EXHIBIT 2.4
PURCHASE AGREEMENT
BY AND AMONG
RIG XXXX RIVER COMMONS, LLC,
RIG PARADISE PAVILION, LLC, and
RIG HILLTOP PLAZA, LLC
Collectively as Seller
AND
NEW PLAN EXCEL REALTY TRUST, INC.
as Purchaser
Dated as of October 17, 2002
TABLE OF CONTENTS
Page
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I. PURCHASE OF PURCHASED ASSETS....................................................1
1.1 Sale and Transfer of Purchased Assets....................................1
1.2 Excluded Assets..........................................................3
1.3 No Assumption of Certain Liabilities.....................................3
1.4 No Representations.......................................................3
1.5 Release of Seller........................................................5
1.6 Intentionally Omitted....................................................6
II. CONSIDERATION...................................................................6
2.1 Purchase Price...........................................................6
2.2 Alternate Payment of Purchase Price......................................6
2.3 Xxxxxxx Money............................................................7
2.4 Prorations...............................................................8
2.5 Preparation of Final Statement..........................................14
2.6 Audit...................................................................15
2.7 Tenant Deposits.........................................................15
2.8 Certiorari..............................................................16
2.9 Effect of Closing.......................................................16
III. DUE DILIGENCE, TITLE AND OTHER PROPERTY RELATED MATTERS........................16
3.1 Purchaser's Inspections and Due Diligence...............................16
3.2 Site Visits.............................................................17
3.3 Due Diligence Indemnity.................................................18
3.4 Title...................................................................18
IV. REPRESENTATIONS AND WARRANTIES OF SELLER.......................................20
4.1 Organization and Power of Seller........................................20
4.2 Authority; Noncontravention; Consents...................................20
4.3 Litigation..............................................................21
4.4 Intentionally Omitted...................................................22
4.5 Properties..............................................................22
4.6 Environmental Matters...................................................23
4.7 Labor Matters...........................................................24
4.8 Taxes...................................................................24
4.9 Compliance with Laws....................................................24
4.10 Brokers.................................................................24
4.11 Assumed Indebtedness....................................................24
4.12 Intentionally Omitted...................................................25
4.13 Assumed Liabilities.....................................................25
4.14 Contracts...............................................................25
4.15 Intentionally Omitted...................................................26
4.16 REAs....................................................................26
4.17 Intentionally Omitted...................................................26
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TABLE OF CONTENTS
(continued)
4.18 Purchased Assets........................................................26
4.19 Intellectual Property...................................................26
4.20 Financial Statements....................................................27
4.21 Budgets.................................................................27
4.22 Insolvency..............................................................27
0.00 Xxxxxx Xxxxxx Person....................................................27
4.24 Definition of Knowledge of Seller.......................................27
4.25 Schedule References.....................................................27
4.26 Right to Amend Representations..........................................28
4.27 Seller's Representations Deemed Modified................................28
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER....................................28
5.1 Organization, Standing and Power of Purchaser...........................28
5.2 Authority; Noncontravention; Consents...................................28
5.3 Brokers.................................................................29
5.4 Funding.................................................................29
5.5 Intentionally Omitted...................................................29
5.6 Purchaser's Representations Deemed Modified.............................30
5.7 Intentionally Omitted...................................................30
5.8 Right to Amend Representations..........................................30
VI. COVENANTS......................................................................30
6.1 Conduct of Seller's Business Pending Transfer...........................30
6.2 Leasing.................................................................32
6.3 Tenant Estoppels........................................................33
6.4 Assumption of Obligations...............................................33
6.5 Other Actions...........................................................34
6.6 No Solicitation.........................................................34
6.7 Intentionally Omitted...................................................34
6.8 Tenant Litigation.......................................................34
6.9 Lender Estoppels........................................................35
6.10 Intentionally Omitted...................................................35
6.11 REA Estoppels...........................................................35
VII. ADDITIONAL AGREEMENTS..........................................................35
7.1 Access to Information; Confidentiality..................................35
7.2 Reasonable Efforts......................................................37
7.3 Public Announcements....................................................37
7.4 Conveyance Taxes........................................................37
7.5 Intentionally Omitted...................................................37
7.6 Capital Improvements....................................................37
7.7 Allocation of Purchase Price............................................38
7.8 Employee Matters........................................................38
7.9 Indemnitor's Acknowledgement and Environmental Insurance................39
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TABLE OF CONTENTS
(continued)
7.10 Appointment of Agent....................................................40
7.11 Company Leases..........................................................40
7.12 Options.................................................................40
7.13 Transitional Services...................................................40
7.14 Matters Relating to Assumed Indebtedness................................40
7.15 Violations..............................................................42
7.16 Dropped Properties......................................................43
7.17 Delivery of Financial Statements........................................43
7.18 Insurance and Other Matters.............................................44
7.19 Post-Closing Access.....................................................44
7.20 Purchaser's Board Approval..............................................44
VIII. CASUALTY AND CONDEMNATION44
8.1 In General..............................................................44
8.2 Minor Loss..............................................................44
8.3 Major Loss..............................................................45
8.4 Additional Matters......................................................45
IX. CLOSING........................................................................46
9.1 Closing.................................................................46
9.2 Conditions To Each Party's Obligation To Effect the Transfer............46
9.3 Conditions To Obligations of Seller.....................................47
9.4 Conditions To Obligations of Purchaser..................................48
X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER.....................................53
10.1 Termination.............................................................53
10.2 Pre-Closing Breaches....................................................53
10.3 Defaults and Remedies...................................................54
10.4 Effect of Termination...................................................55
10.5 Amendment...............................................................55
10.6 Extension; Waiver.......................................................55
10.7 Waiver of Pre-Closing Breaches..........................................55
XI. SURVIVAL; INDEMNIFICATION......................................................55
11.1 Survival of Representations and Warranties..............................55
11.2 Indemnification by Seller...............................................55
11.3 Indemnification by Purchaser............................................56
11.4 Notice and Resolution of Claims.........................................57
11.5 Limitations on Liability................................................57
11.6 Exclusive Remedy........................................................58
11.7 Security for Post Closing Obligations of Seller.........................58
XII. GENERAL PROVISIONS.............................................................58
12.1 Notices.................................................................58
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TABLE OF CONTENTS
(continued)
12.2 Interpretation..........................................................59
12.3 Counterparts............................................................60
12.4 Entire Agreement; Binding Effect; No Third-Party Beneficiaries..........60
12.5 Governing Law...........................................................60
12.6 Assignment..............................................................60
12.7 Enforcement.............................................................60
12.8 Severability............................................................61
12.9 Expenses................................................................61
12.10 No Recordation..........................................................61
12.11 1031 Transaction........................................................61
12.12 Joint and Several Liability.............................................62
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EXHIBITS AND SCHEDULES
Exhibit A-1 - Properties
Exhibit B - Definitions
Exhibit 6.1(n) - Title Affidavits
Exhibit 6.3-1 - Tenant Estoppel Certificates
Exhibit 6.3-2 - Seller Estoppel Certificates
Exhibit 6.4 - Guaranty Indemnity Agreement
Exhibit 6.9 - Lender Estoppel Form
Exhibit 7.13 - Form of Transitional Services Agreement
Exhibit 9.3(c)(iv) - Tenant Notice Letters
Exhibit 9.4(d)(i) - Deed
Exhibit 9.4(d)(ii) - Xxxx of Sale
Exhibit 9.4(d)(iii) - Lease Assignment
Exhibit 9.4(d)(iv) - Contract Assignment
Exhibit 9.4(d)(vi) - Foreign Person Certificate
Exhibit 9.4(d)(xxi) - Tenant Loan Assignment
Exhibit 11.7-1 - Closing Escrow Agreement
Schedule 1.1(a)(i)(A) - Real Property
Schedule 1.1(a)(iii)(D) - Trademarks
Schedule 1.1(a)(iii)(H) - Vehicles
Schedule 1.2 - Excluded Assets
Schedule 2.4(e) - Purchaser Lease Expenses
Schedule 2.7 - Tenant Deposits
Schedule 2.8 Certiorari
Schedule 4.1 - Entities
Schedule 4.2(a) - Exceptions to Authority
Schedule 4.2(b) - Exceptions to Noncontravention
Schedule 4.3 - Litigation
Schedule 4.5(a) - Condemnation and Rezoning Proceedings
Schedule 4.5(b) - List of Lease Documents and Defaults Under
Leases
Schedule 4.5(c)-1 - Leases Not Included on Rent Roll
Schedule 4.5(c)-2 - Lease Terminations
Schedule 4.5(d) - Purchase Options and Rights of First Refusal
Schedule 4.5(e) - Tenant Loans
Schedule 4.5(f) - Insurance on Properties
Schedule 4.5(h) Affiliate Properties (Outparcels)
Schedule 4.6 - Environmental Studies
Schedule 4.9 - Exceptions to Compliance with Laws
Schedule 4.11(a) - Assumed Indebtedness
Schedule 4.14 - Material Contracts
Schedule 4.19 - Intellectual Property of Seller and the
Subsidiaries
Schedule 4.24 - Inquiry Parties
Schedule 5.2(c) - Purchaser Consents
Schedule 6.1 - Purchaser Representative and Seller
Representative
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EXHIBITS AND SCHEDULES
(continued)
Schedule 6.2-1 - Leasing Guidelines
Schedule 6.2-2 - New Leases and Amendments
Schedule 6.3 - Tenants Providing Estoppel Certificates
Schedule 6.4-1 - Proposed Debt Modifications
Schedule 6.4-2 - Required Debt Modifications
Schedule 6.8(b) - Litigation Against Former Tenants
Schedule 7.6-B - Capital Improvement Plans and Budgets
Schedule 7.6-E Septic Problem
Schedule 7.14(d) - Indebtedness Subject to Purchaser's Election
to Treat as Assumed Indebtedness
Schedule 9.4(g) - Required Leases
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PURCHASE AGREEMENT
This
PURCHASE AGREEMENT (this "Agreement"), dated as of October 17, 2002 by
and among RIG XXXX RIVER COMMONS, LLC, a Delaware limited liability company, RIG
PARADISE PAVILION, LLC, a Delaware limited liability company, and RIG HILLTOP
PLAZA, LLC, a Delaware limited liability company (collectively hereinafter
referred to as "Seller"),and NEW PLAN EXCEL REALTY TRUST, INC., a Maryland
corporation ("Purchaser").
RECITALS:
A. Seller owns 100% fee simple interest in the 3 shopping centers
described on Exhibit A-1 (each a "Property" and collectively the "Properties")
which Seller desires to sell.
B. In accordance with the terms and conditions hereof, Seller desires to
sell, transfer, assign, convey and deliver to Purchaser (i) fee simple title to
the Properties together with all other assets, rights, business, goodwill and
other properties with respect to the Properties and Purchaser desires to
purchase and acquire the same from Seller, as set forth herein.
C. The terms used in this Agreement with initial capital letters are
defined in Exhibit B.
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties and covenants contained herein, the parties hereto hereby agree as
follows:
I. PURCHASE OF PURCHASED ASSETS
1.1 SALE AND TRANSFER OF PURCHASED ASSETS. (a) Subject to and upon the
terms and conditions of this Agreement, at the Closing, Seller will sell,
transfer, convey and assign, as applicable, to Purchaser (or its designees, as
applicable), and Purchaser (or its designees, as applicable), will purchase and
acquire from Seller (all such transactions, collectively, the "Transfer") all of
their right, title and interest in the Purchased Assets as hereinafter defined,
free and clear of all liens, charges, claims, security interests, pledges,
rights of first refusal, restrictions and other encumbrances ("Liens"), other
than the Permitted Encumbrances. The assets to be acquired (the "Purchased
Assets") consist of the following:
(i) With respect to the Properties, the following:
(A) the Real Property;
(B) the Improvements;
(C) all of Seller's right, title and interest in and to
the Personal Property related to each Property;
(D) Intentionally Omitted; and
(E) all of Seller's right, title and interest as lessor
in and to the Leases and, subject to the terms of the Leases, the
Tenant Deposits, and guarantees and
other documents and agreements executed by a Tenant or guarantor
related thereto.
(ii) Intentionally Omitted
(iii) To the extent that any of the following was not otherwise
covered in (i) above, with respect to the Properties and the Purchased Assets:
(A) Intentionally omitted;
(B) all of Seller's right, title and interest in and to
the Personal Property owned or used in connection with the Properties
or the Purchased Assets;
(C) all of Seller's right, title and interest, if any,
in, to and under, to the extent assignable or transferable, Licenses
and Permits and the Contracts (including without limitation, any
environmental indemnity agreement that Seller is a beneficiary under)
with and all rights (including rights of refund and offset),
privileges, deposits, claims, causes of action and options relating
or pertaining thereto;
(D) all of Seller's right, title and interest, to the
extent assignable or transferable, in and to the trademarks listed on
Schedule 1.1(a)(iii)(D) and all other Intellectual Property owned or
used by Seller in connection with the Properties or the Purchased
Assets;
(E) all of Seller's right, title and interest, to the
extent assignable or transferable, in and to all warranties,
guaranties, other intangible rights, titles, interests, privileges
and appurtenances owned by Seller and related to or used in
connection with the ownership, construction, use or operation of the
Properties, the Purchased Assets or Improvements;
(F) the Records and Plans, but only to the extent the
Records and Plans are in the possession or control of Seller,
provided that Seller at its sole cost and expense will have the right
at any time as provided in Section 7.19 to make copies of the Records
and Plans which relate to the period prior to the Closing Date to be
used for reasonable purposes;
(G) the goodwill of Seller associated with the
Intellectual Property or which is connected with the use of and
symbolized by any of the Intellectual Property;
(H) all automobiles, trucks, trailers, vans and other
certificated vehicles of Seller whether owned or leased (the
"Vehicles") which are set forth on Schedule 1.1(a)(iii)(H);
(I) to the extent transferable, the benefit of and the
right to enforce the covenants and warranties, if any, that Seller is
entitled to enforce with respect to the Purchased Assets;
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(J) subject to Sections 6.8 and 7.18, all right, title
and interest of Seller in, to and under all rights, privileges,
claims, causes of action and options relating or pertaining to the
Properties or the Purchased Assets;
(K) to the extent transferable, all right, title and
interest of Seller in and to any performance bonds or other bonds,
guaranties and security provided to it by any contractor pursuant to
any construction or other contracts (including without limitation,
any of same with respect to the Redevelopment Properties); and
(L) all other or additional privileges, rights, interests
or properties and assets of every kind and description and wherever
located, that are used or intended for use in connection with or that
are necessary to the continued conduct of the Properties in the
manner that they are being operated.
1.2 EXCLUDED ASSETS. In no event will the Purchased Assets include any of
the assets described in Schedule 1.2 ("Excluded Assets").
1.3 NO ASSUMPTION OF CERTAIN LIABILITIES. Purchaser will purchase the
Purchased Assets free and clear of all Liens other than the Permitted
Encumbrances and will assume no liabilities or obligations (direct or indirect)
of Seller or its Affiliates other than (i) the Assumed Indebtedness, (ii) all
liabilities and obligations of Seller arising from and after the Closing
relating to (x) the Leases (including without limitation, those relating to any
Tenant Deposits delivered to Purchaser or credited against the Purchase Price),
(y) Contracts, and (z) Licenses and Permits, all of (x), (y) and (z) only to the
extent assigned at Closing, and (iii) all liabilities of Seller solely to the
extent that Purchaser received a credit therefore against the Purchase Price
pursuant to Section 2.4 or otherwise in the Agreement (collectively, the
"Assumed Liabilities"). Except for the Assumed Liabilities, Purchaser will not
assume or agree to pay, perform or discharge or be responsible for any
obligation or liability (direct or indirect) related to or arising from the
operation of the Purchased Assets or Properties arising or accruing before the
Closing or any other liabilities, responsibilities or obligations of Seller and
its Affiliates, whether accrued, absolute, contingent or otherwise, including
without limiting the generality of the foregoing, any liabilities or obligations
resulting from or by reason of any event or circumstance occurring prior to the
Closing (including without limitation, the improper application of Tenant
Deposits), any lawsuit or other proceeding or investigation relating to the
Purchased Assets or the Properties arising from events or circumstances prior to
the Closing (other than costs and expenses incurred by Purchaser to pursue
claims against tenants under the tenant litigation assigned to Purchaser under
Section 6.8), or arising out of or by reason of any of the transactions
contemplated by this Agreement other than as a result of Purchaser's failure to
comply with its obligations under this Agreement; such obligations and
liabilities, together with any liability or obligation relating to an Excluded
Asset and Employee Related Liabilities are referred to as the "Pre-Closing
Property Liabilities." Provided, however, Pre-Closing Property Liabilities will
not include any Assumed Liabilities.
1.4 NO REPRESENTATIONS. (a) PURCHASER SPECIFICALLY ACKNOWLEDGES AND
AGREES THAT (i) EXCEPT AS SET FORTH HEREIN OR ON ANY EXHIBIT OR SCHEDULE
ATTACHED HERETO (INCLUDING THE COVENANTS UNDER SECTION 6.1
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AND SELLER'S REPRESENTATIONS SET FORTH HEREIN), OR ANY OTHER CLOSING DOCUMENT
REQUIRED HEREIN, SELLER IS TRANSFERRING THE PURCHASED ASSETS "AS IS, WHERE IS
AND WITH ALL FAULTS" AND (ii) EXCEPT FOR THE REPRESENTATIONS EXPRESSLY SET FORTH
HEREIN, OR ON ANY EXHIBIT OR SCHEDULE ATTACHED HERETO, OR ANY OTHER CLOSING
DOCUMENT REQUIRED HEREIN, PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR
WARRANTIES OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED,
STATUTORY OR OTHERWISE, FROM SELLER OR ANY OF ITS SUBSIDIARIES OR ANY PARTNER,
MEMBER, MANAGER, TRUSTEE, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AFFILIATE,
OFFICER, ATTORNEY, EMPLOYEE, AGENT OR BROKER OF ANY OF THEM, AS TO ANY MATTER,
CONCERNING THE PURCHASED ASSETS, OR SET FORTH, CONTAINED OR ADDRESSED IN ANY DUE
DILIGENCE (INCLUDING WITHOUT LIMITATION, THE COMPLETENESS THEREOF), INCLUDING
WITHOUT LIMITATION: (i) the quality, nature, habitability, merchantability, use,
operation, value, marketability, adequacy or physical condition of any Property
or any aspect or portion thereof, including, without limitation, structural
elements, foundation, roof, appurtenances, access, landscaping, parking
facilities, electrical, mechanical, HVAC, plumbing, sewage, water and utility
systems, facilities and appliances, soils, geology and groundwater, (ii) the
dimensions or lot size of any Property or the square footage of any of the
Improvements thereon or of any tenant space therein, (iii) the development or
income potential, or rights of or relating to, any Property, or the fitness,
suitability, value or adequacy of any Property for any particular purpose, (iv)
the zoning or other legal status of any Property or the existence of any other
public or private restrictions on the use of any Property, (v) the compliance of
any Property or its operation with any applicable codes, laws, regulations,
statutes, ordinances, covenants, conditions and restrictions of any Governmental
Entity or of any other Person (including, without limitation, the Americans with
Disabilities Act of 1990, as amended), (vi) the ability of Purchaser or any
Subsidiary to obtain any necessary governmental approvals, licenses or permits
for the use or development of any Property, (vii) the presence, absence,
condition or compliance of any Hazardous Materials on, in, under, above or about
any Property or any adjoining or neighboring property, (viii) the quality of any
labor and materials used in any Improvements at any Property, (ix) the ownership
of any Properties or any portion thereof, (x) any leases, permits, warranties,
service contracts or any other agreements affecting any Property or the
intentions of any party with respect to the negotiation and/or execution of any
lease or contract with respect to any Property or (xi) the economics of, or the
income and expenses, revenue or expense projections or other financial matters,
relating to the operation of, any Property. Without limiting the generality of
the foregoing, Purchaser expressly acknowledges and agrees that, except as set
forth herein or on any Exhibit or Schedule hereto, or any other closing document
required herein, it is not relying on any representation or warranty of Seller
or any Subsidiary, or any partner, member, director, trustee, officer, employee,
affiliate, attorney, agent or broker of any of them, whether implied, presumed
or expressly provided, arising by virtue of any statute, regulation or common
law right or remedy in favor of any of them. Purchaser further acknowledges and
agrees that except as set forth in the definition of Knowledge of Seller neither
Seller nor any Subsidiary is under any duty to make any inquiry regarding any
matter that may or may not be known to any partner, officer, employee, attorney,
agent or broker of any of them. This Section 1.4 will survive the Closing, or,
if the Closing does not occur, the termination of this Agreement. In addition,
Purchaser
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acknowledges and agrees that no property (real, personal or otherwise) owned by
any Tenant or any other Person is intended to be conveyed hereunder unless that
property is described and purported to be conveyed under this Agreement.
(b) PURCHASER ACKNOWLEDGES AND AGREES THAT ANY REPORTS OBTAINED BY IT OR
ANY OF ITS AFFILIATES ARE THE SOLE RESPONSIBILITY OF PURCHASER SUBJECT TO THE
PROVISIONS OF THIS AGREEMENT, AND, EXCEPT TO THE EXTENT EXPRESSLY REQUIRED
PURSUANT TO THIS AGREEMENT, NONE OF SELLER OR ANY SUBSIDIARY HAS ANY OBLIGATION
TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY PROPERTY OR ANY PORTION
THEREOF OR EXCEPT TO THE EXTENT EXPRESSLY REQUIRED PURSUANT TO THIS AGREEMENT TO
CURE ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER.
1.5 RELEASE OF SELLER. (a) Without limiting the provisions of
Section 1.4, Purchaser, for itself and any of its successors and assigns and
their Affiliates, hereby irrevocably and absolutely waives its right to recover
from, and forever releases and discharges, and covenants not to file or
otherwise pursue any legal action against, any of Seller or its respective
Affiliates or any direct or indirect partner, member, manager, trustee,
director, shareholder, controlling person, Affiliate, officer, attorney,
employee, agent or broker of any of the foregoing, and any of their respective
heirs, successors, personal representatives and assigns (each, a "Seller Party",
and collectively, the "Seller Parties") with respect to any and all suits,
actions, proceedings, investigations, demands, claims, liabilities, fines,
penalties, liens, judgments, losses, injuries, damages, settlement expenses or
costs of whatever kind or nature, whether direct or indirect, known or unknown,
contingent or otherwise (including any action or proceeding brought or
threatened or ordered by any Governmental Entity), including, without
limitation, attorneys' and experts' fees and expenses, and investigation and
remediation costs that may arise on account of or in any way be connected with
the Purchased Assets, or any Property or any portion thereof (collectively,
"Claims"), including, without limitation, the physical, environmental and
structural condition of any Property or any law or regulation applicable
thereto, or any other matter relating to the use, presence, discharge or release
of Hazardous Materials on, under, in, above or about any of the Properties;
provided, however, the foregoing provision of this Section 1.5 shall not apply
with respect to any Claim by Purchaser against (i) any Seller Party for any act
of that Seller Party that constitutes fraud, (ii) Seller or any of its
Subsidiaries for any breach of the representations, warranties or covenants set
forth in this Agreement, subject to the limitations and conditions provided in
Sections 10.2, and Article 11, if applicable, (iii) Seller for its obligations
under this Agreement including, without limitation, Sections 2.4 and 11.2, (iv)
any Seller Party in any action brought against Purchaser by any third party or
(v) any Seller Party for any Pre-Closing Property Liabilities. In addition,
Purchaser covenants and agrees to, and where applicable hereby does, release,
defend, indemnify and hold harmless each of the Seller Parties and their
respective Affiliates from and against any Claims to the extent relating to any
Hazardous Materials that may be placed, located or released on or at any
Property after the Closing Date and during the period of Purchaser's (or any of
its Affiliates') ownership. Purchaser's indemnity obligation set forth in the
immediately preceding sentence shall be limited to its interest in all of the
Purchased Assets. None of Purchaser, its Affiliates or their respective
successors or assigns will be required to indemnify, defend or hold harmless any
Seller Party from any Claims threatened, asserted or commenced against any
Seller Party by any other Person
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(including, without limitation, any Governmental Entity) to the extent, if any,
that such Claim seeks recovery for harm suffered due to Hazardous Materials
placed, located or released on or at any Property before the Closing or prior
to, from or after the Closing with respect to any "offsite" Hazardous Materials
migrating to the Property; provided, however, Purchaser (but not Seller or any
Subsidiary) will be responsible for remediating any such Hazardous Materials at
the Property to the extent that Purchaser is required by Law to perform such
remediation.
(b) In connection with this Section 1.5, Purchaser expressly waives the
benefits of any provision or principle of federal or state law or regulation
that may limit the scope or effect of the foregoing waiver and release.
(c) This Section 1.5 shall survive the Closing indefinitely.
1.6 INTENTIONALLY OMITTED.
II. CONSIDERATION
2.1 PURCHASE PRICE. The purchase price for the Purchased Assets will be
equal to $32,620,175, as may be adjusted in accordance with this Section 2.1 and
the other provisions of this Agreement, including without limitation, Sections
2.4, 2.7, 3.4 (including Section 3.4(g) with respect to Purchaser taking subject
to, and paying off any, Indebtedness that is not Assumed Indebtedness), 7.6,
7.14, 7.15, 7.16, 8.2, 8.3, and 10.2 (the "Purchase Price"). The Purchase Price
is payable at Closing by (i) Purchaser paying in cash an amount equal to the
Purchase Price, less 100% of the principal amount outstanding of the Assumed
Indebtedness as of the Closing Date and (ii) Purchaser assuming or taking the
Purchased Assets subject to the Assumed Indebtedness. The Deposit plus any
interest or other investment income earned thereon will be applied to the
Purchase Price in accordance with the Escrow Agreement. As additional
consideration, Purchaser shall assume or take the Purchased Assets subject to
the Assumed Liabilities. Purchaser shall pay to Seller the Purchase Price in
immediately available funds by wire transfer to an account designated by Seller,
which account must be designated at least 2 Business Days' prior to the Closing
Date.
2.2 ALTERNATE PAYMENT OF PURCHASE PRICE. At Seller's election, instead of
paying cash at the Closing, Purchaser agrees to provide a promissory note in an
amount reasonably agreed to by Purchaser and Seller, for a portion of the cash
portion of the Purchase Price, as adjusted pursuant to the terms hereof. Such
promissory note shall be secured by a letter of credit (which letter of credit
shall be secured by cash (the "Cash Collateral") of the Purchaser held by the
issuing bank). The interest on the promissory note shall be equal to the
investment income on the Cash Collateral from the issuing bank and the note
shall be due on demand at any time in the calendar year 2003. If Purchaser does
not pay off the promissory note within five (5) Business Days of Seller's
written demand, Seller shall be entitled to draw on the letter of credit to pay
off the amount due on the promissory note. Purchaser and Seller shall cooperate
to effect such transaction on terms and conditions reasonably acceptable to both
parties; provided, however, that (A) in no event shall the rights of Purchaser
under this Agreement, including, without limitation, Purchaser's right to
acquire all of Seller's and the Assigning Subsidiaries' right, title and
interest in and to the Purchased Assets free and clear of all Liens other than
the Permitted Encumbrances, be affected by this arrangement and this arrangement
shall not violate any of the
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Assumed Loan Documents; and (B) Purchaser's compliance with the provisions of
this Section 2.2 shall be at Seller's sole cost and expense including, without
limitation, any letter of credit costs, lender's fees and expenses (including
their attorneys' fees), mortgage recording taxes, any imputed interest income
taxes and any other transaction costs incurred in connection therewith, except
with respect to Seller's enforcement of the promissory note after Purchaser
fails to repay same within the five (5) Business Day period. Seller hereby
agrees that if Purchaser delivers the promissory note in accordance with the
provisions this Section 2.2, Purchaser's obligation to deliver the amount of the
cash portion of the Purchase Price equal to the amount of the promissory note
under other Sections of this Agreement shall be deemed to have been satisfied.
2.3 XXXXXXX MONEY. (a) Within one Business Day of the execution of this
Agreement by all parties to this Agreement, Purchaser will deposit with the
Escrow Holder in immediately available funds by wire transfer $25,000 (the
"Deposit"), which will be held in escrow by the Escrow Holder pursuant to the
terms of this Agreement, and in accordance with the terms and provisions of the
Escrow Agreement by and among the Escrow Holder, Seller and Purchaser dated of
even date herewith (the "Escrow Agreement").
(b) In order to assure compliance with the requirements of Section 6045
of the Internal Revenue Code of 1986, as amended (the "Code"), and any related
reporting requirements of the Code, the parties hereto agree as follows:
(i) Provided the Escrow Holder executes a statement in writing
(in form and substance reasonably acceptable to the parties hereunder) pursuant
to which it agrees to assume all responsibilities for information reporting
required under Section 6045(e) of the Code, Seller and Purchaser will designate
the Escrow Holder as the Person to be responsible for all information reporting
under Section 6045(e) of the Code (the "Reporting Person"). If the Escrow Holder
refuses to execute a statement pursuant to which it agrees to be the Reporting
Person, Seller and Purchaser agree to appoint another third party, acceptable to
Seller and Purchaser in their reasonable discretion, as the Reporting Person.
(ii) Each of Seller and Purchaser will:
(A) provide to the Reporting Person all information and
certifications regarding the applicable party, as reasonably
requested by the Reporting Person or otherwise required to be
provided by a party to the transaction described herein under Section
6045 of the Code; and
(B) provide to the Reporting Person the applicable
party's taxpayer identification number and a statement (on Internal
Revenue Service Form W-9 or an acceptable substitute form, or on any
other form the applicable current or future Code sections and
regulations might require and/or any form requested by the Reporting
Person), signed under penalties of perjury, stating that the taxpayer
identification number supplied by the applicable party to the
Reporting Person is correct.
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(iii) Each party will retain this Agreement for not less than
four years from the end of the calendar year in which Closing occurs, and will
produce it to the Internal Revenue Service upon a valid request for this
Agreement.
(iv) The addresses for Seller and Purchaser are as set forth in
Section 12.1, and the real estate subject to the transfer provided for in this
Agreement is described in Schedule 1.1(a)(i)(A).
(c) At the Closing, the Escrow Holder will deliver the Deposit, and
interest and other investment income earned thereon, to Seller as provided in
the Escrow Agreement and Section 2.1.
2.4 PRORATIONS. Prorations will be made with respect to the Assumed
Liabilities and the Purchased Assets as provided in this Article 2.4 without
duplication in each case.
(a) (i) Seller and Purchaser agree to adjust, as of 11:59 p.m. on the day
immediately preceding the Closing Date (the "Proration Time"), the following
(collectively, the "Proration Items"):
(A) Real property taxes and assessments as provided in
Section 2.4(d);
(B) Water rates and charges paid or payable with respect
to the Property, except those required to be paid by Tenants directly
to the entity imposing the rates or charges;
(C) Sewer taxes and rents paid or payable with respect to
the Property, except those required to be paid directly by Tenants to
the entity or authority imposing the taxes and rents;
(D) Accrued interest payable under the Assumed
Indebtedness as provided in Section 2.4(g) but not late fees and
other costs, charges, and past due interest owing to the lender
before the Proration Time, which will be Seller's sole expense;
(E) Amounts, if any, payable or cash received by the
owner of the Property under the REA Agreements, including prepaid
amounts and unpaid amounts;
(F) Annual permit, license and inspection fees, if any,
on the basis of the fiscal year for which levied;
(G) Charges for fuel oil and liquid propane gas, if any,
at the cost per gallon or cubic foot most recently charged to the
owner of the Property, based on the supplier's measurements thereof,
plus sales taxes thereon to the extent applicable;
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(H) Rentals as provided in Section 2.4(b) (other than
payments for Operating Expenses which shall be apportioned as
provided in Section 2.4(c)), including prepaid Rentals;
(I) Amounts payable by or to Seller or the owner of the
Property under a management, development and/or other Contract
relating to the Property as provided in Section 2.4(i) (other than
for the payment of leasing commissions or brokerage fees, which shall
be prorated as provided in Section 2.4(e));
(J) Cash reserves and escrow deposits under any of the
Assumed Indebtedness that are for a specific repair or remediation
that has not been completed at Closing shall be credited against the
Purchase Price, (provided, however, Purchaser shall return to Seller
any amounts in excess of the actual amount spent by Purchaser to
remediate or repair such matter). all other cash reserves and escrow
deposits for real property taxes and assessments, insurance premiums
and other items, made with, or held by, the lender under any of the
Assumed Indebtedness, net, if appropriate, of any allocation to the
same party of the underlying expense for which the reserve is held,
together with so much of any interest earned on the reserve or escrow
deposit as is properly attributable to the allocated amount thereof,
PROVIDED HOWEVER, adjustments for casualty or condemnation proceeds
held by the lender under any of the Assumed Indebtedness will be made
in accordance with Article VIII;
(K) Intentionally Omitted;
(L) Prepaid expenses as provided in Section 2.4(k);
(M) Intentionally Omitted;
(N) Tenant Deposits as provided in Section 2.7;
(O) Personal property taxes and assessments that have
been levied or assessed with respect to any Purchased Asset, whether
or not due and payable, and whether paid or unpaid;
(P) Amounts readily determinable that are payable under
the Assumed Liabilities; and
(Q) Except as set forth below, all other items
customarily apportioned in connection with the transfer of similar
properties similarly located.
(ii) Seller will be charged and credited for the amounts of all
of the Proration Items relating to the period up to and including the Proration
Time, and Purchaser will be charged and credited for all of the Proration Items
relating to the period after the Proration Time. Seller will prepare in good
faith and deliver a statement of estimated Proration Items and other credits and
adjustments to the Purchase Price hereunder (including the principal amount
outstanding of the Assumed Indebtedness as of the Closing Date) to be submitted
to Purchaser no less than 5 Business Days before the Closing Date (the "Closing
Statement"). Upon approval
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by Seller and Purchaser, the preliminary Proration Items and other credits and
adjustments reflected in the Closing Statement will be paid at Closing by
Purchaser to Seller (if the preliminary Proration Items, credits and adjustments
result in a net credit to Seller) or by Seller to Purchaser (if the preliminary
Proration Items, credits and adjustments result in a net credit to Purchaser) by
increasing or reducing the cash to be delivered by Purchaser in payment of the
Purchase Price at the Closing. If the actual amounts of the Proration Items,
credits and adjustments are not known as of the Proration Time, the proration of
the Proration Items, credits and adjustments will be made at Closing on the
basis of the best evidence then available; thereafter, when actual amounts are
determined, re-prorations will be made as provided in Section 2.5 on the basis
of the actual amounts, and a final cash settlement will be made between Seller
and Purchaser. No prorations will be made in relation to insurance premiums, and
Seller's insurance policies will not be assigned to Purchaser other than any
assignment of a claim or proceeds pursuant to Section 7.18 and Article VIII.
Final readings and final xxxxxxxx for utilities will be made if possible as of
the Proration Time, in which event no proration will be made at the Closing with
respect to utility bills. Seller will be entitled to all deposits presently in
effect with the utility providers, and Purchaser will be obligated to make its
own arrangements for deposits with the utility providers, alternatively at
Purchaser's election, Seller shall receive a credit for such deposits and assign
the same to Purchaser. The provisions of this Section 2.4 will survive the
Closing until the Final Closing Adjustment is determined and duly paid and
Seller and Purchaser shall cooperate to produce the Final Closing Adjustment in
accordance with Section 2.5.
(b) Rentals shall be prorated at the Closing in accordance with the
following provisions:
(i) Minimum rent and percentage only rent actually received for
the month in which the Closing Date occurs will be prorated between Seller and
Purchaser as of the Proration Time based on the actual number of days in the
month during which the Closing occurs. Seller will be entitled to all minimum
rent and percentage only rent for the period before the Proration Time and
Purchaser will be entitled to all minimum rent and percentage only rent for the
period from and after the Proration Time.
(ii) Monthly or other payments made by each Tenant based upon
projected or estimated additional rent actually received for the month or other
relevant period in which the Closing Date occurs will be prorated between Seller
and Purchaser as of the Proration Time based on the actual number of days in the
month or other relevant period during which the Closing occurs. Seller will be
entitled to all additional rent for the period before the Proration Time, and
Purchaser will be entitled to all additional rent for the period on and after
the Proration Time. This Section 2.4(b)(ii) will not include any Proration Item
set forth in Section 2.4(c).
(iii) Percentage rent (if any) payable by a Tenant under its
Lease will be prorated as of the Proration Time between Seller and Purchaser on
the basis of the fiscal year set forth in the applicable Lease for the
determination and payment of percentage rent. Such fiscal year for determination
and payment of percentage rent in which the Closing occurs is hereinafter
referred to as the "Applicable Percentage Rent Fiscal Year." Seller will receive
the entire amount of percentage rent with respect to any Applicable Percentage
Rent Fiscal Year ending prior to the Closing or with respect to any Lease that
terminated before the Closing Date, subject
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to the application of Delinquent Rentals, as set forth in Section 2.4(b)(v),
subject to Section 2.4(m). Any amounts collected from a Tenant after Closing
that relate to percentage rents shall be prorated at the end of the Applicable
Percentage Rent Fiscal Year and then quarterly thereafter until the Final
Closing Adjustment, all subject to the application of Delinquent Rentals, as set
forth in Section 2.4(b)(v), subject to Section 2.4(m), and any amount of
percentage rent that Seller is entitled to shall be remitted to Seller at such
time. Purchaser shall, at the reasonable request (based upon a legitimate
concern about the amount of the percentage rent) of Seller and at Seller's sole
cost and expense, conduct an audit of any Tenant for purposes of determining the
amount of percentage rent due for the Applicable Percentage Rent Fiscal Year,
subject however, to a maximum number of 10 such audits. The prorations shall be
based upon the percentage rent collections from Tenants for the Applicable
Percentage Rent Fiscal Year with Seller and Purchaser being credited and charged
with a pro rata share thereof based upon actual number of days in the Applicable
Percentage Rent Fiscal Year before and after the Proration Time.
(iv) All other types of Rentals other than those listed in
Sections 2.4(b)(i), (ii) and (iii) and 2.4(c) (including, specific tenant
xxxxxxxx for work orders, special items performed or provided at the request of
a given Tenant or other specific services) ("Other Rent") received for the month
in which the Closing Date occurs will be prorated based on the actual number of
days in the month during which the Closing Date occurs and Seller will be
entitled to such Other Rent for the period before the Proration Time, and
Purchaser will be entitled to such Other Rent for the period on or after the
Proration Time. All Rentals payable by each Tenant whose Lease commences on or
after the Closing shall belong entirely to Purchaser.
(v) In determining the amounts under Sections 2.4(b)(i)-(iv)
and 2.4(c), this Section will be applied. Rentals are "Delinquent" if they were
not paid when due. Delinquent Rentals will not be prorated and neither Seller
nor Purchaser will receive a credit at Closing for Delinquent Rentals. Purchaser
agrees to use good faith collection procedures with respect to the collection of
any Delinquent Rentals using its normal and customary collection efforts during
the period prior to the Final Closing Adjustment. Delinquent Rental amounts
collected net of enforcement costs that Seller is entitled to under this
Agreement, if any, shall be remitted to Seller quarterly after Closing, subject
to the application of Delinquent Rentals as set forth in this Section 2.4(b)(v),
subject to Sections 2.4(m), (n) and (o). Purchaser will have no liability for
the failure to collect any such amounts and will not be required to conduct
lock-outs or take any other legal action to enforce collection of any such
amounts owed to Seller by Tenants of the Property. All Rentals and other amounts
collected by Seller or Purchaser from and after Closing from each Tenant, will
be applied as of the date of receipt first to current amounts owed by that
Tenant to Purchaser, then to the amounts owed for the month (or other relevant
period) in which the Closing Date occurs, then to all other delinquencies owed
by that Tenant to Purchaser, and thereafter, to delinquencies or other amounts
owed by that Tenant to Seller. Any payment net of enforcement costs received by
Purchaser under a note assigned to Purchaser that was made by a Tenant in
respect of amounts owed under a Lease, excluding any amount specifically
allocated under the note to post-closing periods under such obligations and any
net recovery in respect of the litigation against Tenants assigned to Purchaser
under Section 6.8, excluding any claim for post-closing rents, will be treated
as payment of undesignated Delinquent Rentals for periods before the Closing,
but subject to the application of funds under this Section 2.4(b)(v), subject to
Sections 2.4(m), (n) and (o). Seller may not (and shall not permit its
Affiliates) without
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Purchaser's prior written consent commence a lawsuit against any Tenant after
the date of this Agreement to collect Delinquent Rentals and payments for
Operating Expenses so long as Tenant occupies the space that is the subject of
the Delinquent Rentals and payments for Operating Expenses. The obligations of
Seller under the immediately prior sentence will survive Closing indefinitely.
(vi) Any Rentals or other payments by Tenants delivered to
Seller or its Affiliates after closing with respect to the Properties shall be
promptly remitted to Purchaser to be held by Purchaser for application in
accordance with this Agreement, other than amounts for which Seller is entitled
to after the application of Sections 2.4 (m), (n) and (o), after providing
Purchaser with a specific accounting and reasonable backup for Seller's
application of such payments.
(c) Seller and Purchaser will prorate payments, including estimated
payments, if any, received from Tenants for and expenses related to common area
maintenance, real estate taxes, electricity redistribution and HVAC charges, and
all other operating expenses and tax escalations (collectively, "Operating
Expenses") on the basis of the fiscal year set forth in the applicable Lease for
such items. Such fiscal year for determination of Operating Expenses and
Tenant's obligation to reimburse is hereinafter referred to as the "Applicable
Operating Expense Fiscal Year." Seller will receive all payments of Operating
Expenses with respect to any Applicable Operating Expense Fiscal Year ending
prior to the Closing or with respect to any Lease that terminated before the
Closing Date, subject to the application of Delinquent Rentals as set forth in
this Section 2.4(b)(v), subject to Section 2.4(n). Operating Expense payments
received from a Tenant after Closing that relate to Operating Expenses shall be
prorated at the end of the Applicable Operating Expense Fiscal Year following
the annual reconciliation with Tenants and then quarterly there after until the
Final Closing Adjustment, all subject to the application of Delinquent Rentals,
as set forth in Section 2.4(b)(v), subject to Section 2.4(n), and any amount of
payments for Operating Expenses that Seller is entitled to shall be remitted to
Seller at such time and any amount of Operating Expenses that Purchaser is
entitled to shall be remitted to Purchaser at such time. The prorations shall be
based upon Operating Expenses and collections from Tenants for the Applicable
Operating Expense Fiscal Year with Seller and Purchaser being credited and
charged with a pro rata share thereof based upon actual number of days in the
Applicable Operating Expense Fiscal Year before and after the Proration Time. If
Seller provides Purchaser with all documentation, bills, and backup necessary or
requested by Purchaser, Purchaser agrees to xxxx Tenants monthly after the end
of the Applicable Operating Expense Fiscal Year for 2002 Operating Expenses
reconciliations due for the Applicable Operating Expense Fiscal Year for 2002.
(d) All real estate taxes and assessments applicable to the year in which
the Closing Date occurs that are paid prior to the Proration Time will be
prorated based upon the amounts actually paid. If taxes and assessments for the
year in which the Closing Date occurs or any prior year have not been paid
before Closing, Seller will be charged at Closing an amount equal to that
portion of such taxes and assessments which relate to the period before Closing,
assuming for this purpose that payment would be made so as to secure all
available discounts (if available after Closing), and Purchaser will pay the
taxes and assessments prior to their becoming delinquent. Any such apportionment
made with respect to a tax year for which the tax rate or assessed valuation, or
both, have not yet been fixed shall be based upon the tax rate and an
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assessed valuation last fixed. After taxes and assessments are known,
adjustments, if needed, will be made between the parties. Purchaser will be
responsible for all installments of special assessments due for any period after
the Closing.
(e) Purchaser shall receive a credit for any and all Lease Expenses to
the extent that they have been incurred (or will be incurred under any signed
Lease) but not paid by Seller or the owner of the Property prior to Closing and
to the extent that Seller has not executed prior to Closing a Lease for any
space set forth in Schedule 2.4(e), Purchaser will receive a credit against the
Purchase Price for future Lease Expenses to be incurred by Purchaser in the
amount allocated to the unleased space as set forth in Schedule 2.4(e) and
Purchaser will assume at Closing liability for all Lease Expenses related to
such space regardless of the actual amount thereof. Each party will make
available to the other all records, bills, vouchers and other data in such
party's control verifying Lease Expenses and the payment thereof.
(f) There will be no proration of any promotional or publicity charges or
other costs and expenses paid from any promotional fund or by any merchants'
association held by Seller or any Subsidiary or its managing agent on the
Closing Date, except that Seller or any Subsidiary shall be responsible for
funding, on or before the Closing Date, any amounts Seller or any Subsidiary is
obligated to fund prior to such date pursuant to any agreements by which Seller
or any Subsidiary is bound relating to the Properties. On the Closing Date,
Seller shall deliver to Purchaser the balance of any promotional fund and all
funds of any merchants' association then held by Seller or any Subsidiary or its
managing agent, including funds derived from payments made by Tenants and funds
derived from optional or mandatory contributions by Seller or any Subsidiary, or
at Seller's election, Seller shall give Purchaser a credit against the Purchase
Price therefor.
(g) Accrued interest payable under the Assumed Indebtedness (excluding
unpaid late fees and other costs, charges, and past due interest for which
Purchaser will receive a credit) for the period in which the Closing Date occurs
will be prorated between Purchaser and Seller as of the Proration Time.
(h) Intentionally Omitted.
(i) Amounts received or payable under the Contracts will be prorated
between Seller and Purchaser as of the Proration Time based on the actual number
of days in the month (or other applicable period under such Contract) during
which the Closing occurs. All amounts received or payable under the Contracts
accruing prior to the Proration Time will be credited to or the obligation of
Seller. Purchaser shall be credited with or be responsible for all amounts
received or payable under the Contracts accruing on and after the applicable
Proration Time.
(j) Intentionally Omitted.
(k) Seller will be credited with an amount equal to all prepaid costs,
expenses, charges and fees paid by Seller with respect to any Property and
attributable to any period after the applicable Proration Time so long as
Purchaser is assigned the benefit of the prepayment (excluding any insurance
premiums, for which there will be no pro-ration).
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(l) Seller will be credited with an amount equal to all security
deposits, prepaid rentals and other deposits paid or deposited with any ground
lessor of a Property under the applicable ground lease or to any other person on
the ground lessor's behalf, together with any interest that has accrued thereon.
(m) For a period of 90 days following the later of the date when (x) such
percentage rent is due under any Lease for the Applicable Percentage Rent Fiscal
Year or (y) if applicable, such tenant reports its sales with respect to the
Applicable Percentage Rent Fiscal Year, any percentage rent payments for such
period, that are made after Closing and are specifically identified as same by
the Tenant or are readily identifiable for same, such amounts will not be
treated as part of the application of Rentals to Delinquent Rentals under
Section 2.4(b)(v), but prorated under Section 2.4(b)(iii) and remitted to the
party that is entitled to same without regard to the application of Rentals to
Delinquent Rentals.
(n) For a period of 90 days following the date when Purchaser sends a
Tenant a xxxx for Operating Expenses reconciliations under any Lease for the
Applicable Operating Expense Fiscal Year, any Operating Expenses payments for
such period that are made after Closing and are specifically identified as same
by the Tenant or are readily identifiable for same, such amounts will not be
treated as part of the application of Rentals to Delinquent Rentals under
Section 2.4(b)(v), but prorated under Section 2.4(c) and remitted to the party
that is entitled to same without regard to the application of Rentals to
Delinquent Rentals. Such 90 day period shall be tolled during any Tenant dispute
of such amount billed for Operating Expenses until such dispute is settled.
(o) For a period of 60 days following the Closing, any base monthly
Rentals that are made after Closing and are specifically identified as relating
to a period prior to the Closing by the Tenant, such amounts will not be treated
as part of the application of Rentals to Delinquent Rentals under Section
2.4(b)(v), but remitted to the Seller without regard to the application of
Rentals to Delinquent Rentals.
2.5 PREPARATION OF FINAL STATEMENT. On or before 30 days following the
last day of the 12th full calendar month following the Closing Date (or the 15th
full calendar month following the Closing Date if the Closing Date is in 2003)
or such later date as is mutually agreed by the Seller and the Purchaser, the
Purchaser will prepare and deliver to the Seller a final unaudited statement of
Proration Items and other credits and adjustments to the Purchase Price as of
the Proration Time (the "Final Statement"), based on information available as of
the last day of the 12th full calendar month following the Closing Date (or the
15th full calendar month following the Closing Date if the Closing Date is in
2003) or such later date as is mutually agreed by the Seller and the Purchaser
(the "Final Adjustment Date"). Seller will afford Purchaser and its
representatives and auditors the opportunity at reasonable times and upon
reasonable prior notice to review with Purchaser all underlying financial
records and work papers pertaining to the preparation of the Final Statement
within its control. Subject to Section 2.6, any net adjustment in favor of
Purchaser will be paid in cash by Seller to Purchaser no later than 10 days
after delivery of the Final Statement. Subject to Section 2.6, any net
adjustment in favor of Seller will be paid in cash by Purchaser no later than 10
days after delivery of the Final Statement. The Final Statement may be audited
at either party's request as provided in Section 2.6. The payments made under
the Final Statement will be the "Final Closing Adjustment."
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2.6 AUDIT. If Purchaser and Seller do not agree on the computation of the
Proration Items and other credits and adjustments to the Purchase Price in the
Final Statement, then each party will prepare its own calculation of the Final
Statement and such calculations will be submitted to a firm of independent
accountants of nationally recognized standing reasonably satisfactory to
Purchaser and Seller (who shall have no material relationship with Seller or
Purchaser) promptly to review this Agreement and the disputed items or amounts
for the purpose of calculating the Final Statement. In making that calculation,
the firm of independent accountants will include the non-disputed items and
amounts set forth in each parties' calculation of the Final Statement, and shall
consider affirming or adjusting only those items or amounts in the calculation
of the Final Statement as to which the parties have disagreed and any items and
amounts affected by those disputed items and amounts. The firm of independent
accountants will deliver to Purchaser and Seller, as promptly as practicable, a
report setting forth its calculation of the Final Statement. That report will be
final and binding upon Purchaser and Seller. The cost of the independent
accountants' review and report will be borne by (i) Purchaser if the difference
between the Final Statement (prepared by the independent accountants) and
Purchaser's calculation of the Final Statement delivered pursuant to this
Section 2.6 is greater than the difference between the Final Statement (prepared
by the independent accountants) and the Seller's calculation of the Final
Statement delivered pursuant to Section 2.6, (ii) Seller if the first such
difference is less than the second such difference, and (iii) by Purchaser and
Seller equally if the first such difference is equal to the second such
difference. Purchaser will, and will cause Purchaser's independent accountants
to, cooperate and assist Seller in their calculation of the Final Statement and
in the conduct of the audits and reviews referred to in this Section 2.6,
including without limitation, making available to Seller to the extent necessary
of books, records, work papers and personnel. If the Final Statement reflects a
net adjustment in favor of Seller, Purchaser will pay to Seller the amount of
that adjustment in cash to Seller no later than 10 days after the determination
of the Final Statement. If the Final Statement reflects a net adjustment in
favor of Purchaser, Seller will pay to Purchaser the amount of that adjustment
in cash to Purchaser no later than 10 days after the determination of the Final
Statement.
2.7 TENANT DEPOSITS. The unapplied portion of any Tenant Deposits as of
the date of the Rent Roll that have been paid to the owner of each Property or
are held by agents of the owner of each Property on its behalf (or that were
deposited with any predecessor in interest to the owner to the extent the
predecessor has turned over security deposits to the owner or given the owner a
credit therefor) by any Tenants or contractors are in the form of cash, except
for any letters of credit or other similar instruments set forth in Schedule
2.7. To the extent any Tenant Deposits are held by Seller or a Subsidiary or any
security deposit has been applied in violation of Section 6.1(r), Seller shall,
as applicable, pay to Purchaser, in cash, or credit against the Purchase Price
the aggregate amount of any such Tenant Deposits (or transfer any letters of
credit or other non-cash Tenant Deposits) and the amount applied in violation of
Section 6.1(r). Purchaser hereby indemnifies and agrees to defend Seller and the
Seller Parties for, and agrees to defend and hold Seller and the Seller Parties
harmless from and against, any and all claims, liabilities, costs and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
imposed upon or incurred by Seller and Seller Parties with respect to the Tenant
Deposits actually paid over or assigned to Purchaser pursuant to this Section,
or with respect to the application thereof by Purchaser subsequent to Closing.
Seller will be entitled to retain as its property its percentage of any interest
accrued on any Tenant Deposits prior to Closing except to the extent such
interest is required to be paid to any Tenants pursuant to their respective
Leases
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or the depositing contractor. Seller will use its reasonable efforts to cause
all letters of credit to be assigned or re-issued to Purchaser at the Closing
and will continue to assist Purchaser after the closing to cause such letters of
credit to be re-issued if they are not assignable.
2.8 CERTIORARI. Schedule 2.8 identifies all proceedings for certiorari or
other proceedings to determine the assessed value of the Properties or the real
property taxes payable with respect to the Properties which have been or may be
commenced prior to the Closing Date hereof and may be continuing as of the
Closing Date. Purchaser will be entitled to control the prosecution of any
proceeding or proceedings for the years prior to and including the year in which
the Closing occurs to completion and to settle or compromise any claim therein.
Purchaser will keep Seller informed on a timely basis on all matters with
respect to any proceedings and seek Seller's reasonable consent and approval to
the extent required in this Section 2.8. The parties hereto agree to cooperate
with each other and to execute any and all documents reasonably requested by the
other party in furtherance of the foregoing. With respect to any awards for the
years prior to the year of the Closing, Purchaser will be entitled to first
recover the reasonable costs it has expended in obtaining any awards and
thereafter, Seller will be entitled to the remainder of the awards, subject to
Seller's obligation to rebate any portion of those amounts to Tenants. With
respect to any awards for the year in which the Closing occurs, Purchaser will
be entitled to first recover the reasonable costs it has expended in obtaining
any awards and Seller shall then be entitled to recover the reasonable costs it
has expended in obtaining any awards, and thereafter, Seller and Purchaser will
apportion the remainder of any awards between the period before the Closing and
the period following the Closing, subject to their obligation to rebate any
portion of those amounts to Tenants. In connection with the foregoing, Seller
agrees to assign, subject to the provisions of this Section 2.8, to Purchaser at
the Closing all of Seller's right, title and interest to the foregoing
certiorari proceedings that are for the year in which the Closing occurs and all
refunds relating thereto and cooperate with Purchaser with respect thereto.
Purchaser will promptly remit to Seller any monies received which are to be paid
to and/or shared by Seller as provided herein. Purchaser will not settle or
compromise any proceeding that involves a tax year prior to and including the
year in which the Closing occurs, without the consent of Seller, such consent
not to be unreasonably withheld, delayed or conditioned. The provisions of this
Section 2.8 will survive the Closing until all proceedings with respect to the
tax year of the Closing and prior years are resolved.
2.9 EFFECT OF CLOSING. If the Closing occurs, for all legal, accounting
and tax purposes (to the extent permitted under the applicable tax Laws), the
Closing will be deemed to be effective as of the Proration Time.
III. DUE DILIGENCE, TITLE AND OTHER PROPERTY RELATED MATTERS
3.1 PURCHASER'S INSPECTIONS AND DUE DILIGENCE. (a) Prior to the date
hereof Purchaser has conducted and after the date hereof will continue to
conduct its economic, title, survey, environmental, legal, physical, and
structural examinations, inspections, testing, studies and investigations of the
Properties (collectively, the "Due Diligence"). Except for any limitations as
may be imposed by this Section 3.1 and Section 3.2 below, Purchaser may conduct
such Due Diligence as it deems necessary or appropriate, and examine and
investigate to its full satisfaction the facts, circumstances, and matters
relating to the Due Diligence. The Due
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Diligence will be at Purchaser's sole cost and expense, except as otherwise
expressly provided in Section 12.9.
(b) Notwithstanding anything herein to the contrary, if Purchaser, in
Purchaser's sole discretion, shall determine for any reason that Purchaser is
not entirely satisfied with the results of Purchaser's Due Diligence, Purchaser
shall have the right to elect either or both of the following: (i) drop the
Property that it is not satisfied with by giving written notice to Seller prior
to 5:00 P.M. (EST) on, or prior to, the last day of the Contract Due Diligence
Period; or (ii) upon the expiration of the Contract Due Diligence Period without
Purchaser having terminated this Agreement as provided above, the Deposit shall,
subject to the provisions of this Agreement, be at risk and shall not be
refundable to Purchaser except as expressly set forth in this Agreement.
3.2 SITE VISITS. (a) Purchaser and its authorized agents, contractors,
consultants and representatives (the "Consultants") will have reasonable access
to the Properties on at least 2 Business Days' prior notice to Seller during
reasonable times as mutually agreed upon by Seller and Purchaser solely for the
purpose of performing its Due Diligence, including, inspecting the physical,
environmental and structural condition of the Properties and conducting
non-intrusive physical inspections and tests (physically intrusive shall not
mean activities that to a DE MINIMIS extent may cause a restoration obligation
under this Agreement or involve taking minor sampling of building materials and
the roofs and sampling for asbestos); provided, however, that such inspections
or tests will not unreasonably disrupt or disturb (x) the ongoing operation of
the Properties; (y) any services to the Properties; or (z) the quiet possession
of any Tenants under Leases. Such notice shall describe the scope of the Due
Diligence Purchaser intends to conduct during Purchaser's access to the
Properties. Seller will make reasonable efforts to have an agent available to
accompany Purchaser or any Consultants, and in all events Seller shall have the
right to have a representative present during any visits to or inspections of
any Properties. Purchaser may request any and all publicly available information
about the Properties from Governmental Entities but will not disclose to any
Governmental Entity the results of any inspection, sampling or testing conducted
at any Property without Seller's prior written consent except to the extent
required by Laws. If Purchaser desires to conduct any physically intrusive Due
Diligence, such as sampling of soils, other media, building materials, or the
like, Purchaser will identify in writing exactly what procedures Purchaser
desires to perform and request Seller's express written consent. Seller may
withhold or condition consent to any physically intrusive Due Diligence in
Seller's sole and absolute discretion (other than with respect to roof samples
and core samples of the asphalt on parking lots for which Seller's approval
shall not be unreasonably withheld or delayed), and in no event will Purchaser
be permitted to perform any Phase II environmental inspection of any Property
without Seller's consent which can be withheld in its sole discretion. If Seller
objects to the procedures requested by Purchaser, Seller will describe the basis
for its objection to Purchaser and may (but will not be obligated to) propose to
Purchaser a reasonable alternative for resolving the issue giving rise to the
request for intrusive Due Diligence. Upon receipt of Seller's written consent,
if granted, Purchaser and all Consultants shall, in performing the Due
Diligence, comply with the agreed upon procedures and with any and all Laws
applicable to the Properties and will not engage in any activities that would
violate any Licenses and Permits or Laws in any material respect. Purchaser and
any Consultants will: (a) promptly pay when due the costs of all entry and
inspections and examinations done with regard to the Properties and (b) restore
the Properties to the condition in
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which the same were found before any such entry upon the Properties and
inspection or examination was undertaken, but in no event later than 10 days
after such damage occurs.
(b) Purchaser may not communicate or conduct interviews with any
employee, lender, partner or joint venturer of Seller or any tenant of any of
the Properties without the prior consent of Seller, which consent will not be
unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing,
Purchaser may communicate with those certain employees of Seller that are
designated by Seller, but such communication shall be solely for the purpose of
performing the due diligence contemplated herein. If Seller does consent to any
such interviews of its or the Subsidiaries' employees, lenders, partners, or
joint venturers or the tenants of the Properties, such interviews shall not
unreasonably disrupt or disturb (i) the on-going operation of the Properties,
Seller, (ii) any services to the Properties, or (iii) the quiet possession of
any Tenants under the Leases. Seller will have the right to have a
representative of Seller present at all times during any interviews with any
employee, lender, partner or joint venturer or any tenant of any of the
Properties.
3.3 DUE DILIGENCE INDEMNITY. PURCHASER SHALL KEEP THE PROPERTIES FREE
FROM ALL LIENS AND DEFEND, INDEMNIFY, AND HOLD HARMLESS SELLER AND THE SELLER
PARTIES FROM AND AGAINST ALL CLAIMS, ACTIONS, LOSSES, LIABILITIES, DAMAGES,
COSTS AND EXPENSES, WHETHER ARISING OUT OF INJURY OR DEATH TO PERSONS OR DAMAGE
TO ANY PROPERTY, INCLUDING ANY PROPERTY OF TENANTS UNDER LEASES OR OTHERWISE AND
INCLUDING BUT NOT LIMITED TO, REASONABLE ATTORNEYS' FEES AND COSTS INCURRED,
SUFFERED BY, OR CLAIMED AGAINST SELLER OR ANY SUBSIDIARY CAUSED BY (i)
PURCHASER'S OR ANY OF ITS CONSULTANTS ENTRY UPON THE PROPERTIES AND ANY DUE
DILIGENCE ACTIVITIES PURSUANT TO SECTION 3.2 INCLUDING BUT NOT LIMITED TO, THE
COSTS OF REMEDIATION, RESTORATION AND OTHER SIMILAR ACTIVITIES, MECHANIC'S AND
MATERIALMEN'S LIENS AND ATTORNEYS FEES, ARISING OUT OF OR IN CONNECTION WITH THE
EXERCISING OF PURCHASER'S RIGHTS UNDER SECTION 3.2; PROVIDED, HOWEVER, THAT
PURCHASER SHALL HAVE NO DUTY TO DEFEND OR INDEMNIFY SELLER OR ANY SELLER PARTY
FOR ANY LOSSES EXCEPT TO THE EXTENT CAUSED OR CONTRIBUTED TO, BY PURCHASER OR
ITS CONSULTANTS, AND (ii) ANY BREACH OF SECTION 3.2 BY PURCHASER OR ANY
CONSULTANT OR ANY OF THEIR RESPECTIVE, AGENTS OR REPRESENTATIVES. THE PROVISIONS
OF THIS SECTION 3.3 SHALL SURVIVE THE CLOSING OR, IF THE TRANSFER IS NOT
CONSUMMATED, ANY TERMINATION OF THIS AGREEMENT, AND SHALL NOT BE SUBJECT TO ANY
LIMITATION OF LIABILITY SET FORTH HEREIN.
3.4 TITLE. (a) Prior to the expiration of the Contract Due Diligence
Period, Purchaser shall obtain new title commitments (each a "Title Commitment,"
and collectively the "Title Commitments") proposing to insure Purchaser (or its
permitted designee) with respect to each of the Properties, and updated or new
surveys (the "Surveys") for the Properties.
(b) Without limiting Purchaser's rights in Section 3.1, after the
expiration of the Contract Due Diligence Period and prior to the Closing,
Purchaser shall have the right to object in writing to any Material Title
Defects, which objection shall include the Purchaser's Cure
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Value for the same. All Material Title Defects (that are objected to by
Purchaser in accordance with this Section 3.4 (b)), shall be the "Title
Objections" and individually a "Title Objection." At Closing, all matters which
affect the Seller's title to the Properties that are not the subject of a Title
Objection shall be deemed to constitute Permitted Encumbrances, other than the
Liens that Seller is obligated to pay or discharge under Section 3.4(f) and
title matters that Seller agreed in writing to cure during the Contract Due
Diligence Period. In addition, if Seller has delivered written notice to
Purchaser of any Material Title Defect (clearly stating that same is a "Material
Title Defect") and Purchaser fails to object to that Material Title Defect on or
before the 5th Business Day after receipt of such notice from Seller, then that
Material Title Defect will constitute a Permitted Encumbrance, provided,
however, matters covered by Section 3.4(f) and title matters that Seller agreed
in writing to cure during the Contract Due Diligence Period shall not be subject
to the foregoing.
(c) With respect to any Title Objection, Seller may elect (subject to
Section 3.4(f)), by written notice to Purchaser within 10 days after receipt of
Purchaser's Title Objection (or notice of Purchaser's Cure Value for same,
whichever is later), any one of the options described in the next sentence with
respect to each such Title Objection. In Seller's sole and absolute discretion,
Seller may elect any combination of the following (i) cure certain Title
Objections, or (ii) elect not to cure one or more Material Title Defects such
that there are still Material Title Defects. If Seller fails to timely deliver a
notice regarding its method of cure, it will be deemed to have made the election
in clause (ii) for all Material Title Defects.
(d) If Seller elects or is deemed to have elected option (ii) under
Section 3.4(c) not to cure any Material Title Defects and there are Material
Title Defects, or Seller elected to cure such Material Title Defects, but has
failed to cure same at or prior to the Closing Date, Purchaser may elect, by
delivery of notice to Seller within 5 Business Days after receipt of Seller's
notice or deemed election (or on the Closing Date, if applicable), any
combination of the following options (if Purchaser fails to deliver notice of
its election hereunder, Purchaser will be deemed to have made the election in
clause (ii) below with respect to a reduction in the Purchase Price):
(i) drop one or more Properties that are so affected by a
Material Title Defect;
(ii) waive such Material Title Defects, in which event such
Material Title Defects shall be deemed Permitted Encumbrances, and proceed to
Closing without any reduction of or credit against the Purchase Price with
respect to the matters that were waived.
(e) Intentionally Omitted.
(f) Notwithstanding anything in this Section 3.4 to the contrary, Seller
shall (i) at Closing cause the release of all Liens securing Indebtedness for
borrowed money which is not part of the Assumed Liabilities, and any and all
other consensual monetary Liens upon any Property by Seller or its Affiliates,
(ii) at or before Closing cause the release of or bond off all, mechanic's,
materialmen's and artisan's liens placed upon the Properties by a third party in
connection with work performed on the applicable Property on behalf of Seller
(unless placed upon the Property on behalf of Purchaser or a Tenant who is in
good standing and the Lien only affects the Tenant's property) and any and all
judgment liens (other than lis pendens), and such
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liens shall not be Permitted Encumbrances and (iii) at Closing cause the release
of all voluntary encumbrances placed upon the Properties by Seller or its
Affiliates after the date hereof.
(g) Notwithstanding anything herein to the contrary, if on the Closing
Date, there still exists a Title Objection) that Seller has agreed to cure or
remove (or any other title matter Seller agreed in writing to cure or remove or
any matter under Section 3.4(f) is not satisfied, Purchaser, shall have the
right to use a portion of the Purchase Price to satisfy such matter, if such
matter is in a liquidated amount, and the amount paid to cure such matter shall
be credited against the Purchase Price, including, without limitation, for any
loans which are not Assumed Indebtedness. In addition, if at Closing, there
still exists a voluntary lien under Section 3.4(d)(iii), that is not in a
liquidated amount, then Purchaser shall have the right to drop such Property at
the Closing unless Seller otherwise agrees to give a credit for such amount
against the Purchase Price.
(h) For purposes of Section 3.4, Seller can cure any objectionable matter
or defect by satisfying, otherwise correcting or causing a title company to
reasonably insure over the objectionable matter or defect (collectively referred
to in this Section 3.4 as "curing" or to "cure").
(i) To the extent any time period permitted pursuant to Sections 3.4(b),
(c), (d) and (g) would extend beyond the then scheduled Closing Date, the
Closing Date shall be extended to allow for the proper delivery of notices and
election of procedures under the time frames set forth in Sections 3.4(b), (c),
(d) and (g), subject to a maximum extension of 30 days (together with all other
extensions under Sections 10.2).
IV. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
4.1 ORGANIZATION AND POWER OF SELLER. Each of the entities set forth on
Schedule 4.1 are corporations, limited partnerships, limited liability
companies, trusts or real estate investment trusts, as specified on Schedule
4.1, are duly formed and validly existing under the Laws of the corresponding
states specified on Schedule 4.1, and each of them has the requisite limited
partnership, limited liability company, corporate, trust or real estate
investment trust power and authority, as applicable, to carry on its business as
now being conducted. Seller and each Subsidiary is duly qualified or licensed to
do business as a foreign limited partnership, limited liability company,
corporation or real estate investment trust, as applicable, and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing or
good standing necessary.
4.2 AUTHORITY; NONCONTRAVENTION; CONSENTS. (a) Except as set forth in
Schedule 4.2(a), Seller, has the requisite power and authority (i) to enter into
this Agreement and all documents contemplated hereunder to be entered into by
Seller, (ii) to perform its obligations hereunder and thereunder and (iii) to
consummate the Transfer and the other transactions contemplated hereunder and
thereunder. Except as set forth in Schedule 4.2(a), the execution and delivery
by Seller of this Agreement and all documents contemplated hereunder to be
executed and delivered by Seller and the consummation by it of the transactions
contemplated hereunder and thereunder have been duly authorized by all necessary
company, entity or
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partnership action, and no other company, entity or partnership proceedings on
the part of Seller or its partners, shareholders or members are necessary to
authorize any of the foregoing. This Agreement has been, and all documents
contemplated hereunder to be executed by Seller, when executed and delivered
will have been, duly executed and delivered by Seller and shall constitute the
valid and binding obligation of Seller enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws relating to the
enforcement of creditors' rights and by general principles of equity.
(b) Except as set forth in Schedule 4.2(b) and assuming receipt of the
consents described in Schedule 4.2(a), the execution and delivery by Seller of
this Agreement and all documents contemplated hereunder to be executed and
delivered by Seller does not, and the consummation of the transactions
contemplated hereunder and thereunder and compliance by Seller with the
provisions hereof and thereof will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a penalty, or a right of termination, cancellation or
acceleration of any material obligation or to loss of a material benefit under,
or result in the creation of any Lien upon any of the Purchased Assets under (i)
the constituent organizational documents, as amended or supplemented, of Seller,
(ii) any loan or credit agreement, note, bond, mortgage, indenture, lease,
management or other material agreement or instrument applicable to the
Properties or the Purchased Assets and constituting Assumed Liabilities but
excluding any Liens under the Assumed Indebtedness, or (iii) any judgment,
order, decree, statute, law, ordinance, rule or regulation (collectively,
"Laws") applicable to Seller with respect to the Properties or the Purchased
Assets, other than, in the case of clause (ii) or (iii), any such conflicts,
violations, defaults, rights, loss or Liens that individually or in the
aggregate, would not materially adversely affect the to the Properties or the
Purchased Assets or impair or interfere in any material respect with the
consummation of the Transfer or any other transactions contemplated by this
Agreement or in the documents contemplated to be executed hereunder or otherwise
prevent Seller from performing its obligations hereunder in any material
respect. Solely for purposes of this Section 4.2(b), the definition of Purchased
Assets will not include any reference to the phrase "to the extent assignable or
transferable".
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any federal, state or local government or any court,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign (a "Governmental Entity"), is required
by or with respect to the Properties or the Purchased Assets in connection with
the execution and delivery by Seller of this Agreement and Seller of all
documents contemplated hereunder or the consummation by Seller of the
transactions contemplated hereunder or thereunder, except for such consents,
approvals, orders, authorizations, registrations, declarations and filings
which, if not obtained or made, would not reasonably be expected to prevent or
delay in any material respect the consummation of the Transfer or any other
transactions contemplated by this Agreement or in the documents contemplated to
be executed hereunder or otherwise prevent from performing its obligations
hereunder in any material respect.
4.3 LITIGATION. Except as set forth in Schedule 4.3 and except for
routine personal injury litigation arising from the ordinary course of
operations of Seller and which are covered
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by adequate insurance, there is no suit, action, proceeding or investigation
pending or, to the Knowledge of Seller, threatened against or affecting the
Properties or the Purchased Assets or that, individually or in the aggregate, if
decided adversely to the Properties or the Purchased Assets, would reasonably be
expected to prevent or delay in any material respect the consummation of the
Transfer and any other transactions contemplated by this Agreement or otherwise
prevent Seller from performing its obligations hereunder in any material respect
or would result in a material Loss. Except as set forth on Schedule 4.3, as of
the date hereof there is no litigation pending against Tenants commenced by
Seller or any Subsidiary. Except as set forth in Schedule 4.3, there is no
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator or settlement agreement outstanding against Seller or any Subsidiary
with respect to the Properties or the Purchased Assets that remain unsatisfied
or uncured.
4.4 INTENTIONALLY OMITTED.
4.5 PROPERTIES. (a) Except as set forth in Schedule 4.5(a), Seller has no
Knowledge of and has not received any written notice to the effect that any
condemnation or involuntary rezoning proceedings are pending or threatened with
respect to any of the Properties.
(b) The rent rolls delivered pursuant to a separate disclosure statement
(the "Rent Roll") list each Lease in effect as of the dates of the Rent Roll. To
the Knowledge of Seller, the Rent Roll is true, correct and complete as of the
date thereof except no representation or warranty is made with respect to the
commencement or expirations dates set forth therein or the legal names of any
Tenant set forth therein. Except as entered into by Seller pursuant to the
express terms of Section 6.2 and except as set forth on Schedule 4.5(c)-1
hereof, no Leases shall exist on the Closing Date other than the Leases listed
on the Rent Roll. "Lease" means each lease or other right of occupancy affecting
or relating to a Property in which Seller is the landlord, either pursuant to
the lease agreement or as successor to any prior landlord, but shall not include
subleases, franchise agreements, concession agreements or similar occupancy
agreements entered into by Tenants or subtenants which by their nature are
subject to Leases. Seller has made available to Purchaser true, correct and
complete copies of all Leases in its or its Affiliates possession, including all
amendments, modifications, renewals, extensions and guarantees and supplements,
and other occupancy agreements and outstanding default notices sent during the
prior 12 calendar months with respect to the Leases. With respect to all Leases
with a gross leasable area of 10,000 square feet or more, and to Seller's
Knowledge with respect to all other Leases, Seller has made available to
Purchaser true, correct and complete copies of all Leases, including all
amendments, modifications, renewals, extensions and guarantees and supplements,
and other occupancy agreements and outstanding default notices sent during the
prior 12 calendar months with respect to the Leases, in each case as set forth
on Schedule 4.5(b) (subject to the missing documents as set forth on Schedule
4.5(b)). Each tenant under the Leases is a bona fide tenant in possession or has
a right to possession of the premises demised thereunder. Each of the Leases is
in full force and effect and, except as disclosed on the Rent Roll, or on
Schedule 4.5(b), to Seller's Knowledge none of the Leases has been modified,
amended or rescinded, the rights of each tenant thereunder are as tenants only,
and none of the Leases has been assigned or sublet by the tenant. Schedule 2.7
discloses all security and other deposits made by each of the tenants under the
Leases which have not been applied as of the date of the Rent Roll. Seller has
not received any advance payment of rent (other than for the current month) on
account of any of the Leases except as shown on Schedule 4.5(b). All of the
Leases
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are assignable by Seller as contemplated by this Agreement after giving effect
to the repayment of Indebtedness contemplated under this Agreement without the
consent of any other party other than the lenders under the Assumed
Indebtedness. Except as set forth in Schedule 4.5(b), to the Knowledge of
Seller, Seller is not in material breach or default under (and to the Knowledge
of Seller there does not exist any condition which upon the passage of time or
the giving of notice or both would cause a violation or default of any material
term by Seller under, other than obtaining the consents contemplated hereunder)
any Lease to which it is a party, which breach or default remains uncured, and
Seller has not received written notice that it is in material breach or default
under any Lease to which it is a party, which breach remains uncured.
Notwithstanding the foregoing representations, Purchaser acknowledges that
Seller shall have 10 Business Days from the date hereof to supplement Schedule
4.5(b) as to the list of Leases and all amendments and modifications thereto for
Leases with a gross leasable area of less than 7,000.
(c) Schedule 4.5(c)-1 sets forth a complete list, as of the date of this
Agreement, of all Leases of the Properties which have been executed, but are
either not yet included on the Rent Roll or not yet open for business. Schedule
4.5(c)-2 sets forth a correct and complete list of Tenants of the Properties for
which any Seller has received as of the date of this Agreement written notice of
any move out, lease termination or lease cancellation.
(d) Except as set forth on Schedule 4.5(d) or as approved by Purchaser,
no Tenants have been granted under their Leases options to purchase the Property
of which it is a Tenant or rights of first refusal or first offer to purchase
the Property of which it is a Tenant.
(e) Except as set forth on Schedule 4.5(e), as of the date of this
Agreement no Tenant has been promised or given a loan by Seller or any
Subsidiary which loan, if given, remains outstanding and the loan documents are
listed on Schedule 4.5(e).
(f) Schedule 4.5(f) contains a true, correct and complete list of all
casualty, rental loss, commercial liability, terrorism, employment,
environmental, professional liability and crime insurance policies maintained by
Seller and its Subsidiaries with respect to the Properties as of the date of
this Agreement and all outstanding claims of which Seller has Knowledge under
such policies with respect to the Purchased Assets or Properties. These policies
are in full force and effect as of the date of this Agreement.
(g) Intentionally Omitted.
(h) Other than as set forth on Schedule 4.5(h), neither the Seller nor
any Affiliate thereof owns, ground leases, or has any options to purchase,
rights of first refusal or rights of first offer with respect to any real
property adjacent to the Properties and Schedule 1.1(a)(i)(A) contains the legal
description of the Real Property including all out parcels.
(i) No Property has any promotional fund or any merchants' association to
which the owner of such Property is obligated to contribute any funds.
4.6 ENVIRONMENTAL MATTERS. Seller, to its Knowledge, has made available
to Purchaser copies of all environmental studies, investigations, reports,
audits, assessments, Licenses and Permits and agreements relating in any way to
any environmental matters with respect to any and all of the Properties or the
Purchased Assets which (i) are within Seller's or any Affiliates'
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possession or control and (ii) were commissioned by Seller or its Affiliates
during Seller's or its Affiliate's acquisition or ownership of the applicable
Property, all of which are listed on Schedule 4.6. To the Knowledge of Seller,
the Properties and the Purchased Assets comply in all material respects with all
applicable Environmental Laws and there are no Hazardous Materials present, at,
under, on, in or around the Properties, except as may be disclosed in said
environmental studies, investigations, reports, audits or assessments, so made
available to Purchaser.
4.7 LABOR MATTERS. Seller and its Affiliates are not a party to any
collective bargaining agreement or other labor union contract applicable to
employees of Seller or its Affiliates, nor does Seller know of any activities or
proceedings of any labor union to organize any such employees. To the Knowledge
of Seller, there are no strikes, slowdowns, work stoppages, lockouts or threats
thereof, by or with respect to any employees of the Seller or its Affiliates
which would materially adversely affect Purchased Assets. Seller has not
employed or employs any employees.
4.8 TAXES. (a) Intentionally Omitted.
(b) Seller and its Affiliates have timely paid all Taxes payable by them
for the Pre-Closing Taxable Period which will have been required to be paid on
or prior to the Closing Date, the non-payment of which would result in a Lien on
any Purchased Asset, would otherwise materially adversely affect the Purchased
Assets or the Properties or would result in Purchaser becoming liable or
responsible therefor.
4.9 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.9, (i) Seller
has not received written notice of any violation of Laws affecting any portion
of the Properties or the Purchased Assets issued by any Governmental Entity that
remains uncured and (ii) to the Knowledge of Seller, Seller has not violated or
failed to comply in any material respect with any Law or License and Permit
applicable to the Properties or the Purchased Assets. To the Knowledge of
Seller, the Licenses and Permits constitute all material Licenses and Permits
that are required in order to continue to operate the Properties in the manner
that they are presently being operated. To the Knowledge of Seller, all such
Licenses and Permits are in full force and effect in all material respects.
Notwithstanding the foregoing, Seller makes no representation under this Section
as to compliance with the Americans with Disabilities Act of 1990, as amended,
and any other "access" Laws and the representation in clause (ii) above shall
not apply to any building, health, safety and fire codes, any zoning laws or any
other similar laws.
4.10 BROKERS. No broker, investment banker, financial advisor or other
Person, other than X.X. Xxxxxx Securities Inc., the fees and expenses of which
will be paid by Seller, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of Seller.
4.11 ASSUMED INDEBTEDNESS. (a) Schedule 4.11(a) lists (i) the Assumed
Indebtedness, (ii) all of the Properties that have ever been encumbered by the
Assumed Indebtedness, (iii) the principal amount thereof outstanding as of the
date set forth thereon, (iv) all of the notes, agreements and instruments
evidencing and securing the Assumed Indebtedness, as the same
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may have been amended or supplemented from time to time, including, without
limitation, any guaranties and any ancillary documents (collectively, the
"Assumed Loan Documents"), and (v) the amount of any escrows or deposits held or
established in connection with the Assumed Indebtedness as of as September 30,
2002. Seller has delivered to Purchaser complete and correct copies of the
Assumed Loan Documents. Seller or the applicable Subsidiaries are current in all
payments of principal and interest due under each Assumed Loan Document through
the most recent scheduled payment date.
(b) Seller has not received any written notice that they are in violation
of or in default under (and to the Knowledge of Seller, there does not exist any
condition which upon the passage of time or the giving of notice or both would
cause a violation or default of any material term by Seller under, other than
obtaining the consents contemplated hereunder) the Assumed Indebtedness that
remains uncured, nor to the Knowledge of Seller does a monetary or other
material violation or default by Seller exist.
4.12 INTENTIONALLY OMITTED.
4.13 ASSUMED LIABILITIES. (a) Seller has not received any written notice
that they are in violation of or in default under (and to the Knowledge of
Seller, there does not exist any condition which upon the passage of time or the
giving of notice or both would cause a violation or default of any material term
by Seller under, other than obtaining the consents contemplated hereunder or
other than in respect of Contracts which may be terminated without penalty upon
the sale of the Purchased Assets or upon no more than 30 days' notice) the
Assumed Liabilities that remains uncured nor to the Knowledge of Seller does a
material violation or default by Seller exist.
(b) Intentionally Omitted.
4.14 CONTRACTS. Schedule 4.14 attached hereto lists the following
Contracts as of the date of this Agreement relating to the Purchased Assets and
the Properties (collectively, the "Material Contracts"):
(a) any agreement (or group of related agreements) for the lease of
personal property or equipment to or from any Person providing for lease
payments in excess of $25,000 per annum or which are not terminable by Seller
without penalty upon 30 days prior written notice or less;
(b) any agreement (or group of related agreements), including without
limitation, letters of intent) for (i) the purchase of or sale of real property
(including purchase options), (ii) the purchase or sale of supplies, products or
other personal property that involves consideration in excess of $50,000 (other
than purchase orders relating to the construction contracts described in
subsection (c)), or (iii) the furnishing or receipt of services, including,
without limitation, management, operating, listing, brokerage, supply and
maintenance agreements, other than agreements that are terminable by Seller
without penalty upon the sale of the Purchased Assets or upon 30 days prior
written notice or less;
(c) any agreement (or group of related agreements) relating to the
development or construction of any Property providing for payment to any Person
in excess of $25,000, other
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than agreements that are terminable by Seller without penalty upon 30 days prior
written notice and all development and construction agreements relating to the
Redevelopment Properties;
(d) any agreement constituting part of the Assumed Liabilities, limiting
the right of Seller to conduct any line of business;
(e) any environmental indemnity agreement benefiting Seller; and
(f) the Septic System Escrow Agreement, dated as of October 31, 2001,
among RIG Xxxx River Commons, LLC, Xxxx River Shopping Center Corporation and
Lawyers Title Insurance Company (the "Septic Escrow Agreement").
Seller has made available to Purchaser for Purchaser's review a correct and
complete copy of each Material Contract. Seller has not received any written
notice that it is in violation of or in default under any of the Material
Contracts, and to the Knowledge of Seller, Seller is not in violation of or in
default under any of the Material Contracts, and Seller has not given any
written notice to any non-Seller-affiliated party informing it that such party
is, and to the Knowledge of Seller, no non-Seller-affiliated party is, in
violation of or in default of any material term under any of the Material
Contracts. Each Material Contract is in full force and effect.
4.15 INTENTIONALLY OMITTED.
4.16 REAS. Seller has not received written notice that they are in
violation of or in default under (and to the Knowledge of Seller, there does not
exist any condition which upon the passage of time or the giving of notice or
both would cause a violation or default of any material term by Seller under,
other than obtaining the consents contemplated hereunder) any reciprocal
easement agreements or other operating easement agreements relating to the
Properties (the "REAs") that remains uncured, nor to the Knowledge of Seller
does a material violation or default by Seller exist. Seller has not given any
written notice to any non-Seller-affiliated party informing it that such party
is, and to the Knowledge of Seller, no non-Seller-affiliated party is in
violation of or in default under any of the REAs. Seller shall provide to
Purchaser, within 10 Business Days of receipt of the Title Commitment for each
Property, a list of each REA and every amendment and modification thereto that
is not shown on the Title Commitments with respect to the applicable Property,
and same shall be deemed a representation made under this Section that to the
Knowledge of Seller there are no other such REAs or amendments thereto.
4.17 Intentionally Omitted.
4.18 PURCHASED ASSETS. The Purchased Assets are all of the assets
necessary to conduct the operation of the Properties in the manner currently
conducted.
4.19 INTELLECTUAL PROPERTY. Seller has no Intellectual Property as of the
date of this Agreement other than as listed on Schedule 4.19 which are used by
Seller or such Subsidiaries with respect to the Purchased Assets. Except as set
forth on Schedule 4.19, there is no claim pending or to the Knowledge of Seller,
threatened against Seller with respect to any alleged infringement of any
patent, trademark or trade name owned by another.
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4.20 FINANCIAL STATEMENTS. Seller has delivered or caused to be delivered
to Purchaser the audited balance sheets at December 31, 2001, 2000 and 1999 and
the audited schedule of revenues and certain expenses, as defined, of EIG
Realty, Inc. for the years ended December 31, 2001 and 2000 of EIG Realty, Inc.,
(collectively, the "Audited Financial Statements"). In addition, Seller has
delivered or caused to be delivered to Purchaser, (a) the unaudited balance
sheet at June 30, 2002 and statement of operations for the six (6) month period
ended June 30, 2002 of EIG Realty, Inc. (collectively, the "Unaudited Financial
Statements," and together with the Audited Financial Statements referred to
collectively as the "Financial Statements"). The Financial Statements have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied during the periods involved (except as
otherwise provided therein and except that the Unaudited Financial Statements do
not contain all of the footnotes required under GAAP), and present fairly, in
all material respects, the financial position of EIG Realty, Inc. as of the
dates thereof and the results of operations for the periods then ended subject,
in the case of the Unaudited Financial Statements, to normal and immaterial
year-end audit adjustments. Since June 30, 2002, there has not been a material
adverse change in the financial condition or results of operations of EIG
Realty, Inc.
4.21 BUDGETS. Seller has delivered or caused to be delivered to Purchaser
true, correct and complete copies of the budgets for each of the Properties in
effect as of this date for calendar year 2002 (in the form delivered to
Purchaser, the "Budgets"). Purchaser acknowledges that Seller's actual results
may vary from the Budgets and no assurances can be given that Seller will meet
its Budget, except to the extent set forth in Section 7.6.
4.22 INSOLVENCY. There are no voluntary or involuntary proceedings in
Bankruptcy, or under any other debtor relief laws, pending or, to the Knowledge
of Seller, threatened against Seller.
4.23 UNITED STATES PERSON. Seller is a "United States Person" within the
meaning of Sections 1445(f)(3) and 7701(a)(30) of the Internal Revenue Code of
1986, as amended.
4.24 DEFINITION OF KNOWLEDGE OF SELLER. As used in this Agreement, the
phrase to the "Knowledge of Seller" (or words of similar import) means the
current, actual, conscious (and not constructive, imputed or implied) knowledge
of Xxxxxx Xxxxx, Xxx D'Arcy, Xxxx X. Xxxxxx, Xxxx Xxxxxxx and Xxx Xxxxxx without
having made a review of files or other independent inquiry other than due
inquiry of the knowledge of the persons listed on Schedule 4.24. No such
designee shall have any personal liability or obligation whatsoever with respect
to any of the matters set forth in this Agreement and any other documents,
agreements or instruments related thereto or any of the representations made by
Seller being or becoming untrue, inaccurate or incomplete in any respect. In
addition, Purchaser shall have the right to add additional persons to the
definition of Seller's Knowledge, if during the four weeks following the date
hereof, it becomes apparent that there are other persons with high level
managerial level responsibilities who have material knowledge of the operations
of the Properties similar to what a Chief Operating Officer would typically be
charged with knowing, by giving written notice to Seller of such person[s] prior
to the expiration of such four week period.
4.25 SCHEDULE REFERENCES. Any item disclosed in one Section or Schedule
shall be deemed to be disclosed in any other Section or Schedule where such
disclosure is relevant, even
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if there is no express cross-reference, provided that the relevance of the
disclosure is clearly apparent (except for Assumed Indebtedness and Assumed
Liabilities, which must appear on its own schedule (except that the Assumed
Liabilities schedule may cross reference the Assumed Indebtedness schedule).
4.26 RIGHT TO AMEND REPRESENTATIONS. Seller shall have the right from time
to time prior to the Closing by notice to Purchaser to amend or supplement its
qualifications to the representations and warranties in this Article IV, by
amendment of the Schedules hereto or otherwise to reflect changes in facts or
conditions or to correct any immaterial factual inaccuracies; provided, however,
that no such amendment or supplement will be deemed to cure any breach of any
representation or warranty made in this Article IV or have any effect on the
conditions in Section 9.4(a) or remedies set forth in Section 11.2 with respect
to any factual inaccuracy that existed when this Agreement was entered into but
will be deemed to cure any breach or inaccuracy for all purposes under this
Agreement arising from a change in facts or conditions after this Agreement was
entered into so long as the change was not caused by Seller's breach of Articles
VI and VII other than Section 6.5.
4.27 SELLER'S REPRESENTATIONS DEEMED MODIFIED. To the extent that
Purchaser actually knows at or prior to the Closing that any of Seller's
representations and warranties that are required to be made on the Closing Date
are inaccurate, untrue or incorrect in any way and fails to notify Seller and
make a claim with respect thereto pursuant to Section 10.2, such representations
and warranties shall be deemed modified to reflect Purchaser's knowledge. Seller
shall not have any liability for a breach of representation or warranty by
reason of any inaccuracy of a representation or warranty if and to the extent
that such inaccuracy is actually known by Purchaser at the time of the Closing
and Purchaser nevertheless fails to notify Seller and make a claim with respect
thereto pursuant to Section 10.2 and proceeds to consummate the Closing. For
purposes of this Agreement, knowledge of Purchaser means the current, actual,
conscious (and not constructive, imputed or implied) knowledge of Xxxxx Xxxxxxx,
Xxxx Xxxxx, Xxxx Xxxxxxxxx, Xxxxx XxXxxxxx, Xxxx Xxxxxxxxxx, Xxxxxx Xxxx, Xxxxxx
Xxxxxxx (head of leasing) and Xxxxxx Xxxxxx.
V. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1 ORGANIZATION, STANDING AND POWER OF PURCHASER. Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Maryland and has the requisite corporate power and
authority to carry on its business as now being conducted.
5.2 AUTHORITY; NONCONTRAVENTION; CONSENTS. (a) Subject to obtaining the
approval of the Board of Directors of the Purchaser, Purchaser has the requisite
corporate power and authority (i) to enter into this Agreement and all documents
contemplated hereunder to be entered into by Purchaser, (ii) to perform its
obligations hereunder and thereunder, and (iii) to consummate the Transfer and
the other transactions contemplated hereunder and thereunder. The execution and
delivery by Purchaser of this Agreement and all documents contemplated hereunder
to be entered into by Purchaser and the consummation by it of the transactions
contemplated hereunder and thereunder have been duly authorized by all necessary
corporate
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action, and no other corporate proceedings on the part of Purchaser or its
stockholders is necessary to authorize any of the foregoing, except for
obtaining the approval of the Purchaser's board of directors. Subject to
obtaining the approval of the Board of Directors of the Purchaser, this
Agreement has been, and all documents contemplated hereunder to be executed by
Purchaser when executed and delivered will have been, duly executed and
delivered by Purchaser and constitute the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws relating to the enforcement of
creditors' rights, general principles of equity or articles of incorporation or
by laws.
(b) The execution and delivery by Purchaser of this Agreement and all
documents contemplated hereunder to be entered into by Purchaser do not, and the
consummation of the transactions contemplated hereunder and thereunder and
compliance by Purchaser with the provisions hereof and thereof will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a penalty, or a right of
termination, cancellation or acceleration of any material obligation or to loss
of a material benefit under, or result in the creation of any Lien upon any of
the properties or assets of Purchaser under (i) its certificate or articles of
incorporation or bylaws, each as amended or supplemented to the date of this
Agreement, (ii) any loan or credit agreement, note, bond, mortgage, indenture,
lease, management or other agreement, instrument or Licenses and Permits
applicable to Purchaser or its respective properties or assets, or (iii) subject
to the governmental filings and other matters referred to in subsection (c)
below, any Laws applicable to Purchaser or its respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights, loss or Liens that, individually or in the aggregate, would
not reasonably be expected to impair or interfere in any material respect with
the consummation of the Transfer or any other transactions contemplated by this
Agreement or in the documents contemplated to be executed hereunder, or
otherwise prevent Purchaser from performing its obligations hereunder in any
material respect.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity is required by or with
respect to Purchaser in connection with the execution and delivery by Purchaser
of this Agreement and all documents contemplated hereunder to be entered into by
Purchaser to which it is a party or the consummation by Purchaser of any of the
transactions contemplated hereunder or thereunder, except for such consents,
approvals, orders, authorizations, registrations, declarations and filings as
are set forth in Schedule 5.2(c) attached hereto.
5.3 BROKERS. No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated
hereby based upon arrangements made by or on behalf of Purchaser.
5.4 FUNDING. At Closing, Purchaser will have sufficient cash or undrawn
lines of credit to perform all of its obligations hereunder.
5.5 INTENTIONALLY OMITTED.
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5.6 PURCHASER'S REPRESENTATIONS DEEMED MODIFIED. To the extent that
Seller has knowledge at or prior to the Closing that any of Purchaser's
representations and warranties that are required to be made on the Closing Date
are inaccurate, untrue or incorrect in any way and fails to notify Purchaser and
make a claim with respect thereto pursuant to Section 10.3(b), such
representations and warranties shall be deemed modified to reflect Seller's
knowledge. Purchaser shall not have any liability for a breach of representation
or warranty by reason of any inaccuracy of a representation or warranty if and
to the extent that such inaccuracy is actually known by Seller at the time of
the Closing and Seller nevertheless fails to notify Purchaser and make a claim
with respect thereto pursuant to Section 10.3(b) and proceeds to consummate the
Closing.
5.7 INTENTIONALLY OMITTED.
5.8 RIGHT TO AMEND REPRESENTATIONS. Purchaser shall have the right from
time to time prior to the Closing by notice to Seller to amend or supplement its
qualifications to the representations and warranties in this Article V, by
amendment of the Schedules hereto or otherwise, to reflect changes in facts or
conditions or to correct any immaterial factual inaccuracies; provided, however,
that no such amendment or supplement will be deemed to cure any breach of any
representation or warranty made in this Article V or have any effect on the
conditions in Section 9.3(a) or remedies set forth in Section 11.2 with respect
to any factual inaccuracy that existed when this Agreement was entered into but
will be deemed to cure any breach or inaccuracy for all purposes under this
Agreement arising from a change in facts or conditions after this Agreement was
entered into so long as the change was not caused by Purchaser's breach of
Sections 3.2 and 6.4 and Article VII.
VI. COVENANTS
6.1 CONDUCT OF SELLER'S BUSINESS PENDING TRANSFER. Prior to the Closing
Date or the earlier termination of this Agreement, except as (i) specifically
contemplated by this Agreement, or (ii) consented to in writing by one Purchaser
representative identified on Schedule 6.1 Seller will:
(a) Continue to operate, manage, lease and maintain the Properties in the
usual, regular and ordinary course and in compliance with all applicable Laws
and in substantially the same manner as heretofore and substantially consistent
with the "expense" portions of the Budgets, but with respect to the Properties,
subject to ordinary wear and tear;
(b) Use reasonable efforts to keep available the services of their
officers and key employees;
(c) Confer on a regular basis with one or more representatives of
Purchaser to report operational matters of materiality and any proposals to
engage in material transactions, and promptly provide Purchaser with (i) all
material notices received and financial statements and operating reports
prepared in connection with any of the documents evidencing or securing any
loans encumbering the Properties and (ii) all financial statements and operating
reports routinely prepared by Seller relating to the Properties or the Purchased
Assets;
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(d) Promptly notify Purchaser of any material emergency or other material
change at the Properties;
(e) Maintain its books and records in accordance with the accounting
principles currently utilized by it, consistently applied, and not change in any
material manner any of their methods, principles or practices of accounting
currently in effect, except as may be required by applicable Law or GAAP;
(f) Duly and timely file all reports, Tax Returns and other documents
required to be filed with federal, state, local and other Governmental Entities,
subject to extensions permitted by Law;
(g) Not (i) acquire or sell or ground lease, or enter into any option or
agreement to acquire or sell or ground lease, or exercise an option or contract
to acquire, sell or ground lease any of the Properties or, other than the
parcels described in Schedule 4.5(h), any part thereof or direct or indirect
interest therein, other than leasing in accordance with Section 6.2, (ii)
encumber or subject to any Lien any of the Properties or Purchased Assets, (iii)
modify, amend, supplement, terminate or assign the Assumed Loan Documents, the
documents evidencing the Assumed Liabilities, the REAs, (iv) (Intentionally
Omitted), (v) transfer, sell or assign any Material Contracts, or (vi) enter
into or modify, amend, supplement, or assign any management, operating, listing,
brokerage, supply and maintenance agreement that is not terminable by Seller or
a Subsidiary without penalty upon the sale of the Purchased Assets or upon 30
days prior written notice or less;
(h) Intentionally Omitted;
(i) Not modify, amend, supplement, terminate or assign any material terms
of any Material Contract in a manner adverse to the Purchaser without obtaining
the prior written consent of Purchaser;
(j) Keep in full force and effect with respect to the Properties policies
of insurance providing coverage at least as extensive as the policies covering
the Properties on the date hereof;
(k) From and after the expiration of the Contract Due Diligence Period,
provide or cause its Affiliates to provide Purchaser with (i) access to the
computers, including the YARDI system, with respect to the Properties and the
Purchased Assets and (ii) appropriate personnel to assist with same so that
Purchaser can start to transition the management and ownership of the
Properties;
(l) Intentionally Omitted;
(m) Use commercially reasonable efforts to obtain the consents required
to consummate the Transfer and the other transactions contemplated by this
Agreement, including those described in Schedule 4.2(b) and the consents of the
holders of the Assumed Indebtedness;
(n) Provide to Purchaser's title insurance company the form of the
affidavits attached as Exhibit 6.1(n) and other customary and commercially
reasonable (as determined by Seller)
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affidavits (but not a non-imputation affidavit), documents and information
necessary for such title insurance company to insure title to the Properties
subject only to the Permitted Encumbrances for the benefit of Purchaser;
(o) In the event Seller becomes aware that any of Seller's
representations and warranties made hereunder are inaccurate, untrue or
incorrect in any material respect, Seller shall promptly notify Purchaser with a
reasonably detailed description of the inaccuracy;
(p) Not settle any insurance claims or other litigation that would
materially and adversely affect the Properties after the Closing without
Purchaser's consent;
(q) Cooperate with Purchaser to have any letters of credit in respect of
any Tenant Deposits assigned to Purchaser or hold any letters of credit of and
draw on them at Purchaser's request until a new letter of credit may be issued
to Purchaser or its designee. This obligation of Seller will survive Closing;
(r) Intentionally Omitted;
(s) Not apply any Tenant Deposits to delinquent Rentals or other amounts
owed by a Tenant while a Tenant is in possession of the space under its Lease
without Purchaser's consent;
(t) Intentionally Omitted;
(u) Comply in all material respects with the terms and conditions of the
Assumed Indebtedness applicable to the Properties and Seller;
(v) Not enter into a contract or agreement that would be a Material
Contract without Purchaser's consent unless the expenditures thereunder are
included in the Budgets or are capital expenditures not in excess of 10% of the
aggregate of the capital expenditures in the Budget or the Material Contract
relates to tenant work to be performed under an existing Lease or a new Lease
entered into pursuant to Section 6.2;
(w) At or prior to Closing terminate all property management agreements
and leasing agreements with respect to the Properties, including without
limitation, the agreement with Divaris Real Estate, Inc., all at Seller's sole
cost and expense; and
6.2 LEASING. Seller will conduct its leasing activities consistent with
past practices subject to changes consistent with prevailing market practices.
Seller may enter into any new lease, or amend, modify or terminate any Lease
that falls within the guidelines provided in Schedule 6.2-1 (the "Leasing
Guidelines"). Seller will apprise Purchaser of leasing activities with respect
to the Properties, including notice of any loans made by Seller to any Tenant.
Seller will not enter into any new lease, or otherwise amend, modify or
terminate any Lease, that does not fall within the Leasing Guidelines without
Purchaser's prior written consent in each instance, which consent will not be
unreasonably withheld, delayed or conditioned. Any notice from Purchaser
rejecting a proposed new lease or amendment, modification or termination of any
Lease that does not fall within the Leasing Guidelines must include a
description of the reasons for Purchaser's rejection. Purchaser will be provided
with monthly leasing reports and permitted to attend all leasing meetings.
Notwithstanding anything herein to the contrary, except as set
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forth on Schedule 6.2-2, Seller will not, and will cause its Subsidiaries not
to, enter into any new lease, or otherwise amend, modify or terminate any Lease,
that is over 10,000 square feet (taking into account all expansion options), or
enter into any Required Lease that are not on the same terms and conditions set
forth on Schedule 9.4(g), whether or not same falls within the Leasing
Guidelines without Purchaser's prior written consent in each instance, which
consent will not be unreasonably withheld, delayed or conditioned. If Purchaser
fails to object to such lease, amendment, modification or termination within 5
Business Days, Purchaser will be deemed to have approved that lease, amendment,
modification or termination.
6.3 TENANT ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the Tenants
identified on Schedule 6.3 and at Seller's discretion Seller may obtain other
estoppel certificates. Each estoppel certificate will be in the form of Exhibit
6.3-1 or in the form prescribed in the applicable Tenant's Lease. If any Tenant
identified on Schedule 6.3 fails to deliver an estoppel certificate before
Closing, Seller will deliver an estoppel certificate in the form of Exhibit
6.3-2 in respect of that Tenant's Lease at Closing. If Seller obtains an
estoppel certificate from any Tenants, Seller's representations and warranties
made in Sections 4.5(b), (d) and (e) will terminate and be null and void with
respect to all matters represented by such Tenant in such estoppel certificate
that relate to the applicable Tenants if such certificates contain no exceptions
noted by the Tenant, and if such estoppel certificate contains exceptions noted
by the Tenant then such representations and warranties will terminate and be
null and void only with respect to those matters represented that relate to the
applicable Tenant and that are confirmed without exception by such estoppel
certificate, and if the matter to which the Tenant takes exception in the
estoppel certificate is not a matter already covered by a Seller representation
in Sections 4.5(b), (d) and (e) and is a matter included in the form of Seller
estoppel attached as Exhibit 6.3-2, then Seller may but shall not be required to
deliver a Seller estoppel with respect to such Tenant for the excepted matter.
If the Tenant estoppel includes exceptions and Seller elects not to deliver a
Seller estoppel with respect to such Tenant for the excepted matter then such
exception shall be considered in determining the occurrence of a Seller Material
Adverse Event pursuant to clause (iv) of the definition thereof. If Seller
provides an estoppel certificate in respect of any Tenant's Lease and the Tenant
delivers an estoppel certificate after Closing, Seller's estoppel certificate in
respect of that Lease will be null and void as if the Seller estoppel
certificate had not been delivered at Closing if the estoppel certificate from
the Tenant contains no exceptions noted by the Tenant, or if such estoppel
certificate contains exceptions noted by the Tenant, then the Seller's estoppel
certificate will be null and void only with respect to those matters represented
that are confirmed without exception by the Tenant's estoppel certificate.
6.4 ASSUMPTION OF OBLIGATIONS. Seller will use its commercially
reasonable efforts and cooperate with Purchaser to cause the holders of the
Assumed Indebtedness to permit the assumption thereof by Purchaser as
contemplated by this Agreement or consent to the Transfers, as applicable
(including taking subject to such Indebtedness). Seller will cooperate with
Purchaser in requesting from the applicable holder of any Assumed Indebtedness
the modifications to the Assumed Indebtedness set forth on Schedule 6.4-1 but
failure to obtain such modifications shall not be a condition to Closing or to
the assumption of the Assumed Indebtedness by Purchaser. Seller will cooperate
with Purchaser in requesting from the applicable holder of any Assumed
Indebtedness the modifications to the Assumed Indebtedness set forth on Schedule
6.4-2 and failure to obtain such modifications shall be deemed a failure to
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obtain the respective holder's consent to the assumption of the respective
Assumed Indebtedness for purposes of this Agreement. At the Closing, Purchaser
agrees to assume all obligations of Seller and each Subsidiary (other than the
borrowers and their subsidiaries under the Assumed Indebtedness to the extent
that Purchaser's designee assumes all obligations of such borrower or its
Subsidiary), and any partner of Seller or other Person (each such Person, a
"Guarantor") accruing from and after the Closing Date pursuant to each guaranty
and other indemnity agreement set forth in the Assumed Loan Documents (each, a
"Continuing Loan Guaranty") on such terms and pursuant to such documentation as
the lender or other beneficiary thereof may reasonably require. Purchaser and
Seller will use commercially reasonable efforts to cause the holder of each
Assumed Indebtedness to fully release and discharge each Guarantor from all
obligations under each Continuing Loan Guaranty to which it is a party or by
which it is bound, including Purchaser executing documents reasonably requested
by the holders, and, if any holder is unwilling to release and discharge any
Guarantor from a Continuing Loan Guaranty, Purchaser will indemnify the
Guarantor against any liability accruing from and after the Closing Date under
the Continuing Loan Guaranty pursuant to an indemnity agreement in the form of
Exhibit 6.4 (the "Indemnity Agreement"). Purchaser will cooperate with Seller to
cause the holder of each Assumed Indebtedness to permit the assumption thereof
and/or the Transfers and Purchaser and Seller will each use commercially
reasonable efforts to satisfy the requirements applicable to it imposed by the
holder for the assumption thereof and/or the Transfers.
6.5 OTHER ACTIONS. Each of Seller and Purchaser will not, and will use
commercially reasonable efforts to cause its respective subsidiaries and/or
Affiliates not to, take any action that would result in (i) any of the
representations and warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue as of the Closing Date, (ii) any
of the representations and warranties of such party that are not so qualified
becoming untrue in any material respect as of the Closing Date, or (iii) any of
the conditions to the Closing set forth in Article IX not being satisfied.
6.6 NO SOLICITATION. Seller agrees that it will not, directly or
indirectly, and it will not authorize or direct any of its representatives to,
solicit or negotiate to sell or otherwise dispose of, or deliver non-public
information designed to facilitate a potential bid to acquire, any Purchased
Assets or any direct or indirect interest in any Purchased Assets or the
Properties in any transaction except as contemplated in this Agreement without
Purchaser's prior written consent until such time as this Agreement has been
terminated.
6.7 INTENTIONALLY OMITTED
6.8 TENANT LITIGATION. (a) All litigation initiated by the Seller against
any Tenant shall be assigned to Purchaser as a Purchased Asset except such
litigation which Purchaser elects not to accept by notice to Seller delivered no
later than 5 Business Days prior to the Closing. Any net recoveries related to
the foregoing shall be treated as collections of Delinquent Rentals and shall be
apportioned between Purchaser and Seller as provided in Section 2.4(b)(v). In
the event any counterclaims are asserted against Seller in such litigation,
Purchaser will not settle any such litigation without Seller's prior written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned.
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(b) All litigation initiated by the Seller against any Tenant which
Purchaser elects not to accept under Section 6.8(a), or former tenants, as
identified in Schedule 6.8(b) shall be retained by Seller and not assigned to
Purchaser as a Purchased Asset. Any recoveries related to the foregoing shall be
retained by Seller and shall not be apportioned under Section 2.4.
6.9 LENDER ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the holders under the
Assumed Indebtedness. Each estoppel certificate will be in the form of Exhibit
6.9 or in the form used by such holder and reasonably acceptable to Purchaser.
6.10 INTENTIONALLY OMITTED.
6.11 REA ESTOPPELS. Seller will use commercially reasonable efforts to
obtain and deliver to Purchaser estoppel certificates from the parties to the
REAs that Purchaser requests. Failure to obtain such shall not be a default or a
failure of a condition under this Agreement. Purchaser will prepare each
estoppel certificate that it requests Seller obtain under this Section (and
Seller will provide Purchaser any contact information that it may have with
respect to such parties to the REAs).
VII. ADDITIONAL AGREEMENTS
7.1 ACCESS TO INFORMATION; CONFIDENTIALITY. Notwithstanding the execution
of this Agreement that certain letter agreement dated November 16, 2001 by and
between EIG Realty, Inc., a Maryland corporation, general partner of Seller, and
Purchaser shall remain in effect, subject to its terms, except that the same
shall be deemed modified and amended by this Section 7.1 (hereinafter, as
modified and amended, the "Confidentiality Agreement"). If there is any
inconsistency between this Agreement and the Confidentiality Agreement, this
Agreement shall govern.
(a) Certain information (whether written or oral) relating to the
transactions contemplated hereunder, the Purchased Assets, Seller and its
Affiliates, Purchaser and its Affiliates and their properties, some of which is
non-public, confidential and proprietary in nature, such information, in whole
or in part, together with analyses, computations, studies or other documents
prepared by Purchaser or Seller or their Representatives (as hereinafter
defined) which contains, any such information, is hereinafter referred to as the
"Information". Purchaser and Seller agree that:
(i) The Information will be kept confidential by them and they
shall use their reasonable efforts to ensure that the Information is kept
confidential by their affiliates, representatives, agents, advisors or employees
(collectively, as applicable, their "Representatives"), and they shall not and
they shall use their reasonable efforts to ensure that their Representatives
shall not, other than as provided in this Agreement, without the prior written
consent of the other party, disclose the Information of the other party in any
manner whatsoever, in whole or in part, and the Information shall be used by
such party and their Representatives solely for the purpose of the transactions
contemplated hereunder. Moreover, the Information will only be transmitted to
their Representatives who need to know the Information for purposes of providing
assistance in connection with the transactions and who are
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informed of the confidential nature of the Information. Each party agrees to
take reasonably effective precautions, contractual or otherwise, calculated to
prevent unauthorized use or disclosure of the Information.
(ii) In the event that this Agreement is terminated by either
party, then upon written request of a party, the Information, and all copies
thereof, will be returned to the other party promptly without such party or its
Representatives retaining any copies thereof. Any oral Information will continue
to be subject to the terms of this Agreement. The term "Information" does not
include information that:
(A) becomes generally available to the public other than
as a result of a disclosure by the party charged with keeping it
confidential or anyone to whom such party transmitted the
information; or
(B) was available to such party on a non-confidential
basis prior to its disclosure to such party by the other party
through no violation or breach of any prior confidentiality
obligation of any other person.
(iii) Notwithstanding anything herein to the contrary, in the
event that any party or its Representatives are requested or required (by
deposition, interrogatory, request for documents, subpoena, civil investigative
demand or similar process) to disclose any of the Information, such party shall
(a) promptly provide the other party with written notice of such requirement,
(b) furnish only that portion of the Information that such party is advised by
opinion of counsel is legally required, and (c) use its reasonable efforts to
obtain assurance that confidential treatment will be accorded such Information.
In the event any such disclosure is so required, such party shall use its
reasonable efforts to assist such party or its Representatives in any efforts it
undertakes to seek a protective order or other appropriate remedy.
(iv) The parties hereby confirm that any Information that may
have been disclosed prior to the date hereof was disclosed on the basis set
forth herein and shall be subject to the provisions of this Agreement.
(b) Notwithstanding anything herein to the contrary, the obligations of
Purchaser set forth in this Section 7.1 shall not apply to any Information that
is required, or Purchaser determines based on advice of counsel (including in
house counsel) is advisable, to be disclosed by Purchaser (x) to comply with
applicable securities laws or regulations or under the rules or policies of the
New York Stock Exchange ("NYSE"), including in connection with the filing by
Purchaser of a registration statement under the Securities Act, (y) in
connection with an offering of its securities or (z) as otherwise may be
consistent with its past disclosure practices. Without limiting but subject to
the foregoing, Purchaser may disclose, (i) a summary description of the material
terms of this Agreement, (ii) a copy of this Agreement, (iii) to the extent
necessary to comply with applicable securities laws or the rules or policies of
the NYSE or as reasonably determined by Purchaser to be advisable in connection
with an offering of its securities, historical and pro forma financial
information with respect to the Purchased Assets or the Properties, and (iv)
such aggregate portfolio information, including the location of the Properties,
that would typically be disclosed in any investor or analyst call or, to the
extent necessary to comply with applicable securities laws or the rules or
policies of the NYSE or as reasonably
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determined by Purchaser to be advisable in connection with an offering of its
securities, in a registration statement or other public filing made under
applicable securities laws or otherwise consistent with its past disclosure
practices.
(c) From and after the Closing, Purchaser shall have the right to
disclose any Information about the Purchased Assets and to use the Information
in connection with the employment of the Transferred Employees. Notwithstanding
the Closing, Seller shall still be required to keep any and all Information
about Purchaser confidential, subject to the provisions of this Section 7.1.
7.2 REASONABLE EFFORTS. Subject to the terms and conditions set forth in
this Agreement, each of Seller and Purchaser will use commercially reasonable
efforts to promptly take, or cause to be taken, all actions, and to promptly do,
or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable under applicable Laws to
consummate and make effective the Transfer and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement, the Transfer or the consummation of
the other transactions contemplated by this Agreement and (iv) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. The
obligations in clause (iv) of this Section 7.2 will survive Closing.
7.3 PUBLIC ANNOUNCEMENTS. Seller shall not issue any press releases or
make any public statements relating to this Agreement without the prior consent
of Purchaser, which consent may be granted or denied in Purchaser's sole
discretion. Purchaser may issue any press release or otherwise make public
disclosures that it deems desirable or necessary with respect to this Agreement
or the transactions contemplated hereby without the consent of Seller, however,
Purchaser shall consult with Seller (which shall not be deemed to require the
Seller's consent therefor) prior to the issuance of any press releases relating
to this Agreement or the transactions contemplated hereby provided, however,
that any such press release or public disclosure which identifies any of
Seller's Affiliates or any Subsidiary shall require the prior written consent of
such Affiliates, which consent may be granted or denied in such Affiliate's sole
discretion.
7.4 CONVEYANCE TAXES. Purchaser and Seller will cooperate in the
preparation, execution and filing of all Tax Returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer, value added and stamp Taxes, any transfer, recording,
registration and other fees and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement.
7.5 INTENTIONALLY OMITTED.
7.6 CAPITAL IMPROVEMENTS.
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(a) Intentionally Omitted
(b) Seller will continue to perform the capital improvements consistent
with redevelopment or renovation plans and budgets described in Schedule 7.6-B,
provided however that nothing herein shall be deemed to require Seller to have
completed any specific item of redevelopment or renovation with respect to the
Properties. Seller will give Purchaser a credit against the Purchase Price
payable at Closing an amount equal to the unexpended portion of the capital
improvements budget described in Schedule 7.6-B, based upon reasonable evidence
of the expenditures.
(c) Intentionally Omitted.
(d) Intentionally Omitted.
(e) Seller will remedy the septic tank problem at Xxxx River Commons in
Providence Rhode Island in the manner set forth and described in the scope of
work set forth on Schedule 7.6-E (the "Septic Problem"). If the Septic Problem
is not cured to the reasonable satisfaction of Purchaser at Closing, then Seller
will assign to Purchaser the rights to the escrowed funds under the Septic
Escrow Agreement to cure such Septic Problem. If the rights to such escrow are
not assignable the Purchaser shall receive a credit against the Purchase Price
in the then current amount of such escrow and upon complete resolution of the
Septic Problem (and all amounts therefore have been paid) Seller shall be
entitled to a payment in the amount of the Credit that Purchaser received at
closing less all costs and expenses incurred by Purchaser to remedy the Septic
Problem. The provisions of this subsection shall survive Closing.
7.7 ALLOCATION OF PURCHASE PRICE. The Purchase Price attributable to the
Purchased Assets shall be allocated among the Purchased Assets in accordance
with and as provided by Section 1060 of the Code, as initially set forth in a
separate letter agreement of even date herewith executed by Seller and Purchaser
(the "Section 1060 Allocation") and as further supplemented by written agreement
between Seller and Purchaser prior to Closing. Any Tax Returns shall be prepared
and filed consistently with such agreed upon Section 1060 Allocation. To the
extent required, Seller and Purchaser will each properly prepare and timely file
IRS Form 8594 in accordance with the agreed upon Section 1060 Allocation.
7.8 EMPLOYEE MATTERS.
(a) Purchaser may, in its sole discretion, offer employment to employees
of the Seller who are actively engaged with the Properties or Purchased Assets
immediately prior to the Closing (the "Employees") and may hire one or more
Employees on such terms and conditions as shall be mutually agreeable to
Purchaser and such Employees; provided, that, Purchaser shall be under no
obligation to hire any Employees. Employees who accept employment with Purchaser
are hereinafter referred to exclusively as the "Transferred Employees." Seller
agrees to comply with the WARN Act relative to any terminations or reductions in
work force that occur in connection with or on or before the Closing.
(b) Seller will be responsible in accordance with its applicable welfare
plans in effect prior to the Closing for all medical and dental claims for
expenses incurred prior to the Closing Date by Employees and any other
employees, former employees and their dependents, including
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claims that are filed after the Closing Date. Reimbursement of Employees and any
other employees, former employees and their dependents for medical and dental
expenses associated with such claims (including claims submitted on behalf of
disabled employees and their dependents) shall be determined in accordance with
the terms of Seller's medical and dental programs. Seller shall be responsible
for providing continuation coverage under its medical and dental plans for the
Employees and any other employees or former employees of Seller, as required by
Section 4980B of the Code and Part 6 of Title I of ERISA, or any relevant
benefit continuation requirements under state law to the extent required by Law.
Seller shall be solely responsible for, and Seller shall indemnify Purchaser and
its Affiliates against, any and all liabilities which have arisen or may arise
in connection with any benefit plan sponsored or maintained by Seller
(including, but not limited to, liabilities arising from income or excise tax
assessments, participant benefit claims, fiduciary conduct, or under Title IV of
ERISA), any and all liabilities that have arisen or may arise in any way from
the employment, compensation or benefits of any Employee or former employee of
Seller, or the termination thereof by Seller, including, without limitation, any
liability or obligation arising out of or relating to any act or omission by
Seller, any violation of or non-compliance with or obligation arising under any
applicable Law respecting employment and the termination thereof (including, but
not limited to, the WARN Act), compensation or benefits, and any and all costs,
liabilities and obligations for severance pay, accrued vacation pay, sick pay
and other benefits relating to any period of employment with Seller, whether
arising as a matter of Contract, Law or otherwise.
(c) Neither Purchaser nor its Affiliates shall adopt or become a
sponsoring employer of, or have any obligations with respect to, any of the
Seller's employee benefit plans. Other than as expressly provided in this
Section 7.8, neither Purchaser nor its Affiliates shall assume or have any
direct or indirect obligation or liability of any nature, whether matured or
unmatured, accrued or contingent, due or to become due or otherwise, to any
Employee or other present or former employee of Seller or its Affiliates, or to
any dependent, survivor or beneficiary thereof, arising out of or in relation to
such person's employment with Seller or its Affiliates or the termination of
such employment. Notwithstanding anything herein to the contrary, no provision
of this Section 7.8 will create any third party beneficiary or other rights in
any Employee or former employee, including any dependent, survivor or
beneficiary thereof, of Seller or its Affiliates in respect of employment (or
resumed employment) with either Purchaser or its Affiliates and no provision of
this Section 7.8 shall create any such rights in any such persons in respect of
any benefits that may be provided, directly or indirectly, under any employee
benefit plan or arrangement which may be established or made available by
Purchaser or its Affiliates to the Transferred Employees. No provision of this
Agreement shall constitute a limitation on rights to amend, modify or terminate
after the Closing Date any employee benefit plan or arrangement of Purchaser or
its Affiliates.
(d) Seller and Purchaser agree to cooperate with each other in good faith
in effectuating the provisions of this Section 7.8 and to furnish each other
promptly with such information as is necessary and appropriate to carry out the
terms hereof.
7.9 INDEMNITOR'S ACKNOWLEDGEMENT AND ENVIRONMENTAL INSURANCE. Seller
shall use it good faith commercially reasonable efforts to obtain an
acknowledgment from each indemnitor or obligor under each environmental
indemnity agreement listed on Schedule 4.14 ("Indemnitor's Acknowledgement"),
which shall be in a form and substance reasonably
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acceptable to Purchaser, acknowledging that after the Transfer (i) each of
Purchaser and its Affiliates is a beneficiary under such agreement, (ii) such
agreement is in full force and effect and binding upon such indemnitor or
obligor, and (iii) there are no defaults under such agreement. Subject to AIG's
approval, Seller shall add Purchaser and its permitted designees under this
Agreement as an additional named (with full rights to recovery) insured under
the Existing Environmental Insurance Policy. Seller shall use its good faith
efforts to obtain AIG's approval. If Purchaser and its permitted designees are
not added as an additional named insured to Existing Environmental Insurance
Policy, Seller shall indemnify Purchaser and its permitted designees for all
environmental matters, however, its liability shall be limited to the amount of
any insurance proceeds Seller receives (less the costs of collection and less
any amounts required to cover Losses incurred by Seller that are covered by the
Existing Environmental Insurance Policy) under the Existing Environmental
Insurance Policy after having diligently pursued such claims under the Existing
Environmental Insurance Policy. If Purchaser and its permitted designees are
added as an additional named insured to Existing Environmental Insurance Policy,
Seller, provided AIG consents, shall keep such insurance policy in full force
and effect for its remaining term and Purchaser at its election and with AIG's
consent may at Purchaser's sole cost and expense extend the term of the Existing
Environmental Insurance Policy (this sentence shall survive Closing).
7.10 APPOINTMENT OF AGENT. At the Closing, Seller shall appoint Rhino
Investment Group, LLC as its agent for collecting and distributing to them any
consideration paid by Purchaser pursuant to this Agreement which is allocated to
their Purchased Asset, such that Purchaser only has to deliver such
consideration to Seller.
7.11 COMPANY LEASES. Company Leases are Excluded Assets.
7.12 OPTIONS. If any Tenant exercises its right to purchase a Property,
such Property shall automatically drop.
7.13 TRANSITIONAL SERVICES. Upon Purchaser's request, Seller shall cause
the EIG Operating Partnership, L.P. to and Purchaser shall at Closing enter into
the Transitional Services Agreement, substantially in the form attached hereto
as Exhibit 7.13 (the "Transitional Services Agreement"), pursuant to which, EIG
Operating Partnership, L.P. will provide, with respect to any or all of the
Properties (as Purchaser elects), any or all of the transitional services (as
Purchaser elects) as set forth in the Transitional Services Agreement.
7.14 MATTERS RELATING TO ASSUMED INDEBTEDNESS. If Seller is unable to
obtain prior to the Closing the consent of any holder with respect to Assumed
Indebtedness (which for purposes of this Agreement shall include any required
documentation by such holder to effectuate the assumption), Seller may, at its
sole option, elect to prepay such Assumed Indebtedness coincident with the
Closing at Seller's sole cost and expense (including all prepayment fees and
expenses), and Seller shall not receive a credit at the Closing in an amount
equal to one-half of the assumption fee which would have otherwise been payable
to the holder, provided, however, Purchaser shall have the right to delay the
Closing for the Properties that are encumbered by such Assumed Indebtedness for
a period not to exceed 90 days after the Main Closing Date. Seller will endeavor
to provide Purchaser with as much advance notice of its intention with respect
to such Assumed Indebtedness. Seller must make such election by written notice
to Purchaser any
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time prior to the Closing and Purchaser shall have until the Closing to elect to
delay the Closing for any such Property by written notice to Seller. Any Assumed
Indebtedness that is duly elected by Seller to be prepaid under this Section,
shall not be Assumed Indebtedness for purposes of this Agreement and shall be
prepaid at the Closing or at any delayed Closing at Seller's sole cost and sole
cost and expense (including all prepayment fees and expenses).
(a) If Purchaser elected to delay the closing of the Properties
encumbered by such Assumed Indebtedness that Seller has elected to prepay, the
sale and purchase of Properties encumbered by such Assumed Indebtedness and the
assumption of the liabilities relating thereto will be delayed for up to 90 days
after the Main Closing Date (as if such deferred date is the "Closing Date" with
respect to such Property), and at the Closing the transactions contemplated
hereby other than with respect to such Properties for which the Closing is
delayed (and any delayed closing pursuant to Section 9.4(g)) shall be
consummated and the Purchase Price payable at Closing shall be reduced by the
allocable purchase price of the Properties encumbered by such Assumed
Indebtedness as set forth in the letter agreement referred to in Section 7.7 and
the Assumed Indebtedness at Closing will not include the Assumed Indebtedness
with respect to such Properties and all other conditions and obligations with
respect to such Properties for which the Closing is delayed hereunder shall not
constitute conditions and obligations with respect to the Closing of the
Properties for which the Closing is not delayed hereunder. Subject to the
conditions set forth in Sections 9.2, 9.3 and 9.4, as they relate to the
Properties for which the closing is delayed, the closing of the sale and
purchase of such Properties and the assumption of the liabilities relating
thereto will take place no later than 10 Business Days following the date
Purchaser gives Seller notice that it is ready to close, but not later than 90
days after the Main Closing Date and the purchase price to be paid by Purchaser
for the applicable Property for which the Closing is delayed will be equal to
the allocable purchase price set forth in the letter agreement referred to in
Section 7.7 subject to all applicable adjustments set forth herein. Such delayed
closing shall be deemed the "Closing" and the date thereof the "Closing Date"
with respect to such Properties that close at such delayed Closing.
(b) In the event that Seller is unable to obtain prior to the Closing the
consent of any holder with respect to Assumed Indebtedness and Seller does not
elect to prepay such Assumed Indebtedness (or it is not prepayable), then
Purchaser may elect, in its sole discretion and by written notice to Seller, any
combination of the following (i) delay the closing for such Properties as
described below or (ii) drop such Properties. If Purchaser elects to delay the
closing of such Properties, the sale and purchase of such Properties and the
assumption of the liabilities relating thereto will be delayed until the consent
of the applicable holder can be obtained (but not later than 90 days after the
Main Closing Date) (as if such deferred date is the "Closing Date" with respect
to such Property), and at the Closing the transactions contemplated hereby other
than with respect to the Properties for which the closing is delayed shall be
consummated and the Purchase Price payable at Closing shall be reduced by the
allocable purchase price of the Properties encumbered by such Assumed
Indebtedness as set forth in the letter agreement referred to in Section 7.7 and
the Assumed Indebtedness at Closing will not include the Assumed Indebtedness
with respect to such Properties and all other conditions and obligations with
respect to such Properties for which the Closing is delayed hereunder shall not
constitute conditions and obligations with respect to the Closing of the
Properties for which the Closing is not delayed hereunder. Subject to the
conditions set forth in Sections 9.2, 9.3 and 9.4, as they relate to the
Properties for which the closing is delayed, the closing of the sale and
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purchase of such Properties and the assumption of the liabilities relating
thereto will take place no later than 10 Business Days following the date
consent of the applicable holder is obtained and the purchase price to be paid
by Purchaser for the applicable Property will be equal to the allocable purchase
price set forth in the letter agreement referred to in Section 7.7 subject to
all applicable adjustments set forth herein. Such delayed closing shall be
deemed the "Closing" with respect to such Properties. If the consent of any
applicable holder is not obtained by 90 days after the Main Closing Date, then
the applicable Properties will be automatically dropped without further action
by Purchaser or Seller. If Purchaser elects to drop the Properties encumbered by
such Assumed Indebtedness, upon Seller's notice to Purchaser of its election,
this Agreement will be deemed amended, without any further action on the part of
any party, to revise the definition of Assumed Indebtedness to exclude the
Assumed Indebtedness with respect to such Properties. If the consent of any
holder with respect to the Assumed Indebtedness is conditioned on payment of any
fees in excess of 1% of the loan amount (excluding attorney fees), Purchaser may
elect, in its sole discretion and by written notice to Seller, to either (i)
agree to pay its one half share under Section 12.9, in which case Seller shall
pay its one half share of such costs under Section 12.9 or (ii) drop the
Properties encumbered by such Assumed. Indebtedness. Notwithstanding anything
herein to the contrary, Purchaser shall not be obligated to consent to any
modifications to the Assumed Loan Documents that would be adverse to Purchaser
which the holder of the Assumed Indebtedness may condition its consent upon.
(c) All obligations, liabilities, conditions and provisions set forth in
this Agreement, as applicable, shall continue in full force and effect with
respect to the applicable Properties that are subject to a deferred closing
under this Section 7.14.
(d) PURCHASER'S RIGHT TO ELECT TO ASSUME ADDITIONAL INDEBTEDNESS.
Purchaser shall have the right upon written notice to Seller, not later than 30
days after the date hereof, to elect to have any or all of the Indebtedness on
Schedule 7.14(d) treated as "Assumed Indebtedness" pursuant to the terms
hereunder and Seller shall update the Schedule 4.11(a) within 3 Business Days
from receipt of Purchaser's notice. If the holder's consent is not obtained for
any of the Indebtedness that Purchaser elects under this Section to treat as
Assumed Indebtedness, then such Indebtedness shall no longer be deemed "Assumed
Indebtedness" for purposes of this Agreement.
7.15 VIOLATIONS. Seller shall, prior to the Closing and subject to
Seller's right to contest by appropriate proceedings, be responsible for and
comply with or remedy all written notices of violation of law or municipal
ordinances, orders or requirements that have been noted in or issued in writing
by any federal, state or municipal department having jurisdiction over the
Properties prior to the date of this Agreement and there shall be a credit
against the Purchase Price for the reasonable estimate of the cost to comply
with or remedy the same to the extent not cured prior to Closing. Upon the
Closing, Purchaser shall be responsible for and shall reimburse Seller for the
reasonable costs to comply or remedy all notices of violation of law or
municipal ordinances, orders or requirements that have been noted in or issued
by any federal, state or municipal department having jurisdiction over the
Properties on or after the date of this Agreement (provided same was not a
result of a breach any provision of this Agreement). Notwithstanding the
foregoing, if Purchaser and Seller are not able to agree on a reasonable
estimate of the cost to comply with or remedy such violations, then Seller shall
drop the Property with such violation (subject to Purchaser's right to waive the
violation with respect to such
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Property, nullify Seller's election to drop such Property, and close without an
adjustment to the Purchase Price for such violation).
7.16 DROPPED PROPERTIES. (a) If Purchaser elects to drop a Property by
written notice under any Section in this Agreement, including Sections 3.1, 3.4,
7.12, 7.14, 7.15, 8.2, 8.3, 9.2(a), 9.4(c) 9.4(e), 9.4(g), 9.4(i), 10.2 or 10.3,
upon notice of the election, this Agreement will be deemed amended, without any
further action on the part of any party, with respect to each dropped Property,
as follows:
(i) the definition of Properties will not include that
Property, except to the extent that any provision that is stated to survive the
termination of this Agreement would be applicable to a Property, as applicable,
and with respect to this Section 7.16 to the extent necessary to implement this
Section 7.16;
(ii) Seller will not have any obligations with respect to the
dropped Property, nor will any covenant, representation or warranty be deemed
made with respect to the dropped Property except to the extent that any such
covenant, representation or warranty is stated to survive the termination of
this Agreement, and Purchaser will not have any rights or obligations under this
Agreement with respect to the dropped Property and any condition that relates to
such dropped Property, including the Assumed Indebtedness with respect thereto,
shall be deemed not to exist;
(iii) if applicable, the definition of Assumed Indebtedness will
be deemed amended to exclude any Indebtedness relating to such Property;
(iv) Intentionally Omitted;
(v) the Purchase Price will be reduced by the allocable
purchase price of the that Property, as applicable, as set forth in the letter
agreement described in Section 7.7; and
(vi) if any dropped Property is cross collateralized with any
other Property then all such cross collateralized cross defaulted Properties
shall be deemed dropped.
7.17 DELIVERY OF FINANCIAL STATEMENTS. Seller agrees that, provided
Purchaser has executed and delivered any engagement letter as may be required by
Ernst and Young ("E&Y"), Seller will commission and cause E&Y, its independent
accountants, to provide Purchaser, at Purchaser's expense, with (a) a combined
statement of operations for the Purchased Assets for the year ended December 31,
2001, together with the related balance sheet as of December 31, 2001, audited
by E&Y, (b) a combined statement of operations for the Purchased Assets for the
nine month period ended September 30, 2002, together with the related balance
sheet as of September 30, 2002, reviewed by E&Y, and (c) a "management's
discussion and analysis" section comparing and explaining specific line items in
the foregoing statements. Such financial statements and related information may
be included in public filings made by Purchaser, with the requisite consent of
E&Y, at the times required by, and to the extent required by, applicable
securities laws or rules or policies of the NYSE or, as reasonably determined by
Purchaser to be advisable in connection with an offering of its securities. In
addition, at Purchaser's election, Purchaser may have another accounting firm
audit the statements referred to in this Section, and
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Seller, shall provide access to the information necessary to perform such audit
to be provided. This provision shall survive Closing.
7.18 INSURANCE AND OTHER MATTERS. (a) Intentionally Omitted.
(b) To the extent Seller has made claims under their property casualty
insurance policies relating to casualties occurring before the date of this
Agreement that have not been restored fully or fully paid for before Closing,
Seller will deliver to Purchaser promptly after receipt of any insurance
proceeds the amount of those proceeds less any reasonable costs of collection
and any amounts expended by Seller to restore the casualty not previously
reimbursed under the relevant insurance policy and Purchaser will assume the
obligations to restore and pay for work not fully paid before Closing. To the
extent Seller has previously collected insurance proceeds in respect of a
casualty but has not expended same or all of these proceeds to restore the
casualty before closing, Seller will deliver the remaining unspent proceeds (net
of any reasonable costs to collect the proceeds) to Purchaser and Purchaser will
be deemed to have assumed any contracts or agreements relating to the
restoration of that casualty and will perform Seller's obligations thereunder
from and after the Closing. The provisions of this Section 7.18 shall survive
Closing.
(c) For a period not to exceed two (2) years following the Closing as
long as Purchaser or its Subsidiaries own the Purchased Assets, Purchaser shall
maintain the Purchased Assets so owned under Purchaser's blanket insurance
policy.
7.19 POST-CLOSING ACCESS. After the Closing, Purchaser will from time to
time, upon reasonable notice and during normal business hours, afford Seller
access to all books and records of the Properties that relate to the period of
Seller's ownership, including without limitation all accounting records and
employment and compensation data relating to employees employed by Seller, for
tax, accounting or other legal purposes. Purchaser will afford Seller reasonable
access to former employees of Seller or other Persons to assist Seller in its
review of those records. Purchaser will maintain all records relating to the
Properties for the maximum time period required to comply with all applicable
federal and state audit periods.
7.20 PURCHASER'S BOARD APPROVAL. Purchaser shall use its good faith
efforts to complete its due diligence in time for the scheduled board of
director's meeting on November 6, 2002 and to use its good faith efforts to
submit and recommend for approval the transactions contemplated under this
Agreement (subject to Purchaser's findings during its Due Diligence) and this
Agreement at such meeting (as it may be delayed).
VIII. CASUALTY AND CONDEMNATION
8.1 IN GENERAL. If, prior to the Closing Date, a Property is destroyed or
damaged by fire or other casualty or Seller receives notice of condemnation or
sale in lieu of condemnation of a Property, Seller will notify Purchaser of that
event and provide Purchaser with details of the extent of the damage or
condemnation, which details shall include information as to the Leases that are
impacted and Seller's restoration plans.
8.2 MINOR LOSS. Purchaser shall be bound to purchase the Purchased Assets
for the full Purchase Price as required by the terms hereof without regard to
the occurrence or effect of
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any damage to Properties or destruction of improvements thereon or condemnation
of any portion of a Property except as set forth below, provided that no
Significant Portion of any Property is (a) damaged or destroyed or (b) condemned
in whole or part. Seller will not be obligated to repair or restore such damage
or destruction or condemned Property, but Seller will either (i) if all
insurance or condemnation proceeds have been received, credit to Purchaser at
Closing an amount equal to the amount of casualty insurance proceeds and
condemnation proceeds collected by Seller as a result of such damage or
destruction or condemnation, of any deductible payable under Seller's insurance
policies (not to exceed the amount of loss not covered by insurance) and the
amount of insurance proceeds that would have been collected by Seller but for
the application of any "aggregate limits" under the insurance policies less any
sums expended by Seller toward the restoration or repair of the Properties or in
collecting insurance or condemnation proceeds, or (ii) credit to Purchaser at
Closing an amount equal to the amount of casualty insurance proceeds and
condemnation proceeds collected by Seller plus the amount of any deductible
payable under Seller's insurance policies (not to exceed the amount of loss not
covered by insurance) and the amount of insurance proceeds that would have been
collected by Seller but for the application of any "aggregate limits" under the
insurance policies less any sums expended by Seller toward restoration or repair
of the Properties or in collecting insurance or condemnation proceeds and give
Purchaser an assignment of Seller's right to receive insurance or condemnation
proceeds if any portion of the insurance or condemnation proceeds are not
collected before the Closing less, to the extent not previously deducted from
the proceeds credited to Purchaser at Closing, any sums expended before the
Closing to repair or restore the Properties or to collect insurance or
condemnation proceeds. The proceeds of any rent insurance paid in respect of any
casualty will be apportioned between Seller and Purchaser as if the same were
Rentals, as and when received.
(a) Notwithstanding anything herein to the contrary, to the extent there
is an uninsured loss, Purchaser shall receive a credit against the Purchase
Price for same unless Seller is not in breach of its obligations under Section
6.1(j) to keep the Properties insured and Seller elects by written notice within
5 Business Days (or Closing if Closing is in less than 5 Business Days) of
notice from Purchaser that there is an uninsured loss to drop the Property, in
which case such Property shall be dropped and there will be no such credit.
Notwithstanding anything herein to the contrary, if Seller elects to drop a
Property as aforesaid, Purchaser shall have the right to waive the credit for
the uninsured loss with respect to such Property, nullify Seller's election to
drop such Property, and close without an adjustment to the Purchase Price for
such uninsured loss.
8.3 MAJOR LOSS. If a Significant Portion of any Property is damaged or
destroyed or condemned (a "Major Loss"), then within 20 days after receipt of
notice of the Major Loss, Purchaser must give notice to Seller of its intention
to close the transaction in accordance with Section 8.2 as if a Major Loss had
not occurred and receive the benefits of Section 8.2 or to drop any or all of
the Properties affected by the Major Loss. In no event will Seller be obligated
to repair or restore such damage or destruction or condemnation.
8.4 ADDITIONAL MATTERS. With respect to any Property that Purchaser will
acquire subject to the benefits of Section 8.2:
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(a) RESTORATION PLANS. Seller will obtain Purchaser's approval, which
will not be unreasonably withheld, delayed or conditioned, concerning any
restoration, repair or re-construction plans for the Property. Notwithstanding
the foregoing or Section 6.1(g), Seller will be permitted to incur or enter into
an agreement to incur any amount reasonably necessary to effect emergency or
necessary repairs related to preservation of the Property or health and safety
matters or which are required by the terms of any lease, REA, loan document, or
other agreement to which Seller is a party.
(b) SETTLEMENT OF CLAIMS. Seller will allow Purchaser to participate in
the negotiations regarding the settlement of any claim for insurance and
condemnation proceeds and will not settle or compromise any claims related to
the damage, destruction or condemnation under the relevant insurance policies or
against a Governmental Entity effecting the condemnation without Purchaser's
consent, which consent will not be unreasonably withheld, delayed or
conditioned. Seller will provide to Purchaser copies of any correspondence
relating to any such claims and will advise Purchaser of all material
developments concerning such claims.
(c) COOPERATION. Seller will cooperate with Purchaser to effect the
assignment of the right to receive insurance or condemnation proceeds to
Purchaser and will execute and deliver all such instruments as are reasonably
necessary to complete that assignment. This obligation will survive the Closing.
IX. CLOSING
9.1 CLOSING. Subject to the satisfaction or waiver of all of the
conditions to closing contained in Article IX hereof, the closing of the
Transfer (the "Closing") will take place at 9:00 a.m.,
New York time, on a date
that the closing occurs under the Sale Agreements (as extended by mutual consent
of Purchaser and Seller, or as extended pursuant to Section 3.4(i) the "Closing
Date"), subject to the satisfaction or waiver of the conditions set forth in
Article IX (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the fulfillment or waiver of those conditions),
at Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless
another time, date or place is agreed to in writing by the parties. Purchaser
and Seller shall endeavor to enter into a commercially reasonable escrow
agreement with the Escrow Holder to facilitate the Closing.
9.2 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE TRANSFER. The
respective obligations of each party to effect the Transfer will be subject to
the satisfaction or waiver by each of Purchaser and Seller at or prior to the
Closing Date of the following conditions:
(a) NO INJUNCTION OR RESTRAINT. No judgment, order, decree or Law
entered, enacted, promulgated, enforced or issued by any court or other
Governmental Entity of competent jurisdiction or other legal restraint or
prohibition (collectively, "Restraints") shall be in effect preventing the
consummation of the Transfer; provided, however, that the terminating party
shall have used its reasonable best efforts to prevent the entry of and to
remove any such Restraints. Provided, however, Purchaser can elect to drop any
Property subject to such Restraint, such that there will no longer be a
Restraint with respect to a Purchased Asset and therefore this condition will be
deemed satisfied.
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(b) BOARD APPROVAL. Purchaser has obtained the consent of its Board of
Directors at or prior to the expiration of the Contract Due Diligence Period.
(c) ASSUMED INDEBTEDNESS. Subject to the Property dropping, prepayment
and delayed closing mechanism for the Assumed Indebtedness under Section 7.14,
all conditions required by the holders of the Assumed Indebtedness for Purchaser
to assume the Assumed Indebtedness shall have been satisfied, including delivery
of all legal opinions, subordination of management agreements, and other
instruments required by the holders of the Assumed Indebtedness to be delivered
by Purchaser.
(d) Subject to the delayed closings for individual Properties under this
Agreement or individual properties under the Sale Agreements, the closing occurs
under the Sale Agreements contemporaneously with the Closing under this
Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligation of Seller to
effect the Transfer is further subject to satisfaction or waiver by Seller of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES OF PURCHASER. The representations and
warranties of Purchaser set forth in this Agreement shall be true and correct at
and as of the Closing Date, as if made at and as of that time (except to the
extent expressly made as of an earlier date, in which case as of that date), in
all material respects and Seller will have received a certificate (which may be
qualified by knowledge to the same extent as the representations and warranties
of Purchaser are so qualified) signed on behalf of Purchaser by an authorized
officer of Purchaser, in that capacity, to that effect.
(b) PERFORMANCE OF COVENANTS OF PURCHASER. Purchaser shall have performed
in all material respects all covenants required to be performed by it under
Section 3.3 hereof prior to the Closing. Purchaser shall have executed and
delivered all documents and instruments required to be executed and delivered by
it under this Agreement at the Closing, Purchaser shall have delivered payment
of the Purchase Price (after application of the Deposit plus any interest and
other investment income thereon as provided in Section 2.1 and Purchaser shall
not have breached in any material respect any covenant that prevents Seller from
fulfilling its obligations under this Agreement or otherwise frustrates the
closing of the transactions contemplated under this Agreement.
(c) CLOSING DELIVERIES OF PURCHASER. Seller will have received from
Purchaser the following items:
(i) the Purchase Price (after application of the Deposit plus
any interest and other investment income thereon as provided in Section 2.1),
after all adjustments are made at the Closing in accordance with this Agreement
including without limitation Section 2.4;
(ii) a counterpart original of the Lease Assignment and Tenant
Loan Assignment, duly executed by Purchaser;
(iii) a counterpart original of the Contract Assignment, duly
executed by Purchaser;
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(iv) a written notice, in the form attached hereto as Exhibit
9.3(c)(iv), executed by Purchaser and Seller and to be addressed and delivered
to the Tenants of the Properties, (i) acknowledging the sale of the applicable
Property to Purchaser, (ii) acknowledging that Purchaser has received and that
Purchaser is responsible for the Tenant Deposits (specifying the exact amount of
the Tenant Deposits), (iii) indicating that rent should thereafter be paid to
Purchaser and giving instructions therefor and (iv) that the property manager
has been changed (the "Tenant Notice Letters");
(v) Intentionally Omitted;
(vi) Intentionally Omitted;
(vii) if applicable, a counterpart original of the Indemnity
Agreement in the form of Exhibit 6.4, duly executed by Purchaser;
(viii) any certificates or similar documents, if any, required by
a Governmental Entity in connection with the sale of the Purchased Assets;
(ix) a counterpart original of the Closing Statement duly
executed by Purchaser;
(x) Intentionally Omitted;
(xi) a counterpart original of the Closing Escrow Agreement,
duly executed by Purchaser; and
(xii) if required by Purchaser, a counterpart original of the
Transitional Services Agreement, duly executed by Purchaser.
9.4 CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser
to effect the Transfer is further subject to satisfaction or waiver by Purchaser
of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. The representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all material respect at and as of the Closing Date, as if made at and as of that
time (except to the extent expressly made as of an earlier date, in which case
as of that date), in all respects and Purchaser will have received a certificate
(which may be qualified by knowledge to the same extent as the representations
and warranties of Seller are so qualified) signed on behalf of Seller by an
authorized officer of Seller, in that capacity, to that effect which shall be
deemed a representation and warranty of Seller as of the Closing Date.
(b) PERFORMANCE OF COVENANTS OF SELLER. Seller shall have performed in
all material respects all covenants required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) INTENTIONALLY OMITTED.
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(d) CLOSING DELIVERIES OF SELLER. Purchaser will have received from
Seller the following items:
(i) one or more special warranty deeds, as applicable,
substantially in the form attached hereto as Exhibit 9.4(d)(i) (the "Deed"),
duly executed and acknowledged by the Seller for all Purchased Assets that are
appropriately the subject of sale by such instrument;
(ii) one or more bills of sale in the form attached hereto as
Exhibit 9.4(d)(ii) (the "Xxxx of Sale"), duly executed by Seller for all
Purchased Assets that are appropriately the subject of sale by such instrument;
(iii) one or more assignments of Seller's interest, as lessor, in
the Leases and the Tenant Deposits in the form attached hereto as Exhibit
9.4(d)(iii) (the "Lease Assignment"), duly executed by Seller for all Purchased
Assets that are appropriately the subject of assignment by such instrument;
(iv) one or more assignments of Seller's interest in the
Contracts and the Licenses and Permits in the form attached hereto as Exhibit
9.4(d)(iv) (the "Contract Assignment"), duly executed by Seller for all
Purchased Assets that are appropriately the subject of assignment by such
instrument;
(v) the Tenant Notice Letters, duly executed by Seller;
(vi) a certificate in the form attached hereto as
Exhibit 9.4(d)(vi) certifying that Seller is not a "foreign person" as defined
in Section 1445 of the Internal Revenue Code of 1986, as amended, as well as any
other document required under applicable laws to be executed by Seller in
connection with any recordation and/or transfer tax applicable to the
transaction contemplated by this Agreement, duly executed by Seller;
(vii) a counterpart original of the Closing Statement, duly
executed by Seller;
(viii) the Tenant Deposits, either (x) as part of an adjustment to
the Purchase Price, or (y) in the form of letters of credit from Tenants of
which Purchaser is the beneficiary;
(ix) a schedule showing any changes as of 5 Business Days prior
to the Closing Date, to the Rent Roll and Schedules 4.5(c)-1 and 4.5(c)-2;
(x) an assignment, if necessary, in form and substance
reasonably satisfactory to Purchaser of all rights to condemnation awards or
insurance proceeds, if any, relating to any Property and of the right to
prosecute and adjust all proceedings and claims in connection therewith, duly
executed by Seller in accordance with Sections 7.18 and Article VIII;
(xi) Intentionally Omitted;
(xii) Intentionally Omitted;
(xiii) Intentionally Omitted;
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(xiv) Intentionally Omitted;
(xv) IRS Form 1099 duly executed by Seller;
(xvi) corporate resolutions authorizing the transactions
contemplated hereunder and execution of the closing documents, and certificates
of incumbency certifying the titles and signatures of the corporate officers
authorized to consummate the sale on behalf of Seller or such other reasonable
evidence of Seller's power and authority;
(xvii) all original Leases, Contracts, property management
agreements, Assumed Loan Documents, documents related to the Assumed
Liabilities, REAs, Licenses and Permits, Records and Plans, and all other
documentation relating to the Purchased Assets or the Properties in Seller's
possession;
(xviii) the title affidavits attached hereto as Exhibit 6.1(n) and
the other affidavits, documents and information set forth in Section 6.1(n);
(xix) any transferable bonds, warranties or guaranties which are
in any way applicable to the Properties, and are in Seller's or its
Subsidiaries' possession or control, together with an assignment thereof duly
executed by Seller in form and substance reasonably acceptable to Purchaser;
(xx) any certificates or similar documents, if any, required by
any Governmental Entity in connection with the sale of the Purchased Assets;
(xxi) an assignment of Seller's interest in any loans to tenants
(including all loan documents related thereto) in the form of Exhibit
9.4(d)(xxi) (the "Tenant Loan Assignment") duly executed by Seller for all
Purchased Assets that are appropriately the subject of assignment by such
instrument;
(xxii) the Closing Escrow Agreement duly executed by Seller;
(xxiii) evidence of appointment of Rhino Investment Group, LLC as
agent for Seller;
(xxiv) the Tenant estoppel certificates and Seller estoppel
certificates as provided for in Section 6.3, and the certificates with respect
to the REAs as provided for in Section 6.11;
(xxv) a certificate of Seller stating the principal balance of
the Assumed Indebtedness as of the date of Closing;
(xxvi) an updated list of Material Contracts as of a date no more
than 3 Business Days before the Closing Date;
(xxvii) a letter from Seller directing its attorneys and
accountants who are in possession of any Records and Plans and loan documents
relating to the Properties to deliver copies thereof to Purchaser upon request
of Purchaser and at Purchaser's expense;
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(xxviii) If required by Purchaser, a counterpart original of the
Transitional Services Agreement, duly executed by Seller;
(xxix) Intentionally Omitted;
(xxx) Evidence reasonably acceptable to Purchaser that Purchaser
and its permitted designees under this Agreement were added as an additional
named insured under the Existing Environmental Insurance Policy or an indemnity
agreement reasonably acceptable to Purchaser as set forth in Section 7.9 and
delivery of Indemnitor's Acknowledgement, if any that is obtained; and
(xxxi) all other documents reasonably required by Purchaser in
order to perfect the conveyance, transfer and assignment of the Properties or of
the other Purchased Assets, including without limitation, any assignments of tax
certiorari claims that are required pursuant to this Agreement and any notices
to third parties under REAs and Material Contracts.
(e) Purchaser shall have received the lender estoppels substantially in
the form or otherwise acceptable to Purchaser referred to in Section 6.9.
(i) However, if a lender estoppel is not obtained, Purchaser
can elect to drop the Property encumbered by the Assumed Indebtedness for which
such lender estoppel is not obtained. If Purchaser so elects to drop such
Property, Seller shall have the right to nullify the election to drop such
Property (unless Purchaser waives the condition to deliver such lender estoppel)
by electing to treat the failure to obtain such lender estoppel as a deemed
failure to obtain the respective holder's consent to the assumption of the
respective Assumed Indebtedness for purposes of this Agreement.
(f) INTENTIONALLY OMITTED.
(g) REQUIRED LEASES. All of the leases on Schedule 9.4(g) shall be in
full force and effect in accordance with the terms and conditions as set forth
on Schedule 9.4(g) and other customary terms and conditions for similar leases
in the Properties. If the foregoing is not satisfied at Closing or waived by
Purchaser, then Purchaser shall have the following two options (i) delay the
Closing pursuant to Section 9.4(g)(i) for the Property associated with such
lease or (ii) drop the Property on Schedule 9.4(g) associated with such lease.
Exercise of either of the foregoing options by Purchaser shall be deemed
satisfaction of the applicable condition. Seller may satisfy this condition with
a lease to a different Tenant reasonably acceptable to Purchaser with the same
terms and conditions as set forth on Schedule 9.4(g) with respect to the lease
that it is replacing (such lease or a lease set forth on Schedule 9.4(g) with
the same terms and conditions that are set forth on Schedule 9.4(g) and other
reasonable and customary terms and conditions for similar leases in of the
Properties are collectively, a "Required Lease"). In addition, if a Required
Lease is in full force and effect as of the Closing (or Purchaser has waived
such requirement and a Required Lease is still not in full force and effect),
(x) but the rent under such Required Lease will not commence at the time set
forth on Schedule 9.4(g), Purchaser shall receive a credit against the Purchase
Price in the amount of the rent that would have been paid for the period between
the rent commencement date set forth on Schedule 9.4(g) and the actual rent
commencement date and/or (y) but the rent under such Required Lease is less
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than that set forth on Schedule 9.4(g), Purchaser shall receive a credit against
the Purchase Price in an amount equal to applying the cap rate for such Property
set forth on Schedule 9.4(g) to the difference between the actual yearly Rent
and the Rent set forth on Schedule 9.4(g).
(i) If a Required Lease is not executed at or prior to Closing,
Seller may elect, in its sole discretion and by written notice to Purchaser not
later than two (2) Business Days prior to Closing to delay the closing for each
affected Property. If Seller elects to delay the closing for an affected
Property, the sale and purchase of such affected Property and the assumption of
the liabilities relating thereto will be delayed until the Required Lease(s)
associated therewith on Schedule 9.4(g) is in full force and effect (but not
later than six months from the Main Closing Date) (as if such deferred date is
the "Closing Date" with respect to such affected Property), and at the Closing
the transactions contemplated hereby other than with respect to such affected
Property (and any delayed closing pursuant to Section 7.14) shall be consummated
and the Purchase Price payable at Closing shall be reduced by the allocable
purchase price of such affected Property as set forth in the letter agreement
referred to in Section 7.7 and the Assumed Indebtedness at Closing will not
include the Assumed Indebtedness with respect to such affected Property and all
other conditions and obligations with respect to such affected Property shall
not constitute conditions and obligations with respect to the Closing of the
Properties for which the Closing is not delayed hereunder. Subject to the
conditions set forth in Sections 9.2, 9.3 and 9.4, as they relate to such
affected Property the closing of the sale and purchase of such affected Property
and the assumption of the liabilities relating thereto will take place no later
than 10 Business Days following the date the Required Lease(s) associated
therewith on Schedule 9.4(g) is in full force and effect and the purchase price
to be paid by Purchaser for such affected Property will be equal to the
allocable purchase price set forth in the letter agreement referred to in
Section 7.7 subject to all applicable adjustments set forth herein. Such delayed
closing shall be deemed the "Closing" and the date thereof the "Closing Date"
with respect to such affected Property. If a Required Lease(s) associated
therewith on Schedule 9.4(g) is not in full force and effect by the Closing (as
it may have been delayed), then at Purchaser's election by written notice to
Seller such affected Property will be dropped. All obligations, liabilities,
conditions and provisions set forth in this Agreement, as applicable, shall
continue in full force and effect with respect to the delayed closing for such
affected Property pursuant to this Section 9.4(g).
(ii) If the condition set forth in this Section 9.4(g) is not
satisfied as of the Closing (as it may have been delayed), and Purchaser does
not elect to drop such Property, then such condition shall be waived with
respect to such Required Lease and upon the Closing Purchaser shall receive a
credit against the Purchase Price as set forth above.
(h) INTENTIONALLY OMITTED.
(i) SELLER MATERIAL ADVERSE EVENT (WITH RESPECT TO ITEMS OTHER THAN (iv)
IN THE DEFINITION OF SELLER MATERIAL ADVERSE EVENT). In the event Seller
Material Adverse Event shall have occurred, then Purchaser shall have the
following options (i) drop any or all of the Properties impacted by such Seller
Material Adverse Event or (ii) waive the condition. Exercise of the foregoing
option by Purchaser shall be deemed satisfaction of the applicable condition.
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X. TERMINATION, DEFAULT, AMENDMENT AND WAIVER
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual written consent of the parties at any time prior to
Closing, whereupon Purchaser will be entitled to the return of the Deposit plus
any interest or other investment income earned thereon and Seller shall deliver
and/or cause the Escrow Holder to deliver the same to Purchaser;
(b) by either Purchaser or Seller, if any Restraint having the effects
set forth in Section 9.2(a) shall be in effect and shall have become final and
nonappealable, in which case Purchaser will be entitled to the return of the
Deposit plus any interest or other investment income earned thereon and Seller
shall deliver and/or cause the Escrow Holder to deliver the same to Purchaser,
provided that the party seeking to terminate this Agreement pursuant to this
Section 10.1(b) shall have used its reasonable best efforts to prevent entry of
and to remove such Restraint;
(c) by either Seller or Purchaser, upon thirty (30) day's prior written
notice, if the Transfer is not consummated by the Closing Date, or such later
date for the applicable Properties as extended under Section 7.14 or 9.4(g) or
to which the parties may agree in their respective sole discretion, in which
case Purchaser will be entitled to the return of the Deposit plus any interest
or other investment income earned thereon and Seller shall deliver and/or cause
the Escrow Holder to deliver the same to Purchaser, provided, in the case of
termination pursuant to this Section 10.1(c), the terminating party shall not
have breached in any material respect its obligations under this Agreement in
any manner that shall have proximately contributed to the occurrence of the
failure referred to in this Section and the terminating party shall not be in
breach of Section 9.4(a) if it is the Seller or Section 9.3(a) if it is the
Purchaser;
(d) by Purchaser as provided in or permitted by Sections 10.2 and 10.3,
or by Seller as provided in or permitted by Section 3.1, in which case Purchaser
will be entitled to the return of the Deposit plus any interest or other
investment income earned thereon and Seller shall deliver and/or cause the
Escrow Holder to deliver the same to Purchaser;
(e) automatically, with no further action by either party if all
Properties are duly dropped under this Agreement or by either Purchaser or
Seller if any Property is duly dropped under this Agreement, in which case
Purchaser will be entitled to the return of the Deposit plus any interest or
other investment income earned thereon and Seller shall deliver and/or cause the
Escrow Holder to deliver the same to Purchaser; and
(f) by either Seller or Purchaser, if a Sale Agreement is duly
terminated, in which case Purchaser will be entitled to the return of the
Deposit plus any interest or other investment income earned thereon and Seller
shall deliver and/or cause the Escrow Holder to deliver the same to Purchaser.
10.2 PRE-CLOSING BREACHES. (a) Purchaser will promptly provide written
notice (the "Pre-Closing Breach Notice") to Seller upon having knowledge of (i)
any breach by Seller prior to Closing of its representations and warranties set
forth in this Agreement (ii) any breach by
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Seller of its covenants, and/or (iii) failure to deliver any document required
under Section 9.4(d) which is an Exhibit hereto (other than the lender estoppel
certificates as provided for in Section 6.9 and the certificates with respect to
the REAs as provided for in Section 6.11) or any other document that Seller
deliberately, intentionally and unreasonably fails to deliver (collectively,
(but excluding in each case (x) matters constituting Material Title Defects or
otherwise the subject of Section 3.4 and (y) any matter related to the physical,
structural and environmental condition (except a breach of Section 4.6) of the
Properties (which are governed under Article 8) "Pre-Closing Breaches"). Such
notice shall state Purchaser's Cure Value.
10.3 DEFAULTS AND REMEDIES. (a) Notwithstanding anything to the contrary
contained in this Agreement, if there is a Pre-Closing Breach or the Closing
does not occur by the scheduled Closing Date by reason of any Seller default and
Seller fails to cure such breach or default, Purchaser as its sole remedy may
elect any one of or any combination of the following:
(i) Drop the Property affected by such Pre-Closing Breach;
(ii) terminate this Agreement and receive the return of the
Deposit, including all interest and other investment income earned thereon, and
Seller shall deliver and/or cause the Escrow Holder to deliver the same to
Purchaser, at which time this Agreement will be null and void and neither party
will have any rights or obligations under this Agreement, except for the
provisions that are expressly stated to survive the termination of this
Agreement;
(iii) waive such Pre-Closing Breach and proceed to Closing
without any adjustment against the Purchase Price with respect to such
Pre-Closing Breach; or
(iv) xxx for specific performance of Seller's obligations under
this Agreement.
Except as provided in this Section 10.3 and Section 11.2, Purchaser will have no
other remedy or right to seek any other damages at law or remedy in equity with
respect to such default. It is understood and agreed that Purchaser shall have
the right and remedy of injunctive relief and specific performance under Section
12.7 to enforce Seller's or a Subsidiaries' obligations hereunder.
(b) Notwithstanding anything to the contrary contained in this Agreement,
if (i) Purchaser shall have failed to pay the Purchase Price at the Closing or
if Purchaser has failed to satisfy Section 9.3(b) or (ii) if any of Purchaser's
representations or warranties set forth in this Agreement shall not be true,
correct and complete on the Closing Date as if made at and as of that time
(except to the extent expressly made as of an earlier date, in which case as of
that date), in all material respects, Seller's sole and exclusive remedy will be
to terminate this Agreement and to receive the Deposit, together with all
interest and other investment income earned thereon, as liquidated damages, at
which time this Agreement will be null and void and neither party shall have any
rights or obligations under this Agreement, except for such provisions that are
expressly stated to survive the termination of this Agreement. Seller and
Purchaser acknowledge and agree that (i) the Deposit and any interest and other
investment income earned thereon is a reasonable estimate of and bears a
reasonable relationship to the damages that would be suffered and costs incurred
by Seller as a result of having withdrawn the Purchased Assets from sale and the
failure of Closing to occur due to a default of Purchaser under this Agreement;
(ii) the actual damages suffered and costs incurred by Seller as a result of
such withdrawal and failure to close
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due to a default of Purchaser under this Agreement would be extremely difficult
and impractical to determine; (iii) Purchaser seeks to limit its liability under
this Agreement to the amount of the Deposit and any interest and other
investment income earned thereon in the event this Agreement is terminated and
the transaction contemplated by this Agreement does not close due to a default
of Purchaser under this Agreement; and (iv) the Deposit and any interest and
other investment income earned thereon shall be and constitutes valid liquidated
damages; provided, however, Purchaser and Seller agree that the liquidated
damages do not apply to any indemnity obligation of Purchaser under this
Agreement that survives termination of this Agreement.
10.4 EFFECT OF TERMINATION. In the event of termination of this Agreement
by either Seller or Purchaser as provided in Sections 10.1 or 10.3, this
Agreement will forthwith become void and have no further effect, without any
liability or obligation on the part of Purchaser or Seller (other than Sections
3.2 and 3.3, Section 7.1, Sections 10.3, 11.2(b) and 11.3(b) and this Section
10.4 and Article XII, and any other Section which expressly is stated to survive
termination, which provisions survive such termination) and except for the
obligation to return the deposit to Purchaser, if Purchaser is entitled to same.
10.5 AMENDMENT. This Agreement may be amended by the parties in writing by
applicable corporate or partnership action at any time before the Closing Date.
This Agreement may not be amended except by an instrument in writing signed on
behalf of all the parties.
10.6 EXTENSION; WAIVER. At any time prior to the Closing Date, the parties
may (a) extend the time for the performance of any of the obligations or other
acts of the other party, (b) waive any inaccuracies in the representations and
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance with any of the
agreements or conditions of the other party contained in this Agreement. Any
agreement on the part of a party to any such extension or waiver will be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise will not constitute a waiver of those rights.
10.7 WAIVER OF PRE-CLOSING BREACHES. Notwithstanding anything herein to
the contrary, Purchaser's waiver of any Pre-Closing Breach and election to Close
over any such Pre-Closing Breach, shall constitute a waiver by Purchaser of only
such Pre-Closing Breach.
XI. SURVIVAL; INDEMNIFICATION
11.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties to this Agreement shall survive the Closing Date for a
period of twelve (12) months following the Closing Date except for those in
Sections 4.8, 4.10, and Section 7.8, which shall survive indefinitely. Article
II shall survive until the Final Closing Adjustment is made, unless a longer
time for survival is specifically set forth therein.
11.2 INDEMNIFICATION BY SELLER. (a) From and after the Closing Date,
Seller shall, subject to the provisions of this Article XI, indemnify, defend
and hold harmless Purchaser and its subsidiaries and their respective officers,
directors, employees, agents, representatives, successors and permitted assigns
(collectively, the "Purchaser Indemnitees"), from and against
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any and all actions, proceedings, costs, damages (excluding consequential and
other indirect damages other than diminution in value of the Purchased Assets
resulting from an event subject to indemnification hereunder), claims, losses,
liabilities (absolute and contingent), fines, penalties, payments, costs and
expenses (including reasonable counsel, consultants, and engineering fees and
expenses, interest, penalties and disbursements, but excluding any costs,
damages, claims, liabilities, fines, penalties, payments, costs and expenses to
the extent that an indemnitee recovers with respect thereto pursuant to any
insurance policy) (collectively, "Losses"), that may be asserted against or
suffered or incurred by Purchaser Indemnitees arising out of, or relating to,
any Pre-Closing Property Liabilities (other than Employee Related Liabilities)
and/or any breach of any representation or warranty, covenant or agreement
(excluding same by Seller which are indemnified under other subsections of this
Section 11.2) by Seller made in this Agreement or any document or instrument
delivered pursuant hereto (including any Seller estoppel delivered under Section
6.3). This Section 11.2 will include Pre-Closing Breaches that are not waived or
cured and to the extent such Pre-Closing Breaches survive Closing pursuant to
this Agreement.
(b) Seller shall indemnify and hold harmless Purchaser Indemnitees from
and against any and all Losses that may be asserted against or suffered or
incurred by Purchaser Indemnitees arising out of, or relating to, all brokers
and finders (including X.X. Xxxxxx Securities Inc.) claiming by, through or
under Seller and in any way relating to the sale and purchase of the Purchased
Assets pursuant to this Agreement. The foregoing indemnification shall not apply
to Lease Expenses which shall be governed by Section 2.4.
(c) Seller shall indemnify and hold harmless the Purchaser Indemnitees
from and against any and all Losses that may be asserted against or suffered or
incurred by the Purchaser Indemnitees arising out of, or relating to, any breach
of Seller's representations and warranties in Section 4.8, and the Employee
Related Liabilities and any 1031 Transaction of Seller (but not Purchaser's 1031
Transaction (collectively, with the liabilities under Section 11.2(b), the
"Non-Capped Liabilities").
11.3 INDEMNIFICATION BY PURCHASER. (a) From and after the Closing Date,
Purchaser, subject to the provisions of this Article XI, shall indemnify, defend
and hold harmless Seller and its Subsidiaries and their respective members,
partners, managers, officers, directors, employees, agents, representatives,
successors and permitted assigns (collectively, the "Seller Indemnitees"), from
and against any and all Losses that may be asserted against or suffered or
incurred by the Seller Indemnitees arising out of, or relating to, any breach of
any representation, warranty, covenant or agreement on the part of Purchaser
made in this Agreement or any document or instrument delivered pursuant hereto,
any Assumed Liabilities, any 1031 Transaction of Purchaser (but not Seller's
1031 Transaction), if any, or any violation or alleged violation of federal or
state securities laws resulting from the disclosure of or omission of
information in any securities filing or offering document of Purchaser
concerning Seller or the Subsidiaries.
(b) Purchaser shall indemnify and hold harmless Seller Indemnitees from
and against any and all Losses that may be asserted against or suffered or
incurred by Seller Indemnitees arising out of, or relating to, all brokers and
finders claiming by, through or under Purchaser and in any way relating to the
sale and purchase of the Purchased Assets pursuant to this Agreement, including,
without limitation, reasonable attorneys' fees and disbursements incurred by
Seller
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Indemnitees in connection with such Losses. The foregoing indemnification shall
not apply to Lease Expenses which shall be governed by Section 2.4.
11.4 NOTICE AND RESOLUTION OF CLAIMS.
(a) NOTICE. Each Person entitled to indemnification pursuant to Section
11.2 or 11.3 (an "Indemnitee") shall give written notice to the indemnifying
party or parties from whom indemnity is sought (the "Indemnifying Party"),
promptly after obtaining knowledge of any claim that it may have under Section
11.2 or 11.3, as applicable. The notice shall set forth in reasonable detail the
claim and the basis for indemnification. Failure to give the notice in a timely
manner shall not release the Indemnifying Party from its obligations under
Section 11.2 or 11.3, as applicable, except to the extent that the failure
materially prejudices the ability of the Indemnifying Party to contest that
claim.
(b) DEFENSE OF THIRD PARTY CLAIMS. If a claim for indemnification
pursuant to Section 11.2 or 11.3 shall arise from any action that involves an
indemnifiable claim brought by third party (a "Third Party Claim"), the
Indemnifying Party may assume the defense of the Third Party Claim, provided the
Indemnifying Party proceeds with diligence and in good faith with respect
thereto. If the Indemnifying Party assumes the defense of the Third Party Claim,
the defense shall be conducted by counsel chosen by the Indemnifying Party,
which shall be reasonably acceptable to Indemnitee, provided that the Indemnitee
shall retain the right to employ its own counsel and participate in the defense
of the Third Party Claim which shall be at its own expense unless (i) the
Indemnitee is advised by counsel reasonably satisfactory to the Indemnifying
Party, that use of counsel of the Indemnifying Party's choice would be expected
to give rise to a conflict of interest, (ii) the Indemnifying Party shall not
have employed counsel to represent the Indemnitee within a reasonable time after
notice of the assertion of any such claim or institution of any such action or
proceeding, or (iii) the Indemnifying Party shall authorize the Indemnitee in
writing to employ separate counsel at the expense of the Indemnifying Party. In
no event shall the Indemnifying Party be obligated to pay the fees and expenses
of more than one counsel (other than local counsel) for all Indemnitees with
respect to any claim indemnified under this Article XI. Notwithstanding the
foregoing provisions of this Section 11.4(b), (i) no Indemnifying Party shall be
entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnitee's prior written consent unless
as part of the settlement the Indemnitee is released from all liability with
respect to the Third Party Claim and the settlement does not impose any
equitable remedy on the Indemnitee, adversely affect the Indemnitee's business
or require the Indemnitee to admit any wrongdoing, and (ii) no Indemnitee shall
be entitled to settle any Third Party Claim for which indemnification is sought
under Section 11.2 or 11.3 without the Indemnifying Party's prior written
consent unless as part of the settlement the Indemnifying Party is released from
all liability with respect to the Third Party Claim and the settlement does not
impose any equitable remedy on the Indemnifying Party, adversely affect the
Indemnifying Party's business or any of its properties or require the
Indemnifying Party to admit any wrongdoing.
11.5 LIMITATIONS ON LIABILITY. (a) Seller's obligations to indemnify the
Purchaser Indemnitees for any Losses pursuant to Section 11.2(a); (i) shall not
be effective unless the aggregate amount of all Losses (but excluding Losses
from any Pre-Closing Breaches) exceeds the Post-Closing Threshold and then only
to the extent of such excess and (ii) in no event shall
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Seller's liability, in the aggregate, under Section 11.2(a) exceed in the
aggregate $1,000,000 (the "Cap"). No payments made to any Person that is not
Purchaser or an Affiliate of Purchaser shall be counted against or otherwise
reduce or be an offset against the Cap. The provisions of this Section shall not
apply to Sections 11.2(b) or (c).
(b) No party shall be entitled to indemnification under Section 11.2(a)
unless the indemnification notice is delivered to the Indemnifying Party on or
before the date that is of twelve (12) months following the Closing Date.
Accordingly, on the day after twelve (12) months following the Closing, Seller
and its Subsidiaries on the one hand, and Purchaser on the other hand, shall be
fully discharged and released (without the need for any separate release or
other documentation) from any and all liability or obligation to the other party
or any successor or assign with respect to indemnification under Section
11.2(a), except solely for those matters that are then the subject of a pending
notice of claim delivered on or prior to such date. The provisions of this
Section shall not apply to Sections 11.2(b) or (c).
(c) Purchaser's liability to any and all Seller Indemnitees is limited to
the direct and indirect interest of Purchaser in and to the Purchased Assets.
11.6 EXCLUSIVE REMEDY. The provisions of this Article XI shall constitute
the sole and exclusive remedy of Purchaser, on the one hand, and Seller, on the
other, for any Losses suffered by either of them from and after the Closing on
account of any breach by the other of any representations, warranties, covenants
or agreements contained in this Agreement or any document or instrument
delivered pursuant hereto (including any Seller estoppel delivered under Section
6.3), except with respect to payment obligations under Article II and the
indemnity obligations under Sections 1.4, 2.7, 3.3, 6.4 and 7.8. Notwithstanding
the foregoing, the remedy of specific performance will be available in respect
of the following covenants that survive Closing: the last sentence of Sections
2.4(b)(v) and 2.7 and 7.9 and Sections 6.1(q), 7.1, 7.2(iv), 7.6(e), 7.13,
8.4(c), and 10.3(a)(ii).
11.7 SECURITY FOR POST CLOSING OBLIGATIONS OF SELLER. On the Closing Date,
as collateral security for the performance of Seller's indemnification
obligations under this Article XI and its obligations under Sections 2.4, 2.5
and 2.6, Seller shall deposit into escrow with Escrow Holder cash or a letter of
credit reasonably acceptable to Purchaser, in the amount of the Cap to be held
in escrow for the period of time beginning on the Closing Date through the
period ending on the later of (a) twelve (12) months after the Closing Date or
(b) the date on which all Claims made within such twelve (12) month period
pursuant to this Agreement have been resolved or otherwise disposed. The amount
held in escrow shall not be reduced by any insurance proceeds received by Seller
or any Subsidiary. In connection therewith, Seller and Purchaser will execute an
escrow agreement (the "Closing Escrow Agreement") with Escrow Holder, in the
form attached as Exhibit 11.7-1. The collateral set forth hereunder shall only
be for the benefit of Purchaser and its Affiliates and no other Person shall
have any rights to such collateral.
XII. GENERAL PROVISIONS
12.1 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement will be in writing (whether expressly set
forth in the body of the document or not) and will be delivered personally, sent
by overnight courier (providing proof of delivery) to
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the parties or sent by fax (providing confirmation of transmission) at the
following addresses or fax numbers (or at such other address or fax number for a
party as will be specified by like notice):
if to Seller, to:
c/o Hickory Operating Partnership, L.P.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attention: X. Xxxx Xxxxxxxx
Telecopy: (000) 000-0000
if to Purchaser to:
New Plan Excel Realty Trust, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy: (000) 000-0000
All notices will be deemed given only when actually received or, if receipt is
refused, upon the date of refusal.
12.2 INTERPRETATION. When a reference is made in this Agreement to a
Section, Exhibit or Schedule such reference will be to a Section, Exhibit or
Schedule of or to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they will be deemed to be followed by the words "without
limitation." No provision of this Agreement will be interpreted in favor of, or
against, any of the parties to this Agreement
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by reason of the extent to which such party or its counsel participated in the
drafting thereof or by any reason of the extent to which such provision is
consistent with any prior draft hereof.
12.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and
will become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. This Agreement may be executed by
facsimile signature.
12.4 ENTIRE AGREEMENT; BINDING EFFECT; NO THIRD-PARTY BENEFICIARIES. This
Agreement and the Schedules and Exhibits attached hereto and the documents and
instruments delivered and to be delivered hereunder constitute the entire
agreement of the parties and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter of
this Agreement, including the letter of intent dated August 19, 2002 from
Purchaser and accepted by Hickory Realty, Inc. but excluding the Confidentiality
Agreement as modified by Section 7.1. This Agreement shall not bind any party
hereto unless and until fully executed by all parties hereto and delivered to
all such parties. This Agreement shall not confer any rights or remedies upon
any Person other than the parties hereto, the Persons entitled to
indemnification hereunder, and in each case their respective successors, heirs,
legal representatives and permitted assigns.
12.5 GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the Laws of the State of
New York, regardless of the Laws that
might otherwise govern under applicable conflicts of law principles thereof.
12.6 ASSIGNMENT. Neither this Agreement, nor any of the rights, interests
or obligations under this Agreement, may be assigned or delegated, in whole or
in part, by operation of law or otherwise by any of the parties without the
prior written consent of the other party. Notwithstanding the foregoing,
Purchaser shall have the right to designate any Affiliate to take title to any
or all of the Purchased Assets by notice to Seller given at least 20 days prior
to Closing (45 days if Purchaser intends to designate an Affiliate other than a
wholly owned Affiliate to take title to any Purchased Assets subject to any
Assumed Indebtedness) provided there is no increase in the costs borne by Seller
under Section 12.9, and provided further Purchaser will remain liable to Seller
with respect to all liabilities and obligations to be assumed by the transferee
with respect to such Purchased Assets and Purchaser will guarantee the
obligations of those Affiliates to the other parties to the Assumed Liabilities
and Assumed Indebtedness if so requested if and to the extent Purchaser would
have been liable to such other party for the Assumed Indebtedness and Assumed
Liabilities had Purchaser not designated an Affiliate to take title to the
Purchased Asset under this Section 12.6. Each such designated Affiliate of
Purchaser shall be entitled to all of the rights and benefits of Purchaser under
this Agreement, without expanding any of such rights. Subject to the foregoing,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by, the parties and their respective successors and permitted assigns.
12.7 ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties will be
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entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement.
12.8 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
12.9 EXPENSES. Except as provided in this Section 12.9, each party will
bear its own costs and expenses related to negotiation and execution of this
Agreement, and obtaining third party consents to the performance of that party's
obligations under this Agreement. Seller will be responsible for all third party
consents or approvals necessary in order for Seller to consummate the
transactions, except for the costs and fees of the holders of the Assumed
Indebtedness (which is set forth below). Purchaser will be responsible for all
fees and costs of any financial advisor to Purchaser, and Seller will be
responsible for the fees and costs of X.X. Xxxxxx Securities, Inc., and any
other financial advisor to Seller. Purchaser will be responsible for all
diligence costs and inspection fees, including without limitation the costs of
environmental and engineering reviews and audits, appraisals, accounting and
other financial reviews. Purchaser and Seller will each pay one half of any
fees, costs and expenses (including debt assumption fees) paid to lenders and
their counsel (or third parties) in obtaining consents for any debt assumptions,
modifications or waiver related to the Assumed Indebtedness. Seller will be
responsible for all costs and expenses related to prepayment penalties, bank
fees and other associated costs to remove and discharge liens which Seller is
obligated to discharge hereunder. Seller and Purchaser will each pay one-half of
(x) any transfer taxes and recording fees (including any documentary stamps and
other similar fees), (y) and the costs to update the existing surveys or obtain
new surveys and (z) any amounts charged for endorsements to the Title Policies
(or the lender's title policies) required by reason of any Assumed Indebtedness.
Purchaser shall receive a credit against the Purchase Price in the amount of
$50,000 for any title insurance premiums and other charges and fees (excluding
however any amounts charged for endorsements to the Title Policies other than
those required by reason of any Assumed Indebtedness, and any cancellation fees
all of which amounts shall be at Purchaser's expense).
12.10 NO RECORDATION. Seller and Purchaser agree that neither this
Agreement nor any memorandum or notice thereof shall be recorded and Purchaser
agrees (a) not to file any notice of pendency or other instrument (other than a
judgment or LIS PENDENS filed by Purchaser in connection with its enforcement of
its rights hereunder) against any of the Properties or any portion thereof in
connection herewith, and (b) to indemnify Seller and the Seller Subsidiaries
against all costs, expenses and damages, including without limitation,
reasonable attorneys' fees and disbursements incurred by the Seller and Seller
Subsidiaries by reason of the filing by Purchaser of such notice of pendency or
other instrument.
12.11 1031 TRANSACTION. Notwithstanding anything to the contrary set forth
herein, Seller may take such steps as Seller shall deem necessary or desirable
to qualify the sale of each Property (or any portion thereof) under Section 1031
of the Code, including the use of, and/or
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assignment of this Agreement to, a "qualified intermediary" within the meaning
of Treas. Regs. Section 1.1031(k)-(g)(4), or the use of any other multiparty
arrangement described in Treas. Regs. Section 1.1031(k)-1(g) and/or in
accordance with revenue procedure 2000-37(a "1031 TRANSACTION"). Purchaser shall
reasonably cooperate (which cooperation shall be at Seller's sole cost and
expense) in so structuring a 1031 Transaction, if so desired by Seller, provided
that such structuring shall not affect Purchaser's rights or obligations
hereunder except to a DE MINIMIS extent. Notwithstanding anything to the
contrary contained herein, in no event shall Purchaser be required to accept
title to any property other than the Property in connection with any such 1031
Transaction. Seller agrees to indemnify Purchaser from and against all losses
resulting from any claim made against Purchaser in connection with such 1031
Transaction by Seller. In addition, Purchaser may take such steps as Purchaser
shall deem necessary or desirable to qualify the purchase of each Property (or
any portion thereof) as a 1031 Transaction including a reverse 1031 Transaction.
Purchaser expressly reserves the right to assign its rights, but not its
obligations, hereunder to a "qualified intermediary" as provided in Treas. Regs.
Section 1.031(k)-1(g)(4) on or before the Closing Date. Seller shall cooperate
(which cooperation shall be at Purchaser's expense) in so structuring a 1031
Transaction, including a reverse 1031 Transaction, if so desired by Purchaser,
provided that such structuring shall not affect Seller's rights hereunder except
to a DE MINIMIS extent. Notwithstanding anything to the contrary contained
herein, in no event shall Seller be required to accept any property other than
cash in connection with any such 1031 Transaction from any entity in
satisfaction of Purchaser's obligation to pay the Purchase Price. Purchaser
agrees to indemnify Seller from and against all losses resulting from any claim
made against Seller in connection with such 1031 Transaction of Purchaser.
12.12 JOINT AND SEVERAL LIABILITY. Each of the Persons that make up Seller
shall be joint and severally liable for the obligations under this Agreement.
[REMAINDER OF PAGE LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized all as of the date first
written above.
RIG XXXX RIVER COMMONS, LLC
By: RHINO INVESTMENT GROUP, LLC, its sole
member
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
RIG PARADISE PAVILION, LLC
By: RHINO INVESTMENT GROUP, LLC, its sole
member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
RIG HILLTOP PLAZA, LLC
By: RHINO INVESTMENT GROUP, LLC, its sole
member
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman
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NEW PLAN EXCEL REALTY TRUST, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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EXHIBIT B
DEFINITIONS
CERTAIN DEFINITIONS. As used in this Agreement, the following terms have
the following meanings when used herein with initial capital letters:
"Affiliate" (or words of similar import) shall mean, as to any Person, any
other Person that, directly or indirectly, is in control of, is controlled by or
is under common control with such Person or is a director or officer of such
Person or of an Affiliate of such Person, and with respect to Seller shall
include without limitation, any Subsidiary, and Rhino Investment Group, LLC and
its Subsidiaries and Hickory Operating Partnership and its Affiliates.
"Agreement" means this
Purchase Agreement by and among Purchaser and Seller
(as it may be amended in writing by Purchaser and Seller).
"AIG" shall mean the insurer under the Existing Environmental Insurance
Policy.
"Applicable Operating Expense Fiscal Year" shall have the meaning set forth
in Section 2.4(c).
"Applicable Percentage Rent Fiscal Year" shall have the meaning set forth
in Section 2.4(b)(iii).
"Assumed Indebtedness" means the Indebtedness described on Schedule
4.11(a).
"Assumed Liabilities" shall have the meaning set forth in Section 1.3.
"Assumed Loan Documents" shall have the meaning set forth in Section
4.11(a).
"Audited Financial Statements" shall have the meaning set forth in Section
4.20.
"Bankruptcy" means the commencement of any proceeding under any applicable
bankruptcy, reorganization, liquidation, insolvency, creditor's rights, or
similar law now or hereafter in effect or commencement of a proceeding in which
a receiver, liquidator or trustee is sought to be appointed.
"Xxxx of Sale" shall have the meaning set forth in Section 9.4(d)(ii).
"Budgets" shall have the meaning set forth in Section 4.21.
"Business Day" means a day other than Saturday, Sunday or any day on which
commercial banks in
New York,
New York are authorized or obligated to close.
"Cap" shall have the meaning set forth in Section 11.5(a).
"Claims" shall have the meaning set forth in Section 1.5(a).
"Closing" shall have the meaning set forth in Section 9.1.
B-1
"Closing Date" shall have the meaning set forth in Section 9.1.
"Closing Escrow Agreement" shall have the meaning set forth in Section
11.7.
"Closing Statement" shall have the meaning set forth in Section 2.4(a)(ii).
"Code" shall have the meaning set forth in Section 2.3(b).
"Confidentiality Agreement" shall have the meaning set forth in Section
7.1.
"Company Leases" means those certain leases for real property where the
Seller or its Affiliate is a tenant.
"Consultants" shall have the meaning set forth in Section 3.2.
"Continuing Loan Guaranty" shall have the meaning set forth in Section 6.4.
"Contract Assignment" shall have the meaning set forth in Section
9.4(d)(iv).
"Contract Due Diligence Period" shall mean the period ending on the earlier
of December 17, 2002 and the date that Purchaser obtains the approval of its
board of directors to the Transactions.
"Contracts" means all agreements, contracts, management agreements, leasing
agreements, environmental indemnity agreement that Seller or any Assigning
Subsidiary is a beneficiary under), maintenance contracts, equipment leasing
agreements, the Septic Escrow Agreement open purchase orders and other contracts
for the provision of labor, services, materials or supplies relating to the
Purchased Assets or any Property, Improvements or Personal Property and under
which Seller or any Subsidiary is currently paying or receiving compensation for
services rendered in connection with the Purchased Assets or any Property,
together with all renewals, supplements, amendments and modifications thereof,
and any new such agreements entered into after the date hereof, all Material
Contracts and shall also mean that certain Lease that may have expired, but has
continuing obligations of the tenant thereunder by and between Simon Property
Group, L.P. and Amoco Oil Company as amended by that certain Lease Amendment
dated June 10, 1994 by and between Simon Property Group, L.P. and Amoco Oil
Company, provided, however, the following shall not be a Contract: that certain
Settlement Agreement dated December 31, 1998 by and between Elkhart Plaza West,
LLC; Xxxxxxx Xxxx; Xxxxxxxxxx Block, Inc.; Xxxx Xxxxxxx-Xxxxxx; Xxxxxx Xxxxxxxx
Paint Spot, Inc.; the Mathisens; and Alt & Xxxxxx Engineering Services, Inc.
"Deed" shall have the meaning set forth in Section 9.4(d)(i).
"Delinquent" shall have the meaning set forth in Section 2.4(b)(v).
"Deposit" shall have the meaning set forth in Section 2.3.
"Due Diligence" shall have the meaning set forth in Section 3.1(a).
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"Employees" shall have the meaning set forth in Section 7.8(a).
"Employee Related Liabilities" shall mean the following:
(a) any liabilities or obligations resulting from or by reason of the
employment of any employees or former employees of Seller or any Subsidiary or
any employee benefits plan or employment arrangement of Seller or the
Subsidiaries (including, but not limited to, 401(k), pension and deferred
compensation plans and medical/dental, disability, worker's compensation and
life insurance programs, whether or not self-insured and accrued vacation and
sick time), termination or severance pay due employees or independent
contractors of Seller or any Subsidiary or bonus or deferred compensation due
employees or former employees of Seller or any Subsidiary or any or all of
Seller's or a Subsidiary's obligations to any such employee or under any such
plan or employment arrangement;
(b) any reductions in workforce or other employment terminations,
including any "mass layoff" or "plant closing" as those terms are defined by the
WARN Act relating to the employees or former employees of Seller or any
Subsidiary occurring in connection with or on or before Closing; and
(c) any collective bargaining agreements, programs and practices, or
other employment agreements, employment offer letters or similar agreements with
or relating to employees or former employees of Seller or any Subsidiary.
"Environmental Law" means any Law or order of any Governmental Entity
relating to the regulation or protection of human health, safety, natural
resources, or the environment or to emissions, discharges, releases or
threatened releases of Hazardous Materials into the environment (including
without limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agreement" shall have the meaning set forth in Section 2.3(a).
"Escrow Holder" means Fidelity National Title Insurance Company, with an
address of 0 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000.
"Existing Environmental Insurance Policy" shall mean the American
International Specialty Lines Insurance Company Pollution Legal Liability Select
Policy (Policy Number PLS 1957619) covering EIG Operating Partnership, L.P. as
the Named Insured and each of the properties named therein effective as of
February 12, 2001.
"Pre-Closing Property Liabilities" shall have the meaning set forth in
Section 1.3.
"Final Adjustment Date" shall have the meaning set forth in Section 2.5.
"Final Closing Adjustment" shall have the meaning set forth in Section 2.5.
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"Final Statement" shall have the meaning set forth in Section 2.5.
"Financial Statements" shall have the meaning set forth in Section 4.20.
"GAAP" shall have the meaning set forth in Section 4.20.
"Governmental Entity" shall have the meaning set forth in Section 4.2(c).
"Guarantor" shall have the meaning set forth in Section 6.4.
"Hazardous Materials" means (i) any petroleum or petroleum products,
flammable explosives, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation and transformers or
other equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs), (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants" or words of similar import under any Environmental Law, and
(iii) any other chemical or other material or substance, exposure to which is
now prohibited, limited or regulated by any Governmental Entity under any
Environmental Law.
"Improvements" means all of the buildings, structures, fixtures,
facilities, installations and other improvements, of every kind and description
now or hereafter located on the Properties, including, without limitation, any
and all plumbing, air conditioning, heating, ventilating, mechanical, electrical
and other utility systems, parking lots and facilities, landscaping, roadways,
sidewalks, security devices, signs and light fixtures.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money, whether secured or
unsecured, (ii) all obligations of such Person under conditional sale or other
title retention agreements relating to property purchased by such Person, (iii)
all capitalized lease obligations of such Person, (iv) all obligations of such
Person under interest rate cap, swap, collar or similar transaction or currency
hedging transactions (valued at the termination value thereof), and (v) all
guarantees of such Person of any such indebtedness of any other Person.
"Indemnifying Party" shall have the meaning set forth in Section 11.4(a).
"Indemnity Agreement" shall have the meaning set forth in Section 6.4.
"Indemnitee" shall have the meaning set forth in Section 11.4(a).
"Indemnitor's Acknowledgement" shall have the meaning set forth in Section
7.9.
"Intellectual Property" means the name of each Property and all other
copyrights, trademarks, brand names, service marks, trade names, data, telephone
numbers, licenses, labels, logos, marketing materials, designs, covenants by
others not to compete, rights, privileges and any registrations or applications
for registrations of the foregoing used in the conduct of the Properties or the
Purchased Assets, and any right to recovery for infringement thereof (including
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past infringement) and any and all goodwill associated therewith or connected
with the use thereof and symbolized thereby, including, without limitation, all
of the items set forth on Schedule 1.1(a)(iii)(D) attached hereto.
"Knowledge of Seller" shall have the meaning set forth in Section 4.24.
"Laws" shall have the meaning set forth in Section 4.2(b).
"Lease Assignment" shall have the meaning set forth in Section 9.4(d)(iii).
"Lease Expenses" means, collectively, any and all leasing commissions,
tenant improvements, allowances (including free rent), and lease buyout costs
and expenses actually paid or incurred by Seller prior to Closing or to be
incurred by Purchaser for any space set forth in Schedule 2.4(e) arising out of
or in connection with any Lease. Lease Expenses shall include, without
limitation, (a) brokerage commissions and fees payable pursuant to a commission
agreement or Lease to effect any such leasing transaction (including, without
limitation, any fees owed to an affiliated or third-party property manager or
leasing agent), (b) expenses incurred for repairs, improvements, equipment,
painting, decorating, partitioning and other items to satisfy the tenant's
requirements with regard to such leasing transaction, and (c) expenses incurred
for the purpose of satisfying or terminating the obligations of a Tenant under a
new Lease to the landlord under another lease (whether or not such other lease
covers space in any Property).
"Leases" shall have the meaning set forth in Section 4.5(b).
"Leasing Guidelines" shall have the meaning set forth in Section 6.2.
"Licenses and Permits" shall mean, collectively, all licenses,
registrations, franchises, permits, concessions, orders, approvals, certificates
of occupancy, dedications, subdivision maps and entitlements now or hereafter
issued, approved or granted by any Governmental Entity in connection with the
Properties or the Purchased Assets, together with all renewals and modifications
thereof.
"Liens" shall have the meaning set forth in Section 1.1(a).
"Losses" shall have the meaning set forth in Section 11.2(a).
"Main Closing Date" shall mean the Closing Date pursuant to Section 9.1
whereupon the closing of the Transfer occurs with respect to all Properties
other than those for which the closing is delayed pursuant to and in accordance
with Section 7.14.
"Major Loss" shall have the meaning set forth in Section 8.3.
"Material Contracts" shall have the meaning set forth in Section 4.14.
"Material Title Defects" means title matters affecting any Property for
which Purchaser obtained a Title Commitment and Survey prior to the end of the
Contract Due Diligence Period and that are (i) not disclosed or referred to in
the Title Commitment or Survey prior to the end of the Contract Due Diligence
Period, and (ii) are not Permitted Encumbrances.
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"NYSE" shall have the meaning set forth in Section 7.1(b).
"Operating Expenses" shall have the meaning set forth in Section 2.4(c).
"Other Rent" shall have the meaning set forth in Section 2.4(b)(iv).
"Permitted Encumbrances" means and includes all of the following: tax
liens, mechanics', materialmen's and artisan's liens, special assessment liens
and other similar liens, in each case not yet delinquent and are subject to
proration under Section 2.4(n) or being contested in good faith in appropriate
proceedings (provided that Seller will bond over same at Closing or provide
Purchaser with security with respect to same reasonably acceptable to Purchaser)
(it being agreed by Purchaser and Seller that if any tax or assessment is levied
or assessed with respect to the Properties after the date hereof and the owner
of the Properties has the election to pay such tax or assessment either
immediately or under a payment plan with interest, Seller may elect to pay under
a payment plan, which election shall be binding on Purchaser); any encumbrances
caused by Purchaser, its Consultants or its agents, representatives or
employees; the rights of the Tenants, as tenants only, under the Leases; all
matters disclosed in the Title Commitments and Surveys delivered to Purchaser as
of the expiration of the Contract Due Diligence Period; Liens securing the
Assumed Indebtedness; and any matters deemed to constitute Permitted
Encumbrances under Section 3.4 hereof; provided, however, Liens securing
Pre-Closing Property Liabilities or Employee Related Liabilities and other Liens
that Seller has expressly agreed to remove or discharge under this Agreement,
including Section 3.4(f) and those that are the subject of a Title Objection
shall not be Permitted Encumbrances to the extent that same are not waived at
Closing. After the expiration of the Contract Due Diligence Period, applicable
zoning and building ordinances and land use regulations that Seller has not
agreed in writing to cure shall be Permitted Encumbrance.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
"Personal Property" means all tangible personal property, which is located
at and used in connection with any of the Properties or the Purchased Assets as
of the Closing Date, but specifically excluding (a) any personal property owned,
financed or leased by the Tenants (other than any Tenant that is a Seller or
Subsidiary) under Leases, (b) any computer software which either is licensed to
Seller, or Seller deems proprietary, or (c) any tangible personal property owned
by any unaffiliated on-site property manager. Personal Property shall not
include any attorney work product or any attorney-client privileged documents.
"Post-Closing Threshold" shall mean Losses of $500,000 in the aggregate for
all Properties (or the Purchased Assets related to such Properties) with respect
to all Properties or the Purchased Assets related to such Properties. For the
purposes of this definition, the Purchaser's Cure Value shall be deemed to be
the Losses unless Seller objects in which case Purchaser and Seller must
reasonable agree on the amount.
"Pre-Closing Breaches" shall have the meaning set forth in Section 10.2(a).
"Pre-Closing Taxable Period" means with respect to any tax, any applicable
taxable period ending on or prior to consummation of the transactions
contemplated hereby on the
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Closing Date or the allocable portion of any applicable taxable period that
includes but does not end on the Closing Date.
"Pre-Closing Breach Notice" shall have the meaning set forth in Section
10.2.
"Properties" shall have the meaning set forth in Recital A.
"Property" shall have the meaning set forth in Recital A.
"Proration Items" shall have the meaning set forth in Section 2.4(a).
"Proration Time" shall have the meaning set forth in Section 2.4(a).
"Purchased Assets" shall have the meaning set forth in Section 1.1.
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Purchaser" means New Plan Excel Realty Trust, Inc., a Maryland
corporation.
"Purchaser Indemnitees" shall have the meaning set forth in Section
11.2(a).
"Purchaser's Cure Value" shall mean, as applicable, the Purchaser's good
faith reasonable estimate of the dollar amount of (i) Losses to Purchaser (or
Losses that Purchaser would incur upon or after Closing) resulting from
Pre-Closing Breaches and/or (ii) removal or correction of a particular matter,
for Title Objections.
"E&Y" shall have the meaning set forth in Section 7.17.
"REAs" shall have the meaning set forth in Section 4.16.
"Real Property" means those certain parcel(s) of real property comprising
the Property described in Schedule 1.1(a)(i)(A), together with the applicable
owner's right, title and interest, if any, in and to the appurtenances
pertaining thereto, including, but not limited to, the applicable owner's right,
title and interest in and to the adjacent streets, alleys and right-of-ways, and
any easement rights, air rights, subsurface rights, development rights and water
rights.
"Records and Plans" means, collectively: (i) all books and records,
including, but not limited to, property operating statements, specifically
relating to the Properties and the Purchased Assets; (ii) all structural
reviews, architectural drawings and environmental, engineering, soils, seismic,
geologic and architectural reports, studies and certificates pertaining to the
Real Property or the Improvements; (iii) all preliminary, final and proposed
plans, specifications and drawings of the Improvements or the Real Property or
the Properties or any portion thereof; and (iv) with respect to the Properties
and the Purchased Assets, the accounting, billing and financial records,
personnel records, blueprints, specifications, warranties, plats, maps, surveys,
building and machinery diagrams, maintenance and production records,
environmental records and reports, sales and property Tax records and Tax
Returns for the Properties and sales records. The terms "Records and Plans"
shall not include (v) any document or correspondence which would be subject to
the attorney-client privilege; (w) any document or item which Seller is
contractually
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or otherwise bound to keep confidential; (x) any documents pertaining to the
marketing of the Property for sale to prospective purchasers; (y) any internal
memoranda, reports or assessments of Seller, Affiliates or the Subsidiaries
relating to Seller's valuation of the Properties; and (z) appraisals of the
Properties whether prepared internally by Seller or Seller's Affiliates or
Subsidiaries or externally.
"Rentals" shall mean fixed monthly rentals, additional rentals, percentage
rentals, escalation rentals (which include each Tenant's prorated share of
building operation and maintenance costs and expenses as provided for under the
applicable Lease, to the extent the same exceeds any expense stop specified in
such Lease), retroactive rentals, all administrative charges, utility charges,
tenant or real property association dues, storage rentals, special event
proceeds, temporary rents, telephone receipts, locker rentals, vending machine
receipts and other sums and charges payable by Tenants under the Leases or from
other occupants or users of the Property.
"Rent Roll" shall have the meaning set forth in Section 4.5(b).
"Reporting Person" shall have the meaning set forth in Section 2.3(b)(i).
"Restraints" shall have the meaning set forth in Section 9.2(a).
"Sale Agreements" shall mean (i) that certain
Purchase Agreement dated as
of the date hereof between EIG Operating Partnership, L.P. and New Plan Excel
Realty Trust, Inc.; (ii) that certain
Purchase Agreement dated as of the date
hereof between EIG Realty, Inc. and New Plan Excel Realty Trust, Inc.; and (iii)
that certain Contribution Agreement dated as of the date hereof between EIG
Operation Partnership, L.P. and Excel Realty Partners, L.P.
"Section 1060 Allocation" shall have the meaning set forth in Section 7.7.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller" shall have the meaning set forth in the introductory paragraph of
this Agreement.
"Seller Indemnitees" shall have the meaning set forth in Section 11.3(a).
"Seller Material Adverse Event" means the occurrence of any of the
following after the date of this Agreement and prior to the Closing: (i)
Bankruptcy of any of Ocean State Job Lots at Xxxx River Commons, Office Depot or
the North Carolina Company (or any existing subtenant thereof) at Hilltop Plaza,
or Hobby Lobby at Paradise Pavilion, (ii) there are any (a) exceptions in the
Tenant estoppels obtained under Section 6.3 for which Seller elects not to
deliver a Seller estoppel under Section 6.3 and the dollar amount of any
reduction in value of the Purchased Assets resulting therefrom, plus (b) Losses
(or Losses that would be realized upon or after Closing) relating to a total
gross leasable area of 20,000 square feet or more at any Property closing or
ceasing to operate, but not including a temporary closure (regardless of whether
or not the Tenant is paying rent), plus (c) the Losses (or Losses that would be
realized upon or after Closing) from Pre-Closing Breaches under Section 10.2
exceeds in the aggregate $500,000, and (ii) after the Contract Due Diligence
Period, there is first disclosed at any of the Properties that
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there is or may exist a violation of Environmental Laws or contamination that
Purchaser deems material.
"Seller Party" and "Seller Parties" shall have the meanings set forth in
Section 1.5.
"Significant Portion" with respect to a Property means any taking by
condemnation or destruction or damage by fire or other casualty in excess of 25%
of the gross leaseable area of a Property or that deprives the affected Property
of any major access to public roads or allows an anchor tenant to terminate its
Lease.
"Subsidiary" means any entity in which Seller has an interest whether
directly or indirectly and "Subsidiaries" is the plural of Subsidiary.
"Surveys" shall have the meaning set forth in Section 3.4(a).
"Tax Return" or "Tax Returns" means any report, return, or other
information required to be supplied to any taxing authority in connection with
Taxes.
"Tax" or "Taxes" means all taxes, fees, levies, or other assessments,
imposed by the United States or any state, country, local, or foreign government
or subdivision or agency thereof including, without limitation, income, gross
receipts, excise, real and personal property, premiums, municipal, capital,
value-added, goods and services, consumption, sales, transfer, license, payroll,
and franchise taxes, and such term shall include any interest, penalties, or
additions to tax attributable to such taxes, fees, levies, or other assessments.
"Tenant Deposits" means all advance rents and security deposits (whether
cash or non-cash) paid or deposited by a Tenant to Seller or any owner of a
Property, as landlord, or to any other person on Seller's or such owner's behalf
pursuant to a Lease (together with any interest which has accrued thereon as
required by the terms of such Lease, but only to the extent such interest has
accrued for the account of the respective Tenant or as required by law.)
"Tenant Notice Letters" shall have the meaning set forth in Section
9.3(c)(iv).
"Tenants" means all persons or entities occupying or entitled to possession
of any portion of any Property pursuant to a Lease.
"Third Party Claim" shall have the meaning set forth in Section 11.4(b).
"Title Commitments" shall have the meaning set forth in Section 3.4(a).
"Title Objections" shall have the meaning set forth in Section 3.4(b).
"Title Policies" means the ALTA or TLTA owner's or leasehold form title
policies, which title policies insure the fee simple or leasehold interests, as
applicable, of the in the applicable Properties.
"Transfer" shall have the meaning set forth in Section 1.1(a).
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"Transferred Employees" shall have the meaning set forth in Section 7.8(a).
"Transitional Services Agreement" shall have the meaning set forth in
Section 7.13.
"Unaudited Financial Statements" shall have the meaning set forth in
Section 4.20.
"Vehicles" shall have the meaning set forth in Section 1.1(iii)(H).
"WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. Sections 2101, et. seq., and any similar provision of any
applicable State Law.
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