Exhibit 99.1
AGREEMENT FOR SALE
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THIS AGREEMENT FOR SALE ("Agreement") is dated as of July __, 2001 (the
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"Effective Date"), by and between CPG PARTNERS, L.P., a Delaware limited
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partnership ("Buyer"), and KONOVER PROPERTY TRUST, INC., a Maryland corporation
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("Konover"), KPT PROPERTIES, L.P., a Delaware limited partnership ("KPT"), KPT
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REMIC LOAN LLC, a Delaware limited liability company ("REMIC"), KPT MORTGAGE
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LLC, a Delaware limited liability company ("KPT Mortgage"), and SMITHFIELD KPT
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LLC, a Delaware limited liability company ("Smithfield") (individually, a
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"Seller", and collectively, "Sellers").
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IN CONSIDERATION of the respective agreements hereinafter set forth,
Sellers and Buyer agree as follows:
1. Properties Included in Sale.
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1.1 Each Seller hereby agrees to sell and convey to Buyer, and Buyer
hereby agrees to purchase from each Seller, subject to the terms and conditions
set forth herein, all of such Seller's right, title and interest in and to the
following (individually referred to as a "Property" and collectively referred to
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as "Properties"):
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(a) All of the Properties listed on Exhibit A as the "REMIC
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Properties" (i) owned by REMIC and located on that certain real property more
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particularly described on Exhibits A-1 through A-17 (the "REMIC Fee
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Properties"), and (ii) ground leased by REMIC and located in Iowa, LA, as more
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particularly described on Exhibit A-18 (the "REMIC Ground Lease Property").
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(b) All of the Properties listed on Exhibit B as the "CapMark
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Properties" (i) owned by KPT Mortgage and located on that certain real property
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more particularly described on Exhibits B-1 through B-10 (the "CapMark Fee
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Properties"), and (ii) ground leased by KPT Mortgage and located in Boaz, AL and
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Dare, NC/1/, as more particularly described on Exhibits B-11 and B-12 (the
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"CapMark Ground Lease Properties").
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(c) The Property identified as the "Carolina Outlet Center
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Property" ground leased by Smithfield and located on that certain real property
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more particularly described on Exhibit C.
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(d) The Properties identified as the "Hempstead Property", "Tri
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Cities Property" and "Tupelo Property" owned by KPT and located on that
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certain real property more particularly described in Exhibits D-1 through D-3.
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(e) The Properties identified as the "REMIC Outlot Properties"
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owned by Konover and located on that certain real property more particularly
described in Exhibits E-1 through E-6.
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/1/ A portion of the Property located in Dare, NC is owned in fee and a
portion ground leased.
1.2 The interests in the Properties to be conveyed to Buyer include
all of the applicable Seller's right, title and interest in and to the following
with respect to each Property:
(i) The applicable Seller's interest as the fee title
owner of the REMIC Fee Properties, CapMark Fee Properties, Hempstead Property,
Tri Cities Property, Tupelo Property and REMIC Outlot Properties in the land
described in Exhibits A-1 through X-00, X-0 xxxxxxx X-00, X-0 through D-3 and
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E-1 through E-6 to this Agreement (collectively, the "Fee Property Land").
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(ii) The applicable Seller's leasehold interest as ground
lessee of the REMIC Ground Lease Property, the CapMark Ground Lease Properties
and the Carolina Outlet Center Property (the REMIC Ground Lease Property, the
CapMark Ground Lease Properties and the Carolina Outlet Center Property are
collectively referred to as the "Ground Lease Properties") in the land described
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in Exhibits X-00, X-00, X-00, and C to this Agreement (collectively, the
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"Ground Lease Land").
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The Fee Property Land and the Ground Lease Land, together
with any alleys, strips and gores of land adjoining such land, and all rights,
privileges and easements, appurtenances and other rights appurtenant to such
land, any land in the bed of any street, road, avenue, open or proposed, public
or private, in front or adjoining such land, or any portion thereof, to the
centerline thereof, and any award to be made in lieu thereof (collectively, the
"Land").
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(iii) All buildings, improvements, structures and fixtures
located on the Land (collectively, the "Improvements").
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(iv) The Sellers' interest in, to and under all Existing
Leases (as hereinafter defined) and all Existing Contracts (as hereinafter
defined).
(v) All equipment, machinery, furniture, furnishings,
supplies and other tangible personal property, if any, owned by the applicable
Seller, and the applicable Seller's interests in any such property leased by the
applicable Seller, now or hereafter located on and used exclusively in
connection with the ownership, management, maintenance and operation of the Land
and Improvements, including, without limitation, the items listed on Exhibit AA
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attached hereto (collectively, the "Personal Property").
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(vi) To the extent assignable, all intangible personal
property owned by the applicable Seller, if any, and related to and used
exclusively in connection with the ownership, management, maintenance and
operation of the Land and Improvements, including, without limitation: all trade
names and trade marks associated with the Land and Improvements; any warranties
and other contract rights related to the construction, operation, ownership or
management of the Land and Improvements; any governmental permits, approvals and
licenses related to the Land and Improvements; and any unpaid award for damage
to the Land or Improvements by reason of condemnation or eminent domain action
occurring after the date hereof (collectively, the "Intangible Personal
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Property").
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2. Purchase Price.
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(a) The purchase price for the Properties is One Hundred Eighty-
Two Million Five Hundred Thousand Dollars ($182,500,000) (the "Purchase Price"),
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subject to the credits, adjustments and prorations provided for in this
Agreement.
(b) The Purchase Price shall be paid at Closing (as hereinafter
defined) by (i) assumption by Buyer of the "Assumable Debt" (as more
particularly described in Section 4(a)(viii), below), and (ii) payment of the
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balance of the Purchase Price, as adjusted (the "Cash Portion"), as more
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particularly provided in Section 6(c)(i), below.
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3. Deposit.
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(a) Concurrently with the execution and delivery of this
Agreement by Buyer, Buyer shall deliver to Chicago Title Insurance Company, 0000
00xx Xxxxxx, XX, 0xx Xxxxx, Xxxxxxxxxx, XX 00000 (the "Title Company") in escrow
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the sum of Five Million Dollars ($5,000,000) (together with any interest
thereon, the "Deposit"). The Deposit shall be held and released by the Title
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Company in accordance with the provisions of this Agreement and the escrow
provisions attached hereto as Exhibit F. The Title Company may in its
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discretion, by written notice to Buyer and Sellers, designate an agent in the
locality of each Property to serve as custodians of documents to be delivered
into escrow pursuant to this Agreement which are to be recorded or filed at
Closing.
(b) All sums constituting the Deposit shall be held in an
interest-bearing account or in investments approved by Konover and Buyer and
interest accruing thereon shall be for the account of Buyer. All interest earned
on the Deposit shall be considered a portion of the Deposit. In the event the
sale of the Properties as contemplated hereunder is consummated, the Deposit
shall be applied to the Purchase Price at Closing in accordance with the
provisions of this Agreement. In the event this Agreement is terminated by
either party or the Closing does not otherwise take place, the disposition of
the Deposit shall be governed by the applicable provisions of this Agreement and
the escrow provisions attached hereto as Exhibit F.
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4. Review Period.
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During the period commencing on the Effective Date and ending at 5:00 p.m.
EDST on August 13, 2001, or such earlier expiration date as Buyer may elect by
delivery of written notice to Sellers (the "Review Period"), Buyer shall have
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the right to examine, inspect and investigate the Properties and documents,
records and other materials related to the Properties at its sole risk, cost and
expense. The following shall occur during the Review Period:
(a) Seller shall within two (2) Business Days (as hereinafter
defined) following the Effective Date deliver or make available to Buyer to the
extent in Sellers' possession or control the following reports, studies and
other information relating to each Property:
(i) The following title materials:
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(A) Each Seller's existing owner's policies of
title insurance and any existing loan policies obtained during the course of
such Seller's ownership of the Properties (collectively, "Sellers' Title
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Policies").
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(B) Each Seller's most recent "as-built" or
ALTA surveys of the Properties, prepared by a licensed surveyor or civil
engineer ("Sellers' Surveys").
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(C) Copies of all easements, restrictions, and
other documents referenced in Sellers' Title Policies or on Sellers' Surveys
(the "REAs"), together with a list of such documents.
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(ii) Copies of the most recent property tax bills for
the Properties.
(iii) All leases, rental agreements, subleases or
occupancy agreements, and any amendments thereto, or guarantees thereof, by
which any person other than any Seller is allowed to occupy or conduct business
on the Properties (collectively, the "Existing Leases"), which will be assumed
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by Buyer at Closing, together with current rent rolls for the Properties (the
"Rent Rolls"), listing for each of the Existing Leases: the name of the tenant;
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the location of the premises; the amount of base monthly rent and the date
through which such rent has been paid; the amount of any security deposit; and
the termination date of each Existing Lease.
(iv) Existing ground leases, and any amendments
thereto, for each of the Ground Lease Properties (collectively, the "Ground
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Leases"), together with a schedule identifying for each such Ground Lease the
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location of the Property, the ground lessor, the monthly rental payable, the
current term, and any extension rights.
(v) A list together with copies of all management,
employment, service or supply contracts, billboard leases or licenses, equipment
rental agreements, and other contracts related to the ownership or operation of
the Properties and any amendments thereto (the "Existing Contracts"), which will
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be assumed by Buyer at Closing. For purposes of this Agreement, the term
"Existing Contracts" shall not include property management or leasing agreements
with Sellers or their affiliates, or brokerage agreements, all of which shall be
terminated as of the Closing Date.
(vi) All zoning approvals, building permits,
certificates of occupancy and other government permits, authorizations and
approvals (the "Permits").
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(vii) All annual audited financial statements for the
calendar years 1999 and 2000 for REMIC and KPT Mortgage, income statements with
respect to each of the Properties for those periods, and monthly financial
information for the year 2001 for the Properties. The "Consolidated Income
Statement" for each of the Properties provided to Buyer by Credit Suisse First
Boston to the extent they reflect the calendar year 2000 are referred to herein
as the "Operating Statements".
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(viii) All loan and security documents (collectively,
the "Mortgage Documents") relating to the outstanding mortgage debt affecting
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the Properties (and any documents relating to the guarantee thereof) which shall
or may be assumed by Buyer at Closing in accordance with the provisions of this
Agreement, including the following:
(A) the loan made by The Travelers Insurance
Company encumbering the REMIC Properties (the "REMIC Loan"), having an
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outstanding principal balance as of May 31, 2001 of approximately $85,600,000,
including all documentation regarding that certain escrow held by the servicer
of the REMIC Loan in the amount of approximately $4,800,000 in cash collateral
on account of the REMIC Loan, which amount of cash collateral shall be credited
to Sellers at Closing.
(B) the loan made by Nomura Asset Capital
Corporation encumbering the CapMark Properties (the "CapMark Loan"), having an
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outstanding balance as of May 31, 2001 of approximately $65,900,000.
The REMIC Loan and CapMark Loan are collectively referred to
as the "Assumable Debt".
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(ix) All soil, geological and substrata reports,
environmental and hazardous materials reports, engineering reports and
inspection reports, and such other reports and studies regarding the physical
and environmental condition of the Properties as may be in Sellers' possession
or control, including, without limitation, those reports and studies listed on
Exhibit G (collectively, the "Reports").
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(x) The documents relating to the obligations of
KPT Mortgage LLC and KPT with respect to the formation and operation of the
limited liability company to be known as "Welcome KPT LLC".
(b) Sellers shall, as soon as practical, deliver or
otherwise make available to Buyer and Buyer's attorneys the following
information to the extent in Sellers' possession or control:
(i) All tenant lease files and such other
information as may be reasonably requested by the Buyer to verify any of the
lease information provided in the Existing Leases or the Rent Roll.
(ii) Such other financial records and reports
relating to the operation of the Properties as Buyer may reasonably request.
(iii) Such work papers of Xxxxxx Xxxxxxxx and
detailed information as Buyer may reasonably request to support the financial
information furnished by Sellers to Buyer.
(iv) A list of all employees at the Properties,
which list shall include each such employee's name, title, salary, date they
commenced employment, benefits provided to such employee which are different
than those provided to employees generally, and
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any other information about such employee as Buyer may reasonably request that
would be material to a prospective employer of such employee.
(c) Sellers shall, as soon as practical, and at Buyer's
sole cost and expense, obtain from Title Company, and cause to be delivered to
Buyer and Buyer's attorneys:
(i) a title insurance commitment for each of the
Properties (the "Commitment"), issued by the Title Company, accompanied by
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copies of all documents referred to in the Commitment. The Commitment shall
evidence the Title Company's agreement to issue an owner's fee title or
leasehold policy of title insurance, as applicable, to Buyer at a price not to
exceed the Title Company's standard rates (the "Title Policy"), insuring the
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Properties for the full amount of the Purchase Price (in the aggregate) good and
insurable fee simple title or leasehold interest, as applicable, to the
Properties vested in Buyer, free from the standard printed exceptions and free
and clear of all other exceptions except the following exceptions (the
"Permitted Exceptions"): (1) all presently existing and future liens of real
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estate taxes or assessments and water rates, water meter charges, water frontage
charges and sewer taxes, rents and charges, if any, provided that such items are
not yet due and payable and are apportioned as provided in this Agreement, (2)
with respect to the applicable Properties, the Ground Leases, the Las Vegas
Option and the Mortgage Documents (as hereinafter defined), (3) those matters
reflected as exceptions on the Commitments or shown on the Surveys (or the
Sellers' Surveys, to the extent applicable) or which Buyer otherwise receives
written notice prior to the expiration of the Review Period (or the Title and
Survey Extension (as hereinafter defined), if applicable), unless Buyer provides
written notice of its objection (which objection must be commercially
reasonable): (i) with respect to those matters that Buyer shall receive written
notice of prior to the tenth (10th) day preceding the expiration of the Review
Period (or the Title and Survey Extension, if applicable), prior to the
expiration of the Review Period (or the Title and Survey Extension, if
applicable), and (ii) with respect to those matters that Buyer shall receive
written notice of from and after the tenth (10th) day preceding the expiration
of the Review Period (or the Title and Survey Extension, if applicable), prior
to the tenth (10th) day following receipt of notice of such matters, and (4)
those matters to which Buyer has previously objected but subsequently waives
such objection in writing.
(d) Buyer shall, as soon as practical, obtain an ALTA
survey of each of the Properties by a licensed surveyor or civil engineer,
reasonably acceptable to, and certified to, Buyer and in sufficient detail to
provide the basis for the Title Policy(the "Survey").
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(e) Buyer shall be permitted to enter the Properties to
make and perform environmental, physical and other non-invasive inspections,
investigations, tests and studies, as Buyer may determine to be reasonable or
appropriate in Buyer's sole and absolute discretion of each Property. Buyer
shall also be permitted to discuss the Properties with all managerial-level
employees of Sellers at the properties and those persons listed in the
penultimate paragraph of Section 8, and Sellers shall instruct all such
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employees to consult with Buyers with respect to the Properties (if requested by
Buyer), so long as Sellers are permitted a reasonable opportunity to participate
in such discussions if they choose to do so. Buyer shall be permitted to enter
Properties at reasonable times during normal business hours from time to time
following not less than one (1) Business Day's prior oral or written notice to
Xxxxx Xxxxxxxx or
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Xxxxxx X. Xxxxx III to conduct its inspections and investigations. Buyer agrees
not to unreasonably interfere with the operations of Sellers or any tenants of
Sellers. Buyer agrees to indemnify and hold Sellers harmless against any claims
for bodily injury, property damage and mechanics' liens, and Sellers' attorneys'
fees reasonably incurred and arising out of any actions of Buyer or its agents,
contractors or representatives on any Property in the course of such inspection
and investigation activities. If any inspection or test disturbs a Property,
Buyer shall restore the Property to the same condition as existed prior to any
such inspection or test. Prior to any entry upon a Property, Buyer shall provide
Sellers with evidence of insurance reasonably acceptable to Sellers in an amount
not less than $1,000,000 per occurrence, naming Sellers as an additional
insured, to insure against acts of Buyer and its agents, contractors and
representatives. Buyer shall not contact any tenants of the Property without
prior written or oral notice to Sellers. Buyer shall use good faith efforts to
advise Sellers of any material and adverse responses received from tenants whom
it contacts, but the failure to do so shall not constitute a default under this
Agreement.
(f) Buyer shall be permitted to identify and confirm the
availability from all applicable private and governmental authorities of all
zoning, platting, site plan, and other applicable approvals, permits, licenses
and easements relating to the Properties. Neither Buyer nor any person acting on
Buyer's behalf shall contact any governmental authority with respect to any
Property without first providing Sellers with prior oral or written notice of
the nature of such inquiry and, if requested, a reasonable opportunity to
participate in such conversations; provided, however, that notice to Sellers'
shall not be required with respect to contact with zoning and building and
safety departments.
(g) Buyer shall be permitted to review and determine the
existence, availability and sufficiency of connections to electricity, gas,
telephone, cable, sewer, water, storm drain facilities and all other utilities
to service each Property.
(h) Buyer and Sellers shall use good faith efforts (i) to
satisfy all conditions and requirements and obtain all consents (including the
approvals of lenders, trustees, servicers, and rating agencies, as applicable)
necessary to permit at Closing (A) the assumption of the Assumable Debt and,
subject to the terms of Section 15, below, the transfer of ownership of the
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Properties encumbered by such debt to Buyer, (B) the release of the properties
encumbered by the REMIC Loan located in Oakland Park, FL, Greenville, NC, Wake
County, NC, Lenoir, NC, and Petersburg, VA (collectively, the "Community Center
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Properties") which shall be conveyed to KPT or its designee at the time of
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Closing free and clear of the lien of the REMIC Loan, (C) a reduction of the
outstanding balance of the REMIC Loan by approximately $14,000,000, or more, in
connection with the release of the Community Center Properties from the lien of
the REMIC Loan, (D) the release of KPT and its affiliates from any liability or
obligations from and after the Closing Date under the applicable Mortgage
Documents, (E) the retention of ownership of the VF Properties by REMIC as
encumbered by the REMIC Loan in accordance with Section 15; and (F) the
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execution and delivery of the Las Vegas Option at Closing in accordance with
Section 14; provided, however, that if the holder of the Assumable Debt is
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unwilling to release KPT and its affiliates, subject to the provisions of
Section 15(c), below, Buyer agrees to assume any and all liability arising from
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or in connection with the Assumable Debt from and after the Closing Date,
including (without limitation) the obligation to
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make all payments on account of principal and interest arising from and after
the Closing Date, monthly and at maturity; and provided, further, that Sellers
may waive the condition described in clause (E) by delivery of written notice to
Buyer prior to the expiration of the Review Period, and the condition described
in clause (F) by delivery of written notice to Buyer prior to the expiration of
the Review Period or the Assumption Conditions Extension (as hereinafter
defined), and (ii) to reach agreement among Sellers, Buyer and each holder of
Assumable Debt as to the form of assumption agreement or other documentation
(each, an "Assumption Agreement") evidencing satisfaction of all conditions and
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the granting of all consents and releases or indemnifications described in
subsection (i) (collectively referred to herein as the "Assumption Conditions").
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The Assumption Agreements shall also contain estoppel language, confirming the
Mortgage Documents in effect for each loan, the outstanding balance of each
loan, the absence of defaults, and such other matters as Buyer may reasonably
request. Buyer and Sellers shall cooperate in good faith with each other and any
applicable lenders in connection with the assumption of the Assumable Debt,
including, without limitation, providing such lenders and the applicable credit
rating agencies with all information reasonably requested in connection
therewith and, with respect to Buyer, taking title to the applicable Property in
one or more related single purpose entities if requested by the applicable
lenders and/or rating agencies in connection with the assumption of the
Assumable Debt at Closing.
(i) As soon as practicable following the Effective Date,
Sellers shall deliver to all tenants of the Properties tenant estoppel
certificates substantially in the form attached hereto as Exhibit H (or such
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other form as may be required under the terms of the applicable Existing Lease)
("Tenant Estoppels"), and Sellers shall use good faith efforts to deliver to
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Buyer Tenant Estoppels from all tenants of the Property prior to Closing.
Sellers shall deliver to Buyer copies of all Tenant Estoppels promptly following
receipt thereof.
(j) As soon as practicable following the Effective Date,
Sellers shall deliver to all ground lessors of the Ground Lease Properties
estoppel certificates substantially in the form attached hereto as Exhibit I (or
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such other form as may be required under the terms of the applicable Ground
Lease ("Ground Lessor Estoppels"), and Sellers shall use good faith efforts to
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deliver to Buyer Ground Lessor Estoppels from all ground lessors of the Ground
Lease Properties prior to Closing. Sellers shall deliver to Buyer copies of all
Ground Lessor Estoppels promptly following receipt thereof.
(k) As soon as practicable following the Effective Date,
Sellers shall deliver to all declarants or other identified parties under (i)
the REAs and (ii) similar documents identified by Buyer by delivery of written
notice to Sellers at least ten (10) days prior to the expiration of the Review
Period which such documents contain encumbrances which materially affect any
Property (collectively, the "Restrictive Covenants") estoppel certificates
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substantially in the form attached hereto as Exhibit J (or such other form as
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may be required under the terms of the applicable Restrictive Covenants)
("Declarant Estoppels"), and Sellers shall use good faith efforts to deliver to
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Buyer Declarant Estoppels relating to the Properties from the such declarants or
other identified parties prior to Closing. Sellers shall deliver to Buyer copies
of all Declarant Estoppels promptly following receipt thereof.
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Prior to the expiration of the Review Period, Buyer shall, by written
notice to Sellers, (A) accept or waive any objections to its reviews and
inspections, in which event, the parties shall proceed to Closing in accordance
with the terms of this Agreement (a "Continuation Notice"), (B) advise Sellers
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in writing of its objections, and request that Sellers remedy such objections
prior to the Closing Date (an "Objection Notice"), or (C) elect to terminate
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this Agreement (a "Termination Notice"); provided, however, that Buyer shall
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only be entitled to deliver an Objection Notice or a Termination Notice if Buyer
has objections which are "Permitted Objections" (as hereinafter defined); and
provided, further, that the time period for delivering an Objection Notice shall
be extended (1) with respect to Buyer's right to object to Unacceptable Title,
within the time frames provided in Section 4(c)(i), (2) with respect to the
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failure to satisfy the Assumption Conditions, until the expiration of the
Assumption Conditions Extension, or (3) with respect to the VF Properties (as
hereinafter defined), until the VF Properties Extension (as hereinafter defined)
(in each case, to the extent applicable). Failure by Buyer to deliver an
Objection Notice, a Continuation Notice or a Termination Notice by the times
required under the terms of this Agreement shall be considered delivery of a
Continuation Notice. Buyer may only give a Termination Notice (X) in response to
a Seller's Election Notice, as specifically provided below, or (Y) if such
objection is not reasonably susceptible of cure or correction. In the event
Buyer delivers an Objection Notice, Sellers shall, by written notice to Buyer
within five (5) Business Days following delivery of the Objection Notice, elect
(other than with respect to those objections that Sellers shall be obligated to
remedy in accordance with this Agreement) to remedy all, some or none of Buyer's
objections described in the Objection Notice ("Seller's Election Notice"),
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provided, however, that if Sellers shall elect to remedy all or some of Buyer's
objections, Sellers shall, without Buyer's consent, be entitled to extend the
Closing Date for a period of up to thirty (30) days to remedy such objections,
which election shall be made by Sellers in Seller's Election Notice. Failure of
Sellers to deliver such Seller's Election Notice within such five (5) Business
Day period shall be deemed to be a delivery of a Seller's Election Notice
electing to remedy none of Buyer's objections. Seller's Election Notice shall
contain a detailed summary of how Sellers intend to remedy each of Buyer's
objections, or, if Sellers intend to remedy any of Buyer's objections by
reducing the Purchase Price, the amount of such Purchase Price reduction.
Within five (5) Business Days following delivery (or deemed delivery) of
Seller's Election Notice, Buyer shall deliver to Sellers either an acceptance of
Seller's Election Notice or a Termination Notice. Buyer shall be permitted to
deliver a Termination Notice in such event only if Sellers shall elect (i) not
to remedy all of Buyer's objections, or (ii) to remedy all of Buyer's objections
but Buyer, in the exercise of its reasonable judgment, is not satisfied with the
proposed remedy. Failure of Buyer to deliver an acceptance of Seller's Election
Notice or a Termination Notice within such five (5) Business Day period shall be
deemed to be a delivery of an acceptance of Seller's Election Notice. In the
event that Buyer accepts Seller's Election Notice, Buyer and Sellers shall
proceed to close and Sellers shall address all Permitted Objections in the
manner described in Seller's Election Notice. In the event Buyer accepts
Seller's Election Notice and Sellers do not remedy all of Buyer's Permitted
Objections in the manner set forth in Seller's Election Notice by the Closing
Date, Buyer may deliver a Termination Notice to Sellers at that time. Upon
delivery of any Termination Notice hereunder, the Deposit shall be promptly
returned to Buyer and thereafter neither party shall incur any further liability
hereunder, provided, however, that Buyer and Sellers agree that they
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shall continue to be bound by those provisions of this Agreement which expressly
provide that they shall survive any termination of this Agreement. Buyer and
Sellers acknowledge and agree that Buyer shall have the right, from time to
time, to deliver supplemental Objection Notices with respect to Permitted
Objections so long as such supplemental Objection Notices are delivered within
the time periods applicable to the delivery of an Objection Notice.
If Sellers shall not deliver to Buyer all of the Commitments and or Buyer
has failed to obtain all of the Surveys at least ten (10) days prior to the
expiration of the Review Period after the exercise of good faith efforts to do
so, either Buyer or Sellers may elect, by delivery of written notice to the
other party prior to the expiration of the Review Period, to provide for an
additional period of thirty (30) days for the purpose of permitting additional
time to obtain and review the Commitments and Surveys (the "Title and Survey
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Extension"); provided, however, that so long as Commitments and Surveys for at
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least 70% of the Properties are delivered during the Review Period, the Title
and Survey Extension shall expire on the earlier of (i) the date ten (10) days
following the date of delivery to Buyer of the last of the Commitments and
Surveys which remain outstanding as of the expiration of the Review Period, or
(ii) thirty (30) days following the expiration of the Review Period. If the
Commitments and Surveys shall not be delivered to Buyer prior to the expiration
of the Title and Survey Extension, or Buyer shall have identified Unacceptable
Title objections to the Commitments or Surveys, Buyer shall have the right to
deliver an appropriate Objection Notice or Termination Notice as provided above,
on account of Unacceptable Title, and Sellers' shall be permitted to respond as
provided herein; provided, however, that Buyer shall not have the right to a
Title and Survey Extension, nor shall Buyer have the right to terminate this
Agreement on account of failure of Buyer to obtain the applicable Survey, if the
Title Company agrees in a written notice to Buyer at least ten (10) days prior
to the expiration of the Review Period to delete all general survey exceptions
in reliance on the applicable Sellers' Survey together with an affidavit or
other assurances provided by Sellers without any additional premium charge to
Buyer, and Sellers agree to provide such assurances.
If Buyer and Sellers are not able to satisfy the Assumption Conditions
prior to the expiration of the Review Period after the exercise of good faith
efforts to do so, either Buyer or Sellers may elect, by delivery of written
notice to the other party prior to the expiration of the Review Period, to
provide for an additional period of forty-five (45) days for the purpose of
permitting additional time to satisfy the Assumption Conditions (the "Assumption
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Conditions Extension"). If the Assumption Conditions shall not be satisfied
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prior to the expiration of the Assumption Conditions Extension after the
exercise of good faith efforts to do so, and Sellers shall not have provided
written notice to Buyer prior to the expiration of the Assumption Conditions
Extension of Sellers' agreement at Sellers' sole cost and expense to prepay the
REMIC Loan and/or defease the CapMark Loan at Closing in accordance with the
applicable terms of the Mortgage Documents, this Agreement shall terminate, the
Deposit shall be promptly returned to the Buyer, and thereafter neither party
shall incur any further liability or obligations under this Agreement; provided,
however, that Buyer and Sellers agree that they shall continue to be bound by
those provisions of this Agreement which expressly provide that they shall
survive any termination of this Agreement; and provided, further, the Assumption
Conditions Extension shall in any event be deemed to expire on the date on which
the Assumption Conditions are satisfied.
10
For purposes of this Section 4, "Permitted Objections" shall be limited to:
--------------------
(A) The discovery of any physical or environmental condition relating to
any of the Properties, or in the Improvements, other than ordinary wear and tear
or normally recurring maintenance or replacement, which represent costs of
repair or replacement, in the aggregate, which Buyer reasonably determines
through the receipt of bona fide third party estimates to be more than
$4,000,000; provided, however, that if such costs are reasonably determined to
be more than $2,000,000, but less than $4,000,000, then Buyer and Sellers agree
that Buyer shall waive such objection, but shall receive a credit at Closing
equal to one-half the amount by which such costs exceed $2,000,000, up to a
maximum credit of $1,000,000.
(B) The discovery of an error or misstatement in the Operating Statements
which renders such statements materially false or misleading.
(C) The failure to satisfy the Assumption Conditions after the exercise of
good faith efforts.
(D) Commercially reasonable objections to any defects or exceptions
reflected in the Commitments or shown on the Surveys, or other matters of which
Buyer has received written notice, or the failure of Buyer to obtain any
required Commitment or Survey prior to the expiration of the Title and Survey
Extension or, with respect to Commitments and Surveys relating to the VF
Properties, the VF Properties Extension, to the extent applicable ("Unacceptable
------------
Title"); provided, however, that Unacceptable Title shall not include any
-----
matters or exceptions which Sellers agree to satisfy and which the Title Company
agrees to delete or provide affirmative coverage in a manner reasonably
acceptable to Buyer at Closing without additional premium to Buyer.
(E) Commercially reasonable objections to the agreements, commitments and
obligations with respect to Welcome KPT LLC, provided that (1) such matters
materially and adversely affect the value of the Property located in Cary, NC to
which such obligations relate, (2) Buyer provides Sellers with an Objection
Notice identifying its objections, if any, within three (3) Business Days
following the Effective Date, and (3) Sellers are not able to terminate the
obligations to which Buyer objects or modify such obligations in a manner
reasonably acceptable to Buyer.
(F) The disclosure of any information constituting exceptions to
representations and warranties set forth in Section 8 of this Agreement which is
---------
to be included in an exhibit to this Agreement not completed and made a part of
this Agreement as of the Effective Date and which (1) in Buyer's commercially
reasonable judgment, materially and adversely affects the value of the
Properties, and (2) would not be customary and reasonably anticipated by a
sophisticated purchaser of shopping centers, and (3) was not known to or
anticipated by Buyer prior to the Effective Date, or disclosed in offering
materials provided by Credit Suisse First Boston with respect to the Properties;
provided, however, that written notice of any objections of Buyer with respect
to disclosure of information constituting exceptions to representations and
warranties must be provided within five (5) Business Days following receipt of
the relevant exhibit, and failure to provide such notice shall be deemed a
waiver of any such objection.
11
(G) The discovery of any other information, documentation, item or
condition (or series or combination thereof) which represents an agreement,
commitment or obligation with respect to the Existing Leases, the Ground Leases,
the Existing Contracts, or the REAs and which (1) is extraordinary in nature and
would not be customary and reasonably anticipated by a sophisticated purchaser
of shopping centers, (2) was not known to or anticipated by Buyer prior to the
Effective Date, or disclosed in offering materials provided by Credit Suisse
First Boston with respect to the Properties, and (3) is reasonably likely to
result in a decrease in the value of the affected Properties by more than
$3,000,000 in the aggregate.
All of the agreements, documents, instruments, reports, studies,
correspondence and other information delivered or made available to Buyer during
the Review Period is collectively referred to as the "Due Diligence Materials".
-----------------------
Except as expressly provided in Section 8, below, Sellers make no
---------
representations or warranties, express or implied, regarding the adequacy,
accuracy, truth, completeness, or content of any document, instrument,
agreement, report, study, correspondence, or other information, written or oral,
concerning the Properties delivered or made available to Buyer by Sellers or any
person acting on Sellers' behalf.
5. Conditions to Closing. (a) In addition to any express conditions of
---------------------
Closing located elsewhere in this Agreement, the following are conditions
precedent to the obligations of Buyer to consummate the transactions hereunder,
each of which shall be satisfied or waived prior to Closing:
(i) Sellers and Buyer shall have satisfied the
Assumption Conditions (with the exception of clauses (E) and (F) of Section
-------
4(h)), and all consents and approvals relating to the Assumable Debt shall have
-----
been obtained (except for Assumption Conditions relating to any loan which Buyer
is not required to assume pursuant to the provisions of this Agreement).
(ii) All of Sellers' representations and warranties
contained in or made pursuant to this Agreement shall have been true and correct
when made, and shall be true and correct in all material respects as of the
Closing Date. For purposes of determining pursuant to this Section 5(a)(ii)
----------------
whether representations and warranties are true and correct at Closing,
references in such representations and warranties to the knowledge of the
Sellers or best knowledge or similar words shall not be given any effect so that
such representations and warranties shall be deemed to have been absolutely and
without reference to knowledge of the Sellers or best knowledge or similar
words.
(iii) Sellers shall have performed their obligations
hereunder in all material respects and shall have tendered all deliveries to be
made by them on or before the Closing Date or as otherwise required under this
Agreement.
(iv) There shall be no litigation, action, suit or
other proceeding, judicial or administrative, by any person or any governmental
authority, initiated against Sellers or arising in connection with any Property
which would seek to restrain or prevent the consummation of the transaction
contemplated hereby or would materially interfere with Sellers' ability to
perform their obligations hereunder or Buyer's use or ownership of any Property.
12
(v) Sellers shall not have caused or permitted any
monetary liens or encumbrances to attach to any Property other than the
Permitted Exceptions (which include the Assumable Debt), those liens which
Sellers have agreed to satisfy at Closing, and those liens for which Sellers
have agreed to provide the necessary assurances to the Title Company so that the
Title Company has agreed to delete such liens as exceptions or provide
affirmative coverage in a manner reasonable acceptable to Buyer without
additional premium to Buyer.
(vi) Sellers shall have authorized the Title Company
to apply the Cash Portion of the Purchase Price to satisfy the construction loan
made by Capital Advisors, Inc. encumbering the Carolina Outlet Center Property
(the "Carolina Outlet Loan"), and shall satisfy or make appropriate provision
--------------------
for the payment of all other liens and monetary claims encumbering any of the
Properties (with the exception of the Assumable Debt); provided, however, that
Sellers shall not be obligated to satisfy or provide for any non-mortgage liens
or claims in an amount exceeding $1,000,000 with respect to any individual
Property or exceeding $2,000,000 in the aggregate.
(vii) The Title Company shall have irrevocably agreed
to issue the Title Policy for each Property subject only to the Permitted
Exceptions.
(viii) Sellers shall have obtained and delivered to
Buyer the Required Tenant Estoppels (as hereinafter defined), Ground Lease
Estoppels or Declarant Estoppels satisfactory to Buyer in its commercially
reasonable discretion. As used herein, "Required Tenant Estoppels" shall mean
-------------------------
Tenant Estoppels from (1) Vanity Fair, Xxxxx Xxxxxxxx/Nine West/Easy Spirit, PVH
Corp., Shopro, Spiegel, Food Lion, Xxxx'x, Xxxx Xxxxx and Mikasa, to the extent
the applicable leases remain in full force and effect, (2) as to each of the
three (3) community shopping center CapMark Properties located in Kill Devil
Hills, NC, Cary, NC, or Raleigh, NC, tenants representing seventy percent (70%)
of the rentable area of each Property and seventy percent (70%) of the base rent
payable for such Property (inclusive of the applicable Tenant Estoppels
described in clause (1)), and (3) as to the remaining Properties, tenants
representing seventy percent (70%) of the occupied rentable area of all such
Properties in the aggregate, and seventy percent (70%) of the base rental
payable for all such Properties (inclusive of the applicable Tenant Estoppels
described in clause (1)).
(ix) Sellers shall have obtained any necessary
consent to (i) the assignment of any Ground Lease to Buyer at Closing, or (ii)
the assignment of any REA to Buyer at Closing.
(b) In addition to any express conditions of Closing
located elsewhere in this Agreement, the following are conditions precedent to
the obligations of Sellers to consummate the transactions hereunder, each of
which shall be satisfied or waived prior to Closing:
(i) Sellers and Buyer shall have satisfied the
Assumption Conditions (with the exception of clauses (E) and (F) of Section
-------
4(h)), and all consents and approvals relating to the Assumable Debt shall have
----
been obtained (except for Assumption
13
Conditions relating to any loan which Buyer is not required to assume pursuant
to the provisions of this Agreement).
(ii) All of Buyer's representations and warranties
contained in or made pursuant to this Agreement shall have been true and correct
when made, and shall be true, correct and complete in all material respects as
of the Closing Date. For purposes of determining pursuant to this Section
5(b)(i) whether representations and warranties are true and correct at Closing,
references in such representations and warranties to the knowledge of the Buyer
or best knowledge or similar words shall not be given any effect so that such
representations and warranties shall be deemed to have been absolutely and
without reference to knowledge of the Buyer or best knowledge or similar words.
(iii) Buyer shall have performed its obligations
hereunder in all material respects and shall have tendered all deliveries to be
made by it on or before the Closing Date or as otherwise required under this
Agreement.
(iv) There shall be no litigation, action, suit or
other proceeding, judicial or administrative, by any person or any governmental
authority, initiated against Sellers or arising in connection with any Property
which would seek to restrain or prevent, or obtain substantial damages in
respect of, the consummation of the transaction contemplated hereby or would
materially interfere with Sellers' ability to perform their obligations
hereunder.
(v) Sellers shall have obtained any necessary
consent to (i) the assignment of any Ground Lease to Buyer at Closing, or (ii)
the assignment of any REA to Buyer at Closing.
So long as a party is not in default hereunder, if any
condition to such party's obligations described in this Section 5 has not been
---------
satisfied as of the Closing Date, such party may, in its sole discretion, (A)
terminate this Agreement by delivering written notice to the other party on or
before the Closing Date, in which event the Deposit shall be promptly returned
to Buyer and thereafter neither party shall incur any further liability
hereunder, provided, however, that Buyer and Sellers agree that they shall
continue to be bound by those provisions of this Agreement which expressly
provide that they shall survive any termination of this Agreement, or (B) elect
to consummate the transactions notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have waived any such
condition. Notwithstanding the foregoing, the failure of a condition due to a
party's breach of or default under any provision of this Agreement shall not
relieve such breaching party from any liability it would otherwise have
hereunder, and in the event of the failure of a condition due to the default of
a party, the non-defaulting party shall have the right, in lieu of the options
provided in this Section 5, to enforce its rights and pursue available remedies
---------
under Section 11, below, without waiving such condition.
----------
6. Closing and Escrow.
------------------
(a) Upon execution of this Agreement, the parties shall
deposit an executed counterpart of this Agreement with the Title Company and
this instrument shall serve
14
as the instructions to the Title Company as the escrow holder for consummation
of the purchase and sale contemplated hereby. Sellers and Buyer agree to execute
such additional and supplementary escrow instructions as may be appropriate to
enable the escrow holder to comply with the terms of this Agreement; provided,
however, that in the event of any conflict between the provisions of this
Agreement and any supplementary escrow instructions, the terms of this Agreement
shall control.
(b) The closing ("Closing") hereunder shall be held and
-------
delivery of all items to be made at the Closing under the terms of this
Agreement shall be made at the office of Title Company, either in person, or, at
the election of Buyer, through an escrow and pursuant to escrow instructions
consistent with the terms of this Agreement and otherwise mutually satisfactory
to Sellers and Buyer, within fifteen (15) days following the later of (i) the
expiration of the Review Period, (ii) the expiration of the Title and Survey
Extension (if applicable), (iii) the expiration of the Assumption Conditions
Extension (if applicable), and (iv) the expiration of the VF Properties
Extension (if applicable) on a date selected by Buyer following not less than
five (5) days' notice to Sellers, but in no event later than Wednesday, October
31, 2001 (the "Closing Date").
------------
(c) On or prior to 1:00 p.m. EDST on the Closing Date,
Buyer shall deliver the following into escrow with the Title Company:
(i) The Cash Portion of the Purchase Price, reduced
by the amount of the Deposit, subject to the credits, adjustments and prorations
described in this Agreement, in the form of a wire transfer to an account
designated by the Title Company of good federal funds.
(ii) Counterparts of the Assignment and Assumption of
Ground Lease as to each the Ground Lease Properties, in the form attached hereto
as Exhibit K, duly executed by Buyer.
---------
(iii) Counterparts of the Xxxx of Sale as to each of
the Properties, in the form attached hereto as Exhibit L, duly executed by
---------
Buyer.
(iv) Counterparts of the Assignment and Assumption of
Leases as to the Existing Leases at each of the Properties except the REMIC
Outlot Properties, in the form attached hereto as Exhibit M, duly executed by
---------
Buyer.
(v) Counterparts of the Assignment and Assumption of
Service Contracts, Warranties and Guaranties and Other Intangible Property as to
each of the Properties except the REMIC Outlot Properties, in the form attached
hereto as Exhibit N, duly executed by Buyer.
---------
(vi) Counterparts of the Assignment and Assumption of
Reciprocal Easement Agreement as to the REAs at the applicable Properties, in
the form attached hereto as Exhibit BB, duly executed by Buyer.
----------
15
(vii) Counterparts of the Assumption Agreement as to
the REMIC Loan and CapMark Loan, duly executed by Buyer (unless Sellers agree at
Sellers' sole cost and expense to prepay the REMIC Loan or defease the CapMark
Loan in accordance with the applicable terms of the Mortgage Documents).
(viii) Counterpart of the Las Vegas Option Agreement
(as hereinafter defined), duly executed and acknowledged by Buyer, unless the
consent of the holder of REMIC Loan is not obtained in accordance with the
provisions of Section 4(h).
------------
(ix) A Certificate of Warranties and Representations
in the form attached hereto as Exhibit O, duly executed by Buyer.
---------
(x) An assignment and assumption agreement relating
to the obligations of KPT Mortgage LLC and KPT with respect to the formation and
operation of "Welcome KPT LLC", in the form attached hereto as Exhibit P (the
---------
"Welcome Assumption"), duly executed by Buyer, if applicable.
------------------
(xi) Such resolutions, authorizations, bylaws, good
standing certificates, certificates of authorization to do business or other
corporate, company and/or partnership documents or agreements relating to Buyer
as shall be reasonably required in connection with this transaction.
(xii) A statement itemizing funds to be collected and
disbursed at Closing (the "Closing Statement"), duly executed by Buyer.
-----------------
(xiii) Any other documents, instruments, records,
correspondence or agreements called for hereunder or reasonably requested by
Sellers or the Title Company which have not previously been delivered.
(d) On or prior to the Closing Date, Sellers shall deliver
the following into escrow with the Title Company:
(i) A special warranty deed as to each of the
Properties other than the Ground Lease Properties, in the form that is customary
in the state where the applicable Property is located and reasonably acceptable
to Buyer and the Title Company, duly executed and acknowledged by the applicable
Seller, conveying to Buyer, or Buyer's designee, fee simple title to the
Properties other than the Ground Lease Properties, subject only to the
applicable Permitted Exceptions (collectively, the "Deeds").
-----
(ii) An Assignment and Assumption of Ground Lease as
to each of the Ground Lease Properties with covenants of special warranty, in
the form attached hereto as Exhibit K, duly executed and acknowledged by the
---------
applicable Seller and duly consented to by any necessary third party, as
applicable (collectively, the "Ground Lease Assignments").
------------------------
16
(iii) A Xxxx of Sale as to each of the Properties
except the REMIC Outlot Properties, in the form attached hereto as Exhibit L,
---------
duly executed by the applicable Seller.
(iv) An Assignment and Assumption of Leases as to
each of the Properties except the REMIC Outlot Properties, in the form attached
hereto as Exhibit M, duly executed by the applicable Seller.
---------
(v) An Assignment and Assumption of Service
Contracts, Warranties and Guaranties and Other Intangible Property as to each of
the Properties except the REMIC Outlot Properties, in the form attached hereto
as Exhibit N duly executed by the applicable Seller.
---------
(vi) An Assignment and Assumption of Reciprocal
Easement Agreement as to the REAs at the applicable Properties, in the form
attached hereto as Exhibit BB, duly executed by the applicable Seller, and duly
----------
consented to by any necessary third party, as applicable.
(vii) A Notice to Tenants for each tenant of the
Properties, each in the form attached hereto as Exhibit Q, duly executed by the
---------
applicable Seller.
(viii) A notice to all ground lessors under the Ground
Leases, parties to the REAs, and vendors under the Existing Contracts of the
Properties, as applicable, informing such parties of the transfer, each in a
form reasonably acceptable to Buyer and duly executed by the applicable Seller.
(ix) An Assumption Agreement as to the REMIC Loan
and CapMark Loan, each duly executed by the applicable Seller and the holders of
the applicable loan (unless Sellers agree at Sellers' sole cost and expense to
prepay the REMIC Loan or defease the CapMark Loan in accordance with the
applicable terms of the Mortgage Documents).
(x) A counterpart of the Welcome Assumption
Agreement, duly executed by KPT and KPT Mortgage, if applicable.
(xi) A special warranty deed as to the Community
Center Properties, each in the form that is customary in the state where the
applicable Property is located and reasonably acceptable to the Title Company,
duly executed and acknowledged by REMIC, conveying to KPT or its assignee fee
simple title to the Community Center Properties (collectively, the "Community
---------
Center Deeds"), together with bills of sale, assignments of leases, assignments
------------
of service contracts, warranties and guarantees, and other intangibles, and such
other documents as may be reasonably requested to evidence the transfer of the
Community Center Properties to KPT, all executed and acknowledged, as required,
by REMIC.
(xii) The Las Vegas Option Agreement, duly executed
and acknowledged by KPT, unless the consent of the holder of REMIC Loan is not
obtained in accordance with the provisions of Section 4(h).
------------
17
(xiii) A Certificate of Warranties and Representations
in the form attached hereto as Exhibit R, duly executed by each Seller.
---------
(xiv) A Termination of Management and Leasing
Agreements which shall terminate each outstanding management and leasing
agreements with Sellers or any of their affiliates at any Property, duly
executed by Sellers and such manager.
(xv) An affidavit from each Seller that such Seller
is not a "foreign person" within the meaning of Section 1445(e)(3) of the
--------------
Internal Revenue Code of 1986, as amended (the "Code"), in the form attached
----
hereto as Exhibit S.
---------
(xvi) Such resolutions, authorizations, bylaws, good
standing certificates, certificates of authorization to do business or other
corporate and/or partnership documents or agreements relating to each Seller as
shall be reasonably required in connection with this transaction.
(xvii) A duly executed affidavit or certificate, in
favor of the Title Company, sufficient to remove the exceptions from the Title
Policy for mechanic's lien and parties in possession (with the exception of
identified tenants) for each of the Properties, and a "gap" indemnity to the
Title Company.
(xviii) Any other documents, instruments, records,
correspondence or agreements called for hereunder or reasonably requested by the
Title Company or Buyer which have not previously been delivered.
(xix) All applicable transfer tax forms, if any, with
respect to each Property, duly executed by the applicable Seller, as
appropriate.
(xx) An assignment to Buyer of any security deposits
of any tenants under the Existing Leases which are held in the form of letters
of credit, duly executed by the applicable Seller. Such assignment shall be in a
form approved by the bank issuing such letter of credit, which approval shall be
obtained by Sellers. Buyer shall pay all costs and expenses of assigning such
letters of credit. If any letter of credit shall not, pursuant to its terms, be
assignable, Sellers shall grant to Buyer an irrevocable power of attorney to
exercise Sellers' rights under such letter of credit.
(xxi) The Closing Statement, duly executed by
Sellers.
(e) Upon receipt of all the funds and documents described
in Sections 6(c) and 6(d), above, and provided the Title Company has irrevocably
------------- ----
agreed to issue the Title Policy, the parties shall instruct the Title Company
to (i) deliver the funds on account of the Purchase Price to Sellers and
otherwise disburse funds in accordance with the Closing Statement, (ii) record
the Deeds, the Ground Lease Assignments and the Community Center Deeds and such
other documents as may be appropriate as directed by Buyer and Sellers, and
(iii) deliver the remaining documents from escrow to the party entitled to
receive the same.
18
(f) Real estate taxes and assessments and all rents, common
area maintenance charges, and other items of income and expense relating to the
operation of the Properties shall be adjusted and prorated as of 12:01 a.m. on
the Closing Date, based on a 365-day year as follows:
(i) Base rents under the Existing Leases shall be
prorated as of the Closing Date, and Sellers shall receive credit for all rent
collected as of that date. Sellers shall provide a credit in an amount equal to
all prepaid rentals under the Existing Leases for periods after the Closing
Date. Rents which are delinquent as of the Closing Date shall not be prorated on
the Closing Date. Rent received by Buyer or Sellers after Closing shall be first
applied to all unpaid rent accruing after the Closing Date, then to the month in
which the Closing occurs, and then to periods prior to the Closing Date, with
Buyer's share thereof being held by Sellers for Buyer and promptly delivered to
Buyer by Sellers in accordance with the provisions of Section 6(i). To the
------------
extent possible, percentage rents collected prior to the Closing shall be
prorated at Closing as if received ratably throughout the year. Percentage rents
paid or payable at a later date shall be adjusted in accordance with Section
-------
6(g), below.
----
(ii) Additional rent collected from tenants under
the Existing Leases to cover taxes, insurance, utilities, maintenance, marketing
and other operating costs and expenses (commonly known as "common area
-----------
maintenance charges") shall be prorated as of the Closing Date, along with the
-------------------
expenses for which such charges are collected.
(iii) All rental payments and other charges under the
Ground Leases shall be prorated as of the Closing Date.
(iv) All fees and charges under the Restrictive
Covenants shall be prorated as of the Closing Date.
(v) All real estate taxes, water charges, sewer
rents, vault charges and assessments on the Property on the basis of the fiscal
year for which assessed. Sellers shall be responsible for all installments for
assessments and bonds which constitute a lien against each Property and are due
and payable as of the Closing Date.
(vi) The charges under the Existing Contracts shall
be prorated as of the Closing Date.
(vii) All cash security deposits relating to the
Properties delivered to and retained by Sellers and not otherwise applied in
accordance with the provisions of the applicable Lease shall be credited to
Buyer at Closing.
(viii) All assumable utility deposits relating to the
Properties shall be transferred and assigned to Buyer, and credited to Sellers,
at Closing.
(ix) The parties shall adjust the Purchase Price for
such other items as are customarily apportioned between sellers and purchasers
of real properties of a type similar to the Properties and located in the states
where such Property is located.
19
The provisions of this Section 6(f) shall survive the Closing.
(g) In the event that the Existing Leases require the
reconciliation of additional rent "pass-throughs" to the landlord for common
area maintenance charges, real estate taxes or other operating expenses, or for
the payment of percentage rents, Buyer shall perform all of the obligations of
the landlord under the Existing Leases with respect to such reconciliations for
the year of Closing as and when required by the terms of the Existing Leases and
provide Sellers with the results of such reconciliations no later than June 30,
2002. Sellers agree to deliver or make available to Buyer such information
regarding the reconciliations and the underlying charges as may be in Sellers'
possession or control. If such results reflect the underpayment of additional
rent by tenants of the Properties for the year of Closing, Buyer shall xxxx the
appropriate amounts to such tenants in accordance with the terms of their leases
and remit to Sellers their pro rata share of the amount collected from the
tenants within thirty (30) days of Buyer's collection of the same. If such
results reflect the overpayment of additional rent by tenants of the Properties
for the year of Closing, Buyer shall deliver to Sellers an invoice from Buyer.
Sellers shall pay to Buyer Sellers' pro rata share of the amounts due to such
tenants within thirty (30) days of Buyer's demand, and Buyer shall pay to
Sellers within thirty (30) days following receipt Sellers' pro rata share of the
amounts collected from tenants which are due to Sellers (based on the amount of
expenses actually incurred by Sellers' and Buyer, respectively, which are
reimbursable through common area charges). The provisions of this Section 6(g)
shall survive the Closing.
(h) If any of the items described in Section 6(f) or 6(g)
hereof cannot be apportioned at the Closing because of the unavailability of
information as to the amounts which are to be apportioned or otherwise, or are
incorrectly apportioned at Closing or subsequent thereto, such items shall be
apportioned or reapportioned, as the case may be, as soon as practicable after
the Closing Date or the date such error is discovered, as applicable; provided
that, neither party shall have the right to request apportionment or
reapportionment of any such item at any time following one year after the
Closing Date. If the Closing shall occur before a real estate or personal
property tax rate or assessment is fixed for the tax year in which the Closing
occurs, the apportionment of taxes at the Closing shall be upon the basis of the
tax rate or assessment for the preceding fiscal year applied to the latest
assessed valuation. Promptly after the new tax rate or assessment is fixed, the
apportionment of taxes or assessments shall be recomputed and any discrepancy
resulting from such recomputation and any errors or omissions in computing
apportionments at Closing shall be promptly corrected and the proper party
reimbursed, which obligations shall survive the Closing. The provisions of this
Section 6(h) shall survive the Closing.
(i) No prorations shall be made for amounts which are
delinquent as of the Closing Date or unbilled common area charges and other
amounts under the Existing Leases. Buyer shall use reasonable efforts to collect
or attempt to collect such amounts for the benefit of Sellers but shall not be
required to (i) spend more than nominal amounts or (ii) to declare a tenant in
default under its Existing Lease to collect such rent. Buyer agrees, for a
period of six (6) months after the Closing Date, to include in its billing to
tenants invoices for these delinquent or unbilled amounts to the extent provided
by Sellers in writing to Buyer, and agrees to refer tenants having questions as
to their invoices to a designated contact person of the
20
applicable Seller. Buyer shall not have the right to forgive such amounts. Buyer
shall be paid a collection fee of 25% of the amounts collected which are
delinquent as of the Closing Date or unbilled amounts relating to periods
preceding January 1, 2001, which fee shall be deducted by Buyer from the amounts
collected. Subject to the terms of Section 6(f), Buyer shall remit all such
------------
amounts received, less its fee, if applicable, to Sellers promptly following
receipt. Sellers shall have no right to attempt to collect such amounts or to
bring any action on account thereof, except that Sellers may (i) file and
prosecute an action against any person who is no longer a tenant of any
Property, and (ii) bring a claim or counterclaim relating to pre-closing events
against a tenant that files a legal action against a Seller.
(j) Buyer shall pay the premium for the Title Policy, the
cost of the Commitments, and all Survey costs.
(k) The cost of any transfer and recordation taxes
(including documentary stamps) applicable to the Deeds and the Ground Lease
Assignments shall be paid by Buyer. Sellers shall pay any and all transfer and
recording taxes and recording fees applicable to the Community Center Deeds.
Sellers shall pay any fees or expenses required under the Ground Leases to
effectuate an assignment of the Ground Leases.
(l) The Title Company's fees for escrow services shall be
divided equally between Buyer and Sellers.
(m) Sellers shall pay any and all assumption fees, mortgage
assumption taxes, rating agency fees, lender attorneys' fees, local counsel fees
and other costs assessed by the holders of, or in connection with the assignment
and assumption of, the REMIC Loan, and any and all prepayment fees, attorneys'
fees and other costs assessed in connection with the release of the Community
Center Properties from the lien of the REMIC Loan. Buyer shall pay any and all
assumption fees, mortgage assumption taxes, rating agency fees, lender
attorneys' fees, local counsel fees and other costs assessed by the holders of,
or in connection with the assignment and assumption of the CapMark Loan. Sellers
shall be responsible for all costs incurred in connection the satisfaction of
the "Carolina Outlet Loan" at Closing. Buyer shall pay its own costs and
attorneys' fees in connection with the assumption or prepayment of the Assumable
Debt, including the costs of negotiating any Assumption Agreements and of
providing such legal opinions as the holder of the debt obligations may
reasonably request with regard to formation and existence, non-consolidation,
and non-disqualification; provided, however, that should any local counsel
opinions be required of counsel to Buyer by the holder of the REMIC Loan,
Sellers agree to pay reasonable attorneys' fees on account of each such opinion.
Sellers shall pay its own costs and attorneys' fees in connection with the
assumption or prepayment of the Assumable Debt or the Carolina Outlet Loan,
including the costs of negotiating any Assumption Agreements. Interest due on
account of the Assumable Debt (to the extent to be assumed hereunder) shall be
prorated at Closing. Provided that the REMIC Loan is to be assumed by Buyer at
Closing, at Closing, Buyer shall receive a credit in an amount equal to the
difference between (A) the interest payable on account of the REMIC Loan for the
period commencing with the Closing Date and ending on December 2, 2001 and (B)
the interest that would have been payable on account of the REMIC Loan for the
period commencing with the Closing Date and ending on December 2, 2001, if the
applicable interest rate had been 1.05% per
21
annum above the 30-day London Interbank Borrowing Rate quoted by The Wall Street
Journal on the Closing Date, and Sellers shall receive a credit in the amount of
any escrows, holdbacks, cash collateral or undisbursed funds held by the
applicable lender or servicer in connection with the Assumable Debt (to the
extent to be assumed by Buyer).
(n) Possession of the Properties and original or certified
copies of all Ground Leases, Existing Leases and Existing Contracts, and
originals or copies of Permits (if available) shall be delivered to Buyer at
Closing. Originals or copies of any other documents, instruments, records,
correspondence or agreements called for hereunder or reasonably requested by
Buyer which have not previously been delivered will also be delivered or made
available to Buyer following the Closing.
7. Covenants of the Parties.
------------------------
(a) During the term of this Agreement, no new leases or
amendments, expansions, terminations or renewals of Existing Leases (except as
expressly required by the terms of the Existing Lease) shall be entered into
without the prior written consent of Buyer, which consent may be granted or
withheld in Buyer's reasonable discretion. Should Buyer fail to respond to any
written request for consent within ten (10) days following receipt of such
request, Buyer shall be deemed to have granted its consent hereunder. Buyer
shall assume and be responsible for all leasing commissions, tenant improvement
allowances or reimbursement amounts, and other related leasing costs for any
permitted new lease or amendment, expansion or renewal of Existing Leases
entered into following the Effective Date. Any permitted new lease or amendment,
expansion or renewal of Existing Leases shall be included in the term "Existing
Leases" under this Agreement from and after the effective date of such document.
(b) During the term of this Agreement, no new management,
service or supply contracts, billboard leases or licenses, equipment rental
agreements, and other contracts related to the ownership or operation of the
Properties (collectively, "Contracts") or amendments, expansions, terminations
---------
or renewals of Existing Contracts shall be entered into without the prior
written consent of Buyer, which consent may be granted or withheld in Buyer's
reasonable discretion; provided, however that Sellers may enter into new
contracts that are terminable at Closing without any termination fee or penalty.
The provisions of this Section 7(b) shall not apply to the documents and
------------
instruments referred to in the Welcome Assumption which have been provided to
Buyer prior to the Effective Date, and any amendments, supplements or
modifications to those documents which do not adversely affect Buyer or the
value of the Cary, NC Property in any material respect. Any permitted new
Contract or amendment, expansion or renewal of Existing Contracts shall be
included in the term "Existing Contracts" under this Agreement from and after
the effective date of such document.
(c) During the term of this Agreement, the Sellers shall
not enter into any amendments or modifications of the Mortgage Documents without
the prior written consent of Buyer, which consent may be granted or withheld in
Buyer's reasonable discretion, with the exception of the pending modification to
the substitution language applicable to the CapMark Loan, a copy of which has
been delivered to Buyer. Any permitted amendment or modification
22
of the Mortgage Documents shall be included in the term "Mortgage Documents"
under this Agreement from and after the effective date of such document.
(d) During the term of this Agreement, the Sellers shall
not enter into any new Restrictive Covenant or any amendments or modifications
of existing Restrictive Covenants without the prior written consent of Buyer,
which consent may be granted or withheld in Buyer's reasonable discretion, with
the exception of the easements, covenants and restrictions referred to in the
Welcome Assumption and provided to Buyer prior to the Effective Date, and any
amendments, supplements or modifications to those documents which do not
adversely affect Buyer or the value of the Cary, NC Property in any material
respect. Any permitted new Restrictive Covenant or amendment, expansion or
renewal of Restrictive Covenants shall be included in the term "Restrictive
Covenants" under this Agreement from and after the effective date of such
document.
(e) During the term of this Agreement, the Sellers shall
continue to manage, operate and maintain the Properties in the ordinary course
of business and in the manner such Properties were managed, operated and
maintained preceding the Effective Date.
(f) Following the expiration of the Review Period, Sellers
agree to deliver to contractors under any Existing Contracts such notices of
termination as Buyer may reasonably request; provided, however, that delivery of
such notice shall not relieve Buyer from the obligation to assume any and all
outstanding Existing Contracts as of the Closing Date. If Sellers shall be
unable to obtain as of the Closing Date any consents or approvals which may be
required to permit assignment and assumption of an Existing Contract, the
applicable Existing Contract shall not be assigned to, or assumed by, Buyer at
Closing.
(g) For a period of two (2) years after the Closing Date,
on Buyer's request and with reasonable notice, to the extent permitted under
applicable law and appropriate confidentiality restrictions, Sellers shall make
all books, records and other materials in Sellers' possession relating to the
Properties and reasonably requested by Buyer available to Buyer for inspection,
copying and audit by Buyer's independent certified public accountants, and shall
cooperate in obtaining any consents needed from Xxxxxx Xxxxxxxx to permit access
by Buyer to their work papers for federal securities law purposes, provided that
Buyer shall reimburse Sellers for its reasonable out-of-pocket costs and
expenses in connection therewith.
(h) Prior to Closing, Sellers shall satisfy or make
appropriate provision for the payment of all real estate taxes and assessments
then due and payable, all bills and claims for water and sewer service, and all
claims for payments due mechanics or materialmen.
(i) Prior to the expiration of the Review Period, Buyer
shall advise Sellers in writing of those property level employees of KPT who
Buyer intends to retain following the Closing, if any.
(j) Prior to Closing, Sellers shall promptly deliver to
Buyer copies of all material notices received by Sellers from, or delivered by
Sellers to, any tenants under Existing Leases, ground lessors under the Ground
Leases, parties under the Restrictive
23
Covenants, governmental authorities or other parties with respect to any
Property. Sellers shall provide Buyer with prompt notice if Sellers shall learn
of any facts or circumstances which shall make any of the representations or
warranties of Sellers contained herein inaccurate or incorrect in any material
respect.
(k) Sellers shall maintain their existing casualty
insurance policies on the Properties.
(l) Prior to Closing, KPT Mortgage shall complete the
alterations to the Improvements at the CapMark Property located in Raleigh, NC,
free and clear of all claims for payments due mechanics and materialmen, in a
good and workmanlike manner, in accordance with governmental regulations and the
terms of any applicable Existing Leases; provided, however, that if such work is
not completed prior to Closing, Sellers and Buyer shall enter into an agreement
in a form reasonably acceptable to Buyer and Sellers to withhold in escrow from
the proceeds due Sellers 125% of the amount reasonably agreed by Buyer and
Seller to be required to complete such work in accordance with this Section
-------
7(l), and to release to Sellers any funds remaining following completion. The
----
provisions of this Section 7(l) shall survive the Closing.
------------
8. Representations and Warranties of Seller. Sellers hereby jointly and
----------------------------------------
severally represent and warrant to Buyer as follows:
(a) KPT is a limited partnership duly organized and validly
existing under the laws of the State of Delaware and is authorized to do
business in the states where its Properties are located. Konover is a
corporation duly organized and validly existing under the laws of the State of
Maryland and is authorized to do business in the states where its Properties are
located. Each of the Sellers other than KPT and Konover is a limited liability
company duly organized and validly existing under the laws of the State of
Delaware and is authorized to do business in the states where its Properties are
located. Each Seller has the power and authority to (i) own and operate its
Properties, (ii) to enter into this Agreement and (iii) perform its obligations
and consummate the transactions contemplated under this Agreement without the
approval, consent or joinder of any other party or entity, other than consent
for the transfer of the Assumed Debt and the assignment of the Ground Leases.
(b) This Agreement and all documents executed and delivered
by Sellers are or at the time of Closing will be duly authorized, executed, and
delivered by the applicable Seller, and the legal, valid, and binding
obligations of such Seller. Such documents do not violate any provisions of or
cause a default under any material agreement, instrument or judicial order to
which any Seller is a party or by which any Seller or any Property is bound.
(c) None of the Sellers has commenced (within the meaning
of any Bankruptcy Law (as hereinafter defined)) a voluntary case, nor has there
been commenced against any Seller an involuntary case, nor has any Seller
consented to the appointment of a Custodian (as hereinafter defined) for it or
for all or any substantial part of its property, nor has a court of competent
jurisdiction entered an order or decree under any Bankruptcy Law that is for
relief against any Seller in an involuntary case or appointed a Custodian of any
Seller. For
24
purposes of this Section 8(c), "Bankruptcy Law" means Title 11, U.S. Code, or
------------ --------------
any similar federal or state law for the relief of debtors, and "Custodian"
---------
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
(d) The Mortgage Documents delivered to Buyer include true,
accurate and complete copies of all the material documents and instruments in
effect with respect to the Assumable Debt, including any and all amendments and
supplements thereto. Sellers are not in default in any material respect under
any of the Mortgage Documents, and Sellers have not received written notice that
Sellers are in default under any of the Mortgage Documents, which default
remains uncured.
(e) The Existing Leases delivered to Buyer include true,
accurate and complete copies of all the material documents and instruments in
effect with respect to the Existing Leases, including any and all amendments and
supplements thereto. The Rent Roll delivered to Buyer is true, correct and
complete in all material respects. Except as disclosed in the Rent Rolls
delivered to Buyer, no tenant is in default in the payment of its monthly rent
under the applicable Existing Lease. To Sellers' knowledge, no tenant is
otherwise in default in any material respect under any Existing Lease except as
set forth on Exhibit T-1. Sellers are not in default in any material respect
-----------
under any Existing Lease except as set forth on Exhibit T-2, and Sellers have
-----------
not received written notice that Sellers are in default under any of the
Existing Leases, which default remains uncured. Sellers are not obligated to
provide tenant improvements or to provide an allowance for reimbursement of
tenant improvements or other tenant inducement costs, or to pay leasing
commissions, on account of any tenant of the Properties, with the exception of
(i) those obligations described in Exhibit T-3, and (ii) obligations which are
-----------
not yet due and payable on account of the extension or renewal of lease terms
which have not yet been exercised. Except as set forth in the Rent Roll and the
Existing Leases and the rights of subtenants, there are no oral or written
leases, licenses or occupancy agreements with any person, and no person has any
right to occupy any of the Properties except pursuant to the Existing Leases. No
rent under any Existing Lease has been paid more than one month in advance and,
to the knowledge of Sellers, no tenant has any defense or offset to rent
accruing after the Closing Date. Sellers are the landlords under all of the
Existing Leases and have not assigned or otherwise hypothecated their interest
therein (other than in connection with the Assumable Debt and the Carolina
Outlet Loan).
(f) Except for commission obligations described in the
Existing Leases, Sellers have not entered into any lease brokerage agreements or
lease commission agreements for which commissions may be due and payable by
Buyer following the Closing Date.
(g) Except as disclosed in the Due Diligence Materials,
Sellers have no knowledge of any subleases or assignments of any Existing Leases
affecting any Property other than subleases or assignments which did not result
in a change of a trade name.
(h) The Existing Contracts delivered to Buyer include true,
accurate and complete copies of all the material documents and instruments in
effect with respect to the Existing Contracts. Sellers are not in default in any
material respect under any Existing
25
Contract, and no other party, to Seller's knowledge, is in default in any
material respect under any Existing Contract except as set forth on Exhibit U,
---------
and Sellers have not received written notice that Sellers are in default under
any Existing Contract, which default remains uncured. Other than the Existing
Contracts, there are no management, service, or supply contracts, billboard
leases or licenses, equipment rental agreements, and other contracts related to
the ownership or operation of the Properties which will be binding on Buyer
following the Closing Date.
(i) The Ground Leases delivered to Buyer include true,
accurate and complete copies of all material documents and instruments in effect
with respect to the Ground Leases, including any and all amendments and
supplements thereto. Sellers are not in default in any material respect under
any Ground Lease, and no other party, to Seller's knowledge, is in default under
any Ground Lease, and Sellers have not received written notice that Sellers are
in default under any Ground Lease, which default remains uncured.
(j) The Restrictive Covenants delivered or made available
to Buyer include true, accurate and complete copies of all material documents
and instruments in effect with respect to the Restrictive Covenants, including
any and all amendments and supplements thereto. To Sellers' knowledge, Sellers
are not in default in any material respect under any Restrictive Covenant, and
no other party, to Seller's knowledge, is in default in any material respect
under any Restrictive Covenants, and Sellers have not received written notice
that Sellers are in default under any Restrictive Covenants, which default
remains uncured.
(k) The Operating Statements are true, correct and complete
in all material respects and do not contain any untrue statement of a material
fact, or omit to state a material fact, necessary to make the information
contained therein not misleading, except that corporate costs that relate to
leasing and tenant coordinating activities provided by Konover and KPT in the
ordinary course of business, including costs of corporate attorneys, leasing
personnel, accountants and other administrative staff, outside attorneys,
accountants and consultants, and other overhead costs, may not be reflected in
such statements. The financial statements from which the Operating Statements
were prepared (and which the Operating Statements reflect) fairly present, in
all material respects, the results of the operations of the Properties in
conformity with accounting principles generally accepted in the United States.
(l) Except as set forth on Exhibit V attached hereto,
---------
Sellers have not sold, assigned or conveyed, or granted any rights or options to
any person (including, without limitation, tenants) to purchase all or any
portion of the Properties, the Improvements, the Personal Property, the
Intangible Personal Property, or the ownership interests in REMIC, KPT Mortgage
or KPT Smithfield.
(m) To Sellers' knowledge, the present use and operation of
the Properties as retail shopping centers are authorized by and in all material
respects in compliance with applicable zoning and land use requirements and
restrictions, or appropriate permits have been obtained so as to authorize any
non-compliance. To Sellers' knowledge, valid permanent certificates of occupancy
have been issued for the Improvements on each of the Properties. Except as set
forth on Exhibit CC attached hereto, Sellers have not received prior to the
----------
date of
26
this Agreement any written notification from any governmental authority that any
Property is in violation of any applicable fire, health, building, use,
occupancy or zoning laws, where such violation remains outstanding.
(n) All Personal Property owned by Sellers and used in
connection with the ownership, maintenance, use or operation of the Property,
including, without limitation, the items having a value in excess of $1,000 and
listed on Exhibit AA attached hereto, shall be assigned to Buyer at the Closing,
----------
free and clear of all liens, claims or encumbrances except the Permitted
Encumbrances.
(o) There are no litigations, actions, suits or other
proceedings, judicial or administrative, pending against Sellers or the
Properties and Sellers have not received written notice of any existing or
threatened, litigation, action, suit or other proceeding, judicial or
administrative, by any person or any governmental authority, against Sellers or
arising in connection with any Property which would interfere in any material
respect with Sellers' ability to comply with their obligations under this
Agreement. There are no strikes or other material labor disputes pending, or, to
Sellers' knowledge, threatened with respect to any Property. Sellers are not
party to or bound by any collective bargaining agreements. To Sellers'
knowledge, there are no organizing activities involving the employees of Sellers
pending threatened.
(p) Sellers have not received written notice from the
providing utility of any pending or threatened reduction or elimination of any
utility service to any of the Properties.
(q) Sellers have not received written notice from any
insurance company or board of fire underwriters of any cancellation of any
insurance policy or alleging any defects or conditions require repair,
restoration or replacement with respect to any of the Properties.
(r) Except as set forth in Exhibit W, there is no pending,
---------
or to Sellers' knowledge, threatened condemnation or eminent domain which would
affect any Property in any material respect, or any plans to widen, modify or
realign any street or highway abutting any Property which would materially and
adversely affect any Property.
(s) Sellers have delivered to Buyer true and correct copies
of all environmental reports, environmental site assessments and engineering
reports prepared by or on behalf of Sellers (and in Sellers possession) in
connection with the Properties as set forth on Exhibit G. Except as disclosed in
---------
the Reports provided or made available to Buyer during the Review Period,
Sellers have not received written notice from any governmental authority or
agency having jurisdiction over a Property and Sellers have no knowledge of any
violation of Environmental Laws related to a Property or the presence or release
of Hazardous Materials on or from any Property. The term "Environmental Laws"
------------------
means the Resource Conservation and Recovery Act and the Comprehensive
Environmental Response Compensation and Liability Act and other federal laws
governing the environment as in effect on the date of this Agreement together
with their implementing regulations and guidelines as of the Effective Date, and
all
00
xxxxx, xxxxxxxx, xxxxxx, xxxxxxxxx and other local laws, regulations and
ordinances that are equivalent or similar to the federal laws recited above or
that purport to regulate Hazardous Materials. The term "Hazardous Materials"
-------------------
includes petroleum, including crude oil or any fraction thereof, natural gas,
natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or
mixtures of natural gas or such synthetic gas), and any substance, material
waste, pollutant or contaminant listed or defined as hazardous or toxic under
any Environmental Law.
(t) Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Code.
(u) Buyer shall not be responsible for any obligations with
respect to any persons employed at the Properties, whether under the WARN Act or
otherwise, by virtue of Buyer's acquisition of the Properties.
(v) To Sellers' knowledge, except as set forth on Exhibit
-------
DD, no tenant under any Existing Lease is currently involved in a proceeding
--
under Bankruptcy Law.
For purposes of this Section 8, "Seller's knowledge" or
---------
words of similar import refer to the actual knowledge of Xxxxxx X. Xxxxx III,
Xxxxx X. Xxxxxxxx, Xxxxxxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxx, Xxxxx X.
Xxxxxxxxxx, Xxxxxxx Xxxxxxx and J. Xxxxxxx Xxxxxxx without imputation of the
knowledge of any other person; provided, however, that Sellers agree to inquire
of the property managers of each Property as to the representations and
warranties set forth in this Section 8, and make such additional inquiries as
---------
are in good faith required in response to Sellers' initial inquiries, and to
advise Buyer of any material inaccuracies in the representations and warranties
reported as a result of such inquiries. Sellers' represent and warrant that the
foregoing persons constitute all managerial personnel with principal
responsibilities relating to the operations of the Properties. If the
transactions contemplated hereby shall be consummated, as of the Closing Date ,
Sellers' warranties and representations shall be qualified by and deemed to be
modified to include exception for any information provided in the Due Diligence
Materials and any actual knowledge obtained by Buyer during the Review Period
(which may include any qualifications to the representations and warranties
provided in writing to Buyer prior to Closing). Should Buyer, prior to Closing,
discover information which indicates that any of Seller's representations or
warranties are untrue, incorrect or incomplete in any material respect prior to
the Closing (each, a "breach"), Buyer's shall provide written notice of such
------
information to Seller promptly, but in any event prior to Closing, and failure
to do so shall constitute a waiver of such breach.
AS A MATERIAL PART OF THE CONSIDERATION FOR THIS AGREEMENT, EXCEPT AS
SPECIFICALLY PROVIDED IN THIS AGREEMENT OR ANY DOCUMENT OR INSTRUMENT EXECUTED
IN CONNECTION HEREWITH, BUYER AGREES TO ACCEPT EACH PROPERTY ON AN "AS IS" AND
"WHERE IS" BASIS, WITH ALL FAULTS. EXCEPT FOR THOSE WARRANTIES AND
REPRESENTATIONS SPECIFICALLY MADE BY SELLERS IN THIS AGREEMENT OR ANY DOCUMENT
OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH, NO WARRANTY OR REPRESENTATION IS
MADE BY SELLERS WITH RESPECT TO ANY PROPERTY AS TO (I) FITNESS FOR ANY
PARTICULAR PURPOSE, (II) MERCHANTABILITY, (III)
28
CONDITION, (IV) ABSENCE OF DEFECTS OR FAULTS, (V) ABSENCE OF HAZARDOUS OR TOXIC
SUBSTANCES, (VI) FLOODING, OR (VII) COMPLIANCE WITH LAWS AND REGULATIONS,
INCLUDING, WITHOUT LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE
ENVIRONMENT, AS THEY MAY APPLY TO THE CURRENT CONDITION OF SUCH PROPERTY OR
BUYER'S INTENDED DEVELOPMENT, CONSTRUCTION OR USE, OR FOR ANY OTHER PURPOSE.
WITHOUT WAIVING ANY RIGHTS OF BUYER IN THE EVENT SELLERS SHALL HAVE COMMITTED
FRAUD, BUYER ACKNOWLEDGES THAT BUYER HAS ENTERED INTO THIS AGREEMENT WITH THE
INTENTION OF MAKING AND RELYING UPON ITS OWN INVESTIGATION OF THE PHYSICAL,
ENVIRONMENTAL, ECONOMIC USE, COMPLIANCE, AND LEGAL CONDITION OF THE PROPERTIES
AND THAT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT OR ANY DOCUMENT OR
INSTRUMENT EXECUTED IN CONNECTION HEREWITH, BUYER IS NOT NOW RELYING, AND WILL
NOT LATER RELY, UPON ANY REPRESENTATIONS AND WARRANTIES MADE BY SELLERS OR
ANYONE ACTING OR CLAIMING TO ACT, BY, THROUGH OR UNDER SELLERS OR ON SELLERS'
BEHALF CONCERNING THE PROPERTIES. THE PROVISIONS OF THIS PARAGRAPH SHALL SURVIVE
INDEFINITELY ANY CLOSING OR TERMINATION OF THIS AGREEMENT AND SHALL NOT BE
MERGED INTO ANY DOCUMENTS EXECUTED OR DELIVERED AT CLOSING.
9. Representations and Warranties of Buyer. Buyer hereby represents and
---------------------------------------
warrants to Sellers as follows:
(a) Buyer is a limited partnership duly organized and
validly existing under the laws of the State of Delaware. Buyer has the power
and authority to own its property and carry on its business as and where it is
now conducted and has the power and unrestricted authority to enter into this
Agreement and perform its obligations and consummate the transactions
contemplated under this Agreement, including delivery of the funds and other
items required for Closing, without the approval or joinder of any other person
or entity.
(b) This Agreement and all documents executed by Buyer
which are to be delivered at the Closing are or at the time of Closing will be
duly authorized, executed, and delivered by Buyer, and are or at the Closing
will be legal, valid, and binding obligations of Buyer, and do not and at the
time of Closing will not violate any provisions of any agreement or judicial
order to which Buyer is a party or to which it is subject.
(c) Buyer is controlled by an entity which owns or controls
or is the general partner of (i) an entity which, together with its affiliates,
exclusive of the Properties encumbered by the Assumable Debt, has a current net
worth of at least $100 million and total assets of at least $200 million; or
(ii) a pension fund, account or trust, or an investment vehicle established by
such entity, which has total assets exclusive of the Properties encumbered by
the Assumable Debt of at least $100 million, and which is managed by an entity
which controls at least $200 million in real estate assets.
29
(d) Buyer or its affiliates currently self manage at least
six (6) retail outlet centers in the United States totaling at least 600,000
square feet, exclusive of the Properties.
10. Loss by Fire or Other Casualty; Condemnation.
--------------------------------------------
(a) Risk of loss up to and including the Closing Date shall
be borne by Sellers. In the event of any material damage to or destruction of
the Properties or the Improvements or any portion thereof, Buyer may, at its
option, by notice to Sellers given within fifteen (15) days after Sellers notify
Buyer of such damage or destruction (and if necessary the Closing Date shall be
extended to give Buyer the full fifteen (15) day period to make such election):
(i) terminate this Agreement and the Deposit shall be immediately returned to
Buyer and thereafter neither party shall incur any further liability or
obligations under this Agreement, provided, however, that Buyer and Sellers
agree that they shall continue to be bound by those provisions of this Agreement
which expressly provide that they shall survive any termination of this
Agreement, or (ii) proceed under this Agreement, receive any insurance proceeds
(including any rent loss insurance applicable to any period on and after the
Closing Date) due Sellers as a result of such damage or destruction and assume
responsibility for such repair, and Buyer shall receive a credit at Closing for
any deductible, uninsured or coinsured amount under said insurance policies. If
Buyer elects (ii) above, Buyer may extend the Closing Date for up to an
additional thirty (30) day period in which to obtain insurance settlement
agreements with Sellers' insurers, and Sellers will cooperate with Buyer in
obtaining the insurance proceeds and such agreements from Sellers' insurers
(whether prior to or following Closing). If the Properties are not materially
damaged, then Buyer shall not have the right to terminate this Agreement, but
Sellers shall, at their cost, repair the damage before the Closing in a manner
reasonably satisfactory to Buyer or if repairs cannot be completed before the
Closing, credit Buyer at Closing for the reasonable cost to complete the repair.
"Material damage" and "materially damaged" means (i) with respect to all of the
--------------- ------------------
the Properties or the Improvements, damage reasonably anticipated to exceed
$5,000,000 to repair, or (ii) damage reasonably anticipated to exceed $1,000,000
to repair any damage to any one of the shopping centers located in Vacaville,
CA, Smithfield, NC and/or North Bend, WA. Sellers shall promptly notify Buyer of
any casualty affecting all or any portion of the Properties or Improvements. The
provisions of this Section 10(a) shall survive the Closing.
(b) In the event any proceedings in eminent domain are
instituted by any body having the power of eminent domain with respect to the
Properties or the Improvements or any material portion thereof, Buyer may, at
its option, by notice to Sellers given within fifteen (15) days after Sellers
notify Buyer of such proceedings (and if necessary the Closing Date shall be
extended to give Buyer the full fifteen (15) day period to make such election):
(i) terminate this Agreement and the Deposit shall be immediately returned to
Buyer and thereafter neither party shall incur any further liability or
obligations under this Agreement; provided, however, that Buyer and Sellers
agree that they shall continue to be bound by those provisions of this Agreement
which expressly provide that they shall survive any termination of this
Agreement, or (ii) proceed under this Agreement, in which event Sellers shall,
at the Closing, assign to Buyer its entire right, title and interest in and to
any condemnation award, and Buyer shall have the sole right during the pendency
of this Agreement and following the Closing
30
to negotiate and otherwise deal with the condemning authority in respect of such
matter. "Material portion" shall mean (i) portions affecting the value of the
----------------
Properties or the Improvements in an amount exceeding $5,000,000 in the
aggregate (whether by virtue of the value of the Properties or the Improvements
or interest in the Properties or the Improvements to be taken, the impact to the
value of the Property as a result of such taking, or otherwise), or (ii) any
portion affecting the value of any one of the Properties located in Vacaville,
CA, Smithfield, NC or North Bend, WA exceeding $1,000,000 (whether by virtue of
the value of the Properties or the Improvements or interest in the Properties or
the Improvements to be taken, the impact to the value of the Property as a
result of such taking, or otherwise). Sellers shall promptly notify Buyer of any
taking affecting all or any portion of the Properties or Improvements. Sellers
will cooperate with Buyer in obtaining any condemnation award (whether prior to
or following Closing). The provisions of this Section 10(b) shall survive the
Closing.
11. Default; Remedies.
-----------------
(a) If Buyer should default in any material respect in the
performance of any of Buyer's obligations under this Agreement, or should any
representation or warranty of Buyer pursuant to Section 9 be untrue in any
---------
material respect, and provided that Sellers have duly and timely performed all
of their obligations and are not in default hereunder in any material respect,
as Sellers' sole and exclusive remedy, Sellers may terminate this Agreement, in
which event the Deposit shall be returned to Buyer after deducting therefrom the
amount necessary to reimburse Sellers for all costs and expenses reasonably
incurred by Sellers in connection with the preparation and negotiation of this
Agreement, assisting Buyer in its investigations of the Properties (including
any title or survey costs incurred on Buyer's behalf), satisfaction of the
Assumption Conditions, and in exercising any of Sellers' rights and the
performance of Sellers' obligations under this Agreement; provided, however, in
the event of Buyer's failure to deliver funds or documents required to be
executed and delivered by Buyer pursuant to Section 6(c), above, or any other
------------
material default by Buyer resulting from willful or intentional misconduct,
fraud or intentional misrepresentation, or similar acts or omissions, and
provided that Sellers have duly and timely performed all of their obligations
and are not in default hereunder in any material respect, Sellers shall be
entitled to terminate this Agreement and receive and retain the Deposit as
liquidated damages and as Sellers' sole and exclusive remedy for any such
default; provided, however, that should Buyer's default be other than a failure
to deliver the funds or documents required to be executed and delivered by Buyer
pursuant to Section 6(c), above, prior to exercising its right to terminate this
------------
Agreement, Sellers shall provide Buyer with not less than ten (10) days prior
written notice in order to afford Buyer an opportunity to cure such default.
Buyer and Sellers agree that in the event of Buyer's default, Sellers' damages
would be difficult to ascertain and the Deposit represents a reasonable estimate
of such damages under the circumstances. The foregoing remedies shall be the
sole and exclusive remedies of Sellers resulting from Buyers default under this
Agreement, with Sellers hereby waiving any rights they might otherwise have to
xxx for damages (including incidental, special, indirect, consequential,
punitive or other speculative or compensatory damages) or seek specific
performance, injunctive relief or any other equitable remedy.
(b) If Sellers should default in any material respect in
the performance of any of Sellers' obligations under this Agreement, or should
any representation or warranty of
31
Sellers pursuant to Section 8 be untrue in any material respect, and provided
---------
that Buyer has duly and timely performed all of its obligations and is not in
default hereunder in any material respect, as Buyer's sole and exclusive remedy,
Buyer may terminate this Agreement, in which event the Deposit shall be
promptly returned to Buyer and Sellers shall, within thirty (30) days of
termination, reimburse Buyer for all costs and expenses reasonably incurred by
Buyer in connection with the preparation and negotiation of this Agreement,
Buyer's investigations of the Properties (including any title and survey costs),
satisfaction of the Assumption Conditions, and in exercising any of Buyer's
rights and the performance of Buyer's obligations under this Agreement;
provided, however, in the event of Sellers' failure to deliver documents
required to be executed and delivered by Sellers pursuant to Section 6(d),
------------
above, or any other material default by Sellers resulting from willful or
intentional misconduct, fraud or intentional misrepresentation, or similar acts
or omissions, Buyer shall be entitled to terminate this Agreement, the Deposit
shall be promptly returned to Buyer and, in addition to the return of the
Deposit, Seller shall pay to Buyer within thirty (30) days of such termination
the sum of $5,000,000 as liquidated damages and as Buyer's sole and exclusive
remedy for any such default (unless Sellers shall fail to pay such amount to
Buyer within such thirty (30) day period in which event, such amount shall bear
interest at the rate of two percent (2%) above the "prime rate" quoted from time
to time by The Wall Street Journal and Buyer shall have all remedies available
at law or in equity with respect to such failure to pay such liquidated
damages); and provided, further, that should Sellers' default be other than a
failure to deliver the documents required to be executed and delivered by
Sellers pursuant to Section 6(d), above, and should such default be reasonably
------------
susceptible to cure, prior to exercising its remedies under this Agreement,
Buyer shall provide Sellers with not less than ten (10) days prior written
notice in order to afford Sellers an opportunity to cure such default. Buyer and
Sellers agree that in the event of Sellers' default, Buyer's damages would be
difficult to ascertain and $5,000,000 represents a reasonable estimate of such
damages under the circumstances. The foregoing remedies shall be the sole and
exclusive remedies of Buyer resulting from Sellers' default under this
Agreement, with Buyer hereby waiving any rights it might otherwise have to xxx
for damages (including incidental, special, indirect, consequential, punitive or
other speculative or compensatory damages) or seek specific performance,
injunctive relief or any other equitable remedy.
12. Cross-Indemnification.
---------------------
Intentionally Deleted.
13. Miscellaneous.
-------------
(a) Notices. Unless otherwise provided herein, any notice
-------
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been given the day after such notice was deposited with
a nationally-recognized overnight delivery service, or the date sent by
confirmed telecopy and addressed as follows:
32
If to Buyer: Chelsea Property Group, Inc.
-----------
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Fax No.: (000) 000-0000
Copy to: Stroock & Stroock & Xxxxx LLP
-------
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax No: (000) 000-0000
If to Sellers: KPT Properties, L.P.
-------------
c/o Konover Property Trust, Inc.
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Legal Department
Fax No: (000) 000-0000
Copy to: Xxxxx, Xxxxx & Xxxxx
-------
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxx X. Xxxxxxxxx
Fax No: (000) 000-0000
or such other address as either party may from time to time specify in writing
to the other.
(b) Brokers and Finders. None of the parties has had any
-------------------
contact or dealings regarding the Properties, or any communication in connection
with the subject matter of this transaction, through any licensed real estate
broker or other person who can claim a right to a commission or finder's fee as
a procuring cause of the sale contemplated herein, except for advisory fees due
Credit Suisse First Boston by Sellers and Xxxxxxx Xxxxx & Co. by Buyer pursuant
to separate agreements. Buyer shall indemnify, save harmless and defend Sellers
from any liability, cost, or expense (including reasonable attorneys' fees)
arising out of or connected with any claim for any commission or compensation
made by any person or entity claiming to have been retained or contacted by
Buyer in connection with this transaction, other than those parties identified
herein. Sellers shall jointly and severally indemnify, save harmless and defend
Buyer from any liability, cost, or expense (including reasonable attorneys'
fees) arising out of or connected with any claim for any commission or
compensation made by any person or entity claiming to have been retained or
contacted by Sellers in connection with this transaction, other than those
parties identified herein. The provisions of this paragraph shall survive the
Closing and any termination of this Agreement.
33
(c) Successors and Assigns. At Closing, Buyer shall have
----------------------
the right by delivery of written notice to Sellers, to designate one or more
affiliated entities to whom the Properties may be conveyed, provided that, if
applicable, such designee shall be acceptable to the holders of the Assumable
Debt and such action shall in no manner delay or interfere with the Closing.
Except as expressly provided, no party may assign this Agreement without the
prior written consent of the other, and any such prohibited assignment shall be
void. Subject to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the respective successors and assigns of the parties.
(d) Amendments. Except as otherwise provided herein, this
----------
Agreement may be amended or modified only by a written instrument executed by
Sellers and Buyer.
(e) Continuation and Survival. All representations and
-------------------------
warranties by the respective parties contained herein or made in writing
pursuant to this Agreement are intended to and shall remain true and correct as
of the time of Closing, and shall survive the execution and delivery of this
Agreement, the delivery of the Deeds and the Community Center Deeds, and
transfer of title to the Properties for a period of one (1) year following the
Closing, except as otherwise expressly provided in this Agreement. In addition,
the provisions of this Agreement that contemplate performance after the Closing
and the obligations of the parties not fully performed at the Closing shall
survive the Closing and shall not be deemed to be merged into or waived by the
instruments of Closing.
(f) Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the laws of the State of New York, without
giving effect to conflicts of law.
(g) Consent to Jurisdiction. Each of Buyer and Sellers
-----------------------
hereby irrevocably and unconditionally:
(i) Submits for itself and its property in any legal
action, suit or proceeding in connection with this Agreement or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate courts
from any thereof;
(ii) Consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient forum and agrees not to
plead or claim the same;
(iii) Agrees that nothing herein shall affect the
right to xxx in any other jurisdiction.
(h) Merger of Prior Agreements. This Agreement, including
--------------------------
the exhibits hereto, constitutes the entire agreement between the parties with
respect to the purchase
34
and sale of the Properties and supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter hereof
with the exception of the Confidentiality Agreement referred to in Section
-------
13(m).
-----
(i) Enforcement. In the event any party hereto fails to
-----------
perform any of its obligations under this Agreement or in the event a dispute
arises concerning the meaning or interpretation of any provision of this
Agreement, the defaulting party or the party not prevailing in such dispute, as
the case may be, shall pay any and all costs and expenses incurred by the other
party in enforcing or establishing its rights hereunder, including, without
limitation, court costs and reasonable attorneys' fees.
(j) Time of the Essence. Time is of the essence in the
-------------------
performance of this Agreement.
(k) Execution in Counterparts. This Agreement may be
-------------------------
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of such counterparts shall constitute one Agreement. To
facilitate execution of this Agreement, the parties may execute and exchange by
telephone facsimile counterparts of the signature pages.
(l) Calculation of Time Periods. Unless otherwise
---------------------------
specified, in computing any period of time described herein, the day of the act
or event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Business Day, in which event the period shall run until the
end of the next Business Day. As used herein, the term "Business Day" shall be
deemed to mean any day, other than a Saturday or Sunday, on which commercial
banks in the State of New York are not required or authorized to be closed for
business.
(m) Confidentiality. Buyer and Sellers agree that, except
---------------
to the extent expressly provided to the contrary in this Agreement, the
Confidentiality Agreement dated May 4, 2001, previously executed by Buyer,
remains in full force and effect. Buyer shall not record this Agreement or any
affidavit or memorandum of this Agreement or any document to which this
Agreement is attached.
Sellers agree to keep all details of the proposed
transaction confidential until Closing, except to the extent that (i) both
Sellers and Buyer shall, following execution of this Agreement, agree to make
public disclosure as to the material terms of this Agreement, and shall agree as
to the content of that disclosure, (ii) disclosure is necessary or appropriate
in order to consummate the transaction contemplated hereby, (iii) disclosure is
required under applicable securities laws and regulations or the rules of the
New York Stock Exchange, or (iv) such information is in the public domain.
(n) Further Assurances. In addition to the acts and deeds
------------------
recited herein and contemplated to be performed, executed and/or delivered by
any party at Closing, each party agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or after
the Closing any further deliveries and assurances as
35
may be reasonably necessary to consummate the transactions contemplated hereby
or to further perfect the conveyance, transfer and assignment of the Properties
to Buyer.
(o) Exhibits. Each of the exhibits attached to this
--------
Agreement is incorporated into and made a part of this Agreement. To the extent
that any exhibit has not been completed or agreed upon as of the date of
execution of this Agreement, this Agreement shall nonetheless constitute a
binding agreement between the parties relating to the matters set forth herein,
the parties agree to negotiate in good faith to agree as to the form and content
of those exhibits during the Review Period, and prior to the expiration of the
Review Period, those exhibits shall be attached to and made a part of this
Agreement as if attached to and made a part of this Agreement as of the
Effective Date.
(p) Third Parties. Nothing in this Agreement, whether
-------------
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement upon any other person other than the parties hereto and
their respective permitted successors and assigns, nor is anything in this
Agreement intended to relieve or discharge the obligation or liability of any
third persons to any party to this Agreement, nor shall any provision give any
third parties any right of subrogation or action over or against any party to
this Agreement. This Agreement is not intended to and does not create any third
party beneficiary rights whatsoever.
(q) WAIVER OF TRIAL BY JURY. SELLERS AND BUYER HEREBY
-----------------------
WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING
IN TORT OR CONTRACT) BROUGHT BY SUCH PARTY AGAINST THE OTHER ON ANY MATTER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.
14. Repurchase of Las Vegas.
-----------------------
(a) Provided that the consent of the holder of the REMIC
Loan is obtained prior to the expiration of the Review Period (or the Assumption
Conditions Extension, if applicable) in accordance with the provisions of
Section 4(h), at Closing, Buyer shall grant to KPT the right and option to
------------
purchase the REMIC Property located in Las Vegas, NV for a purchase price of
$2,500,000 (the "Option"), free and clear of the REMIC Loan and any liens and
------
encumbrances made or suffered by Buyer, and KPT shall grant to Buyer the right
to "put" the Las Vegas, NV Property to KPT for a purchase price of $2,500,000
(the "Put"), free and clear of the REMIC Loan and any liens and encumbrances
---
made or suffered by Buyer pursuant to the terms of that certain Option Agreement
in the form of Exhibit X attached hereto (the "Las Vegas Option Agreement").
--------- --------------------------
The Option or the Put may be exercised at any time following December 2, 2001
and prior to July 2, 2002 as provided in the Las Vegas Option Agreement.
(b) Buyer and Sellers agree that the sum of $2,500,000 (the
"Las Vegas Escrow") shall be withheld from the proceeds otherwise due Sellers on
----------------
account of the sale of the Properties. The Las Vegas Escrow shall be invested in
the same manner as the Deposit, and shall either (i) upon exercise of the Option
or the Put, be held and applied by the Title Company in accordance with the
provisions of the Las Vegas Option Agreement, or (ii)
36
following July 2, 2002, if neither the Option nor the Put has been exercised,
disbursed (together with any earnings thereon) to Sellers.
(c) If the consent of the holder of the REMIC Loan is not
obtained in accordance with Section 14(a), Buyer nonetheless agrees that on
-------------
December 2, 2001, Buyer shall (i) pay in full all amounts due on account of the
REMIC Loan and cause the Las Vegas, NV Property to be released from the lien of
the Mortgage Documents related to the REMIC Loan, and (ii) grant to KPT the
Option as herein described.
(d) The provisions of this Section 14 shall survive
----------
Closing.
15. Retention of VF Properties.
--------------------------
The parties acknowledge that this transaction includes provision for the
sale to Buyer of the eleven (11) Properties along with any related REMIC Outlot
Properties identified on Exhibit Y (the "VF Properties"). Provided that the
--------- -------------
consent of the holder of the REMIC Loan is obtained prior to the expiration of
the Review Period in accordance with the provisions of Section 4(h), and Sellers
------------
advise Buyer of their election prior to the expiration of such period, Buyer
hereby grants to Sellers the right to retain the VF Properties on the terms
hereinafter set forth. Sellers shall have the right, at any time prior to the
expiration of the Review Period, to waive its right to retain ownership of the
VF Properties. If (i) Sellers shall elect to waive Sellers' right to retain
ownership of the VF Properties at any time following the fifteenth (15/th/) day
prior to the expiration of the Review Period, or (ii) Sellers fail to deliver
notice to Buyer prior to the expiration of the Review Period of such waiver and
if Sellers shall fail to elect to retain the VF Properties as provided above,
then, notwithstanding anything to the contrary contained herein, the Review
Period shall be extended (the "VF Properties Extension") with respect to the VF
-----------------------
Properties only until (x) with respect to clause (i), the date that is the
fifteenth (15/th/) day following Buyer's receipt of Sellers' election to waive
Sellers' right to retain ownership of the VF Properties and (y) with respect to
clause (ii), the fifteenth (15/th/) day following the expiration of the Review
Period; provided, however, that notwithstanding the fact the such extension is
limited in scope to the VF Properties, Buyer shall not be precluded from
including in an Objection Notice delivered during the VF Properties Extension
matters relating to other Properties to the extent that Buyer had previously
been precluded from delivering an Objection Notice with respect to such matters
because such matters would not constitute a Permitted Objection absent
aggregation with objections related to the VF Properties. If Sellers elect to
retain the VF Properties, then this Agreement shall be modified as follows:
(a) The Purchase Price shall be reduced by $10.00 per
rentable square foot of Improvements located on the VF Properties, which the
parties agree is approximately 946,800 square feet.
(b) The VF Properties shall be retained by REMIC, and the
definitions of "Properties", "REMIC Properties", "REMIC Fee Properties", "Ground
Lease Properties" and other relevant terms shall be deemed amended accordingly.
37
(c) Sellers shall be relieved from any and all obligations
with respect to the delivery of Tenant Estoppels, Ground Lessor Estoppels and
Declarant Estoppels, and all other instruments, documents and other information,
relating solely to the VF Properties.
(d) Buyer shall assume and be liable for the payment of the
entire amount of the REMIC Loan and shall assume responsibility for the
performance of the obligations under the Mortgage Documents related to the REMIC
Loan from and after the Closing Date as to Properties conveyed to Buyer
hereunder. REMIC shall remain responsible for the performance of the obligations
under the Mortgage Documents related to the REMIC Loan as to each of the VF
Properties (other than payment of principal and interest), and Buyer shall
promptly upon demand remit to REMIC any amounts paid on account of principal and
interest and other amounts due under the REMIC Loan from the VF Properties as a
result of amounts withdrawn from "lockbox" accounts by the holder or servicer of
the REMIC Loan in accordance with the terms of the applicable Mortgage
Documents; provided, however, that REMIC agrees not to voluntarily pay any
amounts on account of the REMIC Loan in excess of amounts drawn from the
"lockbox" account without the consent of Buyer, which consent shall not be
unreasonably withheld, conditioned or delayed. At Closing, (i) Buyer and REMIC
shall each execute and deliver a performance and indemnity agreement including
cross-indemnification of each party with respect to the performance of each of
their respective obligations with respect to the REMIC Loan and the applicable
Mortgage Documents and (ii) the Purchase Price shall be reduced by an amount
equal to the aggregate total of the costs and expenses incurred by Buyer in
connection with its due diligence investigations of the VF Properties.
(e) Buyer shall irrevocably agree to the payment and
satisfaction of all outstanding amounts due on account of the REMIC Loan on
December 2, 2001.
(f) The provisions of this Section 15 shall survive
----------
Closing.
16. Form of Transaction.
-------------------
The parties acknowledge that this transaction is structured as a sale of
individual properties. However, provided that such action shall be acceptable
to the holders of the Assumable Debt, and such action shall in no manner
materially delay or interfere with the Closing, Buyer may, by delivery of
written notice to Sellers at any time prior to the expiration of the Review
Period, elect to acquire all of the beneficial ownership interests in REMIC, KPT
Mortgage and/or Smithfield, in which event Buyer and Sellers agree within five
(5) Business Days following such election to enter into an amendment to this
Agreement setting forth such modifications as are reasonably necessary or
appropriate in order to effect a portion of the transactions contemplated hereby
as the purchase of one or more entities in addition to the direct purchase of
the remaining Properties.
17. Board of Director Approval.
--------------------------
Each party hereby agrees to seek the approval of the Board of Directors (or
that of its general partner, managing member, or general partner of its managing
member, as appropriate)
38
and/or take such other corporate actions and obtain such other corporate
approvals as may be necessary or appropriate in order to authorize this
Agreement and the consummation of the transactions contemplated hereby, and to
provide written or telephonic notice of such approval or failure to obtain such
approval to the other party prior to 5:00 p.m. EDST on July 16, 2001. Any party
who fails to obtain notice of approval of this Agreement by the other party
shall have the right to terminate this Agreement by delivery of written notice
to the other party, and if such approval is not obtained and notice of such
approval provided on or before 5:00 p.m. EDST on July 17, 2001, this Agreement
shall be deemed terminated, in which event the Title Company shall promptly
disburse the Deposit to Buyer, and thereafter neither party shall incur any
further liability or obligations under this Agreement; provided, however, that
Buyer and Sellers agree that they shall continue to be bound by those provisions
of this Agreement which expressly provide that they shall survive any
termination of this Agreement.
18. Termination by Konover.
----------------------
Notwithstanding anything to the contrary contained in this Agreement,
should Sellers at any time prior to the expiration of the Review Period (or, if
applicable, the Title and Survey Extension, the Assumption Conditions Extension
or the VF Properties Extension) determine that it is necessary or appropriate to
terminate this Agreement, Sellers in their sole and absolute discretion may
terminate this Agreement by delivering written notice to Buyer prior to the
expiration of the Review Period (or, if applicable, the Title and Survey
Extension, the Assumption Conditions Extension or the VF Properties Extension),
together with a wire transfer of good federal funds to Buyer in the amount of
$5,000,000 to an account designated by Buyer on account of such termination, and
the Title Company shall promptly disburse the Deposit to Buyer, in which event
this Agreement shall be deemed terminated and thereafter neither party shall
incur any further liability or obligations under this Agreement; provided,
however, that Buyer and Sellers agree that they shall continue to be bound by
those provisions of this Agreement which expressly provide that they shall
survive any termination of this Agreement.
19. Joint and Several Liability.
---------------------------
Each of the Sellers shall be jointly and severally liable for all claims,
liabilities, agreements and obligations hereunder.
20. Acquisition.
-----------
If all or substantially all of the assets or stock or interests of Konover
or KPT shall be acquired by another person or entity, or if Konover or KPT shall
be merged with or into another entity prior to the Closing, the acquiring
entity, as a condition to such transaction, must agree to recognize and
acknowledge that Sellers shall continue to be bound under all the provisions of
this Agreement.
[signature page follows]
39
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SELLERS:
KPT PROPERTIES, L.P.
a Delaware limited partnership, doing business
in North Carolina as KPT Properties Limited
Partnership
By: Konover Property Trust, Inc.
a Maryland corporation
Its General Partner
By:_____________________________________
Name:
Title:
KONOVER PROPERTY TRUST, INC.,
a Maryland corporation
Its General Partner
By:_____________________________________
Name:
Title:
KPT REMIC LOAN LLC
By:_____________________________________
Name:
Title:
KPT MORTGAGE LLC
By:_____________________________________
Name:
Title:
SMITHFIELD KPT LLC
By:_____________________________________
Name:
Title:
40
BUYER:
CPG PARTNERS, L.P.
a Delaware limited partnership
By: Chelsea Property Group, Inc.,
a Maryland corporation
Its General Partner
By:_____________________________________
Name:
Title:
CHICAGO TITLE INSURANCE COMPANY
By:_____________________________
Name:
Title:
41
LIST OF EXHIBITS
----------------
Exhibit A Description of REMIC Properties
Exhibits A-1 - A-18 Description of Individual REMIC Properties
Exhibit B Description of CapMark Properties
Exhibits B-1 - B-13 Description of Individual CapMark Properties
Exhibit C Description of the Carolina Outlet Center Property
Exhibit D-1 Description of the Hempstead Property
Exhibit D-2 Description of the Tri Cities Property
Exhibit D-3 Description of the Tupelo Property
Exhibit E-1 Description of REMIC Outlot Property (Arcadia)
Exhibit E-2 Description of REMIC Outlot Property (Crossville)
Exhibit E-3 Description of REMIC Outlot Property (Xxxxxx)
Exhibit E-4 Description of REMIC Outlot Property (LaMarque)
Exhibit E-5 Description of REMIC Outlot Property (Union City)
Exhibit E-6 Description of REMIC Outlot Property (West Frankfort)
Exhibit F Escrow Provisions
Exhibit G List of Structural and Environmental Reports
Exhibit H Form of Tenant Estoppel
Exhibit I Form of Ground Lessor Estoppel
Exhibit J Form of Declarant Estoppel
Exhibit K Form of Assignment and Assumption of Ground Lease
Exhibit L Form of Xxxx of Sale
Exhibit M Form of Assignment and Assumption of Leases
Exhibit N Form of Assignment and Assumption of Service Contracts,
Warranties and Guaranties and Other Intangible Property
Exhibit O Form of Buyer's Certificate
Exhibit P Form of Welcome Assignment
Exhibit Q Form of Notice to Tenants
Exhibit R Form of Seller's Certificate
Exhibit S Form of FIRPTA Certificate
Exhibit T-1 List of Tenant Defaults
Exhibit T-2 List of Landlord Defaults
Exhibit T-3 List of Outstanding Tenant Obligations
Exhibit U List of Contract Defaults
Exhibit V List of Outstanding Options and Purchase Rights
Exhibit W List of Notices of Pending Actions
Exhibit X Form of Las Vegas Purchase Agreement
Exhibit Y List of VF Properties
Form of Assignment and Assumption of Reciprocal
Easement Agreement
Exhibit AA List of Personal Property
Exhibit BB Form of Assignment and Assumption of Reciprocal
Easement Agreements
Exhibit CC Notices of Violations of Laws
Exhibit DD List of Tenant Bankruptcies
EXHIBIT A
LIST OF REMIC PROPERTIES
Factory Stores of America - Arcadia, Louisiana
Factory Stores of America - Corsicana, Texas
Xxxxxxx Xxxxxx xx Xxxxxxx - Xxxxxxxxxx, Xxxxxxxxx
Factory Stores of America - Draper, Utah
Factory Stores of America - Xxxxxx, Kentucky
Factory Stores of America - Iowa, Louisiana
Factory Stores of America - Kittery, Maine
Factory Stores of America - Xxxx Xxxxxx, New York
Factory Stores of America - La Marque, Texas
Vegas Pointe Plaza - Las Vegas, Nevada
Xxxxxxx Xxxxxx xx Xxxxxxx - Xxxxxxxxxx, Xxxxx
Factory Stores of America - Mesa, Arizona
Factory Stores of America - Mineral Wells, Texas
Factory Stores of America - North Bend, Washington
Factory Stores of America - Tucson, Arizona
Xxxxxxx Xxxxxx xx Xxxxxxx - Xxxxx Xxxx, Xxxxxxxxx
Xxxxxxx Xxxxxxx xx Xxxxxxxxx - Xxxxxxxxx, Xxxxxxxxxx
Xxxxxxx Xxxxxx xx Xxxxxxx - Xxxx Xxxxxxxxx, Xxxxxxxx
EXHIBIT B
LIST OF CAPMARK PROPERTIES
Factory Stores of America - Boaz, Alabama
Factory Shoppes at Branson Xxxxxxx - Xxxxxxx, Missouri
Dare Centre, Kill Devil Hills, North Carolina
Factory Stores of America - Graceville, Florida
Factory Stores of America - Georgetown, Kentucky
Factory Stores of America - Lebanon, Missouri
MacGregor Village, Cary, North Carolina
Factory Stores of America - Nebraska City, Nebraska
North Ridge Shopping Center, Raleigh, North Carolina
Carolina Outlet Center, Smithfield, North Carolina (fee property)
Factory Stores of America - Story City, IO
EXHIBIT C
[DESCRIPTION OF CAROLINA OUTLET CENTER PROPERTY]
EXHIBIT D-1 - D-3
[DESCRIPTION OF HEMPSTEAD, TRI CITIES AND TUPELO PROPERTIES]
EXHIBIT E
LIST OF REMIC OUTLOT PROPERTIES
Arcadia, LA
Crossville, TN
Hanson, KY
La Marque, TX
Union City, TN
West Frankfort, IL
EXHIBIT E-1 - E-6
[DESCRIPTION OF REMIC OUTLOT PROPERTIES]
EXHIBIT F
ESCROW PROVISIONS
Investment and Use of Funds. The Title Company shall invest the Deposit in
---------------------------
government insured interest-bearing accounts satisfactory to Konover and Buyer,
shall not commingle the Deposit with any funds of the Title Company or others,
and shall promptly provide Konover and Buyer with confirmation of the
investments made. If the Closing under this Agreement occurs, the Deposit shall
be applied at Closing to the Purchase Price due at Closing. Provided such
supplemental escrow instructions are not in conflict with this Agreement as it
may be amended in writing from time to time, Seller and Buyer agree to execute
such supplemental escrow instructions as may be appropriate to enable Title
Company to comply with the terms of this Agreement.
Termination Within Review Period. If Buyer delivers a Termination Notice
--------------------------------
pursuant to Section 4, Title Company shall pay the entire Deposit to Buyer one
---------
Business Day following receipt of the Termination Notice from Buyer and this
Agreement shall thereupon terminate. No notice to Title Company from Sellers
shall be required for the release of the Deposit to Buyer by Title Company. The
Deposit shall be released and delivered to Buyer from Title Company upon Title
Company's receipt of the Termination Notice despite any objection or potential
objection by Sellers. Sellers agree they shall have no right to bring any action
against Title Company which would have the effect of delaying, preventing, or in
any way interrupting Title Company's delivery of the Deposit to Buyer pursuant
to this paragraph, any remedy of Sellers being against Buyer, not Title Company.
Other Terminations. Upon a termination of this Agreement other than as
------------------
described in Section 4, either party to this Agreement may give written notice
---------
to the Title Company and the other party of such termination and the reason for
such termination. Such request shall also constitute a request for the release
of the Deposit to the terminating party. Upon receipt, the Title Company shall
send a copy of the termination and request for release to the non-terminating
party. The non-terminating party shall then have five (5) Business Days from
receipt of the Title Company's notice in which to object in writing to the
release of the Deposit to the terminating party. If the non-terminating party
provides such an objection, then the Title Company shall retain the Deposit
until it receives written instructions executed by both Sellers and Buyer as to
the disposition and disbursement of the Deposit, or until ordered by final court
order, decree or judgment, which is not subject to appeal, to deliver the
Deposit to a particular party, in which event the Deposit shall be delivered in
accordance with such notice, instruction, order, decree or judgment.
Interpleader. Except as specifically provided above, Sellers and Buyer
------------
mutually agree that in the event of any controversy regarding the Deposit,
unless mutual written instructions are received by the Title Company directing
the Deposit's disposition, the Title Company shall not take any action, but
instead shall await the disposition of any proceeding relating to the Deposit
or, at the Title Company's option, the Title Company may interplead all parties
and deposit the Deposit with a court of competent jurisdiction in which event
the Title Company may recover all
of its court costs and reasonable attorneys' fees. Sellers or Buyer, whichever
loses in any such interpleader action, shall be solely obligated to pay such
costs and fees of the Title Company.
Liability of Title Company. The parties acknowledge that the Title Company
--------------------------
is acting solely as a stakeholder at their request and for their convenience,
that the Title Company shall not be deemed to be the agent of any of the
parties, and that the Title Company shall not be liable to any of the parties
for any action or omission on its part taken or made in good faith, and not in
disregard of this Agreement, but shall be liable for its negligent acts and for
any loss, cost or expense incurred by Sellers or Buyer resulting from the Title
Company's mistake of law respecting the Title Company's scope or nature of its
duties.
Escrow Fee. The escrow fee, if any, charged by the Title Company for
----------
holding the Deposit or conducting the Closing shall be shared equally by Sellers
and Buyer.
EXHIBIT G
---------
LIST OF STRUCTURAL AND ENVIRONMENTAL REPORTS
--------------------------------------------
EXHIBIT H
---------
TENANT ESTOPPEL CERTIFICATE
---------------------------
___________________
___________________
___________________
___________________
___________________
Re: Lease dated _____________, ____, ("Lease") between ______________________
("Landlord") and ______________________ ("Tenant") covering approximately
______ square feet (the "Premises") in the ______________ (the "Property")
Gentlemen:
The undersigned, as Tenant under the Lease, hereby certifies to you as
follows:
1. A true and correct [copy of the Lease/ description of the Lease
documents] is attached hereto as Exhibit A. The Lease is in full force and
---------
effect and has not been modified, amended, supplemented, guaranteed, assigned or
sublet except [as set forth on Exhibit A/as follows:
_____________________________________________________________________________]
2. All tenant work in the Premises has been completed in accordance with
the terms of the Lease. The term of the Lease has commenced; Tenant has accepted
possession of the Premises; Tenant now occupies all parts of the Premises and is
open for business.
3. The commencement date of the Lease is ______________ and the
termination date of the Lease term is _____________. The Lease provides for no
further right of extension except as provided for in Section ____ of the Lease,
with _______ options to renew for a period of _____ years each.
4. The current fixed monthly rent payable under the Lease is $_________.
The current fixed monthly rent payable under the Lease during the current term
escalates as follows _______________. Percentage rent is computed as an amount
equal to ________ percent of gross sales in excess of a base of $________ per
square foot per year.
5. The fixed monthly rent, the monthly payments on account of additional
rent and all other charges due under the Lease have been paid through
__________________, and Tenant is paying such rent on a current basis. There are
no concessions including, without limitation, free rent and tenant improvement
allowances, owed by Landlord to Tenant.
6. Tenant has no claim to, or any basis for a claim for, any adjustment
to the fixed annual rent or any additional rent.
7. Tenant has no right to lease additional space in the Property, no
right of first refusal or option to terminate, except pursuant to Section ____
of the Lease.
8. Tenant has no right of first refusal or other option to purchase the
Property.
9. There are no (a) rental offsets, (b) claims or (c) defenses to the
enforcement of any of the agreements, terms, covenants or conditions of the
Lease on Tenant's part to be performed.
10. There are no other agreements or understandings between current
Landlord and Tenant, except as indicated above. The undersigned will not amend
or modify the Lease without the prior written consent of the new owner.
11. Tenant has deposited with Landlord the sum of $_________ as security
for due performance of its obligation under the terms of the Lease, and has paid
$_______ for ____ months' advance rental.
12. As of the date hereof, there is no default or breach on the part of
the Landlord under any covenant, condition or agreement contained in the Lease,
nor , to Tenant's knowledge, does there exist any condition which, with the
passage of time or giving of notice, would become a default under the terms of
the Lease.
13. Tenant knows of no commission payable with regard to the Lease.
14. Tenant will attorn to the buyer of the Property as successor Landlord
under the Lease.
15. The person executing this certification is duly authorized to execute
the same on behalf of the Tenant and the certificate shall be binding on the
Tenant, its (their) heirs, successors and assigns.
16. This certificate is given to Landlord, any prospective purchaser of
the Property and any prospective lender and may be relied on by Landlord, any
prospective purchaser of the Property, and any prospective lender, and their
respective successors and assigns.
Dated this _____ day of __________, 2001.
TENANT: __________________________
EXHIBIT J
---------
DECLARANT ESTOPPEL
------------------
EXHIBIT K
---------
ASSIGNMENT AND ASSUMPTION OF GROUND LEASE
-----------------------------------------
EXHIBIT L
XXXX OF SALE
Concurrently with the execution and delivery hereof, KPT PROPERTIES, L.P.,
a Delaware limited partnership, doing business in North Carolina as KPT
Properties Limited Partnership ("Assignor"), is conveying to CPG Partners, L.P.,
--------
a Delaware limited partnership] ("Assignee"), by special warranty deed (the
--------
"Deed") that certain real property located in ____________ _________________
-----
(the "Property"), being more particularly described on Exhibit A attached to the
-------- ---------
Deed.
It is the desire of Assignor to hereby assign, transfer and convey to
Assignee all of Assignor's right, title and interest in and to any and all of
the personal property described in Schedule 1 attached hereto (all of such
----------
properties and assets being collectively called the "Personal Property"). It is
-----------------
the desire and intent of Assignee to accept said transfer and assignment subject
to the terms and conditions hereof and the terms and conditions contained in the
Agreement for Sale dated July __, 2001 among Assignor, Assignee and others.
NOW THEREFORE, in consideration of the receipt of Ten and No/100 Dollars
($10.00) and other good and valuable consideration in hand paid by Assignee to
Assignor, the receipt and sufficiency of which are hereby acknowledged and
confessed by Assignor, Assignor does hereby ASSIGN, SELL, TRANSFER, SET OVER and
DELIVER to Assignee, its successors and assigns, all of Assignor's right, title
and interest in and to the Personal Property, and Assignee does hereby assume
and agree to perform all of the duties, obligations and responsibilities of
Assignor with respect to the Personal Property arising from and after the date
hereof.
IN WITNESS WHEREOF, Assignor has caused this Xxxx of Sale to be executed
the ___ day of __________, 2001.
KPT PROPERTIES, L.P.,
a Delaware limited partnership, doing
business in North Carolina as KPT
PROPERTIES LIMITED PARTNERSHIP
By: Konover Property Trust, Inc.,
a Maryland corporation
its General Partner
By:
____________________________
Name:
Title:
SCHEDULE 1 TO
XXXX OF SALE
[SCHEDULE OF PERSONAL PROPERTY]
EXHIBIT M
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (the "Assignment") is made as of
----------
the ___ day of ____________, 2001, from KPT PROPERTIES, L.P., a Delaware limited
partnership, doing business in North Carolina as KPT PROPERTIES LIMITED
PARTNERSHIP ("Seller") to [CPG Partners, L.P., a Delaware limited partnership]
------
("Buyer").
-----
RECITALS
A. Seller and Buyer entered into that certain Agreement For Sale dated as
of ___________, 2001 (the "Agreement") whereby Buyer agreed to acquire from
---------
Seller ertain real property described in Exhibit A attached hereto (the
---------
"Property"), along with certain improvements and personal property built or to
--------
be built thereon (collectively, the "Project").
-------
B. Seller is the landlord under certain leases (collectively, the
"Leases"), affecting all or a portion of the Property, the originals having been
------
delivered to Buyer, listed in the tenant lease summary attached as Exhibit B
---------
hereto.
C. As a condition to purchasing the Project, Buyer has required that
Seller enter into this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Seller hereby assigns to Buyer, its successors and assigns, all of the
right, title and interest of Seller in and to the Leases, and any security
deposits (including accrued interest thereon) and all advance rentals plus any
interest to which tenants may be entitled, and Buyer assumes and agrees to
perform all of the obligations of Seller as landlord thereunder from and after
the date hereof.
2. This Assignment may be executed in counterparts.
3. This Assignment shall be binding upon, and shall inure to the benefit
of, the successors and assigns and the parties hereto. Seller does hereby agree
to defend, indemnify and hold harmless Buyer, against any cost, liability, loss,
expense or damage incurred in connection with any bona fide claims as to the
invalidity of this Assignment or the assignment of interests evidenced hereby by
any person claiming by, through or under Seller.
4. This Assignment shall be governed by and construed in accordance with
the laws of the State of __________________.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of
the day and
SELLER: KPT PROPERTIES, L.P.,
a Delaware limited partnership,
doing business in North Carolina as
KPT PROPERTIES LIMITED PARTNERSHIP
By: Konover Property Trust, Inc.,
a Maryland corporation
its General Partner
By: ___________________________
Name:
Title:
BUYER: [CPG PARTNERS, L.P.
a Delaware limited partnership]
By: _________________________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND ASSUMPTION OF LEASES
[LEGAL DESCRIPTION]
EXHIBIT B
TO ASSIGNMENT AND ASSUMPTION OF LEASE
[TENANT LEASE SUMMARY]
[TO BE FURNISHED BY SELLER AT CLOSING]
EXHIBIT N
ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS,
-----------------------------------------------
WARRANTIES AND GUARANTIES AND
-----------------------------
OTHER INTANGIBLE PROPERTY
-------------------------
THIS ASSIGNMENT is made and entered into as of the ___ day of _________,
2001, by KPT PROPERTIES, L.P., a Delaware limited partnership doing business in
North Carolina as KPT PROPERTIES LIMITED PARTNERSHIP ("Assignor") to [CPG
--------
PARTNERS, L.P., a Delaware limited partnership] ("Assignee").
--------
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which
is hereby acknowledged, the Assignor and Assignee agree as follows:
1. Assignor hereby assigns and transfers unto Assignee all of its
transferable right, title, claim and interest in and under:
a) All of the warranties and guaranties set forth in Schedule 1
----------
attached hereto, made by or received from any third party with respect to any
building, building component, structure, fixture, machinery, equipment or
material situated on, contained in any building or other improvement situated
on, or comprising a part of any building or other improvement situated on any
part of that certain real property described in Exhibit A attached hereto (the
---------
"Property");
---------
b) All of the intangible personal property owned by Seller, if any,
and related to the Property, including, without limitation: all trade names and
trade marks associated with the Property, including Seller's rights and
interests, if any, in the name ["____________"]; all contract rights related to
the construction, operation, ownership or management of the Property; and all
governmental permits, approvals and licenses related to the Property, as
described in Schedule 2 attached hereto; and
----------
c) All of the service contracts, leases, licenses and other
agreements relating to the Property listed on Schedule 3 attached hereto.
----------
2. Assignee hereby assumes all of the duties, obligations and liabilities
of Assignor in and under the items described above, accruing or to be performed
from and after the date hereof.
3. This Assignment shall be binding on and inure to the benefit of the
parties hereto, their successors in interest and assigns.
4. This Assignment may be executed in counterparts.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment the
day and year first above written.
ASSIGNOR: KPT PROPERTIES, L.P.,
a Delaware limited partnership, doing business in North
Carolina as KPT PROPERTIES LIMITED PARTNERSHIP
By: Konover Property Trust, Inc.,
a Maryland corporation
its General Partner
By: ___________________________
Name:
Title:
ASSIGNEE: [CPG PARTNERS, L.P., a Delaware limited partnership]
By: _____________________
Name:
Title:
EXHIBIT A
TO ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
[LEGAL DESCRIPTION]
SCHEDULE 1
TO ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
[WARRANTIES AND GUARANTIES]
[TO BE FURNISHED BY SELLER AT CLOSING]
SCHEDULE 2
TO ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
[INTANGIBLE PERSONAL PROPERTY]
SCHEDULE 3
TO ASSIGNMENT AND ASSUMPTION OF SERVICE CONTRACTS
[SERVICE CONTRACTS, LEASES, LICENSES AND OTHER AGREEMENTS]
EXHIBIT O
---------
BUYER'S CERTIFICATE
-------------------
EXHIBIT P
---------
WELCOME ASSIGNMENT
------------------
EXHIBIT Q
---------
NOTICE TO TENANTS
-----------------
___________________
___________________
___________________
Re: __________________________________
Dear Tenant:
This letter will serve as legal notice, as further described in your lease,
of the changes to the ownership and management company for the referenced
property.
The property was purchased by [CHELSEA PROPERTY GROUP, INC., a Delaware
corporation,] from KPT Properties, L.P. [CHELSEA PROPERTY GROUP, INC. replaces
KPT Properties, L.P.] as the legal Landlord for the property.
Effective immediately the property will be managed by
______________________ ______________________________________. All payments,
notices, etc. of any kind are to be addressed to:
______________________
______________________
______________________
If you have any questions or require further information regarding this
transition or the property in general, please call _______________________ at
(___) _______________.
Sincerely,
________________________
EXHIBIT R
---------
SELLERS' CERTIFICATE
--------------------
EXHIBIT S
---------
CERTIFICATE OF NON-FOREIGN STATUS
---------------------------------
(A) Section 1445 of the Internal Revenue Code provides
that a transferee must withhold tax if the transferor is a foreign person.
(B) In order to inform [CHELSEA PROPERTY GROUP, INC., a
Delaware corporation,] that withholding of tax is not required upon disposition
of a U.S. real property interest located in [_____________________], by KPT
PROPERTIES, L.P., a Delaware limited partnership, doing business in the State of
North Carolina as KPT Properties Limited Partnership ("Transferor"), the
----------
undersigned hereby certifies and declares by means of this certificate the
following on behalf of the Transferor.
A. The Transferor is not a foreign corporation, foreign partnership,
foreign trust or foreign estate (as these terms are defined in the Internal
Revenue Code and Income Tax Regulations).
B. The Transferor's employer identification number is: ____________
C. The Transferor's office address is: c/o Konover Property Trust,
Inc., 0000 Xxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000.
(C) The Transferor understands that this certificate may
be disclosed to the Internal Revenue Service by the transferee and that any
false statement contained in this certificate may be punished by fine,
imprisonment, or both.
Under penalties of perjury, I declare that I have examined this certificate
and to the best of my knowledge and belief it is true, correct and complete. I
further declare that I have authority to sign this document on behalf of the
Transferor.
EXECUTED in Wake County, State of North Carolina, on the ___ day of
____________, 2001.
TRANSFEROR: KPT PROPERTIES, L.P., a Delaware limited partnership, doing
business in North Carolina as KPT PROPERTIES LIMITED
PARTNERSHIP
By: Konover Property Trust, Inc.,
a Maryland corporation
Its General Partner
By: ________________________________________
Name:
Title:
EXHIBIT T-1
-----------
TENANT DEFAULTS
---------------
EXHIBIT T-2
-----------
LANDLORD DEFAULTS
-----------------
EXHIBIT T-3
-----------
OUTSTANDING TENANT OBLIGATIONS
------------------------------
EXHIBIT U
---------
CONTRACT DEFAULTS
-----------------
EXHIBIT V
---------
OUTSTANDING OPTIONS AND PURCHASE RIGHTS
---------------------------------------
The rights granted to Welcome KPT LLC, Welcome Hotels, Inc., and other
--------------------------------------------------------------------------------
parties pursuant to the documents referenced in the Welcome Assumption, relating
--------------------------------------------------------------------------------
to a parcel of land of approximately 2.5 acres constituting a part of the
-------------------------------------------------------------------------
MacGregor Shopping Center in Cary, NC.
--------------------------------------
EXHIBIT W
---------
NOTICES OF PENDING ACTIONS
--------------------------
EXHIBIT X
---------
[FORM OF LAS VEGAS PURCHASE AGREEMENT]
--------------------------------------
EXHIBIT Y
---------
LIST OF VF PROPERTIES
---------------------
Arcadia, LA
Corsicana, TX
Xxxxxx, KY
Hempstead, TX
Iowa, LA
Livingston, TX
Mineral Wells, TX
Tucson, AZ
Tupelo, MS
Union City, TN
West Frankfort, IL
EXHIBIT AA
----------
LIST OF PERSONAL PROPERTY
-------------------------
EXHIBIT BB
----------
FORM OF ASSIGNMENT AND ASSUMPTION OF RECIPROCAL EASEMENT
--------------------------------------------------------
AGREEMENTS
----------
EXHIBIT CC
----------
NOTICES OF VIOLATIONS
---------------------
EXHIBIT DD
----------
TENANT BANKRUPTCIES
-------------------
