Exhibit 2
================================================================================
PURCHASE AND SALE AGREEMENT
among
Xxxxxxx Pacific Properties, Inc.,
Xxxxxxx Pacific Operating Partnership, L.P.,
and BPP/Xxx Xxxx, X.X.
(collectively, "Sellers")
and
Developers Diversified Realty Corporation
("Buyer")
Dated as of December 17, 2001
================================================================================
ARTICLE I DEFINITIONS....................................................................................2
1.1 Agreement...................................................................................2
1.2 Assets......................................................................................2
1.3 Intentionally deleted.......................................................................2
1.4 Business Day................................................................................3
1.5 Buyer.......................................................................................3
1.6 Buyer Common Shares and Buyer Common Share Value............................................3
1.7 Cash........................................................................................3
1.8 Closing.....................................................................................3
1.9 Closing Date................................................................................3
1.10 Intentionally Deleted.......................................................................3
1.11 Xxxxxxx Money Deposit.......................................................................3
1.12 Effective Date..............................................................................3
1.13 Encumbrances................................................................................3
1.14 Equipment Leases............................................................................3
1.15 Escrow Agent................................................................................4
1.16 Improvements................................................................................4
1.17 Interests...................................................................................4
1.18 Knowledge...................................................................................4
1.19 LSA.........................................................................................4
1.24 Major Tenants and Material Tenant...........................................................4
1.20 Management Agreements.......................................................................4
1.21 Material Adverse Effect.....................................................................4
1.22 Intentionally Deleted.......................................................................4
1.23 Material Lease and Material Leases..........................................................4
1.25 New Title Matters...........................................................................4
1.26 Intentionally Deleted.......................................................................4
1.27 Partnership Agreements......................................................................4
1.28 Permits and Licenses........................................................................5
1.29 Permitted Exceptions........................................................................5
1.30 Personal Property...........................................................................5
1.31 Preliminary Title Reports...................................................................5
1.32 Property and Properties.....................................................................5
1.33 Property Restrictions.......................................................................6
1.34 Purchase Price..............................................................................6
1.35 Intentionally Deleted.......................................................................6
1.36 Required Consent............................................................................6
1.37 Sales Transaction...........................................................................6
1.38 Sellers.....................................................................................6
1.39 Sellers Disclosure Schedule.................................................................7
1.40 Service Contracts...........................................................................7
1.41 Common Shares...............................................................................7
1.42 Intentionally Deleted.......................................................................7
1.43 Intentionally Deleted.......................................................................7
i
1.44 Intentionally Deleted.......................................................................7
1.45 Tenant Deposits.............................................................................7
1.46 Tenant Leases...............................................................................7
1.47 Tenants.....................................................................................7
1.48 Intentionally Deleted.......................................................................7
1.49 Title Policy................................................................................7
1.50 Trademarks..................................................................................7
1.51 Transamerica................................................................................7
ARTICLE II AGREEMENT FOR PURCHASE AND SALE...............................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS....................................................8
3.1 Existence; Good Standing; Authority; Compliance with Law....................................8
3.2 Authorization, Validity and Effect of Agreement.............................................8
3.3 No Violation; Consents......................................................................9
3.4 Litigation..................................................................................9
3.5 Real Property Matters.......................................................................9
3.6 Capitalization..............................................................................9
3.7 Good Title.................................................................................10
3.8 Intellectual Property......................................................................10
3.9 Environmental Matters......................................................................10
3.10 Liabilities................................................................................11
3.11 Employees and Employee Plans...............................................................11
3.12 Historic Van Ness..........................................................................11
3.13 Contracts..................................................................................11
3.14 Insurance..................................................................................12
3.15 Tax Matters................................................................................12
3.16 No Brokers.................................................................................12
3.17 Non-Foreign Person.........................................................................12
3.18 Master Lease...............................................................................12
3.19 Sellers Disclosure Schedule................................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER......................................................13
4.1 Accredited Investor........................................................................13
4.2 Investment.................................................................................13
4.3 No Public Market...........................................................................13
4.4 Organization and Good Standing.............................................................14
4.5 Authority..................................................................................14
4.6 Consents and Approvals; No Violations......................................................14
4.7 Validity of Shares to Be Issued............................................................15
4.8 Capitalization of Buyer....................................................................15
4.9 Financial Statements; SEC Reports..........................................................15
4.10 No Undisclosed Liabilities.................................................................16
4.11 Absence of Certain Changes.................................................................16
4.12 Litigation; Compliance with Laws; Permits..................................................16
4.13 Taxes......................................................................................17
ii
4.14 Brokers....................................................................................17
4.15 Sellers Disclosure Schedule................................................................17
4.16 Full Disclosure............................................................................17
ARTICLE V CONDITIONS TO THE CLOSING.....................................................................18
5.1 Condition to the Obligations of Each Party to Effect the Closing...........................18
5.2 Conditions to Obligations of Buyer.........................................................18
5.3 Conditions to Obligations of Sellers.......................................................19
ARTICLE VI CLOSING......................................................................................19
6.1 Assignment.................................................................................19
6.2 Time and Place.............................................................................20
6.3 Sellers' Closing Deliveries................................................................20
6.4 Buyer's Closing Deliveries.................................................................22
6.5 Escrow Agent's Duties......................................................................23
6.6 Prorations; Deposits; Delinquent Rents.....................................................23
6.7 Closing Costs/Transfer Expenses............................................................26
6.8 Possession.................................................................................26
ARTICLE VII COVENANTS...................................................................................26
7.1 Conduct by Sellers.........................................................................26
7.2 Conduct by Buyer...........................................................................27
7.3 No Solicitations...........................................................................27
7.4 Required Filings and Consents..............................................................27
7.5 Registration Statement; NYSE Listing.......................................................28
7.6 Intentionally Deleted......................................................................28
7.7 Estoppels..................................................................................28
7.8 Title and Survey Matters...................................................................29
7.9 Risk of Loss...............................................................................29
7.10 Management Agreement.......................................................................30
7.11 Construction...............................................................................30
7.12 Lock Up Agreement..........................................................................30
7.13 Tenant Improvements and Leasing Commissions for Interim Leases.............................30
7.14 Other Matters..............................................................................30
7.15 Amendment to Operating Agreement...........................................................31
7.16 Reasonable Efforts.........................................................................31
ARTICLE VIII TERMINATION, AMENDMENT, WAIVER AND LIMITATION..............................................31
8.1 Termination................................................................................31
8.2 Effect of Termination......................................................................31
8.3 Amendment..................................................................................33
8.4 Extension; Waiver..........................................................................33
8.5 Limitation of Claims.......................................................................33
8.6 Intentionally Deleted......................................................................33
iii
ARTICLE IX INTENTIONALLY DELETED........................................................................33
ARTICLE X SELLERS' DISCLAIMER...........................................................................33
ARTICLE XI GENERAL PROVISIONS...........................................................................34
11.1 Intentionally Deleted......................................................................34
11.2 Notices....................................................................................34
11.3 Additional Acts............................................................................35
11.4 Time Of Essence............................................................................35
11.5 Waiver.....................................................................................35
11.6 Construction...............................................................................36
11.7 Interpretation.............................................................................36
11.8 Headings...................................................................................36
11.9 No Third Party Beneficiary.................................................................36
11.10 Survival of Representations, Warranties, Covenants and Agreements..........................36
11.11 Injunction.................................................................................36
11.12 Miscellaneous..............................................................................36
11.13 Assignment.................................................................................37
11.14 Severability...............................................................................37
11.15 Choice of Law/Consent to Jurisdiction......................................................37
11.16 Incorporation..............................................................................37
11.17 Natural Hazard Areas.......................................................................37
11.18 Publicity..................................................................................38
iv
EXHIBITS
A Legal Descriptions
6.3.1 Form of Deeds
6.3.1a Form of Deed
6.3.3 Form of Assignment of Leases
6.3.4 Form of Assignment of Contracts
6.3.5 Form of Xxxx of Sale
6.3.6 Form of Assignment of Guaranties and Warranties
6.3.7 Form of Assignment of Permits and Licenses
6.3.8 Form of Assignment of Leases (Equipment Leases)
6.3.9 Form of Declarant's Rights
6.3.10 Form of Assignment of Trade Name and Trademark Rights
6.3.11 Form of I.R.C. Section 1445 Affidavit
6.3.12(a) Form of Assignment and Assumption of Partnership Interests
6.3.12(b) Form of Assignment and Assumption of Membership Interests
v
SCHEDULES
1.11 Xxxxxxx Money and Cash Allocations
1.28 Schedule of Preliminary Title Reports
1.35 Sellers Disclosure Schedule
1.37 Schedule of Sellers, Seller Subsidiaries and Interests
7.8 Title and Survey Matters
vi
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is entered into and to be effective as
of the 17th day of December, 2001 (the "Effective Date"), by and among Xxxxxxx
Pacific Properties, Inc., a Maryland corporation ("BPP"), Xxxxxxx Pacific
Operating Partnership, L.P., a Delaware limited partnership ("BPOP"), and
BPP/Xxx Xxxx, X.X., a California limited partnership ("BPP Van Ness") (each of
the foregoing, a "Seller" and, collectively, "Sellers"), and Developers
Diversified Realty Corporation, an Ohio corporation ("Buyer").
R E C I T A L S
A. BPP Van Ness owned a certain parcel of real property, consisting of
a building (the "Building"), all improvements and appurtenance thereto and the
underlying land, commonly known as 1000 Xxx Xxxx and located in the City and
County of San Francisco, California. The Building has been renovated and
improved by BPP Van Ness as a mixed use complex, consisting of a historic
portion (the "Historic Building Portion") and a new portion (the "New Building
Portion") adjacent and abutting to the Historic Building Portion. The New
Building Portion included two parcels (a "New Commercial Parcel" and a "Parking
Garage Parcel"). The New Commercial Parcel has been improved by BPP Van Ness and
American Multi-Cinema, Inc. ("AMC") as a 14-screen movie theatre and related
amenities. The Parking Garage Parcel has been improved by BPP Van Ness as a
seven-floor automobile parking garage and sold to an unrelated third party. The
Historic Building Portion included residential condominium units (the
"Residential Parcel"). The balance of the Historic Building Portion (namely, the
portion other than the Residential Parcel) (the "Historic Parcel") was
redeveloped by BPP Van Ness into certain retail space and common area space (the
"Historic Parcel Retail Space") and certain additional space leased to AMC for
use as an atrium improved with escalators and a separate area as a ticket/box
office.
B. BPP Van Ness sold to Historic Van Ness LLC, a California limited
liability company ("Historic Van Ness"), substantially all improvements made to
the Historic Parcel Retail Space all of which constituted "qualified
rehabilitation expenditures" (as defined in the Internal Revenue Code of 1986,
as amended) incurred by BPP Van Ness in the rehabilitation of the portion of the
Building comprising the Historic Parcel Retail Space (the "QRE Improvements").
C. Simultaneously with the sale of the QRE Improvements, BPP Van Ness,
as landlord, and Historic Van Ness, as tenant, entered into a master lease of
the Historic Parcel Retail Space, excluding the QRE Improvements (the "Master
Lease") and Historic Van Ness, as sublandlord, and BPP/Van Ness Operating
Company, L.P. ("BPP/Van Ness Operating Co."), as subtenant, entered into a
master sublease of the Historic Parcel Retail Space, including the QRE
Improvements (the "Master Sublease") .
D. The Historic Parcel (without the QRE Improvements) and the New
Commercial Parcel are collectively referred to as the "Van Ness Property" and
legally described in EXHIBIT A-1 and the QRE Improvements are legally described
in EXHIBIT A-2.
E. BPOP owns a certain parcel of real property, consisting of a
building, all improvements and appurtenance thereto and the underlying land,
collectively referred to as the "Hilltop Property" and legally described in
EXHIBIT A-3.
F. BPOP owns a 0.1% membership interest in Historic Van Ness (the
"Historic Van Ness Interest") and a 99% general partnership interest in BPP/Van
Ness Operating Co. (the "BPOP BPP/Van Ness Operating Co. Interest"), and BPP
owns a 1% limited partnership interest in BPP/Van Ness Operating Co. (the "BPP
BPP/Van Ness Operating Co. Interest" and, together with the Historic Van Ness
Interest and BPOP BPP/Van Ness Operating Co. Interest, the "Interests").
G. BPP Van Ness desires to sell to Buyer, and Buyer desires to purchase
from BPP Van Ness, all of BPP Van Ness' right, title and interest in the Van
Ness Property; BPOP desires to sell to Buyer, and Buyer desires to acquire from
BPOP, all of BPOP's right, title and interest in the Hilltop Property, the
Historic Van Ness Interest and the BPOP BPP/Van Ness Operating Co. Interest; BPP
desires to sell to Buyer, and Buyer desires to purchase from BPP, all of BPP's
right, title and interest in the BPP BPP/Van Ness Operating Co. Interest; and
Sellers desire to sell to Buyer, and Buyer desires to purchase from Sellers, the
other Assets (as defined in Section 1.2); in each case upon the terms and
conditions stated in this Agreement.
NOW, THEREFORE, in consideration of the promises, representations and
warranties hereinafter set forth, and for other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
set forth below.
ARTICLE I
DEFINITIONS
1. DEFINITIONS. The following terms shall have the following meanings
when used in this Agreement:
1.1 "Agreement" This Purchase and Sale Agreement, including
all Exhibits and Schedules attached hereto, as the same may be amended in
accordance with the terms of this Agreement, and Sellers Disclosure Schedule.
1.2 "Assets" The Interests and the Properties and all Tenant
Leases, Equipment Leases, Service Contracts, Improvements and Personal Property
associated with all of the Properties or one or more of the Properties and the
Tenant Leases, Equipment Leases, Service Contracts, Improvements and Personal
Property associated with such Properties, as the context may require.
1.3 Intentionally Deleted.
2
1.4 "Business Day" A day other than a Saturday, Sunday or day
on which banking institutions in the City of New York, New York are authorized
or required by law or executive order to be closed.
1.5 "Buyer" As defined in the Introductory Paragraph.
1.6 "Buyer Common Shares" and "Buyer Common Share Value"
"Buyer Common Shares" means the shares of Common Shares, if any, issued by Buyer
in connection with the Sales Transaction. "Buyer Common Share Value" means the
market value of a single Buyer Common Share as determined by taking the average
closing price per share of Buyer's Common Shares on the New York Stock Exchange,
as reported by The Wall Street Journal, for the ten trading days immediately
preceding the second business day prior to the Closing Date.
1.7 "Cash" United States currency represented by cash in hand,
certified or cashier's check, wire transfer or other immediately available
funds. The Cash shall be allocated among the Properties as set forth on Schedule
1.11. The Cash shall be applied and paid as provided in Paragraph 1.34.
1.8 "Closing" The consummation of the Sales Transaction for
all of the Assets, as evidenced by the delivery of all required funds and
documents to Escrow Agent for such Sales Transaction.
1.9 "Closing Date" As defined in Paragraph 6.2.
1.10 "DDR". DDR Real Estate Services, Inc., a wholly-owned
direct subsidiary of Buyer.
1.11 "Xxxxxxx Money Deposit" $5,000,000, in Cash, to be
delivered by Buyer to BPP on the Effective Date, as an xxxxxxx money deposit on
account of the Purchase Price, together with all interest accrued thereon. The
Xxxxxxx Money Deposit shall be allocated among the Interests and Properties as
set forth on Schedule 1.11. The Xxxxxxx Money Deposit shall be applied and paid
as provided in Paragraphs 1.34, 8.2.3 and 8.2.5, as applicable; BPP shall hold
and apply the Xxxxxxx Money Deposit in accordance with the terms and provisions
of this Agreement. BPP shall deposit the Xxxxxxx Money Deposit in an
interest-bearing account similar to accounts in which BPP makes similar Xxxxxxx
Money Deposits in the ordinary course of its business. Interest earned on the
Xxxxxxx Money Deposit shall be applied to the Purchase Price at Closing. In the
event that this Agreement is terminated by either BPP or Buyer, as provided
under ARTICLE VIII, interest earned on the Xxxxxxx Money Deposit shall be paid
to the party entitled to the Xxxxxxx Money Deposit.
1.12 "Effective Date" As defined in the Introductory
Paragraph.
1.13 "Encumbrances" Any deed of trust encumbering any
Property.
1.14 "Equipment Leases" Those certain leases, if any, between
any Seller as lessee, and third parties, as lessor, covering equipment and other
personal property used by such Seller at or in connection with one or more of
the Properties.
3
1.15 "Escrow Agent" Chicago Title Insurance Company,
Attention: Xxxxxx X. Xxxx, telephone 000-000-0000.
1.16 "Improvements" All: (i) buildings, structures, walkways,
parking areas, driveways, signs, fixtures and other improvements comprising a
part of a Property as of the Effective Date or acquired by any Seller prior to
the Closing Date, subject to the terms of Paragraph 7.1; and (ii) all other
rights, benefits and privileges appurtenant thereto as of the Effective Date or
acquired by any Seller prior to the Closing Date, subject to the terms of
Paragraph 7.1.
1.17 "Interests" As defined in the Recitals.
1.18 "Knowledge" The actual knowledge of Xxxxx Xxxxxx, Xxxxxxx
Xxxxx or Xxxxxx Xxxxx.
1.19 "LSA" That certain Liquidation Services Agreement between
DDR and BPP dated September 10, 2000.
1.20 "Major Tenants" and "Material Tenant" Any Tenant and
Tenants, as the context may require, occupying more than 7,500 square feet in
any of the Properties or ground leasing any real property at any of the
Properties listed in Sellers Disclosure Schedule.
1.21 "Management Agreements" The LSA.
1.22 "Material Adverse Effect" A material adverse effect on
the use, operation, occupancy, condition or value of a Property; excluding any
such effect that arises out of or is related to (i) any act or failure to act of
Buyer or DDR in the course of performing their respective obligations under the
LSA, or (ii) any change or effect resulting from any future acts of terrorism or
war. Subject to the foregoing, a material adverse effect shall otherwise be
presumed to exist if the failures, actions, determinations, noncompliance,
situations, conditions, facts or circumstances giving rise to the adverse effect
are reasonably likely to result in losses, costs, damages, expenses, fines,
penalties, violations or liabilities in excess of $250,000.00.
1.23 Intentionally Deleted.
1.24 "Material Lease" and "Material Leases" A lease or other
occupancy agreement with any Major Tenant or leases or other occupancy
agreements with any Major Tenants, as the context may require, listed in Sellers
Disclosure Schedule.
1.25 "New Title Matters" Any title matters revealed in updates
to the Preliminary Title Reports and Surveys which either: (i) are not
materially adverse to the title of any Property; (ii) cannot be removed despite
Sellers' reasonable efforts pursuant to Paragraph 7.8 and are waived by Buyer;
or (iii) are permitted pursuant to Paragraph 7.8.
1.26 Intentionally Deleted.
1.27 "Partnership Agreements" Collectively, the Operating
Agreement of Historic Van Ness, dated as of November 30, 1998 (the "Operating
Agreement"), and the
4
Limited Partnership Agreement of BPP/Van Ness Operating Co., dated as of October
28, 1998, as amended.
1.28 "Permits and Licenses" As defined in Paragraph 1.30.
1.29 "Permitted Exceptions" All: (i) real estate taxes against
each Property not due and payable as of Closing; (ii) all other matters
affecting title to a Property set forth on the Preliminary Title Reports or
shown on the Surveys; and (iii) New Title Matters.
1.30 "Personal Property" All of Sellers' right, title and
interest in and to all personal property of every kind and nature now or
hereafter installed, located, situated or used in, on or about, or in connection
with the operation, use or enjoyment of each Property and the Improvements
located thereon, including but not limited to:
(i) all transferable licenses, permits, certificates of
occupancy and other approvals issued by any governmental or quasi-governmental
authority pertaining to the use, management, operation or maintenance of a
Property ("PERMITS AND LICENSES");
(ii) all plans, drawings, engineering and other reports,
surveys, studies and specifications pertaining to a Property;
(iii) all keys and combinations to all doors, cabinets,
safes, enclosures and other locking items or areas on or about a Property;
(iv) all trademarks, trade names, service marks and
goodwill associated with the business conducted by Sellers on a Property
("TRADEMARKS"), but Trademarks do not include the names or words "Xxxxxxx",
"BPP" or similar words (the "XXXXXXX TRADEMARKS");
(v) all furniture, appliances, fixtures, equipment,
supplies and materials located upon or used in the operation of a Property;
(vi) all warranties and guaranties relating to the
Personal Property or the Improvements on each Property;
(vii) all books, records, reports or other documents
pertaining to the Assets; and
(viii) all refundable Tenant security and other deposits
(the "TENANT DEPOSITS") and all prepaid rents pertaining to the Tenant Leases.
1.31 "Preliminary Title Reports" The Preliminary Title Reports for the
Properties issued by Chicago Title Company more fully described on Schedule 1.27
attached.
1.32 "Property" and "Properties" The parcels of real property, or any
one or more of them, as the context may require, referred to in Recitals D and E
and legally described on Exhibit A attached hereto, together with all
Improvements thereon, and including, to the extent of Sellers' interest therein,
all easements, rights of way, water rights, mineral rights, roads,
5
streets and ways, rights of parking, ingress and egress and appurtenances
running with or pertaining thereto.
1.33 "Property Restrictions" Any reciprocal easement
agreements or similar documents recorded against any Property.
1.34 "Purchase Price" The aggregate purchase price payable by
Buyer to Sellers for all of the Assets shall be $65,400,000.00 payable as
provided in this Paragraph. The Purchase Price shall be allocated among the
Assets as set forth on Schedule 1.11 in accordance with the provisions of
Section 1060 of the Internal Revenue Code of 1986, as amended (the "Code").
Sellers and Buyer agree to report and file all tax returns (including any audits
or examinations by any taxing authority or any other proceedings) in a manner
consistent with the allocation set forth on Schedule 1.11. Sellers and Buyer
shall cooperate in the filing of any forms (including Form 8594) with respect to
any such allocation, including any amendments to such forms required with
respect to any adjustment to the Purchase Price and other relevant items
pursuant to this Agreement. In the event that such allocation is disputed by any
taxing authority, the party hereto receiving notice of the dispute shall
promptly notify the other party and shall forward to such other party copies of
all correspondence from such taxing authority in respect of such disputed
allocation. At the Closing, the Purchase Price to be paid by Buyer to Sellers
for the Assets shall be the sum of the amounts allocated to such Assets on
Schedule 1.11, payable as follows:
(i) The portion of the Xxxxxxx Money Deposit and Cash
allocated to such Assets on SCHEDULE 1.11 shall be applied towards the Purchase
Price and paid by Buyer to Sellers at the Closing; provided, that, in no event
shall Buyer pay less than $15.1 million of the Purchase Price in a combination
of Xxxxxxx Money Deposit and Cash;
(ii) the balance of the Purchase Price, subject to
adjustments, credits and reductions as provided in this Agreement, is to be
paid, at Buyer's option, in Cash, in Buyer Common Shares or in a combination
thereof, such consideration to be deposited by Buyer with Escrow Agent and
delivered to Sellers at the Closing, provided, however, that Buyer may pay a
portion of the Purchase Price in the form of Buyer Common Shares if, and only
if, the conditions to Closing set forth in PARAGRAPH 5.1.2 and the provisions of
PARAGRAPH 7.5 shall have been satisfied as of the Closing Date in accordance
with PARAGRAPH 6.1. The number of whole Common Shares representing the balance
of the Purchase Price shall be calculated by dividing the balance of the
Purchase Price by Buyer Common Share Value.
1.35 Intentionally Deleted.
1.36 "Required Consent" As defined in Paragraph 5.2.2.
1.37 "Sales Transaction" The purchase and sale of all of the
Assets as contemplated by this Agreement.
1.38 "Sellers" As defined in the introductory Paragraph.
6
1.39 "Sellers Disclosure Schedule" Sellers Disclosure Schedule
initially prepared and delivered by Buyer to Sellers, pursuant to Buyer's and
DDR's obligations under the LSA, and as agreed upon among the parties and
attached hereto.
1.40 "Service Contracts" All service, repair, maintenance,
tenant improvement construction, operating and property management contracts
(excluding the Management Agreement, which is to be cancelled with respect to
the Properties as of the Closing) in effect on the Effective Date and other
agreements entered into by Sellers with regard to the Properties, pursuant to
the terms of Paragraph 7.1 of this Agreement.
1.41 "Common Shares" Shares of common stock, no par value, of
Developers Diversified Realty Corporation.
1.42 Intentionally Deleted.
1.43 Intentionally Deleted.
1.44 Intentionally Deleted.
1.45 "Tenant Deposits" As defined in Paragraph 1.30.
1.46 "Tenant Leases" All written leases or occupancy
agreements with respect to the Properties between any Seller, or any prior owner
of each of the Properties, as landlord, and the Tenants in effect on the
Effective Date, and those Leases entered into by any Seller pursuant to the
terms of Paragraph 7.1 of this Agreement.
1.47 "Tenants" The individuals or entities who are the named
tenants under the respective Tenant Leases.
1.48 Intentionally Deleted.
1.49 "Title Policy" An ALTA extended coverage Owner's Policy
of Title Insurance issued by Chicago Title Insurance Company for each Property
insuring the fee simple estate in an amount equal to the allocated portion of
the Purchase Price for each Property, naming Buyer or its nominee as the
insured, subject only to the Permitted Exceptions. The Title Policy shall
include such endorsements that are available for a particular Property as Buyer
may reasonably require, at Buyer's sole cost and expense. Buyer shall receive
fully executed facultative reinsurance agreements with direct access from other
title insurers for all amounts of liability under the Title Policy in excess of
such amount as Buyer may reasonably determine prior to Closing.
1.50 "Trademarks" As defined in Paragraph 1.30.
1.51 "Transamerica" Transamerica Occidental Life Insurance
Company, an Iowa corporation.
7
ARTICLE II
AGREEMENT FOR PURCHASE AND SALE
Upon execution and delivery by Sellers and Buyer, this Agreement shall
be the binding agreement among Buyer and Sellers for the purchase and sale of
the Assets, subject to and on the terms and conditions set forth in this
Agreement. This Agreement supersedes all other written or verbal agreements
among Buyer and Sellers concerning the Sales Transaction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer as follows (provided, however,
that each representation and warranty shall be deemed expressly qualified by any
information expressly set forth in Sellers Disclosure Schedule, including
information set forth in any document, instrument or agreement listed on Sellers
Disclosure Schedule, and such information shall be deemed an exception to each
representation and warranty set forth herein) and shall be deemed expressly
qualified by any information actually known by Buyer as of the Effective Date
and the Closing Date:
3.1 EXISTENCE; GOOD STANDING; AUTHORITY; COMPLIANCE WITH LAW.
3.1.1 Sellers are entities duly organized, validly existing
and in good standing under the laws of the states of their formation. Sellers
have all requisite corporate, limited liability company or partnership power and
authority to own, operate, lease and encumber their properties and carry on
their business as now conducted.
3.1.2 Neither Sellers nor any of the Properties is in
violation of any order of any judgment, decree or court order, governmental
authority or arbitration board or tribunal, or any statute, law, ordinance,
governmental rule or regulation to which Sellers or any of the Assets is
subject, where such violation, singly or in the aggregate with such other
failures, as to a single Property, would have a Material Adverse Effect. Sellers
have obtained all licenses, permits and other authorizations and have taken all
actions required by applicable law or governmental regulations in connection
with their respective Assets and their businesses as now conducted, except where
the failure to obtain any such license, permit or authorization or to take any
such action, singly or in the aggregate with such other failures, as to a single
Property, would have a Material Adverse Effect.
3.2 AUTHORIZATION, VALIDITY AND EFFECT OF AGREEMENT. Sellers have the
requisite power and authority to consummate the Sales Transaction and to execute
and deliver this Agreement. The execution by Sellers of this Agreement and the
consummation of the Sales Transaction have been duly authorized, or prior to
Closing will be duly authorized, by all requisite corporate, limited liability
company or partnership action on the part of Sellers. The Board of Directors of
BPP has duly and validly authorized and approved the execution, delivery and
performance of this Agreement and the consummation of the Sales Transaction and
no other
8
corporate proceedings or actions on the part of BPP, including shareholder
approval, are necessary to authorize the execution and delivery of this
Agreement or to consummate the Sales Transaction. This Agreement, assuming due
and valid authorization, execution and delivery thereof by Buyer, constitutes a
valid and legally binding obligation of Sellers enforceable in accordance with
its terms.
3.3 NO VIOLATION; CONSENTS. Except as set forth in Sellers Disclosure
Schedule, neither the execution and delivery by Sellers of this Agreement nor
consummation by Sellers of the Sales Transaction in accordance with the terms
hereof will conflict with or result in a breach of any provisions of the
operating agreements, partnership agreements, articles of incorporation or
bylaws, as applicable, of Sellers. Except as set forth in Sellers Disclosure
Schedule, the consummation of the Sales Transaction in accordance with the terms
hereof will not violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the Assets under, or result in being declared void,
voidable or without further binding effect, any of the terms, conditions or
provisions of: (i) any note, bond, mortgage, indenture or deed of trust (other
than the prohibition against transfers without lender's consent as set forth in
mortgages or deeds of trust encumbering the Properties and the Required
Consent); or (ii) any license, franchise, permit, lease, contract, agreement,
commitment or other instrument, encumbering or binding upon any of the Assets,
except, in the case of clause (i) or (ii), as otherwise would not have a
Material Adverse Effect. The execution and delivery of this Agreement and the
consummation of the Sales Transaction in accordance with the terms hereof will
not violate any federal, state or local law, ordinance, statute, rule,
regulation, decree or order, except for such violations as would not,
individually or in the aggregate, have a Material Adverse Effect or prevent the
consummation of the Sales Transaction.
3.4 LITIGATION. Except as set forth in Sellers Disclosure Schedule, to
Sellers' Knowledge, there is no litigation, suit, action or proceeding pending
nor have Sellers received written notice of any threatened litigation, suit,
action or proceeding against Sellers or between or among Sellers, as to which
there is a reasonable likelihood of an adverse determination and which, if
adversely determined, would, singly or in the aggregate with such other actions
as to any single Property: (i) have a Material Adverse Effect; (ii) materially
and adversely affect Sellers' ability to perform their respective obligations
under this Agreement; or (iii) prevent the consummation of the Sales
Transaction.
3.5 REAL PROPERTY MATTERS. BPP Xxx Xxxx and BPOP, taken together, own
fee simple title to the Properties. As of the date hereof, other than this
Agreement and any Tenant Leases, Sellers have not executed or entered into any
agreement to sell, exchange, transfer, convey or otherwise dispose of all or any
portion of, or any interest (including, without limitation, any option or right
of first refusal) in, the Assets that remains in effect.
3.6 CAPITALIZATION. Set forth in the Sellers Disclosure Schedule is a
true and complete list of (i) the general partners and limited partners and
their respective percentage interests in BPP/Xxx Xxxx Operating Co., and (ii)
the members and their respective percentage interests in Historic Xxx Xxxx, in
each case as of the date hereof. Except as set forth in Sellers Disclosure
9
Schedule or the Partnership Agreements, there are no outstanding options,
warrants, calls, rights, commitments or agreements of any kind to which either
BPP or BPOP is party or by which it is bound relating to the sale, issuance or
voting of, or the granting of rights to acquire any securities of, or interests
in, Historic Xxx Xxxx or BPP/Xxx Xxxx Operating Co., including any securities
convertible or exchangeable into or evidencing the right to purchase the
Interests or obligating Historic Xxx Xxxx or BPP/Xxx Xxxx Operating Co. to
grant, extend or enter into any such option, warrant, call, right, commitment or
agreement.
3.7 GOOD TITLE. Except as set forth in the Partnership Agreements, each
of BPP and BPOP owns beneficially and of record the Interests, free and clear of
all claims, charges, liens, security interests, pledges, restrictions or
encumbrances of any nature whatsoever (collectively, "Liens"), except Permitted
Exceptions and the obligation to obtain the Required Consent. The transfer and
delivery of the Interests to Buyer as contemplated by this Agreement will, upon
consummation of the Closing, transfer good and marketable title thereto to
Buyer, free and clear of all Liens, except Permitted Exceptions.
3.8 INTELLECTUAL PROPERTY. Except as set forth in Sellers Disclosure
Schedule, Sellers are not owners of, licensees under or holders of any licenses,
registrations or other rights in or to any intangible property which are
material to the business of Sellers at the Properties as currently conducted,
taken as a whole, including, without limitation, trade names, trademarks and
service marks, brand names, software, patents and copyrights; provided, however,
Sellers have rights in the Xxxxxxx Trademarks, which Xxxxxxx Trademarks are not
Trademarks subject to this Agreement.
3.9 ENVIRONMENTAL MATTERS. Except as disclosed in Sellers Disclosure
Schedule, to Sellers' Knowledge, the Properties are in compliance with all
Environmental Laws (as defined below) other than non-compliance with respect to
a particular Property that does not create a Material Adverse Effect. As used in
this Agreement, "ENVIRONMENTAL LAWS" shall mean all federal, state and local
laws, rules, regulations, ordinances, guidelines, codes, decrees, judgments,
orders, permits, authorizations or other legally enforceable requirements of any
Governmental Entity that purport to regulate the release of hazardous substances
or other materials into the environment, or impose requirements relating to
environmental protection. As used in this Agreement, "HAZARDOUS MATERIALS" means
any hazardous substances, hazardous materials, toxic substances or waste
materials, pollutants, contaminants, and materials regulated or defined or
designated as hazardous, extremely or imminently hazardous, dangerous or toxic
pursuant to any local, county, state, territorial or federal governmental
authority or with respect to which such a governmental authority otherwise
requires environmental investigation, monitoring, reporting or remediation.
Except as disclosed in Sellers Disclosure Schedule, to Sellers' Knowledge, there
is no administrative or judicial enforcement proceeding or investigation
pending, or to the Knowledge of Sellers, threatened against Sellers under any
Environmental Law. Except as disclosed in Sellers Disclosure Schedule, neither
Sellers nor, to the Knowledge of Sellers, any legal predecessor of Sellers, has
received any written notice that it is potentially responsible under any
Environmental Law for response costs, remediation costs or natural resource
damages, as those terms are defined under the Environmental Laws, at any of the
Properties which could create a Material Adverse Effect. Except as disclosed in
Sellers Disclosure Schedule, Sellers have no knowledge of any release on any of
the Properties or
10
adjacent properties of Hazardous Materials in any manner that would, singly or
in the aggregate with all other such releases at such Property, have a Material
Adverse Effect.
3.10 LIABILITIES. Since September 30, 2001, neither Historic Xxx Xxxx
nor BPP/Xxx Xxxx Operating Co. have incurred or become liable for, directly or
indirectly, any indebtedness, liability, claim, loss, damage, deficiency,
obligation or responsibility, constituting "liabilities" under United States
generally accepted accounting principles ("GAAP"), fixed or otherwise
("Liabilities"), except non-material Liabilities incurred in the ordinary course
of business consistent with good accounting practice, and Liabilities incurred
in connection with the transactions contemplated, and not otherwise prohibited
hereby.
3.11 EMPLOYEES AND EMPLOYEE PLANS. Neither Historic Xxx Xxxx nor
BPP/Xxx Xxxx Operating Co. have any employees, and have had no employees, and
Historic Xxx Xxxx and BPP/Xxx Xxxx Operating Co. have not adopted any employee
benefit or compensation plan or arrangement.
3.12 HISTORIC XXX XXXX. 3.12.1 As of December 31, 2000, the Qualified
Rehabilitation Expenditures with respect to the QRE Improvements (each as
defined in the Operating Agreement) were $20,040,259, and the Actual Historic
Tax Credit Amount (as defined in the Operating Agreement) was $4,008,052. Except
for the Operating Agreement and the Tax Credit Agreement, there are no
agreements currently in effect between BPOP or Historic Xxx Xxxx and
Transamerica or any other entity that obligate (either presently or
contingently) BPOP or Historic Xxx Xxxx to make any payment to Transamerica on
account of or in respect of Historic Tax Credits.
3.12.2 True, correct and complete copies of the Operating
Agreement and the Tax Credit Guaranty have been delivered to Buyer. Neither the
Operating Agreement nor the Tax Credit Guaranty has been amended or modified.
The Operating Agreement and the Tax Credit Guaranty are in full force and
effect. BPOP is not in default or breach of any provision of the Operating
Agreement or the Tax Credit Guaranty and has not received any notice from
Transamerica claiming that BPOP is in breach or default thereof. Neither BPP,
BPOP, BPP/Xxx Xxxx Operating Co. nor Historic Xxx Xxxx is a party to or subject
to any agreement with any third party pursuant to which any such party has or
may acquire any interest in the Project (as defined in the Operating Agreement),
other than under Tenant Leases.
3.12.3 Historic Xxx Xxxx has not engaged in any business or
activity other than as contemplated by clauses (a) through (e) of Section 2.4 of
the Operating Agreement.
3.12.4 Neither Historic Xxx Xxxx, BPP/Xxx Xxxx Operating Co.
nor any Seller has taken any action, nor does any Seller have Knowledge of any
event or circumstance, that could reasonably be likely to result in any Historic
Tax Credit Reduction Event (as defined in the Tax Credit Guaranty).
3.13 CONTRACTS. Within 10 days after the Effective Date, Sellers and
Buyer shall provide a list of all the agreements, contracts and arrangements to
which either Historic Xxx Xxxx or BPP/Xxx Xxxx Operating Co. is a party as of
the date of this Agreement, to be set forth in Sellers Disclosure Schedule, and
which are material to the conduct of either Historic Van
11
Ness' or BPP/Xxx Xxxx Operating Co.'s business, including, without limitation,
agreements relating to capital expenditures, indebtedness or the acquisition of
tangible or intangible property, but excluding the Management Agreement,
Material Leases and the Partnership Agreements.
3.14 INSURANCE. Within 10 days after the Effective Date, Sellers shall
provide to Buyer a list of all policies of life, casualty, liability and other
forms of insurance currently owned or held by any Seller in connection with the
Assets or the operations related thereto or held by Historic Xxx Xxxx or BPP/Xxx
Xxxx Operating Co. All such policies are currently in full force and effect, and
no Seller has received any written notice from any insurer with respect to the
cancellation of any such insurance. All premiums due and payable on those
policies have been paid. Except as set forth on the Sellers Disclosure Schedule,
as of December 15, 2001, no claim by any Seller under any such policy has been
disputed nor has any insurer reserved any rights with respect to any claims.
3.15 TAX MATTERS.
3.15.1 "Tax" (including, with correlative meaning, the terms
"Taxes" and "Taxable") means, any net income, gross income, gross receipts,
sales, use, transfer, payroll, premium, property or windfall profits tax,
together with any interest and any penalty, addition to tax or additional amount
imposed by any governmental authority (domestic or foreign) responsible for the
imposition of any such tax (a "Taxing Authority").
3.15.2 True, correct and complete returns, statements, reports
and forms required to be filed with any Taxing Authority for periods ending on
or before the Closing Date with respect to any tax information and Tax of
Historic Xxx Xxxx nor BPP/Xxx Xxxx Operating Co., including any return of an
affiliated or combined group that includes Historic Xxx Xxxx nor BPP/Xxx Xxxx
Operating Co. (collectively, the "Returns"), have been, or in the case of the
Returns for 2001, will be, prepared in a manner consistent with past practice
and timely filed. The filing of the Returns for 2001 will be subject to the
prior reasonable approval of Buyer.
3.16 NO BROKERS. Except as disclosed in Sellers Disclosure Schedule,
Sellers have not entered into any contract, arrangement or understanding with
any person or firm which may result in the obligation of such entity or Buyer to
pay any finder's fees, brokerage or agent's commissions or other like payments
in connection with the negotiations leading to this Agreement or consummation of
the Sales Transaction. Sellers shall indemnify, defend and hold Buyer harmless
for, from and against any claims by any brokers or agents retained by or
associated with Sellers in connection with the Sales Transaction for payments in
connection with the negotiations leading to this Agreement or consummation of
the Sales Transaction.
3.17 NON-FOREIGN PERSON. No Seller is a foreign person within the
meaning of Sections 1445 and 7701 of the Internal Revenue Code of 1986, as
amended.
3.18 MASTER LEASE. To Sellers' Knowledge, the Master Lease is in full
force and effect.
3.19 SELLERS DISCLOSURE SCHEDULE. To Sellers' Knowledge, the
information provided by Sellers to be included in Sellers Disclosure Schedule is
true, correct, accurate and complete in all material respects. To Sellers'
Knowledge, all documents, instruments and agreements referenced in the
information provided by Sellers to be included in Sellers Disclosure Schedule
are true,
12
correct, accurate and complete in all material respects and have not been
amended, modified, altered or changed except as set forth in Sellers Disclosure
Schedule.
Sellers, immediately upon obtaining Knowledge that any of the
representations and warranties set forth in this ARTICLE III shall be false,
untrue or inaccurate, shall provide written notice to Buyer of the facts or
circumstances resulting in the representation or warranty being false, untrue or
inaccurate. If any of the representations or warranties set forth in this
ARTICLE III shall be false, untrue or inaccurate, then, prior to Closing,
Buyer's sole rights shall be as set forth in ARTICLES VII AND VIII of this
Agreement. The representations or warranties contained in this ARTICLE III shall
survive the Closing for the Assets that are the subject of each Closing for a
period of 12 months from the Closing. All claims for any false, untrue or
inaccurate representation or warranty shall be made, in writing, prior to 11:59
p.m., San Francisco time, on the first anniversary of the Closing Date for such
Assets. All claims made, in writing, within such 12-month period shall survive
the expiration of such 12-month period until resolved. Any recovery by Buyer
with respect to such claims is expressly subject to the Liability Cap as defined
in PARAGRAPH 8.5 of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Sellers as follows (provided, however,
that, in the event that the Closing occurs and the entire Purchase Price is paid
in the form of Xxxxxxx Money Deposit and Cash, PARAGRAPHS 4.7, 4.8, 4.9, 4.10,
4.11 AND 4.13 shall automatically, without any further action by any party
hereto, be deemed null and void, and of no further force or effect):
4.1 ACCREDITED INVESTOR. Buyer is an "accredited investor" as such term
is defined in Regulation D under the Securities Act.
4.2 INVESTMENT. Buyer is acquiring the Interests for investment for its
own account, not as a nominee or agent, and not with the view to, or for resale
in connection with, any distribution thereof in violation of the Securities Act.
Buyer understands that the Interests to be purchased have not been, and will not
be registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of Buyer's representations as expressed herein. Buyer
understands and acknowledges that the Interests are subject to restrictions on
transfer pursuant to the terms of the Partnership Agreements.
4.3 NO PUBLIC MARKET. Buyer understands that no public market now
exists for the Interests and acknowledges that the Interests must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. Buyer is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resales of securities purchased in a private placement, subject to the
satisfaction of certain conditions, and that there can be no assurance that Rule
144 or any other exemption from
13
the registration requirements of the Securities Act will ever be available for
resales of the Interests.
4.4 ORGANIZATION AND GOOD STANDING. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Ohio. Buyer has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as presently conducted.
Buyer is duly qualified or licensed, and in good standing to do business in the
State of California.
4.5 AUTHORITY. Buyer has the requisite power and authority to
consummate the Sales Transaction and execute and deliver this Agreement, and to
perform its obligations under this Agreement. The Board of Directors of Buyer
has duly and validly authorized and approved the execution, delivery and
performance of this Agreement and the consummation of the Sales Transaction, and
no other proceedings or actions on the part of Buyer are necessary to authorize
the execution and delivery of this Agreement or to consummate the Sales
Transaction. Buyer has duly and validly executed and delivered this Agreement,
which is the valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms except as enforcement may be limited by bankruptcy,
insolvency, moratorium, or other similar laws relating to creditors' rights
generally and except that the availability of equitable remedies, including
specific performance, is subject to judicial discretion. The preparation and
filing of a Registration Statement on Form S-11 (together with any amendments or
supplements thereto, whether prior to or after the effective date thereof, the
"Registration Statement") with the Securities and Exchange Commission ("SEC") by
Buyer under the Securities Act of 1933, as amended (the "Securities Act"), for
purposes of registering Buyer Common Shares to be issued in the Sales
Transaction has been duly authorized by the Board of Directors of Buyer.
4.6 CONSENTS AND APPROVALS; NO VIOLATIONS. Neither the execution and
delivery by Buyer of this Agreement nor consummation by Buyer of the Sales
Transaction in accordance with the terms hereof will (i) conflict with or result
in any breach of any provision of the Articles of Incorporation or Code of
Regulations of Buyer; (ii) result in a violation or breach of, or constitute
with or without due notice or lapse of time or both a default under, or give
rise to any right of termination, cancellation or acceleration under, or result
in the forfeiture of any rights under, or create any right under, or require the
consent or approval of any person under, any of the terms, conditions or
provisions of any contract to which Buyer or any subsidiary of Buyer is a party
or by which Buyer or any subsidiary of Buyer or their respective assets are
bound except for such violations, breaches, defaults, terminations,
cancellations, accelerations, forfeitures of any rights, creations of any
rights, or failure to obtain consents or approvals of any Person which,
individually or in the aggregate, would not have a Material Adverse Effect on
Buyer and its subsidiaries taken as a whole; or (iii) violate any order, writ,
injunction, decree, statute, treaty, rule or regulation applicable to Buyer. No
filing or registration with or authorization, consent or approval of any federal
or state commission, governmental body, regulation agency, authority or tribunal
(collectively "Governmental Entity") is required by Buyer in connection with the
execution and delivery of this Agreement by Buyer or is necessary for the
consummation of the Sales Transaction by Buyer, except for: (i) applicable
requirements, if any, of any applicable United States securities laws and the
New York Stock Exchange; (ii) other consents, orders authorizations,
registrations, declarations and filings the failure of which to be obtained or
made
14
would not, individually or in the aggregate, have a Material Adverse Effect
on Buyer, or prevent the consummation of the Sales Transaction.
4.7 VALIDITY OF SHARES TO BE ISSUED. The Common Shares of Buyer to be
issued to Sellers in connection with the Closing have been duly authorized and,
when issued by Buyer in accordance with the terms of this Agreement, will be
validly issued, fully paid and nonassessable, and not subject to any preemptive
rights created by statute, the Articles of Incorporation or Code of Regulations
of Buyer, or any agreement to which Buyer is a party or by which Buyer is bound.
4.8 CAPITALIZATION OF BUYER. As of December 14, 2001, the authorized
capital stock of Buyer consists of: 100,000,000 shares of common stock, without
par value, of which 56,234,670 shares are issued and outstanding; 750,000 shares
of 9.5% Class A cumulative redeemable preferred shares, without par value, of
which 421,500 shares are issued and outstanding; 750,000 shares of 9.44% Class B
cumulative redeemable preferred shares, without par value, of which 177,500
shares are issued and outstanding; 750,000 shares of 8.375% Class C cumulative
redeemable preferred shares, without par value, of which 400,000 shares are
issued and outstanding; and 750,000 shares of 8.68% Class D cumulative
redeemable preferred shares, without par value, of which 216,000 shares are
issued and outstanding. (The Class A, Class B, Class C and Class D cumulative
redeemable preferred shares of Buyer are collectively referred to herein as
"Buyer Preferred Stock.") The issued and outstanding capital stock of Buyer has
been duly authorized and validly issued and is fully paid and non-assessable and
is not subject to preemptive or other similar rights. In addition, as of
December 14, 2001, an aggregate of 4,827,578 shares of Buyer common stock are
reserved for issuance upon the exercise of outstanding stock options under
Buyer's 1992 Employees Share Option Plan, 1996 Equity-Based Award Plan and 1998
Equity-Based Award Plan.
4.9 FINANCIAL STATEMENTS; SEC REPORTS. Buyer's periodic filings with
the SEC include complete copies of Buyer's audited consolidated financial
statements consisting of balance sheets of Buyer as of December 31, 1998, 1999
and 2000 and the related statements of income, changes in stockholders' equity
and cash flows together with related notes for the years then ended
(collectively, "Buyer Annual Financial Statements"), complete copies of Buyer's
unaudited consolidated financial statements consisting of a balance sheet of
Buyer as of the nine months ended September 30, 2001 and the related statements
of income, changes in stockholders' equity, and cash flows for the period then
ended (collectively, "Buyer Interim Financial Statements"). Buyer Annual
Financial Statements and Buyer Interim Financial Statements shall collectively
be referred to as "Buyer Financial Statements." Buyer Financial Statements have
been prepared from the applicable books and records of Buyer in accordance with
GAAP, consistently applied (except, in the case of Buyer Interim Financial
Statements, as permitted by the rules related to the preparation of a Quarterly
Report on Form 10-Q) during the related periods and comply in all material
respects with applicable rules and regulations of the Commission. The balance
sheets contained in each of Buyer Financial Statements fairly present, in all
material respects, the financial condition of Buyer as of the respective periods
set forth therein, and each income statement, statement of shareholders' equity
and statement of cash flow included in each of Buyer Financial Statements fairly
presents, in all material respects, the consolidated results of operations,
shareholders' equity and cash flows, respectively, of Buyer for the respective
periods set forth therein except as described below. Buyer Annual Financial
15
Statements have been audited by PriceWaterhouseCoopers and include the
unqualified opinion of such firm. Buyer has timely filed all documents and
reports that it is required to file with the SEC since December 31, 1998 (the
"Buyer SEC Documents"). As of their respective date, Buyer SEC documents
complied in all material respects with the requirements of the Securities Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
applicable, and, at the times they were filed (and as amended through the date
of this Agreement), none of Buyer SEC Documents contained or contain any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein, in light of the circumstances under which they were made, not
misleading.
4.10 NO UNDISCLOSED LIABILITIES. None of Buyer or any of its
subsidiaries has any material liabilities or obligations, absolute, accrued,
fixed, contingent, liquidated, unliquidated or otherwise, except for (i) those
reflected or reserved against (which reserves are adequate) on Buyer's
consolidated unaudited September 30, 2001 balance sheet, and (ii) those incurred
since September 30, 2001 in the ordinary course of business consistent with past
practice. To Buyer's knowledge there is no basis for the assertion against Buyer
or any of its subsidiaries of any liability of any material nature or in any
material amount not fully reflected or reserved against in Buyer's consolidated
unaudited September 30, 2001 balance sheet.
4.11 ABSENCE OF CERTAIN CHANGES. Since September 30, 2001, Buyer has
operated only in the ordinary course of business and there has not occurred: (i)
any transaction in which Buyer or any of its subsidiaries incurred any material
debts, liabilities or obligations except in the ordinary course of business;
(ii) any transaction in which Buyer or any of its subsidiaries discharged or
satisfied any encumbrances except in the ordinary course of business; (iii) any
transaction in which Buyer or any of its subsidiaries mortgaged, pledged or
subjected to encumbrance any of its assets; (iv) any transaction in which Buyer
or any of its subsidiaries sold or transferred any of its assets or canceled any
debts or claims; (v) any transaction in which Buyer or any of its subsidiaries
suffered any extraordinary losses or waived any rights of substantial value;
(vi) any material damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has affected or
may affect the business or the properties of Buyer or any of its subsidiaries;
(vii) other than regular quarterly dividends paid in cash, any declaration,
setting aside or payment of any dividend or other distribution in respect of any
of the capital stock of Buyer or any of its subsidiaries; (viii) any increase
not in the ordinary course of business in the compensation payable or to become
payable by Buyer or any of its subsidiaries; or (ix) any undertaking or any
change in any existing obligation of any kind of Buyer or any of its
subsidiaries other than in the ordinary course of business.
4.12 LITIGATION; COMPLIANCE WITH LAWS; PERMITS. There are no actions,
suits or claims or legal, administrative or arbitrative proceedings or
investigations pending or, to Buyer's knowledge, threatened against or related
to Buyer or any of Buyer's subsidiaries which if determined adversely would be
reasonably likely to have a Material Adverse Effect on Buyer and its
subsidiaries taken as a whole. There is not and has not been any failure by
Buyer or any of Buyer's subsidiaries to comply with any law, ordinance,
requirement, regulation, or order applicable to Buyer or any of Buyer's
subsidiaries, which failure to comply would have a Material Adverse Effect on
Buyer or any of Buyer's subsidiaries taken as a whole. There is no violation of,
default with respect to, or failure to comply with any material order, writ,
16
injunction, judgment, or decree of any court or Governmental Entity, issued or
pending against Buyer or any of Buyer's subsidiaries, which violation, default
or failure would have a Material Adverse Effect on Buyer or any of Buyer's
subsidiaries taken as a whole. Each of Buyer and its subsidiaries has obtained
all permits for the operation of its business as presently operated, and all
such permits, except where the failure to obtain such Permits would not,
individually or in the aggregate have a Material Adverse Effect on Buyer and its
subsidiaries taken as a whole.
4.13 TAXES. Buyer has duly filed, in compliance with applicable laws,
all material Tax Returns (defined below) required to be filed by it (or
extensions have been duly obtained) prior to the date hereof and all such Tax
Returns are true, complete and accurate in all material respects. Buyer has duly
paid, caused to be paid or made adequate provision and has reserved for the
payment of all material Taxes (defined below) required to be paid in respect of
the periods covered by such Tax Returns and has made adequate provision for
payment of all Taxes anticipated to be payable in respect of all taxable periods
since the periods covered by such returns. No claims for Taxes have been
asserted against Buyer or any of its subsidiaries, and no deficiency for any
Taxes has been proposed, asserted or assessed which has not been resolved or
paid in full. For purposes of this section: (i) "Tax" (and, with correlative
meaning, "Taxes") means any federal, state, or local income, gross receipt,
property, sales, use, license, excise, franchise, employment, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any governmental authority
thereon, and (ii) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
4.14 BROKERS. Buyer has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation of such
entity or Sellers to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with this Agreement or the consummation of the
Sales Transaction. Buyer shall indemnify, defend and hold Sellers harmless for,
from and against any claims by brokers or agents retained by or associated with
Buyer in connection with the Sales Transaction for payments in connection with
the negotiations leading to this Agreement or the consummation of the Sales
Transaction.
4.15 SELLERS DISCLOSURE SCHEDULE. To Buyer's knowledge, the information
provided by Buyer to be included in Sellers Disclosure Schedule is true,
correct, accurate and complete in all material respects. To Buyer's knowledge,
all documents, instruments and agreements referenced in the information provided
by Buyer to be included in Sellers Disclosure Schedule are true, correct,
accurate and complete in all material respects and have not been amended,
modified, altered or changed except as set forth in Sellers Disclosure Schedule.
Buyer, immediately upon obtaining knowledge that any of the representations and
warranties set forth in Article IV shall be false, untrue or inaccurate, shall
provide written notice to Sellers of the facts or circumstances resulting in the
representation or warranty being false, untrue or inaccurate.
4.16 FULL DISCLOSURE. Buyer has disclosed to Sellers all information of
which Buyer or DDR has become aware in the course of performing their respective
obligations under the LSA, through due diligence, or otherwise that affects or
relates to the market value of the Properties; none of the representations and
the warranties made by Buyer in this Agreement, or the
17
information provided by Buyer to be included in Sellers Disclosure Schedule,
contains or will contain at the Closing any untrue statement of a material fact,
or omits or will omit at the Closing to state any material fact necessary in
order to make such representations and warranties or such information, in the
light of the circumstances under which made, not misleading.
ARTICLE V
CONDITIONS TO THE CLOSING
5.1 CONDITION TO THE OBLIGATIONS OF EACH PARTY TO EFFECT THE CLOSING.
The respective obligations of Buyer and Sellers to effect the Closing are
subject to the fulfillment or waiver of the following conditions at or prior to
the Closing Date:
5.1.1 NO PROHIBITION. No statute, rule, regulation, executive
order, decree, ruling or permanent injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity or court which prohibits the
consummation of the Sales Transaction substantially on the ter ms contemplated
by this Agreement.
5.1.2 REGISTRATION STATEMENT; LISTING MATTERS. Subject to
Paragraph 6.2, in the event that Buyer elects to exercise its option to pay a
portion of the Purchase Price in Buyer Common Shares, the Registration Statement
covering such Buyer Common Shares shall have been declared effective by the SEC
and no stop order or other similar restraining order suspending the
effectiveness of the Registration Statement shall have been threatened or
entered by the SEC. Buyer Common Shares to be issued to Sellers shall have been
approved for listing on the New York Stock Exchange, subject to official notice
of issuance. If the conditions precedent set forth in this PARAGRAPH 5.1.2 are
not satisfied on or before February 25, 2002, then Buyer shall be obligated to
pay the entire Purchase Price in the form of Xxxxxxx Money Deposit and Cash, and
the conditions precedent set forth in this PARAGRAPH 5.1.2 shall be deemed
waived by Buyer.
5.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of Buyer to
effect the Closing is subject to the fulfillment or waiver of the following
conditions on or prior to the Closing Date:
5.2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Sellers set forth in this Agreement shall be true and correct as
of the Effective Date and as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties expressly
relate to a specific date or as of the Effective Date, solely, in which case
such representations and warranties shall be true and correct as of such date)
(provided, however, that no representation or warranty shall be deemed to have
been breached hereunder to the extent the failure to be true and correct arises
out of or relates to any act or omission to act by Buyer or DDR), and BPP shall
have delivered a certificate to the effect that the condition set forth in this
PARAGRAPH 5.2.1 has been satisfied, such certificate to be qualified by
Knowledge and subject to the information provided by Buyer to be included in
Sellers Disclosure Schedule being true, correct, accurate and complete in all
material respects.
18
5.2.2 CONSENTS, APPROVALS, ETC. Prior to the Closing Date,
Seller shall obtain the written consent of Transamerica to the transfer of the
Xxx Xxxx Property and the Historic Xxx Xxxx Interest (the "REQUIRED CONSENT").
5.2.3 LITIGATION. On the Closing Date, except as set forth in
Sellers Disclosure Schedule, there shall be no litigation, suit, action or
proceeding pending or threatened against Sellers which, in the reasonable
judgment of Buyer, may, if adversely determined, have a Material Adverse Effect
on the Assets.
5.2.4 COMPLIANCE WITH COVENANTS. Sellers shall have performed
in all material respects all of their respective obligations hereunder required
to be performed by them at or prior to the Closing (provided, however, that no
such obligation shall be deemed to have been breached hereunder to the extent
such breach arises out of or relates to any act or omission to act by Buyer or
DDR), and BPP shall have delivered a certificate to the effect that the
condition set forth in this PARAGRAPH 5.2.4 has been satisfied..
5.2.5 NEW TITLE AND SURVEY MATTERS. As of the Closing Date,
there shall not exist any title matters not disclosed on the Preliminary Title
Report that would have a Material Adverse Effect on title to any one Property.
5.3 CONDITIONS TO OBLIGATIONS OF SELLERS. The obligation of Sellers to
effect the Closing is subject to the fulfillment or waiver of the following
conditions on or prior to the Closing Date:
5.3.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct as of
the Effective Date and as of the Closing Date as though made on and as of the
Closing Date (except to the extent such representations and warranties expressly
relate to a specific date or as of the Effective Date, solely, in which case
such representations and warranties shall be true and correct as of such date),
and Buyer shall have delivered a certificate to the effect that the condition
set forth in this PARAGRAPH 5.3.1 has been satisfied.;
5.3.2 PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have
performed in all material respects all obligations required to be performed by
Buyer under this Agreement at or prior to the Closing and shall have delivered a
certificate to the effect that the condition set forth in this PARAGRAPH 5.3.2
has been satisfied.
In the event any of the foregoing conditions are not satisfied, or
waived, then the parties shall have the rights set forth in ARTICLE VIII and
PARAGRAPH 11.11 of this Agreement.
ARTICLE VI
CLOSING
6.1 ASSIGNMENT. Buyer shall have the right or authority to assign this
Agreement, or any of Buyer's rights hereunder (other than the rights or
obligations relating to Buyer's issuance and delivery of Buyer Common Shares in
connection with the Sales Transaction), prior to
19
Closing to one or more limited liability companies, partnerships, corporations
or other entity without the prior written consent of Sellers provided, however,
that: (i) Buyer shall do so within sufficient time as to timely close the Sales
Transaction in accordance herewith; (ii) the assignee corporation, limited
liability company, joint venture, or general or limited partnership shall be
comprised of Buyer or its affiliates; provided, further, that, prior to Closing,
Buyer shall designate separate legal entities (the "Separate Entities") that
satisfy the foregoing proviso to purchase the BPOP BPP/Xxx Xxxx Operating Co.
Interest and the BPP BPP/Xxx Xxxx Operating Co. Interest, respectively; and
(iii) on or prior to Closing, each of the Separate Entities shall execute and
deliver to Sellers a certificate, as may be reasonably acceptable to Sellers, in
which such Separate Entity represents and warrants to Sellers the
representations and warranties contained in PARAGRAPHS 4.1 THROUGH 4.3,
inclusive, with respect to such entity.
6.2 TIME AND PLACE. Once all of the conditions precedent set forth in
PARAGRAPHS 5.1.1, 5.2 AND 5.3 have been satisfied or waived, a date for Closing
(the "Closing Date") shall be specified by BPP on five days' prior written
notice to Buyer; provided, that, if at such date the conditions precedent set
forth in PARAGRAPH 5.1.2 shall not have been satisfied or waived, Buyer may, by
written notice to BPP, elect to extend the Closing Date until two Business Days
after the effective date of the Registration Statement, but in no event shall
Buyer extend the Closing Date beyond February 28, 2002. If the Closing Date
occurs before the effective date of the Registration Statement, then the entire
Purchase Price shall be payable in the form of Xxxxxxx Money Deposit and Cash.
The Closing shall take place at a location to be mutually agreed upon between
Buyer and BPP, commencing at 9:00 a.m., local time, on the Closing Date.
6.3 SELLERS' CLOSING DELIVERIES. At the Closing, Sellers shall deliver
to Escrow Agent with respect to the Assets owned by Sellers that are the subject
of such Closing:
6.3.1 DEED. A deed in the form of EXHIBITS 6.3.1 fully
executed and properly acknowledged by the appropriate Sellers, as applicable,
conveying to Buyer (or Buyer's nominee) the applicable Property subject only to
the Permitted Exceptions (the "Deeds");
6.3.2 CONSENTS. The Required Consent required pursuant to
Paragraph 5.2.2;
6.3.3 LEASES. An Assignment and Assumption of Leases for each
Property, in the form of EXHIBIT 6.3.3, fully executed by the appropriate
Sellers, as applicable, conveying to Buyer all of such Sellers' right, title and
interest in, to and under the Tenant Leases relating to such Property;
6.3.4 CONTRACTS. An Assignment and Assumption of Contracts for
each Property in the form of EXHIBIT 6.3.4, fully executed by the appropriate
Sellers, as applicable, assigning and transferring to Buyer all of such Sellers'
rights, benefits and privileges under the Service Contracts and the Master
Lease;
6.3.5 XXXX OF SALE. A Xxxx of Sale for each Property, in the
form of EXHIBIT 6.3.5, fully executed by the appropriate Sellers, as applicable,
assigning and conveying to Buyer the Personal Property (except the Service
Contracts) relating to such Property;
6.3.6 WARRANTIES. An Assignment of Guaranties and Warranties,
for each Property, in the form of EXHIBIT 6.3.6, fully executed by the
appropriate Sellers, assigning and
20
transferring to Buyer all of such Sellers' rights to or under any warranties and
guaranties relating to the Personal Property or the Improvements for each
Property (with the joinder by each warrantor as to any warranties and guaranties
that are not assignable without such warrantor's consent);
6.3.7 PERMITS. An Assignment of Permits and Licenses in the
form of EXHIBIT 6.3.7, fully executed by the appropriate Sellers, assigning and
transferring to Buyer all rights and interest in, to and under all permits,
licenses and certificates of occupancy held by such Sellers in connection with
the ownership, use, operation or maintenance of the Assets for each Property;
6.3.8 EQUIPMENT LEASES. An Assignment and Assumption of
Equipment Leases, in the form of EXHIBIT 6.3.8 attached, fully executed by the
appropriate Sellers, assigning and transferring to Buyer all of such Sellers'
interest under the Equipment Leases, if any;
6.3.9 DECLARANT'S RIGHTS. As applicable, one or more
Assignment of Declarant's Rights, in the form of EXHIBIT 6.3.9 attached, from
the appropriate Sellers which is a declarant under covenants, conditions or
restrictions encumbering a Property;
6.3.10 TRADE NAMES. An Assignment of Trade Name and Trade Xxxx
Rights substantially in the form of EXHIBIT 6.3.10, attached, fully executed by
the appropriate Sellers, assigning and transferring the Trademarks for each
Property;
6.3.11 AFFIDAVIT. An Affidavit in the form and having the
substance of that attached hereto as EXHIBIT 7.3.11, fully executed and properly
acknowledged by the appropriate Sellers, as required by Internal Revenue Code of
1986, Section 1445 and California state law;
6.3.12 ASSIGNMENT OF INTERESTS. BPP and BPOP shall execute and
deliver to Buyer a fully executed Assignment and Assumption of Partnership
Interests substantially in the form of Exhibit 6.3.12(a) attached. BPOP shall
execute and deliver to Buyer a fully executed Assignment and Assumption of
Membership Interest in the form of EXHIBIT 6.3.12(b) attached;
6.3.13 AUTHORIZATION. A certificate of authority from Sellers
authorizing the Sales Transaction and designating the person or persons
authorized to sign documents on behalf of Sellers in connection therewith;
6.3.14 NOTICE LETTER. A form letter, in a mutually agreeable
form, to be prepared by Buyer, for each of the Properties, from Sellers to the
Tenants of their respective Properties advising the Tenants of the sale of the
respective Properties to Buyer, copies of which letters may be distributed by
Buyer to the Tenants and other parties;
6.3.15 FILES AND RECORDS. All originals and copies of all
documents, instruments, agreements and contracts, including, without limitation,
Tenant Leases, Service Contracts, Construction Contracts, loan documents for the
Assumed Indebtedness, Property Restrictions and Encumbrances, relating to such
Properties, all of such Properties' books, records and files (including
electronic files and records) and all permits, licenses and certificates of
occupancy for each of the Properties to the extent in Sellers', any Sellers
Subsidiaries' and their agents', managers' and employees' possession or control;
21
6.3.16 ENVIRONMENTAL INSURANCE. An assignment of an equitable
portion of the existing environmental insurance policy held by Sellers relating
to the Properties, such assignment to be in essentially the same form as used by
Sellers in connection with Sellers sales of other assets to Pacific Retail; and
6.3.17 OTHER MATTERS. Such other instruments or documents
consistent with the terms of this Agreement as may be reasonably requested by
Buyer or Escrow Agent or reasonably necessary to effect or carry out the
purposes of this Agreement.
6.4 BUYER'S CLOSING DELIVERIES. At the Closing, Buyer shall deliver to
Escrow Agent:
6.4.1 The funds necessary for payment of the Cash portion of
the Purchase Price payable for the Assets pursuant to PARAGRAPH 1.34;
6.4.2 In the event that Buyer elects to exercise its option to
pay a portion of the Purchase Price in Buyer Common Shares, Buyer Common Shares
necessary for the balance of the Purchase Price payable for the Assets pursuant
to PARAGRAPH 1.34;
6.4.3 The assignments and assumptions referred to in
PARAGRAPHS 6.3.2, 6.3.3, 6.3.4 AND 6.3.8 evidencing Buyer's agreement to the
terms thereof and assumption of the duties and obligations as more particularly
provided therein, as well as the Lock Up Agreement referred to in PARAGRAPH
6.3.16;
6.4.4 Evidence reasonably satisfactory to Sellers and Escrow
Agent that Buyer has duly authorized the Sales Transaction, and that the person
or persons executing all documents to be executed by Buyer in connection with
the Sales Transaction on behalf of Buyer is authorized to do so;
6.4.5 MANAGEMENT AGREEMENT. Evidence reasonably satisfactory
to Sellers that the Management Agreement has been duly terminated effective on
or before the Closing Date as to the Assets; and
6.4.6 Such other instruments or documents consistent with the
terms of this Agreement as may be reasonably requested by Sellers or Escrow
Agent, or necessary, to effect or carry out the purposes of this Agreement.
22
6.5 ESCROW AGENT'S DUTIES. At each Closing, Sellers and Buyer agree to
instruct Escrow Agent to: (i) record each of the Deeds in the applicable public
recording offices; (ii) deliver to Buyer and Sellers counterpart copies of the
documents referenced in PARAGRAPHS 6.3.3 THROUGH 6.3.11; (iii) disburse the
Purchase Price in accordance with the terms of this Agreement and a settlement
statement approved by Buyer and Sellers; (iv) issue a Title Policy for each of
the Properties that is the subject of the Closing; and (v) pursue such other
actions as Buyer and Sellers may request consistent with the terms of this
Agreement.
6.6 PRORATIONS; DEPOSITS; DELINQUENT RENTS. The following items shall
be prorated, allocated and/or adjusted (as appropriate) as of each Closing for
the Assets that are the subject of the Closing:
6.6.1 TAXES. Real and personal property taxes and assessments
pertaining to the Assets shall be apportioned between Sellers and Buyer in
accordance with the methodology set forth in Section 164(d) of the Code. Sellers
shall be responsible for all such taxes and assessments that are allocable to
any period prior to the Closing Date and Buyer shall be responsible for all such
taxes and assessments that are allocable to any period from and after the
Closing Date. To the extent any real or personal property taxes and assessments
subject to apportionment in accordance with the foregoing are, as of the Closing
Date, the subject of any appeal filed by or on behalf of Sellers, then
notwithstanding anything to the contrary contained in this paragraph: (i) no
apportionment of the taxes or assessment being appealed shall occur at the
Closing, but instead such apportionment shall be deferred until the outcome of
the appeal is final and the amount of taxes owing becomes fixed at which time
Sellers shall be responsible for all such taxes that are allocable to any period
prior to the Closing Date and Buyer shall be responsible for all such taxes and
assessments that are allocable to any period from and after the Closing Date;
and (ii) Sellers shall provide Buyer with adequate security, either in the form
of a bond or by escrowing the amounts being appealed, to assure Buyer that
Sellers' portion of such tax and assessment liability, including any penalty,
will be available. To the extent any taxes and assessments have been paid by
Sellers and such payment results in Buyer receiving a credit toward future tax
liability or a refund, then Buyer shall, within thirty (30) days following
receipt of such refund or notice of such credit, pay to Sellers the full amount
of such refund or credit allocable to the period prior to the Closing Date,
excluding, however, any portion of such refund or credit that is required to be
passed through to the tenants pursuant to any Tenant Leases or to other parties
by existing contract.
6.6.2 UTILITIES. All charges for fuel, water, sewer,
electricity and other utility services furnished to the Properties which are not
metered to Tenants occupying the Improvements. Sellers, to the extent the same
is obtainable, shall arrange for the utility companies to perform and furnish
meter readings for such utilities through the close of business on the day prior
to the Closing Date. If any such meter readings are not so obtainable, then
Sellers shall provide meter readings as of a date not more than 30 days prior to
the Closing Date, and the proration of utility charges shall initially be based
upon such prior reading. Upon the taking of actual meter readings first after
Closing, such proration shall be readjusted, outside of escrow and after
Closing, and Sellers or Buyer, as the case may be, shall promptly pay to the
other the amount determined to be so due upon such readjustment.
23
6.6.3 SERVICE CONTRACTS. All amounts prepaid and all
outstanding accounts receivable and payable under any of the Service Contracts
(except as to any Service Contract that is terminated on or before Closing and
such termination is effective before Closing in accordance with the provisions
of this Agreement) for the Assets shall be prorated as of the Closing Date.
6.6.4 TENANT LEASES. All base rents and other fixed sums paid
under the Tenant Leases for the Assets shall be prorated between Buyer and
Sellers. All refundable Tenant Deposits held by Sellers under such Tenant Leases
shall be paid to Buyer at Closing in the form of a credit against the Purchase
Price due from Buyer at Closing. Sellers shall transfer their entire interests
in any letters of credit or certificates of deposit held by them under such
Tenant Leases as deposits and shall diligently cooperate with Buyer in obtaining
any reissuance or confirmation of the effect of the transfer of such
instruments. Buyer shall not be entitled to any credit or reimbursement for rent
concessions granted by Sellers to any Tenants. All prepaid base rents and other
fixed charges under the applicable Tenant Leases attributable to the period
after Closing shall be credited to Buyer. Delinquent rents and other charges due
Sellers under the Tenant Leases as of the date of Closing shall not be prorated.
Buyer shall be credited in escrow with any leasing commissions, tenant
improvement allowances or other allowances to be paid by Buyer on or after the
Closing Date with respect to the current term of any Tenant Lease or Tenant
Lease modification executed, or any extension term or expansion of premises
exercised, in each case, on or before October 1, 2001. Seller shall be credited
in escrow with any leasing commissions, attorneys fees for drafting of leases,
tenant improvement allowances, or other allowances actually paid by Seller
before the Closing Date with respect to of any Tenant Lease or Tenant Lease
modification executed, or any extension term or expansion of premises exercised,
in each case, after October 1, 2001.
Any percentage rent, real estate taxes, parking charges,
operating and maintenance expenses, escalation rents or charges, electricity
charges, cost of living increases or any other charges of a similar nature other
than fixed or base rent under the applicable Tenant Leases (collectively, the
"ADDITIONAL RENTS") collected by Sellers prior to the Closing Date shall be
prorated as of the Closing Date between Buyer and Sellers. As soon as
practicable following the Closing, Sellers shall provide Buyer with information
regarding Additional Rents which were received by Sellers prior to Closing and
the amount of reimbursable expenses paid by Sellers prior to Closing. On or
before June 30, 2002, Buyer shall deliver to Sellers a reconciliation of all
expenses reimbursable under the Tenant Leases, and the amount of Additional
Rents received by Sellers and Buyer relating thereto (the "RECONCILIATION").
Upon reasonable notice and during normal business hours, each party shall make
available to the other all information reasonably required to confirm the
Reconciliation. In the event of any overpayment of Additional Rents by the
tenants to Sellers, Sellers shall promptly, but in no event later than twenty
(20) days after receipt of the Reconciliation, pay to Buyer the amount of such
overpayment and Buyer, as the landlord under the particular Tenant Leases, shall
pay or credit to each applicable tenant the amount of such overpayment. In the
event of an underpayment of Additional Rents by the tenants to Sellers, Buyer
shall pay to Sellers the amount of such underpayment within twenty (20) days
following Buyer's receipt of any such amounts from the tenants.
Any rents or other sums that are due and payable under any
Tenant Leases on or prior to the Closing Date, but which have not been collected
by Sellers on or prior to the Closing Date, or payment of which has been
deferred until after the Closing Date (the "ARREARS"), to the
24
extent applicable to any period of time on or prior to the Closing Date, and
which are paid after the Closing Date shall, subject to the terms below, be paid
to Sellers and if the Arrears are received by Buyer, Buyer shall pay the Arrears
to Sellers after collection by Buyer. Buyer shall use reasonable efforts (but
shall not be required to commence legal action or terminate or evict a tenant)
to collect or cause to be collected such Arrears following the Closing Date. Any
and all rents so collected by Buyer following the Closing (less a deduction for
all reasonable collection costs and expenses incurred by Buyer) shall be
successively applied (after deduction for Buyer's reasonable collection costs
and expenses) to the payment of (x) delinquent amounts due Buyer and (y)
delinquent amounts due Sellers. If all or part of any rents or other charges
received by Buyer following the Closing are allocable to Sellers pursuant to the
foregoing sentence, then such sums shall be promptly paid to Sellers. Sellers
reserves the right to pursue any damages remedy Sellers may have against any
tenant with respect to such Arrears, but shall have no right to exercise any
other remedy under the Lease (including, without limitation, termination or
eviction).
6.6.5 DEPOSITS. All utility deposits paid by Sellers shall be
refunded to Sellers at or as of the Closing. The parties acknowledge that the
Xxx Xxxx Owners Association (the "Association") is obligated to repay to BPOP
certain advances made by BPOP in amount aggregating approximately $900,000 (the
"BPOP Advances"). The parties further acknowledge that following Closing Buyers
will own an approximately 50% interest in the Association (the "Buyer's
Interest"). Following Closing, Buyers shall use reasonable efforts to cause the
Association (and the Association's members) to promptly repay to BPOP the full
amount of the BPOP Advances, and such reasonable efforts shall include causing
the Association to exercise its rights pursuant to its organizational documents
to collect past due assessments from its members. In connection with any such
payment of the BPOP Advances by the Association, Buyers shall have the right to
retain a percentage of each such payment equal to the Buyer's Interest.
6.6.6 PREPAID EXPENSES. Buyer shall be charged for those
prepaid expenses paid by Sellers allocable to any period from and after the
Closing Date, including, without limitation, annual permit and confirmation
fees, fees for licenses and all security or other deposits paid by Sellers to
third parties which Buyer elects to assume and to which Buyer then shall be
entitled to the benefits and refund following the Closing Date. Prepaid expenses
shall not include any loan extension or renewal fees.
6.6.7 INTENTIONALLY DELETED.
6.6.8 OTHER MATTERS. With respect to each Property, such other
matters as are customarily prorated by the Escrow Agent in transactions of a
similar nature in county in which each respective Property is located.
6.6.9 COOPERATION. Sellers and Buyer shall duly cooperate with
each other and the Escrow Agent in making prorations, adjustments and credits
pursuant to the foregoing and shall, as requested by the Escrow Agent, furnish
to the Escrow Agent such information in the possession of, or reasonably
obtainable by them to assist in making such prorations, adjustments or credits.
In the event, for any reason beyond the reasonable control of the parties
hereto, information necessary to calculate any proration, adjustment or credit
for any item required to be prorated, adjusted or credited under this Paragraph
is not available prior to Closing, then such
25
item shall be prorated, adjusted or credited outside of escrow after Closing as
soon as such information is available, and Sellers and Buyer shall duly
cooperate with each other in regard thereto and shall pay, one to the other, any
amounts which may be owing as a result of any such subsequent proration,
adjustment or credit. In the event, at any time after Closing, errors shall be
discovered in any prorations, adjustments or credits made pursuant to this
Paragraph, Sellers and Buyer shall correct such errors and shall pay, one to the
other, any sums owing as a result of such corrections.
6.7 CLOSING COSTS/TRANSFER EXPENSES. Except as otherwise set forth in
this Agreement, each party shall bear its own costs (including attorneys' fees)
in connection with its negotiation of this Agreement, due diligence
investigation and conduct of the Sales Transaction. Sellers shall pay all
transfer, stamp or similar taxes payable as a result of the Sales Transaction,
premiums for the Title Policies (but not the premiums for any endorsements to
the Title Policies required by Buyer), and any consent, request or review fees.
Escrow fees of Escrow Agent and recording fees (except stamp taxes, if any,
which shall be paid by Sellers) shall be divided equally between Buyer and
Sellers. All other costs associated with the closing of the Sales Transaction
shall be borne by the parties in accordance with custom in the county of the
Property which generated the cost is located, as determined by Escrow Agent,
unless otherwise specified in this Agreement.
6.8 POSSESSION. Immediately after the Closing, Buyer shall be entitled
to possession of the Assets that are the subject of the Closing in place on the
date of such Closing subject to the rights of the Tenants.
ARTICLE VII
COVENANTS
7.1 CONDUCT BY SELLERS. Prior to the closing, Sellers shall continue to
perform all of the duties and obligations of Sellers under the Service
Contracts, Management Agreement and Material Leases in the time and manner
required by such agreements. Without limiting the generality of the foregoing,
and except as set forth on Sellers Disclosure Schedule, Sellers shall not do any
of the following (except as expressly consented to by Buyer, in writing, which
consent shall not be unreasonably withheld, delayed or conditioned):
7.1.1 acquire, sell, encumber, transfer or dispose of any
Assets outside the ordinary course of business (whether by asset acquisition,
stock acquisition or otherwise), except pursuant to obligations in effect on the
date hereof or as set forth in Sellers Disclosure Schedule,
7.1.2 lease any space to any tenant in any of the Properties,
grant any lease concessions or credits or reimbursements under any Tenant Leases
or terminate, amend, alter or accept of the surrender of any Tenant Leases,
including, without limitation, the Material Leases;
7.1.3 enter into, amend or terminate any contract with respect
to any of the Properties that is not terminable on 30 days' notice involving the
payment of more than $2,500 per annum;
26
7.1.4 create, permit, suffer or place any charge, lien or
encumbrance on any of the Properties (except for liens for Taxes not yet due and
payable);
7.1.5 alter, modify or amend any of the Encumbrances or
Property Restrictions;
7.1.6 terminate or allow to lapse any insurance policies
maintained by Sellers for any of the Properties on the Effective Date;
7.1.7 except as contemplated by this Agreement (including,
without limitation, PARAGRAPH 7.14), cause or permit Historic Xxx Xxxx or
BPP/Xxx Xxxx Operating Co. to incur or assume any indebtedness for borrowed
money, or guarantee of any such indebtedness, except non-material indebtedness
incurred in the ordinary course of business consistent with past practice, or
7.1.8 enter into an agreement to take any of the foregoing
actions.
Buyer shall be deemed to have consented to the foregoing if Buyer does
not object to any of the foregoing within five Business Days after receipt of
written request for consent.
7.2 CONDUCT BY BUYER. Buyer shall conduct or cause DDR to conduct the
operations of each of the Properties in the ordinary course of its business
consistent with past practice and operate, maintain and repair the Properties in
the ordinary course of its business consistent with past practice, in each case
in accordance with the LSA. After the date hereof and prior to the Closing,
Buyer shall not do any of the following (except as expressly consented to by
Sellers, in writing, which consent shall not be unreasonably withheld, delayed
or conditioned):
7.2.1 directly or indirectly, split, combine or reclassify the
outstanding Buyer Common Stock;
7.2.2 take, or agree to commit to take, any action that would
make any representation or warranty of Buyer contained herein inaccurate in any
respect at, or as of any time prior to the Closing;
7.2.3 enter into an agreement to take any of the foregoing
actions.
7.3 NO SOLICITATIONS. Sellers shall immediately terminate any
discussions or negotiations with respect to any proposal to sell any or all of
the Assets. Sellers shall not and shall not authorize or permit any of their
respective officers, directors, or employees or any investment banker, financial
advisor, attorney, accountant or other representative retained by Sellers or
otherwise acting on Sellers' behalf to, directly or indirectly: (i) take any
action for the primary purpose of soliciting, initiating or encouraging any
inquiries or making any proposal to sell any or all of the Assets; or (ii)
participate in any discussions or negotiations for the sale of any or all of the
Assets. Sellers shall not enter into any agreements for the sale, conveyance,
exchange, disposition or transfer of all or any of the Assets.
7.4 REQUIRED FILINGS AND CONSENTS. Sellers agree to use reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to: (i) consummate and make
effective as promptly as practicable the Sales
27
Transaction, including the taking of such actions as are necessary to obtain any
necessary consents, approvals, orders, exemptions and authorizations by or from
any public or private third party, including, without limitation, any that are
required to be obtained under any federal, state or local law or regulation and
the Required Consent; (ii) defend all lawsuits or other legal proceedings
challenging this Agreement or to consummation of the Sales Transaction; (iii)
cause to be lifted or rescinded any injunction or restraining order or other
order adversely affecting the ability of Buyer and Sellers to consummate the
Sales Transaction; and (iv) effect all necessary registrations and submissions
of information requested by governmental authorities. For purposes of the
foregoing sentences, the obligation of Sellers to use their "reasonable efforts"
to obtain the Required Consent and any other waivers, consents and approvals to
loan agreements, leases and other contracts shall not include any obligations to
agree to an adverse modification of the terms of such document or to prepay or
incur an additional obligation not contemplated by such documents to such other
parties, except for commercially reasonable fees and costs charged by the party
from whom the waiver, consent or approval is sought, which Sellers shall agree
to pay, unless: (a) Buyer agrees to such modification or payment at Closing; or
(b) any such payments or modifications are required by the terms of the
agreements, leases or other contracts as a result of the Sales Transaction, in
which event Sellers shall agree to such modification and make such payments. If,
at any time after the Effective Date, any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of Buyer and Sellers shall take all action.
7.5 REGISTRATION STATEMENT; NYSE LISTING. If Buyer shall not have filed
with the SEC the Registration Statement within 20 days following the Effective
Date, Buyer's right to pay a portion of the Purchase Price in the form of Buyer
Common Shares pursuant to PARAGRAPH 1.34 and Buyer's right to extend the Closing
Date pursuant to PARAGRAPH 6.2 shall each be deemed to have been extinguished,
and of no further force and effect. If, however, Buyer files with the SEC the
Registration Statement on or prior to the 20th day following the Effective Date,
Buyer (i) shall cause the Registration Statement to comply as to form in all
material respects with the applicable provisions of the Securities Act and the
rules and regulations thereunder, and (ii) shall take any and all action
required under any applicable Federal or state securities laws in connection
with the issuance of shares of Buyer Common Stock pursuant to this Agreement and
the Sales Transaction. In such case, Buyer shall use its best efforts to cause
the shares of Buyer Common Stock to be issued in the Sales Transaction to be
listed on the New York Stock Exchange as of the Closing Date. The foregoing
covenants of Buyer set forth in this PARAGRAPH 7.5 shall be of no further force
and effect in the event that, prior to February 25, 2002, Buyer delivers written
notice to BPP of its irrevocable election to waive any rights of Buyer under
this Agreement to pay any portion of the Purchase Price in the form of Buyer
Common Shares.
7.6 INTENTIONALLY DELETED.
7.7 ESTOPPELS. Buyer may prepare the actual estoppel certificates to be
presented to each such Material Tenant, obligor and other parties under the
Property Restrictions once the general form for each type of estoppel
certificate is agreed upon by Sellers and Buyer. For purposes of this PARAGRAPH
7.7, Buyer shall not have any obligation to agree to an adverse modification of
the terms of such documents for which the estoppel is sought or to incur
additional obligations not contemplated by such documents to such other parties
unless Buyer
28
agrees to such modification or obligation at Closing. Sellers also agrees to
allow Buyer to submit tenant estoppel certificates to all Tenants.
7.8 TITLE AND SURVEY MATTERS. Sellers shall use reasonable efforts to
resolve: (i) the title and survey matters addressed on SCHEDULE 7.8; and (ii)
any adverse title and survey matters revealed on any updates to the Preliminary
Title Reports or the survey, respectively, that may be obtained by Buyer after
the Effective Date which were not disclosed in the Preliminary Title Reports or
the preliminary survey, in each case to the reasonable satisfaction of Buyer. On
or before the Closing, Sellers shall eliminate any deeds of trust, mortgages,
judgment liens, mechanics' liens, materialmen's liens and any other monetary
liens encumbering the Assets, except monetary liens not arising from the acts or
omissions of Sellers or any of their respective employees, agents, contractors,
or affiliates. Sellers shall satisfy all of the requirements of the Escrow Agent
required for the issuance of each Title Policy (excluding any requirements
relating to the issuance of endorsements, provided however, that Sellers shall
execute affidavits reasonably required by the title company and reasonably
agreed to by Sellers, to allow Buyer to obtain a non-imputation endorsement).
For the purposes of this PARAGRAPH 7.8, "reasonable efforts" to resolve title
and survey matters shall not include any obligation to agree to take any action
that will have an adverse effect on any of the Properties or obligation to pay
an unreasonable amount to resolve the matter.
7.9 RISK OF LOSS. Subject to the provisions of this PARAGRAPH 7.9, the
risk of loss as to all of the Properties shall be upon Sellers until Closing. In
the event of any material (as defined below) loss or damage to, material
threatened or actual condemnation or other eminent domain proceeding affecting
any of or a material transfer in lieu of condemnation approved by Buyer pursuant
to PARAGRAPH 7.1 of any of the Properties prior to the Closing, Buyer may
terminate this Agreement as to the affected Property within ten (10) days after
the later of the Effective Date or the date Buyer is notified in writing by
Sellers of such casualty event or condemnation. Upon such termination, the
Purchase Price for the Assets shall be reduced by the amount of the Purchase
Price allocated for the Property that has incurred the casualty damage. If Buyer
does not so terminate this Agreement as to the affected Property, Buyer shall be
deemed to have waived the material loss or damage, condemnation or transfer in
lieu of condemnation and shall proceed to close, as provided hereinbelow. If
Buyer waives any material loss or damage to, condemnation or transfer in lieu of
condemnation of any Property and proceeds to consummate the Purchase and Sale
Transaction, or in the event of immaterial loss, damage or condemnation as to
any Property and Sellers have not repaired, replaced or otherwise restored the
damaged aspects of the affected Property prior to the applicable Closing, the
parties shall close on the applicable Closing Date, and, at Sellers' election,
either: (i) there shall be a reduction of the Purchase Price in an amount equal
to the proceeds payable to Sellers as a result of such material loss or damage,
condemnation or transfer in lieu of condemnation; or (ii) Sellers shall pay to
Buyer at the Closing the amount of (i) any insurance or condemnation proceeds
payable as a result of such material loss or damage, condemnation or transfer in
lieu of condemnation and assign to Buyer in a manner reasonably acceptable to
Buyer as of the Closing all rights or claims to proceeds payable thereafter, and
(ii) the insurance deductible. A material loss, damage, taking or transfer in
lieu of condemnation is any loss, damage, taking or transfer in lieu of
condemnation to any one Property the cost of which to replace or repair exceeds
$750,000 or a taking of any portion of any Property that impairs the continued
use or operation of such portion of that Property substantially as used or
operated prior to the taking.
29
7.10 MANAGEMENT AGREEMENT. Sellers shall, and Buyer shall cause DDR to,
terminate the Management Agreement with respect to the Assets effective on or
before the Closing Date.
7.11 CONSTRUCTION. All work shall be completed in a good and
workmanlike manner and in accordance with the terms of applicable Tenant Leases.
Sellers shall provide the Escrow Agent with such documents and indemnities
necessary for the issuance of each Title Policy without exception for mechanics'
or materialmen's liens.
7.12 LOCK UP AGREEMENT. Sellers shall not offer, pledge, sell, contract
to sell, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any of the Buyer Common Shares received by Sellers pursuant to the
Sales Transaction contemplated by this Agreement, except that the foregoing
restrictions shall not apply to any distribution by any Seller of such Buyer
Common Shares to (i) any other Seller or (ii) any shareholders, partners or
members, as applicable, of such Seller.
7.13 TENANT IMPROVEMENTS AND LEASING COMMISSIONS FOR INTERIM LEASES. As
to proposed leases presented to Buyer by Sellers for Buyer's approval pursuant
to this PARAGRAPH 7.1.3 that would require any Tenant improvement work or the
payment of any leasing commissions or attorneys fees from and after October 1,
2001, then if Buyer approves any such lease, Buyer shall pay the cost of such
tenant improvements, attorneys fees and leasing commissions. If any such
Property is not acquired by Buyer, then Sellers shall reimburse Buyer in the
amount of the tenant improvements, attorneys fees and leasing commissions so
funded by Buyer upon Buyer's written demand, such reimbursement to be without
interest. If the reimbursement is not made within ten (10) days after Buyer's
demand therefore, the amount of the claim for the Tenant improvements, attorneys
fees and leasing commissions so funded shall accrue interest at the lesser of
18% or the highest lawful rate from and after the date of such written demand.
7.14 OTHER MATTERS. At and as of the Closing, if Sellers have caused
the Assumed Commercial Construction Loan (as defined in the Operating Agreement)
to be repaid in full, and if Sellers have caused any replacement loan to be
forgiven or repaid in full, immediately upon consummation of the Sales
Transaction, Buyer shall cause Historic Xxx Xxxx to be obligated to pay a loan
in a principal amount of not less than $15,118,000, in accordance with the terms
of the Operating Agreement.
In the event that the Final Capital Contribution (as such term is
defined in the Operating Agreement) from Transamerica to Historic Xxx Xxxx in
the approximate amount of $1,374,930.00 has not been made, or if Historic Xxx
Xxxx has not distributed such amount to BPOP before Closing, then following
Closing, Buyer shall fully cooperate with the Sellers to cause Transamerica to
make such Final Capital Contribution and the full amount of such contribution
shall be immediately paid via wire transfer to BPOP. As part of such
cooperation, Buyer shall fully comply with the terms of the Operating Agreement
and shall execute all documents reasonably requested by BPOP or Transamerica, at
no cost to Buyer. Sellers shall assign to Buyer the right to receive such
payment. As of the Closing Date, Buyer shall execute all documents necessary to
assume all obligations of Sellers under the Tax Credit Guaranty.
30
BPOP shall pay, or cause to be paid, when due, $1,200,000 owed by BPOP
to Xxxxxx & Noble under the First Amendment to the Xxxxxx & Xxxxx Lease.
7.15 AMENDMENT TO OPERATING AGREEMENT. Buyer shall execute a
counterpart to an amendment to the Operating Agreement, dated as of the Closing
Date, admitting Buyer as a substituted managing member and terminating all
obligations of BPOP arising from such entity's status as managing member.
7.16 REASONABLE EFFORTS. Each of Buyer and Sellers shall use all
reasonable efforts to satisfy the conditions to Closing set forth in Article V,
and otherwise to consummate the Sales Transaction as expeditiously as possible.
ARTICLE VIII
TERMINATION, AMENDMENT, WAIVER AND LIMITATION
8.1 TERMINATION. This Agreement may be terminated and abandoned at any
time after the Effective Date and prior to the Closing:
8.1.1 by the mutual written consent of BPP and Buyer;
8.1.2 by either BPP or Buyer if the condition set forth in
PARAGRAPH 5.1.1 is not satisfied as of February 28, 2001;
8.1.3 by Buyer if the conditions set forth in PARAGRAPH 5.2
are not satisfied or waived on or before February 28, 2001;
8.1.4 by BPP if the conditions set forth in PARAGRAPH 5.3 are
not satisfied or waived on or before February 28, 2001; or
8.1.5 by either Buyer or BPP (the "NON-DEFAULTING PARTY")
(provided that such party is not then in breach of any representation, warranty,
covenant or other agreement contained herein), if the other party (the
"Defaulting Party") shall have breached or failed to perform in any material
respect any of its covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure of the
condition set forth in either PARAGRAPH 5.2.4 or PARAGRAPH 5.3.2, as applicable,
and (B) is incapable of being cured by the Defaulting Party or is not cured
within 10 Business Days of written notice thereof.
8.1.6 Intentionally Deleted.
8.1.7 Intentionally Deleted.
8.2 EFFECT OF TERMINATION.
8.2.1 In the event of the termination of this Agreement
pursuant to PARAGRAPH 8.1 hereof, this Agreement shall forthwith become null and
void and have no effect, without any liability on the part of any party hereto
or its affiliates, trustees, directors, officers, stockholders, partners or
members, and all rights and obligations of any party hereto shall cease,
31
except for the agreements and rights contained in PARAGRAPHS 11.11, 11.15 and
this PARAGRAPH 8.2.
8.2.2 If this Agreement is terminated by:
(i) Buyer as a result of: (a) the failure of any
conditions contained in PARAGRAPH 5.2.1 to be satisfied, timely, as a result of
an untrue, inaccurate or false representation and warranty of which Sellers have
Knowledge as of the Effective Date, pursuant to PARAGRAPH 8.1.3; or (b) the
breach of any term or covenant of this Agreement by BPP, pursuant to PARAGRAPH
8.1.5; or
(ii) Buyer or BPP pursuant to PARAGRAPH 8.1.2,
then, in any such case, Buyer shall have all rights and remedies available at
law or in equity against Sellers.
8.2.3 If this Agreement is terminated by BPP as a result of
the breach of any term or covenant of this Agreement by Buyer pursuant to
PARAGRAPH 8.1.5 or if this Agreement is terminated by BPP pursuant to PARAGRAPH
8.1.4, then the Xxxxxxx Money Deposit then on deposit with BPP shall be paid to
BPP as liquidated damages (the "Liquidated Amount") and Sellers' sole remedy for
such breach.
8.2.4 Intentionally Deleted.
8.2.5 If this Agreement is terminated by Buyer or BPP for any
reason pursuant to this Agreement except for a termination by BPP pursuant to
PARAGRAPH 8.1.4 or as a result of a Buyer's breach pursuant to PARAGRAPH 8.1.5,
then the Xxxxxxx Money Deposit then on deposit with BPP shall be paid to Buyer.
8.2.6 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, BUYER AND SELLERS EXPRESSLY ACKNOWLEDGE AND AGREE THAT THE PAYMENT OF
THE LIQUIDATED AMOUNT TO BUYER OR XXXXXXX MONEY TO SELLERS, AS APPLICABLE,
PURSUANT TO PARAGRAPHS 8.2.3 OR 8.2.5, SHALL CONSTITUTE LIQUIDATED DAMAGES WITH
RESPECT TO ANY CLAIM FOR DAMAGES OR ANY OTHER CLAIM WHICH BUYER OR SELLERS WOULD
OTHERWISE BE ENTITLED TO ASSERT AGAINST THE OTHER OR ANY OF ITS RESPECTIVE
ASSETS, OR AGAINST ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
PARTNERS, MANAGERS, MEMBERS OR SHAREHOLDERS, WITH RESPECT TO THIS AGREEMENT AND
THE SALES TRANSACTIONS AND SHALL CONSTITUTE THE SOLE AND EXCLUSIVE REMEDY
AVAILABLE TO BUYER OR SELLERS, AS APPLICABLE. THE PARTIES HERETO EXPRESSLY
ACKNOWLEDGE AND AGREE THAT IN LIGHT OF THE DIFFICULTY OF ACCURATELY DETERMINING
ACTUAL DAMAGES WITH RESPECT TO A TERMINATION OF THIS AGREEMENT AS A RESULT OF
THE FOREGOING, THE RIGHT TO PAYMENT OF THE LIQUIDATED AMOUNT OR XXXXXXX MONEY
DEPOSIT, AS APPLICABLE: (I) CONSTITUTES A REASONABLE ESTIMATE OF THE DAMAGES
THAT WILL BE SUFFERED AS A RESULT OF ANY SUCH PROPOSED OR ACTUAL TERMINATION OF
THIS AGREEMENT; AND (II) SHALL BE IN FULL AND COMPLETE SATISFACTION OF ANY
32
AND ALL DAMAGES ARISING AS A RESULT OF THE FOREGOING, AND NONE OF THE PARTIES
HERETO SHALL CHALLENGE, IN COURT OR OTHERWISE, THE REASONABLENESS OF SUCH
ESTIMATE.
----------------------------- -----------------------------------
BPP, on behalf of all Sellers Buyer
8.3 AMENDMENT. This Agreement may be amended by the parties hereto by
an instrument in writing signed by each of the parties hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Closing, the parties
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto;
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto; and (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed by such party.
8.5 LIMITATION OF CLAIMS. Notwithstanding anything herein to the
contrary, Sellers' post-closing liability for all suits, actions, proceedings,
demands, claims, liabilities, liens, judgments, losses, injuries, damages,
expenses and costs, including reasonable attorneys' and experts fees, and costs
and investigation and remediation costs with respect to or arising as a result
of: (i) any of Sellers' representations or warranties contained in this
Agreement being false, untrue or inaccurate; or (ii) any claims of any of Buyer
Parties (as defined in PARAGRAPH 9.1), shall not exceed, in the aggregate, an
amount equal to $5,000,000.00 (the "Liability Cap"); provided, however, that
such limitation shall not apply in the event of fraud or intentional
misrepresentation by Sellers.
8.6 INTENTIONALLY DELETED.
ARTICLE IX
INTENTIONALLY DELETED
ARTICLE X
SELLERS' DISCLAIMER
Buyer acknowledges that it has managed and will continue to manage the
operations and business of the Properties pursuant to the LSA and that it and
its agents and representatives have had the opportunity to conduct such
appraisals and investigations of the Properties including, without limitation,
investigations with respect to the physical, environmental, economic and legal
condition of the Properties, prior to the Effective Date. Buyer acknowledges:
(i) that, except for the representations, warranties and indemnities expressly
contained in this Agreement, Buyer has entered into this Agreement with the
intention of making and relying upon its own investigation of the physical,
environmental, economic and legal condition of the Properties; (ii) that, except
for the representations, warranties and indemnities contained in this Agreement,
Sellers are not
33
making and have not at any time made any warranty or representation of any kind,
expressed or implied, with respect to the Properties, including, without
limitation, warranties or representations as to habitability, merchantability,
fitness for a particular purpose, title (other than Sellers' limited warranty of
title set forth in the deeds), zoning, tax consequences, latent or patent
physical or environmental condition, utilities, operating history or
projections, valuation, projections or compliance with law; (iii) that, except
for the representations, warranties and indemnities contained in this Agreement,
Buyer is not relying upon and is not entitled to rely upon any representations
and warranties made by Sellers or anyone acting or claiming to act on any of
Sellers' behalf, and (iv) that Sellers Disclosure Schedule may include economic
projections prepared by Buyer which reflect assumptions as to future market
status and future income and expense with respect to the Properties which are
inherently uncertain and as to which Sellers have not made any guaranty or
representation whatsoever. Buyer further acknowledges that it has not received
from Sellers any accounting, tax, legal, architectural, engineering, property
management or other advice with respect to this transaction and is relying
solely upon the advice of its own accounting, tax, legal, architectural,
engineering, property management or other advisors. Except for the
representations, warranties and indemnities contained in this Agreement, based
upon the extent of Buyer's familiarity with and due diligence relating to the
Properties and pertinent knowledge as to the markets in which the Properties are
situated and in direct consideration of Sellers' decision to sell the Properties
and the Interests to Buyer and not to pursue available disposition alternatives,
Buyer shall purchase the Properties in an " AS IS, WHERE IS AND WITH ALL FAULTS"
condition on the Closing Date and assumes fully the risk that adverse latent or
patent physical, environmental, economic or legal conditions may not have been
revealed by its investigations. Sellers and Buyer agree that the provisions of
this ARTICLE X shall survive closing.
ARTICLE XI
GENERAL PROVISIONS
11.1 INTENTIONALLY DELETED.
11.2 NOTICES. Except as otherwise required by law, any notice given in
connection with the Sales Transaction shall be in writing and shall be given by
personal delivery, telecopy transmission or overnight courier service, postage
prepaid, addressed to Sellers or Buyer at the following addresses (or at such
other address as Sellers or Buyer or the person receiving copies may designate
in writing in accordance with this Paragraph):
Buyer: Developers Diversified
Realty Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Telecopier No. 000-000-0000
34
With a Copy to: Developers Diversified Realty Corporation
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxx, Esq.
Telecopier No.: 216-755-1678
Sellers: Xxxxxxx Pacific Properties
000 Xxxx Xxxxxx, #0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telecopier No. 000-000-0000
With a Copy to: Xxxxxxx Pacific Properties
000 Xxxx X Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telecopier No. 000-000-0000
With a Copy to: Xxxxxxx Xxxx Slate Xxxxxxx & Xxxx
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopier No. 000-000-0000
Escrow Agent: Chicago Title Company
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Telecopier No. 000-000-0000
Notice shall be deemed to have been given and received on the date on
which notice is delivered, if notice is given by personal delivery or telecopy
or, on the Business Day following the date of delivery to the overnight courier
service, if such a service is used. Copies of all notices given to Sellers or
Buyer shall be given to Escrow Agent.
11.3 ADDITIONAL ACTS. The parties agree to execute promptly such other
documents and perform such other acts as may be reasonably necessary to carry
out the purpose and intent of this Agreement.
11.4 TIME OF ESSENCE. Time is of the essence of this Agreement. Time
within which an act must be accomplished shall be computed by excluding the
first day and including the last day. If, however, this Agreement requires any
act to be done or action to be taken on a date which is not a Business Day, such
act or action shall be deemed to have been validly done or taken if done or
taken on the next succeeding Business Day.
11.5 WAIVER. The waiver by any party hereto of any right granted to it
hereunder shall not be deemed to be a waiver of any other right granted
hereunder, nor shall the same be deemed
35
to be a waiver of a subsequent right obtained by reason of the continuation of
any matter previously waived.
11.6 CONSTRUCTION. This Agreement is the result of negotiations between
the parties, neither of whom has acted under any duress or compulsion, whether
legal, economic or otherwise. Accordingly, the terms and provisions hereof shall
be construed in accordance with their usual and customary meanings. Sellers and
Buyer hereby waive the application of any rule of law which otherwise would be
applicable in connection with the construction of this Agreement that ambiguous
or conflicting terms or provisions should be construed against the party who (or
whose attorney) prepared the executed Agreement or any earlier draft of the
same.
11.7 INTERPRETATION. If there is any specific and direct conflict
between, or any ambiguity resulting from, the terms and provisions of this
Agreement and the terms and provisions of any document, instrument or other
agreement executed in connection herewith or in furtherance hereof, including
any exhibits hereto, the same shall be consistently interpreted in such manner
as to give effect to the general purposes and intention as expressed in this
Agreement but if such consistency cannot be achieved, the provisions of such
other document instrument or other agreement shall control and shall be deemed
to be an amendment to this Agreement provided such other document so provides.
11.8 HEADINGS. The headings in this Agreement are for reference only
and shall not limit or define the meaning of any provision of this Agreement.
11.9 NO THIRD PARTY BENEFICIARY. No term or provision of this Agreement
or the Exhibits hereto is intended to be, nor shall any such term or provision
be construed to be, for the benefit of any person, firm, corporation or other
entity not a party hereto (including, without limitation, any broker), and no
such other person, firm, corporation or entity shall have any right or cause of
action hereunder.
11.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. The representations, warranties, covenants and agreements contained
in this Agreement or in any instrument delivered pursuant to this Agreement,
shall survive the Closing for a period of 12 months, and thereafter there shall
be no liability on the part of Sellers or any of their respective officers,
directors, stockholders, partners or members in respect thereof. All claims must
be made in writing during such 12-month period. Except as expressly set forth in
this Agreement, there are no representations or warranties of any party hereto,
express or implied.
11.11 INJUNCTION. The parties hereto 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 shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in the California Courts (as hereinafter
defined), this being in addition to any other remedy to which they are entitled
under this Agreement, at law or in equity.
11.12 MISCELLANEOUS. This Agreement and the Confidentiality Agreement,
dated September 19, 2001, by and between Buyer and BPP, (i) constitute the
entire agreement and
36
supersede all of the other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof; (ii) shall be binding upon and inure to the benefits of the parties
hereto and their respective successors and assigns and is not intended to confer
upon any other person (except as expressly set forth herein) any rights or
remedies hereunder; and (iii) this Agreement may be executed in two or more
counterparts which together shall constitute a single agreement.
11.13 ASSIGNMENT. Except as expressly permitted in PARAGRAPH 6.1 and by
the other terms hereof, neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by either party hereto without the
prior written consent of the other party.
11.14 SEVERABILITY. If any provision of this Agreement, or the
application thereof to any person or circumstance is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
11.15 CHOICE OF LAW/CONSENT TO JURISDICTION. All disputes, claims or
controversies arising out of this Agreement, or the negotiation, validity or
performance of this Agreement, or the Sale Transaction shall be governed by and
construed in accordance with the laws of the State of California without regard
to its rules or conflict of laws. Each party hereby irrevocably and
unconditionally consents to submit to the sole and exclusive jurisdiction of the
courts of the State of California and of the United States of America located in
the State of California (the "California Courts") for any litigation arising out
of or relating to this Agreement, or the negotiation, validity or performance of
this Agreement, or the Sale Transaction (and agrees not to commence any
litigation relating thereto except in such courts), waives any objection to the
laying of venue of any such litigation in the California Courts and agrees not
to plead or claim in any California Court that such litigation brought therein
has been brought in any inconvenient forum. Each of the parties hereto agrees:
(i) to the extent such party is not otherwise subject to service of process in
the State of California, to appoint and maintain an agent in the State of
California as such party's agent for acceptance of legal process; and (ii) that
service of process may also be made on such party by prepaid certified mail with
a proof of mailing receipt validated by the United States Postal Service
constituting evidence of valid service. Service made pursuant to (i) or (ii)
above shall have the same legal force and effect as if served upon such party
personally within the State of California.
11.16 INCORPORATION. Sellers Disclosure Schedule and all Exhibits and
Schedules attached hereto and thereto are referred to herein and therein
respectively, are hereby incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
11.17 NATURAL HAZARD AREAS. Buyer and Sellers acknowledge that Sellers
are required to disclose if the Property lies within the following natural
hazard areas or zones: (1) a special flood hazard area designated by the Federal
Emergency Management Agency (Cal. Civ. Code Section 1102.17); (2) an area of
potential flooding (Cal. Gov. Code Section 8589.4); (3) a very high fire hazard
severity zone (Cal. Gov. Code Section 51183.5); (4) a wild land area that may
contain substantial forest fire risks and hazards (Pub. Resources Code Section
4136); (5) an earthquake fault zone (Pub. Resources Code Section 2621.9); or (6)
a seismic hazard zone (Pub. Resources Code Section 2694).
37
11.18 PUBLICITY. So long as this Agreement is in effect, neither Buyer
nor Sellers shall issues or cause the publication of any press release or other
public announcement with respect to the Sales Transaction without the consent of
the other party or parties, as applicable (which consent shall not be
unreasonably withheld or withdrawn), except as may be required by law or the
regulations of any securities exchange, as determined by counsel for either
party.
[Signature pages follow]
38
Counterpart Signature Page
PURCHASE AND SALE AGREEMENT
IN WITNESS HEREOF, Buyer and each Seller have caused this Agreement to
be signed by its respective officers thereunto duly authorized.
SELLERS:
XXXXXXX PACIFIC PROPERTIES, INC.
a Maryland corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
XXXXXXX PACIFIC OPERATING PARTNERSHIP, L.P.
a Delaware limited partnership
By: Xxxxxxx Pacific Properties, Inc.
a Maryland corporation
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
BPP/XXX XXXX, X.X.
a California limited partnership
By: Xxxxxxx Pacific Operating Partnership,
L.P., a Delaware limited partnership
Its: General Partner
By: Xxxxxxx Pacific Properties, Inc.
a Maryland corporation
Its: General Partner
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: Chief Executive Officer
-------------------------------------
Counterpart Signature Page
PURCHASE AND SALE AGREEMENT
IN WITNESS HEREOF, Buyer and each Seller have caused this Agreement to
be signed by its respective officers thereunto duly authorized.
BUYER:
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio
corporation
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Senior Vice President and General
-------------------------------------
Counsel and Secretary
-------------------------------------
2
