants known as “Catherine’s,” located at the “Hedwig” Property and “The Scrap
Book” located at the “Xxxxx Park” Property.
(d) Marble
Falls/Xxxxxxxxxx Lumber Sale.
Transferors and Investcorp hereby agree that the Property known as Marble
Falls/Xxxxxxxxxx is not a “Property” being conveyed pursuant to the terms and
conditions of this Agreement.
(e) Survival.
The
terms and provisions of this Section 1.8 shall survive the Closing.
13
1.9 Title
to Properties.
(a) Prior to the date hereof, Investcorp has received and reviewed
the title commitments and surveys delivered by the Title Company and land
surveyors with respect to each Property and has delivered to Transferors and/or
Transferors’ attorneys, written notice of Investcorp’s objections (the
“Title
Objections”)
to any
survey matters and to any liens, encumbrances or other title exceptions revealed
by the title commitments and surveys which Title Objections are set forth on
Schedule
1.9
and
shall not be Permitted Exceptions. Transferors shall be obligated to remove
such
Title Objections from the applicable Title Policies at or prior to Closing,
provided that Transferors shall not be required under any circumstances to
incur
any cost or liability in excess of $1,000,000 in the aggregate to cure or remove
any Title Objections (other than the Existing Mortgage Debt which Transferors
shall be obligated to remove) from the Title Policies. Investcorp hereby agrees
that, but for the Title Objections set forth on Schedule
1.9,
the
title commitments and surveys described on Schedule
1.9
are
acceptable to it. Investcorp retains and shall have the right to object by
delivery of written notice to Transferors and Transferors’ attorneys, on or
prior to five (5) days after receipt of a new exception or encumbrance (and
if
the Closing Date is scheduled to occur on a date which is ten (10) days or
less
days after receipt of a new exception or encumbrance, then the Closing Date
shall be extended until the date which is the third (3rd) Business Day after
receipt of the Response Notice) which is not a Permitted Encumbrance, and which
was not revealed by the title commitments or surveys for the Properties received
prior to the date hereof (the “New
Title Objections”).
Investcorp shall not be entitled to object to, and shall be deemed to have
approved, any liens, encumbrances or other title exceptions, (1) over which
the
Title Company is willing to insure (without additional cost to Investcorp
including defense costs) (subject to the prior approval of Investcorp, which
shall not be unreasonably withheld) or (2) which tenants under Leases are
required to cure and remove or (3) which will be extinguished upon the transfer
of the Properties to the Property Owning Subsidiaries (collectively, the
“Non
Objectionable Encumbrances”);
provided, however, Transferors shall be obligated to remove and cure at or
prior
to Closing any mortgage (including the Existing Mortgage Debt), deed of trust,
judgment lien, mechanic’s and materialmen’s liens and other liens and
encumbrances against the Property (other than liens for taxes and assessments
which are not delinquent) which were voluntarily permitted, created or caused
by
Transferors after the date hereof. Transferors shall be obligated to remove
any
New Title Objections (other than Non Objectionable Encumbrances) from the
applicable Title Policies at or prior to Closing, provided that Transferors
shall not be required under any circumstances to incur any cost or liability
in
excess of $1,000,000 in the aggregate to cure or remove any Title Objections
and
New Title Objections from the Title Policies (other than the Existing Mortgage
Debt which Transferors shall be obligated to remove); provided, however, that
if
Transferors elect not to incur any cost or liability in excess of $1,000,000
to
cure or remove any Title Objections, then, subject to Article VIII, Investcorp
shall have the right to treat such Property, to which such Title Objection
pertains, as a Dropped Asset.
In the
event Transferors notify Investcorp, within five (5) Business Days after receipt
of notice from Investcorp as to any New Title Objections, that Transferors
are
unable or unwilling to cure any Title Objections or New Title Objections (the
“Response
Notice”),
then
Investcorp shall notify Transferors of its intention to (i) treat the Property
to which such New Title Objection pertains as a Dropped Asset, subject to
Article VIII, (ii) terminate this Agreement with a full refund of its deposit
or
(iii) proceed to Closing and accept title to the Properties subject to such
Title Objections or New Title Objections, without any adjustment to the Agreed
Market Value of any Property, or any liability or obligation on the part of
Transferors by reason of such Title Objections or New Title Objections. Pursuant
to Section
8.1,
Transferors shall have the right to treat a Property or Properties as Dropped
Assets in order to satisfy the provisions of this Section
1.9.
In the
event that Investcorp fails to notify Transferors of its intention to treat
a
Property as a Dropped Asset, or terminate or close over such Title Objections
or
New Title Objections within three (3) days following the Response Notice, then
Investcorp shall be deemed to have elected to close the transactions
contemplated hereunder, subject to the Title Objections or New Title Objections
(without any adjustment to the Agreed Market Value of any Property, or any
liability or obligation on the part of Transferors by reason of such Title
Objections or New Title Objections.
14
(b) Notwithstanding
anything to the contrary set forth herein, Transferors shall be obligated to
remove or cause the Title Company to insure over (i) all delinquent tax liens,
all liens evidencing mortgage indebtedness, including, without limitation,
the
Existing Mortgage Debt, all mechanics liens and all judgment liens affecting
the
Properties except to the extent the obligation to remove any such monetary
lien
is the obligation of a Tenant under a Lease and (ii) any New Title Objection
affirmatively created by an act of a Transferor or any Affiliate thereof in
breach of this Agreement after the date hereof.
(c) Notwithstanding
anything to the contrary set forth herein, all “Indemnified Title Matters”, as
defined in the Title Issues Indemnity, shall be Permitted Exceptions for all
purposes of this Agreement.
(d) Notwithstanding
anything to the contrary herein, the parties acknowledge that surveys for
Parkwood and Creekside have not been delivered to Investcorp as of the date
hereof. Any title issues that such surveys may show shall be added to the
“Indemnified Claims” under the Title Issues Indemnity.
ARTICLE
II -
CERTAIN COVENANTS AND
CONDITIONS
TO CLOSING
2.1 Certain
Covenants and Conditions to Investcorp’s Obligations.
The
obligation of Investcorp to consummate the transactions contemplated hereunder
shall be subject to the satisfaction by the applicable Transferor, or waiver
by
Investcorp, of each of the conditions set forth below and the performance by
the
applicable Transferor of its respective obligations set forth below and
elsewhere in this Agreement, in each case on or before the Closing Date unless
provided otherwise. None of the transactions contemplated in this Agreement
shall be consummated unless all of the transactions contemplated in this
Agreement are simultaneously consummated, provided that the closing of the
New
Mortgage Financing shall not be a condition precedent to Investcorp’s obligation
to consummate the transactions contemplated hereunder.
(a) Title
Insurance.
The
respective Transferors shall cause to be issued to the applicable Property
Owning Subsidiary at the Closing with respect to each Property an
original title insurance policy on Form T-1: Owner Policy of Title Insurance
promulgated by the Texas Department of Insurance (or a fully effective marked
up
commitment or pro forma title policy which has the same legal effect) issued
by
the Title Company in
the
amount of the Agreed Fair Market Value with respect to such Property, dated
as
of the Closing Date, insuring fee simple title to the Real Property in the
applicable Property Owning Subsidiary and including the endorsements set forth
on Schedule
2.1(a)
hereof,
which shall be paid for by Transferors, subject only to the Permitted Exceptions
(such title insurance policies are individually referred to as a “Title
Policy”
and
collectively as the “Title
Policies”).
(b) Accuracy
of Representations and Warranties; Performance of Covenants.
The
representations and warranties of the Transferors contained herein shall be
and
remain true and correct in all material respects (except if limited by their
terms to a materiality standard, in which case they shall be and remain true
and
correct in all respects) on and as of the Closing Date (except for
representations and warranties that speak of a specific date or time other
than
the date of this Agreement, which need only be true and correct (to the extent
aforesaid) as of such date or time). Transferors shall have performed or
tendered performance of all of their covenants and agreements hereunder in
all
material respects.
15
(c) No
Injunction.
There
shall not be in effect any order, decree or injunction of a court or agency
of
competent jurisdiction which enjoins or prohibits consummation of the
transactions contemplated by this Agreement.
(d) Execution
of JV Partnership Agreement, Intermediate GP Operating Agreement, the
Intermediate LP Partnership Agreement, Property Management and Leasing Agency
Agreement.
The JV
Partnership Agreement, the Intermediate GP Operating Agreement, the Intermediate
LP Partnership Agreement and the Property Management and Leasing Agency
Agreement shall have been executed and delivered and shall be in full force
and
effect.
(e) Contribution.
Transferors shall have consummated and completed each of the transactions
described and set forth in Section
1.3
hereof.
(f) Repayment
of Existing Mortgage Debt.
Transferors shall have made arrangements with Existing Lender to accept
repayment of the entire amount of the Existing Mortgage Debt to Existing Lender
at Closing. Transferors shall arrange for delivery by Existing Lender at Closing
of such pay-off letters, release documents, financing statement terminations
and
such other documents as Existing Lender is required to provide and which
Investcorp and/or the Title Company may reasonably require in order to
effectuate the repayment of the Existing Mortgage Debt as contemplated by
Section
1.5.
(g) Delivery
of Transfer Documents.
At
Closing, the respective Transferor shall execute and deliver, or cause to be
executed and delivered, to Investcorp, the JV or the applicable Property Owning
Subsidiary, through customary escrow arrangements or otherwise, the following,
in form and substance as set forth below or as otherwise reasonably satisfactory
to Investcorp:
(i) Contribution
and Sale of Properties.
In
connection with the transactions contemplated in Section 1.3 hereof, Transferors
and Portfolio Investor shall deliver to Investcorp an indemnity, in the form
attached to this Agreement as Exhibit R, indemnifying and holding Investcorp
harmless from any and all costs, damages, expenses, losses and claims that
(x)
may be incurred by Investcorp as a result of any challenge to the validity
of
any of the transactions described and set forth in Section 1.3 of this Agreement
and/or (y) would not have been incurred but for the transactions described
and
set forth in Section 1.3 hereof (other than execution and delivery of the
Deeds);
(ii) Deeds.
The
appropriate Texas specific form of deed for each Property, the form of which
is
attached to this Agreement as Exhibit G-1,
executed by the applicable Transferor, in recordable form conveying each
Property to the applicable Property Owning Subsidiary, subject only to the
Permitted Exceptions;
16
(iii) Bills
of Sale.
A xxxx
of sale substantially in the form attached to this Agreement as Exhibit G-2,
executed by the applicable Transferors, assigning, conveying and warranting
to
the applicable Property Owning Subsidiary title to the Personal Property, free
and clear of all encumbrances, except for the Permitted Exceptions;
(iv) Assignment
and Assumption of Leases.
An
assignment and assumption agreement in substantially the form attached to this
Agreement as Exhibit H,
executed by the applicable Transferor, whereby the applicable Transferor assigns
such Transferor’s right, title and interest in and to the Leases (including,
without limitation, all guaranties and security deposits, other than letters
of
credit, and/or other deposits thereunder not previously applied in accordance
with the terms of the applicable Leases and reflected on the Rent Roll attached
hereto as Exhibit J-1,
all of
which interest in such security deposits shall be delivered to the applicable
Property Owning Subsidiary) to the applicable Property Owning Subsidiary, and
such entity assumes the obligations accruing thereunder from and after the
Closing Date;
(v) Letters
of Credit.
With
respect to any letters of credit that secure Tenants’ obligations under the
Leases, the Transferors shall use their reasonable good faith efforts to cause
such letters of credit to be delivered or assigned to, or reissued in favor
of,
the applicable Property Owning Subsidiary, and, if necessary, shall use their
reasonable good faith efforts to enforce the terms and conditions of any such
letter of credit prior to such delivery, assignment or reissuance;
(vi) Entity
Transfer Certificate(s).
Each
Transferor shall deliver an entity transfer certification confirming that such
Transferor is not a “foreign person” as defined in Section 1445(f)(3) of
the Code;
(vii) Rent
Roll.
A Rent
Roll for each of the Properties dated
no later than five (5) Business Days
prior to
the Closing Date, which Rent Roll will be used to identify all Leases of space
at the Property for purposes of this Agreement as of the date thereof. By their
delivery thereof, Transferors shall be deemed to have represented to Investcorp
that such Rent Roll, as of the date thereof, is true, complete and correct
in
all material respects (including, without limitation, the amount of unapplied
security deposits and aging report);
(viii) Title
Insurance.
The
Title Policies shall have been received or the Title Company shall be committed
to the issue the Title Policies in accordance with Sections
1.9
and
2.1(a)
hereof;
(ix)
Notice
to Tenants.
For
each Property, an original notice to Tenants, signed by the applicable
Transferor, advising such Tenants of the transfer of title to the applicable
Property Subsidiary, which notice may be delivered to Tenants after the
Closing;
(x)
Assignment
and Assumption of Contracts, Warranties, Guarantees and Other Intangible
Property.
An
assignment and assumption of contracts, warranties and guarantees and other
intangible property in the form attached hereto as Exhibit J-2
to the
applicable Property Owning Subsidiary, executed by the applicable Transferor,
whereby the applicable Transferor assigns the Transferor’s right, title and
interest in and to the Intangibles related to each Property;
17
(xi) Tenant
Estoppels.
With
respect to each Property, Investcorp shall have received Estoppels or Transferor
Estoppels disclosing no Material Adverse Deviations, all to the extent required
or permitted by Section
4.2,
from
(x) all of the Major Tenants, (y) tenants occupying at least seventy percent
(70%) of the space at such Property leased to tenants other than Major Tenants
and (z) parties to reciprocal easement and similar agreements encumbering such
Property;
(xii) Leases.
Originals of, or, if not in Transferors’ possession, copies of all Leases
certified by Transferors to be true, correct and complete copies thereof, and
to
the extent in Transferors’ possession, all plans and specifications (including
the plans and specifications for the New Space), as built drawings, warranties
and guaranties, file books and records, billing information and licenses,
permits and other materials relating to the current operation and maintenance
of
the Properties, in each case shall be deemed delivered to the applicable
Property Owning Subsidiary;
(xiii) Closing
Statement.
A
Closing Statement conforming to the proration and other relevant provisions
of
this Agreement;
(xiv) Retail
Connections, Inc.
A
notice of termination (dated within five (5) days after the date hereof) of
the
existing agreements with Retail Connections, Inc., which are more particularly
described on Schedule
3.1(f),
for its
services as leasing agent for the Properties located in Dallas,
Texas;
(xv)
Other.
Such
other documents, instruments, consents, authorizations or approvals as may
be
reasonably required by, and reasonably satisfactory to, Investcorp and its
counsel and the Title Company, and that may be reasonably required to consummate
the transactions that are the subject of this Agreement and the Related
Agreements and to otherwise give effect to the agreements of the parties hereto;
and
(xvi)
Authority.
Each
Transferor shall have delivered to Investcorp at the Closing evidence of its
authority to execute and deliver this Agreement and all Related Agreements
and
to consummate the transactions which are the subject of this Agreement and
to
perform its obligations hereunder and under the Related Agreements.
(xvii) Environmental
Indemnity.
Portfolio Investor shall have delivered to Investcorp at the Closing an
environmental indemnity in the form annexed hereto as Exhibit U, indemnifying
and holding Investcorp harmless from and any all costs, damages, expenses,
losses and claims that may be incurred by Investcorp as a result of certain
environmental issues at the Properties known as Xxxxxxxx, Forestwood, and Market
at First Colony and arising and/or accruing prior to the Closing Date. From
and
after the Closing, Portfolio Investor shall have the right to substitute an
environmental insurance policy in all respects reasonably acceptable to
Investcorp for the environmental indemnity delivered pursuant to this
clause
(xvii).
This
clause
(xvii)
shall
survive the Closing.
18
(xviii) Title
Issues Indemnity.
Portfolio Investor shall have delivered the Title Issues Indemnity to Investcorp
at Closing.
2.2 Conditions
to the Obligations of the Equity One Parties.
The
obligation of the Equity One Parties to consummate the transactions contemplated
under this Agreement is subject to the satisfaction by Investcorp, or waiver
by
the Equity One Parties, on or before the Closing Date, of each of the conditions
set forth below. None of the transactions contemplated in this Agreement shall
be consummated unless all of the transactions contemplated in this Agreement
are
simultaneously consummated.
(a) Accuracy
of Representations and Warranties; Performance of Covenants.
The
representations and warranties of Investcorp hereunder shall be and remain
true
and correct in all respects (except if limited by their terms to a materiality
standard, in which case they shall remain true and correct in all respects)
on
and as of the Closing Date (except for representations and warranties that
speak
as of a specific date or time which need only be true and correct (to the extent
aforesaid) as of such date or time). Investcorp shall have made or tendered
all
payments required to be made by it and shall have performed or tendered
performance of all of its other covenants and agreements hereunder in all
material respects.
(b) No
Injunction.
There
shall not be in effect any order, decree or injunction of a court or agency
of
competent jurisdiction which enjoins or prohibits consummation of the
transactions contemplated by this Agreement.
(c) Execution
of JV Partnership Agreement, Intermediate GP Operating Agreement, the
Intermediate LP Partnership Agreement and Property Management and Leasing Agency
Agreement.
The JV
Partnership Agreement, the Intermediate GP Operating Agreement, the Intermediate
LP Partnership Agreement and the Property Management and Leasing Agency
Agreement shall have been executed and delivered and shall be in full force
and
effect.
(d) Section
2.1 Deliveries.
The
documents and instruments described in Section
2.1
shall
have been executed and delivered, as applicable, by the JV and the Property
Owning Subsidiaries party thereto.
(e) Authority.
Investcorp shall have delivered to the Transferors by the Closing evidence
of
its authority to execute and deliver this Agreement and all Related Agreements
and to consummate the transactions which are the subject of this Agreement
and
to perform their obligations hereunder and under the Related
Agreements.
(f)
New
Mortgage Financing.
The JV
and the Property Owning Subsidiaries shall have delivered to New Lender such
documents, instruments, consents and authorizations as may be required by New
Lender, its counsel or the Title Company to consummate the New Mortgage
Financing, and all conditions precedent to New Lender’s funding of the New
Mortgage Financing, provided that such conditions precedent are consistent
with
Transferors’ obligations under this Agreement, shall have been satisfied or
waived. The parties hereto agree to cooperate with each other in satisfying
this
condition.
19
ARTICLE
III -
REPRESENTATIONS AND WARRANTIES, CERTAIN COVENANTS
3.1 Representations
and Warranties of the Transferors; Certain Covenants of the
Transferors.
Each
Transferor hereby represents and warrants to Investcorp as of the date of this
Agreement as follows:
(a) Existence
and Power of Transferors.
Each
Transferor is a validly existing limited partnership, corporation or limited
liability company under the laws of the jurisdiction of its formation. Each
Transferor and its respective general partners or officers have all power and
authority to enter into this Agreement and all other documents to be executed
and delivered in connection with the transactions that are the subject of this
Agreement, including, without limitation, all Related Agreements, to the extent
they are to be executed by the Transferors, and to enter into and deliver and
to
perform its obligations hereunder and under the Related Agreements executed
by
the Transferors.
(b) Authorization;
No Contravention; Consents.
The
execution and delivery of this Agreement and the Related Agreements executed
by
each of the Transferors and the performance of their respective obligations
under all of the foregoing have been duly authorized by all requisite corporate
or limited partnership action. This Agreement and the Related Agreements have
been or will be duly executed and delivered by the Transferors, and this
Agreement and the Related Agreements executed by the Transferors will constitute
the valid, legal and binding obligations of the Transferors, as applicable,
enforceable against the respective Transferors in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws affecting the rights of creditors generally, and,
as
to enforceability, general principals of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity). None of the terms
of
this Agreement or the Related Agreements executed by Transferors will violate
in
any material respect any term of any material agreement, order or decree to
which any of them is a party or by which any of the Transferors is bound or
to
which any Property is subject (other than the Existing Mortgage Debt, which
is
to be repaid in full at Closing). Except as set forth on Schedule 3.1(b),
no
consent of any lender, partner, member, shareholder, beneficiary, tenant,
creditor, investor, Authority or other Person which has not been obtained is
required in order for Transferors to enter into this Agreement and consummate
the transactions contemplated herein, other than those, if any, the failure
to
obtain which would not have a material adverse effect on the JV or any Property
Owning Subsidiary.
(c) No
Violation.
To
Transferors’ knowledge no order or injunction of any court or administrative
agency of competent jurisdiction nor any statute, rule, regulation or executive
order promulgated by any governmental authority of competent jurisdiction is
now
in effect or shall be in effect as of Closing which restrains or prohibits
the
transfer of the Properties or the consummation of any other transaction
contemplated hereby.
20
(d) Litigation.
Except
as set forth on Schedule
3.1(d),
there
are no actions, suits or proceedings pending in any court or before or by an
arbitration tribunal or regulatory commission, department or agency or, to
Transferors’ knowledge, otherwise threatened which in any case, if adversely
determined, would have a material adverse effect on condition or operation
of
any Property, or Transferors or would materially affect the ability of
Transferors to consummate the transactions contemplated hereby.
(e) No
Condemnation.
As of
the date hereof, except as set forth in Schedule 3.1(e),
(i)
there are no pending or, to Transferors’ knowledge, threatened condemnation,
expropriation, requisition or similar proceedings against any Property or any
portion thereof and (ii) no Transferor has received written notice that any
such
proceeding is contemplated.
(f)
Leasing
Commissions and Tenant Allowances.
There
are no rental, lease, or other commissions now due and payable or which will
become due or payable with respect to the current term of any of the Leases
and
there are no unpaid or pending Tenant improvement allowances or other
concessions now due or payable in connection with any of the Leases or which
will become due or payable, except, in each case, for leasing commissions,
brokerage fees and tenant improvement allowances or other concessions (i)
described on Schedule
3.1(f),
(for
which either Transferors are responsible or the JV shall be responsible, as
set
forth on Schedule
3.1(f)),
or
(ii) incurred in connection with new Leases or Lease modifications, in each
case
entered into pursuant to Section
4.4
or (iii)
as otherwise expressly set forth in the Leases. Schedule
3.1(f)
also
contains a true, correct and complete list of all existing brokerage agreements
affecting the Properties.
(g) Rent
Rolls; Leases.
The
information set forth in the rent rolls described in Exhibit
J-1
(the
“Rent
Rolls”)
(which
includes a tenant delinquency report which is correct in all material respects,
to Transferors’ knowledge) is accurate in all material respects as of the date
set forth therein except for the information related to pass-through expenses
to
Tenants, which is accurate as of the date set forth in the separate spreadsheet
thereof also described in Exhibit
J-1.
There
are no Leases in force for the Properties other than as identified in the Rent
Rolls. Schedule
3.1(g)
is a
true, correct and complete list of all of the existing Leases in effect as
of
the date of such Schedule. Except as indicated in Exhibit
J-1,
or as
set forth in the Leases, no Tenant has paid any rent in advance except for
the
current month and no Tenant is entitled to any concession, rebate, abatement
or
other similar benefit. To Transferors’ knowledge, except as indicated in
Exhibit
J-1,
Transferors have not delivered or received any written notice of default or
termination under any Lease with a Tenant within the six (6) month period prior
to the date hereof other than notices of alleged defaults that have been
cured.
(h) Existing
Loans.
Exhibit
C
identifies all Existing Mortgage Debt and provides (i) the names of the Existing
Lender and (ii) the outstanding principal balances as of the Existing Mortgage
Debt as of March 1, 2006 (or in the case of the Existing Mortgage Debt
encumbering the “Westgate Marketplace” Property, February 28,
2006).
(i)
Insurance.
Transferors have not received any notice within six months prior to the date
hereof from any insurer threatening to decline to provide insurance coverage
for
any Property and, to Transferors knowledge, all insurance programs (i.e.,
commercial liability, general liability, etc.) for the Properties are in full
force and effect.
21
(j) Contracts.
Schedule
1
is a
true, complete and correct list of all property management agreements,
listing/brokerage agreements, all other Contracts that are not cancelable on
thirty (30), days (or less) notice without payment of premiums or penalty,
and
Contracts with Affiliates relating to the Properties, and true, correct and
complete copies of all such Contracts) have been made available to Investcorp.
To Transferors’ knowledge, such Contracts are in full force and effect. No
Transferor has provided or received any written notice of any default under
any
such Contract which has not been cured.
(k) Hazardous
Substances.
To
Transferors’ knowledge, Transferors have made available to Investcorp all
environmental studies, investigations, reports, audits, assessments, licenses,
permits and agreements relating to each of the Properties’ compliance or
noncompliance with Environmental Laws within Transferors’ possession or control,
including complete copies of the most recent Phase I environmental report for
each Property and any Phase II reports obtained as a result of conditions noted
in such Phase I report, which environmental reports are more particularly
described on Schedule
3.1(k)
(collectively, the “Existing
Environmental Reports”).
Additionally, Transferors have advised Investcorp of Transferors’ election to
place three (3) of the Properties (the “DCRP
Properties”)
in the
Texas Dry Cleaner Remediation Program, pursuant to Texas House Xxxx 1366. Except
as set forth in the Existing Environmental Reports and except for the DCRP
Properties, no Transferor has made any report or disclosure to any Authority
relating to a release or threatened release of Hazardous Substances or Hazardous
Wastes at, to, upon, or from any Property, in each case except to the extent
such matters would not reasonably be expected to have individually or in the
aggregate a material adverse effect on the value of any individual Property.
Except as set forth in the Existing Environmental Reports, Transferors have
no
knowledge of any underground storage tanks located on any Property. Transferors
make no representations or warranties of any kind regarding the accuracy,
thoroughness or completeness of or conclusions drawn in the information
contained in any Existing Environmental Reports relating to the Properties.
As
used in this Agreement, the terms “Hazardous
Substances”
and
“Hazardous
Wastes”
shall
have the meanings set forth in the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. §§ 1251 et seq., as amended, and the
regulations thereunder, Solid Waste Disposal Act, 42 U.S.C. §§ 6901 et seq., as
amended, including amendments under Resource Conservation and Recovery Act,
and
the regulations thereunder, and Federal Water Pollution Control Act, 33 U.S.C.
§§ 1251 et seq., as amended, and regulations thereunder, or any applicable state
or local equivalent.
(l) As
is
Physical Condition.
Subject
to the terms and conditions set forth herein, the Properties shall be
transferred to the Property Owning Subsidiaries at Closing in their “as-is”,
“where is” condition, as of the date hereof, ordinary wear and tear excepted.
(m) Non-Foreign
Person.
No
Transferor is a “foreign person” as defined in Section 1445(f)(3) of the
Code.
(n) Pension
Fund.
None of
the Transferors hold “plan assets” as defined in regulations at 29 CFR
Section 25610.3-101, of any “plan” within the meaning of Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended, or
Section 4975(e) of the Code.
22
(o) Bankruptcy
Matters.
None of
the Transferors has made a general assignment for the benefit of creditors,
filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition by its creditors, suffered the appointment of a receiver
to
take possession of substantially all of its assets, suffered the attachment
or
other judicial seizure of substantially all of its assets, admitted its
inability to pay its debts as they come due, or made an offer of settlement,
extension or composition to its creditors generally.
(p) Tax
Appeals.
Except
as set forth on Schedule
3.1(p),
none of
the Transferors have commenced and is continuing to prosecute any real estate
tax certiorari or other proceeding or protests in any jurisdiction to reduce
taxes or any portion thereof for any fiscal year.
For
purposes of this Agreement, the term “to the Transferors’ knowledge” or words of
similar import shall mean the actual knowledge (as opposed to imputed or
constructive knowledge) of Xxxxx Xxxxxx, Xxxxx Xxxxx and Xxxxx Xxxxxxx who
are
the individuals who know or should know the matters referenced herein after
reasonable inquiry of the regional managers and/or asset managers responsible
for managing and operating each of the Properties. All of the representations
and warranties set forth herein are expressly made subject to and deemed
modified by any information inconsistent with or contrary to such
representations and warranties which is contained in the Schedules attached
hereto, and any inconsistency or anything to the contrary between the Schedules
attached hereto and any representation or warranty shall not be deemed a breach
of such representation or warranty. Except for the representations and
warranties of the Transferors expressly set forth in this Agreement and as
may
be set forth in any of the closing documents delivered by the Transferors
pursuant to Section 2.1,
the
Properties are being transferred to the applicable Property Owning Subsidiary
in
their “as is”, “where is” condition, with all faults, without any express or
implied representation or warranty whatsoever from any of the Transferors.
3.2 Representations
and Warranties of Investcorp.
Investcorp
represents and warrants to the Transferors as of the date of this Agreement
and
makes certain covenants as follows:
(a) Organization
and Qualification.
(i) Investcorp
is a limited liability company, duly organized, validly existing and in good
standing under the laws of the State of Delaware. Investcorp has all requisite
partnership power and authority to own, operate, lease and encumber its
properties and conduct the business in which it engages or proposes to engage
and to enter into this Agreement and each of the Related Agreements to which
it
is a party, and to perform its obligations hereunder and
thereunder.
(ii) Investcorp
is duly qualified to do business and is in good standing in each jurisdiction
in
which the ownership of its property or the conduct of its business requires
such
qualification.
23
(b) Authority
Relative to Agreements; Board of Approval; No Conflicts; No Defaults, Required
Filings and Consents.
The
execution, delivery and performance of this Agreement and the Related
Agreements, have been duly and validly authorized by all necessary corporate
action on the part of Investcorp. This Agreement and the Related Agreements
have
been or will be duly executed and delivered by Investcorp and will constitute
the valid and legally binding obligations of Investcorp, enforceable against
Investcorp in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws affecting
the
rights of creditors generally, and, as to enforceability, general principals
of
equity (regardless of whether enforcement is sought in a proceeding at law
or in
equity). None of the terms of this Agreement or the Related Agreements executed
by Investcorp will violate any term of any agreement, order or decree to which
Investcorp is a party or by which Investcorp is bound. No consent of any lender,
partner, member, shareholder, beneficiary, tenant, creditor, investor, Authority
or other Person which has not been obtained is required in order for Investcorp
to enter into this Agreement and consummate the transactions contemplated
herein. Investcorp obtained all other authorizations, consents, approvals and
waivers from third parties, including, without limitation, Authorities,
necessary to enable Investcorp to perform all of its obligations under this
Agreement and the Related Agreements other than those, if any, the failure
to
obtain which would not have a material adverse effect on the JV or
Investcorp.
(c) Diligence
Materials.
Investcorp has reviewed the Diligence Materials listed on Exhibit K
and has
conducted such independent diligence with respect to the Properties as it has
deemed appropriate, and Investcorp expressly acknowledges that, except as set
forth herein, it has no right to terminate this Agreement based on the results
of its diligence on the Properties.
3.3 No
Liability for Known Facts.
No
Equity
One Party shall have any liability in connection with this Agreement by reason
of an inaccuracy of a representation or warranty, if and to the extent that
such
inaccuracy is in fact “actually known” (as provided in Section
3.4
below)
by Investcorp at the time of the Closing and Investcorp elects, nevertheless,
to
cause the transactions contemplated by this Agreement to be
consummated.
3.4 Representations
Deemed Modified.
(a) To
the
extent that Investcorp actually knows prior to the execution of this Agreement
that Transferors’ representations and warranties are inaccurate, untrue or
incorrect in any way, such representations and warranties shall be deemed
modified to reflect such knowledge. For purposes of this Agreement, Investcorp
shall “actually know” that a representation or warranty was untrue, inaccurate
or incorrect to the extent that (a) Xxxxxxxxxxx Xxxxxx, Xxxxxxx Xxxxx or F.
Xxxxxxxx Xxxxxx has actual knowledge thereof (without implying any
particular duty
of
inquiry) or (b) any written work product prepared by or for Investcorp and
delivered (which shall include, for this purpose e-mail delivery or facsimile
transmission to any one or more of Messrs. Xxxxxx, Xxxxx or Dracos), by any
of
its employees, agents, representatives or third parties retained by it which
contains information which is contrary to such representation or
warranty.
24
(b) Investcorp
hereby represents and warrants to Transferors that it has provided to
Transferors true, correct and complete copies of the retainer letter or other
evidence of the scope of work for each of the third-party professionals or
firms
it has retained in connection with its due diligence review and investigation
of
the Properties (other than Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, which was
retained to review title and survey, as well as negotiate and draft this
Agreement and the other transaction documents), a complete list of which
retainer letters is annexed hereto as Schedule
3.4(b).
3.5 No
Other Representations and Warranties Outside Agreement and Related
Agreements.
(a) The
parties hereby expressly acknowledge and agree that, except as set forth in
this
Agreement and the Related Agreements, as reliance thereon and enforcement
thereof may be limited in this Agreement and the Related Agreements, no party,
nor anyone acting for or on behalf of any party, has made any oral or written
representation, warranty, covenant, agreement, promise or statement, express
or
implied, to the other party, or to anyone acting for or on behalf of the other
party, and no party has, except as provided in this Agreement and the Related
Agreements, relied on, and shall not be entitled to rely on same.
(b) Without
limiting the generality of the foregoing, Investcorp, for itself and on behalf
of the Property Owning Subsidiaries, hereby acknowledges and agrees that, except
for the Transferors’ representations and warranties set forth in this Agreement
and the Related Agreements, as reliance thereon and enforcement thereof may
be
limited in this Agreement, Investcorp, for itself and on behalf of the Property
Owning Subsidiaries, waives, and the Transferors disclaim, all warranties of
any
type of kind whatsoever with respect to the Properties, whether express or
implied, including, by way of description but not limitation, those of fitness
for a particular purpose and use.
25
(c) WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, INVESTCORP, FOR ITSELF AND ON BEHALF
OF THE PROPERTY OWNING SUBSIDIARIES, SPECIFICALLY ACKNOWLEDGES AND AGREES THAT
(i) EXCEPT AS SET FORTH IN THIS AGREEMENT AND THE RELATED AGREEMENTS, THE
PROPERTIES ARE “AS IS, WHERE IS AND WITH ALL FAULTS” AND (ii) EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE RELATED AGREEMENTS, AS APPLICABLE,
NONE OF INVESTCORP, THE PROPERTY OWNING SUBSIDIARIES, ANY OF THEIR RESPECTIVE
AFFILIATES OR ANY OTHER PERSON IS RELYING ON ANY REPRESENTATIONS OR WARRANTIES
OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY
OR OTHERWISE, FROM EITHER EQUITY ONE, ANY OTHER TRANSFEROR OR ANY DIRECT OR
INDIRECT PARTNER, OFFICER, DIRECTOR, TRUSTEE, MEMBER, EMPLOYEE, AFFILIATE,
ATTORNEY, AGENT OR BROKER OF EQUITY ONE OR ANY OTHER TRANSFEROR, AS TO ANY
MATTER CONCERNING THE PROPERTIES OR SET FORTH, CONTAINED OR ADDRESSED IN ANY
DUE
DILIGENCE MATERIALS (INCLUDING, THE COMPLETENESS THEREOF), INCLUDING (a) the
quality, nature, habitability, merchantability, use, operation, value,
marketability, adequacy or physical condition of the Properties or any aspect
of
portion thereof, including, structural elements, foundation, roof,
appurtenances, access, landscaping, parking facilities, electrical, mechanical,
HVAC, plumbing, sewage, water and utility systems, facilities and appliances,
soils, geology and groundwater; (b) the dimensions or lot size of the Properties
or the square footage of any of the improvements thereon or of any tenant space
therein; (c) the development or income potential, or rights of or relating
to,
the Properties, or the fitness, suitability, value or adequacy of a Property
for
any particular purpose; (d) the zoning or other legal status of any Property;
(e) the compliance of any Property or its operation with any Laws, conditions
and restrictions of any Governmental Authority or of any other person or entity
(including, the Americans with Disabilities Act of 1990, as amended); (f) the
ability of Investcorp or any Property Owning Subsidiary or any of its Affiliates
to obtain any necessary governmental approvals, licenses or permits for the
use
or development of any Property; (g) the presence, absence, condition or
compliance of any hazardous substances or waste on, in, under, above, from,
or
about any Property or any adjoining or neighboring property; (h) the quality
of
any labor and materials used in any improvements at any Property; or (i) the
economics of, or the income and expenses, revenue or expense projections or
other financial matters, relating to the operation of, any Property. Without
limiting the generality of the foregoing, Investcorp for itself and on behalf
of
the Property Owning Subsidiaries expressly acknowledges and agrees that, except
as set forth herein or in any other document delivered pursuant hereto, it
is
not relying on any representation or warranty of Equity One or any other
Transferor or any direct or indirect partner, member, director, trustee,
officer, employee, affiliate, attorney, agent or broker of Equity One or any
other Transferor, whether implied, presumed or expressly provided, arising
by
virtue of any statute, regulation or common law right or remedy in favor of
any
of them.
26
(d) INVESTCORP
FOR ITSELF AND ON BEHALF OF THE PROPERTY OWNING SUBSIDIARIES ACKNOWLEDGES AND
AGREES THAT ANY REPORTS AND INFORMATION OBTAINED BY INVESTCORP OR ANY OF ITS
AFFILIATES AND OBLIGATIONS RELATED THERETO ARE THE SOLE RESPONSIBILITY OF
INVESTCORP AND, EXCEPT TO THE EXTENT EXPRESSLY REQUIRED PURSUANT TO THIS
AGREEMENT, NONE OF EQUITY ONE OR ANY OTHER TRANSFEROR OR ANY OF THEIR AFFILIATES
HAS ANY OBLIGATION TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS OR ANY UPGRADES,
REMEDIATION OR STUDIES TO OR ABOUT ANY PROPERTY OR ANY PORTION THEREOF OR TO
CURE OR REPORT ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF
ANY
INSURER. INVESTCORP FOR ITSELF AND ON BEHALF OF THE PROPERTY OWNING SUBSIDIARIES
ACKNOWLEDGES AND AGREES THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, OR IN ANY OTHER DOCUMENT DELIVERED PURSUANT HERETO, THE JV AND THE
PROPERTY OWING SUBSIDIARIES ARE SOLELY RESPONSIBLE FOR OBTAINING, AS THEY DEEM
NECESSARY OR APPROPRIATE, ANY APPROVAL, LICENSE OR PERMIT NECESSARY FOR
ACCEPTANCE BY THEM OF ANY PROPERTY OR INTEREST AND FOR ANY REPAIRS, UPGRADES,
REMEDIATION, STUDIES OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT THE
JV’S SOLE COST AND EXPENSE.
3.6 Survival;
Limitation of Liability.
Except
as
otherwise provided herein, all representations and warranties of Transferors
contained in this Agreement shall survive the Closing for a period of one (1)
year from the date of the Closing, provided that Investcorp must give
Transferors written notice of any claim it may have against Transferors for
a
breach of such representation, or for the breach of any covenant of a Transferor
contained in this Agreement, within one (1) year after the Closing. Any claim
which Investcorp may have at any time, whether known or unknown, which is not
asserted within such one (1) year period (the “Survival
Period”)
shall
not be effective or valid, and Transferors shall have no liability with respect
thereto. In addition, (i) Investcorp may not bring any action against any
Transferor unless and until the aggregate amount of all liability and losses
arising out of any misrepresentations herein together with any breaches of
this
Agreement by Transferors exceeds $150,000 (the “Floor”),
(ii)
in the event that the aggregate amount of all liability and losses so arising
exceeds the Floor, Transferors shall have no liability to Investcorp for the
first $150,000 of such liability and losses and (iii) in no event shall the
aggregate liability and losses of Transferors hereunder exceed $10,000,000
(the
“Ceiling”).
Notwithstanding the foregoing one (1) year survival limitation, the
representations and warranties contained in Section 3.1(a),
the
first sentence of Section 3.1(b)
and
Section 3.1(m)
shall
survive the Closing indefinitely. The provisions of this Section 3.6
shall
survive the Closing. At Closing, Portfolio Investor or, at Transferor’s option,
a newly-formed single-purpose entity wholly-owned (directly or indirectly)
by
Equity One (“Special
Guarantor”)
shall
be capitalized by Transferors with unencumbered securities or other financial
instruments (the “Special
Guarantor Capital”)
reasonably acceptable to Investcorp (Investcorp hereby confirming that a note
or
debenture issued by Equity One shall be acceptable to Investcorp) and having
a
fair market value of at least $5,000,000, and Portfolio Investor, together
with
Special Guarantor, if applicable, shall execute and deliver a joinder to this
Agreement pursuant to which (i) Portfolio Investor and Special Guarantor, if
applicable, shall agree to be jointly and severally liable with Transferors
for
any post-closing liability of Transferors to Investcorp hereunder, subject
to
the provisions of this Section
3.6,
(ii)
Portfolio Investor shall represent and covenant that Portfolio Investor’s sole
purpose shall be to own and hold its 20% membership interest in the JV and
provide certain indemnities required hereunder, (iii) Special Guarantor, if
applicable, shall represent and covenant (x) that its sole purpose shall be
to
execute and deliver the joinder referred to in this Section
3.6
and (y)
that it shall maintain ownership of the Special Guarantor Capital, unencumbered,
at least until the expiration of the Survival Period, and (iv) each of Portfolio
Investor and Special Guarantor, if applicable, shall represent that it has
delivered true, correct and complete copies of its organizational documents
to
Investcorp, certified as true, correct and complete by an authorized officer,
member or manager of Portfolio Investor or Special Guarantor, as
applicable.
3.7 Release
of Equity One Parties.
27
(a) EXCEPT
FOR RIGHTS, REMEDIES AND OTHER PROVISIONS WHICH SURVIVE CLOSING PURSUANT TO
THE
EXPRESS TERMS OF THIS AGREEMENT AND THE RELATED AGREEMENTS, INVESTCORP
IRREVOCABLY AND ABSOLUTELY WAIVES ITS RIGHT TO RECOVER FROM, AND FOREVER
RELEASES AND DISCHARGES, AND COVENANTS NOT TO FILE OR OTHERWISE PURSUE ANY
LEGAL
ACTION AGAINST ANY EQUITY ONE PARTIES OR THEIR AFFILIATES OR ANY DIRECT OR
INDIRECT PARTNER, MEMBER, MANAGER, TRUSTEE, DIRECTOR, SHAREHOLDER, CONTROLLING
PERSON, AFFILIATE, OFFICER, ATTORNEY, EMPLOYEE, AGENT OR BROKER OF ANY OF THE
FOREGOING, AND ANY OF THEIR RESPECTIVE HEIRS, SUCCESSORS, PERSONAL
REPRESENTATIVES AND ASSIGNS, WITH RESPECT TO ANY AND ALL SUITS, ACTIONS,
PROCEEDINGS, INVESTIGATIONS, DEMANDS, CLAIMS, LIABILITIES, FINES, PENALTIES,
LIENS, JUDGMENTS, LOSSES, INJURIES, DAMAGES, SETTLEMENT EXPENSES OR COSTS OF
WHATEVER KIND OR NATURE, WHETHER DIRECT OR INDIRECT, KNOWN OR UNKNOWN,
CONTINGENT OR OTHERWISE (INCLUDING ANY ACTION OR PROCEEDING BROUGHT OR
THREATENED OR ORDERED BY ANY AUTHORITY), INCLUDING, WITHOUT LIMITATION,
ATTORNEYS’ AND EXPERTS’ FEES AND EXPENSES, AND INVESTIGATION AND REMEDIATION
COSTS THAT MAY ARISE ON ACCOUNT OF OR IN ANY WAY BE CONNECTED WITH THE
PROPERTIES OR ANY PORTION THEREOF OR THE CONDITION THEREOF, INCLUDING THE
PHYSICAL, ENVIRONMENTAL AND STRUCTURAL CONDITION OF ANY PROPERTY OR ANY LAW
APPLICABLE THERETO, OR ANY OTHER MATTER RELATING TO THE USE, PRESENCE, DISCHARGE
OR RELEASE OF HAZARDOUS SUBSTANCE OR WASTE ON, UNDER, IN, ABOVE OR ABOUT ANY
OF
THE PROPERTIES WHICH ARISE, OCCUR AND/OR ACCRUE PRIOR TO THE CLOSING.
NOTWITHSTANDING THE FOREGOING, TRANSFERORS HEREBY ACKNOWLEDGE THAT INVESTCORP
HAS NOT, AND IS NOT, WAIVING ANY RIGHT TO IMPLEAD TRANSFERORS IN ANY ACTION,
CLAIM, SUIT, DEFENSE, CASE, EVENT OR MATTER BROUGHT BY A THIRD PARTY AGAINST
INVESTCORP FOR A CLAIM ARISING ACCRUING AND/OR OCCURRING PRIOR TO THE CLOSING
DATE.
(b) IN
CONNECTION WITH THIS SECTION
3.7,
INVESTCORP EXPRESSLY WAIVES THE BENEFITS OF ANY PROVISION OR PRINCIPLE OF
FEDERAL OR STATE LAW THAT MAY LIMIT THE SCOPE OR EFFECT OF THE WAIVER AND
RELEASE PROVISIONS OF THE PRECEDING PARAGRAPH.
ARTICLE
IV -
COVENANTS
4.1 Availability
of Records.
4.2 Tenant
Estoppels.
(a) With
respect to each Property, Transferors shall, prior to Closing, use its
reasonable good faith efforts to provide estoppels (collectively, “Estoppels”)
to
Investcorp, the applicable Property Owning Subsidiary and New Lender from (x)
all of the Major Tenants, (y) Tenants leasing at least seventy percent (70%)
of
the space at such Property leased by tenants other than Major Tenants and (z)
parties to reciprocal easement and similar agreements (collectively,
“REA’s”)
encumbering such Property. At Closing, Transferors will certify to Investcorp
that Transferors are not, to Transferors’ knowledge, in default of any material
obligations under any REA’s with respect to which an Estoppel to such effect has
not been delivered. Such Estoppels shall be requested either (a) in
substantially the form attached hereto as Exhibit L
or
(b) in the form required by the applicable Tenant’s Lease. Transferors
shall from time to time as any material number thereof are received, deliver
to
Investcorp for its review any Estoppel which Transferors receive, in accordance
with the terms and conditions of Section
9.3
hereof.
28
(b) An
Estoppel shall be deemed acceptable for purposes of Section
2.1(g)(xi)
hereof
if such Estoppel is executed and returned by the applicable Tenant without
material adverse deviation (each a “Material
Adverse Deviation”)
from
the form provided pursuant to the preceding paragraph
(a)
or from
the form required under such Tenant’s Lease. In the event that Transferors have
received Estoppels executed by Tenants in the type and number satisfying the
requirement in Section
4.2(a)
as to
the number and type of Estoppels, but such Estoppels contain one or more
Material Adverse Deviations, and, consequently, the requirements of Section
2.1(g)(xi)
are not
satisfied, then Transferors shall, at Closing, deposit in escrow with the Title
Company pursuant to an escrow agreement (the “Estoppel
Cure Escrow Agreement”)
substantially in the form annexed as Exhibit S,
an
amount (the “Estoppel
Cure Deposit”)
equal
to the lesser of (i) $150,000 or (ii) the aggregate stated amount of such
Material Adverse Deviations, as stated or claimed by Tenants, or if not so
stated or claimed, as reasonably estimated by Investcorp. If the Material
Adverse Deviation in an Estoppel (x) is fully covered by the Estoppel Cure
Deposit (as the same may be increased pursuant to Section 4.2(c)
below),
then the applicable Estoppel shall be deemed acceptable for the purposes of
Section
2.1(g)(xi)
hereof,
or (y) is not covered by the Estoppel Cure Deposit, then the Estoppel will
not
be deemed acceptable and Investcorp shall have such rights with respect thereto
as are set forth in this Section
4.2.
(c) Transferors
may, in their sole discretion, increase the amount of the Estoppel Cure Deposit
by the stated amount (or if not stated the amount reasonably estimated by
Investcorp) of Material Adverse Deviations in such Estoppels as may be required,
in addition to those deemed acceptable pursuant to the preceding paragraph
(b),
to meet
the requirements of Section
2.1(g)(xi),
provided
that the
amount of the Estoppel Cure Deposit as so increased with respect to any Property
shall not exceed 10% of the Agreed Value of such Property.
(d) Transferors
shall have until the first anniversary of Closing to settle and agree with
any
applicable Tenant upon the final amount of the Material Adverse Deviation
claimed by such Tenant, and, upon such settlement and agreement (as expressly
acknowledged in writing by the tenant, a copy of which express acknowledgment
shall be delivered to Investcorp and the Title Company with Transferors’ request
for release of the related portion of the Estoppel Cure Deposit), the applicable
portion of the Estoppel Cure Deposit shall be released to tenant or to the
JV as
applicable, and the balance of such portion of the Estoppel Cure Deposit
relating to such Estoppel, if any, shall be released to Transferors, all in
accordance with the terms and provisions of the Estoppel Cure Escrow Agreement.
Investcorp shall not object to any proposed release with respect to the Estoppel
Cure Deposit unless it has reasonable, good faith grounds for doing so and
sets
forth such grounds in a notice, delivered five (5) Business Days after receipt
of written notice from Transferors, to Transferors and the Title Company
objecting to such release. If any Transferor fails to reach final agreement
with
any Tenant with respect to the amount of its Material Adverse Deviation on
or
before the first anniversary of Closing, then the amount of the Estoppel Cure
Deposit attributable to such Material Adverse Determination shall be released
to
the JV, provided
that if
a Transferor has commenced litigation (or arbitration) with respect to such
Material Adverse Deviation, then the amount of the Estoppel Cure Deposit
attributable thereto shall remain in escrow pending resolution of such
proceedings to the satisfaction of Transferors (as evidenced by appropriate
written acknowledgment by the applicable Tenant or by final unappealable court
order), whereupon such amount shall be released to Transferors or to the
applicable tenant in accordance with such resolution, subject to the applicable
terms and provisions of the Estoppel Cure Escrow Agreement.
29
(e) Transferors
shall have the right, but not the obligation, to substitute for any Estoppel
otherwise required hereunder, a Transferor Estoppel substantially in the form
of
Exhibit
T,
executed by Transferors, provided
that:
(i) Investcorp
shall not be obligated to accept Transferor Estoppels with respect to more
than
five percent (5%) of the space leased to Major Tenants;
(ii) Investcorp
shall not be obligated to accept Transferor Estoppels with respect to more
than
seven-percent (7%) of the space leased by Tenants other than Major
Tenants;
(iii) Transferor
Estoppels shall, by their terms, be superseded, replaced and rendered null
and
void by post-Closing delivery to the JV of a Tenant Estoppel (with respect
to
the same space or space under a Lease of at least equivalent value) that would
have met the requirements of this Agreement had it been delivered at or prior
to
Closing (including being acceptable in accordance with Section
4.2(b)
hereof);
(iv) Transferors’
liability under Transferor Estoppels, if any, shall not be limited by the Floor
or the Ceiling referred to in Section
3.6.
(f) If
(i)
Transferors fail to satisfy the requirements of Section
2.1(g)(xi)
with
respect to a Property after taking account of (x) any Transferor Estoppels
delivered pursuant to Section
4.2(e),
(y) the
initial Estoppel Cure Deposit required by Section
4.2(b),
and (z)
any optional additional Estoppel Cure Deposit permitted by Section
4.2(c)
or (ii)
a Material Adverse Deviation exists with respect to an Estoppel and such
Estoppel is not included in determining whether the requirements in Section
2.1(g)(xi)
are
satisfied, or such Material Adverse Deviation is not cured or otherwise
addressed in accordance with the preceding clause
(i),
then
either Investcorp or Transferors may, subject to the provisions of Article
VIII
hereof,
treat such Property as a Dropped Asset (as hereinafter defined), or Investcorp
may waive the requirements of Section
2.1(g)(xi)
with
respect to such Property.
30
(g) In
the
event that any Estoppel (other than a Transferor Estoppel) contains information
inconsistent with or contrary to any representation of Transferors herein,
such
representation shall be deemed modified to reflect to reflect such
information.
4.3 Operation
Prior to Closing.
Prior
to
Closing, Transferors shall:
(a) Maintain
each Property in the condition in which it existed as of the date of this
Agreement, normal wear and tear excepted, not commit waste, operate each
Property in a manner consistent with current practices and in compliance with
all applicable laws and perform all of their material obligations under the
Leases;
(b) Keep
in
existence all fire and extended coverage insurance policies, and all public
liability insurance policies, that are in existence as of the date of this
Agreement with respect to each Property (or substitute policies equivalent
thereto); and
(c) Not
by
their acts or omissions voluntarily permit, create, cause or allow any mortgage,
deed of trust, judgment lien, mechanic’s and materialmen’s liens and other liens
and encumbrances against the Property (other than (i) liens for taxes and
assessments which are not delinquent and (ii) any of such items which a tenant
under a Lease is obligated to cure and remove, or which Transferors shall remove
at Closing).
4.4 Leases
Prior to Closing.
(a) Except
as
otherwise provided for or contemplated by this Agreement (or pursuant to
Investcorp’s Consent), from the date hereof until Closing, Transferors
shall:
(i) not
provide a written waiver of any material rights under Leases to Major
Tenants;
(ii) not
terminate, modify, amend, extend, renew or expand any Lease (except for
terminations, amendments, modifications, extensions, renewals or expansions
required by the existing terms of any such Leases); and
(iii) not
enter
into any new Lease with any Tenant,
except
in
each case to the extent Equity One Manager would be permitted to do so under
the
applicable terms and provisions of the Property Management and Leasing Agency
Agreement without Investcorp’s Consent, assuming for the purpose of this
provision that the Property Management and Leasing Agency Agreement were in
effect.
(b) For
the
purposes of this Section
4.4,
“Investcorp’s
Consent”
shall
mean (a) Investcorp’s actual written consent (which may be given or withheld in
Investcorp’s sole discretion) or (b) Investcorp’s consent which shall be deemed
given if Investcorp does not respond within five (5) Business Days to a written
request for Investcorp’s Consent with a written denial of its consent. In order
for the notice to Investcorp be sufficient for deemed consent within five (5)
Business Days, such notice must be marked in bold lettering with the following
language: “INVESTCORP’S RESPONSE IS REQUIRED WITHIN FIVE (5) BUSINESS DAYS OF
RECEIPT OF THIS NOTICE OR INVESTCORP’S CONSENT SHALL BE DEEMED
GIVEN.”
31
ARTICLE
V -
CLOSING ADJUSTMENTS
5.1 Prorations
Generally.
Transferors
shall be entitled to all income produced from the operation of the Properties
which is allocable to the period prior to the Closing and shall be responsible
for all expenses allocable to that period, including all interest on the
Existing Mortgage Debt (except that all prepayment and similar charges and
premiums with respect to the Westgate/Forestwood Debt as set forth on Schedule
1.5(a) shall be for the account of the JV, and the corresponding Property Owning
Subsidiary shall be entitled to all income and responsible for all expenses
(including, without limitation, all tenant improvement expenses, and leasing
commissions) allocable to the period beginning at 12:01 A.M. on the day the
Closing occurs. At the Closing, all items of income and expense with respect
to
each Property shall be prorated in accordance with the foregoing principles
and
the rules for the specific items set forth hereinafter and otherwise in
accordance with the custom in the jurisdiction where the Properties are located,
and the Agreed Fair Market Value of each Property shall be adjusted up or down
at Closing by the net amount of all such prorations and adjustments in respect
of such Property under this Article
V.
5.2 Real
Estate Taxes and Assessments.
(a) Real
estate taxes and assessments on each Property shall be prorated and adjusted
based upon the period (i.e., calendar or other tax fiscal year) to which the
same are attributable, regardless of whether or not any such real estate taxes
are then due and payable or are a lien. Each Transferor shall pay at or prior
to
Closing (or the JV shall receive credit for) any unpaid real estate taxes
attributable to periods prior to the Closing Date (whether or not then due
and
payable or a lien as aforesaid); provided, that with respect to any assessments
which can be paid in installments, each Transferor shall only be responsible
for
installments which are payable on or before the Closing Date. Each Transferor
shall receive credit for any previously paid or prepaid real estate taxes
attributable to periods from and after the Closing Date. In the event that
as of
the Closing Date the actual real estate tax bills for the tax year or years
in
question are not available and the amount of real estate tax to be prorated
as
aforesaid cannot be ascertained, then rates and assessed valuations of the
previous year, with known changes, shall be used; and after the Closing occurs
and when the actual amount of real estate taxes of the year or years in question
shall be determinable, such real estate taxes will be re-prorated between the
parties to reflect the actual amount of such real estate taxes.
(b) Notwithstanding
the foregoing, to the extent that a Lease requires a Tenant to pay an item
described in the preceding paragraph
(a),
then
such item shall not be prorated at Closing and the applicable Property Owning
Subsidiary shall look solely to such Tenant for payment of such
item.
32
(c) Transferors
shall have the right to continue the prosecution of any real estate tax
certiorari or other proceedings or protests brought by Transferors, at
Transferors’ expense, to reduce the taxes or any portion thereof for the fiscal
year prior to the fiscal year in which Closing occurs which are pending as
of
the Closing Date using counsel selected by Transferors, until a final
determination has been rendered or a settlement reached; provided, however,
Transferors shall consult with, and provide information to, Investcorp as to
the
status of such proceedings or protests from time to time on request and shall
discuss same with Investcorp prior to any final settlement of such appeal.
If
Transferors elect not to pursue such matters, then the applicable Property
Owning Subsidiary may continue to prosecute same. Transferors (or the applicable
Property Owning Subsidiary, if applicable) shall pay from the proceeds of any
refund, all actual and reasonable legal, accounting and other expenses which
may
be incurred in connection with such real estate tax certiorari or other
proceedings or protests, and Transferors (or the applicable Property Owning
Subsidiary, if applicable, with Transferors’ consent) may settle or compromise
any such proceedings. If such determination shall result in a refund or credit
of taxes, or if the taxes are otherwise reduced, because of a reduction of
the
assessed valuation or tax rate or for any other reason, then the net amount
of
such refund or credit of taxes (after deducting and paying or reimbursing
Transferors’ (and the applicable Property Owning Subsidiary, if applicable)
out-of-pocket third party costs and any refunds or credits of taxes owed to
Tenants under Leases or expired or terminated Leases) shall be apportioned
between Transferors and the applicable Property Owning Subsidiary as of the
Closing.
5.3 Utilities.
(a) Gas,
water, electricity, heat, fuel, sewer and other utilities charges, the
governmental licenses, permits and inspection fees relating to each Property
shall be prorated as of the Closing Date on a per diem basis. Promptly after
the
Closing, each Transferor shall cause all utilities to be transferred to the
name
of the applicable Property Owning Subsidiary. Transferors shall receive a credit
at Closing for any security deposits held by any utility companies and so
transferred to Property Owning Subsidiaries. The Property Owning Subsidiaries
shall be responsible for all utility charges beginning as of the Closing Date
forward.
(b) All
increases in taxes imposed due to a change of use of any portion of any Property
after the Closing Date shall be paid by the applicable Property Owning
Subsidiary.
(c) Any
increases in taxes directly attributable to reassessment of any of the
Properties for ad valorem (including real estate and franchise) tax purposes
as
a result of the transactions contemplated by this Agreement shall be paid by
the
applicable Property Owning Subsidiary.
(d) Notwithstanding
the foregoing, to the extent that a Lease requires a Tenant to pay an item
described in the preceding paragraphs
(a), (b)
and
(c),
then
such item shall not be prorated at Closing and the applicable Property Owning
Subsidiary shall look solely to such Tenant for payment of such
item.
5.4 Rent
and Other Tenant Charges.
33
(a) Rent
under each Lease shall be apportioned as of the Closing Date [to the extent
such
rent has actually been collected as of such date]. Except as provided below
in
this Section 5.4,
with
respect to any rent arrearages arising under each Lease for the period prior
to
the month in which the Closing occurs, after Closing, the applicable Property
Owning Subsidiary shall pay to the applicable Transferor any rent actually
collected which is applicable to the period preceding the Closing Date;
provided, however, that all rent collected by the applicable Property Owning
Subsidiary shall be applied first to all unpaid rent for the month in which
the
Closing occurs, next, to all unpaid rent accruing after the Closing Date, and
then to unpaid rent accruing prior to the Closing Date. Tenant obligations
for
taxes, common area expenses, operating expenses or additional charges of any
other nature (“Expense
Reimbursements”)
shall
be adjusted, and credit given to the applicable Transferor or Property Owning
Subsidiary, on a Lease by Lease basis, in accordance with Section
5.12
hereof.
(b) Payments
of additional rent based upon the amount by which a designated percentage of
each Tenant’s gross revenues achieved during the applicable rent period exceeded
base rent, breakpoint or some other standard (“Percentage
Rent”),
if
any, for any applicable rent period in which the Closing occurs shall be
apportioned between the Transferors and the Property Owning Subsidiaries. The
Property Owning Subsidiaries and Transferors will prorate the total Percentage
Rent due from each Tenant for such Tenant’s applicable rent period, based upon
the number of days in the applicable rent period each of the parties owned
the
applicable Properties, as soon as practicable after each such Tenant has made
the payment due with respect to such rent period. Until the Percentage Rent
payable by a Tenant is prorated pursuant to the immediately preceding sentence,
(A) Transferors will initially retain all monthly or quarterly interim payments
of Percentage Rent made before the Closing by such Tenant for such applicable
rent period and (B) the Property Owning Subsidiaries will initially retain
all
monthly or quarterly interim payments of Percentage Rent made on and after
the
Closing Date by such Tenant for such applicable rent period. Any amounts
collected by or on behalf of Property Owning Subsidiary from a Tenant after
the
Closing that relate to Percentage Rents payable with respect to any applicable
rent period ending before the Closing or any Lease that terminated before the
Closing Date will be remitted to Transferors promptly upon receipt, and any
amounts collected by or on behalf of Transferors from a Tenant after Closing
that relate to Percentage Rents payable with respect to any applicable rent
period ending after the Closing or any Lease that terminates after the Closing
Date will be remitted to the Property Owning Subsidiaries promptly upon receipt.
In the event that any refund shall be due to any Tenants, there shall be a
reproration as of the Closing Date between Transferors and the Property Owning
Subsidiaries.
(c) A
Transferor shall be entitled to xxx a Tenant or take any other actions to
collect any delinquent rent or Expense Reimbursements due to Transferor (and
not
previously paid to Transferor) so long as (i) such suit does not seek a
termination of such Tenant’s Lease or eviction of such Tenant, (ii) Transferor
keeps the Property Owning Subsidiary informed as to such action and (iii) the
applicable Property Owning Subsidiary shall use reasonable good faith efforts
to
support each Transferor’s collection efforts.
5.5 Prepaid
Items.
All
prepaid rentals and other prepaid payments attributable to the applicable
Property Owning Subsidiary’s period of ownership, security deposits not applied
against Tenants’ obligations under Leases, and any electric, gas, sewer and
water deposits deposited with a Transferor by Tenants (including all accrued
interest on all of the foregoing, unless a Transferor is entitled to retain
the
benefit thereof) under any Leases, license agreements or concession agreements
relating to any Property, shall all belong to the applicable Property Owning
Subsidiaries and all shall be assigned by the applicable Transferor and
delivered to the applicable Property Owning Subsidiary at the Closing.
Notwithstanding the foregoing, the amount of any security deposits received
by a
Transferor and not applied against Tenants’ obligations under Leases shall be
credited against the applicable Agreed Fair Market Value and Transferors shall
be entitled to retain any deposits so credited. The JV shall indemnify, defend
and hold the applicable Transferor harmless with respect to any prepaid amounts
or security deposits delivered or credited to the JV or the Property Owning
Subsidiaries at Closing.
34
5.6 Declaration
Assessments.
Any
assessments and other charges paid or payable by Transferors under any
declarations, reciprocal easement agreements, covenants, restrictions or other
agreements affecting the Properties shall be prorated between the Transferors
and the Property Owning Subsidiaries as of the Closing.
5.7 Service
Contracts.
Fees and other charges under any Contracts which are not terminated at or prior
to Closing shall be prorated between the Transferors and the Property Owning
Subsidiaries as of the Closing.
5.8 Special
Closing Credit.
The Property Owning Subsidiaries shall be entitled to a cash credit at Closing
in the amount of $900,000 in the aggregate, without duplication of any other
credit, proration or adjustment at Closing.
5.9 Leasing
Commissions and Leasing Costs.
(a) Transferors
shall be responsible for all unpaid leasing and brokerage commissions and tenant
improvement costs with respect to the current term of all Leases executed prior
to the date hereof except for the Leases identified on Schedule
3.1(f)
as those
for which the JV shall be responsible (collectively, “Scheduled
JV Leases”).
To
the extent that any accrued commissions or tenant improvement costs with respect
to the initial terms of such Leases (other than Scheduled JV Leases and Section
4.4 Leases (as hereinafter defined)) shall not have been paid by Transferors
prior to Closing (the “Unfunded
Leasing Expenses”),
the
Property Owning Subsidiaries shall be entitled to a credit at Closing in an
amount equal to the Unfunded Leasing Expenses, and the Property Owning
Subsidiaries shall (to the extent of such credit) be responsible for payment
of
the Unfunded Leasing Expenses from and after the Closing and shall indemnify
Transferors with respect thereto.
(b) With
respect to (i) any Scheduled JV Leases and (ii) any Lease or Lease modification
entered into by Transferors after the date hereof in accordance with the terms
of Section
4.4
(collectively, “Section
4.4 Leases”),
and
(iii) any renewal, expansion or extension of any Lease through the exercise
after the date hereof of an existing option set forth in an existing Lease
(subject to Section
1.8(c)
hereof),
all tenant improvement work, leasing commissions, legal fees or other expenses
or grants of any free rent period or other concessions shall be paid (or
reimbursed to Transferors at Closing) by the JV, provided that with respect
to
the initial term of any Section
4.4 Lease
(a
“Replacement
Lease”)
that
replaces a Lease in effect on the date hereof which is terminated or expires
prior to Closing, Unfunded Leasing Expenses shall be borne by
Transferors.
35
5.10 Survey
Costs, Title Premiums, Transfer Taxes, Legal Fees.
Each
Transferor has delivered to Investcorp any survey with respect to the Property
owned by it and currently in such Transferor’s possession. Subject to
Section
5.11,
Transferors shall pay for the cost to update, recertify or otherwise revise
surveys for the Properties in connection with the Closing. The premiums for
the
Title Policies and the cost of any related title examination charges,
(collectively, “Title
Charges”)
shall
be paid by Transferors. The JV shall pay attorneys’ fees and disbursements
incurred by Transferors and by Investcorp in connection with the transactions
contemplated by this Agreement. Any property transfer taxes and personal
property sales taxes applicable to the transfer of property shall be paid by
Transferors.
5.11
Fees
and Expenses Related to Financing.
(a) The
JV
shall be responsible for all costs associated with the New Mortgage Financing,
including, without limitation, any costs imposed by or reimbursable to the
lender for physical, environmental and legal due diligence, legal fees and
disbursements and appraisal fees.
(b) Transferors
shall be responsible for all accrued, unpaid interest, costs and expenses,
prepayment premiums, breakage fees or other charges payable to lenders in
connection with the payment and satisfaction of the principal balance of the
Existing Mortgage Debt at Closing, provided that the JV shall pay all prepayment
premiums in connection with the Westgate/Forestwood Debt as set forth on
Schedule
1.5(a)
hereof.
5.12
Closing
Statements; Year-End Reconciliations.
(a) Transferors
shall deliver proposed prorations to Investcorp on or before the date that
is
five (5) Business Days before the Closing Date. Upon approval by Investcorp,
the
parties shall deliver the approved prorations statement (the “Closing
Statement”)
to the
Title Company; provided that if any of such prorations were not accurately
determined, then the same shall be recalculated as soon as reasonably
practicable after the Closing Date and either party owing the other party a
sum
of money based on such subsequent proration(s) shall promptly pay said sum
to
the other party.
(b) If
any
refund of any prorated item is made after the Closing Date whether for a period
prior to or on and after the Closing Date, the same shall be applied first
to
the reasonable out-of-pocket third party costs incurred in obtaining same and
the balance, if any, of such refund shall, to the extent received by a Property
Owning Subsidiary, be paid to the applicable Transferor (to the extent relating
to the period prior to Closing), and to the extent received by Transferors,
be
paid to the applicable Property Owning Subsidiary (to the extent relating to
the
period commencing with the Closing Date).
(c) On
or
before thirty (30) days following the last day of the second full calendar
month
following the year-end reconciliations that are required to be performed under
all of the Leases existing on the date hereof, or such later date as is
contemplated herein for various reprorations, including real property taxes,
the
JV will prepare and deliver to Transferors a final unaudited statement of
proration items and other credits and adjustments to the Agreed Fair Market
Values as of the Closing Date (the “Final
Statement”),
based
on information available as of the last day of the second full calendar month
following such year end reconciliations under Leases (or such later date).
Transferors will afford Investcorp and its representatives and auditors the
opportunity at reasonable times and upon reasonable prior notice to review
with
Transferors all underlying financial records and work papers pertaining to
the
preparation of the Final Statement within Transferors’ control. Any net
adjustment in favor of the JV will be paid in cash by Transferors to the JV
no
later than ten (10) days after delivery of the Final Statement. Any net
adjustment in favor of Transferors will be paid in cash by the JV to Transferors
no later than ten (10) days after delivery of the Final Statement. The Final
Statement may be audited at either party’s request.
36
(d) If
Investcorp and Transferors do not agree on the computation of the proration
items and other credits and adjustments to the Agreed Fair Market Values in
the
Final Statement, then the parties shall appoint an independent auditor to
resolve the matter.
5.13
Survival.
The provisions of this Article
V
shall
survive the Closing.
ARTICLE
VI -
FIRE OR CASUALTY
6.1 Casualty.
(a) If,
prior
to the Closing Date, all or any portion of any Property is destroyed or damaged
by fire, earthquake, hurricane or other casualty, then Transferors shall notify
Investcorp of such fact promptly after Transferors obtain knowledge thereof.
Investcorp shall have no right to terminate this Agreement for any casualty
except as expressly set forth in this Section
6.1.
Unless
required to do so by Law or pursuant to the terms of any Leases or Existing
Mortgage Debt, Transferors shall not be obligated to repair any damage or
destruction (but they may do so and use insurance proceeds for same, as required
to protect against injury to person or property).
(b) If
the
reasonably estimated economic impact following the Closing and diminution in
the
value of a Property as a result of any casualty is agreed by the parties to
be
less than ten percent (10%) of the Agreed Value of the particular Property,
then
Transferors shall assign, without recourse, and turn over to the applicable
Property Owning Subsidiaries all of the insurance proceeds, net of any costs
of
repairs incurred and pair by Transferors and net of reasonable collection costs
incurred and paid by Transferors (or, if such proceeds have not been awarded,
all of the Transferors’ right, title and interest therein) payable with respect
to such casualty, including any business or rental interruption insurance
proceeds for such casualty allocable to the period after Closing, and the
parties shall proceed to Closing pursuant to the terms hereof without adjustment
to Agreed Value except for a credit to the applicable Property Owning
Subsidiaries in the amount of (x) the applicable insurance deductible or
self-insurance amount, if any and (y) casualty proceeds paid to and retained
by
a lender in reduction of the Existing Mortgage Debt.
37
(c) Notwithstanding
the foregoing, if the parties agree that the reasonably estimated economic
impact following the Closing and diminution in the value of a Property as a
result of a casualty is equal to ten percent (10%) or more of its Agreed Value
(determined in accordance with applicable factors for determination of value
set
forth in Section
6.1(d)
below),
then Investcorp, by written notice to Transferors, shall either (i) elect to
reduce the Agreed Value of such Property by such agreed-upon estimated economic
impact following the Closing and diminution in the value of the Property as
a
result of the casualty, and Transferors shall be entitled to retain the related
insurance proceeds or (ii) subject to Section
8.1(b)
elect to
treat such Property as a Dropped Asset, provided that if the Dropped Assets
Cap
would thereby be exceeded, Investcorp shall have the right to terminate this
Agreement and receive a return of the Deposit, in which event each of the
parties hereto shall be relieved of any further obligation to the other arising
by virtue of this Agreement (except for obligations that are expressly intended
to survive the termination of this Agreement).
(d) A
determination as to whether the estimated economic impact (with respect to
periods after Closing) and diminution in the value of a Property as a result
of
a casualty is equal to or greater than ten percent (10%) shall be based on
factors such as whether the Property can be rebuilt in its present size and
use
under current zoning laws, the length of time necessary to rebuild the Property
and resulting loss of rental income, whether the casualty materially adversely
affects access to the Property and the sufficiency of insurance proceeds paid
or
available to the applicable Property Owning Subsidiaries (plus any deductible
paid to the applicable Property Owning Subsidiaries) to repair and/or replace
any improvements damaged by the applicable casualty and/or the sufficiency
of
business interruption and/or rental insurance paid or available to the
applicable Property Owning Subsidiaries to replace rental income that would
have
been calculated during the period of time of repair and/or
restoration.
(e) The
provisions of this Section
6.1
shall be
the sole remedy for Investcorp for losses arising from any casualty, and except
as provided in this Section
6.1,
the
Agreed Value of any affected Property shall not be reduced by reason of any
such
matter.
ARTICLE
VII -
CONDEMNATION
(a) If,
prior
to the Closing Date, all or any part of any Property is taken by condemnation
or
a conveyance in lieu thereof, or if a Transferor receives notice of a
condemnation proceeding with respect to a Property, then Transferors shall
promptly notify Investcorp thereof. Investcorp shall have no right to terminate
this Agreement by reason of any such condemnation or conveyance except as set
forth in this Article
VII.
(b) If
the
parties agree that the reasonably estimated economic impact following the
Closing and diminution in the value of a Property as a result of such
condemnation is equal to ten percent (10%) or more of its Agreed Value
(determined in accordance with applicable factors for determination of value
set
forth in Section
6.1(d)),
then
Investcorp, by written notice to Transferors, may (i) elect to reduce the Agreed
Value of such Property by such agreed-upon estimated economic impact following
the Closing and diminution in the value of the Property as a result of such
condemnation, and Transferors shall be entitled to retain the related
condemnation proceeds or (ii) subject to Section
8.1(b)
elect to
treat such Property as a Dropped Asset, provided
that if
the Dropped Asset Cap would thereby be exceeded, Investcorp shall have the
right
to terminate this Agreement and receive a return of the Deposit, in which event
each of the parties hereto shall be relieved of any further obligation to the
other arising by virtue of this Agreement (except for obligations that are
expressly intended to survive the termination of this Agreement).
38
(c) If
the
reasonably estimated economic impact following the Closing and diminution in
value of a Property as a result of such condemnation is agreed by the parties
to
be less than ten percent (10%) of the Agreed Value of the particular Property,
then the applicable Property Owning Subsidiary shall be entitled to any award
given to Transferors as a result of such condemnation proceedings with the
same
(or if not yet awarded, all of Transferors’ right, title and interest therein)
being paid or assigned to the applicable Property Owning Subsidiary at Closing
with a credit to the applicable Property Owning Subsidiary in the amount of
the
award paid to and retained by a lender in reduction of the Existing Mortgage
Debt.
(d) Transferors
shall not enter into any settlement with respect to any condemnation proceeding,
deed or settlement in lieu of condemnation or similar agreement without
Investcorp’s prior written consent (which shall not be unreasonably withheld).
Prior to Closing, Transferors shall have the right, with Investcorp’s
participation, to lead and conduct all negotiations with respect to any such
settlement. The provisions of this Article
VII
shall be
the sole remedy for Investcorp for losses arising from any condemnation, it
being understood that, except as expressly set forth in this Article
VII,
the
Agreed Value of any affected Property shall not be reduced by reason of any
such
matter.
ARTICLE
VIII -
DEFAULT
8.1 Transferors’
Default.
(a) If
Transferors default in the performance of any material obligations hereunder
and
fail to cure such default within thirty (30) days after written notice of such
default, or if the representations and warranties set forth in this Agreement
shall not be true and correct in all material respects on the date hereof and
as
of the Closing Date (exclusive of representations, warranties and obligations
in
respect of Dropped Assets), Investcorp shall, as its sole and exclusive remedy,
have the right to either (a) terminate this Agreement and receive a return
of the Deposit, in which event each of the parties hereto shall be relieved
of
any further obligation to the other arising by virtue of this Agreement (except
for obligations that are expressly intended to survive the termination of this
Agreement), or (b) pursue specific performance of Transferors’ obligations
to execute and deliver the Deeds and other instruments of transfer and
contribution required to be delivered by Transferors pursuant to this Agreement,
together with the costs of enforcing such obligations under this Agreement
(but
without pursuing damages from Transferors); provided, however, and
notwithstanding anything to the contrary above, if specific performance is
not
available or would not be an adequate remedy as the result of Transferors’
willfully conveying or encumbering the Properties after the date of this
Agreement in intentional breach hereof, then Investcorp shall be entitled to
seek a full and immediate refund of the Deposit and shall also be entitled
to
seek damages from Transferors.
39
(b) In
the
event that Transferors are unable to satisfy any of the conditions precedent
to
Investcorp’s obligation to proceed to Closing hereunder with respect to any
Property (by reason of misrepresentation, breach of covenant, inability to
clear
title or inability to obtain Estoppels or any other cause except an intentional
misrepresentation or willful breach of covenant or willful act of Transferors
intended to result in or cause any Transferor to be unable to satisfy any of
the
conditions precedent to Investcorp’s obligation to Close), Transferors shall
have the right to exclude such Property or Properties (a “Dropped
Asset”
or
“Dropped
Assets”)
from
the Properties that are the subject of this Agreement by delivering a notice
(a
“Dropped
Property Notice”)
to
Investcorp on or before the Closing Date provided
that
such Dropped Assets, together with any Property or Properties the Investcorp
elects to treat as Dropped Assets pursuant to Section
1.9,
Article
VI
and
Article
VII
hereof,
do not exceed, in the aggregate, the Dropped Assets Cap. Investcorp shall have
until the fifth Business Day prior to the Closing Date to waive the problem,
breach, misrepresentation or condition that gave rise to Transferor’s delivery
of the Dropped Property Notice. If Investcorp so elects to waive, the Property
shall not be deemed a Dropped Asset and Investcorp shall be deemed to have
waived any right to an adjustment, reduction in Agreed Value, or other damages,
compensation or indemnification with respect to the problem, breach,
misrepresentation or condition that gave rise to such Dropped Property Notice.
If Investcorp does not elect to waive the condition, breach, misrepresentation
or problem within said period, and the Dropped Asset Cap is not thereby
exceeded, this Agreement will be deemed amended, without any further action
on
the part of any party, with respect to each such Dropped Asset, as
follows:
(i) The
Dropped Asset shall be released from this Agreement, shall not constitute a
Property hereunder, and may be held or sold by Transferors independently of
this
Agreement;
(ii) The
aggregate Agreed Value of the Properties shall be reduced by the amount of
the
Agreed Value for such Dropped Asset;
(iii) Any
Existing Mortgage Debt with respect to such Dropped Asset shall be excluded
from
Existing Mortgage Debt hereunder;
(iv) No
failure of a condition precedent or breach or misrepresentation by Transferors
associated with such Dropped Asset shall be a breach or misrepresentation
hereunder;
(v) Investcorp
shall have no right to claim any damages, or other compensation or reimbursement
of any kind with respect to such Dropped Asset; and
(vi) The
Transferor that owns such Dropped Asset shall be released of any and all further
obligations under this Agreement relating to such Dropped Asset and if such
Transferor does not own any other Property, such Transferor shall have no
further obligations or liabilities under this Agreement.
(c) Notwithstanding
anything to the contrary in this Agreement, (i) the Properties known as Westgate
and Xxxxxx shall not be Dropped Assets and (ii) Properties treated as Dropped
Assets under this Agreement shall not be more than two in number and shall
not
have an aggregate Agreed Value in excess of $50,000,000 (the limitations set
forth in this clause (ii), the “Dropped
Assets Cap”).
Transferors shall have the right in their sole and absolute discretion to extend
the Closing Date, if necessary, from time to time by notice to Investcorp
delivered on or prior to the date then set for Closing (for a maximum extension
period not to exceed thirty (30) Business Days in the aggregate) to obtain
any
necessary consents or take other actions necessary or appropriate to avoid
or
prevent an exclusion of Property or Properties pursuant to this Section
8.1(b).
40
8.2 Investcorp
Default.
If
Investcorp defaults hereunder and, in the case of a default other than a failure
to close on the Closing Date, fails to cure such default within ten (10) days
of
written notice of such default (provided that if such default cannot be cured
by
payment and if Investcorp is diligently pursuing such cure but cannot cure
within such ten (10) day period, then such cure period shall be extended, at
Investcorp’s request made prior to expiry of such ten (10) day period, for such
additional period, not to exceed twenty (20) days, as is reasonably necessary
to
allow Investcorp to cure such default), Transferors may elect to terminate
this
Agreement and the Deposit shall be delivered to Transferors as liquidated
damages in full settlement of all claims against Investcorp and as Transferor’s
sole and exclusive remedy hereunder. The parties agree that the amount of actual
damages which Transferors would suffer as a result of Investcorp’s default would
be extremely difficult to determine and have agreed, after specific negotiation,
that the amount of the Deposit is a reasonable estimate of Transferor’s damages
and is intended to constitute a fixed amount of liquidated damages in lieu
of
other remedies available to Transferors and is not intended to constitute a
penalty.
ARTICLE
IX -
MISCELLANEOUS
9.1 Brokers.
Each
party to this Agreement represents and warrants that neither it nor any of
its
Affiliates has had any contact or dealings regarding any Property, or any
communication in connection with the subject matter of the transactions
contemplated by this Agreement, through any real estate broker or other person
who can claim a right to a commission or finder’s fee in connection with
therewith other than Secured Capital Corp., whose compensation, if any, shall
be
paid by Equity One (it being understood that nothing herein constitutes or
shall
be deemed to constitute an acknowledgement or agreement that any compensation
or
other amount is due or owing to any such party). In the event that any other
broker or finder claims a commission or finder’s fee based upon any contact,
dealings or communication, the party through whom or through whose Affiliate
such other broker or finder makes its claim shall be solely responsible for
such
commission or fee and for all costs and expenses (including, without limitation,
reasonable attorneys’ fees and disbursements) incurred by the other party and
its Affiliates in defending against the same. The party through whom or through
whose Affiliate such other broker or finder makes a claim shall hold harmless,
indemnify and defend the other parties hereto, their successors and assigns,
agents, employees, officers and directors, from and against any and all Losses,
arising out of, based on, or incurred as a result of such claim. The provisions
of this Section shall survive the Closing.
9.2 Entire
Agreement; No Amendment.
41
This
Agreement (and, when executed and delivered, the Related Agreements) represents
the entire agreement among each of the parties hereto with respect to the
subject matter hereof. It is expressly understood that no representations,
warranties, guarantees or other statements shall be valid or binding upon a
party unless expressly set forth in this Agreement. It is further understood
that any prior agreements or understandings between the parties with respect
to
the subject matter hereof have merged in this Agreement, which alone fully
expresses all agreements of the parties hereto as to the subject matter hereof
and supersedes all such prior agreements and understandings. This Agreement
may
not be amended, modified or otherwise altered except by a written agreement
signed by all parties hereto. No obligation under this Agreement which by its
terms is to be performed or continue to be performed after Closing and no
provision of this Agreement which is expressly to survive Closing shall merge
upon Closing, but shall survive Closing.
9.3 Notices.
Any
notice or communication required under or otherwise delivered in connection
with
this Agreement to any of the parties hereto shall be written and shall be
delivered to such party as follows:
If
to any
Equity One Parties:
0000
X.X.
Xxxxx Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxx
Merkur
Fax: (000)
000-0000
with
a
copy to:
0000
X.X.
Xxxxx Xxxxxxx Xxxxx
Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxxx
Xxxxxxxxx, Esq.
Fax: (000)
000-0000
and
with
copies to:
Xxxxxxxxx
Traurig, LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxx
X. Ivanhoe, Esq.
Fax: (000)
000-0000
and
Xxxxxxxxx
Traurig P.A.
0000
Xxxxxxxx Xxxxxx
Xxxxx,
Xxxxxxx 00000
Attn: Xxx
Xxxxxx, Esq.
Fax: (000)
000-0000
42
If
to
Investcorp:
Investcorp
International Inc.
000
Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: F.
Xxxxxxxx Xxxxxx and Xxxx Xxxxx
Fax: (000)
000-0000
and
to:
Paul,
Hastings, Xxxxxxxx & Xxxxxx, LLP
Park
Avenue Tower
00
X.
00xx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Xxxxxx
Xxxxxx of America
Attn: Xxxx
X. Xxxxxx, Esq.
Fax: (000) 000-0000
Each
notice shall be in writing and shall be sent to the party to receive it either
by (a) postage prepaid by certified mail, return receipt requested,
(b) by a nationally recognized overnight courier service that provides
tracking and proof of receipt, or (c) by facsimile as long as such notice
sent by facsimile is also sent the same Business Day by a nationally recognized
overnight courier service as set forth above. A Notice shall be deemed delivered
(i) three Business Days after deposit in the U.S. mail in accordance with
clause (a) above, (ii) the day sent if by facsimile with a follow-up
by overnight courier, and (iii) the first Business Day after being sent if
sent by overnight courier. The time to respond to any notice shall commence
to
run on the day such notice is deemed to have been delivered in accordance with
the foregoing. Counsel for Investcorp shall have the right to send notices
on
behalf of Investcorp.
9.4 No
Assignment.
Except
as
set forth in Section
9.7(a),
neither
this Agreement nor any of the rights or obligations hereunder may be assigned
by
any party hereto without the prior written consent of the other
parties.
9.5 Governing
Law; Waiver of Jury Trial.
The
laws
of the State of New York shall govern the validity, enforcement and
interpretation of this Agreement, except to the extent, as to an individual
Property, the law of the State where the Property is located must govern as
a
matter of law.
IN
THE
EVENT OF ANY DISPUTE ARISING PURSUANT TO THIS AGREEMENT, INCLUDING THE
INTERPRETATION OR IMPLEMENTATION OF THIS AGREEMENT, THE PARTIES HERETO HEREBY
WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY.
43
9.6 Multiple
Counterparts.
This
Agreement may be executed in multiple counterparts. If so executed, all of
such
counterparts shall constitute but one agreement, and, in proving this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
9.7 Further
Assurances.
(a) Investcorp
understands that Transferors may seek to structure their disposition of one
or
more of the Properties in such a way that will afford Transferors an opportunity
to take advantage of the provisions of Code Section 1031 governing tax free
exchanges and reorganizations. Investcorp shall cooperate with Transferors
in
such efforts. Without limiting the generality of the foregoing, Investcorp
and
the JV, as directed by Transferors, shall make all payments on account of the
consideration payable to Transferors hereunder, or portions thereof, to one
or
more Qualified Intermediaries (as defined in the Code) and not to Transferors,
directly or indirectly. Each Transferor reserves the right, in effectuating
such
like-kind exchanges, to assign such Transferor’s rights, but not its
obligations, under this Agreement to such Qualified Intermediaries, and
Investcorp hereby consents to such assignment. Investcorp agrees to execute
such
reasonable documents and otherwise to cooperate in such respects as may
reasonably be requested by Transferors in order to enable Transferors to carry
out one or more like-kind exchanges as aforesaid. Transferors shall be entitled
to one or more reasonable adjournments of the Closing Date to facilitate such
like-kind exchanges. Transferors shall indemnify, defend and hold Investcorp
and
the JV harmless from and against any and all costs, loss, liability and expenses
arising out of or in connection with such like-kind exchange.
(b) From
and
after the date of the Closing, the parties hereto shall take such further
actions and execute and deliver such further documents and instruments as may
be
reasonably requested by the other parties and are reasonably necessary to
provide to the respective parties hereto the benefits intended to be afforded
hereby The provisions of this Section shall survive Closing.
9.8 Miscellaneous.
Whenever
herein the singular number is used, the same shall include the plural, and
the
plural shall include the singular where appropriate, and words of any gender
shall include the other gender when appropriate. The headings of the Articles
and the Sections contained in this Agreement are for convenience only and shall
not be taken into account in determining the meaning of any provision of this
Agreement. The words “hereof’ and “herein” refer to this entire Agreement and
not merely the Section in which such words appear. If the last day for
performance of any obligation hereunder is not a Business Day, then the deadline
for such performance or the expiration of the applicable period or date shall
be
extended to the next Business Day.
44
9.9 Invalid
Provisions.
If
any
provision of this Agreement is held to be illegal, invalid or unenforceable
under present or future laws, such provision shall be fully severable, this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect
and
shall not be affected by the illegal, invalid or unenforceable provision or
by
its severance from this Agreement, unless such severance and construction would
materially alter the parties’ intent with respect to the transactions
contemplated by this Agreement.
9.10 Confidentiality;
Publicity.
In
the
event this Agreement is terminated, Investcorp shall promptly return to
Transferors or destroy (and provide a certification of such destruction) all
materials delivered by the Transferors to Investcorp or its representatives.
The
parties hereto shall consult with each other prior to working any public
statement with respect to the JV, provided that Equity One need not consult
with
Investcorp with respect to any statement or disclosure required by law or
regulation.
9.11 No
Recording.
The parties agree that this Agreement shall not be recorded in any public real
estate registry. Neither this Agreement nor any memorandum or short form hereof
shall be recorded or filed in any public land or other public records of any
jurisdiction, by either party and any attempt to do so may be treated by the
other party as a breach of this Agreement.
9.12 OFAC
Policy.
Neither Investcorp nor any of its Affiliates has engaged in any dealings or
transactions, directly or indirectly, (a) in contravention of any U.S.,
international or other money laundering regulations or conventions, including
the United States Bank Secrecy Act, the United States Money Laundering Control
Act of 1986, the United States International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001, Trading with the Enemy Act (50 U.S.C.
§1
et seq., as amended), or any foreign asset control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto, or (b) in
contravention of Executive Order No. 13224 dated September 24, 2001 issued
by
President of the United States (Executive Order Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten To Commit, or Support
Terrorism), as may be amended or supplemented from time to time or on behalf
of
terrorists or terrorist organizations.
9.13 Limitation
of Liability.
Notwithstanding anything to the contrary contained in this Agreement, it is
understood and agreed that none of the employees, directors, officers, members,
partners, managers, principals, consultants, shareholders, advisors, attorneys,
or agents of Equity One or of any other Transferor, shall have any personal
liability or obligation whatsoever for obligations under this Agreement or
under
any documents delivered at Closing, and the individual assets of such parties
shall not be subject to any claims of any Person relating to such obligations.
Notwithstanding anything to the contrary contained in this Agreement, it is
understood and agreed that none of the employees, directors, officers, members,
partners, managers, principals, consultants, shareholders, advisors, attorneys
or agents of Investcorp shall have any personal liability or obligation
whatsoever for any obligations under this Agreement of under any documents
delivered at Closing, and the individual assets of such parties shall not be
subject to any claims of any Person relating to such obligations. However,
the
foregoing shall not in any way limit the parties’ obligations and liabilities
under this Agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
45
IN
WITNESS WHEREOF, the parties hereto have executed this Contribution and Sale
Agreement as of the date and year first above written.
INVESTCORP:
|
|||
TEXAS
RETAIL INVEST, LLC,
a
Delaware limited liability company
|
|||
By:
|
|||
Name:
|
|||
Title:
|
[TRANSFERORS’
SIGNATURES FOLLOW IMMEDIATELY]
TRANSFERORS:
|
|||||
BANDERA
FESTIVAL PARTNERS, LP,
|
BC
CENTER PARTNERS, LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Bandera
Festival GP, LLC, a Texas limited liability company and its general
partner
|
By:
|
Harbor
Xxxxxx Cypress GP, LLC, a Texas limited liability company and its
general
partner
|
||
By:
|
|
By:
|
|
||
|
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
|||
|
Title:
Vice President
|
Title:
Vice President
|
|||
|
|
|
|||
BEECHNUT
CENTRE I L.P.,
|
EQY (SOUTHWEST PORTFOLIO) INC., | ||||
a
Texas limited partnership
|
a Texas corporation | ||||
By:
|
Beechnut
Centre Corp., a Texas corporation and its general partner
|
By:
|
|
||
|
|
Name:
Xxxxx Xxxxxx
|
|||
|
|
Title:
Vice President
|
|||
By: | |||||
|
Name:
Xxxxx Xxxxxx
|
|
|||
|
Title:
Vice President
|
||||
|
|
|
|||
UIRT
- COLONY PLAZA, INC.,
|
TEXAS
CP LAND, LP,
|
||||
a
Texas corporation
|
a
Texas limited partnership
|
||||
By:
|
|
By:
|
Colony
GP, LLC, a Texas limited liability company and its general
partner
|
||
|
Name:
Xxxxx Xxxxxx
|
||||
|
Title:
Vice President
|
|
|||
|
|
By:
|
|||
|
|
Name:
Xxxxx Xxxxxx
|
|||
|
|
Title:
Vice President
|
|||
|
|
||||
EQY
(SOUTHWEST PORTFOLIO) INC.,
|
EQUITY
(TEXAS) ONE CREEKSIDE LP,
|
||||
a
Texas corporation
|
a
Texas limited partnership
|
||||
|
|
||||
By:
|
By:
|
Equity
(Texas) One Creekside GP LLC, a Texas limited liability company and
its
general partner
|
|||
|
Name:
Xxxxx Xxxxxx
|
|
|
||
|
Title:
Vice President
|
|
|
||
|
|
By:
|
|
||
|
|
Name:
Xxxxx Xxxxxx
|
|||
|
Title:
Vice President
|
EQUITY
(TEXAS) XXX XXXXXXXXX XXXXX XX XX,
|
XXXXXX
(XXXXX) ONE DESOTO LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Equity
(Texas) One Creekside GP LLC, a Texas limited liability company and
its
general partner
|
By:
|
Equity
(Texas) One Desoto GP LLC, a Texas limited liability company and
its
general partner
|
||
By:
|
By:
|
|
|||
|
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
|||
|
Title:
Vice President
|
Title:
Vice President
|
|||
|
|
||||
FORESTWOOD
EQUITY PARTNERS, LP,
|
EQUITY
(TEXAS) ONE GREEN OAKS LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Forestwood
Equity Partners GP,
LLC,
a Texas limited liability company and its general partner
|
By:
|
Equity
(Texas) One Green Oaks GP LLC, a Texas limited liability company
and its
general partner
|
||
By:
|
By:
|
|
|||
|
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
|||
|
Title:
Vice President
|
Title:
Vice President
|
|||
|
|
||||
XXXXXX
CENTRE I L.P.,
|
HEDWIG
PARTNERS, LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Xxxxxx
Centre Corp., a Texas corporation and its general partner
|
By:
|
Hedwig
GP, LLC, a Texas limited liability company and its general
partner
|
||
By:
|
By:
|
||||
|
Name:
Xxxxx Xxxxxx
|
|
Name:
Xxxxx Xxxxxx
|
||
|
Title:
Vice President
|
Title:
Vice President
|
|||
UIRT
- HIGHLAND SQUARE, INC.,
|
XXXXXXXX-XXXXXXXXX
PARTNERS, LP,
|
||||
a
Texas corporation
|
a
Texas limited partnership
|
||||
By:
|
By:
|
Kirkbiss
GP, LLC, a Texas limited liability company and its general
partner
|
|||
|
Name:
Xxxxx Xxxxxx
|
||||
|
Title:
Vice President
|
||||
|
By:
|
||||
|
Name:
Xxxxx Xxxxxx
|
||||
|
Title:
Vice President
|
FC
MARKET PARTNERS, LP,
|
XXXXX
PARK PARTNERS, LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
FC
Market GP, LLC, a Texas limited liability company and its general
partner
|
By:
|
Xxxxx
Park GP, LLC, a Texas limited liability company and its general
partner
|
||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
||||
EQY
(SOUTHWEST PORTFOLIO) INC.,
|
GARLAND
& JUPITER, LLC,
|
||||
a
Texas corporation
|
a
Texas limited liability company
|
||||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
||||
BEND
SHOPPING CENTRE I L.P.,
|
EQUITY
(TEXAS) ONE PARKWOOD LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Bend
Shopping Centre Corp., a Texas corporation and its general
partner
|
By:
|
Equity
(Texas Holdings) One GP LLC, a Texas limited liability company and
its
general partner
|
||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
||||
EQUITY
(TEXAS) ONE RICHWOOD LP,
|
TEXAS
SPRING SHADOWS PARTNERS, LP,
a
Texas limited partnership
|
||||
a
Texas limited partnership
|
|||||
By:
|
Equity
(Texas Holdings) One GP LLC, a Texas limited liability company and
its
general partner
|
By:
|
Spring
Shadows GP, LLC, a Texas limited liability company and its general
partner
|
||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
STEEPLECHASE
I L.P.,
|
STERLING
SHOPPING CENTRE I L.P.,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Steeplechase
Centre Corp., a Texas corporation and its general partner
|
By:
|
Sterling
Shopping Centre, Inc., a Texas corporation and its general
partner
|
||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
||||
EQY
(SOUTHWEST PORTFOLIO) INC.,
|
XX
XXXXXX VILLAGE PARTNERS, LP,
|
||||
a
Texas corporation
|
a
Texas limited partnership
|
||||
By:
|
By:
|
XX
Xxxxxx Village Partners GP, LLC, a Texas limited liability company
and its
general partner
|
|||
Name:
Xxxxx Xxxxxx
|
|||||
Title:
Vice President
|
|||||
By:
|
|||||
Name:
Xxxxx Xxxxxx
|
|||||
Title:
Vice President
|
|||||
EQY
(SOUTHWEST PORTFOLIO) INC.,
|
EQUITY
(TEXAS) ONE VILLAGE CENTER LP,
|
||||
a
Texas corporation
|
a
Texas limited partnership
|
||||
By:
|
By:
|
Equity
(Texas) One Southlake GP LLC, a Texas limited liability company and
its
general partner
|
|||
Name:
Xxxxx Xxxxxx
|
|||||
Title:
Vice President
|
|||||
By: | |||||
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
|||||
EQUITY
(TEXAS) ONE WESTGATE LP,
|
EQUITY
(TEXAS) ONE WESTGATE PHASE III LP,
|
||||
a
Texas limited partnership
|
a
Texas limited partnership
|
||||
By:
|
Equity
(Texas) One Westgate GP Inc., a Texas corporation and its general
partner
|
By:
|
Equity
(Texas) One Westgate Phase III GP LLC, a Texas limited liability
company
and its general partner
|
||
By:
|
By:
|
||||
Name:
Xxxxx Xxxxxx
|
Name:
Xxxxx Xxxxxx
|
||||
Title:
Vice President
|
Title:
Vice President
|
||||
WURZBACH
CENTRE, LLC,
|
|||||
a
Texas limited liability company
|
|||||
By:
|
|||||
Name:
Xxxxx Xxxxxx
|
|||||
Title:
Vice President
|